2
In this year’s report
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Report of the
Executive Board
Chief Executive’s Q&A
Performance highlights
Key figures
Our business priorities:
Executive Team
Our Purpose
Our EverGreen strategy
Building an adaptable future-
proof business
Shape the future of beer
and beyond
Fund the growth, fuel the profit
Raise the bar on sustainability
and responsibility
3
5
6
7
8
9
10
11
16
18
Regional review:
Africa, Middle East &
Eastern Europe
Americas
Asia Pacific
Europe
Risk Management
Financial Review
Corporate Governance statement
Report of the
Supervisory Board
To the Shareholders
Remuneration Report 2023
Become the best-connected brewer 23
Unlock the full potential
of our people
27
Financial
Statements
30
Contents
31
32
33
34
35
41
45
53
61
Consolidated Income Statement
Consolidated Statement of
Other Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Cash Flows
Consolidated Statement
of Changes in Equity
Notes to the Consolidated
Financial Statements
Heineken N.V. Income Statement
Heineken N.V. Balance Sheet
Heineken N.V. Shareholders’ Equity
Notes to the Heineken N.V.
Financial Statements
Sustainability Review
Introduction and Context:
Raise the bar
Our impact from Barley to Bar
Stakeholder engagement
and materiality
Climate-related risks assessment
(TCFD analysis)
74
75
75
76
77
78
79
125
126
127
128
132
133
134
136
Other
Information
Brew a Better World 2030 strategy:
Appropriation of Results
Brew a Better World 2030 strategy 143
Independent Auditor’s Report
Assurance Report of the
Independent Auditor (of
non-financial indicators)
Shareholder Information
Bondholder Information
Historical Summary
Glossary
Disclaimer and
Reference Information
197
198
205
207
210
211
214
216
The PDF and iXBRL viewer copy of the annual
report of Heineken N.V. for the year 2023 is not
in the ESEF-format as specified by the European
Commission in Regulatory Technical Standard
on ESEF (Regulation (EU) 2019/815).
The ESEF reporting package is
available at:
www.theheinekencompany.com/
investors/results-reports-webcasts-
and-presentations
Find more information online at:
theHEINEKENcompany.com
Our Brew a Better World 2030
goals and progress
Environmental:
Reach net zero carbon by 2040
Maximise circularity
Towards healthy watersheds
Biodiversity
Environmental data table
Social:
Embrace inclusion and diversity
A fair and safe workplace
Positive impact in our communities
Responsible:
Always a choice
Address harmful use
Make moderation cool
Foundation:
Responsible business conduct
Respecting human rights
Disclosures:
WEF metrics and disclosures
Other climate-related disclosures
EU taxonomy
Reporting basis of
non-financial indicators
144
148
152
154
157
158
160
161
164
167
168
168
169
170
172
178
179
182
3
Chief Executive’s Q&A
Delivering
our EverGreen
strategy
Heineken
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“I am proud of the resilience of our business
and our people and encouraged by our
progress on our EverGreen strategy.”
Dolf van den Brink
Chief Executive Officer
What are your top reflections
over 2023?
After a strong 2022, 2023 proved to be challenging.
I am proud of the resilience of our business and our
people and encouraged by our progress on our
EverGreen strategy. In 2023 we welcomed three
new Executive Team members. Joanna Price joins us
as Chief Corporate Affairs Officer, Bram Westenbrink
as Chief Commerce Officer and Glenn Caton as
President of the Europe region. Their fresh
perspectives and immense combined knowledge
and experience have already brought new insights
and energy to the company.
We continue to make progress on our EverGreen
priorities, while adapting to the macroeconomic and
geopolitical volatility. We built on momentum across
our five key strategic pillars: emphasising consumer
and customer-centricity as we shape the future of
beer and beyond; growing productivity and a cost-
conscious culture; boosting decarbonisation of our
production network globally; boosting digitisation of
all our processes to become the best-connected
brewer; and investing in our talent and capabilities to
ensure a workforce that is highly motivated and
capable, fostering the right culture and maintaining
robust organisational health.
In this way we are future-proofing HEINEKEN as a
learning, adapting and more agile company to deliver
superior, balanced growth in a fast-changing world.
What are the key highlights of
EverGreen and your 2023 business
performance?
This year we continued investing in our brands and
capabilities. We gained or held volume market share
in over half of our markets as volume performance
moderately improved quarter by quarter. We
exceeded our productivity commitments, delivering
€0.8 billion of gross savings in 2023 and achieved
operating profit growth in three out of four regions.
We made excellent progress with our digital business-
to-business platforms and now capture close to
€11 billion of gross merchandise value. We increased
our investments in our brands, capabilities, digital
programs, and sustainability initiatives. We also
further evolved our portfolio footprint with the
acquisition of Distell and Namibia Breweries to
form Heineken Beverages, a new beverages champion
for Southern Africa, and exit from Russia in the
third quarter.
Also this year, the Heineken® brand celebrated its
150-year anniversary and delivered another year of
volume growth, driven by continued momentum of
Heineken® 0.0 and Heineken® Silver.
The beverage industry is evolving –
how is HEINEKEN shaping the future
of beer and beyond?
Our Dream is to shape the future of beer and beyond
to win the hearts of consumers. With a long history as
successful brand builders to pave the way, in 2023 we
continued to invest in expanding growth opportunities
beyond beer, experimenting with innovative product
concepts and new brand propositions.
We aim to stay relevant to younger legal drinking age
consumers with brands that embody authenticity,
diversity and a strong desire for connection, such as
Birra Moretti across Europe and Tiger in Asia Pacific.
With our premium brands led by Heineken® targeting
Gen Y consumers in many markets, our strategy
remains focused on the fundamentals of delighting
consumers to build brand power. We are increasingly
building direct connections through premium digital,
social and event engagements. In 2023 we continued
to expand Heineken® Silver to more markets,
specifically the US and Mexico. The support in the US
culminated with the sponsorship of the F1™ first race
in Las Vegas. Heineken® 0.0 grew in the double-digits
in 16 markets, further consolidating its position as the
#1 non-alcoholic beer brand globally.
We remain committed to win with our expanding
portfolio of refreshing beyond beer brands. For
instance, Tiger Soju, the smooth Tiger lager recipe
infused with a touch of soju in a range of natural
flavours, was launched in Vietnam and Singapore this
year. Also this year, we further grew Zagg in Nigeria, a
malt-based energy drink that provides a powerful
functional offering: the benefits of malt on top of
other energy boosting properties, differentiating us
from traditional energy players. Red Stripe celebrated
the launch of its new Rum Punch and Rum Mojito
canned cocktails during the culmination of Caribbean-
American Heritage Month. And for beyond beer in the
no-alcohol space, Clash’d is our new soft drink from
Brazil, crafted through an artisanal quality process
which elevates the flavour.
We will continue to leverage our brands to promote
industry-leading messaging on responsible
consumption and moderation. In 2023, HEINEKEN’s
net zero and FLAG (Forest, Land and Agriculture)
targets were approved by the Science Based Targets
initiative (SBTi).
What initiatives has HEINEKEN
implemented to promote diversity,
equity, and inclusion within the
company and its workforce in 2023?
Diversity, equity and inclusion is a key priority at
HEINEKEN. Through unlocking the full potential
of our people and organisation, we’re on a journey
to create a workplace and culture that attracts,
develops and retains talent. In 2023 our focus
remained on three core pillars: fostering courageous
leadership, promoting an inclusive culture and
creating equal opportunities.
We have set ourselves an ambition of reaching
40% of women in senior manager positions by
2030 and we are making strong progress. As of this
year, 99.8% of our people managers globally have
been trained on inclusive leadership. Also this year,
we established a new Women in Supply Chain
network, joining the likes of our Women Interactive
Network and Women in Sales, global initiatives to
level the playing field for women in leadership at
HEINEKEN. Our multiple employee resource groups,
including HOP (Heineken Open and Proud) Women
and Allies, continued to thrive across functions and
operating companies.
What is the outlook for HEINEKEN?
As we continue to advance on our EverGreen journey,
we remain committed to our medium-term ambition
to deliver superior growth, balanced between volume
and value, and to drive continuous productivity
improvements to fund investments behind EverGreen
and enable operating profit (beia) to grow ahead of
net revenue (beia) over time.
Our volume performance at the closing of 2023 was
under pressure from external factors, with a moderate
sequential improvement quarter by quarter. For 2024,
we expect the macroeconomic environment and
geopolitical developments to remain a factor of
uncertainty that may impact our business. In this
context, our focus going forward will be on restoring
our volume growth by continuing to invest behind our
brands, innovations, commercial capabilities and
route-to-consumer.
Overall, we expect to grow operating profit (beia)
organically in the range of a low- to high-single-digit.
The wide range corresponds to the volatility in geo-
political and economic conditions we have also
witnessed in the past months and the fact that we
will continue to invest behind EverGreen for long-term
sustained value creation.
Wishing you all the joy of true togetherness in 2024!
4
Chief Executive’s Q&A
Heineken
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2023
Introduction
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Board
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of the
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Statements
Sustainability
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Other
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How did HEINEKEN create value
through its strategic initiatives in 2023?
We measure progress on long-term value creation
through our Green Diamond model. Its four quadrants
– growth, capital efficiency, sustainability and
responsibility, and profitability – guide us as we work
towards our long-term ambitions. Our aim is to strike
a balance between short-term delivery and long-term
sustainability, between top-line growth and bottom-
line value creation. Ultimately, we aim for long-term
value creation.
For instance, this year we announced the investment
in Mexico of €430 million to build a state-of-the-art
brewery in the Yucatán, with focus on sustainable
brewing practices and job creation, benefiting local
communities with an eye on long-term value.
HEINEKEN Mexico expects to create over 2,000 new
direct and indirect job opportunities. We also further
evolved our portfolio footprint with the acquisition
of Distell and Namibia Breweries to form Heineken
Beverages, a new beverages champion for
Southern Africa.
Strong pricing to offset very high input and energy
cost inflation and volatile macro-economic conditions
in some key markets affected our volume
momentum.. Notwithstanding these difficult
conditions, we continued investing in our brands and
capabilities. We gained or held volume market share in
over half of our markets as volume performance
moderately improved quarter by quarter. We recorded
operating profit (beia) organic growth in 3 out of 4
regions while we adapted to the challenges in Asia
Pacific.
How is HEINEKEN leveraging digital
technologies and innovation to
enhance its operations in 2023?
HEINEKEN has been proactively investing in digital
technologies and innovations to enhance our
operations in 2023. Data-driven insights and AI
applications have been strategically deployed
across the organisation. These technologies have
significantly improved sales recommendations and
enhanced brewery efficiency, contributing to a more
streamlined and efficient experience for both our
teams and customers.
For example, AIDDA, our AI application to advise
sales, is now deployed in five markets where it can
generate product recommendations, predict customer
churn, identify price discrepancies, and suggest
optimal sales routes among other features.
We have significantly stepped up our capabilities in
eCommerce and data and analytics, capturing and
organising our data in a more effective way that
enables us to hone insights and unlock more value to
the benefit of both our customers and HEINEKEN’s
sales organisation. We continue to expand our
business-to-business digital (eB2B) platforms. By the
end of the year the platforms had captured close to
€11 billion in gross merchandise value, connecting
with 700,000 active customers in fragmented,
traditional channels. We progressed with the
migration of our eB2B platforms under a single brand
name and identity: eazle, business made easy. As we
develop towards meaningful scale in our key markets,
we aim to unlock better features, improved customer
experience and increased efficiency.
How is HEINEKEN progressing towards
its Brew a Better World 2030 strategy
and meeting its sustainability goals?
We are now three years into developing and executing
our Brew a Better World 2030 strategy. We are
learning as we implement at scale, understanding the
enablers and challenges that need to be addressed
and developing the right capabilities to deliver.
We reduced scope 1 and 2 emissions by 34%
compared to the 2018 baseline. We are also driving
progress on scope 3 by engaging strategic suppliers
and using our scale to support their transition to
renewable energy. Our 2030 ambition is to reduce
water usage to 2.6 hectolitre per hectolitre (hl/hl) in
water-stressed areas and 2.9 hl/hl worldwide. We have
improved our global average water usage from 3.3 hl/
hl to 3.2 hl/hl compared to last year. In addition, 28 of
our 32 sites in water-stressed areas have now started
water balancing projects and 28% of these sites are
fully water balanced. We have grown from 19%
women in our senior leadership in 2017 to 28% in
2023 (2022: 27%). Finally, 100% of our markets had a
partnership in place to address the harmful effects of
alcohol in 2023.
sediting, intention to reduce text to two pages
5
Performance highlights
Heineken
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2023
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Consolidated beer volume
in millions of hectolitres
242.6mhl
Heineken® volume
in millions of hectolitres
56.3mhl
Net revenue
(beia)
in millions of €
€30,308m
Operating profit
(beia)
in millions of €
€4,443m
Operating profit
(beia) margin
in percentages
14.7%
Net profit
(beia)
in millions of €
N
e
t
€2,632m
p
r
o
f
i
t
(
b
e
i
a
)
i
Gender balance
28%
of our senior
management positions
were held by women
Carbon emissions
34%
reduction of scope 1 and 2
emissions vs. 2018
14%
of Heineken®
media spend
invested in our responsible
consumption campaigns
Average water
usage (hl/hl)
36%
improvement
compared to 2008
2019:
241.4
2020:
221.6
2021:
231.2
2022:
256.9
2023:
242.6
2019:
41.8
2020:
41.8
2021:
48.8
2022:
54.9
2023:
56.3
6
Key figures1
Heineken
N.V.
Annual
Report
2023
Consolidated results
In millions of €
Revenue
Net revenue
Net revenue (beia)
Operating profit
Operating profit (beia)
Net profit
Net profit (beia)
EBITDA (beia)
Introduction
Dividend (proposed)
Free operating cash flow
Balance sheet
In millions of €
Total assets
Shareholders' equity
Net debt position
Market capitalisation
Report
of the
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of the
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Statements
Sustainability
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Other
Information
2023
36,375
30,362
30,308
3,229
4,443
2,304
2,632
6,541
978
1,759
2023
55,153
20,056
15,835
51,852
2022
34,676
28,719
28,694
4,283
4,502
2,682
2,836
6,444
995
2,409
2022
52,406
19,551
13,531
50,621
Per share
2023
2022
Change in %
Weighted average number of shares – basic
563,448,845
575,563,505
Change in %
4.9%
5.7%
5.6%
Net profit
Net profit (beia)
(24.6%)
Dividend (proposed)
(1.3%)
Free operating cash flow
(14.1%)
Shareholders' equity
(7.2%)
Share price
4.09
4.67
1.73
3.12
35.60
91.94
4.66
4.93
1.73
4.19
33.97
87.88
(2.1%)
(12.2%)
(5.3%)
0.0%
(25.5%)
4.8%
4.6%
(2.1%)
(5.1%)
1.5%
Weighted average number of shares – diluted
563,979,620
576,026,120
(1.7%)
Net profit (beia) – diluted
4.67
4.92
(27.0%)
Employees
Change in %
Average number of employees (FTE)
2023
89,732
2022
86,390
Change in %
3.9%
5.2%
2.6%
17.0%
2.4%
Ratios
Operating profit (beia) as a % of net revenue (beia)
Net profit as % of average equity attributable to
equity holders of the Company
Net debt/EBITDA (beia)
Dividend % payout
Cash conversion ratio
2023
14.7%
11.6%
2.4
37.2%
61.4%
2022
15.7%
14.5 %
2.1
35.1%
75.3%
Change
-103 bps
(2.9)
0.3
2.1
(13.9)
1 (beia) is before exceptional items and amortisation of acquisition-related intangible assets. Please refer to the Glossary section for an explanation of non-
GAAP measures and other terms used throughout this report.
7
Executive Team
Heineken
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Introduction
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1 Dolf van den Brink
Chairman Executive Board and CEO
2 Harold van den Broek
Member Executive Board and CFO
3 Marc Busain
President, Americas
4 Glenn Caton
President, Europe*
5 Roland Pirmez
President, Africa, Middle East
& Eastern Europe
6 Jacco van der Linden
President, Asia Pacific
7 Bram Westenbrink
Chief Commercial Officer
8 Joanna Price
Chief Corporate Affairs Officer
9 Yolanda Talamo
Chief People Officer
10 Magne Setnes
Chief Supply Chain Officer
11 Ronald den Elzen
Chief Digital & Technology Officer
* Glenn Caton succeeded Soren Hagh as
President Europe as per 1 January 2024.
The Executive Team consists
of the two members of the
Executive Board, the four
regional Presidents and five
Chief Officers. Its members
are accountable for the global
agendas of their functions,
working closely with our
operating companies.
8 Our Purpose
Heineken
N.V.
Annual
Report
2023
Beer has been bringing people together for thousands of years.
Since 1864, HEINEKEN has been doing its part to put a smile on
consumers’ faces while continuously renewing and adapting, brewing
connections that ignite joy, create memories and fuel happiness.
We think in generations and deliver long-term, sustainable value
creation. Our core reason for being, shaping our strategy and
inspiring our people:
We brew the
joy of true
togetherness
to inspire a
better world
Introduction
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9 Our EverGreen
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EverGreen is our strategy to deliver superior
and balanced growth for our HEINEKEN
business. It has been built on our value
creation model, which we call the Green
Diamond. This value creation model puts
growth, profit and capital on equal footing
with sustainability and responsibility.
Our Values
Our Values are what we stand for:
Passion
for consumers and
customers
Care
for people and planet
Courage
Enjoyment
to dream and pioneer
of life
Our Dream
Shaping the
future of beer
and beyond to
win the hearts
of consumers
Our best days are ahead of us as we continue to deliver
superior and balanced growth with beer and beyond.
Our Green Diamond
Using the lens of the Green Diamond we want to be
clear on ‘what winning looks like’. We aim to get the
balance right between short-term delivery and long-
term sustainability and between top-line growth and
overall stakeholder value creation.
The Green Diamond encapsulates
our balanced ambition including
drivers on Growth, Profitability,
Capital efficiency and
Sustainability and Responsibility.
At its heart EverGreen is
a shift from superior growth
to superior and balanced growth.
10 Building an adaptable
future-proof business
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EverGreen represents our multi-year strategy, allowing
us to adapt to a fast-changing world and grow stronger.
It is a journey of both continuity and change, building
on what has made us great and what is needed next.
True to our ambitions, it meets short-term challenges
and will ensure the long-term sustainability of our
business to create lasting value for our stakeholders.
We are future-proofing our business with the following business priorities:
Shape the future
of beer and
beyond
Fund the growth,
fuel the profit
Raise the bar
on sustainability
and responsibility
Find out more
Page 11
Find out more
Page 16
Find out more
Page 18
Become the
best-connected
brewer
Unlock the full
potential of our
people
Find out more
Page 23
Find out more
Page 27
11 Shape the future
Heineken
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2023
of beer and beyond
We aim to drive superior balanced growth by shaping the future of
beer and beyond, by putting our consumers and customers at the
heart of everything we do. We are focused on premiumisation,
led by Heineken® and a portfolio of global and local brands.
We are innovating to grow the category, extending beer into non-
alcoholic, flavoured and less bitter variants, and exploring beyond
beer with cider and other refreshing alcohol offers. This will ensure
our portfolio evolves to meet new and changing consumer needs
and captures new growth opportunities.
We continue to digitise our route-to-consumer. We have ambitiously
grown our eB2B business and launched eazle which will help our
customers to make it easier to run and grow their business.
“To win the hearts of our consumers, we are
premiumising led by Heineken® and expanding our
categories with a strong innovation agenda,
meeting changing consumer and
customer demands.”
Bram Westenbrink
Chief Commercial Officer
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Shape the future of beer and beyond
Driving premiumisation at
scale, led by Heineken®
The Heineken® brand continues to grow across the
world, focusing on building more meaningful
connections with its consumers, expressing our
personality as the most open-minded brand in the
world. Our goal is to be the beer brand of choice for
Gen Z by 2030. The Heineken® brand continues to
establish itself as a protector of quality socialising,
finding opportunities to provoke a more open and
inclusive world. Heineken® 0.0 remains the overall
leader in non-alcoholic beers globally.
The growth of the brand aligns with our growing
responsible consumption impact, which is seen
through our F1™ sponsorship, as well as through
our partnership with three-time world champion
Max Verstappen and his F1™ team Oracle
Red Bull Racing.
Heineken® 0.0 remains the overall leader in
non-alcoholic beers globally.
In 2023 we continued to expand Heineken® Silver,
specifically to the US and Mexico, now totalling 50
markets. The support in the US culminated with the
sponsorship of the F1™ first race in Las Vegas. In the
Asia Pacific region, Heineken® Silver continues to lead
the growth, leveraging the taste appeal and the
brand’s cool and premium credentials.
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Heineken® driving meaningfulness,
sustainability and responsibility
Our global partnerships with F1™ and Max Verstappen
inspired our team to push beyond the physical
racetrack onto the virtual racetrack. In August 2023
we launched Player 0.0, a simulation-racing series that
held local tournaments around the world before
hosting a global final. The final took place in
Amsterdam in early December 2023, and four winners
from Canada, Mexico, Brazil and the Netherlands had
the chance to race Max himself, with the winner
crowned as the Player 0.0 champion. This was a bold
step into the social world of gaming and another way
to send out the message of responsible consumption.
In support of our ‘Cheers to All Fans’ inclusivity
campaign, in 2023 we enacted ‘The Social Swap’,
a social experiment where two neutral pundits
(one man and one woman) secretly switched their
social media accounts for five days to highlight
how women’s opinions are unfairly dismissed in
football with toxic remarks. The results showed
that the woman’s account, while secretly run by a
man, still received five times more online abuse.
This sparked many conversations on social media
around gender bias in football culture. The campaign
was applauded by the industry and strengthened the
position of Heineken® as a key and meaningful player
in the football industry.
Heineken® was recognised once again at the Cannes
Lions, the prestigious Festival of Creativity. Heineken®
was awarded 12 Bronze Lions, seven Silver Lions and
one outstanding Gold Lion for The Closer campaign.
It was voted the #1 most creative brand in the
alcoholic drinks category and #3 most creative brand
of the year across all categories.
150 years of good times
2023 saw the 150th Anniversary of the Heineken®
brand, a milestone that was celebrated in more than
190 countries in a truly global way. In the words of
Freddy Heineken: “We don’t sell beer, we sell
gezelligheid.” The occasion brought our Heineken®
DNA to life, fully encompassed in the theme 150
Years of Good Times, One Way or Another.
With the large number of markets participating, and
further activities expected to take place in 2024, this
was the most ‘glocal’ (globally local) campaign the
brand has ever seen. From debuting Boiler Rooms in
Singapore to fashion partnerships with MGSM in Italy
and Adidas in Brazil, Heineken®’s 150th Anniversary
good times made headlines – over 1,000 of them with
the Heineken® brand name featured, generating over
3.3 billion impressions with 98% being neutral or
positive in sentiment. The campaigns and elevated
experiences continue to focus on premium quality,
good times, open-mindedness and offering
consumers a choice to drink Heineken® Original,
Heineken® 0.0 or Heineken® Silver. All of these themes
will continue in the future as we further drive
meaningful differentiation.
13
Shape the future of beer and beyond
Heineken
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International brands
Amstel – The spirit of Amsterdam
2023 was a year in which Amstel continued to
outperform on revenue and equity growth, with
volume growth in high-single digits. Amstel is the
second-largest international beer brand in our
portfolio in the Europe and the Africa, Middle East
& Eastern Europe regions, and it is the third-largest in
the Americas. Amstel is available in over 110 markets
across the world.
Amstel’s global positioning of welcomeness and
inclusion resonates across the world while innovations,
such as Amstel Ultra in the Americas and the new
Amstel Vibes in Brazil, boost Amstel’s performance.
Amstel’s ambition remains: To welcome consumers
into the world of international and premium beer,
owning the accessible premium opportunity.
Birra Moretti – Enjoy life’s simple
pleasures
Born in 1859 in Udine in Italy, Birra Moretti brings
an authentic taste of Italy to consumers, reminding
them to savour life’s simple pleasures. Available in
over 40 markets globally, the brand is one of the
fastest growing premium beer brands in its heartland
of Europe, driving incremental category value and
volume, and shaping the future of beer. In 2023
Birra Moretti continued its international range
expansion, launching Sale di Mare – an unfiltered
lager enriched with a hint of Italian sea salt. This
unique combination creates a beautifully refreshing
beer that is full of flavour, perfect for an aperitivo
moment and food pairing.
Birra Moretti also launched the ‘Live Italian’ series on
Amazon Prime. This innovative mini-series welcomed
three celebrities to Birra Moretti’s home to experience
authentic Italian activities like cooking, music and
sports. Each episode transported viewers to Italy and
inspired them to embrace life’s simple pleasures and
make the most of the things that really matter.
Tiger – Feel the twist
Since 1932, Tiger has been inspiring consumers
around the world to ignite their inner tigers, making
Tiger the #1 international premium beer from Asia.
Tiger is now available in 60 markets, having been
rolled out in Indonesia this year. Tiger Crystal, the line
extension marked by its unique brewing process called
‘Cold Suspension’, is growing double-digits in volume
across Asia.
In 2023, Tiger expanded beyond beer, launching
Tiger Soju infused lager with the intent to bring the
Tiger brand to younger generations. Tiger Soju is an
easy-to-drink lager infused with a touch of soju in a
range of natural flavours, bringing a hint of sweetness
and a refreshing beer aftertaste, uncaging a bold new
Tiger experience.
Launching a new product unknown to any audience,
Tiger needed to be clear about what Tiger Soju
infused lager brings to the table. It is a bold twist on
something familiar: Tiger beer infused with soju spirit.
To celebrate this collision of Asian cultures, Tiger
partnered with G-Dragon (leader of BigBang), a
renowned South Korean artiste and international
trendsetter at the forefront of music, fashion and
culture. In the campaign, G-Dragon leads the way
through a portal to discover a bold new twist and a
place where Asia's cultures collide, opening minds to
an entirely new experience and taste.
Lagunitas – Weirdly original
Lagunitas brews weirdly original beverages for weirdly
original people. Born in Northern California in 1993
on a kitchen stove, Lagunitas has since been made
available in more than 40 markets. In 2023 the brand
leaned into its uniqueness and originality with the
new ‘Weirdly Original’ campaign, which highlighted
consumer favourites like the flagship IPA and
Maximus. Lagunitas Hoppy Refresher, a zero alcohol
sparkling hop water that continues to be the US
market leading Hop Water product, rolled out new
Berry & Lemon and Blood Orange flavours this year.
The brand also brought out new packaging to better
reflect its quirky personality, featuring the famous
Lagunitas dog and improving visibility on
store shelves.
14
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Sol – Live from the Sunny Side
Sol believes that sun-powered positivity brightens our
world. Now available in over 50 markets, Sol offers
simple unwinding without overthinking for our
aspirational Gen Z audience group. They are change
makers who stand up to the fear, uncertainty and doubt
of modern times, channelling their energy into positive
actions, combating whatever challenges the world
throws at them. Sol is a brand that shares their values
and provides them with sun-powered optimism. 2023
saw the continuation of the ‘L-I-V-E from the Sunny
Side’ campaign, which broadcasts this message.
Edelweiss – Feel the Alps
Edelweiss is a modern take on a centuries-old wheat
beer recipe, crafted with all-natural ingredients and
infused with a subtle refreshing hint of mountain
herbs (such as sage, coriander and elderflower). It
provides an elevated drinking experience that delights
all the senses. The original Edelweiss wheat beer is
available in six markets. In 2023, Edelweiss Peach and
Red Berries were introduced in the Taiwan market.
Building on the success of last year's award-winning
campaign ‘Feel the Alps’, Edelweiss continues to push
the boundaries of beer communication. Drawing
inspiration from the rejuvenating alpine vistas of
Edelweiss’ origins, the campaign offers viewers a
sensorial journey that captures the essence of the
Edelweiss experience.
Premiumisation
Premium beer volume has shown growth in the
majority of our markets, led by Heineken®. Across
2023 we have been building out our premium
portfolio of international brands, complementing
Heineken® by connecting with an even more diverse
range of consumer needs through new line extensions
and through new premium ways of communicating
with our consumers.
For instance, this year Tiger entered new territory with
Tiger Soju Infused Lager, a bold twist on something
familiar, uncaging a new premium Tiger experience.
The brand also partnered with fashion designer Izzy
Du to create the first summer puffer jacket that keeps
the body temperature cool, lowering it by up to five
degrees Celsius using cold beer cans, perfectly pairing
beer with the premium fashion industry.
With Birra Moretti targeting Gen Y consumers in many
markets, our strategy remains focused on the
fundamentals of delighting consumers to build brand
power, but increasingly building direct connections
through premium digital, social and event
engagements. Activities such as ‘Piazza Birra Moretti’
or ‘Slice of Italy’ invite consumers to experience the
elevated Italian life.
Desperados – #InclusiveDancefloors
Desperados continues to be a strong example of our
forward movement in premiumisation. The spirited
beer brand is now available in over 30 markets
globally, with the zero alcohol line extension
Desperados Virgin available in six markets.
We believe that true togetherness happens when you
feel respected, safe and included, and Desperados has
been working to ensure party-goers feel exactly this on
a night out.
In 2023 we introduced the Doorperson Diploma,
part of Desperados’ larger F.R.E.E. platform aimed at
Fostering Respect, Equity and Empowerment on
the dance floor.
Working together with various partners, Desperados
aims to educate security staff and make nightlife safer
and more inclusive for all, ensuring everyone can
dance without worry. Let's come together to
#ProtectTheParty and create #InclusiveDancefloors
for everyone.
According to research by Desperados, over three-
quarters of people cite dancing as a source of
happiness. Hence the revamped launch in 2023 of
Desperados Dance Club, a dance-powered app
allowing people to dance from anywhere, at any time.
App users turn dance steps into rewards and cash for
charities such as Stonewall and Women in Music in
another bid to make dance floors a safer and more
inclusive space for all.
15
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Explore beyond beer
Stretching beyond beer
In 2023, we have remained committed to win
with our expanding portfolio of refreshing brands
beyond beer.
For instance, Zagg is a malt-based energy drink that
provides a powerful functional offering: the energy
of malt on top of other energy boosting properties,
differentiating us from traditional energy players.
This year we fuelled its growth even further. The brand
was launched in Nigeria towards the end of 2022 in a
challenging market situation. However, it was able to
rapidly achieve significant market share growth
supported by a through-the-line activation plan. Zagg
expanded its footprint this year to Congo Brazzaville
and Sierra Leone, demonstrating the strong potential
to expand further in the region and beyond. ‘That’s
Our Kind of Energy’ is the first-ever Zagg campaign
that, through people-centred stories, engages the
consumer and further drives differentiation and
brand affinity.
Additionally, in 2023 Red Stripe celebrated the launch
of its new Rum Punch and Rum Mojito canned
cocktails during the culmination of Caribbean-
American Heritage Month by hosting its DanceHall of
Fame, a celebration of Caribbean music and culture.
Amstel Vibes line extension was also
launched in Brazil.
Leading the cider category
Cider volume closed the year at 7.1 million hectolitres
following the acquisition of Distell in South Africa.
Volume declined on an organic basis, driven by the
UK. Nonetheless, cider is facing positive momentum
in the Mexican market, in Australia, and is on a global
journey to return to growth. In the UK home market,
2023 has seen total cider volume share return to
growth in a declining market, driven by continued
success of Inch’s and Old Mout. Strongbow is
improving following a brand relaunch, new flavour
innovation and significant marketing investment. In
South Africa, our cider portfolio outperformed the
category and strengthened our leadership position,
driven by the strong performance of Savanna..
Pioneer choice in low- &
no-alcohol
Zero alcohol is no longer just for Dry January.
Consumers’ reasons for moderation are changing
and regular alcohol consumption is decreasing with
younger generations. The global trend for wellness
continues, and we see continued growth in the
hydration segment, offering healthy adult
refreshment without the compromise on taste. The
non-alcoholic beer and cider portfolio grew volume by
a mid-single-digit led by Heineken® 0.0, growing in the
double-digits in 16 markets, further consolidating its
position as the #1 non-alcoholic beer brand globally.
We believe you should always have a choice of non-
alcoholic beverages available. Wherever you can buy
Heineken®, you can also find Heineken® 0.0. Our great
portfolio of global and local brands offering 0.0
options continues to grow, with favourites already
including Amstel Oro 0.0 Tostada, Birra Moretti Zero
and Desperados Virgin 0.0. In 2023 we launched
Tecate 0.0 in Mexico.
In 2023 we also continued to innovate and extend 0.0
options beyond beer. Clash’d is our new soft drink
from Brazil that goes through an artisanal quality
process which elevates the flavour. Unlike anything
you’ve ever tasted, it can be found in the refreshing
flavours of golden apple-lemongrass-mint, Sicilian
lemon-strawberry-ginger, and red fruits-hibiscus.
16 Fund the growth,
fuel the profit
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Our growth algorithm seeks to deliver superior, balanced growth
enabled by investments in innovation, in brand power, behind our
digital transformation, in new capabilities and in making our
business more sustainable. To fund this, we are structurally
driving productivity across all parts of our business.
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“We operate the broadest footprint of breweries in the
industry and are increasingly connecting them digitally,
leveraging data to drive learning and scale of knowledge
across our brewery network, optimising upstream and
downstream operations.”
Magne Setnes
Chief Supply Chain Officer
17
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Cost management to enable growth
Fuel the profit of the future
Our growth algorithm seeks to deliver superior, balanced
growth enabled by investments in innovation, in brand
power, behind our digital transformation, in new
capabilities and in making our business more
sustainable. To fund this, we are structurally driving
productivity across all parts of our business.
2023 marked the fourth year of our productivity
programme. We delivered €0.8 billion in gross savings
this year, reaching a cumulative € 2.5 billion gross
savings versus the cost base of 2019, significantly
ahead of our initial €2 billion commitment.
In Europe, our supply chain transformation
programme progressed ahead of schedule. It
delivered in excess of €200 million in gross savings
from portfolio and data-driven efficiency gains in
production, purchasing and logistics.
Outside of Europe, we accelerated procurement
initiatives across the group. Major projects in the
Americas including near shoring production capabilities
and more sustainable local sourcing solutions
contributed more than €240 million. For example, by
working with our strategic suppliers in Brazil to bring
dedicated furnaces online for our local glass bottle
demand we have eliminated the need for imports.
Our efforts also involved leveraging technology to
drive productivity across the organisation, like the
aforementioned example of AIDDA in Mexico to
improve sales force productivity and the increase
use of shared service centres.
We now have established a practice of continued cost
and productivity management in our organisation,
and have begun to build the foundations of stronger
capital governance. With this in place, we are
confident to deliver on our €400 million gross savings
ambition for the next years.
Operating profit landed at €3.2 billion (2022: €4.3
billion), lower due to higher exceptional items and
amortisation of acquisition related intangibles in 2023
amounting to €1.2 billion (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.
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.
Net profit was €2.3 billion (2022: €2.7 billion). The
negative impact of exceptional items and amortisation
of acquisition related intangibles on net profit in 2023
was €329 million (2022: €155 million), where the
higher exceptional expenses in operating profit were
partially offset by the exceptional benefits from the
recognition of €661 million of previously unrecognised
deferred tax assets in Brazil. Net profit (beia) declined
4.3% organically to €2.6 billion (2022: €2.8 billion). The
gains from higher operating profit, higher profits from
associates and joint ventures and lower minority
interests and income taxes were more than offset by a
significant increase in other net financing expenses and
higher-interest expenses.
For more details, please refer to the
Financial Review
18 Raise the bar on sustainability
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and responsibility
We are now three years into developing and executing our
Brew a Better World 2030 strategy. Sustainability & Responsibility
are an integral part of how we operate as a business, and we include
in our planning and performance management processes. We are
learning as we implement at scale, understanding the enablers and
challenges that need to be addressed and developing the right
capabilities to deliver.
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“We must continue to embed sustainability into
the fabric of how we work. The steps that we are
taking today will enable us to anticipate and
mitigate risks, adapt to changing market conditions
and seize new opportunities. It’s not only the right
thing for the planet and society, but also
for our business and stakeholders.”
Joanna Price
Chief Corporate Affairs Officer
19
Raise the bar on sustainability and responsibility
Environmental
Mobilising our global organisation
on the path to net zero impact
In 2023, our target to reach net zero in our full value
chain by 2040 was approved by the Science Based
Targets initiative (‘SBTi’). We also set and received
SBTi approval for a new Forest, Land and Agriculture
(‘FLAG’) scope 3 target, which will help us focus on
reducing agriculture emissions and address
deforestation. HEINEKEN has become the first
global brewer to have long-term and FLAG targets
approved by SBTi. In 2023, we achieved:
34% reduction in scope 1 and 2
emissions compared to 2018
baseline
This is in line with our net zero roadmap expectations.
We are also driving progress on scope 3 emissions
reduction by engaging strategic suppliers and using
our scale to support their transition to renewable
energy. We were recognised as a leading company
on CDP’s (Carbon Disclosure Project) A-list for Climate.
As of the end of 2023, we have reduced scope 3
emissions by 20% compared to the 2018 baseline.
To continue to drive progress towards our goals, we
are building internal capabilities. Through the ‘Brew a
Better World Academy’, more than 1,400 colleagues
from different functions globally have been upskilled
in carbon-related knowledge applicable to their
specific roles.
Investing in renewables
We have made significant progress to shift our
production sites to renewable sources of energy. This
supports our journey to net zero and protects us from
fluctuating energy prices. We are joining forces with
other companies to source renewable energy through
on-site solutions and Power Purchase Agreements
(PPAs), and we rely on innovation to drive progress
and reduce the need for fossil fuels. Examples of
projects on the ground include the following:
– In Finland, the Mutkalampi wind farm came online,
supported by a PPA with HEINEKEN, Signify, Nobian
and Philips. This collaboration will deliver enough
renewable electricity to cover 27 of our European
production sites for the next 10 years.
– In Spain, we launched the largest industrial solar
thermal plant in Europe in partnership with Engie.
This eight-hectare solar thermal plant with a capacity
of 30MW is expected to reduce our Seville brewery’s
consumption of fossil gas by over 60%.
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Achieving our Brew a Better World ambitions will
require significant investment, committed execution,
continuous learning and bold collaboration. We are
mobilising the entire global organisation on our path
to net zero, to deliver our ambitions for an inclusive,
fair and equitable world, and to ensure moderation.
Strategic global and local partnerships help us to
shape our actions, refine our approach and scale our
positive impact.
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Improving water usage and leading
on water stewardship
Our 2030 water strategy – towards healthy
watersheds – looks beyond traditional water usage
to prioritise the health of local watersheds, especially
in water-stressed areas. We are focused on water
efficiency and the long-term restoration of critical
water basins, especially in water-stressed areas. We
take a value chain approach to water focusing on our
operations, upstream with our suppliers and working
in the communities where we operate.
We set a target to reduce our water usage to 2.6
hectolitres per hectolitre (hl/hl) beer by 2030 in water-
stressed areas and 2.9 hl/hl for all sites. Despite
efficiency loss due to reduced production volumes, we
have maintained our global average water usage at
3.0 hl/hl in our breweries in water-stressed areas and
improved our global average water usage across all
our breweries to 3.2 hl/hl (2022: 3.3), progressing
towards our 2030 targets.
28 of our 32 sites in water-stressed areas have now
started water balancing projects and 28% of these
sites are fully water balanced. Other highlights include:
– In Brazil, we have improved water efficiency by
almost 7.5% through a collective pilot project with
its local C&D partner.
– In Ethiopia, our partnership with World Vision
International aims to comprehensively restore the
watershed, improve carbon sequestration and
livelihoods. In the last three years the project has led
to over 500 hectares of rehabilitated land and half a
million trees planted.
– In Tunisia, we have initiated a project to provide
access to clean water for 400 families in the Jebel
Trifi region. This endeavour reflects our focus in
WASH (Water, Sanitation and Hygiene) – together,
we’re making a positive impact, fostering healthier
lives and brighter futures.
Partnering with suppliers to reduce
scope 3 carbon emissions
Becoming net zero means not only decarbonising our
own business, but our entire value chain. In the past
year, we intensified collaboration with key suppliers in
agriculture, packaging, logistics and cooling to unlock
low-carbon solutions.
– We are driving systemic change to reduce agriculture-
related emissions through our global Low Carbon
Farming programme, which has resulted in 13%
reduction of carbon emissions and 81%
improvement of carbon sequestration (results based
on 300 pilots in 13 different countries).
– Along with a consortium of six investors (HEINEKEN,
Siemens Financial Services, EIT InnoEnergy, RIC
Energy, MAIRE, InVivo), we invested in a company
called FertigHy and, together, we aim to develop
low carbon fertiliser solutions.
– In Nigeria, one of our biggest markets in Africa,
the local team engaged with the logistics service
providers to invest in newer, larger and lighter trucks
to reduce the number of trips on the road.
– For packaging, we continue to engage suppliers
through the Supplier Leadership on Climate
Transition (Supplier LOCT), offering support with
capability-building in their carbon reduction efforts.
In 2023, we engaged glass suppliers in
decarbonisation workshops.
– As members of the Beverage Industry Environmental
Roundtable (BIER), we joined the Coolition initiative,
a coalition that consists of BIER members,
refrigeration manufacturers and other key
stakeholders to drive change on three fronts:
standards and legislation, circularity, and energy
efficiency and innovation.
Most of the water we use is dedicated to growing our
crops, with agriculture representing approximately
90% of our water footprint. In 2023, we initiated a
comprehensive Water Global Screening, focused on
our top suppliers and primary sourcing areas. This
yielded valuable insights into regions experiencing
water stress and into the maturity of our suppliers in
managing water resources.
Launching our global circularity
strategy
We have developed a global circularity strategy
focused on packaging where we will increase
reusability, maximise recycled content and improve
recyclability. Making our product packaging reusable is
a priority. Today, approximately 38% of our packaging
is produced in a reusable format. We want to build on
this by supporting existing and emerging deposit
return schemes and other mechanisms to drive reuse
at scale.
By 2030, we aim to reach the following goals:
format
43% of volumes sold in reusable
50% recycled content in bottles
99% of all packaging is recyclable
by design
and cans
This builds on existing projects across the business that
will support implementation at scale. For example:
– In Cambodia, we transitioned to reusable glass
bottles with over 1,600 on-trade outlets in urban
areas, signing up so far to implement crates and
support #ReturnTheBottle.
– In the Netherlands, Desperados is the eighth beer
brand to switch to reusable bottles in the catering
and retail industry meaning more than 90% of
HEINEKEN Netherlands bottles will be filled and
sold in a refillable format in 2024.
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21
Raise the bar on sustainability and responsibility
Social
Walking the talk on the path to an
inclusive, fair and equitable world
We are raising the bar to create a fair and safe
workplace and to promote diversity, equity and
inclusion. This means achieving gender balance at
senior levels, paying our employees a fair wage and
demanding fair living and working standards for
third-party employees and brand promoters. Our
safety, health and well-being strategy aims to embed
a leading safety culture and our social impact
initiatives are aligned with the UN Sustainable
Development Goals.
We have been recognised by Forbes World's Best
Employers ranking as one of the top five best places to
work in the industry and 78th (out of 700) best
employers in the world. This is a result of more than
170,000 workers from more than 50 countries that
were polled, asking them about their experiences at
work and with their employers.
Embrace inclusion and diversity
A fair and safe workspace
We think inclusion starts with courageous leadership
and that we all have a role to play to champion a
culture of belonging.
In 2023, 99.8% of our managers completed the All-
Inclusive Leadership e-learning, which is an important
step to empower our leaders to set an example.
Embracing Diversity, Equity and Inclusion (DEI) is the
right thing to do for our people and our business. We
have grown from 19% women in our senior leadership
in 2017 to 28% in 2023 (2022: 27%). Our aim is to
reach 30% by 2025 and 40% by 2030.
To reach this goal, our plan is to set up DEI councils
across all operating companies to fully embed DEI.
Council members work with the local managing
director to support the delivery of the global DEI
strategy. By the end of 2023, 75% of our operating
companies had a DEI Council in place.
We are levelling the playing field for women and men
through global initiatives, including:
– WIN (Women Interactive Network), a leadership
development programme that aims to level the
playing field for women at HEINEKEN. To this date,
139 women have participated in the programme.
On our path to a fair and safe workplace, 100% of our
direct employees now earn a fair wage according to
the Fair Wage Network, reaching our 2023 goal. We
continue to make progress in providing fair living and
working standards for third-party employees. Our
safety, health and well-being strategy reflects our
company value of Care and is focused on shaping a
leading safety culture. We do our utmost to ensure
every colleague and contractor returns home safely at
the end of the day.
Bringing our purpose to life in the
communities
‘Worlds Together’ is HEINEKEN's social impact
campaign, developed in collaboration with The Social
Gastronomy Movement, The Human Library, and local
partners. In a world that is becoming increasingly
disconnected, polarised and lacking in trust, we want
to bring people together over a beer and a meal, who
would otherwise not likely meet or even speak.
This campaign was launched in Amsterdam and
effectively nurtured authentic togetherness. Eight
operating companies and head office hosted 12
events, bringing together a total of 1,144 people
from different walks of life to foster connection
and understanding.
Our goal is that 100% of markets will have a social
impact initiative in place each year. We want to make
a positive difference based on what matters most for
each community.
By the end of 2023, 100% of all our markets globally
in scope had a social impact initiative in place. For
example:
– In Haiti, we partner with three women's organisations
to provide microcredits to women in rural areas,
enabling them to start small businesses where they
lacked access to funding.
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Responsible
A consumer-centric approach on
the path to moderation and
no harmful use
We aim to lead the debate on responsible
consumption and support actions that decrease
harmful consumption. We are giving consumers more
choice with our 0.0 portfolio of beer and cider brands
and empowering them with clear and transparent
information on our labels.
Always a choice
Through Brew a Better World we want to empower
consumers to make responsible choices by providing
low-and no-alcohol options, transparent information
and promoting zero tolerance of harmful use.
Heineken® 0.0 is now available in 114 markets,
including launches in Japan, Argentina, China
and Morocco.
We made progress in delivering our ambition to serve
0.0 always, but we fell short of the 2023 goal to
provide a zero alcohol option for at least two strategic
brands in most of our operating companies.
Operating companies with a zero alcohol option for
at least two strategic brands represented 53% (2022:
46%) of our total beer and cider volume.
Our experience has found that, for operating
companies without an established non-alcoholic beer
category, focusing on seeding one strategic brand,
rather than two, is more impactful. Going forward,
our new goal will reflect this approach; We aim to
have a zero alcohol option for two strategic brands
in the majority of our markets (accounting for 90%
of our business) by 2025. Non-alcoholic products
will play an increasing role in HEINEKEN’s industry-
leading messaging on responsible consumption and
moderation. With the no-alcohol category increasing
in popularity, we want to continue to empower
consumers by always providing a choice while at the
same time addressing the harmful effects of alcohol.
As members of the International Alliance for
Responsible Drinking (IARD), we helped to launch a
new free online training for servers and bar staff to
help equip them with the knowledge and practices to
ensure all consumers enjoy alcohol responsibly.
In the UK, we introduced the world’s first
‘Nommelier’ service in Edinburgh and London,
curating an alcohol-free pairing menu.
Partnerships to address
harmful drinking
Harmful drinking is damaging to the people involved
and their communities, as well as to our industry.
In 2023, we achieved our goal of having 100% of the
markets in scope with a partnership in place to address
harmful drinking.
– In Saint Lucia, we hosted the first ever knowledge
forum at the annual Saint Lucian Carnival, sharing
responsible drinking tips, and exploring solutions to
effectively enable a culture of responsible
consumption and promote moderation in Saint Lucia.
– In Ethiopia, we are joining forces with three
universities in the country to create awareness
and promote responsible behaviours in addressing
underage drinking. The initiative aims to underline
the critical role that educational institutions play
in promoting responsible behaviour among
young individuals.
Making moderation cool
‘When You Drive, Never Drink’ is our long-standing
flagship campaign which promotes an anti-drink-
driving message. In 2023, we launched a new edition
raising awareness of the fact that the best driver is
always the one who’s not drinking. F1™ World
Champion Max Verstappen helps us to convey this
message as our new Heineken® 0.0 ambassador.
Verstappen also plays a leading role in a new initiative
called ‘Player 0.0’, a virtual racing experience that
incorporates responsible consumption themes in
the gaming space.
– In the US, Heineken® 0.0 and Marvel Studios’
‘Ant-Man and The Wasp: Quantumania’ teamed
up on a campaign that focused on drinking (and
shrinking) responsibly. The ad was shown during
Super Bowl LVII.
To continue to lead the debate, our operating
companies have invested 14% of Heineken® media
spend, reaching almost 900 million unique consumers
worldwide through responsible consumption
campaigns. We overachieved our goal related to
media spend. However, we missed out on our goal of
reaching 1 billion consumers as efforts were focused
on increasing our impact in certain markets.
Visit page 166 to learn more about what we have
done on sustainability and responsibility
23 Become the best-
connected brewer
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N.V.
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2023
HEINEKEN has increased investments in its digital transformation
to build a future-proof company. To become the best-connected brewer,
HEINEKEN needs to digitise its route-to-consumer, unlock the value of data,
simplify and automate our end-to-end processes, build a more modern
technology landscape (the Digital Backbone) and create a digitally
enabled organisation. We are significantly stepping up our capabilities
in eCommerce and data and analytics, while at the same time we continue
to rationalise and modernise our tech infrastructure.
Introduction
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“HEINEKEN wants to become the best-connected, most
relevant brewer for consumers and customers living in
the digital age. This year we continued to invest in
building out our capabilities in digital and technology
to further maximise the customer experience, unlock
business value and to grow our business.”
Ronald den Elzen
Chief Digital & Technology Officer
24
Become the best-connected brewer
At the end of 2023, over 60% of our revenue in
fragmented trade (bars, restaurants and small
independent stores) was brought in via our own apps.
This excludes modern trade (grocery stores and
supermarkets) where over 80% of all our orders
are now digitised.
63% of our customers are
now online
With the increased scale of our online order taking,
we now use AI products in various areas: product
recommendation, churn detection (the risk of a
customer leaving HEINEKEN) and sales route
optimisation.
In various markets we use shelf image recognition
software, to improve on-shelf sales execution, by
scanning planograms, on-shelf availability and shelf
space management.
Regarding direct-to-consumer (D2C) sales, our focus
this year has been on three different platforms.
Beerwulf continues to operate as a leading direct-to-
consumer (D2C) online beer platform in Europe. GLUP
is our business-to-consumer (B2C) rapid-delivery
company that services consumers in five metropolitan
areas in Mexico. GLUP operates using our network of
SIX stores, which have the value proposition designed
to delight consumers who want beer, beverages and
more delivered in less than 60 minutes. Finally, we
have Drinkies, our eB2B-to-consumers platform
used in markets such as Egypt and Malaysia.
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HEINEKEN has increased investments in its digital
transformation to build a future-proof company.
To become the best-connected brewer, HEINEKEN
needs to digitise its route-to-consumer, unlock the
value of data, simplify and automate our end-to-end
processes, build a more modern technology landscape
(the Digital Backbone) and create a digitally enabled
organisation. We are significantly stepping up our
capabilities in eCommerce and data and analytics,
while at the same time we continue to rationalise
our IT infrastructure.
Digitise our route-to-
consumer
HEINEKEN has strong connections with our
consumers, through the power of our brands, and
with customers through the strong relationships with
our sales force. In a world that is moving more online,
where consumers stream films and series and where
customers order online, we are building new digital
capabilities to keep these strong connections. This
includes new digital consumer engagement models,
online order platforms and becoming a data-driven
sales organisation.
Our actions are aimed to support our customers to
grow, engrained in deep customer understanding.
In 2023 we collected 1.1 million surveys from 66
markets, measuring our service levels and asking
direct feedback on customer painpoints to help
shape our agenda.
By the end of 2023 we implemented proprietary
apps to take orders from our customers in 34 markets.
We have brought nine markets under our new eB2B
brand name and identity: eazle, business made easy.
By the end of the year our eB2B platforms had
captured close to €11 billion in gross merchandise
value, connecting with 700,000 active customers
in fragmented, traditional channels, an increase of
28% versus the same period last year.
25
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Unlocking the value of data
In 2023 we have made significant progress on our
data agenda. 60 of our operating companies are now
connected to our Global Data Enablement Platform.
This data is used more and more for AI products that
drive value for HEINEKEN.
AI Data Driven Advisor (AIDDA) is an AI product that
augments our sales organisation to help customers
grow. This product has been rolled out to sales
representatives, helping them predict the next best
activity to implement with our customers. This is now
live with over over 200,000 HEINEKEN customers in
five markets. AIDDA delivers both increased top line as
well as sales productivity. Product Recommender is an
AI product (within the AIDDA Product Suite) that
recommends the right product to the right customer
at the right time on our B2B platform.
Additional AI products we focused on in 2023 are
Mercury and Promo Advisor. Mercury was built for
commercial mix optimisation. It measures, simulates
and predicts impact of investments in different brands
across different touchpoints (e.g. TV, sponsorships,
online) and different regions to maximise the impact
of gross margin. Promo Advisor focuses on measuring,
simulating and predicting the impact of promotions
and discounts, and analyses the uplift and profit
impact for both HEINEKEN and our customers.
This year we also made the first steps in introducing
Generative AI for chatbots, reporting and document
summarisation markets. For example, we are utilising
virtual assistants for consumer and customer care,
natural language input and output for business
intelligence and document and policy summarisation.
Simplifying and automating
our end-to-end business
Within HEINEKEN we are making big steps to
harmonise and simplify our end-to-end processes.
This leads to more efficiency, higher Net Promoter
Score (NPS) of our customers, and enables new
shared- service opportunities.
In Supply Chain, we continued with our Connected
Brewery programme to retrofit our breweries with our
future-fit digital eco-system. We have now 85
breweries and over 4,100 machines connected to our
Internet of Things (IoT) platform. 180 billion data
points are streaming into our data cloud, that we use
to measure and optimise Supply Chain performance.
In 2023 we made significant progress in building a
scalable Machine Learning and AI capability to train
models to optimise specific brewery processes and
reducing consumption of energy and water.
At the same time, more than 20,000 brewery
operators are empowered through Connected Worker
Apps to support them in faster problem solving,
scanning QR codes for work instructions and using
Augmented Reality to receive ‘remote support’ from
colleagues around the globe when problems with
equipment occur.
Robotic Process Automation is used to automate
repetitive tasks and free up time for value added
activities. In 2023 alone 200,000 hours were
saved by automating mainly finance, IT and
commerce processes bringing the cumulative
hours saved to over 400,000,. We now learn fast
and replicate at scale.
26
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Create a digitally-enabled
organisation
We continue to step up our capabilities within the
global Digital & Technology function. We are building
out our digital hubs in Kraków, Ho Chi Minh City,
Cairo and Johannesburg and have added Bangalore
and Monterrey as new hubs. Key capabilities such as
Cybersecurity, Machine Learning Engineering and
DevOps are being insourced, to accelerate our
digital transformation.
At the same time significant ‘upskilling’ efforts are
taking place across HEINEKEN, focused on Data and
AI, Cybersecurity and data-driven decision-making.
Building a modern
technology landscape
(the Digital Backbone)
To become the best-connected brewer, HEINEKEN
is not only digitally transforming the front-end
(our route-to-consumers and analytics) but also
modernising and simplifying the back-end. HEINEKEN
historically has a widely varied technology landscape,
with many local applications.
With the build and deployment of the Digital
Backbone, HEINEKEN creates a future-proof
modular architecture. It will enable new capabilities
to grow the business, drive further productivity and
increase our speed to market. The Digital Backbone
consists of a Digital CORE (a lean ERP system),
surrounded by specific cloud platforms. This
programme started in 2022 and will run at least
until 2028. In 2023 we made 535 deployments
of our future-proof applications, across all our
countries, which constitutes around 22% of our
future architecture. At the same time, we
decommissioned almost 350 older applications.
27 Unlock the full
Heineken
N.V.
Annual
Report
2023
potential of our people
At HEINEKEN, we recognise that our success is driven by our people.
We continue to raise the bar on talent and performance management
and thrive to create a winning culture. We demonstrate deep care for
our people by providing best-in-class health, safety and well-being
support. We combine the power of technology and people in our
processes, unlocking valuable data insights and creating a common
user experience for our more than 90,000 colleagues around the
world. We are proud to lead a social sustainability and human rights
agenda that is relevant and meaningful, embodying our commitment
to brewing a better world for all.
