Heineken N.V. reports 2020 full year results and shares updates on
"EverGreen" strategic review
Amsterdam, 10 February 2021 – Heineken N.V.
(EURONEXT: HEIA; OTCQX: HEINY) announces:
2020 full year results highlights:
- Net revenue (beia) organic growth -11.9%; per hectolitre
-2.4%
- Consolidated beer volume -8.1% organically
- Heineken® volume resilient -0.4%
- Operating profit (beia) organic growth -35.6%, margin 12.3%
(-455 bps)
- Net profit (beia) €1,154 million, -49.4% organically
- Diluted EPS (beia) €2.00 (2019: €4.38)
EverGreen strategic review update:
- Deliver superior and profitable growth in a fast-changing
world
- Placing consumers and customers at the core, enhance our
portfolio and strengthen our digital route to consumer
- Raise the bar on sustainability and on our people agenda
- Step up in productivity starting with €2 billion gross savings
through 2023 to fund our journey
- Restore operating profit margin (beia) to around 17% by 2023
and gear for operating leverage beyond
CEO STATEMENT
Dolf van den Brink, Chairman of the Executive Board / CEO,
commented:
"In a year of unprecedented disruption and transition, our teams
rose to the occasion and quickly adapted while not losing sight of
the need to continue investing for the future. The impact of the
pandemic on our business was amplified by our on-trade and
geographic exposure. We took diligent cost mitigation actions
balanced with continued investment behind our growth platforms. We
gained share in most of our key operations, a testimony to our
ability to adapt and stay close to our customers and consumers in
these turbulent times. The Heineken® brand was a bright star, with
a continued outstanding performance in Brazil. I applaud the
dedication and resilience of our employees and their commitment to
support each other, our customers and communities over the past
year.
While navigating the crisis, we are building our future.
EverGreen leverages both our strengths and new opportunities to
chart our next chapter of growth. We aspire to deliver superior and
profitable growth in a fast changing world. Firmly putting
customers and consumers at the core we aim to continually enhance
and expand our portfolio and footprint. We are stepping up our
focus on continuous productivity improvements and raising our
environmental and social sustainability ambitions. All of this
gives us confidence that we will continue to deliver long-term
value for all our stakeholders."
FINANCIAL SUMMARY1
IFRS Measures |
€ million |
Total growth |
|
BEIA Measures |
€ million |
Organic growth2 |
Revenue |
23,770 |
|
-16.7 |
% |
|
Revenue
(beia) |
23,770 |
|
-11.3 |
% |
Net revenue |
19,715 |
|
-17.7 |
% |
|
Net
revenue (beia) |
19,724 |
|
-11.9 |
% |
Operating profit |
778 |
|
-78.6 |
% |
|
Operating
profit (beia) |
2,421 |
|
-35.6 |
% |
|
|
|
|
Operating
profit (beia) margin (%) |
12.3 |
% |
|
Net (loss) |
(204) |
|
-109.4 |
% |
|
Net profit
(beia) |
1,154 |
|
-49.4 |
% |
Diluted EPS (in €) |
(0.36) |
|
-109.5 |
% |
|
Diluted
EPS (beia) (in €) |
2.00 |
|
-54.3 |
% |
|
|
|
|
Free
operating cash flow |
1,513 |
|
|
|
|
|
|
Net debt / EBITDA (beia)3 |
3.4x |
|
|
1 Consolidated figures are used throughout this report, unless
otherwise stated; please refer to the Glossary for an explanation
of non-GAAP measures and other terms used throughout this
report. 2 Organic growth shown, except for Diluted EPS (beia)
which is total growth.3 Includes acquisitions and excludes
disposals on a 12 month pro-forma basis.
NAVIGATING THE CRISIS WHILE BUILDING THE FUTURE
From the onset of the pandemic, people's health and safety have
been our highest priority. To support our employees in doing their
jobs safely, we established robust COVID-19 preventive measures
including working from home where possible, social distancing,
strict personal hygiene and disinfection protocols, and providing
adequate personal protective equipment.
