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Heineken hikes dividend, sees slower growth in 2015

A woman reaches for a can of Heineken at a restaurant in Bangkok July 20,2012. REUTERS/Sukree Sukplang

By Philip Blenkinsop

BRUSSELS (Reuters) - Heineken NV (HEIN.AS), the world's third-largest brewer, has forecast slowing sales and margin growth in 2015, after a year marked by emerging market expansion and the football World Cup allowed a sharp dividend hike.

The Dutch brewer, top seller in Europe with brands including Amstel, Sol and Cruzcampo as well as its own name, benefited from increased beer sales in Africa, the Americas and Asia.

Consolidated operating profit before one-off items rose 6.4 percent to 3.13 billion euros (£2.3 billion), just above the average of 3.11 billion in a Reuters poll of nine analysts.

The company said it had decided to increase its dividend payout ratio to between 30 and 40 percent of net profit from 30 to 35 percent. Its proposed total dividend of 1.10 euros was well above the 0.95 euro expected.

"It's 14 percent ahead. When investors are floundering around for ideas for income, that rates as good," said Societe Generale analyst Andrew Holland.

Heineken shares were up 1.4 percent at 65.49 euros by 0945 GMT, not far from a record 67.28 set earlier this month and outperforming peers in the European sector (.SX3P).

Heineken, in which Mexico's Femsa (FMSAUBD.MX) is a major shareholder and which competes with the likes of SABMiller (SAB.L) and AB Inbev (ABI.BR), said it expected revenue to grow in 2015, but with slower expansion of beer sales than in 2014, partly because the first half of last year was so strong.

For 2015, it said it would take a 25 basis point hit from the sale of its Mexican packaging business, meaning margin expansion would be below its 40 point annual target. It grew by 90 basis points in 2014.

Margin expansion was greatest in Mexico, Nigeria, Brazil and Vietnam.

Heineken said, all things being equal, it could gain 130 million euros in operating profit this year from the weaker euro. However, exports to the United States would only show benefits from the stronger dollar from 2016 because of hedging.

Nigeria could feel the impact of security concerns and lower oil prices, though Chief Executive Jean-Francois Van Boxmeer said the company could weather shocks there.

Heineken has suffered in the past from contraction in Europe negating the effect of expansion in developing markets.

However, Europe was less of a drag last year, with western European revenue up 0.3 percent and operating profit down just 0.1 percent. Europe as a whole delivered about half of group revenue and just over a third of operating profit last year.



(Editing by Sunil Nair and David Holmes)