Heineken Nv · EURONEXT:HEIA
Heineken Nv — H1 2013 Earnings Presentation
27 slides from Heineken Nv's earnings presentation, Aug 21, 2013
Slide 1: Half year 2013 results Heineken N.V.
Half year 2013 results Heineken N.V. Jean François van Boxmeer Chairman of the Executive Board/ CEO 21 August l 2013 | Heineken NV
Slide 2: Disclaimer
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 forwar
Slide 3: 2013H1 Group highlights
2013H1 Group highlights Resilient performance in challenging conditions Challenging trading conditions resulted in a 3% organic decline in group beer volume Group revenue per hectolitre organic growth +2% Strong APB performance Group operating profit (beia) in developing markets up 7% organi
Slide 4: Regional review
Regional review Full consolidation of APB driving total Group performance TOTAL GROWTH % Africa Americas Asia Central Western Group ORGANIC Middle Pacific & Europe Total GROWTH % 2013HY East Eastern Europe Group revenue -1 +3 +83 -4 -6 +3 -1 Group beer volume -2 -3 +33 -5 -8 -1 -3 Group operating pr
Slide 5: APB: Strong, consistent growth
APB: Strong, consistent growth Integration of APB successfully completed APB: 2013HY underlying organic growth Acceleration in Tiger brand growth Volume organic growth % ~20% 40% 36% 27% 10% 18% 10% 7% 8% Volume Operating profit 2010H1 2010H2 2011H1 2011H2 2012H1 2012H2 2013H1 (beia) 5
Slide 6: Over 60% of Group beer volume from developing markets
Over 60% of Group beer volume from developing markets Profit from developing markets grew 7% organically in 2013HY 2013HY Developing markets split: % of total Group Group beer volume: Latin America & 63% 50% Caribbean 49% 35% Asia Pacific Europe 15% Africa 28% 51% 50% 37% Middle East 22% Group beer
Slide 7: Leveraging global innovations locally
Leveraging global innovations locally Strong innovation pipeline 2013HY: Radler launched in 12 markets Innovation rate1 Netherlands Italy France Belgium Switzerland United Kingdom 6.0% 2020 Greece Portugal La Reunion Target Finland DRC Spain 5.3% 4.1% 3.0% Bulmers: UK Cider in Mexico & USA 2010 2011
Slide 8: Heineken®: Enhancing brand equity
Heineken®: Enhancing brand equity Global star bottle now available in all markets Volume declined by 3%; stable performance Heineken® in premium segment 2013H1 Growth % excluding 1 less selling day and destocking Africa Central & in France/ USA Middle Asia Eastern Western East Americas Pacific Eur
Slide 9: TCM2: Target raised
TCM2: Target raised Targeted cost savings of €625 million from 2012-14 TMC2 Functional Split: 2013H1 TCM2 in 2013H1: Support Realised pre-tax cost savings of 13% €139 million Wholesale Cumulative pre-tax savings 6% Supply of €335 million Commerce Chain 22% 59% Additional €100 million cost saving
Slide 10: GBS driving cost efficiencies
GBS driving cost efficiencies Global Business Services (GBS): Key enabler of TCM2 cost savings Upfront cumulative ‘set-up’ costs of €133 million through to 2013H1 Upfront GBS costs reported as ordinary operating expenses HEINEKEN Global Shared Services (HGSS) centre 2012: Successful transiti
Slide 11: 2013 Full Year Outlook
2013 Full Year Outlook HEINEKEN expects: No material change to underlying trading conditions across the majority of its markets Marketing and selling expenses to remain broadly stable in 2013 (2012: 12.2%) Input cost prices to increase slightly (excluding currency impact) Targeted 3-year TCM
Slide 12: Prioritised actions to deliver results
Prioritised actions to deliver results 1 Sustained brand investment 2 Strong innovation pipeline 3 Revenue growth management 4 Leverage global scale for efficiencies 5 Capex focused on developing markets 12
Slide 13: Half year 2013 results Heineken N.V.
