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Heineken boosted  by main beer brands as Volume grew double-digit in Nigeria

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Heineken boosted  by main beer brands, Volume grew double-digit in Nigeria despite stiff competitive conditions

Heineken recorded a 3.9% rise in full-year net revenues, as the Dutch brewer continued to profit from the strong performance of its namesake beer brand.

The world’s second largest beer maker – and owner of brands such as Tiger, Cruzcampo and Amstel – posted net revenues of €22.47 billion for 2018. Operating profit grew 2.9% to €3.89 billion.

Top-line performance in 2018 was strong with robust volume growth throughout the year, and net revenue accelerating in the second half driven by price mix.

Operating profit (beia) increased 6.4% organically, at a faster rate in the second half of the year (2H18: 11.1%) than in the first (1H18: 1.3%) driven by higher revenue growth and overall slower growth of expenses despite continued pressure from higher input and logistics costs.

Heineken® volume grew 7.7%, its strongest performance in more than a decade. Ten markets now sell more than 1 million hectolitres of Heineken®. Volume grew double-digit in Brazil, South Africa, Russia, the UK, Nigeria, Mexico, Poland and Germany, and China returned to growth. In Nigeria, consumer discretionary spend remained under pressure and competitive conditions continued to be challenging. Beer volume decreased mid-single digit for the full year, with improved trends in the last quarter as volumes were in line with the previous year.

Volumes in Nigeria were adversely impacted by the weak macro-economic environment and SKU rationalisation.

HEINEKEN continued to invest in key developing markets with the expansion of production capacity in Mexico, Vietnam, Ethiopia, Brazil, Cambodia, Haiti and South Africa, and the construction of a new brewery in Mozambique.

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Net revenue (beia) increased 6.1% organically, with a 4.0% increase in total consolidated volume and a 2.0% increase in revenue (beia) per hectolitre. The underlying price mix impact was 2.9%. In the second half of the year net revenue (beia) increased 6.5% (1H18: 5.6%), with total consolidated volume growth of 3.7% (1H18: 4.4%), net revenue (beia) per hectolitre up 2.8% (1H18: 1.1%) and underlying price mix impact of 2.9% in line with the full year. Reported net revenue (beia) per hectolitre declined 3.9% mainly due to the translational currency impact and from the dilutive effect of the acquisition in Brazil.

Consolidated beer volume grew 4.2% organically in 2018, with 4.5% growth in the first half and 4.0% growth in the second half. Beer volume in the fourth quarter was up 3.3%, against a challenging comparable base (Q4 2017: 4.6%).

The Heineken® brand also saw healthy growth across European markets from both Heineken® Original as well as the ongoing success of Heineken®0.0. These results more than offset weaker volumes in Vietnam and the US. Heineken® 0.0 is available in 38 markets (2017: 16) and further roll-out is planned for 2019.

Jean-François van Boxmeer, Chairman of the Executive Board / CEO, commented: “In 2018 we delivered another year of superior top-line growth. The Heineken® brand grew 7.7%, its best performance in over a decade, with Heineken® 0.0 now available in 38 countries. Our premium portfolio grew double-digit, led by our international brands, craft & variety and cider portfolios. All regions grew and Brazil recorded a strong performance following the successful integration of our two businesses. Our operating profit margin (beia) decreased by 17 bps due to the first time consolidation of Brazil, rising input costs and adverse currency developments. A key milestone in 2018 was the announcement of the strategic partnership with CRE to join forces in China, a big opportunity for both companies, which is pending regulatory approval.

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Our strategic priorities are growth-oriented with an ever-increasing emphasis on the sustainability of this growth, both socially and environmentally. We focus on innovation and operational excellence so our consumers enjoy our brands and we exceed our customers’ expectations, whilst seeking productivity improvements and constantly reassessing our spending behaviour. Going into 2019, we expect the environment to remain uncertain and volatile. Overall, we anticipate our operating profit (beia) to grow by mid-single-digit on an organic basis.”

