Heineken NV Financial Markets Conference 2013 Mexico City - Peter Hall

HEINEKEN FINANCIAL MARKETS CONFERENCE 2013 MEXICO CITY

Mexico City | December 5-6, 2013 | Heineken NV

HEINEKEN Americas: Winning with Brands

PETER HALL Regional Marketing Director

2

AGENDA


BRANDS AT THE CORE

Heineken® AND GLOBAL BRANDS DRIVE PREMIUM

REGIONAL POWER BRANDS FOR NORTH AMERICA

BRAND BUILDING CAPABILITIES

3

BRAND BUILDING A CORNERSTONE OF HEINEKEN’S GLOBAL STRATEGY

CONSUMER-INSPIRED, CUSTOMER-ORIENTED, BRAND-LED

EMBED & INTEGRATE SUSTAINABILITY

GROW Heineken® BRAND

1 2 CAPTURE THE OPPORTUNITIES IN EMERGING MARKETS

3 LEVERAGE THE BENEFITS OF HEINEKEN’S GLOBAL SCALE

4 DRIVE PERSONAL LEADERSHIP

5 6

The role of brand building in our global strategy

Raise the Innovation Rate

Accretive Mainstream innovation Pack / Size / Affordability

Win in Top Cities

NYC, LA, Buenos Aires, Santiago, Rio, Sao Paulo and Mexico City

Launch of Best Practices

Responsible Consumption Heineken® brand

Sunrise campaign

Grow Heineken® Disproportionately

USA volume stabilization Global Platforms

UCL James Bond Legends

Expansion in developing markets

Develop the Global Brands

Super premium expansion in Mexico and Brazil

Co-development of best practices

Step Change Marketing Capabilities

Full engagement with HEINEKEN Commerce University Local courses Master classes

4 years of Brand Building Awards

Building a common language

Building Winning Portfolios

Projects completed in Mexico, Brazil, Haiti and Bahamas

4

6.

Letting Go!

3. Drinking

with your

mates

7. Cosy

party

at home

8. Quality

Time

over Food

2. Have a

Quick Drink

5. Time for a

Small Glass

at Home

9. Everyday

Meal

4. Daily

Refreshment

1. Come

Home &

Relax

10. Relaxing

with

your mates

5. Becoming a

man

4. Adolescent

Identity Seekers

6. Quality

explorers

3. Price

Conscious

Traditionalists

7. Just Plain

Normal is More

than Enough

2. Simply

Hedonistic

1. Experienced

Calvinists

9. Le

ttin

g go!

14%

6. Sh

arin

g goo

dtim

es20

%

4. Tr

aditi

onal

cele

bra-

tion

atho

me

7%

8. Q

ualit

y tim

e ov

er

food

4%

5. So

cial

en

hanc

emen

t 15

%

3. En

hanc

e the

mom

ent

1%

2. Ev

eryd

ay re

fresh

men

t 13

%

1. Ev

eryd

ay

win

d do

wn

14%

10. R

elax

ing w

ith y

our m

ates

9%

7. Social experience

3%

INSIGHT AND SEGMENTATION MATCH BRANDS TO DIVERSE CONSUMER OCCASIONS

Needstates

Typ

olo

gie

s

5

AMERICAS REGIONAL BRAND OVERVIEW

1 Represents Licensed brands 2 Represent Partner brands Heineken® may include Heineken Light

A strong line up of local, regional and international brands

Mexico USA Brazil Canada Chile Argentina Panama Haiti Bahamas St Lucia Suriname

INTERNATIONAL PREMIUM

Heineken®

Strongbow Coors1

Heineken®

Amstel Light Strongbow

Heineken® Sol

Desperados

Heineken® Strongbow

Heineken®

Sol

Heineken® Amstel

Corona2

Heineken®

Guinness1 Heineken®

Guinness1 Heineken®

Guinness1

Heineken® Strongbow Desperados Guinness1

Heineken®

DOMESTIC PREMIUM

Bohemia

Xingu

Royal Guard Imperial2

Budweiser2

REGIONAL BRANDS

Dos Equis Tecate

Newcastle Dos Equis

Tecate

Dos Equis Newcastle

(UPPER) MAINSTREAM

Sol Indio

Cristal2 Escudo2

Schneider2 Panama

Soberana Prestige Kalik Piton Parbo

(LOWER) MAINSTREAM

Superior Carta Blanca

Kloster

Kaiser Bavaria

Palermo2 Bieckert2

Eclipse

6

AGENDA


BRANDS AT THE CORE




7


AS MARKETS DEVELOP, NEW PREMIUM SEGMENTS EMERGE

*Provincial brands indicate a sub-regional local brand that is not nationally distributed

