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Feb. 12, 2020, 1:00 a.m. EST

Heineken N.V. reports 2019 full year results

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(GLOBE NEWSWIRE via COMTEX) -- Amsterdam, 12 February 2020 - Heineken N.V. /zigman2/quotes/202537894/composite HEI.A -0.07% (otcqx:HEINY) announces:

- Net revenue (beia) organic growth +5.6%; net revenue (beia) per hectolitre +3.3%

- Consolidated beer volume +3.1%

- Heineken(R) volume +8.3%, best performance in over a decade

- Operating profit (beia) organic growth +3.9%

- Operating profit (beia) margin 16.8% (-12 bps)

- Net profit (beia) EUR2,517 million, +4.3% organically

- Diluted EPS (beia) EUR4.38 (2018:EUR4.18).

CEO STATEMENT

Jean-Francois van Boxmeer, Chairman of the Executive Board / CEO, commented:

"In 2019, we delivered another year of superior top-line growth, with continued strong performance in the second half. Growth was well balanced with beer volume up 3.1% and revenue per hectolitre up 3.3%, driven by robust pricing and focus on premiumisation. The Heineken(R) brand growth accelerated to 8.3%, with more than 40 countries delivering double digit growth. The successful roll-out of Heineken(R) 0.0 continued and it is now available in 57 markets.

Our strategy continues to be growth oriented with an ever-increasing emphasis on the sustainability of this growth, both socially and environmentally. Over the past decade, we have lowered our water usage by almost a third to 3.4 hectolitres of water per hectolitre produced, ahead of our 2020 target. We increased the proportion of renewable energy in production to 19%. In more than 60 markets, we spent over 10% of Heineken(R) media budgets on responsible consumption awareness campaigns.

We closed the year with an operating profit (beia) organic growth of 3.9%. In a context of increased input costs, we have continued to work on the efficiency of our operations whilst steadily investing behind our brands, our sustainability agenda and our digital transformation.

Looking ahead to 2020, we expect our operating profit (beia) to grow by mid-single digit on an organic basis, barring major negative macro economic and political developments."

FINANCIAL SUMMARY1







        IFRS Measures                 EUR million            Total growth            BEIA Measures                        EUR million            Organic growth2
        Revenue                       28,521       6.4        %            Revenue (beia)                       28,443       5.2        %
        Net revenue                   23,969       6.6        %            Net revenue (beia)                   23,894       5.6        %
        Operating profit              3,633        16.4       %            Operating profit (beia)              4,020        3.9        %
                                     Operating profit (beia) margin       16.8       %                     
        Net profit                    2,166        13.2       %            Net profit (beia)                    2,517        4.3        %
        Diluted EPS (in EUR) 3.77         12.5       %            Diluted EPS (beia) (in EUR) 4.38         4.9        %
                                                                           Free operating cash flow             2,228         
                                                                                              Net debt / EBITDA (beia)3            2.6x                             
        


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. Last year figures restated for IAS 37. Please refer to page 24 for more details.

2 Organic growth shown, except for Diluted EPS (beia) which is total growth. The impact from IFRS 16 is reflected on all metrics, but is excluded from the organic growth calculation.

3 Includes acquisitions and excludes disposals on a 12 month pro-forma basis and includes the first time impact of IFRS 16.

FULL YEAR 2020 OUTLOOK STATEMENT

For 2020, we anticipate our business to deliver:

- A superior top-line growth driven by volume, price and premiumisation

- A low-single digit increase of input costs per hectolitre, with the benefit of lower prices in some commodities largely offset by transactional currency headwinds

- Continued cost management initiatives and productivity improvements to fuel investment behind our brands, innovation, e-commerce platforms, technology upgrades and sustainability programmes.

As a result, we currently expect operating profit (beia) to grow by mid-single digit on an organic basis, barring major negative macro economic or political developments. In particular it is at this stage not possible to assess the extent and duration of the impact of Coronavirus on the economy and on our business.

We also anticipate:

- An average interest rate (beia) broadly in line with 2019 (2019:2.9%)

- An effective tax rate (beia) broadly in line with 2019 (2019:27.6%)

- Capital expenditure related to property, plant and equipment of around EUR2 billion (2019:EUR1.9 billion).

OPERATIONAL REVIEW

Top-line performance continued to be strong in second part of 2019, with a good balance between price mix and volume growth. Net revenue per hectolitre (beia) grew in all regions on a constant geographic basis, driven by pricing and premiumisation.

