Heineken (ADR) 2025 Annual Report

HEINEKEN N.V. REPORTS 2025 FULL YEAR RESULTS Well-balanced performance in challenging market conditions Growth: Quality volume and mix with market share gains in subdued market conditions ▪Total volume declined 1.2%, with consolidated volume down 2.1%, and licensed volume up 17.8%.▪Heineken®volume grew 2.7%, global brands volume grew 1.9%.▪Net revenue grew 1.6%, net revenue per hectolitre up 3.8%. Profitability: Strong productivity gains enabling margin expansion ▪Gross savings in excess of €500 million, with an increased flow-through to profit.▪Operating profit grew 4.4% with operating profit margin expanding 41 bps to 15.2%.▪Diluted Earnings per Share (EPS) of €4.78, up 3.6% (2024: €4.89). Capital Efficiency: Another year of solid cash flow generation, with improved ROIC ▪Free Operating Cash Flow of €2.6 billion, translating into a cash conversion ratio of 87%.▪Return on Invested Capital (ROIC) absolute increase of 57 bps to 22.7%, incl goodwill & intangibles up 21 bps to 9.4%.▪Completed first tranche of the €1.5 billion share buyback programme, second €750 million tranche to start shortly.▪Dividend of €1.90 per share proposed. Dividend payout policy to be expanded to the range of 30% to 50%. 2026: Accelerating the disciplined execution of EverGreen 2030, integrating FIFCO ▪Increasing investment in growth focused on global brands, faster innovation and sharper execution.▪Accelerating productivity at scale to unlock significant savings, reducing 5,000 to 6,000 roles over next two years.▪Integrating FIFCO beverage and retail businesses in Central America, expected to be immediately accretive to EPS.▪Anticipating FY2026 operating profit to grow in the range of 2% to 6%. DOLF VAN DEN BRINK, CEO, COMMENTED: “In 2025, we delivered a resilient and well-balanced performance. We gained share, drove cost and cash productivity, andincreased investment behind our brands. Combined with agility and our advantaged footprint, this helped us navigatevolatility and deliver within our guidance range. We reinforced our footprint through the acquisition of FIFCO in Central As EverGreen 2025 concludes, we have made meaningful progress and advanced major transformations that strengthenour fundamentals. EverGreen 2030 builds on this with a sharper strategy, clearer resource allocation, and a stronger focus Now we pivot to the disciplined execution of EverGreen 2030. Our first priority is to accelerate growth, funded by steppedup productivity and operating model changes that will involve a significant cost intervention over the next two years. Thiswill unlock stronger people productivity and enable greater speed and efficiency. At the same time, we remain prudent in OPERATIONAL REVIEW Beer category dynamics varied meaningfully across our markets in 2025. In many of our key value and advancingmarkets, such as Vietnam, Ethiopia and South Africa, the category expanded, driven by rising penetration, growingconsumption and continued premiumisation, all structural drivers of growth. Despite the macro-economic and geopoliticaluncertainties, the Mexican beer category remained resilient and stable. Category momentum was impacted bypredominantly cyclical factors in Brazil, where consumer demand weakened with declining real disposable income and Against this backdrop, we delivered strong financial results in many of our important growth markets. Vietnam, Myanmar,China, South Africa, and Ethiopia all recorded excellent growth, supported by disciplined execution and sustainedinvestment behind our brands. In Europe, the UK stood out with a good performance in a challenging environment. Thesegains were partly offset by a market inventory adjustment and weaker volume in Brazil driven by softer than expected In the year, we accelerated our aggregated global market share. In over 60% of our markets, including over 80% of ourpriority growth markets, we gained or held share by improving the competitiveness of our portfolio, distributor and salescapabilities and data driven commercial execution. Our market share expanded in the Americas, Africa & Middle East, and Our brands continued to benefit from disciplined investment and strong consumer equity. Premium brands grew, withglobal brands growing faster still, and Heineken®and Amstel delivering the strongest growth. We invested in further With volume pressure in some regions, our productivity programme was instrumental in driving organic profit growth andoperating margin expansion. The Africa & Middle East region led the way, as the flow-through of savings delivered in thisand past years came through strongly, helping to offset volatility in several other markets. As a result, despite the We delivered another year of strong cash flow, solid cash conversion and an improvement in ROIC, underpinned bydisciplined capital allocation and tighter working capital management. FY2025 marked the conclusion of our EverGreen 2025 strategy, which has guided the transformation of our company, l