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C&C Groupby your side, always 2022 integrated annual report 2 femsa integrated annual report 2022 contents 3 By Your Side, Always 4 How We Create Value 8 Dear Shareholders 15 Company Overview & 2022 Results 32 Our Sustainability Strategy 40 Our People 48 Our Community 58 Our Planet 67 FEMSA Foundation 74 Governance 86 Financial Summary 89 Management Discussion & Analysis 97 Appendix 97 About this Report 98 Stakeholder Engagement 99 Key Memberships & Associations 100 Key ESG Data 113 GRI Content Index 131 TCFD Index 134 Sustainability-Linked Bond Framework 139 ESG Independent Limited Assurance Report 143 SASB Index 147 UN Sustainable Development Goals 148 Contact 3 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 by your side, always THIS MEANS: The world around us is changing: new technologies allow us to stay permanently connected to the world, while opening up the possibility to improve our efficiency in areas such as energy, water and waste. The world is going through great transformations in response to the macroeconomic environment, geopolitical changes and the fluctuations of global markets – propelled by urgent sustainable development issues, from climate change and nature loss to inequality and social justice. In response, global citizens and consumers are changing their patterns, preferences and priorities, becoming more aware of their health and environment, while demanding the equitable treatment and human rights they deserve. They are becom- ing more informed, digitized and connected while acting with greater purpose and passion. At FEMSA, we have transformed ourselves to ensure that we are agents of positive change in our communities. We have reinforced our purpose, placing our customers and consumers at the center of everything we do. Our inspiration has always been, and will continue to be, the people we serve and the many stakeholders we are proud to stand beside. By your side, always. As a testament to the transparency and open communication channels we strive to maintain with all our stakeholders, we are pleased to share with you a summary of our progress and ongoing transformations in this 2022 Annual Report. There is always a FEMSA product or service close to you, wherever you are... The initiatives and actions of our more than 354,000 employees always aim toward sustainable growth and the creation of economic and social value... +130 years of history reflects the strength of our foundation and represents a springboard to our shared future. By your side, always: watch video 4 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 how we create value 1. Mission and Vision Our Mission Our Vision To generate economic and social value through companies and institutions. We generate economic value through designing, building and scaling mass business models, which enable us to meet our customers’ daily needs in a distinguished and efficient manner. We generate social value contributing to the improvement of the communities we serve through our actions, the comprehensive development of our employees, and with value propositions that generate wellbeing. Our focus towards accomplish our mission can only be compared with our passion to achieve our strategic goals: Be the best owner, partner and operator of our businesses in the long term. Aspire to double the value of our business every 5 years. Be leaders in the markets where we operate. Be the best employer and neighbor to the communities in which we operate. Our Mission and Vision lead our path and set the guidelines for planning strategies and projects aimed for success in attracting and satisfying consumer demand, consistently generating economic value and greater social development for our stakeholders. 5 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 2. Capital Inputs Stocks of value that are increased, decreased or transformed through FEMSA’s activities and outputs. Financial Manufactured Intellectual Human: Our People Social & Relationship: Our Community Natural: Our Planet We utilize capital from equity and debt markets, as well as cash flows derived principally from our businesses, to produce goods and provide services to the market. We rely on our physical infrastructure, including owned and leased properties, tools, technology, machinery and equipment, to produce goods and provide services to the market. With a focus on innovation and digitalization, we leverage our intellectual property and multi-format expertise to continually strengthen our customer-centric ecosystem. We develop the competencies and experience of our diverse team members around the world, empowering them to lead, manage and collaborate for our collective success. Our social license to operate depends on a foundation of trust with stakeholders and business partners (e.g., clients/ consumers, suppliers, investors, NGOs, communities, regulatory authorities). We use renewable and non-renewable resources for products and packaging, including raw materials and agricultural commodities. 6 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 3. Business Model We are a focused leader in Retail and Beverages, leveraged and connected by a Digital customer-centric ecosystem to maximize value creation. Everything we do across our three core business platforms is motivated and inspired by our commitment to Our People, Our Community and Our Planet, underscored by strong Governance practices. Excellent long-term growth opportunities, comprised of FEMSA Proximity (Americas and Europe), Fuel and Health Retail Leveraging our leading competitive position and excellent execution, combined with financial strength and strategic opportunities Coca-Cola FEMSA Building value-added financial and digital ecosystem while enabling and leveraging the strategic assets of FEMSA’s core business verticals Digital@ FEMSA Our People Our People’s wellbeing, decent work and professional growth s t n e m t i m m o c r u O Our Community Development and wellbeing within the communities where we operate Our Planet Harmony with the environment and sustainable use of natural resources Governance The use of corporate governance best practices 7 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 4. Examples of Capital Outputs & Value Created Financial Manufactured Intellectual Human: Our People Social & Relationship: Our Community Natural: Our Planet US$ 34.5 Bn Total revenues US$ 3.0 Bn Income from Operations1 US$ 4.8 Bn EBITDA2 Capital expenditures to expand and strengthen infrastructure, improve leased properties, invest in information technology and open/refurbish new stores 56 bottling plants and 3.8 Bn unit cases sold by Coca-Cola FEMSA 12.9 M OXXO PREMIA active users and +7 M users in FEMSA Health loyalty programs Digital sales representing ~11% of Coca-Cola FEMSA’s sales +800,000 active B2B digital users of Juntos+ Coca-Cola FEMSA 27% of women in executive positions +690 Community Wellbeing initiatives 6,700 senior or disabled people employed +3.7 M beneficiaries of community programs 87% score on FEMSA’s Organizational Climate Diagnostic 3.9 M Spin by OXXO active users in Mexico, enabling financial inclusion 58% of FEMSA’s electricity needs from renewable sources 1.46 liters of water per liter of beverage produced efficiency achieved by Coca-Cola FEMSA +38,000 tonnes of plastic recycled by PTM and 80% of PTM’s products made from recycled materials 5. Impact Transforming our communities by generating social value aligned to global sustainable development imperatives. 1 Company’s key performance indicator. 2 EBITDA defined as income from operations plus depreciation, amortization and other non-cash items. 8 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Daniel Rodríguez Cofré Chief Executive Officer José Antonio Fernández Carbajal Executive Chairman of the Board dear shareholders From socioeconomic shifts and advances in technology, to the impacts of climate change and the rise of conscious consumerism, FEMSA is responding to, and evolving with, a changing world and the macro trends that are shaping our markets and communities. Yet, amidst an accelerating pace of change, we have remained grounded in a clear understanding of the things that are most important to our path for success– along which we are guided by one key principle: customers and consumers are at the center of everything that we do. In 2022, FEMSA began a deep review of our strategy with the purpose of ensuring that we are best equipped to pursue and maximize value creation for all our stakeholders for the long-term. We undertook an exhaustive analysis defining three components: 1. FEMSA’s strategic priorities and outline how we expect to achieve them; 2. Comprehensive, long-range plans to execute on those priorities; and 3. Strategic focus to achieve that long-range vision. The results of this unique assessment led to what is now called FEMSA Forward. Before we share more with you about these plans, we would like to first take a moment to highlight a few of the many ways during 2022 that we began to execute on the six priorities we identified in the first phase of our strategic review. We organize them according to three “Whats,” or areas of focus, which will be achieved through and accompanied by three “Hows.” 9 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 FEMSA priorities WHATs HOWs Continued Strong Growth Rooted Sustainability Go Digital CUSTOMERS AND CONSUMERS Enhance our Talent & Culture Balance Risk/ Return Profile Proactive Engagement with our Audiences 10 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 These are our areas of focus. Our WHATs. Continued Strong Growth Go Digital Balance Risk/Return Profile We are achieving balanced and sustain- able growth by capitalizing on existing and new opportunities to create value in our core businesses. This includes growing in both top line and profitability, strengthening our market position and finding new and innovative ways to satisfy our customers’ needs. Our business units have ambitious revenue and EBITDA targets for the next five years and we are pleased to say that we are well on our way to realizing those aspirations following the positive momentum we saw behind the full year’s financial results. In 2022, FEMSA’s total revenues increased 21.0% for the year as compared to 2021 to Ps. 673.2 billion (US$ 34.5 billion), reflecting growth across our business units. Income from operations increased 14.3% and consolidated net income decreased to Ps. 34.7 billion (US$ 1.8 billion). Net majority income was Ps. 6.68 per FEMSA unit3 and US$ 3.43 per FEMSA ADS. Our consolidated net debt posi- tion4 at year-end was Ps. 201.6 billion (US$ 10.3 billion), and our capital ex- penditures amounted to Ps. 34.4 billion (US$ 1.8 billion). Our year-end cash position was more than Ps. 83.4 billion (US$ 4.3 billion). Technology continues to enable companies to enter new markets and segments that were not accessible before. With the aim of better serving the needs of our customers and consumers, we are harnessing the power of data and technology to enhance our products, services and operations, expand financial inclusion opportunities and build new business models fueled by digital tools. In 2022, we received authorization to operate as a financial technology institution in Mexico, positioning us to broaden our presence in the financial services market. Our loyalty program, OXXO PREMIA, and digital wallet, Spin by OXXO, grew at an accelerated pace in 2022, reaching more than 12.9 million and 3.9 million active users, respectively. We are also finding exciting new ways to combine FEMSA’s supply chain expertise with digital enablers for order taking and payment solutions. Coca-Cola FEMSA’s omnichannel multi-category commercial platform continued to grow during the year, with digital sales representing ap- proximately 11% of total sales. OXXO and Coca-Cola FEMSA also began pilot testing new ways to work together to reach new, typically underserved clients by utilizing the digital tools of the FEMSA ecosystem. Our mindset is global, whether that relates to talent, geographic footprint or the positive impact we know we can have on the world. To support a bal- anced risk/return profile, in 2022 we re- inforced our Latin American roots while continuing to expand our geographical exposure in key strategic markets. For example, we finalized the ac- quisition of OK Market, a chain of small-format proximity stores in Chile. The transaction added 120 stores to FEMSA’s existing proximity business footprint in this important market, to reach a total of 269 locations where our newly expanded scale will better serve our Chilean consumers. We also capitalized on the unique opportunity to grow and develop our proximity retail business outside of Latin America – in a new continent – by joining forces with Valora, one of the leading foodvenience platforms in Europe. Together, we will unite our extensive experience, scale and digitalization philosophies to accelerate exciting new avenues of growth and potential. 3 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, 2022, was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5. Including leases. 4 11 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 And these are the ways we are going to achieve them. Our HOWs. Proactive Engagement with our Audiences We aim to facilitate open, clear, proactive, transparent and tailored dialogues with all our stakeholders, using accessible tools and mediums of engagement. This is essential to understand internal and external expectations and concerns, and, in turn, strengthen our levels of credibility and trust, more easily navigate challenges, identify new opportunities and ultimately drive continuous improvement across our business. We view this 2022 Integrated Annual Report as a key example of that philosophy and outreach approach. We have many great stories to tell about how our teams contribute daily to the creation of social, environmental, and economic value, and we are excited to share some of them with you in this publication. Rooted Sustainability Sustainability is embedded in everything we do at FEMSA, and we seek opportuni- ties to engage in collaborative initiatives that amplify our positive impact. As a signatory of the UN Global Compact, we support and adhere to their ten prin- ciples to protect human rights, uphold ethical labor practices, preserve the environment and combat corruption. Sustainability has become so important to the way we do business that, for the first time this year, we have organized this Annual Report according to the three pillars of our strategic sustainability framework: Our People, Our Community and Our Planet. As you will see, we are working hard on bold initiatives to put our people first, create social value in our communities and identify green solutions that drive efficiencies and preserve the environment. Complementing this work, FEMSA Foundation is cultivating shared prosperity by investing in opportunities to support water security, the circular economy, early childhood and the arts. We also continued to advance our leadership in sustainable finance in 2022. Coca-Cola FEMSA became the first non- financial corporation in the Americas and the first company in the Coca-Cola System to issue a social bond, facilitating the financing of social projects. This aligns with the environmental, social and governance (ESG) transformation project Coca-Cola FEMSA conducted during the year to redefine their ambition, goals and sustainability strategy to be at the forefront of market, regulatory and consumer trends. Their overarching vision is to become a world leader in sustainability, serve as an example of ESG excellence in Latin America and elevate ESG practices in the region and the world. Enhance our Talent & Culture Our people are integral to our business and their wellbeing is our highest priority. Our organizational culture is evolving, and we are finding new ways of working together collaboratively. We are prioritizing diversity, equity and inclusion within our culture and hiring practices, including promoting the labor inclusion of minority groups and those in vulnerable situations. We are also empowering our people with the right tools, practices, processes and work experiences to support their career development. In 2022, more than 7 million cumulative hours of continuous learning and training were conducted on topics including human rights, sustainability, health & safety and culture & leadership and ethics & compliance, among other areas of technical knowledge. This investment in our collaborators directly supports our talent attraction, development and succession strategy and sets us up for a strong pipeline of future talent. 12 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 This focused business structure will allow us to better understand and serve our clients and consumers, who are the focal point of everything we do. FEMSA Forward As you can see, we are taking advantage of the many opportunities during the year to begin putting these six strategic priorities into action as we continued designing our long-range plan. At the end of that process, our overarching conclusion was that the best way to continue creating value at FEMSA is through a structure that focuses only on the businesses that are core to us, where we have built leading platforms, and have proven capabilities, financial strength and dynamic avenues for growth. Specifically: Retail, with excellent long-term growth potential, comprising Proximity (Americas and Europe), Fuel and Health. We see significant opportunities to continue developing our already powerful retail platform across small formats. Coca-Cola FEMSA, leveraging its leadership position, excellent execution and outstanding financial strength, combined with significant operating and strategic opportunities – all enhanced by the strategic partnership with The Coca-Cola Company and its globally leading brand portfolio. Digital, building a consumer-centric, value-added financial and digital ecosystem that leverages our businesses’ capillarity and strong consumer recognition, aiming to become the ally to over 30 million consumers. Our digital platform will play a key role in leveraging and connecting our core business units to catalyze the evolution of multichannel retail. This focused business structure will allow us to better understand and serve our clients and consumers, who are the focal point of everything we do. 13 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 We hope you enjoy reading more about our progress and ongoing transformations in this year’s Integrated Annual Report. Leading the Way As we reflect on the success of 2022 and look forward to the future of FEMSA, we would like to thank all our more than 354,000 employees around the world for their hard work. We would also like to thank our entire leadership team for their dedication to upholding our values and executing on our vision, particularly John Santa Maria Otazua and Alfonso Garza Garza following the announcement of their retirements as of the end of 2022. With over 27 years in various leadership roles at Coca-Cola FEMSA, John has ushered the company through a remarkable evolution into the largest and most sophisticated bottler in the global Coca-Cola System. Alfonso has also had a highly successful career with FEMSA over the last 37 years and most recently has been instrumental in the growth of our refrigeration, logistics and distribution operations, including the success of the Envoy Solutions platform. As of January 1, 2023, we welcomed Ian Craig and Constantino Spas Montesinos to FEMSA’s senior leadership team in the roles of CEO of Coca-Cola FEMSA and CEO of FEMSA Strategic Businesses, respectively. We know they are well positioned to help carry FEMSA Forward to achieve our ambi- tious strategies for a successful shared future – one that is proactively responsive to the trends of the macroeconomy, changing consumer preferences and sustainable development imperatives. To you, our shareholders and all our stakeholders: thank you for standing by our side through another successful year of shared value creation. We are proud to offer a product or service close to you, wherever you are. We are proud to do so in a sustainable way, as a people-focused organization, through open dialogue and clear communication. We hope you enjoy reading more about our progress and ongoing transformations in this year’s Integrated Annual Report – structured for the first time through the lens of sustainability – and we look forward to your feedback. By your side, always. José Antonio Fernández Carbajal Executive Chairman of the Board Daniel Rodríguez Cofré Chief Executive Officer 14 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 He will always be remembered at FEMSA with great affection, respect, admiration and deep gratitude. In Memoriam Don José Fernando Calderón Rojas (1954 – 2022) Don José Fernando Calderón Rojas was a member of FEMSA’s Board of Directors since 1984 and served as an extraordinary counselor, great friend and partner to us for many decades. His family roots go back to the original founding of FEMSA and he was the fourth generation to contribute to our Company’s success over these many years. With his guidance and many contributions, he made a profound mark on FEMSA’s growth and evolution. He was an exemplary businessman with a strong leadership vision that he shared with multiple companies and associations in addition to FEMSA. In the 1980s, he was a director of Coca-Cola FEMSA and his wide legacy includes being considered one of those responsible for the growth of Coca-Cola FEMSA in the 1990s, during a time when many important acquisitions were made. He was also an altruistic and generous man who stood out for his great commitment to his family, his community and to the economic, cultural and educational progress of Nuevo León and Mexico. He supported many causes, always in a very discreet way. He will always be remembered at FEMSA with great affection, respect, admiration, and deep gratitude. 15 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 company overview & 2022 results We operate our business through the following structure: CORPORATE STRUCTURE EQUITY STAKES AND BUSINESS UNITS 100%5 Retail 47.2%6 Coca-Cola FEMSA 100% Digital@FEMSA 100% FEMSA Strategic Businesses 14.8% HEINEKEN Proximity Fuel Health Retail5 Coca-Cola FEMSA6 Digital@FEMSA FEMSA Strategic Businesses We also participate in other ancillary businesses, including point-of-sale refrigeration, food processing equipment and plastics solutions. As of 2022, we also participated in the beer industry as a shareholder of HEINEKEN, one of the world’s leading brewers with operations in over 70 countries.7 US$ 34.5 billion total revenues 2022 +23,500 OXXO Stores in Latin America8 Includes FEMSA Proximity (Americas and Europe), Fuel and Health. 5 6 Represents 56% of voting rights. Coca-Cola FEMSA equity stake comprises 27.8% The Coca-Cola Company and 25.0% Public. 7 On February 16th, 2023, the Company sold a portion of its HEINEKEN Investment in the total amount of EUR 3,200 million in an all cash transaction. Following the completion of the sale, FEMSA’s economic interest decreased from 14.76% to 8.13%. As a result, FEMSA-appointed directors resigned from the HEINEKEN Boards, and the Company lost its significant influence over this investment. Includes Grupo Nós. 8 For more information, please see FEMSA’s Form 20-F 2022. ~270 million people served by Coca-Cola FEMSA 16 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 our presence United States Mexico Guatemala Netherlands Luxembourg Switzerland Germany Austria We have more than 354,000 employees in 18 different countries, across the globe through our Business Units at the end of 2022.9 Nicaragua Costa Rica Panama Ecuador Peru Chile Colombia Venezuela9 Brazil Uruguay Argentina Retail* Coca-Cola FEMSA Digital@FEMSA FEMSA Strategic Businesses * Includes: FEMSA Proximity (Americas and Europe), Fuel and Health. 9 As of December 31, 2017, as a non-consolidated operation, Venezuela is reported as an investment in shares. 17 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 financial highlights 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 TOTAL REVENUES INCOME FROM OPERATIONS Million of dollars 20221 2022 2021 % Change 2020 % Change 34,531 673,202 556,261 3,048 59,416 51,993 21.0 14.3 492,966 41,503 12.8 25.3 8.8% 9.3% 34,743 37,678 23,909 28,495 6.7 66.8 8.0 79.6 1,784 1,228 0.3 3.4 8.4% -7.8 -16.1 -16.3 -16.1 3,756 903.1 (1,930) -1576.4 (0.5) (5.4) -1700.0 -1574.1 4,761 92,812 82,422 12.6 71,973 14.5 2.6% Ps. 673,202 32.7% 5.1% 6.6% 3.8% 0.6% Ps. 59,416 9.8% 11.1% 7.6% 1.5% 34.7% EBITDA* TOTAL ASSETS 13.8% 14.8% 14.6% 40,973 798,815 737,500 8.3 684,848 23,645 461,014 402,383 14.6 377,661 17,328 337,801 335,117 0.8 307,187 1,765 4,280 34,410 24,055 43.0 20,893 83,439 97,407 -14.3 107,624 941 18,341 4,640 295.3 8,801 8,894 173,400 185,945 -6.7 179,864 354,344 320,808 10.5 320,618 -4.4% 6.7% 8.2% 3.6% 1.3% 7.7 6.5 9.1 15.1 -9.5 -47.3 3.4 0.1 Ps. 92,812 46.3% 38.3% 29.4% 9.1% 6.9% 2.7% Ps. 798,815 -7.6% 51.9% 39.6% 31.3% 16.2% 4.4% 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. 19.4960 per US$1.00 as of December 31, 2022. 2 Company’s key performance indicator. 3 Represent the net income that is assigned to the controlling 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, Proximity, Fuel and Health Division, and Other Businesses of FEMSA. Grupo Nós headcount not included, as it is a non-consolidated joint-venture. *EBITDA=EBIT+Depreciation+Amortizations. EBITDA calculated under IFRS16 standards Coca-Cola FEMSA Proximity Americas Proximity Europe Fuel FEMSA Health Logistics and Distribution Others 18 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 headcount MEXICO* BRAZIL** COLOMBIA CHILE 635 45,946 9,133 252,250 20,561 175,975 9,695 5,143 37,566 22,820 27,871 1,437 11 1,166 7,205 9,035 13,141 11,964 CENTRAL AMERICA*** EUROPE**** ECUADOR ARGENTINA 156 8,478 8,634 4,889 4,519 4,222 4,500 4,197 19 25 UNITED STATES URUGUAY 3,996 158 3,838 1,686 PERU 588 5 583 FEMSA Proximity FEMSA Health Coca-Cola FEMSA Digital@FEMSA FEMSA Strategic Businesses * Total includes headquarters staff. ** Grupo Nós headcount not included, as it is a non-consolidated joint-venture. *** Central America includes Costa Rica, Panama, Nicaragua and Guatemala. **** Europe includes Germany (3,294), Switzerland (1,498), Austria (71), Netherlands (13) and Luxembourg (13). 19 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 looking ahead: FEMSA Forward During 2022, FEMSA carried out a thorough strategic review of our business platform, including the bottom-up definition of long-range plans for each business unit, as well as the top-down analysis of the optimal corporate and capital structure, to ensure full alignment between the Board and management as to how to pursue and maximize value creation. Consistent with this vision, FEMSA has determined that the best path to maximize long-term value creation is by focusing on its core business verticals beginning in 2023, which have the highest strategic relevance, growth potential and financial and competitive strength: Retail, with excellent long-term growth opportunities, comprised of Proximity (Americas and Europe), Fuel and Health. Coca-Cola FEMSA, leveraging its leading competitive position and excellent execution, combined with significant financial strength and strategic opportunities. Digital@FEMSA, building a powerful value-added per financial and digital ecosystem, while playing a key role in leveraging the connection among FEMSA’s core business units. FEMSA has determined that the best path to maximize long-term value creation is by focusing on its core business verticals beginning in 2023: Retail, Coca-Cola FEMSA and Digital@ FEMSA. 20 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Retail We apply our small-format retail expertise to develop winning, high-growth value propositions in Latin America and Europe. Our Retail business vertical is comprised of FEMSA Proximity (Americas and Europe), Fuel (OXXO GAS) and FEMSA Health. OXXO serves more than 12 million consumers per day in Mexico alone. 21 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Proximity Americas includes OXXO, the largest chain of small-format stores in Latin America – serving more than 12 million daily consumers per day in Mexico alone – with the aim of simplifying the lives of our customers by responding to their on-the-go needs with one-stop convenience. Proximity Europe includes Valora, a leading “foodvenience” platform in Switzerland, Germany and other European countries. Following our transformational alliance with Valora in July 2022, we are now accelerating the economic development of our business outside of Latin America. Fuel includes the OXXO GAS brand of retail service stations in Mexico that sell gasoline and diesel to both retail and Business-to-Business (B2B) customers with the aim of providing the customer with a superior and distinctive service, supported by the values of honesty and trust. Health responds to the pharmacy, health and wellness needs of our communities through a large and growing network, representing the third largest pharmacy chain in Latin America in terms of sales. Within Health, we operate under the brands Cruz Verde, Farmacias YZA, Moderna, Farmacón, Fybeca, SanaSana and Maicao beauty stores. We distribute and sell patented and generic pharmaceutical drugs, beauty products, medical supplies and wellness and personal care products, among other categories. Our Reach in 2022: Points of Sale OXXO Mexico10 Brazil11 Colombia Chile Peru Valora Germany Switzerland Luxembourg Netherlands Austria I Y T I M X O R P L OXXO GAS E U F Mexico Health Ecuador Colombia Chile Mexico H T L A E H TOTAL Retail 21,500 1,468 231 269 75 Subtotal 23,543 1,430 1,184 72 43 37 Subtotal 2,766 568 903 712 905 1,575 4,095 30,972 Subtotal 10 Includes OXXO and other Proximity formats. 11 Through our joint-venture with Raízen, Grupo Nós, includes 217 OXXO stores, 38 Shell Select locations in Brazil, and 1,213 Shell Select stores operated by independent franchisees. 22 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 OXXO’s value is one of one-stop convenience to simplify the lives of our customers Operational Highlights OXXO nearly tripled its speed of expansion in South America versus the prior year with +100 store openings in Colombia, bringing the total to 231 stores in that country; +40 store openings in Chile (including integrating 120 stores through the acquisition of OK Market, with a total of 269 stores) and +25 store openings in Peru with a total of 75 stores. We also accelerated the growth of our Brazilian joint-venture with Grupo Nós through the opening of +317 company-owned and operated stores as of year-end 2022, with a total of 1,468 stores, bringing +2,000 stores in OXXO LATAM (including franchises under both brands Shell Select and OXXO). We worked to consolidate Valora into FEMSA Proximity during the second half of 2022, with the transaction expected to significantly help FEMSA innovate and remain at the cutting edge of modern convenience retail, considering an increasingly mobile and digital clientele in our customer-centric ecosystem. Follow us: @Tiendas_OXXO OXXO GAS expanded its “Complete Liters Test” to 100% of its 568 stations in 2022, through which customers can request to examine a liter of gasoline to confirm that it is complete. Since 2021, we have carried out more than 1.1 million tests for our clients, thereby building trust by reiterating our commitment to the best security protocols and constant calibration of our dispensaries. FEMSA Health continued to see strong growth in 2022, with the opening of 434 net new stores; a 12% increase as compared to 2021. 23 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Financial Results Summary OXXO GAS total revenues increased 29.8% during 2022, reflecting increased movility across Mexico and the strong growth of B2B business, which now represents 20% of total sales, serving more than 7,000 clients in the states where we operate with more than 70,000 units that fuel at OXXO GAS. Proximity Americas total revenues grew 17.8% vs. 2021 and and its operating income reached Ps. 23.5 billion in 2022; representing a 27.9% increase compared to 2021, representing double-digit growth. OXXO same-store-sales were up 14.3% for the year, reflecting strong ticket and traffic growth. Proximity Europe revenues reached Ps. 9.8 billion during the consolidated period of 202212 reflecting traffic and ticket recovery driven by increased mobility. OXXO same-store-sales were up 14.3% for the year, reflecting strong ticket and traffic growth. FEMSA Health total revenues grew 2.4% against 2021, reflecting a demanding comparison base in Chile and strong growth in its Mexico, Colombia and Ecuador operations. 12 The consolidated period of 2022 includes 23 days of October, and the full months of November and December 2022. 24 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Coca-Cola FEMSA As the largest Coca-Cola franchise bottler in the world by sales volume, Coca-Cola FEMSA produces, markets, sells and distributes leading brands of Coca-Cola trademark beverages in nine Latin American countries. We served approximately 270 million people through 2.1 million points of sale with a portfolio of more than 134 leading brands. We operated with momentum in 2022, accelerating our digitalization and cultural transformation while making substantial progress towards our key long-term strategic objectives and our ambition of becoming the world’s preferred and most sustainable commercial platform. We continued to leverage the strength of our Enhanced Cooperation Framework with The Coca-Cola Company, aligning ambitious plans to grow our core business, increase investments in the market, open new revenue streams and significantly advance the rollout of our digital strategy. 25 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 We are confident we are uniquely positioned for growth by leveraging our strengths, our positive momentum, and focusing on the following six strategic priorities as our guiding principles: grow the core; become our customer’s preferred omnichannel commercial platform; de-bottleneck our infrastructure and digitize the enterprise; make a difference in ESG; strengthen our customer-centric culture and leveraging our strategic M&A D2C: We continued to increase traffic to “Coca-Cola en tu Hogar” website and expand our direct- to-consumer (D2C) home delivery capabilities in Mexico, reaching almost 600,000 households via more than 1,650 routes (up from approximately 1,200 routes in 2021). Additionally, we are digitizing our D2C home delivery capabilities, allowing our home delivery team to sell with their handheld device and accept digital payments. Operational Highlights Multi-category: We are We operate 56 bottling plants and 249 distribution centers13 in 9 markets of Latin America. Omnichannel B2B Platform, Juntos+: We grew Juntos+, our digital Business-to-Business (B2B) omnichannel multi-category commercial platform’s monthly active customers to more than 800,000 in 2022. Digital sales through the platform reached US$ 1.2 billion in 2022 (up from US$ 360 million in 2021), or approximately 11% of total sales. strengthening our multi-category platform and alliances with high-potential leading brands across our territories. For example, we successfully signed long-term distribution agreements with spirits leader Grupo Campari, and with confectionary products leader, Grupo Perfetti Van Melle, in Brazil. Additionally, we are running a series of pilot programs to gain new insights across key territories. We expect that these pilot programs will allow us to obtain the necessary learnings and insights to continue advancing towards a potential strategic alliance in the future. For more information, please see Coca-Cola FEMSA’s Integrated Report 2022 and Form 20-F 2022. 13 We have considered owned and third-party distribution centers managed by us. We are now serving over 1.3 million registered clients, reaching more than 800 thousand digital monthly active users, on our B2B platform 26 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Portfolio innovation: Our low- and no-sugar categories remained important growth drivers across our territories as we leveraged a consistent value proposition, with Coca-Cola Zero Sugar sales increasing 23% versus the previous year. During the year, we introduced limited edition, sequential releases from Coca-Cola Creations, The Coca-Cola Company’s innovation platform, across key markets to enhance consumer engagement. These exciting new creations— featuring gaming-inspired pixel-flavored Coca-Cola Zero Sugar Byte and the artist Marshmello’s Limited Edition Coca-Cola—enabled us to launch creative new products and experiences successively across physical and digital worlds, Notably, catering to our consumers’ preferences, we took portfolio innovation to the next level with the expanded consumer-centric launch of our locally developed formula of Brisa Manzana (Colombian Apple) sparkling water. Affordability: Despite inflationary pressures, we continued to provide our consumers with unmatched affordability in the “away from home” and “at home” consumption occasions, thanks to several market initiatives. Also, our universal bottle remained an important driver of affordability. In Mexico, during the year, we launched our 2.5-liter returnable PET universal bottle across new cities. Now covering nearly all our franchise territory, the universal bottle or “botella única” enables us to use the same refillable bottle our core flavored sparkling beverage and juice brands— from Fanta and Sprite to certain Del Valle brands. Importantly, the expanded coverage of our refillable universal bottle continued to yield share of sales gains in the cities where it was launched. This year in Colombia, we significantly expanded the rollout of our affordable universal bottle to cover more than 60% of the country. For more information about our portfolio, please visit: https://coca-colafemsa.com/en/about/ we-are-coca-cola-femsa/our-products/ 27 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 This transformational bottling technology enables us to offer affordable refillable PET presentations not only of brand Coca-Cola, but also of our flavored sparkling and still beverage brands to compete more effectively in the market, enabling volume and share of sale increases in the cities where it was launched. Sustainability: Read more about our ongoing leadership in sustainable finance and progress against Sustainability Performance Targets on page 134, and the construction of our new PET recycling plant on page 50. Leadership transitions: Ian Craig was appointed by the Board of Directors as Chief Executive Officer of Coca-Cola FEMSA as of January 1, 2023. Ian has been an outstanding member of the FEMSA team for 28 years, with increasing responsibilities at Coca-Cola FEMSA since 2003. Ian was CEO of Coca-Cola FEMSA Brazil since 2016, leading the company’s digital transformation towards a B2B platform. Constantino Spas Montesinos, formerly Chief Financial Officer of Coca-Cola FEMSA, was also appointed Chief Executive Officer of FEMSA Strategic Businesses as of the same date. At the same time, Gerardo Cruz Celaya was appointed as CFO of Coca-Cola FEMSA as of January 1, 2023. Financial Results Summary All categories posted accelerated volume growth as compared with the previous year. Despite the volatile supply chain and raw material environment, our gross profit and EBITDA remained resilient. Our revenue growth management and favorable raw material hedging strategies substantially mitigated margin pressures mostly from higher PET and sweetener costs across most of our territories. As we navigated an uncertain infla- tionary environment, our focus on affordability and relentless point-of-sale execution enabled us to deliver 8.6% year-over-year volume growth—12.1% ahead of our 2019-baseline year. For the year, total revenues increased 16.4% to Ps. 226.7 billion. Operating income improved 12.5% to Ps. 30.8 billion. Operating cash flow increased 10.7% to Ps. 43.0 billion. Looking ahead, as we continue to see a dynamic raw material and supply chain environment, we expect to continue to protect profitability through our disci- plined raw material hedging strategies and focus on driving expense efficiencies. Learn more about: Coca-Cola FEMSA Sustainability-Linked Bond 28 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Digital@FEMSA On January 1, 2022, we announced the creation of the Digital@FEMSA division to unlock our next wave of value creation by leveraging digital tools that better serve our customers. We are building a value-added ecosystem that better connects consumers and businesses. Specifically, this new business unit was created to capture the full potential offered by the digital landscape while allowing for the focus, flexibility, acqui- sition of new talent and new business processes that will be required to meet the speed of change and innovation of the current business environment. Digital@FEMSA aims to drive prosperity among individuals, businesses and communities through digital and financial inclusion. To do so, we are building a value-added ecosystem that better serves and connects consumers and businesses through three main types of solutions: loyalty, payments and convenience. 