H ENG JV2002 final - Jaarverslag.com · Heineken aims to defend and strengthen its global mar-ket...
Transcript of 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
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48
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52
58
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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
in millions of hectolitres
Amstel sales
in millions of hectolitres
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
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
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
Supervisory Directorships:
• KPN N.V.
• Samas-Groep NV
• AOT NV
J . M . H e s s e l s ( 19 4 2 )
Dutch nationality
Appointed in
Member of the Audit Committee
Profession: Company Director
Supervisory Directorships:
• 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
Profession: Company Director
Chairman and CEO of Akzo Nobel N.V.
Supervisory Directorships:
• 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
Member of the Audit Committee
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.
Report of the Supervisory Board
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
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
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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
Report of the Supervisory Board
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
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
8
Report of the Executive Board
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
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
10
Report of the Executive Board
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
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
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>
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
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
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
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.
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
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.
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
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.
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
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
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
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
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
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
in millions of hectolitres
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.
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
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.
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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.
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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
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.
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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
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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.
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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
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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
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
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.
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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
in millions of hectolitres
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.
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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
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
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
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
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
in millions of hectolitres
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
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
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>
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
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-
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
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
in millions of hectolitres
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.
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
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
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
40
Financial Review
0 0 0
1993
1994
1995
1996
1997
1998
1999
20002001
200219
9819
992000
20012002
1998
1999
20002001
2002
Operating profit
in millions of euros
Tangible fixed assets,
net investments and depreciation
in millions of euros
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
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
Financial Review
41
Turnover and costs
in millions of euros
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
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
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
in millions of euros
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
in millions of euros
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
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
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
in millions of euros
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
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
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
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
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*
in millions of euros
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.
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
48
Consolidated Cash Flow Statement
2002 2001
in millions of euros
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
F I N A N C I A L S T A T E M E N T S 2 0 0 2
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
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
Notes to the Consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement for 2002
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
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Notes to the Consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement for 2002
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
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
Notes to the Consolidated Balance Sheet
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.
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Notes to the Consolidated Balance Sheet
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
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
54
Notes to the Consolidated Balance Sheet
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
Position as at 31 December 393 381
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Notes to the Consolidated Balance Sheet
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
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
56
Notes to the Consolidated Balance Sheet
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
F I N A N C I A L S T A T E M E N T S 2 0 0 2
57
Notes to the Consolidated Balance Sheet
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
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
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
* The 2001 figures have been restated for comparison purposes.
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
Taxation – 364 – 327
Minority interests – 62 – 57
Net profit on ordinary
activities 795 715
Extraordinary result after tax – 52
Net profit 795 767
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Notes to the Consolidated Profit and Loss Account
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.
* The 2001 figures have been restated for comparison purposes.
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
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
60
Notes to the Consolidated Profit and Loss Account
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.
* The 2001 figures have been restated for comparison purposes.
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Notes to the Consolidated Profit and Loss Account
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
Taxation – 364 – 327
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
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
62
Notes to the Consolidated Profit and Loss Account
2002
2002 2001
Extraordinary result after tax
Extraordinary result after tax – 52
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.
F I N A N C I A L S T A T E M E N T S 2 0 0 2
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
Position as at 31 December 2002 165
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
F I N A N C I A L S T A T E M E N T S 2 0 0 2
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
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
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
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Profit and Loss Account of Heineken N.V.
67
in millions of euros
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
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
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 .
F I N A N C I A L S T A T E M E N T S 2 0 0 2
Notes to the Balance Sheet and Profit and Loss Account of Heineken N.V. for 2002
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
Position as at 31 December 784 784
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.
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
70
Notes to the Balance Sheet and Profit and Loss Account of Heineken N.V. for 2002
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
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
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
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
72
Information for Shareholders
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
after restatement for recapitalisation
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
after restatement for recapitalisation
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
Information for Shareholders
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.
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
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
S U P P L E M E N T A R Y I N F O R M A T I O N
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
S U P P L E M E N T A R Y I N F O R M A T I O N
77
Operating Companies and Participating Interests
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
Country Company Location Brands
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
78
Operating Companies and Participating Interests
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
Country Company Location Brands
S U P P L E M E N T A R Y I N F O R M A T I O N
79
Operating Companies and Participating Interests
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
Country Company Location Brands
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