Financial Results Third Quarter 2021

Investor Relations

Jorge Collazo | [e-mail]

Lorena Martin | [e-mail]

Marene Aranzabal |[e-mail]

Coca-Cola FEMSA Announces Results for Third Quarter and First Nine Months of 2021

Mexico City, October 27, 2021, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOF UBL, NYSE: KOF) ("Coca-ColaFEMSA," "KOF" or the "Company"), the largest Coca-Colafranchise bottler in the world by sales volume, announces results for the third quarter and the first nine months of 2021.

THIRD QUARTER OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Consolidated volumes increased 5.8% as compared to the third quarter of 2020 and 1.5% as compared to the same period of 2019. This increase was driven mainly by strong volume growth in our territories in South America and Central America, as most of our markets continued to show sequential recovery. These effects were partially offset by flat volume performance in Mexico, driven mainly by unfavorable weather conditions during the quarter.
• Total revenues increased 3.4%, while comparable revenues increased 8.8%, driven by volume growth, pricing initiatives, and favorable price-mix effects. These factors were partially offset by (i) unfavorable currency translation effects; (ii) a tough comparison base due to an entitlement to reclaim tax payments in Brazil; and (iii) a decline in beer revenues related to the partial transition of the beer portfolio in Brazil. Total revenues declined 0.8% versus the same period of 2019.
• Operating income decreased 9.0%, while on a comparable basis decreased 7.0%. This decline was driven mainly by a non- recurring tax income recognized during the third quarter of 2020 and by the normalization of certain operating expenses. These effects were partially offset by our favorable raw material hedging initiatives and the resumption of the recognition of tax credits in Brazil related to the Manaus Free Trade Zone. By normalizing the non-recurring tax effects, our operating income would have increased 6.3%. As compared to the same period of 2019, our operating income decreased 7.7%.
• Majority net income increased 38.8%, as our third quarter 2020 included one-timenon-operating expenses of Ps. 1,813 million, mainly related to the sale of our dairy joint venture Estrella Azul in Panama and an impairment recognized in Leão Alimentos, our non-carbonated beverage joint-venture in Brazil.
• Earnings per share1 were Ps. 0.20 (Earnings per unit were Ps. 1.63 and per ADS were Ps. 16.28.).

FINANCIAL SUMMARY FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF 2021

				Change vs. same period of last year
		Total Revenues			Gross Profit		Operating Income		Majority Net Income
		3Q 2021	YTD 2021			3Q 2021	YTD 2021		3Q 2021	YTD 2021		3Q 2021	YTD 2021
	Consolidated	3.4%	4.5%			2.1%	5.5%		(9.0%)	9.2%		38.8%	39.0%
As Reported	Mexico & Central America	7.3%	6.6%	6.7%	8.2%	(1.6%)	10.4%
	South America	(1.9%)	1.4%	(5.6%)	0.6%	(20.6%)	6.4%
	Consolidated	8.8%	11.1%			6.8%	11.3%		(7.0%)	13.3%
Comparable (2)	Mexico & Central America	9.3%	8.4%	8.6%	9.8%	(0.5%)	11.5%
	South America	8.1%	15.5%	3.5%	14.3%	(17.4%)	17.5%

John Santa Maria, Coca-Cola FEMSA's CEO, commented:

"For the third quarter, our focus on affordability and execution enabled us to deliver 5.8% year-on-year volume growth, 1.5% ahead of the volume we achieved during 2019. This performance reflects double-digit volume growth in South America, driven by outstanding performance in Colombia, Brazil, and Argentina. Notably, our stable volume performance in Mexico, due mainly to unfavorable weather, was offset by double-digit growth across all of our territories in Central America. On the profitability front, excluding one-time tax effects in Brazil, our revenue management initiatives together with our favorable raw material hedging strategies enabled us to protect our gross margin in the face of the challenging supply chain and input cost environment that is affecting industries worldwide. This allowed a normalized operating income to increase 6.3%.

