122
Financial statements Notes to the consolidated financial statements
32. Financial risk management and financial instruments
The following significant exchange rates applied during the year:
Average rateYear-end rat,
- r201020092010200
1.1657 1.1224 1.1618
USD0.7543 0.7170 0.7484 0.69^
Sensitivity analysis
A10 per cent strengthening of the euro against the British pound and US dollar or in case of the euro a strengthening of the euro
against all other currencies as at 31 December would have increased (decreased) equity and profit by the amounts shown below.
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same
basis for 2009.
Equity Profit or los
In millions of EUR31 December201020092010200*
(5)
2 (1)
,.S; 38 39
A 10 per cent weakening of the euro against the British pound and US dollar or in case of the euro a weakening of the euro
against all other currencies as at 31 December would have had the equal but opposite effect on the basis that all other
variables remain constant.
Interest rate risk
In managing interest rate risk, Heineken aims to reduce the impact of short-term fluctuations on earnings. Over the longer term,
however, permanent changes in interest rates would have an impact on profit.
Heineken opts for a mix of fixed and variable interest rates in its financing operations, combined with the use of interest rate
instruments. Currently Heineken's interest rate position is more weighted towards fixed rather than floating. Interest rate
instruments that can be used are interest rate swaps, forward rate agreements, caps and floors.
Swap maturity follows the maturity of the related loans and borrowings and have swap rates for the fixed leg ranging from
2.0 to 8.8 per cent (2009: from 2.0 to 7.3 per cent).
Interest rate risk - Profile
At the reporting date the interest rate profile of Heineken's interest-bearing financial instruments was as follows:
In m 3ns of EUR2010
Fixed rate instruments
Financial assets
84
157
Financial liabilities
(5,275)
(4,664)
Interest rate swaps floating to fixed
(456)
(2,50
(5,647)
(7,012;
Variable rate instruments
Financial assets
633
88
Financial liabilities
(2,786)
(2,947)
Interest rate swaps fixed to floating
456
(1,697)[35
