Heineken Model update post 1Q, still seeing FY25 operating profit organic +4-8%
We updated our model after Heineken did report (yesterday) a fairly weak 1Q trading update with beer volumes down 2.1% y/y, impacted ao by the timing of Easter, Tet and one trading day less. Heineken did stick to its FY25 guidance range of 4-8% organic operating profit (beia) growth, although bigger negative FX effects prompt us to lower our FY25 operating profit (beia) forecast by c. 4% in absolute terms, whilst still retaining a 5% organic growth forecast. We still appreciate Heineken for the organic earnings recovery potential in coming years (c. 6% organic operating profit beia CAGR estimate over 2024-2027), supported by sizeable cost savings initiatives (€ 400m/y) and payback from gradually increasing marketing spend. We maintain our Accumulate rating and € 100 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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