INVESTOR PRESENTATION - Last Updated: June 2021 - The HEINEKEN Company
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
INVESTOR PRESENTATION
Last Updated: June 2021
1
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, developments in the ongoing COVID-19 pandemic and related government measures, 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 exchange-rate fluctuations, changes in tax rates, changes
in law, change 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 of the date of this presentation.
HEINEKEN does not undertake any obligation to update these forward-looking statements contained in this presentation. Market
share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination
with management estimates.
2
Contents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
3
Investment case: HEINEKEN - The Most International Brewer
We bring ‘enjoyment of life’ to our customers all over the world by brewing high quality beers and building globally loved brands aimed at
responsible and sustainable long term value creation for all our stakeholders
HEINEKEN balanced growth algorithm
• CONSUMERS and CUSTOMERS at its core
• Progressing towards a NET
ZERO, HEALTHIER and FAIRER
• Proud >150 YEAR OLD heritage as a
WORLD
family owned, independent brewer Superior growth
• Strong TRACK RECORD delivering
• DISCIPLINED
ENTREPRENEURIAL spirit with
balanced and superior GROWTH Deliver SUPERIOR TOP-
a decentralized Opco model
LINE GROWTH
Raise the bar on
Our unique strengths & Sustainability & Long-term value creation Gear for OPERATING
opportunities Accelerated Responsibility LEVERAGE beyond
investments and People Continuous
& sharper strategy productivity
• ACCELERATE INVESTMENTS, resource improvements • Initial €2bn GROSS COST SUSTAIN HEALTHY
including MARKETING and allocation SAVING programme DIVIDEND PAY-OUT of
DIGITALISATION 30-40% of Net Profit
• COST-CONSCIOUS culture
• DISCIPLINED use of capital (beia)
4
"In a year of unprecedented disruption and transition, our teams rose to the
occasion and quickly adapted while not losing sight of the need to continue
At a Glance1 investing for the future. The impact of the pandemic on our business was
amplified by our on-trade and geographic exposure. We took diligent cost
mitigation actions balanced with continued investment behind our growth
platforms. We gained share in most of our key operations, a testimony to our
52.5 #1 #2
ability to adapt and stay close to our customers and consumers in these
turbulent times. The Heineken® brand was a bright star, with a continued
outstanding performance in Brazil. I applaud the dedication and resilience of our
Market Cap Brewer in Europe Brewer Globally
(€bn) employees and their commitment to support each other, our customers and
communities over the past year.
While navigating the crisis, we are building our future. EverGreen leverages both
>190 >160 >300 our strengths and new opportunities to chart our next chapter of growth. We
aspire to deliver superior and profitable growth in a fast changing world. Firmly
Countries in which International and putting customers and consumers at the core we aim to continually enhance
our brands are Breweries local beer & cider and expand our portfolio and footprint. We are stepping up our focus on
present brands continuous productivity improvements and raising our environmental and social
sustainability ambitions. All of this gives us confidence that we will continue to
deliver long-term value for all our stakeholders."
222 Most trusted >80,000
Total Beer Volumes international beer Direct Employees FY2020 Results
brand Dolf van den Brink
Chairman Executive Board / CEO
1. All info refers to FY2020 results. For Market Cap, it refers to status at 31 Dec 2020.
5
Track record of delivering superior
growth
Revenue OG
avg 2015-20191
HEINEKEN 5.0%
+3.1%
Beer Volume OG (avg 2015-2019)
Other brewers 3.9%
Spirits 3.9%
+5.0%
Net Revenue OG (avg 2015-2019)
Food 3.3%
+7.3%
Soft Drinks 2.6%
Operating Profit OG (avg 2015-2019)
