FY19 guidance in the lower range
Unimpressive Q3 and FY19 operating profit guidance at the low end of the previously given range (4% expected vs. mid single-digit previously). However, in our view, not so bad, as we expected a worse scenario. New growth target already included in the consensus.
23 Oct 19
LIBERUM: Heineken - Soft 1H'19 due to cost inflation, investments and phasing
Heineken reported 3.1% consolidated beer volume growth in 1H’19, missing consensus expectations of 3.6%. Top-line growth of 5.6% beat expectations of 5.4% with double-digit growth in Asia Pac and AME&EE.
29 Jul 19
LIBERUM: Heineken - Solid start to 2019 with 4.3% organic volume growth
Heineken reported 4.3% consolidated beer volume growth in 1Q’19, beating consensus expectations of 3.3%. The beat was driven by (i) Africa Middle East & Eastern Europe, where growth in Nigeria improved while Russia and South Africa continued the double digit growth trends, and (ii) Asia Pacific where all markets posted strong growth despite the tough comp.
24 Apr 19
No more dark clouds over Heineken
Our concerns following the H1 profit warning of Heineken have been swept by its highly reassuring FY18 results. The Heineken brands continue their expansion and the premium/craft brands are still growth drivers. We are confident of the company’s ability to reach its FY19 guidance.
13 Feb 19
Q3: momentum is maintained
Q3 trading update: Beer volumes grew organically by +4.6% (consensus +4.3%). Volumes by region: Africa, ME & EE +3.1%, the Americas +8.1%, Asia Pacific +4.8%, Europe +2.2%. Heineken brand’s volumes grew by an impressive +9.2% in Q3 driven by Brazil, South Africa, Russia, Poland, the UK, Canada and Mexico. FY guidance is maintained.
24 Oct 18
LIBERUM: Heineken - 3Q'18 volumes grew 4.6%, beat expectations by 30 bps
Heineken’s 3Q’18 volumes came at 4.6%, helped stronger than expected volume growth of 8.1% in the Americas division. Reported net income for the 9 month period grew 8% to €1,606m. Supportive weather in Europe and an ever-strengthening footprint in attractive beer markets such as Brazil, Mexico, Vietnam and South Africa helped drive the beat. Heineken is a highly attractive equity at these levels, reiterate BUY.
24 Oct 18
LIBERUM: Consumer Staples Weekly - Brewers raided; Altria-Aphria; BAT’s CMO
On 11th October, Reuters reported that the Competition Commission of India (CCI) conducted raids on the Indian offices of brewers United Breweries, ABI and Carlsberg as part of a price-fixing investigation. CCI was tipped off by one of the three companies after it filed a leniency application with the regulator. The CCI can impose fines of up to 3x annual profit or 10% of annual sales, whichever is higher. Liberum view: Heineken's United Breweries, ABI and Carlsberg have 51%, 20% and 13% share, respectively, of the Indian beer market. The Indian alcohol market is highly regulated but is an attractive growth market for global brewers. An increase in regulations, if these allegations are proven, could hurt the brewers’ long-term prospects in the country.
HEIA ABF CARLB BATS
15 Oct 18
LIBERUM: Heineken - 1H’18 soft due to -3.7% earnings miss and guidance
Heineken’s 1H’18 diluted EPS beia of €1.89/share missed expectations of €1.96 due to the consolidation of Kirin Brasil, adverse currency effects and higher input costs. The company delivered stronger than expected volumes with organic growth of 4.6% in 2Q’18 vs consensus of 2.2%. 1H’18 organic sales beat by growing 5.6% compared to consensus seeking 4.6%. Stronger growth from the lower-margin Brazil and adverse translational impact concentrated in higher profitability operating companies led the group to reduce outlook from 25bps of margin expansion to 20bps of margin decline.
30 Jul 18
LIBERUM: Chemicals and New Energy snippets - Carbon dioxide shortages - Why they are happening
Last week the Financial Times recycled a story aired originally in Gasworld highlighting that industrial supply of carbon dioxide in Europe was threatened becuase of larger than usual curtailments of Europe ammonia plant production this year for maintenence.The articles suggested the possibility that the disruption could threaten beer sales during the important world cup and summer period. Carbon dioxide is used instead of nitrogen for enhanced oil recovery and for inerting applications in electronics but by far and away its main use is in the food and beverage industry - making carbonated drinks fizzy (e.g beer, sodas and water), dry ice for keeping food fresh during transporation and in the abbatoir business for stunning/killing pigs and poultry.
