just On Call - Vietnam volume slip disappoints Heineken in Q1
Heineken's Tiger brand is helping it gain market share in Vietnam, the brewer said
Heineken's CFO has admitted being disappointed at the group's first-quarter performance in one of its key markets, Vietnam, but said the company is still stealing marketshare in the country.
Speaking to analysts today (24 April) following a trading update by the Dutch brewer, Rene Hoft Graafland pointed out that the company was cycling 25% prior-year growth in volumes in Vietnam. “It was a very difficult quarter to match,” he said. However, he flagged that the Vietnamese New Year trading period was a “bit disappointing”.
Graafland added: “Consumer confidence is also a bit lower, so the market is slowing down.”
Vietnam joined Malaysia, Cambodia, Taiwan and New Zealand as markets in the Asia-Pacfic region where Heineken saw a drop in first-quarter volumes.
However, Graafland said Heineken was still “winning market share” in Vietnam driven by the Tiger brand, which it took full control of through its acquisition of Asia Pacific Breweries in 2012.
Meanwhile, asked about a 37% drop in reported group net profits, Graafland said this was due to “incidental or exceptional items”.
He pointed out that the group's Q1 net profits before exceptional items and amortisation were “higher than last year”. “The aim of this update is to guide you on the top line. We wanted to reassure you the profitability was above last year,” he said.
A Heineken spokesperson later told just-drinks that reported net profit was affected by “adverse” currency exchange rates and an exceptional benefit in last year's Q1 of around EUR80m (US$110.6m) from a disposal in Kazakhstan. “There were also some one off exceptionals this year relating to restructuring in Europe,” the spokesperson added.
To read an exclusive just-drinks interview with Heineken's Asia-Pacific president, click here.
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