Heineken Holding

Thank you, everyone, from Amsterdam. Thank you for joining us for today's live webcast of our 2025 Q1 Trading Update. Your host will be Harold van den Boek, our Chief Financial Officer. Following the presentation, we will be happy to take your questions. The presentation includes forward-looking statements and expectations based on management's current views and involve known and unknown risks and uncertainties, and it is possible that the actual results may differ materially. For more information, please refer to the disclaimer on the first page of this presentation. I will now turn the call over to Harold.

Thank you, Tristan, and welcome, everyone. Thank you for joining us today. Let me take a few minutes to give you a brief summary of the quarter and, as Tristan said, open then for questions. First slide. We delivered net revenue growth in the first quarter of almost 1%, despite operating in a challenging consumer and geopolitical environment. As anticipated and as we highlighted during our full year results, primarily due to calendar related factors, we have seen a soft start to the year with bigger volume decline to a percent. Yet we are pleased to see our evergreen strategy continue to shape our business. We maintained high quality growth with our premium portfolio and growth led by Heineken. We are also gaining or holding share in over half of our markets in the first quarter. Especially Vietnam, India, Ethiopia delivered good volume growth as a result of strategic actions taken in all of these markets to boost competitiveness. We also see continued strength of our brands in large markets such as Brazil, where we have gained volume and value share according to sellout data, and in China, where we are outperforming the market with Heineken and recently also Amstel. During the quarter, we have also seen the macroeconomic environment increasingly in flux, which require us to stay agile and proactively adapt to changing circumstances. Considering the current condition, we confirm all elements of our 2025 outlook expectations, including operating profit buyer to organically grow to 4% to 8%. Let us now look at some highlights. Net revenue Bayer came in at 6.5 billion euros, an increase of 0.9% organically, with net revenue Bayer per hectolitre increasing by 3.3%, driven by pricing to compensate for inflation and currency devaluations. Beer volume was down 2.1% organically, as said, impacted by calendar effects, like an early Tet and late Easter. Our premium beer volume grew 1.8%, and the Henneken brand was up almost 5%. The quarter one bridge provides a further breakdown of the organic growth of 59 million or 0.9% revenue buyer. Total consolidated volume on an organic basis was down 2.4%, slightly behind beer due to a decline of soft drinks in Africa. Underlying pricing was up 3.2%, primarily from pricing in Africa. Our mix was up 0.9% because of the continued premiumization of our portfolio. The translation of foreign currencies had a negative effect of 345 million, or 5%, mainly due to the strong appreciation of the euro against most of our key currencies. In particular, the Mexican peso, Brazilian real, and the Ethiopian bear. Consolidation changes were minimal this quarter. In the first quarter, we saw a continuation of our portfolio strategy, as mentioned. Premium volume grew close to 2% ahead of our total portfolio. This came from a wide range of premium brands and extensions across our regions, of course led by Heineken, but also from Kingfisher Ultra in India and stout brands like Legion in Nigeria and Murphy's in the UK. Our Heineken brand again registered a strong performance this quarter, was up 5%. Let me unpack that Heineken growth for a second. The Heineken brand saw double-digit growth in more than 25 markets, with its strongest growth in our largest markets of Brazil and China, as well as notable growth in Nigeria. Heineken 00 declined mainly due to the aforementioned Easter timing and some important phasing of orders to some key export markets we are not concerned underlying. We continue to see strong momentum with Heineken Silver growing over 30%, especially in Vietnam, benefiting from a solid debt and again, good performance in China. Then on to our results by region. And let me start with Africa and Middle East. Net revenue Bayer grew 17.6% organically, with price mix on a constant geographic basis of 20.3%, driven by strong pricing across the region. Total consolidated volume was down 1.5%, as mentioned, due to a decline in carbonated soft drinks in Central Africa and low-value wine in South Africa. Beer volume increased organically by 1.3%, led by a return to growth in Ethiopia and Egypt. Premium volume also grew, led by Nigeria, where growth was over 30%, led by Heineken, Legion and Desperados. I am pleased to see that both Nigeria and Ethiopia saw volume growth with signs of stabilizing macroeconomic conditions. Heineken