h eng jv2002 final - jaarverslag.com · heineken aims to defend and strengthen its global mar-ket...

A n n u a l R e p o r t 2 0 0 2>

* The full list of breweries

and operating companies can

be found on pages 76 - 79.

Profile

Heineken has the widest global presence of all the inter-

national brewers, operating in over countries* and

employing , people around the world. With total sales

of . million hectolitres in , Heineken is also among

the largest. Beer is produced at over breweries in more

than countries and by other brewers under licence.

Heineken also has a strong export business.

Europe accounts for over half of the sales volume.

Roots, aims and strategy

Heineken has its roots in Amsterdam, where Gerard

Adriaan Heineken purchased a brewery in . In the ensu-

ing decades, under the leadership of three generations of

the Heineken family and pursuing a policy of measured

expansion and consistent brand development, Heineken

has grown into one of the world’s leading

brewing groups. Core values within the company include

respect, enjoyment and a passion for quality.

Heineken aims to defend and strengthen its global mar-

ket position and preserve its independence by retaining its

place among the largest brewing groups in the world in

terms of beer sales and profitability, based on a portfolio of

strong brands with Heineken as the leading international

premium beer.

In many countries Heineken has secured strong market

positions and an efficient cost structure by combining

the production, marketing and sale of the international

Heineken premium brand with that of a selection of promi-

nent local brands. This generates above-average returns

and creates added value for our shareholders. Heineken

seeks long-term profit growth by expanding in existing

markets and entering new markets. Heineken attaches

great importance to having a responsible policy on alcohol

abuse and good social and environmental policies.

Brands

Heineken has built its strong international and local market

positions by developing and regularly updating its cohesive

portfolio of strong brands which offer high added value for

its customers and consumers.

The group’s principal international brands are Heineken

and Amstel. Heineken has the widest global presence

of any international beer brand and is the leading brand in

Europe. In virtually all markets, the Heineken brand’s quali-

ty and image mean that it can be positioned in the premium

segment. Amstel, the second largest beer brand in Europe,

is generally positioned in the mid-priced mainstream seg-

ment, the largest segment of the market. The Group’s inter-

national brands are supplemented and supported by

national and regional brands and a portfolio of speciality

beers (which differ from lager in flavour, colour or brewing

method), light beers (low-calorie beers) and alcohol-free

beers. Heineken has a very limited presence

in the low-priced segment.

Distribution

Heineken seeks to achieve comprehensive coverage in

each market, through alliances with independent distrib-

utors or via our own beverage wholesalers. Heineken

owns numerous wholesalers in Europe which, in addition

to beer, also supply a supporting range of soft drinks,

wines and spirits to the on-trade. Some of the soft drinks

are produced by Heineken.

Research and development

Innovation is very important to a leading company like

Heineken, especially in reinforcing the competitive position

of the international Heineken and Amstel brands. In pursuit

of its commitment to quality, lower cost, greater safety

and lower environmental impact, Heineken works hard to

improve all the technical processes involved in brewing,

packaging and supply chain management. Work in these

areas is coordinated by the Group’s research and develop-

ment centre in the Netherlands, which makes its services

available to group companies and associated breweries

all over the world.

Ownership structure and stock exchange l ist ing

Heineken Holding N.V. holds .% of the Heineken N.V.

shares. Heineken Holding N.V. engages in no operational

activities: these are carried on by Heineken N.V. and

its related companies. Heineken N.V. is responsible for the

development and implementation of strategy. Heineken

Holding N.V. is concerned primarily with safeguarding

the long-term continuity, independence and stability of

Heineken’s activities. The net asset values of both shares

and the dividend policies of both companies are identical.

Both shares are traded on Euronext Amsterdam, as are

options on the shares.

>

Contents

Key Figures

Executive Board

Supervisory Board

Report of the Supervisory Board

Report of the Executive Board

Foreword by the Chairman

Outlook for

in Retrospect

Heineken

Amstel

International Speciality Beers

Research and Development

Health, Safety and Environment

Alcohol and Society

Personnel

Regional Review

Europe

Western Hemisphere

Africa/Middle East

Asia/Pacific

Financial Review

Heineken Prizes

Financial Statements

Consolidated Balance Sheet

Consolidated Profit and Loss Account

Consolidated Cash Flow Statement

Notes to the Consolidated Balance Sheet, Profit and Loss Account

and Cash Flow Statement for

Notes to the Consolidated Balance Sheet

Notes the Consolidated Profit and Loss Account

Notes to the Consolidated Cash Flow Statement

Participating Interests

Balance Sheet of Heineken N.V.

Profit and Loss Account of Heineken N.V.

Notes to the Balance Sheet and Profit and Loss Account

of Heineken N.V. for

Other information

Auditors’ Report

Appropriation of Profit

Special Rights pursuant the Articles of Association

Authorised Capital

Events after Balance-Sheet Date

Supplementary information

Information for Shareholders

Historical Summary

Operating Companies and Participating Interests

3

4

5

6

8

8

11

13

13

13

14

15

15

16

16

18

19

28

32

36

40

44

45

46

47

48

49

52

58

63

64

66

67

68

71

71

71

71

71

71

72

72

74

76

Page

This is an English translation of the original Dutch language report.

Both can be downloaded from www.heinekeninternational.com

2

0 0 0 0

60 10 2 1

120 20 4 2

180 30 6 3

240 40 8 4

300 50 10 5

360 60 12 6

420 70 14 7

480 80 16 8

540 90 18 9

600 100 20 10

660 22 11

720

110

24

780

840

1993

1994

1995

1996

1997

1998

1999

20002001

200219

9819

992000

20012002

1998

1999

20002001

200219

9819

992000

20012002

Net profit

on ordinary activities

in millions of euros

Total beer sales

in millions of hectolitres

Heineken sales


Amstel sales


301

297

345

445

516

621

274

236

97.9

90.9

83.1

21.6

20.4

19.4

10.8

715

105.

1

22.4

10.8

10.8

10.5

10.0

795

108.

9

22.9

3

2002 2001 Change (%)

Key Figures 2002

Results in millions of euros

Net turnover (incl. excise duties) 10,293 9,333 10.3

Operating profit 1,282 1,125 14.0

EBITDA 1,811 1,601 11.3

Net profit excl. extraordinary result 795 715 11.2

Net profit incl. extraordinary result 795 767 3.7

Dividend 157 157 –

Cash flow from operating activities 1,184 1,165 1.6

Balance sheet in millions of euros

Total assets 7,781 7,195 8.1

Group equity 2,936 3,139 – 6.5

Shareholders’ equity 2,543 2,758 – 7.8

Issued capital 784 784 –

Per share of €2.00

Number of shares issued 391,979,675 391,979,675 –

Cash flow from operating activities 3.02 2.97 1.6

Net profit on ordinary activities 2.03 1.82 11.2

EBITDA 4.62 4.08 11.3

CEPS 2.05 1.83 12.0

Dividend 0.40 0.40 –

Shareholders’ equity 6.49 7.04 – 7.8

Net turnover in millions of euros

(incl. interregional sales)

Europe (incl. Exports) 8,920 8,077 10.4

Western Hemisphere 1,373 1,176 16.8

Africa/Middle East 835 776 7.6

Asia/Pacific 476 472 0.8

Tangible f ixed assets in millions of euros

Investments less disposals 696 578 20.4

Depreciation and value adjustments 481 465 3.4

Staff in numbers

Average number of employees 48,237 40,025 20.5

of which employed by Dutch operating companies 5,527 5,620 – 1.7

Ratios

Operating profit as % of net turnover 12.5 12.1

Operating profit as % of total assets 16.4 15.6

Net profit as % of shareholders’ equity 31.3 25.9

Dividend as % of net profit on ordinary activities 19.7 22.0

Group equity/other borrowed capital 0.61 0.77

Group equity/fixed assets 0.59 0.76

Current assets/current liabilities 1.06 1.37

Interest cover ratio 12.2 16.5

H E I N E K E N N . V . A N N U A L R E P O R T 2 0 0 2

4

Executive Board

A . R u y s ( 19 4 7 )

Dutch nationality

Chairman

Member

Vice-Chairman

Chairman

S .W.W. L u b s e n ( 19 4 4 )

Dutch nationality

Member

M . J . B o l l a n d ( 19 5 9 )

Dutch nationality

Member

D . R . H o o f t G ra a f l a n d ( 19 5 5 )

Dutch nationality

Member

J . F. M . L . v a n B o x m e e r ( 19 6 1 )

Belgian nationality

Member

until 31 December 2002 from 1 May 2002


Supervisory Board

5

(as at 25 February 2003)

H . d e R u i t e r ( 19 3 4 )

Dutch nationality

Appointed in

Last reappointed in

Chairman of the Audit Committee

Profession: Engineer

Supervisory Directorships:

• Koninklijke Ahold N.V.

• Aegon N.V.

• N.V. Koninklijke Nederlandsche

Petroleum Maatschappij

• Wolters Kluwer N.V.

• Univar N.V.

M . R . d e C a r v a l h o ( 19 4 4 )

British nationality

Appointed in

Last reappointed in

Member of the Preparatory

Committee

Profession: Banker

Vice-Chairman/Investment Banking

Citigroup Inc., United Kingdom

A . H . J . R i s s e e u w ( 19 3 6 )

Dutch nationality

Appointed in

Member of the Audit Committee

Profession: Company Director


• KPN N.V.

• Samas-Groep NV

• AOT NV

J . M . H e s s e l s ( 19 4 2 )

Dutch nationality

Appointed in




• Euronext N.V.

• Laurus N.V.

• Schiphol Groep N.V.

• Koninklijke Vopak N.V.

• Royal Philips Electronics N.V.

• Fortis N.V.

C . J . A . v a n L e d e ( 19 4 2 )

Dutch nationality

Appointed in

Member of the Preparatory

Committee


Chairman and CEO of Akzo Nobel N.V.


• De Nederlandsche Bank N.V.

• Sara Lee Corp. (USA)

Sara Lee/DE N.V. (Netherlands)

• Scania AB (Sweden)

• Member of the Netherlands Pensions

and Insurance Supervisory Authority

J . M . d e J o n g ( 19 4 5 )

Dutch nationality

Appointed in

Chairman

Chairman of the Preparatory

Committee

Profession: Banker

M . D a s ( 19 4 8 )

Dutch nationality

Appointed in

Last reappointed in

Delegated Member

Secretary of the Preparatory

Committee

Profession: Lawyer

Partner in Loyens & Loeff

Management Board:

• Heineken Holding N.V.

J . L o u d o n ( 19 3 6 )

Dutch nationality

Appointed in

Last reappointed in


Profession: Banker

Chairman of Caneminster Limited,

United Kingdom

Two members of the Supervisory Board retire

each year in accordance with a rota which is

determined annually.

Only supervisory directorships and positions with

large quoted Dutch companies and/or Heineken

operating companies are listed here. A complete

list of the other positions held is given when

members of the Supervisory Board are nominated

for (re)appointment.


To the shareholders

We were greatly saddened to learn of the death of

Mr. A.H. Heineken on January , at the age of .

His memory was celebrated at the Annual General Meeting

of Shareholders on April .

The Executive Board has submitted its financial

statements for to the Supervisory Board. These

financial statements, which can be found on pages to

of this annual report, have been audited by KPMG

Accountants N.V., whose report appears on page .

Dividend proposal

The Supervisory Board recommends that you adopt these

financial statements and, as proposed by the Executive

Board, appropriate € million of the profit as dividend

and add the remainder, amounting to € million, to the

general reserve. The proposed dividend amounts to €.

per share of €. nominal value, of which €. was paid

as interim dividend on September . The dividend

for was €..

Board changes

Messrs. J.M. de Jong and C.J.A. van Lede were appointed

to the Supervisory Board of the company and Mr. De Jong

was appointed chairman at the Annual General Meeting

of Shareholders on April . Messrs. R. Hazelhoff and

L. van Vollenhoven retired by rotation and, having reached

the age limit laid down in the Articles of Association,

were not eligible for reappointment. Mr. A. Maas stood

down from the Supervisory Board at his own request.

The Supervisory Board thanks all of them for their service

to the Board.

Mr. A. Ruys was appointed Chairman of the Executive

Board, of which he has been a member since September

and Vice-Chairman since , to succeed

Mr. K. Vuursteen who stood down at the same meeting.

We thank Mr. Vuursteen for his leadership and for the

invaluable contribution he made to the company’s growth.

Mr. D.R. Hooft Graafland was appointed to the Executive

Board by the Annual General Meeting with effect from

May .

Mr. S.W.W. Lubsen, who had been a member of the

Executive Board since , retired from the Board at his

own request with effect from December .

The Supervisory Board thanks Mr. Lubsen for all his work

on behalf the company and his contribution to its success.

Mr. Lubsen will continue to be involved with the company

as a member of the Supervisory Board of Heineken Neder-

lands Beheer B.V.

Messrs. J. Loudon and M.R. de Carvalho are due to retire

by rotation from the Supervisory Board of the company.

A binding nomination for the -appointment of Mr. de

Carvalho, who is eligible for immediate re-election, will be

submitted to the Annual General Meeting on April .

Mr. Loudon has announced that, having been a member

of the Supervisory Board for years, he would not seek

re-election again. The Supervisory Board thanks

Mr. Loudon for active contribution and long service to the

Board.

Corporate governance

The Supervisory Board is aware of the higher standards

of corporate governance which are now required and

devoted some time last year to the consideration, in dia-

logue with the Executive Board, of its own operating

procedures and the way in which supervision and support

of the Executive Board are organised and function within

the Company. Since there is a conflict between exercising

supervision, which obliges the Supervisory Board to keep

some distance from the Executive Board, and providing

expert advice, which requires close involvement, it is

essential that decision-making procedures are properly

structured and transparent. Against this background,

the procedures for the notification of plans to, and evalua-

tion of plans by, the Supervisory Board were examined

and found to be adequate. The Supervisory Board also

discussed the Sarbanes-Oxley Act, a piece of US legislation

which is not applicable to Heineken N.V. because the

Company is exempt under Rule g-b of the US Securities

Exchange Act.

Consultation and decision-making

The Supervisory Board held six joint meetings with the

Executive Board in . The agenda of these meetings

included a number of regular items, including considera-

tion of the company’s strategy, financial position and

results, the operating companies’ policies and business

plans, acquisitions and other investment proposals and

management development. Other items on the agenda

included evaluation of completed investment projects,

interest-rate and exchange-rate risks, financing, pensions

and internal control systems. Meetings convened to con-

sider the results were attended by the external auditors.

Strategy and acquisitions policy were discussed at

length at two of the meetings. One meeting was devoted


6



7

to a presentation on and discussion of the ‘Taking Heineken

to the Next Level’ reorganisation programme initiated by

the Executive Board. The Supervisory Board also discussed

developments in the field of information and communica-

tions technology.

At three of the meetings, the Executive Board withdrew

while the Supervisory Board discussed its functioning and

composition and that of the Executive Board.

The Preparatory Committee, which is responsible for

preparing decision-making by the Supervisory Board,

including decisions relating to the remuneration of the

Executive Board, met six times.

The Audit Committee held two meetings last year, one of

which was attended by the external auditors.

The Supervisory Board takes this opportunity to thank

the Executive Board and all the staff for their continued

commitment in .

De Jong

Das

Loudon

De Ruiter

de Carvalho

Risseeuw

Hessels

Van Lede

Amsterdam, 25 February 2003

Supervisory Board


8


Foreword by the Chairman

In pursuit of its unvarying strategic objectives, Heineken

continued resolutely on its course in 2002. The climate

in which we had to operate was dictated by a flagging

global economy and wet weather in Europe. Net profit on

ordinary activities was 11.2% higher at €795 million.

Profitable companies with good development potential

were acquired, while we worked steadily on improving

our organisation’s effectiveness and strengthening our

ties with customers, suppliers and consumers.

The increase in operating profit reflects both organic

growth and contributions by newly consolidated partici-

pating interests. Higher beer sales, a better sales mix and

higher selling prices were responsible for the organic

growth in turnover. Demand for international beers and

national premium beers in the global market continued

to rise, and sales were substantially higher in the United

States and Poland in particular. Although increased sales

of the Heineken brand accounted for much of the improve-

ment in the sales mix, other beers such as Amstel Light

and our speciality beers, notably Desperados, also helped.

Consistent implementation of strategy

It is still our goal to defend and strengthen our global mar-

ket position and preserve our independence. Two strategic

objectives have been defined to help us realise that goal.

The first is to achieve profitable volume growth. Last

year, organic growth and acquisitions raised our beer

sales to . million hl, making us the world’s third largest

brewer and yielding economies of scale at all levels in the

supply chain. Our average operating margin (operating

profit as a percentage of net turnover) increased for the

seventh consecutive year, rising to .% in .

The second objective is to consolidate our leading posi-

tion as the international brewer with the strongest portfolio

of beer brands. Sales of our Heineken brand increased last

year to . million hl (+.%), mainly reflecting vigorous

growth in the United States, Poland and Thailand. We also

made good progress in strengthening the positions of our

other international and local beers, as evidenced by the

.% growth in sales of Amstel Light in the United States and

the rising sales of Desperados, our speciality beer. Sales

of Amstel, which is positioned in the mainstream segment,

remained steady at . million hl.

Merger and acquisition activity continues

The process of consolidation and internationalisation in

the brewing industry around the world continued in .

This process is already well advanced in most countries,

but in China, Russia and Germany in particular the market

is still relatively fragmented. In some European countries,

Heineken’s market share is so large that we are no longer

able to obtain competition authority approval for further

acquisitions, while in other cases the purchase price bears

no relation to the value of the potential acquisition

together with any synergy gains. Although, in Western and

Southern Europe in particular, there are fewer opportuni-

ties now than in the s and s, when Heineken

played a prominent role in consolidating and building

breweries, there are still ample opportunities to acquire

breweries with national or cross-border positions which

offer sufficient added value for shareholders and can help

to grow profits. In we were, however, able to acquire

breweries which met our criteria.

Acquisitions in

The acquisitions we made in and early have

strengthened Heineken’s positions in Russia, the Middle

East, Germany, Central and South America, Kazakhstan

and the Balkans. Heineken sees all these regions and coun-

tries as growth markets for the business.

The acquisition of the Bravo International brewery in

Russia has secured a strong starting position for Heineken

in the world’s fifth largest beer market.

In Egypt, we made a successful public offer for the

shares in Al Ahram Beverages Company, the country’s only

brewer, which also produces and distributes a comple-

mentary range of other drinks, and in Lebanon we in-

creased our stake in the Almaza brewery from % to %.

Net profit

€ million

+ .%

Total beer sales

. million hl

+ .%

Operating profit

€, million

+ %

Net turnover

€. billion

+ .%

Heineken beer sales

. million hl

+ .%

R E P O R T O F T H E E X E C U T I V E B O A R D

9

Both businesses are performing well on their home mar-

kets and will provide valuable support for our Middle East

expansion.

In Germany, we reached agreement, via our joint

venture BrauHolding International, on the purchase of

% of the shares in Karlsberg International Brand, which

has a strong position in the Saarland and Rheinland-Pfalz

regions. The large German beer market, though still

fragmented, offers good potential for growing our market

share and reducing costs.

In Costa Rica, we acquired a % stake in Florida

Bebidas, the country’s only brewery, which also owns a

modern fruit drinks plant and has interests in bottled

water. Heineken also acquired an % interest in COCECA,

the only brewery in Nicaragua, and in Panama we pur-

chased a .% stake in Cervecerias Barú-Panama, the

country’s second largest brewery. The Central American

countries have good long-term economic growth

prospects, their populations include a high proportion of

young people and their beer markets are growing.

In Brazil, we converted our % interest in the Kaiser

breweries into a % interest in Cervejarias Kaiser Brasil,

a company created by the Canadian brewer Molson Inc.,

which purchased Kaiser and combined it with the pre-

viously acquired Bavaria brewing group.

In Kazakhstan, we increased our interest in the Dinal

brewery, which has an % share of this rapidly growing

beer market, to %.

