Heineken’s organic growth in Nigeria affected by harsh market conditions in 2017 first quarterWritten by David MasifonPosted on 04 20, 2017
Heineken N.V announced its first quarter 2017 results on Wednesday, showing a 0.4% decline in organic growth in Africa, Middle East & Eastern Europe with with volumes in Nigeria declining to mid-single digit.
Heineken reported €293m in profit in the first three months of 2017 compared to €265m in 2016 with a volume increase of 0.6% due to strong sales in Asia and Europe, even with unfavourable economic conditions in Africa, Middle East and Eastern Europe.
However, South Africa and Ethiopia saw strong volume growth in the double digit, thereby giving the brewer a better comparative but its sharpest beer volume increase in Asia Pacific region, with a 5.4% growth led by Cambodia, and a modest increase of 0.5% in Europe, driven by market growths in France, Spain, the Netherlands, Italy and Austria.
The Americas also posted a 0.7% decline due to continued macroeconomic weakness in Brazil and competition in the mainstream and economy segment, although the brewer’s premium brands Heineken brand and Amstel malt performed brilliantly.
For Nigerian, the company reported that repressed trading conditions remained difficult, as consumers continue to trade down, and even with signs of liquidity improving, hard currency is still difficult to get.
Performance in the first quarter was in line with expectations, delivering volume growth against strong comparatives last year,” said Jean-Francois van Boxmeer, Chairman & CEO of Heineken.
“Asia Pacific continued to outperform and volume in Europe was solid. In Africa, Middle East & Eastern Europe market conditions remain challenging, adversely impacting volume. In Americas, whilst Mexican volume was good this was more than offset by weaker volume in Brazil. Our full year expectations remain unchanged.”
The market in the US saw low single digit decline, with growth in Heineken brand offset by lower volumes of Tecate and Dos Equis, meanwhile Tecate, Tecate light and Heineken brand all performed well in Mexico enough for the brewer to post a volume up in the mid-single digit.