T A Foreword by the Chairman Operating profit €1,222 million-4.7% Net profit €798 million, 0.4% Net profit (excl. exceptional items and amortisation of goodwill) €806 million, 1.4% Net turnover €9.3 billion, 9.1% Total beer sales 109.0 million hectolitres, o% Heineken beer sales 22.1 million hectolitres, 4.3% Growth in operating profit excluding the effects of first-time consolidations, amortisation of goodwill, exchange-rate movements and exceptional items. Net profit, excluding exceptional items and amortisation of goodwill, turned out 1.4% higher at €806 million. Organic growth* in net profit amounted to 7%. Contributory factors in our organic growth were the improved sales mix (reflecting the strong performance of the Heineken brand), higher selling prices, increased sales and strict cost control. The acquisition of BBAG, the largest purchase in Heineken's history, has significantly strengthened the base from which we shall pursue earnings growth in the medium and long term. Net profit in millions of euros 800 700 600 500 400 300 200 100 ■T^iDNOOOlOHCMCO oioiCTicncnaioooo CTiCJiCTiOlGlO^OOOO HHHHHHtNCNJCMCM That Heineken is firmly on course is clear not only from the organic growth in our profit, but also from the rapid progress of BBAG's integration activities in Central Europe, the strengthening of our market positions and brand portfolios in many countries and the advances we are making in cost control and innovation. The external factor which affected our profits were the sharp decline of the US dollar and several other currencies. This was compounded by economic weakness in many countries, which depressed on- trade sales and favoured the growth of low-priced beer volume at the expense of branded beers in the mainstream seg ment. Furthermore we experienced reper cussions of the Sars epidemics and the Iraq war. Demand for international and national premium beers continued to grow in many of our markets, as did the speciality beer segment in most countries. Our operating companies' local brand portfolios, in which the Heineken brand plays a prominent role, were able to profit from this trend. Many reported an improved local-currency operating profit, helped by a better sales mix, effective knowledge transfer, efficient working methods and cost savings. Higher beer sales also contributed to profit growth in some markets. Sales of Heineken beer in the premium segment increased to 18.5 million hectolitres (+6.1%), with volume rising fastest in Italy, Poland, Spain, France and the Far East. Global sales of Heineken beer, including the Netherlands, increased to 22.1 million hectolitres (+4.3%). Amstel sales were also up slightly (+1.8%), despite the decline in the mainstream segment, with Africa and Spain accounting for most of this growth. Sales in the North-East of the United States, where we generate almost 40% of our North American volume, were depressed by very poor weather. This flattened our growth curve in the US, although sales in the rest of the country continued to grow. The Heineken brand is well positioned for further growth, supported by our closer relationships with supermarket chains, our sustained focus on the on-trade, an expanded sales force and innovative packaging. Our growth strategy for the East Coast is to concentrate on extending the market share and for the West Coast to work on expanding the distribution. HEINEKEN N.V. ANNUAL REPORT 2003 12

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2003 | | pagina 18