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Family business roundup: Profit falls at Heineken and Peugeot polls apart

Two European family businesses have reported contrasting results for 2011 – while automobile-manufacturer Peugeot Citroen has been dragged down by loss in its core division, Dutch brewery Heineken has taken advantage of the booming emerging markets to offset decline in Europe.
The Dutch brewery has seen a 1% decline in profits, while fellow family business Peugeot fell by almost 50%

Two European family businesses have reported contrasting results for 2011 – while automobile-manufacturer Peugeot Citroen has been dragged down by loss in its core division, Dutch brewery Heineken has taken advantage of the booming emerging markets to offset decline in Europe.

The French family business, which is the second-largest European automaker by volume, reported a nearly 50% drop in net profits to €588 million from €1.13 billion in 2010. This was largely due to poor performance of its core automobile division in the second half of 2011, Peugeot Citroen said in a statement.

“Deterioration in our business environment from the end of the first half lead to very disappointing results from our automotive division. Other divisions - Faurecia, Gefco and Banque PSA Finance - made a positive contribution to our results,” said Philippe Varin, chairman of the company.

Overall revenues at the group, which is 30.3% owned by the founding Peugeot family, rose about 7% to €59.91 billion.

While the French company has been hit by a huge loss, fellow family-controlled brewing giant Heineken had a relatively buoyant 2011. Overall net profits at the brewer, famous for its Heineken brand of beer, declined by just around 1% over the year, the group said in a statement.

Based in the Netherlands and majority owned by the eponymous family, Heineken saw revenues for 2011 increase by 6.1% to €17.12 billion from €16.13 billion the year before.

Despite the small decline in profits, the group said it was optimistic about its outlook.

“In 2012, Heineken expects to benefit from continued positive growth momentum in higher growth economies and from revenue enhancing initiatives in developed markets,” said the statement.

Much of the sales growth in 2011 was thanks to its flagship brand’s strong performance in emerging markets and its recent acquisition spree in Nigeria and Mexico, the company added.

Non-family chairman and chief executive Jean-Francois van Boxmeer said: “The Heineken brand continued to outperform the international premium segment and overall beer market, with particularly strong brand performances in Brazil, China, France, Nigeria and Vietnam.”

Heineken, founded in 1864 in Amsterdam by Gerard Adriaan Heineken, bought Mexican beer company Femsa in April 2010 and acquired five Nigerian breweries last year.

Swedish clothing retailer Hennes & Mauritz also said on 15 February that sales for the month of January increased by 12% compared to the same month the previous year.

Controlled by the Persson family, H&M had full-year 2011 sales of around €12 billion, up 8% on 2010.

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