Volume in millions of hectolitres

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(No Transcript)
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Heineken Holding NV
Global Consumer Conference Morgan Stanley New
York
3 November 2004 Jean Francois van Boxmeer,
Member Executive Board
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Agenda

• Heineken in the World Beer Market
• Heinekens Strategy
• Building Winning Brand Portfolios
• Summary

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Heineken Holding NV
Heineken in the World Beer Market
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Heineken at a Glance

• The leading brewer in Europe
• One of the top-brewers in the world by volume
  with 115 mm Hls (2003FY plus acquisitions in
  2004)
• Strong brand portfolio with Heineken, the worlds
  leading international premium beer brand(1), and
  Amstel, sitting in a portfolio of of superior
  local and international premium brands,
• Balanced global exposure A position in
  stable/low risk core markets in Western Europe
  and North America is combined with strong and
  expanding positions in high growth potential
  developing regions like South East Asia and
  Africa
• Present in over 170 countries, employs over
  60,000 people
• 2003 group net sales of 9.3B, EBITDA of 1.9B
  and EBIT of 1.4B
• Excellent top line, cash flow growth and strong
  acquisition and integration track record

(1) As defined by volumes sold outside home market
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Beer volume by brand H1 2004
Total volume 54.4 m hl
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World Beer Market
Expected Volume Growth 2003-2010
World Beer Consumption in 2003 1,471 m Hls
Africa and
Middle East
1,775
17
5
(-3)
24
USA/Canada
53
18
57
148
Western Europe
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Continuation of solid growth in international
premium beers in all regions
m Hls
1,471
Eastern Central Europe
Total
Asia/
CE
Latin
Africa ME
NorthAmerica
Western
Total
13
Pacific
Europe
America
Europe
Global
Global
2003
2010
CAGR 03-10
2
4
4
3
4
1
0
Asia Pacific
28
Source Canadean
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Profit Pool of the WorldBeer Market
18
Emerging Markets 34
30
7
4
Mature Markets 66
3
2
13
7
1
2
4
2
7
Source Heineken, estimates from investment banks
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Heineken Holding NV
Heinekens Strategy
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The Heineken Business model

• Organic Growth
• Top-line growth
• Building winning brand portfolios, focus on our
  flagship Heineken
• Innovation
• Sales and marketing excellence
• Distribution power
• Cost reduction
• Continued cost focus in all business areas
• Cash Generation
• Robust cash management

• Business Development
• Acquisitions
• Partnerships
• Focus on developing markets and the premium
  segment

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Acquisitions Partnershipsin 2003/2004

• Acquisitions
• BBAG - Central Europe
• CCU - Chile/Argentina
• Karlovacka - Croatia
• Namibian Breweries - Namibia
• Kingway Brewery - China
• Shikhan Brewery - Russia
• Volga Brewery - Russia
• Dominion Breweries - New Zealand
• Sobol Brewery - Russia
• Fürstenbergische Brauerei - Germany

• Partnerships
• FEMSA - United States
• Lion Nathan - Australia
• Diageo/Namibian Breweries - Southern Africa

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Heineken Holding NV
Building Winning Brand Portfolios
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Building winning brand portfolios

• Organic Growth
• Top-line growth
• Building winning brand portfolios, focus on our
  flagship Heineken
• Innovation
• Sales and marketing excellence
• Distribution power
• Cost reduction
• Continued cost focus in all business areas
• Cash Generation
• Robust cash management

• Business Development
• Acquisitions
• Partnerships
• Focus on developing markets the premium
  segment

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We have identified 3 focus areas for Heineken in
portfolio management
Key Themes for Heineken
OptimizingExisting Portfolios
Implement Innovation
Measuring Portfolio Performance
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A key programme for the company
Building Winning Portfolios!
via a combination of

Portfolio rationalization
Portfolio enhancement
With the appropriate level of resource allocation
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The Heineken Seven-step Portfolio Review
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We face differing portfolio issues by market
Typical Question What are the portfolio issues
which are hindering the growth of our Opco?
Key Output
Identified Portfolio Issues
Example Chile Review, 2004
Prioritized Market Opportunities

• Formulate clearer brand roles within the
  portfolio
• Competing and colluding brands within CCUs
  premium segment
• Opportunity for Refreshing beer in Standard
  Segment
• Protect the market from an attack by AMBEV/Brahma
• Increase per capita consumption

Summarized Portfolio Assessment
Innovation Strategy
Brand role classification
Resource Allocation Strategy
Implementation Plan
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Integrated segmentation enables us to identify
market opportunities
Typical Question How should we segment the
market to uncover all opportunities?
Key Output
Identified Portfolio Issues
Prioritized Market Opportunities
Summarized Portfolio Assessment
Innovation Strategy
Brand role classification
Resource Allocation Strategy
Implementation Plan
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This helps us predict and evaluate emerging
opportunities
Typical Question How interesting are the
emerging growth opportunities?
Key Output
Identified Portfolio Issues
Example Hungary
Prioritized Market Opportunities
Volume Shares () in AC Nielsen Off-Trade
Summarized Portfolio Assessment
Innovation Strategy
Brand role classification
Resource Allocation Strategy
Implementation Plan
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We systematically evaluate the relevance and
health of our existing portfolio
Typical Question How healthy is our portfolio?
Key Output
Identified Portfolio Issues
Example Chile Brand Portfolio Analysis Summary
Prioritized Market Opportunities
EvaluationStrength
Investment Analysis
Pricing Analysis
Volume/profits
Brand Equity
Brands
of brand and
Evaluation
Metrics
differentiation
Cristal
Summarized Portfolio Assessment
Escudo
Heineken
Innovation Strategy
Lemon Stones
Austral
Brand role classification
Royal Guard
Budweiser
Resource Allocation Strategy
Royal Light
Paulaner
Dorada
Implementation Plan
Kunstmann
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We have identifyied 4 major consumer trends which
drive our innovation strategy
Typical Question What are the key market
opportunities which will drive our innovation
strategy?
Key Output
Identified Portfolio Issues
Prioritized Market Opportunities
Summarized Portfolio Assessment
Innovation Strategy
Brand role classification
Resource Allocation Strategy
Implementation Plan
Source Censydiam desk research , Greece, Chile,
Spain, Netherlands