HEINEKEN · 2020-02-25 · 2 Disclaimer This presentation contains forward-looking statements with...

HEINEKEN Barclays Back To School Conference

Heineken NV / Heineken Holding NV

3 September 2014

2

Disclaimer

This presentation contains forward-looking statements with regard to the financial position and results of HEINEKEN’s activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s ability to control or estimate precisely, such as future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials, interest rate and foreign exchange fluctuations, change in tax rates, changes in law, changes in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN’s publicly filed annual reports.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. HEINEKEN does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials.

Market share estimates contained in this presentation are based on outside sources such as specialised research institutes in combination with management estimates.

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Strong performance in recent H1 results

2014H1 2013H1 Organic

Change (%)

Group revenue 10,196 10,339 4.6

Group revenue/hl (€) 90 93 1.5

Group operating profit 1,560 1,448 13

Group operating profit (beia) margin 15.3% 14.0%

Consolidated Revenue 9,274 9,354 4.8

Consolidated operating profit (beia) 1,454 1,327 14

Net profit (beia) 772 679 19

Net profit 631 639

Diluted EPS (beia) in € 1.34 1.18

Free operating cash flow 571 178

Net Debt/EBITDA (beia) ratio 2.5 2.9

Mhl/€m

4

The leading premium global brewer with sustainable growth platforms

1 A BROAD PREMIUM PORTFOLIO,

LED BY Heineken®

2

COOL MARKETING, INNOVATION & COMMERCIAL EXECUTION

3

DRIVING COST EFFICIENCIES

4 GLOBAL REACH ENABLES

BALANCED GROWTH

5 BREW

A BETTER WORLD

Generate sustainable medium-term top-line growth, gradual margin expansion and

consistently strong free cash flow generation

5

Powerful Priority Brand portfolio

Belgian

Abbey beer

brand

The

Independent

Mexican

Tequila

flavoured beer

The global

leader in cider

The leading

international

premium brand

6 Source: Canadean latest estimates 1 One Equity

Heineken®: Truly global premium beer in the strategic IPS segment

2.1%

5.1%

Beer IPS

Volume Development 5 year CAGR

Heineken® : #1 global IPS brand with strongest brand equity

Heineken®

Corona

Budweiser

Stella Artois

Tiger

Dos Equis Carlsberg

6.0

6.2

6.4

6.6

6.8

7.0

7.2

7.4

7.6

7.8

0% 5% 10% 15% 20% 25%

Bra

nd

eq

uit

y1

IPS share

7

Six Competitive Advantages

Design Marketing

campaigns Product

Sponsorships Digital Innovation

8

Placeholder The City New Global campaign

9

Tapping into key growth opportunities

Euromonitor Canadean latest estimates LAD: Long Alcoholic Drinks

Cider complementary to beer business and Affligem addressing the craft beer taste quest

5%

2%

1%

Cider Beer Wine

CIDER GROWING >2.5X FASTER THAN BEER

Global cider category growth

CAGR% (2008-2013)

2%

4%

6%

All beer Premium

Beer

Premium

Specialty

Belgian Abbey beer brand

Price Index 180 to 250 vs.

mainstream beer

Rolling out and exporting to

30 countries globally

SPECIALITIES1: FASTEST GROWING BEER SEGMENT

Volume: 2010 – 2014F CAGR %

1 Premium markets includes domestic and international segments: specialties are defined as premium non lager

10 Source: Canadean

Tiger and Dos Equis – Regional power brands

TIGER VOLUME IN ASIA PACIFIC

2011 2012 2013

2.9

4.0

5.1 33%

CAGR

ACCELERATED GROWTH OF DOS EQUIS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Vo

lum

e (

kHL)

MexicoUSA

Volume:

CAGR (2010-2013)

Total: 12%

11

Placeholder Dos Equis

12

With strong positions within home markets

Complemented with Local Brand Champions

Mexico Indonesia

Nigeria

Poland

UK

5.7mhl 2.2mhl

3.8mhl 14.5mhl 1.4mhl

13



LED BY Heineken®

2


3



BALANCED GROWTH

5 BREW

A BETTER WORLD



14 Facebook fans as at 10 August 2014

Cool marketing and prestigious sponsorships with strong digital activation

#1 ON

FACEBOOK

SPORTING EVENTS, MUSIC & FILM

FESTIVALS

SOCIAL AND DIGITAL MEDIA AWARD-WINNING GLOBAL CAMPAIGNS

18.1M Heineken®

12.2M Budweiser

1.9M Carlsberg

7.0M Corona

7.2M Stella Artois

(Number of Fans)

15

Innovations contributing significantly to top line growth

1 From 1 January 2013, the innovation rate is calculated as revenues generated from innovations (introduced in the past 40 quarters for a new category, 20 quarters for a new brand and 12 quarters for all other innovations, excluding packaging renovations) divided by total revenue

3.0%

4.1%

5.3%

5.9%

7.4%

2010 2011 2012 2013 2014HY

2020 Target: 6%

INNOVATION RATE1

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Driving excellence in outlet execution Partnering for growth with our customers

TARGETED CHANNEL STRATEGIES

GLOBAL BRANDS ACTIVATION

BUILDING SALES CAPABILITIES

BUILDING PARTNERSHIPS

17



LED BY Heineken®

2


3



BALANCED GROWTH

5 BREW

A BETTER WORLD



18

TCM2 Cost Savings Delivered Early, In-Full Ongoing cost savings expected to contribute to future margin expansion

