Heineken N.V. reports on 2020 first quarter trading
Amsterdam, 22 April 2020 – Heineken N.V. (EURONEXT: HEIA; OTCQX:
HEINY) today publishes its trading update for the first quarter of
2020.
KEY HIGHLIGHTS
- Beer volume -2.1% organically for the quarter.
- Heineken® volume +5.0% in the quarter.
- March volume significantly impacted by Covid-19.
Jean-François van Boxmeer, Chairman of the Executive Board /
CEO, commented:
"During the first quarter of 2020, the Covid-19 outbreak has
evolved into a pandemic. By now, most countries where we
operate have reacted by taking far-reaching containment measures
such as restrictions of movement for populations and outlet
closures, sometimes combined with the mandatory lockdown of
production facilities. Our performance for the first quarter
reflects the initial impact of those measures, and volumes in March
were obviously heavily affected.
In these very trying times, our thoughts remain with all those
affected by Covid-19 and the people working tirelessly to care for
them. In addition to our actions with local communities which are
now approaching a value of €5 million, on April 8th we announced
our decision to donate €15 million to the International Red Cross
and I am pleased to report that the de Carvalho-Heineken family
together with their holding company will donate €10 million to
eight charities providing support to communities most affected and
fragile, to medical health systems and to medical research.
HEINEKEN has entered the crisis with strong brands and a strong
balance sheet. In the past few weeks we have taken necessary
measures to reduce our costs, secure additional financing and adapt
to the fast changes we see in our markets.
I am proud of the leadership, the commitment and the courage of
our teams and I fully trust their talent, creativity and energy to
steer HEINEKEN through this unprecedented situation and protect as
well as develop our brands and businesses."
FIRST QUARTER VOLUME BREAKDOWN
Beer volume1(in mhl or %) |
1Q20 |
Organic growth % |
March organic growth % |
Total growth % |
1Q19 |
Heineken N.V. |
51.6 |
|
-2.1 |
% |
-14.0 |
% |
-2.1 |
% |
52.7 |
|
Africa, Middle East & Eastern Europe |
9.4 |
|
-6.9 |
% |
-14.5 |
% |
-6.9 |
% |
10.1 |
|
Americas |
19.3 |
|
-2.5 |
% |
-13.8 |
% |
-2.6 |
% |
19.8 |
|
Asia Pacific |
7.4 |
|
4.4 |
% |
-10.6 |
% |
-1.3 |
% |
7.5 |
|
Europe |
15.4 |
|
-1.4 |
% |
-15.3 |
% |
1.2 |
% |
15.3 |
|
Heineken® volume1 (in mhl or %) |
1Q20 |
Organic growth % |
Heineken N.V. |
9.4 |
|
5.0 |
% |
Africa, Middle East & Eastern Europe |
1.3 |
|
-13.6 |
% |
Americas |
3.7 |
|
24.5 |
% |
Asia Pacific |
1.5 |
|
-5.7 |
% |
Europe |
2.9 |
|
0.4 |
% |
1 Refer to the Definitions section for an explanation of
organic growth and volume metrics.
FIRST QUARTER VOLUME REVIEW
With the spread of the Covid-19 crisis to all geographies,
multiple countries have taken far-reaching containment measures
such as restrictions of movement for populations and outlet
closures, sometimes combined with the mandatory lockdown of
production facilities. This is having a significant impact on
HEINEKEN's markets and on its business in 2020 and is already
visible in the volume reported for the first quarter. In most cases
these measures were implemented in the last weeks of March. By
exception, specific reference is made to the volume performance in
March per Region to improve transparency.
Heineken® brand
- Heineken® volume grew by 5.0% in the quarter,
with a decline of 2.4% in March.
- Volume grew double digit in Brazil, China, Mexico, the UK,
Poland, Mozambique, Ivory Coast and South Korea among other
markets.
- Heineken® 0.0 was introduced in Vietnam in March and is now
present in 58 countries.
