Sonya Ghobrial - Director, IR Jean-Francois van Boxmeer - CEO & Chairman of the Executive Board Rene Hooft Graafland - CFO & Member of the Executive Board

Andrea Pistacchi - Citigroup Trevor Stirling - Sanford Bernstein Edward Mundy - Nomura Carl Walton - BofA Merrill Lynch Javier Gonzalez Lastra - Berenberg Tristan van Strien - Deutsche Bank Karel Zoete - Rabo Bank Marco Gulpers - ING Simon Hales - Barclays Sanjeet Aujla - Credit Suisse

Good morning, everyone, and thank you for joining us today for our full-year 2014 results conference call. I'm joined by jean-Francois van Boxmeer, CEO and Chairman of the Executive Board; and Rene Hooft Graafland, CFO and Member of the Executive Board.

Following some prepared remarks, we will open the call for your questions. With that, I'd like to hand the call over to Jean-Francois.

Thank you, Sonya, and good morning, everyone. Let me start by saying that I'm very happy with our performance in 2014.

When I last spoke to you at the half-year results I said that we expected a healthy full-year performance, with balanced top and bottom line organic growth. And I believe that 2014 delivered exactly that, providing evidence and reassurance that our focus on higher brand investment, improved sales execution and increased innovation is working.

This is driving share gains in key markets across all regions. Group revenue grew 3.3%, with positive organic volume and revenue per hectoliter growth.

The Heineken brand volume in the premium segment was up a healthy 5.1% for the year, with growth across all regions and double-digit growth in a number of key markets. And on top of this, our portfolio strategy is working.

Our innovation rate of 7.7% generated impressive revenue of EUR1.5 billion, and a consolidated operating profit beia was up a healthy 8.7% organically. In 2014, we delivered 90 basis points consolidated operating profit beia margin expansion, and that is well ahead of our medium-term target of around 40-basis-points improvement year on year.

Finally, diluted EPS beia was up 11% despite an adverse combined consolidation and currency impact of 2.8%. Our proposed dividend for 2014 is 24% higher than last year, implying a payout ratio of 36%.

We have revised our dividend payout policy with a payout ratio now from 30% to 40%, from, previously, 30% to 35%. The increase in the upper end of this ratio reflects our confidence in the strength and ability of Heineken to deliver strong future cash flow.

It is important to highlight that the 2014 results were in the context of an increasingly volatile global backdrop. Turning to slide 4, across the business we saw healthy growth.

Beer volume in Africa/ Middle East grew 6.7% organically. Volume in the second half of the year was lower than in the first half, primarily reflecting a slowdown in Nigeria.

High growth of licensed volume in Cameroon contributed to half of the decline in the region's revenue per hectoliter. We had a capacity in a number of markets, including the DRC and Nigeria, as well as a new brewery in Ethiopia.

This leaves us well positioned to benefit when economic conditions improve in a region where growth fundamentals remain firmly intact. In Nigeria, volume was down in the low single digits in the second half of the year, in contrast to the high single-digit volume growth in the first half.

The value segment continues to outpace the beer market, and our growth, our volume growth was led mainly by our value brand portfolio. Cost savings supported strong profit growth in Nigeria and we gained share overall.

Our majority owned subsidiaries Nigerian Breweries and Consolidated Breweries are now operating as one combined entity, following shareholder approval at the end of 2014. In the Americas, beer volume was up 3.7% organically, with positive growth in Mexico, Brazil and the US.

In Mexico, we saw positive volume growth across all regions, driven by effective marketing, strong sales execution and activations. In the US, sales and depletions were up around 1%, continuing the outperformance against the overall US beer market.

Our Mexican brands continue to be the key drivers for growth, with both Dos Equis and Tecate Light, the volume up double digits. Encouragingly, quarter four, regular Heineken brand volume was up slightly, and the decline in Heineken Light volume reduced.

In Brazil, our performance was strong, benefiting from the football World Cup in the first half and strong brand trends throughout the year. The Heineken volume was up double digits, delivering market share gains in the premium segment in Brazil.

Turning to Asia Pacific, it was the only region to see volume growth higher in the second half of the year compared with the first half. Beer volume in the region for the full year increased 5% organically, with market share gains in Vietnam, India, Indonesia, Cambodia, and in the premium segment, in China.

Heineken volume, although positive overall for the region, was adversely impacted by lower volumes in Vietnam. Regional power brand, Tiger, delivered strong double-digit growth and was supported by the successful 'uncage' campaign.

Consolidate operating profit beia increased 5.4% organically in the region. In Central Eastern Europe, unfavorable weather strongly impacted volume in the second and third quarters.

Underlying trading conditions remained challenging in a number of key markets. Revenue per hectoliter improved 1.4% as a result of our strategy focus on driving value.

In Russia, the impact of the excise duty increase and restrictive legislation on strong beer, as well as soft consumer environment, led to volume down in the low double digits and lower market share. Poland remains particularly challenging, with continued adverse channel mix and sustained competition pricing pressure.

Organically, consolidate operating profit beia was down 4.5%. Excluding the EUR17 million gain last year from the sale of Pago in the region, consolidated operating profit would have been up 1.4% organically.

And I stress that for Central Europe. Finishing in Western Europe, our 'Not an Inch Back' strategy delivered positive results despite the difficult macroeconomic backdrop.

We achieved strong market share gains, and across the whole of Western Europe. Volumes in the first half were lifted by good weather and the football World Cup, as well as the bounce-back from the French excise duty increase in 2013.