Completion of TCM2 programme (2012-2014HY): €637 million

Supply

Chain

68%

Commerce

9%

Wholesale

5%

Support

18%

TMC2 Functional Split

Western

Europe

28%

Central &

Eastern

Europe

20% Africa &

Middle East

16%

Americas

21%

Asia Pacific

3%

Other

12%

TMC2 Regional Split

Ongoing productivity improvements in Supply Chain

Rightsizing and restructuring to optimise cost structure

Further leverage success of Global Business Services organisation

Additional cost savings in global purchasing

Extending geographic scope and activities of HEINEKEN’s global shared services

Committed to driving further cost savings:

19



LED BY Heineken®

2


3



BALANCED GROWTH

5 BREW

A BETTER WORLD



20

HEINEKEN at a glance

1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates in 2013 2 Group operating profit (beia) is 2013 consolidated operating profit (beia) plus attributable share of operating profit (beia) from joint ventures and associates. Excludes Head Office.

AME

14%

Americas

28%

Asia Pac

11%

CEE

25%

WE

22%

Group beer volume1 by region (2013)

AME

20%

Americas

26%

Asia Pac

18%

CEE

10%

WE

26%

Group Operating profit (beia)2 by region (2013)

Operating Companies

Joint Ventures/ Associates

Export

Licences

70+ COUNTRIES

165 BREWERIES

250+ BRANDS

195mhl GROUP BEER

VOLUME1

57% OF GROUP OPERATING

PROFIT (BEIA)2 FROM

DEVELOPING MARKETS

85,000 DIRECT

EMPLOYEES

21 1 Includes domestic beer operations only 2 Includes domestic beer and export operations

Mexico Delivering value growth and significant margin expansion

2010 2013 2010 2013 2010 2013

12.9%

18.2%

REVENUE1

2010-2013

€M

OPERATING PROFIT

(BEIA)1 2010-2013

€M

OPERATING PROFIT (BEIA)

MARGIN2 2010-2013

€M

CAGR +21% CAGR +6%

• Mexico positive market dynamics -

economic outlook; growing middle

class; increasing urbanisation

• Price segmentation delivering higher

value. Strong commercial execution in

the trade.

• Positive momentum continues, recent

H1 results margin+350bps in 2014H1

• Determined cost focus

22

Source: Canadean latest estimates International database/US Censens Bureau 2012 PCC: Per Capital Consumption in litres

A diverse brand portfolio competing in different segments and beverage categories

Nigeria

CAGR%

Premium

Mainstream

Value

International Premium

Strong organic growth momentum (indexed to 2009)

A well segmented brand portfolio

11%

10%

6%

Sele

ctio

n o

f b

ran

ds

2009 2010 2011 2012 2013

Revenues Volumes Operating profit (beia)

1 Creation of one merged HEINEKEN company in Nigeria

Investing ahead of the curve – capacity, commercial assets, brand building

Optimising portfolio coverage and ensuring effective price laddering

Lead in innovation for growth

Focused cost discipline

Priorities for action to win with Nigeria

2

3

4

5

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1. Broad leadership positions only 2. 28 breweries in India includes 9 contract breweries Source: Most recent competitor financial results

HEINEKEN best placed to access regional growth opportunities

Asia Pacific: A dynamic, high growth region

HEINEKEN HAS LEADERSHIP IN THE LARGEST NUMBER OF MARKETS1

Number of #1 and #2 market positions in Asia-Pacific

14

5

5

3

1

HEINEKEN

Carlsberg

Kirin

SABMiller

ABInbev

52 BREWERIES2

10,800 EMPLOYEES

OVER 50 BRANDS

APB successfully integrated in 2013

Region of growing importance to HEINEKEN:

contributed 18% of group operating profit (beia) in 2013

IPS segment opportunity compelling: Expected to

grow 8.7% over next 5 years vs mainstream beer 3.5%

Focus on IPS opportunity in China with Heineken®

and Tiger brands

Premium led portfolio complemented by strong

mainstream brands

Position strengthened and enhanced by

strong partnerships in the region

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LED BY Heineken®

2


3



BALANCED GROWTH

5 BREW

A BETTER WORLD



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5. Brew a Better World (BaBW) Six key priority areas supporting the Business Agenda through CSR

Energy Water Sourcing Responsible Consumption

Communities Health & Safety

• Reducing energy

(CO2) Emissions

• Example: in fridges

reduce by 50% by

2020

• Protecting water

resources

• Example: reduce

water consumption

by 25% by 2020

• Addressing

sustainability

• Example: Local

sourcing in Africa

with 60% raw

materials to be

locally sourced

• Advocate

responsible

consumption

• Example: Deliver

on global industry

commitments

• Inclusive growth

with communities

• Example: HEINEKEN

Africa Foundation

• Health and Safety

targets

• Example: Employees

and Human Rights

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Summary

Broad premium portfolio led by Heineken® Heineken® leading global brand in IPS

Expansion of priority brands to capture consumer segmentation

Best placed to win in growing cider category

Cool marketing, innovation and commercial execution Expertise in premium brand development

Uniquely creative marketing & sponsorship platforms

Strong global innovation capabilities

Relentlessly driving cost efficiencies Delivered TCM2 targeted cost savings ahead of schedule and target.

Expanding scope under Global Business Services

Focused on delivering future value-enhancing growth

Global reach with strong access to growth markets Highly diversified emerging markets exposure

Brewing a better world

HEINEKEN · 2020-02-25 · 2 Disclaimer This presentation contains forward-looking statements with...

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