Heineken N.V. reports 2021 full year results
Heineken N.V. reported a strong financial performance for 2021 with key highlights including a 12.2% organic growth in net revenue (beia) and a remarkable 43.8% growth in operating profit (beia), reaching a 15.6% margin.
Net profit (beia) surged 80.2% to €2,041 million, while diluted EPS (beia) increased to €3.54. The company achieved gross savings of nearly €1.3 billion, aiming for €2 billion by 2023. Despite facing inflation and supply chain pressures, CEO Dolf van den Brink expressed confidence in long-term growth, driven by their EverGreen strategy and sustainability initiatives.
- Net revenue (beia) grew 12.2% organically, totaling €21,901 million.
- Operating profit (beia) increased 43.8% to €3,414 million, with a margin of 15.6% (+331 bps).
- Net profit (beia) reached €2,041 million, marking an 80.2% organic growth.
- Diluted EPS (beia) rose to €3.54, significantly up from €2.00 in 2020.
- Achieved gross savings of nearly €1.3 billion, aiming for €2 billion by 2023.
- Consolidated volume in Asia Pacific declined by 11.7% due to pandemic-related restrictions.
- Currency translation negatively impacted net revenue (beia) by €515 million and net profit (beia) by €43 million.
Amsterdam, 16 February 2022 – Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) announces:
| Key Highlights | |||
- Net revenue (beia) organic growth
12.2% ; per hectolitre8.3% - Consolidated beer volume
4.6% organic growth - Heineken® volume growth
17.4% , well ahead of 2019 - Gross savings close to
€1.3 billion , on-track to deliver€2 billion by 2023 - Operating profit (beia) organic growth
43.8% , margin15.6% (+331 bps) - Net profit (beia)
€2,041 million ,80.2% organic growth - Diluted EPS (beia)
€3.54 (2020:€2.00)
| CEO Statement | |||
Dolf van den Brink, Chairman of the Executive Board / CEO, commented:
"We delivered a strong set of results in 2021 in a challenging and fast-changing environment. I am proud of how our colleagues, customers, and suppliers continued to adapt, support one another, and deliver these results.
We made a big step towards recovering to pre-pandemic levels, and in parts going beyond. I am pleased with the great momentum of the Heineken® brand, the renewal of our brand and product portfolio, the acceleration of our digital transformation and how we are strengthening our footprint with the acquisition of UBL in India and our announced intentions for Southern Africa. We raised the bar on sustainability and responsibility and are making big strides in right-sizing our cost base.
Looking ahead, although the speed of recovery remains uncertain and we face significant inflationary challenges, we are encouraged by the strong performance of our business and how EverGreen is taking shape. This gives me confidence we are on course to deliver superior and balanced growth to drive sustainable long-term value creation."
| Financial Summary1 | |||
| IFRS Measures | € million | Total growth | BEIA Measures | € million | Organic growth2 | |
| Revenue | 26,583 | | Revenue (beia) | 26,583 | | |
| Net revenue | 21,941 | | Net revenue (beia) | 21,901 | | |
| Operating profit | 4,483 | | Operating profit (beia) | 3,414 | | |
| Operating profit (beia) margin (%) | | |||||
| Net profit | 3,324 | Net profit (beia) | 2,041 | | ||
| Diluted EPS (in €) | 5.77 | Diluted EPS (beia) (in €) | 3.54 | | ||
| Free operating cash flow | 2,514 | |||||
| Net debt / EBITDA (beia)3 | 2.6x |
1 Consolidated figures are used throughout this report, unless otherwise stated. Please refer to the Glossary for an explanation of non-GAAP measures and other terms. Page 24 includes a reconciliation versus IFRS metrics. These non-GAAP measures are included in internal management reports that are reviewed by the Executive Board of HEINEKEN, as management believes that this measurement is the most relevant in evaluating the results.
2 Organic growth shown, except for Diluted EPS (beia), which is total growth.
3 Includes acquisitions and excludes disposals on a 12-month pro-forma basis.
| Operational Review | |||
During 2021, we deployed our EverGreen strategy across the business, designed to emerge stronger from the COVID-19 crisis and adapt to new external dynamics for superior and balanced growth with enhanced profitability, whilst simultaneously raising the bar on sustainability and responsibility.
DRIVING SUPERIOR GROWTH
Our superior growth ambition is grounded in building a favourable geographic footprint, our strong premium beer brands, including non-alcoholic variants and developing winning beverage propositions in fast-growing segments.
Net revenue (beia) for the full year 2021 increased by
In the second half of the year, net revenue (beia) grew
Beer volume grew
| Beer volume1 | 4Q21 | Organic growth | FY21 | Organic growth | ||||||||
| (in mhl) | 4Q20 | FY20 | ||||||||||
| Heineken N.V. | 61.1 | 56.2 | 6.2 % | 231.2 | 221.6 | 4.6 % | ||||||
| Africa Middle East & Eastern Europe | 10.1 | 11.2 | 4.5 % | 38.9 | 39.6 | 10.4 % | ||||||
| Americas | 23.9 | 22.5 | 6.5 % | 85.4 | 79.1 | 8.2 % | ||||||
| Asia Pacific | 10.0 | 7.6 | -9.0 % | 29.4 | 28.1 | -11.7 % | ||||||
| Europe | 17.1 | 14.8 | 15.0 % | 77.5 | 74.8 | 3.8 % |
1 2021 volume reflects the shift of malt-based, unfermented, non-alcoholic drinks from Beer to Non-Beer Volume. Organic growth has been corrected.