We also supported our customers, suppliers and the communities
most impacted by the pandemic. We assisted customers with advice,
re-opening tools, stock returns and helped them set up online
delivery. We supported them financially, for example, by waiving
close to €50 million in rental payments. We raised over €10 million
to support 50,000 outlets across 21 countries through our Back the
Bars initiative. We continued to pay all suppliers on time and
reduced payment terms to various small suppliers.
We provided twenty-three million Euros worth of pandemic relief
to support front-line medical workers in the communities where we
operate, including drinking water, non-alcoholic beverages, hand
sanitiser, and monetary contributions. These included a €15 million
donation to the International Red Cross. In Mexico, we announced a
dry ice donation of 55 tons to help safely transport vaccines at
low-temperatures. The de Carvalho-Heineken family together with
their holding company donated €10 million to eight charities
supporting the COVID-19 relief efforts.
Our people adapted quickly and took decisive actions to
guarantee business continuity. We entered the crisis with a strong
balance sheet and took immediate steps to strengthen our liquidity.
We took action to swiftly reduce discretionary expenses and
mitigate the impact on our business performance while protecting
the future. Our commercial teams reallocated resources across
channels and brands, increasing their focus on off-trade customers.
We accelerated the deployment of our e-commerce platforms,
capitalising on digitalisation trends as consumers and customers
shopped online. Our supply chain teams demonstrated great agility
to adapt to a radically different and volatile environment with
excellent efficiency and minimum disruptions. As a result, we
outperformed the market in most of our key markets.
In parallel, our colleagues in support functions adapted quickly
to working from home, produced timely rolling-forecasts to inform
decisions and managed eight, remotely supported, deployments of our
standardised ERP platforms in Africa, Asia and the Caribbean.
Finally, we continued to shape our business for growth, with our
entry into Peru, the acquisition of Strongbow in Australia, and the
restructuring of our Philippines' business.
TOP-LINE PERFORMANCE
COVID-19 continues to have a material impact on our top-line
performance, affecting all geographies and markets as governments
across the world took measures to mitigate the contagion including
restricted population movement, social distancing, outlet closures
and temporary lockdowns of production facilities.
Net revenue (beia) declined 11.9% organically,
with a 9.8% decrease in total consolidated volume and a 2.4%
decrease in net revenue (beia) per hectolitre due to country mix
effects and non-volume related revenue decline. The underlying
price mix on a constant geographic basis was broadly flat for the
full year. Currency translation negatively impacted net revenue
(beia) by €1,259 million or 5.3%, mainly driven by the Brazilian
Real, the Mexican Peso, the Nigerian Naira, the Russian Rouble and
the South African Rand.
The second half of the year benefited from a good summer with
some easing of operating constraints including in the European
on-trade. Net revenue (beia) decreased 7.8%. Total consolidated
volume declined 6.4% and net revenue (beia) per hectolitre was down
1.5% (2H19: 3.6% up). Underlying price mix was up 1.0% (2H19: 3.2%)
driven by Brazil, Mexico, Ethiopia and Nigeria more than offsetting
the negative channel mix in Europe.
Consolidated beer volume decreased 8.1%
organically for the full year. Our premium beer volume outperformed
the broader portfolio in the majority of our markets with a
mid-single digit decline overall. The fourth quarter reflects the
impact of renewed restrictions in all regions, especially in Europe
with the closing of the on-trade.
Consolidated beer volume(in mhl) |
4Q20 |
4Q19 |
Organic growth |
FY20 |
FY19 |
Organic growth |
Heineken
N.V. |
56.2 |
|
61.1 |
|
-7.9 |
% |
221.6 |
|
241.4 |
|
-8.1 |
% |
Africa Middle East & Eastern Europe |
11.2 |
|
11.5 |
|
-2.9 |
% |
39.6 |
|
43.7 |
|
-9.2 |
% |
Americas |
22.5 |
|
23.3 |
|
-3.5 |
% |
79.1 |
|
85.6 |
|
-7.5 |
% |
Asia Pacific |
7.6 |
|
8.4 |
|
-9.6 |
% |
28.1 |
|
31.1 |
|
-7.9 |
% |
Europe |
14.8 |
|
17.8 |
|
-16.3 |
% |
74.8 |
|
81.0 |
|
-8.2 |
% |
Heineken® volume declined marginally by 0.4%,
significantly outperforming the total market and our overall
beer portfolio. The brand grew double-digits in 25 markets
including Brazil, China, the UK, Poland, Singapore, Nigeria,
Germany, Chile, Ivory Coast, Laos, and South Korea.