Moreover, we continue taking important steps across all of our strategic fronts-from portfolio management to sustainable development. In Brazil, we continue to complement our beer portfolio, while in other markets, we began pilot testing additional categories as distribution opportunities. Finally, we are very proud to have successfully issued the first sustainability-linked bonds in the Mexican market, enabling us to align our financial strategy with ambitious water efficiency targets that are now public commitments. We are convinced that we have the right strategy and talent to continue positioning Coca-Cola FEMSA for continuous growth and success for many years to come."

1. Quarterly earnings / outstanding shares. Earnings per share (EPS) were calculated using 16,806.7 million shares outstanding. For the convenience of the reader, as a KOFUBL Unit is comprised of 8 shares (3 Series B shares and 5 Series L shares), earnings per unit are equal to EPS multiplied by 8. Each ADS represents 10 KOFUBL Units.
2. Please refer to page 9 for our definition of "comparable" and a description of the factors affecting the comparability of our financial and operating performance.

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RECENT DEVELOPMENTS

• Consistent with the enhancement of our cooperation framework with The Coca-Cola Company and our consumer- centric, multi-category strategy, Coca-Cola FEMSA is running pilot programs to test the distribution of leading spirits and consumer brands in Mexico and Brazil as well as the distribution of leading spirits brands and other alcoholic products in Colombia and Panama. We expect these pilot programs will enable us to assess and learn from new shopper and consumption occasions, and gather the necessary insights to strengthen our value proposition for retailers and consumers in the future. We expect this will complement our reach, joint consumer value proposition, and provide partners with a unique edge to communicate with target consumers. As these are currently pilot tests, further details will be provided in due course.
• Following a favorable decision from Brazilian tax authorities, Coca-Cola FEMSA has been entitled to reclaim tax payments made in prior years in Brazil, resulting in a non-recurring positive effect on its third quarter results, affecting mainly other operating revenues and other operating expenses, net. The total amount of non-recurrent tax effects in Brazil in the operating income for the third quarter of 2021 is Ps. 620 million as compared to Ps. 1,609 million during the same period of the previous year. This results in a net unfavorable amount of Ps. 989 million for the third quarter of 2021.
• On August 11, 2021, the Company announced that its subsidiary in Brazil, reached an agreement in conjunction with Coca-Cola Andina, to acquire the Brazilian craft beer brand "Therezópolis".
• On September 16, 2021, the Company announced that its subsidiary Spal Indústria Brasileira de Bebidas S.A. and the Coca-Cola System in Brazil had signed an agreement to distribute Estrella Galicia beers in the country. This agreement is consistent with the Coca-Cola System's long-term strategy to complement its beer portfolio in Brazil.
• On September 21, 2021, the Company issued its first sustainability-linked bonds in the Mexican market for a total amount of Ps. 9,400 million. The Company priced bonds at a fixed rate of 7.36% (Mbono+0.34%) for an amount of Ps. 6,965 million due in 7 years, and bonds at a variable rate of TIIE + 0.05% for an amount of Ps. 2,435 million due in 5 years. As part of these bonds, the Company commits to achieve a water use ratio of 1.36 liters of water per liter of beverage produced by 2024 and 1.26 liters by 2026. In the event that such indicators are not met by the dates established in the pricing documents, the interest rate will increase by 25 basis points to remain at 7.61% and TIIE + 0.30%, respectively.
• As of September 30, 2021, the Company had a cash position of more than Ps. 50 billion.
• On November 3, 2021, Coca-Cola FEMSA will pay the second installment of the 2020 dividend approved for Ps. 0.63 per share (equivalent to Ps. 5.04 per unit).

