2011Report Annual Coca-Cola FEMSA www.coca-colafemsa.com Guillermo González Camarena Nº 600 Col. Centro de Ciudad Santa Fe Delegación Álvaro Obregón, México D.F. 01210 Tel.: (52 55) 50 81 51 00 Fax: (52 55) 52 92 34 72 flexibility Coca-Cola FEMSA 2011 Annual Report Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOF L; NYSE: KOF) is the largest public Coca-Cola bottler in the world, delivering more than 2.6 billion unit cases a year. The company produces and distributes Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages of The Coca-Cola Company in Mexico (a substantial part of central Mexico, including Mexico City, the southeast and the northeast of Mexico), Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (na- tionwide), Panama (nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil (greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul, part of the state of Goias, and part of the state of Minas Gerais), and Argentina (Buenos Aires and sur- rounding areas), along with bottled water, juices, teas, isotonics, beer, and other beverages in some of these territories. The company’s capital stock is owned 48.9% by Fomento Económico Mexicano S.A.B. de C.V. (FEMSA), 28.7% by wholly-owned subsidiar- ies of The Coca-Cola Company, and 22.4% by the public. The publicly traded shares of KOF are Series L shares with limited voting rights that are listed on the Bolsa Mexicana de Valores (BMV: KOF L) and as American Depository Shares (ADSs) on the New York Stock Exchange (NYSE: KOF). Each ADS represents 10 Series L shares. * Assuming the successful closing of the merger with Grupo Fomento Queretano Consistent with its commitment to preserve the environment and benefit the commu- nities where it operates, Coca-Cola FEMSA selected the materials to produce this report, using paper certified by the Forest Stewardship Council (FSC). The FSC’s principles and criteria encompass economic, social, and environmental concerns, and its measures are implemented through “chain-of-custody” certification. Furthermore, the document used soy- and vegetable-based inks, and the printer’s electricity is 100 percent wind- generated renewable energy, significantly reducing its carbon footprint. design: signi.com.mx flexibility financial highlights Millions of Mexican pesos and U.S. dollars as of December 31, 2011 (except volume and per share data) 2 (U.S.$) 2011(1) (Ps.) 2011 (Ps.) 2010 change Sales Volume (millions of unit cases) 2,648.7 2,499.5 6.0% Total Revenues 8,940 124,715 103,456 20.5% to satisfy our Income from Operations 1,444 20,152 17,079 18.0% Controlling Interest Net Income 761 10,615 9,800 8.3% Total Assets 10,867 151,608 114,061 32.9% Long-Term Bank Loans consumers’ and Notes Payable 1,221 17,034 15,511 9.8% Controlling Interest 7,002 97,691 71,279 37.1% Capital Expenditures 561 7,826 7,478 4.7% Book Value per Share(2) 3.75 52.37 38.60 35.7% evolving needs Controlling Interest Net Income per Share (EPS)(2) 0.41 5.69 5.31 7.2% (1) U.S. dollar figures are converted from Mexican pesos using the exchange rate for Mexican pesos published by the U.S. Federal Reserve Board on December 30, 2011, which exchange rate was Ps. 13.951 to U.S.$1.00. (2) Based on 1,865.3 million weighted average outstanding ordinary shares. 1 2 ...to embrace our industry’s growth opportunities: On top of all of our past transactions—which trans- formed our company into a leading multi- category beverage player—2011 marked ...to maximize our operations’ potential: another transformational year for our com- Over the past several years, we have incorporated new pany, inviting and incorporating into our businesses, products, knowledge, and best practices with multinational beverage platform four com- one goal in mind: to satisfy a growing base of consumers plementary businesses in only one year more efficiently and prepare our company for the future ...to foster sustainability: Our flexibility and adaptability allow us to ...to satisfy our consumers’ evolving needs: integrate sustainability into every aspect of Our flexibility to anticipate consumers’ evolving needs, to our daily operations—founded on our com- adapt our portfolio to specific markets, and to successfully mitment to do the right thing, always. We enter new categories that capitalize on an ever increasing are committed to ensure that our actions number of consumption occasions plays an essential role contribute to the social and economic de- in our ability to innovate, grow, and stay at the forefront of velopment of the numerous communities in our industry which we do business and minimize the im- pact of our operations on the environment ...to embrace our industry’s growth opportunities: On top of all of our