E-Malt.com News article: 2126

The Danish Brewery Group A/S (Bryggerigruppen) announced on February 3 that in 2003 it launched its V8 Strategic Plan establishing the following overall financial targets: Return on invested capital (ROIC) expected to exceed 10% in 2004; Profit margin expected to exceed 10% in 2004; Free cash flow expected to exceed DKK 200 million per year in the period 2003-2005.

The Plan was based on 8 main elements (cf. Announcement BG03/2003 of 25 February 2003) including resource optimisation, closure of the brewery in Randers, launching of Royal as a national, strong beer brand, staff development and bonus schemes, launching of Heineken in Denmark as well as increased focus on key markets.

The results achieved partly by means of the V8 Plan were as expected in 2003, and the targets established for 2004 are expected to be met.

The other part of the V8 Plan – referred to as "V8 Next" - is designed to support the financial targets established for 2004 and to further strengthen a positive development of the profitability of The Danish Brewery Group.

According to V8 Next the Royal brand will be extended to comprise two types of lager (Royal Pilsner and Royal Classic). In the long term, Royal Pilsner and Royal Classic are expected to win at least 10% of the market for lager in Denmark. Due to increasing Heineken sales in Denmark, The Danish Brewery Group will also take over the brewing of Heineken in 2004.

The Lithuanian premium brand Kalnapilis will be relaunched. The brand will have an entirely new image, a new taste and a modern design. On a total basis, this is the largest marketing investment made by the Group in Lithuania.

Marketing efforts will be strengthened in key markets and product development/new launches will be intensified. Launches in 2004 include a new taste variant of Faxe Kondi, a new variant of Vitamalt, new variants and a new design of the Nikoline series; furthermore, "Mirinda", Pepsi's international orange and lemon brand, will be introduced.

Resource optimisation through e.g. continued streamlining of product range, improvement of production planning and additional centralisation of purchasing processes. Furthermore, optimisation of the Danish supply process will be initiated in continuation of the implementation of the new storage structure. These initiatives are expected to entail a total annual optimisation potential of some DKK 15 million from 2005.

Continued focus on key markets – the Nordic countries, the Baltic countries, Italy, Germany and malt drinks in Africa and the Caribbean.


04 February, 2004