NET PROFIT HEINEKEN
INCREASES 10.5%
Heineken NV's net profit for
the first half of 1999 has
risen by 10.5%, compared
with the first half of 1998
an increase of 20 million,
from €190 million to
210 million. The company
expects the increase in net
profit for 1999 as a whole
to be well above 10%. The
improvement in sales mix
and selling prices is expec
ted to continue in the
second half year. Sales are
expected to develop more
favourably than in the first
half year.
In the first six months of 1999 net
turnover increased by 287 million
to 3,390 million, a growth of 9%
compared with the first half of 1998.
8% of this growth was the result of
consolidating a number of recently
acquired companies, in particular in
Poland. An improvement in the sales
mix and higher selling prices had a
positive impact on turnover of 2%,
while changes in exchange rates had
a net negative effect of 1%.
Total beer sales in the first half
of 1999 increased by 13% to 30.5 mil
lion hectolitres compared to the cor
responding period of 1998. Global
sales of the Heineken brand rose by
2% to 9.8 million hectolitres while
sales of the Amstel brand rose by 5%
to 3.7 million hectolitres. Including
the beer brewed under Heineken's
supervision in companies where
Heineken has a minority share, the
total sales volume rose to 37.4 mil
lion hectolitres for the first half year.
EUROPE
In most European countries the com
pany managed to keep or even incre
ase its market share. The European
share of Heineken's total turnover
increased. Mr Vuursteen, chairman of
the Heineken Executive Board,
during a press conference: "In this
respect Poland has played a major
role. The consolidation of Zywiec and
Brewpole meant an increase in sales
of 3.7 million hectolitres in Europe
for the first half of 1999. All the
brands in Poland are doing well. The
EB brand did less well, but we had
already expected that. The brand was
therefore re-launched during the first
half of the year, after which the
decline was converted into a cau
tious increase. We expect Elbrewery
to make a positive contribution to
profits in the year 2000."
ASIA
Mr. Vuursteen concluded: "If we look
at Asia, the signals are mixed". A
rapid increase in exports to China,
slightly increased exports to Taiwan
and reduced exports to Hong Kong.
Sales in Indonesia have risen sharply
and in Thailand sales continue to
increase substantially. Vietnam
showed a slight increase. The mar
kets in Malaysia and Cambodia are
stable. The New Zealand market is
under pressure and the market in
Papua New Guinea is recovering.
"Our general conclusion is that the
lowest point of the economic reces
sion in Asia has been reached. The
first cautious signs of recovery are
visible. However, I emphasise 'cau
tious' because although the trend in
sales positive, there is not yet one in
the level of revenues. In the long
term we remain optimistic of a
strong recovery in Asia."
WESTERN HEMISPHERE
"Looking at the Western Hemisphere
and going from south to north, we
can see that operations in Argentina,
where Heineken beer is brewed
under licence by Quilmes, are doing
extremely well 40%). Brazil,
Central America and the Caribbean
are stable. The United States, the
pearl of our exports, once more exhi
bited a fine growth percentage in
sales, this time of 15%. At the same
time I would note that there is also a
pre-loading effect, as it is known,
which preceded the price increases in
the various states. But the growth
percentages of the last four years -
around 9% - in the world's most com
petitive market, show the strength of
Heineken in the US. We have signed
an contract with Miller in order to
optimise distribution in this vast
country.
AFRICA
"In spite of the large regional diffe
rences Africa as a continent has, over
the years, presented a stable picture
both regarding sales and as regards
profit contribution. It looks as
though this will change this year,
particularly in the Democratic
Republic of Congo and Rwanda. In
these two countries we are seeing
sales fall as a result of the political
and economic crises they find them
selves in. Total sales on this conti
nent are under pressure. Again I have
to say that we have great respect for
the people who have to work there
under very difficult conditions."
