Good morning, everyone. Thank you for joining us for our 2020 Half Year Results conference call.

Today's call will be hosted by Dolf van den Brink, our CEO; and Laurence Debroux, our CFO. Following the presentation on our results, we will be happy to take your questions.

Some of the information provided during today's call contains statements of future expectations and other forward-looking statements. These expectations are based on management's current views and involve known and unknown risks and uncertainty.

It is possible that the actual results may differ materially from those expressed in the forward-looking statement. With that, I would like to hand the call over to Dolf.

Thank you, Federico, and welcome, everyone. Today is my first time speaking to us the new CEO of Heineken.

And on behalf of all of us at Heineken, I truly hope you and your families are all well and safe. Following in the footsteps of Jean-François, I would like to start by paying tribute to him.

Jean-François has made countless contributions during his 15 years as our CEO, making Heineken proud and independent brewer it is today. He's not only an incredible leader, but also a very special person.

I want to thank him for his many contributions and personally, for his support, especially, over the transition. I feel humbled and honored to have assumed this responsibility.

It feels like yesterday that I started at Heineken as a commercial management trainee, here in the Netherlands. In these 22 years, Heineken took me and my family, on an incredible journey all over the world, living and working in all four of our regions.

I've enjoyed working in all those different places and these experiences have shaped me into the person and the leader I am today. I'm now very happy to have returned home.

My new role started in the midst of a crisis, unlike any other we have faced in our lifetimes. Having witnessed this pandemic and its effects from the very start in Asia, it's clear to me how much our lives and livelihoods are being impacted.

Our first priority has been and continues to be the health and safety of all our people, our families and our communities. I'm so proud and impressed by how all at Heineken have taken care of each other, and of our customers, suppliers and local communities and we all adapted to new ways of working.

We have supported local communities and frontline medical facilities with donations worth €23 million, including water, non-alcoholic beverages and hand sanitizer. Throughout, our Heineken values have been our guiding stars like never before.

We know that for Heineken to do well, our communities and the environment around us need to do well too. And that's why supporting our customers is and will remain one of our key focus areas.

In this Slide, you see just a small selection of the right range of initiatives to support our customers. We provide advice and tools to safely reopen, helping them set up home delivery and online businesses and in some cases, providing some financial support, for instance, by waiving rental payments, where lease agreements are involved.

In more than 20 markets, our Back to the Bars initiatives helped more than 50,000 outlets, with 300,000 vouchers, raising over €10 million. These can be redeemed when the bars open again and the owners received the monetary value immediately to enable them to continue paying their fixed costs.

We are proud to have been able to provide this support. However, it is essential that we don't get lost in just managing the crisis and make sure we also built a future and sustain our growth in a fast-changing world going forward.

We're not underestimating the pandemic's impacts and are mindful of the material effect it's having on our business. No one knows how long this pandemic will last, nor how large the impact will be.

But we're a Heineken and in our [155] year history, we’ve weathered countless storms. And in moments of profound change in the world, we often have had the courage to act as pioneers.

I believe as such, our best times are still ahead of us. With our entrepreneurial spirits, once again, we can and will be pioneers, continuing our long success story.

So today, we would like to do two things, we would like to cover our half year results and explain how we are navigating the crisis. Throughout the presentations, Laurence and I will be reflecting on our three key focus areas, as highlighted on this slide: focus on people safety, focus on consumers and customers, and focus on costs.

I will come back later to explain what we are doing to build the future. Now let's first go for our results for the first six months of the year.

Our markets and businesses were materially impacted by the COVID pandemic. Our top line performance suffered as multiple countries took far reaching measures to mitigate the spread of the virus.

Beer volume declined organically 11.5%. The low point was definitely in April.

Since then, we have seen week-by-week improvements across the majority of our markets, although a slow recovery. June was a strong month, but no reference to use for the coming months, as it was flattered by customers rebuilding inventories after the lock downs.

Situation is still very volatile and in recent weeks, we have seen renewed bans on the sale of alcohol in South Africa and in some states in Mexico and a resurgence of the pandemic in several countries. However, in this very volatile world, the Heineken brand again demonstrated its strength and declined by only 2.5%.

I will come back to talk more about this good performance. Net revenue per hectolitre was down 3.6%, organically, due to adverse channel mix, most acute in Europe, and negative product mix effect as consumers shifted to larger packaging formats.

Our operating profit (beia) declined organically 52.5%, so more than three times our net revenue, organic decline of 16.4%. This deleveraging effect was mainly caused by the decline in your on-trades in Europe.

We took action in March and initiated a number of cost mitigating initiatives that drove a net reduction of €0.5 billion. Laurence will go for all these in more detail later.

Net profit (beia) declined organically by 75.8%, leading to a diluted EPS (beia) result of €0.39. And we also booked €548 million of impairments mostly in emerging markets as exceptional items.

I will start a brief review of the performance of each of the regions and I'll start with Africa, Middle East, and Eastern Europe or AMEE, as we call it. This region was the last to be affected by the COVID-19.

Many markets introduced containment measures. As a result, beer volumes declined by nearly 15.9% with the largest impact in South Africa.

Our operations were entirely suspended in April and May and after resuming in June, the new ban on alcohol sales was implemented since mid-July. In the first half, Heineken 0.0 grew strongly, placing South Africa just behind the U.S.

and Mexico, in driving the global growth of the brand expansion. Nigeria implemented a ban on the distribution of alcohol in some states.

However, we outperformed the market and beer volumes declined in the low-teens. Maltina, our non-alcoholic malt drink, was broadly stable as we continue to produce and sell our non-alcoholic portfolio.

