Heineken Nv · EURONEXT:HEIA
Heineken Nv — Heineken Financial Markets Conference 2016
25 slides from Heineken Nv's conference presentation, May 11, 2016
Slide 1: Transforming Supply Chain and Sustainability
HEINEKEN FINANCIAL MARKETS CONFERENCE 2016 HO CHI MINH CITY, VIETNAM Transforming Supply Chain and Sustainability Paul Bleijs Supply Chain Director, Vietnam Brewery Ltd Ho Chi Minh City, Vietnam | May 11-12, 2016 | Heineken NV
Slide 2: Agenda
Agenda Transforming Supply Chain and Sustainability Evolution of footprint Transforming to unlock value Driving world class performance Supporting HEINEKEN’s sustainability agenda Summary 1
Slide 3: Footprint started with Ho Chi Minh brewery 25 years ago
Footprint started with Ho Chi Minh brewery 25 years ago… 5.20 mhl License Agreement received in 1991 First Brew in 1993 4.20 Capacity increased by 15 times over 25 Years 2.80 2.30 1.50 0.35 1993 1997 2006 2009 2011 2015 2 Source: Company data
Slide 4: ...And expanded post the Foster's Vietnam acquisition in 2007
...And expanded post the Foster’s Vietnam acquisition in 2007 Acquired 3 breweries from Foster’s group (Da Nang, Quang Nam, Tien Giang) Da Nang Brewery Taking the total number of breweries to 4 Capacity at 3 acquired breweries has increased Quang Nam by c.5 times since 2007 Brewery Total sup
Slide 5: Agenda
Agenda Transforming Supply Chain and Sustainability Evolution of footprint Transforming to unlock value Driving world class performance Supporting HEINEKEN’s sustainability agenda Summary 4
Slide 6: Supply chain has evolved to unlock value
Supply chain has evolved to unlock value Before After Brewhouse Ho Chi Minh moved from 9 to 1 operator Mono site Multiple sites per shift Packaging Ho Chi Minh moved from High tech 4 to 1 maintenance Low tech operator per shift Providing technology Low skill Multi skilled and engineering suppo
Slide 7: Leading in quality
Leading in quality 2002 — Heineken Quality & Brewery Award 2004 — Tiger Quality Award & Brewery Award 2003 — Heineken Quality & Brewery Award 2006 — Tiger Quality Award 2006 — Heineken Quality & Brewery Award 2014 — Tiger Quality Award 2007 — Heineken Quality Award and S&D Award 2008 — Heineken Qual
Slide 8: Leading in new technology - brewery and brew house
Leading in new technology - brewery and brew house Before After 26 x 2,930 hl / iron tanks (old technology) 131 tanks in total, of which 48 x 5,600 hl / stainless steel tanks (new technology) 7 brews per day / 1,700 hl finished product per day 40 brews per day / 23,000 hl finished product per day 7
Slide 9: Leading in new technology - brewery and brew house
Leading in new technology - brewery and brew house Before After BOTTLING LINE BOTTLING LINE 24 Operators for 6 Operators for 40,000 bottles/ hour 50,000 bottles/ hour UTILITIES UTILITIES 2 Operators/ shift for 1 Operator/ shift for 1 million hl / year 5.2 million hl / year KEGGING LINE KEGGING LINE
Slide 10: Using Total Productive Management (TPM) to improve performance and reduce costs
Using Total Productive Management (TPM) to improve performance and reduce costs Before After ‘Safety Poka Yoke’ Avoiding human error Forklift related accidents cause a significant proportion of workplace fatalities all over the world. Tipping over of equipment contributes to 42% of these accidents (
Slide 11: TPM: smart solutions delivering improvements on the bottling lines
TPM: smart solutions delivering improvements on the bottling lines Handling Improving set up for Easier to check Cleaning process improvement different bottle sizes functioning more efficient Change: New handle Change: Fixed Change: Added Change: More visual settings on bottling lines, stand
Slide 12: TPM: Empowering at shop floor level to drive efficiencies
TPM: Empowering at shop floor level to drive efficiencies Developing employees at shop floor level Top level led Shop floor led Extensive compulsory training and follow up with required test to ensure employees meet required level Empowering and enabling employees on the shop floor to take mor
