Heineken Holding N.V. reports 2023 full year results

Amsterdam, 14 February 2024 – Heineken Holding N.V. (EURONEXT: HEIO; OTCQX: HKHHY) announces:

		Key Highlights

The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for 2023 amounts to €1,174 million
Revenue €36,375 million, up 4.9%
Net revenue (beia) 5.5% organic growth; per hectolitre 10.8%
Beer volume -4.7% organic growth; Heineken® volume 2.5% (excluding Russia 3.4%)
Gross savings €0.8 billion for 2023 and €2.5 billion cumulatively versus 2019
Operating profit €3,229 million; operating profit (beia) 1.7% organic growth
Operating profit (beia) margin 14.7%
Net profit €2,304 million; net profit (beia) -4.3% organic growth
Diluted EPS (beia) €4.67
Full year 2024 outlook: low- to high-single-digit operating profit (beia) organic growth

Financial Summary1

IFRS Measures	€ million	Total growth	BEIA Measures	€ million	Organic growth2
Revenue	36,375	4.9%	Revenue (beia)	36,310	4.6%
Net revenue	30,362	5.7%	Net revenue (beia)	30,308	5.5%
Operating profit	3,229	-24.6%	Operating profit (beia)	4,443	1.7%
			Operating profit (beia) margin (%)	14.7%
Net profit of Heineken Holding N.V.	1,174		Net profit (beia)	2,632	-4.3%
Diluted EPS (in €)	4.12		Diluted EPS (beia) (in €)	4.67	-5.2%
			Free operating cash flow	1,759
			Net debt / EBITDA (beia)3	2.4x

1 Consolidated figures are used throughout this report, unless otherwise stated. Please refer to the Glossary for an explanation of non-GAAP measures and other terms. Page 13 includes a reconciliation versus IFRS metrics. These non-GAAP measures are included in internal management reports that are reviewed by the Executive Board of HEINEKEN, as management believes that this measurement is the most relevant in evaluating the results and in performance management.2 Organic growth shown, except for Diluted EPS (beia), which is total growth. 3 Includes acquisitions and excludes disposals on a 12-month pro-forma basis.

HEINEKEN's focus throughout 2023 required HEINEKEN to respond to challenging market conditions, whilst remaining focused on the deployment of HEINEKEN's EverGreen strategy. HEINEKEN does this to future-proof and deliver superior, balanced growth in a fast-changing world, with an ambition to become the best digitally connected brewer, raise the bar on sustainability and responsibility and evolve HEINEKEN's operating model, capabilities and culture. HEINEKEN also focuses on productivity to fund the investments required and progressively improve profitability and capital efficiency.

Over time, HEINEKEN aims for a healthy balance between volume and value growth, achieved by building and scaling premium and strategic core mainstream brands everywhere, innovating in fast-growing consumer segments and further developing HEINEKEN's geographic and portfolio footprint. This year, HEINEKEN had to prioritise pricing to offset unprecedented levels of commodity and energy inflation, often leading the market, which impacted consumer off-take. During the second half, HEINEKEN saw pricing moderate and volume trends sequentially improve in the majority of HEINEKEN's markets.

Revenue for the full year was €36.4 billion (2022: €34.7 billion) a total increase of 4.9%. Net revenue (beia) increased by 5.5% organically, with net revenue (beia) per hectolitre up 10.8% and total consolidated volume declining by 4.7%. The underlying price-mix on a constant geographic basis was up 10.2%, driven by pricing for inflation and positive mix effects. Currency translation negatively impacted net revenue (beia) by €864 million or 3.0%, mainly from the devaluation of currencies in emerging markets partially offset by a stronger Mexican Peso. Consolidation effects positively impacted net revenue (beia) by €887 million or 3.1%, mainly from the consolidation of Distell and Namibia Breweries.

Beer volume declined 4.7% organically for the full year. Vietnam and Nigeria represented over 60% of the decline, with both markets affected by challenging economic conditions. HEINEKEN gained or held volume market share in more than half of HEINEKEN's markets in 2023.

Beer volume

4Q23

Organic growth

FY23

Organic growth

(in mhl)

4Q22

FY22

Heineken N.V.

