Heineken N.V. (AMS:HEIA)

AGM 2019

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Apr 25, 2019

Ladies and gentlemen, could you please take your seats so that I can start the general meeting at 01:30, the general meeting of shareholders for Heineken and B. I'm pleased to welcome you all at the Delamard Theatre. I'm also pleased to welcome the Heineken Holding and the shareholders as observers here. We're in a different room today, and I believe that other performers will follow us. And Javier Rosman will be performing after us. And if you you might be able to remain seated and attend the performance afterwards. I have a few general remarks. First, please switch your phone off or to silent mode during the meeting. No audio, photo, or video recordings are allowed to ensure the privacy of of your fellow shareholders. We have simultaneous interpretation from English into Dutch and from Dutch into English. You can use the headsets provided. English interpretation is on channel two. Questions asked in English will be answered in Dutch and interpreted simultaneously and vice versa. If questions are answered by, non native, Dutch speakers on the executive or supervisory boards will be interpreted into Dutch. Those who are hard of hearing can also use the headsets on channel one. And this meeting is, audio cast live on the website, and I'm pleased to welcome the listeners as well. The meeting of Heineken Holding Envy will begin at 4PM or as much later as this meeting ends. A few formal remarks. All formalities for convening this meeting have been observed as required by law or the articles of association. Valid decisions may be taken about all topics announced. The firm has given shareholders the opportunity to provide voting instructions by Internet, and this opportunity has been taken. I will tell you the number of shareholders who are represented in the votes they're entitled to as soon as the count is complete. And then I can also tell you how many shareholders are present. This meeting is attended by notary Metblink of Leuensen Lof who will supervise the course of the vote. And the voting and decisions taken today will be posted within a few days on the corporate website. And the report will be available within three months and will be posted on the website. Re relating to the discussion of the financial statements for 2018 by the executive board, we have the auditors, mister Dahlhausen and Binkhorst from Deloitte Countess present. And I'm also pleased to welcome all press representatives. Ladies and gentlemen, the following is very important. I would everybody who wants the floor during the meeting to use a microphone and to state his or her name as soon as I grant that person the floor. Any person who is speaking on behalf of the shareholder, state which shareholder you represent. I explicitly reserve the right to limit speaking time per speaker if there is cause to do so in this meeting. We expect you to ask questions, but not to engage in lengthy treatises, and I will who will be answering the question. Once again, this year we'll be using voting devices. Heineken and V shareholders have blank voting cards without a dot and are entitled to vote in this meeting. Shareholders of Heineken Holding who are present here as observers have received a voting card with a yellow dot and can use this pass at the upcoming Heineken Holding meeting. Some shareholders have cards with two dots concerning both Heineken Envy and Heineken Holding Envy, and they're entitled to vote at both meetings. Those were my introductory remarks, ladies and gentlemen, on to one a, which is the report on the 2018 financial year. Before discussing the report for the financial year, I'm pleased to hand you over to Jean Francois from the chairman of the executive board. Thank you very much, mister chairman. I'll start with a commercial, and this is about the Rugby World Cup. Well, that was nice one, wasn't it? I would also like to reflect on other trends that contributed to our group, our international brand portfolio. And I'm going to walk you from left to right and top to bottom. You'll see the image in front of you. Our international portfolio experienced double digit growth, driven in particular by Tiger Crusovich, Viramoreti, and Desperados. Cider volume increased to 5,600,000 hectoliters. In The UK, volume increased mid single digit. And outside The UK, we sold more than 2,000,000 hectoliters of cider. Trends concerning responsible alcohol consumption continued to generate new consumption moments for our low and low alcohol brands. The volume in this segment increased to 13.1 hectoliters thanks to Madler and Henkel and zero zero thanks to lower malt volumes in Nigeria. Our craft and variety beers increased by double digits driven by Aflithem, which introduced a variety with a lower alcohol percentage. La Gonitas continued to expand to countries outside The United States and is now also brewed in our velvet breweries in The Netherlands. Here in The Netherlands, we also are brewing brand IPA in The Netherlands, that's a very popular brewing brand. In Italy, there's Viremoretti Regionale, and that continues to pose strong growth as well. In 2018 we continued introducing the blade innovation. You see that at the bottom right of the slide. The blade is a draft beer system that caters to smaller outlets and we are continuing to invest in our e commerce platforms, both business to business and business to consumer. One example would be the Beerwolf platform at the far right. We have over 300 brands, so I can't show you each and every one But I'd like to present a strong bow cider commercial and also a sole, which is from Mexico, and a commercial for the Italian brand that is from Now I'd like to talk about China. I'd like to talk about the announcement of our strategic partnership with China We're working to meet the conditions required to conclude this transaction within a few weeks. This cooperative arrangement will, of course, give our portfolio of international brands led by the Heineken brand optimal access to the world's largest beer market, which is an important milestone for us and a major opportunity for Heineken as well as for our CRE partner because the Heineken beer margins for a firm such as CRE are, of course, many times larger than for its own brands. If you would like additional information about this deal, see our announcements dated March and 05/2018. This takes me to brewing a better world. Starting with security and safety, which is the most important priority for our staff and contractors. Accident frequency, that's the number of accidents per 100 staff, was a bit higher in 2018 than it was in 2017 but was still considerably lower than in 2015. For the first time in production there were no fatal accidents, but the challenge is outside the walls of the breweries, specifically on the road. Too many accidents continue to occur there and we're trying to reduce that rate through our life saving rules to enlighten you. The accident frequency in 2018 was one point one three percent. In 2017, it was one point zero four percent. In 2015, it was one point three eight percent. Part of our regular cycle includes our code of business conduct and the related policy. For example, in human rights we adapted that and launched it in all opcos in 38 languages. In particular, we completely innovated our brand promoters policy and included suggestions and advice of NGOs and brand promoters alike. As for responsible alcohol consumption, remained an important priority in 2018. 69 markets of Heineken have allocated at least 10% of their marketing budget to Heineken toward campaigns about and for responsible alcohol consumption. In 2018, we more than achieved our 2020 targets for reducing CO2 emissions. In our breweries, the average CO2 emission per hectoliter year is down by 47% compared with the 2008 benchmark year. Last year, it was 5.5 kilograms of CO2 per hectoliter and in 2008 it was at 10.4 kilograms per hectoliter. Last year in February we introduced our Drop the Sea program and vision for 2030 CO2 reduction and the main target is to reduce a total of 70% of our electric and thermic energy needs should be foreseen from renewable sources in the breweries. These would include solar panels, windmills and biomass or hydro energy. In 2018, we launched 13 of such renewable energy projects. You will find additional details about this in our annual report. Last year, we more than achieved our 2020 ambition in water efficiency as well. The average water consumption in breweries was 3.5 hectoliters of water to produce one hectoliter of beer, which is a reduction of 32% with respect to 02/2008, and even 3.2 hectoliters of beer per hectoliter of beer in areas where water is scarce. We are aware of the urgent global water problems and that's why in 2018 we worked hard on a new program called Our Water Ambition for 2030 in this case. Last month we launched this strategy on March 19 and I'd like to say a bit more about that. In the strategy, we focus specifically on the 26 breweries that operate in areas where water and water availability is in jeopardy. Healthy water management is pivotal here because simply efficient water use is not enough. We are clearly looking beyond our own fence. Our ambition is for every liter of water used to produce beer to be recycled into the local water flow area, for example, by reforestation or restoring wetlands. We've gained good experience in the past five years in some of these fields. Collective action is necessary to be able to make a difference. That's not simple. It takes time. But we're seeing good results, for example, in Mexico and Indonesia where we've been at this for quite a while. In addition, we want to make our water consumption increasingly circular to see whether we can reuse treated wastewater not only inside our own brewery but also by sharing it with breweries near our own, for example also in agriculture or in other operations besides breweries. Of course we're continuing to work on more efficient water consumption with new targets such as an average of 2.8 hectoliters per hectoliter average for our breweries in areas where water is scarce and 3.2 average for our breweries globally. The intention is for each brewery in areas where water is scarce to adopt a local plan because water depends to a large extent on local contexts and we're working on that this year. There are some pioneers in that area. Mexico is clearly at the vanguard in this effort. Finally, plastic. Society is becoming increasingly concerned about plastic. A small share of our primary and secondary packaging is made of plastic. That's about 6%. So we're working on an approach for dealing with plastic waste, increasing circularity and the opportunity to reuse materials as well as reducing plastic This wraps up the report on 2018. Now I'm going to tell you about the first quarter from 2019. In the first quarter, the beer volume increased by 8.3% as we announced yesterday. 8.3% excuse me, 4.3%. I apologize, says the speaker. Now, as for the trends for region, they were as follows. In Africa, Middle East, and Europe, beer volume increased organically by 7.8 thanks to growth in markets such as South Africa, Nigeria and Russia. In March, we opened our first brewery in Mozambique. In the Americas region, beer volume was up organically by 3.2%. In Brazil, the volume increased by double digits thanks to the premium and the mainstream portfolios. In Mexico, the volume declined slightly because of the timing of Easter and beer volumes in The USA decreased mid single digit. We're clearly under pressure there. In Asia Pacific, beer volume increased organically by 8.2% thanks to growth in Vietnam, Indonesia, Cambodia, China. Heineken brand grew by double digits in China. Despite the timing of Easter, beer volume in Europe was up organically by 1.6% benefiting from improved weather conditions in the region. Beer volume increased especially in The UK, France, and Italy. That was my report about the quarterly figures, and I'd like to take this opportunity, ladies and gentlemen, with your permission to thank the chairman for serving as chairman on behalf of Laurence and myself. Hans, you have now entered meeting five thirty eight of our supervisory board meetings, and you wrapped it up at five eighty seven. Aside from this anecdote, I would like to thank you very much on my behalf also for everything you do outside the Supervisory Board. You speak openly with us. You share dilemmas. You share strategy. And often that happens outside meetings in more informal settings. But both boards have benefited greatly from us, as have many other people in the company, and we are deeply grateful to you. Thank you for these kind words. I can make a mess of things because I've already been thanked. No, ladies and gentlemen, I'll be very dedicated in running this meeting. Now we're going to discuss the report on the 2018 financial year, which aside from the presentation just delivered by Jean Francois, you'll find it on pages two through 45 and the sustainability review appears on pages 119 to 154. Please note that the remuneration policy of the executive board will be addressed at item 1B on the agenda, so not now. No questions or comments about that at this stage, and same holds true for