Heineken Nv · EURONEXT:HEIA
Heineken Nv — Investor Day (March 2014)
41 slides from Heineken Nv's investor day presentation, Mar 21, 2014
Slide 1: HEINEKEN: Positioned for growth in Asia Pacific
What’s Brewing Seminar HEINEKEN: Positioned for growth in Asia Pacific Roland Pirmez Region President, HEINEKEN Asia Pacific London | 21 March 2014 | Heineken NV
Slide 2: Agenda
Agenda HEINEKEN: Positioned for growth in Asia Pacific 1 Asia Pacific: A highly Attractive Growth Region 2 HEINEKEN Asia Pacific: Uniquely Positioned to Win 3 APB: Strong Growth Momentum 4 Regional Strategic Priorities 5 Key Markets Update 2
Slide 3: Asia Pacific is a diverse region with untapped growth potential
Asia Pacific is a diverse region with untapped growth potential Asia Pacific has ...and a diverse set of markets low average PCC... with significant potential for growth 79 70 59 48 45 43 39 38 34 29 29 22 21 19 13 6 2 1 Europe Rest of Asia Australia New Japan South China Laos Vietnam Thailand Taiwa
Slide 4: Asia Pacific has a young and growing population
Asia Pacific has a young and growing population… Asia Pacific has a younger average population base 80% % population under the age of 35 (2015 forecast) 70% Asia 60% Pacific average 50% 52% 40% Europe 30% average 73% 72% 70% 69% 63% 62% 61% 59% 57% 49% 47% 47% 45% 44% 41% 20% 10% 0% Laos Papua New C
Slide 5: Increasing wealth
...Increasing wealth Rising income levels across Asia Percentage of households in China Percentage of households in India 402M 434M 464M CAGR 215M 233M 250M CAGR 100% 100% 22% 24% 19% 19% 50% 50% 3% 6% -7% -9% 0% -15% 0% -12% 2007 2012 2017 2007 2012 2017 Percentage of households in Vietnam Percenta
Slide 6: Rising urbanisation a key driver of increased beer consumption
Rising urbanisation a key driver of increased beer consumption Urbanisation rate is set to rise Rising urbanisation to support across Asia Pacific increased beer consumption 84% Europe Average PCC in Vietnam 2011 2015 Average 75% 73% 74% 56% 54% 2x Asia 50% Pacific Average 39% 59% 36% 34% 33% 21% 13
Slide 7: Premium segment opportunity in Asia Pacific is compelling
Premium segment opportunity in Asia Pacific is compelling IPS penetration is low in large markets, Premium segment expected offering significant upside for growth to grow significantly ahead of mainstream % IPS of total beer market 2013 Asia Pacific beer growth 24% 8.7% 15% Europe average 10% 3.5% 8
Slide 8: Asia Pacific region expected to contribute over 70% of global beer growth
Asia Pacific region expected to contribute over 70% of global beer growth in the next 5 years Incremental beer market volume (2013-18F) in MHL3 31 (13) 209 34 5 15 152 25 112 China SE Asia & Pacific Rest of Asia and Total Asia Pacific Latin America North America Africa and Middle Europe World Island
Slide 9: Agenda
Agenda HEINEKEN: Positioned for growth in Asia Pacific 1 Asia Pacific: A highly Attractive Growth Region 2 HEINEKEN Asia Pacific: Uniquely Positioned to Win 3 APB: Strong Growth Momentum 4 Regional Strategic Priorities 5 Key Markets Update 9
Slide 10: HEINEKEN best placed to access regional growth opportunities
HEINEKEN best placed to access Mongolia #2 regional growth opportunities 1 South Korea #2 China #2 HEINEKEN has leadership in the largest number of markets1 HEINEKEN Kirin Japan #2 Laos #2 2 Number of #1 and #2 Thailand #1 5 Taiwan #2 market positions 1 28 Hong Kong #2 in Asia-Pacific 1 UBL India #1
Slide 11: A premium-led brand portfolio complemented by strong mainstream brands
A premium-led brand portfolio complemented by strong mainstream brands A winning brand portfolio HEINEKEN Asia Pacific: Group Volume and Operating profit (beia) by Segment (2013) China Vietnam Singapore Indonesia Papua India New New Guinea Zealand 1 60% 45% Mainstream 40% 55% Premium Volume Operatin
Slide 12: Well positioned to capture IPS growth
Well positioned to capture IPS growth 2013 IPS market 2018F IPS market 2013-18F size (mhl) size (mhl) CAGR China 14.3 22.8 10% Southeast Asia and Pacific Islands 10.9 16.7 8.9% +15.6MHL Rest of Asia Pacific 3.6 4.9 6.2% Forecasted Incremental IPS Volume in MHL (2013-18F) 8.6 3.9 HEINEKEN broad leade
Slide 13: Strong partnerships a key success factor for HEINEKEN Asia Pacific
Strong partnerships a key success factor for HEINEKEN Asia Pacific Examples of key partnerships Strong ties across the region HEINEKEN Market Partner Equity Stake Vietnam1 60% HEINEKEN has a track record of building successful partnerships in the region: India 38.7% Clear Common Goals Trust & Co
