Heineken’s operating profit in Vietnam drops 32% in 2023

Heineken’s operating profit (per before exceptional items and amortization-beia formula) in Vietnam dropped 32% year-on-year last year, according to the Dutch brewer’s 2023 performance review.

Heineken’s global operating profit (beia) fell from €4,502 million ($4,853 million) in 2022 to €4,443 million ($4,789.6 million) in 2023, due to impacts of currency translation with negative €102 million ($110 million) and consolidation impacts of negative €35 million ($37.7 million).

The two factors outweighed the organic growth of €78 million ($84.1 million), Heineken’s data showed. Despite the growth, Vietnam’s figure fell 32%, while all other markets went up 7.6%.

Regarding net revenue (beia), Heineken’s worldwide performance grew from €28,694 million ($30,932.6 million) in 2022 to €30,308 million ($32,672.5 million) in 2023. The biggest contribution belonged to the price-mix factor with an increase of €2,941 million ($3,170.5 million), or 10.2%, year-on-year.

Meanwhile, the total volume of consumption led to an impact of negative €1,350 million ($1,455.3 million), or down 4.7% year-on-year. Vietnam and Nigeria accounted for 2.3 percentage points of the fall, Heineken said.

The Vietnamese market continued to be impacted by external factors, Heineken stressed. The mainstream portfolio outperformed the market with brands Bia Viet, Bivina, and La Rue gaining market shares.

“Tiger's performance was heavily impacted by the economic slowdown and a stricter enforcement of zero tolerance whilst driving regulations (Decree 100) in Vietnam, its largest market,” Heineken emphasized.

Highlighting the key role of the Vietnamese market for premium beer in the Asia-Pacific region, Heineken said “premium beer volume declined in the high-teens, driven disproportionately by Tiger in Vietnam”, while “outside of Vietnam, premium beer volume grew by a mid-single-digit in the region”.

In Vietnam, the beer market was impacted throughout the year by a slowdown of the economy and the stricter enforcement of the zero tolerance whilst driving regulations, disproportionately affecting our strongholds and the premium segment, Heineken noted.

The brewery estimated that Vietnamese beer market volume declined by a high-single-digit for the year, and net revenue (beia) declined organically in the low-twenties.

Regarding the global performance in 2023, Heineken recorded a net profit of €2,304 million ($2,483.8 million) on a net revenue of €36,375 million ($39,212.8 million).