In its Annual Report 2020, which was released today, Heineken said it was hardly affected by the COVID-19 pandemic and seeks EUR 2 billion (USD 2.43bn) of savings over the next two years. As a consequence the company will cut 8,000 jobs, almost 10% of its 85,000 staff worldwide.
In October, the Dutch brewer already announced to “streamline [its] head office and regional offices with an expected reduction of around 20% in related personnel costs”.The brewing group has its head office in Amsterdam, The Netherlands, and local offices around the world, where it employs around 1,700 office staff. (inside.beer, 28.10.2020) Given this fact, the new measure will affect about 23.5 times more people than originally planned.
After a profit of EUR 2.2 billion (USD 2.67bn) in 2019, Heineken’s new CEO Dolf van den Brink had to report today a loss of EUR 204 million (USD 248m) for 2020. “Consolidated beer volume decreased 8.1% organically for the full year,” Mr. van den Brink said. In hectoliters this sums up to a total loss of 20 million in 2020. “Our premium beer volume outperformed the broader portfolio in the majority of our markets with a mid-single digit decline overall. The fourth quarter reflects the impact of renewed restrictions in all regions, especially in Europe with the closing of the on-trade.”
The Heineken brand volume decreased by -0.4% in 2020. Low & No-Alcohol volume decreased slightly, delivering 14.0 million hectoliters (2019: 14.1 million) and outperforming the overall portfolio in most of our markets. The no-alcohol portfolio grew mid-single-digit, driven by Heineken® 0.0 globally and Maltina in Nigeria.
Heineken® 0.0 which is now rolled-out in 84 markets grew strong double-digits with growth in all regions and an outstanding performance in Brazil, Mexico, and the USA.
The international brand portfolio had a mixed performance across brands and markets.
Desperados grew double-digits driven by France, Poland, the Netherlands and Ivory Coast. Birra Moretti grew slightly as strong growth in the UK and Romania more than offset the decrease in Italy. Tiger volume was soft in Vietnam, outperforming the total market, and the brand grew strongly in Nigeria and South Korea. Amstel declined driven by Europe and South Africa despite double-digit growth in Brazil and Mexico. Sol declined driven by Mexico but grew double-digits in the UK, Chile and Argentina. Edelweiss declined in Europe but showed strong growth in South Korea.
Cider volume declined in the high-teens to 4.6 million hectoliters (2019: 5.6 million), due to pub closures in the UK and alcohol sales restrictions in South Africa. Strongbow grew double-digits in Mexico and Russia.
“The impact of the pandemic on our business was amplified by our on-trade and geographic exposure,” Mr. van den Brink said. “We took diligent cost mitigation actions balanced with continued investment behind our growth platforms. We gained share in most of our key operations, a testimony to our ability to adapt and stay close to our customers and consumers in these turbulent times,” Mr. van den Brink said.
Danish brewing group and rival Carlsberg released on Friday its figures for 2020. Last year’s volumes of the lead brands Carlsberg and Tuborg were down 10% and 9% respectively. Organic revenue and organic operating profit also decreased by 8.4% and 3.1%. However, the segment of craft & specialty beers grew by 1% and alcohol-free could even gain 11%. (inside.beer, 5.2.2021)