Heineken (HEIANA; A3, BBB+; S) {HEIA NA Equity} 1Q Results

Not much to see in Heineken results - organic beer volume growth of 2-10% for all regions, guidance unch.

We flagged when Asahi came to price its 2-part earlier this month that brewer space was spread tad wide between curves - we've seen Carlsberg & Asahi (the two BBB+ names) come in another ~10bps since - even Asahi 32s that priced with 2bp NIC has moved 10 in & now in-line with tad higher-rated Heineken curve.

Staple nature of brewers likely finding bid here & we have no issue with above compression. Might have more room to run - only staple curves giving spread pickup are ATDBCN (reverse yankee), CAFP (reports after close today), WOWAU 28s (aussie) & Tesco 31s.

• Headline with net revenue at €6.85b (c€7b) at organic growth of +9.4% (c+6%) helped by organic beer volume growth of +4.7%.
• Mgmt did flag it received a boost from calendar effects (earlier easter captured in 1Q) & one-offs from weak yoy comparables in Nigeria & Vietnam. Nigeria net revenue grew 80%+ on pricing impact of inflation & naira devaluation.
• Guidance for FY EBIT organic growth in low-to-high single digits (c+4.6%) left unchanged.
• No comments on capital allocation - i.e. unch from FY23 which would be a 30-40% dividend payout (of net profit) & leverage target of <2.5x (FY23 at 1.4x).