1. Other brewers (ABI, CARLB, STZ & TAP); Spirits (DGE, CPR, RCO & RI); Food (NESN, BN & ULVR); Soft Drinks (CCH, CCEP &
BVIC). Organic revenue growth as reported by corporates in each year
6
Consolidated Beer Volumes (mhl)1
Diversified global footprint geared for growth
18%
34%
241 mhl
Operating Companies 36%
13%
Joint Ventures / Associates
Licences
Export
Operating Profit (beia; €m) 1
10%
35%
€4,020m 29%
Significant deals
26%
AMEE Americas APAC Europe
7
1. Data refers to FY2019 results & excludes Head-Office and eliminations.
Heineken®: The most trusted international beer
brand
KEY FACTS
Heineken® volume in 2020 # markets in which
-0.4% >190 Heineken® is sold as the
most international beer
brand
Heineken® volumes as %
Heineken® Silver more than
doubled its volume in Vietnam c.20% of total volumes
and was launched in China
# markets where
12 Heineken® >1mhl
Heineken® 0.0 grew double-
# markets where
digits and was launched in 27
new markets in 2020
94 Heineken® 0.0 is
available
For more information: Our Heineken® Brand 8
Winning portfolio and strong track record in
building new categories
KEY FACTS
>300 Brands
>40% Revenues from PREMIUM
LONO volumes as % of
total volumes winning in
c.6% traditional soft drink
occasions
CIDER as % of total
volumes offering an
Top premium beer portfolio
c.2% opportunity to leverage
existing assets appealing
Versatile international and domestic portfolios to successfully
compete in a wide range of consumer occasions to additional consumers
For more information: Our Brands 9
Contents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
10HEINEKEN EverGreen growth algorithm
Superior growth
Our unique strengths Raise the bar on
Long-term value creation
& opportunities Accelerated Sustainability &
Continuous
investments Responsibility and
productivity
& sharper People strategy
improvements
resource
allocation
11HEINEKEN is first and foremost a growth company
Our 5 pillar growth strategy has consumers and customers at its core
Footprint Portfolio Route to consumer Commercial execution Resource allocation
Strengthen and Focus and expand Shape and Scale execution Drive intentional
optimise our our portfolio to strengthen our route excellence through resource allocation
footprint to maintain better serve to consumer digitally commercial towards growth
a growth advantage consumers capability building
12Strengthen and optimise our global footprint to
maintain our growth advantage
Strengthen our #1 and #2
positions
2019 Colombia
2016 Philippines Greenfield expansion into new
growth markets
2019 Ecuador
2014 Ethiopia
2015 Myanmar Resolve value dilutive
2020 Peru operations
2016 Ivory Coast
2017 Mozambique
2021 Australia
Markets with #1 or #2 positions HEINEKEN and JV partners Other markets White spaces Greenfield / acquisition market entry
13Amplify our strong premium position
Heineken® International brands Local premium champions
Win value share, everywhere Scale and replicate success Fewer, bigger bets
14Global market leader in 0.0
Make 0.0%
Make 0.0% beer
beeravailable
available everywhere, Significant 0.0
everywhere, always
always opportunity
Scale Heineken® 0.0 leadership 5.2x
Extend 0.0 options across entire portfolio Non-alcoholic beer long term volume growth
potential1
1. Assumes closing the penetration gap vs. the benchmark; for FAB the US market is used
as benchmark, for Low Alcohol Spain and for underserved segments gaps in
consumption looking at gender, age and affluency
15Expand our portfolio and innovate
to better serve consumers
Significant opportunity
Expand beer to new Move beyond beer to serve Blurring New consumer
consumer needs & occasions consumers better beverage landscape segments & occasions
Women, affluent, older and
young generation
Expand leadership in Cider
Step-up to meet the
Speed up to take above fair
5.5x 1.2x
growing demand for easy Flavoured alcoholic Penetration uplift
share in Hard Seltzers
to drink and refreshing beer beverages volume potential in the medium
globally
growth potential1 / long term1
1. Assumes closing the penetration gap vs. the benchmark; for FAB the US market is used
as benchmark, for Low Alcohol Spain and for underserved segments gaps in
consumption looking at gender, age and affluency
16Become the best-connected brewer
Strengthening our Route to Consumer, digitally enabled
1 Digitally connect all our customers via
Distributors / Wholesalers Channels Consumers
B2B, with €10Bn revenue in 2025 (2020:
>€1bn)
1 2
2 Full sales force digitally empowered
by 2023
Digitally Modern Trade eRetail
B2B
Empowered
platforms
1 Salesforce 3 Shaping our “Connected Bar” strategy,
Distributor / which includes ePOS deployments in
B2B 3
Wholesalers Fragmented Connected key markets
Trade Bar
4 4 Invest selectively in D2C, with focus
D2C on Beerwulf, SIX to Go and Drinkies
5
5 Touch all consumers with Individual
iDDM
Data Driven Marketing
17We see a path to continuous productivity
improvements
Building one company-wide productivity management system Starting with €2bn in
gross savings initiatives
Digitalisation
Mitigating cumulative inflation
Organisational and transactional FX
Process redesign
standardisation Productivity initiative funnel
Re-investing in growth:
Footprint
Restoring Marketing & Sales
optimisation spend levels
Front-loading investments in
Continuous renewal of global and local initiative funnel Digital & Technology
Embedded in performance management
Gearing for operating leverage
Cross-OpCo learning and benchmarking when top-line recovers
18Three key productivity areas to deliver the €2bn gross savings
Three year programme: implemented over 2021-2023
Organisational redesign COGS efficiency Commercial effectiveness
~8,000 FTE impacted Complexity reduction (SKUs) Digital-enabled sales excellence
direct personnel
€350m cost savings1
Conversion excellence Media ROI
€420m restructuring costs2 Logistics optimisation Non-consumer facing spend
Total cost to achieve: ~€500m OPEX and ~€400m CAPEX
1. Excluding savings on other fixed costs (e.g. travel, infrastructure)
2. In 2020 restructuring costs amounted to €331 million, mainly related to this programme
19Accelerate our investments and make them work harder
Marketing & Sales Digital & Technology
Restore 2019 spend % by 2023 Front-load investments to accelerate
Fully reinvest commercial productivity gains transformation & build a future-proof HEINEKEN
New consumer propositions & occasions Digital core & backbone
