Heineken Nv · EURONEXT:HEIA
Heineken Nv — Investor Presentation (February 2020)
62 slides from Heineken Nv's investor presentation, February 2020
Slide 1: Investor Presentation
HEINEKEN Investor Presentation February 2020 | Heineken N.V. | Heineken Holding N.V.
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
Slide 3: Approach to long-term value creation
Approach to long-term value creation Focus on premium segment to drive superior top line growth and market share Revenue & Market Share Growth HEINEKEN Golden Triangle Continuous improvement of Focus on efficient deployment operating profit margin, of capital and working capital driving costs and ef
Slide 4: Global balanced footprint with growth potential
Global balanced footprint with growth potential Cons. Beer volumes by region 70+ 160+ 300+ 241mhl 54% 85,000+ (2019) Countries Breweries Brands Consolidated Of profit from Direct Employees Beer Volume developing markets 18% AMEE 34% Americas ASP Europe 36% 13% Operating profit (beia) by region (2019
Slide 5: Limited reliance on individual markets
Limited reliance on individual markets HEINEKEN operating profit (BEIA) Two countries have >10% of profits; Mexico & Vietnam >50 100% Diversified mix of countries: Established markets with steady improvements Developing markets at different stages of growth Large collection of small market
Slide 6: Heineken: the most international beer brand
Heineken : the most international beer brand ® Top 10 global beer brands by market reach Number of markets Brand size (mhl) 0 10 20 30 40 50 60 70 80 Heineken 38 The beer brand with the widest reach Carlsberg 12 9 Present in over 190 markets Guinness Tuborg 17 Budweiser 53 Meaningful presence
Slide 7: Strong local operations with local portfolios
Strong local operations with local portfolios Mexico Nigeria Russia Poland UK USA Vietnam France Brazil Spain Heineken® Heineken® Heineken® Heineken® Heineken® Heineken® Amstel Light Heineken® Heineken® Desperados International Heineken® Birra Moretti Heineken® Tiger Miller Desperados Strongbow Tige
Slide 8: Business Priorities
HEINEKEN Business Priorities February 2020 | Heineken N.V. | Heineken Holding N.V.
Slide 9: Five business priorities to continue driving long term value creation
Five business priorities to continue driving long term value creation 8
Slide 10: Strong top line growth
Strong top line growth Developing our international brands Building international and local craft Leading low- and no-alcohol innovations High-single digit growth Mid-single digit growth High-single digit growth Double digit growth of Amstel and Tiger Lagunitas in more than 35 markets Do
Slide 11: Heineken volume +8.3%
Heineken volume +8.3% ® Positive performance across all regions Double digit growth in over 40 markets including Brazil, Mexico, South Africa, Nigeria, the UK, Romania and Germany 12 markets sell more than 1 million hectolitres Successful roll-out of Heineken® 0.0 continues Official Beer P
Slide 12: Drive End-to-End performance
Drive End-to-End performance Examples of Make Sell Support End2End initiatives Continuous improvement on New Product Implementation Revenue (NPI) process led to faster and more efficient brand and ZBC management innovation launches (e.g. Heineken® 0.0 rolled out in 57 markets in less than three ye
Slide 13: Engage and develop our people
Engage and develop our people Develop great business driven leaders Grow our talent pipeline at all levels Build critical capabilities and strengthen functional excellence Leverage diversity & our culture Female role models in HEINEKEN Supply Chain 12
Slide 14: Brewing a Better World
Brewing a Better World February 2020 | Heineken N.V. | Heineken Holding N.V.