Net revenue (beia) grew 5.6% organically, supported by a 3.3% increase in net revenue (beia) per hectolitre and a 2.2% increase in total consolidated volumes. The underlying price mix on a constant geographic basis was up 3.4%. In the second half of the year net revenue (beia) increased 5.7% (1h19:5.6%), with total consolidated volume growth of 2.0% (1h19:2.5%), net revenue (beia) per hectolitre up 3.6% (1h19:3.0%) and price mix on a constant geographic basis of 3.2% (1h19:3.5%).

Consolidated beer volume grew 3.1% organically for the full year. The fourth quarter closed the year strongly with 4.1% growth, benefiting from double-digit growth in Brazil, Vietnam and Cambodia. Premium volumes increased high-single digit with strong growth across all regions and continued positive momentum of Heineken(R).







        Consolidated beer volume                                4Q19                      4Q18                      Organic  FY19                       FY18                       Organic
        (in mhl)                                                                                                    growth                                                         growth
        Heineken N.V.                                           61.1   58.6   4.1  %   241.4   233.8   3.1  %
        Africa Middle East &  Eastern Europe 11.5   11.2   2.7  %   43.7    41.7    4.6  %
        Americas                                                23.3   22.2   5.2  %   85.6    83.3    2.6  %
        Asia Pacific                                            8.4    7.8    12.4 %   31.1    29.0    11.8 %
        Europe                                                  17.8   17.4   0.0  %   81.0    79.8    -0.2 %
        


Heineken(R) volume growth accelerated in the fourth quarter to 12.0% to close the year with 8.3% growth, the best in a decade. The brand grew across all regions with double digit growth in over 40 markets including Brazil, Mexico, South Africa, Nigeria, the UK, Romania and Germany. Brazil is now the largest market for Heineken(R) globally and with the addition of the UK and Nigeria, now 12 markets sell more than one million hectolitres of the brand. The successful roll-out of Heineken(R) 0.0 continues and it is now available in 57 markets.







        Heineken(R) volume                       4Q19                      Organic  FY19                      Organic
        (in mhl)                                                                          growth                             growth
        Total                                                   11.2   12.0 %   41.8   8.3  %
        Africa Middle East &  Eastern Europe 2.1    6.6  %   7.2    11.7 %
        Americas                                                3.8    26.6 %   13.4   16.2 %
        Asia Pacific                                            1.9    7.7  %   6.2    2.2  %
        Europe                                                  3.4    4.0  %   14.9   3.1  %
        


The international brand portfolio grew high-single digit, driven by the double digit growth of Tiger and Amstel. Tiger performed strongly in Vietnam, Cambodia and Malaysia. Amstel grew strongly in Brazil, Mexico, Russia, South Africa and the UK.

Craft volume grew mid-single digit to 5.6 million hectolitres with a double-digit expansion in Europe compensating for lower volume in the Americas. Strong performance from craft propositions in Italy, France and Spain continued. Lagunitas is now available in more than 35 markets with local production in the Netherlands and Brazil.

Cider volume was stable at 5.6 million hectolitres (2018:5.6 million). Volume increased double digit outside the UK, with South Africa and Russia in the lead. In the UK, volume declined high-single digit mainly due to a challenging comparable versus last year. We continue to shape cider in new markets with encouraging results in Vietnam and Mexico. Cider is now locally produced in 18 markets.

Low & No-Alcohol (LONO) volume increased high-single digit, delivering 14.1 million hectolitres (2018:13.1 million). The no-alcohol portfolio grew double digit, driven by Heineken(R) 0.0, other line extensions of leading brands and beer mixes. The Zero Zone, a dedicated shelf-space in the off-trade for our non-alcoholic portfolio, is being deployed beyond Europe.

In addition to new products and categories, innovation at HEINEKEN further includes draught systems technology. Volume through our proprietary draught systems grew double digit. The Blade, our counter-top draught system for small outlets, is now available in 32 markets with a range of 30 brands.

/zigman2/quotes/202537894/composite
US : U.S.: NYSE
$ 120.27
-0.09 -0.07%
Volume: 228,106
Dec. 3, 2020 7:00p
P/E Ratio
48.97
Dividend Yield
0.13%
Market Cap
$16.75 billion
Rev. per Employee
$348,415
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