In early we acquired Schörghuber Corporate

Group’s % interest in IRSA, which has a % interest

F R O M L E F T TO R I G H T : G U U S LU B S E N , J EA N F RA N ÇO I S VA N B OX M E E R , T H O N Y R U YS , R E N É H O O F T G RA A F L A N D , M A R C B O L L A N D


10


holding in CCU, the largest brewery in Chile with an %

share of its home market. Licensing agreements have

been signed with CCU for the brewing and distribution of

Heineken beer in Chile and Argentina. Our % interest

in the holding company Quilmes International Bermuda

was sold at a net book profit of € million and the licens-

ing agreements with Quilmes were terminated.

Also in early we reached an agreement in principle

with Southern Breweries Establishment on the acquisition

of a .% interest in Karlovacka Pivovara, the second

largest brewery in Croatia, which has a % market share

and also exports within the Balkans.

Taking Heineken to the Next Level

A new programme has been launched with the object

of raising our operating efficiency and performance to a

higher level. Greater efficiency and effectiveness and a

management which works closer to the market will help us

to perform better. Maximising our performance is essen-

tial if we are to achieve our long-term strategic objectives

and retain our place among the world’s top brewing

groups. The activities under this programme, which we

call ‘Taking Heineken to the Next Level’, include speeding

up business processes, creating ‘win/win’ situations in our

dealings with customers, measuring our performance and

costs and comparing them with both internal and external

benchmarks to identifying and implementing best prac-

tices around the world. The aim of the Executive Board is

to foster an inspiring and challenging culture of innovation

and diversity, as only with such a culture can our employ-

ees lift themselves and Heineken to a higher level.

Young and relevant

To maintain brand relevance, it is important to know

your target groups well. During , Heineken launched

a global programme known as the ‘Beacon’ project to

gather in-depth information on young adults’ aspirations,

motivation and needs, as we place great value on ongoing

dialogue with this age group. We are working with young

adults, selected as representative of their target groups,

to evaluate our current marketing activities and devise

and implement new activities to reinforce and optimise

young people’s affinity with our brands on a market-by-

market basis. We can only keep our brands young, strong

and relevant if we strike the right balance between brand

consistency and prompt updating of our marketing com-

munication to reflect cultural change.

Cooperation

We aim to integrate our support services in the Nether-

lands so that our accumulated expertise and available

capacity can be utilised more efficiently. Good progress

has been made with the development of a uniform

ICT infrastructure and uniform software. New applications

have been installed which enable us to work together

more effectively and increase our productivity, and we

have continued to develop e-business applications for

transactions with our customers and suppliers. Heineken

places great value on the establishment of efficient and

transparent relationships with customers and suppliers

which benefit all parties.

Cooperation is facilitated by our systems, networks,

databases and training courses and by the knowledge

that we always have colleagues somewhere in the world

who have extensive experience with specific market

situations or business processes. In more and more areas,

it is our people who are making this cooperation a success,

in more and more areas, and I am pleased to see that

our determination to learn from one another is still grow-

ing and that operating companies have taken over many

successful programmes from one another in the past year.

I thank all our staff for their untiring enthusiasm, profes-

sionalism and commitment during .

Thony Ruys

Chairman of the Executive Board


Outlook for 2003

11

Although the immediate economic outlook for many

markets is less than bright, Heineken expects the struc-

tural growth in sales of premium beers and international

speciality beers to continue in 2003, perhaps temporarily

at a slightly slower rate, which will further benefit our

sales mix over the long term. Despite the uncertainties,

we are looking forward to sustained growth in net profit in

2003.

In developing countries, an economic slowdown will

depress beer consumption, because price becomes a sig-

nificant factor for consumers in those countries if their

purchasing power is eroded. In the developed countries,

beer consumption will be relatively unaffected by an

economic downturn, though there may be a temporary

shift towards lower-priced beers, mainly at the expense of

mainstream beers. We do not expect the premium and

international speciality beer segments to decline, as price

is not a significant factor in those segments and the trend

towards ‘less but better’ is too strong. Given our strong

position in the premium segment, we can therefore look

forward to a further improvement in our sales mix.

Regions

If there is any growth in the beer market in Western and

Southern Europe, it will only be modest. Our operating

companies in these regions are concentrating primarily

on reducing costs, strengthening the brand portfolio and

improving the sales mix, by expanding sales of premium

and speciality beers. The main objective is to secure

the largest possible share of the profitable segments of

the beer market.

In Central and Eastern Europe, the upward trend in beer

consumption is only occasionally interrupted by tempo-

rary factors, such as a poorly-performing economy or

increases in excise duty, so there is scope for us to grow

our sales in this region. Heineken has also invested a great

deal of effort in the region in keeping costs as competitive

as possible and improving the sales mix.

In North America, we predict sustained growth in the

imported beer segment in both the United States and

Canada. With Heineken and Amstel Light, we are ideally

placed to benefit from this trend. The popularity of

‘malternatives’ (ready-to-drink mixes), which are in com-

petition with a part of the beer market, has passed its

peak. Against the background of slower economic growth,

our pricing policy in is likely to be more cautious than

in .

In Latin America, the acquisition in early of a %

interest in IRSA, which owns % of CCU in Chile,

has created excellent opportunities for developing our

business in this region. CCU is to take over the production

and distribution of Heineken beer from our former Argen-

tinian partner. Given the economic situation in Argentina,

it is difficult to predict the trend in beer consumption in

the region in the short term, but we are looking forward to

further sales growth in the longer term.

We do not foresee any significant changes in the

Asia/Pacific region. Beer consumption will continue to

rise, but the picture may differ markedly from one country

to another. We predict sustained growth of both the

Heineken brand and our local brands.

Africa has great growth potential, but whether that

potential is realised will depend largely on how consumer

purchasing power develops. Many of the local economies

are reliant on the world market prices for oil, minerals

and agricultural commodities. The future trend in these

prices is hard to forecast, making it difficult to give short-

term predictions for the beer markets in this region.

Acquisitions, investments and cost-savings

It is a requirement that new acquisitions must contribute

to Heineken’s long-term profit growth. One of our primary

aims is to strengthen our position in attractive, growing

markets.

In Europe, we are planning further expansion of our

production capacity to meet the rising export demand.

The new brewery in Nigeria is scheduled to come on

stream in early , but the brewery in Vietnam will not

be completed before the end of the year. Investments in

tangible fixed assets in will total around € million,

which will in principle be financed out of existing cash

reserves and cash flow and if appropriate supplemented

by external financing.

In early , we acquired an interest in CCU, the

Chilean brewery group, and sold our holding in Quilmes

International Bermuda, resulting in a net cash outflow of

€ million. The proposed acquisition of a .% interest

in Karlovacka Pivovara in Croatia is also part of this com-

bined transaction. We also agreed to advance a subordi-

nated loan of approximately € million to the pension

fund in the Netherlands. These transactions will be funded

largely by external financing.

We shall continue to reduce costs and increase efficien-

cy, which means that, excluding acquisitions, the steady

downward trend in the total number of employees is likely

Outlook for 2003

to continue. Other contributory factors, apart from the

ongoing improvements in our business processes, will be

the reorganisation projects in Spain and the Netherlands

and the closure of one brewery in Poland.

Profit forecast

Our results are affected from year to year by factors which

are difficult to predict such as exchange rates, govern-

ment policy and the weather. Further in higher pen-

sion charges, the cost of launching Heineken beer in the

premium segment in the United Kingdom, the effects of

the weaker dollar, the deteriorating economic situation

in many countries, will also play a role. The newly acquired

breweries will deliver a positive contribution. Despite

these uncertainties, Heineken expects further growth

in net profit in . The possible impact on our results

of increasing international tensions can't be predicted.

We shall also realise a non recurring after tax gain of

€ million in on the sale of our % stake in the

Argentinian brewer Quilmes International (Bermuda) Ltd.

We remain positive regarding the longer-term profit

outlook, given the success of our corporate strategy,

the strength of our brands, our international coverage,

the current debt capacity at our disposal and our exten-

sive international experience.

You have to work hard to keep

your place among the leading

international brewers. Stand-

ing behind Heineken, Amstel

and our other brands is a global

organisation working constant-

ly to respond to the changing

needs and wishes of custo-

mers, consumers and the wider

community. Heineken strives

for innovation in all links in the

supply chain. Recent innova-

tions include ingenious

dispensing systems, advances

in quality and safety monitor-

ing in the brewing and bottling

processes, imaginative new

packaging designs, welcoming

themed bars, interactive com-

munication with our target

groups and new approaches to

understanding the needs of

young adults. Some examples

are given in this annual report.

I n n o v a t i o n>


2002 in Retrospect

13

Heineken

The Heineken brand achieved sustained growth last year,

with sales rising from 22.4 million hl to 22.9 million hl

(+2.5%). Most of the growth in sales was generated in the

United States, Poland and Thailand.

The growth of the Heineken brand largely reflects our

efforts to enhance brand value and secure a higher level

of consumer preference while improving availability,

both via the acquisition of beverage wholesalers, such as

in France, Italy and Slovakia, and via cooperation with new

distribution partners, such as in China and Portugal.

The development and refinement of our central market-

ing information systems has enabled us to optimise the

quality and international consistency of our marketing

activities and tailor them more closely to individual mar-

kets and specific target groups within those markets.

An important new vehicle for gathering detailed market

information is our global ‘Beacon’ project, through which

Heineken engages in dialogue with young adults on their

aspirations, motivation and preferences. The findings are

used as the basis for marketing projects in which substan-

tive input by and active involvement of this target group

play an important part. This research also helps us to take

regional and local cultures into account in our marketing

projects and marketing communication.

Updating our packaging and tailoring it to consumers’

needs is a constant priority. Several new can designs were

introduced last year and a new aluminium bottle was

launched in France.

Marketing communication

Further advances were made in facilitating the exchange

of expertise and information between our operating

companies in the area of advertising campaigns and other

brand management tools by expanding and making more

intensive use of our intranet portal and organising brand

workshops in local markets. Operating companies in

smaller countries or emerging markets are increasingly

using campaigns developed centrally or elsewhere.

Adapting a uniform concept for optimum deployment in

local markets benefits the quality and consistency of our

advertising campaigns.

Sponsorship and on-line activities, which provide excel-

lent opportunities for responding to the needs and wishes

of specific target groups, accounted for a growing propor-

tion of our total marketing communication effort.

Although the mix of marketing communication-related

activities may differ widely from one market to another,

it is essential in all cases that the activities are related and

mutually supportive.

Heineken focuses its sponsorship activities chiefly on

music, film and selected sporting events, mainly tennis

and rugby. As in , music sponsorship again accounted

for most of the growth in our sponsorship expenditure,

because music is an ideal medium through which to share

Heineken’s brand values with our target groups.

Our music-related activities were amalgamated last year

to create a new website, www.heinekenmusic.com, to

provide a global music platform which enhances the inter-

activity and effectiveness of our music-related marketing

communication. Thirst, a series of dance events featuring

both world-class and local DJs, was staged in many

countries around the world, to which numerous related

activities were linked, both online and via retail outlets.

The Thirst concept and its execution, including a DJ com-

petition, were based partly on the findings of our new

‘Beacon’ project.

Brand awareness was boosted by our sponsorship of

several annual European music festivals, including Green

Energy in Ireland, Jammin’ in Italy and the FIB festival in

Spain. A number of successful activities were organised

in the United States by Heineken Music Initiative Inc., which

was formed last year to support young talent. The Green

Room Sessions concert series in Singapore won several

international awards.

Our involvement in and expenditure on film sponsorship

also increased, to support the Heineken brand’s interna-

tional stature. The films we sponsored included Hollywood

productions such as ‘The Bourne Identity’ and the new

James Bond film, ‘Die Another Day’.

The principal sporting events we sponsored last year

were the Australian Open, US Open and Masters Cup tennis

competitions and the Heineken Rugby Cup, a competition

for top European clubs. As in , we also sponsored

many local events to reinforce our local identity.

Amstel

While the mainstream beer segment, in which Amstel

is positioned, contracted in several important European

markets, in many others, especially outside Europe,

Amstel recorded growing sales. Amstel’s total sales

volume remained stable at 10.8 million hl.

Amstel was not immune to the effects of the declining

mainstream beer market. The wet weather and sharply


14

2002 in Retrospect

reduced tourist numbers in Southern Europe had an

adverse effect on consumption, but sales in Africa and

the United States were substantially higher. Sales also

developed well in a number of new markets in the Balkans

and in Lebanon and Ireland.

As well as lager, Amstel also markets a selection of other

beers which have become popular with a broad target

group and are successful in many markets. Amstel Light,

a low-calorie beer, benefited from the rising demand

for lighter beers in a number of mature markets, chiefly

outside Europe. Sales of Amstel light also rose rapidly

in the United States, in response to our greatly increased

marketing effort. Although still modest, sales of Amstel

Bright, a speciality Caribbean beer brewed on Curaçao,

developed promisingly.

Marketing communication

The growing exchange of expertise and intelligence be-

tween our operating companies is benefiting the quality,

consistency, efficiency and local optimisation of Amstel’s

brand management. The ‘Three Friends’ campaign con-

cept, which was developed in the Netherlands, has been

adopted in several other countries. With its particular

brand values, Amstel lends itself to tie-ins with popular

sporting events. In Europe, Amstel was again the principal

sponsor of the UEFA Champions League for top European

football clubs and continued to sponsor the African Cup

of Nations for national football teams, the most important

sporting event on the African continent. In the United

States, where Amstel Light sponsors leading golf tour-

naments, association with this prestige sport fits well with

the brand’s image. As in , Amstel also sponsored

numerous local events with strong local appeal.

International Special ity Beers

Demand for speciality beers is rising fast and sales grew

strongly in many markets, reflecting the consumer’s need

for variety. Sales of our international speciality beers,

which generate above-average margins once a given

volume is reached, increased from 1,314,000 hl to

1,364,000 hl.

Although international speciality beers still represent

only a small proportion of Heineken’s total sales, they have

growth potential and help to improve the sales mix.

In more and more markets, they are a permanent part of

our portfolio alongside local speciality beers.

Desperados, a tequila-flavoured speciality beer, main-

tained the rapid growth achieved in and performed

extremely well in France, Germany and Spain in particular.

Desperados has a strong appeal to young adults and good

international development potential.

Sales of Paulaner Hefe Weisse, a traditional white beer

produced by BrauHolding International, our joint venture

Geographical distr ibution of Group volume

in 1,000 hl of beer

Europe 57,913 55,388 4.6

Western Hemisphere 8,380 7,810 7.3

Africa/Middle East 10,558 9,899 6.7

Asia/Pacific 7,997 7,837 2.0

Group volume 1 84,848 80,934 4.8

Affiliated companies 24,101 24,131 – 0.1

Total beer volume 2 108,949 105,065 3.7

Change (%)20012002

1 Group volume = beer volume sold by consolidated companies

and Heineken beers brewed under licence by third parties.2 Total beer volume = Group volume plus beer volume produced

by affiliated breweries Kaiser and Quilmes.


15

2002 in Retrospect

in Germany, developed well. We see Paulaner Hefe Weisse,

which has substantial market positions in Germany, Italy,

Spain, France and the United States, as one of the main-

stays of our portfolio of speciality beers.

In the UK and Ireland, stout continued to lose ground to

lager. Sales of Murphy’s Irish Stout were down, mainly due

to lower sales in the UK, but Murphy’s Irish Red achieved

significant growth in Spain.

Affligem, our Belgian abbey beer which has gained a

reputation as a high-quality beer for the connoisseur,

sold well in France and Spain and we expect it to find good

niche-market positions in other countries. Sales of Wieckse

Witte, a light, fresh-tasting white beer, were lower due to

the poor summer in Western Europe. Kriska, a vodka-

flavoured beer, was launched in France and sales have

exceeded our expectations.

Research and Development

Research and development are the basis of innovation

and therefore have strategic importance for Heineken.

Much of the R&D activity is carried out locally, but coor-

dination is centralised. The R&D programme covers the

entire supply chain, from the evaluation of new and

improved strains of barley and hops to the development

of new products and packaging. On many projects,

Heineken works closely with other companies, suppliers,

research institutes and universities around the world.

The most significant innovation last year was the David

dispensing system for retail outlets with a relatively low

beer turnover. The David system, which uses a -litre keg,

offers good returns at lower sales volumes than the sys-

tems based on a -litre keg. The patented David dispens-

ing system is user-friendly, there is no wastage and no

pipework to be cleaned and, once connected, the keg

contents remain fresh up to seven times longer than with

the traditional dispensing systems. The number of David

systems installed since the launch has exceeded our

expectations.

A new -ounce (-cl) can was developed for the US

market, to supplement our successful -ounce keg-

shaped can which had been introduced previously.

Warka in Poland became the first brewery to install a

membrane filtration system. This technology, which is

employed at the final filtration stage, replaces kieselguhr

and is therefore more environment-friendly.

Trials started with a new bottle inspection system known

as FBI (Filled Bottle Inspector) in , which enables us to

detect glass fragments and other foreign objects in bottles

after filling. The FBI system, which has been developed by

Heineken in conjunction with other companies, is currently

undergoing extended testing at one of our breweries.

Health, Safety and Environment

Our operating companies achieved good results with

their water-saving projects. In the years ahead we shall

intensify our efforts in the area of energy-saving.

Our health and safety programme in Africa was extended.

Having previously published a two-yearly environmental

report, Heineken published its first biennial safety, health

and environment report last year, covering the period

–. This latest report was extended to include

information on the environmental performance of our

businesses outside Europe and our safety performance in

Europe. In recognition of our approach to reporting on

our social responsibility and sustainability policies and our

performance in those areas, Heineken was included in the

Dow Jones Sustainability STOXX Indices and the Store-

brand Index. Companies which perform well both finan-

cially and in terms of their social responsibility are admit-

ted to these indices.

Health and safety

Heineken makes every effort to prevent circumstances

arising at its breweries which might jeopardise the health

and safety of its employees and third parties such as sup-

pliers and people living close to its plants. Where local

legal statutory requirements and rules do not exist or are

deficient, Heineken sees it as its responsibility to develop

and apply its own standards. Information and awareness

are essential to prevent employees being exposed to

unsafe and unhealthy conditions.

On the basis of a risk analysis performed on the findings

of a comprehensive health and safety study carried out

at our Bralima brewery in the Democratic Republic of the

Congo, guidelines have been drawn up for personnel

instruction and training which will be introduced at all our

breweries in Africa. One element of our medical policy in

Africa is care for employees who are HIV-positive or have

contracted Aids. Last year, we invested mainly in improv-

ing the medical/social infrastructure in the Democratic

Republic of the Congo and the Republic of the Congo.

The exchange of expertise between our European loca-

tions resulted in more consistent standards for our instal-

lations and more extensive and better coordinated safety

training provision.


16

2002 in Retrospect

Environment

As well as being beer’s principal constituent, water plays

an important part in many stages of the production pro-

cess. Heineken’s policy of economising on water consump-

tion has now been introduced in all operating companies

in which we have a majority interest. The impact of our

‘Aware of Water’ programme, which was launched in ,

was clearly apparent. A new system installed under our

waste-water treatment expansion programme was com-

missioned at Ibadan in Nigeria in . Work on a new

waste-water treatment plant at Enugu in Nigeria is in

progress and the contracts for construction of the plants

at Kinshasa in the Democratic Republic of the Congo and

Hatay in Vietnam have been awarded.

New waste-reduction and energy-saving programmes

are being developed and will be implemented in the next

few years. The target for our ‘Aware of Energy’ programme

is to reduce energy consumption by % from the begin-

ning of to the end of . Achieving that target will

require both promotion of energy-saving practices and

adoption of new technologies, such as heat recovery and

biogas.

Alcohol and Society

Most people use alcohol sensibly, as one of the pleasures

of life, but a small minority abuse it, and that can lead

to problems. Heineken initiates and supports – in some

cases with the European trade organisation – information

and education projects to prevent alcohol abuse and

has formulated internal rules to ensure that its marketing

messages do not encourage it.

