Heineken Stock

Hello, everybody, and welcome to the Heineken N.V. Q3 2026 Trading Update. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions] I would now like to hand over to Tristan Van Strien, Director of Investor Relations. Please go ahead.

Thank you, Elliot. Good morning, good afternoon and good evening, everyone, from bright and crisp Amsterdam today. Thank you for joining us for today's live webcast on our third quarter 2026 trading update. Your host will be our Chief Financial Officer and member of the Executive Board, Harold van den Broek. Following the presentation, we will be happy to take your questions.

The presentation includes expectations based on management's current views and involve known and unknown risks and uncertainties, and it is possible that the actual results may differ materially. For more information, please refer to the disclaimer on the first page of this presentation, which should be on your screen. I will now turn over the call to Harold.

Thank you, Tristan, and a very good day to you all. What a great picture to start with. I'm pleased that Rafa joined us as CEO on October 1 and is engaging fully with Heineken, as you can see. As you would expect, he'll be listening, learning and reflecting over the next few months and will share more of his perspective when we report our full year results in February. So I'm happy to host you for this quarter 3 trading update.

Let me start with the highlights of the quarter. We delivered volume and revenue growth across all 4 regions, driven by priority markets, segments and our global brands. Africa and Middle East delivered another quarter of resilient growth, while Asia Pacific continued its momentum. Europe continued with a return to volume growth, while the Americas returned to volume growth this quarter, both admittedly on softer comparatives. We also execute at pace on our EverGreen 2030 priorities with accelerating innovation, stronger commercial execution and simplification of our operating model. Against the broadly unchanged trading environment, we confirm our full year operating profit growth guidance on operating profit growth of between 2% and 6%.

Turning to the key metrics. In the third quarter, total volume grew 4.8% and net revenue increased 4.6%. Net revenue per hectoliter was up 0.7%, and I will expand on this later. Our premium and global brands portfolio grew double digit. For the first 9 months, total volume increased 2.7% and net revenue grew 3.4%. Net revenue per hectoliter was up 1.7%. And year-to-date, premium volume and global brands grew circa 8% and 7%, respectively. Overall, we consider this to be a solid quarter.

Let us now look at the net revenue in a little bit more detail. Net revenue for the quarter increased organically by 4.6% to EUR 8.1 billion. The organic increase was EUR 360 million -- EUR 336 million with EUR 286 million from consolidated volume and EUR 50 million from price/mix. Just for reference, and you know this is not how we report, but license volume growth would add about 20 to 30 basis points revenue for the quarter and 60, 70 basis points for the year-to-date.

Turning to our pricing, where we consciously invest for the value-seeking consumer in selected markets and segments. This is partly why you see a lower contribution in the bar on this slide as our net revenue per hectoliter grew 0.7%, as previously mentioned. An important other factor is the negative country mix, particularly driven by the strong growth in Asia Pacific, such as Vietnam and India, where revenue per hectoliter is below the group average. On a constant geographic basis, price/mix was 1.8%, and that's a more accurate reference of our price/mix delivery market by market. Consolidation changes, particularly the integration of Costa Rica, added EUR 182 million and currency translation contributed EUR 241 million, mostly due to a stronger Mexican peso, Brazilian real, Nigerian naira and South African rand.

Moving to the composition and quality of our growth. Our mainstream portfolio grew in the quarter with our local power brands outperforming the segment, led by Cruzcampo in the U.K., Bedele and Harar in Ethiopia and Kingfisher in India. Heineken had another strong quarter with double-digit growth in 22 markets. Heineken Ultimate 3.5% built further momentum in Brazil, broadening the brand's proposition with a lower alcohol, lower calorie and gluten-free beer. Heineken 0.0 grew strongly with double-digit growth in 26 markets with encouraging contribution from recent flavor extensions. More broadly, we recorded double-digit growth in low and no alcohol with innovative launches across the portfolio and strong performance from Fayrouz in Egypt and Sol Zero in Brazil. Beyond beer volume grew in the teens, driven by Bernini in South Africa and cider in the U.K.

If I can spend a word on global brands, which are Heineken, Amstel, Birra Moretti, Tiger and Desperados. All 5 brands grew in the quarter and in aggregate, were up circa 10%. Heineken grew around 10% with particularly strong momentum from Heineken Silver in Vietnam and China, while in Brazil, the brand returned to double-digit growth. Tiger grew more than 20%, supported by Tiger Crystal and strong execution across Asia. Amstel grew by high single digit, led by Brazil, China and South Africa, and we extended our partnership with CONMEBOL Libertadores, leveraging the passion for football across Latin America to further build the brand. Birra Moretti and Desperados also delivered volume growth.

If I now move to the regions and starting with Africa and Middle East. The region delivered another strong quarter of resilient growth, led by Ethiopia and South Africa. Net revenue increased 6.8%. Total volume grew 4.3%, and price/mix on a constant geographic basis was up 3.6%. In Nigeria, macro circumstances continue to weigh on the consumer, leading to subdued market conditions for our portfolio. Against this backdrop, we gained share and slowly, we are seeing some gradual improvement in the economic environment. Within premium, Heineken and Desperados continued to perform well. South Africa continued to benefit from the strength of our multi-category portfolio. Our beer brands, Heineken, Amstel and Windhoek all grew in the quarter. Bernini remained strong in RTDs, ready-to-drinks, and Klipdrift performed well in spirits.

Ethiopia again was a strong performer with strong double-digit revenue and volume growth, further building our leadership position. Bedele, Harar and Heineken all contributed to this performance. Our business remains vigilant, considering the threat of tensions in north of the country. And if we now move to the Americas. As anticipated, this region returned to volume and revenue growth in the quarter, admittedly on softer comparatives. Net revenue increased by 3.1%, and total volume grew 2.1%, with price/mix at plus 2.2%. In Mexico, the beer category returned to growth. Our volume and net revenue grew modestly, and our market share trajectory is progressively improving. An important contributor to our performance was stronger outlet execution, notably in our own Six network and with our traditional trade partners. Premium beer grew strongly, led by Miller High Life, while Tecate Original and Indio contributed to mainstream growth.

In Brazil, the beer category recovered to positive growth in the quarter, and our volume increased by mid-single digit, with Heineken and Amstel both growing double digit. The recent Heineken Ultimate 3.5% innovation is resonating strongly with consumers, exceeding volume expectations. Also, Heineken 0.0 grew in the high 20s. Overall, net revenue in Brazil grew in the teens. In Central America, the FIFCO integration remains on track, including delivery of expected synergies. In Costa Rica, our multi-category portfolio continued to perform well, supported by strong commercial execution across the entire portfolio. All in all, an improved quarter for the Americas with more work to do.

If I now turn to Asia Pacific, which continued its solid momentum we saw in the first half year. Net revenue increased 15.1%, with total volume growing 17.3%, and price/mix on a constant geographic basis, up 4.1%. Vietnam is strongly outperforming the beer category, growing mid-single digit. Our volume grew in the 20s with net revenue up in the 30s, supported by share gains and continued growth in the premium segment. Heineken Silver and Tiger Crystal were the key leaders of the growth. India continued to build on its leadership position in a high-growth beer market, partially benefiting from an easier comparable following last year's heavy monsoon season. We are leveraging our scale and national footprint to capture underlying consumer demand and drive category growth. Kingfisher Ultra and Heineken Silver led the premium growth.

We are also encouraged by recent regulatory developments, that's a tongue twister, including more equitable excise treatment of beer in certain states. The country's first ever alcohol content-based tax system was implemented in Karnataka, boosting demand. And as a beer industry, we continue to engage with the state governments on reforms that support the responsible long-term development of the category. In China, we delivered another quarter of sustainable double-digit growth and share gains. Heineken Original and Heineken Silver and also now Amstel showed growth across geographies and channels. On the picture to the right, you see an example of the Heineken brand activation of the Shanghai Tennis Masters on the Bund, a real great sight.

Turning to Europe. The region delivered another quarter of volume growth against somewhat softer comparatives, engaging with consumers through excellent summer activation and stepped-up innovation. Net revenue increased 1.3%. Total volume grew 0.6%, and price/mix was 0.1%. The latter held back both by negative channel mix in the quarter and intentionally restrained price/mix as we continue to focus on affordability for value-seeking consumers. In the United Kingdom, volume grew on the back of our portfolio strength with Cruzcampo, premium cider and Murphy's Stout as key drivers. Our pub platform also remains an important strength. Star Pubs continue to outperform the wider pub market, reflecting the consumer appeal of quality pubs and the strength of our Star Pubs operating model.

Across Western Europe, excellent summer activations supported market share gains in the off-trade. We also continue to expand our participation in beyond beer, for instance, with the acquisition still subject to regulatory approval of a majority shareholding in Stëlz, a leading and fast-growing RTD brand in the Netherlands. Earlier this month, we also announced a significant simplification of our European business. Following the successful pilot, we are moving from 23 operating companies to 8 larger multi-market operating companies by year-end, combining local consumer and customer proximity with skill, capability and productivity benefits.

Finally, our outlook for 2026. The trading environment remains broadly unchanged, and we continue to operate against the backdrop of macroeconomic and geopolitical uncertainty. Our solid third quarter performance with volume growth across all regions and further proof points of acceleration of our strategy gives us confidence in our full year delivery. We, therefore, reconfirm our guidance of 2% to 6% operating profit growth. Our outlook for all other metrics remain unchanged.

So let me briefly summarize. We welcome Rafa as the new CEO, but he will be touring the world till the end of the year. We delivered a solid quarter with volume up 4.8% and net revenue up 4.6%. Growth was broad-based across all 4 regions and led by our priority segments and global brands. Premium volume grew double digit, while our global brands grew around 10%. Africa and Middle East delivered resilient growth, and Asia Pacific continued its strong momentum. Americas returned to growth, and Europe delivered volume growth, both, however, on softer comparators. And as Rafa said, we have strong foundations, and this quarter shows that. Yet there is more to do.

With that, thank you for listening, and we'll be happy to take your questions.

[Operator Instructions] First question comes from Edward Mundy with Jefferies.

So 2 questions, please. The first is just on your guide for the year, which is obviously unchanged. I think you delivered at the top end of the guide, if not above the guide with H1, and you've now got a very decent Q3 under your belt. Can you perhaps talk to some of the moving parts, either on the cost or the investment side that's holding you back from upgrading? Or is this just an element of natural conservatism given the uncertainty out there and with a big Q4 still ahead of you? That's the first question.

And then the second question is around some of the learnings from the MMO rollout within Europe. I think the commentary from H1 was very much about implementing and preparing for the rollout, whereas I think the commentary from Q3 is that the pilot has been successful and now you're scaling it. I mean does this give you more confidence to continue to drive scale within Europe?

Thanks, Ed. Well, first, on the guidance point, indeed, it's more the latter to your comment. We currently are comfortable with the performance of our business. But as Rafa said, and I just closed with as well, there is more to do. We are very happy with our performance in APAC. We believe the Africa region is resilient, but we're not yet where we want to be in the Americas, and we are encouraged with the progress on quarter 3, but we will continue to invest in that part of the region in order to ensure that we're setting ourselves up for a healthy 2027.

It is also a reality of the world that we are still living in uncertain times, and we often said control the controllables. So in discussions with Rafa, we felt that this message that we wanted to convey is this is another solid performance and indeed, the first half was also solid, but we see little upside at this moment in time from narrowing the guidance because we are focusing on continuing our performance and investing in improving our performance, and that's what we will continue to do. So don't read more into that than what I just said, I would argue.

Second, to your point, on the learnings of the multi-market organization, and we briefly touched upon it also when we last spoke. The European team has been, I think, extremely well organized in making sure that we are first piloting before scaling. And earlier, we brought 4 multi-market organizations together. And this has really been done very well with the management and the organizations on the ground to not lose focus on consumers and customers because ultimately, what we want to achieve is proximity with consumers and customers, but still leveraging skill and scale, as we call it, across the multi-market archetypes. And this really has come through.

So we started to learn from each other in terms of how we can drive better customer engagement, how we accelerate innovation, how we learn across, for example, on procurement synergies or advertising or activation synergies. And this gives us confidence that actually building bigger units that collaborate narrowly together is actually the right path forward in our European structure. And that has made Glenn and his management team very much, this has been carried from the bottom up, not from the top down only, decide to actually accelerate the implementation of it because we can see that together, we can have more impact at a more cost-efficient organization model. And that is really the reason why we are now accelerating. As per the 1st of January, those MMOs will be up and running.

[Operator Instructions] Our next question comes from Simon Hales with Citi.

So my first question was just around Vietnam, where we clearly saw a very strong performance again in Q3. I think back at the H1 stage, Harold, you were suggesting at that point, we shouldn't really extrapolate the H1 trend into the second half, but it seems to have clearly continued at pace. Can you just provide a bit more color on what you're seeing there, what you're doing versus the wider market? And really, is there any reason to think that volume growth for you will really slow significantly in Q4, particularly given we might see a bit of inventory build ahead of the excise increases in January that are coming?

And then secondly, I appreciate this is a sales call primarily. But I mean, can you talk a little bit perhaps around some of the cost pressures you're perhaps seeing as a result of the elevated energy costs that we're seeing sort of globally, both from a logistical standpoint in H2? And are you able to say anything about the COGS picture and your hedging position on your main inputs for 2027 at this point?

Yes. Thank you, Simon. So indeed, based on the conversations with the APAC region and the Vietnam team, we indeed said, "Look, half 1 has been great, but it has also been a strong Tet. It was some of the easier comparisons. We don't know what the market is going to do." You've heard me all say that. So frankly speaking, we were also positively surprised with the strength of the growth coming through this quarter. I still remain rather cautious because I'd rather be wrong on this side of the equation rather than be overbullish, overconfident because I still remember the scars that I carry in 2022 to 2023.

And just to reassure, this is also important for you to know, we have put real metrics in place to look at distributor visibility, freshness of the product in these markets, understanding the drivers of our growth. And then comes to the question, we are starting to see very significant share momentum in Vietnam. But we also know that Vietnam is a very competitive market. And we also see competitor entries coming in. So I don't want to be overconfident, but what I am going to convey is that we're very, very pleased with our Vietnam performance at this moment in time.

It really is still the case that the market is growing very importantly, both on- and off-trade in the mid- to high single digits. But on top of that, we are, therefore, gaining considerable share in our stronghold markets and are starting to expand a little bit outside of our stronghold markets and also see that taking effect. Now we're not taking that one for granted. So I would still argue, please don't extrapolate into quarter 4. There is excise coming, there is uncertainty, but we're confident with that the Vietnam teams are doing what it takes in order to really compete very well in the Vietnamese market. So I don't know what the macroeconomic outlook brings. What I do know is that excise will happen in 2027. So yes, personally, I'm a little bit more cautious, and I don't think that we should continue to see 20% growth rates in Vietnam.

Now on the cost pressures, we've spoken about this at the half 1 as well. And you will have seen as much as I do that the higher energy and transport costs will remain a factor not only for the balance of this year, but also going into 2027. We've, of course, increased our productivity agenda in order to compensate for that. So very important to know as well that we're not cutting any of the marketing or sales investments, and that is really what we use our elevated cost and productivity measures for. But we are seeing significant elevated cost in parts of the world. And this is particularly true in Asia. It is also particularly true in some of the African markets, but we also start to see the impact of that happening now in Europe as well.

Our hedging positions for 2027, I'll give a full commodity cost outlook in the full year results, but we have not changed our hedging policy. And that does mean that we are covering the majority of our hedges already for 2027 around this time of the year. So you should think about 80% to 90% of commodity, but also currency transactions have been covered.

We now turn to Sanjeet Aujla with UBS.

A couple from me, please. Firstly, I think you started the year quite cautious in your outlook on Mexico and Brazil. How has the category evolved relative to your expectations at the start of the year and also your market share performance there as well? That's my first question. And my second question is just going back to the comments there on the cost outlook for next year. Is it fair to say you're leaning more to absorb that through productivity measures as opposed to headline price increases?

Yes. Good questions, Sanjeet. Thank you. Maybe starting with my view on the Americas, just for the people on the call to just play back a little bit why we started with a more cautious outlook on the Americas at the start of this year. And that was basically driven by 2 reasons. Firstly, the macroeconomics, high interest rates, uncertain political situation, a difficult read on the U.S.A. in particular, but also the spillover of that into Mexico made me much more cautious on the Americas than what I saw happening in other, yes, companies' outlook. I personally have been a bit surprised on the resilience of the beer market in quarter 3 and was very happy to see that both Mexico and Brazil were returning to growth.

But what I also believe, speaking to our Mexican and Brazilian teams, and you will have seen the currency in Brazil also reacting to the latest elections, is that it's still very fragile. Also, Rafa was there on a market visit a couple of weeks ago, and he basically said, "Look, there is still quite a bit of economic tension in the Brazil market." So I remain, yes, a little bit conservative perhaps on the outlook of the Americas because I don't think that we've turned the corner to consistent positive category growth just yet. What I do believe is that both ourselves as well as the industry at large are investing quite a lot to make sure that we stay relevant to the consumer. This is true in terms of pricing management because part of the reason why we are having to recover market share is that we created, to some extent, our own price volatility as we've spoken about, and we are repairing that.

So I'm pleased with some level of market share progress, but not yet where we need it to be. But I also think innovation is playing a really key role. And for instance, you see the Heineken Ultimate gluten-free really resonating. You also see Praya really resonating. Amstel Ultra really growing very fast in a very health-conscious environment, for example. So I do believe that all of us, including the industry, is doing the right things to make sure that affordability takes place but also that innovation and activation is at the standards that you would expect to bring the people back to the category. So that's how I see it, fragile, but we're doing the right things.

In terms of the cost outlook, I believe that we have found the right balance between investing in affordability, but also making sure that we take measured pricing, particularly through mix management and, let's call it, not straight visible pricing, for example, through pack-price architecture and innovation-led pricing. And that is probably what you will expect from us going forward as well. To find the right balance between pricing, I would probably put it at anywhere between 70% and 90% of CPI that we're going to target for, but also to continue to work on productivity in order to make sure that we can build the brands because ultimately, it's not about lowering the price. It's really bringing value back in the brands and that we can do through innovation, quality activation, and that's what we will also invest in.

Our next question comes from Trevor Stirling with Bernstein.

So two questions, Harold, one on Brazil and one on Mexico -- one on Vietnam. In Brazil, you mentioned about the category growth. Is that both sell-in and sell-out that you're seeing the category growing? And then can you talk maybe a little about the share trends in Brazil? And then in Vietnam, I mean, with that level of volume growth, is there any risk of you hitting capacity constraints? I'm guessing probably not because of the prior weakness of the market, but I'd be intrigued to find that out. That's first question. And again, you've got, I think, it's from memory from the rest, pretty, very strong price/mix in Vietnam. I mean, are you starting to get some operating leverage in Vietnam given that level of volume growth and that very strong price/mix?

Yes. Very good. Let me first talk about Brazil. The Brazil market in quarter 3 was indeed both up in terms of sell-in, but also in sell-out. So I can confirm that in quarter 3, we did see an uptick, both in terms of total industry, all the data we're looking at. So that's a positive signal. Now as I just said to Sanjeet as well is we also know that the weather, I'm not going to call out the weather as an excuse, but has not been terrific in Brazil at the moment. So I am still cautious on the volume outlook in the fourth quarter in both Brazil and Mexico, just to put a fine point to it, Trevor. But hoping that I'm wrong, clearly.

And then in terms of Vietnam, no, we're not going to run into capacity constraints just yet. We had plans to already upgrade the investment some time ago. So we're on standby to do that relatively efficiently and therefore, can handle the volume increase. This -- just so that you hear it from me as well, is not so easy as I make it out to be. So our Vietnam teams are doing a lot of juggling to make sure that they can fulfill the demand. But I don't see that as a constraining factor to continue the momentum in Vietnam.

I think the point on price/mix is a very relevant one because what you currently see happening in Vietnam and is the driver of growth, is both Heineken and Tiger Crystal, is really leading the premium segment again. Now this is in part also the fact that there is healthy and stable economics happening in Vietnam, a stable government investment in bringing the Vietnam economy to higher levels of value accretion. And this is all boosting consumer confidence. This is good not only for beer consumption, but also the type of beer consumption is conducive to the premium segment, which is, of course, where we're leading. So we're very happy with the market dynamics and our own performance.

To your point of price/mix, this is indeed creating some operating leverage, but also we're investing behind the growth. So I said before, Trevor, that we should not return to the levels of 40% operating margin in Vietnam, and that's also not what we're foreseeing in the future. We'd rather invest back in order to cater for more growth in Vietnam.

We now turn to Laurence Whyatt with Barclays.

Firstly, I'd like to ask about both Brazil and Mexico. You noted the improvement you've seen there. But I'd love to hear your comments on the recent presentations by some of the people in your industry around those markets where the technology seems to have stepped up quite a bit with regard to being able to target customers, target different accounts. The last time you outlined your technological prowess was at the Capital Markets Day last year and just wondering how you think you compare against the peer set within Brazil and Mexico, to be able to go back to gaining market share in those 2 key markets.

And then secondly, there's an interesting comment or statement from Rafa in the statement that was put out this morning, suggesting quite a bit of a culture change within the organization. I'd just love to hear your view as to how you think Heineken might respond to a bit more of a performance-focused culture coming from the new CEO.

Yes. Thanks, Laurence. In terms of, let's call it, the digital route-to-market capability that we have in both Brazil and Mexico, our teams are relatively confident that we're in the competitive zone. And that we judge not only from the interactions that we have with the outlets, but also we very, very diligently measure the Net Promoter Score, whether people feel that they have the tool and the equipment and the services that we are providing, whether it serves their needs. And those Net Promoter Scores are firmly in the positive and very comparable to, let's call it, the industry average. And I think you know what I mean there.

So we are, of course, monitoring this very tightly. We're also -- I made a comment earlier that the growth in Mexico, for example, was really driven by traditional trade outlets, our Six stores comparison. So we're really looking at this from almost an outlet-by-outlet point of view. And that's where our digital information is helping us greatly to really look at recommended assortment, pricing compliance, cash flow management, and we're really getting, yes, some positive responses from customers. Now we're not taking this for granted. We're very much looking at what is the next stages in that development. So I don't want to use past trajectory to also project forward because we know that the world of AI is not standing still. But at present, we are competitive, and that's also what the customers are telling us.

Then in terms of your statement for Rafa, yes, look, he was quite intentional putting that on the front page of our results announcement. And frankly speaking, it is also something that I just want to emphasize. But it's not the only thing that he said. The starting point was his first impressions are positive because he likes the strength of the brands, the commitment of the people and the potential that he sees across the geographical footprint, and that's what he's confirming as he takes the Rafa selfies with the people around the world. But what he is clearly indicating is, yes, we have solid foundations, but there is more to do. We're not translating them into consistent growth and winning with consumers and customers as often as we should. And I don't think that's a surprise to you because you've been telling us that also for the last couple of years.

What is the case is that our performance culture needs to step up. And this is really simplifying the narrative, simplifying the operating model, like we just talked about Europe, and basically be very specific about where we see opportunities, how we go after them and who's accountable for it. And that is the point that he wanted to make, greater accountability across the business is part of accelerating speed, but also impact in our organization, and more of that to come in February.

We now turn to Olivier Nicolai with Goldman Sachs.

A couple of questions, please. First of all, could you give us a bit more color on your performance in Africa, particularly in Nigeria, if you expect an improvement in Q4? And then going back to South Africa, how long do you think it will take for that drag that you had from wine to disappear? Because I remember you already have rationalized the portfolio post the Distell acquisition. And then secondly, on the acquisition of your majority stake in Stëlz, can you elaborate a bit more on the strategic rationale there? And does this represent the beginning of a more meaningful string of acquisition in RTDs or hard seltzer?

Yes. Very good. And different questions, Olivier. Good to hear you. First of all, yes, let me again acknowledge the African business because I think they're managing really the portfolio extremely well. And as Tristan always likes to add, this is real euros that we're also seeing being reported. So that's important. The reality in Nigeria is exactly like you indicated, Olivier. Our performance is actually very positive because our market shares across lager, across stout, across malts are actually increasing. So we're building a better business. And as you will recall from many conversations in the past 2 years, we've completely repaired the balance sheet. We're managing the cash flows very well, and we're lowering the cost base.

And that is also necessary because the ultimate thing that is currently happening is that people just don't have the money to enter into the category. And that has to do with the macroeconomic fundamentals more than with our portfolio. But the moment we can make beer affordable for more people, we will start to see significant operating leverage coming back into our system. And just as a case in point, right, the average consumption in Nigeria is 5 to 6 liters per capita per year. So with 200 million people, that's a lot of opportunity that is there. And we do need to ensure, and that's why we're also not fully pricing because the currency has been stable and the inflation is coming down. Our first priority there is to invite consumers back into the category. And we are the ones that hopefully will welcome them when it is possible. So that really is the reality in Nigeria. Team is doing well, but we're really working very hard to bring volumes back into our business.

In South Africa, what you do see in South Africa is recovery and actually strong performance this quarter on beer across all the brands. Our RTD business is doing well. And in selected parts of the spirits business, Klipdrift is doing very well. But you're right that wine continues to be still a drag on the portfolio. Now this is a very important part of our business. So we are not making rash decisions on what to do, but we do have it under strategic review because we are looking at the relevance of wine in our total beverage portfolio and how we are going to compete in certain segments of the wine is an active discussion with our South Africa business. But once we have made a decision, we will update you on that, but we are going into the granular detail on how to win in or with wine.

What I would add to that, Olivier, is not just the categories themselves, but also how we build cross-category advantages that create more value than stand-alone businesses and really shape the beverage profit pool. So yes, we can look at in isolation, but to understand how it can help us in our total portfolio as well.

And maybe that's a good bridge to your Stëlz question as well because what we are starting to become much more cognizant of is changes in consumer behavior that are starting to happen in some markets. And that's why in South Africa, in Costa Rica, we are really looking at multi-beverage part of the portfolio. And in the Netherlands, we really saw that there was, with the younger consumers starting really in the university cities, a fantastic momentum being built behind the Stëlz brand, which is a hard seltzer is how it started with. And we really saw a very big momentum starting to be created.

And to your point, there is a strategic rationale with it, not only younger consumer cohorts, different product formats, but also different marketing capability that we see coming in because this was really about city-by-city marketing, influencer strategy, dense events, for example, and that is what we're starting to learn. It's therefore also very important that since the initial stake that has been created in, what is it, 3 years ago now, we really have worked and collaborated with the founders, but not fully integrated it into our operation because this is something that we really want to learn and not in a way, yes, put our beer perspective on an adjacent category. And that is why we have really been learning and scaling this.

Now to your point, will we see more of this coming through in different markets? We hope so. It's too early to say what we're going to do, but it's a very interesting business model that we're starting to learn, and we will certainly look to replicate this across selective other markets.

[Operator Instructions] We now turn to Chris Pitcher with Rothschild & Co.

Two for me. Firstly, on India, you talk about increasing penetration. Does that mean the volume growth is coming disproportionately from your contract brewing partners, obviously, with a dilutive effect on revenue per hectoliter? Are you able to give a split between the licensed and the consolidated volume performance there? And as a sort of a follow-up to that, how are you doing on your sort of brewery expansion, both within existing territories and new ones? And then just a quick follow-up on the questions around Europe. Could we expect operating margins to start expanding again in Europe like they were doing before the pandemic?

Thank you. Chris, good questions as usual. Let me first make a more general comment on India because the split between contract brewing and our own brewery operations is really a mix between, to be honest. And you heard me calling out in my readout on the quarter 3 transcript that the impact of our license volume in India was lower in quarter 3 than it was on the year-to-date. And that really is driven by consumer demand and state mix. So I wouldn't read too much into that strategically. It really is a factor about pricing, the discussions that we have on regulatory, hey, I can say it this time, but regulatory issues that we are working our way through. So you actually see quarter-by-quarter quite a lot of variety between which states are growing and not growing because this is still an emerging industry. So don't read too much into the contract brewing or the noncontract brewing.

I think the overall point still stands, and that is the category is in high single-digit, if not double-digit growth because we start to see the impact of normalization in the category and the opening up of the market more so state by state, and Karnataka was a good example of that. Our brewery expansion model is on track. A mix between contract and own brewery footprint is what we're going after because you are well aware that we are the most presented player in that market. So we're actually not supply constrained, and we are catered for the growth that we currently see in India with a combination of the best local brand, but also international brands that we can brew in that state. So we're very positive on the India outlook, and we're managing the contract brewing really as a strategic asset, not as an operational asset. That perhaps is an important addition to make.

Now on Europe, I think what Glenn and the team has shown this time around is that there can be excitement in the category. With the right activation, the right innovation, we can bring this category to growth. The consumer is still very price conscious. So we're not getting yet the price leverage or the mix leverage that we would like to see coming through in the longer term. We need to be a bit more patient on that. And you also know that regulatory costs are quite a significant burden together with energy cost in the European business. So we're working very hard to create efficiencies in the European system that progressively will bring us operating margin expansion over time. And that's what we're looking at. We do that step by step. Don't expect miracles overnight, but do expect progress to continue.

I think that was the last question. Correct, Elliot?

Yes, we have no further questions.

Perfect.

Now I want to thank you for your interest, and I very much look forward to seeing you at our full year results in February. Thank you all. Have a good one.

Thank you.

Ladies and gentlemen, today's call has now concluded. We'd like to thank you for your participation. You may now disconnect your lines.

Right. I think we're live and our 35-minute clock has just started. My name is Rupert Trotter. I'm the consumer specialist here at Barclays. I am standing in for Laurence, who seems to yet further delayed in Gatwick somewhere over the Atlantic. So I'm afraid you still have to suffer in silence for me -- with me.

