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Heineken retains margin growth target for volatile 2017
[BRUSSELS] Heineken, the world's second largest brewer, slightly exceeded expectations with earnings in 2016 as Mexico and Vietnam and large European markets fared well and forecast volatile markets but margin expansion this year.
The Dutch maker of Europe's top-selling lager Heineken, Tiger and Sol sold 3 per cent more beer last year, with sales of the Heineken brand growing even faster and the sharpest increase in Asia.
Sales also grew in France, Italy, Poland, Spain and Mexico, but fell in Nigeria, one of its top four markets, as well as in the Democratic Republic of Congo and in Russia.
The company forecast that it would meet its medium-term target for operating margin expansion of 40 basis points this year after a 54 point improvement in 2016.
"Excluding major unforeseen macro economic and political developments as well as the impact of the proposed acquisitions in Brazil and in the UK, we expect continued margin expansion in 2017 in line with our previous guidance," Chief Executive Jean-Francois van Boxmeer said in a statement.
Heineken said it had assumed a negative impact from currencies comparable with that of last year.
Heineken's operating profit excluding one-offs rose by 9.9 per cent on a like-for-like basis excluding currency movements and one-offs to 3.54 billion euros (S$5.35 billion) last year. That compared with the 3.51 billion euro average forecast in a Reuters poll.
Heineken has now become the world's number two brewer, although the gap between it global leader AB InBev has widened after the latter's near US$100 billion takeover of SABMiller late last year.
Heineken has since committed some US$1.4 billion to buy most of the pubs of Britain's Punch Taverns and the Brazilian business of Japan's Kirin.