Regional Review Central and Eastern Europe exports to the important Italian and French markets performing particularly well. After the expansion of the production capacity in 2003, investment in 2004 will focus primarily on efficiency improve ments, mainly through automation. Because Mouterij Albert, our malt-house in Belgium, was undergoing renovation, it was only able to produce 230,000 tonnes in 2003, instead of its maximum output of 250,000 tonnes. Mouterij Albert, which exports to some 40 Heineken breweries around the globe, is one of the largest and most efficient malt-houses in the world. Mouterij Albert is involved in several sustainable-agriculture projects. Heineken's distribution partner in Denmark opened a local filling plant for Heineken beer and Heineken sales rose strongly. Marketing support via sponsor ship of music and dance events was extended. Sales of Heineken beer in Sweden, where it is brewed under licence, were higher. In Norway, where production of Heineken beer under licence started in 2003, sales grew strongly. High priority was given to sponsorship and promotional activities. CENTRAL AND EASTERN EUROPE Sales in Central and Eastern Europe increased from 15.7 million hectolitres to 20.6 million hectolitres. Most of this growth was due to the acquisition in 2003 of BBAG, whose activities have been included in the consolidation as from 1 October 2003. Pro-forma sales excluding BBAG were 15% higher at 18.0 million hectolitres, with Poland and Russia accounting for most of the improvement. Rising purchasing power in Central and Eastern Europe will translate mainly into growth in the premium segment, par ticularly in the Central European countries which are soon to join the EU. In some countries, such as Poland, Russia, Hungary, Romania, Bulgaria and Macedonia, per capita beer consumption is below the European average, so there is potential there for volume growth as well. Acquisition of BBAG In BBAG, Heineken has acquired a large European brewer with leading market positions in Austria, Romania and Hungary and regional positions in Poland and the Czech Republic, in which it owns 22 brew eries and sells around 13 million hectolitres of beer. It also exports from virtually all of these countries. Like Heineken, BBAG combines strong local market positions, a close affinity with local cultures and expertise in international brand portfolios. Its most important brands are premium beers Kaiser and Gösser and Schlossgold alcohol-free beer, which are on sale in several European countries. The acquisition of the BBAG operations has made Heineken market leader in eight Central European countries: Austria, Poland, Romania, Hungary, Slovakia, Bulgaria, Macedonia and Albania. The existing and newly acquired activities will be integrated and grouped under Brau Union, the new central European oper ating company. This will generate signifi cant cost synergy, greater growth poten tial and more efficient and effective brand portfolio management. The acquisition of BBAG will enhance the Heineken brand's growth potential, especially in Austria, Romania, Hungary and the Czech Republic. Heineken beer sales in the countries of Central Europe are expected to grow to at least 500,000 hectolitres by 2008, an increase of over 72% compared with the volume sold in this region in 2003. Poland Higher sales, higher result and growth through BBAG acquisition The Polish beer market grew by around 4% and Grupa Zywiec grew faster than the market. Like-for-like pro-forma sales rose from 8.4 million hectolitres to g.2 million hectolitres and total sales, including the BBAG activities which had been acquired, amounted to g.4 million hectolitres. Grupa Zywiec, the largest brewer in Poland, returned a greatly improved result. Although it profited from the very good summer and inflation remained low, the Polish beer market advanced at a more modest pace than in 2002. The weakness of the economy favoured the growth of the mainstream segment, mainly at the expense of Polish premium beers. As well as the mainstream segment, there was also growth in international premium beer sales. Although the sales mix worsened, a price increase and better procurement terms translated into a substantial improvement in the result. Cost savings also contributed to the improved result. The investment made in 2003 in a new brew-house at the Warka brewery will double production capacity to 4 million HEINEKEN N.V. ANNUAL REPORT 2003 32

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2003 | | pagina 38