Heineken sold more beer than anticipated in the first quarter, marking its first quarterly year-on-year growth in volumes in a year, while also adhering to its forecast for profit growth in 2024.
On Wednesday, the world’s second-largest brewer announced that beer volumes experienced a 4.7% organic increase during the January-March period. This surpasses the 2.5% growth anticipated by analysts in a poll provided by the company.
Its shares climbed by up to 1.6%, but later trimmed some of the gains, trading 0.4% higher by 0805 GMT.
Heineken’s primary focus this year is on reviving volume growth, which took a hit in 2023 due to price hikes aimed at offsetting escalating costs spanning from energy to barley.
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In a statement, CEO Dolf van den Brink highlighted that all regions experienced increased volume and net revenue.
He further noted that the quarter benefitted from an earlier Easter and one-time effects.
Nevertheless, the brewery indicated that it still perceives the economic environment as “challenging and uncertain.”
“While we had a strong beginning to the year, we caution against extrapolating the reported top-line growth for the remainder of the year,” the company stated.
In February, Heineken disappointed investors by providing a broad forecast range for operating profit growth, suggesting it could fall anywhere between low to high single-digit percentages for the year.
Its cautious outlook at the beginning of the year was partly influenced by uncertainty in two crucial markets, Vietnam and Nigeria, where economic conditions had weighed on its performance the previous year.
Heineken reported that total volume in Nigeria increased by nearly 20%. In Vietnam, where destocking was necessary last year, volume saw a low-teens growth.
Analyst Laurence Whyatt from Barclays highlighted a rebound in the high-margin market of Vietnam, along with promising performances in Mexico and Brazil.
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“In our assessment, it’s undeniable that the underlying business seems to have turned a corner, and we anticipate further improvements throughout the year,” he stated in a note.
Heineken reported that its namesake brand claimed the top position by value in the quarter in Brazil, with beer volume experiencing a high-single-digit growth.
Before considering one-time items, net revenue increased organically by 9.4% to 6.85 billion euros ($7.33 billion), surpassing analysts’ expectations of 7.2% growth. However, currency translation decreased this figure by 4.6%, according to Heineken.