Slide 13: Agenda
Agenda Transforming Supply Chain and Sustainability Evolution of footprint Transforming to unlock value Driving world class performance Supporting HEINEKEN’s sustainability agenda Summary 12
Slide 14: Leading in performance – Ho Chi Minh brewery
Leading in performance – Ho Chi Minh brewery Brewery productivity Rotation time per year (HL/FTE) (Number of trips of returnable bottles) Growth rate Growth rate +50% +94% FTE productivity improvements generated average cost Increase in average number of returnable bottle trips saving of €0.3m per a
Slide 15: Agenda
Agenda Transforming Supply Chain and Sustainability Evolution of footprint Transforming to unlock value Driving world class performance Supporting HEINEKEN’s sustainability agenda Summary 14
Slide 16: Sustainability - Brew a Better Vietnam
Sustainability - Brew a Better Vietnam Part of HEINEKEN global strategy “Brewing a Better World” PROTECTING REDUCING SOURCING WATER RESOURCES CO2 EMISSIONS SUSTAINABLY Reducing water consumption Reducing emissions in the Implementing supplier code procedure Aiming for water brewery, fridges
Slide 17: Protecting water resources - Ho Chi Minh example
Protecting water resources - Ho Chi Minh example Objective: Using the water more effectively to preserve water resources How: Launch of water saving program (estimated cost saving of €0.7m Water consumption (hl/hl) in 5 years) Why: Decline rate To communicate our role and importance of this to soc
Slide 18: Reducing energy (CO2) emissions
Reducing energy (CO2) emissions Moving from Fossil Fuel to Biomass Use of energy for heating and power throughout Reducing energy (CO2) emission our production process – from Brewing to Packaging Da Nang brewery Kg/HL Reducing emissions by implementing good practice on biomass 9 at each stage, r
Slide 19: Addressing sustainability through other categories at brewery
Addressing sustainability through other categories at Ho Chi Minh brewery ELECTRICITY STEAM BIOGAS (KWH/HL) (MJ/HL) (MJ/HL) (Cost saving of €0.5m in 2015) Decline rate -7% Decline rate -31% Growth rate +806% 18 Source: Company data
Slide 20: Sourcing sustainably
Sourcing sustainably Raw materials: Supplier Code 24% of the raw materials 75% of suppliers have signed, thereby locally sourced (rice) committing to: Business ethics (business integrity) Packaging locally sourced: Human rights Cans: 100% Bottles: 100% Environmental regulation (complianc
Slide 21: Advocating responsible consumption
Advocating responsible consumption Two partnerships: provincial Traffic Safety Committees and Ho Chi Minh City universities Creating awareness among Enjoy Responsibly Day for employees and employees university students Drink responsibly commercial Involving students to promote the message Drin
Slide 22: Putting Safety First - promoting Health and Safety
Putting Safety First - promoting Health and Safety Annual event to promote ‘Safety First’ in line with the focus at HEINEKEN group level Theme: come home safe every day All employees participate in the event Objective: To raise awereness and knowledge on safety How: All management team par
Slide 23: Growing with communities
Growing with communities Examples: Community Water, Warm Spring and Dream Moon Community water “1 minute less for million smiles”: 2,500 volunteers Tet Charity “Warm Spring”: helped 2,800 disadvantaged households in 2015 Mid Autumn festival “Dream Moon”: supported 2,900 children in need with c
Slide 24: Agenda
Agenda Supply Chain Overview Evolution of footprint Transforming to unlock value Driving world class performance Supporting HEINEKEN’s sustainability agenda Summary 23
Slide 25: Summary
Summary We continue to leverage our expanding footprint for further optimisation There is a continued focus on efficiency and reducing costs The footprint is delivering leading performance within the HEINEKEN group Sustainability is a key strategic focus with tangible progress to date on key
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