Welcome - Heineken

Welcome
Paris | 20 June 2012
Heineken N.V.
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.
2
Deutsche Bank Global Consumer Conference 2012
HEINEKEN:
HEINEKEN: Leading in Western Europe
Didier Debrosse
Regional President, Western Europe
Paris | 20 June 2012
Heineken N.V.
Agenda
HEINEKEN: Leading in Western Europe
1 Western Europe Beer Market
2 HEINEKEN in Western Europe
3 HEINEKEN’s Value Growth Strategy
4
Western Europe is a large and resilient beer market…
market…
Western Europe Beer Market*: 1991-2020F (mhl)
CAGR
1991-’11: -0.3%
2008-’11: -1.4%
2011-’20F: 0.0%
mhl
200
180
United Kingdom
160
Spain
140
France
120
Italy
100
Netherlands
Belgium
80
Portugal
60
Switzerland
40
Finland
20
Ireland
0
1991
5
1996
2001
2006
Source: Plato Logic May 2012. * HEINEKEN Western Europe Region (10 countries)
2011F
2016F
…offering access to a significant profit pool
HEINEKEN Western Europe markets represent a profit pool of circa €2.2billion
Western Europe Beer Profit Pool*
65
Ireland
Market EBIT (€)/ hl
55
45
35
Belgium
25
15
Switzerland
Italy
Neth.
Spain
Portugal
France
5
-5 25
35
45
55
65
= size of profit pool (€100m)
6
Source: Plato Logic May 2012, HEINEKEN
* HEINEKEN Western Europe Region markets only (10 countries); 2010 profit pool
UK
Finland
75
85
95
Beer per Capita Consumption
Evolving trends in the European beer market
Opportunities
Resilience of beer category
Premiumisation
Segmentation
Innovation
Shifting channel preferences
7
Challenges
Economic challenges
Changing demographics
Private label penetration
Growing discounter presence
Regulatory changes
Agenda
HEINEKEN: Leading in Western Europe
1 Western Europe Beer Market
2 HEINEKEN in Western Europe
3 HEINEKEN’s Value Growth Strategy
8
HEINEKEN is the leading brewer in Western Europe…
Market Share
25-50%
10-25%
2
1
1
2
2
2
2
1
1
# = position in market (by beer volumes)
9
Source: 2011 Plato, Canadean, ACNielsen, HEINEKEN
2
…contributing significantly to cost savings
and cash generation…
Western Europe has realised over 50% of
€1.1bn Group cost savings from 2006-2011
Free operating cashflow:
2009-2011
Western
Other
regions:
49%
Europe:
Western
Europe:
Other
51%
regions:
44%
56%
Key contributor to new TCM2 cost saving
programme (2012-2014)
Improved working capital management
25
Net working capital days
6
2009
10
2010
-3
2011
…delivering strong profit growth
Western Europe EBIT BEIA development: (2006-2011)
EBIT (beia) (€m)
2006-2011
Organic EBIT BEIA
CAGR: +7%
1000
June 2010
Divestment WTBS
November 2011
Acquisition of
Galaxy Pub Estate
January 2008
900
800
Acquisition of
Scottish & Newcastle
700
June 2008
Acquisition Eichhof
600
2006
11
2007
Source: HEINEKEN
beia = before exceptional items and amortisation
2008
2009
2010
2011
Agenda
HEINEKEN: Leading in Western Europe
1 Western Europe Beer Market
2 HEINEKEN in Western Europe
3 HEINEKEN’s Value Growth Strategy
12
Increased focus on driving toptop-line growth
1 Category
Management
13
Category Vision
Positive story of beer
Responsible
consumption
2 Brand Management
Global brand priorities
Winning local brands
Innovation
3 Channel Management
On-premise
“Push & Pull”
Wholesaler optimisation
Retailer partnerships
Reinvigorating beer through category leadership
…by creating change across all four key
stakeholders and achieving a Win-Win
“Beer is
exciting”
“Shopping
Hell”
“Shopping
Heaven”
CUSTOMER
Pay to Play
Permission
to Play
Gaining Share
Growing Share
Disproportionately
SHOPPER
“Beer is
boring”
COMPANY
CONSUMER
Category Vision is about driving long-term,
sustainable growth for HEINEKEN and our
customers…
ShareShare-gain
strategy
14
CategoryCategory-growth
strategy (with
disproportionate
share growth)
Communicating the positive story of beer
Local platforms to foster category growth
Italy:
Birra Moretti
and Food
platform
Digital
platform:
Aassociation of
Italian Chefs,
high cuisine
I LOVE BEER
France:
Tendances
Biere
New platform based
on naturalness of
beer, sensuality,
conviviality
(2011)
Ireland:
This is Beer
New digital platform
based on 3 natural
ingredients, sensuality,
beer and food
(2011/ 2012)
15
Motto: « Beer reconnects you to
nature »
Leading responsible consumption in the UK
Internal
2003 - 2006
Remove 3 litre &
extra free PET
Delist
High Strength
Ciders
Drinkaware founding
member
External
Addaction
Partnership
2007 - 2010
Getting Fit to Lead
16
Building Reputation
2011 - ...
