BRUSSELS (Reuters) – Heineken cast doubt on its mid-term profit margin target due to the significant impact of inflation, after reporting stronger than expected earnings in 2021 from higher prices and cost savings.
The world’s second largest brewer said on Wednesday the COVID-19 pandemic would still affect 2022 revenues and the impact from inflation and supply chain pressures would be significant.
“Overall we expect a stable to modest sequential improvement in operating profit (beia) in 2022,” the company said in a statement, referring to figures before exceptional items and amortisation.
The maker of Europe’s top-selling lager Heineken, Tiger, Sol and Strongbow cider said that it still aimed for an operating profit margin of 17% in 2023, but that there was “increased uncertainty” given the economic environment and rising input costs.
It said it would update its 2023 guidance later in the year.
The Dutch brewer sold 4.6% more beer in 2021 than in 2020, with increases in all regions except Asia, and price increases and a shift to more expensive beers driving net revenue up 12.2%.
The company’s operating profit rose 43.8% higher on a like-for-like basis to 3.41 billion euros ($3.87 billion), above the company-compiled consensus for 3.30 billion euros. Heineken had previously said its 2021 results would be below those of pre-pandemic 2019.
Heineken said it had now achieved 1.3 billion euros of an overall 2 billion euro saving plan that involves shedding 8,000 jobs.
($1 = 0.8804 euros)
(Reporting by Philip Blenkinsop; Editing by Clarence Fernandez and Muralikumar Anantharaman)