Heineken regards acknowledgement of the distinction

between responsible use and abuse of alcohol as the basis

for effective action by and cooperation between the indus-

try, government and other organisations to prevent and

curb alcohol abuse. Governments still resort too often to

blanket measures to address alcohol-related problems,

for example by restricting advertising or distribution or

influencing prices through excise duty. The use of alcohol

only presents a danger to safety and/or health if it is used

at an inappropriate time, for example before driving a

vehicle or operating machinery, or in excessive quantity.

In a growing number of countries, we are going further

than imposing internal rules to prevent our commercial

communications encouraging alcohol abuse. In the United

States, the Netherlands, Ireland and Italy, our advertising

now carries a warning against abuse and we are planning

to introduce similar messages in other countries.

A joint approach by the industry, government and health

organisations to combating alcohol-related problems is

one of the objects of the dialogue project initiated by the

Amsterdam Group of international companies, with which

Heineken cooperates in promoting responsible alcohol

use and preventing its abuse. However, cooperation with

governments in this area cannot be truly effective until the

dialogue project is sufficiently advanced and a common

position on the issue has been agreed.

The first phase of a ‘virtual forum’ project in the

Netherlands, which enables young people to learn about

the use of alcohol and other substances via an interactive

game, has been completed. This sociopsychological

approach is designed to find effective ways to help young

people avoid behaviour which incurs health risks.

Personnel

The average number of people employed by Heineken

increased by 8,212 to 48,237, due to the acquisition

of several breweries and beverage wholesalers. Excluding

acquisitions, the number of employees decreased,

as a result of the action taken to boost efficiency.

Central personnel policy is involved with the recruitment,

development and retention of managers for senior inter-

national positions. The operating companies have their

own policies for other staff which take account of the local

labour market, regulations and practices.

As an international group, Heineken needs managers

with an international outlook and a recognisable manage-

ment style. Heineken fosters the creation of a shared cul-

ture and encourages the international exchange of expert-

ise by organising international postings for management

trainees and placing staff, including senior management,

on temporary secondment. In there were expa-

triates working within the organisation, of whom were

relatively young. These expatriates came from coun-

tries and were employed in host countries.

The findings of the Europe-wide study of recruitment

and retention of highly qualified staff, which was complet-

ed in , will be used by Heineken as a starting-point

for encouraging the individual employee to take a more

active role in the development of his or her career.

A new cooperation agreement between the European

works council and Heineken N.V. came into effect on

January which clarifies the decision-making process

in relation to important local acquisitions and requires

that the European works council be informed in good time.


2002 in Retrospect

17

Training

Productive application of knowledge is essential if

Heineken is to strengthen its competitive position. So that

it can respond swiftly and effectively to change, whether

triggered by growing competition, globalisation, advances

in information technology or social trends, Heineken as an

organisation must be committed to continuous learning.

To supplement our regular local and international training

courses, the Heineken University provides a range of short

and intensive training programmes to promote the sharing,

creation and mobilisation of expertise within the Heineken

organisation. Over , employees took part in the activi-

ties organised by the Heineken University in , some of

which were held at the Learning Centre in Amsterdam and

some in the different regions and countries. A virtual learn-

ing centre was added last year, so that e-learning modules

can be incorporated as a permanent element in all courses.

The Heineken University carried out a survey last year of

the changing demands made on management and leader-

ship, learning processes in different cultures and the effec-

tiveness of teams. The survey findings have been applied

in new programmes and teaching materials.

Africa/Middle East

11,093

Western Hemisphere

1,451

Geographical distr ibution of personnel

in numbers

Asia/Pacific

4,849

Netherlands

5,527

Rest of Europe

25,317


18

Regional Review

1.1

2.2

2.8

3.7

4.5

5.7

6.3

7.5

8.4

10.0

1.0

0.8

0.5

0.5

2.9

59

64

73

78

82

89

123

152

53

4342

29

31

35

Hungary

Macedonia

Oth

er countri

es

Switz

erland

Irelan

d

Bulgar

ia

Slova

kia

Russia

Greece

German

ySp

ainItaly

Netherla

nds

Poland

Fran

ceIta

ly

Macedonia

Fran

ce

Greece

Russia

Bulgar

ia

Switz

erland

Poland

HungarySp

ain

Netherla

nds

Slova

kia

German

y

Irelan

d

Group volume

Europe 2002

by country, in millions of hectolitres

Beer consumption

Europe 2001

per capita, in litres

0 0

1 15

2 30

3 45

4 60

5 75

6 90

7 105

8 120

9 135

10

11

150

165


19

Sales in Europe increased from . million hl to .

million hl (+.%). Most of the sales growth reflects

the first-time consolidation of the newly acquired

breweries in Russia and Germany. The fastest organic

growth in sales volume was recorded by the breweries

in Poland, Slovakia and Bulgaria. Sales in a number of

Southern and Western European markets were under

pressure.

In most countries in Europe there is a growing preference

for premium beers at the expense of mainstream beers.

This trend, which has been in evidence for some years,

is beneficial to our profitability. Rising sales of speciality

beers in many countries also helped to improve the sales

mix.

Beer consumption was depressed by the wet weather

in Southern and Western Europe and reduced tourist

numbers in Greece and Spain, combined with the effect

on customer volume of the above-average price rises in

the on-trade sector, in which the introduction of the euro

and increased costs were contributory factors.

Heineken welcomes the accession of ten new countries

to the European Union, a development which Heineken

has anticipated fully with the investment strategy it has

pursued in recent years. Purchasing power in these

countries is set to increase significantly in the long term,

which will foster greater brand awareness and promote

growth in the premium segment.

The wave of mergers and acquisitions continued in the

brewing industry in Europe, including Germany and Russia.

Bravo International, our Russian brewery, and BrauHolding

International in Germany were included in Heineken’s con-

solidated accounts for the first time. Heineken strength-

ened its position in Germany with the acquisition of a

minority stake in Karlsberg International Brand, the mar-

ket leader in the important Saarland and Rheinland-Pfalz

regions. In early , Heineken reached an agreement in

principal on the acquisition of a .% interest in Karlo-

vacka Pivovara, the second largest brewery in Croatia with

a market share of %.

19

Regional Review

Europe

1998

1999

20002001

2002

Group volume

Europe


0

5

10

15

20

25

30

35

40

45

50

55

60

50.7

55.4

57.9

45.4

38.2

D a v i d F r e s h d r a u g h t b e e r a t l o w - v o l u m e o u t l e t s>

It’s not big, but it’s very clever:

that’s our new David dispensing

system, based on a -litre keg.

For low-volume outlets, selling

between and glasses

of beer a day, David is a cost-

effective solution. Where only

bottled and canned beer was

an economic proposition, beer

on draught is now an option.

The David system keeps the

beer fresh for a minimum of

days and is very easy to use.

Demand exceeded all expec-

tations in most of the countries

where David was introduced

in , and the system will

be launched in many more

markets in . This innova-

tive, patented draught beer

dispensing system was devel-

oped in-house by Heineken.


Regional Review

21

NetherlandsLevel result in a slightly softer market

Demographic factors caused the Dutch beer market to

contract slightly. Beer prices rose in response to an 18%

increase in excise duty and higher costs. Heineken

Brouwerijen’s sales declined from 6.5 to 6.3 million hl,

but our market share held firm. Despite the lower sales,

an improved sales mix helped to keep the result level.

The Heineken companies in the Netherlands have started

operating a number of shared support services, with the

aim of improving quality and reducing costs.

There is a clear shift in the beer market from the on-trade

to the take-home sales channel, helped by longer super-

market opening hours and the growing availability of chill-

ed beer in supermarkets. This is impacting on on-trade

sales of draught beer, and competition between breweries

for outlets in the on-trade sales channel is intensifying.

With .% of the market, lager is the dominant beer. Sales

of competing ready-to-drink mixes declined in the second

half of , which indicates that these drinks have passed

their peak.

Sales of Heineken beer held steady. The brand was sup-

ported by the popular ‘Biertje’ campaign, new forms of

packaging and sponsorship activities. Events sponsored

by Heineken included the Fast Forward Dance Parade,

Dance Valley and a one-off concert by rock legends Queen

to mark the Queen Beatrix’s Birthday. The new twelve-

pack of one-way green -cl bottles was rated by retailers

as the best newcomer to their shelves in . Heineken

Brouwerijen also introduced a -bottle crate for the

on-trade sales channel. The David dispensing system,

which uses small -litre kegs, was launched in early

and was enthusiastically received by the on-trade.

Around systems are now in use in the Netherlands.

Sales of Amstel were down, reflecting its relatively

strong position in the depressed on-trade sales channel.

Amstel Bright, which is imported from Curaçao, and

Desperados posted strong growth. Amstel’s ‘Three Friends’

concept continued to enjoy high consumer ratings.

The rapid growth in export sales has made it necessary

to expand our production facilities, mainly for the produc-

tion of Heineken and Amstel Light, in Zoeterwoude and

Den Bosch. Work has started on this extension project,

which will take our total capacity in the Netherlands to

over million hl per year. To reduce costs, production at

De Ridder brewery in Maastricht has been transferred to

Den Bosch.

The plan to close our De Ridder brewery was announced

at the end of .

Vrumona, our soft-drinks company in the Netherlands,

operated in a declining market. Although its market

share contracted a little, Vrumona’s result was higher,

thanks to improvements in the sales mix and cost-savings.

Dairy-based drinks are gaining in popularity at the expen-

se of traditional soft drinks, such as cola, orange and

lemon/lime. Demand in general is shifting from carbon-

ated to still drinks, and Vrumona responded to this trend

by launching several new products, including SiSi No

Bubbles Orange/Mango, Pepsi Twist and -Up Tropical

Splash. Vrumona has embarked on a new cost-reduction

programme.

FranceImproved result in a softer market

The slow downward trend in the French beer market was

compounded in 2002 by the effect on consumption of the

poor weather. Competition intensified. Sogebra’s sales

were down from 7.8 million hl to 7.5 million hl, in line with

the market, but the result improved, reflecting a better

sales mix which was largely due to the success of Despera-

dos, higher selling prices and lower costs.

As the premium and speciality beer segments continued

to grow, the Heineken brand achieved higher sales and

increased its market share, despite the slower beer mar-

ket in the on-trade sector in particular. The introduction on

a limited scale of Heineken in innovative aluminium bottles

was a great success and roll-out will continue in .

The Heineken brand was supported by new print-media

and billboard advertising. As well as taking the lead as the

best-selling speciality beer in France, Desperados also

reported greatly increased exports. Sales of Amstel,

which is only sold in the on-trade sales channel, declined

in line with the rest of the mainstream beer segment.

“” Export, which is also positioned in the mainstream

segment, suffered the effects of competitors’ price-

cutting promotions and sales were lower. New product

launches included “” Export Demi-Rondelle, a lemon-

flavoured beer, and Panach’ Peche, a peach-flavoured

shandy. The launch of Kriska, a vodka-flavoured beer,

exceeded expectations. Sales of Affligem, an abbey beer

produced by our Belgian brewery, were higher in both the

on-trade and take-home sectors.

Europe


22

Regional Review

SpainImprovement in second half of

Although the Spanisch beer market grew a little last year,

on-trade sales were down. Heineken España reported

sales of 10.4 million hl in 2002, compared with 10.0 million

hl in 2001. The result was also down, but market share

improved in the second half of the year.

There was some growth in the Spanish beer market des-

pite poor weather, reduced tourist numbers and higher

consumer prices related to the introduction of the euro.

There was also an increase in excise duty with effect from

January , which led to stockpiling at the end of .

Heineken España lost some market share, due to its

relatively strong position in the on-trade sales channel,

where a reduction in demand was concentrated, and the

enforced sale of two breweries and a number of regional

brands in the course of .

Sales of the Heineken brand were higher and Cruz-

campo volume held firm, while sales of the Amstel Aguila

mainstream brand and low-priced beers declined.

Heineken España runs an extensive support programme

for on-trade establishments, offering total concepts for

positioning and design of themed outlets. By the end

of , the number of themed outlets had risen to .

Positive publicity for Heineken España’s brands was gener-

ated through sponsorship of various events.

Cruzcampo Future, a one-litre PET bottle, was launched

last year. Cruzcampo Big, a wide-necked bottle, and

Amstel , which had both been test-marketed in ,

were introduced nationally. Spanish consumers are

increasingly acquiring a taste for speciality beers, and

Desperados in particular reported growing sales. Two new

speciality beers were launched: Legado de Yuste, a charac-

teristically Spanish abbey beer, and Cruzcampo Selección

Especial. Higher sales were also reported for Guinness

stout, which is brewed under licence, and our own

Murphy’s Irish Red and Buckler alcohol-free beer.

Following the enforced sale of two breweries in ,

Heineken España embarked on a cost-cutting programme,

which will mean reducing the workforce by around

by .

To strengthen its logistics function, Heineken España

has a separate distribution organisation which, in addition

to the distribution of our beer brands via allied distrib-

utors, also supplies wines, spirits and soft drinks.

Sales of imported Heineken beer on the Canary Islands

increased slightly, despite a substantial rise in import

duties.

ItalyStronger result in a weaker beer market

Beer consumption in Italy declined a little compared with

2001, with weaker sales in the on-trade sector in particu-

lar. Heineken Italia’s beer sales remained flat at 5.7 million

hl, and its market share increased slightly. The result

improved, due mainly to a better sales mix and greater

internal efficiency.

Heineken, Birra Moretti and Ichnusa, Heineken Italia’s

principal brands, achieved substantial growth, but sales of

Dreher and a number of low-priced beers fell short of the

previous year’s level. Speciality beers also sold in greater

volume. Ichnusa, which is available only in Sardinia,

confirmed its position as the leading brand on the island.

The launch of the new David dispenser was a great success

and over , systems have now been installed in Italy.

The Heineken brand received additional support

through Heineken Italia’s sponsorship of a number of

music events, the most prominent being the Heineken

Jammin’ Festival and the Umbria Jazz Festival. Moretti

continued its successful sponsorship of the Trofeo Birra

Moretti tournament, which is contested by the top Italian

soccer teams.

The usage of and facilities provided by the Hiweb inter-

net application, through which on-trade customers,

dispensing equipment servicing contractors and Heineken

Italia’s sales organisation can communicate directly,

continued to grow.

Partesa, Heineken Italia’s distribution organisation, per-

formed well and its margins improved. Partesa acquired

a number of additional beverage wholesalers to augment

its distribution network.

Following the decision to increase capacity at the

Massafra brewery, work on the expansion project is in

progress and is scheduled for completion in .

The process of replacing the Heineken, Birra Moretti

and Ichnusa bottles and crates is practically complete.

Europe


Regional Review

23

GreeceImproved result in a gradually rising market

The beer market picked up a little, despite wet weather

and a reduction in tourist numbers. Athenian Brewery’s

sales increased slightly to 3.7 million hl and its result

improved.

Athenian Brewery achieved sustained growth in Heineken

beer sales, helped by the marketing campaigns launched

the previous year based on our sponsorship of the Olympic

Games in Greece in . The campaign used several tele-

vision commercials as well as newspaper, magazine and

billboard advertising. Involvement in the Olympic Games

will be a major boost for the Heineken brand. Amstel sales

remained at the previous year’s level. Sales of Alfa, an

authentic Greek beer, developed in line with the market.

Our brewery is working to make beer drinking less season-

al by stepping up its advertising effort in the low season.

Sales of our Ioli mineral water were down. Exports of

Amstel, Marathon, Athenian and Alfa beers to the neigh-

bouring countries were higher. Imported Amstel is the

top-selling beer in Albania.

GermanySales and results in line with forecast

BrauHolding International, our joint venture with Schörg-

huber Corporate Group, started trading on 1 January

2002. The German beer market continued to contract

last year, with the relatively weak economic situation

adversely affecting sales especially in the on-trade sector.

BrauHolding International’s sales were higher and the

first year’s result was in line with expectations. Exports

of Heineken beer to Germany continued to grow.

At the beginning of , the joint venture owned % of

the Kulmbacher brewery and % of Paulaner Group. In

June last year, the purchase was announced of % of the

shares in Karlsberg International Brand GmbH, which sells

. million hl of beer and , hl of other drinks.

Karlsberg, whose principal brand is Karlsberg Urpils, has a

strong position in the Saarland and Rheinland-Pfalz regions.

The transaction has been approved by the authorities con-

cerned. The participating interest in Karlsberg has been

part of BrauHolding International since January .

Paulaner reported strong growth in sales of its speciality

Weissbier, in both its home market of Bavaria and the rest

of Germany, Italy and Spain. Paulaner Weissbier is now

available in elegant long-necked bottles. Auerbräu devel-

oped well, but sales of Thurn & Taxis and Kulmbacher were

down. Mönchshof volume was higher, as were sales of

Sternquell and BrauStolz, the former East German brands.

Sales of soft drinks also increased.

BrauHolding International made cost-savings in several

areas, helped by shared raw material purchasing.

SwitzerlandStable sales in a softer beer market

The Swiss beer market continued to contract slightly.

The economy weakened and tourism was down.

Competition, especially from German and French beers,

intensified. Heineken Switzerland held sales stable at

760,000 hl but returned a slightly lower result.

Heineken Switzerland reported increased sales of

Heineken beer. The local Calanda and Haldengut brands

defended their market share but volume was lower. In the

region where Calanda is strongly positioned, tourism was

also down.

Heineken Switzerland installed a large number of the

new David dispensers in the on-trade sector. The new

brew-house at the Chur brewery came on stream.

Concentrating production at Chur has reduced costs.

IrelandHigher sales and an improved result

The Irish beer market weakened slightly, but lager contin-

ued to grow at the expense of stouts and ales, boosting

Heineken Ireland’s sales from 1.1 million hl to 1.2 million hl

and increasing its market share. Higher beer sales and

higher selling prices combined to produce an improved

result.

Sales increased in both the on-trade and take-home

channels. Heineken Ireland was able to keep sales of the

Heineken brand on target, supported by sponsorship of

the Heineken European Rugby Cup and the Thirst and

Green Energy music festivals. Sales of Murphy’s Irish Stout

were down, in line with the contracting stout market. The

Irish Open golf tournament was sponsored by Murphy’s

Irish Stout for the last time in . Sales of Coors Light

brewed under licence recorded substantial growth.

This American brand is now also available on draught.

Europe


24

PolandSharply higher sales and result

Having remained static in 2001 due to large rises in excise

duty, the Polish beer market grew by around 8% last year.

Neighbourhood shops continued to play a leading role

in beer retailing. Grupa Z.ywiec reported sharply higher

sales, which rose from 7.6 million hl to 8.4 million hl, and

growth in market share. Its result improved significantly.

The restructuring project which was started several

years ago, combined with the revised marketing strategy,

brought clear benefits in . Sales were up by over

, hl, raising Grupa Z.ywiec’s market share to %.

The greatly improved result was achieved against the back-

ground of a weak economy and growing competition from

low-priced beers. Grupa Z.ywiec is concentrating its mar-

keting effort on a selected portfolio of strong brands which

offer good potential. Increased efficiency in both the sales

and distribution functions and the breweries was a contrib-

utory factor in Grupa Z.ywiec’s improved performance.

Sales of both the Heineken brand and Z.ywiec, our Polish

premium brand, were higher. Heineken is now the leading

international premium beer in Poland. Warka Full Light

and Tatra, the national mainstream brands, also grew

vigorously. Sales of Warka Strong passed the million-hecto-

litre mark, helped by wider availability and increased

marketing effort. Sales of the regional Specjal brand were

also up.

In tailoring our marketing and advertising activities to

the severe restrictions which came into force at the end of

, full advantage was taken of the experience gained

elsewhere within Heineken in similar circumstances.

Grupa Z.ywiec acquired further beverage wholesalers, in

order to extend the national coverage of its distribution

network. By expanding, integrating and upgrading the dis-

tribution function, Grupa Z.ywiec is able to offer a support-

ing range of soft drinks and other beverages in addition to

beer, which helps to grow our beer sales faster and more

cost-effectively.

New fermentation tanks for Heineken beer were instal-

led at the Z.ywiec brewery, the installation of a filling line

in Elblag was completed and the brew-house at the Lez.ajsk

brewery was upgraded. The rapid growth in sales has

made expansion and modernisation of the breweries a

priority, and a start was made at the end on extend-

ing the capacity of our Warka, Elblag, Z.ywiec and Lez

.ajsk

breweries. The decision was taken in late to close

down the Braniewo brewery in .

