Ladies and gentlemen, could you please take your seats so that I can start the general meeting at 1:30, the general meeting of shareholders for Heineken N.V. I'm pleased to welcome you all at the DeLaMar Theater. I'm also pleased to welcome the Heineken Holding N.V. shareholders as observers here. We're in a different room today, I believe that other performers will follow us, Javier Guzman will be performing after us. 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 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. This meeting is audiocast live on the website, I'm pleased to welcome the listeners as well. The meeting of Heineken Holding N.V. will begin at 4:00 P.M. 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, this opportunity has been taken.
I will tell you the number of shareholders who are represented in the vote they're entitled to as soon as the count is complete. Then I can also tell you how many shareholders are present. This meeting is attended by Notary Meppelink of Loyens & Loeff, who will supervise the course of the vote, the voting results and decisions taken today will be posted within a few days on the corporate website. The report will be available within three months and will be posted on the website. Relating to the discussion of the financial statements for 2018 by the executive board, we had the auditors, Mr. Dalhuisen and Vinkhuis from Deloitte Accountants present. I'm also pleased to welcome all press representatives. Ladies and gentlemen, the following is very important.
I would like 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, please state which shareholder that 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, I will indicate who will be answering the question. Once again, this year, we'll be using voting devices. Heineken N.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 coming Heineken Holding meeting.
Some shareholders have cards with two dots concerning both Heineken N.V. and Heineken Holding N.V. They're entitled to vote at both meetings. Those were my introductory remarks. Ladies and gentlemen, on to 1A, 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-François van Boxmeer, the Chairman of the Executive Board. Thank you very much, Mr. Chairman. I'll start with a commercial. This is about the Rugby World Cup.
Brazilië liet een sterke groei zien na de succesvolle integratie van onze twee ondernemingen. Het Heineken volume steeg met 7.7%, de grootste stijging in meer dan 10 jaar. De operationele winst bij A steeg autonoom met 6.4% en de operationele winstmarge bij A was 17.2%, een daling van 17 basispunten ten opzichte van 2017, hoofdzakelijk door de consolidatie van de activiteiten in Brazilië, hogere grondstofkosten gedurende het jaar en een negatieve impact van de wisselkoers. In 2019 verwachten we een autonome mid single digit groei van de operationele winst bij A, dit afgezien van mogelijk grote onvoorspelbare macro-economische en geopolitieke ontwikkelingen. Blijf Nederlands praten, maar met de digits blijft het Engels tussen mid en high. Onze strategische prioriteiten zijn groeigericht, met een toenemende aandacht voor duurzaamheid. We blijven focussen op het creëren van langetermijnwaarde in 2019 en streven naar een superieure omzetgroei.
Op de volgende slide zien we dat de operationele winst bij A autonoom steeg met 6.4%, wat ik eerder meldde. Daarmee bereikte we EUR 3.1 miljard. De sterke groei van de omzet, een hoog bezettingsgraad van onze capaciteit en efficiencies in onze marketing en verkoopprocessen werden deels tenietgedaan door stijgende reizigerslogistieke kosten en wisselkoerseffecten. De consolidatiewijzigingen, hoofdzakelijk in Brazilië en het Verenigd Koninkrijk, wat is dat, Punch, droegen EUR 43 miljoen bij, of 1.2%. Wisselkoersen hadden een negatieve impact van EUR 176 miljoen op de operationele winst. De grootste impact kwam van de Mexicaanse peso (EUR 40 miljoen), de Braziliaanse real (EUR 33 miljoen), de Vietnamese dong (EUR 24 miljoen) en de Nigeriaanse naira (EUR 16 miljoen). In het volgende overzicht zien we dat de netto-omzet autonoom steeg in alle regio's, met een wat sterkere groei in de tweede helft van het jaar, gedreven door prijzen en mix.
Het geconsolideerde biervolume steeg autonoom met 5%. De netto-omzet per hectoliter steeg met 5.2%. We zagen een sterke volumegroei in Zuid-Afrika, Rusland, Ethiopië, Rwanda en Egypte. Dit compenseerde ruim de volumedaaling in Nigeria, de DRC en Ivoorkust. De operationele winst bij A steeg autonoom met 16.2%, voornamelijk gedreven door Zuid-Afrika, Ethiopië, Egypte, Rusland en de DRC. In de regio Amerika's steeg het geconsolideerde biervolume autonoom met 5.4%, gedreven door een sterke groei in Mexico en Brazilië, waarmee de lagere volumes in de Verenigde Staten van Amerika en Panama ruim gecompenseerd werden. De netto-omzet per hectoliter steeg autonoom met 4.2%. In Mexico steeg het biervolume mid single digit en het Heineken-merk leverde opnieuw een sterke double digit groei. In Brazilië steeg onze premium en mainstream portfolio met een sterke double digit volumegroei, gedreven door het Heineken-merk dat met meer dan 1 miljoen hectoliter groeide.
Gedurende het vierde kwartaal werden onze resultaten beïnvloed door beperkingen in de productiecapaciteit en de migratie van platform- en systeemonderdelen in de consolidatie van onze twee brouwerijen in Brazilië. In Asia-Pacific steeg het geconsolideerde biervolume autonoom met 8.2%. Vietnam, Cambodja, Myanmar en Zuid-Korea leverden een double-digit volumegroei. In Vietnam hebben we sterk gegroeid in grote steden en breidden we uit naar kleinere steden en het platteland, gedreven door de merken Tiger en Larue. De regionale netto-omzet per hectoliter daalde met 2.5%, negatief beïnvloed door merk en volume mix. De regio leverde een autonome operationele winstgroei bij A van 3.4%. Ik eindig met Europa. In Europa steeg het geconsolideerde biervolume autonoom met 1.3% en de netto-omzet per hectoliter daalde met 1.8%, gedreven door de groei van premiummerken en innovaties in het low- and no-alcohol segment en in het craft segment.
