Heineken Holding N.V. reports 2005 full year results at the top end of forecast; 7.3% organic Net Profit growth

 

The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for 2005 amounts to € 381 million.

Heineken achieved organic growth in all key business metrics in 2005: 2.2% organic growth in Revenues, driven by a more positive price and sales mix, 2.9% organic growth in EBIT (beia) and 7.3% organic growth in Net Profit (beia).

 

Net Profit (beia) increased by € 37 million to € 840 million, despite a negative currency effect of € 27 million. Net Profit of Heineken Holding N.V. increased to € 381 million. 

 

Cash flow from operations was once again strong and amounted to € 2,213 million. Cash conversion continued at a high level, reaching 120%. In addition, the disposal of non-core assets, mainly the real estate assets acquired with the BBAG business, contributed € 270 million to net cash flow.

 

Group beer volume grew by 5.3% (from 112.6 million hectolitres to 118.6 million hectolitres) with an improvement in volume trends in the second half of the year.

 

Volume of Heineken® in the premium segment grew by 4.5% to 20.1 million hectolitres, further strengthening its position as the world's leading international premium beer brand.

 

Beer volume of Heineken USA, excluding distribution of the Femsa brands, decreased by 0.3%. Total depletions - sales by distributors to the retail trade - were 1.2% up and depletions of the Heineken® brand increased by 1.9%. In the second half of the year, both volume and depletions growth of Heineken® accelerated. Volumes of Femsa brands sold by Heineken USA in 2005 amounted to 2.2 million hectolitres (+7.4%). Heineken Premium Light® has been successfully test marketed, and the brand will be rolled-out nationally in March 2006.

 

Heineken's market position in Russia was further strengthened with the acquisition of Ivan Taranov Breweries in the second half of 2005. With 10 breweries and more than 12 million hectolitres on an annualised basis, Heineken's operation in Russia is now the biggest operation by volume.

 

Heineken will address the efficiency and effectiveness of its global operations. The group is targeting total annual cost reductions of € 200 million to be achieved by 2008, with the bulk of the cost savings materialising in 2007 and 2008. Unfinished elements of existing cost reduction programmes totalling € 65 million are included in this amount.

 

In 2006, Heineken does not expect organic growth in Net Profit for 2006 to exceed mid-single digits.

 

Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management and supervision of and provision of services to that company.

 

 

 

The General Meeting of Shareholders of Heineken N.V. on 20 April 2006 will be asked to approve the distribution of an unchanged cash dividend of € 0.40 per share of  € 1.60 nominal value, which will be subject to a 25% Dutch withholding tax. As an interim dividend of € 0.16 per share was paid on 21 September 2005, the remaining final dividend will be € 0.24 per share.
If the meeting approves the proposed dividend, Heineken Holding N.V. will, according to its articles of association, pay an identical dividend. A final dividend of € 0.24 per ordinary share of € 1.60 nominal value will be paid on 8 May 2006. Heineken Holding N.V. ordinary shares will be quoted ex dividend on 24 April 2006.