Heineken N.V. (AMS:HEIA)

AGM 2017

← View all transcripts

Apr 20, 2017

Ladies and gentlemen, good afternoon. It's 1:30, and I hereby declare Heineken N. V. Annual General Meeting open. I'd like to welcome you all at the Delamar Theater. I'd also like to welcome those shareholders that are still alive of Heineken Holding, and they're here attending this meeting as observers. Allow me to start with a number of housekeeping announcements. You're kindly requested to switch off your mobile phones or to put them on silent mode. We will be speaking English from time to time, which is why we are offering you simultaneous interpretation. And you can use the headphones. You can choose channel 5 to listen to English or 4 to listen to Dutch. Those of you with a hearing impairment can also use the headphones, but then you'd have to choose channel 0. The meeting, as stated on the website, will be webcast. So I'd like to welcome all listeners in all corners of the world. The Heineken Holding N. V. Meeting shall start at 4 o'clock or later, depending on the ending time of this meeting. If you want to turn this into a very long meeting, we might have a problem because that's when the regular program of the theater starts, consisting of slippers or hair. And there's no logical connection meeting. I confirm that the meeting was convened on Tuesday, 7 March, 2017 by publishing a notice on the Hayne liquor website. The record date for this meeting is March 23, 2017, which means that shareholders who were registered as shareholders on the record date are entitled to attend and vote at this meeting. The registration method is stated in the notice of the meeting on the website. I also confirm that the agenda of the meeting is included in the notice of the meeting, and the notice of the meeting states that the agenda and accompanying notes, the financial statements and annual report and the information referred to in Article 392, paragraph 1 of Book 2 of the Dutch Civil Code have been published on the website and have been made available for inspection at the company's offices. And furthermore, that all the formalities for convening this meeting, as required by law, or the articles of association have been complied with. And so therefore, valid and due resolutions can be adopted on all matters announced. The shareholders present or represented have submitted acknowledgement of receipt from the institution administering their shares. And that the company has offered the shareholders the possibility of issuing a voting instruction via Internet and that this possibility has been used. I shall inform you later on of the number of shareholders, number of votes as soon as we've completed the count. This meeting is also attended by notary civil law notary Mepling of Lawyers Alouf NV who will be supervising the voting. Resolutions adopted today and the results of the voting shall be published on the company's website in a few days and shareholders can obtain the minutes of the meeting from the company. They'll be available within 3 months of the meeting and shall be posted on the website. In connection with the discussion of the financial statements 2016 by the Executive Board, the meeting should also be attended by the company's auditors, Mr. Van den Bergh and Mr. Nana. There they are, the right hand side for me, of the Deutsche Canton's BV. And furthermore, the meeting is also attended by representatives of the press. I would like to extend my welcome to all of them as well. And then in conclusion, by way of introduction, I would request anyone who wishes to speak during the meeting to use one of the 4 microphones here in the room and to state his or her name as soon as I've given him or her the floor. I would also request everyone speaking as a representative of a shareholder to state which shareholder he or she represents, and I reserve the right to limit the speaking time of each speaker if the progress of the meeting so requires. It wouldn't be necessary if you are concise and ask questions and go on and on. You can address your questions to me, and I shall then decide who will be answering those questions. And then finally, I would like to inform you that this year, once again, we'll be using our voting handsets. You've got to pay attention now. Shareholders of Heineken NV have blank voting cards without a dot and obviously converted this meeting. Shareholders of Henneken Holding, N. V, who are attending this meeting as observers, have a voting card with a yellow dot. And this card can only be used at the Heneka Holding meeting. And then we have an extraordinary category, which is the And then we have an extraordinary category, which is the shareholders with 2 yellow dots. They are shareholders of both Heineken V and Heineken Holding N. V, and they can both at both meetings. Right. So this was the introduction, ladies and gentlemen. We shall now proceed to Item 1A of the agenda, which is a report for financial year 2016. And before we discuss this report, I would like to hand over to the Chairman of the Executive Board, Mr. Jean Francois from Box Muir. Thank you, Mr. Chairman. Allow me to briefly discuss the performance of Heineken. I've prepared a text and that way I shall leave sufficient time for your questions and obviously the answers. Let's proceed to the first slide. The performance in 2016 was good and this is due to the premium brand portfolio that grew out performed the beer market as such and also the momentum, sustaining the momentum of our innovation agenda. Operational organic profit growth, Bayer, increased by 9.9%, and this despite tough economic conditions in some emerging countries and significant currency pressure in a number of countries. For 2017, we expect a margin improvement in line with our previous medium term prognosis and this including any possible impact of large unforeseen macroeconomic and political developments. The impact of the proposed or intended acquisitions in Brazil and the U. K. Have also been excluded from the figures. The next slide here you see that operating profit in 2016 amounted to €3,300,000,000 Consolidation impact ensuing from acquisitions the previous year had a positive effect of €40,000,000 which amounts to 1.2 percent of the growth. Fluctuations in currencies had a negative impact. Operating profit was impacted by €216,000,000 It was reduced. And this was particularly due to the decline of the Mexican peso, which had the greatest impact followed by the Nigerian naira and the British pound. Excluding consolidation changes and currency translation impact, the operating profit increased with an impressive 9.9%. And this deserves a number of additional observations with respect to costs. On organic base, the cost of raw materials and also packaging increased by 10.8% in 2016. And cost increased more than revenues mainly as a consequence of disadvantageous currency fluctuations, Mexico, Brazil and Nigeria, once again. On the other hand, we saw a smaller decrease of operational costs because of stricter cost management. And then the repair and maintenance costs declined as well as cost of energy and water. The focus on costs allow us to generate an organic growth of operating profit of 9.9%, as I said, which means that we have an operating margin of 17%, which is 54 basis points higher than in 2015. I shall now proceed to the regional overview. The results show that the unique and widespread presence of Heineken as a corporation led to well balanced growth. Most regions showed healthy growth, Offsetting part of the lesser results, Africa, Middle East and Eastern Europe. Let's start with the toughest areas. The beer volume in Africa, Middle East and Eastern Europe remained under pressure because of challenging macroeconomic conditions and low oil prices nonetheless, Ethiopia and export to Africa offset the weaker volume in Russia. The Democratic Republic of Congo and Egypt operating profit dropped by 21.2%, which was negatively impacted by mainly fluctuations fluctuations of currencies in those countries, increase of raw material prices and also inflation costs. In the Americas now, the organic consolidated beer volume increased by 3.7%, driven by strong growth in Mexico. This growth was greater than the decline of volume in Brazil and the U. S. Last year. And our Mexican brands are the main growth factors headed by Decate and Dos Equis. By and large, the region showed strong operational profit growth, Bayer, of 23.5%. Asia Pacific now. The momentum still is excellent. The result is a growth of organic consolidated beer volume of 17.9%, and revenue per hectoliter dropped by 3.7%, and this was impacted by the country mix and brand mix. To put it in straightforward terms, we sold more Tiger than Heineken at slightly lower price, But overall, the result was very, very positive. In Vietnam, volume increased double digits and driven by strong results of the Tiger brand and good and effective marketing and sales force that is deployed there. Region leads to a strong operating profit growth of 26.5 percent, once again on the back of Vietnam, but also very strong results in Cambodia and Indonesia. Europe now. The organic consolidated beer volume increased by 0.7%. Growth was driven by a premium portfolio led by the Heineken brand that increased by 4.3%. Revenue per hectoliter increased by 1.4%, and this was despite the deflationary price pressure that we see and experience in off trade. In the U. K, the volume increased in low single digit terms. And single digit terms is the English words that I'm using because there's no Dutch word for that, driven by good results in off trade, which is the supermarkets. Off trade is supermarkets in Dutch. And our pub business also contributed to excellent results this past year. Operating profit increased organically in Europe by 7.1%. And this is driven by innovations and successful premiumization, that's what it's called. But that means more beer at a higher price sold at a higher price and higher margin and a disciplined cost control. Now let's zoom in on the Heineken brand. Heineken volume in premium segments increased organically by 3.7% worldwide with an accelerated growth in the second half of the year, 4.7%. Growth in Brazil, South Africa, Mexico, U. K. And Romania offset the weaker volumes in Russia, the U. S, Thailand and Greece. The value of the Heineken brand was once again supported by successful campaigns around the UEFA Champions League. And very recently, the beginning of the year, we extended our sponsoring contract for UEFA Champions League till 2021. We also engaged in a close cooperation with Formula 1, offering us the opportunity to reach new consumers worldwide and also offers opportunity to deploy a very strong campaign around responsible drinking, and it's called When You Drive, Never Drink. And you'll see that all the sponsoring of Formula 1 will show the When You Drive, Never Drink campaign. 2016, we launched a number of premium innovations such as the White Lager beers aged 71 and 41, introduced in a number of European markets, aged 41 in the Netherlands, Great Britain, Italy and H71 in France. Well, I could go on and on for an hour about the background of H41 or H71, but very concisely, wild lagers means Heineken beer, which is then to which a yeast a wild yeast is applied, a wild yeast that we harvested in Patagonia, the trees in Patagonia. And with that, we made beer with a different taste starting from the same liquid, but with a different fermentation, a different yeast, you get a different taste, a different flavor. So wild yeast beers, and so therefore, the volumes are very small. HEYNEKEL LIGHT was introduced in Ireland, New Zealand, and we're still testing it in Greece, Switzerland and in Austria. We introduced it under the name Heineken 3. Heineken Lite or Heineken 3 actually is the same kind of beer, a lighter beer. Both names are used for this product. And as you may have seen in the beginning of this year, we introduced Heineken 0 in the Netherlands, and it will also be rolled out over the next few months in several European countries. And then in addition to our Heineken brand, we also have an extensive portfolio of other international brands. And these brands have great potential in order to be successful several regions. We don't want to have them everywhere worldwide, such as Heineken, but they can be introduced in other countries. That would be after themselves premium, Lagunitas, Red Stripe, Tenkate, Tiger. All of them have grown double digit this past year. Desperados, Crucivico, Czech Republic and Amstel showed excellent growth. And obviously, we're still very excited about cider, and I'll tell you a bit more about that later on. I shall now proceed to our first advertisement. You may have seen it here in the Netherlands. We've been showing it in the Netherlands since February. It's on TV. And it tells us the story of how Heineken was set up at the time of Gerard Heineken and how it got its first award for quality. It just goes to show how the Heineken worldwide adventure started by first exporting to Paris and how in those times Heineken really was a craft brewer. No, that is it. Okay. That's about our wonderful, delicious, clear Heineken. Now, on to the next sheet about innovations. Well, that's firmly embedded in our strategy and our mindset within Heineken and the way we achieve revenue growth. I'll start with cider. That's on the sheet. We continue leading the Cider market. And in the U. K, our market share continued to grow since thanks to many different brands. And outside the U. K, our Cider profile posted double digit growth in the Middle East, South Africa, Russia and Eastern Europe. We had positive growth in Cider. Mexico delivered the highest contribution to Cider growth in Americas and in Asia Pacific. Strombo is now available on 5 markets. And we're pleased with the first results. So clearly, we're rolling cider out to the world. This may take us 15 or 20 years. And we're the leader in a relatively small market, which we hope will expand. A second innovation category is low and no alcohol. So without alcohol or with a tiny bit of alcohol, we still see great potential in this segment of low to 0 percent alcohol containing products, the volume for 2016 in our portfolio was 12,300,000 hectoliters, which is substantial. These products directly address moderation and create new drinking moments for our brands. And we're going to continue investing in the future. And Craft and Variety or rather specialty beers, that's another very important segment. And I spoke previously about the H41 and H71. These two exemplify this type of beer. It's a craft beer with the wild yeast from Heineken. And there are other specialty beers such as Morrisey, Bit in Belgium or Bira Moretti in Italy, where there are all kinds of regional line alternatives that we launched as well as in several brands such as Brant here in the Netherlands, where we offer more flavors than Pils beer alone. And that's what consumers want. At the same time, Lagunitas, which we acquired the previous year, rather we acquired a 50% stake in America is going international and has been launched on several European markets here in the Netherlands, France, the U. K. As well as Mexico. And we're also innovating draft beers and we see positive options for our new draft system as well as Brew Lock, which is an innovative draft system is posting good growth. Of course, you don't know what the BrewLock is. In plain English, it's a plastic vessel that cannot be recycled, but can be deposited to PET recycle. And in export to long distance countries, that's a great tool for exporting beer. And it also retains the freshness of beer over the long term. Now a bit about sustainability. Sustainability is integral to our work style. It's not simply a sideline in our operations. We call it brewing a better world. And this year, for the first time in our annual report, We've complemented our financial report with a sustainability report in a single report. We've merged them. Examples include the KPIs in water and energy consumption. That's traditional. And we're setting new targets with respect to the upcoming 2021 cup. And we also address responsible alcohol consumption. There's a limited amount we can do, but we need to do what we can. 1 of our commitments is that 10% of all our media spending on Heineken will be spent on campaigns that send a message to mitigate alcohol consumption and in some cases not to consume alcohol. So we've got a nice video illustrating that when you drive, never drink. Very good. That's from Jackie Stewart. As you can see, he was very supportive in helping us make this commercial. He's very sincere. We did this together with him. And he still drives. And that's his car. We'd all love a car like that, wouldn't we? Now before we wrap up, I'm going to tell you about our 2 ongoing acquisitions. I'll give you a little bit of news about that. The first acquisition we announced is Quiran Brazil. And that will transform our existing business and to help us leverage synergies in Brazil and will help us start a premiumization platform so that we can sell more beer in Northern Brazil. As a consequence of the transaction, we expect to conduct Heineken will be the 2nd beer brewer in Brazil. In keeping with our strategy of either being ranked 1st or a strong number 2 in countries where we offer a broad portfolio. And this reinforces our underlying position at 1 of the most important beer markets in the world with vast potential for future growth, even though Brazil's economy is presently in some difficulty. Yesterday, when we published our Q1 figures, we publicly stated that we intend to use the distribution network of Kyron Brasil to leverage our combined business in the future. This acquisition will contribute to the earnings in 2017 and the transaction is expected to be done and dusted in the first half of this year. The second acquisition concerns Punch Taverns in the U. K. We've also announced that. And given the U. K. Takeover panels rules, I'm very limited in what I can tell you here. But I have the following remarks that in keeping with a cash offer for Punch Taverns by Vine Acquisitions, we've reached an agreement with Punch with Wine Acquisitions for the Punch Tavern Section A, Punch securitization A. So it's Vine that is making the cash offer. And they have a 1900 itempug portfolio. We expect for the time being that the transaction will close at the end of August 2017. Let me wrap up with the highlights from the Q1. Consolidated beer volume rose organically by 0.6%. Our balanced geographic distribution We changed good growth in Asia Pacific, solid growth in Europe and weaker volumes in Africa, Middle East and Eastern Europe. Heineken brand volume was up by 2.5% and was