Revenue per hectoliter was up 0.5% organically, driven by premiumization and innovation. This offset general deflationary pressures across most markets, as well as intense off-trade pricing pressure in some of our key markets, particularly France and the UK.

The region saw an organic 4.5% increase in operating profit beia. Slide 5 shows Heineken's exposure, which we believe gives us the right balance of stability from more mature developed markets and at the same time higher growth from more volatile, perhaps, developing markets.

Importantly, in 2014, both the developing and developed markets saw positive organic growth across Group beer volume, revenue and operating profit beia. In 2014, 63% of volume and just over 60% of Group operating profit beia came from developing markets.

Developing markets delivered 10% organic Group operating profit beia growth, with developed markets delivering 1.7% organic Group operating beia growth. Turning to slide 6, in 2014 the Heineken brand volume was up 5.1% organically and up 4.4% excluding the effect of destocking in France.

Importantly, growth was seen across all regions and the brand continued its positive long-term growth trend. The 20-year CAGR for Heineken premium volume is around 5%, not only growing ahead of the overall beer market, but also, importantly, ahead of the premium beer market.

Double-digit growth in 2014 for the brand was seen in Brazil, China, France, the UK and Mexico. We saw also strong growth in Spain, Taiwan, Thailand, Russia, Singapore and Germany, more than offset weaker volume in Vietnam and Greece.

As I mentioned earlier, the signs in the US on the improved Heineken performance, though still early days, are encouraging. The Heineken brand equity was supported by 'The City' campaign, innovation, social media and our strategic global sponsorships.

With an exciting pipeline for the brand in 2015, we are confident about the year ahead for the brand. The strength of the 2014 results would not have been possible without our portfolio strategy.

And our priority global brands, Affligem, Sol and desperados, all delivered double-digit volume growth in the full year. Our regional power brands, such as Tiger, Dos Equis, Tecate, all continued to deliver strong volumes too.

I'm also delighted to mention that at the recent Cannes Lions International Festival of Creativity, the Company won the prestigious 'Marketer or the Year' award for 2015. That is acknowledging the strength of our global brand marketing platform and we are very proud of it.

Turning to slide 7, the innovation remains a source of competitive advantage and sustainable -- and a sustainable contributor to our profitability. Within this context, 2014 was an excellent year.

Our innovation rate increased to 7.7%, our highest rate ever, improved on last year and ahead of the 6% long-term target that we have been communicating. And this contributed to EUR1.5 billion of revenues and delivering an impressive 40% CAGR from 2010.

One of our key innovations, Radler, is now present in 41 markets, up from 31 last year, across all five of our regions. It is directly addressing the emerging theme of moderation and creating new drinking occasions for our brands.

Its success has ensured that we are market share leaders in this growing category. We also successfully piloted MAXX, M A X X, our alcohol-free beer, in five markets.

We are innovating with new pack types, with a few examples shown on this slide, namely the 50-centiliter Primus in the DRC and the 1.2-liter Dos Equis pack sizes, as just -- as examples. Brand extensions are another important lever for innovations, with Kaiser Radler having been seen as a very successful launch in Brazil, Malta Gold in Nigeria, and a number of other examples shown on the slide.

Improving the quality of the draft offer, we introduced The Sub, our new at-home draught beer system, across four markets in 2014, incorporating a unique range of our brands and providing access to a new, important and exciting route to market via ecommerce. To date, all signs are positive and we will roll out The Sub into new markets in 2015.

Additionally, our global priority brands are also showing strong growth, boosted by rollout into new markets, as I previously indicated. Slide 8.

With the half-year results, we announced that we had delivered EUR637 million of cumulative cost savings, ahead of our targeted EUR625 million, as part of the TCM 2 cost-savings program. This was also delivered ahead of schedule.

Our cost-savings journey of course continues, from starting with 'Fit 2 Fight', continuing with TCM, and further savings incorporated in the medium-term margin guidance. This slide shows just a few examples of some of the areas we're focusing on within the business, namely further right-sizing of the organization, continued efforts to improve productivity, and leveraging Heineken's global skill through procurement and best practices.

This focus on cost is one of the components driving improved operating profitability and margins. At the half year, we have -- we gave guidance of the year-on-year improvement in consolidated operating profit beia margins of around 40 basis points in the medium term.

We exceeded this in 2014 with a 90-basis-points margin expansion, continuing the positive trend we have seen since 2011. Looking forward, top-line growth will be underpinned by continued volume growth from developing markets, such as Asia Pacific, Latin America and Africa and the Middle East.

Revenue management, through premiumization, innovation and commercial assertiveness, will support growth in developed markets. Turning to the 2015 outlook now, on slide 10, we expect continued challenging external environments.

However, despite this, we continue to expect to deliver further organic revenue and profit growth. We expect positive organic revenue growth, with volume growth more moderate than 2014 perhaps, and weighted towards the second half of the year.

We plan to slightly increase our marketing and selling spend as a percentage of revenue versus 2014. This reflects continued higher planned commercial investments focused on innovation, investment in driving the premium growth and outlet execution.

As you can hear, we are consistent. Input costs in 2015 are expected to be slightly lower, excluding the effect of currency transactional movements.

We continue to target a year-on-year improvement in consolidated operating profit beia margin of around 40 basis points in the medium term. However, in 2015, this will be adversely impacted by the sale of Empaque, the Mexican packaging business, which will dilute these margins by 25 basis points.

And we will partially, but not fully, offset this impact, such that the margin improvement this year will be below the medium-term level. With that, I would like to hand over to Rene, who will take you through the 2014 financials in more detail.

