Heineken Holding N.V. reports solid operating performance for the first half 2011

Amsterdam, 24 August 2011 - Heineken Holding N.V. today announced:

• The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for the first half of 2011 turned out at €303 million;
• Organic growth in group beer volume of 4.2% with higher volume across all regions. Volume of the Heineken® brand in the premium segment increased 4.7%, led by growth in Asia Pacific and Western Europe;
• On an organic basis, revenue grew 3.3%, driven by a positive volume effect of 2.2% and increased price and sales mix of 1.1%;
• Organically, EBIT (beia) grew 3.9%, as an increase in revenues, cost savings and higher profit from joint ventures was partially offset by planned higher marketing investment and increased input costs;
• Net profit (beia) of €694 million (+5.7% organic growth), reflecting higher EBIT (beia) and lower interest expenses, partly offset by higher taxation expense. Reported net profit Heineken N.V. declined 14%, primarily reflecting a significant exceptional gain last year;
• Total Cost Management (TCM) programme delivered €82 million of pre-tax savings in the first half 2011;
• Strong free operating cash flow generation of €779 million, resulting in an improved net debt/EBITDA (beia) ratio of 2.1x;
• Interim dividend of €0.30 per ordinary share, an increase of 15% compared with last year's interim dividend.

[1] For an explanation of the terms used please refer to the Glossary in the Appendix. Unless otherwise stated, any reference to volume growth rates throughout the release relate to group beer volume.
[2] 2010 financials at group and region level have been restated for a change in accounting policy and/or segment reporting. Refer to Scope and Accounting changes under the Financial Review section for details.
[3] This new metric has been introduced to aid investor understanding of total volume performance and revenue development. Total consolidated volume is defined as 'Volume produced and sold by fully consolidated companies (including beer, cider, soft drinks and other beverages), volume of third party products and volume of Heineken's brands produced and sold under license by third parties'.
[4] Including acquisitions 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 and supervision of and provision of services to that company.

2011 Full Year Outlook

Heineken expects trading conditions in Latin America, Sub-Saharan Africa and Asia Pacific to benefit from a continued positive economic environment. Volume development in parts of Europe and the USA is expected to remain challenging given the current economic uncertainty, high unemployment and ongoing weak consumer confidence.

Heineken expects a slightly higher rate of input cost inflation in the second half of the year (compared with the first half of 2011). For the full year, Heineken continues to expect a low single-digit increase in input costs (on a per hectolitre basis). Heineken will continue its focus on long-term brand building through higher marketing investment. In the second half of the year marketing and selling (beia) expense, on an organic basis, is expected to increase by low single-digits, compared with the second half of 2010.

The current 3-year TCM programme covering the period 2009 to 2011 is expected to deliver further cost savings in the second half of the year. With a culture of continuous improvement now firmly embedded across its business, Heineken plans to introduce We plan announce sdfuintrouda new 3 year cost saving programme from the beginning of 2012. A key initiative involves the formation of a Global Business Services organisation that will enable Heineken to better leverage the scale of its global operations. Investment in this new global function is expected to give rise to additional efficiency benefits and support profitability in future years.

For 2011, gross capital expenditure related to property, plant and equipment is forecast to be approximately €800 million.

Heineken does not expect material changes to the effective tax rate (beia) in 2011 (2010: 27.3%). The effective tax rate (beia) in the second half of 2011 will be slightly lower than the rate in the second half of 2010. Heineken forecasts an average interest rate of around 5.5% for 2011.

Heineken is targeting a cash conversion rate of around 100% for the full year 2011, supported by strong cash flow generation and disciplined capital allocation.

Heineken has witnessed volume weakness in the high-selling season of July and early August 2011, reflecting poor weather conditions in Europe in combination with lower consumer confidence in some key markets. This will affect second half 2011 volume and profit performance and therefore Heineken expects full year net profit (beia), on an organic basis, to be broadly in line with last year. Heineken remains confident that its highly diversified geographic footprint, ongoing cost saving programmes and higher investment in long-term brand building initiatives will support growth in future years.

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.
Following the existing dividend policy, Heineken N.V. fixes its interim dividend at 40% of the total dividend of the previous year.
As a result, an interim dividend of €0.30 per share of €1.60 nominal value will be paid on
6 September 2011. Both the Heineken Holding N.V. ordinary shares and the Heineken N.V. shares will trade ex-dividend on 26 August 2011.

Attachment: Half-year report and Glossary

Editorial information:
Heineken N.V.  is one of the world's great brewers and is committed to growth and remaining independent. The brand that bears the founder's family name - Heineken - is available in almost every country on the globe and is the world's most valuable international premium beer brand. Heineken's aim is to be a leading brewer in each of the markets in which it operates and to have the world's most valuable brand portfolio. Heineken N.V. is present in over 70 countries and operates 140 breweries with volume of 205 million hectolitres of beer sold on a pro-forma basis. Heineken is Europe's largest brewer and the world's third largest by volume. Heineken is committed to the responsible marketing and consumption of its more than 200 international premium, regional, local and specialty beers and ciders. These include Amstel, Birra Moretti, Cruzcampo, Dos Equis, Foster's, Kingfisher, Newcastle Brown Ale, Ochota, Primus, Sagres, Sol, Star, Strongbow, Tecate, Tiger and Zywiec. On a 2010 pro-forma basis, including FEMSA Cerveza, revenue totalled €17 billion and EBIT (beia) was €2.7 billion. The average number of people employed is more than 70,000. Heineken N.V. and Heineken Holding N.V. shares are listed on the Amsterdam stock exchange. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIA NA and HEIO NA and on the Reuter Equities 2000 Service under HEIN.AS and HEIO.AS. Most recent information is available on Heineken's website: www.heinekeninternational.com.

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, 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 are only relevant as of the date of this press release. Heineken does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of these statements. Market share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination with management estimates.