Countries

Austria

Consolidated beer volume 4.6 million hectolitres
Market share 50.0 per cent
Market position 1

The market grew thanks to the substantial volume increase of beer in cans during the UEFA European Football Championship.

Volume of Brau Union Austria grew 2 per cent, resulting in share gains in the premium and mainstream segments. The Zipfer and Puntigamer brands reported strong increases, and volume of the Heineken brand grew 7.3 per cent. Revenue grew in line with volumes. EBIT (beia) was stable, impacted by a shift from on-trade towards off-trade and towards lower margin pack types.

Greece

Consolidated beer volume 3.5 million hectolitres
Market share 74.4 per cent
Market position 1

In the second half of 2008, the beer market suffered from the economic slow-down and social disturbances in Greece, which disrupted distribution and reduced both tourism and consumer confidence, causing lower sales in the large on-trade channel. Beer volume of Athenian Brewery was broadly flat, as good increases posted by the Heineken brand (+4.1 per cent) and the strong growth of Fischer lager, offset lower volume of mainstream brand Amstel.

Revenue and EBIT (beia) increased mid-single digit, thanks to higher pricing, a better sales mix and the cost savings of the F2F programme.

Poland

Consolidated beer volume 12.2 million hectolitres
Market share 33.9 per cent
Market position 2

Volume of Grupa Żywiec grew 3.4 per cent, and market share increased 1 per cent. Growth in beer was held back by price increases undertaken to compensate for higher input costs and by an unfavourable weather comparison, but the positive trend in off-trade continued. Mainstream brand Warka grew by double digits, and Żywiec, the national premium brand, outperformed the market. Volume of the Heineken brand was slightly down. Grupa Żywiec increased prices twice in 2008, and revenue in euro grew 18 per cent, of which half was organic growth and half the effect of positive exchange-rate movement. EBIT (beia) was also higher.

Russia

Consolidated beer volume 15.5 million hectolitres
Market share 13.7 per cent
Market position 3

The beer market was 0.6 per cent lower due to mixed weather and the effect of a rapidly declining oil price on the economy, the first fall in 11 years. Selling prices were increased significantly to pass on higher input costs and an increase in excise duty. Heineken Russia improved its market share to 15.8 per cent, driven by strong growth of premium, regional and economy beers (source: AC Nielsen), growing volume by 2.9 per cent. In particular, the Heineken brand developed well, reaching 475,000 hectolitres (+9 per cent) whilst economy brand Three Bears reached 2.5 million hectolitres (+39 per cent). Amstel Pulse and premium-priced Doctor Diesel lager achieved strong growth, but volume of Ochota was lower.

Revenue grew by double digits due to a 12 per cent price increase, but EBIT (beia) was affected by significantly higher transport and input costs, costs related to capacity expansions and a deteriorating sales mix.

The weaker rouble results in substantially higher input costs as a large part of raw and packaging materials is invoiced in euros and dollars. These increases may not be passed on in domestic selling prices and, therefore, in combination with the effect of the Weighted Average Cost of Capital (WACC), a goodwill impairment of €275 million before tax has been recognised.

Other markets in Central & Eastern Europe

Volume of Brau Holding International, our joint venture with the Schoerghuber group in Germany, was 4.3 per cent lower in a declining market. Lower volume and higher input costs affected its profitability. Our share in net profit was lower.

Heineken Romania enjoyed another good year, with the Heineken brand growing 26 per cent and single-digit growth rates for the Bucegi, Goldenbrau and Ciuc brands.

The breweries in the Czech Republic achieved excellent volume (+7.3 per cent), revenue and EBIT (beia) growth. The Heineken brand grew 15 per cent.

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