112
Notes to the Consolidated Financial Statements (continued)
30. Financial risk management and financial instruments (continued)
Exposure to foreign currency risk
Sensitivity analysis
Interest rate risk
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Heineken N.V. Annual Report 2017
HEINEKEN's transactional exposure to the US dollar and Euro was as follows based on notional amounts. The Euro column relates to transactional
exposure to the Euro within subsidiaries which are reporting in other currencies. Included in the amounts are intra-HEINEKEN cash flows.
2017 2016
In millions
EUR
USD
EUR
USD
Financial assets
85
4,997
146
5,260
Financial liabilities
(2,284)
(6,657)
(1,291)
(6,338)
Gross balance sheet exposure
(2,199)
(1,660)
(1,145)
(1,078)
Estimated forecast sales next year
153
1,321
207
1,330
Estimated forecast purchases next year
(1,578)
(2,011)
(1,965)
(1,818)
Gross exposure
(3,624)
(2,350)
(2,903)
(1,566)
Net notional amounts foreign exchange contracts
411
1,670
433
884
Net exposure
(3,213)
(680)
(2,470)
(682)
Sensitivity analysis
Equity
(149)
1
(59)
(15)
Profit or loss
(13)
(9)
(4)
1
A10% strengthening of the US dollar against the Euro or, in case of the Euro, a strengthening of the Euro against all other currencies as at
31 December would have affected the value of financial assets and liabilities (related to transactional exposure) recorded on the balance sheet
and would have therefore decreased (increased) equity and profit by the amounts shown above. This analysis assumes that all other variables, in
particular interest rates, remain constant.
A10% weakening of the US dollar against the Euro 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
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 than floating. Interest rate instruments that can be used are
(cross-currency) interest rate swaps, forward rate agreements, caps and floors.
Swap maturity follows the maturity of the related loans and borrowings which have swap rates for the fixed leg ranging from 2.3 to 6.5% (2016:
from 3.8 to 6.5%).
