Heineken N.V. reports 2022 full year results
Heineken N.V. reported a remarkable revenue growth of 30.4% in 2022, with net revenue (beia) increasing by 21.2% organically. Operating profit (beia) surged 24% to €4,502 million, despite a 4.5% decline in overall operating profit. Key drivers included a 6.9% organic growth in beer volume and strong performance from premium brands like Heineken®, which saw a 12.5% increase in volume. The company achieved gross savings of €1.7 billion, targeting €2 billion by 2023. Heineken anticipates continued organic growth in operating profit, projecting a mid- to high-single-digit increase for 2023 amidst a challenging global economic outlook.
- Revenue growth of 30.4% for 2022.
- Net revenue (beia) increased by 21.2% organically.
- Operating profit (beia) rose 24% to €4,502 million.
- 6.9% organic growth in beer volume, led by premium beers like Heineken®.
- Overall operating profit declined by 4.5%.
- Net profit fell by 19.3%, affecting diluted EPS to €4.65.
Amsterdam, 15 February 2023 – Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) announces:
| Key Highlights |
- Revenue growth
30.4% - Net revenue (beia)
21.2% organic growth; per hectolitre13.9% - Beer volume
6.9% organic growth; premium beer volume11.4% ; Heineken® volume12.5% - Gross savings at
€1.7 billion , on-track to deliver ahead of€2 billion by 2023 - Operating profit
€4,283 million ; operating profit (beia)24.0% organic growth - Operating profit (beia) margin
15.7% - Net profit
€2,682 million ; net profit (beia)30.7% organic growth - Diluted EPS (beia)
€4.92 (2021:€3.54) - Full year 2023 outlook unchanged, operating profit (beia) expected to grow organically mid- to high-single-digit
| CEO Statement |
Dolf van den Brink, Chairman of the Executive Board / CEO, commented:
"I am pleased that we delivered a strong set of results in 2022 in a continuously challenging and volatile environment, growing ahead of the beer category in the majority of our markets.
Our premium portfolio continued to outperform, led by the excellent momentum of the Heineken® brand and further propelled by the roll-out of Heineken® Silver. We are innovating to expand our leadership positions in non-alcoholic and in beyond beer. We are accelerating the deployment of our business-to-business digital platforms and continued the decarbonisation of our breweries. The progress on these and many other initiatives make us confident that our EverGreen strategy is on course to deliver long-term, sustainable value creation.
We delivered balanced growth as we priced responsibly, made a further step in our productivity programme and continued to invest in our brands and capabilities. Compared to 2019, volume has now fully recovered, net revenue (beia) is ahead by close to
For the coming year, the global economic outlook will remain challenging. We will continue to invest, whilst staying disciplined on pricing and costs. Our outlook, as shared on 30 November 2022, remains unchanged."
| Financial Summary1 |
| IFRS Measures | € million | Total growth | BEIA Measures | € million | Organic growth2 | |
| Revenue | 34,676 | 30.4 % | Revenue (beia) | 34,643 | 19.1 % | |
| Net revenue | 28,719 | 30.9 % | Net revenue (beia) | 28,694 | 21.2 % | |
| Operating profit | 4,283 | - | Operating profit (beia) | 4,502 | 24.0 % | |
| Operating profit (beia) margin (%) | 15.7 % | |||||
| Net profit | 2,682 | - | Net profit (beia) | 2,836 | 30.7 % | |
| Diluted EPS (in €) | 4.65 | - | Diluted EPS (beia) (in €) | 4.92 | 38.9 % | |
| Free operating cash flow | 2,409 | |||||
| Net debt / EBITDA (beia)3 | 2.1x |
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 2022, we accelerated the deployment of our EverGreen strategy, designed to future-proof the company and deliver superior, balanced growth in a fast-changing world. Our dream is to shape the future of beer and beyond to win the hearts of consumers. We are also shaping the future with our ambition to become the best digitally connected brewer, raising the bar on sustainability and responsibility and evolving our culture, operating model and capabilities. At the same time, we are stepping up on productivity to fund the investments required and improve profitability and capital efficiency.
