- - - - - - - - - - - - Report of the Report of the Contents Overview Executive Board Supervisory Board Financial statements Other information Defined benefit plan assets 2013 2012 In millions of EUR Quoted Unquoted Total Quoted Unquoted Total Equity instruments: Europe 711 711 620 620 Northern America 582 582 458 458 Japan 197 197 170 170 Asia other 177 177 236 236 Other 252 252 201 201 1,919 1,919 1,685 1,685 Debt instruments: Corporate bonds - investment grade 2,150 1,986 Corporate bonds - non-investment grade 39 58 2,189 20 2,209 2,044 16 2,060 Derivatives 423 2 425 210 6 216 Properties and real estate 233 214 447 213 222 435 Cash and cash equivalents 107 12 119 243 24 267 Investment funds 979 228 1,207 1,320 166 1,486 Other plan assets 184 43 227 197 55 252 1,926 499 2,425 2,183 473 2,656 Balance as at 31 December 6,034 519 6,553 5,912 489 6,401 The primary goal of the Heineken pension funds is to monitor the mix of debt and equity securities in its investment portfolio based on market expectations. Material investments within the portfolio are managed on an individual basis. Through its defined benefit pension plans, HEINEKEN is exposed to a number of risks, the most significant which are detailed below: Asset volatility The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If plan assets underperform this yield, this will create a deficit. Both the Netherlands and the UK plans hold a significant proportion of equities, which are expected to outperform corporate bonds in the long term, while providing volatility and risk in the short term. In the Netherlands, an Asset-Liability Matching (ALM) study is performed at least on a triennial basis. The ALM study is the basis for the strategic investment policies and the (long-term) strategic investment mix. This resulted in a strategic asset mix comprising 35 percent equity securities, 40 per cent bonds, 10 per cent property and real estate and 15 per cent other investments. The objective is to hedge currency risk on the dollar, yen and sterling for 50 per cent in the strategic investment mix. In the UK, an Asset-Liability Matching study is performed at least on a triennial basis. The ALM study is the basis for the strategic investment policies and the (long-term) strategic investment mix. This resulted in a strategic asset mix comprising 29 per cent equity securities (including synthetic exposure from derivatives), 35 per cent bonds (including synthetic exposure from derivatives), 5 per cent property and real estate and 31 per cent other investments. The objective is to hedge currency risk on developed non-GBP equity market exposures for 70 per cent, with USD currency risk on other investments hedged 100 per cent in the strategic investment mix. Interest rate risk A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans' bond holdings. In the Netherlands, interest rate risk is partly managed through fixed income investments. These investments match the liabilities for 23.4 per cent. In the UK, interest rate risk is partly managed through the use of a mixture of fixed income investments and interest rate swap instruments. These investments and instruments match the liabilities for 29.2 per cent. Heineken N.V. Annual Report 2013 107

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2013 | | pagina 108