HEINEKEN NV : Heineken N.V. Trading Update - First Quarter 2013
Amsterdam, 24 April 2013 - Heineken N.V. today announced its trading update
for the first quarter of 2013. In the quarter:
*Group beer volume declined 2.7% organically, following strong growth of
4.7% in the comparative prior year period and one less selling day in the
quarter. This performance also reflects volatile global economic
conditions, unfavourable weather conditions and destocking in France and
*Revenue grew 8.1% mainly reflecting the first time consolidation of Asia
Pacific Breweries (ABP) and Asia Pacific Investment Pte Ltd (APIPL).
Revenue declined 2.7% organically with lower volume only partly offset by
revenue per hectolitre growth of 1.8%;
*Strong performance of APB with low-double digit volume and revenue growth.
The integration of APB is progressing well and is expected to complete by
*Heineken® volume in the international premium segment was 4.7% lower
(declined in the low single digits after adjusting for one less selling
day and destocking);
*EBIT (beia)^1 increased in the mid-teens and declined organically by
The first quarter is seasonally less significant in terms of volume and profit
contribution. In 2012, the first quarter represented 21% of consolidated beer
volume and considerably less in terms of profit contribution.
Revenue increased 8.1% to €4,145 million in the first quarter of 2013. First
time consolidations added €449 million (+11.7%) with unfavourable currency
translation movements reducing revenues by €34 million (-0.9%). On an organic
basis, revenue declined 2.7% reflecting lower total consolidated volume of
4.5%, partly offset by revenue per hectolitre growth of 1.8%. Planned price
increases contributed to revenue per hectolitre growth across all regions.
EBIT (beia) grew in the mid-teens including a net positive consolidation and
negative foreign currency impact. On an organic basis, EBIT (beia) declined in
the mid-single digits reflecting lower revenue only partly offset by the lower
phasing of marketing expense and the realisation of TCM2 cost savings.
Reported net profit in the quarter was €227 million compared with €166
million^2 in the first quarter of 2012.
1 The calculation of EBIT (beia) organic growth assumes HEINEKEN's joint
venture share of 41.9% of APB and 50% of APIPL prior to consolidation is
maintained through to 15 November 2013.
2 Restated for revised accounting standard IAS19
IAS19 Impact on financials
The implementation of the revised accounting standard IAS19 is expected to
result in an increase in pre-tax pension expense of €98 million in 2013,
spread equally over each quarter. This comprises an increase of €41 million in
personnel expense (which will reduce EBIT (beia)) and an increase of €57
million in other net finance costs. For the full year 2013, the impact of
IAS19 is expected to reduce net profit (beia) by €75 million and EPS (beia) by
€0.13. In 2013, the first time impact on EBIT (beia), net profit (beia) and
EPS (beia) will be treated as a non-organic item.
Further assessment of the impact of IAS19 on 2012 (for restatement purposes)
resulted in an increase in pre-tax pension expense of €45 million and a
reclassification from personnel expense to other net finance costs of €51
million. This results in a restated 2012 EBIT (beia) of €2,918 million, net
profit (beia) of €1,661 million and EPS (beia) of €2.89.
Changes in consolidation
The main consolidation scope changes impacting financial results include:
*The acquisition of a controlling stake (58.1%) in APB and APIPL (50%),
both consolidated from 15 November 2012;
*The acquisition of Efes Breweries International's 28% stake in Central
Europe Beverages, Serbia, now a wholly owned subsidiary, and disposal of a
28% stake in Efes Kazakhstan on 8 January 2013;
*The divestment of Pago International, a wholly owned subsidiary, on 15
Full year outlook
Global market conditions remain volatile, contributing to a weaker than
expected first quarter. Challenging trading conditions in austerity affected
markets in Europe and inflationary pressures in Nigeria are expected to
continue to impact volume development for the balance of year, leading to a
moderation in organic growth expectations for the full year. Overall, HEINEKEN
still anticipates organic volume and revenue growth for the full year 2013,
with higher growth regions offsetting volume weakness in certain developed
countries. HEINEKEN reaffirms all other elements of its full year outlook for
2013 as stated in its full year 2012 earnings release dated 13 February 2013.
