HEINEKEN, the Dutch brewer that acquired Scottish & Newcastle in 2008, has forecast depressed consumer confidence in the UK and Europe.
It added poor weather would hit second-half figures after first-half profit fell short of predictions.
July was an “extraordinarily wet and cool month” in the Netherlands, Heineken’s home market. The UK, which analysts at UBS estimate represents about 10% of sales, also experienced cool conditions during the same month.
The company, whose British brands include Foster’s, Heineken, Strongbow, Kronenbourg 1664, John Smith’s and Bulmers, yesterday reported first- half operating profit of €1.26 billion (£1.1bn), up 3.9%, compared with analysts’ consensus forecast of €1.32bn (£1.16bn). The news depressed the group’s share price in Amsterdam.
Heineken also said it would pay investors a €0.30 interim dividend.
Jean-François van Boxmeer, Heineken’s chief executive, called the first-half performance “solid” as he reiterated the brewer’s focus on broadening its geographic footprint to target emerging markets.
“In March, we launched Heineken in the Mexican market, and in August we started brewing the Heineken brand locally in India”, as part of a partnership with UBL, the maker of Kingfisher beer, he said.
Heineken is the world’s third-largest brewer, but it has been slow to expand outside of the western European market, where it makes nearly half its sales. Despite flat organic profit figures in 2011, its bottom line will be boosted by the acquisition of Fomento’s beer unit in Mexico.
Heineken UK, the Dutch brewer’s British business, employs around 2300 people. It is a brewer and cider maker; a wholesaler and distributor of alcoholic drinks; and manages around 2200 pubs through its S&N Pub Company business, which it took over from Scottish & Newcastle.
Heineken and Carlsberg bought Scotland & Newcastle for £7.8bn in 2008, carving up its operations in the UK and abroad. Heineken took on the UK operation of S&N, which employed around 3000 staff at breweries in Manchester, Reading in Berkshire, Dunston near Newcastle, and Tadcaster in North Yorkshire as well as the Bulmers cider mill in Hereford.
The Dutch group shut the breweries in Reading and Dunston after acquiring them from S&N in cost-cutting drive.
Stefan Orlowski, managing director for Heineken in the UK said: “I am pleased with our continued positive progress in the UK, despite a challenging economic and consumer environment, particularly the performance of our premium brands, and especially the 15% year-on-year growth in Heineken sales volumes.
“Our key brands are benefiting from increased investment, providing a solid platform for us to work with our trade customers.”
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