Driving premiumisation at scale, led by Heineken®
Premium beer volume grew
The outstanding growth of Heineken® Original was further supported by the strong performance of its line extensions. Heineken® Silver more than doubled its volume, driven by excellent performances in China and Vietnam. Building on this success, we will roll-out Heineken® Silver internationally to reach more than 20 markets in 2022.
| Heineken® volume | 4Q21 | Organic growth | FY21 | Organic growth | ||||
| (in mhl) | ||||||||
| Total | 13.3 | | 48.8 | | ||||
| Africa Middle East & Eastern Europe | 1.9 | | 6.7 | | ||||
| Americas | 6.0 | | 19.6 | | ||||
| Asia Pacific | 1.9 | | 7.1 | | ||||
| Europe | 3.5 | | 15.5 | |
Our world-class sponsorships are a unique vehicle to connect and reach consumers, and 2021 was our biggest year in history despite COVID-19 restrictions. The UEFA Champions League and
Formula 1 and Formula E were a highlight with the Dutch Grand Prix cruising Heineken®'s home ground for the first time since 1985 at Circuit Zandvoort in the Netherlands. We celebrated the 2020 Olympics and joined in to cheer on all athletes as they competed in Tokyo. To promote gender equality in sports, Heineken® announced several upcoming sponsorships of women's sports, including UEFA Women's Football and the Formula 1 W Series. The highly anticipated Bond movie, "No Time to Die", was released 30 September 2021 featuring Daniel Craig and a crisp bottle of Heineken®. It was "well worth the wait."
We accelerated premiumisation at scale via our international brands portfolio, complementing Heineken® in addressing specific consumer needs. Amstel grew volume in the mid-twenties, with 20 markets growing double-digits, with in-market results particularly strong in Brazil, Mexico, South Africa and Nigeria. Leveraging its success in Brazil and high impact platforms like the Copa Libertadores, the brand has now expanded into six markets in South America. Amstel Ultra reached more than 1 million hectolitres in Mexico and began its international roll-out, reaching 11 new markets in 2021 with more to come in 2022. Amstel Ultra and Amstel 0.0 appeal to a younger, more health-conscious consumer group, and this year served up a partnership with Rafa Nadal promoting moderation as part of an active balanced lifestyle. Birra Moretti grew in the high-twenties, sharing the true taste of Italy across Europe. It reached more than 1 million hectolitres in the UK alone, grew rapidly in Romania, Switzerland and Ireland, and was successfully launched in the Netherlands, Germany and Serbia. Tiger was heavily impacted by the lockdowns in Vietnam and Cambodia and declined in the teens, with the last quarter showing improving trends in volume and market share as restrictions eased. Outside Asia, the brand rallied as it almost doubled its volume in Nigeria and continued its global expansion with launches in Brazil and Peru. Tiger Crystal continues to grow and expanded into 14 markets in 2021. Sol grew slightly driven by strong growth in Chile, South Africa and Canada. Edelweiss grew in the mid-teens as it brought consumers the taste of the Alps with its first global campaign, reinvigorating the growth in South Korea and launching in China, Vietnam, Singapore, Malaysia and Russia. Lagunitas, although falling short of our internal ambitions in the USA, continued to grow internationally playing meaningfully in the IPA premium beer segment. The brand grew double-digits in Brazil, France, Italy, and the Netherlands and was launched in Russia, Greece, South Korea, and with local production in Mexico.
We are making fewer, bigger bets on premium local brands. In Europe, we carefully selected brands specifically meeting the needs of younger consumers, resulting in growth in the thirties this year and representing now c.
Pioneer choice in low & no-alcohol
Consumers are increasingly looking for healthy hydration and a tasty, adult refreshment with lower or no alcohol content to enjoy on any occasion. Meeting this consumer need, our Low & No-Alcohol (LONO) portfolio grew more than
Intentionally expand beyond beer
We aim to stretch our product portfolio beyond beer to reach a spectrum of consumer needs, including fast-growing segments loved by young consumers.
Desperados continued its momentum and grew in the high-teens, driven by its core markets in Europe, particularly France, and successful expansion into Africa with the launches in Nigeria and Ivory Coast. The brand launched its new Go Desperados creative platform, designed to capture the essence of the brand – inviting people to try new things and pour some unusual in their lives. Desperados launched the world’s first dance-powered app, Rave to Save, providing hybrid experiences by connecting people at home with parties around the world through holograms and virtual reality, simultaneously raising money for nightclubs affected by the pandemic. To date, it has realised over 15 million dance steps.
Cider volume grew by a mid-single-digit to 4.9 million hectolitres (2020: 4.6 million), mainly driven by Strongbow following the recovery of South Africa and the acquisition of the brand in Australia. In the UK, cider volume declined by a mid-single-digit, as a result of the pub closures in the first half of the year.
We continue to experiment across different markets in the Hard Seltzer category, for example with Amstel Ultra Hard Seltzer in Mexico, Dos Equis Ranch Water in the USA, Doctor Diesel Hard Seltzer Lemonade in Russia and Pure Piraña in Europe, Mexico and New Zealand.
Build a future-fit digital route-to-consumer
Digitalisation trends have accelerated, consumers are changing shopping patterns and customers are adapting to new realities. We aim to be the best connected brewer, leveraging our strong customer relationships to build a future-fit digital route-to-consumer. In 2021 we increased our investment to strengthen our capabilities and scale our e-commerce platforms:
- We accelerated the deployment of our business-to-business digital (eB2B) platforms in all regions. We now operate them in 30 markets, representing
75% of our net revenue. With these platforms, our customers in the fragmented trade can grow their business with more and better services and data insights, while we can increase sales and productivity. - We captured
€2.8 billion in digital sales value, a growth of130% versus last year, driven by strong growth in Mexico, Brazil, Vietnam, Nigeria, the UK, Italy, France, Cambodia, Singapore, Egypt and Ireland, and well on-track to€10 billion by 2025. In 2021, we captured close to one-third of the net revenue (beia) of the fragmented trade in our markets via our eB2B platforms, and almost half by the end of the year. During 2021 we connected with close to 370,000 active customers during the year, more than 3x last year. - Beerwulf, our direct-to-consumer (D2C) platform in Europe, grew its revenue in the high-thirties, mainly driven by sales of our home-draught systems, especially the Blade in the UK and the Netherlands.
- In Mexico, following all the learnings from Six-2-Go, we launched our new D2C platform GLUP, with a value proposition designed to delight consumers who want beer, beverages and more delivered in less than 60 minutes.
Strengthen and optimise our footprint
We continue to develop and expand our geographical and portfolio footprint to build a long-term, sustained growth advantage.
