Fomento Economico Mexicano S.A.B. de C.V. Annual Report 2021

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FY2021 Annual Report · Fomento Economico Mexicano S.A.B. de C.V.

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Annual Report 2021

T A B L E O F C O N T E N T S

FEMSA At A Glance

Value Creation Highlights

Our Sustainability Strategy

Dear Shareholders

FEMSA Comercio

Coca-Cola FEMSA

FEMSA Negocios Estratégicos

Fundación FEMSA

Governance

Financial Summary

Management’s Discussion & Analysis

Contact

Annual Report 2021 FEMSA2

Fomento Económico Mexicano,
S.A.B. de C.V., or FEMSA, is a leading
company that creates economic and
social value through companies and
institutions and seeks to be the best
employer and neighbor to the
communities where it has a presence.

Underscored by FEMSA’s strong organizational culture, the financial and sustainability results presented in this report are for

the twelve months ended December 31, 2021, as compared to the twelve months ended December 31, 2020. For complementary

information in alignment with the Global Reporting Initiative (GRI) Standards, please see our 2021 Sustainability Report

Annual Report 2021 FEMSAAs of the end of 2021, FEMSA participated in the following businesses.In the retail industry, through FEMSA Comercio, comprising the following:Proximity Division, which operates the OXXO small-format store chain; Health Division, which includes pharmacies and related activities; and Fuel Division, which operates our service stations chain, OXXO GAS. In the beverage industry, through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products and trademark beverages in the world by sales volume; and in the beer sector, as a shareholder of HEINEKEN, one of the world’s leading brewers with operations in more than 70 countries. In certain adjacent businesses, through FEMSA Negocios Estratégicos, including our Logistics and Distribution business; point-of-sale refrigeration solutions; food service solutions; and plastics solutions for FEMSA companies and external clients. 3

F E M S A A T A G L A N C E

FEMSA’s mission:

To create economic and social value
through companies and institutions.

2021 Corporate Structure

Equity Stakes and Business Units

THE
COCA-COLA
COMPANY
27.8%

PUBLIC
25.0%

47.2%*
COCA-COLA
FEMSA

100%
FEMSA
COMERCIO

100%
FEMSA
NEGOCIOS
ESTRATÉGICOS

14.8%
HEINEKEN

PROXIMITY
DIVISION

HEALTH
DIVISION

FUEL
DIVISION

LOGISTICS &
DISTRIBUTION

*Represents 56% of voting rights.

Annual Report 2021 FEMSA4

F E M S A A T A G L A N C E

Through our Business Units, we serve more than 290 million consumers – and have more than 320,000 employees – in 13 countries:

Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Mexico, Nicaragua, Panama, Peru, USA, and Uruguay.

Presence

Headcount

United States

Mexico1
241,835

15,163

45,850

9,272

Brazil4
30,563

5,046

5,272

Colombia
17,238

21,291

Mexico1

Guatemala2

Nicaragua2

Colombia

Venezuela3

Brazil

Costa Rica2

Panama2

Ecuador

Peru

FEMSA Comercio

Chile

Uruguay

Coca-Cola FEMSA

FEMSA Negocios Estratégicos

Argentina

176,366

12,253

Chile
12,263

United
States
2,526

1. Total includes headquarters staff.
2. Central America includes Costa Rica, Panama, Nicaragua and Guatemala.
3. As of December 31, 2017, as a non-consolidated operation, Venezuela is reported as an investment in shares.
4. Grupo Nós headcount not included, as it is a non-consolidated joint-venture.

150

Central
America2
8,319

8,169

Ecuador
4,329

Argentina
2,305

Uruguay
894

2,283

Peru
480

6,920

4,310

475

Annual Report 2021 FEMSAV A L U E C R E A T I O N H I G H L I G H T S

ECONOMIC VALUE
Millions of pesos

Total revenues

Income from operations2

Operating margin

Consolidated net income

Controlling interest net income3

Controlling interest earnings per BD unit4

Controlling interest earnings per ADS5

EBITDA

EBITDA margin

Total assets

Total liabilities

Total equity

Capital expenditures

Total cash and cash equivalents6

Short-term debt

Long-term debt

Headcount7

Millions
of dollars

20211

2021

2020

Change

2019

Change

27,116

556,261

492,966

2,535

51,993

41,503

12.8%

25.3%

506,711

(2.7%)

47,152

(12.0%)

1,836

1,388

0.4

3.9

9.3%

37,678

28,495

8.0

79.6

8.4%

3,756

(1,930)

(0.5)

(5.4)

9.3%

28,048

(86.6%)

20,699

(109.3%)

5.8

(108.6%)

57.8

(109.3%)

N.S.

4,018

82,422

71,973

14.5%

75,440

(4.6%)

14.8%

14.6%

35,951

737,500

684,848

19,615

402,383

377,661

16,336

335,117

307,187

14.9%

637,541

311,790

325,751

7.4%

21.1%

(5.7%)

7.7%

6.5%

9.1%

15.1%

(9.5%)

13%

34%

36%

Total Revenues
Ps. 556,261

1,173

4,748

227

24,055

20,893

97,407

107,624

25,579

(18.3%)

65,562

64.2%

36%

4,640

8,801

(47.3%)

16,204

(45.7%)

9,064

185,945

179,864

320,808

320,618

3.4%

0.1%

101,747

314,656

76.8%

1.9%

EBITDA2
Ps. 82,422

35%

53%

Income from Operations1
Ps. 51,993

33%

34%

47%

7% 2%

16%

Total Assets
Ps. 737,500

Millions of Mexican pesos

1. U.S. dollar figures are converted from Mexican pesos using the noon-buying rate published by U.S. Federal Reserve Board, which was

Ps. 20.5140 per US$ 1.00 as of December 30, 2021.

2. Company’s key performance indicator.
3. Represent the net income that is assigned to the controling shareholders of the entity.
4. BD units each of which represents one series B share, two series D-B shares and two series D-L shares.
Data based on outstanding 2,161,177,770 BD units and 1,417,048,500 B units.
5. American Depositary Shares, a U.S. dollar-denominated equity share of a foreing-based company available for purchase on an American

stock exchange.

6. Cash consists of non-interest bearing bank deposits and cash equivalents consist principally of short-term bank deposits and fixed rate investments.
7. Includes headcount from Coca-Cola FEMSA, FEMSA Comercio and FEMSA Negocios Estratégicos and others.

Coca-Cola FEMSA

FEMSA Comercio:

Proximity Division

Fuel Division

Health Division

Logistics & Distribution

Others*

1. Company’s key performance indicator.
2. EBITDA defined as Income from
operations plus depreciation,

amortization and other non-cash items.
* Includes FEMSA Negocios Estratégicos.
Others include intercompany operations.

Annual Report 2021 FEMSA
O U R S U S T A I N A B I L I T Y S T R A T E G Y

At FEMSA, sustainability is integral to the way we do business. In 2021,

we updated our Sustainability Strategy, which is grounded in our ethics

and values, to focus on three strategic pillars where we can have the

greatest impact.

To design this Strategy, we identified the most important

sustainability topics for FEMSA’s internal and external stakeholders

and conducted business-unit level materiality assessments for

FEMSA Comercio, Coca-Cola FEMSA, and FEMSA Negocios Estratégicos.

We seek to transform
our communities, earn the
right to operate, and
align social value with
global objectives.

POSITIVELY TRANSFORMING
OUR COMMUNITIES

OUR
COMMUNITY

Diversity
Equity and
Inclusion

OUR
PEOPLE

OUR
PLANET

OUR ETHICS AND VALUES

GOVERNANCE

FEMSA’s Strategic
Sustainability Framework

Annual Report 2021 FEMSA
F E M S A ’ S S T R A T E G I C S U S T A I N A B I L I T Y F R A M E W O R K

our people

our community

our planet

The wellbeing of our
people, dignified work,
and professional growth

Development and wellbeing
within the communities
where we operate

Harmony with the
environment and sustainable
use of natural resources

Human and Labor Rights

Community Wellbeing

Climate Action

Integral Wellbeing

Economic Development

Water Management

Diversity, Equity, and Inclusion

Sustainable Sourcing

Circular Economy

governance

The use of corporate governance best practices

Corporate Responsibility

Ethical and Socially Responsible Behavior

Fiduciary Responsibility

Annual Report 2021 FEMSAO U R S U S T A I N A B I L I T Y S T R A T E G Y : G O A L S & H I G H L I G H T S

our people

Human and Labor Rights

Integral Wellbeing

Diversity, Equity, and Inclusion

Goal
Workplace survey rating in
the top 10 against benchmark
of high-performing companies

*According to Mercer Sirota Employee

Engagement Survey

2021 Highlights
• 88% score on FEMSA’s

Organizational Climate
Diagnostic

• +600 work centers evaluated

for occupational risks

Goal
8.7 million hours of annual
training for collaborators

2021 Highlights
• +14.3 million cumulative hours

of employee training

• +360,170 corporate
volunteering hours

• +5,050 social development

initiatives

Goal
To have a 20 percentage
point increase of women in

executive positions by 2030

2021 Highlights
• 24% of women in

executive positions

• +3,700 of senior or

disabled people employed

• Named to the Bloomberg

Gender-Equality Index for
the first time

Annual Report 2021 FEMSA
O U R S U S T A I N A B I L I T Y S T R A T E G Y : G O A L S & H I G H L I G H T S

our community

Community Wellbeing

Goal

20 million beneficiaries of our Community Wellbeing initiatives by 2030

2021 Highlights

• +5,900 community actions

completed

• +2.9 millon beneficiaries of

community programs

• Ps. +85 million raised through
the “Redondeo” and “Dona tu
Vuelto” programs

• +500 micro, small, and medium
enterprise suppliers supported
through commercial conditions

• +3,305 tons of food donated to

various organizations, including
the Mexican Association of
Food Banks

• +4,000 video calls with
customers in need of
pharmaceutical guidance
(Cruz Verde, Chile)

• Launch of “Social Value Store,”
OXXO stores that incorporate
elements of quality of life,
community development and
environmental care in their
construction, infrastructure,
and operation.

Annual Report 2021 FEMSAO U R S U S T A I N A B I L I T Y S T R A T E G Y : G O A L S & H I G H L I G H T S

our planet

1 0

Climate Action

Water Management

Circular Economy

Goal
85% renewable energy
use across all our
operations by 2030

2021 Highlights
• +15,800 sites in

Mexico powered with
renewable energy

• 63.6% of electricity needs

in Mexico covered by clean
sources, avoiding 597,014
tons of CO2e per year

• 85% of Coca-Cola FEMSA’s
manufacturing operations
powered by clean energy

Goal
Achieve a neutral water balance in all our

operations by 2030

2021 Highlights
• Coca-Cola FEMSA improved
its water-use ratio to reach
1.47 liters of water per liter
of beverage produced

• 100% of water used to

produce Coca-Cola FEMSA’s
beverages returned to
the environment in
main markets

• 26 Water Funds

launched in 10 Latin
American countries

• 41,462 people in

5 countries accessing
safe water through
Lazos de Agua program

Goal
Zero waste from
operations to sanitary

landfills by 2030

2021 Highlights
• 100% of our beverage

manufacturing plants in
Mexico have achieved
Zero Waste to Landfill
certification

• 1,450 tons of furniture and
store equipment recycled
in OXXO

• +62,520 refrigerators per
year – and 99% of their
components – repaired,
reused, or recycled by
AlPunto at the end of their
useful life

Annual Report 2021 FEMSA

1 1

FEMSA’s Euro denominated
Sustainability-Linked Bond
received the “Corporate
High-Grade Bond of the
Year” award from
Latin Finance.

Sustainability-Linked Bond
To demonstrate FEMSA’s sustainability
commitment, in April 2021 we
announced the placement of Euro-
denominated sustainability linked notes
in the international capital markets.
FEMSA successfully issued EUR
€700 million in senior notes due in
2028 bearing interest at an annual rate
of 70 basis points over the relevant
benchmark for a yield of 0.551%, and
EUR €500 million in senior notes due
in 2033 bearing interest at an annual
rate of 88 basis points over the relevant
benchmark for a yield of 1.068%
(the “Notes”). This issuance represents
the largest ever sustainability-linked
bond by a Latin American issuer,
and it was backed by 196 international
institutional investors and was
oversubscribed 1.9 times.

In connection with the Notes,
FEMSA developed and published a
Sustainability-Linked Bond Framework,
which was prepared in accordance
with the Sustainability-Linked Bond
Principles 2020, as administered by the
International Capital Market Association.
The Framework includes certain

Sustainability Performance Targets
(SPTs) of the Company, which are
aligned with the 2030 priorities of our
Sustainability Strategy, particularly the
transition to a circular economy
and the mitigation of climate change.
In accordance with industry best
practices, we obtained a Second-Party
Opinion from Sustainalytics on the
Framework, who noted the strength of
the ambition level of FEMSA’s SPTs. Per
the terms of the Notes, the satisfaction
of the SPTs will also be verified by an
accredited external party, and if such
targets are not satisfied by certain dates,
there will be an interest rate step up of
25 basis points.

Pursuant to the Sustainability-Linked
Bond Framework, FEMSA has committed
to annually disclose a Sustainability-
Linked Securities update. For more
information on our progress against
the Framework’s key performance
indicators and SPTs, please see our
2021 Sustainability Report, which

accompanies this 2021 Annual Report.

Annual Report 2021 FEMSA
Eduardo M. Padilla Silva

Chief Executive Officer (2018 - 2021)

José Antonio
Fernández Carbajal

Executive Chairman
of the Board

Daniel Rodríguez Cofré

Chief Executive Officer

1 2

FEMSA stood ready to

serve our consumers, support

our customers and boldly

push forward in advancing our

strategy for sustainable growth

and innovation.

We completed the year by
thanking Eduardo Padilla
for his leadership as Chief
Executive Officer of FEMSA
since 2018.

of FEMSA Comercio for 16 years. During
his tenure, FEMSA developed compelling
new business verticals, consolidated key
partnerships, and even navigated the
challenges of a global pandemic. Guided
by his vision, he strengthened FEMSA’s
culture and values while positively
impacting the markets and communities
where we operate. On behalf of all of us
at FEMSA, I would like to thank Eduardo
for his tireless service and wish him the
best in his retirement.

We also welcome Daniel Rodríguez
Cofré as FEMSA’s new Chief Executive
Officer as of January 1, 2022. Daniel
first joined FEMSA in 2015 as Chief
Corporate Officer, before assuming
the role of FEMSA Comercio CEO one

Dear Shareholders:

While we were sorting through the
challenges of the COVID-19 pandemic
for the second year in a row, 2021
was characterized by resiliency and
recovery at FEMSA. While restrictions
and operational reductions remained in
place in some markets, we began to see
gradually improving health and mobility
trends as consumers began to feel more
comfortable in resuming activity levels.
With an unwavering focus on the health
and safety of our people, FEMSA stood
ready to serve our consumers, support
our communities, and boldly push
forward in advancing our strategy for
sustainable growth and innovation.

Leadership Transitions
We completed the year by thanking
Eduardo Padilla for his leadership as
Chief Executive Officer of FEMSA since
2018, following the announcement of
his retirement. Eduardo achieved an
exceptional trajectory of almost 25 years
at FEMSA, first joining in 1997 as head
of strategic planning, and subsequently
taking on multiple leadership roles in the
following years, including serving as CEO

Annual Report 2021 FEMSA
Our actions are aligned with our
ethics and values and focus on
where we can have the greatest
impact on the three pillars of
our new Sustainability Strategy
that was launched in 2021:
Our People, Our Planet,
and Our Community.

1 3

year later. There, Daniel grew OXXO’s
leadership position, including developing
compelling growth opportunities in
South America; supported the Health
Division’s evolution into a powerful
regional platform; and helped the Fuel
Division consolidate its position in
Mexico. Now we look forward to Daniel’s
leadership through FEMSA’s next
era – driving growth, innovation, and
market leadership while advancing
our sustainability vision in support of our
diverse people and their families,
our communities, and our planet.

Sustainable Business
For FEMSA, sustainability is
about generating the right social,
environmental, and economic conditions
to operate and continue growing in
harmony with the environment and
society. FEMSA is a signatory of the
United Nations Global Compact (UNGC),
and we support and adhere to the
UNGC’s ten principles to protect human
rights, uphold ethical labor practices,
preserve the environment, and
combat corruption.

The leadership of our business units and
the important work of the Fundación
FEMSA are fully aligned with our ethics
and values, focusing on where we can
have the greatest impact on the three
pillars of our Sustainability Strategy
that was updated in 2021: Our People,
Our Planet, and Our Community.
These priorities relate the important
global topics as well as our businesses’
most material issues, that is, the
environmental, social and governance
(ESG) topics that are most important to
both our Company and the concerns
of our stakeholders. I am proud to co-
lead the new Sustainability, Inclusion &
Diversity Committee, which we set up
in 2021 as an internal, cross-functional
leadership team to further enhance the
Company’s ESG strategies. Among other
objectives, the Committee has set the
goal of increasing the representation of
women among managers and directors
by 20 percentage points by 2030.

Beyond being the right thing to do,
sustainability and ESG management at
FEMSA is also good for business.

Annual Report 2021 FEMSA
1 4

Our Sustainability Strategy creates
social, environmental, and economic
value for all our stakeholders and
contributes to lower employee turnover
rates, increased customer satisfaction,
operational continuity, and lower costs,
among other advantages. Following
Coca-Cola FEMSA’s first green bond
issuance in 2020, FEMSA took a next step
in our bold sustainable finance vision by
announcing in April 2021 the placement
of Euro-denominated sustainability
linked notes in the international capital
markets, representing the largest ever
sustainability-linked bond by a Latin
American issuer.

Perhaps most importantly, our
accompanying
Sustainability Linked
Bond Framework includes ambitious
Sustainability Performance Targets
aligned with the goals of our
Sustainability Strategy, particularly
in the transition to a circular economy
and the mitigation of climate change.
In February 2022, we were honored
to be recognized as having issued the
“Corporate High-Grade Bond of the

Year” by LatinFinance, as part of their
2021 Deal of the Year Awards.

Value Creation
Through this lens of sustainable finance
and business continuity – particularly as
we navigated the effects of the pandemic
– we upheld our disciplined approach
to financial management in 2021 while
innovating to drive sales and growth.
Total revenues increased 12.8% for the
year as compared to 2020 to Ps. 556.2
billion (US$ 27.1 billion), reflecting growth
across our business units, partially
offset by increased COVID-19 operating
restrictions. Income from operations
increased 25.3% and consolidated net
income increased significantly to
Ps. 37.7 billion (US$ 1.8 billion).

Net majority income was Ps. 8.00 per
FEMSA unit1 and US$ 3.9 per FEMSA ADS.
Our consolidated net debt position at year-
end was Ps. 93.2 billion (US$ 4.5 billion),
and our capital expenditures amounted to
Ps. 24.1 billion (US$ 1.2 billion), reflecting
the reactivation of ongoing investment
activities in most of our business units.

1. FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B

Share, two Series D-B Shares and two Series D-L Shares. Each FEMSA B Unit is comprised of five Series B Shares.
The number of FEMSA Units outstanding as of December 31, 2021 was 3,578,226,270, equivalent to the total
number of FEMSA Shares outstanding as of the same date, divided by 5.

Total revenues increased
12.8% for the year as compared
to 2020 to Ps. 556.2 billion
(US$ 27.1 billion), reflecting
growth across our
business units.

Annual Report 2021 FEMSA
In the Proximity Division,
we built on our longstanding
history in correspondent
banking and financial services
to expand financial inclusion
in Mexico.

1 5

These financial results reflect the
agility and resiliency of our business
units across the organization during a
challenging year and our year-end cash
position was more than Ps. 97.4 billion
(US$ 4.7 billion). Although overall we
were significantly impacted by COVID-19
and related changes in consumer
behavior across markets, today we are
in a much better position than we were
one year ago, and perhaps than ever
before. Our business units delivered
solid performance during 2021 and have
considerable avenues for growth in
the future.