In het U.K. steeg het totale volume low single-digit, waarbij het Heineken merk sterk groeide. Onze puboperatie in het U.K., na de succesvolle integratie van Punch Taverns, laat sterke resultaten zien die in lijn zijn met onze verwachtingen. In Frankrijk steeg het biervolume mid single-digit, geleid door het Heineken merk, Desperados en Affligem. De totale high single-digit groei en de sterke groei van ons premium portfolio in Italië worden geleid door het Heineken merk en Moretti, het merk uit Sardinië. In Spanje daalde het volume low single-digit door de uitzonderlijke kou en regen. In Nederland steeg de volumes tegen de trend low single-digits, gedreven door low and no alcohol en de craft and variety categories, zijn ze specifiek. De operationele winst bij elkaar in de regio steeg met 4.2% door toplijngroei en goed cost management. Over naar het Heineken merk.
[Non-English content]
Well, that was a nice one, wasn't it? I would also like to reflect on other trends that contributed to our international brand portfolio. 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, Krušovice, Birra Moretti, and Desperados. Cider volume increased to 5.6 million hectoliters. In the U.K., volume increased mid-single-digit, and outside the U.K., we sold more than 2 million hectoliters of cider. Trends concerning responsible alcohol consumption continued to generate new consumption moments for our low- and no-alcohol brands. The volume in this segment increased to 13.1 million hectoliters, thanks to Radler and Heineken 0.0, thanks to lower malt volumes in Nigeria.
Our craft and variety beers increased by double digits, driven by Affligem, which introduced a variety with a lower alcohol percentage. Lagunitas continued to expand to countries outside the U.S. and is now also brewed in our relative breweries in the Netherlands. Here in the Netherlands, and we also are growing brand IPA in the Netherlands. That's a very popular growing brand. In Italy, there's Birra Moretti Regionale, and that continues to post 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 draught beer system that caters to smaller outlets, and we're continuing to invest in our e-commerce platforms, both business-to-business and business-to-consumer. One example would be the Beerwulf platform at the far right.
We have over 300 brands, so I can't show you each and every one of them, but I'd like to present a Strongbow Cider commercial and also of Sol, which is from Mexico, and a commercial for the Italian brand that is from Sardinia.
Die wordt wel gevolgd. Er zijn apparently meerdere items.
Those were a few brands from our portfolio. Now I'd like to talk about China. I'd like to talk about the announcement of our strategic partnership with China Resources Enterprise. 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, please see our announcements dated 3 August and 5 November 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 1.13%. In 2017, it was 1.04%. In 2015, it was 1.38%. 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 of beer 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 C program, our ambition 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 2008, and even 3.2 hectoliters of water 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 Every Drop, our water ambition for 2030 in this case. Last month, we launched this strategy on March 19th, and I'd like to say a bit more about that. In this strategy, we focus specifically on the 26 breweries that operate in area where water and water availability is in jeopardy. Healthy water management is pivotal here because simply efficient water use is not enough. We're 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. 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's some pioneers in that area. Mexico is clearly at the vanguard in this effort. Finally, plastic. Society's becoming increasingly concerned about plastic. A small share of our primary and secondary packaging is made of plastic. That's about 6%. We're working on an approach for dealing with plastic waste, increasing circularity, and the opportunity to reuse materials, as well as reducing plastic wherever possible. 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 as the speaker. As for the trends per 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, and China. Heineken 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 U.K., France, and Italy.
That was my report about the quarterly figures. 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 538 of our Supervisory Board meetings, and you wrapped up at 587. Aside from this anecdote, I would like to thank you very much on Laurence and 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. Both boards have benefited greatly from us, as had many other people in the company, and we are deeply grateful to you.
Thank you for these kind words.
Thank you for these kind words. I can make a mess of things because I've already been thanked. Ladies and gentlemen, I'll be very dedicated in running this meeting. We're going to discuss the report on the 2018 financial year, which aside from the presentation just delivered by Jean-François, you'll find it on pages two through 45, and the sustainability review appears on pages 119 to 154. Please note that the Remuneration Committee of the Executive Board will be addressed at item 1B on the agenda, not now. No questions or comments about that at this stage, and the same holds true for the financial statement. That's item 1C. It's addressed there.
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. You don't have to climb over the knees of your fellow shareholders if you're seated in the middle of a 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. Kranenburg. I work for MN Asset Manager for pension funds. I also speak on behalf of Aegon Investment Management, Aegon Asset Management, Kempen Capital Management, MN Services, and Robeco. 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 0.0, 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 referred to those targets earlier. This is what we've observed.
Carlsberg, AB InBev, their targets are more ambitious, so it seems. A question, these targets that you referred to earlier, do you plan, do you intend, similar to Shell, Unilever, Aalberts, 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 Hague rules imposed on the operating companies include human rights policies.
What deficits, shortfalls are there in making those companies responsible for human rights policies and the execution of those policy? 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 us as 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. Don't mix things up. 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 100% in 10 years' time?" 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. 2030, maybe the board will be held accountable. You make promises. You could not deliver on your promises. We want to have targets. 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. 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.
The person sitting there at this table right then, we can move the goalposts. That's what we intend to do. 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. We looked at the targets. We believe they're ambitious. Last year was only 14% in renewables. There's a huge gap to bridge. It requires investments, partnerships. Some countries progress way more quickly than other countries. 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. 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 targets. 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 targets of 70% earlier, the better. As we did before, after eight years, we met our targets. We achieved our milestone, and we moved the goalposts. That's our ambition. 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. 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 build a brewery in Mozambique, and there was a mistake, it wasn't green enough. It is not green at all, the next one. It takes a lot more to actually put together a building that is green. Mexico, it's a very green brewery. It takes time, and it has to take time to make sure that sustainability is a sustainable part of culture. We are in a process, 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 rights 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 the 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. 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. 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. Brand promoter immediately conjures up negative images. Could we ask ourselves that question? Should we quit with brand promoters? That's the end of all fuzz about this. 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." You need to look at both sides of the medal.