once again ahead of the group's overall beer volume, which posted growth of 0.7%. As for expectations for 2017, They are unchanged. Thank you very much for listening. And I'm going to hand you back to our Chairman. Thank you, Jean Francois. I would still like to tell you a bit about who is present and represented at this general meeting. The attendance sheet reveals that we have 87 shareholders present and that 66 shareholders are represented. We have 1257 shareholders voting online, therefore, a total of 1410 shareholders comprising 500,805,509 shares, entitling them to an equal number of votes, 87.9 percent of the issued capital. And at the meeting, we have 31 shareholders from Heineken Holding NV present who are observing this meeting. We will now discuss the report on the 2016 financial year, which you'll find in our annual report on pages 1 through 49. From the Executive Board report, you'll find the sustainability report on pages 135 to 150. Please note that the implementation of the Executive Board's remuneration policy, Section 2 of the remuneration report is on pages 50 to 58. That's agenda item 1B afterwards and the financial statements will also be addressed at item 1c, which you'll find on page 59 and further. Ladies and gentlemen, for those of you who are frequent flyers, if I see, I see many familiar faces here in the room. It was an excellent tradition for me to give Mrs. Stadtlander the floor first. I am deeply sorry to tell you that on 19 November of last year, Mrs. Stadlender passed away. For the past 30 years, she attended Heineken's general meetings and was always interested and involved shareholder and asked detailed questions each year and had a very constructive style of asking the questions. We will deeply miss her. And I would also like to give you to Laurence de Bruu, the CFO of the company, about this sad subject. Laurence? Thank you. I would like to express my deep respect to Mrs. Schachlander. I first met her in this room in the General Assembly in 2015. And then a few months later, we had lunch at the Heineken offices. And beyond her deep knowledge of the industry and her very good questions, she also shared with me her own story and how she had to struggle in her time to reconcile her career and also the education of her daughter. And I found that both very touching and an example of courage also for my generation. So I will always remember her very fondly, and I want to thank her. Thank you, Val. Ladies and gentlemen, then we are really going to give you the floor about item 1A on the agenda, so remuneration policy and then the financial statements will be the following items. Who would like the floor about 1A on the agenda, the report on the 2016 financial year? I see a lady who could be highlighted a bit at the right of the room. You have the floor. If you state your name and tell us who you represent, we'll be off to a wonderful start. Good afternoon, Mr. I'm Helen Coorsa. I work for MN, the Asset Manager for PME BMT and Pension Fund COPE per day. Regarding this agenda item, I'm also speaking on behalf of Triodos Investment, Achmea Investment Management, MenSys and Ehon Investment Management, BV. Thank you for elaborating on the annual figures and the strategy. We're delighted to hear that Heineken has wrapped up 2016 with a positive result. And we were also interested to learn about your recently published integrated annual report and sustainability report for 2016. And we're delighted to congratulate you on the publication of this first integrated report, which as far as we're concerned shows that you aim to embed sustainability further in the business. We are delighted at this vision and pay you compliments on that. As for strategy, we have two questions. In the risk management section of the annual report, we read that an increasing share of the revenue in emerging markets is growing. You explained this. Heineken has exposure in emerging markets among others in Brazil. What I'd like to know is, can you say whether you see a future for Heineken in terms of expansion and opportunities in emerging markets? And following up on that recently, upon opening the Abidjan brewery on the Cote d'Ivoire, you said you saw wonderful opportunities for the company in Africa. Can you tell us how, while levering on these opportunities, you'll strike a balance also with a view to averting corruption and human rights violations. On sustainability, of course, we have questions as well. And we greatly appreciate that Heineken has adopted most of the 2020 targets from the brewing a better world and you're on track. And for 2,030, you seem to be in line with the U. S. Sustainability development goals as well as the Group 21. So my questions about that are as follows. In your annual report, you mentioned a price climate. And you say that you'll double your efforts in reducing emissions. Can you tell me specifically what you mean by this? And the Paris Climate Agreement assumes a 2 degree path and is aiming for energy transition. Have you identified climate risks, including risks related to the progressive drought. BWWF, as you indicated in the annual report, has identified 13 additional risk areas where you may have a risk of water. Can you manage these risks properly? And have you quantified your current targets? And are they sufficiently ambitious to be compatible with the Paris Agreement climate targets? My final question about sustainability. We would like to know your future vision in drafting the ambitions for 2,000 and 30. You mentioned that you want to contribute to the sustainability development goals and you have selected 11 specific targets. Can you explain in what measure the SDGs will be an entirely new perspective? Or will you simply tighten the existing sustainability targets? And I have another point to that, human rights policy. For some time, you've had a human rights policy employee, and we appreciate your drafting a plan in keeping with the United Nations Guiding Principles and that you aim to draft guidelines for your company and operations accordingly. Can you tell me about your human rights action plan in keeping with your recent GAAP analysis? Thank you. Jean Francois. Well, that's quite a list of questions. I will try to answer them 1 by 1, and I'll try to be as specific as possible. Your first question, you're basically talking about the risk and reward in emerging markets. Where the market grows, there are emerging markets, but they also entail the greatest risk. If you consider risks from a Western perspective, that's reality and that's inevitable. North America and Western Europe or Europe are hardly growing in beer consumption. The rest of the world is growing and that's because there's population growth and urbanization and in most of those countries, economic growth as well. So that's a positive development spiral. We should continue seeing the glass as half empty rather than as half as half full rather than as half empty. However, things can go awry now and then. As you know, last year, we took a huge impairment in the DRC because we had hoped that revenue would rise there. And 5 or 6 years ago, when we started building extensions and renovations in that country, we had tailwinds. And we thought the country is finally emerging from its problems. But unfortunately, that was not to be. So we had to take a substantial impairment on new capacity. The capacity is still there, but it's doing poorly on the books. So we are considering and assessing those risks, but the essence of our operations happens and will continue to happen in emerging markets. And if we don't do that, Heineken will no longer have a raison d'etreuse. So, we have to accept greater risks. And it's important to cope with the risks. That's also why it's so important to spread the risks. Things can go awry everywhere. You don't have any urine at Heineken where nothing goes wrong anywhere. But we do try to invest in spreading that risk. And we will continue investing in saturated markets because they're a good foundation for our business, including over the long term. And as you see from the results in Europe, they're still growing. It's more moderate than the emerging markets, but nonetheless, it's growth. But we have to strike a balance in our investments. So we have to take care not to become dependent on one country that might jeopardize the entire group if that country ran into problems. That's our ultimate constant strategic assessment together on the Heineken management team. You had a second question about the opening of our brewing Abidjan. Africa remains one of our spearheads. Africa is not doing as well. That's been the case for 2 years. Before that, we had 10 to 12 years of continuous growth in Africa. That was wonderful. For the time being, we continue to believe that we have a wonderful future in Africa, but it's in dribs and drabs. And we have to deal with those. Think of Nigeria, think of Egypt and think of the DRC. It's a rocky ride. There are some countries in Africa that are doing very well. One is Ethiopia and Cote D'ivoire is another one. Cote D'ivoire was a monopoly thus far and there's now competition over the course of the 6 months that we've been operating there. In Cote d'Ivoire, we've obtained nearly 20% of the market. So that demonstrates that it has potential it also has potential for something new. And we offer that in Cote d'Ivoire as for corruption and human rights. We have a business code of conduct. And that clearly stipulates no corruption. Full stop. In those countries, you have to keep calling people to order and you have to keep refreshing the training because people all face a lot of pressure. It's not a situation where somebody works for his own brewery and simply waves a bag of money. There are people who will own the brewery and say, if you don't give me a pot of gold, you won't get a permit. That's the problem. So you have to train people to have the courage to say no and to act against a group such as Heineken has a lot of patients who are in it for the long haul. And in our present world, most of these emerging markets welcome investments from Heineken. So, it's not that bad, to be quite honest. As for human rights, violating human rights, well, there are some countries that we wouldn't invest in. North Korea is one of them. That's obvious. There is some other countries where we do invest, and occasionally, we see reports of human rights violations. They're occasional. They're not systematic. We need to take care not to participate in those in our companies, but we have a limited scope because we're a commercial operator. We're not the UN. We're not the Dutch ambassador in a position to state you're allowed to do this and you're not allowed to do that. But the company does have to make clear what's acceptable and what is not. But in some situations, our opportunities for response are limited. I did have to add that. Next, you had a question about the climate targets. Yes, COP21 and the sustainable Development Goals are all headed in the same direction. And we were going down that course long before COP21. But COP21 calls for the next step, And we're working on that. As we have targets for 2020, we'll also issue targets for the next decade, and we're hard at work preparing those targets. You asked a specific question about water scarcity. In several countries, we face water shortages. Some parts of Nigeria or Mexico, where we have large breweries as well as in areas with water shortages, such as India. And at those companies, we have specific plans to do more than the targets that we set on average for our firm as a whole. We aim to go above and beyond those targets. I don't know all the figures for each brewery off the top of my head. Of course, I'm getting old, so I need crib sheets. Recently, I visited our joint venture in India. India is not entirely controlled by Hanneke. We have 21 breweries, and some are in areas with a serious water shortage. And there, you find consumption about 2 liters of beer. That's very low. And in some breweries, they've even tested it to give more water than used. And that's because you've got soil. And during the monsoon period, the soil has captured some water. And there are large funnel shaped basins to send to divert that water back into a hollow area. That's an interesting development where the brewery not only uses the water and purifies it, but it also channels rainwater back to the soil water. That's a fascinating trend that I saw in India and I thought, well, if we could do that in several areas of Africa as well, then that would be very worthwhile. There's a lot of new technology heading in that direction. And it's an advancing insight about what you can accomplish. I think that globally, the world is on the right track, but we need to stick with that course. It's very important to us. Next. I think I covered all questions. In the first section. In the first section. Mrs. Rosen, are you satisfied risks? I'd like to know in what measure you're able to manage these risks. You didn't answer that yet. What do you mean by manage them? That's a very general word, but what specifically do you mean by managing the risks? In your view, because of course, you're very dependent on water management. So if there was a water shortage that could seriously impact production, climate risks do not only relate to water use, they also concern stability in the financial system. So that might have consequences for your factory sites. I get it. We haven't encountered cases where at a certain site, the shortage became so acute that our operations were in jeopardy. But we do have to look ahead in the areas where we work. And that relates to the technology I mentioned for India. That's essential because we're not operating in isolation there. We use water, but the people living there use water as well. So you need you shouldn't see the water study only for the brewery, but also as it relates to the surroundings. But thus far in managing the risks, we haven't encountered anything that would lead us to decide to shut down the brewery. 2nd, when we set up a new brewery, we do conduct an extensive water management study before opening the brewery. But quite honestly, we did that 20 years ago as well because you can't always anticipate what lies ahead in the next 20 to 30 years. So you might not get it right because of course, breweries are built to last 50 years. But thus far, we have not had that experience. As for human rights, often we do this in conjunction with NGOs to see how we can approach the problem best. There are a few examples where we have a due diligence conducted by external parties that was in Mexico or Myanmar or Nigeria. And you can have an opinion, but you need to let others take a look at your operations to judge, and we've been doing that for several years already. Okay. I propose that we give another person the floor to ask a question. I see isn't that Mr. Jorna? Yes. Who do you represent again? Well, I shall state it loudly and clearly. The VEB, the Association of Stockholders and particularly the smaller stockholders. We're not representing Ms. Heineken. I don't think she's a member of our association, Ms. Cavallo. I don't think so. Anyway, thank you, Mr. Chairman. Let's go back to the business at heart. Kiran Brazil, you're acquiring that. It's been lost and incurring for a couple of years. You're acquiring it for a quarter a third of the price you were prepared to pay for it a couple of years ago. So it's a bargain, I think. So that was good actions on the part of Mr. Voxmere. So that's a good thing. Kieran is trying to adjust to the market. Are you taking over someone else's problem child? That's my first question. And now that you see that the Kieran brands are at the bottom in the mainstream and the really bottom layers, the economic brands, I mean, you failed in China. And if you go too far I mean Premier you're fine, but if you go too far towards the bottom of the market, don't you think this is an issue that you might be acquiring a brand in which you can't really make any money? Because so far Heineken has been doing fairly well in Brazil ABF or AB Inbreth in Brazil. We all know that. Did poorly in Brazil, punch the acquisition here. You're doing this through a joint venture, Finns. Why don't you acquire it in a back to back structure? Why don't you buy it the whole of it instead of the 933 pubs or would you otherwise end up having trouble? Can't you comment on that with in view of the CMA, the authority that is investigating this? Well, these pubs are quite tired, quite old, and you'll be the owner of the real estate, I think. Will you also have to foot the bill for paint and remodeling these properties in order to refurbish them? And how much more is this going to cost in addition to the cost that you already incur? Kirim, you say, is contributing to profit. Well, I think that's surprising in view of what I just said, but I'm sure that you have a better idea of what's going on. And what about the pubs? Are they also contributing to the profit in 2017? This takes me to India. India is a sleeping beer giant, enormous population, but they're not drinking a whole lot of beer there. But United Breweries, Kingfisher is the brand there. And the other owner of the company, I think you own about 43%, 44%. The other owner is under pressure, a lot of pressure because of the airline, Mr. Malia, I think it is. I hope I'm pronouncing his name properly. Do you still have the right of first option should he be forced? Or should the Indian government take over the shares? Do you have the first right of option to turn your participating interest into a controlling interest? Rumor has it that you will be bidding or are bidding on Coca Cola beverages in Africa, which is also a large distribution network, €3,200,000,000 in the books. Do you still have enough money to be able to do that? And then particularly also against the background of the privatization of SABICCO in Vietnam. Vietnam is your flagship and privatization is what's going to happen there. So can you also bid there in order to defend your market? So these are all questions against the background of something you said I believe last year that the combination AB InBev is not something you're fearing for in your market because not that much is going on, not that much is changing. Some Japanese have a quite a bit, but they have this big cash flow and so they have much more momentum. Don't you think if you hold these developments, aren't you facing the restrictions that Heineken has, the restrictions of the holding and the NV? I think that your hands are tied in that respect or am I completely wrong here? And then the last one, and this was the best one I could come up with. Aflachem, great beer, delicious. The