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Heineken Q1 Profit Climbs, Backs FY22 Margin View; Stock Up

heineken apr20 lt

Shares of Heineken NV were gaining more than 4 percent in Amsterdam trading after the Dutch brewer reported Wednesday higher first-quarter profit with increased volume in all regions, mainly Europe.

Looking ahead for fiscal 2022, the company maintained its outlook of a stable to modest sequential improvement in operating profit margin (beia).

The company said it will take additional actions including pricing as the war in Ukraine has brought additional uncertainty to the global economic outlook and commodity markets.

Mounting inflationary pressures are expected to impact household disposable income and a consequent risk to beer consumption later in the year. The company noted that further cost pressures are emerging from rising input costs, supply chain challenges, and from its decision to leave Russia, though there is benefit from hedges taken in 2021.

Dolf van den Brink, Chairman of the Executive Board / CEO, said, "We had a solid start to the year, in line with our expectations, especially benefitting from strong channel mix from the partial on-trade recovery of Europe and assertive pricing across all regions.... Looking ahead, we see more macroeconomic uncertainty and expect significant additional inflationary headwinds putting further pressure on our cost base."

For the first quarter, net profit was 417 million euros, higher than last year's 168 million euros.

Revenue for the first quarter was 7 billion euros, up 35.9 percent from 5.15 billion euros a year ago. Net revenue was 5.75 billion euros, a growth of 24.9 percent organically. Total consolidated volume growth was 5.7 percent and net revenue (beia) per hectolitre was up 18.3 percent.

Beer volume grew 5.2 percent organically to 56.4 mhl and came 2.8 percent ahead of 2019 on an organic basis. All regions contributed to the growth, especially Europe.

Net revenue (beia) in Europe grew 46.1 percent organically, with total consolidated volume up 16.9 percent, driven by partial recovery of the on-trade, and net revenue (beia) per hectolitre growth of 29.3 percent.

The Americas region recorded modest growth led by Brazil and Mexico, despite a mid-single digit drop in the USA beer volume.

Asia Pacific returned to growth following the lockdown in the second part of last year. Africa, Middle East & Eastern Europe continued its positive momentum.

Premium beer volume grew 6.3 percent, driven by Heineken, which grew 12.9 percent in volume.

Non-Beer volume, meanwhile, fell 6.1 percent.

In Amsterdam, Heineken shares were trading at 93.22 euros, up 4.34 percent.

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