Report of the Board of Managing Directors At the forthcoming Annual General Meeting of Share holders Jonkheer O. A. E. E. L. Wittert van Hoogland will be retiring as a member and Chairman of the Supervis ory Council. For over 33 years Jonkheer Wittert has devoted his energies to the enterprise in various posts, including that of Chairman of the Board of Managing Directors. During this period he has made a substantial contri bution to the prosperous development of the Group. We should like to express our deep gratitude here for the many valuable services rendered to the enterprise by Jonkheer Wittert. Course of affairs The course of the financial year 1980 was different from what we had foreseen. Whereas we had hitherto assu med that owing to the international nature of our ac tivities negative and positive movements would to a considerable extent have an offsetting effect, unfavour able trends were unfortunately clearly dominant during the year under review. Admittedly the consolidated turnover rose by 12.4% from N.fl. 2,873 million in 1979 to N.fl. 3,230 million in the year under review, but the net profit fell by 33.9% from N.fl. 125.7 million to N.fl. 83.1 million. Sales of beer brewed under the supervision of Heine- ken increased by 5.4% to 25.9 million hectolitres (1979: 24.6 million hectolitres). These figures reflect trends of a structural, cyclical and also incidental nature. In a number of markets important to us the growth of beer consumption - as we have pointed out on several occasions - is showing a certain sluggishness. This situ ation, together with an increasing interest shown by other breweries in the international beer market, is caus ing an intensification of competition. Consequently, and also as a result of government measures, it was often not possible to adjust prices to inflation and cost in creases. In addition to the tightening of margins, a significant element of the decline in profit is attributable to the course of affairs in the United States. Although the sales of our beer at consumer level were virtually maintained, our shipments to that country were below the 1979 fi gure, mainly because the trade proceeded to a reduc tion of stocks due, amongst other things, to the high rates of interest. The spectacular growth of the sales of Heineken beer over a period of many years has naturally attracted competitors in the import segment. It is gratifying, ho wever, that the image of the Heineken brand in the eyes of the American consumer has evidently not been af fected. We trust that we shall benefit from this when the economic climate has recovered. During the spring and the summer we were confronted by bad weather in the European countries where we operate. Nevertheless, our beer brands developed reasonably in the Netherlands market, which is a source of satisfac tion in the light of the difficult economic situation. In the Netherlands, the weather has only a limited effect on beer consumption. In the South European countries consumption is much more subject to seasonal influen ces. Overall, the detrimental effect of weather conditions on the financial results was nevertheless relatively large, because the profit contributions of the marginal sales are the greatest. Despite great efforts our earnings in France are still far removed from a positive result. The substantial depth investments in recent years will enable Heineken beer to be produced locally in 1981. By taking drastic measures we are endeavouring to achieve profitable operations in the long run. The consolidated figures were only slightly affected, comparatively, by changes in the Group shareholding relationships. In Italy the entire share capital of the brewery Moretti Sud S.p.A. at Popoli was acquired; in the meantime the name has been changed to A.Ti. Dreher S.p.A. Through the purchase of several blocks of shares we increased the holding in Antilliaanse Brouwerij NV at Willemstad, Curagao, from 31.4% to 46.4%. We also acquired a minority interest in Desnoes Ged- des Ltd., our licence partner in Jamaica. In Brasserie Lorraine S.A., In Martinique, we have in creased the interest from 40% to 58.1%. Our interest in Grande Brasserie de Nouvelle-Calédo- nie S.A. at Noumea was also increased, in this case from 28% to 76.5%. Via a public bid practically all the shares outstanding with third parties (over 28%) of Hotel de I'Europe NV in Amsterdam, the Netherlands, were acquired. This hotel will be completely modernized in phases. Heineken and society For enterprises the changes in society imply that more and more contacts are arising with institutions and groupings which were previously not immediately in volved in the business activities. Industry can only func tion optimally in this dialogue if - like its partners in the dialogue - it has the right to respond to and thus to join 11

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 1980 | | pagina 14