Bryggerigruppen A/S (The Danish Brewery Group A/S) Q3...

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Bryggerigruppen A/S(The Danish Brewery Group A/S)

Q3 2004

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• Introduction to The Danish Brewery Group• Strategic perspectives• Q3 Results• Shareholder information

Agenda

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Introduction to The Danish Brewery Group

OVERVIEWThe Company

• Second largest brewery business in Scandinavia

• Scandinavia’s leading beer exporter

• Approx. 1,900 employees

• More than 13,000 shareholders

• The only brewery business in Scandinavia to be EMAS-registered (EU’s environmental regulation)

Its Products

• Ceres i a leading brand in Italy (85% market share in thesegment)

• Royal Export is the preferred strong beer in Denmark

• Faxe is the leading import brand in Germany, Poland, andLithuania

• Faxe Kondi is the number 2 soft drink in Denmark

• Vitamalt is the number 3 malt drinks brand in the world

Revenue distribution2004 - 3Q

40%

40%

12%

8%

DenmarkWestern EuropeEastern EuropeOthers

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VISION AND BUSINESS FOCUS

VisionWe will with increasing profitability create abusiness as one of the leading providers ofbeverages in the Nordic and Baltic countries,and we will develop profitable export markets.

Business Focus• Nordic and Baltic countries: Domestic market• Italy and Germany: Niche strategy• The Caribbean and Africa: Niche strategy (malt)

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i Return on invested capital - ROICAn increase from 8.8% in 2002 to more than 10% in 2004

i Cash flow

Generating a cash flow of more than DKK 200 million after tax per year

i Profit margin

An increase from 9.1% in 2002 to more than 10% in 2004

Strategic perspectives

FINANCIAL TARGETS

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• Acquisition of Tauras, Lithuania1999

• Acquisition of Kalnapilis, Lithuania2001

• Albani and the Group merge• Scandinavian alliance created• Cooperation with Heineken

2002

• Bryggerigruppen A/S (change of name)1992

• Faxe Jyske A/S1989

• V82003

• Merger with holding companies(direct stock exchange listing)

1998

• V8 Next• Acquisition of Cido, Latvia• Acquisition of Lacplesa Alus, Latvia

2004

• Ceres Bryggerierne1856


HISTORY

Breweries of The Danish Brewery GroupAlbani Bryggerierne, OdenseCeres Bryggerierne, ÅrhusFaxe Bryggeri, FaxeMaribo Bryghus A/S, MariboAB Vilniaus Tauras, LithuaniaAB Kalnapilis, LithuaniaSIA Cido Partikas Grupa, Latvia(Lacplesa Alus A/S, Latvia)

AssociatesBanjul Breweries Limited, GambiaHansa Borg Skandinavisk Holding A/S, FaxeNuuk Imeq A/S, GreenlandSolomon Breweries Limited, Solomon IslandsSt.Vincent Breweries Ltd., The Caribbean

Subsidiaries and Sales CompaniesAktieselskabet Cerekem International LTD., FaxeAlbani Sverige AB, SwedenBrewery Group Denmark AB, SwedenCentre Nordique d'Alimentation EURL, FranceCeres S.p.A., ItalyDanish Interbrew LTD. A/S, FaxeDrinktech Holding AG, SwitzerlandFaxe Getränke-Vertrieb GmbH, GermanyFaxe Kondi A/S, FaxeFaxe Polska Sp. z o. o., PolandFaxe Vandindvinding I/S, FaxeImpec Holding S.A.S, The CaribbeanPeva Poland Sp. z o.o., PolandSupermalt UK Ltd., EnglandThe Danish Brewery Group Inc., USAVitamalt West Africa Ltd, UK


