Amsterdam, 29 July 2019 – Heineken N.V. (EURONEXT:
HEIA; OTCQX: HEINY) announces:
- Net revenue (beia) organic growth +5.6%; net revenue (beia) per
hectolitre +3.0%
- Consolidated beer volume +3.1%
- Heineken® volume +6.9%
- Operating profit (beia) organic growth +0.3%, full year
expectation unchanged
- Operating profit (beia) margin 15.6% (-47 bps)1
- Net profit (beia) €1,054 million, -1.2% organically
- Diluted EPS (beia) €1.84 (2018 restated: €1.86)1.
CEO STATEMENT
Jean-François van Boxmeer, Chairman of the Executive Board /
CEO, commented:
"Top-line performance was again strong in the first half of
2019, with organic net revenue growth across all regions and double
digit growth in Asia Pacific as well as Africa, Middle East and
Eastern Europe. Revenue per hectolitre increased 3%, while
volume growth in the second quarter was negatively impacted by
weather in Europe and World Cup comparables from last year. The
Heineken® brand grew by 6.9%, with Heineken® 0.0 now available in
51 markets.
Operating profit (beia) was stable as the impact of strong
top-line performance was largely offset by input cost inflation,
whilst we increased our investment in e-commerce and technology
upgrades. For the full year, we continue to anticipate our
operating profit (beia) to grow by mid-single digit on an organic
basis.
Our partnership with CRE became effective at the end of April
and we are pleased to have now joined forces to win in the
fast-growing Chinese premium beer market.
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' expectations, whilst seeking productivity
improvements and constantly reassessing our spending
behaviour."
FINANCIAL SUMMARY²
BEIA Measures |
€ million |
Organic growth3 |
|
IFRS Measures |
€ million |
Total growth |
Revenue
(beia) |
13,597 |
|
5.3 |
% |
|
Revenue |
13,597 |
|
5.9 |
% |
Net revenue
(beia) |
11,446 |
|
5.6 |
% |
|
Net revenue |
11,443 |
|
6.0 |
% |
Operating
profit (beia) |
1,781 |
|
0.3 |
% |
|
Operating profit |
1,648 |
|
13.1 |
% |
Operating
profit (beia) margin1 |
15.6 |
% |
|
|
|
|
|
Net profit
(beia) |
1,054 |
|
-1.2 |
% |
|
Net profit |
936 |
|
-1.4 |
% |
Diluted EPS
(beia) (in €) |
1.84 |
|
-0.8 |
% |
|
Diluted EPS (in €) |
1.64 |
|
-1.2 |
% |
Free operating
cash flow |
578 |
|
|
|
|
Net debt / EBITDA (beia)4 |
2.9x |
|
|
1 Last year restated for IAS 37. Please refer to page 25 for
more details. 2 Consolidated figures are used throughout this
report, unless otherwise stated; please refer to the Glossary for
an explanation of non-GAAP measures and other terms used throughout
this report.3 Organic growth shown, except for Diluted EPS (beia)
which is total growth. The impact from IFRS 16 is reflected on all
metrics, but is excluded from the organic growth calculation.4
Includes acquisitions, excludes disposals and includes first time
impact of IFRS 16 on a 12 month pro-forma basis.
FULL YEAR 2019 OUTLOOK STATEMENT
For 2019, we expect the following:
- Continued volatility in economic conditions
- Superior top-line growth driven by volume, price and
premiumisation
- Mid-single digit increase of input and logistic costs per
hectolitre
- Continued cost management initiatives and productivity
improvements, together with investment in e-commerce and technology
upgrades.
Given this, we expect operating profit (beia) to grow by
mid-single digit on an organic basis, excluding any major
unforeseen macro economic and political developments.
We now also anticipate:
- An average interest rate (beia) slightly below last year (2018:
3.2%)
- An effective tax rate (beia) around 28% (2018 restated:
26.3%)
- Capital expenditure related to property, plant and equipment
slightly above €2 billion (2018: €1.9 billion).
OPERATIONAL REVIEW
Top-line performance was strong in the first six months of 2019,
well balanced between price mix and volume growth. Net revenue per
hectolitre (beia) grew in all regions, driven by premiumisation and
pricing.
Net revenue (beia) grew 5.6%
organically over the first six months of 2019, supported by a 3.0%
increase in net revenue (beia) per hectolitre and a 2.5% increase
in total consolidated volumes. The underlying price mix on a
constant geographic basis was +3.5%.
