Wet European summer dampens Heineken beer sales
By Philip Blenkinsop
BRUSSELS (Reuters) - Heineken (HEIN.AS: Quote), the world's third-largest beer maker, reported lower than expected sales in the third quarter as Europeans drank less during a wet summer, but kept its forecast of improved profitability this year.
The Dutch brewer, which makes Europe's best-selling Heineken lager as well as Sol, Tiger and Strongbow cider, said beer sales were barely changed in the July-Sept period with declines in both eastern and western Europe, but increases elsewhere.
Heineken nevertheless repeated it expects its full-year margin - or profitability - to expand by more than its 40 basis point target after a strong first half, cost cuts and expected solid sales in large markets in December.
Heineken shares were down 1.6 percent at 57.23 euros at 1056 GMT, making them the weakest performers in the STOXX European food and beverage index .SX3P.
Still, it has outperformed peers this year, rising 16.4 percent since the end of 2013, compared with 8.7 percent for top brewer Anheuser-Busch InBev (ABI.BR: Quote), 8.9 percent for No. 2 SABMiller SAB.L and 12.4 percent for Carlsberg (CARLb.CO: Quote)
"It's a small miss, primarily in central and eastern Europe where there are relatively low margins," said Trevor Stirling, analyst at Bernstein Securities, which does not hold shares in the company and rates it "outperform".
"In Africa, the Americas and Asia-Pacific, it was more in line and they are high-growth, high-margin markets."
The world's top brewers are relying on emerging markets such as Latin America, Asia and Africa for growth amid subdued consumer spending in slowly recovering Europe and limited U.S. expansion. Continued...