59.4

63.3

-3.2%

242.6

256.9

-4.7%

In the fourth quarter, net revenue (beia) grew organically by 4.8%. Total consolidated volume declined by 3.2%, improving sequentially relative to the third quarter. Beer volume declined organically by 3.2%, driven by declines in Asia Pacific, Africa and Europe, partially offset by modest volume growth in the Americas. HEINEKEN's exit volume momentum was a low-single-digit decline adjusted for the pre-Tet season trade loading at the end of 2022 that led to an overstock in the first quarter of 2023. More than half of HEINEKEN's markets grew volume in the last quarter. Net revenue (beia) per hectolitre was up 8.2% organically with price-mix on a constant geographic basis up 7.6%, driven by pricing and positive mix effects.

Premium beer volume declined by 5.9% organically, mainly driven by Vietnam and HEINEKEN's exit from Russia. Outside of these markets premium beer grew by 1.1%, outperforming the total portfolio in the majority of HEINEKEN's markets. This growth is led by Heineken®, complemented by HEINEKEN's international and local premium brands including El Aguila, Birra Moretti, Kingfisher Ultra and Bedele Special.

Heineken® continued to lead our portfolio and grew volume by 2.5% versus last year (3.4% excluding Russia). Growth was broad-based across 39 markets, most notably in China, Brazil, Ethiopia, Indonesia and Taiwan. Heineken® Silver is now present in 50 markets with a volume growth in the high thirties, led by China, Vietnam and the USA.

Heineken® volume	4Q23	Organic growth	FY23	Organic growth
(in mhl)	4Q23	Organic growth	FY23	Organic growth
Total	15.4	4.0%	56.3	2.5%

		Outlook 2024

As HEINEKEN continues to advance on HEINEKEN's EverGreen journey, HEINEKEN remains committed to its 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.

HEINEKEN's volume performance at the closing of 2023 was under pressure from external factors, with a moderate sequential improvement quarter by quarter. For 2024, HEINEKEN expects the macroeconomic environment and geopolitical developments to remain a factor of uncertainty that may impact HEINEKEN's business. In this context, HEINEKEN's focus going forward will be on restoring its volume growth by continuing to invest behind its brands, innovations, commercial capabilities and route-to-consumer.

HEINEKEN expects its variable costs to increase by a low-single-digit on a per hectolitre basis, benefitting from lower commodity and energy prices, but more than offset by local input cost inflation and currency devaluations, particularly in Africa. HEINEKEN also expects higher than historical average wage inflation to impact its cost base.

HEINEKEN's continuous productivity programme will deliver at least €500 million of gross savings in 2024, ahead of HEINEKEN's medium term commitment of €400 million for the near-term, enabling investments behind HEINEKEN's growth agenda, its digital transformation, strategic capabilities and HEINEKEN's Brew a Better World activities.

Overall, HEINEKEN expects 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 HEINEKEN has also witnessed in the past months and the fact that HEINEKEN will continue to invest behind EverGreen for long-term sustained value creation.

HEINEKEN also expects:

An average effective interest rate (beia) of around 3.5% (2023: 3.4%)
Other net finance expenses to further increase, mainly due to the impact from significant devaluations and the scarcity of hard currency in some key emerging markets, like HEINEKEN is experiencing currently in Nigeria
An increase in HEINEKEN's effective tax rate (beia) to around 29%, mainly driven by changes in tax laws in Brazil (2023: 26.8%).

The factors above result in a net profit (beia) organic growth that is lower than the operating profit (beia) organic growth.

Finally, HEINEKEN expects investments in capital expenditure related to property, plant and equipment and intangible assets to be below 9% of net revenue (beia) (2023: 8.8%)

		Total Dividend For 2023

The Heineken N.V. dividend policy is to pay a ratio of 30% to 40% of full year net profit (beia). For 2023, a total cash dividend of €1.73 per share, a similar amount to last year (2022: €1.73), representing a payout ratio of 36.8%, within the range of Heineken N.V.'s policy, will be proposed to the Heineken N.V. Annual General Meeting on 25 April 2024. If approved, a final dividend of €1.04 per share will be paid on 7 May 2024, as an interim dividend of €0.69 per share was paid on 10 August 2023.

If Heineken N.V. shareholders approve the proposed dividend, Heineken Holding N.V. will, according to its Articles of Association, pay an identical dividend per share. A final dividend of €1.04 per share of €1.60 nominal value will be payable as of 7 May 2024.

Both the Heineken Holding N.V. shares and the Heineken N.V. shares will trade ex-dividend on 29 April 2024. The dividend payment will be subject to a 15% Dutch withholding tax.

		Translational Calculated Currency Impact

The translational currency impact for 2023 was negative on net revenue (beia) by €864 million and on operating profit (beia) by €102 million and positive on net profit beia by €6 million.

