Heineken sees revenue increase 4pc to €4.97bn but Europe sales show decline
HEINEKEN, the world's third-biggest brewer, has reported stronger than expected third-quarter group revenue, boosted by US and emerging market strength and price hikes, but investors focused on weakness in Europe.
Europe's largest brewer, whose Heineken brand is the continent's top-selling beer, said the main causes were a double-digit percentage decline in Portugal, which entered its deepest recession since the 1970s this year, and the withdrawal of a product from Finland.
While most other regions saw an increase in volumes and revenues, western Europe, which provided just under half of the Dutch brewer's revenue last year, continues to suffer declining demand. Group sales there fell 2.1pc in the third quarter.
Heineken, which also makes Amstel beer and Strongbow cider, said consumer caution also led to low single-digit sales declines in Britain, the Netherlands and Spain, although beer volumes rose in France and Italy.
Heineken shares have steadily risen after it won a battle to take full control of Tiger beer maker Asia Pacific Breweries (APB) last month.
However, the shares were down 2.6pc at €46.42 during trading, making them among the weakest in the FTSEurofirst 300 index of leading European stocks.
Analysts said they had expected western European volumes to be largely unchanged year-on-year, with drinking spurred by warmer, drier weather in August and September.
Andrew Holland, beverage analyst at Societe Generale, said: "They have expanded into developing markets, but western Europe is still a significant part of their business and it's a drag."
Heineken's presence in Europe was boosted by its 2008 carve-up with Carlsberg of British brewer Scottish & Newcastle.
However, since then it has been increasing its exposure to developing countries, including the 2010 purchase of the brewing assets of Mexico's FEMSA and its move this year to take full control of APB.
Heineken said group beer volume rose by 4.4pc in the Americas, with stronger sales in Brazil, Mexico and the United States of brands including Dos Equis, Tecate and Kaiser.
In the Asia-Pacific region, group volumes were up 4.8pc, with heavier drinking in Indonesia, Singapore, Thailand and Vietnam and a high single-digit percentage expansion in India, where it has a joint venture with United Breweries, the maker of Kingfisher lager.
Revenue rose 4pc to €4.97bn.