AI assistant
Heineken Holding N.V. Earnings Release 2020
3849_iss_2021-02-10_c23d9008-ed0e-4ed2-aa8a-7b4c8c71799e.pdf
Earnings Release
Open in viewerOpens in your device viewer
Heineken Holding N.V. reports 2020 full year results
Amsterdam, 10 February 2021 – Heineken Holding N.V. (EURONEXT: HEIO; OTCQX: HKHHY) announces:
- The net result of Heineken Holding N.V.'s participating interest in Heineken N.V. for 2020 amounts to – €102 million
- 2020 full year results highlights:
- Net revenue (beia) organic growth -11.9%; per hectolitre -2.4%
- Consolidated beer volume -8.1% organically
- Heineken® volume resilient -0.4%
- Operating profit (beia) organic growth -35.6%, margin 12.3% (-455 bps)
- Net profit (beia) €1,154 million, -49.4% organically
- Diluted EPS (beia) €2.00 (2019: €4.38)
| IFRS Measures | € million | Total growth | BEIA Measures | € million | Organic growth2 |
|---|---|---|---|---|---|
| Revenue | 23,770 | -16.7 % | Revenue (beia) | 23,770 | -11.3 % |
| Net revenue | 19,715 | -17.7 % | Net revenue (beia) | 19,724 | -11.9 % |
| Operating profit | 778 | -78.6 % | Operating profit (beia) | 2,421 | -35.6 % |
| Operating profit (beia) margin (%) |
12.3 % | ||||
| Net (loss) of Heineken Holding N.V. |
(102) | -109.4 % | Net profit (beia) | 1,154 | -49.4 % |
| Diluted EPS (in €) | (0.36) | -109.5 % | Diluted EPS (beia) (in €) | 2.00 | -54.3 % |
| Free operating cash flow | 1,513 | ||||
| Net debt / EBITDA (beia)3 | 3.4x |
FINANCIAL SUMMARY1
1 Consolidated figures are used throughout this report, unless otherwise stated; please refer to the Glossary for an explanation of non-GAAP measures and other terms used throughout this report.
2 Organic growth shown, except for Diluted EPS (beia) which is total growth.
3 Includes acquisitions and excludes disposals on a 12 month pro-forma basis
Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management or supervision of and provision of services to that company.
UPDATE ON HEINEKEN'S RESPONSE TO COVID-19: NAVIGATING THE CRISIS WHILE BUILDING THE FUTURE
From the onset of the pandemic, people's health and safety has been HEINEKEN's highest priority. To support HEINEKEN employees in doing their jobs safely, HEINEKEN established robust COVID-19 preventive measures including working from home where possible, social distancing, strict personal hygiene and disinfection protocols, and providing adequate personal protective equipment.
HEINEKEN also supported its customers, suppliers and the communities most impacted by the pandemic. HEINEKEN assisted customers with advice, re-opening tools, stock returns and helped them set up online delivery. HEINEKEN supported them financially, for example, by waiving close to €50 million in rental payments. HEINEKEN raised over €10 million to support 50,000 outlets across 21 countries through its Back the Bars initiative. HEINEKEN continued to pay all suppliers on time and reduced payment terms to various small suppliers.
HEINEKEN provided twenty-three million Euros worth of pandemic relief to support front-line medical workers in the communities where it operates, including drinking water, non-alcoholic beverages, hand sanitiser, and monetary contributions. These included a €15 million donation to the International Red Cross. In Mexico, HEINEKEN announced a dry ice donation of 55 tons to help safely transport vaccines at low-temperatures. The de Carvalho-Heineken family together with their holding company donated €10 million to eight charities supporting the COVID-19 relief efforts.
HEINEKEN's people adapted quickly and took decisive actions to guarantee business continuity. HEINEKEN entered the crisis with a strong balance sheet and took immediate steps to strengthen its liquidity. HEINEKEN took action to swiftly reduce discretionary expenses and mitigate the impact on its business performance while protecting the future. The commercial teams reallocated resources across channels and brands, increasing their focus on off-trade customers. HEINEKEN accelerated the deployment of its e-commerce platforms, capitalising on digitalisation trends as consumers and customers shopped online. The supply chain teams demonstrated great agility to adapt to a radically different and volatile environment with excellent efficiency and minimum disruptions. As a result, HEINEKEN outperformed the market in most of HEINEKEN's key markets.
In parallel, HEINEKEN colleagues in support functions adapted quickly to working from home, produced timely rolling-forecasts to inform decisions and managed eight, remotely supported, deployments of its standardised ERP platforms in Africa, Asia and the Caribbean.
