Heineken said the Euro 2024 football tournament failed to deliver a significant boost. Photo / Getty Images
Heineken said the Euro 2024 football tournament failed to deliver a significant boost. Photo / Getty Images
Heineken blamed the weather after its sales disappointed in a second quarter also hit by a writedown of its stake in a Chinese brewer, sending shares in the world’s second-largest brewer down 7%.
The Dutch group said the volume of beer it sold in the first half rose 2.1%, belowthe 3.4% increase forecast by analysts, after the Euros football tournament failed to deliver a significant boost.
“Typically big sports events like the Euro cup have a positive impact but the weather has been significantly below long-term averages and below last year, impacting our business,” said chief executive Dolf van den Brink.
A weaker second quarter overshadowed what was a strong start to the year from Heineken as it reversed a period of falling sales volumes. The brewer faced criticism for raising prices too high in 2023, leading to a drop in volumes as consumers balked.
Laurence Whyatt, an analyst at Barclays, said the reaction in the share price on Monday was likely to have been influenced by positive comments made by executives at a recent conference.
Beer sales volumes in Europe rose 0.6% in the first half compared with an expected 2% uplift, with north and western Europe hit hardest.
In the Americas, sales increased 1.1% compared with 3.1% growth anticipated by analysts, driven by growth in Brazil and Mexico but weighed down by fewer shipments to wholesalers in the US.
The Dutch group said the volume of beer sold rose only 2.1% on an organic basis in the first six months of the year. Photo / Herald on Sunday
Heineken expects to deliver organic operating profit growth of between 4 and 8% for the full year, compared with its previous guidance of between low and high single-digit growth.
The brewer also reported an €874 million impairment on its investment in China’s largest brewer, after softening consumer demand pushed China Resources Beer’s share price lower than the price Heineken paid for its stake.
The impairment led to a net loss of €95m in the first half of the year for Heineken.
Heineken said it had written down the value of its 20% interest in China Resources Beer after the company’s share price fell significantly, “possibly reflecting concerns on the macroeconomic environment in China and its impact on consumer demand”.
The brewer added that the share price performance had deviated from the strong operational results of China Resources Beer.
