Heineken Sales Decline; Scraps 2020 Guidance Due To COVID-19 Crisis
Heineken has revealed that it suffered a decline in beer sales during the first three months of the year and forecast worse to come in the second quarter due to the COVID-19 crisis.
The brewer of Heineken, Tiger and Sol beers and Strongbow cider said that it believes that beer sales fell by 2% in the first quarter and that overall volumes, including cider and soft drinks, fell by 4%.
"The impact is expected to worsen in the second quarter," the company said in a statement.
The Dutch brewer said that it will not carry out permanent layoffs as a consequence of the crisis during 2020 and that it will continue to pay suppliers based on agreed payment terms, with early payments to those that were smaller and more vulnerable.
It said that it entered the crisis with a strong balance sheet and undrawn committed credit facilities, and that it has secured additional financing on the debt market in recent weeks. It placed €1.4 billion of five- and 10-year notes in late March.
Heineken, the major markets of which are Brazil, Mexico and Vietnam, said that it will provide more information on its actions to mitigate the impact of the coronavirus crisis in its first quarter trading update on April 22.
"In any case, the lack of visibility on the end date of the COVID-19 pandemic and the duration of its impact on the economy leads Heineken to withdraw all guidance for 2020," it said.
In February, it had said that it expected revenue growth and a mid-single digit percentage increase of its operating profit before exceptional items.