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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Don’t be angry at Heineken’s results as the future looks a lot brighter

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Heineken (HEIA:ASM) €89.44
Loss to date: 6.5%
We highlighted Dutch brewing group Heineken (HEIA:ASM) on 20 July for its steady long-term earnings growth which has averaged 8.7% a year since 1992 and the fact the shares traded at their cheapest in a decade based on a cyclically adjusted price to earnings or CAPE basis.
WHAT HAS HAPPENED SINCE WE SAID TO BUY?
Going into the half-year results (31 July) analysts expected the group to report a mid-single digit decline in volume sales and operating profit due to weakness in one or two emerging markets and tough comparisons in Europe.
The actual results came in short of expectations while the company also cut full year operating profit guidance from mid to high-single digit growth to flat to mid-single digit growth, sending shares in the world’s second largest brewer down nearly 8% on the day.
Organic revenues grew 5.5% in the six-month period thanks to price increases, which the firm said it had ‘front-loaded’ this year, although this resulted in a 5.6% drop in organic beer volumes and sent like-for-like operating profit down by a worse-than-expected 8.8% to €1.94 billion.
Bank of America acknowledges the disappointing first-half outturn, but notes management is guiding for a ‘significant’ improvement in the second half driven by better volumes, easing input cost pressures and more cost savings.
The bank sees consensus 2023 earnings per share falling by mid-single digits yet remains positive on the shares, arguing the worst is now behind with a better second half and strong
2024 ahead.
Meanwhile, the bank estimates the shares trade on an approximately 15% discount to consumer staple peers compared with a five-year average of 1%, suggesting overly depressed expectations.
WHAT SHOULD INVESTORS DO NOW?
Shares remains positive on the investment case for Heineken despite the short-term setback in the first-half results which largely reflects management actions to bring forward price hikes.
Price increases are expected to moderate for the rest of the year which should have a positive effect on volumes. The shares remain too cheap. Keep buying.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.
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