On 29 July 2021, HEINEKEN obtained control of United Breweries Limited (UBL). UBL is now a top HEINEKEN operating company, and Kingfisher a top five global brand with an exciting long-term growth opportunity. Integration of UBL is progressing as planned.
On 15 November 2021, HEINEKEN announced that it has entered into an Implementation Agreement with Distell Group Holdings Limited (‘Distell’), Namibia Breweries Limited (‘NBL’) and Ohlthaver & List Group of Companies to integrate their respective and relevant businesses to create a regional beverage champion for Southern Africa. Completion of the proposed transaction is conditional on obtaining shareholder and regulatory approvals including anti-trust approval in South Africa, Namibia and certain other African countries. If all the conditions are fulfilled, completion of the proposed transaction is expected in the third quarter of 2022.
We have also addressed most of our value-dilutive operations, including restructuring of our businesses in the Philippines and Lebanon; whilst making steady progress towards sustained scale and profitability in recent market entries like Ecuador and Peru.
FUNDING THE GROWTH
To support our growth ambitions, offset inflationary pressures, restore our profitability and thereafter gear our business to deliver operating leverage consistently, we are structurally addressing our cost base and building a cost-conscious culture.
At the end of 2020, we launched a productivity programme targeting
As important, we now have a company-wide, systematic approach to find cost opportunities. Projects and initiatives are captured in a standardised tool and follow a disciplined project management funnel approach to bring ideas to maturity and value realisation.
Next to the gross savings delivered by our productivity programme, we also took drastic cost mitigating actions to partially offset the financial impact from lockdowns and other restrictions to operate. These actions resulted in a reduction of expenses (beia) of circa
Operating profit (beia) grew
Net profit (beia) grew
For more details, please refer to the Financial Review.
RAISING THE BAR ON SUSTAINABILITY AND RESPONSIBILITY
In 2021, we launched the next phase of our sustainability and responsibility strategy in the form of 22 new Brew a Better World commitments focusing on three areas: Raising the bar on climate action, accelerating our social sustainability agenda and driving our brands to be more ambitious in promoting moderate consumption of alcohol.
Environmental: Path to zero impact
In April 2021, we shared our goal to reach net zero carbon emissions in our full value chain 10 years ahead of the Paris Agreement. Our stepped-up ambition to decarbonize first in production by 2030 has been approved by the Science Based Targets initiative (SBTi), with scope 1 and 2 reductions in line with the 1.5°C climate change pathway. With 2018 as a baseline, we have reduced absolute carbon emissions in production by
We continue to focus on healthy watersheds via efficient water usage, wastewater management and water security. Aligned with our 2030 commitments, we aim to further reduce water usage to 2.6 hectolitre per hectolitre (hl/hl) in water-stressed areas and 2.9 hl/hl worldwide. By the end of 2021, we reached 3.1 hl/hl and 3.4 hl/hl, respectively. 23 of our 31 sites in water-stressed areas have begun watershed protection programmes with the aim to fully balance our water use by 2030, one third of these sites are already fully balanced.
Social: Path to an inclusive, fair and equitable world
While our percentage of women in senior management has doubled from a decade ago, much opportunity remains in terms of gender diversity. By the end of 2021,
We also commit to equal pay for equal work between female and male colleagues and want to ensure that all our employees worldwide earn at least a fair wage1 by 2023 with a focus on the most vulnerable communities. By the end of 2021,
Responsible: Path to moderate and no harmful use
Our ambition is to make 0.0 alcohol options available for consumers everywhere so that there is always a choice. Heineken® 0.0 is now available in more than 100 markets and, by 2023, we will ensure a zero-alcohol option is available for at least two strategic brands in the majority of our operating companies, accounting for
We will continue to use the power of our flagship brand to promote moderation. We commit
Governance
In 2021, we continued to raise the bar on our ways of working, governance and transparent reporting. Given the importance of sustainability and responsibility for long-term value creation:
- We formally added sustainability and responsibility to our long-term value creation model, the Green Diamond
- We started two Sustainability & Responsibility Committees: one at Supervisory Board level and one at Executive Management level
- We committed to the World Economic Forum's Stakeholder Capitalism Metrics (WEF) and the Task Force on Climate-related Financial Disclosures (TCFD), which both aim to improve quality and consistency of climate-related disclosures
- We assessed how best to align our remuneration policy with our sustainability ambitions; a proposal will be shared during our Annual General Meeting in April 2022
More details on these and other areas of our 2030 strategy are available on our website and in our 2021 Annual Report.
| Outlook Statements | |||
We launched our EverGreen strategy in February 2021 to future-proof our business and deliver superior, balanced growth for sustainable, long-term value creation. It requires us to constantly navigate the long-term transformation with the short-term financial delivery under fast-changing external circumstances. We are encouraged by the progress made, witnessed by the strong performance of our business in 2021 and how EverGreen is taking shape.
In 2022, we will continue to navigate an uncertain environment and expect COVID-19 to still have an impact on revenues. Our plans assume markets in APAC to progressively bounce back during the year, yet full recovery of the on-trade in Europe may take longer.
We also expect to be significantly impacted by inflation and supply chain resilience pressures. More specifically, we expect our input cost per hectolitre (beia) to increase in the mid-teens given our hedged positions and the sharp increase in the prices of commodities, energy, and freight. We will offset these input cost increases through pricing in absolute terms, which may lead to softer beer consumption.
Reflecting our confidence in the long-term, we intend to reverse the cost mitigation actions undertaken in 2021 and to further step up our investments in brand support and our digital and sustainability initiatives. This investment will be partially offset by further delivery of gross savings from our productivity programme. These changes are expected to have a greater impact in the first half of the year.
