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

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 1999 | | pagina 18