Dear Shareholder,
The year 2003 was a memorable year for Quinsa and I appreciate you taking the time to understand your Company better. The improvements from 2002 to 2003 were the result of several factors which will be explained thoroughly in my letter to you.

Sales revenues increased from US$ 470.2 million for the year 2002 to US$ 622.7 million in 2003 while we had an outstanding performance in terms of market share and volumes in the various countries where we operate. As a result, I am very pleased to report Earnings Before Interest,Taxes, Depreciation and Amortisation (“EBITDA”) for the year 2003 of US$ 210.1 million. This is more than double what it was in 2002, and only 10% below levels prior to the devaluation in Argentina. EBITDA margin for the year 2003 was 33.7%, and is in fact an all-time record for the Company. Net income was US$ 36.8 million, compared to a loss of US$ 135.9 million in the previous year. This remarkable performance was, I believe, the result of many months of hard work and focused efforts from everyone at Quinsa, all of which have finally paid off as the business environment stabilised.


The results obtained are to be highlighted, since they include only a part of the benefits from the transaction with AmBev.
Over a year ago, as we moved into 2003, the Company’s management faced three major business challenges: the first of these was the full absorption of the former AmBev businesses in Argentina, Paraguay and Uruguay, a second challenge was completing a full merger of the beer and soft drinks businesses in Argentina, and the third area we had to focus on was the restructuring of all functional lines of management and reporting systems across all markets.

Let me review our achievements in each ofthese areas:



The combination of our business with AmBev’s has proved to be a huge success. When we started off we were facing two completely separate organisations, with different sales and distribution systems, different cost structures and, significantly, very different corporate cultures. Today we are looking at a single, completely integrated company. In between these two stages we had to complete a daunting number of intermediate steps and projects. We are extremely satisfied with the smoothness with which this process was completed. The speed at which cost and revenue synergies were implemented in Argentina, Paraguay and Uruguay was extraordinary.