Heineken® 0.0 grew strong double-digits with
growth in all regions and an outstanding performance in Brazil,
Mexico, and the USA. Heineken® 0.0 is now rolled-out in 84
markets.
Heineken® volume (in mhl) |
4Q20 |
Organic growth |
FY20 |
Organic growth |
Total |
10.7 |
|
-4.3 |
% |
41.8 |
|
-0.4 |
% |
Africa Middle East & Eastern Europe |
1.7 |
|
-20.2 |
% |
5.6 |
|
-23.0 |
% |
Americas |
4.4 |
|
15.6 |
% |
15.9 |
|
18.7 |
% |
Asia Pacific |
1.9 |
|
-0.1 |
% |
6.4 |
|
0.6 |
% |
Europe |
2.7 |
|
-19.1 |
% |
13.9 |
|
-7.1 |
% |
The international brand portfolio had a mixed
performance across brands and markets. Desperados grew
double-digits driven by France, Poland, the Netherlands and Ivory
Coast. Birra Moretti grew slightly as strong growth in the UK and
Romania more than offset the decrease in Italy. Tiger volume was
soft in Vietnam, outperforming the total market, and the brand grew
strongly in Nigeria and South Korea. Amstel declined driven by
Europe and South Africa despite double-digit growth in Brazil and
Mexico. Sol declined driven by Mexico but grew
double-digits in the UK, Chile and Argentina. Edelweiss
declined in Europe but showed strong growth in South Korea.
Cider volume declined in the high-teens to 4.6
million hectolitres (2019: 5.6 million), due to pub closures in the
UK and alcohol sales restrictions in South Africa. Strongbow grew
double-digits in Mexico and Russia.
Low & No-Alcohol (LONO) volume decreased
slightly, delivering 14.0 million hectolitres (2019: 14.1 million)
and outperforming the overall portfolio in most of our markets. The
no-alcohol portfolio grew mid-single-digit, driven by Heineken® 0.0
globally and Maltina in Nigeria.
We entered the Hard Seltzer category with Pure
Piraña in Mexico and New Zealand in September and more launches
will come in 2021. In Mexico, Pure Piraña is the first nationwide
seltzer brand available across all channels, complemented by Amstel
Ultra Seltzer, launched in January 2021. In the USA, together with
AriZona we announced the launch of AriZona SunRise Hard Seltzer in
2021.
Our e-commerce platforms showed strong growth
as digitalisation trends accelerated, consumers changed shopping
patterns and customers adapted to new realities.
- Beerwulf, our direct-to-consumer platform in
Europe, nearly doubled its revenues. All markets grew strongly,
most notably the UK where revenues tripled. Online sales of our
home-draught systems the Sub and Blade grew in the
mid-double-digits.
- All together our direct-to-consumer platforms
Beerwulf, Six2Go and Drinkies tripled the number of orders from
consumers in the year.
- We continued to deploy our business-to-business digital
platforms at speed. We are operational in 25 markets
covering more than €1 billion of our net revenue as we connect more
than 100,000 customers in traditional channels.
- Our platforms also include digital connections
to cashier systems and on-trade equipment, including fridges and
draught beer columns. By the end of 2020, we connected to more than
130,000 customers globally.
SUSTAINABILITY AND RESPONSIBILITY
2020 was an unprecedented year in which we continued to advance
against all our sustainable development ambitions, with people's
health and safety at the heart of our response to the pandemic.
