Operating profit and net profit
72 Heineken N.V. Annual Report 2004 Report of the Executive Board Financial Review
2004
Turnover and costs
in millions of euros
Net turnover
Raw materials, consumables and services
Personnel costs
Amortisation/depreciation and value adjustments
Total operating expenses
Operating profit
10,005
6,027
1,957
773
8,757
1,248
2003
Change
9,255
5,557
1,832
644
8,033
1,222
7
20
reflecting first-time consolidations and higher average staff levels. A decrease in personnel costs
on a like-for-like basis was offset by higher wage costs in several countries. Higher amortisation
of goodwill also increased operating expenses €50 million.
Operating profit rose 2% from €1,222 million to €1,248 million, despite the 12.9% negative impact
of exchange rate movements. Operating profit as a proportion of net turnover decreased from
13.2% to 12.5%. New acquisitions added €93 million to operating profit, before amortisation of goodwill
of €50 million. The negative effect of exchange rate movements on operating profit amounted to
€158 million.
Income from non-consolidated participating interests declined by €241 million to €140 million
negative. This decrease was largely due to the €190 million impairment charge on Heineken's
20% participating interest in Cervejerias Kaiser and must be viewed against the background of the
exceptional net gain of €71 million in 2003 on the sale of the 15% interest in Argentinean brewing
group Quilmes.
Net interest charges rose €40 million to €180 million, largely reflecting higher interest charges
in connection with loans raised to finance acquisitions.
The average tax burden decreased from 29.5% in 2003 to 28.7% in 2004, mainly due to several
non-recurring tax assets in Italy in particular.
Net profit was down 32.7% to €537 million and earnings per share declined from €1.63 to €1.10.
2004
Operating profit and net profit
in millions of euros
Operating profit
Income of non-consolidated participating interests
Interest
I
Profit before tax
Taxation
Profit after tax
Minority interests
Net profit
1,248
-140
-180
928
■306
622
-85
537
2003
Change
1,222
101
-140
1,183
-319
864
-66
798
2
-239
29
-22
-4
-28
29
-33
