IFRS 15 20 FEBRUARY 2018 HEINEKEN N.V. Disclaimer As per 1 January - - PowerPoint PPT Presentation

IFRS 15

20 FEBRUARY 2018

HEINEKEN N.V.

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Disclaimer

As per 1 January 2018 the new standard on revenue (IFRS 15 ‘Revenue from Contracts with Customers’) is

• applicable. This presentation contains financial information as if IFRS 15 would have already been applicable in
• 2017. The final impact is still under review and as a result the actual restated financial information may differ from

the financial information included in this presentation.

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IFRS 15 – a new standard on revenue recognition

• IFRS 15 ‘Revenue from Contracts with Customers’ is applicable as of 1 January 2018 and supersedes

existing standards and interpretations related to revenue

• HEINEKEN will implement IFRS 15 by applying the full retrospective method, which means that prior

period financial information will be restated

• HEINEKEN concluded that IFRS 15 will not impact the timing of revenue recognition. However, the

amount of recognised revenue will be impacted mainly by exci cise se tax axes es and payme yments nts to

• cu

cust stomers

• mers
• IFRS 15 implementation has no impact on operating profit
• The first report applying IFRS 15 will be the 2018 interim financial statements, to be published on 30

July 2018

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Excise taxes

BEFORE IFRS 15 AFTER IFRS 15 (2018)

Accounting unting

• HEINEKEN excludes all excise taxes from

revenue

• In countries where excise duties are effectively a production tax, the

excise tax is borne by HEINEKEN and will be included in revenue

• In countries where excise tax is fully based on the sales value, the

excise tax is considered to be collected on behalf of third parties, and therefore will remain excluded from revenue Presen esentati tation

• n
• Revenue line in consolidated income

statement excludes excise taxes

• A new subtotal called 'Net revenue' will be added in the consolidated

income statement, representing the 'revenue' as defined in IFRS 15 (after discounts) minus the excise taxes for those countries where the excise is borne by HEINEKEN1. This subtotal will be comparable to the revenue in prior presentation (before IFRS15 implementation)

1 HEINEKEN will disclose in the notes to the consolidated financial statements the excise tax collected on behalf of third parties, which is excluded from revenue

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Payments to customers

BEFORE IFRS 15 AFTER IFRS 15 (2018)

Accounting unting

• Most of HEINEKEN’s payments to

customers are currently recorded as

• perating expenses
• HEINEKEN considers most of the payments to customers (e.g. listing

fees and marketing support expenses), a deduction of revenue as in most cases the service received cannot be distinguished from the goods delivered. Only when these payments relate to a distinct service the amounts will continue to be recorded as operating expenses Presen esentati tation

• n
• Total expenses line in consolidated income

statement includes most payments to customers

• A reclassification between operating expenses and revenue, reducing

both revenue and expenses

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Consolidated Income Statement HEINEKEN N.V.

Next to the €4.162 million of excise taxes included in revenue, €1.431 million of excise taxes is collected on behalf of third parties and excluded from revenue as required by IFRS 15. (2) Impact payments to customers (1) Impact excise taxes Total impact (1) + (2) on revenue New subtotal ‘Net revenue’

as if IFRS 15 had been applicable in 2017

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Key Metrics Overview for 2017

HEINEKEN N.V. (Key metrics)

2017FY

(REPORTED)

2017FY

(IFRS 15)

Total Change Revenue(€m) 21,888 25,753 +3,865 Net Revenue(€m) 21,888 21,591

• 297

Net Revenue (beia) (€m) 21,908 21,611

• 297

Net Revenue per hl (beia) (€) 87 86

• 1

Operating profit (beia) margin (%) 17.2 17.4 +24 bps Marketing and selling expenses as % of Net Revenue. 13.2 11.6

• 155 bps

Capex as % of Net Revenue 7.7 7.8 +11 bps

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Key Metrics Overview for 2017

Regional Overview

AFRICA, MIDDLE EAST & EASTERN EUROPE AMERICAS ASIA PACIFIC EUROPE Reported* IFRS 15 Reported* IFRS 15 Reported* IFRS 15 Reported* IFRS 15 Net Revenue (beia) (€m) 3,059 3,031 6,258 6,292 2,996 2,921 10,237 9,990 Net Revenue (beia) per hl (€) 65 64 79 79 108 106 98 95 Operating Profit Margin (beia) (%) 12.7 12.8 19.0 18.9 32.1 32.9 13.4 13.7

* As reported using revenue before IFRS 15 implementation

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