Overall, we expect a stable to modest sequential improvement in operating profit margin (beia) in 2022. Whilst continuing to target
We also anticipate:
- An average effective interest rate (beia) broadly in line with 2021 (2021:
2.7% ) - Capital expenditure related to property, plant and equipment and intangible assets of around
€2 billion (2021:€1.6 billion ) - An effective tax rate (beia) of around
28% (2021:29.9% ), back to the level of 2019.
| Total Dividend For 2021 | |||
The Heineken N.V. dividend policy is to pay a ratio of
| Translational Calculated Currency Impact | |||
The translational currency impact for 2021 was negative, amounting to
Applying spot rates as of 14 February 2022 to the 2021 financial results as a base, the calculated currency translational impact would be positive, approximately
| Regional Overview |
| Net revenue (beia) | FY21 | FY20 | Organic growth | |||
| (in € million) | ||||||
| Heineken N.V. | 21,901 | 19,724 | | |||
| Africa Middle East & Eastern Europe | 3,159 | 2,782 | | |||
| Americas | 7,226 | 6,319 | | |||
| Asia Pacific | 2,764 | 2,707 | - | |||
| Europe | 9,494 | 8,631 | | |||
| Head Office & Eliminations | -744 | -716 |
| Operating profit (beia) | FY21 | FY20 | Organic growth | |||
| (in € million) | ||||||
| Heineken N.V. | 3,414 | 2,421 | | |||
| Africa Middle East & Eastern Europe | 442 | 264 | | |||
| Americas | 1,215 | 1,045 | | |||
| Asia Pacific | 753 | 867 | - | |||
| Europe | 1,160 | 447 | | |||
| Head Office & Eliminations | -155 | -202 |
| Developing markets FY21 | Group beer volume | Group net revenue (beia) | Group operating profit (beia)1 | |||
| (in mhl or € million unless otherwise stated) | ||||||
| Developing markets in: | 177.6 | 11,983 | 2,085 | |||
| Africa Middle East & Eastern Europe | 40.6 | |||||
| Latin America & the Caribbean | 78.1 | |||||
| Asia Pacific | 55.5 | |||||
| Europe | 3.4 | |||||
| % of Group | | | |
1 Excludes Head Office & Eliminations
Africa Middle East & Eastern Europe (AMEE)
| Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
| (in mhl or € million unless otherwise stated) | ||||||||
| Net revenue (beia) | 3,159 | 2,782 | | | ||||
| Operating profit (beia) | 442 | 264 | | | ||||
| Operating profit (beia) margin | 14.0% | | 449 bps | |||||
| Total consolidated volume | 50.3 | 45.4 | | | ||||
| Beer volume | 38.9 | 39.6 | - | | ||||
| Non-Beer volume | 11.3 | 5.7 | | | ||||
| Third party products volume | 0.1 | 0.1 | | | ||||
| Licensed beer volume | 2.4 | 2.1 | ||||||
| Group beer volume | 41.7 | 42.2 |
Our Africa, Middle East & Eastern Europe region presents strong growth opportunities derived from its growing population and urbanisation trends. We are expanding and enhancing our strong market positions with assertive commercial strategies, disciplined cost management, and capital efficiency to ensure we deliver balanced and profitable growth.
Consolidated beer volume grew
Net revenue (beia) grew
In Nigeria, total volume grew in the low-teens and is well ahead of 2019, held back however by production capacity constraints we are addressing. The premium portfolio grew in the thirties, led by Tiger, Heineken® and the successful introduction of Desperados. The low-and non-alcoholic portfolio grew in the mid-teens, led by Maltina.
In South Africa, total volume grew in the forties, ahead of the market. Beer volume grew close to
In Russia, beer volume grew by a low-single-digit, driven by the strong double-digit growth of our premium portfolio, ahead of the market. The growth was led by Heineken®, Miller and Dr Diesel. We enhanced the repertoire of flavours of Dr Diesel with the introduction of Strawberry Lime mix, with reduced calories and no sugar. Our cider portfolio grew double-digits, strengthening our leadership position in this fast growing segment.
In Ethiopia, beer volume grew in the low-teens, in line with the market, led by the strong growth of Harar and Bedele. The premium portfolio continued to deliver double-digit growth, driven by Bedele Special. The country continues to face tensions and instability.
In Egypt, total volume grew by a high-single-digit, led by the strong recovery of our beer, wine and spirits portfolio, particularly Heineken® in the premium segment. The last quarter of the year saw a strong recovery in tourism as restrictions were lifted. The non-alcoholic portfolio grew by a low-single-digit despite a significant price increase.
In Ivory Coast, beer volume grew in the twenties, well ahead of 2019, driven by the strong growth of Heineken® and the successful launch of Desperados under local production.
Beer volume also grew in the double-digits in the DRC, Mozambique, Algeria, Tunisia, Sierra Leone, and across many export markets.
Americas
| Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
| (in mhl or € million unless otherwise stated) | ||||||||
| Net revenue (beia) | 7,226 | 6,319 | | | ||||
| Operating profit (beia) | 1,215 | 1,045 | | | ||||
| Operating profit (beia) margin | 16.8% | | 28 bps | |||||
| Total consolidated volume | 89.4 | 86 | | | ||||
| Beer volume | 85.4 | 79.1 | | | ||||
| Non-Beer volume | 3.9 | 6.7 | - | - | ||||
| Third party products volume | 0.1 | 0.1 | | | ||||
| Licensed beer volume | 3.1 | 2.1 | ||||||
| Group beer volume | 97.1 | 89.0 |
The Americas represent over
Consolidated beer volume grew
Net revenue (beia) grew
In Mexico, beer volume grew in the high-teens, ahead of the market, and in line with 2019. Our premium portfolio grew by more than
In Brazil, beer volume grew by more than
In the USA, beer volume grew by a low-single-digit, ahead of the market, driven by Heineken®, Dos Equis and our innovations. Heineken® 0.0 strengthened its position as the #1 non-alcoholic beer in the market. Dos Equis grew in the mid-teens, boosted by the success of innovations Dos Equis Lime & Salt, as well as variety packs and Ranch Water.
The strong performance in the region was also supported by strong growth in Panama, Peru, Ecuador, Jamaica, and from our joint venture partners in Chile, Colombia, Argentina, and Costa Rica.