2020 also marked an inflexion point as we concluded our decade-long
Brewing a Better World commitments and paved the
way for our next phase of sustainability and responsibility
ambitions.
Over the last decade we made significant progress on all six of
our focus areas, designed to support the UN Sustainable Development
Goals, including to promote health and safety in our operations,
protect our water resources, reduce CO2 emissions, source
sustainably, advocate responsible consumption, and grow with the
communities where we operate.
For years, we have been a staunch advocate for making moderate
consumption cool by targeting an investment of 10% of Heineken®
media spend to support responsible consumption
campaigns in every market where we sell and advertise Heineken®.
One of our key platforms is the Heineken® Formula 1 partnership to
promote “When You Drive, Never Drink”. In 2020, we complemented
this campaign with Heineken® 0.0, offering consumers an alternative
no-alcohol option if they do need to drive. Given the exceptional
circumstances in 2020, we redirected part of our 10% Heineken®
media investments from ‘responsible consumption’ to ‘socialise
responsibly’ campaigns, reminding consumers to embrace social
distancing and other safety measures.
Our carbon emissions in production reduced a
further 3.0% in 2020 to 5.1 kilograms of CO2 per hectolitre
produced bringing the total reduction to 51% since 2008. After
meeting our targetted carbon emission reduction in production
early, we launched our ‘Drop the C’ programme in 2018 to reduce CO2
emissions with a target to power our production facilities with 70%
renewable thermal and electrical energy by 2030. In 2020, we
reached 22% renewable energy in our production facilities, through
wind and solar power, and sustainable biomass projects. Heineken®
is now brewed with 100% green energy in the Netherlands and Brazil
for the domestic markets.
We reduced water usage by a third since 2008 to
3.4 hectolitres of water per hectolitre produced and 3.1
hectolitres in water-stressed areas, two years ahead of plan. In
March 2019, we introduced our 2030 water ambition ‘Every Drop’,
which looks beyond traditional water efficiency metrics to put the
health of local watersheds front and centre. Ten production sites
located in Mexico, Spain and Egypt replenished more water in the
respective watersheds than used in their final products through
nature-based solutions and infrastructure improvement projects.
We significantly increased our raw materials from
sustainable sources to 58% (2019: 37%), exceeding
our 2020 target. Although we slightly increased our local sourcing
percentage of agricultural supplies in Africa to 45% (2019: 44%),
it remained below the 60% target for 2020.
On safety, we further reduced accident
frequency by 31% versus last year to 0.58 per 100 FTE, surpassing
our 2020 target.
In addition to our Brewing a Better World programme, we use the
power of our diversity as the most international
brewer to create a more inclusive work
environment. At the end of 2020, there were 61 nationalities (2016:
53) and 23% female representation among our senior managers (2016:
17%). We continue to leverage our brands' strength as a force for
good and build strong marketing campaigns to raise awareness on
crucial societal issues, such as the Heineken® #CheersToAll
campaign addressing gender stereotypes.
In 2021 we will continue to Raise the Bar on responsible
consumption, environmental and social sustainability and will
announce a new 2030 ambition for Brewing a Better World.
More details on our Sustainability and Responsibility programmes
and progress will be available on our website and in our 2020
Annual Report.
OPERATING PROFIT PERFORMANCE
Operating profit was materially impacted by the negative
consequences of COVID-19, partially offset by significant
mitigation actions.
Operating profit (beia) declined 35.6%
organically, with all regions in decline. Operating
profit declined 78.6%. More than 90% of the organic
operating profit (beia) decline was driven by Europe, Mexico, South
Africa and Indonesia. Currency translation negatively impacted
operating profit (beia) by €129 million or 3.2%, mainly driven by
the Brazilian Real and the Mexican Peso.
The operating profit decline in Europe was
amplified by an over 40% volume decline in the on-trade. HEINEKEN
has a strong position in the on-trade channel across Europe,
including wholesale in several markets and pubs in the UK.
In Mexico, beer volume declined in the
mid-teens. Operations were suspended throughout most of the second
quarter and faced operating restrictions throughout the year.
