- Heineken sold 4.2% less beer in the third quarter as the Dutch brewer faced a difficult macroeconomic environment and consumers were deterred by higher prices.
- The company sold its Russian operations for one euro in August, more than a year after it said it would exit operations there because of the war in Ukraine.
In this photo illustration, bottles of Heineken beer are seen on July 31, 2023 in San Anselmo, California.
Justin Sullivan | Getty Images
Heineken’s beer sales fell in the third quarter as the Dutch brewer completed a long-awaited exit from its Russian business and consumers were deterred by higher prices.
Volumes fell 4.2% year-on-year, bringing the decline to 5.1% in the first nine months of 2023. Still, revenue rose 2% to 9.604 billion euros ($10.17 billion) in the quarter due to price increases.
Heineken shares rose 2% in early trading.
Sales in the Americas were a lone bright spot, rising 2.2%, while sales in Europe fell 8.6% and business in Africa, the Middle East and Eastern Europe saw a decline of 15.4%.
The group’s beers include Amstel, Tiger, Sol, Desperados and Birra Moretti. In terms of sales, it is the second largest brewery in the world.
Net profit for the first nine months fell from 2.199 billion euros to 1.924 billion euros, including the impact from Russia.
The company reiterated its full-year operating profit growth forecast with zero to mid-single-digit growth, which was welcomed by analysts.
Heineken sold its business in Russia in August to domestic company Arnest Group, which took over 100% of the shares and assets, including its seven breweries, for a symbolic single euro. It said there were employment guarantees for 1,800 employees for three years.
The company had come under fire for delaying its exit from Russia, which it promised in March 2022, shortly after the full-scale invasion of Ukraine. Heineken and other major companies with production sites in Russia said the exit was a complex process with a high risk of assets coming under state control.
Heineken said this summer that it expected damages of 300 million euros from the lawsuit, including foreign exchange losses.
In the third quarter update, the company did not provide any significant additional details, but cited the exit from Russia and a decline in sales in Vietnam as the main reasons for the overall volume decline.
“We … are seeing a gradual improvement in our business performance, albeit slightly slower than our ambitions,” CEO Dolf van den Brink said in a statement.
“As inflation-related pricing declines, we are witnessing a slowdown in consumer demand in various markets facing difficult macroeconomic conditions.”
“After several quarters of misunderstandings and over-promised/under-delivery… today’s update should be viewed as reassuring,” Citi analyst Simon Hales said in a note quoted by Portal.