Total Consolidated Volume^3
Regions Q1 2013 Q1 2012 Change (%) Organic Change (%)
Africa & the Middle East 7.0 7.2 -3.4 -3.4
Americas 11.9 11.8 0.5 -2.0
Asia Pacific 4.1 0.3 >100 -1.4
Central & Eastern Europe 9.2 9.6 -4.3 -3.5
Western Europe 12.0 13.1 -8.0 -8.3
Total 44.2 42.0 5.2 -4.5
Total consolidated volume declined organically by 4.5% in the first quarter.
This reflects lower consolidated beer, third party product and cider volume
and growth in soft drinks volume.
Consolidated Beer Volume^3
Regions Q1 2013 Q1 2012 Change (%) Organic Change (%)
Africa & the Middle East 5.5 5.7 -4.6 -4.6
Americas 11.5 11.8 -1.7 -2.4
Asia Pacific 4.0 0.3 >100 -1.4
Central & Eastern Europe 8.7 9.0 -3.7 -3.7
Western Europe 8.3 9.1 -8.6 -8.8
Total 38.0 35.9 5.8 -4.7
Group Beer Volume (mhl) ^ 4
Regions Q1 2013 Q1 2012 Change (%) Organic Change (%)
Africa & the Middle East 6.9 7.3 -4.3 -4.3
Americas 14.3 14.6 -1.7 -2.4
Asia Pacific 6.9 7.0 -2.1 8.0
Central & Eastern Europe 10.1 10.4 -3.0 -3.0
Western Europe 8.5 9.2 -8.6 -8.7
Total 46.7 48.5 -3.8 -2.7
3 Total consolidated volume and consolidated beer volume in the Asia Pacific
region includes the first time consolidation of APB / APIPL acquired on 15
November 2012. Accordingly, APB / APIPL are excluded from the consolidated
beer volume organic growth calculation until 15 November 2013.
4 Group beer volume organic growth calculation in the Asia Pacific region is
adjusted for the previous 3-month delay reported by APB / APIPL, without a
restatement to Q1 2012 volume.
Group beer volume development in the first quarter 2013
In Africa & the Middle East, group beer volume declined by 4.3%, against
strong growth in the comparable prior year period, continued soft consumer
demand in Nigeria and the effect of a significant excise duty increase in the
Democratic Republic of Congo in the fourth quarter of 2012. Volume in Nigeria
declined in the mid-single digits as high inflation places pressure on
household disposable incomes and continues to inhibit consumer spending.
Volume in South Africa grew in the mid-single digits, led by growth of the
Amstel and Heineken® brands, with a resulting gain in market share. Volume in
Ethiopia grew strongly in the double digits.
In the Americas, group beer volume declined by 2.4%. In Mexico, domestic
volumes grew marginally, primarily reflecting softer beer category consumption
from unfavourable weather. In the US, sales to retailers declined in the
low-single digits, outperforming the overall market and leading to further
market share gains. Volume in Brazil declined in the mid-single digits, in
line with the beer market.
In Asia Pacific, group beer volume grew 8% organically, driven by a low-double
digit growth of APB, led by accelerated volume gains in Vietnam, China,
Malaysia and Indonesia. Volume of United Breweries Limited (UBL), our joint
venture operation in India, increased in the low-single digits. Following the
consolidation of APB from 15 November 2012, the business has been successfully
integrated within HEINEKEN.
In Central & Eastern Europe, group beer volume declined by 3% organically. The
implementation of recent price increases contributed to solid revenue per
hectolitre and slight revenue growth in the quarter. Volume in Russia declined
in the mid-single digits following new legislation banning the sale of
alcoholic products in kiosks and a further excise duty increase. Volume in
Poland declined in the mid-single digits, impacted by adverse weather and low
consumer confidence. Volume in the Czech Republic grew in the low-single
digits, whilst volumes in Austria and Romania were in line with the prior year
quarter. In Greece, despite the ongoing difficult economic conditions,
domestic beer volume was stable supported by the launch of Amstel Radler and
growth of the Alfa brand.