I'm delighted to welcome Heineken back to Boston, in particular, Harold, sitting here with me on the stage and Tristan for trusting me. Before we start, I did also want to highlight there will be a breakout session after this around the corner. For those -- I think we've got a breakout session? Yes. We're out to the right and right, but we'll be going back. I'm afraid to the light to the kitchen so we get there without you being stocked and tested on the way. We've got 35 minutes, so I'll jump straight in, if that's all right, Harold.

Look, H1 was, I think, sort of an important reporting point. We've transitioned from EverGreen '25 to 2030. Actually, we had strong delivery, and we had strong delivery at the bottom line cash flow improvement as well. What allowed that to come to the fore, particularly in this period? And how do you see that evolving from here?

Well, first, Rupert, thanks for having us -- Heineken here.

It's a pleasure here.

Always good to talk. And indeed, maybe good to start with a compliment to the organization because we're in the middle of a CEO transition, as we know. And one thing that we were very clear on as an executive team is the best thing that we can do is keep our heads down and keep working on our strategy. And it's super nice to see in the first half of the year that there was volume growth across the world, 1.5% that we had measured but still revenue growth, and maybe we can talk about that a bit later.

But that there's a lot of proof points of the acceleration of EverGreen starting to come to life. We've brought multi-market organizations to life. We've grown our global brands. We have prioritized our local brand portfolio. We saw productivity coming in. We have implemented Freddy AI across more and more of our markets. So the organization is actually moving. It's accelerating. And the results that came are bearing the fruit of that. So that was super happy to see. Now I don't want to come across as complacent because there's a lot more work to be done in order to really unlock that potential, but it's a good start.

And I don't want to put the cart before the horse, and it's a bit of an unfair question because Rafa enters the house 1st of October, I think. But very much when he -- the announcement was made, it's like his commentary was, I buy into EverGreen, and I want to build on it. And I think I don't want to over extrapolate that. But incrementalism from here, how -- what are you looking for from a new CEO internally and message-wise internally?

So internally, we had the conversation about, look, EverGreen '25 was a necessary foundation for EverGreen 2030. And for those of you who don't know, but we have sharpened our strategy quite considerably to be put more focus on the growth engines, more focus on global brands, more focus on priority markets, more focus on driving the productivity to the next level. And the first thing that we need to do is prove that we can do that.

So what I'm very much looking forward to is not Rafa arriving on the 1st of October, but to actually see the continuation of the strategy happening. Then secondly, I think this is only year 1 of EverGreen 2030. So the whole point is about how can we mobilize the organization to do this over and over again to deliver this consistent set of results and to start to see a bigger impact as we drive it, both on top line, on bottom line, but also to your point, on capital productivity and conversion of cash flows into shareholder value creation.

I think we're going to touch on a little bit of that later on in a bit more depth. But I suppose when one looks into the consumer staples from the outside in, we always originally start with the top line and the EBIT conversion. And actually, you [indiscernible] in the first half. I mean, this delivery of sort of mid-single-digit top line growth and profit going faster seems to be, like you say, it's fair to walk away than feeling a bit more embedded about that.

I think so. And although I'm a CFO and actually a chartered accountant, I do want to make a point here because if you include the growth that we get from China and the growth that we get from our contract brewing business in India, our revenue growth would be well above 4%. And I think it's an important point because if you would just look at our stated financials, you would potentially miss that. But actually, therefore, that mid-single-digit revenue growth is actually within reach and the conversion of operating leverage, the cash productivity that we see coming into the business, we start to see it happening, but more to be done, as I said earlier.

You mentioned Freddy AI, scaling automation, connects data across sort of commerce. How are you seeing this? And how can we sort of see this evinced and how this is closing maybe the performance gap against -- you've obviously going to bring up [ fees ].

Yes. So maybe good for the audience to first explain what is this Freddy AI. Of course, known named after a very important person in our business, Mr. Freddy Heineken, who we believe is the best marketer that the Heineken company has ever seen. But the notion that Bram put behind this is how can we leverage digital in order to learn and scale across Heineken. And there are three components to that. The first one is how do we get access to consumer research studies and best practice sharing, and we call that Freddy Connect -- sorry -- My Freddy AI.

The second one is how do we build innovation and content creation through a digital ecosystem so that new advertising campaigns don't take 6 months, but take 6 days. And that is the second part. And the third one is, as we start to put resources into that, how do we measure ROI optimization through digital means. And all three parts are the connection that we put in, in terms of Freddy AI.

We've seen that working on the Heineken brand, and we're now scaling this across. Now to your point, is this a competitive advantage? I don't think that we're at that stage yet. But certainly, what we are is at competitive levels at this moment in time, and that's already a big step up. And this is partly to do on efficiency, but it's very importantly partly to do is how do we get from consumer insight to product relevant consumer offerings in a much faster time scale because the world is not waiting. And this is the beauty about the unlock that the commercial team is trying to get to.

So meeting more occasions, lifetime.

Absolutely and faster.

So I wanted to go back to a sort of big picture question. We've had long discussions about the changing alcohol consumption landscape. Heineken as an organization have made sort of think the decline in consumption is overstated. It feels like a lot more of the top line is in your own hands now rather than would be perceived themes that there's a lot more to go for. There's a sort of performance gap to close.

Yes. I think the way that we looked at it, and we were very explicitly making the case for beer in our Capital Markets Day in October 2025 because at that moment in time, we felt that the world was somehow giving up on beer as a relevant consumer occasion. And that is not right. The way that we are thinking about this is three different market architypes. In markets where consumers are entering the alcohol, the industrialized alcohol category, the value markets, as we call them, beer is a very relevant category because it's affordable, it's accessible, and it's actually industrialized quality, which is better than homegrown alcohol.

If you then go to advancing markets where there is premiumization on top, and this is in markets like Vietnam and Mexico and Brazil where it's happening, there is a trading opportunity. And then you've got the last part, which is developed markets where there is a fragmentation of choice. But what we often forget is that the world's population is sitting to a large extent in the value and advancing beer markets. You see that in India, for instance, you see that in the growth of Vietnam. And we have a role to play to shape the category. And that's why we wanted to really make the case for beer. And you also see that with new flavors, new variants, there is an opportunity to create new growth through new segments. And the 0.0 category is only starting at that moment.

Now what we also know is that there are new consumer occasions to be unlocked. So when we look, for example, at our acquisition, our most recent acquisition, in Middle Americas or Central Americas, we acquired a full beverage portfolio, including RTDs. So I also think that the Heineken community is more and more looking at the total landscape of consumer needs rather than beer only. And those acquisitions are a proof point of that.

Well, I had a question penciled in for that further down the page. So I'm going to go off script, but stay on with the questions we had agreed, Tristan, so don't worry. But on the Central American acquisition, like you say, you bought a bigger portfolio, but a different skill base in there as well. You've got incremental retail route to market. What's the learning that is going to come out of that? And how should we see that being transferred around the organization?

Well, I think already what you see is that Alex Carreteiro, our new President of the Heineken Americas business, is really getting very excited about the sill base that we've acquired with FIFCO in Middle Americas. And this is about the RTD category, but also about how you manage multi-category play and how we start leveraging with our Six stores, but learning actually from Central Americas, what more we can do with the Six stores in Mexico in order to really amplify the route to market and make that a more shopper-based occasion rather than the beer case occasion.

So let's talk a little bit about the Americas. Let's go on to talk about Mexico. I mean, Mexico, we've seen some volume declines in what has been a historically strong market for you. We know that Mexico is a market that is yet to properly premiumize in a significant manner. What is the catalyst for the development now of getting back to sort of volume growth and actually the medium-term premiumization of the market?

Yes. Exactly those two words, Rupert. Maybe going back about half a year when we started looking at the outlook for 2026, I just want to caveat it because I'm still relatively concerned is maybe a too big a word. But I'm not very optimistic about the short-term nature of the market in the Americas. And I know that I'm maybe a different voice that you hear somewhere out there.

But I'm looking at macroeconomic uncertainty, consumer proliferation, less income, heightened competition. You do see that the Americas at the moment is a market that needs a lot of investment in order to bring the consumer back to the franchise. Now to your point, what's the recipe for success is we will keep on investing in building a better infrastructure for our brands to flourish, first. So we will continue to expand the route to market in Brazil. We will continue to expand the Six stores. We will continue to leverage the middle Americas as we just talked about. But what needs to come on top is consumer-relevant brand portfolio. And what we do see happening in both of the markets is that healthier choices, more flavors and premiumization are still key category growth drivers, and that's what we will be investing in.

Can you talk a little bit actually about Six? I mean, clearly, in Mexico, as we've been through firstly the OXXO transition, but how is growing? And actually, any other incremental plans, where do you think that model could be relevant in Latin America?

So the solution might be different. So first of all, we are now the second largest proximity retailer in Mexico with over 17,000 stores. So this is a very, very important route-to-market asset that the team has developed there. What we are starting to see is more and more based on what I just said, is that this is not only a beer outlet, but this could be a consumer proximity retail outlet with a broader franchise than we are currently offering. And what we're seeing is that there is at least consumer appeal to develop it into that.

So we do see more opportunity to leverage our Six franchise further. And what we see happening in Middle Americas is that actually FIFCO has done exactly that. So what we are looking for is market by market, what are systematic ways to actually build a sustainable route to market for our products -- sometimes this is digital with our eazle system, and sometimes this is physical with our Six stores.

Brazil, I think we've alluded to has also faced some sort of volume declines, the market share challenges. Laurence, I've got to say, as Laurence has written about sort of increased structural challenges in Brazil, volume growth becoming potentially more challenged at the market level. How do you see the market evolving then from here sort of volume versus price mix, this premiumization? It feels the bias still towards premiumization.

So I've read Laurence's piece, and I'm sure that he will listen to this recording with a great degree of pleasure and interest, and I thought it was a good piece. But what it basically depicted is that in the 2005 to 2015, late teens, there was an acceleration of income growth and population growth, particularly the younger consumer, which was conducive to the beer category, together with some advertising laws specificities there. And I think he's right, this was the growth and flourish period of beer.

Frankly speaking, we built a fantastic trajectory of growth in Brazil on the back of that. And we are very pleased not only with our route-to-market model, but also with our brand portfolio that we built as a result of that or back on that momentum. We really look towards both Brazil and Mexico is as attractive, sustained growth markets going forward. So where I beg to differ is that volume growth is no longer possible. I think volume growth is possible. But what will happen is more consumer innovation and more consumer need state that needs to be tapped into in order to get that growth going. Now for example, the launch of Heineken Ultimate 3.5% ABV gluten-free, which we've just done is off to a flying start. Amstel is still growing very, very fast, and we're experimenting and launching new brands in Brazil as well. So the name there will be about quality of growth, not necessarily per capita consumption inclination as what we've seen in the previous [ decade ].

So it's more nuanced, it's more premium, but yes, meeting the occasion of consumer demand.

And we've got a fantastic platform to do that.

And again, in Brazil, we're seeing OXXO sort of move into Brazil as well, I think I'm right in saying. Is that an incremental opportunity or just...

Look, we know OXXO well. We know FEMSA well. We think that this is indeed a good opportunity for the further development of that market, but we're embracing the change as we see it.

Brilliant. And then finally, on Brazil, there are a few sort of changes going on there. One is clearly the tax changes towards the end of the year. Both in sort of terms of VAT in U.K. parlance, but also we've got the introduction of potential Sin Tax in the new year. What should we -- this is happening at a sort of peak demand period for you. How should we sort of think about this? I know a lot of people will try and get worked up about phasing. But in terms of medium-term demand, how do you see this and how do you manage it?

Well, that's a bit of a difficult question to answer. And I think first and foremost, because all the nuances that are very important are not yet fully known. So I know that the tax is very much up for discussion at this moment in time, but there is no formal fully fledged proposal that we can discuss and already start thinking about.

And secondly, because we have also learned that surprises will keep happening in the world. And therefore, what we call scenario thinking is very much what we do. So if route A happens, what is then our response? If plan B happens, what would be our response? Suffice to say that we believe that Brazil will continue to be a very important and attractive market going forward, and I'm sure we'll be ready to deal with whatever comes.

Whatever comes. Brilliant. Moving to our domestic market here, the U.S.A. Been a challenging alcohol market for Heineken. You've had success with Heineken 0.0. You talked about Ultimate. Can you just talk about the sort of portfolio development and perhaps anything that we need to think about sort of more strategically for Heineken to deliver that sort of profitability that can move towards sort of group level over what period?

So again, maybe just to bring the group in, just dimensionalizing the U.S. for us is a relatively small market. It's a strategically important market, but it's 3% to 4% of our global revenue. And we're actually making a profit despite an import model that we have there. So whilst it's a strategic opportunity, it's not really making or breaking our current strategic momentum. So just as a context, that's important to know. You're right that we are there with Tecate, with Dos Equis and particularly with Heineken and Heineken 0.0.

It's a bit difficult for me to read what is going on in the U.S. market. And I know to the audience, I've said this already in the past 18 months. So it's like, hey, shouldn't you study that better in order to get to some answers more quickly. But I -- for me, the U.S. is a bit of a let's wait-and-see market at this moment in time, stick to our guns, know what we do best, bring innovation to market, focus on 0.0 and the brands that we have, look at velocity, points of distribution. And this is one where I think we need to probably have time with the new CEO to really think strategically about what to do to unlock the strategic importance of the U.S.

Well, let's come back to one of your absolute core markets in Europe. I mean, again, much commentary in Europe about sort of alcohol per capita, although beer does seem to be gaining share. Can you talk about sort of the volume opportunities you have in Europe? And I suppose actually also want to tie into this the sort of capital efficiency opportunities as well because it seems to go hand in hand.

Yes, indeed, because Europe is a market where population is not really growing and per capita consumption is already high. So what Glenn would say, our Regional President in Europe is that the name of the game in Europe is two things. The first one is how do we acquire new consumers into the category as older consumers are leaving the category or are moderating. And secondly, how do we tap into new markets potentially outside of beer that can bring us that new growth opportunity. So this is where the role of innovation really becomes quite important. And whether this is Texel in the U.S. -- or the Texel in the Netherlands or STELZ in the Netherlands or converting like we see happening now in France, where beer has now overtaken wine as the first alcohol of choice for the consumer, there are opportunities of growth, but we really need to tap into them.

And one of the things that Glenn rightly so has been most proud about is create the moments. And we have done an amazing job in quarter 2 to win the summer in Europe. And that is with quality innovation, quality execution and the right investment behind it, we saw accelerated momentum, and that is building. That's important for the category, but that's also important for our own belief that actually Europe can be a growth market. Now then to your point, we need to do so efficiently because Europe will not be high growth. It will be modest growth. And therefore, capital productivity and cost scrutiny will be a part of how we create value in Europe.

And can I ask, I mean, with the U.K. hat on, how does the sort of pub -- managed pub portfolio sort of fit into that?

Well, maybe good to know, but pub is actually one of the best value-creating opportunities that we have because we know how to run a fantastic pub estate. And it's partly because of the premium mix that we can bring there, but it's also partly the role that it plays in portfolio conversion. This is the place where we can test innovation. This is the place where we can bring quality food, quality outlets, quality premium, beer experiences to the market, which then has also a transversal impact into the off-trade. This is, for example, where we can test and scale Cruzcampo, for instance. So for us, that pub estate is a very efficient, including on return on invested capital way of actually how to grow profitably in Europe.

Brilliant. Well, let's move on to some more growthy markets. Let's start with South Africa. Distell, the regulatory process took a little bit longer. The integration seems to take a little bit longer. But actually, South Africa seems to be remarkably resilient in its growth. How do you see it developing from here and the Distell elevating the overall experience for you?

Well, first of all, let's recognize indeed that South Africa, despite all of the pressures maybe that the economy are under, continues to be a growth market for total alcoholic beverages. And this is good not only for the category, but also for our portfolio because we are also there operating a multi-category portfolio, as you know.

And we're very pleased, in particular, with the fact that our beer category is starting to accelerate and are driving momentum whilst learning how to operate a multi-beverage business. We're not yet fully there in wine. But for example, in our RTDs part of the business, in the Berninis of this world, we're actually doing a fantastic job. So I think that our South Africa business is now in a stable platform and conducive to growth also as we now start to unlock the opportunities that we see in the route to market that is conducive to our portfolio.

And looking to sort of, for one, perceived as some of the more growthy economy, sort of Nigeria, Ethiopia delivering strong volume growth. I mean this is one of the key things here is the volume growth is very strong. How do you manage the volume growth and profitability hand-in-hand? How should we be thinking about that sort of from almost a holistic level?

I think this is where the lesson of Nigeria a few years ago was really learned by the Africa team. And I really have to give them a compliment as well. We've learned that structurally lowering the cost base in more volatile markets is extremely important. How do you make sure that you're not getting into trouble the moment that some volume falls away. We've learned that painfully in Nigeria have corrected that, but this is now becoming commonplace in many of the African markets. The second one is balance sheet health.

At the moment your currency goes a bit wanky that you're not ending up into hard currency problems because you cannot afford to actually import the product or import the ingredients. And I do think that the cost and cash control of our African business is fantastic at the moment. The second important thing that we've changed is hard currency mindset. So that, I think, is part of the proof point of success. Now when you've got these basics in place, it's so much easier to then focus on growth and really about maximizing the mix for all the consumer cohorts whether they can afford or can afford less because you basically got your cost and cash base under control. So that actually gives us the opportunity to actually start scaling new products, new more affordable formats simply because you can afford to do that now.

0

And then you've exited the DRC. What signal is that to the market? Is this -- was this a one-off? Or is this a sort of assessing the market or...

No. I don't think that we should see this as a one-off. I think it's an important one to start realizing that also in Heineken, we are becoming a more focused growth company with this return on invested capital very much embedded in our way of thinking. And the China model is a fantastic example of that, right, where we really have this partnership model. So we are growing in our brands, but not deploying the full asset base. That is what China Resources Beer is doing for us. And we start to see more and more opportunities across more and more of our geographies in order to consider that.

And DRC was a great example where we can license the brand but offload the asset base and still get an economic return for growing the business.

You mentioned China. It's a top three sort of profit market for you. I mean, sort of a couple of questions within this. One, how do you see the top line continuing to evolve? I think as we see it year-on-year, you're effectively being rolled out within the CR Snow network. But how do we see that progressing? And then sort of longer term, how do you see the sort of economics of top line bearing out in China?

Well, first of all, let's recognize that this is now the eighth consecutive year of strong double-digit growth. So this is not a blip. This is a trajectory of fast and relevant growth that we have in China because of this partnership. Important to also realize that in Heineken, with Heineken brand, we're only at 30% of the addressable outlets from CRB. And Amstel has just got started and is already reaching 1 million hectoliter in one province only. So we are quite confident that in the next 5 years, just to put a time dimension to it, we continue to see these levels of growth. And this is also what we've agreed in the joint business plan with CRB. So financials are very helpful to us, not always reported in revenue, as I said before, but certainly a very big contributor to our net profit, and that will only go bigger.

Final market I really want to touch on was Vietnam. Obviously, a real success story in H1, had some challenges in '23, '24. I was going to say what were the learnings from that period that allowed us to see the sort of superb figures we saw in H1. And I suppose the question I've also got as a follow-on is that we're going to see some tax changes there as well. Is there anything we need to think about as we sort of -- I don't want to get the ruler out and extrapolate forward in Laurence's model, what's going to happen. So if you could just share on that a little bit, that would be helpful.

No, indeed, Rupert. And let me close indeed with that last point. But importantly, what happened in '22, '23 is three things came together. The first one is the economic situation in Vietnam was deteriorating, not massively so, but it came up from 6% GDP growth to 3% to 4% GDP growth. There was also not economic stability or political stability. And the consequence of also drink driving regulation was also very prominent. So we had consumers who were feeling less confident, channel mix that was starting to happen because of these policies, there was a shift from on to the off-trade and mainstream brands became acceptable socially. Those were the macro changes that were basically in those years, putting a very strategic frame around the dynamics that we were facing because we were a premium business and really very much skewed towards the on-trade. So it was quite existential what happened.

What the team has really done is basically went back to the roots and saying, well, how do we unlock the off-trade channel? How do we build a more versatile portfolio, not only in premium, but also in mainstream and how do I get deep consumer understanding to unlock that potential. All of that has now been in place.

And I think that the results in the second half of last year and the first half of this year show that we can turn around these situations quite quickly, adapt portfolio and route-to-market models quite quickly, and we're very pleased to see the results. And actually, we're getting now to record market share levels. So a big call out to the Vietnam team there as well. I don't think that this is a one-off. But to your last point, we see now market growth between 6% and 7%, and we are growing far above that. Let's be a bit modest about that. I'm not sure that with excise changes, we should bank on a 6% to 7% market growth. Let's half that. And I also believe that our acceleration of out-performance is something that we should take humbly. And therefore, I don't think that we should indeed pencil in these growth rates going forward, but be proud of what we have been achieving.

And will the tax change cause any sort of fluctuation is something we need to overly worry about?

So we don't think so. We have had very good dialogues with the government about how to face these tax changes over the years. So they are coming in a phase of the next 7 years, and we believe that this is quite manageable.

I wanted to move on to actually sort of appreciate in the last sort of 3 minutes, talk a little bit about cash, but also sort of COGS margins. We're in a sort of volatile world. But actually, I'm sort of really interested to hear your views around -- it feels like almost the -- I don't always call them emerging markets, but actually these developing markets are actually a bit more sort of adaptable to inflation than actually some of Europe is, the real wage growth catches up a little bit more. So I'd love your observations on that. And then just how we think about COGS, whether it's sort of barley and the sort of not left field, but diesel and things, which often get -- just to look at the oil price and draw a straight line, but diesel and things, how do we think about that in the context of Heineken over the next 12 months, 24 months?

Yes. So the way that we are thinking about it is what is happening in the world of raw materials and packaging materials, which is inflationary driven because of energy and in particular, aluminum at this moment in time. And secondly, about what is happening to currencies because ultimately, we are pricing for devaluating currencies as well. And to your latter point, I think the developing markets have done an awesome job at the moment, to look at the world -- the state of the world and manage their macroeconomic finances in a quite responsible way, whether this is the African markets or the Asian markets, temporary subsidies on diesel in order to get the machine going of their economic infrastructure. So a very responsible government policy that has helped contain that.

And therefore, as a result, we have had a more benign foreign exchange environment in the context of what is still an inflationary environment from a commodity and energy point of view. And hopefully, that will set us up for a less disruptive effect, but still inflationary impact, we believe, in 2027.

But it seems the demand backdrop again compared to previous cycles, therefore, as well is -- I mean, there will be volatility. There will be an impact, but it seems to be a more moderated impact.

Consumer confidence does a lot because in many markets, when there is consumer confidence, people go out and enjoy a beer. And this is good for our category.

Well, coming back to cash and things like that. Again, you're delivering. You've been -- all the share buybacks announced and things. Net debt to EBITDA is only slightly ahead of target. What is the plan for cash from here when you think about your capital allocation policies?

Rupert, it's a fantastic question with 20 seconds on the clock. Cash gives us optionality. And one of the things that we really wanted to get right in Heineken is to really be focused much more on shareholder value creation and economic returns. Return on invested capital does that and cash gives us optionality for share buybacks, organic growth or inorganic growth. Let's see what it brings.

Thank you for that. Thank you very much for your time, Heineken team, hugely appreciated, and thanks everyone for attending.

Thank you very much.

Good morning all, and welcome to today's Heineken Half Year 2026 Results Call. My name is Seth, and I'll be the operator for your call today. [Operator Instructions]

I will now hand you over to Tristan Van Strien, Director of Investor Relations. Please go ahead.

Thank you, Seth. Good morning, good afternoon and good evening, everyone, from Amsterdam. Thank you for joining us for today's live webcast on our 2026 half year results. Your host will be our CFO and member of the Executive Board, Harold van den Broek.

Following the presentation, we will be happy to take your questions, as Seth had mentioned. The presentation includes expectations based on management's current views and involve known and unknown risks and uncertainties, and it is possible that the actual results may differ materially. For more information, please refer to the disclaimer on the first page of this presentation.

I will now turn over the call to Harold.

Thank you, Tristan, and good day to you all. Let me take you through the results for the first half of 2026. First, a brief reminder of our EverGreen 2030 strategy. To create sustainable value, we focus on 3 strategic priorities: growth, productivity and future fitting Heineken. Growth is our #1 priority, and we build balanced sustainable growth through our global and local power brands and prioritize markets where we see the greatest long-term potential.

Productivity and capital efficiency are important enablers to fund the right growth investment, strengthen profitability and improve shareholder returns. And we continue to future-proof the business through digital and AI enablement, sustainability and responsibility and creating the right organization and talent base. We measure our progress along the 4 dimensions on our Green Diamond in pursuit of attractive shareholder returns.

The first half results show ample proof points of how execution of our strategy are delivering quality results. And let me, therefore, start with the highlights. We delivered quality growth with volume momentum improving through the half, driven by strong performances in the APAC and Africa/Middle East regions and recovery in Europe. Let me say upfront, we are not satisfied with our America results and the necessary actions are taken to improve that. Our total volume growth was driven by our 5 global brands and top 25 local power brands with our focus markets delivering more than double the Heineken average growth rate.

Cash conversion was strong, helping fund attractive acquisitions such as FIFCO, an increase in interim dividend and a continuation of our share buyback program. And we progressed with pace on the EverGreen 2030 change priorities, innovation, digital and AI enablement, operating model simplification and Heineken Business Services.

Profitability was robust, supported by broad-based productivity and leading to a margin expansion. We reduced around 3,000 FTEs in the first half, materially advancing our planned organizational changes. We are confident in our strategy and progress, yet remain prudent given ongoing macroeconomic and geopolitical uncertainty and therefore, reiterate our full year operating profit growth guidance of between 2% and 6%.

Let's now turn to some numbers with the financial highlights. We delivered total volume growth of 1.6%, led by Heineken and with strong profitable contribution from licensed partners in China and India. Net revenue grew 2.7% on a consolidated volume basis with net revenue per hectoliter up 2.3%. Operating profit increased 6.7%, with operating profit margin expanding by 55 basis points. Net profit was up 10.2% and diluted EPS came in at EUR 2.29, an 11.6% increase on a constant currency basis.

The first half, therefore, shows balanced delivery, volume growth, value growth, profit expansion and stronger cash flow generation. The quality of our growth is visible across the portfolio. Whereas total mainstream volume declined slightly with more work to do on that. And as an aside, mainstream grew in our focus markets, total consolidated volume grew 0.4%, total volume by 1.6%, global brands by 5.3% and premium volume by 5.8%. A strong result also from Heineken 0.0, up 7.2% and beyond beer by 7.7%. And this is the balance we want, growing volume, improving value and allocating resources where we see the strongest long-term growth opportunity. The right side of the chart shows the operating leverage coming through with 6.7% operating profit growth and net profit growing double digits and EPS, as Jens mentioned, ahead of that.

Let's turn to our flagship brand, Heineken, which again led the premium growth of this half year with 5.3% of total volume growth and 18 markets in double-digit growth momentum. Heineken 0.0, as mentioned, grew 7.2%, showing the continued relevance and the long-term potential of the no-alcohol category, which in aggregate in our portfolio was up 7.5% in volume. The ongoing success of Heineken Silver continues, growing 34.5%, particularly in APAC, led by Vietnam and China. You've perhaps noticed the beautiful picture on the left of the expanded Heineken product family, now including our recent innovations as we meet evolving consumer needs as the leading global premium beer brand. We launched Heineken 0.0 Ultimate in the U.S., zero alcohol, zero carb, zero sugar, as well as flavored 0.0 propositions and launched Heineken 3.5% Ultimate in Brazil, a lower alcohol gluten-free proposition where our consumers can enjoy everything you want in a beer and nothing you don't.

We are proud that Heineken was named Creative Brand of the Year at the Cannes Lions International Festival of Creativity, becoming the first beer brand to receive this distinction. The award recognized the strength of our campaigns, which build on the brand's purpose of bringing people together. The long-term sustained success of Heineken brand is no coincidence, and that's why we are now having started to apply the Heineken brand model on our global brands to unlock their full consumer potential across our markets.

Let's therefore turn now to our global brands for a minute. We are pleased with the performance all in growth this half year and in aggregate, delivered 5.3% volume growth and a few highlights outside of the Heineken brand that I just touched upon. Amstel growth continued strongly, led by China, Brazil and South Africa, and Amstel Ultra is now the leading Ultra brand in Brazil. Tiger returned to high single-digit growth, led by Tiger Crystal in Vietnam as well as strong consumer activations in Myanmar. Birra Moretti did well in Europe, particularly in Switzerland and France. And Desperados continued to build relevance with Gen Z consumers. More and more, we see the potential of this brand coming through in the markets. The consumer pool is obvious and the common threat to unlock the potential is sharper focus, clearer brand governance, more disciplined resource allocation and differentiated execution across markets.

Let's for a moment, double-click on Desperados. Desperados is a good example of how we are recruiting consumers with our beyond beer portfolio. Desperados is our leading Gen Z brand in beyond beer. The proposition is built around flavor, variety and flexible social occasions, exactly the spaces where our consumers are looking for more choice and more excitement. There is an innovation model behind it. Beyond the core proposition, we are extending the brand into new consumer opportunities with Desperados Sunlight, which targets lighter alcohol daytime occasions and introduce more experimental concepts from our consumer experience center, La Fábrica, such as Freeze and Pico, a Desperados Essence shot for a different kind of vibe, which our consumers were able to enjoy across festivals in this summer.

The early proof points are encouraging. In the first half, Desperados grew high single digits, driven by strong performances in France, the Netherlands and Spain. In Africa and Middle East, the brand also grew strongly, led by Nigeria and Ivory Coast and supported by the recent launch in Ethiopia. Desperados is establishing a following based on a repeatable platform, a distinctive brand, a clear Gen Z attraction, flexible flavor-led innovations relevant from Europe to Africa with more to come.

