Regional review ''Growing our business and expanding our portfolio, spearheaded by the Heineken brand, underpin our long-standing commitment to this important region. I am confident that we continue to grow and increase our share of the Asia Pacific profit pool, with the strategic benefit of our wide geographical spread, our winning portfolio and successful partnerships." Vietnam 38 Report of the Executive Board Siep Hiemstra President Heineken Asia Pacific Revenue €597 million EBIT €100 million EBIT (beia) €100 million Consolidated beer volume 7.4 million hectolitres Heineken volume 3.9 million hectolitres Consolidated beer volume In millions of hectolitres 2003 I 2004 I 2005 I 2006 I 2007 I 6.0 6.4 In a large part of the region, Heineken operates through Asia Pacific Breweries (APB), its joint venture with Fraser and Neave. Consolidated beer volume grew by over 1 million hectolitres in 2007, driven largely by growth in Vietnam, New Zealand and Cambodia as well as the first-time consolidation of acquisitions in Vietnam. Consolidated beer volume as reported in the first half of the year included 0.35 million hectolitres in relation with the Chinese brewing group DaFuHao. For the full-year 2007 DaFuHao is treated as an associated company, the beer volumes of the first- half of 2007 are excluded from the full-year number. Volume of the Heineken brand grew 11 percent to 3.9 million hectolitres, driven by strong growth in Vietnam, Taiwan, South Korea, Malaysia, China and New Zealand. Volume of the Heineken brand was lower in Thailand where a weaker economy and trade and advertising restrictions held back growth. The Heineken brand extended its position as the leading international premium beer in the region. Tiger beer expanded its international footprint further through the expansion of the number of export markets and the start of local production in Mongolia. Heineken N.V. Annual Report 2007 39 Revenue grew by a robust 6.7 per cent and EBIT beia) increased 5.5 per cent, driven by better ,'olume, strict cost control and a better sales md price mix. Profit growth was held back by he impact of weaker currencies against the euro, ntegration costs of recently acquired breweries ind gestation expenses related to the greenfield oreweries in the region. In addition, profit in 2006 vas favourably affected by royalty restitutions. Breweries are under construction in India rid Laos, whilst the brewery in Mongolia was :ompleted in 2007. Profitability in the Asian beer markets varies widely country by country. While China has a very low profitability, the countries of Southeast Asia, such as Vietnam, offer attractive profit pools. Vietnam is a fast-developing beer market, in which Asia Pacific Breweries (APB) recently achieved a leading market position, driven by acquisitions and an excellent organic growth rate. The Vietnamese beer market is particularly attractive as a result of significant increases in purchasing power and favourable demographics. After five years of double-digit volume growth, market volume reached a total of 18.0 million hectolitres in 2007, with a per capita consumption of 20.9 litres. This is in line with average consumption in the Asian region, but still far below the per capita consumption level in Thailand (31.3 litres) and South Korea (35.4 litres). The sound economic conditions are expected to drive another period of sustained growth in the Vietnamese beer market and a compound average volume growth in excess of 7 per cent is forecast for the period from 2007 to 2010. APB's investments in Vietnam date back to 1993, when the first brewery was constructed near Ho Chi Min City (in the southern part of the country). In 2003, a second brewery was completedmJ Hatay near Hanoi (in the north). In 2006, APB expanded its existuwfl footprint in the region through the acquisition of the Foster's j operations (two breweries) and the assets of the Qiiang Nam Brewery. Today APB operates a total of five breweries in the country. APB brews, markets and distributes a portfolio of brands, with a strong focus in the highly profitable premium segment, K where it holds the undisputed leadership position with the Heinekêh and Tiger brands. Other well-known brands are Bivina, Anchor M Draft and Biere LaRue. JS Heineken N.V. Annual Report 20Q7

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