HEIA AI JMAT
27 Jun 18
LIBERUM: Consumer Staples Weekly - Beiersdorf CEO; CO2 shortage; Heineken
On 21st June, Beiersdorf announced that CEO Stefan Heidenreich will resign from his position when his current contract ends on 31st Dec, 2019 or earlier if the Supervisory Board appoints a successor. The Supervisory Board also appointed Stefan De Loecker as Deputy CEO from July 1, 2018. Mr. Loecker joined Beiersdorf in 2012 and became a member of the Executive Board in 2014 with responsibility for the "Near East and Americas" regions. Liberum view: The CEO’s pending departure follows the exit of CFO Jesper Andersen and leaves the market with little clarity about the future strategy of the business under new management. Mr. Heidenreich tenure as CEO is a clear success as the shares nearly doubled driven by acceleration in both organic sales growth and innovation rates coupled with solid margin expansion. In our view, Mr Heidenreich's exit is likely the result of an internal disagreement surrounding Beiersdorf's future strategy and the exit of the well-regarded Mr. Andersen.
25 Jun 18
LIBERUM: Consumer Staples Weekly - Henkel; Heineken; AB Foods; Amazon
Henkel acquires Canadian retailer brand manufacturer JemPak | Heineken acquires minority stake in Belize Brewing Company | AB Mauri acquires bakery ingredients businesses from Hovis | Amazon enters premium pet food market with private label brand
Heineken Associated British Foods
14 May 18
LIBERUM: Heineken - Italian beer renaissance
Heineken is a key beneficiary of an Italian beer renaissance given its market leadership and rising per capita beer consumption. We see three main drivers of this growth 1) an expansion of beer consumption moments outside of the dominant pizza occasion 2) an increase of tourism to the country and 3) an encouraging trend where younger people are drinking more beer. In this note we recap our learnings from Heineken’s Capital Markets Day.
14 May 18
Q1 update: Consolidated beer volume was up +4.3% (cons. +4.8%). Heineken brand volume was up a strong +8%. Organic beer volume performance by division: Africa, the Middle East and Eastern Europe +6.1% (cons. +7.8%), Americas +6.8% (cons. +4.1%), Asia Pacific +11.3%, Europe -1.7% (cons. +1%). By most important markets, Nigeria saw beer volume decline by a high single-digit. This performance was more than offset by a strong Russia, South Africa, Ethiopia and Ivory Coast all of which posted double-digit growth. Mexico was up by a high single-digit. Brazil was up double-digit. Vietnam performed well with beer volume up double-digit. Europe posted a weak quarter due the colder than normal weather: UK volumes were down by a mid single-digit, the same for Poland and the Netherlands (on the back of reduced promotional activity). The group highlighted the weak US beer market.
18 Apr 18
LIBERUM: Heineken - 1Q'18 volumes ahead of expectations
Heineken’s 1Q’18 consolidated organic beer volumes growth of 4.3% beat consensus expectations of 4.1%. Consolidated beer volume of 50.5m HL beat expectations of 49.1m HL. The beat was led by stronger than expected growth in Americas and Asia Pac, offset by a softer than expected Europe. Reported net income came in at €260m compared to €293m in the prior year but adjusted net profit was higher than last year.
18 Apr 18
LIBERUM: Consumer Staples Weekly - CR Beer-Heineken; Tate; Mucinex; Nestlé
CR Beer in talks to buy Heineken’s China business | Tate completes expansion of Singapore application centre | Perrigo to launch generic version of another Mucinex variant | Nestlé to remove 40% sugar from San Pellegrino using Stevia
HEIA TATE NESN RB/
12 Mar 18
LIBERUM: Consumer Staples Weekly - Tate & Lyle; Heineken; Essity; L’Oréal
Tate appoints HORN as U.S. distributor for the Nutrition Industry | Heineken opens brewery in Mexico; optimistic on NAFTA | Essity to restructure production facility in Santiago, Chile | L’Oréal appoints China CEO to Executive Committee
HEIA ABF ABI CPR BEI TATE OR
05 Mar 18
LIBERUM: Heineken - Long-term investments hold back near-term expectations
Heineken’s shares are off 3% in mid-day trading following a softer than expected outlook for FY18 margins. In our view, the company is executing in-line with its long-term strategy, as can be seen by Kirin Brazil. In light of the softer guidance, we found the long-term margin guidance confusion as evidence to look beyond FY18. BUY with TP €106.
12 Feb 18
LIBERUM: Heineken - Finishing the year with a beat
Heineken’s FY’17 top-line came in broadly in-line, growing 5% organically vs. consensus expectations of 5.3%. Adjusted diluted EPS of €3.94 for FY17 beat expectations by 1.3%. The outlook for FY'18 appears conservative, seeking 25bps of margin improvement and reflecting Heineken's long-term focus. Heineken is our top pick in drinks: BUY with TP €106.
