FINANCIAL REVIEW CONTINUED
52 REPORT OF THE EXECUTIVE BOARD
HEINEKEN N.V. ANNUAL REPORT 200 i
Total equity
As a percentage of total assets
Net debt/EBITDA (beia)
2004
2005
2006
2007
2008
34.6
38.2
42.5
23.1
3.28
In millions of EUR 2008 2007
EBIT
Depreciation and impairments of plant, property and equipment
Amortisation and impairment of intangible assets (including goodwill)
1,080
825
381
1,418
609
29
EBITDA
2,286
2,056
Exceptional items (adjusted for exceptional items in
depreciation and amortisation)
434
328
EBITDA (beia)
2,720
2,384
Financing and liquidity
As at 31 December 2008, total equity decreased by €959 million to €4,752 million, whilst equity attributable
to equity holders of the Company decreased by €933 million to €4,471 million. This decrease was mainly due
to the effect of foreign currency translation differences and a negative movement in the hedging reserve.
The increase in the impact of foreign currency translation differences for foreign operations in equity of
€645 million was mainly due to the impact of depreciation of the British Pound on the net assets and goodwill
measured in British Pounds of total €423 million. Remaining impact was related to devaluation of the Russian
Ruble and Chilean Peso off-set by the appreciation of the US Dollar. Hedge accounting on interest rate swaps
and hedging of US Dollar export cash flows mainly caused the negative impact on the hedging reserve.
Due to the economic downturn, employee benefit assets have decreased significantly. Future contributions
to pension funds may increase if the existing situation remains.
Net debt as of 31 December 2008 amounted to €8,932 million. Because of the acquisition of S&N and
several other acquisitions the leverage of the Group has increased significantly. S&N was acquired for a
net consideration of €2,837 million and in addition, €3,836 million of existing net debt was acquired as
well. Other cash flow from acquisitions and disposals added up to €797 million. The acquisition of S&N was
financed with an Acquisition Facility provided by nine banks, split between a one-year tranche (outstanding
as of 31 December 2008: €1,144 million) that is extendible with another one-year and a five-year tranche
(outstanding as of 31 December 2008: €2,920 million).
Of total gross interest-bearing debt, approximately 84 per cent is denominated in Euro. This is includes the
effect of cross-currency interest rate swaps on non-euro-denominated debt such as US private placements
at both Heineken N.V. and S&N pic level. The fair value of these swaps does not form part of Net Debt.
Approximately 13 per cent of gross-bearing debt is denominated in British Pound. This consists both of
interest-bearing debt at the level of several UK subsidiaries and Special Purpose Entities (SPEs) as well as
approximately GBP 512 million of debt at Heineken N.V. level.
The remaining 3 per cent of gross interest debt is denominated in other currencies. This is mostly debt at
subsidiary level. This currency breakdown excludes the effect of any derivatives, which are used to hedge
inter-Company lending denominated in currencies other than Euro.
The first peak in our repayment profile can be identified in the first half of 2010. In February 2010 one of our
€500 million Bonds, issued in 2003, will mature. Since the Company intends to extend the one-year tranche of
the Acquisition Facility, it includes the repayment of this tranche as of the end of April 2010 in its repayment
profile. The Company intends to repay the debts maturing in the first half of 2010 partly from its own cash
flow generation and partly from proceeds from further refinancing activities. Heineken also established an
EMTN programme in September 2008. This programme was approved by the Luxembourg Commission de
Surveillance du Secteur Financier which is the Luxembourg competent authority for the purpose of Directive
2003/71/EC and facilitates flexible access to Debt Capital Markets going forward.