Amsterdam, 26 October 2016 - Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) today announces its trading update for the third quarter of 2016.
- Consolidated beer volume +2.0% organically, with growth in Americas, Asia Pacific and Europe offsetting weaker volume in Africa Middle East & Eastern Europe
- Heineken® volume in the premium segment +3.5%
- Jean-François van Boxmeer to be nominated for re-appointment at the 2017 AGM
Jean-François van Boxmeer, Chairman of the Executive Board & CEO, commented:
"Performance in the third quarter was robust despite strong comparatives in Americas and Europe, and a tough environment in Africa Middle East & Eastern Europe. Strong performance continued in key markets such as Vietnam and Mexico, with Europe also showing further positive momentum. Our full year margin expectations remain unchanged despite continued adverse economic conditions in some developing markets, as well as increasing currency headwinds."
THIRD QUARTER AND NINE MONTHS VOLUME BREAKDOWN
| Key figures1 |
(in mhl or %)
| 3Q16 || Total |
| Organic |
| YTD 3Q16 || Total |
| Organic |
| Consolidated beer volume || || || || || || |
| Heineken N.V. || 54.0 || 5.4 || 2.0 || 151.0 || 6.9 || 3.3 |
| Africa Middle East & Eastern Europe || 9.4 || 6.1 || -3.6 || 28.4 || 6.4 || -2.0 |
| Americas || 14.9 || 4.2 || 3.0 || 43.1 || 5.3 || 4.1 |
| Asia Pacific || 6.0 || 20.3 || 15.1 || 17.5 || 24.4 || 17.9 |
| Europe || 23.7 || 2.6 || 0.6 || 62.0 || 4.1 || 1.7 |
| Heineken® |
(in mhl or %)
| 3Q16 || || Organic |
| YTD 3Q16 || || Organic |
| Heineken® in premium segment || 8.4 || || 3.5 || 23.7 || || 2.9 |
| Africa Middle East & Eastern Europe || 1.2 || || 4.4 || 3.3 || || -1.8 |
| Americas || 2.4 || || 1.5 || 7.1 || || 2.8 |
| Asia Pacific || 1.7 || || 5.4 || 4.9 || || 4.2 |
| Europe || 3.1 || || 3.8 || 8.4 || || 4.3 |
Heineken® volume in the premium segment grew by 3.5% with positive volume development across all regions. Particularly strong growth in China, South Africa and Brazil more than offset weaker volume in US, Greece, Vietnam, and Russia.
1 Refer to the Definitions section for an explanation of organic growth.
Africa Middle East & Eastern Europe
Organic consolidated beer volume declined 3.6%. Weak volume trends were seen primarily in Russia, Egypt and the DRC, which more than offset growth in Nigeria, Ethiopia and Algeria.
In Nigeria volume increased low single digit. Underlying trading conditions remain difficult as the weaker macroeconomic environment and consumer sentiment continue to drive negative brand mix. Although the Naira devaluation on 20 June 2016 initially provided some improvement in liquidity, the Naira has continued to weaken, which will have a further impact on margins.
In Russia volume declined double digit as the market remained under pressure and volume was adversely impacted by high promotional price pressure.
Organic consolidated beer volume grew 3.0% driven by Mexico and the Caribbean.
In Mexico volume grew mid-single digit benefiting from positive consumer confidence and the strong performance of both Tecate Light and Dos Equis. Heineken® delivered double digit volume growth. As expected adverse transactional currency pressure is more pronounced in the second half of the year.
In Brazil volume declined mid-single digit reflecting weak macroeconomic conditions and tough trading conditions. The premium brand portfolio outperformed, with continued double digit Heineken® volume growth and good Amstel performance.
In the US volume slightly declined, with volume growth of the Mexican brands, particularly Tecate, offset by lower Heineken®.
Organic consolidated beer volume growth of 15.1% was driven by particularly strong performance in Vietnam and Cambodia.
In Vietnam volume grew double digit in line with the strong momentum seen year to date. The Tiger brand continued to be the key growth driver.
In Indonesia volume was up mid-single digit driven by strong growth of the low and non alcoholic part of the portfolio.
In Cambodia volume continued to grow double digit benefiting from the capacity added earlier this year.
In China volume was up mid-single digit led by strong performance of the Heineken® brand.
Organic consolidated beer volume increased by 0.6%, despite tough comparatives for the quarter and stocking in June ahead of the excise tax increase in Greece. Performance was helped by good weather in most European markets.
In Spain, Netherlands, France, and Italy volume development was positive.
In Poland volume was flat and volume declined in Romania, Austria and the UK partly due to tough comparatives.
REPORTED NET PROFIT
Reported net profit for the nine months was €1,239 million (2015:€1,776 million), including the asset impairment of €233 million for the DRC announced with the HY results on 1 August 2016. In 2015 reported net profit included an exceptional gain of €379 million from the sale of EMPAQUE.
TRANSLATIONAL CURRENCY UPDATE
Assuming spot rates as of 20 October 2016 for the remainder of the year, the calculated negative translational currency impact for 2016 would be approximately €215 million at consolidated operating profit (beia), and €115 million at net profit (beia). Foreign exchange markets remain very volatile.
EXECUTIVE BOARD COMPOSITION
Under the existing rotation schedule the current term of Mr. Jean-François van Boxmeer as member of the Executive Board will expire at the end of the Annual General Meeting on 20 April 2017 (2017 AGM). The Supervisory Board will submit a non-binding nomination for his re-appointment for a further period of four years at the 2017 AGM, and subject to this has re-appointed Mr. van Boxmeer as Chairman of the Executive Board and CEO.
Organic growth excludes the effect of foreign currency translational effects, consolidation changes, accounting policy changes, exceptional items and amortisation of acquisition-related intangibles.
| Media || || Investors |
| John Clarke || || Sonya Ghobrial |
| Director of External Communication || || Director of Investor Relations |
| Michael Fuchs || || Marc Kanter / Gabriela Malczynska |
| Financial Communications Manager || || Investor Relations Manager / Senior Analyst |
| E-mail: firstname.lastname@example.org || || E-mail: email@example.com |
| Tel: +31-20-5239355 || || Tel: +31-20-5239590 |
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 approximately 73,000 people and operate 167 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 via @HEINEKENCorp.
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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.