Heineken share prices have dropped after the Dutch family brewer reported a 4.9% slowdown in global growth over the first six months of 2016 compared to last year.
The world’s third largest brewery announced this week that growth in beer volume in Asia Pacific at 16%, Europe at 2.4% and the Americas at 1.6% offset a marked 5.9% drop in growth in Africa, the Middle East, and Eastern Europe.
The timing of Easter and a strong Asian New Year boosted first quarter results. However, beer volume in the second quarter declined “due to tougher comparatives and a challenging economic backdrop,” the company said.
The market reacted negatively to the half-year results, with a 3.6% fall in share price from $84.31 on 29 July to $81.25 by the end of 1 August, the day of the half-year announcement.
Share price fell further to a low of $79.40 today, a drop of 5.8% since 29 July.
But the second quarter was not all doom and gloom for the brewing family business, thanks to cider volume increasing double digits in the United Kingdom, “the home base of cider”, in addition to strong growth in Europe, Ireland, Romania, the Czech Republic, and the Americas.
Jean-François van Boxmeer, chief executive and executive board chairman, said the brewery’s first half performance reflected “a very good first quarter”, helped by softer comparatives, and a “solid second quarter.”
While Africa Middle East and Eastern Europe continued to be “challenging”, performance was strong in some key developing markets such as Vietnam and Mexico,” van Boxmeer said.
“Despite adverse economic conditions in some developing markets and currency headwinds, we expect full year margin expansion in line with our medium term guidance of around 40bps per annum.”
Van Boxmeer was credited by Fortune for spending more than $28 billion on 49 acquisitions, expanding Heineken’s operations from 39 countries in 2002 to 71 today.
The four generations actively involved in Heineken Holding have a 45.8% share in their 143-year-old business. The Amsterdam headquartered company employs more than 73,000 staff, and was ranked 459th on the 2016 Fortune Global 500 with 2015 revenues of €20.5 million ($22.8 million), up 6.5% on 2014.