SHAPE THE FUTURE OF BEER AND BEYOND
Superior and balanced growth
Our superior and balanced growth ambition is grounded in our advantaged geographic footprint, our ability to scale strong premium beer brands, including non-alcoholic variants, and in developing winning beverage propositions in fast-growing segments.
Revenue for the full year 2022 was
Beer volume grew
| Beer volume | 4Q22 | Organic growth | FY22 | Organic growth | ||||||||
| (in mhl) | 4Q21 | FY21 | ||||||||||
| Heineken N.V. | 63.3 | 61.1 | 3.5 % | 256.9 | 231.2 | 6.9 % | ||||||
| Africa, Middle East & Eastern Europe | 9.8 | 10.1 | -3.3 % | 39.2 | 38.9 | 1.5 % | ||||||
| Americas | 23.8 | 23.9 | -0.5 % | 88.5 | 85.4 | 3.7 % | ||||||
| Asia Pacific | 12.2 | 10.0 | 22.9 % | 48.0 | 29.4 | 29.3 % | ||||||
| Europe | 17.5 | 17.1 | 1.9 % | 81.2 | 77.5 | 4.6 % |
In the fourth quarter, net revenue (beia) grew organically by
Driving premiumisation at scale, led by Heineken®
Premium beer volume grew
This growth is led by Heineken®, up
| Heineken® volume | 4Q22 | Organic growth | FY22 | Organic growth | ||||
| (in mhl) | ||||||||
| Total | 14.8 | 11.2 % | 54.9 | 12.5 % | ||||
| Africa Middle East & Eastern Europe | 1.7 | -9.5 % | 6.4 | -2.7 % | ||||
| Americas | 6.4 | 6.9 % | 22.2 | 13.5 % | ||||
| Asia Pacific | 2.9 | 51.3 % | 9.5 | 33.4 % | ||||
| Europe | 3.7 | 7.8 % | 16.8 | 8.0 % |
Heineken® connects with millions of consumers every year with world-class campaigns and sponsorships to share our brand DNA in a meaningful way to spark growth, and to contribute to our sustainability goals and responsibility initiatives. In 2022, we launched the ‘Cheers to All Fans’ campaign, tackling gender bias affecting football's players and fans. 2022 was Heineken®’s first year as a leading sponsor of the UEFA Women’s EUROs, with the objective to become the most inclusive sponsor of the tournament.
We continued to successfully premiumise at scale via our international brands portfolio, complementing Heineken® by connecting with an even more diverse range of consumer needs. Amstel grew volume in the mid-twenties, with more than 15 markets growing double-digits, with a particularly strong performance in Brazil and continued momentum behind Amstel Ultra. Birra Moretti grew in the mid-teens versus last year, sharing the true taste of Italy across Europe, with outstanding growth in the Netherlands, Serbia, Romania, Switzerland and Ireland. In the UK, Birra Moretti more than doubled its volume versus 2019 and became the market leader of the premium segment by value. 2022 was the year of the Tiger; our brand roared back to volume growth of more than
Pioneer choice in low & no-alcohol
We believe in empowering consumers seeking to enjoy a lower or no-alcohol-content beverage by ensuring there is always a choice – everywhere and on any occasion. Meeting this consumer need, our Low & No-Alcohol (LONO) portfolio grew by low-single-digit as continued momentum in the majority of our markets was partially offset by declines in Egypt, Russia and Poland. Our non-alcoholic beer and cider portfolio grew by mid-single-digit, led by the growth of Heineken® 0.0 in the low-teens in Europe and the Americas regions.
We continued to introduce consumer-inspired innovations to enhance our non-alcoholic beer and cider portfolio. For example, in the United States, Lagunitas launched Hoppy Refresher, an adult beverage proposition of hop-infused sparkling water that can compete with carbonated soft drinks. In Nigeria, we launched ZAGG, a malt-based energy drink, entering a new category in Nigeria with potential to scale beyond within the Region. In Mexico, we are currently introducing Tecate 0.0, a non-alcoholic variant to our second largest brand globally by volume, aiming to counter the stigma that beer cannot be enjoyed during mid-day meal occasions.
