Less beer sales, but Heineken lager is doing well | Financial

Expenditure for employees at the Dutch Heineken headquarters and regional offices in Singapore and Miami, among others, must be reduced by approximately 20%. “A total of 1,700 employees work at those offices out of a total of 85,000 worldwide,” said a spokesman.

Heineken promises to carry out the reorganization in consultation with the unions. The unions expect a few hundred layoffs.

The reorganization will not be implemented until the first quarter of 2021. Heineken has promised that no jobs would be cut in 2020 due to the corona crisis. It is therefore not yet possible to say how many jobs it will cost and in which countries it will be cut, and this depends on the circumstances that will apply at the beginning of next year, Heineken said in a statement. “It is true that a majority of those 1,700 people work in the Netherlands,” said the spokesman.

In the first nine months of this year, Heineken sold significantly less beer than a year earlier, as bars and restaurants worldwide were closed due to the corona pandemic. It is striking that the Heineken brand is experiencing significant growth during corona.

More beer sold in supermarket

7.1% more Heineken-branded beer was sold in the quarter. In fact, Heineken beer sales grew double digits in 25 countries, including Brazil, China, the United States and Poland. Heineken sales rose 1% in the first nine months of the year.

“A truly worldwide trend of beer consumption during corona is impossible, except that because of the closure of the catering industry much more beer is sold in the supermarket,” said the spokesman. “For the rest it really differs per country. In the Netherlands, for example, we see an increase in the sale of Affligem, a specialty beer brand of Heineken, through the supermarket. ”

Despite the sales growth of the Heineken brand, the brewer saw worldwide sales decline in the third quarter. Volume at 165.4 million hectoliters in the first nine months was 8.3% lower than in the same period last year. In the summer months, results improved thanks to the easing of lockdowns.

All in all, the impact of corona has cratered Heineken’s earnings. This has decreased from € 1.7 billion in the first months of 2019 to € 369 million in the same period this year.

Heineken CEO Dolf van den Brink is pessimistic about the rest of the year. “We expect the ongoing outbreaks of Covid-19, in addition to increasing pressure from a recession, will have a major impact on many of our markets.”

Carslberg sees sales increase

That the results depend on the region where the beer brand is most active, according to the results of Heineken rival Carlsberg. It saw its beer sales rise by 2% in the third quarter. The Danish giant is benefiting greatly from its strong presence in China and Russia and has even revised its financial outlook for the rest of the year upwards.

While the owner of the Grimbergen beer brand, among others, initially assumed a 9% fall in operating profit, this is now 5% for the whole of 2020. According to CEO Cees’ t Hart of Carlsberg, this adjustment of financial expectations can be added to better-than-expected beer sales. also because the company has already cut costs considerably. The Dutch CEO in the Danish service is still concerned about the continuation of the corona crisis. “That is why we continue to adapt our organization, processes and structures to a new market reality.”

On Thursday, the Belgian beer giant AB Inbev, of brands including Corona, Jupiler, Budweiser and Beck’s, will publish quarterly figures. Shareholders are already putting their share in the minus 3% halfway through the day in the run-up to its presentation. The American market is very important to AB Inbev. There Heineken saw its sales volume fall by more than 9% until October this year.

–