one step ahead - coca-cola femsa

ONE STEP AHEAD

FIRSTSEMESTER 2015

SUSTAINABILITYCOCA-COLA FEMSA

Message from our Corporate Affairs Officer

Presence and financial highlights

Our products

Sustainability strategy

Our people

Our community

Our planet

About this report

Contact information

Index

from our Corporate Affairs Officer

Message

During the first half of 2015, Coca-Cola FEMSA managed a complex environment with social and economic challenges in the countries where we operate. We are commited with the growth and development of Latin America and Philippines and, as a result of that, we closed an investment of 500 million dollars in two bottling plants, one in Brazil and another one in Colombia allowing us to attend the market demand with excellence and a wider portfolio.

Our new bottling plants have the greatest number of sustainable initiatives in the Coca-Cola System. Given this, we reinforce our commitment to create social, economic and environmental value through our Sustainable Strategy. Our continued interest to improve our environment led us to receive RobecoSAM's Industry Mover 2015 Award and to be a member of The Sustainability Yearbook 2015. Being the first Mexican company to receive this awards challenges us to continue our leadership as a sustainable company.

All of our first semester achievements add up to the 125 anniversary of FEMSA, reaffirming the history of this great company in which we belong and that, since its first year of existence, envisioned its growth through the simultaneous generation of economic, social and environmental value. These values are the foundation for Coca-Cola FEMSA's business strategy.

I thank the people involved in the daily work and development of our three sustainability core areas: Our People, Our Community and Our Planet. Through this report we look for a continuous communication with our stakeholders to achieve all of our sustainability goals in our business.

Francisco Suárez HernándezCorporate Affairs Officer

Empresa Sustentable



Our productsSustainability

strategyOur people Our community Our planet

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and financial resultsPresence

329 distributioncenters.plants.

64 bottling

4,000 millionunit cases.

than 351 millionconsumers.

than 120,000collaborators.

than 2.8 millionpoints of sale.

Quarterly reports:https://www.coca-colafemsa.com/investors/quarterly-reports.html





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https://www.coca-colafemsa.com/investors/quarterly-reports.html

https://www.coca-colafemsa.com/investors/quarterly-reports.html

PresenceCoca-Cola FEMSA, the biggest public bottler by sales volume, operates in Latin America and South East Asia, two of the most relevant regions for the beverage industry in the world.

Argentina

Colombia

Venezuela

Philippines

Brazil

Mexico

Guatemala

Costa Rica

Nicaragua

Panama





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· More than 110 innovations in civil engineering, control systems, technology management and envirnomental care. · Part of FEMSA's Industrial Park of non-alcoholic beverage, the most modern in the region.

Tocancipá Plant adds up to our other production centers in Colombia: Bogotá, Medellín, Bucaramanga, Barranquilla, Cali and La Calera.

The project began in 2013, accompanied from the start with social and environmental programs to benefit Tocancipá. With this initiative, we reinforce our commitment to generate economic, social and environmental value to positively transform the communities where we operate.

Plant's opening:In June, we opened two new plants with an investment of 500 million dollars to attend the growing demand of Colombia and Brazil.

In the opening event, our Chief Executive Officer John Santa Maria Otazua highlighted that the new plants of Tocancipá in Colombia and Itabirito in Brazil represent a strong platform of growth for Coca-Cola FEMSA with the opportunity to give a better service to 119 million of consumers.

ColombiaTocancipá Plant





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· LEED certificated: savings from

30% to 50% in energy and 40% in water consumption.

Brazil

Itabirito Plant O R D E M E P R O G R E S O

Itabirito plant was conceived and planned since the beginning of its construction in 2013 to become a milestone of technology, productivity and environmental care, becoming the plant with more green initiatives of the Coca-Cola System.

This is the first plant in Brazil after 12 years of operation in the country. It is installed in an area of 65,000 square meters with a production capacity of 2.1 billion liters of beverages per year.





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Our products

112 leader brands in 10 categories of beverages: colas, flavours, water, juices, isotonics, teas, milk, coffee, vitamined and energetic.