CONFERENCE CALL INFORMATION

	Mr. JohnJohnAnthonySantaMaria,, ChiiefExecutivec ti	Officerr
	Mr. ConstantinoSpas,,ChiefFinancialOfficericer
	Mrs. MariaJorge DylaCollazoCastro,HeadInvestorof InvestorRelationsRelationsDirector
Thursday October 28, 2021	To participate in the conference call please dial:		Webcast:
9:30 A.M. Eastern Time	Mexico: 001 800 062 8182
	http://bit.do/KOF3Q20
8:30 A.M. Mexico City Time	Domestic U.S.: 800-367-2403
	International: [phone]
	Participant passcode: 3331266
Coca-Cola FEMSA Reports 3Q2021 Results	Page 2 of 16
October 27, 2021

CONSOLIDATED THIRD QUARTER RESULTS

	CONSOLIDATED THIRD QUARTER RESULTS
			As Reported			Comparable (1)
Expressed in millions of Mexican pesos		3Q 2021	3Q 2020	Δ%		Δ%
Total revenues		48,316	46,734	3.4%		8.8%
Gross profit	21,817	21,367	2.1%	6.8%
Operating income		6,476	7,119	(9.0%)		(7.0%)
Operating cash flow (2)	9,320	10,075	(7.5%)	(4.3%)

Volume increased 5.8% to 854.5 million unit cases, driven mainly by strong volume growth in Colombia, Brazil, Argentina, Guatemala, and the rest of our territories in Central America. This growth was partially offset by flat performance in Mexico, which was driven mainly by unfavorable weather conditions. Consolidated volume increased 1.5% versus our 2019 baseline.

Total revenues increased 3.4% to Ps. 48,316 million, driven mainly by volume growth, our pricing initiatives, and favorable price-mix effects across our markets. These effects were partially offset by unfavorable currency translation effects from all of our operating currencies, and a reduction in beer sales resulting from the partial transition of our beer portfolio in Brazil. Our total revenues increased despite a tough comparison base that included non-recurring other operating revenues related to an entitlement to reclaim tax payments in Brazil. On a comparable basis, total revenues would have increased 8.8%. Total revenues declined 0.8% versus the same period of 2019.

Gross profit increased 2.1% to Ps. 21,817 million, and gross margin contracted 50 basis points to 45.2%. This increase was due to favorable raw material hedging strategies, coupled with revenue management initiatives and the resumption of tax credits on concentrate purchased from the Manaus Free Trade Zone in Brazil. However, these effects were partially offset by an increase in raw material costs and the depreciation in the average exchange rate of most of our operating currencies as applied to our U.S. dollar-denominated raw material costs. On a comparable basis, gross profit would have increased 6.8%. Gross profit increased 0.7% versus the third quarter of 2019.

Operating income decreased 9.0% to Ps. 6,476 million, and operating margin contracted 180 basis points to 13.4%. This decrease was driven mainly by the recognition of non-recurring tax effects in Brazil of Ps. 620 million as compared to Ps. 1,609 million recognized during the same period of the previous year, coupled with the normalization of certain operating expenses such as marketing, labor, and maintenance related to the reopening and increased mobility across most of our operations. These effects were partially offset by favorable top-line performance. On a comparable basis, operating income would have decreased 7.0%. Our operating income decreased 7.7% versus our 2019 baseline.

1. Please refer to page 9 for our definition of "comparable" and a description of the factors affecting the comparability of our financial and operating performance.
2. Operating cash flow = operating income + depreciation + amortization & other operating non-cash charges.

Coca-Cola FEMSA Reports 3Q2021 Results

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October 27, 2021

Comprehensive financing result recorded an expense of Ps. 1,030 million, compared to an expense of Ps. 1,421 million in the same period of 2020.

The Company recorded an interest expense of Ps. 1,613 million as compared to an expense of Ps. 1,701 million in the same period of 2020. This reduction was driven mainly by the payment of short-term financing incurred during the first quarter of 2020 and the payment of a Mexican Peso-denominated bond.

