Heineken boosted by core beer brands in strong full-year results

From: FoodBev

Heineken recorded a 3.9% rise in full-year net revenues, as the Dutch brewer continued to profit from the strong performance of its namesake beer brand.

The world’s second largest beer maker – and owner of brands such as Tiger, Cruzcampo and Amstel – posted net revenues of €22.47 billion for 2018. Operating profit grew 2.9% to €3.89 billion.

Heineken branded beer volume grew 7.7%, its strongest performance in more than a decade. Ten markets now sell more than 1 million hectolitres of Heineken branded beer. Volumes grew double digit in Brazil, South Africa, Russia, the UK, Nigeria, Mexico, Poland and Germany, and China returned to growth.

The company’s international beer portfolio grew double digit, with volumes up for Tiger, Desperados, Birra Moretti and Krušovice.

Heineken highlighted the “continued success” of Heineken 0.0, as the firm’s low- and no-alcohol volumes increased mid-single digit.

Despite the positive performance, Heineken USA’s beer volume declined high-single digit. The company’s Lagunitas subsidiary, which it fully acquired in 2017, recorded a low-single-digit decline in volumes.

Heineken CEO Jean-François van Boxmeer.

Jean-François van Boxmeer, Heineken CEO, said: “In 2018 we delivered another year of superior top-line growth. The Heineken brand grew 7.7%, its best performance in over a decade, with Heineken 0.0 now available in 38 countries. Our premium portfolio grew double digit, led by our international brands, craft and variety and cider portfolios.

“All regions grew and Brazil recorded a strong performance following the successful integration of our two businesses. Our operating profit margin (beia) decreased by 17 bps due to the first time consolidation of Brazil, rising input costs and adverse currency developments. A key milestone in 2018 was the announcement of the strategic partnership with CRE to join forces in China, a big opportunity for both companies, which is pending regulatory approval.

“Our strategic priorities are growth oriented with an ever-increasing emphasis on the sustainability of this growth, both socially and environmentally. We focus on innovation and operational excellence so our consumers enjoy our brands and we exceed our customers’ expectations, whilst seeking productivity improvements and constantly reassessing our spending behaviour. Going into 2019, we expect the environment to remain uncertain and volatile.”

During 2018, Heineken launched a line of cannabis-infused sparkling waters in California through the Lagunitas subsidiary. It also opened a brewery powered by 100% renewable energy in Chihuahua, Mexico, following a $500 million investment.

For 2019, Heineken expects “superior top-line growth driven by volume, price and premiumisation” and operating profit to grow by mid-single digit on an organic basis.

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