Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) Q4 2020 Results Conference Call February 25, 2021 9:30 AM ET Company Participants John Santa Maria - Chief Executive Officer Constantino Spas - Chief Financial Officer Jorge Collazo - Head of Investor Relations Matias Molina - Head of Strategy Conference Call Participants Felipe Ucros - Scotiabank Lucas Ferreira - JPMorgan Antonio Hernandez - Barclays Álvaro García - BTG Marcella Recchia - Credit Suisse Miguel Tortolero - GBM Sean King - UBS Héctor Maya - Santander ...

Financial Data and Key Metrics Changes - Consolidated volumes declined 5.1%, an improvement from a 7.2% decline in the second quarter, driven by strong performance in Brazil and Guatemala [11][12] - Total revenues decreased by 4%, primarily due to unfavorable currency translation and price mix headwinds, but would have remained flat without these effects [18] - Operating income increased by 1.5%, supported by declining PET costs and favorable currency hedging, with a potential increase of 7% when excluding currency translation effects [19] - Controlling net income decreased by 38.8% year-over-year, influenced by extraordinary non-operating expenses [21] - Operating cash flow margin expanded by 90 basis points to 21.6% [20] Business Line Data and Key Metrics Changes - In Mexico, top line decreased by 6.7% due to volume declines and unfavorable price mix, although multi-serve returnable presentations grew in double digits [40][41] - Central America saw a volume decline of 2.9%, mainly due to stringent COVID-19 measures in Panama, but Guatemala's performance offset some losses [43] - South America experienced low single-digit volume growth, with Brazil showing a solid 6.5% growth, while Argentina began to stabilize [45][46] Market Data and Key Metrics Changes - The traditional trade channel in Mexico showed resilience, while modern trade improved from double-digit declines to lower single-digit declines in September [12][14] - The Brazilian operation's sparkling volume grew by 8%, driven by Coca-Cola brand growth [15] - The company gained market share across non-alcoholic ready-to-drink categories in most territories, except Argentina [16] Company Strategy and Development Direction - The company aims to emerge stronger post-pandemic by focusing on employee safety, community support, and prudent cash management [7] - Strategic priorities include building a diverse portfolio, enabling digital transformation, ensuring sustainability, and fostering a collaborative culture [26] - The company is expanding into alcoholic beverages with the launch of Topo Chico Hard Seltzer, indicating a strategic move into high-growth markets [31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding recovery trends, with consolidated volumes showing growth for the first time since the pandemic began [6] - The company remains focused on long-term growth despite short-term volatility, emphasizing the importance of maintaining strong relationships with the Coca-Cola Company [22][23] - Management highlighted the need for agility and innovation in response to changing consumer behaviors and market conditions [24][27] Other Important Information - The company issued its first green bond, raising US$705 million to support sustainability initiatives [52] - As of September 30, 2020, the net debt to EBITDA ratio was 1.05 times, with a cash position exceeding MXN 58 billion [54] - The second installment of dividends will be paid on November 3, 2020, reflecting a 37% increase compared to the previous year [55] Q&A Session Summary Question: Dynamics in Mexico's recovery and channel performance - Management noted a sequential improvement in July and September, with traditional trade showing positive trends and modern trade recovering from declines [60][62] Question: Implications of Coca-Cola's restructuring - Management viewed the restructuring positively, expecting increased agility and innovation capabilities, although it may reduce local customization [70][72] Question: Concentrate price increase rationale - The concentrate increase is manageable and part of a long-term strategy, with expected savings offsetting the increase [81][89] Question: Market share performance and future outlook - Management reported market share gains across most categories, with a focus on affordability and returnable packaging strategies [90][93] Question: M&A strategy and competitive landscape - The company remains disciplined in its M&A strategy, focusing on opportunities that align with long-term growth objectives [102][106] Question: Future of alcoholic beverages in the Coca-Cola system - Management expressed excitement about entering the alcoholic beverage market, highlighting the potential for higher margins and growth [108]