the financial statement. That's item 1C. It's addressed there now. This room is not as convenient for these meetings because if you're in the middle of a long queue and you have a question, that's why we had some people with fishing rods all over the room. They'll help you if you They're like booms, so you don't have to climb over the knees of your fellow shareholders if you're seated in the middle of row. Who would like to ask the first question? If you ask a question, please identify yourself and state your name if you're speaking on behalf of another shareholder. Good afternoon. My name is Ms. Kvahnenburg. I work for MN, Asset Manager for pension funds. I also speak on behalf of Acmeyer Investment Management, Eagan AG Asset Management, Kemper Capital Management, Mensis and Rubiko. I heard your instructions loud and clear, but the remuneration committee as well as the targets mentioned earlier. Please allow me to ask a question about this already, and then I have a second topic. Please do go ahead. First of all, compliments on your financial statements and your ambitious goals. You're showing that by growing Heineken zero point zero, you're addressing customers' needs and a changing perception of alcohol. For legislators, for example, the ambitious goals that you have, the 2020 targets seem to have been met by you already. Also in respect of your water use, your reduction of CO2 emissions, you put together targets. You'll refer to those targets earlier. This is what we've observed. Carlsberg, AB InBev, their targets are more ambitious, so it seems. So a question. These targets that you referred to earlier, do you plan, do you intend, similar to Shell, Unilever, Auvelace, to link your long term remuneration policy to achieving those targets? Human rights. Last year, we talked about it extensively during the meeting. We also talked to Heineken extensively about human rights, especially because of the beer promoter controversy. Thank you for this conversation. It was an intensive yet open dialogue, and we're very happy with the results you've achieved so far: Human Rights, Code of Conduct Policy, the partnerships with local NGOs and so on and so forth. Despite all of these efforts, we still have a concern. Three questions about this. The HARE rules imposed on the operating companies include human rights policies. What deficit shortfalls are there in making those companies responsible for human rights policies and the execution of those policy? And how do you prevent any shortcuts? How do you mitigate any shortfalls? You suspended your brand promoter activities temporarily. What is the relevance of brand promoters to meet your sales targets? Are those activities necessary? Do you have alternatives? Do you see any? Last but not least, it's important to ask the shareholders to know: Were there risks in respect of using beer promoters? Were they unknown to you had you not identified the risks, or did you not value prioritize those risks enough? Thank you. Yeah. Carlsberg, the share price, volume, margin, everything is compared. But don't mix things up. So read carefully what we propose, what they've proposed. We, at Heineken, are not trying to beat other companies in who does better at this. We had an internal debate within our company. My own people, We asked, why don't you do a 100% in ten years' time? So we talked to engineers, and we said, you know what? There's a risk you don't need it, and that risk is substantial. It's not binding. But 2030, maybe the board will be held accountable. You make promises. You could not deliver on your promises. So we want to have targets. I'm not talking about my competitors. We're talking about our own targets. We want to have ambitious targets. We want those targets to be feasible. Maybe a stretch, but feasible. And what I don't want you to do, yes, but technology will close the gap. I don't want to go there. If technology can bridge that gap, technology that's not available today, but it is available five years from now, then the person sitting there at this table, right then, we can move the goalposts. That's what we intend to do. So the 70% renewable energy is a combination of electric and thermal. Some people say 100% renewable, electric only, but we look at our total energy needs. So we looked at our targets. We believe they are ambitious. Last year, it was only 14% in renewables. So there's a huge gap to bridge. It requires investments, partnerships. Some countries progress way more quickly than other countries. So developed countries, not necessarily, move quicker than developing countries or emerging markets. Take Brazil. They are very drastic in terms of their renewable energy because that's the way the country is put together. Norway, fully renewable. Costa Rica, fully renewable. So it depends per country. Some countries, it is easier. Other countries, it's much more difficult. Africa then. That's a continent where it's very difficult to meet your target. So we took an average of 70%. Some countries will meet the 100% target soon. Other countries, it will take a longer time. If we meet those target of 70% earlier, the better. As we did before, after eight years, we met our targets. So we achieved our milestone and we moved the goalposts. That's our ambition. Then you had questions about the remuneration policy. That's not my cup of tea. My colleague will answer that question. And that is the chair of the remuneration committee, Mr. Das. But as the chair, and I've been around for a while, and it's a personal observation, Not necessarily. You need to pay a director to do the right thing. You don't need to reward it. There are many things that need to be achieved. How on earth will you put together a remuneration policy by taking an average weighing of all the factors and take that into consideration. It is important to create a culture internally where sustainability is part of that culture. Ten years ago, that was quite a task. Now it needs to be part of our culture. When we built a brewery in Mozambique and there was a mistake, it wasn't green enough. It is not green at all, the next one. But it takes a lot more to actually put together a building that is green. Mexico, it's a very green brewery. So it takes time, and it has to take time to make sure that sustainability is a sustainable part of culture. We are in the process, but I don't think that remuneration policy needs to be changed to reflect this. It is about the culture, the motivation of people, and we need to steer them in the right direction in that sense. You asked about our human right policy. And the question is, who's responsible for what? Within our company, the managing director of each operating company are responsible not just for profit and loss statement, the income statement, but also human rights policy, execution of policy. We put our faith in them. Nonetheless, we must supervise and monitor that and we missed some occasions in that sense. We want to have a diverse company. And you have to accept sometimes that not everybody thinks alike. Not everybody governs in the same way. We have people from Malaysia, Singapore, Mexico, Nigeria, and they are heading our operating companies. They have a different background. They have a different cultural framework, maybe even different standards and values. There are differences and we need to be open about that. Nonetheless, Heineken is a Dutch company, a European company and we actually give them the direction. That's the direction we're heading in, but there are still steps to be made. Now the promoter policy. Were we not aware of the risks? We were aware of the risks and we didn't look at it carefully enough. We delegated too much and we frankly admitted that. So brand promoter immediately brings up, conjures up negative images. Can we ask ourselves that question, should we quit with brand promoters? That's the end of all thoughts about this. But it's not that easy to stop with your brand promoters. If you take that message to Vietnam or Singapore or Nigeria, many people will tell us, hey, you're taking away my job. So you need to look at both sides of the metal. So brand promoters, it does have a negative stigma attached to it, and you need to remove that. We are about selling brands. That's what brand promoters do. These are young people. They sell our brand worldwide. We have our own salesperson, and then we have outsourced services. And that's where the problems arise. We didn't keep enough of a tab on it. We didn't dictate what we wanted enough. We weren't quite clear about good parties to work with and bad parties to work with. But we must continue to sell beer. We can't quit selling beer. That's what a brand promoter does. So the negative image that you have in your mind, well, that's what you said. You want to have appealing young people that serve your beer during the Olympic games in the Heineken Holland house that is selling beer with passion, selling that brand with passion. We should not let go of that. But practices that gave rise to the negative reputation, That must be eliminated. You can't just pay girls in short skirts to sell more beer to drunk guys. That's not something that works. And we've removed those parties outside of the equation. It was a minority, and we can't even have that minority be there. Thank you. Martin, you will take the question when you talk about the remuneration policy. You asked whether the long term incentive should have a sustainability component integrated into it. No. The criterion for the long term incentives are laid down in the remuneration policy. Those are financial measurements, financial targets. We can't change that without revising our remuneration policy and that needs to be voted on by the General Meeting of Shareholders. Short term incentives include a sustainability component, 25% weighing and targets are part of that. You know that depending on the effective date of legislation and regulations, we must revise our entire remuneration policy and we must put a proposal to change to the shareholders' meeting so they can vote upon it. So should we include a sustainability company in the long term incentives? Not yet. Ladies and gentlemen, let me know about the share of capital represented here today. 81 shareholders are present here today. 52 shareholders are represented, and they vote through the Internet, so thirteen twenty three shareholders. So fourteen fifty six shareholders in total. And you see a concentration of Heineken share. The fourteen fifty six shareholders hold together 506,783,000 four hundred and sixty four votes and 88.595885% of the votes are represented. We have 25 shareholders of Heineken Holding, and they're here as observers. So let's take questions from the mic. You are first. I'll give the floor to you. Thank you very much, Max. Heineken, thanks for joining. I have four brief questions. A retired Heineken employee to China operations, does it is it consolidated this year? Second question, marketing costs, apparently, they reduced. They're lower now. Absolutely and relatively, how is that possible? Third question. The growth of Heineken, 6.1%, that's organic growth. Do you have additional takeovers? So growth caused by takeovers, acquisitions. Last question, what's your situation in Mozambique? Thank you. And thank you for answering asking your questions so briefly. Well, Heineken told me that's why I am a former employee of Heineken. You are a role model indeed. And, apparently, it caused confusion. I like that, a little bit of confusion. So China. So this the operation that we have in China will be consolidated in our book until the date of the closing, which we expect to happen in we hope to happen in this quarter. And after that, it will be not fully consolidated but we will have a 20%, so we will actually take part of the results of Is that correct? Or we only get get dividends? We will get in the future, we'll get two things. First of all, they will there is an an agreement to license the Heineken brand to start with and maybe further brand in the future to the operation in China. So we will get in the future royalty. And of course, in the beginning, it will be mostly reinvested in growing the brand and developing the brand in China. But you will see a royalty moving forward. But the most of the return definitely will be dividend that we will get from our participation in a company which is actually listed in Hong Kong. Your second question was about the marketing cost. It's an important KPI. At the same time, what we do to support the brand today is really multifold. When you set up a digital organization, for instance, you don't necessarily see the cost of that in the marketing cost. So the fuel behind the brand is far more than only marketing, and I would say more and more. It is commercial people, it is feet on the ground, it is digital schemes. You have to look further and on many different places in the P and L to see the support behind the brand. We often say the best thing to do is to judge us with output and not necessarily input. When you look at the growth in volumes of our brands in 2018, we hope and we feel that it demonstrates that we are bringing the right level of support behind our brand. So behind the growth of euro in percentage, it's important to see what we're actually