Heineken's 2011 Earnings Down 1.2 percent to €1.43 Billion, Plans Cost Cuts

Feb 15 2012 --- Heineken N.V. announced that the company’s financial results, the company’s net profits were down 1.2 per cent to €1.43 billion. This was despite organic revenue growth of 3.6%.

 

Jean-François van Boxmeer, Heineken’s CEO, commented: “At the start of 2011, we said that we would significantly increase investment in our brands and innovation to drive long-term value and volume growth. This strategy helped us to deliver organic volume and revenue growth across all five reporting regions for the year.”

 

Revenue growth was driven by total consolidated volume growth of 2.1% and revenue per hectolitre growth of 1.5%. Group beer volume increased 3.6%, with growth in all regions driving global market share gains.

 

Volume growth of the Heineken brand in the international premium segment accelerated to 5.4%, outperforming the overall beer market.

 

Organic EBIT (beia) growth of 1.4% as higher revenues, cost savings and increased profit from joint ventures were partly offset by increased marketing expense, higher input costs and capability building investments.

 

Net profit (beia) grew 9.2% organically to €1,584 million, driven by higher EBIT (beia), lower interest expense and a lower effective tax rate (beia). Reported net profit declined 1.2%, following an exceptional capital gain in 2010.

 

Achieved cost synergies of €94 million in 2011, relating to acquired beer operations of FEMSA, bringing cumulative savings to €136 million.

 

The company expects a proposed total dividend of €0.83 per share, representing an increase of 9% compared with 2010 (€0.76).

 

The company introduced plans for a new €500 million cost saving programme (TCM2) that will run from 2012 to 2014 across Supply Chain, Commerce, Wholesale and other functions. 

 

TCM2 is ‘focused on driving operational cost efficiencies, and on leveraging HEINEKEN’s increasing global scale.’