Heineken to Cut Office Costs as Covid Surge Clouds Outlook

(Bloomberg) -- Heineken NV, the world’s second-largest brewer, plans to cut personnel expenses by 20% at headquarters and regional offices as Covid-19’s resurgence clouds its outlook.

• Although beer volume fell less than analysts expected in the third quarter -- 1.9% on an organic basis, compared with a 6.6% consensus -- volatility due to the pandemic makes it impossible to provide a specific forecast, the company said.

Key Insights

• After holding off on job cuts through 2020, Heineken is moving to streamline its office functions from the beginning of next year.
• The better-than-expected sales performance was driven by Heineken’s namesake brand, which was been a marketing focus in recent years and is widely available in supermarkets as bars in some countries continue to face restrictions.
• Danish brewer Carlsberg A/S on Tuesday lifted its forecast for a second time. Distiller Campari also reported strong results. Beer leader Anheuser-Busch InBev NV is set to report earnings later this week.

Market Reaction

• Heineken shares fell as much as 3% in Amsterdam. They’ve lost 18% this year.

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