Heineken Holding (HEIO) H1 2024 earnings summary

Executive summary

• Delivered solid first half results with 6% organic net revenue growth, advancing the EverGreen transformation strategy focused on balanced growth, productivity, capital efficiency, and sustainability.

• Beer volume grew organically by 2.1%, with premium brands and non-alcoholic portfolio outperforming; Heineken® brand volume up 9.2%.

• Operating profit (BEIA) increased 12.5% to €2,079 million, while reported operating profit declined 4.3% to €1,542 million due to exceptional items and impairments.

• Net profit (BEIA) was €1,204 million, up 4.4%, but reported net profit was a loss of €48 million, impacted by €1,050 million in non-cash impairments, mainly from an €874 million impairment on the CR Beer investment.

• Free operating cash flow was €655 million, and net debt/EBITDA (BEIA) stood at 2.4x.

Financial highlights

• Net revenue (BEIA) grew 6% organically year-over-year to €14.8 billion, with net revenue per hectoliter BEIA up 4.3%.

• Operating profit (BEIA) margin was 14.0%; diluted EPS (BEIA) was €2.15, up 5.9% year-over-year.

• Currency translation had a negative impact of €625 million on net revenue (BEIA), mainly due to the 48% devaluation of the Nigerian naira.

• Interim dividend set at €0.69 per share.

• Effective tax rate BEIA revised to ~28%; reported effective tax rate rose to 35.0% due to additional tax provisions and exceptional items.

Outlook and guidance

• Full-year 2024 organic operating profit (BEIA) growth expected in the 4%-8% range.

• Organic net profit (BEIA) growth now expected to align closely with operating profit (BEIA) growth.

• Material increase in marketing and sales investment planned for H2, focusing on key brands and markets.

• Capital expenditure is expected to remain below 9% of net revenue (BEIA).

• Calculated negative currency impact for the full year is estimated at €1,350 million on net revenue (BEIA).