0
36
Financial review
Net finance expenses (beia)
Share of net profit of associates and joint ventures (beia)
Income tax expense (beia)
Net profit and loss
Earnings per share - diluted
Exceptional items and amortisation of acquisition-related intangibles (eia)
Heineken N.V.
Annual Report 2020
Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Net interest expenses (beia) increased organically by 9.7% to €470 million, reflecting additional funding raised at
Group level and higher local debt in some countries. The average interest rate (beia) in 2020 was 3.0% (2019: 2.9%).
Other net finance expenses (beia) amounted to €146 million, up 151.8% on an organic basis driven by the
negative impact of currency revaluation on outstanding foreign currency payables in some emerging markets.
The share of net profit of associates and joint ventures (beia) amounted to €147 million, including the attributable
profit from CR Beer with a two-month delay (November 2019 to October 2020). The organic decline was
€69 million, reflecting the impact of COVID-19 mainly coming from CCU S.A. and United Breweries Limited (UBL).
The effective tax rate (beia) was 32.8% (2019: 27.6%). The increase was driven by higher operational losses
for which no deferred tax assets could be recognised. Furthermore, the relative effect of permanent items
increased due to the lower profit before tax base.
The net loss for 2020 was €204 million (2019: 2,166 million profit). Net profit (beia) decreased organically by
€1,243 million (49.4%) to €1,154 million. The impact of currency translation and consolidation changes were
negative by €67 million and €53 million.
Earnings per share - diluted decreased to €0.36 (2019: €3.77). Earnings per share - diluted (beia) decreased by
54.3% from €4.38 to €2.00.
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
2020
2019
Operating profit (beia)
2,421
4,020
Amortisation of acquisition-related intangible assets and
exceptional items included in operating profit
(1,643)
(387)
Share of profit/(loss) of associates and joint ventures
(31)
164
Net finance expenses
(590)
(513)
Profit before income tax
157
3,284
The table1 below provides an overview of the exceptional items and amortisation of acquisition-related
intangibles in HEINEKEN's net profit/(loss):
In millions of
2020
2019
Profit/(Loss) attributable to shareholders of the Company
(net profit/(loss))
(204)
2,166
Amortisation of acquisition-related intangible assets included in
operating profit
273
309
Exceptional items included in operating profit
1,370
78
Exceptional items included in net finance expenses/(income)
(26)
16
Exceptional items and amortisation of acquisition-related
intangible assets included in share of profit of associates
and joint ventures
178
64
Exceptional items included in income tax expense
(347)
(64)
Allocation of exceptional items and amortisation of
acquisition-related intangibles to non-controlling interests
(89)
(52)
Net profit (beia)
1,154
2,517
1 Due to rounding, this table will not always cast
The 2020 exceptional items and amortisation of acquisition-related intangibles on net profit and loss amount
to €1,358 million (2019: €351 million). This amount consists of:
- €273 million (2019: €309 million) of amortisation of acquisition-related intangibles recorded in
operating profit.
- €1,370 million (2019: €78 million) of exceptional items recorded in operating profit. This includes nil
exceptional items on revenue (2019: €78 million exceptional benefit on revenue, mainly relating to tax
credits in Brazil), €8 million exceptional excise tax expenses (2019: €2 million), €331 million of restructuring
expenses, largely associated with the EverGreen programme (2019: €91 million), €963 million of impairments
(net of reversal) mainly in Papua New Guinea, Lagunitas, Jamaica and various UK Pubs (2019: €85 million),
€35 million net loss on disposals (2019: €57 million gain on disposals, mainly related to the sale of operating
entities in China and Hong Kong) and €33 million of other net exceptional expenses (2019: €35 million).
- €26 million of exceptional net finance income, mainly related to the release of tax provisions
(2019: €16 million of exceptional net finance expense).
- €178 million of exceptional net expenses (2019: €64 million) included in the share of profit of associates
and joint ventures, mainly relating to impairments of associates and joint ventures of €139 million
(2019: €30 million).
- €347 million (2019: €64 million) in income tax expense, of which the tax impact on exceptional items and
amortisation of acquisition-related intangible assets of €363 million (2019: €57 million) and the exceptional
income tax net loss of €16 million (2019: €7 million exceptional income tax benefit).
- Total amount of eia allocated to non-controlling interests amounts to €89 million (2019: €52 million).