Slide 15: Brewing a Better World
Brewing a Better World FY 2019 update 29% decline in rate of accidents vs 2018, but with 11 fatalities 3.4 hl per hl of water use on average, 3.1 hl per hl in water scarce areas. Ahead of 2020 targets, so launched water ambition ‘Every Drop’ in March 2019 19% of electric and thermal energy in
Slide 16: Brewing a Better World
uj Brewing a Better World oo Hea AND WELLBEING Advocating responsible consumption Sourcing sustainably DECENT WORK AND ECONOMIC GROWTH Growing with communities DENT WORK AND COMO GROWTH Promoting health and safety ‘Every dro protecting water resources LEAN waTER AND SANITATION q ‘Drop the C: reducin
Slide 17: Every Drop: protecting water resources
Every Drop: protecting water resources 33% decrease in water consumption (hl/hl) compared with 2008 3.1 hl/hl average in water-stressed areas surpassing the 2020 target 15 brewery sites now started water balancing projects, incl. nature-based solutions like reforestation and wetland restoratio
Slide 18: Source: Last reported results
17 Source: Last reported results
Slide 19: Drop the C: reducing CO2 emissions
Drop the C: reducing CO2 emissions Exceeded target with 49% decrease in CO2 emissions in production compared to 2008 Increased renewable energy in our breweries to 19%. 2030 ambition = 70% >150,000 Green Fridges: 50% less emissions compared to 2010 13% decrease in emissions from distribution
Slide 20: Growing with Communities
Growing with Communities Creating economic and social impact 85,000 employees in more than 70 countries €12 billion total tax contribution 27.6% effective income tax rate Investing in our communities Local sourcing projects support > 140,000 farmer households. Providing access to new cro
Slide 21: Sourcing sustainably
Sourcing sustainably 37% of raw materials sourced sustainably (target: 50% by 2020) Increased local sourcing of agricultural raw materials in Africa to 44%, supporting smallholder farmers. More to do to reach 60% target, investing in malting capacity in SA and Ethiopia. 97% compliance with HEI
Slide 22: Advocating responsible consumption
Advocating responsible consumption 63 markets (95%) worldwide dedicated at least 10% of Heineken® media spend to Responsible Drinking campaigns. 35 markets have partnerships in place to address alcohol-related harm 5.7% of total global volume contributed by low- and no-alcohol options Ingred
Slide 23: Safety first
Safety first 38% reduction in accident frequency since 2015. But 11 fatalities in 2019 (of which 6 on the road). Our focus will remain on Life Saving Rules 92% compliance level in breweries 95% compliance level in projects, commerce, distribution and logistics Delivery now nearing comple
Slide 24: Values and Behaviours
Values and Behaviours We launched a new mandatory Code of Business Conduct training, on how to deal with business conduct dilemmas. In six months, more than 53,000 employees completed this training (online or classroom) We embedded Brand Promoters safety across our business and significant progr
Slide 25: Respecting Human Rights
Respecting Human Rights We continue working on human rights due diligence process to better understand and address the human rights risks across operations and value chains. For this we follow the UN Guiding Principles on Business and Human Rights. To date, we have completed risk assessments and
Slide 26: Inclusion & Diversity
Inclusion & Diversity 61 nationalities among our senior managers Female representation at senior levels increased to 23% 900 leaders attended inclusive leadership workshops. Operating companies and global functions integrating I&D into their people plans and everyday business practices. La
Slide 27: 2019 Full Year Earnings Release
Heineken N.V. 2019 Full Year Earnings Release Jean-François van Boxmeer, CEO Laurence Debroux, CFO 26 February 2020 | Heineken N.V. | Heineken Holding N.V.
Slide 28: 2019 FY Key Highlights
2019 FY Key Highlights Net revenue (beia) OG +5.6% Net revenue (beia) OG per hectolitre +3.3% Consolidated beer volume OG +3.1% Heineken® volume +8.3% Operating profit (beia) OG +3.9% Operating profit (beia) margin 16.8% (-12 bps) Net profit (beia) €2,517 million, +4.3% organically D
Slide 29: Regional Review
Regional Review 2019 FY Organic Growth % Africa, Middle East Heineken NV & Eastern Europe Americas Asia Pacific Europe Consolidated beer volume 3.1 4.6 2.6 11.8 -0.2 Price mix on a constant geographic basis 3.4 2.9 7.1 0.8 1.8 Net revenue (beia) 5.6 8.9 7.5 10.9 2.0 Operating profit (beia) 3.9 -0.2
Slide 30: Financial Overview
