Brewing a Better Future. Nomura European Sustainable and Responsible Investment conference, March 2012

Transcription

1 Brewing a Better Future Nomura European Sustainable and Responsible Investment conference, March 2012

2 Brewing a Better Future: To be the World s Greenest Brewer Vera Zandbergen Manager Global Sustainable Development Lucia Bergamini Senior IR Manager

3 3 HEINEKEN AT A GLANCE

4 HEINEKEN: The premium beer company Excellent growth platforms Top-3 brewer in the world by volume with 214mhl in 2011 Heineken, the world s leading international premium beer More than 200 international, regional, local and specialty beers and ciders Leading brewer and largest beverage distributor in Europe Highly diversified geographic footprint with growing exposure to emerging markets Available in 178 countries: Excellent spread of profits and cash flow 4

5 HEINEKEN: Our brands Heineken, our flagship brand, is the world s leading international premium beer Amstel, Desperados, Sol and Strongbow Gold complement our global brand portfolio Altogheter, we have over 200 international, regional, local and speciality beers and ciders in our portfolio Passion for quality and innovation are at the heart of how we build brands and delight our consumers 5

6 A truly global footprint Volume by region Africa & ME 13% Asia Pacific 12% W Europe 21% Americas 28% C&E Europe 25% EBIT (beia)* by region Heineken OpCo JV Export Licences Africa & ME 21% Asia Pacific 7% Americas 24% W Europe 35% C&E Europe 13% 6 Note: 2011 figures; Group beer volumes; Percentages exclude Head Office *EBIT (beia) includes share of the net profit of joint ventures and associates. Beia is defined as before exceptional items and amortisation of brands and customer relationships.

7 Leveraging leadership in Europe Focused on driving value share and returns Segmentation, Premiumisation and Innovation Growing Heineken Extending the premium portfolio with higher margin products and pack types Investing in and growing key local brands Increase focus on modern trade Focus on wholesale profitability Ongoing costs savings and cash flow generation Top Markets for HEINEKEN in Europe Beer Market* (mhl) Market Position UK 47.8 #1 Netherlands 12.1 #1 Austria 8.7 #1 Greece 4.1 #1 Romania 17.2 #1 Italy 16.8 #1 France 19.5 #2 Spain 35.6 #2 Poland 34.9 #2 Russia 97.1 #3 Drive efficiencies through scale 7 *2010 Source: Plato, November 2011

8 Strong financial track record Value growth strategy yielding results EBIT (beia) m Net profit (beia) m CAGR: organic growth 8% CAGR: organic growth 8.7% * * *2010 restated

9 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

10 10 BREWING A BETTER FUTURE

11 BaBF: our approach on sustainability 11

12 Enabling our Journey Executive level Governance model Incentives for all senior management By % of markets to publish local sustainability reports Renewed Supplier Code based on new approach Engaging stakeholders on our agenda 12

13 Programme Team Steering Committee Global Governance in place ExCo S O Neill Chief CR Officer (chair) A Nasard Chief Commerce Officer M Gross Chief SC Officer M O Hare Chief HR Officer S Hiemstra Regional President AfrME V Zandbergen Manager Global Sustainable Development Global Corporate Relations Global Commerce Global Supply Chain Global HR Global Control & Accounting OpCo Sustainability Committee responsible for local Sustainability Agenda Sustainability Coordinator Local Corporate Relations Local Commerce Local Supply Chain Local HR 13

14 Efficient control ensures timely delivery Quarterly Performance Measurement Performance tied to incentive plan Senior Management Green Gauge audited and basis for external reporting 14

15 HEINEKEN Responsible Imperative - IMPACT Partnerships By 2015 all markets to have a partnership with an NGO/Third party Partner with industry Brands By 2015, responsibility message on all brands 15

16 HEINEKEN Respect Imperative - EMPOWER Local Sourcing By 2020 Achieve 60% local sourcing of raw materials in Africa Healthcare Access to healthcare for 100% of employees and dependants Aim for accident free work environment Social investment 20m funded to HEINEKEN Africa Foundation, enabling annual investment of 1m 16

