Heineken 1st Half Topped Market Views; Sees Significant Cost Pressures Ahead -- Update

By Michael Susin

Heineken NV said Monday that net profit for the first half rose on the back of action to mitigate inflationary pressures on its cost base, and that it affirmed its forecast for 2022 and changed its guidance for 2023.

The Dutch brewer said that it expects significant cost pressures and ongoing investment to impact the second-half of 2022 and into 2023, noting that the commodities price softening is being offset by higher natural price levels and availability.

"Our pricing and revenue management actions have effectively offset these inflationary pressures so far in absolute terms, and we remain committed to continuing to do so," the company said.

As a result, the company backed its 2022 guidance to achieve a stable-to-modest sequential improvement in adjusted operating profit margin.

"We are changing our previous guidance for 2023. We will move from an operating profit margin objective towards delivering operating profit (beia) organic growth, in the range of a mid- to high-single digit," it said.

The brewer said its Evergreen program is on track to achieve 1.7 billion euros ($1.74 billion) in aggregate gross savings by end of 2022.

The company reported net profit for the half year of EUR1.27 billion, compared with EUR1.03 billion a year earlier. Net profit had been expected to come in at EUR1.11 billion, according to two analysts' estimates taken from FactSet.

The company said beia net profit--one of the company's preferred metrics--rose 40% to EUR1.33 billion. Beia stands for before exceptional items and amortization of acquisition-related intangible assets.

Net revenue for the period rose to EUR13.49 billion from EUR10.01 billion, and was also higher than the consensus forecast of EUR12.85 billion based on five analysts' estimates taken from FactSet.

The brewer said volume for the Heineken brand rose 13.8% organically on year.

The board has declared an interim dividend of 50 European cents, up from 28 European cents a year earlier.

Write to Michael Susin at [e-mail]

(END) Dow Jones Newswires

August 01, 2022 02:36 ET (06:36 GMT)

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