Financial Overview Key Financials €m unless otherwise stated 2019 FY Total Growth (%) Organic Growth (%)* Revenue 28,521 6.4 Net revenue (beia) 23,894 6.3 5.6 Operating profit (beia) 4,020 5.5 3.9 Operating profit (beia) margin 16.8% -12 bps Net profit (beia) 2,517 5.5 4.3 Net profit 2,166 13.2 Dilu
Slide 31: Net Revenue: +5.6% Organic Growth
Net Revenue: +5.6% Organic Growth Organic growth +5.6% +3.3% €m +2.2% +1.2% €m -0.5% 23,894 22,471 2018 FY Net revenue Consolidation Currency Total volume Net rev/hl 2019 FY Net revenue (beia) impact translation (beia) 30
Slide 32: Operating Profit (beia): +3.9% Organic Growth
Operating Profit (beia): +3.9% Organic Growth +3.9% €m €m +2.1% -0.6% 3,808 4,020 2018 FY Operating profit Consolidation Currency Organic 2019 FY Operating profit (beia) impact translation growth (beia) 31
Slide 33: Diluted EPS (beia): €4.38, +4.9%
Diluted EPS (beia): €4.38, +4.9% +4.9% 4.3% 1.9% -0.7% -0.7% 4.38 €4.18 € 4.38 -€0.03 €0.08 €0.18 -€0.03 2018 FY Diluted EPS Consolidation Currency Organic Shares sold to CRE 2019 FY Diluted EPS (beia) impact translation growth (beia) 32
Slide 34: Free Operating Cash Flow of €2,228 million
Free Operating Cash Flow of €2,228 million €m unless otherwise stated 2019 FY 2018 FY¹ Vs. LY Cash flow from operations (before 5,669 4,858 811 changes in working capital) Change in inventories -257 -129 -128 Change in trade and other receivables -245 -66 -179 Change in trade and other payables and
Slide 35: Net debt/EBITDA (beia) was 2.6x at 2019 FY
Net debt/EBITDA (beia) was 2.6x at 2019 FY Committed to long term target <2.5x A well balanced maturity profile Long term issuer ratings BBB+/Baa1, currently on stable outlook *Includes acquisitions, excludes disposals on a 12 month pro-forma basis. **Also includes first time impact of IFRS 16 on a
Slide 36: HEINEKEN Leadership
HEINEKEN Leadership “Our strategic focus continues to be growth oriented with an ever-increasing emphasis on the sustainability of this growth, both socially and environmentally. We invest in innovation and operational excellence so our consumers enjoy our brands and we exceed our customers' expecta
Slide 37: Q1 trading update
Heineken N.V. Q1 trading update 36 April 2020 | Heineken N.V. | Heineken Holding N.V.
Slide 38: 2020 Q1 Highlights
2020 Q1 Highlights 2020 Q1 Organic Growth % Africa, Middle East & Heineken NV Eastern Europe Americas Asia Pacific Europe Consolidated beer volume – Q1 -2.1 -6.9 -2.5 4.4 -1.4 Consolidated beer volume – March -14.0 -14.5 -13.8 -10.6 -15.3 37
Slide 39: Covid-19
Covid-19 Origin and facts Government measures Started in late 2019 in Wuhan, China Nature and timing differ by country First death outside of China on 2 February 2020 Restrictions on movement of populations Declared pandemic by World Health Organisation Outlet closures on 11 March 2020
Slide 40: Covid-19 guiding principles
Covid-19 guiding principles People The health, safety and trust of our people is of paramount importance Business continuity We do everything we can to safeguard the continuity of our business and the appeal of our brands, including the business continuity of our customers and suppliers Communities
Slide 41: Covid-19 and our people
Covid-19 and our people Our actions Global People & Health Covid-19 Task Force Strict hygiene and social distancing guidelines Majority of office employees working from home Accelerated digital learning platforms International travel ban Our commitments No structural layoffs until the en
Slide 42: Covid-19 and business continuity
Covid-19 and business continuity Our actions Our commitments Global actions: Scaling up initiatives in support of on- Suspension of travel, events and hiring trade customers Suspension of all non-committed capex, unless business critical Paying suppliers at agreed payment terms and will su
Slide 43: Covid-19 and our communities
Covid-19 and our communities Our actions Local initiatives in support of those who are at the front line, approaching a value of €5m HEINEKEN donation of €15 million to support IFRC relief efforts in Africa, Asia and Latin America Heineken family donation of €10 million to eight charities supp
Slide 44: Financing Update
Financing Update HEINEKEN has entered the crisis with a strong balance sheet: Undrawn committed revolving credit facility of €3.5 billion There are no financial covenants in the outstanding debt In Q1, HEINEKEN secured extra financing, including bonds for a total of €1.5 billion HEINEKEN i
Slide 45: Regional Update
Regional Update February 2020 | Heineken N.V. | Heineken Holding N.V.
