Heineken NV 2014 Company Presentation

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Presentación Corporativa de Heineken 2014

Transcript of Heineken NV 2014 Company Presentation

  • Global Corporate Relations | August 2013 Global Corporate Relations | March 2014

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  • The world most international brewer

    No 1 in Europe and No 2 in the world by revenue

    Operations in over 70 countries globally

    Brewing great beers, building great brands

    Committed to surprising and exciting consumers everywhere

    Long and proud history and heritage

    HEINEKEN | Proud, Independent, Responsible Global Brewer


  • HEINEKEN | Our Values

    Enjoyment we bring enjoyment to life

    Respect for individuals, society and the planet

    Passion for quality


  • HEINEKEN | Brewing Great Beers, Building Great Brands

    Heineken , our flagship brand, leading international premium beer

    Desperados, Sol, Affligem and Strongbow Apple Ciders complement our global brand portfolio

    Altogether, we have over 250 international premium, regional, local and specialty beers and ciders in our portfolio

    Passion for quality and Innovation are at the heart of how we build great brands and delight our consumers


  • HEINEKEN | A Long and Proud History & Heritage

    1864 The Heineken Family enters the beer business

    1869 We switch to bottom fermentation: clearer, purer, long lasting beer

    1886 Dr. H. Elion cultivates the Heineken A - yeast => unique flavour

    1889 We are crowned at the Grand Prix Paris for quality, focused innovations


  • HEINEKEN | A Long and Proud History & Heritage

    1928 Early stages of unique advertising and becoming truly international

    1929 HEINEKEN moves into Asian markets

    1933 Heineken is the first import beer to the US after Prohibition is repealed

    1954 Alfred Heineken begins

    marketing strategy


    1968 HEINEKEN acquires Amstel Brewery

  • 2008 Acquisition of Scottish & Newcastle

    2012 Acquisition of Asia Pacific Breweries


    2010 Acquisition of FEMSA Cerveza

    1982 Production transfer from Amsterdam to Zoeterwoude in the Netherlands

    2003 Acquisition of Brau-Beteiligungs A.G. (BBAG) in Austria

    HEINEKEN | A Long and Proud History & Heritage

  • HEINEKEN | Truly Global Presence

    > 165 breweries in over 70 countries

    >85,000 employees

    > Group Beer Volume* in 2013: 195.2 million hl


    * Consolidated beer volume plus attributable share of beer volume from joint ventures and associates

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  • HEINEKEN is Unique


  • 1 Grow the Heineken brand

    2 Be a consumer - inspired, customer -oriented, brand - led organisation

    3 Capture the opportunities in emerging markets

    4 Leverage the benefits global scale

    5 Drive personal leadership

    6 Embed and Integrate Sustainability

    Shaping Our Future | Our Global Priorities


  • Heineken is our most valuable brand

    international premium beer with 20% category share

    Strong global brand equity

    Strong global platforms to further grow the brand

    Priority 1 | Grow Heineken Brand


  • Priority 2 | Be Consumer - inspired, Customer - oriented, Brand - led


    1 Expansion of global brands Desperados, Sol, Affligem and Strongbow Apple Ciders

    2 Continue to invest in and win with local brands

    3 Create value for our customers

    4 Innovation at the heart of our business

  • Priority 3 | Capture the Opportunities in Emerging Markets

    HEINEKEN has transformed its emerging market footprint

    57% profits and 62% of volumes come from higher growth markets

    Seize significant growth potential in Africa

    In Asia Pacific, seize opportunity for premium beer


    % of total Group in 2013

    62% 49%


    38% 51% 43%

    Group beer volume

    Group operating

    profit (beia)1

    Group revenue

    Developing Developed

  • Priority 4 | Leverage the Benefits of HEINEKEN s Global Scale

    The establishment of Global Business Services is a key enabler

    HEINEKEN Global Shared Services

    HEINEKEN Global Procurement Company

    Global brand building

    Supply Chain optimisation


  • Priority 5 | Drive Personal Leadership

    >70 operating companies

    >85,000 employees

    One HEINEKEN culture driven by



    Personal accountability


  • Sustainability is a critical part of how we do business

    10 - year integrated sustainability programme launched in 2010

    On track to meet 2020 goals

    Highlights of 2012 :

    Continued progress water and energy efficiency of our breweries, offices and warehouses

    93 % of our new fridges are green

    Local sourcing projects in 10 countries across Africa, benefiting more than 100,000 farmers and their families

    Global Industry Commitment to a new series of targeted actions to reduce alcohol related harm

