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Heineken Maintains Strong Top Line Growth in 2018

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Heineken Maintains Strong Top Line Growth in 2018

Heineken Maintains Strong Top Line Growth in 2018
February 20
12:22 2019

Heineken achieved organic net revenue growth of 6.1% to €22.471 billion in 2018, with a 4.0% increase in total consolidated volume and a 2.0% increase in revenue (beia) per hectolitre. Operating profit (beia) rose organically by 6.4% to €3.868 billion but the operating profit margin (beia) slipped by 17 bps to 17.2%. Net profit for 2018 after exceptional items and amortization of acquisition-related intangibles was €1.903 billion, against €1.935 billion in 2017.

The flagship Heineken® brand produced its strongest performance in more than a decade as volume grew 7.7%. Ten markets now sell more than 1 million hectolitres of Heineken®. Volume grew double digit in Brazil, South Africa, Russia, the UK, Nigeria, Mexico, Poland and Germany, and China returned to growth. The Heineken® brand also saw healthy growth across European markets from both Heineken® Original as well as the ongoing success of Heineken® 0.0. These results more than offset weaker volumes in Vietnam and the US. Heineken® 0.0 is now available in 38 markets and further roll-out is planned for 2019.

The group’s international brand portfolio delivered double digit growth. Volume was up double digit for Tiger, Desperados, Birra Moretti and Krušovice. Amstel grew high single digit driven by strong growth in Brazil. Tecate grew mid-single digit as robust performance in Mexico more than offset a decline in the US.

Cider volume increased double digit to 5.6 million hectolitres. In the UK volume grew mid-single digit and outside of the UK volume reached more than 2 million hectolitres. Strongbow and its flavour variants continue to gain share in South Africa. Performance of the recently introduced Ladrón de Manzanas in Spain and Strongbow in Vietnam is promising.

Low & No-Alcohol (LNA) volumes increased mid-single digit, delivering 13.1 million hectolitres in 2018. In Europe volumes grew high-single digit due to the continued success of Heineken® 0.0 and Radler. In Ethiopia, Sofi Malt and its new coffee variant Sofi Buna boosted the growth of the LNA portfolio. Volumes in Nigeria were adversely impacted by the weak macro-economic environment and SKU rationalisation.

The Netherlands-based global brewer continued to invest in key developing markets during 2018 with the expansion of production capacity in Mexico, Vietnam, Ethiopia, Brazil, Cambodia, Haiti and South Africa, and the construction of a new brewery in Mozambique.

Jean-François van Boxmeer, chairman and chief executive of Heineken, comments: “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 & 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.”

He continues: “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. Overall, we anticipate our operating profit (beia) to grow by mid-single digit on an organic basis.”

Capital expenditure related to property, plant and equipment is expected to be around €2 billion in 2019, compared with €1.9 billion last year.

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