0.9 100 1 Egypt Strong performance 59 Heineken N.V. Annual Report 2004 Report of the Executive Board Regional Review Africa and the Middle East In Egypt, the sales volume of Al Ahram Beverages Company rose 6% in 2004, thanks to a buoyant tourist industry, and an increase in local market demand for beer. Total beer sales million hectolitres Market share percent Market position position Having fallen sharply in 2003, the Egyptian pound was down a further 15% against the euro on average and inflation rose by approximately 10%, making prices a key issue in 2004. Despite the devaluation of the Egyptian pound and higher inflation, A1 Ahram increased its positive contribution to group profits in euro terms. Growth in overall beer sales was balanced by a drop in the entire soft drinks market in Egypt. Sales of Fayrouz and the non-alcoholic beverage Birell declined 18% in line with the market. At the end of 2003 we raised prices in order to maintain the premium position, which was enhanced in 2004 by further new flavour additions to the Fayrouz product range. Wine sales were strong, growing by 45%, and a number of higher quality wines were launched at the end of the year. Spirits grew 21%. A1 Ahram also launched premium spirits - whisky, vodka and gin - as well as various ready-to-drink products. In Lebanon, Heineken has a 67% controlling interest in the brewery Almaza and its distribution operations. Almaza recently secured worldwide rights to Laziza, a popular Lebanese beer brand, which has strengthened Almaza's position. Total sales volumes rose 14% and the final result in euros increased by 44%, even after an average 5% devaluation of the Lebanese pound. The results reflect the benefits of the first year of full integration of the local Heineken distributor together with the acquisition of the Laziza brand. In Israel, Tempo Beer Industries imports and distributes Heineken as well as some of our specialty beers. We have reached agreement with Tempo Beer to create a new company that will pool the Heineken and Tempo brands which includes a licence for local production and marketing. The invest ment to obtain a 40% interest in the new company fits well with Heineken's strategy of combining its international premium brands with strong local brands. Our exports to the Gulf States recovered from last year and notched up a sales volume increase of 4%. The decline in the US dollar, however, had a substantail effect on profits. To further grow our business in the Gulf, we are exploring new ventures with our local partners. In Jordan, Amstel is brewed under licence by General Investment Ltd. The Amstel sales volume increased by 31% compared to last year.

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