delivering for the brand. So we feel confident that we are not sacrificing anything in terms of that support for the brand. Okay. Now this question was input by analysts who told you over the years. I know before the Heineken marketing expense was very high, sky high, always. But an analyst, he pointed out. That's why as a question, said, is it true that you or is it fairy tales? Yeah. Maybe another thing is that digital used to come on top of the traditional marketing and support behind the brand, now it's a little bit replacing. So at some point, when the marketing cost was going up, we said you will see some kind of roof of plateau at some point when we start substituting some digital investment for more traditional investment. That's also what's happening right now. Your third question was the growth of Heineken. We don't single out the growth of Heineken zero point zero. But what we can say is that even if you take out Heineken zero point zero, this is still the best performance of the brand over a decade. So I would say the Heineken classic is also performing very, very well. No. My question was the growth, Autorum growth for the total company, not especially for the brand, the total company. That was the question. Oh, the the the Not only brand. Oh, so the growth of the revenue globally is 5.9% for the year? Mhmm. If that's if that was the question. Yeah. Mhmm. No. But I ask, was it only autonomic growth? Yes. Absolute sorry. And can buy Absolutely. Other by by takeovers or something like that. No. Absolutely. This is organic growth, so this is the autonomous growth of the company. So that excludes the impact of currency and excludes the impact of integration of consolidation. So this is really the autonomous growth. Okay. And then, one more week. Yes. Every year, we always talk about the autonomous growth and we publish also what the absolute growth is. The business model of Heineken is, of course, and I said it often now, we are around 90,000 people and 89,980 people are committed to organic growth and 20 people work about acquisitions and looking at the next frontier. But if you look at Heineken over a period of twenty years, forty years, we keep on adding markets. Our raw material is just markets. And that leads me into your question about Mozambique. It fits in our African strategy that we try to open a new market every year. Now the good news about Mozambique is, and we never did that ever before, we built the brewery in one year, which is a record time. Brewery was around EUR85 million of an investment. To give you a little bit of the size, it employs 200 people locally. But we started to sell sourcing from South Africa, which is next door, already in 2016. So that is we prepared that. We learned a little bit out of Picot D'Ivoire that you better start selling before you build the brewery. And then you can build a sales team. Takes a lot of time. Mozambique fleets in our Africa growth story, it is next to South Africa where we are currently very successful. We are already in Namibia. Well, this was the next frontier and I'll let you guess what could be the next and the next frontier in that corner of the world. It is 30,000,000 inhabitants' country where they drink only 10 liter of beer. The urbanization is only 30%. And if you look at Africa, I would say the strategy of Heineken is today, tomorrow and the day after tomorrow. Today is the quarter after quarter. It's day after day. It's making our business grow. And tomorrow is about next year, until five years and then five years and beyond. And the Mozambique project is, of course, for tomorrow and the day after tomorrow. And the whole dynamic lies in the fact that a country like Mozambique will urbanize more and more like we see in many, many countries in Africa. And with the deployment and the development of middle classes, this is where beer consumption starts to move from 10 to anything between sixty and ninety liter per capita in some countries, and that we don't know. But so Africa is, in general, is very diverse. In general, it's a bit more difficult than the rest of the world, but it is one of the territories where the growth for the day after tomorrow for the Heineken company is there where we have to invest, and Mozambique is part of that strategy. And the start went very, very well, I have to say. Started off well. Thank you very much for your answer. Good afternoon, ladies and gentlemen. My name is Robert Freyken, and I am part of Reconnect U. S. Public Relations and Investment. Mr. Van Boksmaer, congratulations on your outstanding results. And also congratulations on your great, fast progression in terms of sustainability, corporate responsibility and human resources. I am very pleased about the progress. As you know, my target is to make Heineken the biggest brand in the world when it comes to zero point zero, and Heineken is well positioned to achieve that. They sponsored Formula One racing. I suggest we replace all commercials for Heineken zero point zero because driving a car combined with zero point zero, that's the best combination. The champion leagues is a perfect vehicle sports plus Heineken zero point zero. What a wonderful fit. But the greatest news is to have Heineken zero point zero in the Bond 25. You advised me about. Right? Perfect fit again. Talk to the communication department. A host at television. Join me. He drinks zero point zero. He's a TV host. Right? But the commercial had already been recorded, but the film is not yet ready. I have a request for you. Humberto Tam and I, can we please go back again? And can we see how we can actually get zero point zero part of it? Heineken zero point zero does wonderfully well. Humberto Tan is always the host in the Heineken Holland House during the Olympic Games. He's the ambassador of the World Nature Fund, the Red Cross. That combination, that fit makes this a wonderful choice for Heineken zero point zero sustainability, corporate responsibility, all rolled into one. I'm all also talking to Esther Kuipers of your organization. You want heated seats. It saves 95% in terms of energy. And use Heineken zero point zero. Again, Heineken shows the world how sustainability works. ABN AMRO, for example, all new lease company cars are becoming electric. Why don't you follow suit so your employees can actually drive their Jaguar or their Audi all electric? Last but not least, last year, I made a suggestion to you. There are people here within your group, and we have a green Heineken Waka Waka. That's a personal solar panel. Heineken syrup and syrup combine it with solar. So each year, we make progress. And all of us together, you, customers, shareholders, all the stakeholders, will become the most sustainable beer brand in the world. Thank you, Mr. Brigham, for your kind words. And I will pass on the congratulations because it's the team that makes this happen. Sponsorships, yes, we partially already are involved in it. But do realize, please, The market in which we operate for nonalcoholic beverages. Spain is the best developed market. 10% of all beer consumption is alcohol free. 90% is still alcohol containing beer and it levels off at 10% in Spain. But it's a lot higher than any other country in the world. So for us, our target as a first step is, if it can happen in Spain, we can reproduce this elsewhere. Maybe we can go or start to zero point one, zero point two, 0.3 or something like that. What we should avoid by only advertising with zero point zero that by definition Heineken will associate our beer with an alcohol free beer. We want to offer our customers choice. We don't want to just be the alcohol free beer. We want to offer choices to the customer, and this is a flavorful, tasty choice. And we won't don't want to dictate that choice. People have that choice. Yes. Our large sponsorships do include the zero point zero, but we won't make it exclusive. I talk to my own people about this. As an example, we have two commercials, Jackie Stewart, a very famous Formula one driver, a champion, if you will. And he actually put forward, dear, use us, ports, the pilots, the drivers to make absolutely clear, do not drink and drive. And I think I showed it to you last year, Jackie Stewart. He is offered a beer and he says, no. I'm still driving, and he gets into this wonderful Aston Martin. Now we have a commercial with Nico Rosberg. He's offered to zero point zero, and he still says, I'm still driving. So you can look at it both ways, but you actually have to show it in a good light. Both choices should be offered as a good alternative. Do not drink and drive, but if you do drive, drink your zero point zero, and that's our strategy. I'm looking forward to make that commercial with Umberto Tom. I think that's a wonderful idea. Now heated seats, you know that we're working on it. And that's also an investment by the hospitality sector in The Netherlands. You are talking to our company already. The company cars turning them into electric cars. I read it in the newspaper that ABN AMRO started six months ago. Well, we're doing it, but we did not make a news item out of it. So we're not behind. So we didn't publish this. But do realize this. We are not producing our energy in The Netherlands using renewable energy. We're still burning coal to run electric cars. So please use some common sense and be careful in what we see here. ABN AMRO saying, I will go electric in terms of my fleet. Yes. That's an example, but the infrastructure must support that. That's the only thing I want to say about this. And the Waka Waka, we did it years ago once. My memory is failing me somewhat, but I believe we did it in Rwanda. Thank you. Good afternoon. I'm Klompmacher. I'm an ordinary shareholder, and I am here as an ordinary shareholder. First, I'd like to express my compliments for your global marketing efforts. I'll be brief following up on mister Monkol, a fellow shareholder, but I have some questions for you concerning the article published in quote in April of this year regarding the circumstances in Greece, which I'm sure you know about, and I'm a bit concerned about that because you've received a writ of summons with a plus €100,000,000 claim for damages and gross Comparing that with a gross profit of nearly 400,000,000,000, that's not so impressive. Excuse me. Gross profit of nearly 4,000,000,000, excuse me. But it's still a lot of money. I won't quote from the articles. I'm sure you're aware of it. What I'd like to know is whether you have taken a provision because I didn't see it anywhere in the annual report. If a provision was taken, do you think that that amount is sufficient? My next question is how do you assess the risk concerning the outcome of that case? And my third question is are there special compliance measures that were taken in Greece to avert this from recurring in the future? My fourth question is whether Greece is an isolated case. Can you tell me whether this is simply an isolated incident, or is the company and consequent are the shareholders at risk of similar events occurring in other countries as well? Basically, those were my questions. Thank you. I am not going to elaborate on an individual case, but in our present society, it's becoming increasingly litigious, especially for companies. That's the trend. Provisions are taken for some but not for others. If we had to make provisions for everything, we wouldn't be able to continue life because it's a tough world out there. And I think we need to accept that many large companies are increasingly under attack. We're under attack as well here. This is no longer a cartel case. It's a case of a one private party against another private party. And I don't want to elaborate on our assessment of the risk. I'm not going to provide details about that because so many lawsuits are pending in disputes that unless and if I could add one comment, we'll talk about provisions later on when we discuss financial statements as to whether a provision was taken. But taking a provision needs to meet very specific requirements and perhaps Laurence can elaborate on that, otherwise we'll hear more from our auditor. So Yeah. I was just going to add that we have, of course, a review of all the attack and litigation, and and we do that on a very regular basis. So management based on the opinion also of our external counsel makes a determination of the likelihood and whether under IFRS you need to make a provision or not. And that all comes down to actually the provision that you have in the accounts. This is being discussed internally, of course. It's being discussed with our external auditors as well. And it's been extensively presented to our audit committee regularly so that you have all the I would say, we can always be wrong in an estimate, but it's an estimate in good faith and supported by external parties and lawyers advising us. And at the end of the day, we take this responsibility to put something on a provision and something not. Mhmm. And at the end of the day, this is the the court's concern, not the concern of this group. That's why we have a standard policy of not talking about pending lawsuits. My name Denise Reiche, and I represent the Webbe Deo, that is the for anything from the lectures for Dursammer in Fickling, or in English Dutch Association of Investors