Europe

T h e m e d b a r s C r e a t i n g a b e e r c u l t u r e>

Beer may not be part of Spain’s

national heritage, but a taste

for beer can be acquired

anywhere and having the right

environment helps. Perhaps

that explains the success of

Heineken España’s themed

bars, of which there are already

some , only eight years

after the concept’s launch.

On-trade operators have a

choice of four themes.

The Irish Pub and Gambrinus

evoke the beer culture of

around , Cruz Blanco,

which makes lavish use of

traditional ceramics, looks

back to the Spanish Mediter-

ranean past, and Beer Station,

a recent addition to the range,

recreates the cosmopolitan

atmosphere of a railway station

from the first half of the twen-

tieth century.


25

RussiaIncreased sales and market share

Although the rate of growth slowed, the Russian beer

market still grew at around 8%, with Russian mainstream

and premium beers and international beers accounting

for most of the increase. Bravo International’s sales rose

from 2.3 million hl to 2.8 million hl, and increased its mar-

ket share. In its first year of inclusion in the consolidation,

Bravo made a positive contribution to the result.

Heineken acquired the Bravo International brewery in

St. Petersburg in early . The Russian beer market is

growing rapidly and is already the fifth largest beer market

in the world in terms of volume and is still relatively frag-

mented, despite the presence of a substantial number of

international brewers. The acquisition of Bravo has placed

Heineken in a good position in Russia. Because the brew-

ery failed to meet the ambitious volume targets

agreed with the vendors at the time of the acquisition,

Heineken paid only USD million for the brewery, USD

million less than if the targets had been achieved.

Sales of beer in cans and .-litre and -litre PET bottles

were significantly higher and alcohol-free beer sales also

increased. Selling prices rose more slowly than inflation.

Both Russian premium beers and international premium

beers brewed under licence continued to grow.

This prompted the launch of many new products in this

segment, which translated into heightened competition.

A % increase in the excise duty on beer came into force

on January .

Sales of Botchkarev, our Russian premium beer, were

down a little, but sales of our mainstream Ochota beer

rose sharply, as did sales of Löwenbräu brewed under

licence. The Botchkarev bottle was modernised to empha-

sise its positioning as a premium brand. By the end of the

year, with the support of national TV and billboard adver-

tising, sales of Botchkarev were rising again.

Investments were made in production facilities in

to enable Heineken beer to be brewed in Russia. Heineken

beer is at present still being imported from the Nether-

lands and the high import duties are restricting its growth.

Locally brewed Heineken beer will be introduced in the

first half of .

HungaryStable result in a competitive environment

Although the Hungarian beer market grew, margins were

under pressure from intense competition between major

Europe


26

Regional Review

players in the market. Amstel Brewery Hungary’s sales

were down from 516,000 hl to 486,000 hl, but the result

held steady thanks to improvements in the sales mix

and cost savings.

Sales of Heineken beer were especially good, with the new

-cl can sold through supermarkets proving particularly

successful. Sales of the Amstel and Talleros brands were

down. Rationalisation of the number of Amstel packaging

variants to cut costs entailed some loss of sales, but

produced an improved result. Marketing plans to increase

Amstel sales are under development. Amstel Brewery

Hungary installed almost David dispensers at

customers’ premises.

SlovakiaGrowth in market share and result

The Slovakian beer market grew by around 5%, mainly

in the alcohol-free and lighter beer segments. Low-priced

beers still account for the bulk of this market. Heineken

Slovensko reported growth in sales from 2.1 million hl to

2.2 million hl, which translated into an increased market

share, and an improved result.

Zlaty Bazant, our local premium beer in Slovakia, continu-

ed to consolidate its position. Sales were up and Zlaty

Bazant is now the leading beer brand in Slovakia. The on-

trade contributed most of the growth in Corgon sales. Our

Gemer brand performed particularly well in the low-priced

beer segment, with sales up by almost %, but sales of

our regional Martiner brand were down.

Heineken Slovensko acquired a number of beverage

wholesalers and made good progress in building its nation-

al distribution network.

Capacity at the Hurbanovo malt-house was expanded

from , tonnes to , tonnes. With a total capaci-

ty of , tonnes, Heineken Slovensko is one of the

largest malt producers in Europe.

BulgariaZagorka brewery attains market leadership

Despite the Bulgarian beer market contracting by over 6%

in response to higher excise duties, our Zagorka brewery

increased its sales by 2% to 1.0 million hl, making it the

market leader, and posted a stable result.

Zagorka, the mainstream brand in the range, performed

well and the Amstel and Ariana brands held their position.

Ariana is the leading brand in the large low-priced beer

segment, which still accounts for over % of the market.

Imported Heineken will be added to Zagorka’s brand

portfolio in . Costs were lower in , thanks to the

brewery modernisation projects implemented in the past

few years.

MacedoniaPivara Skopje posts improved result

Beer consumption in Macedonia rose last year. Pivara

Skopje increased its sales to 0.5 million hl and posted

an improved result.

Sales of Skopsko, the leading beer brand in Macedonia,

were higher, as were sales of imported Heineken and

Amstel beer. Pivara Skopje started distributing Heineken

beer in May , which has brought benefits in terms

of the quality and cost of marketing and distribution. Sales

of soft drinks declined, in the face of competition from low-

priced imports. Work on increasing capacity at the brew-

ery is progressing steadily and will be completed in .

Other European countriesThe beer market in the United Kingdom contracted.

Sales of Heineken Cold Filtered and Heineken Export were

lower, in advance of a change in marketing strategy, and

Amstel sales were down a little. At million hl per year,

the UK is the second largest beer market in Europe. With

lagers in general and premium brands in particular grow-

ing rapidly at the expense of traditional ales and stouts, it

has been decided to launch Heineken beer imported from

the Netherlands in the premium segment in early ,

via our own marketing and sales organisation. Heineken

Cold Filtered beer, a reduced-alcohol variant, will be with-

drawn during . We plan to support the launch with

intensive marketing campaigns and expect the Heineken

brand to have secured a strong position in the premium

segment within five years. A new licensing agreement was

signed for the production and sale of Murphy’s Irish Stout

and Murphy’s Irish Red. Sales of these beers were down

and a plan has been devised to restore the market share to

its previous level.

The Affligem brewery in Belgium reported sharply

increased sales. Around % of Affligem abbey beer is

Europe


Regional Review

27

exported – mainly to France, and it has now been launched

in a number of other European countries. Heineken has

acquired the remaining % of the shares in Affligem and is

now the sole shareholder. The capacity at the brewery has

been increased to meet the rising demand.

Mouterij Albert, our malt-house plant in Belgium which

supplies breweries in Europe, Africa, Brazil and elsewhere,

operated at full capacity and produced , tonnes

of malt.

With the abolition of a number of market-protection

measures, it became possible for the first time to market

canned beer in Denmark . An agreement was signed with

Bryggerigruppen for the distribution of Heineken beer,

which will be delivered in tanks from the Netherlands and

canned locally in Denmark.

Sales of Heineken beer in Sweden , where it is brewed

under licence by the Spendrups brewery, continued to

grow. Most of the growth was in bottled Heineken, which

is important in promoting the brand’s premium image.

An agreement was signed with Hansa Borg Bryggerier

in Norway to brew and sell Heineken beer under licence.

Europe


28

Regional Review

Heineken’s sales in the Western Hemisphere increased

from . million hl to . million hl, with the United

States and Central America accounting for most of the

growth.

Heineken has built a strong position in the Western

Hemisphere, with growing exports to the United States,

Canada and Central and South America. Heineken also

owns a number of breweries in the Caribbean and has

licensing agreements with several brewers in Central and

South America. The long-term demographic and econom-

ic trends indicate good potential for turnover and profit

growth in the Central American region. Although the diffi-

cult economic situation in a number of South American

countries is reflected in a downward trend in beer

consumption, the beer market in this region also offers

good long-term growth prospects for our brands, and

Heineken is therefore seeking to expand its operations in

both Central and South America. Heineken acquired inter-

ests in breweries in Costa Rica, Panama and Nicaragua in

and Chile in .

United StatesHeineken and Amstel Light gain market share

While total US beer consumption remained virtually

flat, the import segment recorded substantial growth

and now accounts for over 11% of the total market.

Sales of our imported beers rose from 5.5 million hl to

6.2 million hl, improving Heineken USA’s market share.

Our prices were raised in the course of the year.

The US beer market grew by around .%, but half of that

growth was in malt-based ready-to-drink mixes (malterna-

tives). Demand for malternatives has peaked and the light

beer segment now accounts for % of the total beer

market. Consumer preference is turning increasingly to

imported beers and premium light beers, which has

benefited Heineken and Amstel Light, our leading brands.

We again increased our investment in marketing.

The greater emphasis on regional and cultural diversity in

our Heineken campaigns is beginning to have an effect

and is bearing fruits among African Americans and

Hispanic Americans. Heineken’s principal sponsorship

activities were again the US Open tennis tournament and

the Mardi Gras festival.

A special Mardi Gras can was introduced to support our

involvement with this popular festival. A new large

Western Hemisphere

0

1

2

3

4

5

6

7

8

1998

1999

20002001

2002

Group volume

Western Hemisphere


7.4

7.8

6.6

6.1

9

8.4

T h e F B I S e e s e v e r y t h i n g>

The FBI (Filled Bottle Inspector)

can detect even the tiniest

particles of glass and other

foreign objects. ‘It’s really a

very simple principle,’ explains

Berco Landman of Heineken

Technical Services, one of the

co-inventors of this revolution-

ary bottle inspection system.

‘The bottle is spun at high

speed on a carousel and sud-

denly stopped. A camera then

takes pictures of the

still-rotating contents in

. seconds. These are

analysed and compared by a

computer, which gives the

alarm if it detects any particles’.

Trials with the FBI system have

been successful and further

mechanical improvements will

be made in . In view of its

importance for product safety,

Heineken plans to give other

bottling plant operators access

to this patented system, which

will be built in partnership with

other companies.

of the Brazilian beer market and Heineken will therefore

continue to be the premium beer in the brand portfolio

carried by the enlarged Kaiser organisation.

Our sales in Argentina and Uruguay were adversely

affected by the economic conditions. Heineken reached

agreement with Quilmes in January that it would sell

its % stake in the latter and that the licensing agree-

ments for the production and sale of Heineken beer would

be terminated in due course.

At the same time, the Company also reached agreement

with its German partner Schörghuber Corporate Group to

purchase the latter’s % interest in IRSA, which has a

majority holding in CCU, the largest brewery in Chile with

an % share of its home market. CCU also owns breweries

in Argentina. Chile is one of the most attractive beer

markets in South America. The licensing agreements for

the brewing and distribution of Heineken beer in Chile and

Argentina will be transferred to CCU. For Heineken, this

new alliance offers good prospects of further growth

in Chile, Argentina and other South American countries.

Sales of imported Heineken beer in Boliv ia and

Colombia were higher. Amstel Light was introduced in

Colombia.

Central AmericaThe beer market in Central America was under some

pressure from slow economic growth and declining pur-

chasing power. Our sales in this region increased from

725,000 hl to 790,000 hl. Heineken strengthened its mar-

ket position in Central America significantly in 2002.

The Central American countries have good long-term

economic growth prospects, their populations include a

high proportion of young people and their beer markets

are growing. As most of the countries in the region have

only one or two breweries, there are opportunities for

generating above-average profits. Despite the still limited

availability, the Heineken brand is regarded as the most

prestigious international brand in the region. If the posi-

tive economic trend is sustained, the Heineken brand has

good medium-term growth potential in this region.

In September, Heineken reached agreement with FIFCO

in Costa Rica on the acquisition of a % interest in

Florida Bebidas, the country’s only brewery, which has a

% market share. Its brands are Imperial, Pilsen, Rock Ice

and Bavaria. The company also owns a modern fruit drinks

plant and is the market leader in bottled water.


30

Regional Review

-ounce (-cl) Heineken can in the shape of a keg,

to supplement the existing -ounce keg cans, was enthu-

siastically received by the market and contributed to

the sales growth. The launch was supported by special TV

commercials.

Amstel Light posted double-digit growth for the fourth

consecutive year. The brand was supported primarily with

an advertising campaign presenting Amstel Light as ‘the

beer drinker’s light beer’, which highlighted the excellent

taste of this low-calorie product, and through sponsorship

of golf and other summer activities.

Thanks to the effort invested in recent years in improv-

ing availability in the major supermarkets, Heineken beer

can now be found on the shelves in the stores operated

by all the leading groups. The focus now is on growing the

sales per outlet. The Star Chain supply-chain management

project, in which Heineken USA’s new beer depots played

an important role, was completed. Lead times have been

significantly shortened and our beer now reaches the con-

sumer much faster than before.

CanadaRapid growth of the Heineken brand

Although the total Canadian beer market remained static

in terms of volume, the imported beer segment continued

to gain ground.

The Heineken brand in particular performed well. The sale

and distribution of imported Heineken and Amstel Light is

handled by Molson Canada Inc.

South AmericaSouth American beer consumption declined slightly,

reflecting the worsening economic situation in Argentina,

Uruguay and Paraguay. Our sales, mainly of Heineken

beer, totalled 400,000 hl.

In Brazil , Heineken converted its former % interest in

Kaiser into a % interest in Cervejarias Kaiser Brasil,

a company created by Molson Inc. which purchased Kaiser

and combined it with the previously acquired Bavaria brew-

ing group, in which Molson Inc. in Canada holds the remain-

ing shares, is the second largest brewery in Brazil with a

market share of about %. The agreement with Molson

incorporates a multi-year licensing contract for brewing

and marketing Heineken beer in the premium segment

Western Hemisphere


Regional Review

31

The agreement also relates to the acquisition of an indi-

rect % interest in COCECA, the only brewery in Nicara-

gua . This brewery also has a % market share, with its

Victoria and Tona brands.

In Panama , Heineken and FIFCO acquired Cervecerias

Barú-Panama, one of the two Panamanian breweries.

Heineken has a .% interest in Barú, which has a %

market share with its Soberana, Panama and other brands.

CaribbeanWith visitor numbers in the Caribbean still showing no

clear sign of recovery following the tragic events of

September 2001, both the purchasing power of the local

population and the beer market were under pressure.

Sales of Heineken beer increased a little and the result

improved slightly.

In the Bahamas , Commonwealth Brewery’s total sales

and results fell short of the level, but sales of

Heineken beer were higher.

The development of Windward and Leeward Brewery

on St. Lucia was held back by the weak economy and the

after-effects of Hurricane Lilly, which damaged the local

economy and that of the neighbouring islands. The banana

industry and tourism were particularly badly affected.

These factors depressed our beer exports from St. Lucia

and the brewery’s result.

Surinaamse Brouwerij in Surinam , trading in a high-

inflation economy, reported reduced sales and a lower

result.

On Curaçao , Antilliaanse Brouwerij’s sales and result

were held back by increasing competition. Sales of

Heineken beer were higher and exports of Amstel Bright

from Curaçao to the Netherlands recorded steady growth.

The economy of Martinique had to cope with a

reduced inflow of tourists and depressed banana prices

on the world market. In a contracting beer market,

Brasserie Lorraine’s sales were down but its result held

firm. Sales of imported Heineken beer increased.

On Trinidad , the licensing agreement for the produc-

tion of Heineken beer was terminated at the end of .

The market will henceforth be supplied with imported

Heineken.

Sales of Heineken beer brewed under licence on

Jamaica failed to rise above the level, as a result of

natural disasters and unrest surrounding the elections.

Sales of imported Heineken beer on Puerto Rico were

down, reflecting higher import duties.

Western Hemisphere


32

Regional Review

Sales increased in virtually all markets in Africa and

the Middle East. Heineken’s overall result improved

and beer sales in this region rose from . million hl to

. million hl (+.%). Sales of Heineken beer in Africa

and the Middle East were especially strong, with

growth of over %. Heineken acquired two brewery

companies in the Middle East, which will provide valu-

able support for our expansion strategy in the region.

AfricaHeineken owns breweries in several African countries

which have substantial shares of their respective national

markets. As well as local brands, these breweries also

sell Amstel beer in some of these countries. Most of the

companies also produce and market soft drinks. In several

countries, the Heineken, Amstel and Mützig brands

are brewed under licence and marketed by third parties.

Heineken beer is imported on a modest scale.

The Heineken brand performed particularly well in South

Africa and Nigeria.

One of Heineken’s main priorities in Africa is staff train-

ing and development, which is a critical success factor for

any brewery. Heineken runs training centres in the region

and also provides training courses in the Netherlands.

A number of common pan-African sales, distribution, inter-

nal organisation, supply-chain management and account-

ing systems were introduced at our breweries last year.

The bottling lines at breweries in several African coun-

tries were replaced with modern equipment offering

not only greater capacity and lower operating costs, but

also improved safety. Construction work is in progress

on waste-water treatment plants at a number of locations.

Although economic and political stability has been

restored to some extent, Nigeria is still heavily depend-

ent on oil revenues. Inflation remained high and beer con-

sumption increased only marginally, due to the protracted

wet season. Nigerian Breweries also reported higher sales,

but was held back for much of the year by a shortage of

production capacity. The result improved despite higher

costs incurred in modernising the breweries and a

substantial general pay rise imposed by the government.

Competition intensified with the entry of a new player in

the Nigerian beer market. Nigerian Breweries’ five existing

production facilities were modernised in and capaci-

ty was extended with the installation of new fermentation

and lagering tanks and additional bottling lines.

Sales of imported Heineken doubled and Amstel Malta

Africa/Middle East

0

1

2

3

4

5

6

7

8

9

10

1998

1999

20002001

2002

Group volume

Africa/Middle East


9.2

9.9

8.8

7.7

11

10.6

B e a c o n Ta l k i n g t o g e t h e r , c r e a t i n g t o g e t h e r>

Beacon is a global project

through which Heineken is con-

necting with young adults and

their needs and aspirations.

How are they building their

lives, and what can Heineken

add? Their input has a place in

the communications and

events which support our

brands and helps to shape our

role as an employer and in the

wider community. It’s impor-

tant to Heineken to carry on a

dialogue with young adults, as

a sounding-board for our cur-

rent activities and as a source

of inspiration for the new activi-

ties we are constantly develop-

ing. This helps us to build their

affinity with our brands and our

company and optimise their

perception of Heineken in each

region, thereby keeping our

brands young and relevant.

?IT’S NOT ABOUT BEING COOL.IT’S ABOUT BEING CONNECTED


34

sales developed well. Good progress was made with the

construction of a new brewery near Enugu, which will

begin production in March . Consolidated Breweries,

in which Heineken has a minority interest, also reported

higher sales.

The economic situation in the Democratic Republic

of Congo remained unstable. As a result the local curren-

cy devalued sharply at the end of . Brasseries, Limo-

naderies et Malteries Bralima kept sales up to the previous

year’s level, but the result was depressed by higher

packaging expenses and fixed costs. Competition in and

around the capital Kinshasa is intense.

Despite higher sales, Brasseries et Limonaderies du

Rwanda Bralirwa in Rwanda returned a slightly weaker

result, due to a number of factors including new import

duties on raw materials.

The political situation in Burundi is still uncertain and

the economy remained weak when promised foreign aid

failed to materialise. High inflation and devaluation of the

local currency meant narrower margins for Brasseries

et Limonaderies du Burundi Brarudi, but this was compen-

sated to some extent by higher sales.

The elections in Congo passed off relatively smoothly.

In a rising beer market, Brasserie du Congo achieved high-

er sales and a better result.

Modest sales growth in a static beer market was reported

by Brasseries de Bourbon on I le de la Réunion . The

result was lower, due to non-recurring costs. A new main-

stream lager was introduced under the name , the

number with which all car licence plates start on Réunion.

Ghana saw no sign of economic recovery. Competition

in the beer market was intense, bringing pressure to bear

on selling prices. Ghana Breweries was able to expand its

beer sales, thereby improving its result.

