What s Brewing Seminar HEINEKEN Americas HEINEKEN strategy to win in Americas. 0New York 19 November 2015

Transcription

1 What s Brewing Seminar HEINEKEN Americas HEINEKEN strategy to win in Americas 0New York 19 November 2015

2 Marc Busain 2015 Region President Heineken Americas Managing Director Cuauhtémoc Moctezuma Heineken Mexico Managing Director Positions in Burundi, Egypt and France 2001 Finance Manager, Heineken Netherlands Supply 1996 Started with HEINEKEN, Finance Manager Democratic Republic of Congo 1

3 Agenda HEINEKEN strategy to win in Americas Revisiting the positive Americas region characteristics HEINEKEN profile in Americas and contribution to HEINEKEN group Regional strategic priorities 4 Key markets Update: Mexico US Brazil Canada, Caribbean and Export 5 Summary 2

4 1. Diverse markets with untapped growth potential With Beer Per capita consumption varied and low relative to more developed regions 75 Per Capita Beer Consumption (2014) 60 Western Europe Source: Canadean HEINEKEN countries Non HEINEKEN countries

5 1. Favourable population dynamics Region benefits from a younger average population base % population under the age of 35 (2015 forecast) 73% 71% 70% 67% 63% 62% 62% 62% 62% 60% 59% 59% 56% 56% 56% 56% 54% 51% 48% 46% 43% Europe average 41% Population growth 2015F-2020F in percentages Source: UN World Population Prospects, Canadean. HEINEKEN countries Non HEINEKEN countries

6 1. Compelling Premium beer opportunity With Premium beer share of market still relatively low in a number of countries 35% 34% % PS of total beer market 2014 Europe average 31% 23% 16% 16% 15% LATAM average 15% 11% 10% 9% 8% 8% 7% 5% 5% 2% Panama USA Chile Canada Peru Ecuador Costa Rica Argentina Brazil Guatemala Honduras Venezuela Mexico El Salvador Nicaragua Total beer market size 2014 (MHL) Source: Canadean Premium beer segment defined by Canadean as >= 115 price index. HEINEKEN countries Non HEINEKEN countries

7 1. Resulting in favourable regional volume expectations Favourable demographics with positive population growth and age profile Positive beer market fundamentals with low beer per capita consumption and Premium segment share of market relatively low Significant income growth in key developing markets Key Markets Beer consumption (mhl) CAGR CAGR +1.8% +0.3% +1.7% +2.7% +2.6% +1.7% +3.1% +2.8% +1.7% +2.4% -2.4% -1.3% Argentina & Chile Brazil Andean * Other LATAM Mexico Canada Premium expansion in mature markets where HEINEKEN Americas is well positioned to capture growth % +1.4% USA F 6 Source: Canadean. *Andean includes Venezuela, Peru, Colombia, Equador.

8 2. Americas is an important contributor to HEINEKEN s business Group beer volume Heineken Consolidated EBIT 28.7% 8.9mhl 24.9% 29.5mhl 7 Source: HEINEKEN Annual Report 2014.

9 2. HEINEKEN Americas Footprint A collection of highly diverse markets and business models Canada # HEINEKEN Premium market share Puerto Rico Haiti United States #2 #1 #1 #2 French West Indies Jamaica Mexico Central America & Caribbean #1 #1 #2 #1 Costa Rica #1 Panama Brazil #2 Suriname #1 St. lucia #1 #2 9 Operating Companies 6 Joint Ventures/ Associates 40+ Export Markets Chile #1 Argentina #2 Bahamas #1 8 Source: Nielsen and Canadean Premium beer segment defined by Canadean as >= 115 price index.