Asia Pacific
| Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
| (in mhl or € million unless otherwise stated) | ||||||||
| Net revenue (beia) | 2,764 | 2,707 | | - | ||||
| Operating profit (beia) | 753 | 867 | - | - | ||||
| Operating profit (beia) margin | | | -481 bps | |||||
| Total consolidated volume | 30.4 | 28.7 | | - | ||||
| Beer volume | 29.4 | 28.1 | | - | ||||
| Non-Beer volume | 0.9 | 0.7 | | | ||||
| Third party products volume | 0.1 | 0.0 | | | ||||
| Licensed beer volume | 3.7 | 2.9 | ||||||
| Group beer volume | 59.3 | 57.6 |
The Asia Pacific region offers a large growth potential, and we are well-positioned to capture it given our strong market positions. We are building brands that serve consumers that often prefer less bitter variants, non-alcoholic beer, and modern wheat. We are also accelerating our growth in Vietnam while broadening our base with investments in future growth markets.
After a strong performance at the start of the year, the region was impacted severely by the pandemic, which led to suspension of breweries, alcohol bans and closing of the on-trade. As a consequence, consolidated beer volume declined
Net revenue (beia) declined
In Vietnam, our growth momentum was disrupted by the lockdowns introduced between June and September. Beer volume declined in the high-teens, as our strongholds in the South saw the most restrictions, particularly in Ho Chi Minh City. We observed a gradual recovery in the last quarter as the social-distancing measures were lifted and we restored our leadership position towards the end of the year. Bia Viet grew in the high-twenties as we continue to increase our penetration into mainstream and outside our strongholds, while in premium Heineken® grew slightly, driven by the success of Heineken® Silver.
In India, beer volume grew in the thirties, outperforming the market, following a progressive recovery and returning back to pre-pandemic levels in the fourth quarter. Premium volume grew ahead of the total portfolio, led by Kingfisher Ultra, Heineken® and Amstel. The integration of UBL is progressing as planned.
In China, Heineken® grew strong double-digits, led by the continued excellent momentum of Heineken® Silver. Heineken® volume nearly doubled compared to pre-pandemic levels. China is now the fourth largest market for Heineken® globally.
In Cambodia, beer volume declined in the high-teens, in line with the market, driven by lockdown restrictions and alcohol bans. These were relaxed in the fourth quarter and beer volume returned back to growth. We have revamped our route-to-consumer by expanding direct coverage and accelerating the implementation of our B2B platform, which now captures
In Malaysia, beer volume increased by a low-single-digit, outperforming the market and growing by a double-digit in the last quarter of the year. The premium portfolio grew by a high-single-digit, led by Heineken® and the introduction of Edelweiss.
In Indonesia, total volume grew in the high-teens, driven by a gradual recovery in the domestic market and the strong growth of Heineken®. The on-trade remains closed, and quarantine requirements are keeping tourists away from Bali.
In Singapore, Myanmar and Laos beer volume outperformed the market and grew in the double-digits, driven by the premium portfolio, led by Heineken®.
Europe
| Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
| (in mhl or € million unless otherwise stated) | ||||||||
| Net revenue (beia) | 9,494 | 8,631 | | | ||||
| Operating profit (beia) | 1,160 | 447 | | | ||||
| Operating profit (beia) margin | 12.2% | | 704 bps | |||||
| Total consolidated volume | 91.8 | 88.8 | | | ||||
| Beer volume | 77.5 | 74.8 | | | ||||
| Non-Beer volume | 9.0 | 9.0 | - | - | ||||
| Third party products volume | 5.4 | 5.0 | | | ||||
| Licensed beer volume | 0.7 | 0.7 | ||||||
| Group beer volume | 80.4 | 77.6 |
Europe is our largest region and as market leaders we aim to grow the category and our market share by tailoring our products to emerging consumer trends and winning in premium whilst leveraging our scale.
Consolidated beer volume grew organically by
Net revenue (beia) increased by
In the UK, total volume grew by a mid-single-digit, in line with the total market. Consumers show a growing appetite for premium products, driving the growth of our premium beer portfolio by a high-single-digit, led by Birra Moretti and Desperados. Birra Moretti reached more than 1 million hectolitres this year. Our low-and non-alcoholic portfolio grew in the thirties, led by the continued success of Heineken® 0.0. Our pub estate opened quickly and safely, ahead of the wider on-trade.
In France, total volume grew by a mid-single-digit, driven by the double-digit growth of our premium beer portfolio, led by Desperados and Affligem. We outperformed the market in the off-trade. Our consumer-led innovations had an excellent performance, particularly Affligem Blanche, Desperados Florida Sunrise and Desperados Virgin Mojito with 4 SKUs in the top 5 liquid innovations in hypermarkets and supermarkets.
In Spain, beer volume grew by a high-single-digit and outperformed the market in both the on-trade and off-trade channels, driven by the growth of our premium portfolio, led by Heineken® and El Águila. Our non-alcoholic beer portfolio grew in the mid-teens, led by Amstel Oro 0.0 as it leveraged the partnership with Rafa Nadal, and was further supported by the growth of Heineken® 0.0.
In Italy, beer volume grew in the low-teens, outperforming the market in the off-trade. The premium beer portfolio performed particularly well, driven by Messina, Birra Moretti Filtrata a Freddo and Ichnusa. The low- and non-alcoholic portfolio grew in the mid-teens, led by Heineken® 0.0 and Birra Moretti 0.0.
In Poland, beer volume declined by a mid-single-digit in a declining market, driven by the economy portfolio. Heineken® and Desperados had a strong performance in the premium segment. The low- and non-alcoholic portfolio grew by a mid-single-digit, driven by Heineken® 0.0 and the launch of Desperados Virgin 0.0.