In Ethiopia, our volumes declined in the low-20s, as we have reflected in our prices, the steep increase in excise duties of mid-February. Across 12 markets including Nigeria, our premium portfolio also continued to grow.

In Ethiopia, the growth came from Bedele Special, our local premium brands and in the Ivory Coast, from brand Heineken, as we started local production last year. For the region, net revenue declined organically by 16.6%, and operating profit by 61.7%, with the largest impacts coming from South Africa.

Moving on to the Americas. In March, the pandemic started to affect our operations resulting in overall organic decline in beer volume of 15%.

Our operations in Mexico were suspended in April and May and we resumed sales in June when our customers began rebuilding inventories. In July, unfortunately, we observed an increase in market restrictions including alcohol sales bans in some states on-trade restrictions, A few bright spots.

Heineken 0.0, introduced only last year, is already one of the main growth drivers globally for the brand expansion. And on the e-commerce front, impressive growth of our Six 2 Go, home delivery operations.

But I will come back to that later. In Brazil, consumers continue to show strong demand for our premium and mainstream portfolios, which grew double digits, led by the growth of close to 50% of brand Heineken, and the continued momentum of Amstel.

During the quarter, we reached our highest market share ever and we are particularly pleased that our strategy to rebalance the portfolio is working and our value shares now ahead of our volume share. In the U.S., brand Heineken had a good relative performance, boosted by the growth of Heineken 0.0., while the Mexican portfolio was affected by supply chain constraints.

Net revenue declined 12.2% organically, with price mix up 5.2% on the constant geographic basis, driven by the low-teens growth in Brazil. Operating profit (beia) declined 31% organically mainly from the impact in Mexico and higher costs in Brazil.

Onto Asia Pacific, where the pandemic started early in the first quarter, impacting our beer volume relatively modestly, with a decline of 4.7% organically. In Vietnam, there was a steady reopening of the on-trade during the second quarter.

Our volume grew significantly ahead of the market, driven by our mainstream brands and innovations to expand our total portfolio, like Heineken Silver, Strongbow, and most recently Heineken 0.0, and Bia Viet. In many of our countries and most notably in Cambodia and Indonesia, lower exports and the absence of tourism had a significant impact on the economies.

Consumer income and confidence were under pressure which resulted in significant volume losses and downgrading. We continue to make progress outside of our core markets in the region.

For example, the Heineken brand became the number one brand in the premium segment in South Korea. For the region, net revenue declined 10.4% organically, operating profit (beia) decreased 15.7%, showing the lowest operational deleverage effect across our, regions due to the strong performance of Vietnam.

And finally moving to Europe, where the pandemic curves stabilized across the continent at the end of the semester. For the first half year, beer volume declined organically by 8.1%.

On-trade outlets, which represents 35% of the beer volumes were closed for several months in most countries and as a consequence, our on-trade volume declined by about 50%, which more than offsets the mid-teens growth in the off-trade. Our strong position in on-trade and our vertical integration into wholesale and pubs is a long-term competitive advantage.

But there's no doubt that this year it is a drag on our performance. Given the demand shock induced by COVID, a segment with structurally higher variable profits, but also higher fixed cost, causes a disproportionate negative deleveraging effect.

These businesses allow us to be close to our consumers and customers, which will serve us well during the recovery. Just to illustrate, towards the end of July, 85% of our own estate of 2500 pubs in the UK had reopened, within four weeks of the bans being lifted.

In contrast, we observed only 51% of licensed pubs to have reopened. More broadly across the region, we see that close to 90% of our on-trade customers have reopened, however demands remain subdued, as social distancing restrictions continue to limit their capacity to serve.

The off-trade performed strongly, as consumers adapted and our brands continue to do well, with market share gains across a majority of our key markets, including the UK, France, Italy and the Netherlands. And premiumization is still there, outperforming in this channel across the region.

For example, we had an excellent performance, a strong growth in Desperados, Affligem, Birra Moretti, and Ichnusa. All-in-all, net revenue declined 20.8% for the region with a negative price mix of 6.4% on a constant geographic basis due to the channel and product mix effect.

Operating profits was down by 87% organically due to the big operational deleveraging effect from the closure of the on-trade. Now, the Heineken brands performed strongly, given the circumstances.

Excluding South Africa, the brands would have been in positive territory. Consumers are turning towards brands they trust.

So it's a good thing that as measured by Canter, the Heineken brand stands as the most trusted international beer brand in the world. Brand Heineken is clearly outperforming the category and in fact, we observed stable or growing share in over 80% of our key markets.

The brand even grew double digits in 14 markets, including Brazil, China, UK, Poland, Germany, Ivory Coast and South Korea. Regarding China in particular, we successfully started our partnership with CRB.

They completed the integration ahead of schedule and have accelerated the performance of the brands with double digit growth quarter-over-quarter. Heineken 0.0, grew double digits with growth across all regions and particular strength in the U.S., Mexico and South Africa.

The latest line expansion of the brands, Heineken Silver is performing ahead of expectations in Vietnam and was introduced in China. In April, nearly all events linked to our global sponsorship platforms were paused in the first half but they're starting up again in the second half.

Now, let me come back to comment further on e-commerce. Consumers and customers have embraced e-commerce since the start of the crisis.

And we have been able to leverage this momentum and be more connected to them through our platforms across many countries. As consumers have created new consumption locations at home, our direct-to-consumer platforms across 17 countries benefited and saw significant accelerations during the lock downs.

For example, Beerwulf, our online platform in Europe, saw 3.3 million visitors of which half was new, and compared to last year, so more than double of our home-draught systems like the Sub and Blade. Consumers are also more cautious and not willing or unable to go to the shops, resulting in a significant spike for in-home delivery with the hour.

