Heineken Revenue Soars as Consumption Volume Drops in Nigeria and South Africa

Heineken, one of the world’s leading beer manufacturers, recently released its third-quarter report, shedding light on its performance in key markets, including Nigeria, as well as its global financial outlook. In the Q3 report, Heineken noted a decline in beer volumes in both Nigeria and South Africa. This decline was offset, to a significant extent, by an increase in prices, which resulted in higher revenues.

The economic environment in many markets experienced inflationary pressures, leading to reduced consumer demand. In a statement from Heineken’s CEO, Dolf van den Brink, he acknowledged that the declines in volume from Nigeria and South Africa had a notable impact on the company’s performance in the broader Africa, Middle East, and Europe regions.

CEO Dolf van den Brink stated, “We returned to volume growth in the Americas, with strong performances in Brazil and Mexico. Asia Pacific showed sequential improvement, despite ongoing challenges in Vietnam. However, the Africa, Middle East & Eastern Europe region was adversely affected by volume declines in Nigeria and South Africa.”

In the specific context of Nigeria, Heineken reported that inflation and currency devaluation had a modest impact on net revenue growth, which remained in the low single digits. Notably, their non-alcoholic brand, Maltina, continued to perform well in the market, surpassing expectations.

The report stated, “In Nigeria, net revenue (beia) grew organically by a low single digit, driven by pricing strategies designed to partially mitigate significant inflation and currency devaluation. Total volume declined significantly, lagging behind the market.” It further highlighted the economic challenges faced by consumers, stating, “Consumers’ purchasing power continued to be under severe pressure due to inflation and the impact of structural economic reforms, affecting our premium portfolio disproportionately. In this challenging context, the leading non-alcoholic malt proposition Maltina continued to significantly outperform the market and broadly held volume.”

Heineken’s global performance showed a 4.2% decrease in beer volumes for the July-September quarter, except for the Americas, where they experienced growth. However, they managed to achieve a 4.5% increase in net revenue before accounting for one-time items.This performance aligned closely with market expectations, as analysts had anticipated a 4.3% decrease in volumes and a 4.8% increase in revenue.

Looking ahead, Heineken maintained its previous projection for 2023, expecting operating profit growth to range from zero to a mid-single-digit percentage increase.
In terms of revenue for the quarter, Heineken reported a 4.5% increase, reaching €9.6 billion. They did note that currency devaluation in various African countries impacted revenues negatively by €397 million. However, a strong Mexican Peso helped offset some of these losses.

The consolidation effects from the integration of Distell and Namibian Breweries contributed positively to their revenues, with €276 million.

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