FDBusiness.com

Heineken increased group revenue by 2.0% organically to €10.926 billion in the first half of 2015 and group operating profit (BEIA) by 4.7% organically to €1.69 billion with the margin improving by 20bps to 15.5%. Organic revenue growth comprised a 0.9% increase in group total volume and a 1.1% increase in group revenue per hectolitre. Net profit (beia) rose 14% organically to €915 million.

Heineken is continuing to invest in key developing growth markets. During the first half of the year the company announced capacity expansion plans in Mexico and Ethiopia, and opened a new brewery in Myanmar in July.

Jean-François van Boxmeer, chairman and chief executive of Heineken, comments: “These solid results are in line with our expectations and demonstrate the further progress we have made in delivering on our strategy. Despite strong prior year comparatives and challenging conditions in a number of markets, we saw positive top line and profit growth. Heineken® volume in the premium segment grew a further 4.7%, outperforming the total beer market. This continued positive momentum reflects the benefit from our exposure to high growth markets, a sustained focus on marketing and innovation, and the ability to drive efficiencies throughout the business. Our emphasis on innovation delivered €854 million in revenues. Whilst economic conditions and the pricing environment in certain key markets remain challenging, we are confident of continued progress and our full year expectations are unchanged.”

Heineken expects positive organic revenue growth in 2015 with volume growth at a more moderate level than 2014. Continued volume growth in developing markets will offset more subdued volume growth elsewhere. Revenue per hectolitre is expected to increase driven by revenue management. Pricing will be limited by deflationary and off premise pressure in some markets.

Heineken is targeting a year on year improvement in consolidated operating profit (beia) margin of around 40bps in the medium term. This will continue to be supported by tight cost management, effective revenue management and the anticipated faster growth of higher margin developing markets. However, in 2015 consolidated operating profit (beia) margin will be adversely impacted by approximately 25bps from the disposal of Heineken’s Mexican packaging business, which completed in February. Heineken expects to partially but not fully offset this, such that in 2015 consolidated operating profit (beia) margin expansion will be somewhat below the 40bps medium term level.