Explore beyond beer
As we expand our view of consumer demand, we see opportunities beyond beer for flavoured, innovative, natural and moderate propositions leveraging our industrial and route to market base. We are leveraging our scale as the second largest player in this segment outside of the United States to explore further this consumer space. Our overall volume of flavoured beer and beyond beer alcoholic propositions grew by a mid-single-digit to 12.9 million hectolitres (2021: 12.3 million hectolitres).
Desperados is the leading "spirit beer" for high energy occasions with a presence in more than 80 countries. It continued its growth momentum in 2022, doubling its volume in Nigeria, with continued growth in Europe (particularly in Germany, the UK, Spain and France) and boosted by Desperados cocktail inspired line extensions and Virgin 0.0.
We expanded our global leadership position in Cider. Global volume grew by a low-single-digit to 5.0 million hectolitres (2021: 4.9 million), mainly driven by the strong growth of Strongbow in South Africa. We launched Strongbow Ultra, a low-calorie, low-carb and natural proposition to renovate the brand and the overall cider category with strong early results. In the UK, Strongbow Ultra Dark Fruit reached c.
In Mexico, we launched Sol Mangoyada, further strengthening our leadership position in beyond beer. In the United States, building on the success of Dos Equis Lime and Salt around rituals that consumers follow, we launched Dos Equis Classic Lime Margarita.
Our advantaged footprint
We continue to develop and expand our geographical and portfolio footprint to enhance our long-term, sustained growth advantage.
Between 18 and 24 January 2023 the Competition Tribunal of South Africa held the hearings related to the transaction with Distell Group Holdings Limited and Namibia Breweries Limited, and we are awaiting their final decision. We remain very excited with the opportunity to bring together strong businesses to create a regional beverage champion, and we are committed to being a strong partner for growth and to make a positive impact in the communities in which we operate. We continue to expect the transaction to close in the coming months.
We continue to make progress to transfer the ownership of our business in Russia whilst dealing with frequently changing regulations. We remain optimistic in our ability to reach an agreement in the coming months. Based on our current assessment, an impairment of
On 19 October 2022, we acquired
BECOME THE BEST-CONNECTED BREWER
HEINEKEN wants to become the best-connected, most relevant brewer for customers living in the digital age. To achieve this, we are digitally transforming our business and modernising our technology landscape at the same time.
Digitise our route-to-consumer
We continue to deploy our business-to-business digital (eB2B) platforms, supported by the eBusiness team, which is driving this capability globally. By the end of 2022, the platforms captured
The digitisation of customer relationships unlocks new growth with more and better services and data insights, increasing sales and productivity. For example, with AIDDA, an artificial intelligence application, we support our sales representatives to help our customers grow, making our sales organisation more effective and efficient.
We will start migrating our eB2B platforms under a single brand name and identity: eazle, business made easy. The transition will enable better features at scale resulting in improved customer experience with increased efficiency, helping them to grow their business.
FUND THE GROWTH, FUEL THE PROFIT
Our growth algorithm aims to deliver superior, balanced growth enabled by incremental investments behind the power of our brands, digital transformation, capabilities and sustainability objectives. We are bringing balance to our growth, investing behind the power of our brands which enables us to price responsibly. To fund the growth and offset inflationary pressures, we are structurally addressing our cost base and building a cost-conscious culture. We are embedding this into an ongoing continuum of productivity improvements to fuel profit growth ahead of revenue growth over time.
During 2022, we made significant progress in the delivery of our productivity programme, targeting
We are improving our performance on cost and embedding cost management in the capabilities of the organisation. Our teams are advancing thousands of initiatives across all our operating companies and the head office. We are also accelerating large-scale transformation programmes, such as the transition to a network model for our supply chain in Europe. These achievements gave us the confidence to declare our new ambition to deliver ongoing productivity gains of
We continued to invest in our business and in addition, we reversed the significant cost mitigation actions undertaken in 2021 to partially offset the financial impact of COVID-related restrictions. Last year, these represented a reduction of expenses (beia) of circa
Operating profit (beia) grew
Net profit (beia) grew
For more details, please refer to the Financial Review.
RAISE THE BAR ON SUSTAINABILITY AND RESPONSIBILITY
Brew a Better World is our 2030 strategy to drive progress towards a net zero, fairer and more balanced world. We are making good progress across all three pillars and are building executional momentum to deliver our ambitions.
