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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Heineken | EU:HEIA | Euronext | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.06 | 0.07% | 91.30 | 90.62 | 91.48 | 91.94 | 90.82 | 91.64 | 844,584 | 16:40:00 |
Amsterdam, 19 April 2023 – Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) publishes its trading update for the first quarter of 2023.
Key Highlights |
CEO Statement |
Dolf van den Brink, Chairman of the Executive Board / CEO, commented:
"We start the year with strong revenue growth driven by pricing and disciplined revenue management, while we materially increase investment behind our brands. Business performance in Europe and the Americas regions is encouraging, with consumer demand holding up better than expected in the first quarter. Results in the Asia Pacific and Africa, Middle East and Eastern Europe regions were disappointing, hindered by temporary volatility in Vietnam and Nigeria, leading to demand softness.
We continue to make consistent progress on EverGreen. Heineken® volume was up 5.7% excluding Russia, Heineken® Silver grew 47% and was launched in the United States. We obtained the final regulatory approval in South Africa, and we look forward to welcoming over 5,400 new colleagues of Distell and Namibian Breweries into HEINEKEN and to add more than €1 billion in net revenue and €150 million operating profit to our African footprint. Our eB2B platforms captured €2.3 billion in gross merchandise value this quarter, 51% more than last year, and 6 markets have completed the transition under the brand name eazle, business made easy. HEINEKEN was included in the 2023 Bloomberg Gender-Equality Index for our commitment and progress towards a fair, inclusive and equitable workplace and world.
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. All in all, our full year expectations remain unchanged."
Driving Superior Growth |
Revenue for the first quarter of 2023 was €7,632 million (2022: €6,989 million). Net revenue (beia) was €6,378 million and increased by 8.9% organically, with total consolidated volume declining by 3.1% and net revenue (beia) per hectolitre up 12.3%. Price mix on a constant geographic basis increased by 12.1%, driven by pricing to offset inflation across all regions and revenue and mix management. Currency translation positively impacted net revenue (beia) by €104 million or 1.8%, mainly driven by the Mexican Peso and the Brazilian Real. Consolidation changes had a small positive impact in net revenue (beia) of €10 million.
Revenue1 | ||||||||
(in € million or %) | 1Q23 | Total growth | Organic growth | 1Q22 | ||||
Revenue (IFRS) | 7,632 | 9.2% | 6,989 | |||||
Net revenue (beia) | 6,378 | 8.9% | 5,753 |
Beer volume declined 3.0% organically versus last year. The Americas region continued positive growth momentum, offset by declines in the Africa, Middle East and Eastern Europe and Asia Pacific regions driven by temporary external factors in our key markets of Vietnam and Nigeria. Volume in Europe performed ahead of our expectations for the quarter.
Beer volume | ||||||
(in mhl or %) | 1Q23 | Organic growth | 1Q22 | |||
Heineken N.V. | 54.8 | -3.0% | 56.4 | |||
Africa, Middle East & Eastern Europe | 9.0 | -8.3% | 9.8 | |||
Americas | 20.3 | 3.4% | 19.7 | |||
Asia Pacific | 10.3 | -10.5% | 11.5 | |||
Europe | 15.2 | -2.3% | 15.5 |
Driving premiumisation at scale, led by Heineken®
Premium beer volume fell by 5.7%, driven by the decline in Vietnam and stopping sales of Heineken® in Russia. Strong underlying momentum in premiumisation continued elsewhere, led by Heineken®, which grew 2.3% in volume, significantly outperforming our portfolio. Heineken® grew by double-digits in more than 25 markets. Growth was mainly driven by Brazil and China, and was partially offset by the decline in Russia. Heineken® 0.0 declined by a low-single-digit, with strong growth momentum in Brazil, the USA, the UK, Spain and the Netherlands, offset by the decline in Russia. Notably, our consumer-centric innovation Heineken® Silver continued its strong growth, including double-digit growth in Vietnam and China. We also continued the global expansion and launched Heineken® Silver in the USA, with a taste proposition specially designed for US consumers. Overall, Heineken® Silver grew by 47%.
Heineken® volume | ||||
(in mhl or %) | 1Q23 | Organic growth | ||
Heineken N.V. | 12.2 | 2.3% | ||
Africa, Middle East & Eastern Europe | 1.3 | -23.9% | ||
Americas | 5.4 | 10.3% | ||
Asia Pacific | 2.3 | 16.3% | ||
Europe | 3.1 | -4.3% |
Build a future-fit digital route-to-consumer
Our business-to-business digital (eB2B) platforms aim to create a superior customer experience to drive demand through better service and with productivity gains. We continue to deploy these platforms at speed and in the first quarter of this year our platform solutions captured €2.3 billion in gross merchandise value, an increase of 51% versus the comparable period last year. The growth was mainly driven by Mexico, Vietnam, Brazil, the Netherlands, Nigeria and Italy. We now connect over half a million active customers, 100 thousand more than in the comparable period last year. In this quarter we began migrating our eB2B platforms under a single brand name: eazle, business made easy. The transition to the new brand is now live in the UK, Italy, Ireland, France, Spain and Austria. eazle will enable better features at scale, resulting in improved customer experience and better performance, helping customers to grow their business.
Regional Overview |
Africa, Middle East & Eastern Europe
Americas
Asia Pacific
Europe
Reported Net Profit |
The reported net profit for the first three months of 2023 was €403 million (2022: €417 million).
Business Outlook |
We continue to experience the effects of a volatile global economy and remain cautious about the impact this has on consumer demand. At the same time, we are focused on strengthening our business in line with our EverGreen strategy, including investing behind our brands and innovations, and delivering upon our gross savings ambitions.
