We are HEINEKEN

We are
HEINEKEN
Company Presentation 2014
| Heineken NV | Heineken Holding NV
HEINEKEN: The leading independent global brewer
with excellent growth platforms
Second largest brewer in the world by revenue
A highly diversified emerging market footprint
Heineken®, the world’s leading international premium beer
 Heineken® available in over 180 countries
 Highest rated beer brand equity in the world1
Diverse product portfolio
 More than 250 international, regional, local and specialty
beers and ciders
Leading brewer and largest beverage distributor in Europe
A broad geographic footprint
 Excellent spread of profits and cash flow
2
1 ONEquity 2013
HEINEKEN through the years
A proud, independent global brewer
1864
1939
Gerard Adriaan
Heineken acquires
his first brewery
in Amsterdam,
Netherlands
HEINEKEN is
listed on the
Dutch Stock
Exchange
1865 –
1938
Import to Africa
and USA, expansion
in Western Europe
and entry into Asia
Pacific
3
2002 –
2007
2009
Expansion in
Central and
Eastern Europe
1940 –
2001
Expansion in
Africa, and
Americas
2008
Acquisition
of Scottish &
Newcastle
2010
The Heineken
Africa Foundation
is launched
2012
Acquisition of
FEMSA beer
business in
Mexico and Brazil
2009
Joint ownership of
India’s No. 1 brewer
United Breweries
Limited
2011
Acquisition of
five breweries
in Nigeria and
two in Ethiopia
Gained full
control of
Asia Pacific
Breweries
Diverse and balanced geographic footprint
Increasing exposure to developing markets
70+
250+
COUNTRIES
165
BREWERIES
57%
BRANDS
Group beer volume1
OF GROUP
195mhl
OPERATING
PROFIT (BEIA)
by region (2013)
85,000
GROUP BEER
FROM
DIRECT
VOLUME
DEVELOPING
EMPLOYEES
AME
14%
WE
22%
MARKETS
Americas
28%
CEE
25%
Asia Pac
11%
Group Operating profit (beia)2
by region (2013)
WE
26%
Operating Companies
AME
20%
Joint Venture
Export
Licences
CEE
10%
Americas
26%
Asia Pac
18%
4
1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates
2 Group operating profit (beia) is consolidated operating profit (beia) plus attributable share of operating profit (beia) from joint ventures
and associates. Excludes Head Office.
Strong track record of growth
Consolidated Revenue (beia) in €m
CAGR: +6.9 %
Consolidated beer volume in mhl
CAGR: +9.2%
2013
178
2012
172
2011
165
2010
146
2009
125
2,941
2012
2011
2010
2,666
17,123
16,133
14,701
2.75
2012
2011
2010
2,430
2010
*2010 and 2012 restated.
IAS19 revision negative impact on diluted EPS (beia): 2012 -€0,06; 2013 -€0,07
18,383
2013
2,456
1,967
19,203
Diluted EPS (beia)* in €
CAGR: +6.3 %
2011
2009
5
2012
2009
Consolidated operating profit (beia)* in €m
CAGR: +10.6%
2013
2013
2009
2.89
2.70
2.58
2.15
Vision, mission and values
We are
We value
We want
A proud, independent,
global brewer committed
to surprising and exciting
consumers everywhere.
A passion for quality,
enjoyment of life, respect
for people and respect
for our planet.
To win in all markets
with Heineken®, and with
a full brand portfolio in
markets where we choose.
Business priorities
6
1
2
3
4
5
6
Grow
Heineken®
Brand
Consumerinspired,
customeroriented,
brand-led
Capture the
opportunities
in emerging
markets
Leverage the
benefits of
HEINEKEN’s
global scale
Drive
personal
leadership
Embed and
integrate
sustainability
Heineken® brand: Truly global reach
Heineken® twice as large as nearest competitor brand in IPS*
Heineken® share of IPS1 (2013)
‘Open Your World’ global campaign
20%
10%
9%
5%
4%
3%
3%
2%
2%
1%
Strategic brand pillars:
Design
7
Engagement
Innovation
*IPS = International Premium Segment (volume sold outside home market)
1 IPS = International Premium Segment; based on Canadean and HEINEKEN data; reflects latest Canadean estimates
Communication
Other global brands driving value
Margin enhancing global brands
Global Brands Portfolio
Indicative price vs. Mainstream beer
(Index = 100)
8
Over 60% of group beer volume from developing
markets
2013 Developing markets split:
Group beer volume:
Americas
% of total Group
62%
49%
38%
51%
Group beer
volume
Group
revenue
57%
37%
Asia
Central &
Pacific
Eastern
17%
Africa
Middle
Europe
26%
43%
East
20%
Developing
9
1 Head office & eliminations excluded from ‘% of Group’ calculation
Group
operating
profit (beia)1
Developed
Drive personal leadership
Leverage Global Talent Pool

