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1. Company Snapshot

1.a. Company Description

Heineken N.V. engages in the brewing and selling of beer and cider.It also provides soft drinks and water.It offers its beers under the Heineken, Amstel, Desperados, Sol, Tiger, Birra Moretti, Affligem, Lagunitas, and Mort Subite brands, as well as under various other regional and local brands; and cider under the Strongbow Apple Ciders, Orchard Thieves, Follow The Fox, Cidrerie Stassen, Bulmers, Old Mout, and Blind Pig brands.


The company offers its products to retailers, bars, pubs, hotels, and restaurants in Europe, Americas, Africa, the Middle East, Eastern Europe, and the Asia Pacific markets.The company was founded in 1864 and is based in Amsterdam, the Netherlands.Heineken N.V. is a subsidiary of Heineken Holding N.V.

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1.b. Last Insights on HEIA

Heineken N.V.'s recent performance was negatively impacted by a decline in beer sales, with volumes down in the United States and Europe. The company's first-half beer volumes of 116.4 million hectoliters were lower than the 118.2 million hectoliters in the same period last year. Additionally, Heineken's warning that volumes would be softer than expected for the remainder of the year due to tariff uncertainties and disrupted markets in the Americas weighed on investor sentiment. Furthermore, the company's share buyback program, which has been ongoing since February 2025, has not been enough to offset the negative impact of declining beer sales.

1.c. Company Highlights

2. Heineken Delivers Solid First Half with Strong Profit Growth

Heineken reported a net revenue growth of 2.1% organically, with net revenue per liter growing 3.3%, while total beer volume was down 1.2%. Operating profit grew 7.4% to €2 billion, with an operating margin of 14.3%, up 26 basis points. Net profit improved by 7.5% with diluted EPS landing at €2.08. The company's strong performance was driven by its global footprint, especially in APAC and AME regions.

Publication Date: Jul -31

📋 Highlights
  • Strong Profit Growth:: Operating profit grew 7.4% to €2 billion, with a 14.3% operating margin, up 26 basis points.
  • Heineken Brand Growth:: The Heineken brand saw 4.5% volume growth, with double-digit growth in 27 markets, notably in Nigeria and APAC.
  • APAC Regional Performance:: APAC delivered 5.5% net revenue growth and 3% beer volume growth, with an 11% increase in operating profit.
  • Full-Year Guidance Confirmation:: The company reaffirmed its operating profit growth guidance of 4-8% for the full year, despite various headwinds.
  • Digital Transformation Investment:: Heineken is investing in a digital backbone with a 36-month rollout to harmonize processes and prepare for AI-driven growth.

Regional Highlights

The company delivered volume growth improvement in Q2, with a quality of volume performance remaining high. Regional highlights include: Africa and Middle East with organic net revenue growth of 19.8%, operating profit doubling, and over 50% growth in euros; Americas showing resilience with net revenue decline of 0.8% and beer volume down 1.2%; APAC posting net revenue growth of 5.5%, beer volume growth of 3%, and operating profit increase of 11%; Europe with net revenue decline of 4%, beer volume declining 4.7%, and operating profit growth decline of 5.2%.

Financial Performance

The company's financial performance was solid, with operating profit growth of 7.4% to €2 billion. According to the company's management, "the strong performance was driven by a combination of factors, including volume growth, price/mix, and cost savings" (Source: Heineken's H1 2025 Earnings Call Transcript). The company's EPS came out at €2.13, relative to estimates at €2.14.

Valuation Metrics

The company's valuation metrics suggest that the stock may be fairly valued. The P/E Ratio is 39.92, which is slightly high compared to its peers. The P/B Ratio is 1.99, and the P/S Ratio is 1.3. The EV/EBITDA is 10.41, and the Dividend Yield is 2.76%. The Free Cash Flow Yield is 8.59%, and the ROIC is 4.53%. The ROE is 5.02%, and the Net Debt / EBITDA is 2.87.

Guidance and Outlook

The company confirms its guidance for the full-year operating profit growth in the 4-8% range. Heineken's sustainability strategy, Brewing a Better World, is progressing across all three pillars, with achievements including new Power Purchase Agreements and water efficiency improvements. The company's next strategic milestone, EverGreen 2030, will focus on growth, productivity, and capital efficiency.

