Key Highlights | |||
- Net revenue (beia) organic growth 12.2%; per hectolitre 8.3%
- Consolidated beer volume 4.6% organic growth
- Heineken® volume growth 17.4%, well ahead of 2019
- Gross savings close to €1.3 billion, on-track to deliver €2 billion by 2023
- Operating profit (beia) organic growth 43.8%, margin 15.6% (+331 bps)
- Net profit (beia) €2,041 million, 80.2% organic growth
- Diluted EPS (beia) €3.54 (2020: €2.00)
CEO Statement | |||
"We delivered a strong set of results in 2021 in a challenging and fast-changing environment. I am proud of how our colleagues, customers, and suppliers continued to adapt, support one another, and deliver these results.
We made a big step towards recovering to pre-pandemic levels, and in parts going beyond. I am pleased with the great momentum of the Heineken® brand, the renewal of our brand and product portfolio, the acceleration of our digital transformation and how we are strengthening our footprint with the acquisition of UBL in
Looking ahead, although the speed of recovery remains uncertain and we face significant inflationary challenges, we are encouraged by the strong performance of our business and how EverGreen is taking shape. This gives me confidence we are on course to deliver superior and balanced growth to drive sustainable long-term value creation."
Financial Summary1 | |||
IFRS Measures | € million | Total growth | BEIA Measures | € million | Organic growth2 | |
Revenue | 26,583 | 11.8% | Revenue (beia) | 26,583 | 11.4% | |
Net revenue | 21,941 | 11.3% | Net revenue (beia) | 21,901 | 12.2% | |
Operating profit | 4,483 | 476.2% | Operating profit (beia) | 3,414 | 43.8% | |
Operating profit (beia) margin (%) | 15.6% | |||||
Net profit | 3,324 | Net profit (beia) | 2,041 | 80.2% | ||
Diluted EPS (in €) | 5.77 | Diluted EPS (beia) (in €) | 3.54 | 76.8% | ||
Free operating cash flow | 2,514 | |||||
Net debt / EBITDA (beia)3 | 2.6x |
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 24 includes a reconciliation versus IFRS metrics. These non-GAAP measures are included in internal management reports that are reviewed by the Executive
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.
Operational Review | |||
During 2021, we deployed our EverGreen strategy across the business, designed to emerge stronger from the COVID-19 crisis and adapt to new external dynamics for superior and balanced growth with enhanced profitability, whilst simultaneously raising the bar on sustainability and responsibility.
DRIVING SUPERIOR GROWTH
Our superior growth ambition is grounded in building a favourable geographic footprint, our strong premium beer brands, including non-alcoholic variants and developing winning beverage propositions in fast-growing segments.
Net revenue (beia) for the full year 2021 increased by 12.2% organically, with total consolidated volume growing by 3.6% and net revenue (beia) per hectolitre up 8.3%. The underlying price-mix on a constant geographic basis was up 7.1%, driven by assertive pricing and premiumisation, with the regions
In the second half of the year, net revenue (beia) grew 10.6% organically. We took further pricing actions and accelerated net revenue (beia) per hectolitre growth to 11.0%. Underlying price-mix in the second half was up 8.8% primarily driven by
Beer volume grew 4.6% organically for the full year. In the fourth quarter, beer volume grew 6.2%, benefiting from fewer restrictions in
Beer volume1 | 4Q21 | Organic growth | FY21 | Organic growth | ||||||||
(in mhl) | 4Q20 | FY20 | ||||||||||
61.1 | 56.2 | 6.2 % | 231.2 | 221.6 | 4.6 % | |||||||
10.1 | 11.2 | 4.5 % | 38.9 | 39.6 | 10.4 % | |||||||
23.9 | 22.5 | 6.5 % | 85.4 | 79.1 | 8.2 % | |||||||
10.0 | 7.6 | -9.0 % | 29.4 | 28.1 | -11.7 % | |||||||
17.1 | 14.8 | 15.0 % | 77.5 | 74.8 | 3.8 % |
1 2021 volume reflects the shift of malt-based, unfermented, non-alcoholic drinks from Beer to Non-Beer Volume. Organic growth has been corrected.
Driving premiumisation at scale, led by Heineken®
Premium beer volume grew 10.0%, outperforming the portfolio in the majority of our markets, and accounts for more than 60% of our total organic growth in beer volume in 2021. Our growth in premium is led by Heineken®, up 17.4%, significantly outperforming the total beer market and well ahead of 2019. The growth was broad-based with more than 60 markets growing double-digits in 2021.
The outstanding growth of Heineken® Original was further supported by the strong performance of its line extensions. Heineken® Silver more than doubled its volume, driven by excellent performances in
Heineken® volume | 4Q21 | Organic growth | FY21 | Organic growth | ||||
(in mhl) | ||||||||
Total | 13.3 | 24.1% | 48.8 | 17.4% | ||||
1.9 | 19.9% | 6.7 | 24.6% | |||||
6.0 | 34.4% | 19.6 | 22.9% | |||||
1.9 | 4.5% | 7.1 | 14.6% | |||||
3.5 | 23.3% | 15.5 | 9.4% |
Our world-class sponsorships are a unique vehicle to connect and reach consumers, and 2021 was our biggest year in history despite COVID-19 restrictions.
