Heineken Nv · EURONEXT:HEIA

Heineken Nv — Investor Presentation (June 2013)

43 slides from Heineken Nv's investor presentation, June 2013

  1. Slide 1: Investor Presentation 2013

    Investor Presentation 2013 June 2013 | Heineken NV | Heineken Holding NV

  2. 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

  3. Slide 3: HEINEKEN's Profile and Business Priorities

    HEINEKEN’s Profile and Business Priorities June 2013 | Heineken NV | Heineken Holding NV

  4. Slide 4: HEINEKEN: A leading global brewer with excellent growth platforms

    HEINEKEN: A leading global brewer with excellent growth platforms Second largest brewer in the world by revenue1 A highly diversified emerging market footprint Heineken®, the world’s leading international premium beer  Heineken® available in 178 countries  Highest beer brand equity in the world2 D

  5. Slide 5: A truly global footprint

    A truly global footprint Consolidated beer volume1 by region (2012) AP 9% WE A & ME 23% 13% CEE AM 26% 29% EBIT (beia)1 by region (2012) AP 16% WE 30% Operating Companies A & ME 20% Joint Venture Export CEE 11% Licences AM 23% EBIT (beia) includes share of the net profit of joint ventures and associ

  6. Slide 6: Strong track record of growth

    Strong track record of growth Consolidated beer volume in mhl Revenue in €m CAGR: +8.1% CAGR: +6.4 % 2012 172 2012 18,383 2011 165 2011 17,123 2010 146 2010 16,133 2009 125 2009 14,701 2008 126 2008 14,319 EBIT(beia)* in €m Diluted EPS (beia)* in € CAGR: +10.9% CAGR: +8.7 % 2012 2,918 2012 2.89 2011

  7. Slide 7: Investment focused in high growth markets

    Investment focused in high growth markets Capital Expenditure as a % of Revenue 2008-12: cumulative over (€ million) €4 billion capital investment 2012: 20.000 11%  70% of total investment 18.000 10.0% 10% in emerging markets 9%  Main investments: 16.000 8.2% 7.9%  Returnable and new 7.7% 8% 14.0

  8. Slide 8: Focus on strong cash flow generation

    Focus on strong cash flow generation Free Operating Cash Flow Long Term Gross Debt Maturity Profile1 (€million) (€million) 2.500 6.000 5.000 5,662 2.000 4.000 1.500 3.000 1.000 2.000 1,822 864* 1,123 1,157 1,045 500 1.000 1161 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 >2018 * Remain

  9. Slide 9: Delivering against our business priorities

    Delivering against our business priorities 1 2 3 4 5 6 Grow Consumer- Capture the Leverage the Drive Embed and Heineken® inspired, opportunities benefits of personal integrate Brand customer- in emerging HEINEKEN’s leadership sustainability oriented, markets global scale brand-led Example of key ini

  10. Slide 10: Grow the Heineken® brand

    1 | Grow the Heineken® brand Heineken®: Celebrating 140 years in 2013 Heineken® outperforms IPS IPS development: 2011F-2020F (Volume Growth, CAGR 2005-2012F) CAGR 198mhl 5.4% CAGR 4.7% AFRICA & ME 4.3% 7.1% 3.0% ASIA PACIFIC 6.9% 136mhl Beer Market IPS Heineken® AFRICA & ME ASIA PACIFIC Heineken® sh

  11. Slide 11: Heineken® global activation

    1 | Heineken® global activation ‘Open Your World’: Strong global activation programmes Communication Design Engagement Innovation 11

  12. Slide 12: Consumer-inspired, customer-oriented, brand-led

    2 | Consumer-inspired, customer-oriented, brand-led 1 Consumer-inspired 2 Customer-oriented 3 Brand-led  Category Vision  Category Captainship  Global brand priorities  Positive story of beer  Wholesaler optimisation  Winning local brands  Responsible  Retailer partnerships  Innovation cons

  13. Slide 13: Premium product portfolio comprising local and global brands

    2 | Premium product portfolio comprising local and global brands Margin enhancing global brands Strong regional and local brands Global Brands Portfolio Indicative price vs. Mainstream beer (Index = 100) Mainstream Amstel Heineken® Strongbow Sol Desperados Premium Gold Pilsner 13 Source: HEINEKEN

  14. Slide 14: Innovation adds €1 billion revenue

    2 | Innovation adds €1 billion revenue Successful innovation in 2012 (examples) Innovation rate1 6.0% 5.3% 4.1% Brand Line Extensions New flavours 3.0% 2010 2011 2012 2020 Target ‘Radler’ brand extension Roll-out of global brands 1Innovation rate calculated as revenues generated from innovations 14

