Heineken N.V. trading update third quarter 2010

Wednesday, 27. October 2010 08:01
Amsterdam, 27 October 2010 - Heineken N.V. today announced its trading update
for the third quarter of 2010. Compared with the same quarter in 2009:
* Organically, EBIT (beia) grew mid-single digits driven by a strong
performance in Africa and Asia and ongoing cost savings. EBIT (beia) grew

* Volume of the Heineken brand in the international premium segment grew 2.2%
to 6.9 million hectolitres;

* Consolidated beer volume grew 24% to 43.8 million hectolitres, due primarily
to the consolidation of FEMSA Cerveza. Organically, volume declined 2.2%;

* Revenue grew 13%, due to the changes in consolidation scope. Organically,
revenue was 2.1% lower;

* Organic growth in net profit (beia) was slightly above 10%.

Revenue and results

In the quarter, revenue totalled €4,619 million (+13%). Organically, the effect
of lower volume (-3.1%) was offset by better prices and an improved sales mix
(+1%). Net changes in consolidation scope added €466 million to revenue whilst
exchange rate changes added €152 million.

Organic EBIT (beia) growth benefited from selling price increases in the first
half of 2010, volume growth in Asia and Africa and ongoing Total Cost Management
(TCM) savings. Heineken's share of net profit of associates and joint ventures
grew, albeit at a slightly lower rate than in the first six months. EBIT (beia)
grew significantly, with net changes in the scope of the consolidation adding
14%. Currency fluctuations contributed €35 million to EBIT.

Exceptional costs of €49 million, mostly related to TCM and integration
activities partially offset the exceptional book gains realised in the first
half of 2010. Organically, interest costs decreased significantly due to strong
net debt reduction. As forecast, the effective tax rate (beia) was higher than
in the same quarter of 2009.

Net profit for the third quarter amounted to €520 million. Organic growth in net
profit (beia) was slightly above 10%.

Changes in the consolidation scope

Changes affecting volume, revenue and results:
* UBL in India included in group beer volume as of 1 January 2010;
* Shift from export to local production by the joint venture in South Africa
as of 1 January 2010;
* Multi Bintang Indonesia and Grande Brasserie de Nouvelle Caledonie
transferred to the APB joint venture as of 1 February 2010;
* FEMSA Cerveza in Mexico and Brazil included as of 1 May 2010;
* Waverley TBS in the UK deconsolidated as of 1 July 2010. Waverley reduced
revenue by €135 million in the quarter, whilst the effect on EBIT was


Heineken confirms its forecast as published on 25 August 2010 of an organic
increase in net profit (beia) of at least low double digits for the full year
2010. Including FEMSA Cerveza, Heineken reiterates its estimates of an effective
tax rate (beia) of 27-29% and an average interest rate of approximately 6% for

Group beer volume - 9 months 2010
Million hectolitres 2010  9 months 2009 9 months Change Organic change

Western Europe 35.4 36.5 -3.1% -3.0%

Central and Eastern Europe 38.8 43.7 -11% -7.7%

Africa and Middle East 18.5 16.9 9.1% 8.7%

The Americas 30.9 13.4 131% 1.0%

Asia Pacific 18.3 10.8 70% 5.6%

Group beer volume 141.9 121.3 17% -1.9%

Heineken® premium volume 19.7 19.1 3.4% 3.4%

Consolidated beer volume - 9 months 2010

Million hectolitres 2010 9 months 2009 9 months Change Organic change

Western Europe 35.1 36.3 -3.3% -3.1%

Central and Eastern Europe 33.1 36.3 -8.7% -8.9%

Africa and Middle East 13.8 14.3 -3.5% 8.3%

The Americas 24.6 7.1 248% -0.7%

Asia Pacific 1.1 2.0 -46% 4.0%

Consolidated beer volume 107.7 96.0 12.2% -3.3%

Group beer volume - third quarter 2010

Million hectolitres 2010 Q3 2009 Q3 Change Organic change

Western Europe 13.0 13.6 -4.2% -3.9%

Central and Eastern Europe 15.3 16.0 -4.8% -4.8%

Africa and Middle East 6.2 5.5 12% 12%

The Americas 14.7 4.3 239% 2.3%

Asia Pacific 6.3 3.7 69% 3.0%

Group beer volume 55.5 43.2 28% -1.0%

Heineken®  premium volume 6.9 6.8 2.2% 2.2%

Consolidated beer volume - third quarter 2010
Million hectolitres 2010 Q3 2009 Q3 Change Organic change

