Heineken Holding N.V. reports 2024 half year results

Rhea-AI Summary

Heineken Holding N.V. (EURONEXT: HEIO; OTCQX: HKHHY) reported its 2024 half-year results. Key highlights include:

Revenue: €17,823 million, with a 2.2% growth. Net revenue (beia) increased by 6.0% organically to €14,824 million.

Beer volume: Organic growth of 2.1%, with Heineken® volume up 9.2%. Operating profit: €1,542 million, but a 4.3% decline. However, operating profit (beia) showed a 12.5% organic growth to €2,079 million.

Net profit: €-48 million due to €1,050 million non-cash impairments.

Outlook: Updated to expect 4%-8% organic growth in operating profit (beia) for the full year 2024.

Dividends: Interim dividend of €0.69 per share to be paid on 8 August 2024.

Positive

• Revenue increased by 2.2% to €17,823 million.
• Net revenue (beia) grew organically by 6.0%.
• Operating profit (beia) showed 12.5% organic growth.
• Heineken® volume grew by 9.2%.
• Interim dividend of €0.69 per share to be paid on 8 August 2024.

Negative

• Net profit amounted to €-48 million due to €1,050 million non-cash impairments.
• Operating profit decreased by 4.3%.
• Currency translation reduced net revenue (beia) by €625 million.

Amsterdam, 29 July 2024 – Heineken Holding N.V. (EURONEXT: HEIO; OTCQX: HKHHY) 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%
• Outlook for the full year updated: operating profit (beia) expected to grow organically in the range of 4% to 8%.

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 of Heineken Holding N.V.*	-48				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 page 20.					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 27 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 N.V., 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.

Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management or supervision of and provision of services to that company. The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for the first half year of 2024 amounts to €-48 million.

During the first half of 2024, HEINEKEN continued to execute the EverGreen strategy and restored balanced growth despite experiencing economic volatility in certain markets. Growth remains HEINEKEN's priority and HEINEKEN aspires to shape the future of beer and beyond to win the hearts of consumers. HEINEKEN also aims to become the best digitally connected brewer, raise the bar on sustainability and responsibility and evolve HEINEKEN's capabilities and culture to embrace future opportunities. To fund HEINEKEN's growth, and deliver on the EverGreen ambitions, HEINEKEN continues to drive productivity and capital efficiency in the pursuit of sustainable, long-term value creation.

HEINEKEN aims for balanced volume and value growth through building and scaling premium and strategic mainstream brands, supported by innovation in fast-growing consumer segments, excellent commercial execution and further developing HEINEKEN's geographic and portfolio footprint. In the first half of 2024, HEINEKEN saw encouraging signs of consumer demand stabilising and was able to restore balanced growth.

Revenue for the first half of 2024 was €17.8 billion, up 2.2%. Net revenue (beia) was €14.8 billion, up 6.0% organically, mainly driven by the growth of HEINEKEN's largest operating companies in Nigeria, Mexico, Brazil, Vietnam and India. Total consolidated volume increased 1.7% and net revenue (beia) per hectolitre was up 4.3% with a positive contribution from all regions, most notably in Africa & Middle East. The underlying price-mix on a constant geographic basis was up 4.9%. Currency translation reduced net revenue (beia) by €625 million or 4.3%, mainly driven by the 48% devaluation of the Nigerian naira versus the euro. Consolidation changes had a positive impact to net revenue (beia) of €51 million, the net result of the Distell and Namibia Breweries acquisitions, the sale of Vrumona in the Netherlands and HEINEKEN's exit from Russia.

Beer volume for the first half of 2024 increased organically 2.1% versus last year, with all regions contributing. HEINEKEN gained or held market share in more than half of its markets. Growth in the second quarter was lower as Easter fell in the first quarter in 2024 (versus the second quarter in 2023), competition intensified in the economy segment in Brazil and poor June weather in Europe.

Beer volume			2Q24		Organic growth				HY24		Organic growth
(in mhl)	2Q23						HY23
Heineken N.V.	65.3		62.8		-0.1%		120.1		118.2		2.1%

Premium beer volume was up 5.1%, ahead of the total beer portfolio in aggregate and in more than half of HEINEKEN's markets. The growth was again led by Heineken^®, with further contributions from Kingfisher Ultra, Dos Equis, Desperados and Birra Moretti, amongst others.

Heineken^® grew volume in the first half by 9.2% with the second quarter up 6.0%. The growth was broad-based, with more than 27 markets growing double-digit, most notably Brazil, China, Vietnam and the DRC. Heineken^® Silver grew volume by more than 40%, led by Vietnam and China.

