(Amsterdam, NETHERLANDS) – Heineken N.V. today announced:
- Revenue increase of 7.4% to €18.4 billion (organic growth +3.9% consisting of total consolidated volume growth of 1.5% and increased revenue per hl of 2.4%);
- Group beer volume grew 2.8% organically, with growth in 4 out of 5 regions, driving a gain in global market share;
- Strong Heineken® brand performance with volume growth of 5.3% in the international premium segment, further extending global segment leadership;
- EBIT (beia) broadly in line with prior year, on an organic basis, reflecting upfront spend on business capability building and higher input costs;
- Following acquisition of APB and APIPL, HEINEKEN derives 64% of consolidated beer volume and 59% of EBIT (beia) from emerging markets (on a 2012 pro forma basis);
- Net profit more than doubled to €2.9 billion owing to a non-cash exceptional gain of €1.5 billion, related to revaluation of previously held equity interest in APB and APIPL;
- Net profit (beia) grew 1.6% organically, reflecting the benefit of a lower effective tax rate (beia) and lower organic interest expense;
- Diluted EPS (beia) grew by 8.9% to €2.94 (2011: €2.70);
- TCM2 delivered pre-tax savings of €196 million;
- Free operating cash flow of €1.5 billion and a cash conversion ratio of 80% reflects higher capital investment to drive future growth; and
- Proposed total 2012 dividend of €0.89 per share, an increase of 7.2% (2011:€0.83).
(in mhl or € million unless stated otherwise)
Full Year 2012
Full Year 2011
|Group beer volume||221.2||213.9||3.4||2.8|
|Total consolidated volume||202.0||194.4||3.9||1.5|
|Of which: Consolidated beer volume||171.7||164.6||4.3||2.4|
|Heineken® volume in premium segment||29.1||27.4||6.2||5.3|
|Net profit (beia)||1,696||1,584||7.1||1.6|
|Free operating cash flow||1,484||2,093||-29|
|Net debt/EBITDA (beia)3||2.8x||2.2x|
|Diluted EPS (beia) (in €)||2.94||2.70||8.9|
2 APB and APIPL no longer report with a 3-month delay. For comparison purposes, the EBIT (beia) organic growth calculation is based on 12 months of APB and APIPL share of net profit, assuming HEINEKEN’s joint venture share of 41.9% of APB and APIPL from the beginning of the year is maintained. This includes corrections for accounting changes and fair value adjustments. The 3-month period from 15 August to 14 November 2012 is excluded from the calculation of organic volume and EBIT growth.
3 2012 includes APB and APIPL on a 12 month combined pro forma basis; 2011 includes the Galaxy Pub Estate on a 12 month pro forma basis.
Jean-François van Boxmeer, Chairman of the Executive Board and CEO of Heineken N.V., commented:
“2012 has been another year of strong progress for HEINEKEN. Most notably, acquiring full control of Asia Pacific Breweries significantly expanded our exposure to growth markets and extended our business platform in Asia which, along with Africa and Latin America, continued to perform well in 2012. In the U.S., our portfolio strategy is working, combining a turnaround of the Heineken® brand with continued strong growth of the Mexican brand portfolio.
At the same time we managed a challenging market environment in Europe by continuing to invest in brands and deepening our relationships with customers, which resulted in share gains in many key markets. Across the company we have reduced costs and improved operating efficiencies, delivering €196 million of pre-tax savings under our TCM2 programme.
The Heineken® brand continued its track record of outperformance, growing ahead of the global beer market and further extending its leadership in the International Premium Segment. The launch of global brands such as Desperados, Strongbow Gold and Sol in new markets, as well as successful innovation such as ‘Radler’, all contributed to top-line growth. Innovation introduced in the market within the last 3 years now represents €1 billion, or 5.3% of revenues. All in all, we generated solid results in a challenging but rewarding year for HEINEKEN. Looking to 2013, we are confident that our strategy will further drive continued top-line growth momentum and improved profitability.”
