MS Office 97 and 2000

1
Heineken N.V. Full Year Results 2005 Presentation
2
Full Year Results 2005 Press/Analyst Presentation
22 February 2006
3
Full Year Results 2005
Jean-François van Boxmeer, Chairman Executive
Board
4
Highlights

• Organic growth in all key business metrics in
  2005
• Net profit 7.3, at the top end of our 2005FY
  profit outlook
• Revenues 2.2, driven by price, mix and volume
  improvements
• EBIT 2.9, driven by top-line growth and
  costs reductions
• Strong free cash flow generation, cash conversion
  120
• New management structure in place as per 1
  October 2005
• Focus 2006
• Heineken to further strengthen its position in
  the premium segment
• Leverage aggressively our innovations
• USA launch Premium Light, grow core Heineken
• Russia Strong market position achieved,
  accelerating integration
• Targeting 200m cost reduction by 2008

5
Consistent growth in the worlds most profitable
segment
6
Our core strategic asset the Heineken brand

• 2005 was an excellent year for Heineken
• Exceeded 20 million hectolitres in the premium
  segment for the first time
• Premium volume 4.5 in 2005 versus 4.1 in 2004
  
• Good growth in all regions
• Strengthened position in highly profitable West
  European region

Hl mn
1.5
7
Heineken is clear leader in the most profitable
market segment
Based on sales volume sold outside the home
market 2004 FY
8
Heineken Volumes, Revenues
Other brands
Heineken
9
Our leading market positions and local brands
(domestic sales)
Number 1 or 2
Number 3
Source Plato, gt 20 participations
pro-forma, on a full year basis
10
Brand portfolios

• Create strong 1 or 2 market positions
• Platform for the Heineken brand growth
• Local brand portfolio should be profitable on its
  own
• Portfolio reviews in key European and US markets
  completed, resulting in
• On average by 12 of marketing reallocated from
  non-strategic to winning brands
• Average SKU reductions by 20 (only affecting 4
  of volume), increasing efficiency in production
  and marketing

11
Leveraging aggressively our leadership in
innovation

• David Draught installations 50,000
  installations world-wide in 63 markets (15,000 in
  2005)
• BeerTender 164,000 units and over 3 million
  4-litre kegs sold in 2005, roll-out in 3 new
  markets in 2006
• DraughtKeg 2,200,000 units sold, accelerated
  roll-out to more than 30 markets, invest in
  capacity to meet demand
• Develop the non-alcohol and low-alcohol segment
  in Europe Buckler 0/0, Shandy Passion,
  Desperados Mas

12
Heineken USA Volumes 2005

• US Beer market 0.2
• Depletions of Heineken USA 1.2
• Heineken 1.9
• Amstel Light - 3.1
• Heineken had a better H2 2005
• Amstel Light recovering in Q4 2005
• FEMSA Mexican brands performed strongly at 2.2m
  hl (7.4). Including Femsa, Heineken is now the
  4th largest beer supplier in USA
• Heineken Premium Light successfully test marketed

Heineken Brewery Netherlands
Shipments stable
Heineken USA Warehouses
Sales -0.3
Independent distributors
Depletions 1.2
On-trade
Off-trade
Source Beverage Marketing
13
National roll-out of Heineken Premium Light

• Light beer 50 of US beer consumption
• Heineken Premium Light in test markets has proven
  its strong potential
• Favourable results of test markets driven by core
  Heineken brand strong reputation and perfect
  taste profile of Heineken Premium Light
• National rollout from March 2006 onwards
• Expected volume in 2006 400,000 hl
• Substantial incremental marketing budget (42m)

14
Russia
15
Russia Priorities

• Building winning brand portfolio
• Prioritise brands
• New licensed brands (Guinness, Zlaty Bazant,
  Gösser, Amstel, Bitburger)
• Reinforce distribution network combining
• Proprietary
• Independent
• Integrate organisation
• Optimise allocation of production and packaging

