14. Outlook 2006
This outlook 2006 provides further information on general developments in
the international beer industry, their effects on Heineken's position, its profit
forecast and its capital investments.
General
Heineken expects the world beer consumption
to grow by about 2 percent. This growth will
mostly be realised in the emerging beer markets.
A possible improvement of the economic situation
in Europe would have a positive effect on the beer
consumption in this region. The premium segment
of the world beer market will continue to grow
at a faster pace in emerging beer markets as well
as in mature markets, driving a substantial part
of the profit growth in the world beer market.
Heineken has expanded its position in emerging
beer markets to profit from the first development
onwards. The Company is well positioned with its
flagship Heineken brand to capture a substantial
part of the world-wide increase of premium beer
consumption, contributing to the improvement
of sales mix and margin. Brand portfolio reviews
that will identify growth opportunities and select
the strongest brands, and cost savings in
production, distribution and in other areas of
the business will add to the profit growth of the
Company. Additionally, new marketing initiatives
and global innovation programmes will fuel growth
of our key brands, further improving profitability.
Uncertainties remain in the field of retail wars and
retail consolidation and government actions in the
form of excise duty increases, advertising limitations
and smoking bans in the on-trade. In the short
term the latter-mentioned developments can have
a disruptive effect on the beer market and our
sales volume.
Full-year profit outlook 2006
The world beer market continues to grow.
The premium segment is expected to grow
at a rate that is twice as high as that of the overall
beer market. In particular the Heineken® brand
will benefit from this trend, fuelling the growth
of profitability through a better sales mix and
higher volumes. Brand portfolio reviews will
lead to a stronger offering to consumers and
a more focussed spend of marketing resources.
Innovations in packaging and products will increase
the attractiveness of Heineken's brand portfolio for
both the trade and consumers. These actions will
drive volume, improve the sales mix and strengthen
the ability to achieve better selling prices.
The introduction of Heineken Premium Light® in
the USA will contribute to the growth of earnings
from 2008 onwards. The investment in the brand's
introduction are expected to have a negative impact
on EBIT in 2006 of approximately €25 million and
in 2007 the new product will be EBIT neutral.
Heineken N.V. - Annual Report 2005