Fewer, bigger brands Advanced analytics & BI
Growing customers and channels Digital route to consumer
20Sharper and more deliberate marketing and sales
spend allocation
Optimise spend within OpCos Focus spend between OpCos
Europe example APAC example1
~25
BRANDS SELECTED +90bps
focusing on premium QUICK RECOVERY markets,
2021 vs 2020
Up to 4x
INCREMENTAL
marketing spend in each -110bps
DELAYED RECOVERY markets,
60 2021 vs 2020
DEPRIORITIZED BRANDS
1. Marketing & sales spend as % of revenue
21Disciplined use of capital 1 Improve operating capital efficiency and cash flow conversion 2 Rigorous financial discipline towards investments 3 Committed to Net Debt to EBITDA ratio
Sustainability & Responsibility focus areas in the next decade
Raising the bar with newly launched Brew a Better World 2030 ambitions
Environmental sustainability Social sustainability Responsible consumption
Carbon Inclusion & Diversity Always a Choice
Water Fairness & Safety Address Harmful Use
Circularity Community Make Moderation Cool
23Raise the bar on our people strategy
Strengthen culture Boost capability building Enhance OpCo centric model
High speed and agility Inclusion & diversity Disciplined entrepreneurship
Consumer & external orientation Strong local talent pipeline Common ways of working
Cost conscious culture Foundational & spiky capabilities Cross-silo learning culture
24Recover operating margin by 2023 and gear for operating leverage beyond
INDICATIVE
Commercial productivity Commercial productivity
savings reinvestments
Margin
16.8% recovery
to +/-17%
12.3%
Operating Margin Operating Topline Growth Cumulative Productivity Reinvestments Operating Margin
2019 Margin 2020 inflation Savings1 2023
COVID recovery Includes transactional €2bn gross savings Restore Marketing &
FX Sales spend levels
Gradual on-trade
recovery Reversal cost Front-load D&T
mitigations 2020 investments
Accelerated
premiumisation
1. Excludes 2020 cost mitigations
25Phasing
2020-2021H1 2021H2 - 2023 2024 and beyond
Mitigate Recover & Build Grow & Expand
Growth Pandemic revenue impact Post pandemic top-line recovery Superior growth
Productivity Short-term mitigation €2bn productivity programme Operating leverage
Cost-conscious culture
Investments Reduce all discretionary spend Restore M&S spend levels Scale brand investment
Selective capex investments Frontload D&T investment Leverage D&T investment
S&R and Health & safety focus Launch next level S&R programme S&R delivery
People New team Build spiky capabilities Networked organisation
26Our renewed approach to long-term value creation and goals
Deliver SUPERIOR
TOP-LINE GROWTH
ACCELERATED INVESTMENT to meet
fast-changing consumer and customer needs Growth STEP UP capital efficiency
Net debt / EBITDA ratioContents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
28Brew a Better World 2030
Path to
zero impact
Path to an inclusive,
fair and equitable world
Path to moderation and
no harmful useENVIRONMENTAL
Base year 2021 2023 2025 2030 2040
Reach 2019 • Net zero emissions in • Carbon neutral
• Total carbon emissions production across the value
carbon across value chain: chain(1)
• 30% reduction in
neutrality 19.8 CO2-e MT
emissions across the
69.9 CO2-e kg/hl
value chain(1)
2020
• 100% sustainable
• 58% agricultural raw
ingredients
materials from sustainable
(barley & hops)
sources, 62% for barley
Maximise 2020 • Develop a dedicated • Eliminate sending
• 118 of our 166 sites strategy and related waste to landfills
circularity were waste to landfill targets to turn waste across all
free into value and close production sites
material loops
• 98% of our total throughout our value
waste was reused or chain
recycled
Towards 2018 • 100% treatment of • Fully balance water
• 3.2 hl/hl average wastewater of all used in our products
healthy water intake in breweries in water-stressed areas
watersheds water-stressed areas
• Maximise reuse and
(2020: 3.1 hl/hl)
recycling in water
stressed areas
• 3.5 hl/hl average
(1) Scope 1, 2 and 3 water intake • Reduce average water
worldwide intake to 2.6 hl/hl in
(2020: 3.4 hl/hl) water-stressed areas
and 2.9 hl/hl worldwideSOCIAL
2020 (Base year) 2023 2025 2030
Embrace • 23% women represented • At least 65% of country • 30% women represented • 40% women represented
inclusion & diversity in senior management leadership teams to be in senior management in senior management
regional nationals
• 100% of management
trained in inclusive
leadership
A fair & safe • New metrics currently • Close any gaps on fair
under development wages for employees
workplace
• Equal pay for equal work
assessments and actions done
Continuous:
• Create leadership capacity to drive zero fatal accidents and serious injuries
• Fair living and working standards for 3rd party employees and brand promoters
Positive impact in • 45% of agricultural raw • In Africa, increase local
materials used in Africa sourcing of agricultural
our communities
were regionally sourced ingredients volumes by
50% (vs 2020)
Every year:
• A social impact initiative in 100% of our marketsRESPONSIBLE
2020 (Base year) 2023 2030
Always a choice • Heineken® 0.0 available in 84 • A zero alcohol option for 2
markets; over 130 non-alcoholic strategic brands in majority of our
line extensions of brands available markets (accounting for 90% of
our business)
• 89% of products included
information on ingredients, • 100% of products to include clear
nutrition, alcohol content and and transparent consumer
allergens information
Address harmful use • 65% in scope markets(1) Continuous:
• 100% of markets in scope(1) have a partnership to address alcohol-
related harm
Make moderation cool • 55% of the 84 markets in scope(2) Every year:
invested at least 10% of • 10% of Heineken® media spend invested in responsible consumption
Heineken® media spend campaigns, reaching 1 billion consumers
(1) Markets where we consider our business to have an opportunity to make a positive difference
in reducing harmful use of alcohol in partnership with other stakeholders (2020: 37 markets in scope)
(2) Every market where we sell and advertise Heineken®More information on Brew a Better World
Brew a Better World
Strategy
Our Policies relating to Brew a Better World
Upholding our values means being crystal clear about how we do business and how we conduct ourselves as
individuals. Our Code of Business Conduct and its underlying policies are at the heart of Brewing a Better
World.
