just On Call - Heineken "buckles up" for uncertain future
Heineken released its H1 results today
The head of Heineken has warned investors to “buckle up” as economic uncertainty leaves the Dutch brewer with a “volatile” outlook.
The group's chairman & CEO, Jean-François van Boxmeer, told analysts in a call today (21 August) there is “turbulent weather” in the global marketplace. But van Boxmeer said the group will continue to expand into new markets with higher growth potential than developed markets such as Western Europe, where demand has weakened this year.
“You have to surf the wave, you can't break the wave,” van Boxmeer said.
The CEO was speaking after the release of disappointing first-half results, which Heineken blamed on high unemployment and weak consumer demand in its core Western Europe market.
Developing markets, however, delivered 7% organic operating profit growth and van Boxmeer said the brewer is “transforming the footprint of our business” towards markets with young population growth, high urban growth and developing middle classes.
Nigeria is one of Heineken's biggest developing markets, accounting for about half of the group's African earnings, but van Boxmeer said a slowdown in the country is “taking longer than anticipated” to recover from.
“Nigeria is a market of solid growth but the question is, will we see that in Q2 or will it be next year?” he said.
Heineken has owned a brewery in Nigeria since 2003, however the country's high growth slowed down in Q2 last year. At the time, van Boxmeer said “we don't think that (the slowdown) is a trend going forward”, but growth has remained sluggish due to inflationary pressures.
Van Boxmeer today remained bullish about Nigeria's potential. “In developing markets, there are blips, but they are not going to stop the emerging middle class phenomenon,” he said.
- Boom time for soft drinks in West Europe?
- Protein interest offers drinks opportunities - NPD
- The category today - Scotch Whisky I
- Patron's lesson for the broader spirits sector
- Alcohol and the risk of breast cancer - ISFAR
- Analysts clash over AB InBev SAB Brexit impact
- Pernod switches Travel Retail Europe op's director
- AB InBev unveils Stella Artois three-packs
- Rum "yet to maximise" GTR potential - Bacardi
- SABMiller issues currency alert as Africa weakens
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global RTD insights - market forecasts, product innovation and consumer trends
- Keurig Green Mountain in Hot Drinks (World)
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends