Heineken NV (HEIN.AS) on Monday posted higher-than-expected first-half earnings, as consumers bought more beer despite inflationary pressures, but the world’s second-largest brewer shelved its margin target for 2023 as costs spiked.
The brewer of Heineken, Europe’s top-selling lager, Tiger, Sol and Strongbow cider, said operating profit before one-offs rose by 24.6 per cent to 2.16 billion euros ($2.21 billion), against the consensus of a 17 per cent increase in a company-compiled poll.
Heineken previously set a target to raise its operating margin to 17 per cent in 2023, but it cast doubts in February on achieving that due to increased economic uncertainty and sharply higher input costs.
The market expectation before Monday’s results was a margin of 16 per cent next year, the same level as achieved in the first half of 2022.
Heineken also repeated its outlook that its margin would be stable or increase modestly this year. For 2023, it said its objective now was for a mid-to-high-single-digit percentage increase in operating profit itself.
For the first half, Heineken reported a 7.6 per cent rise in beer volume, with an acceleration in the second quarter and expansion in all regions, notably Asia-Pacific recovering from COVID-19 lockdowns, and solid Americas and Europe, where more consumers were drinking at bars or restaurants.
Heineken, as market leader Anheuser-Busch InBev (ABI.BR) last week, said it benefited from price hikes and consumers shifting to more expensive “premium” beers, such as the Heineken brand in major markets Brazil, China and Vietnam.