Heineken : Holding N.V. reports 2015 half year results

Continued organic revenue and profit growth

Amsterdam, 3 August 2015 - Heineken Holding N.V. (EURONEXT: HEIO; OTCQX: HKHHY) today announces:

• The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for the first half year of 2015 amounts to €576 million
• Group revenue +2.0% organically with group revenue per hectolitre up 1.1%
• Group beer volume +1.0% driven by Americas, Asia Pacific and Africa Middle East
• Heineken® volume in premium segment +4.7%  with growth across most regions
• Innovation rate of 8.6%, contributing €854 million of revenues
• Group operating profit (beia) +4.7% organically
• Consolidated operating profit (beia) +3.4% organically
• Net profit (beia) of €915 million, up 14% organically

FINANCIAL SUMMARY

¹ Refer to the Glossary section for an explanation of non-IFRS measures and other terms used throughout this report
² Includes acquisitions and excludes disposals on a 12 month pro-forma basis

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.

OUTLOOK STATEMENT

(Based on consolidated reporting)
Aside from an adjustment for capital expenditure guidance HEINEKEN reaffirms all elements of its 2015 outlook, as stated in its FY 2014 release dated 11 February 2015.

In 2015 HEINEKEN expects a continued challenging external environment, however, delivering on strategic priorities is expected to drive further organic revenue and profit growth.

Continued revenue growth: HEINEKEN expects positive organic revenue growth in 2015 with volume growth at a more moderate level than 2014, and weighted towards H2 (tougher comparatives in H1).  Continued volume growth in developing markets will offset more subdued volume growth elsewhere. Revenue per hectolitre is expected to increase driven by revenue management. Pricing will be limited by deflationary and off premise pressure in some markets.

Increased commercial investment: HEINEKEN will continue its targeted higher commercial investments across the regions, and expects a slight increase in marketing and selling (beia) spend as a percentage of revenue in 2015 (2014: 12.7%).

Continued cost savings: HEINEKEN is committed to delivering further cost savings and will continue its focus on driving cost efficiencies across the Group. These are an important driver of the medium term margin guidance. As a result of ongoing productivity initiatives, HEINEKEN expects an organic decline in the total number of employees in 2015.
Input cost prices are expected to be slightly lower in 2015 (excluding a foreign currency transactional effect).

Further margin expansion: HEINEKEN continues to target a year on year improvement in consolidated operating profit (beia) margin of around 40bps in the medium term. This will continue to be supported by tight cost management, effective revenue management and the anticipated faster growth of higher margin developing markets. In 2015 consolidated operating profit (beia) margin will be adversely impacted by approximately 25bps from the disposal of EMPAQUE, the Mexican packaging business, which completed in February. HEINEKEN expects to partially but not fully offset this, such that in 2015 consolidated operating profit (beia) margin expansion will be somewhat below the 40bps medium term level.

Foreign currency movements: Assuming spot rates as of 29 July 2015 there is no material change in the calculated positive 2015 currency translational impact compared to prior guidance. As such consolidated operating profit (beia) impact is expected to be approximately €130 million, and €80 million at net profit (beia). However the foreign exchange markets remain very volatile.

Improved financial flexibility: HEINEKEN remains focused on cash flow generation and disciplined working capital management, with a commitment to a long-term target net debt/ EBITDA (beia) ratio of below 2.5x. In 2015, capital expenditure related to property, plant and equipment is now expected to be approximately €1.7 billion (2014: €1.5 billion), with the €100 million increase from the prior guidance due to foreign exchange. A cash conversion ratio of below 100% is expected in 2015 (2014: 79%).

Effective tax rate: HEINEKEN expects the effective tax rate (beia) for 2015 to be broadly in line with 2014 (29.7%).

Interest rate: HEINEKEN forecasts an average interest rate of c.3.7% in 2015.

Interim Dividend

According to the articles of association of Heineken Holding N.V. both Heineken Holding N.V. and Heineken N.V. pay an identical dividend per share.

In accordance with the existing dividend policy, HEINEKEN fixes its interim dividend at 40% of the total dividend of the previous year. As a result, an interim dividend of €0.44 per share of €1.60 nominal value will be paid on 12 August 2015. Both the Heineken Holding N.V. ordinary shares and the Heineken N.V. shares will trade ex-dividend on 5 August 2015.

Enquiries

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

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

Conference call details
Heineken N.V. will host an analyst and investor conference call in relation to this trading update today at 10:00 CET/ 9:00 BST. This call will also be accessible for Heineken Holding N.V. shareholders. The call will be audio cast live via the website: www.theheinekencompany.com/investors/webcasts:
http://www.theheinekencompany.com/investors/webcasts. An audio replay service will also be made available after the conference call at the above web address. Analysts and investors can dial-in using the following telephone numbers:

United States of America
Local line: +1 646 254 3361
National free phone: 1 877 280 2296

Participation/ confirmation code for all countries: 2083527


Editorial information:
HEINEKEN is the world's most international brewer. It is the leading developer and marketer of premium beer and cider brands. Led by the Heineken® brand, the Group has a powerful portfolio of more than 250 international, regional, local and specialty beers and ciders. HEINEKEN is committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through "Brewing a Better World", sustainability is embedded in the business and delivers value for all stakeholders. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets. HEINEKEN employs 81,000 people and operates more than 160 breweries in 70 countries. Heineken N.V. and Heineken Holding N.V. shares trade on the Euronext in Amsterdam. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIA NA and HEIO NA and on Reuters under HEIN.AS and HEIO.AS. HEINEKEN has two sponsored level 1 American Depositary Receipt (ADR) programmes: Heineken N.V. (OTCQX: HEINY) and Heineken Holding N.V. (OTCQX: HKHHY). Most recent information is available on the website: www.theHEINEKENcompany.com:
http://www.theHEINEKENcompany.com and follow HEINEKEN via @HEINEKENCorp.
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.

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, 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, 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.