10 2. Americas regional brand overview A premium led brand portfolio complemented by strong mainstream brands Mexico USA Brazil Canada Chile Argentina Panama Haiti Bahamas St Lucia Jamaica INTERNATIONAL AND DOMESTIC PREMIUM Heineken Strongbow Bohemia Affligem Heineken Amstel Light Strongbow Lagunitas 2 Dos Equis Red Stripe Newcastle Heineken Sol Desperados Xingu Heineken Strongbow Dos Equis Newcastle Heineken Sol Royal Guard Heineken Amstel Imperial 2 Budweiser 2 Heineken Heineken Heineken Guinness 1 Guinness 1 Guinness 1 Heineken Strongbow Desperados Guinness 1 Heineken Guinness 1 UPPER MAINSTREAM & MAINSTREAM Coors 1 Dos Equis Sol Indio Tecate Tecate Cristal 2 Escudo 2 Schneider 2 Panama Soberana Prestige Kalik Piton Red Stripe Dragon (LOWER) MAINSTREAM Superior Carta Blanca Kloster Kaiser Bavaria Palermo 2 Bieckert 2 Eclipse Malta Talawah 9 1 Represents Licensed brands. 2 Represent Partner brands. Heineken may include Heineken Light.

11 2. Expanding our Footprint in the Craft Segment and the Caribbean 10 Acquired 50% shareholding in Lagunitas 5th largest craft brewer in the US by volume Lagunitas IPA is largest IPA Brand by volume in the US* and c.56% volume IPA segment, fastest growing category in craft Will continue to be run by current management Current volume predominantly in the US Exciting opportunity to expand through HEINEKEN s global platform * Source: Nielsen Acquired Diageo s 57% stake in D&G taking ownership to 73% MTO launched 6 November for remaining shares D&G leading share in Jamaican beer market Red Stripe c.40% volume of D&G brand portfolio and the #1 brand in Jamaica Red Stripe c.50% in Jamaica, with large international markets including UK, Canada and US Further international potential given heritage and distinctive attributes Strategic asset within key growth market

12 2. With Topline driving solid EBIT growth Group beer volume In mhl Consolidated revenue In m Consolidated EBIT (beia) In m CAGR +4.8% CAGR +7.8% CAGR +8.8%

13 3. Regional strategic priorities Defined strategy to capture regional specific opportunities WIN IN PREMIUM LED BY HEINEKEN LEAD BY COOL MARKETING AND INNOVATION SHAPE THE CIDER CATEGORY DRIVE END2END PRODUCTIVITY BE COMMERCIALLY ASSERTIVE BREWING A BETTER WORLD 12 Global strategy to exploit region specific opportunities.

14 1 Win in premium led by Heineken Gaining momentum with Heineken in the US, Mexico and in Brazil Heineken turnaround in US Yearly Growth Mexico: Heineken in mhl CAGR +52% Brazil Success Story HEINEKEN +48% 4Y CAGR Back to positive growth in 2015 Share of Premium 17% 13% 14% Volume development in khl 6% 10% L52W 2015* '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 ' * Note: L52W ending 10/03/2015

15 1 Heineken Light best tasting light beer in the US Video 14

16 2 Lead by Cool marketing and innovation Marketing is driving consumer pull for our brands and innovations delivering sustainable top line growth Cool Marketing Innovation Rate Americas has almost tripled revenue from innovations over the last 2 years (to c.6%) Leveraging global innovation successes eg Radler Focus on margin enhancing products which support top line ambitions 15

17 3 Shape the Cider Category Focus on Strongbow in the US is rapidly gaining momentum, driving double digit volume growth Distribution rights transfered from Vermont Hard Cider Company (C&C) to in house from 1 January 2013 Fastest growing cider brand in the US #2 market share Depletions up ytd September over 40% Best Tasting hard Cider Strong sampling increasing brand awareness Flavours addressing consumer demand for variety and choice 2014 % Volume Share 3.4% Beginning of the year 7% End of year HUSA and Canada account for 91% of volume. Nielsen Grocery through 01/03/2015, Brand Franchise. 16

18 3 Strongbow Video 17

19 4 Driving E2E Productivity To deliver increased efficiencies at the business Productivity Improvement 15 6,000 Ongoing productivity gains and cost saving initiatives have improved costs as % of revenue YTD 4,000 2,000 Main cost saving initiatives generated over 234m savings (excluding IPO synergies) in the course of three years ( ): Supply Chain: FTE headcount optimization, Consumer value Engineering, Energy and Electricity Savings, Network Optimization Commerce: FTE headcount efficiencies, Retail operation improvement in Mexico, Sponsorship improvements, Agency Fees Savings Support: FTE headcount optimization Productivity per mhl / FTE Production FTE s 18