Formula 1 and
We accelerated premiumisation at scale via our international brands portfolio, complementing Heineken® in addressing specific consumer needs. Amstel grew volume in the mid-twenties, with 20 markets growing double-digits, with in-market results particularly strong in
We are making fewer, bigger bets on premium local brands. In
Pioneer choice in low & no-alcohol
Consumers are increasingly looking for healthy hydration and a tasty, adult refreshment with lower or no alcohol content to enjoy on any occasion. Meeting this consumer need, our Low & No-Alcohol (LONO) portfolio grew more than 10%, reaching 15.4 million hectolitres (2020: 14.0 million). We strengthened our global leadership in the non-alcoholic segment with the growth in the low-teens of our portfolio, led by Heineken® 0.0 and Maltina in
Intentionally expand beyond beer
We aim to stretch our product portfolio beyond beer to reach a spectrum of consumer needs, including fast-growing segments loved by young consumers.
Desperados continued its momentum and grew in the high-teens, driven by its core markets in
Cider volume grew by a mid-single-digit to 4.9 million hectolitres (2020: 4.6 million), mainly driven by Strongbow following the recovery of
We continue to experiment across different markets in the
Build a future-fit digital route-to-consumer
Digitalisation trends have accelerated, consumers are changing shopping patterns and customers are adapting to new realities. We aim to be the best connected brewer, leveraging our strong customer relationships to build a future-fit digital route-to-consumer. In 2021 we increased our investment to strengthen our capabilities and scale our e-commerce platforms:
- We accelerated the deployment of our business-to-business digital (eB2B) platforms in all regions. We now operate them in 30 markets, representing 75% of our net revenue. With these platforms, our customers in the fragmented trade can grow their business with more and better services and data insights, while we can increase sales and productivity.
- We captured €2.8 billion in digital sales value, a growth of 130% versus last year, driven by strong growth in
Mexico ,Brazil ,Vietnam ,Nigeria , theUK ,Italy ,France ,Cambodia ,Singapore ,Egypt andIreland , and well on-track to €10 billion by 2025. In 2021, we captured close to one-third of the net revenue (beia) of the fragmented trade in our markets via our eB2B platforms, and almost half by the end of the year. During 2021 we connected with close to 370,000 active customers during the year, more than 3x last year. - Beerwulf, our direct-to-consumer (D2C) platform in
Europe , grew its revenue in the high-thirties, mainly driven by sales of our home-draught systems, especially the Blade in theUK andthe Netherlands . - In
Mexico , following all the learnings from Six-2-Go, we launched our new D2C platform GLUP, with a value proposition designed to delight consumers who want beer, beverages and more delivered in less than 60 minutes.
Strengthen and optimise our footprint
We continue to develop and expand our geographical and portfolio footprint to build a long-term, sustained growth advantage.
On
On
We have also addressed most of our value-dilutive operations, including restructuring of our businesses in
FUNDING THE GROWTH
To support our growth ambitions, offset inflationary pressures, restore our profitability and thereafter gear our business to deliver operating leverage consistently, we are structurally addressing our cost base and building a cost-conscious culture.
At the end of 2020, we launched a productivity programme targeting €2 billion of structural gross savings by 2023, relative to our cost base of 2019. Five quarters into the programme we achieved much: we streamlined our organisation, reduced unnecessary portfolio complexity, lowered conversion and logistics costs and took unproductive non-consumer facing investment out. By the end of 2021, we captured close to €1.3 billion gross savings versus our cost base of 2019, putting us well on track to deliver on our 2023 objective.
As important, we now have a company-wide, systematic approach to find cost opportunities. Projects and initiatives are captured in a standardised tool and follow a disciplined project management funnel approach to bring ideas to maturity and value realisation.
Next to the gross savings delivered by our productivity programme, we also took drastic cost mitigating actions to partially offset the financial impact from lockdowns and other restrictions to operate. These actions resulted in a reduction of expenses (beia) of circa €0.5 billion relative to 2019, mainly related to marketing, selling and personnel expenses. These cost mitigation actions are by nature non-repeating benefits and are expected to reverse next year.
Operating profit (beia) grew 43.8% organically with a strong recovery in
Net profit (beia) grew 80.2% organically to €2,041 million (2020: €1,154 million), driven by the increase in operating profit. Currency translation negatively impacted net profit (beia) by €43 million or 3.7%, mainly driven by the Brazilian Real, the Vietnamese Dong and the US Dollar. Net profit after exceptional items and amortisation of acquisition-related intangibles was €3,324 million (2020: €204 million loss), driven by the same variances in exceptional items as operating profit.
For more details, please refer to the Financial Review.
RAISING THE BAR ON SUSTAINABILITY AND RESPONSIBILITY
In 2021, we launched the next phase of our sustainability and responsibility strategy in the form of 22 new Brew a Better World commitments focusing on three areas: Raising the bar on climate action, accelerating our social sustainability agenda and driving our brands to be more ambitious in promoting moderate consumption of alcohol.