“By nurturing authentic human connections, cultivating
a culture of belonging and giving people the opportunity
to thrive we continue to unlock the full potential of our
people and organisation. Looking back at 2023, we
continued to invest behind our EverGreen priorities:
future-proofing our talent, strengthening our winning
culture, and building strategic priorities to anticipate the
ever-changing demands of our industry and world.”
Yolanda Talamo
Chief People Officer
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Our more than 100 DEI Ambassadors played a pivotal
role in creating an inclusive atmosphere across our
operating companies and functions, conducting over
190 listening and dialogue sessions. These sessions
empowered individuals to share their experiences of
inclusion, informing actionable improvements. We
initiated global campaigns and engagement sessions,
including Q&A sessions with senior leaders, and
launched an Allyship Playbook to enhance our
colleagues' ability to create a safe environment.
In our commitment to equitable practices at every
stage of the employee lifecycle, we have embedded
DEI principles in core processes. This ranged from
creating inclusive hiring guidelines to implementing
and analysing exit interviews.
We remain steadfast in our goal to improve gender
balance within senior management, aiming for
30% women by 2025 and 40% by 2030.
28% of our senior managers were
women in 2023
Initiatives like WIN (Women’s Interactive Network)
and Women in Sales continued to level the playing
field for women in leadership at HEINEKEN.
This year, we established a new Women in Supply
Chain network to promote engagement, community
building and career progression within this function.
Multiple employee resource groups, including
HOP (Heineken Open and Proud) and Women
and Allies, continued to thrive across functions
and operating companies.
Cultural diversity remains a cornerstone of our
operating companies, with programmes like Unleash
in AMEE and BOOST in Asia Pacific. By the end of
2023, three out of four regions had achieved the goal
of having 65% regional nationals in country leadership
teams, underscoring our commitment to this
important topic for HEINEKEN.
28
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Building a bright future
Strengthening our winning culture
While we move down the path of our EverGreen
journey, we continue to evolve our culture. Our
behaviours continue to be embedded deeper into
our key people processes. For instance, we have
enhanced our performance management process by
placing a balanced emphasis on the ‘what’ and the
‘how’ to reinforce the importance of our HEINEKEN
behaviours. They also have become our guide in
hiring new colleagues and our language in providing
feedback and showing appreciation for each
other’s contributions.
Our annual Climate Survey took place in September
this year with the purpose to better understand how
our colleagues experience working for HEINEKEN.
More than 79,000 employees from 81 operating
companies shared feedback – a 93% response rate
(92% in 2022).
We continue to record great results with our climate
survey, outperforming on several dimensions above
the external norms. This also reflects our winning
culture, with 91% of our employees expressing pride
in working with HEINEKEN in 2023.
Talent and leadership development
Our people and our brands are our greatest assets. In
2023, we continued to focus on talent management
as one of the strategic capabilities in our EverGreen
strategy by building leadership competence with a
strong focus on proactive talent identification,
development and retention, from early/mid-careers to
functional leadership and general management levels.
The journey to embed our potential model within our
Talent Review processes is well underway, with sharper
focus on career and development conversations
facilitated by people managers. In addition, we have
provided senior leaders with clarity on the mindsets
and shifts required to enable talent acceleration via
clearly defined critical experiences and career
accelerator assignments, to ensure a strong pipeline
of future leaders for our business.
We have also extended our assessment and
development centre offerings to management
team and senior management roles for a globally
standardised and objective talent evaluation process.
In 2023, leadership development remains a top
priority as we continue our EverGreen 2025 journey.
This year we launched Thrive, our leadership
development programme dedicated to our top 160
leaders. Thrive is an 18-month development journey
designed to support our leaders in unlocking their true
potential while defining and amplifying our collective
leadership identity and impact. The programme will
help our leaders to perform while we transform the
business, scaling up early successes and new
capabilities so we are ready for the future.
Our Heineken International Management Course
(HIMAC) for our senior managers and the
ACCELERATE leadership programmes continue,
targeted at our next generation of leaders currently at
the middle management level, also supporting our
talent and succession pipeline while delivering
personal and professional transformative experiences
for participants. As female diversity is a key imperative
for us, the Women's Interactive Network (WIN) caters
to our female top talent globally, ensuring that they
develop the much-needed competencies to advance
their careers.
Unleash our diverse talent
In 2023, we continued to shape an inclusive and
equitable environment to unlock the full potential of
our diverse people. Our focus remained on three core
pillars: fostering courageous leadership, promoting an
inclusive culture, and creating equal opportunities.
Inclusion starts with courageous leadership. By the
close of 2023, we successfully trained 99.8% of our
people managers globally in inclusive leadership,
promoting a culture of growth, learning and
belonging. Our operating companies further
advanced inclusivity by establishing Diversity,
Equity and Inclusion (DEI) Councils. By year-end,
75% of our operating companies had created
these councils to drive our ambitions.
29
Unlock the full potential of our people
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Caring for our people
Safety, health and well-being
At HEINEKEN, the Safety, Health and Well-being
strategy reflects our company value of Care.
Building on the company value of Care, this year’s
Safety Day theme was: ‘Because we Care, I don’t
compromise Safety.’
We focus on shaping a leading health and safety
culture fully embedded in our ways of working,
counting on everyone’s leadership, engagement and
participation. To support this journey towards shaping
a leading health and safety culture, a cultural safety
programme has been developed and piloted during
2023 and is planned to be rolled out in 2024.
In 2023, we have created and launched our
Health and Safety Academy with diverse learning
opportunities to further develop the health and
safety capabilities across the organisation.
With health and well-being as a key priority at
HEINEKEN, we focused on supporting our employees
through our HEI-Life framework. Four dimensions of
well-being were addressed: professional, emotional,
social and physical. We have collected our global and
operating company well-being initiatives and best
practices under the HEI-Life framework, promoting
sharing and learning throughout our HEI-Life
community, fostering a culture where people openly
discuss and address well-being while embracing
enjoyment of life.
Social sustainability
In 2023 we continued to advance our social
sustainability ambition. Our values place people and
community at the core. This has anchored us for over
159 years, defining our past but also forming the
foundation for our future success. At HEINEKEN, we
are dedicated to promoting and upholding human
rights in the realm of the business. One of the key
2023 initiatives has been the launch of a new People
function competencies model, with human rights
included for the first time; governance, clear roles and
responsibility and necessary capabilities being
paramount to deliver ambitions and embed
practices into the business.
Steady progress was made on our global initiative to
ensure fair living and working standards for third-party
employees and brand promoters, as well as on gender
balance. We delivered on our 2023 targets for fair
wage, equal pay, supporting the economic
empowerment of our employees, as well as on
inclusive leadership practices training.
In 2023 we built leadership safety capabilities.
Reaching our regional nationals targets happened to
be more challenging than anticipated. We will
nonetheless continue to focus on these important
initiatives, as business as usual practices, embedding
them into our daily operations. New people managers
will be trained on inclusive leadership, on safety and
on our company's Life Saving Commitments as part
of their mandatory onboarding training.
The journey of the past three years brought a lot of
learnings. They will help inform the next generation of
our social sustainability ambition, as promoting DEI
and offering a fair and safe workplace remain of
strategic importance for the company.
Visit page 145 to learn more about what we have
done on our social ambitions
30 A balanced
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geographic footprint
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Africa, Middle East
& Eastern Europe
Consolidated beer volume
34.8mhl
Americas
Consolidated beer volume
88.4mhl
Page 31
Page 32
Asia Pacific
Consolidated beer volume
43.0mhl
Europe
Consolidated beer volume
76.4mhl
Page 33
Page 34
31
Africa, Middle East & Eastern Europe
The Africa, Middle East & Eastern Europe (AMEE)
region faced challenging macroeconomic headwinds
including persistently high inflation, low consumer
purchasing power, currency shortages, devaluation,
rising energy costs and socio-political instability.
Despite this, the AMEE region delivered a resilient
performance with organic revenue (beia) growth
despite single-digit volume decline.
Our regional jewels, Primus and Turbo King, were
rejuvenated with more progressive and differentiated
identities, supported by exciting through-the-line
campaigns delivering impressive growth in DRC,
Rwanda and Congo Brazzaville. Maltina extended its
leadership in Nigeria, strengthening brand power and
delivering revenue growth supported by the ‘Together
with Happiness’ credentials campaign.
To navigate significant volatility in Nigeria, we
prioritised value capture over volume leading to a
positive revenue uplift despite double digit volume
decline, mostly driven by mainstream lagers.
Continuing power shortages and sluggish economic
growth contributed to a challenging year in South
Africa as we managed the integration of HEINEKEN
South Africa, Distell and Namibia Breweries Limited in
a highly competitive market. Route-to-consumer
remains a key priority to narrow market share gaps in
total lager with Heineken®, Amstel and Windhoek
while consolidating leadership in beyond beer with
Savanna and Hunters in cider and Old Buck, Amarula
and Klipdrift in spirits.
Ethiopia reached an all-time high in volume and
revenue growth, extending our market leadership. All
categories grew including premium led by Heineken®
and mainstream led by Harar brand – now the
second biggest beer brand in the country by market
share and brand power.
Across the region, premiumisation was driven by
Desperados, Windhoek Draught and Bedele Special.
Brand Heineken® grew brand power, distribution and
volume in seven markets, offset by volume decline in
Nigeria and South Africa. We continue to grow the
brand footprint with localised production in Congo
Brazzaville together with the launch of Heineken®
Silver in South Africa.
We continued to focus on improving market grip
and building strong sales power. Through ‘Voice of
the Customer’ feedback we achieved positive
momentum in response rate, closure of issues and
strong net promoter score growth. We increased
digital transaction capture across all markets,
leveraging data to improve customer experience
and capture productivity gains. Portfolio and revenue
management initiatives were a key priority to address
the evolving market.
The role of the region is to transform to a profitable
growth model to create more value from the long-
term potential in Africa and deliver balanced and
profitable growth. Strengthening our position in the
five largest African markets is a strategic priority and
we took a major step towards that objective with the
acquisition of Distell and Namibia Breweries Limited.
Following Competition Approval in May, we
completed the integration in September. The new
business – named HEINEKEN Beverages – operates
across 13 markets, employs almost 6,000 people and
is a top 5 operating company. It brings together a
unique multi-category portfolio, with strong brands in
beer, cider, wine and spirits able to address consumer
needs across demand spaces with a strengthened
route to market. HEINEKEN Beverages is
implementing an ambitious public interest package
in South Africa supporting local suppliers, building
the barley value chain and making a positive impact
in communities.
In August we completed our exit from Russia. While it
took much longer than we had hoped, the transaction
secured the livelihoods of our employees and allowed
us to exit the country in a responsible manner.
Following the divestment, the region was renamed
Africa Middle East (AME).
The localisation of barley and malt in Africa continues
to make progress. In Ethiopia, more than 90% of
agricultural raw materials were sourced locally in 2023,
up from <5% in 2018. Our barley development
programme entered its 12th year. The BOOST 2
project, with partners IFC and Soufflet Malteries,
was launched in order to expand malt barley
production to farmers in new regions of Ethiopia.
Barley varieties have now been approved for
commercial production in nine African countries and
COMESA added barley to its regional seed register.
Since 2020, the quantity of locally sourced barley has
increased by over 400% and malt has more than
tripled, allowing us to meet rising demand driven by
portfolio premiumisation. Despite these successes, a
structural shortage of African sugar is among the
challenges faced which requires continued imports.
The HEINEKEN Africa Foundation supports
communities in sub-Saharan Africa where HEINEKEN
operates. HAF refreshed its strategy to focus on
helping smallholder farmers thrive and build climate
resilience through regenerative farming. Pilot projects
were launched in Burundi and Ethiopia, investing
€2.7 million to empower around 40,000 smallholder
families by 2026.
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“We believe in the long-term future
of Africa. While operating in Africa
brings many challenges, the
opportunities to grow with the
continent are significant. We aim to
be a partner for growth, building
long-term value chains, investing in
local economies and continuing to
focus on good governance and
social sustainability.”
Roland Pirmez
President, Africa, Middle East & Eastern Europe
€450m
Operating
profit (beia)
(2022: €554m)
10.6%
Operating
profit (beia)
as % of total
(2022: 12.6%)
34.8mhl
Consolidated
beer volume
(2022: 39.2mhl)
5.7mhl
Heineken®
volume
(2022: 6.4mhl)
€4,229m
Net revenue
(beia)
(2022: €4,005m)
14.3%
Consolidated
beer volume
as % of total
(2022: 15.3%)
Key brands:
Primus
Amstel Lager
Heineken®
Desperados
Maltina
Given the Americas region stands as the most
important profit pool for global brewers, we are
leveraging our momentum by scaling premium,
stepping up innovation, digitising our route-to-
consumer, and improving profitability through near-
shoring our sourcing and enhancing our returnable
packaging mix. Across the majority of our markets,
we have not only gained market share but also
improved financial results compared to 2022.
Despite facing challenges and the inflationary
pressure on disposable income, 2023 witnessed robust
growth in our premium portfolio. The Heineken®
brand reached high single-digit volume growth,
experiencing substantial growth in Brazil and
successes in markets like Panama, Ecuador and
Argentina. In 2023, the Amstel brand achieved similar
levels of success, representing more than half of the
global Amstel volume.
We observed continuous growth in no-alcohol beer
(+23% compared to the previous year), with an
intentional focus on responsible consumption and
moderation. This was demonstrated by Heineken® 0.0
being the first non-alcoholic brand advertising at the
Super Bowl in the US, teaming up with Marvel Studios’
‘Ant-Man and The Wasp: Quantumania’ on a
campaign that focused on drinking (and shrinking)
responsibly. Tecate 0.0 was also launched in Mexico
this year.
The evolution of our beyond beer portfolio includes
sustained investments in Lagunitas Hoppy Refresher
and successful launches in the RTD segment with line
extensions such as Red Stripe Rum available in Punch
and Mojito in the US, Rum Stripe available in
Cranberry and Coconut Pine in Jamaica, and Amstel
Vibes available in Strawmelon and Lemon in Brazil.
2023 also saw rising revenues generated by our eB2B
platforms, with a growing number of customers now
ordering on our platforms. Approximately 60% of our
revenue in the fragmented trade channel is now
digital revenue. Brazil onboarded all indirect
distributors into our eB2B platforms, with more than
265,000 active customers connected at year end.
Progressing toward our Brew a Better World
ambitions, Brazil is scaling up its activities anchored
in three pillars: circularity, urban reforestation and
renewable energy. One of the campaigns in 2023
was the installation of a Heineken® Floating Bar in
the Pinheiros River in São Paulo, with all sales proceeds
supporting the SOS Mata Atlantic, a partner NGO,
in their efforts to clean the river. Mexico is leading
globally with an average of 2.4 hl/hl on water usage,
implementing water balancing projects such as
reforestation and soil conservation in Monterrey,
conservation agriculture in Toluca and Guadalajara,
and Ecological Restoration in Tecate.
We also continued to drive our Diversity, Equity and
Inclusion (DEI) initiative with the aim of cultivating
an inclusive environment where everyone belongs.
Moreover, we are enhancing our efforts in Talent
Management with the launch of our New Heineken
Potential Model, with Mexico and Brazil leading the
way in engaging leaders and providing training,
coaching and support.
In the US, we introduced Heineken® Silver with
significant activations throughout the year, including
sponsorships at Coachella Valley Music, the US Open
Tennis, and F1™ races. Notably, we served as the title
sponsor for the highly anticipated F1™ Heineken®
Silver Las Vegas Grand Prix in November.
Continuing our commitment to expanding market
share, this year we announced a groundbreaking
investment of €430 million to establish a new brewery
in Mexico. The construction is set to take place in
Merida, Kanasín municipality, marking our first
brewery in the country’s southeast region. This project
aligns with our EverGreen ambitions, establishing a
new standard for sustainable brewing. Furthermore,
through ongoing investments, such as the can
manufacturing factory in the Mexican state of
Chihuahua, the Passos Brewer in Brazil, and line
expansions across Central America and the Caribbean,
we are advancing to better serve customers, seize
growth opportunities, and reinforce the strategic
role of the Americas for the company.
Despite increased volatility in Haiti and Suriname,
we continue to perform well in the Caribbean.
Our local sourcing initiatives across the region
are positively impacting input costs, with notable
contributions from local and regional sourcing
of bottles and malt in Brazil in 2023.
32
Americas
Heineken
N.V.
Annual
Report
2023
Continuing our profitable
growth journey
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
“The majority of our operating
companies in the Americas are
gaining market share while
delivering profitable growth. Our
focus remains on premiumisation,
led by Heineken®, and innovations in
beer and beyond to meet the
evolving needs of our consumers and
customers. Additionally, we’ve made
further progress in expanding our
digital routes, enhancing strategic
capabilities, and investing in Brew a
Better World initiatives.”
Marc Busain
President, Americas
88.4mhl
Consolidated
beer volume
(2022: 88.5mhl)
23.7mhl
Heineken® volume
(2022: 22.2mhl)
€1,531m
Operating
profit (beia)
(2022: €1,391m)
€10,469m
Net revenue (beia)
(2022: €9,421m)
35.9%
Operating
profit (beia)
as % of total
(2022: 31.6%)
36.4%
Consolidated
beer volume
as % of total
(2022: 34.4%)
Key brands:
Dos Equis
Heineken®
Heineken® Silver
Tecate
Amstel Lager
After a record-breaking performance in 2022,
HEINEKEN faced short-term growth challenges in
Vietnam in 2023. Despite the slowdown in this key
market, we increased our market share in most of our
Asia Pacific (APAC) markets, demonstrating the
region’s long-term potential for HEINEKEN.
Our flagship premium brand, Heineken®, achieved
a remarkable 20% growth driven by China and
Vietnam. In India, our flagship brand, Kingfisher,
reached all-time high volumes, reinforcing its position
as the largest and most iconic Indian beer brand.
We also continue to grow our volume market share
and appeal to a new generation of beer enthusiasts
in India by introducing innovations such as Heineken®
Silver draught.
Our power brand innovations, such as Heineken® Silver
and Tiger Crystal, grew by 42%, demonstrating our
ability to connect with new consumers and meet
changing consumer needs. We launched Tiger Soju
in markets including Indonesia, Singapore, Taiwan
and Vietnam. This easy-to-drink lager is infused
with a touch of soju and comes in various flavours,
creating exciting new experiences for Gen Z
consumers of legal drinking age. This innovation
helped us expand into new segments, occasions
and consumer groups, driving incremental growth.
In APAC, we aim to deliver growth at attractive
operating profit margins through a balanced portfolio
of brands led by premiumisation and innovation,
targeting the region's rapidly growing middle class,
who demand more varied and meaningful
experiences. To strengthen our ability to deliver
disruptive and scalable product innovations, we
launched our Innovation Hub in Singapore in
2023 and set-up a Regional Consumer & Market
Insights team.
We strengthened our Revenue Margin Growth (RMG)
capabilities to enable us to drive value for consumers,
customers and our business through pricing and non-
pricing levers.
We are on a journey digitally enabling our route-to-
consumer across the region. As of 2023, 60% of our
fragmented trade revenues are coming through our
eB2B eCommerce platform in Vietnam, Cambodia,
New Zealand, Malaysia, Singapore, Indonesia,
Myanmar and New Caledonia. This lays an important
foundation for enhanced service for our customers
and bring value across the entire value chain.
Furthermore, we continue to make strides in achieving
net zero emissions in production, achieving 79%
renewable energy in our breweries across the region.
Malaysia achieved net zero carbon emissions in its
breweries, successfully transitioning to 100%
renewable electricity through the Renewable Energy
Certificate (REC) programme and installing renewable
energy solutions on site. Additionally, Multi Bintang
Indonesia has built biomass plants for each of its two
breweries, lowering emissions by 11%, and HEINEKEN
Malaysia’s rooftop solar panels will cover an estimated
14% of its annual energy consumption, once
operational.
Finally, we are proud of our Diversity, Equity and
Inclusion (DEI) agenda progress. 72% of our
leadership in our markets are now regional talents,
and 26% of our senior management positions are
held by women, supporting our global goal of 30% by
2025. This progress is achieved through the BOOST
(Build Our Own Sustainable Talent) programme,
where we aim to grow our leaders for APAC and
HEINEKEN worldwide. The main programme,
Management Team FastTrack (MTFT), has welcomed
109 leaders from 19 operating companies since 2019.
33
Asia Pacific
Heineken
N.V.
Annual
Report
2023
Adapting to short-term
challenges to capture
future growth
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
“As we adjusted for challenging
circumstances in 2023, our focus
remains on value creation through
our balanced portfolio, consumer-
driven innovations, and high-value
product and packaging offerings.”
Jacco van der Linden
President, Asia Pacific
43.0mhl
Consolidated
beer volume
(2022: 48.0mhl)
11.4mhl
Heineken®
volume
(2022: 9.5mhl)
€926m
Operating
profit (beia)
(2022: €1,235m)
€4,157m
Net revenue
(beia)
(2022: €4,652m)
21.7%
Operating
profit (beia)
as % of total
(2022: 28.1%)
17.7%
Consolidated
beer volume
as % of total
(2022: 18.7%)
Key brands:
Kingfisher
Bia Viet
Heineken® Silver
Tiger Crystal
Bintang
Despite a challenging year for our consumers and
customers in Europe, we continued to build on our
strong foundation of initiatives that fuel our
EverGreen transformation. The unprecedented
inflationary pressure in 2023 required a bold and
disciplined approach to revenue management to
protect the long-term health of our business. Beer
volume declined organically 5.4% for the full year,
sequentially improving into the final quarter to a
3.4% decline, offset by pricing which increased net
revenue (beia) by 6.3%. A strong performance in the
on-trade market has been more than offset by market
share losses in the off-trade. Additionally, bad weather
impacted our business over the key summer months
in 2023.
Our premium beer portfolio outperformed the wider
portfolio in the majority of markets, boosted by the
performance of our next generation brands, including
Texels, Gallia, Birra Moretti and El Aguila among
others. Our non-alcoholic offerings continued to build
scale in the majority of our markets, driven by the
success of Heineken® 0.0. Cider continued to
outperform the beer portfolio in the UK, Ireland, Spain
and Portugal, led by the success of innovations such as
Inch’s in the UK. We also continued to expand our
consumer-centric offering and pushed our portfolio
beyond beer, for instance by taking a minority position
in SERVED, the UK’s leading hard seltzer brand
endorsed by Ellie Goulding.
Strengthening our portfolio and geographic footprint
is key to our long-term growth strategy, and in 2023
we made progress on this front despite the
challenging operating environment. For example,
launching in the UK in 2023, Cruzcampo delivered
the biggest innovation in the beer, wine, and spirits
categories in the country. In July 2023, we sold the
soft drinks player Vrumona in the Netherlands. We
also sold K1664 in the UK. Both moves were with the
intent to focus more on our core business, optimising
our capital allocation and portfolio to unlock exciting
long-term growth opportunities in high potential
markets, which remains a crucial element of delivering
our EverGreen ambition across Europe.
As we navigated volatility in the region, we also
worked to continue building a future-fit HEINEKEN
in Europe. Our operating companies accelerated our
productivity initiatives, including the end-to-end
transformation of our supply chain. Operating profit
(beia) grew 11.9% organically as price-led revenue
growth, better on-trade mix and significant cost
savings from our end-to-end supply chain
transformation programme delivered in the second
half more than offset the material inflationary
pressures in our input and energy costs and a step-up
in investment behind our brands. Consequently,
operating profit (beia) margin improved by 33 bps.
We also continued to transform our digital sales
footprint, with more than 80% of sales in our focus
markets now online, proudly retaining the largest on-
trade eB2B platform in Europe.
We have made great progress to digitise our route-to-
consumer in Europe this year, successfully migrating
nine markets in Europe to our eB2B platform and
identity: eazle, business made easy. Created to make it
easy for our customers to run and grow their business.
We continued to focus on our Brew a Better World
strategy across the Europe region in 2023. A
significant milestone in our journey to reach net zero
carbon emissions in production (scope 1 and 2) by
2030, is the launch of Project Circle in France. In
partnership with our vendor Duynie this initiative will
extract high-quality proteins from our brewer spent
grain and use the remaining fibres as biofuel for our
French brewery. In Spain, we launched the largest
industrial solar thermal plant in Europe in partnership
with Engie – built to generate the heat that is key to
the brewing process. By the end of 2024, the site,
known by locals as the home of Cruzcampo, is
expected to operate with 84% renewable energy.
In addition to global activations, our operating
companies in Europe continued to explore innovative
local ways to promote and grow the relevance of low-
and no-alcohol beers among our consumers. A recent
example of how we are raising the bar on responsible
consumption is the launch of Player 0.0, a simulation-
racing tournament. Through a virtual racing
experience for fans, Player 0.0 will help drive cut-
through of our message of responsible consumption
to a broader audience. The continued drive and built-
up momentum to bring our Brew a Better World 2030
ambitions to life is increasingly visible and recognised
across the region.
34
Europe
Heineken
N.V.
Annual
Report
2023
Shaping the future of beer
and beyond in Europe
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
“In another challenging year for our
consumers and customers, we
continued to drive the initiatives
that fuel our EverGreen
transformation. As the market
leader in Europe, we want to shape
the future of beer. We continued to
invest in and grow our premium
brand portfolio and our digital sales
footprint while accelerating our
productivity initiatives to future-
proof our market leadership
in the region.”
Soren Hagh*
President, Europe
* Soren Hagh has been succeeded by
Glenn Caton as per 1 January 2024.
76.4mhl
Consolidated
beer volume
(2022: 81.2mhl)
15.5mhl
Heineken® volume
(2022: 16.8mhl)
€1,353m
Operating
profit (beia)
(2022: €1,221m)
€12,211m
Net revenue (beia)
(2022: €11,362m)
31.8%
Operating
profit (beia)
as % of total
(2022: 27.7%)
31.5%
Consolidated
beer volume
as % of total
(2022: 31.6%)
Key brands:
Birra Messina
Birra Moretti
Heineken®
Desperados
Strongbow
ULTRA
35
Risk Management
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Integrated approach
At HEINEKEN, Risk Management is an integral part of
doing business, supported by clear governance. Risks are
an essential element when opportunities are assessed
and strategies are set. Management decisions are
made in line with HEINEKEN’s risk appetite. Risks are
identified, mitigated and monitored on an ongoing
basis, as part of business routines. The increased
volatility in the past years (as a result of COVID and
the supply and energy crisis) has highlighted the
importance of active risk management.
HEINEKEN’s risk management approach addresses
the risks the Company inevitably faces in achieving its
strategy. Managing risks in a conscious manner
increases the likelihood of achieving our strategy and
business objectives. A proactive approach ensures risk
management is part of our executive conversations
and is embedded in our processes. This benefits our
decision-making and is essential to create and
preserve long-term value.
In 2023 we conducted our first double materiality
assessment to prepare for compliance with the
Corporate Sustainability Reporting Directive (CSRD)
requirements. The risks identified as part of our risk
management process have been used as input to
perform this assessment.
Risk Management is part of the
HEINEKEN Business Framework
The HEINEKEN business framework articulates the key
elements that the Company relies on to operate
effectively and deliver long-term value creation while
protecting its people, assets and reputation.
Our Purpose, Our Dream and Our Values underpin our
EverGreen strategy, enabled by our organisational
structure and strong governance. The behaviours give
clear guidance to all employees on how to act and
foster a culture of achievement, collaboration and
growth, underpinned by a Behaviours Framework that
reflects the expected attitudes in decision-making.
Continuous Risk Management supports the
achievement of business objectives, based on our Risk
Assessment Cycle, the HEINEKEN Code of Business
Conduct and the HEINEKEN Rules.
As part of the Risk Assessment Cycle, operating companies and their Management Teams review and update
their risks on a continuous basis throughout the year. The Code of Business Conduct and its underlying policies set
out HEINEKEN’s commitment to conduct business with integrity and fairness, and respect for the law and our
values. The HEINEKEN Rules articulate how we work and the Standards to which we commit. They are a key
element for managing the risks faced by our Company and translating our objectives into clear instructions on
how to conduct our daily business.
HEINEKEN’s systems of risk management and internal control, which are based on the COSO Enterprise
Risk Management and Internal Control Reference model, form a fundamental part of the HEINEKEN
Business Framework.
Our Business Framework
Risk profile
HEINEKEN is predominantly a single-product business, operating throughout the world in the alcohol industry.
HEINEKEN is present in more than 70 countries, with a growing share of its revenues originating from
emerging markets.
An increasingly negative perception in society towards alcohol could prompt legislators to implement further
restrictive measures, such as limitations on availability, advertising, sponsorships, distribution and points of sale,
and increased tax. This may cause changes in consumption trends, which could lead to a decrease in the brand
equity and sales of HEINEKEN’s products.
HEINEKEN has undertaken business activities with other market parties in the form of joint ventures and
strategic partnerships and with independent distributors. Where HEINEKEN does not have effective control,
decisions taken by these entities may not be fully harmonised with HEINEKEN’s strategic objectives. Moreover,
HEINEKEN may not be able to identify and manage risks to the same extent as in the rest of the Group.
Risk appetite
HEINEKEN’s risk appetite is the result of its wide
geographical spread, prudent financial management
and commitment to long-term value creation. Risks
are taken consciously, assessing their impact on
HEINEKEN’s objectives. The level of risk HEINEKEN is
willing to take depends on the type of objective it
impacts (reputational, financial or business
continuity related).
Reputational
HEINEKEN is reliant on the reputation of its brands
and the protection of its intellectual property rights.
Reputation management is of utmost importance to
HEINEKEN. We have invested considerable effort in
protecting our brands, including the registration of
trademarks and domain names. We aim to reduce
the risks that could negatively impact our reputation
to the furthest extent possible, accepting that this
may come at a cost.
Financial
HEINEKEN is keen on pursuing commercial
opportunities to deliver superior and balanced
growth, accepting uncertainties linked to its strategic
choices and the context of the individual markets in
which it operates.
Business continuity
HEINEKEN makes the availability of its brands a
priority, accepting only minimal disruptions to its
operations. In addition, HEINEKEN continuously
invests in making the organisation future-proof and
ensuring the sustainability of the business.
36
Risk Management
Internal control
Organisation
Processes
Main risks
The risk overview on the next pages highlights the
main risks that could hinder HEINEKEN in achieving
its strategy and business objectives.
This is not a full overview of all risks and uncertainties
that may affect the Company. As new risks emerge
and existing immaterial risks evolve, timely discovery
and accurate evaluation of risks are at the core of
HEINEKEN’s risk management system.
Financial risks are reported separately in note 11.5
in the Financial Statements on pages 113–116.
The Statement of the Executive Board is included
in the Corporate Governance statement on pages
45–52.
The ways we manage risks related to Responsible
Consumption, Business Conduct and Human Rights
are further detailed in the Sustainability Review
section of our Annual Report on pages 132–196.
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
HEINEKEN’s internal control activities aim to provide
reasonable assurance as to the accuracy of financial
information, non-financial disclosures, the Company’s
compliance with applicable laws and internal policies,
and the effectiveness of internal processes.
Internal controls have been defined at operating
entity level (HEINEKEN Rules – comprising all
mandatory standards and procedures) and at process
level (Process and Control Standards) for key
processes, including financial reporting, IT and Tax.
Compliance with company policies is periodically
assessed. Deviations from the defined standards
are included in the global monitoring and follow-up
processes, supporting management in addressing
these deviations. Management is responsible for
the definition and timely implementation of action
plans to remediate any deficiency identified as part
of these assessments. The results are reported to the
Executive Board.
The HEINEKEN Rules, policies and controls are
periodically updated to reflect both the Company key
risks and the extent to which the Company is willing
and able to mitigate them.
Financial
Statements
Risk Committee
Sustainability
Review
Other
Information
The Executive Board of HEINEKEN is accountable for
risk management, risk oversight and the protection of
HEINEKEN’s reputation, value of assets and brands.
The Board is assisted by the Risk Committee, chaired
by the CFO, in regular reviews of the Group risk
assessment cycle that summarises the Company’s key
risks, associated mitigating actions and monitoring
activities. These reviews consider the level of risk that
HEINEKEN is willing to take and the type of
HEINEKEN’s objectives it impacts.
The Risk Committee identifies changes to the
Company’s risk exposure and proposes interventions
if required.
For the organisation of risk management activities,
HEINEKEN applies a ‘three lines of defence’ model.
First and most important is the quality and behaviour
of operational management, the first line of defence.
They have the ownership, responsibility and
accountability for assessing and mitigating risks.
Operational management is supported by the second
line of defence functions that oversee compliance
with HEINEKEN’s policies, processes and controls,
facilitate the implementation of risk management
practices and drive continuous improvements of
internal controls.
As third line of defence, the internal audit function
(‘Global Audit’) is mandated to perform Group-wide
reviews of key processes, projects and systems, based
on HEINEKEN’s strategic priorities and most
significant risk areas. Global Audit provides
independent and objective assurance and consultancy
services. It employs a systematic and disciplined
approach to evaluate and improve the organisation’s
governance and risk management process including
reliability of information, compliance with laws,
regulations and procedures, and efficient and
effective use of resources. The methodology followed
by Global Audit is in accordance with the standards of
the Institute of Internal Auditors.
To support the Executive Board’s external
representations, a formal bi-annual Letter of
Representation process is in place. It requires
management to take responsibility for accurate and
complete reporting on financial and non-financial
reporting disclosures, financial reporting controls and
on compliance with the Code of Conduct and other
HEINEKEN Rules, as well as identifying and reporting
on fraud and irregularities.
HEINEKEN’s risk management activities seek to
identify and appropriately address any significant
threat to the achievement of the Company’s strategy
and business objectives, its reputation and the
continuity of its operations.
HEINEKEN’s risk management system enables
management to identify, assess, prioritise and
manage risks on a continuous and systematic basis,
and covers all subsidiaries across regions, countries,
markets and corporate functions. Ongoing
identification and assessment of risks, including new
risks arising from changes in the global or local
business environment, are part of HEINEKEN’s
planning, performance and risk management cycles.
Risk assessments are performed by every subsidiary
and all global functions. The implementation of
responses and progress of risk mitigating measures
is monitored on a quarterly basis.
Risk assessment outcomes are aggregated at a global
level and serve as basis for determining HEINEKEN’s
risk exposure and risk management priorities by the
Risk Committee. Accountability for mitigating,
monitoring and reporting on the most significant risks
is assigned to functional directors who report on
progress and residual risk levels three times per year
to the Risk Committee.
HEINEKEN continues to invest in the evolution of risk
management in the Company. Building on the
existing risk and controls mechanisms, improvements
are aimed at driving business ownership of risks,
increasing business involvement in risk management
and expanding the integrated view of risks.
37
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Risk Management
Regulatory changes related to alcohol
What could happen?
The topic of alcohol and health is under scrutiny in many
markets. This may prompt regulators to take further
measures limiting HEINEKEN’s freedom to operate, for
example, through restrictions or bans on advertising and
marketing, sponsorship, availability of products, adding
health warnings to labels, increased taxes and duties or
imposing minimum unit pricing. This could lead to lower
overall consumption or to consumers switching to different
product categories.
Recent developments
Authorities and regulators continue to introduce restrictive
measures on alcohol consumption and sales. Recent
examples are restrictions in marketing and labelling
requirements for specific markets. These measures can
have a negative impact on our business in the affected
markets.
What are we doing to manage this risk?
Responsible consumption is an important element of our
Brew a Better World 2030 strategy, because HEINEKEN
strongly believes in the importance of reducing alcohol-
related harm. By using the power and reach of our brands
through campaigns like the award-winning ‘When You
Drive Never Drink’, HEINEKEN strives to make responsible
consumption aspirational for all consumers. We aim to
invest at least 10% of Heineken® media spend into
responsible consumption campaigns each year, aiming to
reach one billion consumers.
We also work closely with stakeholders to prevent and
reduce the harm caused by abuse such as underage
drinking or drinking and driving. Our operating companies
are engaging in formal partnerships with local stakeholders
(like governments, NGOs or specialists) to tackle harmful
drinking.
We also stepped up our product labelling guidelines to
provide consumers with more information about our
products. We are aiming for clear and transparent
consumer information on 100% of our products in scope,
including full nutritional information and ingredients on
pack, recycling and legal drinking age symbols and a QR
code on pack that links to further information on alcohol
and health.
Explore further: Brew a Better World 2030
Strategy - Responsible, pages 166–168
Economic and political environment
Environmental legislation
Changing consumer & beverage trends
What could happen?
HEINEKEN could not be able to respond to the impact of
environment-related changes on our operations in a timely
manner. If new environmental legislation is introduced,
this could lead to legal claims, increased compliance costs,
restrictions on production, packaging, distribution, selling
and marketing of our products, reputation damage, and
limits on our licence to operate resulting in negative
business impact.
Recent developments
Speed and scope of environment-related changes on our
operations are increasing. Markets need to be prepared to
respond and adapt to these changes in a timely manner to
prevent restrictions in all areas of the value chain and
significant costs to ensure compliance.
What are we doing to manage this risk?
Environmental sustainability is one of the priorities of
HEINEKEN’s Brew a Better World sustainable development
strategy. HEINEKEN continuously monitors existing and
emerging environmental issues and regulations across the
globe to ensure awareness and compliance and to prepare
the business for future changes. Current and future
environmental regulations are being assessed and cross-
functional teams assigned to implement the actions
needed.
Beyond this, HEINEKEN closely works with experts such as
NGOs, universities, governments and suppliers across the
value chain. It also co-operates with peer companies in
international and national platforms such as The Brewers
of Europe, the Beverage Industry Environmental
Roundtable and the Dutch Sustainable Growth Coalition.
Explore further: Brew a Better World 2030
Strategy - Environmental, pages 147–158
What could happen?
Throughout the world, local or regional economic and
political uncertainties could impact our business and that
of our customers. In particular, the risk of an economic
recession, change of law, trade restrictions, inflation,
fluctuations in exchange rates, devaluation,
nationalisation, financial crisis or social unrest could
adversely affect our revenues and profits.
Recent developments
The global economy could trend to a slow down due to an
uncertain political landscape impacted by the war in
Ukraine and conflicts in Africa and Middle East; at the
same time, high inflation and higher interest rates have led
to a tightening of monetary policy. This could lead to more
structural shifts and lead to a prolonged recession of the
global economy, with governments tighter monetary
policies weigh on real disposable income and
consumption. This could increase the risk of bankruptcies
and the potential failure of certain sectors to recover. As a
consequence, structural unemployment – especially for
youth – is likely to surge with knock-on effects on consumer
demand. Public debt, the disruption of global value chains
and barriers to the cross-border movement of people and
goods round out the key risks.
Agility has become a priority to enable businesses to
navigate subsequent changes in laws, currency
movements, import restrictions, scarcity of hard currencies,
commodity pricing and their impact on the Company’s
profit.
What are we doing to manage this risk?
HEINEKEN has set up various tools to limit the impact of
such events on its business. They include supplier
management, short-term liquidity management, tight
foreign exchange monitoring, prudent balance sheet
measures and scenario planning in respect to resource
allocation including various cost and value optimisation
initiatives and risks and opportunity assessments. We
shifted to the practise of a monthly rolling forecast instead
of fixed forecasts updates throughout the year and
expressly introduced much more scenario planning.
HEINEKEN has monitoring mechanisms in place globally
and locally to allow us to monitor, report and engage
proactively on political risks. For events which could
threaten the continuity of the business, contingency plans
are in place. With our strategic priority of ‘Fund the growth,
fuel the profit’, HEINEKEN continuously reviews its cost
base to drive productivity and increase operating leverage.
Explore further: Fund the growth, fuel the profit,
pages 16–17
What could happen?
Consumers have an ever-expanding choice of beverages
and brands available to meet their needs. There is an
increasing risk of non-beer competitors reaching the same
consumers and occasions as beer players, through product
offerings such as hard seltzers and pre-mix spirits cocktails.
This requires HEINEKEN to constantly adapt its product
offering, innovate and invest to maintain the relevance
and strength of its brands, while meeting new and evolving
consumer needs. Failure to do so would, in the longer term,
affect our revenues, market share and, possibly, our brand
equity.
Recent developments
The beverage landscape is rapidly changing, with many
categories growing faster than beer. There's a significant
risk of losing market share to other beverages, as long-held
boundaries between beer, wine, spirits and non-alcoholic
beverages are blurring, changing the face of competition
and stretching brands into new domains.
Within the beer category, the rise of low- and no-alcohol
products have been the most noticeable changes due to
an increased consumer focus on health and well-being.
Beyond beer, the significant diversification of choice in
ready to drink beverages is remarkable but volatile. Thus, it
is crucial to offer relevant propositions that resonate with
consumers and meet their evolving needs.
What are we doing to manage this risk?
The evolving beverage landscape presents both
opportunities and risks for HEINEKEN. To succeed,
HEINEKEN needs to focus on brand building,
premiumisation, differentiation from other beverage
categories, and adapting to changing consumer
preferences and behaviours. The key commercial levers
that are considered priorities for every market are: brand
power increase for strategic and game changer brands,
innovation boost in beer including low- and no-alcohol and
beyond beer, maximisation of distribution and value
creation through smart pricing, promotions, pack/price
architecture and trade terms.
HEINEKEN is constantly working to maintain, develop and
strengthen its portfolio and competitive advantages, in
particular, in Premium spaces, through an integrated Brand
Building Process, making it more appealing to consumers.
HEINEKEN has also embarked on an extensive Consumer
Inspired Growth programme, helping us move from
knowing beer to knowing consumers. By thoroughly
understanding consumer needs in beer and beyond and
comparing them within and across markets, we can
uncover scalable innovation opportunities.
Explore further: Shape the future of beer and
beyond, pages 11–15. Brew a Better World 2030
Strategy - Responsible, pages 166–168
38
Risk Management
Leadership, talent and capabilities
Health and safety
Product safety and integrity
Supply chain continuity
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
What could happen?
Our EverGreen ambition requires us to unlock the full
potential of our people and organisation. If HEINEKEN is
not successful in intentionally attracting, retaining and
developing talent with the required skills and capabilities, it
could have an impact on business continuity and results.
Recent developments
Within the context of EverGreen, we are on a journey to
build strategic capabilities, deepen and diversify our
succession bench and amplify the impact of our senior
leaders.
What are we doing to manage this risk?
Talent Management is one of the strategic capabilities in
our EverGreen Strategy – building leadership competence
with a strong focus on proactive talent identification,
development and retention at all levels (early/mid-careers
to Functional Leadership & General Management).
In 2023, we continued the journey to embed our potential
model within our Talent Review processes through
effective career and development conversations facilitated
by People Managers. Leadership Development also
remains a top priority with the continuation of our global
leadership development programmes.
The Global Talent Acquisition Strategy and supporting
structure was defined to strengthen the capabilities
required to attract, identify and recruit talent required
globally to deliver on our EverGreen ambitions.
We remain on the journey to shape an inclusive and
equitable environment through continued focus on three
core pillars: fostering courageous leadership, promoting an
inclusive culture and creating equal opportunities. As part
of our commitment to equitable practices throughout the
employee lifecycle, we incorporate Diversity Equity and
Inclusion (DEI) principles in our core processes . In 2023,
we have also met our ambition to pay our employees at
least a fair wage, as determined by the Fair Wage
Network, an NGO.
Other
Information
Explore further: Unlock the full potential of our
people, pages 27–29
What could happen?
HEINEKEN aims to provide a healthy and safe workplace
for all employees, temporary workers and contractors.
Despite the controls in place, HEINEKEN employees,
temporary workers, contractors and visitors may be
impacted by uncontrolled events in the brewery, supply
chain, route-to-market or in our offices, which could lead to
illnesses, serious injuries or fatalities potentially followed by
business disruption, losses, reputational or legal claims.
Recent developments
Despite our continuous efforts to provide safe working
conditions, in 2023 we still experienced incidents with
significant safety impact on our premises, including events
resulting in three fatal accidents involving one employee, a
temporary worker and a contracted employee, underlining
the importance of realising further improvements in the
area of safety, health and well-being.
What are we doing to manage this risk?
Our Safety, Health and Well-being strategy reflects our
company value of Care. We focus on shaping a leading
Health & Safety culture fully embedded in our ways of
working, counting on everyone’s leadership, engagement
and participation.
Throughout the Company, the HEINEKEN Life Saving
Commitments target the activities that carry the greatest
safety risks to employees, temporary workers and
contractors.
As the availability of quality (emergency) healthcare
services varies across the large number of countries and
regions in which we operate, ensuring access to quality
medical care to our national and international employees
and their family members remains a priority.
Furthermore, to ensure healthcare coverage, HEINEKEN
counts on more than 430 health professionals worldwide.
Our employees and dependents have access to broad
medical services including screening and lab tests,
medicines and pharmacy, health benefits, disease
prevention and health promotion projects, emergency
evacuations, health training and education.
Within the health area, mental health has been identified
as an emerging risk. To address this risk, we have to keep
investing in our internal well-being programme addressing
the four dimensions of well-being: professional, emotional,
social and physical.
Explore further: Brew a Better World 2030
Strategy - Social, pages 159–165
What could happen?
Poor quality or contamination of HEINEKEN products, be it
accidental or malicious, could result in health hazards,
reputational damage, financial liabilities, disruption of the
supply chain and product recalls.
Recent developments
The environment in which we operate is constantly
changing. Changes to our product portfolio, growing
insights of hazards associated with potential food
contaminants, growing consumers’ concern on food safety
and a more complex legal environment, make it necessary
to constantly take action to adapt and respond to these
changes, to ensure food safety for our consumers.
What are we doing to manage this risk?
HEINEKEN has established a comprehensive Company-
wide Quality Assurance programme covering employee
competencies, production standards, recipe governance,
suppliers’ governance and production material risks.
Continuous improvement is achieved through global
compliance monitoring and systematic gap-closing.
It is mandatory for all our production units, as well as any
outsourced production of HEINEKEN brands, to have an
external certified Food Safety Management System, which
should be in accordance with the systems approved by
GFSI (Global Food Safety Initiative) and an external
certified Quality Management System based on ISO9001.
All raw, auxiliary and packaging materials used in
production must be purchased from approved suppliers
and must comply with our Production Material
Specifications. All products have a Basic Recipe in place, in
accordance with our Recipe Governance standards.
Should a risk materialise, global recall and crisis procedures
are in place to mitigate the impact. Specifically, all product
units (including outsourced production of HEINEKEN
brands) are able to block and/or recall products and have
implemented the HEINEKEN Traceability standard.
Compliance to our standards is verified by the production
unit through self-assessments and through Global Supply
Chain compliance audits. Global Supply Chain also carries
out yearly integrity surveys on final products for known
contaminants to assure that the standards in place are
effective.
Moreover, HEINEKEN anticipates new legislation and
emerging risks aided by its partners, suppliers and external
scientific institutions and assures implementation of
measures to avoid such risks.
What could happen?
Supply chain disruptions such as the ocean freight
disruption in the Suez canal can have far-reaching
consequences, including the potential inability to fulfil
orders for crucial clients, financial setbacks, harm to brand
reputation, and a decline in market presence. Substantial
fluctuations in the accessibility or pricing of essential inputs
such as raw materials, commodities, transportation, energy
and water may precipitate either shortages in supply or
elevated operational expenses.
Recent developments
The global supply chain landscape continues to deal with
substantial disruptions. Throughout the year, we have
observed several instances where our suppliers have been
adversely affected by these events, resulting in price
volatility and contractual challenges. The availability of
certain critical resources has become constrained, driven by
the prevailing global political instability.
Furthermore, the growing concerns of climate change and
increasing water shortages are starting to have effects on
how much crops can grow, the availability of resources and
the prices of grains. Considering these developments, it is
imperative for both markets and governments to
proactively address these challenges, implementing
measures to adapt and respond effectively.
What are we doing to manage this risk?
HEINEKEN has effectively minimised the impact of
disruptions by leveraging its extensive global presence and
strong supplier relationships across various regions and
product categories. Our agile sourcing approach (including
our geographic spread of sourcing and local sourcing),
combined with the adaptability of our breweries
worldwide, has ensured the uninterrupted flow of supplies
across our global operations.
We've taken proactive measures to safeguard business
continuity by devising comprehensive plans for
HEINEKEN’s flagship brands in all critical markets, along
with implementing contingency plans within our
operational entities. Our resilience is further reinforced by
our ownership of strategic malt production facilities, long-
term procurement contracts, meticulous water
management strategies, and centralised oversight of
global insurance policies.
HEINEKEN has adopted a watershed-centric strategy
aimed at preserving water resources. Sustainable sourcing
is a top priority within our Brew a Better World 2030
initiative, reflecting our dedication to making a positive
impact on the environment and society.
Explore further: Brew a Better World 2030
Strategy - Environmental, pages 147–158
39
Risk Management
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Increased scrutiny and expectations
of society on multinationals
What could happen?
Public and employee scrutiny of HEINEKEN, should it not
conform to society’s expectations to mitigate our potential
negative impacts on the world and maximise our positive
contribution, can lead to significant reputational damage
to the Company or to the brands.
Recent developments
Stakeholder expectations, including those of employees,
towards companies, their Environmental, Social and
Governance (ESG) strategies and performance, are on the
rise. Companies also face growing pressure to increase the
positive contribution they make, including measures to
address societal and environmental issues, and to share
consistent and transparent information that allows
stakeholders to assess their sustainability performance and
benchmark them versus peers in their industry.
What are we doing to manage this risk?
At HEINEKEN we are raising the bar. Our Brew a Better
World 2030 strategy consists of three pillars and nine
ambition areas. Each ambition area contains one or more
concrete and measurable goals.
Brew a Better World remains our foundation and our
framework for working with others. Our strategy raises our
ambitions on climate and water action. We continue our
efforts to support the social agenda and promote
moderate consumption of alcohol.
The Green Diamond continues to guide us towards ‘what
winning looks like’: we aim to strike the right balance
between short-term delivery and long-term sustainability,
between top-line growth and overall stakeholder value
creation. ‘Sustainability and Responsibility’ is one of the
four priorities alongside growth, profitability and capital
efficiency.
We disclose our sustainability performance in a combined
Annual Report, on our website and via social media
channels. HEINEKEN monitors trends and developments in
the ESG area across the globe, to make sure we respond
adequately and in a timely manner to increasing societal
expectations.
Explore further: Our EverGreen strategy, page 9.
Raise the bar on sustainability and responsibility,
pages 18–22. Stakeholder engagement and
materiality, pages 134–135. Climate-related risks
assessment (TCFD analysis), pages 136–142. Brew
a Better World 2030 strategy, page 143. World
Economic Forum core metrics and disclosures,
pages 172–177. Other climate-related disclosures,
page 178–181
Distribution channel transformation
Information security
Digital transformation
What could happen?
The digital disruption is creating new routes to customers
and consumers/shoppers, which is potentially a threat if we
would be disintermediated and lose connection to
transactions and consequently visibility on customer and
consumer data.
Recent developments
New B2B and B2C players continue to enter the market
although this has slowed down following increased
financing cost. Some key consumer packaged goods
players, including major competitors in our category, are
accelerating their investments. Major online retailers
continue to strengthen their omnichannel strategy, owning
on- and off-line retail. Electronic point of sales systems are
increasingly used to collect and leverage customer and
consumer data.
What are we doing to manage this risk?
HEINEKEN has accelerated digitalisation in both
fragmented trade and more traditional Retail eCommerce.
For fragmented trade we have shaped a clear vision,
strategy and organisational set-up which is structured
around the customer. We call that the Unified Customer
Ecosystem (UCE). The goal is to create a seamless
experience for our customers which will result in a
strengthened customer relationship and better visibility on
what happens at the moment of purchase. The
acceleration has resulted in significant scale of transactions
on our owned digital platforms giving us in many markets
an online leadership position. We are also constantly
improving our e-retail capability level through clear
playbooks and training methods. This supports our
ambition to be the number one partner of choice for our
retail partners.
Explore further: Become the best-connected
brewer, pages 23–26
What could happen?
HEINEKEN’s business increasingly relies on technology,
both in the office environment and in the industrial control
domain of its breweries. Failure of our systems as well as
cybersecurity incidents could lead to business disruption,
loss of confidential information, unauthorised access to
our data, as well as a breach of data privacy regulations. All
of this might lead to financial or reputational damage.
Recent developments
HEINEKEN’s digital footprint is expanding rapidly, in line
with the strategy to become the best-connected brewer.
Our Company is and will be more connected with our
customers, consumers, suppliers and employees than ever.
Attacks are becoming more sophisticated and potential
consequences are more punitive and destructive in nature.
A growing number of attacks, most notably increasing
cases of malware and phishing, are actively blocked by our
Cyber Defense Operations (CDO) team. Geopolitical
tensions have led to an increase of hacktivism as well as a
slow increase of cyber warfare activities. Both will increase
the likelihood of a cyber incident. We observe an increase
in cyberattacks on our customers as well as key suppliers
leading to security of supplies concerns.
On top of this, regulations continue to place stricter
security requirements on data processing by HEINEKEN
and its ecosystem of partners.
What are we doing to manage this risk?
Cybersecurity remains a top priority within HEINEKEN. All
functions collaborate closely to act promptly and aligned in
case of cyber incidents at HEINEKEN or one of our
suppliers or customers. The portfolio of cybersecurity
initiatives, which is evaluated regularly, is executed to
address cybersecurity threats in both our office systems
and Industrial Control Domain. Our Cyber Defence and
Operations teams monitor and act upon cyberattacks
24/7 globally.
Our main focus is to enhance the resilience of the current
and future technology landscape of HEINEKEN, while
continuously increasing employee security/privacy
awareness. Mandatory trainings on Information Security
are in place for all employees.
Explore further: Become the best-connected
brewer pages 23–26
What could happen?
In recent years, HEINEKEN has engaged in several
significant digital transformation programmes. Our large
number of operating companies and fragmented data
and technology landscape represent specific challenges to
these programmes. Furthermore, the pace of change (e.g.
disruptive technologies such as (Gen)AI) is constantly
increasing. These strategic transformation programmes
may not deliver the expected benefits or may incur
significant cost or time overruns.
Recent developments
The world becomes more digital, and more
(inter)connected. Data is more and more an asset and
technological developments and its opportunities quickly
evolve. HEINEKEN will need to continue to develop its
capabilities to stay engaged with its consumers, seamlessly
serve its customers and ensure its processes are as efficient
as possible.
What are we doing to manage this risk?
The Digital and Technology Function, with representation
on the Executive Team, has the objective to deliver business
value through digital transformation of our route-to-
consumer, while modernising and simplifying our data and
technology landscape across all operating companies.
Programme Management and portfolio management is
put in place to ensure prioritisation, de-bottlenecking and
value delivery across both the entire value chain and
Operating companies. The Digital and Technology
Function also continuously scans the external market for
upcoming opportunities and threats as well as new
technologies.
Explore further: Become the best-connected
brewer, pages 23–26
40
Risk Management
Reporting
Non-compliance
Climate risks
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
What could happen?
Deviations from the common reporting processes and
related controls could impair the accuracy of financial and
non-financial data used for Group reporting and external
communications.
Recent developments
External non-financial reporting requirements are
changing fast. Developments in upcoming frameworks like
CSRD and EU taxonomy are closely monitored and when
effective, being embedded in the control environment.
HEINEKEN is preparing to report under the CSRD effective
as of 1 January 2024 with setting up enhanced
governance, reporting processes and controls.
What are we doing to manage this risk?
HEINEKEN is utilising enhanced techniques and
technology to continue to drive the improvement and
standardisation of its reporting processes and controls and
to harmonise its system landscape.
HEINEKEN has implemented a common framework across
its operating companies which includes Internal Control
over Financial Reporting, Common Accounting Policies,
Standard Chart of Accounts and periodic mandatory
training.
The assurance model includes active monitoring of control
execution, critical access and segregation of duties.
HEINEKEN continues to strengthen the governance,
reporting procedures and control framework around non-
financial data to further improve the quality of the data
reported under its Brew a Better World programme and
the new regulatory non-financial reporting frameworks. As
of 2023, the control framework is being implemented
across all operating companies and global functions to
enhance the reporting process for BaBW and this initiative
will continue through 2024. Additionally, the assurance
model for CSRD reporting is rolled out as a component of
the CSRD implementation.
