Central and Eastern Europe
Russia
"Our integration of acquired
breweries, our successful portfolio
optimisation in a number of
countries and our focus on
premium brands have explicitly
strengthened our position and
allow us to tap the growth potential
in the Central and Eastern
European region."
I Report of the Executive Board
Regional Review
continued
Revenue
€3.4 billion
EBIT
€339.2 million
EBIT (BEIA)
€364.3 million
Consolidated beer volume
46.9 million hectolitres
Heineken group volume
2.2 million hectolitres
Consolidated beer volume
In millions of hectolitres
2002 I
2003 I
2004 I
2005 I
2006 I
20.9
27.1
36.9
39.3
46.9
Nico Nusmeier,
President Heineken Central and Eastern Europe
Central and Eastern Europe is Heineken's largest
region by volume and is showing continued
growth. Our business is benefiting from
integration of acquired breweries and
the outcome of portfolio optimisation. The
Heineken brand is increasing its popularity.
Revenues grew 20.1 per cent, with an organic
growth rate of 10.4 per cent driven by the
outstanding volume performance. First-time
consolidations accounted for a 4.4 million
hectolitre increase and are mostly related to the
integration of Ivan Taranov Breweries. EBIT BEIA
grew significantly fuelled by higher volumes,
better price and sales mix and by stronger
currencies, mainly the zloty and the rouble.
EBIT growth was particularly strong in Austria,
Greece, and Romania.
The Heineken brand posted a healthy 15.2 per
cent growth throughout the region, exceeding the
2 million hectolitre mark for the first time driven
in part by an outstanding performances in Poland,
Russia and Greece. Consolidated beer volumes
grew 19.4 per cent to 46.9 million hectolitres.
First-time consolidations contributed 4.4 million
hectolitres. Volumes grew in every country with
the exception of Austria and Slovakia.
Increasing popularity
Central and Eastern Europe is
Heineken's largest region by volume
and has huge growth potential. Many
markets are benefiting from a growing
European Union. In addition, the
Heineken brand is benefiting from the
increased popularity of premium beers.
OA Heineken N.V.
OU Annual Report 2006
In Germany the soccer World Cup drove beer
consumption up, especially in the first half and
our joint venture Brau Holding International
outperformed the market.
In Russia an exceptionally strong third quarter,
coupled with the success of our portfolio
optimisation, led to volumes of 13 million
hectolitres.
Beer sold in plastic PET bottles has grown so
rapidly that it now represents more than 40
per cent of consumption in some countries in
the region. To capitalise on this trend, we rolled
out new products in this packaging. One example
of this is the new TopStar®, a high-quality PET
bottle, which has been used for Goldenbrau®
and Zagorka®.
In 2006, we optimised our brand portfolio to create a winning
portfolio that would give us an advantage in the Russian
market. We reduced our portfolio from 36 to 23 brands,
including the brands we produce under licence, and
developed a strong premium brand offering.
Nine of the brands in our optimised portfolio are top
international premium beers, nine are regional and five
are national brands.
The mainstream beer brands Ochota, and premium brand
Zlaty Bazant are performing very well. Ochota in particular
was a big success in 2006 and its volume grew to more than
3 million hectolitres.
The positioning of the brands in our portfolio is reported
as indicated below.
Russian portfolio:
National brands
Regional brands
Russia is now our largest operation by volume,
while we are the strong third player in the market
with a share of 13.2 per cent. We are targeting
a market share of 20 per cent in five to six
years time.
Heineken N.V.
Annual Report 2006 OX
