An investment in securities involves a high degree of risk. All investors should carefully consider the following factors in addition to the other information in this investor relations website before investing in IMC’s securities. In general, investing in the securities of issuers in emerging market countries, such as Brazil, involves a higher degree of risk than investing in the securities of U.S. issuers or issuers in other countries with highly developed capital markets. IMC’s business, financial condition, results of operations and prospects may be materially adversely affected by any of these risks.
The risks briefly described below are those that the Company currently believes most likely may materially affect its performance.
1) Certain Factors Relating to the Business
- IMC has experienced rapid growth in recent years and has a limited operating history as a single company. IMC may not be able to maintain its recent growth rate and any failure to successfully manage its past or future growth may adversely affect its results of operations and margins.
- The Company’s growth in revenues and earnings depend on strategic capital allocation decisions, including those related to acquisitions of new brands, granting or renewal of concessions, new retail store and restaurant openings, the magnitude, timing and form of excess capital returned to shareholders, and reductions or increases in its indebtedness.
- Acquisitions have been a key element of IMC’s business strategy, but the Company cannot assure you that it will be able to identify appropriate acquisition targets in the future and that IMC will be able to successfully integrate any future acquisitions into its existing operations.
- The Company’s success depends substantially on the value of its brands, the effectiveness of its marketing strategy and its reputation for offering guests an unparalleled total experience.
- Leases for a broad portfolio of real estate and contracts for concessions expose the Company to potential losses and liabilities.
- IMC operates its shops under concessions agreements that are non-exclusive and subject to conditional renewal and revocation, and the loss of its concessions in airports could negatively affect the Company’s revenues and its ability to operate its business.
- Markets for retail food concessions are highly competitive and competition may lead to more onerous concession terms.
- A portion of IMC’s revenues are derived from the sales of gasoline and are therefore subject to fluctuation based on gasoline prices.
- The Company may be subject to substantial costs, including indemnification and penalties for damage to the environment in connection with its fuel operations, which may have a material adverse effect on its business and on the market price of the Company’s common shares.
- Failure to satisfy financial covenants and/or repayment requirements under the terms of IMC’s outstanding indebtedness could have a material adverse effect on its financial condition.
- The Company is a holding company and depend on the results of its subsidiaries, which may not be distributed to IMC.
2) Certain Factors Relating to the Company’s Industry
- The food services industry is intensely competitive and IMC may not be able to continue to compete successfully.
- Decreases in the number of airline passengers or motorists traveling through facilities where the Company operates and changes to the areas where the Company locates its retail stores and restaurants could adversely affect IMC.
- Increases in commodity prices or other operating costs could harm its operating results.
- Demand for IMC’s products may decrease due to changes in consumer preferences, decreases in airline passengers and motors or other factors.
- The Company’s business activity may be negatively affected by disruptions, catastrophic events or health pandemics.
- Any tax increase or change in tax legislation may adversely affect its operating results.
- IMC’s activities are subject to extensive regulation. Such regulations or any changes thereto may adversely affect the Company.
3) Certain Factors Relating to Brazil, Mexico and the Caribbean
- IMC’s business is subject to the risks generally associated with international business operations.
- Changes in governmental policies in the principal countries in which the Company operates could adversely affect its business, results of operations, financial condition and prospects.
- Inflation and government measures to curb inflation, may adversely affect the economies in the countries where IMC operates, its business and operations.
- Exchange rate fluctuations against the U.S. dollar in Brazil, Mexico and the Dominican Republic and significant variations in interest rates could negatively affect its results of operations.
- Developments and the perception of risk in other countries, especially in the United States and in emerging market countries, may adversely affect IMC’s access to financing and the market price of its securities.
4) Risks Relating to IMC’s Shares
- The market price of the Company’s shares may fluctuate significantly, and you could lose all or part of your investment.
- U.S. holders of IMC’s common shares may not be able to exercise preemptive rights and tag along rights relating to its common shares.
- The interests of the Company’s controlling shareholder may conflict with your interests.
- IMC may need additional funds in the future and may issue additional shares in lieu of incurring indebtedness, which may result in a dilution of your interest in the Company’s shares.
- The sale of a significant number of IMC’s shares may adversely affect their market price.