for Sustainable Development. Our principal aim is to make the capital market more sustainable. And this is why we are here, like in previous years, to complement Heineken with the most recent sustainability achievements. But at the same time, we also like to point to issues that we see affect the company and its prosperity in the long run. So one of the topics that we choose to address this year is climate change and adaptation. Heineken acknowledges climate change and its risks at various parts of the report. You've also outlined in your presentation the extensive programs that you engage in with regards to water savings and reuse of water. However, there are other things related to climate change such as the rise and extreme weather conditions that we believe can affect the prosperity of the business in the medium and long term. So we were wondering in particular with regard to this subject, extreme weather conditions, whether Heineken has already conducted assessments into this topic and if so, how you have done this and are you going to make this public or are you planning to do so? A second topic that I would like to address is living wages. And here I would first like to complement Heineken very much with the update of the human rights policy because as part of the new human rights policy, you explicitly state that fair wages that should equal also a living wage in a respective country of operations need to be paid. And even more than that, you are showing a serious front runner practice here stating that there are situations where this might not be warranted by suppliers and that Heineken wants to look into those cases where low or where minimum wage or low wage is sorry, a minimum wage is not upheld or very low wage is paid. So that's stated on page three of the human rights policy. And we are wondering, while we want to compliment you very much with this provision, how you seek to similar to our colleague asking a question before, how do you seek to audit this part of the human rights policy and are you already aware of any suppliers that represent a risk when it comes to this provision of your human rights policy? And then as a final question that regards the Sustainable Development Goals, the SDGs, you have already defined priority SDGs as Heineken and we are very pleased to see that now you are about to or you are in a process of redefining your sustainability strategy for 02/1930. What we are wondering is since the SDGs do provide specific indicators and targets that can work as guidelines for companies to work with and implement the SDGs and contribute to the achievements set in these Sustainable Development Goals. We are wondering, will we see that the 2030 sustainability strategy is aligned with the Sustainable Development Goals and will we also find back the targets and indicators there as stated in the Sustainable Development Goals provisions. Thank you. The climate change one by one, you will take the living wage. Yeah. No, no. Our supply chain is looking at that where you have situation. And we look at that in with universities because we don't necessarily have the scientific knowledge and background to really place that in the in the thing. But for our operations, to be fair, this is not the highest risk at all, extreme weather conditions in itself. What is, for us, challenge is the 26 water stressed breweries that we have, because there is a conundrum here that you sell more and more beer to a growing population that sits on a watershed that is ever decreasing. That is the big, big thing. Call it climate change, I don't know how you have to call it, but that is the thing that we have to address, whereby an industrial operation is by far not the biggest user of the water shed you are, but you are often seen as the symbol of it. And that is what you have to manage and the results in one way that is forward and it is in dialogue to try to solve this problem. So extreme weather conditions for us means essentially that, otherwise than that we have been conducting talks with universities about floodings and stuff like that. But the real issue is for us where we do produce beer, not the biggest issue for us in the way you depicted it, but in the water scarcity. And we're definitely working with our suppliers and universities and external partner on the impact of climate change without necessarily a plan to publish in detail all this work, but our supply chain and procurement department are very busy working on this, especially in terms of predicting crops and how that impacts barley, for instance. That's one of the things that we are very actively looking at. If I take the question on living wage or fair wages, it is a very, very important question. It took us time to formulate the way we wanted to go about it. And I remember your questions from the previous year, and we made a promise to you to actually work on it. It took us time because you want to say something that is not only going to be wishful thinking but that you will be able to actually follow through and if not audit everywhere because that is an impossible task. At least help suppliers understand what the criteria are, give them some help as well to understand also some references. There is this website, wage indicator, which we use because it's actually the right I mean, you need to look outside when there is no regulation that helps you look at people who look at the number of countries and provide benchmark. So we're making progress there. It's completely in our supplier code. The supplier code, as it stands, is today signed by 95% of our supplier. We parted from almost 20 suppliers last year because they didn't want to submit to one of the four steps that we have in terms of self assessment but then also auditing of some of our suppliers. We're moving more and more toward a risk based treatment because, of course, we have hundreds, thousands of suppliers and you cannot audit everyone in the same way. By the way, not every type of suppliers carries the same risk because of the country they're based in of profile and history. So we're trying to move to a more risk based and be much more detailed and have much more of a training but also auditing approach with a number of our important, more risky suppliers. So this new code supplier code is being rolled out. Our ambition is to have completely rolled it out by the end of twenty twenty. We are starting by rolling it out with every supplier. So with the selection of new suppliers, this is really taken into account. And then with every supplier that comes to renewal in terms of contract and then also suppliers that have continuing contracts, we're going to them as well. It's keeping our procurement team and our regional team quite busy, and we're very committed to roll it out and to follow-up on it. It is audit. It's a lot of conversation and a lot of training as well and also admitting that we don't know everything. So we're also learning as we walk. So we're not looking for perfection here but for a directional sense of something that we owe to every person who's working for Heineken, whether directly or indirectly. As to the SDGs, I think the beauty of it, and it took some years for most of the companies that operate internationally adopt the SGD as the commonly acceptable framework of setting and direction. You're not working on all 17 all the time and in the same intensity. That is choice for everybody. The beauty of it, it is setting a direction and it is for every actor in the world on this planet to fulfill a part of it. And I looked up in documentation, but that is a little bit it starts to be a little bit schoolish, but you can say if you say that the example is Drop the C, 2,030 target, 70% renewable energy, that is SGG seven, okay? And sub target, 7.2% renewable energy. That is where we concentrate on. And this is the way of doing. So in our report, we try to always refer to which SDG we are situated ourselves in. I think what is important, you can measure a lot of things. I think that every individual actor has to present things that he realized in honesty and if the world is progressing on that agenda, the world will make a progress. And so I think it's it is spending time into getting the direction. You will never be able to measure totally impact on a day by day or even a year by year. Important is to embrace that agenda and do it genuinely with conscious and diligence. And that is what we really try to do. The last question on this agenda item will be to the person at the left. Please state your name. You. I'm Andrej Jornet on behalf of the Association of Stockholders. You waited a long time, but you did announce a second round, so I guess I'll be able to take the second the first and the second round together. That's why I waited and in the last a step forward. Mr. Chairman, as an Ajax fan, I like to hear the Ajax the Heineken tune at the Champions League. It's the perfect commercial, So I'm delighted to hear the Heineken tune when the Champions League plays. I hope we don't have people who support Feynorgs or PSV among us. Mr. Chairman, strategic peak last year was the announcement that you could acquire in CRB and that equals about 20%, which has been claimed as a brilliant move for years. We've been asking you why are you not active in China. Well, we know the reasons that you won't make very much in this huge country. The margins would be disappointing. That's basically what I understood. Okay. You pay and then you get a good return. You pay that 2,000,000,000 net from what I understood, but perhaps that will be made more explicit later on. You will pay 21.6 times the value of the company based on twenty seventeen of CEBs. Your own entrepreneurial value is 12.9 so you're paying into your price if you compare that at 3%. You're paying $57,000,000 a year. Now if you look at the profit of CEB, that takes you to $21,000,000 So on balance you're losing 31,000,000. So you're losing 26,000,000 on balance. All you get are royalties. My question is whether the royalties, cover the loss. That's an easy question. You don't have to spend a long time. I'm for a simple yes or no. Can you keep your questions that brief? Yes, I can. That was just an intro so that we know what we're talking about. How long would it take you to cover the 2,000,000,000 purchase? That's a specific question and I'll be grateful for a specific answer now. Hygiene in Chinese breweries is much to be desired. How do you safeguard the quality of a licensed brewed Heineken beer so that we don't wind up purchasing made in China beers later on that don't taste the way we want them to. How will you take care of that? Stealing intellectual property is common practice in China as well. We discussed that at length yesterday. How will you make sure that you don't wind up with a situation where there's Heineken beer and some exotic Chinese named beer? That's another very simple question. And the second element, perhaps concerning everything that's been said about the promotional ladies, I that in Kenya they're taking sweeping measures. They wear long trousers and a T shirt and don't wear the little dress anymore, but first they put on other clothing. Another point in the social item that you're emphasizing is that in South Africa, 50 people were dismissed who were campaigning against a labor law, and these people, according to media, were sacked. Is that true? And if it is true, why didn't you stop that? Now the Brazilian bureaucratim, against all expectations, has quickly managed to break even and turn a profit. I think they are still depressing your margins a bit. When will they stop depressing the margins and reach the level of your own margin? Next. The impression of Nigeria is a bit diffuse. On the one hand, it's disappointing. We hear the managers saying, I need to take measures and increase prices. On the other hand, I hear you saying, The growth is double digit, including in Nigeria. So I'm getting a very diffuse impression there. Now The United States is also a difficult market. ABN InBev is growing by leaps and bounds. How are you going to match what ABF INBEP is doing? Are you also going to do more marketing? Are you going to cut prices? What do you expect to do in The USA in response to the moves by AB InBev. Last but not least, Mr. Valliers, we have to make that 4PM deadline. Have you acquired a share in United Brewers? I think it was 7,400,000.0. What is your present holding in United Breweries? Can you obtain a seat on the Supervisory Board there? What do you plan to do with that brewery? And do you want to increase your share over time? Thank you. The Chinese business model is based on dividend income and royalties. Royalty income plus dividend income will exceed what we pay for the purchase over time, but we're not going to tell you exactly when. That's the business plan. The rationale that makes this possible is because nowadays the volume we sell in China will probably be doubled or even tripled over time. Time will tell. That volume is delivering a lot of margin to the CRB, Chinese brewery, that we have a substantial share in. You need to consider those figures, but we're not going to disclose the details. The difference between what we're doing now and what we'll be doing later on is that now we're operating via three