A stronger footprint, a clear advantage

During the year, we entered 11 new markets, and completed the largest acquisition in our history when we acquired the Scottish & Newcastle businesses in the UK, Portugal, Finland, Belgium, Ireland, India and the USA. In addition, we acquired breweries across Europe in markets such as Belarus, Serbia, Romania, the Czech Republic and Switzerland. In Africa, we acquired Algeria’s leading brewer, completed greenfield expansion in Tunisia and Lubumbashi and began construction of a brewery in South Africa, on schedule to be operational in the second half of 2009. In Asia, we completed greenfield projects in Laos and Mongolia.

We now have leading positions in 59 of our 66 markets, none of which accounts for more than 10 per cent of EBIT (beia). In the current economic environment, we believe this diversification to be a significant advantage.

The strategic potential of all our new markets remains strong. However, the economic downturn means that some will take longer to achieve the ambitious goals we have set for them. The performance in the UK, in particular, was heavily impacted by the combination of recession, on-trade downturn, unprecedented excise duty rises, smoking bans and an adverse exchange rate. We are rapidly realising the synergies that we announced in 2008, as well as reducing costs significantly, re-structuring parts of the business and improving pricing in order to increase the efficiency and profitability of the UK business.