Heineken, the world's second-largest brewer, repeated its forecast of a profit increase this year despite weakness in Europe, as it reported a higher-than-expected 2022 profit on the back of a recovery in beer drinking to pre-pandemic levels.
The Dutch-based company whose brands include Tiger and Sol said operating profit would grow but at a slower mid- to high-single-digit percentage rate in 2023, reflecting continued cost savings, a challenging economy and lower consumer confidence in some markets.
The brewer - whose namesake brand is Europe's top-selling beer - retained its forecast of stable to slightly higher beer volumes, as rises in developing markets are countered by a decline in Europe, its largest region in revenue terms.
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Chief executive Dolf van den Brink said beer sales in Europe had proven resilient, with a rise in the fourth quarter from a year earlier.
"But given the price increases that will have to be taken due to the enormous increase in energy costs, particularly in Europe, we still expect declining volumes in Europe for the year 2023," he told Reuters in a telephone interview.
At 0820 GMT on Wednesday 15 February, the shares were up 1.6%.
Heineken expected sharply higher costs from energy, particularly in Europe, and for inputs, such as barley, which were set to rise by a high-teen percentage in 2023.
The brewer said it would seek to pass on most of the extra costs, but was ready to use cost savings to make up the difference if it felt price hikes might lose too much market share. Last year, it raised prices globally by about 10%.
Heineken said its operating profit before one-offs rose by 24.0% to €4.50 billion in 2022, compared with an average forecast of 4.43 billion in a company-compiled poll.
Its operating profit margin edged up by 0.1 percentage points to 15.7%. It previously forecast the margin would be stable or slightly higher in 2022.
Heineken said it expects to exceed the 2 billion euro cost-savings target of its "EverGreen" strategic revamp this year, having hit €1.7 billion in 2022.
The brewer sold 6.9% more beer globally than in 2021, with higher-priced premium beers rising at a faster pace. Sales in Asia were up by nearly a third, the rebound coming a year after COVID-19 restrictions were in place in Cambodia, Indonesia, Malaysia and its largest Asian market, Vietnam.
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