Heineken Cautious On Outlook After June Pick-Up
Heineken saw a gradual recovery in its business after global COVID-19 lockdowns in April, but uncertainty over the future impact of the pandemic has left it unable to give a forecast for the rest of the year.
The world's second-largest brewer said that it is taking a more cautious view than sector leader Anheuser-Busch InBev, which said that it has been encouraged by the global recovery in beer demand in June.
New Heineken chief executive Dolf van den Brink said that business improved to June, but that this was partly due to restocking, particularly in territories such as Mexico, its largest market, where brewing was forced to halt in April and May.
"We are a bit concerned that people would see the...rate of June and extrapolate that going forward," Van den Brink, who took charge at the Dutch brewer on June 1, told Reuters.
The company said that Europe, Mexico and South Africa led the sales decline, while its large Vietnam market fared better.
South Africa has reinstated an alcohol ban, while Mexico has tighter lockdowns in some regions.
The maker of Heineken, Tiger and Strongbow cider issued preliminary first-half results in mid-July showing that it sold 11.5% less beer compared with the previous year and suffered a sharp drop in revenue as consumers opted for cheaper brews.
Operating Profit And Impairments
Heineken's operating profit fell by approximately half and the brewer took €548 million of impairments, largely for its operations in Papua New Guinea and Jamaica, resulting in an overall net loss.
Store Sales Vs Bar And Restaurant Sales
Europe's largest beer seller said that it has seen beer sales rise by double-digit percentages in stores, but fall by up to 40% or 50% in bars and restaurants.
Profitability of store sales was also lower as consumers bought multi-packs, and costs of producing canned and bottled drinks were higher than kegs, though Heineken said that its premium brands won share in most markets.