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Heineken toasts 2019 after beer sales rise in all regions

Reuters  |  BRUSSELS 

By Philip Blenkinsop

(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

The Dutch brewer, whose lager is the top seller in Europe, benefited last year from and a hot summer in much of and achieved further growth in its top two markets, and

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

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.

acquired the loss-making Brazilian operations of Japan's in 2017 to become the number two player in the country.

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 poll.

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

($1 = 0.8832 euros)

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

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 14:34 IST
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