deutsche bank global consumer conference 18 june …€¦ · deutsche bank global consumer...

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HEINEKEN NV | HEINEKEN HOLDING NV

HEINEKEN DEUTSCHE BANK

GLOBAL CONSUMER CONFERENCE 18 JUNE 2014

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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 forward-looking statements.

Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s ability to control or estimate precisely, such as future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials, interest rate and foreign exchange fluctuations, change in tax rates, changes in law, changes in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN’s publicly filed annual reports.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. HEINEKEN does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials.

Market share estimates contained in this presentation are based on outside sources such as specialised research institutes in combination with management estimates.

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HEINEKEN at a glance

1 Group beer volume is consolidated beer volume plus attributable share of volume from joint ventures and associates 2 Group operating profit (beia) is consolidated operating profit (beia) plus attributable share of operating profit (beia) from joint ventures and associates. Excludes Head Office.

AME

14%

Americas

28%

Asia Pac

11%

CEE

25%

WE

22%

Group beer volume1 by region (2013)

AME

20%

Americas

26%

Asia Pac

18%

CEE

10%

WE

26%

Group Operating profit (beia)2 by region (2013)

Operating Companies

Joint Ventures/ Associates

Export

Licences

70+ COUNTRIES

165 BREWERIES

250+ BRANDS

195mhl GROUP BEER

VOLUME1

57% OF GROUP OPERATING

PROFIT (BEIA)2 FROM

DEVELOPING MARKETS

85,000 DIRECT

EMPLOYEES

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The leading premium global brewer with attractive growth platforms

Focus on driving sustainable medium-term top-line growth, gradual margin expansion and consistently strong free cash flow generation

1 THE LEADING PREMIUM

BEER & CIDER PORTFOLIO

2 WORLD CLASS MARKETING &

STRENGTH IN INNOVATION

3 GLOBAL REACH WITH STRONG

ACCESS TO HIGH GROWTH MARKETS

4 RELENTLESSLY DRIVING COST

EFFICIENCIES

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Powerful Priority Brand portfolio

Belgian

Abbey beer

brand

The

Independent

Mexican

Tequila

flavoured beer

The global

leader in cider

The leading

international

premium brand

6 Source: Canadean latest estimates 1 One Equity

Heineken®: Truly global premium beer in the strategic IPS segment

2.1%

5.1%

Beer IPS

Heineken® Volume Development (CAGR: 2013F-2018F)

Heineken® : #1 global IPS brand with strongest brand equity

Heineken®

Corona

Budweiser

Stella Artois

Tiger

Dos Equis Carlsberg

6,0

6,2

6,4

6,6

6,8

7,0

7,2

7,4

7,6

7,8

0% 5% 10% 15% 20% 25%

Bra

nd

eq

uit

y1

IPS share

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Six Competitive Advantages

Design Marketing

campaigns Product

Sponsorships Digital Innovation

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Cider, another significant growth opportunity

Euromonitor Canadean latest estimates LAD: Long Alcoholic Drinks

Complementary to beer business and leveraging with core Strongbow brand and other distinct cider offerings

5%

2%

1%

Cider Beer Wine

CIDER GROWING >2.5X FASTER THAN BEER Global cider category growth

CAGR% (2008-2013) 26%

% of consumers Drinking Alcohol,

that do not drink lager

51%

% of female consumers Drinking Alcohol,

that do not drink lager

9 Source: Canadean, Heineken Analysis, Marakon Analysis. 1 Premium markets includes domestic and international segments; Specialities are defined as premium non-lager

Affligem – unique positioning in specialty beer segment

Belgian Abbey beer brand

1000 year history and unique double fermentation

Award winning recipe

Unique positioning within Heritage Premium

Speciality segment

Price Index 180 to 250 vs. mainstream beer

Rolling out and exporting to 30 countries globally

Specialities1: Fastest growing beer segment

Volume: 2010 – 2014F CAGR %

Affligem in France volume development (khl) 2008 – 2013 CAGR %

2%

4%

6%

All beer Premium

Beer

Premium

Specialty

2008 2009 2010 2011 2012 2013

Affligem France KHL

17%

10 Source: Canadean

Tiger and Dos Equis – Regional power brands

TIGER VOLUME IN ASIA PACIFIC

2011 2012 2013

2.9

4.0

5.1 33%

CAGR

ACCELERATED GROWTH OF DOS EQUIS

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

Vo

lum

e (

kHL)

MexicoUSA

Volume:

CAGR (2010-2013)

Total: 12%

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With strong positions within home markets

