Glossary

B

Business entities that sell, manufacture, and distribute beverages of The Coca‑Cola Company under a franchise agreement.

A beverage production facility, including associated warehouses, workshops, and other on-site installations.

Abbreviation of basis points. One basis point is equal to one hundred of a percentage point (0.01%).


C

Gross capex is defined as payments for purchase of property, plant and equipment. Net capex is defined as payments for purchase of property, plant and equipment less receipts from disposals of property, plant and equipment plus principal repayment of finance lease obligations.

Emissions of CO2 and other greenhouse gases from fuel combustion and electricity use in Coca‑Cola FEMSA’s own operations (scope 1 and 2, mostly in bottling and distribution), in tonnes of CO2.

Global emissions of CO2 and other greenhouse gases from Coca‑Cola FEMSA’s wider value chain (raw materials, product cooling etc).

A beverage that contains carbonated water, a sweetener, and flavorings. They are called soft drinks (as opposed to hard drinks) because they don't have alcohol content.

Energy that is produced through means that do not pollute the atmosphere.

Effective as of December 31, 2017, we deconsolidated our operations in Venezuela and as a result began accounting for the results of operations of Coca-Cola FEMSA de Venezuela, S.A., or KOF Venezuela, as an investment under the fair value method pursuant to IFRS 9, Financial Instruments. Effective as of January 1, 2018, we no longer include the results of operations of KOF Venezuela in our consolidated financial statements. See Notes 3.3 and 26 to our consolidated financial statements.

The Coca‑Cola Company and its bottling partners.

The basis of our corporate behavior and the foundation of our policies, procedures and guidelines. It has been approved by the Board of Directors, which has also authorized its issuance and continuous updating, which is necessary due to changes observed in the business environment.

Coolers (refrigerators), vending machines and post mix machines that cool beverages for immediate consumption.

Our commercial process aims to create and satisfy consumer demand for our products whenever, wherever, and however they want them.

Base of a beverage, to which water and other ingredients are added to produce beverages. It may contain concentrated plant extracts, fruit juices, colourings and other components.

The number of eight-ounce servings consumed per person per year in a specific market. To calculate the per capita consumption, the company multiplies its unit case volume by 24 and then divides it by the total number of population.

Our customers include large international chains of retailers and restaurants and small independent businesses. We work with them equally to create mutual benefit. We serve our customers through account management teams, providing services and support tailored to their needs.


D

A specialized building in which we stock our beverages to be redistributed to retailers and wholesalers.


E

Earnings per share are equal to “earnings / outstanding shares.” Earnings per share (EPS) for all periods are adjusted to give effect to the stock split resulting in 16,806,658,096 shares outstanding. For the convenience of the reader, as a KOF UBL Unit is comprised of 8 shares (3 Series B shares and 5 Series L shares), earnings per unit are equal to EPS multiplied by 8. Each ADS represents 10 KOF UBL Units.

Non-alcoholic beverage with stimulating properties that offer consumers regenrative fatigue and exhaustion, while increasing mental ability.

A measure of the efficiency in which we use energy resources by considering the total output of beverages produced with a certain amount of energy.


F

Is a leading company that participates in the beverage industry operting as Coca-Cola FEMSA, the largest public bottler of Coca-Cola products in the world, and in the brewing industry being the second largest shareholder of Heineken, one of the leading brewers in the world with presence in more than 70 countries. In retail trade, FEMSA participates with FEMSA Comercio, branch that operates in various chains of small format, highlighting OXXO as the largest and fastest growing chain in Latin America. All this supported by a Strategic Business area.

Equipment used in retail outlets to dispense beverages into cups or glasses for immediate consumption.


G

A model that is designed to better support and enable our company’s global and local strategy. Consistent with our business strategy, objectives, guidelines, and requisite accounting and financial results, three specialized entities we established in the Finance area, our Corporate Experts team, KOF Financial Services (KFS), and Region/Country Finance team.


I

International Financial Reporting Standards of the International Accounting Standards Board.

International Organization for Standardization, responsible for creating standards or international regulations.

This category is consumed before, during and after exercise. Sport drinks main target are high perfomance athletes that need to replace minerals they lose through sweat, besides of contributing to metabolize carbohydrates and energy


K

Set of expectations for our agricultural ingredient suppliers, to address sustainability challenges specific to agriculture.

Name which Coca-Cola FEMSA is listed on the Stock Exchange.

A set of beliefs and behaviors that we aspire to live and breathe on a day-to-day basis to empower our people to lead our growth and transformation in the face of an ever-changing industry environment and also to achieve our strategic vision of becoming a total beverage leader. It is comprised of five key elements: Obsessive focus on consumers & clients, people first, operational excellence, owners mentality, and agile decision making.

Through this end-toend supply chain model, we enhance our customer service, while optimizing our costs and capital allocation, through: 1) standardized strategic, tactical, and operating processes; 2) cutting-edge technological tools; and 3) enhanced centralized organizational capabilities.

A digital platform in which we have consolidated human resources services for our employees, including personal data update, payroll services, a talent platform, HR letters, vacations, savings and benefits, and paid and unpaid leaves requests for all of our workplaces through kiosks and a mobile app, promoting self-service at all organizational levels.

