Heineken withdraws guidance as coronavirus dents sales
Heineken has withdrawn all guidance for the year as beer volumes fell in the face of the coronavirus outbreak.
The Dutch brewing company said the pandemic was having a “significant impact” on business in 2020, noting the restriction of movement, outlet closures and the lockdown of production facilities.
Total consolidated volume is expected to decrease four per cent in the first quarter, with beer volume down two per cent. Heineken warned the impact of the pandemic on sales was likely to worsen in the second quarter.
The government ordered the closure of all pubs and restaurants before imposing the nationwide lockdown, meaning the hospitality sector has been particularly badly hit by the outbreak.
Heineken said it entered the current crisis with a strong balance sheet as well as undrawn committed credit facilities. It added it had secured additional financing on the debt capital market in recent weeks. It placed €1.4bn (£1.23bn) of five- and 10-year notes in late March.
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Heineken, whose major markets are Brazil, Mexico and Vietnam, said it would provide more information on further measures to mitigate the impact in its first quarter trading update at the end of the month.
This week Heineken scaled back operations in Mexico in response to government orders aimed at curbing the spread of infection. The government halted all non-essential economic activity after the declaration of a national health emergency last week.
In February the beer giant said lower barley and aluminium would boost 2020 profits and revenues this year.
Chief executive Jean-Francois van Boxmeer had said the coronavirus pandemic would not be “paralysing, that would be too big a word, but it will have some consequences.”