Fomento Económico Mexicano B de C : Estados Financieros Heineken 2019

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders, the Board of Directors, and the Executive Board of Heineken N.V.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Heineken N.V. and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated income statements and consolidated statements of comprehensive income, cash flows and changes in equity, for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Adoption of New Accounting Standard

As discussed in note 4 to the consolidated financial statements, effective January 1, 2019, the Company adopted IFRS 16 - Leases, using the modified retrospective method.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte Accountants B.V.

Amsterdam, the Netherlands

February 11, 2020

We have served as the Company's auditor since 2015.

F-120

Consolidated Income Statement

For the year ended 31 December
In millions of €	Note		2019		2018*		2017*
Revenue	6.1		28,521		26,811		25,843
Excise tax expense	6.1		(4,552)	(4,322)	(4,234)
Net revenue	6.1		23,969		22,489		21,609
Other income	6.2		95		75		141
Raw materials, consumables and services	6.3		(14,592)	(14,001)	(13,334)
Personnel expenses	6.4		(3,880)	(3,749)	(3,550)
Amortisation, depreciation and impairments	6.6		(1,959)	(1,693)	(1,587)
Total other expenses			(20,431)	(19,443)	(18,471)
Operating profit			3,633		3,121		3,279
Interest income	11.1		75		71		78
Interest expenses	11.1		(529)	(492)	(468)
Other net finance income/(expenses)	11.1		(59)	(64)	(123)
Net finance expenses			(513)	(485)	(513)
Share of profit of associates and joint ventures	10.3		164		210		75
Profit before income tax			3,284		2,846		2,841
Income tax expense	12.1		(910)	(741)	(740)
Profit			2,374		2,105		2,101
Attributable to:
Shareholders of the Company (net profit)			2,166		1,913		1,883
Non-controlling interests			208		192		218
Profit			2,374		2,105		2,101
Weighted average number of shares - basic	6.7		573,643,551		570,146,069		570,112,097
Weighted average number of shares - diluted	6.7		574,217,111		570,663,632		570,361,374
Basic earnings per share (€)	6.7		3.78		3.36		3.30
Diluted earnings per share (€)	6.7		3.77		3.35		3.30

* Restated for IAS 37. Refer to note 4 for further details.

F-121

Consolidated Statement of

Comprehensive Income

For the year ended 31 December
In millions of €		Note		2019		2018*		2017*
Profit		2,374	2,105	2,101
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss:
Remeasurement of post-retirement obligations	12.3	(210)	221	64
Net change in fair value through OCI investments 1	12.3	9	11	-
Items that may be subsequently reclassified to profit or loss:
Currency translation differences	12.3	369	(106)	(1,475)
Reclassification of currency translation differences to profit and loss	12.3						59
Change in fair value of net investment hedges	12.3	(43)	(3)	26
Change in fair value of cash flow hedges	12.3	64	(67)	109
Cash flow hedges reclassified to profit or loss	12.3	21	(77)	(3)
Net change in fair value through OCI investments 1	12.3	1	-	68
Cost of hedging	12.3	(5)	6	-
Share of other comprehensive income of associates/joint ventures	12.3	(20)	(36)	(7)
Other comprehensive income, net of tax	12.3	186	(51)	(1,159)
Total comprehensive income		2,560	2,054	942
Attributable to:
Shareholders of the Company		2,328	1,858	839
Non-controlling interests		232	196	103
Total comprehensive income		2,560	2,054	942

* Restated for IAS 37. Refer to note 4 for further details.