In the Proximity Division, we built
on our longstanding history in
correspondent banking and financial
services to expand financial inclusion
in Mexico through digital innovations,
including the launch of Spin by OXXO,
a brand operating under a conditional
authorization. This program facilitates
safe and convenient financial transactions
and transfers at any OXXO store.
We also launched OXXO’s first loyalty
program, OXXO PREMIA, which will
reward our customers for their loyalty
while strengthening our relationship
with them.

FEMSA Comercio was impacted
by reduced consumer and vehicle
mobility during the year, resulting in,
among other impacts, our decision to
slow planned expansion operations.
Nevertheless, we finished the year
strongly with 865 net new OXXO stores;
284 net new drugstores; and 9 new
OXXO GAS stations, and we took the
opportunity to expand our businesses in
other important ways.

In the Health Division, to support the
healthcare needs of our customers
during another pandemic year, we
leveraged our size, scale, and network
to secure important medicines and
healthcare products and make them
efficiently and safely accessible to
those in need.

In the Fuel Division, we celebrated
25 years of operations and launched new

Annual Report 2021 FEMSA1 6

customer engagement campaigns
to strengthen our brand in a
competitive environment and at the
same time continually improve the
customer experience.

Coca-Cola FEMSA: In a year of
operational and strategic milestones,
Coca-Cola FEMSA was able to deliver
strong performance and volume recovery
ahead of pre-pandemic levels – and
expand digital capabilities that drove
increased sales in 2021. Despite supply
chain disruption and higher raw material
costs, Coca-Cola FEMSA delivered another
year of resilency and profitability. On
multiple strategic fronts, 2021 was also
a year of achievements, including the
enhanced Cooperation Framework with
The Coca-Cola Company; the redesigned
beer distribution agreement with
HEINEKEN; a new distribution partnership
with Estrella Galicia; and the acquisitions
of Therezópolis and CVI, a beer brand and
a Coca-Cola bottler in Brazil, respectively.
In line with FEMSA’s sustainable finance
strategy and following the issuance of
Coca-Cola FEMSA’s green bond in the
international capital markets in 2020,

Coca-Cola FEMSA also placed the first
sustainability-linked bonds in the Mexican
market for Ps. 9.4 billion (US$ 470 million)
during 2021, thereby publicly committing
to lowering our water use ratio from
1.47 liters in 2021 to 1.36 by 2024 and
to 1.26 by 2026.

FEMSA Negocios Estratégicos:
Our Logistics and Distribution business
grew its top-line sequentially during
the year and took several important
steps to reach new customers through
strategic expansions. Solistica began
operations in Guatemala, bringing
with it an advanced fleet of vehicles
that optimize safety and efficiency.
And, in alignment with our vision to
build a leading national distribution
platform in the United States, Envoy
Solutions successfully completed
several acquisitions that enhanced and
solidified our existing footprint, while
increasing and consolidating our reach
in adjacent regions. Our Food Service
Solutions business was impacted by
mobility and regulatory changes in 2021
but also continues to find new growth
avenues and innovation opportunities.

Envoy Solutions
successfully completed
several acquisitions that
enhanced and solidified
our existing footprint,
while increasing and
consolidating our reach
in adjacent regions.

Annual Report 2021 FEMSA1 7

In the space that FEMSA
Comercio occupied as a
Business Unit, there will now
be three divisions:
Proximity Division,
Health Division,
and Digital Division.

Looking Ahead
As we begin a new chapter at
FEMSA with Daniel Rodríguez Cofré as
our CEO, we have also announced a
new organizational structure at FEMSA
as of January 1, 2022. In accordance
with our focus on maximizing our value
generation, the reorganization of
FEMSA Comercio within FEMSA will be
made up of the following three divisions,
in addition to the already well-known
Coca-Cola FEMSA and FEMSA Strategic
Businesses:

• Proximity Division (comprising
OXXO México, OXXO International,
OXXO GAS, Bara, and Doña Tota)

• Health Division (comprising our

pharmacies, laboratories,
and beauty stores)

• Digital Division (comprising our
coalition loyalty program and
financial business initiatives)

We are confident that these strategic
changes will allow our businesses to
continue in the line of growth and
expansion we have achieved to date,
thanks to the invaluable dedication of
our talented people. With this vision
for our collective future, I know we have
every reason to be excited
and optimistic.

But first, I encourage you to read our
2021 integrated Annual Report and learn
more about the highlights of our most
important work over this past year that
have contributed to where we are today.

Thank you for your continued
partnership and wishing you a healthy,
safe, and sustainable 2022.

José Antonio Fernández Carbajal
Executive Chairman of the Board

Annual Report 2021 FEMSA

1 8

In Memoriam

Don Alberto Baillères González, (1931 - 2022)

Don Alberto Baillères González leaves us a legacy of profound
inspiration, not only for our company but also for thousands
of Mexicans. He was a great man committed to his family,
his community, and the economic, cultural, and educational
development of Mexico. Throughout his life he faced great
challenges in all the businesses he led, which undoubtedly
made him one of the most important businessmen in our
country. Along the way, Don Alberto, aware of the importance
of giving back to our society, made very valuable contributions
in various sectors and social causes that will last for many
generations, including the creation of the Instituto Tecnológico
Autónomo de México, an institution that awarded him the
Doctorate Honoris Causa in 1999, and where he served as
president of the Governing Board.

He was a member of FEMSA’s Board of Directors since 1989,
and was a great friend and partner who contributed his vision,
talent, and knowledge to drive the evolution of our company
for many decades, some of them with difficult years and
challenges. His support in transcendental decisions has made
us what we are today.

This outstanding man, who always considered that living is
incredible–and did so for 90 years– will always be remembered
with great affection, respect, admiration, and deep gratitude.

Annual Report 2021 FEMSA+13 million

consumers every day

1 9

+24,000 points

of sale from our three divisions

The three divisions of FEMSA Comercio (FEMCO)—Proximity, Health,
and Fuel— deliver economic and social value for all our stakeholders.
Our brands include OXXO proximity stores; drugstores under the
brands Cruz Verde, Farmacias YZA, Moderna, Farmacon, Fybeca,
Sana Sana, and Maicao beauty stores; and OXXO GAS service stations.

+270,000

beneficiaries of our
actions to support
community development

Annual Report 2021 FEMSAFEMSA ComercioThrough our divisions we contribute to
the direct employment of more than
200,000 people across Latin America,
deliver close to 33.1 million products and
services, and serve more than 13 million
consumers every day.

An important part of our business model
is our commitment to sustainability and
our alignment with FEMSA’s strategy
focusing on Our People, Our Community,
and Our Planet. FEMCO divisions made
significant progress during the year in
contributing to FEMSA’s Sustainability
Strategy and related corporate goals by
working on a variety of initiatives
and programs.

FEMSA Social Development Model

In alignment with the Our People pillar

of the FEMSA Sustainability Strategy,

FEMSA Comercio seeks to support the

integral wellbeing of our collaborators

across three divisions by upholding

the FEMSA Social Development Model.

Through this guided approach, we

promote the personal and professional

development of our people, together

with their families, through various

programs and activities to support an

enhanced quality of life for all.

2 0

Through our divisions we
contribute to the direct
employment of more than

200,000
people
across Latin America.

An important part of our
business model is our
commitment to sustainability
and our alignment with
FEMSA’s strategy focusing
on Our People,
Our Community
and Our Planet.

Annual Report 2021 FEMSA
2 1

OXXO’s value proposition is

one of one-stop convenience:

responding to our customers’

daily, on-the-go needs in ways

that will simplify their lives.

Proximity Division

FEMSA Comercio’s Proximity Division
operates the largest chain of small-format
stores in Latin America with the aim of
delivering convenience and simplifying
the lives of all our customers.

Under the brand name, OXXO, our
value proposition is one of one-stop
convenience: responding to our
customers’ daily, on-the-go needs
in ways that will simplify their lives.
While mobility did not fully return in
2021 to pre-pandemic levels, we saw
increases in store foot traffic as COVID-
related operating restrictions eased,
establishments opened, and commutes
resumed to some degree. Consumer
shifts toward in-home food consumption
continued and, in all cases, OXXO
responded to our customers’ evolving
needs with agility and resiliency.

OXXO responded to
our customers’ evolving
needs with agility
and resiliency.

Annual Report 2021 FEMSAWe continued to focus on financial
discipline, expense efficiencies, and
cost containment in 2021, tightening
our standards for approving and
operating new stores as the pandemic
stretched into a second year. Although
our expansion plans were slowed,
we completed the year with 865 net
store additions in Mexico. OXXO same-
store-sales were up 7.7% for the year,
reflecting a 2.2% drop in-store traffic
and an increase of 10.2% in the average
customer ticket, both against 2020.

Proximity Division Points
of Sale 2021

Mexico

Colombia

Chile

Peru

Brazil*

Total

20,121

133

122

1,275

21,706

*Through our joint-venture with Raízen; Grupo Nós.
Includes 1,162 Shell Select stores operated by
independent franchisees.

FEMCO Proximity Division: Living the FEMSA Sustainability Strategy

our people

In line with FEMSA’s commitment to

offer equal opportunities for recruitment

and development while supporting

inclusivity and non-discrimination, the

Proximity Division promotes the labor

inclusion of minority groups and those in

vulnerable situations. For example, since

2019, OXXO implemented its refugee

inclusion program, in collaboration with

the UN Refugee Agency (UNHCR) and

Tent Partnership for Refugees. At year-
end, we have employed more than 400
refugees, and more than 200 migrants in
vulnerable situations at OXXO. We also
employ more than 2,680 senior adults
and 1,042 people with disabilities at
OXXO stores as of 2021.

our community

Our strategy to support community

development focuses on investing in

social impact opportunities, leading on

local actions that involve communities

and authorities to mitigate social risks,

volunteerism, and supporting our neighbors

in times of emergencies or natural disasters.
In 2021, Ps. 36.5 million (US$ 1.8 million)
was invested in 560 actions to support
community development in the areas

of health, food security, and economic
recovery, with more than 270,000 direct
beneficiaries.

2 2

In 2021, Ps. 36.5 million

(US$ 1.8 million) was invested

in more than 560 actions

to support community

development.

At year-end, we have
employed more than

400 refugees,

and more than 200 migrants
in vulnerable situations
at OXXO.

Continues on next page

Annual Report 2021 FEMSA2 3

Continued from previous page

79%

of the waste
generated in OXXO
distribution centers
recycled.

100% of the energy
consumed in 15,400 of
our stores and 13 OXXO
distribution centers
powered with renewable
wind energy.

FEMCO Proximity Division: Living the FEMSA Sustainability Strategy

our planet

To continually drive energy efficiency in

In support of the circular economy, we

our operations, we invest in equipment

work to reduce the amount of material

upgrades and technological innovations

we use so that any waste generated

while incorporating new tools, processes,

from our operations can be recovered,

and best practices in support of climate

recycled, or reused. For example:

action. For example:

• 100% of the energy consumed in

waste separation capabilities and

• 12,675 stores equipped with

15,400 of our stores and 13 OXXO
distribution centers powered with

renewable wind energy

• 17,042 stores, 18 OXXO distribution
centers, and 27 offices equipped
with smart energy systems

• 6,750 stores utilizing solar control

films to optimize heating, ventilation,

and air conditioning

recycling bins

• 79% of the waste generated in

OXXO distribution centers recycled

• 13,485 used OXXO uniforms

upcycled, equivalent to 4,495 kg

of recycled PET

• 80% reduction in plastic bag

utilization since 2015 through the

“¡Sin Bolsa, Gracias!” (“No bag, thank

• +37.5% reduction in energy

you!”) campaign

consumption per store compared to

2009 baseline

• 1,450 tons of end-of-life equipment
and furniture diverted from landfill

through recovery and recycling

Annual Report 2021 FEMSA
2 4

As of the end of 2021,
1,183 stores now offer
the ¡O’Sabor! concept and
we expect to continue

its expansion.

Redefining Food, Beverage and Self-Care Convenience
As mobility and on-the-go consumption needs began to recover during the
year, we reinforced our value proposition to best meet customer needs.
In 2021 we focused on:

» Strengthening our offerings for
fresh, hot meals at affordable
costs. We continued to offer our
popular freshly prepared food brand
¡O’Sabor! in Mexico, which includes a
variety of specialized items such as
tacos, tortas, and fresh sandwiches.
As of the end of 2021, 1,183 stores
now offer the ¡O’Sabor! concept and
we expect to continue its expansion.
This year we also installed new
equipment and reconfigured displays
to freshly prepare new perishable
concept offerings, including pizzas
and bread. We also added new
modules for rotisserie chicken in
select locations.

» Adjusting SKUs in our portfolio to
continue responding to consumer
habits related to health, hygiene,
groceries, and self-care. In response
to the needs of the pandemic-era
consumer and demands for products
that promote health and wellness, we
strengthened our portfolio and in-
store displays of personal protection
products such as sanitizing gels,
disinfectant wipes, and face masks. We
also expanded affordable pantry items
for increased at-home consumption
patterns, including cooking oil, milk,
eggs, rice, cheese, nuts and seeds, pet
food, and even OXXO’s own brand of
sandwich bread. Further, we adjusted
and improved the nutritional content of
several OXXO private label products by
reducing excess calories, sugar, or fat.

» Expanding our selection of alcoholic
beverages by increasing sales in
adjacent categories such as the
Wines & Spirits category. In 2021
we continued working closely with
suppliers on packaging and flavors
exclusive to OXXO, making wider
selections available for affordable
new consumption occasions. We also
continued to offer brands produced
and distributed by HEINEKEN Mexico
and Grupo Modelo, adding several
markets this year where both
portfolios of brands are available,
representing more than half of our
stores in Mexico.

Annual Report 2021 FEMSA2 5

More than a Coffee

• On any given day in Mexico, OXXO

disposable polystyrene coffee cups to

stores may sell hundreds of thousands

of cups of andatti coffee, the Mexican-

cardboard paper cups, avoiding the
use of 540 tons of plastic annually.

• The transition of all single-use

grown brand exclusively offered at

our stores and online. Through a

new campaign in 2021, “andatti más

que un café” (andatti more than a

coffee), we are now making changes

for a sustainable planet to ensure

our customers can enjoy their hot

beverages in the most eco-friendly

ways. In addition to preparing coffee
with renewable energy in 70% of all
OXXO stores, key efforts include:

• A nationwide andatti refill campaign

that invites customers to bring their

own mugs to OXXO stores so they

can purchase a coffee in a reusable

vessel and refill it again at a discount,

avoiding the generation of more than
100 tons of waste each year.

• A pilot program in 50 OXXO stores
in Mexico City in which spent coffee

grounds are made available for

customers to use at home as

a nitrogen-rich compost and

garden fertilizer.

In 70% of our OXXO stores,

we prepare coffee with
renewable energy.

Annual Report 2021 FEMSA
2 6

As part of our commitment to

communities and generating

economic and social value,

OXXO plays an important

role in expanding

financial inclusion.

Financial Inclusion & the
Digital Opportunity
As part of our commitment to
communities and generating
economic and social value, OXXO
plays an important role in expanding
financial inclusion. With OXXO’s
strong infrastructure and unmatched
geographic network of locations, the
Proximity Division is well positioned to
build on our strengths in correspondent
banking and financial services to capture
our next stage of promising growth in
the digital world.

» In March 2021, we announced

‘Spin by OXXO’ a new platform that
offers financial services including
sending and receiving funds though
a cell phone; accepting deposits,
withdrawals, and balance inquiries
at any OXXO store; facilitating
purchases via a VISA card; and
completing SPEI® transfers and
transfers between app users. ‘Spin by
OXXO’ is a brand operating under a
conditional authorization.

This innovation aims to simplify
our consumers’ daily needs while
bringing secure financial services to

the entire population through mobile
device innovation and technology.

» We also launched our new loyalty
program, OXXO PREMIA, across
Mexico in October 2021, which
operates either as a stand-alone
program, or in tandem with ‘Spin
by OXXO’ by creating a membership
account for every ‘Spin by OXXO’
customer. Members receive benefits
such as OXXO PREMIA points
(earned from purchases), SellOXXOs
(free products when reaching a
certain goal), and other exclusive
promotions. In addition to rewarding
our customers, this program allows
us to use loyalty program insights
to continuously improve our
products and services while offering
customers more personalized
communications according to their
profiles and needs. As of year-end,
more than 3 million accounts had
already been created. Looking
ahead, we will continue to improve
the app’s user experience and
functionality as we aim to increase
membership to 5 million users
by next year.

Annual Report 2021 FEMSA

2 7

These digital innovations build on the
strong foundation and trust we have
built with our customers over many
years through the correspondent
banking services we offer in our more
than 20,000 stores throughout Mexico.
Through these offerings, customers can
access approximately 7,400 electronic
and financial services, such as deposits,
cash withdrawals, remittances, money
transfers, payment of services or
household bills, such as internet or
electricity. In addition to our existing
partnerships with BBVA, Santander,
Scotiabank, HSBC, Inbursa, Bancoppel,
Afirme, and Caja Popular Mexicana
cards, among others, we continued
to grow this network and expand
financial inclusion in 2021 by also
integrating service for Banregio and
Hey Banco cardholders.

» Through our OXXO PAY service,
powered by Conekta, customers
can easily make cash payments at
any OXXO store for digital goods
and services, such as initiating
or renewing Spotify Premium
subscriptions. In 2021, we again
achieved strong performance in
real-time service payments, with
OXXO PAY representing 48% of
the growth in payment receipts
(accumulated to September),
representing 24.4% of the volume
of total payments received. Through
our alliance with Amazon México,
customers that do not have a credit
or debit card can purchase any
Amazon product and pay for it at
their local OXXO store using an
auto-generated Amazon PayCode via
OXXO PAY. After paying, customers
can then return to retrieve their
packages at one of 787 stores
currently operating as secure “pick up
points” in Mexico. Since this program
began in 2018, more than one million
packages have been safely delivered
and picked up at OXXO stores.

Customers can access
approximately
7,400 electronic and
financial services.

Through our

OXXO PAY

service, powered by
Conekta, customers can
easily make cash payments
at any OXXO store for digital
goods and services.

Annual Report 2021 FEMSA2 8

In Chile, Colombia, and
Peru, we revamped our
convenience food offerings
with the launch of
new concepts.

We focused expansion in

residential areas, a large

segment where our value

proposition proved to be

highly resilient and

well received.

OXXO International
Beyond Mexico, we continue to
strengthen our value proposition
and leverage our scalable business
platform through expansion to new
markets. As mobility trends improved
in 2021, we profitably accelerated store
openings (increasing the store base by
14%) despite uncertain and restrictive
environments. We focused expansion
in residential areas, a large segment
where our value proposition proved to
be highly resilient and well received. In
both Peru and Chile, same-store-sales
surpassed 2019 pre-pandemic levels,
with both achieving margin expansion
and relevant contribution growth versus
2019 in all international operations.
These improvements resulted from an
agile adaptation of our value proposition
to the prevailing consumer context, as
well as structural operational efficiencies

across all markets. For example, in Chile,
Colombia, and Peru, we revamped our
convenience food offerings with the
launch of new concepts, including a
line of artisan pizza that complements
the reactivation of core concepts
such as andatti coffee and the Vikingo
sandwiches line.

In Colombia, to better serve our
customers’ daily needs, we also
profitably ramped up the development
of our digital platform to quickly
strengthen online sales and home
delivery capabilities in response to
increased demand (delivery sales
represented 6% of total sales). This
move set a strong foundation for us
to work toward a longer-term digital
strategy to capture new business
opportunities and deliver the ultimate
convenience experience.

Annual Report 2021 FEMSA2 9

We opened

230 new
stores
in Brazil in 2021, including
117 franchised Shell
Select stores.

We also successfully
expanded to a second
local market (Brazil’s
largest), São Paulo
Capital, where OXXO’s
revenue performance
exceeded expectations.

