About one week after other major brewing groups like AB InBev, Carlsberg and Molson Coors withdrew their guidance for 2020 due to COVID-19, the world’s second largest brewing group Heineken also issued a similar statement on Wednesday.
The “far-reaching containment measures such as restrictions of movement for populations and outlet closures, sometimes combined with the mandatory lockdown of production facilities,” which were taken by multiple countries with the spread of the Covid-19 crisis to all geographies have constituted to “a major negative macro-economic development”, which “is having a significant impact on Heineken’s markets and on its business in 2020,” the company said today.
For the first quarter of 2020, Heineken expects to announce a total consolidated volume decrease of around -4% organically with beer volume around -2%. The impact is expected to worsen in the second quarter.
For sure, Heineken’s new CEO Dolf van den Brink would have wished to see a better business environment for his start when he takes over on June 1 from his predecessor Jean-François van Boxmeer who has led Heineken's fortunes for the last 15 years (inside.beer, 11.2.2020).
However, van Boxmeer is leaving behind a well order company and the Dutch brewing group has entered the crisis with a strong balance sheet as well as undrawn committed credit facilities and has successfully secured additional financing on the debt capital market in recent weeks.
Heineken will provide more information on its mitigating actions in its 2020 first quarter trading update on 22 April. In any case, the lack of visibility on the end date of the Covid-19 pandemic and the duration of its impact on the economy leads Heineken to withdraw all guidance for 2020.