Explore further: Notes to the Consolidated
Financial Statements, pages 79–124. Other
climate-related disclosures, pages 178–181.
Reporting basis of non-financial indicators, pages
182–196
What could happen?
Changes in the legal and regulatory environment tend to
increase the risk of non-compliance with local and global
laws and regulations. Failure to comply with applicable
laws and regulations could lead to enforcement, fines, civil
(damage) claims and reputational damage. Across many
geographies, law enforcement has increased over the past
years, in particular with regard to anti-bribery and
corruption, competition and data privacy laws. This leads
to increased risk of allegations of violations of laws and
regulations by law enforcers as well as by private parties.
Recent developments
In respect of alleged competition law violations, there is an
increasing trend of private parties pursuing civil claims for
damages. In addition to these trends, continuously
expanding sanctions and export controls are posing
increased compliance risks.
What are we doing to manage this risk?
HEINEKEN is constantly looking to enhance its internal
compliance system and resilience to adapt to changes in
the legal environment. HEINEKEN has embedded legal
compliance in its risk and controls system and has
established processes and governance to drive
implementation and compliance with the Company Rules
and the HEINEKEN Code of Business Conduct. Our anti-
corruption and sanctions compliance framework includes
due diligence and ongoing monitoring of business
partners, as well as screening of transactions against
sanctions lists. Our focus on competition law training and
compliance has increased, including new training initiatives
which have been launched in tandem with the sales
function.
Explore further: Corporate Governance statement,
pages 45–53
What could happen?
Climate changes could negatively impact the availability
of natural resources such as water and agricultural
commodities which can lead to interruption of production
and loss of revenue. In addition, HEINEKEN will be
impacted by carbon taxation.
Recent developments
Our Brew a Better World 2030 strategy, announced in
2021, raises the bar on HEINEKEN’s environmental, social
and responsible consumption ambitions. The strategy
underpins our focus on climate action and translates our
ambition into targets and action plans to reduce emissions
and help restore healthy functioning watersheds.
The implementation of the Task Force on Climate-related
Financial Disclosures (TCFD) framework supported us in
defining the climate-related risks that are more significant
for our operations. These are: the impact of carbon pricing
on our value chain and own operations, water stress
impact on our own operations and climate-related barley
yield losses. Our first disclosure following TCFD
recommendations was included in the Annual Report
2022.
What are we doing to manage this risk?
We understand the impact of climate change on the
natural resources we use and we collaborate with
stakeholders and suppliers to secure their supply and
protect our licence to operate. We continue to focus on
delivering our water strategy to protect the watersheds
from which we source our water and build resilience to
water availability. In parallel, we are adapting our
processes, materials, and sourcing/production regions to
create the agility required to ensure continuity of supply
and we are reducing carbon emissions in line with our net
zero carbon strategy across the value chain.
Explore further: Climate-related risks assessment
(TCFD analysis), pages 136–142
41
Heineken
N.V.
Annual
Report
2023
Financial Review
On the path to long-term
value creation
“In 2023 we advanced our multi-year EverGreen transformation, navigating
challenging macroeconomic conditions across our markets, including significant
pricing to offset very high levels of inflation. We surpassed our productivity
commitments and delivered operating profit growth in three out of four regions.
Simultaneously we stepped up investments in our brands,capabilities, digital
programmes and behind our sustainability ambitions. We remain committed to
investing behind EverGreen in the pursuit of long-term sustainable value creation.”
Harold van den Broek
Member of the Executive Board and Chief Financial Officer
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Key figures1
(in € million unless otherwise stated)
Revenue
Excise tax expense
Net revenue
Marketing and selling expenses
Personnel expenses
Amortisation, depreciation and impairments
Other net (expenses)/income
Total net other (expenses)/income
Operating profit
Interest income
Interest expense
Net interest income/(expenses)
Other net finance income/(expenses)
Share of profit of associates and joint ventures
Income tax expense
Non-controlling interests
Net profit
EBITDA2
2022
Beia
Reported
34,643
36,375
(5,949)
(6,013)
28,694
30,362
(2,735)
(2,767)
(4,005)
(4,353)
(1,679)
(3,096)
(15,773)
(16,917)
(24,192)
(27,133)
4,502
3,229
73
(452)
(380)
(63)
263
(1,124)
(363)
2,836
6,444
90
(640)
(550)
(375)
218
(121)
(97)
2,304
6,543
Eia
(33)
8
(25)
(43)
74
207
6
244
219
(1)
6
5
(111)
40
8
(6)
155
52
Reported
34,676
(5,957)
28,719
(2,692)
(4,079)
(1,886)
(15,779)
(24,436)
4,283
74
(458)
(384)
48
223
(1,131)
(357)
2,682
6,392
Eia
(65)
12
(54)
1
139
1,268
(141)
1,268
1,214
0
(4)
(4)
34
52
(831)
(136)
329
(2)
Beia
36,310
(6,001)
30,308
(2,766)
(4,214)
(1,828)
(17,058)
(25,865)
4,443
90
(644)
(554)
(343)
270
(952)
(233)
2,632
6,541
Currency
translation
Consolidation
impact
(1,168)
1,253
305
(864)
76
69
41
576
762
(102)
(6)
57
51
68
(7)
(2)
(2)
6
(366)
887
(52)
(150)
(64)
(656)
(922)
(35)
0
(55)
(55)
(12)
3
26
(14)
(87)
Organic
growth
1,582
9
1,591
(54)
(128)
(126)
(1,204)
(1,513)
78
23
(193)
(170)
(336)
11
148
146
(123)
2023
Organic
growth %
4.6%
0.1%
5.5%
(2.0) %
(3.2) %
(7.5) %
(7.6) %
(6.3) %
1.7%
31.8%
(42.7) %
(44.8) %
(537.3) %
4.3%
13.2%
40.2%
(4.3) %
1 This table will not always cast due to rounding.
2 EBITDA is derived from 'Operating profit' less 'Amortisation, depreciation and impairments' plus 'Share of profit of associates and joint ventures'.
42
Heineken
N.V.
Annual
Report
2023
Financial Review
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.
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.
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.
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.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
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.
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.
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.
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.
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%).
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.
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.
28,6941,591(864)88730,3085430,362FY 2022 Net revenue beiaOrganic growthCurrency translationConsolidation impactFY 2023 Net revenue beiaEiaFY 2023 Net revenue IFRS4,50278(102)(35)4,443(1,214)3,299FY 2022 Operating profit beia Organic growthCurrency translationConsolidation impactFY 2023 Operating profit beia EiaFY 2023 Operating profit IFRS 43
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Financial Review
Net profit
Net profit was €2.3 billion (2022: €2.7 billion). The negative impact of exceptional items and amortisation of
acquisition related intangibles on net profit in 2023 was €329 million (2022: €155 million), where the higher
exceptional expenses in operating profit were partially offset by the exceptional benefits from the recognition of
€661 million of previously unrecognised deferred tax assets in Brazil.
Net profit (beia) declined 4.3% organically to €2.6 billion (2022: €2.8 billion). The gains from higher operating
profit, higher profits from associates and joint ventures and lower minority interests and income taxes were more
than offset by a significant increase in other net financing expenses and higher interest expense.
Earnings per share – diluted
Earnings per share – diluted decreased to 4.09 (2022: 4.66). Earnings per share – diluted (beia) decreased by
5.2% from €4.92 to €4.67.
Capital expenditure and cash flow
In millions of €
Cash flow from operations before changes in working capital and
provisions
Total change in working capital
Change in provisions and post-retirement obligations
Cash flow from operations
Cash flow related to interest, dividend and income tax
Cash flow from operating activities
Cash flow used in operational investing activities
Exceptional items and amortisation of acquisition-related intangibles (eia)
The 2023 exceptional items and amortisation of acquisition-related intangibles on net profit and loss amount to
€329 million net expense (2022: €155 million net expense). This amount consists of:
– €385 million (2022: €333 million) of amortisation of acquisition-related intangibles and inventory recorded in
Free operating cash flow
Cash flow used in acquisitions and disposals
Cash flow used in financing activities
operating profit, of which € 317 million in amortisation, depreciation and impairments (2022: €333 million) and
€68 million in raw material consumables and services (2022: nil).
Net cash flow
– €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
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.
Cash conversion ratio
Capital expenditure related to property, plant and equipment and intangible assets (CAPEX) amounted to
€2,677 million (2021: €2,011 million) representing 8.8% of net revenue (beia). The investments in the year
include returnable packaging materials across several markets and capacity expansion in Brazil.
– net restructuring expenses recorded in personnel expenses of €130 million (2022: €70 million).
Capital expenditure related to PP&E and intangible assets (capex)
– €40 million exceptional benefit recorded in other income related to tax credits in Brazil (2022: €44 million net
benefit as reduction recorded in marketing expense related to tax credits in Brazil).
In millions of €
Purchase of property, plant and equipment
Purchase of intangible assets
Capital expenditure related to PP&E and intangible assets (capex)
Free operating cash flow amounted to €1,759 million (2022: €2,409 million) 2022, mainly due to higher CAPEX,
interest and income taxes paid.
– €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 exceptional net benefits).
– €30 million of exceptional net finance expenses, mainly related to €125 million of exceptional net expense
related to the one-off impact of the devaluation of the Nigerian Naira, €76 million of exceptional net benefit
related to the net monetary gain resulting from hyperinflation, €30 million of exceptional net benefit mainly
related to interest on tax credits in Brazil and €11 million other exceptional net finance expenses (2022: €106
million, exceptional net finance benefit, mainly related to the net monetary gain resulting from hyperinflation of
€94 million).
– €52 million of exceptional net expense (2022: €40 million net expense) included in the share of profit of
associates and joint ventures, mainly relating to the amortisation of acquisition-related intangible assets.
Financial structure and liquidity
In millions of €
Total equity
Deferred tax liabilities
Post-retirement obligations
– €831 million of exceptional net benefit in income tax expense, mainly related to the recognition of previously
unrecognised deferred tax assets in Brazil of €661 million (2022: €8 million of exceptional net expense in income
tax expense.
Provisions
Gross debt
– Total amount of eia allocated to non-controlling interests amounts to €136 million net benefit (2022: €6 million,
Other liabilities
net benefit).
Total equity and liabilities
2023
22,789
2,213
586
833
18,238
10,494
55,153
%
41
4
1
2
33
19
100
2022
21,920
2,138
568
798
16,377
10,605
52,406
%
42
4
1
2
31
20
100
2023
2022
6,127
(146)
(32)
5,949
6,347
(480)
(207)
5,660
(1,519)
(1,164)
4,430
4,496
(2,671)
(2,087)
1,759
(905)
(816)
38
2,409
(199)
(3,127)
(917)
61%
75 %
2023
2,434
243
2,677
2022
1,791
220
2,011
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Heineken N.V. was assigned solid investment grade credit ratings by Moody’s Investor Service and Standard &
Poor’s. On 27 November 2023 Moody’s affirmed A3/P-2 ratings with stable outlook. Standard & Poor’s affirmed
the BBB+/A-2 ratings with stable outlook on 8 June 2023.
Currency split of net debt
This currency breakdown includes the effect of derivatives, which are used to hedge intercompany lending
denominated in currencies other than Euro. Of total net interest-bearing debt, 75% is denominated in Euro,
13% in US Dollar and US Dollar proxy currencies and 6% in British Pound. This is including the effect of cross-
currency interest rate swaps and lease liabilities under IFRS 16. The fair value of the cross-currency interest rate
swaps forms part of net debt.
Currency split of net debt
Bond maturity profile
(incl. the currency effect of cross-
currency interest rate swaps)
in millions of €
Financial Review
Net debt/EBITDA (beia) ratio*
* Includes acquisitions and excludes disposals on a 12-month pro-forma basis.
Shareholders' equity increased by €505 million to 20,056 million, mainly driven by the net profit of €2,304
million, the negative other comprehensive income of €272 million, a decrease of €943 million due to the 10.3
million share repurchase in HEINEKEN, a decrease of €1,080 million due to dividend paid to shareholders, and
and an increase of €349 million in changes in consolidation due to the Distell acquisition.
Total borrowings amounted to €18,238 million (2022: €16,377 million). Net debt increased to €15,835 million
(2022: €13,531 million) as the cash outflow for acquisitions, share purchases from FEMSA and dividends was
only partially offset by the positive free operating cash flow. Including the effect of cross-currency swaps, 75% of
net debt is Euro-denominated, and 13% is US dollar and US dollar proxy currencies.
The pro-forma 12-month rolling net debt/EBITDA (beia) ratio was 2.4x on 31 December 2023 (2022: 2.1x), in
line with the Company's long-term target net debt/EBITDA (beia) ratio of below 2.5x.
The centrally available financing headroom at Group level was approximately €3.2 billion at 31 December 2023
(2022: €3.6 billion) and consisted of the undrawn part of the committed €3.5 billion revolving credit facility and
centrally available cash minus centrally issued commercial paper and short-term bank borrowings at group level.
In millions of €
Operating profit
Share of profit of associates and joint ventures
Depreciation and impairments of property, plant and equipment
Amortisation and impairment of intangible assets
Impairment of assets classified as held for sale
EBITDA
Exceptional items
EBITDA (beia)
2023
3,229
218
1,896
980
220
6,543
(2)
6,541
2022
4,283
223
1,537
256
88
6,387
57
6,444
Average number of shares
HEINEKEN has 576,002,613 shares in issue. In the calculation of basic EPS, the weighted effect of own shares
held in treasury (8,489,088 shares) and shares for which dividend is waived by Heineken Holding N.V. (4,064,680
shares) has been excluded. As a result, the weighted average number of shares outstanding was 563,448,845
(2022: 575,563,505).
In the calculation of 2023 diluted EPS (beia), shares to be delivered under the employee incentive programme
(530,775 shares) are added to the weighted average shares outstanding. The weighted average diluted number
of shares outstanding was 563,979,620 (2022: 576,026,120).
Total dividend for 2023
The Heineken N.V. dividend policy is to pay a ratio of 30% to 40% of full year net profit (beia). For 2023, a total
cash dividend of €1.73 per share, a similar amount to last year (2022: €1.73), representing a payout ratio of
36.8%, within the range of our policy, will be proposed to the Annual General Meeting on 25 April 2024 ("2024
AGM"). If approved, a final dividend of €1.04 per share will be paid on 7 May 2024, as an interim dividend of
€0.69 per share was paid on 10 August 2023. The payment will be subject to a 15% Dutch withholding tax. The
ex-dividend date for Heineken N.V. shares will be 29 April 2024.
2.63.42.62.12.4Net debt/EBITDA (beia) proforma ratioLong-term target2019202020212022202375%13%6%6%EURUSD + USD proxyGBPOther1,4601,6831,6001,1009951,0091,5507505009302,7162024202520262027202820292030203120322033>2034
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Corporate Governance statement
Introduction
Executive Board
Heineken N.V. (the ‘Company’) is a public company
with limited liability incorporated under the laws of the
Netherlands. Its shares are listed on the Amsterdam
Stock Exchange, Euronext Amsterdam.
The Company’s management and supervision
structure is organised in a so-called two-tier system,
consisting of an Executive Board (made up of two
executive members) and a Supervisory Board (made
up of nine non-executive members).
The Supervisory Board supervises the Executive Board
and ensures external experience and knowledge are
embedded in the Company’s way of operating. The
two Boards are independent of one another and
accountable to the Annual General Meeting (AGM).
The Company complies with, among other
regulations, the Dutch Corporate Governance Code of
20 December 2022 (the ‘Code’). Deviations from the
Code are explained in this report in accordance with
the Code’s ‘comply or explain’ principle.
This report includes the information that the
Company is required to disclose pursuant to the Dutch
governmental decree on Article 10 Takeover Directive
and the governmental decree on Corporate
Governance. Substantial changes in the Company’s
corporate governance structure and in the Company’s
compliance with the Code, if any, will be submitted to
the AGM for discussion under a separate agenda item.
General
The role of the Executive Board is to manage the
Company. This means, among other things, that it is
responsible for setting and achieving the operational
and financial objectives of the Company, the strategy
to achieve these objectives, the parameters to be
applied in relation to the strategy (for example, in
respect of the financial ratios), the Company culture
aimed at long-term value creation, the associated risk
profile, the development of results and sustainability
matters that are relevant to the Company.
The Executive Board is accountable to the Supervisory
Board and to the AGM.
In discharging its role, the Executive Board shall be
guided by the interests of the Company and its
affiliated enterprises, taking into consideration the
interests of the Company’s stakeholders.
The Executive Board is responsible for complying with
all primary and secondary legislation, for managing
the risks associated with the Company’s activities and
for financing the Company.
The Company has four operating regions: Africa
Middle East & Eastern Europe, Americas, Asia Pacific
and Europe.
Each region is headed by a President.
The two members of the Executive Board and the four
regional Presidents together with the five functional
Chief Officers (i.e. Commercial, Corporate Affairs,
Digital and Technology, People and Supply Chain),
jointly form the Executive Team. The decision to work
with an Executive Team is to ensure effective
implementation of key priorities and strategies across
the organisation.
Throughout the year, members of the Executive Team
and other senior managers were invited to give
presentations to the Supervisory Board.
Dolf (R.G.S.) van den Brink
1973
Dutch nationality
Male
Initial appointment in 2020*; Four-year term ends in 2024
Profession: Chairman/CEO (since 1 June 2020)
No supervisory board seats (or non-executive board
memberships) in Large Dutch Entities**
Other positions: Edesia Inc., International Alliance for
Responsible Drinking (Chair of the CEO Group), member
of the IMD Foundation Board
Harold (H.P.J.) van den Broek
Dutch nationality
1967
Male
Initial appointment in 2021*; Four-year term ends in 2025
Profession: CFO (since 1 June 2021)
No supervisory board seats (or non-executive board
memberships) in Large Dutch Entities**
No other positions***
*
**
For the maximum period of four years.
Large Dutch Entities are Dutch N.V.s, B.V.s or Foundations (that are
required to prepare annual accounts pursuant to Chapter 9 of Book 2
of the Dutch Civil Code or similar legislation) that meet two of the
following criteria (on a consolidated basis) on two consecutive balance
sheet dates:
(i) The value of the assets (according to the balance sheet with
the explanatory notes and on the basis of acquisition and
manufacturing costs) exceeds €20 million;
(ii) The net turnover exceeds €40 million;
(iii) The average number of employees is at least 250.
*** Under ‘Other positions’, other functions are mentioned that may be
relevant to the performance of the duties of the Executive Board.
A two-day meeting was held in June 2023 between
the Supervisory Board and the Executive Team to
discuss the Company’s strategic priorities and main
risks and opportunities in light of its sustainable long-
term value creation. During this meeting, members of
the Executive Team also presented their respective
strategic topics and the risks and opportunities per
region or function, as the case may be.
Further, in October 2023 a four-day visit to HEINEKEN
Beverages in South Africa by the Executive Board and
the Supervisory Board took place, with a focus on the
integration of Distell Group Holdings Limited and
Heineken South Africa next to the local strategy, the
outlook and the risks and opportunities. Various
locations of HEINEKEN Beverages in Cape Town as
well as the brewery in Johannesburg were visited, and
presentations by the local management team were
held. The commercial strategy with the new multi-
category portfolio was also discussed in detail.
Composition of the Executive Board
Executive Board members are appointed by the AGM
from a non-binding nomination drawn up by the
Supervisory Board.
The Supervisory Board appoints one of the Executive
Board members as Chairman/CEO. The AGM can
dismiss members of the Executive Board by a majority
of votes cast if the subject majority at least represents
one-third of the issued capital.
The Executive Board consists of two members,
Chairman/CEO Dolf (R.G.S.) van den Brink and CFO
Harold (H.P.J.) van den Broek.
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Corporate Governance statement
Best practice provision 2.2.1 of the Code recommends
that an Executive Board member is appointed for a
maximum period of four years and that a member
may be re-appointed for a term of not more than
four years at a time. In compliance with this best
practice provision, the Supervisory Board has drawn
up a rotation schedule to avoid, as much as possible,
a situation in which Executive Board members retire
at the same time.
However, the composition is also impacted by the
limited size of the Executive Board. In the event of
succession planning, we will continue to look for
opportunities to strengthen the gender diversity in
the Executive Board.
For the Supervisory Board, the diversity details are set
out on page 54 of this Annual Report as well as in the
Report of the Supervisory Board in this Annual Report.
Mr. Van den Brink and Mr. Van den Broek are in their
first four-year term as members of the Executive Board,
being appointed in 2020 and 2021 respectively. A
proposal for the re-appointment of Mr. Van den Brink
for a second four-year term as member of the
Executive Board will be submitted to the AGM in 2024.
Members of the Executive Board are not allowed to
hold more than two supervisory board memberships
or non-executive directorships in a Large Dutch Entity.
Acceptance of such external supervisory board
memberships or non-executive directorships by
members of the Executive Board is subject to
approval by the Supervisory Board, which has
delegated this authority to the Selection and
Appointment Committee.
Diversity
We strive to embrace diversity in everything we do,
as also recognised and described in the Diversity
Policy of the Supervisory Board, Executive Board and
Executive Team. The Policy was updated in December
2021 and is available on our corporate website. The
Policy considers the elements of a diverse composition
in terms of nationality, gender, age and background,
including expertise and experience. It is the aim of
the Company to reflect this in the composition of
the Supervisory Board, Executive Board and
Executive Team.
For the Executive Board, appropriate weight is placed
on diversity considerations in the selection and
appointment process, while taking into account
the overall profile and selection criteria for the
appointments of suitable candidates to the Executive
Board. The aim is that the Executive Board comprises
of at least 30% male and at least 30% female
members, as set out in the Diversity Policy. Currently,
the Executive Board is composed of two male
members. It is recognised that the current
composition of the Executive Board leaves room
for improvement on gender diversity.
For the Company, increasing the gender diversity in
the Company's senior management is a key priority.
Details on diversity and inclusion in the Company and
in the senior management group of the Company can
be found on page 161 of this Annual Report. This
section also sets out the goals of the diversity and
inclusion policy, the strategy to achieve the goals and
the results of the strategy.
Conflict of Interest
The Articles of Association and the Code prescribe
how to deal with (apparent) conflicts of interest
between the Company and members of the
Executive Board.
A member of the Executive Board shall not take part
in any discussion or decision-making that involves a
subject or transaction in relation to which he has a
personal conflict of interest with the Company.
Decisions to enter into transactions under which
members of the Executive Board have conflicts of
interest that are of material significance to the
Company and/or the relevant member(s) of the
Executive Board require the approval of the
Supervisory Board.
Any such decision shall be published in the Annual
Report for the relevant year, along with a reference
to the conflict of interest and a declaration that the
relevant best practice provisions of the Code have
been complied with.
In 2023, no transactions were reported under which
a member of the Executive Board had a conflict of
interest that was of material significance.
Remuneration
In line with the remuneration policy adopted by the
AGM, the remuneration of members of the Executive
Board is determined by the Supervisory Board, upon
recommendation of the Remuneration Committee.
The remuneration policy and the elements of the
remuneration of Executive Board members are set out
in the Remuneration Report and Notes 6.5 and 13.3
to the Financial Statements.
The main elements of the service agreements with
Mr. Van den Brink and Mr. Van den Broek are available
on our website.
Composition of the Supervisory Board
The Supervisory Board consists of nine members
since the AGM in 2023: Jean-Marc Huët (Chairman),
Maarten Das, Michel de Carvalho, Pamela Mars-
Wright, Marion Helmes, Rosemary Ripley, Nitin
Paranjpe, Beatriz Pardo and Lodewijk Hijmans van
den Bergh.
The Supervisory Board endorses the principle that the
composition of the Supervisory Board shall be such
that its members are able to act critically and
independently of one another and of the Executive
Board and any particular interests. Each Supervisory
Board member is capable of assessing the broad
outline of the overall strategy of the Company and its
businesses and carrying out its duties properly.
Given the structure of the Heineken Group, the
Company is of the opinion that, in the context of
preserving the continuity of the Heineken Group and
ensuring a focus on long-term sustainable value
creation, it is in its best interest and that of its
stakeholders that the Supervisory Board includes a fair
and adequate representation of persons who are
related by blood or affinity in the direct line descent to
the late Mr. A.H. Heineken (former Chairman of the
Executive Board), or who are members of the Board of
Directors of Heineken Holding N.V., even if those
persons would not, formally speaking, be considered
‘independent’ within the meaning of best practice
provision 2.1.8 of the Code.
Supervisory Board
General
The role of the Supervisory Board is to supervise the
management of the Executive Board and the general
affairs of the Company and its affiliated enterprises,
as well as to assist the Executive Board by
providing advice.
In discharging its role, the Supervisory Board shall be
guided by the interests of the Company and its
affiliated enterprises and shall take into account the
relevant interest of the Company’s stakeholders.
The supervision of the Executive Board by the
Supervisory Board includes the achievement of the
Company’s objectives, the culture in the Company, the
corporate strategy and the risks inherent in the
business activities, the design and effectiveness of the
internal risk and control system, the financial reporting
process, compliance with primary and secondary
legislation, the Company-shareholder relationship and
corporate social responsibility matters that are
relevant to the Company.
The Supervisory Board evaluates at least once a year
the corporate strategy and main risks to the business,
the result of the assessment by the Executive Board of
the design and effectiveness of the internal risk
management and control system, and any significant
changes thereto.
Supervisory Board members are appointed by the
AGM from a non-binding nomination drawn up by the
Supervisory Board.
The AGM can dismiss members of the Supervisory
Board by a majority of the votes cast, if the subject
majority at least represents one-third of the
issued capital.
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Corporate Governance statement
Currently, the vast majority of the Supervisory Board (i.e.
seven of its nine members) qualify as ‘independent’ as
per best practice provision 2.1.8 of the Code. There are
two members who in a strictly formal sense do not
meet the applicable criteria for being ‘independent’ as
set out in the Code: Mr. de Carvalho (who is the spouse
of Mrs. C.L. de Carvalho-Heineken, the daughter of the
late Mr. A.H. Heineken, and who is also an executive
director of Heineken Holding N.V.) and Mr. Das (who is
the Chairman of the Board of Directors of Heineken
Holding N.V.).
However, the Supervisory Board has ascertained that
Mr. de Carvalho and Mr. Das in fact act critically and
independently. Since Mr. de Carvalho and Mr. Das are
representing or are affiliated with Heineken Holding
N.V. , that holds more than 10% of the shares in our
Company, the maximum of one representative or
affiliate per such shareholder of best practice provision
2.1.7 sub iii of the Code is not complied with. As a
consequence, the Company also does not comply with
best practice provision 2.1.10 of the Code, to the extent
that this provision provides that the Supervisory Board
report shall state that best practice provision 2.1.7
through 2.1.9 has been fulfilled.
In line with the belief that the focus on long-term
value creation is best ensured by a fair and adequate
representation of persons who are related by blood
or affinity in the direct line descent to the late
Mr. A.H. Heineken (former Chairman of the Executive
Board), or who are members of the Board of Directors
of Heineken Holding N.V., best practice provision 2.2.2
of the Code, which provides that a person may be
appointed to the Supervisory Board for a maximum of
two four-year terms, followed by two terms of two
years each with an explanation in the Corporate
Governance statement, is not applied to Mr. de
Carvalho and Mr. Das. In the interest of preserving the
core values and the structure of the Heineken Group,
the Company does not apply the maximum
appointment period to members who are related by
blood or affinity in the direct line descent to Mr. A.H.
Heineken or who are members of the Board of
Directors of Heineken Holding N.V.
The Supervisory Board has drawn up a rotation
schedule to avoid, as far as possible, a situation in
which many Supervisory Board members retire at the
same time. The rotation schedule is available on our
corporate website.
Profile and diversity
The Supervisory Board has prepared a profile of its size
and composition, taking account of the nature of the
business, its activities and the desired expertise and
background of the Supervisory Board members. The
profile deals with the aspects of diversity in the
composition of the Supervisory Board that are
relevant to the Company and states what specific
objective is pursued by the Supervisory Board in
relation to diversity.
At least one member of the Supervisory Board shall be
a financial expert with relevant knowledge and
experience of financial administration and accounting
for listed companies or other large legal entities. The
composition of the Supervisory Board shall be such
that it is able to carry out its duties properly. The
profile is available on our corporate website.
The importance of diversity in the composition of the
Supervisory Board is described in the Diversity Policy of
the Supervisory Board, Executive Board and Executive
Team and in the Profile of the Supervisory Board (that
is part of the Regulations of the Supervisory Board).
These policies emphasise elements of a diverse
composition in terms of nationality, gender, age and
background including expertise and experience.
Dutch law stipulates that supervisory boards of large
Dutch public companies, such as the Company, are
deemed to have a balanced composition if they
consist of at least one-third female and one-third male
members. The Supervisory Board consists of nine
members, five male (56%) and four female (44%)
members. The Supervisory Board will continue to take
the balanced composition requirements into account
when nominating and selecting new candidates for
the Supervisory Board.
The Supervisory Board notes that, in its opinion,
gender is only one element of diversity, and that
experience, background, knowledge, skills and
insight are equally important and relevant criteria
in selecting new members as is also reflected in its
profile. The Supervisory Board has updated its profile
in December 2023. The profile is published on the
corporate website as part of the Regulations of the
Supervisory Board.
Regulations of the Supervisory Board
The tasks, responsibilities and internal procedural
matters for the Supervisory Board are addressed in the
Regulations of the Supervisory Board and are available
on our corporate website.
Induction and training
After appointment to the Supervisory Board, members
receive an induction programme drawn up by the
Company in consultation with the Chairman of the
Supervisory Board.
Mr. Hijmans van den Bergh and Mrs. Pardo followed
the introduction programme in 2023. The programme
included a general information package in respect of
the Company and its corporate governance. It also
included various meetings with members of the
Executive Team and other senior management
leaders. Furthermore, in addition to attending the
Supervisory Board meetings including the strategy
meeting and the visit to South Africa, the introduction
programme also included a visit to the brewery in
Zoeterwoude.
Information
The Executive Board provides regular updates to the
Supervisory Board on the Company’s operations,
results, legal matters, corporate governance,
accounting, sustainability and compliance. This takes
place in the scheduled Supervisory Board meetings as
well as via email in case of ad hoc material
developments.
Conflict of Interest
The Articles of Association and the Regulations of the
Supervisory Board prescribe how to deal with
(apparent) conflicts of interest between the Company
and members of the Supervisory Board.
A member of the Supervisory Board shall not take part
in any discussion or decision-making that involves a
subject or transaction in relation to which he has a
personal conflict of interest with the Company.
The Supervisory Board appoints from its members a
Chairman (currently Mr. Huët). The Chairman of the
Supervisory Board may not be a former member of
the Executive Board. The Chairman of the Supervisory
Board determines the agenda, chairs the meetings of
the Supervisory Board, ensures the proper functioning
of the Supervisory Board and its Committees, arranges
for the adequate provision of information to its
members and acts on behalf of the Supervisory Board
as the main contact for the Executive Board and for
shareholders regarding the functioning of the
Executive Board and the Supervisory Board members.
The Chairman also ensures the orderly and efficient
conduct of the AGM.
The Chairman of the Supervisory Board is assisted in
his role by the Company Secretary. All members of the
Supervisory Board have access to the advice and
services of the Company Secretary. The Company
Secretary is responsible for ensuring that due
procedures are followed and that the Supervisory
Board acts in accordance with its statutory obligations
as well as its obligations under the Articles of
Association.
The Supervisory Board appoints from its members a
Vice-Chairman (as part of the press release of the
Company of 14 December 2023, it was announced
that the proposal is to appoint Mr. P. Wennink as Vice-
Chairman, subject to his appointment as Supervisory
Board member at the AGM in 2024). The Vice-
Chairman of the Supervisory Board acts as deputy for
the Chairman. The Vice-Chairman acts as contact for
individual Supervisory Board members and Executive
Board members concerning the functioning of the
Chairman of the Supervisory Board.
The Supervisory Board can only adopt resolutions in a
meeting if the majority of its members are present or
represented at that meeting. In such meetings,
resolutions must be adopted by absolute majority of
the votes cast. In addition, approval of a resolution by
the Supervisory Board, as referred to in Article 8
paragraph 6 under a, b and c of the Articles of
Association, requires the affirmative vote of the
Delegated Member.
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Decisions to enter into transactions under which
Supervisory Board members have conflicts of interest
that are of material significance to the Company and/
or the relevant member(s) of the Supervisory Board
require the approval of the Supervisory Board.
Any such decision shall be published in the Annual
Report for the relevant year, along with a reference
to the conflict of interest and a declaration that the
relevant best practice provisions of the Code have
been complied with. Note 13.3 of the 2023 Financial
Statements sets out the related party transactions
in 2023.
In 2023, no transactions were reported under which
a Supervisory Board member had a conflict of interest
that was of material significance.
Remuneration
Supervisory Board members receive a fixed annual
remuneration fee determined by the AGM.
More information on the remuneration of Supervisory
Board members can be found in Note 13.3 to the
2023 Financial Statements.
Resolutions subject to Supervisory Board
approval
Certain resolutions of the Executive Board are subject
to the approval of the Supervisory Board. Examples
are resolutions concerning the operational and
financial objectives of the Company, the strategy
designed to achieve the objectives, the parameters to
be applied in relation to the strategy (for example, in
respect of the financial ratios) and corporate social
responsibility matters that are relevant to the
Company (including the sustainability strategy).
Also, decisions to enter into transactions under which
Executive Board or Supervisory Board members would
have conflicts of interest that are of material
significance to the Company and/or to the relevant
Executive Board member/Supervisory Board member
require the approval of the Supervisory Board.
Further reference is made to Article 8 paragraph 6
of the Articles of Association, which contains a list of
resolutions of the Executive Board that require
Supervisory Board approval.
Delegated Member
The AGM may appoint one of the Supervisory Board
members as Delegated Member. Mr. Das currently
acts as the Delegated Member. The delegation to the
Delegated Member does not extend beyond the
duties of the Supervisory Board and does not comprise
the management of the Company. It intends to effect
a more intensive supervision and advice and more
regular consultation with the Executive Board.
The Delegated Member has a veto right concerning
resolutions of the Supervisory Board to approve the
resolutions of the Executive Board referred to in Article
8 paragraph 6 under a, b and c of the Articles of
Association of the Company.
The role of Delegated Member is consistent with best
practice provision 2.3.8 of the Code, except insofar
that the delegation is not temporary but is held for
the term for which the member concerned is
appointed by the AGM. The Company is of the
opinion that the position of Delegated Member,
which has been in existence since 1952, befits the
structure of the Company.
Committees
The Supervisory Board has five committees: the
Preparatory Committee, the Audit Committee,
the Remuneration Committee, the Selection and
Appointment Committee and the Sustainability
and Responsibility Committee. The function of these
committees is to prepare the decision-making of
the Supervisory Board.
The Supervisory Board has drawn up regulations for
each committee, setting out the role and responsibility
of the committee concerned, its composition and the
manner in which it discharges its duties. These
regulations are available on our corporate website.
In 2023, more than half of the members of the Audit
Committee, of the Remuneration Committee, of the
Selection and Appointment Committee and of the
Sustainability and Responsibility Committee were
independent within the meaning of best practice
provision 2.1.8 of the Code.
The Report of the Supervisory Board states the
composition of the committees, the number of
committee meetings and the main items discussed.
Preparatory Committee
The Preparatory Committee prepares decision-making
of the Supervisory Board on matters not already
handled by any of the other committees, such as in
relation to acquisitions and investments.
The current Chair of the Preparatory Committee is
Mr. Huët.
Audit Committee
The Audit Committee focuses on supervising the
activities of the Executive Board with respect to: (i)
the operation of the internal risk management and
control systems, including the enforcement of the
relevant primary and secondary legislation and
supervising the operation of codes of conduct; (ii) the
provision of financial and sustainability information by
the Company; (iii) compliance with recommendations
and observations of internal and external auditors; (iv)
the role and functioning of Global Audit, the internal
audit function; (v) the policy of the Company on tax
risk management; (vi) relations with the external
auditor, including, in particular, its independence,
remuneration and any non-audit services for the
Company; (vii) the financing of the Company; and
(viii) the applications of information and
communication technology.
The Audit Committee acts as the principal contact
for the external auditor if the external auditor
discovers irregularities in the content of the financial
reporting. The Audit Committee meets with the
external auditor as often as it considers necessary,
but at least once a year, without the Executive Board
members being present.
The Audit Committee may not be chaired by the Chair
of the Supervisory Board or by a former member of the
Executive Board. At least one member of the Audit
Committee shall be a financial expert with relevant
knowledge and experience of financial administration
and accounting for listed companies or other large
legal entities.
The current Chair of the Audit Committee is
Mrs. Helmes.
Remuneration Committee
The Remuneration Committee, inter alia, makes
the proposal to the Supervisory Board for the
remuneration policy for the Executive Board and
Supervisory Board to be pursued, and makes a
proposal for the remuneration of the individual
members of the Executive Board for adoption by
the Supervisory Board.
The Remuneration Committee may not be chaired
by the Chair of the Supervisory Board or by a former
member of the Executive Board. However, given the
structure of the Heineken Group and the character of
the Board of Directors of Heineken Holding N.V.,
the regulations of the Remuneration Committee
permit that the Remuneration Committee is
chaired by a Supervisory Board member who is a
member of the Board of Directors of Heineken
Holding N.V.
Mr. Das was the Chair of the Remuneration
Committee until 13 December 2023, when he was
succeeded by Mr. Hijmans van den Bergh.
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Corporate Governance statement
Selection and Appointment Committee
The Selection and Appointment Committee focuses
on: (i) drawing up selection criteria and appointment
procedures for Supervisory Board members and
Executive Board members; (ii) periodically assessing
the size and composition of the Supervisory Board
and the Executive Board, and making a proposal for a
composition profile of the Supervisory Board; (iii)
periodically assessing the functioning of individual
Supervisory Board members and Executive Board
members, and reporting on this to the Supervisory
Board; (iv) drawing up a plan for the succession of
Supervisory Board members and Executive Board
members; (v) making proposals for appointments
and re-appointments of Supervisory Board and
Executive Board members; (vi) supervising the policy
of the Executive Board regarding the selection criteria
and appointment procedures for senior management;
(vii) drawing up a diversity policy for the composition
of the Executive Board, the Supervisory Board and the
Executive Team; and (viii) deciding on a request from
Executive Board members to accept an external
board membership of a Large Dutch Entity or
foreign equivalent.
General Meeting
Annually, within six months after the end of the
financial year, the AGM shall be held, in which, inter
alia, the following items shall be brought forward: (i)
the discussion of the management report; (ii) the
adoption of the Executive Board’s and Supervisory
Board’s remuneration policy insofar as adjustments to
those policies lead to a new policy or four years after
adoption; (iii) the Remuneration Report of the
members of the Executive Board and members of the
Supervisory Board; (iv) the discussion and adoption of
the financial statements; (v) the discharge of the
members of the Executive Board for their
management; (vi) the discharge of the members of
the Supervisory Board for their supervision on the
management; and (vii) the appropriation of profits.
According to the Articles of Association, the AGM shall
be held in Amsterdam. The AGM reflecting on the
financial year 2022 was held on 20 April 2023 in De
La Mar Theatre in Amsterdam. Shareholders could
attend in person or virtually.
Convocation
Pursuant to Dutch law, the Executive Board or the
Supervisory Board shall convene the AGM with a
convocation period of at least 42 days (excluding
the date of the meeting, but including the
convocation date).
The Executive Board and the Supervisory Board are
obliged to convene an AGM upon request of
shareholders individually or collectively owning at least
10% of the shares issued. Such meeting shall be held
within eight weeks of the request and shall deal with
the subjects as stated by those who wish to hold the
meeting, failing which the shareholders may seek
judicial leave to call a general meeting.
The current Chair of the Selection and Appointment
Committee is Mr. Huët.
Sustainability and Responsibility Committee
The Sustainability and Responsibility Committee
focuses on: (i) the periodic review and evaluation of
the Company’s sustainability and responsibility
strategy and related objectives and the performance
on these objectives, including in the areas of the
environment, social and responsible consumption; (ii)
the relationships of the Company with its stakeholders
on sustainability and responsibility matters; (iii)
external sustainability and responsibility-related
developments relevant for the Company; and (iv) such
other matters concerning the Company’s
sustainability and responsibility matters as the
Committee shall see fit and proper or as shall be
referred by the Executive Board or Supervisory Board
from time to time.
The current Chair of the Sustainability and
Responsibility Committee is Mr. Paranjpe, who
succeeded Mr. Fernández Carbajal after his
resignation as member of the Supervisory Board on
15 February 2023.
Right to include items on the agenda
If the Executive Board has been requested in writing
not later than 60 days prior to the date of the AGM to
deal with an item by one or more shareholders who
solely or jointly represent at least 1% of the issued
capital, the item will be included in the convocation or
announced in a similar way.
A request of a shareholder for an item to be included
on the agenda of the AGM needs to be substantiated.
The principles of reasonableness and fairness may
allow the Executive Board to refuse the request.
Record date
For each AGM, Dutch law provides a record date for
the exercise of the voting rights and participation in
the meeting, which record date shall be the 28th day
prior to the date of the meeting. The record date shall
be included in the convocation notice, as well as the
manner in which those entitled to attend and/or vote
in the meeting can be registered and the manner in
which they may exercise their rights.
Only persons who are shareholders on the record date
may participate and vote in the AGM.
Participation in person, by proxy or through
electronic communication
Each shareholder is entitled, either personally or by
proxy authorised in writing, to attend the AGM, to
address the meeting and to exercise his or her
voting rights.
The Executive Board may determine that the powers
set out in the previous sentence may also be exercised
by means of electronic communication.
If a shareholder wants to exercise his or her rights by
proxy authorised in writing, the written power of
attorney must be received by the Company no later
than on the date indicated for that purpose in the
convocation notice. Through its corporate website,
the Company generally facilitates that shareholders
can give electronic voting instructions.
Attendance list
Each person entitled to vote or otherwise entitled
to attend a meeting, or such person’s representative,
shall have to sign the attendance list, stating the
number of shares and votes represented by
such person.
The Code provides the following in best practice
provision 4.1.6: “A shareholder should only exercise
the right to put items on the agenda after they have
consulted with the management board on this. If one
or more shareholders intend to request that an item
be put on the agenda that may result in a change in
the Company’s strategy, for example as a result of
the dismissal of one or several management board
or supervisory board members, the management
board should be given the opportunity to stipulate
a reasonable period in which to respond (the
response time).”
The opportunity to stipulate the response time should
also apply to an intention as referred to above for
judicial leave to call an AGM pursuant to Section 2:110
of the Dutch Civil Code. The relevant shareholder
should respect the response time stipulated by the
management board, within the meaning of best
practice provision 4.1.7.
If the Executive Board invokes a response time, such
period shall not exceed 180 days from the moment
the Executive Board is informed by one or more
shareholders of their intention to put an item on the
agenda to the day of the AGM at which the item is to
be dealt with. The Executive Board shall use the
response time for further deliberation and constructive
consultation. This shall be monitored by the
Supervisory Board. The response time shall be invoked
only once for any given AGM and shall not apply to an
item in respect of which the response time has been
previously invoked.
Corporate Governance statement
Chairman of the AGM
The AGM shall be presided over by the Chairman or
the Vice-Chairman of the Supervisory Board or, in his
absence, by one of the Supervisory Board members
present at the meeting, to be designated by them in
mutual consultation. If no members of the Supervisory
Board are present, the meeting shall appoint its
own chairman.
Resolutions to be adopted by the AGM
The AGM has authority to adopt resolutions
concerning, inter alia, the following matters:
– Issue of shares by the Company or rights on shares
(and to authorise the Executive Board to resolve that
the Company issues shares or rights on shares)
– Authorisation of the Executive Board to resolve that
the Company acquires its own shares
Voting
All resolutions of the AGM shall be adopted by an
absolute majority of the votes cast, except for those
cases in which the law or the Articles of Association
prescribe a larger majority.
Each share confers the right to one vote. Blank votes
shall be considered as not having been cast.
The Executive Board may determine in the
convocation notice that any vote cast prior to the
AGM by means of electronic communication shall be
deemed to be a vote cast in the AGM. Such a vote
may not be cast prior to the record date. A shareholder
who has cast his or her vote prior to the AGM by
means of electronic communication remains entitled,
whether or not represented by a holder of a written
power of attorney, to participate in the AGM.
Minutes
The proceedings in the AGM shall be recorded in
minutes taken by a secretary to be designated by the
chairman of the meeting. Upon request, the record of
the proceedings of the AGM shall be submitted to
shareholders, ultimately within three months after the
conclusion of the meeting.
– Cancellation of shares and reduction of share capital
– Appointment of Executive Board members
– The remuneration policy for Executive Board
members
– Suspension and dismissal of Executive Board
members
– Appointment of Supervisory Board members
– The remuneration policy for Supervisory Board
members
– The remuneration of Supervisory Board members
– Suspension and dismissal of Supervisory Board
members
– Appointment of the Delegated Member of the
Supervisory Board
– Adoption of the financial statements
– Granting discharge to Executive and Supervisory
Board members
– Dividend distributions
– A material change in the corporate governance
structure
– Appointment of the external auditor
– Amendment of the Articles of Association, and
– Liquidation.
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Resolutions on a major change in the identity or
character of the Company or enterprise shall be
subject to the approval of the AGM. This would at
least include (a) the transfer of the enterprise or the
transfer of practically the entire enterprise of the
Company to a third party, (b) the entering into or the
termination of a lasting co-operation of the Company
or a subsidiary with another legal entity or company or
a fully liable partner in a limited partnership or general
partnership, if such co-operation or termination is of
fundamental importance to the Company and
(c) acquiring or disposing of a participation in the
capital of a company by the Company or a subsidiary
amounting to at least one-third of the amount of
assets according to the Company’s consolidated
balance sheet plus explanatory notes as laid down
in the last adopted Financial Statements of
the Company.
Article 10 of the EU Take-Over Directive Decree
Shares
The issued capital of the Company amounts to
€921,604,180.80, consisting of 576,002,613 shares of
€1.60 each. Each share carries one vote. The shares
are listed on Euronext Amsterdam.
All shares carry equal rights and are freely transferable
(unless provided otherwise below).
Shares repurchased by the Company for the share-
based Long-Term Incentive Plan (LTIP) or for any
other purpose do not carry any voting rights and
dividend rights.
Shareholders who hold shares on a predetermined
record date are entitled to attend and vote at the
AGM. The record date for the AGM of 25 April 2024 is
28 days before the AGM, i.e. on 28 March 2024.
.
Law on the Conversion of Bearer Shares
As of 1 July 2019, the Dutch Law on the Conversion of
Bearer Shares (Wet omzetting aandelen aan toonder)
has entered into effect. All (bearer) shares in the
Company’s authorised capital have already been
registered as per earlier amendment of the Articles of
Association. However, there still are share certificates
for bearer shares circulating which are eligible for
submission with the Company.
Pursuant to Dutch law, the Company received 12,037
certificates for bearer shares without consideration on
31 December 2020.
Any holder of certificates for bearer shares submitting
its share certificates with the Company before 2
January 2026, shall receive a corresponding amount
of registered shares by the Company as per the
transitory provisions laid down in Article 18 of the
Articles of Association.
Substantial shareholdings
Pursuant to the Financial Supervision Act (Wet op het
financieel toezicht) and the Decree on Disclosure of
Major Holdings and Capital Interests in Issuing
Institutions (Besluit melding zeggenschap en
kapitaalbelang in uitgevende instellingen), the
Netherlands Authority for the Financial Markets has
been notified about the following substantial
shareholdings regarding the Company:
– Mrs. C.L. de Carvalho-Heineken (holds indirectly
50.005% of the issued share capital of the Company;
the direct 50.005% shareholder is Heineken Holding
N.V.). Further details can be found in the Annual
Report of Heineken Holding N.V.
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Corporate Governance statement
FEMSA
Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA)
was a significant shareholder in the HEINEKEN group
as of 2010. Upon completion of the acquisition of the
beer operations from FEMSA, CB Equity LLP
(belonging to the FEMSA group) received shares in
the HEINEKEN group and furthermore the relevant
parties entered into a Corporate Governance
Agreement (CGA) on 30 April 2010.
On 15 February 2023, FEMSA announced that it
intended to divest its full shareholding in the
Company and in Heineken Holding N.V. and that
FEMSA’s representatives, Mr. Fernández Carbajal and
Mr. Camacho Beltrán, would resign from the
Company’s Supervisory Board and from Heineken
Holding N.V.’s Board of Directors with immediate
effect.
FEMSA subsequently sold its shares in the Company
and Heineken Holding N.V. in two tranches, in
February 2023 and May 2023.
As part of the transaction in February 2023, the
Company purchased 7,782,100 shares in the
Company at a price of €91 per share (totalling
€708 million) and 3,891,050 shares in Heineken
Holding N.V. at a price of €75 per share (totalling
€292 million) for an aggregate amount of €1 billion.
Subsequently, the Company purchased from FEMSA
approx. 2.5 million shares in the Company at a price of
€92.75 per share (totalling €235 million) and approx.
1.3 million shares in Heineken Holding N.V. at a price
of €77.25 per share (totalling €98 million) for an
aggregate amount of €333 million in May 2023.
As a consequence of the sale by FEMSA, the CGA
has terminated.
The Company intends to keep the purchased
Heineken N.V. shares in treasury and the purchased
Heineken Holding N.V. shares on its balance sheet.
The Company is grateful to FEMSA for its contribution
and support to the HEINEKEN Group over the past
thirteen years and to the respective Supervisory Board
members for their valuable contributions and their
commitment.
Share plans
There is a share-based Long-Term Incentive Plan
(LTIP) for both the Executive Board members and
senior management. Eligibility for participation in
the LTIP by senior management is based on
objective criteria.
Each year, performance shares are awarded to the
participants. Depending on the fulfilment of certain
predetermined performance conditions during a
three-year performance period, the performance
shares will vest and the participants will receive
Heineken N.V. shares.
Shares received by Executive Board members upon
vesting under the LTIP are subject to a holding period
of five years as from the date of award of the
respective performance shares, which is approximately
two years from the vesting date.
Under the Short-Term Incentive Plan (STIP) for the
Executive Board, Executive Board members are
entitled to receive a cash bonus subject to the
fulfilment of predetermined performance conditions.
Executive Board members are obliged to invest at
least 25% of their STIP payout in Heineken N.V. shares
(‘investment shares’) to be delivered by the Company;
the maximum they can invest in Heineken N.V. shares
is 50% of their STIP payout (at their discretion).
The investment shares (which are acquired by the
Executive Board members in the year after the year
over which the STIP payout is calculated) are subject
to a holding period of five years as from 1 January of
the year in which the investment shares are acquired.
Executive Board members are entitled to receive one
additional Heineken N.V. share (a ‘matching share’) for
each investment share held by them at the end of the
respective holding period.
The entitlement to receive matching shares shall lapse
upon the termination by the Company of the service
agreements of Mr. Van den Brink and Mr. Van den
Broek, as the case may be, for an urgent reason
(‘dringende reden’) within the meaning of the law or
in case of dismissal for cause (‘ontslag met gegronde
redenen’) whereby the cause for dismissal concerns
unsatisfactory functioning of the Executive
Board member.
In exceptional situations, extraordinary share
entitlements may be awarded by the Executive Board
to employees. These share entitlements are usually
non-performance-related and the employees involved
are usually entitled to receive Heineken N.V. shares
after the expiry of a period of time.
The shares required for the LTIP, the STIP and the
extraordinary share entitlements will be acquired by
the Company on the basis of an authorisation
granted by the AGM and subject to approval of
the Supervisory Board of the Company.
Change of control
There are no important agreements to which the
Company is a party and that will automatically come
into force, be amended or be terminated under the
condition of a change of control over the Company
as a result of a public offer.
However, the contractual conditions of most of the
Company’s important financing agreements and
notes issued (potentially) entitle the banks and
noteholders respectively to claim early repayment
of the amounts borrowed by the Company in the
situation of a change of control over the Company
(as defined in the respective agreement).
Also, some of the Company’s important joint
venture agreements provide that in case of a
change of control over the Company (as defined in
the respective agreement), the other party to such
agreement may exercise its right to purchase the
Company’s shares in the joint venture, as a result
of which the respective joint venture agreement
will terminate.
Appointment and dismissal of Supervisory and
Executive Board members
Members of the Supervisory Board and the Executive
Board are appointed by the AGM on the basis of a
non-binding nomination by the Supervisory Board.
The AGM can dismiss members of the Supervisory
Board and the Executive Board by a majority of the
votes cast, if the subject majority at least represents
one-third of the issued capital.
Amendment of the Articles of Association
The Articles of Association can be amended by
resolution of the AGM in which at least half of the
issued capital is represented and exclusively either at
the proposal of the Supervisory Board or at the
proposal of the Executive Board that has been
approved by the Supervisory Board, or at the proposal
of one or more shareholders representing at least half
of the issued capital.
Acquisition of own shares
On 20 April 2023, the AGM authorised the Executive
Board (for the statutory maximum period of 18
months) to acquire own shares subject to the
following conditions and with due observance of the
law and the Articles of Association (which require the
approval of the Supervisory Board):
The maximum number of shares which may be
acquired is 10% of the issued capital of the Company
as per 20 April 2023.
Transactions must be executed at a price between the
nominal value of the shares and 110% of the opening
price quoted for the shares in the Official Price List
(Officiële Prijscourant) of Euronext Amsterdam on the
date of the transaction or, in the absence of such a
price, the latest price quoted therein.
Transactions may be executed on the stock exchange
or otherwise.
The authorisation may be used in connection with the
LTIP and the STIP for the members of the Executive
Board and the LTIP for senior management, but may
also serve other purposes, such as acquisitions. A new
authorisation will be submitted for approval at the next
AGM on 25 April 2024.
52
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Introduction
Report
of the
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Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Corporate Governance statement
Issue of shares
On 20 April 2023, the AGM authorised the Executive
Board (for a period of 18 months) to issue shares or
grant rights to subscribe for shares and to restrict or
exclude shareholders’ pre-emption rights, with due
observance of the law and Articles of Association
(which require the approval of the Supervisory Board).
The authorisation is limited to 10% of the Company’s
issued capital as per 20 April 2023.
The authorisation may be used in connection with
the LTIP and the STIP for the members of the
Executive Board and the LTIP for senior management,
but may also serve other purposes, such as funding
of acquisitions.
A new authorisation will be submitted for approval to
the AGM at 25 April 2024.
Compliance with the Corporate Governance
Code
On 20 December 2022, the current Code was
published, which came into effect on 1 January 2023.
The Code can be downloaded at http://www.mccg.nl.
The Code was first adopted in 2003 and was
amended in 2008, 2016 and 2022. In the years since
the last revision of the Code in 2016, a number of
important developments have been observed in the
field of governance, such as the greater emphasis on
sustainability and digitisation and diversity and
inclusion as well as addressing changed legislation and
regulations. These developments have been
addressed in the latest update of the Code.
The Code contains principles and best practice
provisions that regulate relations between the
management board, the supervisory board and the
general meeting/shareholders. The principles in the
Code may be regarded as reflecting widely held
general views on good corporate governance. The
principles have been expressed in the form of best
practice provisions. These provisions contain standards
for the conduct of management board members,
supervisory board members and shareholders. They
reflect best practices and supplement the general
principles of good corporate governance.
As stated in the Code, there should be a basic
recognition that corporate governance must be
tailored to the company-specific situation and,
therefore, that non-application of individual
provisions by a company may be justified.
The Company, in principle, endorses the Code’s
principles and applies virtually all best practice
provisions. However, given the structure of the
Heineken Group and, specifically, the relationship
between the Company and its controlling shareholder
Heineken Holding N.V., the Company does not (fully)
apply the following best practice provisions:
– 2.1.7, 2.1.8 and 2.1.10 4: Number of independent
Supervisory Board members; in that light the
Supervisory Board report does not state that best
practice provisions 2.1.7 through 2.1.9 have been
fulfilled
– 2.2.2: Maximum terms of appointment Supervisory
Board members
– 2.3.8: Temporary nature of appointing a delegated
Supervisory Board member
The agreement with Mr. Van den Brink and Mr. Van den
Broek with regards to their terms comply with the Code.
For more information please see the Remuneration
Report.