past transactions—which trans- formed our company into a leading multi- category beverage player—2011 marked ...to maximize our operations’ potential: another transformational year for our com- Over the past several years, we have incorporated new pany, inviting and incorporating into our businesses, products, knowledge, and best practices with multinational beverage platform four com- one goal in mind: to satisfy a growing base of consumers plementary businesses in only one year more efficiently and prepare our company for the future ...to foster sustainability: Our flexibility and adaptability allow us to ...to satisfy our consumers’ evolving needs: integrate sustainability into every aspect of Our flexibility to anticipate consumers’ evolving needs, to our daily operations—founded on our com- adapt our portfolio to specific markets, and to successfully mitment to do the right thing, always. We enter new categories that capitalize on an ever increasing are committed to ensure that our actions number of consumption occasions plays an essential role contribute to the social and economic de- in our ability to innovate, grow, and stay at the forefront of velopment of the numerous communities in our industry which we do business and minimize the im- pact of our operations on the environment flexibility financial highlights Millions of Mexican pesos and U.S. dollars as of December 31, 2011 (except volume and per share data) 2 (U.S.$) 2011(1) (Ps.) 2011 (Ps.) 2010 change Sales Volume (millions of unit cases) 2,648.7 2,499.5 6.0% Total Revenues 8,940 124,715 103,456 20.5% to satisfy our Income from Operations 1,444 20,152 17,079 18.0% Controlling Interest Net Income 761 10,615 9,800 8.3% Total Assets 10,867 151,608 114,061 32.9% Long-Term Bank Loans consumers’ and Notes Payable 1,221 17,034 15,511 9.8% Controlling Interest 7,002 97,691 71,279 37.1% Capital Expenditures 561 7,826 7,478 4.7% Book Value per Share(2) 3.75 52.37 38.60 35.7% evolving needs Controlling Interest Net Income per Share (EPS)(2) 0.41 5.69 5.31 7.2% (1) U.S. dollar figures are converted from Mexican pesos using the exchange rate for Mexican pesos published by the U.S. Federal Reserve Board on December 30, 2011, which exchange rate was Ps. 13.951 to U.S.$1.00. (2) Based on 1,865.3 million weighted average outstanding ordinary shares. 1 2 to deliver consistent growth 20.5% revenue growth Sales Volume Total Revenue millions of unit cases millions of Mexican pesos 2,121 2,243 2,429 2,500 2,649 69,251 82,976 102,767 103,456 124,715 07 08 09 10 11 07 08 09 10 11 Income from Operations Dividend per Share millions of Mexican pesos Mexican pesos per share 11,486 13,695 15,835 17,079 20,152 0.45 0.51 0.73 1.41 2.36 07 08 09 10 11 07 08 09 10 11 3 flexibility José Antonio Carlos Salazar Fernández Chief Executive Chairman Officer of the Board Dear Fellow Shareholders: In the face of a challenging commod- prised of our Mexico, Guatemala, In an ever-changing environment, ity cost environment and global mar- Nicaragua, Costa Rica, and Panama we must constantly challenge our ket volatility, our balanced portfolio territories; and South America, com- objectives and embrace the flexibility of franchises across Latin America prised of our operations in Colombia, to adopt new goals. delivered double-digit top- and Venezuela, Brazil, and Argentina— bottom-line growth. For the year, creating a more flexible structure to 2011 was a transformational year our total sales volume grew 6% to 2.6 execute our strategies and extend for our company. We advanced on billion unit cases. Our consolidated our track record of growth. This the precise execution of our strategic revenues rose 21% to Ps. 125 billion. agile business structure aligns our framework for growth, capitalizing Our consolidated operating income business strategies more efficiently, on our organization’s flexibility to improved 18% to Ps. 20 billion, and enabling an empowered operation reconfigure our business’ structure, our consolidated controlling interest that ensures faster introduction of leveraging our capabilities to convert net income increased 8% to close to new products and categories and thousands of customers to our value- Ps. 11 billion, resulting in earnings designs and deploys new marketing based commercial model, fostering per share of Ps. 5.69. and commercial models more rapidly innovation through new products and effectively to capture the indus- and packages and business models, Flexibility to maximize our try’s value potential. achieving four accretive transactions, operations’ potential and continuing on our path of sus- As we continue our transformation With respect to our commercial initia- tainable development.