Environmental: Path to zero impact
In
We continue to focus on healthy watersheds via efficient water usage, wastewater management and water security. Aligned with our 2030 commitments, we aim to further reduce water usage to 2.6 hectolitre per hectolitre (hl/hl) in water-stressed areas and 2.9 hl/hl worldwide. By the end of 2021, we reached 3.1 hl/hl and 3.4 hl/hl, respectively. 23 of our 31 sites in water-stressed areas have begun watershed protection programmes with the aim to fully balance our water use by 2030, one third of these sites are already fully balanced.
Social: Path to an inclusive, fair and equitable world
While our percentage of women in senior management has doubled from a decade ago, much opportunity remains in terms of gender diversity. By the end of 2021, 25% of our senior management positions were held by women. Our commitment is to increase this percentage to at least 30% by 2025 and 40% by 2030 on the path to gender balance.
We also commit to equal pay for equal work between female and male colleagues and want to ensure that all our employees worldwide earn at least a fair wage1 by 2023 with a focus on the most vulnerable communities. By the end of 2021, 97% of operating companies have been assessed on equal pay and we will have actions in place to close any gaps by 2023. Regarding fair wage, 63% of operating companies have been assessed so far, of which 99% are compliant.
Responsible: Path to moderate and no harmful use
Our ambition is to make 0.0 alcohol options available for consumers everywhere so that there is always a choice. Heineken® 0.0 is now available in more than 100 markets and, by 2023, we will ensure a zero-alcohol option is available for at least two strategic brands in the majority of our operating companies, accounting for 90% of our business by volume. By the end of 2021, we were at 43%.
We will continue to use the power of our flagship brand to promote moderation. We commit 10% of all Heineken® media spend to advance responsible consumption campaigns and to make moderation cool. Through this effort, we will reach one billion people with moderation messaging annually. In 2021, our operating companies invested over 10% of Heineken® media spend in dedicated responsible consumption campaigns. In total, we have reached 1.2 billion unique consumers worldwide.
Governance
In 2021, we continued to raise the bar on our ways of working, governance and transparent reporting. Given the importance of sustainability and responsibility for long-term value creation:
- We formally added sustainability and responsibility to our long-term value creation model, the Green Diamond
- We started two Sustainability & Responsibility Committees: one at Supervisory Board level and one at Executive Management level
- We committed to the
World Economic Forum's Stakeholder Capitalism Metrics (WEF) and theTask Force on Climate-related Financial Disclosures (TCFD), which both aim to improve quality and consistency of climate-related disclosures - We assessed how best to align our remuneration policy with our sustainability ambitions; a proposal will be shared during our Annual General Meeting in
April 2022
More details on these and other areas of our 2030 strategy are available on our website and in our 2021 Annual Report.
Outlook Statements | |||
We launched our EverGreen strategy in
In 2022, we will continue to navigate an uncertain environment and expect COVID-19 to still have an impact on revenues. Our plans assume markets in APAC to progressively bounce back during the year, yet full recovery of the on-trade in
We also expect to be significantly impacted by inflation and supply chain resilience pressures. More specifically, we expect our input cost per hectolitre (beia) to increase in the mid-teens given our hedged positions and the sharp increase in the prices of commodities, energy, and freight. We will offset these input cost increases through pricing in absolute terms, which may lead to softer beer consumption.
Reflecting our confidence in the long-term, we intend to reverse the cost mitigation actions undertaken in 2021 and to further step up our investments in brand support and our digital and sustainability initiatives. This investment will be partially offset by further delivery of gross savings from our productivity programme. These changes are expected to have a greater impact in the first half of the year.
Overall, we expect a stable to modest sequential improvement in operating profit margin (beia) in 2022. Whilst continuing to target 17% operating margin (beia) in 2023 and operating leverage beyond, there is increased uncertainty given current and evolving economic and input cost circumstances. Therefore, we will update the 2023 guidance later in the year.
We also anticipate:
- An average effective interest rate (beia) broadly in line with 2021 (2021: 2.7%)
- Capital expenditure related to property, plant and equipment and intangible assets of around €2 billion (2021: €1.6 billion)
- An effective tax rate (beia) of around 28% (2021: 29.9%), back to the level of 2019.
Total Dividend For 2021 | |||
The
Translational Calculated Currency Impact | |||
The translational currency impact for 2021 was negative, amounting to €515 million on net revenue (beia), €98 million at operating profit (beia) and €43 million at net profit (beia).