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. 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. We must continue to sell beer. We can't quit selling beer. That's what a brand promoter does. 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, 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. 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. Maarten, 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
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, the change, to the shareholders meeting so they can vote upon it. Should we include a sustainability company in the long-term incentives? Not yet. Ladies and gentlemen, let me know about the share capital represented here today. 81 shareholders are present here today. 52 shareholders are represented, and they vote through the internet. 23 shareholders. 56 shareholders in total. You see a concentration of Heineken shares. The 1,456 shareholders hold together 506,783,464 votes, and 88.5% of the votes are represented. We have 25 shareholders of Heineken Holding, and they're here as observers. Let's take questions from the mic. You are first. I'll give the floor to you.
Thank you very much. Max Heineken, [Foreign language] pensioeigenaar. I have four brief questions. A retired Heineken employee. The China operations, 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? Growth caused by takeovers, acquisitions. Last question, what's your situation in Mozambique? Thank you.
Thank you for 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. Apparently, it caused confusion. I like that. A little bit of confusion.
China. The operation that we have in China will be consolidated in our book until the date of the closing, which we hope to happen in this quarter. After that, it will be not fully consolidated, but we will have a 20%. We will actually take part of the results of the operation in China. We will contribute our own operation into CR Beer operation and consolidate 20% of the results. It hasn't changed for now because the transaction has not closed.
All right. They should get only dividends? Is that correct? We only get dividends.
In the future, we'll get two things. First of all, there is an agreement to license the Heineken brand to start with, and maybe further brand in the future to the operation in China. We will get, in the future, a royalty. Of course, in the beginning, it will be mostly reinvested in growing the brand, in developing the brand in China. You will see a royalty moving forward. 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.
Thank you.
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. 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&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 demonstrate that we are bringing the right level of support behind our brands. Behind the growth of EUR in percentage, it's important to see what we're actually delivering for the brand.
Right.
We feel confident that we are not sacrificing anything in terms of that support for the brand.
Okay. This question was input by an analyst who told over the years, I know before the Heineken marketing expense were very high, sky high, always. An analyst, he pointed out, that's why the question is it true? Or is it fake news?
Maybe another thing is that digital used to come on top of the traditional marketing and support behind the brand, and now it's a little bit replacing. 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.
Thank you.
Your third question was the growth of Heineken. We don't single out the growth of Heineken 0.0, but what we can say is that even if you take out Heineken 0.0, this is still the best performance of the brand over a decade. I would say the Heineken classic is also performing very well.
No, my question was the autonomous growth for the total company, not especially for the brand. The total company.
Oh.
That's the question.
Oh.
Not only a brand.
Oh, the growth of the revenue globally is 5.9% for the year?
If that was the question, yeah. Mm-hmm.
I ask, was it only organic growth?
Yes, absolutely. Sorry.
You can buy.
Absolutely
other, buy takeovers or something like that.
No, absolutely. This is organic growth, this is the autonomous growth of the company. That excludes the impact of currency and excludes the impact of integration, of consolidation. This is really the autonomous growth.
Okay.
Mozambique.
Yeah. Every year we always talk about the autonomous growth, and we publish also what the absolute growth is and 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. If you look at Heineken over a period of 20 years, 40 years, we keep on adding markets. Our raw material is just markets. That leads me into your question about Mozambique. It fits in our African strategy that we try to open a new market every year. The good news about Mozambique is, and we never did that ever before, we built a brewery in one year, which is a record time.
The brewery was around EUR 85 million of an investment, to give you a little bit the size. It employs 200 people locally. We started to sell sourcing from South Africa, which is "next door" already in 2016. That is, we prepare that. We learned a little bit out of the Côte d'Ivoire that you better start selling before you build a brewery, and then you can build a sales team. It takes a lot of time. Mozambique fits in our Africa growth story. It is next to South Africa, where we are currently very successful. We are already in Namibia. This was the next frontier, and I let you guess what could be the next and the next frontier in that corner of the world. It is a 30 million inhabitants country where they drink only 10 liters of beer. The urbanization is only 30%.
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 growth. Tomorrow is about next year till five years and then five years and beyond. The Mozambique project is, of course, for tomorrow and the day after tomorrow. The whole dynamic lies in the fact that a country like Mozambique will urbanize more and more like we see in many countries in Africa. With the deployment and the development of middle classes, this is where beer consumption starts to move from 10 to anything between 60 and 90 liters per capita in some countries. That we don't know. Africa, 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. Mozambique is part of that strategy. The start went very well, I have to say. It started off well.
Thank you for your answer.
Thank you.
Thank you very much for your answer. Good afternoon, ladies and gentlemen. My name is [Robert Fagan], and I am part of [reconnect to public relations and investment]. Mr. Van Boxmeer, congratulations on your outstanding results. 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 0.0, and Heineken is well-positioned to achieve that. They sponsored Formula One racing. I suggest we replace all commercials for Heineken 0.0 because driving a car combined with 0.0, that's the best combination. The Champions League is a perfect vehicle. Sports plus Heineken 0.0. What a wonderful fit. The greatest news is to have Heineken 0.0 in [inaudible] 25." You advised me about [Robert Arcos], right? Perfect fit again.
