(GLOBE NEWSWIRE via COMTEX) -- Amsterdam, 22 April 2020 - Heineken N.V. /zigman2/quotes/202537894/composite HEI.A +2.65% (otcqx:HEINY) today publishes its trading update for the first quarter of 2020.
- Beer volume -2.1% organically for the quarter.
- Heineken(R) volume +5.0% in the quarter.
- March volume significantly impacted by Covid-19.
Jean-Francois van Boxmeer, Chairman of the Executive Board / CEO, commented:
"During the first quarter of 2020, the Covid-19 outbreak has evolved into a pandemic. By now, most countries where we operate have reacted by taking far-reaching containment measures such as restrictions of movement for populations and outlet closures, sometimes combined with the mandatory lockdown of production facilities. Our performance for the first quarter reflects the initial impact of those measures, and volumes in March were obviously heavily affected.
In these very trying times, our thoughts remain with all those affected by Covid-19 and the people working tirelessly to care for them. In addition to our actions with local communities which are now approaching a value of EUR5 million, on April 8th we announced our decision to donate EUR15 million to the International Red Cross and I am pleased to report that the de Carvalho-Heineken family together with their holding company will donate EUR10 million to eight charities providing support to communities most affected and fragile, to medical health systems and to medical research.
HEINEKEN has entered the crisis with strong brands and a strong balance sheet. In the past few weeks we have taken necessary measures to reduce our costs, secure additional financing and adapt to the fast changes we see in our markets.
I am proud of the leadership, the commitment and the courage of our teams and I fully trust their talent, creativity and energy to steer HEINEKEN through this unprecedented situation and protect as well as develop our brands and businesses."
FIRST QUARTER VOLUME BREAKDOWN
Beer volume1 1Q20 Organic growth % March organic growth % Total growth % 1Q19 (in mhl or %) Heineken N.V. 51.6 -2.1 % -14.0 % -2.1 % 52.7 Africa, Middle East & Eastern Europe 9.4 -6.9 % -14.5 % -6.9 % 10.1 Americas 19.3 -2.5 % -13.8 % -2.6 % 19.8 Asia Pacific 7.4 4.4 % -10.6 % -1.3 % 7.5 Europe 15.4 -1.4 % -15.3 % 1.2 % 15.3
Heineken(R) volume1 1Q20 Organic growth % (in mhl or %) Heineken N.V. 9.4 5.0 % Africa, Middle East & Eastern Europe 1.3 -13.6 % Americas 3.7 24.5 % Asia Pacific 1.5 -5.7 % Europe 2.9 0.4 %
1 Refer to the Definitions section for an explanation of organic growth and volume metrics.
FIRST QUARTER VOLUME REVIEW
With the spread of the Covid-19 crisis to all geographies, multiple countries have taken far-reaching containment measures such as restrictions of movement for populations and outlet closures, sometimes combined with the mandatory lockdown of production facilities. This is having a significant impact on HEINEKEN's markets and on its business in 2020 and is already visible in the volume reported for the first quarter. In most cases these measures were implemented in the last weeks of March. By exception, specific reference is made to the volume performance in March per Region to improve transparency.
- Heineken(R) volume grew by 5.0% in the quarter, with a decline of 2.4% in March.
- Volume grew double digit in Brazil, China, Mexico, the UK, Poland, Mozambique, Ivory Coast and South Korea among other markets.
- Heineken(R) 0.0 was introduced in Vietnam in March and is now present in 58 countries.
Africa, Middle East & Eastern Europe
- Beer volume declined organically by 6.9% in the quarter, with a decline of 14.5% in March.
- In Nigeria, beer volume was broadly flat in the quarter and declined high-single digit in March, following a price increase in February and the ban on distribution of alcoholic beverages late March. The alcohol ban is applicable in some states where we continue to sell non-alcoholic malt drinks.
- In South Africa, total consolidated volume declined in the low-twenties in the quarter due to destocking from last year and the ban on sales, production and distribution of alcoholic beverages starting the last week of March. Total consolidated volume declined in the mid-twenties in March.
- In Russia, beer volume declined in the mid-teens due to destocking relative to last year.
- In Ethiopia, beer volume declined in the mid-teens, following a steep price increase in mid-February to offset an increase in excise duties.
- In Egypt, beer volume declined in the low-teens in the quarter and by about one half in March following a drop in tourism.
- In the DRC, beer volume declined by low-single digit due to a decline in the mid-teens in March.
- Beer volume declined organically by 2.5% in the quarter, with a decline of 13.8% in March.
- In Brazil, beer volume declined mid-single digit. Our premium and mainstream portfolios grew double digit, led by Heineken(R) growing by more than 50%. The economy portfolio declined in the mid-twenties. In March, beer volume declined in the mid-twenties. Non-beer volume declined by one-third due to the de-listing of a low-margin brand in some regions last year.
- In Mexico, beer volume increased low-single digit. Our premium portfolio increased double digit, led by Heineken(R) and Amstel Ultra. Following government orders, our breweries have been suspended for the month of April. At that moment we estimate our customers held 2 to 3 weeks of inventory.
- In the USA, beer volume declined mid-single digit, with Heineken(R) growing low-single digit driven by Heineken(R) 0.0. Lagunitas declined high-single digit. Together with our distributors, we held inventory to supply around two months of our Mexican brands portfolio at the end of March.
- Beer volume grew organically by 4.4% despite a decline of 10.6% in March.
- In Vietnam, beer volume grew in the low-teens, underpinned by the continuing expansion of Tiger into secondary cities and rural areas. We launched Heineken(R) 0.0 and Bia Viet, a new national brand. In March beer volume declined mid-single digit.
- In Indonesia, beer volume declined in the mid-teens due to a drop in tourism in Bali and on-trade restrictions to contain the outbreak.
- In Cambodia, beer volume increased high-single digit driven by our local brand Anchor.
- In Malaysia, beer volume declined mid-single digit in the quarter and by more than half in March, following the suspension of brewery operations under the government's Movement Control Order.
- Beer volume declined organically by 1.4% in the quarter, with a decline of 15.3% in March. Third party volume declined 17.8% in the quarter and 49.2% in March as on-trade outlets closed impacting our wholesale operations.