    Our Supplier Code signed by 528 global and more than 34,000 local suppliers


    Priority 6 | Embed and Integrate Sustainability

    Highlights of 2013 available in April 2014, pending publication of Sustainability report 2013

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  • Ownership Structure and Stock Exchange Listing


    Per 1 February 2014

  • Organisational Structure


  • Our Executive Board

    Jean- Franois van Boxmeer

    Chairman of the Executive Board and Chief Executive Officer

    Ren Hooft Graafland

    Member of the Executive Board and Chief Financial Officer


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    Our Leadership Structure and Team

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  • World - class Brand Portfolio


    Heineken is our flagship brand and the premium beer

    Desperados, Sol, Affligem and Strongbow Apple Ciders complement our global brands portfolio

    Altogether, HEINEKEN has over 250 international premium, regional, local and specialty beers and ciders

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    Source: Canadean and HEINEKEN

    2013 reflects latest Canadean estimates


    10% 9%

    5% 4%

    3% 3% 2% 2%


    Heineken share of IPS (2013)

    Heineken | Clear Leadership in International Premium Segment

  • valuable international premium beer brand

    You can find Heineken in almost every country in the world

    It sets us apart from our competitors

    Heineken | Our Flagship Brand


  • Heineken | Passion for Quality One world, one taste, one unchanged recipe


  • Heineken | Open - minded Available everywhere in the world


  • Leading premium product platforms


    Heineken | Igniting Conversations

  • Heineken | World - class Premium mindset in everything the brand does


  • Heineken | Igniting Conversations Strong presence in social media


  • Heineken | Igniting Conversations The Man of the World uses his imagination to win and get to the Grand Final.


  • Heineken | Igniting Conversations ... and rugby THE game


  • Heineken | Igniting Conversations Always at the heart of s ocial, catching e


  • Heineken | Igniting Conversations with the ultimate Man of World James Bond


  • Heineken | Igniting Conversations Making responsible consumption aspirational


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  • Desperados

    A daring proposition pushing the beer category limits

    A unique Tequila Flavoured Beer with super premium positioning

    More than a beer for more than just a party: a tequila flavoured party

    A successful and profitable business model


  • Sol

    The beer of independent Mexico

    The original , easy to drink Mexican beer, born in 1899 in independent Mexico

    Part of the HEINEKEN portfolio since the FEMSA beer business acquisition in 2010

    Enjoyed in over 40 countries around the world


  • Affligem

    Timeless pure indulgence from Belgium

    An award - winning Belgian Abbey beer with a 1000 year history

    Unchanged recipe that is only brewed in Belgium under the close supervision of the monks of the Affligem Abbey

    Part of the HEINEKEN portfolio since 2002

    The legacy of craft will be shared with over 20 countries in 2014.


  • Strongbow Apple Ciders

    cider research and development capabilities


    Available in a great new range of flavours: Gold, Honey and Red Berries

    Proposition with unisex appeal


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  • Innovation is at the heart of our Company strategy to deliver top - line growth

    We work to continually surprise and excite our consumers and meet changing consumer preferences

    We reached an Innovation Rate of 5.9% in 2013

    Delighting Our Consumers with Innovations


  • Successful Innovation across HEINEKEN


    HEINEKEN has achieved an Innovation Rate of 5.9 %

    This is a combined result of successful local innovations launched across our HEINEKEN markets and roll - out of innovations with global approach

    In October 2013, HEINEKEN unveiled The SUB - an at - home draught beer system to be launched in markets from 2014

  • Radler | A major contributor to Innovation Rate


    A refreshing mix of beer and natural lemonade

    Attracts new drinkers into the beer category

    Strong profitability

    Strengthens brand equity

    Launched in 31 markets across all 5 regions

  • Draught Experiences for On - trade | Heineken Extra Cold

    Extra cold beer

    Served between - 3oC and +1 oC

    stylish column coated with a layer of ice

    More than 85,000 installations across 107 markets


  • Draught Experiences for On - trade | David GREEN

    1st GREEN draught system

    Uses 50 to 70% less energy than regular beer coolers

    Easy to use for outlet staff

    No cleaning cost, no beer losses

    100% Quality & Profitable

    Mobile and built - in versions

    Guaranteed fresh beer for 30 days


    David GREEN: 55+ markets David XL GREEN: 10+ markets

  • Draught Experiences for On - trade | Orion

    Draught beer as fresh as from the brewery

    Branded beer tanks visible in an outlet

    Unique consumer experience and highest freshness

    Convenience for outlet staff

    Grow volume & revenue

    Available in 6 markets


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  • Sustainability

    What does this mean for HEINEKEN?