Complemented with Local Brand Champions

Mexico Indonesia

Nigeria

Poland

UK

5.7mhl 2.2mhl

3.8mhl 14.5mhl 1.4mhl

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EFFICIENCIES



13 Facebook fans as at 31 March 2014

World class marketing and sponsorships with strong digital activation

#1 ON

FACEBOOK

SPORTING EVENTS, MUSIC & FILM

FESTIVALS

SOCIAL AND DIGITAL MEDIA AWARD-WINNING GLOBAL CAMPAIGNS

17.4M Heineken®

11.7M Budweiser

1.7M Carlsberg

6.8M Corona

6.8M Stella Artois

(Number of Fans)

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INNOVATION GENERATED €1.1 BILLION OF REVENUE IN 2013

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 for all other innovations, excluding packaging renovations) divided by total revenue

Innovation contributing significantly to top line growth

3.0%

4.1%

5.3%

5.9%

2010 2011 2012 2013

2020 Target: 6%

Innovation rate1 Targeting new consumers through increased

consumption occasions

Leading innovating in draught beer to strengthen

presence in on-trade

Transformational innovations empowered by

design and breakthrough technology

Leverage strong capabilities and global scale to

drive speed in innovations

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Radler – A highly successful innovation

1.9m hl sold in 2013

As at end-2013 Radler Lemon was in 32 markets across all 5 regions

One of the most successful largest innovations and an example of a local innovation going global

Price point typically priced at index of 110-120 vs mother brand

Radler 0.0% launched in several markets in 2014 provides access to non-beer outlets new

consumption occasions

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Innovating at home and in the on trade Providing unique draft on trade draught proposition and unique at home self serve offer

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Driving excellence in outlet execution Partnering for growth with our customers

TARGETED CHANNEL STRATEGIES

GLOBAL BRANDS ACTIVATION

BUILDING SALES CAPABILITIES

BUILDING PARTNERSHIPS

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EFFICIENCIES



19 1 Head office & eliminations excluded from ‘% of Group’ calculation

HEINEKEN has leading positions in exciting, fast growing regions

Americas

37%

Central &

Eastern

Europe

26% Africa

Middle East

20%

Asia Pacific

17%

2013 Developing markets split:

Group beer volume:

38% 51% 43%

62% 49% 57%

Group beer

volume

Group revenue Group operating

profit (beia)1

Developing

Developed

% of total Group

20 Source: HEINEKEN, IMF, Worldmapper.org 1 Joint venture or associate

Fourteen #1 and four #2 positions

Africa Middle East: Well placed to capture growth

REUNION

U.A.E.1

NIGERIA

SOUTH AFRICA1

ETHIOPIA

DR CONGO

Rep of CONGO1

SIERRA LEONE

GHANA1

TUNISIA

ALGERIA

EGYPT

NAMIBIA1

ISRAEL1

BURUNDI

RWANDA

LEBANON

#1 position

#2 position

Exciting beer market growth supported by favourable

demographics and strong economic growth:

A booming population: Incremental c. 200m people by

2018, with growth in LDA population

An emerging middle class and rising urbanisation

(80 cities > 1m people by 2020)

Beer the alcoholic beverage of choice

HEINEKEN well placed to win in Africa Middle East:

growing the category with new brand offerings

continued strong market execution

developing local talent & capabilities

increasing local sourcing

Performance-driven partnerships

CAMEROON1

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1. Broad leadership positions only 2. 28 breweries in India includes 9 contract breweries Source: Most recent competitor financial results

HEINEKEN best placed to access regional growth opportunities

Asia Pacific: A dynamic, high growth region

HEINEKEN HAS LEADERSHIP IN THE LARGEST NUMBER OF MARKETS1

Number of #1 and #2 market positions in Asia-Pacific

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5

5

3

1

HEINEKEN

Carlsberg

Kirin

SABMiller

ABInbev

52 BREWERIES2

10,800 EMPLOYEES

OVER 50 BRANDS

APB successfully integrated in 2013

Region of growing importance to HEINEKEN:

contributed 18% of group operating profit (beia) in 2013

IPS segment opportunity compelling: Expected to

grow 8.7% over next 5 years vs mainstream beer 3.5%

Focus on IPS opportunity in China with Heineken®

and Tiger brands

Premium led portfolio complemented by strong

mainstream brands

Position strengthened and enhanced by

strong partnerships in the region

22 EBIT (beia) = operating profit (beia) plus HEINEKEN’s share of net profit of joint ventures & associates

Accessing growth opportunities in the Americas led by IPS and local brand jewels

Beer market growth supported by rising

incomes and favourable demographics

Acquisition of FEMSA Cerveza in 2010 has

accelerated organic growth in region

Strongly positioned to grow in IPS with

Heineken®

Delivering significant profit growth and

margin expansion in Mexico

Expanded ‘upscale’ brand portfolio in USA

Heineken® strong participation in

expanding IPS in Brazil

273

600 655

748 790

2009 2010 2011 2012 2013

HEINEKEN AMERICAS

EBIT (BEIA) (€M)

