Heineken backed its earnings outlook for the year after sales volumes picked up pace over the second quarter, boosted by premium labels and lower-alcohol products and despite continued weakness in some key beer markets.
The Dutch brewer said Wednesday that total volumes were 1.9% higher organically on year between April and June, picking up pace from the 1.2% growth booked over the first quarter. That boosted net revenue for the half-year to 14.83 billion euros ($17.10 billion) and operating profit to 2.17 billion euros, according to Heineken's preferred BEIA accounting method. Net profit rose 10% on year to 1.26 billion euros.
"Heineken delivered strong first-half results overall," analysts at JPMorgan wrote in a note following the update.
That was despite a continued slide in the Americas region, where sluggish demand saw total volumes decrease more than 4% on year despite some uplift from the FIFA soccer world championship that kicked off in June across the U.S., Canada and Mexico.
"There was a World Cup boost," finance chief Harold van den Broek told reporters in a call. "But not enough to lift the market into significant growth."
European volumes were meanwhile barely positive, growing 0.2% on year. By contrast, Asia-Pacific volumes climbed close to 10% on year.
Van de Broek said the company remained prudent amid macroeconomic and geopolitical uncertainty. He backed the group's medium-term strategy to speed up growth and boost productivity and performance ahead of the imminent arrival of a new chief executive.
Heineken in June said Rafael Oliveira, formerly boss of coffee-and-tea maker JDE Peet's, would take the reins from Dolf van den Brink, a company veteran who led the company for six years before stepping down at the start of this year.
Oliveira "understands fast-moving consumer goods, understands the landscape," Van den Broek said. The new CEO will take some time to get to know the company before updating the market on his plans, Van den Broek said.
The pickup in volumes adds to signs that new markets and a focus on more premium labels can help the world's brewers out of a lengthy slump. AB InBev, brewer of Bud Light and Corona, said last week that volumes rose more than expected over the most recent quarter, helped in part by a better mix of its pricier labels, as well as by the FIFA World Cup. Heineken is aiming to get some impetus back into key markets through product innovation, Van den Broek said, pointing to the launch in Brazil of the low-alcohol, low-calorie and gluten-free Heineken Ultimate.
"Customers want worth-their-money new news in order to enter the category," he said.
Heineken meanwhile backed its outlook for the year of 2%-6% growth in operating profit, aided by planned cost savings of up to 500 million euros for the year. Heineken said earlier this year that it would cut thousands of jobs to contend with a weaker beer market, part of a plan aiming to save between 400 million and 500 million euros a year.
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