Heineken cheers EU-US trade deal as tariff problems grow
The world's second biggest brewer sends beer, especially its namesake lager Heineken, to the US from Europe and Mexico, and has also suffered from indirect impacts on consumer confidence in key markets like Brazil.
Nevertheless, it reported a 7.4% increase in organic operating profit in the first half, versus analyst expectations of 7%, crediting growth in once-difficult regions like Africa and Asia and cost savings.
CEO Dolf van den Brink welcomed the certainty brought by the trade deal clinched yesterday, which avoided tariffs on EU goods of 30%.
All options are being considered to mitigate tariffs long-term, including shifting manufacturing, he said, adding that such moves were capital intensive and would first need more consistency in policy.
"We look at all options from continuing with our current set up, a more hybrid version, or otherwise," he told journalists on a call. "If and when we deem them financially to be more attractive in the mid- to long-term, we would for sure explore them."
Heineken continues to expect annual profit growth of between 4% and 8%.
The company said its second-quarter revenues and volumes rose 3.3% and fell 0.1% respectively on an organic basis, also beating analyst expectations.
The brewer has been locked in difficult, prolonged price negotiations in Europe, which offset a boost from a late Easter and good weather to hit sales in the region, including its key non-alcoholic portfolio.
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