In Brazil, we continued to grow our
presence during the year through
our 2019 joint venture with Raízen,
“Grupo Nós”. Our value proposition
for the Brazilian consumer maintains
the flagship elements of the OXXO
chain that have been so successful in
Mexico, while also “regionalizing” the
stores to deliver the most competitive
solutions that cater to local tastes. We
also successfully expanded to a second
local market (Brazil’s largest), São
Paulo Capital, where OXXO’s revenue
performance exceeded expectations.
In total, we opened 230 new stores in
Brazil in 2021, including 117 franchised
Shell Select stores (to reach a total of
1,162 franchises) and 113 company-
owned and operated stores (to reach
a total of 73 OXXO and 40 Shell Select
stores). Looking ahead, we will continue
to strengthen our international
presence by continuing to grow in
Brazil and across our South
American markets.

Annual Report 2021 FEMSAHealth Division

FEMSA Comercio’s Health Division
responds to the pharmacy, health, and
wellness needs of the communities
where we have a presence. Through
a large and growing network of
drugstores and related operations
in four countries, we represent
the third largest pharmacy chain
in Latin America in terms of sales.
We distribute and sell patented and
generic pharmaceutical drugs, beauty
products, medical supplies, and
wellness and personal care products,
among other categories.

As we have grown, we have evolved from
a set of local operations in a historically
fragmented industry to a consolidated
and centralized regional system.
Our size, scale, and unified network
differentiates us from our competitors
because we are able to use these
advantages to work with our producers
and suppliers on a regional scale to
secure the best health and beauty
products, for the best prices, which
we then pass on to all our customers.
100% ownership of our health platforms
in Mexico and South America since

3 0

We represent the third
largest pharmacy chain
in Latin America in
terms of sales.

100%
ownership

of our health
platforms in Mexico
and South America
since 2020.

Health Division Points of Sale 2021

Ecuador

Colombia

Chile*

Mexico

Total
*Including 172 Maicao beauty stores

813

520

891

1,428

3,652

Annual Report 2021 FEMSA
2020 has also allowed us to strategically
deploy talent in different parts of the
platform, establishing a free flow of best
practices across brands and countries.

Our pharmacies play an essential role
in ensuring that people across Latin
America can access important medicines,
sanitizers and other self-care, beauty,
and immunity-boosting supplies. We also
participate in every part of the medicine
business. For example, in Colombia,
where we recently opened our 520th point
of sale – becoming one of the country’s
largest drugstore operators – we also
deliver daily medicines to 3,500 beds in
28 intra-hospital pharmacies, as well as
directly serve more than 5 million people
in the public health system through our
medicine dispensing business.

Total revenues increased 12.1% as
compared to 2020 and same-store sales
increased an average of 9.5% from 2020,
mainly reflecting higher consumption in
Chile coupled with positive trends in our
Mexican and Colombian operations.
We expanded our drug store count by
284 net additions to reach a total of
3,652 open units across our territories
as of year-end.

3 1

FEMCO Health Division: Living FEMSA’s Sustainability Strategy

our people

our community

our planet

We provide specialized training to our

We advocate for the accessibility

employees to support their professional

and affordability of healthcare in the

As of 2021, 640 pharmacies are now
powered by energy from renewable

growth and development in a variety

communities where we operate, an

sources. We also reduced our greenhouse

of topics. Priority is given to offering

approach that is adapted to the unique

gas emissions through route optimization,

health-related trainings to better equip

environments of each country, such as

maintenance improvements and other

employees to answer customer questions

health programs for the elderly, mobile

adaptations to our facilities.

and meet their needs in our stores.

pharmacies and clinics, and healthcare

In support of our ongoing diversity and
inclusion efforts, we have more than
983 employees in our workforce that
represent senior adults and people with
disabilities and 68% of our employees
are women.

for children, among others. Through the

To support the circular economy and

“Redondeo” or “Dona tu Vuelto” (Donate

FEMSA’s corporate zero waste to landfill by

your Change) programs, customer

2030 goal, in 2021 we achieved:

donations are directed to support

institutions that work for the benefit

• Zero use of plastic bags in our South

of society. In 2021, these programs at

Farmacias YZA in Mexico channeled more
than Ps. 4.9 million to 13 local institutions.

American operations and a 60%
reduction in use of plastic bags in

Mexico since 2019.

• 100% of distribution centers now
equipped with infrastructure and

processes to recycle packaging

and waste.

• 100% of the Health Division

operation has inverse logistics for the

retrieval and recycling of cardboard

boxes from the supply chain.

• 2,243 pieces of end-of-life equipment
and furniture recycled, and 100%
of electronic waste is disposed of

responsibly in Mexico.

68% of our
employees
are women

Annual Report 2021 FEMSA

3 2

Enhancing our Customer Value Proposition
In 2021, we continued to enhance our customer value proposition in several
important ways:

» Loyalty program: We are proud

to offer our customers in Chile and
Colombia a free loyalty program
that offers discounts twice a week
on products that support health and
wellness needs. As of 2021, we have
7 million customers enrolled in our
loyalty program in Chile, representing
more than 50% of the country’s total
population older than 18 years of
age and driving approximately 87%
of our pharmacy sales. In Colombia,
as of 2021 we have approximately
1 million customers enrolled, with
plans to expand similar programs to
Ecuador and Mexico.

Our loyalty program not only helps
inform our product sourcing and
geographic distribution decisions,
but also allows us to expand digital
marketing and communicate in
a very personalized way with our
customers. Monthly, we launch
420 digital campaigns based on
targeted interests and preferences.
We also have special opt-in groups
based on specific healthcare issues,
such as cholesterol or diabetes,
through which we offer additional
discounts on products related to
those concerns. This data helps us
communicate directly with producers
to ensure we are bringing the best
products and offerings for specific
customer needs.

Monthly, we launch 420
digital campaigns based
on targeted interests

and preferences.

Annual Report 2021 FEMSA

3 3

» Digital inclusion: An important

part of our transformation of the
customer pharmacy experience has
been through the development of a
digital ecosystem and online order
management system. In 2020 in
Chile and Colombia, and in 2021 in
Mexico and Ecuador, we launched an
e-commerce website and app, which
account for approximately 3% of our
sales in Chile and approximately 7%
of sales in Colombia. Home-based
purchases have increased during the
pandemic, but we have also learned
that not all customers are interested
in changing their consumption
habits or paying delivery fees for
smaller ticket sizes. We continue to

offer the popular “click-and-collect”
service (through which customers
can go to our website or app,
confirm inventories, compare prices,
click on the products they need, pre-
pay, and collect purchases quickly
and at their convenience). More than
half of our online sales are through
the click-and-collect service, where
pickups are currently available in
70 pharmacies in Chile.

Looking ahead to 2022, we are
aspiring to expand these capabilities
to become a full omnichannel service,
first in Chile and Colombia, followed
by Ecuador and Mexico.

We launched an
e-commerce website
and app, which account
for approximately 3% of
our sales in Chile and
approximately 7% of sales
in Colombia.

Annual Report 2021 FEMSA » Transparency: In June 2021 in Chile,
we launched a campaign focused
on expanding the transparency
of our customers’ purchases and
transactions. Monthly, we share via
email the breakdowns of the margins
and pricing structures of medicines
with 1.5 million customer accounts.

In another initiative in support of
transparency and inclusion, we
are also expanding access to very
affordable, generic medicines
through the Maicao chain of
stores, which has historically been
positioned as a beauty store. For
those customers who are looking
to pay less for medicines, we will be
opening specialized pharmacies in
close to 100 Maicao stores in Chile.

We are expanding access
to very affordable,
generic medicines
through the Maicao
chain of stores.

3 4

Monthly, we share via
email the breakdowns
of the margins and
pricing structures of
medicines with

1.5 million

customer accounts.

Annual Report 2021 FEMSA3 5

We continued to implement

the sanitization protocols

established in 2020 in all

our service stations.

We have improved our value proposition
for our B2B customers, to whom we
offer personalized service and access
to reliable and easy-to-use technological
platforms for efficient fuel and fleet
management. This allowed us in 2021
to provide service to more than 5,000
corporate fleets and grow the volume for
this segment by 22% versus the prior year.

With a network of
567 service stations
(out of approximately
12,000 total stations in
the country) in
17 states, OXXO GAS
is one of the largest
operators in Mexico.

Fuel Division

FEMSA Comercio’s Fuel Division operates
the OXXO GAS brand of retail service
stations in Mexico, selling gasoline
and diesel to both retail and Business-
to-Business (B2B) customers. With a
network of 567 service stations (out of
approximately 12,000 total stations in
the country) in 17 states, OXXO GAS is
one of the largest operators in Mexico.
OXXO GAS’ value proposition aims to
provide the customer with a superior
and distinctive service, supported by the
values of honesty and trust.

During 2021, mobility restrictions related
to COVID-19 continued to impact vehicle
usage and fuel consumption. As the year
progressed, restrictions relaxed, and
we experienced improvements in fuel
demand. However, OXXO GAS sales for the
full year remained below pre-pandemic
levels. We continued to implement the
sanitization protocols established in 2020
in all our service stations to safeguard our
employees and customers.

Annual Report 2021 FEMSA3 6

OXXO GAS celebrated 25 years of
operations in 2021. The business that
began with just two stations in Nuevo
León has gone through many changes
over the years. During that time, we
have focused on changing the way fuel is
sold in Mexico by offering a trustworthy
and high-level service to our customer,
while prioritizing the development and
wellbeing of our employees.

100 service stations are
powered by renewable
energy and 100% of service
stations have energy
efficient LED
illumination systems.

FEMCO Fuel Division: Living the FEMSA Sustainability Strategy

our people

our community

Through the Cuídate con OXXO GAS (Take

We strive to “Be the Energy that Moves our

Care with OXXO GAS) program, the Fuel
Division covers approximately 7,800
employees and their immediate family

Communities” by helping our neighbors

improve their quality of life and ensuring

they benefit from the contributions of

members with a minor medical expenses

our employee volunteers. In July 2021,

policy. We also support the children of our

employees by providing school supplies

and contributing to their educational
needs. In 2021, 5,493 school kits were
delivered to families.

together with OXXO and Fundación FEMSA,
we contributed Ps. 660,000 for the
remodeling of the public space in Manuel J.

Clouthier Park in San Pedro Garza García,

Nuevo León, so that families could enjoy

spending more quality time together

through playtime, recreation, and sports.

As part of our COVID-19 response in 2020,

we launched “Un Litro Con Causa” (A Liter

with a Cause) initiative, through which
we donated more than 32,000 liters of
fuel to the Mexican Red Cross. Continuing

the importance of this support to our

communities, in 2021 we donated more
than 36,000 liters of fuel to the Mexican
Association of Food Banks, helping to

transport food to people in need in five states
and benefiting more than 350,000 people.

our planet

The renovation included cleaning up and

In alignment with FEMSA’s commitments

enhancing the park’s natural green spaces,

to climate action, water management,

and adding new games and activities in

and circular economy, we continue

a special area designated for early

working toward the incorporation of green

childhood development.

technologies that contribute to reducing
our environmental footprint. 100 service
stations are powered by renewable
energy and 100% of service stations
have energy efficient LED illumination

systems to reduce energy consumption.

We have waterless urinals in restrooms

to reduce water consumption, as well as

infrastructure for the separation, sorting,

and recycling of waste through our Safe

Waste Management System.

Annual Report 2021 FEMSA

3 7

Competitive Differentiation
In an increasingly competitive
environment, we focus on differentiating
ourselves by delivering the industry’s
most efficient, friendly, and reliable
customer service. We also pride
ourselves on exemplifying trust and
honesty, as well as offering conveniently
located, safe and clean facilities with
excellent sales promotions.

We have strict security and maintenance
protocols for calibrating our gas pumps
to guarantee full liters. To further
strengthen our customers’ confidence
that the liters they pay for are the liters
they receive, we launched the “Prueba
de Litros Completos” (Complete Liters
Test) program in nine states in Mexico in
July 2021. Through this initiative, which
we plan to extend to more locations,
customers can request to fill a liter
of gasoline into a glass measuring
container, showing that the liter is
indeed complete.

Another way we improved the customer
experience is through technology. Last
year, we installed a new contactless point
of sale system, coupled with handheld
devices that allow us to make customer
interactions at our service stations faster,
more convenient, and efficient, including
real-time billing at the pump. We also
continue to offer an app that allows
users to locate our service stations and
see all the services available, such as
payment methods, prices, available fuel,
and access to billing options.

We installed a new
contactless point of sale
system, coupled with
handheld devices that
allow us to make customer
interactions at our service
stations faster, more
convenient, and efficient.

Annual Report 2021 FEMSACommitted to our Employees
We are only able to deliver the strongest
customer service and maintain our
competitive edge because of our
employees, who are committed to
upholding our organizational culture.
We seek to ensure that our collaborators
have all the tools, training, and
motivation they need to do their jobs
well, and we take active steps to support
their quality of life, both professionally
and personally. In 2021, we redesigned
and evolved our training program to
help employees better respond to
the needs of each type of customer.
Through constant communication,
targeted engagement activities, career
development plans, and coaching
programs – along with above-industry
wages and compensation structures – we
reduce turnover and support continued
employee growth within the company.

The Fuel Division has also implemented
strategies for the benefit of a diverse,
inclusive, and equitable culture,
transforming our team of more than
7,000 employees. In an industry that
was historically made up mostly of men,
today 25% of the OXXO GAS team is
made up of women, 63 collaborators
are senior adults, and 24 employees
represent people with disabilities. In
2021, we won the “Gasoline Leadership”
award by Onexpo Nacional, in recognition
of our social responsibility efforts related
to occupational health and inclusion
and diversity, further solidifying our
commitment to the Our People pillar
of FEMSA’s Sustainability Strategy.

Looking ahead, to maintain our status
as a leading brand in the fuel industry,
our strategy is to sustainably grow our
footprint by bringing our quality services
– and the advantages of our promotions,
accessibility, proximity, safety, and full
liters – to more people in Mexico.

3 8

Today

25%

of the OXXO GAS team is
made up of women,
63 collaborators are
senior adults, and
24 employees represent
people with disabilities.

Annual Report 2021 FEMSA
3 9

Volunteering activities
impacting more than

300,000 people

31%

recycled PET used on
average across our plastic
bottle presentations

With 131 leading brands produced in 49 bottling plants,
Coca-Cola FEMSA is the largest franchise bottler
of Coca-Cola products in the world by volume.

1.3 million

beneficiaries in
activities focused on our
sustainability pillars

Annual Report 2021 FEMSACoca-Cola FEMSA4 0

Guided by our purpose, we’re working seamlessly,
collaboratively, and agilely across six strategic corridors:

• Build Out an Open Omnichannel Platform

• Develop a Consumer Centric Winning Portfolio

• Foster an Agile, Digital Savvy and People Centric Culture

• Place Sustainability at the Heart of our Organization

• Digitize the Core

• Actively Pursue Value Enhancing Acquisitions

In 2021, Coca-Cola FEMSA took significant
steps across all strategic fronts while
making key decisions for future growth.
Importantly, we worked with
The Coca-Cola Company to bolster our
successful, longstanding relationship.
Our enhanced cooperation framework
ensures the long-term alignment of
our partnership, growth plans, and
strategies—enabling us to not only
continue building a winning consumer-
centric portfolio, but also explore new
multi-category opportunities across our
markets while we develop new strategic
digital initiatives.

Our strategic growth and industry
leadership is driven by our purpose to
refresh the world anytime, anywhere—
always finding the most efficient and
sustainable way to put our consumer’s
choice in their hands whenever and
wherever they want it.

Annual Report 2021 FEMSA4 1

We were able to deliver solid

top-line performance while

leveraging very disciplined

hedging strategies to

substantually protect

our margins.

Notably, 2021 was a year of recovery
and margin protection in the context of a
challenging raw materials environment.
Despite supply chain disruptions
and market volatility, we were able
to manage our working capital while
leveraging very disciplined raw material
and currency hedging strategies to
substantially protect our margins.
We also strengthened profitability by
segmenting consumers and selectively
increasing prices, while continuing to
offer affordability where our consumers
needed it.

Our volumes for the year increased
5.3% (or 2.6% higher than pre-pandemic
levels in 2019), and total revenues
increased 6.1% to Ps. 194.8 billion
(US$ 9.5 billion). Results reflected the
easing of restrictions throughout
the year, and Coca-Cola FEMSA’s ability
to execute in the marketplace and gain
market share. Additionally, operating
income improved 8.6% to reach
Ps. 27.4 billion (US$ 1.3 billion), driven
mainly by favorable hedging initiatives
and price-mix effects, coupled with solid
top-line performance.

Our volumes for the
year increased 5.3%
(or 2.6% higher than
pre-pandemic levels
in 2019), and total
revenues increased
6.1% to Ps. 194.8 billion
(US$ 9.5 billion).

Annual Report 2021 FEMSABuilding Out an Open Omnichannel Platform
During the year, we markedly accelerated the evolution of our
customer-centric B2B omnichannel multi-category commercial platform.

In 2021, we continued to deepen our
ongoing digital transformation by
developing and deploying omnichannel
capabilities to offer new solutions for
order taking, customer service, route-to-
market, and logistics models.

We continued to grow the capacity and
reach of our omnichannel commercial
platform, which is currently centered
in a B2B digital order-taking chatbot
that was first rolled out in Brazil and
Mexico last year. The number of
orders placed through this channel
since launch have continued to climb
exponentially, exceeding expectations.
With fully automated and user-friendly
functionality, the platform offers a
differentiated customer experience
with a convenient selling window that is
accessible 24 hours a day, 7 days a week.
We are serving over 500,000 registered
clients, including almost 300,000 active
purchasers monthly, on our B2B platform.

This year, we also reached an inflection
point— with digital purchases accounting
for over 6% of our total orders or almost
US$ 360 million.

Importantly, during 2021, our Brazilian
operation reached approximately
270,000 active users —including over
130,000 monthly buyers— on our B2B
omnichannel multi-category
commercial platform.

We are also focused on growing our
direct to consumer (D2C) capabilities
through our home delivery program,
“Coca-Cola en tu hogar” (Coca-Cola in
your home), which achieved double digit
growth in 2021. We now serve close
to 600,000 households in Mexico, and
we continued to reinforce this growing
value proposition by increasing the
number of home delivery routes
by more than 400 to reach more
than 1,200.

4 2

We now serve close to

600,000

households in Mexico,
and we continued to
reinforce this growing
value proposition by
increasing the number of
home delivery routes by
more than 400 to reach
more than 1,200.

Annual Report 2021 FEMSA

4 3

Developing a Consumer Centric Winning Portfolio
We are developing a winning multicategory portfolio with compelling options
for every consumer taste and lifestyle.

To further consolidate a winning total
beverage and consumer-centric portfolio
that satisfies all tastes and lifestyles,
we are continuing to improve our
competitive position across all products,
price points, and distribution channels.

• Portfolio Innovation

In 2021, we diversified our portfolio
to capture market share and
incentivize growth in the sparkling,
low- and no-sugar, juice, hydration,
tea, nutrition and energy categories,
ahead of consumer trends.

- We successfully launched the

new formula and visual identity
of Coca-Cola Sin Azúcar, or Zero
Sugar, which grew double digits
in Mexico, Brazil, Argentina
and Uruguay.

- Topo Chico premium sparkling
mineral water grew over 60%,
reinforcing its position as a
highlight of our portfolio in
Mexico, achieving consistent share
growth and signaling its potential
for continued expansion in
sparkling water moving forward.

In high-growth categories,
such as energy drinks, our
volumes increased more than
50% in Mexico and 80% in Brazil,
strengthening our competitive
position in this high-potential
segment.

Among our initiatives, we
continue to drive the
growth of our no and low-
sugar portfolio of sparkling
beverages to satisfy and
stimulate demand for our
products, while adapting
our portfolio to evolving
consumer behavior.

Annual Report 2021 FEMSA4 4

• Affordability

As consumers continued to face
challenging economic environments
amidst an ongoing pandemic, we
continued to prioritize and simplify
our portfolio with an emphasis on
affordability. This included responding
to the demand for affordable single-
serve bottles, multipacks, and multi-
serve returnable presentations.

