Heineken N.V. reports full year 2014 results
(Thomson Reuters ONE) -
Strong profit growth, delivering on strategic priorities
Amsterdam, 11 February 2015 - Heineken N.V. today announced:
* Group revenue grew 3.3% organically, with group revenue per hl up 1.4%
* Heineken® premium volume +5.1% with growth across all regions
* Innovation rate accelerated further to 7.7% contributing ?1.5 billion of
revenues
* Group operating profit (beia) up 7.8% organically
* Consolidated Operating profit (beia) margin expansion of 90bps, ahead of
medium term target level
* Net profit (beia) of ?1,758 million, 14% higher organically
* Diluted EPS (beia) of ?3.05 (2013: ?2.75) including a 6 cent adverse
currency impact
* Dividend policy pay-out ratio widened to 30%-40% (from 30%-35%) of Net
profit (beia); proposed 2014 total dividend ?1.10 per share (2013: ?0.89),
implying a 36% pay-out ratio (2013: 32%)
CEO STATEMENT
Jean-François van Boxmeer, Chairman of the Executive Board & CEO, commented:
"Our strong performance reflects the success of our strategy. We continued to
invest in our portfolio of brands and we have significantly improved our
commercial execution. We combined this with compelling consumer marketing and a
powerful innovation agenda which contributed ?1.5 billion to our revenues. As a
result, Heineken® premium volume grew 5.1% and a number of our global brands
achieved double digit growth. We remain committed to our medium term margin
guidance, underpinned by a continued focus on efficiency and further cost
savings. Whilst we expect further volatility in emerging markets and
deflationary pressures in 2015, we are confident that we will deliver further
top and bottom line growth in the year ahead."
FINANCIAL SUMMARY
Key financials(3 FY14 FY13(1) Total Organic
) (in mhl or ? million unless otherwise stated) growth growth
% %
---------------------------------------------------------------------------------
Group revenue 21,191 21,174 0.1 3.3
Group revenue/ hl (in ?) 91 92 -0.9 1.4
Group operating profit (beia) 3,359 3,192 5.2 7.8
Group operating profit (beia) margin 15.9% 15.1% +80bps
---------------------------------------------------------------------------------
Consolidated revenue 19,257 19,203 0.3 3.0
Consolidated operating profit (beia) 3,129 2,941 6.4 8.7
Consolidated operating profit (beia) margin 16.2% 15.3% +90bps
Net profit (beia) 1,758 1,585 11 14
Net profit 1,516 1,364 11
Diluted EPS (beia) (in ?) 3.05 2.75 11
Free operating cash flow 1,574 1,518 3.7
Net debt/ EBITDA (beia)( 2) 2.5x 2.6x
---------------------------------------------------------------------------------
(1) As disclosed with the H1 results on 20 August 2014 Group Revenue in 2013 was
restated to correctly reflect HEINEKEN share of JV and associates predominantly
in AME
(2) Includes acquisitions and excludes disposals on a 12 month proforma basis
(3) Refer to Definitions and Glossary sections for an explanation of non IFRS
measures and other terms used throughout this report
OUTLOOK 2015
(Based on consolidated reporting)
In 2015 HEINEKEN expects a continued challenging external environment, however,
delivering on its strategic priorities is expected to drive further organic
revenue and profit growth.
Continued revenue growth: HEINEKEN expects positive organic revenue growth in
2015 with volume growth at a more moderate level than 2014, and weighted towards
H2 (tougher comparatives in H1). Continued volume growth in developing markets
will offset more subdued volume growth elsewhere. Revenue per hectolitre is
expected to increase driven by revenue management. Pricing will be limited by
deflationary and off premise pressure in some markets.
Increased commercial investment: HEINEKEN will continue its targeted higher
commercial investments across the regions, and expects a slight increase in
marketing and selling (beia) spend as a percentage of revenue in 2015 (2014:
12.7%).
Continued cost savings: HEINEKEN is committed to delivering further cost savings
and will continue its focus on driving cost efficiencies across the company.
These are an important driver of the medium term margin guidance. As a result of
ongoing productivity initiatives, HEINEKEN expects an organic decline in the
total number of employees in 2015.
Input cost prices are expected to be slightly lower in 2015 (excluding a foreign
currency transactional effect).
Further margin expansion: HEINEKEN continues to target a year on year
improvement in consolidated operating profit (beia) margin of around 40bps in
the medium term. This will continue to be supported by tight cost management,
effective revenue management and the anticipated faster growth of higher margin
developing markets. In 2015 consolidated operating profit (beia) margin will be
adversely impacted by approximately 25bps from the disposal of EMPAQUE, the
Mexican packaging business, announced on 1 September 2014 and expected to
complete in Q1. HEINEKEN expects to partially but not fully offset this, such
that in 2015 consolidated operating profit (beia) margin expansion will be
somewhat below the 40bps medium term level.
Foreign currency movements: Assuming spot rates as of 6 February 2015, the
calculated positive currency translational impact on consolidated operating
profit (beia) would be approximately ?130 million, and ?80 million at net profit
(beia). However the foreign exchange markets are very volatile.