17 HEINEKEN Green Imperative IMPROVE by 2020 CO2 emissions Reduce by 40% in our breweries Reduce and track in throughout the value chain Implement concept of CO2 neutral brewery ain at least 3 sites Water Reduce by 25% in our breweries Refrigeration Fridges based on green technology 17

18 Improving our footprint through the Total Value Chain 18

19 Brewing a Better Future: Our scores 2010 Trends in 2011 Energy 166 MJ/hl Water 4.5 hl/hl CO2 9.3 kg CO2 equivalent Fridges 80% meets at least 1 of 3 criteria Fatalities Mexico Others 4 10 Accident frequency (production) 1.6 accident/100fte 19

20 20 RESPONSIBLE CONSUMPTION

21 Heineken s core philosophy Beer is a legitimate part of a healthy & balanced lifestyle when consumed in moderation Beer and brewers make a positive contribution to societies We recognise that certain groups & individuals abuse alcohol; this is the issue, not consumption We accept responsibility for marketing & selling responsibly Action on responsible consumption is key The industry alone cannot solve the issue of abuse; responsibility lies with many players Partnership is key 21

22 Leading the responsible beer agenda Consistently apply EHR logo to primary & secondary packaging & all commercial communication New EHR website live globally via heineken.com local sites Deliver EHR through our sponsorships eg. pitch boarding at UCL, Heineken Cup, RWC By 2015 include a responsibility message on all brands Our commercial governance: rules, training and audits in place 22

23 Heineken Making Responsible Consumption Aspirational 23

24 Effective partnerships as an industry leader With the industry With NGOs/Third parties Build reputation Maintain commercial freedom Fair excise tax rates & regime Policy support and capacity building joint local, regional and global actions to prevent and reduce alcohol related harm, shared with and reported to governments and the WHO Dialogue with key stakeholders to promote effective evidence based policies 50 market partnerships by 2015; 32 partnerships currently Focus on: Drinking & driving; underage sales; health related harm; excessive consumption e.g. Taxi Magic in US; Addaction in UK; Alcohelp in Romania Best practice partnership criteria defined & shared with OpCos 24

25 25 LOCAL SOURCING

26 Heineken s footprint in Africa Total African footprint 20 countries 36 breweries (consolidated) 10 breweries (managed) 4 soft drink plants 2 malteries 2 packaging plants (glass, plastic) 2 wineries 1 distillery 1 extract plant Export to virtually all countries Brewery footprint consolidated managed

27 Local Sourcing our method Provide training to farmers and agricultural support Increasing the % of raw materials sourced from local farming communities Recruitment of farmers Agricultural training on best production practices Seed improvement Provide training to small holders farmers and agricultural support Guaranteed demand Capital investments by bank 27

28 Effects of our local sourcing GOALS Secure a sustainable supply of raw materials for our beers in Africa; Help to strengthen the competiveness of the African agricultural sector, eventually lowering the prices of local grains; Improve the livelihoods of rural households over time; IMPACT Economic Impact Assessment Impact of direct jobs in local economies Direct fte s Multiplier Nigeria 3,000 83x Burundi x Rwanda x Sierra Leone x Reduce our own carbon footprint by shortening our supply chains for raw materials and cutting transportation costs 28

29 Summary Focus on revenue growth Focus on building winning brand portfolio, with Heineken as a cornerstone Increasing capital investment in high growth markets and to leverage global scale Ambition: to be the world s greenest brewer Brewing a better future: our approach to sustainability, focused on improve, empower and impact Performance of senior management tied to BaBF agenda 29

30 30 Questions?

31 Solid results in a year of significant investment (mhl/ m) Full Year 2011 Organic Change Group beer volume % Heineken premium volume % Revenue 17, % EBIT (beia) 2, % Net profit (beia) 1, % Diluted EPS (beia) in 2.70 Free operating cash flow 2,093 Net debt/ebitda (beia) 2.2x 31

32 Geographic diversity supporting growth Strong momentum 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) Net profit (beia) Volume in the international premium segment

33 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 33