Heineken Nv · EURONEXT:HEIA
Heineken Nv — H1 2014 Earnings Presentation
27 slides from Heineken Nv's earnings presentation, Aug 20, 2014
Slide 1: 2014HY Earnings Release HEINEKEN N.V.
2014HY EARNINGS RELEASE HEINEKEN N.V. Strong Organic Revenue and Profit Growth Jean-François van Boxmeer CHAIRMAN OF THE EXECUTIVE BOARD/CEO AMSTERDAM, 20 AUGUST 2014 1
Slide 2: 2014HY Key Highlights
2014HY Key Highlights Strong Organic Revenue & Profit Growth Group revenue +4.6%, organically Heineken® volume +6.6%: strong performance in key markets Innovation rate accelerated to 7.4% Market share gains in key markets: Nigeria, Vietnam, France, The Netherlands, USA, Spain and Brazil
Slide 3: Strong Growth Across Most Regions
Strong Growth Across Most Regions 2014HY Organic growth % CENTRAL & AFRICA WESTERN AMERICAS ASIA PACIFIC EASTERN HEINEKEN NV MIDDLE EAST EUROPE EUROPE Consolidated revenue 5.7 8.3 3.5 -2.3 5.1 4.8 Consolidated operating profit 15 26 2.0 -7.3 8.8 14 (beia) Group beer volume 8.1 4.7 2.8 -4.2 6.5 3.1 3
Slide 4: Balanced Market Growth
Balanced Market Growth Developed Returning to Top-Line Growth; Developing Driving Profit Growth 2014HY: Organic Growth % Developed/ Developing Market Split 16% 63% 50% 60% 5.3% 4.2% 3.8% 3.4% 2.4% 37% 50% 40% Group beer volume Group revenue Group operating Group beer Group revenue Group profit (beia
Slide 5: Improved Top-line Growth Momentum
Improved Top-line Growth Momentum Group Beer Volume Group Revenue Organic Growth (%) Organic Growth (%) 4.6% 3.1% 0.8% -2.0% -0.8% -3.4% 1H13 2H13 1H14 1H13 2H13 1H14 5
Slide 6: Heineken: Back To Growth
Heineken : Back To Growth ® Heineken® volume in premium segment +6.6% at 2014HY Heineken® premium Strong volume growth in key markets volume growth rates (%) Launch of “Cities of the World” fully integrated campaign in 6.6% May 2014 New “Cities of the World” Campaign -1.0% -2.7% 1H13 2H13 1H14
Slide 7: Strong Global Brands Performance
Strong Global Brands Performance Other Global Brands Volume Up Double Digits In 2014HY Global Brands Driving Top-Line Super premium Desperados Affligem Heineken® Premium Sol Strongbow Accessible Premium Mainstream 7
Slide 8: Accelerated Innovation Rate
Accelerated Innovation Rate Driving €682 million of Revenues Innovation rate1 7.4% 2020 Target: 6.0% 5.9% 5.3% 4.1% New brand launches 3.0% 2010 2011 2012 2013 2014HY Local brand launches and new SKUs Global brand launches THE SUB® 1 From 1 January 2013, the innovation rate is calculated as revenues
Slide 9: TCM2 Cost Savings Delivered Early, In-Full
TCM2 Cost Savings Delivered Early, In-Full Ongoing cost savings expected to contribute to future margin expansion Completion of TCM2 programme Committed to driving further cost savings: (2012-2014HY): €637 million TCM2 Functional Split Ongoing productivity improvements in Supply Chain Support 18%
Slide 10: 2014 Full Year Outlook
2014 Full Year Outlook1 Expect Healthy Top and Bottom Line Growth For The Full Year Expect continued positive volume development in 2014H2 with an underlying growth rate slightly below 2014H1 Revenue per hectolitre growth in 2014H2 to moderate versus 2014H1 primarily due to a negative country mi
Slide 11: 2014HY Earnings Release HEINEKEN N.V.
