84
Notes to the Consolidated Financial Statements
2023
2022
114
223
Introduction
(829)
218
4,443
(385)
4,502
(333)
Sustainability
Review
Financial
Statements
Other
Information
Report
of the
Supervisory
Board
Report
of the
Executive
Board
Reconciliation of segment profit or loss
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.
The 2023 exceptional items and amortisation of acquisition-related intangibles recorded in operating profit
amount to €1,214 million, net exceptional expense (2022: €219 million). This amount consists of:
- €385 million (2022: €333 million) of amortisation of acquisition-related intangibles recorded in operating profit.
- €829 million net exceptional expense (2022: €114 million net benefit) recorded in operating profit. This includes:
- a net impairment of €683 million recorded in amortisation, depreciation and impairments, including an
impairment of €491 million for Heineken Beverages (total net impairment reversal in 2022: €132 million)
- €209 million exceptional expense related to the recycling of foreign currency translation reserve upon selling
the Russia disposal group recorded in amortisation, depreciation and impairments and €195 million of
exceptional gain on sale of Vrumona B.V. (Vrumona) recorded in other income
- net restructuring expenses recorded in personnel expenses of €130 million (2022: €70 million)
- €40 million exceptional benefit recorded in other income related to tax credits in Brazil (2022: €44 million net
exceptional benefit as reduction recorded in marketing expense related to tax credits in Brazil)
- €50 million net exceptional expense relating to hyperinflation accounting adjustments (2022: €44 million), of
which €55 million income recorded in revenue (2022: €25 million), €69 million expense in raw materials
consumables and services (2022: €54 million), €32 million expense in amortisation, depreciation and
impairments (2022: €13 million) and €4 million in personnel expenses (2022: €2 million)
- €8 million of other exceptional net benefits (2022: €52 million of other net exceptional benefits)
Accounting estimates and judgements
Due to the complexity and variety in tax legislation, significant judgement is applied in the assessment of
whether excise tax expenses are borne by HEINEKEN or collected on behalf of third parties.
HEINEKEN makes estimates when determining discount accruals in revenue at year-end, specifically for
conditional discounts. Refer to note 7.3 for more explanation on how discount accruals are estimated.
The first four reportable segments as presented in the segmentation tables are HEINEKEN’s business regions.
These business regions are each managed separately by a Regional President, who reports to the Executive
Board, and is directly accountable for the functioning of the segment’s results, assets and liabilities. The Head
Office operating segment falls directly under the responsibility of the Executive Board. The Executive Board
reviews the performance of the segments based on internal management reports monthly.
Segment results, assets and liabilities that are reported to the Executive Board include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis. Unallocated result items comprise net
finance expenses and income tax expenses. Unallocated assets mainly comprise deferred tax assets.
Unallocated liabilities mainly comprise borrowings and deferred tax liabilities.
Performance is measured based on operating profit (beia), as included in the internal management reports that
are reviewed by the Executive Board. Beia stands for 'before exceptional items and amortisation of acquisition-
related intangibles'. Exceptional items are defined as items of income and expense of such size, nature or
incidence, that in the view of management their disclosure is relevant to explain the performance of HEINEKEN
for the period. Exceptional items include, among others, impairments of goodwill and fixed assets (and reversal
of impairments), gains and losses from acquisitions and disposals, redundancy costs following a restructuring,
past service costs and curtailments, hyperinflation accounting adjustments, the tax impact on exceptional items
and tax rate changes (the one-off impact on deferred tax positions).
Accounting policies
Segment reporting
Operating segments are reported consistently with the internal reporting provided to the Executive Board, which
is considered to be HEINEKEN’s chief operating decision-maker. An operating segment is a component of
HEINEKEN that engages in business activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of HEINEKEN’s other components. All operating
segments’ operating results are reviewed regularly by the Executive Board to make decisions about resources to
be allocated to the segment and to assess its performance, and for which discrete financial information is
available.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment and intangible assets other than goodwill.
HEINEKEN has multiple distribution models to deliver goods to end customers. There is no reliance on major
clients. Deliveries to end consumers are country dependent and include deliveries via own wholesalers and pubs,
direct to customers and via third-party distribution. As such, distribution models are country-specific and diverse
across HEINEKEN. In addition, these various distribution models are not centrally managed or monitored.
Consequently, the Executive Board does not allocate resources or assess performance based on business type
information. Accordingly, no segment information on business type is provided.
Operating profit and operating profit (beia) are not financial measures calculated in accordance with IFRS.
Operating profit (beia) is used to measure performance as management believes that this measurement is the
most relevant in evaluating the results of the segments. Beia adjustments are also applied to other metrics. The
presentation of these financial measures may not be comparable to similarly titled measures reported by other
companies due to differences in the ways the measures are calculated. Wherever appropriate and practical,
HEINEKEN provides reconciliations for relevant GAAP measures.
Inter-segment transfers or transactions are determined on an arm’s length basis. As net finance expenses and
income tax expenses are monitored on a consolidated level (and not on an individual regional basis) and
Regional Presidents are not accountable for that, net finance expenses and income tax expenses are not
provided for the reportable segments.
Heineken
N.V.
Annual
Report
2023
(925)
2,522
(336)
4,170
In millions of
Operating profit (beia)
Amortisation of acquisition-related intangible assets recorded in operating
profit
Exceptional items included in operating profit
Share of profit of associates and joint ventures
Net finance expenses
Profit before income tax
