Heineken Holding N.V. reports on 2020 first quarter trading - Seite 2

• A significant risk of negative transactional and translational currency impacts due to the devaluation of emerging markets currencies versus the US dollar and the Euro.
• The increased risks on credit losses from customers, business continuity of small suppliers, impairments and non-effective hedge contracts.

Since the beginning, crisis management teams have been in place at a global, regional and local level, to ensure a coordinated response in regards to the health & safety of HEINEKEN's employees, business continuity and the implementation of mitigating actions.

All discretionary expenses are being reduced. In particular, international travel, corporate events and hiring for all positions have been suspended. All non-committed CAPEX has also been suspended, unless absolutely necessary for the immediate business continuity or safety. Projects and technology upgrade programmes are being temporarily paused or scaled down and will be revaluated. Furthermore, bonuses for 2020 will be cancelled for Senior Managers, including the Executive Board and the Executive Team. 

Operating companies are reducing and reallocating marketing expenses and continuously assessing effectiveness under the current environment. Consumer communication is being adapted to support activities that help on-trade customers and reflect social distancing. 

Teams are quickly reacting to business changes. Service levels to modern retailers have increased, focusing on key SKUs and shelf replenishment, including outside-store hours service and direct store delivery. Business-to-consumer initiatives are accelerated to capture the growth of e-commerce channels.

The lack of visibility on the end date of the Covid-19 pandemic and the duration of its impact on the economy has led HEINEKEN to withdraw all guidance for 2020.

FINANCING UPDATE

HEINEKEN entered the crisis with a strong balance sheet and an undrawn committed revolving credit facility of €3.5 billion maturing in 2024. There are no financial covenants in the outstanding debt. In recent weeks, HEINEKEN has successfully secured additional financing by issuing new bonds. 

• On 18 March 2020, Heineken N.V. placed CHF 100 million of 5-year Notes with a coupon of 0.6375% privately.
• On 25 March 2020, HEINEKEN placed €600 million of 5-year Notes with a coupon of 1.625% and €800 million of 10-year Notes with a coupon of 2.25%. The notes were issued under the Company's Euro Medium Term Note Programme and are listed on the Luxembourg Stock Exchange. The proceeds from the Notes issuance will be used for general corporate purposes. The maturity dates of the Notes are 30 March 2025 and 30 March 2030.

HEINEKEN is well prepared to meet its financial commitments, including the €1 billion bond maturing on 4 August 2020 and the final dividend for 2019  corresponding to €1.04 per share on 7 May 2020, subject to the approval of the Annual General Meeting on 23 April 2020.