- Mixed 1H25 results, with premiumisation driving profitability as volume growth remain muted
- OP guidance broadly maintained; ABI and Heineken tracking near the upper end of their guidance
- ABI & Heineken shares sold off post earnings, driven by low share buyback & cautious outlook
1H25 YTD results came in mixed but largely tracked within initial FY25 guidance range. Organic beer volumes were soft in 1H25 amongst global brewers under our coverage (-3.1% to -1.2% y/y). At the upper end, Heineken reported -1.2%, supported by 3.1% growth in Asia Pacific, which partially offset a 4.7% decline in Europe. At the lower end, Asahi reported -3.1%, with volume decline of c.3% in Japan & East Asia, and Europe.
Premiumisation remains a bright spot, with premium brands outgrowing the overall beer portfolio. Notably, Heineken Silver grew as much as 34% and Asahi Super Dry rose 11% y/y. On the operating profit (OP) front, we saw divergence in performance. Asahi’s core OP fell 3.2%, while Heineken delivered 7.4% organic OP growth. The gap reflects the difference in geography mix and market positioning. Heineken’s strength in Vietnam and India supported strong profitability growth, whereas Asahi’s higher exposure to softer markets in Japan, East Asia and Europe weighed on profitability.
Maintained or narrowed FY25 OP guidance range to the high end. Kirin, Anheuser-Busch InBev (ABI), and Heineken maintained their guidance ranges for 2025. Among them, Kirin is the only company tracking ahead of plan, posting growth of 1.3% in 1H25 (vs +0.5% guidance), albeit off a low base. Nonetheless, it flagged multiple risks to 2H25 performance including Health Science sales running behind plan and softer US beer sale amid weak consumer demand, amongst others.
Heineken and ABI both delivered c.7% organic operating profit growth in 1H25 and reiterated 4–8% organic growth guidance for FY25. Heineken adopted a cautious 2H25 outlook, citing potential tariff headwinds, unfavourable FX, and raw-material hedge roll-offs. By contrast, ABI was more upbeat, expecting a solid 2H25 as Brazil digests price increases and China’s off-trade channel expands. Despite OP decreasing 3.2% in 1H25, Asahi raised guidance from 3.2% to 4.1%, signalling confidence in a stronger 2H25, supported by summer seasonality in Europe, Japan and East Asia and efficiency gains post-reorganisation.
Favour beaten-down names with sustained strong profit growth outlook. ABI and Heineken share prices have sold down, despite them tracking at the upper end of their FY25 guidance and reaffirming their outlooks. For Heineken, weakness stems from a deliberately cautious 2H25 stance that likely incorporates the worst-case tariff impacts. For ABI, the decline appears tied to the absence (so far) of a renewed share buyback announcement. We view this as a timing issue rather than reduced commitment to shareholder returns given continued strong free cash flow generation and improving balance sheet.
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Figure 1: Operating profit guidance range for selected brewers
Source: Companies, DBS
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