12 Feb 18
LIBERUM: Consumer Staples - 4Q preview: Improving outlook for 2018 likely balanced by full sector valuation
On balance, we expect a solid, if unspectacular, set of results. Growth remains constrained - we forecast 3.7% LfL sales growth for Consumer Staples with headwinds from soft consumer demand, geopolitical turmoil and disinflation. Input prices remain benign but intense price competition, retailer pressures and online deflation impede margin growth, putting the onus on cost savings and M&A to drive EPS. Sector valuation remains elevated at 20.8x cal’18E, a 36% premium to STOXX600. We expect valuations to remain capped, particularly if bond yields continue to rise.
HEIA ULVR CARLB OR TATE RI NESN BN RB/ KYGA CPR ABF BEI ABI
31 Jan 18
LIBERUM: Consumer Staples: Our Best Ideas - Valuation capped in 2018: buy value, FCF yield and self-help – Reckitt, Danone, Heineken
In 2018, we expect interest rates and inflation will continue to rise on the back of reflationary policies and stronger global GDP growth. Emerging Market growth is picking up bolstering resilient Developed Markets and leading to a more synchronous, broader global economic picture. The risk to global trade remains elevated due to rising protectionism and the potential for trade wars. We expect continued market volatility as nationalistic politics heighten the risk of unintended geopolitical events.
HEIA NESN BN ABF KYGA TATE ULVR ULVR OR RB/ BEI ONTEX MCB ABI CARLB DGE RI CPR RCO
19 Jan 18
Q3: EM up, Europe down
Q3 trading update: Beer volumes grew organically by +2.5% (consensus +2.8%). Volumes by region: Africa, ME & EE +8.8% (cons. +3.5%), the Americas +2.9% (cons. +4.7%), Asia Pacific +12.2% (cons. +9%), Europe -2.8% (cons.-0.5%). Heineken brand’s volumes grew +3.4% in Q3 driven by Brazil, South Africa, Russia and Mexico. The FY guidance is maintained.
25 Oct 17
Acceleration in Q2
H1 update: Organic revenue is up +5.7% (cons. 4.2%) with beer volumes up +2.6% (cons. 1.8%, Q2: +4.2%) and revenue per hl up +3.4%. On a reported basis, sales were up +3.8% in H1, whereas the operating margin beia expanded to 17.2% (+34bp) in spite of margin contraction in Africa (-190bp due to the Nigerian naira but up on an organic basis). OG by region: Africa, ME & EE +11.5% (driven by stronger pricing), the Americas +6.3%, Asia Pacific +4.5%, Europe +3.6%. The Heineken brand’s volumes were up +3.9%. The group expects that the Brazilian Kirin assets will be margin dilutive by c.40bp in 2017 (the margin for the whole group is expected therefore to be flat). The transaction is expected to cover its cost of capital in Brazil in approximately 5 years. The Punch Taverns deal is expected to close in August 2017.
31 Jul 17
Q1 backs FY outlook
Q1 update: consolidated beer volume was up +0.6% (cons. -0.7%). Heineken brand volume was up +2.5%. OG performance by division: Africa, the Middle East and Eastern Europe -0.4% (cons. -3%), Americas -0.7% (cons. 0%), Asia Pacific +5.4% (cons. +2%), Europe +0.5% (cons. -1%). By most important markets, the group highlighted the difficult conditions in Nigeria (volume was down mid single-digit) and Brazil (volume down double-digit due to macro-economic weakness). UK volume was down, impacted by the partial delisting from Tesco. On the other hand, Mexico performed strongly (volume was up mid single-digit). Vietnam was up low single-digit (impacted by the timing of the New Year), whereas Cambodia was up double-digit. The FY guidance remains unchanged. The acquisition of Kirin’s assets is expected to close in H1.
19 Apr 17
Strong FY above expectations, sticks to mid-term guidance
Heineken FY and Q4 update: In Q4, beer volumes increased +2.2% (in line with Q3). Q4 organic volumes by region: Africa, ME& EE +0.6%, Americas +2.8%, Asia Pacific +17.8% (very strong performance), Europe -2.5%. For the FY, beer volume was up +3% (in line with consensus) whereas revenue grew organically +4.8% (cons. +3.7%). Revenue growth per hl was up +2.2%. The organic operating profit was up +9.9% (Cons. +6.6%). On a reported basis, net revenue was up +1.4%, whereas operating margin (beia) was up 50bp (better than expected) to 17%. For the FY17, the group expects volatile market conditions and a negative impact from FX. The operating margin should progress 40bp excluding the recent acquisitions in Brazil and the UK and unforeseen large macro-economic changes. The proposed dividend is €1.34 (vs. €1.30 last year).
15 Feb 17
Q3 update: solid organic volume growth but the FX headwinds persist
Heineken’s Q3 trading update: beer volumes grew organically by +2% (consensus +1.4%, vs. 1.8% in Q2). Volumes by region: Africa, ME & EE –3.6% (cons. -3.3%), the Americas +3% (cons. +3.6%), Asia Pacific +15.1% (cons. 12%), Europe +0.6% (cons. 0%). Heineken brand volumes grew +3.5% in Q3 (improvement vs. Q2) driven by China, South Africa and Brazil. For the FY, the company expects a currency headwind of c. €215m on the consolidated operating profit (beia) and c. €115m on the net profit. The FY guidance is maintained: further organic revenue growth and a margin expansion of 40bp.
