Heineken Doubles Profit, Nigeria Recorded Double-Digit Growth

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Heineken N.V. announces its 2021 half-year results report. Heineken® continued to show great momentum and grew volume by 26.8% in the second quarter to close the first half with a 19.6% increase, an increase of 16.7% versus 2019.

The brand grew double digits in more than 50 markets, most notably in Brazil, China, Vietnam, Nigeria, South Africa, Italy, Poland, Colombia and Mexico.

KEY HIGHLIGHTS

  • Net revenue (beia) €9,971 million, +14.1% organic growth
  • Net revenue (beia) organic growth per hectolitre +5.5%
  • Consolidated beer volume organic growth +9.6%
  • Heineken® volume +19.6%
  • Operating profit (beia) organic growth +109.3%
  • Net profit (beia) €896 million, +320.3% organic growth
  • Diluted EPS (beia) €1.56 (2020: €0.39)
  • EverGreen strategy deployment has started
  • Full-year expectations unchanged: financial results to remain below 2019.

Heineken® 0.0, now available in 95 markets, grew close to 40% in volume, with a particularly strong performance in Brazil, the USA, Mexico, the UK and Poland. Heineken® Silver more than quadrupled its volume, driven by strong growth in China and Vietnam.

Heineken® sponsored the EURO 2020 and invited fans to come together and be rivals again. The event attracted audiences across the world and the Final was the most-watched event since 2018 with a live audience of 272 million fans. Heineken® achieved the highest engagement across social channels, with the Heineken® “Star of the Match” activation accounting for more than 25% of all impressions and engagements across UEFA posts during the tournament.

Heineken Nigerian Brewerie

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Heineken® achieved great recognition with several awards for its recent creative work in the Cannes advertising festival in June, including a Grand Prix Outdoor for its “Shutter Ads” campaign and a special Silver Lion Entertainment for Sport for our “Don’t Drink & Start a League” post on social media.

The international brands’ portfolio grew in the mid-teens, supported by launches in new markets and consumer-focused innovations, with Amstel, Desperados and Birra Moretti ahead of the 2019 volume. Amstel grew in the high-twenties driven by strong growth in Brazil, Mexico, South Africa, Nigeria and had an encouraging start in China following its introduction in December 2020.

In partnership with tennis legend Rafa Nadal, the “Choose Your Way to Live” campaign was launched to support Amstel 0.0 and Amstel Ultra®, reinforcing the importance of moderation as part of an active and balanced lifestyle.

Desperados increased in the high-twenties, recruiting a more unisex and young adult consumer base in established European markets, Ivory Coast and Nigeria with its expanding portfolio of flavoured and 0.0 line extensions. Birra Moretti, with high-twenties growth, benefited from strong demand in the UK and Romania, a successful launch in the Netherlands and a new premium line extension in Italy – Birra Moretti Filtrata a Freddo.

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Sol grew in the low-teens driven by Chile, Mexico and South Africa. In contrast, Tiger was negatively impacted by restrictions in Vietnam and Cambodia, only partially offset by growth in Nigeria, Malaysia and South Korea. Tiger Crystal continued its strong performance across the Asia Pacific and was launched in Brazil in July.

Cider volume grew mid-single digits to 2.2 million hectolitres. Strong growth in South Africa, Russia and Mexico, plus the addition of Strongbow in Australia, more than offset the high-single-digit decline in the UK. The UK launched Inch’s Cider, a brand with sustainability at its heart and aimed at young adults.

Low & No-Alcohol (LONO) volume increased in the low-twenties to 7.5 million hectolitres, with double-digit growth across all regions other than Europe, which grew close to 10%. The non-alcoholic beer and cider portfolio grew in the high-teens as growth continues in Europe, and volume more than doubled in the Americas. The growth was led by Heineken® 0.0 and was complemented by a range of new zero line extensions, including Desperados Virgin Mojito and Lagunitas Non-Alcohol IPA.

Following our entry into the Hard Seltzer category last year, we launched Pura Piraña in Portugal, Ireland, the UK, Spain, Austria, the Netherlands and France. We expanded the portfolio in Mexico with Amstel Ultra Seltzer. In the US, we entered this competitive category by leveraging our portfolio, with Dos Equis Ranch Water, and with the AriZona SunRise brand through a long-term partnership.

NET PROFIT

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Net profit (beia) increased 320.3% organically to €896 million (2020: €227 million). The relative increase was higher than the increase in operating profit (beia) due to a low level of net profit last year, lower interest and net finance expenses in combination with a lower effective tax rate.

The impact of exceptional items and amortisation of acquisition-related intangibles (eia) on net profit was a benefit of €138 million (2020: €524 million expense), including a benefit of €243 million from tax credits in Brazil.

Net profit was €1,034 million (2020: €297 million loss).

DOLF VAN DEN BRINK, CHAIRMAN OF THE EXECUTIVE BOARD / CEO COMMENTED,

“We are pleased to report a strong set of results for the first half-year, whilst the pandemic continues to impact the world and our business. I would like to thank our teams for their resilience and continued focus on safety. They were fast to service our customers and consumers when markets reopened, yet remained agile where restrictions were reintroduced.

Beer volume grew +9.6%, led by strong growth in Heineken® of 19.6% with over 50 markets in double-digit growth. Our operating profit (beia) more than doubled driven by top-line leverage, continued cost mitigations and structural cost savings, further helped by the phasing of marketing and sales expenses into the second half.

There is early momentum building towards EverGreen: we are strengthening our ability to drive consumer-centric innovation, building traction on our productivity programme and shaping our path to meet our Brew a Better World commitments.

Yet there is the reason for caution too. Firstly, COVID-19 remains a factor, with the biggest impact currently in key markets in Asia and Africa. Secondly, we see a rise in commodity costs, which, at current levels, will start affecting us in the second half of this year and have a material effect in 2022. Overall, we expect full-year financial results to remain below 2019.”

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