Strategic Progress and Achievements for 2022

During the year, we continued developing a consumer-centric portfolio, focused on affordability, innovation, and mix enhancement. Through our initiatives, we grew our single-serve mix, non-carbonated beverage volumes, and zero- and low-sugar portfolio. Notably, the new formula of Coca-Cola Zero Sugar outperformed the sparkling beverage category across our markets, achieving 27% and 11% growth in Brazil and Mexico, respectively. In terms of mix enhancement, we leveraged our multipacks, increased cooler coverage, and execution to grow our single-serve mix across our territories.

Aligned with our enhanced cooperation framework with The Coca-Cola Company—along with our omnichannel platforms’ digital order-taking capabilities—we continued exploring new revenue streams to complement our multi-category portfolio through pilot programs and distribution agreements with strategic partners across adjacent categories in certain markets.

Importantly, we expanded our B2B and D2C commercial platforms, enabling our customers to interact with us whenever, wherever, and whichever way they want. Currently, we serve over 800 thousand monthly active purchasers on Juntos+, our B2B omnichannel platform, up almost threefold over the past year. We also carried on with the expansion of our D2C home delivery model, rolling out 400 new routes—reaching close to 1,650 routes serving approximately 600 thousand Mexican households.

Importantly, we underscored our company’s commitment to sustainability. This year, we continued making history in sustainable financing, becoming the first company in the consumer sector in the Americas and the first in the Coca-Cola System to successfully issue social bonds. Indeed, for the third consecutive year, our sustainability (ESG) performance enabled us to be included in the S&P Global Sustainability Yearbook 2023.

Environmentally, we continued focusing on making a difference on climate action, circular economy, and water efficiency. We began construction of PLANETA, a food-grade recycling plant in Tabasco, Mexico, with the capacity to process approximately 50,000 tons of post-consumer PET bottles annually. This new plant—coupled with new collection centers in the southeast region—will help us to expand our PET collection and close the recycling loop towards our objective of including at least 50% recycled content in our packaging by 2030. We improved our water use ratio to 1.46 liters of water per liter of beverage produced—an industry benchmark. We also look to decrease our scope 1 and 2 emissions by 50% and to reduce 20% of our entire value chain emissions by 2030.

Socially, we are focusing on our neighboring communities, value chain, and talent diversity. We are increasing the representation of women in leadership positions; and we have a robust plan to achieve our ambition of 40% of women in leadership and management positions by 2030. Notably, this is the fifth consecutive year that our company is part of the Bloomberg Gender-Equality Index.

Finally, as part of our focus on value-enhancing acquisitions, we integrated CVI in record time during the year with synergies above expectations, marking an important step in the consolidation of our Brazilian footprint.

Financial & Operating Highlights

As we navigated an uncertain inflationary environment, our focus on affordability and relentless point-of-sale execution enabled us to deliver 8.6% year-over-year volume growth—12.1% ahead of our 2019-baseline year. For the year, total revenues increased 16.4% to Ps. 226.7 billion. Operating income improved 12.5% to Ps. 30.8 billion. Operating cash flow increased 10.7% to Ps. 43.0 billion. Controlling net income rose 21.2% to Ps. 19.0 billion to achieve earnings per share of Ps. 1.13 and per unit of Ps. 9.06 (Ps. 90.60 per ADS).

Notably, our return on invested capital (ROIC) improved for the fifth consecutive year. Moreover, our net-debt-to-EBITDA ratio ended the year at 0.9 times—while our cash position was more than Ps. 40 billion—reflecting our strong balance sheet, while putting us in a great position to grow.

For the year, our consolidated volumes increased significantly, driven mainly by strong growth in Argentina, Brazil, Colombia, Guatemala, and Mexico. Today, all of our territories’ volumes are ahead of pre-pandemic levels, evidencing positive momentum across our territories.

All of our beverage categories drove growth, with our non carbonated beverages and bottled water categories growing double digits. Driven by our portfolio initiatives and point-of-sale execution, we continued gaining share across key markets and categories.

Our solid volumes and revenue growth management capabilities drove double-digit top-line growth. On the profitability front, we mitigated the impact of inflation by leveraging our top-line growth, hedging initiatives, and cost and expense efficiency strategies throughout the year.