Okay. Thank you, Jean.

Good morning, everybody. Slide 12.

As Jean-Francois already said earlier in the call, we previously guided to a healthy growth in revenues and profit for 2014. And this slide shows that we have delivered on this promise.

As expected, growth was stronger in the first half and slightly moderated in the second part of the year. Positive volume momentum and strong commercial execution led to full-year Group revenue per hectoliter growth of 1.4%.

Combined with organic total volume growth of 1.9%, this generated Group revenue growth of 3.3%. In addition, strong premium brand growth and an intense focus on cost savings led to consolidated operating profit margin expansion of 90 basis points.

On top of this, lower interest costs supported a 14% organic increase in net profit beia and an diluted EPS of EUR3.05. EPS was up EUR0.30 on last year, even after including a EUR0.06 adverse currency impact.

Free operating cash flow ended the year up by 3.7%, at EUR1.6 billion, with the net-debt-to-EBITDA ratio improving at 2.5 times, from 2.6 times last year. The sale of Empaque was not completed by year end and therefore these proceeds will be seen in 2015 when the deal completes.

Slide 13 shows the year-on-year movement in revenue. On an organic basis, Group revenue grew by 3.3%.

Consolidated revenue increased by 0.3% to EUR19,257 million, after a negative net consolidation impact of EUR213 million. And that is largely attributable to the sale of the Hartwall business in Finland.

Unfavorable translational foreign currency movements reduced consolidated revenues by EUR350 million, primarily reflecting the strengthening of the euro against local currencies, such as the Mexican peso, the kina from Papua New Guinea, and the Indonesian rupiah. Organically, consolidate revenue increased by 3%, and this was underpinned by a 1.8% volume growth and a revenue per hectoliter up by 1.2%, largely driven by price and mix.

Group operating profit was up 7.8% organically. Consolidated operating profit increased organically by 8.7%, driven by higher revenues, lower input costs per hectoliter, and cost savings, which largely offset the cumulative negative effect of consolidations and currencies, which was at 2.3%.

Input costs declined by 0.2% on a per-hectoliter basis, in part benefiting from centralized purchasing. Marketing and selling expenses were up slightly as a percentage of revenues, at 12.7%.

And the increase was largely driven by the focused brand investment in Western Europe and the Americas, which translated in better market shares across key markets within those regions. And additionally, we saw the benefit of our TCM 2 program, completing ahead of schedule.

On a regional basis, the Americas and Africa combined contributed over two-thirds of the total operating profit increase, with both posting high single to low double-digit growth on the prior year. All regions delivered flat or increased operating margins, driven by volume growth, coupled with revenue management and cost management.

Slide 15, you see net profit in the year increased by 11% to EUR1.758 billion. The double-digit organic performance growth was only partly offset by a negative consolidation impact, again Hartwall, and by adverse foreign currency movements.

Both factors reduced full-year EPS by EUR0.08. In 2014, we increased capital expenditure in key developing markets.

Our CapEx-to-sales ratio increased to 7.8%, with over 60% of the total spend directed to developing markets. Examples of key programs completed during 2014 include the new brewery in Ethiopia, a soft-drink plant in Indonesia, as well as capacity extensions in the DRC, Burundi, Rwanda, Vietnam, China, Cambodia and Haiti.

Heineken is also investing in greenfields in the promising markets of Myanmar and East Timor. Our cash flow generation benefited again in 2014 from tight management of working capital.

In 2014, the contribution from working capital to the free operating cash flow was EUR27 million, on top of the already EUR400 million achieved since 2010. At the same time, we continue to have a healthy balance sheet, with a sound cash flow generation.

Our net debt/EBITDA decreased from 2.6 times in 2013 to 2.5 in 2014. And our long-term target for net debt/EBITDA remains at the ratio below 2.5 times.

During 2014, currency rates were volatile, with an adverse effect impact on the -- of the full year of EUR49 million at operating profit level and EUR32 million at net profit level. Notably, the adverse translational impact was much more pronounced in the first half, compared with a positive impact in the second part of the year.

Key currencies that contributed to the total full-year movements include the Mexican peso, the Papua New Guinean kina, the Indonesia rupiah, the Russian ruble and the South African rand. For 2015, assuming, so assuming spot rate as of February 6, the positive effect at the operating profit would be approximately EUR130 million, and EUR80 million at net profit.

So that is an theoretical calculation based on the spot rate of February 6. But as current foreign currency rates are very volatile, we will update you if there are any significant changes to this guidance with the half-year results.

And lastly, a few more guidance comments. For 2015, we expect CapEx to be approximately EUR1.6 billion.

We expect a stable average interest rate, at 3.7%, and an effective tax rate broadly in line with 2014. This takes me -- takes us to my final slide.

In summary, 2014 was a strong year, with improved top-line and profit performance. We gained share in most of our key markets, benefiting from past investments in improving commercial firepower, successful and cool marketing campaigns and strong innovations.

The Heineken brand delivered consistent growth, and a number of our global priority brands were up double digit. We also witnesses strong performances by a number of local champions, such as Tecate, Dos Equis, Tiger, Kaiser and Kingfisher.

Our cost savings programs -- program delivered in full and ahead of target. This, combined with the operational leverage, drove our consolidated operating profit margin up by 90 basis points.

And last but not least, we continue to make progress on our 'Brewing a Better World' agenda, underlying the firm belief that this is an essential pillar underpinning future long-term growth. We entered 2015 with the strong belief that we have compelling platforms to support further sustainable top- and bottom-line growth and margin expansion.

