February 17, 2022: -Heineken cast doubt on its mid-term profit margin target because of the significant impact of inflation after reporting more robust than expected earnings in 2021 from higher prices and cost savings.

The world’s second-largest brewer said that the Covid-19 pandemic would still affect 2022 revenues, and the impact from inflation and supply chain pressures would be significant.

“However, we expect a stable to modest sequential improvement in operating profit (beia) in 2022,” the company said, which refers to figures before exceptional items and amortization.

The maker of Europe’s top-selling lager Heineken, Tiger, Sol, and Strongbow cider said that it still aimed for an operating profit margin of 17% in 2023 but that there was “increased uncertainty” given the economic environment and increasing input costs.

It said it would update its 2023 guidance later in the year.

The Dutch brewer sold 4.6% over a beer in 2021 than in 2020, with increases in all regions except Asia, price increases, and a shift to more expensive beers driving net revenue up 12.2%.

The company’s operating profit increased 43.8% higher on a like-for-like basis to 3.41 billion euros ($3.87 billion), above the company-compiled consensus for 3.30 billion euros. Heineken had said its 2021 results would be below pre-pandemic 2019.

Heineken said it had achieved 1.3 billion euros of an overall 2 billion euro saving plan involving shedding 8,000 jobs.