Innovation is how we bring growth and excitement into the category. It is beyond introducing products to consumers. We are systematically changing our innovation approach. With consumer-relevant insights, we are developing, testing and executing faster with more discipline, focused pilots, speed learning and scaling what works.

In the first half, we executed more than 40 pilots across global brands, local power brands and new growth bases. On global brands, examples include extensions on the Heineken, including Ultimate 0.0 and new Heineken 0.0 flavors such as Nectarine Juniper and Cold Pressed Lime. From Heineken Studio, we crafted Heineken Witpils in the Netherlands, named Heineken Blonde de Blé in France. For local power brands, we scaled innovations such as Cruzcampo Sevilla Orange, Kingfisher Smooth and Tecate Titanium.

We innovate across channels and for new occasions. For instance, we introduced the Old Mout flavor wave draught system that offers exciting consumer flavor choices, yet does so efficiently for publicans in the on-trade. With Heineken Costa Rica, we acquired not only a great business, but also strong innovation capabilities, showcased by Vida, a functional sugar-free nonalcoholic drink that we launched in the market.

In the U.K., we are pioneering with outdoor brewing 0.0 beer that hydrates with magnesium and vitamin C, low in calories and gluten-free. And we are innovating in the aperitivo occasion in, where else, Italy, with our beautiful Sicilian brand, Birra Messina. As you see, we systematically accelerate innovation to respond faster to evolving consumer needs, exciting consumers with new experiences and scale what works with more discipline.

On brewing a better world, we have sharpened the agenda around the areas where we can have the greatest positive impact and supports long-term sustainable growth for Heineken. On responsibility, we are increasing choice through low and no alcohol and continuing to invest in responsible consumption campaigns. On social impact, we are strengthening our diverse talent base and focusing on community impact with practical support for hospitality workers and entrepreneurs.

On environmental progress, we continue to decarbonize our operations and improve water resilience, including additional water balance sites and renewable energy milestones in Europe. In all of these priority areas, we are continuing to make substantial progress towards our longer-term ambitions.

If we now move to the regions, starting with Africa, Middle East, which delivered a strong first half with net revenue up 8.2%, total volume up 2.9%, a price/mix of 7% and an operating profit up 30.8% with hard currency profit supported by a transformed cost base and stronger balance sheet positions. In Nigeria, we delivered broad-based growth and strengthened category leadership in what still is a challenged consumer environment. Through portfolio mix and strong cost discipline, operating profit grew in both local and reported euro currency.

Heineken, Desperados, our Stout portfolio and Maltina all maintained or strengthened their leadership positions. Heineken Beverages continued to show multi-category progress. In South Africa, beer performed well, led by Amstel, now proud of the partnership with the legendary Orlando Pirates, but also with Heineken, Windhoek and Sol contributing. Bernini remains strong in ready-to-drink and the wine portfolio was stable.

In Ethiopia, we continue to reinforce our leadership in one of Africa's fastest-growing beer markets. Revenue grew in the 30s with strong volume expansion, led by Harar, Bedele, and Heineken. And at Heineken, we have extensive experience in Africa. We understand the region has ups and downs, yet believe in the long-term potential of the continent. I mentioned this to emphasize that the strong regional performance we have now consistently seen for some time is driven by good foundations, category leadership positions, a strong brand portfolio, disciplined execution and the sustained benefit of productivity actions taken over the recent years.

Then, on to the Americas. As said, we are not satisfied with our performance. Let me state that upfront and clearly, but we are also not structurally concerned. According to our data, consumer offtake in our 3 big markets was negative due to subdued consumer sentiment and macroeconomic drivers. In those, we lost some market share in the first half year. Net revenue was flat. Total volume declined 3.4%, price-mix was positive at 3.4%, and operating profit grew 2.2%. So the regional story is one of getting back to share growth through disciplined execution in softer markets, and Alex and the American team are really all onto that.

Let me give a few market specifics. In Mexico, volume was down in a soft market with our performance improving during quarter 2, setting us up for a better second half of 2026. Tecate, our largest local power brand, remains the focus of commercial and marketing activity, supporting by innovations next to Indio, our local heritage brand. Within premium, Miller High Life grew in the high teens. In Brazil, the category remained under pressure, down 3.6% for the first half of 2026, but trends improving during the end of the second quarter. Revenue grew low single digits, driven by price-mix. Operating profit expanded strongly through productivity initiatives and supply chain optimization following the opening of the Passos brewery.

We launched Heineken Ultimate 3.5%, a gluten-free lower alcohol proposition with promising early results, while Amstel delivered growth and its Ultra variant continuing to lead in the Ultra segment. Costa Rica made a strong first contribution following completion of the acquisition on the 30th of January. Integration is ahead of plan, including synergy capture, and the business brings a strong portfolio and innovation agenda, as can be seen on the slide with the new Imperial Michelada. All in all, a mixed performance, yet one we are confident to improve upon. The long-term potential of this region is undisputed, and we will continue to strengthen our portfolio and execution with appropriate investment to capture it.

Asia Pacific delivered excellent results with net revenue up 10.5%, total volume growing at 11.6%, a price-mix of 4.5% and operating profit up 17.7% A quick obvious reminder that our strong China growth is not captured in our consolidated net revenue. Vietnam delivered record share in both the on and the off-premise driven by the portfolio strength. We saw mid-single-digit category growth and our business momentum reflected a strong festive season in which our premium portfolio outperformed. We expanded national coverage and Heineken Silver had another outstanding half year. The Tiger brand was back to volume growth led by Tiger Crystal. We also introduced Tiger Smooth, a 3.4% alcohol proposition built around a clear consumer need, a smoother, easy drinking lager that stays true to Tiger's bold spirit.

India continued to build on its leadership in a high-growth beer market. We grew total volume high single digit as we leveraged our scale and national footprint as market leader with premium growth led by Kingfisher Ultra and Heineken Silver.

And in China, our growth momentum continued, now 8 years in a row in great partnership. Our portfolio of Heineken Original, Silver and Amstel grew close to 30%, and China remains a top 3 market contributor to net profit in the first half of the year. This is a good example of the quality of growth we are targeting, strong market positions, premium momentum and disciplined execution in high potential markets with discipline on cost and cash a very strong value creation engine.

Let me double-click on Vietnam and India because these are 2 strong examples of where our advantaged positions in Asia Pacific are compounding over time. And starting with India, we are the clear leader at scale. We combine Kingfisher, India's strongest national beer brand with international premium brands such as Amstel and Heineken, and we operate the broadest commercial and supply footprint in the beer industry. This nationwide presence, a balanced supply chain across owned breweries and long-term licensed partner brewers gives us a great platform as the category accelerates.

The market is also benefiting from favorable consumer trends and a progressively more supportive operating environment for beer in several states, helped by Brewers Association's efforts to ensure quality operations and responsible category dynamics. We are investing behind that opportunity through premiumization, cold beer refrigeration and commercial execution at scale, supported by greenfield investments such as in Andhra Pradesh.

In Vietnam, we are on track to build broad market leadership. The business now has record market share across both on and off-premise, supported by national coverage and a differentiated portfolio across premium, mainstream and value. Innovation and execution are also contributing with Tiger revitalized and stronger participation across occasions and price points. Both markets show how stakeholder engagement, brand strength, scale, route to consumer, supply chain and disciplined investment can compound over time to unlock real market potential.

Turning to Europe now. In Europe, results recovered, supporting by strong activation, innovation and transformation. Net revenue over the first half of 2026 was up 0.1%, whilst total volume declined 0.6% and price-mix was flat. Operating profit grew 0.6%. Perhaps worth pointing out improved momentum in quarter 2 with volume positive 0.2% and revenue up 1.6%.

In the United Kingdom, our system strength drove volume and revenue growth. We grew market share in the off-trade and in the on-trade, our Star Pubs continued to outperform the broader pub market, while Cruzcampo, Murphy's, Foster's and our premium cider portfolio supported its momentum.

In Western Europe, customer partnerships and innovation helped rebuild momentum. France delivered mid-single-digit volume growth as weighted distribution recovered from the retailer dispute last year with innovation and strong summer activation supporting the growth.

Finally, an efficient operating model and cash delivery remained important components to sharpen Europe's value creation model. The setup of multi-market organizations is helping simplify our business, supporting scale and productivity. Strong discipline on cost and cash conversion also supported the region's performance.

Now let's go through the financial highlights, which I keep briefly, relatively brief. Starting with net revenue. We delivered 2.6% organic net revenue growth, reaching EUR 14.8 billion in the first half. On the bridge, consolidated volume growth contributed EUR 57 million and price-mix EUR 328 million, resulting in EUR 385 million of organic revenue growth. Consolidation changes added EUR 325 million, mainly reflecting the acquisition of Heineken Costa Rica, partly offset by a EUR 57 million currency translation headwind.

Net revenue per hectoliter increased 2.3%, reflecting disciplined revenue management and positive mix. Growth was led by Asia Pacific and Africa, Middle East, with Europe broadly stable and the Americas flat despite volume pressure, as you just heard. Importantly, growth came from the markets which we -- where we have chosen to focus. Our focus markets delivered over 90% of Heineken's organic net revenue growth, led by Vietnam, Ethiopia, Nigeria, India, Brazil, the U.K. and France.

Moving on to operating profit. We delivered close to EUR 2.2 billion of operating profit, growing 6.7% organically with operating profit margin expanding 55 basis points to 14.6%. Organic growth contributed EUR 135 million, consolidation added EUR 46 million, mostly reflecting Heineken Costa Rica and the disposal of the Democratic Republic of Congo and currency translation was a EUR 38 million headwind.

Given the differences across regions, a brief color. Africa and Middle East was an important contributor to the organic profit growth, led by Nigeria and Ethiopia and supported by pricing, revenue management, productivity initiatives and a much improved cost base. Asia Pacific also delivered strong operating profit growth, led by Vietnam with China supporting through license income and share of profit, so not fully reflected here in the operating profit bridge.

Drivers with a double-digit volume growth, favorable portfolio mix and productivity actions in key growth markets. In the Americas, profit grew despite softer volumes with Brazil supported by price-mix, improved customer and channel mix, productivity initiatives and supply footprint benefits. Results from Heineken Costa Rica are recorded as consolidation differences.

In Europe, savings and cost discipline helped offset a declining category, negative channel mix as well as higher regulatory costs and competitive investments, mainly in pricing and brand activation. Head office costs were a slight drag on organic profit growth. I would position this as temporary transition-related costs towards a simpler and more scalable organization.

Variable costs increased by low single-digit per hectoliter with growth savings helped to mitigate inflation as we kept pricing below inflation in many markets. Marketing and selling expenses remained at 10.1% of revenue with stronger resource allocation supporting our brand and marketing priorities and investments in sponsorship and in-trade execution. Overall, we expanded operating profit margin while continuing to fund growth momentum.

Let me turn to other key financial metrics. At the middle of the slide, you see that net profit increased 10.2% organically to EUR 1.256 billion, and diluted EPS was EUR 2.29, up 11.6% on a constant currency basis. It reflects the strong operating profit delivery with the operating profit to net profit conversion broadly in line with last year. Share of profit from associates and joint ventures increased 19% organically to EUR 159 million, supported by profit growth from associate partner in China.

Net interest expenses were EUR 287 million on a beia basis. The organic development was favorable. The reported line includes consolidation and currency effects. Other net finance expenses improved organically to EUR 76 million, supported by lower losses from currency revaluations on outstanding foreign currencies payables. The effective tax rate was 29.7%, slightly higher than 28.9% last year as Heineken Costa Rica was integrated in the footprint. Net debt-to-EBITDA was 2.6x, slightly above our target of below 2.5x, mostly reflecting the acquisition of Heineken Costa Rica. And finally, the interim dividend is proposed at EUR 0.76 per share, in line with our dividend policy to pay out 40% of last year's total dividend.

Let me now turn to free operating cash flow. We delivered a strong step-up in cash generation, with free operating cash flow increasing to almost EUR 1.4 billion compared with EUR 257 million last year. This represents a total improvement of EUR 1.1 billion and a cash conversion ratio of 97%. The improvement was mainly driven by stronger working capital performance and lower CapEx. Working capital moved from a EUR 405 million outflow last year to a EUR 290 million inflow this year, an increase of around EUR 600 million, driven by better inventory and payable days.

CapEx was lower at EUR 1.1 billion or 7.2% of net revenue, significantly below the 9.9% ratio of last year, driven by improved capital phasing and tighter capital discipline. Our rallying cry of growth without CapEx resonates and helps us think and act differently with opportunities to unlock additional capacity from existing breweries through research and development, recipe and process improvements as we have seen, for example, in Rwanda and Ethiopia.

Costa Rica also contributed to the cash performance with strong cash generation in the first month since acquisition, supported by improved payment terms and disciplined financial management. Overall, our capital productivity focus under EverGreen 2030 is starting to deliver stronger working capital management, more disciplined capital deployment for more cash and higher returns on invested capital.

We are accelerating our EverGreen 2030 execution. As we mentioned earlier, on our growth priority, we are stepping up our innovation efforts through a more agile pilot and scale model. We are brewing the future with Heineken Studio, our consumer-facing innovation center here in Amsterdam, where we can experiment at pace and improve through continuous and direct consumer feedback.

In parallel, we expanded the deployment of AI and digital capabilities across the business, including the global rollout of MyFreddyAI, an AI-powered platform supporting our commercial teams with global insight while ensuring local relevance. Together, these initiatives enable faster execution, stronger consumer engagement and will drive sustainable growth.

Let me briefly turn how we are building the organization to deliver EverGreen 2030 with more speed, scale and discipline. This is the next phase of our productivity agenda, building the capabilities to invest behind growth, improve efficiency and strengthen execution. And Heineken Business Services is an important proof point. We already have circa 4,000 people in our Heineken Business Services, reflecting both the capabilities we already have built and the roles we have started to move into the network. With centers in Poland, Mexico, Brazil and India, HBS is now becoming a global capability platform, expanding specialist capability across finance, procurement, HR, data analytics and AI.

The point is not only lower cost. HBS helps us to standardize processes, connect data, scale automation and robotics and build digital and AI-enabled ways of working. This should deliver better, faster and more consistent services while giving operating companies more focus on growth and commercial execution. The second proof point is in Europe, where we have launched 4 multi-market organizations. These so-called MMOs allows us to pool resources and capabilities across countries, combining local proximity with greater scale and more efficient execution. These are part of a broader productivity and operating model agenda. And across the group, productivity actions materially advanced in the first half, including a reduction of circa 3,000 FTEs while we continue to build a simpler, more scalable organization through HBS, MMOs and clearer ways of working.

Let me now turn to a short reminder on our capital allocation priorities. We invest first behind our organic growth and business expansion while maintaining strict financial discipline and our long-term net debt-to-EBITDA target of below 2.5x. We ended the half at 2.6x, reflecting, of course, the acquisition of Heineken Costa Rica, but are on track to be below our target this year. We value a consistent dividend policy and propose an interim dividend of EUR 0.76 per share. We recently updated our payout ratio for the full year to be in between 30% to 50% of net profit.

We continue to shape Heineken's advantaged footprint. And with Heineken Costa Rica, we materially strengthened our position in Central America, while the DRC disposal gives the opportunity to continue building our brands in that market with an asset-light model. Combined, this is expected to add 2% to 3% of earnings per share.

And finally, we remained in the second year of our EUR 1.5 billion share buyback program, which on a reduced share count should be around 2% accretive to EPS this year. Overall, the framework is unchanged: invest for growth, protect the balance sheet, maintain a consistent dividend policy, pursue value-enhancing acquisition and return excess cash where appropriate.

Let me close with the outlook for 2026. We remain confident in the execution of EverGreen 2030, but prudent in our expectations for the remainder of this year. We assume continued macroeconomic and geopolitical uncertainty and an unchanged consumer environment in most of our markets. We continue to invest behind growth and adapt our operating model with speed. Gross savings are expected towards the upper end of our EUR 400 million to EUR 500 million guidance range, helped and will help mitigate parts of the emerging cost pressures related to the Middle East situation.

And as a result, we expect to -- we continue to expect variable costs to rise by a low single-digit per hectoliter, broadly in line with previous guidance. We expect the effective tax rate to be around 28% towards the upper end of our previous range of 27% to 28%, reflecting the inclusion of Heineken Costa Rica and other assumptions are broadly unchanged.

All in all, we reiterate our operating profit growth guidance to be in the range of 2% to 6%. Note that based on current spot rates, currency translation is expected to be slightly favorable to operating and net profit.

Finally, on EPS, the acquisition of Heineken Costa Rica and the DRC disposal are expected to be 2% to 3% accretive for full year '26 and the ongoing share buyback adds about 2% to EPS. Together, this reinforces the value of disciplined capital allocation while we continue to invest behind growth and maintain balance sheet discipline.

So to summarize, we delivered quality volume and revenue growth, robust profit delivery and strong cash conversion in the first half. Growth was driven by our global and local power brands in focus markets, while productivity supported margin expansion and returns. You also heard many examples of how we accelerate implementation of Evergreen 2030, including innovation, business services, multi-market organizations and operating model simplification. And we reiterate our full year operating profit guidance of 2% to 6% growth.

With that, thank you for listening, and we're happy to take your questions.

[Operator Instructions] First question on the line is from Edward Mundy with Jefferies.

So 2 questions from me, please. The first is really around EverGreen 2030, which appears to be working quite nicely given the good balance of volume, sales, margins and cash. As you step back, what do you think are the 2 or 3 things that you're doing differently under EverGreen 2030 that's driving this better performance? And do you think this argues for continuity with the strategy as the new CEO comes in?

And my second question is on the guidance. Clearly, you've delivered above the guidance range of 2% to 6% in the first half, and that would imply some slower growth coming through in the second half. Other than Middle East uncertainty in some of these emerging cost pressures, what do you think continues into H2? And what do you think changes into H2?

Thank you for the question, Ed. First, on EverGreen 2030, I think you will recall during our Capital Markets Day that -- this very much is built on the foundations of EverGreen 2025. I think we've got the megatrends right. But your question is what are you doing differently? There are 3 things. The first on growth, we are very intentionally now starting to focus on fewer markets and our global and local power brands and are differentiating across the roles that these brands have in our portfolio, but also differentiating across the operating company value roles that we have. So this notion about how do we focus and how do we differentiate is really starting to kick in, as you can see from our results.

The second one is how we build both Heineken's global scale, but also leverage the skills that we have in some of the markets more broadly across the organization. And this is, for example, true in moving from brewery optimization to supply chain optimization, but also to really unlock skills with, for example, the introduction of Freddy AI, where marketing practices are just simply flowing faster through the system, and that helps us to build global brands with the power of the learnings of the Heineken brand behind it.

The third one is that we are just faster as an organization because we are more intentional in what we want to achieve and the executive team, even without CEO leadership is very effectively in raising topics when they need to be raised, but then really deploying at speed in the market to really focus on execution and delivery and transformation. Those I would call out as the 3 things which are really changing. And my own view is that this will certainly continue in the second half of the year as Rafa will start learning about the business as from the 1st of October.

Then on your point on the guidance range, I think it's -- we are very pleased with this set of results because as you rightly point out, it's volume growth, it's revenue growth, it's operating leverage. At the same time, we do really not see any good reason to narrow the guidance range at this moment in time. There is still uncertainty in the world. We also know that the Vietnam growth that we see in the first half of the year was boosted by -- with a very strong festive season and really very strong market share gains. And we, as we said, are not satisfied with our Americas performance, and we'll continue to invest and focus on accelerating that performance. And within that, we felt it was appropriate to basically stick to the guidance range and continue focusing on strengthening our business and securing consistent delivery.

Next question is from Sanjeet Aujla from UBS.

A couple from me, please. I think, Harold, a couple of times on the call, you alluded to not being satisfied with the performance in America and alluded to perhaps increased investments coming through. Is that -- can you just go deeper into what sort of investments you think you need to make to improve competitiveness? Is that marketing led? Is it route to market? Is it pricing or a combination of all? And is that something that we've seen already in the second half of the year?

And my second question was really on Europe. So I think the pace of volume decline has improved over the half year. There's still a lot of productivity coming through Europe, I think, probably accounting for a disproportionate amount of those savings. So I'm surprised why margins are not stronger in Europe in the first half of the year.

Yes. Excellent questions, Sanjeet. Look, we decided to be very clear on how we assess our performance in the Americas. And indeed, we are not satisfied with the performance. And you would hear the same from Alex, Mauricio and Oriol in all of those markets. So this is very intentional. How to go -- let me first start with some positives here. We saw improved momentum towards the end of quarter 2. So we know that we're on the right track to restore competitive performance. We are also pretty confident, Alex and the team, that this will be sustained in the second half of the year because we see the early results of our actions. But what has happened? Go a little bit deeper into this.

The first one is let's look at the movie over a longer period of time. And I do want to start there because the point that I called out in the script was that I were not structurally concerned about our Americas position because we believe in the market, and we believe in what we have in our big operating companies. We have fantastic Six stores. We have a fantastic route to market in Brazil. We have fantastic brand portfolios, and we have innovation now kicking in. So a movie is we're very happy with our performance and the structure that we've built. The scene, the shorter term, as you will remember last year, when we were speaking about, let's call it, the volatility that we caused in our organization by going into channels with pricing discounting actions to support a fantastic growth momentum that we saw, particularly in Brazil.

And that is now basically the after effects of that. So we are really trying to get the channel strategy, the portfolio strategy and the pricing strategy right and really focus on brand power and execution excellence to really bring that sustained growth back into the organization. It's just big markets, complex markets, complex route to market, so it takes time. And I did speak in quarter 1 about the fact that we would see improvement only in the second half of the year, and that is what we're seeing now.

The second one is how we drive innovation. And a good example of that is the launch of Heineken Ultimate in Brazil, a 3.5% proposition gluten-free, who has just been recently launched, but the early signals are fantastic, not only in the month of June, but also -- and I'm not going to comment more on that. In July, that momentum continued. So it's early days, but you also know how big the Heineken franchise is in Brazil. And if that starts firing, we really start to see an important contribution from innovation coming to the fold as well. So there are specific interventions by market with investments to bring back operational execution, price competitiveness and innovation support that will sustain that success in the second half of the year.

If I then can move to Europe, you're right to, first of all, celebrate that the category has become more stable in Europe because last year, Europe was quite in low single-digit decline as a market, not only our performance because you know that we had that retailer conflict, but the market this time around is broadly flat, slightly declining. What is not helping us is still an adverse channel mix because on-trade is not back and off-trade is growing. And that really means that, that productivity muscle that Europe is doing is really catering for the negative channel effect.

And secondly, also very intentionally, we are investing in brand activation. We're investing in key brand support. We're investing in innovation, and we are pricing below inflation to bring affordability back into the category. So part of the reason why you see the European improvement not yet flowing through the bottom line is that we are prioritizing share and category recovery over the quick buck to get Europe back to margins. Of course, this needs to happen over time.

The next question is from Laurence Whyatt with Barclays.

Two for me as well, please. In China, you mentioned it's now a top 3 profit market, and you've been delivering excellent results there for a number of years, sort of 20s, 30s growth rates. Of course, we've seen companies deliver very strong growth in China in the past and have sort of slowed down as the overall China beer market has been declining, I think, for over a decade now. When do you think -- do you think it's ever possible that the Heineken growth rate might come against the sort of larger declines in the overall China beer market? Or how long do you think you'll be able to deliver this sort of double-digit volume growth given the distribution benefits that you enjoy in that market?

And then secondly, I'd love to hear a bit more about the Heineken 0.0 Ultimate launch and how that's gone in the markets it's gone into, whether you'd expect to explore some additional markets for that brand and how it sort of played into the flavored line extensions that you've also launched on that brand?

Thank you, Laurence. And thanks also for a question on China because you heard a little bit of my frustration coming through that we can't bank this on the net revenue line, but it is a very important part of our business. And you heard me say before as well, but we continue to be very confident that this growth is sustainable for a few years to come. Yes, the total market is in decline, but let me remind you, we are 30% of the distribution on the Heineken brand. And Amstel, which is now close on an annual basis to about 1 million hectoliter is actually almost growing twice, 2x, twofold is the right word. And that's only unlocked in the Northeastern province at this moment in time. So there is a lot of excitement with our partner on the potential of the Heineken portfolio, not only in Heineken that continues, and we are investing to first create demand before we put distribution in there, as you know, but also on the Amstel brand that is really starting to play a very significant role there.

Importantly, as a proof point of that, the rotations per, let's call it, point of distribution continue to go up. So it's not only that we are seeding more distribution points, we also see velocity of our brand portfolio still growing. So this gives us confidence that we are in the journey for some time to come, and so does our CRB partner because, as you know, this growth trajectory is very firmly regulated through a very appropriate joint venture and contractual agreement. So we're all putting investment and focus in to make that growth come through.

Then on 0.0 Ultimate, I think maybe it's good to zoom out and not go on to a specific product formula only. What you see happening with our flavor variants with Heineken 0.0 Ultimate with Heineken 3.5% Ultimate in Brazil is that we're opening up our strongest brand to cater for more consumer occasions. And this really is the macro picture that we're trying to display. And we know that in Europe and in the North America, the Heineken Silver franchise did not work. But I also want to point out that in Vietnam, in China and therefore, in APAC, we still delivered 34.5% growth. So the Heineken brand has much more consumer appeal, and that's what we're trying to broaden out. The precise articulation of that may differ market by market, but we're very encouraged with the early successes that we see. It's a bit too early to be specific about what is working, what is not working. That is first test and scale.

The next question is from Olivier Nicolai from Goldman Sachs.

A couple of questions, please. But first, a follow-up on the press release. Just on the head office costs, it was negative in H1. How much of it was due to the EverGreen weighted cost savings implementation? And how much should we expect for H2? Because presumably, on one hand, you get the royalties as well from your license volumes. So just would be keen to get a bit of your view on this, which is a bit of a black box from the outside.

And then 2 questions. First on Mexico. I mean, Heineken has been losing share in Mexico this quarter, but also over time. How can you improve your share performance despite your geographic footprint within the country where you are much more exposed to the North where per capita consumption is high and offer less upside?

And then lastly, I've noticed, and I think it's the second time that you mentioned the brand in the press release, but Murphy's volumes doubled in H1 in the U.K. We've seen in recent press reports that the on-trade distribution was getting better. What's been the initial feedback on the brand? And how big could it become for Heineken U.K.?

Thank you, Olivier. But that's a wide variety of questions, I have to say, Olivier, really, really nice. We can go all the places. So first on head office cost. Let me ask you to pick up with Tristan and the IR team, the specific details because I'm aware that this is a bit sticking out, but perhaps good for you to know that this is really transitionary in nature because, of course, what we are building is a changed evergreen model with Heineken Business Services with D&T acceleration, with the head office transformation, and this comes with incremental cost. And that is just a transitionary element of the model that we're building. That is true in half 1. It will also be true in half 2. But the specifics on the numbers, I would like you to speak to Tristan because I think that's more appropriate and not take too much time on this call. I'm not so worried about it because it's basically building a stronger underlying business going forward.

Maybe to your point on Mexico, you are right that we have not been gaining market share in Mexico for some time. And everyone on the call knows that this has been due to the OXXO mixing effect and the buildup of the own Six stores. So I won't bore you with that long answer there. It's important to know that we are super happy with the Six stores and actually believe that there is a lot more potential in it, and therefore, we will continue to invest behind it. So part of the answer, how to improve and restore market share momentum is further unlock the potential of the 6 store franchise, which is now 17,000 stores across the country.

The other point that you also rightly point out is the channel and regional portfolio mix. And we are disproportionately investing outside of our North strongholds to ensure that there is more consumer choice also with our portfolio in the Central and South parts of Mexico, where there is still a very significant opportunity for us to grow.

And last but not least, it is really revolving around the strength of our portfolio. And this is where Dos Equis Indio as the traditional dark beer, which has a very important role to play, the value brand Carta Blanca, but also the investment in Tecate where the brand power is really growing. This is where ultimately the long-term success needs to come from. What is encouraging is that we slowly but surely start to see the premium segment start to accelerate, although from a small basis in Mexico. And just to point out that we are participating there and Miller High Life was really growing at the high -- what was it, high single digit or even double digit. So that was very encouraging for us to see.

Laurence -- sorry, Olivier, what is still the case is that this will take time because it really has channel and portfolio dynamics and those things really take time to build, but we're focused on it, and it starts with excellent execution. The Murphy's on-trade is a fantastic proposition, and we really start to see that there is an opportunity there. And we are also introducing the nitro can in Murphy's. So we do believe that there is a potential to accelerate that, and we're very happy with the growth that we're seeing.

Maybe worth mentioning also in Ireland showed really strong growth as well. So we're seeing a much broader expansion of the brand.

The next question is from Chris Pitcher with Rothschild & Co Redburn.

First question on Southeast Asia and India. I mean, at the start of the year, when we had the Middle East crisis, Strait of Hormuz situation, it was an area where people were worried about consumer demand on energy costs and margin pressure. But actually, it's been one of your stronger regions with very good margin performance in the first half. Are there still sort of phasing of cost effects to be mindful of? I mean, United Breweries was talking about costs as a result of it to think about in the second half? Or do you think it's realistic to grow margins in the second half in markets like Vietnam, Indonesia, India, et cetera?

And then just a couple of follow-ons. Apologies for that. On India, are you looking to sort of rebalance as part of your CapEx away from contract manufacturing? Or is that a model that's just going to continue to weigh on price-mix achieved in India because of that negative mix?

Yes. Chris, thanks. Look, I'm now going to give a real CFO answer, so brace yourself here. But we're very pleased with our results in APAC, as you know. But you're also right that there has been government support, for example, to keep diesel prices low, for example, food vouchers in Indonesia that helped consumers to the uncertainty of the Middle East crisis. Now I think part of this is real creating, let's call it, a platform for people to sustain livelihoods for those most in need. Part of it is also cushioning industries against certain shocks. So there has been active government interventions in Southeast Asia as well as India.