For example, Six 2 Go in Mexico received 10 times the number of orders in the last six months versus the full year of 2019. Regarding our customers, we currently have digital B2B platforms operational in 24 markets, which is seven more since we last updated you, connecting more than 60,000 customers in traditional channels and representing more than €1 billion of our revenues last year.

We have accelerated their growth and expect to more than double the number of customers connected this year. These platforms have proven to be very effective to engage with customers during the lock downs, helping increase frequency and size of orders.

Overall, we are encouraged by these results and are firmly committed to continue and where appropriate, accelerate our investments behind these B2C and B2B platforms. And with this, I would like to hand over to Laurence.

Over to you.

Thank you, Dolf and good morning to all. So let's now go to Slide 13, for the financial overview of the first half year.

Starting with a net revenue (beia) of €9.2 billion which shows an organic decline of 16.4%, volume is down 13.4% and revenue per hectoliter (beia) is down 3.6% organically. Now on a constant geographic basis, you have seen the underlying negative price mix is 1.3% and that is essentially attributable to channel decline in Europe.

Operating profit (beia) declined 52.5%. I will provide more context of the deleveraging effect and cost mitigation in the following slide.

Net profit dropped to €227 million, an organic decline of 75.8%. The decline of net profit is from lockdowns than the decline in operating profit.

What you find between those two lines is a number of items that accelerate the decrease and in particular, extra interest expenses from additional net debt. And on tax, the effect of higher operational losses for which no deferred tax asset can be recognized, as well as higher non-deductible interest in the Netherlands.

Diluted EPS (beia) ended at €0.39, decreasing in line with net profit (beia). The impact of [EIA] to exceptional items and amortization of acquisition related intangibles amounted to €742 million.

The amount relating to amortization of intangibles is €144 million, pretty much in line with last year. And the rest which constitutes the bulk of the difference versus last year is primarily coming from impairments and write off of fixed assets.

We have considered COVID-19 as a potential trigger to review the carrying value of fixed assets in all our operating companies and out of that we have identified €3 billion that needed to be actually tested, resulting in a total impairment and write off of €548 million. The impairments themselves were in developing markets where the cost of capital tends to be much higher, and therefore, a decline in cash flow in the first few years caused significant drops in the overall value based on discounted future cash flow.

For example, the largest impairment was in Papua New Guinea, where COVID-19 has drastically impacted the economy and where large liquid natural gas projects are now unlikely to materialize soon. As a result of this impairment, we recorded a net loss of €297 million for the half year.

Free operating cash flow was a negative €809 million, was a decrease versus last year coming mainly from the lower profits, combined with less favorable change in working capital. I will come back to that.

And finally, our net debt-to-EBITDA ratio, which is 3.5 times on a 12-month pro-forma basis, important to say here that we remain committed to our long-term objective of 2.5 times or below in the coming years. Moving now to Slide 14.

Consolidation changes had a negative impact of 0.5% or €55 million on net revenue. Here, a negative effect coming from the divestments of our own activities in China was partially offset by the positive effects from acquisition, primarily Namysłów in Poland.

Currencies had a negative translational impact, decreasing net revenue by 2.3% or €265 million. This was mainly attributable to the Brazilian Real and the Mexican Peso.

On an organic basis, our top line declined €1.9 billion and the largest individual declines in beer volume came from Mexico, South Africa, so two countries affected complete lockdown, and Spain, a country where the share of on-trade is particularly important. That's for the volume component.

Now, the revenue per hectoliter declined 3.6% and the underlying price mix on the constant geographic base is 1.3. Again, Europe contributed more than 100% of the decrease as the most affected channels on-trade, wholesale and pubs have a much higher revenue per hectoliter.

If you look at APAC, the negative price mix effect after adjusting for the country mix is due to the faster growth of our mainstream portfolio in Vietnam and significant downtrading in countries impacted by the loss of export and tourism. In the Americas, the price mix was positive, most notably in Brazil, growth in the teens from higher prices as well as a positive portfolio mix and particularly the strong growth of Heineken.

And finally in AMEE, the price mix was also positive coming from pricing in Ethiopia and the DRC and more premium in the mix in middle. In Nigeria.

Let's now look at Slide 15 and the development of the operating profit (beia), starting with consolidation changes and currency translation which together had a small negative impact of €20 million. Actually, for this half year consolidation changes were €37 million, mainly from the divestment of China and with small acquisition in Ecuador, and currency had a small positive translational impact of 1% or €70 million.

Moving to the organic decline of 52.5%, or €935 million, 84% of that decline came from Europe, Mexico and South Africa. In Europe, our strong position in on-trade and our vertical integration into wholesale and pub, created a material deleveraging effect.

With such a brutal shocking demand, it is really a double whammy from vertical integration. You lose volume with relatively higher gross profit per hectoliter and you keep your higher fixed cost base.

So what usually makes our #[inaudible] turn into a short term drag. And in Mexico and South Africa, we had an operation suspended in April and May, as you know.

Digging a little more into expenses, first, I will start with input costs which grew about 10% per hectoliter. Input costs are significantly impacted by the channel and product mix, as we sold more one-way bottles and cans, which have in average much higher cost per hectoliter than the returnable packaging SKUs that we sell in the on-trade.

Typically the takes was the draught beer, for instance. Negative transactional currency effects were significant on some of our markets like Brazil, but in aggregate, that did not impact as much as the mix.

All the negatives here came from inventory write-offs from products collected back from customers, and onerous contracts which had volume commitments for raw and packaging material. Looking now about our other costs.