Finally, HEINEKEN continued to shape its business for growth, with the entry into Peru, the acquisition of Strongbow in Australia, and the restructuring of the Philippines' business.
TOTAL DIVIDEND FOR 2020
The Heineken N.V. dividend policy is to pay a ratio of 30% to 40% of full year net profit (beia). For 2020, a total cash dividend of €0.70 per share, representing a decrease of 58.3% (2019: €1.68), and a payout ratio of 34.9%, in the middle of the range of the policy, will be proposed to the Annual General Meeting of Shareholders of Heineken N.V. on 22 April 2021 ("2021 AGM"). If approved, the full dividend will be paid on 6 May 2021, as no interim dividend was paid during 2020. The payment will be subject to a 15% Dutch withholding tax. Due to the reported net loss in 2020, the proposed dividend will be paid out of the equity reserves.
If Heineken N.V. shareholders approve the proposed dividend, Heineken Holding N.V. will, according to its articles of association, pay an identical dividend per share. A final dividend of €0.70 per share of €1.60 nominal value will be payable as of 6 May 2021.
Both the Heineken Holding N.V. shares and the Heineken N.V. shares will trade ex-dividend on 26 April 2021.
2021 OUTLOOK STATEMENTS
Overall the COVID-19 pandemic and governments' measures continue to have a material impact on HEINEKEN's markets and business. 2021 started with many restrictions across HEINEKEN's markets, including on-trade closures and restrictions to travel. In Europe in particular, HEINEKEN estimates that at the end of January 2021, less than 30% of on-trade outlets were operating. Product and channel mix is expected to continue to adversely impact results, especially in Europe.
According to the World Health Organisation, the effect of vaccines on the pandemic will depend on several factors including their effectiveness, speed of their approval, manufacturing and delivery and the number of people getting vaccinated. As such, HEINEKEN expects the pandemic to continue to impact its business in the first half of 2021 and market conditions to gradually improve in the second part of the year.
Input costs per hectolitre are expected to be volatile due to channel and product mix effects. Based on HEINEKEN's hedged positions for 2021, HEINEKEN expects a significant higher negative transactional currency impact on input costs.
The EverGreen programme, a strategic review update, will be in full deployment. For more details reference is made to the Heineken N.V. press release of 10 February 2021.
Overall HEINEKEN expects revenue, operating profit and operating profit margin to stay below the level of 2019.
HEINEKEN also anticipates:
- An average effective interest rate (beia) broadly in line with 2020 (2020: 3.0%)
- Capital expenditure related to property, plant and equipment and intangible assets of around €1.8 billion (2020: €1.6 billion).
- The effective tax rate (beia) to stay above 2019 level due to the effect of fixed cost components in the tax line.
BOARD OF DIRECTORS COMPOSITION
Mr M. Das will have completed his four-year appointment term upon conclusion of the Annual General Meeting of Shareholders of Heineken Holding N.V. on 22 April 2021. Mr M. Das is eligible for reappointment as non-executive member of the Board of Directors of Heineken Holding N.V. for a period of four years and a non-binding recommendation shall be submitted to the AGM in this respect.
Mr A.A.C. de Carvalho will have completed his four-year appointment term upon conclusion of the Annual General Meeting of Shareholders of Heineken Holding N.V. on 22 April 2021. Mr A.A.C. de Carvalho is eligible for reappointment as non-executive member of the Board of Directors of Heineken Holding N.V. for a period of four years and a non-binding recommendation shall be submitted to the AGM in this respect.
ENQUIRIES
Media Heineken Holding N.V. Kees Jongsma tel. +31 6 54 79 82 53 E-mail: [email protected]
Media Investors Sarah Backhouse José Federico Castillo Martinez Director of Global Communication Investor Relations Director E-mail: [email protected] E-mail: [email protected] Tel: +31-20-5239355 Tel: +31-20-5239590
Michael Fuchs Janine Ackermann / Robin Achten Financial Communications Manager Investor Relations Manager / Senior Analyst
INVESTOR CALENDAR HEINEKEN N.V.
