Challenging Year For Heineken
Heineken has posted a 1.3% increase in 2013 group revenue to €21.3 billion, despite a 2.7% decline in group beer volumes. Group operating profit (beia) increased 2.8% and grew 0.6% organically to €3.192 billion, and group operating margin expanded by 20 basis points from 14.8% to 15.0%. Net profit (beia) of €1.59 million was 2% lower on an organic basis.
Organically, group revenue grew 0.1%, with lower volume offset by higher pricing and positive sales mix, driving a 2.7% increase in group revenue per hectolitre. The 2.7% organic decline in group beer volume reflected reduced consumer spending in Europe. In addition, slower economic growth and social unrest impeded volume development in key developing markets. In the second half of the year, group revenue grew 0.8% organically, reflecting improved trading conditions in Western Europe and several key markets in the Americas and Africa Middle East regions.
Group operating profit (beia) grew 0.6%, on an organic basis, as the benefit of higher revenue and TCM2 pre-tax cost savings of €300 million was partly offset by higher marketing and selling expense and input costs. Group operating profit (beia) in developing markets grew around 3% organically, reflecting strong profit contributions from Mexico, Nigeria and APB markets, partly offset by lower profitability in a number of key markets in Central and Eastern Europe.
Jean-François van Boxmeer, chairman and chief executive of Heineken.
Jean-François van Boxmeer, chairman and chief executive of Heineken, comments: “2013 was a challenging year as slower economic growth in a number of key markets and adverse regulatory developments impacted performance. However, we increased investments in our premium brand portfolio and innovation. This helped to drive higher revenue per hectolitre and market share gains in a number of important markets. Our volume performance improved in the second half of the year in Western Europe and Africa Middle East. TCM2 generated €300 million of cost savings, driving higher operating margins.”
He adds: “Whilst the performance of developing markets was not as strong as expected, they now account for nearly half of group revenues and remain strong platforms for long-term growth. We will continue to invest in and focus on the execution of our strategic priorities to drive future growth.”
In 2014, Heineken expects a gradual recovery in the global economy to underpin improved trading conditions in several of its key markets. This, together with a continued focus on effectively executing against the group’s strategic priorities is expected to drive an improved business performance in 2014, and support sustainable revenue and profit growth.
Heineken expects to realise its targeted TCM2 savings of €625 million covering 2012-2014 during the year.
