First-quarter revenues fizz at Heineken

Heineken, the world’s second-largest brewer, reported improved first-quarter revenues on Wednesday, as higher prices helped offset a larger-than-expected slide in volumes.

The Dutch brewer – whose brands include Sol, Amstel, Tiger and Red Stripe, as well as Heineken – said revenues rose 9.2% in the three months to March end, to €7.6bn. On an organic basis, revenues rose 8.9% to €6.4bn, ahead of forecasts.

Net profits fell to €403m from €417m a year previously.

Total consolidated beer volumes declined 3.1% – most analysts had been expecting a fall of around 1.9% – but the price mix on a constant geographic basis increased by 12.1%. Premium beer volumes fell by 5.7%, driven by especially soft demand in Vietnam and stopping sales in Russia. But there was strong premiumisation elsewhere, led by the Heineken brand, with notable increases in China and Brazil.

Consumer demand was better-than-expected in Europe and the Americas, Heineken noted. But it called results in Asia Pacific, where beer volumes fell 10.5%, and Africa, the Middle East and Eastern Europe – which reported an 8.3% decline – “disappointing”.

Heineken left its full-year forecasts unchanged, however, with operating profit expected to increase organically by a mid-to-high single-digit percentage. It noted: “Following the start of the year, we see signals of a relatively resilient Europe and risks of slower economic growth in Asia Pacific, thus performance across markets may be different than anticipated.”

Dolf van den Brink, chief executive, said: “We start the year with strong revenue growth driven by pricing and disciplined revenue management, while we materially increase investment behind our brands.

“We see the economic environment as volatile and uncertain, making us vigilant and focused. Our gross savings programme continues at force, providing fuel to invest behind our strategy.”

Victoria Scholar, head of investment at Interactive Investor, said: “Shares in Heineken have enjoyed a strong year so far in 2023, rallying by more than 13%, with positivity coming through today as investors digest the mixed report.

“While macroeconomic headwinds are negatively impacting the consumer, Heineken still managed to top consensus in terms of sales and maintained its outlook, highlighting the defensive and resilient nature of consumer demand for beer.”

Shares in Heineken were ahead 3% as at 1015 BST on Wednesday.