For more information: Our Policies
Our Ratings & Benchmarks Whats Brewing Seminar:
Our commitment is to create genuine shared value and improve transparency. We are constantly increasing
the quality and quantity of our data for stakeholders. This includes benchmarking our performance against Raise the Bar 2030
other companies and openly sharing our results.
For more information: Ratings & Benchmarks
Our Brew a Better World Reporting Centre
For latest progress and reports, including the GRI reference table and Environmental Data Table.
For more information: Reporting Centre
To listen to our panel discussion hosted on 11
May 2021: Panel Discussion
34Contents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
35Latest Results Announcement
2021 Q1 Organic Growth %
Africa, Middle
East & Eastern
Heineken NV Europe Americas Asia Pacific Europe
Consolidated beer volume 0.0 9.9 0.8 5.4 -9.7
Heineken volume 12.1 22.4 17.5 21.8 -4.6
Key Highlights Dolf van den Brink, CEO:
• Beer volume stable organically “We had a solid start to the year, despite facing severe restrictions across many
markets and the closure of the on-trade in Europe due to the pandemic. Overall
• Heineken® volume growth accelerated +12.1% beer volume was in line with last year, with strong growth in Africa, Middle East &
Eastern Europe and Asia Pacific and modest growth in the Americas. The
• Premium volume outperformed growing in the low-teens Heineken® brand had a stellar performance, up 12.1%, with double-digit growth
in more than 40 countries. I am proud of our employees' relentless resilience and
• Deployment of EverGreen growth strategy on track agility in responding to the ongoing volatility. We are making great strides in the
deployment of our EverGreen growth strategy on all fronts. Most recently, we
announced our ambition to become carbon neutral by 2040.”
For more information: Q1 2021 Trading UpdateLatest Financial Overview – FY 2020
Key Financials Total Organic
€m unless otherwise stated FY 2020 Growth Growth
Revenue 23,770 -16.7%
Net revenue (beia) 19,724 -11.9%
Operating profit (beia) 2,421 -35.6%
Operating profit (beia) margin 12.3% -455 bps
Net profit (beia) 1,154 -49.4%
Net loss -204 -109.4%
Diluted EPS (beia) in € 2.00 -54.3%
Free operating cash flow 1,513
Net Debt/EBITDA (beia) ratio 3.4x
For more information: FY20 Results Press Release
37Consolidated Beer Volumes Organic Growth %
11.8%
8.9%
8.2%
5.0% 5.4%
4.8% 4.6%
4.2%
3.0% 3.1% 3.3%
2.6%
1.3%
0.2%
-0.2%
-7.5% -7.9%
-8.1% -8.2%
-9.2%
Group AMEE Americas APAC Europe
2017 2018 2019 2020
38Net Revenue Organic Growth %
13.5%
11.1% 10.9%
8.9% 8.3%
7.5%
6.1% 5.6% 6.0% 6.2% 5.8%
5.0%
3.0%
1.4% 2.0%
-2.9%
-9.5%
-11.9% -11.5%
-18.8%
Group AMEE Americas APAC Europe
2017 2018 2019 2020
39Operating Profit (beia) Organic Growth %
33.8%
16.2%
11.7% 12.1%
9.3% 4.6% 9.5% 7.7%
6.4% 3.4%
3.9% 4.6% 4.2%
-0.2% -0.8%
-4.8%
-16.4%
-35.6% -33.8%
-68.6%
Group AMEE Americas APAC Europe
2017 2018 2019 2020
40Operating Margin development
33.8%
32.9%32.3%
32.0%
18.8%
17.4%16.9%16.8%
16.5%16.2%16.5%
13.5% 13.7%14.0%13.5%
12.3% 12.8%
12.1%
9.5%
5.2%
Group AMEE Americas APAC Europe
2017 2018 2019 2020
41
2017 restated for IFRS15 and 2018 restated for IAS37Diluted EPS (beia)
4.38 €
4.25 €
3.94 €
3.57 € 3.68 €
2.00 €
2015 2016 2017 2018 2019 2020
42Dividend per share and pay-out ratio
Dividend Policy
1.68 € 40%
1.60 €
Dividend pay-out ratio of 30%-40%
1.47 €
35% of net profit before exceptional
1.34 €
1.30 € items and amortisation of brands
30%
(net profit beia).
