Financial Review (continued)
Net finance expenses (beia)
Share of net profit of associates and joint ventures (beia)
Income tax expense (beia)
Net profit
Earnings per share - diluted
Exceptional items and amortisation of acquisition-related intangibles (eia)
O O Qs
Report of the Executive Board
Report of the Supervisory Board
the strong top-line performance partially offset by higher input costs and higher expenses in global
sponsorships, e-commerce and technology upgrades. Currency translation had a positive impact of
€80 million. Consolidation changes had a negative impact of €21 million.
The average interest rate (beia) in 2019 was 2.9% (2018: 3.2%). Net interest expenses (beia) increased by
€31 million to €435 million, mainly due to the first time inclusion of interest expenses on lease liabilities.
Other net finance expenses (beia) increased to €62 million, including the interest expense on the net
pension liability and the impact of currency revaluation on outstanding payables in foreign currencies.
The share of net profit of associates and joint ventures (beia) amounted to €228 million, including the
attributable profit from CR Beer for the period of May to October. The organic increase was €10 million,
reflecting mainly higher profits from Costa Rica.
The effective tax rate (beia) was 27.6% (2018: 26.3%). The increase is driven by new interest deduction
limitation rules in the Netherlands implemented in 2019 and one-off benefits in 2018.
Net profit for 2019 was €2,166 million (2018: €1,913 million). Net profit (beia) increased organically by
€105 million (4.3%) to €2,517 million. The impact of currency translation was positive by €47 million and
consolidation changes had a negative impact of €20 million.
Earnings per share - diluted increased to €3.77 (2018: €3.35). Earnings per share - diluted (beia) increased
by 4.9% from €4.18 to €4.38.
The table below presents the reconciliation of operating profit before exceptional items and
amortisation of acquisition-related intangibles (operating profit beia) to profit before income tax.
In millions of
2019
2018*
Operating profit (beia)
4,020
3,808
Amortisation of acquisition-related intangible assets
and exceptional items included in operating profit
(387)
(687)
Share of profit of associates and joint ventures
164
210
Net finance expenses
(513)
(485)
Profit before income tax
3,284
2,846
Restated for IAS 37.
Heineken N.V. Annual Report 2019
Financial Statements Sustainability Review Other Information
The table1 below provides an overview of the exceptional items and amortisation of acquisition-related
intangibles in HEINEKEN's net profit:
In millions of
2019
2018*
Profit attributable to shareholders of the Company
(net profit)
2,166
1,913
Amortisation of acquisition-related intangible assets included
in operating profit
309
311
Exceptional items included in operating profit
78
376
Exceptional items included in net finance expenses/(income)
16
25
Exceptional items and amortisation of acquisition-related
intangible assets included in share of profit of associates
and joint ventures
64
(50)
Exceptional items included in income tax expense
(64)
(138)
Allocation of exceptional items and amortisation of
acquisition-related intangibles to non-controlling interests
(52)
(52)
Net profit (beia)
2,517
2,385
1 Due to rounding, this table will not always cast.
Restated for IAS 37.
The 2019 exceptional items and amortisation of acquisition-related intangibles on net profit amount to
€351 million (2018: €472 million). This amount consists of:
- €309 million (2018: €311 million) of amortisation of acquisition-related intangibles recorded in
operating profit.
- €78 million (2018: €376 million) of exceptional items recorded in operating profit. This includes €78 million
exceptional benefits on revenue, mainly relating to tax credits in Brazil (no impact in 2018) and €2 million
exceptional excise tax expenses (2018: €18 million exceptional excise tax benefit), €91 million of
restructuring expenses (2018: €122 million), €85 million of impairments (2018: €183 million mainly in the
DRC), €57 million net gain on disposals, mainly relating to the sale of operating entities in China and Hong
Kong (2018: €4 million net gain) and €35 million of other net exceptional expenses (2018: €94 million).
- €16 million (2018: €25 million) of exceptional items in net finance expenses, mainly related to interest
income over tax credits in Brazil and interest expenses over tax liabilities and pre-financing of acquisitions.
- €64 million of exceptional items and amortisation of acquisition-related intangibles included in share
of profit of associates and joint ventures (2018: €50 million net benefits, mainly related to the early
termination of a brand licence by CCU S.A. in exchange for cash and a portfolio of brands in Argentina).
- €64 million (2018: €138 million) in income tax expense, which includes the tax impact on exceptional
items and amortisation of acquisition-related intangible assets of €57 million (2018: €104 million) and an
exceptional income tax net benefit of €7 million (2018: €34 million).
- Total amount of eia allocated to non-controlling interests amounts to €52 million (2018: €52 million).
