Less sales, but more turnover
Heineken sells less beer
7/31/2023 1:41 p.m
After price increases, the Dutch Heineken group recorded a slump in sales and reported a decline in sales in the first half of the year. Nevertheless, the turnover of the brewing group is increasing.
The Dutch brewing group Heineken cut its outlook after the first half of the year in view of the drop in sales and high costs. In the better case, management now expects growth in earnings adjusted for special effects in the mid-single-digit percentage range for the year as a whole, if exchange rate effects and the acquisition and sale of parts of the company are factored out.
In the worst case, however, the operating profit only remains stable, as the Dutch announced. So far, Heineken had forecast growth in the mid to high single-digit percentage range. The stock came under significant pressure.
Inflation as a trigger
In the first half of the year, Heineken sold 120.1 million hectoliters of beer, which is 5.6 percent less than a year earlier – i.e. without company acquisitions and sales. In the second quarter, the minus worsened compared to the first quarter. Heineken blamed a weak economic environment and strong price increases for this. Business in Vietnam and Nigeria was disappointing, together accounting for more than half of the decline.
In terms of sales, however, the price increases paid off. The price climbed in the first half of the year by 6.3 percent to 17.4 billion euros. Before interest, taxes and goodwill amortization, this was only able to support the operating profit to a limited extent, which fell by 8.8 percent to 1.94 billion euros. CEO Dolf van den Brink expects a turnaround in operating profit in the second half of the year, and the drop in sales should also improve to a low single-digit percentage.
The bottom line was that profit fell by 8.6 percent to 1.16 billion euros. In June, Heineken wrote off a further 113 million euros for the planned sale of the Russian business. The company remains committed to leaving Russia, but the timing is not in their hands, the Dutch said.