From our beverages offer, 45% of our brands have low

or no-calories option, 3.4% of beverages with added vitamins, fiber, minerals or nutritional suplements and we

also have 5 brands of beverages with both characteristics.

·

·

We have a wide portfolio of products from the Coca-Cola brand so that we can offer to all our consumers a beverage suitable to their lifestyle and consumption ocassion. As part of the Coca-Cola System, we operate according to the Coca-Cola Operating Requirements (KORE) that ensures quality throughout the entire life cycle of our products. We have permanent dialogue channels with our stakeholders to provide treatment regarding any concern about our products.





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marketingResponsible

45% of our brand's portfolio and line extensions is composed by low or no-calories beverages.

Committed to the welfare of our consumers, we have strict marketing standards that allow us to reach our customers and clients with the proper product and package presentation. We do not make any kind of publicity to publics composed mainly by people younger than 12 years old according to the Responsible Marketing and educational center selling guides from The Coca-Cola Company.

Nutrition information and labeling, The Coca-Cola Company.

Responsible Marketing Policy, The Coca-Cola Company.

Energy

149 kcal

Sodium

36 mg

2%

Totalsugars

149 kcal

41%

Otherfats

0 kcal

0%

Saturatedfats

0 kcal

0%

In compliance with our Responsable Marketing Policy and with the internal regulations of the countries where we operate, our products follow the Guideline Daily Amounts (GDA). GDA's are graphics that inform the quantity of energy, sugar, total fats and salts according to a recommended diet of 2,000 calories. With these information, our consumers can make the right choices needed to plan their proper diet. GDA's are presented in easy to understand and access labels in all our products.

Image data represents the % of recommendation daily nutrients based on 355 ml of Coca-Cola in Mexico. Contents of GDA's may vary depending on local legisltation of every country.

http://www.coca-colacompany.com/brands/nutrition-labels

http://www.coca-colacompany.com/sustainabilityreport/me/responsible-marketing.html





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strategySustainability

Our actions are aligned in three strategic core areas: Our People, Our Community and Our Planet. Each area has several programs and initiatives that contribute to the generation of economic, social and environmental value in the communities where we operate and for all our stakeholders.

Coca-Cola FEMSA Sustainability Policy establishes that we "generate the economic, social and environmental conditions needed to operate and grow over time in harmony with the environment. Therefore, each operation must integrate a Sustainability Strategy in its Business Plan based on the Coca-Cola FEMSA ethics and values focused on our people, our community and our planet".





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POSITIVELY TRANSFORMOUR COMMUNITIES

OURPEOPLE

Training andProfessional

Development

ComprehensiveDevelopment

Waste andRecycling

Energy

OURENVIRONMENT

OURCOMMUNITY Water

Cultureand Values

OUR ETHICSAND VALUES

HealthyLifestyles

CommunityDevelopment

SustainableSourcing

Culture and values

Comprehensive development

Training and development

peopleOur





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Coca-Cola FEMSA Culture

In 2015 we integrated, as part as the transformation process of the company, different tools that promote Coca-Cola FEMSA's Mission, Vision and Values. Within this, in our workplaces, we have physical activation areas and different work models that allow our employees to have a greater balance between work and personal life. In addition, we started the Diversity and Inclusion Networks in our headquarters. This networks promote a respect and integration culture in 6 areas: Gender Equality, Moms and Dads, Multigeneration, Disability, Multiculturalism and LGBT.

Ambassadors in Action: Program in Mexico where our employees are committed to the success of our brands and our business by learning the daily activities of their colleagues that work in Presale, Distribution and Warehouse activities.

Leader Attitude: Invitation for employees to recognize colleagues they consider agents of change.

Leadership Management: In their annual goals, each employee integrates this indicator, which aims for the promotion of all Coca-Cola FEMSA's culture and values.

Our VisionTo be the best global enterprise in leading beverage brand sales. To generate sustainable economic and social value by managing innovative and winning business models with the best employees in the world.