29 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our current solutions include: Loyalty: OXXO PREMIA aims to be the largest loyalty program in Mexico. Currently, it has 12.9 million active users14 and we are working on enhancing the value proposition by incorporating more allies. Fintech to Consumers: Spin by OXXO15 is our digital wallet that has 3.9 million active users.16 In 2022, Spin by OXXO received authorization to operate as a financial technology institution by the Banking and Securities Commission (CNBV) of Mexico. During 2023, we expect to continue to deploy new financial products to the market. Digital Solutions for Businesses: through the acquisition of Netpay17 we want to enhance the value of Micro, Small and Medium-sized Enterprises (MSMEs) served by FEMSA and expand our Ecosystem. 12.9 million OXXO PREMIA active users and 3.9 million Spin by OXXO active users in Mexico 14 Active OXXO PREMIA users are those who have transacted at least once with OXXO PREMIA in the last 90 days. 15 Spin by OXXO operates through Compropago S.A. de C.V. I.F.P.E. 16 Active Spin by OXXO users are those with a balance or those who have transacted in the last 56 days. 17 The transaction is expected to close during the first quarter of 2023. Learn more on our website: www.spinbyoxxo.com.mx 30 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 FEMSA Strategic Businesses 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. REACH IN THE UNITED STATES +1.5 million orders fulfilled for +200,000 of our customers’ locations, representing +600 million pounds delivered for the hospitality, health care, entertainment, education and government sectors. Logistics & Distribution includes logistics and transportation, as well as specialized janitorial, cleaning and sanitation product distribution. Food Service Solutions includes cooling and refrigeration systems and food service solutions. Logistics & Distribution is made up of Envoy Solutions and Solistica – through which we are able to serve millions of ever-evolving customers in a consistently efficient, effective and differentiated manner. 31 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Envoy Solutions is a specialized distributor and solution provider serving the United States through a family of the nation’s best distributors and specialty marketing solutions in facility care, foodservice, packaging and marketing execution. We lead in two main product categories: facility supplies distribution (through which we distribute both janitorial and sanitation products and food service disposables) and packaging solutions (through which we provide packaging supplies and equipment, as well as packaging equipment maintenance). Solistica is a leading third-party logistics (3PL) solution provider for Latin America, serving more than 4,000 customers in three principal regions: Mexico, Brazil and Central America. We lead in two primary areas of expertise: transportation (through which we offer full truckload, less than truckload and dedicated fleet services), and warehouse operations management for diverse industries such as human health, animal health & nutrition, consumption, retail and technology, among others. Other Businesses FEMSA Strategic Businesses also includes AlPunto, a group of companies focused on providing solutions in food service equipment, commercial refrigeration, materials handling and integral services at the point of sale. Within AlPunto, we have Imbera, our refrigeration busi- ness that manufactures commercial refrigerators for our clients in the soft drink, beer and food industries, includ- ing for Coca-Cola FEMSA; Torrey and the Cooking Depot, our food service solutions businesses that manufacture operations for food processing, storage and weighing equipment; and Plásticos Técnicos Mexicanos (PTM), which de- signs and manufactures plastic transfor- mation projects for materials handling, food, beverages and automotive. Operational Highlights Envoy Solutions reached an agreement to acquire Sigma Supply of North America Inc., an independent specialized distribution company based in Arkansas, expanding our footprint and reflecting another important step in our strategic path to build a leading national distribution platform in the United States. The move has expanded Envoy’s distribution network to include almost 70 facilities covering 34 states. Solistica inaugurated a new warehouse in Monterrey, Nuevo León, Mexico with a state- of-the-art technological operation system that will strengthen the logistics network of its clients in the northern states and the U.S. border, a strategic location to reduce costs and increase efficiencies. In cooperation with a key customer, Solistica inaugurated a new distribution center in Extrema, Minas Gerais, Brazil, strategically located near economically important regions in the country that will bring effective gains and cost reductions. The unit is expected to generate more than 200 new direct and indirect jobs in the region and move a volume of 14,000 tonnes of products. Financial Results Summary Logistics and Distribution had a strong year driven by a standout performance at Envoy Solutions, showing strong top-line growth and stable margins. Logistics and Distribution total revenues increased 49.8% during 2022 reflecting the strong inorganic growth of Envoy Solutions. On an organic basis, total revenues for this segment increased 12.8%, reflecting effective cross-selling innitiatives at Envoy Solutions coupled with positive demand dynamics at our Solistica operations. REACH IN LATIN AMERICA +1.9 million trips, reaching +160,000 of our customers’ locations weekly, representing +7.7 billion pounds transported on behalf of our customers in the pharmaceuticals, automotive, technology and consumer goods industries. 32 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 our sustainability strategy For FEMSA, sustainability is the ability to create the social, environmental and economic conditions to operate efficiently today while growing in harmony with the environment and society tomorrow. Our actions are guided by the highest standards of our ethics and values, and we generate positive impacts across three guiding axes of our sustainability strategy: Our People, Our Community and Our Planet These pillars are integrated directly into our corporate strategy and all that we do. Additionally, incorporating the Governance vector into our sustainability model since 2021 has been vital to ensuring the responsible conduct and operation of the business, achieving long-term value generation, aligning and promoting both economic and social performance, as well as ensuring transparency and building credibility with all interest groups. We seek to meaningfully contribute to the achievement of global objectives that transcend our operations. Our sustainability strategy and accompanying 2030 corporate goals are aligned with the United Nations Sustainable Development Goals (UN SDGs) and in support of the principles of the UN Global Compact (UNGC). Our approach also integrates the priorities of FEMSA Foundation while leveraging its existing strengths and deep community network. Our sustainability strategy is ratified at the highest levels of our organization. Our Sustainability, Inclusion & Diversity Committee, co-led by the Chairman of the Board and the Corporate Director, drives our agenda and each of the lead- ers of our business units has responsi- bility for integrating sustainability into their operations. 33 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Materiality FEMSA’s material environmental, social and governance (ESG) topics – that is, the most important risks, opportunities and issues in the eyes of the Company’s internal and external stakeholders – were identified through an exhaustive analysis taking into account the considerations of each of our businesses within the wider global context. We began a full materiality assessment in 2020 that was completed in 2021. The exercise entailed a series of steps to identify, prioritize and validate key stakeholder concerns relevant for FEMSA and each business unit. Identification: We began the process with research to understand global trends, including benchmarking best practices from among 17 peer companies. With our internal stakeholders, we conducted an analysis of business strategy, operational processes and legal requirements, as well as completed a risk assessment using our internal risk management framework. External engagement opportunities included dialogues about the sustainability concerns of a representative selection of 24 stakeholders. We have also conducted the following business-unit level materiality assessments: Proximity Americas (OXXO in Mexico, Chile, Colombia and Peru as well as OXXO GAS), FEMSA Health, Coca-Cola FEMSA and FEMSA Strategic Businesses (Solistica; Food Service: Torrey and Cooking Depot; Imbera; and PTM). Looking ahead, in alignment with our internal governance and sustainability strategy, we plan to conduct a comprehensive sustainability materiality assessment every four to five years. Prioritization: The next phase of the materiality assessment yielded a set of results that has now become FEMSA’s Strategic Sustainability Framework: three strategic pillars, made up of nine priority topics and 29 focus areas – all stemming from one foundational commitment to strong governance practices, guided by our ethics and values. Validation: Finally, we socialized the materiality outcomes, final strategy and related roadmap with corporate and business unit directors, external sustainability experts and our own collaborators to ensure agreement and buy-in. These results were presented to and approved by our senior management team and Board of Directors, the highest governance body responsible for review and approval. 34 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 FEMSA Priority Topics Although each of our businesses is exposed to different sustainability issues because they operate in different industries and have different stakeholder groups, there are overlaps in the materiality of multiple issues. Built on the foundation of FEMSA’s collective commitment to strong corporate governance, we have identified and prioritized 29 focus areas, organized under nine priority topics, across the three pillars, which integrate the perspectives of all stakeholders and represents the most important commonalities across our different businesses. FEMSA’s Strategic Sustainability Framework: Priority Topics & Focus Areas Our People Our Community Our Planet Human and Labor Rights Community Wellbeing 1. Ensuring Adequate Compensation 2. Providing Decent, Optimal and Safe Working Conditions 3. Prohibiting Child and Forced Labor 4. Respectful and Collaborative Work Environments 12. Supporting Healthy Lifestyles 13. Contributing to Safe Surroundings 14. Clean Communities 15. Engaging Local Communities Climate Action 20. CO2e Emissions Reduction 21. Renewable Energy Use 22. Sustainable Mobility 23. Sustainable Products and Services Diversity, Equity and Inclusion Economic Development Water Management 5. Fostering Inclusive Work Environments 6. Encouraging Diversity 7. Promoting Gender Equality Integral Wellbeing 8. Promoting a Savings Culture and Financial Education 9. Protecting Physical, Mental and Emotional Health 10. Career Development and Continuous Learning 11. Promoting Values and Citizenship 16. Economic, Financial, and Digital Inclusion 17. SME Development and Local Procurement 18. Encouraging Entrepreneurship Sustainable Sourcing 19. Sustainable Sourcing 24. Optimizing Water Efficiency 25. Contributing to Water Accessibility, Sanitation and Hygiene (WASH) 26. Contributing to Water Security Circular Economy 27. Reducing and Eliminating Operational Waste 28. Sustainable Packaging 29. Product and Service Circularity Corporate Responsibility Ethical and Socially Responsible Behavior Fiduciary Responsibility Governance 35 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Goals & Targets Following our full materiality assessment in 2020, we released our first set of ambitious corporate sustainability goals in 2021. During 2022, we completed a process to further define the scope for each of our public corporate goals, including identifying quantifiable key performance indicators to help us track our progress against goals. Priority Topic 2030 Goal 2022 status 2021 status Baseline Human and Labor Rights Workplace survey rating in the top 10 against benchmark of high-performing companies (according to Mercer Sirota Employee Engagement Survey) 87.0% on Organizational Climate Diagnostic 88.0% on Organizational Climate Diagnostic 89.0% (benchmark score of high-performing companies on Organizational Climate Diagnostic) 2030 Corporate Goals Integral Wellbeing 8.7 million hours of annual training for collaborators +7.0 million +10.8 million (2021) Diversity Equity and Inclusion To have a 20 percentage point increase (or to reach 40%) of women in executive positions 27.0% 24.0% 20.0% (2020) Community Wellbeing 20.0 million beneficiaries of our Community Wellbeing initiatives 3.7 million 2.9 million Sustainable Sourcing 90.0% of procurement purchases from local suppliers in all business units 67.0% Climate Action 85.0% renewable energy use across all our operations 58.0% Water Management Achieve a neutral water balance in all our operations 81.0% Circular Economy Zero operational waste to landfill 68.7% 64.0% 60.9% 81.0% 53.0% (2021) (2021) 22.0% (2017) (2021) 52.0% (2019) r u O e l p o e P r u O y t i n u m m o C r u O t e n a l P 36 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Sustainability Performance Targets FEMSA Sustainability-Linked Bond Update In 2021, FEMSA announced the placement of Euro-denominated sustainability linked notes in the international capital markets. In connection with the Notes, we adopted and published our Sustainability Linked Bond Framework, which was prepared in accordance with the Sustainability-Linked Bond Principles 2020 (“SLBP”), as administered by the International Capital Market Association. The Framework includes certain SLBP-aligned Sustainability Performance Targets (SPTs) for 2030 in support of FEMSA’s overall sustainability strategy priorities, specifically as they relate to the circular economy and renewable energy: SPT 1: Zero Operational Waste to Landfill: Increase the percentage of waste diverted from landfills to 65% by 2025 and 100% by 2030. SPT 2: Renewable Energy: Increase the annual sourcing of renewable electricity to 65% by 2025 and 85% by 2030. Per the terms of the Notes, if such targets are not satisfied by certain dates, as verified by an accredited external party, there will be an interest rate step up of 25 basis points. Our 2022 progress toward these SPTs is summarized below. FEMSA SPT Performance KPI 2017 2019 2020 2021 2022 SPT 2025 SPT 2030 Percentage of total operational waste diverted from landfills (measured as tonnes of waste recycled or reused/tonnes of total operational waste) Percentage of total electricity consumption coming from renewable sources N/A 22.0% or 573,861 MWh (baseline) 52.0% or 134,426 tonnes (baseline) 53.0% or 138,993 tonnes 53.0% or 152,391 tonnes 68.7% or 192,949 tonnes 65.0% 100.0% 48.0% or 1,327,714 MWh 60.0% or 1,618,813 MWh 60.9% or 1,672,711 MWh 58.0% or 1,738,633 MWh 65.0% 85.0% 37 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Coca-Cola FEMSA Sustainability-Linked Bond Update Also in 2021, Coca-Cola FEMSA issued the first sustainability-linked bonds in the Mexican market, as described in our SLBP-aligned Sustainability Linked Bonds Framework. As part of this arrangement, we commit to achieve a water use ratio (WUR) of 1.26 liters by 2026. Specifically, the KPI measures the total volume of water consumed across all bottling plants expressed per the total volume of beverages produced.18 If this indicator is not met by the specified dates (see table below), as verified by an ac- credited external party, the interest rate of the bonds will increase by 25 basis points. Our 2022 progress toward the SPT is summarized in the table below. Coca-Cola FEMSA SPT Performance KPI 2020 2021 2022 SPT 2026 Water use ratio (WUR) as the water usage to a liter of beverage production (L/L) 1.49 (baseline) 1.47 1.4619 1.26 18 For example, a WUR of 1.20 indicates that, for every liter of beverage produced, an additional 0.2 liters of water is used to produce it. The measured water is from any source, including municipal water, water wells, surface water or tank water. The description of water sources is aligned with the GRI Standard on reporting total water usage. 19 For purposes of these metrics, Coca-Cola FEMSA considered owned and third-party distribution centers managed by KOF. Plants acquired during the year 2022 will report on these metrics in the 2023 Integrated Report. 38 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 2022 Sustainable Finance Updates Building on the momentum of the sustainability linked bonds announced by FEMSA and Coca-Cola FEMSA in 2021, we continued our leadership in sustainable finance during 2022 with two additional announcements. First, in October 2022, Coca-Cola FEMSA announced the successful pricing of social and sustainability bonds in the Mexican market for a total of Ps. 6,000.0 million, becoming the first non-financial corporation in the Americas and the first company in the Coca-Cola system (https://www.coca-colacompany.com/company/coca- cola-system) to issue social bonds that facilitate the financing of social projects to investors. The bonds were priced at a fixed rate of 9.95% (Mbono+0.30%) for an amount of Ps. 5,500.0 million due in seven years; and Ps. 500.0 million at a variable rate of TIIE + 0.05% due in four years. The net proceeds of these bonds will be used to finance social and sustainability projects focused on the development and local needs of the communities in which the Company has a presence, such as support programs that provide entrepreneurial and self-employment skills, financial solutions that support store owners and investments in sustainable community development, including water replenishment projects and water access in vulnerable communities. Secondly, in November, FEMSA announced the placement of Mexican Peso-denominated sustainability linked bonds in the Mexican market for a total of Ps. 9,273,843,400.0 The issued bonds were purchased by 33 institutional investors and the issuance was oversubscribed 1.9x times. These Bonds are linked to FEMSA’s SLBP-aligned Sustainability Linked Bond Framework and include the same SPTs related to the circular economy and renewable energy as the bond launched in 2021 (see page 134). Again, if these targets are not satisfied on the dates specified, and as verified by an accredited third party, there will be an interest rate step-up of 25 basis points. Learn more in: Coca-Cola FEMSA’s 2022 Integrated Annual Report. Green Bond Allocation In line with FEMSA’s sustainable finance strategy, Coca-Cola FEMSA issued its first green bond in the international capital markets in 2020. As of December 31, 2022, Coca-Cola FEMSA had allocated US$ 664.87 million of green bond net proceeds (or approximately 94% of the total) to projects supporting climate action, water stewardship and the circular economy. 39 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Select Sustainability Awards & Recognitions The following is a partial list of select third-party validations of FEMSA’s sustainability efforts that we were honored to receive in 2022 from across multiple platforms.20 FEMSA named to the Dow Jones Sustainability Mercado Integrado Latinoamericano (MILA) Pacific Alliance Index for the sixth consecutive year. Coca-Cola FEMSA named to the Dow Jones Sustainability MILA Pacific Alliance Index for the sixth consecutive year; to the Dow Jones Emerging Markets Index for the tenth consecutive year; and included in the S&P Global Sustainability Yearbook 2023 for the third consecutive year. Coca-Cola FEMSA recognized for the fourth consecutive year as one of the 2022 Best LGBTQ+ Places to Work by the Human Rights Campaign Foundation and HRC Equidad MX: Global Workplace Equality Program. FEMSA and Coca-Cola FEMSA named for the second and fifth consecutive year, respectively, to the 2022 Bloomberg Gender Equality Index for the development of policies that promote gender parity and for transparency in gender-related data disclosures. FEMSA and Coca-Cola FEMSA both named to the FTSE4Good Emerging Latin America Index for the seventh consecutive year. FEMSA and Coca-Cola FEMSA named to the S&P/BMV Total Mexico ESG Index for the second consecutive year since its creation in 2021. FEMSA achieved first place in the Conglomerates category of the Merco Empresas y Líderes México ranking for best reputation. The Mexican Center for Philanthropy, A.C. (Cemefi) and the Alliance for Corporate Social Responsibility (AliaRSE) announced the following companies that again met the standards to obtain the ESR® (Empresa Socialmente Responsable, or Socially Responsible Company) Distinction in 2022: FEMSA, 16th year OXXO, 18th year OXXO GAS, 3rd year Farmacias YZA, 3rd year GPF Corporation (Fybeca), 1st year Coca-Cola FEMSA, 17th year Coca-Cola FEMSA Solistica, 16th year FEMSA maintained its MSCI A rating Imbera, 17th year for the third consecutive year. PTM, 8th year 20 This selection does not include all the recognitions we were pleased to receive during the year at the business-unit level as well. 40 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 our people At FEMSA we believe it is the right of all people to perform a job without discrimination, to receive fair remuneration and to preserve their human dignity through social protections. Ps. 4,100.0 million invested in Our People pillar We are committed to the comprehensive development of our more than 354,000 collaborators, generating respectful, inclusive and collaborative work environments for our talent to grow and thrive. We provide dignified working conditions that constitute an essential support for the wellbeing of our people. Our efforts are aligned with the UN SDGs and cover three priority topics: Human & Labor Rights, Diversity, Equity and Inclusion and Integral Wellbeing. Sustainability Highlights 2022 +1,500 refugees and migrants hired 6,700 senior or disabled people employed 2nd consecutive year on the Bloomberg Gender-Equality Index 27.0% of women in executive positions and 41% of the total workforce +7.0 million cumulative hours of employee training (20 hours per employee) 87.0% on FEMSA’s Organizational Climate Diagnostic +736K corporate volunteering hours for +2.6K projects by +100K employees For detailed 2022 data related to Our People, please see Key ESG Data in the Appendix. 41 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 With the objective of creating safe workspaces and healthy lifestyles, all FEMSA Business Units have Industrial Safety and Occupational Health management systems in accordance with their activities and line of business, complying with FEMSA Corporate Policies and the legal framework of the countries where we operate. Given that the health and safety risks of each business unit are unique, we have certified professionals in charge of the Occupational Health and Safety Management Systems at each business unit. Human & Labor Rights In line with our values and identity, we promote adequate working conditions and compensation for our collaborators, and we ensure that we have the necessary facilities and infrastructure for our team members to work optimally and safely. We recognize that Human and Labor rights are the set of prerogatives based on human dignity, the effective realization of which is essential for the integral development of the person. FEMSA’s Human and Labor Rights Policy outlines our expectations of our employees, suppliers and other stakeholders. Providing Decent, Optimal & Safe Working Conditions Nothing is more important than the safety of our people. We have the necessary facilities and infrastructure for our team members to work optimally and safely. We also maintain the right protocols, processes and regular training to prevent occupational accident risks in our workplace. We also conduct labor risk assessments that consider the views of our collaborators and leadership teams, including issues related to human rights. Prohibiting Child & Forced Labor As outlined in our Human and Labor Rights Policy, we support the elimination of child labor and comply with the relevant local legislation on the employment of minors. We prohibit any employment relationship that is not voluntarily agreed upon and reject any form of unpaid work, servitude, slavery or mandatory retention of documents as a condition of employment. Through our Supplier Guiding Principles, we share the minimum expectations that we require of our suppliers to manage key areas of Human and Labor Rights. 42 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Respectful & Collaborative Work Environments We strive to create respectful and collaborative work environments that promote the commitment and motivation of our collaborators, and we keep open communication channels on a permanent basis. Our corporate goal is to have a workplace survey rating in the top 10 against benchmarks of high- performing companies, or those with at least a score of 89% on the Mercer Sirota Employee Engagement Survey. As of 2022, we scored 87% on the Mercer Employee Engagement Survey, after achieving a 70% response rate among those eligible employees invited to participate (representative from all business units and 14 countries). Preventing Child Labor in CAFFENIO’s Supply Chain FEMSA has zero tolerance for child labor, including within the supply chain of our popular andatti coffee, the Mexican grown brand from CAFFENIO exclusively offered at OXXO stores and online. Unfortunately, child labor remains a challenge in the wider coffee sector around the world, where workers in some coffee-growing countries bring their children to help with the intensive manual work. CAFFENIO has found that the native communities differentiate formative work from child labor since the Mexican tradition is to grow coffee as a family. Approximately 95% of the coffee producers that work with CAFFENIO are smallholders who do not have hired labor. For the largest producers, who need to hire personnel, training is carried out in accordance with the Guiding Principles framework that promotes human, labor, environmental and ethical rights. In 2018, CAFFENIO launched Formando a los Cafeticultores del Mañana (“Training the Coffee Growers of Tomorrow”) to reach children living in coffee-producing communities in the region of the High Mountains in Veracruz. The program aims to promote children’s pride for being part of the local coffee and agricultural sector and its importance to the country’s economy through art, games and short video stories. CAFFENIO also promotes children rights and civic values in elementary schools. In four of the participant schools, CAFFENIO has developed small school farms. As of 2022, the project is running in 29 communities benefiting more than 1,100 students. One major activity during the year was the short stories contest, “Cosechando Historias” (Harvesting Stories), that achieved the participation of 151 students from 1st grade up to the College level, in five categories. READ MORE CASES 1 2 3 4 43 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Diversity, Equity and Inclusion At FEMSA, we recognize and celebrate the uniqueness of all people, regardless of gender, religion, nationality, sexual orientation, physical condition, or age. Our focus on diversity, equity and inclusion (DEI) extends across the organization, creating exponential value for our company and our communities. This includes non-discrimination in our employee recruitment processes, offering equal opportunities in our professional development tracks, and promoting multiculturalism among our strategic leadership teams. FEMSA’s Head of DEI leads our efforts in these areas and works closely with each of FEMSA’s business units to help them implement their own DEI strategies and amplify positive impacts across our organization in unique ways. For example, in 2022 OXXO Chile obtained the Labor Inclusion Manager certification, which promotes equal opportunities for diverse employee groups to grow in their work environments, such as incorporating facility upgrades to accommodate people with disabilities. To strengthen our efforts, in 2022 FEMSA defined and approved a DEI specific internal regulation, which outlines FEMSA’s inclusivity expectations and helps guide all our business units in maximizing inclusive behaviors and defining appropriate countermeasures in cases of any uncertainty or non-compliance. Fostering Inclusive Work Environments & Encouraging Diversity Across our business units, we strive to offer inclusive work environments in which all people have equal access to professional development opportunities and the space to contribute value from their individual characteristics and backgrounds. For example, the Proximity Division promotes the labor inclusion of minority groups and those in vulnerable situations. As of 2022, OXXO employed more than 2,530 older adults, and more than 860 people with disabilities. OXXO’s longstanding strategy to inclusively support diverse employee groups includes Directed Labor Training Centers, or special labor inclusion Coca-Cola FEMSA was recognized for its best practices of inclusion to LGBTQ+ people in Mexico for the fourth year in a row. 44 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 “We are proud of what we have been able to achieve in Mexico in supporting the employability of migrants and refugees, but we must continue to work to overcome challenges, including driving greater societal awareness and acceptance while facilitating mechanisms for financial inclusion. FEMSA has a responsibility to lead in these areas and we are setting a path for our partners, neighbors and other companies to join with us in finding solutions that inspire hope while reducing discrimination and poverty.” Anabel Olivas, Leader of Diversity, equity and inclusion at FEMSA hired more than 1,492 people in a refugee or migrant situation from surrounding countries, including Honduras, Haiti, Cuba, El Salvador, Guatemala, Venezuela, Nicaragua, Ecuador, Colombia and Uruguay. programs that help contracted people develop specific skills to be incorporated into active work, creating more equal employment opportunities both inside and outside the Company. In collaboration with civil organizations, public agencies and universities, OXXO’s Training Centers for Older Adults, for example, offer classroom-style development programs that provide the tools and knowledge for adults over the age of 60 in vulnerable situations to remain active in the working world. Building skills and confidence in the areas of finance, customer service, administration or computing empower participants to successfully work in OXXO or in another company. To date, more than 6,000 adults between the ages of 60 and 70 years old have benefited from our Training Centers for Older Adults. In 2019, OXXO also began implementing a refugee inclusion program in Monterrey, Mexico in collaboration with the UN Refugee Agency (UNHCR) and Tent Partnership for Refugees, a global non-profit coalition of more than 140 multinational companies working toward the economic integration of refugees by supporting dignified and formal employment opportunities. In Mexico, UNHCR seeks to relocate 20,000 refugees and asylum seekers from southern areas every year, and in Nuevo León alone, more than 9,300 migrants have applied for refugee status in the last three years. During that time, the Proximity Division has 2022 AGE DIVERSITY 16% 1% 25% Employees 58% 18–29 years 30–50 years 51–59 years Over 60 years Learn more about FEMSA’s financial inclusion leadership efforts on page 53. 45 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Cruz Verde in Colombia received the EQUIPARES Labor Equity Seal, a certification program developed by the Colombia Ministry of Labor and the UN Development Programme, in recognition of effective actions taken to close gender gaps. EXECUTIVE POSITIONS Women Men 2022 % 2021 % 27 73 24 76 2022 GENDER DIVERSITY Solistica’s First Female CEO 41% Employees 59% In line with Solistica’s vision of becoming the preferred third-party logistics (3PL) solutions partner in Latin America, and FEMSA’s commitment to increasing women in executive positions, Jessica Ponce de León Men Women Promoting Gender Equality We promote equal access and opportunities for men and women through various programs and training in our companies. Across all FEMSA businesses, women make up approximately 41% of our total workforce and 27% of executive positions. Our corporate goal is to reach 40% women in executive positions by 2030, which would represent a 20 percentage point increase from our 2020 baseline. 2022 marked the second consecutive year that FEMSA was included in the Bloomberg Gender Equality Index. Coca-Cola FEMSA was also included for the fifth consecutive year, maintaining its link with UN Women. became the first female CEO of Solistica as of January 1, 2022. In an industry traditionally dominated by men, Jessica has a strong background in logistics and a track record of high achievement across various industries in the consumer and aviation sectors. Given the ongoing evolution of the logistics business and the current operating environment, one of her priorities as incoming CEO was to undertake a comprehensive strategy review and ESG materiality assessment to understand the most important topics for Solistica’s business and stakeholders. The results aligned closely with the priorities of FEMSA’s three pillars (Our People, Our Community, Our Planet), including an emphasis on climate change, diversity, equity and inclusion and talent development. The analysis also identified strategic topics specific to Solistica, including service quality, innovation & technology and data privacy. These insights directly informed a refresh of Solistica’s business strategy, including short and long-term goals, key actions and new collaboration opportunities across our value chain, particularly with suppliers and customers. As a next step, Solistica will be defining new key performance indicators and baselines to measure and track actions, results and impact. READ MORE CASES 1 2 3 4 “At Solistica, I am proud to lead a team of more than 22,000 collaborators, for whom we maintain an environment of fairness and equality, offering opportunities for all people based on ability and regardless of gender. The diverse talent and creativity of our people is more important than ever, as the pandemic has redefined our logistics processes and the last mile, showing us that distribution networks are evolving and online sales will continue to soar. Our sustainable business strategy – focused on technology, operational efficiency and commercial management – keeps us nimble in the face of change, allowing us to keep customers at the center of all we do.” Jessica Ponce de León, Solistica CEO 46 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Integral Wellbeing We promote and encourage the quality of life and wellbeing of collaborators and their families through a culture of participation and co-responsibility. In 2022, we reimagined and redefined what we mean by ‘Integral Wellbeing’ at FEMSA, evolving it from a simple social development model to a comprehensive framework that supports the wellbeing of our people across five dimensions: Healthy body: We develop healthy habits that contribute to good physical fitness, prevention and reduction of diseases. As next steps in 2023 and beyond, we will implement a series of global strategies and actions to embed this model into the culture of FEMSA and our business units, including wellness trainings, the launching of new formative roadmaps, tools and accelerators, and the tracking of key indicators to understand our reach and impact, as well as to identify areas for continuous improvement. Work life: We promote excellence at work within a positive, inclusive, constructive, healthy and safe environment. Promoting a Savings Culture & Financial Education We strive to generate comprehensive wellbeing in five integral areas in the lives of our employees, their families and the communities where we operate. Financial wellbeing: We promote financial education to generate a savings culture that protects and builds personal and family wealth. Social connections: We facilitate the development of significant interpersonal relationships that promote family integration and among collaborators, as well as citizen participation to improve the community and the environment. Psychological wellbeing: We promote the psychological wellbeing of employees so that they can experience a satisfying and purposeful life. OXXO CLUB is a digital store – exclusively available to our more than 175,000 employees from Proximity, Digital@FEMSA and FEMSA Servicios - which offers affordably priced products and services with attractive discounts. From office and kitchen supplies to electronics, clothes and more, we are able to leverage our network of supplier relationships to access special pricing, which translates to cost savings and economic benefits that we can pass on to our eligible employees. We foster a savings culture in the orga- nization that promotes the building and protection of our team members’ and their relatives’ personal assets. For exam- ple, through Sociedad Cuauhtémoc y Famosa (SCyF) in Monterrey, Nuevo León, Mexico, we promote comprehensive development programs for our collab- orators that include food, medical care, recreation and financial services, which allows us to foster a culture of work and savings to support family stability. SCyF has been in operation for more than 100 years and continues to grow each year. Similarly, OXXO Colombia offers a program that promotes saving habits and proper financial management. This program positively impacts our employees and their families’ wellbeing by helping them to improve their financial education knowledge and tools to enhance their possibilities to acquire and or improve their own home. Protecting Physical, Mental & Emotional Health At FEMSA, human capital is our greatest asset and we put the safety and integrity of our employees above any economic and operational considerations. We create wellness and quality of life programs, processes and facilities that ensure healthy and safe work environments while fostering a culture of preventative self-care for balanced lifestyles. This includes creative ways to reduce and prevent physical, mental and emotional illnesses, as well as arranging access to appropriate health services and development support. For example, FEMSA Health promotes its wellness program, VIVE 360, to help collaborators prioritize the important balance between their personal, family and work lives. A series of people-first policies, talent mapping agendas, 47 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 work-life balance programs, attractive benefits and culture building activities across five dimensions of wellbeing are designed to protect and build up our collaborators. From flexible working hours, lines of credit and volunteering opportunities to career development tools and special medical benefits, Farmacias YZA is strengthening its em- ployee retention rates and increasingly regarded as an employer of choice. “The place where I want to be!” VIVE 360 is Farmacia YZA’s comprehensive wellbeing program that puts its people first. Career Development and Continuous Learning We promote a culture of continuous learning and development among our team members and their families by offering trainings to improve or acquire knowledge and skills. Our corporate goal is to have 8.7 million hours of annual training for collaborators. In 2022, more than 7 million hours of training were completed by employees on topics including human rights, sustainability, health & safety, culture & leadership, ethics & compliance and technical knowl- edge. Taking advantage of individual evaluation systems, we recognize areas of opportunity and promote our team members’ professional development within the organization. More than 13 years ago, we launched Instituto OXXO, a learning platform of higher education developed in conjunction with the Secretary of Education of the state of Nuevo León, Mexico. Since its inception, the Institute has provided full scholarships to employees who study the three-year the Bachelor of Commercial Business Management degree, which is offered completely online. OXXO Institute works through the D2L Brightspace platform, which has a system that allows students to connect from a computer, tablet or cell phone. In addition, it has the advantage of being used with or without internet access and is available 24 hours a day, 365 days a year so employees can study at times convenient for them. In 2019, the program became available to employees of all FEMSA business units and currently has more than 1,000 active students. The teaching staff includes more than 100 tutors who are also collaborators from different business units of FEMSA. In 2022, the 74 students who began their studies in 2019 graduated from the program with a great sense of accomplishment. OXXO Institute not only offers FEMSA employees the benefit of having a university degree, but also offers an educational experience linked to personal and professional development within the company. Since the beginning of the program, more than 470 students have graduated, of which approximately 278 have achieved a promotion. Additionally, FEMSA also offers employees the LinkedIn Learning Content Platform, which provides more than 16,000 pieces of educational content developed by industry experts that allow the employees to choose what and when to learn, depending on their professional and personal needs and according to their Development Goals. In 2022, we invested more than US$ 14.8 million for our more than 354,000 employees to strengthen their understanding of FEMSA’s self- development culture and of our Learning Model. Promoting Values & Citizenship We promote the development of strong social, civic and family relationships through initiatives that foster family integration, citizen participation and a culture of volunteerism in harmony with the environment and the community. During 2022, more than 100,000 employees across our business units cumulatively spent approximately 736,000 total hours volunteering at one or more of 2,600 activities related to community support, education, environmental sustainability or health & wellbeing. We also welcomed more than 19,000 community members or family members of employees to join us in these activities. 