Prospects Heineken expects that the sales-mix
can be further enhanced by exploiting shifts in
consumer patterns in the direction of premium
beers and specialty beers. Even in beer markets
with zero growth this could lead to improved
margins and higher profitability. Part of the
growth of our premium beers will be realized by
further export growth. The continued focus on
cost control and efficiency will also play an
important role in the company's profitability.
Heineken expects results for 1998 to be higher
than in 1997. Whilst the US-dollar exchange rate
is more favourable compared with 1997. there are
uncertainties surrounding currency fluctuations
and activities in several countries in the Far East.
Added to this, unpredictable developments like
increases in excise duties and other governmental
measures and the weather, prevent a meaningful
prediction of the level of profit growth for 1998 at
this moment in time. Heineken continues to have
a favourable view of the company's longer-term
profit development.
In 1998 the net investments in tangible fixed
assets will amount to approximately NLG 800
million. This will be financed from liquid
resources available and from the cash flow, unless
external financing is more advantageous.
A sustained effort to produce cost-consciously,
will be reflected in a slight reduction of the
number of personnel in the existing breweries.
General Developments the success of our
Group is attributable to a combination of factors,
two of which are particularly significant: the
quality and vitality of our corporate brands
Heineken, Amstel and Murphy's and the high
level of efficiency at our breweries.
Corporate Brands
Sales of Heineken beer rose from 17.9 million
hectolitres to 18.8 million hectolitres. This
increase was realized among others in
the United States, Spain and Italy. Heineken is
available in more than 170 countries.
The Heineken brand celebrates its i25t]l
birthday in 1998. The strength of the brand has
been further reinforced over the past year.
This was partly thanks to more sharply focused
marketing communication and an enhanced
image at points of sale.
Considerable attention was devoted to
sponsoring activities. Links with tennis were
further intensified. Alongside the US Open and
the Davis Cup we are also involved with the
Australian Open and play a role in numerous
local tennis events. Meanwhile, for the third
successive year we sponsored the Heineken Cup,
competed for by 24 European rugby teams. These
activities contributed to an even stronger position
for Heineken as the world's most sophisticated
premium beer.
In music sponsorship, we started the Red Star
Concert in the United States. Heineken Music
Horizons is highly successful in Hong Kong.
In Europe audiences totalling several tens-of-
thousands attended the Heineken Night of the
Proms. The promotion of'Tomorrow Never Dies',
the new James Bond film, was also carried by
Heineken internationally. A '007' can, in the shape
of a beer keg was launched to coincide with this.
Apart from the '007' can, eye-catching
packaging innovations launched during 1997
included the 'shaped can' and the 'long-neck' bottle.
Our internet-site (http://www.heineken.nl)
remains one of the most popular and creative
sites on the world wide web.
J 4