20 5 Be Commercially Assertive To drive excellence in outlet execution Draft Systems Right Channels and Customers Excellent Outlet Execution 19

21 6 Brewing a Better World Sustainability is embedded in HEINEKEN Americas strategy Safety First Responsible Consumption Sustainability Sustainable Sourcing Cool@work & alcohol policy Extending safety from brewery to sales & distribution including road safety Company wide Safety Strategy (the 5C s) and 12 Life Saving Rules Deliver on global industry commitments 10% media spend target on Enjoy Heineken responsibly Eco-efficiency: Tangible targets for energy and water reduction Water stewardship initiatives in Mexico with local community for brewers for sustainable water supply in scarce areas Haiti sorghum projects with Clinton initiative to stimulate local farmers harvest Ongoing compliance to Supplier Code Procedure 20

22 4. HEINEKEN Mexico Attractive growth prospect for beer Facts 6 Breweries 27.8 mhl beer 41.5% SOM #2 Position Main Brands HEINEKEN s largest market Positive underlying market fundamentals, including population growth, urbanisation, growing middle class Beer the alcoholic beverage of choice (at 94%) Exciting premium segment potential, still underpenetrated Applying a targeted regional strategy to drive growth OXXO partnership and development of own stores (Six) strengthening commercial execution and maximising volume and value 21

23 4. HEINEKEN Mexico Strong Topline growth since the acquisition Strong national portfolio with representation across varied price points Strategy continuing to deliver impressive growth Premium Revenue M CAGR +6% Operating profit (beia) M CAGR +20% Operating profit (beia) margin M 20.4% Sub-Premium 12.9% Mainstream Below Mainstream Value 22 1 Includes domestic beer operations only 2 Includes domestic beer and export operations

24 Tecate Video 23

25 4. HEINEKEN USA Portfolio Strategy driving improved share Facts 9 Distribution Centres & 6 Offices (White Plains HQ ) 9.7 mhl beer 4.4% SOM #2 Premium Position Main Brands Economic country indicators are improving although overall beer market flat Upscale outperforming led by craft, Mexican brands and cider Femsa transaction brought in complementary Mexican brands Dos Equis and Tecate, which are growing high single digits Heineken brand declined since 2008 and now stabilized HEINEKEN ideally placed to outperform 24

26 4. The Mexican brands are driving market share... With outperformance vs the US market since 2012 Dos Equis and Tecate in the US +6.5% CAGR OG Tecate Original -5% CAGR Tecate Light 34% CAGR Heineken US Brand split 2005 Others Heineken US Brand split 2014 Others Dos Equis 14% CAGR Heineken Mexican brands Heineken

27 Dos Equis Video 26

28 4. HEINEKEN Brazil Driving increased share by winning in the Premium segment Facts 6 Breweries 12.1mhl Beer 9.4% Market share #3 Position Main Brands #2 in premium segment with Heineken Heineken complemented by premium portfolio Exciting potential longer term, despite near term economic challenges 5% 5% 6% Premium SOM 10% 6% 7% 13% 14% 8% 17% 9% 11% 12% Expanding capacity with 7th brewery Strategic partnership with Coca-Cola bottlers provides scale Source: Nielsen, YTD August Premium SOM Heineken SOM of Premium

29 Heineken Door Lock Video 28

30 4. Canada, Caribbean and Export Markets Diverse and profitable markets offer further opportunity for growth Solid Regional Contributor 2014 Data Main Countries Group Beer 11,272 km Revenue 5 Brewery markets 4 Joint Ventures / Associates 40 + Export Markets 29

31 5. Summary What s Brewing Seminar HEINEKEN Americas Positive outlook for future Americas beer market growth Premium expected to outperform overall beer category Clear strategy in place to win in the region HEINEKEN Americas well placed to capture growth and continue to drive share 30