Heineken has a very poor start of the year
That’s what you get for being dependent upon Europe. Heineken, the world’s number three brewer, tempered its expectations for annual growth after reporting an unexpected decline in first-quarter sales on 24 April 2013.
The brewer said that sales volumes and revenues would grow this year, but probably at rates lower than in 2012. Previously Heineken had forecasted that growth in 2013 would be in line with last year’s.
Obviously, Heineken fears that conditions in austerity-hit markets in Europe as well as a slowdown in Nigerian sales will continue to hamper this year’s sales.
In addition to sliding sales in western Europe, the brewer also reported lower volumes in the central and eastern part of the continent, Asia Pacific and the Americas.
The first quarter is always a bad quarter for Heineken because of it falling squarely into Europe’s winter. Last year, the first three months represented 21 percent of consolidated beer volume and considerably less in terms of profit contributions, it was reported. However, it must have been a real blow to Heineken that sales in African and the Americas could not offset Europe’s disappointing performance.
Consolidated lager volume, excluding the effect of acquisitions, dropped 4.7 percent in the first quarter this year, the brewer said, thus disappointing analysts who had hoped for a 0.6 percent increase. Revenue excluding currency swings and acquisitions dropped to EUR 4.1 billon (USD 5.3 billion). Analysts had expected revenues of EUR 4.3 billion.
In western Europe, Heineken posted an 8.8 percent decline in beer volume. Central and eastern European volume dropped 3.7 percent as Russian beer tax increases and regulation to stop sales of the drink in kiosks impinged upon demand.
Unluckily for Heineken, consolidated beer volume in Asia Pacific fell 1.4 percent. Volume in the Americas (HEIA) also fell as Mexican demand waned due to bad weather and the Brazilian beer market declined. Heineken had to admit that the sales volume of its eponymous brand fell by 4.7 percent on an organic basis.
EBIT slid at a pace in “mid single digits”, excluding some items and the effect of acquisitions and currency fluctuations, Heineken said.