Talk to the communication department. Humberto Tan, a host at television, joined me. He drinks 0.0. He's a TV host, right? The commercial had already been recorded, but the film is not yet ready. I have a request for you. Humberto Tan and I, can we please go back again? Can we see how we can actually get 0.0 part of it? Heineken 0.0 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 Wildlife Fund, the Red Cross. That combination, that fits, makes this a wonderful choice for Heineken 0.0 sustainability, corporate responsibility, all rolled into one. I'm also talking to Esther Kuijpers of your organization. You want heated seats. It saves 95% in terms of energy. Use Heineken 0.0. 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? 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 WakaWaka. That's a personal solar panel. Heineken 0.0 combine it with solar. 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. Fagan], 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 involved in it, but do realize, please, the market in which we operate for non-alcoholic beverages. Spain is the best developed market.
10% of all beer consumption is alcohol-free. 90% is still alcohol-containing beer, it levels off at the 10% in Spain. It's a lot higher than any other country in the world. For us, our target as a first step is, if it can happen in Spain, we can reproduce this elsewhere. Maybe we can go restore to 0.1, 0.2, 0.3 or something like that. What we should avoid by only advertising with Heineken 0.0, 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 don't want to dictate that choice. People have that choice. Yes, our large sponsorships do include the 0.0, but we won't make it exclusive.
I talked 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, he actually put forward the idea, "Use us. Support the pilots, the drivers, to make absolutely clear, do not drink and drive." I think I showed it to you last year, Jackie Stewart, he is offered a beer, and he says, "No, I'm still driving." He gets into this wonderful Aston Martin. We have a commercial with Nico Rosberg. He's offered a 0.0, and he still says, "I'm still driving." You can look at it both ways. 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 0.0, and that's our strategy.
I'm looking forward to make that commercial with Humberto Tan. I think that's a wonderful idea. 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. We're doing it, but we did not make a news item out of it. We're not behind. We didn't publish this. Do realize this, we are not producing our energy in the Netherlands using renewable energy. We're still burning coal to run electric cars. Please use some common sense and be careful in what we say 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. The WakaWaka, 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 Klompemaker. 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 [Mr. Monkle, a fellow shareholder, 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. I'm a bit concerned about that. You've received a writ of summons with a +EUR 100 million claim for damages and
gross comparing that with a gross profit of nearly EUR 400 billion, that's not so impressive. Excuse me, a gross profit of nearly EUR 4 billion, excuse me. 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? 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 consequently, 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 a 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. 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 one private party against another private party. 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 and disputes that unless-- if I could add one comment, we'll talk about provisions later on when we discuss the financial statements as to whether a provision was taken. Taking a provision needs to meet very specific requirements, and perhaps Laurence can elaborate on that. Otherwise, we'll hear more from our auditor.
Yeah, I was just going to.
Okay. Merci.
add that we have, of course, a review of all the attack and litigation, and we do that on a very regular basis. 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. 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. 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. At the end of the day, we take this responsibility to put something on a provision and something not.
At the end of the day, this is 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 is Denise Rijcken, and I represent the VBDO. That is the Vereniging van Beleggers voor Duurzame Ontwikkeling, or in English, Dutch Association of Investors for Sustainable Development. Our principal aim is to make the capital market more sustainable. This is why we're here, like in previous years, to compliment Heineken with the most recent sustainability achievements. At the same time, we also like to point to issues that we see could affect the company and its prosperity in the long run. 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.
There are other things related to climate change, such as the rise in extreme weather conditions that we believe can affect the prosperity of the business in the medium and long term. 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've done this. 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. Here I would, well, first like to compliment 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.
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 minimum wage is not upheld or very low wage is paid. That's stated on page three of the human rights policy. We're wondering, while we want to compliment you very much with this provision, similar to our colleague asking a question before, how do you seek to audit this part of the human rights policy? Are you already aware of any suppliers that represent a risk when it comes to this provision of your human rights policy? As a final question that regards the Sustainable Development Goals, the SDGs.
You've already defined priority SDGs as Heineken, we're very pleased to see that now you're in a process of redefining your sustainability strategy for 2030. What we're 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. Will we see that the 2030 sustainability strategy is aligned with these Sustainable Development Goals? 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, our supply chain is looking at that, where you have situation. We look at that with universities because we don't not necessarily have the scientific knowledge and background to really place that in a thing. For our operations to be fair, this is not the highest risk at all, extreme weather conditions in itself. What is for us the 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 thing. Call it climate change.
I don't know how you have to call it, that is a thing that we have to address, whereby an industrial operation is by far not the biggest user of the watershed you are, but you are often seen as the symbol of it. That is what you have to manage. There is only one way, that is forward, and it is in dialogue to try to solve this problem. Extreme weather conditions for us means essentially that, otherwise than that we have been conducting talks with universities about floodings and stuff like that. 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 water scarcity.
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. 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 important question. It took us time to formulate the way we wanted to go about it, I remember your questions from the previous year, 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, WageIndicator, which we use because it's actually the right. You need to look outside when there is no regulation that helps you look at people who look at a number of countries and provide benchmark. 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 suppliers.
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 hundred thousands of suppliers, and you cannot audit everyone the same way. By the way, not every type of suppliers carry the same risk because of the country they're based in or because of profile and history. 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. This new supplier code is being rolled out. Our ambition is to have completely rolled it out by the end of 2020.
We are starting by rolling it out with every new supplier. In the selection of new suppliers, this is really taken into account. With every supplier that comes to renewal in terms of contract. 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. We're also learning as we walk. 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 took some years for most of the companies that operate internationally adopt the SDG as the commonly acceptable framework of policy setting and direction. You're not working on all 17 all the time and in the same intensity. That is a choice for everybody. The beauty of it is setting a direction, and it is for every actor in the world on this planet to fulfill a part of it. I looked up in the documentation, but it starts to be a little bit schoolish, but if you say that the example is Drop the C, 2030 target, 70% renewable energy, that is SDG 7. Okay? Sub-target 7.2 renewable energy, that is where we concentrate on. This is the way of doing.