Half year 2013 results Heineken N.V. René Hooft Graafland Member of the Executive Board/ CFO 21 August l 2013 | Heineken NV
Slide 14: Operational overview
Operational overview Total Change Organic Mhl/€m 2013H1 2012H1 (%) Change (%) Group revenue 10,375 10,070 3 -1 Group revenue/hl (€) 94 90 4 2 Group operating profit 1,448 1,378 5 - Group operating profit (beia) margin 14.0% 13.7% +30bps Consolidated Revenue 9,354 8,778 7 -3 Consolidated operating pr
Slide 15: Consolidation impact
15 2012H1 Group revenue 10,070 Attributable share of JV's & Assoc 2012H1 Cons. revenue 1,292 8,778 Consolidation impact +10% Group revenue +3% Currency translation 0% Full consolidation of APB +€871 million in €m Total cons. volume -5% Revenue Group: -1% organic Consol. rev/hl 2% 2013H1 Cons. revenu
Slide 16: Consolidation impact
16 2012H1 Group op. profit 1,378 Attributable share of JV's & Assoc 228 2012H1 Cons. op. profit 1,150 Organically, in line with prior year Consolidation impact +17% Currency translation 0% in €m Group: flat organic Organic -2% Group operating profit (beia) +5% Operating profit (beia) 2013H1 Cons. op
Slide 17: Stable net profit (beia)
Stable net profit (beia) Net profit (beia) in €m 688 +6 +3 679 +2 -20 2012H1 Revised IAS19 Other Currency Organic 2013H1 impact* consolidation translation impact 2012 restated for IAS 19 17 *In 2013, the IAS19 restatement is treated as a consolidation change
Slide 18: Cashflow development
Cashflow development Higher investment in developing markets 2013H1 2012H1 vs. LY Cash flow from operations 1,841 1,629 212 (before change in working capital) Change in working capital -656 -563 -93 Capital expenditure* -536 -413 -124 Cashflow used in operational investing -11 4 -15 activities (excl
Slide 19: Summary
Summary 1 Strong focus on revenue management 2 €100 million additional TCM2 savings 3 Strong underlying APB performance 4 50% group operating profit from developing markets 5 Maintaining financial flexibility 19
Slide 20: Question & Answer
Question & Answer Question Answer Question & Answer & Answer Question & Answer 21 August 2013 | Heineken NV
Slide 21: Impact of revised IAS19 on financials
Impact of revised IAS19 on financials FY 2012 F I N A N C I AL 2012 FY 2013 Impact1 (€ million) IMPACT RESTATED (€ million) EBIT (beia) +6 2,918 EBIT (beia) -47 Consol. operating profit (beia) +6 2,666 Consol. operating profit (beia) -47 ‘Other Net Finance Costs’ -51 ‘Other Net Finance Costs’ -6 Tax
Slide 22: Africa Middle East
Africa Middle East Inflationary pressure constraining consumer spending in key markets CONSOLIDATED GROUP Total Organic Total Organic Mhl/€m 2013H1 Change (%) Change (%) 2013H1 Change (%) Change (%) Revenue 1,278 -1 2 1,523 -1 Revenue/hl (in €) 88 1 4 91 1 Operating profit (beia) 305 -4 -1 331 -3 Op
Slide 23: Americas
Americas Premiumisation, segmentation and innovation supporting top line growth CONSOLIDATED GROUP Total Organic Total Organic Mhl/€m 2013H1 Change (%) Change (%) 2013H1 Change (%) Change (%) Revenue 2,208 2 1 2,575 3 Revenue/hl (in €) 88 5 3 90 5 Operating profit (beia) 319 6 3 375 7 Operating prof
Slide 24: Asia Pacific
Asia Pacific Strong underlying APB performance: +10% volume and ~20% profit growth CONSOLIDATED GROUP Total Organic Total Organic Mhl/€m 2013H1 Change (%) Change (%) 2013H1 Change (%) Change (%) Revenue 979 >100 -3 1,223 83 Revenue/hl (in €) 118 -33 -4 109 35 Operating profit (beia) 251 >100 -12 284
Slide 25: Central & Eastern Europe
Central & Eastern Europe Value growth strategy showing good progress CONSOLIDATED GROUP Total Organic Total Organic Mhl/€m 2013H1 Change (%) Change (%) 2013H1 Change (%) Change (%) Revenue 1,527 -4 -1 1,692 -4 Revenue/hl (in €) 66 2 4 67 2 Operating profit (beia) 124 14 13 131 10 Operating profit (b
Slide 26: Western Europe
Western Europe Continued challenging trading environment CONSOLIDATED GROUP Total Organic Total Organic Mhl/€m 2013H1 Change (%) Change (%) 2013H1 Change (%) Change (%) Revenue 3,595 -6 -5 3,595 -6 Revenue/hl (in €) 126 2 3 126 2 Operating profit (beia) 362 -13 -9 362 -13 Operating profit (beia) mar
Slide 27: US Dollar Hedging
US Dollar Hedging POSITION IMPACT Net inflow Hedged Hedged Year In USD mln Part** Rate*** Year Net Profit 2010A 853 853 1.35 2010A 18 2011A 703 703 1.35 2011A 2 2012A 696 696 1.36 2012A -4 2013F 555 526 1.31 2013F* 11 2014F 584 400 1.30 2014F* 0 * Impact on open positions calculated by comparing spo