Heineken – Higher Prices Drive Up Sales

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Heineken N.V. (AMS:HEIA)’s full year net revenues rose 21.2% to €28.7bn on an organic basis, which excludes exchange rates. This was driven by higher average selling prices, up around 14%, as the group raised prices to combat cost inflation. There was also a continued trend in sales towards more lucrative “premium” drinks. And despite higher prices overall, total volumes rose 6.4%.

Organic operating profits grew 24% to €4.5bn, helped by the price increases and higher volumes, especially in Asia Pacific and Europe.

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Net debt fell from €13.7bn to €13.5bn. Free cash flow moved down €0.1bn to €2.8bn.

Looking to 2023, Heineken will try and offset “significantly” higher energy costs with more price hikes. Operating profits are expected to grow in the mid to high single-digits, with the majority of this growth being skewed towards the second half of the year.

A final dividend of €1.23 per share has been announced, subject to approval.

The shares were broadly flat following the announcement.

Heineken's Earnings

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

“Heineken has shown the benefits of having strong brands during tough times. The group owns high-end favourites such as Heineken, Birra Moretti, Amstel and many more.  Despite consumers tightening their purse strings in other areas of the market, beer has remained as much of a staple as ever. Both sales and profits rose substantially as consumers drank more beer at higher prices.

But there were a few warnings laid into today’s results. Sales and profits are expected to moderate next year, cooling down to more sustainable levels of growth in the single digits. Cost inflation is a serious concern for the group too. Input costs are expected to jump by a high teens percentage which will be tough to fully offset, even with further price hikes.


Overall, today’s showing is impressive. Heineken’s strong branding in the premium product range should give them a bit more wiggle room on prices. But how far this can be pushed before volumes take a hit is yet to be determined.”

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