Heineken reports net profit decrease of €537 million

22/02/05 Heineken has reported a decrease in net profit of €537 million. The company blames the decrease on adverse currency movements, exceptional items, including the €190 million write-down of the investment in Kaiser and a higher amortisation charge of goodwill. Reported net profit (BEIA)3, decreased to €791 million, reflecting a negative exchange rate effect of €99 million, predominantly from the US dollar. The company said that cost reductions and improvements in efficiency through an organic reduction in FTEs of 2.0% and the closure of 6 breweries.

The world’s third largest brewer reported that full year results, which included an 8.1% organic net profit growth, an increase of €65 million were ahead of its forecast and market expectations. Sales of Heineken beer in the premium segment increased by 4.1% to 19.2 million hectoliters and the brand improved its market share in virtually all major markets. The Heineken brand grew to 22.8 million hectoliters. In the US, Heineken sales volumes rose by 5% to 5.5 million hectoliters.

Chairman of the Board Thomas Ruys said that the company will maintain its rigorous capital discipline and business-wide focus on cost-reduction, and will further reduce its cost base in Western Europe by at least another €50 million by the end of 2007. Ruys said that in 2005 Heineken will invest an additional €100 million in innovation and high-impact, aggressive marketing programs in order to reinforce the Heineken brand equity in the USA, to further improve volumes and sales mix and to address the changing consumer dynamics in Western Europe.