Other best practice provisions which are not applied
relate to the fact that these principles and/or best
practice provisions are not applicable to the Company:
– 2.8.1: This best practice provision situation has not
arisen
– 3.1.2: sub vii: The Company does not grant options
on shares
– 4.1.5: This best practice provision relates to
shareholders
– 4.2.6: The Company has no anti-takeover measures
– 4.3.1: This best practice provision relates to
shareholders
– 4.3.4: The Company has no financing preference
shares
– 4.3.5 and 4.3.6: This best practice provision relates to
institutional investors
– 4.4: The Company has no depositary receipts of
shares, nor a trust office
– 4.3.3 and 5.1: The Company does not have a one-tier
management structure
In respect of transactions with related parties as
disclosed in note 13.3, best practice provisions 2.7.3,
2.7.4 and 2.7.5 of the Code have been observed.
In accordance with Article 5:25c paragraph 2 sub c of
the Financial Markets Supervision Act, we confirm
that, to the best of our knowledge:
– the financial statements in this Annual Report 2023
give a true and fair view of our assets and liabilities,
our financial position at 31 December 2023, and the
results of our consolidated operations for the
financial year 2023; and
– the Report of the Executive Board includes a fair
review of the position at 31 December 2023 and the
development and performance during the financial
year 2023 of Heineken N.V. and the undertakings
included in the consolidation taken as a whole, and
describes the principal risks that Heineken N.V. faces.
This statement cannot be construed as a statement in
accordance with the requirements of Section 404 of
the US Sarbanes-Oxley Act, which Act is not applicable
to Heineken N.V.
Executive Board
R.G.S. van den Brink
H.P.J. van den Broek
Amsterdam, 13 February 2024
Various topics included in the updated Code are
addressed in detail in other sections of this Annual
Report, including with respect to long-term sustainable
value creation, company culture, diversity and
inclusion and a policy for an effective dialogue with
stakeholders with regard to sustainability aspects of
the Company’s strategy. Please refer to these
dedicated sections to read more about these topics.
Statement of the Executive Board
This Report of the Executive Board, together with
the Sustainability Review, serves as the management
report for the purpose of Section 391, Book 2 of the
Dutch Civil Code.
In accordance with best practice provision 1.4.3 of the
Code, we are of the opinion that:
– This report provides sufficient insights into any
failings in the effectiveness of the internal risk
management and control systems
– The aforementioned systems provide reasonable
assurance that the financial reporting does not
contain any material inaccuracies
– Based on the current state of affairs, it is justified
that the financial reporting is prepared on a going
concern basis
– This report states those material risks and
uncertainties that are relevant to the expectation of
the Company’s continuity for the period of 12
months after the preparation of this report
It should be noted that the foregoing does not imply
that these systems and these procedures provide
absolute assurance as to the realisation of operational
and strategic business objectives, or that they can
prevent all misstatements, inaccuracies, errors, fraud
and non-compliance with legislation, rules and
regulations.
For a detailed description of the risk management
system and the principal risks identified, please refer
to the Risk Management section.
To the Shareholders
During 2023, the Supervisory Board
performed its duties in accordance with
primary and secondary legislation and
the Articles of Association of Heineken
N.V. and supervised and advised the
Executive Board on an ongoing basis.
Financial statements and results appropriation
The Supervisory Board hereby submits to the
shareholders the financial statements and the report
of the Executive Board for the financial year 2023, as
prepared by the Executive Board and approved by the
Supervisory Board in its meeting of 13 February 2024.
Deloitte Accountants B.V. audited the financial
statements. Its report can be found in the Other
Information section.
The Supervisory Board recommends that
shareholders, in accordance with the Articles of
Association, adopt these financial statements.
The underlying principle of the dividend policy is that
30–40% of net profit before exceptional items and
amortisation of acquisition-related intangible assets
(net profit beia) is placed at the disposal of
shareholders for distribution as dividend.
The proposed dividend amounts to €1.73 per share of
€1.60 nominal value, of which €0.69 was paid as an
interim dividend on 10 August 2023.
Supervisory Board composition, skills,
independence and remuneration
Composition
The Supervisory Board started the year 2023 with 10
members: Jean-Marc Huët (Chairman), José Antonio
Fernández Carbajal (Vice-Chairman), Maarten Das,
Michel de Carvalho, Pamela Mars Wright, Marion
Helmes, Rosemary Ripley, Helen Arnold, Nitin Paranjpe
and Francisco Josue Camacho Beltrán.
Related to the earlier described transactions of FEMSA,
José Antonio Fernández Carbajal and Francisco
Josue Camacho Beltrán resigned from the Supervisory
Board on and as per 15 February 2023.
The General Meeting at the Annual General Meeting
of Shareholders (AGM) on 20 April 2023 re-appointed
Mr. de Carvalho and Mrs. Ripley for a period of four
years and appointed Mr. Hijmans van den Bergh and
Mrs. Pardo for a period of four years as members of
the Supervisory Board. The term of Mrs. Arnold expired
at the 2023 AGM.
Supervisory Board composition*
Nationality
American
British
Dutch
Indian
German
Spanish
Supervisory Board composition
Gender
Male
Female
Supervisory Board composition*
Tenure
0–4 years
5–8 years
9–12 years
>12 years
∗ % do not cast due to rounding.
53
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Introduction
Report
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Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
22%
11%
33%
11%
11%
11%
56%
44%
33%
33%
11%
22%
54
To the Shareholders
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Jean-Marc (J.M.)
Huët
Maarten (M.)
Das
Michel (M.R.)
de Carvalho
Pamela (P.)
Mars Wright
Marion (M.)
Helmes
1969
Dutch
nationality
Male
1948
Dutch
nationality
Male
1944
British
nationality
Male
1960
American
nationality
Female
1965
German
nationality
Female
Appointed in 2014; Chairman (as of 2019);
latest re-appointment in 2022*
Appointed in 1994; latest re-appointment
in 2021**
Delegated Member (as of 1995)
Appointed in 1996; latest re-appointment
in 2019**
Appointed in 2016; latest re-appointment
in 2020**
Appointed in 2018; latest re-appointment in
2022**
Profession:
Company Director
Profession:
Lawyer
Profession:
Profession:
Chairman Capital Generation Partners
Company Director
Profession:
Company Director
Supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***:
Vermaat Groep B.V. (Chairman), Picnic
International B.V.
Supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***: Heineken Holding N.V. (Chairman)
No supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***
Supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***:
SHV Holdings N.V.
No supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***
Other positions****:
Other positions****:
Other positions****:
Other positions****:
Other positions****:
L’Arche Green N.V. (Chairman),
L’Arche Holding B.V.
Heineken Holding N.V. (Executive Director),
L’Arche Green N.V., Koç Holding
Moffitts National Board of Advisors
Siemens Healthineers AG, Lonza Group Ltd
Rosemary (R.L.)
Ripley
1954
American
nationality
Appointed in 2019**
Profession:
Managing Director at NGEN
Nitin (N.)
Paranjpe
Female
1963
Indian
nationality
Male
Appointed in 2021**
Profession:
Chief Transformation Officer and Chief
People Officer at Unilever
No supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***
No supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***
Lodewijk (L.J.)
Hijmans van den Bergh
1963
Dutch
nationality
Male
Appointed in 2023
Profession:
Lawyer, Company Director
Supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***
ING Groep N.V. (Member Supervisory Board),
HAL Holding N.V. (Vice-Chairman
Supervisory Board)
Beatriz (B.)
Pardo
1969
Spanish
nationality
Female
Appointed in 2023
Profession:
Vice President General Manager of Starbucks
Reserve
No supervisory board seats (or non-executive
board memberships) in Large Dutch
Entities***
Other positions****:
Other positions****:
Other positions****:
Other
Information
Zevia PBC, Ripley Waterfowl Conservancy,
Better World Acquisition Corp (CEO and
Director)
Hindustan Unilever Ltd (Chairman),
Chinmaya Mission Advisory Council,
Infosys (Independent Director)
Utrecht Universiteitsfonds (Chairman),
Vereniging Aegon (Chairman)
Other positions****:
No other positions
For a term of two years, in line with the Corporate Governance Code.
*
** For the maximum term of four years.
*** Large Dutch Entities are Dutch N.V.s, B.V.s or Foundations (that are required to prepare annual accounts pursuant to Chapter 9 of Book 2 of the Dutch Civil Code or similar legislation) that meet two of the following criteria (on a consolidated basis) on two consecutive balance sheet dates:
(i) The value of the assets (according to the balance sheet with the explanatory notes and on the basis of acquisition and manufacturing costs) exceeds €20 million;
(ii) The net turnover exceeds €40 million;
(iii) The average number of employees is at least 250.
**** Under ‘Other positions’, other functions are mentioned that may be relevant to the performance of the duties of the Supervisory Board.
55
To the Shareholders
Supervisory Board composition and skills matrix
Heineken
N.V.
Annual
Report
2023
Jean-Marc
(R.J.M.S.)
Huët
1969
Maarten
(M.)
Das
1948
Michel
(M.R.)
de Carvalho
1944
Pamela
(P.)
Mars Wright
1960
Male
Male
Female
Dutch
PC, RC,
SAC
British
RC, SAC,
SRC, PC
American
SAC, SRC
Marion
(M.)
Helmes
1965
Female
German
AC (Chair),
RC
Rosemary
(R.L.)
Ripley
1954
Nitin
(N.)
Paranjpe
1963
Lodewijk (L.J.)
Hijmans van
den Bergh**
1963
Beatriz (B.)
Pardo**
1969
Female
Male
Male
Female
American
RC, SRC
Indian
Dutch
SRC (Chair)
RC (Chair), SRC
Spanish
SAC
Year of birth
Gender
Nationality
Male
Dutch
Introduction
Committee
memberships
AC, PC (Chair), RC,
SAC (Chair)
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Skills and
experience
Business
leadership
International
business
Consumer
goods
Finance/
Governance
Marketing/
Innovation
Sustainability
Digital/
Technology
AC – Audit Committee, PC – Preparatory Committee, RC – Remuneration Committee, SAC – Selection and Appointment Committee, SRC – Sustainability and Responsibility Committee
**Appointed at the AGM 2023.
56
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N.V.
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Report
of the
Executive
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Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
To the Shareholders
The Supervisory Board has a diverse composition in
terms of experience, gender, nationality and age. Four
out of nine members are women and six out of nine
members are non-Dutch. There are six nationalities
(American, British, Dutch, German, Indian and
Spanish) and the age of the members ranges
between 54 and 79.
The Supervisory Board is of the opinion that a diversity
of experience and skills is represented on its board. The
elements of a diverse composition of the Supervisory
Board are laid down in the Diversity Policy of the
Supervisory Board, Executive Board and Executive
Team (available on our company website) as per best
practice provision 2.1.5 of the Code. Currently, 44%
(i.e. four out of nine) of the Supervisory Board
members are female.
The profile of the Supervisory Board and the Diversity
Policy of the Supervisory Board, Executive Board and
Executive Team provides that a minimum of one-third
of the seats of the Supervisory Board shall be held by
women and a minimum of one-third of the seats shall
be held by men. The composition of the Supervisory
Board of the Company is compliant with the Diversity
Policy and Dutch law.
Diversity and gender are important drivers in the
selection process. With reference thereto, the
Supervisory Board is committed to retain an active
and open attitude as regards selecting female
candidates. The Supervisory Board is keen to embrace
diversity at large and considers gender, experience,
background, nationality, knowledge, skills and insight
equally important and relevant criteria in selecting
new members.
More details on the skills and experience of the various
Supervisory Board members are provided on the
previous page.
Composition and AGM 2024
Mr. Huët and Mrs. Mars Wright will have completed
their four-year appointment terms per the end of the
AGM on 25 April 2024.
Currently, the majority of the Supervisory Board
(i.e. seven of its nine members) qualify as
‘independent’ as per best practice provision 2.1.8
of the Code.
A non-binding nomination for the re-appointment of
Mr. Huët and Mrs. Mars Wright as members of the
Supervisory Board for a period of two years shall be
submitted to the 2024 AGM.
A non-binding nomination for the appointment of
Mr. Wennink as member of the Supervisory Board
for a period of four years shall be submitted to the
2024 AGM.
It is the aim of the Supervisory Board that its
composition, also in terms of skills and expertise,
supports the Company in its goal to future-proof the
business and deliver superior and balanced growth
with greater focus on meeting the needs of
consumers and customers.
Independence
The Supervisory Board endorses the principle that
the composition of the Supervisory Board shall be
such that its members are able to act critically and
independently of one another and of the Executive
Board and any particular interests.
Given the structure of the Heineken Group, the
Company is of the opinion that, in the context of
preserving the continuity of the Heineken Group and
ensuring a focus on long-term value creation, it is in its
best interest and that of its stakeholders that the
Supervisory Board includes a fair and adequate
representation of persons who are related by blood or
affinity in the direct line of descent to the late Mr. A.H.
Heineken (former Chairman of the Executive Board),
or who are members of the Board of Directors of
Heineken Holding N.V., even if those persons would
not, formally speaking, be considered ‘independent’
within the meaning of best practice provision 2.1.8
of the Code.
There are two members who in a strictly formal sense
do not meet the applicable criteria for being
‘independent’ as set out in the Code: Mr. de Carvalho
(who is the spouse of Mrs. C.L. de Carvalho-Heineken,
the daughter of the late Mr. A.H. Heineken, and who
also is an executive director of Heineken Holding N.V.),
Mr. Das (who is the Chairman of the Board of Directors
of Heineken Holding N.V.). However, the Supervisory
Board has ascertained that Mr. de Carvalho and Mr.
Das in fact act critically and independently.
Remuneration
The AGM determines the remuneration of the
members of the Supervisory Board. Details of the
remuneration can be found in Note 13.3 to the
Financial Statements.
Meetings and activities of the Supervisory Board
During 2023, the Supervisory Board held six meetings
with the Executive Board. Five meetings were held
in person and one meeting was held virtually.
The agenda for the Supervisory Board regularly
included topics such as:
– The business and financial performance of
the Company.
– The Company’s EverGreen strategy aimed at
long-term sustainable value creation as well as the
manner in which the Executive Board implements the
Company’s strategy.
– The financial position of the Company, including
the financing, liquidity position, dividend policy and
credit rating.
– An update of the operationalisation and progress
made in the execution of the Brew a Better World
strategy 2030.
– Large investment proposals, as well as the overall
business development and acquisition landscape and
the geographical footprint of the Company.
– The annual budget and plan as well as the three-year
strategic plan.
– The Company’s People strategy and priorities,
including employee engagement and retention,
succession planning, the inclusion and diversity
strategy and talent management. This also included
a reflection on the purpose, values and behaviours of
the Company.
– Succession planning for the Executive Board,
Supervisory Board and senior management.
– The internal risk management and control system.
– The agenda for the 2023 Annual General Meeting
of Shareholders.
– The selection process of the new external auditor,
to be appointed as per book year 2025.
During the year, several representatives of senior
management and the Executive Team were invited
to give presentations to the Supervisory Board.
The external auditor attended the meeting in which
the annual results were discussed.
The Supervisory Board also had a two-day meeting
with the Executive Team in Amsterdam, the
Netherlands, to discuss the Company’s strategic
priorities. Each Regional President provided an
overview of the performance, growth, productivity
and sustainability developments in their regions
and key markets. The various functional Chiefs
presented about growth and innovation, the route
to consumers and eB2B, productivity, carbon and the
technology landscape.
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Sustainability
Review
Other
Information
To the Shareholders
The Supervisory Board furthermore visited South Africa
together with the Executive Board and the President
AMEE. The General Managers of the operating
companies in South Africa, Namibia and Ethiopia
presented an update on business performance and the
organisational risks and opportunities in their local
organisation and markets. In addition, a market visit to
customers and consumers provided insights in the local
commercial environment. The Supervisory Board also
visited the brewery in Johannesburg and interacted
with many colleagues in the business. The Chief People
Officer also attended the programme in South Africa
and presented an update on various topics.
To ensure permanent education, the Supervisory
Board is provided with regular deep dives on strategic
topics of the Company, both in the meetings of the
Supervisory Board as well as in the meetings of the
committees of the Supervisory Board. The education is
provided by internal as well as external experts. By way
of external education, in October 2023, a presentation
was provided by a professor of IMD on people topics,
including health and well-being and the drivers for
successful employee engagement and employee
performance.
In addition to the foregoing, the following deep dives
were discussed in 2023:
– The announced sale by FEMSA of its shareholding in
the Company and Heineken Holding N.V., and the
subsequent participation of the Company in these
transactions. In these deliberations, Mr. de Carvalho
and Mr. Das excused themselves from participating in
line with their potential conflict of interest due to their
roles as members of the Board of Directors of
Heineken Holding N.V.
– An update on corporate governance developments
including the new Corporate Governance Code, and
an update of the Regulations of the Supervisory
Board and the Committees.
– The impact of inflation and supply chain disruptions
on the Company and the required business measures
and mitigations.
– The Global People strategy, including succession
planning, the inclusion and diversity strategy and
talent management.
– Various business development related projects.
– The strategy to design a competitive and sustainable
supply chain for Europe.
– The strategy for specific markets, including a deep
dive on the United States.
– The strategy of Global Commerce, with additional
attention to the Company’s portfolio in various
regions and markets.
– Digital & Technology, with additional attention
placed on digital transformation programs and
cybersecurity.
– Share price developments of the Company, also
compared to competitors and peers in the FMCG
industry.
The Chairs of the various Committees of the
Supervisory Board provided an update of each of the
Committee meetings to the full Supervisory Board,
focusing on the key topics and developments that
were discussed.
The Chairman of the Supervisory Board met
frequently with the CEO throughout the year and kept
the Supervisory Board informed.
Regular Executive Sessions were held without the
Executive Board being present. The purpose of these
sessions was to evaluate the Supervisory Board
meetings and, where relevant, further reflect on
particular subjects discussed at the meetings.
One Executive Session was dedicated to the
evaluation of the Supervisory Board relating to the
performance, working methods, procedures and
functioning of the Supervisory Board, its Committees
and its individual members as well as the functioning
of the Executive Board and its individual members.
The evaluations were conducted on the basis of
individual interviews of the Supervisory Board
members with the Chairman. The discussions provided
for open conversations and for depth and breadth of
the topics discussed. The periodic use of an external
facilitator to guide the evaluation of the Supervisory
Board will continue to be considered in the future.
The evaluation discussion covered topics such as the
composition and expertise of the Supervisory Board,
the fulfilment of the advisory and supervisory role of
the Supervisory Board, the role of the Chairman of the
Supervisory Board, the topics discussed in the
meetings, the frequency and quality of the meetings,
the quality and timeliness of the meeting materials
and the relation and ways of working with the
Executive Board. The company culture was also
discussed.
The outcome of the evaluations was discussed in a
meeting of the Supervisory Board. The outcome was
very positive and showed that the Supervisory Board
members indicated that the Board functions very well.
A shared conclusion was also that there is room for
open and constructive discussions, well facilitated by
the Chairman of the Supervisory Board. The members
underlined that the Chairman fosters harmony in the
Supervisory Board and enables an inclusive, effective
and positive environment. The evaluation also showed
that the fruitful and constructive relation between the
Supervisory Board and Executive Board is highly
appreciated and valued.
Various suggestions for enhancement of the ways of
working of the Supervisory Board were made in the
evaluations and will be implemented in 2024. As an
example, the Supervisory Board has suggested deep
dives on various strategic and emerging topics with
the Executive Board, including in the commerce area
and developments in the alcohol landscape. The
Supervisory Board would also appreciate a
continuation of the internal and external education,
including on topics such as sustainability and digital
and technology including AI. Furthermore, a few
changes in the set-up of the Committees were
implemented to align the skills and expertise of all
members to the right Committees.
Committees
The Supervisory Board has five Committees: the
Preparatory Committee, the Audit Committee, the
Selection and Appointment Committee, the
Remuneration Committee and the Sustainability and
Responsibility Committee. The Regulations for the
Committees are available on the Company’s website.
The function of the Committees is to prepare the
decision-making of the full Supervisory Board. The full
Supervisory Board retains overall responsibility for the
activities of the Committees.
Preparatory Committee
Composition: Mr. Huët (Chairman), Mr. de Carvalho,
Mr. Das and Mr. Fernández Carbajal (member until
15 February 2023). The Preparatory Committee met
six times.
The Committee prepares decision-making by the
Supervisory Board on matters not already handled by
any of the other committees, such as in relation to
acquisitions and investments. The Chairman of the
Executive Board also attends the Preparatory
Committee meetings.
Audit Committee
Composition: Mrs. Helmes (Chair), Mr. Huët, Mr.
Camacho Beltrán (member until 15 February 2023),
Mrs. Arnold (member until 20 April 2023) and
Mrs. Ripley.
The Audit Committee met four times.
The members collectively have the experience and
financial expertise to supervise the Executive Board in
its activities in relation to the publication of Financial
Statements and operation of the internal risk
management and control systems, including the risk
profile of the Company.
The Executive Board attended all meetings, and so did
the external auditor, the Executive Director Global
Audit, as well as the Senior Director Global Accounting
and Risk Management.
58
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Report
of the
Executive
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Report
of the
Supervisory
Board
Financial
Statements
To the Shareholders
The Executive Director Global Audit has direct access
to the Audit Committee, primarily through its
Chairperson. During the year, the Audit Committee
met once with the external auditors and once with the
Executive Director Global Audit, in both instances
without management being present. In addition, the
Chairperson of the Audit Committee and the
Executive Director Global Audit held regular update
meetings during the year.
The Audit Committee supervises the activities of the
Executive Board with respect to the publication of
financial information. The Committee reviews, in the
presence of the Executive Board and the external
auditor, the appropriateness of the half year reporting
and the annual financial statements, focusing on:
– The decisions made on the selection and application
of accounting policies.
– The reliability and completeness of disclosures.
Furthermore, the Audit Committee in 2023 discussed
recurring topics, such as:
– The effectiveness and the outcome of the internal
control and risk management systems, as well as
changes made and improvements planned to
these systems.
– (Functional) Updates in respect of Global
Procurement, Global Treasury & Insurance and
Global Tax, Pensions, Business Conduct and Global
Legal Affairs, as well as Risk Management.
– A dedicated deep dive in respect of Global Digital &
Technology, including on cybersecurity.
– Specific updates in the area of sustainability
reporting and the preparations for the anticipated
European legislation in this area (including CSRD).
– HEINEKEN’s governance, risk and compliance (GRC)
activities, including the HEINEKEN Company Rules
and the HEINEKEN Code of Business Conduct.
– Compliance with financial and sustainability
– The outcome of the internal audit activities.
reporting requirements.
– Significant judgements, estimates and assumptions
used in preparing the reports in respect of, among
others, accounting for acquisitions and divestments,
the annual impairment test and determining the level
of provisions.
At the beginning of the year, the Audit Committee
reviews and approves the audit plans of the external
auditor as well as the internal audit function. The
Committee focuses mainly on the scoping, key risks,
staffing and budget.
Sustainability
Review
During the year, the Audit Committee reviews the
reports of the external auditor and Global Audit.
Other
Information
The Chair of the Audit Committee held regular update
meetings with the CFO and other senior executives.
During the year, the Chair of the Audit Committee
informed the Supervisory Board of the discussions
held in the Audit Committee.
– The outcome of the annual Letter of Representation
process and the report from the Integrity Committee
related to fraud reporting and Speak Up policy.
– The evaluation of the external auditor, Deloitte
Accountants B.V.
– A post investment review of material asset and
equity investments that have been operationally live
for a certain period of time.
The Audit Committee spent significant time in 2023
on the selection process of the Company’s new
external auditor. Deloitte Accountants B.V. has been
the Company’s external auditor since the reporting
year 2014. The Audit Committee initiated the
selection process for a new external auditor in October
2022 in connection with the mandatory external audit
firm rotation as per the financial year 2025.
The Audit Committee considered it important to start
with the preparations and selection process in a timely
manner to ensure a thorough process, considering the
high level of complexity and wide range of
stakeholders involved. In addition, the Audit
Committee considered it essential to have sufficient
time for transitioning to the new external audit firm
and for transferring any non-audit services currently
performed by the newly appointed external audit firm.
The Audit Committee established a separate
Committee (the ‘Selection Committee’) to make
recommendations regarding the selection of the
external audit firm. The Selection Committee met
frequently during this process in 2023. The Chair of
the Audit Committee acted as Chair of the Selection
Committee. The CFO and the Executive Director
Global Audit were also part of the Selection
Committee. The Senior Director Global Accounting &
Risk Management participated in the Selection
Committee as a non-voting member.
The Selection Committee invited all audit firms that
have a licence to audit public interest entities in the
Netherlands (other than the current engaged audit
firm), to participate in the selection process. The three
’big four’ audit firms decided to participate in the
selection process, whereas the other firms declined
participation considering HEINEKEN’s size and
footprint.
After conducting a series of interviews as well as two
presentation rounds, in which the participating firms
were offered the opportunity to present themselves
and their audit proposals, the Selection Committee
evaluated the participating audit firms based on
certain pre-defined selection criteria, such as the
international network of the audit firm, the experience
with the industry, the qualities of the engagement
team, the readiness related to non-financial reporting,
the ‘fit’ with the audit partner and the audit team, the
effectiveness of the audit approach, the transition
strategy, the competitiveness of the audit fee as well
as proposal documentation and presentations
provided by the invited audit firms.
The two final participants subsequently presented
to the Selection Committee and the other members
of the Audit Committee. The Audit Committee
concluded that the proposal of KPMG best matched
the selection criteria of the Company, noting the
overall strength and in-depth knowledge of the
audit team, the proposed audit approach and the
competitiveness in the proposal. The Audit Committee
also recognised the cultural fit of the Company
with KPMG.
On this basis the recommendation was made by the
Audit Committee to the Supervisory Board to propose
one of the two final participants at the AGM 2024 for
appointment, with a preference for KPMG, which
recommendation the Supervisory Board has followed.
Based on this assessment, it is intended to submit the
proposal to the 2024 AGM to appoint KPMG
Accountants N.V. as external auditor of the Company
for the financial year 2025.
Selection and Appointment Committee
Composition: Mr. Huët (Chairman), Mr. de Carvalho,
Mr. Das, Mrs. Mars Wright, Mrs. Pardo and
Mr. Fernández Carbajal (member until 15 February
2023). The Selection and Appointment Committee
met three times.
In 2023, the following subjects were on the agenda:
– The profile, composition and rotation schedule of the
members of the Supervisory Board. This review has
resulted in recommendations for nominations for
appointment of one new member of the Supervisory
Board at the AGM 2024.
– The composition of the committees of the
Supervisory Board, considering the skills and
expertise of the various members and the focus
areas of the various committees. This review has
resulted in various proposed changes in the
committee composition.
– Evaluation of the Supervisory Board and the
Executive Board.
– The succession of various members of the Executive
Team as well as succession planning and talent
management.
– The Chief People Officer presented research on
‘Succeeding at HEINEKEN’, a study undertaken to
identify and understand individual and
organisational factors contributing to success or
early departure of new hires in senior management
leadership positions.
The details of the remuneration practices and
outcome of 2023 are in the 2023 Remuneration
Report, which is included in this Annual Report.
Sustainability and Responsibility Committee
Composition: Mr. Paranpje (Chairman as per 16
February 2023), Mr. de Carvalho, Mrs. Mars Wright,
Mrs. Ripley, Mr. Fernández Carbajal (Chairman and
member until 15 February 2023) and Mr. Hijmans van
den Bergh (member as per 14 December 2023).
The Committee met three times.
In 2023, the following subjects were on the agenda:
– The operationalisation of the Brew a Better World
2030 strategy and the progress made against the
KPIs across the three key pillars of the strategy, being
environmental, social and responsible consumption.
– Various deep dives within the three pillars, including
on social sustainability and human rights, responsible
consumption, circularity and the role of alcohol in
society.
– At the end of the year, the learnings from Brew a
Better World delivery since the launch in 2021 were
discussed, including the right target setting, the
prioritisation by Operating Companies and
stakeholder expectations. The impact of increased
sustainability reporting was also discussed.
– The focus areas, risks and opportunities of the
Company in the area of the Brew a Better World
strategy for 2024 and beyond. As various KPIs of
Brew a Better World were set for 2023, the
sustainability priorities and target setting
beyond 2023 were discussed, taking into account
progressive insights, legislation and internal and
external expectations.
59
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
To the Shareholders
Remuneration Committee
Composition: Mr. Hijmans van den Bergh (Chairman
as per 13 December 2023), Mr. Das (Chairman and
member until 13 December 2023), Mr. de Carvalho,
Mr. Huët, Mrs. Helmes. The Remuneration Committee
met three times.
The Committee made recommendations to the
Supervisory Board regarding the achievement of the
2022 targets and related compensation of the
Executive Board and the 2023 target setting of the
Executive Board, that were endorsed by the
Supervisory Board. As part of the recommendations,
the Remuneration Committee took note of the
Executive Board members’ views with regard to the
amount and structure of their own remuneration.
The Remuneration Committee also received a report
on the status and trends in executive remuneration
and executive remuneration governance in order to
fulfil its remuneration governance responsibilities.
The report aimed, among other things, to review
alignment of the Company’s remuneration practices
with its remuneration principles, to provide an
overview of the Company’s competitive remuneration
positioning versus the market, to assess the relation
between actual remuneration and performance,
and to update the Committee on executive
compensation trends, regulatory developments
and views of investors, external stakeholders
including public opinion.
The Remuneration Committee also discussed the
Remuneration Policy for the Supervisory Board in light
of the legislation that provides that the Policy shall be
referred to the AGM every 4 years, and therefore will
be part of the agenda of the AGM 2024. The
Committee also reflected on the appropriateness of
the fees of the Supervisory Board in light of the
increased scope of activities and responsibilities next
to the overall internal and external developments of
fees of Supervisory Board members.
Furthermore, after receiving valuable feedback from
shareholders and shareholder interest organisations at
the AGM 2022 with respect to the Remuneration
Report, several changes were implemented and were
discussed in the AGM 2023. The Remuneration Report
received high voting outcomes at the AGM 2023.
60
Heineken
N.V.
Annual
Report
2023
To the Shareholders
Attendance
The Supervisory Board confirms that all Supervisory Board members have adequate time available to give
sufficient attention to the concerns of the Company.
In 2023, the attendance rate was 93% for the Supervisory Board meetings and 96% for the committee
meetings. In case of absence, members are fully informed in advance, enabling them to provide input for the
meeting, and they are also updated on the meeting outcome.
The table below provides an overview of the attendance record of the individual members of the Supervisory
Board. Attendance is expressed as a number of meetings attended out of the number eligible to attend.
Supervisory
Board
Preparatory
Committee
Audit
Committee
Selection &
Appointment
Committee
Remuneration
Committee
Sustainability &
Responsibility
Committee
Mr. Huët
Mr. Das
Mr. de Carvalho
Mrs. Mars Wright
Mrs. Ripley
Mrs. Helmes
Mr. Paranjpe
Mrs. Pardo*
Mr. Hijmans van den
Bergh*
Mr. Camacho Beltrán**
Mr. Fernández Carbajal***
Mrs. Arnold****
6/6
5/6
6/6
6/6
6/6
6/6
6/6
5/5
5/5
0/1
0/1
0/1
6/6
6/6
6/6
0/1
4/4
4/4
4/4
0/1
0/1
3/3
3/3
3/3
3/3
3/3
3/3
3/3
3/3
3/3
2/2
3/3
3/3
3/3
3/3
1/1
Mrs. Pardo and Mr. Hijmans van den Bergh’s term started on 20 April 2023 at the AGM.
*
** Mr. Camacho Beltrán’s term in the Supervisory Board started on 21 April 2022 and ended on 15 February 2023.
*** Mr. Fernández Carbajal’s term in the Supervisory Board ended on 15 February 2023.
**** Mrs. Arnold’s term in the Supervisory Board ended on 20 April 2023 at the AGM.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Executive Board composition and remuneration
Composition
Best practice provision 2.2.1 of the Code recommends that an Executive Board member is appointed for a
period of four years and that a member may be reappointed for a term of not more than four years at a time.
In compliance with this best practice provision, the Supervisory Board has drawn up a rotation schedule to avoid,
as much as possible, a situation in which Executive Board members retire at the same time.
Mr. Dolf van den Brink was appointed for a period of four years during the AGM in 2020 as Chairman and CEO
of the Executive Board. As announced on 14 December 2023, the Supervisory Board shall nominate Mr. Van den
Brink for re-appointment as member of the Executive Board at the 2024 AGM.
Mr. Harold van den Broek was appointed for a period of four years during the AGM in 2021 as CFO and member
of the Executive Board.
Remuneration
The AGM approved the current remuneration policy for the Executive Board in 2022.
Appreciation
The Supervisory Board wishes to express its gratitude to the members of the Executive Board and all HEINEKEN
employees for their hard work and dedication in 2023.
Supervisory Board Heineken N.V.
Huët
Das
de Carvalho
Mars Wright
Ripley
Helmes
Paranjpe
Pardo
Hijmans van den Bergh
Amsterdam, 13 February 2024
Remuneration Report 2023
Annual statement from the Remuneration Committee Chair
Dear Shareholder,
I am pleased to present the HEINEKEN remuneration report for the year 2023. This report includes our
remuneration policies for the Executive Board and the Supervisory Board and describes how these policies
were put into practice during the year.
Our remuneration policies and practices are based on our long-standing remuneration principles. They align
with our aim to achieve sustainable business growth in the diverse markets where we operate. In designing and
implementing the remuneration policies, the Supervisory Board has taken into account the perspectives and
input of both internal and external stakeholders, as well as public opinion, to the best of its abilities.
Stakeholder engagement
In the lead-up to the 2023 annual general meeting of shareholders, the Company actively engaged with
major shareholders and other stakeholders on various critical topics, including remuneration. Our decision to
provide more comprehensive details in the 2022 remuneration report received positive feedback from all parties.
Our discussions with stakeholders delved into various aspects of our remuneration practices, including the
performance measures of the Short- and Long-term incentives for the Executive Board and the terms and
conditions for individual executives. The Supervisory Board carefully considered all the feedback received and
engaged in thorough internal discussions. We highly value the ongoing dialogue with our shareholders and
stakeholders and will continue to consider their valuable input when shaping future revisions to our
remuneration policies.
Increased transparency
During the 2023 annual general meeting, shareholders were asked to cast an advisory vote on the 2022
remuneration report. The report was adopted with 97.84% of the votes cast in favour, which was a significant
increase from the previous year’s results. The Supervisory Board attributes the increased shareholder support
to the enhanced disclosures presented in the 2022 remuneration report and is sincerely thankful for the
shareholders' support, which we view as a validation of our commitment to transparency and accountability.
Building on this positive momentum, this 2023 remuneration report further increases transparency by disclosing
the individual leadership objectives that were included in the 2023 Short-term incentive. Additionally, it
introduces a "Remuneration at a glance" page, which offers a comprehensive overview of the key remuneration
outcomes for 2023 in a single, easily accessible format.
61
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Executive Board remuneration
Base salary adjustments
Both the CEO and CFO received a 4% base salary increase effective 1 January 2023. This increase was in line
with the projected increase for executives of companies of similar size and complexity, and below the
percentage increase received by other HEINEKEN employees in the Netherlands.
2023 Short-term incentive outcomes and vesting of 2021-2023 Long-term incentive
The overall mathematical outcome of the 2023 Short-term incentive was 19% of target. This outcome reflects
the company’s financial performance in 2023 and the significant advances made in Cost management and
Accelerating the EverGreen Strategic Plan delivery. The overall outcome of the 2021-2023 Long-term incentive
was 198% of target. The Supervisory Board believes this outcome is representative of HEINEKEN’s strong
performance in the first two years of the performance period.
Supervisory Board remuneration
The Supervisory Board remuneration policy and fee levels remained unchanged in 2023. During the year,
the Supervisory Board discussed the need for an adjustment to the fee levels. A proposal will be put forth for
approval at the 2024 AGM.
I would like to thank our shareholders for their continued support. On behalf of the Supervisory Board, I would
also like to express our sincere appreciation to Maarten Das for his exemplary service as the Chairman of the
Remuneration Committee for nearly two decades.
I look forward to presenting this remuneration report at the 2024 AGM.
Lodewijk Hijmans van den Bergh
Chairman of the Remuneration Committee
62
Remuneration Report 2023
This Remuneration Report includes five sections:
Heineken
N.V.
Annual
Report
2023
Part I
Describes the prevailing Executive Board remuneration policy, as adopted by the AGM in 2022, and as it has been
implemented in 2023.
Part II
Describes the prevailing Supervisory Board remuneration policy, as adopted by the AGM in 2020, and as it has
been implemented in 2023.
Part III
Provides details of the Executive Board’s actual remuneration for performance ending in, or at year-end, 2023.
Part IV
Provides details of the Supervisory Board’s actual remuneration ending in, or at year-end 2023.
Introduction
Part V
Outlines adjustments to the remuneration policy and implementation for 2024.
Remuneration
element
Base salary
Short-term
incentive
Part I – Executive Board remuneration policy
Remuneration principles
The Executive Board remuneration policy is designed to meet four key principles:
– Support the business strategy
We align our remuneration policy with business strategies focused on creating long-term sustainable growth
and shareholder value while maintaining a tight focus on short-term financial results.
– Pay for performance
We set clear and measurable targets for our short-term and long-term incentive plans, and we pay higher
remuneration when targets are exceeded and lower remuneration when targets are not met.
– Pay competitively
We set target remuneration to be competitive with other relevant multinational corporations of similar size
and complexity.
Long-term
incentive
– Pay fairly
We set target remuneration to be internally consistent and fair; we regularly review internal pay relativities
between the Executive Board and the wider employee population and aim to achieve consistency and
alignment in, amongst others, remuneration changes, salary structures and the design of variable
compensation where possible.
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Pensions
Benefits
Summary overview of remuneration elements
The Executive Board remuneration policy is simple and transparent in design, and consists of the following key
elements:
Description
Strategic role
–
–
–
–
–
–
–
–
–
–
–
–
–
Involves fixed cash compensation
Aims for the median of the labour market peer group
Is based on achievements of annual measures, of
which 75% relate to financial and operational
measures for Heineken N.V. and 25% to individual
leadership measures
Aims, at target level, for the median of the labour
market peer group
Is partly paid in cash, and partly in investment shares
with a holding period of five calendar years:
–
the part paid in shares is between 25% and
50% of the full before-tax Short-term incentive
amount, depending on the individual’s choice
whether, and to what extent, to exceed the
mandatory 25% share investment
the part paid in cash is paid net of taxes (i.e.,
after deduction of withholding tax due on the
full before-tax Short-term incentive amount)
–
Investment shares are matched on a 1:1 basis after
the holding period
Is based on achievements of three-year targets for
Heineken N.V., of which 75% relate to financial
measures and 25% relate to ESG measures
Aims, at target level, for the median of the labour
market peer group
Is awarded through the vesting of shares, net of
taxes (i.e., after deduction of withholding tax due on
the full before-tax Long-term incentive amount)
Vested shares are blocked for another two years, to
arrive at a five-year holding restriction after the date
of the conditional performance grant
Defined Contribution Pension Plan and/or Capital
Creation Plan
Provides a range of benefits, including, but not
limited to, company car, fuel and health insurance
Aims to be in line with local market practice
–
–
–
–
–
–
–
–
–
Facilitates attraction and is the
basis for competitive pay
Rewards performance of day-
to-day activities
Drives and rewards sound
business decisions for the long-
term health of HEINEKEN
Aligns Executive Board and
shareholder interests
Drives and rewards sound
business decisions for the long-
term health of HEINEKEN
Aligns Executive Board and
shareholder interests
Supports Executive Board
retention
Provides for employee welfare
and retirement needs
Provides market competitive
benefits to aid retention
63
Heineken
N.V.
Annual
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2023
Remuneration Report 2023
Labour market peer group
A global labour market peer group was adopted by the AGM in 2011 and subsequently adjusted in 2012 and
2017. The median target remuneration of this peer group is a reference point for the target remuneration of the
CEO and CFO. Each year, the Remuneration Committee validates the peer group to ensure relevance and
recommends adjustments to the Supervisory Board if needed. For 2023, the peer group consisted of the
following companies:
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Anheuser-Busch InBev (BE)
Carlsberg (DK)
Coca-Cola (US)
Diageo (UK)
Henkel (DE)
Nestlé (CH)
PepsiCo (US)
Kimberly-Clark (US)
Pernod Ricard (FR)
Colgate-Palmolive (US)
Mondelēz International (US)
Unilever (UK)
Danone (FR)
L’Oréal (FR)
Base salary
Every year, the peer group and base salary levels are reviewed, and the Remuneration Committee may propose
adjustments to the Supervisory Board. HEINEKEN aims to compensate at median on-target remuneration of the
peer group. However, when changes in base salary are considered, broader factors are taken into account,
including but not limited to individual and business performance and internal pay relativities.
Short-term incentive
The Short-term incentive (STI) is designed to drive and reward the achievement of HEINEKEN’s annual
performance targets. Through its payout in both cash and investment shares it also drives and rewards sound
business decisions for HEINEKEN’s long-term health while aligning Executive Board and shareholder interests at
the same time. The target STI opportunities for 2023 are 140% of base salary for the CEO and 100% of base
salary for the CFO.
The STI opportunities are for a weighted 75% based on financial and operational measures for Heineken N.V.,
and for a weighted 25% on individual leadership measures. At the beginning of each year, the Supervisory Board
establishes the performance measures, their relative weights and corresponding targets based on HEINEKEN’s
business priorities for that year. The Supervisory Board ensures that a balanced mix of financial, operational and
individual performance measures is selected, which incentivises executives to achieve our annual business
strategy and the growth of shareholder value.
The financial and operational measures and their relative weights are reported in the Remuneration Report
upfront (ex-ante); the numerical performance targets are disclosed after the close of the financial year (ex-post)
as they are considered commercially sensitive. In the first weeks of the following year, the Supervisory Board
reviews Company and individual performance against the pre-set targets and approves the STI payout levels
based on the performance achieved. The performance on the financial measures will be reported on actual
measure achievement results (cf. Part III).
The STI payout for 2023 is subject to four performance measures: Organic Net Revenue Growth (weight: 35%),
Organic Operating Profit beia Growth (weight: 15%), Free Operating Cash Flow (weight: 25%) and Individual
leadership measures (weight: 25%). The Individual leadership measures are a mix of quantitative and qualitative
measures tied to the achievement of our EverGreen strategy and are detailed in Part III of this report. The STI
payout for 2024 will be subject to the same four performance measures: Organic Net Revenue Growth (weight:
35%), Organic Operating Profit beia Growth (weight: 15%), Free Operating Cash Flow (weight: 25%) and
Individual leadership measures (weight: 25%). The individual leadership objectives are tied to the achievement
of our EverGreen strategy.
For each performance measure, a threshold, target and maximum performance level are set with the following
STI payout, as a percentage of target payout:
Threshold performance
50% of target payout
Target performance
100% of target payout
Maximum performance
200% of target payout.
For each measure, payout in between these performance levels is on a straight-line basis; below threshold
performance the payout is zero, whereas beyond maximum performance it is capped at 200% of payout at
target.
In line with policy, 25% of the STI payout is paid out in shares, referred to as investment shares. At their
discretion, the Executive Board members have the opportunity to indicate before the end of the performance
year whether they wish to receive up to another 25% of their STI payout in additional investment shares. All
investment shares thus received are then blocked and cannot be sold under any circumstance, including
resignation, for five calendar years to link the value of the investment shares to long-term Company
performance. Withholding tax on the investment shares and on the cash part of the STI payout is settled with
the cash part at the time of payout. After the blocking period is completed after five calendar years, the
Company will match the investment shares 1:1 in the first weeks of the following year, i.e., one matching share is
granted for each investment share. As of then, there are no holding requirements on these investment shares
anymore, and there are no holding requirements on the resulting matching shares that remain after withholding
tax on these shares.
According to plan rules, matching entitlements will be forfeited in case of dismissal by the Company for an
urgent reason within the meaning of the law (‘dringende reden’), or in case of dismissal for cause (‘gegronde
reden’), whereby the cause for dismissal concerns unsatisfactory functioning of the Executive Board member.
With this ‘deferral-and-matching’ proposition, a significant share ownership by the Executive Board is ensured,
creating an increased alignment with the interests of shareholders. The Supervisory Board has the power to
revise the amount of the STI payout to an appropriate amount if the STI payout that would have been payable
in accordance with the agreed payment schedule would be unacceptable according to standards of
reasonableness and fairness. The Supervisory Board is entitled to claw back all or part of the STI payout (in cash,
investment shares or matching shares) insofar as it has been made on the basis of incorrect information about
achieving the performance conditions.
64
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Remuneration Report 2023
Long-term incentive
The Long-term incentive (LTI) is designed to drive and reward sound business decisions for HEINEKEN’s long-
term health, and to align the Executive Board with shareholder interests by linking rewards to HEINEKEN’s share
price performance. The target LTI opportunities for 2023 at grant are 150% of base salary for the CEO and
125% of base salary for the CFO.
Each year, a target number of performance shares is conditionally granted based on the target LTI opportunity
percentage of that year, the base salary of that year, and the closing share price of 31 December of the
preceding year.
HEINEKEN’s strong and long-standing ambition regarding Sustainability & Responsibility is clearly reflected in
our EverGreen strategy and related Brew a Better World (“BaBW”) commitments. A set of ESG-related
performance measures was introduced to the Long-term incentive plan in 2022, directly linking the Executive
Board’s long-term remuneration with HEINEKEN’s Sustainability & Responsibility strategy. Three BaBW
commitments are included as performance measures: carbon emissions reduction, water efficiency
improvement, and women at senior manager level.
The vesting of the performance shares is contingent on HEINEKEN’s performance over a period of three years
on a list of performance measures below.
Organic Net Revenue Growth (25%)
To drive top line growth
Earnings Per Share (EPS) beia Growth (25%)
To drive overall long-term Company performance
Free Operating Cash Flow (25%)
To drive focus on cash
ESG measures (25%)
To drive the Sustainability & Responsibility agenda
The three financial performance measures and the combined ESG -related measures have equal weight to
minimise the risk that executives over-emphasise one performance measure to the detriment of others. At the
beginning of each performance period, the Supervisory Board establishes the corresponding numerical targets
for these performance measures based on HEINEKEN’s business priorities. The numerical targets for the three
financial performance measures are not disclosed upfront as they are considered to be commercially sensitive.
The ESG measures and corresponding performance targets for the 2023-2025 Long-term incentive were set in
line with our Brewing a Better World ambitions. They are as follows:
ESG Measures
Weight
Threshold
Target1 Maximum
Carbon emissions reduction in production % vs 2022 baseline
8.33 %
Water efficiency improvement
% vs 2018 baseline
8.33 %
Women at senior manager level
% in 2025
8.33 %
-32.0 %
-12.0 %
28.0 %
-35.0 %
-38.0 %
-15.0 %
-18.0 %
30.0 %
32.0 %
1 Target to have been achieved at the end of the 2023-2025 performance period.
In the first weeks following the end of the performance period, the Supervisory Board reviews the Company’s
performance against the pre-determined targets and approves the LTI vesting based on the performance
achieved. The performance on both the financial and ESG-related measures will be reported on actual measure
achievement results (cf. Part III).
For each performance measure, a threshold, target and maximum performance level are set with the following
performance share vesting schedule:
Threshold performance
50% of performance shares vests
Target performance
100% of performance shares vests
Maximum performance
200% of performance shares vests.
For each measure, vesting in between these performance levels is on a straight-line basis; below threshold
performance the vesting is zero, whereas beyond maximum performance it is capped at 200% of vesting
at target.
The Supervisory Board has the power to revise the amount of performance shares that will vest to an
appropriate number if the number of performance shares that would have vested under the agreed vesting
schedule would be unacceptable according to standards of reasonableness and fairness. The Supervisory Board
is entitled to claw back all, or part of the shares transferred to the Executive Board members upon vesting (or the
value thereof) insofar as vesting occurred on the basis of incorrect information about achieving the performance
conditions. The vested performance shares that remain after withholding tax are subject to an additional
holding restriction of two years, to arrive at a five-year holding restriction after the date of the conditional
performance grant.
Pay mix
The mix between fixed pay and variable pay for various levels of performance is illustrated below. In these
charts, fixed pay refers to base salary only, excluding pensions and other emoluments, and variable pay consists
of the aforementioned Short-term and Long-term incentive opportunities, including the ‘deferral-and-matching’
proposition. Share price movements during performance and holding periods are hereby not included since
these are unknown in the context of target remuneration.
CEO target pay mix 2023
Below threshold
performance
At threshold
performance
At target
performance
At/beyond max
performance
CFO target pay mix 2023
Below threshold
performance
At threshold
performance
At target
performance
At/beyond max
performance
Fixed pay
Variable pay
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Pensions
The members of the Executive Board participate in a defined contribution Capital Creation Plan. As of 2015,
following pension reforms in the Netherlands, new members of the Executive Board receive the same
contribution as new executives under Dutch employment contract below the Executive Board, which is currently
18% of base salary. This applies to our current CEO and CFO. Both Executive Board members have chosen to
receive their full pension contributions as taxable income, as opposed to applying tax deferral to the maximum
amount possible.
Benefits
The members of the Executive Board are eligible to receive benefits in line with HEINEKEN’s most senior
employees. The benefits include, but are not limited to, company car, fuel and health insurance. Other benefits
could be offered in circumstances where this allows executives to successfully fulfil the responsibilities of their
role. For example, in case of a relocation the appropriate relocation support is provided. The levels of the benefits
will be competitive in the relevant local market and could be changed year on year.
Introduction
Loans
HEINEKEN does not provide loans to the members of the Executive Board.
Term of appointment
New members of the Executive Board are appointed by the AGM for the duration of 4 years, subject to
reappointment by the AGM.
Notice period
The service agreement may either be terminated by the member of the Executive Board or by the Company.
The notice period will not be more than 12 months for both the Company and the individual.
Compensation rights on termination of employment/service agreement
If the Company gives notice of termination of the employment agreement of a member of the Executive Board
for a reason which is not an urgent reason (‘dringende reden’) within the meaning of the law, or decides not to
extend the service agreement upon its expiry, or if the AGM does not re-appoint them as member of the
Executive Board for a subsequent term, the Company shall pay an amount equal to one year of base salary.
The treatment of incentive awards will depend on the circumstances of departure. A proposal will be made by
the Remuneration Committee to be pursued by the Supervisory Board. In case of dismissal by the Company for
an urgent reason within the meaning of the law (‘dringende reden’), or in case of dismissal for cause (‘gegronde
reden’) whereby the cause for dismissal concerns unsatisfactory functioning of the Executive Board member, the
unvested incentive awards will be forfeited.
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Derogation clause
The Supervisory Board, upon recommendation of the Remuneration Committee, may temporarily deviate from
any sections of the Policy based on its discretion in the circumstances described below:
– Upon change of the Executive Board member in accordance with the new hire policy
– In any other circumstance where the deviation may be required to serve the long-term interests and sustainability
of the Company as a whole or to assure its viability
New hire policy
Our recruitment policy is to offer a compensation package that allows HEINEKEN to attract, retain and motivate
the individual with the right skills for the required role. When determining remuneration for an Executive Board
member, the Supervisory Board will, at the recommendation of the Remuneration Committee, consider the role’s
requirements, business needs, the individual’s skills and experience and the relevant external talent market.
Where an individual is recruited externally for an Executive Board member position, the remuneration package
in their prior role will be taken into account. The Supervisory Board will seek to align the new member’s
remuneration package with the Executive Board Remuneration Policy. The Company may offer compensation
to buy out awards or other lost compensation which the candidate held prior to joining HEINEKEN, but which
lapsed upon leaving their previous employer. The rationale of any such award will be disclosed in the
Remuneration Report.
Where an individual is appointed to the Executive Board through internal promotion or following a corporate
transaction (e.g., an acquisition), the Board retains the ability to honour any legally binding legacy arrangements
agreed prior to the appointment.
Remuneration Governance
The Remuneration Committee makes the proposal to the Supervisory Board for the Remuneration Policy to be
pursued and makes a proposal for the remuneration of the individual members of the Executive Board for
adoption by the Supervisory Board. In accordance with Dutch Law, the remuneration policy will be submitted
for approval to the AGM at least every four years, or in case of material amendments to the policy. The Executive
Board members shall not participate in the decision making regarding their own remuneration to avoid conflict
of interest.
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Part II – Supervisory Board remuneration policy
Remuneration principles
The Supervisory Board remuneration policy is designed to attract and retain high-class and diverse profiles
with relevant skills and experience that are required to perform the Supervisory Board’s duties and it ensures
appropriate corporate governance by meeting the following key principles:
– Support the business strategy
We align our remuneration policy with business strategies focused on creating long-term sustainable growth
and shareholder value.
– Pay for purpose
We align our remuneration policy to promote the independence and objectivity of our Supervisory Board
members, which is a key element to best serve the long-term interest of the company.
– Pay competitively
Introduction
We set remuneration levels to be competitive with other relevant multinational corporations of similar size
and complexity.
Summary overview of remuneration elements
The Supervisory Board remuneration policy is simple and transparent in design, and consists of the following key
elements:
Element
Purpose
Description
Base Board Fees
–
–
–
Supervisory Board members receive
a fixed cash compensation for their
services.
In line with the Dutch Corporate
Governance code, no variable pay
and/or equity awards are offered.
In order to provide a fee level that is
competitive with other companies
comparable to HEINEKEN, reviews
are conducted on a regular basis.
–
–
The Remuneration Committee is responsible
for reviewing the compensation levels on a
regular basis and to bring forward proposals
(if any) to the Supervisory Board. Proposals
are submitted to the Annual General Meeting
for approval.
This review is done through a benchmark
assessment against a pan-European peer
group consisting of companies that are of
comparable size to HEINEKEN.
While establishing and implementing the policy, the perspective and input of internal and external stakeholders
and the external environment in which HEINEKEN operates, are taken into consideration. HEINEKEN is also
committed to an ongoing dialogue with shareholders and seeks the views of significant shareholders before any
material changes to remuneration arrangements are put forward for approval.
Committee Fees
–
–
Supervisory Board members are
compensated for additional
responsibilities such as Committee
membership.
In order to provide a fee level that is
competitive with other companies
comparable to HEINEKEN, reviews
are conducted on a regular basis.
–
– Members are eligible to receive additional
fees in respect of serving as a Chairman or
Member of a Committee.
Fee levels between Committees can differ if
this is deemed appropriate depending on the
time commitment and responsibilities
associated with the Committee membership.
Fees are additive; if a Board member serves in
multiple Committees, the compensation will
consist of the Board membership fee and the
sum of the corresponding Committee fees.
–
Allowances and
Benefits
–
Supervisory Board members are
reimbursed and compensated for
additional efforts that enable them
to exercise their role.
– Members receive reimbursement of travel
expenses and are compensated for
intercontinental travel required to exercise
their role.
Small benefits such as retirement gifts may
also be provided.
–
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Part III – The Executive Board actual remuneration for performance ending in, or at year-end, 2023
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Report
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Executive
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Statements
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Other
Information
Remuneration Report 2023
The following table provides an overview of the Executive Board actual remuneration that became unconditional in, or at year-end of, 2023. For disclosures in line with IFRS reporting requirements, which are ‘accrual-based’ over
earning/performance periods and partly depend on estimations/assumptions, see note 13.3 ‘Related parties’ on page 122.
As part of its annual agenda, the Remuneration Committee conducted scenario analyses to evaluate the potential financial outcomes of meeting different performance levels. These analyses considered how such outcomes
would affect the structure and value of the Executive Board’s total remuneration and whether they would align with our remuneration policy principles.
2021-2023 Long-term incentive
Matching entitlements
Extraordinary Share Grants
(1) Base salary in €
(2) 2023 Short-term
incentive in €
(3) No. of
performance shares
vesting
(4) Value of
performance shares
vesting in €
(5) No. of matching
entitlements
vesting
Van den Brink
Van den Broek
1,300,000
884,000
345,800
167,960
40,699
19,860
3,741,866
1,825,928
—
—
(6) Value of
matching
entitlements
vesting in € (7) Pension cost in €
—
—
323,407
252,262
(8) No. of
extraordinary
shares vesting1
(9) Value of
extraordinary
shares vesting in €
(10) Other
emoluments in €
(11) Total in €
—
—
29,725
5,740,799
13,155
1,209,471
—
4,339,621
1 See details on Mr. Van den Broek's extraordinary share grant under point ad(8).
ad (1) – Base salary
These base salaries have been paid to the members of the Executive Board for 2023.
ad (2) – 2023 Short-term incentive
The 2023 Short-term incentive (STI) relates to the performance year 2023 and becomes payable in 2024.