We rolled out our multi-serve,
returnable PET universal bottle,
or “Botella Única,” to more of our
core markets in 2021. Bottles are
returned, fully washed, and refilled
with the same or another beverage
(such as Coca-Cola, Sprite, Fanta or
Valle Frut, a non-carbonated fruit-
based beverage) and re-marked with
a new label. Designed to be reused

up to 25 times before recycling, the
bottle not only delivers affordability
to the consumers seeking it but is also
an important example of the circular
economy. Through this approach, we
have gained up to three percentage
points of market share in our flavored
sparkling category and have also seen
great success in the non-carbonated
beverage category.

Finally, to incentivize and accelerate
“easy” transactions, we continued to
execute on our Magic Price Points
strategy across our markets, which
conveniently prices single-serve
beverages at the value of a single
common coin or bill.

We continue investing
in affordability,
including more than
US$ 500 million in
production lines and
returnable bottles
and cases over the
past two years.

Annual Report 2021 FEMSA4 5

• Building a winning consumer-

centric beer portfolio
This year, together with HEINEKEN,
The Coca-Cola Company, and the
rest of the Coca-Cola System in
Brazil, we successfully redesigned
our beer distribution partnership in
the country. As a result, during the
year, we completed the transition
of the Heineken and Amstel brands
to HEINEKEN’s distribution network,
and we proactively evaluated
and rolled out promising new
brands to complement our beer
portfolio. Leveraging our continued
relationship with HEINEKEN, we
incorporated and launched two
brands from HEINEKEN’s portfolio:
Eisenbahn, a premium brand, and
Tiger, a pure malt mainstream brand.

We further capitalized on market
opportunities to acquire Brazilian
craft beer brand Therezópolis
together with Coca-Cola Andina,
and announced a new agreement
to distribute leading Spanish brewer
Estrella Galicia’s portfolio, together
with the Coca-Cola System in Brazil.

Additionally we continue to roll
out pilot programs to test the
distribution of complementary
categories such as leading spirit
brands, other alcoholic beverages,
and leading consumer products
in certain markets.

Annual Report 2021 FEMSA4 6

We continued to

create mechanisms

and practices to live

and refresh our DNA

throughout

our organization.

Fostering an Agile, Digital Savvy & People Centric Culture
Consistent with our commitment to foster an agile, digital savvy, and people-centric
culture, we defined our Human Resources (HR) function’s long-term strategy.

To facilitate this strategy, HR acts as
agents of change—leading our cultural
transformation journey, reshaping
our company through talent, enabling
key organizational capabilities, and
improving HR data and processes to
deliver faster and better services to our
organization. Additonally, from digital
acceleration to the rise of remote,
flexible or hybrid arrangements, the
working world has changed, and in
response, Coca-Cola FEMSA has been
developing more agile, flexible structures
to support these new business models.

We continue to reinforce our “KOF
DNA” – a model made up of five key
values that guide our people with the
tools and capabilities they need to
succeed: Obsessive focus on consumers
and clients, Operational excellence,
Owner’s mentality, People first, and Agile
decisions. Grounded in this values-based
culture, in 2021 we achieved several
employee engagement highlights:

• Completed a self-development week
of on-demand learning modules
featuring 17 workshops on reskilling
and upskilling.

• Accelerated our leadership

development agenda by equipping
more than 5,500 managers with the
tools to lead strategic conversations
with their teams about leadership
transformation.

• Launched new KOF Academy

offerings, including 300 courses
across eight functional schools for
up to 49,000 collaborators. We also
utilized virtual KOF classrooms on
mobile devices for 6,000 leaders
and launched the pilot program,
APPRende KOF, an app to help
enable core business capabilities for
front line personnel in Brazil, Mexico,
Colombia, and Costa Rica.

Annual Report 2021 FEMSA4 7

Placing Sustainability at the
Heart of our Organization
We are leading a sustainability
strategy that incorporates
environmental stewardship,
social license, ESG metrics, and
governance practices.

At Coca-Cola FEMSA, we are
convinced that to create sustainable
economic value, we need to
simultaneously generate social
value in collaboration with all of
our stakeholders. In alignment with
FEMSA’s Sustainability Strategy to
support people, communities, and the
planet, we continued to strengthen
our key performance indicators in
2021 while extending our leadership
in ESG management.

Coca-Cola FEMSA reinforces

its leadership in sustainable

finance by issuing the first-ever

sustainability-linked bonds in

the Mexican market.

Leading on Sustainable Finance

In September 2021, Coca-Cola FEMSA issued the first

As part of this issuance, we also published a Sustainability

sustainability-linked bonds in the Mexican market for a total

amount of Ps. 9.4 billion (US$ 470 million). We priced bonds at

a fixed rate of 7.36% (Mbono+0.34%) for an amount of Ps. 6.97

billion due in seven years, and bonds at a variable rate of TIIE +

0.05% for an amount of Ps. 2.43 billion due in 5 years.

Linked Bonds Framework, which is aligned with the 2020

Sustainability Linked Bonds Principles, as administered by the

International Capital Market Association. The sustainability-linked

bonds will allow Coca-Cola FEMSA to complement the financing

alternatives with high environmental standards, enhancing the

investments we previously committed in the issuance of our first

In a sustainability-linked bond, the issuing company commits

ever green bond in the international capital markets in 2020.

to achieve certain targets related to its sustainable initiatives,

See our first Green Bond Report and for updated information see

however unlike a green bond, the net proceeds are not limited

Green Bond Report 2021.

to finance these objectives. Through this sustainable financing

strategy, Coca-Cola FEMSA aims to address one of the most

important issues where we believe we can generate the most

positive environmental impact: the efficient and sustainable use

of water. We have therefore made a public commitment 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. If these 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.

The net proceeds from these pricings will be used for

debt refinancing.

Annual Report 2021 FEMSAIn support of the Planet pillar of FEMSA’s
Sustainability Strategy, and the United
Nations Sustainable Development
Goals, we are focused on leadership
and transparency in climate action,
water management, and the circular
economy. In 2020, we became the first
Mexican company and the third Latin
American company to achieve the
approval of the Science Based Targets
initiative (SBTi) for our 2030 greenhouse
gas (GHG) emissions reduction goals,
confirmed to be aligned with what is
necessary to meet the goals of the
Paris Agreement.

• Water management: In alignment
with FEMSA’s focus on water and
achieving a neutral water balance in all
operations by 2030, Coca-Cola FEMSA
will seek opportunities to use water
more efficiently and to further protect
water security in the territories where
we operate. By 2030, we will continue
to return to the environment the same
amount, or more, of water used in the
production of beverages.

- As of 2021, we achieved a

water-use ratio of 1.47 per liter
of beverage produced, down
from 1.49 liters in 2020.

• Climate action: In alignment

with FEMSA’s goal to reach 85% of
renewable energy use across all
our operations by 2030, Coca-Cola
FEMSA’s SBTi-approved 2030 Emissions
Reduction Plan aims to drive positive
environmental change across our
entire value chain. To this end,
Coca-Cola FEMSA will:

- Reduce absolute scope 1 and 2
GHG emissions by 50% below
2015 levels

- Reduce absolute scope 3 GHG

emissions by 20% below
2015 levels

Increase annual sourcing of
renewable energy to 100%
by 2030

- We also expanded the use of

clean energy in our manufacturing
facilities to 85% for 2021 across all
of Coca-Cola FEMSA, up from
80% in 2020.

4 8

We also expanded the
use of clean energy
in our manufacturing
facilities to 85% for
2021 across all of
Coca-Cola FEMSA, up
from 80% in 2020.

Annual Report 2021 FEMSA
4 9

ESG Performance Highlights

As of 2021, Coca-Cola FEMSA was

We were also proud to be included in the

the only Latin American company in the

FTSE4Good Emerging Latin America Index

beverage industry included in the

for the sixth consecutive year, and the

Dow Jones SustainabilityTM Emerging

Bloomberg Gender-Equality Index for the

Markets Index for the ninth consecutive

third consecutive year. For the third time,

year; and remained part of the Dow Jones

we were recognized as one of the best

Sustainability MILA (Mercado Integrado

places to work for the LGBTQ+ community

Latinoamericano) Pacific Alliance Index

by the Human Rights Campaign Foundation

for the fifth consecutive year. In February

and HRC Equidad MX. For the first time in

2022, Coca-Cola FEMSA was included

2021, Coca-Cola FEMSA was named the

for the second consecutive year in the

winner of the Bonds & Loans Latin America

S&P Global Sustainability Yearbook

& Caribbean Award for Investment Grade

2022 due to our high performance in

Corporate Bond Deal of the Year by GFC

the S&P Global Corporate Sustainability

Media Group, in recognition of our first

Assessment. Coca-Cola FEMSA is ranked

green bond in the international capital

within the top 15% of leading beverage

market placed in 2020.

companies in sustainability under S&P

Global’s proprietary annual evaluation of

the environmental, social, economic, and

corporate governance dimensions of more

than 7,000 companies around the world.

• Circular economy: In alignment

with FEMSA’s goal to send zero waste
from operations to landfills by 2030,
Coca-Cola FEMSA will focus on zero
waste to landfill priorities. We also
remain committed to World Without
Waste, the global initiative led by
The Coca-Cola Company, which
includes 2030 targets to collect and
help recycle the equivalent of 100% of
the primary packaging we place in the
market, as well as integrating 50% of
recycled PET resin into our bottles.

As of 2021, 46% of our bottling plants
have earned Zero Waste to Landfill
certification, including 100% of our
manufacturing facilities in Mexico.
We have also increased our use of
recycled PET to 31% up from 29%
in 2020.

We began the planning and

construction for our new recycling
plant, PLANETA (Planta Nueva
Ecología Tabasco) that, together with
18 collection centers, will be able to
process up to 50,000 tons of post-
consumer PET, creating around
20,000 jobs in southeastern Mexico.

Our new recycling plant,
PLANETA will be able
to process up to

50,000 tons

of post-consumer PET,
creating around
20,000 jobs in
southeastern Mexico.

Annual Report 2021 FEMSADigitizing the Core
We are implementing new digital tools, automating our processes, and
developing the architecture needed to enable our transformation.

In line with the development of our
omnichannel capabilities, we continue to
leverage data analytics to continuously
improve machine learning techniques
capable of suggesting orders and
increasing sales. We have also been
focusing on other financial enablers to
digitize our core, including automating
several back-office processes with the
support of KOF Financial Services (KFS).
This includes internal automations
such as scaling and optimizing human
resources and finance processes.

As part of our digital re-evolution,
an agile cell is working to design and
deploy a safe, frictionless, end-to-end
digital payment solution to customers
and consumers across all channels.
Thus far, we’ve rolled out the digital
credit card payment feature to almost
600,000 households throughout our
over 1,200 D2C home delivery routes
in Mexico. We’ve also enabled 1,200
customers to make digital QR code
payments, along with over 6,600
customers who pay digitally through
our B2B web portal in our Argentine
franchise territories.

5 0

Through our digital and
analytics hub, we’re
re-evolving our advanced
analytics and data
management capabilities to
produce valuable insights,
tools, and solutions for any
area of the company.

Annual Report 2021 FEMSA
5 1

Actively Pursuing Value Enhancing Acquisitions
Aligned with our strategy, we are not only exploring opportunities to shape our
company’s portfolio and footprint of the future, but also prioritizing adjacent
categories and capabilities to enhance our value proposition.

Consistent with the enhancement
of our Cooperation Framework with
The Coca-Cola Company, we will bring
together the strength of Coca-Cola’s
sales and distribution network with
our unmatched execution capabilities
to explore potential new businesses,
ventures, and inorganic growth
opportunities that can enhance our overall
value proposition and bring a positive
impact to the communities where
we operate.

To this end, in January 2022, in a move
that complements our footprint in
southern Brazil, Coca-Cola FEMSA,
through our Brazilian subsidiary
Spal Indústria Brasileira de Bebidas,
acquired CVI Refrigerantes, which
operates one bottling facility and three
distribution centers in the state of Rio
Grande do Sul, serving approximately
13,000 points of sale and more than
2.8 million consumers.

For more information, please visit

Coca-Cola FEMSA’s 2021 Annual Report

Annual Report 2021 FEMSA
We distribute
high-quality products in

50 countries

across five continents

5 2

Solistica offfers its logistics
solutions portfolio to close to

5,000
customers

in Latin America

Through Envoy Solutions,
we serve

+67,000
customers

in the United States

FEMSA operates several strategic businesses that are leaders in their
industries or sectors and provide solutions to FEMSA’s core business
segments and other companies, amplifying our competitive advantage.

Annual Report 2021 FEMSAFEMSANegocios EstratégicosDeploying industry-leading capabilities
and cost-effective strategies that
amplify FEMSA’s competitive advantage,
FEMSA Negocios Estratégicos comprise
Logistics & Distribution (including logistics
and transportation, as well as specialized
janitorial, cleaning, and sanitation product
distribution) and Food Service Solutions
(including cooling and refrigeration
systems and food service solutions).

In alignment with the FEMSA Sustainability
Strategy, our FEMSA Negocios Estratégicos
prioritize the development and integration
of sustainable products and eco-efficiency
services, such as increasing the content of
recycled materials and identifying energy-
saving solutions and opportunities.

Logistics & Distribution
Envoy Solutions
In 2021, FEMSA took several key steps
on our long-term strategic path to
building and consolidating a leading
specialized distribution platform in the
United States that will best serve the
needs of our customers. Envoy Solutions
is our diversified distribution subsidiary
that includes the legacy operations
of North American Corporation,

WAXIE Sanitary Supply, Southeastern
Paper Group, Daycon, Penn Jersey
Paper, North Woods, Johnston, Next-
Gen, Swish White River, Weiss Bros.,
General Chemical, Valley Janitor Supply
Company, and Bio-Shine. With this
series of acquisitions, we continued to
consolidate our footprint across key
regions of the U.S. and began to solidify
our national presence. Now with 50
distribution centers and more than
200,000 locations served, our strengths,
capabilities, and geographic footprint
are positioning Envoy Solutions as the
premier specialty distribution platform
in the United States.

We are working to integrate all recent
acquisitions into a single business model,
leveraging a consistent “winning formula”
management approach across all entities
to reinforce the collaboration of our
national team and exemplify one, unified
Envoy Solutions culture. This integrated
approach, which differentiates us from
our competitors, will allow us to leverage
our scale and best practices, share
knowledge, and cross-collaborate among
regions, serving our customers in the
most effective way.

5 3

Presence in the United States

With 50 distribution
centers and more
than 200,000 locations
served, Envoy Solutions
is the premier specialty
distribution platform in
the United States.

Annual Report 2021 FEMSADuring 2021, the specialized distribution
business continued to feel the impacts
of the pandemic, balancing positive
dynamics in several markets with some
end-user segments in the U.S. that
continue to operate below 2019 levels,
such as facility supplies, hospitality, and
office buildings that continue to operate
at low capacity. In response, Envoy
Solutions took the opportunity
to leverage and expand adjacent
capabilities to continue serving our
customers. As we did at the beginning
of the pandemic in distributing gloves,
gowns, and masks, in 2021 we increased
our volumes and offerings for food
service delivery needs, including
disposable food packaging solutions
for home deliveries, as well as other
packaging products.

For more information, please visit

https://www.envoysolutions.com

Solistica
Solistica is a leading third-party logistics
(3PL) solution provider for Latin America,
serving more than 4,000 customers
in seven countries across diverse

industries, such as: pharmaceuticals,
automotive, technology, and consumer
goods. Our more than 22,000 employees
offer comprehensive solutions in three
areas of expertise: Transportation,
Warehousing, and Other Value-Added
Services. Approximately 60% of our
business is made up of the services we
provide to companies outside of FEMSA.

Solistica continues to advance our vision
of being the preferred 3PL partner
in Latin America, recognized for our
regional expertise and innovative
solutions, and for consistently exceeding
customer expectations. We continue to
advance this vision by leveraging expert
talent in the region and consolidating our
capabilities and infrastructure.

By leveraging our synergies and
scale, this year we further unified our
capabilities to significantly enhance
our customer value proposition in the Latin
America region. Building on our recent
expansion in both warehousing and
distribution capabilities in Brazil, we are the
first fully integrated 3PL solution provider
in the Brazilian market.

5 4

Approximately 60% of

Solistica’s business is made up

of the services we provide to

companies outside of FEMSA.

Annual Report 2021 FEMSA5 5

Solistica Culture Model

In alignment with the value of customer
centricity, our brand promise seeks to not
only meet but exceed the expectations
of our customers and to be dedicated to
our customers’ business. We launched
the brand campaign, “Solistica, quality
from dawn to dusk,” as a unifying
communication strategy in all regions
that allows us to highlight our
3PL services.

For more information, please visit

https://solistica.com/en/

Culture Model
As Solistica has transformed, our
culture has also evolved, and in 2021,
we developed a new Culture Model
reflecting our five most important
business values that are in the center of
everything that we do: accountability;
integrity; customer centricity; agility; and
passion to winning together.

With a focus on becoming more
aware of the expected and potentially
unexpected behaviors associated with
each of these five values, we developed
Culture Rituals focused on aligning
the understanding of each of the five
values based on significant learning
experiences. These were shared
with employees through trainings,
evaluations, and other engagement
activities, reaching 10,000 collaborators,
thanks to the support and commitment
of more than 400 strategic and tactical
leaders deploying the sessions.

Annual Report 2021 FEMSA
5 6

With our five
manufacturing plants,
eight distribution
warehouses and
13 retail stores, we
distribute high-quality
products in
50 countries across
five continents.

• Torrey: Since 1960, Torrey has
utilized an extensive distributor
network to deliver high-quality
food processing, preservation, and
weighing equipment for butcheries,
small retailers, supermarkets,
convenience stores, hotels,
and restaurants in more than
50 countries worldwide.

• Cooking Depot: For 50 years,

Cooking Depot has been meeting the
kitchen equipment and accessory
needs of the market’s points of sale
and consumption centers through
continuous innovation in service
and by making hundreds of useful
products available to its customers.

Learn More

Food Service Solutions
FEMSA Negocios Estratégicos also
include a group of companies focused
on providing solutions in food service
equipment, commercial refrigeration,
materials handling, and integral services
at the point of sale. These operations
serve markets across Latin America and
beyond, through AlPunto Food Service
(Torrey and Cooking Depot), AlPunto
(Imbera-REPARE) and PTM. With our five
manufacturing plants, eight distribution
warehouses and 13 retail stores, we
distribute high-quality products in
50 countries across five continents.

ALPUNTO Food Service
Torrey and Cooking Depot manufacture
and market equipment to process,
weigh, and preserve food and beverages.
We understand the needs of our users
and develop profitable solutions for
them with the best functionality. In
2021, we delivered strong results and
managed to gain market share. The food
service business faced significant supply
chain challenges throughout the year,
but we offset the impacts we faced on
supplies, transportation, and shipping
costs through price management and
operational efficiencies.

Annual Report 2021 FEMSA
5 7

Imbera-REPARE’s more
than 4,500 employees
export equipment to
+60 countries from
three production
facilities in Brazil,
Colombia, and Mexico.

ALPUNTO

•

Imbera-REPARE: As the world

leader in the commercial refrigeration
industry, Imbera-REPARE’s more
than 4,500 employees export
equipment to 60+ countries from
three production facilities in Brazil,
Colombia, and Mexico. Through
innovation and high-performance
engineering capabilities, Imbera
has enabled faster, smarter, and
more sustainable products and
service solutions. REPARE is the
largest purveyor of comprehensive
maintenance and sale of parts
services in the Americas. It provides
maintenance and installation services
for Imbera, Torrey, Coca-Cola FEMSA,
OXXO and various other clients in
the industry. Our REPARE facility
recovers, repairs, redesigns, reuses, or
recycles up to 99% of the interior parts
of refrigerators at their end of life.

Imbera’s refrigerators consume
85% less energy than 2009 models
did (thanks to upgrades such as
energy efficient LED interior lighting)
and by 2025 we aim to reduce an
additional 50% from where we are
today. Accelerating the transition
to the circular economy, Imbera is
committed to supporting steps for the
responsible disposal of manufactured
equipment, and Imbera’s coolers use
R290 refrigerant, which has a low
environmental impact. In 2021, we
grew our capabilities by 35% for the
responsible final disposal and recycling
of coolers. Looking ahead, we will
continue capturing new opportunities
to increase our market share, such
as expanding our investments in the
Coca-Cola System, consolidating the
outsourced manufacturing (“maquila”)
segment for the U.S., and growing
in the micro market retail industry
through technology. We will also
capture new opportunities through
product development, including
developing a new stainless-steel line
of refrigerators.

