Heineken’s profits soar on zero-alcohol beer, warm European weather

Heineken N.V. on Monday reported a 49% profit growth in half-year, helped by its new zero-alcohol beer introduced in Europe in May and a warmer weather in Europe.

The company said that half-year profit to the end of June rose to €871m ($1.02bn), from €586m in the previous year.

“We delivered strong results in the half-year, with all four regions contributing positively to organic growth in volume, revenue and operating profit,” CEO Jean-Francois van Boxmeer said.

Heineken launched an alcohol-free version of its namesake brand in Europe in May, and the firm said the results “already looks promising”.

Brewers earn higher profit margins from non-alcoholic beer because they are exempt from excise tax and also sell at a premium.

The company said that beer volumes in France, Italy, Spain and Portugal were the strongest.

The surge in profit came on the back of a 3.8% sales lift in the first six months of the year. Revenue rose to €10.47bn, from €10.09bn from the prior year.

Beyond Europe, the brewer said there was strong growth in Asia. Vietnam, one of its top markets continued to roar. There were also turnarounds from weak first quarters in Africa and the Americas.

The company notes that volumes grew in Ethiopia, South Africa and Mexico, which more than compensated for the lower volumes in Nigeria, Brazil and to some extent the United States.

“If you look at volume around the world, it’s a very balanced performance between price increase, mix development and volume,” said Laurence Debroux, chief financial officer, Heineken N.V.

“Balanced volume growth in Europe, good volumes in Vietnam, particularly for the Tiger brand, and you see a bit of recovery in some countries in Africa.”

Heineken said it is expecting revenue and profit growth for the year, excluding its acquisition of Japan’s Kirin Brazilian unit. It put a figure of 0.4% improvement in operating margin.

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