Heineken unveils 2 bln euro cost saving plan as earnings sink

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BRUSSELS, Feb 10 (Reuters) – Heineken NV, the world’s second largest brewer, reported annual results broadly as bad as expected and unveiled a new plan to boost income and find around 2 billion euros ($2.4 billion) of cost savings over the next three years.

The brewer of Europe’s top selling lager Heineken, along with Tiger and Sol, said in a statement on Wednesday that ongoing COVID-19 restrictions meant 2021 revenue, operating profit and operating profit margin would be below levels in 2019, before the pandemic struck.

The brewer unveiled details of a strategic review and said its new “Evergreen” plan would boost income and raise margins.

The company said it wanted superior top-line growth and would push its premium brands, such as Heineken, and zero-alcohol lager even more. It also aims to become the best digitally connected brewer to serve consumers increasingly looking for beer online.

The company said it would produce 2 billion euros ($2.42 billion) of gross savings by redesigning its organisation to make it more efficient and effective, reduce the complexity and number of its products and identify its least effective spending.

The company said it expected market conditions to improve gradually in 2021 and to continue to improve into 2022, with a slow recovery of bars and restaurants in Europe.

It said it expected to achieve an operating profit margin before one-offs of 17% by 2023. That compared with 12.3% last year and 16.8% in 2019.

Operating profit in 2020 fell 35.6%. ($1 = 0.8249 euros) ($1 = 0.8249 euros) (Reporting by Philip Blenkinsop; Editing by Kim Coghill)

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