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. I think it is spending time into getting the direction. You will never be able to measure totally the 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. Thank you. I'm André Jorna on behalf of The Dutch Association of Stockholders. Yes, I waited a long time, you didn't ask the second round, I guess I'll be able to take the first and the second round together. That's why I waited and in the last to step forward. Mr. Chairman, as an Ajax fan, I like to hear the Heineken tune at the Champions League. It's the perfect commercial, I'm delighted to hear the Heineken tune when the Champions League plays. I hope we don't have people who support Feyenoord 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 acclaimed as a brilliant move.
For years we've been asking you, why are you not active in China? 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 billion net from what I understood, perhaps that will be made more explicit later on. You will pay 21.6 times the value of the company based on 2017 of CRB. Your own entrepreneurial value is 12.9, you're paying into your price. If you compare that at 3%, you're paying EUR 57 million a year. Now, if you look at the profit of CRB, that takes you to EUR 31 million. You're losing EUR 26 million 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 looking 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 billion purchase? That's a specific question, I'll be grateful for a specific answer now. Hygiene in Chinese breweries leaves 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 in some exotic Chinese-named beer? That's another very simple question. The second element, perhaps concerning everything that's been said about the promotional ladies. I understood 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 items 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 the media, were sacked. Is that true? If it is true, why didn't you stop that? The Brazilian brewer, Cu idem, 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 manager 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. I'm getting a very diffuse impression there. The United States is also a difficult market. AB InBev is growing by leaps and bounds. How are you going to match what AB InBev 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. Wijers, we have to make that 4:00 P.M. deadline. Have you acquired a share in United Breweries?
I think it was EUR 7.4 million. What is your present holding in United Breweries? Can you obtain a seat on the supervisory board there, and what do you plan to do with that brewery? Do you want to increase your share over time? Thank you. Yeah. The Chinese business model is based on dividend income and royalties. The 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 make 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. We're going to sell those three breweries to CRB. They have 98 breweries. They sell 115 million hectoliters throughout China. They have far more distributors and more salespeople 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. We're not going to elaborate on the details or the timeline. We're convinced this will work. 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 CRB, 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 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. Of course, we will retain our knowledge in China, and 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.
You do the Nigeria and ABI and UB. I do the difficult thing about RSA.
Of course, you and I read the papers, and 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 logistic 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, and our opinion may be that they're low, 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, the logistic partner that we work within South Africa is Imperial. That's one of the largest companies in South Africa. It's a renowned company, but it's very labor intensive. Sometimes there are internal issues there too. 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, the beer volume decrease 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. If you look at the first quarter of 2019, which we just published, there is an increase in those volumes, but we are comparing ourself with a very bad first quarter last year. We're still quite prudent in what we're saying. I would say we're cautiously optimistic, very cautiously optimistic about the volumes in Nigeria. You also had a question about margins in Brazil, which I can take. We did integrate, in May last year, a company that was loss-making.
As a former operation of Kirin in Brazil, Schincariol in Brazil. We integrated them into our own Brazilian operation, which was actually at a margin, which was mid to high single digits%. There was a very quick turnaround. 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, these three to five years in terms of cost of capital will be much faster than that. In terms of profitability, we are already after the first full year, 2018, into double digits% in terms of margin. This is very positive and this obviously come from the very fast development of the premium part of the portfolio as well as a mainstream plus part of the portfolio. Heineken volumes as well as Amstel or Devassa.
Devassa actually coming from the portfolio that we acquired, added more than 1 million hectoliters in 2018 to the overall volume at better margin than the rest of the mainstream and value portfolio. At the moment we integrated, we did integrate a large volume with a lower average margin. There was a step down in the average margin. 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. 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. 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 U.S. 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 U.S., 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. We don't compete with ABI in terms of mainstream brands in the U.S. Perhaps that answers your question.
Well, I read the following. In the U.S., the market is challenging, all parties are dealing with that, not just Heineken. That's correct. InBev, Budweiser, well, it will be given a boost by the Super Bowl commercials. They see the effects. Budweiser right now is increasing their turnover, their sales. Are you looking at this? Do you think to yourself, "Good luck, competitor"? Or do you say to yourselves, "If they're shaking the tree with Budweiser, we need to step up our game with Lagunitas, right? We have that as a craft beer. 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.
It is sold at a higher price than Budweiser, 40% difference. It does not have the same scope as Budweiser. Budweiser is the Heineken of the Netherlands, if you will, and we cannot measure up to it. Our success in the United States is premium beer segment. Lagunitas is not Heineken USA, it is separate, and that is craft beer. It is rather successful. The craft segment in itself decreased also in the United States. Lagunitas 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. Yes. We increased our market share, 43%-44%. We do not have a majority. It is not market share, it is share percentage, 43%-44%. It is still partnership. There is pressure on our partner. There are legal developments. Our partner is held liable. It is beyond our control.
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 are actively engaged. We have our brands, Heineken, Amstel. Those are the two pillars in India. On the other hand, it is about organizing a complex supply chain in India. It is difficult. A lot of water-stressed areas. We do work together in that sense or are facing similar things as United Breweries. 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. Jorna. I have some final comments.
OXXO, I do not know how you pronounce it in Spanish, but you have a deal with them, and you also have the FEMSA convenience stores. FEMSA is present here today. Here is my question. If you look at that deal that you entered into, brands other than Heineken, will they be sold in the convenience stores? You have a contract for five years. First question, how much did you pay for the contract? Is FEMSA not shooting themselves in their own foot? They are here. They are in favor of Heineken share. They are part owner of OXXO. We cannot discuss any FEMSA items, and we will not share the details of the deal in terms of price paid with you. In brief, this was a transaction similar to other transactions. Delhaize, Tesco, Metro, a long-term contract ended. We renegotiate the contract a year early.
