Amsterdam, Three August 2020 – Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) declares: KEY HIGHLIGHTS Web income (beia) natural progress -16.4%; web income (beia) per hectolitre -3.6percentConsolidated beer quantity -11.5percentHeineken® quantity -2.5percentOperating revenue (beia) natural progress -52.5percentNet revenue (beia) €227 million, -75.8% organicallyDiluted EPS (beia) €0.39 (2019: €1.84).CEO STATEMENT Dolf van den Brink, CEO and Chairman of the Government Board, commented: “The primary half of 2020 was outlined by unprecedented challenges and I’m very pleased with our staff all world wide who’re adapting rapidly to new rising realities whereas caring for one another, our clients and our communities. The Heineken® model as soon as once more demonstrated its power with double digit progress in 14 markets and continued momentum of Heineken® 0.0. Our bottom-line was disproportionately impacted because of the decline within the European on-trade, in addition to short-term authorities restrictions on our actions in Mexico and South Africa. We’ve taken mitigating actions and can additional intensify our concentrate on prices. HEINEKEN has entered the disaster with a robust monetary place, a diversified world footprint, nice manufacturers, superior shopper and buyer intimacy and extremely devoted and proficient groups. Transferring ahead and as markets get better, we’ll leverage these distinctive strengths to chart our subsequent progress chapter.” FINANCIAL SUMMARY1 IFRS Measures€ millionTotal progress BEIA Measures € millionOrganic growth2Revenue11,156 -18.0 % Income (beia)11,156 -15.5 %Web revenue9,243 -19.2 % Web income (beia)9,243 -16.4 %Working revenue85 -94.8 % Working revenue (beia)827 -52.5 % Working revenue (beia) margin8.9 % Web profit-297 -131.7 % Web revenue (beia)227 -75.8 %Diluted EPS (in €)-0.52-131.5 % Diluted EPS (beia) (in €)0.39 -78.6 % Free working cash flow-809 Web debt / EBITDA (beia)3 3.5x 1 Consolidated figures are used all through this report, until in any other case acknowledged; please seek advice from the Glossary for an evidence of non-GAAP measures and different phrases used all through this report. 2 Natural progress proven, apart from Diluted EPS (beia) which is complete progress. Three Contains acquisitions and excludes disposals on a 12 month pro-forma foundation. Within the first half of 2020, HEINEKEN’s markets and companies have been materially impacted by the COVID-19 pandemic. Given the unprecedented nature of the state of affairs, HEINEKEN has elevated its disclosures. There are not any modifications vs the announcement of 16 July. UPDATE ON OUR RESPONSE TO COVID-19 For the reason that starting of the COVID-19 disaster, we now have been adhering to a few guiding ideas. First, the well being, security and belief of our folks is of paramount significance. Second, we do every part we will to safeguard the continuity of our enterprise and shield the enchantment of our manufacturers. This contains supporting the enterprise continuity of our clients and suppliers. And, third, we provide our assist to communities which can be most impacted by the pandemic. In view of these ideas, on Eight April 2020, we outlined our dedication to our folks, clients, suppliers and communities through which we function. Vital efforts have been made inside the organisation to assist our staff in doing their jobs safely, by working from dwelling the place potential, and making use of the usual COVID-19 preventive measures, together with bodily distancing, private hygiene and disinfection protocols and offering adequate private protecting tools. As well as, to supply some safety forour staff in these attempting instances, we now have dedicated to not perform structural lay-offsas a consequence of COVID-19 in 2020. We’ve supported our on-trade clients throughout all areas with recommendation and instruments to soundly reopen, serving to them arrange dwelling supply and on-line companies and supporting them financially, for instance by waiving rental funds. Our Again the Bars initiative was launched to assist on-trade clients in 21 nations and has raised over €10 million. We continued to pay all suppliers on time and have additionally supplied superior funds to suppliers who have been closely impacted by COVID-19. Pandemic reduction totalling over €23 million has been deployed to front-line medical amenities, together with donations of water, non-alcoholic drinks, hand sanitiser and financial contributions. TOP-LINE PERFORMANCE Prime-line efficiency was materially impacted as a number of nations took far-reaching measures to mitigate the unfold of COVID-19 together with restricted motion of populations, outlet closures and necessary lockdown of manufacturing amenities. At this second, none of our breweries are closed on account of authorities restrictions. Web income (beia) declined 16.4% organically pushed by a 13.4% decline in complete consolidated quantity and a 3.6% decline in web income (beia) per hectolitre on account of opposed channel, product and nation combine results. The underlying price combine on a relentless geographic foundation was down 1.3%. Consolidated beer quantity declined 11.5% organically. As anticipated, the affect of the COVID-19 