Olly Wehring

Analysis - Future looks tough for Heineken, for now

By | 24 October 2013

Its been a tough year for beer, and Heineken has borne the brunt

It's been a tough year for beer, and Heineken has borne the brunt

Heineken's troubles still have some distance left to run, but the brewer is still set fair for the long term, according to an analyst.

Yesterday (23 October), the company reported a bleak set of numbers both for its third quarter and the calendar year-to-date. As sales came in flat and volumes dipped in both the three months and the nine months to the end of September, Heineken warned that it now sees its full-year profits in 2013 decreasing by low single-digits compared to last year.

In a note to investors today, Santander echoed the brewer's downbeat mood. “Overall, it appears management is still dealing with weak demand across core markets with no short-term bounce expected,” said analyst Anthony Bucalo. “This is a tough year for global beer and Heineken seems to be bearing a significant brunt of that weakness.”

“From the conference call, it appears management is still dealing with weak demand across core markets with no bounce expected in the medium term so we are not changing our investment view.”

Bucalo added, however, that he sees Heineken's longer-term outlook as positive. “We believe in Heineken’s long-term story,” he said, “but we have yet to see evidence of a turnaround to support a better underlying investment case in the medium term.”

Heineken's share price fell immediately after yesterday's results announcement, and was trading at EUR50.31 as of 1552 CEST today.

Expert analysis

Heineken N.V. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report

Canadean's "Heineken N.V. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts,major products and services, swot analysis, business description, company history, financial analysis, mergers & acquisitions, key employees, company locations and subsidiaries, employee biographies as well as competitive benchmarking data.

Sectors: Beer & cider, Company results

Companies: Heineken

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