Heineken Swung to 2021 Net Profit Above Market Views; Warns of Inflation Hit -- Update
By Michael Susin
Heineken NV on Wednesday posted a swing to net profit for 2021,
above market expectations, though the company warned that it
expects to be significantly hit by inflationary pressures.
The Dutch brewer--which also owns the Sol, Birra Moretti and
Tiger beer brands--said it expects significant inflationary and
supply-chain pressure in 2022, as it continues to navigate an
uncertain environment, and that it will raise prices to offset the
The company expects adjusted input cost per hectolitre to
increase in the mid-teens given due to the sharp increase in the
prices of commodities, energy, and freight.
"We will offset these input cost increases through pricing in
absolute terms, which may lead to softer beer consumption," the
Heineken reported a net profit for 2021 of 3.32 billion euros
($3.77 billion), compared with a net loss of EUR204 million in 2020
and a company-compiled consensus of EUR2.28 billion based on 23
The world's second-largest brewer said adjusted operating
profit--one of the company's preferred metrics that strips out
exceptional and other one-off items--increased organically to
EUR3.41 billion from EUR2.42 billion. The consensus forecast was
EUR3.3 billion, taken from the company's website.
Adjusted operating profit margin for the year was 15.6%, it
said. Net revenue for the year rose to EUR21.94 billion from
EUR19.72 billion in 2020, it said.
Heineken said it made EUR1.3 billion gross savings as part of
its "Evergreen" strategy and it is on track to deliver its 2023
objective of saving EUR2 billion on structural costs.
It said it will reverse the cost mitigation actions taken in
2021 to step up investments that will be partially offset by gross
savings from the Evergreen program. "These changes are expected to
have a greater impact in the first half of the year", it said.
The program included 8,000 jobs being cut and a reorganization
of its operations and portfolio.
The board declared a dividend for the year of EUR1.24 a share.
This compares with a total dividend of 70 European cents a share in
the prior year.
Write to Michael Susin at firstname.lastname@example.org
(END) Dow Jones Newswires
February 16, 2022 02:19 ET (07:19 GMT)
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