(events also accessible for Heineken Holding N.V. shareholders)
Combined financial and sustainability annual report publication 19 February 2021 Trading Update for Q1 2021 21 April 2021 Annual General Meeting of Shareholders 22 April 2021 Half Year 2021 Results 02 August 2021 Quotation ex-interim dividend 2021 04 August 2021 Interim dividend payable 11 August 2021 Trading Update for Q3 2021 27 October 2021
CONFERENCE CALL DETAILS
HEINEKEN will host an analyst and investor video webcast about its 2020 FY results combined with an update on the on-going strategic review at 14:00 CET/ 13:00 GMT/ 08.00 EST. This call will also be accessible for Heineken Holding N.V. shareholders. The live video webcast will be accessible via the Heineken N.V.'s website: https://www.theheinekencompany.com/investors/results-reportswebcasts-and-presentations. An audio replay service will also be made available after the webcast at the above web address. Analysts and investors can dial-in using the following telephone numbers:
United Kingdom (Local): 020 3936 2999 Netherlands: 085 888 7233 USA: 1 646 664 1960 All other locations: +44 20 3936 2999 Participation password for all countries: 293180
Editorial information:
Heineken Holding N.V. engages in no activities other than its participating interest in Heineken N.V. and the management or supervision of and provision of services to that company.
HEINEKEN is the world's most international brewer. It is the leading developer and marketer of premium and non-alcoholic beer and cider brands. Led by the Heineken® brand, the Group has a portfolio of more than 300 international, regional, local and specialty beers and ciders. HEINEKEN is committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through "Brewing a Better World", sustainability is embedded in the business. HEINEKEN has a well-balanced geographic footprint with leadership positions in both developed and developing markets. HEINEKEN employs over 84,000 employees and operates breweries, malteries, cider plants and other production facilities in more than 70 countries. Heineken Holding N.V. and Heineken N.V. shares trade on the Euronext in Amsterdam. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIO NA and HEIA NA and on Reuters under HEIO.AS and HEIN.AS . HEINEKEN has two sponsored level 1 American Depositary Receipt (ADR) programmes: Heineken Holding N.V. (OTCQX: HKHHY) and Heineken N.V. (OTCQX: HEINY). Most recent information is available on the websites: www.heinekenholding.com and www.theHEINEKENcompany.com and follow HEINEKEN on Twitter via @HEINEKENCorp.
Market Abuse Regulation:
This press release may contain price-sensitive information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Disclaimer:
This press release contains forward-looking statements with regard to the financial position and results of HEINEKEN's activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond HEINEKEN's ability to control or estimate precisely, such as future market and economic conditions, developments in the ongoing COVID-19 pandemic and related government measures, the behaviour of other market participants, changes in consumer preferences, the ability to successfully integrate acquired businesses and achieve anticipated synergies, costs of raw materials, interest-rate and exchange-rate fluctuations, changes in tax rates, changes in law, change in pension costs, the actions of government regulators and weather conditions. These and other risk factors are detailed in HEINEKEN's publicly filed annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which speak only of the date of this press release. HEINEKEN does not undertake any obligation to update these forward-looking statements contained in this press release. Market share estimates contained in this press release are based on outside sources, such as specialised research institutes, in combination with management estimates.
REPORT OF THE BOARD OF DIRECTORS
Heineken Holding N.V. has a 50.005% interest in the issued share capital (being 50.029% (2019: 50.065%) of the outstanding share capital) of Heineken N.V. Standing at the head of HEINEKEN, Heineken Holding N.V. is not an ordinary holding company. Since its formation in 1952, Heineken Holding N.V.'s object pursuant to its Articles of Association has been to manage or supervise the management of HEINEKEN and to provide services for Heineken N.V. Within HEINEKEN, the primary duties of Heineken N.V.'s Executive Board are to initiate and implement corporate strategy and to manage Heineken N.V. and its related enterprise. It is supervised in the performance of its duties by Heineken N.V.'s Supervisory Board. Because Heineken N.V. manages the HEINEKEN group companies, Heineken Holding N.V., unlike Heineken N.V., does not have an internal risk management and control system. Heineken Holding N.V. does not engage in any operational activities and employs no staff.
Further information regarding the developments during the financial year 2020 of Heineken N.V. and its related companies, and the material risks Heineken N.V. is facing is given in Heineken N.V.'s press release.
Board of Directors
Mr M. Das, non-executive director (chairman) Mrs C.L. de Carvalho-Heineken, executive director Mr M.R. de Carvalho, executive director Mr J.A. Fernández Carbajal, non-executive director Mrs C.M. Kwist, non-executive director Mr A.A.C. de Carvalho, non-executive director Mrs A.M. Fentener van Vlissingen, non-executive director Mrs L.L.H. Brassey, non-executive director Mr. J.F.M.L. van Boxmeer, non-executive director
CONSOLIDATED FINANCIAL STATEMENTS FOR THE FULL YEAR 2019
| Contents | Page |
|---|---|
| Consolidated income statement | 8 |
| Consolidated statement of comprehensive income | 8 |
| Consolidated statement of financial position | 9 |
| Consolidated statement of cash flows | 10 |
| Consolidated statement of changes in equity | 11 |
| Non-GAAP measures | 13 |
| Glossary | 14 |
The 2020 financial information included in the primary statements attached to this press release are derived from the Annual Report 2020. This Annual Report has been authorised for issue. The Annual Report has not yet been published by law and still has to be adopted by the Annual General Meeting of Shareholders on 22 April 2021.
