Heineken(US:HEINY)2024-04-24 19:00Financial Data and Key Metrics Changes - Group net revenue (beia) was £6.8 billion, an increase of 9.4% organically, with net revenue (beia) per hectoliter increasing by 4.9% driven mainly by pricing in line with inflation [4][5] - Total consolidated volume on an organic basis was up 4.3%, with underlying price mix on a constant geographic basis up 6% [5][6] - The translation of foreign currencies had a negative effect of £294 million or 4.6%, mainly due to the devaluation of currencies in Africa [6] Business Line Data and Key Metrics Changes - Beer volume was up by 4.7% organically, driven by the premium beer portfolio, which grew by 7.3% [4] - The Heineken brand grew volume by 12.9%, with double-digit growth in over 30 markets, particularly strong in China and Brazil [19] - The non-beer portfolio in South Africa grew revenue by close to 10%, driven by strong performance from brands like Savanna and Bernini [12] Market Data and Key Metrics Changes - In Africa, Middle East, net revenue (beia) grew 32.9% organically, with total consolidated volume up 5.6% [10] - In the Americas, net revenue (beia) grew 6.5% organically, with total consolidated beer volume up 5% [13] - In Asia Pacific, net revenue (beia) increased by 11.3% organically, with consolidated beer volume up 9.4% [16] Company Strategy and Development Direction - The EverGreen strategy aims to create long-term sustainable growth and value creation, focusing on premiumization and non-alcoholic products [20] - The company remains cautious in its outlook due to ongoing economic challenges and uncertainties, while continuing to invest in future growth [20][21] - The company plans to balance operating profit delivery across both halves of the year, with expectations for organic growth in operating profit (beia) to be in the low to high single digits [21] Management's Comments on Operating Environment and Future Outlook - Management noted that while the first quarter showed encouraging trends, the overall market remains volatile and challenging, particularly in regions like Nigeria and Vietnam [3][20] - The company is focused on restoring balanced growth and managing pricing and mix effectively in response to competitive pressures [29] - Consumer confidence in Europe is slowly improving, but remains subdued, with expectations for gradual recovery as wage increases take effect [36] Other Important Information - The integration of Distell and Namibian Breweries contributed £164 million to net revenue (beia), while the exit from Russia and the sale of Vrumona partially offset this [7] - The company is experiencing a mixed performance in Europe, with off-trade growth but on-trade volume down by low single digits [18] Q&A Session Summary Question: Insights on Vietnam's beer market and sequential improvement - Management acknowledged that while there was a sequential improvement in Vietnam, the market remains in decline, and caution is warranted regarding future stability [23][26] Question: Full year guidance and consensus estimates - Management explained that the full year guidance remains unchanged due to one-off factors in Q1 and potential surprise events that could impact performance [32][34] Question: Update on Nigeria's FX situation and input cost guidance - Management indicated that while there has been FX appreciation, the input cost guidance remains under review, balancing pricing and volume strategies [39][43] Question: Performance in South Africa and Distell integration - Management reported positive initial uptake of the returnable Heineken bottle in South Africa and ongoing efforts to leverage the Distell portfolio for growth [46] Question: Brazil's market dynamics and pricing strategy - Management noted that while the market in Brazil is flat to slightly negative, Heineken's performance remains strong, with a focus on maintaining premium positioning despite competitive pressures [51][53] Question: Consumer confidence and channel mix in Europe - Management confirmed that consumer confidence is primarily affected in the Netherlands and Spain, with no significant issues reported in other major markets [65]