• Organic revenue +4.8% with revenue per hectolitre up 2.2%1
  • Consolidated beer volume +3.0% with growth in Americas, Asia Pacific and Europe offsetting weaker volume in Africa, Middle East & Eastern Europe
  • Heineken® volume in premium segment +3.7%
  • Operating profit (beia) +9.9% organically and operating margin +54bps1
  • Net profit (beia) of €2,098 million, up 8.5% organically
  • Diluted EPS (beia) of €3.68 (2015: €3.57) up 2.9%
  • Proposed 2016 total dividend up 3.1% at €1.34 per share (2015: €1.30)
CEO STATEMENT
Jean-François van Boxmeer, CEO, Chairman of the Executive Board, commented:
«We delivered strong results in 2016, with clear outperformance of our premium brand portfolio led by Heineken®, and sustained momentum from our innovation agenda. Our unique diversified footprint was again a competitive advantage, enabling us to deliver more than 50 basis points margin expansion, despite more challenging economic conditions in some developing markets and significant currency pressures. Performance in key European markets was good and results in Vietnam and Mexico were strong. In Africa, Middle East & Eastern Europe market conditions remained tough, most notably in Nigeria, DRC and Russia. Excluding major unforeseen macro economic and political developments as well as the impact of the proposed acquisitions in Brazil and in the UK, we expect continued margin expansion in 2017 in line with our previous guidance.»
1 Excluding an accounting adjustment in the UK in 2H16 with no impact on operating profit, HEINEKEN organic revenue growth would have been +4.4%, organic revenue per hl +1.7% and operating margin (beia) +61bps. For the impact on Europe please refer to page 11.   
2 Consolidated figures are used throughout this report, unless otherwise stated; please refer to the Glossary section for an explanation of non-GAAP measures and other terms used throughout this report.
3 Includes acquisitions and excludes disposals on a 12 month pro-forma basis.
 
FULL YEAR 2017 OUTLOOK STATEMENT
  • Economic conditions are expected to remain volatile and we have assumed a negative impact from currency comparable to 2016.
  • We expect further organic revenue and profit growth.
  • Excluding major unforeseen macro economic and political developments as well as the impact of the proposed acquisitions in Brazil and in the UK, we expect continued margin expansion in 2017 in line with the medium term margin guidance of a year on year improvement in operating profit (beia) margin of around 40bps.
  • We expect an average interest rate broadly in line with 2016 (2016: 3.1%), and an effective tax rate (beia) also broadly in line with 2016 (2016: 28.3%).
  • Capital expenditure related to property, plant and equipment should be slightly below €2 billion (2016: €1.8 billion).
 