Fair to say, that up to March, they had been higher than last year. During March, we implemented cost mitigation measures that resulted for the half year, in a net organic reduction of about €0.5 billion.

Marketing and sales (beia) expenses represented 11.1% of net revenue (beia) so around 60 basis point below last year. Here we adapted our commercial activities to the fast changes in consumer behaviors and consumption patterns.

For instance, as on-trade outlets were mostly closed, we could save on visibility and point of sale materials and on promotion. Regarding personal costs, while respecting our commitment to no restructuring layoffs in 2020, we have reduced by close to €150 million organically.

That includes among other, hiring freeze, less over time, cancellation of bonuses for the year and €35 million of government support, mainly in a few European countries. And then we have cut all kinds of discretionary spend, starting, of course with travel, conferences and the like.

That's for the addressable spent. Worth mentioning, that at the same time, we have had higher depreciation and amortization.

That's not related to COVID but to past investments. And more related to COVID, we took higher provision for credit losses and there were extra costs related to safety and protection equipment, which we don't consider as EIAs.

Moving now to diluted EPS (beia), on Slide 16, €0.39 cents per share and down 78.6% in line with the net profit decrease. We have a negative impact of €0.08 from consolidation changes, mainly the divestments of China and a small positive currency translation.

The EPS organic declines was €1.39. In addition to the decline in operating profit, I would again mention here, increased interest expenses and the higher effective tax rate, since we have operational losses for which no deferred tax asset can be recognized and higher non-deductible interest in the Netherlands.

And both these effects, by the way, are amplified by the decrease in the rate of profit before tax. Finally, the sale of Heineken shares to our Chinese partners CRE, resulting in a small residual dilution of €0.01.

Let's finally go to cash flow on Slide 17. We had a cash outflow of €809 million in the first half here.

Looking at the €1.4 billion decrease versus last year, the main driver was a lower cash flow from operation. Change in working capital also played a role, mainly coming from payables.

Normally, we'll end the half year with higher payables due to seasonality, which is favorable. However, this time we had a sharp decrease in goods and services received during the lockdowns while we still needed to pay for those received previously.

In the second half, markets reopen, the comparison should become more favorable. This development in payables was partially offset by relative stability in receivables in line with lower revenue than last year.

Cash out from CapEx reached over €1 billion largely due to projects executed in 2019 and paid for in the first month of this year. Looking into the addition to our purchase plant and equipment in the first half of 2020, they were €484 million, so 36% lower than last year, and we suspended pretty much all CapEx not related to immediate business continuity or safety, starting mid-March.

The main project that we are still investing in, at the moment, are the completion of the expansion of Sedibeng in South Africa, and the expansion of Ponta Grossa in Brazil, and Vung Tau in Vietnam. As a company, we have secured and we maintain an ample buffer of liquidity.

In the first half, we issued about €3 billion bond with tranches ranging from five to as long as 20 years, at an average coupon of 1.75%. As of June 30, after deducting commercial paper and short-term bank borrowings at central level, we had approximately €4.5 billion in immediately available financing headroom.

And finally, on the outlook for the full year. Last April, we withdrew all guidance for 2020, given the lack of visibility on the end date of the pandemic and the duration of its impact.

We have observed the gradual recovery across most market but the situation, as you know, continues to be very volatile and uncertain. So we are only able to explain directionally what we see or expect but we cannot provide you with estimates.

We expect channel and product to continue to adversely impact our results, especially in Europe, as the on-trade keeps operating at reduced capacity. And as a consequence, input costs per hectoliter are expected also for the full year to be significantly higher than last year.

Strict cost mitigation actions will continue and there we will balance the reduction of discretionary expenses with providing sufficient support behind our brands and route-to-market. Non-committed supply chain CapEx will continue to be mostly suspended, while commercial CapEx will resume selectively, following the needs of the market.

And we will continue to update you with the intents to provide enhanced clarity and transparency in this very special year. With that, I would like to hand back to Dolf.

Okay, many thanks Laurence. Now, normally at this point, I understand we would have moved to the Q&A.

But I wanted to come back to that first Slide and share some thoughts how, apart from navigating the crisis, we will build the future. Whilst the world around us continues to change, and we remain agile in our response to the fast-evolving crisis, we have embarked on a journey, together with the executive team to chart our next growth chapter.

Over the last two months, I started by actively engaging and listening to a wide range of internal and external stakeholders. And we'll continue to do so.

It’s clear there is consensus on our key strength, that we need to continue building on and that diversifies global footprint with exposure to many high growth markets. A portfolio of great brands led by the unequaled Heineken brand, our entrepreneurial operating model with closeness and high adaptability to local markets, opportunities, and a highly dedicated and talented workforce.

But at the same time, there are also areas that we need to improve on. Today, for example, we are reaping rewards of investments behind our brands and consumers made years or even decades ago.

To remain a superior growth company in the long term, we will need to step up, once again, our consumer and customer centricity, aiming to pioneer and create new brands and new propositions, targeting unmet consumer needs. Secondly, we have a unique company culture with high levels of passion and engagement that we can operate with more speed and more agile ways, leveraging best practices much faster across the company.

And lastly, we can and have to sharpen our cost mindset. Building on the efforts of the last quarter, we will intensify our focus in this area and become a more nimble company in order to make sure we can continue to invest big behind our brands and consumer and customer needs.

Moving forward, and as markets recover, we will leverage these unique strengths, as well as address both opportunities and challenges to chart our next growth chapter. I'm very pleased to have a strong executive team with me on this journey, bringing a good balance of experience and fresh perspective.

We will introduce the team and our plans for the future in due course. Now, I know it's a bit unusual but I would really like to use this opportunity before going into the Q&A to show you two recent apps that Heineken has launched over last few weeks.