USA Canada

Brazil Chile Argentina

Mexico Andean Caribbean

Central America Haiti

Provincial* Provincial* Provincial*

Mainstream Mainstream Mainstream Mainstream

DPS DPS

DPS DPS is Domestic Premium Segment

IPS is International Premium Segment

Price Price

Value Value

Craft

IPS IPS

Value + Price is the economy segment

TIME

BEE

R C

ON

SUM

PTIO

N,

VA

RIET

Y A

ND

CH

OIC

E

IPS

8

Heineken® IS AT THE FOREFRONT OF REGIONAL IPS DEVELOPMENT

*HKN® SOM = Heineken® brand share of total market Size of Country is determined by 2012 Heineken® Volume Source: Canadean

Unique opportunities across the Americas in both developed and developing markets

NORTH AMERICA & CARIBBEAN

CENTRAL & SOUTH AMERICA

0-2%

2-5%

5-10%

>10%

KEY

HKN® SOM*

PUERTO RICO

UNITED STATES

MEX

CANADA

CHILE

BRAZIL

ARGENTINA

9

THE USA IS AN IMPORTANT MARKET FOR THE Heineken® BRAND GLOBALLY

Source: HEINEKEN USA Depletions

Improved Heineken® volume trends over the past 3 years

2009 -9% DEPLETIONS

NV

CA

ID

AZ

CO

MT

NM

OR

UT

WA

WY

AK

HI VA

NC

WV

AL

FL

GA

SC

DC

MD

PA

NY

NJ

RI

VT

ME

DE

NH

MA

CT MI

KY

LA

AR

MN

OK

IA

IL IN

KS MO

MS

ND

NE OH

SD

TN

TX

WI

-9%

-10%

-11% or less

2012 0% DEPLETIONS

NV

CA

ID

AZ

CO

MT

NM

OR

UT

WA

WY

AK

HI VA

NC

WV

AL

FL

GA

SC

DC

MD

PA

NY

NJ

RI

VT

ME

DE

NH

MA

CT MI

KY

LA

AR

MN

OK

IA

IL IN

KS MO

MS

ND

NE OH

SD

TN

TX

WI

+1% or more

0%

-1%

-2%

10

A SIGNIFICANT OPPORTUNITY FOR IPS IN BRAZIL

Source: AC Nielsen and HEINEKEN

Current low level of segmentation in Brazil expected to result in rapid development from Domestic Premium Segment to International Premium Segment

BRAZIL BEER BY SEGMENTS Beer Market Volume (kHL)

INTERNATIONAL PREMIUM DOMESTIC PREMIUM

MAINSTREAM

ECONOMY (VALUE + PRICE)

+3.0%

+5.4%

TOTAL MARKET CAGR +4.1%

+76.8% +1.3%

CAGR

32,350 44,399

66,572 79,278

4,892

5,300

100

3,047

2007 2013F

11

17 22 18 16

21 24

Brand you can trust Innovative

2011 2012 2013 Aug5.2%

6.9%

11.1%

12.8%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2009 2010 2011 2012 2013F 2014F 2015F 2016F

DPS IPS Heineken® Share of Premium

Heineken® POISED FOR GROWTH IN BRAZIL

Source: AC Nielsen and Millward Brown

Positioning Heineken®

brand to stimulate and lead IPS growth

BRAZIL PREMIUM SEGMENT GROWTH Market Volume (k HL)

Heineken®: IMPROVING BRAND HEALTH INDICATORS (%)

19 33

22 25 24

44

SpontaneousAwareness

RegularConsumption

12

VIDEO

ROCK IN RIO

13

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

0%

2%

4%

6%

8%

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

LEVERAGING GLOBAL CAPABILITIES TO GROW Heineken® HEINEKEN can access local system strengths to further accelerate development of the Heineken® brand in joint ventures such as CCU