In South Africa, total volume declined in the
thirties as our strong momentum was disrupted by a COVID-related
suspension of all alcohol companies in the second quarter, a ban on
the sale of alcohol during July and August, and impacts to various
supply chain expansion projects that constrained our capacity in
the second part of the year.
In Indonesia, total volume declined in the
forties given the impact of lockdowns throughout most of the year
and the absence of international tourism in the key Bali
region.
Input costs per hectolitre increased by around
10% essentially driven by the negative impact of channel and
product mix and to a lesser extent by transactional currency
effects. Commodity prices had a slight positive impact.
Other incremental expenses included higher
depreciation from previous year investments, provisions for credit
losses, safety & protection equipment, donations and other
forms of support to our customers and communities.
We implemented cost mitigating actions
throughout the year, reducing all discretionary expenses, pausing
projects, and cancelling senior managers' bonuses. These actions
resulted in a net organic reduction of circa €800 million of other
expenses (beia). This excludes the effects on input costs, goods
for resale, transport and depreciation. Most of these cost
mitigation actions are by nature non-repeating benefits.
For more details, please refer to the Financial Review.
EXCEPTIONAL ITEMS AND IMPAIRMENTS
The impact of exceptional items and amortisation of
acquisition-related intangibles (eia) was €1,643 million
(2019: €387 million) on operating profit and
€1,358 million (2019: €351 million) on net profit.
This included impairments (net of reversal) of
€963 million in tangible and intangible assets in operating profit.
The impact of the crisis in developing economies and the on-trade
restrictions in some developed economies triggered the need for
impairment reviews. These resulted in impairments in Papua New
Guinea (€246 million), Lagunitas (€230 million), various individual
UK pubs (€191 million), Jamaica (€100 million, net of reversal) and
various other smaller impairment charges, of which €96 million in
Africa, Middle East and Eastern Europe and €61 million in the
Americas. For more details on the exceptional items and
impairments, please refer to the Financial Review.
Exceptional items also included restructuring
costs of €331 million, essentially associated with the
organisational restructuring being implemented across our markets
during 2021.
NET PROFIT AND LOSS
Net profit (beia) decreased 49.4% organically
to €1,154 million (2019: €2,517 million). The decrease was higher
than the decline in operating profit (beia) due to higher net
finance expenses and the lower relative decline in minority
interest. Currency translation negatively impacted net profit
(beia) by €67 million or 2.7%, mainly driven by the Brazilian Real
and the Mexican Peso. Net loss after exceptional
items and amortisation of acquisition-related intangibles was €204
million (2019: €2,166 million profit). TOTAL
DIVIDEND FOR 2020
The Heineken N.V. dividend policy is to pay a ratio of 30% to
40% of full year net profit (beia). For 2020, a total cash dividend
of €0.70 per share, representing a decrease of 58.3% (2019: €1.68),
and a payout ratio of 34.9%, in the middle of the range of our
policy, will be proposed to the Annual General Meeting on 22 April
2021 ("2021 AGM"). If approved, the full dividend will be paid on 6
May 2021, as no interim dividend was paid during 2020. The payment
will be subject to a 15% Dutch withholding tax. Due to the reported
net loss in 2020, the proposed dividend will be paid out of the
equity reserves. The ex-dividend date for Heineken N.V. shares will
be 26 April 2021.
2021 OUTLOOK STATEMENTS
Overall the COVID-19 pandemic and governments' measures continue
to have a material impact on our markets and business. 2021 started
with many restrictions across our markets, including on-trade
closures and restrictions to travel. In Europe in particular, we
estimate that at the end of January 2021, less than 30% of on-trade
outlets were operating. Product and channel mix is expected to
continue to adversely impact results, especially in Europe.
According to the World Health Organisation, the effect of
vaccines on the pandemic will depend on several factors including
their effectiveness, speed of their approval, manufacturing and
delivery and the number of people getting vaccinated. As such, we
expect the pandemic to continue to impact our business in the first
half of 2021 and market conditions to gradually improve in the
second part of the year.
