113
Notes to the Consolidated Financial Statements (continued)
Interest rate risk - profile
-
-
Cash flow sensitivity analysis for variable rate instruments
Commodity price risk
Report of the
Report of the
Financial
Sustainability
Other
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
Heineken N.V. Annual Report 2017
At the reporting date, the interest rate profile of HEINEKEN's interest-bearing financial instruments was as follows:
In millions of
2017
2016
Fixed rate instruments
Financial assets
75
83
Financial liabilities
(13,002)
(11,984)
Net interest rate swaps
417
(12,510)
(11,901)
Variable rate instruments
Financial assets
2,599
3,214
Financial liabilities
(2,376)
(2,587)
Net interest rate swaps
(463)
(240)
627
HEINEKEN applies fair value hedge accounting on certain fixed rate financial liabilities and designates derivatives as hedging instruments.
A change of 100 basis points in interest rates constantly applied during the reporting period would have increased (decreased) equity and profit or
loss by the amounts shown below (aftertax). This analysis assumes that all other variables, in particular foreign currency rates, remain constant and
excludes any possible change in fair value of derivatives at period-end because of a change in interest rates. This analysis is performed on the same
basis as for 2016.
Profit or loss
Equity
In millions of
100 bp increase 100 bp decrease
100 bp increase 100 bp decrease
31 December 2017
Variable rate instruments
2
(2)
2 (2)
Net interest rate swaps
(3)
3
(3) 3
Cash flow sensitivity (net)
(1)
1
(1) 1
31 December 2016
Variable rate instruments
5
(5)
5 (5)
Net interest rate swaps - - - -
Cash flow sensitivity (net)
5
(5)
5 (5)
Commodity price risk is the risk that changes in commodity prices will affect HEINEKEN's income. The objective of commodity price risk
management is to manage and control commodity risk exposures within acceptable parameters, while optimising the return on risk. The main
commodity exposure relates to the purchase of cans, glass bottles, malt and utilities. Commodity price risk is in principle addressed by negotiating
fixed prices in supplier contracts with various contract durations. So far, commodity hedging with financial counterparties by HEINEKEN has
been limited to aluminium hedging and to a limited extent gas, sugar and grains hedging, which are done in accordance with risk policies.
HEINEKEN does not enter into commodity contracts otherthan to meet HEINEKEN's expected usage and sale requirements. As at 31 December
2017, the market value of commodity swaps was €77 million positive (2016: €11 million positive).