AMSTERDAM (AFX) - Heineken NV may close some of its 31 breweries in Western Europe, as part of its effort to cut costs in the region by "at least" another 50 mln eur by the end of 2007, chief executive Thony Rhuys said.
Speaking during a news conference on full-year results, he noted however, that "closure is not the only way to reduce costs" and there would be a "mixed bag of many initiatives."
The brewer will also examine the 80-90 brands it has in Western Europe for some brand portfolio pruning, although it will not be "a Unilever-type exercise" which saw the Anglo-Dutch consumer giant cut some three-quarters of its brands, added CFO Rene Hooft Graafland. "We have no intention of bringing the number back to a certain percentage."
On the additional 100 mln eur investment for 2005 in marketing initiatives, the CFO said that 50-60 pct of the amount would be real marketing expenditure, while 30 pct would be spent on packaging and the remaining 20 pct in depreciation or other capital costs.
"Our focus first of all is the Heineken brand in the US," as well as the total portfolio in Western Europe, added CEO Rhuys. With regard to possible acquisitions, on which Heineken spent 1.050 bln eur in 2004, Rhuys again declined to comment on a possible interest in Colombia-based brewer Grupo Empresarial Bavaria.
He also reiterated that its joint venture with Fraser and Neave Ltd, Heineken Asia Pacific Breweries Ltd, is in preliminary talks with GDH Ltd, the controlling shareholder of Kingway Brewery Holdings Ltd, on a possible increase of its 21 pct stake in Kingway.
"There is nothing urgent going on, we may or may not increase our stake. We're always interested in enlarging that stake if the possibility arises at a good price," the CEO said.
As to the Dutch brewer's 20 stake in Brazilian brewer Cervejarias Kaiser, Rhuys said it was "too early to say" if Heineken would raise its interest.
"We are certainly interested in the premium sector in Brazil, but (Kaiser's performance is not good. (However,) they're also a subsidiary of Molson Coors, and it's up to them what they are going to do in that market. We must allow them to make up their mind," Rhuys said.
The CEO said a possible share buyback programme was "not on the agenda" at present.
When asked about a report by a UK broker expecting him to step down from the executive board in April 2006, Rhuys said he could "certainly" not comment.
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Speaking during a news conference on full-year results, he noted however, that "closure is not the only way to reduce costs" and there would be a "mixed bag of many initiatives."
The brewer will also examine the 80-90 brands it has in Western Europe for some brand portfolio pruning, although it will not be "a Unilever-type exercise" which saw the Anglo-Dutch consumer giant cut some three-quarters of its brands, added CFO Rene Hooft Graafland. "We have no intention of bringing the number back to a certain percentage."
On the additional 100 mln eur investment for 2005 in marketing initiatives, the CFO said that 50-60 pct of the amount would be real marketing expenditure, while 30 pct would be spent on packaging and the remaining 20 pct in depreciation or other capital costs.
"Our focus first of all is the Heineken brand in the US," as well as the total portfolio in Western Europe, added CEO Rhuys. With regard to possible acquisitions, on which Heineken spent 1.050 bln eur in 2004, Rhuys again declined to comment on a possible interest in Colombia-based brewer Grupo Empresarial Bavaria.
He also reiterated that its joint venture with Fraser and Neave Ltd, Heineken Asia Pacific Breweries Ltd, is in preliminary talks with GDH Ltd, the controlling shareholder of Kingway Brewery Holdings Ltd, on a possible increase of its 21 pct stake in Kingway.
"There is nothing urgent going on, we may or may not increase our stake. We're always interested in enlarging that stake if the possibility arises at a good price," the CEO said.
As to the Dutch brewer's 20 stake in Brazilian brewer Cervejarias Kaiser, Rhuys said it was "too early to say" if Heineken would raise its interest.
"We are certainly interested in the premium sector in Brazil, but (Kaiser's performance is not good. (However,) they're also a subsidiary of Molson Coors, and it's up to them what they are going to do in that market. We must allow them to make up their mind," Rhuys said.
The CEO said a possible share buyback programme was "not on the agenda" at present.
When asked about a report by a UK broker expecting him to step down from the executive board in April 2006, Rhuys said he could "certainly" not comment.
amsterdam@afxnews.com
ls/ra
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
© 2005 AFX News
