Heineken Annual Report & Accounts 2008

Heineken further strengthened its leadership in the region through bolt-on acquisitions and organic growth.

Volume was 8.8 per cent higher, thanks to the first-time consolidation of breweries acquired in Belarus, Romania, Serbia and the Czech Republic, which added 3 million hectolitres of beer. Organic growth in volume was 2.3 per cent, mainly driven by Russia, Poland, Slovakia, Austria and Croatia. Volume growth slowed in the second half of the year due to the more challenging economic conditions and the impact of higher selling prices. In particular, the higher margin mainstream segment was affected, leading to an unfavourable effect on average margins.

Volume of the Heineken brand grew 170,000 hectolitres (+6.6 per cent), thanks to the successful roll-out of the Extra Cold beer programme, combined with new commercial programmes and the introduction of clear plastic labels. The brand grew in almost every country, with Greece, Russia and Romania generating 71 per cent of the total increase. Revenue grew 14 per cent, of which 8.7 per cent was organic growth, mainly driven by better pricing. A positive currency impact, mostly from the Polish Zloty and the Czech Koruna, contributed 1.7 per cent, whilst first-time consolidation added the remaining 3.9 per cent. EBIT (beia) was 6.6 per cent lower due to the effect of lower volume in the mainstream segment, significant higher input costs and the depreciation cost of new capacity, which was only partially offset by higher selling prices.