Amsterdam, 22 August 2012 – Heineken N.V. ("HEINEKEN") today announced:
Revenue rose 4.5% organically, driven by higher total consolidated volumes of 1.6% and revenue per hectolitre growth of 2.9%. Group beer volume rose 3.3% with increases in four out of five regions;
Heineken® volume grew by 6%, once again outperforming the international premium segment and the overall beer market;
EBIT (beia) increased 0.5% reflecting a positive contribution from acquisitions and a favourable currency impact. On an organic basis, EBIT (beia) decreased 5.5%, primarily due to planned capability building investments and higher input costs;
Net profit (beia) increased 1.6% and declined 4% on an organic basis. Reported net profit increased 30% to €783 million, including a post-tax book gain of €131 million for the sale of a minority stake in a brewery in the Dominican Republic;
Diluted EPS (beia) grew 4.3% reflecting higher net profit (beia) and a lower weighted average diluted number of shares following completion of the ASDI share repurchase programme in October 2011;
Total Cost Management (TCM2) programme delivered pre-tax savings of €85 million in the first half of 2012;
Targeted FEMSA cost synergies of €150 million achieved earlier than planned;
Free operating cash flow of €345 million was below the prior year period, primarily reflecting higher planned capital investments and investment in working capital due to business growth;
Interim dividend of €0.33 per share, an increase of 10% versus last year; and
On 17 August 2012, HEINEKEN announced that it agreed a final offer and signed definitive agreements with Fraser & Neave (F&N) to acquire its entire effective interest in Asia Pacific Breweries Limited (APB) and the non-APB assets held by Asia Pacific Investment Pte Ltd (APIPL) for a total consideration of S$5.6 billion.
(in mhl or € million unless stated otherwise)
Half Year 2012
|Half Year 2011||
|Organic growth %
|Group beer volume
|Total consolidated volume
|Of which: Consolidated beer volume
|Heineken® volume in premium segment
|Net profit (beia)
|Free operating cash flow
|Net debt/EBITDA (beia)2
|Diluted EPS (beia) (in €)
1 For an explanation of the terms used please refer to the Glossary in the Appendix. Unless otherwise stated, any reference to growth rates used throughout the report is calculated on an organic basis and volume relates to group beer volume.
2 Includes acquisitions on a 12 month pro-forma basis.
Jean-François van Boxmeer, Chairman of the Executive Board and CEO, commented:
"Our focus on delivering top-line growth continues to be successful with revenue increases across all regions and market share gains in several of our key markets. The Heineken® brand again performed strongly in the international premium segment with organic volume growth of 6%.
Our Africa & the Middle East, Asia Pacific and Americas regions all delivered an excellent top- and bottom-line performance. The solid growth of the Americas region is particularly noteworthy as it reflects the success of our strategic initiatives in the important USA and Mexican beer markets. Although faced with a challenging economic environment and unfavourable weather, revenue in Western Europe increased slightly in the first half of the year, whereas the Central & Eastern Europe region reported solid organic top-line growth.
Our Global Business Services (GBS) organisation and other efficiency initiatives have enabled us to generate €85 million in savings under our Total Cost Management (TCM2) programme. Despite this benefit, our profitability in the first half of the year was impacted by difficult trading conditions across Europe as well as higher input costs and planned capability investments.
In the second half, we expect continued top-line momentum to benefit from ongoing high-impact brand marketing as well as capital investments in higher growth markets. Full year net profit (beia) is expected to be broadly in line with last year, on an organic basis.”
Commenting on the proposed acquisition of Asia Pacific Breweries, van Boxmeer said:
"The decision by Fraser and Neave on 17 August 2012 to agree to our increased and final offer for its entire shareholding in APB and recommend the proposed transaction to its shareholders marks an important and exciting milestone in our acquisition of APB. The business of APB provides direct access to two of the world’s most exciting growth regions for beer – Southeast Asia & the Pacific Islands, and China. We are working towards a swift completion of the transaction and are looking forward to ongoing growth and success in the region, led by the Heineken® and Tiger brands."
2012 FULL YEAR OUTLOOK3
Top-line: HEINEKEN continues to expect overall group revenues to benefit from continued positive momentum in higher growth economies across the Asia Pacific, Africa & the Middle East and the Americas regions. Volume in Western Europe is expected to remain subdued in the second half of 2012 owing to the challenging economic conditions.
Global Brands: Heineken® is expected to maintain its strong performance in the international premium segment. HEINEKEN will also continue to invest in the expansion of its other global brands - Desperados, Strongbow Gold, Amstel and Sol.
