HEINEKEN: A leading premium brewer in Asia Pacific

Transcription

1 HEINEKEN: A leading premium brewer in Asia Theo de Rond President, Asia Singapore 8 December 2011

2 Agenda HEINEKEN: A leading premium brewer in Asia 1 HEINEKEN growth strategy in Asia 2 Heineken : A real success story 2

3 The Asia beer market Demographics 36 countries 3.8 bn inhabitants Life expectancy ranges from years Population growth rate 1% p.a. Large differences in income Market Size 658 mhl consumed in 20 Consumption levels vary widely from between 1-85 litres per capita Beer Segmentation Beer markets at different stages of development Markets characterised by strong local mainstream brands and growing premium beer presence Significant potential for premium beer segment in the region Competitive Structure Top 4 local players have 60% of profit pool Presence of strong number 1 in most countries China and Hong Kong remain relatively fragmented markets 3

4 HEINEKEN strategy for winning in Asia Built on six key strategic pillars Focus on Growth Markets Create Value for our Stakeholders Win in International Premium Segment Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale 4

5 China Vietnam India Thailand Philippines Cambodia South Korea Taiwan Mongolia Australia Papua New Guinea Indonesia Singapore New Zealand Malaysia Japan 1. Focus on growth markets (I) HEINEKEN expects to benefit from positive regional beer market dynamics Per capita consumption growth: F CAGR % Incremental beer consumption by market: F (mhl) Create Value for our Stakeholde rs Win in Internation al Premium Segment Focus on Growth Markets Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale 8.7% 8.5% % % 3.5% 3.3% 3.2% 2.0% 1.7% 1.2% % 0.4% -0,4% -0,5% -0,7% -1,2% -2,6 Source: Plato (World Beer Report, Oct-11) 5

6 1. Focus on growth markets (II) China: Focus on leadership in premium segment Top provinces in China represent around 80% of the country profit pool Highest profitability in premium segment 20 Segment Volume MHL EBIT/HL Index vs Mainstream Premium 2.4 Create Value for our Stakeholde rs Win in Internation al Premium Segment Focus on Growth Markets Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale Affordable Premium HEILONGJIANG Local Premium 430 XINJIANG GANSU INNER MONGOLIA BEIJING LIAONING JILIN Mainstream 0 Discount <5 HEBEI TIANJIN TIBET QINGHAI NINGXIA SHANXI SHANDONG HENAN JIANGSU SHAANXI SICHUAN SHANGHAI ANHUI HUBEI CHONGQING ZHEJIANG JIANGXI HUNAN GUIZHOU FUJIAN YUNNAN GUANGXI GUANGDONG HAINAN Divestment from mainstream beer: July 2011, Heineken-APB China announced divestment of Jiangsu Dafuhao Breweries (49%) and Shanghai-APB (0%) awaiting regulatory approval Industry average return on net assets for mainstream beer < 5% 6 Source: National Bureau of Statistics, CICC Research, Plato & Canadean HEINEKEN estimates

7 1. Focus on growth markets (III) India: Build on UBL s strong market leadership position UBL market share is more than twice that of its nearest competitor 60% 50% 40% 30% 20% % 0% United Breweries Limited No.2 Competitor Kingfisher brand has a leadership ratio of three times versus its nearest competitor 50% 40% 30% 20% % Positioned to tap huge potential of Indian beer market through joint venture operation of United Breweries Limited Continue to build on market leadership with winning brand portfolio Leverage global scale to improve supply chain efficiencies, quality and innovation capabilities Capitalise on the opportunity for beer in India from significant growth in the legal drinking age population Create Value for our Stakeholde rs Win in Internation al Premium Segment Focus on Growth Markets Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale 0% Kingfisher No.2 Brand 7

8 1. Focus on growth markets (IV) Vietnam: APB has a strong number 2 position and winning brand portfolio Create Value for our Stakeholde rs Win in Internation al Premium Segment Focus on Growth Markets Be a Leading Brewer in Asia Consumer Inspired; Build on footprint and local knowhow Leverage on our Global Scale Customeroriented Asia Breweries (APB) have a number 2 share position in Vietnam Compete in both mainstream and premium segment Regional approach to capitalise on local growth opportunities: Build on segment leadership Develop distribution expertise and wholesaling management Leverage winning brand portfolios 8