It is a renegotiation, a renewal of the contract. What is 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 is impossible. We are aware of that. Both of us are aware of that. This is a contract that we entered into. Not talking FEMSA, but it is a good contract for Heineken and OXXO, for both of us. I will now move to 1B. Mr. Jorna, you encouraged me to be brief, I will stay brief. We will now move to 1B of the agenda. That is about the remuneration policy for the Executive Board, explained on pages 52 to 60 of the financial statements. Before we discuss that, I will give Mr. Das 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. Four, fair pay. The first principle, support 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 incentives, we also have a leadership and a sustainability target. Second principle, 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.
For the financial target, there is a lower threshold and an upper limit as well. These performance levels go hand in hand with a pay varying from 50% to 200% of the target level. Performance below that target, there is no additional pay. During the last item, the executive board provided an explanation of the results of the company in 2018. In accordance with the principle, performance-based pay, 2018 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 2 cases, the performance was between target and maximum level, and in 5 cases above.
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 the threshold and the 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 2016 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. Companies that are comparable to Heineken.
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. 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 EUR 735,000 to EUR 850,000 a year.
This increase to the medium level of the worldwide peer group fits within the remuneration policy. It depends on the reappointment by your meeting of Ms. Debroux of the supervisory of the Executive Board with retroactive effect starting on the 1st of January 2019. The CIO median pay did not give the reason to the Supervisory Board to adjust the salary. Fourth principle, pay fairly. This implies that all employees of Heineken, Executive Board, and all layers below that are consistently paid in accordance with the market. 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. 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 pay 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. 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. 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 like Heineken by just taking the Netherlands or just taking the Executive Board, it seems random. We included all pay components as paid actually and not. This approach is followed by many other listed companies that is listed on the AEX. Pay 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. 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, et cetera, 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. Well, that is all we can do.
It follows from the methodology applied that the pay ratio are decreased by 8.65% approximately from 215 to 98 for the CFO, and that is basically because of a decrease of the value of the long-term incentives variable pay for members of the Executive Board. That was my explanation of this item of the agenda. Thank you. Any questions? Mr. Jorna,
Of course. 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. Van Boxmeer, 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, 2018 compared to 2017, you see a EUR 1 billion decrease. The explanation for this, I think you're misinterpret a couple of zeros. Well, we agreed to share, didn't we?
Well, maybe for EUR 1 billion we would have, but right now it's debatable. I actually mean EUR 1 million. A million is a lot of money in my coffers, so it doesn't matter what's in a zero, EUR 1 billion, EUR 1 million. Can you explain why the long-term incentive is EUR 1 million 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. Targets are set for all of those elements and all of those criteria, and when the targets are met or above that, well, you end up in a calculation that is above the target performance. 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 the difference. We exceed the 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. We are talking pages 61-118 of the financial statements, plus 155. The financial statements were audited by Deloitte, and you'll find their opinion on pages 156-162. Before discussing the financial statements, I would like to give the floor to Mr. Dalhuisen of Deloitte. Chair, there are a couple of relevant items on this slide. I summarize. The materiality was EUR 200 million. That's 7% of the profit before tax. That's comparable to the materiality applied last year. I must add that the underlying opco level had a lower level of materiality.
Just to be clear, all of the costs that had an effect of more than EUR 10 million on the results are reported to the Audit Committee and the Supervisory Board. A 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 size. 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. 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. I love to perform in a theater, Chair. 10 questions, but I will only ask one. How about that? 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 10, 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 1.0%, America 3.2%, Brazil 0.2%. You're doing so well there. But this is the period 2022 to 2028. 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, we see for Africa, Middle East, and Eastern Europe, you use an interest rate of 19.2%-33.8%. We looked at Inbev. 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." 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.
Of course. What you have on page 82 are the assumption that we retain when we do our long-term valuation of our goodwill, we assess the value of the goodwill. 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. What we usually do is we use our own assumption for our own business for the first three years. Here, the growth that we use is a growth that we see in our own business. Then we use actually external data in terms of forecast of the overall market. 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.
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 a country by country, risk per country. Of course, this reflects interest rates, but it reflects the risk per country. We also validate that with external sources, banks, for instance, at least once a year, this is a range. When we operate in a country that is considered to have a high country risk, if we evaluate the value of a business, we also need to take that into account. That doesn't mean that will preclude us from investing, because of course, we're also betting on countries getting better over time.
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 asset also, taking very conservative assumptions in those cases.
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%. 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. 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. These are the standards we must apply for an impairment test. We can talk about it forever, but we don't set these figures.
For the impairment test, they're your assumptions, not what an institution does. You support their assumptions. You agree, and the auditor agrees. I have a question to the auditor. Do you indeed agree, or do you hide behind these figures given by some institute? If I look at the AB InBev 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. When you're going so far in time, it is actually more prudent to take market assumptions than to take an assumption of your own overperformance. 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. In terms of the business, there are many things playing. You can actually make forecasts for the next three, five, 10 years. At some point, in order to calculate the perpetuity and out of, I would say, it's 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.
How do you then explain the percentage? You're very careful, super careful if this is your calculation basis, the WACC. That means a higher risk premium allocated to certain countries. Yes, but I compared this to AB InBev, and they're around eight, nine, 11. Why would you have concerns? Maybe I should be worried about AB 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, wonderful country. Moving on to the next question.
That could be Mr. Spanjer. Mr. Wijers, don't you remember my name? That's very sad. On Tuesday, I saw you, and they sent you into retirement. You're smiling, but they did put you out to pasture. 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? They can say anything they like. Is the auditor allowed to take a look in those books? They probably apply entirely different accounting rules than we do in the West. How did you solve that problem? I get your question. My second question is that 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. It's not in the 2018 accounts. If you look at CR Beer, CR Beer is a fully owned subsidiary of a company listed in Hong Kong. They have their own auditors. 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, 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, there can be conversation, and that is how it's usually done when you take a position of that size.