    Part of our DNA; embedded in our Company values that guide how we relate to the world

    Historical commitment

    One of our business priorities in our Strategy to Win

    Considering long - term impact of our actions, not just short - term growth

    A tremendous opportunity to do good while doing good business


  • Sustainability

    Why is it critical to our future?

    With success and leadership comes responsibility

    It safeguards our future ability to continue to produce beer and cider for our consumers

    Positively impact the role of beer in society

    Working together with all stakeholders we will define the best solutions

    Employees, Consumers, Customers and Retailers, Governments, NGOs, Shareholders and Investors, Media


  • The most urgent challenges faced by our industry and our planet

    Water scarcity

    Less than 1% of water us both accessible and drinkable. We need water to grow crops and we need it to brew beer: beer is 95% water.

    The effects of climate change

    Co2 emissions contribute to climate change causing temperatures and sea levels to rise. This has an impact on the availability and cost of raw materials and other resources.

    Population pressures on food and resources

    The demand for food crops rises, making responsible agriculture and sourcing more important than ever. We want to operate in a way that guarantees our supply of raw materials.

    Alcohol related harm

    Most people enjoy our products individuals, reputation.


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    Protecting water resources

    Reducing CO2 emissions

    Sourcing sustainably

    Advocating responsible


    Our response: A focused agenda

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    1Baseline 2008


    Specific water consumption

    Reduce by 25% to 3.7 hl/hl 1

    Water balancing

    Significant water balancing in water scarce and distressed areas

    1Baseline 2008

    Protecting water resources

  • Reducing CO 2 emissions


    1Baseline 2008 2Baseline 2011, scope is 24 of our largest operations


    In production Reduce by 40% 1 (eq 6.4 kg CO2/hl)

    In fridges Reduce by 50%

    In distribution Reduce by 20% 2 in Europe and the Americas

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    Sourcing sustainably

    1With local sourcing we refer to sourcing within the Region Africa 2based on volume 3barley, hops, cider apples, other apples, other fruit, sugar, rice, sorghum, wheat, maize


    Local sourcing in Africa

    60% of raw materials locally sourced 1

    Sustainable agriculture

    At least 50% of our main raw materials supplied from sustainable sources 2,3

    Supplier Code Procedure

    Ongoing compliance to Supplier Code Procedure

  • The basis for our ways of working with suppliers: Implementation of the Supplier Code Procedure


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    Advocating Responsible Consumption

    1Small export markets and markets with religious restrictions are out of scope


    Industry Commitments

    Deliver global industry commitments

    Heineken Making responsible consumption aspirational through Heineken

    Partnerships Maintaining and publicly reporting on a partnership in each market 1

  • Values and Behaviours Embedded in our Code of Business Conduct

    Key policies for employees are embedded in our HeiCode

    Health & Safety

    Employee & Human Rights

    [email protected] and Alcohol Policy


  • Benchmarking our Performance


  • Memberships and Partnerships

    Beverage Industry Environmental Roundtable


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  • All Natural Ingredients

    Nature provides us with beer s 4 basic ingredients :

    barley, water, hops and yeast

    All these ingredients can be varied

    in endless combinations

    Some estimate there are > 40,000 different beers

    in the world!


  • Storehouse of Nutrients

    No Additives; No Preservatives

    No Fat

    Vitamins B1, 3 and 11




  • Relatively Low in Calories

    Source: Netherlands Nutrition Centre Average serving: Beer 250 ml, Wine 150 ml, Smirnoff Ice 250 ml.


  • Beer Complements Food

    The subtle taste of beer can complement

    food just as well, or even better than, wine

    Beer can be a perfect match for some foods,

    like spicy dishes, cheese and chocolate

    In pairing beer with food, you can

    complement or contrast the flavours and

    intensity of the food


  • Beer May Have Positive Health Effects if Consumed Moderately

    Source: Jonathan Powell, MRC Human Nutrition Research, Cambridge, UK


  • Telling the Positive Story of Beer


  • Cider The Art of Pomology

    Cider is a long alcohol drink made from fermented juice of

    apples or pears

    The Bulmers cider business was established in 1887

    in Hereford, England

    Herefordshire still to date the heartland of our cider

    production - has the perfect soil type and weather conditions

    to grow cider apples

    Our biggest cider brands are Strongbow Apple Ciders,

    Stassen and Bulmers *


    *In Ireland, Bulmers is not part of our portfolio

  • HEINEKEN | Global Leader in Cider

    HEINEKEN leads the global cider category with

    20% market share

    The global cider market was 19.9 million

    hectolitres in 2012

    Source: Canadean Wisdom Database February 2014


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  • 2013 | Continued progress against strategic priorities in a challenging year

    Group revenue +1.3%; +0.1% organically:

    Group revenue per hectolitre +2.7%

    Improved H2 volume performance in Western Europe and Africa Middle East

    Group operating profit (beia ) +2.8%; +0.6% organically :

    +20 basis points improvement in operating margins

    Market share gains in key markets :

    Mexico, Vietnam, France, Russia and the U.S.