The target opportunities were 140% of base salary for the CEO and 100% of base salary for the CFO.
The 2023 STI was subject to four performance measures: Organic Net Revenue Growth (weight: 35%), Organic
Operating Profit beia Growth (weight: 15%), Free Operating Cash Flow (weight: 25%) and Individual leadership
measures (weight: 25%). The following table shows the performance targets and intervals, as well as the actuals
achievements as determined by the Supervisory Board for each of these measures.
Performance Measure
Weight
Threshold
Target Maximum Achievement
Payout
Organic Net Revenue Growth (%)
Operating Profit beia Growth (%)
Free Operating Cash Flow (€ m)
Individual leadership measures
Total
35 %
15 %
25 %
25 %
100 %
9.0 %
5.0 %
2,300
-
12.0 %
7.5 %
2,400
-
15.0 %
12.5 %
2,700
-
5.5 %
1.7 %
1,759
-
0 %
0 %
0 %
75 %
19 %
The Individual leadership measures were a mix of quantitative and qualitative measures tied to the achievement
of our EverGreen strategy. They included Organic Net Profit beia Growth (weight: 10%), Fixed cost as a
percentage of revenue (weight: 3.75%), Embedding a cost-conscious culture (weight: 3.75%) and Accelerating
the EverGreen Strategic Plan delivery (weight: 7.5%). Although performance on Organic Net Profit beia Growth
was below expectations, significant advances were made in Cost management and Accelerating the EverGreen
Strategic Plan delivery, as described in other parts of this Annual Report. The combined outcome for the
Individual leadership measures was 75%.
The resulting STI payout for 2023 is 19% of the target opportunity for both members of the Executive Board.
In line with policy, 25% of the STI payout is paid out in investment shares against the closing share price of 14
February 2024, the publication date of the full year results. In addition, the Executive Board members had the
opportunity to indicate before the end of the 2023 performance year whether they wished to receive up to
another 25% of their STI payout in additional investment shares. For 2023, both Executive Board members
elected to receive an additional 25% investment shares beyond the mandatory 25% share investment.
The investment shares are restricted for sale for five calendar years, after which they are matched 1:1 by
matching shares. Revision and clawback provisions apply to the Short-term incentive, including the related
matching share entitlement. The table below provides an overview of the investment shares at year-end that
were awarded as part of STI payouts in the past, and that have remained blocked and await 1:1 matching
by the Company, provided the conditions thereto are met. Only when the holding period of the investment
shares has been completed will the matching share entitlements be converted into shares and transferred to
the recipient.
Van den Brink
STI
payout
for
2023
2022
2021
% of STI
payout
invested
in shares
No. of
investment
shares
awarded
Value of
investment shares
as of the award
date in €
End of
blocking
period
Value of
investment shares
as of 31.12.20231
in €
Award
date
50 % 14.02.2024
t.b.d.
ca. 172,900 31.12.2028
n/a
50 % 15.02.2023
15,674
1,469,908 31.12.2027
1,441,068
50 % 16.02.2022
16,327
1,583,719 31.12.2026
1,501,104
Van den Broek
2023
50 % 14.02.2024
t.b.d.
ca. 83,980 31.12.2028
2022
2021
50 % 15.02.2023
7,613
713,947 31.12.2027
50 % 16.02.2022
4,626
448,722 31.12.2026
n/a
699,939
425,314
1 The closing share price on 29 December 2023 was €91.94.
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ad (3) – 2021-2023 Long-term incentive: Number of performance shares vesting
The 2021-2023 Long-term incentive (LTI) relates to the performance period 2021-2023 and vests shortly after
14 February 2024, the publication date of the full year 2023 results. The target LTI opportunities at grant were
150% of base salary for the CEO and 125% of base salary for the CFO.
The vesting of the LTI award for performance period 2021-2023 was subject to company performance on four
financial measures with equal weight. The following table shows the performance targets and intervals, as well
as the actual achievements as determined by the Supervisory Board for each of these measures:
As a result, the vesting of the LTI grant for performance period 2021-2023 will be equal to 198% of the vesting
at target level. For the CEO, this performance implies that 40,699 shares will vest shortly after 14 February 2024,
as a result of the 20,555 conditional performance shares granted to him in 2021 as CEO and Member of the
Executive Board. For the CFO, this performance implies that 19,860 shares will vest as a result of the 10,030
conditional performance shares granted to him in 2021 as CFO and Member of the Executive Board.The
resulting share awards are defined in before-tax terms (i.e., before the deduction of withholding tax due).
Revision and clawback provisions apply to this award.
Performance Measure
Weight
Threshold
Target Maximum Achievement
Vesting
Organic Net Revenue Growth (%)
25 %
4.0 %
7.0 %
10.0 %
13.0 %
200 %
Organic Operating Profit beia
Growth (%)
EPS beia Growth (%)
Free Operating Cash Flow (€ m)
Total
25 %
25 %
25 %
100 %
10.0 %
20.0 %
4,900
17.0 %
27.0 %
5,400
24.0 %
34.0 %
5,800
23.2 %
36.8 %
6,682
189 %
200 %
200 %
198 %
The table below provides an overview of outstanding LTI awards (awards granted but not yet vested, or awards vested but still blocked) as of 31 December 2023.
Van den Brink
Van den Broek
Grant
date
2023
2022
2021
2020
2023
2022
2021
No. of shares
conditionally
granted at
target level1
22,190
18,967
20,555
12,144
12,574
10,748
10,030
Value of shares
conditionally
granted in €
1,950,057
1,875,078
1,875,027
1,021,310
1,105,003
1,062,547
914,937
Vesting
date2
02.2026
02.2025
14.02.2024
15.02.2023
02.2026
02.2025
No. of shares
vesting on the
vesting date3
(before tax)
No. of shares
vesting on the
vesting date4
(after tax)
t.b.d.
t.b.d.
40,699
22,588
t.b.d.
t.b.d.
t.b.d.
t.b.d.
21,623
12,000
t.b.d.
t.b.d.
10,551
14.02.2024
19,860
Value of
unvested or
blocked shares
as of 31.12.20235
in €
1,083,881
926,479
1,988,019
1,103,280
614,159
524,977
970,059
End of
blocking period
16.02.2028
17.02.2027
15.02.2026
14.02.2025
16.02.2028
17.02.2027
15.06.2026
1 Determined according to plan rules, using the closing share price on 31 December of the year preceding the grant date.
2 The vesting date is shortly after the publication of the financial statements after completion of the performance period.
3 Vested shares are disclosed in before-tax terms (i.e., before deduction of withholding tax due).
4 Vested shares are disclosed in after-tax terms (i.e., after deduction of withholding tax due).
5 The value for the grants in 2021 is based on the actual number of shares vesting on the vesting date after tax withholding, i.e., after applying the relevant income tax rate, whereas the value for the grants in 2022 and 2023 is based on the number of performance shares conditionally granted at target level (since the
number of performance shares vesting is yet unknown) after applying the currently prevailing income tax rate. The closing share price on 29 December 2023 was €91.94.
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ad (4) – 2021-2023 Long-term incentive: Value of performance shares vesting
The value of performance shares vesting is based on the closing share price on 31 December 2023 of €91.94.
ad (5) – Matching entitlements: Number of matching entitlements vesting
These entries refer to the number of matching share entitlements that vested after year-end 2023, as a result
of the investment in shares of part of the STI payout for performance year 2018 and the holding of these
investment shares until year-end 2023. Since neither Mr. Van den Brink nor Mr. Van den Broek were part of
Executive board in 2018, no matching shares entitlements vested after year-end 2023.
ad (6) – Matching entitlements: Value of matching entitlements vesting
The value of matching share entitlements vesting is based on the closing share price on 31 December 2023
of €91.94. Since neither Mr. Van den Brink nor Mr. Van den Broek were part of Executive board in 2018, no
matching shares entitlements vested after year-end 2023.
ad (7) – Pension cost
The pension costs involve the employer contributions paid in the Capital Creation Plan as well as the employer
contributions to the risk insurances for death and disability.
ad (8) – Extraordinary Share Grants: Number of extraordinary shares vesting
The table below provides an overview of Extraordinary Share grants as of 31 December 2023.
As compensation for lost long-term incentive remuneration that Mr. Van den Broek held with his previous
employer, an Extraordinary Share Award of 39,466 shares of Heineken N.V. (gross) was granted as of the
moment of his appointment as CFO and member of the Executive Board by the 2021 annual general meeting.
This is a time-vested conditional grant, of which 6,578 shares vested on 1 June 2021, 13,155 shares vested on
1 June 2022, and 13,155 shares vested on 1 June 2023. The remainder of the award will vest on 1 March 2024.
In line with the retention requisite of best practice provision 3.1.2 of the Dutch Corporate Governance Code,
Mr. Van den Broek has an obligation to retain and hold the shares for a period of five years from the date of the
award. This holding period will continue to apply in respect of vested shares after termination of the Assignment
Agreement for whatever reason.
Van den Broek
Extraordinary share award
Award
Extraordinary share award
Extraordinary share award
Extraordinary share award
Grant date
01.06.2021
01.06.2021
01.06.2021
01.06.2021
No. of the shares
granted1
Value of shares
conditionally granted as
of the grant date in €
6,578
13,155
13,155
6,578
642,144
1,284,191
1,284,191
642,144
Vesting date
01.06.2021
01.06.2022
01.06.2023
01.03.2024
No. of shares vesting on
the vesting date2
End of blocking period
3,321
6,643
6,643
t.b.d.
01.06.2026
01.06.2026
01.06.2026
01.06.2026
Value of unvested or
blocked shares as of
31.12.2023
in €3
305,333
610,757
610,757
305,333
1 The ‘Number of shares granted’ refers to the grant in before-tax terms (i.e., before tax withholding).
2 Vested shares are disclosed in after-tax terms (i.e., after deduction of withholding tax due).
3 The closing share price on 31 December 2023 was €91.94.
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Board
Report
of the
Supervisory
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Financial
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Sustainability
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Review
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Information
Remuneration Report 2023
ad (9) – Extraordinary Share Grants: Value of shares vesting
The value of the share awards is based on the ‘No. of shares vesting’ against the closing share price on
31 December 2023 of €91.94.
ad (10) – Other emoluments
The amounts primarily concern car benefits-in-kind.
ad (11) – Total
The sum of all remuneration elements as described in points (1) to (10).
Actual remuneration paid to former members of the Executive Board
Mr. Van Boxmeer stepped down as CEO and Chairman of the Executive Board of Heineken on 1 June 2020.
Mrs. Debroux stepped down as CFO and member of the Executive Board of Heineken on 30 April 2021.
In line with contractual obligations, Mr. Van Boxmeer’s and Mrs. Debroux’s existing investment shares/share
matching entitlements are subject to a holding period of 5 years. As a result of the investment in shares of part
of the STI payout for the performance year 2018, the following number of matching shares will vest shortly
after year-end 2023.
No. of matching entitlements vesting1
Value of matching entitlements vesting in €2
Pay Ratio
In 2023, the ratio between the CEO’s annual total remuneration and the average annual total remuneration for
HEINEKEN employees was 83. For the CFO, this ratio was 62. These ratios were calculated by dividing the 2023
total remuneration for the CEO and CFO by the 2023 average total remuneration of all other employees
worldwide. As per the revised Dutch Corporate Governance Code, the average total remuneration of all other
employees worldwide is derived from note 6.4 on page 87 by dividing the 2023 total personnel expense (after
subtracting the expense for the Executive Board and external contractors), by the reported FTE (minus two,
and excluding external contractors), leading to an amount of 46,476 (versus 45,276 in 2022). The total
remuneration for the CEO and CFO is retrieved from note 13.3 on page 122.
In accordance with the Dutch Corporate Governance Code, the Supervisory Board takes into account the
internal pay ratios as one factor to determine the appropriateness of the implementation of the remuneration
policy. However, pay ratios are affected by various factors such as a company's industry, geographical reach,
and organisational structure. HEINEKEN has a wide geographical footprint, with the majority of its business
and employees in emerging markets where pay levels and structures differ widely from those in the Netherlands
and Europe. The company also has a large number of breweries and in-house sales forces across the world, which
further adds to the diversity of pay within the organization. This will differ for other companies in other industries.
Therefore, external comparison of pay ratios will not always be meaningful.
van Boxmeer
Debroux
7,913
3,323
1 The ‘number of matching entitlements vesting’ are before-tax (i.e. before tax withholding).
2 The share price on 31 December 2023 was €91.94.
727,521
305,517
Moreover, pay ratios can also be highly variable over time due to factors such as fluctuations in exchange rates, and
are heavily influenced by the Company's annual performance, which impacts the Executive Board's remuneration
more significantly than it does for all other employees. To address these limitations, the Supervisory Board evaluates
not only the actual pay ratios but also their evolution, particularly in relation to the Company's performance.
The pay ratios for the Executive Board significantly decreased in comparison to 2022, primarily due to the low
payout of the 2023 Short-term incentive. This outcome is in line with the organization's commitment to paying the
Executive Board based on performance.
Comparative overview of remuneration and company performance
The following table provides a comparative overview since 2019 of annual Executive Board remuneration,
average employee remuneration, Executive Board pay ratio, and company performance:
Total remuneration in
thousands of €1
CEO
3,879
8,944
8,437
1,261
7,112
CFO
2,902
5,794
4,228
835
3,726
Average employee
total remuneration in
thousands of €2
46.5
45.3
40.8
41.9
42.9
Year
2023
2022
2021
2020
2019
Pay ratio3
CEO
83
198
207
30
166
Organic net
revenue growth
%4
5.5 %
21.2%
12.2%
(11.9) %
5.6%
CFO
62
128
104
20
87
1 Total remuneration for the CEO and CFO as per note 13.3 Related Parties (i.e., fixed salary, short-term and long-term incentives, pension contributions and
other emoluments).
2 Total personnel expense in thousands of € (after subtracting the expense for the Executive Board and external contractor) divided by the reported FTE
(minus two).
3 Total remuneration for the CEO and CFO divided by the average total remuneration of all other employees worldwide.
4 Organic net revenue growth percentage for the financial year (performance measure for Short-term and Long-term incentives).
Remuneration Report 2023
Part IV – The Supervisory Board actual remuneration for performance ending in, or at year-end, 2023
In accordance with the Supervisory Board remuneration policy, the Members of the Supervisory Board receive a fixed remuneration for their services. Members are also compensated for intercontinental travel required to exercise
their role. The following table provides an overview of the Supervisory Board actual remuneration for year-end, 2023. In alignment with IFRS reporting requirements, this disclosure can also be found in note 13.3 Related Parties.
In thousands of €
2023 Base Board Fee 2023 Committee Fees 2023 Allowances and Benefits 2023 Total Remuneration
2022 Total Remuneration
2021 Total Remuneration 2020 Total Remuneration
2019 Total Remuneration
120
105
90
90
90
90
90
90
63
63
45
23
23
—
—
—
—
40
45
30
50
35
24
10
14
10
10
5
—
—
—
—
877
378
6
—
6
24
6
23
5
18
6
—
—
—
—
—
—
—
94
231
130
141
144
146
148
119
91
83
55
33
28
—
—
—
—
225
130
135
144
133
148
110
—
—
110
166
100
55
—
—
—
225
130
135
126
125
125
78
—
—
110
142
—
122
45
—
—
225
130
135
126
125
110
—
—
—
115
154
—
116
105
—
—
195
133
141
151
131
97
—
—
—
100
153
—
133
110
103
53
1,349
1,456
1,363
1,341
1,500
J.M. Huët
M. Das
M.R. de Carvalho
P. Mars-Wright
M. Helmes
R.L. Ripley
N.K. Paranjpe1
B. Pardo2
L.J. Hijmans van den Bergh2
I.H. Arnold3
J.A. Fernández Carbajal4
F.J. Camacho Beltran4
J.G. Astaburuaga Sanjinés5
V.C.O.B.J. Navarre6
G.J. Wijers7
Y. Dervisoglu7
1 Appointed on 22 April 2021.
2 Appointed on 20 April 2023.
3 Stepped down on 20 April 2023.
4 Stepped down on 15 February 2023.
5 Stepped down on 21 April 2022.
6 Stepped down on 22 April 2021.
7 Stepped down on 25 April 2019.
72
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
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of the
Supervisory
Board
Financial
Statements
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Review
Other
Information
73
Heineken
N.V.
Annual
Report
2023
Remuneration Report 2023
Part V – Adjustments to the remuneration policy and implementation in 2024
Policy
Executive Board
The current Executive Board remuneration policy was adopted by the AGM in 2022. During 2023, the
Remuneration Committee reviewed the Executive Board remuneration policy and actively engaged with
shareholders and other stakeholders to obtain their perspectives on the subject. Based on their findings, the
Supervisory Board decided not to submit any changes to the policy for approval to the 2024 AGM.
Supervisory Board
The current Supervisory Board remuneration policy was adopted by the AGM in 2020. Under the European
Shareholder Rights Directive II, shareholders have the right to vote on a remuneration policy at least every 4
years. Because the Supervisory Board still considers the current policy effective, they will not be proposing any
changes to the policy. Therefore, the unaltered policy will be submitted to the 2024 AGM for re-adoption.
Implementation
Executive Board
To seek alignment with the policy target level of the median target remuneration of the labour market peer
group, the Supervisory Board will make adjustments to the base salaries and variable remuneration of the
Executive Board in 2024. Base salaries will be increased from €1,300,000 to €1,397,500 for the CEO and from
€884,000 to €950,300 for the CFO. Target opportunities for the Short-term incentive and Long-term incentive
for the CEO will be increased from 140% to 150% and from 150% to 170%, respectively. Target opportunities for
the Short-term incentive and Long-term incentive for the CFO will be increased from 100% to 110% and from
125% to 135%, respectively.
Supervisory Board
The prevailing fixed annual remuneration and Committee fees of the Supervisory Board were adopted at the
2019 AGM and have not changed since. Recognizing the increased complexity and time commitment
associated with board membership, the Remuneration Committee conducted an assessment of the Supervisory
Board remuneration. As part of this assessment, the Remuneration Committee performed a benchmark analysis
of the current fees against a pan-European group of companies of comparable size and complexity. Based on
the outcomes of this assessment, the Supervisory Board, upon recommendation of the Remuneration
Committee, will submit a proposal to the 2024 AGM to adjust the fixed annual remuneration, Committee fees,
and intercontinental travel fee of the Supervisory Board.
Supervisory Board Heineken N.V.
Amsterdam, 13 February 2024
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
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Other
Information
74
Contents
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Financial Statements
Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
1. Reporting entity
2. Basis of preparation
3. Significant events in the period and accounting estimates and judgements
4. Changes in accounting policies
5. General accounting policies
6. Operating activities
6.1. Operating segments
6.2. Other income
6.3. Raw materials, consumables and services
6.4. Personnel expenses
6.5. Share-based payments
6.6. Amortisation, depreciation and impairments
6.7. Earnings per share
7. Working capital
7.1. Inventories
7.2. Trade and other receivables
7.3. Trade and other payables
7.4. Returnable packaging materials
Sustainability
Review
8. Non-current assets
8.1. Intangible assets
8.2. Property, plant and equipment
8.3. Loans and advances to customers
Other
Information
8.4. Equity instruments
8.5. Other non-current assets
9. Provisions and contingent liabilities
9.1. Post-retirement obligations
9.2. Provisions
9.3. Contingencies
74-131
75
75
76
77
78
78
79
79
79
80
80
82
82
86
86
87
87
89
89
89
89
90
91
91
92
92
95
98
99
99
100
100
104
105
10. Acquisitions, disposals and investments
10.1. Acquisitions and disposals of subsidiaries and non-controlling interests
10.2. Assets or disposal groups classified as held for sale
10.3. Investments in associates and joint ventures
11. Financing and capital structure
11.1. Net finance income and expense
11.2. Cash and cash equivalents
11.3. Borrowings
11.4. Capital and reserves
11.5. Credit, liquidity and market risk
11.6. Derivative financial instruments
12. Tax
12.1. Income tax expense
12.2. Deferred tax assets and liabilities
12.3. Income tax on other comprehensive income and equity
13. Other
13.1. Fair value
13.2. Off-balance sheet commitments
13.3. Related parties
13.4. HEINEKEN entities
13.5. Subsequent events
Heineken N.V. Income Statement
Heineken N.V. Balance Sheet
Heineken N.V. Shareholders’ Equity
Notes to the Heineken N.V. Financial Statements
A. Company disclosures
A.1. Investments
A.2. Borrowings
B. Other
B.1. Auditor fees
B.2. Off-balance sheet commitments
B.3. Subsequent events
B.4. Other disclosures
105
105
107
107
109
109
109
110
111
113
116
117
117
118
120
121
121
122
122
124
124
125
126
127
128
128
128
130
130
130
131
131
131
75
Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December
For the year ended 31 December
Heineken
N.V.
Annual
Report
2023
In millions of €
Revenue
Excise tax expense
Net revenue
Other income
Raw materials, consumables and services
Personnel expenses
Amortisation, depreciation and impairments
Total other expenses
Operating profit
Interest income
Interest expenses
Other net finance income/(expenses)
Net finance expenses
Share of profit of associates and joint ventures
Profit before income tax
Income tax expense
Profit
Attributable to:
Shareholders of the Company (net profit)
Non-controlling interests
Profit
Weighted average number of shares – basic
Weighted average number of shares – diluted
Basic earnings per share (€)
Diluted earnings per share (€)
Introduction
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Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Note
2023
2022
In millions of €
6.1
6.1
6.1
6.2
6.3
6.4
6.6
11.1
11.1
11.1
10.3
12.1
36,375
(6,013)
30,362
393
34,676
Profit
(5,957)
Other comprehensive income, net of tax:
28,719
Items that will not be reclassified to profit or loss:
147
Remeasurement of post-retirement obligations
(20,077)
(18,618)
Net change in fair value through OCI investments
(4,353)
(3,096)
(4,079)
Items that may be subsequently reclassified to profit or loss:
(1,886)
Currency translation differences
(27,526)
(24,583)
Change in fair value of net investment hedges
3,229
4,283
Change in fair value of cash flow hedges
90
(640)
(375)
(925)
218
2,522
(121)
2,401
2,304
97
2,401
74
Cash flow hedges reclassified to profit or loss
Net change in fair value through OCI investments - debt
investments
Cost of hedging
Share of other comprehensive income of associates/joint ventures
Other comprehensive income, net of tax
Total comprehensive income
Attributable to:
Shareholders of the Company
Non-controlling interests
Total comprehensive income
(458)
48
(336)
223
4,170
(1,131)
3,039
2,682
357
3,039
Note
2023
2,401
2022
3,039
12.3
12.3
5(b)/12.3
12.3
12.3
12.3
12.3
11.6/12.3
10.3/12.3
12.3
(66)
—
(170)
(28)
(135)
12
1
2
(75)
(459)
63
15
437
(62)
(142)
38
—
(1)
(46)
302
1,942
3,341
2,032
(90)
1,942
3,039
302
3,341
6.7 563,448,845 575,563,505
6.7 563,979,620 576,026,120
6.7
6.7
4.09
4.09
4.66
4.65
76
Consolidated Statement of Financial Position
Heineken
N.V.
Annual
Report
2023
As at 31 December
In millions of €
Intangible assets
Property, plant and equipment
Investments in associates and joint ventures
Loans and advances to customers
Deferred tax assets
Equity instruments
Other non-current assets
Total non-current assets
Inventories
Trade and other receivables
Current tax assets
Derivative assets
Cash and cash equivalents
Assets classified as held for sale
Total current assets
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Total assets
Other
Information
Note
8.1
8.2
10.3
8.3
12.2
8.4
8.5
7.1
7.2
11.6
11.2
10.2
2023
21,781
14,772
4,130
239
1,292
562
978
2022
In millions of €
21,408
Shareholders' equity
13,623
Non-controlling interests
4,296
Total equity
216
618
145
Borrowings
Post-retirement obligations
1,085
Provisions
43,754
41,391
Deferred tax liabilities
3,721
5,019
196
58
2,377
28
Other non-current liabilities
Total non-current liabilities
Borrowings
Trade and other payables
3,250
4,531
84
70
2,765
Returnable packaging deposits
315
Provisions
11,399
11,015
Current tax liabilities
Derivative liabilities
Liabilities associated with assets classified as held for sale
Note
11.4
11.4
11.3
9.1
9.2
12.2
11.6
11.2/11.3
7.3
7.4
9.2
11.6
10.2
2023
20,056
2,733
22,789
2022
19,551
2,369
21,920
14,046
12,893
586
627
2,213
67
568
572
2,138
125
17,539
16,296
4,192
9,432
531
206
332
132
—
3,484
9,283
545
226
352
119
181
Total current liabilities
14,825
14,190
55,153
52,406
Total equity and liabilities
55,153
52,406
77
Consolidated Statement of Cash Flows
For the year ended 31 December
Heineken
N.V.
Annual
Report
2023
In millions of €
Operating activities
Profit
Adjustments for:
Note
2023
2022
In millions of €
Note
2023
2022
Investing activities
2,401
3,039
Proceeds from sale of property, plant and equipment and
intangible assets
154
112
1,886
Purchase of property, plant and equipment
(2,434)
(1,791)
Amortisation, depreciation and impairments
Net interest expenses
Other income
Share of profit of associates and joint ventures and dividend income
on fair value through OCI investments
Income tax expenses
Other non-cash items
6.6
11.1
6.2
12.1
3,096
550
(352)
(226)
121
537
384
Purchase of intangible assets
(147)
(230)
Loans issued to customers and other investments
Repayment on loans to customers and other investments
Cash flow used in operational investing activities
1,131
Free operating cash flow
284
Acquisition of subsidiaries, net of cash acquired
Cash flow from operations before changes in working capital
and provisions
6,127
6,347
Acquisition of/additions to associates, joint ventures and other
investments
Change in inventories
Change in trade and other receivables
Change in trade and other payables and returnable packaging deposits
Total change in working capital
Change in provisions and post-retirement obligations
Cash flow from operations
Interest paid
Interest received
Dividends received
Income taxes paid
Cash flow related to interest, dividend and income tax
Cash flow from operating activities
(4)
(42)
(100)
(146)
(32)
5,949
(624)
118
147
(1,160)
(1,519)
4,430
(793)
Disposal of subsidiaries, net of cash disposed of
(668)
Disposal of associates, joint ventures and other investments
981
Cash flow used in acquisitions and disposals
(480)
Cash flow used in investing activities
(207)
Financing activities
5,660
Proceeds from borrowings
(439)
Repayment of borrowings
46
177
Payment of lease commitments
Dividends paid
(948)
Purchase own shares and shares issued
(1,164)
Acquisition of non-controlling interests
4,496
Cash flow used in financing activities
Net cash flow
Cash and cash equivalents as at 1 January
Effect of movements in exchange rates
Cash and cash equivalents as at 31 December
11.2
(243)
(244)
96
(2,671)
1,759
(806)
(409)
257
53
(905)
(3,576)
6,751
(4,614)
(390)
(1,335)
(942)
(286)
(816)
38
1,618
(231)
1,425
(220)
(219)
31
(2,087)
2,409
(171)
(45)
9
8
(199)
(2,286)
644
(1,934)
(304)
(1,099)
(43)
(391)
(3,127)
(917)
2,556
(21)
1,618
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Consolidated Statement of Changes in Equity
Heineken
N.V.
Annual
Report
2023
In millions of €
Balance as at 1 January 2022
Hyperinflation restatement to 1 January 2022
5(c)
—
—
—
Balance as at 1 January 2022 after restatement
Profit
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Realised hedge results from non-financial assets
Transfer to/from retained earnings
12.3
12.3
Introduction
Dividends to shareholders
Purchase own shares or contributions received from NCI shareholders
11.4
Own shares delivered
Share-based payments
Acquisition/disposal of non-controlling interests without losing control
Hyperinflation impact
Changes in consolidation
Balance as at 31 December 2022
Note
Share
capital
Share
premium
Translation
reserve
Hedging
reserve
Cost of
hedging
reserve
Fair value
reserve
Other legal
reserves
Reserve for
own shares
Retained
earnings
Shareholders
of the
Company
Non-
controlling
interests Total equity
922
2,701
(4,003)
922
2,701
(4,003)
—
—
—
—
—
384
56
—
56
—
(103)
—
—
384
(103)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(8)
—
(8)
—
(1)
(1)
—
—
—
—
—
—
—
—
—
56
1,128
(37) 16,541
17,356
2,344 19,700
—
—
—
245
245
—
245
56
1,128
(37) 16,786
17,601
2,344 19,945
—
14
208
—
—
—
2,474
63
2,682
357
357
3,039
(55)
302
14
208
—
2,537
3,039
302
3,341
—
—
—
—
—
—
—
—
—
—
(94)
—
—
—
—
—
—
—
—
—
—
(43)
20
—
—
—
—
—
94
—
—
—
—
—
—
(840)
(840)
(263)
(1,103)
—
(20)
49
(43)
—
49
—
—
—
(43)
—
49
(373)
(373)
(18)
(391)
116
2
116
2
—
4
116
6
922
2,701
(3,619)
(47)
(9)
70
1,242
(60) 18,351
19,551
2,369 21,920
In millions of €
Balance as at 1 January 2023
Hyperinflation restatement to 1 January 20231
Note
Share
capital
Share
premium
Translation
reserve
Hedging
reserve
922
2,701
(3,619)
(47)
5(c)
—
—
—
—
Balance as at 1 January 2023 after restatement
922
2,701
(3,619)
(47)
Profit
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Realised hedge results from non-financial assets
Transfer to/from retained earnings
Dividends to shareholders
12.3
12.3
Purchase own shares or contributions received from NCI shareholders
11.4
Own shares delivered
Share-based payments
Acquisition/disposal of non-controlling interests without losing control
Hyperinflation impact
Changes in consolidation
Balance as at 31 December 2023
1 Includes impairment related to the hyperinflationary impact on the opening balance
—
—
—
—
—
—
—
(86)
(86)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(123)
(123)
156
—
—
—
—
—
—
—
—
Cost of
hedging
reserve
(9)
—
(9)
—
2
Fair value
reserve
Other legal
reserves
Reserve for
own shares
Retained
earnings
Shareholders
of the
Company
Non-
controlling
interests
Total
equity
70
1,242
(60) 18,351
19,551
2,369 21,920
—
—
—
40
40
—
40
70
1,242
(60) 18,391
19,591
2,369 21,960
—
1
204
—
—
—
2,100
2,304
97
2,401
(66)
(272)
(187)
(459)
2
1
204
—
2,034
2,032
(90)
1,942
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
534
—
—
—
—
—
—
—
—
—
—
(943)
37
—
—
—
—
—
(534)
156
—
—
—
156
—
(1,080)
(1,080)
(270)
(1,350)
—
(37)
2
(943)
—
2
1
—
—
(942)
—
2
(214)
(214)
(9)
(223)
163
349
163
349
—
732
163
1,081
922
2,701
(3,705)
(14)
(7)
71
1,980
(966) 19,074
20,056
2,733 22,789
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Heineken
N.V.
Annual
Report
2023
Notes to the Consolidated Financial Statements
1. Reporting entity
Heineken N.V. (the ‘Company’) is a public company domiciled in the Netherlands, with its head office in
Amsterdam. The address of the Company’s registered office is Tweede Weteringplantsoen 21, 1017 ZD,
Amsterdam. The consolidated financial statements of the Company as at 31 December 2023 comprise the
Company, its subsidiaries (together referred to as ‘HEINEKEN’) and HEINEKEN’s interests in joint ventures and
associates. The Company is registered in the Trade Register of Amsterdam No. 33011433. HEINEKEN is primarily
involved in the brewing and selling of beer and cider. Led by the Heineken® brand, HEINEKEN has a range of more
than 350 international, regional, local and speciality beers and ciders.
2. Basis of preparation
The consolidated financial statements are:
– Prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European
Union (EU) and comply with the financial reporting requirements included in Part 9 of Book 2 of the Dutch Civil
Code. All standards and interpretations issued by the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) effective year-end 2023 have been adopted
by the EU.
– Prepared by the Executive Board of the Company and authorised for issue on 13 February 2024 and will be
submitted for adoption to the Annual General Meeting of Shareholders on 25 April 2024.
– Prepared on the historical cost basis unless otherwise indicated.
– Prepared on a going concern basis.
– Presented in Euro, which is the Company’s functional currency.
– Rounded to the nearest million unless stated otherwise.
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3. Significant events in the period and accounting estimates and judgements
(a) Significant events in the current reporting period
Trading conditions remained challenging throughout 2023 and were marked by increased input and energy
costs and cost inflation. Despite continued volatility and challenges across many markets, HEINEKEN reported a
net profit of €2,304 million for the year ended 31 December 2023 (2022: €2,682 million).
During the first half-year of 2023, HEINEKEN purchased own shares and Heineken Holding N.V. shares from
Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA). For more information refer to note 13.3 ‘Related parties’.
In April 2023, HEINEKEN obtained control of Namibia Breweries Limited (NBL) and Distell Group Holdings
Limited (Distell). Following the annual goodwill impairment test an impairment loss of €491 million was
recognised for Heineken Beverages, which is the combined business of Distell and NBL with Heineken South
Africa. For more information, refer to note 8.1 ‘Intangible assets’ and 10.1 ‘Acquisitions and disposals of
subsidiaries and non-controlling interests’.
On 24 August 2023, HEINEKEN sold 100% of the Russia disposal group classified as held for sale. For more
information refer to note 10.2 ‘Assets or disposal groups classified as held for sale’.
HEINEKEN applied hyperinflation accounting for its operations in Haiti and Ethiopia. In 2023, the three-year
cumulative inflation in Haiti exceeded 100% and as a result, hyperinflation accounting was applied for the first
time for the year ended 31 December 2023. For more information refer to note 5(c) ‘Hyperinflation economies’.
During its financial reporting process, HEINEKEN has assessed the impact of its main risks including exposure to
increased input costs and energy prices and the macroeconomic environment on its estimates and judgements.
The impact on financial estimates and judgements is mainly reflected in impairment of financial and non-
financial assets, and other financial instrument disclosures (including credit management). All significant
estimates and judgements are disclosed in the notes to the consolidated financial statements (if applicable).
Notes containing the most significant estimates and judgements are referred to in note 3(c).
(b) Climate change
In preparing the consolidated financial statements, HEINEKEN has considered climate change, including climate
change scenarios and the Brew a Better World (BaBW) ambitions, on the estimates and judgements used in
preparing the consolidated financial statements.
The following impacts were assessed in the consolidated financial statements:
– The impact of climate change on the residual values and useful lives of assets were considered in determining the
carrying value of non-current assets (refer to note 8.1 and 8.2).
– The impact of climate change was considered in relation to the recognition and measurement of provisions and
contingencies (refer to note 9.2 and 9.3).
– The impact of climate change was considered in relation to indications of impairment and the forecast of cash flows
used in the impairment assessments of non-current assets including goodwill (refer to note 8.1 and 8.2).
For the year ended 31 December 2023, no material impact on financial reporting judgement and estimates
arising from climate change was identified. As a result the valuations of assets or liabilities have not been
significantly impacted by climate change risks.
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Notes to the Consolidated Financial Statements
(c) Significant accounting estimates and judgement
In preparing these consolidated financial statements, management is required to make estimates and
judgements that affect the application of accounting policies and the reported amounts of assets and liabilities,
income and expenses.
The application of accounting policies requires judgements that impact the amounts recognised. Additionally,
amounts recognised are based on factors that are by default associated with uncertainty. Actual results may
therefore differ from estimates. Where applicable, the estimates and judgements are described per note within
the consolidated financial statements.
The following notes contain the most significant estimates and judgements:
Particular area involving significant estimates and judgements
Note
Significant judgement
Introduction
Judgement on acting as principal versus agent with respect to
excise tax expense
6.1 Operating segments
Judgement used in the identification of acquired assets and
liabilities
10.1 Acquisitions and disposals of
subsidiaries and non-controlling interests
Assessment of the recoverability of past tax losses
12.2 Deferred tax assets and liabilities
Significant estimates
Assumptions used in impairment testing
Assumptions for discount rates, future pension increases and life
expectancy to calculate the defined benefit obligation
Estimating the likelihood and timing of potential cash flows relating
to claims and litigations
Assumptions used in the valuation of acquired assets and liabilities
8.1 Intangible assets and 8.2 Property, plant
and equipment
9.1 Post-retirement obligations
9.2 Provisions and 9.3 Contingencies
10.1 Acquisitions and disposals of
subsidiaries and non-controlling interests
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(a) Changed accounting policies in 2023
The following accounting policy changes have been adopted in 2023 and are reflected in the consolidated
financial statements:
Other
Information
Amendment to IAS 12 - International tax reform - pillar two model rules
The amendments to IAS 12 issued in May 2023 offer temporary relief from accounting for deferred taxes
arising from the Organisation for Economic Co-operation and Development’s (OECD) international tax. Refer to
note 12.1 ‘Income tax expense’.
IFRS 17 - Insurance contracts
HEINEKEN has implemented IFRS 17 ‘Insurance contracts’, replacing the existing guidance on insurance
contracts in IFRS 4 ‘Insurance contracts’.
Neither the above amendments, nor any other new standards or amendments to existing standards effective in
2023, had a significant impact on HEINEKEN's consolidated financial statements.
(b) Upcoming changes in accounting policies for 2024
Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements
The amendments to IAS 7 and IFRS 7 introduce new disclosure requirements with regard to supplier finance
arrangements, relating to the effect on liabilities, cash flows and the exposure to liquidity risk. The amendments
apply for annual periods beginning or after 1 January 2024. HEINEKEN has not applied the amendments in
preparing the 2023 consolidated financial statements.
HEINEKEN has supplier finance arrangements in place, to which the disclosure requirements will apply.
HEINEKEN is in the process of obtaining the information needed to meet the new disclosure requirements.
Other than mentioned above, no new standards or amendments to existing standards, effective in 2024, will
have a significant impact on HEINEKEN 's consolidated financial statements.
5. General accounting policies
General
The accounting policies described in these consolidated financial statements have been applied consistently to
all periods presented in these consolidated financial statements.
(a) Basis of consolidation
The consolidated financial statements are prepared as a consolidation of the financial statements of the
Company and its subsidiaries. Subsidiaries are entities controlled by HEINEKEN. HEINEKEN controls an entity
when it has power over the investee, is exposed or has the right to variable returns from its involvement with that
entity and can affect those returns through its power over the entity. Control is generally obtained by ownership
of more than 50% of the voting rights.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by HEINEKEN.
On consolidation, intra-HEINEKEN balances and transactions, and any unrealised gains and losses or income and
expenses arising from intra-HEINEKEN transactions, are eliminated. Unrealised gains arising from transactions
with associates and joint ventures (refer to note 10.3) are eliminated against the investment to the extent of
HEINEKEN’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but
only to the extent that there is no evidence of impairment.
(b) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of HEINEKEN entities
using the exchange rates at the transaction date, except for HEINEKEN entities in hyperinflationary economies,
refer to note 5(c). Receivables, payables and other monetary assets and liabilities denominated in foreign
currencies are re-translated to the functional currency using the exchange rates at the balance sheet date. The
resulting foreign currency differences are recognised in the income statement, except for foreign currency
differences arising on re-translation of Fair Value through Other Comprehensive Income (FVOCI) investments
and financial liabilities designated as a hedge of a net investment, which are recognised in other comprehensive
income.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are re-
translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-
monetary items in a foreign currency that are measured at cost are translated into the functional currency at the
exchange rate at the transaction date.
The application of IAS 29 includes the following:
– Adjustment of historical cost non-monetary assets and liabilities for the change in purchasing power caused by
inflation from the date of initial recognition to the balance sheet date
– Adjustment of the income statement for inflation during the reporting period
– The income statement is translated at the period-end foreign exchange rate instead of an average rate
– A net monetary gain/(loss) adjustment, recognised in the income statement, to reflect the impact of inflation and
exchange rate movement on holding monetary assets and liabilities in local currency
– Reduction of the restated amount of a non-monetary item, in accordance with the appropriate standards, when
it exceeds its recoverable amount
(d) Cash flow statement
The cash flow statement is prepared using the indirect method. Assets and liabilities acquired as part of a
business combination are included in investing activities (net of cash acquired). Dividends paid to shareholders
are included in financing activities. Dividends received are classified as operating activities, as well as interest
paid.
(e) Offsetting financial instruments
If HEINEKEN has a legal right to offset financial assets with financial liabilities and if HEINEKEN intends to either
to settle on a net basis or to realise the asset and settle the liability simultaneously, financial assets and liabilities
are presented in the statement of financial position as a net amount.
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Notes to the Consolidated Financial Statements
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,
and of intercompany loans with a permanent nature (quasi-equity) are translated to Euro at the exchange rates at
the reporting date. The income and expenses of foreign operations are translated to Euro at the exchange rates
that approximates the exchange rates ruling at the dates of the transactions, except for foreign operations in
hyperinflationary economies.
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%
0.3
(2.0)
(7.4)
10.4
(31.8)
3.5
Foreign currency differences are recognised in other comprehensive income and are presented within equity in
the translation reserve. However, if the operation is not a wholly-owned subsidiary, the relevant proportionate
share of the translation difference is allocated to the non-controlling interests. The cumulative amount in the
translation reserve is (either fully or partly) reclassified to the income statement upon disposal (either fully or
partly) or liquidation.
Exchange rates of key currencies
The following exchange rates, for the most important countries in which HEINEKEN has operations, were used
while preparing these consolidated financial statements:
In €
Year-end
2023
Year-end
2022
Average
2023
Average
2022
%
Brazilian Real (BRL)
0.1865 0.1774
5.1 0.1852 0.1846
Great Britain Pound (GBP)
1.1507 1.1275
2.1 1.1497 1.1735
Indian Rupee (INR)
Mexican Peso (MXN)
Nigerian Naira (NGN)
Polish Zloty (PLN)
Russian Ruble (RUB)
0.0109 0.0113
(3.5) 0.0112 0.0121
0.0532 0.0485
9.7 0.0521 0.0472
0.0010 0.0020
(50.0) 0.0015 0.0022
0.2300 0.2132
7.9 0.2203 0.2129
0.0100 0.0126
(20.6) 0.0109 0.0139
(21.6)
Singapore Dollar (SGD)
0.6854 0.6993
(2.0) 0.6886 0.6897
United States Dollar (USD)
0.9050 0.9376
(3.5) 0.9246 0.9518
Vietnamese Dong in 1,000 (VND)
0.0373 0.0396
(5.8) 0.0388 0.0407
(0.2)
(2.9)
(4.7)
South African Rand (ZAR)
0.0492 0.0553
(11.0) 0.0502 0.0582
(13.7)
(c) Hyperinflation economies
To determine the existence of hyperinflation, HEINEKEN assesses the qualitative and quantitative characteristics
of the economic environment of the country, such as the cumulative inflation rate over the previous three years.
The Ethiopian economy was designated as hyperinflationary from the period ended 31 December 2022 and the
Haitian economy was designated as hyperinflationary for the period ended 31 December 2023. As a result,
application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ has been applied to Heineken
Ethiopia, whose functional currency is the Ethiopian Birr and to Brasserie Nationale d'Haiti S.A., whose functional
currency is the Haitian Gourde.
On the application of IAS 29 to Heineken Ethiopia, a cumulative inflation factor was applied using the consumer
price index (CPI) in Ethiopia, published by the Central Statistics Agency of Ethiopia. The movement in the CPI for
the year ended 31 December 2023 was 29% (2022: 34%).
On the application of IAS 29 to Brasserie Nationale d’Haiti S.A., a cumulative inflation factor was applied using
the consumer price index (CPI) in Haiti, published by the L'Institut Haïtien de Statistique et d'Informatique (IHSI).
The movement in the CPI for the year ended 31 December 2023 was 21% (2022: 48%).
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In millions of €
Net revenue (beia)1
Third party revenue2
Interregional revenue
Revenue
Excise tax expense3
Net revenue
Other income
Operating profit
Notes to the Consolidated Financial Statements
6. Operating activities
6.1 Operating segments
HEINEKEN distinguishes five reportable segments: Europe; Americas; Africa, Middle East & Eastern Europe; Asia Pacific and Head Office & Other/Eliminations. Information about these reportable segments are provided in
the table below:
Europe
Americas
Africa, Middle East &
Eastern Europe
Asia Pacific
Head Office &
Other/Eliminations
Consolidated
Note
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
12,211
11,362
10,469
9,421
4,229
4,005
4,157
4,652
(758)
(746)
30,308
28,694
14,185
13,461
10,700
9,608
5,260
4,868
6,179
6,706
803
761
5
18
—
—
—
—
14,988
14,222
10,705
9,626
5,260
4,868
6,179
6,706
51
(808)
(757)
33
36,375
34,676
(779)
—
—
(746)
36,375
34,676
(2,777)
(2,860)
(211)
(205)
(1,002)
(838)
(2,023)
(2,054)
—
—
(6,013)
(5,957)
12,211
11,362
10,494
9,421
4,258
4,030
4,156
4,652
(757)
(746)
30,362
28,719
6.2
302
117
53
9
36
20
2
—
—
1
393
147
Net finance expenses
Share of profit of associates and joint ventures
Income tax expense
Profit
Attributable to:
Shareholders of the Company (net profit)
Non-controlling interests
11.1
10.3
12.1
1,439
1,154
1,382
1,359
(487)
391
737
1,293
158
86
3,229
4,283
22
19
69
61
25
36
102
107
—
—
218
223
(925)
(336)
(121)
(1,131)
2,401
3,039
2,304
97
2,682
357
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Operating profit reconciliation
Operating profit
Eia1
Operating profit (beia)1
Other
Information
1,439
1,154
(86)
67
1,382
149
1,359
32
1,353
1,221
1,531
1,391
(487)
937
450
391
163
737
189
1,293
(58)
158
25
86
15
3,229
1,214
4,283
219
554
926
1,235
183
101
4,443
4,502
1 Note that this is a non-GAAP measure. Due to rounding, this balance will not always cast.
2 Includes other revenue of €509 million (2022: €342 million).
3 Next to the €6,013 million of excise tax expense included in revenue (2022: €5,957 million), €2,190 million of excise tax expense is collected on behalf of third parties and excluded from revenue (2022: €2,333 million).
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In millions of €
Current segment assets
Non-current segment assets
Investments in associates and joint ventures
Total segment assets
Unallocated assets
Total assets
Segment liabilities
Introduction
Unallocated liabilities
Europe
Americas
Africa, Middle East &
Eastern Europe
Asia Pacific
Head Office &
Other/Eliminations
Note
2023
2,917
2022
3,259
12,494
12,311
200
181
2023
3,292
9,430
794
2022
2,837
8,887
861
2023
2,341
3,772
227
2022
1,842
2,615
266
2023
1,798
2022
2,091
2023
687
2022
848
11,003
11,566
1,582
1,025
2,909
2,988
—
—
Consolidated
2023
2022
11,035
38,281
4,130
10,877
36,404
4,296
15,611
15,751
13,516
12,585
6,340
4,723
15,710
16,645
2,269
1,873
53,446
51,577
1,707
829
55,153
52,406
4,292
4,475
3,640
3,211
2,008
1,791
1,373
1,534
2,324
2,424
13,637
13,435
Total equity
Total equity and liabilities
Purchases of owned property, plant and equipment
Acquisition of goodwill
Purchases of intangible assets
Depreciation of owned property, plant and equipment
Impairment (net of reversal) of owned property, plant
and equipment and assets classified as held for sale
Amortisation of intangible assets
Impairment (net of reversal) of intangible assets
8.2
8.1
8.1
8.2
784
11
60
653
106
75
778
—
41
748
—
33
496
652
7
516
—
4
176
21
10
184
3
11
(541)
(514)
(459)
(349)
(288)
(269)
(165)
(165)
8.2, 10.2
8.1
8.1
(7)
(94)
—
(7)
(89)
(1)
(70)
(98)
(41)
(1)
(102)
(60)
(24)
—
(491)
(89)
(9)
—
—
36
(188)
(205)
—
190
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18,727
22,789
17,051
21,920
55,153
52,406
2,255
2,119
684
241
109
220
18
—
97
(13)
(1,464)
(1,310)
—
(40)
—
(137)
(448)
(532)
(61)
(445)
189
21
—
123
(11)
—
(44)
—
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Notes to the Consolidated Financial Statements
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.
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
2023
4,443
(385)
(829)
218
(925)
2,522
2022
4,502
(333)
114
223
(336)
4,170
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.
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.
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.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment and intangible assets other than goodwill.
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).
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.
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.
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.
Excise tax expense
Local tax authorities impose multiple taxes, duties and fees. These include excise on the sale or production of
alcoholic beverages, environmental taxes on the use of certain raw materials or packaging materials, or the
energy consumption in the production process. Excise duties are common in the beverage industry but levied
differently amongst the countries HEINEKEN operates in. HEINEKEN performs a country by country analysis to
assess whether the excise duty is sales-related or effectively a production tax. In most countries, excise duties are
effectively a production tax as excise duties become payable when goods are moved from bonded warehouses
and are not based on the sales value. In these countries, increases in excise duties are not always (fully) passed
on to customers and HEINEKEN cannot, or can only partly, reclaim the excise duty in the case products are
eventually not sold to customers. Excise tax is borne by HEINEKEN for these countries and shown as expenses.
Only for those countries where excise is levied at the moment of the sales transaction and excise is based on the
sales value, the excise duties are collected on behalf of a tax authority and consequently deducted from revenue.
Due to the complexity and variety in tax legislation, significant judgement is applied in the assessment of
whether taxes are borne by HEINEKEN or collected on behalf of a third party.
To provide transparency on the impact of the accounting for excise, HEINEKEN presents the excise tax expense
on a separate line below revenue in the consolidated income statement. A subtotal called 'Net revenue' is
therefore included in the Income Statement. This 'Net revenue' subtotal is 'revenue' as defined in IFRS 15
(after discounts) minus the excise tax expense for those countries where the excise is borne by HEINEKEN.
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Notes to the Consolidated Financial Statements
Revenue
The majority of HEINEKEN's revenue is generated by the sale and delivery of products to customers. The product
range of HEINEKEN mainly consists of beer, soft drinks and cider. Products are mostly own-produced finished
goods from HEINEKEN's brewing activities, but also contain purchased goods for resale from HEINEKEN's
wholesale activities. HEINEKEN's customer group can be split between on-trade customers like cafés, bars and
restaurants and off-trade customers like retailers and wholesalers. Due to HEINEKEN's global footprint, its
revenue is exposed to strategic and financial risks that differ per region.
Revenue is recognised when control over products has been transferred and HEINEKEN fulfilled its performance
obligation to the customer. For the majority of the sales, control is transferred either at delivery of the products
or upon pickup by the customer from HEINEKEN's premises.
Revenue is recognised based on the price specified in the contract, net of returns, discounts, sales taxes and
excise taxes collected on behalf of third parties.
Other revenues include rental income from pubs and bars, royalties, income from wholesale activities, pub
management services and technical services to third parties. Royalties are sales-based and recognised in profit or
loss (consolidated income statement) on an accrual basis in accordance with the relevant agreement. Rental
income, income from wholesale activities, pub management services and technical services are recognised in
profit or loss when the services have been delivered.
Discounts
HEINEKEN uses different types of discounts depending on the nature of the customer. Some discounts
are unconditional, like cash discounts, early payment discounts and temporary promotional discounts.
Unconditional discounts are recognised at the same moment of the related sales transaction.
HEINEKEN also provides conditional discounts to customers. These contractually agreed conditions include
volume and promotional rebates. Conditional discounts are recognised based on estimated target realisation.
The estimation is based on accumulated experience supported by historical and current sales information. A
discount accrual is recognised at each reporting date for discounts payable to customers based on their expected
or actual volume up to that date.
Other discounts include listing and shelving visibility fees charged by the customer whereby the payments to
customers are closely related to the volumes sold. HEINEKEN assesses the substance of contracts with customers
to determine the classification of payments to customers as either discounts or marketing expenses.
Discounts are accounted for as a reduction of revenue. Only when these payments to customers relate to a
distinct service, the amount is classified as operating expense.
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Notes to the Consolidated Financial Statements
6.2 Other income
Other income includes the gain on sale from transactions that do not arise from contracts with customers and
are therefore presented separately from revenue.
In millions of €
Gain on sale of property, plant and equipment
Gain on sale of intangible assets
Gain on sale of subsidiaries, joint ventures and associates
Gain on previously held equity-interests
Tax credits
2023
47
86
196
23
41
2022
46
10
15
76
—
393
147
Introduction
In 2023, other income mainly relates to a gain on sale of Vrumona B.V. (Vrumona) of €195 million (refer to note
10.1).
6.3 Raw materials, consumables and services
In millions of €
Raw materials
Non-returnable packaging
Goods for resale
Inventory movements
Marketing and selling expenses
Transport expenses
Energy and water
Repair and maintenance
Other expenses
2023
3,097
6,114
1,997
—
2,767
1,891
968
622
2,621
20,077
2022
2,843
5,624
1,766
5
2,692
1,922
834
585
2,347
18,618
Accounting policies
The increase in raw materials, consumables and services is mainly driven by inflation in commodity prices related
to raw materials and non-returnable packaging.
Other income is recognised in profit or loss when control over the sold asset is transferred to the buyer. The
amount recognised as other income equals the proceeds obtained from the buyer minus the carrying value of
the sold asset.
The line 'Energy and water' contains costs related to Power Purchase Agreements (PPA). As part of its Brew a
Better World (BaBW) ambitions, HEINEKEN enters into either physical PPAs or virtual PPAs. These arrangements
are usually entered into for periods up to 10 to 15 years and contain either fixed prices or variable prices.
As part of a step acquisition, any previously held equity interest in the acquiree is remeasured to fair value on the
date of the acquisition. The difference between the carrying value and the fair value of the previously held
equity interest is recognised in other income.
Other expenses in raw materials, consumables and services mainly include consulting expenses of €339 million
(2022: €321 million), telecom and office automation of €319 million (2022: €300 million), warehousing
expenses of €235 million (2022: €245 million), travel expenses of €121 million (2022: €113 million), other taxes
of €197 million (2022: €124 million), short-term lease expenses of €110 million (2022: €86 million) and low-
value lease expenses of €42 million (2022: €32 million).
Accounting policies
Expenses are recognised based on accrual accounting. This means that expenses are recognised when the
product is received or the service is provided regardless of when cash outflow takes place. Costs related to power
purchase agreements are included as part of 'Energy and water' if the own use exemption can be applied. If not,
power purchase agreements are considered to be derivative financial instruments, refer to note 11.6.
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Notes to the Consolidated Financial Statements
6.4 Personnel expenses
The average number of full-time equivalent (FTE) employees, excluding contractors, in 2023 was 89,732 (2022:
86,390). FTE, excluding contractors, is divided per region as follows:
The increase in Africa, Middle East & Eastern Europe is mainly attributable to the acquisition of Distell Group
Holdings Limited (Distell) and Namibia Breweries Limited (NBL). Refer to note 10.1.
A total of 4,715 FTEs are based in the Netherlands (2022: 4,089 FTE).
HEINEKEN’s employees receive compensations such as salaries and wages, pensions (refer to note 9.1) and
share-based payments (refer to note 6.5). Other personnel expenses include expenses for contractors of
€176 million (2022: €153 million) and net restructuring costs of €94 million (2022: €53 million). Refer to note
9.2 for the restructuring provisions.
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In millions of €
Wages and salaries
Compulsory social security contributions
Contributions to defined contribution plans
Expenses related to defined benefit plans
Expenses related to other long-term employee benefits
Equity-settled share-based payment plan
Other personnel expenses
Note
9.1
6.5
2023
2,950
443
60
76
8
31
785
4,353
2022
2,757
412
57
115
5
57
676
4,079
Accounting policies
Personnel expenses
Personnel expenses are recognised when the related service is provided. For more details on accounting policies
related to post-retirements obligations and share-based payments refer to notes 9.1 and 6.5 respectively.
6.5 Share-based payments
HEINEKEN has the following share-based compensation plans: long-term incentive plan, extraordinary share
plan and matching share plan (as part of the Short-term incentive plan of the Executive Board).
