Heineken has reported that its group beer volume decreased by 2% organically during its third quarter primarily reflecting weakness in Central & Eastern Europe beer markets and said it now expects full year net profit to decrease in the low single-digits.
The company said that the decline in beer volume across Central & Eastern Europe was partly offset by an improved volume performance in Western Europe.
Group revenue was slightly ahead of the prior year quarter (+0.4%), on an organic basis. Group operating profit on an organic basis, was slightly lower, which the company said reflected “a stable revenue performance and higher phasing of marketing spend in the quarter”.
Consolidated revenue increased 4% to €5.1bn, including a positive net consolidation impact of 7% (€369m) and an unfavourable foreign currency effect of 3% (-€171m) following the depreciation of a number of key currencies against the euro.
Organically, consolidated revenue increased by 0.2%, with a total consolidated volume decline of 3.2% more than offset by a 3.4% increase in revenue per hectolitre (including a positive country mix impact of 1%).
Reported net profit in the quarter was €483m compared with €568m in the third quarter of 2012. This included net exceptional items and amortisation costs of €70m in the quarter (compared to €38m in the prior year period).
Heineken said that volume in the international premium segment grew by 1%. Key markets contributing to brand growth in the quarter were France, Brazil, Spain, Nigeria, China and South Korea.
The company said: “During the third quarter, weak beer market conditions in Central & Eastern Europe and the delayed economic improvement in key developing markets, led to a lower than expected volume performance. Heineken will support operating profit (beia) with a continued focus on cost efficiencies and revenue management initiatives.
“Below operating profit, recent unfavourable currency movements impacted on other net finance expenses in the third quarter. Consequently, Heineken now expects full year net profit (beia) to decrease in the low single-digits, on an organic basis (previously ‘broadly in line with last year’).
“The recent strength of the euro against a number of key developing market currencies, is now expected to result in a combined impact of foreign currency translation movements and consolidation changes reducing full year 2013 net profit (beia) by approximately €40M (based on current spot rates). Heineken reaffirms all other elements of its full year outlook for 2013 as stated in its first half 2013 earnings release dated 21 August 2013.”