Financial Data and Key Metrics Changes - Consolidated volumes declined 7.2% for the quarter, primarily due to mobility restrictions across territories [9] - Total revenues decreased by 10.2%, impacted by price/mix headwinds and unfavorable currency translation effects [11] - Operating income declined 19.1%, with a comparable decrease of 17.6% when excluding currency translation effects [13] - Controlling net income decreased by 39.4% year-over-year, primarily due to impairments in joint ventures [16] Business Line Data and Key Metrics Changes - In Mexico, top line decreased by 8.1%, driven by a 5.8% volume decline [35] - Central America saw a volume decline of 7.4%, with Guatemala showing growth [36] - South America experienced a 9.5% volume decline, with Brazil and Uruguay posting positive volumes in June [38][40] Market Data and Key Metrics Changes - The Mexican market showed a 5.8% volume decline, while Central America had a 7.4% decline, with Guatemala partially offsetting losses [35][36] - South America faced a 9.5% decline, with Argentina remaining complex due to macroeconomic challenges [38] Company Strategy and Development Direction - The company is focusing on five key areas: collaborators, clients, consumers, communities, and cash flow [18] - Emphasis on health and safety protocols for employees and clients, alongside support for community initiatives [19][24] - Accelerating the development of omni-channel capabilities to enhance customer experience and sales [27][28] Management's Comments on Operating Environment and Future Outlook - Management expects the second quarter to be the most impacted quarter of the year, with ongoing uncertainty in the operating environment [17] - Positive trends are emerging, with gradual recovery in volumes and client reopenings [60] - The company remains committed to long-term goals while navigating short-term disruptions [18][49] Other Important Information - Cash position at the end of the quarter was over MXN 43 billion, with a commitment to return cash to shareholders [26][47] - The company is focused on increasing the use of returnable packaging and recycled materials as part of its sustainability initiatives [121][123] Q&A Session Summary Question: July volume performance and channel insights - Management noted that July volumes are improving, with stabilization in most markets and growth in traditional trade channels [60][62] Question: Beer performance in Brazil - The company reported strong share gains in Brazil's beer market, consistent with Heineken's announcements [66] Question: Future capital allocation strategies - Management indicated a focus on maintaining dividends while exploring internal investment opportunities, particularly in returnable packaging [67][69] Question: Traditional channel long-term consequences - Management anticipates that a small percentage of traditional accounts may not reopen, but expects new smaller businesses to emerge [112] Question: Packaging development and environmental initiatives - The company is committed to increasing the use of recycled resin and expanding returnable packaging as part of its environmental strategy [121][123]

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) Q1 2020 Earnings Conference Call April 29, 2020 9:00 AM ET Company Participants John Santa Maria - CEO Constantino Spas - CFO Conference Call Participants Ben Theurer - Barclays Lucas Ferreira - JPMorgan Carlos Laboy - HSBC Miguel Tortolero - GBM Alvaro Garcia - BTG Pactual Alan Alanis - Santander Operator Good morning, everyone, and welcome to Coca-Cola FEMSA First Quarter 2020 conference call. As a reminder, todayÂ's conference is being recorded, and all particip ...

As filed with the Securities and Exchange Commission on April 17, 2020. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 Commission file number 1-12260 Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Coca-Cola FEMSA, S.A.B. de ...

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) Q4 2019 Earnings Conference Call February 26, 2020 9:00 AM ET Company Participants John Santa Maria - Chief Executive Officer Constantino Spas - Chief Financial Officer Conference Call Participants Antonio Gonzales - Credit Suisse Benjamin Theurer - Barclays Felipe Ucros - Scotiabank Fernando Ferreira - Bank of America Luca Cipiccia - Goldman Sachs Miguel Tortolero - GBM Operator Good morning, everyone and welcome to the Coca-Cola FEMSA Fourth Quarter and Full Year ...