ORGANIC CAGR% +11%

BROAD & SEGMENT

LEADERSHIP POSITIONS

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EFFICIENCIES

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Western Europe

28%

Central &

Eastern Europe

19% Africa & Middle

East

16%

Americas

20%

Asia Pacific

3%

Other

14%

Focus on continued operating efficiencies

Cost management firmly embedded in business

Disciplined cost management supports:

Building global commercial capabilities

Sustained investment behind brands

Category growth and strengthening market positions

Higher rate of scalable value enhancing innovations#

TCM2 Regional Split: Cumulative savings (2012-2013):

€496 MILLION

On-track to deliver €625m cost savings target

from TCM2 programme in 2014

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An important enabler of current TCM2 and future cost savings

HEINEKEN Global Business Services

HEINEKEN GLOBAL PROCUREMENT (HGP): HEINEKEN GLOBAL SHARED SERVICES (HGSS): ROMANIA UK FRANCE IRELAND HUNGARY AUSTRIA

BELGIUM CZECH REPUBLIC SLOVAKIA NETHERLANDS ITALY PORTUGAL

HEAD OFFICE/ HGP CROATIA SPAIN POLAND

By June 2014, 18 HEINEKEN operating companies transitioned financial transactional services within HGSS

Targeting remaining 6 operating companies in Europe by Sep-14

Doubling the scope of services performed by HGSS

Outsourcing commoditised ‘back-office’ activities from Kraków to India

Evaluating opportunities outside of Europe

HGP scope currently represents approx. two thirds of relevant global spend base

Centralised procurement through standardising working practice & tooling

Increased visibility & monitoring of spend

Evaluating opportunities to further increase coverage of spend base

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1 Includes continuing operations of UK, Portugal and Belgium, and excludes Ireland 2 Includes Mexico domestic beer operations and Brazil 3 Asia Pacific Breweries Ltd and Asia Pacific Investment Pte Ltd

Enhancing profitability of recently acquired businesses

2008 SCOTTISH & NEWCASTLE1

2010 FEMSA CERVEZA2

2012 ASIA PACIFIC BREWERIES3

Operating profit (beia) € million


+ 730 basis point increase

in operating profit (beia) margins

since 2008

+ 530 basis point increase

in operating profit (beia)

margin to 18.2% since 2010

Successful integration & strong operating

results. Contributes to HEINEKEN organic

growth performance from 16 Nov 2013.

2008 2009 2010 2011 2012 2013

CAGR 2008-13

+18%

2010 2011 2012 2013

CAGR 2010-13

+18%

2012 2013

+14%


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1,967

2,430

2,456

2,666

2,941

2009

2010

2011

2012

2013

14,701

16,133

17,123

18,383

19,203

2009

2010

2011

2012

2013

2.15

2.58

2.70

2.89

2.75

2009

2010

2011

2012

2013

Solid financial progress

*2010 and 2012 restated. Financials net of acquisitions and disposals IAS19 revision negative impact on diluted EPS (beia): 2012 -€0,06; 2013 -€0,07 & -€0,03 from forex

Consolidated revenue (beia) in €m CAGR: +6.9%

Consolidated operating profit (beia)* in €m CAGR: +10.6%

Diluted EPS (beia)* in € CAGR: +6.3%

13.4%

15.0%

14.3%

14.5%

15.3%

2009

2010

2011

2012

2013

Consolidated operating profit (beia) margin (%) Ave. +45bps p.a.

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Improving top-line growth momentum

Group = consolidated results plus attributable share from joint ventures and associates

-1.0%

-0.6%

0.5%

1.3%

3.4%

1Q13 2Q13 3Q13 4Q13 1Q14

GROUP REVENUE ORGANIC GROWTH (%)

-3.4% -3.5%

-2.5%

-1.5%

1.3%

1Q13 2Q13 3Q13 4Q13 1Q14

GROUP BEER VOLUME ORGANIC GROWTH (%)

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Summary

Leading premium beer and cider portfolio Heineken® leading global brand in IPS

Expansion of priority brands to capture consumer segmentation

Best placed to win in growing cider category

World class marketing and strength in innovation Expertise in premium brand development

Uniquely creative marketing & sponsorship platforms

Strong global innovation capabilities

Global reach with strong access to growth markets Highly diversified emerging markets exposure

Relentlessly driving cost efficiencies On-track to achieve TCM2 targeted cost savings by end-2014

Expanding scope under Global Business Services

Focused on delivering future value-enhancing growth

deutsche bank global consumer conference 18 june …€¦ · deutsche bank global consumer...

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