Heineken NV, the world’s second largest brewer, said on Monday its operating margin in 2018 would grow below the rate it had guided for between 2014 and 2017, citing a volatile market environment and an acquisition in Brazil.
The Dutch brewer, whose Heineken lager is the top seller in Europe, had a target of increasing its operating margin by 40 basis points per year between 2014 and 2017 and said it expected this margin to increase by 25 basis points in 2018. In 2017, margins expanded by 14 basis points.
“We expect the environment will continue to be marked by volatility and uncertainty,” Chief Executive Jean-Francois van Boxmeer said in a statement.
Operating profit before one-offs in 2017 came in at 3.76 billion euros ($4.62 billion), a gain of 6.2 percent, and in line with the average forecast in a Reuters poll of 3.75 billion euros.
Heineken said it would pay a dividend of 1.47 euros per share for its 2017 financial year, a 9.7 percent increase from the previous payout to shareholders.
The brewer of Tiger and Sol lagers and Strongbow cider said beer volumes increased in all of its business regions in 2017, though growth in its European market was almost flat.
The European performance was impacted by Polish discounters selling smaller volumes and cool summer weather in most of its markets in the second half.
Heineken trades on a forward enterprise value to core profit (EV/EBITDA) multiple of about 12 times. That is above Danish rival Carlsberg, which has been hit by multiple problems in Russia, but below that of global leader Anheuser-Busch InBev, which has made acquisitions and cut costs but seen sales fall in the United States and Brazil.