And I think also our team has done a really good job to navigate that volatility. But part of your question, therefore, is, look, is this going to be sustained or what do we think about the second half of the year? Some of these costs will start to flow through because it's a shock absorber. It's not a structural solve according to the governments. And part of the currency weakening that you have seen, for example, in India is also related to that. So we are being a bit cautious in terms of our APAC results for the second half of the year because we believe indeed that the first half is not representative of how we look at it going forward, while still being very proud of what the teams have done.

The margins, therefore, we're very happy with where they are. And as you know, both in Vietnam, we believe that the margin structure is where we want it to be. In India, it takes time to pass through prices, and that's an active dialogue with state-by-state governments in order to reflect the latest input cost on the pricing, which is why you heard UBL talk about the cost pressures. So different realities in different markets.

Maybe to close on the point of India, look, the one thing that makes us a standout company is that we have got the most widely set up brewery network, and that is a combination between third-party long-time contract brewer relationship and our own breweries. And depending on the reality, we will look at what is the optimal choice. So I don't see this as a strategic dilemma that we have. It's just a network optimization that we want to do. And frankly, partnership structures as we see in India and in China, as long as they are well governed and long term are a really important part of our whole ecosystem, and we're very pleased with them.

Next question is from Simon Hales with Citi.

I wonder if I could just come back to Vietnam to start with, please, Harold. Clearly, very strong delivery. I just wanted to dig in a little bit more on how we should think about that volume momentum and the scale of that into the second half of the year. I mean you called out the fact that clearly, you saw a festive season benefit in the first half, helping volume and margins. But a lot of that was in Q1 already where you were growing mid-teens. So it looks like growth accelerated from a volume standpoint into Q2, I think, driven by the share gain. I mean, is that share momentum really sustainable into the second half? Should we expect to see sort of very solid volume growth in H2 there? So just a bit more color there, firstly.

And then secondly, I was wondering if you could talk a little bit more about the U.K. pub business performance. Clearly, you're doing well in a tough market there. What are you doing to drive that Star business and sort of outperformance versus the wider sector?

Yes. Thanks, Simon. So first, look, I don't want to jinx the Vietnam performance. We're super happy with where we are. I think the team really is doing an absolutely outstanding role. But to your point, I don't think that we should get used to this. We really want to ensure sustained healthy growth. And just to give you a bit more specifics on that, as you asked, Simon, because it's relevant. We saw a market growth of about 6%. And this is our data, but I think that data is pretty appropriate there.

We then delivered record market shares, both on the on- and the off-trade, and that was boosted by a very strong festive season, where our portfolio, of course, outperformed because the festive season is a premium occasion, as you know. So we believe that, that market share gain had a little bit of a tailwind from basically that festive performance, but we're super happy to see the portfolio strength coming through with Heineken Silver really up in the 30s with Tiger Crystal now coming back and also the implementation of new innovation like the extra smooth variant of Tiger off to a good start.

What is important is that we're broadening the portfolio, but we're also broadening out geographically because we still have a big opportunity in some of the regions that were not fully present there. And that has played a part in the first half of the year, both portfolio and geographical expansion. I think that, that market share gain is probably a bit inflated because of the reasons that I said. The 6% market growth, I think, will be there to sustain because the momentum in Vietnam is pretty good and the government is stable. Population is feeling confident. The portfolio in geographical is really a factor of competitive market dynamics. So we're confident in the second half of the year, but not to the 20s that you saw in the first half of the year.

If you then look at the U.K. pub business, we are super proud of what our Star Pub team has been able to achieve. And you're right, we are really focused on building a fantastic portfolio. And just to call that out, we've invested about over EUR 200 million in our pub estate. We have a full brand portfolio there. So part of why we're outperforming is that people really see the premium experiences coming through. So a pub estate is not static. We are selling pubs. We are acquiring new pubs in order to meet differentiated consumer demands. For example, a little bit outside of city centers, offering better quality food with premium beer is really the trend that we've seen in the last couple of years. And we've invested, therefore, in better experiences, more light, premium occasions so that people are finding it worth spending their money. And with that, a premium portfolio is a perfect fit.

It's also for us a great opportunity to start innovating in. And that is what we also see. Beavertown continues to accelerate, but also the on-trade draft system that I was just talking about is still very relevant. We're also seeing, for example, an expansion of Murphy's in our own pub estate, and that is also conducive to growth. So it's really appropriate management of the pub estate being full on in terms of execution and upgrading and trading, which is what drives the success.

And of course, the recent government change is actually quite helpful. Yes. I wanted to get that in.

Our next question is from Richard Withagen from Kepler.

Two questions from me as well. First of all, on innovations, you mentioned a couple of times, Harold. I think there's increasingly more functional beers. Where is this especially a strong trend? And how can you differentiate your brands versus competition? And then the second question is obviously on -- well, obviously, it's on free cash flow, which was very strong. So why such an improvement, which seems a bit all of a sudden in the first half? And especially on the working capital benefits, are they sustainable?

Yes. Very good. So first on innovations. I think you're right to point out that there are very much evolving consumer needs there, but it's also good to recognize that these needs are different market by market. So when you're talking about, for example, functional beers, 0.0 is also a functional beer. Health benefits have different meaning when you're talking to a Brazilian or a Vietnamese. So it's a bit difficult to answer your question, let's call it, in the wider macros trend. But what we certainly see is opportunities in hydration, opportunities in flavors and opportunities in basically lower alcohol beverage propositions like the Heineken Ultimate without gluten, for example. So these are some of the functional benefits that we believe are scalable beyond and this is very important to do.

So how to differentiate? I think there are 2 answers, which may seem inherently conflicting. The first is brands matter. Our Heineken brand, which is why I emphasized it, carries so much quality credentials, has such a great following that innovation in Heineken, I'm not saying it's always a success, but it certainly always draws attention also because of our creative marketing campaigns. So global brand propositions like in Heineken, but what we also see, for example, in Desperados with lower ABVs in sunlight are really pulling consumers in into the franchise.

And then it really is about, as Bram would say, the delivery on product, taste and format will be locally relevant. So you will see us, therefore, talk about pilots and experimentation and scaling much more on functional benefit level, but potentially with different brand and product delivery expressions across market. That's how we think about it. And we are very pleased that, therefore, we are now having already in the first half of the year, 40 of these innovation pilots ready to be scaled upon proven success.

The second part of your second question is the free operating cash flow. And some of you on the call know that I'm actually very happy about the free operating cash flow and the return on invested capital delivery. It's a promise I made for some years, and I'm starting to see it come through, and this is sustainable because we see 2 factors. The first one is our capital demands are going down. We're still investing in innovation, in packaging material, in sustainability, but also in growth and productivity, but we are doing that more smartly and more cautiously. And part of the impact of this big EUR 1.1 billion, therefore, is a more even phasing of investment across the quarters as we start to get a better grip on how we invest across the globe.

The second one is our inventory and payable optimization. It's on average 4 days. I still think there is more to come, and we really see that the length already for years, we're talking with suppliers with optimization of value chains, and this is now starting to come through. Some of these contracts were long term. They first need to expire before you put new contracts in place, and you see the benefits of that now flowing through, and it will be sustained.

Our next question is from Javier Gonzalez-Lastra from Berenberg.

So 2 questions from me. First one on cost savings. You stressed in the statement this morning that you are on track to deliver at top end of the EUR 400 million to EUR 500 million range with a strong conversion into net savings and a reduction of 3,000 FTEs. I wonder if you could share a little bit with us what are the key geographies and areas these reductions have been taking place and whether we should expect more incremental improvement in H2 in terms of the conversion, especially in terms of the conversion of gross savings into net?

And then the second question on -- is basically on COGS inflation at the overall group level. So is the prolonged Middle East crisis having an impact on the COGS outlook for the second half of the year compared to what you expected at the beginning of the year. I've noticed that you dropped from your outlook, from your guidance, the sentence where you basically explicitly said that your guidance was dependent on the -- and the conflict not being permanent or prolonged that it being basically transitory. So I don't know what has changed around that.

Yes. No, it's a good question, Javier. And maybe it's easier for me to answer them in reverse order. because we do see indeed some pressure on cost coming from the Middle East crisis. I know that everybody on the call also looks at the oil price and the aluminum price and oil fluctuates up and down, but aluminum has actually stayed quite high compared to, for example, last year. So there is definitely cost inflation in the system. This is particularly noteworthy in Asia region, but also to some extent, in the Africa region, although I have to say that the governments are doing a pretty decent job to contain inflation. We still see an increased inflationary outlook in the Africa market. So that's where it is most pronounced. And it is not on the points that we can hedge because we have been hedging pretty much for the full year. This is really about the transport contracts. And in some markets, you cannot hedge your energy. So there is about EUR 100 million, let me just put a number to it, of cost inflation into the system as a result of the Middle East crisis.

We are quite confident that because of these cost savings that you're referencing on your first question, we are able to absorb that because the savings are on track, and we do see indeed in the first half year, a good conversion rate. This is true in every market. It ranges from Brazil to Mexico to even in Vietnam because our cost program is multifunctional, multi-market, and they are basically filled these initiatives already 1, 2, 3 years ahead. So we're executing on known plans -- and on top of that, of course, the markets are responding to what they see in the market. So it's a whole system behind delivering these growth savings, which made us quite confident in the first half of the year, but also in the full year.

Part of these cost savings will be reinvested to offset this incremental inflation. And very intentionally, we want to keep prices low because we believe that we have an opportunity to bring consumers back into the category with investing in brands, investing in innovation and investing in affordability. And we do that while still sticking to our outlook range of 2% to 6%. So that's a bit the logic that we have, and then we'll do our best to deliver the best value for the short and the long term.

Our next question on the line comes from Gen Cross with BNP Paribas.

Actually, a couple from me. So just first one is just on the AME EBIT margin, which I think at 15% is higher than it has been for a little while. So I just wonder if you could talk a little bit about how sustainable you view that as being and potentially the scope to increase that further from here given the work that you've done on the cost base in the region.

And then the second one is just you talked a little bit about these multi-market models, which you've implemented in Europe. I just wonder if you could share some examples of how the business is actually being managed differently under these MMOs and the benefits you're deriving from this.

Great questions, Gen. Thank you. So first, let me start with the outcome. We believe that the AME EBIT margin is sustainable as long as we can control the controllables because what we did see a few years ago that if the macroeconomic conditions change and you enter periods of hyperinflation and such, of course, our conversation needs to be different. Then we need to remind ourselves that we can navigate this volatility, but short term, there can be disruptive impact.

Why can I say that they are sustainable? Because of 3 factors. The first is we've learned the lesson in Nigeria. And basically, throughout those markets, whether this is Egypt or whether this is Ethiopia or whether this is other markets that we have, we have been fundamentally addressing the balance sheet as well as the cost base to basically make sure you heard me talk about that before, that we lower breakeven points and become less dependent on foreign direct inflows. And this is really what has changed in our Africa-Middle East setup with the great help of the Africa region who saw the need and has acted with pace to put this in place. So it's not because of the center. It really is because of the market operations that we've made this change and they made it sustainable.

A few examples of that. First, we are becoming less dependent on foreign direct inflows because we're converting more to local sourcing. We have more active dialogues with the government about why it is good for us, but also good for them to bring stability to the market. What is also extremely helpful, and this is the caveat, is that at this moment in time, I can say, honestly speaking, that the governments and the banks across the African continent are doing a really, really good job in building structural fundamentals into their policies, whether this is currency exchanges, whether this is reducing dependencies in markets, long may that last, but I'm not in control of that.

What I am in control of is building the right brand portfolio and really making sure, like we do now in Nigeria, that we're cautious on pricing because if inflation is moderating and currency is stable, we need to bring the attention to how we bring volume growth back to the market. Otherwise, we have a fantastic ratio, but with very low volumes, it doesn't really add much to the bottom line. So that's a bit the conversation that is currently going on in the Africa-Middle East market, but the business is very holistically thinking through how they can create sustainable growth based on the learnings of the past couple of years.

And then to your second question of multi-market organizations, it's great that you asked that question because basically, what we're aiming to do is put operating companies really focused on consumers and customers. But everything that is not related to that, how do we combine the force of a greater market, let's call it, agglomeration to the party. So -- and this is Romania, Bulgaria. This is Czech-Slovak. And you do see that the moment you start putting teams together, we thought that this was going to lead to higher capability and lower cost, but you also see better collaboration, for example, on portfolio optimization, customer engagement, -- so the response from the market is very positive that this is unlocking time and experience and growth opportunities at lower cost. And that's why the European team is very enthused and will continue this journey.

Last question we have on the line comes from Trevor Stirling with Bernstein.

Sorry, all my positive questions have been exhausted, Harold. I've got 2 slightly more challenging ones. So the first one is in Europe, looking at volumes, U.K. up low single digits, France up mid-single digits, Italy grew, Netherlands grew and yet beer volumes are down minus 1.2%. So which were the problem markets in Europe? And is that likely to continue into the second half?

And then the second question around personnel costs. You highlight that FTEs have been reduced by about 3,000, which I think is just over 3% reduction in FTEs, but your personnel costs are up 2.5%. Is that currency? Is that underlying inflation? Is that an EM mix effect? Maybe you could just give us a little color on that apparent discrepancy.

Trevor, you're in need of a beer, I think, Trevor, but we'll do that tomorrow, hopefully, or Friday. So you're totally right about Europe. And look, maybe good to remind ourselves, one of the markets that are holding growth back is Poland. And in Poland, 2 things have happened. So first of all, it's a market that is structurally not growing and not very strong. But you will also remember that at the start of the year, there was the DRS, the deposit return scheme implementation for which we were specifically calling out in the full year results that we have done some preloading for that so that the volumes are a combination of -- we had that sale in quarter 4 last year because we stocked up the market because we didn't know whether the market was going to be disrupted as well as an underlying softer markets, partly because of economic pressure, partly because of basically less population that is currently in Poland.

In Austria, we had a soft quarter 1. So that also did not help the second -- the first half of the year. And more to your question, do we believe that this is going to continue going forward? Look, a lot will depend on July, August, as you know. But what is important that we highlighted is we saw improved momentum of our business in quarter 2 from the European team. We're very cautious on the market still because the European consumer is not getting happier still from a consumer index point of view as long as we can see the data. What is the case, however, is that our market share is accelerating, and we do see the market responding to innovation and excellent consumer execution in store. So that's what Glenn and the team are focusing on. So yes, we're not yet there with the European markets, partially was phasing, partially, it's still underlying activation that needs to kick in.

On personnel cost, I was actually pretty pleased to see personnel costs growing up by 2.4%. There are 2 important points to that. The first one is we are, in a way, accruing for more variable bonuses than we did last year. And that's a good thing for our business because we are seeing better results and better performance in our business, and we are confirming the outlook for the year, as you know.

And the second thing is that there is indeed an elevated wage inflation working its way through the business. And also, that should not be a surprise following years of high inflation that finds its way through the wage inflation. So hopefully, with better improvement on productivity, we can further take that down, but those are some of those dynamics. And there, maybe a last point, there were some transition costs, not only in head office that we were talking about, but it's also sitting in personnel expenses, as you would expect.

We have no other questions on the line. So I'll pass the floor back to management for closing comments.

No. So let me then close, thanking everyone on the call for your interest. I believe we delivered a robust set of financial results in the first half of the year with importantly, 2/3 of our market in market share or hold position, which is also important to recognize. It's not only about the financials, it's also about the in-market performance, very pleased with volume growth, revenue growth and operating leverage coming through, and I hope to see you soon. Thank you very much for your interest and see you later.

This concludes today's conference call. Thanks, everyone, very much for joining, and you may now disconnect.

Good afternoon, everyone. My name is Mitch Collett from Deutsche Bank's Consumer Staples Research team. And I'm delighted to be joined on stage by Harold van den Broek, CFO of Heineken. Harold, you have been CFO now for roughly 5 years. It's been an eventful period for the company. But when you look back at those 5 years, what do you see as the key achievements, what do you hope to achieve in the years to come?

And if I may, can you perhaps provide a quick update on the situation with the change of CEO.

Of course, of course. So first, let me reflect back indeed over the past 5 years. As you say, it has been a very eventful period. We've seen a lot of turbulence, not only in Heineken, but also in the world. And I do believe that one of the things that we're proud of is how we've navigated this volatility. It's also one of the beauties of our footprint. we really have global scale, and therefore, we can balance things out when stuff happens in one particular region, like, for example, the big pricing in Europe that we had to take because of the Russia-Ukraine war. We then saw the Africa resilience counterbalancing that and also the Americas at that moment in time.

But speaking for me personally, it has been also a very rewarding period because one of the questions that we had from investors, but also internally is, look, Heineken was known to be a growth company, and I'm sure we're going to talk about that more. But how do we capture the value from the growth? And what we said, we need to bring cost and productivity much more to the forefront of the Heineken culture. And I asked at that moment in time also for some patience to bring capital returns in. Now if you look over the past 5 years, we had a fantastic progress on our cost and productivity agenda that really helped us navigate this volatility, but also to keep on investing in the long term of the business.

And secondly, we also now see the first benefits of capital productivity, cash returns coming in. And we've changed the culture accordingly. Now I think that's a nice link to the CEO transition as well. We put a statement out there last week, where the Supervisory Board says we're well on track. The new appointment is imminent, but too early to say now. That was an indication that the Supervisory Board, a, takes this extremely seriously. also follows due protocol. And I think we're nearing the end state of the CEO search, but we can only announce when we can announce and everything is done and completed. Meanwhile, the executive team knows what to do. We have a strategy. We're focused on execution. And basically, we are focused on delivering the goods for this year.

Okay. Understood. I guess we're 2 months into the second quarter. It's still quite a complicated uncertain operating environment. At a global level, is there anything really to call out in terms of the health of the consumer, the competitive environment, the World Cup, the weather, anything else that might affect your performance?

Yes. Well, that's all is there, Mitch. But maybe a good way to think about this, let's do a bit of a tour around the world is how we see it. So first, Europe is a cautious consumer environment. But we see that the category is stabilizing. And therefore, people like to go out, but there's a very, very much price-conscious consumer that we have to factor in. If you go to Africa a little bit south, very, very happy with the agility that we see that in these markets. The resilience is very good. We see pockets of growth like Ethiopia, South Africa is working for us. Nigeria in terms of share is doing very well.

And also Asia, I think, is the big one for us in terms of positive consumer sentiment, healthy macroeconomic conditions despite the Middle East crisis and our businesses are doing very well. At the start of the year, I was the outlier who basically was a bit more cautious on the Americas. And I actually pointed, we've learned the lesson the hard way image to really look at macroeconomic fundamentals. So we saw high interest rates, GDP is coming down.

So we are, at this moment in time, a little bit more cautious on the Americas. And we see also the beer category slightly contracting as a result of that. Now this is before the World Cup, you said. And look, we may hope for a beautiful summer weather in Europe this time around, but we are focusing more on the fundamentals. So I hope I'm proving wrong. But for me, the Americas is the one where I say, look, let's be a bit cautious.

Okay. I'm going to put you on the spot here, but who do you want to win the World Cup from a Heineken perspective?

Well, Mexico, Brazil, please.

Okay. Understood. And you've -- I would imagine maybe different from a personal perspective, but you've guided to 2% to 6% organic EBIT [ beia ] growth this year. I think you've just given a reason why it's maybe slightly below the range we would normally expect from the Heineken model. But what are the sort of key puts and takes as we think about the balance of the year that would get you towards the top end or the bottom end of that range?

Yes. Look, I mentioned this before. We started to move away from, let's call it, just doing the mathematics around our 2% to 6% range. We know that a good summer helps. We know that the reason -- a rainy summer doesn't help. But that's really not, let's call it, how we plan at the moment within our guidance ranges. We really have multiple scenarios that we're working through.

So -- and the biggest unknown at this moment in time is how long the Strait of Hormuz will be closed and what are the ripple effects for the markets, not only from a coverage this time of year, let's call it, the pricing impact we can absorb, but it's much more the consumer sentiment that is much more difficult to assess and the impact that it will have. So we're really working market by market with different scenarios, and that's the 2% to 6% range. And at the moment, as we just confirmed in our quarter 1 trading update, we're basically confirming that guidance range.

Okay. And I guess you didn't know about the -- you couldn't have known about the situation in the Middle East when you gave 2% to 6% I appreciate you're pretty well covered in terms of hedging for this year. But there are some costs that can't be hedged.

That's true.

And then I guess, if things stay as they are, would you expect there to be a need for price increases next year? And bearing in mind, you've been through a period of elevated inflation fairly recently. How do you think about the health of the consumer to take those price increases necessary?

That's a very good question. So first, let me pay a compliment to our organization because linked to the previous answer to the question, we really are starting to think about what are the macroeconomic indicators that we see, what are the different scenarios that we want to see play out. And as a consequence, although we didn't know that the Middle East crisis was going to happen, we had scenarios prepared, and we were very much on the front foot in terms of our productivity agenda to deal with that ambiguity. So I just want to pay a compliment because part of the offset of cost 2026 is because we were already leaning in to drive the cost out of the system in a much more aggressive way than we would otherwise have done.

And that keeps it possible to not price, not panic, keep on investing in our business while still delivering within that guidance range, as you said. Now looking ahead, this is a very different reality than we had in '22, '23 when there was a sudden energy crisis. It was all focused on Europe. And within the space of weeks, we saw a tenfold increase in the price of gas at that moment in time. We are now seeing still a very significant impact. but it's phased over time, and it's more of a global energy issue that we're currently facing. And that gives us time to prepare. It gives us time to prepare with the right portfolio, different pack-wise architecture, different market-by-market realities.

So in that sense, it's not a repeat of 2022, '23 that we see. We really are starting to look at incremental measures, revenue margin growth opportunities, as we call them, to cover the pricing and inflationary impact. Having said that, all other things being equal with aluminum, diesel and LNG now at elevated pricing levels, we do forecast some moderate inflation going into 2027.

Okay. Makes sense. We'll come back to the sort of bigger picture longer term in a minute. But you mentioned Americas as an area where maybe there's a few market challenges. Maybe just some perspectives on what's driving that in Mexico, first of all. I think you've been gaining share in the on-trade. So what's causing the market weakness? And I guess, what can you do to execute your way through that?

Yes. So first, again, I said it before, but let me be short and repeat. The reality that we're facing in Mexico, and we'll come and talk about in Brazil, I'm sure, is a slightly subdued macroeconomic environment. GDP is lower. Interest rates are elevated, given the pending trade agreements, renegotiation, foreign direct investments is a little bit lower than what we expected. And this is not good for the beer category as we see it. We were a bit surprised with our own results and competitive results in quarter 1, but we see in April that, that is becoming a little bit more equal.

So we have the same read of the market reality at this moment in time, which is the beer market is in slight decline. Now the trigger effect is we have very responsible competition. So all of us are really trying to bring growth back into the category, which means that we're investing in affordability. We're investing in the channel shifts. We're investing in our brands. At the same time, we also need to acknowledge that at the same period last year, we had fantastic growth in the first half of the year in market share, but didn't see the volume uplift.

So we had to correct for pricing in the second half of the year, and we are now working through that. That takes a bit longer than what we expected. So we're not happy about that, but we need to call it what it is. So probably it will take until the second half of the year for our business in Mexico to start basically balancing out that market share progression that we expect and also want to see.

Okay. And you correctly predicted that we'd go to Brazil next. So Brazil, again, it had -- it's been a very strong market for you longer term. 2025 was a bit tougher. I think Q1 was a little bit softer and maybe even got slightly softer as you went through the quarter. I guess what's driving that in Brazil? It sounds like there are some similarities. And you're still doing well, I think, in premium. So how do you indeed keep that happening in a maybe tougher context?

Yes. So again, very important. Macro category is slightly in decline. But within that category decline, it's important to see that the category continues to premiumize. So mainstream and premium are actually driving growth. Economy is going down in terms of the segments in the beer category. And this is good because we are actually well positioned, have driven that conversion into premium and into mainstream and continue to do so.

What you also need to see is a little bit longer time. We -- last year, in the first half of the year, we gained about 150 basis points of market share. We're now giving some of that back on a 2-year stack, still stronger than where we were, 3 years, 4 years, 5 years. We are very confident in the business model that we're operating in Brazil and believe that the underlying category dynamics are actually still conducive to future growth.

Last point to make, we always try to find the balance between volume-led growth and value-led growth. And we really felt that in the second half of the year and in the first half of this year, we really had an opportunity to become a little bit more aggressive in price mix, and that's what you see coming through because in the first half of last year, we were too focused on volume, hence, the market share gains. So we're always trying to find that balance over the longer term.

And with that, balance between price/mix and volume in mind, still specifically in Brazil, you opened a new brewery in Passos, sorry, in the end of Q3 2025. I think it's 5 million hectoliters in density. So how do you -- how long will it take you to fill that? And I guess what's the operational benefit of that new capacity?

Yes. So it's good to know Brazil is a big country. And there are state-by-state incentive structures that make it worthwhile to sometimes look at your infrastructure and really see where consumer demand is and where the right production facility is. So Passos brewery was important for us because it can produce the Heineken brand, and it is in a region where there is a super high demand for Heineken volume. So in that sense, the recalibration across our network was an important factor. as well as the state incentives that we were able to have. So filling the brewery is not going to be a problem, but it is going to be some level of redistribution across the other breweries, and we're very happy with the economic benefits that we have helped by state support.

Okay. Let's shift entirely and go to Vietnam, which looks like it's back to its best. And I think you've had very good growth across all the various price points. So what have you done to kind of drive Vietnam back into growth after a couple of more challenging years?

Yes. So first of all, a big compliments to the team, but let's start with what is really making us very pleased and confident in the long-term success of Vietnam. Not our doing, but we are a grateful beneficiary of government stability. There has been a lot of government changes in Vietnam. There is now government stability and a very clear economic policy. And the economic policy is about how do we make Vietnam a more highly added value economy, still relying on exports, but with more value accretion in that export construct. The GDP growth projected in the next couple of years is 6% to 7%. Urbanization rates are predicted to go up from 36%, 37% to 50% to really build that infrastructure of industry that I was just talking about. And all of these dimensions are good for beer consumption. Urbanization, population and income growth are all conducive to the category.

So we believe that Vietnam is a really good market to be in. Secondly, what we've done, we've seen a number of shifts from premium to mainstream, from on-trade to off-trade. And the team locally has really done the proper homework, not just the tactical sales adjustment, but proper homework about how we design the right portfolio to win. And we see the benefits of that coming through. Heineken is fantastic. It's really now over half of our premium volume. And we've started to create a mainstream brand with [ Larue ], including really doubling down on the off-trade volume to capture, let's call it, in-home or near-home consumption, which has been a trend shift that we've seen. As a result of that, market shares are back to all-time high. So very pleased with our Vietnam performance.

Okay. And then China, I know, is an associate business. But I think it's already a top 3 profit contribution.

Absolutely. A net profit level for sure.

And it's been in strong growth. So I guess, how do you feel about the partnership there? How do you think about the runway for growth? Can you continue to gain share in a market that's been flat to declining?

Yes. So let's start at that end part of the question. We are quite confident that growth will continue. Also in the earlier stages of this year, we saw the Heineken brand continues to grow in the high 20s. Amstel is now a very important second brand, but it's only up north, growing 60%, 70% and probably doubling volume in the first year of launch, already reaching almost close to 1 million hectoliter. And the secret of this success is mutual dependency.

We have a very good governance framework, a very good long-term joint business plan with clear allocation of roles where Heineken creates the demand and does the marketing and CRB creates the distribution and thus the execution. We're only at 30% of the addressable outlets. So there is plenty of runway to grow. And this means we have one very big brand in Heineken still growing 20s and an emerging brand in Amstel, and we've got more brands in the portfolio. So we believe that there is a mutually dependent success model at work here that will pay dividends for years to come, literally and figuratively.

And staying in Asia, Cambodia, has been a more challenging market, and I think you've seen a bit of competition from local players. I mean, is that competitive intensity still there? What can you do to outcompete the smaller players?

Yes. So unfortunately, maybe for the audience, good to know. So Cambodia is an important market for us, but we have lost significant volume. So the base is getting smaller, not because we want to, because that's the factual reality. And the reason is that there is a 7x overcapacity in that market, maybe good for the audience to know. It's very difficult to compete if there is such a high level of overcapacity. And what we have been working with the government somewhat successfully now is that we said we need to normalize the category because overcapacity and rampant promotions, the so-called ring pool that if you win, you can get a free beer in exchange, and that just continues.

So there's not a limit on it. in my words, made it more of a gambling industry than an enjoyment and responsible consumption industry, and we had that discussion with the government. The good news is the government is now banning ring pool promotions to try to take that incentive away effective in October, November, we need to see that coming to life, but that will be a first step towards restoration of, let's call it, healthy competition, and that's what we're looking for.

Okay. And then in India, it's still one of the markets with the greatest potential growth opportunity very low per capita consumption and already a big market for you. But I think you made some changes to your sales model in India. What were the changes?

So yes, how to phrase this. So when we took majority control of United Breweries, we did see some old-fashioned practices in these markets. And when I went there, I said, look, we are brewing beer for the consumer, not for excise. And it is very, very important to really start behaving like that. So what we have changed is, first of all, state-by-state engagement about what is the beer category -- why is it beneficial not only for the state because of its excise, but also for the consumers because it brings joy of true togetherness together, but in a much more responsible way than homegrown liquids.

