Heineken Slight 3Q miss and some cautiousness on Europe is severely punished
3Q total consolidated volumes increased by 7.6% organically vs our and consensus forecasts of respectively +9.2% and +10.7%. FY22 guidance calling for a stable to modest sequential improvement in the operating profit margin (beia) was maintained despite some cautious comments on consumer demand in Europe & Nigeria. We lowered our operating profit (beia) forecasts for FY22 and FY23 by respectively -0.3% and -1.7%, with our new FY22 forecasts implying a flat operating profit margin (beia) vs FY21 (ie the bottom of the guidance range). We see the initial very negative share price reaction to the 3Q results release as overdue and we still appreciate Heineken for its steady growth trajectory in the past decade and continue to believe beer is a resilient category with further underlying growth potential. We maintain our Accumulate and € 110 TPHeineken 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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