Earnings

EM growth to continue despite 'hiccups': Heineken CEO

CNBC with Reuters
WATCH LIVE
Heineken gets boost from emerging markets
VIDEO0:3500:35
Heineken gets boost from emerging markets

The chief executive of Heineken, the world's third largest brewer, told CNBC on Monday that he expected to see continued sales growth in emerging markets, despite the occasional "hiccup" in the future.

Heineken, the world's third largest brewer, reported higher first-half results than markets expected as it increased profit in all regions except Africa and maintained its full-year forecast of growth, albeit slower than in 2014.

The Dutch brewer fared best in Asia, where expansion was strongest thanks to double-digit percentage growth in Vietnam thanks to its Tiger brand, followed by the Americas, where Heineken brews in Mexico and exports into the United States.

In Europe, where Heineken is the market leader, the Dutch group sold less beer, a year on from the soccer World Cup and with mostly worse weather, but still persuaded its consumer to accept price hikes or shift to more expensive beer.

Jean-François van Boxmeer, chief executive of Heineken, told CNBC Monday that he expected the trend of sales growth seen in emerging markets to continue.

"The volume growth and the business growth in emerging markets is much higher than in developed markets - it is 8 percent growth year-on-year as opposed to a flatish and slightly down (growth rate) in developed markets so that's how big the difference is."

"It's a trend which is there to stay," he added. "The macro-trends over the next 25 years are poised to be positive for our industry," he added, despite some "hiccups from time to time."

Higher profit in the likes of Spain and Poland, was offset by lower earnings in countries such as Britain and Greece.

Bottles of Heineken lager in a supermarket in Slough, U.K.
Simon Dawson | Bloomberg | Getty Images

Africa was the group's weak spot, as a currency devaluation leading to inflation of over 9 percent caused margin pressure in Nigeria. The company also performed less well in the Democratic Republic of Congo and Egypt.

Overall, consolidated operating profit before one-off items rose 3.4 percent on like-for-like basis to 1.55 billion euros ($1.70 billion), above the average of 1.53 billion euros in a Reuters poll of 10 analysts.

Heineken maintained its forecast of revenue growth, with volumes rising at a slower pace than in 2014 and weighted more to the second half. The company is also targeting an annual improvement of operating margin of 40 basis points medium term.

Follow us on Twitter: @CNBCWorld