Outlook 2005
26 Heineken N.V. Annual Report 2004 Report of the Executive Board
Profit forecast
For the year 2005 we expect a further organic growth in net profit. Worldwide, the premium segment
of the beer market will continue to capture an increasing share of the market, benefiting sales volume
of the Heineken brand in particular, and contributing to an improvement in sales mix and results
across the business.
Heineken expects further organic growth in net profit for the year 2005. Taking into account the
impact of the increase in marketing and innovation spend, the full benefits of which will be realised in
the medium-term, this growth will not exceed mid-single digits.
Heineken's long-term profit forecast is positive, as a result of the strength of its brand portfolio,
its consistent and intensified spend on innovation and in the Heineken brand, its strong distribution
structure and the focus on efficiency improvements.
However, as we stated in February and September 2004, the continued currency impact, particu
larly of the US dollar, is expected to outweigh predicted organic profit growth and contributions from
new acquisitions. This may result in a decrease in net profit for the full year before exceptional items
and brand and goodwill amortisation.
Heineken will apply IFRS in full in 2005 and restate its 2004 financial statements accordingly. The
profit outlook for the full year 2005 has been prepared, based on the assumed IFRS impact.
In 2004, and over the last few years, Heineken has consistently built the platforms for future profit
growth. We have expanded our position in developing beer markets, we have increased our presence
through acquisitions and partnerships in the premium segment of a number of important beer
markets, we have strengthened our brands and brand portfolios and we have lowered our cost base.
We will increase our marketing investments, particularly in the USA and Western Europe, and we will
work on further expanding our business in 2005.
We are positive on the long-term growth in sales and profit of our company. However, the adverse
impact of currency movements on net profit, in particular of the US dollar, will exceed the organic
profit growth and the positive contribution of newly acquired businesses.
With the expected slow improvement in the economic situation, and hopefully better weather