CHILE Heineken® SHARE OF TOTAL BEER MARKET

Price Index 150

ARGENTINA Heineken® SHARE OF TOTAL BEER MARKET

Price Index 120

Price Index 170

Price Index 110

14

A CLEAR ROLE FOR HEINEKEN’S OTHER GLOBAL BRANDS IN THE AMERICAS

DESPERADOS SOL FRENCH WEST INDIES Up to 12% share of

market in Martinique, Guadeloupe and French Guiana

BRAZIL Launched in Sao Paulo

& Curitiba in 2012, expanding to Rio in 2013

HAITI Launched in October

2013

BRAZIL Transitioning from

local Sol to the premium Global brand

CHILE Northern launch

in June 2013

MEXICO Completion of

re-launch in 2011

STRONGBOW USA Re-acquired import

rights from Vermont Hard Cider in 2012

CANADA Transitioned to

Molson distribution in June 2012

MEXICO Launched in

January 2013

15

PROVEN CAPABILITIES IN GLOBAL BRAND MANAGEMENT

Source: Nielsen FDCM+ 08/10/13

28% 28%

8% 15% 16%

37%

56%

83% 94% 97%

20

11

20

12

Jan

-13

Feb

-13

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-1

3

Aug

-13

33% 111%

321% 417%

881%

688%

857%

658%

440%

584%

20

11

20

12

Jan

-13

Feb

-13

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-1

3

Aug

-13

USA STRONGBOW VOLUME GROWTH

CARIBBEAN DESPERADOS VOLUME GROWTH

(% VS YR AGO) (% VS YR AGO)

16

AGENDA


BRANDS AT THE CORE




17

14 16 18 21 23 25 28 31 33

38 40 42 44 45 47 49 50 52 50 58

66 76

86 97

108 120

133

107 119

133 147

163 179

196

213

232

201 203 205 207 207 207 206

205 203

2010 2015 2020 2025 2030 2035 2040 2045 2050

POSITIVE DEMOGRAPHIC TRENDS TO UNDERPIN GROWTH IN MEXICAN BEER

Source 1: US Census Bureau, projections based on 2000 data Source 2: US Trade Census (http://www.census.gov/foreign-trade/balance/c2010.html)

Rising levels of economic integration between the USA and Mexico, particularly in border regions

HISPANIC POPULATION GROWTH LEADS MULTICULTURAL

MEXICO-USA TRADE APPROACHING EU-USA LEVELS

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

1997 2000 2003 2006 2009 2012

Ratio of Mexico-US Trade vs. EU-USA Trade

$157B TOTAL US-MEX TRADE $247B $235B $332B $306B $494B

WHITE NON-H

ALL MULTICULTURAL

ASIANS NON-H BLACKS NON-H

HISPANICS

18

TECATE & DOS EQUIS ARE REGIONAL POWER BRANDS

Source: Neilsen

Tecate positioned consistently across the US and Mexico; Dos Equis has achieved super premium status in the US

USA PRICE DIAMOND

PREMIUM

ABOVE MAINSTREAM

MAINSTREAM

BELOW MAINSTREAM

VALUE

MEXICO PRICE DIAMOND

PREMIUM

ABOVE MAINSTREAM

MAINSTREAM

BELOW MAINSTREAM

VALUE

19

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

Vo

lum

e (k

HL)

MexicoUSA

0

500

1.000

1.500

2.000

2.500

3.000

3.500

Vo

lum

e (k

HL)

MexicoUSA

GROWTH OF DOS EQUIS & TECATE HAS ACCELERATED

Source: Canadean

DOS EQUIS VOLUME GROWTH

TECATE VOLUME GROWTH

CAGR (2010-12) Total: 12.2%

CAGR (2010-12) Total: 11.5%

20

VIDEO

DOS EQUIS

21

DEPLOYING BRANDS WITH POWER AND CONSISTENCY IN BORDER CITIES

CRITICAL BORDER CITIES ACCOUNT FOR:

17% OF TOTAL US TECATE VOLUME

20% OF TOTAL MEXICAN TECATE VOLUME

Represents critical border cities

22

AGENDA


BRANDS AT THE CORE




23

0.9%

0.0%

0.8% 0.3%

0.0% 0.0%

0.8%

3.6%

2.9% 2.5%

5.0% 4.7%

3.3% 2.9%

Mexico Brazil USA Suriname French WestIndies

Puerto Rico Americas

2010

2013F

INCREASING THE RATE OF INNOVATION

From 1 January 2013, the innovation rate is calculated as revenues generated from innovations (introduced in the past 40 quarters for a new category, 20 quarters for a new brand and 12 quarters for all other innovation) divided by total revenue

