SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2024
FOMENTO ECONÓMICO
MEXICANO, S.A.B. DE C.V.
(Exact name of Registrant as specified in its charter)
Mexican Economic Development, Inc.
(Translation of Registrant’s name into English)
United Mexican States
(Jurisdiction of incorporation or organization)
General Anaya No. 601 Pte.
Colonia Bella Vista
Monterrey, Nuevo León 64410
México
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F x
Form 40-F ¨
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether by furnishing
the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨
No x
If "Yes" is marked, indicate below the
file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the
registrant has duly caused this report to be signed
on its behalf of the
undersigned, thereunto duly authorized.
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FOMENTO ECONÓMICO MEXICANO, S.A. DE C.V. |
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By: /s/ Eugenio Garza y Garza |
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Eugenio Garza y Garza |
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Director of Finance and Corporate Development |
Date: February, 15, 2024
Exhibit 99.1
FEMSA Forward
Focused
Leadership in Retail, Beverages & Digital
Advancing
FEMSA Forward:
Revamping
capital allocation strategy to drive long-term intrinsic per-share value
Monterrey,
Mexico, February 15, 2024 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA” or the “Company”)
(NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) is providing additional information regarding its future capital allocation plans. These plans have
been approved by the Board of Directors of FEMSA and are an integral part of, and fully consistent with, the FEMSA Forward strategy
presented in February of 2023.
Our
capital allocation strategy is focused on driving our long-term intrinsic per-share value. We believe we have abundant attractive capital
deployment opportunities. Over the next five years we expect to invest capital in core organic growth initiatives in excess of Ps. 237,000
million, with close to Ps. 170,000 million of that deployed in Mexico, where we are one of the largest employers (over 280,000 employees),
and taxpayers, expecting to pay over Ps. 100,000 million in aggregate income taxes for the period between fiscal 2023 and 2028. Considering
the remarkable speed and success with which the FEMSA Forward-related divestments have been executed, and after accounting for
our expected organic and inorganic capital needs, we believe that returning capital to shareholders should be an important part of the
overall strategy.
Capital
allocation strategy overview and parameters
As
we look at the portfolio of investment opportunities available to us, we will privilege organic investments within our proven business
models that can generate returns well in excess our cost of capital, and with a relatively low level of risk. We will also favor investments
in initiatives and capabilities with attractive risk-reward profiles that create and drive, through market expansion and innovation,
future value creation opportunities. In addition, inorganic investments will be focused on meeting the strategic objectives of our core
verticals and scrutinized to meet strict financial criteria: value creation and cash flow generation.
Furthermore,
subject to business performance and capital deployment opportunities and beyond our ordinary dividend, we will endeavor to return to
shareholders an aggregate amount equivalent to approximately six percent of FEMSA’s current public market value over the next two
to three years, through a combination of additional dividends and share buybacks. This capital return framework will have the overarching
tenet of not maintaining idle capital on the balance sheet, and maximizing per-share value accretion as we strive to reach and maintain
a 2x Net Debt/EBITDA ex-KOF1 objective.
1 Net Debt / EBITDA ex-KOF: (Total Financial Debt ex-KOF
+ Lease Liabilities ex-KOF – Total Cash ex-KOF) / (FEMSA Retail businesses EBITDA + dividends received from Coca-Cola FEMSA).
Investor Contact
(52) 818-328-6000
investor@femsa.com.mx
femsa.gcs-web.com |
|
Media Contact
(52) 555-249-6843
comunicacion@femsa.com.mx
femsa.com |
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February 15, 2024 |
Page 1 |
Return
of capital initiatives for 2024
FEMSA
expects to use a combination of dividends and a multi-year share buyback program to return capital to its shareholders in 2024 and beyond.
To this end, the Board of Directors has approved to submit to the 2024 Annual Shareholders Meeting the following proposals: i) Increase
our ordinary dividends by approximately 20% compared to 2023 on an aggregate basis by paying four quarterly installments of Ps. 0.9161
per FEMSAUB unit and Ps. 1.0993 per FEMSAUBD unit (Ps. 10.9931 per ADS); ii) pay an additional dividend in four quarterly installments
of Ps. 0.6418 per FEMSAUB unit and Ps. 0.7701 per FEMSAUBD unit (Ps. 7.7010 per ADS), over and above the approved ordinary dividends,
to be disbursed on the same dates as the ordinary dividends; and iii) double our maximum share buyback capacity from the currently existing
authorization.
Medium-term
capital allocation considerations
Consistent
with our plans described above, it is our intention to utilize a mix of the share buyback program and additional dividends as needed.
We intend to continue to use these mechanisms in the medium term, focused on per-share value accretion and maintaining our stated leverage
objective.
About
FEMSA
FEMSA
is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor
to the communities in which it operates. Across its business units, FEMSA has more than 350,000 employees in 18 countries. FEMSA is a
member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability
Index: S&P/BMV Total México ESG, among other indexes that evaluate its sustainability performance.
Investor Contact
(52) 818-328-6000
investor@femsa.com.mx
femsa.gcs-web.com |
|
Media Contact
(52) 555-249-6843
comunicacion@femsa.com.mx
femsa.com |
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February 15, 2024 |
Page 2 |
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