Heineken shares fall as brewer lowers growth target

By: Ilona Billington
Ilona Billington
Ilona is a freelance writer and editor with over 15 years experience reporting and writing about UK and European… read more.
on Feb 12, 2018

Heineken shares are trading in the red Monday, as the Dutch-based brewer said it expects profit growth in 2018 to be lower than the levels targeted between 2014-17. Heineken also reported its operating profit was in line with forecasts at €3.76 billion, in 2017.

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By 1000 BST, Heineken shares were trading 2.41% lower at €81.82. The Heineken stock was moving broadly higher until the beginning of February, when the share price dropped from a level of around the €91 mark.

Heineken outlook marred by ‘volatility’                                                                            

Heineken’s outlook for 2018 states the company is targeting an operating margin growth level of 25 basis points. That’s below the 40 basis points it targeted in the previous four years.

“We expect the environment will continue to be marked by volatility and uncertainty,” Jean-François van Boxmeer, Heineken’s CEO and Chairman of the Executive Board.

“For 2018, excluding major unforeseen macro economic and political developments, we expect to deliver an operating profit margin expansion of around 25bps. This includes a residual dilutive effect on margins from the acquisition of Brasil Kirin,” van Boxmeer added.

In addition to the Brazilian acquisition in 2017, Heineken also purchased 1,900 pubs from Punch Taverns in the UK and completed full ownership of Lagunitas.

Heineken earnings details

While Heineken’s outlook may have disappointed some investors, its 2017 results were positive.

It’s operating profit growth of 6.2% came as revenue grew 5.4% to €21.9 billion.  Heineken also retained its crown as the top lager in Europe. Meanwhile, the company also noted that sales of Heineken lager accelerated across the US, during 2017.

Global sales volumes of Heineken grew 4.5% during 2017, “one of the brand’s strongest performances in recent years,” the Heineken press release states.

“We delivered strong results in 2017, with all regions contributing to organic growth in volume, revenue and operating profit,” van Boxmeer said.

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