Heineken profits drop as developing markets disappoint
Heineken reported a 4.6 percent drop in 2013 profit as the Dutch brewer struggled with worse than expected performance in developing markets and adverse regulatory developments such as higher excise duties on beer.
The firm's full year net profit before one-off items fell to 1.58 billion euros ($2.60 billion) from 1.66 billion euros, while group revenue increased year-over-year to 21.25 billion euros, from 20.98 billion euros.
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The group predicted foreign currency movement will adversely impact revenues and profits in 2014, with a negative currency impact of 75 million euros on net profits expected this year. It does however see an improved business performance this year.
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Speaking to CNBC, CEO Jean-François van Boxmeer said emerging markets still showed growth, "albeit at a slower rate than we are used to," adding that it would be very difficult to predict how currencies will behave in these regions.
"Most emerging markets will continue to grow, because the underlying factors such as strong demographics and economic development will continue in a number of these countries. For our business we can still expect growth to come in 2014 despite the currency effect – but this currency will affect all of us," he said.
Van Boxmeer also said the group's foray into cider is a "slow curve" but he expects to see growth long term.
"Cider is just talking off in the U.S., you see a double digit growth category, but it is a fairly new category, you have to compare it with where craft beers were 15 years ago. But I stress it is a long-term hold," he said.
Heineken shares traded 3 percent higher in Amsterdam following the results.
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