Sep 17, 2004, 10:09 AM
Post #19 of 42
From the following source: http://www.thornburginvestments.com/...r_int_value_comm.asp:
Wal-Mart de Mexico, S.A. de C.V. (WALMEXV MM)
Wal-Mart de Mexico (Wal-Mex) is a leading retailer in Mexico, with presence in 60 cities nationwide. The company has identified a total of 140 cities where they believe a presence is justified. Wal-Mex operates nearly 650 commercial units, including self-service stores (SAM'S Club, Wal-Mart Supercenter, Superama, Bodega), and restaurants (Vips, El Porton, Ragazzi). Wal-Mex was formed in 1991 via a joint venture between Wal-Mart Stores, Inc. and Cifra S.A., one of the largest Mexican operators of retail stores. Wal-Mart changed the Cifra name to Wal-Mart de Mexico S.A. in 2000. Wal-Mart Stores, Inc. currently owns 62% of Wal-Mex, which shares its systems, including inventory management and purchasing, with access to Wal-Mart’s purchases globally. However, 90% of Wal-Mex’s sales are sourced locally in Mexico. Wal-Mart also approves new location and format decisions, but otherwise the companies operate independently.
Wal-Mex controls more than 18% of the Mexican food retail market, with a growing share. Food sales generate almost 70% of Wal-Mex’s sales. On the contrary, Wal-Mart Stores, Inc. generates less than 30% of its U.S. sales from food items. Wal-Mex’s management expects a higher sales contribution from general merchandise and electronics in the future, as the Mexican consumer exhibits stronger demand for higher-margin, non-food goods. The company is also making efforts to expand the quality of its offerings in the food sector through a cold chain distribution center, set to open 2H 2004, which should enhance margins and provide fresher more varied produce, meat and fish.
Wal-Mex boasts good financial health. It continues to increase square footage through an ambitious new store plan, improve same store sales, and experience double-digit earnings growth. The company is debt-free and generates steady free cash flow. WalMex has around $500 million in cash, which it expects to use for further share buybacks and expansions.
According to the Wal-Mart de México website, they are now operating 657 stores in 65 cities and continue to grow. To me, the most interesting sentence in the above clip is "The company is debt-free and generates steady free cash flow."
The owner of Wal-Mex (Wal-Mart de México) is Jerónimo Arango, who is considered to be the 8th richest man in Mexico.