2014HY EARNINGS RELEASE HEINEKEN N.V. René Hooft Graafland MEMBER OF THE EXECUTIVE BOARD/CFO AMSTERDAM, 20 AUGUST 2014 11
Slide 12: Financial Overview
Financial Overview Total Change Organic Mhl/€m 2014HY 2013HY (%) Change (%) Group revenue 10,196 10,339 -1.4 4.6 Group revenue/hl (€) 90 93 -3.1 1.5 Group operating profit (beia) 1,560 1,448 7.7 13 Group operating profit (beia) margin 15.3% 14.0% +130bps Consolidated Revenue 9,274 9,354 -0.9 4.8 Con
Slide 13: Group Revenue Organic Growth +4.6%
Group Revenue Organic Growth +4.6% Group: organic +4.6% €m 10,339 10,196 985 922 +1.8% +3.0% -1.6% -4.0% 9,354 9,274 2013HY Revenue Consolidation impact Currency translation Total cons. volume Consol. rev/hl 2014HY Revenue Consolidated Attributable share of joint ventures & associates 13
Slide 14: Group Operating Profit (Beia) OG +13%
Group Operating Profit (Beia) OG +13% Group: organic +13% €m 1,560 1,448 +14% 106 121 -0.5% -4.1% 1,454 1,327 2013HY Operating profit Consolidation impact Currency translation Organic growth 2014HY Operating profit (beia) (beia) Consolidated Attributable share of joint ventures & associates 14
Slide 15: Profit Growth Weighted Towards 2014H1
Profit Growth Weighted Towards 2014H1 Consolidated operating profit (beia) organic growth expected to be weighted towards 2014H1, primarily due to: 2014H1 benefited from increased consumption during the football World Cup, favourable weather and excise-related destocking in France A stronger c
Slide 16: Group Margin Expansion of 130bps in 2014HY
Group Margin Expansion of 130bps in 2014HY Strong Profit Growth in Africa Middle East and Americas Regions Group Operating Profit (beia) Margin (%) Margin expansion +170BPS +200BPS 0BPS +20BPS +10BPS +130BPS 30% 25% Group operating profit (beia) margin 20% 15% 10% 5% 0% Africa Middle East Americas A
Slide 17: Diluted EPS (beia) €1.34, +14%
Diluted EPS (beia) €1.34, +14% +14% +€0.23 1.34 1.18 -€0.01 -€0.06 2013HY Diluted EPS (beia) Consolidation impact Currency translation Organic growth 2014HY Diluted EPS (beia) Consolidated Attributable share of joint ventures & associates 17
Slide 18: Cashflow Development
Cashflow Development Working Capital Benefit To Normalise For 2014FY 2014HY 2013HY vs. LY Cash flow from operations 1,859 1,841 18 (before change in working capital) Change in working capital -296 -656 360 Capital expenditure* -549 -536 -13 Cashflow used in operational investing activities -3 -11 8
Slide 19: Summary
Summary A solid underlying operating performance in 2014HY Sustained investments in brands, strengthened execution and innovation driving market share gains Completion of TCM2 cost saving programme, earlier than scheduled Revenue management and cost initiatives to underpin medium-term margin
Slide 20: Appendix
2014HY EARNINGS RELEASE HEINEKEN N.V. Appendix 20
Slide 21: Quarterly Performance Overview
Quarterly Performance Overview Group organic growth % 2Q14: 2014Q1 2014Q2 Strong growth in Africa Middle East, Americas, Africa Middle East 8.7 7.5 Asia Pacific and Western Europe regions Americas 2.6 6.5 Volume benefited from World Cup football and Asia Pacific 0.0 5.8 Easter shift against soft
Slide 22: Africa Middle East
Africa Middle East Strong Growth Momentum Consolidated Group Mhl/€m Total Organic Total 2014HY Change (%) Change (%) 2014HY Change (%) Organic Change (%) Revenue 1,293 1.2 5.7 1,496 0.3 Revenue/hl (in €) 83 -6.2 -2.1 82 -6.3 Operating profit (beia) 338 11 15 358 8.3 Operating profit (beia) margin 26
Slide 23: Americas
Americas Growth led by Key Markets: Mexico, Brazil and USA Consolidated Group Mhl/€m Total Organic Total 2014HY Change (%) Change (%) 2014HY Change (%) Organic Change (%) Revenue 2,213 0.2 8.3 2,578 0.1 Revenue/hl (in €) 84 -4.6 3.6 86 -4.8 Operating profit (beia) 375 18 26 427 14 Operating profit (
Slide 24: Asia Pacific
Asia Pacific Improving Trading Conditions Across Key Markets Consolidated Group Mhl/€m Total Organic Total 2014HY Change (%) Change (%) 2014HY Change (%) Organic Change (%) Revenue 932 -4.8 3.5 1,112 -8.7 Revenue/hl (in €) 109 -7.5 0.9 96 -11 Operating profit (beia) 235 -6.3 2.0 259 -8.8 Operating p
Slide 25: Central & Eastern Europe
Central & Eastern Europe Continued Challenging Trading Environment Consolidated Group Mhl/€m Total Organic Total 2014HY Change (%) Change (%) 2014HY Change (%) Organic Change (%) Revenue 1,427 -6.5 -2.3 1,601 -5.4 Revenue/hl (in €) 65 -1.5 2.7 66 -1.1 Operating profit (beia) 115 -7.1 -7.3 126 -3.7 O
Slide 26: Western Europe
Western Europe Strong Execution & Higher Investments Driving Market Share Gains Consolidated & Group Mhl/€m Total Organic 2014HY Change (%) Change (%) Revenue 3,650 1.5 5.1 Revenue/hl (in €) 127 0.7 -0.6 Operating profit (beia) 372 2.8 8.8 Operating profit (beia) margin 10.2% +10bps Total volume 28.
Slide 27: US Dollar Hedging
US Dollar Hedging Position Impact Net inflow Hedged Year In USD mln Part** Hedged Rate*** Year Net Profit 2011A 703 703 1.35 2011A 2 2012A 696 696 1.36 2012A -4 2013A 556 556 1.31 2013A 11 2014F 555 520 1.31 2014F* -1 2015F 578 372 1.36 2015F* -9 * Impact on open positions calculated by comparing sp