Heineken Toasts 2019 After Beer Sales Rise In All Regions

By Dave Simpson
Heineken Toasts 2019 After Beer Sales Rise In All Regions

Heineken has said that higher beer sales and consumers trading up to more expensive drinks will boost its earnings in 2019 after reporting growth in every region last year, sending its shares up 4%.

The Dutch maker of Heineken, as well as Tiger, Sol and Strongbow cider, said that revenue growth should be above the industry average and that operating profit should grow at roughly the same rate as 2018's 6.4% increase.

Barley, aluminium and transport costs would increase, but the impact of foreign currencies could finally turn positive after their depreciation to the euro cut revenues by about €1 billion per year over the past three years.

Analysts pointed to better than expected 2018 earnings, with a more positive view on currencies as well, although the operating profit growth forecast was broadly in line with the market view.

World Cup, Hot Summer And Increased Heineken Sales

The Dutch brewer benefited last year from the soccer World Cup and a hot summer in much of Europe and achieved further growth in its top two markets, Mexico and Vietnam.

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Its marquee Heineken brand increased sales by 7.7%, its strongest growth in more than a decade, with expansion in Africa, Eastern Europe and the Americas.

Brazil

However, its operating margin declined due to foreign exchange rates and because it expanded by more than expected into Brazil, where margins are below the group average.

Heineken acquired the loss-making Brazilian operations of Japan's Kirin in 2017 to become the number two player in the South American country.

Chief executive Jean-Francois van Boxmeer said the company was not giving a forecast on margins.

Statistics

The brewer's operating profit before one-offs rose 6.4% on a like-for-like basis in 2018 to €3.87 billion, just above the average forecast of €3.85 billion in a Reuters poll.

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Earnings per share at €4.25 was above the Reuters consensus forecast of €4.10.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.