In the Netherlands, beer volume was broadly in line with last year, following a strong recovery in the last quarter. The premium portfolio grew in the low-teens, driven by the successful launch of Birra Moretti l'Autentica and the continued growth of Affligem and Desperados. Birra Moretti was the #1 innovation in beverages in 2021 in the market.
| Financial Review |
| Key figures | ||||||||||||
| (in mhl or € million unless otherwise stated) | FY20 | Currency translation | Consolidation impact | Organic growth | FY21 | Organic growth | ||||||
| Revenue (IFRS/beia) | 23,770 | -538 | 647 | 2,704 | 26,583 | 11.4 % | ||||||
| Excise tax expense (beia) | -4,046 | 24 | -368 | -292 | -4,683 | -7.2 % | ||||||
| Net Revenue (beia) | 19,724 | -515 | 280 | 2,412 | 21,901 | 12.2 % | ||||||
| Total other expenses (beia) | -17,303 | 417 | -249 | -1,352 | -18,487 | -7.8 % | ||||||
| Operating profit (beia) | 2,421 | -98 | 31 | 1,060 | 3,414 | 43.8 % | ||||||
| Net interest income/(expenses) (beia) | -470 | 8 | 1 | 59 | -403 | 12.5 % | ||||||
| Other net finance income/(expenses) (beia) | -146 | 23 | -4 | 32 | -94 | 22.2 % | ||||||
| Share of net profit of assoc./ JVs (beia) | 147 | -6 | -7 | 103 | 238 | 70.0 % | ||||||
| Income tax expense (beia) | -593 | 14 | -6 | -287 | -872 | -48.5 % | ||||||
| Non-controlling interests (beia) | -205 | 16 | -11 | -41 | -241 | -20.1 % | ||||||
| Net profit (beia) | 1,154 | -43 | 4 | 925 | 2,041 | 80.2 % | ||||||
| Eia | -1,358 | 1,283 | ||||||||||
| Net profit/(loss) | -204 | 3,324 |
Note: due to rounding, this table will not always cast
Main changes in consolidation
As part of the organisational redesign of EverGreen, HEINEKEN merged its export business units of Europe and Africa, Middle East & Eastern Europe into a single unit, which is now reported under Europe as of 1 April 2021.
On 23 June 2021, HEINEKEN acquired additional ordinary shares in UBL, taking its shareholding in UBL from
Revenue
Revenue was
Net revenue increased
Expenses
Total other expenses were
Input costs per hectolitre increased faster in the second half of the year, by a high-single-digit, and closed the year up by a mid-single-digit. The increase was mainly driven by transactional currency effects, particularly from the Brazilian Real, and higher prices of raw and packaging materials, energy, and freight, partially offset by structural costs savings.
Marketing and selling (beia) expenses increased organically by
Personnel expenses (beia) increased organically with
Depreciation & amortisation expenses (beia) decreased organically by
Operating profit
Operating profit increased to
Net finance expenses (beia)
Net interest expenses (beia) decreased organically by
Other net finance expenses (beia) amounted to
Share of net profit of associates and joint ventures (beia)
The share of net profit of associates and joint ventures (beia) amounted to
Income tax expense (beia)
The effective tax rate (beia) was
Net profit and loss
The net profit for 2021 was
Exceptional items & amortisation of acquisition-related intangibles (eia)
Exceptional items are defined as items of income and expense of such size, nature or incidence that in the view of management their disclosure is relevant to explain the performance of HEINEKEN for the period. Exceptional items include, amongst others, impairments (and reversal of impairments) of goodwill and fixed assets, gains and losses from acquisitions and disposals, redundancy costs following a restructuring, the tax impact on exceptional items and tax rate changes (the one-off impact on deferred tax positions).
The impact of eia on net profit amounted to a benefit of
Amortisation of acquisition-related intangibles recorded in operating profit amounted to
€41 million benefit on excise tax (2020:€8 million expenses)€1,270 million gain on previously-held equity interest from UBL and€187 million benefit from tax credits in Brazil recorded in other income (2020: nil)€108 million in impairments (net of reversals), including€203 million for Lagunitas (total impairments in 2020:€963 million )€32 million in restructuring expenses (2020:€331 million )€3 million of other net exceptional expenses, including loss on disposals (2020:€68 million )
Please refer to page 24 for a description of the exceptional items and amortisation of acquisition-related intangibles below operating profit.
Capital expenditure and cash flow
Capital expenditure related to property, plant and equipment and intangible assets (CAPEX) amounted to
Free operating cash flow amounted to
Financial structure
Total gross debt amounted to
Including the effect of cross-currency swaps,
The centrally available financing headroom at Group level was approximately
Average number of shares
HEINEKEN has 576,002,613 shares in issue. In the calculation of basic EPS, the weighted average number of shares outstanding was 575,740,269 (2020: 575,625,598).
In the calculation of 2021 diluted EPS (beia), shares to be delivered under the employee incentive programme (229,127 shares) are added to the weighted average shares outstanding. The weighted average diluted number of shares outstanding was 575,969,395 (2020: 575,821,605).
Full Year 2021 Consolidated Metrics
| In mhl or €million unless otherwise stated & consolidated figures unless otherwise stated | FY20 | Currency translation | Consolidation impact | Organic growth | FY211 | Organic growth | ||||||
| Africa, Middle East & Eastern Europe | ||||||||||||
| Net revenue (beia) | 2,782 | -274 | -69 | 720 | 3,159 | | ||||||
| Operating profit (beia) | 264 | -47 | -10 | 235 | 442 | | ||||||
| Operating profit (beia) margin | | 14.0% | ||||||||||
| Total consolidated volume | 45.4 | -0.7 | 5.5 | 50.3 | | |||||||
| Beer volume | 39.6 | -4.9 | 4.1 | 38.9 | | |||||||