In accordance with section 393, Title 9, Book 2 of the Netherlands Civil Code, Deloitte Accountants B.V. has issued an unqualified Independent auditors' report on the Financial Statements.
The full Annual Report will be available for download on the website (www.heinekenholding.com) as of 19 February 2021.
Consolidated Income Statement
| 2020 | 2019 | |
|---|---|---|
| For the year ended 31 December | ||
| In millions of € | ||
| Revenue | 23,770 | 28,521 |
| Excise tax expense | (4,055) | (4,552) |
| Net revenue | 19,715 | 23,969 |
| Other income | 56 | 95 |
| Raw materials, consumables and services | (12,450) | (14,592) |
| Personnel expenses | (3,669) | (3,880) |
| Amortisation, depreciation and impairments | (2,874) | (1,959) |
| Total other expenses | (18,993) | (20,431) |
| Operating profit | 778 | 3,633 |
| Interest income | 50 | 75 |
| Interest expenses | (497) | (529) |
| Other net finance expenses | (143) | (59) |
| Net finance expenses | (590) | (513) |
| Share of profit/(loss) of associates and joint ventures | (31) | 164 |
| Profit before income tax | 157 | 3,284 |
| Income tax expense | (245) | (910) |
| Profit/(Loss) | (88) | 2,374 |
| Attributable to: | ||
| Shareholders of Heineken Holding N.V. (net (loss)/profit) | (102) | 1,087 |
| Non-controlling interests in Heineken N.V. | (102) | 1,079 |
| Non-controlling interests in Heineken N.V. group companies | 116 | 208 |
| Profit/(Loss) | (88) | 2,374 |
| Weighted average number of shares – basic | 288,030,168 | 288,030,168 |
| Weighted average number of shares – diluted | 288,030,168 | 288,030,168 |
| Basic earnings per share (€) | (0.36) | 3.77 |
| Diluted earnings per share (€) | (0.36) | 3.77 |
Consolidated Statement of Comprehensive Income
| 2020 | 2019 | |
|---|---|---|
| For the year ended 31 December | ||
| In millions of € | ||
| Profit/(Loss) | (88) | 2,374 |
| Other comprehensive income/(loss), net of tax: | ||
| Items that will not be reclassified to profit or loss: | ||
| Remeasurement of post-retirement obligations | 62 | (210) |
| Net change in fair value through OCI investments | (98) | 9 |
| Items that may be subsequently reclassified to profit or loss: | ||
| Currency translation differences | (2,114) | 369 |
| Change in fair value of net investment hedges | 76 | (43) |
| Change in fair value of cash flow hedges | 45 | 64 |
| Cash flow hedges reclassified to profit or loss | 4 | 21 |
| Net change in fair value through OCI investments | (1) | 1 |
| Cost of hedging | (6) | (5) |
| Share of other comprehensive income of associates/joint | ||
| ventures | 16 | (20) |
| Other comprehensive income/(loss), net of tax | (2,016) | 186 |
| Total comprehensive income/(loss) | (2,104) | 2,560 |
| Attributable to: | ||
| Shareholders of Heineken Holding N.V. | (1,064) | 1,168 |
| Non-controlling interests in Heineken N.V. | (1,063) | 1,160 |
| Non-controlling interests in Heineken N.V. group companies | 23 | 232 |
| Total comprehensive income/(loss) | (2,104) | 2,560 |
Consolidated Statement of Financial Position
| 2020 | 2019 | 2020 | 2019 | ||
|---|---|---|---|---|---|
| As at 31 December | As at 31 December | ||||
| In millions of € | In millions of € | ||||
| Intangible assets | 15,767 | 17,769 | Heineken Holding N.V. shareholders' equity | 6,604 | 7,993 |
| Property, plant and equipment | 11,551 | 13,269 | Non-controlling interests in Heineken N.V. | 6,788 | 8,154 |
| Investments in associates and joint ventures | 4,437 | 4,868 | Non-controlling interests in Heineken N.V. group companies | 1,000 | 1,164 |
| Loans and advances to customers | 194 | 277 | Total equity | 14,392 | 17,311 |
| Deferred tax assets | 779 | 647 | |||
| Other non-current assets | 884 | 1,255 | Borrowings | 14,616 | 13,366 |
| Total non-current assets | 33,612 | 38,085 | Post-retirement obligations | 938 | 1,189 |
| Provisions | 688 | 756 | |||