OPERATIONAL REVIEW
After a strong first half and in line with our guidance, operating profit (beia) growth slowed in the second half reflecting tougher comparatives, increased currency headwinds as well as further challenging economic conditions in some developing markets. In the full year, strong performance in Americas, Europe and Asia Pacific more than offset weaker performance in Africa, Middle East & Eastern Europe where both the difficult economic backdrop and currency pressure adversely impacted results. Revenue per hectolitre improved organically, with a positive contribution from both price and mix.
HEINEKEN continues to invest in key developing markets and in 2016 entered new countries including Ivory Coast and the Philippines, and expanded production capacity in China, Vietnam, Ethiopia and Cambodia.
Revenue increased 4.8% organically, with a 2.6% increase in total volume and a 2.2% increase in revenue per hectolitre. In 2016 the underlying price mix impact was 1.7%. In the second half revenue increased 5.0% (1H16: 4.7%), with volume growth of 1.5% (1H16: 3.8%), revenue per hectolitre up 3.4% (1H16: 0.8%) and underlying price mix impact of 2.6%.
Heineken®volume in the premium segment grew 3.7%, with positive volume performance across all regions. Volume grew double digit in Brazil, South Africa, Mexico, the UK and Romania. Brand growth was also strong in France, China, Italy, Spain and Taiwan. These results more than offset weaker volume in Russia, the US, Thailand and Greece. Heineken® continued to benefit from global platforms including UEFA Champions League, the Cities, Product Stories and Music campaigns. In September 2016 HEINEKEN started a new global partnership with Formula 1® which will allow us to reach new consumers. Additionally new innovations included the ‘wild lager’ beers H41 and H71, launched in a selected number of European markets. Heineken® Light was launched in Ireland and New Zealand, piloted in Greece and Switzerland and introduced in Australia as Heineken® 3.
The international brand portfolio, which includes brands complementary to Heineken® and with high potential to travel across geographies, outperformed. Volume was up double digit forAffligem, Sol Premium, Lagunitas, Red Stripe, TecateandTigerbrands.Desperados and Krušovicevolume grew high single digit andAmstelmid single digit.
Cidervolume increased mid single digit, with double digit volume growth in the first half and single digit volume growth in the second half. Strongbow, our international cider brand continued to outperform. In the UK, the home base of cider, we continued to gain market share driven by the ongoing success of Strongbow Dark Fruit, Strongbow Cloudy Apple and Old Mout. Outside the UK, cider delivered double digit volume growth. During the year we introduced Orchard Thieves in five markets. In Ireland Orchard Thieves continued to outperform the market. In Romania, Czech Republic and Poland there was also good volume growth. In Africa, Middle East & Eastern Europe, South Africa and Russia saw positive cider performance. Mexico was the main contributor to cider growth in the Americas. In Asia Pacific, Strongbow which is now available in five markets, showed encouraging early signs.
Innovationcontinued to positively contribute to results, generating €2.2 billion in revenue with an implied innovation rate of 10.6% (2015: 9.2%). There were a number of launches in 2016 in low and no alcohol, with Amstel 0.0% and Cruzcampo 0.0% in Spain, Zywiec alcohol free in Poland and Bintang 0.0% Maxx in Indonesia. In craft and variety Mort Subite, Birra Moretti Regionali, and Zywiec variants all continued to excite the consumers and drive volume.
Operating profit (beia)grew 9.9% organically, primarily reflecting higher revenue and cost efficiencies.
SUSTAINABILITY
We believe business growth and sustainability go hand in hand. This is why our sustainability agenda, Brewing a Better World, is embedded in our business strategy. In 2016 HEINEKEN continued to make significant progress. Highlights included decreasing our water consumption to 3.6 hl/hl from 3.7 hl/hl in the previous year resulting in 28% decline since 2008, the baseline year for our 2020 commitments. For breweries in water scarce areas we have already reached our 2020 target of 3.3 hl/hl. We also reduced our CO²emissions to 6.5 kg CO²e/hl down from 6.7 kg CO²e/hl in 2015 (representing a 37% decline since 2008). We continued to advocate responsible consumption by investing in our ‘When you drive, never drink’ campaign through the new Formula 1® global platform, and the’Moderate Drinkers Wanted’ campaign. Our safety performance also improved significantly. HEINEKEN will publish its first combined financial and sustainability annual report on 22 February 2017.
NET PROFIT
Net profit (beia) increased 8.5% organically to €2,098 million.
Exceptionals included an asset impairment in the Democratic Republic of Congo (DRC) of €286 million, with €233 million in the first half and an additional €53 million in the second half of the year.
Net profit after exceptionals was €1,540 million (2015: €1,892 million). In 2015 net profit included an exceptional gain of €379 million from the sale of EMPAQUE in Mexico.
TOTAL DIVIDEND FOR 2016
The Heineken N.V. dividend policy is to pay out a ratio of 30% to 40% of full year net profit (beia). For 2016, payment of a total cash dividend of €1.34 per share (2015: €1.30) will be proposed to the Annual General Meeting. This implies a 36% payout ratio, in line with the payout ratio in 2015. If approved, a final dividend of €0.82 per share will be paid on 3 May 2017, as an interim dividend of €0.52 per share was paid on 11 August 2016. The payment will be subject to a 15% Dutch withholding tax. The ex-final dividend date for Heineken N.V. shares will be 24 April 2017.
TRANSLATIONAL CURRENCY CALCULATED IMPACT FOR 2017
Using spot rates as at 9 February 2017 for the remainder of this year, the calculated negative currency translational impact would be approximately €75 million at consolidated operating profit (beia), and €30 million at net profit (beia). Foreign exchange markets remain very volatile.
ACQUISITION OF BRASIL KIRIN HOLDING S.A.
On 13 February 2017 HEINEKEN announced that it had entered into an agreement with Kirin Holdings Company, Limited («Kirin») to acquire Brasil Kirin Holding S.A. («Brasil Kirin»), one of the largest beer and soft drinks producers in Brazil. The transaction will transform HEINEKEN’s existing business across the country by extending its footprint, increasing scale and further strengthening its brand portfolio. On closing, HEINEKEN will become the second largest beer company in Brazil, with a stronger commercial platform from which to capture future profitable growth in an exciting beer market. Further details can be found in the HEINEKEN N.V. release dated 13 February 2017.
PROPOSED ACQUISITION OF PUNCH
On 15 December 2016 HEINEKEN announced that following Vine Acquisitions Limited’s announcement of a recommended cash offer for Punch Taverns plc, HEINEKEN through HEINEKEN UK had agreed a back-to-back deal with Vine Acquisitions to acquire Punch Securitisation A (‘Punch A’), comprising approximately 1,900 pubs across the UK.
On 10 February 2017 Punch Shareholders voted in favour of the Scheme at the Court Meeting and that the special resolution proposed at the General Meeting was passed.

The Acquisition remains subject to the satisfaction or (where capable of being waived) waiver of the other Conditions set out in the Scheme Document, including the Court sanctioning the Scheme at the Court Hearing. Subject to being approved by the relevant regulatory authorities, the Acquisition is expected to become effective by the end of the first half of 2017. Further detail can be found in the HEINEKEN N.V. release dated 15 December 2016.
SUPERVISORY BOARD COMPOSITION
Messrs. Maarten Das, Christophe Navarre and Henk Scheffers will resign by rotation from the Supervisory Board at the Annual General Meeting (AGM) on 20 April 2017. Messrs. Das and Navarre are eligible for re-appointment for a period of four years and a non-binding nomination for their re-appointment will be submitted to the AGM. Mr. Scheffers has informed the Supervisory Board that he will not seek a further term as member of the Supervisory Board. The Supervisory Board is grateful for Mr. Scheffers’ commitment over the past four years and for his contributions to the Supervisory Board and as Chairman of the Audit Committee.
Heineken N.V. reports 2016 full year results