Heineken Model update after 1H results and CR Beer impairment
After Heineken posted slightly weaker than expected 1H24 operating results and narrowed its FY24 guidance range, we lowered our FY24 operating profit (beia) growth forecast from +8% to +7%. We view the negative share reaction to the results release and the partial CR Beer impairment as exaggerated, and continue to appreciate the combination of category resilience with underlying premiumization trends whilst we expect Heineken to also benefit from further savings potential in the next few years, even if some of the savings will be given back in the form of higher sales and marketing spend. We bank on an 8% organic operating profit (beia) CAGR over the 2023-2026 period. Valuation remains attractive and we reiterate our Accumulate rating and € 110 target price.Heineken is an international brewer and engaged in the production and distribution of beer brands in 178 countries. Co. is committed to the marketing and consumption of its more than 250 international premium, regional, local and specialty beers and ciders. These include Heineken®, Amstel, Anchor, Biere Larue, Bintang, Birra Moretti, Cruzcampo, Desperados, Dos Equis, Foster's, Newcastle Brown Ale, Ochota, Primus, Sagres, Sol, Star, Strongbow, Tecate, Tiger and Zywiec. In addition, Co. is the cider maker with brands such as Strongbow® and Bulmer's®. Some of its wholesalers also distribute wine, spirits and soft drinks.
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