Heineken N.V. reports 2017 full year results

Amsterdam, 12 February 2018 - Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) announces:

  • Organic revenue (beia) +5.0% with revenue (beia) per hectolitre +2.1%
  • Consolidated beer volume +3.0% with growth in all regions
  • Heineken® volume +4.5%
  • Operating profit (beia) organic growth of +9.3%; operating margin (beia) expansion of +40 bps excluding the Brasil Kirin, Punch and Lagunitas acquisitions
  • Net profit (beia) of €2,247 million, +9.3% organically
  • Diluted EPS (beia) +7.0% to €3.94
  • Proposed 2017 total dividend +9.7% at €1.47 per share


Jean-François van Boxmeer, Chairman of the Executive Board / CEO, commented:
"We delivered strong results in 2017, with all regions contributing to organic growth in volume, revenue and operating profit. The Heineken® brand performed very well and Heineken® 0.0 was launched in 16 countries. During the year, we became the second largest beer company in Brazil with the acquisition of Brasil Kirin, we bought 1,900 pubs from Punch Taverns in the UK and acquired full ownership of Lagunitas, where we strongly believe in the expansion of the brand as an IPA of reference outside its core US market. We also made good progress with our sustainability agenda. We have already surpassed our 2020 CO2 emissions target and we have set new ambitious objectives for 2030 with our 'Drop the C' programme.

We expect the environment will continue to be marked by volatility and uncertainty. We are committed to long-term value creation and will continue to strive for superior top line growth whilst working on improving our operating profit margin. In the coming years, we expect this to be driven by Heineken® as well as our portfolio of international brands, craft & variety, low & no-alcohol and cider, with a focus on premiumisation, combined with revenue and cost management initiatives. For 2018, excluding major unforeseen macro economic and political developments, we expect to deliver an operating profit margin expansion of around 25bps[1]. This includes a residual dilutive effect on margins from the acquisition of Brasil Kirin, whose integration and results are very encouraging."


Key financials[2] FY17 FY16 Total growth Organic growth
(in mhl or € million unless otherwise stated)

    % %
Revenue (beia) 21,908 20,792 5.4 5.0
Revenue 21,888 20,792 5.3  
Revenue (beia) per hl (in €) 87 91 -4.6 2.1
Operating profit (beia) 3,759 3,540 6.2 9.3
Operating profit (beia) margin 17.2% 17.0%  14bps  
Net profit (beia) 2,247 2,098 7.1 9.3
Net profit 1,935 1,540 25.6  
Diluted EPS (beia) (in €) 3.94 3.68 7.0  
Free operating cash flow 2,031 1,773 14.6  
Net debt / EBITDA (beia)[3] 2.5 2.3    

1 Excluding the one-time benefit of the implementation of IFRS 15 as of 1 January 2018.
2 Consolidated figures are used throughout this report, unless otherwise stated; please refer to the Glossary section for an explanation of non-GAAP measures and other terms used throughout this report.
3 Includes acquisitions and excludes disposals on a 12 month pro-forma basis.


  • Economic conditions are expected to remain volatile and we have assumed a negative impact from currency comparable to 2017.
  • We expect further organic revenue and profit growth.
  • Excluding major unforeseen macro economic and political developments we expect to deliver an operating profit margin expansion of around 25 bps. This includes a residual dilutive effect from the acquisition of Brasil Kirin and excludes the one-time benefit of IFRS 15 implementation.
  • We expect an average interest rate (beia) broadly in line with 2017 (2017: 3.0%), and an effective tax rate (beia) of around 28% (2017: 27.6%).
  • Capital expenditure related to property, plant and equipment should be slightly above €2 billion (2017: €1.7 billion).


The good performance in the first half continued during the second part of the year. Revenue (beia) per hectolitre continued to improve organically in all regions, excluding Asia Pacific due to negative mix effects. Full year operating profit (beia) increased 9.3% organically, a slightly lower pace than the first part of the year (1H17: 11.7%) as our commercial investments increased during the second half as planned.

HEINEKEN continued to invest in key developing markets with the expansion of production capacity in Mexico, Cambodia, Vietnam, Ethiopia and Haiti, the opening of a new brewery in Ivory Coast and the announcement of the construction of a new brewery in Mozambique.