thing is that your brewing license will only apply as long as there are monks. The eldest monk is 92, and the youngest one is 73. How are you going to solve that problem? You might have to call on sponsors to try to convince men to become monks. The latter was not you trying to apply for a job. No, no, no. I'm happily married. Yes. Well, we're going to ask the CFO to answer some questions so that we can distribute our responsibilities a bit. I'm going to make all the frustrating answers where we cannot say anything. And then Jean will tell you a lot of very interesting things on the others. We never comment on rumors on M and A. So, I mean Jean might say something about markets, but on whether it's on the rumors on Coca Cola or what's happening in Vietnam, definitely we will not say anything on those rumors. There is one other place where we cannot say much, a bit more but not much, which is the U. K. Because as you know, we're still submitted to the Takeover Panel rules, and there is a very stringent rule, which is called Rule 2.7, which our lawyers have reminded us once more before that meeting and that we basically cannot say more than what is in the press release. What we can tell you is the very good experience that we have with the estate of pubs, so the star pubs and bars that we have been running for a few years now and that we are we remain convinced that with well invested pub in good location, you actually make a very good business for a company like ours. So this is what also explained our intended move in that respect. And definitely, yes, it is a back to back, which matches our business objective on those pubs. Maybe on Kyorin. Here, yes, here we can say much more. Kyorin, yes indeed has been Kyorin Brazil has been a loss making venture. It's also been a venture that has been restructured and then some assets have been impaired in the past. We see definitely synergies there and maybe also because it's been loss making and we've looked at it in thorough due diligence. We also see a wonderful synergy in being able to distribute further our successful premium brand on this market. You know that without even the network of Kirin, we're able to bring Heineken the brand Heineken to 2,000,000 hectoliter and to a fair share of the premium market, which we contributed to really create and develop. We were still quite weak in the North, Northeast, and that is where the bulk of the network that is where Kirin is very strong. So we see a lot of potential here for our premium brand. And we also see a lot of potential for Amstel, which was launched last year, already did last year 500,000 hectoliter and is growing very fast. And you know that backdrop the economic backdrop has been difficult in Brazil. But even in that environment, both Heineken and Amstel continue to fly in terms of volume growth. So we are very enthusiastic to be able to bring it to also regions where we were not present. And we feel there is a really strong potential. As for the Skin brand, we really looked at it during due diligence, and we consider it's a brand that has retained strong equity. So we are quite confident that there is potential for this brand in a market that is the 3rd beer market in the world and which it's always difficult to say that the market has reached the bottom, but we do feel that everything is in place for this market to grow again. So yes, maybe not the easiest of time, but that's also when you're able to acquire and make a success out of a new acquisition. Thank you, Laurence. I think it's a very good description of the situation. And I would add that Skin that is a mainstream brand Brazil, stronger than the mainstream brands that we ourselves have. So the parallel to China doesn't really hold water. In China, we only do premium volume. We do a tiny bit in Hainan, in mainstream. And indeed, it's not doing very well, the mainstream volume. A year ago, we decided in China to withdraw from all our joint ventures, Kingway and Dafarao. So the entire mainstream in China is what we are dodging now. So that's what's going on. We have all our brewery capacity in China with the exception of Hainan because that's on an island. But in China, all our brewery capacity is focused on brewing Heineken just Heineken and a tiny bit of Tiger. But Heineken is growing even in China, more than 2,000,000 hectoliters as well, and the Heineken brand is performing very well. Our strategy for the time being in China is to concentrate on the Heineken brand, just as we had been doing for a number of decades in the U. S. So that's China. Your question about India. Well, your description is more or less correct. Everybody can read what's going on in the newspapers. The thing is what I would like to say is that this does not affect the business of United Breweries in India because the business management is professional. It is a listed company. It has a supervisory board with several gentlemen and ladies, independent directors from the Indian world of business. We ourselves are a member of the supervisory board, and it's a company that is simply doing very well. And all these developments around our partner are hardly affecting what's going on in India. And then the priority right. In principle, we have a priority right, but we would have to exercise this right whenever we may exercise this right. I mean, we don't control that. For the moment, in our partnership with Mr. Maglia, we have never encountered any problems. I'd like to underscore this. It's been an excellent partnership. The number of shares that he has or the companies that he has in United Breweries are now held by banks. And when these banks proceeded to proceed to sale, we would be a preferential candidate to purchase the shares at fair value. This is being regulated in India. The stock exchange in India has very strict rules for these processes, but we can only sit back and be passive in this respect. I mean there's no plan. At the time it was 2009 that we started this joint venture. It's continuing to be a joint venture that has a major part of the beer market in India. We look at India as being one of the most promising beer markets in the longer future long, long term future. And for the rest, you were talking about rumors about CCBA. Well, let's leave it at that. As you know, I'm not going to comment on rumors here today. Rumors or things that may transpire in the market, I'm not going to talk about that neither here nor in the press or in any capacity. And the same, of course, also applies to Sibeco. Your question as to whether our structure is an impediment for further acquisitions, well of course you can always ask that question. But so far, we have never encountered situations in which Heineken's structure and the fact that Heineken Holding controls Heineken was any form of impediment for our strategy. In our strategy, it is not our purpose to become the number 1 in the world in terms of volume. Our purpose is to grow there where we operate. We want to be a number 1 or a strong number 2, strong runner-up. But we do want to be a world leader in premium brands leading with the Heineken brand. That is our strategy. That is what we're concentrating on, and we're looking out for opportunities. And from time to time, we start up greenfields, start in new breweries with new brands as we just did in the Ivory Coast. And we see many growth possibilities organic, non organic in the future for Heineken to turn it into a very, very healthy company. I would like to draw your attention to the fact that for 'twenty, we have an average earnings per share growth of 10%, which is quite an honorable performance. I don't think the structure is any kind of impediment for strategy. And the last question because you are immediately going to go on and on about the structure and we can have a debate on that. But African, you asked a question about African. If ever I retire, I shall become a monk and that will save all of us. No, seriously, the contract. The brand indeed is the is owned by the monastery, and the monastery will continue to exist. And the trademark rights that we have are eternal. So that's all part and parcel of the deal. Chairman, I was saying this. In the context of the merger of AB and InBev together, the leverage of 5 times cash flow, you don't want to talk about it, but there are a number of investment opportunities for you that were referred to in the press. Now if you add it all up, you will surely have problems with the banks because the banks are not going to be prepared to lend the money. So you have to make choices. And at the end of the day, you'll have to pay with shares. And I'm looking at the Carvalho family. And I'm just wondering whether there's enough money to have a FEMSA structure with shares. Well, I propose that we just take cognizance of this observation, which as such will be reflected in the minutes and that we proceed to the next person who would like to ask a question. Good afternoon. My name is Robert Fraker of We Connect U Public Affairs and Investor Relations. It's always an enormous pleasure to attend this meeting because Mr. Van Boxmeer is always such a good listener and each and every year engages in an excellent dialogue. And every year you proceed one step further. And this is really a great year because in 2014 I asked the following question. I said, can we have Heineken 0? Is that possible? The answer was there shall never be a Heineken 0. Well, obviously, that was terribly disappointing. You'll find it in the minutes, by the way, 2014. Well, that's like Trump, isn't it? It sounds like Trump. Well, if it sounds like Trump, I would have to repeat it 3 times. Heineken 0 is great. Heineken 0 is the best, but that would not be enough honor for you to refer to Trump. But anyway, now it's like a sort of lecture on your part. Anyway, I'm really, really pleased that you launched the product because a friend of my son's, Flores Villart, he had 4 beers and had an accident. His skull has been repaired with 4 screws. And I have a picture of him sent to your secretary. Last year, we were talking about Nico van der Leyva. I work for the cancer institution, and I talked to the CFO and said I'm going to do about this. Now the medical perspective, 10% of the population is suffering from excessive consumption of alcohol, and you see this happening in 25% of the families, which is why I'm so pleased with Heineken 0. Sports and alcohol drinking don't go together. So my specific question, are you prepared to consider to replace all the Heineken advertisements in the Champions League and to replace it with Heineken 0. At the hockey club of my children, Hurley, in Amsterdam in the Amsterdam forest. For 2 years, Radler 2.0 was given away free of charge. Would you be prepared to give away Heineken 0 free of charge so that children can get used to drinking alcohol free of beers? Now as far as I'm concerned, drinking and driving don't go together. And you are a sponsor of Formula 1. Wouldn't it be wonderful if Heineken would be replaced in Formula 1 by Heineken Zumo as well? That way, worldwide, you would be giving off such a tremendous message. And there's going to be another James Bond film. I'm sure Heineken will be in the limelight again. If we spend €60,000,000 on Heineken 0, Heineken would become the number 1 alcohol free beer worldwide. There are 1.5 1,000,000,000 Muslims worldwide, and actually all of them should be drinking Heineken 0. Now if it would be offered everywhere, wouldn't that be fantastic? Sustainability now, specific question. A question was raised here about scarcity of water. Your colleague, Ralph Hammers of the ING is very, very excited about the Apfel shower, which saves you 90% water consumption and 90% gas consumption. So perhaps you could take another detailed look at this shower. And last year, we were talking about seat heating. Now we've progressed a bit. The Ministry of Infrastructure and Environment, the Ministry of General Affairs and Economic Affairs want, to make sure that there is there are chairs heating in all the terraces in the Netherlands and we could save 95% in energy. And it would cost you just a couple of cents per seat. Now I talked to a colleague of yours at the Horacava and there's this gentleman who is in charge of 600 cafes. And I suggested that he should apply this innovation. And he said, well, if Mr. Van Buxmeer said that I should do would say that I should do it, I would do it. Now Heineken experience on the roof there is seat heating. In Orkhein, we have Pepsi Mac. There is seat heating sponsored by Pepsi Macs with the logo and brand in Nijmegen. So there are already sponsors that are engaging in seat heating. Could you perhaps gradually, after all these wonderful suggestions, be able to come to some sort of conclusion and raise your question. Urbi, the electrical bike is in Amsterdam costs €1 an hour, €5 a day. If lots of your staff would start using these bikes, it would be really good for the environment and you would save a lot of costs in terms of car costs, fuel costs, diesel costs? Those are my questions for the moment. I think you're right that if I said that in 2014, then that was a very Trump style never ever statement. But to be honest, we struggled for a very long time with the actual product because non alcoholic beer will never taste like beer that does contain alcohol, because please bear in mind that pure alcohol has no scent and no flavor, but is the best way of preserving taste and scent. Think of perfume that's simply alcohol with lots of flowers. That's the idea. Now, beer or wine? And it's beer without alcohols like a salad dressing without vinegar, a vingug without vinegar, simply won't taste the same. So, making a product that has the refreshing taste of beer and the refreshing, hop. So making beer without alcohol, we've been doing it for a long time with Amstel and several other brands, but it's taken us a long time to figure out a recipe that we could proudly call Hannigan. So that's what happened. And it's based on advancing insights as for the potential of the brand today. And finally, I'll admit honestly that this group was traumatized by the bugle real. I'm sure that the Dutch listeners will understand what I mean. And that did complicate things. I think that we're now in a different era, and nowadays, it's no longer relevant. And as you clearly stated, in some circumstances, you just don't drink alcohol. And there are some people who don't want to drink alcohol, but do want to enjoy the flavor of a beer. And quite simply, that's what we're trying to serve nowadays. And you mentioned the market of Muslims. Well, you simply think they should drink it. Well, they don't have to drink it, to be honest. Everybody is free to decide what he wants to drink or does not want to drink. I just wanted to point out that there are great many countries where if you market an non alcoholic beer as well, if there's also an alcohol containing version, then that non alcoholic beer is prohibited. So let's not lump everything together. Your remark that you can't drink alcohol while you're engaging in sports and you can't drink and drive, they're entirely true. Our point is that they're not compatible. But watching sports together with friends such as a football match on TV, you don't have to forego your beer in that setting. People understand that you shouldn't drink and then go play football. Quite honestly, I don't think that's your strongest argument. As for the idea of using Heineken 0 to advance, yes, we're going to sponsor the F1 in Barcelona in blue because blue is the Heineken 0.0 color. So in that sense, it's a good argument. But don't think that you're going to turn a Heineken into a non alcoholic beer. Largest volume will be the Heineken that we know, and we're proud of that and intend to valiantly promote that and develop sponsorships. We have a global brand and we've got we need Formula 1 and Champions League and James Bond to take that global. But the one idea doesn't stop the other. Okay, we've got a lady waiting for a very long time, very patiently now. She has the floor. Thank you, Mr. Weyers. I'm Elonka De Beer from the BBDO. The BBDO is the Association of Investors in Sustainable Development. And we've been attending shareholders' meetings for years, including this one of Heineken. And we enjoy entering a dialogue with you. I'm delighted that sustainability figures high on your agenda, not only in your presentation, but also based on questions from the audience. The topic is clearly in growing demand. And we were also delighted at the first integrated annual report, our compliments to you as well as the award that you then won for sustainable reporting from the EDI. And there's some nice scenes online of that award presentation. So that's an impressive achievement. I had 3 topics, and we indicated in advance that we'd be asking questions. The first is about the environment, the second is a social topic and the third is governance and that also relates to the SDG sustainability development goals. As for the environment, Heineken focused on 3 areas. 1st, water. We've discussed that at length. So, I'm going to omit that question. Next, CO2 emissions and sustainable sourcing of products. Aside from water, you also use agricultural products. And this agriculture probably significantly impacts biodiversity, land degradation and deforestation. In the press, you increasingly see concerns of many companies about deforestation. We were wondering whether it would be possible to just take it a step back in the annual report you have expressed affiliation with the Platform for Sustainable Agriculture Initiatives And they're involved in proceedings where the farmers commit to a biodiversity plan for the farming grounds. In what measure is Heineken on top of that? Is that part of your code of conduct? And the next question is, we did not see in the annual report that Heineken has already calculated its effect or quantifies its effect on agricultural capital such as deforestation and land degradation. We'd like Heineken to be a pioneer among brewers and quantify its impact? That was my first question about environment. The second is more social. 