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Heineken is raising its expectations for this full year, despite a disappointing first half. Chinese setbacks weigh more heavily on performance than strong growth in Mexico.
Chinese depreciation
Heineken achieved a 2.1 % growth in volume in the first half of the year, accounting for an organic sales growth of 6 % (excluding currency effects) to 14.8 billion euros. However, that was less than analysts had expected. Total sales grew 2.2 % to 17.8 billion euros.
Profit also disappointed, due to exceptional costs in China: a one-time depreciation 874 million euros on its Chinese brewing partner CR Beer led to a loss of 95 million euros. The Dutch beer giant only entered the Chinese brewer’s capital in 2019, but it is now suffering from the economic slowdown in China.
More marketing
Elsewhere, Heineken is performing well: Mexico and Brazil earned it a 42 % profit growth in the Americas. With 854 million euros, the Americas are now Heineken’s most profitable market, even though there was growth in all regions. Even in most European countries, the brewer gained market share.
CEO Dolf van den Brink said the last six months were solid, although he warns that volatility remains a reality. For the full year, Van den Brink raises the forecast profit growth to 4 to 8 %. In the second half of the year, Heineken promises to spend substantially more on sales and marketing.