Applying spot rates as of
Regional Overview |
Net revenue (beia) | FY21 | FY20 | Organic growth | |||
(in € million) | ||||||
21,901 | 19,724 | 12.2% | ||||
3,159 | 2,782 | 25.9% | ||||
7,226 | 6,319 | 17.9% | ||||
2,764 | 2,707 | -6.1% | ||||
9,494 | 8,631 | 8.6% | ||||
Head Office & Eliminations | -744 | -716 |
Operating profit (beia) | FY21 | FY20 | Organic growth | |||
(in € million) | ||||||
3,414 | 2,421 | 43.8% | ||||
442 | 264 | 89.0% | ||||
1,215 | 1,045 | 19.5% | ||||
753 | 867 | -13.5% | ||||
1,160 | 447 | 154.1% | ||||
Head Office & Eliminations | -155 | -202 |
Developing markets FY21 | Group beer volume | Group net revenue (beia) | Group operating profit (beia)1 | |||
(in mhl or € million unless otherwise stated) | ||||||
Developing markets in: | 177.6 | 11,983 | 2,085 | |||
40.6 | ||||||
78.1 | ||||||
55.5 | ||||||
3.4 | ||||||
% of Group | 64% | 48% | 53% |
1 Excludes Head Office & Eliminations
Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
(in mhl or € million unless otherwise stated) | ||||||||
Net revenue (beia) | 3,159 | 2,782 | 13.6% | 25.9% | ||||
Operating profit (beia) | 442 | 264 | 67.2% | 89.0% | ||||
Operating profit (beia) margin | 14.0% | 9.5% | 449 bps | |||||
Total consolidated volume | 50.3 | 45.4 | 10.7% | 12.2% | ||||
Beer volume | 38.9 | 39.6 | -1.9% | 10.4% | ||||
Non-Beer volume | 11.3 | 5.7 | 97.5% | 24.5% | ||||
Third party products volume | 0.1 | 0.1 | 25.4% | 25.4% | ||||
Licensed beer volume | 2.4 | 2.1 | ||||||
Group beer volume | 41.7 | 42.2 |
Our Africa,
Consolidated beer volume grew 10.4% organically, mainly driven by
Net revenue (beia) grew 25.9% organically, with total consolidated volume up 12.2% and net revenue (beia) per hectolitre up 12.2%. Price mix was up 12.5% on a constant geographic basis, driven by strong pricing across the region, particularly
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Beer volume also grew in the double-digits in the DRC,
Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
(in mhl or € million unless otherwise stated) | ||||||||
Net revenue (beia) | 7,226 | 6,319 | 14.4% | 17.9% | ||||
Operating profit (beia) | 1,215 | 1,045 | 16.3% | 19.5% | ||||
Operating profit (beia) margin | 16.8% | 16.5% | 28 bps | |||||
Total consolidated volume | 89.4 | 86 | 4.1% | 4.1% | ||||
Beer volume | 85.4 | 79.1 | 7.9% | 8.2% | ||||
Non-Beer volume | 3.9 | 6.7 | -41.4% | -44.9% | ||||
Third party products volume | 0.1 | 0.1 | 11.7% | 11.7% | ||||
Licensed beer volume | 3.1 | 2.1 | ||||||
Group beer volume | 97.1 | 89.0 |
The
Consolidated beer volume grew 8.2% organically, mainly driven by
Net revenue (beia) grew 17.9% organically, with total consolidated volumes up 4.1% and net revenue (beia) per hectolitre up 13.3%. Price mix was up 10.3% on a constant geographic basis, mainly driven by strong premiumisation and pricing in
In
In
In the
The strong performance in the region was also supported by strong growth in
Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
(in mhl or € million unless otherwise stated) | ||||||||
Net revenue (beia) | 2,764 | 2,707 | 2.1% | -6.1% | ||||
Operating profit (beia) | 753 | 867 | -13.2% | -13.5% | ||||
Operating profit (beia) margin | 27.2% | 32.0% | -481 bps | |||||
Total consolidated volume | 30.4 | 28.7 | 5.8% | -11.1% | ||||
Beer volume | 29.4 | 28.1 | 5.0% | -11.7% | ||||
Non-Beer volume | 0.9 | 0.7 | 32.8% | 5.0% | ||||
Third party products volume | 0.1 | 0.0 | 148.5% | 148.5% | ||||
Licensed beer volume | 3.7 | 2.9 | ||||||
Group beer volume | 59.3 | 57.6 |
The
After a strong performance at the start of the year, the region was impacted severely by the pandemic, which led to suspension of breweries, alcohol bans and closing of the on-trade. As a consequence, consolidated beer volume declined 11.7% organically, driven by
Net revenue (beia) declined 6.1% organically, with net revenue (beia) per hectolitre up 5.7% with a significant positive geographic mix. Price mix was up 2.1% on a constant geographic basis, driven by
In
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Key financials | FY21 | FY20 | Total growth | Organic growth | ||||
(in mhl or € million unless otherwise stated) | ||||||||
Net revenue (beia) | 9,494 | 8,631 | 10.0% | 8.6% | ||||
Operating profit (beia) | 1,160 | 447 | 159.5% | 154.1% | ||||
Operating profit (beia) margin | 12.2% | 5.2% | 704 bps | |||||
Total consolidated volume | 91.8 | 88.8 | 3.4% | 3.5% | ||||
Beer volume | 77.5 | 74.8 | 3.6% | 3.8% | ||||
Non-Beer volume | 9.0 | 9.0 | -0.5% | -1.0% | ||||
Third party products volume | 5.4 | 5.0 | 8.0% | 8.0% | ||||
Licensed beer volume | 0.7 | 0.7 | ||||||
Group beer volume | 80.4 | 77.6 |
Consolidated beer volume grew organically by 3.8%, with the fourth quarter up by 15.0% with restrictions less widespread and severe as compared to last year. Premium beer volume grew in the low-teens, led by Heineken®, Desperados, Birra Moretti, Amstel, Gösser and Ichnusa among many others. On-trade beer volume grew in the high-teens, mainly driven by the growth in the fourth quarter, still below 2019 by more than 30% for the full year. Off-trade beer volume was broadly flat versus last year and yet ahead of 2019 by around 10%, with two-thirds of our markets with stable or growing market share. Third-party volume grew by 8.0% driven by the growth in the last quarter as the on-trade reopened. The non-alcoholic portfolio outperformed the market, led by the growth of Heineken® 0.0 and Desperados Virgin 0.0.