25%
Dividends are paid as an interim
20% dividend and a final dividend. The
0.70 €
15% interim dividend is fixed at 40% of
the total dividend of the previous
10% year.
5%
Annual dividend proposals will
0% remain subject to shareholder
2015 2016 2017 2018 2019 2020 approval.
Pay-Out ratio
43
DPSFor 2021, we expect
Pandemic to continue to impact first half of 2021
Conditions to gradually improve in second half 2021
Product & channel mix to continue to adversely impact results
A higher negative transactional currency impact on input costs
Revenue, operating profits and margin to stay below 2019 level
44Contents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
45Committed to long term target
Overview of financial debt position
Total Interest Bearing Debt1 of €18.2bn Funding Sources
Euro Medium Term Note program of €20 billion listed on Luxembourg stock exchange
USD 4 billion of outstanding 144a notes issued in the US debt capital markets
Group Revolving Credit Facility of €3.5 billion (currently undrawn) committed by 19 banks maturing in 2024
Euro Commercial Paper program of €2 billion with a Short Term European Paper (STEP) label
1 Reflects the impact of the change in accounting policy on netting of cash and overdraft balances in cash pooling arrangements. The amount subject to legal offset rights, but not netted in the statement of financial
position is € 235m. If netted, Gross debt would amount to € 17,961m. Taking the cash balances into account as well, the net debt amounts to € 14,210m as per 31 Dec 2020.
47A well balanced bond maturity profile
Optimise debt repayments via well balanced maturity profile
As at 31 December 2020 (in €m) incl. the currency effect of cross-currency interest rate swaps
In 2020, the following notes were issued under Euro Medium Term Note program:
On 20 March 2020, CHF100 million of privately placed 5-year Notes with a coupon of 0.6375%
On 30 March 2020, €600 million of 5-year Notes with a coupon of 1.625%
On 30 March 2020, €800 million of 10-year Notes with a coupon of 2.25%
On 7 May 2020, €650 million of 13-year Notes with a coupon of 1.25%
On 7 May 2020, €850 million of 20-year Notes with a coupon of 1.75%
From time to time HEINEKEN may repurchase notes maturing within 12 months for cash management purposes
48Conservative risk management policy
In both currencies and interest rates
Currency split of Net Debt (per 31 Dec 2020)
HEINEKEN hedges up to 90% of its net US dollar cash flows
7% on the basis of rolling forecasts, for a period of up to 18
months
11%
Approximately 100% of average net debt is at fixed rates as
per 31 December 2020 on the high end of the policy of
“≥75% of interest on net debt is fixed”
18%
The Group aims to match the currency split of net debt with
64% the currency split of the EBITDA (beia) in order to match
cash flows for certain currencies
USD debts also aim to match EBITDA in currencies that are
proxies of USD
* Includes CCIRS deals associated with the relevant debt amounts and includes IFRS 16 lease liabilities
49Solid Investment Grade Ratings
Rated by Moody’s and S&P since 2012
Baa1 / stable outlook (17 July 2020) BBB+ / negative outlook (27 April 2020)
“The rating takes into account the strong business profile and “The negative outlook reflects significant pressure on 2020
the resilient fundamentals of the beverage industry in times of operating performance due to the COVID-19 pandemic and the
economic stress. Credit metrics will weaken temporarily, recover risk that the situation does not improve in 2021 once social
in 2021, but only return within the Baa1 thresholds by 2022 distancing measures are relaxed
Leading brewery company with broad geographical Lockdowns, social distancing, and the imminent economic
diversification with a strong product portfolio and a higher recession are reducing beer consumption. We therefore foresee a
contribution from the premium segment significant fall in Heineken's revenue and EBITDA in 2020
Presence in emerging markets allows for higher-than-average Credit metrics will likely deteriorate significantly in 2020 but at this
growth rates in both volume and sales, while such also leaves stage we assume a rebound in 2021
the company exposed to more volatile market conditions and
less predictable regulatory environments The company has been prudently managing risk to maintain
adequate liquidity with prefinancing of debt maturities, the
Excellent liquidity with available cash balances and a sizeable absence of maintenance covenants on any credit facilities, and
committed revolving credit facility of €3.5 billion and does not easy access to capital markets.”