Slide 14: HEINEKEN's business in Asia Pacific is well diversified
HEINEKEN’s business in Asia Pacific is well diversified HEINEKEN Asia Pacific: HEINEKEN Asia Pacific: 2013 Group Volume split 2013 Group Operating Profit (beia) (MHL) split (€m) Indochina 1 Other Southeast Asia 2 22.7MHL North Asia 3 €604M6 Oceania & Pacific Islands 4 South Asia & Others 5 Source: H
Slide 15: Agenda
Agenda HEINEKEN: Positioned for growth in Asia Pacific 1 Asia Pacific: A highly Attractive Growth Region 2 HEINEKEN Asia Pacific: Uniquely Positioned to Win 3 APB: Strong Growth Momentum 4 Regional Strategic Priorities 5 Key Markets Update 15
Slide 16: APB successfully integrated within HEINEKEN
APB successfully integrated within HEINEKEN Delivering against an ambitious plan Maintained and strengthened our winning team ONE operating system, tools, processes and policies Unlocking top-line synergies through integrated commercial platform Confirmation of ~€25m cost synergies by end
Slide 17: One Regional Office, One Company, One Identity
One Regional Office, One Company, One Identity 17
Slide 18: Increasing importance of Asia Pacific region to HEINEKEN's business
Increasing importance of Asia Pacific region to HEINEKEN’s business Asia Pacific region contribution to HEINEKEN HEINEKEN Asia Pacific region (€m) group operating profit (beia) has doubled Asia Asia 580 2,394 Pacific Pacific 9% 18% WE 26% WE 33% 1,160 257 AME 21% AME 20% CEE 10% CEE Americas 12% Ame
Slide 19: Continued strong growth momentum of APB post acquisition
Continued strong growth momentum of APB post acquisition APB has achieved solid volume growth ...and strong profit growth momentum1 APB: Volume (MHL) APB: EBIT (beia)1 CAGR CAGR 7% 18.6 17% 17.0 16.2 2011 2012 2013 2011 2012 2013 19 1EBIT (beia) includes HEINEKEN‘s share of net profit of joint ventu
Slide 20: Agenda
Agenda HEINEKEN: Positioned for growth in Asia Pacific 1 Asia Pacific: A highly Attractive Growth Region 2 HEINEKEN Asia Pacific: Uniquely Positioned to Win 3 APB: Strong Growth Momentum 4 Regional Strategic Priorities 5 Key Markets Update 20
Slide 21: Asia Pacific priorities
Asia Pacific priorities 1 Leveraging Heineken® brand success 2 Position Tiger as the iconic Asian beer brand 3 Accelerate innovation 4 Capitalise on strength of mainstream brands 5 Drive excellence in outlet execution 6 Invest ahead of the curve to capture future growth 7 Leverage global scale 21
Slide 22: Leveraging global Heineken brand programmes while building local activation
1. Leveraging global Heineken® brand programmes while building unique local activation GLOBAL PARTNERSHIPS LOCAL MUSIC GLOBAL DIGITAL LOCAL CELEBRATION 22
Slide 23: Heineken offers a unique competitive advantage in the region
1. Heineken® offers a unique competitive advantage in the region Sustained growth of Heineken® brand Continued to strengthen Volume (MHL) CAGR Heineken® brand position in 2013 7.7% 6.1 #1 in Vietnam, Thailand, Singapore, 5.4 Malaysia, Taiwan, New Zealand, Japan and Indonesia premium segment Hein
Slide 24: Tiger — Unleashing the potential
2. Tiger — Unleashing the potential Strong volume growth Establishing strong position Volume (MHL) CAGR in the region and beyond 33% 5.1 Strong growth contributor 4.0 Capture brand segmentation opportunities by pricing between 2.9 mainstream and IPS Innovation with successful launch of Radler
Slide 25: Tiger — The iconic Asian beer brand
2. Tiger — The iconic Asian beer brand Communication targeting young adults entering the premium category TIGER STREET FOOTBALL TIGER TRANSLATE TIGER BLUE CHRISTMAS 25
Slide 26: We are going to take Tiger to the 'next level'
2. We are going to take Tiger to the ‘next level’ STRONGER NEW COMMUNICATION EXPANDING POSITION PLATFORM GEOGRAPHIES Tapping into sharp cultural Making Tiger cool, by Capturing the rise of the consumer needs, using the being distinctly Asian and middle class in Asia, while power and creativity of th
Slide 27: Accelerate Innovation: launches planned in 2014
3. Accelerate Innovation: 25 launches planned in 2014 Rising innovation in Asia Pacific focused on introduction of margin enhancing products and supporting top-line growth ambitions. Examples include: DESPERADOS SOL STRONGBOW TIGER APPLE CIDER RADLER Tequila flavored beer IPS from Mexico Targets non
Slide 28: Capitalise on the strength of local mainstream brands
