Heineken says Nigerian Breweries continues to underperform

Heineken says Nigerian Breweries continues to underperform

Heineken N.V. parent owners of Nigerian Breweries said the local unit continues to underperform as a result of negative macroeconomic environment.

The group said in a statement that Amstel volume was flat with the decline in Nigeria and Greece offset by strong growth in Brazil. Sol declined mid-single digit as the high single-digit growth outside of Mexico was offset by lower domestic volume.

Cider volume increased low single digit to 4.9 million hectolitres (2016: 4.8 million). Good progress was made with our global cider strategy and volume outside the UK was up double-digit, driven by the strong growth in South Africa, Poland, Romania and Vietnam. This offset a high single digit decline in the UK, where volumes were impacted by a partial delisting.

Low & No-Alcohol (LNA) volumes increased low single digit, delivering 12.5 million hectolitres in 2017 (2016: 12.4 million). Continued robust growth of Radler and the launch of Heineken® 0.0 contributed to Europe’s double digit volume growth. Volumes in Nigeria and Egypt were adversely impacted by the weaker macro economic environment and consumer sentiment.

Jean-François van Boxmeer, Chairman of the Executive Board / CEO, commented:
“We delivered strong results in 2017, with all regions contributing to organic growth in volume, revenue and operating profit. The Heineken® brand performed very well and Heineken® 0.0 was launched in 16 countries. During the year, we became the second largest beer company in Brazil with the acquisition of Brasil Kirin, we bought 1,900 pubs from Punch Taverns in the UK and acquired full ownership of Lagunitas, where we strongly believe in the expansion of the brand as an IPA of reference outside its core US market. We also made good progress with our sustainability agenda. We have already surpassed our 2020 CO2 emissions target and we have set new ambitious objectives for 2030 with our ‘Drop the C’ programme.

We expect the environment will continue to be marked by volatility and uncertainty. We are committed to long-term value creation and will continue to strive for superior top line growth whilst working on improving our operating profit margin. In the coming years, we expect this to be driven by Heineken® as well as our portfolio of international brands, craft & variety, low & no-alcohol and cider, with a focus on premiumisation, combined with revenue and cost management initiatives. For 2018, excluding major unforeseen macro economic and political developments, we expect to deliver an operating profit margin expansion of around 25bps[1]. This includes a residual dilutive effect on margins from the acquisition of Brasil Kirin, whose integration and results are very encouraging,” he said.