Press Release

2018 Second Quarter and First Six Months Results

Mexico City, July 26, 2018, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFL, NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest Coca-Cola franchise bottler in the world by sales volume, announces results for the second quarter of 2018.

Operational and Financial Highlights

  • Volumes and financial results of the newly acquired territories in Guatemala were consolidated as of May 1, 2018, while the Uruguay acquisition will be consolidated as of July 1, 2018. Coca-Cola FEMSA de Venezuela was deconsolidated as of December 31, 2017.
  • Volumes increased in Brazil and Central America while remaining flat in Mexico; transactions outperformed volumes in Argentina, Brazil, Mexico and the Philippines.
  • Revenues increased 3.9%, driven by pricing ahead of inflation in Mexico and Argentina, partially offset by unfavorable currency translation effects.
  • Comparable revenues grew 7.8% for the quarter driven by growth in Argentina, Brazil, Guatemala and Mexico.
  • Operating income declined 3.3%, while comparable operating income declined 5.9% for the quarter, driven mainly by higher PET costs across most of our operations, a non-cash operating foreign exchange loss in Mexico, additional expenses related to our acquisitions, and higher sweetener costs in the Philippines, partially offset by raw material tailwinds in South America.
  • Operating cash flow declined 2.6%, while comparable operating cash flow remained flat.
  • Majority net income increased 24.7% during the second quarter of 2018, driven by a reduction in our comprehensive financing result, coupled with a decline in other non-operating expenses as compared to the second quarter of 2017, which included Venezuela.

Message from the Chief Executive Officer

“In the second quarter, we delivered comparable revenue growth of 7.8%, while protecting our comparable operating cash flow. These results reflect our consistent top-line growth in Mexico, third consecutive quarter of volume growth in Brazil, profitability improvements in South America, and better than expected volume performance in the Philippines—all under complex environments. Importantly, during the quarter, we took important steps to continue consolidating our leadership position in the global beverage market as we announced strategic acquisitions in Uruguay and Guatemala, increasing our geographic footprint to 11 countries worldwide. As we enter the second half of the year, we are encouraged by the positive trends in our core markets and the power of our transformational initiatives: our KOFmmercial Digital Platform enables us to leverage on advanced analytics to deploy targeted initiatives at each point of sale, playing a fundamental role in our improved ability to detect and capture opportunities.” said John Santa Maria Otazua, Chief Executive Officer of the Company.

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