On that note, Jean-Francois and I would be happy to take your questions, so, Operator, could you open the line for the Q&A, please?

Yes. Good morning.

I have two questions, please, on Nigeria and on Russia. So Nigeria's slowed a bit in the second half.

Given the macro and political uncertainty, how do you expect 2015 to pan out? And if you could talk a bit about the pricing environment.

You said that mix is negative in Nigeria. That is -- are there signs that the pricing environment is improving?

Have you been able to put through price increases this autumn? And then on Russia, if I may, Russia continues to be a drag on the business, clearly.

The outlook remains tough for the foreseeable future. So in this context, what is the medium-term strategy?

Is it -- is market share important at all in Russia or will the focus be more and more on the Heineken brand? Thanks.

Nigeria, the political situation I think -- if I may say that what is more important for Nigeria is the oil price. This is what will have an influence on the markets on the foreseeable time, and it will have an impact.

We don't know what, but we have to remain cautious in saying it will have an impact. Now, when we look back in what happened in Nigeria over the last 10 years and 20 years, we have had these shocks already and we know we can weather these shocks.

There are contingencies in the Company to weather the shocks for a number of months or even years. We just simply don't know.

Now, bear in mind one thing. We are market leader and we are a strong company.

We have just -- we are integrated consolidated and Nigerian breweries, which gives us a leeway ahead of making productivity improvements across the board. You alluded also to the brand portfolio in Nigeria.

Now, it is true that the -- what we call the value brands have been taking the lead in the growth. Overall, that should not be necessarily a problem because if we can grow at lower price points, but at the same time we can deliver productivity improvements, the equation works fine.

And you see also that we have not only perhaps for this year very moderate volume growth in Nigeria, but we still have also a profit growth. That means that the equation for us works.

It is a little bit the same story we have in Vietnam. Some markets are a bit rebasing into pricing.

Even the new price levels in Nigeria remain very healthy for the medium and long term. So -- and the last point I can make on Nigeria is to say we have to look through some turbulence on the short term.

Add to that the political uncertainty, elections have been postponed to March 28, so we will continue to live with some uncertainty. But the medium- and long-term outlook for Nigeria, for us, remains strong because we have seen that our business has been growing on the backdrop of developing middle classes in large urban areas.

That still works. It's an economy which is less oil dependent.

So for the long term, based on its population reservoir, its strong-growing middle class, the fact that it has entrepreneurs which are active also outside oil in Nigeria, long term, we maintain a positive outlook on Nigeria. Now, your second question was about Russia.

Yes. Obviously Russia is not heading in a better place.

The longer-term outlook is more subdued because you don't have the population growth in Russia. The good news is that, despite that this market has already lost at least 25% of its volumes over the last few years due to tax hikes; there is an appetite for premium products.

And so your question was about our strategy. We are not the market leader in Russia, unlike Nigeria.

We -- our portfolio is more geared towards, and we will gear our portfolio more and more towards the higher end of the market, with premium brands, not only Heineken, which despite that the market went down, our Heineken brand went up in Russia, as well as other brands, like Krusovice, other premium brands that we bring to the market and will continue to bring to the market. The last point I can make on Russia is we are not highly dependent on Russia.

Despite that the volumes went down quite a bit last year, we had better operating profits because we have been restructuring our business. The Russian business is extraordinarily resilient, and it's a tribute also to the -- our Russian colleagues that cope with that very harsh reality.

And we see them every time there is bad news. Every time they pick it up and every time they restructure the business and to keep it in the positive operating profit zone.

So I am conscious that the outlook on Russia is not bright, but the strategy of continuing focusing on the premium end and the flexibility and resilience that our business unit over there is showing, makes me stay confident in -- for Russia. The last point on Russia and you know that, we have been of course writing off all the goodwill of the balance sheet over the last few years, so we are just carrying active assets on the ground over there.

Good morning, Jean-Francois. Morning, Rene.

Two related question for me. If you look back a year ago, Jean-Francois, and you're sitting now today, which markets have surprised you on the upside and which markets have maybe been slightly disappointing over the course of 2014?

I like your question, Trevor. I think the market which surprised me the most positive was Liechtenstein.

No, I'm joking. I am joking.

If you want an honest answer, in the light of macroeconomics, I think Nigeria continued to perform strongly. That was a positive, though a-little-bit-expected surprise.

One can say that Egypt is exceptionally resilient despite everything which is said about it. Negative surprises, they come in the course of the year, where you have macro or geopolitical incidents that you didn't count on.

I would say that Russia has been that surprise because the events that happened in -- between Russia and Ukraine have been hurting us, but they haven't been hurting the whole industry. Vietnam also has been a very good surprise for us, very resilient.

Mexico has been doing fantastically well, though we planned for that. Brazil also.

There's a lot of talks about slowing down in Brazil, and our business has been exceptionally resilient in Brazil. And our Heineken brand has been really star performing in Brazil.

But even a brand like Kaiser, which is a regional bottom-of-the-line mainstream brand, performed quite well. A line extension with Radler was a fantastic success in Brazil.

So we have good things that work better than you expect, and that is some things work a little bit lower, but I would say that, on average, we have more positive surprises than negative surprises. And frankly, the negative surprises are always linked to geopolitical stuff that flies over you and which you cannot resist.

And I always say you have to surf the wave; you cannot break it.

Morning, everyone. Three questions, if I may, first of all on use of cash.

In the absence of major transformational moves, could you talk through how you assessed the potential buyback of the [indiscernible] stake in May compared to, say, bolt-on moves or tidying up your associate JV business? Secondly, just to follow up on Africa again.

