Welcome Welcome Welcome Welcome Welcome …...31% Hungary 12% 6% 5% Russia 3% HEINEKEN CEE markets...
Transcript of Welcome Welcome Welcome Welcome Welcome …...31% Hungary 12% 6% 5% Russia 3% HEINEKEN CEE markets...
Welcome Welcome Welcome
Welcome Welcome
Welcome Welcome Welcome
Welcome
London | 25 March 2013 | Heineken NV
London | 25 March 2013 | Heineken NV
Jan Derck van Karnebeek President Central & Eastern Europe
A leading brewer in Central & Eastern Europe
What’s Brewing Seminar
3
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.
Agenda
4
HEINEKEN: Central & Eastern Europe
1 A large and diverse beer market
2 CEE: A key region for HEINEKEN
3 Strategic focus on driving profit growth
4 Key markets update
5
Central & Eastern Europe: A large and diverse beer market1…
1 Countries on the map correspond to HEINEKEN CEE region
Source: Plato Logic Statistics, 2012 Nov
0
100
200
300
400
500
600
Total Europe NorthAmerica
HEINEKENCEE markets
LatinAmerica
Total beer consumption 2012 in mhl
Poland
Belarus
Hungary
Croatia
Bulgaria
Slovakia
Romania
Austria
Mac.
Greece
Russia
Serbia
Czech Republic
Germany
6
…with varying levels of per capita consumption
Per capita consumption in HEINEKEN CEE countries (2012)
Source: Plato Logic Statistics, 2012 Nov
146
111 110
101
84 80
74 71 69 67
51 50
32 30
Czech R
epu
blic
Germ
any
Austr
ia
Pola
nd
Ro
man
ia
Cro
atia
Slo
vakia
Bulg
aria
Hu
nga
ry
Ru
ssia
Bela
rus
Serb
ia/M
onte
neg
ro
Gre
ece
Ma
ce
don
ia
Average 82 litres per cap.
7
Rising incomes to enhance consumer spending power and future value growth
GDP per capita CAGR (2012-20) in HEINEKEN CEE countries
Source: Plato Logic Statistics, 2012 Nov
3.6% 3.6% 3.4% 3.4%
3.2% 3.0% 3.0%
2.7% 2.6%
2.4% 2.3%
1.9% 1.9%
1.6%
Ru
ssia
Bela
rus
Bulg
aria
Ro
man
ia
Serb
ia
Slo
vakia
Pola
nd
Czech R
epu
blic
Cro
atia
Ma
ce
don
ia
Hu
nga
ry
Gre
ece
Austr
ia
Germ
any
2012-20 CAGR 2%
8
A well diversified volume and profit pool
Source: Plato – November 2012, UBS Report– August 2012
Note: Macedonia profit pool data not available
32%
31%
12%
6%
5%
3%
HEINEKEN CEE markets beer volume
share FY 2011(297 mhl)
Russia
Germany
Poland
Romania
Czech Republic
Austria
Hungary
Serbia
Bulgaria
Belarus
Slovakia
Greece
Croatia
25%
25% 16%
8%
8%
6%
HEINEKEN CEE markets beer EBIT share
FY 2011 (US$3.6 billion)
Russia
Germany
Poland
Romania
Czech Republic
Austria
Hungary
Serbia
Bulgaria
Belarus
Slovakia
Greece
Croatia
Agenda
9
HEINEKEN: Central & Eastern Europe
1 A large and diverse beer market
2 CEE: A key region for HEINEKEN
3 Strategic focus on driving profit growth
4 Key markets update
10
CEE represents a significant value opportunity for HEINEKEN
1 Pro-forma with APB for 12 months
Source: HEINEKEN FY2012 results
26%
74%
2012: Consolidated Beer Volume split1
HEINEKEN CEE
Other Regions
17%
83%
2012: Revenue split1
HEINEKEN CEE
Other Regions
11%
89%
2012: EBIT (beia) split 1
HEINEKEN CEE
Other Regions
8%
92%
2012: Heineken® Brand Volume
HEINEKEN CEE
Other Regions
11
10
8
4 4
2
1
Heineken Carlsberg SAB MolsonCoors ABInBev Efes
HEINEKEN leading in #1 and #2 positions
