FDBusiness.com

Heineken has posted a 5% increase in organic revenue (beia) to €21.91 billion for 2017 with revenue (beia) per hectolitre up by2.1% as consolidated beer volume rose by 3.0% with growth in all regions. Operating profit (beia) grew 9.3% organically during the year, primarily reflecting higher revenue and cost efficiencies. The group’s operating margin improved by 40 bps excluding the Brasil Kirin, Punch and Lagunitas acquisitions, and net profit at €2.247 billion was up 9.3% organically over 2016.

Heineken continued to invest in key developing markets during 2017 with the expansion of production capacity in Mexico, Cambodia, Vietnam, Ethiopia and Haiti, the opening of a new brewery in Ivory Coast and the announcement of the construction of a new brewery in Mozambique.

Jean-Francois van Boxmeer, chairman and chief executive of Heineken, comments: “We delivered strong results in 2017, with all regions contributing to organic growth in volume, revenue and operating profit. The Heineken brand performed very well and Heineken 0.0 was launched in 16 countries. During the year, we became the second largest beer company in Brazil with the acquisition of Brasil Kirin, we bought 1,900 pubs from Punch Taverns in the UK and acquired full ownership of Lagunitas, where we strongly believe in the expansion of the brand as an IPA of reference outside its core US market. We also made good progress with our sustainability agenda. We have already surpassed our 2020 CO2 emissions target and we have set new ambitious objectives for 2030 with our ‘Drop the C’ programme.”

He continues: “We expect the environment will continue to be marked by volatility and uncertainty. We are committed to long-term value creation and will continue to strive for superior top line growth whilst working on improving our operating profit margin.”

This strategy will be driven by the Heineken brand as well as the group’s portfolio of international brands, craft and variety, low and no alcohol beers and cider, with a focus on premiumisation, combined with revenue and cost management initiatives.

For 2018, Heineken is projecting further organic revenue and profit growth. Excluding major unforeseen macro economic and political developments, he expects an operating profit margin expansion of around 25 bps for 2018, including a residual dilutive effect on margins from the acquisition of Brasil Kirin. Capital expenditure related to property, plant and equipment should be slightly above €2 billion, up from €1.7 billion in 2017.