We started to engage also with the states about outlet execution because a quality outlet brings people together to responsibly joy a beer is a very, very important factor for future growth. And you do start to see that younger consumers who are leaving home, who are going to work actually are happy to meet up with friends and enjoy a beer. So the stigma is also getting less. State by state, we see more progressive thinking in some of the states, which serves as an example for others. And all of that, together with, I have to say, international beer competitors who are playing a similar game and therefore, industry associations are starting to work to create sustainable growth going forward in a responsible manner is starting to pave the road forward. As a consequence, for example, the first couple of months this year, we see category growth of 10%, which is extremely encouraging.

And I guess before we leave it, Asia, collectively, these are some markets that probably have a greater energy dependency. And by the sounds of what you said earlier in terms of market conditions, you're not really seeing that impacting the consumer. But I guess how would you prepare for that to happen? And how would you think about any sort of supply and cost challenges coming from the situation in the Middle East?

Yes. So 2 parts to the answer. I think our teams are fully on this to create business continuity plans, and that can range from purchasing diesel just in case the generators need to run for a period longer to really start to look at alternative sourcing models if we have supplier dependency, for example. So contingency plans in terms of diesel or energy scarcity are definitely in place. Now of course, if the governments do not have access to diesel and they need to start making some priority choices going to keep a hospital open or a beer company open, there are legitimate choices to be made, and we cannot prepare for that.

Moving to a totally different continent because I know we've got a lot of the world to cover, but Europe had a few challenges last year with the shelf allocations and promotional slots. I mean you mentioned it already, but you're fully back in this year. I guess that gives you some natural volume growth. I appreciate in Q1 and Q2, it's difficult because of the timing of Easter and the World Cup. But I guess, how do you feel about the shelf space you've regained? And would you expect to deliver volume growth in Europe this year?

Yes, very important. The answer is yes. On the first part of the question, and that is we call that just in time. But we are confident in the regaining of the position that we had. We had very tough retail negotiations. These things happen. We mutually agreed on a way forward. And it's important to say that we are seeing quality execution in the outlets coming back. So we're not buying our volume to recover, let's call it, our position. This is really done with the right shelf resets and the right quality of execution.

Now our market share is also accelerating. So we're quite happy with our relative performance in the European market. The category in itself is not yet back to growth. And that is perhaps the link to the second one. I'm hesitant to make projections. A good summer, a great World Cup obviously help, but let's first control the controllables, and that is do perfect execution, gain share and then consumers will have to do the rest.

Okay. In Africa, Nigeria has been a market where you've had, I guess, your fair share of ups and downs. But like a lot of the markets we talked about today, it's actually doing pretty well now, but the sounds of it. I guess, how are you sort of managing that business longer term to avoid the volatility that we've seen in the past?

On the whole Africa continent.

Well, I meant Nigeria specifically, but if you'd rather.

No. So for me, it's a good example of what we have done well. So again, Nigeria, 200 million population. So this is a market which has a lot of potential. We had 14 million hectoliter of installed capacity. So for us, this was an extremely important market to grow and protect because of its potential that it holds. What we have done in 2 years ago when the whole currency and it devalued by 80%, so 8-0, many companies left Nigeria because they saw no future in that market.

We decided to double down and basically refinance that organization and at the same time, really make sure that our product portfolio was healthy, right gross margins, right price points, right brands to really create a price tiering for wealthier and less wealthy consumers and take a lot of cost out. We are now doing that. And the numbers are public, but we are debt-free. We're back to healthy operating profit margins. Currency is now stable. And as a result of that, it takes a bit of time for consumer incomes to rise because the inflation is coming down, but household incomes have not yet recovered. -- but I can't wait for the day until 200 million Nigerians are drinking beer more every month. That will be a very good thing to witness.

Okay. And then South Africa is post the acquisition of Distell is very much a multi-beverage model. I guess why is that the right model for South Africa? And I know you do, do cider and RTDs in other markets. But I guess how do you think about the opportunity to do multi-beverage in other places?

Yes. Two parts. First of all, the Heineken Beverages as we call it, was really coming together of a Distell portfolio and the Heineken portfolio, and that was beyond beer, the ciders, the RTDs, the grape-based drinks, the wines and the Heineken portfolio, which is beer-centric only. And we saw the need to combine that in order to have much more gravitas in a highly concentrated market. So for us, this was an opportunity to combine forces, but also broaden the category offering so that we can serve more consumers more often.

That was the idea. It took us some time, both for the cultural integration, but also to make sure that we have the right conversations with the customers so that they can see that we are strategically vested in South Africa, and we are a reliable partner for the future, and this is working at this moment in time very much so. So we're happy with the progress that we've made in South Africa, but we're not there where we want to be. There are years ahead of us to make that come to life. Now what is important is that we are learning this multi-beverage play. And also South Africa, for example, in adjacent markets, but we're taking Bernini, we're taking part of the Distell portfolio to Nigeria to Ethiopia, and we start to see that it resonates with consumers.

So we're actually learning at scale about what it means to be, let's call it, multi-segment player. And this is also how we look at the future. So whilst we say we're a proud beer company, we want really beer to be centric, it is very important to acknowledge that there are opportunities outside and [ FIFCO ] is one of those examples as well, where we are very happily expanding the portfolio. And outside of the U.S., we're actually the biggest, let's call it, outside of beer company in the planet with RGDs cider. So it's not that this is foreign territory for us.

Okay. So I said we'd move to something a bit longer term. You unveiled Evergreen 2030 back at the Investor Day last year in [ Seville ]. And the ambition there is mid-single-digit revenue growth, profit ahead of revenue, and I think EPS ahead of revenue. So how is -- what are the building blocks to get you there? And I know you talked about how you've done a good job on cost with the original EverGreen but what are the key differences between EverGreen and EverGreen 2030?

Well, maybe start there. The key difference for Evergreen '25 and EverGreen 2030 is that we really bring focus and differentiation into the strategy. So important to know, we believe that there's growth in beer globally. It's driven by the basics of population growth, income growth and urbanization as we also talked in Vietnam. So we believe in the case for beer. What we also believe in, and we've seen that in the last 5 years also is that our advantaged footprint because we are more present in Africa and in Asia is actually a help.

So part of that mid-single-digit growth is coming from growth in beer, advantaged footprint, and then we need to put pricing and premiumization and mix management on top to get to that mid-single-digit growth. That can happen in beer. It can happen in beyond beer as we call it. So that's a very important construct as we see it. The focus and differentiation we bring in is we've also thought 18 priority growth markets, 18 are catering for 90% of the future growth. So we are really focusing our resources on the priority growth markets. Secondly, we believe that global brands and local brands both have a relevant role to play.

So out of a portfolio of 300 brands, 5 global brands and 25 regional power brands will again do 90% of the future growth, and that's where the resources will be. So that's how we believe we can outcompete in a growing category with the right price mix and premiumization to get to that mid-single-digit growth. Good productivity and very importantly, the capital that we are now adding to our muscle. So cash flow generation, cash conversion that allows us to do value-accretive acquisitions or share buybacks. basically bring us that EPS leverage, operating profit and EPS leverage that you were referring to. So that's the model. We're really focusing on growth, but capital and cost productivity basically create the leverage further down the P&L.

Okay. And you talked about cost there and you talked about cost earlier. You've also announced what must have been a very difficult decision, the reduction of 5,000 to 6,000 roles. Where are you in the process of that rationalization? And I guess, how do you sort of maintain your commercial effectiveness when you're taking out headcount of that scale?

That's a good question. And we put it intentionally in our full year outlook in 2020 -- in the full year results 2025 because we wanted to give an internal signal. And the internal signal was the change will accelerate. We will not pause, also not with the CEO transition. So we're actually making -- I will disclose the numbers at the half year results, but we're actually making very good progress against that 5,000 to 6,000 people headcount reduction. And surprisingly, the appetite from the markets is there because it's not just a squeeze the lemon. It's a systematic different way of working that we're putting in there. And I'll give you 2 examples. We're moving to Heineken Business Services.

We're moving to supply networks. And that basically means we get more productivity out of the same infrastructure, and we can, therefore, do more with less people. The second thing to your point about how do we think about this is the global commerce team under [ Bram's ] leadership is really to apply artificial intelligence now also on, let's call it, the commercial growth engine of our company. And that creates synergies in cost, but also synergies in speed and effectiveness. And that's also why it is actually helpful for us to basically reallocate resources, but also become more productive as an organization.

I'm glad you mentioned AI because I know you've had -- you've been through a significant period of investment in your digital backbone. Are you now at a point where that investment can really start to pay off? And I guess, how is AI integrated into the tools you're using with that?

Yes. No, great question. So first of all, we are balancing pace with risk in the rollout of the digital backbone. And for the people in the room who don't know what I'm talking about, it's basically a common infrastructure for Heineken that covers both the front end of our organization, so customer, but also, let's call it, consumer-like marketing as well as the back end of the organization like the whole ERP that you usually have. And we call that our digital backbone because that's what it is. It is a backbone to our company.

What is important is that we are, let's call it, learning at scale, but also taking risk into account. So we have about an implementation model where every year, we do about 8 to 12 markets, but we have 80 to cover. So this will take about 5 to 6 years to bring it in, but we're not waiting with new technology to be applied. So what I was just talking about it, this Freddy AI is very important because this is the engine for marketing to be much more sophisticated and leveraging AI. And this is, I think, the more important part. So we are consistent in our investment in AI, but reaping the benefits where they are being seen.

And in Freddy AI, named after the famous Freddy Heineken, we do 3 things in marketing with the help of digital. It's a knowledge database for every marketer across the world and every salesperson in the world where certain problem statements or brand or channels or customer activations can be asked in a safe environment. So it's a knowledge database that is very interactive, so people don't have to reinvent the wheel. Second, we call Freddy [ Connect ] from idea to live campaign at the moment takes 3 to 6 months.

How do we squeeze that into 3 days and optimize our agency model so that it's more productive, cheaper and faster. And last but not least, how do we do advanced marketing mix modeling. And that is now being rolled out by the end of this year to 10 markets extra, so 15 markets. So just to show that AI is very much alive in our company, and we don't have to wait for the digital backbone to give us the benefits that we see ahead of us.

Yes. And you mentioned the focus on cash delivery. I guess you stepped up your dividend payout ratio. You've done buybacks. But Heineken historically went through a long period of sort of buying markets and adding assets. I guess, does the increase in shareholder remuneration mean that you're seeing less opportunities for acquisitive growth?

No, that's not how I would frame it, Mitch. And it's a good question that you asked there. Look, the reality is we are not living at this moment in a world that waits to be consolidated. The big industry consolidation has happened to a large extent, but there will still be opportunities out there. We will be an acquisitive company going forward. What is equally the case is that growth is a little bit more subdued at this moment in time and interest rates are higher. So our capital allocation priorities are all geared towards how do we protect organic growth. We've built breweries now in most of our largest markets. So there is not a lot of that much more capital to be deployed.

We like consistent dividend, and we know that our investor base also appreciates that. Capital discipline is important, but what you will have seen in the last 12 to 24 months, that still leaves us with an opportunity to do acquisitions like FIFCO, which, by the way, this year is 3% accretive to EPS. So it's a fantastic acquisition for long-term growth potential, profitable to us and EPS accretive to us, and we can do share buybacks. So it's how you balance everything across volume, capital returns, dividend returns to drive attractive shareholder returns in aggregate. But at the same time, we want to be known as a growth company. And therefore, organic and inorganic growth will always be part of our considerations.

Okay. That's very clear. So very close to being out of time. But maybe just to kind of bring it all together, is there kind of one thing that you think the investment community may be misunderstands or doesn't get about Heineken and its investment proposition.

Yes. I think we are -- maybe 2 things. The first is we're really changing the nature of this company. Both the cultural part, but also you heard me talk about the growth is the first priority of Heineken. And we have a platform across the world to deliver that. We're a proud beer company, but really want to look beyond that in selective markets to broaden out our consumer offering and productivity and cash flow management needs to be there to drive attractive shareholder returns. The culture is changing with that. So we're hoping to see the benefits of that.

Okay. Great. Well, Harold, thank you very much for joining us. Thank you.

Thank you.

Good afternoon to everyone. It's my great pleasure to introduce Harold van den Broek at the UBS Conference again this year. Harold, thank you for joining us.

I want to start with a few big picture topics and let's kick off with the CEO transition. Dolf's resignation earlier this year took us all by surprise. Are you able to share with us any updates on the third timing, what we can expect?

No, thank you. And great to be here, Sanjeet. Thanks for the invite. Look, the CEO transition process, as many people will understand, is a process that is led with due care and diligence by the Supervisory Board.

So the Supervisory Board sees this as really their #1 priority. So they'll really update us as soon as there's something to update, but the process is ongoing. What I do think is important for this audience and everybody who cares to listen needs to know is, first, the EverGreen 2030 strategy stands. So for us, internally in the company, this is not a moment to start questioning. We have a very good strategy.

We talked about that in October last year in our Capital Markets Day, and we are fully focused on the execution of that. Maybe last point is the executive team is carrying the operationalization of that strategy. So we're not sitting still. We're actually pivoting forward to bring that to life.

Understood. Just moving on to the guidance you gave us at the start of the year. You guided 2% to 6% organic EBIT growth. A little bit below the historical 4% to 8% range you've given. I appreciate there's been a lot of volatility in the world in the last 10 days as well, maybe validating a bit of prudence.

But can you just give us a bit more context behind why you guided what you did and how you see the levers towards the upper end and the lower end of that range?

No, absolutely. And indeed, very often that we are talking about with investor base, with yourselves is about how do we control the controllables. And we know that there are certain things in Heineken that we really focus on. It is about how we grow market share, how we build out the category, for example, with these nine 0.0 brands.

It is about how we drive our cost savings to create investment space, but also profitability and attractive shareholder returns. So all of these elements, we're quite confident on. There were 2 things that we felt we did not have fully in control. The first was the macroeconomic environment, as you alluded to as well.

And the second one is simply because the calendar moves from '25 to '26 doesn't mean that consumer sentiment is shifting at the same pace. So we really felt it was right to indicate that we came from as a beer category globally, a negative volume in 2025 to just take that into account when setting these ranges.

Now what is also very important is that we have started to move from single planning like we have one plan and we execute that for a year to much more trigger event planning. So that makes our company more dynamic to take into account growth opportunities where they arise. And the aggregation of these individual scenarios gave us also that 2% to 6% range. So that's why we felt comfortable to navigate there.

Understood. Just moving on to EverGreen 2030 announced last October, the TMD. Management at the time sounded very confident on delivering mid-single-digit revenue with volume growth ahead of the industry.

What are you doing differently over the next few years around resource allocation and execution muscle to deliver this ambition?

It's a great question, Sanjeet, and thanks for allowing me to expand on this a little bit. So first, Heineken traditionally was quite a democratic company. And it was because we valued each of our 80 operating companies almost equally, but their growth potential and value creation potential is actually not equal.

So one of the changes that we made under EverGreen 2030 is to be very much more specific about in which market are you operating. It does matter when you are a value beer market where the first interaction with beer is with mainstream beer or whether you're advancing beer market where beer is already the go-to alcohol choice beverage of choice, where premiumization is actually the growth lever.

Or whether you're a developed market where multi-beverage occasions really define that we actually need a different portfolio. So we've been very much more intentional segmenting the markets to growth potential and the stage of the life cycle that the consumer is in and the relevance of beer in that life cycle. The second thing that we've done is really articulated that there is more space in our portfolio for global brands.

At the moment, only Heineken, beautiful brand, but only 25% of our portfolio is managed truly as a global brand. We have, based on consumer insights, 5 of such brands that can play a role. So that's the second shift that we're making.

The third shift that we're making is to really start putting a Freddie AI in place, which is our name for our digital in-house marketing agency. so that the connection, but also the AI enablement of insight to communication is really much more efficient and therefore, gives us more opportunity for growth.

Great. I think one of your big focus areas has been the implementation of the digital backbone. Where are you today on the harmonization of your IT and ERP systems? And what tangible benefits is Heineken really getting from that?

I think there are basically 3 things to look at. So first, we're in the early stage of the journey to answer your question. And what does that mean? Because when we have this fragmented federation of Heineken operating company units, all of them had their own infrastructure, their own data models, their own processes because it was basically a confederation of acquired companies or companies that -- where we built an infrastructure relevant for their markets.

So it was really quite fragmented. And we decided 2 things where we started on this journey. The first one is how do we make sure that we do the frontline enablement at the same time as the back-office enablement because customers and consumers are digitizing rapidly.

And as a consequence, we took, let's call it, a bit of inefficiency in getting there simply because we did not want to be late, but with our consumer and customer. And that means that applications like product recommendation, optimal assortment, working capital insights, sales representative prioritization are all already digital enabled. And this is not only good for us, it's also good for our client base.

But what we are now also starting to see because we now have what we call our digital product alive in 4 operating companies and have started to move data and processes to much more harmonized levels is we already can start to see in our brewery network or in our shared service center network, the benefit of automation already coming through.

For example, our brewery network is now fully connected, and we can learn what is happening in Mexico and apply it in Ethiopia. And that does not need manual interventions. It really is digitized. So there are back-office synergies. The third one is what we just talked about is this in-house marketing agency that is really now starting to happen for real, first in Heineken and in 2026 spreading across.

So yes, we're early in the journey, but we didn't have low-hanging fruit just lying there. We're actually building that. And all of that set of applications that is the target destiny, we're about 35%, 40% there. So that's a bit how you should think about it.

Very clear. One of the big themes from this recent results season has been some signs of broad-based price repositioning going on in whether it's food or parts of spirits. And with that backdrop, how are you feeling about Heineken's pricing and also tied to that revenue management capabilities, which has also been a bit of a focus area.

Yes, it's very good. And maybe just taking a step back before I answer your question directly. What we're currently seeing in the world and also in 2025, where the beer market, not only Heineken, but in aggregate was not growing. You know that the beer market declined by our estimates between 2% and 2.5%. We think that price consciousness of the consumer is a key factor in that.

So revenue margin growth and our capability is really critical to address that, but it's not only pricing. The price-conscious consumer is really looking for is the brand worth the investment. And by the way, this is not only happening in beer. I really hear many, many companies talking about price-seeking value-driven consumers.

So that is a very, very important reality that we're living in. Importantly, we know that it takes time to catch up. And we currently see wage inflation growing faster than general inflation. Big caveat, the Iran situation doesn't make things easier. So I'm really talking a little bit about what we saw happening until a few weeks ago.

And in that, revenue margin is very important. It's about how do we get the right brand appeal either through advertising, for example, relevant sponsorships, right occasion like right service equation, but also right pack price architecture so that we can still have premium beer at an affordable price point.

And that is something that we're really institutionalizing now in our company. Now to your question, how far are we progressed in that? I think there are better companies than Heineken for sure. So I would give a sales probably a 5 out of 10, 4.5 out of 10, and we're accelerating very fast because that's not a number that we're happy with.

Got it. Let's go into a few markets, and I'd love to start with Europe. One of the key topics last year was the retailer dispute and the loss of shelf space. Where are you on that at the moment? How the retailer negotiations gone? And do you expect to fully recover those lost volumes?

Yes. No, let's indeed take the snapshot before zooming out. So at the moment, almost all, if not all, of the price negotiations in Europe have been concluded. So we can confirm that this is not going to be a repeat of 2024. So we're happy to say that.

Second thing is you also saw in our full year results 2025 that our revenue per hectoliter growth was actually slightly positive, 1.4%. And this was really important to us because we are still living in Europe in an inflationary environment. And we really want to be intentional about offering the consumer, let's call it, space to recover, right?

So we're pricing below inflation, but we also need to make sure that we have the opportunity to offset part of that inflation and invest behind our brands. And I think for 2026, we are there.

Are you...

Sorry, I didn't answer. So the recovery of the retailer impact, we are also -- with the latest shelf resets coming in February, March, we are there.

Got it. Okay. Beyond the retailer disputes last year, the category was declining, and I think there were a couple of markets such as Poland and Austria, where you had some big negative volume declines. So how are you thinking about the overall volume outlook in Europe beyond the retailer?

So this is -- hopefully, we'll come back later in the questions to some more positive stories. But here, I need to be a bit cautious. I think the European landscape because we are talking about the recovery of pricing and the recovery of our shelf space, these are the good parts of the elements. But what we also start to see happening, for example, deposit return schemes, where pricing needs to be taken and suddenly a can of beer is increasing in price because you have to pay the deposit and not everybody is taking the effort to then hand in that and bring the deposit back.

So we do see in certain markets, particularly in Eastern Europe, still a very sober market dynamic. Population growth is not there in Europe. So we believe that Europe is a potential for stability and growth in pockets, as you know.

But I don't want to be too optimistic too soon on a recovery of European volume. This will take time.

Understood. Just digging a bit deeper into some of the medium-term trends in the region. A lot of excitement about premium and zero alcohol. I think a lot of investors understand and appreciate that. But the mainstream segment seems to be struggling.

Clearly, it's the more price-sensitive part of the portfolio. But do you see a risk of structural decline in the mainstream segment in Europe? Or what are you trying to do to address that and get the core to stabilize?

So let's first say that we are in a good position. Heineken has a portfolio of brands, both at premium level, at mainstream level and at value level. So we can actually offer consumer propositions depending on where the consumer is looking for certain price points.

So we do have a full coverage of our portfolio. What is important is that I think in the past 2, 3 years, we have been very intentional in driving premiumization and with some success, Birra Moretti in the U.K., Beavertown in the U.K., Ichnusa in Italy, all really great examples but in a value-seeking environment, mainstream is becoming extremely important.

So also the focus in our business is really making sure not to be dogmatic in our strategy, but making sure that mainstream has a role to play there as well. So I think we understand that, and we can navigate accordingly.

Understood. Europe margins are around 200 basis points below pre-pandemic levels despite a lot of cost savings, which has been offset by operating deleverage and inflation. If you get to a point where Europe volumes can stabilize, and clearly, there's more productivity coming in the region. Is it realistic for those margins to come back? Is that plausible ambition over the medium term?

Yes, it should be. Let me first say that I and our whole European team knows that. Glenn also agrees with me that we are not satisfied with the operating margins that we have in Europe. But a bit to what you're already alluding to, it needs to be a systematic solution for Europe. And that is a composition of 3 parts.

The first one is it is very difficult in our industry to sustainably grow margins if there is no volume. So therefore, it really is important that we are finding and driving the growth pockets in Europe that we know that are there. And this comes with innovation, perfect execution, more pilots, more tests in order to bring consumer relevance back.

Second is to invest behind category growth. This is coming from Formula 1 to football to music festivals to fantastic experiences in the outlet because ultimately, consumers have a choice in Europe, and we need to make sure that beer becomes their preferred choice, and that requires investment.

In that sense, productivity is a very important part. But it's the combination of all that needs to bring Europe to operating margin levels starting with quality volume growth and productivity and the right investment.

And at the bottom end, that magic will have to turn into increased operating margins. And I know and I'm convinced that we can get that back to pre-COVID levels.

Got it. Very clear. I think in the full year results, you announced another round of restructuring in the organization. It feels like Europe in particular. To what extent is that impacting employee morale and engagement in the organization?

Yes. So again, let me take a first global lens here because we indeed announced a 5,000 to 6,000 role reduction. We are moving to a more streamlined head office. We're shifting about 3,000 employees to Heineken Business Service to not only get, let's call it, leverage from wage differentials, but also by really making sure that end-to-end and automation, what we talked about is possible.

So there's a lot of transformation activity happening. In many parts of the world, this is embraced. This is embraced because they know that this is going towards the future, not towards the past. In Europe, there is a bit more complex dynamics going on. But I have to say that our European team is very much understanding the realities linked to the previous question and wants to go there.

Now of course, this needs to be done with respect, transparency and care for the people. There are works councils. There are obviously people concerned about what this means for me. So that's why we're also really trying to do this the right way, but at speed. And the morale in Europe is very aware of what needs to happen and very much engaged in making this happen.

Very clear. Moving on to LatAm. I think Brazil and Mexico also saw a challenging -- different challenges in 2025. Maybe on Brazil to start with, we've heard from some of your peers in beer, spirits and soft drinks at the start of the year, perhaps with a more positive tone towards the end of '25 and the start to 2026. Do you echo the same sort of optimism building?

Yes. So let me first say that Brazil for us in 2025 was a story of 2 halves. From an in-market performance perspective, this was a really good year for Brazil. We really gained market share. Amstel, Heineken, very good in-market momentum, but perhaps the people in the room yourself, you know that we had to take a course corrective action in terms of the stock levels and the outlets that we were serving because it was not at the right quality that we wanted.

So that was an on goal, and we will not repeat that. What we also saw in the second half of the year is that because of macroeconomic realities in Brazil, the beer category started to decline to the tune of mid-single digit. And that for us was a bit of a call to action to say, okay, what is happening in this market? And that led me to be a little bit more cautious combined with macroeconomic fundamentals.

What we currently see in December, January is a to be honest, much better than what I expected. So the category has been stable. Our business is doing well. I still remain -- maybe that's a CFO difference, but a little bit more cautious on the macroeconomics of Brazil. I hope I'm wrong. So far, it's better than what I expected.

Understood. I think you took quite a bit of pricing towards the end of last year in Brazil. And we started to see the Heineken and Amstel brands maybe start to moderate from a share perspective. They've had a big run over several years. How are you feeling about the growth opportunity of those brands? And are you at a point where you need to perhaps think about broadening your portfolio?

It's always good to think about broadening your portfolio. So of course, we are doing that as well. But we don't feel that if you look at the brand power, the addressable consumer cohorts that we have, that Heineken and Amstel are running out of steam.

There is still headway to grow our portfolio. But indeed, to your point, we now need to start thinking more broadly about what does Brazil mean for us and how do we -- can we build that out.

Perhaps what is also really good to realize is that when I just said broadly stable market, it really is a difference between the premium and mainstream segment continuing to do well, not only from us, but also our largest competitor in that market is really starting to enhance and amplify the mainstream and premium growth.

And it's the economy segment that is, at the moment, not doing very well. So underlying category dynamics are healthy. Our portfolio is healthy, too.

Very clear. You added a new brewery late last year in Passos, I think 5 million hectoliters. Should investors view that as incremental capacity? Or is it more a reallocation of capacity and a cost benefit for Heineken?

Yes. So it's a bit of both. So we opened that brewery because there was very much inefficiency in the network because Brazil is a big country, and we were just shipping too much volume around. And the core pocket was really in the state around where we now put the brewery in Passos, where there was really a high demand for Heineken and Amstel.

On top, many people will know, but there are significant incentives for investment in Brazil, which we capitalized on as well. So it was an optimization of the network. What is also important is that we have capacity to grow. And that was not the case a number of years ago. 2 years ago, we were really up to capacity limits. That is no longer the case because of the platforms that we've now built.

Very good. Moving on to Mexico. And I think the beer category there has been remarkably resilient despite some of the geopolitical and macro headwinds. I think Heineken has been slightly underperforming on volumes. Is that purely a function of geographic mix, just given your over-indexation to the north? Or is it somehow pricing related? And to what extent is the social unrest or heightened social unrest in the north perhaps impacting?

Yes. It's a really good question. And unfortunately, a bit of a complex answer because your indication of is it this, that or the other, it's probably a combination of all of these things. So our Mexican business is really quite strong. It's the biggest operation that we have. We're very proud of the Mexican team and of our Mexican business.

We really are building stronger brands, but we also have a formidable competitor. You know that our stronghold is in the North. Our competitor stronghold is more in the mid- and in the South. So it's not always a direct head-to-head competition. What we have done in 2025, first to your pricing point is I think we went a bit wild in really believing that we had an opportunity to gain share in the first half of the year.

And we had to sort of course correct because we got the price volume equation, not fully right. And I think we were quite open about that in our full year results that, that was one of the -- one of the reasons why our price volume in quarter 4 was a little bit more skewed to price rather than to volume.

Longer term, however, we do believe that the Mexican market has proven itself to be very resilient. We also have very responsible pricing in that market to make sure that beer becomes the -- is still the alcoholic beverage of choice. And we really see that stabilization coming into play in the first half of the year.

So over a longer period of time, we're very happy with the business and believe that the dynamics are very healthy.

Got it. You've got a new MD?

We do.

Outside of the pricing volume equation, is there anything he's doing differently in the business? And I guess, aside to that, are you anticipating any big benefit from the -- welcome this year?

Yes. probably -- welcome this year. So first, Oriol, we're very pleased to have him on board. He's an extremely experienced leader, came out of other FMCG Mondelez, in this case and has really got a very, very good discipline in terms of how to execute with excellence that he brings with him.

We'll leave him some time to make his own, let's call it, fine-tuning and rather speak after the fact while that is happening. But there's one thing that I can already say, the potential that we have with our 6 store franchise, he sees as a real, really big asset.

And we have 17,000 stores are the #2 proximity retailer. So he really is starting to look holistically at our ecosystem in terms of how we can drive perfect execution, but also leveraging our own outlets.

Got it. And World Cup here in Mexico?

World Cup, we hope that this is going to be an absolutely amazing event. We're glad to take the volume uplift. But what is more important to us a bit like where your question started, is it brings excitement and joy back into the category.

And this is for us extremely important because the volume spike is good, but you pay the price a year later. It really is about how you bring beer back in the hearts of the consumer.

Got it. Let's move on to Asia and Vietnam had an amazing turnaround last year, very strong market share gains, price/mix positive. How has the market performed through Tet? And how are you thinking about the outlook from here?

Yes. So first, very happy with our Vietnam business. And there was one call out could make to the team over a period of 2 years, portfolio, channel transformation, market share recovery, really proud of that, extremely well done.

Look, we'll give you a fuller update at our quarter 1 results because the difficulty with Tet is you also need to be a bit patient between the replenishment of the stocks, right? There is a deep channel that we have to service to get to the consumer.

But the initial signs of that is that it has been a quality occasion, so premium important and that has been, yes, a positive that. Those are the early indications, but we'll give you a fuller update.

Very clear.

So we're actually confident in the Vietnam growth for 2026.

