Desarrollando las Comunidades

Nico Nusmeier,

President Heineken Central and Eastern Europe

Revenue €3.4 billion EBIT €339.2 million EBIT (BEIA) €364.3 million

Consolidated beer volume 46.9 million hectolitres Heineken group volume 2.2 million hectolitres

Increasing popularity Central and Eastern Europe is Heineken’s largest region by volume and has huge growth potential. Many markets are benefi ting from a growing European Union. In addition, the Heineken brand is benefi ting from the increased popularity of premium beers.

In 2006, we optimised our brand portfolio to create a winning portfolio that would give us an advantage in the Russian market. We reduced our portfolio from 36 to 23 brands, including the brands we produce under licence, and developed a strong premium brand offering. Nine of the brands in our optimised portfolio are top international premium beers, nine are regional and fi ve are national brands.

The mainstream beer brands Ochota, and premium brand Zlaty Bazant are performing very well. Ochota in particular was a big success in 2006 and its volume grew to more than 3 million hectolitres.

The positioning of the brands in our portfolio is reported as indicated below.

Russia

In Germany the soccer World Cup drove beer consumption up, especially in the fi rst half and our joint venture Brau Holding International outperformed the market.

In Russia an exceptionally strong third quarter, coupled with the success of our portfolio optimisation, led to volumes of 13 million hectolitres.

Beer sold in plastic PET bottles has grown so rapidly that it now represents more than 40 per cent of consumption in some countries in the region. To capitalise on this trend, we rolled out new products in this packaging. One example of this is the new TopStar®, a high-quality PET bottle, which has been used for Goldenbrau® and Zagorka®.

Russia is now our largest operation by volume, while we are the strong third player in the market with a share of 13.2 per cent. We are targeting a market share of 20 per cent in fi ve to six years time.

Russian portfolio:

Poland

Consolidated beer volume 11.0 million hectolitres

Market share 33.6 per cent

Market position 2

The Polish beer market enjoyed another positive year, up 6.4 per cent. Grupa Z˙ywiec performed very well, with volumes rising more than 8 per cent and growth in all brands.

Z˙ywiec, Poland’s leading national premium brand, reached 2.7 million hectolitres, which represents an 8.3 per cent growth. Warka® Jasne Pelne, our mainstream brand, enjoyed a 25 per cent growth. The Heineken brand had a good year too, up 14.7 per cent, confi rming its leadership in the international premium segment.

Revenues were ahead of last year, driven by the strong volumes and a better sales mix. Costs related to the brewery closure at Bydgoszcz at the end of 2006 and other Fit2Fight-related costs hit EBIT, which was slightly down on last year. EBIT was also affected by changes in package and channel mix.

In December Grupa Z˙ywiec completed a buy back of 5.3 per cent of its outstanding shares. Germany

Consolidated beer volume 3.6 million hectolitres

Market position 4

The German beer market improved in 2006, after several years of decline, thanks to the World Cup soccer competition hosted there and favourable weather conditions in the fi rst half of the year. BrauHolding International, our joint venture with the Schorghuber Group, increased its volume organically. In particular the speciality beer, Paulaner® Weissbier, recorded a good year with a volume growth of 14.2 per cent, in part driven by exports. BrauHolding International became the leader in the ‘weiss’ beer segment. Russia

Consolidated beer volume 13.0 million hectolitres

Market share 13.2 per cent

Market position 3

The market developed very positively in 2006, thanks to economic conditions, good weather and an exceptional trading environment in the third quarter. Our volumes grew well, both organically and through the fi rst-time consolidation of Ivan Taranov. Volumes reached 13 million hectolitres. Volumes grew across the portfolio, with the Heineken brand up by more than 30 per cent, and Ochota, our leading mainstream brand, up by 26 per cent. We also recorded strong growth in the premium portfolio, with Zlaty Bazant®, Amstel Pulse, Bitburger®, Guinness® and Bud®, |as well as with the recently acquired mainstream brands. Three Bears®. Bochkarov® volumes were lower.

Heineken Russia’s revenues doubled as a result of fi rst-time consolidations, volume and price growth. EBIT increased as well, mostly because of the fi rst-time consolidation. The increase of our sales and marketing investment and integration costs limited organic growth. Amstel Pulse, introduced at the end of 2005, recorded high sales and positive consumer appreciation.