Africa, Middle East & Eastern Europe
- Beer volume declined organically by 6.9% in the quarter, with a
decline of 14.5% in March.
- In Nigeria, beer volume was
broadly flat in the quarter and declined high-single digit in
March, following a price increase in February and the ban on
distribution of alcoholic beverages late March. The alcohol ban is
applicable in some states where we continue to sell non-alcoholic
malt drinks.
- In South Africa, total
consolidated volume declined in the low-twenties in the quarter due
to destocking from last year and the ban on sales, production and
distribution of alcoholic beverages starting the last week of
March. Total consolidated volume declined in the mid-twenties in
March.
- In Russia, beer volume
declined in the mid-teens due to destocking relative to last
year.
- In Ethiopia, beer volume
declined in the mid-teens, following a steep price increase in
mid-February to offset an increase in excise duties.
- In Egypt, beer volume
declined in the low-teens in the quarter and by about one half in
March following a drop in tourism.
- In the DRC, beer volume
declined by low-single digit due to a decline in the mid-teens in
March.
Americas
- Beer volume declined organically by 2.5% in the quarter, with a
decline of 13.8% in March.
- In Brazil, beer volume
declined mid-single digit. Our premium and mainstream portfolios
grew double digit, led by Heineken® growing by more than 50%. The
economy portfolio declined in the mid-twenties. In March, beer
volume declined in the mid-twenties. Non-beer volume declined by
one-third due to the de-listing of a low-margin brand in some
regions last year.
- In Mexico, beer volume
increased low-single digit. Our premium portfolio increased double
digit, led by Heineken® and Amstel Ultra. Following government
orders, our breweries have been suspended for the month of April.
At that moment we estimate our customers held 2 to 3 weeks of
inventory.
- In the USA, beer volume declined mid-single
digit, with Heineken® growing low-single digit driven by Heineken®
0.0. Lagunitas declined high-single digit. Together with our
distributors, we held inventory to supply around two months of our
Mexican brands portfolio at the end of March.
Asia Pacific
- Beer volume grew organically by 4.4% despite a decline of 10.6%
in March.
- In Vietnam, beer volume grew
in the low-teens, underpinned by the continuing expansion of Tiger
into secondary cities and rural areas. We launched Heineken® 0.0
and Bia Viet, a new national brand. In March beer volume declined
mid-single digit.
- In Indonesia, beer volume
declined in the mid-teens due to a drop in tourism in Bali and
on-trade restrictions to contain the outbreak.
- In Cambodia, beer volume
increased high-single digit driven by our local brand Anchor.
- In Malaysia, beer volume declined mid-single
digit in the quarter and by more than half in March, following the
suspension of brewery operations under the government's Movement
Control Order.
Europe
- Beer volume declined organically by 1.4% in the quarter, with a
decline of 15.3% in March. Third party volume declined 17.8% in the
quarter and 49.2% in March as on-trade outlets closed impacting our
wholesale operations.
- In Italy, beer volume
declined by low-single digit in the quarter. Most of the month of
March was under lockdown and beer volume declined by one-third,
with volume to on-trade customers declining by three-quarters and
volume to off-trade customers up low-single digit.
- In Spain, beer volume
declined mid-single digit in the quarter. In March, total volume
declined around one-quarter, with volume to on-trade customers down
by almost half and volume to off-trade customers up in the
low-teens.
- In the UK, total consolidated
volume was down mid-single digit for the quarter and in March, due
to record rains in February and the lockdown in late March. Our pub
estate has been closed since the last week of March.
- In France, beer volume was up
low-single digit. During March, volume declined mid-single digit,
as the decline in volume to on-trade customers of close to a half
was partially offset by the high-single digit volume growth to
off-trade customers.
- In Poland, beer volume was up
high-single digit driven by the mainstream and premium portfolios
and a return to normal stock levels at our largest distributor. In
March, volume declined high-single digit.
- In the Netherlands, beer volume was down
mid-single digit, with a decline in the mid-teens in
March.
