Report of the Executive Board
8
After nearly 40 years' service with our
enterprise Mr. J. van der Werf will be
retiring from the Executive Board at the
forthcoming meeting of shareholders.
We thank him for his fellowship and co
operation over a period of many years
and for his unfailing efforts, both in the
Netherlands and abroad, to further a
healthy expansion of the Heineken Group.
It is our sad duty to record the sudden
death on August 21, 1987. of Mr. L.A.Ch.
Rottier, General Manager of Vrumona
B.V. We shall always remember with
great respect his dedication and commit
ment to our enterprise.
1987 in brief
In view of the difficult circumstances in
which we had to operate, Heineken has
had a satisfactory year. At N.fl. 6,659
million, net turnover was virtually un
changed from the 1986 level. Net profit
was N.fl. 287 million, which represents
a fractional improvement compared with
the previous year's figure of N.fl. 285
million.
Geographical breakdown of sales of beer brewed under the supervision of Heineken:
(in thousands of hectolitres) 1987 1986 increase
Europe
25,168
25.512
- 1.3
Western Hemisphere
8,546
7,747
10.3
Africa
6,880
6.475
6.3
Asia/Australia/Oceania
2,446
2.372
3.1
43.040
42,106
2.2
These results must also be regarded in
the light of the increasing strength of the
guilder. The currency aspect not only
entails lower results when translating the
turnover and earnings of foreign Group
companies into guilders, but also affects
the Company's export position.
As a result of this, and owing to the inten
sified competition, the sales and margins
of Heineken beer were under pressure
on the import market in the United States.
Market data show, however, that con
sumption of our beers in the United
States has only fallen slightly. The decline
of our shipments was larger during the
year under review, so that stocks in the
distributive trade were reduced. In the
end, our position in the American import
market remained statisfactory.
The rise in the turnover and earnings of
most of our operating companies offset
the effects of somewhat lower exports
and of currency translation. In particular,
there were increases in Africa and in
several affiliates in Europe, whilst higher
earnings were also achieved in the Asian
and Caribbean regions. As a result of
this, a more balanced composition of the
earnings has been obtained, both struc
turally and geographically.
The effect of changes in the volume of
sales and in the extent of the consolida
tion on turnover and profit was modest.
Total sales of beer brewed under the
supervision of Heineken rose by 2.2%
in 1987 to 43.0 million hectolitres. This
includes the beer output of affiliates and
the beer brewed under licence by third
parties.
Early in 1988 agreement was reached
to take over the remaining 49% interest
in the French holding company Sogebra
S.A. from our partner Compagnie des
Brasseries et Glacières Internationales
'B.G.I.' S.A. The transaction involves an
amount of approximately N.fl. 200 million.
Our 51 interest in Sogebra has already
been fully consolidated in the annual
accounts since 1984.
In Italy several important developments
took place during the year under review
in our operating company Birra Dreher
S.p.A. Through an exchange of shares
Dreher acquired an approximately 20%
interest in the share capital of Societa
Internationale Birraria S.p.A. and Nuova
Birra Messina S.p.A., whilst the latter
companies obtained a 7% interest in
Birra Dreher in the form of newly issued
shares. Dreher also increased its interest
in Sarde Produzioni Agricole Industriali
S.p.A. in Sardinia from 70% to 100%.
Heineken's interest in the glass factory
Bouteillerie de Kinshasa 'Boukin' in Zaire