The international brand portfolio grew double-digit. Volume was up double-digit for Tiger, Desperados, Birra Moretti and Krušovice. Amstel grew high single digit driven by strong growth in Brazil. Tecate grew mid-single digit as robust performance in Mexico more than offset a decline in the US.

Cider volume increased double-digit to 5.6 million hectolitres (2017: 4.9 million). In the UK volume grew mid-single digit and outside of the UK volume reached more than 2 million hectolitres. Strongbow and its flavour variants continue to gain share in South Africa. Performance of our recently introduced Ladrón de Manzanas in Spain and Strongbow in Vietnam is promising.

Low & No-Alcohol (LNA) volumes increased mid-single digit, delivering 13.1 million hectolitres in 2018 (2017: 12.5 million). In Europe, volumes grew high-single digit due to the continued success of Heineken® 0.0 and Radler. In Ethiopia, Sofi Malt and its new coffee variant Sofi Buna boosted the growth of the LNA portfolio.

Our Craft & Variety volume grew double-digit. Affligem launched a lower alcohol variant driving double-digit growth. Lagunitas continues to expand outside the US and is now also brewed in the craft brewery in Wijlre in the Netherlands. Mort Subite grew double-digit. Craft line extensions such as Brand IPA in the Netherlands and Birra Moretti Regionale in Italy also grew double-digit.

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Among the key innovations, rolled-out in 2018 was The Blade, a counter-top draught system for small outlets introduced in late 2017. Sales of The Sub, an at home draught device, accelerated. HEINEKEN continues to develop and roll out e-commerce Business-to-Business and Business-to-Consumer platforms across the group.

Operating profit (beia) grew 6.4% organically, as a result of higher revenues and cost efficiencies which more than offset higher input and logistic costs. Including consolidation, currency, and exceptional items, most notably an impairment in the Democratic Republic of Congo (DRC) in 2018 and exceptional gains and benefits in 2017 (due to the sale of non-beer and cider wholesale operations in the Netherlands), Operating profit declined -6.4%.

2019 OUTLOOK

For 2019, Heineken expects the following:

– Continued volatility in economic conditions
– Superior top-line growth driven by volume, price and premiumisation
– Mid-single digit increase of input and logistic costs per hectolitre on an organic basis
– Continued cost management and productivity initiatives
– Given this, Heineken expect operating profit (beia) to grow by mid-single-digit on an organic basis, excluding any major unforeseen
macroeconomic and political developments.

Heineken also anticipates:

– An average interest rate (beia) broadly in line with 2018 (2018: 3.2%)
– An effective tax rate (beia) between 27% and 28% (2018: 26.4%)
– Capital expenditures related to property, plant and equipment around €2 billion (2018: €1.9 billion).

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Promasidor Donates SunVita Cereal to Lagos Food Bank Initiative

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Promasidor Nigeria Limited has donated SunVita cereal to Lagos Food Bank Initiative in support of the government’s effort to providing palliatives to the vulnerable during the Covid -19 Pandemic.

The three truckloads of SunVita cereal was handed over to the office of Lagos Food Bank Initiative as part of the company’s gesture to the fight against COVID-19.

Making the presentation to the organisation, Category Manager, Dairy and Cereal Promasidor Nigeria Ltd, Mr. Olayinka Vincent, who handed over the donation to the president of the organization Mr. Michael Sunbola reiterated the commitment of Promasidor Nigeria Limited to the provision of quality food products to Nigerians.

According to him, “With 2020 being a difficult year due to the COVID 19 pandemic, Promasidor is committed to supporting the government’s efforts at containing further spread of the virus, adding that though the company had initially made contributions worth over ₦200 million, there are still gaps to be filled and as a responsible company, Promasidor is ready to support the government.