HEALTH AND SAFETY OF EMPLOYEES
During these trying times, HEINEKEN has set as first priority
the health and safety of its people. HEINEKEN ensures that
employees working in production and distribution follow strict
hygiene and social distancing guidelines and receive support to do
their jobs safely.
In order to provide security to its employees, HEINEKEN has
committed that until the end of 2020, it will not carry out
structural layoffs, as a consequence of Covid-19. As a message of
solidarity with the company and the employees who are affected by
this crisis, the Executive Board and Executive Team have also
collectively agreed to reduce their base salary by 20% between May
and December 2020.
DONATIONS
In addition to the actions with local communities which are now
approaching a value of €5 million, on April 8 HEINEKEN announced a
donation of €15 million to support the International Federation of
Red Cross and Red Crescent Societies (IFRC) relief efforts for the
most vulnerable people affected by Covid-19, in particular in
Africa, Asia and Latin America.
Today, HEINEKEN is pleased to report that the de
Carvalho-Heineken family together with their holding company have
decided to donate €10 million to eight charities supporting the
Covid-19 relief efforts, four in the Netherlands and four
international. These organisations cover a number of different
needs, from support to affected communities to support of medical
health systems and medical research.
BUSINESS IMPACT AND MITIGATING ACTIONS
The initial impact of the Covid-19 crisis is visible in the
volume performance of this quarter and is expected to worsen in the
second quarter of 2020. The second half of the year is also
expected to be impacted, as lockdowns may be lifted but the impact
on the economy is likely to remain. Our results in 2020 will be
impacted by lower volumes and other effects, including:
- A significant risk of negative transactional and translational
currency impacts due to the devaluation of emerging markets
currencies versus the US dollar and the Euro.
- The increased risks on credit losses from customers, business
continuity of small suppliers, impairments and non-effective hedge
contracts.
Since the beginning, crisis management teams have been in place
at a global, regional and local level, to ensure a coordinated
response in regards to the health & safety of our employees,
business continuity and the implementation of mitigating
actions.
All discretionary expenses are being reduced. In particular,
international travel, corporate events and hiring for all positions
have been suspended. All non-committed CAPEX has also been
suspended, unless absolutely necessary for the immediate business
continuity or safety. Projects and technology upgrade programmes
are being temporarily paused or scaled down and will be revaluated.
Furthermore, bonuses for 2020 will be cancelled for Senior
Managers, including the Executive Board and the Executive
Team.
Operating companies are reducing and reallocating marketing
expenses and continuously assessing effectiveness under the current
environment. Consumer communication is being adapted to support
activities that help on-trade customers and reflect social
distancing.
Teams are quickly reacting to business changes. Service levels
to modern retailers have increased, focusing on key SKUs and shelf
replenishment, including outside-store hours service and direct
store delivery. Business-to-consumer initiatives are accelerated to
capture the growth of e-commerce
channels.
The lack of visibility on the end date of the Covid-19 pandemic
and the duration of its impact on the economy has led HEINEKEN to
withdraw all guidance for 2020.
FINANCING UPDATE
HEINEKEN entered the crisis with a strong balance sheet and an
undrawn committed revolving credit facility of €3.5 billion
maturing in 2024. There are no financial covenants in the
outstanding debt. In recent weeks, HEINEKEN has successfully
secured additional financing by issuing new bonds.
- On 18 March 2020, Heineken N.V. placed CHF 100 million of
5-year Notes with a coupon of 0.6375% privately.
- On 25 March 2020, HEINEKEN placed €600 million of 5-year Notes
with a coupon of 1.625% and €800 million of 10-year Notes with a
coupon of 2.25%. The notes were issued under the Company's Euro
Medium Term Note Programme and are listed on the Luxembourg Stock
Exchange. The proceeds from the Notes issuance will be used for
general corporate purposes. The maturity dates of the Notes are 30
March 2025 and 30 March 2030.
