Heineken NV (HEIA), the world’s third- biggest brewer, reported first-quarter sales that beat estimates as consumers drank more beer in central and eastern Europe, Africa and the Middle East.
So-called organic consolidated beer volume rose 4.7 percent from a year earlier, the Amsterdam-based company said today in a statement. The median estimate of 10 analysts surveyed by Bloomberg was for a 2 percent increase. Revenue on that basis, which excludes acquisitions and disposals, rose 6.8 percent compared with a 2.8 percent estimate.
Stripping out acquisitions, disposals and currency shifts, Heineken said earnings before interest and taxation declined “slightly” as it increased investment in some countries and the cost of beer rose. Heineken also said it booked a 23 million-euro ($30 million) impairment charge related to the disposal of a Chinese brewery.
Sales were “much better than expected in eastern Europe and Africa,” Melissa Earlam, an analyst at UBS AG in London, said today, saying profitability was “broadly in line” with her estimates and she had expected Ebit to decline after the 20 percent gain in the year-earlier period. “Consensus might nudge up slightly today.”
The stock rose as much as 4 percent and traded 3.3 percent higher at 43.73 euros as of 9:06 a.m. in Amsterdam.
Heineken is among brewers that are expanding in emerging markets as weak economies restrain growth in Europe. The brewer, which bought Fomento Economic Mexicano SAB’s beer unit in 2010, reported volumes that increased in every region except western Europe, where sales slid 1.3 percent on an organic basis. The company got about 43 percent of its revenue from the region last year. Sales soared 9.7 percent in Africa and the Middle East, and 7.5 percent in Asia Pacific.
The company reported total revenue of 3.83 billion euros in the quarter. The average estimate of nine analysts was for revenue of 3.74 billion euros.
Volume of its Heineken brand rose 8.7 percent, the company said, boosted by sales in the U.S., Vietnam, China, Brazil and Nigeria. The brewer is seeking to sell more-expensive beers, including Heineken and Desperados, in “key” markets. It announced in February that it extended a 15-year partnership with the James Bond movie franchise, and will advertise the beer to support the premiere of the new “Skyfall” Bond film in September.
The volume of beer sold rose in the U.K., France, Spain and Italy “moderately,” Heineken said. Western European sales were stinted by the “voluntary withdrawal” of a discount product in Finland, the company said. Sales fell in Portugal, Ireland and the Netherlands.
Heineken said earlier this week it will book a one-time gain of about 130 million euros from selling a 9.3 percent stake in Dominican brewer Cerveceria Nacional Dominicana to competitor Anheuser-Busch InBev NV. (ABI) Heineken had also sought to buy CND, Reuters reported March 27, before AB InBev gained control of the brewer in a $1.24 billion deal.
Heineken said today it “remains confident” in continued volume increases in Latin America, Africa and Asia. “Consumers remain cautious with their spending behavior” in some European countries and the U.S., particularly in bars and pubs, it said.
The company said in February that it plans to save about 500 million euros by 2014 by cutting costs. It forecast that the cost of making beer will rise about 6 percent this year.
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