The revenue-per-hectoliter contraction you saw in 2014, is this fully in the base and are you confident that revenue per hectoliter into 2015 can move positively? And thirdly, on alcohol-free beer, Rene, I think in your interview this morning you flagged that alcohol-free products are increasingly important.

I know you've launched MAXX into five markets. How quickly can you scale up with MAXX?

And in those markets where it has been rolled out, are you seeing any cannibalization of the Radler's product?

Okay. First of all, the cash, yes, that you have seen is we are back to the territory where we want to be with the net debt/EBITDA at 2.5 times.

We have increased the dividend and our dividend policy, relating to that, but also signifying the confidence we have in the future. What we have always said, with the divestment of Empaque, that that would enlarge our financial flexibility going forward.

And obviously I cannot elaborate on what we will do with these kind of things or what our ideas about business development are going forward. Obviously we cannot comment on that.

When you look at revenue per hectoliter in Africa, clearly in 2014 that was down, partly to -- for half of it, as we explained earlier, has been driven by the strong growth of the license volume in Cameroon, where you just have the license fee in your revenues. So that plus the mix -- dilution in Nigeria, where markets like the DRC plays on the revenue per hectoliter.

The interesting thing is that when you look at the operating margins in Africa, they are going up strongly. So it is a rebasing of price segments in the market, as Jean explained in the Nigerian story.

But when you combine that with -- first of all that is still at very attractive price levels -- and when you combine that with strong cost focus you see that the margins improve. Now going forward you were asking about revenue per hectoliter.

It's clearly that we cycle a different year in 2015. I think the growth of the more-affordable segments in Africa will continue to outgrow the total market.

So that will have an effect, but not as pronounced as you will have seen in 2014. And then the last on the MAXX and the alcohol-free Radlers, yes we see that there is more and more attraction behind alcohol-free products.

Can you scale that up more rapidly? It's very much a matter of consumers, innovation; it's not just pushing; it is finding the right consumer response.

And there you see different reactions to alcohol-free propositions in different countries and geographies but, overall, we see that moderation is a big theme under consumers and the alcohol-free portfolio is clearly playing an important role there.

And is there any cannibalization between MAXX and Radlers, or are they very distinct?

The interesting thing is that you see that the lower-alcohol products take very much soft-drink occasions. And so where -- and normally people would go for water, juice or a soft drink, now the Radlers really alcohol-free beers is a realistic alternative.

And even an alternative -- a more adult-focused alternative, and so we are expanding the market with that and there is limited cannibalization.

Morning everyone, just a couple of follow ups really -- one on Nigeria. So obviously we had slightly negative volumes in the second half.

Are we right to think that -- what you've said clearly about being long-term positioned and not knowing about the turbulence in the near term, nonetheless Nigeria being quite a profitable market for you? And with the market looking reasonably softer this year than maybe -- you might have expected, especially given the political environment in the very near term.

Is that also a contribution to -- a little bit more caution on the margin performance in 2015, after a strong 2014? Or is purely the Empaque margin headwind?

And then just secondly, on use of capital, in November you commented that a key priority for you would be M&A and -- in a consolidatory environment, which we expect to continue for the brewers 2015, that is a priority for the balance sheet. Is that still the case, especially after you've made the adjustment to the dividend?

Many thanks.

Nigeria?

Yes, Rene wants me to do Nigeria.

And you want to do the use of capital?

No -- either way -- it's -- I don't think we will disagree on that. The -- yes -- no, again I said under the previous question on -- I rank the lower oil prices as a structural factor that we have to cope with in Nigeria, more than the political instability.

I'm more confident about the political stability of Nigeria going forward. The last 20 years have been proving that Nigeria and its political system has been improving, and I maintain that confidence.

It is a vibrant -- not flawless -- but a vibrant and strong democracy in Africa; lots of people, also lots of responsible people. Let's not forget that.

Nigeria is a strong country in Africa and certainly a lead country in Africa. It sets the tone for a lot of things that happen in Africa, so I would say that on a political side I'm confident.

That's one. The oil prices and what foreign effect that will have on the market, that seems to be -- that remains to be seen.

And again I'm saying that by having a market share like we have in Nigeria, and the brand portfolio, possibilities of further productivity improvements, and the fact that still Nigeria is low in the consumption per capita in beer, makes the medium and long term we remain just bullish on Nigeria. That is what we are saying.

Now, the slowing down of our margin expansion is not driven by Nigeria. It is -- the slowing down is driven by the 25% base -- sorry, 25-basis-points' dampening on our operating profit, of Empaque, and that we clearly indicate.

And underline we remain committed on an improvement of 40 basis points [indiscernible] and then for the rest. No, what the currencies will do in 2015, they will have an influence but tell me if you know what is going to happen.

So I think that is the guidance we can give. Operationally we are committed to continue with that guidance and, again, it is not Nigeria that will on its own dent these possibilities that we have to improve our margins.

For the use of capital, I turn to Rene, although I'm dying to answer it [multiple speakers].

No, I don't know where you are referring to that we said acquisitions is a priority. I think what we always say -- the beer industry is consolidating and is probably not fully at the end of the consolidation.

And we have been and we will be an active player in that. Having said that, we are, with our capital structure, back where we want to be; net debt/EBITDA at the right level, and that allows us to increase the dividend, also in view of the confidence we have in the future, and the fact that more and more investors in today's world, where you don't get money at the bank, are valuing the dividend payout and the dividend yield very much, hence adjustment of our dividend policy.