Net revenue (beia) increased by 8.6% organically with net revenue (beia) per hectolitre up 5.4%. Price mix was up 4.3% on a constant geographic basis, with growth across all markets due to positive channel mix, premiumisation, and pricing. Operating profit (beia) grew by 154.1% organically with strong growth in all major markets.
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Financial Review |
Key figures | ||||||||||||
(in mhl or € million unless otherwise stated) | FY20 | Currency translation | Consolidation impact | Organic growth | FY21 | Organic growth | ||||||
Revenue (IFRS/beia) | 23,770 | -538 | 647 | 2,704 | 26,583 | 11.4 % | ||||||
Excise tax expense (beia) | -4,046 | 24 | -368 | -292 | -4,683 | -7.2 % | ||||||
Net Revenue (beia) | 19,724 | -515 | 280 | 2,412 | 21,901 | 12.2 % | ||||||
Total other expenses (beia) | -17,303 | 417 | -249 | -1,352 | -18,487 | -7.8 % | ||||||
Operating profit (beia) | 2,421 | -98 | 31 | 1,060 | 3,414 | 43.8 % | ||||||
Net interest income/(expenses) (beia) | -470 | 8 | 1 | 59 | -403 | 12.5 % | ||||||
Other net finance income/(expenses) (beia) | -146 | 23 | -4 | 32 | -94 | 22.2 % | ||||||
Share of net profit of assoc./ JVs (beia) | 147 | -6 | -7 | 103 | 238 | 70.0 % | ||||||
Income tax expense (beia) | -593 | 14 | -6 | -287 | -872 | -48.5 % | ||||||
Non-controlling interests (beia) | -205 | 16 | -11 | -41 | -241 | -20.1 % | ||||||
Net profit (beia) | 1,154 | -43 | 4 | 925 | 2,041 | 80.2 % | ||||||
Eia | -1,358 | 1,283 | ||||||||||
Net profit/(loss) | -204 | 3,324 |
Note: due to rounding, this table will not always cast
Main changes in consolidation
As part of the organisational redesign of EverGreen, HEINEKEN merged its export business units of
On
Revenue
Revenue was €26,583 million, an increase of 11.8% (2020: €23,770 million). Revenue (beia) increased 11.4% organically to €26,583 million.
Net revenue increased 11.3% to €21,941 million (2020: €19,715 million). Net revenue (beia) increased by 12.2% organically to €21,901 million, with total consolidated volume increasing 3.6% and an increase in net revenue (beia) per hectolitre of 8.3%. Currency developments negatively impacted by €515 million or 2.6%, mainly driven by the Brazilian Real and the Nigerian Naira. The positive impact of consolidation changes was €280 million, related primarily to UBL.
Expenses
Total other expenses were €18,979 million, in line with last year (2020: €18,993 million) as lower exceptional expenses offset the underlying growth in costs. Total other expenses (beia) were €18,487 million, up 7.8% on an organic basis, driven by the increase in volume and higher input costs per hectolitre, partially offset by cost savings from our productivity programme and cost mitigation actions in some markets.
Input costs per hectolitre increased faster in the second half of the year, by a high-single-digit, and closed the year up by a mid-single-digit. The increase was mainly driven by transactional currency effects, particularly from the Brazilian Real, and higher prices of raw and packaging materials, energy, and freight, partially offset by structural costs savings.
Marketing and selling (beia) expenses increased organically by 2.6% and represented 9.5% of net revenue (beia) (2020: 10.4%; 2019: 11.0%), driven by cost mitigation actions in markets under lockdown, lower credit losses and commercial efficiencies from our productivity programme.
Personnel expenses (beia) increased organically with 5.5% to €3,489 million (2020: €3,339 million) driven by the re-instatement of variable pay, partially offset by a lower number of employees. Government support received under different support programmes amounted to €37 million (2020: €49 million), mainly in
Depreciation & amortisation expenses (beia) decreased organically by 1.7% to €1,539 million (2020: €1,584 million), driven by the impairments of last year in combination with lower investments in assets due to the partial suspension of non-committed CAPEX in 2020.
Operating profit
Operating profit increased to €4,483 million (2020: €778 million) driven by the performance this year, the remeasurement to fair value of the previously-held equity interest in UBL in
Net finance expenses (beia)
Net interest expenses (beia) decreased organically by 12.5% to €403 million, reflecting a lower average effective interest rate and a lower average net debt position. The average effective interest rate (beia) in 2021 was 2.7% (2020: 3.0%).
