Heineken profits rise 40% in UK despite falling beer volumes in Europe
Brewing giant Heineken has grown its net profit by 41% to €1.4b (£1.2b) thanks to its acquisition of a Mexican brewing firm FEMSA, with profit also growing in the UK thanks to rising prices.
Overall revenue for the full year 2010 also climbed by 21% to €16.1b (£13.6b) as a result of the deal. Organic revenue outside of the acquisition dropped by 2.2%.
In the UK, Heineken said earnings before interest and tax grew "strongly", primarily driven by higher pricing and cost savings against a backdrop of a beer market declining by 4%. The company also sold distribution business Waverley TBS to an investment firm during the period.
Beer volumes in Western Europe were down 3.6% to 45.7 million hectolitres for the period, which Heineken blamed on the economic environment, particularly in the on-trade in the UK and Ireland, Italy, Spain and the Netherlands.
Commenting on the results, Jean François van Boxmeer, chairman and chief executive, said: "We have a clear plan of action for addressing the challenging market and consumer dynamics that exist in Europe and the USA, focusing our efforts on delivering value growth through increased investments in existing and new higher-margin brands such as Dos Equis, Desperados and Strongbow. Over time, this is expected to deliver volume and value share growth."
He added: "The acquisition of the beer operations of FEMSA provide us with significant new opportunities in three of the four largest profit pools in the global beer market: Mexico, Brazil and the USA."
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By Neil Gerrard
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