Regional Review continued
Africa and the Middle East
African beers
Star is Africa’s number 1 selling beer. Star is brewed by Sierra Leone Brewery Ltd, in which Heineken has a 42.5 per cent stake.
Primus beer is another popular lager beer brewed by the Congolese brewing company Bralima, owned by Heineken.
- Revenue
- €1.2 billion
- EBIT
- €234.1 million
- EBIT (BEIA)
- €233.4 million
- Consolidated beer volume
- 13.3 million hectolitres
- Heineken group volume
- 1.1 million hectolitres
Consolidated beer volume In millions of hectolitres
Heineken’s has a long-standing presence in Africa. Our knowledge of the environment, coupled with more stable economies and healthier trading conditions boosted volumes and profitability in the region. The popularity of our brands and of Heineken beer in particular, is growing rapidly.
Revenues jumped more than 12 per cent, and EBIT increased by more than 18 per cent. EBIT growth was particularly strong in Nigeria, whilst the performance in the North Africa region was moderate.
In 2006, consolidated volumes in the region increased organically by 1.7 million hectolitres, bringing the regional total to 13.3 million hectolitres. Nigeria and the sub-Saharan breweries in Congo, Burundi, Rwanda and the Democratic Republic of Congo contributed more than 70 per cent to the total increase.
Heineken brand volumes grew by more than 23 per cent, turning in positive performances in all countries. Heineken brand growth was particularly strong in South Africa, up 48 per cent, in Nigeria, up 49 per cent and in Rwanda up 65 per cent.
“ We have always been well positioned for growth and since the economic situation in Central Africa has been stabilising, we have clearly benefited from the potential provided by this attractive region. We were able to increase volumes and to boost profitability.”
Volumes were the major driver of the significant increase in EBIT and in margins. This result was achieved despite a rise in marketing expenditures. The marketing budget was augmented in order to increase the share of voice of our key brands and to support the launch of new products. In addition, previously implemented efficiencies in fixed costs are starting to pay off.
In South Africa, where it is brewed under license, the Amstel brand performed very well and strengthened its position as an established premium brand. Sales of Amstel contributed to an increase in royalties.
Brandhouse, the South-African joint venture between Heineken, Diageo and Namibian Breweries, performed well in terms of volumes in its second year of operations.
Irrespective of the conflict in the country, our brewery in Lebanon remained operational. In Israel, EBIT grew slightly. Our partnership Sirocco in the United Arab Emirates continued to perform well.
We recorded excellent results in our soft drinks operations, with double-digit volume growth. These activities are mainly based in the sub-Saharan region, Israel and Egypt.
In December, we acquired 49.99 per cent of the shares in the Tunisian company, Société de Production et de Distribution des Boissons S.A. (SPDB) in Tunisia. This joint-venture company will invest in the construction of a new brewery, which is expected to be operational early 2008, and will brew and distribute Heineken and local mainstream brands in Tunisia.