Long-term incentive plan (LTIP)
HEINEKEN has a performance-based LTIP for the Executive Board and senior management. Under this LTIP,
share rights are conditionally awarded to participants on an annual basis. The vesting of these rights is subject to
the performance of Heineken N.V. on specific internal performance conditions and continued service over a
three-calendar year period by the employee. The share rights are not dividend-bearing during the performance
period.
During 2022, combined ESG-related performance measures, with equal weighting, were included in the LTIP.
The performance conditions for LTIP 2022-2024 and 2023-2025 are organic net revenue growth, earnings per
share beia growth, free operating cash flow and combined ESG-related measures. The performance conditions
for 2021-2023, are organic net revenue growth, organic operating profit beia growth, earnings per share beia
growth and free operating cash flow. The performance conditions are equally weighted.
At target performance, 100% of the awarded share rights vest. At threshold performance, 50% of the awarded
share rights vest and at maximum performance, 200% of the awarded share rights vest.
Number of FTEAverage number of FTE per region28,36235,14214,33411,89427,42735,55211,84211,56920232022EuropeAmericasAfrica, Middle East & Eastern EuropeAsia Pacific
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2022-2024
grant date
FMV €93.81
performance period
vesting date
Total expense recognised in personnel expenses
6.4
31
Notes to the Consolidated Financial Statements
The grant date, fair market value (FMV) at the grant date, service period and vesting date for the LTIP are
visualised below:
LTI Plan
2020
2021
2022
2023
2024
2025
2021-2023
grant date
FMV €87.03
performance period
vesting date
Personnel expenses
The total share-based compensation expense that is recognised in 2023 amounts to €31 million (2022: €57
million share-based compensation expense).
Note
2023
2022
In millions of €
Share rights granted in 2020
Share rights granted in 2021
Share rights granted in 2022
Share rights granted in 2023
—
20
4
7
19
18
20
—
57
Accounting estimates
The grant date fair value is calculated by adjusting the share price at the grant date for estimated foregone
dividends during the performance period, as the participants are not entitled to receive dividends during that
period. The foregone dividends are estimated by applying HEINEKEN's dividend policy on the latest forecasts of
net profit (beia).
At each balance sheet date, HEINEKEN uses its latest forecasts to calculate the expected realisation on the
performance targets per plan. The number of shares is adjusted to the new target realisation and HEINEKEN
increases/decreases the total plan cost. The cumulative effect is recorded in the profit or loss, with a
corresponding adjustment to equity.
Expenses related to employees that voluntarily leave HEINEKEN are reversed as they will not receive any shares
from the LTIP. The expense calculation includes the estimated future forfeiture. HEINEKEN uses historical
information to estimate this forfeiture rate.
2023-2025
grant date
FMV €82.06
performance period
Total LTIP expenses
recognised in 2023
The number of outstanding share rights and the movement over the year under the LTIP of the Executive Board
and senior management is as follows:
Number of share
rights 2023
Number of share
rights 2022
2,163,618
1,821,369
539,901
431,038
(122,526)
(115,887)
Outstanding as at 1 January
Granted during the year
Forfeited during the year
Cancelled during the year
Vested previous year
Performance adjustment
Sustainability
Review
Outstanding as at 31 December
Share price as at 31 December
—
87
Accounting policies
(639,523)
(284,183)
(561,999)
311,194
1,379,471
2,163,618
91.94
87.88
HEINEKEN's share-based compensation plans are equity-settled share rights granted to the Executive Board and
senior management.
The grant date fair value is calculated by deducting expected foregone dividends from the grant date during the
performance period share price. The costs of the share plans are adjusted for expected performance and
forfeiture and spread evenly over the service period.
Other
Information
At vesting, HEINEKEN deducts a number of shares to cover payroll taxes and mandatory withholdings on behalf
of the individual employees. Therefore, the number of Heineken N.V. shares to be received by LTIP participants is
a net (after-tax) number. Ownership of the vested LTIP 2021-2023 shares will transfer to the Executive Board
members shortly after the publication of the annual results of 2023 and to senior management on 1 April 2024.
Other share-based compensation plans
In 2023, under the Extraordinary share plans for senior management, 13,900 shares were granted (2022: 500)
and 23,805 (gross) shares vested (2022: 32,505). These extraordinary grants only have a service condition and
vest between one and five years. The expenses relating to these additional grants are recognised in profit or loss
during the vesting period. In 2023, expenses amounted to €1 million (2022: €2 million).
Matching shares granted to the Executive Board are disclosed in note 13.3.
Share-based compensation expenses are recorded in the profit or loss, with a corresponding adjustment to
equity.
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Notes to the Consolidated Financial Statements
6.6 Amortisation, depreciation and impairments
In millions of €
Property, plant and equipment
Intangible assets
Assets classified as held for sale
Other
Note
8.2
8.1
10.2
2023
1,896
980
220
—
2022
1,537
256
88
5
HEINEKEN entered into a cross-holding agreement with Heineken Holding N.V., which includes a waiver by
HEINEKEN of payment of any dividends on the Heineken Holding N.V. shares held by HEINEKEN as well as
by Heineken Holding N.V. on an equivalent number of HEINEKEN shares held by Heineken Holding N.V.
The HEINEKEN shares for which dividend is waived by Heineken Holding N.V. are therefore not part of the
number of outstanding ordinary shares of HEINEKEN. The shares were acquired during 2023, refer to note 13.3
'Related parties'.
3,096
1,886
Accounting policies
Property, plant and equipment include depreciation and impairment of right of use (ROU) assets of €304 million
(2022: €254 million).
Assets classified as held for sale mainly include a loss of €219 million relating to the disposal of the Russia
disposal group classified as held for sale. The loss includes the recycling of foreign currency translation reserve of
€209 million and a net impairment of €10 million (2022: €88 million) of the same disposal group. The net
impairment consists of €113 million impairment during the first half-year of 2023 and an impairment reversal of
€103 million during the second half-year of 2023, following the commitment by the buyer to repay the historical
intercompany debt.
For more information on impairment losses, refer to note 8.2.
Accounting policies
Refer to note 8.1 for the accounting policy on impairments and amortisation, and to note 8.2 for the policy on
depreciation.
6.7 Earnings per share
The calculation of earnings per share (EPS) for the period ended 31 December 2023 is based on the profit
attributable to the shareholders of the Company (net profit) and the weighted average number of shares
outstanding (basic and diluted) during the year ended 31 December 2023.
In € per share (basic or diluted) for the period ended 31 December
Sustainability
Review
Basic earnings per share
Diluted earnings per share
2023
4.09
4.09
2022
4.66
4.65
Refer to the table below for the information used in the calculation of the basic and diluted earnings per share.
Other
Information
Weighted average number of shares – basic and diluted
Total number of shares issued
Effect of own shares held
Shares for which dividend is waived by Heineken Holding N.V.
2023
2022
576,002,613 576,002,613
(8,489,088)
(439,108)
(4,064,680)
—
Weighted average number of basic shares outstanding for the year
563,448,845 575,563,505
Dilutive effect of share-based payment plan obligations
530,775
462,616
Weighted average number of diluted shares outstanding for the year
563,979,620 576,026,120
HEINEKEN presents basic and diluted earnings per share (EPS) data for its shares. Basic EPS is calculated by
dividing the profit or loss attributable to shareholders of the Company by the weighted average number of
shares outstanding during the year, adjusted for the weighted average number of own shares held in the year.
Diluted EPS is determined by dividing the profit or loss attributable to shareholders by the weighted average
number of shares outstanding, adjusted for the weighted average number of own shares held in the year and for
the effects of all dilutive potential shares which comprise share rights granted to employees and the Executive
Board. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS.
7. Working capital
7.1 Inventories
Inventories include raw and packaging materials, work in progress, spare parts, goods for resale and finished
products.
In millions of €
Raw materials
Work in progress
Finished products
Goods for resale
Non-returnable packaging
Other inventories and spare parts
2023
815
493
765
481
472
695
2022
619
364
598
530
548
591
3,721
3,250
In 2023, the inventories written down to net realisable value was €11 million (2022: €9 million, release).
Accounting policies
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on a
weighted average cost and includes expenditure incurred in acquiring the inventories, production or conversion
costs and other costs incurred in bringing them to their existing location and condition. Cost of inventories are
generally updated on annual basis except if a structural change is identified during the period such as the impact
of inflationary pressure on input costs.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
Notes to the Consolidated Financial Statements
7.2 Trade and other receivables
Trade and other receivables arise during ordinary activities, mainly relating to the sale and delivery of products to
customers.
In millions of €
Trade receivables
Other receivables
Trade receivables due from associates and joint ventures
Prepayments
2023
3,368
1,111
8
532
2022
3,104
926
16
485
5,019
4,531
In millions of €
Balance as at 1 January
Changes in consolidation
Addition to allowance
Allowance used
Allowance released
Other
Effect of movements in exchange rates
Balance as at 31 December
Trade and other receivables contain a net impairment loss of €36 million (2022: €38 million) from contracts with
customers, which is included in expenses for raw materials, consumables and services.
The ageing of trade and other receivables (excluding prepayments) as at 31 December 2023 is as follows:
Accounting estimates
2023
488
14
51
(42)
(15)
(1)
(7)
488
2022
454
44
50
(47)
(12)
(5)
4
488
In millions of €
Gross
Allowance
In millions of €
Gross
Allowance
2023
Total
4,975
(488)
4,487
2022
Total
4,534
(488)
4,046
Past due
Not past due
0-30 days
31-120 days
> 120 days
3,824
(123)
3,701
390
(27)
363
235
(44)
191
526
(294)
232
Past due
Not past due
0-30 days
31-120 days
> 120 days
3,378
(100)
3,278
442
(24)
418
259
(49)
210
455
(315)
140
The movement in allowance for credit losses for trade and other receivables during the year is as follows:
HEINEKEN determines on each reporting date the impairment of trade and other receivables using a model (e.g.
flow rate method) which estimates the lifetime expected credit losses that will be incurred on these receivables.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics. Due to the macro-economic
environment and uncertainties including increasing inflationary pressure on HEINEKEN’s customers, judgement
is required in the calculation of expected credit losses. As part of these assessments, HEINEKEN has incorporated
all reasonable and supportable information available such as whether there has been a breach of payment
terms or deterioration of payment against payment terms, a request for extended payment terms or a request
for waived payment terms. For more information on HEINEKEN's credit risk exposure refer to note 11.5.
Accounting policies
Trade and other receivables are held by HEINEKEN to collect the related cash flows. These receivables are
measured at fair value and subsequently at amortised cost minus any impairment losses. Trade and other
receivables are derecognised by HEINEKEN when substantially all risks and rewards are transferred or if
HEINEKEN does not retain control over the receivables.
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In millions of €Allowance for credit losses 2023 - Trade and other receivables4881451(42)(15)(1)(7)488Balance as at 1 JanuaryChanges in consolidationAddition to allowanceAllowance usedAllowance releasedOtherEffect of movements in exchange ratesBalance as at 31 December05001,000
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Notes to the Consolidated Financial Statements
7.3 Trade and other payables
In the ordinary course of business, payable positions arise towards suppliers of goods and services, as well as to
other parties. Refer to the table below for the different types of trade and other payables.
In millions of €
Trade payables
Accruals
Taxation and social security contributions
Interest
Dividends
Other payables
2023
5,735
1,728
1,420
216
13
320
2022
5,852
1,802
1,103
172
25
329
7.4 Returnable packaging materials
HEINEKEN uses returnable packaging materials such as glass bottles, crates and kegs in selling the finished
products to the customer.
Returnable packaging materials
The majority of returnable packaging materials are classified as property, plant and equipment. The category
'Other fixed assets' in property, plant and equipment (refer to note 8.2) includes €1,103 million (2022: €1,018
million) of returnable packaging materials.
Returnable packaging deposit liability
In certain markets, HEINEKEN has the legal or constructive obligation to take back the materials from the
market. A deposit value is generally charged upon the sale of the finished product, which is reimbursed when the
empty returnable packaging material is returned.
9,432
9,283
In millions of €
Returnable packaging deposits
2023
531
2022
545
Accounting estimates
HEINEKEN makes estimates in the determination of discount accruals. When discounts are provided to customers,
these reduce the transaction price and consequently the revenue. The conditional discounts in revenue (refer to note
6.1) are estimated based on accumulated experience supported by historical and current sales information.
Expected sales volumes are determined taking into account (historical) sales patterns and other relevant
information. A discount accrual is recognised for expected volume and discounts due to customers in relation to sales
made until the end of the reporting period.
Accounting policies
Trade and other payables are initially measured at fair value and subsequently at amortised cost. Trade
payables are derecognised when the contractual obligation is either discharged, cancelled or expired.
Accounting estimates
The main accounting estimate relating to returnable packaging materials is determining the returnable
packaging materials in the market and the expected return thereof. This is based on circulation times and losses
of returnable packaging materials in the market.
Accounting policies
Returnable packaging materials
Returnable packaging materials may be classified as property, plant and equipment or inventory. The
classification mainly depends on whether ownership is transferred and if HEINEKEN has the legal or constructive
obligation to buy back the materials.
Refer to note 8.2 for the general accounting policy on property, plant and equipment. Specifically for returnable
packaging materials, the estimated useful life depends on the loss of the materials in the market as well as on
HEINEKEN's sites.
Returnable packaging deposit liability
HEINEKEN recognises a deposit liability when a legal or constructive obligation exists to reimburse the customer
for returnable packaging materials that are returned. The returnable packaging deposit liability is based on the
estimated returnable packaging materials in the market, the expected return thereof and the deposit value.
In light of increasing inflationary pressures and HEINEKEN’s BaBW ambitions, the deposit value for a number of
returnable packaging materials were increased. In the event the deposit value is increased, the relating liability is
remeasured through profit and loss taking into account the returnable packaging materials which are already in the
market.
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Notes to the Consolidated Financial Statements
8. Non-current assets
8.1 Intangible assets
Intangible assets within HEINEKEN are mainly goodwill, brands and customer-related intangibles such as customer lists. The majority of intangible assets have been recognised by HEINEKEN as part of acquisitions. Refer to the
table below for the historical cost per asset class and the movements during the year including amortisation.
Transfer (to)/from assets classified as held for sale
10.2
(50)
In millions of €
Cost
Balance as at 1 January
Hyperinflation restatement to 1 January
Introduction
Changes in consolidation
Purchased/internally developed
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Disposals
Hyperinflation adjustment
Effect of movements in exchange rates
Balance as at 31 December
Amortisation and impairment losses
Balance as at 1 January
Hyperinflation restatement to 1 January
Changes in consolidation
Amortisation charge for the year
Impairment losses1
Reversals of impairments
Transfer to/(from) assets classified as held for sale
Disposals
Hyperinflation adjustment
Effect of movements in exchange rates
Balance as at 31 December
Carrying amount
As at 1 January
As at 31 December
1 Includes impairment recorded in opening equity.
Note
Goodwill
Brands
Customer-
related
intangibles
Contract-
based
intangibles
Software,
research and
development
and other
Total
Goodwill
Brands
2023
Customer-
related
intangibles
Contract-
based
intangibles
Software,
research and
development
and other
2022
Total
12,718
8,942
2,302
1,068
1,364
26,394
12,278
8,712
2,172
1,033
1,185
25,380
10.1
51
684
1
11
784
—
(5)
—
6
—
44
(190)
(182)
—
32
1
—
(340)
—
(15)
—
—
13
—
—
—
(18)
1
11
226
(6)
(39)
2
3
63
1,511
241
(61)
(379)
52
108
109
—
—
—
49
(402)
174
7
229
—
(17)
(2)
3
10
—
10
5
—
—
—
115
—
—
7
—
(1)
—
29
1
(3)
208
(21)
(22)
1
15
116
345
220
(38)
(25)
53
343
13,258
9,556
1,980
1,063
1,562
27,419
12,718
8,942
2,302
1,068
1,364
26,394
(468)
(1,782)
(1,536)
(400)
(800)
(4,986)
(468)
(1,708)
(1,352)
(385)
(705)
(4,618)
6.6
6.6
6.6
10.2
—
7
—
(559)
—
—
—
—
—
(4)
—
(216)
(41)
—
3
—
(4)
13
—
—
—
—
(1)
—
(94)
(10)
(128)
—
—
—
339
—
(8)
—
—
—
—
—
18
(1)
—
5
32
(2)
(1)
(5)
7
(448)
(601)
—
8
371
(6)
22
—
—
—
—
—
—
—
—
—
(3)
—
—
—
(201)
(118)
—
173
18
2
(2)
(61)
—
16
—
—
—
—
—
(12)
(1)
—
—
1
—
—
—
(3)
—
(114)
(445)
—
1
13
15
(1)
(9)
(1)
190
31
18
(3)
(155)
(82)
(3)
(1,020)
(2,031)
(1,299)
(392)
(896)
(5,638)
(468)
(1,782)
(1,536)
(400)
(800)
(4,986)
12,250
7,160
12,238
7,525
766
681
668
671
564
21,408
11,810
7,004
666
21,781
12,250
7,160
820
766
648
668
480
20,762
564
21,408
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Notes to the Consolidated Financial Statements
Goodwill impairment testing
For impairment testing, goodwill in respect of Europe, Americas (excluding Brazil) and Asia Pacific (excluding
India) is allocated and monitored on a regional basis. For Brazil, India, Heineken Beverages and other subsidiaries
within Africa, Middle East & Eastern Europe and Head Office, goodwill is allocated and monitored on an
individual or combined country basis. The total amount of goodwill of €12,238 million (2022: €12,250 million) is
allocated to each (group of) Cash Generating Unit (CGU) as follows:
– Cash flows after the first 10-year period (Europe 5-year) are extrapolated using a perpetual growth rate equal to
the expected 30-year average inflation to calculate the terminal recoverable amount. For Europe, a return on
inflation-linked bond rates is used to extrapolate cash flows.
– A CGU-specific pre-tax weighted average cost of capital (WACC) was applied per CGU in determining the
recoverable amount of the units.
The values assigned to the key assumptions used for the VIU calculations are as follows:
Introduction
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Information
In the current year, Distell and NBL have been combined with Heineken South Africa into a new HEINEKEN business
‘Heineken Beverages’ (refer to note 10.1), which is considered the CGU for goodwill impairment testing purposes.
The net decrease in goodwill of €12 million compared to 2022 mainly relates to an impairment loss of €491
million for Heineken Beverages, a negative movement in exchange rates of €190 million, partially offset by the
initial goodwill of €656 million recognised for Heineken Beverages (refer to note 10.1).
The carrying amount of a CGU is compared to the recoverable amount of the CGU. The recoverable amounts of
the (group of) CGUs are based on the higher of the fair value less costs of disposal (FVLCD) and value in use (VIU)
calculations. CGUs for which the recoverable amount is based on a VIU model represent 95% of goodwill. VIU is
determined by discounting the future cash flows generated from the continuing use of the CGU using a pre-tax
discount rate.
The key assumptions used for the value in use calculations are as follows:
– Cash flows are projected based on actual operating results and the approved business plan. Cash flows thereafter
are extrapolated up to a 10-year period (Europe 5-year) using an expected annual volume growth rate per
country, which is based on external sources. The extrapolated cash flows are therefore projected using steady or
progressively declining net cash flow growth rates. Based on past experience, management considers this period
to reflect the long-term development of the local beer business.
– The beer price growth per year, after the forecast period, is assumed to be the expected country-specific
annual long-term inflation, which is based on external sources.
In %
Europe
Americas (excluding Brazil)
Brazil
Africa, Middle East and Eastern Europe (excluding Heineken
Beverages)
Heineken Beverages
Asia Pacific (excluding India)
Head Office
Expected annual
long-term
inflation
applied for years
2027-2033
Expected volume
growth rates
applied for years
2027-2033
2.0
2.9
3.2
1.2
1.9
2.5
Pre-tax
WACC
9.8
9.5
15.5
21.1 - 29.0
6.2 - 9.0
1.6 - 4.4
16.3
15.5
13.3
4.9
3.4
3.4
1.9
3.8
2.4
In 2023, there has been a general decrease in the WACC applied across most CGUs, due to decreased interest rates.
Impairment losses
The annual goodwill impairment test resulted in an impairment loss of €491 million (2022: nil) for the current
year. The goodwill impairment relates to Heineken Beverages, which is included in the Africa, Middle East &
Eastern Europe operating segment.
The impairment for Heineken Beverages is recorded on the line 'amortisation, depreciation and impairments'
in the income statement. The lower current valuation of the business, relative to the time of the announced
acquisition, reflects predominantly the increase in the weighted average cost of capital over this time period
used for impairment testing. In addition, inflationary pressures and higher brand support levels to address a
more challenging competitive environment impacted the valuation.
The determination of the recoverable amount of Heineken Beverages is based on a VIU valuation and amounts
to €2.6 billion, which is based on a discounted 10-year cash flow forecast. The key assumptions used to
determine the cash flows are based on market expectations and management's best estimate. Cash flows
thereafter are extrapolated using a perpetual growth rate equal to the expected 30-year compounded average
inflation, to calculate the terminal recoverable amount.
In millions of €Goodwill per (group of) CGU4,9192,2984813451972,9106084804,9052,337457419—3,01963348020232022EuropeAmericas(excluding Brazil)BrazilAfrica, Middle East & Eastern Europe(excluding Heineken Beverages)Heineken BeveragesAsia Pacific (excluding India)IndiaHead Office05,00010,000 94
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Notes to the Consolidated Financial Statements
See the table below for the key assumptions:
Heineken Beverages
Accounting policies
Pre-tax WACC (in local currency)
Expected annual long-term inflation
Expected volume growth
In %
2024-2026
2027-2033
16.3
4.9
9.1
16.3
4.9
1.9
In addition, the asset impairment test required as a result of the identification of impairment indicators resulted
in an impairment of €68 million on goodwill and €42 million on intangible assets other than goodwill (2022:
€189 million net impairment reversal on intangible assets other than goodwill) (refer to note 8.2).
Sensitivity to changes in assumptions
Following the goodwill impairment recognised for Heineken Beverages, the CGU is sensitive to changes in key
assumptions applied. HEINEKEN assesses that a reasonably possible adverse change in a key assumption
(i.e. lower growth rates or higher discount rates respectively) would cause the carrying amount to exceed the
recoverable amount. Excluding Heineken Beverages, the outcome of a sensitivity analysis of a 200 basis
points adverse change in key assumptions did not result in a materially different outcome for the goodwill
impairment test.
Brands, customer-related and contract-based intangibles
The main brands capitalised are the brands acquired in various acquisitions. The main customer-related and
contract-based intangibles relate to customer relationships (constituted either by way of a contractual
agreement or by way of non-contractual relations) and re-acquired rights.
Accounting estimates and judgements
The cash flow projections used in the VIU calculations for goodwill impairment testing contain various judgements
and estimations as described in the key assumptions for the VIU calculations. Such judgements and estimates
are subject to change because of changing economic conditions and climate impact and actual cash flows may
differ from forecasts. The below additional considerations have been applied by HEINEKEN regarding the
potential financial impact of the macro-economic environment and uncertainties including increasing
inflationary pressures worldwide:
– Changes in the interest rate environment are taken into consideration when determining the discount rates
– Terminal growth rates do not exceed the long-term annual inflation rate of the country or region, thus excluding
any increased inflation growth experiences in the short-term
– Sensitivity scenarios are applied to the key assumptions used in the impairment testing
The impact of climate change risk on future cash flows have also been considered at an CGU and asset level,
including committed capex and operational expenditure. No material financial impacts to the current year
impairment assessment were identified.
For intangible assets, other than goodwill, estimates are required to determine the (remaining) useful lives.
Useful lives are determined based on the market position (for brands), estimated remaining useful life of the
customer relationships or the period of the contractual arrangements, or estimates on technological and
commercial developments (for software/development expenditure).
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. HEINEKEN believes
that straight-line depreciation most accurately reflects the expected pattern of consumption of the future
economic benefits embodied in the intangible asset.
Goodwill
Goodwill represents the difference between the fair value of the net assets acquired and the transaction price of
the acquisition. Goodwill arising on the acquisition of associates and joint ventures is included in the carrying
amount of the associates and joint ventures.
Goodwill is measured at cost less accumulated impairment losses. Goodwill is allocated to individual or groups of
CGUs for impairment testing and is tested annually for impairment. Negative goodwill is recognised directly in
profit or loss as other income. An impairment loss in respect of goodwill cannot be reversed.
Brands, customer-related and contract-based intangibles
Brands, customer-related and contract-based intangibles acquired as part of a business combination are
recognised at fair value. Otherwise, these acquired intangibles are recognised at cost and amortised over the
estimated useful life of the individual brand, respectively over the remaining useful life of the customer
relationships or the period of the contractual arrangements.
Strategic brands are well-known international/local brands with a strong market position and an established
brand name.
Software, research and development and other intangible assets
Purchased software is measured at cost less accumulated amortisation. Expenditure on internally developed
software is capitalised when the expenditure qualifies as development activities, otherwise, it is recognised in
profit or loss when incurred.
Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge,
is recognised in profit or loss when incurred.
Amortisation
Amortisation is calculated over the cost of the asset less its residual value. Intangible assets with a finite life
are amortised on a straight-line basis over their estimated useful lives from the date they are available for use.
The estimated useful lives are as follows:
– Strategic brands
– Other brands
– Customer-related and contract-based intangibles
– Re-acquired rights
– Software
– Capitalised development costs
40–50 years
5–25 years
5–25 years
3–12 years
3–7 years
3 years
The amortisation method, useful lives and residual values are reassessed annually. Changes in useful lives or
residual value are recognised prospectively.
De-recognition of intangible assets
Intangible assets are derecognised when disposed of or sold. Gains on sale of intangible assets are presented
in profit or loss as other income (refer to note 6.2); losses on sale are included in amortisation. Goodwill is
derecognised when the related CGU is sold.
Notes to the Consolidated Financial Statements
Impairment of non-financial assets
At each reporting date, HEINEKEN reviews the carrying amounts of its non-financial assets (except for
inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount is estimated. The existence of any immediate or short-term physical
threats due to climate change were also considered in assessing for any indication of impairment. Furthermore,
HEINEKEN assesses goodwill and other intangible assets with an indefinite useful life annually for impairment.
For impairment testing, assets are grouped into the smallest group of assets that generate cash inflows from
continuing use. The CGU for other non-financial assets is often the operating company on a country level. The
recoverable amount of an asset or CGU is the higher of an asset’s FVLCD and VIU. In assessing the VIU, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and risks specific to the asset or CGU.
An impairment loss is recognised in profit or loss if the carrying amount of an asset or its CGU exceeds its
recoverable amount, except where IAS 29 requires entities that apply hyperinflation accounting for the first time to
recognise impairment related to prior periods in opening equity. Impairment losses are first allocated to goodwill
and intangible assets with an indefinite useful life. A remaining impairment loss is then allocated to the other assets
in the unit on a pro-rata basis. In respect of other assets, impairment losses recognised in prior periods are assessed
at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation if no impairment loss had been recognised.
8.2 Property, plant and equipment
Property, plant and equipment (P,P&E) are fixed assets that are owned by HEINEKEN, as well as ROU assets
under a lease agreement. Owned and ROU assets are held for use in HEINEKEN's operating activities. Refer to
the table below for the split between owned assets and ROU assets as per balance sheet date:
In millions of €
Property, plant and equipment - owned assets
Right of use assets
2023
13,732
1,040
14,772
2022
12,610
1,013
13,623
95
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Owned assets
The table below details the historical cost per asset class and the movements during the year for owned assets.
96
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In millions of €
Cost
Balance as at 1 January
Hyperinflation restatement to 1 January
Changes in consolidation and other transfers
Purchases
Transfer of completed projects under construction
Introduction
Transfer (to)/from assets classified as held for sale
Report
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Disposals
Hyperinflation adjustment
Effect of movements in exchange rates
Balance as at 31 December
Depreciation and impairment losses
Balance as at 1 January
Hyperinflation restatement to 1 January
Changes in consolidation and other transfers
Depreciation charge for the year
Impairment losses1
Reversals of impairments
Transfer to/(from) assets classified as held for sale
Disposals
Hyperinflation adjustment
Effect of movements in exchange rates
Balance as at 31 December
Carrying amount
As at 1 January
As at 31 December
1 Includes impairment recorded in opening equity.
Note
Land and
buildings
Plant and
equipment
Other
fixed assets
Under
construction
2023
Total
Land and
buildings
Plant and
equipment
Other
fixed assets
Under
construction
2022
Total
10.1
6.6
6.6
6.6
7,765
10,770
6,682
1,387
26,604
7,534
10,099
5,934
1,068
24,635
66
172
26
306
(51)
(46)
67
143
286
88
760
(108)
(110)
140
89
102
289
574
(42)
(460)
99
1
96
299
656
1,852
2,255
(1,640)
—
(8)
(11)
3
(209)
(627)
309
(22)
(383)
(313)
(104)
(822)
72
63
27
237
(163)
(49)
47
(3)
161
36
37
646
(269)
(150)
100
110
102
2
409
462
(84)
(289)
65
81
1
(2)
336
99
1,646
2,119
(1,345)
(4)
(5)
1
27
—
(520)
(493)
213
215
8,283
11,586
7,020
1,576
28,465
7,765
10,770
6,682
1,387
26,604
(2,850)
(6,352)
(4,732)
(60)
(13,994)
(2,759)
(6,048)
(4,247)
(63)
(13,117)
(12)
—
(62)
—
(80)
1
(180)
(575)
(709)
—
1
—
(154)
(14)
2
4
(57)
—
(85)
1
(1,464)
(172)
(513)
(625)
—
—
—
(156)
5
(1,310)
(52)
(73)
(24)
(13)
(162)
(68)
(18)
(3)
(1)
(90)
2
33
33
(14)
26
2
87
110
(59)
214
—
34
453
(75)
193
—
—
—
—
—
4
154
596
(148)
433
75
80
33
(14)
(15)
30
177
146
(20)
(49)
7
63
271
(65)
(49)
5
—
—
—
(1)
117
320
450
(99)
(114)
(3,014)
(6,708)
(4,939)
(72)
(14,733)
(2,850)
(6,352)
(4,732)
(60)
(13,994)
4,915
4,418
1,950
1,327
12,610
4,775
4,051
1,687
1,005
11,518
5,269
4,878
2,081
1,504
13,732
4,915
4,418
1,950
1,327
12,610
97
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Financial
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Notes to the Consolidated Financial Statements
Land and buildings include the breweries and offices of HEINEKEN as well as stores, pubs and bars. The plant
and machinery asset class contains all the assets needed in HEINEKEN's brewing, packaging and filling activities.
Other fixed assets mainly consist of returnable packaging materials, commercial fixed assets and furniture,
fixtures and fittings. Refer to note 7.4 for further information on returnable packaging materials that are
included in this category.
Impairment losses
Impairments of €68 million on goodwill (2022: nil), €158 million on owned property, plant and equipment
(2022: €27 million, net impairment reversal), €42 million on intangible assets with finite useful life (2022: €189
million, net impairment reversal) and €14 million on right of use (ROU) assets (2022: €4 million, impairment
reversal) were recorded for the year ended 31 December 2023. The impairments mainly relate to Brasserie
Nationale d'Haiti S.A. (Haiti) for €139 million which is included in the Americas operating segment.
In 2023, €350 million was added to the ROU assets as a result of entering into new lease contracts and the
remeasurement of existing leases (2022: €218 million). The depreciation and impairments of ROU assets for the
financial year ending 31 December is as follows:
In millions of €
Land and buildings
Equipment
Depreciation and impairments for ROU assets
Accounting estimates and judgements
2023
213
91
304
2022
174
80
254
The impairment for Haiti relates to hyperinflation accounting, which was applied for the first time during the
year ended 31 December 2023. Fixed assets are revalued for the inflation since they were acquired, which
resulted in an increase in the carrying value of fixed assets.
Estimates are required to determine the (remaining) useful lives of fixed assets. Useful lives are determined
based on an asset's age, the frequency of its use, repair and maintenance policy, technology changes in
production, redundancies or changes due to climate risks and expected restructuring.
The determination of the recoverable amount of the assets of Haiti is based on a VIU valuation, which is based
on a discounted 10-year cash flow forecast. The key assumptions used to determine the cash flows are based on
market expectations and management's best estimate. Cash flows thereafter are extrapolated using a perpetual
growth rate equal to the expected 30-year compounded average inflation, in order to calculate the terminal
recoverable amount.
IAS 29 requires entities that apply hyperinflation accounting for the first time to recognise impairment related to
prior periods in opening equity. The impairment for Haiti related to prior periods (€135 million) is recorded in the
retained earnings balance as at 1 January 2023. The impairment charge relating to the current year (€4 million)
and other impairments are recorded on the line 'amortisation, depreciation and impairments' in the income
statement. For a split per asset class, refer to the movement schedules in notes 8.1 and 8.2.
See the table below for the key assumptions:
Haiti
In %
2023-2026
2027-2032
33.5
5.9
5.5
33.5
5.9
4.4
HEINEKEN leases stores, pubs, offices, warehouses, cars, (forklift) trucks and other equipment in the ordinary
course of business. HEINEKEN has around 35,000 leases with a wide range of different terms and conditions,
depending on local regulations and practices. Many leases contain extension and termination options, which are
included in the lease term if HEINEKEN is reasonably certain to exercise the option. Refer to the table below for
the carrying amount of ROU assets per asset class per balance sheet date:
In millions of €
Land and buildings
Equipment
2023
836
204
2022
830
183
Carrying amount ROU assets as at 31 December
1,040
1,013
Sustainability
Review
Pre-tax WACC (in local currency)
Expected annual long-term inflation
Expected volume growth
Other
Information
Right of use (ROU) assets
HEINEKEN estimates the expected residual value per asset item. The residual value is the higher of the expected
sales price (based on recent market transactions of similar sold items) and its material scrap value.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of items of P,P&E.
HEINEKEN believes that straight-line depreciation most closely reflects the expected pattern of consumption of
the future economic benefits embodied in the asset.
Judgement is required to determine the lease term. The assessment of whether HEINEKEN is reasonably certain to
exercise such options impacts the lease term, which as a result could affect the amount of lease liabilities and ROU
assets recognised.
Accounting policies
Owned assets
A fixed asset is recognised when it is probable that future economic benefits associated with the P,P&E item will
flow to HEINEKEN and when the cost of the P,P&E can be reliably measured. The majority of the P,P&E of
HEINEKEN are owned assets, rather than leased assets.
P,P&E are recognised at historical cost less accumulated depreciation and impairment losses. Historical cost
includes all costs directly attributable to the purchase of an asset. The cost of self-constructed assets includes all
directly attributable costs to make the asset ready for its intended use. Spare parts that meet the definition of
P,P&E are capitalised and accounted for accordingly. If spare parts do not meet the recognition criteria of P,P&E,
they are either carried in inventory or consumed and recorded in profit or loss.
Subsequent costs are capitalised only when it is probable that the expenses will lead to future economic benefits and
can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which
they are incurred.
For the contractual commitments on ordered P,P&E refer to note 13.2.
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Notes to the Consolidated Financial Statements
Depreciation and impairments
Depreciation is calculated using the straight-line method, based on the estimated useful life of the asset class.
The estimated useful lives of the main asset classes are as follows:
– Buildings
– Plant and equipment
– Other fixed assets
15–40 years
5–30 years
3–10 years
Land and assets under construction are not depreciated. When assets under construction are ready for their
intended use, they are transferred to the relevant category and depreciation starts. All other P,P&E items are
depreciated over their estimated useful life to the asset's residual value.
8.3 Loans and advances to customers
Loans and advances to customers are inherent to HEINEKEN's business model. Loans to customers are repaid in
cash on fixed dates while the settlement of advances to customers is linked to the sales volume of the customer.
Loans and advances to customers are usually backed by collateral such as properties.
In millions of €
Loans to customers
Advances to customers
Loans and advances to customers
2023
60
179
239
2022
61
155
216
The depreciation method, residual value and useful lives are reassessed annually. Changes in useful lives or
residual value are recognised prospectively.
The movement in allowance for impairment losses for loans and advances to customers during the year is as
follows:
HEINEKEN reviews whether indicators for impairment exist on a CGU level. When an indicator of impairment
exists, assets are tested for impairment. Impairment losses on assets, other than goodwill, recognised in prior
periods are assessed at each reporting date for any indication of a reversal, due to observable indications that
the asset's value has increased significantly or other significant changes with favourable effects.
Derecognition of Property, plant and equipment
P,P&E is derecognised when it is scrapped or sold. Gains on sale of P,P&E are presented in profit or loss as other
income (refer to note 6.2); losses on sale are included in depreciation.
Right of use (ROU) assets
Definition of a lease
A contract contains a lease if it provides the right to control the use of an identified asset for a period of time in
exchange for an amount payable to the lessor. The right to control the use of the identified asset exists when
having the right to obtain substantially all of the economic benefits from the use of that asset and when having
the right to direct the use of that asset.
HEINEKEN as a lessee
At the start date of the lease, HEINEKEN (lessee) recognises a ROU asset and a lease liability on the balance
sheet. The ROU asset is initially measured at cost, and subsequently at cost less accumulated depreciation and
impairment losses, and adjusted for certain remeasurements of the lease liability. For measurement of the lease
liability, refer to note 11.3.
HEINEKEN applies the following practical expedients for the recognition of leases:
– The short-term lease exemption means that leases with a duration of less than a year are expensed in the income
statement on a straight-line basis.
– The low-value lease exemption, meaning that leased assets with an individual value of €5,000 or less if bought
new, are expensed in the income statement on a straight-line basis.
HEINEKEN as a lessor
A lease is classified as a finance lease when it transfers substantially all the risks and rewards relating to
ownership of the underlying asset to the lessee. For contracts where HEINEKEN acts as an intermediate lessor,
the subleases are classified with reference to the ROU asset.
Lease related notes
For lease liabilities, refer to note 11.3 Borrowings. For short-term and low-value leases, refer to other expenses in
note 6.3 Raw materials, consumables and services. For the lease receivables, refer to other receivables in note 8.5
Other non-current assets and other receivables in note 7.2 Trade and other receivables. For the contractual
maturities of lease liabilities, refer to note 11.5 Credit, liquidity and market risk.
In millions of €
Balance as at 1 January
Transfers
Addition to allowance
Allowance used
Allowance released
Effect of movements in exchange rates
Balance as at 31 December
2023
69
2
4
(12)
(6)
3
60
2022
69
1
9
(8)
(5)
3
69
In millions of €Allowance for credit losses 2023 – Loans and advances to customers6924(12)(6)360Balance as at 1 JanuaryTransfersAddition to allowanceAllowance usedAllowance releasedEffect of movements in exchange ratesBalance as at 31 December020406080
99
Notes to the Consolidated Financial Statements
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Accounting estimates
HEINEKEN determines at each reporting date the impairment of loans and advances to customers using an
expected credit loss model, which estimates the credit losses over 12 months. If a significant increase in credit
risk occurs (e.g. more than 30 days overdue, change in credit rating, payment delays in other receivables from
the customer), credit losses over the lifetime of the asset are incurred. Individually significant financial assets are
tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups
that share similar credit risk characteristics. Due to the macro-economic environment and uncertainties including
increasing inflationary pressure on HEINEKEN’s customers, more judgement is required for the calculation of
expected credit losses compared to the prior years. For more information on HEINEKEN's credit risk exposure
refer to note 11.5.
Introduction
Accounting policies
Loans and advances to customers are initially measured at fair value and subsequently at amortised cost minus
any impairment losses.
8.4 Equity instruments
Equity instruments mainly consist of shares in Heineken Holding N.V., which HEINEKEN acquired from FEMSA
during 2023 as part of the accelerated bookbuild offering. The investment is not held for trading purposes. Refer
to note 13.3 ‘Related parties’. In the financial statements 2022, equity instruments were presented under other
non-current assets.
Report
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In millions of €
Shares in Heineken Holding N.V.
Financial
Statements
Other
Equity instruments
8.5 Other non-current assets
Other non-current assets mainly consist of long-term prepayments and other receivables with a duration longer
than 12 months.
In millions of €
Fair value through OCI debt investments
Non-current derivatives
Loans to joint ventures and associates
Long-term prepayments
Other receivables
Other non-current assets
Note
11.6
2023
14
33
10
504
417
2022
9
56
15
461
544
978
1,085
Other receivables include lease receivables of €115 million (2022: €137 million). The average outstanding term
of the lease receivables, including the short-term portion of lease receivables, is 3.0 years (2022: 2.9 years). The
remainder of other receivables mainly originate from the acquisition of the beer operations of FEMSA and
represent a receivable on the Brazilian authorities on which interest is calculated in accordance with Brazilian
legislation. The collection of this receivable is expected to be beyond a period of five years. A part of the
aforementioned qualifies for indemnification towards FEMSA and is provided for.
Accounting estimates
Note
2023
395
167
562
2022
—
145
145
HEINEKEN determines on each reporting date the impairment of other receivables using an expected credit loss
model, which estimates the credit losses over 12 months. Only in case of a significant increase in credit risk occurs
(e.g. more than 30 days overdue, change in credit rating, payment delays in other receivables from the
customer) the credit losses over the lifetime of the asset are incurred. Individually significant other receivables
are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in
groups that share similar credit risk characteristics. For more information on HEINEKEN's credit risk exposure refer
to note 11.5.
Sustainability
Review
Other
Information
Sensitivity analysis – equity securities
An increase or decrease of 1% in the share price of the equity securities at the reporting date would not have a
material impact.
Accounting policies
HEINEKEN’s investments in equity securities are classified as FVOCI. These investments are interests in entities
where HEINEKEN has less than significant influence. This is generally the case when ownership is less than 20%
of the voting rights. Upon the sale of these equity securities the accumulated fair value and currency translation
changes are transferred to retained earnings.
FVOCI investments are measured at fair value (refer to note 13.1). The fair value changes are recognised in
other comprehensive income (OCI) and presented within equity in the fair value reserve. Dividend income is
recognised in profit or loss.
Accounting policies
Non-current derivatives
Refer to the accounting policies on derivative financial instruments in note 11.6.
Other
The remaining non-current assets as presented in the previous table are initially measured at fair value and
subsequently at amortised cost minus any impairment losses.
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Notes to the Consolidated Financial Statements
9. Provisions and contingent liabilities
9.1 Post-retirement obligations
HEINEKEN makes contributions to pension plans that provide pension benefits to (former) employees upon
retirement, both via defined benefit as well as defined contribution plans. Other long-term employee benefits
include long-term bonus plans, termination benefits, medical plans and jubilee benefits. Refer to note 6.4 for the
contribution to defined contribution plans. This note relates to HEINEKEN's defined benefit pension plans. Refer
to the table below for the present value of the defined benefit plans as at 31 December.
In millions of €
Present value of unfunded defined benefit obligations
Present value of funded defined benefit obligations
Total present value of defined benefit obligations
Introduction
Fair value of defined benefit plan assets
Present value of net obligations
Asset ceiling items
Defined benefit plans included under non-current assets
Recognised liability for defined benefit obligations
Other long-term employee benefits
2023
167
8,193
8,360
(8,006)
354
145
39
538
48
586
2022
177
7,745
7,922
(7,569)
353
129
28
510
58
568
The vast majority of benefit payments are from pension funds that are held in trusts (or equivalent), however,
there is a small portion where HEINEKEN fulfils the benefit payment obligation as it falls due. Plan assets held in
trusts are governed by Trustee Boards composed of HEINEKEN representatives and independent and/or
member representation, in accordance with local regulations and practice in each country. The relationship and
division of responsibility between HEINEKEN and the Trustee Board (or equivalent) including investment
decisions and contribution schedules are carried out in accordance with the plan's regulations.
The defined benefit pension plans in the Netherlands (NL) and the United Kingdom (UK) represent the majority
of the total defined benefit plan assets and the present value of the defined benefit obligations.
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Refer to the table below for the split of these plans in the total present value of the net obligations of HEINEKEN.
In millions of €
Total present value of
defined benefit obligations
Fair value of defined benefit
plan assets
Present value of net
obligations
2023
UK
2022
UK
2023
NL
2022
NL
2023
Other
2022
Other
2023
Total
2022
Total
2,717
2,641
4,386
4,120
1,257
1,161
8,360
7,922
(2,581)
(2,557)
(4,324)
(4,055)
(1,101)
(957)
(8,006)
(7,569)
136
84
62
65
156
204
354
353
Defined benefit plan in the Netherlands
HEINEKEN provides employees in the Netherlands with an average pay pension plan based on earnings up to
the legal tax limit. Indexation of accrued benefits is conditional on the funded status of the pension fund.
HEINEKEN pays contributions to the fund up to a maximum level agreed with the Board of the pension fund
and has no obligation to make additional contributions in case of a funding deficit.
During 2023, the coverage ratio of the Dutch pension fund improved slightly. The interest rates showed a small
decrease that increased the fund’s net defined benefit obligations. The fund’s financial position allowed for
pension indexation in 2023.
In 2023, the increase in the fair value of defined benefit plan assets is mainly due to an increase in the value of
equities, bonds, interest rate swaps, mortgages and alternative credits. The higher defined benefit obligation is
mainly due to a lower discount rate assumption, and a higher indexation assumption. HEINEKEN’s cash
contribution to the Dutch pension plan was at the maximum level. The same level will apply in 2024.
Defined benefit plan in the United Kingdom
HEINEKEN’s UK plan (Scottish & Newcastle pension plan 'SNPP') was closed to future accrual in 2011 and the
liabilities thus relate to past service before plan closure. Based on the triennial review finalised in early 2019,
HEINEKEN renewed the funding plan (until 31 May 2023) including an annual deficit reduction contribution of
GBP39.2 million in 2018, thereafter increasing with GBP1.7 million per year. At the end of 2018, an agreement
(the 'Funding Agreement') was reached with the UK pension fund Trustees on a more conservative longer-term
funding and investment approach towards 2030. This agreement has been formalised during 2019 and signed
in early 2020, which leads to a gradual decrease in investment risk. The schedule of deficit recovery payments
remained in place until May 2023. As of June 2023, deficit recovery payments have stopped. Going forward
recovery payments will be conditional on the funding position of the pension fund and capped on the former
contribution level.
In 2023, the increase in the fair value of defined benefit plan assets is due to a stronger British Pound foreign
currency translation impact offset by the decrease in the fair value of the defined benefit plan assets mainly due
to a fall in the value of the longevity swap, as a result of updating the assumption for future mortality
improvements. The increase in defined benefit obligation over 2023 is mainly due to actual deferred
revaluations and pension increases being higher than assumed. The increase in the defined benefit obligation as
a result of a fall in the discount rate assumption was mostly offset by a fall in the long term inflation assumption
and a change in the mortality assumption to adopt the latest available model for projecting future
improvements in life expectancies.
Defined benefit plans in other countries
In a few other countries, HEINEKEN offers defined benefit plans, which are individually not significant to
HEINEKEN. The majority of these plans are closed for new participants.
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Notes to the Consolidated Financial Statements
Movement in net defined benefit obligation
The movement in the net defined benefit obligation during the year is as follows:
In millions of €
Balance as at 1 January
Included in profit or loss
Current service cost
Past service cost/(credit)
Administration expense
Effect of any settlement
Introduction
Expense recognised in personnel expenses
Interest expense/(income)
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Included in OCI
Remeasurement loss/(gain):
Actuarial loss/(gain) arising from
Demographic assumptions
Financial assumptions
Experience adjustments
Return on plan assets excluding interest income1
Effect of movements in exchange rates
Other
Changes in consolidation and reclassification
Contributions paid:
By the employer
By the plan participants
Other
Information
Benefits paid
Settlements
Balance as at 31 December
1 The total OCI impact for the current year also included movement resulting from asset ceiling increase between 2022 and 2023.
Present value of
defined benefit obligations
Fair value of defined
benefit plan assets
Note
2023
2022
2023
2022
7,922
10,182
(7,569)
(9,680)
Present value
of net obligations
2023
353
6.4
11.1
12.3
78
(4)
—
(2)
72
360
432
(46)
336
(47)
—
45
112
(2)
—
—
110
212
322
47
(2,714)
550
—
(114)
288
(2,231)
93
—
26
(401)
—
(282)
8,360
1
—
25
(377)
—
(351)
7,922
—
—
4
—
4
—
—
5
—
5
(339)
(335)
(198)
(193)
—
—
—
(169)
(40)
(209)
—
—
—
2,011
112
2,123
78
(4)
4
(2)
76
21
97
(46)
336
(47)
(169)
5
79
2022
502
112
(2)
5
—
115
14
129
47
(2,714)
550
2,011
(2)
(108)
(136)
(7)
(43)
(6)
(132)
(26)
401
—
107
(164)
(25)
377
—
181
(8,006)
(7,569)
(132)
(164)
—
—
—
(175)
354
—
—
—
(170)
353
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Notes to the Consolidated Financial Statements
Defined benefit plan assets
In millions of €
Equity instruments:
Europe
Northern America
Japan
Asia other
Other
Debt instruments:
Quoted
Unquoted
348
900
132
70
76
—
—
—
—
151
2023
Total
348
900
132
70
227
Quoted
Unquoted
316
847
118
160
92
—
—
—
—
145
2022
Total
316
847
118
160
237
1,526
151
1,677
1,533
145
1,678
Bonds – investment grade
4,278
1,167
5,445
3,744
1,125
4,869
Bonds – non-investment
grade
Derivatives
Properties and real estate
Cash and cash equivalents
Investment funds
Other plan assets
233
442
675
228
361
589
4,511
1,609
6,120
3,972
1,486
5,458
43
222
186
26
82
559
(1,314)
(1,271)
688
18
368
(110)
(350)
910
204
394
(28)
209
41
249
362
25
94
771
(1,296)
(1,255)
659
34
351
(86)
(338)
908
396
376
8
433
Balance as at 31 December
6,596
1,410
8,006
6,276
1,293
7,569
Sustainability
Review
The HEINEKEN pension funds monitor the mix of debt and equity securities in their investment portfolios based
on market expectations. Material investments within the portfolio are managed on an individual basis. Through
its defined benefit pension plans, HEINEKEN is exposed to several risks, the most significant are detailed below.
Other
Information
Risks associated with defined benefit plans
Asset volatility
The plan liabilities are calculated using a discount rate set with reference to AA corporate bond yields. If the
return on the plan assets is less than the return on the liabilities implied by this assumption, this will create a
deficit. The plan in the Netherlands holds a significant proportion of equities, which are expected to outperform
corporate bonds in the long term while providing volatility and risk in the short term.
In the Netherlands, an Asset-Liability Matching (ALM) study is performed at least on a triennial basis, the last
ALM study was performed in 2021. The ALM study is the basis for the strategic investment policies and the
(long-term) strategic investment mix. As at 31 December 2023, the strategic asset mix comprises 32% of plan
assets in equity securities, 20% in bonds and swaps, 18% in alternative investments, 15% in mortgage and 15%
in real estate.
In the UK, an actuarial valuation is performed at least on a triennial basis. The valuation is the basis for the
funding plan, strategic investment policies and the (long-term) strategic investment mix. The valuation was
performed in 2021. As at 31 December 2023, the strategic mix of assets comprises 33% of plan assets in
liability-driven investments, 12.5% in corporate bonds, 15% in higher-yielding credit, 23.5% in private markets,
10% in long lease property and 6% in equities. As part of the Funding Agreement, the strategic asset mix will
evolve between now and 2030 to provide greater certainty of return, lower volatility and higher cash generation.
Interest rate risk
A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an
increase in the value of the plans’ fixed-rate instruments holdings.
In the Netherlands, interest rate risk is managed through fixed-income investments and interest rate swap
instruments. These investments and instruments match the liabilities by 54% as at 31 December 2023 (2022:
38%). In the UK, interest rate risk is managed through the use of a mixture of fixed income investments and
interest rate swap instruments. These investments and instruments target a match of 100% of the interest rate
sensitivity of the total liabilities as measured on a Gilts +1% liability basis (2022: 96% as measured on the same
basis).
Inflation risk
Some of the pension obligations are linked to inflation. Higher inflation will lead to higher liabilities, although in
most cases caps on the level of inflationary increases are in place to protect the plan against extreme inflation.
The majority of the plan assets are either unaffected by or loosely correlated with inflation, meaning that an
increase in inflation will increase the deficit.
HEINEKEN provides employees in the Netherlands with an average pay pension plan, whereby indexation of
accrued benefits is conditional on the funded status of the pension fund. In the UK, inflation risk is partly
managed through the use of a mixture of inflation-linked fixed income investments and inflation-linked
derivative instruments. These instruments target a match of 100% of the inflation-linked liabilities as measured
on a Gilts +1% liability basis (2022: 96% as measured on the same basis).
Life expectancy
The majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life
expectancy will increase the plans’ liabilities. This is particularly significant in the UK plan, where inflation-linked
increases result in higher sensitivity to changes in life expectancy. In 2015, the Trustee of HEINEKEN UK's pension
plan implemented a longevity hedge to remove the risk of a higher increase in life expectancy than anticipated for
the 2015 population of pensioners.
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Notes to the Consolidated Financial Statements
Principal actuarial assumptions as at the balance sheet date
Based on the significance of the Dutch and UK pension plans compared with the other plans, the table below
refers to the major actuarial assumptions for those two plans as at 31 December:
In %
Discount rate as at 31 December
Future salary increases
Future pension increases
The Netherlands
UK1
2023
2022
2023
2022
3.5
2.0
2.9
3.8
2.0
2.9
4.8
—
3.0
5.0
—
3.1
Accounting estimates
To make the actuarial calculations for the defined benefit plans, HEINEKEN needs to make use of assumptions
for discount rates, future pension increases and life expectancy as described in this note. The actuarial
calculations are made by external actuaries based on inputs from observable market data, such as corporate
bond returns and yield curves to determine the discount rates used, mortality tables to determine life expectancy
and inflation numbers to determine future salary and pension growth assumptions.
1 The UK plan is closed for future accrual, leading to certain assumptions being equal to zero.
Accounting policies
For the other defined benefit plans, the following actuarial assumptions apply as at 31 December:
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Introduction
In %
Discount rate as at 31 December
Future salary increases
Future pension increases
Medical cost trend rate
Europe
Americas
2023
1.5-3.5
0.0-2.3
0.3-2.3
2022
2023
2022
2.3-3.9
9.8-11.0
9.4-13.0
0.0-3.4
0.0-2.3
0.0-4.5
0.0-3.5
5.1-9.0
0.0-4.5
0.0-3.5
5.1-7.5
0.0-2.3
—
Assumptions regarding future mortality rates are based on published statistics and mortality tables. For the
Netherlands, the rates are obtained from the ‘AG-Prognosetafel 2022’, fully generational. For the UK, the future
mortality rates are obtained by applying the Continuous Mortality Investigation 2021 projection model.
The weighted average duration of the defined benefit obligation at the end of the reporting period is 16 years
(2022: 16 years).
Except for the reduction in recovery contributions for the UK pension fund, HEINEKEN expects the contributions
to be paid for the defined benefit plans for 2024 to be in line with 2023.
Sensitivity analysis
As at 31 December, changes to one of the relevant actuarial assumptions that are considered reasonably
possible, holding other assumptions constant, would have affected the defined benefit obligation by the
following amounts:
Effect in millions of €
Discount rate (0.5% movement)
Future salary growth (0.25% movement)
Future pension growth (0.25% movement)
Medical cost trend rate (0.5% movement)
2023
2022
Increase in
assumption
Decrease in
assumption
Increase in
assumption
Decrease in
assumption
(588)
9
276
7
671
(9)
(254)
(6)
(551)
8
253
3
629
(8)
(245)
(3)
(317)
Life expectancy (1 year)
356
(357)
318
Defined contribution plans
A defined-contribution plan is a post-retirement plan for which HEINEKEN pays fixed contributions to a separate
entity. HEINEKEN has no legal or constructive obligation to pay further contributions if the fund does not hold
sufficient assets to pay out employees.
Defined benefit plans
A defined benefit plan is a post-retirement plan that is not a defined contribution plan. Typically, defined benefit
plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on
one or more factors such as age, years of service and compensation.
HEINEKEN’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by
estimating the amount of future benefits that employees have earned in return for their service in the current
and prior periods; those benefits are discounted to determine its present value. The fair value of any defined
benefit plan assets is deducted. The discount rate is the yield at balance sheet date on high quality credit-rated
bonds that have maturity dates approximating to the terms of HEINEKEN’s obligations and are denominated in
the same currency in which the benefits are expected to be paid.