Improved financial flexibility: HEINEKEN remains focused on cash flow generation
and disciplined working capital management, with a commitment to a long-term
target net debt/ EBITDA (beia) ratio of below 2.5x. In 2015, capital expenditure
related to property, plant and equipment is expected to be approximately ?1.6
billion (2014: ?1.5 billion). A cash conversion ratio of below 100% is expected
in 2015 (2014: 79%).
Interest rate: HEINEKEN forecasts a stable average interest rate of c.3.7% in
2015 (2014: 3.7%)
Effective tax rate: HEINEKEN expects the effective tax rate (beia) for 2015 to
be broadly in line with the prior year (2014: 29.7%).
GROUP OPERATIONAL REVIEW
Despite an increasingly volatile global macroeconomic backdrop HEINEKEN
delivered healthy organic revenue and operating profit growth in 2014. As
expected growth was more moderate in H2, with group revenue and group operating
profit (beia) on an organic basis, up 2.1% and 3.6% respectively. The deliberate
strategy of higher commercial investments to enhance brand equity and drive
effective execution in the marketplace delivered further market share gains
across key markets. Innovation was an important competitive advantage. HEINEKEN
continues to invest early in key developing growth markets, and added capacity
in several countries including Ethiopia, Cambodia, China, Vietnam and Indonesia.
A continued focus on revenue management and disciplined cost management
delivered improved revenue per hectolitre as well as operating margin expansion.
Notably at the recent Cannes Lions International Festival of Creativity the
Company won the prestigious 'Marketer of the Year' award for 2015. This is a
tribute to HEINEKEN's strong momentum in brand management, innovation and
creativity.
Organically group revenue grew 3.3%, benefiting from both positive pricing and
positive sales mix, driving a 1.4% increase in group revenue per hectolitre.
Organically, group beer volume was 2.0% higher for the full year, stronger in H1
due to favourable weather and the football World Cup and a soft comparable prior
period. Most regions in H2 saw softer group volume growth due to unseasonably
wet weather particularly in Europe combined with tough Q3 comparatives. However,
in Asia Pacific volume growth was higher in H2, recovering from pressure in H1
from higher excise duties.
Group operating profit (beia) grew 7.8% on an organic basis, benefiting from
higher revenues and improved cost efficiencies partly offset by higher marketing
and selling expenses. Group operating profit (beia) in developing markets grew
10% organically, reflecting strong profit contributions from Mexico, Nigeria,
Brazil and Vietnam, partly offset by lower profitability in Poland and Compañía
Cervecerías Unidas S.A. (CCU). Group operating profit (beia) margins expanded by
80 basis points to 15.9%.
Heineken® 4Q14 Organic FY14 Organic
(in mhl or %) growth growth
% %
---------------------------------------------------------------------
Heineken® in premium segment 7.5 4.4 29.5 5.1
Africa Middle East 1.1 7.1 3.8 7.8
Americas 2.3 3.4 8.9 4.0
Asia Pacific 1.7 3.8 6.3 1.5
Central & Eastern Europe 0.6 6.5 2.5 5.5
Western Europe 1.8 3.8 8.0 7.8
---------------------------------------------------------------------
Heineken® volume in the premium segment grew by 5.1% in 2014 and by 4.4% when
excluding the January 2013 excise related destocking effect in France. The brand
saw positive growth across all regions, with particularly strong double digit
growth in Brazil, China, France, the UK and Mexico. The brand was also strong in
Spain, Taiwan, Thailand, Russia, Singapore and Germany, with positive growth
more than offsetting weaker brand volumes in Vietnam and Greece. Encouragingly
in the U.S. Heineken® regular delivered positive volume growth in Q4, in
addition to seeing improved Heineken® Light trends in this market. 'The City'
campaign launched in May positively enhanced brand equity, combined with
continued brand activation through innovation and social media.
Volume of the global brands Desperados, Affligem and Sol Premium delivered
double digit growth in the year, reflecting the successful focus of the broader
premium portfolio strategy. Desperados, the high margin tequila-flavoured beer,
saw volumes up 19%, with particularly strong growth in the UK, France, Poland
and Brazil. The brand is now available in 85 markets. Affligem, the Belgian
abbey beer brand, delivered volumes up 16%, with strong growth in Western
Europe, particularly in France. Affligem is currently available in 31 markets
with further roll outs planned in 2015. The UK, Brazil, New Zealand and CCU
markets were key drivers of Sol Premium volume growth, which was up firmly
double digits.
Cider volumes were broadly stable for the full year with gains across several
focus markets offset by lower volume in South Africa. During the year HEINEKEN
expanded its cider brand portfolio, with the addition of Strongbow and Bulmers
flavour extensions and the introduction of Old Mout and Blind Pig in the UK and
Cidrerie Stassen in Belgium. In the USA, the launch of Strongbow Gold Apple and
Honey & Apple hard ciders contributed to strong cider growth momentum in the
country.
