Heineken revenue misses projections as Europe fails to deliver

Heineken NV, the Dutch brewer that spurned an overture from SABMiller Plc last month, posted third-quarter sales growth that fell short of projections, Bloomberg reported.

Revenue was up 0.2 per cent from a year earlier, the Amsterdam-based company said today, while beer volume declined 0.2 per cent, against the 0.5 per cent gain projected by analysts. Both figures are reported on a so-called consolidated basis, and do not include the effects of acquisitions, disposals and currency swings.

The decline in Europe, coupled with the continued fallout from sanctions against Russia, had hit a wide range of industries from luxury goods to industrial equipment. Heineken's beer volume in Central and Eastern Europe was down 6.6 per cent and falling 3.1 per cent in Western Europe, missed analysts' estimates. The company, however, continued to retain its outlook for the year for operating profit margin expansion in 2014, which it expects to be ahead of its medium-term guidance of a 40 basis point expansion.

The main mass in the numbers was clearly the Western European region, Bloomberg quoted Marco Gulpers, an analyst at ING as saying. However, the confirmation of EBIT growth for the year should bring comfort, he added.

Meanwhile, Heineken NV today announced its trading update for the third quarter of 2014.

The company said group revenue was up 0.7 per cent organically, with group revenue per hectolitre up 0.9 per cent.

Group beer volume was up 0.1 per cent organically, with positive growth momentum in Asia Pacific, Africa Middle East and the Americas region, offset by lower volumes in Europe.

Heineken premium brand sales rose 3 per cent, with growth across all regions. Full year outlook remains unchanged; expect operating profit margin expansion in 2014 is expected to be ahead of medium term target level of around 40 basis points per annum.

"Amidst a volatile global environment and poor weather during the high selling season in Europe, we maintained top-line growth. This was led by broad-based growth across our developing markets. Our performance in the first nine months of the year underlines the benefit of sustained investments in long-term brand building, innovation and strengthened sales execution. This gives us confidence in reaffirming our full year outlook for operating profit margin expansion in 2014 to be ahead of our medium-term guidance," said Jean-François van Boxmeer, chairman of the executive board and CEO.