disaster deepened within the second quarter when beer quantity declined 19.4%. After a low level in April, quantity began to steadily get better into June as lockdowns have been lifted world wide and clients restored depleted inventories. Premium quantity declined high-single digits, outperforming the remainder of the portfolio, primarily pushed by the resilience of Heineken®. Consolidated beer quantity(in mhl)2Q202Q19OrganicgrowthHY20HY19OrganicgrowthHeineken N.V.51.0 63.4 -19.4 %102.6 116.1 -11.5 %Africa Center East & Jap Europe8.7 11.4 -23.9 %18.1 21.6 -15.9 %Americas15.3 20.9 -26.8 %34.6 40.7 -15.0 %Asia Pacific6.5 7.7 -13.6 %13.9 15.1 -4.7 %Europe20.5 23.4 -12.5 %35.9 38.7 -8.1 %Heineken® quantity declined 9.0% within the second quarter to shut the primary half with a 2.5% decline. Heineken® is essentially the most trusted worldwide beer model and is outperforming the general class. The model grew double digits in 14 markets together with Brazil, China, the UK, Poland, Germany, Ivory Coast and South Korea. Heineken® 0.Zero grew double digits with progress throughout all areas and specific power within the US, Mexico and South Africa. Following a pause, a few of our world sponsorship platforms are resuming actions for the second half of the 12 months. Heineken® quantity (in mhl)2Q20OrganicgrowthHY20OrganicgrowthTotal9.7 -9.0 %19.1 -2.5 %Africa Center East & Jap Europe1.1 -37.0 %2.4 -26.0 %Americas3.4 6.1 %7.1 15.1 %Asia Pacific1.2 -9.5 %2.7 -7.3 %Europe4.0 -8.5 %6.9 -4.9 %The worldwide model portfolio declined high-single digits. Amstel declined within the low-teens pushed primarily by Spain and South Africa partially offset by continued robust progress in Brazil. Sol declined within the mid-twenties pushed by Mexico. Tiger declined mid-single digits with sharp declines in Singapore, Cambodia and Malaysia and a small decline in Vietnam. In distinction, Desperados grew within the mid-teens, pushed by France, Poland and the Netherlands. Cider quantity declined within the high-teens to 2.1 million hectolitres. Quantity declined within the mid-twenties outdoors the UK, primarily pushed by South Africa. New cider markets Russia, Mexico and Vietnam grew within the high-teens. Within the UK, quantity declined within the low-teens pushed by pub closures. Low & No-Alcohol (LONO) quantity declined high-single digits to six.Three million hectolitres. The no-alcohol portfolio declined mid-single digits, with robust progress of Heineken® 0.0. Our LONO portfolios grew in additional than 20 markets, significantly the US, the UK, Egypt and Singapore. Digitalisation accelerated all through the disaster as customers modified procuring patterns and clients tailored to the lockdowns. Consequently, our e-commerce platforms confirmed robust progress: Beerwulf, our business-to-consumer platform in Europe, had greater than Three million guests, half of them new. On-line gross sales of our home-draught techniques just like the Sub and Blade have greater than doubled throughout the lockdown. Six 2 Go, our business-to-consumer platform in Mexico, acquired ten instances the variety of orders within the first six months of 2020 versus the total 12 months of 2019. Our business-to-business digital platforms are operational in 24 markets. On the finish of 2019, we have been related to greater than 60 thousand clients in conventional channels representing greater than €1 billion of web income. We count on to greater than double the variety of clients related this 12 months.OPERATING PROFIT PERFORMANCE Working revenue was materially impacted by the income decline, incremental bills and impairments because of the COVID-19 disaster, partially offset by means of mitigation actions. Working revenue (beia) declined 52.5% organically, with decrease revenue in all areas. Working revenue declined 94.8%. 84% of the natural working revenue decline was pushed by Europe, Mexico and South Africa. The operational deleverage was amplified by the amount decline within the on-trade in Europe. Concerning the on-trade enterprise in Europe, HEINEKEN has a vertically built-in enterprise model, together with wholesale in a number of markets in addition to pubs within the UK, which supplies shut proximity to clients and customers enabling a broader vary of merchandise, higher service and deeper perception into our buyer and shopper base. Whereas it is a long-term aggressive benefit with usually greater variable earnings, it additionally requires the next mounted price construction and explains a disproportionate short-term drag on revenue. On the finish of July, we estimate 90% of retailers in Europe have reopened. In Mexico, beer quantity contracted within the mid-twenties as our operations have been suspended in April and May. In June, we resumed gross sales and clients started rebuilding inventories. In July, we noticed a rise in market restrictions together with alcohol gross sales bans in some states and on-trade restrictions. In South Africa, complete quantity declined within the forties, on account of a ban on the sale, distribution and manufacturing of alcohol from late March to finish of May. After gross sales resumed in June, a brand new ban on alcohol gross sales was carried out mid-July. Enter prices per hectolitre elevated