HUNGARYHUNGARY

Gyula Bognár

2

Dreher SörgyárakSAB

Soproni SörgyárBrau Hungaria

Pécsi SerfőzdeOttakringer

Borsodi Sörgyár Interbrew

Dreher SörgyárakSAB

Martfűi SörgyárBrau Hungaria

Amstel SörgyárHeineken

Hungary

Interbrew -from regionalto national player

Territory: 93 th sqkmPopulation: 10 million

Very competitive market with 3 big players

3

Hungarian economy

0,0

50,0

100,0

150,0

200,0

250,0

300,0

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Excha nge ra te (HUF/€)

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

%

Infla tion ra te (CPI)

-15,0

-10,0

-5,0

0,0

5,0

10,0

15,0

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Re a l incom e growth (%)

Excise duty

010002000300040005000

1998 1999 2000 2001 2002 2003 200405101520

HUF/hl €/hl

4

Hungarian Beer Market Evolution

Beer Market

6 000

6 500

7 000

7 500

8 000

96 97 98 99 00 01 02 03

65,0

70,0

75,0

80,0

Total volume Litre / capita

Packaging mix

0%

20%

40%

60%

80%

100%

2 000 2 001 2 002 2 003

Re turnable bottle KEG Can PET

Channel evolution

0 20 40 60 80 100

2003

1991

Orga nis e d Re ta il Unorga nis e d Re ta il On-tra de

5

ITW Hungary

Market Share % (on 12 months basis)

0

5

10

15

20

25

30

35

40

1998

1999

2000

2001

2002

2003

2004

Mar

ch

ITW Hungary

SAB

BRAU

Amstel

Pécs

Heineken

Volume thhl

1 5001 6001 7001 8001 9002 0002 1002 2002 3002 400

1998 1999 2000 2001 2002 2003

MS in packaging segments

23%

28%

33%

38%

43%

2000 2001 2002 2003

Returnable bottles Kegs / cistern Cans

CAGR:4,0%

6

NNS

Superior, Consistent Growth

EBIT

0 , 0 0

2 0 , 0 0

4 0 , 0 0

6 0 , 0 0

8 0 , 0 0

1 0 0 , 0 0

1 2 0 , 0 0

1 4 0 , 0 0

1998 1999 2000 2001 2002 2003 1998 1999 2000 2001 2002 2003

CAGR:20,6%

CAGR:29,5%

7

Focused brand portfolio

8

Borsodi Sör - regional rural brand �

nationwide respected brand

0

10

20

30

40

50

60

70

80

90

100

1996 1997 1998 1999 2000 2001 2002

East West Central

0

1

2

3

4

5

6

7

8

9

1996 1997 1998 1999 2000 2001 2002

Awerness Liking

First in NRW botttleFirst in canFirst in big bottleFirst in PET

Line extension:First non alcoholic, fist amber beer and first strong core

Borsodi family MS in CORE segment

39,0%

40,0%

41,0%

42,0%

43,0%

44,0%

45,0%

1998 1999 2000 2001 2002 2003

9

Global superpremium brands

Launch Stella Artois in 1998

Stella Artois N.A. in 2001

Beck’s in 2003, brewing in Hungary 2004

Stella Artois in embossed bottle & Q-pack in 2004

ITW MS in PREMIUM segment

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

1997 1998 1999 2000 2001 2002 2003

10

Long term partnership program

Number of WHS (pcs )

0

20

40

60

80

100

120

2001 2003

Volume of WHS (thHL)

1 000

1 100

1 200

1 300

1 400

1 500

1 600

2001 2003

Wholesalers in the past:Loss makerBasic distributor onlyWeak knowledgeCompeting with each and other

Wholesaler after DIEXProfitable Professional

DIEXHelp the partner:

Improve profitability with increasing sales volumeBest practice sharingDevelop special integrated IT systemCOSERV- creating purchasing association

HL/WHS (thHL)

0

5

10

15

20

25

2001 2003

11

Cost saving and effectiveness

‘

Cost savings

0

2

4

6

8

10

12

14

16

18

20

1996 1997 1998 1999 2000 2001 2002 2003

Heat Losses Electricity Water

Overall productivity

00,5

11,5

22,5

33,5

1995 1996 1997 1998 1999 2000 2001 2002 2003th

hl/e

mpl

oyee

e

12

Key challenges in Hungary

� EU accession• New competitors with cheap products• Environmental law

� Three strong players on the beer market

� Unforseen quick changes in macroeconomy (inflation / devaluation/taxation)

� Modern retail expansion

� More expensive labour costs / energy costs