Heineken Nv · EURONEXT:HEIA
Heineken Nv — Heineken Financial Markets Conference 2018
28 slides from Heineken Nv's conference presentation, May 8, 2018
Slide 1: Winning in Italy
Heineken Italy Winning in Italy Søren Hagh Managing Director Heineken Italy Milan, Italy | May 8-9, 2018 | Heineken N.V.
Slide 2: Summary
Summary ✓ Complex and highly competitive market, where HEINEKEN has a strong leadership ✓ A growing market, having recovered past historic record ✓ A Strategy to WIN based on 6 priorities creating a sustainable competitive advantage ✓ Strong delivery of results with significant upside potential for
Slide 3: Agenda
Agenda Italy Market Overview HITA Strategy to WIN Results and Opportunities 2
Slide 4: Italy: a large economy with regional differences
Italy: a large economy with regional differences ▪ #3 economy in Eurozone ▪ #8 economy in the World ▪ 60m Nationals with strong appreciation for food, drinks, quality and design ▪ 60m Tourists per year (+5% vs 2016) Landscape Food GDP per capita (€) 34,000 33,000 30,000 18,000 17,000 20,000 GDP grow
Slide 5: Growing market with per capita consumption upside
Growing market with per capita consumption upside Beer market and Consumption per capita 2016 Consumption per capita (litres per year) 19.6* 105 103 98 18.5 18.9 19.0 32.5* 84 30.3 31.4 30.8 69 68 17.9 17.8 17.7 17.5 17.5 17.8 17.2 47 16.9 29.8 29.2 31 31 28.0 * Internal Estimation Beer market (mill
Slide 6: Two strong channels with a range of formats
Two strong channels with a range of formats OFF PREMISE ON PREMISE • 57% of the market - 11m hl • 43% of the market - 8m hl • 250 Customers (International and Local) • 1,800 Distributors • 25K Stores • 280K Points of Consumption Format Sub Channels Format Sub Channels 10% 7% 7% 13% 8% 12% 45% 18% 13
Slide 7: Heineken Italy: a story of successful integrations
Heineken Italy: a story of successful integrations 1974 1989 1995 2003 2017 1986 1994 1996 2008 6
Slide 8: Regaining market share in a competitive market
Regaining market share in a competitive market HITA market share development Market share by player MS Main 30.1% 2016 Brands 28.0% 18.3% 29.4% 28.9% 9.1% 29.0% 6.1% 28.0% FORST MENABREA + CASTELLO 9.9% 27.6% IMPORT + OTHER ITA 28.5% 2012 2013 2014 2015 2016 2017 7 Source: Internal estimates based o
Slide 9: A strong and vertically integrated leader
A strong and vertically integrated leader BEER BUSINESS HORECA DISTRIBUTION BUSINESS Main Brands Comun Nuovo Aosta 4% 16% Hibu 27% 11% Massafra 42% ▪ 40K customers Assemini ▪ Market leader ▪ 41 warehouses ▪ 4 breweries ▪ 10,000 skus ▪ 1 microbrewery ▪ 1,000 employees ▪ 1,000 employees ▪ Comprehensiv
Slide 10: The team
The team 2,000 employees Average age: 45 years Søren Hagh Riccardo Giuliani Gabriele Giudici Barbara Garioni Managing Director MD Partesa Finance Off Premise Gender Mix: 75% 25% Marco Luciani Floris Cobelens Mario Perego Alberto Cortese On Premise Marketing Human Resources Supply Chain Tiziano Somas
Slide 11: HITA Strategy to WIN
Agenda Italy Market Overview HITA Strategy to WIN Results and Opportunities 10
Slide 12: Safety First
Safety First Safety Culture Fatalities Accidents 2424 23 Training and Tracking No fatalities 16 16 for employees and in the last 3 years 13 13 contractors 2014 2015 2016 2017 Life Saving Rules Road Safety 11
Slide 13: Our global strategy in an Italian context
Our global strategy in an Italian context Our Must Win Priorities GROW IN RESHAPE CATEGORY IN WIN IN PREMIUM HORECA MODERN TRADE Lead with Heineken® and Birra Leverage Partesa Deliver best in class Moretti instore visibility Optimize Regional Make Ichnusa a Opportunities Lead in Drink Different Bloc
Slide 14: Heineken: the leader in premium
® Heineken : the leader in premium JOBS TO BE DONE KEY ACTIVITIES HEINEKEN® PERFORMANCE CONVERT SUPERIOR EQUITY INTO PENETRATION CAGR: +5.0% ON & OFF PREMISE BIG BANG ACTIVATION UCL CAGR: +0.2% REINFORCE CREDENTIALS ON PREMISE FLAGSHIP ACCOUNTS & VISIBILITY FORMULA 1® SPONSORSHIP 2013 2015 2017 13 S
Slide 15: Birra Moretti: the market leader
Birra Moretti: the market leader* WHO WE ARE KEY ACTIVITIES BIRRA MORETTI PERFORMANCE PLAYFUL ITALIAN CRAFTMANSHIP CAGR: +6.4% NEW CAMPAIGN AND VISUAL IDENTITY CAGR: +4.4% ON & OFF PREMISE GATEWAY TO DRINK BIG BANG ACTIVATION DIFFERENT INNOVATIONS 2013 2015 2017 14 Source: Internal data; *IRI
