Heineken Holding N.V. reports strong organic net profit growth of 12.6% for 2006

Amsterdam, 21 February 2007 - Heineken Holding N.V. today announced strong organic net profit growth of 12.6% for the full year 2006, a significant improvement compared to 2005. Heineken delivered organic growth across all key business metrics and regions. Heineken expects continued strong performance in 2007 with organic net profit growth in the range of 10-13%.

For 2006 Heineken proposes a dividend of €0.60 per share, an increase of 50% compared with 2005. This is subject to Heineken N.V. shareholder approval at the Annual General Meeting of Heineken N.V. on 19 April 2007. Heineken Holding N.V. will pay an identical dividend.

 

 

        The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for 2006 amounts to €606 million.

        Strong profit growth: Net profit (beia) grew 12.6% organically and EBIT (beia) was up 10.7% organically. Net profit of Heineken N.V. was 59.1% higher reflecting in part €291 million of exceptional items, mainly related to book gains, compared with exceptional costs of €72 million in 2005.

 

        Accelerated top-line growth: Revenue grew 7.1% organically driven by higher volumes, better pricing and improvement in sales mix. Consolidated beer volume grew 11.3% to 111.9 million hectolitres; of this 6.9% was organic and 4.4% the effect of first-time consolidations.

 

        Accelerated Heineken® brand growth: The Heineken brand in the international premium segment grew 11.8% to 22.5 million hectolitres and achieved its biggest increase since the 1980's. The brand also increased its share in the segment and grew in every region. The successful launch of Heineken Premium Light in the USA added 680,000 hectolitres.

 

        Aggressive rollout of innovations: Innovation in packaging and beer types contributed to revenue growth. In particular DraughtKeg developed well, selling 5.4 million units in 2006. In total 62,000 David draught beer systems have been installed since its introduction.

 

        Russian integration completed: The integration of the 10 breweries was completed ahead of plan. Beer volume grew more than 10% organically, driven by portfolio optimisation and premium brands. Beer volume reached 13 million hectolitres.

 

        Accelerated efficiency gains: The Fit2Fight programme delivered gross cost savings before tax of €114 million in 2006. At the start of the programme, the cumulative effect of inflation on the F2F cost base over the three-years of the programme was estimated at €160 million. Heineken has revised the impact of cumulated inflation upwards by €90 million, which will be offset by additional savings, already identified. Gross F2F-savings will therefore total €450 million by 2008, resulting in net savings in-line with the original net cost savings objective of the programme.

 

Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management and supervision of and provision of services to that company.

 

 

Heineken Holding N.V. expects to achieve organic growth in net profit in the range of 10-13% in 2007. For further information on the profit outlook reference is made to the 2006 press release of Heineken N.V.

 

 

The Annual General Meeting of Shareholders of Heineken N.V. on 19 April 2007 will be asked to approve the distribution of a cash dividend of  €0.60 per share of  €1.60 nominal value, an increase of 50%. This represents a dividend payout ratio of 31.6%, which is in-line with the proposed new dividend policy, which targets a payout of 30-35% of Net profit (beia). As an interim dividend of €0.16 per share was paid on 20 September 2006, the final dividend will be €0.44 per share, which will be subject to a 15% Dutch withholding tax.