Heineken CEO Exits on High Note as Earnings Beat Estimates

(Bloomberg) --

Heineken NV’s chief executive officer is leaving on a high note, reporting further gains for the brewer’s namesake brand a day after announcing plans to step down.

CEO Jean-Francois van Boxmeer will hand the baton to Dolf van den Brink, 46, who leads the Dutch company’s Asia-Pacific operations, in June. The world’s second-largest brewer on Wednesday reported earnings that beat analyst estimates, driven by the green-labeled flagship brand.

Van Boxmeer, 58, has been CEO for almost 15 years, during which he has overseen 30 billion euros ($33 billion) worth of acquisitions. Those deals have turned the company into the world’s No. 2 brewer, after Anheuser-Busch InBev NV.

Full-year adjusted net income reached 2.52 billion euros ($2.8 billion), driven by sales in Asia. The brewer’s namesake brand had its fastest shipment growth in more than a decade. The shares rose as much as 4.6%.

The incoming CEO has been with the Dutch brewer for more than two decades. His choice doesn’t come as a surprise, said analyst Jos Versteeg at InsingerGilissen Bankiers, as Heineken had sufficient internal candidates and Asia has been growing in importance for the brewer.

Van den Brink’s appointment “indicates that there are no major changes in the pipeline,” he said. “Shareholders buy Heineken for security. It is a very well-run company where no crazy things happen.”

Sales from Asia Pacific rose 12%, more than twice as fast as any other region.

The company said its president for Europe, Stefan Orlowski, is leaving to pursue “private entrepreneurial interests.” He was seen as a likely CEO candidate, having run a business that’s the source of almost half of Heineken’s sales. Previously he was in charge of the Americas.

Namesake Strength

Heineken has been depending more on the strong performance of its namesake brand lately as consumers move from low-end beers to international premium alternatives in developing economies. In the key market of Vietnam, the company has been hit by concern over the effect of a new drunken-driving law.

Brazil is now the largest market for the Heineken brand, after the company bought Kirin’s business in that country and managed to turn it around. The brand had double-digit growth in 40 countries.

Van Boxmeer’s global push culminated with a $3.1 billion purchase of a 40% stake in China’s largest beer maker in 2018. The deal with the brewer of the Snow brand helped the Dutch company to expand in a heated lager market that’s dominated by local labels.

The departing CEO joined the company as a management trainee in 1984. He was named to the board of Heineken Holding NV, the vehicle through which the Heineken family controls the brewer.

“I wrote 15 pages of a book that’s 154 pages,” the CEO said in a phone interview. He said that he had no regrets other than wishing he had acted faster on gender balance in a “very male” brewing industry.

To contact the reporter on this story: Thomas Buckley in London at tbuckley25@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier, Neil Callanan

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