Sales Heineken
and Amstel
worldwide
in millions of hectolitres
I1996
1995
Heineken (1999: 20.4
Amstel (1999: 7.9 hi)
19-5
'999
'1998
'997
1996
'995
i '994
"993
1 '992
1991
'99°
Net Profit
excl. extraordinary
income
in millions of euros
1 2
Outlook jn iggg the world beer market grew
by about 2% and further, slight growth is expected
in the future. Recovery in the economies of
Latin America and the Asia Pacific region will
contribute towards this growth, as will the
continuing rise in beer consumption in the United
States. Premium and specialty beers are displaying
higher-than-market-average growth worldwide.
Heineken will actively encourage the development
of the premium segment in the beer markets.
In the premium segment, the Heineken brand
has held a leading position for a long time. This
position will be further reinforced and expanded.
This, together with the growth in our specialties,
will improve the average margin and the Group's
results.
The trend towards consolidation in the industry
will undoubtedly result in new acquisition
opportunities for Heineken. We will therefore
continue to search actively for companies that
fit into our strategy and that will contribute to
profit growth in the medium term. Our recent
acquisitions in Poland and Spain will start to
contribute to the growth in net profit after a period
of integration and optimization.
In addition, the realization of an optimum cost
structure in production, sales and distribution
remains a principal Group objective. The
combination of higher sales of premium beers,
in particular Heineken beer, and value-adding
acquisitions will result in an increase in net
turnover and, together with cost-cutting measures,
an improvement in the Group's profitability.
The European Union has decided to introduce
restrictions on exclusive supply agreements
between brewers and the on-premise sector from
June 1, 2000. Although these restrictions will have
some impact on the nature of the competition,
especially in the Netherlands and France,
we do not expect any material impact on market
conditions or our profitability. Strong brands
and a good service to the on-premise sector will
continue to be of decisive importance.
For the year 2000, capital expenditure will amount
to about EUR 530 million. This will in principle
be financed from available liquid assets and
cash flow, plus external financing if necessary.
The acquisition of Cruzcampo will be financed
from present cash resources and bank loans taken
out locally in Spain.
Each year the level of our profit is influenced
by unpredictable factors such as exchange rates,
government measures, economic development and
weather conditions. Despite these uncertainties,
we again expect an increase in net profit for the
year 2000. Considering the success of our
business strategy, the power of the Heineken and
Amstel brand and our local brands, global
coverage, the available financial resources and our
broad international experience, we also remain
positive with regard to the long-term profitability.
HEINEKEN
REVIEW OF
EXECUTIVE
19 9 9
N. V.
THE
BOARD
1 3