HEINEKEN's focus on innovation delivered ?1.5 billion revenue and the innovation
rate increased to 7.7%, considerably ahead of the 5.9% rate in 2013 and above
the 2020 6% target. The company's worldwide scale supported the roll out of
global and local brand innovations across multiple markets, with offerings
addressing the important theme of moderation and also improving the quality of
the draught offer. 'Radler' beers which are now present in 41 markets (31 in
2013) across all 5 regions continue to be an innovation highlight, with the
launches of the 2% and 0.0% variants as well as new flavours all driving
positive growth. THE SUB®, the draught beer appliance to capture share in the
growing at home draught beer market, was launched in 4 markets and is already
showing positive signs.
With an exciting pipeline for the coming year, we are confident on continuing
the strong innovation momentum, and firmly view innovation as a key competitive
advantage.
HEINEKEN announced with H1 results that the TCM 2 cost savings program had
completed ahead of schedule and delivered above the original target (?637
million compared to target ?625 million). The company continues to realise
further ongoing productivity improvements across the global supply chain
function, as well as focusing on rightsizing and restructuring initiatives to
optimise the cost structure.
Global Business Services continues to leverage global scale and deliver cost
savings. HEINEKEN Global Procurement (HGP) is delivering considerable cost
benefits through the central negotiation and purchasing of both product and non-
product related spend areas. Similarly, the transition of the transactional
finance activity to HEINEKEN Global Shared Services (HGSS) supports primarily
cost efficiencies. At the end of 2014, 22 European operating companies had
successfully completed the transition to HGSS. HEINEKEN is currently expanding
the scope of activities carried out by HGSS, primarily related to order to cash
and standard reporting activities. All operating companies in Europe will have
transitioned these further activities to HGSS by the end of 2015.
At the end of 2014 upfront cumulative GBS costs incurred were ?203 million, in
line with budget, of which ?160 million was recognised as an operating expense
and ?43 million capitalised.
CHANGE IN POLICY AND PROPOSED 2014 DIVIDEND
Following the strong results of 2014 and to reflect confidence in future strong
and sustainable cash flow generation HEINEKEN has decided to widen the pay-out
ratio for its annual dividend from 30%-35% to 30%-40% of Net profit (beia). For
2014 a payment of a total cash dividend of ?1.10 per share of ?1.60 nominal
value for 2014 (total dividend 2013: ?0.89) will be proposed at the forthcoming
AGM. If approved, a final dividend of ?0.74 per share will be paid on 6 May
2015, as an interim dividend of ?0.36 per share was paid on 2 September 2014.
The payment will be subject to a 15% Dutch withholding tax. The ex-final
dividend date for Heineken N.V. shares will be 27 April 2015.
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. The license fee for the Heineken® brand has been increased since 1
January 2014. To facilitate a meaningful financial and margin comparison
compared to last year, the regional impact is reported as a consolidation change
in 2014.
ENQUIRIES
Media Investors
John Clarke Sonya Ghobrial
Head of External Communication Director of Investor Relations
Christine van Waveren Aarti Narain / Gabriela Malczynska
Financial Communications Manager Investor Relations Manager/Analyst
E-mail: pressoffice(at)heineken.com E-mail: investors(at)heineken.com
Tel: +31-20-5239355 Tel: +31-20-5239590
HEINEKEN INVESTOR CALENDAR
Trading update for Q1 2015 22 April 2015
Annual General Meeting (AGM) 23 April 2015
Half Year 2015 Results 3 August 2015
Trading update for Q3 2015 28 October 2015
Conference call details
HEINEKEN will host an analyst and investor conference call in relation to its
full year 2014 results today at 10:00 CET/ 9:00 GMT. 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 3427 1914
National free phone: 0800 020 2577 National free phone: 0800 279 4841
United States
Local line: +1646 254 3362
National free phone: 1877 280 2342
Participation/ confirmation code for all countries: 1910072
Editorial information:
HEINEKEN is the world's most international brewer. It is the leading developer
and marketer of premium beer and cider brands. Led by the Heineken® brand, the
Group has a powerful portfolio of more than 250 international, regional, local
and specialty beers and ciders. We are committed to innovation, long-term brand
investment, disciplined sales execution and focused cost management. Through
"Brewing a Better World", sustainability is embedded in the business and
delivers value for all stakeholders. HEINEKEN has a well-balanced geographic
footprint with leadership positions in both developed and developing markets.
We employ 81,000 people and operate more than 160 breweries in 70 countries.
Heineken N.V. and Heineken Holding N.V. shares trade on the NYSE Euronext in
Amsterdam. HEINEKEN has two sponsored level 1 American Depositary Receipt (ADR)
programmes: Heineken N.V. (OTCQX: HEINY) and Heineken Holding N.V. (OTCQX:
HKHHY). Most recent information is available on HEINEKEN's website:
www.theHEINEKENcompany.com and follow us via (at)HEINEKENCorp.
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.
Click here for Full media release:
http://hugin.info/130667/R/1893378/670923.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: HEINEKEN NV via GlobeNewswire
[HUG#1893378]
Unternehmensinformation / Kurzprofil:
Datum: 11.02.2015 - 06:59 Uhr
Sprache: Deutsch
News-ID 370696
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