Wal-Mart de México: Strategic Growth Amidst Market Uncertainty

As the year 2024 comes to a close, Wal-Mart de México, S.A.B. de C.V. (WMMVF) has delivered another year of exceptional results, driven by its strategic focus on sustainability, expansion into new markets, and cost optimization. The company's fourth quarter and full-year earnings call highlighted its strong operating EBITDA growth and margin expansion, as well as its commitment to long-term growth and shareholder value.

Wal-Mart de México's strategic focus on sustainability has been a key driver of its growth and success. The company's ongoing investments in renewable energy, including the commissioning of five renewable natural gas facilities in the fourth quarter of 2024, have positioned it as a leader in environmental sustainability. This expansion is expected to more than double the company's overall production of renewable energy from 2024 to 2025, further enhancing its commitment to sustainability and reducing its carbon footprint.



The company's expansion into the healthcare market, through the acquisition of Stericycle, the largest provider of medical waste services in North America, has also contributed to its growth and diversification. The integration and optimization of Stericycle are expected to generate $250 million in synergies, further enhancing the company's financial performance and growth prospects. The acquisition has also expanded Wal-Mart de México's comprehensive environmental solutions into the growing healthcare market, positioning it as a leader in environmental sustainability and waste management.

Wal-Mart de México's strong operating EBITDA growth and margin expansion in 2024 were driven by several key factors, including:

1. Organic Revenue Growth: The company achieved organic revenue growth of 6.7% in 2024, primarily driven by core price increases. This growth was supplemented by an increase in completed acquisitions and higher market prices for recycled commodities.
2. Cost Optimization: WM prioritized operational excellence by improving frontline retention, leveraging technology and automation to optimize the cost structure, and shedding low-margin volumes in the residential collection business. These efforts led to a 10% increase in adjusted operating EBITDA for the year and a 30% margin for the first time in the company's history.
3. Expansion into Healthcare Market: The acquisition of Stericycle expanded WM's comprehensive environmental solutions into the growing healthcare market, generating $61 million in operating EBITDA for the fourth quarter and $61 million for the full year 2024, representing a 15.1% margin.



Looking ahead, Wal-Mart de México is well-positioned to deliver a step change in its revenue and earnings in 2025 and beyond. The company expects to deliver a second consecutive year of double-digit growth in adjusted operating EBITDA, driven by strong operational performance, strategic investments in growth, and delivering superior value to shareholders.

In conclusion, Wal-Mart de México's strategic focus on sustainability, expansion into new markets, and cost optimization have driven its strong operating EBITDA growth and margin expansion in 2024. The company's commitment to long-term growth and shareholder value, coupled with its ongoing investments in technology, automation, and sustainability, position it for continued success in the years to come. As the market continues to evolve, Wal-Mart de México remains well-equipped to navigate the challenges and opportunities that lie ahead.