World: Heineken Q3 sales drop as lockdowns return in Asia
Heineken sold less beer in the third quarter as the return of lockdowns in Asia cut into drinking and socialising, hurting sales at the worlds second-largest brewer, the Financial Times reported on October 27.
The Dutch group said volumes of beer sold declined 5.1 per cent on an organic basis which strips out the impact of acquisitions and disposals in the three months to September, mainly because of a 37.4 per cent decline in Asian sales.
The drop, which was worse than analysts had expected, resulted from the return of pandemic restrictions in Vietnam, Cambodia, Indonesia and Malaysia as Covid-19 surged, the brewer said. Heineken has an especially strong presence in Vietnam, one of its largest markets globally.
Not all of Asia has been affected: beer sales in Singapore, South Korea and Laos were back above pre-pandemic levels, added Heineken, which also brews the Amstel, Sol and Tiger brands.
Dolf van den Brink, chief executive, said: As anticipated, our Asia Pacific region was deeply impacted by the pandemic in the third quarter. We see first signs of recovery and I admire the resilience and solidarity of our people as we navigate these challenges.
He said the groups expectations for its full-year performance remained unchanged, with results for 2021 set to come in below those of two years ago, before the pandemic began.
Heineken has suffered from the impact of the pandemic on socialising globally, and in February announced 8,000 job cuts along with 2bn of savings over two years.
Simon Hales, analyst at Citi, said before Wednesdays trading update that the efficiency programmes would leave the group relatively well-positioned to deal with the steep cost inflation that is affecting companies across food, drinks and consumer goods.
Van den Brink said: The macro environment remains volatile and we are responding accordingly. We are taking an assertive approach to pricing and cost across all of our markets to meet this challenge.
Sales in Africa, the Middle East and Europe rose 5.5 per cent in the quarter, but those in the Americas and Europe declined, 3.4 per cent and 2.3 per cent respectively. Heineken did not provide figures on pricing or margins.
With beer volume growth in Europe and the Americas missing expectations too, this was not a vintage quarter for Heineken, said James Edwardes Jones, analyst at RBC Capital Markets.
The groups larger rival, Anheuser-Busch InBev, is due to report third-quarter figures on Thursday, October 26.