Heineken Profit Beats Estimates; Dutch Brewer Unveils New Cost-Saving Goal

Heineken Profit Beats Estimates; Dutch Brewer Unveils New Cost-Saving Goal

MARKETING NEWS

Bloomberg - Feb 15th, 09:16

Heineken NV (HEIA), the world’s third- biggest brewer, reported annual profit that beat estimates and unveiled new cost-saving targets amid increased expenses for making beers including Desperados and Amstel. 

Earnings before interest and tax in 2011 climbed to 2.7 billion euros ($3.44 billion), excluding some one-time items, the Amsterdam-based company said today in a statement. The median estimate of eight analysts surveyed by Bloomberg News was for profit on that basis of 2.65 billion euros.

Stripping out acquisitions, disposals and currency fluctuations, Ebit last year rose 1.4 percent, compared with the median analyst estimate for 0.4 percent growth.

Heineken forecast that input costs per hectoliter will increase about 6 percent this year, and said it expects to mitigate that through “planned revenue growth initiatives, as well as ongoing efficiency programs.” The company announced a 500 million-euro savings program from 2012 to 2014 and said it expects employee numbers to reduce this year.

Heineken gets about 48 percent of earnings from Europe, according to UBS AG estimates, and is among beermakers that are pushing into emerging markets to keep sales growing. The Dutch brewer bought Mexico’s Fomento Economic Mexicano SAB’s beer unit in April 2010 to expand into Latin America.

“Revenue development will continue to be supported by an ongoing shift towards higher growth economies in Africa, Latin America and Asia” in 2012, the company said today.

So-called organic revenue rose 3.6 percent, exceeding the median estimate for a 2.8 percent increase. Total revenue increased 6.1 percent to 17 billion euros, Heineken said.

Organic adjusted net income was 1.58 billion euros compared with 1.45 billion a year earlier, more than the company’s forecast that profit on the same basis would be “broadly in line” with fiscal 2010. Heineken reduced its outlook in August as low consumer confidence in Europe and wet weather in July and August reduced the amount of beer it sold.