Slide 16: Ichnusa: the super-premium blockbuster
Ichnusa: the super-premium blockbuster WHO WE ARE KEY ACTIVITIES ICHNUSA PERFORMANCE UNCORRUPTED RESPECTFUL RAW CAGR: +8.2% NEW ICONIC PACKAGING CAGR: +1.9% INNOVATION A small, stubborn brewery proudly rooted in BREAKTHROUGH Sardinia, loyal to the island and its people CAMPAIGN 2013 2015 2017 15 Sou
Slide 17: Drink Different: shaping the future of the category
Drink Different: shaping the future of the category Leverage power brands Grow local jewels and craft Change the game with LNA Step change capabilities Shape digital opportunity 16
Slide 18: Horeca: a highly fragmented market
Horeca: a highly fragmented market 8.3mhl Market 45% Draught and 36% Import Implications 6 Regions With major differences in beer culture and route to market High fragmention with diverse level of maturity at distributor and outlet level 110 Provinces Each defining a distinct local market Hyperlocal
Slide 19: Grow in Horeca by changing the game
Grow in Horeca by changing the game Leverage Partesa LEVERAGE PARTESA Focus On Top Distributors Transform theTHE TRANSFORM Draught Experience DRAUGHT EXPERIENCE Reinforce Strongholds Build Premium Brands Develop Blade Draught technology Top 100 Partners Data Led Insights Optimize Category Developmen
Slide 20: Modern Trade: high promo share and complexity
Modern Trade: high promo share and complexity Dynamic Market Low Frequency High Complexity High Trade Fragmentation Beer is the fastest growing category High Penetration but low Frequency Weight of Top 3 retailers 40% 52% 56% 68% 4 Layers of Negotiation # of players per level of negotiation 251 71 1
Slide 21: Reshaping the category in modern trade
Reshaping the category in modern trade WHERE WE ARE WINNING in SECOND PLACEMENT TRANSFORM THE SHOPPER INSIGHTS CATEGORY DRAUGHT LEADERSHIP EXPERIENCE COOLER PLAN BIG BANG ACTIVATION SUMMER ISLANDS ACTIVATION x100 x5 x10 Shopper Repertoire Insights Systematic rollout with top retailers based on 250K
Slide 22: Relentless drive for E2E efficiency to fund growth
Relentless drive for E2E efficiency to fund growth Make Sell Support Sourcing 4% Revenue Brand portfolio Pack price management ZBC pricing architecture Brewing 2% Packaging 2% Mix management Sell more for more Eliminate bad costs Distribution 2% Commercial 15% Promotion Discounts & optimization trad
Slide 23: Develop and engage our people
Develop and engage our people Engage the Organisation Develop Leaders Change Culture 10 Culture Principles MT MT-1 30 Town Hall Meetings MT-2 New Internal Com Platform MT-3 110 MD Customer Meetings Heineken in Fabbrica HITA Leadership Community work for all Development Program End of 2017: 101 Parti
Slide 24: Brewed by the Sun
Brewed by the Sun Winning #BREWEDBYTHESUN ▪ 13,000 Solar Panels in use ▪ Massafra Brewery: Largest solar panels installation in the world of beer ▪ Generating 4.4 GWh of electricity per year ▪ CO2 reduction of 1,700 tons ▪ Birra Moretti Specialty Beers certified “Brewed By The Sun” 23
Slide 25: Results and Opportunities
Agenda Italy Market Overview HITA Strategy to WIN Results and Opportunities 24
Slide 26: Significant results
Significant results Market Share Evolution Net Revenue Operating Profit Modern Trade beia excl IC beia CAGR: +4.6% CAGR: +3.6% CAGR: +1.9% CAGR: +0.5% 2013 2015 2017 2013 2015 2017 Source: Internal data Source: IRI Source: Internal data 25
Slide 27: Significant growth opportunity
Significant growth opportunity Estimated beer market and consumption per capita 39.0 34.0 24.6 31.4 21.2 19.6 18.7 18.8 17.8 2014 2015 2016 2017 2020 2025 Beer market (million hl) Consumption (litres per capita) 26 Source: internal estimates based on Associazione dei birrai e dei maltatori (ASSOBIRR
Slide 28: Summary
Summary ✓ Complex and highly competitive market, where HEINEKEN has a strong leadership ✓ A growing market, having recovered past historic record ✓ A Strategy to WIN based on 6 priorities creating a sustainable competitive advantage ✓ Strong delivery of results with significant upside potential for
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