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. All in all, our full year outlook remains unchanged, and we expect operating profit (beia) to grow organically mid- to high-single-digit. We also expect that the growth in operating profit (beia) will come mainly, if not fully, in the second half of the year.
Consolidation impact of Newco in South Africa |
HEINEKEN expects to consolidate the businesses resulting from the transaction with Distell and NBL as of 1 May 2023. The prospectus and other useful information can be found on our dedicated webpage for the Distell and NBL transaction, including the Newco Group Ownership Structure (Page 34 of the Prospectus) and the Pro Forma of Newco (Page 162 of the Prospectus).
On 27 March, the Threshold Scheme Conditions of the transaction have been fulfilled, confirming that the shareholding of HEINEKEN in Newco would be 65%. As a result, the consolidation of the newly acquired assets will imply:
The table below illustrates, directionally, the impact of the consolidation using the full year results of HEINEKEN for 2022 and the Pro Forma financial information of Newco Group for the 12-month period concluded in June 2022 at an exchange rate of 19.95 ZAR per Euro.
Impact of the consolidation of Newco into HEINEKEN - Illustrative | |||
In millions of € | HEINEKEN (beia) | Consolidation impact | Consolidation impact (%) |
Revenue | 34,643 | 1,632 | 4.7% |
Excise tax expense | (5,949) | (499) | |
Net Revenue | 28,694 | 1,133 | 3.9% |
Total net other expenses | (24,192) | (971) | |
Operating profit | 4,502 | 161 | 3.6% |
Net interest income/(expenses) | (380) | (7) | |
Other net finance income/(expenses) | (63) | — | |
Share of profit of assoc./JVs | 263 | 1 | |
Income tax expense | (1,124) | (50) | |
Non-controlling interests | (363) | (56) | |
Net profit | 2,836 | 48 | 1.7% |
Diluted EPS (in €) | 4.92 | 0.08 | 1.7% |
The illustration above considers the following:
Translational Currency Calculated Impact |
Based on the impact to date, and applying spot rates of 17 April 2023 to the 2022 financial results as a baseline for the remainder of the year, the calculated negative currency translational impact for the full year of 2023 would be approximately €640 million in net revenue (beia), €90 million at operating profit (beia) and €40 million at net profit (beia).
Reconciliation of non-GAAP measures |
In the internal management reports, HEINEKEN uses the measure of net revenue (beia).
Reconciliation net revenue (beia) | ||||
In millions of € | 1Q23 | 1Q22 | ||
Revenue (IFRS) | 7,632 | 6,989 | ||
Excise tax expense | (1,253) | (1,236) | ||
Net revenue | 6,379 | 5,753 | ||
Exceptional items included in net revenue | (1) | — | ||
Net revenue (beia) | 6,378 | 5,753 |
Note: due to rounding, this table will not always cast
Enquiries |
Media | Investors | |
Sarah Backhouse | José Federico Castillo Martinez | |
Director of Global Communication | Director of Investor Relations | |
Michael Fuchs | Mark Matthews / Chris Steyn | |
Corporate & Financial Communication Manager | Investor Relations Manager / Senior Analyst | |
E-mail: pressoffice@heineken.com | E-mail: investors@heineken.com | |
Tel: +31-20-5239355 | Tel: +31-20-5239590 |
Conference Call Details |
HEINEKEN will host an analyst and investor conference call with Harold van den Broek, Chief Financial Officer, in relation to its First Quarter 2023 Trading Update and the transaction in South Africa today at 14:00 CET/ 13:00 GMT. The call will be audio cast live via the company’s website: www.theheinekencompany.com. An audio replay service will also be made available after the conference call at the above web address. Analysts and investors can dial-in using the following telephone numbers:
United Kingdom (Local): 020 3936 2999
Netherlands (Local): 085 888 7233
USA (Local): 646 664 1960
All other locations: +44 203 936 2999
Participation password for all countries: 683288
Editorial information: HEINEKEN is the world's most international brewer. It is the leading developer and marketer of premium and non-alcoholic beer and cider brands. Led by the Heineken® brand, the Group has a portfolio of more than 300 international, regional, local and specialty beers and ciders. With HEINEKEN’s over 85,000 employees, we brew the joy of true togetherness to inspire a better world. Our dream is to shape the future of beer and beyond to win the hearts of consumers. We are committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through "Brew a Better World", sustainability is embedded in the business. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets. We operate breweries, malteries, cider plants and other production facilities in more than 70 countries. Most recent information is available on our Company's website and follow us on LinkedIn, Twitter and Instagram.Market Abuse Regulation
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Disclaimer: This press release contains forward-looking statements based on current expectations and assumptions with regard to the financial position and results of HEINEKEN’s activities, anticipated developments and other factors. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements also include, but are not limited to, statements and information in HEINEKEN’s non-financial reporting, such as HEINEKEN’s emissions reduction and other climate change related matters (including actions, potential impacts and risks associated therewith). These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “milestones”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. These forward-looking statements, while based on management's current expectations and assumptions, are not guarantees of future performance since they are subject to numerous assumptions, known and unknown risks and uncertainties, which may change over time, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s ability to control or estimate precisely, such as but not limited to future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials and other goods and services, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, environmental and physical risks, change in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN’s publicly filed annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which speak only of the date of this press release. HEINEKEN assumes no duty to and does not undertake any obligation to update these forward-looking statements contained in this press release. Market share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination with management estimates.
1 Refer to the Glossary for an explanation of organic growth and other terms used throughout this report. 2 Page 5 of this press release includes an illustration of the consolidation effects of this transaction on HEINEKEN.
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