Report of the Report of the
Contents Overview Executive Board Supervisory Board
Financial
statements
Other information
Loans to customers
HEINEKEN's exposure to credit risk is mainly influenced by the individual characteristics of each customer. HEINEKEN's held-to-
maturity investments includes loans to customers, issued based on a loan contract. Loans to customers are ideally secured by,
amongst others, rights on property or intangible assets, such as the right to take possession of the premises of the customer. Interest
rates calculated by HEINEKEN are at least based on the risk-free rate plus a margin, which takes into account the risk profile of the
customer and value of security given.
HEINEKEN establishes an allowance for impairment of loans that represents its estimate of incurred losses. The main components
of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component
established for groups of similar customers in respect of losses that have been incurred but not yet identified. The collective loss
allowance is determined based on historical data of payment statistics.
In a few countries the issuance of new loans is outsourced to third parties. In most cases, HEINEKEN issues sureties (guarantees)
to the third party for the risk of default by the customer.
Trade and other receivables
HEINEKEN's local management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Under
the credit policies all customers reguiring credit over a certain amount are reviewed and new customers are analysed individually
for creditworthiness before HEINEKEN's standard payment and delivery terms and conditions are offered. HEINEKEN's review
includes external ratings, where available, and in some cases bank references. Purchase limits are established for each customer
and these limits are reviewed regularly. Asa result of the deteriorating economic circumstances since 2008, certain purchase limits
have been redefined. Customers that fail to meet HEINEKEN's benchmark creditworthiness may transact with HEINEKEN only on
a prepayment basis.
In monitoring customer credit risk, customers are, on a country basis, grouped according to their credit characteristics, including
whether they are an individual or legal entity, which type of distribution channel they represent, geographic location, industry, ageing
profile, maturity and existence of previous financial difficulties. Customers that are graded as high risk are placed on a restricted
customer list, and future sales are made on a prepayment basis only with approval of management.
HEINEKEN has multiple distribution models to deliver goods to end customers. Deliveries are done in some countries via own wholesalers,
in other markets directly and in some others via third parties. As such distribution models are country-specific and on consolidated
level diverse, as such the results and the balance sheet items cannot be split between types of customers on a consolidated basis.
The various distribution models are also not centrally managed or monitored.
HEINEKEN establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other
receivables and investments. The components of this allowance are a specific loss component and a collective loss component.
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