The company witnessed a “further moderation versus what we had expected after the first quarter,” chief executive Jean-Francois van Boxmeer said.
The second quarter was “clearly below” company expectations “and that will have an impact on total outlook for the year”.
Group beer volume fell 3% in the first half on an organic basis, the Amsterdam-based brewer said in a statement, led by a 8% decline in western Europe after an increase in French beer taxes and a prolonged spell of cool weather.
The company said it expects no organic growth this year in net income before some items. That’s less than estimated by Sanford C Bernstein analysts, who had anticipated a low single- digit increase before yesterday’s report. First-half profit on that basis fell to €679 million ($911m) from €688m a year earlier.
Heineken raised its cost-saving target to €625m between 2012 and 2014, which it will achieve through more efficient purchasing of commodities and services. It previously forecast reductions of €525m.
“The good news is that the cost savings are ahead of expectations, but the bad news is it’s still struggling with tough markets and a couple of months of good weather isn’t going to offset a bad spring,” Trevor Stirling, an analyst at Bernstein, said.
European competitor Carlsberg also reported second-quarter profit that missed estimates and lowered its forecast for beer market growth in Russia, its biggest region. The Copenhagen-based maker of Tuborg maintained its outlook for profit this year as it offset “challenging market conditions in western and eastern Europe” with cost-cutting measures.
Carlsberg shares declined 0.3% to 562 kroner in early Copenhagen trading.
Heineken has been seeking to combat waning sales in Europe with more profitable new products and cost-cutting measures as drinkers veer toward wine or spirits.
The brewer said it got 6% of revenue from new products in the first half.
Economic uncertainty and weak consumer sentiment will persist across many key markets, Heineken said, even after it benefited from better European weather in July.
Adjusted earnings before interest and taxation excluding some items rose to €1.33bn from €1.15bn. That compared with a median estimate for €1.34bn.