brewery distributors and we're going to sell those three breweries to CRB. They have 98 breweries. They sell 115,000,000 hectoliters throughout China and they have far more distributors and more sales people in the field. That's accelerating everything. The benefit for us is that we'll sell more Heineken beer that will yield royalties. The benefit for CRB is of course that the gross margin of a liter of Heineken considerably exceeds the selling price of a liter of the other brand. That's part of our business model. But we're not going to elaborate on the details or the timeline. We're convinced this will work and that's the turnaround point. The hectoliter price is far too low and we don't have any scale there. But there is one source of opportunity. Keep in mind that ABI was forced to sell the interest it acquired in CRP of 49%. It was forced to do so by the Chinese government. That created the opportunity for us to build on this strategy. We embraced that and that's how we brought about the deal. As for monitoring quality, because of course quality is incredibly important, Wherever Heineken beer is brewed, it's brewed by Heineken brewers. That's the contract and that's how we see it. We did not simply hand over a key and leave China. We're selling three breweries to our Chinese partner, but of course we will retain our knowledge in China. That takes me to the next point which concerns stealing intellectual property. You've read that in the papers, but that's exactly what a licensing agreement is about. You're allowed to steal it from me, but it's going to cost you. You have to pay. It's a short answer, but that's the way it is. Now the next question concerned RSA. I'm So I I you do the Nigeria and and ABI and you be, and then I do the difficult thing about Eresa. Natura, you Of course. You and I read the papers, We do have an operation in South Africa, just as with beer promoters. The sensitive subjects, including living wage, It's not so much an issue of the people who work with us, it's the outsourced staff. Please be aware that a company and not only us as a brewery, we no longer work with complete vertical integration. In many cases, half of your staff is working for you indirectly in many different aspects. For example, we've outsourced our cafeteria in The Netherlands as our logistics services in The Netherlands. Many things have been outsourced to other providers. The same holds true for South Africa. What you read in the newspaper was what happened with the outsourced section of our business. We're not in charge of the business partners we work with. The exposure in the press in The Netherlands of the situation and perceptions in South Africa differ considerably. This does force us to look at exactly how it works and whether our supplier is in fact paying a living wage. Keep in mind that in South Africa we pay minimum wages, which are legally set. Our opinion may be that they're low, but then there's a difference between the minimum wage and a fair wage. Such debates and dilemmas will surface everywhere in your operations. That's a fact. I just wanted to explain that there is no ready made one size fits all solution and the logistic partner that we work with in South Africa is Imperial. That's one of the largest companies in South Africa. It's a renowned company, it's very labor intensive. Sometimes there are internal issues there too. Now that takes me to Nigeria. Laurence, you can take Nigeria. Nigeria, if you look at 2018, definitely, we continue to experience pressure, both challenges in the market and competitive pressure, and the beer volume decreased mid single digits for the full year. We were slightly more positive in our comments because at the end of the year, well, we saw basically in the last quarter pretty much flat volume. Now if you look at the first quarter of twenty nineteen, which we just published, there is an increase in those volumes but we are comparing ourselves with a very, very bad first quarter last year. So we're still quite prudent in what we're saying. So I would say we're cautiously optimistic, very cautiously optimistic about the volumes You also had a question about margins in Brazil, which I can take. So we did integrate in May a company that was loss making, so it was a former operation of Kirin in Brazil, in Cariol in Brazil. We integrated them into our own Brazilian operation, which was actually at the margin, which was mid- to high single digits. There was a very quick turnaround. We didn't at the time, the only commitment we made is that we felt it would repay the cost of capital within three to five years. We didn't talk about profitability. First of all, this three to five years in terms of cost of capital will be much faster than that. And then in terms of profitability, we are already after the first full year, so 2018, into double digits in terms of margin. So this is very positive and this obviously comes from the very, very fast development of the premium part of the portfolio as well as the mainstream plus part of the portfolio. I mean Heineken volumes as well as Amstel or Devasa, Devasa actually coming from the portfolio that we acquired, added more than 1,000,000 hectoliter in 2018 to the overall volume at better margin than the rest of mainstream and value portfolio. So we at the moment we integrated, we did integrate a large volume with a lower average margin. So this had there was a step down in the average margin. And when we look at 2018 full year, we still compare the first five months of 2018 with this new portfolio with 2017 that didn't have that portfolio. So that had a bit of a negative impact. What I can tell you is that like for like, this is actually contributing to this is increasing very fast. So we're not giving a commitment of when it will reach average group margin, but it is definitely already much better. Perhaps I didn't understand your question about The United States properly, to be honest. ABI is the market leader and we have a 4% market share. Of course, we're competing with ABI in The US, but we're in the premium segment, not the economy segment, as are most of our brands. We're facing a tough situation, that's true, but we don't compete with ABI in terms of mainstream brands in The U. S. So perhaps that answers your question. So well, I read the following: In The United States, the market is challenging. So all parties are dealing with that, not just Heineken. That's correct. That's correct. Inbeth. But was well, it will be given a boost by the Super Bowl commercials. So they see the effects. Budweiser right now is increasing their turnover, their sales. Are you looking at this? Do you think yourself good luck, Competitor? Or do you say to yourself, if they're shaking the tree with Budweiser, we need to step up our game with Lagunas, right? We have that as a craft beer. But our Heineken brand, are you going to do something using that brand? Well, I think my answer is befitting. Our Heineken brand is a premium brand. And it is sold at a higher price than Budweiser, 40% difference. It doesn't have the same scope as Budweiser. Budweiser is the Heineken of The Netherlands, if you will, and we can't measure up to it. So our success in The United States is premium beer segments. Lagunitas is not Heineken USA, it's separate and that's craft beer. It's rather successful. The craft segment in itself decreased also in The United States. Lagunutis is doing relatively well, but the business case is partially grow in The United States, but also growth outside of it, and I referred to it earlier. India then, yes. We increased our market share 43%, 44%. We don't have a majority. It's not market share, it's share percentage, 43%, 44%. It's still partnership. And there's pressure on our partner, their legal developments. Our partner is held liable, and it's beyond our control. But once shares become available for sale, we are the first in line. If I may express myself like this, of course, we do have a seat on the board. We're actively engaged. We have our brands Heineken and Amstel. Those are the two pillars in India. On the other hand, it's about organizing a complex supply chain in India. It is difficult, a lot of water stressed areas. So we do work together in that sense or are facing similar things as United Breweries. Now South Africa, indeed, we checked whether the contracted minimum wage in South Africa is paid and not below it. We checked. We are above it. All the rest of it is interpretation, but that was a fact that I just gave you. Mr. Jornea, well, I have some final comments. OXO, I don't know how you pronounce it in Spanish, but you'll have a deal with them and you also have the FEMSA convenience stores. FEMSA is present here today. Here's my question. If you look at the deal that you entered into, brands other than Heineken, will they be sold in the convenience store stores? You have a contract for five years. First question, how much did you pay for the contract? And is not shooting themselves in their own foot? They're here. They're in favor of Heineken Scher. They are part owner of OXXO. Well, we can't discuss any FEMSA items, and we will not share the details of the deal in terms of price base with you. In brief, this was a transaction similar to other transactions. Delez, Tesco, Metro, a long term contract ended. We renegotiate the contract a year early. It is a renegotiation, a renewal of the contract. And what's important to know that OXXO is a retailer. By definition, a retailer cannot offer exclusivity till the end of times to any supplier. In time, that's impossible. We are aware of that. Both of us are aware of that. This is a contract that we entered into. Not talking sensor, but it is a good contract for Heineken and Orchow for both of us. I will now move to 1b. Mr. Jornay, you encouraged me to be brief, so I will stay brief. We will now move to 1b of the agenda. And that's about the remuneration policy for the Executive Board explained on Pages 52 to 60 of the financial statements. But before we discuss this, I will give Mr. Dess the opportunity to provide an explanation on that policy. Mr. Das, the floor is yours. Thank you. Ladies and gentlemen, as you know, because it is in the remuneration report, I share this story with you every year, Our policy for the Executive Board is based on four principles: one, support of the strategy two, performance based pay competitive pay for fair pay. Now the first principle, supportive of the strategy, implies that a majority of the remuneration, up to 80% or over that, is dependent on preset targets reflecting the strategy for the company. These targets for the long term and the short term variable pay are focused on top line growth, bottom line growth and cash generation. For the short term incentive, we also have a leadership and a sustainability target. Second principle, that is performance based pay. Further elaborate on the targets set for the strategy of the company. For each target for each objective, a target is set. And for the financial target, there is a lower threshold and an upper limit as well. Now these performance levels go hand in hand with a pay varying from 50% to 200% of the target level. Performance below the target, there's no additional pay. During the last item, the Executive Board provided an explanation of the results of the company in 2018. Now in accordance with the principal performance based pay, 2008 proved to be a good year and therefore resulted in a variable pay that is substantially above the pay that is in alignment with the target level. As far as the financial targets are concerned for the short term and the long term incentive, In two cases, the performance was between target and maximum level and in five cases, And for the targets, sustainability and leadership for the short term incentive variable pay, a weighing of 25%, the Supervisory Board was of the opinion that the Board performed between a threshold and a target level in a year in which the market was difficult because of geopolitical and social developments and challenges in the area of sustainability. Translated into variable pay, this wonderful performance resulted in a variable pay for 2018 of 156% of the target level and a long term incentive variable pay for the period twenty sixteen to 2018 of 183% of the target level. Third principle, competitive pay. That implies has been the case since 2011, by the way, that the policy level of the base salary and the short term and long term incentive is based on a median of the worldwide peer group for Heineken, so companies that are comparable to Heineken. If you you must compare with a worldwide peer group because Heineken is a worldwide company as well. 85,000 employees approximately, even up to 90,000 employees. Less than 5% works in The Netherlands. The rest of the employees work across the world. So the relevant reference market for the executive board members of Heineken is not a Dutch target. You have to look at the global market, not the Dutch market, because the median base salary for CFOs of that worldwide peer group substantially increased over the past years, the Supervisory Board decided for the year 2019 to increase the base salary for our CFO from EUR735000 to €850,000 a year. This increase to the medium level of the worldwide peer group fits