Number of markets with #1 and #2 positions in HEINEKEN CEE1region
1 Based on markets in which HEINEKEN has direct brewery operations (excluding export), which include Russia, Belarus, Bulgaria, Romania,
Serbia, Slovakia, Poland, Czech Republic, Croatia, Macedonia, Hungary, Greece, Austria and Germany
Company’s Presence (no. of markets in HEINEKEN CEE region)
14 11 5 7 2 1
12
Leading market positions to shape regional growth strategy
1 In Germany, HEINEKEN operates under 2 business models: JV with BHI and direct distribution of some brands
Source: HEINEKEN, based on Nielsen and Brewers association data (2012)
Joint Venture
Operating Company
Export
#2
#2
#2
#2
#2
#1
#1
#1
#1
#1
#4
#3
#3
> 31
#3
#2
#2
13
HEINEKEN has a balanced exposure to key regional markets
24%
21%
12%
8%
4%
3%
2%
26%
Group Beer Volume split (2012)
Russia
Poland
Romania
Austria
Greece
Slovakia
Croatia
OtherMarkets
EBIT (beia) split (2012)
349m€ EBIT (beia)
55mHL
14
HEINEKEN benefits from an unrivalled brand portfolio
* licensed
Austria Czech
Republic Greece Poland Romania Russia Serbia Slovakia Others
INTERNATIONAL
PREMIUM
Heineken®
Desperados
Heineken®
Zlaty Bazant
Aflligem
Heineken®
Fischer
Sol
Strongbow
Heineken®
Desperados
Paulaner
Heineken®
Amstel
Sol
Desperados
Heineken®
Amstel
Zlaty Bazant
Desperados
Guinness*
Heineken®
Amstel
Heineken®
Zlaty Bazant
Desperados
Paulaner
LOCAL
PREMIUM
Zipfer
Edelweiss
(specialty)
Zywiec
Strong Ciuc
Bochkarev
Dr. Diesel
Zlaty Bazant
Krusovice
(UPPER)
MAINSTREAM
Gosser
Puntigamer
Kaiser
Krusovice
Starobrno
Zlatopramen
Hostan
Amstel
Zorbas Warka
Goldenbrau
Silva
Ohota
PIT
Pils Plus
Starobrno
Corgon
Kulmbacher
Kapuziner
Soproni
Bobrov
(LOWER)
MAINSTREAM
Schwechater
Kaiser Breznak Alfa
Tatra
Specjal
Lezajsk
Bucegi
Neumarkt
Hategana
Harghita
Tri Medvedya
Stepan Razin
Amur-Pivo
Zhigulevskoye
Bereg Baikala
Okskoe
Shikhan
Patra
Volnaya Sibir
Zajecarsko
Kelt
15
HEINEKEN is winning in the market place
1Based on markets in which HEINEKEN has direct brewery operations (i.e. excluding export markets)
Source: HEINEKEN CEE actual volume data, Plato November 2012
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2008 2009 2010 2011 2012
HE
INE
KE
N’s
CE
E G
roup b
eer
volu
me (
mhl)
Positive market share momentum1
Group Beer Volume (mhl) HEINEKEN CEE market share
Agenda
16
HEINEKEN: Central & Eastern Europe
1 A large and diverse beer market
2 CEE: A key region for HEINEKEN
3 Strategic focus on driving profit growth
4 Key markets update
17
CEE: Long term value creation opportunity
Bubble represents size of the profit pool (₌ €500m)
Western Europe
Central & Eastern Europe
North America
Latin America
Africa
Asia (ex China)
China
0
10
20
30
40
50
60
70
80
90
100
0 5 10 15 20 25
Per
capita c
onsum
ption
2011
EBIT/ hl (€)
Source: Plato – November 2012, UBS report – August 2012, HEINEKEN
Western Europe includes UK, Spain, France, Italy, Netherlands, Belgium, Portugal, Switzerland, Sweden, Finland, Denmark, Ireland, Norway
CEE is comprised of Slovakia, Austria, Czech Republic, Bulgaria, Serbia, Romania, Poland, Croatia, Greece, Germany, Russia, Belarus, Hungary. Macedonia data N.A.
