Heineken N.V. reports 2013 half year results: Resilient performance in challenging market conditions
(Thomson Reuters ONE) -
HIGHLIGHTS
* Group revenue grew 3% including the full consolidation of APB[1];
organically, group revenue 1% lower with a total volume decline of 3% and
revenue per hectolitre up 2%
* Group operating profit (beia) increased 5%; organically, group operating
profit (beia) was in line with last year
* Strong underlying performance of APB, with volume growth of 10% and
operating profit growth of circa 20%; integration successfully completed
* Developing markets delivered 7% organic operating profit (beia) growth and
now comprise half of group operating profit (beia)
* ?139 million of pre-tax TCM2 cost savings delivered in the first half of
2013; additional programme cost savings of ?100 million identified
* Net profit (beia) of ?679 million, broadly in line with prior year on an
organic basis; diluted EPS (beia) declined 1%
CEO STATEMENT
Jean-François van Boxmeer, Chairman of the Executive Board & CEO, commented:
"We continue to operate in a challenging trading environment. While this has
impacted our organic top-line performance, our increased emphasis on higher
growth regions is delivering, with organic operating profit in developing
markets growing 7%. Our ongoing focus on costs has generated a further ?139
million of savings in the first half of 2013. Although the volume trends have
improved in July with the warm summer weather in Europe, economic conditions in
several of our core markets continue to constrain consumer spending. However, we
will continue to strengthen our business through sustained brand investment and
a focus on delivering value through on-going revenue management and cost saving
initiatives."
OPERATIONAL OVERVIEW
Key financials[2] HY13 HY12 Total Organic growth
(in mhl or ? million unless otherwise growth %
stated) %
Group revenue 10,375 10,070 3 -1
Group revenue/ hl (in ?) 94 90 4 2
Group operating profit (beia) 1,448 1,378 5 -
Group operating profit (beia) margin 14.0% 13.7% +30bps
Consolidated revenue 9,354 8,778 7 -3
Consolidated operating profit (beia) 1,327 1,150 15 -2
Net profit (beia) 679 688 -1 -
Net profit 639 766 -17
Diluted EPS (beia) (in ?) 1.18 1.19 -1
Free operating cash flow 178 345 -48
Net debt/ EBITDA (beia)[3] 2.9x 2.2x
[1] Asia Pacific Breweries and Asia Pacific Investment Pte Ltd
[2] Refer to the Definitions and Glossary sections for an explanation of non-
IFRS measures and other terms used throughout this report; 2012 financials have
been restated for the impact of revised IAS19
[3] Includes APB on a 12 month combined pro forma basis
Group revenue declined 1% organically, as a 3% decline in group total volume was
only partly offset by a 2% increase in group revenue per hectolitre. The decline
in group beer volume reflects a combination of unseasonably wet and cold weather
conditions and continued weak consumer sentiment in Europe and the U.S. This was
further compounded by a moderation in economic growth in key developing markets
and the negative effect of destocking in France following a substantial excise
duty increase in January 2013. Group operating profit (beia) was in line with
prior year on an organic basis. Group operating profit (beia) margin expansion
of 30 basis points was led by the full consolidation of APB and higher margins
in the Americas region. Margins also benefited from the one-time disposal of
assets in Europe.
Heineken® & Innovation 2Q13 Organic HY13 Organic
(in mhl or %) growth growth
% %
Heineken® in premium segment 7.5 -1 13.3 -3
Africa Middle East 0.9 7 1.7 4
Americas 2.2 - 4.0 -3
Asia Pacific 1.4 -2 2.9 -
Central & Eastern Europe 0.8 2 1.2 2
Western Europe 2.2 -5 3.5 -9
Innovation rate 6.0%
Heineken® volume in the international premium segment declined by 3% against
strong growth of 6% in the comparable prior year period. Excluding the impact of
one less selling day and destocking in France and the U.S, Heineken® volume was
in line with prior year. The continued success of the 'Open Your World' campaign
and sustained brand investment continue to support strong brand equity for
Heineken®. At the recent Cannes Lions International Festival of Creativity, the
Company won 17 Lion awards, 15 of which were for the Heineken® brand, including
the prestigious Grand Prix for Creative Effectiveness.
HEINEKEN has a strong innovation pipeline and has continued to utilise its
portfolio of global and local brands to drive initiatives which can be rolled
out across multiple markets. In the first half of 2013, the innovation rate
reached 6%, with innovation contributing over ?600 million of revenues during
the period. The new 'Radler' product varieties (a mix of beer and 100% natural
juice) were successfully launched in a further 12 markets, bringing the total
number of markets with local 'Radler' beers to 24 across three regions. Our
global cider brand, Strongbow Gold, was launched in Mexico in 2013 with
encouraging early results.
TCM2 Cost Savings (pre-tax) HY13 % of total Cumulative % of total
(in ? million) savings (since 2012) savings
HEINEKEN 139 100% 335 100%
Africa Middle East 23 17% 44 13%
Americas 38 27% 67 20%
Asia Pacific 11 8% 11 3%
Central & Eastern Europe 23 17% 73 22%
Western Europe 29 20% 100 30%
Head Office 15 11% 40 12%
TCM2 delivered ?139 million of pre-tax cost savings in the first half of 2013.
Supply chain and commerce contributed 59% and 22% of realised cost savings,
respectively. Reduced fixed costs represent approximately two thirds of total
cost savings mainly across supply chain, commerce, wholesale and global support
functions. In the first half of the year, upfront costs related to the set-up of
the GBS organisation were ?31 million (including capitalised IT infrastructure
costs of ?9 million).