Input costs: In the first half of 2012, input costs increased by 6.9% on a per hectolitre basis, with this slight increase over earlier full year expectations reflecting the faster growth of countries with higher input cost inflation and a shift towards higher priced one-way packaging. HEINEKEN expects this mix effect to continue into the second half of the year. As a consequence, input costs per hectolitre are now expected to increase by approximately 8% for the full year 2012. HEINEKEN expects to largely offset this increase through a higher rate of revenue per hectolitre growth in the second half of the year.
Marketing and selling expenses: HEINEKEN expects marketing and selling (beia) expense as a percentage of revenue to be approximately 12.5%.
Total Cost Management (TCM2): The current TCM2 programme is targeting cost savings of €500 million over the period 2012-14 and is focused on driving operational cost efficiencies and on further leveraging HEINEKEN’s global scale.
Effective tax rate: Similar to 2011, HEINEKEN´s effective tax rate (beia) in the second half of 2012 is expected to be below the rate in the first half, primarily reflecting the impact of varying country profit mix. HEINEKEN continues to expect a slight increase in the effective tax rate (beia) for the full year 2012 (2011: 26.8%).
Interest rate: HEINEKEN continues to expect a slightly higher average interest rate of around 5.5% in 2012 (2011: 5.2%).
Capital Expenditure: Gross capital expenditure on property, plant and equipment is expected to be approximately €1.2 billion (2011: €800 million). The higher capital expenditure level in 2012 reflects investments in additional brewing capacity and the renewal and expansion of the returnable bottle fleet in higher growth markets. Consequently, HEINEKEN expects a cash conversion ratio below 100% for 2012.
Net profit (beia): HEINEKEN expects full year operating profit performance to be weighted to the second half of the year. For the full year 2012, HEINEKEN expects net profit (beia) to be broadly in line with last year, on an organic basis. The combined impact of consolidation and foreign currency movements are expected to increase full year 2012 net profit (beia) by approximately €50 million.
3 Excludes any impact from HEINEKEN’s offer for Fraser & Neave, Limited’s (F&N) direct and indirect interests in Asia Pacific Breweries Limited (APB) and F&N’s 50% share of the non-APB assets in Asia Pacific Investment Pte Ltd, as announced on 17 August, 2012.
In accordance with the existing dividend policy, HEINEKEN fixes its interim dividend at 40% of the total dividend of the previous year. As a result, an interim dividend of €0.33 per share of €1.60 nominal value will be paid on 4 September 2012. The shares will trade ex-dividend on 24 August 2012.
Investor Calendar Heineken N.V.
|Trading update for Q3 2012
||24 October 2012
|Financial Markets Conference – Lagos, Nigeria
||13-14 November 2012
|Financial Results for the 2012 Full Year
||13 February 2013
|Trading update for Q1 2013
||24 April 2013
|Annual General Meeting of Shareholders (AGM)
||25 April 2013
||Investor and analyst enquiries
|Head of External Communication
||Director of Investor Relations
||Senior Investor Relations Manager
|Financial Communications Manager
HEINEKEN is a proud, independent global brewer committed to surprise and excite consumers with its brands and products everywhere. The brand that bears the founder’s family name - Heineken® - is available in almost every country on the globe and is the world’s most valuable international premium beer brand. The Company’s aim is to be a leading brewer in each of the markets in which it operates and to have the world’s most valuable brand portfolio. HEINEKEN wants to win in all markets with Heineken® and with a full brand portfolio in markets of choice. The Company is present in over 70 countries and operates more than 140 breweries with volume of 214 million hectolitres of group beer sold. HEINEKEN is Europe’s largest brewer and the world’s third largest by volume. HEINEKEN is committed to the responsible marketing and consumption of its more than 200 international premium, regional, local and specialty beers and ciders. These include Amstel, Birra Moretti, Cruzcampo, Desperados, Dos Equis, Foster’s, Heineken, Newcastle Brown Ale, Ochota, Primus, Sagres, Sol, Star, Strongbow, Tecate, and Zywiec. Our leading joint venture brands include Cristal, Kingfisher, Tiger and Anchor. In 2011, revenue totaled €17.1 billion and EBIT (beia) was €2.7 billion. The number of people employed is around 70,000. Heineken N.V. and Heineken Holding N.V. shares are listed on the Amsterdam stock exchange. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIA NA and HEIO NA and on the Reuter Equities 2000 Service under HEIN.AS and HEIO.AS. Most recent information is available on HEINEKEN's website:www.theHEINEKENcompany.com
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, 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 are only relevant as of the date of this press release. HEINEKEN does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of these statements. Market share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination with management estimates.