Heineken 1Q Net Profit, Revenue Rose on Strong Channel Mix, Pricing -- Update

By Kyle Morris

Heineken NV said Wednesday that first-quarter net profit and revenue increased as it benefited from a strong channel mix and assertive pricing, but warned that it will take action on prices as it expects significant inflationary headwinds.

The Dutch brewer posted a net profit of 417 million euros ($449.8 million) for the first three months of 2022 compared with EUR168 million a year earlier, driven by top-line growth, with the partial recovery of on-trade--bars, clubs, hotels and restaurants--in Europe after Covid-19-related restrictions last year.

The net profit figure doesn't include an impairment and other non-cash exceptional charges of around EUR400 million relating to the decision to transfer the ownership of the Russia business, it said.

Revenue for the period was EUR6.99 billion compared with EUR5.15 billion a year earlier.

Beer volume grew 5.2% organically on year and was 2.8% ahead of 2019 on an organic basis. All regions contributed to the growth, especially Europe, it said.

"We had a solid start to the year, in line with our expectations, especially benefiting from strong channel mix from the partial on-trade recovery of Europe and assertive pricing across all regions," Chief Executive Dolf van den Brink said.

Heineken said it expects inflationary pressures to hurt household disposable income, posing a risk to beer consumption later in the year. Further cost pressures are emerging from rising input costs, supply chain challenges and from the decision to leave Russia, it said. The brewer added that it maintains guidance for a stable to modest improvement in the adjusted operating profit margin in 2022.

Shares in Heineken at 0732 GMT were up EUR2.84, or 3.2%, at EUR92.18.

Write to Kyle Morris at [e-mail]

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April 20, 2022 03:49 ET (07:49 GMT)

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