Fastest Heineken Beer Growth in Decade Boosts Earnings - EcoFinBiz Blog

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Fastest Heineken Beer Growth in Decade Boosts Earnings

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(Bloomberg) -- Heineken NV, the world’s second-largest brewer, reported full-year earnings that beat analysts’ estimates, helped by the fastest sales growth of its namesake brand in a decade.

  • Adjusted operating profit rose 6.4 percent on an organic basis to 3.87 billion euros ($4.4 billion) in 2018, beating the average analyst estimate of 3.84 billion euros. Full-year beer volume rose 4.2 percent on an organic basis, the Dutch company said. Analysts expected 4 percent growth.

Key Insights

  • The rise of low- and no-alcohol beers is increasing demand for Heineken 0.0, helping the brewer’s flagship brand boost volumes 7.7 percent. Heineken was also helped by acquisitions in countries such as Mexico that helped distribution, Chief Executive Officer Jean-Francois Van Boxmeer said in a phone interview.
  • One driver of gains was Brazil, where Heineken became the second-largest brewer in 2017 when it bought Kirin Holdings Co.’s business there. Other markets that had double-digit growth included South Africa, Russia and the U.K.
  • Higher input costs have hampered consumer-goods companies reporting this quarter, including Unilever and Carlsberg. Heineken reported that profit growth was partly due to running its business more efficiently as commodity expenses rise. The company forecast mid-single-digit growth in operating profit this year as it tries to manage those costs.

Market Reaction

  • The stock rose as much as 4.4 percent in Amsterdam. The shares have gained 10 percent over the past month.

Get More

  • See more details.
  • Read the statement.

To contact the reporter on this story: Thomas Buckley in London at tbuckley25@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

©2019 Bloomberg L.P.

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