9 2. Build on footprint and local know-how Leading positions across the region Mongolia #2 Japan #1 China #2 Mongolia South Korea #2 India #1 Taiwan #2 Thailand #1 Vietnam #2 Cambodia #2 Papua New Guinea Malaysia #1 Leadership New Zealand in the IPS #2 Singapore #1 Indonesia #1 Australia #2 #1 Broad market leadership Other 9

10 2. Build on footprint and local know-how HEINEKEN s economic interest by individual market* Mongolia 23% Japan 51% China 46% South Korea 0% India 38% Thailand 15% Cambodia 34% Malaysia % Singapore 42% Taiwan 0% Laos 28% Vietnam 26% Papua New Guinea 32% New Zealand 42% Indonesia 41% Australia 50% *Percentage represents HEINEKEN s equity interest in the main operating entity in each country

11 2. Build on footprint and local knowhow APB has a stronghold position in South-East Asia Create Value for our Stakeholde rs Win in Internation al Premium Focus on Growth Markets Be a Leading Brewer in Asia Build on footprint and local knowhow Leverage on our Global Segment Consumer Scale Inspired; Customer- Laos LAPB Market share: 3% Cambodia CBL Market share: 34% oriented Thailand TAPB Market share: 5% Vietnam VBL / HBL Market share: 20% HEINEKEN market position Market leader (#1) #2 or #3 Other Malaysia Guinness Anchor Berhad Market share: 57% Singapore APB (S) Market share: 64% Indonesia Multi-Bintang Market share: 69% 11 Source: Canadean, Plato and Company Estimates

12 2. Build on footprint and local know-how Joint venture operations in Japan and Australia Create Value for our Stakeholde rs Win in Internation al Premium Focus on Growth Markets Be a Leading Brewer in Asia Build on footprint and local knowhow Leverage on our Global Segment Consumer Scale Inspired; Customeroriented Joint venture in Japan with Kirin and with Lion Nathan in Australia Market and sell the Heineken brand under joint ventures Benefit of JV operating model in Japan/ Australia: Local production Asset-light Leverage local partner s scale Utilise local knowhow to market and sell Heineken 12

13 Focus on 2. Build on footprint and local knowhow Strong local brands underpin broad leadership positions in certain key markets Create Value for our Stakeholde rs Win in Internation al Premium Segment Growth Markets Be a Leading Brewer in Asia Consumer Build on footprint and local knowhow Leverage on our Global Scale Inspired; Customeroriented India Vietnam Papua New Guinea Cambodia China Malaysia Singapore Vietnam New Zealand Indonesia 13

14 3. Leverage on global scale HEINEKEN offers support and know-how across supply chain Interests in 42 breweries in 15 countries 18 Breweries all over India Sri Lanka India Thailand Cambodia Malaysia China Laos 1 Brewery in Mongolia Vietnam 13 Breweries All over SE Asia 2 Breweries in China Papua New Guinea 4 Breweries in Islands Create Value for our Stakeholde rs Win in Internation al Premium Segment Focus on Growth Markets Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale Technical production Greenfield and expansion consultancy Brewery managers Quality and freshness management Sample testing Supply chain study Total Productivity Management (TPM) Benchmarking New Caledonia New Zealand 4 Breweries in NZ 14

15 3. Leverage on global scale Heineken global activation platforms and innovation Create Value for our Stakeholde rs Win in Internation al Premium Focus on Growth Markets Be a Leading Brewer in Asia Build on footprint and local knowhow Leverage on our Global Segment Consumer Scale Inspired; Customer- Sports Film oriented Music Innovation 15

16 Focus on 4. Consumer Inspired; Customer-oriented Be Create Value for our Stakeholde rs Win in Internation al Premium Growth Markets a Leading Brewer in Asia Build on footprint and local knowhow Leverage on our Global Segment Consumer Scale Inspired; Customeroriented 16

17 Win in international premium segment Heineken and Tiger have a combined leadership position in IPS in Asia Heineken: 5.4 mhl Focus on Growth Markets The Heineken and Tiger brands command a market share of approximately 32% in the IPS in Asia Since 2001, the Heineken and Tiger brands have gained share of the IPS Create Value for our Stakeholde rs Win in Internation al Premium Segment Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale Tiger: 2.6 mhl Heineken and Tiger combined volume in Asia (mhl) Heineken Tiger 17 Source: Heineken data and Plato (Oct-11)

