Chief Executive's Statement
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Report of the Executive Board
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Left Jean-Franqois van Boxmeer
Chairman of the Executive Board/CEO
Right René Hooft Graafland
Member of the Executive Board/CFO
2014 has been an excellent year. We have continued to bring
enjoyment to consumers around the world while driving top and
bottom line growth. Group revenue grew 3.3 per cent organically,
with group revenue per hectolitre up 1.4 percent. Group operating
profit (beia) grew 7.8 per cent organically.
Our strong performance reflects the success of our strategy.
We continued to invest in our portfolio of brands and we have
significantly improved commercial execution. We combined this with
compelling consumer marketing and a powerful innovation agenda
that contributed €1.5 billion to our revenues. As a result, Heineken®
premium volume grew 5.1 per cent and a number of our global brands
saw double digit growth. At the same time we have continued to
focus on driving cost out of the business.
Celebrating 150 years
Throughout the year we have taken time to celebrate the journey
that was started 150 years ago by Gerard Adriaan Heineken. It is
clear that the values he established when the Company was just one
brewery in Amsterdam continue to burn strongly today, across 178
countries and in the hearts and minds of our 81,000 employees. It
is the continued passion for guality, for brands that people love, for
the enjoyment of life, all underpinned by respect for people and the
planet which gives me confidence that the best years for HEINEKEN
remain ahead of us.
Benefits of a balanced geographic footprint
The steps that we have taken to transform our geographic footprint
over the last 10 years are now being consistently reflected in our
results. In 2014 emerging markets in the Africa Middle East, Americas
and Asia Pacific regions contributed 50 per cent of revenue and 51 per
cent of profit. In Western Europe the focus on innovation and higher
brand investment led to market share gains across virtually every market.
Market conditions in Central Eastern Europe continued to be
challenging but our focus on value over volume and the premium
segment should enable us to deliver a stronger performance over time.
In every region we are putting greater emphasis on strengthened
sales execution, sampling activities to support new product launches,
higher marketing investment and improving the effectiveness of
promotional programmes. At the same time we are finding new ways
to leverage our scale to drive cost out of the business and to improve
the efficiency of our supply chain.
The power of innovation
This year our innovation rate reached 7.7 per cent. This is an excellent
performance and is helping drive new interest in the beer and cider
categories. We are meeting consumer needs across the world with
great tasting no and low alcohol beers such as 0.0% MAXX and
Radler 0.0%. New delivery systems are improving the guality of the
beer we enjoy both in the bar and at home as well. Great ideas can
come from anywhere. That is why we have created open sourcing
projects like the Innovators Brewhouse to keep a steady pipeline of
new thinking coming into the Company.
Broad premium portfolio, led by Heineken®
The Company continued to strengthen its leadership position in the
premium segment. The Heineken® brand had an excellent year driven
by strong global campaigns, brought to life in the markets. The 'Man
of the World' platform continues to inspire ideas that capture the
imagination of consumers. A good example of this is 'The City'
campaign. More than 1 billion bottles, localised with the names of
more than 50 cities, were created. This is helping to fuel the growth
of Heineken® in the world's leading cities, from New York to Lagos
and from Mexico City to Shanghai.
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Heineken N.V. Annual Report 2014