Heineken's Profits Rise 4.1% in 2009

Feb. 23, 2010
For 2010 growth in Mexico, India

Dutch brewing giant Heineken posted on Feb. 23 a better-than-expected rise in net profit in 2009 and said deals in Mexico and India would open the door to growth in emerging markets.

"In one of the most challenging trading environments ever witnessed in our industry, we have delivered an outstanding financial performance, transformed our platform for future growth and built a more competitive business," chief executive Jean-Francois van Boxmeer said.

Heineken's net profit rose to 1.05 billion euros (US$1.43 billion) last year compared to 1.01 billion euros in 2008. Sales increased by 2.7% to 14.7 billion euros despite a 1.5% drop in the volume of beer delivered last year during the global economic crisis, the company said.

"Strong pricing delivered stable revenues that compensated for lower volumes," van Boxmeer said. The company plans to increase prices again in 2010 but not as much as last year. "The global economic environment will continue to lead to lower beer consumption and down-trading in a number of regions in 2010. Price increases will be at levels well below those of 2009. However, Heineken aims to continue passing on excise duty increases through higher sales prices."

Heineken said it was preparing to integrate Fomento Economico Mexicano SA once it completes the acquisition of the Mexican brewer in the second quarter. It will buy FEMSA in a share deal that values the company behind the Dos Equis and Sol brands at 5.3 billion euros.

Heineken also entered into a new partnership in December with India's United Breweries Ltd, the maker of Kingfisher beer, and has completed the Sedibeng Brewery in South Africa.

"The intended acquisition of FEMSA Cerveza and our new partnership with United Breweries in India have increased our exposure to fast growing, developing markets," van Boxmeer said. "These agreements together with our new, fully operational brewery in South Africa will materially enhance the growth profile of Heineken," he said.

The group said sales fell 1.6% to 1.54 billion euros in the Americas last year. In eastern and central Europe, sales dropped 13% to 3.2 billlion euros while beer volume was down 10% owing to the impact of recession and higher prices, Heineken said.

In western Europe, sales rose 10% to 8.43 billion euros and beer volume was up 6.3%. Sales also rose in the Africa and Middle East regions by 2.4% to 1.82 billion euros.

Founded in the 19th century in Amsterdam, Heineken makes more than 200 different beers and ciders and employs more than 55,000 people worldwide.

Copyright Agence France-Presse, 2010

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