within the remuneration policy and it depends on the reappointment by your meeting of the Executive Board with retroactive effect starting on the 01/01/2019. The CTO, medium pay, did not give reason to the Supervisory Board to adjust the salary. Fourth, principal, pay fairly. This implies that all employees of Heineken, executive board and all layers below that are consistently paid in accordance with the market. So for the Executive Board, we're talking about the worldwide peer group and the levels below. We reflect their pay by looking at what happens in the relevant countries. So the pay ratios within Heineken are a reflection of what happens outside of Heineken internationally and nationally. Within this framework, I would like to say something about the Dutch payout ratio. The Dutch Corporate Governance Code of 2017 says that listed companies with a statutory seat in The Netherlands must reflect on the pay ratio. And that compares the pay of the executive board and that of peers. You can measure pay in many ways, and a reference group must be set in a representative manner. The code does not give us any indication. So what we do is the same as what we did last year. Our peer group were all the employees of Heineken worldwide. For an international company to Heineken, by just taking The Netherlands or just taking the Executive Board, it seems random. And we included all pay components as paid actually and not and this approach is followed by many other listed companies that is listed on the AEXP ratios are not the sizes internally and not comparable. The measurement depends on the geographical spread of the company and accompanying diversity. Heineken has operations in over 70 countries, many emerging markets included. And structurally, pay is a lot lower than in The Netherlands. And you cannot compare to a company who only operates in The Netherlands. Therefore, the measure also depends on the organizational structure, Heineken, in emerging markets has a lot of services in house, including drivers, etcetera, compared to companies who, for example, only employs engineers or financial staff with outsourcing of all other services. In addition, the benchmark depends on the performance of the company affecting the pay of the executive board members a lot more than employees at other levels. Of course, we do state the pay ratios, but that is all we can do. It follows from the methodology applied that the pay ratio are decreased by 8.65% approximately from two fifteen to 98 for deceivo, and that is basically because of a decrease of the value of the long term incentives for Ribok pay for members of the executive board. And that was my explanation of this item of the agenda. Thank you. Any questions? Mister Johanna, of course. So I represent the VEB, Dutch Association of Stockholders, chair. Over the past years, I couldn't have thought of having any concerns about the remuneration of Mr. Von Boxmer, but right now, I do have concerns. In the final words of Mr. Das, it already became clear, the long term incentives, if you look at your graph, 18 compared to 20 explanation for this? I think you misinterpret a couple of zeros. Well, we agreed to share, didn't we? Well, maybe for a billion we would have, but right now, it's debatable. I actually mean a million. So a million is a lot of money in my coffers. So it doesn't matter what's in a 0, a billion, a million. But can you explain why the long term incentive is 1,000,000 lower? Yes. I have an explanation based on the methodology followed. If you look at all the elements of pay, the long term, the short term incentive, there are various measurements benchmarks. For the long term, you have financial and for the short term, financial plus sustainability. All of the targets are set for all of those elements and all of those criterion and when the targets are met or above that, well, you end up in a calculation that is above the target performance. And in 2018, as I just explained, the targets were met and more than that. In 2017, the targets were even better met and that caused a difference. So we exceeded targets in 2017 and 2018, but even more in 2017. That brings us to the next item on the agenda. That is the adoption of the financial statements for financial year 2018. So we are talking Pages 61 to 118 of the financial statements plus 155. The financial statements were audited by Deloitte, and you'll find their opinion on Pages 156 to 162. Before discussing the financial statements, I would like to give the floor to Mr. Dalhausen of Deloitte. Chair. There are a couple of relevant items on this slide I summarized. So the materiality was EUR 200,000,000, that's 7% of the profit before tax. That's comparable to the materiality applied last year. But I must add that the underlying OpCo level had a lower level of materiality. And just to be clear, all of the costs that had an effect of more than CHF 10,000,000 on the results are reported to the Audit Committee and the Supervisory Board. Further level of detail, costs showing up in time in the process are entered, included in the final figures and potential adjustments were relatively small in FOIs. Four times a year, we talk to the audit committee, statements and the executive board reports meet the requirements that are set by the legislator. And those are the items I wanted to bring forward. Thank you for your very clear presentation. Any questions, comments? Mr. Jorna, this is your one man show. Well, I love to perform in a theater chair. Well, 10 questions, but I will only ask one. How about that? Well, it speaks in your favor. Chair, Page 82 of the financial report. There's a graph there and it gives rise to so many questions. Not ten, two questions. If you look at that column, expected volume, and we actually look at Brazil, What you see in that graph is that the volume expectations in the context of the impairment calculations for goodwill is only 0.2%. We think that's rather low. If you compare that to Europe, Europe 1%, America 3.2%, Brazil 0.2%. You're doing so well there. But this is the period 2022 to 2028. So it drops back from 3.8% to 0.2. What's your explanation? Same graph, different question. You see a discounted interest rate to calculate this. And we see for Africa, Middle East and Eastern Europe, you'll use an interest rate of 19.2% to 33.8%. So we looked at INBAS. You can compare the categories, and they are between 8% to 11%. Do you have an explanation? Why do you use that interest rate? I know you're very defensive because the pension funds are also saying, bring up the interest rate. It reduces the level of our obligations. But 33.8%, what country are you talking about? This is the interest rate you use? Thank you. I think those are questions for the CFO. UNIDENTIFIED Of course. So what you have on Page 82 are the assumption that we retain when we do our long term valuation of our goodwill and then we assess the value of the goodwill. And for that, we need to have very long term business assumptions. Of course, our business plans don't go that far. We need to take assumption for perpetuity in a way. So what we usually do is we use our own assumption for our own business for the first three years. So here, the growth that we use is the growth that we see in our own business. And then we use actually external data in terms forecast of the overall market. And we're not saying this is what Heineken will deliver, but we try to take a conservative way and also defer to external sources as much as they exist in terms of assumptions. So this is an average of the assumption that you will see for the Brazilian market in the very long term from public sources. That is not our assumptions on what our business will perform, and hopefully, it will perform better than that. As for the weighted average cost of capital, it reflects on the country by country a risk per country. And then and of course, this reflects interest rates, but reflects the risk per country. We also validate that with external sources, banks, for instance, at least once a year, and this is a range. And when we operate in a country that is considered to have high country risk, if we evaluate the value of a business, we also need to take that into account. So that doesn't mean that will preclude us from investing because, of course, we're also betting on countries getting better over time, But that is a threshold that we apply. It should be quite reassuring because basically, when we look at that, we basically look at the value of our assets also, taking very conservative assumption in those cases. So what you're saying, the assumptions and the 0.2% is surrounded by uncertainties. Looking at long term, you take it all into consideration, but still, what I see is this. Inflation, 2022, 2028, assumed to be 3.8% and your growth, 0.2%. But wasn't this a country that is supposed to deliver the heart of the matter and then you consider a growth of 0.2%? May I please interrupt you? These are figures given by independent institutions. And in our case, for our sector, this is the assessment, the forecasted growth of the beer market going forward, and that is an assumption for the test. That's all it says, the impairment test. We have double digit growth in Brazil. But these are the standards we must apply for an impairment test. So we can talk about it forever, but we don't set these figures. But for the impairment test, they're your assumptions, not what an institution does. You support their assumptions. You agree and the auditor agrees. So I have a question to the auditor: Do you indeed agree or do you hide behind these figures given by some institute? And if I look at the INVEV report, I see the exact same assumptions. Right? Same institution. The figures are shared with the competitor. 0.2% growth for Brazil. Or am I missing something? Well, the overall market, we have a 0.3% growth. We've been outperforming the overall market. But when you're going so far in time, it is actually more prudent to take market assumption than to take an assumption of your own over performance. And as for inflation, that's the general inflation and then you have to take an assumption. But then if your mix is moving more towards premium, then you will compensate more of that inflation than if not. So in terms of the business, there are many things playing. You can actually make forecasts for the next three, five, ten years at some point in order to calculate the perpetuity and out of, I would say, being prudent. You take the average of the market and you don't take your own capacity to overperform it, which we hope to continue to do. But how do you then explain the percentage? You're very careful, super careful if this is your calculation basis, WACC. That means a higher risk premium allocated to certain countries. Yes, but I compare this to ABM InBev, and they're around $8.09, 11. So why would you have concerns? Well, maybe I should be worried about ABF InBev. 33% for a country. What country are you talking about? Let me propose the following. No. We won't share because we don't want an angry ambassador. It could be Sierra Leone, one of her country. Moving on to the next question. That could be mister Spaniard, but mister Vayers, don't you remember my name well? That's very sad. On Tuesday, I saw you and they sent you to they sent you into retirement. Well, you're smiling, but they did put you out to pastor. I've got a question for the auditor, and they may all be good auditors. I may also have a question for you. You have a 20% stake in a company in China. Is the auditor allowed to examine those books? Because they can say anything they like. But is the auditor allowed to take a look in those books? Because they probably apply entirely different accounting rules than we do in the West. How did you solve that problem? I get your question. Okay. My second question is that I didn't you said you sold three breweries. What was their book value? I didn't find that anywhere. Thank you. You're welcome. First of all, you didn't find anything anywhere because the transaction hasn't closed as well. So it's not in the 2018 account. If you look at CR Beer, CR Beer is fully owned subsidiary of the company listed in Hong Kong. They have their own auditors, and this is a publicly listed company, so it is subject to standards. Our auditors will have access to their auditors and will be able to discuss. Of course, you don't when you have 20% in a company, you don't re audit their own accounts, but there will be a dialogue and there will be access by our own internal department. But also auditor to auditor, they can be conversation. And that is how it's usually done when you take a position of that size. And then the state to do it. I think it's a bit strange that you're answering this because then the auditor would speak with his counterpart accountant in Hong Kong in some way or another. But then the next question is, mister auditor brings the people he wants, but he doesn't bring licensing experts because you're paid with you're paid for licenses. How was that checked? Because Were 10 or were 11 sold? How do you audit the licenses? That's part of the contract that we can do our own internal audit about how many hectoliters will be brewed. I've explained that controls the brewing process, so that's a reasonable