Beverages, our total alcohol beverage business in East and South Africa, delivered beer volume growth, though our total volumes in South Africa declined, as our performance lagged the market, currently characterized by high promotional intensities. Moving on to the Americas. Net revenue buyer declined 2.1% organically. Total consolidated beer volume was down 3.7%, again affected by Easter timings, whilst price mix on a constant geographic basis was up 0.7%, led by the continued premiumization of our portfolio. The Mexican beer market declined slightly, mostly due to timings of Easter with our performance in line with the market, according to our estimates. We saw solid volume growth from Amstel Ultra, Dos Equis, Tecato Original and Indio. In Brazil, our volumes declined as we cycle last year's inventory build ahead of the April 1st, 2024 price increase and Easter phasing, roughly split half-half in terms of impact. On sell-out data, we gained significant volume and value share in a market in low single-digit growth. Solid growth momentum behind Heineken and Amstel continues. In the United States, we saw weakness in the market and in our volumes. Nevertheless, our Heineken 00 delivered another consecutive quarter of strong growth. Let me now turn to Asia Pacific. Net revenue Bayer increased 3.9% organically, with consolidated beer volume up by 2.3% and price mix on a constant geographic basis up 3.6%. The premium portfolio grew mid single digit, led by Heineken in Vietnam, India and Laos, but also Kingfisher Ultra in India. In Vietnam, beer volume grew in the mid teens, growing ahead of the market. We benefited from a moderate TET season, a festive event, as you know, skewed to our premium portfolio. Importantly, we have seen market growth returning to both off and on trade channels. In India, beer volume grew by a mid-single digit, continuing its growth momentum with premium volume growing in the 20s, led by Hennigan Silver and Kingfisher Ultra. In China, Heineken grew in the 20s with continued momentum of Heineken Original and Heineken Silver, significantly outperforming both the premium segment as well as the broader industry. Volume of Amstel doubled and the brand is now reaching meaningful scale. Cambodia is still in decline as we face challenging market conditions and continued increased competitiveness. And finally, a word on Europe. Net revenue buyer declined with 4.9%, with beer volume decreasing over 4.7%, impacted by both calendar effects already mentioned, but also by challenging customer negotiations, as well as a muted consumer environment. Price mix on a constant geographic basis increased 1.4%. In the UK, we continue to outperform the market with continued strong performance of Cruz Campo and expansion of Murphy's Stout in both the on and the off-premise. Western Europe saw the biggest impact of customer negotiations, which led to lower promotional activity and shorter-term retail disruptions. Volume, as a consequence, declined mid-single digit. Let me now move to the last slide, which is the outlook statement. We are dealing with a macroeconomic environment that is in flux, with many current and emerging uncertainties, such as inflationary pressures, weak consumer sentiment and imposition of tariffs in certain markets. It requires us to remain agile in our allocation of capital and resources. With over 95% of our volume produced locally, we have an advantageous brewery footprint. We are also doubling down on our productivity initiatives and focus on delivering solid operational and financial results. In terms of tariff impact, we distinguish between the direct impact, mostly related to an increased cost base for our products and an indirect impact related to the effects on global trade, currencies, disruption of country economies and derived impact on household income. All this, of course, may affect beer market growth. We have a good assessment of the direct impact and have put in place mitigating actions. We plan the year, taking different scenarios into account, and therefore based on our current assessment of risks and our ability to adapt, this impact, this direct impact, falls within our expected range. Consequently, we confirm our full year outlook of 4-8% organic growth in operating profit by year, with other key elements of our previous guidance unchanged. The indirect impact, as you will understand, is multidimensional and complex to assess at present. For instance, we have seen the euro strengthen recently compared to some of our key currencies. leading to a significant translation impact on our 2025 earnings using the spot rates of today. Of course, this has seen a lot of ups and downs in recent weeks. To close, quarter one results were within the range of expectations. We confirm our outlook guidance on key metrics, yet are cautious about the wider economic climate. With that, I'd like to open the line for Q&A.

Thank you for listening.