Review of the Executive Board
Heineken started the new millennium well. Net profit rose by 20% to EUR 621 million and the operating profit increased
by 15% to EUR 921 million. Exports to the United States and the successful integration of our breweries in Spain made
a substantial contribution to this profit increase. The company achieved an autonomous sales volume growth of 2% and
the sales mix improved. In the Far East and various countries of Europe performance improved on last year.
The Heineken Group confirmed its position as the world's second largest brewer with a 10.4% increase in Group volume
to 74.8 million hectolitres of beer and in total beer volume of 7.7% to 97.9 million hectolitres.
The Heineken brand retained its position as the leading international beer brand. Sales of Heineken beer increased by
5.9% from 20.4 million hectolitres to 21.6 million hectolitres. The Heineken brand is the Group's most valuable asset and
the principal driver behind profit growth. The core of our strategy remains the further development of the Heineken
brand. Amstel, our second international beer brand, grew by 2.9% to 10.8 million hectolitres.
In the Netherlands, Heineken was presented with the prestigious Koning Willem I prize by His Royal Highness Prince
Claus. The prize is awarded biannually to a Dutch company that has attracted notice for its good entrepreneurial skills,
and for making an important contribution to the Dutch economy, employment and prosperity, as well as to the inter
national reputation of Dutch trade and industry.
In the year 2000 consolidation in the beer industry gained momentum. In Europe and Latin America in particular large
brewing groups were formed under the pressure of stagnating markets, the consolidation of supermarket chains and,
through pursuing economies of scale, strength in distribution and stronger market positions. Consolidation in the brew
ing sector is mainly taking place on the production and distribution side. In the beer market, local and regional brands
still play an important role, although the importance of international premium brands continue to increase.
Consolidation will undoubtedly continue and Heineken will continue to play a leading role. Acquisitions constitute one of
the main elements of our strategy. Together with developing the Heineken brand into the world's most valuable beer
brand, achieving leading positions in selected beer markets is important to the Group's future profit growth.
Within the framework of its acquisition policy, Heineken started the year by completing the takeover of Cruzcampo in
Spain, in the course of the year breweries were acquired in Slovakia and Belgium. At the end of the year a majority stake
was acquired in Nigerian Breweries.
Further growth of the company will come in part from the acquisitions in our home market Europe, where opportuni
ties are however diminishing and from acquisitions and increasing our interests in Latin America and the Asia Pacific
region. Africa also presents opportunities for expansion on a limited scale. Within this acquisition policy, we have
reached agreement on the acquisition of an interest in two German breweries at the beginning of 2001. A second source
of future growth is organic by nature and constitutes growth of the Heineken brand. The premium beer segment is grow
ing much faster than the beer market as a whole and is attractive because of its better margins. International beer
brands especially play a leading role in this segment. The Heineken brand is benefiting to the full from this development
thanks to its strong starting position.
Much was achieved within the Group last year in the field of common systems. The different beer markets require
a flexible organization in which many decisions are delegated to the local operating companies. On the other hand, the
importance of exchanging knowledge, information and best practices is increasing and developments in the ICT sphere
are demanding a common approach and common systems on an ever-increasing number of aspects. This also plays
a part in optimization of the supply chain and in procurement via Internet markets. Some matters, such as the consistent
production and marketing of our international brands and quality control, had already been organized at central level.
A flexible, decisive and innovative mentality is a prerequisite for the further development of the Heineken Group.
The growth and excellent results achieved by our company are largely attributable to the dedication and commitment
of our employees.
K. Vuursteen, Chairman of the Executive Board
HEINEKEN N.V. ANNUAL REPORT 2000