INNOVATION RATE PROGRESS BY TOP CONTRIBUTORS Innovation Rate

24

10 30 42 43 52 58

154 177

2006 2007 2008 2009 2010 2011 2012 2013F

SUCCESS OF “BEERS OF MEXICO” INNOVATION IN THE USA

12pk can cooler pack

24pk club celebration promo pack (with INDIO)

24pk club pack

2005

12pk bottles

2012 2013 2013

VOLUME In KHL

25

BRAZIL: SALES AND ROUTE-TO-MARKET EXCELLENCE

INFORMATION, TARGETS, CONSTANT TRACKING

Establish a common language around sales KPI’s and principles

Data driven – measure execution KPI’s and drive continuous improvement

Utilize sales force automation to provide our teams with data and tools to maximize execution at POP

Consistency and attention to the basics at the core of regional sales execution

Information Targets Constant

Tracking

Right People in the Right Place Doing

Right Things

Few, Bigger, Better & Faster

Keep it Simple

KEEP IT SIMPLE Leverage and scale

global/regional best practices Prioritize trade activities

that drive sell out

FEW, BIGGER, BETTER & FASTER

Excellent Outlet Execution (EOE) as main pillar of Global Sales agenda

Drive a targeted sales capability agenda

Ensure flawless execution against priority brand programs at outlet level

RIGHT PEOPLE, RIGHT PLACE, RIGHT THINGS

Winning with key Global and Regional Customers is a priority

Focus on sales initiatives that drive the “Golden Triangle”

Cascade and align goals throughout sales organizations

26

BRAZIL ROUTE-TO-MARKET

KEY ELEMENTS

1 Identify high priority outlets for beer with low or no CSD coverage

2 Develop new roles with bottlers:

Beer-centric reps

Beer ambassadors

Beer coaches

3 Create KPIs for beer roles which are linked to variable compensation

4 First wave of markets show increased CSD sales as well as beer

OFF-PREMISE INCREMENTAL ROUTES

27

Hei

nek

en

Kais

er

Bav

aria

Hei

nek

en

Kais

er

Bav

aria

Hei

nek

en

Kais

er

Bav

aria

Bar Premium Bar Boteco Restaurante

Below On Par Above53%

5% 2%


BRAZIL: EXCELLENCE IN OUTLET EXECUTION Audit process drives attainment of in-store ‘picture of success’

PRESENCE Must have SKUs

PRICE Above, On Par or below recommended price

5%

0% 0%


PROMOTION Mandatory materials

84%

85% 79%

16%

15%

21%


Compliant Non-compliant

PLACEMENT Fridges

146 704 644

28

+8

+10

+20

+90

+7

+20

WINNING WHERE WE CHOOSE TO COMPETE

Source: Nielsen & Beer Institute

VOLUME SHARE DEVELOPMENT OCT YTD (BPS) VS LY

COUNTRY BRAND VOLUME SHARE OF

Mexico Total Portfolio Total Beer

USA Total Portfolio Total Beer

Brazil Heineken® Premium

Chile Heineken® Total Beer

Argentina Heineken® Total Beer

Canada Heineken® Total Beer

29

SUMMARY

Key Takeaways SUPERIOR BRAND BUILDING A CORNERSTONE OF HEINEKEN’S GLOBAL AND AMERICAS STRATEGY

TREND TO PREMIUM CONTINUES IN NORTH AMERICA WITH CONSIDERABLE ROOM TO GROW IN LATIN AMERICA

POWER PORTFOLIO SPEARHEADED BY HEINEKEN® COMPLEMENTED BY GLOBAL AND REGIONAL BRANDS IN NORTH AMERICA

CAPABILITY DEVELOPMENT FOCUSES ON STEP CHANGING OUR RATE OF INNOVATION AND EXCELLENCE IN OUTLET EXECUTION

COMBINATION OF THESE BUILDING BLOCKS DRIVING SHARE GAINS IN KEY MARKETS AND SEGMENTS

Documents

Heineken NV Financial Markets Conference 2013 Mexico City - Peter Hall