The calculations are performed annually by qualified actuaries using the projected unit credit method. When the
calculation results in a benefit to HEINEKEN, the recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the plan or reductions in future contributions to the
plan. To calculate the present value of economic benefits, consideration is given to any minimum funding
requirements that apply to any plan in HEINEKEN. An economic benefit is available to HEINEKEN if it is
realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are
changed, the expense or benefit is recognised immediately in profit or loss.
HEINEKEN recognises all actuarial gains and losses arising from defined benefit plans immediately in other
comprehensive income and all expenses related to defined benefit plans in personnel expenses and other net
finance income and expenses in profit or loss.
For changes to a defined benefit plan, which result in a plan amendment or a curtailment or settlement,
HEINEKEN determines the amount of any past service cost, or gain or loss on settlement, by remeasuring the net
defined benefit liability before and after the amendment, using current assumptions and the fair value of plan
assets at the time of the amendment. In case the net defined benefit liability is remeasured to determine the
impact of the changes, current service cost and net interest for the remainder of the year are remeasured using
the same assumptions and the same fair value of plan assets.
Notes to the Consolidated Financial Statements
9.2 Provisions
Provisions within HEINEKEN mainly relate to restructuring, and claims and litigation that arise in the ordinary
course of business. The outcome depends on future events, which are by nature uncertain.
In millions of €
Claims
and
litigation
Note
Taxes
Restruc-
turing
Onerous
contracts
Other
Balance as at 1 January 2023
150
283
210
18
137
Changes in consolidation
10.1
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Effect of movements in exchange
rates
Unwinding of discounts
—
32
(6)
(45)
2
7
—
48
(4)
(8)
6
5
—
112
(86)
(18)
(2)
3
—
2
(1)
(7)
—
—
15
53
(1)
(1)
(10)
(107)
(61)
(139)
Balance as at 31 December 2023
140
330
219
12
132
Non-current
Current
125
15
302
28
122
97
4
8
74
58
Total
798
15
247
5
14
833
627
206
Claims and litigation
The provisions for claims and litigation of €140 million (2022: €150 million) mainly relate to civil and labour claims
in Brazil.
Taxes
The provisions for taxes of €330 million (2022: €283 million) relate to indirect taxes not within the scope of IAS
12 and mainly relate to Brazil. Tax legislation in Brazil is highly complex and subject to interpretation, therefore
the timing of the cash outflows for these provisions is uncertain.
Other provisions
Included are, among others, provisions for credit risk on surety and guarantees issued of €41 million
(2022: €50 million).
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Accounting estimates
In determining the likelihood and timing of potential cash outflows, HEINEKEN needs to make estimates. For
claims, litigation and tax provisions, HEINEKEN bases its assessment on internal and external legal assistance
and established precedents. For a large restructuring, management assesses the timing of the costs to be
incurred, which influences the classification as current or non-current liabilities.
Accounting policies
A provision is a liability of uncertain timing or amount. A provision is recognised when HEINEKEN has a present
legal or constructive obligation as a result of past events that can be estimated reliably, and it is probable (>50%)
that an outflow of economic benefits will be required to settle the obligation. In the case of accounting for
business combinations, provisions are also recognised when the likelihood is less than probable but more than
remote (>5%).
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation,
using a pre-tax rate that reflects the time value of money and the risks specific to the obligation. The increase in
the provision due to the passage of time is recognised as part of net finance expenses.
The impact of climate change is also considered in identifying whether HEINEKEN has a present legal or
constructive obligation related to fines or penalties.
Restructuring
A provision for restructuring is recognised when HEINEKEN has approved a detailed and formal restructuring
plan, and the restructuring has either commenced or has been announced publicly. Future operating losses are
not provided for. The provision includes the benefit commitments in connection with early retirement and
redundancy schemes.
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be received by HEINEKEN are
lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the
present value of the lower of the expected cost of terminating the contract, and the expected net cost of
continuing with the contract. Before a provision is established, HEINEKEN recognises any impairment loss on the
assets associated with that contract.
Other provisions
A provision for guarantees is recognised at the time the guarantee is issued (refer to note 9.3 for the total
guarantees outstanding). The provision is initially measured at fair value and subsequently at the higher of the
amount determined in accordance with the expected credit loss model and the amount initially recognised.
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Notes to the Consolidated Financial Statements
9.3 Contingencies
HEINEKEN’s contingencies are mainly in the area of tax, civil cases and guarantees.
Tax
The tax contingencies mainly relate to tax positions in Latin America and include a large number of cases with a
risk assessment lower than probable but possible. Assessing the amount of tax contingencies is highly
judgemental, and the timing of possible outflows is uncertain. The best estimate of tax-related contingent
liabilities is €1,233 million (2022: €1,489 million), out of which €78 million (2022: €73 million) qualifies for
indemnification. For several tax contingencies that were part of acquisitions, an amount of €188 million (2022:
€173 million) has been recognised as provisions and other non-current liabilities in the balance sheet (refer to
notes 9.2 and 8.5).
Other contingencies
Brazil civil cases
Part of other contingencies relates to civil cases in Brazil. Management's best estimate of the potential financial
impact for these cases is €52 million (2022: €57 million).
Other
Part of other contingencies relate to two follow-on damage cases for a total amount claimed of €478 million,
which arose as a result of the fine imposed by the Greek Competition Commission in 2014 against our subsidiary
Athenian Brewery for alleged abuse of its dominant position. It is not possible to estimate the outcome of these
claims with any degree of certainty for a number of reasons, including but not limited to the fact that (i) the
question whether the Dutch courts can assume (international) jurisdiction over these claims, insofar they are
made against Athenian Brewery, is pending before the Dutch Supreme Court, and (ii) Athenian Brewery and
HEINEKEN have raised defences against these claims, both on procedural grounds and on the merits. The
amount of these potential liabilities (if any) can therefore not be measured with sufficient reliability. There are
no reimbursements applicable for these cases.
As at 31 December 2023, €26 million (2022: €37 million) of other contingencies related to acquisitions is
included in provisions (refer to note 9.2).
Guarantees
In millions of €
Total 2023
Less than 1 year
1-5 years
More than
5 years
Total 2022
Guarantees to banks for
loans (to third parties)
Other guarantees
Guarantees
381
1,115
1,496
183
271
454
196
708
904
2
136
138
345
2,093
2,438
Guarantees to banks for loans relate to loans and advances to customers, which are given to external parties in
the ordinary course of business of HEINEKEN. HEINEKEN provides guarantees to the banks to cover the credit
risk related to these loans (refer to note 9.2 for the provision for credit risk on these guarantees).
In 2022, other guarantees included a €1.1 billion guarantee issued concerning the offer to acquire Distell Group
Holdings Limited.
Accounting estimates and judgements
HEINEKEN operates in a high number of jurisdictions and is subject to a wide variety of taxes per jurisdiction. Tax
legislation can be highly complex and subject to interpretation. As a result, HEINEKEN is required to exercise
significant judgement in the recognition of taxes payable and determination of tax contingencies.
Also for other contingencies including climate change, HEINEKEN is required to exercise judgement to determine
whether the risk of loss is possible but not probable. Contingencies involve inherent uncertainties including, but
not limited to, court rulings, negotiations between affected parties and governmental actions.
Accounting policies
A contingent liability is a liability of uncertain timing and amount. Contingencies are not recognised in the
balance sheet because the existence can only be confirmed by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of HEINEKEN or because the risk of loss is estimated to be
possible (>5%) but not probable (<50%) or because the amount cannot be measured reliably.
10. Acquisitions, disposals and investments
10.1 Acquisitions and disposals of subsidiaries and non-controlling interests
Acquisition of Distell and Namibia Breweries
On 14 April 2023, HEINEKEN obtained a controlling stake of 59.4% in NBL and on 26 April 2023, HEINEKEN fully
acquired the operations of Distell post the carve-out of their whiskey and gin activities. NBL and Distell have been
combined with Heineken South Africa into a new HEINEKEN majority-owned business ‘Heineken Beverages’.
HEINEKEN has a 65% shareholding in Heineken Beverages. Distell and NBL are consolidated within HEINEKEN
as from those dates.
Distell is Africa's leading producer and marketer of ciders, flavoured alcoholic beverages, wines and spirits, and
NBL is the beer market leader in Namibia. Heineken Beverages will have a significantly strengthened and
complementary route to market in South Africa and Namibia with further growth opportunities across Southern
Africa.
The Savanna and Windhoek brands represent the majority of the intangible assets valued at Distell and NBL
respectively. The goodwill is mainly attributable to a strategic premium included in the transaction and earnings
beyond the period over which intangible assets are amortised. None of the goodwill recognised is expected to be
deductible for income tax purposes. Heineken Beverages is considered the CGU for goodwill impairment testing
purposes.
Upon obtaining control, the existing equity interest in NBL (29.6%) was revalued to fair value (€179 million),
which resulted in a gain in previously-held equity interest of €14 million (net of gain in previously held equity
interest and recycling of currency exchange differences from translation reserve), recorded in 'Other income' in
the income statement (refer to note 6.2).
106
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Notes to the Consolidated Financial Statements
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the
acquisition date:
In millions of €
Note
Distell
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Inventories
Trade and other receivables
Cash and cash equivalents
Other assets
Introduction
Introduction
Assets acquired
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Deferred tax liabilities
Other non-current liabilities
Liabilities assumed
Total net identifiable assets
In millions of €
Consideration transferred
Non-controlling interests
Net identifiable assets acquired
Goodwill on acquisition
8.1
513
611
58
566
285
88
46
2,167
(556)
(280)
(20)
(856)
1,311
1,230
481
1,311
400
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€17 million of acquisition-related costs have been recognised in the income statement for the year ended 31
December 2023.
Other
Other
Information
Information
HEINEKEN considers the measurement period for acquiring control of Distell and NBL to be closed at 30 June
2023. Any adjustments afterwards will be recognised in the consolidated income statement (no such
adjustments occurred during the second half-year of 2023).
The amount of revenue recognised for Distell and NBL after obtaining control amounts to €1,237 million; the
amount of loss recognised after obtaining control amounts to €66 million. If control was obtained on 1 January
2023, revenue and profit for HEINEKEN would have been €37 billion and €2.4 billion respectively, for the year
ended 31 December 2023.
Next to the acquisition of Distell and NBL, there were no other significant acquisitions of subsidiaries during
2023.
Disposal of Vrumona
On 29 September 2023, HEINEKEN completed the sale of soft drinks manufacturer Vrumona. As a result, a gain
of €195 million has been recorded in 'Other income' in the income statement (refer to note 6.2).
Next to the sale of Vrumona and Russia disposal group classified as held for sale (refer to note 10.2), there were
no other significant acquisitions or disposals of subsidiaries during 2023.
NBL
84
164
—
30
26
83
—
387
(133)
(71)
(5)
(209)
178
358
76
178
256
Acquisition/disposal of non-controlling interests
In 2023, transactions with non-controlling interests mainly consists of a transaction where HEINEKEN purchased
14,201 shares of Heineken Beverages (South Africa) (Pty) Ltd from Namibia Breweries Limited. This temporarily
increased HEINEKEN’s shareholding from 75% to 100%. Subsequently, as part of the acquisition of Distell (refer
to note 10.1), this equity shareholding decreased to 65% which is recorded on the line ‘Changes in consolidation’
in the statement of changes in equity. The consideration paid for the acquisition of non-controlling interest in
2023 and the related equity impact are disclosed in the table below:
In millions of €
Heineken Beverages (South Africa) (Pty) Ltd1
Other
Total
Consideration
Book value of
non-controlling
interest
Equity impact
274
20
294
24
(15)
9
179
35
214
1 The equity impact includes an elimination of a €71 million gain reported in the share of profit of NBL on the sale of 25% equity stake in Heineken
Beverages (South Africa) (Pty) Ltd to HEINEKEN.
Accounting estimates and judgements
The identification and valuation of acquired assets and liabilities in a business combination involves significant
judgements and assumptions. The fair value of brands acquired is generally determined using either the multi-
period excess earnings method (MEEM) or the relief from royalty method (RfR).
Accounting policies
When HEINEKEN obtains control over an entity, the initial accounting for its assets and liabilities is at fair value.
The difference between the fair value of the consideration transferred (plus the fair value of any previously-held
equity interest in the acquiree and the recognised amount of any non-controlling interests in the acquiree) and
the net recognised amount of the identifiable assets acquired and liabilities assumed, is calculated. When the
difference is negative, a bargain purchase gain is recognised immediately in the income statement. When the
difference is positive, goodwill is recognised on the balance sheet.
Changes to the initial fair value of the acquired assets and liabilities, based on new information about the
circumstances at the acquisition date, can be made up to a maximum of 12 months after the acquisition date.
Acquisition-related costs are directly expensed in the income statement.
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as
owners and therefore no goodwill is recognised as a result. Adjustments to non-controlling interests arising from
transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the
subsidiary.
2023
—
28
—
—
28
—
—
—
2022
132
161
5
17
315
(173)
(8)
(181)
10.3 Investments in associates and joint ventures
HEINEKEN has interests in several joint ventures and associates. The total carrying amount of these associates
and joint ventures was €4,130 million as at 31 December 2023 (2022: €4,296 million) and the total share of
profit and other comprehensive income was a profit of €143 million in 2023 (2022: €177 million). The share of
profit of associates and joint ventures includes an impairment loss of €8 million (2022: €4 million, impairment
loss).
The associate CRH (Beer) Limited (‘CBL’) is considered to be individually material. HEINEKEN holds a
shareholding of 40% in CBL as of 29 April 2019. CBL holds a controlling interest of 51.67% in China Resources
Beer (Holdings) Co. Ltd. ('CR Beer'), a company incorporated in Hong Kong and listed on the Main Board of The
Stock Exchange of Hong Kong Limited, operating in the beer business in China. Consequently, HEINEKEN has an
effective 20.67% economic interest in CR Beer. Based on the closing share price of HKD34.20 as at 31 December
2023 (2022: HKD54.55), the fair value of this economic interest in CR Beer amounts to €2,657 million (2022:
€4,398 million). The carrying amount of CBL as at 31 December 2023 amounts to €2,832 million (2022: €2,908
million).
Set out below is the summarised financial information of CR Beer, not adjusted for the percentage of ownership
held by HEINEKEN. The financial information has been amended to reflect adjustments made by HEINEKEN
when using the equity method (such as fair value adjustments). Due to a difference in reporting timelines, the
financial information is included with a two-month delay. This means that the financial information included
relates to the period November 2022-October 2023. The reconciliation of the summarised financial information
to the carrying amount of the effective interest in CR Beer is also presented.
Notes to the Consolidated Financial Statements
10.2 Assets or disposal groups classified as held for sale
The assets and liabilities below are classified as held for sale for the year ended 31 December 2023:
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In millions of €
Current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Assets or assets of disposal group held for sale
Current liabilities
Non-current liabilities
Introduction
Liabilities associated with assets classified as held for sale
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Russia disposal group classified as held for sale
On 24 August 2023, HEINEKEN sold 100% of the Russia disposal group classified as held for sale for €1. This
includes a commitment from the buyer to repay the historical intercompany debt of €103 million to HEINEKEN
in instalments. The net loss on disposal as per 31 December 2023 amounts to €219 million, which mainly relates
to the recycling of foreign currency translation reserve to profit or loss and a net impairment of €10 million (refer
to note 6.6).
Accounting estimates and judgements
HEINEKEN classifies assets or disposal groups as held for sale when they are available for immediate sale in their
present condition, are expected to be sold within 1 year, and the sale is highly probable. HEINEKEN should be
committed to the sale and it should be unlikely that the plan to sell will be withdrawn. This might be difficult to
demonstrate in practice and involves judgement.
Accounting policies
Assets or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through
sale rather than through continuing use are classified as held for sale. Immediately before classification as held
for sale, the assets, or components of a disposal group, are measured at the lower of their carrying amount and
fair value less cost to sell.
Intangible assets and P,P&E once classified as held for sale are not amortised or depreciated. In addition, equity
accounting of equity-accounted investees ceases once classified as held for sale.
108
Notes to the Consolidated Financial Statements
In millions of €
Summarised balance sheet (100%)
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Reconciliation to carrying amount
Opening net assets
Profit for the period
Other comprehensive income
Dividends paid
Other
Closing net assets
Company’s share in %
Company’s share
Goodwill
Carrying amount
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In millions of €
Summarised income statement (100%)
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Profit
Other
Information
Other comprehensive income
Total comprehensive income
Dividends received
31 October 2023
31 October 2022
Summarised financial information for equity-accounted joint ventures and associates
The following table includes, in aggregate, the carrying amount and HEINEKEN’s share of profit and OCI of joint
ventures and associates (net of income tax):
In millions of €
Carrying amount of interests
Share of:
Profit from continuing operations
Other comprehensive income
Joint ventures
Associates¹
2023
934
71
(56)
15
2022
2023
2022
953
3,196
3,343
64
17
81
147
(19)
128
159
(63)
96
1 Includes the investment in CR Beer, which is considered to be individually material. The other joint ventures and associates are considered to be
individually immaterial.
Accounting policies
Associates are entities in which HEINEKEN has significant influence, but not control or joint control. Significant
influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint
ventures (JVs) are the arrangements in which HEINEKEN has joint control.
HEINEKEN’s investments in associates and JVs are accounted for using the equity method of accounting,
meaning they are initially recognised at cost. The consolidated financial statements include HEINEKEN’s share of
the net profit or loss of the associates and JVs whereby the result is determined using the accounting policies of
HEINEKEN.
When HEINEKEN’s share of losses exceeds the carrying amount of the associate or joint venture, the carrying
amount is reduced to nil and recognition of further losses is discontinued except to the extent that HEINEKEN
has an obligation or has made a payment on behalf of the associate or JV.
At each reporting date, HEINEKEN reviews its investments in associates and JVs to determine whether there is
any indication of impairment. A significant or prolonged decline in the fair value of the investment below its cost
is also considered in assessing for any indication of impairment. If any such indication exists, an impairment test
is performed (refer to note 8.1).
10,206
1,692
(2,390)
(2,744)
6,764
6,342
466
(311)
(250)
517
8,639
2,291
(1,809)
(2,777)
6,344
6,046
471
88
(256)
(7)
6,764
6,342
20.67%
20.67 %
1,398
1,434
2,832
1,311
1,597
2,908
November 2022
to October 2023
November 2021
to October 2022
5,023
5,198
466
(311)
155
471
88
559
52
52
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Notes to the Consolidated Financial Statements
11. Financing and capital structure
11.1 Net finance income and expense
Interest expenses are mainly related to interest charges over the outstanding bonds, commercial paper and bank
loans (refer to note 11.3). Other net finance income and expenses comprise dividend income, fair value changes
of financial assets and liabilities measured at fair value, transactional foreign exchange gains and losses (on a
net basis), monetary gain resulting from hyperinflation accounting, unwinding of discount on provisions and
interest on the net defined benefit obligation.
In millions of €
Interest income
Interest expenses
Introduction
Dividend income from fair value through OCI investments
Net change in fair value of derivatives
Net foreign exchange gain/(loss)1
Net monetary gain arising from hyperinflationary economies
Unwinding discount on provisions
Interest on the net defined benefit obligation
Other
Other net finance income/(expenses)
Note
9.2
9.1
2023
90
(640)
7
(85)
(323)
79
(13)
(21)
(19)
(375)
2022
74
(458)
7
67
(121)
94
(15)
(14)
30
48
Net finance income/(expenses)
(925)
(336)
1 Transactional foreign exchange effects of working capital and foreign currency-denominated borrowings.
11.2 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. In general, bank overdrafts form an integral
part of HEINEKEN’s cash management and are included as a component of cash and cash equivalents in the
statement of cash flows.
In millions of €
Cash and cash equivalents
Bank overdrafts
Cash and cash equivalents in the statement of cash flows
Note
11.3
2023
2,377
(952)
1,425
2022
2,765
(1,147)
1,618
For more information on HEINEKEN's liquidity risk exposure refer to note 11.5.
The following table presents recognised 'Cash and cash equivalents' and 'Bank overdrafts', and the impact of the
netting of gross amounts. The 'Net amount' below refers to the impact on HEINEKEN's balance sheet if all
amounts subject to legal offset rights are netted.
2023
Net amounts
presented in
the statement
of financial
position
Gross
amounts
Amounts subject
to legal offset
rights
Net amount
In millions of €
Assets
Cash and cash equivalents
2,377
2,377
(512)
1,865
Liabilities
Bank overdrafts
(952)
(952)
512
(440)
2022
Interest expenses include the interest component of lease liabilities of €58 million (2022: €49 million).
Assets
In 2023, a net monetary gain was recognised related to applying hyperinflation accounting in Ethiopia and Haiti.
Cash and cash equivalents
2,765
2,765
(792)
1,973
Accounting policies
Interest income and expenses are recognised as they accrue, using the effective interest method.
Dividend income is recognised in the income statement on the date that HEINEKEN’s right to receive payment is
established, which is the ex-dividend date in the case of quoted securities.
HEINEKEN operates in several territories where there is limited availability of foreign currency resulting in
restrictions on remittances. Mainly as a result of these restrictions, ¤478 million (2022: ¤418 million) of cash
included in cash and cash equivalents is restricted for use by the Company, yet available for use in the relevant
subsidiary’s day-to-day operations.
Liabilities
Bank overdrafts
(1,147)
(1,147)
792
(355)
Accounting policies
Cash and cash equivalents are initially recognised at fair value and subsequently at amortised cost.
HEINEKEN has cash pooling arrangements with legally enforceable rights to offset cash and overdraft balances.
Where there is an intention to settle on a net basis, cash and overdraft balances relating to the cash pooling
arrangements are reported on a net basis in the statement of financial position.
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Notes to the Consolidated Financial Statements
11.3 Borrowings
HEINEKEN mainly uses bonds, commercial paper and bank loans to ensure sufficient financing to support its
operations. Net interest-bearing debt is the key metric for HEINEKEN to measure its indebtedness.
In millions of €
Note Non-current
Current
Total Non-current
Unsecured bond issues
12,751
1,458
14,209
11,691
2023
961
240
94
—
—
306
286
1,267
526
699
793
491
952
491
952
905
197
100
—
—
Current
1,075
336
114
255
557
1,147
2022
Total
12,766
1,241
311
355
557
1,147
14,046
4,192
18,238
12,893
3,484
16,377
11.5
11.2
(3)
(23)
(2,377)
15,835
(17)
(64)
(2,765)
13,531
Lease liabilities
Bank loans
Other interest-bearing
liabilities
Deposits from third
parties1
Bank overdrafts
Total borrowings
Market value of cross-
currency interest rate
swaps
Other investments
Cash and cash
equivalents
Net debt
1 Mainly employee deposits.
Financial
Statements
As at 31 December 2023, €87 million of the €526 million of bank loans is secured (2022: €82 million). Other
interest-bearing liabilities includes €500 million of centrally issued commercial paper (2022: €0 million).
Sustainability
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Other
Information
Unsecured
bond issues
Lease
liabilities
Bank loans
Other
interest-
bearing
liabilities
Deposits
from third
parties
Derivatives
used for
financing
activities
Assets and
liabilities
used for
financing
activities
12,766
1,241
311
355
557
(17)
15,213
—
66
201
3
(82)
—
2,598
26
348
—
(27)
(227)
—
—
1,104
2,991
1
—
—
58
—
17
—
—
271
(293)
348
6,751
In millions of €
Balance as at
1 January 2023
Consolidation
changes
Effect of movements
in exchange rates
Addition of leases
Proceeds
(Re)payments
(1,087)
(390)
(1,067)
(2,325)
(126)
(3)
(4,998)
Interest paid over
lease liability
Other
Balance as at
31 December 2023
In millions of €
Balance as at
1 January 2022
Consolidation
changes
Effect of movements
in exchange rates
Addition of leases
Proceeds
(Re)payments
Interest paid over
lease liability
Other
Balance as at
31 December 2022
—
14
(58)
34
—
4
—
(4)
—
1
—
—
(58)
49
14,209
1,267
526
793
491
(3)
17,283
Unsecured
bond issues
Lease
liabilities
Bank loans
Other
interest-
bearing
liabilities
Deposits
from third
parties
Derivatives
used for
financing
activities
Assets and
liabilities
used for
financing
activities
13,535
1,106
767
211
562
33
16,214
—
27
17
41
(60)
—
25
208
—
—
35
428
—
(7)
(31)
—
332
—
258
4
—
54
(987)
(305)
(882)
(45)
(3)
—
10
(49)
(1)
—
84
—
(79)
—
—
(50)
—
—
—
—
—
159
428
644
(2,222)
(49)
14
12,766
1,241
311
355
557
(17)
15,213
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Notes to the Consolidated Financial Statements
Changes in borrowings
In 2023, the increase in borrowings is mainly due to proceeds from new bonds, bank loans and commercial
paper, which exceeded the repayments.
Borrowings for which HEINEKEN has an unconditional right to defer settlement of the liability for at least 12
months after the balance sheet date are classified as non-current liabilities. For the accounting policy on cash
and cash equivalents and derivatives refer to notes 11.2 and 11.6, respectively.
Cash flows from financing activities are mainly generated by bonds, commercial paper, bank loans and other
interest-bearing liabilities presented above. Additionally, HEINEKEN also uses derivatives related to its financing,
which can be recognised as assets or liabilities. The above table details the reconciliation of the liabilities and
assets arising from financing activities to the cash flow from financing activities. Bank overdrafts form an
integral part of HEINEKEN’s cash management and are included as a component of cash and cash equivalents
in the statement of cash flows. For more information on derivatives refer to note 11.6.
Lease liabilities
Lease liabilities are measured at the present value of the lease payments to be paid during the lease term,
discounted using the incremental borrowing rate. Lease liabilities are subsequently increased by the interest cost
on the lease liabilities and decreased by lease payments made. The lease liabilities will be remeasured when
there is a change in the amount to be paid (e.g. due to indexation) or when there is a change in the assessment
of the lease terms.
The average effective interest rate on the net debt position as at 31 December 2023 was 3.4% (2022: 2.8%).
The average maturity of the bonds as at 31 December 2023 was 7 years (2022: 7 years).
Centrally available financing headroom
The centrally available financing headroom at Group level was approximately €3.2 billion as at 31 December
2023 (2022: €3.6 billion) and consisted of the undrawn part of the committed €3.5 billion revolving credit facility
and centrally available cash minus centrally issued commercial paper and short-term bank borrowings at group
level.
In March 2023, HEINEKEN refinanced its €3.5 billion revolving credit facility. The new revolving credit facility is
set to mature in May 2028 and has two 1-year extension options. The facility is committed by a group of 18
banks.
New financing
During the year period ended 31 December 2023, HEINEKEN secured additional financing by issuing the
following notes, which are included in the unsecured bond issues:
Date of placement Note
Date of maturity
9 March 2023
€500 million of 1.5-year Notes with a coupon of 3.875%
23 September 2024
9 March 2023
€750 million of 7.5-year Notes with a coupon of 3.875%
23 September 2030
9 March 2023
€750 million of 12-year Notes with a coupon of 4.125%
23 March 2035
8 November 2023
€600 million of 3-year Notes with a coupon of 3.625%
15 November 2026
The incremental borrowing rate (IBR) is determined on a country level. For each country, there are separate rates
depending on the contract currency and the term of the lease. The IBR is calculated based on the local risk-free
rate plus a country default spread and a credit spread.
The lease term is determined as the non-cancellable period of a lease, together with:
– Periods covered by a unilateral option to extend the lease if HEINEKEN is reasonably certain to make use of that
option
– Periods covered by an option to terminate the lease if HEINEKEN is reasonably certain not to make use of that
option
HEINEKEN applies the following practical expedients for the recognition of leases:
– Apply a single discount rate per country to a portfolio of leases with reasonably similar characteristics
– Include non-lease components in the lease liability for equipment leases
11.4 Capital and reserves
Share capital
Refer to the table below for the issued share capital as at 31 December. All issued shares are fully paid.
Share capital
1 January
Changes
31 December
2023
Nominal value
in millions of €
2022
Nominal value in
millions of €
Shares of €1.60
Shares of €1.60
576,002,613
922 576,002,613
—
—
—
576,002,613
922 576,002,613
922
—
922
Accounting estimates and judgements
Judgement is required to determine the lease term and the incremental borrowing rate. The assessment of
whether HEINEKEN is reasonably certain to exercise extension options or not to make use of termination options
impacts the lease term, which as a result could affect the amount of lease liabilities recognised. The assumptions
used in the determination of the incremental borrowing rate could impact the rate used in discounting future
payments, which as a result could have an impact on the amount of lease liabilities recognised.
The Company’s authorised capital amounts to €2,500 million, consisting of 1,562,500,000 shares.
The shareholders are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholder meetings of the Company. In respect of the treasury shares that are held by HEINEKEN,
rights are suspended.
Share premium
As at 31 December 2023, the share premium amounted to €2,701 million (2022: €2,701 million).
Accounting policies
Borrowings
Borrowings are initially measured at fair value less transaction costs. Subsequently, the borrowings are measured
at amortised cost using the effective interest rate method. Borrowings included in a fair value hedge are stated
at fair value in respect of the risk being hedged.
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Notes to the Consolidated Financial Statements
Translation reserve
The translation reserve comprises foreign currency differences arising from the translation of the assets and
liabilities of foreign operations of HEINEKEN (excluding amounts attributable to non-controlling interests) as well
as value changes of the hedging instruments in the net investment hedges. HEINEKEN considers this a legal
reserve.
Hedging reserve
This reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments where the hedged transaction has not yet occurred. HEINEKEN considers this a legal reserve.
Fair value reserve
This reserve comprises the cumulative net change in the fair value of FVOCI equity investments. HEINEKEN
transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.
HEINEKEN considers this a legal reserve.
Other legal reserves
These reserves relate to the share of profit of joint ventures and associates over the distribution of which
HEINEKEN does not have control. The movement in these reserves reflects the share of profit of joint ventures
and associates minus dividends received. For retained earnings of subsidiaries that cannot be freely distributed
due to legal or other restrictions, a legal reserve is recognised. Furthermore, part of the reserve comprises a legal
reserve for capitalised development costs.
Reserve for own shares
The reserve for own shares comprises the treasury shares held by HEINEKEN. Refer to the table below with the
changes in 2023. The increase mainly relates to the purchase of shares in HEINEKEN from FEMSA as part of the
accelerated bookbuild offering (refer to note 13.3).
Reserve for own shares
1 January 2023
Changes
31 December 2023
Number of
shares
684,401
9,891,244
10,575,645
Sustainability
Review
Dividends
The following dividends were declared and paid by HEINEKEN:
In millions of €
Other
Information
Final dividend previous year €1.23, respectively €0.96 per qualifying share
Interim dividend current year €0.69, respectively €0.50 per qualifying share
Total dividend declared and paid
2023
693
387
1,080
2022
552
288
840
For 2023, a payment of a total cash dividend of €1.73 per share (2022: €1.73) will be proposed at the AGM on
25 April 2024. If approved, the final dividend of €1.04 will be paid on 7 May 2024, as an interim dividend of
€0.69 per share was paid on 10 August 2023. The payment will be subject to a 15% Dutch withholding tax.
After the balance sheet date, the Executive Board proposed the following appropriation of profit. The dividends,
taking into account the interim dividends declared and paid, have not been provided for.
In millions of €
Dividend per qualifying share €1.73 (2022: €1.73)
Addition to retained earnings
Net profit
2023
978
1,326
2,304
2022
995
1,687
2,682
Non-controlling interests
The non-controlling interests (NCI) relate to minority stakes held by third parties in HEINEKEN consolidated
subsidiaries. The total NCI as at 31 December 2023 amounted to €2,733 million (2022: €2,369 million), refer to
note 10.1 for more information.
Capital management
There were no major changes in HEINEKEN’s approach to capital management during the year. The Executive
Board’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to
sustain future development of the business and acquisitions.
HEINEKEN is not subject to externally imposed capital requirements other than the legal reserves. Shares are
purchased from time to time to meet the requirements of the share-based payment awards, as further
explained in note 6.5.
Accounting policies
Shares are classified as equity. When share capital recognised as equity is repurchased, the amount of the
consideration paid, which includes directly attributable costs, is net of any tax effects recognised as a deduction
from equity. Repurchased shares recorded at purchase price are classified as treasury shares and are presented in
the reserve for own shares.
When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in
equity, and the resulting surplus or deficit on the transaction is transferred to or from retained earnings.
Dividends are recognised as a liability in the period in which they are declared.
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Notes to the Consolidated Financial Statements
11.5 Credit, liquidity and market risk
This note summarises the financial risks that HEINEKEN is exposed to, and HEINEKEN’s policies and processes
that are in place for managing these risks. For more information on derivatives used in managing risk refer to
note 11.6.
Risk management framework
The Executive Board sets rules and monitors the adequacy of HEINEKEN’s risk management and control
systems. These systems are regularly reviewed to reflect changes in market conditions and HEINEKEN’s activities.
Managing the financial risks and financial resources includes the use of derivatives, primarily spot and forward
exchange contracts, options and interest rate swaps. It is HEINEKEN's policy not to enter into speculative
transactions.
In the normal course of business HEINEKEN is exposed to the following financial risks:
– Credit risk
– Liquidity risk
– Market risk
Credit risk
Credit risk is the risk of a loss to HEINEKEN when a customer or counterparty fails to pay.
All local operations are required to comply with the Global Credit Policy and develop local credit management
procedures accordingly. HEINEKEN reviews and updates the Global Credit Policy periodically to ensure that
adequate controls are in place to mitigate credit risk.
Credit risk arises mainly from HEINEKEN’s receivables from customers like trade receivables, loans to customers
and advances to customers. At the balance sheet date, there were no significant concentrations of credit risk.
Loans and advances to customers
HEINEKEN’s loans and receivables include loans and advances to customers. Loans and advances to customers
are usually backed by collateral such as properties. HEINEKEN charges interest on loans to its customers.
Trade and other receivables
HEINEKEN’s local management has credit policies in place and the exposure to credit risk is monitored on an
ongoing basis. Under these policies, all customers requiring credit above a certain amount are reviewed and new
customers are analysed individually for creditworthiness before HEINEKEN’s standard payment and delivery
terms and conditions are offered. This review can include external ratings, where available, and in some cases
bank references. Credit limits are determined for each customer and are reviewed regularly. Customers that fail
to meet HEINEKEN’s credit requirements transact only with HEINEKEN on either a prepayment or cash on
delivery basis.
Customers are monitored, on a country basis, according to their credit risk characteristics. A distinction is made
between individuals and legal entities, type of distribution channel, geographic location, ageing profile, maturity
and existence of previous financial difficulties.
HEINEKEN has a policy in place in respect of compliance with Anti-Money Laundering Laws. HEINEKEN considers
it important to know with whom business is done and from whom payments are received.
Allowances
HEINEKEN establishes allowances for impairment of loans and advances to customers, trade and other
receivables using an expected credit losses model. These allowances cover specific loss components that relate to
individual exposures, and a collective loss component established for groups of similar customers. The collective
loss allowance is determined based on historical data of payment statistics and updated periodically to
incorporate forward-looking information.
The loans and advances to customers, trade and other receivables are written off when there is no reasonable
expectation of recovery.
Due to the macro-economic environment and uncertainties including increasing inflationary pressure on
HEINEKEN’s customers, judgement is required in the calculation of expected credit losses. As part of these
assessments, HEINEKEN has incorporated all reasonable and supportable information available such as whether
there has been a breach of payment terms or deterioration of payment against payment terms, a request for
extended payment terms or a request for waived payment terms.
Investments
HEINEKEN invests centrally available cash balances in deposits and liquid investments with various
counterparties that have strong credit ratings. HEINEKEN actively monitors these credit ratings.
Guarantees
HEINEKEN’s policy is to avoid issuing guarantees unless this leads to substantial benefits for HEINEKEN. For
some loans to customers HEINEKEN does issue guarantees. In these cases, HEINEKEN aims to receive security
from the customer to limit the credit risk exposure.
Heineken N.V. has issued a joint and several liability statements to the provisions of Section 403, Part 9, Book 2
of the Dutch Civil Code with respect to legal entities established in the Netherlands. Refer to note A.1 of the
Company financial statements.
Exposure to credit risk
The maximum exposure to credit risk as at 31 December is as follows:
In millions of €
Cash and cash equivalents
Trade and other receivables, excluding prepayments
Derivative assets
Fair value through OCI investments
Loans and advances to customers
Other non-current receivables
Guarantees to banks for loans (to third parties)
Note
11.2
7.2
11.6
8.5
8.3
8.5
9.3
2023
2,377
4,487
91
14
239
331
381
2022
2,765
4,006
126
76
216
321
345
7,920
7,855
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Notes to the Consolidated Financial Statements
The exposure to credit risk by segment for trade and other receivables excluding prepayments is as follows:
Liquidity risk
Liquidity risk is the risk that HEINEKEN will have difficulties meeting payment obligations associated with its
financial liabilities, like payment of financial debt or trade payables when they are due. HEINEKEN’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient funds to meet its liabilities
when due without incurring unacceptable losses. HEINEKEN has strict credit policies in place, which help
safeguard liquidity especially in macro-economic downturn.
HEINEKEN remains focused on ensuring sufficient access to capital markets to finance long-term growth and to
refinance maturing debt obligations. HEINEKEN seeks to align the maturity profile of its long-term debts with its
forecasted cash flow generation. More information about borrowing facilities is presented in note 11.3.
Furthermore, strong cost and cash management, as well as controls over investment proposals, are in place.
Contractual maturities
The following table presents an overview of the expected timing of cash-out and inflows of non-derivative
financial liabilities and derivative financial assets and liabilities, including interest payments.
In millions of €
Financial liabilities
Carrying
amount
Contractual
cash flows
Less than
1 year
1-5 years
2023
More than
5 years
Interest-bearing liabilities
(16,972)
(19,955)
(4,322)
(6,711)
(8,922)
Lease liabilities
(1,267)
(1,756)
(350)
(704)
(702)
Trade and other payables and returnable
packaging deposits (excluding interest payable,
dividends and including non-current part)
Derivative financial assets and (liabilities)
Cross-currency interest rate swaps
Forward exchange contracts
Commodity derivatives
Other derivatives
Total
Financial liabilities
Interest-bearing liabilities
Lease liabilities
Trade and other payables and returnable
packaging deposits (excluding interest payable,
dividends and including non-current part)
Derivative financial assets and (liabilities)
Cross-currency interest rate swaps
Forward exchange contracts
Commodity derivatives
Other derivatives
Total
(9,749)
(9,749)
(9,698)
(49)
(2)
3
(55)
(10)
17
(50)
(99)
(10)
32
(7)
(99)
(10)
5
(27)
(16)
—
—
15
—
—
12
(28,033)
(31,587)
(14,481)
(7,476)
(9,630)
2022
(15,135)
(17,749)
(3,524)
(5,815)
(8,410)
(1,241)
(1,682)
(376)
(670)
(636)
(9,639)
(9,639)
(9,596)
(40)
(3)
17
24
(79)
36
(31)
(23)
(82)
74
(6)
(25)
(75)
9
(19)
2
(7)
35
(6)
—
—
30
(26,017)
(29,132)
(13,593)
(6,514)
(9,025)
For more information on the derivative assets and liabilities, refer to note 11.6.
In millions of €Exposure to credit risk 1,3981,6651,6781,253664365506522241201EuropeAmericasAfrica, Middle East & Eastern EuropeAsia PacificHead Office & Other/eliminations2023202201,0002,0003,0004,0005,000
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Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity
prices and equity prices, will adversely affect HEINEKEN’s income or the value of its financial instruments. In
2023, HEINEKEN continued to witness volatility in financial and commodity markets. The objective of
HEINEKEN's market risk management is to manage and control market risk exposures within acceptable
boundaries.
HEINEKEN enters into derivatives and other financial liabilities to manage market risks. Generally, HEINEKEN
seeks to apply hedge accounting or establish natural hedges to minimise the impact of market risks in profit or
loss. Foreign currency, interest rate and commodity hedging operations are governed by internal policies and
rules.
Foreign currency risk
HEINEKEN is exposed to:
– Transactional risk on (future) sales, working capital, (future) purchases, deposits, borrowings and dividends
Introduction
denominated in a currency other than the respective functional currencies of HEINEKEN entities
– Translational risk, which is the risk resulting from the translation of foreign operations into the reporting currency
of HEINEKEN
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The main currencies that give rise to this risk are the US Dollar, Mexican Peso, Brazilian Real, British Pound,
Vietnamese Dong, Nigerian Naira and Euro. In 2023, the transactional foreign exchange risk was hedged in line
with the hedging policy to the extent possible. Mainly due to the development of the Nigerian Naira, the overall
transactional impact was negative, whereas the translational impact was slightly positive for HEINEKEN.
In managing foreign currency risk, HEINEKEN aims to ensure the availability of foreign currencies and to reduce
the impact of short-term fluctuations on earnings. Over the longer term, however, permanent changes in foreign
exchange rates and the availability of foreign currencies, especially in emerging markets, will have an impact on
profit.
HEINEKEN hedges up to 90% of its net US Dollar export cash flows on the basis of rolling cash flow forecasts of
sales and purchases. Material cash flows in other foreign currencies are also hedged on the basis of rolling cash
flow forecasts. For this hedging, HEINEKEN mainly uses forward exchange contracts. The majority of the forward
exchange contracts have maturities of less than one year after the balance sheet date.
HEINEKEN has a clear policy on hedging transactional exchange risks. Translation exchange risks are hedged to
a limited extent, as the underlying currency positions are generally considered to be long-term in nature. The
result of the hedging of translation risk, using net investment hedges is recognised in the translation reserve, as
can be seen in the consolidated statement of comprehensive income.
Other
Information
HEINEKEN's policy is to hedge material recognised transactional exposure like trade payables, receivables,
borrowings and declared dividends. For material unrecognised transactional exposures like forecasted sales in
foreign currencies, HEINEKEN hedges the exposure between agreed percentages according to the policy.
It is HEINEKEN’s policy to provide intra-HEINEKEN financing in the functional currency of subsidiaries where
possible to prevent foreign currency exposure on a subsidiary level. The resulting exposure at Group level is
hedged by means of foreign-currency denominated external debts and by forward exchange contracts. Intra-
HEINEKEN financing in foreign currencies is mainly in British Pound, US Dollar and Swiss Franc. In some cases,
HEINEKEN elects to treat intra-HEINEKEN financing with a permanent character as equity and does not hedge
the foreign currency exposure.
HEINEKEN has financial liabilities in foreign currencies like US Dollar and British Pound to hedge local operations,
which generate cash flows that have the same or closely correlated functional currencies. The corresponding
interest on these liabilities is also denominated in currencies that match the cash flows generated by the underlying
operations of HEINEKEN.
In respect of other monetary assets and liabilities denominated in currencies other than the functional currencies
of HEINEKEN, HEINEKEN ensures that its net exposure is kept to an acceptable level by buying or selling foreign
currencies at spot rates when necessary to address short-term imbalances.
Exposure to foreign currency risk
Based on notional amounts, HEINEKEN's transactional exposure to the US Dollar and Euro as at 31 December is
as follows. The Euro column relates to transactional exposure to the Euro within subsidiaries which are reporting
in other currencies. The amounts below include intra-HEINEKEN cash flows.
In millions
Financial assets
Financial liabilities
Gross balance sheet exposure
Estimated forecast sales next year
2023
USD
3,506
EUR
146
2022
USD
4,106
EUR
213
(2,373)
(3,323)
(2,730)
(4,480)
(2,227)
183
(2,517)
(374)
180
1,221
171
1,258
Estimated forecast purchases next year
(2,559)
(2,590)
(2,626)
(2,612)
Gross exposure
(4,606)
(1,186)
(4,972)
(1,728)
Net notional amounts foreign exchange contracts
573
697
426
1,057
Net exposure
Sensitivity analysis
Equity
Profit/(Loss)
(4,033)
(489)
(4,546)
(671)
(136)
(37)
66
(13)
(172)
(67)
53
(10)
The sensitivity analysis above shows the impact on equity and profit of a 10% strengthening of the US Dollar
against the Euro or, in the case of the Euro, a strengthening of the Euro against all other currencies as at 31
December 2023. This analysis assumes that all other variables, in particular interest rates, remain constant. In
the case of a 10% weakening, the effects are equal but with an opposite effect.
Interest rate risk
Interest rate risk is the risk that changes in market interest rates affect the fair value or cash flows of a financial
instrument. The most significant interest rate risk for HEINEKEN relates to borrowings (note 11.3). The increasing
interest rate environment during 2023 resulted in a higher average effective interest rate on the net debt
position of HEINEKEN (note 11.3).
By managing interest rate risk, HEINEKEN aims to reduce the impact of short-term fluctuations on earnings. Over
the longer term, however, permanent changes in interest rates will have an impact on profit.
HEINEKEN opts for a mix of fixed and variable interest rate financial instruments like bonds, commercial paper
and bank loans, combined with the use of derivative interest rate instruments. Currently, HEINEKEN’s interest
rate position is more weighted towards fixed than floating. Interest rate derivative instruments that can be used
are (cross-currency) interest rate swaps, forward rate agreements, caps and floors.
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Interest rate risk – profile
At the reporting date, the interest rate profile of HEINEKEN’s interest-bearing financial instruments is as follows:
In millions of €
Fixed rate instruments
Financial assets
Financial liabilities
Cross-currency interest rate swaps
Variable rate instruments
Financial assets
Financial liabilities
Cross-currency interest rate swaps
2023
2022
222
171
(16,304)
(14,285)
—
469
(16,082)
(13,645)
2,765
(1,935)
—
830
3,186
(2,092)
(463)
631
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates constantly applied during the reporting period would not have a
material impact on equity and profit or loss.
Commodity price risk
Commodity price risk is the risk that changes in the prices of commodities will affect HEINEKEN’s cost. The
objective of commodity price risk management is to manage and control commodity risk exposures within
acceptable parameters, giving forward guidance of key input costs to allow for business planning. The main
commodity exposure relates to the purchase of aluminium cans, glass bottles, malt and utilities. Commodity
price risk is in principle mitigated by negotiating fixed prices in supplier contracts with various contract durations.
Another method to mitigate commodity price risk is by entering into commodity derivatives. HEINEKEN enters
into commodity derivatives for hedging aluminium and natural gas, and to a certain extent other derivatives for
commodities like fuel, corn and sugar. HEINEKEN does not enter into commodity contracts other than to meet
HEINEKEN’s expected usage and sale requirements.
Sensitivity analysis for aluminium hedges
Despite the increased prices of aluminium, a 10% change in the market price of aluminium would not have a
material impact on equity.
11.6 Derivative financial instruments
HEINEKEN uses derivatives in order to manage market risks. Refer to the table below for the fair value of
derivatives recorded on the balance sheet of HEINEKEN as per reporting date:
In millions of €
Current
Non-current1
Asset
58
33
91
2023
Liability
(132)
(4)
(136)
Asset
70
56
126
2022
Liability
(119)
(9)
(128)
1 Non-current derivative assets and liabilities are part of 'Other non-current assets' (note 8.5) and 'Other non-current liabilities' respectively.
Generally, HEINEKEN seeks to apply hedge accounting or make use of natural hedges in order to minimise profit
and loss or cash flow volatility. Refer to the table below for derivatives that are used in hedge accounting:
In millions of €
No hedge accounting - Other
Cash flow hedge - Forwards
Cash flow hedge - Commodity forwards
Fair value hedge - CCIRS
Net investment hedge - CCIRS
Net investment hedge - Forwards
Asset
40
25
23
—
3
—
2023
Liability
(32)
(71)
(33)
—
—
—
Asset
59
46
2
4
13
2
2022
Liability
(6)
(40)
(81)
—
—
(1)
91
(136)
126
(128)
Cash flow hedges
The hedging of future, highly probable forecasted transactions are designated as cash flow hedges. Cash flow
hedges are entered into to cover commodity price risk and transactional foreign exchange risk.
Net investment hedges
HEINEKEN hedges its investments in certain subsidiaries by entering into local currency-denominated
borrowings, forward contracts and cross-currency interest rate swaps, which mitigate the foreign currency
translation risk arising from the subsidiaries net assets. These borrowings, forward contracts and swaps are
designated as net investment hedges and fully effective, as such, there was no ineffectiveness recognised in
profit and loss in 2023 (2022: nil). As at 31 December 2023, the fair value of these borrowings was €120 million
(2022: €33 million), the market value of forward contracts was €0 million (2022: €1 million positive) and the
market value of these swaps was €3 million positive (2022: €13 million positive).
Fair value hedges
HEINEKEN had entered into several cross-currency interest rate swaps (CCIRS) which were designated as fair
value hedges to hedge the foreign exchange rate risk on the principal amount and future interest payments of
certain US Dollar borrowings. The underlying borrowing was repaid and the cross-currency interest rate swaps
were settled in April 2023.
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Hedge effectiveness
Hedge effectiveness is determined at the start of the hedge relationship and periodically through a prospective
effectiveness assessment to ensure that an economic relationship exists between the hedged item and the
hedging instrument. This assessment is done qualitatively by comparing the critical terms, and if needed
quantitative assessments are done using hypothetical derivatives. For the current hedges, no hedge
ineffectiveness is expected.
Accounting policies
Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives
depends on whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net
investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as
liabilities. Refer to note 13.1 for fair value measurements.
Virtual power purchase agreements
Virtual power purchase agreements (such as power purchase agreements with a net settlement mechanism and
no physical delivery of energy) are accounted for at fair value and are included as part of derivatives assets and
liabilities. Reference is made to note 6.3 for the accounting policy on power purchase agreements where the
own-use exemption can be applied.
Cash flow hedge
Changes in the fair value of the hedging instrument are recognised in other comprehensive income and
presented in the hedging reserve within equity to the extent that the hedge is effective. The ineffective part is
recognised as other net finance income/(expense). When the hedged risk impacts the profit or loss, the amounts
previously recognised in other comprehensive income are recycled through other comprehensive income and
transferred to the same item in the profit or loss as the hedged item. When the hedged risk subsequently results
in a non-financial asset or liability (e.g. inventory or P,P&E), the amount previously recognised in the cash flow
hedge reserve is directly included in its carrying amount and does not affect other comprehensive income.
Fair value hedge
The fair value changes of derivatives used in fair value hedges are recognised in profit or loss.
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Net investment hedge
The fair value changes of derivatives used in net investment hedges are recognised in other comprehensive
income and presented within equity in the translation reserve. Any ineffectiveness is recognised in profit or loss.
Other
Information
12. Tax
12.1 Income tax expense
Recognised in profit or loss
In millions of €
Current tax expense
Current year
Under/(over) provided in prior years
Deferred tax expense
Origination and reversal of temporary differences, tax losses and tax credits
De-recognition/(recognition) of deferred tax assets
Effect of changes in tax rates
Under/(over) provided in prior years
Total income tax expense in profit or loss
Reconciliation of the effective tax rate
In millions of €
Profit before income tax
Share of profit of associates and joint ventures
2023
2022
982
(10)
972
(147)
(674)
(4)
(26)
(851)
121
2023
2,522
(218)
1,056
(12)
1,044
78
(11)
12
8
87
1,131
2022
4,170
(223)
Profit before income tax excluding share of profit of associates and joint
ventures
2,304
3,947
Income tax using the Company’s domestic tax rate
Effect of tax rates in foreign jurisdictions
Effect of non-deductible expenses
Effect of tax incentives and exempt income
De-recognition/(recognition) of deferred tax assets
Effect of unrecognised current year losses
Effect of changes in tax rates
Withholding taxes
Under/(over) provided in prior years
Other reconciling items
%
25.8
(0.7)
11.9
(7.8)
(29.3)
2.4
(0.2)
4.0
(1.5)
0.6
5.2
2023
594
(15)
275
(181)
(674)
55
(4)
93
(36)
14
121
%
25.8
(0.4)
2.7
(2.6)
(0.3)
2.2
0.3
1.9
(0.1)
(0.8)
28.7
2022
1,018
(14)
105
(104)
(11)
86
12
74
(5)
(30)
1,131
The 2023 IFRS ETR is 5.2% (2022: 28.7%). The lower 2023 ETR includes the benefit of additional DTA
recognition in Brazil, partly offset by the non-deductible goodwill impairment for Heineken Beverages and the
loss on the Russia disposal. Last year’s ETR included the Russia impairment that is considered non-deductible for
tax purposes.
For the income tax impact on items recognised in other comprehensive income and equity, refer to note 12.3.
Of the total net deferred tax assets of €1,292 million as at 31 December 2023 (2022: €618 million), €72 million
(2022: €84 million) is recognised in respect of subsidiaries in various countries where there have been losses in
the current or preceding period. Management’s projections support the assumption that it is probable that the
results of future operations will generate sufficient taxable income to utilise these deferred tax assets. This
judgement is performed annually and based on budgets and business plans for the coming years, including
planned commercial initiatives.
No deferred tax liability has been recognised in respect of undistributed earnings of subsidiaries, joint ventures and
associates, with an impact of €743 million (2022: €573 million). This is because HEINEKEN is able to control the
timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the
foreseeable future.
Tax losses carried forward
HEINEKEN has tax losses carried forward of €4,011 million as at 31 December 2023 (2022: €3,802 million), out
of which €294 million (2022: €389 million) expires in the following five years, €162 million (2022: €158 million)
will expire after five years and €3,555 million (2022: €3,255 million) can be carried forward indefinitely. Deferred
tax assets have not been recognised in respect of tax losses carried forward of €1,076 million (2022: €2,470
million) as it is not probable that taxable profit will be available to offset these losses. Out of this €1,076 million
(2022: €2,470 million), €142 million (2022: €276 million) expires in the following five years, €13 million (2022:
€37 million) will expire after five years and €921 million (2022: €2,157 million) can be carried forward
indefinitely.
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OECD Pillar Two model rules
Since the Pillar Two legislation was not effective at the reporting date, HEINEKEN has no related current tax
exposure. HEINEKEN has calculated an expected exposure to the Pillar Two income taxes based on information
that is known or can be reasonably estimated to understand HEINEKEN’s exposure. Based on the 2023 numbers,
adjusted for the impact of one-off events, HEINEKEN does not expect a material exposure to Pillar Two income
taxes.
12.2 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following items:
In millions of €
Property, plant and equipment
Introduction
Intangible assets
Investments
Inventories
Borrowings
Post-retirement obligations
Provisions
Other items
Tax losses carried forward
Assets
Liabilities
Net
2023
162
42
81
63
399
209
396
320
854
2022
149
41
56
67
314
203
300
153
348
2023
2022
2023
(988)
(837)
(826)
2022
(688)
(2,166)
(2,052)
(2,124)
(2,011)
(7)
(36)
(1)
(30)
(9)
(5)
(12)
(2)
(19)
(13)
(210)
(211)
—
—
74
27
398
179
387
110
854
51
55
312
184
287
(58)
348
Tax assets/(liabilities)
2,526
1,631
(3,447)
(3,151)
(921)
(1,520)
Set-off of tax
(1,234)
(1,013)
1,234
1,013
—
—
Net tax assets/(liabilities)
1,292
618
(2,213)
(2,138)
(921)
(1,520)
In 2023, HEINEKEN approved a corporate restructuring plan to optimize the legal structure of Heineken Brazil,
and part of the plan was executed in 2023. As a result of this restructuring, previously unrecognised deferred tax
assets were recognised, amounting to €751 million. These assets mainly relate to tax losses carried forward. The
measurement of these deferred tax assets takes into account the recent tax law changes in Brazil, effective from
2024, which are expected to lead to higher taxable profits in future years. Furthermore, a number of mergers are
planned in future years resulting in a tax depreciable base, amounting to €403 million. No deferred tax asset was
recorded for this tax depreciable base in 2023 awaiting the respective mergers. Reassessment will take place at
the end of each reporting period.