Slide 46: Africa Middle East & Eastern Europe
Africa Middle East & Eastern Europe A long standing presence OpCo’s Joint Ventures Consolidated Non-consolidated Algeria Congo-Brazzaville Burundi Israel DRC Namibia Egypt UAE Ethiopia Ivory Coast License Kenya Operations La Reunion Lebanon Cameroon Mozambique Ghana Nigeria Jordan Russia Morocco Rwa
Slide 47: Nigerian Breweries
Nigerian Breweries Leadership position, committed for the long term Key Facts Comprehensive brand portfolio 9 breweries and 2 malting plants The Nigerian beer market remains #1 or #2 brands in all segments Segment Core brands very attractive given its high growth potential and the macroeconomic In
Slide 48: Americas: A collection of highly diverse markets
Americas: A collection of highly diverse markets HEINEKEN’s position in premium segment Canada #3 Key Facts 11 OpCos United States Puerto Rico French West Indies 7 JVs #3 #1 #1 Export business to more than 40 markets Mexico Central America & Caribbean Bahamas Haiti #2 #1 #1 #1 St. Lucia Jamaica #1 #
Slide 49: Heineken Mexico
Heineken Mexico Attractive growth prospects for beer Key Facts Comprehensive portfolio 7 Breweries HEINEKEN’s largest beer operation #2 Position Segment Core brands Positive underlying market fundamentals, including population Premium growth, urbanisation, growing middle class Meoqui brewery,
Slide 50: Heineken Brazil
Heineken Brazil Portfolio strategy driving improved market share Key Facts Strong portfolio 15 breweries Marked acceleration of premium in c.20% Market share Segment Core brands 2019 #2 Position in market Heineken® complemented by Premium and premium portfolio holding >30% Super Premium market s
Slide 51: Heineken USA
Heineken USA Relevant presence in premium segment Key Facts Strong portfolio 9 Distribution Centres Economic indicators are improving 8 Offices Segment Core brands Premium segment outperforming #2 Premium Position led by Mexican brands and craft Premium & Super Premium White Plains HQ Mainstream
Slide 52: Asia Pacific: a unique footprint in the region
Asia Pacific: a unique footprint in the region Best placed to access regional growth opportunities #1 Position Heineken has leadership in the India largest number of markets1 China Number of #1 and #2 market positions Indonesia Malaysia in Asia-Pacific (by volume) Cambodia New Caledonia HEINEKEN 14
Slide 53: Heineken Vietnam
Heineken Vietnam An attractive beer market Key Facts Strong portfolio 6 Breweries #2 Position Segment Core brands #1 position in premium segment Favourable beer market volume trends, with CAGR +4.4% expected by Canadean 2018-2023 Premium Premium volume outperformance due to growing middle class
Slide 54: United Breweries Limited
United Breweries Limited Strong potential for growth Key Facts Strong portfolio 21 Breweries 12 contract breweries Segment Core brands #1 Market position HEINEKEN’s stake in UBL 46.52% India beer PCC is slightly above 2L 2018 beer market size 28mhl Super Premium Strict regulations on the pro
Slide 55: China Resources Beer Holdings
China Resources Beer Holdings Unlocking premium potential Key Facts Strategic collaboration 80 Breweries HEINEKEN’s stake in CR Beer 20.6% Present in 25 out of 34 regions in China PCC 35L, with signficant growth #1 Market position potential Snow, No. 1 beer brand by volume in the world Marke
Slide 56: Europe: Strong market positions driving growth
Europe: Strong market positions driving growth HEINEKEN Beer Volume Market Share #1 Position Austria Europe remains an attractive and Greece valuable market for beer, cider Italy and near category growth France potential Netherlands Slovakia HEINEKEN is well positioned in Slovenia the context of
Slide 57: Wholesale strategically important in selected markets
Wholesale strategically important in selected markets Key Facts Business model Wholesale operations focused on on- trade service and particularly draught Off Trade Providing synergies with commercial Brewery brewing operations: Higher proximity to customer On Trade Better access to broad ran
Slide 58: Star Pubs & Bars strategically important in the UK
Star Pubs & Bars strategically important in the UK A highly successful & profitable Strategically important business model to the UK business >2,500 leased and tenanted pubs since Punch acquisition Hands-on experience & understanding of the On Trade with a wide UK footprint Unique consumer tou
Slide 59: HEINEKEN Ownership structure
HEINEKEN Ownership structure Heineken N.V. shares held by Heineken Holding N.V. equals the number of shares issued by Heineken Holding N.V. FEMSA L’Arche Green N.V. Public 52.599% 12.262% HEINEKEN Holding N.V. 35.139% Board of directors Public 50.005% 8.632% HEINEKEN N.V. 41.363% Supervisory board L
Slide 60: 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: OTCQX Exchange: OTCQX Ratio: 2 ADRs: 1 Ordinary Share Ratio: 2 ADRs: 1 Ordinary Share Depositary bank
Slide 61: Upcoming events
Calendar Upcoming events 12-13 May 2020 — JPM Consumer & Retail Conference, Virtual 9-11 June 2020 — Deutsche Bank Conference, Virtual 3 July 2020 — Start silent period HY1 2020 3 August 2020 — Announcement HY1 results 2020, incl conference call 61
Slide 62: We Are HEINEKEN.
We Are HEINEKEN. HEINEKEN