Heineken’s cost cutting boosts performance

Heineken International, the world’s third largest brewer, which owns the Heineken, Amstel and Strongbow brands, reported a 19.7% rise in profit to €1.4bn (£1.2bn).

Organic revenue for the year fell 2.2% to €16.1bn (£13.5bn) and total volume sales declined 1.7% over the year as consumers in European markets pulled back their spending.

The brewer credits its performance to its “relentless focus on cost reduction, global synergies and cash flow generation” and claims its ongoing cost-cutting program saved €280m (£236m) in 2010.

Premium brand Heineken outperformed the brewer’s broader portfolio and the wider beer market with volume growth of 3.4%.

In the coming year, the brewer plans to drive volume and market share growth in the challenging European and US markets through increased investment in high margin brands such as Dos Equis, Desperados and Strongbow.

It will also invest more in its Heineken brand and other “key brands” in its portfolio.

Jean François van Boxmeer, chairman of the Heineken executive board and CEO, says: “Heineken delivered a robust performance, generating double-digit organic net profit growth for the fifth consecutive year. We achieved this against a backdrop of an improving yet still challenging economic environment.

“I am confident that all these initiatives will provide an excellent platform for revenue and profit growth in the years ahead.”

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