Heineken is too exposed to Europe
Total revenue in the quarter rose 13 percent to EUR 4.6 billion. Net profit was EUR 520 million, the company said, without giving a comparable figure.
So-called consolidated beer volume fell 2.2 percent excluding acquisitions, the company said.
The volume of beer sold in central and eastern Europe dropped 4.8 percent, with Russia declining “significantly, albeit at a slower rate than in the first half.” SABMiller, the world’s number two brewer by volume, reported in October that its sales in Russia had returned to growth in the same period.
Group beer volume in Heineken’s Africa and Middle East unit jumped 12 percent, led by Nigeria. It rose 3 percent in Asia. Volume growth in Latin America, the Caribbean and Canada “largely compensated” for weakness in the U.S., Heineken said.
Heineken bought FEMSA’s beer unit earlier this year to boost sales in emerging markets. The company said unfavourable weather conditions affected beer sales in Mexico.
Heineken will aim to increase prices in 2011, Chief Financial Officer René Hooft Graafland was reported as saying. “The scope and opportunities for that will differ, obviously, from country to country,” he said. He announced that the brewer would raise prices in Nigeria toward the end of this year to benefit from increased beer consumption during the election campaign. Nigeria’s next general election is scheduled for early 2011.
For the group Mr Hooft Graafland expects the cost of raw materials and packaging to show a “modest increase” next year. “It won’t be a decline like we saw this year. It’ll be an increase in raw and pack, but not at the levels we saw in 2007 and 2008.”
When asked if increases in expenses would cause gross margins to contract in 2011, Mr Hooft Graafland said “that depends on what we can achieve with the pricing.”