Other net finance expenses (beia) amounted to €94 million, down 22.2% on an organic basis, driven by a lower negative impact from currency revaluations on outstanding foreign currency payables.
Share of net profit of associates and joint ventures (beia)
The share of net profit of associates and joint ventures (beia) amounted to €238 million, including the attributable profit from China Resources Beer (CRB) with a two-month delay (
Income tax expense (beia)
The effective tax rate (beia) was 29.9% (2020: 32.8%). The decrease is mainly driven by the increase in the profit before tax basis. As a result, the effect of permanent items is lower and we have fewer losses for which no deferred tax assets could be recognised.
Net profit and loss
The net profit for 2021 was €3,324 million (2020: €204 million loss). Net profit (beia) increased organically by €925 million to €2,041 million. The impact on net profit (beia) of currency translation was negative €43 million (3.7%), and of consolidation changes positive €4 million (0.3%).
Exceptional items & amortisation of acquisition-related intangibles (eia)
Exceptional items are defined as items of income and expense of such size, nature or incidence that in the view of management their disclosure is relevant to explain the performance of HEINEKEN for the period. Exceptional items include, amongst others, impairments (and reversal of impairments) of goodwill and fixed assets, gains and losses from acquisitions and disposals, redundancy costs following a restructuring, the tax impact on exceptional items and tax rate changes (the one-off impact on deferred tax positions).
The impact of eia on net profit amounted to a benefit of €1,283 million (2020: €1,358 million expense). On operating profit, the impact of eia amounted to a benefit of €1,069 million (2020: €1,643 million expense).
Amortisation of acquisition-related intangibles recorded in operating profit amounted to €286 million (2020: €273 million). Net exceptional benefit items recorded in operating profit amounted to €1,355 million (2020: €1,370 million expenses), of which:
- €41 million benefit on excise tax (2020: €8 million expenses)
- €1,270 million gain on previously-held equity interest from UBL and €187 million benefit from tax credits in
Brazil recorded in other income (2020: nil) - €108 million in impairments (net of reversals), including €203 million for
Lagunitas (total impairments in 2020: €963 million) - €32 million in restructuring expenses (2020: €331 million)
- €3 million of other net exceptional expenses, including loss on disposals (2020: €68 million)
Please refer to page 24 for a description of the exceptional items and amortisation of acquisition-related intangibles below operating profit.
Capital expenditure and cash flow
Capital expenditure related to property, plant and equipment and intangible assets (CAPEX) amounted to €1,597 million (2020: €1,640 million; 2019: €2,101 million) representing 7.3% of net revenue (beia). The investments of the year amounted to €1,769 million (2020: €1,389 million; 2019: €2,215 million) and include capacity expansions in
Free operating cash flow amounted to €2,514 million (2020: €1,513 million; 2019: €2,228 million), ahead of 2020 mainly due to higher cash flow from operating activities, and ahead of 2019 mainly due to lower CAPEX. Delayed payments of value-added taxes, granted by governments in some countries, had a negative impact of €154 million in 2021.
Financial structure
Total gross debt amounted to €16,873 million (2020: €18,196 million). Net debt decreased to €13,658 million (2020: €14,210 million) as the positive free operating cash flow exceeded the cash outflow for dividends, acquisitions, and the negative foreign currency impact on debt.
Including the effect of cross-currency swaps, 65% of net debt is Euro-denominated, and 22% is US dollar and US dollar proxy currencies. The pro-forma 12 month rolling net debt/EBITDA (beia) ratio was 2.6x on
The centrally available financing headroom at Group level was approximately €4.6 billion as at
Average number of shares
HEINEKEN has 576,002,613 shares in issue. In the calculation of basic EPS, the weighted average number of shares outstanding was 575,740,269 (2020: 575,625,598).
In the calculation of 2021 diluted EPS (beia), shares to be delivered under the employee incentive programme (229,127 shares) are added to the weighted average shares outstanding. The weighted average diluted number of shares outstanding was 575,969,395 (2020: 575,821,605).
