Outlook 2008
This outlook for 2008 provides further information
on general developments in the international beer industry,
their effects on Heineken's position, its profit forecast and
its capital investments.
10 Report of the Executive Board
Full-year profit outlook
Heineken expects that 2008 will be another year
of good organic growth in net profit, based on
a further improvement in sales mix, better prices,
higher beer volume and savings in fixed costs.
The international premium segment will continue
to grow at a higher rate than that of the overall
beer market and the Heineken brand will benefit
from this trend. In its last year, the Fit2Fight
cost-savings programme is expected to deliver
approximately €150 million of gross costs savings
thus delivering in full the Fit2Fight programme
launched at the beginning of 2006.
As a result of worldwide input cost inflation,
Heineken expects a 15 per cent price increase
in its raw material and packaging costs. The
Company expects that it will be able to pass on
the impact of the increased input and energy costs
in most of its markets. Due to the uncertainties
around the possible impact of worldwide
consumer price inflation and weakening
economies on consumer spending and beer
consumption, it is too early to make a reliable
estimate of volume levels for 2008.
Heineken expects the capital expenditure related
to property, plant and equipment to total around
€1.2 billion in 2008. Part of this investment is
related to capacity expansion and the construction
of new breweries in Central and Eastern
Europe, Asia and Africa. In principle, the capital
expenditures will be financed from the cash flow.
The total restructuring costs associated with the
Fit2Fight cost-savings programme is expected
to amount to about €225 million, of which about
€75 million will relate to 2008. As a result of cost-
reduction programmes, the underlying downward
trend in the number of employees will continue.
Heineken N.V. Annual Report 2007