Applying spot rates as of 12 February 2024 to the 2023 financial results as a base, the calculated currency translational impact would be negative, approximately €440 million in net revenue (beia), €60 million at operating profit (beia), and positive by €40 million at net profit (beia).

		Board of Directors Composition

Mr J.F.M.L. van Boxmeer will have completed his four-year appointment term upon conclusion of the Heineken Holding N.V. Annual General Meeting on 25 April 2024 ('2024 AGM'). Mr J.F.M.L. van Boxmeer is eligible for reappointment. A non-binding recommendation, drawn up by the Board of Directors, will be submitted to the 2024 AGM to reappoint Mr J.F.M.L. van Boxmeer as non-executive director of the Board of Directors, for the maximum period of four years (i.e. until the end of the Annual General Meeting of Shareholders to be held in 2028).

Enquiries

Media Heineken Holding N.V.
Kees Jongsma
tel. +31 6 54 79 82 53
E-mail: cjongsma@spj.nl

Media		Investors
Joris Evers		José Federico Castillo Martinez
Director of Global Communication		Investor Relations Director
Michael Fuchs		Mark Matthews / Chris Steyn
Corporate & Financial Communications Manager		Investor Relations Manager / Senior Analyst
E-mail: pressoffice@heineken.com		E-mail: investors@heineken.com
Tel: +31-20-5239355		Tel: +31-20-5239590

		Investor Calendar Heineken N.V.

(events also accessible for Heineken Holding N.V. shareholders)

Combined financial and sustainability annual report publication	22 February 2024
Trading Update for Q1 2024	24 April 2024
Annual General Meeting of Shareholders	25 April 2024
Quotation ex-final dividend 2023	29 April 2024
Final dividend 2023 payable	7 May 2024
Half Year 2024 Results	29 July 2024
Quotation ex-interim dividend 2024	31 July 2024
Interim dividend payable	8 August 2024
Trading Update for Q3 2024	23 October 2024

		Conference Call Details

HEINEKEN will host an analyst and investor video webcast about its 2023 FY results today, 14 February, at 14:00 CET/ 13:00 GMT/ 08.00 EST. This call will also be accessible for Heineken Holding N.V. shareholders. The live video webcast will be accessible via the Heineken N.V.’s website: https://www.theheinekencompany.com/investors/results-reports-webcasts-and-presentations.

An audio replay service will also be made available after the webcast at the above web address. Analysts and investors can dial-in using the following telephone numbers:

United Kingdom (local): +44 20 3936 2999

Netherlands (local): +31 85 888 7233

United States: +1 646 787 9445

All other locations: +44 20 3936 2999

For the full list of dial in numbers, please refer to the following link: Global Dial-In Numbers

Participation password for all countries: 022498

Editorial information:Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management or supervision of and provision of services to that company. HEINEKEN is the world's most international brewer. It is the leading developer and marketer of premium and non-alcoholic beer and cider brands. Led by the Heineken® brand, the Group has a portfolio of more than 350 international, regional, local and specialty beers and ciders. With HEINEKEN’s over 90,000 employees, we brew the joy of true togetherness to inspire a better world. HEINEKEN's dream is to shape the future of beer and beyond to win the hearts of consumers. HEINEKEN is committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through "Brew a Better World", sustainability is embedded in the business. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets. HEINEKEN operates breweries, malteries, cider plants and other production facilities in more than 70 countries. The most recent information is available on www.heinekenholding.com and www.theheinekencompany.com and follow HEINEKEN on LinkedIn, Twitter and Instagram.

Market Abuse Regulation:This press release may contain price-sensitive information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Disclaimer:This press release contains forward-looking statements based on current expectations and assumptions with regards to the financial position and results of HEINEKEN’s activities, anticipated developments and other factors. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements also include, but are not limited to, statements and information in HEINEKEN’s non-financial reporting, such as HEINEKEN’s emissions reduction and other climate change related matters (including actions, potential impacts and risks associated therewith). These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “milestones”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. These forward-looking statements, while based on management's current expectations and assumptions, are not guarantees of future performance since they are subject to numerous assumptions, known and unknown risks and uncertainties, which may change over time, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s ability to control or estimate precisely, such as but not limited to future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials and other goods and services, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, environmental and physical risks, change in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN’s publicly filed annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which speak only of the date of this press release. HEINEKEN assumes no duty to and does not undertake any obligation to update these forward-looking statements contained in this press release. Market share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination with management estimates.

Attachment