Heineken N.V. reports on 2019 third quarter trading

Amsterdam, 23 October 2019 – Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) today publishes its trading update for the third quarter of 2019.

KEY HIGHLIGHTS

  • Beer volume +2.3% organically with double digit growth in Asia Pacific.
  • Heineken® volume +7.4% with double digit growth in Africa, Middle East & Eastern Europe and the Americas.

CEO STATEMENT

Jean-François van Boxmeer, Chairman of the Executive Board / CEO, commented:

"During the third quarter, our beer portfolio delivered solid volume growth of 2.3% in the context of a challenging comparison base given a very good summer last year. The growth of Heineken® accelerated to 7.4%. We are seeing increased volatility across a number of our markets, which we assume to continue for the rest of the year. We continue to invest for the long term benefit of all our stakeholders. We expect to grow operating profit organically around 4%."

THIRD QUARTER AND YEAR TO DATE VOLUME BREAKDOWN

Beer volume* (in mhl or %) 3Q19 Total  growth % Organic growth % YTD 3Q19 Total   growth % Organic growth %
Heineken N.V. 64.2   2.6   2.3   180.3   2.9   2.8  
Africa, Middle East & Eastern Europe 10.6   1.6   1.6   32.1   5.5   5.3  
Americas 21.5   -0.2   -0.5   62.3   1.8   1.7  
Asia Pacific 7.5   6.2   13.9   22.7   7.0   11.6  
Europe 24.6   4.5   1.6   63.2   1.3   -0.3  
Heineken® volume* (in mhl or %) 3Q19 Organic growth % YTD 3Q19 Organic growth %
Heineken N.V. 11.2   7.4   30.6   7.0  
Africa, Middle East & Eastern Europe 1.8   12.0   5.1   14.0  
Americas 3.4   12.5   9.6   12.5  
Asia Pacific 1.6   -1.0   4.3   0.2  
Europe 4.3   4.8   11.5   2.8  

Heineken® volume grew by 7.4% in the third quarter. The main markets contributing with double digit growth included Brazil, South Africa, the UK, Nigeria, Romania and Germany.

* Refer to the Definitions section for an explanation of organic growth and updated volume definitions. For main consolidation changes please refer to the 2019 half year results press release of 29 July 2019.

REGIONAL REVIEW

Africa, Middle East & Eastern Europe

  • Beer volume grew organically by 1.6%.
  • In Nigeria, beer volume grew low-single digit. The premium portfolio grew double digit, driven by Heineken®.
  • In Russia, beer volume declined mid-single digit due to a cool summer and a high comparable basis due to the football World Cup last year.
  • In South Africa, total consolidated volume grew high-single digit, driven by Heineken®.
  • In Ethiopia, beer volume was flat due to a price increase at the beginning of the year and continued social unrest.
  • In the DRC, beer volume grew high-single digit. The overall economy remains fragile.
  • In Egypt, total consolidated volume grew double digit, driven by the non-alcoholic beverage portfolio.

Americas

  • Beer volume declined organically by 0.5%.
  • In Mexico, beer volume grew low-single digit. The premium portfolio grew double digit driven by the national roll-out of Amstel Ultra. The impact of the renewed OXXO contract is in line with expectations as announced on 26 February 2019.
  • In Brazil, beer volume declined slightly. The premium and mainstream portfolios grew double digit, driven by Heineken®, Amstel and Devassa. The economy portfolio declined double digit, following a price increase at the beginning of the second quarter.
  • Beer volume in the USA declined high-single digit due to the negative impact of the phasing of sales last year, the continuous decline of Tecate and shortages of 24 oz cans, partially offset by a better underlying trend in Heineken®.
  • In Haiti, our largest operation in the Caribbean, beer volume declined double digit as social unrest since the middle of September caused business interruption.

Asia Pacific

  • Beer volume was up organically by 13.9%.
  • In Vietnam, beer volume grew double digit, driven by Tiger and Larue.
  • In Indonesia, beer volume declined mid-single digit due to the phasing of deliveries.
  • In Cambodia, beer volume was up high-double digit, driven by Anchor and Tiger.
  • In China, HEINEKEN has now fully transferred its operations to China Resources Beer (CR Beer).

Europe

  • Beer volume grew organically by 1.6%
  • In the UK, total volume grew slightly. Beer volume grew mid-single digit. The premium beer portfolio grew high-single digit led by Heineken® and Birra Moretti.
  • In France, beer volume was up slightly despite summer weather comparables. The off-trade environment remains challenging. Our premium portfolio grew double digit.
  • In Italy, beer volume grew high-single digit, driven by the continued positive performance of Ichnusa and the roll-out of Messina.
  • In the Netherlands, beer volume was down mid-single digit against a challenging comparable.
  • In Spain, beer volume was flat impacted by a partial delisting at a large retailer.
  • In Poland, beer volume was down mid-single digit organically mainly due to summer weather comparables.

REPORTED NET PROFIT

Reported net profit for the nine months was €1,667 million (2018: €1,596 million restated for IAS 37). For more details on the restatement, please refer to our technical announcement of 5 August 2019.

TRANSLATIONAL CURRENCY UPDATE

Using spot rates as of 16 October 2019 for the remainder of this year, the calculated positive currency translational impact for the full year would be approximately €80 million at operating profit level (beia) and €45 million at net profit level (beia).

DEFINITIONS

As of the first quarter of this year, HEINEKEN has updated its definitions of volume metrics as below. 2018 figures have been restated accordingly:

Brand specific volume (Heineken® Volume, Amstel Volume, etc.)Brand volume produced and sold by consolidated companies plus 100% of brand volume sold under licence agreements by joint ventures, associates and third parties.