Coca-Cola Femsa SAB de CV (NYSE:KOF) Q3 2019 Earnings Conference Call October 25, 2019 9:30 AM ET Company Participants John Santa Maria - CEO & Director Constantino Spas - CFO Conference Call Participants Luca Cipiccia - Goldman Sachs Group Felipe Ucros - Scotiabank Lucas Ferreira - JPMorgan Chase & Co. Miguel Tortolero - GBM Antonio Gonzalez - Crédit Suisse Carlos Laboy - HSBC Ãlvaro GarcÃa - BTG Leandro Fontanesi - Bradesco Operator Good morning, everyone, and welcome to the Cola-Cola FEMSA's Third Quarte ...

Coca-Cola Femsa SAB de CV (NYSE:KOF) Q2 2019 Earnings Conference Call July 25, 2019 10:00 AM ET Company Participants John Santa Maria - CEO & Director Constantino Spas - CFO Conference Call Participants Ãlvaro GarcÃa - BTG Luca Cipiccia - Goldman Sachs Group Antonio Anaya - Crédit Suisse Carlos Laboy - HSBC Operator Good morning, everyone, and welcome to Coca-Cola FEMSA Second Quarter 2019 Conference Call. As a reminder, today's conference is being recorded. [Operator Instructions]. At the request of the co ...

Financial Data and Key Metrics Changes - The company reported a 4.8% increase in revenues, while comparable revenues grew by 10% [33] - Operating income declined by less than 1%, while comparable operating income increased by 9.2% [33] - Controlling net income increased by more than 7%, resulting in earnings per share of MXN0.15 [11][49] Business Line Data and Key Metrics Changes - The South America division saw a 9.1% volume growth in Brazil, contributing to overall topline growth of close to 5% for Q1 2019 [7][8] - In Mexico, revenue growth was close to 8%, but volume performance softened with a contraction of 1.9% due to price increases and the Easter holiday shift [35] - Central America reported a 25% volume growth driven by Costa Rica and the consolidation of new acquisitions in Guatemala [37] Market Data and Key Metrics Changes - The company faced unfavorable currency translation effects, which represented the largest headwind to financial performance [9][32] - Argentina's volumes fell by 32% due to economic recession and declining disposable income, while Brazil's market showed optimism with improved consumption [44][95] Company Strategy and Development Direction - The company aims to become a total global beverage leader while focusing on sustainable and profitable growth [52] - There is a strong emphasis on innovation, with new product launches such as Coca-Cola Coffee and Coca-Cola Sin Azúcar driving growth [12][60] - The company is implementing affordability initiatives and restructuring operations to adapt to challenging macroeconomic environments [17][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Brazil's consumption outlook and the positive impact of improved execution at points of sale [59] - The company is cautious about Argentina's economic conditions but is taking measures to mitigate risks through pricing and operational adjustments [44][111] - Overall, management remains confident in the company's ability to navigate challenges and capitalize on growth opportunities [51][52] Other Important Information - The company completed a stock split and listing of shares in the form of units, which is expected to enhance capital allocation and growth opportunities [24][26] - The adoption of IFRS 16 leases has impacted financial reporting, with lease arrangements recognized as rights of use and liabilities [30][31] Q&A Session Summary Question: Outlook on consumption in Brazil and volume outlook for the year - Management remains encouraged by Brazil's performance, driven by point-of-sale execution and a strong portfolio, expecting continued growth [57][59] Question: Expectations for innovation and its impact on sales - The company is optimistic about innovation, with new product launches expected to contribute significantly to sales in the coming years [60][62] Question: Impact of concentrate taxes in Brazil on financials - Management confirmed that the impact of concentrate taxes remains within expectations and is continuously assessed [70][71] Question: Performance of Coca-Cola Sin Azúcar and its profitability - Coca-Cola Sin Azúcar is growing rapidly but still represents a small portion of the portfolio, with profitability varying by geography [84][88] Question: Competitive environment in Brazil - The competitive landscape is stable, with management focusing on execution and maintaining volume growth despite new entrants [95][98] Question: Reasons for faster growth in beer compared to soft drinks - The beer segment is experiencing strong consumer trends, particularly in premium brands, contributing to faster growth compared to soft drinks [123][126]