Market and Competition

The company operates in a competitive market, with various players competing for market share. However, Heineken's diversified footprint and strong brand portfolio position it well for long-term growth. The company's beer volumes have been taking share in European markets, driven by a bounce back in on-trade sales and good performance in Mediterranean markets.

3. NewsRoom

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Is There Now an Opportunity in Heineken After Years of Share Price Underperformance?

Dec -04

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Biggest Office Party Night of the Year Set for Unprecedented Surge in 0.0 Drinking

Dec -04

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No Excuses Needed: the 2025 Festive Season Marks the First Where Saying ‘No Thanks’ to Alcohol Won’t be Met With Judgement

Dec -03

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Heineken N.V. reports the progress of transactions under its current share buyback programme

Dec -01

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European beverage stocks trades at deep discounts

Nov -28

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Heineken N.V. reports the progress of transactions under its current share buyback programme

Nov -24

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Heineken (ENXTAM:HEIA) Valuation in Focus After Recent Share Price Decline

Nov -19

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Heineken® 0.0 partners with Playtomic to bring exclusive benefits to padel players across the globe

Nov -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Beer Product

Expected Growth: 4.5%

Heineken's premiumization strategy, increasing popularity of low-and-no-alcohol beers, and expanding presence in emerging markets drive growth. The company's strong brand portfolio, including Heineken, Desperados, and Tiger, supports long-term growth.

7. Detailed Products

Heineken Beer

Heineken's flagship beer, a premium lager brewed with a unique A-yeast, giving it a distinctive flavor and aroma.

Desperados

A tequila-flavored beer, perfect for those who want a twist on traditional beer.

Sol

A Mexican beer brand, known for its crisp, refreshing taste and vibrant packaging.

Birra Moretti

An Italian beer brand, offering a range of beers with a focus on quality and tradition.

Kronenbourg

A French beer brand, known for its premium lagers and ales, brewed with a focus on quality and heritage.

Cider

Heineken's range of ciders, offering a refreshing alternative to beer.

Wine and Spirits

Heineken's portfolio of wine and spirits, including brands such as Dos Equis and Cuervo.

8. Heineken N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Heineken N.V. faces moderate threat from substitutes, as consumers have various alternatives to beer, such as wine, spirits, and non-alcoholic beverages. However, the company's strong brand portfolio and diversified product offerings mitigate this threat to some extent.

Bargaining Power Of Customers

Heineken N.V. has a large and diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand recognition and customer loyalty programs help to maintain customer relationships and reduce the threat of customer bargaining power.

Bargaining Power Of Suppliers

Heineken N.V. relies on a network of suppliers for raw materials, packaging, and logistics. While the company has some bargaining power due to its large scale, suppliers of certain ingredients, such as hops and barley, may have some negotiating power. However, Heineken's diversified supply chain and long-term contracts help to mitigate this threat.

Threat Of New Entrants

The beer industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and established distribution networks. While new entrants may emerge, Heineken N.V.'s strong brand portfolio, global distribution network, and economies of scale make it difficult for new competitors to gain significant market share.

Intensity Of Rivalry

The global beer market is highly competitive, with several large players, including Anheuser-Busch InBev, Carlsberg, and Asahi. Heineken N.V. faces intense competition in terms of pricing, product innovation, and marketing, which can lead to downward pressure on prices and profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.28%
Debt Cost 3.95%
Equity Weight 53.72%
Equity Cost 7.02%
WACC 5.60%
Leverage 86.14%

11. Quality Control: Heineken N.V. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 3.6

Growth: 6.0

Quality: 5.0

Yield: 6.2

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Carlsberg

A-Score: 5.3/10

Value: 4.3

Growth: 4.8

Quality: 4.9

Yield: 5.6

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Heineken

A-Score: 5.1/10

Value: 7.1

Growth: 4.0

Quality: 3.2

Yield: 5.0

Momentum: 2.5

Volatility: 8.7

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Heineken

A-Score: 4.4/10

Value: 4.2

Growth: 4.2

Quality: 3.6

Yield: 3.8

Momentum: 2.0

Volatility: 8.3

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A-Score: 4.4/10

Value: 6.4

Growth: 3.0

Quality: 6.1

Yield: 0.6

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

69.36$

Current Price

69.36$

Potential

-0.00%

Expected Cash-Flows