48 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Ps. 833.0 million invested in Our Community pillar our community We are committed to contributing to the economic and social development of the communities in which we operate, creating value by generating prosperity and wellbeing. Our efforts are aligned to the UN SDGs and cover three priority topics: Community Wellbeing, Economic Development and Sustainable Sourcing. Sustainability Highlights 2022 3.7 million direct beneficiaries of community programs Ps. +91.0 million raised through the “Redondeo” and “Dona tu Vuelto” programs and donated to 366 organizations +2,600 activities of volunteering For detailed 2022 data related to Our Community, please see Key ESG Data in the Appendix. 766 associations, institutions, companies and organizations with whom we have a membership or association. 690 community actions completed +650,000 units of medications and health products donated to communities in need, equivalent to Ps. +20.0 million. 49 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 OXXO has more than 25 own brands, ranging from La Esquina peanuts and Bitz snacks that are part of our affordable products with nutritional and health-oriented attributes. impact approach to include contributing to the health and wellbeing of communities and providing accessibility to health services and products. We do this through actions such as the donation of medicines, our Loyalty Program, health programs and health councils. Community Wellbeing To drive the wellbeing of the communities where we operate, we focus on promoting healthy lifestyles, contributing to safe surroundings, supporting clean neighborhoods and engaging locally. Our corporate goal is to reach 20 million beneficiaries of our community wellbeing initiatives by 2030. As of 2022, 690 community actions were completed benefiting more than 3.7 million beneficiaries. Since 2021 we have reached more than 6.7 million beneficiaries of community programs. Supporting Healthy Lifestyles Across FEMSA, we have portfolios of affordable products with nutritional and health-oriented attributes. We give access to our products’ nutritional information to our customers and consumers, including ingredient lists. We also support and comply with all labeling requirements for packaged foods and beverages in the markets where we operate, such as the NOM-051 General Specifications for Labeling of Prepackaged Food and Non- Alcoholic Beverages in Mexico. In addition to the importance of proper labeling and driving greater consumer awareness, we also actively work to assess and identify opportunities where we can improve the nutritional profiles of products. For example, in the Proximity Division, OXXO has more than 25 own brands, ranging from La Esquina peanuts and Bitz snacks to Vitawa alkaline water. In 2022, we took steps to assess our food and beverage portfolio of own brands, identify potential nutritional excesses and proactively work with our suppliers to initiate reformulation plans as appropriate, which we will continue to make progress on in 2023. Coca- Cola FEMSA also continues to adapt to evolving consumer preferences by driving the growth of the no- and low-sugar portfolio of sparkling beverages. We have zero tolerance for the sale and marketing of products to restricted populations, including the sale of alcoholic or tobacco products to minors or the sale of medicines without prescriptions. We also participate in efforts to promote responsible advertising and promotion to minors. For example, as part of Coca-Cola FEMSA’s commitment to the wellbeing of consumers and customers, all advertising adheres to The Coca-Cola Company’s Responsible Marketing Policy and Global School Beverage Guidelines, and we do not market products in channels with an audience predominantly of children under age 13. Finally, FEMSA Health develops and promotes access to low-cost and generic medicines, as well as quality medical services. We have defined our social 50 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Contributing to Safe Surroundings We have points of sale, facilities and work centers that help promote safe environments in the communities where we operate, including ensuring areas of public access are well-lit areas with security cameras. We invest in technology and develop practices, protocols and management systems to ensure that our operation’s vehicles travel safely on public roads. At Solistica, for example, there is a growing commitment to safety processes and the prevention of road and industrial accidents, proven through the policy, “ABSOLUTE ZERO IS POSSIBLE,” which guides our transport operators to exercise their maximum levels of commitment, self-care and judicious adoption of all company standards on excellence in road safety. Solistica Panama and Coca-Cola FEMSA proved that “zero” is possible, celebrating twelve consecutive years in 2022 without a road-related fatality among transport operators. Solistica was also pleased to participate this year in the “Companies Allied for Road Safety” initiative sponsored by the Secretaría de Movilidad (SEMOVI) in Mexico City, where nearly 150 transport operators from Solistica were trained through a series of road safety awareness and education workshops. SEMOVI’s initiative seeks to strengthen road safety and reduce traffic incidents in Mexico City with the goal of preventing traffic incidents and taking care of the lives of their employees and the public. Solistica will continue to expand these beneficial training opportunities with SEMOVI in 2023 and beyond, which have been very well received by operators. Clean Communities To contribute to the environmental cleanliness of the communities where we operate, we promote a circular economy mindset and a culture of responsible waste collection and management. As part of this commitment, at the end of 2022, Coca-Cola FEMSA, together with leading plastic packaging solutions provider, ALPLA, inaugurated the first supply center in Veracruz, Mexico that, beginning in the first quarter of 2023, will collect and send up to 2,000 tonnes of PET per year to the Planta Nueva Ecología de Tabasco (“PLANETA”) recycling complex in Tabasco. We opened five new collection centers, so we can increase recycling in the southeast region of the country. We also aligned with small customers, as well as with larger chains, to collect waste at their stores through “Mi Tienda sin Residuos” (“my zero waste shop”) program. In addition to the benefits for the circular economy, another strategic objective of PLANETA and its supplier network is to promote community wellbeing and economic development by formalizing the collector partners (suppliers) through capacity building, raising collective awareness and creating formal and fair jobs. For more on the circular economy, see pages 63 and 70. 51 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Engaging Local Communities In addition to serving our communities through the portfolio of products and services we offer, an important part of our social license to operate is based on the relationships we build with our neighbors. In 2015, FEMSA and our business units developed the MARRCO21 model to understand how our opera- tions impact the immediate commu- nity, and, in turn, how the community impacts our workplaces. MARRCO The MARRCO model comprises five steps (see figure) for managing risks and community engagement, which helps to guide and inform our value-generating engagement activities and programs, including volunteering or the donation of medicines, food, fuel and supplies. The methodology aims to build and maintain effective relations with local communities by fostering dialogue and mutually beneficial collaboration opportunities. It is currently deployed in Coca-Cola FEMSA, OXXO (in Mexico, Colombia, Chile and Peru), Tiendas Bara, OXXO GAS, Farmacias YZA, Imbera and PTM. For example, in 2022, FEMSA Health expanded the use of MARRCO from Mexico to its other territories of operation (Ecuador, Colombia and Chile) to guide its vision of being a health ally for the wellbeing of communities. The methodology was used to strategically identify and prioritize the best collaboration initiatives to achieve this, such as donations of medicines, products with a cause and free consultations (see pages 52-53), among others. Similarly, Coca-Cola FEMSA adapted and deployed a customized version of the methodology in select critical sites according to community risks. In this way, MARRCO operates as the “hub” that connects and articulates the different sections of responsibility between FEMSA, Coca-Cola FEMSA Corporate, operations, plants and distribution centers, based on four deliverables: leadership and projection; reputation and positioning; operational continuity; and social license. Looking ahead, Coca-Cola FEMSA will expand the implementation of MARRCO to additional sites. 1 Identify and understand DIALOGUE < T S U R T < I N O T A R O B A L L O M E N T < C MARRCO C O M M I T 5 Learn and improve Business abilities, resources and objectives. Needs, resources and commitments of the business with the community. Community features, needs and priorities. 2 Analyse and plan Analyzes the risks and opportunities for the design of the community engagement activities and programs. 3 Agree and act Implies listening and building with the community commitments and social programs of common interest. 4 Evaluate and measure Evaluates and measures the impact of communi- ty engagement activities. Allows the strengthening and development of abilities through the identification of opportunity areas, best practices and learning exchange. 21 La Metodología de Atención a Riesgos y Relacionamiento Comunitario (The Risk Attention and Community Relations Methodology) 52 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Engagement Programs We know mobility and transportation are vital for many nonprofits and institutions that help the community. For the third consecutive year, OXXO GAS ran the Litros con Causa (Liters with a Cause) program, which to date has delivered more than 100,000 liters of fuel and helped more than 540,000 people in the communities where we operate. During 2022, more than 36,000 liters of fuel was donated to local fire departments, and we also launched a call to all civil organizations in Nuevo León interested in receiving this kind of aid. Hundreds of organizations petitioned according to certain criteria, and two from the health sector were selected to receive a total of 2,500 liters of fuel: Cruz Rosa, an organization that supports low-income women with cancer and Sana en Casa, an organization that supports families who have a sick person or someone with a disability at home. The fuel donations to these two organizations were enough to guarantee the mobility of the patients in need for up to three months. In our retail businesses we also have various opportunities for our customers to join in the support of their communities through donation campaigns. For example: Donate Your Change: In our Retail business, the “Redondeo” and “Dona tu Vuelto” (Donate your Change) programs have been extremely successful in raising awareness and directing funds to institutions that work for the benefit of society. Since the program began in 2002, Ps. 1.5 billion have been donated by retail customers to more than 3,800 organizations. In 2022, OXXO and Tiendas Bara (our discount chain for the home pantry) in Mexico collected Ps. 84.9 million and donated it to 349 organizations; Farmacias YZA in Mexico channeled Ps. 4.1 million to 14 local institutions; and Maicao and Farmacias Cruz Verde in Chile collected Ps. 74,000 for two organizations. Product with a Cause: Through a new “Producto con Causa” (Product with a Cause) campaign this year, when Farmacias YZA customers in Mexico purchased eligibly marked products, either a percentage of the sales were donated to support a social cause, or, for each product purchased, an equal one was donated to the community. We were pleased to have five “own brand” products participate in this initiative, and at the end of first month of the pilot program in two locations in Mexico, nearly 22,000 health and wellness products and more than Ps. 600,000 were donated to our partner nonprofit associations. Donate and Help: Our Fybeca and SanaSana drugstores in Ecuador partnered with nonprofit medical service organization, Operación Sonrisa (Operation Smile), to activate a “Donate and Help” program inviting customers at all our points of sale nationwide to make monetary donations toward transformational surgeries for children living with cleft lip and palate. In the first year of the program, we donated supplies and made a monetary contribution of nearly US$ 138,000.0 to Operación Sonrisa, which was enough to fund free surgeries for more than 200 children, as well as cover additional services in other specialties such as pediatrics, speech therapy, nursing, psychology and dentistry. 53 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Economic Development More than 6,700 free consultations were provided to community members by Farmacias YZA healthcare professionals as part of a pilot program for the prevention and treatment of illnesses and/or the early detection of certain health conditions. We are working to create economic value for our retail customers in the communities where we operate. This includes supporting the small and mid-size companies in our value chain, purchasing from local suppliers and promoting entrepreneurship by investing in start-ups. Economic, Labor, Financial & Digital Inclusion In line with the capabilities of each busi- ness, we contribute to economic, labor, financial and digital inclusion in the communities where we operate through our actions, products and services. For example, to reach people of diverse socioeconomic backgrounds who may have limited or no access to healthcare guidance, products or services, FEMSA Health sponsors community programs that leverage our products and medica- tions, pharmaceutical intellectual capital and our installed capacity of medical offices. In 2022, FEMSA Health launched the following programs: Product donations: FEMSA Health recovered and donated more than 650,000 units of medications and other products to communities in need, an amount equivalent to more than Ps. 20.0 million. Of this total, Farmacias YZA in Mexico donated more than 240,000 units; Socofar in Chile donated more than 278,000 units; Cruz Verde in in Colombia donated more than 111,000 units; and Corporación GPF in in Ecuador donated more than 21,000 units. Free consultations: More than 6,700 free consultations were provided to community members by Farmacias YZA healthcare professionals as part of a pilot program for the prevention and treatment of illnesses and/or the early detection of certain health conditions, such as cardiovascular disease. In addition to the wellbeing benefits this provides to our customers, the program also drives foot traffic to our stores and increases the volume of patients in our clinic database, where we can support them in other ways, such as through our free loyalty program that offers discounts on health and wellness products. Juntos Hacemos +: In Colombia, our Cruz Verde drugstores and pharmacies launched a new program called “Juntos Hacemos +” to educate customers on the proper use of medications and on issues related to their specific pathology. The complimentary program began with activities focused on diabetes patients and has reached at least 100 people monthly since the start of the pilot. 54 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 OXXO PREMIA reached 22.3 million total users in 2022, a more than 600% increase from the 3 million accounts that had been created as of the end of the prior year. On the digital front, FEMSA’s Proximity and Digital@FEMSA divisions are including consumers at the center of their business strategy and bringing secure financial services to traditionally underserved populations by leveraging mobile device innovation and technology. For example: Spin by OXXO: With our strengths in correspondent banking and financial services, as well as a growing prowess in the digital world, in 2022, we continued to expand the reach of Spin by OXXO,22 our digital wallet first announced in 2021 that digitally offers a variety of financial services, including sending and receiving funds through a cell phone; accepting deposits, withdrawals and balance inquiries at more than 21,000 OXXO stores; facilitating purchases through a VISA card; and completing SPEI® transfers and transfers between app users. In 2022, Spin by OXXO received its definitive authorization to operate as a financial technology institution in Mexico – a relevant milestone that will allow us to continue pursuing our financial inclusion ambitions. As of the end of 2022, we have reached 3.9 million Spin by OXXO active users. Nearly 54% of Spin by OXXO’s customers are women, a group traditionally underserved and with more limited access to financial products or services. OXXO PREMIA: Our loyalty program in Mexico, OXXO PREMIA, continued to grow during 2022 following improvements to the app’s user experience and functionality. By the end of the year, we had reached 12.9 million active users, and we are continuing to focus on generating more participation and understanding our most frequent users. OXXO PREMIA operates either as a stand-alone program or in tandem with Spin by OXXO, thanks to the option offered to Spin by OXXO customers to enroll in OXXO PREMIA when opening their account. Members receive benefits such as OXXO PREMIA points (earned from purchases), SellOXXOs (free products when reaching a certain goal), and other exclusive promotions. 22 Spin by OXXO operates through Compropago S.A. de C.V. I.F.P.E. SME Development & Local Procurement Another way we support the economic development of our communities is through the development and support of our suppliers. This may include forming alliances on sustainability actions with suppliers and business partners for things like PET collection drives, Product with a Cause campaigns or tests for changing packaging. We also work on initiatives for the development and professionalization of the informal or non-institutionalized segments of the industries in which we participate. For example, we strive to support small and mid-size enterprise (SME) customers in the Coca-Cola FEMSA value chain through point of sale and inventory management strategies, as well as financing mechanisms and crowdfunding to install renewable solar energy systems on storefronts. Through a program launched in Mexico in 2022 by Coca-Cola FEMSA in collaboration with a crowdfunding platform and the German Cooperation for Sustainable Development (GIZ), more than 30 photovoltaic systems were developed using an innovative crowdfunding financing mechanism. By consuming renewable electricity, the program not only reduces SMEs’ greenhouse gas emissions but also their operating costs by as much as 50-70%. 55 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Welcoming Local Suppliers to OXXO Shelves OXXO is always looking to expand the diversity and quality of products we offer, and it is a bonus when we can bring more flavors of the local community to our convenience store shelves. Mieles Don Jorge, led by Vianey Guzmán and Enrique Moscoso - is a small, family-owned honey business that began with one product at OXXO – 100% natural honey – and we now offer six additional products from the brand, including honey-sweetened cakes, butter and canned chili peppers. As of the end of 2022, OXXO customers can find Mieles Don Jorge products at OXXO stores in Tabasco, Chiapas and Ciudad del Carmen, Mexico. “Our sales have grown exponentially since receiving the opportunity to register as a supplier to OXXO. This means we have been able to expand our business, increase our profitability and grow our staff by more than five times – bringing those economic benefits back to the families and communities of our employees.” Vianey Guzmán Quijano, Mieles Don Jorge sales manager and daughter of the late founder, Jorge Guzmán. READ MORE CASES 1 2 3 4 Encouraging Entrepreneurship We contribute to the development of the entrepreneurial ecosystem in our geographies through investments in start-ups and participation in entre- preneurship programs. Through our corporate venture capital (VC) firm, FEMSA Ventures, and in collaboration with top VC firms across Latin America, we are on a quest to disrupt industries and transform people’s lives by finding investment opportunities to support world-class entrepreneurs by scaling up innovative ideas in ways that successfully leverage FEMSA business platforms. Creating Value from Food Waste One of FEMSA Ventures’ direct investments in 2022 was to CoreZero, an emerging climate-tech Platform as a Service that is creating value from waste by connecting to an organization’s operations and measuring the impact of its waste minimization initiatives. Using a proprietary methodology, CoreZero assesses a project’s potential in real time and generates carbon credits – or verifiable emission reductions from certified projects that avoid greenhouse gas emissions (GHGs) – creating an incremental financial incentive to scale up climate action. In 2022, CoreZero closed a US$ 7 million pre-series A fundraising round, and FEMSA Ventures was excited to participate alongside the Inter-American Development Bank and other supporters. With the funds, they plan to expand their team, grow their business and update their platform to further improve seamless automations. One of CoreZero’s successful agreements during the year was with the non-profit, Red de Bancos de Alimentos de México (Red BAMX), made up of 53 food banks across Mexico which rescues food (before it becomes waste) and redirects it to families, communities and institutions in need. Our OXXO Distribution Centers (CEDIS) have been working with Red BAMX weekly since 2010, collecting and donating surplus and undamaged products from OXXO stores to populations in need, including groceries, drinks, fast food and dairy products. In 2022 more than 1,170 tonnes of food from OXXO were redirected to Red BAMX, benefiting more than 64,000 people. Now, as OXXO and Red BAMX continue to work together to address the food gap in vulnerable communities, with the help of CoreZero, they will also be helping to combat climate change by avoiding the GHGs associated with food waste. Once the carbon credits are calculated and independently verified based on the amount of food rescued, CoreZero sells the credits and splits the profit with the food bank, creating financial resources that can be redirected back into fighting hunger. Already in 2022, CoreZero has created 225,000 carbon credits with its partners, and is on track to generate at least four million more over the next ten years. 56 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Sustainable Sourcing At FEMSA, we strive to work with our suppliers to reduce the environmental and social impacts generated by our commercial interactions and strengthen the sustainability of our entire value chain. This includes engaging with our suppliers and business partners on sus- tainability issues so that we can identify and share best practices. In 2022, we launched a Sustainable Sourcing Committee with the purpose of achieving a convergence of economic, social and environmental value by promoting the application of sustainability criteria and practices within FEMSA’s procurement function. During the year, the Committee helped to further define FEMSA’s ambition to “buy local,” that is, to increase the percentage of purchases from local suppliers for our procurement needs. The rationale behind this objective is to not only contribute to the economic and social development of the communities where we operate, but to also minimize the environmental impact of merchandise transportation. With input from the Sustainable Sourcing Committee, our 2030 corporate goal is to achieve and maintain a >90% percentage of purchases from local suppliers in all countries where we operate, triggering actions that allow us to advance our purpose as a sustainable procurer of goods and services. A purchase from a supplier is considered “local” when the work center that makes the purchase and the seller are in the same country (i.e., same tax registry). We also take steps to ensure that all our suppliers operate with ethics and integrity, based on responsible business policies, principles and processes that comply with applicable legislation and best sustainability practices. FEMSA’s Supplier Guiding Principles were updated in 2022 based on FEMSA’s Code of Ethics and related corporate policies. They contain the minimum expectations that we require of our suppliers to manage in areas of Human and Labor Rights, Sustainability, Culture of Lawfulness and Information Security. The Guiding Principles are also deployed in the procurement teams of all business units and utilized as a critical supplier engagement tool. In 2022, our business units took steps to help drive increased awareness of the responsibilities of all current and new suppliers and to find opportunities to improve compliance with the necessary methods and practices outlined in the Guiding Principles. 57 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 For example: Coca-Cola FEMSA continued to uphold a robust supplier risk management process, including assessing all suppliers for compliance with social and human rights regulations using the EcoVadis platform, as well as Ikus, an agency that leads supplier evaluations, qualifications and trainings. FEMSA Health classified critical suppliers, conducted a survey to assess and improve key criteria and is working toward registering all existing and new suppliers with signed acknowledgements of the Supplier Guiding Principles. Solistica disseminated updated commitment letters to suppliers and added more specific clauses to purchase orders in line with the Supplier Guiding Principles and Code of Ethics to ensure the clear communication and deployment of expectations. Nearly 800 suppliers received approximately 6,300 purchase orders that incorporated the Guiding Principles. Imbera distributed sustainability questionnaires, conducted audits, launched action plans and closed related findings. This work complemented its annual workshop with suppliers to discuss objectives, evaluation processes and new sustainable projects and ideas. Dressing for Success in Sustainability In partnership with a key supplier over several years of designing and testing, we increased the percentage of recycled PET fiber in the Proximity Division’s OXXO store employee uniforms from 50% (as of 2020) to a full 100%, without increasing the cost of the product. Each garment upcycles the equivalent of seven 1-liter PET bottles that would otherwise be discarded as waste in our environment. The manufacturer of the new design also saves on natural resources, including 20% greater efficiency in water consumption and 37% greater efficiency in carbon footprint. READ MORE CASES 1 2 3 4 58 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 our planet We are committed to contributing to the care of the world around us, minimizing the environmental impacts of our operations throughout the value chain and those of our products and services. Ps. 7,100.0 million invested in Our Planet pillar Our efforts are aligned to the UN SDGs and cover three priority topics: Climate Action, Water Management and Circular Economy. Sustainability Highlights 2022 68.7% of total operational waste diverted from landfills 1st study of climate-related risks & opportunities in alignment with TCFD recommendations 58.0% of FEMSA’s total electricity consumption from renewable sources 25.0% of raw materials used in products and packaging of recycled origin 1.46 liters of water per liter of beverage produced by Coca-Cola FEMSA 81.0% progress toward our goal of reaching neutral water balance in all our operations +15,600 sites powered with renewable energy 27.0% recycled PET used on average across Coca-Cola FEMSA’s plastic bottle presentations For detailed 2022 data related to Our Planet, please see Key ESG Data in the Appendix. 59 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Climate Action We recognize that climate change is one of the most important sustainable development challenges facing the world and we are committed to supporting its mitigation by avoiding and reducing the emissions of greenhouse gases (GHGs) into the atmosphere. To do this, we will reduce GHGs generated by our operations and supply chains, focus on expanding the use of renewable energy, strengthen the sustainability of our transportation fleet and develop sustainable products and services. CO2e Emissions Reduction Across FEMSA’s operations and supply chains, we are working to reduce our Scope 1, 2 and 3 emissions and pro- mote energy efficiency. For example, at OXXO, we have a comprehensive program that allows us to save energy in offices, distribution centers (CEDIS) and stores through advances in technology, including solar control films and insulation, among other technologies. In OXXO Mexico stores, as of 2022, we have reduced our total energy use by 38% below 2009 levels. In June 2020, Coca-Cola FEMSA became the first Mexican company and the third in Latin America to obtain approval from the Science Based Targets initiative (SBTi) for its 2030 GHG emissions reduction goals. As of 2022, we remain on track to achieving our 2030 targets (see table). Coca-Cola FEMSA Performance on SBT23 Reduce absolute scope 1 and 2 GHG emissions from our operations by 50% by 2030, compared with a 2015 baseline year Reduce absolute scope 3 GHG emissions from the value chain24 by 20% by 2030 compared with a 2015 baseline year Achieve 100% renewable electricity for our operations by 2030 2021 28.0% 14.0% 53.0% As a next step, FEMSA is currently working to establish SBTi-approved emissions reduction targets for all FEMSA business units individually. As part of this process, during 2022, each of FEMSA’s business units com- pleted a carbon footprint inventory and took other steps to prepare for defining their own science-based targets. In 2023, we aim to work with SBTi to final- ize the approvals for proposed targets for each business unit. For more information on FEMSA’s analysis of risks and opportunities related to climate change, see page 131. 23 Performance reflects all our operations and is calculated based on the SBTi. 24 Covering purchased goods and services and upstream transportation and distribution. 2022 29.0% 17.0% 66.0% 2030 Goal 50.0% 20.0% 100.0% 60 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Renewable Energy Use Sustainable Mobility FEMSA’s sustainability strategy is focused on the efficient use of energy and the use of renewable sources. Since 2015, we have significantly increased renewable energy use across all our business units, primarily through strategic partnerships with wind farms in Mexico. Our corporate goal is to reach 85% renewable energy use across our operations by 2030, and as of 2022, 58% of FEMSA’s total electricity consumption comes from renewable sources. This includes 15,531 sites in Mexico that are powered with renewable energy. Approximately 61% of our total electricity needs in Mexico are covered by renewable sources, representing 591,317 tonnes of CO2e avoided. We know that to reach our ambitious target of 85%, increased efforts will be required, given the complexity of our business and our geographic footprint. Regulatory uncertainty and limitations in Mexico and other countries also pose a challenge to long-term planning around the private procurement of renewable energy. For example, Proximity, which represents 69% of FEMSA’s total electricity consumption, is a highly dispersed buyer of electricity. For more information, please visit https://energia.femsa.com/ We incorporate the use of electric vehicles and other new technologies in our operations’ fleets and, whenever possible, we use renewable energy as its energy source. We also promote efficiency in the operation of our utility and distribution vehicle fleets by optimizing routes, training operators and incorporating new technologies. For example: Through Coca-Cola FEMSA’s Sustainable Mobility Strategy, we aim to reduce the impact of our fleet on the CO2e emissions of our supply chain (including primary and secondary distribution trucks), and to position ourselves as an industry leader in Latin America in terms of vehicle efficiency, environmental stewardship and safety. Aligned with this strategy, our projects are to: transition of own transport fleet to electric fleet efficiency, prioritizing areas with restricted mobility and achieve a 25% increase in efficiency in fuel consumption (MJ)/kilometers of distance covered (km). In 2022, we expanded our fleet of electric vehicles to a total of 482 vehicles. At Solistica, we are continually working to reduce the carbon footprint of Transportation Operations (LTL) through more efficient vehicles, including a fleet of twelve vehicles that began operating in 2022 and run on 100% natural gas, helping to avoid an estimated +80 tonnes of CO2e as of the end of 2022. Solistica has also launched two models of electric cargo tricycles, which we use for last mile delivery in Bogotá, Colombia, in search of having vehicles with low or zero emissions. The environmental benefits of using seven tricycles for approximately 16 months (July 2021-November 2022) are estimated to be 35.4 tonnes of CO2e avoided, 8,833 liters of diesel saved and 96,179 grams of particulate matter (PM 2.5) avoided. In addition to the emissions avoided, these bikes also provide multiple social benefits, including promoting the culture of sustainable transport and helping to improve the city’s air quality. Similarly, in Brazil, we operate electric vehicles and continuously monitor ways to consolidate operational loads as much as possible. In our Fuel business, we serve 7,000 B2B clients with more than 70,000 vehicle units, representing approximately 20% of total sales. To support these clients better, we began the implementation of our own fleet card, “EOX,” which provides a comprehensive technological solution in a single administrative platform, so clients who manage the fuel of their fleets can do so in the most efficient ways possible. The program drives efficiencies through cargo control, security and telemetry all in the same solution. 61 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Sustainable Products & Services We strive to contribute to climate change mitigation efforts by leveraging our portfolio of products and services to support innovative, technological and sustainable solutions. For example, in 2022, OXXO and Tecnológico de Monterrey created an alliance to contribute to sustainable waste management, following research on opportunities to transition from petroleum-derived plastics to bioplastics. As a first project, in collaboration with OXXO’s packaging suppliers, a packaging change test was developed for De la Esquina peanuts, OXXO’s own brand. In the prototype, an additive was added to the bioriented polypropylene to speed up the biodegradation time and reduce the environmental impact of conventional plastic. The developed prototype has shown excellent physicochemical properties in shelf tests, similar to those of conventional packaging, and we will continue our collaborations to work toward a final commercialization of this sustainable product solution in the future. Other examples of sustainable products from across FEMSA include: Coca-Cola FEMSA strives to lighten the weight of packages and utilize a greater percentage of recycled resin (rPET) in packaging (learn more on page 64). Imbera continues to offer a low-carbon cooler solutions portfolio (learn more on page 65). PTM products are designed to be 100% recyclable and to have greater durability and resistance, allowing the life cycle of some elements to be longer (learn more on page 66). Helping Customers Reach their Green Cleaning Goals The Envoy Solutions company, WAXIE Sanitary Supply, has developed Waxie GPS® Green Partner SupportTM as a platform for customers who would like to implement a green cleaning program in alignment with their own sustainability goals. The customized program combines third-party certified low environmental impact cleaning products with training and consultative expertise on effective cleaning procedures presented by our WAXIE employees who are LEED® Accredited Professionals and CIMS-GB ISSA Certification Experts. 