Input costs per hectolitre are expected to be volatile due to
channel and product mix effects. Based on our hedged positions for
2021, we expect a significantly higher negative transactional
currency impact on input costs.
The EverGreen programme will be in full deployment.
Overall we expect revenue, operating profit and operating profit
margin to stay below the level of 2019. We also anticipate:
- An average effective interest rate (beia) broadly in line with
2020 (2020: 3.0%)
- Capital expenditure related to property, plant and equipment
and intangible assets of around €1.8 billion (2020: €1.6
billion).
- The effective tax rate (beia) to stay above 2019 level due to
the effect of fixed cost components in the tax line.
TRANSLATIONAL CURRENCY CALCULATED IMPACT
The translational currency impact for 2020 was negative,
amounting to €1,259 million on net revenue (beia), €129
million at operating profit (beia) and €67 million at net profit
(beia).
Applying spot rates as of 8 February 2021 to the 2020 financial
results as a baseline, we calculate a negative currency
translational impact of approximately €480 million in net revenue
(beia), €70 million at operating profit (beia) and €30 million at
net profit (beia).
EVERGREEN
In the second half of 2020, we embarked on a strategic review,
listening to and engaging with a wide range of internal and
external stakeholders. We named our journey EverGreen, drawing
inspiration from nature's resilience and constant adaptation and
renewal.
With EverGreen, we aim to emerge stronger from the COVID-19
crisis and build on our unique strengths to deliver superior and
profitable growth in a fast-changing world. We pursue a growth
algorithm that translates superior growth and continuous
productivity improvements into purposeful investments and operating
leverage while raising the bar on environmental sustainability,
responsible consumption and our people strategy.
We provide an update of our progress below. The programme is
on-going and we will provide further updates in the future.
Our unique strengths and opportunities
HEINEKEN's many strengths form a solid foundation to build upon,
including:
- A strong track-record of superior top-line growth
- The iconic Heineken® brand
- A footprint skewed towards growth
- A winning premium brand portfolio in a world where premium is
poised to outperform
- A global leadership in non-alcoholic beer, a segment with much
potential for growth
- A distinctive entrepreneurial model centred on our local
operations
- Our HEINEKEN values and culture centred on quality and people,
and
- Our long-term focus rooted in our 156 year history.
HEINEKEN is a superior growth company, with significant value
creation potential going forward:
- Enhance our portfolio and strengthen our digital route to
consumer, with consumers and customers at the core
- Complement growth with increased productivity focus
- Accelerate IT simplification and capture full e-commerce
potential
- Raise our Brewing a Better World ambition towards 2030
- Drive speed, agility and external orientation in our
organisation
Our way forward
As our markets recover, we aim to deliver superior
top-line growth with a sharpened consumer- and
customer-focused strategy across five dimensions:
- Expand and develop our footprint to maintain our growth
advantage
- Focus and expand our portfolio to better serve consumers
- Shape and strengthen our route to consumer digitally
- Scale execution excellence through commercial capability
building
- Drive intentional resource allocation towards growth.
We will expand and develop our footprint by
strengthening our #1 and #2 positions and continuously expanding
into new growth markets via greenfields and partnerships. We have
also started to take action to resolve a number of value dilutive
operations in our current footprint.
Regarding our brand portfolio, we will amplify our
strong premium position by winning value share with
Heineken®, everywhere; scale and replicate the success of our
international brands; and make fewer, bigger bets in local premium
brands. We will also stretch beer and move beyond
beer, innovating to serve consumers better. We will make
0.0% beer available everywhere, always, with Heineken® 0.0 and
no-alcohol options across our entire portfolio. We will expand beer
to meet new consumer needs and occasions and move beyond beer to
serve consumers better. For example, on 17 September 2020, we
announced the launch of Pure Piraña in Mexico and New Zealand,
exploring the Hard Seltzer category.