Our Mission Satisfy and please beverage consumers with excellence.

and valuesCulture

Our Values

Trust

Passion for customer service

Respect and integral development of employees

Integrty and austerity

Creation of social value

Reinforce business culture and values of through encourgament, as well as identifying and responding to breaches.

"Multiculturalism is a very important aspect for the company. We must have the necessary tools, freedom and flexibility to foster the integral development of our people and our company."

Fernando Simón Leal Social Development, Labor, Patrimonial Security and Diversity Director





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Cultureand Values

developmentComprehensive

Values

Labor

EducaciónEducation

Health

Economy

Family

Society and environment

"The program that generated more impact on me is Coordinates for Life. My family and I assisted as volunteers. These programs have possitive impact on people and, by being a volunteer, you must be willing to really help others."

María Elena Hernández RamírezNew Business AssistantCoca-Cola FEMSA Corporate

As part of the comprehensive development philosophy we have the Social Development model, a strategic ally to create a strong commitment between employees and Coca-Cola FEMSA. The area detects our employees needs through participation schemes or groups that act as speakers. Thereby, we can offer different events, initiatives, volunteering activities and programs that reinforce the culture and values promoted as a company.

In the first half of 2015,

we had a total of 3,416 volunteers.

Social Development area is divided in 7 dimensions:

Offer benefit programs focused on the comprehensive development of our employees and their families.





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ComprehensiveDevelopment

In January 2015 we began with the implementation of Yammer, our internal communication network. Through this network, available in any mobile device, experiences, achievement, photographies, comments and interesting news can be shared.Yammer has allowed to shorten the gap among our international operations.

and development TrainingWe are commited with the integral development of our collaborators, which is achieved through the Training and Development area of our Sustainability Strategy. In Coca-Cola FEMSA, we pay special attention in ensuring that each one of our collaborators has annual goals in their Development Agenda. This Agenda seeks to grow and empower three competences: leadership, technical habilities and functional habilities.The annual training plan adjustes to the needs of every collaborator through a Training Needs Diagnostic. In this way, an assertive plan is designed to generate more impact in the individual and business forms, ensuring that Coca-Cola FEMSA has the best business capabilities through our most important asset: our people.

4.6 million dollars invested for training in the first semester of the year.

More than 824,000 hours of training averaging 7 hours for each one of our collaborators.

Provide means for training, professional development and safety in our operations.





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Training andProfessional

Development

Healty lifestyles

Community development

Sustainable sourcing

communityOur





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During the first semester, 96 sustainabilityinitiatives were developed:

· 33 initiatives for community development· 34 initiatives for healthy lifestyles· 29 initiatives for local environmental impacts

We supported more than 249,000 people with community, environmental, physical activation and nutrition programs

through an investment of more than $4.4 million dollars.

results

First semester





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lifestylesHealthy

Time to Move

In alliance with governments from different countries, Time to Move was launched. This initiative promotes healthy lifestyles in public schools in Colombia, Costa Rica, Guatemala and Panama through training teaches so that students perform at least 60 minutes of exercise every day. A sports kit is given to each teacher which includes: 10 cones, 10 rings, 10 disks, 5 mattresses, 5 volleyball, football and basketballs, 10 sacks, 10 canes, 10 elastics and 1 rope.

Schools with Nutritional Education

This project is developed with FEMSA Foundation and Alpina Foundation in 2 schools in Bogota, Colombia, benefiting more than 500 students by supporting their development in adequate feeding habits that contribute to a higher life quality.

60 daily minutes of exercise

84,500 students and teachers

300 participating schools

500 benefited students

Promote healthy lifestyles and completely satisfying our customers with a broad products portfolio.





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HealthyLifestyles

developmentCommunity

Citizenship Plaza

This program in Brazil has the objective to revalue citizenship participation through multiple alliances that offer community services as information, personal health and environmental health.

In this year, 6 Citizenship Plazas have been installed: Sumaré, Belo Horizonte, Itabirito, Marilia, Curitiba and Jundiaí where more than 15,721 free services were given to the assistants.