Annual Report 2021 FEMSA•

Plásticos Técnicos Mexicanos

(PTM): Through its high-performance
engineering and recycling capabilities,
PTM’s more than 1,000 employees
design and manufacture plastic
transformation projects tailored
to each customer in support of
their operational and marketing
strategies for materials handling,
food, beverages, and automotive.
Its facilities include modern production
capacity for processes such as injection,
thermoforming, extrusion, and blow
molding. PTM’s business model,
products and services address the
waste challenge and promote the
principles of the circular economy.

In 2021, PTM achieved strong
financial results. In most verticals,
except for automotive, we are
continuing to develop new sources
of materials through recycling, to
help compensate for scarcity of
supplies in the market. During the
year we recovered more than 45,000
tons of plastic resins and recycled
more than 34,000 tons of plastic
(including automotive operations) –
reflecting the highest annual volumes
processed to date. In addition,
80% of PTM’s products — including
plastic pallets and plastic crates,
among others — were made from
recycled materials in 2021. Looking
ahead, we will continue to increase our
capabilities for recycling and recycled
raw materials, as well as increase
our participation in the materials
handling industry (i.e., pallets).

5 8

Through its
high-performance
engineering and
recycling capabilities,
PTM’s more than 1,000
employees design and
manufacture plastic
transformation projects.

Annual Report 2021 FEMSA5 9

We launched the
Caravana radiofónica
podcast to share the stories
of migrant families and children
in their own voices as part of
“Puerto Abierto” initiative

13 tons

of waste were collected
in Tulum, Mexico
through the “Puntos
Limpios” program

Fundación FEMSA was created in 2008 on the premise
that a sustainable company can only exist with sustainable
communities. Today, it is an important part of the way FEMSA
creates value by making a positive difference.

+US$ 240,000

invested in enabling public
spaces with a childhood
perspective in five countries

Annual Report 2021 FEMSAFundación FEMSACreated in 2008, the mission of the
Fundación FEMSA* is to make social
investments that will have a positive
impact on people’s lives and to build more
solid and sustainable communities where
we operate. This includes our purpose
of combating systemic problems today
for the health and prosperity of future
generations. In 2021, we advanced the
four pillars of the Fundación FEMSA’s
long-term impact agenda: Water Security,
Circular Economy, Early Childhood, and
the Arts & Culture, which contributes to
FEMSA’s Sustainability Strategy.

Water Security
Our actions in support of water security
for the communities where we operate
include expanding sustainable access
to safe water, improving sanitation
conditions, and strengthening watershed
conservation through applied scientific
research. Programs include:

• Fondos de Agua. First launched in

2011, Fundación FEMSA co-founded
the Latin American Water Funds
Partnership (LAWFP), an agreement to

contribute to water security in Latin
America and the Caribbean through
the creation and strengthening
of Water Funds – coalitions of
organizations that promote water
security through stakeholder
engagement, informed decision-
making, and responsible governance.
To date, 26 Water Funds have
been launched in ten Latin
American countries.

Each Water Fund has a strategic plan
that focuses on the dynamic needs of
the location and related water security
situation. Pilot programs help to
execute on those strategies and identify
innovative solutions. In 2021, through
the Fondo Ambiental Metropolitano
de Monterrey (FAMM, by its Spanish
acronym), we launched a pilot to change
the culture of water management in
local communities through citizen
activations, including high school
students. This approach is expected
to be replicated in more locations in
the state and in others where Funds
are installed.

* Fundación FEMSA is made up of two organizations that share the same purpose: Difusión y Fomento Cultural, A.C.
and Fundación FEMSA A.C.

6 0

In 2021, through
the Fondo
Ambiental
Metropolitano
de Monterrey,
we launched a pilot to
change the culture of
water management in
local communities.

Annual Report 2021 FEMSA6 1

As of 2021, we have supported

the access of nearly 150,000

people to water and sanitation

services, and approximately

195,000 have participated

in “Social Art for Behavior

Change” activities.

In partnership with Agua Capital,
we also developed a series of
projects aligned with our strategy to
achieve water security in Mexico City,
including one in which 100 rainwater
harvesting systems were installed
across the city, benefiting more than
600 people.

• Lazos de Agua. In partnership with
the Inter-American Development
Bank, The Coca-Cola Foundation,
One Drop, and the Cirque du Soleil
Foundation, this program focuses
on promoting behavior change
toward embracing water care and
hygiene practices through social
awareness and art interventions
based on traditions and customs
of communities in Colombia,
Guatemala, Mexico, Nicaragua,
and Paraguay. As of 2021, we have
supported the access of nearly
150,000 people to water and
sanitation services, and more than
195,000 have participated in “Social
Art for Behavior Change” activities.

To assess the progress, scope, and
impact of this complex program,
in 2021 we employed multiple new
quantitative and qualitative tracking
methods – from observational
surveys of households and water
utility service providers to a
software-based research tool that
captures insights from storytelling.
These inputs confirmed that the
Social Art for Behavior Change
interventions have already resulted in
significant increases in handwashing,
prioritizing the payment of fees for
local water services, and safe storage
of drinking water in homes.

To listen to some of the most
compelling stories of the role of
water in Latin America, tune into
the Lazos de Agua podcast,
Entre dos aguas, on Spotify or
other podcast applications.

Annual Report 2021 FEMSA
6 2

• Collaboration on water security &
COVID-19. In 2021 we worked with
the United Nations Development
Program, Ayuda en Acción, Fundación
Zurich, Rotoplas S.A. de C.V. and the
government of the Mexican state of
Morelos to improve access to water
and sanitation services for rural and
indigenous communities in areas of
water risk, specifically eight central
and southeastern states of Mexico
impacted by COVID-19. The vision of
this collaboration is to strengthen local
governance and community water
management through participatory
planning and the development of local
technical and functional capacities that
encourage resiliency, recovery, and
local economic reactivation following
the impacts of the pandemic. Toward
this end, the initiative supported
actions of reforestation and watershed
conservation that reinforced local
water supplies and recharge areas,
thereby strengthening water security,
and reducing conditions of vulnerability
for more than 6,000 families.

We collaborated with Ayuda
en Acción to improve access
to water and sanitation
services for rural and
indigenous communities
in areas of water risk,
specifically eight central and
southeastern states of Mexico
impacted by COVID-19.

Through Ayuda en Acción,

the local water supply

and recharge areas were

reinforced, strengthening

water security and reducing

the conditions of vulnerability

of more than 6,000 families.

Annual Report 2021 FEMSACircular Economy
In support of the circular economy,
we focus on understanding how we can
stop the post-consumption leakage of
waste into the environment by identifying
solutions that support a clean and healthy
environment for current and future
generations.

• Circularity Assessment Protocol
(CAP). In 2021, Fundación FEMSA
undertook a series of studies to gain a
greater understanding of the current
state of waste disposal in five cities in
Mexico. Using the CAP developed by
the Circularity Informatics Laboratory
at the University of Georgia in the
United States, the model provides
data for local, regional, or national
authorities to help reduce the leakage
of single-use plastics and other
waste into the environment, while
increasing opportunities for improved
circular materials management. We
are using the insights to help inform
our strategies in this area and, as
a next step, we will also share the
data and results from the study with
policymakers to encourage public
interventions that support the shift
towards a circular economy.

• Puntos Limpios. To reduce waste
generation and increase material
recovery rates in Tulum, Quintana
Roo, Mexico, we launched Puntos
Limpios in 2021. By including
the community as part of the
solution, this initiative promotes
environmental education,
encourages waste separation at the
source, and expands the capacities
of waste collectors to help prevent
waste leakage into the environment
or the landfill. In alliance with
strategic partners, including
Sustainable Tulum, TETRAPAK,
and the Coca-Cola Foundation,
among others; in 2021, the program
installed nine collection modules,
achieving a collection of more than
13 tons of waste, we have trained
more than 1,700 homes in the
community with this program, as
well as dissemination through social
networks and local media. Following
this pilot program, we hope to
replicate this initiative in other states
in Mexico as well.

6 3

In 2021, Fundación FEMSA
undertook a series of
studies to gain a greater
understanding of the
current state of
waste disposal
in five cities in Mexico.

Annual Report 2021 FEMSA6 4

We closed the first stage
of #SinDesperdicio,
having engaged more
than 500 startups and
benefiting 12 projects
with seed capital
to implement their
innovative solutions to
food loss and waste.

• #SinDesperdicio. Approximately

127 million tons of food are lost and
wasted every year in Latin America
and the Caribbean, despite being
a region where 42 million people
suffer from hunger. First launched
in 2018, #SinDesperdicio is a
platform of non-profit, corporate,
and advisory partners – including
the Inter-American Development
Bank, Nestlé, Grupo Bimbo, The
Global Food Banking Network, Dow,
World Resources Institute, OXXO,
IBM, and Food and Agriculture
Organization of the United Nations -
committed to reducing regional food
waste through innovation, public
policy changes, knowledge sharing,
and the promotion of sustainable
behaviors. Directly supporting the
twelfth U.N. Sustainable Development
Goal, “Responsible Consumption and
Production,” the program grants seed
capital and personalized incubation
opportunities to social entrepreneurs
that present the most viable solutions.

Since its creation, more than 500
startups have participated in
innovation initiatives, specifically in

waste and loss of food. During 2020,
12 projects benefited from seed
capital to implement their innovative
solutions to this pressing challenge,
closing the first stage in 2021. We
hope to further amplify scope of this
platform in 2022. Learn more.

• Expanding Waste Recycling in
South America. In collaboration
with the Inclusive Waste Recycling
Consortium (iWrc), we launched the
first pilot program of a new initiative
to strengthen the informal sector
of waste recycling in Brazil and
Colombia by setting up a socially
responsible network of cooperatives
that are now digitally connected
through an online platform that
allows the tracking and purchasing
of certified recycled materials for
their reinsertion into the market. We
secured the participation of several
large multinational companies to
buy recycled materials for their
supply chains, which benefits the
cooperative network and its more
than 2,000 members.

Annual Report 2021 FEMSAEarly Childhood
At Fundación FEMSA, our vision is for
all children to achieve their maximum
developmental potential and transform
their communities. To nurture crucial
life skills – and help overcome inequality
or other gaps arising from living
environments – we invest in the physical,
cognitive, linguistic, and socio-emotional
development of Latin American youth,
particularly early childhood from
gestation through age five. It is in these
first stages of life that children’s brains
grow and develop at tremendous speed
– making more than a million new neural
connections per second – representing a
vital foundation not only for health and
wellbeing, but for the social and emotional
capacities that will last them a lifetime.

Our strategy is focused on nurturing
three primary areas: Care, Communities,
and Policies.

Nurturing Care
Through unique educational tools,
content, training, and support services,
we seek to strengthen early childhood
development by building socio-emotional
skills and competencies for parents,
caregivers, and children.

For the last four years, we have supported
¡Listos a Jugar!, a cross-platform educational
program – created by Sesame Workshop
in collaboration with Fundación FEMSA
and other partners – to promote healthy
habits in preschool children related to
eating, playing, and personal care. The
program uses technology to bring useful
content to children in 13 Latin American
countries through episodes and songs
starring Sesame Street characters. In
2021, in cooperation with our network
of regional allies, we focused on
strengthening the program’s community
component within educational and
childcare centers by launching a new
module to support social-emotional
skills and positive parenting. Bringing
together more than 30 experts from
four countries, we created a new
awareness campaign that reached five
million people, including 150 educational
centers, 750 educators, and 15,000
children and their families.

6 5

We created a new
awareness campaign
that reached five million
people, including
150 educational centers,
750 educators, and
15,000 children
and their families.

Annual Report 2021 FEMSA6 6

Caring in an Ongoing Pandemic

Stretching into a second year, the global health crisis has continued to bring incredible challenges for
millions of families, caregivers, and schools around the world. From social isolation stemming from
school closures to ensuring safe returns to classrooms, Fundación FEMSA has endeavored to extend
nurturing care to the people and institutions responsible for the wellbeing of children impacted by
the pandemic.

• #PotencialParaTransformar. In alliance

with United Way, Fundación FEMSA worked in
Colombia, Chile, Brazil, and Costa Rica in 2021
to provide socio-emotional and technological
support to parents, educators, and caregivers
of children struggling with pandemic-related
isolation and related challenges at home,
such as lack of internet access. The program,
customized by country, was launched
through the communities of 67 educational
institutions, reaching more than 33,000
families. In Colombia, the “Socio-emotional
Learning Route” program was created; in Chile,
“Educational Communities: Support for Health
& Emotional Management in Crisis Situations;”
in Brazil, “Crescer Aprendendo” offered digital
content and guidance for accessing hygiene
and food supplies; and in Costa Rica,
50 companies were impacted or involved
in the early childhood topic and a research
project on the subject was developed.

• Safe Returns to Classrooms. As some
facilities prepared to reopen their doors
in 2021, Fundación FEMSA sponsored
multiple projects prioritizing safety and the
emotional health of educators, including
by strengthening their capacities to identify
and follow-up on unsafe environments. In
October, Fundación FEMSA and a network of
organizations joined forces with community
NGO, ENSAMBLE, and early childhood
specialists, Proyecto DEI, to provide guidance
to more than 4,600 caregivers of the Mexican
Institute of Social Security (or IMSS by its
Spanish acronym), which offers daycare for
children of working mothers covered by social
security. Through a two-week online training
and networking platform, IMSS nursery
staff were equipped with practical tools and
emotional support to safely prepare for the
re-opening of childcare centers in Mexico.

Continues on next page

Annual Report 2021 FEMSA
6 7

Caring in an Ongoing Pandemic Continued from previous page

• ChildTech Challenge. With the pandemic exacerbating lags in education and exposure to online
toxicity, Fundación FEMSA, in alliance with other partners, joined with social innovation platform,
Impactus Ventures, to launch the ChildTech Challenge in July 2021 – a call to social entrepreneurs

for high-impact technological solutions aimed at stimulating mental wellbeing and cognitive
development in youth. Winners each received US$ 30,000 to launch a new program in Chile, with
the idea to scale to other countries in the region. From among more than 100 startups answering
the call, the first two winners were announced in October:

BRAVE UP! was recognized for the

success of their digital platform in
detecting bullying and cyberbullying in
schools. Their mobile app and website
increase communication, identify risks,
and generate real-time data to support
responsive strategies that improve the
safe coexistence of schools and the
digital world.

Afinidata was recognized for their
early childhood education platform that
uses artificial intelligence and a chatbot
to deliver relevant content and guidance
to parents through their existing social
networks. Using this model, the new
program in Chile will support the cognitive
development of 1,700 children under the
age of six.

Annual Report 2021 FEMSA6 8

In 2021 we benefited more

than 22,000 people through

seven interventions in

Guatemala, Colombia, Chile,

and Mexico.

Nurturing Communities
We recognize that the environments in
which children develop not only influence
their own growth and development, but
also impact the surrounding communities
and society at large. Through this lens, we
focus on promoting healthy, sustainable,
and stimulating public spaces where
children can feel safe and spend quality
family time.

Tactical implementations allow us to
bring improvements in public spaces to
communities with an early childhood
perspective, and in 2021 we benefited
more than 22,000 people through seven
interventions in Guatemala, Colombia,
Chile, and Mexico. For example:

• We partnered with Urban 95,
specialists in urban planning
for early childhood, and other
organizations in Latin America to
begin creating a regional platform
in Colombia, Guatemala, and Chile
for greener, safer public spaces that
encourage safe and educational
playtime outside, particularly
important to combat pandemic-
related isolation indoors.

• In partnership with Glasswing

International, Fundación FEMSA
has committed to contributing to the
quality of life of children and families.
Wellness kits were delivered with the
aim of reducing stress levels caused
by the pandemic and improving
interactions between caregivers and
children. This year, a public space
with a childhood perspective was
enabled in each of the countries,
with an investment of more than
US$ 240,000. The objective of the
adaptation and rescue of this public
space is to contribute to the quality
of life of the inhabitants of Mexico,
Guatemala, Panama, Costa Rica,
and Nicaragua, benefiting more than
22,000 people directly and indirectly.

• Together with Movimiento de

Activación Ciudadana AC, Hello
Cities, Government of Monterrey,
Government of San Nicolás,
Government of Santa Catarina,
Campana-Altamira Initiative,
Fomento Plexippu, and The Home
Depot, we took steps to implement
several “Tactical Urbanism” initiatives
in support of early childhood in
Monterrey, Santa Catarina, and

San Nicolas, Nuevo León that are
benefiting more than 13,000 people.
Interventions included enhancing
community safety at street crossings
and using residual spaces to create
areas for community participation
and recreational modules.

With the intention of generating
systemic change, we are focused on
growing and stimulating a community
of multisectoral leaders in Latin
American cities with the tools they
need to promote public spaces for
early childhood. Together with the

C+LAB, an initiative of the Tecnológico

de Monterrey, we organized a
cycle of interactive dialogues,
produced an evidence-based guide
of recommendations on the optimal
design of public spaces for children and
families in the context of vulnerability,
and produced a catalog of ideas with
concrete examples of interventions in
public spaces with a focus on children.
Through these initiatives, we have
reached more than 2,000 people from
multiple countries, including the United
States, Canada, El Salvador, Guatemala,
Colombia, Peru, Brazil, Chile, Poland,
and Spain.

Annual Report 2021 FEMSANurturing Policies
To position early childhood on both
public and private sector agendas in
Latin America in a more visible way, we
promote the understanding, awareness,
and mobilization of both sectors through
policies that put children at the center of
society. For example:

• In Brazil, together with partners, we

launched the Early Childhood Guide for
Business as an interactive platform with
more than 600 actions and policies
for the private sector to incorporate
early childhood development
considerations into corporate strategies.
The initiative aims to promote the
role of companies as agents of early
childhood transformation, in alignment
with the private sector’s strategic focus
on diversity, equity, and inclusion.
As of year-end 2021, more than
112 companies had registered for
the Guide, and almost 4,000 people
participated in digital events that
we co-hosted with our partners
during the year.

• We continued to work closely with

the Consejo Coordinador Empresarial
(CCE or Business Coordinating

Council of Mexico) this year – the
highest representative body of
the private sector in the country –
to bring expanded private sector
awareness around early childhood
issues. In 2021, the Fundación FEMSA
founded and launched the CCE Early
Childhood Subcommittee, whose
membership now includes more
than 33 committed companies and
1,500 private leaders trained and
organizations that actively recognize
early childhood as a strategic pathway
for national competitiveness and
productivity in Mexico.

• In collaboration with La Tríada
– an alliance between Pontificia
Universidad Católica de Chile,
Tecnológico de Monterrey, and
Universidad de los Andes to achieve
a prosperous future for all Latin
Americans – we co-organized four
collaborative virtual forums between
September and December 2021 to
discuss the issue of early childhood
as a priority in combating inequality
and poverty in the region. Through
these online engagements, we
reached more than 72,000 people
from Mexico, Colombia, and Chile.

6 9

As of year-end 2021, more

than 112 companies had

registered for the Early

Childhood Guide for Business,

and almost 4,000 people

participated in digital events.

Annual Report 2021 FEMSA
Arts & Culture
A fourth area of focus for the Fundación
FEMSA is to engage communities and
catalyze social change through art,
including sponsoring unique sensory
experiences and thought-provoking
dialogues. Our Arts & Culture program
has three clear objectives:

• To strengthen the art ecosystem in

Latin America.

• To promote empathy, understanding,
and emotional recognition of the
experiences of others through art.

• To expand the enjoyment of art

without barriers, making it inclusive
and accessible.

Strengthening the Art Ecosystem
For more than 40 years, the FEMSA
Collection has sought to promote the
cultural and artistic appreciation of
modern and contemporary artistic
production in Latin America during the
twentieth and twenty-first centuries.
The Collection comprises 1,387 works
from 785 artists, which FEMSA shares
with diverse communities through
exhibitions, a loan program, and multiple
cultural activities.