We aim to become the best connected brewer,
digitally enabling and strengthening our route to consumer. We will
connect all our customers through our business-to-business
platforms, reaching €10 billion net revenue by 2025 in traditional
channels. Our entire sales force will be digitally empowered by
2023. We will continue to invest selectively in direct-to-consumer
platforms and touch all consumers with Individual Data Driven
Marketing.
Continuous productivity improvements will fuel
the investments required to support our growth strategy. We are
building a cost management capability to continuously develop
initiatives and cultivate a cost-conscious culture. At the end of
2020, we launched an initial productivity programme of €2 billion
gross savings by 2023 which we estimate will have a cost to achieve
of approximately €500 million OPEX and €400 million CAPEX. The
programme will be key to restore our marketing and spend levels,
front-load investments in digital and technology and mitigate the
incremental costs from accumulated inflation and significant
transactional currency costs. This cost management capability will
gear us for operating leverage beyond 2023.
The initiatives to deliver the €2 billion gross savings are
concentrated in three key productivity areas:
- An organisational redesign in 2021 to be more efficient and
effective
- An efficiency programme to reduce complexity and number of
SKUs, reduce conversion costs in production and optimize
logistics
- A commercial productivity programme tackling our least
effective spend, fully reinvesting the productivity gains
Regarding the organisational redesign, on 28
October 2020, HEINEKEN announced a review of the effectiveness and
efficiency of its organisations at head-office, regional offices
and each of our local operations. The overall restructuring
programme will reduce our employee base by c.8,000 people, with a
total restructuring charge of around €420 million1 and run-rate
direct savings on personnel expenses of c.€350 million. The
timelines of restructuring will vary depending on the specific
circumstances of each of our local operations, including a
reduction of the personnel costs at the head-office by a run-rate
of c.20% to be implemented at the end of the first quarter of
2021.Our productivity programme enables accelerated
investments with sharpened resource and capital
allocation, in particular:
- We will drive efficiency of our consumer and customer-focused
investments, restoring our marketing and sales spend as a
percentage of net revenue (beia) to the levels of 2019 by latest
2023, fully reinvesting all commercial productivity gains
- We will front-load investments to accelerate our digital &
technology transformation, including our digital route to consumer,
digital core & backbone, advanced analytics and global data
hubs
- We will sharpen our resource allocation within and across our
local operations
- Will maintain our disciplined use of capital, maintain a strong
balance sheet and remain committed to bringing back our Net Debt to
EBITDA (beia) ratio below 2.5x.
Finally, we will Raise the Bar on responsible consumption,
environmental and social sustainability and will introduce a
renewed ambition for this decade in the coming months. We will also
step-up on our people strategy, to be more externally oriented,
boost capability building and enhance disciplined entrepreneurship
in our operating model.
Long term value creation
As we charted this next growth chapter we have made some general
assumptions on the recovery. We expect market conditions to
gradually improve in the second part of 2021 and to continue
improving into 2022, with significant differences across markets
and channels. In particular, we see a slow recovery of the on-trade
channel in Europe.With EverGreen we aim to create long-term value
for all our stakeholders by delivering superior top-line growth,
restoring margins and gearing for operating leverage. As we recover
from the crisis, we expect to achieve an operating profit margin
(beia) of around 17% by 2023 and to continue to drive operating
leverage thereafter.
For more details, please join us for the presentation of
EverGreen today during our video webcast. Details on the next
page.
SUPERVISORY BOARD COMPOSITION
HEINEKEN will make a non-binding nomination for Mr Maarten Das'
re-appointment and the new appointment of Mr Nitin Paranjpe as
member of the Supervisory Board of Heineken N.V. Both appointments
will be for a four-year term and subject to shareholder approval at
the Annual General Meeting in 2021 ('the 2021 AGM'). Mr Paranjpe,
Chief Operating Officer of Unilever with extensive FMCG experience,
particularly in Asia, will be a strong successor for Mr Christophe
Navarre, who will reach his maximum tenure upon conclusion of the
2021 AGM. The Supervisory Board is grateful for Mr Navarre’s
commitment and meaningful contribution over the past twelve
years.In December 2020, the Supervisory Board decided to install a
Sustainability & Responsibility Committee to increase the focus
and oversight of the overall Company strategy and performance
related to environmental sustainability, social sustainability and
responsible consumption. This Committee comprises Mr Fernández
Carbajal (Chairman), Mr de Carvalho, Mrs Mars Wright, Mrs Ripley
and upon his appointment by the 2021 AGM, Mr Paranjpe.