Yes, good morning. Thanks for taking my question.

You've disclosed that innovation revenue increased to EUR1.5 billion. I wonder if you could give us an indication of what has been the cost of achieving that incremental -- or that increase in revenue, or an indication of the incremental returns on this increased revenue.

So I guess the question is whether the incremental returns from this innovation revenue are higher than the rest -- than for the rest of the business, and by how much. And secondly, also on innovation, you are guiding for a further increase in marketing investment in 2015, despite your innovation rate running ahead of your 2020 target.

Should we then assume that this innovation rate will continue to stay about target for one or two years? Thanks.

Two different questions -- on the innovation return, it's a very good question; it's exactly what we look at. Innovations are mean to be accretive, both in revenue and in margin.

When you launch an innovation you never know; some work, some don't. It is about the discipline to focus on the ones which are working in the right way, and discarding those which have no future.

So having an innovation policy, it's not just for the sake of having that extra revenue; you have also to make a return on that revenue. Now in the majority of our countries we try to go with innovation in the premium-end of the market, i.e.

also accretive on the margins. In a number of markets limited innovations can be the opposite around, like Nigeria or like, let's say, Ethiopia.

When you launch a mainstream product, then it will be, if you will -- that innovation will be clearly but also willingly dilutive to your margin because of the total volume. In percentage you will -- but on your total volume you returns will increase.

So -- but we certainly have that discipline to look and track our innovations and I can tell you I do that even myself, chairing the Innovation Committee. And we spend always time in reviewing how are they doing, because we have to keep the innovations working for us.

Otherwise they could work against you. That is certainly not the intention.

The second question was related to our marketing spend. That is not only geared towards innovations; the total marketing and sales support spend, where we say we will slightly increase it.

Because we have seen over the last few years that fueling marketing campaigns, sponsorships, innovations, a bit of commercial assertiveness as we call it, it is bringing us to gain market share. It works positively for us.

Of course in the emerging markets, where you have I would say organic market growth, but also in mature or declining markets like we see most of the time in Western Europe, and in Central Europe, where such a policy of upping your game in marketing and innovation, and their commercial execution, is in effect yielding better results, and at the end better margins, which we guide on.

Right that any more-specific indication as to how much more -- or how much higher those returns from those EUR1.5 billion is relative to the rest of the business have been.

I'm afraid -- I'm afraid this is quite competitive.

Okay, I understand, thank you.

And this is also different for different elements, so you -- as Jean was saying, not all have the same overall. It must be value-accretive, but for instance if you look at our cider adverts outside the UK, but in new markets, you have to invest up front to make that work.

And other innovations pay off much quicker; it's a mixed bag. And the overall has to work, that's what you have to look at.

Okay, thank you. One very-last question, a quick one I promise.

Do you -- you've got the merger of the two entities in Nigeria, and just wonder whether you could give us some early indications of what would be the benefits from any synergies that may come up front that exercise.

No, we haven't disclosed a figure, but what you can imagine is first of all you get aligned portfolios, so you are better operator in the market. You have an integrated footprint, which you can certainly geographically throughout the country optimize.

And obviously instead of having two support organizations, you have one. So there are clearly benefits.

The main driver to put the two companies together is the changed commercial environment in the country, and where we believe that combining the two portfolios makes us a more effective company in that market.

Good morning Jean-Francois, Rene. A bit more color on a few markets please.

The first one is Poland. Revenues are down about 11%/12%, but the profit is down about 50%, so if you could highlight what some of the issues are in that market that was driving that big EBIT decline.

And then the second bit is on Mexico; what's happening there in terms of competitive environment. And you took some pricing, has that had a positive or for that matter a negative impact?

And then lastly -- sorry, again on Nigeria -- civil servants' salaries were not being paid really in Q4 -- I think there were like three to seven months of delays. But some other companies outside your sector are now saying they are being paid in January.

Are you seeing that at the moment; any more color on that if possible?

The situation in Poland. The Polish situation structurally, this is a market which matured in its per-capita consumption; it has no demographic expansion.

Remind you that a lot of young adults in Poland emigrated to the UK and Ireland and the US. And after a spurt of growth -- I worked myself in the mid-90s in Poland -- those were the hay days of Poland where people converted their consumption of vodka into beer.

After that fantastic period of growth, ranging from the early 90s to 2007/2008 -- 2007/2008 -- this has been a little bit of turning point. You have one, two, three players, which are competing heavily with each other in a declining market, and also a change of commercial environment, whereby all the traditional individual, single mom-and-pop shops were replaced by chains of small retailers, like Biedronka, Eurocash cash and carries became bigger.

So you -- the environment -- commercial environment in Poland changed dramatically over the last decade, concentrate the purchasing power, the buying power in the hands of a few clients, and it went very fast. And I think that all the sector has been confronted to that, which is declining demand, shifting power in the market.

And that has led to a profit pool that has been shrunk for all players. Add to that specific competitive dynamics, where some actors who were smaller wanted to gain share at the detriment of pricing.

And you end up in a total different situation a decade later than where you started. So that is something structural and, again in Poland for us, it has been -- what is at stake is to re-base our business for a new reality.

We have been doing that in many other European operations. It is a mix of re-basing, i.e.

productivity restructuring, and they can be quite heavy, of your operations, combined with still an assertive commercial policy, an innovation policy, and efforts geared to building strong brands. Now the good news in Poland is we have a number of strong brands, and these strong brands, which are priority brands like the Zywiec brand itself, which gives its name to the group, has been posting market-share increase over the last year 2014.