Financial Performance - Total revenues for 2018 reached Ps.182,342 million, with a gross profit of Ps.83,938 million, representing a gross margin of 46.0%[97] - Mexico and Central America contributed Ps.100,162 million to total revenues, accounting for 54.9% of the total, with a gross profit margin of 57.4%[97] - South America generated Ps.82,180 million in revenues, making up 45.1% of total revenues, with a gross profit margin of 42.6%[97] - Total sales volume for 2018 was 3,321.8 million unit cases, a growth of 0.1% compared to 2017[139] - In Mexico, sales volume increased by 2.3% to 2,065.0 million unit cases, while transactions decreased by 0.4%[139] - Central America saw a significant sales volume growth of 24.2%, reaching 214.7 million unit cases in 2018[139] - In Brazil, sales volume growth was 2.9%, with sparkling beverages growing by 1.2% and still beverages by 18.2%[140] Economic and Political Factors - Argentina's cumulative inflation exceeded 100% over the three years prior to July 1, 2018, categorizing it as a hyperinflationary economy, which may adversely affect financial results[86] - Political and social events in operating countries may adversely impact business operations and financial condition[90] - The company selectively hedges its exposure to the U.S. dollar, with significant currency fluctuations potentially impacting financial condition and results[89] - Depreciation of local currencies against the U.S. dollar increases costs for raw materials and debt obligations, negatively affecting financial results[87] Market and Product Strategy - The company aims to accelerate revenue growth through new product categories, with 34.6% of brands being low- or non-caloric beverages as of December 31, 2018[129] - The company plans to continue its expansion through organic growth and strategic joint ventures, mergers, and acquisitions[128] - The company has implemented a multi-segmentation strategy to tailor product offerings based on consumption occasions and competitive environments[149] - The company faces competition from local Pepsi bottlers and "B brands," with significant market presence in various territories[163] Distribution and Operations - As of December 31, 2018, the company operated 201 distribution centers in Mexico and Central America and 74 in South America, serving 1,045,780 and 852,091 retailers respectively[150] - The company utilizes multiple sales and distribution models, including pre-sale systems and hybrid distribution systems, to enhance efficiency[152] - The company continuously evaluates its distribution model to adapt to local market dynamics and improve efficiency[151] - The average annual utilization of bottling facilities in Mexico was 63%, with peak month utilization reaching 78%[246] Sustainability and Environmental Management - The company has committed to sustainability, focusing on people, communities, and the planet as part of its business strategy[127] - In 2018, 50.0% of the company's total energy requirements were obtained from clean energy sources[206] - The company recycled 95% of the total waste generated in 2018[206] - The company aims to improve its overall water use ratio to 1.5 liters of water per liter of beverage produced by 2020, having used 1.59 liters in 2018[197] Taxation and Regulatory Environment - The excise tax on beverages with added sugar in Mexico increased from Ps.1.00 to Ps.1.17 per liter as of January 1, 2018[189] - In Argentina, the income tax rate was reduced from 35.0% to 30.0% for 2018 and 2019, and then to 25.0% for subsequent years[193] - The average production tax in Brazil is approximately 4.2% and the average sales tax is approximately 12.3% over net sales[197] Corporate Structure and Ownership - The Coca-Cola Company indirectly owned 27.8% of the capital stock, representing 32.9% with full voting rights[124] - The company held a 36.4% equity interest in PIASA and a 2.7% equity interest in Beta San Miguel as of April 5, 2019[177] - The company has four bottler agreements in Mexico, two in Brazil, and various agreements in other countries, with several up for renewal between 2023 and 2028[239] Compliance and Legal Matters - The Colombian government has implemented regulations addressing money laundering and anti-bribery, requiring companies to comply with internal policies[229] - In December 2017, Argentina enacted Law No. 27,401, introducing corporate criminal liability for corruption and bribery[227] - The Brazilian government enacted Law No. 13,467 in July 2017, significantly changing labor regulations, including extending the workday from 8 to 12 hours[224]