Shaping our future. René Hooft Graafland. Member of the Executive Board/ CFO

Size: px

Start display at page:

Download "Shaping our future. René Hooft Graafland. Member of the Executive Board/ CFO"

Josephine Freeman
6 years ago
Views:

1 New York 6 March 2012

2 Disclaimer This presentation 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 foreign exchange fluctuations, change in tax rates, changes in law, changes in 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 speak only as of the date of this presentation. HEINEKEN does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials. Market share estimates contained in this presentation are based on outside sources such as specialised research institutes in combination with management estimates. 2

3 Shaping our future René Hooft Graafland Member of the Executive Board/ CFO New York 6 March 2012

4 2011: A year of significant progress Solid top-line performance Revenue grew (+3.6%), with revenue/ hl growth of 1.5% Group beer volume +3.6%; growth in all regions Higher marketing drove global market share gains Accelerated growth of Heineken Strongest volume performance since 2007 More consistent approach to global brand management Operational programmes delivering results TCM completed: Cumulative 3-year savings of 614m; Cost synergies in Mexico and Brazil of 94m in 2011 Hunt4Cash2 ( ): Cumulative FOCF of 5.8bn Leveraging global scale Launched new 500m TCM2 programme Formation of Global Business Services organisation Investment in commercial capability building Expanded emerging market footprint Nigeria, Ethiopia and Haiti acquisitions 4

5 FY 2011 key highlights Strong results in challenging conditions (mhl/ m) 2011 (restated) 2010 Change Organic change Group beer volume % 3.6% Total consolidated volume % 2.1% Of which: Consolidated beer volume % 3.2% Revenue 17,123 16, % 3.6% EBIT (beia) 2,697 2, % 1.4% Net profit (beia) 1,584 1, % 9.2% Net profit 1,430 1, % Free operating cash flow 2,093 1, % Net Debt/EBITDA (beia) ratio* 2.2x 2.2x Diluted EPS (beia) in % 5 * 2011 includes the Galaxy Pub Estate on a 12 month pro-forma basis; 2010 includes the beer operations of FEMSA on a 12 month pro-forma basis

6 Geographic diversity supporting growth Continued strong performances in Africa and Asia FY 2011 Organic growth (%) Western Europe Central & Eastern Europe The Americas Africa & Middle East Asia Pacific Total Group beer volume Heineken Revenue EBIT (beia) Volume in the international premium segment

7 FEMSA Cerveza: Value growth strategy delivering Strong revenue and EBIT growth FEMSA Cerveza Revenue/ EBIT (beia) CAGR % +23% +10% Successful integration Cost synergies of 136m since acquisition Brazil Premium focus supporting strong Heineken brand growth Mexico Building winning portfolios Brand relaunches for Tecate & Carta Blanca Enhanced packaging for Dos Equis Heineken launched in key cities Revenue EBIT (beia) Business transformation Enhancing commercial capabilities New route-to-market Implementation of new SAP system 7 Note: FEMSA Cerveza Revenue and EBIT (beia) based on euro-denominated pro-forma figures

8 TCM successfully completed TCM generated cumulative 3-year savings of 614m TCM Functional split: Cumulative F2F/TCM savings of 1.1 billion since 2006 Others 31% Supply Chain 43% TCM in 2011: Wholesale 7% Commerce 19% TCM Regional split: Americas Asia/ HO 4% 2% Africa & Middle East 12% Total savings of 178 million Supply chain contributed 54% of savings: efficiencies in UK; brewery closure in Austria Western Europe region contributed 49% of savings Remaining savings (primarily nonproduct related) accounts for 24% Exceptional costs of 81m Central & Eastern Europe 34% Western Europe 48% 8

9 H4C2: cumulative FOCF of 5.8 billion Average 3-year cash conversion rate above 130% Cumulative FOCF of 5.8 billion in 3 years m cumulative FOCF of 5.8bn: Effective Net Working Capital management Targeted capex investment 160% % 126% 122% 140% 120% 100% 2011 Strong FOCF generation of 2.1bn: Capex (PPE) of 800 million Main working capital ratio of 1.1% Net debt of 8.4bn: Business development activity Completion of ASDI share repurchase Net debt/ebitda unchanged at 2.2x FOCF ( m) Cash conversion ratio (%) 80% 2012F Maintain strong focus on cash generation Increased capex investment to 1,250 m Cash conversion ratio < 100% 9

