Heineken Profits Fall 52% in HY Results

Heineken has reported a “gradual recovery” in its global beer business as lockdowns are lifted, yet continues to withdraw its full-year guidance amid uncertainties. The company had released preliminary highlights of its half-year results on 16 July showing that its first-half net revenue had declined organically by 16.4%. This was driven by an 11.5% organic decline in beer volume. For the six-month period ended 30 June, Heineken saw its operating profit decline organically by 52.5%. The brewer also took €548 million of impairments, predominantly for its operations in Papua New Guinea and Jamaica. The Dutch brewer’s announcement follow its first quarter results – which saw its global beer volume sales fall 14% in March – and as expected the impact “deepened” in the second quarter of 2020. However, after a low point in April, Heineken said volume started to gradually recover into June as lockdowns were lifted. Beer volume was affected most by lockdowns in Mexico, South Africa and Europe, while Heineken’s Asia Pacific region showed the highest resilience driven by its Vietnam market. In Europe off-trade, beer volume grew mid-teens but this was offset by the continual closure of its strong on-trade outlets. According to the company, its Heineken brand performed well in relative terms with a 2.5% volume decline and double-digit growth in 14 markets. Meanwhile, Heineken 0.0 continued to show momentum with double-digit growth across all regions with particular strength in the US and Mexico. Dolf van den Brink, CEO and chairman of Heineken, said: “The first half of 2020 was defined by unprecedented challenges and I am very proud of our employees all around the world who are adapting quickly to new emerging realities while taking care of each other, our customers and our communities. “Our bottom-line was disproportionately impacted due to the decline in the European on-trade, as well as temporary government restrictions on our activities in Mexico and South Africa. We have taken mitigating actions and will further intensify our focus on costs.”