Consequently, the Supervisory Board decided to discontinue and
absorb the Americas Committee's responsibilities and supervise all
regions alike going forward.ENQUIRIES
Media |
Investors |
Sarah
Backhouse |
José
Federico Castillo Martinez |
Director of
Global Communication |
Investor
Relations Director |
Michael
Fuchs |
Janine
Ackermann / Robin Achten |
Financial
Communications Manager |
Investor
Relations Manager / Senior Analyst |
E-mail:
pressoffice@heineken.com |
E-mail:
investors@heineken.com |
Tel:
+31-20-5239355 |
Tel:
+31-20-5239590 |
INVESTOR CALENDAR HEINEKEN N.V.
Combined
financial and sustainability annual report publication |
19 February
2021 |
Trading Update
for Q1 2021 |
21 April
2021 |
Annual General
Meeting of Shareholders |
22 April
2021 |
Half Year 2021
Results |
02 August
2021 |
Quotation
ex-interim dividend 2021 |
04 August
2021 |
Interim dividend
payable |
11 August
2021 |
Trading Update
for Q3 2021 |
27 October
2021 |
CONFERENCE CALL DETAILS
HEINEKEN will host an analyst and investor video webcast about
its 2020 FY results combined with an update on the on-going
strategic review at 14:00 CET/ 13:00 GMT/ 08.00 EST. The live video
webcast will be accessible via the company’s website:
https://www.theheinekencompany.com/investors/results-reports-webcasts-and-presentations.
An audio replay service will also be made available after the
webcast at the above web address. Analysts and investors can
dial-in using the following telephone numbers:
United Kingdom
(Local): 020 3936 2999 |
Netherlands: 085
888 7233 |
USA: 1 646 664
1960 |
All other
locations: +44 20 3936 2999 |
Participation
password for all countries: 293180 |
Editorial information:HEINEKEN is the world's most international
brewer. It is the leading developer and marketer of premium and
non-alcoholic beer and cider brands. Led by the Heineken® brand,
the Group has a portfolio of more than 300 international, regional,
local and specialty beers and ciders. We are committed to
innovation, long-term brand investment, disciplined sales execution
and focused cost management. Through "Brewing a Better World",
sustainability is embedded in the business. HEINEKEN has a
well-balanced geographic footprint with leadership positions in
both developed and developing markets.
We employ over 84,000 employees and operate breweries,
malteries, cider plants and other production facilities in more
than 70 countries. Heineken N.V. and Heineken Holding N.V. shares
trade on the Euronext in Amsterdam. Prices for the ordinary shares
may be accessed on Bloomberg under the symbols HEIA NA and HEIO NA
and on Reuters under HEIN.AS and HEIO.AS. HEINEKEN has two
sponsored level 1 American Depositary Receipt (ADR) programmes:
Heineken N.V.
(OTCQX: HEINY) and Heineken Holding N.V. (OTCQX: HKHHY). Most
recent information is available on HEINEKEN's website:
www.theHEINEKENcompany.com and follow us on Twitter via
@HEINEKENCorp.
Market Abuse Regulation
This press release may contain price-sensitive information
within the meaning of Article 7(1) of the EU Market Abuse
Regulation.
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, developments in the ongoing
COVID-19 pandemic and related government measures, 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,
change 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 of the date of this press release. HEINEKEN does not
undertake any obligation to update these forward-looking statements
contained in this press release. Market share estimates contained
in this press release are based on outside sources, such as
specialised research institutes, in combination
with management estimates.
1 In 2020 restructuring costs amounted to €331 million, mainly
related to this programme. For more details see page 20.
- Heineken NV 2020 Full Year results press release
(10_02_2021)
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