Beer giant Heineken N.V. HEINY is operating under the assumption that "it will take time to get out of the pandemic," Heineken CEO Dolf van den Brink told CNBC.
Full Year Results And Outlook: Heineken reported Wednesday morning full-year 2020 results, highlighted by an 11.9% decline in net revenue organic growth as consolidated beer volume was down 8.1%. Net profit was down 49.4% and diluted EPS was down 54.3%.
The unfortunate reality is that by Heineken's estimates, less than 30% of all bars and restaurants are operating in some capacity in Europe. (Note: Reported figures above are based on BEIA measures, that is before exceptional items and amortization of acquisition-related intangible assets.)
The company isn't expecting market conditions to improve until the bottom half of 2021. As such, management expects 2021 performance to remain below 2019 levels and isn't expecting a recovery in operating profit margin to around 17% by 2023.
Job Cuts: Heineken also announced a new 2 billion euro gross savings program. Part of the savings initiative includes eliminating around 8,000 jobs across the world.
"We are saddened to have to make this intervention," the CEO told CNBC. "We postponed it as long as we could."
Nevertheless, drastic action is necessary to ensure the company emerges "stronger" out of the current crisis.
Glimmer Of Hope: Heineken saw a clear correlation between beer volume growth in countries that lifted lockdown orders in the third quarter of last year, the CEO said.
The Heineken brand also experienced double-digit growth rates in 25 countries across the world, aided in part by the alcohol-free Heineken 0.0, he said. The company hopes to build on its areas of strength when conditions allow it.
"As much as we are dealing with the crisis right now, we are fairly confident and bullish about the future," the CEO said.
HEINY Price Action: Heiniken shares are down 2.55% to $52.45.
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