In 2006 we focussed on the integration of the recently acquired brewers and development of the existing business: we completed the fi rst brand portfolio review, identifying 14 key strategic brands and 9 top premium brands. We also completed the production allocation study of the 10 breweries and defi ned our distribution strategy. We introduced several new products and packages, mostly new PET, with good consumer response.

Volumes in economy brands fell substantially, resulting in slightly lower EBIT.

Austria

Consolidated beer volume 4.5 million hectolitres

Market share 50 per cent

Market position 1

In 2006 we carried out an extensive brand portfolio optimisation programme, which resulted in a marketing focus on key brands and price increases. Related volume decline was limited to the Zipfer® and Gösser® brands but Puntigamer® and Kaiser® showed single-digit growth and the Heineken brand grew by over 34 per cent from a low base.

EBIT grew substantially also thanks to stringent cost control, especially in fi xed costs.

Better pricing and sales mix compensated for some volume pressure. The on-trade market remains challenging.

Pago, our fruit juice operation, grew slightly in volume terms and the turnaround is proceeding according to expectations.

Greece

Consolidated beer volume 3.3 million hectolitres

Market share 82.1 per cent

Market position 1

The Greek beer market grew thanks to better summer weather and increased tourism. Volumes grew healthily.

Revenues rose, driven by a price increase of 3.5 per cent executed in March and the good volumes. Volumes in the on-trade outperformed, improving the mix and profi tability. EBIT increased at a double-digit rate, helped by reductions in fi xed costs and a better allocated marketing budget.

The Heineken brand grew 6 per cent and Amstel volumes were stable. We launched Amstel Pulse in the second half of the year.

Greece was one of the fi rst countries to enjoy the roll-out of sub-zero coolers that allow beer to be served at a temperature below zero degrees Celsius, in both the off- and on-trade. Other markets in Central and Eastern Europe Brau Union Romania recorded a very strong performance, in both volume and profi t. Volumes grew by 20 per cent, surpassing 4 million hectolitres. The performance was driven mainly by the Goldenbrau and Bucegi® brands, which underwent re-styling, with new packaging. A new seasonal beer of the Ciuc® brand, Ciuc® Winter, was introduced at year-end.

In Hungary, trading conditions remained challenging as a result of intense competition, cheap German imports and a sluggish economy. Nevertheless, Heineken Hungary volumes were slightly up, with an excellent 8 per cent growth in the Heineken brand. EBIT grew signifi cantly due to a better sales mix and improved cost control. The Bulgarian market rebounced from the effects of the excise duty increases in 2005. We enjoyed 9 per cent volume growth, which translated to an improvement in EBIT. The returnable version of the BeerTender was introduced in December.

2002 2003 2004 2005

2006

Consolidated beer volume

In millions of hectolitres 7.9 10.1 11.5 11.8 13.2

The Americas is one of our most profi table regions. The position of the Heineken brand is strong and was further bolstered by the successful launch of Heineken Premium Light, the success of the FEMSA portfolio in the USA and by a strong performance in Latin America.

The Americas reported robust revenue growth of 14 per cent. All major markets in the region developed well. The USA, Canada, Chile and Argentina all turned in strong volume growth, up 12 per cent.

The Heineken brand grew 17 per cent to 8.6 million hectolitres, supported by the growth in the USA and the excellent performance in Canada and Chile.

In the USA, the Heineken brand grew by over 1 million hectolitres, the biggest jump ever. The introduction of Heineken Premium Light in the USA met with resounding success, selling 680,000 hectolitres since its launch in March and helping to lift the growth rate of Heineken Lager. In Canada, Heineken brand volumes enjoyed double-digit growth, reaching 0.4 million hectolitres, benefi ting from the sterling efforts of our partner, Molson Coors.

Despite the high marketing investment in Heineken Premium Light, the higher costs of packaging and overall supply-chain costs, the region’s EBIT was slightly up. This is due to the increased volume and better pricing achieved across the region. Fluctuations in exchange rate had a slightly negative effect at net-profi t line.

Americas

“ The Americas contributed almost