10 Marketing investment driving top-line growth 2011 Marketing & Selling (beia) ratio of 12.8% Marketing & Selling: Organic growth of 4.1% m Consumer-facing spend +9% % 14% Marketing & selling (beia) ratio up 40 bp in % 11.7% 12.4% 12.8% 13% 12% Investment and strong activation driving market share gains in key markets including France, UK, Russia, Brazil, Nigeria and South Africa % 11% Marketing & selling (beia) ratio in 2012 to remain broadly in line with % Marketing & Selling expense Marketing & Selling expense (in % of revenues) 10

TCM 2: New global cost efficiency programme Expected to generate 500m savings TCM2 3 years: 2012-2014 Across all functions Focus on fixed and variable costs Supply Chain Commerce TCM2 Wholesale Other

11 TCM 2: New global cost efficiency programme Expected to generate 500m savings TCM2 3 years: Across all functions Focus on fixed and variable costs Supply Chain Commerce TCM2 Wholesale Other GBS as a key enabler Leverage global scale Set-up costs of HGSS and HGP approx. 200m ( 32m already incurred) GBS represents a strong pay-back on investment Savings will be reported at functional/opco level 11

12 Shaping our future Strategic business priorities Grow Heineken brand Consumerinspired, customeroriented, brand-led Capture the opportunities in emerging markets Leverage the benefits of HEINEKEN s global scale Drive personal leadership

13 1 Grow the Heineken brand Extending leadership in IPS Heineken outperforms IPS (Volume Growth, CAGR ) +5.3% +4.3% +3.0% IPS: CAGR CAGR 193mhl 4.1% AFRICA & ME 7.1% 129mhl ASIA PACIFIC 7.7% Beer Market IPS Heineken AFRICA & ME Heineken share of IPS 20.5% ASIA PACIFIC AMERICAS 3.1% 19.8% 20.0% 20.2% 20.2% AMERICAS 19.4% EUROPE EUROPE 2.6% Est 13 Source: Plato, November Plato estimate (IPS: volume sold outside home market)

14 1 Grow the Heineken brand Strong global activation programmes London Olympics official supplier Global campaigns Sponsorships Serenade Activation Film Global digital media Music 14

4mhl +26% Strongbow Gold #1 global cider Launched in 10 countries in

Further launches planned in 2012 Super-premium positioning Amstel

15 2 Consumer-inspired, customer-oriented, brand-led Expansion of priority global brands Desperados 1.4mhl +26% Strongbow Gold #1 global cider Launched in 10 countries in 2011 Global campaign in Italy & Netherlands Unique proposition Further launches planned in 2012 Super-premium positioning Amstel Brand extension Sol Mexican heritage New Amstel Premium International roll- Pilsener brand out from 2012 extension Supported by new Introduced in Greece brand campaign and Russia in Group beer volume in 2011 and organic growth vs. last year

16 COMMERCIAL SLIDE SOL 16

17 2 Consumer-inspired, customer-oriented, brand-led Winning local brands USA: Dos Equis +15% France: Pelforth +7.9% Nigeria: Gulder +11% Italy: Birra Moretti +3.8% Group beer volume organic growth vs. last year

0% 4.1% 2010 2011 2020 Target New flavour

18 2 Consumer-inspired, customer-oriented, brand-led Creating value for our customers Doubling the innovation rate* Innovative Customer Management 6.0% 3.0% 4.1% Target New flavour & packaging innovation Brand activation at a Carrefour store in Paris Radler Alcohol Free New cider flavour Foster s Gold 4ltre PET keg Visible Category Leadership Joint Business Planning Brand building activation at store level Leveraging pan-european footprint 18 *Innovation rate calculated as revenues generated from innovations introduced in the past 12 quarters divided by total revenue

