3 I L Mr. Heineken on the company's 1986 results: "The company again experienced a satisfactory year. The sales volume grew further. Higher sales in our prin cipal markets - Europe and the United States - made a substantial contribution to this growth". These were the words used by Mr. A. H. Heineken, Chairman of the Executive Board, to sum up the 1986 results at a press conference to mark the publication of the 1986 Annual Report. Hsineken in Europe Italy Spain France i j Ireland 1 Future prospects "It was a satisfactory year Forl986asa whole the company increased its net sales to almost 6.7 billion guilders. The increase was due to three factors: an excellent summer and (partly because of that) higher beer sales, the acquisition or expansion of interests in a number of breweries and the fact that those interests were taken up in the conso lidated group accounts. Like all Dutch companies, Heineken N.V. uses the guilder as its reporting currency. The net profit of 285 mil lion guilders (20 million more than in 1985) was adversely affected by the guilder's strength on the foreign exchange market. Declines in ex change rates of local currencies such as the Singapore dollar, the Greek drachma and a number of African currencies deflated local sales and results when expressed in guilders. Last year Heineken's capital expen diture amounted to some 600 million guilders. The bulk of this money was spent in France and Spain, where a radical restructuring process is under way, and also on the operation to renew bottles and crates in the Netherlands. What sort of a year did our operating companies in Europe have in 1986? We have dipped into the pages of the annual report and noted the follow ing comments about Spain, Ireland, France, Italy, the Netherlands and Greece. Stout. The Heineken brand in parti cular developed favourably and this growth is expected to continue in the years ahead. For Birra Dreher S.p.A. 1986 was characterised by an upward trend in sales of the Heineken and Dreher brands. The fine weather during the summer and autumn was an impor tant contributory factor. Dreher was also able to increase its market share. Last year Dreher also increased its stake in the Sardinian brewery Sarde Produzioni Agricole Industriali (S.P A.I.) S.p.A. to 70%. Storage tank capacity was increased in the breweries in Popoli. Pedavena and Massafra. The keg-filling line in Popoli was automated. improvement in the 1986 results. This trend is expected to continue. El Aguila took a number of outdated beer brands off the market last year and launched two new brands: Aguila Pilsener and Adlerbrau. El Aguila also started to import Heineken beer. During the year under review exports of Heineken beer to Spain more than doubled thanks to a hefty drop in the import duty on beer. That drop resulted from Spain's accession to the EC. The reorganisation of the product range and the addition of the Heineken brand have significantly strengthened El Aguila's market position. Three outdated breweries were closed down and improvement pro grammes were initiated at the brewe ries in Algete, Zaragoza, Cordoba and Valencia. Despite a declining beer market, Murphy's Brewery (Ireland) Ltd. achieved higher sales last year, both for Heineken lager and for Murphy's Almost all the brands marketed by Sogébra S. A. booked higher sales last year. The Heineken brand grew strongest of all. In 1985 a start had been made on a comprehensive programme of restructuring, which will entail the modernisation of five breweries (Drancy, Marseilles, Mons- en-Baroeul, Mutzig and Schiltig- heim) and the close-down of three breweries and one bottling plant. The four unprofitable production units have meanwhile been closed. The consequences for employees have largely been migitated by retraining schemes and transfers within the business. The higher sales and the first fruits of the restructur ing have brought a considerable Beer consumption in the Nether lands increased in 1986, thanks mostly to the better weather. Heineken Nederland B.V. profited from this increase and achieved higher sales. Sales in the take-home market showed a slight decrease. In the hotels, bars and catering market our position was strengthened. During the final quarter of last year a start was made on the change-over to the new 30-cl bottles and new crates. The growing popularity of canned beer led to the installation of a new canning line at the brewery in 's-Hertogenbosch. Soft drinks sales, both in the take- home and in the hotels and catering sectors, developed favourably be cause of the fine summer. The Dutch market volume for spirits revealed a disappointing trend last year. None the less, the Gedestilleerd en Wijn- groep Nederland B.V. (Spirits and Wine Group Holland) succeeded in improving its result. The structurally unfavourable trends in the spirits market have led to the proposal to close the Bokma unit in Leeuwarden. Mr. A.H. Heineken: 1986 was a satisfactory year Several years from now, its produc tion will be transferred to our unit in Zoetermeer, which already produces part of the Bokma product range. Athenian Brewery S. A. also benefited from the favourable weather during the summer period. The overall beer market grew, and that growth meant that Athenian Brewery S.A. was also able to increase its sales. For the first time ever, more than 2 million hecto litres were brewed within one year. No forecasts can be made about the company's sales and results in the Net profit (in millions of guilders) 153 198 229 265 285 1982 1983 1984 1985 1986 Beer sales in Europe (in millions of hectolitres) 1982 1983 1984 1985^1986 Geographical breakdown of sales of beer brewed under the supervision of Heineken (in millions of guilders) 25.5 Europe 6.5 Africa 2.4 Asia/Australia/Oceania 7.7 Western Hemisphere Geographical breakdown of personnel (numbers) 6,187 The Netherlands 674 Western Hemisphere 4.094 Asia/Australia/Oceania 6.693 Africa 11.101 Rest of Europe J near future. At the press conference Mr. Heineken explained why: "Heineken is a company which does not produce on the basis of long- term orders in hand. In other words: our short-term sales hinge on a great many external factors. Consequently, it is impossible for us to express any concrete expectations as to the level of our sales and results over the short term". We seek openings for further growth all over the world. In static markets we endeavour to gain market share, but in addition we try to build up a presence in countries where per capita beer consumption is on the increase. Good opportunities exist in South America, particularly in Brazil and Argentina. But expectations for countries like Spain and Italy are also very encouraging. Looking to the future, the question that is certain to arise is how much impact can be expected from the European Court's ruling on the beer legislation in the Federal Republic of Germany. The court ruled that the beer law, which tended to protect local German breweries, could no longer be used to restrict imports of beer from other EC member-states. Will Heineken also be starting up operations in the German beer market? Mr. Heineken's stance on this is as follows: "The situation's not yet entirely clear. But, once the dust has settled down following the heat ed debate in Germany, our company will take another closer look at its strategy. The crucial factor will be whether the German market offers commercially attractive opportuni ties. We'll be taking our time before deciding on this", says Mr. Heineken.

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Heineken International Magazine | 1987 | | pagina 3