Heineken N.V. reports 2017 half year results
(Thomson Reuters ONE) -
Amsterdam, 31 July 2017 - Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) today
announces:
* Organic revenue +5.7% with revenue per hectolitre up +3.4%(1)
* Consolidated beer volume +2.6% with growth in all regions
* Heineken® volume +3.9%
* Operating profit (beia) +11.8% organically and operating margin +34bps(1)
* Net profit (beia) of ?1,036 million, up 10.5% organically
* Diluted EPS (beia) of ?1.82 (2016: ?1.71)
* FY expectations unchanged
CEO STATEMENT
Jean-François van Boxmeer, CEO, Chairman of the Executive Board, commented:
"We delivered strong results in the first half year, with all four regions
contributing positively to organic growth in volume, revenue and operating
profit. Europe delivered a good performance, momentum remained strong in
Americas and Asia Pacific, and results improved in Africa Middle East & Eastern
Europe despite continued difficult market conditions. A well-balanced global
footprint, sustained investment in our beer and cider brands, market leading
innovations and a focus on premiumisation continue to differentiate our strategy
and underpin our progress. During the period we also completed the acquisitions
of Brasil Kirin and Lagunitas. Whilst economic conditions are likely to remain
volatile, our expectations for the full year are unchanged.''
FINANCIAL SUMMARY
Key financials(1,2,3 HY17 HY16 Total Organic
)(in mhl or ? million unless otherwise growth growth
stated) % %
-------------------------------------------------------------------------------
Revenue 10,475 10,094 3.8 5.7
Revenue/hl (in ?) 91 91 -0.8 3.4
Operating profit (beia) 1,805 1,705 5.9 11.8
Operating profit (beia) margin 17.2 % 16.9 % 34 bps
Net profit (beia) 1,036 977 6.0 10.5
Net profit(4) 871 586 48.6
Diluted EPS (beia) (in ?) 1.82 1.71 6.0
Free operating cash flow 746 541 37.9
Net debt/ EBITDA (beia)(5) 2.5 2.4
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(1 )Excluding an accounting adjustment in the UK with no impact on operating
profit, HEINEKEN organic revenue growth would have been +5.3%, organic revenue
per hl +3.0%, and operating margin (beia) +41 bps. For the impact on Europe
please refer to page 12.
(2 )Consolidated figures are used throughout this report, unless otherwise
stated; please refer to the Glossary section for an explanation of terms used
throughout this report.
(3 )A reconciliation between non-GAAP measures and IFRS measures is included in
note 5 on page 30.
(4) Net profit is after EIA, for details on EIA please refer to page 15.
(5) Includes acquisitions and excludes disposals on a 12 month pro-forma basis.
FULL YEAR 2017 OUTLOOK STATEMENT
* Economic conditions are expected to remain volatile and we continue to
assume a negative impact from currency comparable to 2016.
* We expect further organic revenue and profit growth.
* Excluding major unforeseen macro economic and political developments as well
as the impact of Brasil Kirin, Lagunitas and the proposed Punch acquisition,
we expect continued margin expansion in 2017 in line with the medium term
margin guidance of a year on year improvement in operating profit (beia)
margin of around 40bps.
* We expect an average interest rate broadly in line with 2016 (2016: 3.1%),
and an effective tax rate (beia) also broadly in line with 2016 (2016:
28.3%).
* Capital expenditure related to property, plant and equipment should be
slightly below ?2 billion (2016: ?1.8 billion).
OPERATIONAL REVIEW
After a slower first quarter given Easter timing, the earlier Tet Vietnamese New
Year and tough comparatives, all regions saw higher organic volume growth in the
second quarter. Notably Americas and Africa Middle East & Eastern Europe
reported organic volume growth in this period after a decrease in the first
quarter. Revenue per hectolitre was up organically for the first half across all
regions apart from Asia Pacific due to adverse brand mix.
Revenue increased 5.7% organically, with a 2.3% increase in total volume and a
3.4% increase in revenue per hectolitre. The underlying price mix impact for the
six months was +3.1%.
Consolidated beer volume grew 2.6% organically in the first half. Performance
was stronger in the second quarter with volume up 4.2% organically, benefiting
from Easter timing, good weather particularly in Europe and easier comparatives
than in the first quarter.
