LONDON (Reuters) – Heineken may post lower-than-estimated operating profit growth this year due to uncertainties linked to the volatile geopolitical and economic environment.
The brewer said on Wednesday that it was targeting an increase in its operating profit before exceptional items of 1 to 9% (“low to high single-digit”) in 2024, while analysts expect 9.9%.
On the Amsterdam Stock Exchange, the stock fell 5.50% to 88 euros at 09:35 GMT.
James Edwardes Jones, an analyst at RBC, called the forecast “disappointing” given “the widespread expectation … of significant margin leverage as raw material costs decline.”
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Heineken had already warned that difficult economic conditions could weigh on demand in some markets this year.
“We remain cautious about the global economic and geopolitical outlook,” Chairman and CEO Dolf van den Brink said in a statement.
Under these conditions, the company will seek to stimulate revenue growth by balancing volumes and prices.
Costs are expected to increase further, said Heineken, which expects to achieve at least 500 million euros in gross savings in 2024, or 100 million euros more than the target.
The world’s second largest brewer also reported an increase of 1.7% in its operating profit for the year 2023, exceeding the forecasts of analysts who were counting on stability, according to a consensus compiled by the company.
It recorded an impairment charge of €491 million related to its Southern Africa division, formed after the 2021 acquisition of South African beverage group Distell and Namibian Breweries.
(Reporting Emma Rumney; French version Nathan Vifflin and Mathias de Rozario, editing by Kate Entringer)
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