64 nationalities in senior management

Women represent 14% of senior
management

Foster an entrepreneurial and
accountability culture

New HEINEKEN Leadership model

200 nominated leaders completed
leadership development programmes
in 2013
10
Embed and integrate sustainability
PROTECTING WATER RESOURCES


REDUCING CO2 EMISSIONS
Reducing specific water

In the brewery by 40%
consumption by 25%

From fridges by 50%
Aiming for water compensation

From distribution by 20%
in water scarce and distressed
areas
SOURCING SUSTAINABLY


ADVOCATING RESPONSIBLE
Deliver 60% of raw materials
CONSUMPTION
in Africa via local sourcing

Aim for at least 50% of our main
raw materials supplied from
commitments

sustainable sources

Fully implement our supplier code
procedure
Delivering on industry
Making responsible consumption
aspirations through Heineken®

Build partnerships in each market
linked to responsible
consumption
11
Africa Middle East
Thirteen #1 and four #2 positions
Beer market growth drivers:
 Supportive demographics and economic growth
 6 of the top 10 fastest growing economies
globally are in Africa2
 Emerging, brand-conscious middle class
A well balanced portfolio with strong local and
regional brands and growth in international premium
Heineken®, the leading IPS* brand (CAGR of 7% in
past 5 years)
Strong market positions in large and growing
markets across the region
44
41
9
27mhl
14,900
BREWERIES
EXPORT
MARKETS
JV’S/
ASSOC.
GROUP
BEER
VOLUME 1
DIRECT
EMPLOYEES
Regional beer market dynamics:
Beer market
Growth CAGR % (2013-18)
Per Capita
Consumption
Litres (2013)
IPS* CAGR%
(2013-18)
Population CAGR %
(2013-18)
4.6%
10
6.5%
2.2%
Regional consolidated financial performance:
Beer volume
Revenue
Operating profit
(beia)
Operating profit
(beia) margin
23.3
2,554
607
23.8%
+4.8%
+9.7%
+7.9%
2013FY (mhl/€m)
Organic growth
CAGR 2009-2013
Key beer brands
47% of raw materials locally sourced with a target
to reach 60% by 2020
HEINEKEN Africa Foundation underpins a passion and
commitment to responsible growth in the region
12
Source: Canadean latest estimates
1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates
2 IMF, world economic outlook database
*IPS = International Premium Segment (volume outside home market)
Americas
Attractive growth potential
in a large profit pool
Americas region represents the largest global beer
profit pool
Operate under a range of business models
Aim is to win in key markets and drive value growth
Strongly leverage on global marketing expertise
20
38
4
55mhl
23,400
BREWERIES
EXPORT
MARKETS
JV’S/
ASSOC.
GROUP
BEER
VOLUME 1
DIRECT
EMPLOYEES
Regional beer market dynamics:
Beer market
Growth CAGR % (2013-18)
Per Capita
Consumption
Litres (2013)
IPS* CAGR%
(2013-18)
Population CAGR %
(2013-18)
1.7%
61
6.8%
0.9%
Regional consolidated financial performance:
Focus on premiumisation and innovation
Aim to capture opportunities in emerging markets
Mexico is the largest market for HEINEKEN in terms
of both volume and profitability
Dos Equis, one of the fastest growing import brands
in USA
Beer volume
Revenue
Operating profit
(beia)
Operating profit
(beia) margin
51.2
4,495
719
16.0%
+1.9%
+6.8%
+11.9%
2013FY (mhl/€m)
Organic growth
CAGR 2009-2013
Key beer brands
Heineken® brand in Brazil achieved 1mhl in 2012
(CAGR of 47% in past 5 years)
13
Source: Canadean latest estimates
1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates
*IPS = International Premium Segment (volume outside home market)
Asia Pacific
Growing, dynamic beer market
with increasing premiumisation
Beer market growth drivers:



Young and growing population
Aspirational consumers and a growing middle
class
Strong economic growth
A premium-led portfolio comprising
strong local mainstream brands
Heineken® brand volume of 6.1mhl in 2013; 22% of
Company’s Heineken® volume
Unparalleled opportunity in IPS:
 Heineken® and Tiger® brands represent 38% of
IPS*
 Heineken® surpassesed 1mhl in China in 2013
 Maximise international potential of the Tiger®
brand; 30% volume growth in 2013