So that is sustained by good investment behind the brand, but also a lot of investment behind the Zywiec brand, which is a specialty beer developed around the long-brewing tradition of the brand. And you see that that is paying off, so it is a long-term story in the context of a market that has been changing really dramatically.

We have been re-basing and are re-basing our cost structure on the one hand -- cost structure on the one hand, and on the other hand we are pursuing an innovation and marketing commercial policy, which bring us further. Mexico is clearly a very good performer.

We -- it is strong -- Mexico is one of our strongest operations. It is our largest operation; it has been performing well on the market.

The Carta Light brand is really on fire, growing high single digit. The Heineken brand is growing well; the Dos Equis brand is not only growing in the US, but also growing in the United States -- sorry, in Mexico.

Yes -- we don't give these numbers. No -- you would like me to give all the numbers, but no -- and so we have been growing practically all our brands quite strongly, so increasing our market share.

Further that we are continuing with a program of gaining into productivity, and so it is delivering ahead of the original business plan. So we are very happy about Mexico.

And then again your question about Nigeria -- I -- there's so many questions, I don't know what to add to Nigeria.

No.

I guess my question --

You wanted -- if we see effect of other brands --

Oh yes, yes.

Except we saw a slowdown, slight negative second half. And in January we haven't seen a change in that front.

Sorry, just a follow up on Poland -- the margin decline of about 250 bps roughly in that market over the last year. Just the components of that -- is that a channel mix, is that more investment needed, or is it just purely deleveraging that you are seeing?

No, it's a combination, but it is very much -- channel mix plays an important role, also some packaging mix, and then the pricing environment given the competition at the lower end of the market.

And so the growth of our top end of the portfolio -- Desperados, Heineken, Zywiec -- is not making up for that.

Great, thank you very much guys.

Not yet exactly, yes.

Not yet.

Yes, good morning, thanks for taking my questions. First one is a follow up on pricing.

Americas looked pretty strong in H2, can you provide some more color what -- where you have taken pricing in the Americas, and also maybe in the US? The second one would be on cider.

Despite some activations, innovations there, cider did not grow very well in 2014. How should we look at 2015, and why did it not grow?

And the last one would be on Indonesia. There seems to be some restrictions coming up with regard to point of sales; any color on that would be helpful, thank you.

First of all pricing in the Americas, in the US we try to increase prices, but national prices are not happening anymore in the Americas. It's much more selective, state by state, brand by brand, package by package.

But we work actively on revenue management there. And in Mexico we have a price increase and the pricing is -- well I would say healthy in Mexico.

Maybe last -- the second market you asked was?

The cider product.

Yes, cider -- it's a mixed bag, you are right to point out. The total is what it is.

Some markets are really performing well, like the US that is on fire. The market is on fire, but also Strongbow brand, which we are promoting heavily -- or promoting -- pushing, and introducing in the US, is going really very well.

On the other side, we have some [indiscernible].

Headwinds?

No -- yes, headwinds in South Africa, as an example, where we clearly struggle. And so it's a mixed bag.

We are introducing cider in a lot of new markets, so it is -- in the beginning -- the first years of an introduction in a new market they fly really pretty under the radar screen. So what you see today is pretty much the British market, there's US and South Africa.

They are the bulk of our volumes. And then we have an array of what I call seeding markets, where we are doing good job but it is seeding also for the next decade.

So one has to realize that there is a lot going on perhaps below the radar screen, but it is important for cider to take a long view if you will. So therefore we are confident and also bullish on cider in the long term.

On the short term it's what it is; it's not our best year in accomplished volume, but we are encouraged with what's happening in the US. And we are also encouraged to see our share development and the development of our innovations in the UK.

Okay, thank you.

And then your last question was on Indonesia, the ban on sales in the minimarkets. That is a proposal which is not yet approved and we don't know if it will be approved.

The background is obviously in a country like Indonesia, where alcohol is very sensitive, the Government is very strict on making sure that the consumption is responsible. Well that is exactly what we are promoting as well, and we are in close contact with the Government to see how we can address their concerns, because we don't believe that just a general ban of sales in minimarkets will address the issue in the right way.

But we have to see what will happen with the legislation.

Yes, good morning. I've got three questions.

The first is on the GBS costs. You expensed about EUR160 million in 2014.

Now that the TCM2 program has officially ended what will those costs become basically going forward? Second question is on the Western-European on-trade development.

At your seminar in November, I believe it was, you reflected on an improving trend in Western Europe in the on-trade. What are you seeing at the moment and what do you expect for 2015?

And the last question is on streaming of cash, basically to the holding. I have a technical question on this.

What is the maximum that you are allowed to hold in Treasury shares in the holding? Is that now beyond 10%?

Thank you.

Let me first take the GBS thing. The EUR160 million was not in 2014, but is the cumulative amount since we started the program.

So the program is a bit over EUR200 million, of which I think EUR43 million out of my head was capitalized and EUR160 million was taken as operational expenses. But that is for the whole period when we started up the program in 2011, to halfway 2011 up to 2014.

And, as said, the startup costs or the building costs have been -- are now behind us. Obviously we are expanding the scope; we go deeper into processes; bring them more into Krakow, but that is not so much creating big investments in the system part around it, but obviously the changed management cost will be still there.

But that will be at a lower level than we have had in the startup phase.

The on-trade market, it's a very, very complex question, because the on-trade market is a very city-to-city approach. So you cannot single -- not even single out one country in making a good reply on what is your outlook.

We live here in the Netherlands. Now one of the most vibrant on-trade markets in the Netherlands is Amsterdam; the City where we live.