18 5. Win in international premium segment The IPS offers attractive future growth potential IPS in Asia by market: F Create Value for our Stakeholde rs Win in Internation al Premium Segment CAGR: F Focus on Growth Markets Be a Leading Brewer in Asia Consumer Inspired; Customeroriented Build on footprint and local knowhow Leverage on our Global Scale Other 9.3% CAGR 7.7% China Vietnam India Australia 11.8%.4% 15.1% 2.2% Thailand Taiwan South Korea Japan HongKong Cambodia New Zealand Singapore 7.1% 1.9% 4.3% 3.7% 2.2% 2.2% 1.2% 3.2% F 18 Source: Plato (Nov-11)

19 6. Create value for our stakeholders Profitability of our Asia business has been increasing Create Value for our Stakeholde rs Win in Internation al Premium Focus on Growth Markets Be a Leading Brewer in Asia Build on footprint and local knowhow Leverage on our Global Segment Consumer Scale Inspired; Customeroriented HEINEKEN Asia EBIT (beia)*: ( m) 250 SHARE- HOLDERS SUPPLIERS Growing Profitability and Value Creation EMPLOYEES PARTNERS * Based on a proportional consolidation method to aid comparability with pre-2008 financials 19

20 Agenda HEINEKEN: A leading premium brewer in Asia 1 HEINEKEN growth strategy in Asia 2 Heineken : A real success story 20

21 Expansion of the Heineken brand in Asia c.19 Pioneer in the systematic export of Heineken 1980 Local production of Heineken in Singapore 1989 Local production of Heineken in Malaysia 1994 Local production of Heineken in NZ 2005 Local production of Heineken in Australia 1979 Heineken Far East established 1983 Local production of Heineken in Japan 1993 Local Production of Heineken in Vietnam and Thailand 2004 Local production of Heineken in China and Indonesia 2011 Local production of Heineken in India 21

22 Heineken volume development since 2000 Brand has grown at a CAGR of % since 2000 Top 4 Countries by Volume: Vietnam, Taiwan, Thailand and China CAGR %

23 Heineken brand has broad reach across Asia Mhl 7 6 Budweiser (mainly China) Heineken brand Heineken Corona Budweiser Stella Artois Carlsberg Tuborg Beck's Amstel Source: Canadean and Plato 23

24 The three stages for Heineken brand building in Asia Category Leadership Star Building Build Desire Anchor Establish Brand Credibility India China Indonesia Malaysia Vietnam Taiwan Singapore 24

25 Vietnam: Heineken brand indicators are strong and growing Consumer Perception 2006/07 Q3 20/ FY 0607 FY0708 FY 0809 FY 09 YTD Q3 FY11 A great brand I would like to drink A brand worth the price Is a premium quality beer A great refreshing taste beer Beer that is internationally recognised/accepted Has good advertising The beer with full of enjoyment and fun The beer for drinking with friends For progressive/ambitious people Is for stylish/sophisticated people 25 Source: Usage and Attitude Research carried out in Vietnam

26 % of respondent Vietnam: Heineken has highest brand equity versus competition Brand Equity Study: Is Worth Paying More For 0 Is Worth Paying More For - Total VBL J - 09 F- 09 M- 09 A- 09 M- 09 J - 09 J - 09 A- 09 S- 09 O- 09 N- 09 D- 09 J - F - M- A- M- J- J- A- S- O- N- D- J - 11 Heineken Tiger Tiger Crystal Miller Saigon Green Saigon Red 26 Source: Usage and Attitude Research carried out in Vietnam Note: VBL = Vietnam Brewery Limited

27 Summary HEINEKEN has a broad and diverse business across Asia HEINEKEN s strategy is clearly focused on realising the attractive potential of premium beer in Asia HEINEKEN adopts a broad or segment leadership approach in markets where it competes Strength of Heineken brand and excellence in market place execution key drivers of future sucess in Asia HEINEKEN leveraging its global scale and capabilities for growth in Asia 27

28 Questions please Singapore 8 December 2011