contain financial covenants”
50Contents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
51HEINEKEN Group
70+
Countries
Consolidated Beer Net Revenue Operating Profit (beia)
Volumes (mhl) (€m) €m 160+
Breweries
18% 14% 10%
300+
34% 35%
Brands
43%
241 23,894 4,020 29%
30% >80,000
Direct Employees
35%
13%
13% 26%
54%
Group Operating Profit
from
developing markets
AMEE Americas APAC Europe
Source: 2019 Results
Regional Exposure per metric excludes effect of Head-Office & Eliminations
52Limited reliance on individual markets
100%
>50
• Only two countries >10% of profits; Mexico &
~80% Vietnam
• Diversified mix of countries:
• Established markets with steady improvements
11 ~50% • Developing markets at different stages of growth
• Large collection of small markets with growth
potential
~30%
4
2
# markets % share of Operating
Profit (beia)
Source: 2019 Results
53AMEE Region % Contribution to Group in
2019
Total Consolidated Vol (mhl) Net Revenue Beia (€m)
49.9 3,370
45.7 47.9 45.4 3,031 3,051 10%
2,782
18% 14%
Operating
Beer Volume Net Revenue
Profit
Key Markets
2017 2018 2019 2020 2017 2018 2019 2020
# market position
Operating Profit Beia (€m) Operating Margin Beia (%) Nigeria #1
411 408 Russia #3
388
12.8% 13.5% South Africa #2
12.1%
264 9.5% Ethiopia #2
Egypt #1
DRC #1
Mozambique #2
Ivory Coast #2
2017 2018 2019 2020 2017 2018 2019 2020
54
2017 restated for IFRS15AMEE Region – FY2020
“Despite the many challenges of
Net Revenue (beia) OG Operating Profit (beia) OG 2020, the long term future for the
region remains bright. We believe in
-9.5% -33.8% the dynamism, resilience and
entrepreneurial spirit of the Africa,
Price Mix on constant geographic Middle East and Eastern Europe
Beer Volume OG
basis region and are committed as a long
-9.2% +2.2%
term partner for recovery and
growth.”
Strong recovery in NIGERIA in second half, growing volume FY and winning Roland Pirmez
market share. Double-digit growth in premium, led by Heineken® and Tiger President, Africa, Middle East and
Eastern Europe
SOUTH AFRICA strong momentum disrupted by alcohol bans and capacity
constraints. Heineken® 0.0 grew double-digits
PREMIUM PORTFOLIO outperformed broader portfolio in most key markets
like Nigeria, Ethiopia, Russia, the DRC, Ivory Coast, Burundi and Mozambique
55Nigerian Breweries
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 attractive given its high growth
potential and an improving
International premium macroeconomic environment
FY2020:
Kudenda Malting Plant
National premium
• Beer volume recovered strongly in
Kudenda Kakuri the second half of the year delivering
low-single digit growth for the full
ibada
n
Makurdi
Mainstream year, ahead of the market.
Ota Onitsh
a Ama
• The premium portfolio grew double-
Lagos
Aba Malting Plant
digits, led by Heineken® and Tiger.
Discount
Ljebu-
Ode Aba
Desperados was launched at the end
of the year.
Awo-
Omamma • Our low- and non-alcoholic portfolio
grew by a mid-single-digit, with
Source: Global data, Company data
strong growth from Maltina including
the launch of two new flavours.
For more information: https://nbplc.com/ 56Americas Region % Contribution to Group in
2019
Total Consolidated Vol (mhl) Net Revenue Beia (€m)
94.7
29%
93.6 7,429
86.0 6,781
35% 30%
79.0 6,307 6,319
Operating
Beer Volume Net Revenue
Profit
Key Markets
2017 2018 2019 2020 2017 2018 2019 2020
Operating Profit Beia (€m) Operating Margin Beia (%)
1,188 1,204 18.8% 16.5% 16.2%
1,118 1,045 16.5%
2017 2018 2019 2020 2017 2018 2019 2020
57
2017 restated for IFRS15 and 2018 restated for IAS37Americas Region – FY2020
“Our people have shown great
Net Revenue (beia) OG Operating Profit (beia) OG resilience throughout the crisis,
and together we have delivered
-2.9% -4.8% strong growth in premium beer
led by Heineken®, launched
Price Mix on constant geographic successful innovations, and with
Beer Volume OG
basis significant cost mitigations
-7.5% +6.8%
continued our profitable growth.”
Marc Busain
MEXICO government restrictions and dry laws eased in second half. Strong President Americas
price mix c. 2x inflation. Amstel Ultra, Heineken® 0.0 and cider grew strongly
BRAZIL volume flat while hitting maximum capacity in Q4. Rev per hl growth in
the low teens. Premium and mainstream grew double-digits, now 50% of the
beer portfolio led by Heineken® with >40% growth
USA impacted by supply disruptions and on-premise closures. Heineken® grew
low single-digit, the best performance in a decade. Heineken® 0.0 is #1 in
non-alcohol
58HEINEKEN Mexico
Key Facts Comprehensive portfolio
7 Breweries • HEINEKEN’s largest beer operation with
positive underlying market fundamentals,
#2 Position Segment Core brands
including population growth, urbanisation,
growing middle class, etc
Premium
• Premium presents significant opportunity,
currently accounting for only c.5% of total
beer market.