Environmental: Path to net zero impact
Our ambition is to reach net zero carbon emissions across our value chain by 2040, with an intermediate 2030 goal to reach net zero in scope 1 and 2, reduce our emissions in scope 3 by
We continue to focus on healthy watersheds via water efficiency, water circularity and water balancing. Our 2030 ambition is to reduce water usage to 2.6 hectolitre per hectolitre (hl/hl) in water-stressed areas and 2.9 hl/hl worldwide. In 2022, we reached 3.0 hl/hl and 3.3 hl/hl (2021: 3.1 and 3.4), respectively. 26 of our 31 sites in water-stressed areas have begun watershed protection programmes and
When it comes to circularity, more than
Social: Path to an inclusive, fair and equitable world
We are making progress when it comes to gender diversity. Over the last 5 years, we increased the percentage of senior management positions held by women from
We also aim for equal pay for equal work between female and male colleagues and want to ensure that all employees worldwide earn at least a fair wage by 2023. By the end of 2022,
As part of our ambition to create a positive impact in our communities, we reached our annual target of having a social impact initiative in place in
1 A fair wage is often higher than the minimum wage and should be sufficient for a decent standard of living, covering the basic needs for the employee and their family: from food, housing and education to healthcare, transportation and some discretionary income and savings. Data on fair wages is obtained from the Fair Wage Network.
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 close to 110 markets and, by 2023, we aim for a zero-alcohol option to be available for at least two strategic brands in the majority of our operating companies, accounting for
We continue to use the power of our flagship brand to advance responsible consumption and make moderation cool. In 2022, our operating companies invested over
In addition to this,
Governance
In 2022, 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 introduced three ESG metrics in our long-term incentive plan for senior managers, representing
25% of total remuneration. This proposal was approved for the Executive Board at the 2022 AGM in April; - We further integrated sustainability & responsibility into our existing planning processes, including ring-fencing the required investments;
- We are enhancing our reporting capabilities to meet emerging requirements such as the Corporate Sustainability Reporting Directive (CSRD). We also completed our first TCFD analysis and the outcomes are included in the Annual Report.
UNLOCKING THE FULL POTENTIAL OF OUR PEOPLE AND ORGANISATION
Critical to the success of our multi-year EverGreen strategy is the evolution of our culture. Since the launch of EverGreen, we have been focused on this shift towards disciplined entrepreneurship with more agility, external focus, and clear accountability. Throughout the organisation, we have redesigned processes to facilitate horizontal learning and codified new behaviours that support EverGreen in our ambition to shape the future of beer and beyond.
Our Employee Engagement scores rank in the top quartile of the benchmark of high performing companies and we aspire to maintain this. In 2022, we scored even higher whilst our teams were dealing with uncertainty and change, a clear sign of the strength and commitment of our people.
| Outlook 2023 |
On 30 November 2022, ahead of our Capital Markets Event, we reconfirmed our guidance to our outlook statements. These expectations remain unchanged and are included here as a reminder with further details.
For 2023, we expect operating profit (beia) to grow organically mid- to high-single-digit, subject to any significant unforeseen macroeconomic and geopolitical developments. This outlook is based on continued progress on EverGreen, a challenging global economic environment and lower consumer confidence in certain markets.
We expect further progress towards building great brands, our digital route to consumer, strategic capabilities and our Brew a Better World activities with commensurate investments. We also expect stable to modestly growing volume, increasing in developing markets and declining in Europe. We will continue the discipline to price responsibly as per local market conditions, aiming to cover most of the absolute impact of inflation in our cost base. We anticipate an increase in our input costs in the high teens per hectolitre and significantly higher energy costs, particularly in Europe. We will deliver on our gross savings ahead of the
We also expect in 2023 an average effective interest rate (beia) of around
Finally, we expect investments in capital expenditure related to property, plant and equipment and intangible assets to amount to c.
| Total Dividend For 2022 |
The Heineken N.V. dividend policy is to pay a ratio of
| Translational Calculated Currency Impact |
The translational currency impact for 2022 was positive, amounting to
Applying spot rates as of 13 February 2023 to the 2022 financial results as a base, the calculated currency translational impact would be negative, approximately
| Supervisory Board Composition |
On 20 December 2022, HEINEKEN announced the nomination of Mrs. Beatriz Pardo and Mr. Lodewijk Hijmans van den Bergh for appointment as members of the Supervisory Board at the Annual General Meeting of Shareholders (AGM) on 20 April 2023 for a four-year term.