2013 FULL YEAR OUTLOOK
Top-line: HEINEKEN anticipates continued volume and revenue growth momentum in 2013. The higher growth regions of Africa, Latin America and Asia Pacific are expected to more than offset volume weakness in European markets affected by continued economic uncertainty and government-led austerity measures. However, HEINEKEN will continue to seek opportunities in Europe to drive positive price and sales mix.
Global brands: The Heineken® brand is expected to continue to outperform the international premium segment and overall beer market in 2013 by further leveraging HEINEKEN’s global marketing scale, superior brand campaigns and strong execution in the marketplace. In 2013, the continued growth and planned roll-out of HEINEKEN’s other premium global brands – Desperados, Strongbow Gold, Amstel Premium Pilsner and Sol – are expected to support top-line development.
Marketing and selling expenses: HEINEKEN expects marketing and selling (beia) expense as a percentage of revenue to remain broadly stable, reflecting improved marketing spend effectiveness from increased global scale (2012: 12.2%).
Input costs: HEINEKEN forecasts a slight increase in input cost prices (excluding the effect of currency translation).
Total Cost Management 2 (TCM2): HEINEKEN now expects to realise €525 million of cost savings under the TCM2 programme covering the period 2012-2014 (previously €500 million). The increase of €25 million reflects identified cost synergies under the acquisition of Asia Pacific Breweries (APB) and Asia Pacific Investment Pte Ltd (APIPL).
HEINEKEN expects to incur approximately €100 million of further upfront GBS costs through to the end of 2014 (with around two thirds of this spend expected in 2013). As a result of on-going productivity initiatives, HEINEKEN expects an organic decline in the number of employees in 2013.
Effective tax rate: HEINEKEN expects the effective tax rate (beia) in 2013 to be in the range of 27% to 29% (2012: 26.5%). The higher tax rate can be primarily explained by the result of favourable outcomes with tax authorities in 2012 and the full year consolidation of APB and APIPL in 2013 which is subject to a higher effective tax rate.
Interest rate: HEINEKEN forecasts an average interest rate of around 4.5% in 2013 (2012: 5.4%) reflecting lower coupons on bond issuances in 2012.
Cash flow: Cash flow generation is expected to remain strong, further reducing the level of net debt. In 2013, capital expenditure related to property, plant and equipment is forecast to be €1.5 billion (2012: €1.2 billion) primarily reflecting the consolidation of APB and continued investment in higher growth markets to capture anticipated top-line growth. Increased investments in 2013 will be focused on brewing capacity expansions, the upgrading of existing production facilities and new commercial equipment. As a consequence, HEINEKEN expects a cash conversion ratio of below 100% in 2013.
Acquisition of APB and APIPL: The acquisition of APB and APIPL is expected to be marginally EPS accretive in the first year.
Total dividend for 2012
The Heineken N.V. dividend policy is to pay out a ratio of 30% to 35% of full-year net profit (beia). The payment of a total cash dividend of €0.89 per share of €1.60 nominal value for 2012 (total dividend 2011: €0.83) will be proposed to the annual meeting of shareholders. If approved, a final dividend of €0.56 per share will be paid on 8 May 2013, as an interim dividend of €0.33 per share was paid on 4 September 2012. The payment will be subject to a 15% Dutch withholding tax. The ex-final dividend date for Heineken N.V. shares will be 29 April 2013.
Investor Calendar Heineken N.V.
|What’s Brewing Seminar, London||25 March 2013|
|Trading update for Q1 2013||24 April 2013|
|Annual General Meeting of Shareholders (AGM)||25 April 2013|
|What’s Brewing Seminar (location to be determined)||28 June 2013|
|Half Year 2013 Results||21 August 2013|
|What’s Brewing Seminar, New York||6 September 2013|
|Trading update for Q3 2013||23 October 2013|
|Financial Markets Conference, Mexico||5-6 December 2013|