CFO René Hooft Graafland told investors that consolidated organic volumes declined 2.2 per cent compared to the equivalent quarter last year but would have been “more or less stable” had it not been for the Russian effect.
Russian woes
Graafland said the performance in Russia was better than in the first half of the year when the brewer was hit by a 200 per cent hike in excise taxes.
But the company’s financial spokesperson said the figures were still not good as Heineken continues to lose market share. In an effort to persuade lost customers to return it has realigned its pricing and upped marketing spend.
Elsewhere Heineken has struggled to combat a declining appetite for beer. With the exception of France and Portugal, in Western Europe, poor weather and low consumer confidence put the brakes on demand and consolidated organic volumes dropped 3.9 per cent.
World Cup effect
Graafland said the tendency for beer sales to drift after the World Cup also had a downward impact on sales. This factor was mentioned earlier in the week in a market report from the British Beer & Pub Association indicating that UK beer volumes had dropped around 10 per cent in Q3.
There were some bright spots in the global picture. Heineken said higher volumes in South America, Canada and the Caribbean helped make up for declines in the US and in Asia and Africa higher volumes were recorded. South Africa, Taiwan and Vietnam were mentioned as strong growth drivers.
In its reporting for Q3, Heineken included the results from FEMSA Cerveza, which it acquired at the beginning of the year. This added 10.4m hectolitres to the total volume count, making Q3 consolidated volume 28 higher than the same period last year.
Graafland said integration of FEMSA Cerveza has unrolled as planned and that it is on track to achieve €150m in cost savings from synergies following the acquisition.
Heineken reiterated its forecast from 25 August 2010 of an organic increase in net profit of at least low double digits for the full year 2010.