Full Year 2021 Consolidated Metrics
In mhl or €million unless otherwise stated & consolidated figures unless otherwise stated | FY20 | Currency translation | Consolidation impact | Organic growth | FY211 | Organic growth | ||||||
Africa, | ||||||||||||
Net revenue (beia) | 2,782 | -274 | -69 | 720 | 3,159 | 25.9% | ||||||
Operating profit (beia) | 264 | -47 | -10 | 235 | 442 | 89.0% | ||||||
Operating profit (beia) margin | 9.5% | 14.0% | ||||||||||
Total consolidated volume | 45.4 | -0.7 | 5.5 | 50.3 | 12.2% | |||||||
Beer volume | 39.6 | -4.9 | 4.1 | 38.9 | 10.4% | |||||||
Non-beer volume | 5.7 | 4.2 | 1.4 | 11.3 | 24.5% | |||||||
Third party products volume | 0.1 | — | 0.0 | 0.1 | 25.4% | |||||||
Licensed beer volume | 2.1 | 2.4 | ||||||||||
Group beer volume | 42.2 | 41.7 | ||||||||||
Net revenue (beia) | 6,319 | -224 | — | 1,131 | 7,226 | 17.9% | ||||||
Operating profit (beia) | 1,045 | -33 | — | 203 | 1,215 | 19.5% | ||||||
Operating profit (beia) margin | 16.5% | 16.8% | ||||||||||
Total consolidated volume | 86.0 | — | 3.5 | 89.4 | 4.1% | |||||||
Beer volume | 79.1 | -0.2 | 6.5 | 85.4 | 8.2% | |||||||
Non-beer volume | 6.7 | 0.2 | -3.0 | 3.9 | -44.9% | |||||||
Third party products volume | 0.1 | — | — | 0.1 | 11.7% | |||||||
Licensed beer volume | 2.1 | 3.1 | ||||||||||
Group beer volume | 89.0 | 97.1 | ||||||||||
Net revenue (beia) | 2,707 | -62 | 283 | -164 | 2,764 | -6.1% | ||||||
Operating profit (beia) | 867 | -28 | 31 | -117 | 753 | -13.5% | ||||||
Operating profit (beia) margin | 32.0% | 27.2% | ||||||||||
Total consolidated volume | 28.7 | 4.9 | -3.2 | 30.4 | -11.1% | |||||||
Beer volume | 28.1 | 4.7 | -3.3 | 29.4 | -11.7% | |||||||
Non-beer volume | 0.7 | 0.2 | — | 0.9 | 5.0% | |||||||
Third party products volume | 0.0 | — | 0.1 | 0.1 | 148.5% | |||||||
Licensed beer volume | 2.9 | 3.7 | ||||||||||
Group beer volume | 57.6 | 59.3 | ||||||||||
Net revenue (beia) | 8,631 | 42 | 77 | 744 | 9,494 | 8.6% | ||||||
Operating profit (beia) | 447 | 13 | 11 | 689 | 1,160 | 154.1% | ||||||
Operating profit (beia) margin | 5.2% | 12.2% | ||||||||||
Total consolidated volume | 88.8 | -0.1 | 3.1 | 91.8 | 3.5% | |||||||
Beer volume | 74.8 | -0.1 | 2.8 | 77.5 | 3.8% | |||||||
Non-beer volume | 9.0 | — | -0.1 | 9.0 | -1.0% | |||||||
Third party products volume | 5.0 | — | 0.4 | 5.4 | 8.0% | |||||||
Licensed beer volume | 0.7 | 0.7 | ||||||||||
Group beer volume | 77.6 | 80.4 | ||||||||||
Head Office & Eliminations | ||||||||||||
Net revenue (beia) | -716 | 2 | -11 | -20 | -744 | n.a. | ||||||
Operating profit (beia) | -202 | -2 | — | 49 | -155 | n.a. | ||||||
Net revenue (beia) | 19,724 | -515 | 280 | 2,412 | 21,901 | 12.2% | ||||||
Total expenses (beia) | -17,303 | 417 | -249 | -1,352 | -18,487 | -7.8% | ||||||
Operating profit (beia) | 2,421 | -98 | 31 | 1,060 | 3,414 | 43.8% | ||||||
Operating profit (beia) margin | 12.3% | 15.6 % | ||||||||||
Share of net profit of associates /JVs (beia) | 147 | -6 | -7 | 103 | 238 | 70.0% | ||||||
Net Interest income / (expenses) (beia) | -470 | 8 | 1 | 59 | -403 | 12.5% | ||||||
Other net finance income / (expenses) (beia) | -146 | 23 | -4 | 32 | -94 | 22.2% | ||||||
Income tax expense (beia) | -593 | 14 | -6 | -287 | -872 | -48.5% | ||||||
Minority Interests | -205 | 16 | -11 | -41 | -241 | -20.1% | ||||||
Net profit (beia) | 1,154 | -43 | 4 | 926 | 2,041 | 80.2% | ||||||
Total consolidated volume | 248.9 | 4.1 | 9.0 | 262.0 | 3.6% | |||||||
Beer volume | 221.6 | -0.5 | 10.2 | 231.2 | 4.6% | |||||||
Non-beer volume | 22.1 | 4.6 | -1.7 | 25.1 | -7.5% | |||||||
Third party products volume | 5.2 | — | 0.5 | 5.7 | 9.3% | |||||||
Licensed beer volume | 7.8 | 9.9 | ||||||||||
Group beer volume | 266.4 | 278.5 |
Note: due to rounding, this table will not always cast
1 2021 volume reflects the shift of malt-based, unfermented, non-alcoholic drinks from Beer to Non-Beer Volume. Organic growth has been corrected.
