Rouble trouble

Unfortunately, you have to be a rocket scientist to work out Scottish & Newcastle’s piece of financial maths: Commenting on BBH’s first quarter 2003 results, S&N argues: For the period the rouble depreciated by 3% against the US dollar (against the same period in 2002) and by 20% against the euro during the same period. Due to these variations overall sales increased by 4% in dollar terms and fell by 15% in euros.
Sales during the first quarter fell 15% to EUR216 million, EBITDA plummeted even lower (-37%) to EUR50 million while the operating profit nosedived (-51%) to EUR29 million. However, there is an explanation for all this. According to S&N, the first quarter, due to the winter weather, was always the low season for beer sales throughout BBH’s areas of operation. How true.5%..

All under one roof

In May 2003, Scottish & Newcastle plc (S&N) confirmed the acquisition of the full control of Sociedade Central de Cervejas (Centralcer), the Portuguese brewer and distributor. S&N had entered the Portuguese market in 2000, buying a 49% stake in the holding Centralcontrol, which controlled 100% of Centralcer, Portugal’s second largest brewer. The remaining 51% stake was held by VTR SGPS SA, a holding company for the interests of Banco Espirito Santo, Parfil, Fundaçao Bissaya Barreto, Olinveste and STDP. The total net cash consideration that will be payable on completion by S&N for these transactions is EUR342 million. S&N will also consolidate approximately EUR 157 million of debt relating to the two businesses (although EUR70 million of this relates to S&N’s existing 49% investment).2% p..

Peroni sold to SABMiller

And another one’s gone. Talk about Italian brewers of some size and distinction and you’ll have to resort to the singular now that Peroni has been sold to SABMiller. The only remaining Italian brewer is the family-owned Forst brewery, located near Bolzano in the far north of Italy.
Why Peroni was put up for sale, your guess is as good as ours. Some might suggest changes in market structure. After all, Heineken managed to capture the market leadership from Peroni with the result that in 2002 Peroni had a beer output of 4.4 million hl and a market share of 25% while Heineken Italia controlled 35% of the market. Just think of it, all of this happened against a backdrop of rising beer consumption (17 m hl in 2002; 29 l per capita).6 times EBITDA in 2002.8 million..

The final plagues

Oh dear. Why did not somebody warn them of the power of symbolism. In its first quarter 2003 statement, Carlsberg gives seven reasons for its underperformance that one can’t help thinking of the end of the world, or rather how the seven angels having the seven last plagues bring about the end of the world in the Book of Revelation.
For the first quarter 2003 Carlsberg reported an EBITA (operating profit) of DKK 18 million versus DKK 440 million in 2002. Sales were also below
expectations: the Danish brewer announced sales of DKK6,855 million against DKK7,572 million in the previous year. In Western Europe, Q1 EBITA was DKK157 million below last year (Q1 2002: DKK139 million) on sales down 6% to DKK5.3 billion.3bn.
Some things must have gone quite wrong for Carlsberg..

Strategic advantages

The combination of Heineken and BBAG offers an excellent platform for further growth. In 8 of the 13 countries in this region (namely; Austria, Poland, Hungary, Romania, Bulgaria, Slovakia, Macedonia and Albania) Heineken will be market leader.
Moreover, Heineken will have a number two position in Croatia, a strong regional foothold in the Czech Republic and a valuable export position in the remaining other three countries of the region (Serbia-Montenegro, Slovenia and Bosnia-Herzegovina).
The deal also means that S&N and Carlsberg are effectively shut out from Central Europe and that SABMiller’s as well as Interbrew’s earnings in this region are now dependent on organic growth, cost cutting, and/or small piecemeal deals.
Based on the transaction value of EUR1.2 times.5..

Heineken to buy BBAG

Some wouldn’t, other couldn’t. In the end, Heineken clinched a deal with the representatives of the shareholders of Getränke-Beteiligungs-AG ("GeBAG") to be in a position to acquire a majority stake in BBAG Öster-reichische Brau-Beteiligungs-Aktiengesellschaft ("BBAG"), the leading Austria based brewery group which controls 14.1% of the central European beer market.
Add to that Heineken’s share and the new Brau Union will have 27% of the regional market with a total volume of 26 million hl. Overall beer consumption in Central Europe in 2002 was 92 million hl which is 7% of the global total.
When BBAG announced in January that it was up for sale, the "usual suspects" were rumoured to take part in the auction. Ultimately, all except one had to walk away again empty handed..

Focus on new plants: Gräfl. von Moy’sches Hofbrauhaus Freising GmbH, Freising Hose-free zone in the fermenting hall and storage cellar - a modernisation measure

In many instances, it is more difficult to modernise a brewery located in a listed building step by step during ongoing production than it is to build a new plant. Taking Hofbrauhaus Freising as an example, a tradition-conscious medium-sized private brewery meantime within the Graf Toerring Group, a cost-effective solution for modernisation is described, with fixed pipework in vertical pipe rack design.

The following objectives were set when deciding on the investment package: maintenance of a consistent high beer quality by automated and thus reproducible processes between brewhouse and filtration, in conjunction with a capacity increase to 180,000 hl/a of "weißbier" and 100,000 hl/a of bottom fermented beers.
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Focus on new plants: Murphy’s brewery, Cork, Ireland Flexibility is the key Murphy’s Brewery, Cork, goes for innovative keg technology

No question about it - every Irishman knows Murphy’s. A beer which is as Irish as the rugged countryside, the pubs and Irish hospitality. And that for over 140 years. It was that long ago that James Murphy established Murphy’s Brewery in Cork.

Production began on premises previously used as a hospital, giving a new slant to the connection between beer and health frequently referred to nowadays. Heineken took over in 1983. The result - big investment and strong growth rates. Right up to the present day.

Out into the world
Murphy’s Irish Stout, the beer of the Irish, has made a name for itself worldwide since then. It has become a household name in the US, Europe, Africa, the Middle East and even in Australia and New Zealand. A real piece of Ireland.
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Virtual deals

Once upon a time there were only good deals and bad deals. Now there are also virtual deals. Just think of Hugh Osmond, a 41 year old Briton with an eye for opportunity, who attempted to take over Six Continents, a troubled hotel and pub giant in February. For several weeks he grabbed newspaper headlines as he thought aloud what he would do if Six Continents’ shareholders decided to sell the group to him lock stock and barrel. That way he virtually tried to prevent the world’s biggest hotels and pub group from splitting into two - the proposed solution by Six C’s boss Tim Clarke and his management to produce shareholder value.
Behind Six Continents lie years of appalling performance. Compared with its peers it has done badly.6 billion.
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Exploring export markets

Baltika, Russia’s largest brewer, which is owned by Baltic Beverages Holding, is eyeing up the Chinese market. With the Russian beer market destined to flatten out in a few years’ time, Baltika decided to explore export opportunities for continued growth. In April, Baltika opened the Khabarovsk brewery, which is located in Russia’s far east, north of Vladivostok. The region itself represents a market of 10 million consumers. But the Chinese region south of Vladivostok is home to 120 million residents. The Khabarovsk brewery has a capacity of 10 million hl beer annually and cost US$ 50 million to build, it was reported.