19 3 Capture the opportunities in emerging markets Growing emerging markets exposure HEINEKEN Group Beer Volume HEINEKEN EBIT (beia) Developed Emerging Developed Emerging 214mhl 2.7bn 132mhl 65% 1.6bn 50% 44% 36% 56% 35% 64% 50% EBIT (beia) includes share of net profit of associates and joint ventures. Calculations exclude Head Office

3 Capture the opportunities in emerging markets Africa: Significant

Political & regulatory reform Growing foreign investment Urbanisation: 52

the Middle East in m 223 309 CAGR: Organic growth 23% 453 485 560 570

20 3 Capture the opportunities in emerging markets Africa: Significant growth potential Growth drivers: Population growth Rising incomes Political & regulatory reform Growing foreign investment Urbanisation: 52 cities > 1 million people Africa & the Middle East EBIT (beia): Africa & the Middle East in m CAGR: Organic growth 23% HEINEKEN OpCo Joint Venture Export Licenses * * 2010 restated

3 Capture the opportunities in emerging markets Asia Pacific: Capitalising on premium beer opportunity 2010-2020 CAGR % Region Population

0 IPS in Asia Pacific by market: 2010-2020 CAGR 7.7% 45mhl Other China Vietnam India Australia Thailand CAGR: 2010-2020 9.3% 11.8% 10.4% 15.

21 3 Capture the opportunities in emerging markets Asia Pacific: Capitalising on premium beer opportunity CAGR % Region Population growth +1.0% GDP growth +3.3% Beer market growth +3.9% Beer per capita growth +2.9% Beer per capita (2010 litres) 17.0 IPS in Asia Pacific by market: CAGR 7.7% 45mhl Other China Vietnam India Australia Thailand CAGR: % 11.8% 10.4% 15.1% 2.2% 7.1% 21mhl Taiwan South Korea Japan HongKong Cambodia 1.9% 4.3% 3.7% 2.2% 2.2% New Zealand 1.2% Singapore 3.2% Est 21 Source: Plato, November 2011

4 Leverage the benefits of HEINEKEN s global

Services Key enabler of new 500m TCM2 cost

Shared Services (HGSS) in Krakow, Poland

Netherlands Supply chain optimisation Global

22 4 Leverage the benefits of HEINEKEN s global scale Global brand building Global Business Services Key enabler of new 500m TCM2 cost saving programme ( ) HEINEKEN Global Shared Services (HGSS) in Krakow, Poland HEINEKEN Global Procurement Company (HGP) in the Netherlands Supply chain optimisation Global Procurement Company GBS Global Shared Services Enabling Infrastructure 22

23 5 Drive personal leadership Developing world class talent 71 Operating Companies 70,000 Employees 635 Senior Leaders One HEINEKEN Diversity Broad geographic footprint gives rise to diversity in management Dramatic increase in diversity amongst senior management Acquisitions key contributor to net inflow of talent Capability Global Commerce University, Finance Academy, Supply Chain knowledge transfer Tailored HEINEKEN development programmes Culture Drive a culture of personal accountability and interdependence 23

Brewing a Better Future Key enabler for business priorities 10-year integrated programme launched April 2010 On track to meet 2020 goals Delivered

24 Brewing a Better Future Key enabler for business priorities 10-year integrated programme launched April 2010 On track to meet 2020 goals Delivered on energy and water targets Increased local raw material sourcing in Africa to 48% Introduced bold new approach to responsible consumption: Sunrise 24

25 Outlook 2012 Continue focus on top line and market share growth Positive growth momentum in emerging economies together with a focus on revenue enhancing initiatives in developed markets Capacity expansion in emerging markets to maintain positive growth momentum Increased capital expenditure to 1,250m; cash conversion ratio below 100% Continued investment in commercial and global capability building across the company Marketing and selling (beia) expense as a percentage of revenue to remain broadly stable Launched 500m cost saving programme (TCM2) from 2012 to

26 COMMERCIAL SUNRISE 26

Heineken. Credit investor update. March 2012

Heineken. Credit investor update. March 2012 Heineken Credit investor update March 2012 Disclaimer The material that follows is a presentation of general background information about the Heineken Group ( Heineken or the Company ) as of the date of