Brasserie du Logone in Chad benefited from the great-

er political stability and the recovery of the oil industry.

Beer sales rose sharply and our brewery made a profit

for the first time since the end of the civil war in .

The restoration of political stability in Sierra Leone

was accompanied by explosive growth in beer consump-

tion, and Sierra Leone Brewery, in which Heineken has a

minority interest, was unable to meet demand.

The ceasefire in Angola since April raised hopes

of a recovery in the beer market, but sales by the EKA and

Nocal breweries, in which Heineken has minority interests,

were still depressed.

Sales of Heineken and Amstel in South Africa , where

both beers are brewed under licence by SABMiller, showed

significant growth. Both are positioned in the premium

segment, the only segment which is growing.

Africa/Middle East

H e i n e k e n E x p e r i e n c e E n j o y m e n t>


35

Sales of Amstel and Mützig brewed under licence in

Cameroon continued to grow.

In Morocco , sales of Heineken and Amstel brewed

under licence were also higher.

Middle EastHeineken acquired a .% interest in Al Ahram Beverages

Company (ABC), the only brewery in Egypt . ABC sold

, hl of beer and , hl of non-alcoholic malt

drinks in . Its principal brands are Stella and Fayrouz,

a very successful non-alcoholic malt drink available in a

range of fruit flavours. Exports of Fayrouz to neighbouring

countries are growing. The brewery has an excellent

distribution network, which will support the continuing

growth of imported Heineken beer in the future.

Sales of imported Amstel and Heineken beer made good

progress in Lebanon . Heineken increased its sharehold-

ing in Almaza S.A.L., Lebanon’s only brewery, from % to

%. The Almaza brand has a % market share.

Production capacity will be increased from , hl

to , hl, and Almaza will also produce Amstel for the

local market and for export within the region.

The unstable situation in Israel had a negative impact

on the beer market and hence on the sales and results of

Tempo Beer Industries in which we have a minority

interest. Sales of imported Heineken beer were also down.

Competition intensified in the beer market in Jordan

with the entry of a second brewing group. Sales reported

by Jordan Brewery, in which we have a % stake, fell short

of the level.

Beer consumption in the Gulf states picked up again

after the post-September downturn. We are market

leader in the region with our Heineken and Amstel brands.

Africa/Middle East

ience is one of the city’s top

attractions, drawing in hund-

reds of thousands of visitors

each year. They are taken

through a visual and interactive

programme presenting the

brand, the company’s history,

the brewing process and

Heineken’s social role. One of

the highlights is the Bottle Ride,

which follows a beer bottle’s

high-speed trip through the

bottling process, from washing

and filling through labelling

and capping to packaging in

export cartons.

The Heineken Experience isn’t

just what you get when you

drink our beer.

It’s what you get when you visit

our former brewery in Amster-

dam, where we made the beer

that made us famous around

the world. The Heineken Exper-


36

Regional Review

Apart from China, the countries of the Asia/Pacific

region remained economically weak in . Our sales

in the region increased from . million hl to . million

hl. Sales of Heineken beer developed strongly, espe-

cially in Thailand and Vietnam.

Heineken has built a strong position in this region. The

main pillar supporting that position is Asia Pacific Brew-

eries, a Singapore-based joint venture between Heineken

and Fraser & Neave, which has interests in many breweries

in the region. Heineken beer is produced at several Asia

Pacific Breweries plants. Heineken has its own operating

companies in Indonesia and on New Caledonia. Imported

Heineken beer is available in several countries in the

region and in some it is brewed under licence. Heineken’s

market position is particularly strong in Thailand, Vietnam,

Hong Kong and Taiwan.

In China , the process of consolidation in the beer mar-

ket continued. The Chinese market is growing rapidly,

but with little scope for good profit margins and as yet few

growth opportunities for international premium beers.

The large brewers aspire to national coverage, which

translates into keener competition and higher marketing

costs. Heineken sees China as a long-term growth market

and is confident of achieving growth through a com-

bination of local breweries, with their own brands and dis-

tribution networks, and the Heineken brand. Asia Pacific

Breweries sold more beer in China, but the result was

depressed to some extent by the heavy investment in

marketing. Hainan Asia Pacific Brewery’s sales were down

and its result was lower, but Shanghai Asia Pacific Brew-

ery’s sales improved, thanks mainly to the growth of the

Reeb Superlite and Tiger brands. Sales of Heineken beer

in China were weakened by strong competition from local

beers and changes in the distribution system. Hong Kong’s

economy remained lacklustre and beer consumption

again declined. Imported beers, including Heineken, lost

market share to low-priced Chinese beers.

Despite the deteriorating economic situation in

Singapore , Asia Pacific Breweries Singapore achieved

higher sales, an improved result and growth in market

share. On-trade sales received a major boost from the soc-

cer World Cup in July. The success of Tiger’s ‘What time is

it?’ campaign created a more youthful and aspiring image

for the Tiger brand. The Heineken brand developed excep-

tionally well.

In Thailand , the growth in the beer market levelled off,

but the premium segment continued to expand. Sales of

Heineken beer rose sharply. Thai Asia Pacific Brewery’s

Asia/Pacific

0

1

2

3

4

5

6

7

8

1998

1999

20002001

2002

Group volume

Asia/Pacif ic


7.5

7.8 8.

0

7.0

6.2

P a c k a g i n g I n n o v a t i v e a n d s u r p r i s i n g>

The packaging is the face

which the beer presents to the

world. To keep our brands

young and relevant, it’s impor-

tant to keep our packaging

fresh. Heineken regularly

introduces updated designs

and temporary themed packs.

Trials in eight countries last

year with a new can design in

the shape of a beer keg,

combining the traditional lines

of the Heineken logo with

modern silver elements,

evoked responses such as

‘innovative’, ‘exclusive’,

‘modern’ and ‘quality’ in con-

sumer surveys. The new can

was launched in Hong Kong

at the end of and will be

introduced in France, Greece

and the UK in .

I t ’s F O U N D @ T h i r s t A m i x o f t h e f r e s h e s t i n g r e d i e n t s>

In Heineken Music

launched Thirst, a series of

dance events held around the

world. Launched in Ireland,

then held in Asia and Brazil

last year, Thirst will move to

South America, New Zealand,

Asia and Europe in .

Preceding the main Thirst

event in each country,

is Found@Thirst - a competition

where local talent, as voted

for by young consumers,

get a chance to play alongside

a world-class DJ who headlines

the big event.

Details on up-coming Thirst

events can be found on

www.heinekenmusic.com.


Regional Review

39

result remained steady. Capacity at the brewery is being

doubled to . million hl, with the new capacity coming on

stream in mid-.

In Cambodia , despite a shift to lower-priced beers in

response to an increase of around % in excise duties and

the closure of a number of on-trade outlets by the authori-

ties, Cambodia Brewery posted higher beer sales. The

brewery was able to compensate for the effects of the nar-

rower margins to some extent by reducing its costs.

In Malaysia , Guinness Anchor Berhad achieved higher

sales of all its brands (Heineken, Tiger, Anchor and Anchor

Ice) in a declining beer market, and returned an improved

result.

Beer consumption in Vietnam continued to rise and

Vietnam Brewery’s sales and result were significantly high-

er, supported by growth in both the Heineken and Tiger

brands. In the north of the country, Asia Pacific Breweries

is building a second facility which will come on stream in

October with an initial capacity of , hl. APB’s

interest in Hatay Brewery was increased from % to %.

The downward trend in the New Zealand beer market

continued. DB Group’s sales held firm and the result

improved thanks to a better sales mix and tighter cost con-

trol. Sales of Heineken beer and the local Monteith premi-

um brand continued to grow. DB Group introduced a range

of fruit-flavoured beers under the Hopper brand.

Although the economy remained weak, last year brought

growth in the beer market in Papua New Guinea . South

Pacific Brewery’s sales were sharply higher and its result

improved a little, despite the devaluation of the kina, the

local currency.

The beer market in Indonesia contracted by over % in

response to the economic and political situation, greatly

increased excise duties, limited consumer purchasing

power and reduced tourist numbers. The terrorist attack

on Bali had a temporary impact on tourism, which was

recovering after the attacks in the United States in .

Multi Bintang Indonesia maintained its market share, but

its sales and result were well down.

Price competition on New Caledonia forced Grande

Brasserie de Nouvelle-Caledonie to reduce its selling

prices. Both its beer sales and its result improved.

The economic situation on Tahit i was exacerbated

by declining tourism and Brasserie de Tahiti, in which we

have a minority interests, reported lower sales.

Sales of Heineken beer in Austral ia continued to grow

in a contracting beer market.

In Taiwan , we set up our own marketing and sales

organisation for imported Heineken beer and upgraded

the distribution function. Sales of Heineken beer were

higher in a slightly weaker beer market.

The beer market in Japan was adversely affected by

the growing sales of low-priced Happoshu, a low-malt beer

which attracts a lower rate of excise duty. Heineken

strengthened its position in prime on-trade locations and

sales were slightly higher.

Rising purchasing power in Kazakhstan translated

into rapid growth in beer consumption. The economy is

growing vigorously, helped by the presence of large oil

reserves. Our interest in the Dinal brewery in Kazakhstan

was increased from % to %. Sales of the Amstel and

Tian Shan brands were up by %.

Asia/Pacific


40

Financial Review

0 0 0

1993

1994

1995

1996

1997

1998

1999

20002001

200219

9819

992000

20012002

1998

1999

20002001

2002

Operating profit


Tangible fixed assets,

net investments and depreciation


Group equity

as a percentage of

total assets

investmentsdepreciation

100 60 5

200 120 10

300 180 15

400 240 20

500 300 25

600 360 30

700 420 35

800 480 40

900 540 45

1000 600

660

720

1100

1200

1300

50

362

406

457

459

546

659

799

921

1,12

5

377 38

6

445

465

373

441

418

578

481

696

48.5

47.9

40.2

43.6

1,28

2

37.7


Financial Review

41

Turnover and costs


Net turnover 10,293 9,333 10

Raw materials, consumables and services 5,558 5,089 9

Excise duties 1,282 1,226 5

Staff costs 1,642 1,417 16

Amortisation/depreciation and value adjustments 529 476 11

Total operating expenses 9,011 8,208 10

Operating profit 1,282 1,125 14

Change (%)20012002

Net turnover and cost of sales

Net turnover in was up by %, at €, million,

an increase of € million, with first-time consolidations

accounting for half of this increase. Organic growth in net

turnover amounted to %, with a % increase accounted

for by improved selling prices and a better sales mix and

% due to higher sales volume. Exchange rate movements

had the overall effect of depressing net turnover by %.

The following changes in the consolidation took place

in . The .% participating interest in BrauHolding

International, in Germany, a joint venture of Heineken N.V.

and Bayerische BrauHolding AG, has been proportionally

consolidated with effect from January . In ,

this participating interest was carried at net asset value.

In addition, Al Ahram Beverages Company in Egypt,

Almaza in Lebanon and Barú in Panama have been fully

consolidated with effect from October . A number of

beverage wholesalers in France, Italy and Switzerland

were also consolidated. And during the year we increased

our interests in Heineken España from .% to .% and

in Heineken Slovensko, in Slovakia, from .% to .%.

In , part of the costs of temporary point-of-sale

activities were reclassified as marketing and selling

expenses. To facilitate comparison, these costs have been

similarly reclassified in the figures, increasing both

net turnover and marketing and selling expenses in

by € million. The operating profit was unaffected.

Operating expenses rose by .% to €, million, half

of this increase being accounted for by the new consolida-

tions. The price of raw materials and the cost of packaging

increased slightly, as did energy costs. There was once

again heavy investment in strengthening our brands and

market positions, lifting marketing and selling expenses

by % to €, million. Expressed as a proportion of net

turnover, these costs amounted to .% compared with

.% in .

Project costs not qualifying for capitalisation were lower

than in .

Staff costs were higher, reflecting the increase in the num-

ber of employees due to new consolidations and additional

pension charges. A total of € million in additional pension

charges was borne in . It was possible, however, to set

off half of this additional pension charge against existing

provisions for staff costs. There were extra write-downs

in particular of stocks of finished products and spares.

Operating profit and net profit

The operating profit rose by % in to €, million.

The greater part of this increase was due to the higher

sales volume, the improvement in the sales mix and the

higher selling prices. The newly acquired participating

interests, which were included in the consolidation for

Wines and spirits

0.5

Soft drinks

0.9

Other income

0.3

Net turnover

in billions of euros

Beer

8.6


42

Financial Review

the first time, also contributed to the higher operating

profit. The net effect of exchange rate movements was

minor. The operating profit as a proportion of net turnover

amounted to .% compared with .% in . Income

from non-consolidated participating interests increased

by € million to € million, chiefly as a result of our share

in the profits of Florida Bebidas in Costa Rica. This compa-

ny, in which we acquired a % interest in , was car-

ried at net asset value. Interest charges rose by € million

overall, to € million, owing to the financing of acquisi-

tions. The tax burden remained unchanged at .%.

Minority interests in the result were higher, reflecting

the strong performance in Poland in particular. Net profit

rose by .% to € million. The net profit on ordinary

activities per share of €. nominal value increased from

€. to €..

Cash f low and investments

The cash flow from operating activities rose by € million

to €, million, but most of the increase in operating

profit and depreciation charges was offset by an increase

in working capital. Gross investments in tangible fixed

assets amounted to € million, set against which were

disposals totalling € million. Significant net investments

were made in Nigeria (€ million), the Netherlands (€

million), France (€ million), Spain (€ million), Poland

(€ million) and Italy (€ million). An amount of €,

million was invested in new acquisitions and expanding

existing interests. The acquisitions related to Bravo Inter-

national in Russia, Al Ahram Beverages Company in Egypt,

Almaza in Lebanon and Barú in Panama, as well as bever-

age wholesalers in Italy, France and Switzerland. Existing

2002 2001 Change (%)

Cash f low


Cash flow from operating activities 1,184 1,165

Dividends paid – 187 – 168

Cash flow from investing activities – 1,973 – 783

– 976 214

Borrowings 484 86

Repayments on loans – 56 – 182

Other financing – 1 57

– 549 175

2002 2001

Operating profit and net profit


Operating profit 1,282 1,125 14

Income of non-consolidated participating interests 48 45 7

Interest – 109 – 71 54

Profit before tax 1,221 1,099 11

Taxation – 364 – 327 11

Profit after tax 857 772 11

Minority interests – 62 – 57 14

Net profit on ordinary activities 795 715 11

Extraordinary result after tax – 52 –

Net profit 795 767 4


Financial Review

43

interests in Kazakhstan, the Slovak Republic and Spain

were also increased, and minority participating interests

were acquired in Costa Rica and Nicaragua. Investments

in intangible fixed assets and other financial fixed assets

amounted to € million and € million, respectively.

Financing and l iquidity

Group equity decreased from €, million as at

December to €, million as at December .

Shareholders’ equity fell by € million to €, million.

Set against the addition of the net profit of € million

and revaluations of € million were goodwill charges of

€ million, adverse exchange differences of € million

and a proposed dividend distribution of € million.

Owing to the increase in the interest-bearing liabilities and

the reduction in cash, largely as a result of financing acqui-

sitions, the net debt position increased from € million

to €, million as at December .

Profit appropriation

Net profit for Heineken N.V. in amounted to €

million. In accordance with Article of the Articles of

Association, the Annual General Meeting of Shareholders

will be invited to appropriate an amount of € million

for distribution as dividend. This proposed appropriation

corresponds to a dividend of €. per share of €.

nominal value, out of which an interim dividend of €.

was paid on September . The final dividend thus

amounts to €. per share. Dutch withholding tax at %

will be deducted from the final dividend. It is proposed to

add the remaining amount of € million to the general

reserve.

2002 2001 %%

Financing structure


Group equity 2,936 38 3,139 44

Deferred taxation 381 5 357 5

Other provisions 600 8 667 9

Liabilities 3,864 49 3,032 42

7,781 100 7,195 100

Amsterdam, February

Ruys

Bolland

Van Boxmeer

Hooft Graafland


44

Heineken Prizes 2002

The five Heineken prizes for art and science awarded by

Heineken Stichting and Stichting Alfred Heineken Fondsen

were presented by His Royal Highness Prince Willem-

Alexander in September 2002. The recipients of the

biennial Heineken prizes, with a total monetary value of

over €650,000, are selected by the Royal Netherlands

Academy of Arts and Sciences.

The Dr. H.P. Heineken Prize for Biochemistry and

Biophysics was awarded to Prof. Roger Y. Tsien in the US,

for his unique and exceptional contribution to the develop-

ment of a range of methods and techniques for measuring

and visualising processes within and between cells.

Prof. Tsien has successfully isolated and cloned the GFP

(green fluorescent protein) molecule of the Aequora

Victoria jellyfish, which glows brightly in the dark, and has

even managed to synthesise different-coloured variants.

Introducing GFP variants into cells enables direct obser-

vation of all kinds of biochemical processes within living

cells, including monitoring signals between cells, measur-

ing intracellular acidity and sodium and calcium transfer

within and between cells and measuring phenomena with-

in cell organelles. His methods are now widely used by

fellow researchers for other purposes, such as identifying

the factors involved in cell malignancy.

The Dr. A.H. Heineken Prize for Medicine was awarded

to Prof. Dennis J. Selkoe in the US for his contribution to

the development of the molecular study of diseases of the

brain, in particular Alzheimer’s disease. Since the s,

he has been using methods drawn from biochemistry and

molecular biology to unravel, slowly but surely and with

great patience, the molecular components of the puzzle

which is the complex disorder known as Alzheimer’s dis-

ease. The process of identifying the causal relationships

and processes within brain cells has now reached the

stage where the first patients are taking part in a trial with

drugs intended to delay or prevent the disease, an

advance of inestimable social significance. His work has

also led to a better understanding of the ageing processes

in the brain and the onset and progression of Parkinson’s

disease.

The Dr. A.H. Heineken Prize for Environmental

Sciences was awarded to Prof. Lonnie G. Thompson in

the US for his pioneering work in research into ice cores in

the polar regions and the tropics. He is convinced that ice

is the best record of the earth’s climate. That frozen record

can be accessed not only at the North and South Poles,

but also in the tropics, for example on Mt. Kilimanjaro.

As one of the first to realise that global warming posed a

threat to a number of the world’s ice archives, he is intent

on gathering more data without delay. The climatic and

atmospheric history recorded in the ice can go back as far

as , years. His research provides an insight into nat-

ural climate change, which will ultimately make it possible

to assess humanity’s impact on the earth’s climate, which is

still the subject of heated debate among researchers.

The Dr. A.H. Heineken Prize for History was awarded to

Prof. Heinz Schilling in Germany for his outstanding inter-

disciplinary research into the history of early modern

Europe, in which he reveals the interrelationship between

confessionalisation and national identity formation.

His research encompasses the relationship between

Church and State, the role of migrants, the imposition of

norms and values and the comparison of developments

across Europe: issues which are still current today. His goal

is to identify the relationship between these and other

issues in early modern Europe (–), the time of the

Reformation and Counter-Reformation, by studying reli-

gious, social and political factors in relation to each other.

He shows that the newly formed Protestant and Catholic

states began working closely with what was generally

the only official church within their region. He makes clear

that there is much greater unity in European history than

was previously assumed, transcending the boundaries

between countries and religions.

The Dr. A.H. Heineken Prize for Art was awarded to

Aernout Mik in the Netherlands for his consistent oeuvre

of installations in which he combines video and other artis-

tic media. His working method has had a major influence

on the present generation of video artists in the Nether-

lands. In Mik’s video films the events which occur between

the characters stand on their own, but evoke conflicting

emotions of a disquieting or humorous nature. This effect

is reinforced by the fact that Mik creates several layers of

reality, in which he combines staged action – both live and

on video – with sculptural forms embedded in an architec-

tural structure, thus creating a physical link between the

viewer and the work. A good example of this was his

installation based on an architectural structure consisting

of steadily narrowing corridors and low doorways, show-

ing video films of collapsing buildings and injured people,

next to a life-size dummy of an anthropoid ape.