Revenue (beia) increased 5.0% organically, with a 2.9% increase in total volume and a 2.1% increase in revenue (beia) per hectolitre. In 2017 the underlying price mix impact was 2.5%. In the second half revenue (beia) increased 4.3% (1H17: 5.7%), with volume growth of 3.5% (1H17: 2.3%), revenue (beia) per hectolitre was up 0.8% (1H17: 3.4%) and underlying price mix impact of 1.7%. Reported revenue (beia) per hectolitre declined -4.6% mainly due to the dilutive effect of the acquisition of Brasil Kirin.

Consolidated beer volumes
(in mhl)
4Q17 Organic
FY17 Organic
Heineken N.V. 56.7   4.6   218.0   3.0  
Africa, Middle East &  Eastern Europe 10.6   7.2   40.1   4.8  
Americas 21.8   4.6   72.1   3.3  
Asia Pacific 7.6   10.6   27.0   8.9  
Europe 16.8   0.6   78.8   0.2  

Consolidated beer volume grew 3.0% organically in 2017, with 2.6% growth in the first half and 3.5% growth in the second half. Beer volume in the fourth quarter was up 4.6%, an acceleration versus the 2.5% volume growth delivered in the third quarter due to positive volume growth in Europe and accelerated growth in the Americas.

Heineken® volume
(in mhl)
4Q17 Organic
FY17 Organic
Heineken® volume 9.2   6.9   36.0   4.5  
Africa, Middle East &  Eastern Europe 1.6   18.7   5.2   12.8  
Americas 3.0   12.0   10.7   9.5  
Asia Pacific 1.6   -5.3   6.3   -5.9  
Europe 3.0   3.9   13.8   3.1  

Heineken® volume grew 4.5%, one of the brand's strongest performances in recent years, with positive volume performance across all regions apart from Asia Pacific. Volume grew double digit in Brazil, South Africa, Russia, Mexico and Romania. The brand also saw healthy growth across European markets including Italy, Spain, France and the Netherlands benefiting from the steady growth of Heineken® Lager as well as the launch of Heineken® 0.0 during the year. These results more than offset weaker volumes in Vietnam, China and the US. Heineken® continues to benefit from global platforms such as UEFA Champions League and Formula 1®.

Heineken® Light grew high single digit driven by launches in Mexico, Indonesia, Poland, Greece and Switzerland and continued growth in Australia, offsetting softer volume in the US.

Heineken® 0.0 is available in 16 markets and is delivering ahead of expectations. Further roll-out is planned for 2018. Heineken® 0.0 is also at the heart of our 'When you drive, never drink' campaign together with our sponsorship of Formula 1®.

The international brand portfolio grew high single digit. Volume was up double digit for Tiger, Krušovice and Birra Moretti. Tecate, Desperados and Red Stripe also delivered robust volume growth during the year. Amstel volume was flat with the decline in Nigeria and Greece offset by strong growth in Brazil. Sol declined mid single digit as the high single digit growth outside of Mexico was offset by lower domestic volume.

Cider volume increased low single digit to 4.9 million hectolitres (2016: 4.8 million). Good progress was made with our global cider strategy and volume outside the UK was up double digit, driven by the strong growth in South Africa, Poland, Romania and Vietnam. This offset a high single digit decline in the UK, where volumes were impacted by a partial delisting.

Low & No-Alcohol (LNA) volumes increased low single digit, delivering 12.5 million hectolitres in 2017 (2016: 12.4 million). Continued robust growth of Radler and the launch of Heineken® 0.0 contributed to Europe's double digit volume growth. Volumes in Nigeria and Egypt were adversely impacted by the weaker macro economic environment and consumer sentiment.

Craft & Variety volume grew double digit supported by the strong performance of the international craft beers as well as local craft propositions. In particular, Affligem and Mort Subite in France, and Lagunitas both in the UK and US contributed to category growth.

Among the innovations of 2017 was the launch of The Blade, a countertop draught system for small outlets. Launched in 11 markets in the second half of the year, this innovation is showing promising early results. HEINEKEN also launched new e-commerce initiatives for both Business-to-Business and Business-to-Consumer platforms, such as Beerwulf which is our new Craft & Variety online business channel for consumers.

Operating profit (beia) grew 9.3% organically, primarily reflecting higher revenue and cost efficiencies.


HEINEKEN strongly believes that by fully integrating sustainability into the way we do business, we are best placed to make a meaningful positive impact on the world around us. HEINEKEN continues to make significant progress in achieving its Brewing a Better World commitments.

Highlights included decreasing average water consumption in water-stressed areas to 3.2 litres of water per litre of beer (2014: 3.8). Global average water consumption remained stable compared to last year, and decreased 29% compared to 2008, the baseline year for the 2020 commitments. 28% of main raw materials came from sustainable sources (2016: 17%). 10% of total Heineken® media spend was dedicated to responsible consumption campaigns, in more than 70% of operating companies in scope.