1 human right is the right to decent living. So in addition to receiving a salary, people can meet their basic needs with that salary, such as sending their children to school, keeping a roof over their head, etcetera. In the annual report, you mentioned that you meet the minimum wage requirement in many countries. But in many countries, you can't subsist from the minimum wage. So we'd like you in your supplier code of conduct as well to mention to a living wage. In what measure would you be willing to do that or what progress have you already achieved there? Now my last question about the SDGs, we are delighted that you observed the SDGs and have included them in your annual report and have done a mapping for 7 of the SDGs to contribute based on your present operations. You also mentioned that in strategized SDGs will figure prominently up to 2,030. And the VBDO would like you to associate quantifiable targets and KPIs to these SDGs and to report on them. Our question is, in what time frame would you be able to achieve this if you intend to achieve it? SDGs denote sustainable development goals. And the UN has proclaimed them because I got a lot of text messages telling me not to forget this or that. And somebody heard STGs, but you meant SDGs, the Sustainable Development Goals. First, about sustainable agriculture. We launched that in the Netherlands 15 or 18 years ago. My predecessors did that. That was in the flavor. And biodiversity often relates to return because if all you're doing is growing potatoes, you keep needing more fertilizer and you won't grow as many potatoes. And the land will grow progressively less fertile and you'll wind up in trouble. So biodiversity is about common sense and a new method of agriculture. And I've certainly seen that throughout Europe, massive progress has been achieved because you're also dealing with a new generation of farmers who unlike at their father's farms, we see that agriculture is thriving in our Western economy post World War II. The Americans took it over in a context of needing to produce a lot of food for people who weren't consuming enough calories. And I wouldn't forget all about history. This is clearly advancing insight on the part of science and what and learning from your mistakes and what does and does not work. Sustainability is about that too. So this Psi is a system for measuring it and putting it in perspective. I think in the past, you're just imagining we can measure all kinds of KPIs and it would cost a fortune and lots of manpower. And you'd have to set up a vast bureaucracy to report on that. In addition to reporting on that, you want to report it accurately. So we're perfectly willing, but we can't do with everything or we would no longer be a commercial company and all we'd be doing would be observing SDGs. We're also a commercial company. What we do care about is identifying a course of action. And the plan for the future. The biggest engine of progress that I have noticed is generational. Young people are driving this company ahead. Here in the Netherlands, it took us 7 long years to obtain permits to build 3 windmills in Sutor Voure, 7 years. And who's the government to tell us that we have to be sustainable? The good news is that if we build these windmills in the forest, it will take 7 months. So that's progress. Now looking to the future, once again, I see the glass is half full, everything that can be accomplished. And what matters is that we're a very internationally established company. We're strong in that. People should set priorities and pursue them. We try to report as accurately as possible, but we have not fully succeeded yet in reporting exactly and accurately according to standards and according to the prescribed methods. So, the provisional measurement is that 17% of our supplies meets biodiversity criteria in the 2 or 3 years ahead. We expect to achieve only 50% because we see a quick win situation. Along beyond that horizon, I can't tell you very much. And I can't tell you where we'll get this because we're not the farmers. And biodiversity for yeast is, Debose in France for barley. For barley, it's de Bose in France near Orleans. That's biodiversity. And now, with all those cooperatives, we know exactly what it is. And the generation that is now working on those huge farms is very different from the generation 20 years ago. So, I think that we're all headed down the right track. We're getting there. That was about agriculture. Next, about a living wage. Quite honestly, a living wage is quite a complicated notion. If we open a brewery, 2 weeks ago, we all went to Cote d'Ivoire for the official opening of the new brewery there. If we did not offer a living wage to the people who work for us, do you think that we'd have a winning team? Living wages are our stock in trade wherever we operate. And in most countries, we pay well above a living wage. That's the reality of how we operate. And conversely, as a company, you can be a trendsetter and you can team up with other companies, but you can never replace the government in any country to determine what the minimum wage should be in a certain country. So, at some point, we should stop thinking we can regulate everything from the perspective of omniscience. We don't always know better. Usually, when we operate a brewery or a distribution organization globally, we do it based on intuition and logic. And obviously, we have to pay a living wage or we wouldn't have a winning team. I think Mr. DeBlue would like to add something to that. Maybe if I can just complement. I also understand your question as being the global supply chain. And it is true that we believe and we hope and we're committed to really pay a living wage also because it's our best interest to have people who want to work with us and are motivated. We have a very wide supply chain, and that's where it becomes very complicated because of the spread of our suppliers. Yes, we can always include something in the supplier code regarding remuneration, and we're looking into that. But it's very important for us to be able to actually implement the supplier code. And we've made big steps. Our supplier code is now deployed with more than 60,000 suppliers. And we really go and check and have surveys and engage 3rd party and audit. And being able to really validate what whether every single of our suppliers throughout the global supply chain is paying a living wage. First of all, there are definitions issues. But beyond the definition issues, this is extremely difficult to make. So we are conscious that it's an important we do our share by committing very decently people in our breweries and in our own employees. It's important for us. It is not easy to actually put it in objective words and be able to check on every single supplier. So that remains an area of difficulty. We've actually worked on our supplier code with an NGO called Forum For the Future. We worked with them in 2016, and we're reviewing their conclusion this year. So we will update and upgrade our supplier code this year. But we have to stay very realistic on what we can actually measure. Clear. Thank you. I think it is a very good point. And if we're very honest, the touching point where it is difficult is in agricultural supply, obviously. That's because it is a tension between the fact that we are committed to have over 50% of our total supplies, and in particular, in Africa, coming from local sources and of course, what is lived by alone in working with what is, what are small farming groups. And there is where you might have some tension, especially if you start to work with more commercial groups. It's there where the tension can end the passage. Because make no mistake, Africa will go slowly, maturely also to more commercial agricultural produce. And it's there where the area of tension that you referred to will inevitably occur. Ladies and gentlemen, now I would like to adopt the annual report unless there is an extremely important question. Yes, Mr. Byers, you know that I always ask important questions. Yes, I wouldn't doubt that. Who are you? I'm Mr. Espana. And of course, I read the annual report. But the cover, that is really impressive. Whoever thought of that cover, that is really part of this wonderful company. And it's a wonderful idea on Page 1, Mr. Chairman. The CEO in his letter wrote that we're proud of our Dutch heritage. So why don't you make the store in your logo orange? Because you know that in a certain group of the population, red leaves a very bad taste and an orange star might boost your marketing efforts too. In the next 5 years, you expect to spend 100 of 1,000,000 on marketing. That's a wonderful idea. But with the orange star, we wouldn't have the problem with Hungary because whether you purchase red or orange paint from your previous employer, the price won't vary that much. But for marketing purposes, it might go a long way. I'd like you to answer that first question. And then I thought about the horizon that the CEO mentioned, I'd like to think about that dot on the horizon. But what's his view of Mexico? Because of course, we've got Mexico before and after 8 November. What's your idea about Mexico now? Because before November 8, it was an entirely different country because somebody else was in charge of the U. S. From now. What's your view on that? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you, Mr. Spagna. Excellent questions. Yes, I thought you'd like them. I knew you'd ask wonderful questions. Well, I'm going to get to work on that orange star because it's almost King's Day. You're right in the market. Yes, I'll tell the marketing department. Sometimes we pass your ideas on. That's with the huge orange sentiment. Now, all jokes aside, we had one problem, which you've all read in the press, and we were watching it too. That's a bit closer to home. The red star in Hungary, It how do you put it? There was a lot of fuss about that. It was a tempest in a teapot. Yes. We wouldn't call it a tempest in a beer bottle. Yes. Well, it's reaching its conclusion. Heineken will remain in Hungary with its red star. We're not going to change that red star to an orange one. That happens now and again, but we don't see that as a reason. Red and green have existed since time immemorial. We're very proud of that at Heineken. Occasionally, we add a touch of orange, but that's very occasional. As for Mexico, before and after November 8, Mexico is not changing. As for the brand potential for export from Mexico to the U. S, there are questions about additional duties at the border and tariffs. How would that affect us? But it will affect a lot of American companies, companies that have a symbiotic relationship with Mexico. They manufacture a lot there. The industry in Northern Mexico is inextricably linked. And it's inconceivably, inextricably linked with North America. There's an economic area between some provinces in the north of Mexico and the south of the United States. That's a single economic area that has been privileged by the NAFTA. And we'll have to wait and see what happens. And if worst comes to worst, then yes, that will impact us. But it will impact so many more things that will just be a drop in the bucket by that time. Well, what about that drop? That's a very broad concept. How can we quantify that in monetary terms? Mr. Espana, of course, we do know internally that we do perform risk analysis, not only for Mexico. We do check the devaluation of the Nigerian naira, how that would impact us tomorrow. It could have dropped by 30% and that would have global consequences. We do that continuously. It's not only about what you see in the newspaper. There's a lot of other factors that are not in the newspaper. That's what you pay us for, and we do our job. But as for our strategy, we don't want the entire group to be jeopardized by a single geography or a single disappointing geography. You have to think about that. To continue having a positive perspective on the group and we can survive a minor setback if that happens. And counterintuitively, with the stronger dollar and the weaker peso, the Mexican economy has experienced a boost in consumption because of all the Mexicans who send remittances to their family every month. So they have they get more pesos and they can consume more of our products. So our business is thriving there. Well, that sounds good. Okay. Now the last question from that gentleman over there and then we'll move on with the agenda. It's already past 3 and we're still at the first item on the agenda, but the rest will go quickly. Well, I'd like you to guarantee that. I'd be happy oblige. I'm Mr. Foss. I'm speaking on behalf of the Foundation for Legal Protection of Investors. Ordinarily, we'd have Mr. Stiefens. Unfortunately, he can't be present. So he sent me as his junior assistant. That's why I'm a bit late in the line of questions. So, age is all relative, Mr. Von Buchsmeer. My comment is that we were especially delighted at the annual report, the integration of sustainability in the annual report that is the former Chairman of Milleaux Defense, he really delights me. And as for the results, we think it's a wonderful achievement if year after year you can boost the dividend by about 10%. And that certainly merits complements both to you and to your supervisors. My only question is if I look at the risk profile on Page 21 and the risk appetite, what I don't see in very it's very general and what I don't see is the risks mentioned today such as order shortage and those things. Wouldn't it be a good idea in your risk appetite to address sustainability and the threats, for example, in India, as well as your wonderful work capturing water that should yield positive water management for the surroundings. That certainly merits mention in the annual report. Thank you. Mr. Fosse? [SPEAKER MARIA CARLOS GARCIA CANADA:] As for your complement of the report, I'll convey that to Blanca Yuti, our Corporate Affairs Chief at Hague. Again, Blanca, please raise your hand. She made sure that in addition to that beautiful binding you mentioned as well as the content of the report are integrated. And she insisted that we do this despite saying we're not ready for it. She said, we are ready for it. So we did it. So Blanca, thank you for insisting on this. We cover the risk management in the risk the main risk in the risk management section. And one could argue that it could be more developed on sustainability. We also cover it by reference to other section. For instance, if we look at financial risk, they're covered in-depth in the annual report. And therefore, we don't cover them completely in this section. We just incorporate. So the link is there, and it's definitely the more we integrate, and that is a great step for the company as well because it's really required a lot of common work between all departments to get to the combined reports that we're presenting to you today. The more it's integrated in the business and the more indeed it is integrated in the way that the people in the business look at risk management. So I would say formally, it is more covered it's covered in more detail in the sustainability report, but it is there. Okay, ladies and gentlemen. I confirm that we have adopted the report as such. And now number 1b of the agenda, the remuneration policy of the Executive Board. The remuneration has been explained on pages 50 to 58. And before we discuss this item on the agenda, I would like to give the floor to Mr. Martin Dusz. He is the Chairman of the Remuneration Committee, and he shall explain the implementation of remuneration policy. Mr. Dass? Thank you, Mr. Chairman, ladies and gentlemen. I'll be happy to give you a presentation on the implementation of the remuneration policy for the Executive Board 20 16. As you know, our remuneration policy is based on 4 principles for remuneration, namely in the first place, support to the business strategy second, to remunerate according to performance and thirdly, perform in a sorry, remunerate in a competitive way and in a fair way. And I'll say a few words about each and every one of these principles. The first principle, support the business strategy, is materialized because of a considerable part of the remuneration up to 80%. You've seen all the figures in the remuneration report is dependent upon the realization of the previously determined targets. The financial targets for the short term and for the longer term variable remuneration provide us with a balanced focus on top line growth, bottom line growth and cash generation. And furthermore, for the short term variable remuneration, we also have targets that focus on leadership skills in view of specific targets in one specific year. And also these targets are determined beforehand. And the second principle being remunerates according to performance specifies the targets that reflect the business strategy. And so for every target, we established a performance level. And for the financial targets, we also established a threshold, a low minimum threshold and a maximum. And for this performance, you could have a remuneration that could vary from 50% to 100% of the target level. And for performance that are below the threshold level, the remuneration will be 0. This method to determine variable remuneration at Heineken has existed since 2005 as part and parcel of the remuneration policy and leads to the fact that a variable remuneration in a year with a lower performance can be low or even Now this is precisely the purpose of the remuneration policy. Now this is precisely the purpose of the remuneration policy. In accordance with this purpose, this very good year 2016 led to a higher variable remuneration. The financial targets for the short term and the long term incentive, the following applies. In 3 cases, performance was between target and maximum level. And in 4 cases, performance was in excess of the maximum level. For those targets that focus on leadership skills, the short term incentive, The Supervisory Board was of the opinion that the Executive Board has performed at a maximum level in a year in which market conditions were tough due to geopolitical and socioeconomic developments and challenges in the field of sustainability. Nonetheless, nonetheless, our worldwide market position expanded further because of the successful integration of our acquisitions in Malaysia, Jamaica, Slovenia and Myanmar by setting up a joint venture in the Philippines, by setting up a greenfield operation in the Ivory Coast and by acquiring a Coca Cola bottling company in St. Lucia, a water company in New Caledonia and a brewery in Vietnam. The Executive Board also made headway with respect to the acquisition of the pubs in the U. K, Brasilkin in Brazil. That has yet to be approved by the competition authorities, but the work was done in 2016. Furthermore, we've improved marketing of the Heineken brand by means of sponsoring the Formula 1, our campaign for responsible alcohol consumption and extending premature extension of the UEFA Champions League sponsorship from 2018 to 2028. In house, we also took big strides in order to strengthen the competencies within the group's senior executives in the line as well as in marketing and other positions. All these excellent levels of performance for financial and leadership targets have