| Inventories | 1,958 | 2,213 | Deferred tax liabilities | 999 | 1,422 |
| Trade and other receivables | 2,807 | 4,123 | Other non-current liabilities | 131 | 153 |
| Current tax assets | 154 | 123 | Total non-current liabilities | 17,372 | 16,886 |
| Derivative assets | 77 | 28 | |||
| Cash and cash equivalents | 4,000 | 1,821 | Borrowings | 3,580 | 3,686 |
| Assets classified as held for sale | 24 | 111 | Trade and other payables | 6,107 | 7,520 |
| Total current assets | 9,020 | 8,419 | Returnable packaging deposits | 454 | 565 |
| 2020 | 2019 | 2020 | 2019 | ||
|---|---|---|---|---|---|
| As at 31 December | As at 31 December | ||||
| In millions of € | In millions of € | ||||
| Intangible assets | 15,767 | 17,769 | Heineken Holding N.V. shareholders' equity | 6,604 | 7,993 |
| Property, plant and equipment | 11,551 | 13,269 | Non-controlling interests in Heineken N.V. | 6,788 | 8,154 |
| Investments in associates and joint ventures | 4,437 | 4,868 | Non-controlling interests in Heineken N.V. group companies | 1,000 | 1,164 |
| Loans and advances to customers | 194 | 277 | Total equity | 14,392 | 17,311 |
| Deferred tax assets | 779 | 647 | |||
| Other non-current assets | 884 | 1,255 | Borrowings | 14,616 | 13,366 |
| Total non-current assets | 33,612 | 38,085 | Post-retirement obligations | 938 | 1,189 |
| Provisions | 688 | 756 | |||
| Inventories | 1,958 | 2,213 | Deferred tax liabilities | 999 | 1,422 |
| Trade and other receivables | 2,807 | 4,123 | Other non-current liabilities | 131 | 153 |
| Current tax assets | 154 | 123 | Total non-current liabilities | 17,372 | 16,886 |
| Derivative assets | 77 | 28 | |||
| Cash and cash equivalents | 4,000 | 1,821 | Borrowings | 3,580 | 3,686 |
| Assets classified as held for sale | 24 | 111 | Trade and other payables | 6,107 | 7,520 |
| Total current assets | 9,020 | 8,419 | Returnable packaging deposits | 454 | 565 |
| Provisions | 416 | 184 | |||
| Current tax liabilities | 259 | 283 | |||
| Derivative liabilities | 52 | 69 | |||
| Total current liabilities | 10,868 | 12,307 | |||
| Total assets | 42,632 | 46,504 | Total equity and liabilities | 42,632 | 46,504 |
Consolidated Statement of Cash Flows
| 2020 | 2019 | |
|---|---|---|
| For the year ended 31 December | ||
| In millions of € | ||
| Operating activities | ||
| Profit/(Loss) | (88) | 2,374 |
| Adjustments for: | ||
| Amortisation, depreciation and impairments | 2,874 | 1,959 |
| Net interest expenses | 447 | 454 |
| Other income | (56) | (95) |
| Share of (profit)/loss of associates and joint ventures and | ||
| dividend income on fair value through OCI investments | 21 | (173) |
| Income tax expenses | 245 | 910 |
| Other non-cash items | 231 | 240 |
| Cash flow from operations before changes in working | ||
| capital and provisions | 3,674 | 5,669 |
| Change in inventories | (18) | (257) |
| Change in trade and other receivables | 1,124 | (245) |
| Change in trade and other payables and returnable | ||
| packaging deposits | (759) | 510 |
| Total change in working capital | 347 | 8 |
| Change in provisions and post-retirement obligations | 211 | (121) |
| Cash flow from operations | 4,232 | 5,556 |
| Interest paid | (481) | (528) |
| Interest received | 45 | 52 |
| Dividends received | 89 | 181 |
| Income taxes paid | (749) | (924) |
| Cash flow related to interest, dividend and income tax | (1,096) | (1,219) |
| Cash flow from operating activities | 3,136 | 4,337 |
| 2020 | 2019 | |
|---|---|---|
| For the year ended 31 December | ||
| In millions of € | ||
| Investing activities | ||
| Proceeds from sale of property, plant and equipment and | ||
| intangible assets | 150 | 177 |
| Purchase of property, plant and equipment | (1,501) | (1,915) |
| Purchase of intangible assets | (139) | (186) |
| Loans issued to customers and other investments | (177) | (249) |
| Repayment on loans to customers and other investments | 44 | 64 |