HEINEKEN has now surpassed its 2020 target for CO2 emissions by reaching 6.1 kg CO2 e/hl, down from 6.5 kg CO2 e/hl in 2016 (a 41% decline since 2008). Emissions decreased in absolute terms as well: even though production volumes were 57% higher than in 2008, emissions were 7% lower. Today HEINEKEN announced its 2030 vision for renewable energy and is setting a new ambition to reduce carbon emissions.


Net profit (beia) increased 9.3% organically to €2,247 million (2016: €2,098 million).

The impact of exceptional items and amortization of acquisition-related intangibles (eia) on net profit was €312 million (2016: €558 million). In 2016 exceptionals included an asset impairment in the Democratic Republic of Congo (DRC) of €286 million.

Net profit after exceptional items and amortization of acquisition-related intangibles was €1,935 million (2016: €1,540 million).


The Heineken N.V. dividend policy is to pay out a ratio of 30% to 40% of full year net profit (beia). For 2017, payment of a total cash dividend of €1.47 per share (2016: €1.34) will be proposed to the Annual General Meeting of Shareholders (AGM) on 19 April 2018. This represents an increase of 9.7% versus 2016, translating into a 37.3% payout. If approved, a final dividend of €0.93 per share will be paid on 2 May 2018, as an interim dividend of €0.54 per share was paid on 10 August 2017. The payment will be subject to a 15% Dutch withholding tax. The ex-final dividend date for Heineken N.V. shares will be 23 April 2018.


Using spot rates as at 7 February 2018 for the remainder of this year, the calculated negative currency translational impact would be approximately €190 million at consolidated operating profit (beia), and €105 million at net profit (beia). Foreign exchange markets remain very volatile.


Mr. J.A. Fernández Carbajal, Mr. J.G. Astaburuaga Sanjiinés, Mr. J.M. Huët, and Mrs. A.M. Fentener van Vlissingen will have completed their four-year appointment terms per the end of the AGM on 19 April 2018.

Mr. Huët is eligible for reappointment for a period of four years and a non-binding nomination shall be submitted to the AGM in this respect. A non-binding nomination for the reappointment of Mr. Fernández Carbajal and Mr. Astaburuaga Sanjiinés for a period of four years shall also be submitted to the AGM. Both are representatives of FEMSA (that (in)directly holds a 14.76% economic interest in the Company), and their respective appointments are based on the Corporate Governance Agreement, which was concluded between (among others) the Company and FEMSA on 30 April 2010, and which was approved by the AGM on 22 April 2010 (in connection with the acquisition by the Company of FEMSA's beer activities).

The Supervisory Board is grateful for the commitment of Mrs. Fentener van Vlissingen over the past twelve years and for her meaningful contribution to the Supervisory Board, as well as its Audit Committee and Selection and Appointment Committee.

A non-binding nomination will be submitted to the AGM in 2018 to appoint Mrs. M. Helmes as a member of the Supervisory Board as of 19 April 2018 for a period of four years. It is the intention that Mrs. Helmes will join the Audit Committee and in time become the Chair of the Audit Committee, taking over this role from Mr. Huët who will remain a member of the Audit Committee.


Media Investors
John-Paul Schuirink Federico Castillo Martinez
Director of Global Communication Investor Relations Director
Michael Fuchs Chris MacDonald / Aris Hernandez
Financial Communications Manager Investor Relations Manager / Senior Analyst
E-mail: pressoffice@heineken.com E-mail: investors@heineken.com
Tel: +31-20-5239355 Tel: +31-20-5239590


Combined financial and sustainability annual report publication 19 February 2018
HEINEKEN IFRS 15 conference call 20 February 2018
Trading Update for Q1 2018 18 April 2018
Annual General Meeting of Shareholders 19 April 2018
Financial Markets Conference 8/9 May 2018
Half Year 2018 Results 30 July 2018
Trading Update for Q3 2018 24 October 2018

Conference call details

HEINEKEN will host an analyst and investor conference call in relation to its 2017 FY 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)20 794 8426 Local line: +44 (0)20 3003 2666
National free phone: 0800 022 9132 National free phone: 0808 109 0700
United States of America  
National free phone: +1866 966 5335  
Participation password for all countries: Heineken

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 portfolio of more than 300 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 @HEINEKENCorp.

Market Abuse Regulation:
This press release may contain inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

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.