MASTER IN FINANCE “HEINEKEN N.V.” COMPANY REPORT “ALCOHOLIC BEVERAGES” JANNUARY 2019
[email protected] STUDENTS: “CAROLINA MASSA & LUÍSA GASPAR”
[email protected] "Brewing” into new segments Recommendation: BUY Vs Previous Recommendation - Adapting to changing consumer preferences Price Target FY17: 97.52 € Vs Previous Price Target - . Healthy lifestyles and moderate drinking are boosting the Price (as of 31-Dec-18) 77.20 € growth of low- and non-alcoholic beers and the expansion of the cider/perry market (consumption increased 19.2% in past 5 years). Reuters: HEIN.AS, Bloomberg: HEIA:NA Furthermore, increase in disposable income is making consumers 52-week range (€) 86.93-77.20 more willing to buy premium beverages (premium and super Market Cap (€m) 43 979.5782 Outstanding Shares (m) 569.684 premium beer grew 3.1% and 5.0%, annually, since 2000). Heineken is including non-alcoholic beverages in its Source: Bloomberg, Analyst estimates offerings (launch Radler 2.0%; Radler 0.0%; and Heineken 0.0) and enhancing the higher brackets of its portfolio. Currently, it is the biggest cider producer worldwide (market share of 18.7%) and the largest international premium beer in the world (premium volume increased 17.6%, in past 3 years, representing, in 2017, 14.3% of total volume). Heineken’s performance also relies on M&A deals. In Source: Bloomberg, Analyst estimates August 2018, it acquired a 40% stake on China Resources Beer Enterprise, which holds a position of 16.6% on the biggest beer (Values in € millions) 2017 2018E 2019F market, Asia Pacific (beer consumption, in 2017, amounted to Revenues 21 888 23 422 23 675 EBITDA 4 939 5 311 5 422 717.3 million hectolitres).