Heineken N.V. reports 2024 half year results

Rhea-AI Summary

Heineken N.V. (HEINY) reported solid 2024 half-year results with 6.0% organic growth in net revenue and 12.5% organic growth in operating profit (beia). Key highlights include:

- Beer volume organic growth of 2.1%
- Heineken® brand volume growth of 9.2%
- Diluted EPS (beia) up 5.9% to €2.15
- Premium beer volume grew 5%
- Heineken® 0.0 up 14%

The company updated its full-year outlook, expecting operating profit (beia) to grow organically in the range of 4% to 8%. Heineken plans to significantly increase investments in marketing and sales in key markets during the second half of 2024. The company remains on track to deliver €0.5 billion in gross savings for 2024.

Positive

• 6.0% organic growth in net revenue (beia)
• 12.5% organic growth in operating profit (beia)
• Heineken® brand volume growth of 9.2%
• Premium beer volume grew 5%
• On track to deliver €0.5 billion gross savings for 2024
• Gained market share in the majority of European markets

Negative

• Net profit decreased to -€95 million due to non-cash impairments of €1,050 million
• Volatility in African markets, with risk of currency devaluation in Ethiopia and hyperinflation in Nigeria and Egypt
• Expected increase in other net finance expenses compared to 2023
• Effective tax rate (beia) expected to increase to around 28% (from 26.8% in 2023)

Amsterdam, 29 July 2024 – Heineken N.V. (EURONEXT: HEIA; OTCQX: HEINY) announces:

	Key Highlights

• Revenue €17,823 million
• Net revenue (beia) 6.0% organic growth; per hectolitre 4.3%
• Beer volume organic growth 2.1%; Heineken^® volume 9.2% growth
• Operating profit €1,542 million; operating profit (beia) organic growth 12.5%
• Diluted EPS (beia) €2.15; up 5.9%
• Outlook for the full year updated: operating profit (beia) expected to grow organically in the range of 4% to 8%.

	CEO Statement

Dolf van den Brink, CEO and Chairman of the Executive Board, commented:

"We delivered a solid first half of the year, organically growing net revenue (beia) 6% and operating profit (beia) 12.5%. The Americas region stood out, as portfolio mix and major ongoing saving initiatives resulted in a strong operating profit improvement, notably in Brazil and Mexico. APAC returned to growth, led by India and with the Vietnamese beer market stabilizing. We are actively navigating volatility in Africa. In Europe we gained market share in the majority of our markets and beer volume was slightly up compared to last year despite poor weather in June.

Our EverGreen strategy continues to shape our business. Premium beer volume grew 5%, led by the Heineken® brand, up 9%. Heineken^® was proud to receive a record 22 awards from the Cannes Lions Festival. We consolidated leadership in the Low & No-alcohol category, with Heineken® 0.0 up 14%. We are firmly on-track to deliver €0.5 billion gross savings for 2024, enabling us to invest in growing the category and in building strong brands.

In the second half, we will materially step-up investment in market and sales expenditures, with notable increases in key markets. We update our full year outlook to grow operating profit (beia) organically in the range of 4% to 8%, reflecting our confidence in delivery and commitment to invest behind growth and to future-proof our business.”

Financial Summary1

IFRS Measures	€ million		Total growth		BEIA Measures	€ million	Organic growth2
Revenue	17,823		2.2%		Revenue (beia)	17,812	5.9%
Net revenue	14,824		2.1%		Net revenue (beia)	14,814	6.0%
Operating profit	1,542		-4.3%		Operating profit (beia)	2,079	12.5%
					Operating profit (beia) margin	14.0%
Net profit*	-95				Net profit (beia)	1,204	4.4%
Diluted EPS (in €)*	-0.17				Diluted EPS (beia) (in €)	2.15	5.9%
*Includes non-cash impairments of €1,050 million in accordance with IFRS (IAS 28 and 36). For more details go to pages 5, 14 and 29.					Free operating cash flow	655
					Net debt / EBITDA (beia)3	2.4x

1 Consolidated figures are used throughout this report, unless otherwise stated. Please refer to the Glossary for an explanation of non-GAAP measures and other terms.
Page 12 includes a reconciliation versus IFRS metrics. These non-GAAP measures are included in internal management reports that are reviewed by the Executive Board of
HEINEKEN, as management believes that this measurement is the most relevant in evaluating the results and in performance management.
2 Organic growth shown, except for Diluted EPS (beia), which is total growth.
3 Includes acquisitions and excludes disposals on a 12 month pro-forma basis.

	Outlook Statements

Our EverGreen strategy is a multi-year journey, and we are pleased with the solid progress in the first half of 2024. While several key emerging markets had to navigate a volatile macroeconomic environment, overall, we achieved more balanced, volume- and value-led revenue growth, and good operating leverage. We also continue to deliver against our premiumisation, digital and sustainability ambitions, funded by gross savings and productivity gains.

We continue to expect variable costs to increase organically by a low-single-digit on a per-hectolitre basis. While we expect to benefit from lower commodity and energy prices compared to 2023, this is more than offset by local input cost inflation and currency devaluations, particularly in Africa. We also expect higher than historical average wage inflation.

Across the company, our markets and functions realized more than €300 million of gross savings in the first half. We have clear line of sight on our cost saving initiatives and are therefore confident to achieve our c.€500 million ambition for 2024, ahead of our medium-term commitment of €400 million per year.

