IFRS 15 20 FEBRUARY 2018 HEINEKEN N.V.
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. 2
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 o cu cust stomers omers 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 3
Excise taxes BEFORE IFRS 15 AFTER IFRS 15 (2018) In countries where excise duties are effectively a production tax, the excise tax is borne by HEINEKEN and will be included in revenue HEINEKEN excludes all excise taxes from Accounting unting 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 A new subtotal called 'Net revenue' will be added in the consolidated income statement, representing the 'revenue' as defined in IFRS 15 Revenue line in consolidated income Presen esentati tation on (after discounts) minus the excise taxes for those countries where the statement excludes excise taxes excise is borne by HEINEKEN 1 . 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 4
Payments to customers BEFORE IFRS 15 AFTER IFRS 15 (2018) HEINEKEN considers most of the payments to customers (e.g. listing fees and marketing support expenses), a deduction of revenue as in Most of HEINEKEN’s payments to most cases the service received cannot be distinguished from the Accounting unting customers are currently recorded as goods delivered. Only when these payments relate to a distinct operating expenses service the amounts will continue to be recorded as operating expenses Total expenses line in consolidated income A reclassification between operating expenses and revenue, reducing Presen esentati tation on statement includes most payments to both revenue and expenses customers 5
Consolidated Income Statement HEINEKEN N.V. as if IFRS 15 had been applicable in 2017 Total impact (1) + (2) on revenue (1) Impact excise taxes New subtotal ‘Net revenue’ (2) Impact payments to customers 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. 6
Key Metrics Overview for 2017 HEINEKEN N.V. 2017FY 2017FY Total Change (Key metrics) (REPORTED) (IFRS 15) +3,865 Revenue(€m) 21,888 25,753 -297 Net Revenue(€m) 21,888 21,591 -297 Net Revenue (beia) (€m) 21,908 21,611 -1 Net Revenue per hl (beia) (€) 87 86 +24 bps Operating profit (beia) margin (%) 17.2 17.4 Marketing and selling expenses as % of -155 bps 13.2 11.6 Net Revenue. +11 bps Capex as % of Net Revenue 7.7 7.8 7
Key Metrics Overview for 2017 Regional Overview AFRICA, MIDDLE EAST AMERICAS ASIA PACIFIC EUROPE & EASTERN EUROPE Reported* IFRS 15 Reported* IFRS 15 Reported* IFRS 15 Reported* IFRS 15 Net Revenue (beia) 3,059 3,031 6,258 6,292 2,996 2,921 10,237 9,990 (€m) Net Revenue (beia) per hl (€) 65 64 79 79 108 106 98 95 Operating Profit 12.7 12.8 19.0 18.9 32.1 32.9 13.4 13.7 Margin (beia) (%) * As reported using revenue before IFRS 15 implementation 8
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