| Non-beer volume | 5.7 | 4.2 | 1.4 | 11.3 | | |||||||
| Third party products volume | 0.1 | — | 0.0 | 0.1 | | |||||||
| Licensed beer volume | 2.1 | 2.4 | ||||||||||
| Group beer volume | 42.2 | 41.7 | ||||||||||
| Americas | ||||||||||||
| Net revenue (beia) | 6,319 | -224 | — | 1,131 | 7,226 | | ||||||
| Operating profit (beia) | 1,045 | -33 | — | 203 | 1,215 | | ||||||
| Operating profit (beia) margin | | 16.8% | ||||||||||
| Total consolidated volume | 86.0 | — | 3.5 | 89.4 | | |||||||
| Beer volume | 79.1 | -0.2 | 6.5 | 85.4 | | |||||||
| Non-beer volume | 6.7 | 0.2 | -3.0 | 3.9 | - | |||||||
| Third party products volume | 0.1 | — | — | 0.1 | | |||||||
| Licensed beer volume | 2.1 | 3.1 | ||||||||||
| Group beer volume | 89.0 | 97.1 | ||||||||||
| Asia Pacific | ||||||||||||
| Net revenue (beia) | 2,707 | -62 | 283 | -164 | 2,764 | - | ||||||
| Operating profit (beia) | 867 | -28 | 31 | -117 | 753 | - | ||||||
| Operating profit (beia) margin | | 27.2% | ||||||||||
| Total consolidated volume | 28.7 | 4.9 | -3.2 | 30.4 | - | |||||||
| Beer volume | 28.1 | 4.7 | -3.3 | 29.4 | - | |||||||
| Non-beer volume | 0.7 | 0.2 | — | 0.9 | | |||||||
| Third party products volume | 0.0 | — | 0.1 | 0.1 | | |||||||
| Licensed beer volume | 2.9 | 3.7 | ||||||||||
| Group beer volume | 57.6 | 59.3 | ||||||||||
| Europe | ||||||||||||
| Net revenue (beia) | 8,631 | 42 | 77 | 744 | 9,494 | | ||||||
| Operating profit (beia) | 447 | 13 | 11 | 689 | 1,160 | | ||||||
| Operating profit (beia) margin | | 12.2% | ||||||||||
| Total consolidated volume | 88.8 | -0.1 | 3.1 | 91.8 | | |||||||
| Beer volume | 74.8 | -0.1 | 2.8 | 77.5 | | |||||||
| Non-beer volume | 9.0 | — | -0.1 | 9.0 | - | |||||||
| Third party products volume | 5.0 | — | 0.4 | 5.4 | | |||||||
| Licensed beer volume | 0.7 | 0.7 | ||||||||||
| Group beer volume | 77.6 | 80.4 | ||||||||||
| Head Office & Eliminations | ||||||||||||
| Net revenue (beia) | -716 | 2 | -11 | -20 | -744 | n.a. | ||||||
| Operating profit (beia) | -202 | -2 | — | 49 | -155 | n.a. | ||||||
| Heineken N.V. | ||||||||||||
| Net revenue (beia) | 19,724 | -515 | 280 | 2,412 | 21,901 | | ||||||
| Total expenses (beia) | -17,303 | 417 | -249 | -1,352 | -18,487 | - | ||||||
| Operating profit (beia) | 2,421 | -98 | 31 | 1,060 | 3,414 | | ||||||
| Operating profit (beia) margin | | 15.6 % | ||||||||||
| Share of net profit of associates /JVs (beia) | 147 | -6 | -7 | 103 | 238 | | ||||||
| Net Interest income / (expenses) (beia) | -470 | 8 | 1 | 59 | -403 | | ||||||
| Other net finance income / (expenses) (beia) | -146 | 23 | -4 | 32 | -94 | | ||||||
| Income tax expense (beia) | -593 | 14 | -6 | -287 | -872 | - | ||||||
| Minority Interests | -205 | 16 | -11 | -41 | -241 | - | ||||||
| Net profit (beia) | 1,154 | -43 | 4 | 926 | 2,041 | | ||||||
| Total consolidated volume | 248.9 | 4.1 | 9.0 | 262.0 | | |||||||
| Beer volume | 221.6 | -0.5 | 10.2 | 231.2 | | |||||||
| Non-beer volume | 22.1 | 4.6 | -1.7 | 25.1 | - | |||||||
| Third party products volume | 5.2 | — | 0.5 | 5.7 | | |||||||
| Licensed beer volume | 7.8 | 9.9 | ||||||||||
| Group beer volume | 266.4 | 278.5 |
Note: due to rounding, this table will not always cast
1 2021 volume reflects the shift of malt-based, unfermented, non-alcoholic drinks from Beer to Non-Beer Volume. Organic growth has been corrected.
Fourth Quarter 2021 Metrics
| In mhl unless otherwise stated & consolidated figures unless otherwise stated | 4Q20 | Consolidation impact | Organic growth | 4Q211 | Organic growth | |||||
| Africa, Middle East & Eastern Europe | ||||||||||
| Total consolidated volume | 12.7 | -0.2 | 0.5 | 13.0 | | |||||
| Beer volume | 11.2 | -1.6 | 0.5 | 10.1 | | |||||
| Non-beer volume | 1.5 | 1.4 | — | 2.9 | - | |||||
| Third party products volume | — | — | — | — | — | |||||
| Licensed beer volume | 0.6 | 0.7 | ||||||||
| Group beer volume | 11.9 | 10.9 | ||||||||
| Americas | ||||||||||
| Total consolidated volume | 24.4 | — | 0.4 | 24.8 | 1.6 % | |||||
| Beer volume | 22.5 | -0.1 | 1.5 | 23.9 | | |||||
| Non-beer volume | 1.9 | 0.1 | -1.1 | 0.8 | - | |||||
| Third party products volume | — | — | — | — | — | |||||
| Licensed beer volume | 0.8 | 1.0 | ||||||||
| Group beer volume | 26.7 | 27.4 | ||||||||
| Asia Pacific | ||||||||||
| Total consolidated volume | 7.8 | 3.1 | -0.7 | 10.2 | - | |||||
| Beer volume | 7.6 | 3.0 | -0.7 | 10.0 | - | |||||
| Non-beer volume | 0.2 | 0.1 | 0.0 | 0.2 | - | |||||
| Third party products volume | — | — | — | — | — | |||||
| Licensed beer volume | 0.8 | 0.9 | ||||||||
| Group beer volume | 15.2 | 16.5 | ||||||||
| Europe | ||||||||||
| Total consolidated volume | 17.6 | — | 3.0 | 20.6 | | |||||
| Beer volume | 14.8 | — | 2.2 | 17.1 | 15.0 % | |||||
| Non-beer volume | 1.9 | — | 0.2 | 2.1 | | |||||
| Third party products volume | 0.8 | — | 0.6 | 1.4 | | |||||
| Licensed beer volume | 0.1 | 0.2 | ||||||||
| Group beer volume | 15.4 | 17.8 | ||||||||
| Heineken N.V. | ||||||||||
| Total consolidated volume | 62.5 | 3.0 | 3.2 | 68.7 | | |||||
| Beer volume | 56.2 | 1.4 | 3.5 | 61.1 | | |||||
| Non-beer volume | 5.4 | 1.5 | -0.9 | 6.0 | - | |||||
| Third party products volume | 0.9 | — | 0.7 | 1.5 | | |||||
| Licensed beer volume | 2.4 | 2.8 | ||||||||
| Group beer volume | 69.3 | 72.5 |
Note: due to rounding, this table will not always cast
1 2021 volume reflects the shift of malt-based, unfermented, non-alcoholic drinks from Beer to Non-Beer Volume. Organic growth has been corrected.
| Supervisory Board Composition | |||
Mr. J.M. Huët (Chairman), Mr. J.A. Fernández Carbajal (Vice-Chairman), Mr. J.G. Astaburuaga Sanjiinés and Mrs. M.H. Helmes will have completed their four-year appointment terms per the end of the AGM on 21 April 2022.