Similarly, for nearly 30 years, the
FEMSA Biennial has served as a vehicle
to recognize, strengthen, stimulate,
and disseminate artistic talent and
visual creation across Mexico through
a traveling platform of educational
events and cultural exhibitions. The XIV
edition which ran from October 2020
to April 2021 in five locations in the
state of Michoacan, Mexico, reached
more than 3,800 people from Mexico,
Colombia, and the United States. Among
its activities are the educational, public,
and editorial program, as well as talks in
collaboration with strategic partners.

7 0

In October 2021, the Fundación FEMSA, Coca-Cola FEMSA
and OXXO sponsored the 49th edition of the International

Cervantino Festival, which will run through April 2022.

Two exhibitions from the FEMSA Collection were presented

in hybrid format to promote a dialogue on the identities of

artists across different generations.

Annual Report 2021 FEMSA7 1

Promoting Empathy through the
Experiences of Others
In 2021, Fundación FEMSA continued
to support and expand Puerto Abierto,
a series of community programs
aimed at using artistry and creativity
to build bridges of collaboration with
the families of migrants and refugees
living in Monterrey, Nuevo León,
Mexico. For example, on Nuevo León
Heritage Day in March 2021, the FEMSA
Collection presented the talk, Escribir
las Fronteras (Writing the Borders),
featuring migrant testimonies and
remarks from four experts on migratory
flow, each emphasizing in their own way
the intangible heritage shared by the
migrant community.

In another extension of the Puerto Abierto
initiative, in August 2021 Fundación
FEMSA launched the Caravana radiofónica
podcast on Spotify, Apple and Google
platforms to share the stories of migrant
families and children in their own voices.
Across seven episodes, testimonies of
personal experience promote greater
connections of community understanding,
awareness, and empathy.

The Art & Science of Migratory Geology

In November 2021, Fundación FEMSA and

DistritoTec opened Geologías Migratorias, a

project combining the art of migratory mobility

with the science of geological knowledge.

Presented in two spaces at the Tecnológico

de Monterrey through 2022, the installation

considers the notions of body, territory,

time, and movement as a bridge between

the human transitory experience and planet

Earth. Preparations and workshops with the

artist entailed carrying out expeditions to

the mountains of Nuevo León to explore the

soil and rocks from different geological eras

while questioning the existence of geopolitical

borders. Through these explorations, the

artist worked with migrants to help them

understand how geology can provide a sense

of connection and home in a new territory.

Learn more

Annual Report 2021 FEMSA7 2

With DistritoTec,
we presented the
open-air exhibition,
Los Otros
Lados, as a way
to bring the stories of
migrants to life.

Art Without Barriers: Expanding
Inclusivity & Accessibility
Finally, at the Fundación FEMSA, we
strongly believe in the power of art to
transform, triggering new emotions,
reflections, and mindsets capable of
spurring change. In early 2021, with
DistritoTec, we presented the open-air
exhibition, Los Otros Lados, as a way
to bring the stories of migrants to life. An
extension of the Puerto Abierto program,
the exhibition featured photographs and
quotes from the point of view of migrants,
conveying a message that contemporary
migration is a phenomenon without a
single origin or single destination.

Later in the year, Fundación FEMSA and
the FEMSA Collection again collaborated
with DistritoTec to present another
open-air, interactive exhibition, Caminamos
imaginando otros mundos. On display
from May through September 2021, the
project helped make visible the local
neighbors who coexist in the same space,
including migrants, reminding us that
there are more things that unite us than
separate us.

Annual Report 2021 FEMSA7 3

We recognize that the

individuals and structures

that execute on our

governance priorities have a

strong influence on the quality

of oversight and decisions

made for the generation of

economic and social value.

G O V E R N A N C E

At FEMSA, we understand that
robust governance is vital to ensure
the responsible management and
operation of our business, as well as
to achieve long-term value generation
by aligning and driving both economic
and social performance, while ensuring
accountability and building legitimacy
with all stakeholders.

We view governance – and the
importance of our ethics and values
– as the foundation of our strategic
sustainability framework, upon
which the pillars of Our People, Our
Community, and Our Planet, are built.
Our governance efforts are aligned with
four U.N. Sustainable Development
Goals and cover three priority topics:
Corporate Responsibility, Ethical &
Socially Responsible Behavior, and
Fiduciary Responsibility.

Our corporate practices comply with
the laws of all countries where we
operate. As a publicly listed company
in the Mexican Stock Exchange and
the New York Stock Exchange, we also

comply with all applicable standards,
rules, and regulations in Mexico and the
United States, including the Mexican
Securities Market Law and the U.S.
Sarbanes-Oxley Act, as applicable for
foreign issuers. Additionally, we observe
the recommendations of the Code
of Best Corporate Practices of
the Business Coordinating Council
(Consejo Coordinador Empresarial).

Corporate Responsibility
To advance our commitment to
Corporate Responsibility, we focus
on transparency in our disclosures,
ensuring that our shareholders have
the information they need to regularly
monitor and assess the Company’s
performance. Through annual financial
and non-financial reporting – including
adherence to leading sustainability
reporting frameworks (see 2021
Sustainability Report) and the expectations
of our membership in the United
Nations Global Compact – we utilize
multiple engagement mechanisms to
maintain open communication with
our stakeholders.

Annual Report 2021 FEMSA
We strive to incorporate sustainability
at every level, starting with the Board
of Directors, who are responsible for
directing corporate strategy and defining
and supervising the implementation
of the Company’s vision and values.
FEMSA’s sustainability team, headed by
the Chief Executive Officer of FEMSA
Negocios Estratégicos (who reports
directly to the CEO and is a member
of our Board of Directors), oversees
the integration of sustainability into
all of FEMSA’s business units through
specific policies and processes, and
supervises sustainability performance
and targets. The sustainability team is
responsible for formulating, developing,
implementing, and monitoring
sustainability policies, and reporting
the results thereunder.

Our boards, committees, and governing
bodies are periodically evaluated for
their performance and compliance with
corporate governance best practices in
terms of structure, diversity, experience,
and operation, among other criteria.
This includes transparently evaluating
the compensation structures of our
key executives.

During 2021, the Board of Directors
was composed of 18 directors, of which
78% were men and 22% were women,
assisted by one Secretary (non-member)
and one Alternate Secretary (non-member).
In accordance with our bylaws and the
Mexican Securities Law, at least 25% of
the members of our Board of Directors
are independent. Directors are appointed
for a term of one year and are eligible
for re-election after the completion of
their term in office. The By-Laws of the
Company provide that the holders of
the FEMSA B Shares may elect at least
eleven Directors and the holders of the
FEMSA D Shares may elect five Directors.

Ethical & Socially
Responsible Behavior
To advance ethical and socially responsible
behavior across our organization, we
focus on building a culture of ethics
and legality, expanding risk management
practices, and strengthening
sustainability management.

Our Code of Ethics (“the Code”) – which
is reviewed annually – forms the basis
of our corporate behavior and the
foundation of our policies, guidelines,

7 4

To advance ethical and
socially responsible
behavior across our
organization, we focus on
building a culture of ethics
and legality, expanding risk
management practices,
and strengthening
sustainability management.

Annual Report 2021 FEMSA
7 5

FEMSA Ethics Line

In accordance with the provisions set forth in our Code of Ethics and

other corporate policies, we maintain a grievance / whistleblower system

for employees and stakeholders to report complaints, concerns, make

suggestions, or seek advice. Topics shared may relate to potential Code of

Ethics violations, the law or other inappropriate conduct or risks related

to corruption, privacy, or human rights. Available 24 hours a day, every

day, an independent party manages our ethics line. This system offers our

stakeholders three confidential, anonymous communication channels:
phone, website, or e-mail. In 2021, 4,264 reports were received and
reviewed, of which 82% were resolved in the same calendar year. Among

other areas, the reports related to work environment, operations, and

financial information.

and procedures for responsible business
conduct. The Code establishes the
fundamental principles and standards
that guide our ethical behavior in relation
to our shareholders, customers, suppliers,
authorities, civil society organizations, the
environment, communities, and everyone
who interacts with FEMSA. It also indicates
the steps to follow for reporting any
breach, conduct, or practice that does not
comply with the Code and the rest of our
corporate guidelines. The Code, approved
by the Board of Directors, applies to
members of the Board and employees in
all the countries where we operate.

Similarly, FEMSA’s Supplier Guiding
Principles contains the minimum
expectations that we require of our
suppliers in the areas of human and labor
rights, sustainability, lawful culture, and
information security. It is the supplier’s
responsibility, in its relationship with
FEMSA, to adopt the necessary methods
and practices to comply with our Supplier
Guiding Principles.

To support risk management, we utilize
risk matrices and other tools and
processes to identify and manage
economic, environmental, and social
risks to which our businesses and
brands may be exposed. We have
also set up processes, forums, and
governing bodies dedicated to defining,
managing, and promoting the FEMSA
Sustainability Strategy.

In addition to our Code of Ethics,
we have a set of policies – including our
Human and Labor Rights Corporate Policy;
Sustainability Corporate Policy;
Environment Corporate Policy; Community

Commitment Corporate Policy; and
Anti-corruption Corporate Policy –
that comprise an essential part of
our corporate governance program.
These mandatory policies establish the
guidelines that all employees are expected
to follow as part of FEMSA’s culture of
respect, honesty, and integrity. To comply
with these policies, we have established
the required internal controls to prevent,
identify, investigate, sanction, and
remedy any risks of violation.

Annual Report 2021 FEMSA
7 6

Fiduciary Responsibility
As part of our responsibility to our
shareholders, we disclose the Company’s
financial and non-financial results on
a timely basis, in line with regulatory
requirements and expectations.
We also work with independent,
third-party assurance providers to audit
our financial results and verify our
sustainability results in accordance with
current standards.

We also focus on achieving sustainable
capital allocation by ensuring that our
investments are aligned with FEMSA’s
Sustainability Strategy and that they
take into consideration material
environmental, social, and governance
risks and opportunities.

Finally, in support of information and
data security, we have robust policies,
structures, tools, and management
processes in place to guarantee the
protection of the Company’s information.

Annual Report 2021 FEMSA
7 7

Board of Directors

Series B Directors
José Antonio Fernández Carbajal C
Executive Chairman of the Board of FEMSA
Director since 1984 and Executive
Chairman since 2014
Alternate: Federico Reyes García C, I

Javier Gerardo Astaburuaga Sanjines C
Independent consultant
Since 2017

Bárbara Garza Lagüera Gonda
Private investor and president of the
acquisitions committee of the FEMSA
Collection
Since 2002
Alternate: Paulina Garza Lagüera Gonda

Mariana Garza Lagüera Gonda
Private investor
Since 2005

José Fernando Calderón Rojas
Chief Executive Officer and chairman of the
Board of Directors of Franca Servicios, S.A. de
C.V., Servicios Administrativos de Monterrey,
S.A. de C.V., Regio Franca, S.A. de C.V., and
Franca Industrias, S.A. de C.V.
Since 1984
Alternate: Francisco José Calderón Rojas

Alfonso Garza Garza
Chief Executive Officer of
FEMSA Negocios Estratégicos
Since 2016
Alternate: Juan Carlos Garza

Bertha Paula Michel González
Professor at Universidad Nacional Autónoma
de México
Since 2020
Alternate: Maximino José Michel González

Alberto Baillères González †
Chairman of the Board of Directors of
Industria Peñoles S.A.B. de C.V., Grupo
Nacional Provincial, S.A.B., Fresnillo Plc,
Grupo Palacio de Hierro, S.A.B. de C.V., Grupo
Profuturo, S.A.B. de C.V. and subsidiaries,
Controladora Petrobal, S.A. de C.V., Energía
BAL, S.A. de C.V., Energía Eléctrica BAL, S.A. de
C.V., and Tane, S.A. de C.V.; chairman of the
governance board of Instituto Tecnológico
Autónomo de México and founding member
of Fundación Alberto Baillères, A.C.
Since 1989
Alternate: Alejandro Baillères Gual

Francisco Javier Fernández Carbajal C
Chief Executive Officer of Servicios
Administrativos Contry, S.A. de C.V.
Since 2005

Miguel Eduardo Padilla Silva
Chief Executive Officer of FEMSA until 2021

Since 2018

Eva María Garza Lagüera Gonda
Private investor
Since 1999
Alternate: José Antonio Fernández
Garza Lagüera

Ricardo Guajardo Touché B, C, I
Independent consultant
Since 1995

Luis Alberto Moreno Mejía
Managing Director at Allen & Co. LLC
Since 2021

Series D Directors
Víctor Alberto Tiburcio Celorio A, I
Independent consultant
Since 2018

Michael Larson C, I
Chief Investment Officer for William H. Gates III
Since 2011

Robert Edwin Denham B, C, I
Partner at Munger, Tolles & Olson LLP
Since 2001

Alfonso González Migoya A, I
Business consultant
Since 2017
Alternate: Enrique F. Senior Hernández C, I

Ricardo E. Saldívar Escajadillo B, C, I
Private investor
Since 2015
Alternate: Francisco Zambrano Rodríguez I

Secretaries
Carlos Eduardo Aldrete Ancira
Secretary of the Board of Directors
(Non-member)

Alejandro Gil Ortiz
Alternate Secretary of the Board of Directors
(Non-member)

Key: A Audit Committee / B Corporate Practices Committee / C Strategy and Finance Committee / I Independent Director

Annual Report 2021 FEMSA

7 8

Board Committees
The following committees support the Board of Directors by analyzing strategic issues critical to the success of the
business. They provide recommendations related to the focus areas shown below, including economic, social, and
environmental matters.

Audit Committee*

Responsible for:

Strategy and Finance Committee

Corporate Practices Committee*

Responsible for:

• Reviewing the accuracy and integrity of

• Evaluating the investment and financing

quarterly and annual financial statements
in accordance with accounting, internal
control, and auditing requirements, including
the submission of confidential, anonymous
complaints from employees regarding
questionable accounting or auditing matters;

policies of the Company;

• Analyzing the risk factors to which the
Company may be exposed, as well as
evaluating its management policies;

• The appointment, compensation, retention,

dividend policy;

and oversight of the independent auditor, who
reports directly to the Audit Committee; and

• Analyzing the Company’s business units and

• Making recommendations on the Company

• Preventing or reducing the risk of performing
operations that could damage the value of
the Company or that benefit a particular
group of shareholders;

• Approving policies related to the use of
Company assets or transactions with
related-party transactions; approving the
compensation of the Chief Executive Officer
and relevant officers; and

strategic alternatives for growth; and

• Supporting the Board of Directors in

• Identifying and following-up on contingencies

and legal proceedings.

• Making recommendations to the Board of
Directors on annual operation plans and
strategic projects for the business units.

the preparation of reports on
accounting practices.

As part of the actions to strengthen FEMSA’s corporate governance, on February 24, 2022, FEMSA announced an expansion to the functions of the board committees, resulting in (1) the renaming of the Corporate Practices Committee to
Corporate Practices and Nominations Committee and (2) the renaming of the Strategy and Finance Committee to Operation and Strategy Committee.

*All members of the Audit Committee and the Corporate Practices Committee are independent directors, as required by the Mexican Securities Law, applicable U.S. Securities Laws and applicable NYSE listing standards.

Annual Report 2021 FEMSA7 9

Executive team
Our executive team is focused on driving business growth by creating economic, social, and environmental value for all our stakeholders.
Each of our executive leaders has significant professional experience within the industries related to our business.

José Antonio Fernández Carbajal
Executive Chairman of the Board
of Directors of FEMSA
He began his career at FEMSA in 1988, serving in
various positions, including CEO of OXXO. He was
appointed CEO of FEMSA in 1995 and Chairman
of the Board in 2001, serving in both positions
until December 2013. He is also Chairman of the
Board of Coca-Cola FEMSA. In 2010, he joined the
Board of Directors of Heineken Holding N.V. and
was appointed Vice-Chairman of Heineken N.V.’s
Supervisory Board and in addition he chairs the
Sustainability and Responsibility Committee and is
also member of the Selection and Appointment
Committee. Since 2012, Mr. Fernández has
been Chairman of the Board of Tecnológico de
Monterrey, where he has served as Vice Chairman
since 1997. In 2017, he was elected as a full-
term member of MIT Corporation, where he
contributes the Student Life and Undergraduate
Education committees. Currently, he also
participates as a board member of Industrias
Peñoles and is member of the Board of Global
Advisors of the Council for Foreign Relations.
He holds a degree in Industrial Engineering
and Systems from Tecnológico de Monterrey,
where he earned an MBA in 1978 and has been a
professor for more than 20 years.

Daniel Alberto Rodríguez Cofré
Chief Executive Officer of FEMSA
He joined FEMSA in 2015 as Chief Financial and
Corporate Officer before being named the Chief
Executive Officer of FEMSA Comercio in 2016. He
was appointed to his current role as of January 1,
2022. Prior to joining the Company, he was CFO
and then CEO of CENCOSUD (Centros Comerciales
Sudamericanos S.A.), among other senior finance
and management positions in Latin America and
Europe. He holds a forest engineering degree
from Austral University of Chile and an MBA from
Adolfo Ibañez University.

Gerardo Estrada Attolini
Director of Administration and Corporate Control
of FEMSA
He joined FEMSA in 2000 and was appointed to
his current position in 2020. Previously, he served
as Chief Financial Officer of FEMSA Cerveza and
Corporate Finance Vice President of FEMSA. Prior
to FEMSA, he served in various executive level
positions in the finance functions of Mexican
companies in the financial and industrial sectors.
He holds an Accounting degree and an MBA
from Tecnológico de Monterrey.

Francisco Camacho Beltrán
Chief Corporate Officer of FEMSA
He joined FEMSA in 2020 after a long track record
in senior management positions in consumer
product companies around the world, including
Procter & Gamble and Revlon. In 2000, he joined
Danone as head of its Bonafont water operations
in Mexico. For the next 20 years, he held varying
responsibilities in the water and dairy segments,
while driving growth and innovation. In 2011,
he became a member of Danone’s Executive
Committee, leading the Global Customer Team
and serving as Corporate Chief Growth and
Innovation Officer. He was EVP and global head of
the Essential Dairy and Plant Based business and
responsible for Global Industrial Operations
and Supply Chain.

Alfonso Garza Garza
Chief Executive Officer of
FEMSA Negocios Estratégicos
He joined FEMSA in 1985 and held various
positions including CEO of FEMSA Empaques.
In 2009 he was appointed to his current position.
He is President of the Fondo Ambiental
Metropolitano de Monterrey, Vice Chairman
of the executive commission of the National
President of the Employers Confederation of
Mexico (Coparmex). He is a member of the Board
of Directors of FEMSA, Tecnológico de Monterrey,
Grupo Nutec, S.A. de C.V. He graduated
from Tecnológico de Monterrey in Industrial
Engineering and an MBA from IPADE
Business School.

Roberto Campa Cifrián
Director of Corporate Affairs of FEMSA
He joined FEMSA in 2019, after a long career in the
public, private, and social sectors. He has served
in the federal government of Mexico as Secretary
of Labor and Social Welfare, Undersecretary of
the Interior, and Head of the Federal Consumer
Protection Agency. He has also served as a
representative in the Mexico City Legislative
Assembly and as a federal congressional
representative. He holds a law degree from
Universidad Anáhuac, where he is also a professor
of macroeconomic theory and President of the
Federation of Student Societies.

Annual Report 2021 FEMSA

8 0

John Anthony Santa Maria Otazua
Chief Executive Officer of Coca-Cola FEMSA
He was appointed to his current position in
2014. He joined Coca-Cola FEMSA in 1995 and
has served in several senior management
positions since then, including COO of the
Company’s Mexico Division, and Strategic
Planning and Commercial Development Officer.
He earned a Bachelor’s degree and an MBA
with a major in Finance from Southern
Methodist University.