> Financial Statements 2002


46

Consolidated Balance Sheetafter appropriation of profit in millions of euros

2002 200131 December 31 December

Assets

Fixed assets

Intangible fixed assets 39 13

Tangible fixed assets 4,094 3,592

Financial fixed assets 835 531

4,968 4,136

Current assets

Stocks 765 692

Receivables 1,270 1,192

Securities 98 29

Cash 680 1,146

2,813 3,059

7,781 7,195

Equity and l iabi l i t ies

Group equity

Shareholders’ equity 2,543 2,758

Minority interests in other group company’s 393 381

2,936 3,139

Provisions 981 1,024

Liabilities

Long-term borrowings 1,215 797

Current liabilities 2,649 2,235

3,864 3,032

7,781 7,195

F I N A N C I A L S T A T E M E N T S 2 0 0 2

Consolidated Profit and Loss Account

47

2002 2001*


Net turnover 10,293 9,333

Raw materials, consumables and services 5,558 5,089

Excise duties 1,282 1,226

Staff costs 1,642 1,417

Amortisation/depreciation and value adjustments 529 476

Total operating expenses 9,011 8,208

Operating profit 1,282 1,125

Results of non-consolidated participating interests 48 45

Interest – 109 – 71

Profit before tax 1,221 1,099

Taxation – 364 – 327

Group profit after tax 857 772

Minority interests – 62 – 57

Net profit on ordinary activities 795 715

Extraordinary result after tax – 52

Net profit 795 767

Number of shares in issue 391,979,675 391,979,675

Net profit per share on ordinary activities 2.03 1.82

* The 2001 figures have been restated for comparison purposes.


48

Consolidated Cash Flow Statement

2002 2001


Cash f low from operating activ it ies

Operating profit 1,282 1,125

Results of non-consolidated participating interests 48 45

Amortisation/depreciation and value adjustments 529 476

Movements in provisions – 8 – 32

Movements in working capital – 223 – 42

Cash flow from operations 1,628 1,572

Interest paid and received – 103 – 74

Taxation paid on profits – 341 – 333

Cash flow from operating activities 1,184 1,165

Dividends paid – 187 – 168

Cash flow from operating activities

less dividends paid 997 997

Cash f low from investing activ it ies

Intangible fixed assets – 35 – 17

Tangible fixed assets – 696 – 578

Consolidated participating interests – 799 – 148

Non-consolidated participating interests – 423 – 74

Extraordinary result on participating interests

disposed of – 52

Other financial fixed assets – 20 – 18

– 1,973 – 783

Cash f low from f inancing activ it ies

Long-term borrowings 484 86

Repayment of long-term borrowings – 56 – 182

Share issue by group companies – 1 57

427 – 39

Net cash f low – 549 175

Other cash movements

Changes in the consolidation – 88 99

Exchange differences – 36 – 14

Movement in net cash – 673 260

The net cash position is made up of

Cash 680 1,146

Securities 98 29

Bank overdrafts – 573 – 297

Position as at 31 December 205 878


General

The financial statements and the report of the Executive

Board have been prepared in accordance with the provi-

sions of Part , Book , of the Netherlands Civil Code.

There were a number of changes in the scope of the con-

solidation during the year, the following being the more

significant of these with regard to the financial statements.

The .% participating interest in BrauHolding

International, in Germany, has been proportionally

consolidated with effect from January . In , this

participating interest was carried at net asset value. Bravo

International in Russia has been fully consolidated with

effect from January . In addition, Al Ahram in Egypt,

Almaza in Lebanon and Barú in Panama have been includ-

ed in the consolidation with effect from October .

There was also a certain amount of expansion of existing

interests and a number of beverage wholesalers were

acquired. These changes in the consolidation led to an

increase in net turnover of € million. The acquisitions

also resulted in a goodwill charge to equity of € million.

From part of the costs of temporary point-of-sales

activities were reclassified as marketing and selling

expenses, whereas previously they were deducted from

net turnover. To facilitate comparison, both net turnover

and marketing and selling expenses in have been

increased by € million.

The financial information relating to Heineken N.V. has

been included in the consolidated balance sheet and profit

and loss account. The abridged presentation permitted by

Section , Part , Book , of the Netherlands Civil Code

has accordingly been used for the Heineken N.V. profit and

loss account.

The amounts disclosed in the notes are in millions of

euros unless otherwise indicated.

Consol idation

Heineken N.V. and the subsidiaries with which it forms a

group are fully consolidated in the consolidated balance

sheet and profit and loss account, with minority interests

in group equity and group profits shown separately.

Proportional consolidation is applied in the case of com-

panies in which the Heineken group has a direct interest

and exercises a controlling influence on management

decisions in partnership with other shareholders.

In the analyses of movements in various assets and

liabilities, disclosures of ‘changes in the consolidation’

relate to increases or decreases in the group’s interests

in consolidated companies.

Foreign currency

Hedging transactions to limit exchange risks are entered

into only in respect of actual amounts receivable and

payable and highly probable future cash flows in foreign

currencies. The instruments used are forward contracts

and options. Before such contracts are entered into,

inward and outward cash flows in a particular currency are

netted off at group level as far as possible. Where foreign

currency balance sheet positions have been hedged, they

are translated at the exchange rate of the hedge.

Recognition of results arising from hedging operations

relating to future foreign currency cash flows is deferred

until the relevant cash flows are accounted for. Other for-

eign currency transactions in the profit and loss account

are recognised at spot rates unless forward contracts have

been entered into in connection with these transactions,

in which case the forward rate applies.

The financial statements of non-eurozone companies

are translated into euros. Assets and liabilities are trans-

lated at exchange rates on the balance sheet date.

Profit and loss account items are translated at the average

monthly exchange rates. The difference between the net

profit based on average exchange rates and the net profit

based on the exchange rates as at balance sheet date is

accounted for in the revaluation reserve. The profit and

loss accounts of companies in hyperinflation countries are

translated at exchange rates prevailing on the balance

sheet date.

Differences in book value arise on translation into euros

of the opening balance of the shareholders’ equity of the

non-eurozone consolidated companies plus intra-group

long-term loans granted to these companies. These differ-

ences are treated as revaluations and are credited or deb-

ited directly to group equity, with due allowance for taxa-

tion. Other differences due to exchange rate movements

are accounted for directly in the profit and loss account.

Valuation of assets and l iabi l i t ies

Intangible fixed assets

Goodwill, the difference between the price paid for partici-

pating interests and their valuation according to Heineken

accounting policies, is charged to shareholders’ equity

where the group exercises at least a significant influence

on management decisions. In the case of acquisition of

beverage wholesalers, the purchase price is almost entire-

ly determined by the customer base and, that being the

case, it is treated as goodwill.

Notes to the Consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement for 2002

49



When the relevant legal requirements are changed, good-

will will be capitalised and amortised over the expected

economic life of the assets concerned.

Other intangible fixed assets are capitalised and amor-

tised by the straight-line method over three years. If the

net realisable value of intangible fixed assets is less than

the carrying amount, a diminution in value is applied.

Costs of internally developed brands, patents and licences

and research and development are expensed.

Brands, patents and licences purchased with acquisitions

are treated as part of the goodwill paid.

Tangible fixed assets

Except for land, which is not depreciated, tangible fixed

assets are stated at replacement cost less accumulated

depreciation. The following average useful lives are used

for depreciation purposes:

Buildings - years

Plant and equipment - years

Other fixed assets - years

The replacement cost is based on appraisals by internal

and external experts, taking into account technical and

economic developments. Other factors taken into account

include the experience gained in the construction of

breweries throughout the world.

Grants received in respect of investments in tangible

fixed assets are deducted from the amount of the invest-

ment.

Projects under construction are included at cost.

Financial fixed assets

Non-consolidated participating interests where the group

has a significant influence are stated at the Heineken

share of the net asset value, which is arrived at as far as

possible on the basis of the Heineken accounting policies.

Other non-consolidated participating interests are stated

at cost less any necessary provisions.

Loans to non-consolidated companies and other finan-

cial fixed assets are carried at face value, less provisions

for credit risks.

Impairment of assets

Regular assessments are made for any indications that

intangible and tangible fixed assets might be impaired.

If any such indications exist, the net realisable value of

the assets concerned is determined. If the net realisable

value of an asset is less than its book value, the difference

is deducted from the carrying amount as an impairment

loss and charged to the profit and loss account.

Current assets

Stocks bought in from third parties are stated at replace-

ment cost, arrived at on the basis of prices from current

purchase contracts and latest prices as at balance sheet

date. Finished products and work in progress are stated at

manufactured cost based on replacement cost and taking

into account the production stage reached. Stocks of

spare parts are depreciated on a straight-line basis taking

account of obsolescence. If the recoverable amount or net

realisable value of stocks is less than their replacement

cost, provisions are made in respect of the difference.

Advance payments on stocks are included at face value.

Receivables are carried at face value less a provision

for credit risks and less the amount of deposits on return-

able packaging.

Securities are carried at the lower of historical cost

and quoted price, or estimated market value in the case

of unlisted securities.

Cash is included at face value.

Revaluations

Differences in carrying amounts due to revaluations

are credited or debited to group equity, less an amount

in respect of deferred tax liabilities where applicable.

Provisions

The provision for deferred tax liabilities is formed in

respect of timing differences between the balance sheet

for reporting purposes and the recognition of assets and

liabilities for tax purposes as well as taxation on profit

distributions borne by the group. The liabilities are calcu-

lated at the standard tax rates on balance sheet date and

are stated at face value. Deferred tax assets are netted

off against deferred tax liabilities of the same kind

over matching periods. A net deferred tax asset is not

recognised unless future realisation is reasonably certain.

The provisions for pension liabilities and similar

schemes are calculated at net present value according to

actuarial principles based on current pay levels. Full provi-

sion is made for pension liabilities in respect of accrued

benefit rights. Prior-service liabilities resulting from

improvements in remuneration packages and pension

plans are added to the provision for pension liabilities and

charged directly to the result.

Provisions connected with reorganisation plans are cal-

50



culated at the net present value of the benefit commit-

ments in connection with early retirement, relocation

and redundancy schemes. Where applicable, the expected

degree of employee participation in the schemes concern-

ed is taken into account.

Liabilities

Long-term borrowings and current liabilities are stated

at face value.

Determination of results

Income and expenses are accounted for in the profit and

loss account at the time of supply of the relevant goods

or services.

Net turnover means the proceeds from sales of

products and services supplied to third parties, net of

sales taxes and customer discounts.

Raw materials and consumables are stated at replace-

ment cost in the profit and loss account.

Excise duties are stated at the actual amounts payable.

Depreciation charges based on replacement cost are

calculated on a straight-line basis according to the esti-

mated useful lives of the assets concerned.

The results of non-consolidated participating interests

consist of dividends received during the year from com-

panies carried at cost and Heineken’s share of the net

profits of companies carried at net asset value. The share

of the results of companies carried at net asset value

is calculated as far as possible in accordance with group

accounting policies for the determination of results,

taking account of taxation and minority interests.

Interest expenses are allocated to the periods to which

they relate. Results arising from operations involving inter-

est rate hedging instruments are also accounted for as

interest. Such instruments are used to hedge the risk of a

reduction in interest income on surplus funds temporarily

invested in bank deposits due to falling interest rates and

higher interest charges on interest-bearing liabilities due

to interest rate rises. Interest rate hedging instruments

are not used without a corresponding underlying position.

Taxation on profits is calculated on the profit shown

in the financial statements by applying the standard tax

rates, taking into account tax payable by the group on

profit distributions by participating interests and applica-

ble tax facilities. Differences between the amount thus

calculated and the tax actually payable for the year are

accounted for in the provision for deferred tax liabilities.

51



52

Intangible f ixed assets

With effect from , investments in major ICT projects

and technical innovations satisfying the applicable criteria

have been capitalised and amortised over three years.

In , an amount of € million (: € million) was

capitalised and an amount of € million (: € million)

was amortised.

Tangible f ixed assets

Position as at 1 January 2002 3,592 1,135 1,500 716 241

Changes in the consolidation 378 137 149 77 15

Investments less disposals 696 40 264 182 210

Completed projects – 28 142 69 – 239

Exchange differences – 144 – 37 – 60 – 32 – 15

Revaluation 53 9 40 4 –

Depreciation and value adjustments – 481 – 62 – 218 – 201 –

Position as at 31 December 2002 4,094 1,250 1,817 815 212

This book value is made up as follows:

Replacement cost 9,897 2,790 4,781 2,114 212

Accumulated depreciation – 5,803 – 1,540 – 2,964 – 1,299 –

4,094 1,250 1,817 815 212

The aggregate amount of revaluations included

in the book value as at 31 December 2002 is: 622 237 355 30 –

Total Land and

buildings

Plant and

equipment

Other

fixed assets

Projects under

construction

Other fixed assets includes vehicles, office equipment and

returnable packaging. Projects under construction also

includes advance payments on tangible fixed assets on

order. With effect from 2002, investment grants have

been deducted from the cost of the tangible fixed assets

concerned.



2002 2001

53

Total

Shares Loans

Other financial

fixed assets

Other financial fixed assets includes €295 million (2001:

€270 million) in respect of loans to customers and €22 mil-

lion (2001: €30 million) in respect of deferred tax assets.

Stocks

Raw materials 112 118

Work in progress 58 46

Finished products 184 167

Goods for resale 125 110

Non-returnable packaging 72 65

Other stocks 159 138

Advance payments on stocks 55 48

765 692

Receivables

Amounts falling due within one year:

Trade debtors 1,111 1,070

Packaging deposits – 266 – 256

845 814

Non-consolidated participating interests 44 57

Other amounts receivable 221 171

Prepayments and accrued income 160 150

1,270 1,192

Financial f ixed assets Non-consolidated participating interests

Position as at 1 January 2002 531 182 1 348

Changes in the consolidation 31 – 26 7 50

Additions/loans granted 601 433 1 167

Disposals/loan repayments – 158 – 10 – 6 – 142

Revaluation – 7 – 6 – 1 –

Goodwill – 182 – 182 – –

Other value adjustments – 1 – 1 – –

Share in net profit 26 26 – –

Dividends received – 6 – 6 – –

Position as at 31 December 2002 835 410 2 423


54


2002 2001

Securit ies

Listed securities 83 16

Unlisted securities 15 13

98 29

Cash

Cash in hand and at bank 324 362

Short-term cash deposits 356 784

680 1,146

Total cash not freely disposable amounts to €121

million, mainly relating to letters of credit.

For an analysis of shareholders’ equity, reference is

made to the balance sheet of Heineken N.V. as at 31

December 2002 on page 66.

Shareholders’ equity

Position as at 1 January 2,758 2,396

Exchange differences – 107 16

Revaluation 32 56

Goodwill – 778 – 320

Net profit for the year 795 767

Dividend for the year – 157 – 157

Position as at 31 December 2,543 2,758

Minority interests

Position as at 1 January 381 124

Changes in the consolidation 25 156

Exchange differences – 55 –

Revaluation 12 5

Minority interests in group profit 62 57

Dividends payable to minority shareholders – 31 – 20

Share issue – 1 59




55

The provision for pension liabilities relates to pensions and

annuities which have not been insured with third parties.

With effect from , the provisions for early retirement

and other schemes under which people are laid off with

pension-like arrangements have been included in this

item. In additional pension charges amounted to

€ million, although half of this amount could be set off

against existing provisions for staff costs. The average

rate of interest used in calculating the net present value

of the provision for pension liabilities, based on current

applicable interest rates in the countries concerned,

is % (: %). The other provisions comprise reorga-

nisation provisions, provisions formed for receivables from

participating interests, for contracts of suretyship provided

and for current lawsuits. Additions due to planned and

announced restructuring programmes are charged to the

profit and loss account, with the exception of restructuring

programmes relating to recently acquired companies,

which are taken into account in the calculation of goodwill.

€ million of the provisions (: € million) has a

term in excess of one year.

Provisions

The movements were:

Position as at 1 January 2002 357 338 329 1,024

Changes in the consolidation 27 21 3 51

Revaluation/exchange differences – 7 – 4 – 3 – 14

Added/released – 3 96 5 98

Utilised – – 33 – 73 – 106

Other movements 7 – 66 – 13 – 72

Position as at 31 December 2002 381 352 248 981

Deferred tax

liabilities

Pension

liabilities

Other

provisions

Total


56


2002 2001

Long-term borrowings

Amounts falling due after more than one year

relate to:

Loans from credit institutions, in EUR,

average effective interest rate 5.2% 337 110 264 150

Loans from credit institutions, in PLN, average

effective interest rate 3.62% (2001: 15.8%) 1 – 61 –

Loans from credit institutions, in EUR, average

effective interest rate 4.0% (2001: 5.0%) 162 – 16 –

Loans from credit institutions, in EUR, average

effective interest rate 4.3% (2001: 5.0%) 427 – 278 278

Private loan, in EGP, interest rate 11.9% 37 37 – –

Private loan, in EUR, interest rate 5.8% 68 – 68 68

Other private loans, in various currencies,

average interest rate 5.2% (2001: 5.45%) 118 20 72 16

Other loans, interest-free 65 26 38 21

1,215 193 797 533

Current l iabi l i t ies

Amounts falling due within one year relate to:

Repayment commitments on long-term

borrowings in 2003 205 32

Bank overdrafts 573 297

Suppliers 629 620

Taxation and social security contributions 322 335

Dividend 105 107

Short-term deposits 261 241

Amounts owed to non-consolidated participating

interests 1 3

Other creditors 250 242

Accruals and deferred income 303 358

2,649 2,235

Security in the form of mortgages totalling €116 million

(2001: €113 million) has been provided in respect of the

other private loans.

Tangible fixed assets totalling €140 million (2001: €205

million) have been pledged to the authorities in a number

of countries as security for the payment of taxation, par-

ticularly excise duties and import duties.

Total More than 5 years Total More than 5 years


57


2002 2001

Financial instruments are used in the normal course of

business to hedge the effects on results of fluctuations

in exchange rates and interest rates. The most important

foreign currency inflow is denominated in US dollars and

is generated by export activities. The expected net cash

flow in US dollars, which amounts to around USD

million per annum, is hedged well in advance by means of

a combination of forward contracts and options. This poli-

cy reduces the volatility of export sales proceeds and

results due to short-term fluctuations in the value of the

US dollar against the euro and delays the impact of long-

term fluctuations on results. The financial instruments

used to hedge foreign exchange fluctuations, with a term

of longer than one year, amount to € million. As far as

possible, temporary cash surpluses are held centrally and

invested in bank deposits in euros with maximum terms of

one year. Approximately % of the risk of a reduction

in interest income on these deposits due to a fall in the

interest rate or an increase in interest charges due to a rise

in the interest rate on interest-bearing liabilities is hedged

with interest rate instruments. These interest-hedging

instruments include interest rate swaps, forward rate

agreements and caps and floors. The interest-hedging

instruments with a term of more than one year amount

to €, million. As at December , the aggregate

market value of the various financial instruments used

amounted to € million. Currency and interest rate risk

management is governed by a stringently defined policy

and strict rules. Only a limited number of counterparties

are used, all with excellent credit ratings. The activities

are closely monitored, independently of implementation.

In 2003, a subordinated loan of €150 million will be

granted to Stichting Heineken Pensioenfonds to satisfy

the more stringent minimum reserves requirements of

the Pensions and Insurance Supervisory Board in the

Netherlands.

Off-balance-sheet commitments

Tenancy and operating leases 48 56

Capital expenditure commitments, unless already

included in tangible fixed assets 53 84

Long-term raw material purchase contracts 176 186

Declarations of joint and several liability 398 286

Other off-balance-sheet commitments 29 12

Loan to Stichting Heineken Pensioenfonds 150 –

Financial instruments

Contract value as at 31 December

Currency hedging instruments in US dollars 904 1,321

Currency hedging instruments in other currencies 114 206

Interest-hedging instruments 1,029 925


58

Notes to the Consolidated Profit and Loss Account

Information by geographical area

As almost the entire net turnover of the group is account-

ed for by just one product group, namely beer, the finan-

cial information is segmented by geographical area only.

