different pricing scenarios, which will have
different outcomes market by market. In principle,
we will pass on increased input costs. The effect
on volume developments is at present unclear.
tability of Africa Middle East Region
In the Africa Middle East Region, volume growth
3 driven by economic growth in Nigeria and the
liddle East and continued stability and economic
-owth in Central Africa. The Region is in most
-eas at peace, with some uncertainty in Nigeria,
he situation in Lebanon remains fragile. The
npact of the crisis in Kenia on our businesses in
antral Africa is closely followed and still managable.
perational risks
hange initiative overload
lany change programmes and projects are
jnning on Group, regional and local level,
xamples are greenfield operations, creation
f back office shared service centres, acceleration
f implementing Heineken best practice
rocesses based on common information systems,
entralising IT and outsourcing of non-core
ctivities. The scope and breadth of the
ganisational changes may threaten effectiveness
business operations. Company-wide strategic
ogrammes are steered by the Executive
ommittee, whilst change projects at regional
id local level have direct attention of the
anagement teams. Since allocating sufficient
anagement capacity to the many change
ojects in addition to managing the regular
jsiness is considered critical, priority setting
monitored closely. Clear target setting is in
ace on achieving the main change objectives,
sk management structures are overall well
mbedded, however further structuring is
aquired. Sufficient programme and project
lanagement skills need to be ensured.
eorganisations from Fit2Fight
any reorganisation projects (amongst others,
entralisation of back office activities, closure
breweries and other right and downsizing
activities) have been realised, are underway or
are in preparation. Highest impact is in the supply
chain, wholesale business and support functions
in Europe. The risk is that due to social unrest, the
production quality and supply continuity would
affected, which might negatively impact financial
performance and Company reputation. The
operating companies concerned manage
reorganisation projects with care; the right speed,
alignment with relevant industrial and external
relations and consistent communication to
employees. Contingency plans have been put
in place.
Acquisitions and business integration
In the pursuit of further expansion, Heineken
seeks to strike a balance between organic and
acquired growth within the limits of a conservative
financing structure. In acquisitions, specifically
in emerging markets, Heineken will be faced with
different cultures, business principles and political,
economic and social environments. This may
affect corporate values, image and quality
standards. It may also impact the realisation
of long-term business plans, including synergy
objectives, underlying the value of newly
acquired 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. The Heineken Common
Systems Strategy is highly supportive to
integrating acquired businesses.
Supply continuity
Discontinuity of supply of our products could
affect sales and market shares. This is 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,
Heineken N.V
