Heineken Q3 volumes beat expectations on Asia growth, Americas rebound

Heineken's third-quarter total volume exceeded market forecasts, propelled by robust growth in Asia and a resurgence in the Americas. The company upheld its full-year outlook, projecting operating profit growth of 2% to 6%. Global volume increased by 3.9% organically, surpassing the 1.8% forecast, while organic net revenue climbed by 4.6% compared to the projected 3.5%.

However, net revenue per hectolitre only rose by 0.7%, as expansion was concentrated in lower-priced Asian markets. Higher pricing and brand mix were counterbalanced by unfavorable country mix, driven primarily by strong growth in Asia Pacific. Adjusted for pricing and mix on a consistent geographic basis, revenue rose by 1.8%, slightly behind the 2.4% rise seen in the first nine months.

Total volume reached 76 million hectolitres, representing a 4.8% organic growth, in line with the 74.4 million hectolitre consensus. Licensed volume expanded by 19.5%. In the first nine months, total volume grew by 2.7%, and net revenue increased by 3.4%. Asia Pacific spearheaded the growth, with notable momentum in Vietnam, China, and India.

Africa and the Middle East demonstrated resilient expansion. The Americas rebounded, including in Mexico and Brazil, on a more favorable comparison basis. Europe grew modestly, aided by robust customer activation and favorable weather conditions. Premium volume surged by 11.5%, with a 9.9% increase in the company's five global brands, including a 9.7% rise in the Heineken brand.

Mainstream volume marginally grew by 2.4%. Net revenue amounted to €8.09 billion, slightly above the consensus of €7.98 billion. Reported net revenue grew by 10.5%, driven by a €241 million increase from currency fluctuations, primarily a stronger Mexican peso, Brazilian real, Nigerian naira, and South African rand, along with a €182 million contribution from Heineken Costa Rica's integration.

Heineken reiterated that all other guidance measures remained unchanged and declared its productivity program on track to generate €500 million in gross savings for the full year. According to exchange rates on October 27, currency translation is expected to contribute approximately €410 million to full-year net revenue and €40 million to operating profit.

Additionally, Heineken announced its intent to acquire a majority stake in ready-to-drink brand Stëlz, contingent on regulatory approval. Heineken Holding NV, which holds a stake in the brewer, has repurchased 4,579,592 shares for €302,728,471 under the second tranche of its share buyback program, valued at around €750 million.