94 Notes to the Consolidated Financial Statements (continued) 15. Intangible assets (continued) Brands, customer-related and contract-based intangibles Impairment tests for cash-generating units containing goodwill Sensitivity to changes in assumptions Heineken NV. Report of the Report of the Financial Sustainability Other Annual Report 2016 Introduction Executive Board Supervisory Board Statements Review Information The main brands capitalised are the brands acquired in various acquisitions such as Fosters, Strongbow, Dos Equis, Tiger and Bintang. The main customer-related and contract-based intangibles relate to customer relationships with retailers in Mexico and Asia Pacific (constituted either by way of a contractual agreement or by way of non-contractual relations) and reacquired rights. For the purpose of impairment testing, goodwill in respect of Europe, the Americas (excluding Brazil) and Asia Pacific is allocated and monitored on a regional basis. For Brazil and subsidiaries within Africa, Middle East and Eastern Europe and Head Office, goodwill is allocated and monitored on an individual country basis. The carrying amounts of goodwill allocated to each (group of) CGU(s) are as follows: In millions of EUR 2016 2015 Europe 4,788 5,060 The Americas (excluding Brazil) 2,115 2,124 Brazil 78 62 Africa, Middle East and Eastern Europe (aggregated) 414 508 Asia Pacific 3,154 3,090 Head Office 480 480 11,029 11,324 Throughout the year, goodwill decreased mainly due to net foreign currency differences. The recoverable amounts of the (group of) CGUs are based on value in use calculations. Value in use was determined by discounting the future cash flows generated from the continuing use of the unit using a pre-tax discount rate. The key assumptions used for the value in use calculations are as follows: - Cash flows were projected based on actual operating results and the three-year business plan. Cash flows for a further seven-year period (except for Europe, where a further two-year period was applied) were extrapolated using expected annual per country volume growth rates, which are based on external sources. Management believes that this period is justified due to the long-term development of the local beer business and past experiences. - The beer price growth per year after the first three-year period is assumed to be at specific per country expected annual long-term inflation, based on external sources. - Cash flows after the first ten-year (Europe five-year) period were extrapolated using a perpetual growth rate equal to the expected annual long-term inflation, in order to calculate the terminal recoverable amount. - A per CGU-specific pre-tax Weighted Average Cost of Capital (WACC) was applied in determining the recoverable amount of the units. The values assigned to the key assumptions used for the value in use calculations are as follows: In Pre-tax WACC Expected annual long-term inflation 2020-2026 Expected volume growth rates 2020-2026 Europe 9.3 1.8 0.5 The Americas (excluding Brazil) 13.6 3.2 3.4 Brazil 16.9 4.9 3.4 Africa, Middle East and Eastern Europe 15.4-24.4 2.7-12.2 0.7-8.7 Asia Pacific 14.5 4.6 3.2 Head Office 9.4 1.8 0.5 The outcome of these impairment tests in 2016 did not result in an impairment loss (2015: nil) being charged to profit or loss. The outcome of a sensitivity analysis of a 100 basis points adverse change in key assumptions (lower growth rates or higher discount rates respectively) did not result in a materially different outcome of the impairment test.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2016 | | pagina 95