Picture: Matthew Lee Picture: Matthew Lee
London - Heineken, the world’s third-largest brewer, reported third-quarter sales growth that beat analysts’ estimates as a warm European summer spurred beer drinking.
So-called organic revenue increased 7.5 percent, the Amsterdam-based company said on Wednesday, topping the 3.9 percent median of 14 estimates. Heineken also said it has discontinued its share buyback program after recent acquisitions including Diageo’s Guinness stout brand in Malaysia and Red Stripe lager. The shares rose as much as 3.7 percent in early Amsterdam trading.
“They’re a very strong set of numbers,” Trevor Stirling, an analyst at Sanford C. Bernstein, said by phone. “Some of it is flattered by the weather in Europe and Mexico.”
Heineken’s industry is consolidating as the world’s two largest beermakers, Anheuser-Busch InBev and SABMiller, have agreed to merge in a $106 billion deal. Large brewers are seeking to gain share through acquisitions as the consumption of mass-market beer wanes in Europe and North America. This month, Heineken completed the purchase of a 50 percent stake in Lagunitas, a craft brewer based in California.
The company expects to “continue to deliver positive top and bottom line growth,” Chief Executive Officer Jean-Francois van Boxmeer said in a statement. Heineken repeated its guidance for operating margin expansion, while saying currency fluctuations may benefit so-called net profit by 50 million euros ($55 million).
The discontinuation of the buyback comes after the company had said it would deploy as much as 750 million euros to repurchase its shares following February’s divestment of the Empaque packaging operations in Mexico. The company has bought back 365 million euros worth of shares as of October 26.
Third-quarter beer volume also beat estimates, rising 5.4 percent, compared with the 2.6 percent gain predicted by analysts. Both figures are reported on a so-called consolidated basis, and exclude the effects of acquisitions, disposals and currency shifts.
BLOOMBERG