The Heineken^® brand continues to be admired for its creativity, in both ideas and execution. The brand was recognised as the #1 most creative brand in the alcoholic drinks category and the #2 most creative brand across all categories at the prestigious Cannes Lions Festival of Creativity, taking home a record 22 awards. New campaigns included "The First Ahhh!", celebrating its dedication to the craft of brewing and the joy at the first sip from a fresh Heineken^®, and "The Boring Phone", noting that the more refreshing your social life, the more rewarding it becomes.

Heineken® volume			2Q24		Organic growth		HY23		HY24		Organic growth
(in mhl)	2Q23
Total	14.2		15.0		6.0%		26.3		28.7		9.2%

	Outlook Statements

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

HEINEKEN continues to expect variable costs to increase organically by a low-single-digit on a per hectolitre basis. While HEINEKEN expects 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. HEINEKEN also expects higher than historical average wage inflation.

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

HEINEKEN is reinvesting a larger proportion of these savings into marketing and sales. In the second half, HEINEKEN will materially step-up investment in its brands focused on HEINEKEN's 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. HEINEKEN is confident it is able to adapt, yet this continues to bring some short-term uncertainty.

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

For the full year of 2024, HEINEKEN further expects:

• An effective interest rate (beia) of around 3.5% (2023: 3.4%).
• As indicated at HEINEKEN's 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. HEINEKEN made progress in reducing hard currency exposures and is on track with the rights issue in Nigerian Breweries Ltd. If current conditions prevail, HEINEKEN expects more stable other net financing expenses in the second half of the year.
• HEINEKEN has updated its 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, HEINEKEN revises the expected organic net profit (beia) growth to be more closely in line with the expected operating profit (beia) growth.

Finally, HEINEKEN continues 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%).

	Translational Calculated Currency Impact

Based on the impact to date, and applying spot rates of 25 July 2024 to the 2023 financial results as a baseline for the remainder of the year, the calculated negative currency translational impact for the full year would be approximately €1.350 million in net revenue (beia), €170 million at consolidated operating profit (beia), and €30 million at net profit (beia).

	Interim Dividend 2024

According to the Articles of Association of Heineken Holding N.V. both Heineken Holding N.V. and Heineken N.V. pay an identical dividend per share. HEINEKEN's dividends are paid in the form of an interim dividend and a final dividend. The interim dividend is fixed at 40% of the total dividend of the previous year. As a result, an interim dividend of €0.69 per share (2023: €0.69) will be paid on 8 August 2024. The shares will trade ex-dividend on 31 July 2024.

	Enquiries

	Media Heineken Holding N.V.
	Kees Jongsma
	Tel. +31-6-54798253
	E-mail:cjongsma@spj.nl
	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

	Investor Calendar Heineken N.V.

(events also accessible for Heineken Holding N.V. shareholders)

	Trading Update for Q3 2024		23 October 2024
	Full Year 2024 Results		12 February 2025

	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. This call will also be accessible for Heineken Holding N.V. shareholders. The call will be audio cast live via the 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 Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management or supervision of and provision of services to that company.

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, HEINEKEN brews the joy of true togetherness to inspire a better world. HEINEKEN's dream is to shape the future of beer and beyond to win the hearts of consumers. HEINEKEN is 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. HEINEKEN operates breweries, malteries, cider plants and other production facilities in more than 70 countries. Most recent information is available on www.heinekenholding.com and www.theHEINEKENcompany.com and follow HEINEKEN 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.

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FAQ

What were Heineken Holding N.V.'s half-year 2024 revenue and growth?

Heineken Holding N.V. reported revenue of €17,823 million, a 2.2% growth, with net revenue (beia) growing by 6.0% organically to €14,824 million.

How did Heineken® beer volumes perform in H1 2024?

Heineken® beer volumes grew by 9.2% in the first half of 2024.

What is Heineken Holding N.V.'s (HKHHY) updated 2024 outlook?

Heineken Holding N.V. updated its outlook to expect 4%-8% organic growth in operating profit (beia) for the full year 2024.

What was Heineken Holding N.V.'s half-year 2024 net profit?

Heineken Holding N.V. reported a net profit of €-48 million, affected by €1,050 million non-cash impairments.

When is Heineken Holding N.V.'s interim dividend for 2024 paid?

The interim dividend of €0.69 per share will be paid on 8 August 2024.