Consolidated beer volume grew 3.1% organically
in the first half. In the second quarter it was up 2.1%, with Asia
Pacific accelerating to double digit growth. In Europe the quarter
was off to a good start in April given the timing of Easter, but
was later dampened by bad weather and a challenging comparable.
Consolidated beer volume(in mhl) |
2Q19 |
2Q18 |
Organicgrowth |
HY19 |
HY18 |
Organicgrowth |
Heineken N.V. |
63.4 |
|
62.2 |
|
2.1 |
% |
116.1 |
|
112.7 |
|
3.1 |
% |
Africa Middle East & Eastern Europe |
11.4 |
|
10.7 |
|
6.5 |
% |
21.6 |
|
20.1 |
|
7.1 |
% |
Americas |
20.9 |
|
20.4 |
|
2.7 |
% |
40.7 |
|
39.6 |
|
2.9 |
% |
Asia Pacific |
7.7 |
|
7.2 |
|
12.5 |
% |
15.1 |
|
14.1 |
|
10.4 |
% |
Europe |
23.4 |
|
23.9 |
|
-3.4 |
% |
38.7 |
|
38.9 |
|
-1.5 |
% |
Heineken® volume increased 6.9% organically
over the first half, with growth in all regions. The brand grew
double digit in Brazil, Mexico, South Africa, Russia, Nigeria, UK,
Portugal, Germany and Romania among others. Heineken®
0.0, now available in 51 markets, continues to gain
traction.
Heineken® volume(in mhl) |
2Q19 |
Organicgrowth |
HY19 |
Organicgrowth |
Heineken® volume |
10.4 |
|
5.7 |
% |
19.4 |
|
6.9 |
% |
Africa Middle East & Eastern Europe |
1.8 |
|
14.8 |
% |
3.3 |
|
15.1 |
% |
Americas |
3.2 |
|
14.4 |
% |
6.2 |
|
12.6 |
% |
Asia Pacific |
1.2 |
|
-1.4 |
% |
2.7 |
|
0.8 |
% |
Europe |
4.3 |
|
-0.6 |
% |
7.2 |
|
1.7 |
% |
The international brand portfolio grew
high-single digit, driven by the double digit growth of Tiger and
Amstel. Tiger performed strongly in Vietnam and more than doubled
its volume in Cambodia, whilst Amstel grew strongly in Brazil,
South Africa, Russia and the UK and benefited from the national
roll-out of Amstel Ultra in Mexico.
Cider volume rose 2.1% organically to 2.6
million hectolitres. Volume increased double digit outside the UK,
with strong growth in South Africa, Russia, Vietnam and Spain. In
the UK, volume declined high-single digit still outperforming the
market. Cider is now locally produced in 14 markets, including
Vietnam and Mexico.
Low & No-Alcohol (LONO) volume increased
high-single digit, delivering 6.9 million hectolitres (2018: 6.3
million). Heineken® 0.0 was a key driver of this growth. 48 of our
brands now have non-alcoholic line extensions. The Zero Zone, which
provides dedicated shelf-space in the off-trade for our
non-alcoholic portfolio, is deployed in 20 markets across Europe
and Russia. Malt volumes in Nigeria grew high-single digit.
Craft & Variety volume grew low-single
digit driven by our local craft propositions. Affligem grew
double digit driven by France and the Netherlands. Lagunitas is now
available in more than 25 markets with an encouraging
performance.
In addition to developing new products and categories,
innovation at HEINEKEN further includes
draught systems technology and new ways to engage with our
customers and consumers. A few examples:
- The Blade, our counter-top draught system for small outlets
introduced in late 2017, is now available in 22 markets with a
range of 26 brands.
- Digital business-to-business platforms are being deployed
faster and wider, and at the end of June were operational in 12
markets.
- Several business-to-consumer platforms are being tested and
deployed. Beerwulf, our on-line beer store in Europe, and Drinkies,
our home delivery beer service, have been deployed in 11 and five
markets respectively.
We continue to deploy our BASE programme in Asia Pacific, Africa
and the Caribbean, standardising core business processes supported
by Enterprise Resource Planning (ERP) systems and making HEINEKEN
more agile and efficient. To date 11 operations are live.
We have also launched a business transformation programme in
Europe, with the objective to meet the evolving needs of our
customers and win with them in a more digitally connected world.
The transformation involves an upgrade of our financial systems and
will deliver a new transactional backbone for Europe.
Operating profit (beia) grew 0.3% organically,
as the benefit of the strong top-line growth was largely offset by
input cost inflation, higher investments in e-commerce and
technology upgrades and the phasing of expenses.
