2018 ANNUAL REPORT 3 Contents Foreword from the Managing Director 4 Financial results 6 Five year consolidated key figures 8 Developments in the Finance department 10 Optimization of communication in Supply Chain 12 More collaboration in and with commerce team 14 The people behind the products 16 Management team 18 Supervisory Board 19 Report from the Supervisory Board 20 Brewing a better Suriname 22 Sustainable development 24 Sustainability report 27 Voluntary work for the elderly 28 2018 financial statements 31 Consolidated balance sheet at 31 December 32 Consolidated income statement 33 A proud history Consolidated summary of changes in equity 34 Consolidated cash flow statement 35 The roots of Surinaamse Brouwerij N.V. lie in the Dutch province of Zeeland, where brothers Piet Notes to the consolidated financial statements 36 and Arthur Dumoleyn made the decision in around 1950 to continue their beer-brewing activities Notes to the consolidated balance sheet 42 in Suriname. Notes to the consolidated income statement 49 Company balance sheet at 31 December 52 Suriname, which was a Dutch colony Hence Surinaamse Brouwerij was Surinaamse Brouwerij brews, Company income statement 53 at the time, did not have its own one of the first breweries in South produces, sells and distributes brewery. The brewery was officially and North America to achieve both PARBO Bier, PARBO Chiller, PARBO Other information opened in October 1955 by His the ISO and the HACCP certificate. Radler 2.0% and PARBO Radler Other information 56 Royal Highness Prince Bernhard Nowadays Surinaamse Brouwerij 0.0% for the Surinamese market. Independent auditor’s report 58 (later the Queen’s Consort). At the strives to produce and sell beer that Surinaamse Brouwerij also exports Credits 63 end of December 1955 the company meets international standards. PARBO Bier, PARBO Chiller and produced the first PARBO BIER. PARBO Radler 2.0% to a selection One shareholder right from the start The strategy is aimed at achieving of countries. The company imports was the Amstel brewery, which was profitable and sustainable growth in and distributes the products acquired by HEINEKEN in 1968. order to strengthen the position of Heineken®, Desperados, Sol, the business. Surinaamse Brouwerij Vitamalt and Royal Club in Suriname The Surinamese beer was of is thereby seeking an optimum through its subsidiary. excellent quality right from the return for the shareholders, start, as is evidenced by the award consistent satisfaction amongst of the Prix d’Excellence in 1958 customers and consumers, during the World Beer Fair in Ghent, optimum welfare for employees Belgium. Quality has always played and socially responsible business an important role in the company’s practices and engagement. strategy, and still does to this day. SURINAAMSE BROUWERIJ N.V. 2018 ANNUAL REPORT 4 5 Partly in view of the economic Another project is the rebuilding projects took place. Foreword from the Managing Director situation we had to review our aforementioned introduction of the The old brewhouse has now been strategy and identify where HEINEKEN Leadership Expectations. completely decommissioned, and Going from good to GREAT with Surinaamse Brouwerij. For Surinaamse Brouwerij, 2018 was improvement was necessary and The expansion of our Route to after fine-tuning of the new brewing particularly focused on introducing the new strategy ‘From good to GREAT’ and the successful possible. The entire Leadership Market project (construction of equipment the beer from the new implementation of this concept across the company at all levels of our organization. Team therefore developed a new waterside sales outlets in the brewhouse tastes excellent! The strategy forms the basis for the development and successful execution of various projects, mission and vision, to which a interior) should also be included in as a result of which we have been able to achieve good results in the ongoing challenging strategy called ‘From good to GREAT’ this list of successful projects. We 2019 will particularly macroeconomic climate. was then linked which sets out how built a number of very attractive be characterized by the we will realize the vision. additional Parbo sales outlets in implementation of the new BASE In summary, the strategy is based 2018, including at Atjoni, Nickerie operational business system, We are particularly proud of the In terms of the commercial results, be achieved. In terms of volume on four pillars: engage and develop and Zanderij airport. a standard way of working for fact that 2018 was an accident-free it can be stated that Surinaamse we sold 1.1% less than last year, people, deliver top line growth, We also launched a substantial HEINEKEN which will be the same year. Although an accident-free Brouwerij achieved a solid partly as a result of the euro crisis, drive E2E performance and finally number of new products this year, around the globe. year is always something to be performance. Revenue