Heineken exceeds expectations with Q1 beer sales, maintains outlook

Heineken Q1 results: Heineken has reported robust beer sales in the first quarter, surpassing analyst expectations and marking its first quarterly year-on-year volume growth in a year. The company remains steadfast in its forecast for profit growth in 2024.

The world's second-largest brewer disclosed on Wednesday that its beer volumes grew organically by 4.7 per cent during the January-March period, outpacing the 2.5 per cent growth projected by analysts in a company-conducted poll.

Following this announcement, Heineken's shares surged as much as 1.6 per cent, before settling to trade 0.4 per cent higher by 0805 GMT.

Heineken's strategic focus this year revolves around revitalising volume growth, which was hampered in 2023 due to price increases aimed at offsetting escalating costs of commodities such as energy and barley.

CEO Dolf van den Brink remarked in a statement that all regions witnessed an uptick in both volume and net revenue. He attributed the quarter's success to factors including an earlier Easter and certain one-off effects.

Despite the positive start to the year, Heineken remains cautious, acknowledging the "challenging and uncertain" economic environment.

"While we've had a solid start to the year, we cannot extrapolate the reported top-line growth to the rest of the year," the company cautioned.

In February, Heineken drew disappointment from investors with its wide-ranging forecast for operating profit growth, projected to be anywhere between a low and high single-digit percentage for the year. This cautious outlook was influenced partly by uncertainties in key markets like Vietnam and Nigeria, where economic conditions weighed on performance in the previous year.

Notably, Heineken reported significant volume growth in Nigeria, nearing 20 per cent, and in Vietnam, where volume rose in the low-teens after facing destocking challenges last year.

Barclays analyst Laurence Whyatt highlighted a recovery in the high-margin Vietnamese market, along with promising performances in Mexico and Brazil. "There is no denying that the underlying business appears to have turned the corner, and we continue to expect improvements during the year," Whyatt noted in a recent analysis.

In Brazil, Heineken noted that its eponymous brand clinched the top position by value in the quarter, while beer volume saw high-single-digit growth.

With net revenue before one-offs surging 9.4 per cent organically to €6.85 billion ($7.33 billion), Heineken's performance exceeded analyst projections of 7.2 per cent growth. However, currency translation effects trimmed the figure by 4.6 per cent, the company disclosed.

(With Reuters inputs.)