At Heineken really like to be great brewers and great marketers, we love connecting with and staying close to our consumers in a unique and meaningful way. And this is especially true during these challenging times.

First, we will show Ode to Close, which is a campaign that reflects our deep acknowledgement that we really are in this together. And secondly, as looked down to start easing, going back to the bars is a long-awaited moment.

And we want to support this channel to remain open and have launched a campaign called SocialiseResponsibly, to remind all our consumers to reflect the new rules. Because after all, there's only one thing better than a night out and that's another night out.

Right after that the floor will be yours for questions. Let's roll the video.

[Video Presentation].

Good morning Dolf and Laurence. There is three questions from me, please.

First one is, what do you think Dolf was the biggest negative surprise, over the last three months? And second, what was the biggest positive surprise you saw?

And the third thing is, you've talked a little bit about your priorities moving forward, which I guess was part of the journey Heineken was on, anyway. Are there any areas where you think you need to step up real intensity in terms of the changed agenda, as you move forward?

Very good. Thanks, Trevor and good morning.

I wouldn't say, per se, a negative surprise, but I would call it something we are concerned about. And that's of course, the impact the crisis is having on the on-trade channel and on-trade channel being about 35 to 40% of our business that has some material impact.

And you have seen and I think we have shared the numbers. For example, in Europe on-trade is down 50%.

As a consequence, going forwards, we do expect a gradual recovery, but it will be very much two steps forward, one step backwards, as we're seeing renewed flares of the crisis, renewed constraints in the off-trade -- in the on-trade across a couple of markets. But yeah, I would also like to emphasize what we are particularly proud of.

And I can't tell you how proud of I am of our people scattered across the globe into the most far flung places. We have people who are leading our organizations are working in our organizations in over 80 operating companies.

And the way people have adapted and the way people are taken care of each other, taken care of our customers and the local communities, is really amazing. And we have a very decentralized model where we empower our people to, yeah, to take responsibility.

And I think during these kind of crisis, where there were so much volatility, so much happening at the same time; I think we really benefitted from it. The other thing I'm really proud of is to Heineken brand, our flagship brands, just down 2.5%.

Without South Africa, it would have been up and growing double digits in 14 markets. China looking very promising at the start with the CRB platform, we see very strong market share results across a couple of important markets like Vietnam, like in Brazil, like in the off-trades in Europe.

So for all the challenges, there's equally a lot of momentum in particular parts of our portfolio in our channels. Yeah, your second question, a part of your question Trevor around areas where we feel we have to step up.

So first of all, this is something that I'm really taking a step back, to deeply listen and engage with the organization as well as with stakeholders outside to see what's truly needed. Going into the crisis, the company had a lot of momentum.

I feel the fundaments were and are very strong. Our global footprint, our exposure to fast growth markets, our much more diversified portfolio than it was 10 years ago to strengthen Heineken and so forth.

Having said that, as we have shown over our 155 years of history, it's a process of continuous renewal, of continuous revitalization and we're living in such a period, once again. And yes, there are a couple of things that are on my mind, and we will come back on those later at -- in due course.

In terms of our culture, I really like the passion, the engagement, how people take responsibility but at the same time, I feel at times we can move faster, we can be more agile, and be more deliberate about learning from each other. Very important, in the end of the day and that's also why I wanted to share the commercials.

We are a consumer company. It is all about, you know, meeting unmet consumer needs and being very creative and entrepreneurial in this regard.

And I would love to continuously renew and revitalize this muscle in the company, as consumer habits and behaviors, are changing very rapidly at this moment. And then of course cost, we have said that in my quotes and in the release, we can do more in this regard.

I feel in the second quarter, we took out €0.5 billion in cost, in a relatively short timeframe. So, cost control is very important, will be very important going forward.

And what's particularly of concern to me is to make sure that we will be able to always invest big and bigger behind our brands and behind our customers. So those would be a couple first thoughts in this disregard, Trevor.

Thank you very much, that was very helpful.

Hi, Dolf and Laurence. A few questions from me.

The first is on your good market performance in a number of markets. So could you provide a bit more color on what is driving that?

And do expect this momentum to continue beyond the crisis? The second question is around documenting this increasing needs to step up from consumer and customer centricity.

I was wondering whether, you could provide any example of where Heineken was doing that particularly well, and therefore where is the gap for the rest of the business? And then the third question is around this point, adapting fast to new realities.

I appreciate there's going to be a big step off on being more nimble company focused on costs. And it’s very hard to make structural changes to the business until you know what the world looks like on the other side.

But at what stage, you start to consider making potential structural changes in particularly in Europe where you're more vertically integrated and your businesses in a very skewed towards the on-trade? At what stage do you start to think about making changes, given it's very hard to know the stage, you know what is going to look like on the other side.

Very good. Thank you, Edmund.

On your first question on these consistent share gains, I think it's really the fruits of many years of deliberate investments and very intentional strategies. Probably one of the most spectacular market share gains we were seeing in Vietnam.

We have been seeing them for many, many years. And it's accelerating rather than slowing down.

I think it's a combination -- there's multiple drivers there. We have continued to invest in our route-to-market in the urban areas, in the more rural areas in more recent times, we're strengthening the route-to-markets in the north.

On the portfolio, premium has always been our strength and we're not taking anything for granted there. We keep revitalizing that portfolio with Tiger Crystal behind the all-important Tiger brand.

The Tiger brand only being down low single digits. The Heineken brands where we launched as the first market globally Tiger -- sorry, Heineken Silver as a more sessionable extension on Heineken doing extremely well, doubling its size in the first half of the year.

