Heineken has reported estimate-beating sales growth boosted by a warm European summer as the world’s third- largest brewer prepares to become a distant number two.
So-called organic revenue increased 7.5 per cent, the Amsterdam-based company said on the day that Anheuser-Busch InBev was given another week by UK regulators to make a formal takeover offer for SABMiller.
That topped the 3.9 per cent median of 14 estimates. The shares rose as much as 4.6 per cent in Amsterdam.
Heineken’s industry is consolidating as the world’s two largest beer makers, AB InBev and SABMiller, seek to merge in a $106 billion deal.
Large brewers are manoeuvring to gain share through acquisitions as the consumption of mass-market beer wanes in Europe and North America.
Heineken said it has discontinued its share buyback program after recent acquisitions including Diageo’s Guinness stout brand in Malaysia, and a 50 per cent stake in California-based craft brewer Lagunitas.
“Craft beer in the US is very, very interesting,” Laurence Debroux, Heineken’s chief financial officer, said. “It’s definitely somewhere we want to play.”
Heineken repeated its guidance for operating margin expansion, while saying currency fluctuations may benefit so-called net profit by €50 million ($55 million).
The brewer left its guidance unchanged as it still sees a number of uncertainties in the remainder of the year including negative foreign-exchange swings in Mexico and Nigeria, Debroux said.
A potential slowdown in parts of Africa will be short-lived, and the continent still remains the “future world engine of consumption growth,” she said.
The discontinuation of the buyback comes after the company had said it would deploy as much as €750 million to repurchase its shares following February’s divestment of the Empaque packaging operations in Mexico.
The company had bought back €365 million worth of shares as of Oct 26th. Third-quarter beer volume also beat estimates, rising 5.4 per cent, compared with the 2.6 per cent gain predicted by analysts.
Both figures are reported on a so-called consolidated basis, and exclude the effects of acquisitions, disposals and currency shifts.