North America includes USA, Canada and Greenland and excludes Mexico (included in Latin America)
18
A strategic focus on revenue per hl growth
Revenue Management Strategic Drivers
Improving Revenue / hl and profitability
Brand and
Portfolio
management
Mix and
Innovation
Global
brands
Outlet Execution,
Modern Trade
Capabilities
19
Heineken® brand offers an exciting growth opportunity
Source: HEINEKEN
0
500
1,000
1,500
2,000
2,500
3,000
2008 2009 2010 2011 2012
Heineken® brand volume (khl)
Rest of CEE Greece
0 5 10 15 20 25
CEE
Africa
Americas
WER
Asia
Heineken® brand volume as % of Group beer volume
Group
Average
Brands
Mix,
Innovation
Global
brands
Execution
20
Heineken®: Powerful activation and execution
Global platforms
& creation of
local relevance
Scaling-up distribution
(Numeric distribution everywhere)
Iconic trade visibility
Affordable Packaging
25cl and 40cl bottle launches Brands
Mix,
Innovation
Global
brands
Execution
21
Heineken® commercial Video
Brands
Mix,
Innovation
Global
brands
Execution
22
Successful roll-out of Desperados
Source: HEINEKEN
Available in 19 countries
across CEE region
Average price index is almost
2 times mainstream brands
Desperados Fuego line
extension recently launched
in Germany
Brands
Mix,
Innovation
Global
brands
Execution
0
100
200
300
400
500
600
2009 2010 2011 2012
khl
Desperados volume in CEE
Poland Rest of CEE
23
Innovation is key to winning with consumers
1 Innovation rate calculated as revenues generated from innovations
introduced in the past 12 quarters divided by total revenue
12.3%
5.3% 6.0%
CEE FY2012 HEINEKENGroup FY2012
2020 Target
Innovation rate1
0
2,000
4,000
6,000
8,000
2010 2011 2012
Innovation volume in CEE
CAGR: +36%
Brands
Mix,
Innovation
Global
brands
Execution
Khl
24
‘Radlers’ are a proven success story
Source: HEINEKEN
Radler: An innovative mix of beer and natural lemon juice
Brands
Mix,
Innovation
Global
brands
Execution
2012 1.400 khl BELARUS
BULGARIA
CZECH
MACEDONIA
POLAND
ROMANIA
RUSSIA
SERBIA
2011 700 khl CROATIA
SLOVAKIA
2009 250 khl AUSTRIA
HUNGARY
25
HEINEKEN has the most complete Radler portfolio
Brands
Mix,
Innovation
Global
brands
Execution
26
Radler commercial COMMERCIAL (Warka and Ciuc)
Brands
Mix,
Innovation
Global
brands
Execution
27
Building winning portfolios in Poland A complete brand offer to match consumer demand
Source: Nielsen, Price Index vs Ttl Beer Price, MAT 2012
International premium
Brands
Mix,
Innovation
Global
brands
Execution
Local premium
Mainstream
Lower Mainstream
180 130
120
100 100 95
85 85
28
Developing leading local brands
Source: HEINEKEN
Brands
Mix,
Innovation
Global
brands
Execution
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2007 2008 2009 2010 2011 2012
Gösser brand: Market share evolution in Austria
29
Local brand commercial COMMERCIAL (Gosser)
Brands
Mix,
Innovation
Global
brands
Execution
30
It is all about execution!
* HEINEKEN CEE volumes / Each unit represents a 500ml glass of beer
Everyday moments of truth...
Brands
Mix,
Innovation
Global
brands
Execution
…in a largely fragmented market…
We win by deploying key assets…
…and the right people
~30 million beers
consumed daily*
414K routed outlets
156K draught beer installations
5,100 sales people
391K fridges
31
Benchmarking and driving outlet execution
Source: HEINEKEN
Excellent Outlet Execution (EOE)
Brands
Mix,
Innovation
Global
brands
Execution
Ex
ce
llen
t Ou
tlet E
xe
cu
tion
Low sell out drivers Towards sell out drivers Sell out drivers
Stage I
Stage II
Stage III
0 2.5 7.5 10
OpCo OpCo OpCo
OpCo OpCo OpCo
5.0
OpCo OpCo OpCo OpCo OpCo OpCo
32
Execution commercial Commercial (Festival activation)
Brands
Mix,
Innovation
Global
brands
Execution
33
Leading on price across the region
1 Price increase in Belarus, Romania and Russia before excise duty increases
HEINEKEN Russia increased prices 3 times (Nov 2012, Dec 2012 and Feb 2013) in anticipation of the excise duty increase
Source: HEINEKEN
Price increases taken in Q1
20131
Low single digits
Mid single digits
High single
Brands
Mix,
Innovation
Global
brands
Execution
Feb.’13
Jan.’13
Feb.’13
Mar.’13 Jan.’13
Jan.’13
Mar.’13
Jan.’13
Jan.’13 Feb.’13
Jan.’13
Jan.’13
Jan.’13
Jan.’13 Jan.’13
34
Fixed cost growth well below inflation
