Financial Review
42
Introduction
78
4,502
4,443
(102)
(35)
3,299
(1,214)
Eia
1,591
887
30,308
54
30,362
28,694
(864)
Eia
Sustainability
Review
Other
Information
Financial
Statements
Report
of the
Supervisory
Board
Report
of the
Executive
Board
Main changes in consolidation
On 7 September 2022, HEINEKEN purchased the remaining shares in Beavertown Brewery in the UK, achieving
full ownership.
On 15 November 2022, HEINEKEN disposed of Société Nouvelle des Boissons Gazeuses (SNBG), its soft drinks,
juice and water business in Tunisia.
On 1 February 2023, HEINEKEN acquired a majority stake in Davidov Hram, a wholesale business in Slovenia.
On 14 April 2023, HEINEKEN obtained control of NBL and on 26 April 2023, of Distell. NBL and Distell have been
combined with Heineken South Africa into a new HEINEKEN majority-owned business ‘Heineken Beverages’.
Distell and NBL are consolidated within HEINEKEN as from those dates.
HEINEKEN applies hyperinflation accounting in Ethiopia and Haiti. Fixed assets are revalued for the inflation
from the time of acquisition to date. The prior year impact from depreciation resulting from the revaluation of
previous years is recorded as a change in consolidation and is excluded from the organic growth calculation. At
the same time, all metrics in the income statement are restated to reflect the inflation level as per the reporting
date. These impacts are recorded as exceptional items.
Revenue
Revenue was €36,375 million, an increase of 4.9% (2022: €34,676 million). Revenue (beia) increased 4.6%
organically to €36,310 million (2022: €34,643 million). Exceptional items in revenue amounted to €65 million
(2022: €33 million), mainly related to hyperinflation accounting adjustments in Ethiopia and Haiti.
Total net other expenses (beia)
Total net other expenses were €27,133 million (2022: €24,436 million).Total net other expenses (beia) were
€25,865 million, up 6.3% on an organic basis driven by inflationary pressures on our cost base, especially on
input and energy costs, and incremental investments behind our brands, capabilities, digitalisation and
sustainability agenda; partially offset by cost savings from our productivity programme.
Net revenue
Net revenue (beia) increased by 5.5% organically, with net revenue (beia) per hectolitre up 10.8% and total
consolidated volume declining by 4.7%. The underlying price-mix on a constant geographic basis was up 10.2%,
driven by pricing for inflation and positive mix effects. Currency translation negatively impacted net revenue
(beia) by €864 million or 3.0%, mainly from the devaluation of currencies in emerging markets partially offset by
a stronger Mexican Peso. Consolidation effects positively impacted net revenue (beia) by €887 million or 3.1%,
mainly from the consolidation of Distell and Namibia Breweries.
On 1 June 2023, HEINEKEN disposed of its licence to brew a brand in the UK.
On 25 August 2023, HEINEKEN announced it completed its exit from Russia.
On 29 September 2023, HEINEKEN completed the sale of soft-drink producer Vrumona in the Netherlands.
On 1 October 2023, HEINEKEN began consolidating Comans Beverages Limited, a beverage wholesale business
in Ireland.
Organic
growth
Currency
translation
Consolidation
impact
Operating profit
Operating profit landed at €3,229 million (2022: €4,283 million), lower due to higher exceptional items and
amortisation of acquisition related intangibles in 2023 amounting to €1,214 million (2022: €219 million) of
which amortisation of acquisition-related intangibles represented €385 million (2022: €333 million) and net
exceptional expense items amounted to €829 million (2022: €114 million net benefit), including an impairment
of €491 million for Heineken Beverages.
The operating profit (beia) organic growth in the head office was driven by the increase in general proceeds
from license fees and services, in line with the revenue growth of our operating companies.
Share of profit of associates and joint ventures
The share of profit of associates and joint ventures amounted to €218 million (2022: €223 million) and includes
the attributable profit from China Resources Beer (Holdings) Co. Ltd. (CR Beer) with a two-month delay
(November 2022 to October 2023). Share of profit of associates and joint ventures (beia) amounted to €270
million, an organic increase of €11 million, reflecting the strong profit growth of CR Beer in China and partially
offset by lower profits from our joint venture partnerships in Africa.
Income tax expense
Total income tax expense reduced from €1,131 million in 2022 to €121 million in 2023, mainly driven by the
recognition of previously unrecognised deferred tax assets in Brazil and partly offset by the non-deductible
goodwill impairment for Heineken Beverages and the loss on the Russia disposal. As a result, the reported
effective tax rate decreased from 28.7% to 5.2%. The effective tax rate (beia) was 26.8% (2022: 27.7%). The
decrease is mainly driven by a lower effective tax rate in Brazil.
Operating profit (beia) grew organically 1.7% with a strong recovery in the second half of the year and with
growth delivered in three of the four regions. Pricing to offset inflation and premiumisation, together with strong
delivery of our productivity programme, more than offset the inflationary pressures in our cost base and
incremental investments behind our growth agenda. Currency translation negatively impacted operating profit
(beia) by €102 million, or 2.3%, mainly driven by the devaluation of currencies in emerging markets being
partially offset by appreciation of the Mexican Peso.
Other net finance expenses were €375 million (2022: €48 million income). Other net finance expenses (beia)
amounted to €343 million, an increase of €336 million on an organic basis. The steep increase is mainly driven
by negative impacts from currency revaluations on outstanding foreign currency payables and the revaluation of
long-term green-energy contracts.
Organic
growth
Currency
translation
Consolidation
impact
Heineken
N.V.
Annual
Report
2023
FY 2022
Net revenue
beia
FY 2023
Net revenue
beia
FY 2023
Net revenue
IFRS
FY 2022
Operating
profit beia
FY 2023
Operating
profit beia
FY 2023
Operating
profit IFRS
Net finance expenses
Net interest expenses were €550 million (2022: €384 million). Net interest expenses (beia) increased organically
by 44.8% to €554 million. The increase reflects a higher average net debt position and a higher average
effective interest rate. The average effective interest rate (beia) in 2023 was 3.4% (2022: 2.8%).
