Heineken’s organic net revenue rises 5.6% amid rising input costs

NETHERLANDS – The world’s second largest brewer, Heineken NV has reported 5.6% growth in organic net revenue in the first half, with rising input costs offsetting beer sales.

The company which has maintained its full year profit growth profit, recorded 0.3% growth in operating profit, missing estimates by analysts.

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For the full year, the company expects anticipate operating profit to grow by mid-single digit on an organic basis.

Operating profit was offset by input cost inflation, while the company continued to invest in e-commerce and technology upgrades.

Heineken expanded in the Asian market with a US$3.1 billion partnership with China Resources Beer.

“Top-line performance was again strong in the first half of 2019, with organic net revenue growth across all regions and double-digit growth in Asia Pacific as well as Africa, Middle East and Eastern Europe,” said Jean-François van Boxmeer, Chairman and CEO.

“Revenue per hectolitre increased 3%, while volume growth in the second quarter was negatively impacted by weather in Europe and World Cup comparables from last year.

“The Heineken® brand grew by 6.9%, with Heineken® 0.0 now available in 51 markets.”

During the period, consolidated beer volume grew 3.1% while in the second quarter, this was up 2.1%, with Asia Pacific accelerating to double digit growth.

In Europe the quarter was off to a good start in April given the timing of Easter but was later dampened by bad weather and a challenging comparable.

Heineken® beer volume increased 6.9% organically over the first half, with double digit growth in Brazil, Mexico, South Africa, Russia, Nigeria, UK, Portugal, Germany and Romania.

The international brand portfolio grew high-single digit, driven by the double-digit growth of Tiger and Amstel.

Cider volume rose 2.1% organically to 2.6 million hectolitres with strong growth in South Africa, Russia, Vietnam and Spain.

In the low and no alcohol segment, Heineken® 0.0 among other 48 non-alcoholic brands, led the category.

Malt volumes in Nigeria grew high-single digit, Affligem under the Craft & Variety grew double digit driven by France and the Netherlands.

Lagunitas is now available in more than 25 markets with an encouraging performance.

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