THE GROUP

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FAXE BRYGGERI

CERES BRYGGERIERNE

ALBANI BRYGGERIERNE

MARIBO BRYGHUS

HANSA BORG BRYGGERIER ASA

AB VILNIAUS TAURAS

AB KALNAPILIS

DENMARK

LITHUANIA

NORWAYSIA CIDO PARTIKAS GRUPA

LATVIA

LACPLESA ALUS A/S


GROUP STRUCTURE

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Nordic countries

Baltic countries

Africa

The Caribbean

Italy

Germany

Premier league

Canada Poland

England

France

First division


PREMIER LEAGUE AND FIRST DIVISION

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GOVERNANCE MODELOF THE DANISH BREWERY GROUP

MissionManagementPhilosophy Basic Values Vision

Objectives

Budget

KPI

Strategic and Action Plan

Time Perspective

Long

Short

Concretisation

Overall

Detailed

1. Royal: A new strong national beer

2. Introduction of Heineken in Denmark

3. Closure of brewery in Randers

4. More marketing power

5. Increased focus on product development and innovation

6. Increased focus on staff development

7. Resource optimisation

8. Increased focus on key markets

STATUS 2004

20% of segment

1% market share

Completed

In progress

In progress

In progress

In progress

Focus on marketing


STRATEGIC PLAN V8

1. The Royal brand to be further strengthened

2. Cooperation with Heineken to be expanded

3. Relaunch of Kalnapilis in Lithuania

4. More marketing power

5. Increased focus on product development and innovation

6. Increased focus on staff development

7. Resource optimisation

8. Increased focus on key markets

Continued strong focus on

value creation and profitability


V8 NEXTUPDATE OF THE STRATEGIC PLAN IN 2004

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Strategic Perspectives

WHAT IS NEW IN V8 NEXT?

• Expansion of the Royal-brandObjective: At least 10% market share of the Danish lager segmentwithin 5 years

• Licence production of Heineken in DenmarkObjective: Costs efficiency

• Relaunch of Kalnapilis (Lithuania)Objective: To recapture the position as the market leadingsupplier

• The other strategic elements to be maintained

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V8 SUPPORTS THE TOTAL VALUE CHAIN

Purchase Production Distribution Sales

Closure of brewery inRanders

Increased focus on productdevelopment, innovation, and

more power on marketing

Royal

Heineken

Resource optimisation

Staff development

Sales 3.5 million HL (+13.6%)

Net revenue DKK 2.1 billion (+6.8%)

Operating profit DKK 202.9 million (-6.2%)

EBITDA DKK 358.4 million (+15.5%)

EBIT DKK 202.9 million (+15.2%)

Profit before tax DKK 172.0 million (+11.3%)

Free cash flow DKK 100.4 million (-48.1%)

i Consolidated profit before tax of DKK 172.0 million (compared to DKK 154.5 million for the same period of 2003)

i Net revenue up by 6.8% to DKK 2,145.5 millioni Q1-Q3 characterised by:

4Considerable marketing expenses relating to strategic initiatives under the V8 Next Plan

4Bad summer weather i large parts of Europe4Increased competition and pressure on prices in Northern Europe

i Increasing market shares in Italy, Denmark and Lithuaniai EBIT of DKK 202.9 million compared to DKK 176.2 million in 2003.i Free cash flow amounting to DKK 100.4 million compared to DKK 193.6 million for the

same period of 2003 primarily due to increased packaging investment.i Unchanged expectations for the full year, i.e. profit before tax in the amount of

DKK 235-265 million

Results

HIGHLIGHTS - Q3 2004

i V8 Next Strategic Plan introduced- Royal wins market share- Heineken shows growth- Kalnapilis relaunched- Enhanced marketing efforts in key markets- Resource optimisation programme shows results- Changes in distribution system implemented

i Intensified competition and price pressure in Northern Europe

Results

KEY EVENTS - Q1-3 2004

iDenmark:- Beer segment wins market shares (Royal Pilsner and Classic, COOP)- Soft drinks: Faxe Kondi and Mirinda win market shares

i Italy: Increasing market share in a falling total market

i Lithuania:- Kalnapilis in progress. Total market share (Kalnapilis and Tauras) of 27%- Performance is developing positively

i Latvia:- ”Cido” leading Baltic soft drinks producer acquired- Entered into an agreement re. purchase of 83.5% of the share