Responsibility Deal –
Unit reduction &
Glassware pledges
Awarded BiTC
Platinum Plus
Leadership
[[[[[ SUNRISE COMMERCIAL ]]]]]]
17
Building winning portfolios with local brands
18
Italy: Birra Moretti
Spain: Cruzcampo
UK: Foster’s
Strongest brand equity
of Italian beers
Strong regional brand;
84% On-premise market
share in Andalusia
No.1 lager brand
in Off-premise
France:
France: Pelforth
Portugal: Sagres
Exceptional volume
growth: +9.7%*
# 1 national beer brand;
43% market share
* 2007-2011 CAGR
Heineken®: Global communication &
activation platforms supporting growth
Heineken®: Western Europe Region*
(2006-2011 CAGR volume growth %)
Digital
CONVERSATIONS
+1.9%
Beer Market
IPS
Heineken®
-1.3%
-1.6%
Beautiful DESIGN
ASPIRATIONAL
Communication
WORLDCLASS
Sponsorships
19
Source: Plato 2011 Report, HEINEKEN
* Beer Market and International Premium Segment (IPS) growth rates based on Plato definition
of West & Other Europe (excluding Germany, Greece, Austria, Turkey and Cyprus)
Desperados: Globalising a super premium brand
Desperados: A real success story in France
Replicating success in new markets
Established
Desperados value market share in France
Off-premise:
8.2
5.8
5.9
6.0
6.3
6.7
7.4
2005 2006 2007 2008 2009 2010 2011
20
Source: SymphonyIRI HMSM
New markets
HEINEKEN is the global leader in the
high growth cider category
Strong Cider Platform
21
Leading UK cider
position
New Strongbow
campaign
New flavour variants
Global rollroll-out of
Strongbow Gold
Global brand priority
New markets
Build category
Target new consumer
occasions
Building Innovation
Capabilities
Stassen acquisition:
In-house R&D expertise
Innovation pipeline
Innovation focused on value enhancing
propositions
Innovation rate* in Western Europe
(2011-2014F)
6%
Successful Innovation in Western Europe
5.5%
5%
4%
2.9%
Alcohol
Free
3%
Brand Line Extensions
Bulmers:
New cider
flavour
2%
1%
0%
2011
22
2014F
*Innovation rate calculated as revenues generated from innovations
introduced in the past 12 quarters divided by total revenue
4 litre PET keg
Heineken® Limited
Edition gift packs
[[[ COMMERCIAL FOSTERS GOLD ]]]]]]]
23
An evolving retail landscape is shaping
HEINEKEN’s channel strategy
Western Europe Channel development (2000-2020F):
Off
Premise
46%
57%
70%
On
Premise
54%
43%
30%
2000
24
Source: Plato, Canadean
2010
2020F
Brand building and strong sales execution
to drive value in OnOn-premise channel
From “Push” to “Push & Pull” approach
PUSH
Distribution orientated
Finance-led negotiations
Execution-based
Return on Net Assets
Price management
&
PULL
Brand-led approach
Right product for right outlet
Prioritised channels
Segmented customers
Non-visible to visible
+
Sales organisation designed to deliver:
Customer Value
Consumer Brand Experience
25
From the uninspiring...
26
...to a dynamic consumer experience
27
Wholesale secures outlet reach and product
availability in high value onon-premise channel
3k
23k
€2.5 billion wholesale
revenue in Western Europe
~170,000
170,000 customers
Provides access to
signficant on-premise
beer value chain
3k
10k
60k
33k
38k
# = number of HEINEKEN wholesale customers served
28
Source: HEINEKEN
Wholesaler optimisation
initiatives:
Product portfolio
management
Reducing cost-to-serve
Working capital
reductions
Access to outlet data
Winning in offoff-premise through strong
commercial execution & retailer partnerships
1
Must Stock Brands
2
Category Captainship
Example of
brand activation
at a Carrefour
store in Paris
HEINEKEN European Key
Retail beer volume growth
(2011 vs. 2010)
9.4%
3
7.3%
Joint Business Planning
3.2%
On- & OffPremise
29
Source: HEINEKEN
* Pan-European retailers
Off-Premise
International
Customers*
France: OffOff-premise leadership through
premiumness,
premiumness, innovation and consumer focus
Value market share: Hyper/Supermarkets (%)
40.7
37.4
36.8
36.1
∆ -8pt
∆ +5pt
32.5
34.9
32.9
17.8
16.5
12.3
9.9
2007
2008
HEINEKEN
2009
Carlsberg
2010
ABInBev
2011
Others
Heineken® brand value market share vs. main competitor brand
% Off-Premise
18.8
15.4
2007
Heineken®
30
17.3
16.6
2008
Main competitor brand
Source : HEINEKEN, SymphonyIRI HMSM 2011
18.5
16.7
2009
18.9
18.9
15.4
2010
14.1
2011
Summary
Western Europe is a large, highly profitable and resilient beer market
HEINEKEN benefits from strong leading positions in Western Europe
31
Region a significant contributor to group cost savings and cash
management improvements
Proven track record in delivering consistent profit growth in a
challenging environment
Top-line development to be prioritised, through leveraging leadership
in brands, innovation and in-market execution
Questions
Please
Paris | 20 June 2012
Heineken N.V.