This brings the cumulative amount of upfront GBS costs to ?133 million, of which
?104 million has been expensed (primarily in Head Office) and ?29 million
capitalised.
OUTLOOK STATEMENT
(Based on consolidated reporting)
* Top-line: For the remainder of the year, economic uncertainty and ongoing
weak consumer sentiment is expected to persist across many key markets.
Consequently, although we benefited from better weather conditions in July
in Western Europe and anticipate improved volumes in some developing
markets, HEINEKEN does not expect a material change to underlying trading
conditions across the majority of its markets.
* Marketing and selling expenses: HEINEKEN still expects marketing and selling
(beia) expense as a percentage of revenue to remain broadly stable in 2013
(2012: 12.2%) demonstrating a continued commitment to invest in brands and
innovation.
* Input costs: HEINEKEN still forecasts a slight increase in input cost prices
in 2013 (excluding the effect of currency translation).
* Total Cost Management 2 (TCM2): Following the identification of additional
cost savings, HEINEKEN now expects to realise an approximate ?625 million
(previously ?525 million) of cost savings under the 3-year TCM2 programme
ending 2014. HEINEKEN expects to incur an approximate ?70 million of upfront
Global Business Services (GBS) costs in 2013.
* Effective tax rate: HEINEKEN still expects the effective tax rate (beia) in
2013 to be in the range of 27% to 29% (2012: 26.6% restated for revised
IAS19). The higher tax rate can be primarily explained by the result of
favourable outcomes with tax authorities in 2012 and the full consolidation
of APB which is subject to a higher effective tax rate.
* Interest rate: HEINEKEN still forecasts an average interest rate of around
4.5% in 2013 (2012: 5.4%) reflecting lower coupons on recent bond issuances.
* Acquisition of APB: The acquisition of APB is still expected to be
marginally accretive to earnings per share in 2013.
* Net profit (beia): HEINEKEN expects net profit (beia) to be broadly in line
with last year on an organic basis. The combined impact of consolidation
changes and foreign currency translation movements are expected to reduce
full year 2013 net profit (beia) by approximately ?25 million. This includes
a negative consolidation impact of ?40 million in 2013 related to revised
IAS19.
* Cash flow/ capital expenditure: In 2013, capital expenditure related to
property, plant and equipment (including APB) is forecasted to be ?1.4
billion (previously ?1.5 billion; 2012: ?1.2 billion). HEINEKEN still
expects a cash conversion ratio of below 100% in 2013. HEINEKEN remains
committed to achieving its long-term target net debt/ EBITDA (beia) ratio of
below 2.5 times by the end of 2014.
INTERIM DIVIDEND
In accordance with the existing dividend policy, HEINEKEN fixes its interim
dividend at 40% of the total dividend of the previous year. As a result, an
interim dividend of ?0.36 per share of ?1.60 nominal value will be paid on 3
September 2013. The shares will trade ex-dividend on 23 August 2013.
DEFINITIONS
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 figures include HEINEKEN's attributable share of joint ventures and
associates. Organic growth calculations assume HEINEKEN's joint venture share of
41.9% of APB and 50% of APIPL prior to consolidation is maintained through to
15 November 2013. Organic growth of consolidated volume, consolidated revenue
and consolidated operating profit (beia) excludes any impact from APB/APIPL.
Organic growth on group volume and group financials includes an impact from
APB/APIPL. Organic growth calculations are adjusted for the previous 3-month
delay reported by APB and APIPL, without a restatement to 2012. Comparative
2012 financials have been adjusted for the impact of revised IAS19. In 2013, the
first time impact of revised IAS19 on operating profit (beia), EBIT (beia), net
profit (beia) and EPS (beia) will be treated as a non-organic item.
ENQUIRIES
Media Investors
John Clarke George Toulantas
Head of External Communication Director of Investor Relations
John-Paul Schuirink Aarti Narain
Financial Communications Manager Investor Relations Manager
E-mail: pressoffice(at)heineken.com E-mail: investors(at)heineken.com
Tel: +31-20-5239355 Tel: +31-20-5239590
Investor Calendar Heineken N.V.
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
Conference call details
HEINEKEN will host an analyst and investor conference call in relation to this
trading update today at 10:00 CET/ 9:00 BST. The call will be audio cast live
via the Company's website: www.theheinekencompany.com/investors/webcasts. 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:
Netherlands United Kingdom
Local line: +31(0)20 716 8257 Local line: +44 (0)20 34271918
National free phone: 0800 020 2576 National free phone: 0800 279 4977
United States of America
Local line: +1 646 254 3363
National free phone: 1877 280 2296
Participation/ confirmation code for all countries: 8100988
Editorial information:
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. 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. The number of
people employed is over 85,000. Heineken N.V. and Heineken Holding N.V. shares
are listed on the NYSE Euronext in Amsterdam. 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. HEINEKEN has two sponsored
level 1 American Depositary Receipt (ADR) programmes: Heineken N.V. (OTC: HEINY)
and Heineken Holding N.V. (OTC: HKHHY). Most recent information is available on
HEINEKEN's website: www.theHEINEKENcompany.com.
Disclaimer:
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
[HUG#1724027]
Unternehmensinformation / Kurzprofil:
Datum: 21.08.2013 - 07:00 Uhr
Sprache: Deutsch
News-ID 289560
Anzahl Zeichen: 18567
contact information:
Town:
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Kategorie:
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