62 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Water Management We are committed to using water efficiently as it is not only an indispensable element for our operations as a business, but for the socioeconomic development and wellbeing of communities. Optimizing Water Efficiency We have best-in-class practices, supported by action plans to optimize water efficiency in our operations, as well as promote the efficient use of water in our supply chain. For example, in Farmacias YZA in Mexico, to drive greater empathic connections between our stores, the community and the environment, we installed 45 condensate water recovery systems through which we can recover water from coolers to irrigate green areas that are near our points of sale. Thanks to this effort, in 2022 we were able to reduce the water consumption from municipal water supplies by more than 985,000 liters. Contributing to Water Accessibility, Sanitation & Hygiene (WASH) Advancing Water Security Our WASH strategy is based on improving access to safe drinking water. For 2023 our ambition is to work with our communities on WASH initiatives and develop access projects. As an example of this work, in alliance with FEMSA Foundation, The Nature Conservancy (TNC, the Inter-American Development Bank (IDB), and the Global Environment Facility (GEF) on the Latin American Water Funds Partnership. Together, we have developed 26 water funds, of which eight are located within our countries of operation. Our corporate goal is to achieve neutral water balance in all our operations by 2030, and as of 2022, we have reached 81% toward this goal. During the year we established a methodology to assess and quantify the total water replenishment projects and activities being carried out by business units across FEMSA. This information will guide our actions and next steps to work toward our goal of achieving neutral water balance in our operations. Coca-Cola FEMSA is also committed to using water more efficiently and to further protect water security in the ter- ritories where we operate. This includes replenishing more than +100% of the water utilized to produce beverages across our bottling operations, focusing on those determined to have high hydro- logical stress. Currently 100% of water used to produce Coca-Cola FEMSA’s beverages is returned to the environ- ment in main markets, and by 2030, Coca-Cola FEMSA will continue to return to the environment the same amount, or more, of water used in the production of beverages. As of 2022, Coca-Cola FEMSA achieved a water-use ratio of 1.46 per liter of beverage produced, down from 1.47 in 2021 and 1.49 liters in 2020. For more information on Coca-Cola FEMSA’s progress on the 2024 and 2026 Sustainable Performance Targets associated with its sustainability-linked bond, please see page 37. For more information about Water Security initiatives, please see page 68. 63 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Circular Economy To support the environmental health of our communities, FEMSA’s sustainability strategy includes a focus on the adoption and promotion of the principles of the circular economy, especially related to waste management and recycling. Reducing & Eliminating Operational Waste We ensure proper waste management in our operations and aim to prevent waste from reaching sanitary landfills. We also seek the elimination of single- use non-recyclable plastic from our operations. Our corporate goal is to achieve 100% diversion of operational waste from landfills by 2030. We also have a Sustainability Performance Target (SPT) to reach 65% diversion of operational waste from landfills by 2025 as part of our Sustainability-Linked Bond (for more information on our SPTs, please see page 134). As of 2022, we have reached 68.7% of total operational waste diverted from landfills. In addition, 100% of our beverage manufacturing plants in Mexico have achieved Zero Waste to Landfill certification. Rewards for Recycling In alliance with our start-up partner, Lealtad Verde, in 2022 we installed automated biorecycling machines in 30 OXXO stores in Mexico City and Monterrey as a pilot test to help promote recycling and the importance of the circular economy in Mexico. The machines accept PET, HDPE and aluminum cans and have specialized sensors to detect any product entered. The machines have a capacity of up to 30 kilograms of urban solid waste and crush each piece to optimize the available remaining space within the machine. To incentivize participation, OXXO offers a reward program when users responsibly deposit their bottles and cans into the biorecycling machines. To earn points, users can download the Lealtad Verde app, create an account and begin collecting points by bringing their waste to the machines to recycle. Credits accumulate points to the user’s account, which can be redeemed for various OXXO promotions. We plan to utilize the insights from this initial pilot program to expand to more areas over time and create an even greater positive impact. OXXO offers a reward program when users responsibly deposit their bottles and cans into the biorecycling machines in alliance with Lealtad Verde. 64 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Through a variety of collective and individual actions, Coca-Cola FEMSA collected more than 80,000 tonnes of PET. Sustainable Packaging We seek to ensure that our packaging uses recycled materials and is recyclable at the end of its useful life. We also promote the elimination, reduction, recyclability and recycled content in supplier packaging. For example: At Coca-Cola FEMSA, we continue to work closely with our primary goods and packaging suppliers to reduce their emissions. We also strive to lighten the weight of our packages and utilize a greater percentage of recycled resin (rPET) in our packaging. In alignment with FEMSA’s goal to send zero waste from operations to landfills by 2030, 77% of out bottling plants have earned Zero Waste to Landfill certification in 2022, up from 46% of our bottling plants in 2021. We also remain committed to World Without Waste, the global initiative led by The Coca-Cola Company, which includes two 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% rPET in our bottles. As of 2022, through a variety of collective and individual actions, we collected more than 80,000 tonnes (or approximately 25.7%) of the PET that we put into the market. To ensure adequate collection processes across our regions of operation, we actively collaborate with and participate in various civil and industry alliances, such as ECOCE, a Mexican nonprofit environmental association that promotes waste collection and recycling. In addition, Coca-Cola FEMSA reached a use of recycled PET in its packaging of 27% in 2022. We also recycled 98.5% of our industrial solid waste in 2022. Learn more about our new recycling plant, PLANETA, that is taking a leading role in processing post-consumer PET on page 50. At FEMSA Health, in 2022 we continued advancing our reverse logistics initiative in our operations in Colombia, Ecuador and Mexico, through which we utilize the product delivery trips we make to our branches and pharmacies to also collect packaging, such as cardboard, cooling gels and coolers, and return it to our distribution centers for recycling. This allows us to take advantage of the same transport, generating less CO2e emissions while connecting with the waste recycling process that we have operating in our warehouses. In the same way, if any material is still usable (e.g., cardboard) it is reused in the packaging process. In 2022, in Mexico, more than 2.6 tonnes of cardboard have been recycled. In Colombia, more than 164,800 cardboard boxes, more than 388,500 units of cooling gels, and 16,750 expanded polystyrene coolers have been recovered. Through this initiative, it has been possible to reduce the virgin material used in product packaging in our value chain and contribute to the circular economy. 65 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Product & Service Circularity As part of our commitment to the circular economy, we strive to ensure the collection and recycling of packaging and products with the highest environmental impact are sent to market by our operations. This includes maximizing the collection, content of recycled materials and recyclability of our own-brand products such as PET bottles or coolers at the end of their lifecycle. In 2022, OXXO launched a public PET collection campaign in Acapulco, Oaxaca and Chilpancingo collecting more than two tonnes of PET, thanks to the participation of more than 30,000 people. OXXO Chile launched the Puntos Limpios (Clean Points) initiative in seven of its stores in Santiago. The program seeks to reduce the amount of waste generated and confirm traceability to the recycling plant, with the support of containers that have innovative technology, such as intelligent sensors that report the filling of containers and automate the operational process of removal. Through this initiative, we have been able to collect and recycle 25 tonnes of waste in 2022. OXXO Chile launched the Puntos Limpios (Clean Points) initiative in seven stores in Santiago, collecting and recycling 25 tonnes of waste. Imbera-REPARE: Sustainable Refrigeration Within FEMSA Strategic Businesses, Imbera-REPARE is a world leader in the commercial refrigeration industry, exporting equipment to customers in more than 60 countries from three production facilities in Brazil, Colombia and Mexico. Elsewhere in the FEMSA family, Imbera-REPARE provides refrigeration maintenance and installation services for Torrey, Coca-Cola FEMSA, OXXO and Farmacias YZA. We know that negative impacts of this industry can include waste and material consumption at the raw materials extraction stage for manufacturing; the carbon footprint implications during the use phase of products due to potential refrigerant leakage; and the electronic waste when coolers reach the end of their useful life. With this in mind, and in alignment with FEMSA’s goal to reach zero operational waste to landfill by 2030, Imbera’s commitment to the circular economy is a strategic imperative that ensures our equipment’s design, manufacturing process and final disposal has the least amount of impact on the environment as possible. 66 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 PTM Recycling Leadership 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. During 2022, we recycled more than 38,117 tonnes of plastic out of a total production of 50,413 tonnes. In addition, 81.2% of PTM’s products — including plastic pallets and plastic crates, among others — were made from recycled materials in 2022. We begin at the design phase with our high-performance engineering capabilities, redesigning cooler components based on the principles of circular economy and then re- incorporating them into production. In 2022, for example, we redesigned two cooler components (composed of 80-100% recycled material), which are 100% recoverable and 100% recyclable at the end of their useful life. In addition, we use an energy efficient technology which can reduce the carbon footprint of the equipment by up to 30%, which is the equivalent of saving an average of one tonne of CO2e over the life cycle of a standard chiller. We also use eco-friendly R290 refrigerant and ensure that our certified equipment is labeled as energy efficient according to the countries we operate in (e.g., Energy Star in the United States or FIDE25 in Mexico). At Imbera today, we design equipment with up to 24% recycled material, that, at the end of its useful life, is 99% recyclable or reusable. Our EOS-REPARE facility in San Juan del Río, Querétaro, Mexico, was inaugurated in 2019 and is the first plant in Latin America that, in alliance with Imbera, can recover, repair, redesign, reuse or recycle up to 99% of the parts of refrigerators at the end of their life (and has a target and action plan to achieve 100%). Approximately 53% of the coolers that Coca-Cola FEMSA withdraws from the market are sent to the EOS-REPARE plant for evaluation and use of parts that are still useful. In 2022, we recovered more than 155,000 pieces with Coca-Cola FEMSA that were reused and incorporated into park maintenance and the manufacture of new equipment, thereby avoiding the generation of approximately 247 tonnes of CO2e. In 2022, Imbera, EOS-REPARE, PTM and Coca-Cola FEMSA, among other partners, created a circular economy alliance for the final disposition of coolers, striving to preserve the maximum value of all equipment, components and materials. Through this approach, as of the end of 2022, more than 28,300 pieces of equipment were responsibly processed, avoiding more than 3,000 tonnes of waste to landfill. All the material was either recovered and reconditioned or recycled, with some pieces even being upcycled 25 Fideicomiso para el Ahorro de Energía Eléctrica FIDE directly back into the manufacture of components for new equipment. As part of this process, EOS also ensures the correct disposal of hazardous waste, including complete traceability of all materials. This strategy helps to reduce the generation of waste, the emission of greenhouse gases and the extraction of virgin raw materials from nature. 67 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 FEMSA Foundation FEMSA Foundation26 is our company’s strategic philanthropic arm that invests in projects with a long-term impact. Since its inception 14 years ago, the mission of FEMSA Foundation has been to promote systemic and sustainable solutions to complex social and environmental challenges by making investments that cultivate shared prosperity for both the current and future generations, leaving lasting positive effects on their lives. The work of FEMSA Foundation complements FEMSA’s sustainability strategy through action, while reinforcing the key message to our stakeholders that we are By your side, always. Connect with us: twitter.com/FundacionFEMSA www.facebook.com/FundacionFEMSA www.instagram.com/fundacionfemsa/ www.linkedin.com/company/fundación-femsa/ How we work 1 Ideate science-based solutions 2 Drive collective action 4 Engage & empower communities 3 Monitor & improve programs 1. In each of our initiatives at FEMSA Foundation, we always launch into collaboration with researchers and experts to help us hypothesize the right approach to a problem in a way that is strategic, data-driven and backed by science. Since 2009, we have had 26 programs supported by more than 550 research that includes publications, articles or patents, etc. 2. We then generate a shared vision of a solution through collective action across a multi-sector collaboration platform, inviting a diverse field of supporters who bring their own levels of influence, resources and ideas to the table. We work with more than 750 partner institutions around the world who are aligned with our mission and purpose. 3. Next, we monitor our processes and programs to continuously improve and evolve toward greater levels of disruptive innovation. Leveraging the same level of rigor in key performance metrics that we would use in FEMSA’s own business is vital to ensuring that we are achieving the change we aspire reach to in the region. 4. Finally, we include and engage our communities to learn from each other, co-design projects, and empower participants with the resources they need to become part of the ongoing, science-based solution. We know that a “solution” without community input and buy-in is not a solution at all. We continue this unending cycle to expand our projects and programming annually, striving to reach more beneficiaries and tackle new systemic challenges. 26 FEMSA Foundation is made up of two organizations that share the same purpose: FEMSA Foundation A.C. and Difusión y Fomento Cultural, A.C. 68 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 2022 TOTAL INVESTMENT 20% 2022 80% Partners FEMSA Foundation This work does not come without its challenges, including difficult decisions amidst limited resources, political complexities or unexpected project outcomes. But we believe that the careful and caring way we work with our partners sets us up for the greatest chance of success in overcoming the obstacles we may face. In fact, as a corporate foundation, we believe we are uniquely positioned to analyze risks, completely rethink traditional social, economic and environmental models, and utilize our capacity to make bold, long-term investments in disruptive innovation that can truly move the needle on progress at a faster pace than would be possible through government policy or civil society alone. In short, we’re taking our strategic business knowledge and applying it to social value. During 2022, we benefited more than 1,450 communities in 47 countries. FEMSA Foundation 2022 Contributions Vector27 Water Security Circular Economy Early Childhood Arts & Culture Strategic Donations Total FEMSA Foundation Investments (US$) Total Investment (US$) 2,326,970.0 1,744,199.0 3,329,544.0 158,959.0 233,047.0 7,792,720.0 12,203,349.0 11,769,873.0 12,486,452.0 194,289.0 233,047.0 36,887,011.0 To secure the future we envision, we focus our agenda on four causes that we believe are levers for change: water security, circular economy, early childhood and arts & culture. In 2022, FEMSA Foundation leveraged US$ 3.7 for every dollar invested, securing a total investment of more than US$ 36.0 million. 27 FEMSA Foundation’s investments in the Water Security, Circular Economy and Early Childhood vectors come from FEMSA Foundation A.C., and investments in the Arts & Culture vector comes from the Difusión y Fomento Cultural, A.C. budget. 69 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Water Security Latin America is a region abundant in natural resources, however, the region faces major water challenges since it is unevenly distributed across the territory. In addition, many of the cities in the region, which are amongst the most urbanized, are in places with low water availability. We believe that science and innovation are critical to support the urgent decision-making processes we need to thrive. Thus, FEMSA Foundation works to create and promote projects that promote solutions that satisfy domestic, economic, urban, environmental and resiliency needs so that the communities can achieve water security. Programs include: Alianza Latinoamericana de Fondos de Agua: First launched in 2011, FEMSA Foundation co-founded the Latin American Water Funds Partnership (LAWFP), with the Interamerican Development Bank (IDB), The Nature Conservancy (TNC), The Global Environment Facility (GEF) and the International Climate Initiative (IKI). Together, we have strengthened and further developed the Water Fund Model (WFM), a platform to contribute to water security in Latin America and the Caribbean. To date, 30 Water Funds have been launched in nine countries of the region. This year’s programs reached more than 65,540 new beneficiaries and conserved approximately 115,940 new hectares. Looking ahead, two more Water Funds are expected to launch in 2023. Effects for a Cause: Agents of Change “My family is very proud of me because I’m an agent of change. My children saw a change in me that I sometimes don’t feel, but they do.” Alma Georgina Trejo, Community member and Lazos de Agua beneficiary, San Luis de la Paz, Guanajuato Lazos de Agua: Since 2016, FEMSA Foundation has partnered with One Drop, IDB and The Coca-Cola Foundation to contribute to the empowerment of communities by improving access to water, sanitation and/ or hygiene (WASH), in a sustainable way with an innovative approach that combines the OneDrop’s Model A·B·C for SustainabilityTM (or Access, Behavior change and Capital) and the Social Art for Behavior Change™ (SABC) approach. During 2022, the program benefited more than 55,000 new people from 56 communities of Colombia, Mexico, Nicaragua and Paraguay with sustainable access to WASH, of which approximately 33,000 also participated in SABC activities. Besides this, the program exceeded its total goal by enabling access to safe water and improved sanitation for more than 235,000 people in Colombia, Guatemala, Mexico, Nicaragua and Paraguay. More than 188,000 also participated in SABC, in addition to the access to water and/or improved sanitation program. Looking ahead to 2023, we plan to extend the project to achieve greater scale and impact. Watch more about the stories of the community members who participated in the Guanajuato Project from Lazos de Agua. 70 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Circular Economy According to the World Bank, at least a kilogram of waste is generated per person, per day in our world today – and there are approximately 667 million inhabitants in Latin America alone. In support of the circular economy in regions where we have a presence, we focus on understanding how we can stop the post-consumption leakage of waste into the environment (particularly at the collection and disposal stages) by identifying solutions that support a clean and healthy environment for current and future generations. For example: In 2022, FEMSA Foundation was proud to join with the Sociedad Sostenible A.C. (SOSAC), NOAA, WWF, DistritoTec, Tecnológico de Monterrey, and other institutions, companies, national governments and civil society organizations in the collaborative project, Arroyo Vivo, an inclusive remediation and recycling model for Campana Altamira and DistritoTec in Monterrey, Nuevo León, a community near the Arroyo Seco watercourse. The area has long suffered from illegal waste dumping, which is detrimental to both the ecosystem and the community, and was originally identified for remediation as part of the Alliance for Climate Action Mexico. During 2022, with the participation of more than 430 volunteers, we collected approximately 4.2 tonnes of waste and 87 tonnes of rubble from the river basin. Effects for a Cause: A Future Without Waste Begins Today “When I learned about the Puntos Limpios program, I looked for a way to bring it closer to the community by going beyond just my own neighborhood and getting the students I teach involved – asking them to apply their knowledge about the environment in which we all live.” Filiberto Pat, Sixth Grade Teacher and Community Leader, Tulum, Mexico Watch more about how citizens of Tulum like Filiberto came together in 2022 with their neighbors to ensure the success of the Puntos Limpios Tulum program. Informal workers in the waste management system are often among the most marginalized people in society, yet they play an essential role in recovering waste that would otherwise pollute the environment. In collaboration with the Inclusive Waste Recycling Consortium (iWrc) in Brazil and Colombia, in 2022 we promoted a project to strengthen the inclusiveness of this informal sector by developing and promoting a marketplace that connects them with companies that buy recovered materials at a fair-trade price and by providing training to certify collectors according to the Social Accountability International SA800 Standard. As of 2022, 86 waste- picking cooperatives employing approximately 4,685 waste collectors have the capacity to recover more than 130,000 tonnes of waste from the environment. In cooperation with Tulum Sostenible, among other partners, such as NGOs and members of the public and private sectors, we completed the first phase of the Puntos Limpios Tulum program with the installation of 12 collection points for recyclable materials in 12 neighborhoods in Tulum, Quintana Roo, Mexico. During the year, 4,200 community members were trained in awareness workshops, received educational material and 19 tonnes of waste were collected and recycled. 71 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Early Childhood Our vision is for all children to achieve their maximum developmental potential and transform their communities. To do this, we invest in the physical, cognitive, linguistic and socio-emotional development of Latin American children from gestation through age six. Our strategy is to nurture early childhood solutions in three ways: through caregiving, in our public spaces and communities, and through private and public policies. Nurturing Care Utilizing unique educational tools, content, training and support services, we seek to strengthen the skills and competencies of parents and caregivers to improve their interactions with their children and create the best environment. For example: For the last five years, we have supported ¡Listos a Jugar!, Nurturing Communities a cross-platform educational program created by Sesame Workshop in collaboration with other partners, to promote healthy habits in preschool children related to eating, playing and personal care. To date, the program has been developed and implemented in three phases using digital technology tools to bring useful media content to children in 13 Latin American countries through episodes and songs starring Sesame Street characters. In 2022, as part of a new phase in collaboration with more than 30 experts from four countries, we strengthened the materials to promote positive parenting and further develop key skills. The new campaign reached an estimated twelve million people, including 150 educational centers that serve more than 300,000 children and 700,000 parents and caregivers. We joined with key partners, including Impactus Ventures, United Way, Fundación Mustakis and others, in sponsoring the Childtech Challenge 2022, a competition that recognizes the most promising tech-based solutions for the development of children and adolescents. After reaching 110,000 people on social media and receiving applications from start-up companies in 26 countries, three winners were selected – Beereaders, Storybook and Matific – for the positive educational and socio-emotional impact their tools are making for children across Latin America. Congratulations to these winners, each of whom received up to US$ 30,000 for the implementation of their technology-based projects with high social impact in conjunction with partner organizations. Learn more about Childtech Challenge Since the healthy development of children not only benefits themselves but also the surrounding communities and society at large, we are committed to promoting stimulating public spaces where children can feel safe and spend quality family time. We work closely with 11 national and international partners, including Urban95, a regional platform of early childhood urban planners in Colombia, Guatemala and Chile. Together, we focus our efforts on two types of interventions: structural/ systemic (which requires a greater investment and implementation time) and tactical implementations (quicker to implement with less investment). Using these two levers, we strive for all our projects to feature: participatory design with clear community input; strong governance to encourage effective collaboration; capacity development opportunities to equip local leaders with the tools they need; monitoring and evaluation of results to assess levels of behavior change; and sustainability considerations to ensure safe and green spaces. In 2022, we were pleased to inaugurate 46 new public spaces meeting these criteria, which will serve more than 45,000 children and their families. 72 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Nurturing Policies To influence and position early childhood on both the public and private sector agendas in Latin America in more visible ways, we have two strategies aimed at promoting the understanding and awareness of the importance of putting children at the center of society. 1. Business and Family Platform: With the objective of securing better business practices and investment, we promote collaboration networks between companies to ensure that they recognize early childhood development as a key enabler of the wellbeing of their employees and other communities. In 2022, we worked with key partners to bring expanded private sector awareness and visibility around these issues. For example: Through the Consejo Coordinador Empresarial (CCE or Business Coordinating Council of Mexico) Early Childhood Subcommittee that we launched in 2021 (now made up of 53 companies and 10 member organizations), in 2022 we expanded participation in five different programs to help guide participants on early childhood best practices. In support of CENTRO AMÉRICA CRECE’s mission of improving the quality of early childhood services in Central and South America, we helped them expand programming and outreach opportunities. During 2022, the program reached more than one million people, including children from birth to age six, parents, caregivers and trained professionals through events, workshops and webinars. Pacto por la Primera Infancia: an advocacy initiative made up of more than 470 organizations with the mission of calling on the government to make comprehensive early childhood development a national priority. Through workshops with 80 private leaders, we raised awareness on the importance of investing in early childhood, as supported by research from RedEAmérica, a network with the objective of supporting sustainable communities through the transformation of investments and social practices of companies. Through this research, we highlighted the role that the business sector and private policies can play in the region when we strengthen the ecosystem around early childhood. 2. Public Policies: To position early childhood on the public agenda in Latin America, we advocate through networks, and we seek to train advocates for early childhood by equipping officials and other decision-makers with the right information they need through alliances with governments, academia and civil society. During 2022, we actively participated in the working groups of multiple networks focused on early childhood, including designing policies and initiatives in collaboration with governments. For example: NiñezYA: a coalition of 200 organizations and civil society networks is committed to the wellbeing of children by ensuring the inclusion of children’s rights in government programs. Empresas e Primeira Infância Empresas y Primera Infancia: a platform based in Brazil that enables early childhood support opportunities for its 72 member companies through 600 actionable programs across 10 performance areas. Effects for a Cause: Inspiring Creators of the Future “More than being a teacher, what makes me proud is being able to transform the lives of children. The lesson that this project has left me with is a strengthening of my pedagogical experience and the importance of promoting environments to empower education in children.” Lida Arreola, Teacher, Majagual Sucre, Colombia La Mojana Transformation, a project in which we adapt aeioTU, an innovative educational model in community childcare centers, with a special focus on educators. 73 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Arts & Culture A fourth area of focus for FEMSA Foundation, through Difusión y Fomento Cultural, A.C., is to engage communities and to use the arts as a catalyst for social change and thought- provoking dialogue. Our Arts & Culture program has four clear objectives: Expand the enjoyment of art without barriers, making it inclusive and accessible. Promote empathy, understanding and emotional recognition of the experiences of others through art. Facilitate interactions that promote a sense of collaboration through art to achieve collective goals. Strengthen the art ecosystem in Latin America. For more than 45 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 1,320 works from 786 artists, which FEMSA shares with diverse communities through exhibitions, a loan program and multiple cultural activities. We also seek opportunities to bring art to communities through spaces for self-reflection and dialogue, in ways that increase engagement and participation while building empathic and united communities. For example, during 2022: At the Festival Internacional Santa Lucía, FEMSA Collection joined the traveling project “Coincidencias y Disidencias” to initiate a dialogue featuring masterpieces from Spain’s Museo Nacional del Prado. Learn more. We presented Hacer Mundos. Un acercamiento para leer la Colección FEMSA, an approach to reading and understanding the FEMSA Collection at the Festival Internacional Cervantino, the largest cultural festival in Latin America, which celebrated its 50th anniversary in 2022. Learn more. We continued sharing El Faro, a methodology that aims to contribute to creating solutions to the problems that communities face. We joined with the International Symposium on Contemporary Art Theory (SIT_AC) to promote a critical discussion on contemporary art, specifically as part of SIT_AC Nodos Bajío, a series of activities designed to strengthen the art ecosystem and encourage the exchange between cultural production of the different regions of Mexico. Learn more. We presented the documentary Geologías Migratorias – a project that combines geological knowledge with migratory mobility – in various festivals around Mexico, including Tierra Fest in Mexico City, Festival Cortometrajes del Tecnológico de Monterrey in Guadalajara and Festival Cuórum in Morelia. We also organized a special event this year with support from the Inter-American Development Bank and other partners with the aim of opening a channel for dialogue between the public and private sectors to promote key actions and new financing mechanisms for the cultural sector. The Forum of Public-Private Alliances included rich discussions and workshops that yielded interactive, cross- cutting dialogues between hundreds of expert voices from local, national and international organizations. The sessions were presented as part of the 2022 UNESCO World Conference on Cultural Policies and Sustainable Development (MONDIACULT), hosted this year by the Government of Mexico. MONDIACULT brought together experts from more than 150 countries with the aim of shaping a more robust and resilient cultural sector in alignment with the principles of sustainable development, including peace and security. During 2022, we promoted 11 programs that benefited more than 1.2 million people in communities of Mexico, Germany, France, Italy and Switzerland. Learn more. Effects for a Cause: Seeing the World through a New Lens “We created a workshop so that kids could understand their community. To internalize the image, as I call it, is to enrich yourself in a new way. By beginning to awaken these types of situations around your space with an artistic, photographic and visual outlook, you start to equip boys and girls with new sensibilities.” Thom Díaz, Photographer, Artist and Teacher, Monterrey, Mexico Watch more about the Visual Documentation Workshop that is helping kids living in neighborhoods touched by violence to see things in new ways and to have a greater understanding of their community. 74 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 governance Robust corporate governance is vital to the responsible management and operation of our business, ensuring the accountability and alignment with our stakeholders to create long-term value through strong economic and social performance. FEMSA Governance Structure Board of Directors Supported by: Operation & Strategy Committe Corporate Practices & Nominations Committe Audit Committe Company by-laws FEMSA Code of Ethics Shareholders Laws & Regulations Our People Our Community Our Planet Executive Team Internal Regulations Our governance efforts cover three priority topics: Corporate Responsibility, Ethical & Socially Responsible Behavior and Fiduciary Responsibility. Our governance structure is the foundation for our value creation. We aim to have the right leaders, teams, tools, policies and feedback mechanisms in place across the organization, with tiered levels of accountability. Our Board of Directors is responsible for establishing the Company’s corporate strategy, and is supported by its Committees and FEMSA’s talented executive team, who is focused on driving sustainable business growth. For detailed 2022 data related to Governance, please see Key ESG Data in the Appendix. 75 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Corporate Responsibility FEMSA’s Board of Directors is responsi- ble for monitoring and managing risks to the Company, directing corporate strategy and defining and supervising the implementation of the Company’s vision and values. In accordance with our bylaws and article 24 of the Mexican Securities Market Law, we are required to have a Board of Directors with a maximum of 21 members, at least 25% of whom must be independent. The bylaws of the Company also provide that the holders of the FEMSA B Shares may elect at least 11 Directors and the holders of the FEMSA D Shares may elect 5 Directors. Alternate directors are authorized to vote in board matters on the Board of Directors in the event of absence of the proprietary directors and may participate in the activities of the Board of Directors. FEMSA’s current Board of Directors was elected at our Annual General Meeting (AGM) held on April 8, 2022, and includes 17 directors; 12 were elected by Series B shareholders and 5 were elected by Series D shareholders. Directors are appointed for a term of one year and are eligible for re- election after the completion of their term in office. The Board of Directors is also assisted by one Secretary (non- member) and one Alternate Secretary (non-member). José Antonio Fernández Carbajal has served as Chairman of the Board of Directors of FEMSA since 2001. Our bylaws provide that the Board of Directors shall meet at least once every three months and the resolutions of the board of directors must be approved by at least a majority of the directors present and voting. During 2022, FEMSA’s Board of Directors met six times – with an average board meeting attendance of 98.03% – to discuss our operating results and strategic objectives. We believe that each of the directors bring unique areas of expertise and wide-ranging professional experience to FEMSA. We periodically review and evaluate our governing bodies, including boards and committees, for compliance with corporate governance best practices in terms of structure, operation, diversity and experience in order to manage their performance. The Board of Directors periodically performs a self-assessment to help the board’s governance performance and practices. 76 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 In 2022, FEMSA announced the following actions and commitments to enrich its corporate governance: Increasing Oversight Role of Independent Directors on Key Committees Governance priorities post-2022 Strengthening Board Accountability to Shareholders The Audit Committee and the Corporate Practices and effectiveness by: Continue enhancing the Board’s independent oversight Shareholders will have the ability to vote on directors individually, rather than as a slate. Increasing Influence of Independent Directors Continue refreshment and right-sizing of FEMSA’s Board, reducing Board size to a target range of between 14 and 15 directors by 2023, a decrease from 18 directors in 2021, and 21 directors in 2018. By 2023 and once our target size is met, independent directors will comprise no less than 40% of the Board. 1. Balancing institutional knowledge with fresh perspective by adding new independent directors. 2. Adding additional expertise on relevant new-business areas such as Digital and E-commerce, Sustainability among others. 3. Further enhancing Board gender diversity beyond our current level of 22%, and relevant ESG expertise in line with FEMSA’s focus on, commitment to, and leadership of ESG initiatives critical to our success. Ensure Board focus and responsiveness by adopting limits on directors outside board commitments. Bolster outreach to shareholders to continue to gather their input as we further enhance our governance. Committee will continue to support the Board of Directors by providing vital independent oversight in their respective areas of focus. In addition, as part of our Board renewal process, the Corporate Practices Committee has been renamed renamed Corporate Practices and Nomination Committee, and will expand oversight to add to its responsibilities the following: 1. Evaluation and nomination of candidates for Series D directors, 2. Appropriate board composition by ensuring the board includes directors with the skills, experiences and capa- bilities required to provide effective oversight, and 3. Provide to shareholders a summary of the evaluation and nomination process for directors. The Strategy and Finance Committee will add independent operational oversight to its purview (and has been renamed the Operation and Strategy Committee): 1. A majority of the Committee will be independent directors. 2. The Committee will provide specific oversight on transformational initiatives, further increasing the involvement and time commitment of directors on operational matters and complementing the role of Senior Management. 