A non-binding nomination for the reappointment of Mr. Huët for a period of two years shall be submitted to the AGM for approval. This is in line with the Dutch Corporate Governance Code, that provides that after two four years appointments a Supervisory Board member may subsequently be reappointed again for a period of two years (which reappointment may be extended by at most two years). Mr. Huët has been a member of the Supervisory Board for eight years (two four year appointments). Subject to his re-appointment he will continue to be the Chairman of the Supervisory Board.
A non-binding nomination for the reappointment of Mr. Fernández Carbajal for a period of four years shall also be submitted to the AGM. Mr. Fernández Carbajal is a representative of FEMSA (that (in)directly holds a
Furthermore, a non-binding nomination for the reappointment of Mrs. Helmes for a period of four years shall be submitted to the AGM for approval. This will be the second four year term of Mrs. Helmes.
Mr. J.G. Astaburuaga Sanjiinés will reach his maximum tenure upon conclusion of the 2022 AGM. Mr. Astaburuaga Sanjiinés’ meaningful contributions to the Supervisory Board and the Audit Committee over the past twelve years as well as his knowledge of the industry have been very valuable to the Company. Under the aforementioned Corporate Governance Agreement, FEMSA is entitled to nominate a second representative in the Supervisory Board. A non-binding nomination for the appointment of Mr. Camacho Beltrán for a period of four years shall be submitted to the AGM. Mr. Camacho Beltrán joined FEMSA in 2020 as Chief Corporate Officer after a long track record in senior management positions in consumer goods companies around the world, including Procter & Gamble, Revlon and Danone.
Subject to the approval of the proposed appointment and reappointments by the AGM on 21 April 2022, the composition of the Supervisory Board of Heineken N.V. will be as follows as per the conclusion of the 2022 AGM:
- Jean-Marc Huët (Chairman)
- José Antonio Fernández Carbajal (Vice-Chairman)
- Maarten Das (Delegated Member)
- Michel de Carvalho
- Pamela Mars Wright
- Marion Helmes
- Rosemary Ripley
- Ingrid-Helen Arnold
- Nitin Paranjpe
- Francisco Josue Camacho Beltrán
| Enquiries |
| Media | Investors | |
| Sarah Backhouse | José Federico Castillo Martinez | |
| Director of Global Communication | Investor Relations Director | |
| Michael Fuchs | Robin Achten / Anna Nawrocka | |
| Corporate & Financial Communications Manager | Investor Relations Senior Analysts | |
| E-mail: pressoffice@heineken.com | E-mail: investors@heineken.com | |
| Tel: +31-20-5239355 | Tel: +31-20-5239590 |
| Investor Calendar Heineken N.V. |
| Combined financial and sustainability annual report publication | 25 February 2022 |
| Trading Update for Q1 2022 | 20 April 2022 |
| Annual General Meeting of Shareholders | 21 April 2022 |
| Quotation ex-final dividend 2021 | 25 April 2022 |
| Final dividend 2021payable | 3 May 2022 |
| Half Year 2022 Results | 01 August 2022 |
| Quotation ex-interim dividend 2022 | 03 August 2022 |
| Interim dividend payable | 11 August 2022 |
| Trading Update for Q3 2022 | 26 October 2022 |
| Conference Call Details | |||
HEINEKEN will host an analyst and investor video webcast about its 2021 FY results combined with an update on the on-going strategic review at 14:00 CET/ 13:00 GMT/ 08.00 EST. The live video webcast will be accessible via the company’s website: https://www.theheinekencompany.com/investors/results-reports-webcasts-and-presentations.
An audio replay service will also be made available after the webcast at the above web address. Analysts and investors can dial-in using the following telephone numbers:
| United Kingdom (Local): 020 3936 2999 |
| Netherlands: 085 888 7233 |
| USA: 1 646 664 1960 |
| All other locations: +44 20 3936 2999 |
| Participation password for all countries: 589454 |
Editorial information:
HEINEKEN is the world's most international brewer. It is the leading developer and marketer of premium and non-alcoholic beer and cider brands. Led by the Heineken® brand, the Group has a portfolio of more than 300 international, regional, local and specialty beers and ciders. We are committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through "Brew a Better World", sustainability is embedded in the business. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets.
We employ over 82,000 employees and operate breweries, malteries, cider plants and other production facilities in more than 70 countries. Heineken N.V. and Heineken Holding N.V. shares trade on the Euronext in Amsterdam. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIA NA and HEIO NA and on Reuters under HEIN.AS and HEIO.AS. HEINEKEN has two sponsored level 1 American Depositary Receipt (ADR) programmes: Heineken N.V.
(OTCQX: HEINY) and Heineken Holding N.V. (OTCQX: HKHHY). Most recent information is available on HEINEKEN's website: www.theHEINEKENcompany.com and follow us on Twitter via @HEINEKENCorp.
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Disclaimer:
This press release contains forward-looking statements with regard to the financial position and results of HEINEKEN’s activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s ability to control or estimate precisely, such as future market and economic conditions, developments in the ongoing COVID-19 pandemic and related government measures, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, prices of commodities and other goods and services, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, change in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN’s publicly filed annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which speak only of the date of this press release. HEINEKEN does not undertake any obligation to update these forward-looking statements contained in this press release. Market share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination with management estimates.
Attachment
FAQ
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