Amsterdam, 25 October 2017 - Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) today announces its trading update for the third quarter of 2017.
KEY HIGHLIGHTS
Consolidated beer volume +2.5% organically, with growth in Asia Pacific, Americas and Africa, Middle East & Eastern Europe offsetting lower volume in Europe against tough comparatives.
Heineken® volume +3.4% driven by Brazil, South Africa, Russia and Mexico.
Full year expectations unchanged.
CEO STATEMENT
Jean-François van Boxmeer, Chairman of the Executive Board & CEO, commented:
"Performance in the third quarter was solid, with an acceleration of organic volume growth in Asia Pacific and Africa, Middle East & Eastern Europe. Growth in Asia Pacific continued to be driven by Vietnam and Cambodia whilst in Africa, Middle East & Eastern Europe, the main contributors were Russia, Ethiopia and South Africa. In the Americas, Mexico continued to deliver, and weaker volumes in the US were offset by growth coming from Brazil. Europe had
to face tough comparatives, partly due to less favourable weather in some key markets. During the period we completed the acquisition of Punch Securitisation A. Our full year expectations remain unchanged."
Heineken® volume2 grew by 3.4% organically. Key markets that contributed to this growth included Brazil, South Africa, Russia and Mexico, which more than offset weaker volume in the US, France, the Netherlands and China.
1 Refer to the Definitions section for an explanation of organic growth.
2Heineken® volume is now total Heineken® volume including the Netherlands
REGIONAL REVIEW
Africa, Middle East & Eastern Europe
Organic consolidated beer volume was up by 8.8%.
In Nigeria, volume declined mid single digit with underlying trading conditions still difficult and consumers continuing to trade down. Sourcing hard currencies remains a challenge, despite an improvement versus last year.
South Africa and Ethiopia continued to deliver strong growth with volume up double digit.
The new operation in Ivory Coast delivered ahead of expectations.
In Russia, volume was up double digit due to strong Heineken® performance and recent launches in the economy segment.
Americas
Organic consolidated beer volume grew by 2.9%.
In Mexico, volume was up mid single digit, with strong performance of Heineken® growing double digit.
Volumes grew mid single digit in Brazil, with premium brands growing double digit. Performance of the recently acquired Kirin Brazil portfolio is very encouraging.
In the US, HEINEKEN USA declined mid single digit, with Heineken® facing a difficult comparative due to phasing of shipments. Lagunitas continued to outperform the craft market.
Asia Pacific
Organic consolidated beer volume was up 12.2%.
In Vietnam, volumes grew double digit driven by Tiger.
In Cambodia, volume was up double digit, continuing to benefit from the additional capacity added last year.
Malaysia also delivered strong double digit volume growth.
China volumes continued to be impacted by parallel imports, albeit improved versus previous quarters.
Europe
Organic consolidated beer volume declined by 2.8%.
In key markets such as France and the Netherlands, performance was negatively impacted by tough comparatives and a cool summer, resulting in volumes declining on average mid single digit.
Volumes in the UK were down double digit, continuing to be impacted by a partial de-listing at a large customer.
In Poland, volumes declined mid single digit, following a reduction in promotional activity.
Italy grew volumes mid single digit supported by successful activations, new product launches and strong execution.
REPORTED NET PROFIT
Reported net profit for the nine months was €1,486 million (2016: €1,239 million). In the nine months of 2016, reported net profit included an asset impairment of €233 million in the Democratic Republic of Congo (DRC).
TRANSLATIONAL CURRENCY UPDATE
Using spot rates as at 19 October 2017 for the remainder of this year, the calculated negative currency translational impact would be approximately €185 million at consolidated operating profit (beia), and €75 million impact at net profit (beia). Foreign exchange markets remain very volatile.
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 ('Punch'), 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. The transaction completed on 29 August 2017.
The pubs acquired by HEINEKEN UK will be operated for six months by Punch under a transitional services agreement, after which they will be integrated into the existing Star Pubs & Bars business. The transitional services agreement has no impact on Star's existing licensees, who will continue to trade on a 'business as usual' basis.
