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Dutch brewery group Heineken has surpassed 2019 (pre-pandemic) levels in its latest semester. Consumers are going to bars again, its CEO said, but the group feels forced to lower profit forecasts as costs are eating away at its margins.
Resilience
The Dutch group has beaten expectations in the first half of this year. Just like its Belgian rival AB InBev, consumers were eager to drink away two years of Covid pandemic worries, accepting the price increases in the process. More than that: Dutch beer giant confirmed AB InBev’s observations that consumers opted more often for more expensive beers. CEO Dolf van den Brink is happy with his company’s performance, stating that as consumers are returning to the bars, beer demand is resilient despite inflation, as Dutch national broadcaster NOS quoted him.
As such, turnover rose by 37 % to 16.4 billion euros, 14 % more than in the first half of 2019. Volumes sold climbed by 7.6 % compared to last year, and also ended slightly higher (+ 0.8 %) than in the same period of 2019. Growth accelerated particularly in the second quarter, and this in all regions.
Operating profit came in almost a quarter higher (+ 24.6 %) at 2.16 billion euros, exceeding the + 17 % growth expected by analysts. The margin was 16 %: this is the same as what Heineken had hoped to achieve for next year. However, as costs and inflation continue to rise, the beer giant is sharply lowering those expectations: Heineken is now expecting an operating margin of between 5 and 10 % for 2023.