A demand-driven digital platform that is devoted to serve our clients and consumers across the traditional trade, modern trade, aggregators, and direct-to-consumer channels. This platform is based on three main pillars: Advanced analytics for revenue transformation; Dynamic initiative management, and Shopper, consumer, and client engagement.

Key Performance Indicator.


L

Part of our process that, through our Digital Distribution Platform develops tailored, optimal Route-To-Market operation.

Beverages that have been formulated or reformulated to include as little as possible of sugar while preserving the same taste that our consumers love. This means using a range of artificial sweeteners and/or sugar substitutes.

Lost Time Incident Rate.

Lost Time Incident Severity Rate.


M

Through our MES + SPC platform, we digitalize all of our manufacturing processes to enable better-informed decision-making, enhanced efficiency, and improved productivity.

When used in reference to geographic areas, territory in which Coca‑Cola FEMSA does business.

To create a community relations vision that we can put it into practice in a standardized and systematic manner, we developed a management model that includes five sequential steps—which are the foundation of our Model for Addressing Risks and Relations with the Community.


N

Non-Alcoholic Ready-To-Drink.

Non-Alcoholic Beverages without carbonation including, but not limited to, waters and flavoured waters, juices and juice drinks, sports and energy drinks, teas and coffee.

Beverages with increased nutritious ingredients like: fiber, vitamins, minerals, phytochemicals or functional food additives.


O

We define Adjusted EBITDA as operating profit before deductions for depreciation and impairment of property, plant and equipment (included both in cost of goods sold and in operating expenses), amortisation and impairment of and adjustments to intangible assets, stock option compensation and other non-cash items, if any.

Operating profit (EBIT) refers to profit before tax excluding finance income / (costs) and share of results of equity method investments.

We are the largest Coca-Cola franchise bottler in the world by sales volume. Our operations encompass franchise territories in Mexico, Brazil, Guatemala, Colombia, and Argentina, and nationwide in Costa Rica, Nicaragua, Panama, Uruguay, and Venezuela through our investment.


P

Poly Ethylene Terephthalate commonly abbreviated as PET, is the most common type of plastic that has the characteristics of being flexible, lightweight and plus it is harmless to people´s health and very friendly to recycle.

Term used to define the point at which a customer purchases and pays for our beverages. In each POS we concentrate marketing efforts that include the placement of products for consumers with product displays strategically placed, advertisement, merchandising, and other initiatives that increase our rate of execution.

Abbreviation of MXN in our Financial Statements.


R

Drinks that are pre-mixed and packaged, ready to be consumed immediately with no further preparation.

Energy that comes from sources that can be replenished on a human timescale, like biomass, hydropower, geothermal, wind, and solar power.

Process that helps with the critical task of monitoring the mix of products on store shelves all over the planet. Keeping drinks available for shoppers.

Return on Invested Capital is calculated as operating profit plus amortisation less adjusted taxes divided by average invested capital (total equity plus interest-bearing debt).

Direct and indirect models that maximize and capture customer value creation, while optimizing our cost to serve our customers.


S

User-centric mobile solution that empower our sales force with best-in-class hand-held functionalities, including faster order entry, a two-way targeted initiatives module, dashboards, and 360° customer data.

We consider strategic suppliers all our partners that have a direct involvement in the drink in your hand.

They present our minimum expectations regarding how good and services suppliers and vendors manage key sustainability areas.

Supply chain is a network between Coca-Cola FEMSA and its suppliers to produce and distribute its portfolio to the final client. This network includes different activities, people, entities, information, and resources.

In Coca-Cola FEMSA, this term is understood as the simultaneous generation of economic, social and environmental value through responsible and consistent business practices that allow us to positively transform our environment. Also, create initiatives focused on the availability of drinking water in our communities, as well as proper management of waste and recycling, development of processes and friendly packages to the environment, and finally, reforestation and minimization of energy use in our value chain and mitigation of the effects in climate change.


T

Established in 1886, The Coca-Cola Company is the world´s largest beverage company, refreshing its consumers with more than 500 brands of soft drinks and non-carbonated beverages. The Coca-Cola Company headquarters are located in Atlanta, with local operations in more than 200 countries around the world.

An ambition that is consistent with our consumers and clients’ evolving preferences and practices. We aim to consolidate a winning total beverage portfolio, and leading the way, we fortify and amplify our total beverage portfolio of consumer-centric brands in line with their changing tastes and buying habits.

Transactions refers to the number of single units (e.g. a can or a bottle) sold, regardless of their size or volume or whether they are sold individually or in multipacks, except for soda fountains, which represent multiple transactions based on a standard 12 oz. serving.


U

Measurement unit equivalent to 24 servings of 8 U.S ounces.


V

Ideals shared by members of the company that determine what is acceptable and what is not. Therefore, we provide parameters for decision-making and performance of the company as well as criteria to evaluate the performance of each one of the mentioned before.

Vending machines are automatic devices that sell goods such as beverages and snacks without a cashier.

Volume is expressed in unit cases. Unit case refers to 192 ounces of finished beverage product (24 eight-ounce servings) and, when applied to soda fountains, refers to the volume of syrup, powders and concentrate that is required to produce 192 ounces of finished beverage product.


W

It can be understood as the amount of water required to produce 1 liter of our beverages and it is a measure of the efficiency in which we steward }our water resources.


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