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Oct. 28, 2020, 4:33 a.m. EDT

Heineken to cut costs to guard against pandemic

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By Adria Calatayud

Heineken NV said Wednesday that it will "streamline" its head office and regional offices to cut costs as it prepares for an extended period of volatility and uncertainty due to the coronavirus pandemic.

The Dutch brewer--which also owns the Sol, Birra Moretti and Tiger beer brands--said it expects a reduction of around 20% in related personal costs. Implementation will begin in the first quarter of 2021.

The company said its current strategic review efforts are focused on shaping the company to emerge stronger from the coronavirus pandemic, as it is exploring how to accelerate and expand its sources of growth while simplifying and right-sizing its cost base.

For the first nine months of 2020, Heineken made a net profit of 396 million euros ($467.1 million), down from EUR1.67 billion a year-earlier.

In the third quarter, organic consolidated beer volume fell 1.9%, against consensus expectations of a 5.9% decline.

The world's second-largest brewer said the pandemic is having a significant impact on its markets and wider business. Continued volatility is expected for the fourth quarter, as many of its markets experience additional waves and fresh restrictions, including bar and restaurant closures, Heineken said. The company said product and channel mix is anticipated to continue to hurt its results, especially in Europe, and that input costs will be higher than last year.

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