Investor Presentation November 2017 Safe Harbor Statement During - PowerPoint PPT Presentation

Investor Presentation – November 2017

Safe Harbor Statement During this presentation management may discuss certain forward-looking statements concerning FEMSA’s future performance that should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which could materially impact FEMSA’s actual performance. 2

Overview Ownership 47% (1) 100% 15% Coca- Cola’s largest Market leader and The world’s most franchise bottler in fastest growing retail international brewer the world by volume chain in Mexico 3 1 Represents 63% of shares with voting rights.

Leading Consumer Company in Latin America FEMSA Comercio Coca-Cola Logistics/ Retail Health Fuel FEMSA Refrigeration Division Division Division Mexico Brazil Colombia Argentina Venezuela Chile Panama Costa Rica Philippines Guatemala Nicaragua 4 Internal company data, YTD.

Creating Economic Value in the Last Decade Financial Highlights FEMSA Market Cap Evolution (US$ MM) 2016 2006 2 CAGR% Revenue 1 399,507 93,238 16% 30,494 EBIT 1 37,427 11,060 13% EBIT Margin 9.4% 11.9% EBITDA 1 54,987 14,603 14% EBITDA Margin 13.8% 15.7% CAPEX 1 22,155 4,488 17% 1 Amounts expressed in millions of Mexican Pesos 2 Figures for 2006 are the arithmetical sum of Coca Cola FEMSA and FEMSA Comercio, therefore figures exclude sold businesses. 13,807 • Consistently strengthening our competitive position. • Ability to operate in a rapidly changing economic environment. • Strong brand portfolio and exceptional operational 2006 Nov-17 capabilities. CAGR 06 – Nov 17: 8% Source: Bloomberg, as of November 22, 2017. 5

Increasing Cash to Shareholders Over Time… …while retaining strategic and financial flexibility Ordinary Dividend (Millions of Mexican Pesos) 41% CAGR 47% 22% 8,636 44% 8,355 42% 32% 40% 7,350 6,684 6,684 6,200 34% 4,600 26% 24% 19% 22% 2,600 18% 1,620 1,620 Payout 1,485 986 Ratio 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net Debt / 1.3 x 1.1 x 1.1 x 0.7 x -0.1 x 0.0 x 0.0 x 1.2 x 1.1 x 1.2 x 1.6 x EBITDA 6 Note: Dividend figures are in Mexican pesos. Payout ratio figures are the division of the dividend between previous year net majority income. 2010 net majority income does not include Heineken transaction effect. 2011 and thereafter figures are under International Financial Reporting Standards (“IFRS”).

An Increasingly Balanced Core Portfolio Revenue Contribution EBITDA Contribution 2006 2006 16% 38% 62% 84% 2016 2016 34% 46% 54% 66% Coca-Cola FEMSA FEMSA Comercio 7

FEMSA Comercio Overview Retail Health Fuel Division Division Division Includes drugstores Operates OXXO, the Operates the OXXO GAS and related operations largest C-store chain in chain of retail service in Mexico and the Americas by units stations in Mexico South America 9

FEMSA Comercio Business Evolution FEMSA Comercio EBITDA ($Millions of Pesos) and Business Evolution 18,000 16,000 14,000 12,000 10,000 Surpass 1,000 openings per 8,000 year 5,000 10,000 6,000 OXXO store OXXO store mark mark 4,000 2,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CAGR 1 22% CAGR 1 20% 10 1 Total FEMSA Comercio Annual EBITDA CAGR.

FEMSA Comercio is finding growth in adjacent formats Contribution for 2016 Revenue EBITDA Fuel 2% Fuel Health 14% 13% Health 21% Retail 66% Retail 85% 11 Note: Numbers as of December 31, 2016.

OXXO: A Format that Fits our Consumer’s Needs • Third largest retailer in terms of Revenues in Mexico • Benchmark for SSS and sales density in Mexico • Best-in-class margins and returns • We open one new store every 8 hours on average • Every day, approximately 11 million people make a purchase at an OXXO Store 12

Largest Store Chain in the Americas by Units OXXO Stores as a Percentage of Mom & Pops in Mexico 1 15,160 2.0% 16,000 14,015 # OXXO stores in Mexico % mom & pops in Mexico 12,812 14,000 1.8% 11,683 12,000 1.6% 10,567 9,538 10,000 1.4% 8,409 7,329 1.2% 8,000 6,374 5,563 4,847 1.0% 6,000 4,000 0.8% 2,000 0.6% 0.4% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of Stores Mexico The Americas 3 15,999 2 15,936 10,692 9,962 3,424 4,849 3,805 3,766 3,365 Others 1,439 1,985 Mexico Other C-Stores in Mexico Note: For The Americas Section: Alimentation Couche-Tard includes US, Canada and Latin America as of November 2017. Source: Company Information. 7-Eleven: US, Canada and Mexico Operations as of Dec 2016. Source: Company Information. Rest of the companies: Source: CS News 13 "Top 100 US Convenience Store Companies”, Published July 2016. Mom & pops: Company and INEGI information. 1 OXXO stores as of December 31, 2016 in Mexico. 2 OXXO Stores in Mexico as of September 30, 2017. 3 Total OXXO stores in LatAm as of Septeber 30, 2017.