access. Mr. Spunger, brew license Heineken in many countries. I haven't counted all of those countries since Some are more complicated than others, but we do know how to audit process. Thank you. Is there anybody else waiting at the microphone? No. It's dark. There's nobody there. Okay. Then we've completed that round of questions, ladies and gentlemen, and we're going to open the vote. We'll be doing this through the voting handsets. Would the voting operator please activate the system? If not, we'll need to vote the old fashioned way. But first, let's see how the system works. We assume it works. As soon as you have inserted your voting card in the voting handset, you'll see a welcome message and your name. Now these would be voting cards without a yellow dot inserted with the gold colored chip facing upward towards you. And as soon as the voting has been opened, you'll see the choices on the screen for casting your vote. If you don't see the welcome message, the hostesses in the room can help you, and you can leave your card inserted for the rest of the meeting. Does has anybody raised a hand because their voting handset is not working? Please raise your hand clearly. Okay. Either nothing works or everything works. I'll assume that everything works. I'm an optimist by nature. Okay. We'll agree as follows. If you want to vote in favor of the proposal, vote on excuse me. If you want to vote in favor, press on 1. If you want to vote against, press 2. And if you wish to abstain, press 3. If that's all clear, ladies and gentlemen, then this vote is now open. The vote is closed. I see, ladies and gentlemen, that the decision to adopt the financial statements for 2018 has been adopted, and 99.82% of the votes was cast in favor. Thank you. Don't have an apparent aim. Now one d, that concerns the dividend policy. The policy of the board is to propose a dividend each year equaling 30 to 40% of the net profit without net profit. Guidance aligns with the strong and sustainable cash flow generating capacity of Heineken matches the principles of the company to retain independence and healthy balance sheet structure and to maintain an adequate section of the profits to grow both organically and through acquisitions. As usual, the annual dividend will be paid as an interim and a final dividend, and the interim dividend will be set at 40% of the total dividend from the previous year. Who would like the floor on this topic? Nobody? Then I would like to move on to Item 1E on the agenda, which is the adoption of the dividend for the 2018 financial year. It is proposed that a dividend be paid for the 2018 financial year, equaling €1.6 per share, equaling 37.6% of the Bayonet profit. $0.05 9 was already paid on 09/2018 as an interim dividend. And the final dividend of 1 point euros per share will be payable from 08/2019 at the ABN AMRO Bank in Amsterdam. From April year, the shares will be listed ex dividend at Euronext Amsterdam. Any profit remaining for the 2018 financial year and the dividend distribution which is in the amount of $1,512,000,000 dollars will be added to retained profit equity. Who would like to ask any questions about this topic? If nobody has any questions, we will vote about whether you're willing to set the dividend at €1.60 per share. Would the the voting operator please activate the system? Please cast your vote. The standing is floating. The vote is closed. And I see that 99.86 percent of the votes has been cast in favor of the dividend proposal, is hereby adopted. Ladies and gentlemen, onto one F on the agenda, which is discharge of the executive board members. The proposal is to discharge the executive board members who served on the executive board in 2019 regarding performance of their duties in 2018. Who would like the floor on this topic? I'm a specialist in the discussion. Nobody. Okay. Then we will open the vote. I request the voting operator to activate the system. Please cast your vote. The vote is closed. And I established that with 99.51% of the votes cast in favor, the supervisory board who served on the supervisory board in 2018 have been discharged regarding performance of their duties in 2018. That takes us to item one g on the agenda, which is the proposal to discharge the members of the supervisory board who served. The previous vote was concerning the executive board. This is the discharge of the supervisory board members who served on the board in 2018. Mister Spanger, you have the floor. Mister Virus, you don't have any other business on the agenda, so I'm doing it at this point. There's a time to come and a time to go, and I understand your time to go at this company is here too, not just at ING. Tomorrow, I hope you'll have a wonderful time purchasing geraniums when you're put out to pasture. Thank you very much for your kind words, Mr. Spunier, and as usual, you're very much to the point. Ladies and gentlemen, we will now vote on this item. I request that the voting operator activate the system. Please cast your vote. The standing is slowed. The vote is closed. And I note that this proposal has also been adopted with 99.51% of the votes cast in favors. So the supervisory board members who served on the supervisory board in 2018 have been discharged from liability for their supervision of the executive board in 2018. That takes me to agenda item a, is authorization of the Executive Board to acquire own shares. You see these items every year, but we do need to cover them. It's proposed that the Annual General Meeting of Shareholders authorizes the Executive Board for a period of eighteen months from April 2539 to acquire own shares up to a maximum of 10% of the share capital subject to the conditions in the explanatory notes to the agenda in accordance with law and the articles of associations. Such a decision requires prior approval from the supervisory board and this authorization has been granted in prior years as well. Who would like the floor? Nobody. In that case, ladies and gentlemen, we will vote on this topic. I would like the voting operator to activate the system. Please cast your vote on this item. The standing is floating. The vote is closed. I note that 99.61% of the votes have been cast in favor and the proposed authorization has been granted. Next item 2B, authorization of the Executive Board to issue rights to shares. It is proposed that the General Meeting of Shareholders authorize the executive board for eighteen months starting from twenty five April twenty nineteen to issue rights to acquire shares. The authorization is limited to 10% of the presently issued capital in the company. Such a decision requires prior approval from the supervisory board. You granted that authorization last year as well. Would anybody like the floor about this? If not, we're going to vote on this. Would the voting operator please activate the system? Please cast your vote. The vote is closed. I see that this proposal has been adopted with 99.38% of the votes cast in favor, so the proposed authorization Now onto item 2C, that's the authorization of the Executive Board to restrict or exclude shareholders' preemptive rights. It is proposed that the general meeting of shareholders authorize the Executive Board for eighteen months starting from 05/2019 to restrict or exclude shareholders' pre emptive right regarding the issue of shares or granting rights to acquire shares. This authorization is once again restricted to 10% of the capital issued in the company right now. Such a decision requires prior approval by the Supervisory Board and you granted this authorization in recent years as well. Who would like the floor on this topic? Nobody. Then I request that the voting operator activate the system so that we can vote on this item. Please cast your vote. The vote is closed. And this authorization has been granted with 98.98% of the votes cast in favor. Thank you. That takes us to item three on the agenda, remuneration of the supervisory board. I will hand you over to Mr. Martin Das, who chairs the remunerations committee. I would like to explain this. The reason for the proposed adjustment to the remuneration of the supervisory board members is that it has not been adjusted since 2011 and is no longer competitive, especially not if we endeavor to consider geographic growth and distribution of our company and aim to be attractive to international candidates. The remuneration proposal is largely hedged according to the median within a peer group of West European companies except for Switzerland with the same magnitude of so revenue, market cap, and number of employees within one third bandwidth of Heineken. This yields a relevant peer group of over 60 West European firms, of which two thirds with a one tier board structure and one third with a two tier board structure. This peer group ensures that the derived remuneration levels are also appealing to international candidates and this will serve the desired diversity within the supervisory board. In Dutch public debate, we often hear appeals to use an exclusively Dutch peer group for supervisory board members and Dutch firms and to limit these two firms with a two tier board structure. We do not consider this desirable from the perspective of diversity, but the median remuneration levels within the West European peer group, regardless of the board structure, are the same magnitude as the median remuneration in the top quartile at the Amsterdam Stock Exchange that Heineken compares itself to. This is not the same as what applies to the chairman of the supervisory board member. The exception in that respect derives from the median levels of the West European peer group and the proposal is for the remuneration of the supervisory board members to be increased from €60,000 to €90,000 a year and the remuneration of the chairs of the respective committees as explained in detail at the relevant agenda item. That takes me to the proposed remuneration for the chairman of the supervisory board member. The median remuneration level for this within the West European peer group equals 250,000 levels a year for two tier boards and it's double that for one tier boards. We believe that these remuneration levels are not appropriate for the Dutch context, not even for international firms such as Heineken. That's why we propose applying the same increase for the chairman, that is to say 30,000 as the proposed increase for the members. Increase the remuneration for the chairman from $90,000 a year to $120,000 a year. We understand that these increases are substantial however, we believe that the proposed adjustment is justified by competition diversity considerations and the fact that the remuneration has not been adjusted since 2011. Thank you. Now you can ask questions or make comments. Go ahead. Good afternoon. I'm Mr. Fredeka. I appreciate good modes of interaction. We're fortunate that Mr. Bailliers, the former Minister of Economic Affairs and Finance, CEO of OXO Nobel and Deputy Chairman of the Supervisory Board at Shell is available for a job such as this one because he doesn't need the 90 or €120,000. I believe that his remuneration is low given his dedication and time at ING. We saw that there's a serious risk nowadays of default. I believe that his remuneration is low, and I would clearly like to express my appreciation of mister Vayers who does a stellar job. He does fantastic work. Thank you. Are there any other comments? Mr. Jornah. Mr. Jornah from the VEB. Thank you, Mr. Chairman. We're all so happy that you're willing to do this job. I think that chairing an AGM is probably one of the most difficult jobs this year, but perhaps you have other very difficult jobs as well. Mr. Chairman, an increase of one third, And we rightly consider that there has not been an increase since 2011, but you're close to the wage requirement of the FNV Trade Union Confederation. Won't this send a message to others at Hanigan? Because tone at the top sets the tone. So if you're going to say year after year I'm going to allocate myself a 5% increase rather than cumulative 5%, then you exceed a certain level as a supervisory board member. Think that sent the wrong message, especially in The Netherlands. Other companies that you were involved with also experienced this, so we think it's risky. I'll be happy to respond to that if that's desirable. Yes. Proposed increase for supervisory board members can be compared with all kinds of other calculations. Some people say that it's a substantial increase, others think it's very modest. If you consider the growth of the income during the period behind us. That was less than 50%. But if we look at the growth of market capitalization, that equaled 240% in the period behind us. In that case, the increase in remuneration would be low. Obviously, opinions will vary about the most obvious standard for comparison. That's why we took the peer group, so you don't become entangled in numbers but you simply check what's standard for comparable firms in Western Europe. We specifically disregarded The USA because some people object to that. In Western Europe we also omitted a country with fairly high rates of remuneration, that's Switzerland, and then you wind up with a group of companies comparable to Heineken and you reach this conclusion. Once again, we see that