Heineken set for sales slowdown after Brazil boost

Heineken: Sales slowdown warning. Picture: TSPL
Heineken: Sales slowdown warning. Picture: TSPL
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BREWING giant Heineken, owner of brands including Deuchars IPA, Kronenbourg and Strongbow, yesterday warned sales are likely to grow at slower rate this year after a strong 2014 helped by higher beer sales during the World Cup in Brazil.

The Dutch company, the world’s third-largest brewer that also owns Amstel, Bulmers, Foster’s and Sol, saw profits rise 11 per cent to €1.52 billion (£998 million) in the 12 months to 31 December as it benefited from strong growth in markets including western Europe, Africa, Asia and the Americas.

Group revenue grew 3.3 per cent to €21.2bn with beer volumes 2 per cent higher for the full year, stronger in the first half due to favourable weather, the World Cup and a soft comparable period.

The company said it was increasing its dividend payout ratio to between 30 and 40 per cent of net profits from 30 to 35 per cent. A proposed total dividend of €1.10 – up 24 per cent on last year – was well ahead of forecasts.

Although it expected revenue to grow in 2015, the company is now predicting slower expansion of beer sales this year.

Jean-François van Boxmeer, chief executive, pictured, said the performance during 2014 “reflects the success of our strategy” and said that a number of Heineken’s global brands – including Affligem, Desperados and Sol Premium – had delivered double-digit growth in the year.

“We continued to invest in our portfolio of brands and we have significantly improved our commercial execution,” he said.

“Whilst we expect further volatility in emerging markets and deflationary pressures in 2015, we are confident that we will deliver further top and bottom line growth in the year ahead.”

Heineken’s UK business employs around 2,000 people at eight sites, including Edinburgh, Livingston, Hereford, Ledbury, London, Manchester and Tadcaster.

The company said yesterday that it was continuing to look at cost savings across the group.

“As a result of ongoing productivity initiatives, Heineken expects an organic decline in the total number of employees in 2015,” it said.

Raw material prices are expected to be slightly lower in 2015 excluding foreign currency movements.

Last month the company settled a row with JD Wetherspoon which had seen the pub chain stop selling Heineken’s beers at any of its 926 pubs across the UK and Ireland.

The dispute arose after Wetherspoon said Heineken’s Irish operation had refused to supply some products to a new pub in County Dublin and had demanded personal guarantees from chief executive John Hutson.

In September Heineken, which bought the UK brewing, sales, pub tenancy and wholesaling operation of Scottish & Newcastle in April 2008, rejected an approach from SABMiller to combine their businesses in a deal potentially valued at about $40bn.