Horizontal Growth: Plenty of Runway Ahead 15,936 stores in Mexico and counting FEMSA Comercio has developed proprietary models to assist in identifying optimal store locations, store formats and product categories Tijuana 1 OXXO Penetration Level by Population Population: 1.6 mm OXXO Stores: 715 Penetration Population / OXXO 2,181 people/store Medium <10,000 per store Moderate 10,000-30,000 per store Low >30,000 per store Nuevo Leon 1 Population: 5.1 mm OXXO Stores: 1,365 3,751 people/store 17 Distribution Centers Valley of Mexico 1 Population: 25.1 mm OXXO Stores: 2,311 10,864 people/store 14 Note: INEGI 2015 Inter Population Consensus Survey . FEMSA information as of September 30, 2017. 1 OXXO stores as of September 30, 2017.

Differentiated Approach to Fill Consumer Needs THIRST LUNCH Quench your thirst immediately Satisfy your hunger with an on-the-go meal CRAVING GATHERING Satisfy your sudden craving for a Stop by for your party needs snack, a meal or drink TIME OPTIMIZATION DAILY Acquire one-stop products and services Take home your everyday grocery needs in a simple and fast way BREAKFAST REPLENISHMENT Start your day with a practical breakfast Replenish your depleted grocery and non- food products 15

Fine-tuning Strategies to Drive Same-Store Sales and Profitability Category Development Category Development Segmentation -Services -Prepared Food +1,000 services offered in the store 16

FEMSA Comercio – Health Division South America Providing a solid platform for continued growth across the region • Operating more than 1,000 health related points of sale in Chile and Colombia • Strong brand recognition and industry leadership in Chile • Operational expertise will serve as a driver of profitability • Region presents opportunities for further international and cross-format growth 17 Note: Numbers as of September 30, 2017.

FEMSA Comercio – Health Division Mexico Aspiring to consolidate fragmented industry following OXXO game plan • FEMSA Comercio now operates more than 1,000 drugstores in Mexico, or approximately 3% of industry units • Current expected organic revenue growth of 10% in the Mexican operations • Oxxo´s operational and logistics expertise will facilitate national expansion • Standardizing business model across different regional brands 18 Note: Numbers as of September 30, 2017.

A Growing Footprint FEMSA Comercio’s Health Division is gradually becoming a key drugstore operator in Latin America LatAm Comparable Players by Number of Stores 2,178 1,907 1,724 1,554 1,556 1,483 1,079 977 784 2 1 3 3 1 2 1 3 1 Health Division Source: 1 1Q17 Company Reports. FEMSA Comercio – Health Division includes drugstores and beauty stores. 2 4Q16 Company Reports. 19 3 LatAm Retail Pharma Map, ILACAD World Retail, points of sale as of March, 2015.

Gas Stations (OXXO GAS) FEMSA is participating in the rapid transformation of Mexico’s Fuel industry • New changes to Mexican regulatory framework now allow FEMSA to participate directly in the Energy sector, particularly through petrol stations • We concentrate mainly in the northern part of the country, but with a growing presence in 16 Mexican States Footprint Number of Stations (End of Quarter) 397 390 388 + 382 348 - 3Q16 4Q16 1Q17 2Q17 3Q17 Station Annual 14.1% Growth 20 Note: Numbers as of September 30, 2017.

Gas Stations (OXXO GAS) Same Station Volume 1 • High-growth, low asset-intensity, high-return 604 business 594 • As of September 30, 2017 there were 397 590 587 OXXO GAS stations, representing around 3% of a highly-fragmented industry Revenue 3Q16 3Q17 2016 2017 12 17.0 (Billions of Mexican Pesos) (1.7%) (0.5%) 10 16.0 9.6 9.5 9.1 8 15.0 8.1 7.5 6 14.0 Price 14.3 14.4 14.3 per 4 13.0 12.4 Liter 2 12.3 2 12.0 0 11.0 3Q16 4Q16 1Q17 2Q17 3Q17 1 Volume in thousands of liters considering same stations with more than twelve months of operations. 21 2 Average price per liter in Mexican Pesos.