NETHERLANDS: Heineken sees H1 profits fall as Western Europe slumps
- H1 net profits fall 11% to EUR734m (US$983m)
- Net sales down 7% to EUR9.35bn
- Operating profits up 17% to EUR1.22bn
- Western Europe operating profits drop 10%
Heineken struggled in Western Europe
Heineken has posted a drop in first-half sales and profits as high unemployment and bad weather in Western Europe hit demand in the key region.
Net profits fell 11% to EUR734m (US$983m) in the six months to the end of June, the Dutch brewer said today (21 August). Net sales dropped by 7% to EUR9.35bn over the same period while operating profits roser by 17% to EUR1.22bn.
Group volumes fell by 3% in the half.
No second-quarter results were disclosed.
Heineken said “economic uncertainty and ongoing weak consumer sentiment” will continue over the rest of the year and trading conditions will remain similar across all of its markets. However, the group noted there was better weather last month across Western Europe and it expects better volumes in some developing markets.
Western Europe was worst affected by weak consumer sentiment, with sales down by 6% and operating profits down by 10%. Asia-Pacific, meanwhile, saw sales surge by 766% because of the addition of Asia Pacific Breweries (APB), which Heineken took full control of in the first quarter.
Cold and wet weather in Europe also dragged down Heineken's Q1 sales despite a profits boost from the APB purchase.
The brewer said it now expects to realise EUR625m in cost savings under a three-year programme ending next year - instead of EUR525m - through more efficient purchasing.
Heineken's share price dropped by 3.7% in morning trading on the Amsterdam stock exchange.
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