I think India had some disruptions last year, weather, maybe some unfavorable excise tax moves. How are you thinking about the, the development in the regulatory landscape and the outlook for the category in '26 and beyond?

Yes. So indeed, but I'm going to answer your question a little bit different, and that is a bit longer time frame. because we know and we've been explicit that India is the largest untapped opportunity for beer that we see on the planet. But this is not going to be a very quick win. And what are there for the dimensions of success?

Indeed, what you say is how do we normalize and professionalize the category is the biggest unlock for beer in the Indian market. This is something that we, as a market leader with close to 50% market share should be leading and are leading, but all the international brewers are playing a role in that.

So what we currently see happening in India is 3 things. First is India is full of self-confidence as a nation. And self-confidence investment, this is good for people's mindset, for consumption, for growth.

Secondly is we do see, therefore, younger cohorts joining the workforce who are a little bit more open to alcohol. They are not living at home. They don't have the, let's call it, the inhibitations, if that's the right word, that maybe their parents were carrying.

They go to work, they socialize. They'd like to have a beer. And this is important because that, in turn, makes that state politicians because beer is still a state-by-state regulated category, are becoming a little bit more open for, for example, excise differentiation, but also price liberization or indeed customer outlet fragmentation and more licenses or better quality outlets. That, in the end, will drive the category growth, and we see a positive trend in India.

Got it. It feels like the big drag in the whole Asia region has been Cambodia the last couple of years. What can you do to stabilize that business? Or do you need to consider exiting at some stage?

Yes. So what we internally call unapologetically, I have to say, is we have a number of resolved markets where we are not satisfied with the value creation potential that we see going forward.

And to make that explicit basically means there are 3 options. How do we fix it ourselves? How do we partner or how do we exit? Those are the 3 flavors that we offer. And therefore, because we are a big business in Cambodia, we are really in active dialogue, first and foremost, with government about how do we normalize excise regimes and how do we normalize consumption.

For those people who are now there, in Cambodia, basically ring-pull promotions are offering so much free beer that this is an inhibition to responsible consumption. And we don't think that, that is the right way to create category growth.

So that is a dialogue that we have with the government. We then need to see whether we're successful in creating that to consider alternative options. But it does mean our Cambodia team is really all on this, and they know that the responsibility that they carry, but there is a limit to how much longer we are going to entertain a conversation before considering other options.

Got it. Moving on to Africa. The region comes with a lot of volatility, but a lot of potential. We seem to be seeing inflation moderating, particularly in key markets such as Nigeria. How confident are you on that market, which I think was a bit of a drag last year and the broader region returning to volume growth?

In which?

In Nigeria and...

Okay. I was going to say because the big delta in Ethiopia grew volume, South Africa grew volume. It was really Nigeria holding us back. And therefore, there are different stories in Africa, Sanjeet. Nigeria is really a matter of macroeconomics. It's very important that our business has done 2 things extremely well.

First of all, we're growing share. And secondly, we are really reducing the breakeven point through cost interventions in order to make sure that we are running a profitable business.

The macroeconomic situation makes it such that actually poverty is a real thing in Nigeria. And that means that people are moving out of the category, but we will be ready to welcome them back once the economy stabilizes. And what I really have to say is that the Nigeria Central Bank and government are doing a lot of good work. We see inflation coming down, currency more stable.

This is all unknown Middle East impact, just to say. But we believe that there is positive -- cautious positive recovery happening in Nigeria. Ethiopia, South Africa and Egypt are good markets for us.

And just digging into South Africa there, big strategic bet a few years ago with Distell. It feels like the beer business is starting to turn around, and you've started to get a bit more consistency there. How are you thinking about that going forward? And ultimately, is the multi-beverage strategy with wine and spirits working for you?

Yes. So first, we're still not a business case level. So I just want to -- don't want to declare victory in Heineken Beverages, so Southern Africa and South Africa just yet. But what I am proud about is indeed to what you just said, we do see real recovery in beer and in ciders is doing very well. [ Wine ] is the one that we haven't cracked yet. But Bernini, for example, is doing extraordinarily well, 40% growth, a great beer juice. And what has made the difference is 2 things. The first one is, I think we underestimated the cultural integration between Distell and Heineken.

This took longer. There was a high level of competitive activity, and we really had to bring the 2 teams together. The second one is I want to say a big thank you to our customer base in South Africa because at first, they really didn't know what this collaboration between Heineken and Distell meant for them.

But the partnership structure that we've now put in place, the route to market really is working for us, and that has been a big part of the recovery or the path to success, I should rather say, in South Africa. So we're actually optimistic that, that can continue.

Got it. I think last year, what we saw in Africa was a big margin recovery and hard currency profit growth, which has been lacking in the last few years. Do you still see opportunities to drive margins higher? Or do we expect a bit of a pause from here?

No. We still see opportunities. Look, the team that runs Africa has a very -- it's 2 very simple mantras. The first one is we need to generate value, and that means that our profit margin needs to be higher than the cost of capital. So if there is any place because we probably will speak about capital base as well that really lives up to that purpose, it's the Africa team for obvious reasons.

The second mantra they have is bank the past and be cautious on the future. And that has served us well also in 2025. I think with those 2 mentalities, we will see further opportunity in Africa. The only thing that we need to balance is let's not be too greedy because in the end, more consumers, more occasions is a long-term path to success.

So we do need to make sure that also more volume growth in Africa, when it's possible, let's just make sure that we drive a balance between volume and value growth.

Very clear. Just moving on to the balance sheet. It feels like post the Strategy Day last year, there's a sharper focus on return on invested capital in the company. How are you holding the markets to account on this? Is this now incorporated into remuneration metrics? How is it transcending across the organization?

Yes. So exactly like that. We have understood that return on invested capital is a very important metric. And it may sound strange to many of the investor base or the analyst base why this was not there before. But again, zooming out over a time frame, in the world that was 5 years ago, we had low interest rates.

Growth was there -- was the key driver of it. And therefore, a capital base that was affordable and growth becoming a little bit more easier made it less necessary to put return on invested capital so much to the forefront.

When I joined 5 years ago, I also was quite explicit. I said, let's do cost productivity first and capital productivity later. Cost productivity, we have. We now move to capital. So it is now included in long-term incentives.

We are deploying this now specifically to the top 150 leaders in the company. It is part of our dashboarding and our ongoing moving annual total measurement. We are making this operational through working capital management, CapEx management, asset management so that we are making sure that it's not a generic concept, but we break it down in manageable pieces, just like we've done with our cost bucketing and our cost performance. So this engine is starting to work.

Got it. You've also given us a cash conversion target of at least 90%. Against that, where are you in the CapEx cycle now? And where are the opportunities on working capital where it feels like you're still quite inferior to your peers?

Yes. So on the first one, we are really quite intentional in bringing our capital expenditures levels down. And again, for the audience, we really have a depreciation at about 6% of revenue and a capital base of about 8% of revenue. So that also has an impact on our financial P&L management every year. There is a reason why we're operating at 8%. We were starting to build big breweries in Brazil, for example, and in Vietnam expansion.

And we had to build capacity in Europe before we start closing breweries. And at the same time, we had to invest in returnable bottles, and we had to invest in digital and in sustainability. So that really brought that peak investment in. We now have capacity in most of the markets really sorted out.

Mexico is still in construction, will take our time to get there, not to run ahead of the market. And the only other one is India, where hopefully, there's a lot of growth and then we need to deploy capital. Across the rest of the base, it can be moderated. Our digital investment, we talked about it also in the Capital Markets Day is now at peak and is now starting to stabilize and slowly come down.

So that gives us reason to believe that capital will start to move towards the 7%, not the 8% that we're at. On working capital, we have done detailed benchmarking and analysis. And to your point, we do see very significant opportunities still in working capital management, payables, inventories.

It is important, however, to note that there is no common definition. So you need to really do the homework, what is in and what is out in order to make comparables. But we believe that there is at least EUR 0.5 billion to still go after.

Very clear. I guess wrapping up the conversation, you've been meeting lots of investors in the last few weeks, Harold. What do you think the market today underappreciates about Heineken's equity story?

So I think two things on top of mind. The first growth is imperative for any company, and that is also true for the category as a whole and for Heineken in particular, because we'd like to be known as a growth company, and that is not what the market has seen in 2025.

So the importance of growth is very much top of mind for us as well, but it needs to be of two parts. The first one is how do we grow the category. The second one is how do we win in a growing category. And I think what I'm at least trying to convey, I'm not saying it's underappreciated, but what I'm trying to convey is we believe that across the world, there is potential in beer.

And it's down to us to first start bringing the category back in the hearts and minds of consumers through affordable pricing, through innovation, through segment growth like the 0.0 or other beers. So that's the first thing that I want to convey.

The second thing is that we are not sitting still. And you started the dialogue with the CEO transition, but Heineken is in motion. And perhaps what people not fully appreciate just yet is how fast is the pace of change of growth also in Heineken, not because we have got clarity of what needs to be done, but also because the people, the cultural change, the appetite to change is absolutely there. Those two combined, we believe, makes this an investment proposition worth considering.

Very good. Harold, thank you so much for your time and the discussion. Cheers.

Cheers. Thank you.

Welcome, everyone. The Heineken Full Year 2025 Results Call will begin shortly. [Operator Instructions]

Good morning and good afternoon, everyone, from Amsterdam. Thank you for joining us for today's live webcast on our 2025 full year results. Your host will be our Chief Executive Officer, Dolf van den Brink; and our Chief Financial Officer, Harold van den Broek.

Following the presentation, we will be happy to take all your questions. The presentation includes expectations based on management's current views and involve known and unknown risks and uncertainties, and it is possible that the actual results may differ materially. For more information, please refer to the disclaimer on this first page of the presentation.

I will now turn over the call to Dolf van den Brink.

Thank you, Tristan, and good morning afternoon, everybody. Now after 6 years and with some understandable mixed emotions, today is my final full year results presentation as CEO. It is not a farewell though, I am and will be fully focused and committed to the business through the end of May. And as you all know, I love this great company, and I will miss it dearly. My priority for the coming months is to leave Heineken in the strongest possible position with momentum, clarity and ambition. It is a natural moment to reflect on how far we have traveled since launching EverGreen in 2020 in the midst of COVID and to look ahead as we move into the disciplined execution of EverGreen 2030, our new 5-year growth strategy.

Over the last 6 years, we launched a fundamental transformation of the company, delivered EverGreen 25 and navigated a demanding external environment. We have made meaningful progress in future proofing Heineken, growing the Heineken brand by more than 50%, consolidating our global leadership in 0.0, strengthening our advantaged footprint with significant deals in India, Southern Africa and Central America, while saving over EUR 3.5 billion in cost and digitizing the business, I am very proud of what we, as a team, have achieved, and there's more to do.

The next chapter is our sharpened EverGreen 2030 strategy, which we introduced at the Capital Markets event at Seville. We now have a sharpened focus on 3 strategic priorities, and the task ahead is accelerating disciplined execution. Growth. It is the foundation of our business and remains our #1 priority. Productivity, which fuels reinvestment and healthy profit flow-through. Future fitting Heineken, enabled by our digital backbone and evolving operating model. Harold will explain how we are accelerating the disciplined execution of these priorities over the next few years. With this clarity, we aim to deliver superior and balanced growth and attractive shareholder returns while future-proofing Heineken. We track this through the Green Diamond, which we have now strengthened with ROIC as our capital efficiency KPI.

Let's take a closer look at the key highlights of 2025. First, we delivered a well-balanced performance in challenging market conditions. In our growth pillar, we grew revenue through quality volume. We gained or held market share in more than 60% of our markets and in about 80% of our priority growth markets, which is even more important. In our productivity pillar, strong over-delivery of growth savings supported our margin expansion. On capital efficiency, we generated another year of solid cash flow and improved ROIC. And looking ahead, we expect operating profit to grow between 2% and 6% in '26. This is before the additional profit and earnings accretion from the FIFCO acquisition we completed last month.

So let's take a closer look at our financial highlights. Total volume declined by 1.2%, reflecting softer markets in the Americas and Europe, partly offset by consolidated volume and license volume growth in APAC and resilience in Africa and Middle East. Within that, the momentum behind the Heineken brand continued to grow 2.7%. Net revenue increased 1.6%, and net revenue per hectoliter grew 3.8%, driven by disciplined pricing and positive mix. Operating profit grew 4.4% with a 41 basis point margin expansion and net profit grew faster at 4.9%. Diluted EPS (beia) came in at EUR 4.78 million, and we are proposing a total dividend of EUR 1.90 per share, a 2% absolute increase, indicating a payout to 39% of net profit. We're also expanding our payout range for future years to be 30% to 50%. Harold will cover this in more detail later.

Although our volume declined in the year, and it's not yet where we wanted to be, the quality remained high. To better reflect our evolving asset lines approach in China, Latin America and Africa, Middle East, we will going forward report total volume, combining consolidated volume, which declined 2% and license volume, which grew almost 18%. Our mainstream brands outperformed the total portfolio declining only slightly and local power brands delivered solid growth for several major markets, including Cruzcampo in the U.K., Harar in Ethiopia, Tecate Original in Mexico and Kingfisher in India. Heineken 0.0 grew slightly. Our global brands grew almost 2% led by Heineken, up nearly 3%. The broader premium portfolio also performed well, supported by strong local brands such as Kingfisher Ultra in India, Bernini in South Africa and Legend Stout in Nigeria. This high-quality volume supported 2% net revenue growth with positive price/mix across all regions. Our productivity programs ensured solid revenue to profit conversion contributing to operating profit growth of 4.4%, in line with our guidance.

Let me turn to the Heineken brand, which continues to lead our portfolio. Heineken delivered another year of growth in 2025, increasing by almost 3%, with 27 markets growing at double-digit rates. Heineken continues to stand out for its creativity in both idea and execution. At a time when people seek more real-world connection, Heineken champions socializing in a way that's authentic to who we are, supported by our global partnership with Formula 1 and Men's and Women's UEFA Champions League. Heineken 0.0 grew slightly. Inventory adjustments in Brazil, its largest markets, partly offset good growth in Spain and the United States, and it maintained its position as the world's largest alcohol-free beer brand. It is Heineken Silver that truly drove the growth for the brand. Silver grew by almost 30%, led by Vietnam in China.

As you can see on the chart, Silver now represents about 15% of the total Heineken volume close to 9 million hectoliters. It can now be considered one of the most successful innovations in the history of the Heineken company. As part of the growth pillar in our sharpened EverGreen 2030 strategy, we're expanding our global brands. We are applying the principles of the centrally governed Heineken brand model across the broader global brand portfolio, strengthening consistency and discipline in execution. Across the global brand portfolio, we delivered 1.9% total volume growth in 2025, which shows solid progress. We have already spoken about Heineken. Amstel, our shadow premium brand connects friends around the world with a distinct social character.

Amstel delivered another strong year across all 4 regions, with continued momentum in Brazil, a doubling of volume in China, revitalizing launch in Romania and a double-digit growth in South Africa. Birra Moretti continued to unlock food pairing occasions across Europe, supported by good performances in Switzerland and in France. Tiger remains a cornerstone of our success in Myanmar, while Tiger Crystal, a more refreshing sessionable member of the family, delivered strong results and contributed to the brand's revitalization in Vietnam. Desperados reinforced its relevance in markets with its bold flavors and Latin-inspired positioning resonates strongly with GenZ consumers, especially in Nigeria and in Spain.

Productivity is our second strategic priority, and it's vital to support our growth agenda. This year, we delivered over EUR 500 million in gross savings, with increased flow-through to profits seen in our 41 basis point margin expansion. Our focus to boost cash led to a cash conversion of 87% after posting 103% last year, allowing us to deliver EUR 2.6 billion of free operating cash flow. Harold will expand on this and also how we will accelerate the EverGreen 2030 productivity agenda.

When we look at our third strategic priority, future proofing our business, brew a better world remains our framework for delivering our environmental, social responsibility ambitions. On responsible consumption, we continue to lead the category by ensuring 0 alcohol options are widely available and easy to choose. In '25, our operating companies invested 26% of Heineken brand media to promote this message, reaching 1.4 billion consumers. On carbon, we continued progressing towards our 2030 net zero ambition for Scope 1 and 2, reducing emissions by 38% over the last 3 years. On water, we improved efficiency across all breweries to 2.9 liters per liter of beer. On the social pillar, we continue building a culture belonging by equipping leaders and colleagues across the company. In '25, women held 31% of senior management roles.

With that, let me move to the regions. Starting with Africa, Middle East, where we delivered strong revenue growth, substantial profit improvement and overall market share gains. Net revenue grew 16%, with stable volume and strong price/mix reflecting earlier pricing actions as inflation eased, operating profits increased 60% supported by the transformed cost base of the past 2 years and a strong top line growth. Notably, in euros, operating profit grew more than 30%. In Nigeria, last year's cost base and capital structure adjustments, combined with continued discipline resulted in strong financial performance. Despite the soft markets, Nigerian Breweries gained significant share across lager, stout, beyond beer and nonalcoholic malts.

Premium brands, Heineken, Desperados and Legend Stout all delivered double-digit growth. At Heineken Beverages in Southern Africa, commercial execution strengthened through the year. Our beer portfolio grew with Amstel delivering particularly strong results in South Africa. Bernini, our wine-based spritzer continued to grow and expand its consumer base. I would also like to highlight Ethiopia. The business improved steadily as the economy stabilized following the currency devaluation. We reinforced our market leadership and now secured the #1 position in the North too supported by continued momentum from Bedele and Harar.

Turning to the Americas. Our business showed resilience. Markets softened as the year progressed, requiring agility while keeping strategic investments on track. Even in this environment, we gained overall share in the region. Net revenue declined 1% and beer volume was down 3%, while price/mix recovered strongly in the second half, up 2%. Operating profit declined 2%, decycling last year's significant step-up.

In Mexico, despite macroeconomic and geopolitical uncertainties, the beer category remains resilient. Our system strength, supported by the Six store network and effective revenue management delivered solid financial results. Growth was broad-based. Tecate Original, Indio, Carta Blanca performed steadily, and Miller High Life surpassed the 1 million hectoliter mark in premium.

In Brazil, after rebalancing and reducing excess inventory in the first half, the market softened in the second half. Based on sell-out data, we captured significant market share. Investment increased again in '25, including the opening of the new 5 million hectoliter Passos brewery. Amstel maintained strong momentum, supported by our CONMEBOL Libertadores partnership and the success of Amstel Ultra. In premium, Heineken gained share and Eisenbahn delivered double-digit growth.

The United States remains challenging, further impacted by tariffs introduced in the first half. We continue to work on strengthening our portfolio, including the return of The Most Interesting Man for Dos Equis last month. Heineken 0.0 remains a highlight, delivering its seventh consecutive year of depletion growth.

Moving on to APAC, where we delivered growth across all metrics and gained overall market share. Total volume increased 4% with consolidated beer volume slightly up and license volume up 27%. Net revenue grew 4%, supported by strong price/mix of almost 5%. Operating profit grew 5%, driven by strong performances in Vietnam, India and Myanmar.

In Vietnam, volume grew high single digits as the market returned to positive momentum, a strengthened route to consumer and effective portfolio expansion enabled outperformance in both on and off-premise channels, accelerating our leadership position. Heineken grew in the high 30s, led behind Heineken Silver, while Larue Smooth continued expanding its footprint.

In India, volume grew mid-single digits ahead of the overall market. As the country's largest brewer, we continued shaping the category, expanding our reach and transforming our sales model. Kingfisher maintained its growth trajectory, supported by cricket sponsorships, while the premium portfolio grew strongly led by Kingfisher Ultra, Ultra Max, Heineken Silver and our latest innovation, Amstel Grande.

In China, Heineken Original and Silver delivered another year of double-digit growth supported by strong execution and high-impact sponsorship such as Masters Tennis and the Shanghai Formula 1. Amstel also doubled volume through distribution gains and excellent in-market execution. With the increasing contribution of royalties and share of associate profits, China became a top 3 market for the group in delivering net profit in 2025.

Turning to Europe. Our performance was mixed in a challenging environment. Overall market share contracted slightly due to retailer disruptions, although we gained share in the on-premise channel. Net revenue in total volume each declined 3% with price/mix just above 1%, supported by pricing and a stronger premium portfolio. Operating profit declined almost 5% as volume deleverage and inflation more than offset the strong growth savings, including continued progress on supply chain rationalization, brewery closures and the refinement of our intermarket sourcing model.

In the United Kingdom, our broad portfolio, innovation pipeline and continued investment in the Star Pubs estate supported solid financial performance. Cruzcampo continued its exceptional trajectory, now in its third year. Murphy's Stout outperformed the growing stout categories through distribution gains and expanded draught presence. In cider, premiumization continued with strong growth from Inch's and Old Mout. We also received top honors in the Advantage Survey, where customers rated us the #1 supplier across all FMCG companies in both on-trade and the grocers in the off-trade.

In Western Europe, extended negotiations with off-premise buying groups weighed on performance. These discussions focused on protecting long-term sustainable category development were fully resolved in the second half, with distribution and shelf space recovering as the year progressed. Despite the disruptions, we gained on-premise share and continue to see strong contributions from our premium portfolio including Gallia, Texels and STELZ. Our global brands also performed well in selected markets, including Heineken in Italy, Birra Moretti in Switzerland, Amstel in Romania and Desperados in Spain.

And let me now turn to our newest operating company. On January 30, we completed the acquisition of FIFCO after receiving all regulatory approvals. This transaction significantly strengthens our presence in Central America, and advances EverGreen 2030 by bringing together a portfolio of high-quality assets that enhances our long-term growth platform. It deepens our advantaged geographical footprint in markets supported by strong macroeconomic fundamentals and favorable demographic trends. Through this acquisition, we gained full control of Costa Rica's leading beverage company, including our common brands such as Imperial, a well-established PepsiCo franchise and attractive adjacent businesses in wine, spirits and in proximity retail.

We also assumed full ownership of HEINEKEN Panama, a consistent strong performer that has repeatedly outpaced market growth. In addition, the transaction provides an equal partnership in Nicaragua's leading brewer, Compa��a Cervecera de Nicaragua, expands our access to a scalable food and beverage platform in Guatemala and adds fast-growing beyond beer brands in Mexico. The acquisition is expected to be value accretive enhancing our operating profit margin and earnings per share, while strengthening our strategic position across a dynamic, high-growth region. On day 1, we welcomed our new colleagues to the Heineken family and began the integration process, which is expected to complete in 2026. We have appointed a strong integration team to ensure business continuity while driving growth.

Harold will take you through the financials of FIFCO, which will be accretive to earnings in '26. And with that, over to Harold to discuss the financials.

Thank you, Dolf, and good morning all. I'm pleased to take you through the financial highlights of our full year 2025 results and the outlook for 2026. And starting with our top line performance on Slide 17. We posted an organic growth of EUR 0.5 billion or 1.6%, a 2.1% volume decline was more than offset by a positive price/mix of 4.1%. Pricing contributed 2.8% and mix added another 1.3%, a result of continued premiumization and strong execution behind our global and local power brands.

Pricing was more pronounced in Africa, Middle East, covering for local input cost inflation and currency devaluation, while in Europe and Americas, our revenue per hectoliter growth was very moderate. Currency translation dampened revenue by almost EUR 1.5 billion, reflecting the strengthening of the euro against some of our key currencies. The minor consolidation effect of minus EUR 84 million relates to our exit of Sierra Leone and a brewery sale in Eastern Congo.

Turning to operating profit. where we delivered EUR 4.4 billion of operating profit (beia) growing 4.4% organically and resulting in an operating profit margin (beia) of 15.2%, up 41 basis points organically versus last year. The EUR 467 million of organic net revenue (beia) growth on the previous page translated to EUR 198 million organic operating profit growth, a conversion rate of 42%. With negative volume leverage, moderate pricing and continued investments in brand and digitalization, gross savings from our productivity programs were a critical driver.

Variable cost per hectoliter increased by low single digits, with meaningful differences across regions, ranging from mid-single-digit decrease in Europe, low single-digit increases in Americas and Asia Pacific and high single-digit inflation in Africa, Middle East. Marketing and selling investment as a percentage of net revenue reached 9.9%, up 6 basis points compared to the prior year. Investments concentrated on our priority growth markets, including Brazil, Mexico, U.S., South Africa, Vietnam, U.K. and India, with a meaningful step-up in sponsorships and in trade execution, and particularly in Africa, Middle East and Asia Pacific. Marketing and selling expenditure on our 5 global and 25 local focus brands accounted for over 80% of total spend.

On a regional level, the main contribution to operating profit growth was the Africa Middle East region, where operating profit grew 62%, as Dolf said, benefiting from a transformed cost base from productivity savings delivered over the past 2 years and revenue growth outpacing inflation. Operating margin (beia) improved over 400 basis points, now reaching 12.8% for the year 2025. In APAC, operating profit grew by 5.8% with strong contributions from Vietnam, India and Myanmar, held back by Cambodia.

In the Americas, operating profit declined 1.9%, incorporating the tariff impact on imports into the USA. Also worth bearing in mind that we cycled a strong prior year comparison where the region grew operating profit by almost 25%. And finally, in Europe, operating profit declined 4.9%. Decreases in Poland, Austria and France outweighed growth in the U.K. and Spain. Lower material and energy costs and strong growth savings include a further European supply network rationalization were more than offset by volume deleverage and general inflation. Consolidation changes had a negative impact of EUR 36 million. Translational currency effect was EUR 290 million negative, again, mainly caused by the strengthening of the euro.

Let me turn to the other key financial (beia) metrics on Slide 19. On the second line, you see that our share of profit (beia) from associates and joint ventures grew 5.3% organically, over half driven by strong mid-teens growth of our CRB partners in China. Net interest expenses (beia) decreased by 1% to EUR 522 million, reflecting a lower average net debt position and a lower average effective interest rate of 3.4%. Other net financing expenses improved by almost 18% to EUR 199 million due to lower losses from currency revaluations on outstanding foreign currency payables, especially in Nigeria, following our successful rights issue and subsequent balance sheet restructuring at the end of last year.

Net profit increased by 4.9% organically to EUR 2.66 billion, which includes an increase in income tax expenses and noncontrolling interest. The effective tax rate (beia) was 27.2% compared to 27.9% in 2024. The improvement mainly reflects changes in the profit mix. All in all, and factoring in the share count reduction from our share buyback, this resulted in a constant currency EPS (beia) increase of 3.6% to EUR 4.78. We will propose at the AGM of this year a dividend increase of 2.2 per share to EUR 1.90. This equates to an equivalent amount of EUR 1.046 billion to be returned to shareholders through dividends. Finally, our net debt-to-EBITDA ratio was 2.2x at the end of the year below the long-term target of below 2.5x. When we consolidate FIFCO in 2026, we will see a moderate uplift and as per our policy, we'll aim to bring this back to below 2.5x target at pace.

Let me now turn to the free operating cash flow. We generated EUR 2.6 billion of free operating cash flow in 2025, a strong cash conversion of 87% following last year's peak 103%. We are pleased with this performance. The year-on-year decrease of EUR 456 million should be seen in conjunction with last year's strong working capital improvements, which contributed approximately EUR 1 billion to our free operating cash flow for 2024. This year, we further improved working capital by over EUR 300 million, with main working capital as a percentage of net revenue, improving by almost 1%. Because the improvement is less than last year, the effect is negative, as shown in the EUR 523 million adverse impact. CapEx amounted to EUR 2.4 billion, representing 8.3% of net revenue (beia) in line with our guidance. Many investments related to our new Passos brewery in Brazil, our Star Pubs in the U.K. and in our digital backhaul. Cash used for interest, dividends and income tax decreased in aggregate by EUR 78 million.

Let us now turn to our capital allocation priorities. As a reminder, in our value creation model, we prioritize capital allocation towards organic growth. We do so with a disciplined financial framework, with a prudent approach to debt. We remain committed to our long-term below 2.5x net debt-to-EBITDA ratio. We maintain a regular dividend policy as we've had for decades as an important and consistent source of shareholder returns.

Going forward, we bring the dividend payout policy range to 30% to 50% of net profit before exceptional items and amortization of brands, so net profit (beia) compared with the prior range of 30% to 40%. We pursue value-enhancing acquisitions for long-term profitable growth. And with the FIFCO acquisition completed in January, we're excited to welcome the brands, the customers and the people to Heineken. Actively shaping the portfolio also means resolving or exiting operations where we see limited possibilities for sustained value creation. And as previously indicated, we consider returning excess capital via share buyback. This time last year, we announced a EUR 1.5 billion program and completed the first EUR 750 million tranche last month. We will shortly announce the start of our second EUR 750 million tranche. We outlined our EverGreen 2030 strategy last October at the Capital Markets Day in Seville.

Let me now take a minute of how we accelerate execution in 2026. As Dolf already mentioned, our priorities are clear, with growth as our #1 priority. We are directing resources to strengthen our growth profile staying close to consumers and customers. At the same time, we are increasingly leveraging our global scale to improve productivity and simplify how we operate. A key focus is on how we build and manage our brands. All our global brands, representing almost 40% of total volume and now adapting the Heineken brand model, combining a pioneering spirit with a structured repeatable way of building brands that support consistent execution and better value delivery. Amstel's progress over the last year demonstrates the impact this can have. We are also increasing the breadth and space of our innovation.

In 2026, we will have around 3x as many launches and pilots in our priority segments, which allows us to respond more effectively to changing consumer needs. Freddy AI will become a core enabler of our marketing and brand building processes. And by the end of 2026, most markets will be onboarded, representing close to 80% of our global marketing and selling investment. This will deepen consumer and customer relevance and enable excellent execution at speed and scale with improved ROIs over time.