16

Commercial
Russia
17
Strong track record in cost control

• A successful and consistent track record in
  controlling costs
• Supply chain savings absorbed inflation
  production costs 32/hl in 2005 compared with
  36/hl in 1993
• 32 breweries closed or divested since 1993, of
  which 25 in Europe
• Reduced water consumption per hectolitre of beer
  over the last 5 years by 14 to 5.3 hl
• Reduced energy per hectolitre of beer by 10 to
  113 Mj
• TPM in 65 of 108 breweries in 2005, 80 in 2006

TPM Total Productive Management program,
aiming at minimising cost of production
18
Lowering the cost base by 200 million

• Target to reduce fixed cost (excluding
  marketing) by 200m in absolute terms in 2008
  compared to 2005 of which 65m from existing
  programmes
• In all regions and at Head Office
• In the supply chain, the commercial organisation
  (incl. wholesale) and support functions
• Global benchmarking study in the support
  functions is currently being conducted
• Better procurement and slashing general costs
• Level of FTE reduction and restructuring costs
  not yet known

19
Profit outlook for 2006

• Heineken does not expect organic growth in Net
  Profit for 2006 to exceed mid-single digits
• Heineken brand growth and implementation of the
  outcome of brand portfolio and innovations will
  drive volume and mix improvements
• 200m cost reductions targeted by 2008, main
  effects in 2007/08
• Higher oil price will affect cost of energy,
  transportation and packaging materials, only part
  of which can be passed on to the consumer
• The introduction of Heineken Premium Light in
  USA will have in 2006 a negative impact on EBIT
  of 25m
• Integration costs and the implementation of the
  brand portfolio strategy will put temporary
  pressure on results in Russia

The full text of the full-year profit outlook
for 2006 can be found in Heineken 2005 results
press release
20
Financial Review 2005
René Hooft Graafland, Member of the Executive
Board and CFO
21
Key figures 2005 (million of hl/ million)
Increase
2005
Organic growth
2004
118.6
112.6
1.8
5.3
Group beer volume
2.2
10,796
10,062
7.3
Revenues
1,283
1,369
-6.3
EBIT
1,392
1,377
1.1
EBIT beia
2.9
319
334
18.5
761
642
Net Profit
Net Profit beia
4.6
840
803
7.3
Includes exceptional items before tax in
2005 -102m ( in 2004 there was no exception
item at EBIT level) and amortisation of brands
(in 2005 7m, in 2004 8m). Includes
exceptional items after tax in 2005 -72m ( in
2004 153m) and amortisation of brands (in 2005
7m, in 2004 8m).
22
Revenues ( million)
11000
10600
0. 2
0.6 currencies
2.0 Price/mix
volumes
10200
4.5
10,796
consolidation
9800
2.2 Organic growth
10,062
9400
9000
2005 FY
2004 FY
23
EBIT (beia) ( million)
2004 FY
2005 FY
24
Increased market investments in 2005

• Incremental investments in marketing and
  innovation, in-line with the 100m as announced
  in February 2005
• Marketing and selling costs up 60 basis points to
  12.5 of Revenues
• Packaging costs increased by 4.1 due to higher
  volumes and changes in packaging mix, of which
  30m is related to new marketing and innovation
  programmes
• Depreciation increased by 6.5, of which 1.8
  organically, partly as a result of investments in
  new draught beer installations, coolers and
  filling lines for DraughtKegs and BeerTender kegs

25
Net Profit (beia) ( million)
900
0.7
850
consolidation
-3.4
800
7.3
currencies
organic growth
750
840
700
803
650
600
2004 FY
2005 FY
26
Strong Free Cash Flow Generation
...and good NWC management
Excellent cash conversion rate...
NWC Days
million
2003 data are Dutch Gaap
27
Western Europe
Volumes
27

• Underlying EBIT (beia) of the operating companies
  improved
• Heineken in premium segment 3.5
• Spain Strong market all brands up, Heineken
  7
• FranceHeineken 5, gaining share in the
  premium segment
• 50m cost reduction programme Western Europe
  24m savings achieved in 2005
• Cost saving programme in the Netherlands
  completed costs reduced by 35m
• Head count reduced by more than 1,000 FTEs