But then, I think what's particularly relevant at this moment in time, that about a year and a half, two years ago, we made a very conscious decision to also extend our portfolio more intentionally into mainstream. And in insight, that was absolutely the right thing to do.

At the time, we didn't realize how relevant it would be right now. But we see very fast gains in our mainstream portfolio.

We also launched a new national mainstream brand Bia Viet. So we really see that this route-to-market, this portfolio, it's premium, it's mainstream.

I think in Brazil, it's a similar case. For many years, we have seen quite spectacular growth on brand Heineken, that's continuing even in the middle of this crisis brand Heineken growing almost 50% year-to-date.

Also, they're expanding into mainstream with Amstel brand continuing, it's very positive momentum. We keep investing there and rebalancing the portfolio to the more mainstream and higher end, resulting in very positive mix effects.

Around double-digit price mix effects as a consequence. In Europe, in the off-trade, the on-trade is hard to see because that has been so disrupted but if you look to the off-trade in Europe, we're gaining share in the majority of our markets, and we are doing it with the key premium brands.

Brands like Desperado is up significantly, we are seeing Affligem, we see Moretti, for example, in the UK. We see Ichnusa, in Italy.

So we keep leaning into building those brands, building our premium positions. And we'd like to believe that that's one of the key reasons why we were seeing these persistent share gains Edward.

On consumer and customer centricity, that's something that is and should be priority at any moment in time. But I do believe it goes a little bit in waves up and down.

At times, I find we can become a bit too centric on our own brands and our own products. And it's important to really have that outward in perspective, really understanding where our consumers are going.

I think we can do better in this regards. That’s a muscle we can strengthen further, but we're also doing it quite spectacularly, I would say on, for example, 0.0.

Where a couple of years ago, we made a very big bet on Heineken 0.0, on the biggest brand, 25% of the brand budget is going there. And we have seen the fruits with I think now almost 60 operating companies who have rolled out to the brand and with continued double-digit growth, even in the middle of this crisis.

Now on to your third part of question, adapting to new realities, that's not something we're postponing. We're actually -- we’re ever really doing that in this moment ASAP, before we took out €0.5 billion in cost, apart ATL, BTL where you need to be cautious that you don't overdo it.

So we are quite deliberate in assuring that we maintain our share of voice levels in key markets, but there are efficiencies there is media deflation that we can take advantages to. And we're really looking at our other fixed cost.

Yes, we made a firm commitment of no restructurings linked to COVID. And we will stay true to that commitment through the end of the year.

And going forward, it will be really finding the right balance between assuring the health of the business, protecting the business while minimizing the impact on our people. And we are in the middle of really, yeah, figuring freaking that out together with the team.

But I'm, I'm quite confident that we will find that balance in the right way. Thanks, Edmund.

Thank you.

Morning door Dolf and Laurence. Just a couple of questions, please.

Firstly, just on the on-trade business in Europe. Can you just talk a bit about what you've seen in June and July in particular, as many of these outlets have started to reopen?

And if you can point us to where you think trading is relative to them 50% in the first half of the year, and secondly just going back to the --to the point on intensifying the focus on cost, Dolf, where do you think are the biggest opportunities if you can highlight two or three things?

Yeah, on the on-trade. I think we have commented that we have seen a sequential improvement as the on-trade reopens.

At this moment in time around 90% of the outlets, the on-trade outlets across Europe are open again. Critically for us in the UK we reopened later.

We already have about 85% of our #[inaudible] states in UK is open. But we do realize that a good portion of the improved volume in performance in June was related to refilling the pipelines in the channel.

So we know we want to be cautious. And yeah, maybe we're a bit more cautious than the market expected but we feel it's important to realize that there will be volatility as consumer behavior is still, you know, adapting itself to perceived risk levels.

There are still many restraints even in a reopened work that is constraining the ability to serve. So, yeah, I think it will be really a tale of two step forwards one step backwards in this regard.

I'm not the first one to comment. I think James Quincy made the same comment about until there will be effect sign or any other structural solution to the virus, we don't see their on-trades coming back to its exact pre-COVID level.

So in the meantime, we need to maintain agility and adapt up and down, as I'm very proud to say our supply chain and customer service organizations have been able to do quite effectively. Maybe Laurence, can you take the question?

Yes, in many respects, #[inaudible] that will provide us with some zero-based of view on discretionary cost. And we're going to be, of course, very careful in how we add back to the cost.

Now, more structurally cost savings moving forward will come from automation in a way we worked a lot on our productivity in the supply chain domain and we are increasingly doing so in other aspects, including the support function, for instance. And in terms of automation, we have accelerated in the past few years.

What you see as well is that the way we do things, the way we even deploy our big programs is changing radically. During the lockdown, we were able to continue to deploy.

We made the choice actually not to stop that part of our investments. We continue to deploy our system, our ERP system changes in a number of countries and we do, did the go live completely remote, something we would not even imagine.

Closing the book remote is something we couldn’t imagine and we did it but deploying a new ERP system with no one on -- the on the ground, was something we would not have thought possible. We did that.

And we didn't do that in Germany, France or Italy. We did that in Burundi, in Ethiopia, and in [Central Asia].

So that is opening up a whole new way of working and that's something that we've been realizing and those are benefits that we want to keep moving forward. Again, there will be no stones unturned.

It's also, I would say, the beauty of a new collective as an executive team coming together, asking each other questions and then looking at it together. Because the plan and the ambition is to be able to more focus on cost and the sharper resource allocation process to really fund the big battles of growth, because that will remain the essence of these companies.

Got it. And just a quick follow up on that Laurence.