Western Europe 12.9 13.5 -4.4% -4.1%

Central and Eastern Europe 13.0 13.8 -5.7% -5.7%

Africa and Middle East 4.7 4.7 -0.9% 13%

The Americas 12.8 2.5 421% -3.0%

Asia Pacific 0.4 0.8 -48% 5.3%

Consolidated beer volume 43.8 35.3 24% -2.2%

Group beer volume development in the third quarter

Due to first time consolidation of FEMSA Cerveza, which added 10.4 million
hectolitres, volume increased 28%.

Volume of the Heineken brand in the international premium segment grew 2.2%,
once again outperforming the Group's average growth rate. Volume growth was
mainly driven by Brazil, South Africa, Taiwan, Vietnam, France and Nigeria
offsetting lower volume in the USA, Spain, Poland and Greece.

Volume in Western Europe was lower due to unfavourable weather conditions and
low consumer confidence. Trading was weak in the UK, the Netherlands, Italy and
Spain, whilst volume grew in Portugal. Volume in France was stable.

In Central & Eastern Europe, excluding Russia, volume decreased 1.0%
organically. Growth in Romania, Serbia, Belarus and Austria partly compensated
for declines in Poland, the Czech Republic, Hungary and Greece where beer
consumption was affected by austerity measures. In Russia, volume declined
significantly, albeit at a slower rate than in the first half of 2010.

Volume in Africa and Middle East grew 12% organically. Nigeria was the largest
contributor. Solid volume growth also occurred in the Democratic Republic of
Congo, Egypt, Burundi, Rwanda, South Africa, Lebanon and Tunisia.

In the Americas, organic volume growth in Latin America, the Caribbean and
Canada, largely compensated for lower volume in the USA, where the economic
environment continues to affect beer consumption. The Mexican market was lower
due to unfavourable weather conditions, affecting volume of CCM. In Brazil,
strong volume growth continues. CCU, the joint venture in Chile and Argentina,
achieved strong volume growth.

In Asia Pacific, volume grew 69% due primarily to inclusion of the UBL joint
venture which added 2.5 million hectolitres. Volume in Vietnam, Mongolia and
Taiwan increased substantially.

Financial structure

During the third quarter, continued strong cash flow generation led to a
significant decrease in net debt. Heineken confirms its target of a Net
debt/EBITDA (beia) ratio of below 2.5 times and a cash conversion rate in 2010
and 2011 above 100%.

On 13 August 2010, the principal amount of an 8-year private placement loan from
US institutional investors of $725 million was funded, further improving the
maturity profile of long term debt. The fixed Euro coupon (including swap)
averages 3.9%.

Until 30 September 2010, Heineken had repurchased 8.6 million Heineken N.V.
shares on the market of which 8.0 million shares were delivered to FEMSA. The
remainder will be delivered before the end of 2010.

Heineken will host an analyst and investor conference call in relation to this
trading update today at 10:00 am CET/ 9:00 am BST. The call will be audiocast
live via the company website
http://www.heinekeninternational.com/webcast/investors, and will be available
afterwards. Analyst and investors can call in using the following telephone

Local line: + 31-20-796-5332
Toll Free: 0800-265-8591

United Kingdom
Local line: +44-20-8515-2302
Toll Free: 0800 358 0857

Press enquiries
John G. Clarke
Tel: +31 (0)20 5239 355

Investor and analyst enquiries
Jan van de Merbel
Tel: +31 (0)20 5239 590

Editorial information:
Heineken is one of the world's great brewers and is committed to growth and
remaining independent. 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. The Company operates 140 breweries in more than 70
countries and sold 165.7 million hectolitres of beer on a 2009 pro-forma basis.
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, Dos Equis, Foster's, Kingfisher,
Newcastle Brown Ale, Ochota, Primus, Sagres, Sol, Star, Strongbow, Tecate, Tiger
and Zywiec. On a 2009 pro-forma basis, including FEMSA Cerveza, revenue totalled
€16.9 billion and EBIT (beia) was €2.3 billion.
The average number of people employed is more than 75,000. 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 home


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