Report of the Board of Managing Directors
Introduction
The strength of the enterprise has again increased
in the financial year 1977/1978, although in some
markets the developments were less favourable
than desired. The demand for our products is still
growing, both in the Netherlands and abroad.
Our engineering and technological know-how, ac
quired by many years of experience and intensive
research, is not only utilized to manufacture quality
products efficiently ourselves. We also exploit this
knowledge by making it available to affiliated en
terprises and licensees.
Our profitability enables us to maintain a healthy
financial position even at a high level of investment.
Turnover and profit
The Group has shown a satisfactory development
in the past financial year.
The consolidated turnover rose by 8.2% from
N.fl. 2,470 million to N.fl. 2,672 million.
The consolidated statement of income for
1977/1978 closed with a net profit of N.fl. 118.7
million compared with N.fl. 109.6 million in the pre
vious financial year, a rise of 8.3%.
The profit per share of N.fl. 25.par value
amounted to N.fl. 10.27 compated with N.fl. 9.48 for
the previous financial year, allowing for the 25%
bonus distribution on February 20, 1978.
If the dividend proposed for this year is approved,
the dividend per share will amount to N.fl. 3.50
compared with N.fl. 2.80 for the previous financial
year, allowing for the bonus distribution.
Participations
The block of shares in Alsacienne de Brasserie
S.A. (Albra) which was held by Malayan Breweries
Ltd. was acquired by us towards the end of the
financial year.
Our participation in Albra now amounts to 99.4%.
Financial year and reporting
It will be proposed to the General Meeting of Sha
reholders to be held on January 9, 1979, that the
financial year should henceforth be closed on De
cember 31. For that purpose it will also be propo
sed that the financial year 1978/1979 should cover
a period of 15 months, namely from October 1,
1978, to December 31,1979.
In the Annual Report for 1977/1978 now issued we
have somewhat changed the arrangement of the
report by the Board of Managing Directors by re
grouping a number of subjects. In doing so it is our
aim to make the reporting more easily accessible.
Political and economic climate
Inflation continued in our main operating areas. The
price measures taken by government authorities,
mostly on account of inflation, were generally
maintained and in several markets they were even
further reinforced.
It is clear that for our enterprise, too, such a deve
lopment may lead to an unacceptable pressure on
margins.
In the United States, our most important export
market, we were faced with a dock strike which
caused an interruption of hitherto unprecedented
length for us (more than two months) in the ship
ments intended for this market.
As a result of the shortage of foreign exchange in
various countries where we have participations, it
was not possible to import enough raw and auxi
liary materials and maintenance materials into tho
se countries.
As in previous years, we experienced the adverse
effect of trade barriers such as quotas and import
bans.
In many developing countries the government en
deavours towards increasing local participation in
capital and management of foreign firms continued.
This desire is perhaps explicable from the angle of
the domestic politics of the States concerned; the
consequence is, however, that whilst on the one
hand foreign businessmen are encouraged to in
vest in these countries, on the other hand the risk
must be recognized that interests thus obtained
will subsequently again be removed from the con
trol of the investors.
In a number of our enterprises we, too, have to
deal with these problems. In most cases it can be
said that hitherto it is a process which is procee
ding gradually.