Consolidated beer volumes 2Q17 2Q16 Organic HY17 HY16 Organic
(in mhl) growth growth
% %
--------------------------------------------------------------------------
Heineken N.V. 57.4 53.5 4.2 101.3 97.0 2.6
Africa Middle East & Eastern Europe 10.4 10.0 3.2 19.3 19.1 1.5
Americas 16.9 14.6 6.0 30.4 28.1 2.8
Asia Pacific 6.4 5.8 7.1 12.6 11.5 6.3
Europe 23.7 23.1 2.7 39.0 38.3 1.9
--------------------------------------------------------------------------
Heineken® volume grew 3.9%, with positive momentum in all regions apart from
Asia Pacific where lower volume in China and Vietnam weighed negatively. Europe
and the Americas were the main drivers of Heineken® growth. The brand grew
double digit in Brazil, South Africa, Russia, Italy, Mexico, South Korea,
Canada, Romania and Hungary. There was also strong brand growth in France, the
Netherlands and in Argentina. Heineken® continued to benefit from leveraging
global platforms such as UEFA Champions League, the Cities, Music and Product
Stories campaigns, and the Global partnership with Formula 1® which started last
year. Heineken® 0.0, launched in the second quarter in 16 markets, already looks
promising.
Heineken® volume (1) 2Q17 Organic HY17 Organic
(in mhl) growth growth
% %
-------------------------------------------------------------------------
Heineken® volume 9.6 5.0 17.3 3.9
Africa Middle East & Eastern Europe 1.2 5.9 2.2 4.4
Americas 2.6 8.8 5.0 8.4
Asia Pacific 1.5 -6.3 3.1 -7.1
Europe 4.3 6.9 7.0 5.9
-------------------------------------------------------------------------
(1 )Heineken® volume is now total volume including the Netherlands.
The international brand portfolio, which includes brands complementary to
Heineken® and that have high potential to travel across geographies,
outperformed. Volume was up double digit for Affligem, Tiger, Kru?ovice, Tecate
and Red Stripe, and up high single digit for Desperados. Sol Premium volume was
up low single digit. Amstel volume declined low single digit due to weaker
volume in Nigeria and Greece, however the brand grew strongly in markets such as
Brazil.
Cider volume increased organically low single digit to reach 2.3 million
hectolitres (2016: 2.2 million). Growth was particularly strong in South Africa
following the successful Strongbow launch at the end of 2016, as well as in
Vietnam, Ireland and in the Netherlands. Excluding the UK, where volume decline
was partly due to delisting by a modern trade retailer, cider volume increased
double digit.
Innovation is firmly embedded in HEINEKEN's company strategy. Heineken® 0.0 was
launched in the second quarter in 16 markets. Overall in Europe, there was
double digit growth for low and no alcohol volume, including strong performance
in Spain, Netherlands, Poland and Austria. Total low and no alcohol volume was
6.1 million hectolitres slightly down from 6.2 million last year due to weakness
in malt products in Nigeria and Egypt.
In craft and variety Lagunitas, Mort Subite, Moretti Regionali and Zywiec
variants continued to perform particularly well.
Operating profit (beia) grew 11.8% organically, reflecting a mix of both higher
revenue, premiumisation and cost efficiencies.
BREWING A BETTER WORLD
In the first half, sustainability highlights included linking 13,000 solar
panels on the Massafra Brewery to Italy's national grid, with a total capacity
of 3.3MW, that covers about 20% of the brewery energy needs. This is the largest
solar photovoltaic project installed on a beer brewery worldwide.
The Heineken® brand expanded its commitment to dedicate 10% of its media spend
to encourage responsible alcohol consumption. The Enjoy Heineken Responsibly
commitment now includes every market where the Heineken® brand is sold.
The Tiger brand embarked on a global partnership with World Wide Fund for Nature
(WWF) starting with a US$ 1 million donation to support the organisation's tiger
conservation efforts.
NET PROFIT
Net Profit (beia) increased 10.5% organically to ?1,036 million (2016: ?977
million).
Reported Net Profit was ?871 million (2016: ?586 million). In the first half of
2016 for reported Net Profit included an asset impairment of ?233 million in the
Democratic Republic of Congo (DRC).
INTERIM DIVIDEND
In accordance with its dividend policy, HEINEKEN fixes the interim dividend at
40% of the total dividend of the previous year. As a result, an interim dividend
of ?0.54 per share will be paid on 10 August 2017. The shares will trade ex-
dividend on 2 August 2017.
TRANSLATIONAL CURRENCY CALCULATED IMPACT
Using spot rates as at 25 July 2017 for the remainder of the year, the
calculated negative currency translational impact would be approximately ?155
million at operating profit (beia), and ?60 million at net profit (beia).
