Heineken N.V. reports solid operating performance for the first half 2011

Wednesday, 24. August 2011 07:00
Amsterdam, 24 August 2011 - Heineken N.V. today announced:

* Organic growth in group beer volume of 4.2% with higher volume across all
regions. Volume of the Heineken® brand in the premium segment increased
4.7%, led by growth in Asia Pacific and Western Europe;
* On an organic basis, revenue grew 3.3%, driven by a positive volume effect
of 2.2% and increased price and sales mix of 1.1%;
* Organically, EBIT (beia) grew 3.9%, as an increase in revenues, cost savings
and higher profit from joint ventures was partially offset by planned higher
marketing investment and increased input costs;
* Net profit (beia) of €694 million (+5.7% organic growth), reflecting higher
EBIT (beia) and lower interest expenses, partly offset by higher taxation
expense. Reported net profit declined 14%, primarily reflecting a
significant exceptional gain last year;
* Total Cost Management (TCM) programme delivered €82 million of pre-tax
savings in the first half 2011;
* Strong free operating cash flow generation of €779 million, resulting in an
improved net debt/EBITDA (beia) ratio of 2.1x;
* Interim dividend of €0.30 per share, an increase of 15% compared with last
year's interim dividend.

 Key figures[1] Organic
(in mhl or  €m unless stated HY 2011   HY 2010[2]   Change %   Growth %

Group beer volume 104.1   86.4   20   4.2

Total consolidated volume[3] 94.3   80.4   17   2.7

Of which: Consolidated beer volume 79.8   63.9   25   3.9

Heineken® premium volume 13.4   12.8   4.7   4.7

Revenue 8,358   7,520   11   3.3

EBIT 1,113   1,201   -7.4

EBIT (beia) 1,259   1,137   11   3.9

Net profit 605   700   -14

Net profit (beia) 694   626   11   5.7

Free operating cash flow 779   699   11

Net debt/EBITDA (beia)[4] 2.1x   2.6x

Diluted EPS (beia) (in €) 1.17   1.19   -1.7

[1] For an explanation of the terms used please refer to the Glossary in the
Appendix. Unless otherwise stated, any reference to volume growth rates
throughout the release relate to group beer volume.
[2]2010 financials at group and region level have been restated for a change in
accounting policy and/or segment reporting. Refer to Scope and Accounting
changes under the Financial Review section for details.
[3] This new metric has been introduced to aid investor understanding of total
volume performance and revenue development. Total consolidated volume is defined
as 'Volume produced and sold by fully consolidated companies (including beer,
cider, soft drinks and other beverages), volume of third party products and
volume of Heineken's brands produced and sold under license by third parties'.
[4] Including acquisitions( )on a 12 month pro-forma basis.

CEO Statement

Jean-François van Boxmeer, Chairman of the Executive Board and CEO, commented:

"This is a solid performance for the first half of the year, with higher organic
group beer volume across all regions. Our focus on transforming our geographic
footprint, aligned with increased marketing investment has enabled us to deliver
robust top-line growth and gains in market share.  Furthermore, we delivered an
incremental €82 million of cost savings through our Total Cost Management
programme, driving organic growth in EBIT (beia).

Continuing to invest in our key brands is helping us to win with consumers. The
Heineken® brand continued to outperform our overall portfolio, driven by strong
marketing and innovation propositions. We are delighted with the early consumer
response to our new global "Open Your World" campaign, with its success evident
from recent awards received at the 2011 Cannes Lions International Creativity
Festival. In March, we launched Heineken® in the Mexican market, and in August
we started brewing the Heineken® brand locally in India as we progress our
exciting UBL partnership. New campaigns to support the international roll-out of
Desperados and Strongbow Gold have also made a positive impact.

We will continue our relentless focus on tight cost management, realisation of
planned synergies from earlier acquisitions and strong cash flow generation to
support near-term performance. Whilst mindful of the continuing volatility and
increased uncertainties in the global economy, I remain confident that these
efforts combined with our strengthened global platform and higher marketing
investments, position the company well to deliver sustainable growth over the

2011 Full Year Outlook

Heineken expects trading conditions in Latin America, Sub-Saharan Africa and
Asia Pacific to benefit from a continued positive economic environment. Volume
development in parts of Europe and the USA is expected to remain challenging
given the current economic uncertainty, high unemployment and ongoing weak
consumer confidence.

Heineken expects a slightly higher rate of input cost inflation in the second
half of the year (compared with the first half of 2011). For the full year,
Heineken continues to expect a low single-digit increase in input costs (on a
per hectolitre basis). Heineken will continue its focus on long-term brand
building through higher marketing investment. In the second half of the year
marketing and selling (beia) expense, on an organic basis, is expected to
increase by low single-digits, compared with the second half of 2010.

The current 3-year TCM programme covering the period 2009 to 2011 is expected to
deliver further cost savings in the second half of the year. With a culture of
continuous improvement now firmly embedded across its business, Heineken plans
to introduce a new 3-year cost saving programme from the beginning of 2012. A
key initiative involves the formation of a Global Business Services organisation
that will enable the Company to better leverage the scale of its global
operations. Investment in this new global function is expected to give rise to
additional efficiency benefits and support profitability in future years.

For 2011, gross capital expenditure related to property, plant and equipment is
forecast to be approximately €800 million.

Heineken does not expect material changes to the effective tax rate (beia) in
2011 (2010: 27.3%). The effective tax rate (beia) in the second half of 2011
will be slightly lower than the rate in the second half of 2010. Heineken
forecasts an average interest rate of around 5.5% for 2011.

Heineken is targeting a cash conversion rate of around 100% for the full year
2011, supported by strong cash flow generation and disciplined capital

Heineken has witnessed volume weakness in the high-selling season of July and
early August 2011, reflecting poor weather conditions in Europe, in combination
with lower consumer confidence in some key markets. This will affect second half
2011 volume and profit performance and therefore Heineken expects full year net
profit (beia), on an organic basis, to be broadly in line with last year.
Heineken remains confident that its highly diversified geographic footprint,
ongoing cost saving programmes and higher investment in long-term brand building
initiatives will support growth in future years.

Interim dividend

In accordance with the existing dividend policy, Heineken N.V. fixes its interim
dividend at 40% of the total dividend of the previous year. As a result, an
interim dividend of €0.30 per share of €1.60 nominal value will be paid on 6
September 2011. The shares will trade ex-dividend on 26 August 2011.

Attachment: Half-year report and Glossary

Heineken N.V. Agenda:

Trading update for Q3 2011 26 October 2011

Financial Markets Conference 8-9 December 2011

Financial results for the full year 2011 15 February 2012

Trading update for Q1 2012 18 April 2012

Annual General Meeting of Shareholders (AGM)     19 April 2012

Press enquiries Investor and analyst enquiries

John G. Clarke / George Toulantas /

John-Paul Schuirink Lucia Bergamini

Tel: +31 20 5239 355 Tel: +31 20 5239 590

John.G.Clarke@heineken.com Investors@heineken.com


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 is present in over 70 countries and
operates 140 breweries with volume of 205 million hectolitres of beer sold on a
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 2010 pro-forma basis, including
FEMSA Cerveza, revenue totalled €17 billion and EBIT (beia) was €2.7 billion.
The average number of people employed is more than 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

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.

Heineken N.V. HYR11 English version:

This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Heineken N.V. via Thomson Reuters ONE

Related Links: Heineken N.V.
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.