"Through the volunteering job of our partners and collaborators, the Plazas allow us to share and promote activities to improve life quality of people."Ana Flavia Bello Rodríguez, External Communication and Sustainability Manager, Coca-Cola FEMSA Brazil.

Zavaleta Intervention II

From December 2014 to the first half of 2015, Zavaleta Intervention II increases the ammount of homes with rain and sewer accesses. A common space named The Ranch will be built, a key project for the community to use it as dining place and multiple use space in order to regain community belonging.

6 Citizenship Plazas and

more than 15 thousand free services

126 benefited families.

More than 3,000 neighbours benefited with the plaza, the syntetic grass field and soon, The Ranch.

BRASIL

Develop initiatives and projects that have a positive impact in the community.





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developmentCommunity

Yes, I Recycle

This program promotes environmental care through teaching the value of recycling in elementary and middle school. PET pick up contests are organized and talks are given in schools. In the first semester of the year, Coca-Cola FEMSA Mexico collected 330 tons of PET for recycling.

Productive Neighbourhood

A program that stimulates its' participants empowerment through the presentation and discussion of tools focused on the development of habilities to execute community and productive programs with the objective to improve life and environmental conditions quality.With the graduation of 120 entrepreneurs this year, Coca-Cola FEMSA renews its commitment with Venezuela and its people.

Coordinates for Life

Developed in alliance with FEMSA, this program is focused on childs and young people in Argentina, Colombia, Philippines and Mexico. Consists of modules that develop emotional and social capabilities so that healthy and mature decisions in violence, gangs and addictions topics. In this way, youths transform into change agents and diminish their vulnerability in these situations.

1,500 schools in Mexico participate in Yes, I Recycle

COORDINATESFOR LIFE

N

S

O E

Develop initiatives and projects that have a positive impact in the community.





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120 people benefited in the first semester of the year

30 entrepreneurship projects

Sustainable

The Coca-Cola Company's Supplier Guiding Principles

The quality system from The Coca-Cola Company establishes that any potential supplier authorized or hired directly by the company and/or the bottling system must demonstrate full compliance with the Supplier Guiding Principles for The Coca-Cola Company prior to receiving final approval and/or any purchase order.

The audit process is performed by independent monitoring firms accredited by The Coca-Cola Company and the delivered report demonstrates the fulfillment of human rights, labor, health and safety and environmental laws of the country where the facility operates, as well as international conventions from the International Labor Organization.

Coca-Cola FEMSA's Sustainability Evaluation for Suppliers In order to reach the total of our supply chain, at Coca-Cola FEMSA we have adopted FEMSA's Supplier Guiding Principles to complement The Coca-Cola Company's efforts under our own evaluation strategy applied to services and indirect products suppliers.

During 2015 we were able to support suppliers with:· 83 suppliers with social and environmental risks mitigation projects· 20 suppliers with ecoficiency project proposals· We started with supplier recognition projects

Supplier Guiding Principles, The Coca-Cola Company

http://www.coca-colacompany.com/our-company/supplier-guiding-principles

Human Rights Policy, The Coca-Cola Company

http://www.coca-colacompany.com/our-company/human-rights-policy

Coca-Cola FEMSA Sustainable Procurement team's evaluation to suppliers has opened new improvement opportunities for the companies that welcome the project. Interflo, provider of industrial storage racks, started its evaluation process in early 2015. Interflo is currently developing and implementing a better and stronger Security and Safety plan that is helping them to improve the working environment. "We wanted to have sustainability programs, but we didn't know where and how to start. The Sustainable Procurement area of Coca-Cola FEMSA served us as a guide for the implementation of our new programs and helped us to determine real sustainability goals" said Roberto Moreno, Sustainability Engineer at Interflo.

Working with suppliers to reduce environmental impacts and improve the social conditions of our value chain.

sourcing





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SustainableSourcing

http://www.coca-colacompany.com/our-company/human-rights-policy/

http://www.coca-colacompany.com/our-company/supplier-guiding-principles/

Water

Energy

Waste and recycling

planetOur





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Water

As a beverage bottler, water is our main raw material and we know that its efficient and sustainable management is essential to ensure the future of our business and the development of the communities where we operate.