HEINEKEN is well prepared to meet its financial commitments,
including the €1 billion bond maturing on 4 August 2020 and the
final dividend for 2019 corresponding to €1.04 per share on 7
May 2020, subject to the approval of the Annual General Meeting on
23 April 2020.
HEINEKEN will deviate from its dividend policy and will not pay
an interim dividend following its half year results in August
2020.
REPORTED NET PROFIT
Reported net profit for the first three months of 2020 was €94
million (2019: €299 million), impacted by the volume drop in March
due to Covid-19 and limited benefit from the mitigation
actions.
TRANSLATIONAL CURRENCY UPDATE
HEINEKEN regularly provides an update of translational currency
impacts using its latest estimates available on operating profit
(beia) and net profit (beia) for the full year in local currencies
and the spot rates close to the date of the publication. Since the
latest update on 12 February 2020 many currencies have devaluated
significantly versus the Euro, especially the Mexican Peso,
Brazilian Real and Indonesian Rupiah. However, given the
uncertainty in profit estimations for this year it is not possible
to provide a reliable estimate of the translational currency
impact.
ENQUIRIES
Media |
Investors |
Tim van
der Zanden |
José
Federico Castillo Martinez |
Director of
Global Communication |
Director of
Investor Relations |
Michael
Fuchs |
Janine
Ackermann / Robin Achten |
Corporate &
Financial Communication Manager |
Investor Relations
Manager / Senior Analyst |
E-mail:
pressoffice@heineken.com |
E-mail:
investors@heineken.com |
Tel:
+31-20-5239355 |
Tel:
+31-20-5239590 |
Editorial information: HEINEKEN is the world's most
international brewer. It is the leading developer and marketer of
premium beer and cider brands. Led by the Heineken® brand, the
Group has a portfolio of more than 300 international, regional,
local and specialty beers and ciders. HEINEKEN is committed to
innovation, long-term brand investment, disciplined sales execution
and focused cost management. Through "Brewing a Better World",
sustainability is embedded in the business. HEINEKEN has a
well-balanced geographic footprint with leadership positions in
both developed and developing markets. It employs over 85,000
employees and operates breweries, malteries, cider plants and other
production facilities in more than 70 countries. Heineken N.V. and
Heineken Holding N.V. shares trade on the Euronext in Amsterdam.
Prices for the ordinary shares may be accessed on Bloomberg under
the symbols HEIA NA and HEIO NA and on Reuters under HEIN.AS and
HEIO.AS. HEINEKEN has two sponsored level 1 American Depositary
Receipt (ADR) programmes: Heineken N.V. (OTCQX: HEINY) and Heineken
Holding N.V. (OTCQX: HKHHY). Most recent information is available
on HEINEKEN's website: www.theHEINEKENcompany.com and follow us on
Twitter via @HEINEKENCorp.
Market Abuse Regulation This press release may contain inside
information within the meaning of Article 7(1) of the EU Market
Abuse Regulation.
Disclaimer: This press release contains forward-looking
statements with regard to the financial position and results of
HEINEKEN’s activities. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to
differ materially from those expressed in the forward-looking
statements. Many of these risks and uncertainties relate to factors
that are beyond HEINEKEN’s ability to control or estimate
precisely, such as future market and economic conditions, the
behaviour of other market participants, changes in consumer
preferences, the ability to successfully integrate acquired
businesses and achieve anticipated synergies, costs of raw
materials, interest-rate and exchange-rate fluctuations, changes in
tax rates, changes in law, change in pension costs, the actions of
government regulators and weather conditions. These and other risk
factors are detailed in HEINEKEN’s publicly filed annual reports.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only of the date of this
press release. HEINEKEN does not undertake any obligation to update
these forward-looking statements contained in this press release.
Market share estimates contained in this press release are based on
outside sources, such as specialised research institutes, in
combination with management estimates.
- Please click here for the full press release.
Grafico Azioni Heineken (EU:HEIA)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Heineken (EU:HEIA)
Storico
Da Apr 2023 a Apr 2024