Heineken – a mixed geographic picture

by | Aug 2, 2021

Photo of Heineken beer

Heineken’s first half net revenue rose 14.1% organically to €10.0bn, driven by an 8.2% increase in total volumes and a 5.5% increase in revenue per hectolitre. Consolidated beer volume rose 9.6%. Underlying operating profit rose 109.3% to €1.6bn as the group recovered after a difficult first half in 2020. Compared to 2019 operating profit is still down 9%.


Heineken expects costs to increase in the second half of 2021 and in 2022, partly due to increased commodity prices. Management plans to be “assertive on pricing” to meet this challenge, but expects a lower operating profit margin the second half and results will remain behind 2019.

Heineken is restoring the interim dividend at €0.28 per share.

The shares were broadly flat following the announcement.

William Ryder, equity analyst at Hargreaves Lansdown:

“The recovery is getting underway at Heineken, and most of the numbers look much merrier than they did in 2020 when Covid first struck. However, the regional picture is more mixed, and it really depends how the timing of the various Covid waves has worked out. Some countries, like the UK, are pretty much back to normal – even if only recently. Other regions like Asia Pacific have had a first half blighted by lockdowns. The overall direction of travel looks positive though, and if the current wave stays under control in the UK it will augur well for other countries who may be a few steps behind.

Heineken did sound a word of caution on margins and cost inflation. This is starting to become a pattern across a few industries, although it’s still not clear how much is temporary Covid disruption and how much is genuine underlying inflation. Either way, Heineken is adopting an “assertive” pricing strategy, but nonetheless expects margins to come under pressure. This is something to watch, and in an inflationary environment brand strength will be more important than ever.

Heineken also added called out the driver shortage here in the UK. This is undoubtedly disruptive for the group, but in our view it should sort itself out over time. There’s no fundamental, long term shortage of drivers in this country, it will just take some time for the market to adjust and new drivers to get qualified, and compensation may need to rise to attract new hires. We don’t think this will be a long term source of problems for Heineken.”

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