FILE PHOTO: Bottles of Heineken beer are displayed in a supermarket in Sarajevo, Bosnia and Herzegovina, October 29, 2024. REUTERS/Dado Ruvic/File Photo

By Emma Rumney

SEVILLE, Spain -Dutch brewer Heineken pledged it could deliver more growth with fewer resources as it pitched an updated five-year strategy to investors on Thursday that will see it focus more heavily on specific brands and markets.

The world's No.2 brewer said it aims to deliver mid-single-digit organic net revenue growth each year until 2030 under the plan, unveiled at a capital markets day in Seville, Spain.

Faced with uncertainty in an increasingly turbulent world, it also said it was buttressing the company for the future through shifts to its operating model and by boosting efficiency and ramping up its integration of artificial intelligence.

The pivot comes after years of difficulties for Heineken ranging from the impacts of the COVID-19 pandemic and subsequent ballooning inflation to, more recently, the fallout from U.S. President Donald Trump's trade wars.

"Our performance is not where we would like it to be. We have had decent years. We've had very challenging years," CEO Dolf van den Brink said at the investor event. "This is not satisfactory ... We are really hungry for more and better."

HEINEKEN SEEN LAGGING BEHIND PEERS

Heineken said it would concentrate on growing its business in 17 markets - ranging from Mexico to Malaysia, Spain and the UK - including via targeted acquisitions, as well as on five global brands and 25 strong local labels.

Those markets along with brands led by namesake lager Heineken, Tiger, Amstel, Desperados, and Birra Moretti will benefit from more resources. Others will have to do more with less and could ultimately be exited, van den Brink said.

Investors have perceived Heineken as lagging behind its peers, particularly Anheuser-Busch InBev, the world's top brewer, which some say has built a leaner, more efficient operation.

While Heineken's shares are up around 3% year-to-date, AB InBev's have risen around 10% and Carlsberg's have climbed even higher, around 15%.

The company said it expected organic operating profit to grow ahead of revenues under its revised strategy, while earnings per share would grow in line with or ahead of that, and it would aim for over 90% free-cash conversion.

Profits will be helped by ambitions to make up to 500 million euros ($583 million) in annual gross savings - a target it already had in place for 2025.

INDUSTRY-WIDE CHALLENGES FOR BEER BUSINESS

Heineken's shares slipped early on Thursday, falling almost 2% before regaining some that ground to trade down nearly 0.8% at 0916 GMT.

On Wednesday, Heineken warned it would sell less beer again in 2025 after weak third-quarter sales in Brazil and Europe.

Across the sector, brewers are grappling with difficult economic conditions and weak consumer confidence.

Longer-term, brewers face challenges as some drinkers cut back on alcohol, health warnings rise and disruptions emerge from new competitors or shifts like the rise of weight-loss drugs.

Heineken said it would expand its low- and no-alcohol offering to adapt to changing consumer demands.

($1 = 0.8575 euros)

(Reporting by Emma Rumney; Editing by Sonali Paul, Muralikumar Anantharaman and Joe Bavier)