BREWING A BETTER WORLD
We continue to make steady progress against our Brewing a Better
World targets. In March 2019 we launched our 2030 'Every Drop'
water vision and our breweries operating in water-stressed areas
are now developing a roadmap towards healthier watersheds. We
introduced new projects to increase local sourcing in Burundi, the
Democratic Republic of Congo (DRC), Rwanda and Sierra Leone. In
Ethiopia and South Africa we are working with suppliers to expand
malting capacity to process local barley. We now have 12 biomass
facilities operational after successfully completing projects at
the Itu brewery in Brazil and the Schladming brewery in
Austria.
NET PROFIT
Net profit (beia) decreased 1.2% organically to €1,054 million
(2018 restated: €1,059 million), as operating profit (beia) growth
was more than offset by higher income taxes.
The impact of exceptional items and amortization of
acquisition-related intangibles (eia) on net profit was €118
million (2018 restated: €110 million).
Net profit after exceptional items and amortization of
acquisition-related intangibles was €936 million (2018 restated:
€949 million).
INTERIM DIVIDEND
In accordance with its dividend policy, HEINEKEN fixes the
interim dividend at 40% of the total dividend of the previous year.
As a result, an interim dividend of €0.64 per share (2018: €0.59)
will be paid on 8 August 2019. The shares will trade ex-dividend on
31 July 2019.
TRANSLATIONAL CURRENCY CALCULATED IMPACT
Using spot rates as of 24 July 2019 for the remainder of this
year, the calculated positive currency translational impact would
be approximately €100 million at operating profit (beia), and €60
million at net profit (beia).
ENQUIRIES
Media |
Investors |
John-Paul Schuirink |
Federico Castillo |
Director of
Global Communication |
Director of
Investor Relations |
Michael Fuchs |
Janine
Ackermann / Aris Hernández |
Financial
Communication Manager |
Investor
Relations Manager / Analyst |
E-mail:
pressoffice@heineken.com |
E-mail:
investors@heineken.com |
Tel:
+31-20-5239355 |
Tel:
+31-20-5239590 |
INVESTOR CALENDAR HEINEKEN N.V.
Trading Update
for Q3 2019 |
23 October
2019 |
Full Year 2019
Results |
12 February
2020 |
Conference call details
HEINEKEN will host an analyst and investor conference call in
relation to its 2019 HY results today at 10:00 CET/ 9:00 BST. The
call will be audio cast live via the company’s website:
www.theheinekencompany.com/investors/webcasts. An audio replay
service will also be made available after the conference call at
the above web address. Analysts and investors can dial-in using the
following telephone numbers:
Netherlands Local
Amsterdam |
|
+31(0)20 794 8426 |
|
|
|
New York |
|
+1 212 999 6659 |
|
|
|
Standard International
access |
|
+44 (0)20 3003 2666 |
|
|
|
Password:
Heineken |
Editorial information:HEINEKEN is the world's most international
brewer. It is the leading developer and marketer of premium beer
and cider brands. Led by the Heineken® brand, the Group has a
portfolio of more than 300 international, regional, local and
specialty beers and ciders. We are committed to innovation,
long-term brand investment, disciplined sales execution and focused
cost management. Through "Brewing a Better World", sustainability
is embedded in the business. HEINEKEN has a well-balanced
geographic footprint with leadership positions in both developed
and developing markets.We employ over 85,000 employees and operate
breweries, malteries, cider plants and other production facilities
in more than 70 countries. Heineken N.V. and Heineken Holding N.V.
shares trade on the Euronext in Amsterdam. Prices for the ordinary
shares may be accessed on Bloomberg under the symbols HEIA NA and
HEIO NA and on Reuters under HEIN.AS and HEIO.AS. HEINEKEN has two
sponsored level 1 American Depositary Receipt (ADR) programmes:
Heineken N.V. (OTCQX: HEINY) and Heineken Holding N.V. (OTCQX:
HKHHY). Most recent information is available on HEINEKEN's website:
www.theHEINEKENcompany.com and follow us on Twitter via
@HEINEKENCorp.
Market Abuse Regulation
This press release may contain price-sensitive information
within the meaning of Article 7(1) of the EU Market Abuse
Regulation.
Disclaimer:This press release 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 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
press release. HEINEKEN does not undertake any obligation to update
these forward-looking statements contained in this press release.
Market share estimates contained in this press release are based on
outside sources, such as specialised research institutes, in
combination with management estimates.
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