Chief Executive’s Q&A
4
What is the outlook for HEINEKEN?
How did HEINEKEN create value
through its strategic initiatives in 2023?
How is HEINEKEN leveraging digital
technologies and innovation to
enhance its operations in 2023?
How is HEINEKEN progressing towards
its Brew a Better World 2030 strategy
and meeting its sustainability goals?
What initiatives has HEINEKEN
implemented to promote diversity,
equity, and inclusion within the
company and its workforce in 2023?
L->
I 1’
Introduction
Wishing you all the joy of true togetherness in 2024!
Sustainability
Review
Other
Information
Financial
Statements
Report
of the
Supervisory
Board
Report
of the
Executive
Board
We measure progress on long-term value creation
through our Green Diamond model. Its four quadrants
- growth, capital efficiency, sustainability and
responsibility, and profitability - guide us as we work
towards our long-term ambitions. Our aim is to strike
a balance between short-term delivery and long-term
sustainability, between top-line growth and bottom
line value creation. Ultimately, we aim for long-term
value creation.
For instance, this year we announced the investment
in Mexico of €430 million to build a state-of-the-art
brewery in the Yucatan, with focus on sustainable
brewing practices and job creation, benefiting local
communities with an eye on long-term value.
HEINEKEN Mexico expects to create over 2,000 new
direct and indirect job opportunities. We also further
evolved our portfolio footprint with the acquisition
of Distell and Namibia Breweries to form Heineken
Beverages, a new beverages champion for
Southern Africa.
HEINEKEN has been proactively investing in digital
technologies and innovations to enhance our
operations in 2023. Data-driven insights and AI
applications have been strategically deployed
across the organisation. These technologies have
significantly improved sales recommendations and
enhanced brewery efficiency, contributing to a more
streamlined and efficient experience for both our
teams and customers.
Strong pricing to offset very high input and energy
cost inflation and volatile macro-economic conditions
in some key markets affected our volume
momentum.. Notwithstanding these difficult
conditions, we continued investing in our brands and
capabilities. We gained or held volume market share in
over half of our markets as volume performance
moderately improved quarter by quarter. We recorded
operating profit (beia) organic growth in 3 out of 4
regions while we adapted to the challenges in Asia
Pacific.
We have significantly stepped up our capabilities in
eCommerce and data and analytics, capturing and
organising our data in a more effective way that
enables us to hone insights and unlock more value to
the benefit of both our customers and HEINEKEN’s
sales organisation. We continue to expand our
business-to-business digital (eB2B) platforms. By the
end of the year the platforms had captured close to
€11 billion in gross merchandise value, connecting
with 700,000 active customers in fragmented,
traditional channels. We progressed with the
migration of our eB2B platforms under a single brand
name and identity: eazle, business made easy. As we
develop towards meaningful scale in our key markets,
we aim to unlock better features, improved customer
experience and increased efficiency.
We reduced scope 1 and 2 emissions by 34%
compared to the 2018 baseline. We are also driving
progress on scope 3 by engaging strategic suppliers
and using our scale to support their transition to
renewable energy. 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. We have
improved our global average water usage from 3.3 hl/
hl to 3.2 hl/hl compared to last year. In addition, 28 of
our 32 sites in water-stressed areas have now started
water balancing projects and 28% of these sites are
fully water balanced. We have grown from 19%
women in our senior leadership in 2017 to 28% in
2023 (2022: 27%). Finally, 100% of our markets had a
partnership in place to address the harmful effects of
alcohol in 2023.
For example, AIDDA, our AI application to advise
sales, is now deployed in five markets where it can
generate product recommendations, predict customer
churn, identify price discrepancies, and suggest
optimal sales routes among other features.
We are now three years into developing and executing
our Brew a Better World 2030 strategy. We are
learning as we implement at scale, understanding the
enablers and challenges that need to be addressed
and developing the right capabilities to deliver.
Diversity, equity and inclusion is a key priority at
HEINEKEN. Through unlocking the full potential
of our people and organisation, we’re on a journey
to create a workplace and culture that attracts,
develops and retains talent. In 2023 our focus
remained on three core pillars: fostering courageous
leadership, promoting an inclusive culture and
creating equal opportunities.
We have set ourselves an ambition of reaching
40% of women in senior manager positions by
2030 and we are making strong progress. As of this
year, 99.8% of our people managers globally have
been trained on inclusive leadership. Also this year,
we established a new Women in Supply Chain
network, joining the likes of our Women Interactive
Network and Women in Sales, global initiatives to
level the playing field for women in leadership at
HEINEKEN. Our multiple employee resource groups,
including HOP (Heineken Open and Proud) Women
and Allies, continued to thrive across functions and
operating companies
We will continue to leverage our brands to promote
industry-leading messaging on responsible
consumption and moderation. In 2023, HEINEKEN’s
net zero and FLAG (Forest, Land and Agriculture)
targets were approved by the Science Based Targets
initiative (SBTi).
Overall, we expect to grow operating profit (beia)
organically in the range of a low- to high-single-digit.
The wide range corresponds to the volatility in geo
political and economic conditions we have also
witnessed in the past months and the fact that we
will continue to invest behind EverGreen for long-term
sustained value creation.
As we continue to advance on our EverGreen journey,
we remain committed to our medium-term ambition
to deliver superior growth, balanced between volume
and value, and to drive continuous productivity
improvements to fund investments behind EverGreen
and enable operating profit (beia) to grow ahead of
net revenue (beia) over time.
Our volume performance at the closing of 2023 was
under pressure from external factors, with a moderate
sequential improvement quarter by quarter. For 2024,
we expect the macroeconomic environment and
geopolitical developments to remain a factor of
uncertainty that may impact our business. In this
context, our focus going forward will be on restoring
our volume growth by continuing to invest behind our
brands, innovations, commercial capabilities and
route-to-consumer.
Heineken
N.V.
Annual
Report
2023
