Heineken up in third quarter but growth rate slowing as year progresses – results data

Heineken has retained its mid-single-digit sales increase rate in the most recent quarter, despite dipping slightly on performance in the first half of 2023.

The company, which saw its top-line increase by 6.6% in the six months to the end of June, today reported a lift of 4.5% in the subsequent quarter, to the end of September. Combined, year-to-date sales stand at +5.8%, although volumes for the nine months are down 5.1%.

The criss-cross movement of value to volume was put down to "lower consumer demand following [the implementation of] inflation-led pricing", although the group noted improving volumes in the third quarter "and into September in the case of Europe". The namesake beer brand delivered a 2.3% lift in volumes in Q3 thanks in part to extensions Heineken 0.0 and Heineken Silver, the latter leaping in volumes terms by approaching 40%.

Geographically speaking, the 'Asia Pacific' region was the one blackspot for Heineken, with the other three reporting regions delivering increases in sales by value. While macro-economic challenges remain in Asia Pacific, most notably in Vietnam where Heineken's sales slid by "low teens", the region's 0.9% dip compares favourably with its -6.9% showing in the first six months of this year.

Elsewhere, inventory level consolidation by US distributors - which is impacting the beverage alcohol industry more widely right now - resulted in a sales decline in the country, offset by healthy rises in Brazil in Mexico. As a result, sales in the 'Americas' were up 5.5% in Q3.

Unimpressive weather over the summer in the 'Europe' reporting region, meanwhile, pulled volumes down 8.4% although value sales increased by just under 4%. Finally, 'Africa, the Middle East & Eastern Europe' was up 9.6% in sales by value, despite drags from Nigeria and South Africa, the former market being hit by "significant inflation and currency devaluation".

"We continue to ... see gradual improvement in our business performance, although somewhat slower than our ambition," said CEO Dolf van den Brink today. "In half of our markets, volume trends are improving. Similarly, in just over half of our markets, we are gaining or holding market share.

"Whilst inflation-led pricing is tapering, we observe a slowdown of consumer demand in various markets facing challenging macro-economic conditions. All in all, the [organic] operating profit guidance range for 2023 remains unchanged."

The brewer's share price took a tumble three months ago, when half-year results revealed a 5.6% slide in volumes for the first six months of 2023. Today's figures, however, prompted an improvement of sorts as the company held its full-year profits forecast.

Heineken's official Q3 & YTD results announcement.

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