07
This is a great achievement and I would like
to thank our employees, and our trade and
business partners for playing their part in
this performance.
All regions contributed to growth
Our results also reconfirmed that we continue
to benefit from our ability to extract value from
our mature markets. Nowhere is this more evident
than in Western Europe where, despite the
challenging market conditions, we significantly
outperformed the sector with EBIT (beia) growth
of 5.1 per cent.
Performance from our Central and Eastern
European (CEE), African and Asian markets was
outstanding with each beginning to deliver on their
potential for both profit and volume growth. CEE is
now our second biggest profit contributor.
Consolidated volume grew by 9 per cent and EBIT
(beia) rose by 22 per cent. With an 18 per cent
volume growth and 41 per cent EBIT (beia)
increase, Africa and Middle East was the fastest
growing region in 2007. The Americas region was
again consistent in growing both its consolidated
volumes and EBIT (Beia) and our Asia Pacific region
continued its positive growth in volumes, revenue
and profitability.
In the first half of 2007 we also made two very
positive steps, which will help us to maintain strong
regional and market performance in the future.
Firstly, in May, we renewed the sales and marketing
agreement with our partners FEMSA in the USA
for a further 10 years. This will allow our American
operation to mature into a true portfolio business,
firmly positioned in the growth segment of the
US beer market. Secondly, we regained control
of the Amstel brand in South Africa and decided
to construct a brewery there. This will mean
a stronger, more profitable business in partnership
with Diageo and Namibian Breweries.
Scottish Newcastle: a strategic acquisition
The second half of 2007 was dominated by our
planned acquisition of Scottish and Newcastle
pic., in combination with Carlsberg. This strategic
acquisition, which is still subject to approval of the
relevant authorities, will reinforce our position in
Europe, and will drive a sizeable, reliable cash flow
and profit stream to support future expansion and
increased shareholder returns. In particular, we
will have an important new distribution platform
in the UK and other markets to drive growth of the
Fleineken brand.
Our acquisition strategy is focused on building
leadership positions in markets where we operate.
Scottish Newcastle UK is the leading brewer
and cider producer. Hartwall in Finland, Centraleer
in Portugal and Alken-Maes in Belgium command
respectable number two positions in their
respective countries. We will also reinforce our
business platforms in both Ireland and the USA.
Last but not least the significant stake in India's
leading brewer UBL will open tremendous
opportunities for the future.
Alongside this, we will acquire some very strong,
complementary brands such as Newcastle Brown
Ale, Foster's and Strongbow cider, all of which have
international appeal and potential.
Once the transaction is complete, I look forward to
welcoming all our new employees, business
partners and customers to Heineken. These are
exciting times for all of us and we will continue to
build on the superb heritage and sterling past
performance of Scottish Newcastle.
Priorities for action
We remained focused on our four Priorities for
Action:
Accelerate top-line growth
Accelerate efficiencies
Accelerate speed of implementation
Focus on selective opportunities.
Accelerate top-line growth
Looking back at the past few years, much has been
achieved in terms of top-line growth. For the year
2005, we announced revenue growth of 7.3 per
cent, of which 2.2 per cent was organic. For 2006,
revenue growth had risen to 9.6 per cent, of which
7.1 per cent was organic. In 2007, we once again
increased our positive annual revenue growth by
6.2 per cent, of which 7.3 per cent is organic.
We have also significantly grown the Heineken
brand - our key strategic asset - which again
showed excellent growth of 10 per cent in 2007.
Heineken N.V. Executive Board
Left: Jean-Frangois van Boxmeer
Chairman of the Executive Board/CEO
Right: René Hooft Graafland
Member of the Executive Board/CFO
Heineken N.V. Annual Report 2007