Fomento Económico Mexicano, S.A.B. de C.V. (BMV:FEMSA UBD) announced the results of strategic review. On February 15, 2023, Fomento Economico Mexicano announced that its board of directors has approved a new long-range plan to maximize value creation, as well as a series of decisions resulting from its strategic review process. During 2022 FEMSA carried out a thorough strategic review of its business platform, including the bottom-up definition of long-range plans for each business unit, as well as the top-down analysis of the optimal corporate and capital structure, to ensure full alignment between the Board and management as to how to pursue and maximize value creation.

Consistent with this vision, FEMSA has determined that the best path to maximize long term value creation is by focusing on its core business verticals which have the highest strategic relevance, growth potential, and financial and competitive strength: Retail, with excellent long-term growth opportunities, comprised of Proximity, Health, and Fuel. Coca-Cola FEMSA, leveraging its leading competitive position and excellent execution, combined with significant financial strength and strategic opportunities. Digital, building a powerful value-added financial ecosystem, while playing a key role in leveraging the connection among FEMSA's core business units.

The decisions announced, and the resulting corporate and capital structure, are aligned with FEMSA's strategic priorities of driving long-term growth, increasingly enabled by digital capabilities, always within its core business verticals, and with a disciplined capital allocation approach. José Antonio Fernández Carbajal, FEMSA's Executive Chairman of the Board, commented: “After thoroughly analyzing our business platforms, including their strategic opportunities, long-range plans, and the best strategy to continue to drive growth and allocate capital in the future, FEMSA's Board of Directors has approved a series of decisive actions. Once completed, these actions will materially simplify FEMSA's corporate structure, providing increased strategic clarity and focus.

They will also allow us to return capital to our shareholders over time.” Daniel Rodríguez Cofré, FEMSA's Chief Executive Officer, commented: “Following the definition and approval of FEMSA's long-range plan, we are convinced that the best way to continue creating value at FEMSA is through a structure that focuses solely on the businesses that are core to us, where we have built leading platforms, and that have proven capabilities, financial strength, and dynamic avenues for growth. Just as importantly, we are providing the strategic framework, priorities, and capital structure parameters that will increase visibility into FEMSA for investors and market participants. We are confident that the FEMSA Forward vision presented today will position our company to create significant economic, social, and sustainable long-term value for all our shareholders.” Specific actions to be taken: As a result of the review, the Board of Directors of FEMSA has approved a series of actions and divestitures conducive to achieving this strategic focus within the next 24 to 36 months: Divestiture of Heineken investment, subject to market conditions.

FEMSA-appointed directors will resign from the Heineken Boards. FEMSA will explore strategic alternatives for Envoy Solutions, FEMSA's other minority investment, and other non-core, non-strategic business units. FEMSA will seek to reduce its existing debt to achieve a target leverage of approximately 2x Net Debt/EBITDA ex-KOF1, maintaining a solid investment grade credit rating.

Capital in excess of that required for organic and inorganic growth in our core business verticals will be returned to FEMSA shareholders over time.