Dutch brewer Heineken's profit hit by 'disappointing performance' in Vietnam

The company's overall growth also declined by (-) 5.6 percent.

The company said its revenue for the first half of 2023 was 17,436 million (2022: 16,401 million).

Net revenue (beia) increased 6.6 per cent organically; a combination of a 5.4 per cent decline in total consolidated volume and a 12.7 per cent increase in net revenue (beia) per hectolitre.

The underlying price mix on a constant geographic basis was up 11.8 per cent, principally driven by the strong inflation-led pricing, whilst the mix was slightly positively driven by premiumisation.

The company blamed a 'disappointing performance' in Vietnam and 'socio-economic volatility' in Nigeria as the factors affecting consumer off-take accounted for over half of the decline in the first six months.

"The Americas region was impacted by a soft beer market, notably in the second quarter, combined with the continuing impact from OXXO mixing in Mexico," read the statement issued by the company.

"Volume in Europe performed broadly in line with our expectations for the first six months," the brewer said.

The company said premium beer volume declined by 6.5%, driven by Vietnam and Russia. Outside these markets, premiumisation trends remain strong as premium volume grew by a low-single-digit, ahead of the total beer portfolio in aggregate and in more than half of our markets.

The company said Heineken continued to lead our portfolio and grew volume by 1.2 per cent (2.1 per cent excluding Russia) in the second quarter to close the first half with a 1.7 per cent increase (3.7 per cent excluding Russia).

Growth was broad-based across 50 markets, most notably in China, Brazil, Mexico, Ethiopia, Panama, Portugal, Croatia and Algeria.

Heineken Silver is now present in 45 markets and grew volume by more than forty-five per cent, led by China, Vietnam and Mexico.

Speaking on the performance of the company, CEO Dolf van den Brink said in a statement: "In Europe, the region with the highest inflationary impact, volume declined in line with our expectations, yet demand in APAC was considerably softer than foreseen, due to an economic slowdown and our own underperformance in Vietnam."

He said: "In the second half, we expect pricing to moderate with volume trends gradually improving to a low-single-digit decline."

"On productivity, we expect a significant acceleration relative to the €200 million in gross savings of the first half," he said.

"Overall, we expect a strong turnaround in operating profit (beia) growth in the second half and for the full year expect stable to a mid-single-digit operating profit (beia) organic growth," he said.