  15. Slide 15: Capture the opportunities in emerging markets

    3 | Capture the opportunities in emerging markets Emerging markets represent over 60% of HEINEKEN’s business Consolidated beer volume EBIT (beia)1 (mhl) (€bn) 184 3,2 64% 59% 105 1,7 51% 40% 36% 41% 49% 60% 2007 2012 Pro Forma 2007 2012 Pro Forma Developed Developed Emerging Emerging Including APB a

  16. Slide 16: Strong and well diversified emerging market footprint

    3 | HEINEKEN has a strong and well diversified emerging market footprint Market position in emerging regions by volume #1 position #2 position #3 position #4 position Other Africa & Middle East nm Southeast Asia & the SAN / MIGUEL BREWERY INC. Pacific Islands SAN MIGUEL BREWERY INC. China, South Kor

  17. Slide 17: Asia Pacific

    3 | Asia Pacific Growing, dynamic beer market HEINEKEN operates in the region through: Country (#1 and #2 Beer market Growth CAGR Per Capita Consumption IPS* CAGR% Population CAGR %  25 breweries positions) % (2011-20) Litres (2011) (2011-20) (2011-20)  United Breweries Ltd (UBL) in India #2 Posit

  18. Slide 18: Leading market positions in Asia Pacific

    Leading market positions in Asia Pacific 1 Laos Mongolia #2 #2 3 China Thailand #2 #1 1 Vietnam 1 5 #2 Sri Lanka #2 1 1 Papua New 1 1 Guinea #1 Cambodia #2 2 2 Solomon Islands 1 #1 Malaysia #1 New Caledonia 1 #1 Broad market leadership Leadership in Singapore Indonesia 4 New Zealand the IPS #2 #1 #1

  19. Slide 19: Premium beer in China represents a profitable growth opportunity

    3 | Premium beer in China represents a profitable growth opportunity for HEINEKEN HEINEKEN’s strategy in China Top 10 provinces in China represent around  Premium segment leadership led by 80% of the country profit pool Heineken® & Tiger  National presence with focus on key regions to capture valu

  20. Slide 20: India

    3 | India India is at the start of the beer growth curve Unparalleled growth opportunity UBL’s Brand Leadership (2012)  World’s largest population by 2025 (over 1.5bn by 2030) 40%  70% of population below 30 30%  Growing middle class  Beer market 18mhl, CAGR 2012-20: +7.8%* 20%  Low per capita

  21. Slide 21: Africa & the Middle East

    3 | Africa & the Middle East Thirteen #1 and four #2 positions Beer market Country Per Capita Pop. Population Growth (#1 and #2 Consumption (2011 in CAGR % Beer market growth drivers: CAGR % positions) Litres (2011) millions) (2011-20) (2011-20)  Improving political and economic environment Nigeria

  22. Slide 22: Mexico

    3 | Mexico Commercial initiatives focused on delivering value growth Segmentation to deliver higher value Mexico: 2012 organic growth (Indexed to volume) Premium 4x Sub-Premium Mid-single 2x digit growth Mainstream Cons. vol. org. Revenue org. EBIT (beia) Below growth growth org. growth Mainstream 2

  23. Slide 23: Leverage HEINEKEN's global scale

    4 Leverage HEINEKEN’s global scale HEINEKEN Global Procurement HEINEKEN Global Shared Services:  Product related savings in production 2012 transitions: and logistics ROM  Consolidation of media buying agencies UK  Purchasing efficiencies on Non Product related spend area FRA  IT savings IRE HUN

  24. Slide 24: TCM 2: New global cost efficiency programme

    TCM 2: New global cost efficiency programme Expected to generate €525million savings from 2012 - 2014 TCM2: Global in scale and across all functions 2012FY: Pre- tax saving of €196 million TCM2 Functional Split Support 21% Supply Chain 60% Wholesale 7% Supply Wholesale Chain Commerce 12% TCM2 TCM2 R

  25. Slide 25: Drive personal leadership

    5 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  140 nominated leaders completed leadership development programmes in 201

  26. Slide 26: Embed and integrate sustainability

    6 Embed and integrate sustainability Commitment 2020 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 S

  27. Slide 27: 2013 Full Year Outlook

    2013 Full Year Outlook Challenging trading conditions in austerity affected markets in Europe and inflationary pressures in Nigeria are expected to continue to impact volume development for the balance of year leading to a moderation in organic growth expectations for the full year. Overall, HEINEKE

  28. Slide 28: Appendix

    Appendix Appendix Appendix Appendix Appendix Appendix Appendix Appendix Appendix | Heineken NV | Heineken Holding NV

  29. Slide 29: Western Europe

    Western Europe Strong market positions and cash generation A large and resilient beer market HEINEKEN is the leading brewer  Significant profit pool of circa €2.2 billion1 in Western Europe HEINEKEN benefits from strong leading positions Market Share in Western Europe >25% Western Europe has realis