As you as you think about the new normal and whenever the business might go back towards previous levels of sales, do you think you the -- as you think about balancing cost and investment, do you think the business can go back to a higher margin level, or at least in line with pre-COVID levels?

The primary focus is really to get more margin of maneuver in order to fund the big battles of growth. And moving forward, that's what really enable us to have a sustainable way of profitable growth.

So the first worry, the first concern is to really make sure that we free up resources in order to be able to work on resource allocation. Now, absolutely, the slide in margin is not something that we're happy about.

And it's not something that we want see. This year is not the right year to talk about margin.

But definitely we want to balance what goes down to the profit, net profit and what gets reinvested in the business.

Got it. Thank you.

Thanks, Sanjeet. Next question?

Thank you. Good morning Dolf and Laurence.

I’ve got two or three questions, if I can, please. Dolf, you talked about the need to look up some targets, unmet consumer needs.

Does that mean that you would perhaps consider at this point in pursuing opportunities beyond beer and beyond low or no alcohol or are you talking specifically about unmet needs within the portfolio and sort of broadly expand? Secondly, I wanted to just talk a little bit more about the revenues per hectoliter, and revenue per hectoliter click in Europe and through the first half.

I believe you are cautious on the outlook into H2. And I know you don't want to talk about volume exit run rates in June and into July but how do we think about sequentially perhaps revenue per hectoliter has moved in somewhere like Europe from the April lows through to the end of the quarter?

And then finally, just a quick one around this whole tax rate, clearly a number of issues impacted the tax rates in the first half. Do all of those issues remain structurally into the second half as well or --?

Okay, I will take those first two and then maybe Laurence any comments you may have from revenue per hectoliter but then, particularly on the tax rate. Thanks, Simon.

Regarding consumer and customer centricity and focus on unmet needs, and whether that would take us beyond beer. I -- for me, what is really key is it's about to consumer.

And it’s being much more deliberate about servicing our consumers and why is beer still so under represented with female consumers? What's happening with consumer penetration with younger generations?

That's something that really concerns me. That's something that's very top of mind.

And -- and we really want to take responsibility and make sure that, first and foremost, the beer category stays relevant and becomes more relevant, and drive consumer penetration with all these relevant consumer targets. And that may mean that it looks and smells like beer today, it may look different.

I think we're already tapping into certain trends, whether it's 0.0 beer, whether it's much more sessionable beers that we're seeing in some markets, much less sessionable beers more on the crop spectrum in others. And yeah, for me, it's to be much open minded and not being caught in a very fixed mental model or to be too inward focused on the portfolio as we have it, but really deeply understand what's going on with our consumers and make sure we satisfy their current and future needs.

And again, I can name many great examples where we’re already doing it. And at the same time, I know and I'm convinced that there's much more we can -- we can do in that regard.

Now revenue per hectoliter, first and foremost, one of the things, it is always important and our intention to make sure we get the pricing in respect to the cost. The whole disruption in the channel mix is really upsetting this picture in a major way, because in the shift from on-trade to off-trade, the revenue per hectoliter is significantly lower.

But your input costs are also much higher. So it's a very difficult situation, we are facing there.

I think in the release, we are signaling that some of these effects that we still expect them for the remainder of the year. But Laurence, maybe you want to comment on that before addressing the tax rate question.

Absolutely, we do expect that the shift will remain quick, quickly towards off-trade in the second half of the year. Even though we've seen gradual reopening, we're not at 100% and the one that we opened or not at 100% of the previous volume, so that will continue to have an impact in the second half.

And answering to your question on the tax rate, definitely the fixed part of the tax becomes much heavier in terms of tax rate when you have a lower profit before tax. And that fixed part can be things like withholding tax on goods and services provided internationally.

We also have indeed the non-deductibility of certain part of interest or some losses that we cannot -- for which we cannot move the deferred tax asset. Those three elements will remain a factor in the second half.

So not guiding on the on the tax rate, but you should expect that the tax rate in the second half would be probably closer than what you see in the second -- in the first half than on the normal year tax rate, that will still, I’d say, quite massive.

Good, thank you so much.

Hi, thank you. Good morning.

My first question is, would the COVID crisis change your long-term views about your integrated business model in Europe, if lockdowns were to take longer to ease fully or if footfall remains lighter for longer? And the second one is.

You called out Europe, Mexico and South Africa, explaining about 84% of the H1 EBIT decline. It appears that these regions are likely to stay, well face on challenges in the near term without the affair assessments?

And are you planning to change anything in the way you run the business to counter these headwinds in the second half? Thank you.

Thank you, Pinar. And regarding our long-term view on the integrated business model, I'm a firm believer that in the end of the day, human beings are social beings, and they love to connect, they love to come together, enjoy life, and often over beers, and often in these kind of on-trade environments.

So long term, I absolutely am convinced, this will remain a significant and important and profitable part of our business. Short term -- our short-term outlook, very volatile, long term we remain committed.

The question is to what extent we would have adapt to our cost structure in let's say the midterm. And this is something that Soren Hagh, our new regional President Europe is starting to look into.

He has mobilized his people to assess this. So this is something that is very top of mind, but once again let me reiterate, long-term be really believe in the strategic value of our integrated business model as it tested so well also in the past.

And your comment on Europe, Mexico and South Africa representing 84% of the profit decline and it’s impossible to say anything meaningful on the future Pinar, I think things may improve their but they may deteriorate. In other place, it may continue as is and I think in the end of the day, the one only wise thing we can do, one, to remain very realistic about what we are facing.