Raymundo Yutani Vela
Director of Human Resources
He was appointed Vice-President of Human
Resources at FEMSA in 2018. He joined FEMSA
Comercio in 1999 as Director of Human
Resources, a position he held until 2014. Between
2014 and 2018, he was Director of Human
Resources at Coca-Cola FEMSA. Before joining the
company, he was Director of Human Resources
North at Banca Serfín, today Santander. He is a
graduate of the Public Accountant career and
has a master’s degree in Business Administration
from the Regiomontana University. Additionally,
he completed the AD1 program at IPADE and is
certified as a Coach by Newfield Consulting.

Carlos Arenas Cadena
Chief Executive Officer, Proximity Division
He began his career at FEMSA in 1984 and joined
FEMSA Comercio in 2001 as Strategic Planning
Manager. In 2007, he was promoted to the head
of FEMSA Comercio’s Planning and Information
Technology Department, followed by the Supply
Chain Department for OXXO, and later the
Commercial Department of OXXO. In January
2016, he was appointed Director General of
OXXO Mexico and assumed his current role as
of January 1, 2022. Up until 2020, he participated
in the National Association of Self-Service and
Department Stores (ANTAD) in Mexico and
continues to be a member of the International
Council and the Latin American Council of the
Association For Convenience & Fuel Retailing
(NACS). He graduated with a degree in Computer
Science from the Universidad Autónoma de
Nuevo León.

Daniel Belaúnde Arnillas
Chief Executive Officer, Health Division
He assumed the role of Chief Executive Officer,
Health Division in 2022, following his role as CEO of
Socofar, S.A. since 2016. He brings to this role more
than 25 years of experience in global companies
across three different markets: retail banking,
retail-fashion, and the pharmaceutical industry.
Prior to FEMSA, he supervised business units in
multiple countries, including as general manager at
Ripley Perú (2012-2016); as operations manager
at Ripley Chile (2008-2012); and as commercial bank
manager at Banco Santander Chile (1996-2008).
He completed his studies in economics at the
Universidad del Pacífico in Lima, Peru.

Jose Antonio Fernández Garza-Lagüera
Chief Executive Officer, Digital Division
He is currently the head of FEMSA Digital,
overseeing FEMSA’s digital businesses, including
fintech. He began his career in FEMCO in 2018 as
Director of Strategic Planning for OXXO Mexico.
Before joining FEMCO, he was General Manager
of Coca-Cola FEMSA’s Central America division
from 2015 to 2018. Prior to that, he worked
as CEO of FEMSA’s plastics division, Plásticos
Técnicos Mexicanos, and manager of sales and
operations in México City at HEINEKEN México.
Prior to his work at HEINEKEN, he co-founded
and ran Vestige Capital, a search fund based in
Mexico seeking to acquire and operate small
and medium-sized companies in Mexico. While
at Vestige, he co-led the acquisition of BOMI
Group de México a third-party logistic provider
for the Mexican healthcare industry. He has
taught a class on entrepreneurship and was
the founding chairman of the board of the
Entrepreneurship Institute in Tecnológico de
Monterrey. He received his MBA from Stanford
University Graduate School of Business and his
Bachelor’s degree in Industrial Engineering from
Tecnológico de Monterrey.

Annual Report 2021 FEMSA
F I N A N C I A L S U M M A R Y

Amounts expressed in millions of Mexican pesos (Ps.) as of December 31.

8 1

Income Statement
Net sales

Total revenues

Cost of goods sold

Gross profit

Operating expenses
Income from operations1

Other non-operating expenses (income), net

Financing expenses, net

Income before income taxes and share of the profit of equity accounted investees

Income taxes

Share of the profit of equity accounted investees, net of taxes

Net income from continuing operations
Net income from discontinuing operations2

Consolidated net income

Controlling interest

Non-controlling Interest

Financial ratios (%)

Gross margin

Operating margin

Consolidated net income

Other information

Depreciation

Amortization and other non cash charges to income from operations

Operative Cash Flow (EBITDA)
Capital expenditures3

Ps.

2021

554,923

556,261

342,548

213,713

161,720

51,993

(2,667)

13,384

41,276

14,278

10,680

37,678

28,495

9,183

38.4%

9.3%

6.8%

25,294

5,135

82,422

24,055

2020

490,425

492,966

303,313

189,653

148,150

41,503

7,656

14,911

18,936

14,819

(361)

3,756

(1,930)

5,686

38.5%

8.4%

0.8%

25,006

5,464

71,973

20,893

2019

504,059

506,711

315,230

191,481

144,329

47,152

1,573

13,492

32,087

10,476

6,437

28,048

20,699

7,349

37.8%

9.3%

5.5%

23,344

4,944

75,440

25,579

20182

468,894

469,744

294,574

175,170

133,594

41,576

874

7,380

33,322

10,169

6,560

29,713

3,366

33,079

23,990

9,089

37.3%

8.9%

6.3%

14,698

4,184

60,458

24,266

2017

439,239

439,932

277,842

162,090

121,828

40,262

1,285

3,302

35,674

10,213

8,021

33,480

3,726

37,206

42,408

(5,202)

36.8%

9.2%

7.6%

13,799

4,104

58,165

23,486

1. Company’s key performance indicator.
2. The consolidated income statement of 2017 was revised for the discontinued operations of Coca-Cola FEMSA. See Note 4.2.1.
3. Includes investments in property, plant and equipment, as well as deferred charges and intangible assets.

Annual Report 2021 FEMSA

8 2

Balance Sheet
Assets

Current assets

Equity accounted investees
Property, plant and equipment, net1

Intangible assets,net

Right-of-use asset

Other assets, net

Total assets

Liabilities

Short-term bank loans and current portion of long-term bank loans and notes payable

Current portion of leases

Other current liabilities

Long-term bank loans and notes payable

Long-term lease liabilities

Employee benefits

Deferred tax liabilities

Other non-current liabilities

Total liabilites

Total equity

Controlling interest

Non-controlling interest

Financial ratios (%)

Liquidity

Leverage

Capitalization

Data per share

Controlling interest book value 2
Net controlling interest income3
Dividends paid4

Series B shares

Series D shares
Number of employees5
Number of outstanding shares6

Ps.

2021

230,718

107,299

115,147

158,138

56,994

69,204

737,500

4,640

7,306

124,777

185,945

55,049

7,600

6,042

11,024

402,383

335,117

262,601

72,516

1.783

1.201

0.37

14.678

1.593

2020

2019

2018

2017

Ps.

201,269

Ps.

172,579

Ps.

177,607

Ps.

98,270

113,106

155,501

54,747

61,955

684,848

8,801

6,772

102,840

179,864

51,536

7,253

6,033

14,562

377,661

307,187

237,743

69,444

1.803

1.229

0.39

13.288

(0.108)

97,470

114,513

146,562

52,684

53,733

637,541

16,204

7,387

112,943

101,747

47,292

6,347

6,946

12,924

311,790

325,751

251,989

73,762

1.336

0.957

0.28

14.085

1.157

94,315

108,602

145,610

50,247

576,381

13,674

87,790

114,990

4,699

5,886

13,800

240,839

335,542

257,053

78,489

1.750

0.718

0.29

14.368

1.341

181,188

96,097

116,712

154,093

40,451

588,541

13,590

91,432

117,758

5,373

6,133

17,343

251,629

336,912

250,291

86,621

1.725

0.747

0.29

13.990

2.370

0.383

0.479

320,808

17,891.13

0.517

0.646

320,618

17,891.13

0.483

0.604

314,656

17,891.13

0.460

0.575

297,073

17,891.13

0.431

0.538

295,027

17,891.13

1. Includes bottles and cases.
2. Controlling interest divided by the total number of shares outstanding at the end of each period.
3. Net controlling interest income divided by the total number of shares outstanding at the end of the each period.
4. Expressed in nominal pesos of each period.
5. Includes incremental employees resulting from mergers & acquisitions made during the period.
6. Total number of shares outstanding at the end of each period expressed in millions.

Annual Report 2021 FEMSA8 3

M A N A G E M E N T D I S C U S S I O N & A N A L Y S I S

Audited Financial Results for the twelve months ended December 31, 2021. Compared to the twelve months ended December 31, 2020.

Fomento Económico Mexicano, S.A.B.
de C.V. (“FEMSA”) is a Mexican holding
company. Set forth below is certain
audited financial information for FEMSA
and its subsidiaries (the “Company” or
“FEMSA Consolidated”) (NYSE: FMX; BMV:
FEMSA UBD, FEMSA BD). The principal
activities of the Company are grouped
mainly under the following subholding
companies (the “Subholding Companies”):
Coca-Cola FEMSA, S.A.B de C.V. (“Coca-Cola
FEMSA” or “KOF”), (NYSE: KOF, BMV:
KOFL) which engages in the production,
distribution and marketing of beverages,
and FEMSA Comercio, S.A. de C.V. (“FEMSA
Comercio”), including its Proximity Division
operating OXXO, a small-format store
chain, a Health Division, which includes
all drugstores and related operations,
and a Fuel Division, which operates
the OXXO GAS chain of retail service
stations. Additionally, through its Negocios
Estratégicos unit, it provides logistics, point-
of-sale refrigeration solutions and plastics
solutions to FEMSA’s business units and
third-party clients. FEMSA also participates
in the specialized distribution industry

in the United States. The consolidated
financial information included in this
annual report was prepared in accordance
with the International Financial Reporting
Standards (“IFRS”) as issued by the
International Accounting Standards
Board (“IASB”).

The 2021 and 2020 results are stated
in nominal Mexican pesos (“pesos” or
“Ps.”). Translations of pesos into US
dollars (“US$”) are included solely for
the convenience of the reader and are
determined using the noon buying
rate for pesos as published by the U.S.
Federal Reserve Board in its H.10 Weekly
Release of Foreign Exchange Rates
as of December 30, 2021, which was
20.5140 pesos per US dollar. This report
may contain certain forward-looking
statements concerning the Company’s
future performance that should be
considered good faith estimates made
by the Company. These forward-
looking statements reflect management
expectations and are based upon
currently available data.

Actual results are subject to future
events and uncertainties, which could
materially impact the Company’s
actual performance.

FEMSA Consolidated

2021 Amounts expressed in millions of Mexican pesos (Ps.)
as of December 31:

Total
Revenues

% Growth
vs’20

Gross
Profit

% Growth
vs’20

FEMSA Consolidated

556,261

12.8%

213,713

12.7%

Coca-Cola FEMSA

194,804

6.1%

88,598

7.0%

FEMSA Comercio
– Proximity Division

FEMSA Comercio
– Health Division

FEMSA Comercio
– Fuel Division

Logistics &
Distribution

198,586

9.5%

84,196

13.3%

73,027

12.1%

21,736

11.0%

39,922

16.4%

5,269

22.5%

48,412

–

10,569

–

Annual Report 2021 FEMSA

8 4

FEMSA’s consolidated total revenues
increased 12.8% to Ps. 556,261 million
in 2021 compared to Ps. 492,966 million in
2020. On an organic 1 basis, total revenues
grew 9.4%. Coca-Cola FEMSA’s total
revenues increased 6.1% to Ps. 194,804
million, driven by volume growth, pricing
initiatives, and favorable price-mix effects.
This increase was partially offset by
unfavorable currency translation effects
resulting from the depreciation of all of
Coca-Cola FEMSA’s operating currencies
in South America into Mexican Pesos, and
a decline in beer revenues related to the
partial transition of the beer portfolio of
Coca-Cola FEMSA in Brazil. In addition,
during the same period of 2020, KOF
recorded extraordinary income related to
an entitlement to reclaim tax payments
in Brazil. FEMSA Comercio – Proximity
Division revenues increased 9.5% to
Ps. 198,586 million, driven by an average
increase of 7.7% in same-store sales,
caused by a 10.2% increase in average
customer ticket, partially offset by a
2.2% decrease in store traffic. FEMSA
Comercio – Health Division revenues
increased 12.1% to Ps. 73,027 million,
driven by an average increase of 9.5%

in same-store sales, reflecting positive
trends in our Mexican, Chilean, and
Colombian operations, partially offset by
a still challenging economic environment
in Ecuador, in connection with the
COVID-19 pandemic. FEMSA Comercio
– Fuel Division revenues increased
16.4% to Ps. 39,922 million, driven by
an average increase of 12.9% in same-
station sales, reflecting a 12.0% increase
in the average price per liter, partially
offset by a 0.7% increase in average
volume. The Logistics and Distribution
total revenues reached Ps. 48,412
million, reflecting positive demand
dynamics in our operations in Latin
America, coupled with gradual recovery
trends in the United States.

Consolidated gross profit increased
12.7% to Ps. 213,713 million in 2021
compared to Ps. 189,653 million in 2020.
Gross margin decreased 10 basis points
to 38.4% of total revenues compared to
2020, reflecting gross margin expansion
at Coca-Cola FEMSA and FEMSA
Comercio’s Proximity Division, offset
by a contraction at FEMSA Comercio’s
Health and Fuel Divisions.

Consolidated operating expenses
increased 9.2% to Ps. 161,720 million
in 2021 compared to Ps. 148,150 million in
2020. As a percentage of total revenues,
consolidated operating expenses
decreased from 30.1% in 2020 to
29.1% in 2021.

Consolidated administrative expenses
increased 18.4% to Ps. 27,219 million
in 2021 compared to Ps. 22,988 million in
2020. As a percentage of total revenues,
consolidated administrative expenses
increased 20 basis points, from 4.7% in
2020 to 4.9% in 2021.

Consolidated selling expenses increased
8.6% to Ps. 134,079 million in 2021 as
compared to Ps. 123,405 million in 2020.
As a percentage of total revenues, selling
expenses decreased 90 basis points, from
25.0% in 2020 to 24.1% in 2021.

Consolidated income from operations
increased 25.3% to Ps. 51,993 million
in 2021 as compared to Ps. 41,503
million in 2020. As a percentage of total
revenues, operating margin increased 90
basis points, from 8.4% in 2020 to 9.3%

1. Excludes the effects of significant mergers and acquisitions in the last twelve months.

Annual Report 2021 FEMSA
8 5

in 2021, reflecting margin expansion at
Coca-Cola FEMSA and FEMSA Comercio’s
Proximity and Health Divisions, partially
offset by a contraction at FEMSA
Comercio’s Fuel Division.

Some of our subsidiaries pay
management fees to us in consideration
for corporate services we provide
to them. These fees are recorded
as administrative expenses in the
respective business segments. Our
subsidiaries’ payments of management
fees are eliminated in consolidation
and, therefore, have no effect on our
consolidated operating expenses.

Net financing expenses decreased to
Ps. 13,384 million from Ps. 14,911 million
in 2020, reflecting lower interest expense
and a foreign exchange gain related to the
effect of FEMSA’s US Dollar-denominated
cash position, as impacted by the
depreciation of the Mexican peso
during 2021.

Income before income taxes and share of
the profit in associate results increased
118.0% to Ps. 41,276 million in 2021
compared to Ps. 18,936 million in 2020,
reflecting an increase in our income from
operations, lower other non-operating
expenses and a decrease in net
financing expenses described above.

Our accounting provision for income
taxes in 2021 was Ps. 14,278 million, as
compared to Ps. 14,819 million in 2020,
resulting in an effective tax rate of 34.7%
in 2021 as compared to 76.7% in 2020,
which reflected an extraordinary tax
payment agreed with the Mexican tax
authority during the second quarter of
2020, magnified by decreased operating
income, in the comparable period.

Consolidated net income was
Ps. 37,678 million in 2021 compared
to Ps. 3,756 million in 2020, reflecting
i) higher income from operations across
our business units; ii) higher non-
operating income; and iii) an increase in
our participation in associates’ results,

which mainly reflects the results of our
investment in HEINEKEN, including an
exceptional gain recorded by HEINEKEN
during the 3Q21, reflecting a fair value
adjustment from one of their investments.

Controlling interest income amounted to
Ps. 28,495 million in 2021 compared to a
loss of Ps. 1,930 million in 2020. Controlling
interest income in 2021 per FEMSA Unit2
was Ps. 7.96 (US$ 3.88 per ADS).

Coca-Cola FEMSA

Coca-Cola FEMSA total revenues
increased 6.1% to Ps. 194,804 million in
2021 compared to Ps. 183,615 million
in 2020. Total revenues were driven
by volume growth, pricing initiatives,
and favorable price-mix effects,
partially offset by unfavorable currency
translation effects resulting from the
depreciation of Coca-Cola FEMSA’s
operating currencies in South America
into Mexican Pesos, and a decline in

2. FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B Share, two Series D-B Shares and two Series D-L Shares.

Each FEMSA B Unit is comprised of five Series B Shares. The number of FEMSA Units outstanding as of December 31, 2021 was 3,578,226,270, equivalent to the total number
of FEMSA Shares outstanding as of the same date, divided by 5.

Annual Report 2021 FEMSA
8 6

beer revenues related to the partial
transition of Coca-Cola FEMSA´s beer
portfolio in Brazil. In addition, during
the same period of 2020, Coca-Cola
FEMSA recorded extraordinary other
operating income related to an
entitlement to reclaim tax payments
in Brazil.

Coca-Cola FEMSA gross profit increased
7.0% to Ps. 88,598 million in 2021,
compared to Ps. 82,811 million in 2020,
with a gross margin expansion of 40
basis points. Favorable price-mix effects,
raw material hedging strategies, and the
positive effect of the resumption of tax
credits on concentrate purchased from
the Manaus Free Trade Zone in Brazil
were partially offset by: i) higher raw
material prices; ii) higher concentrate
costs in Mexico; iii) and the depreciation
in the average exchange rate of most
of their operating currencies as applied
to our U.S. dollar-denominated raw
material costs. Gross margin reached
45.5% in 2021.

The components of cost of goods
sold include raw materials (principally
concentrate, sweeteners and packaging
materials), depreciation costs attributable
to Coca-Cola FEMSA’s production facilities,
wages and other employment costs
associated with labor force employed
at our production facilities and certain
overhead costs. Concentrate prices are
determined as a percentage of the retail
price of our products in the local currency,
net of applicable taxes. Packaging
materials, mainly PET and aluminum,
and HFCS, used as a sweetener in some
countries, are denominated in U.S. dollars.

Operating expenses increased 7.6% to
Ps. 60,720 million in 2021 compared
to Ps. 56,444 million in 2020.

Administrative expenses increased 14.2%
to Ps. 9,012 million in 2021 compared to
Ps. 7,891 million in 2020. Selling expenses
increased 6.5% to Ps. 51,708 million in 2021
compared with Ps. 48,553 million in 2020.

Income from operations increased 8.6%
to Ps. 27,402 million in 2021 compared to
Ps. 25,243 million in 2020.

FEMSA Comercio
Proximity Division

FEMSA Comercio – Proximity Division total
revenues increased 9.5% to Ps. 198,586
million in 2021 compared to Ps. 181,277
million in 2020, reflecting an average
increase in same-store sales of 7.7% and
the addition of 865 net new stores during
the year. As of December 31, 2021, there
was a total of 20,431 OXXO stores. As
referenced above, OXXO same-store sales
increased an average of 7.7% compared
to 2020, driven by a 10.2% increase in
average customer ticket, partially offset
by a 2.2% decrease in store traffic.

Cost of goods sold increased 6.9% to
Ps. 114,390 million in 2021 compared
to Ps. 106,981 million in 2020. Gross
margin increased 140 basis points to reach
42.4% of total revenues. This increase
reflects more dynamic commercial income
activity and promotional programs with
our key supplier partners, as well as the
sustained growth of the services category,
including income from financial services.

Annual Report 2021 FEMSA8 7

As a result, gross profit increased 13.3%
to Ps. 84,196 million in 2021 compared
with 2020.

Operating expenses increased 5.7% to
Ps. 65,809 million in 2021 compared
to Ps. 62,276 million in 2020. The increase
in operating expenses was driven by our
continuing initiative to strengthen our
compensation structure of key in-store
personnel, including the gradual shift
from commission-based store teams to
employee-based teams; partially offset by
increased efficiency across our operations.

Administrative expenses increased 7.9%
to Ps. 6,145 million in 2021 compared to
Ps. 5,696 million in 2020; as a percentage
of sales, it remained stable at 3.1% in 2021.