led to a short term incentive for 2016 at the maximum level being 200% target level and a long term incentive for 2014 to 2016 at 175% of the target remuneration level. And so the excellent performance in 2016 is reflected in higher variable remuneration in accordance with the purpose of our remuneration policy. The third principle of our remuneration policy to offer competitive remuneration that means that the level of the basic salary and long term and short term incentives plans for the Executive Board since 2011 and has been derived from the median remuneration level of a worldwide peer group of 15 companies comparable to Heineken. Benchmarking ourselves with a worldwide peer group is justified because Heineken is simply a global company. Out of the 75 1,000 people who work for Heineken, only about 5% are working in the Netherlands. The rest is scattered across the world. The relevant labor market for senior management of Heineken is not the Dutch labor market, but the global labor market and that justifies benchmarking with a global peer group. Within the applicable remuneration policy, the supervisory board can adjust elements of remuneration of the Executive Board from time to time to the median level of this worldwide peer group. And Supervisory Board did so for 2016 by making sure that the basic salaries of CEO and CFO are adjusted to this median level. The basic salary of the CEO increased for the first time in 6 sorry in 3 years by 4.3% and the basic salary of the CFO increased by 18%. These relatively steep increases are due to the fact that the initial salary of the CFO had been established when in April 2015 she joined Heineken at a level that was substantially lower than the median level of the peer group. But in view of the excellent performance of our CFO from the very beginning, supervisory board was of the opinion that her salary for 2016 should be brought to the median level of the peer group. And this leads to this relative steep increase of 18%, which is mainly due to the fact that her initial salary was far below the median level. For 2017, no increase of the base salary had been implemented. And by the way, this world where our peer group has only been adjusted slightly and that was necessary because SABMiller fell out of the peer group because of the acquisition by AB InBev and Phillips was split up in 2 smaller entities that no longer qualified for the criteria of the peer group. So that's how they disappeared from the peer group and they were replaced by Nestle. Nestle absolutely belongs in this peer group in all respects. And then we have the 4th principle for remuneration, fair remuneration, and this entails that all staff of Heineken or all senior management sorry all employees from the bottom to the top are to be remunerated in accordance with the relevant labor market levels. And all this is derived from this worldwide peer group that we have to that effect. So ladies and gentlemen, that was my explanation of the remuneration policy for 2016. Thank you very much. Thank you for this crystal clear presentation. I suggest that we first take stock of the questions. Who would like to ask a question about the remuneration policy? I see Mr. Jorna's hand raised over there. He's the only person that I can see for the moment, right? Yes. You've got a temporary monopoly here. Thank you, Chairman and Chairman. I believe, as management, I think it's always wonderful to have a supervisory board that is in admiration of your performance and acknowledges everything you've done this past year. And to me, it's also a matter of you're being paid for these things. It goes with the territory and it shouldn't be presented as being so extraordinary. But Mr. Dust does this year in year out, which is always wonderful. And I think that it's music to Mr. Van Boxmeer's ears. So that's a good thing for him. If we look at 2015 and then 2016 and of course I can refer to history in many more risks that you never see and enough has been said about this that remuneration at Heineken is always a critical issue. There's a lot of criticism. And if you then look at 2015, what is the score of Executive Board maximum? 2016 maximum performance, maximum scores in terms of targets. My question to Mr. Doss and his colleagues. Do you think that your ambitions are high enough? Or do you have other evaluation standards that we're not aware of, but I can always ask the auditor whether he feels that the these standards have been reached. But the Well, I do see someone else. Mr. Fager would also like to ask a question. This is about remuneration policy, right? Well, what else would I discuss? Well, I was thinking solar cells or something along those lines. Well, isn't that a good idea? Because in Vixavita, these advertisements, in the past it said that it had been made on the basis of solar energy and we no longer hear that. So I would request you to reintroduce that. So thank you for that comment. I think that Mr. Von Boxstermeer is doing an excellent job. And I can show you based on a case that I know of. I was downstairs in the bar and none of the people at the bar, I mean the students, boys and girls, none of them had ever drunk Heineken 0.0. And I said, why don't we try? And we all tried it, and they all enjoyed it. They liked the taste. So I think that this is worth a wonderful bonus for you. Furthermore, I'm also a member of the VEB, the Association of Stock Exchanges of Stockholders. So I'll keep an eye on Mr. Ioana. Well, it's great that we have a national standard and a cap for the remuneration of CEOs, but nobody is sticking to those arrangements. So I think it's a good thing that Heineken employees have a good comfortable salary. And I think the policy of Heineken is excellent. So I'd like to thank you for that. Well, thank you very much. This is an observation that supports our policy, Mr. Yonah. It seems that I interrupted him and it was never my intention. You have a second question. 2nd question. You have to publish the wage gap between the person who is making the most money and the person who is making the least money in the company. And this differential, if you publish that differential, do you think that you can still stay in the AEX Stock Exchange listing, Mr. Das? This was your second question. Do you have any other questions? No, I don't. Thank you, Mr. Chairman. Mr. Yuna asked 2 questions and the first question concerns targets. And he says that remuneration in 20152016 was at the maximum level. Well that's not entirely true. I just said that variable remuneration for the short term incentive was at maximum level, but the long term was at 175% in last year, 2015. It wasn't maximum at all levels. Some were maximum performance, others were just high. But in 2015, 2016 performance was very high and that led to the question asked by Mr. Are these targets challenging enough? Allow me to first explain the process for setting the targets for the short term incentive. The targets are derived from the annual plan, the annual budget. And for the long term incentive, targets are derived from the 3 year plan. And the Executive Board and the Supervisory Board make sure that these annual plans, the 1 year plan and the 3 year plan, are very challenging plans because the purpose of these plans is to motivate the entire company to achieve excellent performance. So the annual plan, the 1 year plan and the 3 year plan are very challenging and because the targets are derived from those plans, by definition, these targets at target level are very challenging in themselves. So it's quite an accomplishment to perform at target level. And it's an excellent performance and an excellent accomplishment to achieve the maximum level. It hardly ever happens. And then if you cast your mind back, you see that it hardly ever happened, particularly in the field of the long term incentive. It's more an exception than a rule that the maximum be reached for 20152016 the situation was different. And that wasn't because the targets were not challenging enough, but that was due to the fact that it was an excellent year. And in such an excellent year, the whole idea of the remuneration policy, unfortunately, the outcome of the remuneration policy, is that high variable remuneration is paid out. Now that's my answer to the question as to whether the targets were challenging enough. My answer implies that these targets were certainly challenging and the fact that these targets led to higher remuneration is based on excellent performance in those 2 years. How about next year? I'm sorry, I didn't hear what you said. Well, this is what we're hoping for next year as well. Or are you advising Mr. Boxmeer to set something aside because next year is not going to be that good. Now we have challenging targets for next year as well. And of course since in everybody's interest that we achieve those targets or even outperform those targets. And then you asked a question about the wage gap. Now this is something that is addressed in the new corporate governance code in the Netherlands. We're still looking closely at how to comply with this or how to deal with this. We're not entirely sure, but one thing's for sure. The result is not going to be that we will disappear from the AAX index. No, absolutely not. Today is the AGM of Wolters Kluwer as well. And there we have a CEO that is making a whole lot more money. So you're not going to come out as number 1. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Well, for the rest I can't predict what will happen. That would be speculation. I don't think we should engage in speculation. Okay. I was just assuming that Mr. Vreker's comments were comments instead of questions. That's how I interpreted it as well as a support for the remuneration policy that we pursue. Ladies and gentlemen, the remuneration policy has been adopted as such. And then let's proceed to the adoption of the financial statements 2016. As I said, you'll find them. You'll find them in pages 59 through 134,153. The Executive Board report, the financial statements have been audited by Deloitte accountants. You'll find the audit report on pages 154 to 157. Before we discuss the financial statements, I would like to hand the floor to Mr. Van der Bergh Deloitte, who has audited the financial statements and who shall be explaining his audit. Thank you, Chairman, for giving me the floor. Good afternoon, ladies and gentlemen. I'm here right in between the Executive Board, Supervisory Board and the shareholders. I like that. And I'm happy to explain the audit of Heineken and our audit report. This is the 2nd year that we're the external audit of Heineken and management executive board is responsible for drafting the financial statements and we are in charge of issuing our opinion. And we've issued an opinion and in which we specify our opinion on the financial statements as such. I would like to take you through a number of aspects of our audit. I'll just take a couple of minutes. Let me start on the right hand side. The scope of the audit and then clockwise we'll be moving along the different topics. And I'd like to say a few words about materiality, the key audit matters and the report of the Executive Board and also the sustainability report. And at the end of my presentation, I'll be happy to answer any questions. First of all, the scope of our audit. It's important that you keep in mind that Heineken obviously is a structure operating in several countries. And in all those countries we work with Deloitte Offices that audit the books in order to incorporate everything in the financial statements of Heineken. The supervision and the management of all these country auditors is very important. This past year, 25 countries were in the scope, which means that we had a full scope audit in these 25 countries, which led to a comfortable coverage with centrally from the Netherlands. And I'm referring to the goodwill impairment test that is an important part of the balance sheet of Heineken Treasury and that concerns funding and the valuation of derivatives, but also central procurement, Heineken Global Procurement and also the application of data analytics and large parts of the IT organizations are audited from the Netherlands. This past year as a group team, as a leading team, we visited several countries in order to supervise the execution of the audit. These countries concerned and you've been able to see this in our opinion Mexico, Congo, Brazil, China, Vietnam, Italy, Poland, France, Austria, Papua New Guinea, New Zealand, Nigeria, South Africa, Russia, Jamaica and Chile. Now I'm mentioning these countries because it just goes to show that as a group team, we are quite dedicated to managing the audits in these local countries as a group team and as lead partners. In this assignment, we spend a lot of time in this work. Our team consists of a number of employees, directors, managers and other staff members and also a team specialists. And that would be IT specialists, treasury specialists, specialists in the field of accounting, IFRS, taxes, but also valuation specialists. And if we then proceed to materiality, you will have read in our opinion on page 155 of the Heineken financial statements that has been determined at €150,000,000 for this year, which is about 6% of profit before tax. For the financial year 2016, we applied a higher materiality than in 2015. And that is on the back of increased business activities in terms of acquisitions in this period of time, but also the fact that 2015 was our 1st audit year. And then if I move on to the left hand side of the slide, I can't see it myself, but you find the key matters of the audit. And these are the audit matters that were most significant in the execution of our audit, and they have been specified in our opinion. We don't give a separate opinion on these key audit matters, but there were 4 topics that we concentrated on. And first of all, that was revenue recognition and also promotional compensation etcetera and also the impairment test on intangible assets and property, plant and equipment. That's an important part of the balance sheet of Heineken. And we focused on the valuation or the assessment of management. Taxes and those are provisions for uncertain tax positions, but also the valuation of active deferred taxes and also internal controls regarding financial reporting. In the opinion on 2015, there are 2 key issues that you don't see here. 1 concerned the initial audit assignment, but we don't have that now in the 2nd year. The other one was the evaluation of the plastic refund for plastic bottles. And this year, we felt that it's no longer or should no longer be a key audit matter. Now a few words about the report of the Executive Board. This past year, we've become more involved in the report of the Executive Board. In the past, we always considered the main issues and we evaluated the main issues, see whether specific elements have been included and also whether the report was in alignment with the financial statements. In 2016, we issued an opinion in conformity with rules and regulations stating that there are no material there's no incorrect information material incorrect information in the statement. By the way, the tone at the top of the tone of the report is appropriate in our opinion. And there's also non financial information that's been included in the report, and that would particularly be the Sustainability Report. You'll find this on page 135 of the annual report. And as the Chairman pointed out, we also issued an assurance report, a limited assurance report, which means that our procedures with respect to the sustainability report were based on acquiring, gathering information and also executing data analytics. This was a bird's eye view of all the work, a lot of work that was done in the background, but I'd like to leave it at that. And I would be happy to answer any questions, should there be any questions regarding the implementation and execution of our audit. And I'd like to hand back to the Chairman. Well, who has a specific question about the role of the audit? I see Mr. Espana. Of course, I have. I see Mr. Yama. Mr. Espana. Yes. I have a question. You've got lots and lots of experts, but big data is extremely important. Big data can save your organization much more money than just auditing the financial statements. Why don't you have big data specialists? Because this company has lots of big data: age, categories, if people order things, you have all those data. Why don't you take those data into account? Because you also have operations in Africa. And in Africa, people don't lock their doors as firmly as people do in the Netherlands. So hackers can find their ways to homes in Africa. Why did you not keep an eye on that? Why don't you keep an eye on that? Mrs. Feiner, you're in a very strict mood. Yes, but it's dangerous. Mr. Vandebergh. Yes, I'm being admonished here. I can see that. Your assumption is that we didn't look at that, and your question concerns a number of topics I think. I mean you're speaking of big data and consumer data. Well this is not something that falls within the scope of the financial statements. But we do carry out data analyses whenever they concern the financial statements and the realization of the financial statements, and we do this centrally. Now this would be manual records and other things. And your question, if I've interpreted it correctly, also concerns hackers and I'm sure you mean cybersecurity. And it's good to keep in mind that we always consider the IT environment of a company, particularly Heineken. And also we want to make sure that data processing is done in a reliable fashion and this would also entail data security, access security and we also evaluate whether this is done properly within the company. If not, whether this is being flagged and addressed in an adequate way. Should that not be the case, obviously, we will focus on that and we'll discuss as much with this Executive Board. Yes Bart. Yes Bart, if I can respond to that. You should not respond. You should ask questions. Fine, fine. I'll ask questions. Thank you for that. In an article in the Financial Dachblatt, it said that you have to focus on this more. And Deloitte was one of the big four that is involved in this. So you are you going to hire someone specifically for big data in your team to be able to inform you a bit more about that? Well, I think that I've given you my answer. We have data specialists in the team insofar as these data are relevant for the audit. Mr. Spang, you should not believe everything that is published in the newspaper. Mr. Jona, you had another question. Yes. Thank you, Mr. Chairman. I'm glad you're not that straight. So we still have a relaxed atmosphere