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Heineken has tempered expectations for annual profit growth after the world’s second-largest brewer said that higher prices hit consumer demand last year.
The Amsterdam-listed group said on Wednesday that it expected operating profits to rise in the low to high single digits in 2024, short of the 9.9 per cent that analysts had expected.
Shares in the company slipped 6 per cent in early trading.
The forecast was “disappointing” given that investors expected “a significant margin tailwind as commodity costs decline”, noted RBC Capital Markets analyst James Edwardes Jones.
The move by Heineken, which is home to brands including Amstel, Birra Moretti and Red Stripe, to counter rising costs through price increases hit volumes last year, the group said. Volumes dropped 4.7 per cent, marginally worse than analysts had expected.
Heineken’s chief executive Dolf van den Brink said “strong pricing to offset very high input and energy cost inflation and volatile macroeconomic conditions in some key markets affected our volume momentum”.
The cautious outlook came as Heineken reported operating profit of €3.2bn in 2023, down from €4.3bn in 2022.
“Looking to 2024, we remain cautious about the global economic and geopolitical outlook,” said Van den Brink.
Trevor Stirling, an analyst at Bernstein, said he expected this would be Heineken’s last difficult quarter, and that investors would have to wait to see any margin expansion.