• In 2017 these investments were classified as available-for-sale investments F-122

Consolidated Statement of Financial Position

As at 31 December						As at 31 December
In millions of €		Note	2019	2018*		In millions of €		Note	2019		2018*
Intangible assets	8.1	17,769	17,459		Shareholders' equity	11.4		16,147		14,525
Property, plant and equipment	8.2	13,269	11,359		Non-controlling interests	11.4		1,164	1,183
Investments in associates and joint ventures	10.3	4,868	2,021		Total equity				17,311		15,708
Loans and advances to customers	8.3	277	341
Deferred tax assets	12.2	647	626		Borrowings	11.3		13,366		12,628
Other non-current assets	8.4	1,255	1,220		Post-retirement obligations	9.1		1,189	954
Total non-current assets		38,085	33,026		Provisions	9.2		756		833
							Deferred tax liabilities	12.2		1,422	1,431
Inventories	7.1	2,213	1,920		Other non-current liabilities	11.6		153	168
Trade and other receivables	7.2	4,123	3,795		Total non-current liabilities				16,886		16,014
Current tax assets		123	71
Derivative assets	11.6	28	35		Borrowings	11.2/11.3		3,686		2,358
Cash and cash equivalents	11.2	1,821	2,903		Trade and other payables	7.3		7,520	6,891
Assets classified as held for sale	10.2	111	401		Returnable packaging deposits	7.4		565	569
Total current assets		8,419		9,125		Provisions	9.2		184		164
						Current tax liabilities				283	245
Total assets		46,504		42,151
							Derivative liabilities	11.6		69	70
							Liabilities associated with assets classified as held for sale	10.2		-	132
							Total current liabilities				12,307		10,429
							Total equity and liabilities				46,504		42,151

* Restated for IAS 37. Refer to note 4 for further details.

F-123

Consolidated Statement of Cash Flows

For the year ended 31 December
In millions of €	Note	2019		2018*		2017*
Operating activities
Profit			2,374		2,105	2,101
Adjustments for:
Amortisation, depreciation and impairments	6.6	1,959	1,693	1,587
Net interest expenses	11.1	454	421	390
Other income	6.2	(95)	(75)	(141)
Share of profit of associates and joint ventures and dividend income on fair value through OCI investments			(173)	(228)	(84)
Income tax expenses	12.1	910	741	740
Other non-cash items			240		201	393
Cash flow from operations before changes in working capital and provisions			5,669		4,858	4,986
Change in inventories			(257)	(129)	(185)
Change in trade and other receivables			(245)	(66)	(241)
Change in trade and other payables and returnable packaging deposits			510		908	495
Total change in working capital			8		713	69
Change in provisions and post-retirement obligations			(121)	(31)	(131)
Cash flow from operations			5,556		5,540	4,924
Interest paid			(528)	(555)	(463)
Interest received			52		118	98
Dividends received			181		109	109
Income taxes paid			(924)	(824)	(786)
Cash flow related to interest, dividend and income tax			(1,219)	(1,152)	(1,042)
Cash flow from operating activities			4,337		4,388	3,882
Investing activities
Proceeds from sale of property, plant and equipment and intangible assets			177		111	187
Purchase of property, plant and equipment			(1,915)	(1,888)	(1,696)
Purchase of intangible assets			(186)	(167)	(137)
Loans issued to customers and other investments			(249)	(239)	(259)
Repayment on loans to customers and other investments			64		41	54
Acquisition of subsidiaries, net of cash acquired			(183)	(70)	(1,047)
Acquisition of/additions to associates, joint ventures and other investments			(2,875)	(159)	(93)
Disposal of subsidiaries, net of cash disposed of			244	15	10
Disposal of associates, joint ventures and other investments			50		1	16
Cash flow (used in)/from investing activities			(4,873)	(2,355)	(2,965)
Financing activities
Proceeds from borrowings			2,288		1,694	3,268
Repayment of borrowings			(2,150)	(1,545)	(3,205)
Payment of lease commitments			(259)	-	-
Dividends paid			(1,223)	(1,090)	(1,011)
Purchase own shares and shares issued			428		(20)	-
Acquisition of non-controlling interests			(103)	(2)	(18)
Other			3		(4)	-
Cash flow (used in)/from financing activities			(1,016)	(967)	(966)
Net cash flow			(1,552)	1,066	(49)
Cash and cash equivalents as at 1 January			2,248		1,177	1,177
Effect of movements in exchange rates			(9)	5	5
Cash and cash equivalents as at 31 December	11.2	687		2,248	1,133

* Restated for IAS 37. Refer to note 4 for further details.

F-124