We have set clear ambitions and goals towards
2020 in each of these areas. We believe it is the
right thing for us to do and consistent with our
long-held values. Sustainability will also be a
source of fresh and innovative thinking and will
help stimulate the creation of new products and
services that will ultimately generate new markets
and revenue streams.
I am fully aware that it takes an enormous amount
of work, energy, tenacity and sacrifice in order to
deliver performance and change on this sort of
scale. As with every year, I want to thank the tens
of thousands of Heineken colleagues around the
world and all our stakeholders for their
contribution to our continued success.
Jean-Frangois van Boxmeer
Chairman of the Executive Board/CEO
Amsterdam, 15 February 2011
Heineken expects volume development in Latin America, Africa
and Asia to benefit from ongoing robust economic conditions
and marketing and investment programmes. Although the
Company expects an improving economic environment in
Europe and the USA in 2011, the impact of austerity measures
and high unemployment is expected to result in continued
cautious consumer behaviour in these markets. The international
premium segment will continue outgrowing the overall beer
market, benefiting the Heineken® brand and supporting
improved sales mix. Heineken forecasts a low single-digit
increase in input costs and plans to mitigate this impact
through increased pricing.
In Europe, Heineken will shift its prime focus towards volume
and value share growth, with increased investments in
marketing and innovation in Heineken® and other key brands,
further supported by the international roll-out of higher-margin
brands. Whilst this is expected to affect profit development
in Europe in the near term, it underlines our commitment to
strengthening our leadership position in the region. In addition,
continued efforts will be made to improve the performance
of companies acquired over the past few years. In the new
markets of Mexico and Brazil, improved marketing effectiveness
and the realisation of cost synergies will contribute to
The TCM programme will deliver further cost savings, although
at a lower level than in 2010 following the earlier than planned
realisation of savings in 2010. As a result of ongoing efficiency
improvements, Heineken expects a further organic decline
in the number of employees.
For 2011, capital expenditure related to property, plant and
equipment is forecast to be approximately EUR850 million.
Heineken does not expect material changes to the effective
tax rate (beia) in 2011 (2010: 27.3 per cent) and forecasts
an average interest rate slightly above 5.5 per cent.
Free operating cash flow generation is expected to remain
strong, further reducing the level of net debt in 2011.
Following two consecutive years of substantially reduced capital
expenditure and significantly higher cash flow generation, the
cash conversion rate for 2011 will be around 100 per cent.