grew again the continuing poor economy and “brewing” a better Suriname. including Radler Ginger and Cherry, The implementation of the proud of, it can be considered a compared to the preceding year, the long rainy season. It is worth Radler 0.0% Cherry and Lime, the ‘From good to GREAT’ strategy particularly impressive achievement although we unfortunately did mentioning the extra hard work The implementation of the new Parbo 33cl and 50cl can six pack and will continue with new projects, this year since we had a higher not achieve the minimum targets performed by all the departments strategy also introduced a new way Royal Club soft drinks. the further segmentation of our than usual number of construction in this regard despite our joint in the last three months of the year of working. The focus was thereby All this was accompanied by various customers with specific sales and rebuilding projects. This meant efforts. One plus point is that our which enabled us to make up a lot on modern leadership: a different promotional and marketing events, terms for each channel, and the that the risk of accidents was performance in terms of operational of the shortfall. way of managing whereby staff with the highlight being that innovation and introduction of considerably higher than in previous profit was better, and we achieved on the shopfloor are expected to - in my opinion - we had the best new products to grow our business years. Despite this, our constant our target in this regard. Our cash take more responsibility whilst also stand at the annual trade fair. We further. focus on the importance of safety flow finished the year between the being empowered to make certain successfully completed two ISO led to this good result. target and the maximum result to decisions themselves. All this is audits, and also underwent the We need each other to have a based on HEINEKEN’s Leadership HEINEKEN Global Supply Chain successful year and achieve our Expectations - the behavior we Audit after 10 years, which we targets, and I trust that we will expect from our managers. passed successfully. realize this by helping one another to be successful. We have completed many Another successful project in 2018 successful projects on the basis was the introduction of the Refuel of the four pillars of the strategy. for Growth cost-saving program, E.H. Weggemans In the context of the new way which was intended to provide of working we have encouraged insight into our expenditure and all the brewery’s employees to create a better negotiating position lead a project or activity or to vis-a-vis suppliers, amongst other participate in a project as part of a things. This led to a significant cost Managing Director multidisciplinary project team. saving. Paramaribo, 14 May 2019 One of these projects is the introduction of a KPI house: The organization also again a system whereby the key underwent various changes in performance indicators for 2018, including the merger of the the various departments are Sales and Marketing departments transparently harmonized, so that into one Commerce department. we no longer have any conflicting We also built a new brewhouse targets between departments. and a number of new warehouses, and a large number of other SURINAAMSE BROUWERIJ N.V. 2018 ANNUAL REPORT 6 7 Financial results pension costs by 31%, agency costs R by 85% and a reduction in the cost Volume growth Revenue growth Growth of operating Growth of net result of expats by 13%, partly as a result result of a change in the organizational -1.1% 9.3% 16.2% 24.3% structure of the Commerce +16.2% department. +24.3% 131,8 113,4 The consolidated depreciation fell 2017 2018 2017 2018 by 5%, which is mainly the result of the accelerated depreciation resulting from reducing the lifespan of the 1 liter returnable bottle from 7 to 3 years in 2017. Real Gross National Product The total cost of raw materials, In line with our investment increased by 1.7 percent in 2017, consumables and services has risen program we spent SRD 70 million whilst 2018 saw a growth of by SRD 8.5 million (+5%), mainly as on - amongst other things - safer 2 percent. a result of an increase in the cost of operation in the production The reduction in the financial raw materials, packaging materials environment, expanding our expenses is influenced by the Although the USD/SRD exchange and imported products by warehouses, the installation of reduction in the exchange rate rate was stable - as in 2017 - at SRD 7.5 million and the other a new brewhouse which was results by 96% combined with a SRD 7.52, the average annual expenses by SRD 2.4 million. completed in November 2018, rise in the interest costs (+63%) as a exchange rate of the EUR compared We were able to partly mitigate replacing part of the machinery result of a EUR 8 million loan taken to 2017 rose by 4.2% from the impact of the rise in the EUR and vehicle fleet, packaging and out in September 2017 for the new SRD 8.524 to SRD 8.882.