Dutch brewer issues stark warning
The news from the world’s third-biggest brewer, the most exposed of the big players to western Europe’s struggling economies, drove its shares down as much as 16% to a 21-month low and hit others in the sector.
The Dutch group, which saw first-half profits fall short of expectations, was the last of the world’s top four beer makers to report.
The picture it painted of economic uncertainty and unemployment driving Europeans and Americans away from bars and cafés was seen as a stark one for the food and drink sector.
“It’s an implicit profit warning of 13%,” said Bernstein Research analyst Trevor Stirling.
“If you were an optimist you could say that tourists will go back to Egypt and summer in Europe would not be as bad next year, but Greece is unlikely to be better, Russia maybe not and barley prices will be a lot higher.”
Heineken is Europe’s largest beer maker and the market leader in Greece and Italy.
It holds the number two spots in Ireland, Portugal and Spain, other countries either bailed out or seen by many in the financial markets as in line for rescue.
“Heineken is the first beverage company, maybe the first consumer company, to warn of an impact on consumer demand from the current crisis,” said analyst Philip Morrisey at Berenberg Bank.
In the first half, the comparable net profit rose 5.7%, excluding new consolidations and currency effects, to €694 million, below the average forecast in a Reuters poll of €746m.
The company reported first half operating profit of €1.26 billion, up 3.9%, compared with analysts’ consensus forecast of €1.32bn.
Heineken trading conditions remained favourable in Latin America, sub-Saharan Africa and Asia-Pacific, but not in developed markets.
Heineken chief executive Jean-François van Boxmeer said: “We have seen a very bad summer... At the same time, we also see in a number of markets, more in Europe and the USA, weak consumer confidence. You see uncertainty reflected in lower on-premise sales,”
The Dutch brewer said it had already experienced weak beer sales in the normally high-selling season of July and early August due to poor summer weather in Europe and worsening consumer sentiment there and in the US.