FINANCING UPDATE
On 22 September 2017, HEINEKEN placed 12-year Notes with a coupon of 1.50% for a principal amount of €800 million. The notes are issued under the Company's Euro Medium Term Note Programme and are listed on the Luxembourg Stock Exchange. The proceeds were used for general corporate purposes including the refinancing of existing debts.
Following the completion of the acquisition of Punch Securitisation A on 29 August 2017, HEINEKEN decided to terminate the securitisation structure and has since repaid all outstanding Punch A notes (notional amount €864 million) by 4 October 2017.
DEFINITIONS
Organic growth excludes the effect of foreign currency translational effects, consolidation changes, accounting policy changes, exceptional items and amortisation of acquisition-related intangibles.
Most recent information is available on HEINEKEN's website: www.theHEINEKENcompany.com and follow us on Twitter via @HEINEKENCorp
Heineken Holding N.V. reports 2017 third quarter Trading Update
Amsterdam, 25 October 2017 - Heineken Holding N.V. (EURONEXT: HEIO; OTCQX: HKHHY) today announces its trading update for the third quarter of 2017.
KEY HIGHLIGHTS
Consolidated beer volume +2.5% organically, with growth in Asia Pacific, Americas and Africa, Middle East & Eastern Europe offsetting lower volume in Europe against tough comparatives.
Heineken® volume +3.4% driven by Brazil, South Africa, Russia and Mexico.
Full year expectations unchanged.
Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management or supervision of and provision of services to that company.
THIRD QUARTER AND NINE MONTHS VOLUME BREAKDOWN
Consolidated beer volume1
(in mhl or %)
3Q17 Totalgrowth % Organic growth % YTD 3Q17 Totalgrowth % Organic growth %
Consolidated beer volume 60.0 11.1 2.5 161.3 6.8 2.5
Heineken®2
(in mhl or %) 3Q17 Organicgrowth % YTD 3Q17 Organicgrowth %
Heineken® 9.5 3.4 26.8 3.7
Heineken® volume2 grew by 3.4% organically. Key markets that contributed to this growth included Brazil, South Africa, Russia and Mexico, which more than offset weaker volume in the US, France, the Netherlands and China.
* HEINEKEN means Heineken Holding N.V., Heineken N.V., its subsidiaries and interests in joint ventures and associates.
1 Refer to the Definitions section for an explanation of organic growth.
2 Heineken® volume is now total Heineken® volume including the Netherlands.
REPORTED NET PROFIT OF HEINEKEN N.V.
Reported net profit of Heineken N.V. for the nine months was €1,486 million (2016: €1,239 million). In the nine months of 2016, reported net profit of Heineken N.V. included an asset impairment of €233 million in the Democratic Republic of Congo (DRC).
TRANSLATIONAL CURRENCY UPDATE
Using spot rates as at 19 October 2017 for the remainder of this year, the calculated negative currency translational impact would be approximately €185 million at consolidated operating profit (beia), and €75 million impact at net profit (beia). Foreign exchange markets remain very volatile.
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 ('Punch'), 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. The transaction completed on 29 August 2017.
The pubs acquired by HEINEKEN UK will be operated for six months by Punch under a transitional services agreement, after which they will be integrated into the existing Star Pubs & Bars business. The transitional services agreement has no impact on Star's existing licensees, who will continue to trade on a 'business as usual' basis.
FINANCING UPDATE
On 22 September 2017, HEINEKEN placed 12-year Notes with a coupon of 1.50% for a principal amount of €800 million. The notes are issued under the Company's Euro Medium Term Note Programme and are listed on the Luxembourg Stock Exchange. The proceeds were used for general corporate purposes including the refinancing of existing debts.
Following the completion of the acquisition of Punch Securitisation A on 29 August 2017, HEINEKEN decided to terminate the securitisation structure and has since repaid all outstanding Punch A notes (notional amount €864 million) by 4 October 2017.
DEFINITIONS
Organic growth excludes the effect of foreign currency translational effects, consolidation changes, accounting policy changes, exceptional items and amortisation of acquisition-related intangibles.