Two, to be ready transparent about it and three to really make sure that the agility and adaptability that we have seen across the business that we really maintain that, as such I am very, very impressed by our supply chain, we have a very complex optical footprint and considered how widespread it is, and it has been amazing how efficient and effective the supply chain in branding very quickly down but also ramping up very quickly. Now one thing we haven’t spoken about it yet but something that is really taking and showing a big acceleration is our e-commerce business and where for example, in Mexico also in places where we were in a locked down the Six 2 Go, B2C platform really helped us in reaching consumers whereby the traditional channels where not able to do so.

And I think the number we shared is that we had 10 times the orders in the first six months of the year compared to the full year of 2090. The same thing for Beerwulf, our pan-European platform almost doubling the number of consumers we have there.

So I think it will be a tale of two stories where in some places he will have to accelerate and we have to scramble to make sure we are able to satisfy demand and in other places, where are very unexpectedly things male roll the opposite way but I am confident in our organization in managing to do both. Thank you, Pinar.

Thank you. Thank you so much.

Good morning. Three for me please, first one, Laurence, on the question of impairment testing, when I look at your whack rates which are 20% and higher.

It is much higher than what I am calculating, it seems like it so much it seems like continuous [indiscernible] and also much higher than your competitors to 10% to 12% whack rates in similar geographies. So the question is, are you – have you been too conservative to address that?

And the second one, and you are very much a federated organization in terms of that agility and you are doing this, the acting investment in your infrastructure. What are the opportunities to leverage the scale better on the back of that?

What are the things that allows you to get better cost control and better agility on the back of that infrastructure investment which has been quite large? And then the third one, Dolf you have mentioned one of the opportunities in terms of Beyond Beer was to target group and that is something which I think I have been hearing for last 25 years.

But there also seems to be the problem that often, particularly in beer, management is still very much male-dominated. So perhaps, where do you see the opportunity there?

I think the first one was for you Laurence.

I think the third one was, that was for me Dolf.

You can take that as well. I am very happy.

Thank you very much Tristan. So, no I will pick up the one about whack of Papua New Guinea.

So we can have a further discussion on this. We take our whack from external sources and we look at it country by country for.

There might be pretax, post-tax ways to look at it and so, happy to answer your question in detail. Frankly, I don’t think we are particularly conservative, we have long discussions with our auditors, again, country by country and you can -- different external sources can give different things but, as a matter of general statement, we are not considered neither too optimistic neither too negative on that those.

Now you say whacko is a country risk and sometimes it is very uncertain, so this is like the externals source you are picking.

Yeah, that’s all you want to share on impairment?

Well I can actually go down on the whacko first early on, I’m an #[inaudible].

Well I am happy to take second part of Tristan’s question. And on our federated model which is huge strategic asset as well may complicate leveraging scale.

I think that’s how I understood your question, Tristan and what are our intentions going forward. Now, as I said before, I am a big believer in our optical centric model where we are putting the accountability and the P&L speak the local managements, as close to local consumers, local customers as possible.

That gives us the agility, the adaptability and the entrepreneurial spirit and we will continue to do so. And what is true that and I have been as much part of this as anybody else that we have not yet been very -- not as effective as I would say as we would like to be in leveraging our scale across all dimensions.

We have done so, for example, in procurement. That is an area where we really centralized and we have reaped the benefit.

In other areas for example the management of the Heineken brand, which 10, 15 years ago was extremely federated with 23 different agencies and were really harmonized and drove a much more globalized strategy. And I think that’s one of the primary reasons why we are seeing this very strong results on brand Heineken.

So I think we are on a continuous journey of finding that perfect balance between local entrepreneurial spirit, local empowerment now driving commonalities, driving global strategies where it’s relevant and where it matters. And with the major digital and technology investments, that we are facing, it is a moment in time where we will further nuance our operating models and will be for the elements in our operating models where we will push for common standards, common systems rather than allow op cost to each go there individual way.

And again this is not something knows this is something that we have done over the years and it’s just one of those moments and time where we will probably see an intensification and acceleration in this regard. And it’s not just for cost control and eight is also really important, if you truly want to become a digital enabled company, you need common data systems.

In order to have common data systems, you need standardized transactional processes, you need standardized IT systems and we are firmly committed to be heading in that way and accelerate our efforts in this regard. Now, your last question on Beyond Beer, and how you have heard that for over 20 years.

And that’s the point well taken. And it is embarrassing to be honest and it’s bad business because half the consumers out there, the potential consumers happen to be female.

And I really feel we need to do a better job at that. And I do believe that adjacent categories have done a better job than beer in this regard.

And you are also fully right to point out that there may be a correlation with the internal diversity in beer companies and the diversity of our consumer base. So this is something that’s highly in my agenda.

With 85,000 peoples, there is no quick wins where you suddenly, dramatically transform it but it is something that Laurence and I, the whole executive team are really committed to -- to move the needle on. Not just because it is the right thing, and it fits our value of respect for people but also because it is good and important for business.

Thank you.

Thank you, Tristan. I think -- are there any more questions or not?

Okay. Now a just short and final words.

And thank you all for your questions. Now, as I wrap up, I would just like to again thank all our people -- all the 85,000 men and women from the Heineken around the world, for their relentless commitment to our Heineken values and by taking care of each other and the customers and our communities, while, at the same time we are adapting swiftly to the changing business environment and consumer and customer needs, despite the current challenges we are facing.

I am and remain very confident that while navigating the crisis, we really build a bright future and continue Heineken’s growth journey. We will emerge stronger.

And once again be the pioneer in leading and shaping the global beer industry. I thank you all for joining the call and I look forward to meet in person and have some beer together as soon as circumstances allow.

We wish you a very good day. Bye-bye.

Goodbye, thank you.