CRH and Heineken report growth in sales as results season begins

Heineken's facility in Cork. The brewery giant saw beer sales increase driven by a stead unloosening of restrictions. File Picture: Denis Minihane.

European companies are forecast to have coped with record inflation as they prepare to release a slew of first-quarter results over the coming days.

Profits are expected to have grown by 25% in the three months to the end of March, a much lower pace compared to the 60%-150% rates of 2021, but possibly solid enough to reassure markets.

Irish building materials giant CRH has led the first round of results this week, reporting a positive start to the year with Q1 sales and earnings ahead of the same period last year.

Across Ireland and the UK, sales were well ahead of 2021, reflecting good underlying demand and milder winter conditions. 

CRH implemented price increases across all products in the UK, with volume improvements also positively impacting sales. Its businesses in Ireland also recorded volume increases in all key products against a prior year.

CRH chief executive Albert Manifold said: "Although a number of challenges and uncertainties continue, our demand backdrop remains favourable and absent any major dislocations in the macroeconomic environment, we expect first-half sales, EBITDA, and margin to be ahead of the prior-year period.”

Dutch brewer Heineken stuck to its 2022 profit-margin forecast after a sharp jump in first-quarter beer sales and prices cheered investors despite added uncertainty from the conflict in Ukraine.

Driven by a steady loosening of coronavirus restrictions, particularly in Europe, Heineken's beer volumes rose by 5.2% on a like-for-like basis from the same period last year, beating the 3.5% average forecast in a company-compiled poll.

The increase in Europe was 11.5%, with beer sales in bars and restaurants almost tripling. Overall, the world's second-largest brewer also raised the average income per litre by 18.3% through direct price increases, consumers trading up to more expensive beers, and a shift in sales from supermarkets to bars, resulting in a 24.9% boost to revenue.

A Just Eat in branded clothing and bag, making a delivery in Dublin. Picture: Naoise Culhane 

Europe's biggest meal delivery company Just Eat is looking at selling US arm Grubhub less than a year after buying it, under pressure from investors to revive its shares amid stiff competition and a fading pandemic boost.

In an abrupt turnaround, Jitse Groen, CEO of parent company Takeaway, said the company had hired banks to explore a possible sale of Grubhub. In an update, the service said they handled 264.1m orders in the first quarter, compared with an analyst estimate of 286m.

Despite weathering the first quarter, the big question for investors during the reporting season, which begins in earnest next week, will be their outlook for the rest of 2022.

Kasper Elmgreen, head of equities at Amundi, expects first-quarter results to be "OK", but is focused on price pressures and uncertainty resulting from the Ukraine crisis.

"It's super, super, super important for us to understand what are the abilities of the companies of passing on the cost increases onto the consumers," said Mr Elmgreen.

Additional reporting Reuters