26 Oct 16
Q2 gets dragged by Africa, ME & EE
Heineken released its H1 update. Revenues were up +4.7% on an organic basis (cons. +5.3%) with beer volumes up +4.1% (cons. 4.3%, 1.8% in Q2). On a reported basis, sales were up +2% in H1 whereas the operating margin beia expanded to 16.9% (vs. 16.5% in FY15). Volumes by region: Africa, ME & EE -1.2%, the Americas +4.7%, Asia Pacific +19.4%, Europe +2.3%. The Heineken brand’s volumes were up +2.6% (impacted also by Africa). The group maintains its FY guidance: further organic revenue growth and a margin expansion of 40bp (in line with mid-term guidance).
01 Aug 16
Strong start to the year
Heineken released its Q1 trading update. The OG volumes grew +7% (cons 2.4%) driven by a strong Vietnamese and Chinese New Year and the earlier timing of Easter. OG volumes by division: Africa, Middle East & Eastern Europe +4.6% (cons. -0.3%), the Americas +8.2% (cons. +5%), Asia Pacific +23% (cons. +4.5%) and Europe +2.3% (cons. +0.9%). The Heineken brand grew +4.8% in volumes.
20 Apr 16
Heineken remains confident about FY16 in spite of increased market volatility
Heineken released its FY results. Organic beer volumes were up 2.3% (in line with consensus), whereas organic net revenue progressed by 3.5% (cons +3.6%). Revenue/hl grew 1.3%. On reported figures sales grew +6.5% (FX: +2.5%). The operating margin (beia) was up by 23bp due to the dilutive impact of the disposal of EMPAQUE, but on an underlying basis the operating margin rose by 64bp. The net profit (beia) progressed by 16% and by 25% on a reported basis. The dividend is up to €1.30 (€1.10 in FY14). In Q4, beer volumes were up +1.4% for the whole group. Q4 organic volumes by region: Africa, ME& EE -3.5%, Americas +7.2%, Asia Pacific +2.8%, Europe -0.7%. Q4 organic net revenue by region: Africa, ME& EE -4.7%, Americas +10.3%, Asia Pacific -0.7%, Europe +0.5%. For FY16, Heineken expects to deliver further organic revenue and revenue despite an increasingly challenging environment, with a margin expansion at 40bp (in line with mid-term guidance).
10 Feb 16
Very strong Q3 thanks to acceleration in the Amercias and Europe
Heineken released its Q3 update. Total consolidated organic revenue grew +7.5% (consensus +3.9%). Beer volumes grew organically by +5.4% (consensus +2.6%). Organic beer volume growth by region: Africa Middle East & EE -0.1% (consensus -1.3%), Americas +6.7 (consensus +3%), Asia Pacific +6% (consensus +4.9%) and Europe 6.8% (consensus 3.9%). Revenue per hectolitre grew +1.8%. On reported figures, revenue increased by 8% to €5.51bn. Heineken decided to discontinue its share buy-back programme (€365m completed out of €750m) in light of the recent acquisitions (50% stake in Lagunitas Brewery, 53.43% stake in Pivovarna Lasko, Brassivoire JV in Ivory Coast, 57.9% stake in Desnoes & Geddes Ltd (Jamaica) and 49.99% of GAPL Pte Ltd, which distributes stout beer in Singapore and Malaysia). The company’s FY15 operating margin expansion guidance is maintained.
28 Oct 15
Good H1 results in challenging market environment
Heineken released its H1 update. Revenue stood at €9.8bn (consensus at €9.76bn). Organic revenue growth at 1.9% (cons. at 1%). Group operating profit (beia) was €1.54bn (cons. at €1.53bn). Beer volume was up by 1% (cons. at 0.7%). Consolidated revenue organic growth by region: Africa Middle East 1.4% (cons. 0.1%), Americas 5.8% (cons. 6%), Asia Pacific 7.4% (cons. 7.7%), CEE 1% (cons. -0.9%), West Europe -0.8% (cons. -2.4%). Heineken brands' volumes rose by 4.7% in H1 (3.2% in Q2). The consolidated operating margin was flat (the group's operating margin increased by 20bp). The interim dividend stood at €0.44. The share buy-back programme reached €229m (€750m considered) as of 24 July 2015. Heineken confirmed its full-year outlook: positive organic revenue growth in 2015 with volume growth at a more moderate level than in 2014, and weighted towards H2 (tougher comparatives in H1). Continued volume growth in developing markets will offset more subdued volume growth elsewhere.
03 Aug 15