by about 10% with the mixed adverse affect of channel and product combine and transactional foreign money results, regardless of decrease commodity costs. Different incremental bills included greater depreciations, credit score losses, security & safety tools, donations and different types of assist to our clients and communities. In March, we carried out price mitigating actions that resulted in a web natural discount of half a billion of different bills (beia) within the first half. This excludes the results on enter prices, items for resale, transport and depreciation. For extra particulars, please seek advice from pages 14 and 15. BREWING A BETTER WORLD Through the first half of 2020, we continued to advance our sustainable improvement commitments. Regardless of the numerous drop in volumes, key water effectivity and native sourcing metrics have been steady and we elevated our vitality from renewable sources to 21% (2019: 19%) pushed by Mexico and Vietnam. We additionally joined the Water Resilience Coalition, which was launched in March this 12 months, pledging a dedication to collective motion and web optimistic water affect by 2050. Given the circumstances, we remodeled our #EnjoyResponsibly marketing campaign quickly to #SocialiseResponsibly. We’ve redirected a part of our 10% Heineken® media investments from ‘responsible consumption’ to ‘socialise responsibly’ campaigns. The brand new Heineken® Again to the Bars marketing campaign referred to as ‘#SocialiseResponsibly to keep bars open’ is supposed to have a good time the return to the bars while reminding customers to embrace social distancing and different security measures. For extra particulars on our Brewing a Higher World programmes and definitions, please seek advice from our 2019 Annual Report. EXCEPTIONAL ITEMS AND IMPAIRMENTS The affect of outstanding gadgets and amortization of acquisition-related intangibles (eia) was €742 million (2019: €133 million) on working revenue and €524 million (2019: €118 million) on web revenue. This included impairments of €548 million in tangible and intangible property. The affect of the disaster in growing economies precipitated the necessity for these impairments. In complete, cash producing models representing €Three billion in mounted property have been recognized for impairment checks ensuing within the impairments in Papua New Guinea (€196 million), Jamaica (€138 million) and varied different smaller impairment expenses. For extra particulars on the distinctive gadgets and impairments, please seek advice from pages 30 to 32. NET PROFIT AND LOSS Web revenue (beia) decreased by 75.8% organically to €227 million (2019: €1,054 million). The lower was greater than the decline in working revenue (beia) on account of greater web finance bills, greater non-deductible curiosity bills and different tax results and the decrease relative decline in minority curiosity. Web loss after distinctive gadgets and amortisation of acquisition-related intangibles was €297 million (2019: €936 million acquire). CASH FLOW PERFORMANCE Free working cash circulation amounted to an outflow of €809 million (2019: €578 million influx) primarily on account of decrease cash circulation from working actions and a rise in working capital pushed by the change in payables. Money outflow associated to the acquisition of property, plant and tools (PP&E) amounted to €1,064 million (2019: €1,005 million), together with funds for PP&E additions executed in 2019. The additions to PP&E executed in 2020 amounted to €484 million (2019: €760 million), a discount of 36% as all non-committed CAPEX was suspended from late March, until mandatory for security or enterprise continuity. FINANCING UPDATE HEINEKEN entered the disaster with a robust steadiness sheet and an undrawn dedicated revolving credit score facility of €3.5 billion that matures in May 2024 and doesn’t comprise monetary covenants. In current months, HEINEKEN has efficiently secured €Three billion in further financing by issuing new bonds. HEINEKEN is properly ready to fulfill its monetary commitments, together with the €1 billion bond maturing on Four August 2020. As a measure of prudence, HEINEKEN introduced it is going to deviate from its dividend coverage and won’t pay an interim dividend following its half-year outcomes. TRANSLATIONAL CURRENCY CALCULATED IMPACT For the reason that newest replace on 12 February 2020 a lot of currencies have depreciated considerably versus the Euro, particularly the Mexican Peso, Brazilian Actual and South African Rand. Nevertheless, given the uncertainty in revenue estimations for this 12 months it isn’t potential to supply a dependable estimate of the translational foreign money affect. OUTLOOK FOR FY 2020 The COVID-19 pandemic constitutes a significant adverse macroeconomic improvement and as such it’s having a big affect on HEINEKEN’s markets and on its enterprise in 2020. On Eight April, HEINEKEN withdrew all steerage for 2020 given the dearth of visibility on the top date of the pandemic and the period of its affect. Though we observe a gradual restoration for the reason that trough in April throughout most markets, the state of affairs continues to be risky and unsure. As a consequence, HEINEKEN is barely capable