Heineken sells more beer in first quarter, sticks to outlook

Heineken (HEIN.AS) sold more beer than expected in the first quarter, reporting its first year-on-year growth in quarterly volumes in a year, as it kept its 2024 profit growth forecast.

The world’s second-largest brewer has said that beer volumes rose 4.7 per cent organically in January-March, beating the 2.5 per cent growth expected by analysts in a company-provided poll.

It is focused on restoring volume growth this year, which was hurt in 2023 in part as it hiked prices to offset the rising cost of everything from energy to barley.

Its shares were up 1.9 per cent at 1452 GMT.

All regions posted higher volume and net revenue, and the quarter was helped by an earlier Easter and one-off effects.

Heineken is gaining or holding volume share on a year-to-date basis in the majority of its markets, and its more expensive beers also continued to outperform, finance chief Harold van den Broek said on a call for analysts and investors.

The firm disappointed investors in February with its wide range for forecast operating profit growth, which it said could be anywhere between a low and high single-digit percentage this year.

It kept that unchanged, citing the calendar and one-off events and still “challenging and uncertain” economic environment.

“Despite the solid start to the year, we cannot extrapolate the reported top-line growth to the rest of the year,” it said.

Van den Broek added that – barring any unforeseen significant disruption – Heineken expected a more balanced delivery of operating profit than last year with growth in both halves, though skewed towards the first one.

But volatility was still possible in some of its markets, including Vietnam and Nigeria, where economic conditions dragged on its performance last year.

Heineken said total volume in Nigeria grew close to 20 per cent. In Vietnam, where it had to destock last year, volume rose in the low-teens but van den Broek said the market was still negative.

Barclays analyst Laurence Whyatt pointed to a recovery in high-margin market Vietnam, as well as promising performances in Mexico and Brazil.

“There is no denying that the underlying business appears to have turned the corner and we continue to expect improvements during the year,” he said in a note.

In Brazil, Heineken said its namesake brand became the No.1 brand by value in the quarter, while beer volume grew by a high-single-digit percentage.

Net revenue before one-offs rose 9.4 per cent organically to 6.85 billion euros ($7.33 billion), above the 7.2 per cent growth expected by analysts.