Heineken shares rose 12% Wednesday, after the Dutch beer giant announced better than expected profit growth. It also announced an EUR1.5 billion buyback program and gave a positive outlook for this year.
This is the second largest brewer in the world. It reported an organic increase of 8.3% before special items and amortization. The company had forecasted a range between 4% and 8%, and analysts estimated a 5.3% rise.
Profits increased due to higher volumes of sales in all regions. This was driven by strategic investment and a better portfolio of premium beer.
Heineken’s earnings report
Brewers’ operating profit, before special items and amortization – its key earning metric – reached EUR4.51 billion (4.67 billion dollars) in the past year. This represents an organic growth of 8.3%.
Dolf Van den Brink said, “We’re quite happy with the solid results.” He emphasized Heineken growth initiatives.
| BEIA measures | EUR Million | Growth2 |
|---|---|---|
| Earnings | 36,077 | 5.0% |
| Gross revenue | 29,964 | 5.0% |
| Operating Profit | 4,512 | 8.3% |
| Profitability | 2,739 | 7.3% |
| Diluted Earnings per Share (in EUR). | 4.89 | 4.7% |
Heineken announced an EUR1.5 billion, two-year share purchase program. This move is likely to boost investor confidence.
In addition, the company projected that operating profits would continue to grow in 2025. It estimated an increase between 4%-8%.
Why has Heineken grown so fast?
Heineken has reported an organic growth of 1.6% in the beer volume over the entire year. All regions contributed to this growth.
The company’s performance was driven by India, Nigeria and Vietnam. It also maintained or gained volume market shares in more than half its markets between 2024-2024.
The volume of premium beer grew by organic growth by 5,2%. This was largely due to the outstanding performances seen in Brazil, Vietnam India South Africa and UK.
The Heineken flagship brand led the growth, as well as international and local premium brands such Kingfisher Ultra Desperados and Birra Moretti.
Heineken’s own brand volume grew by 8.8% in the past year, with Brazil, China and Vietnam contributing significantly.
Heineken Silver also saw a volume growth of mid-30s, mainly driven by China and Vietnam.
Heineken’s 2025 outlook
HEINEKEN expects to face macroeconomic challenges by 2025. These include weak consumer sentiments in Europe, inflationary forces, currency devaluations on developing markets and geopolitical uncertainty.
The company anticipates that despite these headwinds it will continue to grow in terms of volume and revenues for the entire year.
The first quarter will be affected by a large comparison base, as well as technical factors such a fewer sales days, and timings of Tet and Easter.
HEINEKEN anticipates that its operating profit will grow by a range of 4%-8% organically in 2025. The net profit (beia), which is expected to increase in tandem with the operating profit (beia), will also grow.
The capital expenditures are expected to stay at the same level as in 2024 when they represented 8.2% net revenue.
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