He further stated that, SunVita cereal is produced from locally sourced grains like Soya and Maize and fortified with Nutri-V, a unique blend of vitamins and minerals that helps children grow smarter and stronger.”

Receiving the donation, President of Lagos Food Bank Initiative, Mr. Michael Sunbola, assured that Promasidor’s goodwill will go a long way towards supporting the vulnerable within the society.

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He stated that his organization works with primary health care centres to reach and care for the vulnerable in Lagos State.

He thanked Promasidor profusely for their kind heartedness noting that the food supplies would be put to good use.

Promasidor was founded in 1979 by Robert Rose, who left the United Kingdom in 1957 for Zimbabwe to pursue his African dream.

It has since grown with presence in 25 African countries. Promasidor Nigeria has achieved tremendous growth since it commenced operations in 1993.

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Nestlé launches unique cooking website in Central and West Africa

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Nestlé brand Maggi, has launched a first-of-its-kind website in Central and West Africa, offering fresh new twists to well-known African dishes.

It is also serving up a second season of Yelo Pèppè- its popular online nutrition education drama series on YouTube from June 8, 2020, following the success of Yelo Pèppè season one, which recorded over 20.3 million online views.

The brand’s latest launches, are just a few of the innovative ways Maggi is meeting its consumers’ digital and nutritional appetites, while also contributing to Nestlé’s purpose of enhancing quality of life and contributing to a healthier future.

The website, which provides over 40 African recipes on an easy-to-use platform, can help families cook balanced and nutritious meals.

“Maggi innovates once more by providing different variations of beloved African dishes that offer something for every food lover,” said Dominique Allier, Business Executive Officer for Culinary at Nestlé Central and West Africa in an online press conference and launch of the website.

“We are proud to be the first region worldwide chosen by Maggi to launch this unique website”, he added.

The new website, which was built in collaboration with top African chefs, expert nutritionists and local food influencers, provides helpful tips in some recipes on how to boost your iron intake and balance dishes.

Also speaking, Akua Kwakwa, Nutrition, Health and Wellness Manager for Nestlé Central and West Africa, stated that,“As well as highlighting the importance of including nutritious diets in our daily lives with well-known family favourites, people across the globe now have easy access to traditional African recipes we know and love”.

“For people who are more concerned about sodium, saturated fat and added sugars, the website features the unique ‘MyMenuIQ™’ guide that illustrates how nutritionally-balanced each recipe is. The higher the score, the more balanced the meal is,” she added.

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GBfoods Partners CBN, Kebbi State to Complete $51 Million Tomato Processing Factory

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GBfoods, a leading global culinary product manufacturer has partnered the Central Bank of Nigeria (CBN), Kebbi State Government and the Emirate of Yauri to build a $51 million tomato processing factory in Kebbi State, Nigeria.

The factory is the second largest in Nigeria and, when all phases of the project are complete, it will be the largest fresh tomato processing factory in Sub-Saharan Africa.

The state-of-the-art facility and farm include a drip irrigation and fertigation infrastructure, greenhouses, seed planting robots, incubation chambers and agricultural machinery.

The factory will convert fresh tomatoes into concentrate for Gino’s Tomato Paste and Tomato Pepper Onion Paste.

Soya beans will also be grown to produce soya-bean oil, which is an essential ingredient in GBfoods’ Bama and Jago Mayonnaise.

The project has enabled over 1,000 jobs, including 500 farming positions, 150 factory jobs and 150 construction jobs.

GBfoods has also engaged with and trained smallholder farmers, and has supported local communities by providing and maintaining 16 boreholes of drinking water.

Vincent Egbe, country manager of GBfoods Nigeria said: “The opening of this processing factory is a great milestone for us. It further demonstrates the company’s commitment towards helping Nigeria achieve its food security ambitions, in this case, of self-sufficiency in tomato concentrate production.

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Additional land is expected to to be cleared and prepared in September 2020, in time for the October 2021 farming season.

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