this aligns with standard practice in the top Amsterdam Stock Exchange portal. Then I think that the proposal has been realistically substantiated and is even rather low for the Chairman. Thank you. If there are no other questions, I would like to open the vote on this proposal, ladies and gentlemen. Would the voting operator please activate the system? Please cast your vote. The vote is the vote is closed. And this proposal has been adopted with 99.43% of the votes cast in favor. Thank you. That takes us to item four on the agenda, which is the reappointment of Mrs. Laurence Debroux as member of the Executive Board. In accordance with the Articles of Association of the Company and the schedule for reappointment, the Supervisory Board has made a nonbinding recommendation to reappoint Mrs. De Blou as Executive Board Member from April 2019 for a four year term, so until the end of the Annual General Meeting of Shareholders in 2023. The Supervisory Board proposes reappointing Mrs. De Bloux given her international experience, financial background and the excellent way she has performed in her capacity as CFO in the past four years. In the explanatory notes to the agenda, you will have read the information about Mrs. Dubruz and you've seen her in action again today. The supervisory board would like to reappoint missus De Blou as CFO, subject, of course, to her being reappointed to the executive board. Who would like the floor on that? Mr. Jornah. I'm Mr. Jornah from the VEB. Thank you, Mr. Chairman. We're also delighted with the performance by Mrs. De Blues, so we will certainly vote in favor of her. However, Mrs. De Blues was also asked to serve with NOFO wondering, we're asking her whether her duties as CFO of Heineken allow her to be involved with NOFO nor DISC. Second, is the benefit? How will Heineken benefit if she works there? This is pharmaceutical company. Do you plan to start producing chemical beer? Mr. Yornet, those were exactly the questions that the supervisory board asks when such an opportunity arises. Ms. Blue does have this ambition. We have ascertained that she loves to work and has endless energy and efficiency. She's able to do this and has the capacity and is willing. Addition, Novo Nordisk is a particularly interesting company that operates on different markets that are health related and that is structured differently in terms of governance and management and diverse experience also benefit executive board members for Heineken. We believe that Heineken will benefit as well. Are there any other questions about the proposed appointment of Mrs. DeCulle? If not, then I propose that you vote about the proposal to reappoint missus DePoole as executive board member at the company for a four year term, and I request that the voting operator activate the system. Please cast your vote. Voting is now closed. And I am pleased to say that mister Brew has been reappointed. The resolution has been adopted by 99.56% of the votes. Welcome back. Ladies and gentlemen, Item 5A on the agenda. That's the reappointment of Michel de Carre Valhallo as member of the Supervisory Board in accordance with the articles of association of the company and the rotation schedule, the Supervisory Board made a nonbinding nomination to reemployment Mr. Michel de Carvalho as member starting twenty five April twenty nineteen for a period of four years. That's until the end of the annual meeting in 2023. The Supervisory Board proposes to reappoint him because of his broad international and financial experience and his contributions to the meetings of the Supervisory Board, the Americas Committee, the Preparation Committee, the Remuneration Committee and the Selection and Appointments Committee. Any questions? Yes. I am very happy that Mr. Carvalho will be reappointed and is nominated to that end because he made sure Heineken has not been acquired by a third party, is still independent. He is also a Vice Chair at Citibank. And I believe that's a wonderful well, I believe that's a great role to fulfill and a wonderful addition to the Supervisory Board member. He also participated in the Olympic Games, and I believe that's a great achievement. It is important to have a healthy lifestyle. Here's a great thing. He came up with the idea that during the Olympic Games, things could be better. So the Holland Heineken House was introduced, And Mr. Caffaio is also an actor. He played a part in Lawrence of Arabia. And how wonderful if you do have acting skills in this financial world and this beer world. So I believe it's a wonderful addition to the Supervisory Board. Thank you for your commercial supporting Mr. Carfolio. Any questions? Mr. Von Boxmer didn't know about all this, did he? Well, let's vote. Ladies and gentlemen, I request the vote operator to start up the system. And I also request you to cast your vote, and please do not be distracted. Voting is now closed. And I confirm that Mr. Caffallo has been reappointed by 92.6% of the votes. Congratulations. That brings us to Item 5B on the agenda. That's the appointment of Ms. Rosemarie Whitley as a member of the Supervisory Board. In accordance with the articles of association of the company, the Supervisory Board has made a nonbinding nomination for the appointment of Mrs. Ripley as member of the Supervisory Board with effect from twenty five April twenty nineteen for a maximum period of four years until the end of the Annual General Meeting of Shareholders to be held in 2023. She is an American national and fits the profile drawn up by the Supervisory Board. We propose to appoint her in view of her broad strategic and transactional expertise in the fast moving consumer goods industry and several other industries. She is a Managing Director of Engie EN, an early stage growth equity investment firm investing in innovative companies and healthy living. She's independent as defined in the Dutch corporate covenants code, and she does not own any shares in the company. Before I hand over the floor for any questions, I would like to ask Rosemarie Ripley to briefly introduce herself to the meeting. Thank you so much. It's a pleasure to be here today. As has already been said, I'm a Managing Director at NGEN, which is an emerging growth company that invests in growing and innovative consumer companies as well as sustainable products and services businesses. And previously, I worked as Global Head of worldwide corporate development at Philip Morris. My role there was to accelerate the growth of Kraft Foods and Miller Brewing Company. And I also I live in New York as an American and have four children. Thank you. For ACMEI. And I also speak on behalf of ACMEI, EAGEN, APG, Campen Capital Management, Mensis and Rubiko. We are pleased with Mrs. Rupli and her intended appointment and Mrs. Arnott as well. The Supervisory Board now consists of 40% of female members. Diversity is so important and we invite Heineken to really embrace that diversity and share this on the website competencies, skills that these two women definitely bring to the table. Thank you very much. Maybe we won't disclose it on the website, but we are diverse. And diversity goes beyond gender. This is an international group. We believe in diversity and the broadest meaning of the word. We also believe in functional diversity. I don't matter how diverse they are, they should be able to communicate and fortunately that's working out. Mr. Jojna? Jojna, CEB, Dutch Association of Stockholders. Two ladies joining you. Fine. Good candidates. You're very enthusiastic about this. The more women, the better as far as I'm concerned. But here's my question. Nobody stepped down. Are they added to the composition of the supervisory boards or are people maybe leaving, stepping down in the future? Mister Jorn. Maybe you noticed. It is my intention to step down at the end of this meeting. Well, at least some of you are pleased by that and join questions. If not, let's vote on this proposal. So let's vote on the proposal to appoint Mrs. Ripley as a Supervisory Board member, and I request the Vote is now closed. You see the results on the screen. She has been appointed as a member of the Supervisory Board by ninety nine point four percent of the votes cast in favor. So the resolution has been adopted. Rosemarie, welcome to our Board. Then last but not least, 5C, the appointment of Mrs. Ingrid Helen Arnold as a member of the Supervisory Board. In accordance with the Articles of Association of the company, we make a non binding nomination to appoint her as a member of the Supervisory Board with effect from twenty five April twenty nineteen for a maximum period of four years, that is until the end of the Annual General Meeting of Shareholders to be held in 2023. She is a German national. She fits the profile as drawn up by the Supervisory Board, and we appoint we nominate to appoint her a few of her broad experience in the field of digital transformation processes and experience with management of key business processes. She is a President of SAP's Data Network tasked with building a new Data as a Service business for SAP, globally capitalizing on a strong background in leading SAP digital transformations as Chief Information Officer, CIO and Chief Process Officer, CPO. She's independent, and I now would like to invite her to introduce herself to the meeting. You have the floor. So thank you, and good afternoon, everyone. I am very grateful for the opportunity to join Heineken Sports. I'm Helen Arnold. I'm a technology passionate. I worked almost my entire professional life in technology in computer science with SAP, helping businesses of all sites and across all industries really to leverage the full potential in technology. So I know that technology can be an overwhelming place and I'm very happy to act as the sounding board for the digital transformation at Heineken. I thank you for the trust. Thank you. Any questions or comments? I have to say that Ms. Arnold is an independent member as defined in the Dutch corporate governance code. She does not own any shares in the company. And if there are no further questions, I will ask the operator to turn on the system so you can all cast your vote. Vote is now closed, and here are the results. I am pleased to announce that the resolution has been adopted. 99.4% of the votes were cast in favor. Welcome to the Board, and thank you very much. Ladies and gentlemen, this brings me to the last part of the meeting. I talked about my own stepping down and retirement. Maybe I was in denial. I did not want to actually say farewell to Jozsa Der Vysoglu. She steps down today as a member of the Supervisory Board. She was appointed in 2016 as a member, Jozsa. Chaff. I would like to thank you for your contribution to the company. Next to the contribution to all the meetings and your contribution to the Remaration Committee, you have been extremely helpful to the full Board to show us what's going on. Where are you in digital world? And we will never forget the visit that you organized for all of us to Google's headquarters in London. It was a visit, and we met a lot of your exciting colleagues. So thank you very much. We're going to miss you. Please give her your hand. Special day for me as well. I resigned from my function as a member and Chairman of the Supervisory Board. I've chaired the meetings with great pleasure, and I hope Heineken and its stakeholders will do well. I would like to pass the baton. Jean Marc, to you. Thank you. I now close the meeting. And that there are some final words to say. Briefly, I would like to say a few words to you. In 02/2012, you were appointed as member of the Supervisory Board, and one year later, you became chairman chairman of Heineken MB. You fulfilled your role as chairman for the past six years with great energy and commitment and always putting the company first. We at the Supervisory Board are very grateful for having had the opportunity to work with you, and we appreciate very much the way you always created a proper environment to foster and to encourage frank and open debates to find what's best for Heineken. On behalf of the Supervisory Board and the Executive Board, and I think I may say also on behalf of all the shareholders present here, I would like to thank you very much for your great contributions to the company and wish you all the best in your future endeavors. Please join me in giving him a big round of applause. I've never given flowers to to a man, but I will do it today. Thank you, ladies and gentlemen. A couple of practical comments. It doesn't sound very nice, but please leave this room. The general meeting of shareholders for Heineken Holding will start ten minutes from now. So that is 04:25 in the foyer, Third Floor, not this room. So please do leave this room. Take your stairs, take the elevators, the hostess will accompany you to the venue. So return your voting pad. If you no longer need it, the shareholders of Heineken Holding N. V, return your voting pad, but keep the card. They will issue a new voting pad to you and check your card. Again, thank you very much for your presence here today. And I also thank the listeners of the to the webcast. And hopefully, you'll be handed over a beer very soon for you to enjoy. Thank you.

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