    APB maintained strong growth momentum

    Strengthening our business through higher investments in marketing and capital expenditure

    Innovations delivered 1.1billion of revenues ; 5.9% innovation rate

    Accelerated TCM2 cost savings of 300 million

    Diluted EPS (beia ) of 2.75 includes a 10 cent negative impact from revised IAS19 and foreign currency translational movements


    lid ation is maintained through to 15 November 2013. Organic growth of consolidated volume, consolidated revenue and consolidated operating profit (beia) only incl ude s an impact from APB from 16 November to 31 December 2013. Organic growth calculations are adjusted for the previous 3 - month delay reported by APB, without a restatement to 2012.

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    * Includes acquisitions and excludes disposals on a 12 month pro - forma basis

    2013 | Financial Overview


  • 2013 consolidated financials organic growth %


    2013 | Regional Review

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    Sustained growth of APB



    Operating profit (beia )


    APB: 2013 proforma organic growth

    Tiger brand: Proforma organic volume growth

    2009 2010 2011 2012 2013

    CAGR +18%

    APB acquisition +30% yoy

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    Driven by Western Europe and Africa Middle East regions

    Improved performance trend in 2013 H2

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    Innovation rate 1 of 5.9% versus 5.3% in 2012

    Innovation contributed 1.1bn of revenues

    Radler beers available in 5 regions New variants

    Draught beer systems (on and off premise ) New cider flavours

    1 From 1 January 2013, the innovation rate is calculated as revenues generated from innovations (introduced in the past 40 quarters for a new category, 20 quarters for a new brand and 12 quarters 8 for all other innovatio ns, excluding packaging renovations) divided by total revenue

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    Heineken twice as large as nearest competitor brand in IPS

    Heineken : Clear leadership in IPS

    Heineken volume declined 1.8%, including an impact from destocking in France and the U.S.

    Strong performances in developing markets of Nigeria, South Africa, Russia, Chile, Brazil & China

    Heineken volume brand leadership in France

    Surpassed 1mhl of Heineken volume in China

    The SUB launched in France and Italy

    New responsible consumption campaign in 2014:


    10% 9%

    5% 4%

    3% 3% 2% 2%


    Heineken share of IPS (2013)

    IPS = International Premium Segment; based on Canadean and HEINEKEN data; 2013 reflects latest Canadean estimates

  • 1 Invest in higher marketing spend to strengthen market positions

    2 Drive innovation to support category growth

    3 Capitalise on premium segment growth with Heineken and other global brands

    4 Increase capital expenditure in developing markets

    5 Restructuring and other cost efficiency initiatives

    6 Maintain strong cash flow focus to optimise financial flexibility


    Prioritised actions for 2014

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    HEINEKEN expects

    A gradual recovery in the global economy to underpin improved trading conditions in several key markets and an improved organic volume performance trend versus 2013.

    Revenue management initiatives to drive higher revenue per hl, albeit at a more modest level compared with 2013. Overall, this is expected to result in organic revenue growth in 2014.

    A slight increase in marketing & selling (beia) spend as a percentage of revenue to increase in 2014 (2013: 12.6%).

    HEINEKEN is committed to delivering a gradual and sustainable improvement in operating profit (beia) margin over the medium - term.

    To realise its targeted TCM2 savings of 625 million covering 2012 - 2014 during the year

    Input cost prices to be stable to slightly lower in 2014 (excluding a foreign currency transactional effect).

    Exchange rate movements will adversely impact revenues and profits in 2014. Assuming spot rates as of 10 February 2014, the calculated negative currency translational impact on consolidated operating profit (beia) will be 115 million. At net profit (beia), this effect will be around 75million.

    To achieve its long - term target net debt/ EBITDA (beia) ratio of below 2.5 by the end of 2014.

    Capital expenditure related to property, plant and equipment to be approximately 1.5bn (2013: 1.4bn).

    Outlook Full Year 2014

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