• Building a cider category growing double
Affordable-Premium digits in FY2020
• Pure Piraña is the first nationwide seltzer
brand available across all channels,
Mainstream
complemented by Amstel Ultra Seltzer,
launched in January 2021.
FY2020:
• Meoqui brewery, the largest greenfield in Below Mainstream • Beer volume declined in the mid-teens as our
operations were suspended for most of the
HEINEKEN’s history, opened in February second quarter and faced operating
2018 restrictions the rest of the year.
Value
• Net revenue per hectolitre (beia) close to
twice the inflation rate.
Source: Global data, Company data
59HEINEKEN Brazil
Key Facts Strong portfolio
15 breweries; c.20% Market share; • Heineken® is most loved brand in Brazil
#2 Position in market Segment Core brands • Focused on growing mainstream and
premium portfolios (especially in the
North/North East), whilst value brands
Premium and provide increased scale to further develop
premium
Super Premium
• February 2021, HEINEKEN, The Coca-Cola
Company and the Coca-Cola System in Brazil
announced the redesign of their long-
Upper Mainstream standing distribution partnership.
& Mainstream FY2020:
• Beer volume was flat, as we reached
maximum capacity in the last quarter of the
Lower Mainstream year and led the market with two price
São Paulo HQ
& Value increases.
• Premium and mainstream portfolios grew
• Ponta Grossa brewery expansion expected to double-digits and now represent 50% of our
be completed in Q3/Q4 2021. total beer portfolio. Heineken® grew in the
forties and. Heineken® 0.0 was successfully
• Announced intention to build its first brewery launched in July 2021 and is already the
in the state of Minas Gerais. Source: Global data, Company data third largest market globally for Heineken®
0.0.
60HEINEKEN USA
Key Facts Strong portfolio
9 Distribution Centres • USA is largely an import market for
8 Offices Segment Core brands HEINEKEN
#2 Premium Position FY2020:
• Beer volume declined by a mid-
single-digit, impacted by supply
Premium &
disruptions from Mexico and on-
Super Premium trade closures.
White Plains HQ
• Heineken® delivered its best
performance in >10 years growing by
a low-single-digit. The growth came
from both Original and the strong
Mainstream performance of 0.0, now the number
one non-alcoholic brand in the
market.
• Together with AriZona launched
AriZona SunRise Hard Seltzer in
2021. Testing other seltzers
innovations in selected states.
Source: Global data, Company data- 2018
61APAC Region % Contribution to Group in
2019
Total Consolidated Vol (mhl) Net Revenue Beia (€m)
29.7 31.8
28.7 2,928 2,919
3,205
26%
27.6 2,707
13% 13%
Operating
Beer Volume Net Revenue
Profit
Key Markets
2017 2018 2019 2020 2017 2018 2019 2020
# market position
Operating Profit Beia (€m) Operating Margin Beia (%) Vietnam #1
1,085 Cambodia #1
943 32.3% 33.8%
962 32.9% 32.0%
867 Malaysia #1
Indonesia #1
2017 2018 2019 2020 2017 2018 2019 2020
62
2017 restated for IFRS15APAC Region – FY2020
“A challenging 2020 accelerated
Net Revenue (beia) OG Operating Profit (beia) OG our transformation into a more
adaptable and agile business.
-11.5% -16.4% Whilst countries will recover at
different speeds, this gives us
Price Mix on constant geographic renewed confidence in our long-
Beer Volume OG
basis term growth strategy in a region
-7.9% -2.4%
that continues to be the world’s
growth engine.”
VIETNAM volume was stable, significantly outperforming the market and Jacco van der Linden
confirming our market leadership. Mainstream grew double-digits with Larue President Asia Pacific
and Bia Viet. Heineken® Silver doubled its volume.
CHINA strong double-digit Heineken® growth. Now in the top five markets
for the brand globally
INDONESIA heavily impacted by absence of tourism and on-trade
restrictions. Outperformed the market in all regions, except Bali
63HEINEKEN Vietnam
Key Facts Strong portfolio
• Market leadership in a very
6 Breweries favourable beer market and
#2 Position Segment Core brands opportunity to further expand into
#1 position in premium segment rural areas and the North
FY2020:
• Beer volume was stable, significantly
Premium outperforming the market which
declined double-digits.
• In mainstream, Larue grew double-
digits and we launched Bia Viet, a
national mainstream.
• In premium, Tiger declined high-
single digits, outperforming the
Mainstream & Economy market.
• Heineken® Silver more than doubled
its volume and Heineken® 0.0 was
launched at the start of the year.