I think it's a bit strange that you're answering this because the auditor would speak with his counterpart accountant in Hong Kong in some way or another. The next question is, auditor brings the people he wants, but he doesn't bring licensing experts because you're paid for licenses. How is that checked? 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 Heineken controls the brewing process. That's a reasonable access, Mr. Spanjer. We brew licensed Heineken in many countries. I haven't counted all of those countries, and some are more complicated than others, but we do know how to audit that process. Thank you. Is there anybody else waiting at the microphone? No, it's dark. There's nobody there.
We have completed that round of questions, ladies and gentlemen, and we are going to open the vote. We will be doing this through the voting handsets. Would the voting operator please activate the system? If not, we will need to vote the old-fashioned way. First, let us see how the system works. We assume it works. As soon as you have inserted your voting card in the voting handset, you will see a welcome message and your name. These would be voting cards without a yellow dot inserted with the gold color chip facing upward towards you. As soon as the voting has been opened, you will see the choices on the screen for casting your vote. If you do not 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.
Has anybody raised a hand because their voting handset is not working? Please raise your hand clearly. Either nothing works or everything works. I will assume that everything works. I am an optimist by nature. We will agree as follows. If you want to vote in favor, press on one, if you want to vote against, press two, and if you wish to abstain, press three. If that is all clear, ladies and gentlemen, this vote is now open. The voting is closed. The vote is closed. I see, ladies and gentlemen, that the decision to adopt the financial statements for 2018 has been adopted, 99.82% of the votes was cast in favor. Thank you. 1D. That concerns the dividend policy. The policy of the board is to propose a dividend each year equaling 30%-40% of the net profit.
This guidance aligns with the strong and sustainable cash flow generating capacity of Heineken and matches the principles of the company to retain our independence and a healthy balance sheet structure, 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, 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? 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 EUR 1.60 per share, equally 37.6% of the net profit.
EUR 0.59 was already paid on 9 August 2018 as an interim dividend, the final dividend of EUR 1.01 per share will be payable from 8 May 2019 at the ABN AMRO Bank in Amsterdam. From 29 April this 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 an amount of EUR 1,512 million, will be added to retained profit for equity. Who would like to ask any questions about this topic? If nobody has any questions, we will vote about whether you are willing to set the dividend at EUR 1.60 per share. Would the voting operator please activate the system? Please cast your vote. The voting is closed. The vote is closed.
I see that 99.86% of the votes has been cast in favor of the dividend proposal, which is hereby adopted. Ladies and gentlemen, on to 1F 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 am a specialist in the discussion. Nobody? Okay, we will open the vote. I request the voting operator to activate the system. Please cast your vote. The vote is closed. I establish 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 1G 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. Mr. Spanjer, you have the floor. Mr. Wijers, you don't have any other business on the agenda, so I am 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. 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. Spanjer, 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 vote is closed. I note that this proposal has also been adopted with 99.51% of the votes cast in favor. 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 2A, which 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 18 months from 25 April 2019 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 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 18 months starting from 25 April 2019 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 has been granted. Now on to 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 18 months starting from 25 April 2019 to restrict or exclude shareholders' preemptive 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, you've granted this authorization in recent years as well. Who would like the floor on this topic? Nobody. 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. 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. Maarten Das, who chairs the Remuneration 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 the 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 as Heineken. 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 1-tier board structure and one-third with a 2-tier board structure. This peer group ensures that the derived remuneration levels are also appealing to international candidates, 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 this to firms with a 2-tier board structure. 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 of Euronext Amsterdam 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. The proposal is for the remuneration of the Supervisory Board members to be increased from EUR 60,000 to EUR 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 EUR 250,000 a year for two-tier boards, and it is 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 is why we propose applying the same increase for the Chairman, that is to say, €30,000 as the proposed increase for the members.
To increase the remuneration for the Chairman from EUR 90,000 a year to EUR 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 am Mr. Frike. I appreciate good modes of interaction. We're fortunate that Mr. Wijers, the former Minister of Economic Affairs and Finance, CEO of AkzoNobel, and Deputy Chairman of the Supervisory Board at Shell, is available for a job such as this one because he doesn't need the EUR 90,000 or €120,000. I believe that his remuneration is low, given his dedication and time at ING Group. 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 Mr. Wijers, who does a stellar job. He does fantastic work. Thank you. Are there any other comments? Mr. Jorna. Mr. Jorna from the VEB. Thank you, Mr. Chairman. We're also 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. We rightly considered that there has not been an increase since 2011. You're close to the wage requirement of the FNV trade union confederation. Won't this send a message to others at Heineken? Because tone at the top sets the tone.
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. I think that sends the wrong message, especially in the Netherlands. Other companies that you were involved with also experienced this. We think it's risky. I'll be happy to respond to that if that's desirable. Yes. The 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%. 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 U.S.A. because some people object to that. In Western Europe, we also omitted a country with fairly high rates of remuneration. That's Switzerland. 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 Euronext Amsterdam quarter. 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 voting is closed.
The vote is closed. This proposal has been adopted with 99.43% of the votes cast in favor. Thank you. That takes us to item 4 on the agenda, which is the reappointment of Ms. 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 non-binding recommendation to reappoint Ms. Debroux as Executive Board member from 25 April 2019 for a 4-year term, so until the end of the Annual General Meeting of Shareholders in 2023. The Supervisory Board proposes reappointing Ms. Debroux given her international experience, her financial background, and the excellent way she has performed in her capacity as CFO in the past 4 years. In the explanatory notes to the agenda, you would've read the information about Ms. Debroux, and you've seen her in action again today.
