Analysis - Heineken's emerging markets exposure boosts prospects
Heineken prospects remain solid despite short-term troubles, according to Bernstein
Heineken’s exposure in Africa, South-East Asia and Mexico means the group’s medium- to long-term prospects are still strong despite a tough start to 2013, according to an analyst.
In a note to clients earlier today (9 July) Bernstein analyst Trevor Stirling said he expects the Dutch group’s H1 numbers to be weak. It follows a drop in group volumes in first-quarter results.
But Stirling said Heineken’s Q1 performance is likely to be the “nadir” of its near-term fortunes.
“We remain positive about Heineken's medium-/ long-term prospects ... with more exposure to Africa, excluding South Africa, than SABMiller, high exposure to emerging South-East Asia, and a good growth platform in Latin America, notably in Mexico,” the analyst said.
He also flagged that Heineken is set to benefit from lower input costs this year. This is due to “an expected very strong harvest in West Europe and Russia, low global wheat prices and aluminium prices that are well down on this time last year,” Stirling said.
“So long as Heineken and the other brewers do not re-invest this potential margin upside in price promotion, there could be further upside,” he added.
The brewer last year completed a SGD5.4bn (US$4.3bn) deal to take full control of Tiger brewer Asia Pacific Breweries.
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read news stories on just-drinks in 2013....
Heineken, the world’s third largest brewer and leading cider producer, continued its aggressive acquisitive expansion in 2012 with the purchase of Asia Pacific Breweries. This profile considers the ex...
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are just-drinks' ten favourite quotes in 2013....
Heineken do Brasil Comercial’s strategic direction became more aggressive in 2012. The company invested in new product launches and marketing and advertising campaigns to attract the attention of cons...
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read interviews on just-drinks in 2013....
Heineken is making efforts to improve its business in the key US market and support sluggish consumption through product innovation, including Indio in June 2012 and Amstel Wheat and Tecate Michelada ...
This is the first in a new series of short reports from just-drinks. These profiles will bring together all of just-drinks' coverage of a major development involving some of the leading players in the...
- Comment - Diageo Spins the Guinness Wheel... Again
- Diageo's Labels Give Industry Something to Digest
- Who should Stock Spirits Acquire?
- Comment - 'Craft' and the Danger of 'Romance Copy'
- Is A-B InBev/SABMiller 'Mega-Merger' Off?
- Diageo lines up UK innovations push
- Craft is an 'abused' term - Pernod Ricard exec
- Pernod Ricard queries nutritional label use
- Diageo's Guinness Golden Ale
- Edrington names European Travel Retail head