Key cost-focused programmes:
Complexity reduction
Route to market optimisation
Management and support cost control
Personnel cost management
Review of other fixed costs
4.9%
-6.4%
3.4%
0.6%
4.4%
3.1%
4.7% 4.0%
-7.0%
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
2009 2010 2011 2012
HEINEKEN fixed cost base
growing below inflation
HEINEKEN CEE organic fixed cost growth (%) HEINEKEN CEE blended inflation (%)
35
Driving a high performance culture…
Growing local senior management and talent
Foster a strong performance culture
Investing in local senior
management and talents
Investing in talent and leadership
development programmes for
future leaders
A consistent performance
management process that goes
deep in the organisation
Horizontal and vertical alignment
of business goals
35% 36%
86%
2011 2012 2013
CEE intra-regional promotions as % of CEE MT/ SM vacancies
CEE intra-regional promotions as % of CEE MT/ SM vacancies
MT = management team
SM = senior management
100
1,150
1,800
2012 2013 2014 onwards
# of employees in the HEINEKEN Performance Management process
36
…whilst building engagement
Increasing employee engagement
Culture of learning from each other
Employees feel more engaged
Employees’ perception on Cooperation
and Teamwork increased
Employees’ perception on Personal
Development increased
Using collaborative sites for sharing best
practices
Operating company practices shared at all
regional functional meetings
50
60
70
80
90
2010
2012
Agenda
37
HEINEKEN: Central & Eastern Europe
1 A Large and diverse beer market
2 CEE: A key region for HEINEKEN
3 Strategic focus on driving profit growth
4 Key markets update
38
Austria
*Source: Plato Logic Statistics, 2012 Nov
**UBS Global Beer ; August 2012
*** AC Nielsen, 2012 November
brewery
Vienna
2012
Total market size (mhl)* 9.2
World Ranking** #32
Consumption per capita (L)* 109.5
HEINEKEN market share*** 48.90%
HEINEKEN market position*** #1
Revenue / HL High
39
Austria: Solid value share and profit growth in a mature market
Brau Union Austria success factors:
Focus on beer culture
Strong brands
Continued innovation
Successful implementation
of price increases
Market share broadly stable at 49%
34.8%
38.5%
58.4%
59.0%
35,1%
36,9%
30%
35%
40%
45%
50%
55%
60%
2009 2010 2011 2012
Brau Union Austria: Market share evolution per segment
Economy
Mainstream
Premium
40
Russia
*Source: Plato Logic Statistics, 2012 Nov
**UBS Global Beer ; August 2012
*** AC Nielsen, 2012 November
2012
Total market size (mhl)* 94.9
World Ranking** #4
Consumption per capita (L)* 66.5
HEINEKEN market share*** 13.40%
HEINEKEN market position*** #4
Revenue / HL Low
brewery
Moscow
41
Russia: Positive volume and value growth momentum
HEINEKEN Russia commercial focus:
Portfolio strategy per city
Heineken® and Amstel® premium brands
Innovation
Increasing prices across the portfolio
Source: Nielsen data – Feb 2013
2011 2012
HEINEKEN Russia EBIT (beia) evolution
2x
12,1%
13,4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012
Market share evolution
Others HEINEKEN
42
Romania
*Source: Plato Logic Statistics, 2012 Nov
**UBS Global Beer ; August 2012
*** AC Nielsen, 2012 November
2012
Total market size (mhl)* 18.0
World Ranking** #23
Consumption per capita (L)* 84.1
HEINEKEN market share*** 33.80%
HEINEKEN market position*** #1
Revenue / HL Low
Bucharest
brewery
43
Romania: Successful value creation in a highly competitive market
HEINEKEN Romania success factors:
Strategic partnership with distributors
Strong brand portfolio management
Radler and non-alcoholic beers
Excellent outlet execution programme
Tight cost control
Optimal capacity utilisation 29,7%
33,8%
2009 2012
Market share evolution
2009 2012
HEINEKEN Romania EBIT (beia) evolution
2.5x
44
Summary
CEE is, by volume, a very large beer region, with significant profit upside from
rising disposable income
HEINEKEN is a leading regional brewer, with broad access to key markets and an
unrivalled brand range
HEINEKEN is thus positioned to lead the region, with a focus on value creation:
Driving our Global Brands
Rolling out Innovations
Leveraging our broad portfolios
Executing in the market place
Leading on pricing
Controlling costs
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