4. Capitalise on the strength of local mainstream brands Well established local brands offer continued growth opportunities LARUE: VIETNAM BINTANG: INDONESIA +8% growth in FY13 #1 in Indonesia with 49% brand market share Has more than 100 years heritage, established since 1909 +7% growth in FY13 201
Slide 29: Diverse market conditions require strong local insights and capabilities
5. Diverse market conditions in Asia Pacific requires strong local insights and capabilities TRADITIONAL ON AND EXTENSIVE ROUTE-TO-MARKETS STRONG LOCAL OFF-PREMISE CHANNELS TAILORED TO DIVERSE MARKET UNDERSTANDING REMAIN IMPORTANT CONDITIONS OF SALES DRIVERS Brewery Distributors Distributors Wholesa
Slide 30: Developing capabilities to drive excellence in outlet execution
5. Developing capabilities to drive excellence in outlet execution UNDERSTANDING SHOPPER SEGMENTING OUTLETS WITH WE WIN BY DOING THE RIGHT AND CONSUMER INSIGHTS CLEAR CHANNEL STRATEGY THINGS IN THE RIGHT OUTLETS Differentiated products Develop innovative, Professionalise through to provide choice me
Slide 31: Adding capacity to meet future demand
6. Adding capacity to meet future demand 10 MHL of new capacity added since 20101 Added or extended 15 breweries the region since 20102 Greenfield China (2011- Guangzhou; by end-2015 Zhejiang) Myanmar (End of 2014) Capacity extension Vietnam Papua New Guinea Indonesia Singapore Lao
Slide 32: Leveraging increased scale benefits across the region
7. Leveraging increased scale benefits across the region GLOBAL SALES AND CUSTOMERS GLOBAL MARKETING PLATFORMS INNOVATION PROCUREMENT 32
Slide 33: Agenda
Agenda HEINEKEN: Positioned for growth in Asia Pacific 1 Asia Pacific: A highly Attractive Growth Region 2 HEINEKEN Asia Pacific: Uniquely Positioned to Win 3 APB: Strong Growth Momentum 4 Regional Strategic Priorities 5 Key Markets Update 33
Slide 34: Vietnam is an attractive and rapidly growing beer market
Vietnam is an attractive and rapidly growing beer market Favourable market conditions… …leads to strong market growth CAGR • Population 90m Size & • Market volume 32mhl 10% 32 • 12th largest beer market in the Scale World and 3rd in Asia Pacific 27 22 • Young population Growth • Urbanisation trend P
Slide 35: HEINEKEN is winning in Vietnam
HEINEKEN is winning in Vietnam Expanded brand offering driving market share gains Strong volume growth… …delivering continued HEINEKEN is well positioned profit growth to capture future growth CAGR opportunities 14% CAGR Leverage benefit of increased scale 38% Consistent market share gain and be
Slide 36: IPS expected to grow three times faster than mainstream segment in China
IPS expected to grow three times faster than mainstream segment in China HEINEKEN is gaining share in IPS Premium segment offer fastest Significant IPS volume growth opportunities growth anticipated Market ‘13-’18 RMB/L +10% Share CAGR CAGR 23 14.3 IPS 3% 10% >20 Heineken ® 21.7 Affordable premium 4
Slide 37: Premium focus driving profitability in China
Premium focus driving profitability in China HEINEKEN has delivered Priorities focused on winning strong growth in China in the premium segment 1500 Operating Profit 1 Leverage Heineken® brand strength Tiger volume Expand our footprint and portfolio 22% CAGR 2 3 Invest in brand building and consumer
Slide 38: Current low beer consumption in India offers promise
Current low beer consumption in India offers promise India has low PCC, with high …and attractive Navigating through growth potential demographics challenges Affordability 59 Largest population by 2030 1 India Duty structure makes beer China relatively more expensive than Brazil spirits Limited outl
Slide 39: United Breweries is the leading brewer and best placed to capture future growth
United Breweries is the leading brewer and best placed to capture future growth United Breweries has clear United Breweries Limited: market leadership Shareholder structure1 UBL 51% 38.7% 36.1% 22MHL Free Float: 25.2% 1 Strong foundations for growth Others Kingfisher brand equity and strong brand po
Slide 40: Summary
Summary Asia Pacific: A highly attractive growth region Largest contributor to global beer growth to 2018 IPS to significantly outpace mainstream beer growth HEINEKEN is well positioned to capture this growth: Largest number of leadership positions across Asia Pacific APB delivering against
Slide 41: Question & Answer
Question & Answer Question Answer Question & Answer & Answer Question & Answer London | 21 March 2014 | Heineken NV