Heineken toasts 2019 after beer sales rise in all regions

By Philip Blenkinsop

BRUSSELS (Reuters) - Heineken, the world's second-largest brewer, said higher beer sales and consumers trading up to more expensive drinks will boost earnings in 2019 after reporting growth in every region last year, sending its shares up 4 percent.

The Dutch maker of Heineken, Europe's top-selling lager, as well as Tiger, Sol and Strongbow cider, said on Wednesday 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 percent increase.

Shares in the brewer, the world's second-largest after Anheuser Busch InBev, which reports results on Feb. 28, were up 4.5 percent by 0839 GMT, making them among the strongest in the FTSEurofirst 300 index of leading European stocks.

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 euros ($1.13 billion) per year over the past three years.

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

"There were some people very bearish on both Q4 and on guidance and you see the stock popping nearly 5 percent today," said Bernstein Research's Trevor Stirling.

The Dutch brewer, whose Heineken lager is the top seller in Europe, 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.

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

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 America country.

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

The brewer's operating profit before one-offs rose 6.4 percent on a like-for-like basis in 2018 to 3.87 billion euros ($4.39 billion), just above the average forecast of 3.85 billion euros in a Reuters poll.

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

($1 = 0.8832 euros)

(Reporting by Philip Blenkinsop, Editing by Sherry Jacob-Phillips)