77 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Board of Directors The following information summarizes the current composition of our Board of Directors: Series B Directors José Antonio Fernández Carbajal B Executive Chairman of the Board of Directors of FEMSA Appointed to the Board: 1984 and as Chairman of the Board since 2001. Alternate: Federico Reyes García B Bertha Paula Michel González Professor at Universidad Nacional Autónoma de México (“UNAM”) Appointed to the Board: 2020 Alternate: Maximino José Michel González Francisco Javier Fernández Carbajal B Chief Executive Officer of Servicios Administrativos Contry, S.A. de C.V Appointed to the Board: 2005 Alternate: Javier Astaburuaga Sanjines B Eva María Garza Lagüera Gonda Private investor Appointed to the Board: 1999 Alternate: José Antonio Fernández Garza Lagüera B Mariana Garza Lagüera Gonda Private investor Appointed to the Board: 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. Appointed to the Board: 1984 Alternate: Francisco José Calderón Rojas Alejandro Baillères Gual Chairman of Grupo Bal Appointed to the Board: 2022 Alternate: Arturo Fernández Pérez Ricardo Guajardo Touché B, C, I Independent consultant Appointed to the Board: 1995 Paulina Garza Lagüera Gonda Private investor Appointed to the Board: 2004 Alternate: Bárbara Garza Lagüera Gonda Robert Edwin Denham B, C, I Partner at Munger, Tolles & Olson LLP Appointed to the Board: 2001 Michael Larson B, I Chief Investment Officer for William H. Gates III. Appointed to the Board: 2011 Alfonso Garza Garza Private investor Appointed to the Board: 2016 Alternate: Juan Carlos Garza Garza For more information, including the edu- cation, relevant experience and additional significant positions of our board members, please see Form 20-F 2022. Series D Directors Ricardo Ernesto Saldívar Escajadillo B, C, I Private investor Appointed to the Board: 2015 Alfonso González Migoya A, I Business consultant Appointed to the Board: 2017 Enrique F. Senior Hernández B, I Managing Director of Allen & Company, LLC Appointed to the Board: 2022 Víctor Alberto Tiburcio Celorio A, I Independent consultant Appointed to the Board: 2018 Jaime A. El Koury I General Counsel of the Financial Oversight and Management Board for Puerto Rico, a governmental entity created in 2016 under U.S. federal statute Appointed to the Board: 2022 Series D Independent Alternate Directors Michael Kahn B, I Francisco Zambrano Rodríguez A, I Secretary Alejandro Gil Ortiz General Counsel and Secretary of the Board of Directors (Non-member) A Audit Committee B Operations and Strategy Committee C Corporate Practices and Nominations Committee I Independent Director 78 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Director Age Gender Appointed Attended/Total Board meetings 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 B s e i r e S D s e i r e S José Antonio Fernández Carbajal Francisco Javier Fernández Carbajal Eva María Garza Lagüera Gonda Mariana Garza Lagüera Gonda José Fernando Calderón Rojas† Francisco José Calderón (alternate director) Alfonso Garza Garza Bertha Paula Michel González Alejandro Baillères Gual Ricardo Guajardo Touché Paulina Garza Lagüera Gonda Robert Edwin Denham Michael Larson Ricardo E. Saldívar Escajadillo Alfonso González Migoya Enrique F. Senior Hernández Víctor Alberto Tiburcio Celorio Jaime A. El Koury 69 67 64 52 68 56 60 58 62 74 51 77 63 70 78 79 72 69 Male Male Female Female Male Male Male Female Male Male Female Male Male Male Male Male Male Male 2001 2005 1999 2005 1984 2005 2016 2020 2022 1995 2004 2001 2011 2015 2017 2022 2019 2023 6/6 6/6 6/6 6/6 6/6 5/6 6/6 6/6 6/6 6/6 6/6 6/6 6/6 6/6 6/6 6/6 5/6 79 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Board Committees Audit Committee Operations & Strategy Committee Corporate Practices & Nominations Committee Our Board of Directors is supported by three committees with different areas of responsibility and oversight of the management of FEMSA’s impacts on the economy, environment and peo- ple. According to their respective areas of focus, these committees provide expert advice and recommendations on strategic issues critical to the success of the Company. The current members of each board committee were elected at our AGM on April 8, 2022. Learn more. Víctor Alberto Tiburcio Celorio, Chairman José Antonio Fernández Carbajal, Chairman Ricardo E. Saldívar Escajadillo, Chairman Responsible for: (1) reviewing the accuracy and integrity of 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; (2) the recommendation of the appointment, compensation, retention and oversight of the independent auditor, who reports directly to the Audit Committee; and (3) identifying and following-up on contingencies and legal proceedings. The members are: Victor Alberto Tiburcio Celorio, Alfonso González Migoya, and Francisco Zambrano Rodríguez Responsible for: (1) preventing or reducing the risk of performing operations that could damage the value of our company or that benefit a particular group of shareholders; (2) evaluating and nominating candidates for Series D directors; (3) overseeing appropriate board composition by ensuring the board includes directors with the skills, experiences and capabilities required to provide effective oversight; (4) approving policies related to the use of Company assets or transactions with related-party transactions; (5) approving the compensation of the Chief Executive Officer and relevant officers; and (6) supporting the Board of Directors in the preparation of reports on accounting practices. The members are: Ricardo E. Saldívar Escajadillo Ricardo Guajardo Touché Robert Edwin Denham Responsible for: (1) evaluating the investment and financing policies of our company; (2) evaluating the risk factors to which our company is exposed, as well as evaluating its management policies; (3) making recommendations on our dividend policy; (4) strategic analysis and assessment of our business units and strategic alternatives for their growth; (5) providing specific oversight on transformational initiatives, further increasing the involvement and time commitment of directors on operational matters and complementing the role of Senior Management; and (6) making recommendations to our board of directors on annual operation plans and strategic projects for our business units. The members are: José Antonio Fernández Carbajal Francisco Javier Fernández Carbajal Federico Reyes García Ricardo Guajardo Touché Javier Gerardo Astaburuaga Sanjines José Antonio Fernández Garza Lagüera Robert Edwin Denham Michael Larson Enrique F. Senior Hernández Ricardo E Saldívar Escajadillo Michael Kahn 80 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Executive Team The FEMSA executive team is focused on the daily management of our compa- ny, executing on the implementation of our corporate strategy, driving business growth and creating economic, social and environmental value for all our stakeholders. Each of our leaders has significant professional experience with- in 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 Daniel Alberto Rodríguez Cofré Chief Executive Officer of FEMSA He joined FEMSA in 2015 as Chief Financial and Corporate Officer before being named the Gerardo Estrada Attolini Vice-President of Administration and Corporate Control of FEMSA He joined FEMSA in 2000 and was appointed to various positions, including CEO of OXXO. He was Chief Executive Officer of FEMSA Comercio in his current position in 2020. Previously, he served appointed CEO of FEMSA in 1995 and Chairman 2016. He was appointed to his current role as of as Chief Financial Officer of FEMSA Cerveza and of the Board in 2001, serving in both positions January 1, 2022. Prior to joining the Company, he Corporate Finance Vice President of FEMSA. Prior until January 2014 when he was appointed was CFO and then CEO of CENCOSUD (Centros to FEMSA, he served in various executive level Executive Chairman of the Board of Directors Comerciales Sudamericanos S.A.), among other positions in the finance functions of Mexican of FEMSA. He is also Chairman of the Board of senior finance and management positions in companies in the financial and industrial sectors. Coca-Cola FEMSA. Currently, he also participates Latin America and Europe. He holds a forest He holds an Accounting degree and an MBA from as a board member of Industrias Peñoles and is engineering degree from Austral University of Tecnológico de Monterrey. member of the Board of Global Advisors of the Chile and an MBA from Adolfo Ibañez University. Council for Foreign Relations. In 2017, he was elected as a fullterm member of Massachusetts Institute of Technology (MIT), Francisco Camacho Beltrán Chief Corporate Officer of FEMSA He joined FEMSA in 2020 after a long track record where he contributes the Student Life and in senior management positions in consumer Alfonso Garza Garza Chief Executive Officer of FEMSA Strategic Businesses (until 2022) He joined FEMSA in 1985 and held various Undergraduate Education committees. He product companies around the world, including positions including CEO of FEMSA Empaques. completed his second term as President of the Procter & Gamble and Revlon. In 2000, he joined He is President of the Fondo Ambiental Council of Tecnológico de Monterrey in February Danone as head of its Bonafont water operations Metropolitano de Monterrey, and until 2022 was 2023, and due to his commitment to education, in Mexico. For the next 20 years, he held varying Vice Chairman of the Economic Development he remains an advisor and professor at the same responsibilities in the water and dairy segments, of the Mexican Employers’ Confederation institution. He holds an Industrial Engineering while driving growth and innovation. In 2011, (COPARMEX). He is a member of the Board of degree and an MBA from Tecnológico de he became a member of Danone’s Executive Directors of FEMSA, Tecnológico de Monterrey, Monterrey. Committee, leading the Global Customer Team and Grupo Nutec, S.A. de C.V. He graduated serving as Corporate Chief Growth and Innovation Officer. He was EVP and global head of the Essential from Tecnológico de Monterrey in Industrial Engineering and earned an MBA from IPADE Dairy and Plant Based business and responsible Business School. Effective January 1, 2023, for Global Industrial Operations and Supply Chain Constantino Spas who was the Chief Financial He holds a Computer Systems degree and an MBA Officer in Coca-Cola FEMSA , is appointed as from Tecnológico de Monterrey. Chief Executive Officer of Strategic Businesses of FEMSA. 81 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Roberto Campa Cifrián Vice-President of Corporate Affairs of FEMSA He joined FEMSA in 2019, after a long career Raymundo Yutani Vela Vice-President of Human Resources He was appointed Director of Human Resources Daniel Belaúnde Arnillas Chief Executive Officer of FEMSA Health He assumed the role of Chief Executive Officer, at FEMSA in 2018. He joined FEMSA Comercio Health, in 2022, following his role as CEO of in the public, private and social sectors. He has in 1999 as Director of Human Resources, a Socofar, S.A. since 2016. He brings to this role served in the federal government of Mexico position he held until 2014. Between 2014 and more than 25 years of experience in global Updates as of January 2023 Ian Craig Chief Executive Officer of Coca-Cola FEMSA (as of January 1, 2023) He joined Coca-Cola FEMSA in 2003. With over as Secretary of Labor and Social Welfare, 2018, he was Director of Human Resources at companies across three different markets: retail 27 years of experience in the beverage Undersecretary of the Interior and Head of the Coca-Cola FEMSA. Before joining the Company, banking, retail-fashion and the pharmaceutical industry, he previously served in several senior Federal Consumer Protection Agency. He has he was Director of Human Resources North at industry. Prior to FEMSA, he supervised management positions at Coca-Cola FEMSA, also served as a representative in the Mexico Banca Serfín, today Santander. He is a graduate business units in multiple countries, including as including as Director of Operations for the Brazil City Legislative Assembly and as a federal of the Public Accountant career and has a general manager at Ripley Perú (2012-2016); as Division from 2016 to 2022, and previously Chief congressional representative. He holds a law Master’s degree in Business Administration from operations manager at Ripley Chile (2008-2012); Operating Officer of Argentina, CFO and Strategic degree from Universidad Anáhuac, where he is the Regiomontana University. Additionally, he and as commercial bank manager at Banco Planning Director of South America Division, also a professor of macroeconomic theory and completed the AD1 program at IPADE and is Santander Chile (1996-2008). He completed CFO, Planning and Corporate Affairs Director of President of the Federation of Student Societies. certified as a Coach by Newfield Consulting. his studies in economics at the Universidad del Mercosur Region, and Corporate Finance and John Anthony Santa Maria Otazua Chief Executive Officer of Coca-Cola FEMSA (until 2022) He was appointed to this position in 2014. He Carlos Arenas Cadena Chief Executive Officer of Proximity Division He began his career at FEMSA in 1984 and joined Coca-Cola FEMSA in 1995 and has served joined FEMSA Comercio in 2001 as Strategic Pacífico in Lima, Peru. José Antonio Fernández Garza-Lagüera Chief Executive Officer of Digital@FEMSA He began his career in FEMSA Retail operations Treasury Director of Coca-Cola FEMSA. He has a Bachelor’s degree in Industrial Engineering from Tecnológico de Monterrey, an MBA from the University of Chicago Booth School of Business, and a Master’s degree in International Commercial Law from Tecnológico de Monterrey. in several senior management positions since Planning Manager. In 2007, he was promoted in 2018 as head of Strategic Planning for OXXO then, including COO of the Company’s Mexico to the head of FEMSA Comercio’s Planning and Mexico. Prior to that, he ran Coca-Cola FEMSA’s Division, and Strategic Planning and Commercial Information Technology Department, followed Central America division from 2015 to 2018. He Development Officer. He earned a Bachelor’s by the Supply Chain Department for OXXO, and also served as CEO of FEMSA’s plastics division, degree and an MBA with a major in Finance from later the Commercial Department of OXXO. Plásticos Técnicos Mexicanos and head of sales Southern Methodist University. Effective January 1, In January 2016, he was appointed Director and operations in México City at HEINEKEN México. Constantino Spas Chief Executive Officer of FEMSA Strategic Businesses (as of January 1, 2023) He was the Chief Financial Officer of Coca-Cola 2023, Ian Craig who was Chief Operating Officer of General of OXXO Mexico and assumed his Prior to his work at HEINEKEN, he co-founded FEMSA until December 2022. He has 24 years of Coca-Cola FEMSA’s Brazil Division, is appointed as current role as of January 1, 2022. Up until 2020, and ran Vestige Capital, a search fund based in experience in the food and beverage sector in Chief Executive Officer of Coca-Cola FEMSA. he participated in the National Association of Mexico seeking to acquire and operate small and companies such as Grupo Mavesa and Empresas Self-Service and Department Stores (ANTAD) in medium-sized companies in Mexico. While at Polar in Venezuela, Kraft Foods, SAB Miller in Mexico and continues to be a member of the International Council and the Latin American Vestige, he co-led the acquisition of BOMI Group de México a third-party logistics provider for the Latin America and Bacardi y Compañía S.A. de C.V. in Mexico, holding different positions in Council of the Association For Convenience Mexican healthcare industry. He has taught a marketing, as regional officer and as VP Managing & Fuel Retailing (NACS). He graduated with class on entrepreneurship and was the founding Director. He holds a Bachelor’s Degree in Business a degree in Computer Science from the chairman of the board of the Entrepreneurship Administration from Universidad Metropolitana Autonomous University of Nuevo León. Institute in Tecnológico de Monterrey. He received in Caracas, Venezuela, and an MBA from Emory his MBA from Stanford University Graduate School University, Goizueta Business School in Atlanta, of Business and his Bachelor’s degree in Industrial Georgia, USA. Engineering from Tecnológico de Monterrey. 82 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Sustainability Governance Since 2005, FEMSA has been a signatory to the United Nations Global Compact (UNGC), committing to aligning our business and strategy with the UNGC’s Ten Principles, in particular in the areas of human rights, labor, environment and anti-corruption. Internally, we have teams, processes, forums and governing bodies dedicated to defining, managing and promoting our sustainability strategy. At the highest level, FEMSA’s sustainability governance is overseen by the Board of Directors, who take an active role in integrating the management of material ESG risks and opportunities into the core business strategy, in alignment with the Company’s vision and values. Our executive team is responsible for implementing our sustainability strategy and managing ESG risks and the Company’s impacts on the economy, environment and people, and they provide regular updates to the Board on these topics. Our C-suite level Sustainability, Inclusion & Diversity Committee, co-led by the Chairman of the Board and the Corporate Director, was established in 2021 and is comprised of the Director-level representatives of each business unit at FEMSA. The Committee meets quarterly to consolidate the diverse sustainability efforts across the organization and to strengthen the line of accountability for ESG management. Key agenda items during 2022 included approving the expanded scope of FEMSA’s 2030 sustainability goals, supporting the ongoing preparations of our climate-related financial disclosures, and establishing a new directive to collect sustainability-related data from business units in coordination with our Internal Audit procedures. FEMSA’s sustainability team is responsible for formulating, developing and integrating specific sustainability considerations, policies and processes across all FEMSA business units. The team also advises on and supervises sustainability performance and progress against targets, as well as leads FEMSA’s sustainability reporting and disclosures. As of the end of 2022, the sustainability team was led by Alfonso Garza Garza, Vice President of Strategic Businesses, who reported directly to the FEMSA CEO and was a member of our Board of Directors. As of January 1, 2023, the Sustainability team is led by Francisco Camacho, Chief Corporate Officer of FEMSA. During 2022, we hosted a second annual internal Sustainability Summit in hybrid format (welcoming more than 150 people in person at our EOS REPARE plant in San Juan del Río, Querétaro, Mexico and hosting another 400+ participants online – representing all business units and countries where we operate). With the theme, Living Our Sustainability Strategy, FEMSA’s CEO opened the proceedings and, over two days, collaborators shared success stories demonstrating how their teams and business units are bringing FEMSA’s sustainability strategy to life. The Summit helped facilitate new networking connections across business units, inspired collaborators with new ideas and best practices to bring back to their teams and motivated everyone to continue expanding their progress against FEMSA’s corporate sustainability goals. 83 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 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 corporate practices comply with the applicable laws to our operation. 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). Ethics & Legality Culture Our Code of Ethics (the “Code”) – which is reviewed annually – is the core of our corporate behavior and the foundation of our policies, guidelines 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 Internal Regulations. The Code, approved by the Board of Directors, applies to members of the Board and employees in all the countries where we operate. FEMSA’s Supplier Guiding Principles contains the minimum expectations that we require of our suppliers in the areas of human and labor rights, sus- tainability, lawful culture and informa- tion security. It is the supplier’s respon- sibility, in its relationship with FEMSA, For more on our responsible sourcing approach, please see page 64. to adopt the necessary methods and practices to comply with our Supplier Guiding Principles. We also have the following corporate policies, which are mandatory for all FEMSA employees, who are subject to the required controls we have established to prevent, identify, investigate, sanction and remedy any risk of violation or any possible risks of violation. Human and Labor Rights Corporate Policy Sustainability Corporate Policy reports investigations. Conflict of interest attestations are also required at least every two years from all our employees. We have annual trainings for our employees in connection with anti- corruption, anti-money laundering, data protection and conflict of interest, among other matters. We also activated a campaign to communicate FEMSA’s Supplier Guiding Principles through our newsletter, COMPARTE, addressed to strategic suppliers. Environment Corporate Policy FEMSA Ethical System Community Commitment Corporate Policy Anti-corruption Corporate Policy At least every two years our employees reaffirm their commitment to comply with FEMSA’s Internal Regulations, including our Code of Ethics. We also have annual focused trainings based on employee function, job level and geography, including our Ethics & Compliance Certifications and trainings for employees responsible for ethics We believe it is essential to have a trusted and secure way for our stakeholders or any other third party to share a concern or suspicion about a potential ethics violation. FEMSA’s Audit Committee has implemented procedures for receiving, retaining and addressing complaints regarding accounting, internal control and auditing matters, including the submission of confidential, anonymous complaints from employees regarding questionable accounting or auditing matters. 84 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Climate-Related Risks & Opportunities The Sustainability Committee reviews the sustainability strategy and monitors key ESG initiatives, goals and metrics, including climate-related matters. For example, in 2022, FEMSA, in conjunc- tion with its business units, prepared for annual reporting in line with the requirements of the Task Force on Climate-Related Financial Disclosures (TCFD). As a first step, we identified and quantified the climate-related risks and opportunities of Coca-Cola FEMSA, OXXO, OXXO GAS and Solistica. For more information, please visit our TCFD Index page 131. process with a structured approach that helps them identify, manage and mitigate current and potential risks. 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 de- fining, managing and promoting the FEMSA Sustainability Strategy. MIRC (Manejo de Incidentes y Resolu- ción de Crisis) is our overall incident management and crisis resolution methodology, which considers identi- fication, potential impacts, probability of occurrence, emergency plans and risk mitigation strategies. MIRC is established across all the business units and all levels of the organization. MARRCO (la Metodología de Atención a Riesgos y Relacionamiento Comunitario) is our model for managing risks and community engagement and aims to build and maintain effective relations with local communities by fostering dialogue and mutually beneficial col- laboration opportunities. The FEMSA Ethics Line is a formal, independent whistleblower mechanism managed by an independent party (available 24 hours a day, seven days a week, 365 days per year) for our stake- holders to report complaints, concerns, suggestions or potential breaches of the Code of Ethics or other internal regulations. Reports may be submitted anonymously via confidential commu- nication channels, including by phone or website. In 2022, a total of 3,927 reports were received and reviewed of which 77% were resolved in the same calendar year. Among other areas, the reports related to work environment, operations and financial information. Risk Management In a global and constantly changing business environment, we know risk management is a strategic and import- ant issue for our stakeholders. Our ability to manage risks that arise in the environment in which we operate is vital to creating value for our business. Given the global nature of FEMSA’s operations in different countries and regions of the world, our operations are subject to diverse laws and regu- lations, and we are exposed to risks inherent to the sectors in which we participate. Our business units have a comprehensive risk management For more information related to our risk management process, please visit our financial filings. 85 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Fiduciary Responsibility As part of our responsibility to our shareholders, we disclose the Compa- ny’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 finan- cial results and verify our sustainability results in accordance with current stan- dards. Please see page 139 for our ESG Independent Limited Assurance Report. 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. Protection of Information & Cybersecurity At FEMSA, we recognize the importance of maintaining a robust cybersecurity system that guarantees data privacy and the protection of our companies’ and customers’ information. At the top of FEMSA’s information security governance model is our Executive Team, who assumes responsibility for cybersecurity as a critical management issue. Our Chief Information Security Officer (CISO) is responsible for overseeing FEMSA’s information security program (based on the U.S. National Institute of Standards and Technology Framework for Improving Critical Infrastructure Cybersecurity). The CISO advises the Executive Team, Audit Committee and leads the Information Security Council (comprised of C-suite and CISO representatives from FEMSA’s business units) on critical matters and liaises regularly with business unit- level CISOs and information security committees. Our investment on the implementation of security controls and countermeasures is based on our risk management and external assessments results and prioritization, as well as internal and externals audits. We prioritize threat deterrence, detection, response planning and recovery processes to preemptively protect against any risks. In 2022, we did not experience any information security incidents or breaches of personal data. In the event of a potential breach, we have multiple cyber intelligence tools, countermeasures and incident response processes to maintain business continuity while quickly and decisively managing any risks to our company and our customers. As part of our governance model, we review our response plans regularly to incorporate updates and evaluate their ongoing effectiveness. As outlined in our Supplier Guiding Principles, we also expect any suppliers or other third- parties we work with to protect and preserve FEMSA’s personal data and information assets during their entire lifecycle, from access to deletion and destruction. We have an information security awareness program for employees to clearly understand the escalation process they can follow in any event that they notice something suspicious. They can also report concerns or violations to the FEMSA Ethics Line. 86 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 financial summary Amounts expressed in millions of Mexican pesos (Ps.) as of December 31. 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 operations 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 expenditures2 2022 2021 2020 2019 2018 Ps. 671,725 Ps. 554,923 Ps. 490,425 Ps. 504,059 Ps. 468,894 673,202 421,534 251,668 192,252 59,416 1,164 16,380 41,872 14,395 7,266 34,743 – 34,743 23,909 10,834 37.4% 8.8% 5.2% 27,831 5,565 92,812 34,410 556,261 342,548 213,713 161,720 51,993 (2,667) 13,384 41,276 14,278 10,680 37,678 – 37,678 28,495 9,183 38.4% 9.3% 6.8% 25,294 5,135 82,422 24,055 492,966 303,313 189,653 148,150 41,503 7,656 14,911 18,936 14,819 (361) 3,756 – 3,756 (1,930) 5,686 38.5% 8.4% 0.8% 25,006 5,464 71,973 20,893 506,711 315,230 191,481 144,329 47,152 1,573 13,492 32,087 10,476 6,437 28,048 – 28,048 20,699 7,349 37.8% 9.3% 5.5% 23,344 4,944 75,440 25,579 469,744 294,574 175,170 133,594 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 87 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 financial summary Amounts expressed in millions of Mexican pesos (Ps.) as of December 31. BALANCE SHEET Assets Current assets Equity accounted investees Property, plant and equipment, net3 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 2022 2021 2020 2019 2018 Ps. 226,449 Ps. 230,718 Ps. 201,269 Ps. 172,579 Ps. 177,607 103,669 134,001 190,772 83,966 59,958 798,815 18,341 12,095 146,486 173,400 81,222 7,048 6,823 15,599 461,014 337,801 262,604 75,197 107,299 115,147 158,138 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 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 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 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 88 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 financial summary Amounts expressed in millions of Mexican pesos (Ps.) as of December 31. BALANCE SHEET Financial ratios (%) Liquidity Leverage Capitalization Data per share Controlling interest book value4 Net controlling interest income5 Dividends paid6 Series B shares Series D shares Number of employees7 Number of outstanding shares8 2022 1.374 1.365 0.38 14.678 1.336 0.566 0.709 2021 1.783 1.201 0.37 14.678 1.593 0.383 0.479 2020 1.803 1.229 0.39 13.288 (0.108) 0.517 0.646 2019 1.336 0.957 0.28 14.085 1.157 0.483 0.604 354,344 17,891.13 320,808 17,891.13 320,618 17,891.13 314,656 17,891.13 2018 1.750 0.718 0.29 14.368 1.341 0.460 0.575 297,073 17,891.13 1 Company’s key performance indicator. 2 Includes investments in property, plant and equipment, as well as deferred charges and intangible assets. 3 Includes bottles and cases. 4 Controlling interest divided by the total number of shares outstanding at the end of each period. 5 Net controlling interest income divided by the total number of shares outstanding at the end of the each period. 6 Expressed in nominal pesos of each period. 7 Includes incremental employees resulting from mergers & acquisitions made during the period. 8 Total number of shares outstanding at the end of each period expressed in millions. 89 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 management discussion & analysis Audited Financial Results for the twelve months ended December 31, 2022. Compared to the twelve months ended December 31, 2021. 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, a Proximity Division operating OXXO, a small- format store chain, OXXO GAS, a chain of retail service stations, and Valora, an operator of convenience and foodvenience formats present in 5 countries in Europe. It also operates a Health Division, which includes all drugstores and related operations and Digital@FEMSA, which includes Spin by OXXO and OXXO PREMIA, among other loyalty and digital financial services initiatives. Additionally, through its FEMSA Strategic Businesses unit, it participates in the logistics and distribution industry through and provides point-of-sale refrigeration and plastic solutions to its business units and third-party clients. 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 2022 and 2021 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, 2022, which was 19.4960 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 2022 amounts in millions of Mexican pesos Total Revenues % Growth vs’22 FEMSA Consolidated Coca-Cola FEMSA FEMSA Proximity Americas FEMSA Proximity Europe Fuel Health Logistics and Distribution 673,202 226,740 233,958 9,809 51,813 74,800 72,539 21.0% 16.4% 17.8% NA 29.8% 2.4% 49.8% Gross Profit 251,668 100,300 97,586 4,599 6,560 21,983 16,165 % Growth vs’21 17.8% 13.2% 15.9% NA 24.5% 1.1% 52.9% 90 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 FEMSA’s consolidated total revenues increased 21.0% to Ps. 673,202 million in 2022 compared to Ps. 556,261 million in 2021. On an organic28 basis, total revenues grew 15.5%. Coca-Cola FEMSA’s total revenues increased 16.4% to Ps. 226,740 million, mainly as a result of volume growth, revenue management initiatives, and favorable price-mix effects. FEMSA Proximity Americas revenues increased 17.8% to Ps. 233,958 million, driven by an average increase of 14.3% in OXXO’s same-store sales and the addition of 1,027 net new stores during 2022. Proximity Europe revenues amounted to Ps. 9,809 million, for the consolidated period of 2022.29 Fuel revenues increased 29.8% to Ps. 51,813 million, driven by an average increase of 22.4% in same-station sales driven by a 15.2% increase in average volume. FEMSA Health revenues increased 2.4% to Ps. 74,800 million, partially offset by an average decrease of 1.0% in same-store sales for drugstores, while reflecting positive trends in our Mexico. Colombia and Ecuador operations and stable trends in Chile, partially offset by the depreciation of the Chilean and Colombian pesos, against the Mexican peso, and a demanding comparison base that benefited from extraordinary liquidity in Chile and COVID-19 driven consumption during 2021. The Logistics and Distribution total revenues increased 49.8% to Ps. 72,539 million, reflecting the inorganic expansion of our distribution platform in the United States andpositive demand dynamics in our operations in Latin America. Consolidated gross profit increased 17.8% to Ps. 251,668 million in 2022 compared to Ps. 213,713 million in 2021. Gross margin decreased 100 basis points to 37.4% of total revenues compared to 2021, reflecting gross margin contractions at most of FEMSA’s business units, offset by margin expansion at the Logistics & Distribution business. Consolidated operating expenses increased 18.9% to Ps. 192,252 million in 2022 compared to Ps. 161,720 million in 2021. As a percentage of total revenues, consolidated operating expenses decreased from 29.1% in 2021 to 28.6% in 2022. Consolidated administrative expenses increased 26.7% to Ps. 34,486 million in 2022 compared to Ps. 27,219 million in 2021. As a percentage of total revenues, consolidated administrative expenses increased 20 basis points, from 4.9% in 2021 to 5.1% in 2022. Consolidated selling expenses increased 17.3% to Ps. 157,340 million in 2022 as compared to Ps. 134,079 million in 2021. As a percentage of total revenues, selling expenses decreased 70 basis points, from 24.1% in 2021 to 23.4% in 2022. Consolidated income from operations increased 14.3% to Ps. 59,416 million in 2022 as compared to Ps. 51,993 million in 2021. On an organic30 basis, consol- idated income from operations grew 11.5%. As a percentage of total reve- nues, operating margin decreased 50 basis points, from 9.3% in 2021 to 8.8% in 2022, reflecting margin expansion at FEMSA’s Proximity, Fuel, and Health Di- visions, offset by margin contractions at Coca-Cola FEMSA and FEMSA’s Logistics & Distribution operations. Some of our subsidiaries pay manage- ment fees to us in consideration for corporate services we provide to them. These fees are recorded as administra- tive expenses in the respective business segments. Our subsidiaries’ payments of management fees are eliminated in con- solidation and, therefore, have no effect on our consolidated operating expenses. Net financing expenses increased to Ps. 16,380 million from Ps. 13,384 million in 2021, reflecting a decrease in interest expenses, offset by a Ps. 5,043 non-cash, negative swing in foreign exchange losses, related to FEMSA’s U.S. dollar-denominated cash position as impacted by the appreciation of the Mexican peso. Income before income taxes and share of the profit in associate results increased 1.4% to Ps. 41,872 million in 2022 compared to Ps. 41,276 million in 2021, reflecting an increase in our income from operations, offset by lower other income and the increase in net financing expenses described above. Our accounting provision for income taxes in 2022 was Ps. 14,395 million, as compared to Ps. 14,278 million in 2021, resulting in an effective tax rate of 34.6% in 2022 as compared to 34.7% in 2021. Consolidated net income was Ps. 34,743 million in 2022 compared to Ps. 37,678 million in 2021, reflecting i) higher income from operations across our business units; and ii) a decrease in net interest expense. These were partially offset by, i) a Ps. 5,043 non-cash, negative swing in foreign exchange losses, related to FEMSA’s U.S. dollar-denominated cash position as impacted by the appreciation of the Mexican peso, ii) a Ps. 3,831 negative swing in other non-operating expenses which reflect a demanding comparison base that 28 Excludes the effects of significant mergers and acquisitions in the last twelve months. 29 23 days of October, and the full months of November and December 2022. 30 Excludes the effects of significant mergers and acquisitions in the last twelve months. 91 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 included dividends received from our investment in Jetro Restaurant Depot, and; iii) by a decrease in our participation in associates’ results, which mainly reflects the results of our investment in Heineken. Controlling interest income amounted to Ps. 23,909 million in 2022 compared to a loss of Ps. 28,495 million in 2021. Controlling interest income in 2022 per FEMSA Unit31 was Ps. 6.68 (US$ 3.43 per ADS). Coca-Cola FEMSA Coca-Cola FEMSA total revenues in- creased 16.4% to Ps. 226,740 million in 2022 compared to Ps. 194,804 million in 2021, mainly as a result of volume growth, revenue management initia- tives, and favorable price-mix effects. These factors were partially offset by a decline in Coca-Cola FEMSA’s beer rev- enues related to the transition of the beer portfolio in Brazil and unfavorable currency translation effects from most of its operating currencies into Mexican pesos. In addition, for 2021, this line included other operating revenues due to a favorable determination from the Brazilian tax authorities, which allowed the recognition of a deferred tax credit in Brazil for Ps. 254 million. Coca-Cola FEMSA gross profit increased 13.2% to Ps. 100,300 million in 2022, compared to Ps. 88,598 million in 2021, with a gross margin contraction of 130 basis points as compared to 2021 to reach 44.2%. This gross margin decrease was driven mainly by a tough comparison base due to the recognition of an extraordinary profit of Ps. 1,083 million during the second quarter of 2021, related to credits on concentrate purchased from the Manaus Free Trade Zone in Brazil, higher concentrate costs in Mexico, and higher raw material costs, mainly PET resin and sweeteners. These effects were partially offset by Coca-Cola FEMSA’s top-line growth and favorable raw material hedging initiatives. The components of cost of goods sold include raw materials (principally concentrate, sweeteners, and packaging materials), depreciation costs attributable to our production facilities, wages and other labor costs associated with labor force employed at Coca-Cola FEMSA production facilities, and certain overhead costs. Concentrate prices are determined as a percentage of the retail price of Coca-Cola FEMSA’s products in local currency, net of applicable taxes. Packaging materials, mainly PET resin and aluminum, and HFCS, used as a sweetener in some countries, are denominated in U.S. dollars. Operating expenses increased 13.6% to Ps. 69,462 million in 2022 compared to Ps. 61,195 million in 2021. Administrative expenses increased 25.0% to Ps. 11,263 million in 2022 compared to Ps. 9,012 million in 2021. Selling expenses increased 11.6% to Ps. 57,718 million in 2022 compared with Ps. 51,709 million in 2021. Income from operations increased 12.5% to Ps. 30,838 million in 2022 compared to Ps. 27,402 million in 2021. FEMSA Proximity Americas Proximity Americas total revenues increased 17.8% to Ps. 233,958 million in 2022 compared to Ps. 198,586 million in 2021, reflecting an average increase in same-store sales of 14.3%. As of December 31, 2022, there was a total of 21,458 OXXO stores. As referenced above, OXXO same-store sales increased an average of 14.3% compared to 2021, driven by a 10.7% increase in average customer ticket, and by a 3.6% increase in store traffic. Cost of goods sold increased 19.2% to Ps. 136,372 million in 2022 compared to Ps. 114,390 million in 2021. Gross margin decreased 70 basis points to reach 41.7% of total revenues. This decrease reflects the impact from OXXO’s fast-growing loyalty program, and a decrease of the contribution of financial services, partially offset by a more dynamic commercial income activity and promotional programs with our key supplier partners. As a result, gross profit increased 15.9% to Ps. 97,586 million in 2022 compared with 2021. 