| Cash flow (used in)/from operational investing activities | (1,623) | (2,109) |
| Free operating cash flow | 1,513 | 2,228 |
| Acquisition of subsidiaries, net of cash acquired | (26) | (183) |
| Acquisition of/additions to associates, joint ventures and | ||
| other investments | (9) | (2,875) |
| Disposal of subsidiaries, net of cash disposed of | (29) | 244 |
| Disposal of associates, joint ventures and other investments | 249 | 50 |
| Cash flow (used in)/from acquisitions and disposals | 185 | (2,764) |
| Cash flow (used in)/from investing activities | (1,438) | (4,873) |
| Financing activities | ||
| Proceeds from borrowings | 6,037 | 2,288 |
| Repayment of borrowings | (3,714) | (2,150) |
| Payment of lease commitments | (281) | (259) |
| Dividends paid | (811) | (1,223) |
| Purchase own shares and shares issued | 11 | 428 |
| Acquisition of non-controlling interests | (4) | (103) |
| Other | — | 3 |
| Cash flow (used in)/from financing activities | 1,238 | (1,016) |
| Net cash flow | 2,936 | (1,552) |
| Cash and cash equivalents as at 1 January | 687 | 2,248 |
| Effect of movements in exchange rates | (104) | (9) |
| Cash and cash equivalents as at 31 December | 3,519 | 687 |
MEDIA RELEASE
Consolidated Statement of Changes in Equity
| In millions of € | Share capital |
Share premium |
Translation reserve |
Hedging reserve |
Cost of hedging reserve |
Fair value reserve |
Other legal reserves |
Reserve for own shares |
Retained earnings |
Shareholders of Heineken Holding N.V. |
Non controlling interests in Heineken N.V. |
Non controlling interests in Heineken N.V. group companies |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 31 December 2018 | 461 | 1,257 | (1,657) | (18) | 5 | 173 | 550 | — | 6,471 | 7,242 | 7,283 | 1,183 | 15,708 |
| Changes in accounting policy* | — | — | — | — | — | — | — | — | 2 | 2 | 1 | — | 3 |
| Balance as at 1 January 2019* | 461 | 1,257 | (1,657) | (18) | 5 | 173 | 550 | — | 6,473 | 7,244 | 7,284 | 1,183 | 15,711 |
| Profit | — | — | — | — | — | — | 86 | — | 1,001 | 1,087 | 1,079 | 208 | 2,374 |
| Other comprehensive income | — | — | 144 | 43 | (3) | 5 | — | — | (108) | 81 | 81 | 24 | 186 |
| Total comprehensive income | — | — | 144 | 43 | (3) | 5 | 86 | — | 893 | 1,168 | 1,160 | 232 | 2,560 |
| Realised hedge results from non-financial assets |
— | — | — | (33) | — | — | — | — | — | (33) | (33) | — | (66) |
| Transfer to retained earnings | — | — | 2 | — | — | (20) | (76) | — | 94 | — | — | — | — |
| Dividends to shareholders | — | — | — | — | — | — | — | — | (475) | (475) | (474) | (272) | (1,221) |
| Cancellation own shares | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Purchase own shares by Heineken N.V. | — | — | — | — | — | — | — | — | 209 | 209 | 209 | 11 | 429 |
| Negative dilution | — | — | — | — | — | — | — | — | (64) | (64) | 64 | — | — |
| Share-based payments by Heineken N.V. | — | — | — | — | — | — | — | — | 7 | 7 | 7 | — | 14 |
| Acquisition of non-controlling interests in Heineken N.V. group companies |
— | — | — | — | — | — | — | — | (63) | (63) | (63) | 5 | (121) |
| Changes in consolidation by Heineken N.V. | — | — | — | — | — | — | — | — | — | — | — | 5 | 5 |
| Balance as at 31 December 2019 | 461 | 1,257 | (1,511) | (8) | 2 | 158 | 560 | — | 7,074 | 7,993 | 8,154 | 1,164 | 17,311 |
Consolidated Statement of Changes in Equity (continued)
| In millions of € | Share capital |
Share premium |
Translation reserve |
Hedging reserve |
Cost of hedging reserve |
Fair value reserve |
Other legal reserves |
Retained earnings |
Share-holders of Heineken Holding N.V. |
Non controlling interests in Heineken N.V. |
Non controlling interests in Heineken N.V. group companies |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2020 | 461 | 1,257 | (1,511) | (8) | 2 | 158 | 560 | 7,074 | 7,993 | 8,154 | 1,164 | 17,311 |
| Profit/(loss) | — | — | — | — | — | — | 43 | (145) | (102) | (102) | 116 | (88) |