They have a healthy growth rate; you see new outlets popping up every month and you have -- you go in other cities in the Netherlands, and I will not name it, and you will be in the negative territories. So it's a very city-by-city approach and our commercial policy is geared to go where the growth is and enhance the growth.

That is -- that's basically what we are doing. And we try also to be innovative in the offering in the on-trade, not only by having and proposing new draught beer systems, but also a lot of new varieties of brands and line extensions and products.

So it is really -- there is so much you can do to buy a point of sale, and contracting a point of sale. But you also have to generate high revenue in every point of sale, so it's a combination of both, being reactively assertive in acquiring point of sales, and this is a guerilla tactic; it's outlet by outlet in the cities you target.

And it is also improving the business of these outlets and then, with that, you will improve your own business. And therefore giving outlooks on that is -- it's nothing that you can model.

But there is a lot of emphasis put at The Heineken in -- on the on-trade, because traditionally we have always been over-weighted in on-trade in many countries. And we have developed quite a bit of I would say proficiency in how to drive that.

Therefore, it will remain a key component of our policy in Western Europe. And I turn to Rene for the technical question about Heineken Holding.

Yes, you were right; 10% is the max.

Oh thank you, good morning Jean-Francois, good morning Rene. Just a couple of brief questions if I can.

If I can just return back to trading into the yearend, and sorry to go back to Nigeria, but can you just -- tell us what the exit volume run rate was in that market? Clearly in the second half it was down, low single digit.

Did it worsen through Q4; give us a feel for where we were at the end of the period. And then also, just looking across to Asia Pacific, I noted the Q4 volumes slowed -- sharply on the nine-month trend.

Was there anything particular that drove that? And then a separate question, just on the COGS outlook.

Clearly you indicated organically we should expect some slight decline COGS costs this year. When we try to model it from a reported standpoint, I think about FX, what proportion of your COGS are now US-dollar denominated, please Rene.

First of all [indiscernible] in Nigeria, where we said second half slightly down, and that was moving -- coming from the growth of Q4 was low single digit, what we have said. Asia Pacific is -- the slowdown in Q4 is the three weeks later of that, the Chinese New Year, where you had a lot of loading last year for that already in Q4, and not -- and that is mainly Vietnam, which plays an important role.

Our guidance on -- was not on COGS, but on input cost, where we say that will be slightly lower on a per-hectoliter basis. I can't give you the detail, which currencies it will consist, and this guidance is without the currency impact.

Hi guys, just a clarification on the margin outlook. Are you saying that, if we exclude Empaque, you still expect to grow margins by 40 basis points in 2015?

And also perhaps, outside of Nigeria, can you just highlight where you see most of the volume moderation occurring in 2015? Thanks.

Sorry -- on the margin what we say is that we obviously stick to our margin guidance that Empaque has a 250-basis-point dilutive effect, which we will partly but not fully compensate. So actually underlying we do a bit better than the 40 basis points.

Okay.

And the Nigeria -- what was again?

Sorry, outside of Nigeria where do you see the most volume moderations occurring in 2015?

Yes, the biggest volume impact probably again will be Russia. The impact on us will be moderate as we are a smaller player there.

And as Jean earlier said, last year we had a big volume impact in Russia, but profitability increased. So we will manage that in the best possible way.

And just a follow up on Asia, since you've acquired that business clearly you've been re-shaping the portfolio, which has constrained your net revenue per hectoliter and margins. How far away in the process are you now in re-shaping that portfolio?

Is there still more to do? Is there still -- constraints on margins and revenue per hectoliter, in 2015 and beyond?

No, I don't think. We came -- Asia Pacific came from a region which has been dominated by the Heineken brand, so by the highest price point.

As we go, and since we have been taking full control of APB, and we have been re-positioning the Tiger brand, we see the Tiger brand as a very valuable proposition of being above mainstream, but below Heineken. And we have an enormous success with that, noticeably in Vietnam.

So overall that reshaping of the portfolio is taking place. Now Vietnam is obviously the biggest part of it at this moment in time, but you can imagine that we can replicate that doing it also in China.

And so it works quite well for us. It is a -- really a mix -- portfolio mix, but we will continue in Asia, to try to stay at the higher end.

So our policy is not to go in the value segments massively. I would say that if you look at the world of Heineken, we would be over-indexing premium practically everywhere where we operate, except Central and Eastern Europe.

This is the only region in the -- I would say the post-Soviet area, because this is not technically Greece and Austria are in Central Europe. And there we also index -- over index -- above index 100 in the market, if you will.

So only Central Europe which will be the exception to that. But clearly for Asia it's a policy of re-balancing the portfolio, unleashing growth in market segments where we are not operating with Heineken, but still with an eye on the higher-than-100 index, if you want.

And I think that that is -- particularly in Southeast Asia, where we are -- most of their market leaders, that is where it yields interest. Now it is obviously a different story in India, but for the former APB footprint that is the policy we are pursuing with success.

Well thank you all for joining us this morning, and that you Operator for having arranged this call. In summary, we have delivered strong revenue and profit growth in 2014.

Focus -- and I repeat that -- is on higher brand investments, improved sales execution very important, and an increased innovations. And that continues and will continue to drive share gains in key markets across the globe for us.

So -- and although we expect to continue challenging external environments, we also expect to deliver further organic top-line and profit growth in 2015. Now, if you have any questions, you are welcome to contact our Investor Relations for any other queries.

Now, with that I wish you a very good day and thank you for having attending our call. Bye-bye now.