Focus - Heineken's H1 Performance by Region
Heineken's Desperados brand found volumes growth in France
Earlier today, Heineken reported a slight fall in H1 net profits and sales but a rise in global volumes. Here, just-drinks takes a closer look at the group's performance by region and brand:
The group's sales in the region grew by 5.1% organically driven by total volume growth of 5.7%. Group beer volumes increased by 6.5%.
Volumes in the UK climbed by mid-single digits driven by a strong performance in the off-trade, Heineken said. The launches of Old Mout cider and new flavour variants under the Bulmers and Strongbow brands drove “solid” growth in cider volumes, Heineken said. Foster’s, Kronenbourg 1664, brand Heineken, Desperados and Sol all achieved “solid volume gains”, the brewer added.
Volumes in France grew by double digits because of destocking in last year's Q1 and Heineken's two premium brands, brand Heineken and Desperados, both posted double digit growth.
Heineke flagged positive volumes growth in Spain as consumer confidence increased, while volumes in the Netherlands jumped by high-single digits.
Central & Eastern Europe
Sales declined by 2.3% organically, while total volumes were down 5%, the group said. Lower profits in Poland, Slovakia, Romania and Greece were only partly offset by improved profitability in Russia, Austria and Croatia. The group's beer volumes fell by 4.2% in the first half of the year because of poor weather and flooding in the second quarter and ongoing “challenging economic conditions”, Heineken said.
There was low-double digit volume declines in Russia in the first half of the year and market share loss. Volumes in Poland declined in the low-single digits while volume in Romania declined in the high-single digits. Volumes in Greece dropped back in the low-single digits and volumes in Austria were up in the mid-single digits.
Heineken's first-half sales increased by 8.3% organically in the region, with total volumes growth of 4.7% and higher sales per hectolitre of 3.6%. Its group beer volumes increased by 4.7% organically.
In Mexico, volumes increased in the low-single digits in the first half while in the US, sales to retailers grew by 0.9% (sales to wholesalers were up 2%) in the first half, outperforming the beer market and resulting in continued share gains, Heineken said. Continued double digit growth of Dos Equis and Tecate Light was a key driver of volumes growth. In the second quarter, sales to retailers increased by 2.3%, with sales to wholesalers up 4.9%.
Volumes in Brazil grew in the low double digits reflecting increased consumer spending around the World Cup football event. Sales per hectolitre were up in the double digits.
Africa and Middle East
The brewer's sales rose by 5.7% organically in the region as total volumes climbed by 7.8%. Sales per hectolitre were down 2.1%. Group beer volumes increased 8.1% organically, led by Nigeria, the Democratic Republic of Congo, Rwanda, Cameroon and the Republic of Congo.
In Nigeria, volumes were up in the high-single digits led by the Heineken, 33 Export and Goldberg brands as well as malted beverage products. Volumes in Egypt grew in the low-single digits in the first half of the year. However, Heineken said the volumes outlook for the second half of the year remains uncertain following the recent announcement of a doubling in beer excise and other duties and a reduction in energy subsidies in the country.
Volumes of the Brandhouse JV in South Africa increased “marginally” led by growth of the Heineken and Windhoek brands, Heineken said. Volumes of the Amstel brand declined slightly, the brewer added.
First-half sales in the region increased by 3.5% organically, with total volumes up 2.6% and sales per hectolitre edging up 0.9%. Reported sales declined because of foreign currency movements in Indonesia, Vietnam and Papua New Guinea, Heineken said. Group beer volumes growth in the second quarter accelerated to 5.8%, while in the first half they increased by 2.8%.
Higher volumes in Vietnam, China, Indonesia, Papua New Guinea, Cambodia, Taiwan, South Korea and India were only partly offset by lower volumes in New Zealand, Singapore, Malaysia and Thailand.
Volumes in Vietnam improved in the second quarter after a Q1 drop, resulting in mid-single digit growth in the first half of the year. The Tiger brand continued to grow strongly with lower volumes of the Heineken brand. In China, volumes were up in the high-single digits with double digit growth for brand Heineken. Volumes in Indonesia increased “moderately” primarily reflecting the impact of a significant excise duty increase at the start of the year and reduced supply availability of soft drinks, Heineken said. Volumes of the Bintang brand grew in the mid-single digits, partly offset by lower volumes of the licensed Guinness brand.
Volumes in India were slightly ahead of last year with improved growth trends following the national elections held in April and May, the company said.
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