here. For the auditor, I see that you increased materiality from €100,000,000 to €150,000,000 Was there a reason for that? And or does it mean that your audit was less finely meshed? I don't think that that would be, the case. But I have seen that you flew in a specialist for pensions. He was not stated in the opinion last year. Was there a reason to do that, to fly in a specialist for pensions? Thank you, Mr. Jona. A question about materiality. As I explained in my presentation very briefly that we increased materiality particularly because of the increased business activities, business operations of the company when we determined materiality in 2015. It was at the beginning of the financial year 2015. As you may remember, there were a number of acquisitions in the course of 2015 that increased business operations. Another reason that I also refer to in my presentation was that in that 2015 was the 1st year we carried out the audit. And in the meantime, we have gathered more knowledge about the company and have been able to focus our risk analysis and that was a justification for the fact that we increased our materiality. The benchmark, which is providing us guidance for materiality is 5% to 10% of profit before taxes. And with this materiality, we're at 6% profit before tax, which in our opinion was still on the conservative side. And we also are keeping in mind that materialities as applied in the audit of the country organizations are at a significantly lower level with a maximum of €50,000,000 which I believe has also been our team, which we didn't have last year. Well, it's not that in 2015 we forgot to involve pension specialists because it's always a very tough topic. We always need to involve the expertise of specialists. But if it was not stated in the audit, then that was no mission on our part. Thank you. If there are no further questions or comments, we could perhaps proceed to adopt the financial statements for 2016. And that means that we'll be voting. But Mr. Yonah has one other question. Well, I thought you just wanted to deal with questions about the audit. The financial statements, there's a substantial loss that you incurred on currencies, amounted to quite a lot of money. In the past, I asked questions about that and Mr. Voxmer always answered those questions by saying, it shouldn't be so gloomy. We don't have to hedge that because most of the costs are also incurred in local currency. So they offset each other, which this case is not this year is not the case. That's one thing. How come this year the difference is a big one? Of course, we're familiar with the currencies that have declined, but the cost that you incurred, were they so much lower? And the item of debtors, Page 112. And here we see that you have 100 more than 120 days €450,000,000 And the year before it was 3 47,000,000. How many of these 347 are still present in the 4.52 days outstanding that you have now. And there's also an item that says impairment on that same page. 2016, it was 3.41 for payments of €453,000,000 Is this an impairment that we should take into account? Do you have any bad debts included in this figure, etcetera? I'd like to hear from you on that one. Laurence? Yes. So to answer you on loss of currencies, you have 2 kinds of currency risks that we incur. 1 of them is translational risk of converting the result that we have in many different countries into euro, converting every line of the P and L actually. And the other one is transactional risk, which is that when, for instance, Nigeria needs to buy goods in foreign currency in order to produce a beer, then of course that costs them more if their own currency is devaluating. If you look at the translational impact in 2016, it's been particularly tough. The translation, so really the conversion of our accounts into euro that cost us more than €1,000,000,000 currency devaluations at revenue level. And at this level, it was very difficult to compensate it by organic growth only. Now because of the sound policy and cost control, we were able to compensate it at result level and that we were able to still increase the profit whether you talk about organic or reported. So the impact at net result was about was more than €100,000,000 but it was compensated by the growth of the activity. And definitely, 2016 has been a particularly tough year in terms of currency devaluation. Main impacts, as you know, being the Nigerian naira, which whose devaluation finally happened at the end of the first half, and also the Mexican peso, which has been really impacting us. And I would say one of the achievement of the operating company in 2016 and also one of the achievement of the spread in our footprint, geographic footprint was to be able to compensate that with other countries actually performing very well and other currencies helping us. Vietnam, for instance, has been quite positive in 20 16. When we actually guided the market for 2017, what we said, and it was just quite conservative, is that we were not expecting an easier time with currencies in 2017. So that's then when it comes to your exposure to credit risk, I would say that in terms of impairment losses, we haven't seen any significant downgrading from 1 year to the other. So this is definitely something that we are monitoring quite carefully. And in times when an economy is becoming very difficult, you can see an increase in failures of your customers and more bad debt. That is not necessarily something that we've seen. So sometimes you have one off release of provision of things like that, that play from 1 year to another. But no material downgrading that would be worth mentioning in that context. Okay. So in that sorry, in Netherlands New Year. Back to Dutch. I think now we're going to proceed with the vote unless somebody has any questions. If not, then we'll open the vote. I'd like the voting operator to activate the system. And please use the voting boxes if the voting operator has activated the system. Then you'll see that your box is sliding up and you'll see that you need to use your smart card. So you need to insert your voting card and you'll see a welcome message and your name. And please insert your voting card for Hennig and and V without the yellow dot with the gold colored chip facing towards you into the voting box. And as soon as the voting system has been activated, your voting options will be displayed on the screen. If this does not happen, please raise your hand and we have extremely helpful ladies who will be at your service. Throughout the meeting, you may leave your voting card in the voting box. Let's see if anybody is having any problems. Oh, there are also gentlemen helping out with that. I apologize. Is everything working out? I don't see any hands raised. If you would like to vote in favor of the proposal, please press 1. If you wish to vote against the proposal, please press 2. And if you wish to abstain, please press 3. Ladies and gentlemen, please cast your vote. The vote is now open. You may vote by pressing the button of your choice. Ladies and gentlemen, the vote is closed. And I hope that we will see the result of the vote. And I can tell you that the decision to adopt the financial statements for the financial year 2016 has been adopted by 99.96% of the votes. Then after having established that, we'll move on to the dividend and the dividend policy and an explanation about the dividend policy. And the Executive Board proposes a dividend equaling 30% to 40% of the net earnings excluding special items and impairment of brands. And by this is compatible with the sustainable quality of Heineken and it is compatible with retaining the healthy balance sheet structure for the company. And increasingly, we will be able to grow both organically and through acquisitions. As usual, this is paid as an interim and final dividend and the final dividend will be set at 40% as in previous years. Who would like the floor on this topic? Okay, that is fixed been accepted and on to 1 gs, which is establishing the dividend for the financial year 2016, it is proposed that a dividend of €1.34 per share be distributed, which is 36.4 percent of net earnings, of which €0.52 was already paid out on 11 August 20 16 as an interim dividend. The final dividend of €0.82 per share will become payable as of May 2017 at the ABN AMRO Bank in Amsterdam as of April of this year. The shares on the Euronext Amsterdam Stock Exchange will be listed ex dividend. The profit in the financial year 2016 will equal $777,000,000 and will be added to retained earnings in equity. Who would like the floor on that? Then I propose adopting the dividend at €1.34 per share and voting on that with you. Would the voting operator please activate the system and Wait for the outcome. It looks reasonable because we note that the dividend proposal has been adopted with 99 point 91% of the votes cast in favor. Now on to 1F on the agenda, which is discharge of members of the Executive Board. This is to discharge the executive board members for their management in 2016 and for performing their duties in the financial year 2016. Who would like the floor on that? If nobody would like the floor, then I propose that we proceed with the vote. Would the voting operator please activate the system? Please cast your vote. The vote is closed and I see that at 99.62 percent of the votes, the members of the Executive Board had been discharged for their management in 2016 financial year was 1 gs, which is discharge of supervisory board members considering supervision of the management performed in the financial year 2016. Who would like the floor on that? Nobody? Then we will proceed with a vote. Would the voting operator please activate the system and please cast your vote. The vote has ended. Oh, I see the results. And at 99.62 percent of the votes, this proposal has also been adopted to discharge the supervisory board members for their They're technical items, authorization of They're technical items. Authorization of the Executive Board to repurchase shares, that's 2A. We have that every year. Nobody has ever asked a question about that, but you can always break with tradition. No questions. Okay, we're going to open the vote. Vote is closed. And we note that 99.90% has voted in favor. So the authorization has been granted. Next. That was to be on the agenda. And this concerns rights to shares. Who would like the floor on that? If not, then I propose we proceed with the vote. Would the voting operator please activate the system and please cast your vote? The standing stands. Boat is closed. I note that 99.79 percent of the votes being cast in favor and the proposed authorization has been granted. That takes us to 2C which is the authorization of the Executive Board to restrict or exclude shareholders' preemption rights. Who would like the floor on that topic? Nobody. We will proceed with a vote. Would the voting operator please activate the system? Please cast your vote. The stemming is Nuchsloten. And the result is that this proposal has also been adopted with 99.41 percent of the vote. So the authorization of the Executive Board has been decided. Next, item 3 on the agenda, which is the replace of 1 of the performance standards for the long term incentive. Under the Executive Awards Remuneration Policy, the long term variable award plan currently includes organic EBITDA growth with a weight of 25% as it means to measure the company's profitability, which includes the company's share of net profit from joint ventures and associates, I. E. Entities that are not consolidated by the company. The supervisory board believes that organic operating profit by growth is a more suitable means for measuring the company's profitability within the context of the long term variable award plan since this measure better reflects the profitability that is under the direct control of the company. Operating profit is one of the key figures of the company's consolidated results on which the company presently reports. Who would like the floor on this? Mr. Yorna. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you, Mr. Chairman. The question is why are you introducing this now? Why didn't you do it last year? Why this particular timing? And how do these shifts relate to one another? Is one much higher than the other? For example, if I consider this year, I see a shift from 177,000,000 to 160,000,000. So now we're going to pay out based on a higher amount. Have you analyzed the impact? And have you examined that? What we don't see here is if you shift this thing, we know that it's 25% based on the 4 sections. But you can also see that the amount fluctuates considerably. So what's the target what the at target maximum? What we would have preferred, especially given an important topic at Heineken, is that there are lots of acquisitions. And you'd like to measure how much the return on investment capital equals or exceeds the cost of capital. So, if you take that as a long term standard, you'll see the effect of the acquisitions and you can decide whether to divest. What's unfortunate is that if you change this, we believe that the policy decisions to enter joint venture, and we've seen quite a few of those, are not factored in to the mechanism for checking how people perform over the long run. You're basically not considering everything. And we don't think that this is compatible with the choices and policy of the executive board. So, they should be held accountable for that. It sounds logical. If you can't remunerate them, then include it. But you've already made the choices. That's why we do not support this change. I would propose that I give the floor to the Chairman of the Audit Committee to discuss acquisitions, followed by Laurence and then Mr. Dass will take the last part. Thank you, Mr. Chairman. In the Audit Committee, we have a standard procedure of reviewing the effects of an acquisition in a given year. And after X number of years, we reviewed the base case and the underlying assumptions for an acquisition. And then after several years, we check what the outcome was. In some cases, we overestimated the revenues and underestimated the costs. In other cases, it's difficult to determine how measure this because companies are often integrated. But the standard procedure is to assess various acquisitions each year and see what the effects were and see which lessons can be learned for the future to see whether we need to assess them differently and reach different decisions. It's not part of remuneration, but I imagine that Mr. De Plou or Mr. Dass will answer that. It's impossible to express all the aspects of management and remuneration. This does indeed review the performance in the event of the acquisitions and to see whether the assumptions were correct. Mr. Das? Thank you, Mr. Chairman. Mr. Jorna's first question was why now and not previously? I believe that based on advancing insights, we've understood that operating profit is a better operating standard than EBIT because EBIT contains some things that the company can't influence. So therefore, the internal in the internal reporting, EBIT has been replaced by operating profit. And that helped trigger the decision to propose that the standards in long term variable compensation remain the same. And there too, we've understood that EBIT is not as good as standard as operating profit. In addition, it's desirable for internal reporting and remuneration standards to coincide. If there are any differences between the outcome of EBIT and operating profit, then that will be clear from the year plans. So that your plans for operating profit will reflect a different value than if EBIT had still been applied, but the new value in the year plan is the direct target level of variable remuneration. And that means that there is no increase or reduction of the standard. We still have to report based on the target level in the year plan. So it remains equally challenging. And I think I've answered Mr. Yorma's three questions. Not entirely, Mr. Chairman. Mr. DuPleu will add. In that in the short term incentive plan at the consolidated energy level, you have the net profit, which takes everything. So this is taken into account. As regards the switch from EBIT to operating profit, in the past, JVs were much more important in constituting the profit of the company. We now reached a stage where actually if you look at the amount that come for the share of net profit of associate and JVs, it is quite minimal. And that's one consideration. And then it has played in different direction, but really, it is not significant if you look at the organic growth, whether you take operating profit or EBIT, that wouldn't make really a difference here. At the same time, at the end of in some 2014, we chose to make also a commitment to the market to increase the operating margin by an average of 40 basis points year on year, mid term. And we found it was a good discipline because that's been something that has been very much appreciated to actually align the KPI we're using internally with the KPIs that we are using externally, so talk about operating. And the reason why we use that KPI externally from 2014 is exactly what I just told you is that really that reflects the bulk of our profitability and what we really can control. So I would say EBIT came from further away. Operating margin was given as a proxy of really what we can act upon. And today, the difference is very minimal, which it was much bigger in the past. It cannot be up to 20% or 25% of the profit of the company. We checked whether this would all things being equal lead to an increase, but that's not the case. You need to do the same steps for target sitting. And it doesn't matter whether what your targets are. Mr. Duss has already explained that they're all stretching. Okay, I understand it. I just appreciated the Executive Board explaining its own target and method rather than the Chairperson of the Regeneration Committee. It shows what a wonderful teamwork we have in this meeting. I think we've discussed this at significant length. Oh, no, we haven't. You have the floor. This is Corso. I'm speaking on behalf of the parties I mentioned previously and also on behalf of the Telegraph Pension Fund and APG, we certainly identify with the proposed adjustment. What we noticed was that explicitly in the annual report for 2016, you explicitly mentioned the targets for operating profits and you don't do this with organic EBIT. What I'd like to know is could you, for the record, make them explicit because your explanation was not very precise. And we certainly would have liked to see that in the annual report. I sense some confusion behind me. And next to me. May we answer this question offline after the meeting? I