The remaining activities are not reported on a segmented

basis. The following four regions are distinguished:

Europe, Western Hemisphere, Africa/Middle East and

Asia/Pacific. Since nearly all export production facilities

are located in Europe, the results of these activities are

reported under Europe. The results and assets, analysed

by region, are presented below.

Europe

(incl. exports)

Western Hemisphere Africa/ Middle East Asia/Pacific Eliminations Consolidated

2002 2001 2001*20022001* 20022002 20022001 2001 20012002


Results

Net turnover

Third-party sales proceeds 7,488 6,824 1,372 1,176 795 747 471 465 – – 10,126 9,212

Interregional sales proceeds 1,276 1,127 – – – – – – – 1,276 – 1,127 – –

Total sales proceeds 8,764 7,951 1,372 1,176 795 747 471 465 – 1,276 – 1,127 10,126 9,212

Proceeds from services 156 126 1 – 40 29 5 7 – 35 – 41 167 121

Net turnover 8,920 8,077 1,373 1,176 835 776 476 472 – 1,311 – 1,168 10,293 9,333

Excise duty 889 831 131 107 120 144 142 144 1,282 1,226

Operating profit 996 881 70 55 169 129 47 60 – – 1,282 1,125

Results of non-consolidated

participating interests 12 6 23 20 6 5 7 14 – – 48 45

Interest – 109 – 71


Minority interests – 62 – 57

Net profit on ordinary

activities 795 715


Net profit 795 767



59

2002 20012002 20012002 20012002 2002

2002 2001*

Europe

(incl. exports)

Africa/Middle EastWestern Hemisphere Asia/Pacific Consolidated

Raw materials, consumables and services

Raw materials 525 507

Packaging 949 873

Goods for resale 1,080 978

Marketing and selling expenses 1,585 1,451

Transport costs 402 357

Energy and water 147 138

Repair and maintenance 185 161

Other expenses 685 624

5,558 5,089

The movement in work in progress and finished products

(increase of €29 million, excluding revaluations and chan-

ges in the consolidation) is included in the appropriate

component of production costs, i.e. raw materials, packa-

ging materials, excise duties and, with regard to the fixed

cost element of stocks, other expenses.


2001* 2001*

Balance sheet

Operating assets 5,280 4,726 328 308 1,027 768 361 397 6,996 6,199

Non-consolidated participating interests 36 53 331 87 25 23 18 20 410 183

Total assets 5,316 4,779 659 395 1,052 791 379 417 7,406 6,382

Invested cash 375 813

Total assets as per balance sheet 7,781 7,195

Total provisions and liabilities 3,651 3,207 334 236 729 469 131 144 4,845 4,056

Total liabilities as per balance sheet 4,845 4,056

Group equity 2,936 3,139

Investments in intangible fixed assets 34 17 1 – – – – – 35 17

Investments in tangible fixed assets 461 442 10 17 208 103 17 16 696 578

Amortisation of intangible fixed assets 10 4 – – – – – – 10 4

Depreciation of and value adjustments

to tangible fixed assets 420 403 10 10 33 35 18 17 481 465


60


2002 2001*

Number of employees

The average number of employees was:

Netherlands 5,527 5,620

Rest of Europe 22,440 20,646

Western Hemisphere 1,451 839

Africa/Middle East 10,462 6,700

Asia/Pacific 1,377 1,308

Heineken N.V. and fully consolidated

participating interests 41,257 35,113

Rest of Europe 2,877 947

Africa/Middle East 631 537

Asia/Pacific 3,472 3,428

Proportionally consolidated participating interests 6,980 4,912

Heineken N.V. and consolidated

participating interests 48,237 40,025

Amortisation/depreciation and value

adjustments

Depreciation of tangible fixed assets 476 444

Other value adjustments to tangible fixed assets 5 21

Amortisation of intangible fixed assets 10 4

491 469

Value adjustments to other assets 38 7

529 476

Staff costs

Salaries and wages 1,069 994

Pension costs 111 41

Other social security costs 275 207

Other staff costs 193 187

1,648 1,429

Staff costs capitalised in connection with

production of tangible fixed assets for use

by the group – 6 – 12

1,642 1,417

Other staff costs includes amounts added to other

provisions in respect of reorganisations.

Other value adjustments to tangible fixed assets include

the balance of reductions in the book values of produc-

tion assets to their net realisable value and reversals

of exceptional losses from impairment of these assets.

The value adjustments to other assets relate mainly to

provisions for stocks of finished products and spares held

by operating companies.




61

2002 2001

Results of non-consol idated participating

interests

Share in net result of participating interests

carried at net asset value 15 17

Dividends received from participating interests

carried at cost 33 28

48 45

TaxationThe taxation amounts to 31.0% (2001: 31.0%) of the prof-

it before tax, excluding the results of non-consolidated

participating interests.

Interest

Interest paid – 146 – 118

Interest received on cash deposits etc. 37 47

– 109 – 71


The main components of the taxation charge are:

Profit before taxation excluding the results

of non-consolidated participating interests 1,173 1,054

Taxation charge at the statutory tax rate in

the Netherlands 34.5% 405 35.0% 369

Effect of tax rates outside the Netherlands – 0.9% – 11 – 0.5% – 5

Non-allowable expenses 1.7% 20 1.6% 17

Utilisation of tax losses carried forward – 1.2% – 14 – 2.6% – 28

Tax losses not recognised – 0.1% – 1 1.4% 15

Underprovided in prior years – 0.8% – 9 – 0.9% – 9

Tax incentives and other differences – 2.2% – 26 – 3.0% – 32

Effective tax burden 31.0% 364 31.0% 327


62


2002

2002 2001

Extraordinary result after tax


The extraordinary result after tax in 2001 relates to

the book profit of €35.5 million on the disposal of the

2% interest in the Spanish hotel group NH Hoteles SA

and an exceptional cash dividend of €16.3 million

distributed by Whitbread Plc. following the disposal of

its Pubs & Bars Division.

Tax losses

As at December , the group

had tax losses totalling € million,

expiring as follows:

2003 20

2004 29

2005 21

2006 12

2007 21

Later than 2007 but not indefinite 31

134

An amount of €22 million of these tax losses has been

recognised as a deferred tax asset and included in

financial fixed assets. Owing to the uncertainty regar-

ding the ability to realise other tax losses, they have

not been recognised.


Notes to the Consolidated Cash Flow Statement

63

The consolidated cash flow statement has been drawn up

using the indirect method. The various consolidated profit

and loss account and balance sheet items have been

adjusted for changes which have no effect on the receipts

and payments during the year. Working capital comprises

stocks, receivables and current liabilities (excluding bank

overdrafts and repayment commitments on long-term

borrowings in ). The cash flow from investing

activities relates to the net amount of investments and

disposals. The net cash position consists of cash in hand

and at bank, securities and bank overdrafts.

Provisions Long-term

borrowings

Repayment

commitments

Position as at 1 January 2002 1,024 797 32

Revaluation/exchange differences – 14 – 11 – 1

Changes in the consolidation 51 81 11

Other non-cash-flow movements – 72 – 136 220

Cash flow movements – 8 484 – 56

Position as at 31 December 2002 981 1,215 206

Working capital

Position as at 1 January 2002 – 22

Movements in balance sheet items in connection

with dividends, interest and taxation – 2

Revaluation/exchange differences – 49

Changes in the consolidaton 57

Other non-cash-flow movements – 42

Cash flow movements 223


64

Participating Interestsof significance for the true and fair view required by law

A declaration of joint and several liability pursuant to the provisions of Section , Part , Book , of the Netherlands

Civil Code has been issued with respect to the legal entities established in the Netherlands marked with a • below.

Ful ly consol idated participating interests

• Heineken Nederlands Beheer B.V. Amsterdam 100.0

• Heineken Brouwerijen B.V. Amsterdam 100.0

• Heineken Nederland B.V. Amsterdam 100.0

• Heineken International B.V. Amsterdam 100.0

• Heineken Technical Services B.V. Amsterdam 100.0

• Amstel Brouwerij B.V. Amsterdam 100.0

• Amstel Internationaal B.V. Amsterdam 100.0

• Vrumona B.V. Bunnik 100.0

• Invebra Holland B.V. Amsterdam 100.0

• Brouwerij de Ridder B.V. Maastricht 100.0

• B.V. Beleggingsmaatschappij Limba Amsterdam 100.0

• Brand Bierbrouwerij B.V. Wijlre 100.0

• Beheer- en Exploitatiemaatschappij Brand B.V. Wijlre 100.0

Sogebra S.A. Paris (France) 100.0

Heineken España S.A. Seville (Spain) 97.8

Heineken Italia S.p.A. Pollein (Italy) 100.0

Athenian Brewery S.A. Athens (Greece) 98.8

Grupa Z.ywiec S.A. Z

.ywiec (Poland) 61.8

Heineken Ireland Ltd. * Cork (Ireland) 100.0

Amstel Brewery Hungary Inc. Komárom (Hungary) 100.0

Heineken Slovensko A.S. Nitra (Slovakia) 91.6

Heineken Switzerland A.G. Chur (Switzerland) 100.0

Mouterij Albert N.V. Ruisbroek (Belgium) 100.0

Ibecor S.A. Brussels (Belgium) 100.0

Affligem Brouwerij BDS N.V. Opwijk (Belgium) 100.0

Bravo International St. Petersburg (Russia) 100.0

Dinal LLP Almaty (Kazakhstan) 51.0

Heineken USA Inc. White Plains (United States) 100.0

Antilliaanse Brouwerij N.V. Willemstad (Netherlands Antilles) 56.8

Commonwealth Brewery Ltd. Nassau (Bahamas) 53.2

Windward & Leeward Brewery Ltd. Vieux Fort (St. Lucia) 72.7

Nigerian Breweries Plc. Lagos (Nigeria) 54.2

Al Ahram Beverages Company Cairo (Egypt) 98.7

Brasseries, Limonaderies et Malteries ‘Bralima’ S.A.R.L. Kinshasa (R.D. Congo) 94.3

Brasseries et Limonaderies du Rwanda ‘Bralirwa’ S.A. Kigali (Rwanda) 70.0

Brasseries et Limonaderies du Burundi ‘Brarudi’ S.A. Bujumbura (Burundi) 59.3

Brasseries de Bourbon S.A. St. Denis (Réunion) 85.4

Ghana Breweries Ltd. Kumasi (Ghana) 75.6

Brasseries du Logone S.A. Moundou (Chad) 100.0

P.T. Multi Bintang Indonesia Tbk. Jakarta (Indonesia) 84.5

* In accordance with the provisions of Section of the Republic of Ireland Companies (Amendment) Act , Heineken N.V. has given irrevocable guarantees

for the financial year from January to December in respect of the liabilities, as referred to in Section (c) of that Act, of the subsidiary companies

Heineken Ireland Limited and Heineken Ireland Sales Limited.

% interest


65

Participating Interests

Proportional ly consol idated participating interests

The companies listed below are proportionally consolidated because control of these companies is exercised jointly

and directly by virtue of an agreement with the other shareholders.

% interest

BrauHolding International AG Munich (Germany) 49.9

Zagorka Brewery A.D. Stara Zagora (Bulgaria) 48.0

Ariana Brewery A.D. Sofia (Bulgaria) 47.5

Pivara Skopje A.D. Skopje (Macedonia) 27.3

Brasseries du Congo S.A. Brazzaville (Congo) 50.0

Asia Pacific Breweries (Singapore) Pte. Ltd. Singapore 42.5

Shanghai Asia Pacific Brewery Co. Ltd. Shanghai (China) 44.9

Hainan Asia Pacific Brewery Ltd. Haikou (China) 42.5

SP Holdings Ltd. Port Moresby (Papua New Guinea) 32.1

Vietnam Brewery Ltd. Ho Chi Minh City (Vietnam) 25.5

Cambodia Brewery Ltd. Phnom Penh (Cambodia) 34.0

DB Group Ltd. Auckland (New Zealand) 32.7

Non-consol idated participating interests

carried at net asset value

Guinness Anchor Berhad Petaling Jaya (Malaysia) 10.8

Thai Asia Pacific Brewery Co. Ltd. Bangkok (Thailand) 14.9

Florida Bebidas S.A. San José (Costa Rica) 25.0

Other non-consol idated participating

interests carried at cost

Quilmes International (Bermuda) Ltd. Hamilton (Bermuda) 15.0

Cervejarias Kaiser Brasil S.A. Rio de Janeiro (Brazil) 20.0


66

Balance Sheet of Heineken N.V.after proposed appropriation of profit in millions of euros

2002 2001

Assets

Fixed assets

Financial fixed assets 2,550 2,390

Current assets

Receivables 2 12

Cash 216 585

218 597

2,768 2,987

Equity and l iabi l i t ies

Shareholders’ equity

Issued share capital 784 784

General reserve 1,759 1,974

2,543 2,758

Liabilities

Long-term borrowings 68 68

Current liabilities 157 161

225 229

2,768 2,987

31 December 31 December


Profit and Loss Account of Heineken N.V.

67


2002 2001

Net profit of group companies 792 736

Other revenues and expenses 3 31

Net profit according to the consolidated

profit and loss account 795 767


68

Notes to the Balance Sheet and Profit and Loss Account of Heineken N.V. for 2002

General

The amounts disclosed in the notes are in millions of

euros unless otherwise indicated. The aggregate amounts

referred to in Section , subsection , Part , Book ,

of the Netherlands Civil Code, in respect of the remunera-

tion, pensions etc. of existing and former members of

the Executive Board and of existing and former members

of the Supervisory Board disbursed by the company were

as follows:

Remuneration

The remuneration of the members of the Executive Board

comprises a fixed component and a variable component,

made up of an annual profit-sharing bonus and a long-term

bonus. The profit-sharing bonus is determined individually

by the Supervisory Board. The long-term bonus is linked to

the issue of bonus shares or recapitalisation by Heineken

N.V., which, in the past, has occurred on average once

every three years.

Pensions

The pensions of the Executive Board members are admin-

istered by the Heineken Pension Fund. In , €,

(: €,) was charged to the company in respect

of pension contributions.

Shares

As at December , the members of the Executive

Board did not hold any of the company’s shares, convert-

ible bonds or option rights. One of the Executive Board

members held shares of Heineken Holding N.V. as at

December .

Supervisory Board

As at December , the Supervisory Board members

did not hold any of the company’s shares, convertible

bonds or option rights. Two Supervisory Board members

together held , shares of Heineken Holding N.V. as at

December .

The individual members of the Supervisory Board received

the following remuneration:

20012002 20012002 20012002 20012002 20012002

Executive Board remuneration

in thousands of euros

A. Ruys 506 432 426 367 – 681 – – 932 1,480

M.J. Bolland 358 239 277 185 – – – – 635 424

J.F.M.L. van Boxmeer 358 239 277 185 – – – – 635 424

D.R. Hooft Graafland 1 239 – 185 – – – – – 424 –

S.W.W. Lubsen 2 358 358 412 412 – 514 1,856 – 2,626 1,284

K. Vuursteen 3 181 543 152 455 1,000 845 804 – 2,137 1,843

Fixed Long-term

bonus

Annual

bonus

Pension

plan

Total

1 Appointed 25 april 20022 Retired 25 april 2002

2002 2001

Executive Board members 7.5 5.5

Supervisory Board members 0.3 0.3

2002 2001

J.M. de Jong1 31 –

M. Das 38 29

J. Loudon 38 29

H. de Ruiter 38 29

M.R. de Carvalho 38 29

A.H.J. Risseeuw 38 21

J.M. Hessels 38 21

C.J.A. van Lede1 26 –

R. Hazelhoff 2 14 34

A. Maas2 12 29

L. van Vollenhoven2 12 29

in thousands of euros

1 Remuneration since appointment as member of the Executive Board on 2 May 20022 Retired on 31 December 20023 Retired on 25 April 2002

Accounting pol icies for the valuation of

assets and l iabi l i t ies and for the determination

of results

Shares in group companies are carried at net asset value

calculated in accordance with the accounting policies

for the valuation of assets and liabilities stated on page

et seq. Amounts receivable from group companies are

stated at face value. Also stated at face value are other

amounts receivable, cash, long-term borrowings and cur-

rent liabilities. Goodwill, being the difference between the

value as calculated in accordance with the stated account-

ing policies and the price paid on acquisition of group

companies, is taken to the general reserve. Positive differ-

ences are credited to the revaluation reserve. Any differ-

ence in value of a group company between the beginning

and end of the year which does not relate to changes in

the paid-up share capital, results and dividends of that

company is credited or debited to the revaluation reserve

or, if this is insufficient, to the general reserve.

The profit and loss account has been prepared in accor-

dance with the accounting policies stated on page .



69

20012002

Total Shares

Group companies

Receivables

Financial f ixed assets

Position as at 1 January 2002 2,390 714 1,676

Revaluation – 853 – 853 –

Net profit of group companies 792 792 –

Dividend payments by group companies – 362 – 362 –

Other movements 583 – 583

Position as at 31 December 2002 2,550 291 2,259

Receivables

Amounts receivable 2 12

Cash

Short-term cash deposits 216 585

Issued capital

Position as at 1 January 784 711

Recapitalisation charged to the general reserve – 73


The amounts receivable fall due within one year.

The issued share capital comprises 391,979,675 shares

of €2.00 nominal value and the authorised share capital

is €2.5 billion.


70


2002 2001

Ruys

Bolland

Van Boxmeer

Hooft Graafland

De Jong

Das

Loudon

De Ruiter

de Carvalho

Risseeuw

Hessels

Van Lede

Executive BoardSupervisory BoardAmsterdam, February

Long-term borrowings

Amounts falling due after more than one year

relate to:

Private loan, in EUR, interest rate 5.84%,

redeemable 2 June 2006 68 – 68 –

68 – 68 –

Total More than 5 years Total More than 5 years

Third parties Group companies Third parties Group companies

General reserve

Position as at 1 January 1,974 1,685

Revaluation – 853 – 248

Net profit for the year 795 767

Dividend for the year – 157 – 157

Recapitalisation – – 73

Position as at 31 December 1,759 1,974

Current l iabi l i t ies

Amounts falling due within one year relate to:

Taxation 59 63

Dividend 94 94

Other creditors 4 4

157 161

Off-balance-sheet commitments

Declarations of joint and several liability – 780 – 880


Other information

71

Introduction

We have audited the financial statements of

Heineken N.V., Amsterdam, as included on pages to

of this report. The financial statements are the responsi-

bility of the company’s management. Our responsibility is

to express an opinion on these financial statements based

on our audit.

Scope

We conducted our audit in accordance with auditing

standards relating generally accepted in the Netherlands.

Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the account-

ing principles used and significant estimates made by

management, as well as evaluating the overall financial

statement presentation. We believe that our audit pro-

vides a reasonable basis for our opinion.

Opinion

In our opinion, the financial statements give a true and

fair view of the financial position of the company as

at December and of the result for the year then

ended in accordance with accounting principles generally

accepted in the Netherlands and comply with the financial

reporting requirements included in Part , Book , of the

Netherlands Civil Code.

Appropriation of Profit

Article , paragraph , of the Articles of Association

stipulates:

‘From the net profit there shall first be distributed, if

possible, six per cent dividend on the issued part of the

authorised share capital. The amount then remaining shall

be at the disposal of the General Meeting of Shareholders.’

It is proposed to appropriate € million of the net

profit for payment of dividend and to add € million to

the general reserve.

Special Rights pursuant to the Articles

of Association

Article , paragraph , of the Articles of Association reads:

‘The appointment of the members of the Executive Board

and of the Supervisory Board shall be made by the General

Meeting of Shareholders from a binding nomination of

at least two persons to be drawn up for each appointment

by the Supervisory Board.’

Heineken N.V. is not a ‘structuurvennootschap’ within

the meaning of Sections – of the Netherlands Civil

Code. Heineken Holding N.V., a company listed on

Euronext Amsterdam, holds .% of the shares of

Heineken N.V.

Authorised Capital

The company’s authorised capital amounts to €. billion.

Events after Balance Sheet Date

On January , Heineken signed an agreement for

the acquisition of a % interest in a joint venture which

has a controlling interest of % in the Chilean brewery

CCU. Heineken simultaneously reached agreement with

Quilmes on the sale of the % interest in the Argentinian

brewing group Quilmes International (Bermuda) Ltd.,

realising at net non-recuring gain of € million. The trans-

actions in Chile and Argentina will involve a net investment

of € million.

