Heineken Set to Report Positive Performance as Volume Improves -- Earnings Preview

By Michael Susin

Heineken is scheduled to report results for the first quarter on Wednesday. Here is what to know.

ADJUSTED REVENUE FORECAST: The Dutch brewer is expected to report adjusted net revenue--the company's preferred metric, which strips out exceptional and other one-off items--of 6.94 billion euros ($7.40 billion) for the quarter, up from EUR6.38 billion for the same period a year ago, according to a company-compiled consensus based on 20 brokers' estimates.

REVENUE GROWTH FORECAST: Adjusted net revenue growth is expected at 7.2%, according to a company-compiled consensus. By region, the Africa, Middle East and Eastern Europe market is expected to outperform with 22% growth, followed by the Americas growth of 6.4% and Asia Pacific growth of 6.2%. Europe's revenue is expected to be the worst performer, with revenue growth of 2.3%.

CONSOLIDATED VOLUME FORECAST: Heineken is expected to report a total consolidated volume of 62.8 million hectoliters from 61.0 million hectoliters a year earlier.

VOLUME GROWTH FORECAST: Heineken's organic total consolidated volume for the period is forecast to grow by 2.1%. Asia Pacific volume is expected to lead the regional growth with an 4.8% increase, while Europe is anticipated to be the worst performer with 0.1% growth.

Shares over the past 12 months are down 11%, and down 0.7% since the start of the year.

WHAT TO WATCH

--Heineken currently aims for organic adjusted operating profit growth in the a low- to high-single-digit percentage range for 2024. The company also sees adjusted net profit organic growth to be lower than adjusted operating profit organic growth.

--The brewer's recently launched turnaround plan to boost growth and margins is likely to have driven a robust first-quarter performance, Jefferies analysts Edward Mundy and Andrei Andon-Ionita wrote in a note. The strong profit momentum in Europe and the Americas in the second half of last year should roll into the first half of 2024, they said. Africa is forecast to remain volatile, but the company has a good track record of protecting profitability, and volume recovery in Asia should boost operating leverage, they add.

--Nielsen European beer data suggests a steady recovery in European volumes and Heineken has had the biggest improvement in underlying trends recently, Citi analysts said in a note. Heineken volumes were up 2.8% on year for the 12 weeks ending March 24, while prices grew 2.9%, the analysts said.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

April 23, 2024 05:56 ET (09:56 GMT)

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