| Other comprehensive income/(loss) | — | — | (965) | 25 | (3) | (50) | — | 31 | (962) | (961) | (93) | (2,016) |
| Total comprehensive income/(loss) | — | — | (965) | 25 | (3) | (50) | 43 | (114) | (1,064) (1,063) | 23 | (2,104) | |
| Realised hedge results from non-financial assets |
— | — | — | (1) | — | — | — | — | (1) | (1) | — | (2) |
| Transfer to retained earnings | — | — | (7) | — | — | (80) | (15) | 102 | — | — | — | — |
| Dividends to shareholders | — | — | — | — | — | — | — | (300) | (300) | (297) | (228) | (825) |
| Purchase own shares by Heineken N.V. | — | — | — | — | — | — | — | (3) | (3) | (2) | 20 | 15 |
| Negative dilution | — | — | — | — | — | — | — | (9) | (9) | 9 | — | — |
| Share-based payments by Heineken N.V. | — | — | — | — | — | — | — | (13) | (13) | (12) | — | (25) |
| Acquisition of non-controlling interests in Heineken N.V. group companies |
— | — | — | — | — | — | — | — | — | — | — | — |
| Changes in consolidation by Heineken N.V. | — | — | — | — | — | — | — | 1 | 1 | — | 21 | 22 |
| Balance as at 31 December 2020 | 461 | 1,257 | (2,483) | 16 | (1) | 28 | 588 | 6,738 | 6,604 | 6,788 | 1,000 | 14,392 |
*Restated for IFRS 16.
Non-Gaap Measures
In the internal management reports, HEINEKEN measures its segmental performance primarily based on operating profit and operating profit beia (before exceptional items and amortisation of acquisition-related intangible assets).
| In millions of € | 2020 | 2019 |
|---|---|---|
| Operating profit (beia) | 2,421 | 4,020 |
| Amortisation of acquisition-related intangible assets and exceptional items included in operating profit |
(1,643) | (387) |
| Share of profit/(loss) of associates and joint ventures | (31) | 164 |
| Net finance expenses | (590) | (513) |
| Profit before income tax | 157 | 3,284 |
| Profit/(Loss) attributable to shareholders of | ||
| Heineken Holding N.V. (net profit/(loss)) | (102) | 1,087 |
| Non-controlling interests in Heineken N.V. | (102) | 1,079 |
| (204) | 2,166 | |
| Amortisation of acquisition-related intangible assets included in operating profit |
273 | 309 |
| Exceptional items included in operating profit | 1,370 | 78 |
| Exceptional items included in net finance expenses/ (income) |
(26) | 16 |
| Exceptional items and amortisation of acquisition-related intangible assets included in share of profit of associates |
||
| and joint ventures | 178 | 64 |
| Exceptional items included in income tax expense | (347) | (64) |
| Allocation of exceptional items and amortisation of acquisition-related intangibles to non-controlling interests |
(89) | (52) |
| Net profit (beia) | 1,154 | 2,517 |
Due to rounding, this table will not always cast.
The 2020 exceptional items and amortisation of acquisition-related intangibles on net profit and loss amount to €1,358 million (2019: €351 million). This amount consists of:
- €273 million (2019: €309 million) of amortisation of acquisitionrelated intangibles recorded in operating profit.
- €1,370 million (2019: €78 million) of exceptional items recorded in operating profit. This includes nil exceptional items on revenue (2019: €78 million exceptional benefit on revenue, mainly relating to tax credits in Brazil), €8 million exceptional excise tax expenses (2019: €2 million), €331 million of restructuring expenses, largely associated with the EverGreen programme (2019: €91 million), €963 million of impairments (net of reversal) mainly in Papua New Guinea, Lagunitas, Jamaica and various UK Pubs (2019: €85 million), €35 million net loss on disposals (2019: €57 million gain on disposals, mainly related to the sale of operating entities in China and Hong Kong) and €33 million of other net exceptional expenses (2019: €35 million).
- €26 million of exceptional net finance income, mainly related to the release of tax provisions (2019: €16 million of exceptional net finance expense).
