Heineken posts slight volume increase in Q1 amid continued macroeconomic challenges

Heineken N.V reported its first quarter 2017 results on Wednesday, posting a slight beer volume increase of 0.6% due to strong sales in Asia and Europe.

The world’s second largest brewer which reported €293m in profit in the first three months of 2017 compared to €265m a year earlier saw its sharpest beer volume increase in Asia Pacific region, with a 5.4% growth led by Cambodia, and a modest increase of 0.5% in Europe, driven by improvements in France, Spain, the Netherlands, Italy and Austria.

Africa, Middle East & Eastern Europe saw a 0.4% decline in organic growth, with volumes in Nigeria declining mid-single digit. The company states that underlying trading conditions in Nigeria remained difficult, as consumers continue to trade down. While there appears to be signs of liquidity improvements, it is still difficult to secure hard currency.

South Africa and Ethiopia was a better comparative for the brewer as both countries saw strong volume growth in the double digit, while Russia posted volume declines due to the temporary delisting of a trade customer and deliberate destocking.

In the Americas, organic beer volume declined 0.7%, due to continued macroeconomic weakness in Brazil and competition in the mainstream and economy segment. However, the company’s premium brands outperformed with Heineken brand and Amstel delivering strong growth.

Mexico was a bright spot for the brewer, with volume up in the mid-single digit, as Tecate, Tecate light and Heineken brand all performed well.

The U.S. market posted low single digit decline, with growth in Heineken brand offset by lower volumes of Tecate and Dos Equis.

Jean-Francois van Boxmeer, Chairman & CEO of Heineken said:

Performance in the first quarter was in line with expectations, delivering volume growth against strong comparatives last year. Asia Pacific continued to outperform and volume in Europe was solid.

In Africa, Middle East & Eastern Europe market conditions remain challenging, adversely impacting volume. In Americas, whilst Mexican volume was good this was more than offset by weaker volume in Brazil. Our full year expectations remain unchanged.

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