Heineken N.V. trading update first quarter 2010

Wednesday, 21. April 2010 08:02
Amsterdam, 21 April 2010 - Heineken N.V. today issued its trading update for the
first quarter of 2010.

* EBIT (beia) grew mid-single digit as the effect of cost savings, positive
pricing and sales mix exceeded that of lower volume;
* Reported EBIT was significantly higher, driven by an exceptional book gain
of €142 million on the transfer of two Asian operations;
* Revenue declined 3.5% to €2,936 million, due to changes in consolidation
scope, whilst the effect of lower volume was partly offset by better pricing
and sales mix improvement. Organically, revenue was 2.2% lower;
* Volume of the Heineken brand in the international premium segment grew 6.7%
to 5.7 million hectolitres;
* Consolidated beer volume declined 5.3% organically, totalling 23.6 million
hectolitres. An important factor was the volume decline in Russia;

The first quarter of the year is the least significant in terms of volume and
profitability. In 2009, the first quarter accounted for 20.5% of consolidated
beer volume and 20.7% of revenue respectively.

Revenue and results

Revenue totalled €2,936 million. Changes in the scope of the consolidation
accounted for 1.4% of the decrease in revenue. Organically, revenue was 2.2%
lower, as the improvement in selling prices and sales mix (+2.4%) could only
partly offset the effect of lower volume on revenue (-4.6%). The effect of
weaker foreign currencies was limited.

EBIT (beia) grew mid-single digit driven by lower costs and improved pricing and
sales mix, which more than offset the effect of lower volume on EBIT. Organic
EBIT (beia) growth was slightly higher as the impact of currencies against the
euro (-€6 million) and the negative effect of first time (de)consolidation were
limited. Heineken's Total Cost Management programme (TCM) achieved further
savings across most cost categories. Investments in brands increased.

Reported EBIT increased substantially versus the first quarter 2009, due to a
€142 million pre-tax exceptional book gain realised on the transfer of
subsidiaries in Indonesia and New Caledonia, in line with the press release of
7 December 2009.

Net profit (beia) increased driven by higher EBIT and lower "Other net financing
expenses". Reported net profit for the first quarter amounted to €218 million.

Changes in the consolidation scope

In 2010, two important changes will affect consolidated beer volume, revenue and

    - Transfer of a 68.5% stake in PT Multi Bintang Indonesia (MBI) and 100% of
Grande Brasserie de Nouvelle-Calédonie S.A. (GBNC) from the Heineken Group
to Heineken's joint venture Asia Pacific Breweries (APB) and the
acquisition of APB's Indian breweries led to a scope change on 1 February

  - The shift in South Africa from import to production by the local joint

Group beer volume is not affected by these changes.

In Central & Eastern Europe, Brau Holding International, Heineken's joint
venture in Germany, sold the Karlsberg brewery in July 2009, lowering Group beer
volume. From 1 January 2010 Heineken includes in its Group beer volume 100% of
the volume of United Breweries (UBL) in India.

Beer Volumes

Consolidated beer volume

| '000 hectolitres | Q1 2010 | Q1 2009 | Change | Organic |
| | | | | change |
| Western Europe | 9,278 | 9,505 | -2.4% | -2.4% |
| Central and Eastern Europe | 7,798 | 9,001 | -13% | -14% |
| Africa and the Middle East | 4,195 | 4,600 | -8.8% | 1.7% |
| The Americas | 1,918 | 1,896 | 1.1% | 1.1% |
| Asia Pacific | 378 | 622 | -39% | 1.7% |
| Consolidated beer volume | 23,567 | 25,624 | -8.0% | -5.3% |

In the first quarter, consolidated beer volume was 8.0% lower, of which 5.3% was
organic. Deconsolidation and a shift in production led to a volume reduction of
0.7 million hectolitre. In Europe and the USA, economic conditions were still
challenging, affecting beer consumption. After a slow start to the year, volume
trends improved in March partly due to the earlier timing of Easter sales.

In Western Europe, colder than usual winter weather in January and February
affected volume, especially in the U.K. In Italy, volume was strong due to
lapping the temporary delistings in the first quarter 2009. Volume in Spain, and
Switzerland increased slightly whilst volume in Ireland declined more than the
average for the region.

In Central & Eastern Europe, volume was 13% lower. Excluding Russia, volume in
the region decreased 1.3% organically. In Russia, the tripling of excise duty
per 1 January and SKU rationalisation led to a significant lower volume. Volume
in Austria grew, whilst volume in Romania and Poland was still under pressure.

In Africa, volume grew organically owing to the good performances in Democratic
Republic of Congo, Burundi and the export business. In Nigeria, volume declined
mid-single digit, due to the economic and security situation.

In the Americas, strong organic volume growth in the Caribbean and higher volume
in Canada more than offset volume softness in the US market, where colder than
usual weather, weak consumer sentiment and down-trading to lower-priced beers
affected premium beer volume. The overall US beer market declined almost 2%.
Depletions - sales by distributors to retailers - of Heineken USA's Dutch
portfolio decreased low-single digit, whilst the FEMSA brand portfolio was
stable. Both portfolios reported an improvement in the trend in March.

In Asia, consolidated beer volume was lower due to the transfer of MBI and GBNC
to APB. Organically, volume grew 1.7% driven by increased exports to Taiwan.