Fourth Quarter 2021 Metrics
In mhl unless otherwise stated & consolidated figures unless otherwise stated | 4Q20 | Consolidation impact | Organic growth | 4Q211 | Organic growth | |||||
Africa, | ||||||||||
Total consolidated volume | 12.7 | -0.2 | 0.5 | 13.0 | 3.9% | |||||
Beer volume | 11.2 | -1.6 | 0.5 | 10.1 | 4.5% | |||||
Non-beer volume | 1.5 | 1.4 | — | 2.9 | -0.2% | |||||
Third party products volume | — | — | — | — | — | |||||
Licensed beer volume | 0.6 | 0.7 | ||||||||
Group beer volume | 11.9 | 10.9 | ||||||||
Total consolidated volume | 24.4 | — | 0.4 | 24.8 | 1.6 % | |||||
Beer volume | 22.5 | -0.1 | 1.5 | 23.9 | 6.5% | |||||
Non-beer volume | 1.9 | 0.1 | -1.1 | 0.8 | -58.4% | |||||
Third party products volume | — | — | — | — | — | |||||
Licensed beer volume | 0.8 | 1.0 | ||||||||
Group beer volume | 26.7 | 27.4 | ||||||||
Total consolidated volume | 7.8 | 3.1 | -0.7 | 10.2 | -8.6% | |||||
Beer volume | 7.6 | 3.0 | -0.7 | 10.0 | -9.0% | |||||
Non-beer volume | 0.2 | 0.1 | 0.0 | 0.2 | -1.2% | |||||
Third party products volume | — | — | — | — | — | |||||
Licensed beer volume | 0.8 | 0.9 | ||||||||
Group beer volume | 15.2 | 16.5 | ||||||||
Total consolidated volume | 17.6 | — | 3.0 | 20.6 | 17.2% | |||||
Beer volume | 14.8 | — | 2.2 | 17.1 | 15.0 % | |||||
Non-beer volume | 1.9 | — | 0.2 | 2.1 | 8.6% | |||||
Third party products volume | 0.8 | — | 0.6 | 1.4 | 76.5% | |||||
Licensed beer volume | 0.1 | 0.2 | ||||||||
Group beer volume | 15.4 | 17.8 | ||||||||
Total consolidated volume | 62.5 | 3.0 | 3.2 | 68.7 | 5.2% | |||||
Beer volume | 56.2 | 1.4 | 3.5 | 61.1 | 6.2% | |||||
Non-beer volume | 5.4 | 1.5 | -0.9 | 6.0 | -17.1% | |||||
Third party products volume | 0.9 | — | 0.7 | 1.5 | 76.6% | |||||
Licensed beer volume | 2.4 | 2.8 | ||||||||
Group beer volume | 69.3 | 72.5 |
Note: due to rounding, this table will not always cast
1 2021 volume reflects the shift of malt-based, unfermented, non-alcoholic drinks from Beer to Non-Beer Volume. Organic growth has been corrected.
Supervisory Board Composition | |||
Mr.
A non-binding nomination for the reappointment of
A non-binding nomination for the reappointment of Mr.
Furthermore, a non-binding nomination for the reappointment of
Mr. J.G. Astaburuaga Sanjiinés will reach his maximum tenure upon conclusion of the 2022 AGM. Mr. Astaburuaga Sanjiinés’ meaningful contributions to the Supervisory Board and the Audit Committee over the past twelve years as well as his knowledge of the industry have been very valuable to the Company. Under the aforementioned Corporate Governance Agreement, FEMSA is entitled to nominate a second representative in the Supervisory Board. A non-binding nomination for the appointment of Mr.
Subject to the approval of the proposed appointment and reappointments by the AGM on
Jean-Marc Huët (Chairman)José Antonio Fernández Carbajal (Vice-Chairman)Maarten Das (Delegated Member)Michel de Carvalho Pamela Mars Wright Marion Helmes Rosemary Ripley Ingrid-Helen Arnold Nitin Paranjpe Francisco Josue Camacho Beltrán
Enquiries |
Media | Investors | |
Director of Global Communication | Investor Relations Director | |
Investor Relations Senior Analysts | ||
E-mail: pressoffice@heineken.com | E-mail: investors@heineken.com | |
Tel: +31-20-5239355 | Tel: +31-20-5239590 |
Combined financial and sustainability annual report publication | |
Trading Update for Q1 2022 | |
Annual General Meeting of Shareholders | |
Quotation ex-final dividend 2021 | |
Final dividend 2021payable | |
Half Year 2022 Results | |
Quotation ex-interim dividend 2022 | |
Interim dividend payable | |
Trading Update for Q3 2022 |
Conference Call Details | |||
HEINEKEN will host an analyst and investor video webcast about its 2021 FY results combined with an update on the on-going strategic review at
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:
All other locations: +44 20 3936 2999 |
Participation password for all countries: 589454 |
Editorial information:
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 300 international, regional, local and specialty beers and ciders. We are 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.
We employ over 82,000 employees and operate breweries, malteries, cider plants and other production facilities in more than 70 countries.
(OTCQX: HEINY) and Heineken Holding N.V. (OTCQX: HKHHY). Most recent information is available on HEINEKEN's website: www.theHEINEKENcompany.com and follow us on Twitter via @HEINEKENCorp.
Market Abuse Regulation
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Disclaimer:
This press release contains forward-looking statements with regard to the financial position and results of HEINEKEN’s activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed 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 future market and economic conditions, developments in the ongoing COVID-19 pandemic and related government measures, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, prices of commodities and other goods and services, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, 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 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
Heineken NV 2021 Full Year results press release (16_2_2022).pdf
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