Amsterdam, 21 April 2010 - Heineken N.V. today issued its trading update for the first quarter of 2010.
. EBIT (beia) grew mid-single digit as the effect of cost savings, positive pricing and sales mix exceeded that of lower volume;
. Reported EBIT was significantly higher, driven by an exceptional book gain of €142 million on the transfer of two Asian operations;
. Revenue declined 3.5% to €2,936 million, due to changes in consolidation scope, whilst the effect of lower volume was partly offset by better pricing and sales mix improvement. Organically, revenue was 2.2% lower;
. Volume of the Heineken brand in the international premium segment grew 6.7% to 5.7 million hectolitres;
. Consolidated beer volume declined 5.3% organically, totalling 23.6 million hectolitres. An important factor was the volume decline in Russia;

The first quarter of the year is the least significant in terms of volume and profitability. In 2009, the first quarter accounted for 20.5% of consolidated beer volume and 20.7% of revenue respectively.

Revenue and results

Revenue totalled €2,936 million. Changes in the scope of the consolidation accounted for 1.4% of the decrease in revenue. Organically, revenue was 2.2% lower, as the improvement in selling prices and sales mix (+2.4%) could only partly offset the effect of lower volume on revenue (-4.6%). The effect of weaker foreign currencies was limited.

EBIT (beia) grew mid-single digit driven by lower costs and improved pricing and sales mix, which more than offset the effect of lower volume on EBIT. Organic EBIT (beia) growth was slightly higher as the impact of currencies against the euro (-€6 million) and the negative effect of first time (de)consolidation were limited. Heineken's Total Cost Management programme (TCM) achieved further savings across most cost categories. Investments in brands increased.

Reported EBIT increased substantially versus the first quarter 2009, due to a €142 million pre-tax exceptional book gain realised on the transfer of subsidiaries in Indonesia and New Caledonia, in line with the press release of 7 December 2009.
Net profit (beia) increased driven by higher EBIT and lower "Other net financing expenses". Reported net profit for the first quarter amounted to €218 million.

Changes in the consolidation scope

In 2010, two important changes will affect consolidated beer volume, revenue and EBIT:
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Transfer of a 68.5% stake in PT Multi Bintang Indonesia (MBI) and 100% of Grande Brasserie de Nouvelle-Calédonie S.A. (GBNC) from the Heineken Group to Heineken's joint venture Asia Pacific Breweries (APB) and the acquisition of APB's Indian breweries led to a scope change on 1 February 2010.
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The shift in South Africa from import to production by the local joint venture.

Group beer volume is not affected by these changes.
In Central & Eastern Europe, Brau Holding International, Heineken's joint venture in Germany, sold the Karlsberg brewery in July 2009, lowering Group beer volume. From 1 January 2010 Heineken includes in its Group beer volume 100% of the volume of United Breweries (UBL) in India.

Priorities for 2010

During 2010, Heineken will continue to focus on further increasing value share in its key markets. In order to build its brands, Heineken stepped up its marketing investments in selective markets.

In the first quarter of 2010, price increases were implemented across most markets, albeit at a lower level than in 2009.

The TCM programme will continue to deliver cost savings. As announced earlier, breweries were closed in Finland and Romania in the first quarter.

Cash generation and debt reduction will remain an important focus in 2010 and Heineken reiterates its commitment to achieve a cash conversion rate (Free operating cash flow/Net profit (beia) before minorities) in excess of 100% for 2010 and 2011.

The company will continue the efforts to improve the profitability of the recently acquired businesses and will focus on the integration of FEMSA Cerveza as soon as the transaction is completed.

Financial structure

In December 2009, the Net Debt/EBITDA (beia) ratio was 2.6 times. Including FEMSA Cerveza, the 2009 pro forma ratio would have been 2.7 times before the completion of the ASDI.

Positive cash flow generation owing to the Hunt for Cash Two programme (H4C2) further reduced net debt at the end of the first quarter compared to the year 2009. The H4C2 cash generation programme will be extended to the Mexican and Brazilian operations once the transaction is completed.

Heineken N.V. 2010 calendar

Annual General Meeting of Shareholders (AGM)
22 April

Quotation ex-final dividend 2009
26 April

Final dividend 2009 payable
29 April

Financial results for the first half 2010
25 August

Trading update for the third quarter 2010
27 October