Amsterdam, 26 October 2011 - HEINEKEN HOLDING N.V. today announced its trading update for the third quarter of 2011. In the quarter:
- On an organic[1] basis, HEINEKEN's[2] revenue grew 3.0% driven by higher volumes and improved price and sales mix;
- Higher marketing investment supported total consolidated volume and consolidated beer volume organic growth of 1.1% and 2.2%, respectively;
- Volume of the Heineken® brand in the international premium segment increased 4%, outperforming group beer volumes, supported by the continued success of the global brand campaign 'Open Your World';
- Organically, EBIT (beia) was lower, primarily due to higher planned costs;
- Reaffirm outlook for full year 2011 net profit (beia) to be broadly in line with last year, on an organic basis;
- HEINEKEN N.V.'s share repurchase programme in connection with the acquisition of FEMSA Cerveza has been completed ahead of schedule.
[1] An explanation of key volume and financial terms used are provided under the heading 'Definitions' at the end of this update.
[2] HEINEKEN means HEINEKEN HOLDING N.V., HEINEKEN N.V., its subsidiaries and interests in joint venture and associates
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.
Financial Results
During the quarter, HEINEKEN's revenue grew 0.6% to €4,645 million, including a positive first time consolidation impact of €32 million, or 0.7%, mainly related to the acquired breweries in Nigeria in January 2011. Foreign currency movements contributed to a negative translational effect on revenues of 3.1% in the quarter. This primarily reflects devaluation of the Nigerian naira, Polish zloty, British pound and Mexican peso versus the euro reporting currency. On an organic basis, revenue grew 3.0%, reflecting a positive volume effect of 0.5% (including the impact of country mix) and improved price and sales mix of 2.5%.
On an organic basis, EBIT (beia) was lower in the quarter. While revenues increased and ongoing TCM cost savings were realised, the effect of poor weather in July and early August resulted in negative operational leverage in Europe. In addition, higher planned marketing spend, upfront capability building investments in Commerce and Business Services and a low single-digit increase in input costs per hectolitre reduced profit. In the quarter, a slight positive consolidation scope impact was more than offset by an adverse translational effect from foreign currency movements.
HEINEKEN's share of net profit of associates and joint ventures grew substantially, driven by strong performances of the Asia Pacific Breweries and South African joint venture operations. There were no exceptional costs in the quarter. Reported net profit of HEINEKEN N.V. in the quarter was €525 million, broadly in line with the prior year.
Full Year Outlook
HEINEKEN confirms its earlier outlook for net profit (beia) to be broadly in line with last year, on an organic basis. HEINEKEN reaffirms its previous cost synergy target, related to the acquisition of FEMSA Cerveza, of €150 million by the end of 2013. HEINEKEN reiterates its estimate of an average interest rate of around 5.5% and does not expect material changes to the effective tax rate (beia) in 2011 (2010: 27.3%).
Financial structure
At the end of September 2011, HEINEKEN N.V. privately placed US$90 million of notes with a 6-year maturity, further improving the currency and maturity profile of its long-term debt.
On 3 October 2011, HEINEKEN N.V. announced that all 29,172,504 shares under the terms of the Allotted Share Delivery Instrument ("ASDI") concluded between HEINEKEN N.V. and Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA") were repurchased. All repurchased shares have now been delivered. The net debt position at the end of September 2011 was broadly in line with the amount at 30 June 2011, despite cash outflows associated with an accelerated execution of the ASDI repurchase programme and recent acquisitions in Ethiopia.
HEINEKEN continues to target a cash conversion rate of around 100% for the full year 2011.
| Investor calendar HEINEKEN HOLDING N.V. | |
| 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 |
HEINEKEN HOLDING N.V. will host an analyst and investor conference call in relation to this trading update today at 10:00 CET/ 09:00 BST. The call will be audio cast live via the website: http://www.heinekeninternational.com/webcasts/investors. An audio replay service will also be made available after the conference call at the above web address. Analysts and investors can dial-in using the following telephone numbers:
| Netherlands | United Kingdom |
| Local line: +31-(0) 45-631-6902 | Local line: +44-207-153-2027 |
| Toll-Free: 0800-265-8611 | Toll-Free: 0800-358-0886 |
| Press enquiries | Investor and analyst enquiries |
| John Clarke | George Toulantas |
| Head of External Communication | Director of Investor Relations |
| E-mail: john.g.clarke@heineken.com | Lucia Bergamini |
| John-Paul Schuirink | Senior Investor Relations Manager |
| Financial Communications Manager | E-mail: investors@heineken.com |
| E-mail: john-paul.schuirink@heineken.com | Tel: +31-20-5239590 |
| Tel: +31-20-5239355 |
Definitions:
Organic Growth excludes the effect of foreign currency translational effects, consolidation changes, exceptional items, amortisation of brands and customer relations. Beia refers to financials before exceptional items and amortisation of brands and customer relations. Group beer volume includes 100 per cent of beer volume produced and sold by fully consolidated companies and joint venture companies as well as the volume of Heineken's brands produced and sold under license by third parties. Consolidated beer volume includes 100 per cent of beer volume produced and sold by fully consolidated companies (excluding the beer volume brewed and sold by joint venture companies). Total Consolidated volume includes 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.
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. HEINEKEN'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 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 Heineken, 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 the website: www.theHEINEKENcompany.com.
Disclaimer:
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 estimate.
