11
HEINEKEN N.V. ANNUAL REPORT 2008
Reducing debt through initiatives that strengthen
cash generation and cash conservation. These include
programmes to reduce capital expenditure, networking
capital and the sale of non-core assets. The Company
has instigated a programme to increase the cash
conversion rate in excess of 100 per cent in the period
2009 - 2011.
Improving performance of newly acquired companies.
Every new business has specific, focused action plans
to improve their performance.
Reducing costs through Total Cost Management.
Heineken has launched new cost-reduction initiatives
focusing on savings that will have an immediate and
positive impact on cash flow.
Maintaining the price positioning of key brands. Heineken
will continue to pass on the effect of higher costs,
currency impacts and higher excise duties, in the selling
prices of its key brands. It will restore margins, which
were negatively affected by high cost increases in 2008.
For 2009, Heineken expects that the underlying downward
trend in the number of employees will continue due to
cost-reduction and efficiency-improvement programmes.
Capital expenditures related to property, plant and
equipment, including the investments of newly acquired
businesses, will amount to approximately €700 million
(4.9 per cent of 2008 revenue), of which €230 million relates
to the carry-over of expansion projects started in previous
years. This is substantially below the like-for-like €1.1 billion
of 2008, which is mainly due to new capex-reducing
initiatives and the completion of a number of investment
programmes. Heineken will finance the capital expenditure
from cash flow.
Starting in 2009, Heineken will issue a trading update after
each first and third quarter.
Increasing the efficiency and effectiveness of all
marketing investments. Heineken will ensure the right
level of marketing support for key local and international
brands, leveraging the fall in media costs.