Amsterdam - Heineken NV, the world’s third-biggest brewer, said volume growth will slow in 2015 amid sluggish demand in developed markets.
Emerging markets will help offset subdued growth elsewhere and will pick up in the second half of the year, the Amsterdam-based company said in a statement. Total organic beer volume advanced 2 percent last year. The company’s operating profit margin will expand less this year than a medium-term target of a 40 basis point gain.
Volume was stagnant in western Europe, Heineken’s biggest market, in the fourth quarter and fell in central and eastern Europe as a result of the political turmoil in Russia and pricing pressure in Poland. Heineken has looked to Africa and Asia for growth, even though emerging markets have cooled and are no longer the panacea they were several years ago for consumer-product makers.
“Whilst we expect further volatility in emerging markets and deflationary pressures in 2015, we are confident that we will deliver top- and bottom-line growth in the year ahead,” Heineken Chief Executive Officer Jean-Francois van Boxmeer said in the statement.
Heineken is preparing for more turmoil in markets like Nigeria, where the declining oil price is expected to hit demand, Van Boxmeer said in an interview. The country accounts for 10 percent of Heineken’s operating profit, he added.
Dividend payout
The Desperados brewer widened its payout to as much as 40 percent of profit before some items, up from a maximum of 35 percent. The company will propose a total cash dividend of 1.10 euros a share for 2014. Profit before some items rose 11 percent to 1.76 billion euros ($2 billion) in 2014, it said, compared with the 1.74 billion-euro average estimate compiled by Bloomberg.
Brewers such as Heineken, SABMiller and Anheuser-Busch InBev NV have pursued growth through acquisitions in recent years as volume has declined in the US and Europe. Heineken, which spurned an overture from SABMiller last year, bought control of its joint venture Asia Pacific Breweries in 2012.
Heineken bought control of the beer business of Mexico’s Femsa in 2010, which gave Femsa a 20-percent interest in the Dutch company. The lockup period on a sale of that stake ends in April, leading to speculation about its future. Femsa has indicated that they “don’t expect fireworks after the first of May”, Van Boxmeer said in the interview, adding that the speculation is “very entertaining”.
Heineken’s shares rose 0.7 percent to 64.60 euros in Amsterdam trading yesterday, giving the company a market value of 37.2 billion euros.
Bloomberg