By Robert van den Oever
AMSTERDAM--Brewer Heineken NV (HEIA.AE) Wednesday posted modest
profit growth as a strong performance in emerging markets more than
offset a sluggish display in Europe, while it continued to make
gains in the U.S.
The world's No. 3 brewer by sales expects for full year 2012 a
profit before exceptional items --a measure closely-watched by
analysts--broadly in line with last year, on an organic basis.
Chief Executive Jean-Francois van Boxmeer said: "We expect
continued top-line momentum to benefit from ongoing high-impact
brand marketing as well as capital investments in higher growth
markets."
The results were welcome respite for a company locked in a
complicated battle for control of Singapore-based Asia Pacific
Breweries Ltd. (A46.SG), the maker of lager brand Tiger. CEO van
Boxmeer said: "We are working towards a swift completion of the
transaction."
Heineken, which makes Amstel and Sagres as well as its eponymous
lager brand, is aiming to boost its presence in high-growth
developing economies to offset weakness in Europe through the
acquisition of one of Asia's most profitable beer businesses.
Like its rivals, Heineken has struggled in Europe in recent
years as recessions and government austerity measures have curbed
consumer spending. Drinkers are turning to cheaper and less
profitable brands, resulting in margin pressure.
In the first half, Heineken's net profit rose 30% from a year
earlier to 783 million euros ($970 million) due to a book profit on
the sale of a minority stake in a brewery in the Dominican
Republic, of EUR131 million. Profit before exceptional items rose
1.6% to EUR705 million, falling a little short of analyst
exceptions of EUR737 million.
Revenue increased 5% to EUR8.778 billion.
Beer sales in the U.S. rose 2.4%, while in the Americas they
increased 10%. In Western Europe, volume pressure remained,
resulting in 3.4% lower volume, mainly due to countries like the
Netherlands, Spain and France. Asia and Africa posted higher
volumes.
Heineken last week raised its bid for APB to S$53 from S$50 a
share for the 39.7% owned by joint-venture partner Fraser &
Neave Ltd. (F99.SG). If that is accepted, Heineken will offer the
same price for the remaining shares to the other APB shareholders,
bringing the entire offer to about $6.3 billion.
Heineken raised its original offer after a rival
bidder--companies owned or related to Thai Beverages PCL (Y92.SG)
from billionaire Charoen Sirivadhanabhakdi--made an unsolicited
S$55-a-share bid for 7.3% in APB owned by F&N, which expires on
Friday.
The board of F&N has recommended Heineken's offer, and
F&N shareholders will vote for Heineken's offer at an
extraordinary shareholders meeting in the coming weeks. ThaiBev,
which competes with Heineken in Asia, is the biggest shareholder in
F&N with 26.4%.
Heineken and rival Carlsberg A/S (CARL-A.KO) have much smaller
exposure to emerging markets than market leaders Anheuser-Busch
InBev NV (BUD) and SABMiller PLC (SAB.LN). The latter makes about
70% of its revenue in developing economies.
Heineken shares closed Tuesday at EUR44.50, valuing the company
at EUR25.6 billion. The brewer's shares have risen 23% in the past
12 months.
Write to Robert van den Oever at
robert.vandenoever@dowjones.com
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