Femsa board approves new long-range plan to maximize value creation

Fomento Economico Mexicano "announced today 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: 1) Retail, with excellent long-term growth opportunities, comprised of Proximity, Health, and Fuel. 2) Coca-Cola FEMSA, leveraging its leading competitive position and excellent execution, combined with significant financial strength and strategic opportunities. 3) Digital, building a powerful value-added financial ecosystem, while playing a key role in leveraging the connection among FEMSA’s core business units. 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: 1) Divestiture of Heineken investment, subject to market conditions. FEMSA-appointed directors will resign from the Heineken Boards. 2) FEMSA will explore strategic alternatives for Envoy Solutions, FEMSA’s other minority investment, and other non-core, non-strategic business units. 3) 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."