think I saw another hand raised. Mr. Frege, you have the floor. Fair. We're there. Mrs. Corse, who will take your question first. Cortez, is the question right? It is actually in the financial review, which is included in the full year results. And then you find it a bit further than last year, but you find it also in the annual report. But it is in the press release. Have you found the answer? I think that's only the organic operating profit of 9.9%. I'm talking about the organic EBITDA growth. It's 12 of the press release. EBITDA growth of 9%. Is that organic? So you have the two lines with the reconciliation between the two. Okay. Mr. Freke. I would suggest and advise you to examine other interesting markets and family companies such as Illy and Lavazza. They're wonderful coffee brands and they're very compatible with Heineken and they might cost €400,000,000 or €1,000,000,000 And those might be nice add ons because you'll find them in other food and beverage venues together with Pepsi, you might add coffee. Well, this would be a nice addition to a previous item on the agenda because now we're talking about the performance standard and remuneration for that. Who else would like the floor? If nobody does, then we will proceed with a vote. I propose that we replace the previous performance standard also to the tune of 25% over the long year remuneration starting from the performance period from 2017 to 2019. We're going to proceed with the vote. Will the voting operator please activate the system? Please cast your vote. The vote is closed. And this item has received 99.35 percent of the votes in favor to replace the performance standard concerned. Now on to item 4 on the agenda, ladies and gentlemen. That's the reappointment of the external auditor for a 3 year period. According to Article 13 1H in our articles of association, the reappointment of the external auditor needs to be submitted to the approval of the Annual General Meeting of Shareholders. The current external auditor, Deloitte Accountants BV, was appointed at the Annual General Meeting of Shareholders on April 24, 2014 for a 3 year period. So for the financial years 2015 through 2017, As a company, we have assessed the performance of Deloitte Accountants BV as its external auditor and the Senior Director Global Accounting and Reporting. Also did this evaluation. Finance managers at the main operating companies provided input for the assessment by means of questionnaires. The main conclusions of the assessment have been discussed with the Executive Board and subsequently in the Audit Committee and the Supervisory Board meetings given the positive outcome of the evaluation, Deloitte Accountants BV as our external auditor. The Supervisory Board proposes reappointing Deloitte Accountants BV's external auditor for an additional 3 year period. So for the financial years 2018 through 2020, who would like the floor on that topic? Nobody? Then I propose that we vote on this item. Would the voting operator please activate the system? Please cast your vote. The glass is full, the proposal has been adopted with 99.69 percent of the votes on to item 5 on the agenda, the reappointment of Mr. Jean Francois von Bruxner as Member of the Executive Board. Ladies and gentlemen, in keeping with the reappointment schedule drafted by the Supervisory Board, the Supervisory Board has made a non binding recommendation for reappointment of Jean Francois Boxneur to take effect from April 2017 for a maximum period of 4 years, I. E. Until the end of the Annual General Meeting of Shareholders in 2021. The Supervisory Board proposed reappointing him given his international experiences, leadership skills and the way he performs his duties day after day as CEO. The Supervisory Board has reappointed Mr. Van Bokksmier as Chairman of the Executive Board and CEO subject to his pre appointment by you. Who would like the floor? Mr. Jorna. Mr. Jorna from the VEB. The VEB is delighted that Mr. Von Bochsmeer will continue for a few years. He's going grayer and grayer compared to a few years ago, but we hope that his health will remain excellent. We were surprised because each time Mr. Von Boxsmith is reappointed, last time, we had a debate about the retention compensation. And Mr. Das, fervently advocated that he would need a substantial retention compensation to remain with us. This year that hasn't been raised, so I would say that he's delighted to stay here with his good compensation. But I would like you to confirm that there are no special agreements that if Mr. Van Bochsmeer is to retire early or there's another benefit that comes up or other types of agreements. I don't want any more rabbits pulled out of a hat in the next 4 years. We'll have our delicious beers and there are no special agreements aside from the remuneration policy that has been disclosed to U. S. Shareholders. Are there any other questions? If not, I would like to open the vote on this proposal. Would the voting operator please activate the system? Please cast your vote. I note that with our North Korean results of 99.96%, This reappointment has been approved. Congratulations. Thank you, Mr. Chairman. Now that takes us to 6A on the agenda, which is the reappointment of Mr. Martin Dass as member and delegated member of the Supervisory Board in keeping with the articles association and the reappointment schedule. The Supervisory Board has made a non binding recommendation that Martin DAS be reappointed as Supervisory Board member with effect from April 2017 for a maximum of 4 years. So once again until the end of the Annual General Meeting to be held in 2021. It is also proposed that Mr. DAS be reappointed as delegated member of the Supervisory Board. You will read information about Mr. Duss in the explanatory notes and you will have enjoyed his presence here again today. The Supervisory Board proposes reappointing Mr. Duss in view of his Board's legal experience, his contributions to the Supervisory Board meetings and his contributions to the remuneration committee and the preparation selection appointment committee. Who would like the floor on this, Mr. Jorna? I think you're on a roll. Well, I thought I'd settle now. I think we're talking about Heineken's uncrowned king, Mr. Das. Yes, that had to be said. Of course, Mrs. De Carvalho Heineken is the real boss, but Mr. Das follows closely. He's wearing 3 hats. He's a Supervisory Board member. He'll be the Chairperson of the holding and he's also decisive and leading Aetna Screen. And we also note that since 1994, He's been performing well in this type of office. No quibbles. But the Filmanin code prescribes knowing when it's time to step down. And that's what we wanted to share with you. We would like to ask the holding how about recommending somebody else, perhaps the young Caravallo might be ready for that. Of course, he doesn't have a law degree, but he does know a lot about beer. So in that sense, perhaps you could rejuvenate here as well, but we will be voting in favor because we have no choice. We'd lose anyway. You're familiar with our position. They align largely with what Mr. Jorn has said. We take a different view of independence and exceeding terms of appointment when we talk about appointing and reappointing Mr. Duss as well as the as well as because he is the Chairman of the remuneration committee, unfortunately, we'll be voting against. We'll give him our shoulder to cry on after this disappointing statement. Are there any other remarks? Mr. Foss. I'm Mr. Foss on behalf of the Foundation for Legal Protection for Investors. You won't be surprised that as the junior assistant of this foundation, I'm going to strongly advocate experience and old age. I'm absolutely delighted that all of you feel otherwise because as supervisory board members, you would certainly be remiss in your policy if you were to recommend somebody who was not up to the job. Age in years is meaningless. It should the years should be on the calendar. We consider capacity, experience, skill and contribution to committees such as these. So I wholeheartedly support the reappointment of Mr. Dass on behalf of the Stifel Foundation. Thank you very much. Are you better, Martin? Ladies and gentlemen, if there are no other comments, let's proceed with the vote. Would the voting operator please activate the system? And would you please cast your vote? The boat is closed, and we note that with an excellent percentage of 95.62 percent of the votes, this proposal has also been adopted. That takes me to item 6B of the agenda, which is the reappointment of Mr. Christophe Navarre. In keeping with the articles of association and the rotation schedules, the Supervisory Board has made a non binding nomination for the reappointment of Mr. Christophe Navarre, a member of the Supervisory Board effective from 28, April 2017 for the maximum 4 year period. So once again until the Annual General Meeting of Shareholders in 2020 one. We'd like to appoint him because of his extensive experience in beer and spirits, his knowledge of marketing and his contributions to the Supervisory Board meetings and to the Americas Committee who would like the floor on that topic. I have a question. Please state your name. You know my name. I'm Spanier. Well, there's a recording. This is for the recording. I've got a question. Why does Mr. Naval want to be reappointed? What is his reason to continue for another 4 years? I'd like to hear that. Well, we'll give him the floor for that. Mr. Navarre? That's a very good question. Sorry? You almost asked. Okay. Well, I think it's not up to me to answer this question. I think it would be better if the Chairman answer because, okay, my position in the industry, I've worked during 8 years for ABI in the whole time. It was Interbruv. And then I moved to LVMH in charge of Hennessey, a big brand in the United States and in Asia. And I was appointed 12 or 13 years ago Chairman and CEO of Maitre and Cite MH of LV MH. And I'm running around the world and meeting a lot of people in the industry. And there are close relations between the spirits industry and the beer industry. And I think I try to contribute as much I can to the success of this wonderful brand. And I would like to mention that Mauthanasia launched Heineken a long time ago in France. Well, we're delighted if you will support the proposal that we're going to open the vote on. Would the voting operator please activate the system? Vote is closed. And we are delighted that Mr. Naval has been reappointed with 99.62 percent of the votes, so he's been reappointed to the Supervisory Board. Ladies and gentlemen, that takes almost to the end of this agenda, but I have a few announcements left for you. First, this is the farewell of our Chairperson of the Audit Committee and member of the Supervisory Board, Mr. Henk Scheifers, who will be stepping down from the Supervisory Board in 2013. He was appointed as Member of the Supervisory Board and on your behalf as well as on behalf of the other executive and Supervisory Board members, I'd like to thank him for everything he's done for the company. In addition to his contribution to the supervisory board, he's always invested a lot of energy in the audit committee and have chaired it for the past 3 years. We'd like to thank you very much for what you did and how you did. We will miss you and our sincere gratitude. Ladies and gentlemen, there are 2 other persons. You may not see them at these meetings, but they're always very important. First is our Secretary to the Executive and Supervisory Boards, Ernst von Neewirt, who is on a dazzling career, but he prepares a lot of shareholders' meetings and other things. He's done an excellent job and exemplifies career development policy within Heineken because he held this position for only 4 years, but has done so well that he is now going to become the firm's Chief Legal Officer. So he will leave us in his present capacity. On behalf of the executive and supervisory boards, I'd like to thank him. He's over there. Please rise. And we'd like to thank him for all his excellent work. And he will be succeeded by just to show you that Heineken appreciates diversity at all levels by Leonis Simon's up and coming law graduate and we'll be able to ask her all kinds of questions about how things we stand as well. Leonie, please rise as well. Next, somebody else will be leaving us who for 20 years has been extremely important, Jose von Greig. Jose, where are you? That's where she always is, behind the scenes, backstage. For 20 years, she has been extremely important for all practical organization of shareholders' meetings. And she has liaised with all kinds of internal and external parties. Jose, I'd like to thank you for your excellent work. And we will now present you with a lovely bouquet. Ladies and gentlemen, I'm going to conclude the meeting officially, but stay in your seats. In a moment, we'll ask you to leave the room. And after all those virtual beers, I'm sure you don't mind. But I'd also like to tell you that the general meeting of Heineken Holding shareholders will start in the dinner room on the 4th floor, so not in this room. The hosts and hostesses will escort you there. For that reason, we'd appreciate it if you take the exit to my right and that is the quickest way to reach the dinner room, the banquet room. And shareholders of Heineken should surrender their voting boxes and voting costs. Heineken Holding shareholders should also surrender their voting boxes, but should keep their voting cards. And the hosts and hostesses will check their voting cards there and present them with a new voting box. So don't try to vote in that meeting with this voting box or it won't work and that didn't wasn't right. So thank you for coming. I'd also like to thank our listeners via the audio webcast. The Heineken Holding meeting will also be webcast. Thank you. Have a lovely afternoon and evening. Questions raised in English will be answered in Dutch, and there'll be interpretation. Those of you who are suffering from a hearing impairment, you can also listen to the proceedings of the meeting on Channel 1 through the headphones. And as we stated before and as we stated in the convocation of the meeting, the meeting will be webcast. So thank you. I'd like to proceed to the formalities of the meeting. I confirm the following. The meeting was convened on March 7, 2017, by means of a notice published on the Heineken website. March 23, 2017 is the record date for this meeting, which means that those entitled to attend the meeting and to cast votes are the shareholders who were registered as shareholders on March 23, 2017. And in the notice of the meeting, we've included the agenda. And the notice of the meeting specifies that the agenda, the explanatory notes, the annual report and the financial statements for the financial year 2016 as well as other data have been made available to the public at large on the company website and at the offices of Heineken. All the formalities have been complied with as required by the Association and the law, which is why we can take valid and due decisions with respect to the topics that have been announced in the convocation. The shareholders represented or present here today have submitted a proof of receipt from their institutions and the company has offered the shareholders the opportunity to provide an voting instruction by Internet, and this possibility has been used. I've just heard from the civil notary that 32 shareholders are present, 41 shareholders are represented and that 721 shareholders have voted on the Internet and 794 shareholders of, in total, 256,000,000 90,930 shares entitled to issue as many costs many votes, which is 88.91 percent of the issued capital they represented here. The resolutions passed today and the results of the votes shall be posted on the Heineken website within a couple of days. Shareholders can request the minutes of the meeting from the corporation and the minutes of the meeting shall be available within 3 months and will be posted on the website of the corporation. The meeting shall be attended by Civil Law Notary Meppelink of Neuhausen Neuf, and he's sitting on my left hand side, and he will supervise the vote. The meeting is also attended by the auditor of the company, Mr. Van der Berg, also on the left hand side of Deloitte's accountants. And furthermore, it says here, I don't know whether it's true, the meeting is being attended by representatives of the press. I would like to welcome all those present. Anybody who would like to take the floor at the meeting is requested to use the microphones in the room and to state his or her name as soon as I have granted him or her the floor. Any speaker that is speaking on behalf of another shareholder is also requested to inform us which shareholder he or she is representing. I reserve the right to limit the speaking time of shareholder if the meeting or the proceedings of the meeting give rise to such a decision. And once again, this year, we're going to try to use the voting handsets. Last year, that failed. But as soon as we're ready to vote for the first time, I'll explain how things work. This leads us to item 1 of the agenda, which is report of the Board of Directors for the financial year 2016. As usual, this meeting, we shall say a few words about the development of the lower share price of the Heineken Holding NV as compared with the higher share price of Heineken NV. Well, we see this in the discount on page 10. The discount moved between 14% 6% in the financial the fiscal year consent. And on the 30th December amounted to about 8%. Yesterday, the discount amounted to 6%. Historically, these values are normally normal to low. And on the graph, we can also see that the share price Heineken Holding NV in 2016 has share price share price had increased up to or in excess of EUR 66, I think EUR 67. Now we'll be discussing the report for the financial year 2016. You'll find that on pages 10 and following the financial report. Who can I give the floor? Mr. Vreka? Well, I'm extremely pleased and proud that this family company, the largest family owned business in the Netherlands with revenue of more than EUR 20,000,000,000 has been able to introduce Heineken 0. That just goes to show what corporate responsibility is and that you're actually listening to shareholders. In 2013, I said as much. I thought it was 2014, but it turns out it was 2013. And it's great that you were able to realize this within 5 years. And furthermore, I made a suggestion. I'm crazy about family owned businesses. And in terms of beer, of course, the growth isn't that impressive. And I said to Mr. Polman, the CEO of Unilever, I said, I advise you to make sure that La Vazsa Is it not working? It's on Channel 