On the same date, Heineken reached heads of agreement

on the acquisition of a % interest in the Croatian brewer

Karlovacka Pivovara.

Amsterdam, February

KPMG Accountants N.V.

Auditors’ Report


72


Average trade in 2002:

841,064 shares per day

Average trade in 2002:

137,473 shares per day

0

10

20

30

40

50

60

1994

1993

1995

1996

1997

1998

1999

20002001

2002

Heineken N.V. share price

in euros

Euronext Amsterdam

after restatement for recapitalisation

and share split

share price rangeclosing price

37.2

0

0

10

20

30

40

50

60

1994

1993

1995

1996

1997

1998

1999

20002001

2002

Heineken Holding N.V. share price

in euros

Euronext Amsterdam


and share split

share price rangeclosing price

27.6

5

0

5

10

15

20

25

30

35

40

1993

1994

1995

1996

1997

1998

1999

20002001

2002

Dividend per share

in euro cents


and share split

40 40

32 32

25

20 20 20

16 16

5

10

15

20

25

30

35

40

40 40

32 32

25

20 20 20

16 16

S U P P L E M E N T A R Y I N F O R M A T I O N


73

Heineken N.V.

The shares and options of Heineken N.V. are traded on

Euronext Amsterdam, where the company is included

in the main AEX index. In , the average daily volume

of trade was , shares. The shares are also listed

on Euronext Brussels and on the Luxembourg Bourse.

Heineken N.V. is not a ‘structuurvennootschap’ within

the meaning of the Netherlands Civil Code. Consequently,

decisions on all important matters are taken by the

General Meeting of Shareholders.

Market capitalisation

On December , there were ,, shares of

€. nominal value in issue. At a closing price of €.,

the market capitalisation of Heineken N.V. on balance

sheet date was €. billion

Rules concerning insider dealing

Within Heineken N.V. there are established rules governing

the disclosure of transactions in shares of Heineken N.V.

and Heineken Holding N.V. that are applicable to the mem-

bers of the Supervisory Board and the Executive Board,

to other managers and staff who might be in possession of

price-sensitive information and to outside consultants.

Major Holdings in Listed Companies Disclosure Act

Pursuant to the Major Holdings in Listed Companies

Disclosure Act, Heineken Holding N.V., Amsterdam,

has disclosed an interest of .% in Heineken N.V.

Heineken Holding N.V.

The A shares of Heineken Holding N.V. are traded on

Euronext Amsterdam. Options on A shares are traded on

Optiebeurs Euronext.Liffe. In , the average daily

volume of trade was , shares. Heineken Holding N.V.

is not a ‘structuurvennootschap’ within the meaning of

the Netherlands Civil Code. Consequently, decisions on all

important matters are taken by the General Meeting of

Shareholders.

Dividend policy

As provided by Article of the Articles of Association,

the shareholders of Heineken Holding N.V. are paid the

same dividend as shareholders of Heineken N.V.

Share capital

On December , the following numbers of shares

were in issue:

,, A shares of €. nominal value

,, B shares of €. nominal value

priority shares of €. nominal value

The B shares confer the same rights as the A shares.

At a closing price of €. the market capitalisation

of Heineken Holding N.V. on balance sheet date was

€. billion.

Rules concerning insider dealing

Within Heineken Holding N.V. there are established rules

governing the disclosure of transactions in shares of

Heineken N.V. and Heineken Holding N.V. that are applica-

ble to the members of the Management Board and to a

number of permanent advisers.

Major Holdings in Listed Companies Disclosure Act

Pursuant to the Major Holdings in Listed Companies

Disclosure Act, l’Arche Holding S.A., Sion, Switzerland,

has disclosed an interest of .% and Greenfee B.V.

has disclosed an interest of .% in Heineken Holding N.V.

Financial calendar in for both

Heineken N.V. and Heineken Holding N.V.

Announcement of figures February

Publication of annual report March

Annual General Meeting of

Shareholders, Amsterdam April

Quotation ex-final dividend April

Final dividend payable May

Announcement of half-year results September

Quotation ex-interim dividend September

Interim dividend payable September

Contacting Heineken N.V.

and Heineken Holding N.V.

Further information on Heineken N.V. is obtainable from

the Corporate Communication and/or Investor Relations

Department, telephone + ,

or by e-mail: [email protected].

Further information on Heineken Holding N.V. is obtainable

by: telephone + , or fax + .

Information is also obtainable from the Investor Relations

Department of Heineken N.V.

The website www.heinekeninternational.com also

carries further information about both Heineken N.V.

and Heineken Holding N.V.


74

Historical Summary

2002 2001 1999 1998 1997 1996 1995 1994 1993 1992Turnover and profit in millions of euros

Net turnover 10,293 9,333 8,107 7,148 6,272 6,131 5,531 4,603 4,422 4,011

Operating profit 1,282 1,125 921 799 659 546 459 457 406 362

as % of net turnover 12.5 12.1 11.4 11.2 10.5 8.9 8.3 9.9 9.2 9.0

as % of total assets 16.4 15.6 14.6 13.3 12.4 10.7 9.5 10.4 10.0 9.8

Interest cover ratio 12.2 16.5 14.8 20.8 63.1 46.9 40.9 – – 342.7

Net profit including extraordinary results 795 767 621 516 445 345 297 301 300 236

Net profit* 795 715 621 516 445 345 297 301 274 236

as % of shareholders’ equity 31.3 25.9 25.9 19.7 19.4 14.9 14.5 14.0 13.9 13.1

Dividend 157 157 125 125 100 80 80 80 64 64

as % of net profit* 19.7 22.0 20.1 24.2 22.4 23.1 26.8 26.4 23.3 27.1

Bonus shares in millions of euros

Increase in share capital – 73 – – 142 – – 114 – –

Cash payment – – – – 16 – – 13 – –

Distribution from reserves – 73 – – 158 – – 127 – –

Percentage increase – 10 – – 25 – – 25 – –

Per share of €2.00 in euros

Cash flow from operating activities* 3.02 2.97 2.64 2.39 2.25 1.92 1.38 1.63 1.79 1.43

Net profit* 2.03 1.82 1.58 1.32 1.14 0.88 0.76 0.77 0.70 0.60

Dividend 0.40 0.40 0.32 0.32 0.25 0.20 0.20 0.20 0.16 0.16

Shareholders’ equity 6.49 7.04 6.11 6.68 5.87 5.91 5.23 5.48 5.04 4.60

Bonus shares (nominal value) – 0.23 – – 0.57 – – 0.57 – –

Cash payment – – – – 0.06 – – 0.06 – –

Cash f low statement in millions of euros

Cash flow from operating activities 1,184 1,165 1,035 935 882 753 539 640 703 562

Dividend 187 168 160 112 114 94 93 93 77 72

Investments 1,973 783 1,503 527 728 439 840 344 334 279

Financing – 427 – 34 335 – 13 80 36 111 – 70 – 179 36

Net cash flow – 549 175 – 293 283 120 255 – 283 133 113 247

* Excluding extraordinary result


Historical Summery

75

2002 2001 1999 1998 1997 1996 1995 1994 1993Financing in millions of euros

Share capital 784 784 711 711 711 569 569 569 455 455

Reserves 1,759 1,974 1,685 1,907 1,588 1,747 1,479 1,579 1,521 1,348

Shareholders’ equity 2,543 2,758 2,396 2,618 2,299 2,316 2,048 2,148 1,976 1,803

Minority interests 393 381 124 248 256 182 186 157 160 108

Group equity 2,936 3,139 2,520 2,866 2,555 2,498 2,234 2,305 2,136 1,911

Provisions 981 1,024 976 770 733 769 734 637 619 581

Long-term borrowings 1,215 797 875 490 522 412 359 192 228 210

Current liabilities 2,649 2,235 1,892 1,860 1,460 1,384 1,462 1,187 1,010 929

Liabilities 3,864 3,032 2,767 2,350 1,982 1,796 1,821 1,379 1,238 1,139

Total equity and liabilities 7,781 7,195 6,263 5,986 5,270 5,063 4,798 4,321 3,993 3,631

Group equity/borrowed capital 0.61 0.77 0.67 0.92 0.94 0.97 0.87 1.14 1.15 1.11

Employment of capital in millions of euros

Intangible fixed assets 39 13 – – – – – – – –

Tangible fixed assets 4,094 3,592 3,250 2,964 2,605 2,521 2,452 2,086 2,076 1,921

Financial fixed assets 835 531 615 422 490 429 380 335 293 245

Fixed assets 4,968 4,136 3,865 3,386 3,095 2,950 2,832 2,421 2,369 2,166

Stocks 765 692 550 490 452 466 447 360 312 313

Receivables 1,270 1,192 1,024 903 775 799 771 563 522 441

Cash and securities 778 1,175 824 1,207 948 848 739 977 790 711

Current assets 2,813 3,059 2,398 2,600 2,175 2,113 1,957 1,900 1,624 1,465

Total assets 7,781 7,195 6,263 5,986 5,270 5,063 4,789 4,321 3,993 3,631

Group equity/fixed assets 0.59 0.76 0.65 0.85 0.83 0.85 0.79 0.95 0.90 0.88

Current assets/current liabilities 1.06 1.37 1.27 1.40 1.49 1.53 1.34 1.60 1.61 1.58

2000

76

Operating Companies and Participating InterestsAs at 31 December 2002Export offices are not shown

Europe

Bulgaria

Bulgaria

Zagorka (48.0%)

Ariana Brewery (47.5%)

Stara Zagora

Sofia

Zagorka, Amstel

Ariana

Belgium Affligem Brouwerij BDS (100%) Opwijk Affligem, Opale

Country Company Location Brands

France Sogebra (100%) Marseilles, Mons-en-Baroeul,

Schiltigheim, St. Omer

Heineken, Amstel, Buckler, Pelforth, Murphy’s Irish Stout,

“33“ Export, Fischer, Kingston, Desperados, Adelscott,

St. Omer, Kriska, Dorreleï

Greece Athenian Brewery (98.8%) Athens, Patras, Thessaloniki Heineken, Amstel, Buckler, Murphy’s Irish Stout, Alfa

Germany BrauHolding International (49.9%) Munich, Rosenheim

Kulmbach, Plauen, Chemnitz

Paulaner, Hacker-Pschorr

Kulmbacher, Thurn und Taxis, Auerbräu, Mönchshof, Kapuziner,

EKU, Sternqueel, Braustolz

Switzerland Heineken Switzerland (100%) Chur Heineken, Amstel, Murphy’s Irish Stout, Calanda, Haldengut

United Kingdom Bulmers (licence) Trowbridge Amstel

United Kingdom Whitbread (licence) Samlesbury Heineken, Murphy’s Irish Stout

Sweden Spendrups (licence) Grängesberg Heineken

Spain Heineken España (97.8%) Madrid, Valencia, Seville, Jaen, Arano Heineken, Amstel Aguila, Buckler, Murphy’s Irish Stout,

Guinness, Kaliber, Legado de Yuste

Slovak Republic Heineken Slovensko (91.6%) Hurbanovo, Nitra Zlaty Bazant, Amstel, Kelt, Corgon, Martiner, Gemer

Russia Bravo International (100%) St. Petersburg Botchkarev, Ochota, Löwenbräu

Poland Grupa Z.ywiec (61.8%) Z

.ywiec, Elblag, Warka, Lez

.ajsk,

Cieszyn, Braniewo

Heineken, Z.ywiec, Warka, Lez

.ajsk, Specjal, Tatra

Netherlands

Netherlands

Netherlands

Heineken Nederland (100%)

Brand Bierbrouwerij (100%)

Brouwerij De Ridder (100%)

’s-Hertogenbosch, Zoeterwoude

Wijlre

Maastricht

Heineken, Amstel, Kylian, Lingen’s Blond, Murphy’s Irish Red

Brand

Ridder, Wieckse Witte, Vos

Macedonia Pivara Skopje (27.3%) Skopje Skopsco, Star Lisec

Kazakhstan Dinal LLP (51%) Almaty Tian Shan, Amstel

Italy Heineken Italia (100%) Aosta, Bergamo, Cagliari,

Massafra, Messina, Pedavena

Heineken, Amstel, Murphy’s Irish Stout, Buckler, Dreher,

Birra Messina, McFarland, Sans Souci, Ichnusa, Birra Moretti,

Classica von Wunster, Prinz

Ireland Murphy Brewery Ireland (100%) Cork Heineken, Amstel, Murphy’s Irish Stout, Buckler

Hungary Amstel Brewery Hungary (100%) Komárom Heineken, Amstel, Buckler, Talléros, Fregatt, Zlaty Bazant


77


Western Hemisphere

Affiliated company (non-consolidated)

Argentina Quilmes International (15%) Buenos Aires, Corrientes, Mendoza,

San Miguel de Tucuman, Zárate

Heineken, Quilmes, Andes, Norte, Bieckert,

Palermo, Liberty, Iguana

Jamaica Desnoes & Geddes (26.3%) Kingston Heineken, Red Stripe, Dragon Stout, Guinness

St. Lucia Windward & Leeward Brewery (73.9%) Vieux-Fort Heineken, Piton, Guinness

Uruguay Quilmes International (15%) Montevideo Heineken, Pilsen, Zillertal

Surinam Surinaamse Brouwerij (76.5%) Paramaribo Parbo

Paraguay Quilmes International (15%) Ypané Bremen, Pilsen, Baviera, Quilmes, Dorada, Joia

Netherlands Antilles Antilliaanse Brouwerij (56.3%) Willemstad Amstel, Amstel Bright, Coral, Malta

Panama Cervecerias Barú-Panama (74.5%) Panama City, David Panama, Soberana, Cristal, Guinness

Nicaragua Compania Cervecera

Centroamericano S.A. (8%) Managua Victoria, Tona

Martinique Brasserie Lorraine (83.1%) Lamentin Lorraine, Porter, Malta

Haiti Brasserie Nationale d’Haïti (22.5%) Port-au-Prince Prestige, Guinness, Malta

Dominican Republic Cerveceria Nacional Dominicana (9.3%) Santo Domingo Heineken, Presidente

Costa Rica Cerveceria Costa Rica (25%) San José Heineken, Imperial, Pilsen, Bavaria, Rock Ice

Chile Quilmes International (15%) Santiago Heineken, Becker, Baltica

Brazil Cervejarias Kaiser Brasil S.A. (20%) Feira de Santana, Gravatai,

Jacarei, Ponta Grossa, Queimados,

Pacatuba, Araraguara, Manous, Cuiabá,

Ribeirã, Preto

Heineken, Kaiser, Santa Cerva, Bavaria, Summer, Xingu

Bolivia Quilmes International (15%) Cochabamba, Santa Cruz, La Paz Ducal, Taquina, Imperial, Paceña

Bahamas Commonwealth Brewery (53.2%) Nassau Heineken, Kalik, Guinness, Vita Malta



78


Africa/Middle East

South Africa South African Breweries-Miller (licence) Cape Town, Durban, Johannesburg Amstel, Heineken

Chad Brasseries du Logone (100%) Moundou Gala, Chari, Maltina

Sierra Leone Sierra Leone Brewery (42.5%) Freetown Star, Guinness, Maltina

Rwanda Bralirwa (70%) Gisenyi, Kigali Primus, Mützig, Guinness

Réunion Brasseries de Bourbon (85.4%) Saint Denis Bourbon, Dynamalt, 974

Nigeria

Nigeria

Nigerian Breweries (54.2%)

Consolidated Breweries (24.8%)

Aba, Enugu, Ibadan, Kaduna, Lagos

Jjebu Ode, Owe Omamma

Amstel Malta, Maltina, Star, Gulder, Legend

“33“ Export, Hi-malt

Morocco Brasseries du Maroc (2.2%) Casablanca, Fès, Tangiers Heineken, Amstel

Lebanon Almaza (80.8%) Beirut Almaza

Congo Brasseries du Congo (50%) Brazzaville, Pointe Noire Mützig, Primus, Guinness, Ngok

Jordan General Investment (10.8%) Zerka Amstel

Israel Tempo Beer Industries (17.8%) Netanya Maccabee, Gold Star, Nesher, Malt Star

Ghana Ghana Breweries (75.6%) Kumasi, Accra Amstel Malta, Star, Gulder, ABC Golden Lager,

ABC Stout

Burundi Brarudi (59.3%) Bujumbura, Gitega Amstel, Primus, Dynamalt

Angola

Angola

Nocal (27.1%)

EKA (46%)

Luanda

Dondo

Nocal, Primus

EKA

Cameroon Brasseries du Cameroun (8.8%) Bafoussam, Douala, Garoua, Yaoundé Amstel, Mützig

Democratic

Republic of Congo

Bralima (95%) Boma, Bukavu, Kinshasa, Kisangani,

Mbandaka, Lubumbashi

Amstel, Primus, Mützig, Guinness, Turboking

Egypt Al Ahram Beverages Company (98.7%) El Obour, Sharka, Badr, Gianarlis Stella, Fayrouz, Birell, Sakara



79


Asia/Pacific

Affiliated company (non-consolidated)

Malaysia Guinness Anchor Berhad (10.8%) Kuala Lumpur Heineken, Tiger, Guinness, Anchor Ice, Baron’s, KilKenny

New Zealand DB Group (32.7%) Greymouth, Mangatainoka,

Otahuhu, Timaru

Heineken, DB Draft, Murphy’s Irish Stout, Export Gold,

Export Dry, Tui, Monteith, Amstel

Vietnam

Vietnam

Vietnam Brewery (25.5%)

Hatay Brewery (27.7%)

Ho Chi Minh City

Hatay, under construction

Heineken, Tiger, Bivina

Thailand Thai Asia Pacific Brewery (14.9%) Bangkok Heineken

Tahiti Brasserie de Tahiti (licence) Papeete Heineken

Singapore Asia Pacific Breweries (42.5%) Singapore Heineken, Tiger, Anchor, ABC Stout, Baron’s

Papua New Guinea South Pacific Brewery (32.1%) Port Moresby, Lae SP Lager, South Pacific Export Lager, Niugini Ice

New Caledonia Grande Brasserie de Nouvelle

Calédonie (87.3%)

Noumea Number One, Havannah

Japan Kirin (licence) Tokyo Heineken

Indonesia Multi Bintang Indonesia (84.5%) Tangerang, Sampang Agung Bintang, Guinness

Cambodia Cambodia Brewery (34%) Phnom Penh Tiger, Anchor, Gold Crown, ABC Stout

China

China

Shanghai Asia Pacific (44.9%)

Hainan Asia Pacific (42.5%)

Shanghai

Haikou

Tiger, Reeb

Tiger, Anchor, Aoke


In France last year, Heineken

market-tested a new bottle for

the upper end of the on-trade

segment. The appeal of the

all-aluminium bottle lies in a

creative mix of design and

material. Consumer reactions

in up-market clubs in the major

cities have been extremely

positive, and the new bottle

A l u m i n i u m b o t t l e C o o l a n d e x c l u s i v e

won the prestigious French

Oscar d’Emballage for innova-

tive packaging. Heineken plans

to launch the new aluminium

bottle in around more

markets in , including the

United States, Italy, Germany,

Spain, the Netherlands and

Hong Kong.

>

A Heineken N.V. publication

Heineken N.V.

Tweede Weteringplantsoen 21

1017 ZD Amsterdam

P.O. Box 28

1000 AA Amsterdam

Netherlands

telephone +31 20 523 92 39

fax +31 20 626 35 03

Copies of this annual report

and further information are obtainable

from the Corporate Communication Department,

telephone +31 20 523 92 39

or via www.heinekeninternational.com

Translation

Mac Bay Consultants

Graphic design

and electronic publishing

Design Studio Hans Kentie BNO

Colour separations

UnitedGraphics

Printing

Boom Planeta

Colophon

While the authors of this publication have as far as possible

obtained the permission of copyright holders where required,

any organisations or individuals considering that their

copyright has been infringed should contact Heineken’s

Corporate Communication Department

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