2000
1999 Change
Financial review
Total operating expenditure rose by 13% to EUR 7,186 million. This increase can largely be attributed
to the new consolidations. The cost of packaging materials showed a slight rise, while raw material
costs remained stable. Energy costs showed a sharp increase due to higher oil prices. Sponsoring
and advertising activities to enhance our international and local brands boosted marketing and sell
ing expenses by 15% to EUR 1,107 million. Expressed as a percentage of net turnover, this represents
an increase from 13.5% in 1999 to 13.7%.
Personnel costs rose as a result of new consolidations. In addition, personnel and other costs rose
as a result of expenditure on a number of large ICT projects. The aim of these projects is to imple
ment a number of common systems throughout the entire Heineken Group. In 2000 the costs of
these projects were about EUR 40 million above the levels that may be considered normal.
Additions to the provisions for personnel schemes were higher than in 1999 due to changes in early
retirement schemes.
Operating profit rose by 15.3% to EUR 921 million. A considerable part of this came from first time
consolidations. Higher sales volumes, an improved sales mix and higher selling prices also con
tributed strongly to this rise. Equally important was the effect of the more favourable exchange rate
of the US dollar against the euro.
Expressed as a percentage of net turnover, operating profit amounted to 11.4% as opposed to 11.2%
in 1999. Earnings from non-consolidated subsidiaries and affiliated companies rose in particular
due to good results achieved by Nigerian Breweries, in which we increased our participation to 42%.
By exercising our right to convert a convertible loan into shares, we increased our interest in
Nigerian Breweries to 54% at the end of December 2000. This means that Nigerian Breweries will be
fully consolidated as of 2001.
Interest paid was up EUR 29 million due to the cost of financing the acquisition of Cruzcampo and
because of higher financing costs in Poland. Interest received increased by EUR 4 million. On bal
ance, interest charges rose by EUR 25 million. The interest cover amounted to 15 against 20 in 1999.
Expressed as a percentage of operating profit including interest, tax burden fell from 34.9% to
32.4%. This decline can be largely attributed to the effect of offsetting tax losses carried forward
in Spain, although this was partly reduced by tax losses in Poland that could not be offset within
the financial year. In addition, there were incidental tax benefits in Italy, Greece and France.
Minority interests in profit declined due to lower results at Zywiec Poland.
Net profit increased by 20% to EUR 621 million. Earnings per share with a nominal value of NLG 5.00
(EUR 2.27) rose from EUR 1.65 to EUR 1.98.
Operating profit and net profit
Operating profit and net profit
in millions of euros
Operating profit
Earnings of non-consolidated companies
Interest
Profit before taxation
Taxation
Profit after taxation
Minority interests
921
59
-66
914
-277
637
-16
799
51
-41
809
-265
544
-28
15
16
61
13
5
17
-43
Net profit
621
516
20
44
