Europeans Raise a Pint to Heineken's Low-Alcohol Beer as Brewer Posts Profit Rise
July 31 2017 - 4:47AM
Dow Jones News
By Nick Kostov
Heineken NV's beer sales in Europe are up--but the extra drink
isn't going to customers' heads.
The Dutch brewer's profit increase in the first half of 2017 was
fueled by double-digit sales growth of no- and low-alcohol drinks
in Europe, while its namesake brand also performed well.
Heineken joins the world's largest brewer, Anheuser-Busch InBev
NV, in reporting results that beat estimates, as it benefits from a
rebounding European beer market. This comes after years of
stagnation in the region, with consumers turning away from
alcoholic drinks to healthier options.
"It was a really good performance of Europe, with the growth
coming from a number of countries," Chief Financial Officer
Laurence Debroux said. "It was pretty balanced."
The world's second-largest brewer by sales said profit growth
was strongest in Europe, as beer volumes rose in France, Italy,
Spain and Portugal, helped by warmer weather.
In May, Heineken launched an alcohol-free version of its
flagship lager and results "already look promising", including in
the U.K. and France, the company said. Brewers earn fatter profit
margins from nonalcoholic beer because of the absence of excise tax
and the fact that these beers often sell at a premium.
Although Europe was the standout performer, the Dutch brewer
said beer volumes, revenue and profits grew on a like-for-like
basis in all four of its regions, with turnarounds in Africa and
the Americas after a slow start to the year.
Net profit rose 49% to EUR871 million ($1.02 billion) on the
comparable period in 2016 when the company booked an impairment
charge on its business in the Democratic Republic of Congo. Revenue
rose 5.7 % on an organic basis to EUR10.48 billion.
Consolidated beer volumes rose 2.6% organically in the period,
beating analyst expectations of a 1.7% rise.
Heineken ranks as the world's No. 2 brewer by sales, a long way
behind AB InBev, who spent more than $100 billion on a takeover of
SABMiller in 2016. The company said its full-year expectations,
including further organic revenue and profit growth, remain
unchanged.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
July 31, 2017 04:32 ET (08:32 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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