To fuel the growth and the profit, we are stepping up productivity initiatives and make changes to our operating model. We are moving to a simpler, leaner Heineken centered on empowered operating companies. In selected regions, we are transitioning to multi-market operating companies or MMOs. 4 MMOs will already go live in Europe in the next 6 months. We're accelerating the leveraging of our global scale, including further expanding our global supply networks and enlarging the scope of Heineken Business Services. The transition to a single global digital backbone will further standardize data and processes, enabling automation and productivity, and we are moving to a smaller, more strategic head office.

Concretely, we will streamline our supply chain through brewery digitization and selected closures, exit markets where we do not see a path to sustainable growth and transition around 3,000 roles to Heineken Business Services to double its scale and broaden the services it provides. Across these initiatives, we expect a net reduction of between 5,000 and 6,000 roles over the next 2 years. Time lines will vary by market, and we will support impacted colleagues with care, respect and appropriate assistance. These actions are designed to deliver the EUR 400 million to EUR 500 million of annual gross savings and allow us to continue investing in our brands and capabilities while supporting healthy operating profit growth.

Now then the outlook for 2026. We remain prudent on the macroeconomics and the consequent household spending in several markets. At this stage of the year, we do not expect the consumer environment to materially change. We anticipate operating profit to grow between 2% and 6% on an organic basis. As just highlighted, we accelerate the disciplined execution of EverGreen 2030 at pace, invest behind our growth and step up needed cost interventions. As such, we expect gross savings to be at the upper end of our medium-term guidance range. In terms of variable costs, we expect a low single-digit rise, primarily from currency effects on local inflation in Africa. The effective interest rates and the other net finance expenses are expected to be in line with 2025 and our effective tax rate to be in the range of 27% to 28%. And lastly, the completed acquisition of the FIFCO Beverage and Retail business is expected to be accretive to EPS in 2026.

Now let's double-click on the financials of FIFCO. As a reminder, we acquired the business at 11.6x EV EBITDA multiple for a EUR 3.2 billion cash consideration. This means that our net debt-to-EBITDA ratio will increase moderately and expect to be back below 2.5x by 2027. At the time of the deal announcement in September, we gave you the '24 financials. The '25 financials do not differ materially. Net revenue of $1.15 billion and an operating profit of $276 million. These figures are, of course, based on the local accounting policies. The integration team will now start to align reporting with the Heineken accounting policies. And like I said earlier, we closed the transaction on the 30th of January. For the 11-month period, we expect FIFCO to be circa 2% to 3% accretive to EPS in 2026.

To summarize, for 2025. We achieved a well-balanced performance in challenging market conditions. In the growth pillar, we delivered revenue growth consisting of quality volume with solid market share gains. In the productivity pillar, our teams realized another year of strong growth savings, the key driver of the operating margin expansion. We are pleased with the progress on capital efficiency with solid cash flow and an improving ROIC. And for 2026, in a similar market context as 2025, we accelerate the execution of EverGreen 2030, putting our growth strategy in place and taking bold productivity measures to unlock investment space and enable profit expansion. We expect operating profit (beia) to grow in the 2% to 6% range. Thanks for listening. And now over to you for questions.

[Operator Instructions] Our first question comes from Sanjeet Aujla from UBS.

Dolf, just a quick word to wish you all the best for your next steps and thanks for all the openness and transparency over the years. I've got 2 questions, please. Firstly, can you just go into a little bit more on the pricing actions in Americas in Q4 and how your market share has responded to that? And is that perhaps behind some of your cautiousness on volumes into '26?

And secondly, just digging a bit deeper into Europe, where are you on distribution and shelf space now following the resolution of the retailer disputes, are you anticipating to recoup that fully in 2026?

Very good. Thanks for your kind words, Sanjeet. Let me take a first step and then Harold can complement. Just on Europe, already in the second half, distribution and shelf space has been recovering month-over-month. On shelf space, there were some gaps left, but we are very confident that in the spring resets, those will be completely closed. We're also making very good progress on the retail negotiations for this year. And again, no regrets on biting the bullet last year, as very important strategic principles. And in our view, the long-term sustainability of the category were in play in those negotiations, and yes, the outcome of those negotiations, even though taking longer than expected, were acceptable to us.

On pricing in the Americas, did you picked up that we took pricing up a bit to the back end of the year, but also in response to input cost. Our market share in the aggregate in Brazil has been very strong on sell-out. And we all know that at the beginning of the year, we had to stock resets impacting our sell-in. But on sell out market share has been very strong throughout. In Mexico, we had very strong market share indeed for the first 9 months, and that came a bit under pressure in the last quarter indeed. But in the aggregate, we are confident, and we are happy with where we are at. Harold, anything to add on that one?

Yes. Maybe on that last point, just to piggyback on that because Sanjeet, your question is also looking forward. And I think it's fair to say that we are happy with where the pricing and the promotional level of activity is at this moment in the run going forward. As you know, these things really go in waves, and we take pricing on our own demand by taking competitive realities into account, and we felt that we really had to adjust in the second half of the year, especially as what Dolf just said. But we are happy where it is, and we don't expect an overhang from that going into 2026.

Our next question comes from Chris Pitcher from Rothschild & Co Redburn.

And I echo Sanjeet, Dolf, wishing you well in the future. And leading on from that comment, in Seville, it really felt like you presented the next chapter for Heineken. So it really was a surprise to read that you've decided to leave. I appreciate you're moving into the execution phase right now. And this morning, on interview, you said the Board has completely supported that strategy. I'm just trying to understand the role of the CEO over the next 2 to 5 years because there's obviously a lot of operational execution required with FIFCO, about 10% of the global workforce impacted either through transitional reduction.

But also from a branding perspective, brand set that EUR 15 billion target for your international brands. And 3 out of the 5 actually saw volumes decline this year. So what is the challenge? Is it more of an operational execution? Or is it more on the brand side? And could you perhaps just give us a bit more color on Tiger, which seems to be sort of struggling in its positioning versus Heineken?

Very good. Thanks, Chris. Yes. A couple of thoughts. First of all, indeed, it is very important. And the words of Peter Wennink, the Chairman of our Supervisory Board in that press release a couple of weeks ago, we are very intentional that there is very explicit alignment between the Supervisory Board, the Executive Board and executive team that EverGreen 2030 is our strategy. It's clear, it's compelling, and it provides a lot of, yes, clarity and direction to the company. So that stands now and in the foreseeable future. It is all about accelerating disciplined execution. The announcements that we included in our release today on productivity, on FTE reductions should be seen very much in that spirit. And we're not slowing down. We are accelerating. We are now really operationalizing and double clicking on the priorities as we presented them in the interview, and more to come in the months and years ahead.

On the branding, we indeed believe that about 10, 15 years ago, we made a governance change on brand Heineken, which ultimately unlocked systemic growth on the Heineken brand. It's amazing its year-over-year through all the disruption and turbulence of the last year, every year, the Heineken brands kept on growing. Last year, it was growing. It was up double digits in 27 years. So that governance model with a much more clear global governance and direction, but is now going to be applied on the other global brands. Amstel is a fantastic example that already moved a bit earlier, and you see the results with an acceleration of the performance of the Amstel brand across all regions.

The incredible success in Brazil, now the doubling in China, South Africa returning to significant growth, but also in Europe in markets like Romania, where we are launching it. Moretti and Desperados, also a little bit because of mix effect because Europe is such a big proportion of those brands. And the home markets or some of the large markets, for example, Poland, for Desperados do impact a little bit the brand. But we are very confident that when the step-up in that brand confidence, there's a lot of potential for brand Desperados and Moretti. And we keep rolling out Moretti to new markets in Europe, and we keep expanding Desperados on a global level with, for example, in the Africa region, fantastic results in Nigeria, C�te d'Ivoire and other places.

Tiger is disproportionately impacted by Vietnam because underlying the brand is doing well. Vietnam,of course, being such a big part of the brand. And there, we are really in a revitalization of the brand. Actually, Tiger Crystal is now in absolute terms, larger than Tiger Original and continuously grow. And actually, we are approaching the moment where the decline on the underlying Tiger Original business is smaller than the increase on Tiger Crystal.

And in a way, what happened with the Heineken brand, the Heineken brand was under pressure for about a decade until the launch of Heineken Silver. And Silver has done an amazing job revitalizing brand Heineken across the APAC region. And we think with Tiger Crystal something happening similarly with Tiger. So let me leave it at that.

Our next question comes from Simon Hales from Citi.

And I just echo as well everyone else's comments, Dolf to you. Thanks for all your insights and wisdom over the last 6 particularly challenging years for the industry and all the best for the future. I've got a couple as well, please. Obviously, you talked in your presentation and in the press release this morning about being prudent still on the consumer backdrop coming into 2026 and you've issued that 2% to 6% organic guidance for the year. So what factors do you think will drive you to the upper end or the bottom end of the range? Is the first question. What should we be bearing in mind there?

And then secondly, around AI adoption in the business in 2026 and specifically AI adoption through Freddy's in marketing. What's that really going to mean do you think, for savings in marketing in the short term? How should we think about the overall marketing spend levels in 2026? I think from memory Dolf back in Seville at the end of last year, you talked about aiming to get A&P or marketing above 10% as a percentage of sales. You're on the cusp of that. Should we see you get there in 2026?

Yes. Very good. Thanks, Simon. Thanks for your kind words. Let me take the second part and then over to Harold. On the AI adoption. So first of all, the old AI machine learning has been adopted across the business for many, many years, particularly in supply chain, but also beyond. Of course, AI is different ways, whether it's the generative AI, your customer service, whether it's more agentic AI across operations, we're really moving at pace and in a focused way, focused on clear use cases that we are done scaling across our network.

Marketing is indeed, as you were saying, particularly prone to the use of the more, let's say, future AI possibilities. What we announced, what Bram announced in Seville, the launch of Freddy AI, which is kind of our global internal marketing engine, which we're building, and it's built completely with AI in mind. And indeed, with time, it should unlock significant savings. To what extent we will reinvest these savings or whether we will let them go to the bottom line is to be determined along the way. We are not expressing ourselves at this point.

We are very proud that even in a challenging year for the industry last year, we're able to expand our marketing investments in absolute terms. Indeed, we went up in basis points to very close to the 10%. And we, for this year, are still planning an absolute increase in our marketing investments. But indeed, yes, a lot of organizational focus and attention is now into the building, designing and scaling of Freddy AI now and for the years to come. Harold, if you can take the one on the prudent guidance.

Sure, well. The guidance, and indeed, it starts with a recognition to link it to what Dolf just said that it's important for us to continue to invest in the category and continue to invest in our brand portfolio and continue to invest in the digitization of Heineken. And we are basically being realistic that as from quarter 4 exit rates to quarter 1 starting rates, we don't see a material change in the consumer environment, neither in the economic certainty or uncertainty that the world is at the moment, offering us. So in that sense, I think Dolf is right that we're cautious on the macroeconomics and the economic sentiment determined to invest in the long-term health and strategic pillars of the growth of this organization and by stepping up productivity, ensure that we have got the flex to deal with those realities.

And we talked, Simon, before about the fact that we are not giving, let's call it, good summer, bad summer ranges. We are really now starting to pivot to different scenarios in different markets aggregating that up and that's where the 2% to 6% range is coming from. So we'll just have to see how things are evolving in 2026, but we got the ammunition to keep on investing in growth.

Our next question comes from Richard Withagen from Kepler.

And also from my side, Dolf, all the best for the future. Now the 2 questions I have is the first one, you mentioned the aim to accelerate the growth of the global brands using the Heineken brand model. So maybe you can elaborate a bit in what way has the brand building of the global brand is different from the Heineken brand. Is it perhaps in terms of innovation, commercial execution, less resources, perhaps some background on that?

And then the second question is back to Europe. Yes, we saw volume pressure from the retail disruptions and negotiations. Can you tell us what specific commercial changes are being implemented to avoid a repeat of those disruptions? And do you expect volume growth in Europe in 2026?

Thank you so much. Let me take the first one and then Harold if you can take the second one on Europe. So on the difference in the model, I don't want to go into too much detail, but the governance of Brand Heineken is firmly done from the center. And it means that positioning campaigns, tech lines, commercials are all centrally developed and sometimes adopted or customized for differences across regions. With some of the other global brands, take Moretti until very recently, brand ownership and governance was done out of Italy. But the team in Italy doesn't have the kind of global perspective that is now needed going forward. And the same applies to the other global brands.

So this is really about strong global brand team centered in Amsterdam with a global perspective and really taking ownership of positioning the brand strategies, the core campaigns, really leveraging also the benefit of scale and skilled insights if you'd like. And we started moving that already a bit early with Amstel and you see the incredible success and acceleration of performance that was the consequence. Harold, over to you.

Yes. So let me tackle the Europe question. So first, it's important to realize that if you look at the volume growth in Europe, about 2/3 of the volume drop that we saw in Europe was related to market and market specific circumstances and about 1/3 was impact from the negotiations that we were just talking about. We also previously spoke about the household sentiment, the consumer sentiment in Europe that has been relatively subdued, and as a consequence of that, we really saw a trend towards more price-sensitive or value-seeking consumer. We spoke about that previous.

Important to note that both in 2025 as well as the outlook for 2026, we believe that we are seeing price mix management that is below the level of CPI inflation that we see. And therefore, bringing affordability more back into the category. The second thing is what Glenn and team is doing is really starting to focus on growth pockets, whether this is our start-ups in the U.K., the Cruzcampo brand that we really see another 50% growth coming from there in the U.K. And we still believe that there are great growth opportunities in France, which is a growing market as consumers prefer increasingly beer over wine. And the same is true in some of the other southern markets with different propositions and innovation that Dolf was also talking about.

So it is really about growth pockets, innovation, premiumization in selected markets, but also making sure that affordability comes into play. And in order to finance that and increased investment in brands and categories, we really need to take the cost out as a result of which we've really driven that productivity lens globally but also specifically in Europe. So that's the equation that we follow.

Our next question comes from Olivier Nicolai.

I would echo everyone else's comments. Thank you very much, Dolf. I got 2 questions, please. First of all, could you give us a little bit more color on Asia Pacific. In Q4, beer volumes has been slowing down about minus 3.4%. How much shipment phasing there is related to the debt, which is obviously going to benefit Q1? And if you could help us to quantify this, that would be great.

And then secondly, a question on the free cash flow, EUR 2.6 billion. That was ahead of expectations. Could you give us a bit more details on how much upside do you see there going forward, particularly when it comes to net working capital and inventory specifically? And is it realistic to go back towards EUR 3 billion its year.

I'm for sure going to leave the second question to Harold. Let me take the APAC question. First of all, we -- let me emphasize, we are very happy with our performance across APAC. And I think the footprint is working very, very well. Vietnam, of course, is such a critical market for us. And after the incredible market disruption in '23, the stabilization in '24, '25 was really the year where both the market returned to growth but also where Heineken Vietnam really resumed market share gains. So we significantly outpaced the growth of the market across regions, across channels, both on and off-trade, premium and mainstream. So it's a very broad-based recovery of market as well as our relative performance momentum.

There's always the timings of debt and those kind of things that impact a bit quarter-by-quarter performance. But in the aggregate, we're very happy with the performance of Vietnam. India, as we -- this is such a critical strategic pillar of the company now. I think we all agree, it's probably the largest frontier market globally in terms of upside on per capita and in absolute terms. We're very happy by the job done by the team after initially also, yes, a job to kind of integrate and normalize and standardize the business to Heineken standards. We are now really starting to see the fruits of, yes, the commercial strategies coming to life. The back end of last year was really impacted by weather. It was extraordinarily cold and wet in Q3 going into Q4. But from a market share performance, we're very happy with India, both on the core Kingfisher brand, which is by far the leading brands in the country, but also in particular, our premium portfolio with Kingfisher Ultra, Heineken, Amstel Grande, what have you.

Cambodia is probably the market that has been the biggest drag on our results in Q4. They were playing against a large number of local players with a lot of overcapacity, not everybody playing to the same rules. So that remains a concern that we are focusing on. But in the aggregate, very happy with the APAC performance. Again, we keep reiterating in the organic results you're probably referring to, you don't have China, which is an absolute success story. This is such an important strategic pillar of the company now. We keep growing double digits. Brand Heineken up double digit again, and now Amstel becoming a sizable second engine, which is only at the beginning of the curve.

And as we revealed in the press release or actually in my comments, I believe, it's now a top 3 market in terms of absolute net profit contribution, if you take the income from associates plus royalty income. So this -- yes, we sometimes feel frustrated and it's also one of the reasons where Tristan proposed to update the volume definition to give more visibility to the license volumes because actually, strategically, this is becoming a very important part of the business and relatively asset light. Let me leave it there. Harold, on the cash flow?

On the cash flow, I like the challenge. But there is a reason why we said we were pleased with our performance because we are -- as we said at the Capital Markets Day, really paying more and more attention to free operating cash flow delivery, but also return on invested capital as we extensively discussed then. It also is important to realize what we're doing with that free operating cash flow. We continue to invest in the organic side of the business, but the addition of FIFCO is a really, really important jewel that gives us coverage, great coverage with great brands in Central America.

You will have noted that we're expanding our dividend range from 30% to 50% and are increasing our dividend slightly but slightly nonetheless. And we are announcing the second tranche of our share buyback program. So the free operating cash flow is an important metric for us to also enable sustainable shareholder value creation in the long term. The EUR 3 billion is a good ambition to have, but I'm not going to commit to it in 2026, as you will understand.

Our real focus is to sustainably bring the cash conversion rate up to 90%. And you will have seen that all the levers are in play. Our net working capital improved as a percentage of revenue by 1%. Our CapEx, we really talk about growth without CapEx. Don't take this too literally. But we are really getting the leverage out of our existing capital base, and importantly, management focus, both better forecasting, but also action. Cash actions are really stepping up in that space. So that's the message that we're trying to signal, whether it leads to EUR 3 billion, time will tell.

Our next question comes from Laurence Whyatt from Barclays.

I once again echo everyone's thoughts, Dolf, best of luck for the future. I really appreciate you've taken the time over the past few years to help us out. A couple of questions for me. Firstly, on Mexico, I appreciate you've taken quite a bit of price in recent years and again in Q4. But what strikes me about the Mexican market is just sort of the lack of the premium segment. It seems to have a very low percentage of premium beers sold in Mexico. And so whilst I appreciate you're working on the price element, is there something more that could be done on mix within Mexico just to sort of get that percentage of premium beers up? And of course, I would have thought that leads to greater profitability there as well.

And then secondly, on your Heineken 0 brand, we've seen a number of line extensions over the past year and a couple of more announced just this year. Some of those extensions are on sort of fruit flavors. I'm just wondering how you see this sort of strategy evolved? How close can you get to sort of more of a soft drink type of brand with the Heineken 0 as you add more and more fruit and whether those line extensions you're expecting to bring new consumers into the beer space? Do they go into the alcoholic side of Heineken once they try these line extensions? Sort of how do you see the nonalcoholic part of Heineken impacting the rest of the Heineken brand?

Very good. Very good questions. So thanks for your words, Laurence. On Mexico, indeed, historically, the premium segment has been small. I know from my own experience leading the market a bunch of years ago, that it is not for lack of trying on our behalf nor the competition. I think it might also be a reflection that the absolute price level in the market is, for example, compared to Brazil, much higher. So I think it might also have to do a little bit with the affordability of mainstream creating maybe less space to go above.

Having said that, we do see premium segments now accelerating. In our portfolio, we see it with Miller High Life, which crossed the 1 million hectoliter mark. I remember doing the first license deal with, of course, many years ago, and it was -- Miller High Life was a rounding error and it's now becoming actually a meaningful brand at scale with very fast growth. The same for Dos Equis our affordable premium brands. So we do believe that there's an opportunity, but it might go a little bit at a different pace than it has been going in other markets like Vietnam or in Brazil.

On the 0.0, the line extensions had come in 2 shapes. It's the flavors under the regular 0.0. We piloted them last year, and we are now really scaling them. And of course, a couple of key markets like now the U.S. and the U.K. And we have the ultimate, which is the triple 0, including 0 calories, which we piloted in the Northeast of the U.S. and which is expanding now too. So we're indeed experimenting, learning different ways rather than go to big global launches in one go. We're really kind of feeling our way to see where the consumer is at. But we are very confident that there's very good upside there.

On the question on soft drinks, we do believe it's not about us trying to be a soft drink. I think it's the other way around. We believe that by extending our 0.0, we can play into premium adult natural beverages, which is clearly complementing soft drinks, and it's an area where soft drinks cannot go as easy as we can using a beer brand as a brand carrier makes it more adult. Given it's 0.0 beer, it's more natural. Typically, it has much lower sugars, much lower calories. So we believe -- and it commands premium pricing in a very significant way.

So we really like where this is going and where the first generation of 0.0 beer started very close to beer occasions at moments that somebody chose for a no alcohol option. We do believe indeed that we can start to unlock new occasions that were not accessible before, as the 0.0 segment is maturing. And as the global leader, we should take the leading role in pioneering that. So we're pretty excited about it.

Just maybe to follow up on Ultimate. Do you see that playing a different space to where the current 0.0 beers are? Are they taking share from each other? Or do you think that's really opening up a new market.

No, we do believe that, that's a new market. Where Heineken 0.0 Original, really plays into less beer drinkers or for certain occasions where people -- unlike a lunch occasion or a business dinner occasion where people rather stay in control and not have the alcohol version. The Ultimate plays into complete new occasions around sports moments, after sports occasions. That's why the global sponsorship with Padel is interesting in this regard. So we're really trying to -- in the end of the day, marketing is about growing consumer penetration, and that's what we're trying to do very intentionally with these line extensions.

Our next question comes from Sarah Simon from Morgan Stanley.

Dolf, you will be missed. I had 2 questions, please. First one was on FIFCO. You've given us some numbers in terms of the performance in dollars, but can you give us a bit more color around how the business performed organically in 2025, and also what you're kind of expecting in terms of what things are looking like for '26?

And the second question was around sort of following on from Laurence's question on 0.0. You obviously had basically flat Heineken 0.0 volumes during the year. And I appreciate your comments about distributor inventory resets. But what do you think your 0.0, let's say, sellout is globally? And how does that compare with what you think the market is doing?

Yes. Thank Sarah. Let me take the second, and then maybe Harold can comment on the FIFCO question. So our largest Heineken 0.0 market globally is Brazil, and that was, as said, highly disrupted by the stock reset in Brazil. In the key and core markets, like, for example, the U.S., Heineken 0 continues to do very, very well. And in the aggregate, we need to be careful that we don't make new forward leading comments, but 0.0 should drive disproportionate growth across our portfolio. We remain very bullish. We believe consumer penetration is still low and building. We are unlocking new occasions as per the prior discussion.

Globally, it's still low single-digit percentage of the total beer category. In Europe, it's nearing 4%, 5% in core markets like the Netherlands. Spain, it's 10%. I don't see no reason why this can't be 10% of global beer in XYZ years. We were the first mover about a decade ago. We have been very intentional about scaling and for sure, we will continue. So we would see '25 performance as an outlier due to some very specific cyclical reasons. But underlying, we are very confident in our low and no strategy portfolio and business momentum. Harold?

Yes, let me be brief on FIFCO. So first, I think it's important to reemphasize that this is really about long-term strategic fit. We're very happy with the brand portfolio. We're very happy with our market share positions. We're very happy with the grip that we have also through retail outlets. So we really believe that for the long term, this is a fantastic opportunity for us. And let's remind ourselves also that compared to the other markets, the per capita consumption is still relatively low. So we do see growth opportunities in the Central America, but in particular, in the Costa Rica market as well.

Then in terms of the trading question that you're asking is pretty much in line with 2024. So no big dramas there. It's also very much in line with what we had assumed for 2025. So no surprises coming there. And yes, there has been likely many of the American markets, some impact from macroeconomic uncertainty, for example, tourism have been down a little bit, and that may have had some impact on market category growth momentum, but nothing that worries us at all going forward.

Our next question comes from Andrea Pistacchi from Bank of America.

And Dolf, also on my part, thank you for the open interactions, insights and all the very best. Two questions, please. First one, I wanted to go back to Brazil a minute, please, which showed a sequential improvement in Q4. You gained share in the market, but could you maybe talk about the health of the market? Are you seeing signs of improvement as we go into this year? How constructive do you feel about Brazil recovery in '26? And also how is the new brewery opening proceeding? And will it drive cost savings already this year?

My second question is actually on the multi-market operations. Could you talk a bit about the scope of these multi-market operations? How large are the clusters? Is this mainly a European initiative? Or is it global? And the pace of moving towards these MMOs and what do you see as the main benefit besides cost savings?

Thank you, Andrea. And let me take the first one and Harold will take the second one. So on Brazil, again, overall, on sellout, we are very happy and pleased with our ongoing market share momentum, really driven by brands Heineken and the Amstel brand, but now also Eisenbahn really picking up and some of the more super premium brands. The market did slow down remarkably in the second half of the year, the market is going into decline. We are deliberately cautious on the short-term outlook on Brazil. We don't want to look too much into January numbers.

Let's wait for the Nielsen numbers also to see what that is looking like. We're really focusing on what we can control, which is brand portfolio, which is our relative pricing decisions, which are our activation plans. And there, again, we feel very confident also for this year. The brewery Passos is very important because of its physical location. We were trucking a lot of beer from the Northeast to the Southeast where the bulk of our volume is. And so there is Immediate logistical savings, there is government incentive savings. So even though our volume is not expanding at a rapid pace in the short term, this will come with an optimized P&L. And that was also one of the reasons why we did pursue that opening. Harold, on to the MMO question. .

Yes. So first, the reason why we're doing this MMO is really that we see opportunity to be stronger together as Glenn would call it. Most of the FMCG companies that we know of have already started to do that. And we do believe that there is opportunity, but very importantly, a dedicated management team at country level will continue to exist. So this is not really about taking the eyes of consumers and customers. It really is about pulling resources where we believe they are better equipped to do that above a single market and really pull, therefore, that together in a multi-market structure.

We will look at this geography by geography. We have already some of these multi-market operations in play and the biggest one that we know is, of course, Heineken beverages in South Africa, where we already see leveraging portfolio, leveraging distribution systems, leveraging support offices is really benefiting the total of the cluster. So this is not new to us, and it's something that we really want to start looking seriously into, but in a very managed deliberate, intentional way.

The scope, therefore, in Europe is centered around 4 Czech Slovak, Romania, Bulgaria, Benelux and the Germany, Austria, Switzerland cluster or multi-market organization. And as we already said in the earlier question, the benefits are not only about cost savings, it's really also about taking, let's call it, distraction away so that country organizations can focus on customers and consumers. And that the rest, the parent -- the biggest one in the multi-market organization does a lot of the administrative work and that is what we are trying to do. So it has cost benefits but certainly also focused benefits.

Our next question comes from Celine Pannuti from JPMorgan.

First of all, I see a lot of changes that are happening in the organization. And clearly, on the EverGreen strategy. So I wanted to congratulate you, Dolf, on this. And obviously, wishing you a lot of luck for the future. My first question probably related to the EverGreen strategy where you said that top line growth is the core focus. In '25, you grew 1.6% organically. And I'm trying to understand how to unpack that for '26? You say -- I mean, obviously, price/mix accelerated into the quarter, although you seem to be saying that price/mix, you want to be a bit more careful about that. At least that was for Europe.

So if you could try help me understand how the price/mix should develop in '26 versus the '25 level? And in an environment where, obviously, you are quite cautious as well about our demand, do you think that aiming for flat volume in '26 is achievable for you? So that's my first question.

My second question is regarding profit delivery, the 2% to 6%, I think you made a comment about how this was really driven by EMEA. I would like to understand for '26 the balance of that by region? And as well, is there any balance we should think about H1, H2, given, I think, still some FX transaction in the first half of the year?

Thank you, Celine. Let me have a first go at it, and then I'm sure Harold has a thing or 2 to say on this. Let me start by the profit guidance of 2% to 6%. So we trimmed it a little bit and it's a combination of a couple of things. One is just to remain a bit prudent on the short-term expectations from the category. In different places, there's different drivers, affordability concerns or we have macroeconomic disruption still playing in parts of the footprint. Mid and long term, we remain confident explicitly so and that the category should sequentially improve to growth again. But in the short term, we rather err on the side of being a bit cautious on the category assumption.

Very importantly, another reason is that we really want to maintain flexibility to keep investing in growth in digitizing the business, et cetera. As I said earlier, very pleased that even in a challenging lean year like last year, we were able to increase our absolute marketing selling expenses, increasing marketing selling as a percentage of revenue by some basis points. And so that guidance is also really set with that intention in mind to remain flexibility to keep those investment level in place even if there's unforeseen turbulence. Harold, over to you on the question on pricing and revenue.

Yes. Of course, going forward, we're not going to comment on pricing, certainly not specifically market by market for obvious reasons, Celine, you know. But maybe it's good that we look back towards 2025, which makes me a bit more comfortable to speak about it. And I think what we're trying to signal is a bit consistency in our behavior. And therefore, you really need to look at the revenue per hectoliter growth region by region, where in Africa, we indeed continue to predict input cost inflation from foreign exchange and local inflation, and we will take pricing for that if and when and how we can, like we did in 2025.

In the other side, Vietnam is a good example of that, and Dolf alluded to that in the beginning. We see a very important opportunity to continue to manage the mix, because the growth of Heineken is a premiumization strategy, but in a 0.25 liter can. And that is an important component of the price mix that you see in Vietnam. And that is really what we are trying to do. To balance affordability, price-seeking consumer, but still going after premium because the consumer is prepared to go premium as long as it fits the pocket and the cash outlay like, for example, with 25 cl can. So revenue management is a very important part of our pricing strategy, not just pure pricing. And that's how we're trying to get this right market by market, region by region, and we will do in developed markets, particularly in Europe, be very cautious about the consumer environment not to overprice and really start paying attention to volume as well.

Any commentary on the balance of operating profit delivery?

