Heineken, the world's second largest brewer, increased beer sales in the first three months of 2018, with an earlier Easter and sharp volume increases in Asia and the Americas countering weakness in Europe.
The Dutch maker of Heineken, Tiger and Sol lagers said on Wednesday that beer volumes rose 4.3 percent year on year -- a shade below the 5 percent average forecast in a Reuters poll -- and maintained its full-year guidance.
'In Line With Expectations'
"Performance in the first quarter was in line with expectations, with volume growth benefiting from an earlier timing of Easter this year and a slow start last year," said Jean-François van Boxmeer, chairman of the executive board and CEO.
"The Heineken brand grew by 8.1% and we saw continued growth momentum in key markets around the world. In Europe, volumes were negatively impacted by cold weather across the region. Our full year guidance remains unchanged."
The group said that consolidated beer volumes were down by 1.7% in organic terms in Europe, with the benefits of an earlier Easter offset by colder weather.
In the UK, it said that total volumes were down by mid single digits, while in Poland and the Netherlands, there was also a mid single digits decline due to reduced promotional activity. In France, Spain and Austria, beer volumes declined low single digits.
Italy, however, bucked the trend, with beer volumes growing by double digits, partly due to increased promotional activity.
Share Performance
Heineken shares were down 1.9 percent at 0805 GMT, among the worst performers on the FTSEurofirst index of leading European stocks.
"It seems quite a strong share reaction. Europe is naturally somewhat weaker than expected, but other regions are good ... All in all the results are reasonable, although helped by Easter and compared to a weak start to last year," said KBC Securities analyst Wim Hoste.
The earlier Easter meant stocking ahead of the festive period took place in March rather than April, helping to boost volumes by 6.8 percent in the Americas, while a later lunar New Year drove Heineken to an 11.3 percent gain in Asia.
Volumes in Mexico, Heineken's largest market, were up by a high single-digit percentage and there was double-digit growth in its second-largest market, Vietnam, and in Brazil, where it increased its presence last year.
The brewer also registered improved business in Russia, Ethiopia and Ivory Coast, though sales slipped in Egypt and Nigeria, its biggest African market.
Profit Margin
The company retained its full-year outlook for its operating profit margin to expand by about 25 basis points.
It also said that negative currency effects on operating profit would be 200 million euros ($247 million) based on current exchange rates. In mid-February, it had put the figure at 190 million euros.
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