By 2020, we aim to increase our efficiency in water use to 1.5 liters of water per liter of beverage produced. At the end of 2014, the global efficiency in manufacturing was 1.79 liters of water per liter of beverage and, for mid-2015 the result was 1.79 liter of water per liter of beverage.

Our challenge is to produce high quality beverages using less water during our processes.

We have optimization initiatives in washing cycles, improvements of flow measurement systems, water funds and wastewater treatment, among other actions, on which we are improving and sharing best practices in our operations to optimize water use in our manufacturing plants.

A great example of our actions is our plan in San Juan del Río, México. This plant has implemented water ultra filtration systems that can save up to 29,200 m3 of water per year, equivalent to the annual minimum water consuption of more than 5,330 people*, making it a notable plant in efficiency in The Coca-Cola System.

*The World Health Organization says that the daily minimum consumption of water per person to survive is 15 liters of water.

Water Use EfficiencyLiter of water per liter of beverage producedIncrease the water use efficiency in

our operations, promote recycling and reuse of resources, treat wastewater and act on conservation of resources in watersheds under a long-term vision.

1.602010 2011 2012 2013 2014 2015

(UPDATE)

1.70

1.80

1.90

2.00 1.96

1.83

1.76 1.75

1.79 1.79





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Water

Water Replenishment

With the commitment to return to our communities and environment the same amount of water used in our beverages for 2020, we have worked with FEMSA and The Coca-Cola Company in different programs and projects that ensure water sustainability.

With FEMSA Foundation, we work in the implementation of Water Funds, which are an innovative model of long-term preservation operating through investments concentrated in one fund where the resources generated are assigned to preserve the essential basin land through conservation actions. These mechanisms allow various water users to be unified under the same vision and an integrated management strategy.

In 2011, The Nature Conservancy (TNC), FEMSA Foundation, the Inter-American Development Bank (IDB) and the Global Environment Facility (GEF) created the Latin American Water Funds Partnership.

The Latin American Water Funds Partnership has developed 18 Water Funds in different implementation stages until the first semester of 2015.

Additionally, 14 potential new Water Funds have been identified and are being developed in several countries of Latin America and the Caribbean including Ecuador, Colombia, Peru, Brazil, Dominican Republic, Mexico, Costa Rica, Guatemala, among others. With 18 implemented Water Funds there are more than 33 million people benefited.

With FEMSA Foundation we have worked in the Water for Our Future project which, in only 3 years, has helped conserve more than 6,000 hectareas of water basins, replenished 6.9 million cubic meters of water through an investment of $7.44 million dollars in at least 5 countries in the region.

In Mexico and Brazil we have accomplished to replenish more than 100% of the water used in the production of our beverages.

More information: http://www.fundacionfemsa.org/informe2014/

http://www.coca-colacompany.com/collaborating-to-replenish-the-water-we-useWater





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http://www.fundacionfemsa.org/informe2014/

http://www.coca-colacompany.com/collaborating-to-replenish-the-water-we-use

Energy

Climate change can generate issues for our business' sustainability and thus we work to increase the energy efficiency of our operations while, at the same time, we reduce our greenhouse gas emissions.

The results we have had in manufacturing are:

As part of our commitment to reduce our carbon footprint and consume more clean energy, we started in 2015 operations of the Wind Farm Dominica II in Mexico, with a production capacity of 100 MW. This sums up to a total of 28% of clean energy supply in our operations in Mexico.

During 2015, we were able to calculate the greenhouse gas emissions of our entire value chain, presented for the first time in this document.

Energy EfficiencyLiters of beverage produced per mega joule consumed

Manufacturing Greenhouse Gas Emissions EfficiencyGrams of CO2 (eq) per liter of beverage

Entire Value Chain Greenhouse Gas Emissions Efficiency*Grams of CO2 (eq) per liter of beverage

*Estimated data for the entire value chain

Manufacturing DistributionPackagingIngredients

Increase the energy efficiency of our operations, diversify the energy portfolio and improve our transportation efficiency.

