Stability Africa Middle East Region
In the Africa Middle East Region volume growth
is driven by economic growth in Nigeria and the
Middle East and continued stability and economic
growth in Central Africa. Compared to previous
years the Region is in most areas at peace, with
some uncertainty coming up in Nigeria due to
the elections in 2007. The situation in Lebanon
remains fragile which could escalate further in
the Middle East and could affect our operations
n Egypt and the United Arab Emirates.
perational risks
■organisations from Fit2Fight
leineken's Fit2Fight programme has the objective
reduce fixed costs versus 2005 by €200 million
et of inflation by the end of 2008. Reorganisation
rojects that will save €450 million by the end of
308 (after inflation) have been identified, mainly
supply chain, wholesale and support functions
Europe. There is risk that due to social unrest,
ie production quality and supply continuity are
fected, negatively impacting financial
erformance and Company reputation.
ne operating companies concerned will manage
>e reorganisation projects with care; the right
reed, alignment with relevant industrial and
<ternal relations and consistent communication
employees. Contingency plans have been put
place. Total restructuring and other costs are
stimated at €325 to 375 million before tax.
quisitions and business integration
the pursuit of further expansion, Heineken
eeks to strike a balance between organic
nd acquired growth within the limits of a
onservative financing structure. In acquisitions,
oecifically in emerging markets, Heineken will be
iced with different cultures, business principles
rid political, economic and social environments,
his may affect corporate values, image and
uality standards. It may also impact the
ialization of long-term business plans including
ynergy objectives, underlying the value of newly
cquired companies.
In order to mitigate these risks, Heineken has
further strengthened its business development
and integration activities, which includes
significant involvement from relevant group
departments, operating companies and regional
management in carrying out effective due
diligence processes and preparing take charge
and integration plans.
Business continuity
Business interruptions could affect sales and
market shares. These are not considered a major
risk due to the relative size and spread of
operations. An exception is the supply of beer
products from the Netherlands to the USA, one of
Heineken's most profitable markets. Contingency
measures are in place, and Heineken's group
purchasing department manages long-term
contracts with preferred suppliers in order to
secure supply of critical raw and packaging
materials. Monitoring business continuity risks
was further structured in 2006, including on the
launch of Heineken Premium Light in the USA.
IT security
Heineken's worldwide operations rely increasingly
on information systems.
Heineken has a strict IT security policy to ensure
confidentiality, integrity and availability of
information. Tools are used to support compliance
with that policy and compliance monitoring is
applied. A more structured IT auditing approach
is implemented in 2006. Progressing centralisation
of IT systems and infrastructure has a positive
impact on ensuring IT security measures.
Heineken N.V. n Q
Annual Report 2006 *r!7