Additionally, the Company recorded a foreign exchange gain of Ps. 305 million as compared to a foreign exchange loss of Ps. 135 million recorded during the same period of 2020, as our cash exposure in U.S. dollars was positively impacted by the depreciation of the Mexican Peso and the Brazilian Real during the quarter.

These effects were partially offset by a loss in financial instruments of Ps. 42 million recorded during the quarter related to the increase in interest rates in Brazil.

Income tax as a percentage of income before taxes was 33.3% as compared to 33.7% during the same period of the previous year. This was driven mainly by the effect of the sale of Estrella Azul in the same period of 2020, partially offset by the effect of higher inflation recognized during the quarter.

Net income attributable to equity holders of the company reached Ps. 3,419 million as compared to Ps. 2,463 million during the same period of the previous year. This increase was driven mainly by the one-timenon-operative expenses related to the sale of Estrella Azul in Panama and an impairment recognized in Leão Alimentos, our non-carbonated beverage joint venture in Brazil recorded during the same period of 2020. This effect was partially offset by other non- operating expenses of Ps. 296 million recognized during the quarter. Earnings per share1 were Ps. 0.20 (Earnings per unit were Ps. 1.63, and earnings per ADS were Ps. 16.28.).

1. Quarterly earnings / outstanding shares. Earnings per share (EPS) for all periods are adjusted to give effect to the stock split resulting in 16,806.7 million shares outstanding. For the convenience of the reader, as a KOFUBL Unit is comprised of 8 shares (3 Series B shares and 5 Series L shares), earnings per unit are equal to EPS multiplied by 8. Each ADS represents 10 KOFUBL Units.

Coca-Cola FEMSA Reports 3Q2021 Results

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October 27, 2021

CONSOLIDATED FIRST NINE MONTHS RESULTS

	CONSOLIDATED FIRST NINE MONTHS RESULTS
			As Reported			Comparable (1)
Expressed in millions of Mexican pesos		YTD 2021	YTD 2020	Δ%		Δ%
Total revenues		141,091	135,015	4.5%		11.1%
Gross profit	64,423	61,088	5.5%	11.3%
Operating income		19,620	17,973	9.2%		13.3%
Operating cash flow (2)	28,159	27,363	2.9%	7.7%

Volume increased 5.2% to 2,506.5 million unit cases in the first nine months of 2021 as compared to the same period of 2020, driven mainly by gradual recoveries and increases in mobility across our markets. Consolidated volume increased 1.1% as compared with the same period of 2019.

Total revenues increased 4.5% to Ps. 141,091 million in the first nine months of 2021 as compared to the same period of 2020, driven mainly by volume growth, coupled with our pricing initiatives and favorable price-mix effects. These factors were partially offset by unfavorable currency translation effects resulting from the depreciation of all of our operating currencies into Mexican Pesos. In addition, during the same period of 2020, we recorded non-recurring other operating revenues related to an entitlement to reclaim tax payments in Brazil. On a comparable basis, total revenues would have increased 11.1%. Total revenues declined 1.0% versus the same period of 2019.

Gross profit increased 5.5% to Ps. 64,423 million in the first nine months of 2021 as compared to the same period of 2020, and gross margin expanded 50 basis points to 45.7%. Our raw material hedging initiatives, cost efficiencies, favorable price- mix effects, and the recognition of Ps. 1,083 million related to the resumption of tax credits on concentrate purchased from the Manaus Free Trade Zone in Brazil were partially offset by an unfavorable currency hedging position and the depreciation in the average exchange rate of most of our operating currencies as applied to our U.S. dollar-denominated raw material costs. On a comparable basis, gross profit would have increased 11.3%. Gross profit remained flat versus our 2019 baseline.

1. Please refer to page 9 for our definition of "comparable" and a description of the factors affecting the comparability of our financial and operating performance.
2. Operating cash flow = operating income + depreciation + amortization & other operating non-cash charges.

Coca-Cola FEMSA Reports 3Q2021 Results

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October 27, 2021