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Interbrew

Interbrew is one of the oldest beer companies in the world, and the newest global brewer. A public company based in Belgium, Interbrew has brewing operations in 20 countries – across the Americas, Western Europe, and emerging market groups.

In the Americas we have subsidiaries in Canada, Cuba and the United States, and a 30% shareholding in Mexico. In Western Europe we have subsidiaries in Belgium, France, the Netherlands, the UK and Luxembourg, and licence agreements in Italy and Sweden. In Central Europe we have subsidiaries in Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Montenegro and Romania. In Eastern Europe we have a joint venture in Russia and Ukraine. In Asia Pacific we have subsidiaries in Korea and in China, licence agreements in Australia and New Zealand, and a regional sales office in Singapore. In total, Interbrew's beers are sold in more than 110 countries.
Our strength is our brand portfolio – the global brand Stella Artois, the international specialties Hoegaarden, Leffe, Bass ale and Belle-Vue, and the local brands such as Jupiler, Labatt Blue, OB Lager, Ozujsko, Klinkskoye, etc which give us a number one or number two position in almost every market where we operate. Interbrew is the World's Local Brewer©.
Interbrew has an unmatched record for growth. Between 1995 and 1999 we doubled our business, increasing volumes from 26m to 55.7m hectolitres. None the less, we believe that acquisition is less about scale, more about scope. We grow not by adding more business, but by adding businesses that can themselves be grown. We see organic growth as the implicit outcome of external growth, its justification
and true goal.
After we acquire a company, we bring in the new initiatives and investments that help turn a business for sale into a business that is loved. But expertise is as important as spend. Money is relevantly applied. There is discipline in seeking a return.
Built into the way we operate is the requirement to grow the return on invested capital, post acquisition. Our philosophy is to reward management only for superior business performance, for organic EBIT growth. If ROIC goes up, top managers get a bigger bonus. If it goes down, the bonus is cut.
Our overall return of 10.4% in 1999 perhaps looked poor against the best international performance, but that overall figure hid the real story. Nearly half our invested capital, 41%, related to recent acquisitions in Korea and Eastern Europe. These showed only marginal returns in the initial phase. We expect to grow them, based on our track record in the rest of our geography. Returns on invested capital from 1996 to 1999 were pushed up everywhere: in the Americas from 12.5% to
17.9%; in Central Europe from 13.3% to 20.1%; in Western Europe from 19.6% to 25.1%. The results where we have been longest are as good as the best in the business.
Because we have been able to consistently improve our returns, we have created a double benefit – a good top line and an even better bottom line. The figures for compound growth from 1992 to 1999 speak for themselves – volumes +12.5%, EBITDA + 21.4%. net profit +31.4%. And all that is before Korea, Russia and Ukraine come into their own



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