5. Channel 5, is it working? For me because I don't exercise it every day. I'm very proud at this company because it's one of it's the largest family business in the Netherlands with a turnoff of more than €20,000,000,000 That's absolutely great. And I'm also very proud. In 2013, I asked in the annual meeting to start with Heineken 0, and it took only 4 years to realize Heineken 0. I suggested to Mr. Paulman of Unilever to buy either La Vazza or Elip. He did listen to me. And now he is in big trouble. He prefers tea to coffee. He said tea is the worldwide market. But I feel that for Heineken, La Vazza or Italy might be very, very interesting. Well, furthermore, in the field of sustainability. Mr. Freker, I'm sorry. I have to interrupt you because you are making all these valuable suggestions that you already made at the Heineken N. V. Meeting. And indeed, that was the appropriate place to make those suggestions. It is indeed tradition that anything that has to do with business operations, with running a business and possibly making changes to that, that, that be addressed in the meeting of the company that is in charge. And we shouldn't be doing that in the holding here. And here, we're particularly focusing on the function of the holding, which is not running the business because the NV runs the business. So I'd like to thank you warmly for your positive contribution, but I don't think it's very useful to repeat the suggestions that you made in the previous meeting. I think the interpretation is working now. So if you'd like to say something, you can say it in Dutch. I would urge you to keep in mind that anything that hasn't got to do with the company is to be addressed here and anything that has to do with the company with the NV. I need some time to think about this. I'm just going to take a time out. That's fine. I'm sure there'll be another item on the agenda in which you might find it useful to say a few words. Would anybody else like to comment on the Board of Directors report. Mr. Jonna. Thank you, Mr. Chairman. Jonna, on behalf of the VB, the Association of Stockholders, I shall not repeat myself because we already know what the results are. Yesterday evening, when I was enjoying an African beer, I thought, why shouldn't I sell my shares NV and buy the holding shares? I get the same dividend. I get Mr. Das in both meetings, so there's no difference there. I get the exact same dividend. So why wouldn't I buy holding instead of the NV? Could you explain? I can't explain why you shouldn't buy holding shares, but I can explain why you should buy holding shares for the exact reason. You can get the dividend at a lower price. And the share price development, I mean, in general, has been favorable over the past few years, the beginning of the century, when we still had legal proceedings before the Enterprise Chamber, the discount could increase up to 30%. But that is a matter of the past. So if you buy the shares now with a discount, you will get the same value at a lower price. And if you look at previous years, there's no reason to fear that all of a sudden there'd be an increase in discount, which would impair the value of the share. Should we then say that we're really clever people and the others aren't that clever? Oh, I wouldn't venture to say, but I think it's a good idea to buy holding shares. Are there any questions about the report of the Board of Directors? If not, I think we can adopt it and take it as information. Now implementation of remuneration policy for members of the Board of Directors. In 2005, the general meeting of shareholders has approved the policy regarding the remuneration of members of the Board of Directors. And this policy entails that the remuneration of members of the Board of Directors is equal to the remuneration of the members of the supervisory board of the Heineken MV. And for 2016, this boils down to a remuneration of €90,000 per year for the chair and €60,000 per year for the remaining members of the Board of Directors. So information regarding the implementation of this policy in 2016, I would like to refer to footnote 33 in the explanatory notes to the consolidated financial statements and it this shows that these amounts were indeed paid out. According to legislation, this item of the agenda is a discussion item. It's not a voting item, so it can be discussed. And my question is, who would like to take the floor on this matter? Nobody. So I suggest that, we conclude the discussion and we proceed to the next item on the agenda, which is the adoption of the financial statements for the financial year 2016. The financial statements drafted by the Board of Directors has been printed on page 20. Following the annual report, the audit has been done by the Deutsche Council, so you'll find the opinion of the auditor on Page 104. Who would like to take the floor about the financial statements? Well, then I suggest that we proceed to decision with regards to the financial statements, and we shall do so by means of the handset. I shall ask this voting operator to activate the system. And if all goes well, your display should show a word of welcome and your name. And now I have to request you to insert your voting card with the gold color chip facing towards you. As soon as the vote is opened, the display will show the different options for the vote. And if you don't see that, perhaps you should raise your hands so we can help you. Throughout the meeting, you can leave your voting card inserted in the handset. Well, I think everything works. Nobody's protesting. If you wish to vote in favor, please press button 1. If you wish to vote against, press button 2. And if you wish to abstain from voting, please press button 3. So I declare the vote open on the financial statements 2016, and I would request you to cast your vote by pressing the button of your choice. Yes, we can't hear the noise of the glass that is being filled or the beer poured into the glass. It took about 10 seconds at the previous meeting before the glass is poured full. Those 10 seconds have passed, so I can close the vote. The vote is closed, and this is where we see the result of the vote. This proposal to adopt the financial statements has been carried with 99.98% of the votes. Item 4 of the agenda is the announcement of the appropriation of the balance of the income statement pursuant to the provisions of Article 10, paragraph 6 of the articles association, which say that the dividend received by the holding will be passed on to the shareholders of the holding. And this is a provision in the articles association. This is something we don't need to vote on. The dividend for the financial year 2016 amounts to €1.34 per common share, nominal amount of €1.60 On 11th August 2016, an amount of €0.52 was already made payable as an interdividend and the final dividend will be paid out as per the 3rd May 2017 at the EBN AMRO Bank in Amsterdam, which is €0.82 And as per the 24th April 2017, the shares will be listed at the stock exchange of Euronext Amsterdam ex dividend. Item 6 of the agenda, discharging members the Board of Directors in the financial year 2016, which is item 5. Right, says the Chairman. Item 5. We will be discussing the proposal to grant discharge to the members of the Board of Directors for their management in the financial year 2016 as reflected in the financial statement. Who can I give the floor? Okay. So now we can put this to the vote, this proposal to grant discharge. The road is open, We're improving. Things are going really nice and smoothly. Thank you for that. The vote is closed. And I confirm that the proposed autograph district to members of the Board of Directors has been carried with 99.97 percent of the votes. Item 6, the agenda. There are 3 sub items here. Here, we'll be dealing with the authorizations that we deal with every year. First of all, the annual authorization to the Board of Directors to purchase its own shares under the conditions specified. And this is an authorization was granted last year, and it's necessary to grant this authorization every year in order to make sure that it is not discontinued or eliminated. I'd like to put this to the vote. The vote is open. Vote is closed, and the proposal is adopted with 99.97 percent of the votes. Now 6. Here, we're dealing with the proposal regarding the authorization of the Board of Directors to issue rights to shares, and this is an authorization that was always granted in previous years. And the proposal is to extend this authorization. We would like to take the floor on this item. We'll put it to vote then, and the vote is open. You're requested to cast your vote. And the proposal has been carried with 99.72 percent, a disappointing 99.72 percent of the votes. 6C now. This is the proposal concerning the authorization of the Board of Directors to restrict or exclude shareholders' preemptive rights with regards to the issuance of shares under the conditions specified in the explanatory note of the agenda. Once again, this is an authorization that is granted each and every year and it's necessary to extend it in order to make sure that it doesn't lapse. Nobody would like to take the floor regarding the proposal. We'll put it to vote. The vote is open. I'm requesting you to cast your vote. The vote is closed, and the proposal has been adopted by 99.68 percent of the votes cast. Now item 7, the agenda. The reappointment of the external auditor for a period of 3 years. The current external auditor of the corporation, Deloitte Accountants BV, was appointed at the General Meeting of Shareholders at the 24th April, 2014, for a period of 3 years, financial years 2015 to 2017. There's been an evaluation of the performance of Deloitte Accountants BV as the external auditor of our corporation and of Heineken NV. And this is an evaluation performed by the audit committee of the supervisory board of Heineken NV. The most important findings of this evaluation were discussed at the meeting of the Board of Directors of Heineken NV. And based on the positive outcome of the evaluations of Deloitte Accountants BV as external auditor, the corporation proposes to reappoint Deloitte accountants as external auditor for the period of 3 years, financial years 2018 to 2020. You would like to take the floor on this proposal? I propose that we proceed to vote. The vote is open. The vote is closed and the proposal has been adopted with 99.99 percent of the votes. I congratulate the gentlemen from the auditor with their reappointment. That takes us to item 8A on the agenda. And I'm going to hand over the chair of this meeting to Mrs. Christ for this item. Thank you, Mr. Dass. I propose the reappointment of Mr. Das as nonexecutive member of the Board of Directors for a maximum of 4 years in connection with his resignation at the end of this meeting according to the rotation schedule in 1994. Mr. Das was first appointed as a member of the Board of Directors in 2002. He was appointed Chairman. Mr. Das became a non executive member of the Board of Directors when the 1 Tier Board was introduced in 2012. It is proposed that Mr. Dust may reappoint given his broad legal experience and the way he performs his duties as member of the Board of Directors. The Board of Directors has reappointed Mr. Duster, Chair of the Board of Directors, subject to his reappointment as a non executive member of the Board of Directors. Who would like the floor on this item? Yes, Mr. Espana for the minutes. My question is why are you going to appoint somebody who already wears 3 hats? It boggles the mind. I'd like you to answer that. And I don't understand why Mr. Dass is driven to continue for another 3 years, says the speaker, because we just have Mr. Schieffer, who knew when his time was up. And for Mr. Schafer, it was yesterday and today at various companies. So I'd like to hear more about how are we going to deal with this one. Mr. Spania? The opinion is that the Priority is very satisfied with Mr. Duss and does not believe that his time is up yet. They're very satisfied with the way he performs his duties and that's why they're recommending that he be reappointed. As for his 3 hats he wears, as you know, Heineken Holdings' purpose is to safeguard independence, continuity and stability of the Heineken Group. One consequence of this is that we have structured this so that some people do wear 2 hats. Mr. Das is the delegated member of the Supervisory board of the NV Company. He's also a member of the Heineken Holding Board of Directors. The reason for this choice was to serve the purpose of Heineken Holding. But the objective of Heineken holding, there's somebody else who serves both here and on the NV. Couldn't you say, we'll have somebody else chair the Board, somebody who's independent? Because he's wearing 3 hats. Well, I'm trying to figure out which 3 hats you mean. It's true that Mr. Das, officially according to the old and the new corporate governance code, would not be regarded as independent. The reason for this, in our view, is formal. Prior to his appointment, he was a partner of an office that advised the company. That's one reason why he's not considered to be independent. Another reason why he's not considered to be independent is that he had an executive role before the holding became a 1 tiered board. And he was there was an executive board and a board of directors. Everybody had an executive role now. There are 2 people who have an executive do have executive duties and Mr. Duss is not an executive member. And according to the code, Mr. Duss might not be independent, but we believe that Mr. Duss' role is independent. But I agree that formally that's not true, but the Priority has decided to make this nomination and that's what I'd like you to vote on. That's unfortunate. Mr. Yarden. Let me disillusion you. I just explained the 3 hats in the end base. So that's known and it wasn't refuted. If you consider Mr. DAS' office in large green, then you can note that he can hardly be labeled he can be labeled as not really independent. So officially, you're right, but not based on the gist of the Fangmarin code, which indicates that somebody should be appointed to 1 Tier Board for 2 4 year terms. If you think he's indispensable, you can extend that once more. But then you and then you can do another 2 years extension, but that's it. According to the gist of the FAMACON code, you want some trickle down and you don't want an old boys network and you're basically cuddling Mr. Dust to death according to this code. I hope not. But I'm sure you understand that there's a transition provision for Board members eligible for reappointment in 2017. And that's the case with Mr. Duss. And in that case, the old arrangement of 3 times a 4 year term applies. So the priority is acting entirely as provided for by the corporate governance code. Would anybody else like the floor on this proposal? Then I propose that you just wait a moment. 3 times 4 years. Does that mean that Mr. Duss can remain in office until 2029? I don't object. You're anticipating things. You're getting ahead of the situation. I propose that we merely decide on the reappointment that is now up for the vote. This is Mr. Dess' second reappointment. So that would take us to 2025. I don't think anybody said that. I propose that you decide on the proposed reappointment. Please cast your vote by pressing the button of your choice. The vote is closed. I note that the proposal to reappoint Mr. Das has been adopted with 90 0.56 percent of the votes, and I congratulate Mr. Das on his reappointment. And I'm pleased to and sharing the meeting back to him as well. I'd like to thank the meeting for their confidence in me and for the I'd like to thank my fellow Board member for congratulating me and for her excellent chairing of the meeting. Now on to item 8B, which is the proposal to reappoint Mr. AAC, also Alexander de Carvallo as a nonexecutive Board member. The microphone is switched off. The speaker, interpreter apologizes. Microphone has been switched off. As non executive member of the Board of Directors, It is proposed that Mr. Carvallo be reappointed given his expertise in the beer sector as executive of Lagunitas Brewing Company and how he has performed his duties as a member of the Board of Directors. His reappointment would also continue the tradition of personal involvement by consecutive generations of the Heineken family in the Heineken Group, Who would like the floor about this proposal? Mr. Freke? As you know, I'm in favor of family companies, which are run by a huge family. And especially, due to the fact that it's run very professional here and it's one of the major brands in the Netherlands. I've noticed that Mr. De Carvalho is very sensitive, open minded, has a focus on sustainability and health. And Well, I wonder what his motivation is to go for another period of 4 years. Can you explain that to us? Mr. Knoio, are you prepared to give this explanation? Thank you for the question and for the compliments. I think it's the greatest honor to be able to have served 4 years already on the board. I think I've been working to be in a position to be suitable for this position for 32 years. That's how I think about it. And being part of this company and being able to represent all shareholders, all stakeholders throughout everything that we touch is one of the most important things for me, for the family and I hope for all of you. And the opportunity to have another 4 years of being involved in such a fantastic business is what I'm looking for. You have a broad experience in the field of mergers and acquisitions. You work for Mr. Freke, the idea is not to cross examine, Mr. Caraballo. You asked about his motivation. He provided an excellent reply. I think that we should conclude this section of the Q and A. If you have other observations, please share them. But otherwise, I would like to proceed with the vote. Mr. Duss, I think you're too rigid. You're perfectly entitled to your opinion, but I would like to maintain the order of the meeting. And I think that you were basically, approaching the limits by asking the candidate about his motivation. Another request in 2014, Sister Carvallo did an interview. It's nice when people who have such an exemplary role in society grant interviews about their extensive experience. So I'd like to invite Mr. De Carvallo to do likewise. We'll certainly take your suggestion on board. That wasn't a question, but it was a suggestion. Would anybody else like the floor on this item? If not, then we're going to open the vote. I now open the vote and request that you please cast your vote. The vote is closed. And the proposal has been adopted with 91.35 percent of the votes. I'd like to congratulate Mr. De Carvallo.

• Slides