tiï O Q, Chief Executive's Statement Introductio^^^^^^^^^^H Report of the Executive Board^^^^^l Report of the Supervisory Board In 2018, we delivered another year of strong top line growth. The Heineken® brand grew 7.7%, its best performance in a decade. Our new brand extension, Heineken® 0.0 has been very well received and is now available in 38 markets worldwide. The rest of our premium portfolio also grew double digit, led by our international beer brands such as Tiger, Desperados, Birra Moretti and Krusovice, craft and variety beers, and ciders. In the UK and South Africa, Strongbow flavour variants drove our cider sales growth. We also strongly developed outside traditional markets. In Vietnam, we are establishing the cider category with Strongbow while in Spain our recently introduced Ladrón de Manzanas is off to a promising start. Craft and variety beers like the low alcohol variant of Affligem and Birra Moretti Regionale performed very strongly. Meanwhile, Lagunitas outperformed the craft segment in the US and continued its international expansion. Originally brewed in Petaluma and Chicago, Lagunitas is now also brewed in the Netherlands in our craft brewery in Wijlre. In addition to Heineken® 0.0, we introduced innovations in our low- and no-alcohol portfolio which reached 13.1 million hectolitres. In Ethiopia we introduced Sofi Buna, a dark malt drink with local coffee, while worldwide, our Radler portfolio continued to expand. All regions contributed to our strong performance. Brazil deserves a special mention for strong growth following the integration of our two businesses. An important milestone for the year was the announcement of our strategic partnership with CRE in China, the largest beer market in the world, where Heineken® has strong brand equity and where CRE is market leader by volume. The first time consolidation of our Brazil business, rising input costs and adverse currency developments slightly impacted our operating profit margin. We have progressed with our Brewing a Better World commitments. Already at the end of 2017 we surpassed our 2020 carbon emissions targets. In 2018 emissions further reduced to 5.5 kg CO2 equivalent per hectolitre, which represents a 47% decrease since 2008. In February 2018, we announced our new Drop the C programme. Our ambition is that 70% of all our electric and thermal energy needs in production will be covered by renewable sources by 2030. During the year, we embarked on the first 13 renewable projects of this programme. Today, 15% of our electric and thermal energy sources are renewable. Heineken N.V. Annual Report 2018Ï 0 Financial Statements Sustainability Review Other Information Because we have also already reached our 2020 water commitments, later this year we will announce Every Drop, our 2030 water vision. Our average water consumption at the end of 2018 was 3.5 hectolitres of water per hectolitre of beer, a reduction of 32% compared to 2008 and 3.2 hectolitres of water per hectolitre of beer for water-stressed areas. At the end of 2018, 96% of our eff uents were treated worldwide. In 2018, our 'When You Drive, Never Drink' campaigns continued to receive significant exposure through the Formula 1™ partnership. In 69 markets around the world, we dedicated at least 10% of Heineken® media spend to Responsible Drinking campaigns. We regularly review our codes and policies and in 2018 we refreshed the Code of Business Conduct, including our Human Rights Policy and Responsible Marketing Code. The Code and underlying policies were rolled-out in all operating companies and in 38 languages. Since 2016, we have worked with human rights experts Shift to identify and address human rights-related risks in our operations in line with UN Guiding Principles on Business and Human Rights. In 2018, we also renewed our Brand Promoters Policy. We implemented this policy between June and December, incorporating the feedback and recommendations made by brand promoters, NGOs and three independent assessors. Looking ahead to 2019, we will continue to strive for superior top-line growth driven by volume growth, price increases and premiumisation. We expect volatility in economic conditions will continue and plan to partially mitigate input and logistics cost increases through productivity measures and prudent spend. Consequently, excluding any major unforeseen macro-economic and political developments, we now expect operating profit (beia) to grow by mid-single digit on an organic basis. Our strategic priority is biased towards growth. This can only be achieved through continued focus on innovation, operational excellence and social and environmental sustainability, so consumers can enjoy our brands, our customers' expectations are exceeded and we continue to enjoy the trust of the communities in which we operate. Already in full speed in 2019, I want to express my gratitude to my colleagues, customers and suppliers for a great 2018. Jean-Francois van Boxmeer Chairman of the Executive Board and CEO Amsterdam, 12 February 2019

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2018 | | pagina 4