capital of the Latvian brewery Lacplesa Alus

Results

KEY EVENTS - Q1-3 2004

DKK million 2004 2003 % change

Net revenueOperating profitEBITNet financialsProfit before taxNet profit

2,146203203-31172118

2,008216176-22155102

+7-6

+15-42+11+16

Profit marginFree cash flow

9.5%100

10.8%194

--48

Results

Q3 2004

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Results

FINANCIAL DEVELOPMENT - Q3, 2000-2004

Net turnover

0

1.000

2.000

3.000

2000 2001 2002 2003 2004

DK

K M

illion

Profit Margin

0

2

4

6

8

10

12

2000 2001 2002 2003 2004

Perc

en

t

Free cash flow

0

100

200

300

2000 2001 2002 2003 2004

DK

K M

illion

2.143

3%

4%

-1%2.005

1%

1.900

1.950

2.000

2.050

2.100

2.150

2.200

9mth 2003 Germany The Caribbean Export Impec Latvia 9mth 2004

DKK

Mill

ion

Results

COMPONENTS OF REVENUE GROWTH - Q3 2004

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1’000 HL 20043Q

20033Q

% change 20041-3Q

20031-3Q

% change

Western Europe 977 900 +8.5 2,607 2,443 +6.7

Eastern Europe 445 187 +138.6 767 501 +53.1

Other markets 62 66 -5.8 175 180 -2.6

Total volumes 1,484 1,153 +28.7 3,549 3,124 +13.6

Results

VOLUMES (BY GEOGRAPHICAL AREA) - Q3 2004

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Denmark, beer18%

Italy24%

Germany12%

UK2%

Eastern Europe9%

The Caribbean4%

Tax Free2%

Others5%

Denmark, soft drinks

24%

Denmark, beer18%

Italy26%

Germany11%

UK2%

Eastern Europe9%

The Caribbean3%

Others5%


25%

Tax Free1%

2003 2004

Results

NET TURNOVER Q1-3

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Denmark, beer20%

Italy11%

Germany18%

UK1%

Eastern Europe22%

The Caribbean3%

Tax Free2%

Others5%


18%

Denmark, beer20%

Italy12%

Germany18%

UK2%

Eastern Europe16%

The Caribbean3%

Tax Free2%

Others6%


21%

2003 2004

Results

Volumes - Q1-3

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Results

PEER GROUP - FINANCIAL PERFORMANCE 2003

Cash conversion ratio

0

2

4

6

8

10

12

BG

Perc

en

t

Profit margin

0

4

8

12

16

BG

Perc

en

t

ROIC

02468

1012141618

BG

Perc

en

t

Top 5 international breweries



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Results

SHAREHOLDERSAND SHARE MARKET

(DKK per share)

Total to shareholders

Acquisition treasury shares

Total dividend

(DKK million)

Dividend yield (%)

End-of-year price

Dividend

32363648113

4880*) 64

2828284849

2.4%2.2%2.3%3.6%2.0%

187.6202.6198.1206.9375.0

4.54.54.57.57.5

19992000200120022003

’) Period until the Annual General Meeting in April 2004

Shareholder mix 2004

11%

24%

2%

20%5%

6%

9%

10%

7%

6%

Danske BankLDATPFidelityPFAOther Danish InstitutionalOther foreign inv.Danish retailEmployeesNot registered

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Shareholder Information

PRICE DEVELOPMENT AND REVENUE

Peer Group comprising Carlsberg, HeinekenScottish & Newcastle, SABMiller and Interbrew.

01-01-2001 to 16-11-2004

0

25

50

75

100

125

150

175

200

225

250

29-12-2000

24-04-2001

13-08-2001

26-11-2001

18-03-2002

15-07-2002

04-11-2002

27-02-2003

17-06-2003

30-09-2003

20-01-2004

10-05-2004

25-08-2004

Bryggerigruppen BRYGGERIGRUPPEN PEERS KFX (DK)

Thousand shares (01-03-2002 to 16-11-2004)

0

50

100

150

200

250

300

350

400

450

500

550

600

27-03-2002

28-06-2002

30-09-2002

30-12-2002

31-03-2003

30-06-2003

30-09-2003

30-12-2003

31-03-2004

30-06-2004

30-09-2004

Volume (Thousands)

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The statements about the future made in the Q3 Report2004 reflect Management’s expectations in respect offuture events and financial results, as well as of eco-nomic trends in key markets and developments in in-ternational money, foreign exchange and interest ratemarkets. Statements about the future will inherently in-volve uncertainty as they may be influenced by - in ad-dition to global economic conditions - e.g. marketdriven price reductions, market acceptance of newproducts, unforeseen termination of business relation-ships, changes in regulatory aspects (duties, environ-ment, packaging and containers).

Disclosure

STATEMENTS ABOUT THE FUTURE

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Bryggerigruppen A/S (The Danish Brewery Group A/S)Faxe Allé 1DK-4640 FakseDenmarkTelephone: +45 56 77 15 00Facsimile: +45 56 71 47 64

Home page: www.bryggerigruppen.dkwww.brewerygroup.com

E-mail: [email protected]

Executive Board:Poul Møller CEOConnie Astrup-Larsen International Director Eastern and Central EuropePovl Friis Technical DirectorLeif Rasmussen Sales and Marketing DirectorUlrik Sørensen CFO

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