'Our region benefited from the
success of our innovations: profit
grew and the Heineken brand
continued to gain share. DraughtKeg
achieved an increase in sales
and the roll-out of the Extra Cold
programme was accelerated.
We will continue to invest in
innovation in order to create
opportunities."
22 Report of the Executive Board
Didier Debrosse
President Heineken Western Europe
Revenue
€5.5 billion
EBIT
€410 million
EBIT (beia)
€665 million
In Western Europe, Heineken realised good profit
growth driven by the premiumisation of the beer
market, higher prices and the delivery of cost
savings resulting in an EBIT (beia) increase of
5.1 per cent. Revenue grew 1.9 per cent to
€5,450 million.
In 2007, Heineken continued to invest in its key
brands and in innovation. In the first half of 2007,
two additional filling lines for DraughtKeg were
installed in the Netherlands, increasing production
capacity to more than 1 million hectolitres. As
a result, supply and demand were better aligned
and DraughtKeg was able to achieve a significant
increase in sales, doubling volume versus 2006.
Additionally, the roll-out of the Extra Cold beer
programme was accelerated, with the installation
of Extra Cold fridges or draught installations in
more than 22,000 outlets.
Consolidated beer volume in Western Europe
was 0.6 per cent lower at 31.9 million hectolitres.
Higher volumes were achieved in Spain, Italy, the
UK, Ireland and in the export markets in the Nordic
region. However, lower volumes in France, the
Netherlands and Switzerland offset these gains.
Consolidated beer volume
31.9 million hectolitres
Heineken volume in premium segment
7.5 million hectolitres
Consolidated beer volume
In millions of hectolitres
2003 I
2004 I
2005 I
2006 I
2007 I
I 32.8
32.2
31.9
32.1
31.9
Heineken N.V. Annual Report 2007
In this challenging environment the Heineken
brand continued to gain market share, organically
growing volume in the premium segment by 7 per
cent. All countries in the region recorded higher
volumes of the brand, with Spain, France, and Italy
accounting for 67 per cent of the total increase.
A new brewery in Seville
Spain is a key market for Heineken. The beer market enjoys long-
term growth in terms of volumes and profitability, driven by an
increasing population, a strong on-trade and a healthy growth of
premium beers.
Heineken Espana, one of the most prominent players in the Spanish
market, currently operates five breweries located in Arano, Jaen,
Madrid, Seville and Valencia, brewing 11.4 million hectolitres
consolidated beer volume across 20 brands.
Capacity utilisation is high, running as high as 100 per cent in
the peak of the summer season over the last few years. Capacity
constraints increased at the brewery in Seville, which was located
in the middle of a residential area, where expansion possibilities
were lacking and vehicle access was limited. In 2005 Heineken
Espana compared the cost of investing in a new brewery with the
cost of expanding the existing brewery and on the basis of that
decided to construct a greenfield brewery, just outside of the city.
Construction started in early 2006 and the new brewery has been
fully operational since January 2008.
This new brewery in Seville is particularly important to Heineken:
it is the first greenfield in the Western European beer industry
landscape in the past 25 years and one of the largest breweries in
the Group in terms of volume. It marks our strong commitment to
the growing Spanish market as well as our continuous drive for cost
efficiency gains and technical improvements.
The brewery has a capacity of 4.5 million hectolitres and a technical
capacity of 5.2 million hectolitres. It boasts an efficiency ratio
which is twice that of the old brewery. Total investment (including
the site itself) amounted to €220 million. Thanks to state-of-the-art
technology and higher production volumes, the new brewery will
generate annual savings before taxes of €25 million as of 2008.
In August 2006, Heineken Espana sold the land and buildings of the
old brewery, realising a book gain of €320 million before tax. The
old site will be closed.