  30. Slide 30: Central and Eastern Europe

    Central and Eastern Europe Strategic focus on long term value creation #4 #2 #2 > 31 #3 #1 #1 #2 #2 #1 #3 #3 #2 Operating Company #1 #2 Joint Venture #1 Export #2 1 In Germany, HEINEKEN operates under 2 business models: JV with BHI and direct distribution of some brands 30 Source: HEINEKEN, based on

  31. Slide 31: Q1 2013 Trading Update Heineken N.V.

    Q1 2013 Trading Update Heineken N.V. | Heineken NV

  32. Slide 32: Q1 2013 key highlights

    Q1 2013 key highlights  Group beer volume declined organically by 2.7%, reflecting:  One-less trading day  Strong growth in comparable prior year quarter  Volatile global economy  Unfavourable weather conditions in several key markets  Effect of destocking in France and USA  Revenue increased

  33. Slide 33: Region overview

    Region overview GROUP BEER VOLUME 1 Organic (mhl) Q1 2013 Q1 2012 Change (%) Change (%) Africa & the Middle East 6.9 7.3 -4.3% -4.3% The Americas 14.3 14.6 -1.7% -2.4% Asia Pacific 6.9 7.0 -2.1% 8.0% Central & Eastern Europe 10.1 10.4 -3.0% -3.0% Western Europe 8.5 9.2 -8.6% -8.7% HEINEKEN GROUP 46.

  34. Slide 34: APB markets delivering strong growth

    APB markets delivering strong growth APB markets grew in the low-double digits in Q1 2013 Key APB markets - Q1 2013 volume growth THAILAND CHINA Mid-single High-single digits digits SRI LANKA VIETNAM High-single Double digits digits MALAYSIA CAMBODIA Double Low-single digits digits SINGAPORE PAPUA N

  35. Slide 35: Revenue +8.1%; organic revenue -2.7%

    Revenue +8.1%; organic revenue -2.7% Revenue 4800 (in €m) -0.9% 4400 11.7% -4.5% 1.8% 4,145 4000 3,834 3600 3200 -2.7% organic 2800 2400 2000 Q1 2012 Cons. Forex transl. Total Cons. Rev/hl Q1 2013 Volume 35

  36. Slide 36: Heineken® brand performance reflects strong comparative growth in prior year quarter

    Heineken® brand performance reflects strong comparative growth in prior year quarter Heineken® premium volume Quarterly growth rates (%)1 8.5%  Successful introduction of the new ‘Star’ 6.0% bottle in the key USA and Dutch markets 3.8% 3.5%  “The Final” aired in 37 markets  Cumulative impact of d

  37. Slide 37: New 'Radler' brand line extensions

    New ‘Radler’ brand line extensions ‘Double the refreshment’ Spain Belgium Finland Greece Portugal UK Switzerland Netherlands Italy 37

  38. Slide 38: IAS19 impact on financials

    IAS19 impact on financials FY 2012 Restatement F I N A N C I AL 2012 FY 2013 Expected Impact1 (€ million) IMPACT RESTATED (€ million) Impact to EBIT (beia) +6 2,918 Impact to EBIT (beia) -41 Reclassification to Reclassification to -51 -57 ‘Other Net Finance Costs’ ‘Other Net Finance Costs’ Taxation

  39. Slide 39: Pro forma financials for combined APB and APIPL

    Pro forma financials for combined APB and APIPL Consolidated Beer Revenue EBIT (beia) €m Volume (mhl) €m 425 14.7 1,698 13.7 362 2.3 93 1,412 287 97 93 12.4 1,411 265 239 2011FY* 2012FY 2011FY* 2012FY 2011FY* 2012FY INCLUDED IN HEINEKEN’s RESULTS APB/ APIPL financials not included in HEINEKEN’s resu

  40. Slide 40: Improved financial flexibility

    Improved financial flexibility Credit ratings facilitate long-dated bond issues  Long term issuer credit ratings BBB+/Baa1, currently on Stable Outlook  Enables diversification of funding and broadens the investor base  Access to longer maturities and alternative currencies In 2012, HEINEKEN ente

  41. Slide 41: Sponsored Level 1 ADR Programmes

    Sponsored Level 1 ADR Programmes Heineken N.V. Heineken Holding N.V. Bloomberg ticker: HEINY Bloomberg ticker: HKHHY ISIN: US4230123014 ISIN: US4230081014 Cusip: 423012301 Cusip: 423008101 Exchange: OTC Exchange: OTC Ratio: 2 ADRs: 1 Ordinary Share Ratio: 2 ADRs: 1 Ordinary Share Depositary bank: De

  42. Slide 42: 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 625 507 1.31 2013F* 12 2014F 613 143 1.30 2014F* -6 * Impact on open positions calculated by comparing s

  43. Slide 43: HEINEKEN shareholder structure

    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 88.55% 11.45% L’Arche Green N.V. 51.083% Heineken Holding N.V. FEMSA Free float 14.935% 33.982% 50.005% Hei

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