In Western Europe, group beer volume declined by 8.7% organically. Severe cold
and wet weather conditions across key markets were compounded by the difficult
economic conditions and government-imposed austerity measures which continued
to impede consumer spending. Volume in the UK, Italy, Netherlands and Spain
all declined in the mid- to high-single digits. In France, volume declined as
expected following destocking related to the significant excise duty increase
announced in December 2012. In the first quarter, new 'Radler' brand
extensions were launched under the Amstel (Spain and the Netherlands),
Foster's (UK and Finland), Dreher (Italy), Sagres (Portugal) and Maes
(Belgium) and Calanda (Switzerland) brands.
Heineken® volume in the international premium segment^5
Regions Q1 2013 Organic Change (%)
Africa & the Middle East 0.8 0.9
Americas 1.8 -5.8
Asia Pacific 1.5 1.9
Central & Eastern Europe 0.4 0.0
Western Europe 1.3 -13.6
Total 5.8 -4.7
Volume of the Heineken® brand in the international premium segment declined
4.7% in the first quarter. As part of the Heineken® 'Open Your World' global
marketing campaign, 'The Final' went on-air in over 35 markets, with the
brand's sponsorship of the UEFA Champions League being activated in around 100
5 Heineken® premium volume organic growth calculation in the Asia Pacific
region is adjusted for the previous 3-month delay reported by APB / APIPL,
without a restatement to Q1 2012 volume.
The issuance of 8-year Notes for a principal amount of €500 million with a
coupon of 2.0% on 4 April 2013 was followed by the private placement of
various Notes with a weighted average yield of 2.75%. On 15 April 2013,
HEINEKEN issued 20-year Notes for a principal amount of €180 million. On 16
April 2013, 2-year Notes were issued for a principal amount of SGD75 million.
On 18 April 2013, HEINEKEN issued 5-year Notes for a principal amount of €100
million. On 19 April 2013, HEINEKEN issued 20-year Notes for a principal
amount of €100 million. The proceeds of the Notes will be used for general
corporate purposes. The Notes have been issued under the Company's Euro Medium
Term Note Programme and the euro denominated Notes have been listed on the
Luxembourg Stock Exchange.
Investor calendar Heineken N.V.
Annual General Meeting of Shareholders (AGM) 25 April 2013
What's Brewing Seminar (Sustainability), Paris28 June 2013
Half Year 2013 Results21
What's Brewing Seminar (USA), New York 6 September 2013
Trading update for Q3 2013 23
Financial Markets Conference, Mexico 5-6 December
HEINEKEN will host an analyst and investor conference call in relation to this
trading update today at 9:00 CET/ 8:00 BST. The call will be audio cast live
via the Company's website: 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:
Local line: +31-(0) 45-631-6902 Local line:
Toll-Free: 0800-265-8611 Toll-Free:
Press enquiries Investor and
John Clarke George
Head of External CommunicationDirector of Investor
John-Paul Schuirink Aarti Narain
Financial Communications Manager Investor Relations Manager
Tel: +31-20-5239355 Tel: +31-20-5239590
Organic growth excludes the effect of foreign currency translational effects,
consolidation changes, accounting policy changes, exceptional items and
amortisation of acquisition related intangibles. Beia refers to financials
before exceptional items and amortisation of acquisition related intangibles.
Group beer volume includes 100 percent 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 percent 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.
HEINEKEN is a proud, independent global brewer committed to surprise and
excite consumers with its brands and products everywhere. 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. The Company'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 wants to win in all markets with Heineken® and with a full brand
portfolio in markets of choice. The Company is present in over 70 countries
and operates more than 165 breweries with volume of 221 million hectoliters of
group beer sold. 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 250 international premium, regional, local and
specialty beers and ciders. These include Heineken®, Amstel, Anchor, Biere
Larue, Bintang, Birra Moretti, Cruzcampo, Desperados, Dos Equis, Foster's,
Newcastle Brown Ale, Ochota, Primus, Sagres, Sol, Star, Strongbow, Tecate,
Tiger and Zywiec. Our leading joint venture brands include Cristal and
Kingfisher. Pro forma 2012 revenue totaled €19,765 million and EBIT (beia)
€3,151 million. The number of people employed is over 85,000. 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 HEINEKEN's website:
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 estimates.
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Source: HEINEKEN NV via Thomson Reuters ONE
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