Group beer volume and Heineken(®) premium volume

| '000 hectolitres | Q1 2010 | Q1 2009 | Change | Organic |
| | | | | Change |
| Western Europe | 9,331 | 9,557 | -2.4% | -2.4% |
| Central and Eastern Europe | 9,217 | 11,065 | -17% | -11% |
| Africa and the Middle East | 5,611 | 5,463 | 2.7% | 2.0% |
| The Americas | 4,523 | 4,606 | -1.8% | -1.8% |
| Asia Pacific | 5,486 | 3,675 | 49% | 7.5% |
| Group beer volume | 34,168 | 34,366 | -0.6% | -3.5% |
|   |   |   |   |   |
| Heineken premium volume | 5,677 | 5,321 |   | 6.7% |

Group beer volume totalled 34.2 million hectolitres. Strong volume growth from
the joint venture with Diageo and Namibian Breweries in South Africa was a key
contributor to the performance in Africa.

Volume of the Heineken brand in the international premium segment increased
6.7% to 5.7 million hectolitres, driven by strong performances in Italy,
Nigeria, South Africa, Indochina and Taiwan, which more than offset lower volume
in the USA and Europe, continuing the long term trend of the premium segment
outperforming the total beer market.

Priorities for 2010

During 2010, Heineken will continue to focus on further increasing value share
in its key markets. In order to build its brands, Heineken stepped up its
marketing investments in selective markets.

In the first quarter of 2010, price increases were implemented across most
markets, albeit at a lower level than in 2009.

The TCM programme will continue to deliver cost savings. As announced earlier,
breweries were closed in Finland and Romania in the first quarter.

Cash generation and debt reduction will remain an important focus in 2010 and
Heineken reiterates its commitment to achieve a cash conversion rate (Free
operating cash flow/Net profit (beia) before minorities) in excess of 100% for
2010 and 2011.

The company will continue the efforts to improve the profitability of the
recently acquired businesses and will focus on the integration of FEMSA Cerveza
as soon as the transaction is completed.

FEMSA Cerveza

On 11 January 2010, Heineken announced the proposed acquisition of FEMSA Cerveza
in Mexico, Brazil and in its export markets including the USA. The Mexican,
Brazilian and U.S. anti-trust authorities have approved the transaction.

Shareholders of Heineken N.V. and Heineken Holding N.V. will be asked to approve
the transaction at the AGM that will be held on 22 April, whilst the AGM of
FEMSA is scheduled for 26 April. Heineken expects to consolidate FEMSA Cerveza
for the first time as of 1 May 2010.

On 27 February 2010, FEMSA Cerveza released its full year 2009 results. Adjusted
to reflect the application of the Heineken accounting policies, the effects of
the provisional purchase price accounting adjustments and assuming a MXP/€
exchange rate of 18.799 for the year 2009 (versus 17.39 when announcing the
transaction), the pro-forma 2009 FEMSA Cerveza key financials would be as

| FEMSA Cerveza Pro-Forma Financials (mhl, €m) | 2009 |
| Consolidated beer volume | 40.5 |
| Revenues | 2,465 |
| Net debt | 1,324 |
| EBITDA (beia) | 437 |
| EBIT (beia) | 278 |
| Net debt/EBITDA (beia) | 3.0x |

With respect to the purchase of Heineken N.V. shares to fulfil the deferred
share payment (ASDI) to FEMSA, weekly updates on shares purchased can be found
at www.heinekeninternational.com/financialinformation.aspx
. For additional
information on the proposed FEMSA Cerveza transaction, please refer to the
shareholders' circular dated 23 March 2010 and the offering circular, the latter
to be published shortly on the website.

Financial structure

In December 2009, the Net Debt/EBITDA (beia) ratio was 2.6 times. Including
FEMSA Cerveza, the 2009 pro forma ratio would have been 2.7 times before the
completion of the ASDI.

Positive cash flow generation owing to the Hunt for Cash Two programme (H4C2)
further reduced net debt at the end of the first quarter compared to the year
2009. The H4C2 cash generation programme will be extended to the Mexican and
Brazilian operations once the transaction is completed.

Heineken N.V. 2010 calendar

| Annual General Meeting of Shareholders (AGM) | 22 April |
| Quotation ex-final dividend 2009 | 26 April |
| Final dividend 2009 payable | 29 April |
| Financial results for the first half 2010 | 25 August |
| Trading update for the third quarter 2010 | 27 October |

Press enquiries Investor and analyst enquiries

Véronique Schyns Jan van de Merbel

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

veronique.schyns@heineken.com investors@heineken.com

Heineken will host an analyst and investor conference call in relation to this
trading update today at 10:00am CET/ 9.00 BST. The call will be audiocast live
via the company website http://www.heinekeninternational.com/webcast/investors
, and will be available
for download afterwards. Analysts and investors can call in using the following
telephone numbers:

From The Netherlands: From United Kingdom

Toll Free: 0800 - 265 8591 Toll Free: 0800 - 358 0857

Local line: +31 (0)20 - 796 5332 Local line: + 44 (0)20 8515 2302

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. In 2009, the Company operated 125 breweries in more
than 70 countries and sold 159 million hectolitres of beer. 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, Foster's, Kingfisher, Newcastle Brown Ale, Ochota,
Primus, Sagres, Star, Strongbow, Tiger and Zywiec. In 2009, revenue totalled
€14.7 billion and net profit before amortisation of brands and customer
relations was €1.0 billion. In 2009, the average number of people employed was
55,301. 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 Reuters Equities
2000 Service under HEIN.AS and HEIO.AS. Most recent information is available on
Heineken's home page:http://www.heinekeninternational.com


Download Heineken N.V. trading update first quarter 2010: http://hugin.info/130667/R/1406134/359761.pdf
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