- €178 million of exceptional net expenses (2019: €64 million) included in the share of profit of associates and joint ventures, mainly relating to impairments of associates and joint ventures of €139 million (2019: €30 million)
- €347 million (2019: €64 million) in income tax expense, of which the tax impact on exceptional items and amortisation of acquisitionrelated intangible assets of €363 million (2019: €57 million) and the exceptional income tax net loss of €16 million (2019: €7 million exceptional income tax benefit).
- Total amount of eia allocated to non-controlling interests amounts to €89 million (2019: €52 million).
MEDIA RELEASE
GLOSSARY
Acquisition-related intangible assets
Acquisition-related intangible assets are assets that HEINEKEN only recognises as part of a purchase price allocation following an acquisition. This includes, among others, brands, customer-related and certain contract-based intangibles.
Beia
Before exceptional items and amortisation of acquisition-related intangible assets.
Cash conversion ratio
Free operating cash flow/net profit (beia) before deduction of noncontrolling interests.
Cash flow (used in)/from operational investing activities
This represents the total of cash flow from sale and purchase of Property, plant and equipment and Intangible assets, proceeds and receipts of Loans to customers and Other investments.
Centrally available financing headroom
This consists of the undrawn part of revolving credit facility and cash minus commercial paper and other short-term borrowings.
Consolidation changes
Changes as a result of acquisitions and disposals.
Depletions
Sales by distributors to the retail trade.
Dividend payout
Proposed dividend as percentage of net profit (beia).
Earnings per share (EPS)
Basic
Net profit/(loss) divided by the weighted average number of shares – basic – during the year.
Diluted
Net profit/(loss) divided by the weighted average number of shares – diluted – during the year.
EBITDA
Earnings before interest, taxes, net finance expenses, depreciation and amortisation. EBITDA includes HEINEKEN's share in net profit of joint ventures and associates.
Effective tax rate
Income tax expense expressed as a percentage of the profit before income tax, adjusted for share of profit of associates and joint ventures.
Eia
Exceptional items and amortisation of acquisition-related intangible assets.
Exceptional items
Items of income and expense of such size, nature or incidence, that in the view of management their disclosure is relevant to explain the performance of HEINEKEN for the period.
Free operating cash flow
This represents the total of cash flow from operating activities and cash flow from operational investing activities.
HEINEKEN
Heineken Holding N.V., Heineken N.V., its subsidiaries and interests in joint ventures and associates
Net debt
Non-current and current interest-bearing borrowings (incl. lease liabilities), bank overdrafts and market value of cross-currency interest rate swaps less cash and cash equivalents.
Net profit/(loss)
Profit/(loss) after deduction of non-controlling interests (profit attributable to shareholders of Heineken Holding N.V.).
Net revenue
Revenue as defined in IFRS 15 (after discounts) minus the excise tax expense for those countries where the excise is borne by HEINEKEN.
Net revenue per hectolitre
Net revenue divided by total consolidated volume.
Organic growth
Growth excluding the effect of foreign currency translational effects, consolidation changes, exceptional items and amortisation of acquisition-related intangible assets.
Organic volume growth
Growth in volume, excluding the effect of consolidation changes.
Price mix on a constant geographic basis
Refers to the different components that influence net revenue per hectolitre, namely the changes in the absolute price of each individual sku and their weight in the portfolio. The weight of the countries in the total revenue in the base year is kept constant.
Profit / (Loss)
Total profit / (loss) of HEINEKEN before deduction of non-controlling interests.
®
All brand names mentioned in this report, including those brand names not marked by an ®, represent registered trademarks and are legally protected.
Region
A region is defined as HEINEKEN's managerial classification of countries into geographical units.
Volume
Brand specific volume (Heineken® volume, Amstel® volume, etc.) Brand volume produced and sold by consolidated companies plus 100% of brand volume sold under licence agreements by joint ventures, associates and third parties.
Beer volume
Beer volume produced and sold by consolidated companies.
Non-beer volume
Cider, soft drinks and other non-beer volume produced and sold by consolidated companies.
Third party products volume
Volume of third party products (beer and non-beer) resold by consolidated companies.
Total consolidated volume
The sum of beer volume, non-beer volume and third party products volume.
Licensed volume
100% of volume from HEINEKEN's beer brands sold under licence agreements by joint ventures, associates and third parties.
Group beer volume
The sum of beer volume, licensed beer volume and attributable share of beer volume from joint ventures and associates.
Weighted average number of shares
Basic
Weighted average number of outstanding shares. Diluted
Weighted average number of shares outstanding, adjusted for the weighted average number of own shares purchased or held.