The Supervisory Board would like to reappoint Ms. Debroux as CFO, subject, of course, to her being reappointed to the Executive Board. Who would like the floor on that? Mr. Jorna. I'm Mr. Jorna from the VEB. Thank you, Mr. Chairman. We are also delighted with the performance by Ms. Debroux, so we will certainly vote in favor of her. However, Ms. Debroux was also asked to serve with Novo Nordisk, and we are wondering, we are asking her whether her duties as CFO of Heineken allow her to be involved with Novo Nordisk. Second, what is the benefit? How will Heineken benefit if she works there? This is a pharmaceutical company. Do you plan to start producing chemical beer? Mr. Jorna, those were exactly the questions that the Supervisory Board asks when such an opportunity arises, and Ms. Debroux does have this ambition.
We have ascertained that she loves to work and has endless energy and efficiency. She is able to do this and has the capacity and is willing. In 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. So we believe that Heineken will benefit as well. Are there any other questions about the proposed appointment of Ms. Debroux? If not, then I propose that you vote about the proposal to reappoint Ms. Debroux 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.
The voting is closed.
Voting is now closed. I am pleased to say that Ms. Debroux 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 is the reappointment of Michel de Carvalho 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 non-binding nomination to reappoint Mr. Michel de Carvalho as member starting 25 April 2019, for a period of four years. That is 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 Preparatory Committee, the Remuneration Committee, and the Selection and Appointment 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's also a vice chair at Citibank, and 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 the great thing. He came up with the idea that during the Olympic Games, things could be better. The Holland Heineken House was introduced, and Mr. Carvalho 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. I believe it's a wonderful addition to the Supervisory Board.
Thank you for your commercial supporting Mr. Carvalho. Any questions? Mr. Van Boxmeer did not know about all this, did he? Well, let's vote. Ladies and gentlemen, I request the vote operator to start up the system. I also request you to cast your vote, and please do not be distracted. Voting is now closed. I confirm that Mr. Carvalho 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. Rosemary Ripley as a member of the Supervisory Board.
In accordance with the articles of association of the company, the Supervisory Board has made a non-binding nomination for the appointment of Mrs. Ripley as member of the Supervisory Board with effect from 25 April 2019 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's a managing director of NGEN, an early-stage growth equity investment firm investing in innovative companies and healthy living. She's independent as defined in the Dutch Corporate Governance 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 Rosemary 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. Previously, I worked as a global head of worldwide corporate development at Philip Morris. My role there was to accelerate the growth of Kraft Foods in the brewing company. I live in N.Y. as an American and have four children.
Thank you. Yes.
Louise Kranenburg, AM.
I also speak on behalf of Achmea, Aegon, APG, Kempen Capital Management, MN Services, and Robeco. We are pleased with Mrs. Ripley and her intended appointment, and Mrs. Arnold as well. The supervisory board now consists of 40% of female members. Diversity is so important, 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, we are diverse. Diversity goes beyond gender. This is an international group. We believe in diversity in the broadest meaning of the word. We also believe in functional diversity. No matter how diverse they are, they should be able to communicate, and fortunately that's working out. Mr. Jorna. Jorna, VEB 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. Here's my question. Nobody stepped down. Are they added to the composition of the supervisory board, or are people maybe leaving, stepping down in the future? Mr. Jorna, 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. Jorna.
Okay.
I propose to stay serious till the very end. Let's see if there are any other questions. If not, let's vote on this proposal. Let's vote on the proposal to appoint Mrs. Ripley as a supervisory board member, and I request the operator to turn on the system so you can indeed cast your vote.
Voting is closed.
Vote is now closed. You see the results on the screen. She has been appointed as a member of the supervisory board by 99.4% of the votes cast in favor. The resolution has been adopted. Rosemary, welcome to our board. 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 25 April 2019 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 nominate to appoint her.
In view of her broad experience in the field of digital transformation processes and experience with management of key business processes. She is President of SAP's data network, tasked with building a new data-as-a-service business for SAP, globally capitalizing on her strong background in leading SAP digital transformations as Chief Information Officer, CIO, and Chief Process Officer, CPO. She is independent. I now would like to invite her to introduce herself to the meeting.
You have the floor.
Thank you. Good afternoon, everyone. I am very grateful for the opportunity to join Heineken's board. 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 sizes and across all industries, really to leverage the full potential in technology. I know that technology can be an overwhelming place. I'm very happy to act as a sounding board for the digital transformation at Heineken. Thank you for the trust.
Thank you. Are there any questions or comments?
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. If there are no further questions, I will ask the operator to turn on the system so you can all cast your vote.
Voting is closed.
Vote is now closed. 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 Yonca Dervisoglu. She steps down today as a member of the Supervisory Board. She was appointed in 2016 as a member. Yonca.
To the Board, 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 Remuneration Committee, you have been extremely helpful to the full Board to show us what's going on. Where are you in the digital world? In a digital world. We will never forget the visit that you organized for all of us to Google's headquarters in London. It was a great visit and we met a lot of your exciting colleagues. Thank you very much. We're going to miss you. Please give her your hand.
Special day for me as well. I resign from my function as a member and Chairman of the Supervisory Board. I've chaired the meetings with great pleasure. 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. There are some final words to say.
briefly would like to say a few words to you. In 2012, you were appointed as member of the Supervisory Board. One year later you became Chairman of Heineken N.V. 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. 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, 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 a man, but I will do it today.
Thank you, ladies and gentlemen. A couple of practical comments. It doesn't sound very nice. Please leave this room. The general meeting of shareholders for Heineken Holding N.V. will start 10 minutes from now. That is 4:25 P.M. in the foyer, 3rd floor. Not this room. Please do leave this room. Take your stairs, take the elevators. The hostess will accompany you to the venue. 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. I also thank the listeners to the webcast and hopefully you'll be handed over a beer very soon for you to enjoy. Thank you