31 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 30, 2022, was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5. 92 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Operating expenses increased 12.6% to Ps. 74,073 million in 2022 compared to Ps. 65,809 million in 2021. The increase in operating expenses was driven by our continued but gradual shift from commission-based store teams to employee-based teams; partially offset by enduring expense efficiencies and tight expense control. Administrative expenses decreased 1.3% to Ps. 6,066 million in 2022 compared to Ps. 6,145 million in 2021; as a percentage of sales, administrative expenses decreased to 2.6% in 2022. Selling expenses increased 13.9% to Ps. 67,842 million in 2022 compared with Ps. 59,542 million in 2021; as a percentage of sales, they reached 28.9% in 2022. Income from operations increased 27.9% to Ps. 23,513 million in 2022 compared to Ps. 18,387 million in 2021, resulting in an operating margin expansion of 80 basis points to reach 10.1% as a percentage of total revenues for the year, compared with 9.3% in 2021, Reflecting long-lasting operating efficiencies. FEMSA Proximity Europe32 Fuel Proximity Europe total revenues amounted to Ps. 9,809 million in 2022, reflecting a sequential traffic and ticket recovery driven by increased mobility. As of the end of the period Proximity Europe had 2,766 points of sale. Cost of goods sold increased amount- ed to Ps. 5,210 million in 2022. Gross margin amounted to 46.9% of total revenues, reflecting the recovery of the foodservice category, which has a structurally higher margin. As a result, gross profit amounted to Ps. 4,599 million in 2022. Operating expenses amounted to Ps. 4,267 million in 2022. Administrative expenses amounted to Ps. 1,294 million in 2022; as a percent- age of sales, administrative expenses amounted to 13.2% in 2022. Selling expenses amounted to Ps. 3,112 million in; as a percentage of sales, they reached 31.7%. Income from operations amounted to Ps. 332 million in 2022, resulting in an operating margin of 3.4% as a percent- age of total revenues, driven by the contribution of foodservice as well as the integration of recent acquisitions. Fuel total revenues increased 29.8% to Ps. 51,813 million in 2022 compared to Ps. 39,922 in 2021, reflecting a 22.4% average increase in same-sta- tion sales. As of December 31, 2022, there was a total of 568 OXXO GAS service stations. As referenced above, same-station sales increased an average of 22.4% compared to 2021, reflecting a 6.2% increase in the aver- age price per liter, couple with a 15.2% increase in average volume. Cost of goods sold increased 30.6% to Ps. 45,253 million in 2022 com- pared with Ps. 34,653 million in 2021. Gross margin decreased 50 basis points to reach 12.7% of total reve- nues. Gross profit increased 24.5% to Ps. 6,560 million in 2022 compared with 2021. Operating expenses increased 11.9% to Ps. 4,310 million in 2022 compared with Ps. 3,853 million in 2021. This increase was driven by OXXO GAS’ organic growth partially offset by tight expense control and increased ex- pense efficiencies. Administrative expenses decreased 21.7% to Ps. 227 million in 2022 com- pared with Ps. 290 million in 2021; as a percentage of sales, administrative expenses decreased to 0.4%. Selling expenses increased 14.4% to Ps. 4,084 million in 2022 compared with Ps. 3,571 million in 2021; as a percent- age of sales, selling expenses decreased 100 basis points to 8.0% in 2022. Income from operations increased 58.9% to Ps. 2,250 million in 2022 compared with Ps. 1,416 million in 2021, resulting in an operating margin expansion of 80 basis points to 4.3% as a percentage of total revenues for the year compared with 3.5% in 2021. FEMSA Health FEMSA – Health total revenues increased 2.4% to Ps. 74,800 million in 2022 compared to Ps. 73,027 million in 2021, driven by an average decrease of 1.0% in same-store sales for drugstores, reflect- ing positive trends in our operations in Mexico, Colombia, and Ecuador, and stable trends at our Chilean operations, partially offset by the depreciation of the Chilean and Colombian pesos, against the Mexican peso, and a demanding comparison base driven by extraordinary liquidity in Chile and COVID-19 consump- tion, which was offset by the addition of 434 net new drugstores during the peri- od. As of December 31, 2022, the Health Division had a total of 4,095 drugstores across its geographies. 32 Shows the results for the consolidated period which comprises 23 days of October, and the full months of November and December 2022 93 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Cost of goods sold decreased 3.0% to Ps. 52,817 million in 2022, compared with Ps. 51,291 million in 2021. Gross margin decreased 40 basis points to reach 29.4% 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 1.1% to Ps. 21,983 million in 2022 compared with 2021. Operating expenses increased 0.4% to Ps. 18,045 million in 2022 compared with Ps. 17,974 million in 2021. This increase was driven by the organic growth in Mexico and South America, partially off- set by cost efficiencies and tight expense control throughout our territories. Administrative expenses decreased 10.4% to Ps. 2,918 million in 2022 compared with Ps. 3,255 million in 2021; as a percentage of sales, they reached 3.9% in 2022. Selling expenses increased 3.5% to Ps. 15,139 million in 2022 compared with Ps. 14,620 million in 2021; as a percentage of sales, they reached 20.2% in 2022. total revenues for the year, compared with 5.2% in 2021, reflecting higher operating leverage. Logistics and Distribution Logistics and Distribution total revenues increased 49.8% to Ps. 72,539 million, compared to Ps. 48,412 million in 2021. Reflecting the inorganic expansion of our distribution platform in the United States coupled with positive demand dynamics in our operations in Latin America, and effective cross-selling initiatives at Envoy Solutions operations in the United States. Cost of goods sold increased 49.0% to Ps. 56,374 million, compared to Ps. 37,843 million in 2021. Reflecting the inorganic expansion of our distribution platform in the United States offset by increased fuel expenses. Gross profit increased 52.9% to Ps. 16,165 in 2022 compared with Ps. 10,569 million in 2021, representing 22.3% of total sales. Operating expenses increased 55.3% to Ps. 13,103 million in 2022 compared with Ps. 8,438 million in 2021 reflecting strong inorganic growth at our distribu- tion operations in the United States. Income from operations increased 4.7% to Ps. 3,938 million in 2022 compared with Ps. 3,762 million in 2021, resulting in an operating margin expansion of 10 basis points to 5.3% as a percentage of Administrative expenses increased 37.8% to Ps. 6,247 million in 2022, compared to Ps. 4,533 in 2021; as a percentage of sales, administrative expenses decreased to 8.6% in 2022. Selling expenses increased 68.9% to Ps. 6,858 million in 2022; as a percentage of sales, selling expenses increased to 9.5% in 2022. Income from operations increased 43.7% to Ps. 3,063 million in 2022 compared with 2,132 in 2021, resulting in an operating margin contraction of 20 basis points to 4.2% of total sales, strong inorganic growth at our distribu- tion operations in the United States. Key Events during 2022 The following text reproduce our press releases as they were published. Coca-Cola FEMSA announces construction of a new recycling plant in Mexico On January 25, 2022, Coca-Cola FEMSA announced the construction of a new recycling plant together with ALPLA México, S.A. de C.V. (“ALPLA”), that will be known as “PLANETA”, (“Planta Nueva Ecología de Tabasco”, in Spanish). PLANETA will be built in Cunduacán, in the state of Tabasco, between ALPLA, a global leader in the development and production of plastic packaging solutions and Coca-Cola FEMSA. The plant will have a joint investment between Coca-Cola FEMSA and ALPLA of more than US$ 60 million and will operate with state-of-the-art technology to process up to 50,000 tons of post-consumption PET bottles per year, to produce up to 35,000 tons of food grade recycled material, ready to be reused. The plant is expected to start operations during the first quarter of 2023. Coca-Cola FEMSA was included for the second consecutive year in the S&P Global Sustainability Yearbook 2022 On February 08, 2022, Coca-Cola FEMSA announced that for the second consecutive year Coca-Cola FEMSA was the only Mexican beverage company included in the S&P Global Sustainability Yearbook 2022, due to its high performance in the Corporate Sustainability Assessment (CSA) from S&P. This year, more than 7 thousand companies around the world were evaluated, and only 15% of the companies with the best Environmental, Social, Economic and Corporate Governance (“ESG”) performance were selected. From these companies, more than 700 were in the beverage sector, Coca-Cola FEMSA being the only Mexican company in this sector included in the S&P Global Sustainability Yearbook 2022, achieving a score, according to the S&P’s own evaluation, that makes it stand out as one of the companies with the best performance in the beverage sector in the field of ESG. 94 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Coca-Cola FEMSA was also the first Mexican company and the third in Latin America to obtain approval from the global Science Based Targets (SBTi) initiative, for aligning its emission reduction goals in its operations and throughout its value chain to the Paris Agreement. Additionally, in 2021, considering water as a valuable resource, the Company, as announced at the time, placed the first sustainability linked bonds in the Mexican market, publicly committing to achieve ambitious goals for efficient water use. Coca-Cola FEMSA has the goal of making all its packaging recyclable and collecting 100% of the packaging it places in the market by 2025. Coca-Cola FEMSA was included for the second consecutive year in the S&P Global Sustainability Yearbook 2022. Additionally, Coca-Cola FEMSA has been included for the fourth consecutive year in the gender equality index and for the third time it has been selected as one of the best places to work for the LGBTQ+ community, for promoting policies that favor equality and the rights of the people who collaborate in the Company. Finally, Coca-Cola FEMSA is the only Latin American company in the beverage industry included for the fifth year in the Dow Jones Sustainability MILA Pacific Alliance Index and for the ninth year in the Dow Jones Sustainability Emerging Markets Index, strengthening it as a world-class benchmark in the beverage industry for its actions and results, which have also led it to be included in the FTSE4Good Emerging Index together with Fomento Económico Mexicano, S.A.B. of C.V. and in the new S&P/BMV Total Mexico ESG Index. FEMSA’s Envoy Solutions reaches agreement to acquire Sigma Supply of North America, expanding its footprint in the Southern United States On April 12, 2022, FEMSA announced that Envoy Solutions (“Envoy”), FEMSA’s specialized distribution subsidiary in the United States, reached an agreement to acquire Sigma Supply of North America Inc. (“Sigma Supply”), an independent specialized distribution company based in Hot Springs, Arkansas. This transaction represents another important step in FEMSA’s strategic path to build a leading national distribution platform in the United States. Sigma Supply will add significant capabilities in packaging materials distribution, solutions and services, and it will expand Envoy’s footprint to include the key state of Texas while enhancing its presence across the South to the Mid-Atlantic region. Sigma Supply’s revenues were approximately US$ 370 million in 2021. Coca-Cola FEMSA and the Coca-Cola System announce distribution agreement with Campari Group in Brazil On April 19, 2022, 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 Campari Group’s (“Campari”) products in the country. This distribution will provide for strategically defined actions for each state or region, especially with respect to portfolio. FEMSA and Valora join forces: A strong foundation to jointly develop the European market leader in convenience stores and food service On July 5, 2022, FEMSA announced an all-cash offer to purchase all of the publicly held shares of Valora Holding AG (Valora) for CHF 260.00 per share. This was equivalent to a premium of 57.3% to the volume-weighted average share price of the last 60 trading days and 52.0% to the Valora closing share price on July 4, 2022. Valora; one of the leading foodvenience platforms with convenience stores and food service operations in Switzerland, Germany and other European countries, announced a binding agreement under which FEMSA will launch a public tender cash offer to acquire all of Valora’s publicly held registered shares for CHF 260.00 net per share in cash. Valora will continue to operate under its own company name, becoming the retail arm of FEMSA’s Proximity Division in Europe, and will take on responsibility for further developing the European convenience markets for FEMSA. Valora’s brands and formats will be retained in accordance with Valora’s current management’s expansion and operating plans. FEMSA will fund the up to US$ 1.2 billion/ CHF 1.1 billion all-cash acquisition with available cash on hand. Coca-Cola FEMSA announces distribution agreement with Grupo Perfetti Van Melle in Brazil On July 14, 2022, Coca-Cola FEMSA announced that its subsidiary Spal Indústria Brasileira de Bebidas, S.A. has signed a non-exclusive agreement to distribute Grupo Perfetti Van Melle (“Perfetti”) products in its Brazilian territories. Perfetti, is one of the world’s largest manufacturers of confectionary and chewing gum, with global brands such as Mentos and Fruit-tela. 95 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Coca-Cola FEMSA announces successful pricing of the first social bonds in the consumer sector in the Americas and sustainability bonds in Mexico On October 6, 2022, Coca-Cola FEMSA announced the successful pricing of its social and sustainability bonds in the Mexican market for a total of Ps. 6,000 million. The transaction was completed through a dual-tranche format with the tickers KOF22S and KOF22X. The first tranche was priced at a fixed rate of 9.95% (Mbono+0.30%) for an amount of Ps. 5,500 million due in 7 years; the net proceeds of this bond will be used to finance social projects. The second tranche was priced at a variable rate of TIIE + 0.05% for an amount of Ps. 500 million due in 4 years. Both issuances received a credit rating of mxAAA from S&P Global Ratings S.A. de C.V. and AAA. mx by Moody’s de México, S.A. de C.V. The net proceeds of this bond will be used to finance sustainability projects. The net resources from these bonds will be used to finance projects focused on the development of the communities in which the Company has a presence and that respond to their local needs. Coca-Cola FEMSA has become the first non-financial corporation in the Americas and the first company in the Coca-Cola System to issue a social bond, making the financing of social projects available to investors. Among the outstanding social projects are support programs that provide entre- preneurial and self-employment skills, financial solutions that support store owners, and investments in sustainable community development, including water replenishment projects and water access in vulnerable communities. Spin by OXXO obtains authorization to operate as an electronic payment entity in Mexico On October 7, 2022, FEMSA announced that its subsidiary Compropago S.A.P.I. de C.V. has successfully completed the regulatory process required under the Mexican fintech legal framework and has been authorized by the Comisión Nacional Bancaria y de Valores (“CNBV”) to operate as “Institución de Fondos de Pagos Electrónico” (“IFPE”). FEMSA and Coca-Cola FEMSA Announce Senior Leadership Changes On October 13, 2022, FEMSA and Coca-Cola FEMSA announced that in accordance with their careful and deliberate senior leadership succession planning processes, and consistent with previously established timeframes, John Santa Maria Otazua will retire from his position as Coca-Cola FEMSA’s Chief Executive Officer on January 1, 2023. Accordingly, Coca-Cola FEMSA’s Board of Directors has appointed Ian Craig García, currently CEO of Coca-Cola FEMSA Brazil, to become Coca-Cola FEMSA’s Chief Executive Officer as of the same date. Concurrently, Alfonso Garza Garza will retire from his position as Chief Execu- tive Officer of FEMSA Strategic Business- es on January 1, 2023. Constantino Spas Montesinos, currently Chief Financial Officer of Coca-Cola FEMSA, has been appointed to become Chief Executive Officer of FEMSA Strategic Businesses as of the same date. FEMSA signs agreement to acquire NetPay, as part of its digital and financial solutions ecosystem On November 7, 2022, FEMSA announced that its subsidiaries have signed an agreement to acquire all of the outstanding shares of NET PAY, S.A.P.I DE C.V. (“NetPay”). NetPay is a merchant aggregator that offers several payment services and solutions to micro, small and medium-sized businesses in Mexico. In 2019, FEMSA acquired a minority equity stake in NetPay and now it has agreed with NetPay’s majority shareholders to acquire all of the remaining outstanding shares of the company, to take FEMSA’s ownership to 100%. 96 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 2020 Sustainability Linked Bonds Principles (“SLBP”), as administered by the International Capital Market Association, and it includes certain Sustainability Performance Targets of the Company which are aligned with its overall sustainability strategy priorities for 2030. Per the terms of the Bonds, the satisfaction of the Sustainability Performance Targets will be verified by an accredited third party, and if such targets are not satisfied on certain dates, there will be an interest rate step- up of 25 basis points. Pursuant to FEMSA’s Sustainability- Linked Bond Framework, FEMSA has committed to annually publish on its website a Sustainability- Linked Securities update within its Sustainability Annual Report, which will include up-to-date information on its performance with respect to the key performance indicators. FEMSA Announces Successful Sustainability Linked Bond Issuance in the Mexican Market On November 15, 2022, FEMSA announced the placement of Mexican Peso-denominated sustainability linked bonds in the Mexican market for a total of Ps. 9,273,843,400.00. The transaction was completed through a dual-tranche format with the tickers FEMSA 22-2L and FEMSA 22L. The first tranche was issued at an annual fixed rate of 9.65% (Mbono+0.45%) for an amount of Ps. 8,446,384,600.00 due in 2032. The second tranche was issued at an annual variable rate of TIIE28 + 0.10% for an amount of Ps. 827,458,800.00 due in 2027. This issuance received credit ratings of mxAAA from Standard & Poor’s and AAA (mex) from Fitch Ratings. The proceeds from this issuance will be used for general corporate purposes. Pursuant to the terms of the Bonds, they are linked to FEMSA’s Sustainability Linked Bond Framework, which was adopted and published by the Company in connection to the 2021 issuance of its Euro-denominated sustainability linked notes in the international capital markets for €700 million in senior notes due in 2028, and €500 million in senior notes due in 2033. This Framework is aligned with the Coca-Cola FEMSA Names Gerardo Cruz as Chief Financial Officer On November 29, 2022, Coca-Cola FEMSA announced that the Board of Directors has appointed Mr. Gerardo Cruz Celaya to succeed Mr. Constantino Spas Montesinos as Coca-Cola FEMSA’s Chief Financial Officer, effective January 1, 2023. Coca-Cola FEMSA recognized once again as part of the Dow Jones Sustainability Index On December 19, 2022, Coca-Cola FEMSA announced that is has been included in the Dow Jones Sustainability MILA Pacific Alliance Index for the sixth year; and is the only Company in the beverage industry in Latin America included for the tenth consecutive year in the Dow Jones Sustainability Emerging Markets Index. Based on the results of a Corporate Sustainability Assessment (CSA) that evaluates governance & economic, environmental, and social criteria, Coca-Cola FEMSA increased its rating within the Dow Jones Sustainability Index as compared to the previous year by improving its score as a result of a solid performance in the three pillars subject to the evaluation, confirming the Company’s leading sustainability-driven strategy. 97 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 appendix33 About this Report The content of this 2022 Integrated Annual Report is based on FEMSA’s business strategy and our Sustainability Strategy Framework, including our 2030 sustainability goals and our most recent ESG materiality assessments. This report was developed through an in-depth consultation process with relevant subject matter experts across the organization. The report was then reviewed by representatives from each business unit with feedback incorporated. Our senior management team reviews the final report prior to publication. Reporting Scope Disclosure Frameworks In addition to our annual financial reports, FEMSA has been separately publishing non-financial results related to the economic, social, environmental and governance impacts of our operations since 2004. Every year, we strive to continuously improve the transparency and completeness of our annual disclosures. For the first time in this year’s annual report, we are pleased to take additional steps toward more formally presenting an integrated picture of both our financial and non-financial information. This approach is intended to provide a balanced view of our strategy, operational performance and levers of value creation over the short-, medium- and long-term. Specifically, our materiality assessment (see page 33) directly informed our report development process, and as such, this report is organized according to the pillars of our strategic sustainability framework and the related priority topics that our stakeholders identified as being of highest importance. We retained Ernst & Young, an independent entity to verify select non-financial information in this report. As such, we include a limited assurance statement with more information on the conclusions of this engagement on page 139. Our report is presented in alignment with the following widely accepted disclosure frameworks. GRI: The Global Reporting Initiative is an independent standards organization that helps businesses understand and communicate their economic, environmental and social impacts related to business performance. SASB: The Sustainability Accounting Standards Board is an independent, nonprofit organization with a mission to develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors. TCFD: The Task Force on Climate-related Financial Disclosures is a set of recommendations to enable stakeholders to better understand the financial system’s exposures to climate-related financial risks. UNGC: FEMSA has been a United Nations Global Compact (UNGC) participant since 2005, and as such, we work to align our company’s operations and strategies with its 10 principles. This 2022 Integrated Annual Report serves as our annual UNGC Communication on Progress (CoP). This report should be read in conjunction with our financial filings, available at https://femsa.gcs-web.com/. Previous years’ annual reports are available at https://femsa.gcs-web.com/financial-reports/annual-reports. 33 The information included in the Appendix is provided in good faith and is intended to enhance understanding of the organization’s non-financial performance. Although the information is believed to be correct at the time of publication, we cannot accept any liability for any loss or damage caused by any person or organization acting or failing to act as a result of the information contained herein. 98 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Stakeholder Engagement Stakeholder Group Examples of Communication Channels Examples of Topics of Interest FEMSA Response Global conferences, meetings, roadshows Company quarterly performance Financial and sustainability Transparent and timely reporting Steady and resilient financial The sentiment of being By your side, always is perhaps best exemplified through our approach and commitment to proactive and meaningful stakeholder engagement. We understand the importance of maintaining open communication channels and feedback mechanisms with all our stakeholder groups. The results of these ongoing interactions are incorporated into our strategic planning processes and represent an important vehicle for helping us to live our sustainability strategy. Shareholders & Investors Customers & Consumers Collaborators & their Families, Labor Unions Community Suppliers FEMSA Annual General Meeting Quarterly results and conference calls Filings and annual disclosures FEMSA Ethics Line Marketing events and expos Customer satisfaction surveys B2B and D2C platforms Website, Contact Us pages, social media FEMSA Ethics Line Organizational Climate Diagnostic survey Employee/manager feedback sessions Website, intranet, emails, Annual Report Townhall meetings and quarterly/ annual meetings FEMSA Ethics Line Partnerships and collaborations Visits to local plants and operations MARRCO Website, social media, Annual Report FEMSA Ethics Line Email and content platform: http://compartefemsa.com/ Supply chain sustainability assessments and risk management evaluations, e.g., EcoVadis Supplier satisfaction surveys Meetings to assess service levels FEMSA Ethics Line performance performance Updates on strategic initiatives Macroeconomic environment concerns Regulatory compliance Product quality, pricing, availability Sustainable products and services Customer satisfaction and experience Productivity and efficiency Supply chain constraints Career development and training Compensation/collective agreements Occupational health and safety Diversity, equity and inclusion Community responsibility and sustainability Progress against 2030 sustainability goals Agile solutions to customer needs Innovative products and services Continuous improvement plans Inclusive recruitment and hiring practices Training and upskilling on ESG issues Safety, health and wellbeing programs Job opportunities Sponsorships and donations Educational and social wellbeing Social programs in each business unit Food and monetary donations Volunteer programs programs Compliance with local legislation Environment, health & safety impacts of operations Collaboration opportunities Compliance on sustainability issues Supply chain constraints Sustainable sourcing Billing and collection Supplier loyalty programs ESG training and Scope 3 GHG reductions Continuous improvement projects 99 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Stakeholder Group Examples of Communication Channels Examples of Topics of Interest Regulators & Business associations Civil society organizations Media Educational institutions Forums, congresses or conferences Advocacy initiatives/public-private alliances MARRCO Public policy advisory FEMSA Ethics Line Renewable energy/GHG emissions Changes in legislation Community development Safety standards and compliance Health and wellness Forums and congresses Press releases and announcements Website, social media, Annual Report MARRCO FEMSA Ethics Line Support, donations and sponsorships Community development Advocacy and public policy Healthy lifestyles and the environment Early childhood Forums and congresses Press releases and announcements Website, social media, Annual Report MARRCO FEMSA Ethics Line Financial information Products and services Technology and digital innovation Sustainability performance Institutional positioning on key issues FEMSA Response Discussions and trainings Designing policies and initiatives Compliance with safety standards and laws Training and development centers Crowdfunding platforms Investment opportunities Open and transparent communication Media outreach strategies Collaboration on communication initaitives Events, meetings and dialogues Outreach programs Website, social media, Annual Report Content sharing and project launches FEMSA Ethics Line Strategic alliances and support Donations and sponsorships Collaboration ideas and opportunities Joint research initiatives Collaborative projects Arts & culture festivals Key Memberships & Associations We seek to build global alliances and collaboration opportunities through our associations with like-minded organiza- tions that further support our mission of generating economic and social value through our companies and institutions. Copyright ©2023 Morningstar Sustainalytics. All rights reserved. This publication contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www. sustainalytics.com/legal-disclaimers. 100 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 key ESG data ESG Data Table(i) Unless otherwise indicated, content for 2022 in the data tables below covers the period Jan. 1, 2022 – Dec. 31, 2022. Our People Disclosure Investment Our People investment (ii) Our People investment Employment Collaborators Total collaborators External collaborators Internal collaborators Gender Internal collaborators - Men Internal collaborators - Women Age group Internal collaborators - 18-29 years old Internal collaborators - 30-50 years old Internal collaborators - 51-59 years old Internal collaborators - 60+ years old Country Argentina Austria Brazil Chile Colombia Costa Rica Units $ Million Mexican Pesos $ Million Dolars # of collaborators # of collaborators # of collaborators % % % % % % # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators 2022 4,100 210 354,346 64,034 290,312 59 41 58 25 16 1 4,222 71 37,566 13,141 22,820 2,001 2021 NA NA 320,808 66,042 254,766 60 40 62 23 14 1 2,305 - 30,563 12,263 17,238 1,802 2020 NA NA 323,542 76,415 247,127 62 38 58 25 16 1 2,167 - 30,281 12,069 15,448 1,480 101 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our People Disclosure Total collaborators Country Ecuador Germany Guatemala Luxemburg Mexico Netherlands Nicaragua Panama Peru Switzerland United States of America Uruguay Collective bargaining agreements Number of unionized collaborators % of collaborators unionized (iii) % of unionized collaborators covered by a contract, pact or collective bargaining agreement New employee hires Units 2022 2021 2020 # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators # of collaborators 4,519 3,294 3,805 13 4,329 - 3,542 - 4,258 - 3,768 - 252,250 241,835 245,157 13 1,214 1,614 588 1,498 3,996 1,686 - 1,303 1,672 480 - 2,526 894 - 1,135 1,650 530 - 1,306 898 # of collaborators 214,434 186,324 179,086 % % 74 100 73 100 NA NA NA 72 100 NA NA NA Total number of new employee hires during the reporting period # of collaborators 174,670 Gender New employee hires - Men New employee hires - Women % % 48 52 102 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our People Disclosure New employee hires Age group New employee hires - 18-29 years old New employee hires - 30-50 years old New employee hires - 51-59 years old New employee hires - 60+ years old Parental leave Total number of employees that took parental leave Employees that took parental leave - Men Employees that took parental leave - Women % of employees that returned to work in the reporting period after parental leave ended % of employees that returned to work in the reporting period after parental leave ended - Men % of employees that returned to work in the reporting period after parental leave ended - Women % of employees that returned to work after parental leave ended that were still employed 12 months after their return to work % of employees that returned to work after parental leave ended that were still employed 12 months after their return to work - Men % of employees that returned to work after parental leave ended that were still employed 12 months after their return to work - Women Diversity, Equity and Inclusion (IV) Employees working at the end of 2022 Total employees 60+ years old Total employees with disabilities Total refugee Units 2022 2021 2020 % % % % # of collaborators # of collaborators # of collaborators % % % % % % # of collaborators # of collaborators # of collaborators 64 31 4 1 4,251 1,041 3,210 86 93 84 73 80 70 4,700 2,000 1,500 NA NA NA NA NA NA NA NA 9,449 2,312 NA NA 78 NA NA 53 NA NA NA NA 97 NA NA 80 NA NA 3,000 1,800 475 3,200 930 200 103 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our People Disclosure Women % of women in executive positions % of women in the total workorce (iii) % of women in senior management positions, i.e. a maximum of two levels below CEO or comparable positions (as a % of total senior management positions) Occupational Health and Safety Worker training on occupational health and safety Total number of collaborator training hours Workers covered by an occupational health and safety management system % of employees who are covered by OHSM system % of workers who are not employees but whose work and/or workplace is con- trolled by the organization who are covered by OHSM system Fatalities as a result of work-related injury Fatalities of direct employees Fatalities of third-party collaborators Injuries as a result of work-related injury % % # of fatalities # of fatalities Lost Time Injury Frequency Rate (LTIFR) per 1,000,000 hours of direct employees LTIFR/million hours Lost Time Injury Frequency Rate (LTIFR) per 100 employees of direct employees LTIFR/100 employees Lost Time Injury Frequency Rate (LTIFR) per 1,000,000 hours of third-party collabo- rators (contractors) v Lost Time Injury Frequency Rate (LTIFR) per 100 employees of third-party collabo- rators (contractors) v LTIFR/million hours LTIFR/100 employees Work-related illness incidence Work-related illnesses incidence rate per 1,000,000 hours of direct employees Illnesses/million hours Work-related illnesses incidence rate per 100 employees of direct employees Illnesses/100 employees Units % % % 2022 27 41 16 2021 24 40 NA 2020 20 38 NA # of hours 645,626 490,481 712,488 100 100 2 8 5.38 1.34 3.75 0.02 0.08 0.02 100 100 1 3 6.03 1.53 NA NA 0.05 0.01 100 100 NA NA 4.9 1.25 NA NA 0.09 0.02 NA Investment in Occupational Health and Safety Total investment in occupational health and safety $ Million Mexican Pesos 1,758 NA 104 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our People Disclosure Training and Education Investment in collaborator training Total hours of training for employees (vi) Employee category – Hours of training Directors Management Employees Unionized Outsourcing Interns Store leaders Commission agents Units $ Million Mexican Pesos # of hours # of hours # of hours # of hours # of hours # of hours # of hours # of hours # of hours Average hours of training per year per employee # of hours-employee/year Programs for upgrading employee skills and transition assistance programs Total participations on Human Rights training Total participations on Culture and leadership Total participations on Technical knowledge Total participations on Health and safety Total participations on trained on Sustainability Total collaborators trained on Human Rights Total collaborators trained on Code of Conduct Total collaborators trained on Discrimination and harassment in the workplace Total hours of training for employees - Human Rights Total hours of training for employees - Culture and leadership Total hours of training for employees - Technical knowledge Total hours of training for employees - Health and safety Total hours of training for employees - Sustainability # of participations # of participations # of participations # of participations # of participations # of collaborators # of collaborators # of collaborators # of hours # of hours # of hours # of hours # of hours 2022 293 7,011,819 5,606 74,312 1,323,783 3,646,240 88,273 13,674 696,354 1,163,577 20 32,585 95,811 530,360 171,390 7,866 32,595 59,180 22,862 72,910 305,595 5,972,715 645,626 14,974 2021 268 10,833,617 2020 169 8,573,290 NA NA NA NA NA NA NA NA 34 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 27 NA NA NA NA NA NA NA NA NA NA NA NA NA 105 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our People Disclosure Units Employees receiving regular performance and career development reviews Total employees receiving regular performance and career development reviews (for example 360°, 9box) # of collaborators Integral Wellbeing Total investment in Integral Wellbeing (vii) Total of social development activities developed Total of social development activities developed - Social Total of social development activities developed - Health Total of social development activities developed - Labor Total of social development activities developed - Economic Total of social development activities developed - Formative Total of collaborators participating in social development activities Total volunteerings performed Total of volunteers that participated in a volunteering Total hours dedicated to volunteering Organizational climate assessment Result of the organizational climate assessment (viii) % of elegible employees who participated in the organizational climate assessment Human Rights Elegible work centers evaluated $ Million Mexican Pesos # of activities # of activities # of activities # of activities # of activities # of activities # of participations # volunteerings # volunteers collaborators # of hours % % Work centers evaluated in occupational risks (including human rights) # work centers Work centers evaluated in occupational risks (including human rights) - accumulated # work centers 2022 8,890 1,776 5,312 1,767 1,136 1,485 434 490 296,964 2,679 100,743 735,570 87 70 52 561 2021 NA NA 5,057 1,335 2,242 907 257 316 405,664 2,979 104,810 360,173 88 86 272 509 2020 NA NA 3,512 2,126 713 448 81 144 677,424 1,533 58,027 1,059,944 NA NA 237 237 106 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our People Disclosure Human Rights Units 2022 2021 2020 Employee training on human rights policies or procedures Total number of hours of employee training on human rights policies or procedures # of hours Total employee training on human rights policies or procedures # of collaborators 72,910 32,585 Non-discrimination Incidents of discrimination and corrective actions taken Total number of complaints received for Discrimination during the reporting period. (see GRI 406-1 for actions taken) # of incidents Total number of complaints received for Harassment during the reporting period. (ix) # of incidents Our Community Investment Our Community investment Our Community investment Local Communities $ Million Mexican Pesos $ Million Dolars Operations with local community engagement, impact assessments, and development programs Percentage of operations Total of community wellbeing initiatives % # of initiatives Total investment on community wellbeing initiatives $ Million Mexican Pesos 88 1,417 833 43 100% 690 260 NA NA NA NA NA NA 100% 876 245 Total of people benefited directly by community wellbeing initiatives # people benefited 3,702,343 2,976,818 Procurement Practices Supplier information Total number of suppliers (x) Argentina Brazil # of suppliers # of suppliers # of suppliers 53,998 1,340 9,653 NA NA NA NA NA NA NA NA NA NA 750 NA NA NA NA NA 107 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our Community Disclosure Procurement Practices Supplier information Chile Colombia Costa Rica Ecuador Guatemala Mexico Nicaragua Panama Peru United States of America Uruguay Number of local suppliers Proportion of spending on local suppliers % of countries with Purchase from Local Suppliers > 90% at the level: Business/Country Our Planet (xi, xvi) Investment (xii) Our Planet investment Our Planet investment Materials Total materials used Virgin materials used Recycled materials used Virgin materials used in product Recycled materials used in product Units 2022 2021 2020 # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers # of suppliers % $ Million Mexican Pesos $ Million Dollars tonnes tonnes tonnes tonnes tonnes 3,570 6,015 1,120 527 875 31,673 453 803 - 17 855 52,695 67 7,166 366 627,680 472,466 155,214 40,405 46,262 NA NA NA NA NA NA NA NA NA NA NA NA 64 673 32 548,516 399,129 149,387 75,649 42,886 NA NA NA NA NA NA NA NA NA NA NA NA NA 890 44 326,828 225,053 101,775 47,861 28,338 108 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our Planet Disclosure Materials Virgin materials used in packaging Recycled materials used in packaging Main Packaging Materials - Wood/Paper fiber packaging Main Packaging Materials - Wood/Paper fiber packaging - Recycled Main Packaging Materials - Metal (e.g.aluminum or steel) packaging Main Packaging Materials - Metal (e.g.aluminum or steel) packaging - Recycled Main Packaging Materials - Glass packaging (xiii) Main Packaging Materials - Plastic packaging Main Packaging Materials - Plastic packaging - Recycled Main Packaging Materials - Plastic packaging - Recycled Main Packaging Materials - Plastic recyclable - Packaging Main Packaging Materials - Plastic recyclable - Packaging Energy consumption within the organization Total energy consumed Total energy consumed from renewable sources Total energy consumed from non-renewable sources Indirect energy Indirect energy from renewable sources Indirect energy from non-renewable sources Sustainability-Linked Bond: KPI 2: Percentage of total electricity consumption coming from renewable sources. See "Sustainability-Linked Bond Framework (SLB)" section Units tonnes tonnes tonnes % tonnes % tonnes tonnes tonnes % tonnes % GJ GJ GJ GJ GJ GJ % 2022 432,061 108,953 5,893 32 33,608 63 135,711 363,902 86,018 24 329,029 90 22,892,310 6,303,486 16,588,824 10,795,014 6,259,078 4,535,936 2021 323,480 106,500 3,376 21 33,780 66 85,295 306,844 83,455 27 276,008 90 21,186,268 6,044,978 15,141,290 9,893,049 6,021,761 3,871,288 2020 177,192 73,437 NA NA NA NA NA 249,954 73,028 29 249,892 99 16,902,143 5,850,564 11,051,579 9,607,001 5,827,728 3,779,273 58.0 60.9 53 109 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our Planet Disclosure Energy consumption within the organization Direct energy Direct energy fixed source from renewable sources Direct energy fixed source from non-renewable sources Direct energy mobile source from renewable sources Direct energy mobile source from non-renewable sources Energy intensity Energy intensity (GJ/ total revenues) Water consumption Total water withdrawn from all sources Total volume of groundwater Total volume of third-party water Total volume of surface water Total volume of produced water CO2 Emissions Total CO2 Emissions (tCO2e) Scope 1 CO2 emissions (direct) Scope 1 CO2 emissions (direct fixed source) (xiv) Scope 1 CO2 emissions (direct mobile source) Scope 2 CO2 emissions (indirect) Scope 3 CO2 emissions (Category : Business travel) Emissions intensity (tCO2e/total revenue) Waste Total waste Total hazardous waste Total non-hazardous waste Total non-hazardous waste diverted from landfill Units 2022 2021 2020 GJ GJ GJ GJ GJ GJ/ $ Million Mexican Pesos 1,000 m3 1,000 m3 1,000 m3 1,000 m3 1,000 m3 tonnes of CO2-eq tonnes of CO2-eq tonnes of CO2-eq tonnes of CO2-eq tonnes of CO2-eq tonnes of CO2-eq tonnes of CO2-eq / $ Million Mexican Pesos tonnes tonnes tonnes tonnes 12,097,296 20,312 1,399,317 24,096 10,635,570 34 37,210 19,399 16,164 1,637 10 1,732,708 1,258,178 475,572 782,606 474,530 9,369 2.5 289,692 8,992 280,700 192,949 11,293,219 22,198 1,342,793 1,019 9,927,209 38 34,298 18,413 14,261 1,624 NA 1,539,449 1,133,191 441,639 691,552 406,258 3,503 2.7 285,948 4,621 281,327 150,733 7,295,142 22,533 1,768,130 303 5,504,176 34 31,938 27,197 4,741 N/A NA 948,464 496,138 102,346 393,791 452,326 NA 1.9 260,932 13,235 247,697 128,303 110 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Our Planet Disclosure Waste Sustainability-Linked Bond: KPI 1: Percentage of total operational waste diverted from landfills. See “Sustainability-Linked Bond Framework (SLB)” section Total waste (hazardous and non-hazardous) recycled or reused Total waste (non-hazardous) landfilled Total waste (hazardous and non-hazardous) incinerated (with energy recovery) Total waste (hazardous and non-hazardous) incinerated (without energy recovery) Total hazardous waste with final disposal (confinement) or with specia handling waste Management of significant waste- related impacts Percentage of Coca-Cola FEMSA plants with zero waste certification Units % tonnes tonnes tonnes tonnes tonnes % Governance (xi) Disclosure Anti-corruption Training Total governance body members that were communicated about anti-corruption topics (Code of Ethics, which includes anti-corruption issues) # of governance body members % of governance body members that were communicated about anti-corruption policies and procedures % Memberships and affiliations Total of memberships and affiliations (xv) # of memberships 2022 68.7 172,699 87,751 21,335 304 7,604 77 2022 17 100 766 2021 53 153,156 130,595 NA NA 2,198 NA 2021 18 100 475 2020 53 139,740 119,977 NA NA 1,216 NA 2020 18 100 321 111 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Governance Disclosure Ethics Code of Ethics Units 2022 2021 2020 Total number of complaints received for alleged violations of the Code of Ethics # of complaints Total number of complaints received for alleged violations of the Code of Ethics that were investigated, resolved and closed % of complaints received for alleged violations of the Code of Ethics that were investigated, resolved and closed Total number of complaints received for alleged violations of the Code of Ethics that continue under investigation % of complaints received for alleged violations of the Code of Ethics that continue under investigation % of anonymous complaints % of non-anonymous complaints Complaints received for alleged violations of the Code of Ethics by category Work environment (Human Resources) Operations Financial Information Doubts and guidance Appropriate corrective measures taken in closed cases by category Administrative Act Feedback No action required Review of Policies and/or Processes Suspension Dissmisal Training Others # of complaints % # of complaints % % % # of complaints # of complaints # of complaints # of complaints # of cases # of cases # of cases # of cases # of cases # of cases # of cases # of cases 3,927 3,014 77 913 23 72 28 3,183 568 135 41 247 999 857 147 9 407 64 284 4,410 3,597 81 813 18 NA NA 3,562 830 18 NA NA NA NA NA NA NA NA NA 3,457 2,849 82 608 18 NA NA 2,633 788 36 NA NA NA NA NA NA NA NA NA 112 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 In 2022, the investment of the Our People pillar included the cost of health insurance for our employees, which is done annually but was not included in this total in previous years. Notes: i. NA: Not Available ii. iii. % based on total internal collaborators. Includes only internal collaborators. iv. Includes contractors from AlPunto, Coca-Cola FEMSA and Health Division. v. vi. An in-depth analysis was conducted derived from the variation found in the hours reported in 2021, compared to those reported in 2020 and 2022. It was identified that one external database generated a failure pulling mixed information of several years and not only of 2021; The hours reported in 2021 were 14,244,673, but the correct figure was 10,833,617. This year, that external database was stopped to use only reports that can be generated from our different learning platforms. Includes workplace harassment and sexual harassment. Actions taken are detailed in GRI 406-1. vii. In 2022, investment in Integral Wellbeing includes the cost of medical expenses insurance for our collaborators, which is done annually but was not included in this total in previous years. viii. Mercer Sirota Employee Engagement Survey of the benchmark for high-performance companies was 89. ix. x. Total suppliers may differ from the total detailed by country since the same supplier may be in several countries. xi. Unless otherwise indicated, the Our Planet and Governance section of the Key ESG Data section does not include Envoy or Valora. xii. Includes Coca-Cola FEMSA Green Bond. xiii. Glass packaging is 100% virgin. xiv. 2021 Scope 1 GHG emissions have been updated to include fugitive emissions such as refrigerant-specific gases. xv. Considers associations, institutions, companies and organizations with which there was some type of association or relationship. Organizations in which two or more Business Units or corporate areas are affiliated are discounted. In 2022, information on more countries is included, particularly for FEMSA Foundation, Proximity and Envoy. Payment of fees is the criterion for the selection of associations. xvi. For purposes of these metrics, Coca-Cola FEMSA considered owned and third-party distribution centers managed by KOF. Plants acquired during the year 2022 will report on these metrics in the 2023 Integrated Report. 113 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI content index GRI Standard Disclosure GENERAL DISCLOSURES GRI 102: General Disclosures 1. Organizational Profile 1. The organization and its reporting practices Location 2-1 2-2 2-3 2-4 2-5 Organizational details See " Stock Markets and Symbols" section. Entities included in the organization’s sustainability reporting See "Financial Performance Summary" section. Reporting period, frequency and contact point See "About this report, Reporting Scope" section. Restatements of information 2021 Scope 1 GHG emissions have been updated to include Refrigerant Gases consumptions. Total hours of training for employees reported in 2021 was updated. See “Total hours of training for employees“, in “Key ESG data”. External assurance See “ESG Independent Limited Assurance Report” section. 2. Activities and workers Activities, value chain and other business relationships 2-6 2-7 2-8 3. Governance 2-9 2-10 2-11 See "How We Create Value" section. See “Dear Shareholders” section. See “Management Discussions & Analysis” section. See “Key ESG Data” Economic table, under the GRI 204: Procurement Practices, section. Employees Workers who are not employees See "Corporate Structure" section. See “Key ESG Data. Our People” section. Governance structure and composition See "Corporate Governance" section. See webpages: https://femsa.gcs-web.com/es/corporate-governance/board-of-directors https://femsa.gcs-web.com/es/corporate-governance/committees Nomination and selection of the highest governance body See “Governance. Corporate Responsability” section. See webpage: https://femsa.gcs-web.com/es/corporate-governance/board-of-directors Chair of the highest governance body See “Governance. Corporate Responsability” section. See webpage: https://femsa.gcs-web.com/es/corporate-governance/board-of-directors 114 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Location Role of the highest governance body in overseeing the managemrasent of impacts Delegation of responsibility for managing impacts Role of the highest governance body in sustainability reporting Conflicts of interest Communication of critical concerns 2-12 2-13 2-14 2-15 2-16 See “Governance. Corporate Responsability” section. See webpages: https://www.femsa.com/en/about-femsa/corporate-governance/ https://femsa.gcs-web.com/corporate-governance/ https://www.femsa.com/en/sustainability/sustainability-strategy/our-vision/ https://www.femsa.com/en/sustainability/sustainability-strategy/materiality/ https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/ See “Governance.” section. See “Sustainability Governance” section. See webpages: https://www.femsa.com/en/about-femsa/corporate-governance/ https://femsa.gcs-web.com/corporate-governance/ See “Governance.” section. See “ Sustainability Governance” section. See webpages: https://www.femsa.com/en/about-femsa/corporate-governance/ https://femsa.gcs-web.com/corporate-governance/ See our “Code of Ethics”: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf FEMSA has developed an Ethical Compliance System, managed by an independent firm and available 24 hours a day, 365 days a year, open to collaborators as well as other stakeholders, through four different channels, all of them confidential and anonymous: telephone, webpage, e-mail, and chat. In 2022, a total of 3,927 cases were reported through the Ethics Line and reviewed, of which 914 are still under investigation and 3,014 were resolved and closed. See “ FEMSA Ethical System” section. See “Whistleblower system website” https://secure.ethicspoint.com/domain/media/en/gui/80470/index.html See “Code of Ethics” https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf 115 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Location Collective knowledge of the highest governance body Evaluation of the performance of the highest governance body Remuneration policies Process to determine remuneration The reliability and transparency of our corporate governance policies at FEMSA are essential to our long-term success. As always, we remain committed to reporting our results with objectivity and integrity, complying with the requirements of the Mexican Generally Accepted Accounting Principles, and exercising our responsibilities throughout the company in accordance with the highest business ethics principles. Our corporate governance principles provide a framework for the operation of our company as we strive to work in the best interests of our shareholders. See “Governance” section. See webpages: https://femsa.gcs-web.com/es/corporate-governance/responsible-corporate-governance https://www.femsa.com/en/about-femsa/corporate-governance/ See web page Corporate Governance > “Corporate Practices and nominations Committee” https://femsa.gcs-web.com/corporate-governance/committees See Corporate Governance Principles and Best Practices Survey: https://femsa.gcs-web.com/static-files/6c659c77-1427-444b-83b2-d64846b971c1 Our Corporate Practices Committee, composed entirely of independent directors, reviews, and recommends management compensation programs to ensure that they are aligned with shareholders’ interests and corporate performance. See “Governance > Corporate Practices and Nomination Committee”: https://femsa.gcs-web.com/corporate-governance/committees Our Corporate Practices Committee, composed entirely of independent directors, reviews, and recommends management compensation programs to ensure that they are aligned with shareholders’ interests and corporate performance. See “Governance > Corporate Practices and Nomination Committee”: https://femsa.gcs-web.com/corporate-governance/committees 2-17 2-18 2-19 2-20 2-21 Annual total compensation ratio Not disclosed 4. Strategy, policies and practices 2-22 Statement on sustainable development strategy See “Dear Shareholders.” section. See “Our Sustainability Strategy” section. 116 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Location Policy commitments Embedding policy commitments Processes to remediate negative impacts Mechanisms for seeking advice and raising concerns Compliance with laws and regulations FEMSA currently has its Code of Ethics, Supplier Guiding Principles, Human and Labor Rights Corporate Policy, Sustainability Corporate Policy, Environment Corporate Policy, Community Commitment Corporate Policy, and Anti-Corruption Corporate Policy. See webpages: https://www.femsa.com/en/sustainability/sustainability-strategy/materiality/ https://www.femsa.com/en/sustainability/sustainability-strategy/our-commitment/ FEMSA’s values: https://www.femsa.com/en/about-femsa/organizational-culture/ Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf Supplier Guiding Principles: https://www.femsa.com/wp-content/uploads/2022/08/FEMSA_Suppliers-Guiding-Principles.pdf See “Dear stakeholders”, “Our Sustainability Strategy”, “Our People”, “Our Community”, “Our Planet”, “FEMSA Foundation”, “Governance” sections for information on how we embed policy commitments for responsible business conduct throughout our activities and business relationships. See “Dear stakeholders”, “Our Sustainability Strategy”, “Our People”, “Our Community”, “Our Planet”, “FEMSA Foundation”, “Governance” sections for information on our managerial and programmatic approach to addressing key environmental, social and governance issues. See “Stakeholder Engagement” section. See “FEMSA Ethical System” section See “FEMSA Ethical System” section. Whistleblower system website: https://secure.ethicspoint.com/domain/media/en/gui/80470/index.html Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf FEMSA received no significant fines or sanctions for non-compliance with laws/regulations in 2022, including social, economic, or environmental issues. During 2022, 1,317 minor compliance incidents were identified throughout the countries and point of sales in which we operate (excluding Valora and Envoy), including topics such as product and service information and labeling, marketing communications, environmental (6 minor incidents), labor legislation, among others. (By “significant”, we mean the fine/penalty individually costs more than $10,000 USD (or equivalent in Mexican Pesos, by “minor”, we mean the fine/penalty individually costs less than $10,000 USD”) Membership associations See “Memberships and Associations” section. See “Key ESG Data. Our Community” section. 2-23 2-24 2-25 2-26 2-27 2-28 117 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure 5. Stakeholder engagement Approach to stakeholder engagement 2-29 Location At FEMSA we engage with a variety of stakeholders and maintain constant communication with them. These stakeholders include nonprofit organizations, investors, industries, specialized institutions, governments, consumers, clients, suppliers, collaborators, society, and the media, among others. See “Materiality” section See “Stakeholder Engagement” section. See webpage: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/ 2-30 Collective bargaining agreements See “Key ESG Data > Our People” section. List of material topics Management of material topics 3-2 3-3 MATERIAL TOPICS Our Planet Topics Management Approach Management of material topics 3-3 See “Materiality” section. See “FEMSA Priority Topics” section. See webpages: https://www.femsa.com/en/sustainability/sustainability-strategy/materiality/ https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/ See “Dear stakeholders”, “Our Sustainability Strategy”, “Our People”, “Our Community”, “Our Planet”, “FEMSA Foundation”, “Governance” sections for information on how we embed policy commitments for responsible business conduct throughout our activities and business relationships. See “Materiality” section. See “Our Planet” section - Climate Action section. - Water Management section. - Circular Economy section. FEMSA is committed to promote the reforestation of ecosystems, promote urban tree-planting, end all deforestation and protect biodiversity, promoting the protection and conservation of endemic ecosystems. 118 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Materials 301-1 Materials used by weight or volume Recycled input materials used 301-2 Energy 302-1 302-3 302-4 302-5 Water and Effluents 303-1 303-2 303-3 303-4 303-5 Emissions 305-1 305-2 305-3 305-4 305-5 Energy consumption within the organization Energy intensity Reduction of energy consumption Reductions in energy requirements of products and services Interactions with water as a shared resource Management of water discharge-related impacts Water withdrawal Water discharge Water consumption Direct (Scope 1) GHG emissions Energy indirect (Scope 2) GHG emissions Other indirect (Scope 3) GHG emissions GHG emissions intensity Reduction of GHG emissions Location “Key ESG Data” Our Planet table, section. FEMSA seeks the elimination of non-recyclable single-use plastic in our operation, ensure that our packaging uses recycled inputs and is recyclable at the end of its useful life, promote the elimination, reduction, recyclability, and recycled content in our suppliers packaging and maximizes the recyclability and recycled content of our own-brand products. We have associated programs regarding the use of packing. For example, to increase the use of reusable packaging, the use of recyclable packaging, to phase out single-use plastic packaging, to increase the use of recycled material as packaging solutions, to ensure that recyclable packaging is actually recycled and investing in R&D resources to sustainable packaging and alternative solutions. See “Sustainable Products & Services” section. See “Climate Action” section “Key ESG Data” Our Planet section. See “Materiality” section. See “Our Planet” section. See “Water Management“ section Key ESG Data” Our Planet section. See “Climate Action” section. “Key ESG Data” Our Planet section UNGC 7,8,9 UNGC 7,8,9 7,8 7,8,9 UNGC 7,8,9 UNGC 7,8 8 8,9 119 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Waste 306-1 306-2 306-3 306-4 306-5 Waste generation and significant waste-related impacts Management of significant waste- related impacts Waste generated Waste diverted from disposal Waste directed to disposal Supplier Environmental Assessment Location See “Materiality” section. See “Our Planet” section. - Circular Economy section. “Key ESG Data” Our Planet section. 308-1 308-2 New suppliers that were screened using environmental criteria We promote best practices in human rights, environment, community, ethics, and values among our suppliers through our code of ethics, “Supplier Guiding Principles”. We ensure that all our suppliers are aware of these practices. Negative environmental impacts in the supply chain and actions taken As of December 2022, no negative environmental impacts in the supply chain were identified or investigated during the reporting period. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf Our PeopleTopics Management Approach Management of material topics 3-3 See “Materiality” section. See “Our People” section. - Human and Labor Rights section. - Diversity, Equity, and Inclusion section. - Integral Wellbeing section. See “Corporate Governance” section. UNGC 7,8,9 UNGC 7,8,9 7,8,9 120 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 UNGC 10 GRI Standard Disclosure Anti-corruption Location Operations assessed for risks related to corruption Communication and training about anti-corruption policies and procedures Confirmed incidents of corruption and actions taken 205-1 205-2 205-3 As we do every year, we reviewed and updated our Code of Ethics and shared it with all our collaborators. In addition, we have an online certification on the Code of Ethics, which was taken by collaborators in some of our Business Units. Our Business Code of Ethics covers all areas of professional conduct and is applicable to all our employees, including our Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer. All of our employees are required to sign a statement indicating their understanding of and adherence to these policies. See “Code of Ethics” https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf See “Ethics & Legality Culture” section. See “Governance” section. The Secretary of the Board ensures that the members of the Board of Directors annually sign the Commitment Letter to comply with FEMSA’s Code of Ethics, which includes Anti-corruption statements. During 2022, we conducted training sessions for our collaborators on topics such as anti-corruption, anti-money laundering, personal data protection, among others, in which FEMSA’s strategic areas participated. In addition to the Code of Ethics, we have Corporate Policies which are an essential part of our corporate governance. These policies establish the guidelines we should follow to conduct ourselves with integrity and responsibility, becoming a reference for our Culture. These policies are mandatory for FEMSA and all its employees. To ensure compliance, we have established controls to prevent, identify, investigate, sanction and remedy any possible risk of violation. See “Anti-Corruption FEMSA’s Corporate Policy” : https://www.femsa.com/wp-content/uploads/2022/01/Anti-Corruption-FEMSA.pdf See “Governance” section. Our collaborators must disclose any instances of corruption or misbehavior as soon as they are identified. To correct the situation and prevent it from happening again, an external inquiry is conducted with the necessary follow-up steps, such as disciplinary actions, among others. In addition to our Code of Ethics, FEMSA’s perspective on bribery and corruption is reflected in the “Anti-Corruption FEMSA’s Corporate Policy”, procedures, and training was available to all employees on the risks of bribery and corruption and how to avoid them. See our 20-F form. https://femsa.gcs-web.com/es/financial-reports/20fs 121 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Employment Location 401-1 New employee hires and employee turnover See “Key ESG Data” Our People section. Benefits provided to full-time employees that are not provided to temporary or part- time employees 401-2 401-3 Parental leave Labor Management Relations At FEMSA we look for employees who are committed and passionate about serving others, to whom we offer working conditions and benefits that exceed those of the law. We also offer a work environment of constant learning, growth, and development. FEMSA fosters employees’ health and wellbeing. Depending on the business unit, different programs or initiatives in the following areas may apply: flexible working hours, working-from-home arrangements, part-time working options, childcare facilities or contributions, breast-feeding/lactation facilities or benefits, paid parental leave (for female and male employees), among others. See “Key ESG Data” Our People section 402-1 Minimum notice period regarding operational changes Notices of operational changes are made in accordance with the applicable laws of the countries in which we operate. Occupational Health and Safety Occupational health and safety management system 403-1 403-2 Hazard identification, risk assessment, and incident investigation All FEMSA's Business Units have Industrial Safety and Occupational Health management systems according to their activities and line of business. They are also in compliance with FEMSA's Corporate Policies and the legal framework of the countries in which we operate. Their main objective is to create safe workplaces and healthy lifestyles. All FEMSA’s Business Units have certified professionals in charge of the administration of the Occupational Health and Safety Management Systems, such as the following: - Compliance with applicable regulations according to their line of business. - Compliance with internal Occupational Health and Safety policies. - Identification and mitigation of risks in the work centers. - Compliance with the Industrial Safety and Occupational Health programs. - Monitoring the health and safety of employees. - Management of different communication mechanisms so that collaborators, clients and third parties can report activities or unsafe conditions and/or acts at work. - Corporate-level internal evaluations to monitor compliance with management systems. UNGC 6 122 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Location Occupational health services Worker participation, consultation, and communication on occupational health and safety At FEMSA we have medical care services that contribute to the supervision and surveillance of our collaborators’ health in a preventive manner. These include early detection of illnesses associated with working conditions, as well as providing quality medical care to collaborators who present any discomfort during their workday. Main Activities: - Medical attention to collaborators. - Application of entrance and periodic medical examinations. - Elaboration of clinical history according to exposure risks. - Emergency medical attention. - Accident investigation. - Evaluations of the work environment (industrial hygiene). - Vaccination campaigns. - Periodic reviews are scheduled to audit and contribute to the improvement of the quality and compliance of the service. At FEMSA there are Industrial Safety and Occupational Health Committees made up of representatives from all the Business Units, through which different topics are addressed, such as: - Updates in Safety and Health programs. - KPIs (Indicators of Absenteeism, Risk Premium, Fatalities) - Update of policies and guidelines - Communication of relevant health and safety information. We have various tools, including Organizational Climate Surveys, to understand our collaborators’ perceptions towards management systems, work environment, relationships with their supervisors, processes, and assigned tasks. Worker training on occupational health and safety See “Protect Physical, Mental & Emotional Health” section. “Key ESG Data” Our People section. 403-3 403-4 403-5 123 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Location Promotion of worker health 403-6 403-7 403-8 403-9 403-10 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Workers covered by an occupational health and safety management system Work-related injuries Work-related ill health See “Protect Physical, Mental & Emotional Health” section “Key ESG Data” Our People section. FEMSA promotes different health care programs internally and in collaboration with public and private institutions depending of the Business Units, such as the following: - Vaccination Campaigns. - Nutritional Consultations. - Psychosocial support consultations. - Workshops oriented to the promotion of mental health. - Awareness and prevention campaigns (e.g. breast cancer, prostate cancer, smoking, cardiovascular risk factors, etc.). - Activities that promote physical activity(for example running, cycling, etc.). See “Protect Physical, Mental & Emotional Health” section. FEMSA is committed to providing safe workspaces and supporting healthy lifestyles for all employees. To achieve this, we have implemented Occupational Health and Safety Programs across all business units, using the expertise of Occupational Health and Occupational Risk Prevention professionals to continuously improve our processes. These Management Systems serve as a fundamental tool towards achieving our goals. 100% of our collaborators are covered by an occupational health and safety management system. “Key ESG Data” Our People section. Training and Education 404-1 Average hours of training per year per employee "Key ESG Data" Our People section. 404-2 404-3 Programs for upgrading employee skills and transition assistance programs See "Career Development and Continuous Learning" section. In Mexico, we promote the Life and Development Program (PLAVIDE). It is designed so that personnel approaching retirement, along with their families, prepare for this new stage, understanding that it is a natural process in life. Percentage of employees receiving regular performance and career development reviews "Key ESG Data" Our People section UNGC 6 124 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Diversity and Equal Opportunity Diversity of governance bodies and employees 405-1 Non-discrimination Incidents of discrimination and corrective actions taken 406-1 Freedom of Association and Collective Bargaining Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk 407-1** Location “Key ESG Data” Our People section. See “Diversity, Equity and Inclusion” section. See “Corporate Responsability” section. Our Human Resources area include the FEMSA’s Code of Ethics, and its topics contained such as discrimination and harassment, in all course inductions for all employees. Additionally, specifically training programs are executed to reinforce these topics throughout the reporting year. In 2022, a total of 22,862 collaborators reinforced their knowledge on Discrimination and harassment in the workplace. Our collaborators must disclose any instances of discrimination as soon as they are discovered. To correct the situation and prevent future incidents, an internal inquiry is conducted with the necessary follow-up steps, such as disciplinary actions, among others. FEMSA’s Code of Ethics reflects the company’s perspective on discrimination incidents and how to avoid them. In the reporting year, 88 incidents on “Discrimination and/or any lack of Inclusion and Diversity” were reported through our Whistleblower system and 54 were closed as of December 31, 2022. Of these 54 reports, feedback was provided in 28, no necessary actions in 8, the employment relationship was termi- nated in 6, an administrative report was issued in 2 and training was provided in 1. In the reporting year, 1,417 incidents on “Abuse of Authority/Workplace Harassment” were reported through our Whistleblower system and 1,064 were closed as of December 31, 2022. Of these 1,064 reports, feedback was provided in 414, no necessary actions in 254, the employment relationship was terminated in 162, an administrative report was issued in 97, suspension was taken in 6, Policy/Process Review in 29, training was provided in 16, and other in 86. FEMSA and its Business Units comply with all laws designed to preserve the right to exercise freedom of association and collective bargaining. FEMSA has not identified any operations at which those rights are at significant risk. During 2022, 52 work centers were evaluated for occupational risks (including human rights). In 2022, no risks have been identified in FEMSA’s Business Units in relation to human rights. We expect the same ethical conduct from our business partners. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf See Suppliers Guiding Principles: https://www.femsa.com/en/press-room/documents/suppliers-guiding-principles/ UNGC 6 UNGC 6 UNGC 3 125 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Child Labor Location Operations and suppliers at significant risk for incidents of child labor 408-1** Forced or Compulsory Labor Operations and suppliers at significant risk for incidents of forced or compulsory labor 409-1** Security Practices We value, respect, and protect the people who work at FEMSA and do not allow child or forced labor. We comply with all child labor laws and support the eradication of child labor and exploitation. We expect the same ethical conduct from our business partners. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf See Suppliers Guiding Principles: https://www.femsa.com/en/press-room/documents/suppliers-guiding-principles/ We value, respect, and protect the people who work at FEMSA and do not allow forced labor. We comply with all labor laws and support the eradication of forced or compulsory labor. We expect the same ethical conduct from our business partners. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf See Suppliers Guiding Principles: https://www.femsa.com/en/press-room/documents/suppliers-guiding-principles/ 410-1 Security personnel trained in human rights policies or procedures “Key ESG Data” Our People section. Rights of Indigenous Peoples Incidents of violations involving rights of indigenous peoples 411-1 As of December 2022, no incidents of violations involving the rights of indigenous peoples were identified or investigated during the reporting period. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf UNGC 5 UNGC 4 126 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Human Rights Assessment Location Operations that have been subject to human rights reviews or impact assessments 412-1** FEMSA and its Business Units comply with all laws designed to preserve the right to exercise freedom of association and collective bargaining. FEMSA has not identified any operations at which those rights are at significant risk. During 2022, 52 work centers were evaluated for occupational risks (including human rights). In 2022, no risks have been identified in FEMSA’s Business Units in relation to human rights. We expect the same ethical conduct from our business partners. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf See Suppliers Guiding Principles: https://www.femsa.com/en/press-room/documents/suppliers-guiding-principles/ 412-2 Employee training on human rights policies or procedures “Key ESG Data” Our People section. Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening 412-3 The “Suppliers Guiding Principles” were prepared based on FEMSA’s Code of Ethics and Corporate Policies. They outline the minimum required expectations for suppliers’ behavior in key areas of Human and Labor Rights, Sustainability, Culture of Lawfulness, Information Security. It is the supplier’s responsibility, in its relationship with FEMSA, to adopt the necessary methods and practices to comply with the Guiding Principles contained in this document. The “Suppliers Guiding Principles” shall be complied with by all current and potential FEMSA suppliers participating in the different operations and supply chains. The term “supplier” includes individuals and legal entities that provide goods, render services, are distributors, agents, intermediaries, representatives, as well as any third party acting on behalf of and/or representing FEMSA. See Suppliers Guiding Principles: https://www.femsa.com/en/press-room/documents/suppliers-guiding-principles/ 127 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Our CommunityTopics Management Approach Management of material topics 3-3 Economic Performance Location See “Materiality” section See “Our Community” section. - Community Wellbeing section. - Economic Development section. - Sustainable Sourcing, section. 201-1 201-2 201-3 201-4 Direct economic value generated and distributed See "Key ESG Data" Our Community section. Financial implications and other risks and opportunities due to climate change See "Governance > Climate-Related Risks and Opportunities" section. See “TCFD Index” section. Defined benefit plan obligations and other retirement plans Financial assistance received from government FEMSA and its Business Units have a Benefits Plan that exceeds those stipulated by Mexican law. It includes benefits for family and financial planning, and other benefits focused on improving employees’ quality of life. There are also retirement programs, one of which focuses on voluntary retirement contributions. One of these programs is the “Cultivemos” program, which is a retirement benefit plan in which for every peso that an employee voluntarily saves, the company will contribute another peso to the fund. Employees can later tap into these savings at the time of retirement. This benefit and the proportion of the company’s contribution are based on the employee’s seniority. Given that FEMSA operates in different countries, the legal frameworks on financial assistance received from the government are different. FEMSA is committed to always operate within the legal framework in every country and to be an example of good practices for the private sector, namely go above and beyond of that framework. Market Presence 202-1 202-2 Ratios of standard entry level wage by gender compared to local minimum wage Not disclosed Proportion of senior management hired from the local community Not disclosed Indirect Economic Impacts 203-1 203-2 Infrastructure investments and services supported Significant indirect economic impacts See “Our Community” section. “Key ESG Data” Our Community section UNGC 7 128 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Procurement Practices Proportion of spending on local suppliers 204-1 Anti-competitive Behavior Location FEMSA has a supply chain comprised of 53,998 suppliers. % of purchases from local suppliers (local providers are those that operate in the country they serve) 67%. FEMSA identify critical suppliers using different elements such as High-volume suppliers, Critical component suppliers and Non-substitutable suppliers. The members of our value chain are aware of, committed to, and comply with the FEMSA Supplier Guiding Principles, included our agricultural suppliers. For example, in our OXXO Stores, Andatti Coffee, an Exclusive Brand of CAFFENIO (FEMSA Company), promotes the protection of biodiversity in the coffee- growing area of Veracruz, México. COSECHA Program has been supporting the development of coffee growers that are part of CAFFENIO value chain in the productive areas of Veracruz for more than 10 years. In alliance with Pronatura Veracruz (an environmental organization), CAFFENIO has been training, reforesting, and certifying coffee farms that meet the criteria to be a Protected Conservation Area. For these efforts, on 2021, CAFFENIO received the”Los Bóscares Award” in the Supply Chain with Zero Deforestation category with the project “Protection of biodiversity in the coffee-growing area of the High Mountains, Veracruz.” See “Key ESG Data” Our Community section. Tax 206-1 207-1 207-2 207-3 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices See our 20-F form. https://femsa.gcs-web.com/financial-reports/20fs Approach to tax Tax governance, control, and risk management Stakeholder engagement and management of concerns related to tax See our 20-F form. https://femsa.gcs-web.com/financial-reports/20fs 129 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Local Communities Location Operations with local community engagement, impact assessments, and development programs Operations with significant actual and potential negative impacts on local communities 413-1 413-2 Supplier Social Assessment 414-1 New suppliers that were screened using social criteria Negative social impacts in the supply chain and actions taken Political contributions 414-2 Public Policy 415-1 Customer Health and Safety 416-1 416-2* Assessment of the health and safety impacts of product and service categories Incidents of non-compliance concerning the health and safety impacts of products and services At FEMSA, community relations are managed at the country level to adapt to local circumstances. By 2022, 100% of FEMSA’s Business Units developed community actions. See “Our Community” section. “Key ESG Data” Our Community section. The internal methodology developed by FEMSA’s Risk Management and Community Relationship Model (MARRCO) allows us to identify risks and opportunities to create value and optimize our actions and programs. MARRCO supports the development of capabilities through multidisciplinary teams in our plants and distribution centers. See “Our Community” section. “Key ESG Data” Our Community section. We promote good practices in the areas of human rights, environment, community, ethics and values among our suppliers through our code of ethics, “Supplier Guiding Principles”, and we seek to ensure that they are all aware of them. See “Sustainable Sourcing” section. “Key ESG Data” Our Community section. Given that FEMSA operates in different countries, the legal frameworks on political contributions vary. FEMSA is committed to always operating within each country’s legal boundaries to be an example of good practices for the private sector, and go above and beyond that framework. Additionally, in the case of Mexico, FEMSA has signed the Code of Ethics established by the Consejo Coordinador Empresarial (Business Coordination Council), which prohibits donations to promote either political campaigns, candidates, or committees. Nevertheless, FEMSA’s Code of Business and Code of Ethics forbids any contribution that could be considered corruption according to each operating country’s laws. Our production processes comply with the highest quality standards and our ingredients comply with the local standards of each of our operations, as well as with the standards of other regulatory agencies. See “Supporting Healthy Lifestyles” section. As of December 2022, no incidents of non-compliance concerning the health and safety impacts of products and services were identified or investigated during the reporting period. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf UNGC 10 130 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 GRI Standard Disclosure Marketing and Labelling Location Requirements for product and service information and labelling Incidents of non-compliance concerning product and service information and labeling Incidents of non-compliance concerning marketing communications 417-1 417-2* 417-3* Customer Privacy 418-1* Substantiated complaints concerning breaches of customer privacy and losses of customer data In order to enable our consumers to make informed choices, our product labels feature clear and accessible nutritional content information. See “Supporting Healthy Lifestyles” section FEMSA received no significant fines or sanctions for non-compliance with laws or regulations in 2022, including social, economic, or environmental issues. During 2022, 425 minor compliance incidents of non-compliance concerning product and service information and labeling were identified throughout the countries and point of sales in which we operate (excluding Valora and Envoy). (By “significant”, we mean the fine/penalty individually costs more than US$ 10,000 (or equivalent in Mexican Pesos, by “minor”, we mean the fine/penalty individually costs less than US$ 10,000”) FEMSA received no significant fines or sanctions for non-compliance with laws/regulations in 2022, including social, economic, or environmental issues. During 2022, 22 minor compliance incidents of non- compliance concerning marketing communications were identified throughout the countries and point of sales in which we operate (excluding Valora and Envoy). (By “significant”, we mean the fine/penalty individually costs more than US$ 10,000 (or equivalent in Mexican Pesos, by “minor”, we mean the fine/penalty individually costs less than US$ 10,000”) As of December 2022, no incidents of breaches of customer privacy and losses of customer data were identified or investigated during the reporting period. See Code of Ethics: https://www.femsa.com/wp-content/uploads/2021/12/FEMSA-Code-of-Ethics.pdf DETAILS AND DISCLAIMERS: *The information contained in this document is provided in good faith and is intended to enhance understanding of the organization’s non-financial performance. Although the information is believed to be correct at the time of publication, we cannot accept any liability for any loss or damage caused by any person or organization acting or failing to act as a result of the information contained herein. **At FEMSA we designed a Labor Intelligence System to prevent and mitigate labor risks. This system is based on a methodology that generates risk scenarios to be weighted according to the probability of occurrence and level of impact for the organization. To obtain the definition of risks, we evaluate the workplace with respect to different human rights issues such as child labor, working hours, discrimination, among others. 131 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 TCFD index With the intention of not only answering our stakeholders’ concerns, but also to prepare FEMSA for future climate-related challenges, we worked on identifying and quantifying the main risks and opportunities related to climate change, as well as their potential financial impacts over the short, medium, and long term. This exercise will allow us to adapt our operations and be ready to mitigate climate-related impacts following the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). Governance The organization’s governance around climate-related risks and opportunities Annual Report 2022, please see the following sections: “Dear Shareholders” section. “Corporate Responsibility” section. “Sustainability Governance” section. “Ethical & Socially Responsible Behavior” section. Strategy & Risk Management Strategy: The identification of actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning Risk Management: The processes used by the organization to identify, assess, and manage climate-related risks FEMSA, in conjunction with its Business Units, is aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations on key disclosures focused on the resilience of the organization’s strategy, considering climate-related sce- narios. As an initial effort, we identified and quantified the main climate-related risks and opportunities of Coca-Cola FEMSA, OXXO, OXXO GAS, and Solistica. We evaluated physical and transition risks, and opportunities in line with TCFD recommendations through a 5-step methodology: 1. Taxonomy of risks and opportunities. Multidisciplinary groups in each BU (conformed by areas such as Sustainability, Strategic Planning, Operations, Real Estate, Marketing, Finance, Corporate Affairs, etc.), worked together and identified, prioritized, and quantified the main climate- related risks and opportunities. As a result of the review of recommended scenarios, and the multidisciplinary work sessions, we considered three scenarios in our analysis, using a combination of those presented by the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC) and the Network for Greening the Financial System (NGFS). This combination will help us to assess physical and transition risks and opportunities within various temperatures complying with the TCFD recommendations: 1. “Net Zero” Scenario, global temperature rises 1.5°C, Assumption: Net zero emissions are reached globally by 2050. Climate Scenarios selected: a) IPCC (SSP1 – 1.9), b) IEA (NZE), c) NGFS (Net Zero 2050) 2. Definition of Climate Scenarios and time horizons. 2. “Moderate Transition” Scenario, global 3. Identification of variables associated to climate scenarios. 4. Estimation of risk and opportunities parameters. 5. Calculation of climate Value at Risk. temperature rises 1.7°C, Assumption: Only developed economies reach net zero by 2050 and the rest by 2070. Climate Scenarios selected: a) IPCC (SSP1 – 2.6), b) IEA (SDS), c) NGFS (Below 2°C) 3. “No Ambition” Scenario, global temperature rises 2.8°C, Assumption: There is no date to reach Net Zero, and therefore the Paris Agreement is not fulfilled. Climate Scenarios selected: a) IPCC (SSP2 – 4.5), b) IEA (Stated Policies), c) NGFS (Determined Contributions) 132 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Time horizons We used three scenarios to define three-time horizons to help us understand the potential impact of climate-related risks and opportunities on our business. We chose these for the scenario analysis due to relatively abundant data available for reference and their compatibility with our business plans and timelines. These are also aligned with national and internation- al objectives on climate change: “Short-term” period 2030, “Medium-Term” period 2040 and “Long-term” period 2050. Each of the three scenarios and time horizons presents its own social, political-regulatory, economic, and technological-energy context, presenting important differences and consequences regarding climate change. The IPCC and EIA scenarios are recommended by TCFD, with widespread market adoption. The vast majority of physical climate models follow the IPCC Representative Concentration Pathways (RCPs). NGFS scenarios are compatible with the Financial Stability Board and provide comprehensive databases of market variables. The three sets of scenarios are consistent and must be updated frequently. Summary of risks and opportunities identified. The next table summarizes the main risks and opportunities that were identified, but also quantified. Transition Risk Type Category Risk/Opportunity Financial Impact Climate scenarios and time horizons with the greatest impact Chronic Decrease in rain High Physical Risk Extreme temperatures Low Acute Policy Increase in flooding Low Operating limits Medium Changes in the regulation of products and/or services Change in customer behavior Cost increase in raw materials Market Low Medium Medium Entry of new competitors Low No ambition by 2050. Main basins will drop their levels dramatically and water scarcity might cause a decrease in production. No ambition by 2040. The increase in temperature will impact on energy consumption of our refrigeration and air conditioning equipment at our sales points. Net Zero by 2050. Supply chain and distribution will have significant impacts. Also, the damage on infrastructure will represent some losses. Net Zero by 2050. High carbon pricing and limitation on fossil fuels use will represent high costs on production, distribution, and commercialization for most of our businesses. Net Zero by 2050. Change in regulation could mean high investment costs to adapt and comply with new requirements. Net Zero by 2050. Customer will look for greener options which could mean significant volume losses for our businesses. Net Zero by 2050. The cost increase in key raw materials will increase operational costs. Net Zero by 2050. The global energy transition implies the gradu- al implementation in the energy markets of new low-emission energy sources, meaning new compet- itors mainly for Retail Service Stations 133 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Type Category Risk/Opportunity Financial Impact Climate scenarios and time horizons with the greatest impact Improvement in the efficiency of production facilities and processes Medium Net Zero by 2050. The use of energy efficient equipment could represent savings for businesses. Resource efficiency Recycling Reduction of water use and consumption Opportunities Energy Source Low carbon energy sourcing Market Use of incentives from public sector Products and services Development and/or ex- pansion of low-emission goods and services Low Low Low Low Low Net Zero by 2050. The use and expansion of recycling processes to introduce recycled materials into a new production cycle as well as selling them to third parties would bring potential financial benefits to the businesses. Net Zero by 2050. Projects to decrease water consumption will bring savings to the business Net Zero by 2050. Using low-emission energy sources could represent a reduction in its associated costs, since in the context of these scenarios, the prices associated with renewable energies would tend to decrease in the medium and long term. Net Zero by 2030. Tax deduction in the Income Tax (ISR) that is exercised when making investments in equipment that generates renewable energy or energy efficient equipment. Net Zero by 2030. The business could quickly adapt to new customer preferences. As part of the project, FEMSA prepared RACI matrices for Coca-Cola FEMSA, OXXO, OXXO GAS and Solistica, which will allow the distribution of responsibilities, give structured mon- itoring, improve and align the strategy on an annual basis and continue to improve the identification, prioritization, and quan- tification of the main climate-related risks and opportunities. To see more information, please see Annual Report 2022 sections: “Materiality” “Corporate Responsibility” “FEMSA Priority Topics” “Climate Action” “Water Management” “Board Committees” “Sustainability Governance” Metrics and Targets FEMSA Annual Report 2022, please see sections: “Our Sustainability Strategy” “Goals and Targets” “FEMSA Sustainability-Linked Bond Update” “Coca-Cola FEMSA Sustainability-Linked Bond Update” “Climate Action” “Water Management” 134 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 sustainability-linked bond framework (SLB) In 2022 and 2021 FEMSA announced the placement of Mexican Peso-denominated and Euro-denominated sustainability linked notes in the Mexican and international capital markets, respectively. The 2022 issuance was of Ps. 9,273,843,400.00. The issued bonds were purchased by 33 institutional investors and the issuance was oversubscribed 1.9x times. The transaction was completed through a dual-tranche format with the tickers FEMSA 22-2L and FEMSA 22L. The first tranche was issued at an annual fixed rate of 9.65% (Mbono+0.45%) for an amount of Ps. 8,446,384,600.00 due in 2032. The second tranche was issued at an annual variable rate of TIIE28 + 0.10% for an amount of Ps. 827,458,800.00 due in 2027. Pursuant to the terms of both Bonds, they are linked to FEMSA’s Sustainability Linked Bond Framework, which was adopted and published by the Company in connection to the 2021 issuance of its Euro-denominated sustainability linked notes in the international capital markets for €700 million in senior notes due in 2028, and €500 million in senior notes due in 2033. This Framework is aligned with the 2020 Sustainability Linked Bonds Principles (“SLBP”), as administered by the International Capital Market Association (ICMA34), and it includes certain Sustainability Performance Targets of the Company which are aligned with its overall sustainability strategy priorities for 2030. As per the Bonds’ terms, the Sustainability Performance Targets’ satisfactory completion will be verified by an accredited third party and can be consulted in the following link: https://femsa.gcs-web.com/es/sustainable-finance/. The following five components form the basis of FEMSA’s Sustainability-Linked Bond Framework: 1. Selection of key performance indicators (KPIs). 2. Calibration of sustainability performance targets (SPTs). 3. Bond characteristics. 4. Reporting. 5. Verification. 34 https://www.icmagroup.org/assets/documents/Regulatory/Green-Bonds/June-2020/Sustainability-Linked-Bond-Principles-June-2020-171120.pdf 135 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 1. Selection of Key Performance Indicators (KPIs) 1.1. Zero Operational Waste to Landfill (Circular economy). KPI 1: Percentage of total operational waste diverted from landfills35. SCOPE This KPI applies to 100% of FEMSA’s Business Units, including all organic growth over the bond’s lifetime36. As of 2022, this KPI has data coverage of 93% of the total of FEMSA’s workplaces37. We continue working on increasing the percentage of workplaces with information, however, Cooking Depot, Doña Tota, OXXO International, and Envoy Solutions have yet to be included for the sustainability performance objectives (SPT). METHODOLOGY This KPI is calculated in compliance with our Corporate Information Policy and our internal consolidation manual for non-financial information. The business units report the total waste generated by type on a quarterly and annual basis (Non-hazardous and Hazardous Waste) and the final disposal method. For Non-Hazardous Waste, the disposal methods consider reuse or (which includes composting or anaerobic digestion, incineration -with and without energy recovery-, disposed to landfill). For Hazardous Waste, the previous disposal methods apply along with special management disposal and confinement, all in accordance with environmental regulations. Total operational waste (in tonnes): is the sum of all waste types, excluding hazardous waste38. Total waste recycled or reused (in tonnes): the sum of the final disposal of each type of operational waste classified as reused or recycled. 1.2. Renewable energy KPI 2: Percentage of total electricity consumption coming from renewable sources. SCOPE This KPI applies to 100% of FEMSA’s business units, including all organic growth over the bond’s lifetime. By 2030 we expect to have an annual electricity consumption of more than 3.7 TWh (an increase of 40% from our 2020 consumption of 2.6 TWh). During 2022, this KPI maintains data coverage of 99% across all of FEMSA’s workplaces. Part of the workplaces that are not included in 2022, but that will be considered in the following reports on the sustainability performance objectives (SPT), correspond to Envoy Solutions. METHODOLOGY This KPI is calculated in compliance with our Corporate Information Policy and our internal consolidation manual for non-financial information. The Business Units report on a monthly, quarterly, and annual basis, the total electricity consumption by type (renewable or non-renewable). Total electricity consumption (in MWh): is the sum of all electricity consumption of FEMSA. Total electricity consumption of renewable energy (in MWh): is the sum of the total electricity consumption generated by renewable sources. As of March 2023, FEMSA uses the following generation technologies: wind energy, solar energy, and organic waste biomass (using only sugar cane bagasse as a feedstock)39. Currently, FEMSA does not use unbundled energy attribute certificates (e.g. renewable energy cer- tificates (“RECs”), green electricity products or similar. Our strategy to reach our Renewable Energy targets will prioritize self-generation and power purchase agreements (“PPAs”). FEMSA may use other renewable energy sourcing methods in select markets in the future, only where self-generation or PPAs are not available or adequate for our operations. 35 Measured as tonnes of waste recycled or reused divided by tonnes of total operational waste. 36 Inorganic growth is not included as part of the SPTs. 37 A sample of the scope of the information was verified by Ernst & Young (EY) as an independent third party. 38 Due to local regulatory requirements, it must be disposed to landfill and/or be incinerated without energy recovery. 39 FEMSA may, in the future, utilize other sources of renewable energy, such as tidal energy, small-scale hydropower (less than 25MW), or biomass from sustainably sourced feedstock that does not compete with food sources. In some geographies, FEMSA may not be able to procure renewable energy via power purchase agreements or on-site generation or distributed energy; in these contexts, FEMSA may choose to purchase green tariffs or renewable energy credits. We will communicate the sources of renewable energy consumed in our annual reporting. 136 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 2. Calibration of Sustainability Performance Targets (SPT) 2.2. Renewable energy 2.1. Zero Operational Waste to Landfill (Circular economy) SPT 1.1: Increase the percentage of waste diverted from landfills to 65% by 2025 SPT 1.2: Increase the percentage of waste diverted from landfills to 100% by 2030 SPT 2.1: Increase the annual sourcing of renewable electricity to 65% by 2025 SPT 2.2: Increase the annual sourcing of renewable electricity to 85% by 2030 BASELINE BASELINE In 2019, we established a plan to commit to zero operational waste to landfill by 2030. The baseline year for this plan is 2019, due to the validation of the data collection methodology used. 2022 Result In 2022, information coverage increased to include Caffenio and Coca-Cola FEMSA Venezue- la, and work was carried out on the implementation of the circular economy strategy to meet the goal. The waste generation average for Proximity OXXO stores was updated. Progress was shown from 2019 to 2022, improving from 15.9 kg/day/store (before COVID-19 Pandemic) to 10.3 kg/day/store. FEMSA set 2017 as the baseline year, in order to include a record of at least a 3-year baseline before setting the commitment year of 2021. The commitment was set in 2020 in order to align a 10-year timeframe for this target to the United Nations Sustainable Development Goals timeline. 2022 Result During 2022, 210 renewable energy consumption points were included in different FEMSA Business Units. Compared to 2021, in 2022 we have a decrease in the % of renewable energy due to the significant increase of proximity stores that are not able to receive renewable energy yet. Name KPI 1: Zero Operational Waste to Landfill40 2018 2019 (baseline) 2020 2021 2022 2025 Target 2030 Target 63%41 52% 53% 53% 68.7% 65% 100% Name KPI 2: Renewable Energy42 2022 includes an updated waste generation average for OXXO stores, and information on Caffenio and Coca-Cola Venezuela. 2017 (baseline) 2018 2019 2020 2021 2022 2025 Target 2030 Target 22% 23% 48% 60% 61% 58% 65% 100% 40 In 2022, KPI 1: Zero Operational Waste to Landfill, does not consider hazardous waste in the calculation. 41 The operational waste for OXXO stores is measured using a sample calculation method that was updated in 2022. 42 Historical data varies slightly from data reported on FEMSA’s website, largely due to data for Venezuela being excluded from the reporting on our website. Venezuela is included for the purposes of the calculation of our SPT. 137 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 3. Bond Characteristics 4. Reporting Unless otherwise indicated in specific offering documents, FEMSA is not required to use its sustainability-linked bonds’ net proceeds for investments in green or social projects. Performance information will be kept public and available in the Annual Report until the Sustainability Performance Targets (SPT) for each Key Performance Indicator (KPI) are achieved. The report will contain: If one of the SPTs has not been reached at the target observation date, as per the annual reporting published following the target observation date, FEMSA will have to pay a higher interest rate on its securities. The mechanism for payment of such interest rate will be specified in the final terms of the securities offered. POTENTIAL CHANGES TO CALCULATION Both KPIs apply to 100% of FEMSA business units at the issuance date of the Sustainability-Linked Bond and organic growth projections are applied for the following years. For purposes of the Sustainability Performance Targets and the calculation of the Zero Operational Waste to Landfill and Renewable Energy Percentages, certain potential events, such as significant acquisitions or divestitures, or changes in the regulatory environment, can substantially impact the calculation of the KPI, and may require the restatement of the SPT and/or pro-forma adjustments of baselines or KPI scope. Any such readjustment will be communicated within FEMSA’s annual reporting on the KPIs. Information on the performance of the selected KPI; Verification assurance report relative to the SPT outlining the performance against the SPT and the related impact, and timing of such impact, on a bond’s financial performance; and, Any relevant information enabling investors to monitor the progress of the SPT. Information may also include when feasible and possible: Illustration of the positive sustainability impacts of the performance improvement; and/or Any re-assessments of KPIs and/or restatement of the SPT and/or pro-forma adjustments of baselines or KPI scope. 5. Verification FEMSA’s Sustainability-Linked Bond Framework has been reviewed by Sustainalytics who provided a second party opinion (‘SPO’), confirming the alignment of the Framework with the Sustainability- Linked Bond Principles (SLBP) 2020 as administered by ICMA. The SPO will be made available on Sustainalytics website and in the following link: https://femsa.gcs-web.com/es/sustainable-finance/. Our performance on KPIs for waste diverted from landfills and renewable electricity consumption during 2022, was reviewed by Ernst & Young (EY) as an independent third party. For details of EY’s review, please see “ESG Independent Limited Assurance Report” Section of this Report. 138 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 DISCLAIMER This Framework does not constitute a recommendation regarding any securities of FEMSA or any affiliate of FEMSA. This Framework is not, does not contain and may not be deemed to constitute an offer to sell or a solicitation of any offer to buy any securities issued by FEMSA or any affiliate of FEMSA. In particular, neither this document nor any other related material may be distributed or published in any jurisdiction in which it is unlawful to do so, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession such documents may come must inform themselves about, and observe any applicable restrictions on distribution. Any bonds or other securities that may be issued by FEMSA or its affiliates from time to time, including any Sustainability-Linked Securities, shall be offered by means of a separate prospectus or offering document in accordance with applicable laws, and any decision to purchase any such securities should be made solely on the basis of the information contained in any such prospectus or offering document provided in connection with the offering of such securities, and not on the basis of this Framework. The information and opinions contained in this Framework are provided as of the date of this Framework and are subject to change without notice. Neither FEMSA nor any of its affiliates assumes any responsibility or obligation to update or revise such statements, regardless of whether those statements are affected by the results of new information, future events or otherwise. This Framework represents current FEMSA policy and intent, is subject to change and is not intended to, nor can it be relied on, to create legal relations, rights or obligations. This Framework is intended to provide non-exhaustive, general information. This Framework may contain or incorporate by reference public information not separately reviewed, approved or endorsed by the FEMSA and accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the FEMSA as to the fairness, accuracy, reasonableness or completeness of such information. This Framework may contain statements about future events and expectations that are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “strategy,” “target” and “will” or similar statements or variations of such terms and other similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such statements. None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of assumptions, fully stated in the Framework. No representation is made as to the suitability of any Sustainability-Linked Securities to fulfil environmental and sustainability criteria required by prospective investors. This Framework does not create any legally enforceable obligations against FEMSA; any such legally enforceable obligations relating to any Sustainability-Linked Securities are limited to those expressly set forth in the legal documentation governing each such series of Sustainability-Linked Securities. Therefore, unless expressly set forth in such legal documentation, FEMSA’s failure to adhere or comply with any terms of this Framework, including, without limitation, failure to achieve any sustainability targets or goals set forth herein, will not constitute an event of default or breach of contractual obligations under the terms and conditions of any such Sustainability-Linked Securities. Factors that may affect FEMSA’s ability to achieve any sustainability goals or targets set forth herein include (but are not limited to) market, political and economic conditions, changes in government policy (whether with a continuity of the government or on a change in the composition of the government), changes in laws, rules or regulations, and other challenges. 139 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 ESG independent limited assurance report 140 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 ESG independent limited assurance report 141 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 ESG independent limited assurance report 142 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 ESG independent limited assurance report 143 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 SASB index Business Code Accounting Metric Unit of Measure Answer in table, omissions, and/or modifications Fleet Fuel Management FB-FR-110a.1 Fleet fuel consumed Percentage renewable Air Emissions from Refrigeration Gigajoules (GJ) 772,508, includes OXXO Stores and OXXO CEDIS Percentage (%) 0 FB-FR-110b.1 Gross global Scope 1 emissions - refrigerants tonnes of CO2e 232,187 Energy Management (1) Operational energy consumed Gigajoules (GJ) 6,691,348 FB-FR-130a.1 (2) percentage grid electricity (3) percentage renewable Percentage (%) Percentage (%) 41 59 O X X O Food Waste Management FB-FR-150a.1 Data Security Amount of food waste diverted from the waste stream tonnes FB-FR-230a.2 Description of approach to identifying and addressing data security risks n/a 1,170.84 tonnes of food donated and diverted from the waste stream For all our businesses, including Proximity, our customers, suppliers and businesses’ information security is very important. For this reason, specialized personnel have been assigned and processes and tools have been implemented to strengthen cybersecurity capabilities with a risk management approach. This allows businesses to comply with regulatory provisions and market demands, as well as meet our mobility and flexibility collaborators’ needs in a safe environment and with remote work authorization. For several years, an information security model has been implemented through which the administration is aware of and is involved in the definition of the security strategy. It considers the most relevant priorities and initiatives and establishes commitments with the aim of increasing Business Units’ maturity in their abilities to anticipate, protect, and respond to threats that could impact the availability, confidentiality and integrity of information. 144 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Business Code Accounting Metric Unit of Measure Answer in table, omissions, and/or modifications Food Safety FB-FR-250a.2 (1) Number of recalls (2) number of units recalled Number In FY22, we had 8 food recalls in OXXO, Mexico 2, Chile 4 and Peru 2. The number of units recalled were 283,977. (3) percentage of units recalled that are private-label products Percentage (%) 0 Product Health & Nutrition FB-FR-260a.2 Discussion of the process to identify and manage products and ingredi- ents related to nutritional and health concerns among consumers n/a OXXO Mexico currently has a nutritional analysis matrix with 100% of Own Brand edible products that covers the nutritional and health concerns among consumers. O X X O Labor Practices FB-FR-310a.1 (2) Percentage of in-store and distribution center employees earning minimum wage, by region Percentage (%) 100% of employees in our Mexico distribution facilities received pay above state minimum wage thresholds. Management of Environmental & Social Impacts in the Supply Chain Discussion of strategy to manage environmental and social risks within the supply chain, including animal welfare Discussion of strategies to reduce the environmental impact of pack- aging n/a n/a FB-FR-430a.3 FB-FR-430a.4 Activity Metric The guiding principles are communicated to our suppliers, and we are currently working on consolidating the commitment letters. We evaluated the environmental impact of all products’ packaging, including our Own Brand products. We are currently working on developing an interdisciplinary team to address this issue and structure mitiga- tion strategies. FB-FR-000.A Number of (1) retail locations Number See “Retail” section 145 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Business Code Accounting Metric Unit of Measure Answer in table, omissions, and/or modifications a c i t s i l o S n o i s i v i D h t l a e H Greenhouse Gas Emissions TR-RO-110a.3 (1) Total fuel consumed Gigajoules (GJ) 4,192,566 (2) percentage natural gas Percentage (%) 8 Fleet Fuel Management FB-FR-110a.1 Fleet fuel consumed Gigajoules (GJ) 4,192,450 Energy Management in Retail HC-DR-130a.1 (1) Total energy consumed Gigajoules (GJ), 548,456 (2) percentage grid electricity (3) percentage renewable Percentage (%) (4) percentage energy - no electricity 73 15 12 Drug Supply Chain Integrity HC-DR-250a.1 Description of efforts to reduce the occurrence of compromised drugs within the supply chain n/a In our Health Division we have various processes such as drug storage, quality control audits, medical devices and pharmaceutical supplies; Cold chain conservation; Inventories procedure; Technical reception procedure, among others. At CEDIS MEXICO there are regulation standards and evaluations to measure their compliance. The results are communicated to those responsible for operations to define the improvements. In Colombia, the Health Division focuses its efforts on the prevention of waste generation through the application of the following processes: 1. Application of the monthly overstock process, which focuses on collecting products with no turnover or coverage of more than 90 days. 2. Identification of products that are about to expire to label them for priority delivery on a monthly basis. 3. Weekly merchandise relocation process: aimed at identifying expiring products to relocate them between selling points and guarantee their timely sale. 146 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 Business Code Accounting Metric Unit of Measure Answer in table, omissions, and/or modifications Patient Health Outcomes HC-DR-260b.1 First fill adherence rate Percentage (%) NA HC-DR-260b.2 Description of policies and practices to prevent prescription dispensing errors n/a n o i s i v i D h t l a e H In Chile we have a strategy to recognize errors, identify underlying causes, and implement preventive actions to avoid dispensing errors. During 2022, an internal awareness campaign was carried out through audiovisual elements and more than 4,000 hours of synchronous and asynchronous online training given. There are also computer alerts installed at all POS that are triggered when store clerks are about to sell a product whose name is similar to other existing drugs. This guarantees the sale of the correct product. Potentially riskier drugs are stored in special units to regulate access. In Colombia we have control and management strategies and have adjusted our dispensing and storage policies to improve the organization’s criteria on similarity risks. Regarding training, we sensitized and trained 463 collaborators related to these issues. We also conducted virtual compliance courses and launched a new dose calculation course. We have a safe use advisory line to review cases before, during, and after dispensing. Thanks to more than 777 hours of pharmaceutical chemists’ consultation, 7,505 doses were reviewed and delivered. As part of the strategies focused on Patient Education, our pharmaceutical chemists offer personalized atten- tion and guidance on proper drug use to 1.6 million users through 37,391 consultations. They also advise doctors on how to promote patients’ adherence to properly use medications and treatments. During 2022, the Community Pharmacy project began to educate patients on Diabetes and its pharmacological treatment. In Ecuador we have a prescription management procedure that includewatory requirements. We also establish processes to assess, quantify, and communicate adherence to these standards. Activity Metrics HC-DR-000.A Number of pharmacy locations HC-DR-000.C Number of prescriptions filled HC-DR-000.D Number of pharmacists Number Number Number See “Retail” section 465,083 8,503 147 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 UN sustainable development goals GOAL 1. No Poverty 2. Zero Hunger 3. Good Health & Wellbeing 4. Quality Education 5. Gender Equality FEMSA contribution Economic Development Water Management Human & Labor Rights Community Wellbeing Human & Labor Rights Community Wellbeing Climate Action Water Management Human & Labor Rights Diversity, Equity and Inclusion Integral Wellbeing Human & Labor Rights Integral Wellbeing Human & Labor Rights Diversity, Equity and Inclusion Corporate Responsibility 6. Clean Water and Sanitation Water Management 7. Affordable and Clean Energy Climate Action 8. Decent Work and Economic Growth Economic Development Human & Labor Rights Diversity, Equity and Inclusion Integral Wellbeing 9. Industry, Innovation, and Infrastructure Climate Action Circular Economy 10. Reduced Inequalities Economic Development Human & Labor Rights Diversity, Equity and Inclusion Integral Wellbeing GOAL 11. Sustainable Cities and Communities 12. Responsible Consumption and Production 13. Climate Action 15. Life on Land 16. Peace, Justice, and Strong Institutions 17. Partnerships for the Goals FEMSA contribution Community Wellbeing Economic Development Climate Action Water Management Circular Economy Community Wellbeing Economic Development Sustainable Sourcing Climate Action Water Management Circular Economy Corporate Responsibility Ethical & Socially Responsible Behavior Fiduciary Responsibility Community Wellbeing Climate Action Community Wellbeing Water Management Integral Wellbeing Corporate Responsibility Ethical & Socially Responsible Behavior Fiduciary Responsibility Community Wellbeing Economic Development Sustainable Sourcing Climate Action Water Management Circular Economy Integral Wellbeing Corporate Responsibility Ethical & Socially Responsible Behavior Fiduciary Responsibility 148 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 contact FEMSA Corporate Offices Monterrey General Anaya Nº 601 Pte. Col. Bella Vista Monterrey, Nuevo León, Mexico C.P. 64410 Mexico City Lago Alberto Nº 442 Col. Anáhuac II Sección Miguel Hidalgo Mexico City, Mexico C.P. 11320 FEMSA Foundation General Anaya Nº 601 Pte. Col. Bella Vista Monterrey, Nuevo León, Mexico C.P. 64410 www.facebook.com/FEMSA/ twitter.com/femsa linkedin.com/company/femsa www.instagram.com/femsa_oficial/ www.youtube.com/femsa www.tiktok.com/@somosfemsa General Counsel Independent Accountant 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 Mancera, S.C. Integrante de Ernst & Young Global Limited Av. Ricardo Margain Zozaya Nº 335, Floor 14 Col. Valle del Campestre, San Pedro Garza García, Nuevo León, Mexico C.P. 66265 Corporate Communications Depositary Bank and Registrar Mauricio Reyes López Erika de la Peña Ibarra comunicacion@femsa.com Sustainability Víctor Manuel Treviño Vargas Gabriel Adrián González Ayala sostenibilidad@femsa.com 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 149 Value creation Dear shareholders Overview Sustainability People Community Planet FEMSA Foundation Governance Financial MD&A Appendix femsa integrated annual report 2022 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 Cautionary statement regarding forward-looking statements The FEMSA Integrated Annual Report 2022 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 expectations and are based upon currently available data. Actual results are subject to further events and uncertainties, which could materially impact the Company’s and its subsidiaries’ actual performance. 2022 integrated annual report www.annualreport.femsa.com
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