We are reinvesting a larger proportion of these savings into marketing and sales. In the second half, we will materially step-up investment in our brands focused on our greatest opportunities for long-term sustainable growth. Notable increases will be in Mexico, Brazil, Vietnam, India, and South Africa.

At the same time, volatility remains a reality. Consumer confidence and economic sentiment in developed markets remain below their historical average. In the Africa & Middle East region there is a risk of material currency devaluation in Ethiopia and hyperinflation in Nigeria and Egypt. We are confident we are able to adapt, yet this continues to bring some short-term uncertainty.

Reflecting our confidence in delivery and commitment to invest behind growth and in future-proofing our business, we update our full year outlook to grow operating profit (beia) organically in the range of 4% to 8%.

For the full year of 2024, we further expect:

• An effective interest rate (beia) of around 3.5% (2023: 3.4%).
• As indicated at our earlier outlook statement, other net finance expenses will increase compared to 2023. This is driven primarily by the impact from significant devaluations and hard currency scarcity in key emerging markets. We made progress in reducing hard currency exposures and are on track with the rights issue in Nigerian Breweries Ltd. If current conditions prevail, we expect more stable other net financing expenses in the second half of the year.
• We have updated our view on the average effective tax rate (beia), and now expect this to land at around 28% (2023: 26.8%), an improvement relative to the previous guidance of 29%, including further insights into Brazil's 2024 tax law changes.

Given the factors above, we revise the expected organic net profit (beia) growth to be more closely in line with the expected operating profit (beia) growth.

Finally, we continue to expect investments in capital expenditure related to property, plant and equipment and intangible assets to be below 9% of net revenue (beia) (2023: 8.8%).

Enquiries

	Media		Investors
	Joris Evers		Tristan van Strien
	Director of Global Communication		Director of Investor Relations
	E-mail: pressoffice@heineken.com		Mark Matthews / Chris Steyn
	Tel: +31-20-5239355		Investor Relations Manager / Senior Analyst
			E-mail: investors@heineken.com
			Tel: +31-20-5239590

 

	Conference Call Details

HEINEKEN will host an analyst and investor conference call in relation to its 2024 Half Year results today at 14:00 CET/ 13:00 BST. The call will be audio cast live via the company’s website: www.theheinekencompany.com. An audio replay service will also be made available after the conference call at the above web address. Analysts and investors can dial-in using the following telephone numbers:

United Kingdom (Local): 020 3936 2999

Netherlands (Local): 085 888 7233

USA: 1 646 787 9445

For the full list of dial in numbers, please refer to the following link: Global Dial-In Numbers

Participation password for all countries: 939700 

Editorial information:
HEINEKEN is the world's most international brewer. It is the leading developer and marketer of premium and non-alcoholic beer and cider brands. Led by the Heineken® brand, the Group has a portfolio of more than 350 international, regional, local and specialty beers and ciders. With HEINEKEN’s over 90,000 employees, we brew the joy of true togetherness to inspire a better world. Our dream is to shape the future of beer and beyond to win the hearts of consumers. We are committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through "Brew a Better World", sustainability is embedded in the business. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets. We operate breweries, malteries, cider plants and other production facilities in more than 70 countries. Most recent information is available on our Company's website and follow us on LinkedIn, Twitter and Instagram.

Market Abuse Regulation
This press release may contain price-sensitive information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Disclaimer:
This press release contains forward-looking statements based on current expectations and assumptions with regard to the financial position and results of HEINEKEN’s activities, anticipated developments and other factors. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements also include, but are not limited to, statements and information in HEINEKEN’s non-financial reporting, such as HEINEKEN’s emission reduction and other climate change related matters (including actions, potential impacts and risks associated therewith). These forward-looking statements are identified by use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “milestones”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. These forward-looking statements, while based on management's current expectations and assumptions, are not guarantees of future performance since they are subject to numerous assumptions, known and unknown risks and uncertainties, which may change over time, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s ability to control or estimate precisely, such as but not limited to future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials and other goods and services, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, environmental and physical risks, change in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN’s publicly filed annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which speak only of the date of this press release. HEINEKEN assumes no duty to and does not undertake any obligation to update these forward-looking statements contained in this press release. Market share estimates contained in this press release are based on external sources, such as specialised research institutes, in combination with management estimates. HEINEKEN undertakes no responsibility for the accuracy or completeness of such external sources.

Attachment

• Please click here to download the full press release.

FAQ

What was Heineken's (HEINY) organic net revenue growth in H1 2024?

Heineken (HEINY) reported 6.0% organic growth in net revenue (beia) for the first half of 2024.

How much did Heineken's (HEINY) operating profit grow organically in H1 2024?

Heineken's (HEINY) operating profit (beia) grew organically by 12.5% in the first half of 2024.

What is Heineken's (HEINY) updated full-year outlook for 2024?

Heineken (HEINY) updated its full-year outlook, expecting operating profit (beia) to grow organically in the range of 4% to 8% for 2024.

How much did Heineken's (HEINY) beer volume grow organically in H1 2024?

Heineken's (HEINY) beer volume grew organically by 2.1% in the first half of 2024.

What was the growth rate of Heineken® 0.0 in H1 2024?

Heineken® 0.0 grew by 14% in the first half of 2024.