Beer VolumeBeer volume produced and sold by consolidated companies.

Non-Beer VolumeCider, soft drinks and other non-beer volume produced and sold by consolidated companies.

Third Party Products VolumeVolume of third party products (beer and non-beer) resold by consolidated companies.

Total Consolidated VolumeThe sum of Beer Volume, Non-Beer Volume and Third Party Products Volume.

Licensed Beer Volume100% of volume from HEINEKEN’s beer brands sold under licence agreements by joint ventures, associates and third parties.

Group Beer VolumeThe sum of Beer Volume, Licensed Beer Volume and attributable share of beer volume from joint ventures and associates.

Organic Volume GrowthOrganic growth in volume excludes the effect of consolidation changes.

Volume Metrics: Third Quarter 2019*

In million hectolitres 3Q18 Consolidation Impact Organic Growth 3Q19 Organic Growth %
Africa, Middle East & Eastern Europe          
Beer Volume 10.4     0.2   10.6   1.6  
Non-Beer Volume 1.8       1.8   -0.7  
Third Party Products Volume          
Total Consolidated Volume 12.2     0.2   12.4   1.3  
           
Licensed Beer Volume 0.6       0.5    
Group Beer Volume 11.4       11.2    
Americas          
Beer Volume 21.6   0.1   -0.1   21.5   -0.5  
Non-Beer Volume 2.5     -0.5   2.0   -19.6  
Third Party Products Volume 0.1       0.1   -44.8  
Total Consolidated Volume 24.2   0.1   -0.6   23.6   -2.7  
           
Licensed Beer Volume 0.4       0.3    
Group Beer Volume 23.1       23.2    
Asia Pacific          
Beer Volume 7.1   -0.5   1.0   7.5   13.9  
Non-Beer Volume 0.1       0.2   15.0  
Third Party Products Volume          
Total Consolidated Volume 7.2   -0.5   1.0   7.7   13.9  
           
Licensed Beer Volume 0.7       0.7    
Group Beer Volume 9.7       18.1    
Europe          
Beer Volume 23.5   0.7   0.4   24.6   1.6  
Non-Beer Volume 3.2     -0.1   3.1   -3.2  
Third Party Products Volume 2.4       2.3   -0.8  
Total Consolidated Volume 29.1   0.7   0.3   30.0   0.9  
           
Licensed Beer Volume 0.2       0.2    
Group Beer Volume 24.4       25.5    
Heineken N.V.          
Beer Volume 62.6   0.2   1.4   64.2   2.3  
Non-Beer Volume 7.7     -0.6   7.1   -7.6  
Third Party Products Volume 2.5     -0.1   2.4   -2.4  
Total Consolidated Volume 72.7   0.2   0.8   73.7   1.1  
           
Licensed Beer Volume 1.9       1.7    
Group Beer Volume 68.6       78.0    

* HEINEKEN has updated its definitions of volume metrics. For more details please refer to the Definitions section in page 3 of this press release.  Due to rounding, this table will not always cast

Volume Metrics: First nine months 2019*

In million hectolitres 3Q18 Consolidation Impact Organic Growth 3Q19 Organic Growth %
Africa, Middle East & Eastern Europe          
Beer Volume 30.5   0.1   1.6   32.1   5.3  
Non-Beer Volume 4.6     0.0   4.6   -0.4  
Third Party Products Volume 0.1     0.0   0.1   5.6  
Total Consolidated Volume 35.2   0.1   1.6   36.8   4.5  
           
Licensed Beer Volume 1.5       1.7    
Group Beer Volume 33.2       34.1    
Americas          
Beer Volume 61.2   0.1   1.0   62.3   1.7  
Non-Beer Volume 7.2     -0.5   6.7   -6.7  
Third Party Products Volume 0.4     -0.3   0.1   -71.0  
Total Consolidated Volume 68.8   0.1   0.3   69.1   0.4  
           
Licensed Beer Volume 0.9       1.0    
Group Beer Volume 65.6       67.1    
Asia Pacific          
Beer Volume 21.2   -1.0   2.5   22.7   11.6  
Non-Beer Volume 0.4     0.1   0.5   21.5  
Third Party Products Volume          
Total Consolidated Volume 21.6   -1.0   2.5   23.2   11.7  
           
Licensed Beer Volume 1.1       1.2    
Group Beer Volume 27.8       37.5    
Europe          
Beer Volume 62.4   1.0   -0.2   63.2   -0.3  
Non-Beer Volume 8.3     -0.1   8.2   -1.7  
Third Party Products Volume 6.2   0.1   -0.1   6.2   -1.0  
Total Consolidated Volume 77.0   1.0   -0.4   77.6   -0.5  
           
Licensed Beer Volume 0.5       0.6    
Group Beer Volume 64.7       65.5    
Heineken N.V.          
Beer Volume 175.3   0.1   4.9   180.3   2.8  
Non-Beer Volume 20.6     -0.6   20.1   -2.7  
Third Party Products Volume 6.7   0.1   -0.4   6.4   -5.5  
Total Consolidated Volume 202.6   0.2   4.0   206.8   2.0  
           
Licensed Beer Volume 4.0       4.5    
Group Beer Volume 191.4       204.3    

* HEINEKEN has updated its definitions of volume metrics. For more details please refer to the Definitions section in page 3 of this press release.  Due to rounding, this table will not always cast

ENQUIRIES

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

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 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. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets.We employ over 85,000 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 RegulationThis 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.

Attachment

  • Heineken NV Q3 2019 Trading Update - Final.pdf
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