Heineken NV · EURONEXT:HEIA
Heineken NV — Heineken Financial Markets Conference 2011
24 slides from Heineken NV's conference presentation, Dec 8, 2011
Slide 1: Heineken-APB China: Capturing the significant growth potential in premium beer
Heineken-APB China: Capturing the significant growth potential in premium beer Malcolm Tan Regional Director, China Singapore | 8 December 2011
Slide 2: Agenda
Agenda Heineken-APB China: Capturing the significant growth potential in premium 1 Overview of the international premium beer segment in China 2 Future growth drivers of premium beer 3 Heineken-APB China 2
Slide 3: China: The world's largest beer market
China: The world’s largest beer market Beer volume share by market: 2010 World’s largest beer market at 466 mhl in 2010 BrazilGermany 6% 5% Russia China accounts for 25% of the world’s 5% Rest of the beer volume USA World 13% 46% Fragmented beer market with China top 4 brewers accounting for 5
Slide 4: Chinese beer market has experienced consistently high volume growth
Chinese beer market has experienced consistently high volume growth Chinese beer market has grown three-fold since 1995, at a CAGR of 7.5% Market growth rate has accelerated since 2005, to a CAGR of 8.9% Growth driven by strong GDP growth, modest population growth and a rise in per capita cons
Slide 5: International premium beer is a small but increasingly attractive segment in China
International premium beer is a small but increasingly attractive segment in China Premium and Affordable Premium segments make up the IPS in China IPS has grown by nearly 25 times since 1995 IPS represented around 1.5% of the total beer market in China at the end of 2010 IPS segment forecas
Slide 6: IPS growth has accelerated over the past 5 years
IPS growth has accelerated over the past 5 years Evolution of beer market segments in China: 2000-2010 International Premium Segment (IPS) = Premium + Affordable Premium IPS has grown at a CAGR of 12.4% over the past 5 years: Premium +10% CAGR Affordable Premium +13.9% CAGR Heineken® price premi
Slide 7: IPS volume concentrated in South China
IPS volume concentrated in South China China IPS volume by province Top 3 Chinese provinces for IPS (in volume terms): 1 Guangdong Heilongjiang 2 Shanghai Jilin 3 Fujian Xinjiang Inner Mongolia Beijing Liaoning Coastal regions remain the Gansu Shanxi Tianjin largest volume drivers Ningxia Hebei Shan
Slide 8: Agenda
Agenda Heineken-APB China: Capturing the significant growth potential in premium 1 Overview of the international premium beer segment in China 2 Future growth drivers of premium beer 3 Heineken-APB China 8
Slide 9: A growing middle class will support demand for premium beer
A growing middle class will support demand for premium beer Middle class in China is projected to expand very rapidly over the next 15 years Will generate a significant pool of consumers with an increased propensity to spend on premium brands 9 Source: National Bureau of Statistics of China, EIU
Slide 10: Urbanisation expected to provide access to a larger consumer base in China
Urbanisation expected to provide access to a larger consumer base in China Growing urbanization will enlarge the consumer base for premium beer Growing demand in on-premise entertainment channels Provides increased consumer and outlet reach opportunities 10
Slide 11: A changing retail landscape expected to drive on-premise consumption
A changing retail landscape expected to drive on-premise consumption On-premise channel expected to outpace off-premise: Beer is increasingly seen as a lifestyle enjoyment product On-premise prices are on average 65% higher than off-premise prices Development of various entertainment formats
Slide 12: Chinese consumers are showing a growing appeal to international brands
Chinese consumers are showing a growing appeal to international brands Chinese consumers are very receptive to global media, foreign ideas and international trends/fashion: Increasing popularity of the internet Development of Groupon, Twitter, Facebook equivalents in China Strong preference for
Slide 13: Rapid growth projected for international premium beer in China
Rapid growth projected for international premium beer in China Chinese beer market expected to grow at a CAGR of 4.3% over China beer segment growth: 2011-2020 CAGR the next 10 years Premium 14.4% IPS forecast to grow at a CAGR of 11.8% through to 2020, Affordable Premium 10.0% reaching 21mhl by
Slide 14: Agenda
Agenda Heineken-APB China: Capturing the significant growth potential in premium 1 Overview of the international premium beer segment in China 2 Future growth drivers of premium beer 3 Heineken-APB China 14
Slide 15: Organisational Chart
Organisational Chart Singapore Heineken-APB (China) Holdings [HAPBH] 100% China Regional Headquarters (RHQ) Heineken-APB (China) Management services [HAPBCMC] 100% 100% 100% 100% Hainan Guangzhou Heineken Heineken-APB Asia Pacific Asia Pacific Trading (Shanghai) Brewery Brewery (Shanghai) [HAPBS] [H
Slide 16: Heineken-APB China's existing brewery and regional structure
Heineken-APB China’s existing brewery and regional structure North East West South West South Hainan East 16
Slide 17: Capacity expansion plans to address increased consumer demand
Capacity expansion plans to address increased consumer demand Guangzhou Hainan Commissioned in 2011 Commissioned in 1997 1mhl capacity today 1.3mhl capacity today Expanding capacity to 1.5mhl Expanding capacity to 1.6mhl in April 2012 in April 2012 17
Slide 18: A premium portfolio targeting varying price points and consumer tastes
A premium portfolio targeting varying price points and consumer tastes Premium portfolio Lager Non-Lager Super Affordable Dark Beer Premium Premium Mainstream Specialties Cider Discount 18
Slide 19: Heineken-APB China strategy
Heineken-APB China strategy Vision: To be a leading international premium brewer in China Premium segment National presence Premium quality and leadership focus led with focus on key product integrity by Heineken® regions to capture & Tiger value in high growth IPS markets 19
Slide 20: Leveraging our leadership position in Hainan to exploit the IPS opportunity
Leveraging our leadership position in Hainan to exploit the IPS opportunity Market leadership with a full portfolio catering to the full spectrum of the market. Distribution strength enables us to build IPS category in an otherwise mainstream market IPS category has doubled in size in the last
Slide 21: Commercial initiatives supporting Heineken brand building efforts
Commercial initiatives supporting Heineken® brand building efforts Sustained brand building through national & regional advertising Utilising innovation to delight both consumers and trade Leveraging on sponsorship of international events including Shanghai ATP, UEFA Champions League and Rugby
Slide 22: Continually strengthening our Route-to-Market capability in a vast geographical market
Continually strengthening our Route-to-Market capability in a vast geographical market Off/On Outlets (>25,000) Key Account (Modern trade) Sub-Distributors/ Wholesalers(>2500) Distributors (>500) Beer Exports 6 Business Regions 2 Breweries Guangzhou Hainan 22
Slide 23: Summary
Summary Clear strategic focus in China on achieving leadership in highly profitable premium beer segment A rapidly growing middle class and urbanisation will support increased consumer demand for premium beer in China IPS expected to significantly outpace overall beer market growth over next 1
Slide 24: Questions please
Questions please Singapore | 8 December 2011
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