Yes, between half 1 and half 2, well, you know that we're always aiming to be consistent and predictable, which the world would say the same. So I think we are trying to be very agile in approach to balance that out and give you line of sight, but it depends on factors and as Dolf already alluded to, we also have our investment strategy and are not here to manage quarter-by-quarter short term. We really are wanting to get this right for the long term as well. So we'll do our best, but cannot promise.

I think we're going to the last question.

Our last question is from Trevor Stirling from Bernstein.

You'll be relieved to know there's only one question. But firstly, let me reiterate what everyone else has said, Dolf, and in particular, I look forward to saying it in person over a cold one tomorrow. The question, Dolf, clearly, 1st of June 2020, a world a lot has happened in those intervening years. When you look back, what do you think is your biggest learnings here in terms of what's worked, what hasn't worked? Yes, just reflections on your time as CEO.

Thank you, Trevor. And certainly looking forward to a cold one, with all of you together tomorrow end of day, always a -- yes, a happy moment to look forward to. Yes, I actually just realized that today, it's February 11, and it was on February 11, 2020, that I was informed that I was going to be nominated as the next CEO of Heineken. And I was living in Singapore at that moment, and it all looked rosy. And I was really worried about how to step in the footsteps of Jean-Francois, given the incredible momentum, the role, the category, the business was happening. And little did we know that living in Singapore, it was just days or 1 or 2 weeks later that COVID erupted in Asia and then later in the world. And I took a plane on May 25, was a one-way plane with KLM and air stewards were wearing ski goggles because people still believe that the virus could penetrate your eyeball, it was just bizarre. And then starting in June 1 from home, sitting behind the screen, trying to figure out this team's thing and what have you, this Zoom thing. So it has been a bizarre period.

What I'm super proud of Trevor is that already before COVID, I felt that we had to pick up the pace of change in the company because the pace of change in the world was accelerating. And again, that pace of change in the world has capital accelerating time and again over the last 6 years. And EverGreen as we designed it with the executive team in the second half of 2020 was explicitly designed to future-proof the company in a fast-changing world. And we did that across different dimensions. It was future-proofing our footprint by exiting some markets and doubling down on high-growth markets with good fundamentals like India, South Africa and now more recently with FIFCO, it was doubling down on growth segments like premium beer, low and no beer and beyond beer with varying levels of success, some things moved more smoothly than other.

We always knew, and I remember speaking with some of you 6 years ago, that you said Heineken is fantastic and the brand and the culture, but you guys don't do cost productivity. And we very explicitly tried to change that. I am proud of the progress we have made, taking EUR 3.5 billion of cost out, and there's still more to do. And that's what EverGreen 2030 is all about. We were behind on digitizing the business, including the boring ERP part of it, and we're really advancing at pace, making considerable investments not just in money but also in organizational resources to make sure that our digital backbone is future-proofed. And we did it on sustainability and people, too.

All in all, proud of the progress, incredibly proud of the 87,000 people at Heineken. We lay the foundation, we were not done. More is needed. We are humble in that sense. And I hope you got that spirit and tone when we were together in Seville. And EverGreen 2030 is our sharpened clear expression of our ambition levels building on progress and learnings and at the same time, very clear in the priorities for the company. And as such, it was the toughest decision of my career, if not my life because I love this company dearly.

It is the right moment for me personally to take a professional and personal reset, but I do that with full confidence in the future of this beautiful company and that I'm leaving the company in very capable hands with Harold and the rest of the executive team and with a clear strategy. So thanks for that question, Trevor. And again, looking forward to expand if needed over a beer or otherwise when we see each other tomorrow end of day.

Thank you very much. We will see most of you tomorrow afternoon. Take care.

Thank you.

Thanks, everybody. Bye-bye.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.

Great. Good afternoon -- good morning, everyone, actually. Thank you for joining us for today's live webcast of our 2025 Q3 trading update. Your host will be Harold van den Broek, our Chief Financial Officer. Following the presentation, we will be happy to take your questions. .

The presentation includes forward-looking statements and expectations based on management's current views and involve known and unknown risks and uncertainties, and it is possible that the actual results may differ materially. For more information, please refer to the disclaimer on the first page of this presentation. I will now turn over the call to Harold. .

Thank you, Tristan, and welcome, everyone, indeed. Let me take a few minutes to give you a brief summary of the quarter and then open the line for your questions. Quarter 3 was a challenging quarter with macroeconomic volatility persisting, compounded by other cyclical factors dampening consumer sentiment and frankly, weighing on industry trends. In this environment, however, our advantaged geographical footprint helps us adapt as solid performances in Africa and Asia partially offset the Americas and Europe.

In this context, we were pleased we were able to gain market share in the substantial majority of our markets. During the quarter, we also announced the FIFCO transition in Central America, adding to a growth profile and earnings accretion upon completion in the first half of next year. And last week, as we stay firm on our evergreen strategy, we announced an acceleration in our digital journey, and the reshaping of our organization, including a change at the headquarters in Amsterdam, leading to substantial reductions of roles there.

Taking into account the challenging quarter and with high confidence in our EUR 0.5 billion gross savings target delivery for 2025, we now anticipate our full year organic operating profit (beia) growth to now be towards the lower end of our 4% to 8% guidance.

Let's take a look at our financial highlights for the quarter. Net revenue (beia) for quarter 3 came in at EUR 7.3 billion, a slight decrease of 0.3% organically with year-to-date positively growing 1.3%. Net revenue (beia) per hectoliter increased by 3.6%, led by pricing to mitigate inflationary pressures and by a positive mix effect from portfolio premiumization. Beer volume was down 4.3% organically for the quarter, with growth in Africa and Middle East, but declining volumes in Europe and the Americas.

Our premium beer volume was down 2.2%, with Brand Heineken down 0.6%. Though year-to-date, both are growing, further building the quality volume mix in our portfolio. Let's take a look at the moving components of net revenue (beia). Price/mix was up with 3.3%, led by pricing of 2.3% to mitigate inflationary pressure, as already said, and by a positive mix effect of 1% from portfolio premiumization, especially in Africa, Middle East and in Asia Pacific. Total consolidated volume on an organic basis was down 3.8%, performing ahead of beer due to the strong performance of our beyond beer brands in Africa, Middle East, such as Bedele and Savanna.

This resulted in an organic decrease for the quarter of EUR 23 million or 0.3%. Year-to-date, net revenue increased organically with EUR 295 million or 1.3%. The translation of foreign currencies had a negative effect of EUR 304 million or 4% mainly due to the strengthening of the euro against the Mexican peso, Ethiopian birr and Brazilian real. Consolidation changes were minimal this quarter.

Let me unpack the Heineken performance for a minute in the quarter and year-to-date. Heineken volume fell slightly by 0.6% as double-digit growth in 21 markets could not offset contraction in Brazil and in the U.S.A. as the overall beer market sell and distributors destock. Year-to-date, Heineken continues to be in growth. Heineken 0.0 declined by 1.8%, similarly related to the distributor destocking in Brazil and the U.S. Nevertheless, in the U.S., based on depletions, Heineken 0.0 grew for the 24th consecutive quarter in a row. And globally, Heineken Silver grew in the high 20s with continued strong performances in China and Vietnam.

Then on to our results by region, and let me start with Africa Middle East. We performed well there with all our key markets contributing. Net revenue (beia) grew 14.9% organically with price/mix on a constant geographic basis, up 13.6% driven by strong pricing across the region and positive mix. Beer volume increased organically by 2%, with strong performances throughout including Ethiopia, South Africa as well as smaller markets such as Namibia, Rwanda and Tunisia, more than offsetting contraction in Nigeria and the Democratic Republic of Congo. Throughout Africa, we delivered solid market share gains. In Nigeria, organic net revenue (beia) grew in the 30s with robust market share gains in an economically challenging environment.

Volume declined by a mid-single digit. Significant pricing and positive portfolio mix shift drove strong growth in revenue per hectoliter, both in local currency and in euro terms. Premium beer rose in the double digits, driven by regions; South, Desperados and Heineken.

Heineken Beverages are multi-category beverage business in East and Southern Africa, delivered another sequentially improved performance. Beer volume in South Africa increased by high single digits. Growth was broad-based with Amstel, Windhoek and Heineken in growth. Our cider and RTD portfolio also delivered solid growth led by Bernini, Savanna and the launch of the new Mainstay cocktail range. We are also pleased to see excellent performance in Heineken Beverages International, led by Namibia, Kenya and Tanzania.

Then over to Ethiopia where our organic net revenue (beia) grew by over 50%, driven by beer volume increasing by double digit and outperforming the market. Our leading mainstream brand, Harar, continues to be the growth engine, thanks to its distinctive iconography differentiated taste profile and continued regional expansion, cementing its position as a truly national brand.

Let's now move to the Americas. Net revenue (beia) declined 5.5% organically, and beer volume was down 7.4% and the region was disproportionately affected by subdued consumer sentiment and macroeconomic developments, including trade uncertainty, which we consider to be cyclical in nature. Despite the soft environment, we gained share in the vast majority of our markets across the region, especially in Brazil and Mexico. Price mix on a constant geographic basis was up 1.2%, led by pricing across the region and the continued premiumization of our portfolio.

In Mexico, revenues were broadly stable with beer volume down by low single digit as we gained share in a soft market with weak consumer sentiment. We delivered solid growth in Tecate Original and Dos Equis and also in premium where Miller High Life performed very well.

In Brazil, beer shipment volume contracted in the mid-teens, in part driven by the inventory buildup ahead of the price increase taken by the 1st of July. Beer shipment volume year-to-date is down by a mid-single digit. Based on the sell-out data, however, we gained significant market share in a market that declined by a high single digit for the quarter. Pricing increased by a low single digit. Heineken and Amstel declined in volume in quarter 3 but continued to gain share, while Eisenbahn delivered strong growth in the affordable premium segment.

In the United States, shipment volume was down in the mid-teens, reflecting distributor stock adjustments in a tough beer market that with disproportionate impact on core consumers of Heineken and Dos Equis. Heineken 0.0 depletions grew by low single digit and as I mentioned earlier, recorded its 24th consecutive quarter of uninterrupted growth.

Now on to Asia Pacific. Net revenue (beia) increased organically by 5.6% as price/mix on a constant geographical basis was up 5.9%. Beer volume declined by 0.8% as strong growth in Vietnam, Myanmar and Laos could only partially offset lower volume in India and Cambodia. In Cambodia, our business continues to be challenged in a fiercely competitive environment. Consolidated premium beer grew by a high single digit, led by Heineken -- led by Heineken Silver, I should say, Kingfisher Ultra Max and our stout portfolio.

In Vietnam, beer volume was up by high single digit ahead of the growing market. The Heineken brand grew nearly 40%, led by continued success of Heineken Silver. Our mainstream portfolio grew double digits with Larue Smooth performing strongly.

In India, beer volume fell by a mid-single digit, impacted by an unusually strong monsoon season, but we still outperformed the market. Price/mix expanded by a high single digit, supported by pricing in key states and portfolio mix with premium volume growing in the teens.

In China, Heineken Original, Heineken Silver and Amstel maintained strong momentum with licensed volume growing in the mid-20s and gaining market share, .Amstel, once again, doubled its volume this quarter.

And finally, a word on Europe. Net revenue (beia) declined 3.6% organically, while price/mix on a constant geographic basis increased 0.9%. Beer volume decreased organically by 4.7% and solid growth in the U.K., Ireland and Portugal was more than offset by declines elsewhere. Nevertheless, we saw favorable channel developments with the on-trade performing better in the quarter, though not in growth. In the U.K., beer volume increased by low single digits, outperforming the market. Positive price/mix was driven by pricing and portfolio shifts. Cruzcampo, our authentic Spanish lager from Seville continued its strong trajectory with volume growth exceeding 50%. Murphy's Stout continue to expand and in ciders, interest continue to reach growth trajectory.

In France, the Netherlands and Germany, volume recovery, however, was slower than anticipated following the conclusion of retail negotiations in the beginning of the quarter. It took longer to build back to normal distribution level, and we expect normalization in the near term and saw improvement as the quarter progressed. The Polish market continues to be weak. Last week, we also announced the intended closure of our Namyslów brewery as we continue to reshape our business.

In Austria, the impact of the recently introduced can deposit scheme continues to affect consumer demand. Spanish volumes were stable, and we saw strong performance in Portugal, growing beer volume by mid-single digit, led by Sagres while Birra Moretti and Murphy's Stout drove the volume growth and market share gains led in Ireland.

Let's now move to the outlook for the 2025 financial year. We anticipate ongoing macroeconomic volatility that may impact our consumers, including weak consumer sentiment, global inflationary pressures and currency devaluation in relation particularly to a stronger Europe. Our business continues to adapt with agility to these market conditions. Given the challenging quarter just behind us and based on our current assessment of short-term consumer demand, we expect volume to decline modestly for the year 2025. Taking stock of this volume outlook and our confidence in achieving our productivity target of EUR 500 million, we anticipate our full year organic operating profit (beia) growth to now be towards the lower end of our 4% to 8% guidance.

Now before we go into Q&A, just once again to summarize. Quarter 3 was a challenging quarter with macroeconomic volatility persisting compounded by other cyclical factors, dampening consumer sentiment and weighing on industry trends. We had solid performances in Africa and Asia, somewhat moderating the pressure we saw in the Americas and in Europe.

We were also able to gain market share in the substantial majority of our markets. We're very excited about the FIFCO transaction in Central America, adding to our growth profile and earnings accretion upon completion in the first half of next year. And we will continue to stay the course on our evergreen journey.

And as I just said, we anticipate our full year organic operating profit (beia) growth to now be towards the lower end of our 4% to 8% guidance. With that, I would like to open the line for Q&A. Thank you for listening.

[Operator Instructions] The first question is from Edward Mundy of Jefferies.

So the first question is really around the commentary within the -- that the macro volatility became more pronounced in the third quarter, which would suggest that the environment became trickier than you would have expected, yet you've still managed to deliver? Or you're still keeping your guidance range of 4% to 8%, albeit at the lower end of it. The question is really how has your approach to risk management evolved to identify those risks and adapt your plan in real time to still be able to deliver on your guidance range? And what are the things you've leaned on in particular to do that? It's the first question.

And then the second question, just on Brazil. You flagged that sellout trends were better than sell-in trends. I was just hoping to get a bit of a feel as to whether that shipment mismatch has washed through as at the end of the third quarter and as you go into Q4, sell-in should more broadly match sell-out. .

Thank you, Ed. Both really good questions. Indeed, the macroeconomics volatility that we really firmly believe is cyclical in nature, as we said, was more pronounced in quarter 3. And what you do see is that particularly in the Americas, for instance, you see the beer market was actually softening. And I already caution that if you can recall, in our first half results, where we specifically called out Brazil as early signs of consumer sentiment turning -- given the tariff uncertainty revolving around there.

And that really played out more pronounced than we had anticipated, but we did have it on our radar screen. So indeed, to your point, our risk management has definitely evolved, and we spoke about that as well for 2 reasons. First, our business is really starting to pay much more attention to macroeconomic indicators that may have an impact on, for example, funding of smaller businesses, overall consumer set, remittances. So those we see as really the leading indicators that we should factor in and base our risk management approach on.

The second thing is to really prepare for scenarios. And that is also the agility that we are often referring to that we're not only sticking to one fixed plan, but that we really have plan A, B and C, depending on these lead indicators. And I think that takes time. It takes practice. So by no means are we perfect, but that is certainly in the world of today, something that we're paying a lot of attention to.

Now then what are the implications and why we are confident to stay within our 4% to 8% range, albeit at the lower end, is we have consciously invested in the markets where we believe we see a turn of -- the tables turn. For example, we spoke hesitantly but still hopefully, about the market growth and our market share momentum in Vietnam and consciously invested last year and the beginning of this year to fuel that growth with a differentiated portfolio. You now see that momentum coming in, and that is one of those offsets that we were talking about.

In Ethiopia, to give another example, we really are very pleased with how the business is performing. And also there, we adapted to hyperinflation and our business really came out stronger is what we believe, and they're now repaying their debts as they would call it themselves. You also see the cost measures that we've taken in Nigeria, but also the continued progress in South Africa. We haven't taken shortcuts. And at this moment in time, these markets that I'm just calling out are able to rebalance somewhat the trickier times that we see in the Americas and to some extent, in Europe.

So that is really the portfolio management that we're aiming to do, and that's why we can, together, of course, with a very good grip on our cost performance agenda, able to stay within that range.

To your second question, the Brazil sell-in versus sell-out, I also recall that this was a key theme in our half 1 results, where we already flagged that we had to take one-off adjustment measures. The only thing, of course, that you will appreciate is you take a snapshot about what needs to happen in which channel and what level of stock adjustment we need to take. But if the market continues to go backwards, like we've seen in quarter 3 in Brazil, that impact still worked through in the quarter. And together with the pre-price increase stock up, that needed time to rebalance.

And to your question, yes, we believe that at the end of September, that is now fully balanced out, and we see healthy stock levels in as far as we see the market. We don't have 100% coverage, but we got a good coverage about the stock in trade that we see out there. So it should be normalized in quarter 4.

Thank you. The next question goes to Sanjeet Aujla of UBS.

A couple from me, please. Just firstly, on pricing, in the Americas, still seems to be quite low in the context of where I think at H1, you highlighted higher transactional FX headwinds in the region. So can you just give us a flavor of how you're pricing in Mexico and Brazil relative to the competitors and how those price increases are landing? That's my first question.

And my second question is just back on Europe. Can you give us a sense of how much of the Q3 decline is related to the slow recovery following the resolution of the customer disputes? And as we look forward, do you expect to fully recover or recover at least the vast majority of what you've lost in the first 3 quarters as a function of those disputes?

Yes. So look, we're really trying to manage pricing, of course, by getting the best balance between two. The first, what will we need to do for a healthy business. And indeed, to your point, foreign exchange has significantly moved year-on-year, and we do need to take that into account. And that's why we also took later, than our competitor this year, pricing in Brazil. But also the other reality is consumers and competitors. And therefore, we really are quite disciplined market by market to look at what is the right pricing and revenue margin growth strategy to not lose consumers and to not be outpriced versus competition because that would really have a significant impact on our market shares.

And as you saw, we are still very happy with our market share gains to date in both Mexico and Brazil. So we will continue to look at pricing. We've taken July in Brazil, and we are taking pricing in Mexico around quarter 4. But we do that in moderation because we also really look at the competitive environment. And if needed, we will compete for volume share accordingly. So we're going to pay close attention to make sure that we stay on the healthy side of that range. But we do expect a little bit of pricing also to come in the second half or in the remainder of the year.

Now on Europe, let me just be short there. Indeed, it was slower recovery, and it was basically driven by the fact that both market sentiment is relatively weak but also in those stores, we have to organize for shelf replenishment. It's not like an army of people were just waiting to vacate shelf positions and put our product back in stock. There were no empty shelves. We just had to renegotiate store by store and bring distribution back to expected levels. And frankly, that took a lot longer than I would have liked and I also would have expected.

So I'm not happy with how long that has taken. And I know that the team is really on top of this week by week. There are trackers in place at store and outlet level to see what can be done. We believe that this is really now behind us. We're at the last 5% to 10% of claiming back the distribution. And therefore, we expect certainly by the end of this year, if not sooner, that this situation is firmly behind us.

And sorry, just a quick follow-up. Do you think you can fully recover or at least recover the vast majority of what you've lost? Or is that a difficult thing to call out?

No, I think we have -- and as I said before, we have negotiated a full recovery, and we really are working hard to achieve that. And maybe just to give you a bit of a point of indication about the magnitude, about 1/3 of the volume loss in Europe in the quarter was related to this late restocking. The rest is mostly a combination of market share in some of the markets like Poland and general market softness.

The next question goes to Simon Hales of Citi.

So just a couple for me then. I mean, Harold, could you just delve a little bit deeper into perhaps the underlying market dynamics you're seeing in Brazil and Mexico as you've been through the quarter and come into Q4? I mean, in particular, what are you seeing around the state of the consumer? Any real changes in consumer offtake behavior that you're noting in the current environment?

And then my second question was around your comments around the improving on-premise performance in Europe that you noted. How broad-based was that? And could you talk a little bit about the performance of the U.K. business in that context?

Sure. So let's start with the underlying dynamics. It's a good and interesting question and actually one that makes me happy to talk about it because we really, really do firmly believe that what we currently see in the Americas is cyclical. And why do I say that? Because the beer fundamentals, for example, in Brazil remain very strong. There is continued population growth. There is income growth, although at this moment in time, uncertainty because of the tariffs and the high interest rate that we talked about last time.

But interestingly, what we do see is that the competitive environment is actually quite healthy in that sense. Both our main competitors and ourselves are really starting to continue accelerating the development of the beer category, driving premiumization, affordable premium. The up-trading in the market continues. And therefore, if you see the volume impact in the market, it really is economy variants that are continuing to lose.

So we believe that the dynamics, the underlying fundamentals of population income are there and that the category development is actually pretty healthy. We also have indications, but of course, this is not for me to comment further on, but that the Petrópolis competitor is really struggling somewhat. And therefore, the market dynamics as such are really conducive to further category development and therefore, shifting towards mainstream and premium. And this is exactly what we have been championing for so many years.

It's also important to realize that Heineken Brazil in aggregate continues to gain market share and that Amstel and Heineken continue to do so as well. So within a subdued market context in the quarter, we actually see a continued strengthening of our portfolio, now also with Eisenbahn as a third brand, early days, but coming into default. So I believe that actually what we see is a temporary adjustment of the market.

What [ Maurizio ] always tells me is that Brazil is a very fast market. It can go up and down relatively quickly because people are agile in how they adjust. So we're hoping that once the uncertainty is over, we actually see a continuation of the momentum in Brazil. In Mexico, I think all of this is also true, but at way lower levels. We believe that there is still a bit of a weaker consumer sentiment in Mexico. But also there, the beer category growth was a bit in decline, but way less pronounced.

And also here, we see healthy competitive dynamics between our main competitor and ourselves. And we see the early signs of premiumization also happening in that market. So overall, zooming out, we don't see any change to our strategy or to the potential in both markets, Simon, which for us is very important because otherwise, of course, that is a different adjustment that we need to take.

Now on to the U.K. U.K. was actually a very good performance for us. I don't have the -- numbers at hand, but you will have seen from the announcement that actually our growth in the U.K. was pretty good. Organic revenue growth grew by mid-single digit and beer volume was also up low single digits. Both were outperforming the market.

And Cruzcampo was again the champion in its field. Very strong trajectory, but we also saw, for example, Murphy's Stout and [ cider ] really starting to drive the further performance. On U.K. [indiscernible], I think we need to get back to you, Simon. Usually, I have that at hand, but I don't at the moment.

The next question comes to Gen Cross of BNP Paribas.

A couple of questions from me. So just first on COGS. Could you give us any early indication of kind of directionally what you think the outlook might be for variable cost per hectoliter in 2026 and particularly with respect to transactional FX, I think you might have had quite long hedges, particularly in Mexico. So any color there would be very helpful.

And then in Vietnam, I mean performance looks like it continues to be very strong. Just an update on what you're seeing in the market there. And just with respect to Q4, if we just add on, obviously, you've got a bit of a headwind from the later timing of Chinese New Year. Just any indication of how significant that might be for the quarter would be very helpful.

Gen, I really am not going to go into the forward-looking statement at this moment in time. It feels a bit, let's call it, childish not to do that because actually, on the Capital Markets Day tomorrow, I am going to do that. So hopefully, you can wait a day and look there in how we think about input cost outlook.

And currency hedges, I can give you a bit of an early indication on that. But look, usually, what we do, as you know, we're hedging about 12 to 18 months out. We indeed are trying to time it right. So we have taken a quite extended cover in Mexico at this moment in time. Brazil, a little bit less at this moment in time, but we're staying well within the policy range. And therefore, there is nothing really noteworthy to call out. And on commodities, I'm afraid, yes, tomorrow is the day.

Let me therefore go to Vietnam. So as we said, we are actually very pleased with our performance in Vietnam. Market shares continue to go up. You see the substitution of Tiger with Heineken that continues to accelerate 40% up this quarter, really fantastic how the team is adjusting its portfolio. Larue also now growing in mainstream. So the momentum, we feel is with us and very confident.

You're right to point out that, that will be into next year, and therefore, there will not be a pre-stocking sell-in of that this year, which will have a significant impact. The other thing to note is that, of course, the Decree 100 is now starting to comp. So we believe that Vietnam will be -- yes, seeing a lower growth rate simply because of the year-on-year comparison. But underlying and in terms of its momentum dynamics, we are feeling very good about Vietnam.

The next question goes to Olivier Nicolai of Goldman Sachs.

Just a follow-up, first of all, on Europe and your volumes performance. You mentioned the volumes impact from the retail negotiation. You also mentioned some share losses in countries like Poland. But how do you explain the general market softness? Is it cyclical? Is it macro driven? Or is it a bit more structural?

And then secondly, to stay on the topic of Europe, Heineken has invested in reusable packaging in many emerging markets. How do you think about this format in Europe in the context of the updated packaging regulation and how material it could be for your margins in the long run?

So let me first comment on the general performance in Europe. And I'm glad you asked the question because whilst we like to think about Europe as a certain homogeneous market, it is important to call out the differences between the markets. So the general softness that we see is not universally true in Europe.

We really see 2 markets that are quite pronounced. First, and it's a big one for us is Poland, where the beer category is down, well, mid- to high-single digit, let me call it like that. But we do see that this is general consumer sentiment because we also see similar levels of market decline in other categories, like, for example, in carbonated soft drinks, similar levels; water, even more pronounced than that, high-double digit. And of course, ice cream was terribly poor. We're just looking at it for a summer effect or something, but that was really terrible in Poland as well. So that does seem to be something with the Polish consumer. Don't really know why, but there is really a general weak economic sentiment there.

And on top of that, let me not hide behind that fact, we are losing market share. So that is something that we are not pleased about and the teams are working night and day to address that. So in a big market, that's a double dip for us, both consumer sentiment, but also share losses. The other point, which links a little bit to your packaging point is we really underestimated the consumer impact of the deposit return scheme on cans in Austria.

And as you know, Austria is also a very big market for us. And the proportionate impact was that can market is dropping like 30% to 40% in the initial stages and has not bounced back subsequently, even though the deposit scheme is relatively not a big amount of money. So those 2 very large markets really hurt the general category growth. But you also see opportunities.

We spoke earlier about a beautiful Spain, Portugal, U.K., where the general economic sentiment is a little bit more positive. And also in France, the category is in growth, but we are not for the reasons that we well articulated. So for us, Europe is really, yes, we try to make that one as much as we can to leverage scale and skill. But the consumer trends and consumer sentiment, the categories and portfolio have very different dynamics market by market.

So it's important to not generalize on that. And to your point, what is there for cyclical and structural, I think that really depends market by market. We are concerned somewhat about the impact that, for example, yes, deposit return schemes and just excise have because it just makes beer more expensive and that does weigh on consumer sentiment. And when affordability is a key concern across categories for markets, this is something that we, but also hopefully working together with governments should address because a healthy industry is good, not only for us, but for the wider employment that we generate in Europe as well.

To your second point about packaging, this is something that we always look into. But in the end, it starts with consumer preference and consumer choice. And what we currently see is that cans is actually a consumer-preferred format, and that's where we see where the growth is at this moment in time.

The next question goes to Andrea Pistacchi, Bank of America. Moving on to the next question from Trevor Stirling from Bernstein.

Harold, it might be a little bit too early, but if I look forward to 2025 margins and just extrapolating from your guidance of, let's say, low single-digit EBIT growth -- sorry, 4 percentage EBIT growth -- 4% to 5%, low single-digit revenue growth. You're looking at probably some modest margin expansion. But then on the other side, we've got the EUR 500 million gross savings, which is more like 170 bps of margin expansion. So where does the offset coming? Where is the pressure on the cost base that's stopping that -- more of that gross savings flowing to the bottom line? .

Yes. Indeed, Trevor, I think you're going to be delighted with my productivity presentation tomorrow if we're able to welcome you here to Seville because it's a very understandable question, Trevor. So first, let me just be quick, and therefore, we can talk about it more tomorrow, if necessary. But indeed, we are very cognizant of the fact that margin expansion is important to us. And certainly in the context of more currency volatility that needs to happen.

There are 2 factors driving the flow-through on gross savings. The first one is volume deleverage. And also what you hear us say is that volumes will be down this year, moderately so, but still. And that has an impact, of course, weighted market by market, but that can have a quite significant impact on how much gross savings you need to offset that.

The second thing and probably as importantly is that we continue to invest in our business. We really continue to support our brands. We put serious dollars behind our leading brands, but also the focus markets in our portfolio. And we continue to invest quite significantly about digitizing our business to make sure that we are ready to capture both on growth but also in terms of efficiency, the opportunities that, that offers.

So there is still an ongoing investment strategy in our business, hopefully, as much as possible, disciplined and rightsized, but those are the 2 important drivers about why you don't see a bigger flow-through. Now let me also be a bit upbeat about that. I'm super happy that we are confident enough to deliver these growth savings because it's a very important part of how we adjust to economic realities and still being able to sharpen our portfolio and future-proof this company.

Thank you very much, Harold. I look forward to more discussions tomorrow.

Thank you. We have no further questions. So I'll hand back to Tristan for any closing comments. .

Thank you, Nadia. Thank you, Harold. As a reminder, as Harold and Trevor just alluded to already, tomorrow, we will have our Capital Markets event here in Seville, Spain. We will also be sending out a press release tomorrow morning regarding the Capital Markets event at 7:00 a.m. Central European time. For those who are here, we will see you this evening and looking forward to it. For those who can't make it, please register on our website theheinekencompany.com, into the Investor tab for the CME that is starting at 9 a.m. Central European Time tomorrow. Looking forward to it. Thank you very much. .

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.