Chief Executive's Statement (continued)
A stronger, more competitive global business
Future sustainable growth
Report of the Executive Board
All our actions in 2009 were carried out with the intention
of creating a stronger more competitive global business. As a
result of our decisions and actions, and without jeopardising
our financial stability, we have:
Extended our position as the most international brewer
Cemented our position as the world's second largest
brewer by revenue (EUR 14.7 billion) and considerably
strengthened our volume position (125.2 million hectolitres)
Increased our exposure to, and benefit from, growth in
developing markets. Following approval of all transactions,
40 per cent of our EBIT will be generated from developing
markets and 60 per cent from established profitable
Achieved positions in three of the four largest beer
Strengthened our leading international portfolio with the
addition of the Kingfisher brand; our portfolio will be
further strengthened by the addition of the Dos Equis,
Tecate and Sol brands (which we are already distributing
in the United States) following the completion of the
acquisition of FEMSA Cerveza.
In 2010 and beyond, we will focus systematically on growing
our brands and our value share in critical markets. We will
do this everywhere, but we will particularly look to do so in
Europe where we have significant market leadership despite
the intense competition. It will not be easy given the
economic, market, consumer and regulatory dynamics
across many markets. We will though aim to leverage our
leadership position and develop specific action plans to grow
and strengthen our business and the category. We must also
accelerate our investment in consumer-focused innovation,
especially on the Heineken brand.
It will be the responsibility of all in the business to ensure that
our future growth is achieved sustainably, with integrity and
responsibly. We will seek to maintain our industry-leading
position in the SAM Dow Jones Sustainability Index and we will
announce new targets and programmes. In our Sustainability
Report, we set out our renewed sustainability agenda, which
will re-enforce and embed our long-standing commitment to
sustainable growth and responsible consumption.
The business agenda we are setting ourselves for the future is
hard. It would, though, be impossible to meet our considerable
ambition without the dedication and hard work of our people.
As always, I would like to thank them for their considerable
contribution to our continued success and to thank all of our
stakeholders for their support through the year.
Jean-Frangois van Boxmeer
Chairman of the Executive Board/CEO
Amsterdam, 22 February 2010
This outlook for 2010 provides further information on
general developments in the international beer industry,
their effects on Heineken's position, its profit forecast and
The global economic environment will continue to lead to
lower beer consumption and down-trading in a number of
regions in 2010.
Heineken is committed to utilising its global marketing
excellence to build its key brands, including Heineken, across
all markets and to maintaining, or where possible improving,
its price positioning. Price increases will be at levels well
below those of 2009. However, Heineken aims to continue
passing on excise duty increases through higher sales prices.
The Company will aim to improve both market and value
share in its markets via increased brand investments.
Heineken will aggressively pursue its TCM cost reduction
programme in all business areas and will continue to focus
on improving the profitability of its newly acquired companies.
The likely fall in raw material costs per hectolitre due to a
temporary decline in the price of brewing barley will be
offset by higher energy costs, rising advertising rates and
increased marketing costs.
Heineken reiterates its target of reducing its Net debt/EBITDA
(beia) ratio to below 2.5 times. Heineken is confident that it
will achieve its target of a cash conversion rate in excess of
100 per cent in the remaining two years of the Hunt for
Cash 2 programme.
Capital expenditures related to property, plants and
equipment will be broadly in line with 2009 at EUR700 million,
and will be financed from cash flow. Heineken expects a
further organic decline in the number of employees.
Excluding FEMSA Cerveza, Heineken expects an average
interest rate of approximately 6 per cent and an effective
tax rate in the range of 25-27 per cent.
Annual Report 2009 - Heineken N.V.
Annual Report 2009 - Heineken N.V. 9