Selling expenses increased 6.3% to
Ps. 59,542 million in 2021 compared with
Ps. 56,030 million in 2020; as a percentage
of sales, they reached 29.9% in 2021.

points to reach 9.3% as a percentage of
total revenues for the year, compared with
6.6% in 2020, mainly reflecting a recovering
operating leverage, which was affected by
the COVID-19 pandemic during 2020.

FEMSA Comercio
Health Division

FEMSA Comercio – Health Division
total revenues increased 12.1% to
Ps. 73,027 million in 2021 compared to
Ps. 65,172 million in 2020, mainly driven
by an average increase of 9.5% in same-
store sales, reflecting positive trends in
our Mexican, Chilean, and Colombian
operations, partially offset by a still
challenging economic environment
in Ecuador, in connection with the
COVID-19 pandemic. As of December 31,
2021, the Health Division had a total of
3,652 drugstores across its geographies.

Income from operations increased 53.0%
to Ps. 18,387 million in 2021 compared to
Ps. 12,020 million in 2020, resulting in an
operating margin expansion of 270 basis

Cost of goods sold increased 12.5% to
Ps. 51,291 million in 2021, compared
with Ps. 45,597 million in 2020.

Gross margin decreased 20 basis points
to reach 29.8% of total revenues. This was
mainly driven by: i) higher institutional sales
in our operations in Chile and Colombia;
and ii) increased promotional activities in
our operations in South America. These
were offset by improved efficiency and
more effective collaboration and execution
with key supplier partners in Mexico. Gross
profit increased 11.0% to Ps. 21,736 million
in 2021 compared with 2020.

Operating expenses increased 6.2% to
Ps. 17,974 million in 2021 compared with
Ps. 16,919 million in 2020. This increase
was driven by the organic growth in
Mexico and South America, partially offset
by cost efficiencies and tight expense
control throughout our territories.

Administrative expenses decreased 1.8%
to Ps. 3,255 million in 2021 compared
with Ps. 3,314 million in 2020; as a
percentage of sales, they reached 4.5% in
2021. Selling expenses increased 8.0% to
Ps. 14,620 million in 2021 compared
with Ps. 13,540 million in 2020; as a
percentage of sales, they reached
20.0% in 2021.

Annual Report 2021 FEMSA
8 8

Income from operations increased 41.6%
to Ps. 3,762 million in 2021 compared
with Ps. 2,656 million in 2020, resulting
in an operating margin expansion of
110 basis points to 5.2% as a percentage
of total revenues for the year, compared
with 4.1% in 2020, reflecting higher
operating leverage.

FEMSA Comercio
Fuel Division

FEMSA Comercio – Fuel Division total
revenues increased 16.4% to Ps. 39,922
million in 2021 compared to Ps. 34,292 in
2020, reflecting a 12.9% average increase
in same-station sales. As of December 31,
2021, there was a total of 567 OXXO GAS
service stations. As referenced above,
same-station sales increased an average
of 12.9% compared to 2020, reflecting a
12.0% increase in the average price per
liter, partially offset by a 0.7% increase in
average volume.

Cost of goods sold increased 15.5% to
Ps. 34,653 million in 2021 compared with
Ps. 29,992 million in 2020. Gross margin

increased 70 basis points to reach 13.2%
of total revenues. Gross profit increased
22.5% to Ps. 5,269 million in 2021
compared with 2020.

Operating expenses increased 10.5% to
Ps. 3,853 million in 2021 compared with
Ps. 3,487 million in 2020. This increase
was driven by OXXO Gas’ organic growth
partially offset by tight expense control
and increased expense efficiencies.

Administrative expenses increased
15.1% to Ps. 290 million in 2021
compared with Ps. 252 million in
2020; as a percentage of sales, both
comparable years remain the same with
0.7%. Selling expenses increased 10.7%
to Ps. 3,571 million in 2021 compared
with Ps. 3,226 million in 2020; as a
percentage of sales, they decreased
40 basis points to 9.0% in 2021.

Income from operations increased to
Ps. 1,416 million in 2021 compared with
Ps. 813 million in 2020, resulting in an
operating margin expansion of 110 basis
points to 3.5% as a percentage of total
revenues for the year compared with
2.4% in 2020.

Logistics and Distribution

Logistics and Distribution total revenues
amounted to Ps. 48,412 million, reflecting
positive demand dynamics in our
operations in Latin America, coupled
with gradual recovery trends in the
United States. These were partially offset
by the negative currency translation
effect from the depreciation of the
Brazilian Real relative to the Mexican peso.

Cost of goods sold amounted to
Ps. 37,843 million, reflecting favorable
sales mix and efficiencies in our Latin
American operations. Gross profit
amounted to Ps. 10,569, representing
21.8% of total sales.

Operating expenses amounted to
Ps. 8,438 million in 2021. Administrative
expenses amounted to Ps. 4,533 million
in 2021; as a percentage of sales, the
accounted for 9.4%. Selling expenses
amounted to Ps. 4,060 million in 2021; as
a percentage of sales, they accounted for
8.3% in 2021.

Annual Report 2021 FEMSA8 9

Income from operations amounted to
Ps. 2,132 million, representing 4.4% of
total sales, reflecting operating leverage
driven by tight expense control and
efficiencies across markets.

Key Events during 2021

The following text reproduce our press
releases as they were published.

Coca-Cola FEMSA included in the S&P
Global Sustainability Yearbook 2021
On February 19, 2021 Coca-Cola
FEMSA announced that it became the
only Mexico-based beverage company
to be included in the S&P Global
Sustainability Yearbook 2021, due to
its high performance in the S&P
Global Corporate Sustainability
Assessment (CSA).

The Company is ranked within the top
15% of leading beverage companies
in sustainability under S&P Global’s
proprietary annual evaluation of the
environmental, social, economic, and
corporate governance dimensions of
more than 7,000 companies around
the world.

As result of Coca-Cola FEMSA’s
sustainability performance in alignment
with its strategic framework, the Company
is part of the Dow Jones Sustainability
Index for Emerging Markets, being the
only Latin American beverage company
included for eight consecutive years.
Additionally, in 2020, it became the first
Mexican company and third in Latin
America, to secure official approval from
the Science Based Targets initiative (SBTi)
of its 2030 carbon emissions reduction
goals, confirming the Company’s
commitment to meet the target set by the
Paris Agreement to limit the rise in global
temperatures to well below 2 °C above
preindustrial levels.

Over the last five years, Coca-Cola
FEMSA has increased the use of clean
energy in its operations by more than
four times, supplying 80% of its bottling
plants’ electricity needs with clean
sources of energy.

Considering the relevance of water as
a valuable resource, the Company has
increased its water use efficiency by 24%
over the last 10 years and it conducts,
along with The Coca-Cola Company,
water conservation initiatives that have

succeeded in replenish to nature the
same amount of water than the used in
its beverages across the markets where it
has presence.

Consistent with its path towards
sustainability and the challenges ahead,
in September 2020 the Company issued
its first green bond for US$ 705 million,
currently the largest green bond for a
Latin American corporation and the first
of its kind for the Coca-Cola System.

Additionally, Coca-Cola FEMSA has
received other noteworthy recognitions
for its sustainability performance in
recent years, including its listing in the
FTSE4Good Emerging Index, the S&P/
BMV Total Mexico ESG Index, and the
Bloomberg Gender-Equality Index.

The Coca-Cola Company,
The Coca-Cola System in Brazil, and
HEINEKEN announce redesigned
distribution partnership
On February 24, 2021 Coca-Cola FEMSA
announced that The Coca-Cola Company,
the Coca-Cola System in Brazil and
HEINEKEN had reached an agreement
(the “Agreement”) to redesign their
longstanding distribution partnership

Annual Report 2021 FEMSA9 0

in Brazil. The Agreement marks a new
milestone in the relationship among the
companies; it re-aligns the interests of all
parties for the future and builds on a solid
historical foundation.

HEINEKEN’s portfolio and HEINEKEN will
be able to explore further opportunities in
the non-alcoholic segment. This will allow
Brazilian consumers to benefit from a
wider array of options.

As per the Agreement, expected to
become effective mid-2021, the parties
will begin a smooth transition of the
Heineken and Amstel brands to HEINEKEN
Brazil’s distribution network. The
Coca-Cola System in Brazil will continue
to offer Kaiser, Bavaria and Sol, and will
complement this portfolio with premium
brand Eisenbahn and other international
brands. The Agreement allows the
parties to better serve consumers and
customers in the Brazilian market with
a solid portfolio, building on the positive
momentum developed over many years
of successful collaboration.

Additionally, as part of the redesign of the
distribution partnership, the parties will
have more flexibility. Subject to certain
mutually-agreed upon terms established
in the Agreement, the Coca-Cola System
in Brazil will be able to produce and
distribute alcoholic beverages and
other beers in a certain proportion to

FEMSA Announces Successful
Sustainability Linked Bond Issuances
in the Euro Market
On April 28, 2021 FEMSA announced
the placement of Euro-denominated
sustainability linked notes in the
international capital markets. FEMSA
successfully issued EUR €700 million in
senior notes due in 2028 bearing interest
at an annual rate of 70 basis points over
the relevant benchmark for a yield of
0.551%, and EUR €500 million in senior
notes due in 2033 bearing interest at an
annual rate of 88 basis points over the
relevant benchmark for a yield of 1.068%
(the “Notes”). This issuance represents the
largest ever sustainability linked bond by
a Latin American issuer, and it was backed
by 196 international institutional investors
and was oversubscribed 1.9x times.

In connection with the Notes, FEMSA
adopted and published its Sustainability
Linked Bond Framework, which was

prepared in accordance with the
Sustainability-Linked Bond Principles
(“SLBP”) 2020, as administered by the
International Capital Market Association.
The Sustainability Linked Bond Framework
includes certain Sustainability Performance
Targets of the Company, which are aligned
with its overall sustainability strategy
priorities for 2030. Per the terms of the
Notes, the satisfaction of the Sustainability
Performance Targets will be verified by
an accredited external party, and in the
event that such targets are not satisfied
by certain dates, there will be an interest
rate step up of 25 basis points. In addition,
the Company obtained a Second-Party
Opinion from Sustainalytics in accordance
with industry best practices.

This issuance received credit ratings of
A- from Standard & Poor’s and A from
Fitch Ratings.

The proceeds from this issuance were
used to redeem FEMSA’s EUR €1 billion
1.75% Euro-denominated Senior Notes
due 2023, pursuant to the terms of the
indenture under which such existing
Notes were issued, and the remainder
was used for general corporate purposes.

Annual Report 2021 FEMSA9 1

Coca-Cola FEMSA and Coca-Cola
Andina confirm acquisition of Brazilian
beer brand Therezópolis
On August 11, 2021 Coca-Cola FEMSA
confirmed that in conjunction with
Coca-Cola Andina, had reached an
agreement to acquire Brazilian craft beer
brand “Therezópolis”. This agreement
is part of the long-term strategy to
complement its beer portfolio in Brazil.

FEMSA expands its distribution
footprint in the East Coast of
the United States
On August 31, 2021 FEMSA announced
that Envoy Solutions, FEMSA’s specialized
distribution subsidiary in the United
States, reached an agreement to acquire
Daycon Products Co. (“Daycon”), an
independent specialized distribution
company based in Upper Marlboro,
Maryland. Daycon will further expand
and strengthen FEMSA’s distribution
footprint along the East Coast of the
United States, including Washington
D.C. and the states of Virginia, West
Virginia, Maryland, Delaware, New Jersey
and Pennsylvania. This transaction
represents another important step in

FEMSA’s strategic path to build a leading
national distribution platform in the
United States. Revenues of the acquired
business for the last twelve months as
of June 2021, were approximately
US$ 75 million.

FEMSA’s Envoy Solutions to acquire
Penn Jersey Paper Co., further
expanding its footprint in the Mid-
Atlantic region of the United States
On September 8, 2021 FEMSA announced
that Envoy Solutions, FEMSA’s specialized
distribution subsidiary in the United
States, reached an agreement to
acquire Penn Jersey Paper Co. (“PJP”),
an independent specialized distribution
company based in Philadelphia,
Pennsylvania. PJP fits well with FEMSA’s
distribution footprint along the East Coast,
expanding its coverage to include the
Philadelphia metro area and New York
City. This transaction represents another
important step in FEMSA’s strategic path
to build a leading national distribution
platform in the United States. Revenues
of the acquired business for the last
twelve months as of June 2021, were
over US$ 200 million.

Coca-Cola FEMSA and the
Coca-Cola System announce
distribution agreement with Estrella
Galicia in Brazil
On September 16, 2021 Coca-Cola FEMSA
announced that its subsidiary Spal
Indústria Brasileira de Bebidas S.A. and
the Coca-Cola System in Brazil have 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.

Coca-Cola FEMSA announces successful
pricing of the first sustainability-linked
bonds in the Mexican market
On September 21, 2021 Coca-Cola
FEMSA announced the successful
pricing of the first sustainability-linked
bonds in the Mexican market for a total
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. Both pricings

Annual Report 2021 FEMSA
9 2

received a credit rating of HR AAA by HR
Ratings de México, S.A. de C.V. and Aaa.
mx by Moody’s de México, S.A. de C.V.

The net proceeds from these pricings will
be used for debt refinancing.

In a sustainability-linked bond, the
issuing company commits to achieve
certain targets related to its sustainable
initiatives, however unlike a green bond,
the net proceeds are not limited to
finance these objectives.

With this sustainable financing strategy,
Coca-Cola FEMSA aims to address one
of the most important issues where it
considers that it can generate the most
positive environmental impact: the
efficient and sustainable use of water.
The sustainability-linked bonds will
allow Coca-Cola FEMSA to complement
the financing alternatives with high
environmental standards, enhancing
the investments previously committed
in the Company’s green bond issued in
international markets.

As part of its strategy, the Company
currently achieved a water use ratio
of 1.49 liters of water used per liter
of beverage produced, and as part of
these bonds, the Company commits
to achieve a water use ratio of 1.36
by 2024 and 1.26 by 2026. The bonds
are subject to the achievement of
these sustainability key performance
indicators, which will be verified by
an independent third party, and 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.

FEMSA Announces Senior
Leadership Succession Plan
On October 15, 2021 FEMSA announced
that in accordance with its senior
leadership succession planning
process, and consistent with previously
established timeframes, Eduardo Padilla
will retire from his position as FEMSA’s
Chief Executive Officer on January 1,
2022. Accordingly, FEMSA’s Board of
Directors appointed Daniel Rodríguez
Cofré, CEO of FEMSA Comercio, to
become FEMSA’s Chief Executive Officer
as of January 1, 2022.

FEMSA’s Envoy Solutions to acquire
Next-Gen Supply Group, further
expanding its footprint in the
Northeast region of the United States
On November 16, 2021 FEMSA
announced that Envoy Solutions, FEMSA’s
specialized distribution subsidiary in the
United States, reached an agreement
to acquire Next-Gen Supply Group
Inc., (“Next-Gen”), an independent
specialized distribution company based
in Mansfield, Massachusetts. Next-Gen
will expand Envoy’s footprint in the
Northeast by including Massachusetts
and Connecticut. This transaction
represents another important step in
FEMSA’s strategic path to build a leading
national distribution platform in the
United States. Revenues of the acquired
business for the last twelve months as of
October 2021, were over US$ 90 million.

FEMSA’s Envoy Solutions reaches
agreement to acquire Johnston
Paper, expanding its footprint in the
Northeast region of the United States
On November 18, 2021 FEMSA announced
that Envoy Solutions, FEMSA’s specialized
distribution subsidiary in the United
States, reached an agreement to acquire

Annual Report 2021 FEMSA9 3

On an estimated proforma 2021, CVI’s
volume is of approximately 30.9 million
unit cases, not including beer.

CVI operates one bottling facility and
three distribution centers in the state
of Rio Grande do Sul, serving more than
13,000 points of sale and more than 2.8
million consumers. Its footprint borders
Coca-Cola FEMSA’s operations in the
south of Brazil and Uruguay, bolstering
Coca-Cola FEMSA’s leadership position in
the region and allowing Coca-Cola FEMSA’s
volume to reach 52% of the Coca-Cola
System’s volume in Brazil.

Johnston Paper Company, Inc., (“Johnston
Paper”), an independent specialized
distribution company based in Auburn,
New York. Johnston Paper will enhance
Envoy Solutions’ existing footprint in the
Northeast by increasing its reach into the
Upstate New York area. This transaction
represents another important step in
FEMSA’s strategic path to build a leading
national distribution platform in the
United States. Revenues of the acquired
business for the last twelve months as of
October 2021, were over US$ 90 million.

Coca-Cola FEMSA reaches an
agreement to acquire CVI
Refrigerantes in Brazil
On December 17, 2021 Coca-Cola FEMSA
announced that its Brazilian subsidiary
Spal Industria Brasileira de Bebidas
S.A. (“Spal”) has reached an agreement
to acquire 100% of Brazilian Coca-Cola
bottler, CVI Refrigerantes Ltda. (“CVI”).
The parties agreed to an all-cash
transaction for an enterprise value
of R$ 632.5 million.

Annual Report 2021 FEMSA9 4

C O N T A C T

FEMSA Corporate Offices

Monterrey
General Anaya Nº 601 Pte.
Col. Bella Vista
Monterrey, Nuevo León, Mexico
C.P. 64410

Mexico City
Lago Alberto 442
Col. Anáhuac I Sección
Miguel Hidalgo
Mexico City, Mexico
C.P. 11320

Fundación FEMSA
General Anaya Nº 601 Pte.
Col. Bella Vista
Monterrey, Nuevo León, Mexico
C.P. 64410

Depositary Bank and Registar

BNY Mellon Shareowner Services
P.O. Box 505000 Louisville, KY 40233-5000
Direct Mailing for overnight packages:
BNY Mellon Shareowner Services
462 South 4th Street
Suite 1600 Louisville, KY 40202

Toll free number for U.S. calls: +1 888 269 2377
International calls: +1 201 680 6825
www.mybnymdr.com
shrrelations@cpushareownerservices.com

General Counsel
Alejandro Gil Ortiz
General Anaya Nº 601 Pte.
Col. Bella Vista
Monterrey, Nuevo León, Mexico C.P. 64410

Investor Relations
Juan Fonseca Serratos
Enrique Manero Martínez
investor@femsa.com

Corporate Communications
Mauricio Reyes López
Erika de la Peña Ibarra
comunicacion@femsa.com

Sustainability
Víctor Manuel Treviño Vargas
Gabriel Adrián González Ayala
sostenibilidad@femsa.com

Independet Accountant
Mancera, S.C.
Integrante de Ernst & Young Global Limited
Av. Ricardo Margain Zozaya 335, Floor 14
Col. Valle del Campestre,
San Pedro Garza García,
Nuevo León, Mexico, C.P. 66265

Annual Report 2021 FEMSA9 5

Stock Markets and Symbols

Fomento Económico Mexicano, S.A.B. de C.V. stock trades on the Bolsa Mexicana
de Valores (BMV) in the form of units under the symbols FEMSA UBD and FEMSA UB.

The FEMSA UBD units also trade on The New York Stock Exchange, Inc. (NYSE) in the

form of ADRs under the symbol FMX.

We are members of the Dow Jones Sustainability MILA Pacific Alliance Index, the

FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainable IPC, among

other indices that evaluate our performance in sustainability.

For more extensive information, including the Audited Financial Statements,

please visit us at:

www.femsa.com

https://femsa.gcs-web.com/

investor@femsa.com.mx

General Anaya Nº 601 Pte. Col. Bella Vista

Monterrey, Nuevo León, Mexico,

C.P. 64410

The FEMSA 2021 Annual Report may contain certain forward-looking statements concerning FEMSA

and its subsidiaries’ future performance and should be considered as good faith estimates of

FEMSA and its subsidiaries. These forward-looking statements reflect management’s expectations and

are based upon currently available data. Actual results are subject to further events and uncertainties

which could materially impact the Company’s subsidiaries’ actual performance.

Annual Report 2021 FEMSAwww.annualreport.femsa.com