Foreign exchange markets remain very volatile.
ACQUISITION OF BRASIL KIRIN HOLDING S.A.
On 13 February 2017 HEINEKEN announced that it had entered into an agreement
with Kirin Holdings Company, Limited ("Kirin") to acquire Brasil Kirin Holding
S.A. ("Brasil Kirin"), one of the largest beer and soft drinks producers in
Brazil. The transaction completed on 31 May 2017. On 19 April 2017 HEINEKEN
announced that in light of the size and requirements of the proposed future
combined portfolio it intended to leverage Kirin's existing route to market with
the HEINEKEN portfolio in the future. Since then HEINEKEN Brasil has informed
the Coca-Cola bottlers about its decision to terminate the existing
distribution, and is currently engaged in discussions.
The acquisition of Brasil Kirin transforms HEINEKEN's business by extending its
portfolio and broadening its reach across Brazil. Increased scale and a
strengthened brand portfolio will allow the business to accelerate
premiumisation particularly with Heineken® and Sol Premium, and enable further
growth of the well-established Schin, Bavaria, Kaiser, Amstel and Devassa brands
in the mainstream and value segments. The transaction is expected to deliver
significant synergies across three main areas: procurement, optimisation of the
brewery footprint and logistics, and selling, general and administrative
expenses. Consolidated from 1 June, Brasil Kirin is expected to be margin
dilutive by c.40bps in 2017. HEINEKEN FY 2017 margin guidance excludes the
impact of Brasil Kirin, Lagunitas and the proposed acquisition of Punch. The
transaction is expected to cover its cost of capital in Brazil in approximately
5 years.
PROPOSED ACQUISITION OF PUNCH
On 15 December 2016 HEINEKEN announced that following Vine Acquisitions
Limited's announcement of a recommended cash offer for Punch Taverns plc,
HEINEKEN through HEINEKEN UK had agreed a back-to-back deal with Vine
Acquisitions to acquire Punch Securitisation A ('Punch A'), comprising
approximately 1,900 pubs across the UK.
On 10 February 2017 Punch Shareholders voted in favour of the Scheme at the
Court Meeting and that the special resolution proposed at the General Meeting
was passed.
The acquisition remains subject to the satisfaction or (where capable of being
waived) waiver of the other Conditions set out in the Scheme Document, including
the Court sanctioning the Scheme at the Court Hearing. On 27 June 2017,
following submission of undertakings offered by HEINEKEN UK in response to
address points raised by the CMA in the decision dated 13 June 2017, the CMA
announced that there are reasonable grounds for believing that these proposals,
or a modified version of them, might be acceptable to remedy the competition
concerns it has identified. Subject to being approved by the relevant regulatory
authorities, the acquisition is expected to complete by the end of August 2017.
ENQUIRIES
Media Investors
John-Paul Schuirink Sonya Ghobrial
Director of Global Communication Director of Investor Relations
Michael Fuchs Chris MacDonald / Aris Hernández
Financial Communication 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
INVESTOR CALENDAR HEINEKEN N.V.
Trading Update for Q3 2017 25 October 2017
What's Brewing Seminar, London 11 December 2017
Full Year 2017 Results 12 February 2018
Conference call details
HEINEKEN will host an analyst and investor conference call in relation to its
2017 HY results 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 3427 1914
National free phone: 0800 020 2576 National free phone: 0800 279 5736
United States of America
Local line: +1212 444 0895
National free phone: 1877 280 1254
Participation/ confirmation code for all countries: 7694218
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 speciality 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 over 80,000 employees and operate breweries, malteries, cider plants and
other production facilities in more than 70 countries. Heineken N.V. and
Heineken Holding N.V. shares trade on the Euronext in Amsterdam. Prices for the
ordinary shares may be accessed on Bloomberg under the symbols HEIA NA and HEIO
NA and on Reuters under HEIN.AS and HEIO.AS. 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 on Twitter via
(at)HEINEKENCorp.
Market Abuse Regulation
This press release may contain price-sensitive information within the meaning of
Article 7(1) of the EU Market Abuse Regulation.
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,
change 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 of the date of this press release.
HEINEKEN does not undertake any obligation to update these forward-looking
statements contained in this press release. 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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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: HEINEKEN NV via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 31.07.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 554513
Anzahl Zeichen: 20072
contact information:
Town:
Amsterdam
Kategorie:
Business News
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