Mrs. Beatriz Pardo, a Spanish national, is Vice President General Manager of Starbucks Reserve in the United States at the Starbucks Coffee Company. She joined Starbucks in 2018 from Grupo Vips where she was Division CEO. Prior to this, Mrs. Pardo held executive positions in Carrefour, Canelafoods and Monitor Deloitte. During her international career, she built up extensive experience in brand strategy, retail concept innovation and operations. She graduated in Economics and Business Administration from the Universidad Pontificia de Comillas of Madrid.
Mr. Lodewijk Hijmans van den Bergh, a Dutch national, currently serves as chairman of the Supervisory Board of BE Semiconductor Industries (until its AGM in April 2023). He is also a member of the Supervisory Board of ING and vice-chairman of the Supervisory Board of HAL Holding. He is a lawyer and was partner at the law firm De Brauw Blackstone Westbroek. He was also Chief Corporate Governance Counsel and member of the Executive Board of Royal Ahold. He has vast expertise in corporate governance, corporate law and sustainability. He holds a master’s degree in law from Utrecht University.
Furthermore, non-binding nominations for the reappointment of Mr. Michel de Carvalho and Mrs. Rosemary Ripley for a period of four years shall be submitted to the AGM on 20 April 2023 for approval. Mrs. Ingrid–Helen Arnold’s term at the Supervisory Board will end at the AGM. The Supervisory Board is grateful for Mrs. Arnold’s commitment and contributions to the Supervisory Board and its Audit Committee over the past years.
| Enquiries |
| Media | Investors | |
| Sarah Backhouse | José Federico Castillo Martinez | |
| Director of Global Communication | Investor Relations Director | |
| Michael Fuchs | Mark Matthews / Chris Steyn | |
| Corporate & Financial Communications Manager | Investor Relations Manager / Senior Analyst | |
| 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 | 23 February 2023 |
| Trading Update for Q1 2023 | 19 April 2023 |
| Annual General Meeting of Shareholders | 20 April 2023 |
| Quotation ex-final dividend 2022 | 24 April 2023 |
| Final dividend 2022 payable | 2 May 2023 |
| Half Year 2023 Results | 31 July 2023 |
| Quotation ex-interim dividend 2023 | 2 August 2023 |
| Interim dividend payable | 10 August 2023 |
| Trading Update for Q3 2023 | 25 October 2023 |
| Conference Call Details |
HEINEKEN will host an analyst and investor video webcast about its 2022 FY results 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. With HEINEKEN’s over 85,000 employees, we brew the joy of true togetherness to inspire a better world. Our dream is to shape the future of beer and beyond to win the hearts of consumers. 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 operate breweries, malteries, cider plants and other production facilities in more than 70 countries. Most recent information is available on our Company's website and follow us on LinkedIn, Twitter and Instagram.
Market Abuse Regulation
This press release may contain price-sensitive information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Disclaimer:
This press release contains forward-looking statements based on current expectations and assumptions with regard to the financial position and results of HEINEKEN’s activities, anticipated developments and other factors. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements also include, but are not limited to, statements and information in HEINEKEN’s non-financial reporting, such as HEINEKEN’s emissions reduction and other climate change related matters (including actions, potential impacts and risks associated therewith). These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “milestones”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. These forward-looking statements, while based on management's current expectations and assumptions, are not guarantees of future performance since they are subject to numerous assumptions, known and unknown risks and uncertainties, which may change over time, that could cause actual results to differ materially from those expressed or implied 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 but not limited to future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials and other goods and services, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, environmental and physical risks, 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 assumes no duty to and 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
What were Heineken's revenue growth figures for 2022 with stock symbol HEINY?
What is the forecast for Heineken's operating profit in 2023?
How much did Heineken save in gross savings for 2022?
What was Heineken's net profit in 2022?
How did Heineken's beer volume perform in 2022?