of share directional data for the rest of the 12 months. Product and channel combine is predicted to proceed to adversely affect outcomes, particularly in Europe, because the on-trade continues to be extra affected than the off-trade. As a consequence, enter prices per hectolitre are anticipated to proceed to be considerably greater than final 12 months. We’ve taken mitigating actions and can additional intensify our concentrate on prices, balancing the discount of discretionary bills with offering adequate assist behind our manufacturers and path to market. Non-committed provide chain CAPEX will proceed to be suspended, whereas business CAPEX will resume if and when required to assist our present and future top-line progress. Vital uncertainty stays on the affect of the COVID-19 pandemic, together with dangers associated to containment measures, provide chain continuity, cyber-security incidents and macro financial downturn basically. Given the circumstances, we count on to proceed to supply incremental disclosures of the fabric results of the COVID-19 disaster on our markets and companies. The following replace will include our third quarter buying and selling replace. ENQUIRIES MediaInvestorsTim van der ZandenJosé Federico Castillo MartinezDirector of World CommunicationInvestor Relations DirectorMichael FuchsJanine Ackermann / Robin AchtenFinancial Communications ManagerInvestor Relations Supervisor / Senior AnalystE-mail: firstname.lastname@example.orgE-mail: email@example.comTel: +31-20-5239355Tel: +31-20-5239590INVESTOR CALENDAR HEINEKEN N.V. Buying and selling Replace for Q3 202028 October 2020Full Yr 2020 Outcomes10 February 2021CONFERENCE CALL DETAILS HEINEKEN will host an analyst and investor convention name in relation to its 2020 HY outcomes right now at 10:00 CET/ 9:00 GMT. The decision can be audio solid reside by way of the corporate’s web site: www.theheinekencompany.com. An audio replay service may even be made out there after the convention name on the above net deal with. Analysts and buyers can dial-in utilizing the next phone numbers: United Kingdom (Native): 020 3936 2999Netherlands (Native): 085 888 7233USA: 1 646 664 1960All different places: +44 20 3936 2999 Participation password for all nations: 239940Editorial data:HEINEKEN is the world’s most worldwide brewer. It’s the main developer and marketer of premium beer and cider manufacturers. Led by the Heineken® model, the Group has a portfolio of greater than 300 worldwide, regional, native and specialty beers and ciders. We’re dedicated to innovation, long-term model funding, disciplined gross sales execution and targeted price administration. By “Brewing a Higher World”, sustainability is embedded within the enterprise. HEINEKEN has a well-balanced geographic footprint with management positions in each developed and growing markets. We make use of over 85,000 staff and function breweries, malteries, cider crops and different manufacturing amenities in additional than 70 nations. Heineken N.V. and Heineken Holding N.V. shares commerce on the Euronext in Amsterdam. Costs for the strange shares may be accessed on Bloomberg underneath the symbols HEIA NA and HEIO NA and on Reuters underneath HEIN.AS and HEIO.AS. HEINEKEN has two sponsored stage 1 American Depositary Receipt (ADR) programmes: Heineken N.V. (OTCQX: HEINY) and Heineken Holding N.V. (OTCQX: HKHHY). Most up-to-date data is accessible on HEINEKEN’s web site: www.theHEINEKENcompany.com and comply with us on Twitter by way of @HEINEKENCorp. Market Abuse RegulationThis press launch incorporates price-sensitive data inside the that means of Article 7(1) of the EU Market Abuse Regulation. Disclaimer: This press launch incorporates forward-looking statements with regard to the monetary place and outcomes of HEINEKEN’s actions. These forward-looking statements are topic to dangers and uncertainties that would trigger precise outcomes to vary materially from these expressed within the forward-looking statements. Many of those dangers and uncertainties relate to elements which can be past HEINEKEN’s capacity to manage or estimate exactly, comparable to future market and financial circumstances, developments within the ongoing COVID-19 pandemic and associated authorities measures, the behaviour of different market members, modifications in shopper preferences, the power to efficiently combine acquired companies and obtain anticipated synergies, prices of uncooked supplies, interest-rate and exchange-rate fluctuations, modifications in tax charges, modifications in regulation, change in pension prices, the actions of presidency regulators and climate circumstances. These and different threat elements are detailed in HEINEKEN’s publicly filed annual experiences. You might be cautioned to not place undue reliance on these forward-looking statements, which communicate solely of the date of this press launch. HEINEKEN doesn’t undertake any obligation to replace these forward-looking statements contained on this press launch. Market share estimates contained on this press launch are primarily based on outdoors sources, comparable to specialised analysis institutes, together with administration estimates.
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