HEINEKEN N V S/ADR - HEINY STOCK NEWS

On March 28, 2022, HEINEKEN announced its decision to exit the Russian market, deeming its operations unsustainable amid ongoing geopolitical tensions. The company halted all investments and production of the Heineken® brand in Russia. An orderly transfer of ownership to a new entity is planned, ensuring compliance with local laws. HEINEKEN guarantees the payment of salaries for its 1,800 employees until the end of 2022 amid the transition, although it anticipates a total impairment and exceptional charges of around €0.4 billion from this move.

Heineken® has launched its first virtual beer, Heineken® Silver, in the digital platform Decentraland. This innovative offering replaces traditional brewing ingredients with computer-generated alternatives, showcasing Heineken's expertise in a digital format. The launch event featured interactive experiences, including pixelated food and celebrity appearances. Global Head of Brand, Bram Westenbrink, emphasized the ironic nature of the product, highlighting that while it brings a unique concept to the metaverse, it cannot be tasted physically. Heineken's commitment to innovation continues with this venture into the virtual realm.

Heineken N.V. reported a strong financial performance for 2021 with key highlights including a 12.2% organic growth in net revenue (beia) and a remarkable 43.8% growth in operating profit (beia), reaching a 15.6% margin.

Net profit (beia) surged 80.2% to €2,041 million, while diluted EPS (beia) increased to €3.54. The company achieved gross savings of nearly €1.3 billion, aiming for €2 billion by 2023. Despite facing inflation and supply chain pressures, CEO Dolf van den Brink expressed confidence in long-term growth, driven by their EverGreen strategy and sustainability initiatives.

HEINEKEN plans to acquire control of Distell and Namibia Breweries Limited (NBL), forming a new majority-owned business valued at approximately €4 billion. The transaction includes a recommended offer valuing Distell at €2.2 billion and NBL's 25% stake in HEINEKEN South Africa at €1.5 billion. This merger aims to create a portfolio with leading brands such as Heineken®, Savanna, and Windhoek, enhancing HEINEKEN's market position in Southern Africa. The move is expected to generate significant synergies, with EPS expected to be accretive within one year.

On 27 October 2021, Heineken N.V. (OTCQX: HEINY) released its third quarter trading update. Beer volume fell by 5.1% organically in Q3, although it saw a 4.0% increase year-to-date. Notably, Heineken® brand volume rose by 8.0% in Q3, totaling a 15.1% increase for the first nine months. The integration of United Breweries in India is progressing well. The company maintains its full-year expectations despite volatility in the macro environment, with net profit for the first nine months reported at €3,082 million, aided by an exceptional gain from the acquisition of United Breweries.

Heineken N.V. reported strong results for the first half of 2021, with net revenue (beia) of €9,971 million, a 14.1% organic growth. Consolidated beer volume grew by 9.6%, driven by a 19.6% rise in Heineken® sales. Operating profit (beia) increased 109.3% to €1,628 million. Net profit (beia) surged 320.3% to €896 million, with diluted EPS reaching €1.56. Despite these positives, the company anticipates ongoing challenges, including persistent COVID-19 impacts and rising commodity costs, which may affect future margins.

HEINEKEN has increased its stake in United Breweries Limited (UBL) from 46.5% to 61.5% after UBL's AGM on July 29, 2021, establishing control over the company. UBL, recognized for its Kingfisher brand, is poised to be a top operating company within HEINEKEN, tapping into India's growth potential where per capita beer consumption is low at 2 liters annually. Despite this strategic move, HEINEKEN anticipates a small positive impact on its EPS but a diluted effect on operating profit margin.

Heineken N.V. (HEINY) has successfully acquired an additional 39,644,346 ordinary shares in United Breweries Limited (UBL), increasing its ownership from 46.5% to 61.5%. This strategic move enhances Heineken's control over UBL, reflecting its commitment to expanding its market presence. The acquisition underlines Heineken's long-term strategy to bolster its portfolio and increase revenue streams through UBL's established distribution network and brand value.