EBIT (beia)
41
28
Central and Eastern Europe
Volumes
38

• Central Europe shows robust growth
• EBIT (beia) increased due to
• Mix improvement resulting from brand portfolio
  reviews
• Significant cost savings, mainly in purchasing
• Synergy realisation at BBAG on track 55m of
  80m realised
• Heineken in premium segment 6.2
• Poland Higher EBIT driven by better price/sale
  mix and tight cost control
• Romania and Hungary Good progress in
  turn-around, profits up

EBIT (beia)
22
29
The Americas
Volumes
13

• Heineken in premium segment 1.5
• EBIT lower mainly due to forex impact (-67m)
• USA
• Depletions up 1.2, below growth rate of import
  segment
• New management Heineken USA in place
• Clear labels and new advertising introduced
• Performance improved in H2 2005
• Chile and Argentina Volumes 8, EBIT
  substantially up, Heineken grew by 22

EBIT (beia)
18
30
Africa and Middle East
Volumes
13

• EBIT improved slightly as good performance in
  Nigeria was offset by cost pressure in Egypt
• Heineken in premium segment 8.2
• Nigeria EBIT up significantly
• Portfolio review and strong pricing
• Efficiency improvements flowing through
• Egypt
• Positive volume development, but increase in
  costs
• Cost reductions in Middle East is priority for
  2006

EBIT (beia)
14
31
Asia Pacific
Volumes
9

• Heineken premium brand 12.3
• EBIT slightly up despite additional marketing
  investments
• China
• Robust volume growth in Shanghai and Hainan
• Price pressure continues
• Rest of Asia
• Profits up in all markets
• Strong Heineken growth in Vietnam (20), Taiwan
  (20)
• Investments in breweries in Mongolia and Sri Lanka

EBIT (beia)
5
32
Heineken Summary 2005

• Organic net profit growth in 2005 at the top end
  of outlook statement
• The Heineken brand exceeds 20m hl mark
• Strong cash flow generation
• Western Europe best performing international
  brewer
• Central Europe solid growth
• Focus 2006
• Heineken to further strengthen its position in
  premium segment
• Leverage aggressively our innovations
• USA launch Premium Light, Grow core Heineken
• Russia Strong market position achieved,
  accelerating integration
• Targeting 200m cost reduction by 2008

33

Commercial
34
Questions please
35
(No Transcript)
36
Appendix
37
Expanding the business Acquisitions and
Partnerships in 2005
Acquisitions and green field investments

• Würzburger, Germany

• Ivan Taranov, Russia

• Baikal, Russia

• Stepan Razin, Russia

• Patra, Russia

• United Breweries Lanka, Sri Lanka

• Jiangjsu DaFuHao, China

• MCS/APB, Mongolia (green field)

38
Information on core beer markets 2005
includes export Includes pro-rata volumes of
companies acquired and consolidated for the first
time
39
Heinekens top-selling brands 2005
40
Balance Sheet 2005 ( billion)
Assets
Equity and Liabilities
11.8
11.8
10.8
10.8
3.0
Other liabilities
2.5
Provisions and Pers. benefits
1.0
Fixed Assets
1.0
7.6
8.5
Gross fin. debt
3.3
3.6
Total Equity
3.7
4.5
2.5
2.7
Current Assets
0.6
0.7
Cash
2004
2005
2004
2005
Net debt position 2005 2,647m (2004 2,857m)
41
US Dollar Hedging
Impact million
Position USD million
Net Inflow
EBIT
Hedged Part
Net Profit
Hedged Rate
2004A
2004A
772
1.13
- 79
772
- 124
2005A
2005A
1.26
767
767
- 67
- 39
2006F
2006F
1.27
652
-1
-1
733
Assuming spot rate at 31 December 2006
corresponds with the hedging rate Hedging at
21 February 2006 Including the costs of
hedging
42
(No Transcript)