Source: Global data, Company data
64United Breweries Limited
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
• Strict regulations on the
production, transportation,
Super Premium distribution, promotion, pricing
and sale of alcohol; albeit positive
trajectory on taxing of beer vs
spirits
21 breweries
Premium and Premium Plus
• UBL has the leading beer brand
12 contract breweries with Kingfisher (UBL market share
48%)
Value
Source: World Bank population estimates, Global data, Company data
PCC: Per Capita Consumption
65China Resources Beer Holdings
Key Facts Strategic collaboration
70 Breweries • HEINEKEN’s stake in CR Beer 20.6%
Present in 25 out of 34 regions in • PCC c.30l, with signficant growth potential
China (predominantly in Premium)
#1 Market position
• Snow, No. 1 beer brand by volume in the
world
• Market leader with MS ~ 23%
• Best-in-class, nationwide distribution
network
• Started distribution of Heineken® in May
2019, launched Amstel as premium in
December 2020
Source: Global data, Company data- 2018
66Europe Region % Contribution to Group in
2019
Total Consolidated Vol (mhl) Net Revenue Beia (€m)
97.4 98.6 99.7 10,014 10,348 10,629
35%
88.8 8,631
34% 43%
Operating
Beer Volume Net Revenue
Profit
Key Markets
2017 2018 2019 2020 2017 2018 2019 2020
# market position
Operating Profit Beia (€m) Operating Margin Beia (%) United Kingdom #1
France #1
1,451 1,436 14.0% 13.5%
1,371 13.7%
Spain #2
447 5.2% Italy #1
Poland #2
Netherlands #1
2017 2018 2019 2020 2017 2018 2019 2020
67
2017 restated for IFRS15Europe Region – FY2020
“The health and safety of our
Net Revenue (beia) OG Operating Profit (beia) OG people and partners was the first
priority. This focus allowed us to
-18.8% -68.6% ensure business continuity.
With the implementation of strong
Price Mix on constant geographic plans, we were able to gain
Beer Volume OG
basis value share in most markets.”
-8.2% -5.4% Soren Hagh
President Europe
High exposure to ON-TRADE heavily impacted results, particularly in Q2
and Q4
OFF-TRADE continued to grow, driven by premium with strong performance
of Desperados, Birra Moretti and Sol. Outperformed the market in UK, Italy,
France, Spain, Poland and the Netherlands
NON-ALCOHOL portfolio outperformed the market led by Heineken® 0.0,
strengthening our leadership in the segment
68Wholesale strategically important in selected markets
Key Facts Business model
Wholesale operations focused on on-
Off Trade
trade service and particularly draught
Providing synergies with commercial Brewery
brewing operations:
Higher proximity to customer On Trade
Better access to broad range of data
Reliable and secure access to markets
Consumer touchpoints
Cash & HNV 3rd party
Carry Wholesale Wholesale
Outlets
69Star Pubs & Bars
A highly successful & profitable Strategically important
business model to the UK business
>2,500 leased and tenanted pubs since Punch
Hands-on experience & understanding of the On Trade
acquisition
with a wide UK footprint Unique consumer touchpoints
Star Pubs & Bars strong investment & performance Synergies with on trade brewing operations
track-record Unique platform for seeding innovations
Attractive returns – Margin, Cashflow & RONA
Operating profit margin
(2019)
UK Avg. Beer & Cider Pubs 70Contents
Group Overview Our Strategy - EverGreen Supporting Information
Brew a Better World Targets,
Strategy & Progress
Latest Results & Outlook
Leverage & Financial Policy
Our Markets
Governance, Ownership &
Shareholder Information
71Renewed Executive Team
Dolf van den Brink Harold van den Broek
Chief Executive Officer & Chief Financial Officer &
Chairman of the Executive Board Member of the Executive Board
ET member since: April 2018 ET member since: June 2021
Years in company: 23 Years in company: -
Marc Busain Roland Pirmez James Thompson
President Americas President AMEE Chief Commercial Officer
ET member since: July 2015 ET member since: July 2015 ET member from: March 2021
Years in company: 25 Years in company: 26 Years in company: -
Stacey Tank
Søren Hagh Magne Setnes
Chief Corporate Affairs &
President Europe Chief Supply Chain Officer
Transformation Officer
ET member since: June 2020 ET member since: May 2020
ET member since: June 2020
Years in company: 7 Years in company: 20
Years in company: 41
Jacco van der Linden Yolanda Talamo Ronald den Elzen
President Asia Pacific Chief People Officer Chief Digital & Technology Officer
ET member since: June 2020 ET member since: January 2021 ET member since: March 2020
Years in company: 21 Years in company: 4 Years in company: 26
1. Previous experience in HEINEKEN 2012-2015
72Ownership 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
Executive board
73Sponsored 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: Deutsche Bank Shareholder Services
c/o American Stock Transfer & Trust Company
ADR broker helpline:
+1 866 249 2593
E-mail: db@amstock.com
ADR website: www.astfinancial.com
Depositary Bank’s local custodian: Deutsche Bank, Amsterdam
74Contact Us
E-mail: investors@heineken.com
Tel: +31-20-5239590
Federico Castillo Janine Ackermann
Investor Relations Director Investor Relations Manager
Robin Achten Mirjam Koersen
Investor Relations Analyst Investor Relations Specialist
75You can also read