14
24
6
4
23mhl
8,700
BREWERIES
EXPORT
MARKETS
JV’S/
ASSOC.
GROUP
BEER
VOLUME 1
DIRECT
EMPLOYEES
Regional beer market dynamics:
Beer market
Growth CAGR % (2013-18)
Per Capita
Consumption
Litres (2013)
IPS* CAGR%
(2013-18)
Population CAGR %
(2013-18)
3.5%
19
4.9%
0.9%
Regional consolidated financial performance:
Beer volume
Revenue
Operating profit
(beia)
Operating profit
(beia) margin
17.3
2,037
536
26.3%
+3.3%
+5.8%
+11.5%
2013FY (mhl/€m)
Organic growth
CAGR 2009-2013
Key beer brands
Capture potential of the developing and profitable
IPS in China and India
Source: Canadean latest estimates
1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates
*IPS = International Premium Segment (volume outside home market)
Central & Eastern Europe
Sustainable value growth focus
A large and diverse beer market with high per capita
consumption
A diverse product range and balanced portfolio of
markets
HEINEKEN has ten #1 and #2 positions
50
43
3
48mhl
17,700
BREWERIES
EXPORT
MARKETS
JV’S/
ASSOC.
GROUP
BEER
VOLUME 1
DIRECT
EMPLOYEES
Regional beer market dynamics:
Beer market
Growth CAGR % (2013-18)
Per Capita
Consumption
Litres (2013)
IPS* CAGR%
(2013-18)
Population CAGR %
(2013-18)
0%
68
2.3%
0.1%
Leading in innovation with the most complete
‘Radler’2 portfolio
Regional consolidated financial performance:
Strategic focus on revenue management and
2013FY (mhl/€m)
Organic growth
CAGR 2009-2013
long term value creation
Value market share gains across key markets
Beer volume
Revenue
Operating profit
(beia)
Operating profit
(beia) margin
44.3
3,097
290
9.4%
-1.1%
0%
-8.8%
Key beer brands
Strong commercial execution through leveraging on
sales and brand marketing capabilities
Heineken® brand offers an exciting growth
opportunity
15
Source: Canadean latest estimates
1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates
*IPS = International Premium Segment (volume outside home market)
2 Radler – mix of beer and natural juice, 2% ABV
Western Europe
Strong market positions
and cash generation
A large and resilient beer market, with a significant
profit pool
Strong leading positions across the region
Region has realised ~50% of HEINEKEN’s cost
savings2
Strong free operating cashflow generation
Focus on premiumisation, segmentation and
innovation
Leading in responsible consumption
Driving value in the on-premise channel through
innovation, strong local and global brand activation
26
17
0
42mhl
18,600
BREWERIES
EXPORT
MARKETS
JV’S/
ASSOC.
GROUP
BEER
VOLUME 1
DIRECT
EMPLOYEES
Regional beer market dynamics:
Beer market
Growth CAGR % (2013-18)
Per Capita
Consumption
Litres (2013)
IPS* CAGR%
(2013-18)
Population CAGR %
(2013-18)
-0.6%
52
0.5%
0.4%
Regional consolidated financial performance:
Beer volume
Revenue
Operating profit
(beia)
Operating profit
(beia) margin
42.2
7,456
853
11.4%
-2.4%
-1.6%
+1.4%
2013FY (mhl/€m)
Organic growth
CAGR 2009-2013
Key beer brands
Winning in the off-premise through strong
commercial execution and retailer partnerships
Proven track record in delivering consistent profit
growth
16
Source: Canadean latest estimates
1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates
*IPS = International Premium Segment (volume outside home market)
2 Fit2Fight (2006-2008) and TCM1 (2009-2011)
HEINEKEN shareholder structure
Heineken N.V. shares held by Heineken Holding N.V. equals
the number of shares issued by Heineken Holding N.V.
Holding companies
Greenfee B.V.
of Heineken family
88.67%
11.33%
L’Arche Green N.V.
51.558%
Heineken Holding N.V.
FEMSA
Free float
14.935%
33.507%
FEMSA
Free float
12.532%
37.463%
50.005%
Heineken N.V.
17
As at 1 February 2014
Sponsored Level 1 ADR Programmes
Heineken N.V.
Heineken Holding N.V.
Bloomberg ticker: HEINY
ISIN: US4230123014
Cusip: 423012301
Exchange: OTCQX
Ratio: 2 ADRs: 1 Ordinary Share
Bloomberg ticker: HKHHY
ISIN: US4230081014
Cusip: 423008101
Exchange: OTCQX
Ratio: 2 ADRs: 1 Ordinary Share
Depositary bank: Deutsche Bank Trust Company Americas
ADR broker helpline:
+1 212 250 9100 (New York)
+44 207 547 6500 (London)
E-mail: [email protected]
ADR website: www.adr.db.com
Depositary Bank’s local custodian: Deutsche Bank, Amsterdam
18
Contact Information
If you would like further information about HEINEKEN,
please visit our website at:
www.theHEINEKENcompany.com
HEINEKEN Registered Office:
Tweede Weteringplantsoen 21, 1017 ZD Amsterdam
P.O. Box 28, 1000 AA Amsterdam, The Netherlands
T: 31 (0) 20 523 9777
Investor enquiries:
T: +31 (0) 20 523 9590
or by email at: [email protected]
Media enquiries
T: +31 (0) 20 523 9355
Sustainable development:
T: 31 (0) 20 523 9777
19
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.
20