Refrigeration

170.00

2010 2011 2012 2013 2014

201.51 200.11 200.18

213.08

207.51

175.00

180.00

185.00

190.00

195.00

200.00

205.00

210.00

215.00

220.00

18.002010 2011 2012 2013 2014 2015

(UPDATE)

18.96

20.20

19.9019.70

18.9019.22

18.50

19.00

19.50

20.00

20.50

3.22010 2011 2012 2013 2014 2015

(UPDATE)

3.69

3.86 3.894.03

4.07 4.13

3.4

3.6

3.8

4

4.2





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Energy

and recyclingWasteOne of our company's priorities is to reduce the ammount of generated waste, promote recycling and increase material efficiency in all our processes. We have certified 10 plants as Zero Waste and are working to recycle at least 90% of our waste in every one of our bottling plants by 2020.

We have the 2020 goal to incorporate

25% of recycled or renewable material in all our PET packages.

BioPET:4.7% of plant origin materials in our packages

Recycled material:10.5% of recycled material in all our packages

Waste:We recycle 93% of the waste generated in manufacturing processes

Cans:Up to 90% of recycled material.

Light:We count with the best and lightest designs for our beverages in cans, glass and PET containers.

Create mechanisms to increase efficiency in the use of materials, promote their optimum disposal and recycling.





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Waste andRecycling

this documentAbout

This document was made with information compilled from January to June 2015. It comprehends Coca-Cola FEMSA's operations in Argentina, Brazil, Colombia, Costa Rica, Philippines, Guatemala, Mexico, Nicaragua, Panama and Venezuela.

Cover and interior designs:www.argcom.mx.

Coca-Cola FEMSA, S.A.B. de C.V. 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, as well as southeast and northeast Mexico), Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama (nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil (greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul, the state of Paraná, part of the state of Goias, part of the state of Rio de Janeiro, and part of the state of Minas Gerais), Argentina (federal capital of Buenos Aires and surrounding areas) and Philippines (nationwide), along with bottled water, juices, teas, isotonics, beer, and other beverages in some of these territories.The company owned 64 bottling plants and serves to more than 346 millions of consumers through 2,900,000 retailers and more than 120,000 employees worldwide. The company’s capital stock is owned 47.9% by Fomento Económico Mexicano S.A.B. de C.V. (FEMSA), 28.1% by wholly-owned subsidiaries of The Coca-Cola Company, and 24.0% by the public.





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http://www.argcom.mx/

Francisco Suárez HernándezCorporate Affairs Officer

Luis Darío Ochoa RodríguezSustainability Manager

Juan Carlos Cortés TrejoCorporate Communication Manager

Coca-Cola FEMSACoca-Cola FEMSAMario Pani #100 7th FloorCol. Santa Fe CuajimalpaDelegacion CuajimalpaMexico, D.F. 05348Telephone: +52.55.15195000www.coca-colafemsa.comsostenibilidad@[email protected]

Sustainability Report 2014, Coca-Cola FEMSAhttps://www.coca-colafemsa.com/assets/files/en/Investor_Information/Annual_Reports/kof_Sustainability_Report%202014_eng_.pdf

Sustainability Report 2014, FEMSAhttp://www.informesostenibilidad.femsa.com/

Sustainability Report 2014, The Coca-Cola Companyhttp://www.coca-colacompany.com/press-center/press-releases/coca-cola-releases-2013-2014-global-sustainability-report

Interesting Siteswww.femsa.comwww.fundacionfemsa.com.mxwww.coca-colacompany.com/topics/sustainability

ContactInformation





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https://www.coca-colafemsa.com/

http://www.coca-colacompany.com/topics/sustainability

http://www.femsa.com/

http://www.coca-colacompany.com/press-center/press-releases/coca-cola-releases-2013-2014-global-sustainability-report

www.fundacionfemsa.com.mx

https://www.coca-colafemsa.com/assets/files/en/Investor_Information/Annual_Reports/kof_Sustainability_Report%202014_eng_.pdf

http://www.informesostenibilidad.femsa.com/

one step ahead - coca-cola femsa

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