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Notes to the Consolidated Financial Statements
Movement in deferred tax balances during the year
In millions of €
Property, plant and equipment
Intangible assets
Investments
Inventories
Borrowings
Post-retirement obligations
Provisions
Other items
Tax losses carried forward
Net tax assets/(liabilities)
In millions of €
Property, plant and equipment
Intangible assets
Investments
Inventories
Borrowings
Post-retirement obligations
Provisions
Other items
Tax losses carried forward
Net tax assets/(liabilities)
Hyperinflation
restatement to 1
January 2023
Changes in
consolidation
Hyperinflation
adjustment
Effect of
movements
in foreign
exchange
Recognised in
income
Recognised in
OCI/equity
Transfers
31 December
2023
(35)
(2)
—
(2)
—
—
—
—
—
(104)
(227)
(3)
(39)
—
(6)
7
1
2
(17)
(1)
—
(3)
—
—
—
—
—
46
48
5
1
93
(4)
10
(12)
(24)
163
(46)
(1)
83
21
15
(1)
(15)
81
192
521
851
—
—
—
—
20
—
(11)
(1)
7
19
(14)
—
1
(6)
—
2
(3)
8
7
(826)
(2,124)
74
27
398
179
387
110
854
(921)
(1,520)
(39)
(369)
(21)
Hyperinflation
restatement to 1
January 2022
Changes in
consolidation
Hyperinflation
adjustment
Effect of
movements
in foreign
exchange
Recognised in
income
Recognised in
OCI/equity
Transfers 31 December 2022
(54)
(1)
—
(5)
—
—
—
—
—
(1)
(60)
—
(1)
—
—
—
(4)
—
(66)
(9)
—
—
(1)
—
—
—
—
—
(10)
(14)
(3)
3
1
17
—
18
(22)
2
2
(23)
6
18
14
8
(9)
6
(15)
(93)
(88)
—
—
—
—
—
(19)
—
26
(1)
6
22
1
—
(2)
—
1
(2)
(9)
(26)
(15)
(688)
(2,011)
51
54
312
184
287
(57)
348
(1,520)
(1,289)
(60)
1 January 2023
(688)
(2,011)
51
54
312
184
287
(57)
348
1 January 2022
(609)
(1,954)
30
48
287
211
265
(33)
466
119
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
120
Notes to the Consolidated Financial Statements
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Accounting estimates and judgements
The tax legislation in the countries in which HEINEKEN operates is often complex and subject to interpretation.
In determining the current and deferred income tax position, judgement is required. New information may
become available that causes HEINEKEN to change its judgement regarding the adequacy of existing tax
liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a
determination is made.
Accounting policies
Income tax comprises current and deferred tax. Current tax is the expected income tax payable or receivable in
respect of taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance
sheet date, and any adjustment to income tax payable in respect of previous years.
HEINEKEN is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted in the
Netherlands and will come into effect from 1 January 2024. Under the legislation, a top-up tax for the difference
between the Global Anti-Base Erosion Rules (GloBE) effective tax rate per jurisdiction and the 15% minimum rate
is introduced. This top-up tax is considered an income tax in scope of IAS 12. HEINEKEN applies the exception to
recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income
taxes, as provided in the amendments to IAS 12 issued in May 2023.
Deferred tax is a tax payable or receivable in the future and is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
Deferred tax is not recognised on temporary differences related to:
– The initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss
– Investments in subsidiaries, associates and joint ventures to the extent that HEINEKEN is able to control the timing
of the reversal of the temporary differences and it is probable (>50% chance) that they will not reverse in the
foreseeable future
– The initial recognition of non-deductible goodwill
12.3 Income tax on other comprehensive income and equity
2023
Amount
before tax
Amount
net of tax
Amount
before tax
Tax
Tax
2022
Amount
net of tax
(85)
—
19
—
(66)
—
85
18
(22)
(3)
63
15
In millions of €
Items that will not be reclassified
to profit or loss:
Remeasurement of post-
retirement obligations1
Net change in fair value through
OCI investments
Items that may be subsequently
reclassified to profit or loss:
Currency translation differences
(288)
118
(170)
438
(1)
437
Change in fair value of net
investment hedges
Change in fair value of cash
flow hedges
Cash flow hedges reclassified to
profit or loss2
Net change in fair value through
OCI investments
Cost of hedging
Share of other comprehensive
income of associates/joint
ventures
Other comprehensive income/
(loss)
(28)
(179)
—
44
(28)
(62)
(135)
(178)
—
36
(62)
(142)
14
2
2
(2)
12
52
(14)
38
(1)
—
1
2
1
(1)
(1)
—
—
(1)
(75)
—
(75)
(46)
—
(46)
(637)
178
(459)
307
(5)
302
The amount of deferred tax provided is based on the expected manner of recovery or settlement of the carrying
amount of assets and liabilities, using tax rates (substantively) enacted, at year-end.
1 Refer to note 9.1.
2 An amount of €(53) million (2022: €10 million) relates to tax on realised hedge results from non-financial assets reported directly in equity.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available
against which they can be utilised.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different taxable entities which intend either to settle current tax liabilities and assets on a net basis or to realise
the assets and settle the liabilities simultaneously.
Current and deferred tax are recognised in the income statement (refer to note 12.1), except when it relates to a
business combination or for items directly recognised in equity or other comprehensive income (refer to note
12.3).
121
Heineken
N.V.
Annual
Report
2023
Notes to the Consolidated Financial Statements
13. Other
13.1 Fair value
In this note, more information is disclosed regarding the fair value and the different methods of determining
fair values.
Refer to the table below for detail of the determination of level 3 fair value measurements as at 31 December:
In millions of €
Balance as at 1 January
Fair value adjustments recognised in other comprehensive income
Financial instruments – hierarchy
The financial instruments included on the HEINEKEN statement of financial position are measured at either fair
value or amortised cost. To measure the fair value, HEINEKEN generally uses external valuations with market
inputs. The measurement of fair value can be subjective in some cases and may be dependent on inputs used in
the calculations. The different valuation methods are referred to as ‘hierarchies’ as described below.
Consolidation changes
Disposals
Fair value adjustments recognised in profit and loss
Balance as at 31 December
2023
158
(5)
36
(4)
(17)
168
2022
102
21
—
—
35
158
– Level 1 - The fair value is determined using quoted prices (unadjusted) in active markets for identical assets or
liabilities.
– Level 2 - The fair value is calculated using inputs other than quoted prices included within level 1 that are
Introduction
observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
– Level 3 - The fair value is determined using inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
The following table shows the carrying amounts and fair values of financial assets and liabilities according to
their fair value hierarchy.
Carrying amount
Fair value
Report
of the
Executive
Board
Report
of the
Supervisory
Board
In millions of €
Note
Fair value through OCI investments
8.4, 8.5
Non-current derivative assets
Current derivative assets
11.6
11.6
11.6
11.3
11.6
576
33
58
667
280
Level 1
429
—
—
429
34
(4)
—
(14,735)
(13,465)
(132)
—
(14,871)
(13,465)
11.3
(13,205)
(11,397)
Level 2
Level 3
—
12
58
70
88
(4)
(694)
(132)
(830)
(607)
147
21
—
168
158
—
—
—
—
—
Financial
Statements
Total 2023
Total 2022
Sustainability
Review
Other
Information
Non-current derivative liabilities
Borrowings1
Current derivative liabilities
Total 2023
Total 2022
1 Borrowings excluding lease liabilities, deposits, bank overdrafts and other interest-bearing liabilities.
During the period ended 31 December 2023, the shares acquired in Heineken Holding N.V. (refer to note 13.3)
have been included in the line ‘Fair value through OCI investments’. The fair value is based on the share price
(level 1 fair value hierarchy).
The fair values for the level 3 fair value through OCI investments are based on the financial performance of the
investments and the market multiples of comparable equity securities.
Accounting estimates
The different methods applied by HEINEKEN to determine the fair value require the use of estimates.
Investments in equity securities
The fair value of financial assets at fair value through profit or loss and fair value through OCI is determined by
reference to their quoted closing bid price at the reporting date or, if unquoted, determined using an appropriate
valuation technique. These valuation techniques maximise the use of observable market data where available.
Derivative financial instruments
The fair value of derivative financial instruments is based on their listed market price, if available. If a listed
market price is not available, fair value is in general estimated by discounting the difference between the cash
flows based on contractual price and the cash flows based on the current price for the residual maturity of the
contract using observable interest yield curves, basis spread and foreign exchange rates. These calculations are
tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from
the counterparty. Fair values include the instrument’s credit risk and adjustments to take account of the credit
risk of the HEINEKEN entity and counterparty when appropriate.
Non-derivative financial instruments
Fair value, which is determined for disclosure purposes or when fair value hedge accounting is applied, is
calculated based on the present value of future principal and interest cash flows, discounted at the market rate
of interest at the reporting date. Fair values include the instrument’s credit risk and adjustments to take account
of the credit risk of the HEINEKEN entity and counterparty when appropriate.
122
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Notes to the Consolidated Financial Statements
13.2 Off-balance sheet commitments
The raw materials purchase contracts mainly relate to malt, bottles and cans which are used in the production
and sale of finished products.
In millions of €
Total 2023
Less than
1 year
1-5 years
More than
5 years
Total 2022
Property, plant and equipment ordered
Raw materials purchase contracts
Marketing and merchandising commitments
Other off-balance sheet obligations
836
13,442
982
2,197
833
4,867
365
498
3
7,826
614
860
—
749
3
839
538
14,588
505
2,395
Off-balance sheet obligations
17,457
6,563
9,303
1,591
18,026
Undrawn committed bank facilities
4,188
648
3,540
—
3,970
In 2022, other off-balance sheet obligations included €0.4 billion of cash commitment concerning the offer to
acquire Distell Group Holdings Limited.
Furthermore, other off-balance sheet obligations include energy, distribution and service contracts.
Committed bank facilities are credit facilities on which generally a commitment fee is paid as compensation for
the bank’s requirement to reserve capital. The bank is legally obliged to provide the facility under the terms and
conditions of the agreement.
13.3 Related parties
Identification of related parties
The following parties are considered to be related to Heineken N.V.:
– Key management personnel: the Executive Board and the Supervisory Board
– Parent company Heineken Holding N.V. and ultimate controlling party Mrs. de Carvalho-Heineken (refer to
'Shareholder Information')
– Associates and joint ventures of Heineken N.V.
– Shareholder with significant influence Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) until 17 February
2023.
– HEINEKEN pension funds (refer to note 9.1)
– Employees of HEINEKEN (refer to note 6.4)
In 2023, HEINEKEN purchased approximately 10.3 million shares in HEINEKEN for €943 million and
approximately 5.2 million shares in Heineken Holding N.V. for €390 million from FEMSA as part of the
accelerated bookbuild offering.
The shares in HEINEKEN are recognised as treasury shares, in reserve for own shares (refer to note 11.4). The
shares in Heineken Holding N.V. are recognised as fair value through OCI investments and included in the line
'Equity instruments' in the statement of financial position (refer to note 8.4).
Following the completion of the purchase, FEMSA no longer holds any shares in HEINEKEN except for any shares
retained underlying FEMSA’s outstanding Bonds, exchangeable into ordinary shares of Heineken Holding N.V.,
and has ceased to be a shareholder with significant influence (2022: shareholder with significant influence).
Accounting policies
Off-balance sheet commitments are reported on an undiscounted basis.
Raw materials purchase contracts
Raw material purchase contracts include long-term purchase contracts with suppliers in which prices are fixed or
will be agreed upon based upon predefined price formulas.
Key management remuneration
In millions of €
Executive Board
Supervisory Board
Total
2023
7
1
8
2022
15
2
17
Executive Board
The remuneration of the members of the Executive Board consists of a fixed component and a variable
component. The variable component is made up of a Short-term incentive (STI) and a Long-term incentive (LTI).
The STI is based on financial and operational measures (75%) and on individual leadership measures (25%) as
set by the Supervisory Board at the beginning of the year. Refer to note 6.5 for information related to the LTI
component. The separate Remuneration Report is stated on pages 61–73.
123
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Notes to the Consolidated Financial Statements
As at 31 December 2023, Mr. R.G.S. van den Brink held 50,721 Company shares and Mr. H.P.J van den Broek held
28,846 Company shares (2022: Mr. R.G.S. van den Brink 22,221 and Mr. H.P.J van den Broek 14,590).
Supervisory Board
The individual members of the Supervisory Board received the following remuneration:
In thousands of €
Fixed salary
Short-term incentive
Matching share entitlement
Long-term incentive
Extraordinary share award
Pension contributions
Other emoluments
Total
2023
R.G.S. van
den Brink
H.P.J. van
den
Broek
R.G.S. van
den Brink
H.P.J. van
den Broek
Total
1,300
884
2,184
1,250
850
346
155
168
75
514
2,940
1,428
230
1,291
627
1,725
1,036
2,761
3,133
1,347
—
323
30
487
252
—
487
575
30
—
1,385
301
29
157
—
2022
Total
2,100
4,368
1,918
4,480
1,385
458
29
3,879 2,902 6,781 8,944 5,794 14,738
The matching share entitlements for each year are based on the performance in that year. The Executive Board
members receive 25% of their STI pay in (investment) shares. In addition, they have the opportunity to indicate
before year-end whether they wish to receive up to another 25% of their STI in (investment) shares. All (investment)
shares are restricted for sale for five calendar years, after which they are matched 1:1 by (matching) shares. For
2023 the Executive Board members elected to receive additional (investment) shares, hence the ‘Matching share
entitlement’ in the table above is based on a 50% investment. The corresponding matching shares vest
immediately and as such a fair value of €0.2 million was recognised in the 2023 income statement. The matching
share entitlements are not dividend-bearing during the five-calendar year holding period of the investment shares.
Therefore, the fair value of the matching share entitlements has been adjusted for missed expected dividends by
applying a discount based on the dividend policy and vesting period.
In thousands of €
J.M. Huët
J.A. Fernández Carbajal1
M. Das
M.R. de Carvalho
J.G. Astaburuaga Sanjinés2
P. Mars-Wright
M. Helmes
R.L. Ripley
N.K. Paranjpe
F.J. Camacho Beltrán3
I.H. Arnold4
L. Hijmans van den Bergh5
B. Pardo5
Total
2023
231
33
130
141
—
144
146
148
119
28
55
83
91
1,349
2022
225
166
130
135
55
144
133
148
110
100
110
—
—
1,456
1 Stepped down on 15 February 2023.
2 Stepped down on 21 April 2022.
3 Appointed on 21 April 2022, stepped down on 15 February 2023.
4 Stepped down on 20 April 2023.
5 Appointed on 20 April 2023.
Mr. J.M. Huët held 3,719 shares of Heineken Holding N.V. as at 31 December 2023 (2022: 3,719 shares). Mr. M.R. de
Carvalho held 100,008 shares of Heineken N.V. as at 31 December 2023(2022: 100,008 shares). As at 31 December
2023 and 2022, the Supervisory Board members did not hold any of the Company’s bonds or option rights. Mr. M.R.
de Carvalho held 100,008 shares of Heineken Holding N.V. as at 31 December 2023 (2022: 100,008 shares).
Heineken Holding N.V.
In 2023, an amount of €1.3 million (2022: €1.6 million) was paid to Heineken Holding N.V. for management
services for HEINEKEN.
This payment is based on an agreement of 1977 as amended in 2001, providing that Heineken N.V. reimburses
Heineken Holding N.V. for its costs.
As at 31 December 2023, HEINEKEN holds approximately 5.2 million shares in Heineken Holding N.V.
Other related party transactions
In millions of €
Sales
Purchase
Accounts receivables
Accounts payables and other liabilities
Associates & Joint Ventures
2023
563
198
166
19
2022
504
278
142
35
FEMSA1
2023
74
33
—
—
2022
711
180
141
95
Total
2023
637
231
166
19
2022
1,215
458
283
130
1 Sales and purchases until 17 February 2023 when FEMSA ceased to be a shareholder with significant influence.
In addition, HEINEKEN has purchased shares in HEINEKEN and Heineken Holding N.V. from FEMSA as
mentioned in section ‘Identification of related parties’.
124
Heineken
N.V.
Annual
Report
2023
Notes to the Consolidated Financial Statements
13.4 HEINEKEN entities
Control of HEINEKEN
The shares of the Company are traded on Euronext Amsterdam, where the Company is included in the main
AEX Index. Heineken Holding N.V. Amsterdam has an interest of 50.005% in the issued capital of the Company
and consolidates the financial information of the Company.
A declaration of joint and several liability pursuant to the provisions of Section 403, Part 9, Book 2, of the Dutch
Civil Code has been issued with respect to legal entities established in the Netherlands. The list of the legal
entities for which the declaration has been issued is disclosed in the Heineken N.V. stand-alone financial
statements.
Pursuant to the provisions of Section 357 of the Republic of Ireland Companies Act 2014, the Company
irrevocably guarantees, in respect of the financial year from 1 January 2023 up to and including 31 December
2023, the liabilities referred to in Schedule 3 of the Republic of Ireland Companies Act 2014 of the wholly-owned
subsidiary companies Heineken Ireland Limited, Heineken Ireland Sales Limited, The West Cork Bottling
Company Limited, Western Beverages Limited, Beamish & Crawford Limited, Comans Beverages Limited and
Nash Beverages Limited.
Significant subsidiaries
Set out below are HEINEKEN’s significant subsidiaries at 31 December 2023. The subsidiaries as listed below are
held by the Company and the proportion of ownership interests held equals the proportion of the voting rights
held by HEINEKEN. The disclosed significant subsidiaries represent the largest subsidiaries and represent an
approximate total revenue of €21 billion and total asset value of €35 billion and are structural contributors to the
business.
Apart from the acquisition of the controlling stake in NBL and Distell (combined with Heineken South Africa into
Heineken Beverages, refer to note 10.1), the sale of the Russia disposal group classified as held for sale (refer to
note 10.2) and the sale of Vrumona (refer to note 10.1), there were no significant changes to the HEINEKEN
structure and ownership interests.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Heineken International B.V.
Heineken Brouwerijen B.V.
Heineken Nederland B.V.
Cuauhtémoc Moctezuma Holding, S.A. de C.V.
Cervejarias Kaiser Brasil Ltda.
Bavaria Ltda.
Heineken France S.A.S.
Nigerian Breweries Plc.
Heineken USA Inc.
Heineken UK Ltd
Heineken España S.A.
Heineken Italia S.p.A.
Brau Union Österreich AG
Grupa Żywiec S.A.
Heineken Vietnam Brewery Limited Company
SCC - Sociedade Central de Cervejas e Bebidas S.A.
United Breweries Limited
Country of
incorporation
The Netherlands
The Netherlands
The Netherlands
Mexico
Brazil
Brazil
France
Nigeria
United States
United Kingdom
Spain
Italy
Austria
Poland
Vietnam
Portugal
India
Heineken Beverages (South Africa) Proprietary Limited
South Africa
13.5 Subsequent events
Percentage of ownership
2023
100.0
100.0
100.0
100.0
100.0
100.0
100.0
56.7
100.0
100.0
99.8
100.0
100.0
100.0
60.0
100.0
61.5
65.0
2022
100.0
100.0
100.0
100.0
100.0
100.0
100.0
56.7
100.0
100.0
99.8
100.0
100.0
99.3
60.0
100.0
61.5
—
The share price of CR Beer decreased in the period after 31 December 2023. The decrease in the share price is
not considered a significant or prolonged decline in the fair value of the investment below its cost.
125
Heineken N.V. Income Statement
For the year ended 31 December
Heineken
N.V.
Annual
Report
2023
In millions of €
Personnel expenses
Total other expenses
Interest income
Interest expenses
Other net finance income/(expenses)
Net finance expenses
Share of profit of participating interests, after income tax
Profit before income tax
Income tax income/(expense)
Profit
A2
A2
2023
(8)
(8)
188
(392)
67
(137)
2,408
2,263
41
2,304
2022
(17)
(17)
43
(318)
(184)
(459)
3,047
2,571
111
2,682
For more details on personnel expenses, refer to note 13.3 of the consolidated financial statements, respectively.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
126
Heineken N.V. Balance Sheet
Before appropriation of results
For the year ended 31 December
In millions of €
Note
2023
2022
In millions of €
Note
Investments in participating interests
A.1
34,799
32,363
Issued capital
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Other investments
Deferred tax assets
Total financial fixed assets
Trade and other receivables
Current tax assets
Cash and cash equivalents
Total current assets
398
13
13
35
Share premium
Translation reserve
35,210
32,411
Hedging reserve
14
29
2
45
79
—
2
81
Cost of hedging reserve
Fair value reserve
Other legal reserves
Reserve for own shares
Retained earnings
Net profit
Total shareholders’ equity
Borrowings
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Borrowings
Trade and other payables
Total current liabilities
Total liabilities
Total assets
35,255
32,492
Total shareholders’ equity and liabilities
2023
922
2,701
(3,705)
(14)
(7)
71
1,980
(966)
16,770
2,304
20,056
2022
922
2,701
(3,619)
(47)
(9)
70
1,242
(60)
15,669
2,682
19,551
A.2
12,750
11,687
1
8
5
10
12,759
11,702
A.2
1,959
481
2,440
15,199
35,255
1,075
164
1,239
12,941
32,492
127
Heineken N.V. Shareholders' Equity
Heineken
N.V.
Annual
Report
2023
In millions of €
Balance as at 1 January 2022
Profit
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Realised hedge results from non-financial assets
Transfer to/from retained earnings
Dividends to shareholders
Purchase own shares or contributions received from NCI shareholders
Introduction
Own shares delivered
Share-based payments
Report
of the
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Board
Report
of the
Supervisory
Board
Acquisition/disposal of non-controlling interests without losing control
Hyperinflation impact on participating interest
Changes in consolidation
Balance as at 31 December 2022
In millions of €
Balance as at 1 January 2023
Profit
Financial
Statements
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Realised hedge results from non-financial assets
Sustainability
Review
Transfer to/from retained earnings
Dividends to shareholders
Purchase own shares or contributions received from NCI shareholders
Other
Information
Own shares delivered
Share-based payments
Acquisition/disposal of non-controlling interests without losing control
Hyperinflation impact on participating interest
Changes in consolidation
Balance as at 31 December 2023
Share
capital
922
Share
premium
2,701
Translation
reserve
(4,003)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
384
—
384
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Hedging
reserve
56
—
(103)
(103)
—
—
—
—
—
—
—
—
—
(8)
—
(1)
(1)
—
—
—
—
—
—
—
—
—
Cost of
hedging
reserve
Fair value
reserve
Other legal
reserves
1,128
208
—
Reserve for
own shares
(37)
—
—
56
—
14
Retained
earnings
13,217
Net profit/
(loss)
3,324
Shareholders'
equity
17,356
(208)
2,682
63
—
14
208
—
(145)
2,682
—
—
—
—
—
—
—
—
—
—
(94)
—
—
—
—
—
—
—
—
—
—
(43)
20
—
—
—
—
—
—
3,418
(3,324)
(840)
—
(20)
49
(373)
361
2
—
—
—
—
—
—
—
2,682
357
3,039
—
—
(840)
(43)
—
49
(373)
361
2
922
2,701
(3,619)
(47)
(9)
70
1,242
(60)
15,669
2,682
19,551
Share
capital
Share
premium
Translation
reserve
Hedging
reserve
Cost of
hedging
reserve
922
2,701
(3,619)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(86)
(86)
—
—
—
—
—
—
—
—
—
(47)
—
(123)
(123)
156
—
—
—
—
—
—
—
—
(9)
—
2
2
—
—
—
—
—
—
—
—
—
Fair value
reserve
Other legal
reserves
Reserve for
own shares
Retained
earnings
Net profit/
(loss)
Shareholders'
equity
70
1,242
(60)
15,669
2,682
19,551
—
1
204
—
—
—
(204)
2,304
(66)
—
1
204
—
(270)
2,304
—
—
—
—
—
—
—
—
—
—
534
—
—
—
—
—
—
—
—
—
—
(943)
37
—
—
—
—
—
—
2,148
(2,682)
(1,080)
—
(37)
2
(214)
203
349
—
—
—
—
—
—
—
2,304
(272)
2,032
156
—
(1,080)
(943)
—
2
(214)
203
349
922
2,701
(3,705)
(14)
(7)
71
1,980
(966)
16,770
2,304
20,056
For more details on reserves, refer to note 11.4 of the consolidated financial statements. For more details on share-based payments, refer to note 6.5 of the consolidated financial statements.
128
Heineken
N.V.
Annual
Report
2023
Notes to the Heineken N.V. Financial Statements
Reporting entity
The Company financial statements of Heineken N.V. (the ‘Company’) are included in the consolidated financial
statements of Heineken N.V.
Basis of preparation
The Company financial statements have been prepared in accordance with the provisions of Part 9, Book 2, of
the Dutch Civil Code. The Company uses the option of Article 362.8 of Part 9, Book 2, of the Dutch Civil Code to
prepare the Company financial statements, using the same accounting policies as in the consolidated financial
statements. Valuation is based on recognition and measurement requirements of IFRS as adopted by the EU as
explained in the notes to the consolidated financial statements.
Accounting policies
Introduction
Shareholders’ equity
The translation reserve and other legal reserves are recognised in accordance with, the Dutch Civil Code.
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
A. Company disclosures
A.1 Investments
The below table provides an overview of the movements of the investments during the year:
In millions of €
Balance as at 1 January 2023
Profit of participating interests
Dividend declared by participating interests
Effect of movements in exchange rates
Changes in hedging and fair value adjustments
Actuarial gains/(losses)
Acquisition/disposal of non-controlling interests without a
change in control
Investments/(repayments)
Hyperinflation impact on participating interest
Changes in consolidation
Other movements
Participating
interests
Loans to
participating
interests
23,671
2,408
(1,027)
(71)
29
(66)
(214)
203
349
8,692
—
1,027
—
—
—
—
Total
32,363
2,408
—
(71)
29
(66)
(214)
(202)
(202)
—
—
—
203
349
—
Balance as at 31 December 2023
25,282
9,517
34,799
Balance as at 1 January 2022
Profit of participating interests
Dividend declared by participating interests
Effect of movements in exchange rates
Changes in hedging and fair value adjustments
Actuarial gains/(losses)
Acquisition/disposal of non-controlling interests without a
change in control
Investments/(repayments)
Hyperinflation impact on participating interest
Other movements
21,089
9,906
3,047
(889)
364
(88)
62
(373)
86
361
12
—
889
—
—
—
—
(2,103)
—
—
30,995
3,047
—
364
(88)
62
(373)
(2,017)
361
12
Balance as at 31 December 2022
23,671
8,692
32,363
For disclosures of significant direct and indirect participating interests, refer to notes 10.3 and 13.4 of the
consolidated financial statements.
A declaration of joint and several liability pursuant to the provisions of Section 403, Part 9, Book 2, of the Dutch
Civil Code has been issued with respect to the following legal entities established in the Netherlands:
Accounting policies
Investments in other entities are measured on the basis of the equity method. The share of profit of these
investments is the Company's share of the investments' results. Results on transfers of assets and liabilities
between the Company and its participating interests are eliminated.
The Company shall eliminate any expected credit losses on intercompany loans or receivables against the book
value of the intercompany loan or receivable in accordance with Directive 100.107a of the Dutch Accounting
Standards Board.
129
Notes to the Heineken N.V. Financial Statements
Percentage of ownership
Heineken
N.V.
Annual
Report
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Introduction
Report
of the
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of the
Supervisory
Board
Financial
Statements
Heineken Nederlands Beheer B.V.
Heineken Group B.V.
Heineken Brouwerijen B.V.
Heineken CEE Investments B.V.
Heineken Nederland B.V.
Heineken International B.V.
Heineken Supply Chain B.V.
Heineken Global Procurement B.V.
Heineken Mexico B.V.
Amstel Brouwerij B.V.
Vrumona B.V.1
B.V. Beleggingsmaatschappij Limba
Brand Bierbrouwerij B.V.
Heineken Asia Pacific B.V.
Distilled Trading International B.V.
Premium Beverages International B.V.
De Brouwketel B.V.
Proseco B.V.
La Tropical Holdings B.V.
Heineken Export Americas B.V.
Amstel Export Americas B.V.
Heineken Brazil B.V.
Sustainability
Review
B.V. Panden Exploitatie Maatschappij PEM
Heineken Exploitatie Maatschappij B.V.
Hotel De L’Europe B.V.
Other
Information
Hotel De L’Europe Monumenten I B.V.
Hotel De L’Europe Monumenten II B.V.
Beerwulf B.V.
Roeminck Insurance N.V.
Heineken Belize B.V.
Heineken Netherlands Supply B.V.
Texelse Bierbrouwerij B.V.
Drankenhandel Wauters B.V.
Oedipus Brewing B.V.
Energie Conversie Maatschappij Bunnik B.V.1
1 Entity ceased to exist during 2023 following a disposal.
Country of incorporation
2023
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
n/a
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
n/a
2022
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
n/a
100 %
130
Heineken
N.V.
Annual
Report
2023
Notes to the Heineken N.V. Financial Statements
A.2 Borrowings
The borrowings of the Company comprise the following:
In millions of €
Unsecured bond issues
Commercial paper
Derivatives used for financing activities
Total
2023
2022
14,209
12,762
500
(3)
—
(17)
14,706
12,745
The average effective interest rate on the unsecured bonds as at 31 December 2023 was 2.5% (2022: 2.4%). As
at 31 December 2023, €7.5 billion (2022: €7.0 billion) of the outstanding bonds have a maturity longer than five
years.
Introduction
The other net finance income/expense for the year is due to the positive transactional foreign exchange effects
on foreign currency-denominated loans.
The interest income for the year is due to the increase in interest rates and the underlying loans to participating
interests.
During the year the movements in borrowings were as follows:
Unsecured bond
issues
Bank loans
Commercial
paper
Derivatives used
for financing
activities
Total
B. Other
B.1 Auditor fees
Fees for audit services include the audit of the financial statements of the Company and its subsidiaries. Fees for
other audit services include a review of interim financial statements, sustainability, subsidy and other audits. Fees
for tax services include tax compliance and tax advice. Fees for other non-audit services include agreed-upon
procedures and advisory services. Fees for tax and other non-audit services are related to the network outside the
Netherlands and are in accordance with local independence regulations.
In 2023 €13.9 million of fees are recognised in the consolidated financial statements for services provided by
Deloitte Accountants B.V. and its member firms and/or affiliates (2022: €11.4 million). In the overview below,
the breakdown per type of service is provided:
Deloitte
Accountants B.V.
Other Deloitte member
firms and affiliates
Total
In millions of €
2023
2022
2023
2022
Audit of HEINEKEN and its subsidiaries
Other audit services
Tax services
Other non-audit services
Total
3.5
0.4
—
—
3.1
0.3
—
—
8.7
0.3
0.1
0.9
7.6
0.2
—
0.2
2023
12.2
0.7
0.1
0.9
2022
10.7
0.5
—
0.2
3.9
3.4
10.0
8.0
13.9
11.4
12,762
—
—
(17)
12,745
Accounting policies
(82)
2,598
(1,083)
14
—
350
—
2,307
(350)
(1,807)
—
—
17
—
(3)
—
(65)
5,255
(3,243)
14
Fees for audit services are included in the other expenses in the consolidated financial statements (refer to note
6.3 of the consolidated financial statements for more information). These fees are recognised when the service
is provided.
Report
of the
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Board
Report
of the
Supervisory
Board
Financial
Statements
In millions of €
Balance as at 1
January 2023
Effects of movements of
exchange rates
Proceeds
(Re)payments
Other
Sustainability
Review
Balance as at 31
December 2023
14,209
—
500
(3)
14,706
Other
Information
Notes to the Heineken N.V. Financial Statements
B.2 Off-balance sheet commitments
In millions of €
Total 2023
Less than
1 year
1 – 5 years
More than
5 years
Total 2022
Undrawn committed bank facility
3,500
—
3,500
—
3,500
2023
2022
Third
parties
HEINEKEN
companies
Third
parties
HEINEKEN
companies
Declarations of joint and several liability
—
2,549
1,100
3,155
The legal entities to which the declarations of joint and several liability relate, are listed in note A.1. The
declarations include a conditional guarantee for the deficit of the defined benefit pension plan of HEINEKEN UK
(Scottish and Newcastle pension plan) as calculated in accordance with IAS 19. Through this guarantee,
Heineken N.V. is ultimately liable for the payments, including any potential recovery payments, to the pension
plan. Refer to note 9.1 of the consolidated financial statements for more information. In 2022, the declaration
under third parties related to a €1.1 billion guarantee issued by Heineken N.V in relation to the offer to acquire
Distell.
Fiscal unity
The Company is part of the fiscal unity of HEINEKEN in the Netherlands. As a result, the Company is liable for
the tax liability of the fiscal unity in the Netherlands.
B.3 Subsequent events
For subsequent events, refer to note 13.5 of the consolidated financial statements.
B.4 Other disclosures
Remuneration
Refer to note 13.3 of the consolidated financial statements for the remuneration and incentives of the Executive
Board and Supervisory Board.
Employees
In 2023, there was an average of 5 FTE (2022: 6 FTE).
Executive and Supervisory Board statement
The members of the Supervisory Board signed the financial statements in order to comply with their statutory
obligation pursuant to Article 2:101, paragraph 2, of the Dutch Civil Code.
The members of the Executive Board signed the financial statements in order to comply with their statutory
obligation pursuant to Article 2:101, paragraph 2, of the Dutch Civil Code and Article 5:25c, paragraph 2 sub c, of
the Financial Markets Supervision Act.
Amsterdam, 13 February 2024
Executive Board
Van den Brink
Van den Broek
Supervisory Board
Huët
Das
de Carvalho
Paranjpe
Mars-Wright
Helmes
Ripley
L. Hijmans vd Bergh
B. Pardo
131
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132
Raise the bar on sustainability and responsibility
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Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Brew a Better
World 2030
We are now three years into developing and
executing our Brew a Better World 2030 ambitions.
They are increasingly an important part of our
business and of decisions we make.
Achieving our Brew a Better World ambitions will require significant
investment, committed execution, continuous learning and bold
collaboration. We are mobilising the entire global organisation on
our path to net zero, to deliver our ambitions for an inclusive, fair
and equitable world, and to ensure moderation. Strategic global
and local partnerships help us to shape our actions, refine our
approach and scale our positive impact.
As we continue to evolve, several of our goals came to an end in
2023. We are proud of our achievements although we have not
met all our targets. Our commitment to transparency means we
aim to back-up the data with a clear explanation of our successes,
limitations and strategic decisions.
The Sustainability Review section and the Sustainability
Section in the Report of the Executive Board illustrate what
initiatives we are deploying to bring these ambitions to life.
This section is intended to provide updates and examples to
stakeholders, including investors, colleagues, governments,
and NGOs in countries where we operate on the basis of
currently available data. This report covers our global
operations and contains available data for operations that
are consolidated in HEINEKEN’s financial statements. When
assessing achievements against the 2030 Brew a Better
World goals, businesses acquired three years prior to 2030 will
be excluded. However, they will be part of the reporting data.
Visit our Disclaimers page here
133
Our impact from Barley to Bar
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Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Inspiring a better world
We brew the joy of true togetherness to inspire a better world. Our Brew a Better
World 2030 strategy directly contributes to the UN SDGs and is woven into the
fabric of our balanced growth strategy, EverGreen.
Agriculture
Brewing
Packaging
Logistics
Customers
Consumers
We use natural ingredients to
brew our beer and make our
cider. By supporting sustainable
farming, we aim to have 100% of
our main ingredients (barley and
hops) sustainably sourced by
2030. Developing responsible
agricultural supply chains to
increase our volumes of
sustainable raw materials is a key
priority for reducing our carbon
footprint. In 2023, we worked on
more than 300 projects of our
Low Carbon Farming Programme
around the world.
Through our Integrated Net Zero
production programme, technical
experts continue to work with
each site to develop roadmaps to
reduce our impact in production.
In 2023, we reduced scope 1 and
2 carbon emissions by 34%
compared to 2018 baseline. Our
water strategy takes a holistic
approach, focusing on
responsible water use, effective
wastewater management, and
supporting water security in our
supply chain, production and
communities - particularly in
water stressed areas.
In 2023, we developed a global
circularity strategy for our
products and operations. The
strategy prioritises three key
areas to drive progress towards a
closed loop approach for our
packaging: Reuse, Recycled
content and Recyclable by
design. This builds on existing
work to support implementation
at scale.
Every second, our products are on
the move somewhere in the
world on trucks, trains and ships.
Optimising our logistics activities
to minimise energy consumption
remains a priority. Reducing the
distance our products travel is
best for the environment and
optimising the trips and the trucks
used to distribute our products is
essential to reducing our impact.
Brew a Better World means
empowering consumers by
providing choice, transparency
and zero tolerance of the harmful
use of alcohol. Our ambition is to
serve 0.0 always, everywhere –
ensuring our consumers around
the world have a choice. Non-
alcoholic products play an
increasingly significant role in our
industry-leading messaging
on responsible consumption
and moderation.
Our drinks are sold via bars,
restaurants and retailers around
the world. The cooling category
accounts for 8% of our total
carbon footprint. In 2023,
HEINEKEN took part in the first
‘Coolition’ conference in
partnership with the Beverage
Industry Environmental
Roundtable (BIER). Coolition is a
value chain coalition working
across three work streams: energy
efficiency and innovation for
commercial refrigeration,
standards and legislations for
energy consumption, and
circularity of fridges.
134
Stakeholder engagement and materiality
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Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Stakeholder engagement
and materiality
Our Brew a Better World priorities are defined through open conversations and
engagement with stakeholders – both internal and external. Their feedback
ensures we address the most important issues and those on which we have the
greatest potential impact – both positive and negative. While listening and
learning from others, we also use our voice, reach and influence to help drive
positive change.
Engaging with our stakeholders
Ongoing dialogue is instrumental in shaping and
executing our 2030 agenda. It helps us understand
the issues, risks and opportunities that are most
relevant to our business and stakeholders. We engage
with employees, investors, customers, NGOs,
government representatives, academic experts and
industry peers to learn and gather feedback on our
strategy, ambitions and progress.
This dialogue is an opportunity to share experiences
and dilemmas and discuss industry trends and
opportunities for innovation and collaboration.
Discussions cover our sustainability agenda,
performance and plans and we home in on key
topics like carbon, water, packaging, responsible
consumption & marketing, sustainable agriculture,
human rights and inclusion and diversity. In 2023,
we held dedicated sustainability meetings with over
30 key investors including deep dives on topics like the
net zero transition and regenerative agriculture.
We met with civil society and government officials
and participated in open panels at the UN 2023
Water Conference, NY Climate Week and COP28 in
Dubai. We also participated in advocacy initiatives
through the WEFs Alliance for CEO Climate Leaders,
the World Economic Forum, UN Global Compact, the
Water Resilience Coalition, RE100, the RE-Source
Platform and the Dutch Sustainable Growth Coalition.
Ahead of COP28 we endorsed letters from both the
We Mean Business Coalition and Alliance of CEO
Climate Leaders to urge world leaders to redouble
efforts to keep the 1.5C target alive.
We held regular meetings with NGOs like Human
Rights Watch and WWF and participated in multi-
stakeholder sessions to discuss topics such as fair
wage. We also engaged with our top suppliers in
agriculture, packaging and cooling to help deliver our
Brew a Better World goals and increased the
percentage of suppliers that have set science-based
carbon targets from 16% to 60%.
We collaborated with industry peers through platforms
like The Climate Pledge, the Consumer Goods Forum
and the Beverage Industry Environmental Roundtable
(BIER). For example, we are driving a coalition of
beverage companies and refrigeration producers to find
ways to further reduce the environmental impact of
commercial refrigeration equipment.
In 2023, we joined the Beyond the Megawatt Initiative
to help advance the environmental and social
outcomes of clean energy investments and the
Emissions First Partnership which is calling for improved
emissions accounting in the GHG Protocol. We also
became a member of the Roundtable for Sustainable
Biomaterials (RSB) Policy Platform, launched in
December 2022 to advocate for sustainable biomass
with global policymakers and regulators.
Important themes in 2023
Our stakeholder meetings throughout 2023
highlighted several recurring themes. In the table
opposite, we summarise some of the questions we
received from stakeholders and our response.
For more information, see Stakeholders &
Partners and Stakeholder policy on our website.
Theme
Our response
Carbon emissions
How do you ensure your
net zero strategy aligns
with the 1.5-degree
pathway?
Circularity
What are your plans to
close material loops in
your value chain,
especially for packaging?
Biodiversity
How are you addressing
biodiversity?
Human rights
What is your view on the
upcoming Corporate
Sustainability Due
Diligence Directive?
Transparency
Can you provide more
insight into your advocacy
efforts and how they align
with your sustainability
objectives?
In 2023, our net zero and FLAG (Forest, Land, and Agriculture) targets were
approved by the Science Based Targets initiative (SBTi). This confirms that our
near- and long-term decarbonisation ambitions align with the 1.5-degree
pathways required for a science-based approach. As a result, in 2024 we will start
reporting against our updated 2030 scope 3 reduction targets, including a 30%
reduction in HEINEKEN’s scope 3 agriculture emissions (FLAG), a 25% reduction in
HEINEKEN’s scope 3 non-agriculture emissions, and initiatives to address potential
deforestation risks.
We further developed our circularity strategy in 2023 with a major focus on
packaging. We established 2030 targets for the percentage of volumes sold in
reusable format, the percentage of recycled content in our bottles and cans, and
the percentage of packaging that is designed for recyclability. These targets
complement our aim to eliminate waste from landfills from all our production sites
worldwide by 2025. We also launched ‘Project Circle’ to create a circular business
model to reuse brewer spent grain. More information can be found on page 152.
Biodiversity and ecosystem health are intrinsically linked to our efforts to support
healthy watersheds, achieve net zero emissions and aim for 100% sustainably
sourced barley and hops. We are expanding existing programmes that address
biodiversity and exploring opportunities to promote regenerative agriculture. In
2023, we started work to better understand biodiversity risks and opportunities
across our value chain. We also joined the Science Based Targets Network (SBTN)
Corporate Engagement programme and the Taskforce for Nature-related
Financial Disclosures (TNFD) forum to support the development of emerging
methodologies for nature-related science-based target setting and disclosures. Our
next step in 2024 is to carry out a comprehensive assessment of our supply chain
and direct operations, which will serve as the foundation for developing our
biodiversity approach. More information can be found on page 157.
We support new EU legislation in relation to business activities that will improve
outcomes for people and the environment. For us, this means supporting
legislation that is clear, realistic, proportionate and workable to truly enable and
guide businesses in taking meaningful steps towards more sustainable supply
chains. We also promote the need for a harmonised legal framework in which
national legislation creates a level playing field by aligning with EU legislation.
We use multiple channels and platforms to publicly disclose our engagements in
detail. For instance, we share our engagement with policymakers and regulators on
climate topics through the yearly CDP Climate Change and Water questionnaires,
which are publicly available. We also disclose the costs and focus of our public
affairs activities and the trade associations we are affiliated with through the EU
Transparency Register. A complete list of our memberships and partnerships is
published on our company website. Our goal is to ensure that our advocacy
activities align with our sustainability goals. For our net zero agenda, for example,
we focus on platforms that are in line with the goals of the Paris Agreement and
which can accelerate action to address climate change by positively influencing the
development of the right policies and regulations to promote renewable energy.
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Stakeholder engagement and materiality
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Disclosures
Reporting basis of non-financial indicators
Our Double Materiality Matrix
Double Materiality Matrix
In 2023, HEINEKEN conducted its first double
materiality assessment to prepare for compliance
with the Corporate Sustainability Reporting Directive
(CSRD) requirements. This replaces the single
materiality assessment which was updated in
2020 and is therefore also used as a reference for
sustainability-related disclosures in this year’s
Annual Report.
A double materiality analysis has two dimensions:
impact materiality (sustainability topics that can
significantly affect the economy, environment and
people) and financial materiality (sustainability
topics that can significantly influence HEINEKEN’s
development, performance, or financial value).
These dimensions identify which sustainability topics
are material for an organisation under the CSRD
reporting requirements.
The double materiality assessment followed a six-
phase process (see figure below). Through desk
research, we first identified a broad list of 30
sustainability topics which we narrowed down to a
shortlist of 15. To pinpoint HEINEKEN's most crucial
sustainability topics, we gathered input from internal
and external stakeholders. This involved HEINEKEN
subject experts and senior managers, along with
representatives from NGOs, investors, governments,
customers and trade associations.
We conducted 25 in-depth interviews and distributed
surveys to 119 stakeholders across 15 markets across
all four regions, with a 60% response rate.
Double Materiality Six-Phase Process
Additionally, we collaborated with the risk
management team to use the yearly Risk Assessment
Cycle as another source for determining the financial
materiality of the sustainability topics. The outcomes
of interviews and risk assessments contributed to a
double materiality assessment matrix, while the survey
results were used to validate the findings. Ultimately,
the Executive Board conducted the final validation to
approve the double materiality matrix.
We have established cross-functional teams to
implement the requirements of the CSRD throughout
the organisation and support internal governance,
measures around controls, data availability and
system changes. We will start reporting according to
the CSRD framework in 2025, covering the reporting
year 2024.
For more information, see the CSRD section on
page 178.
Benchmarks and disclosure frameworks
We participate in the benchmarks, ratings and
disclosure frameworks that matter most to our
stakeholders. In 2024, we were once more included on
the CDP ‘A list’ for Climate Change and we scored -A
for Water. We were also recognised by CDP as a
leading company for engaging suppliers on climate
change. In MSCI’s ESG rating we were rated AA for the
fourth consecutive year.
We support convergence towards universal,
comparable disclosures as we are seeing with CSRD
and discussed further in this report in the chapters on
TCFD, EU taxonomy and the World Economic Forum
(WEF) Stakeholder Capitalism Metrics.
Phase
1
Evaluating
HEINEKEN’s
current state
and external
context
Phase
2
Mapping the
value chain
and potential
impacts
Phase
3
Engaging
internal
and external
stakeholders
Phase
4
Prioritising
the material
topics
Phase
5
Validating
the outcomes
with the
Risk and
Reporting
team
Phase
6
Confirming
the results
with the
Executive
Board
Sustainability topics identified as highly material
Above the threshold of 2.5 on a scale from 1 to 5 in impact and/or financial significance. These topics are considered
within the scope of CSRD reporting requirements.
Sustainability topics identified as less material
Below the threshold of 2.5 in impact and/or financial significance. These topics are considered outside the scope of
CSRD reporting.
∗ Even though biodiversity emerged as less material compared to other topics, it is closely connected to our existing efforts of reducing emissions,
supporting healthy watersheds, and sustainably sourcing our raw materials. We also recognise the need to better understand our impacts and
dependencies on nature and biodiversity across the value chain, which is our focus for 2024. For more information, see our Biodiversity chapter.
136
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Board
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Other
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Brew a Better World 2030 Strategy
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Disclosures
Reporting basis of non-financial indicators
Taking action on
climate risk
Understanding and managing our climate-related risks sharpens our
environmental and wider business strategy. It translates ambition
into targets and action to reduce emissions, restore healthy
functioning watersheds and increase the resilience of our supply
chain for the decades to come.
We follow the recommendations of the Task
Force on Climate-related Financial Disclosures
(TCFD) which aim to improve the quality and
consistency of climate-related information. The
TCFD recommendations are an important step
towards fully embedding climate-related risks and
opportunities into our business strategy and risk
management processes.
Why climate risk assessment is
important for HEINEKEN and its
stakeholders
Climate change is a global threat to humanity that
will shape the way we do business in the coming
decades. According to scientists, 2023 was the hottest
year on record. We must take urgent action to avoid
mounting loss of life, biodiversity and infrastructure.
As highlighted by our recent double materiality
assessment, climate change and its implications are
a material topic for HEINEKEN and its stakeholders.
Climate risk assessment helps us to identify the
likelihood of future events that may have a significant
impact on our business. Understanding these risks
early on is essential to prioritising climate action and
investing in mitigation and adaption, ensuring the
resilience of our operations across the world.
How HEINEKEN addresses climate risks
and opportunities
Three years since announcing our Brew a Better World
2030 strategy, we remain focused on climate action
and on translating our ambitions into targets and
action plans to reduce emissions, help restore healthy
watersheds and maximise the circularity of products
and processes.
In 2023, we validated our net zero targets with the
Science Based Targets initiative (SBTi), reaffirming our
ambition to reach net zero across our entire value
chain by 2040. In the same year, our total scope 1
and 2 emissions reached the lowest level since 2018.
Our journey to net zero represents a major
transformation in the way we operate and means we
must continuously evaluate our climate risks and their
impact on our business. Risk management is a core
element of how we do business and is supported by
strong governance. This includes addressing climate
risks and creating the right opportunities to future-
proof our business, which is the core of our EverGreen
strategy.
The TCFD recommendations guide companies to
provide clear and transparent disclosure of their
governance, strategy, risk management, metrics
and targets in relation to climate change risks,
opportunities and action. For the top three identified
risks, we assessed financial impact considering two
global trajectories that correspond to:
1. The baseline goals of the Paris Climate Agreement to
limit global temperature increase to 1.5°C compared
to pre-industrial levels.
2. The implications of a society failing to deliver enough
decarbonisation efforts, leading to a global
temperature increase of 3–4°C.
Our second year of assessment
This is HEINEKEN’s second TCFD-based analysis. Conclusions
are based on refining the three key climate risks identified last
year. In 2023, we engaged with two of our markets, Brazil and
the UK, to validate the risks’ quantification in those markets. We
have also assessed which parameters to include in our model
with the support of our internal global experts and external
experts.
Our evolving methodology remains with high-level assumptions
and uncertainties. Therefore, this year we continue to report
financial impacts of selected climate-related risks only
qualitatively and comparatively to each other.
Next steps for 2024 and beyond will include further enhancing
the accuracy of impact assessments and to continue
embedding the actions in our decision-making processes and
operating model. We will also disclose our risks in line with CSRD
requirements.
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Board
Financial
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Other
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Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Strong governance for sustainability, which includes climate-related risk, is crucial to the success of our overall
business strategy. Sustainability is included in the Green Diamond, the ‘North Star’ for the Company’s EverGreen
strategy and long-term value creation model alongside top-line growth, profitability and capital efficiency.
A broad range of sustainability topics, including identification and monitoring of climate risks, are embedded in
HEINEKEN’s governance. The governance bodies presented below are key forums where sustainability is
discussed. Climate-related risks and other information are discussed by these bodies periodically during the
Company’s business.
Supervisory Board level committees
The role of the Supervisory Board is to supervise
the Executive Board and the general affairs of the
Company and its affiliated enterprises. As part of this
role, it has oversight of sustainability matters including
climate risk.
The Sustainability and Responsibility Committee
focuses on supervising the activities of the Executive
Board with respect to environmental, social and
responsible consumption matters. This includes a
periodic review and evaluation of the Company’s
sustainability and responsibility performance and
progress against its objectives, including climate risks.
The Committee meets three times per year.
The Audit Committee supervises the activities of
the Executive Board with respect to the publication of
financial information and other areas like governance,
risk management, sustainability and compliance
with internal and external audit recommendations
for these areas and meets at least four times per year..
The Audit Committee meets with the external auditor
as often as it considers necessary, but at least once
a year, without the Executive Board members
being present.
The Remuneration Committee, meets at least three
times per year and makes recommendations to the
Supervisory Board on target setting, including for
sustainability topics linked to remuneration.
Executive Board level committees
The primary duties of the Executive Board are to
initiate and set the corporate strategy and to manage
the Company, including the sustainability strategy.
Material climate-related topics are subject to approval
by the Executive Board.
The role of the Executive Team is to ensure effective
implementation of our Brew a Better World strategy
across the organisation. Several members of the
Executive Team are members of the Executive Board
level committees and the Managerial level committees.
The Risk Committee, chaired by the Chief Financial
Officer (CFO), regularly reviews the group’s risk
assessment that summarises the Company’s key risks,
associated mitigating actions and monitoring
activities. Climate risks are considered among the top
risks. The Risk Committee meets three times per year.
The Sustainability and Responsibility Steering
Committee (S&R SteerCo), chaired by the CEO, is
central to climate-related risk management across the
organisation. The S&R SteerCo oversees the
implementation of the S&R strategy, including the
delivery of our climate strategy and the response to
identified climate risks. The SteerCo meets six times
per year.
The Disclosure Committee reviews and advises on
material public disclosures.
Managerial level committees
The Carbon Steering Committee informs the S&R
SteerCo and reviews the progress of our net zero carbon
programme towards set targets. The Towards Healthy
Watersheds Steering Committee informs the S&R
SteerCo and reviews the progress of our water
programme towards set targets. The SteerCos
consider the impact of climate-related risks and
monitor progress using tracking tools and dashboards.
The Carbon SteerCo meets six times per year. The
towards healthy watersheds Steering Committee
meets at least three times per year. In 2024, we will
establish a consolidated environmental Steering
Committee to tackle all environmental topics: carbon,
water, circularity and biodiversity. The CSRD Steering
Committee, established in 2023, monitors
implementation of EU CSRD/ESRS requirements.
Targets linked to remuneration
In 2023, we continued to align the remuneration
policy of the Executive Board to the EverGreen
strategy and our Brew a Better World ambitions.
Long-term variable remuneration is tied to two
environmental goals (on carbon and water usage)
and one social goal (on gender balance). The
sustainability-tied part of the Long-Term Incentive
Plan accounts for 25% and is linked to the
performance over a three-year period. These goals are
cascaded to the senior management community.
For further information on the corporate
governance and remuneration please see pages
45–52 and 61–74
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2023
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Report
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Supervisory
Board
Financial
Statements
How we identify climate-related risks
In 2022, and from the list of highly rated risks, we
selected the three most material risks for the financial
impact quantification based on the scenarios
described earlier. These three risks are related to:
– carbon pricing impact on value chain and own
operations;
– water stress impact on own operations; and
– climate-related barley yield losses.
In 2023, we maintained our focus on these three risks,
deep-diving to understand their potential impact in
specific markets and globally. This required setting up
a dedicated task force team of internal and external
subject matter experts and business strategy
specialists. We performed scenario analysis following
TCFD recommendations and analysed the impacts of
identified risks in line with our risk assessment
methodology. An explanation of the methodology
used for financial assessment of key climate-related
risks is provided in the following sections of this report.
Based on the methodology applied and impact and
likelihood analysis, we added climate change to the
risk management section of this report, highlighting
carbon pricing, water stress and climate-related barley
yield losses as the main elements.
Sustainability
Review
Read about how risks were identified in our
TCFD report 2022
Other
Information
How climate-related risks
are managed
We continuously monitor and evolve our climate risk
management and mitigating actions. Managing risks
in a conscious manner increases the likelihood of
achieving our strategy and business objectives.
Throughout the year, the Risk Committee reviews
relevant risks to assess their potential impact on
achieving our strategy and business objectives.
Due to their specific and broad reaching nature,
climate-related risks are also regularly discussed at
meetings of the S&R SteerCo and relevant managerial
level committees.
Due to the high level of uncertainty of climate factors,
monitoring the significance of risk categories will be
an ongoing process considering changes in external
conditions and scenario assumptions.
We will continue to review our detailed scenario
analysis annually as well as reassess our identified
climate risks. Scenario analysis and climate-related risk
assessment may be conducted more frequently in the
event of significant political and economic changes or
a drastic change in climatic factors.
Read about the Company’s Risk management
framework on pages 35-40
How we use scenario analysis
We conducted our first detailed scenario analysis for
climate risks following the TCFD guidance in 2022.
When developing relevant scenarios based on the
IPCC1 and IEA2 scenario models, we considered two
climate scenarios, to test a full range of impacts:
– the global temperature increase of 1.5°C to pre-
industrial levels as the baseline goal of the Paris
Climate Agreement; and
– the 3–4°C scenario reflecting the implications of
a society failing to deliver enough decarbonisation
efforts.
To develop the two scenarios and assess HEINEKEN’s
exposure and financial risk, we applied 2040 and
2050 timeframes.
Risks for HEINEKEN
in a 1.5°C scenario
Both scenarios do not consider any mitigation actions
that are being implemented at HEINEKEN. Input from
HEINEKEN’s strategy, risk management and
sustainability teams led to the selection of a range of
risks for qualitative impact assessment, as presented
in the charts on this page.
Explanation of our methodology
In 2023, we have refined our model to calculate
financial impact of our three key risks by including
the most relevant and more granular parameters into
our model. For example, we have included operational
costs and revenue losses in the financial impact of
water stress risk and created a refined model to
estimate the impact of carbon pricing on a country
and regional level rather total company only.
We have also conducted several interviews with
global experts on carbon pricing, water stress and
barley as well as local experts from two of our
operating companies: UK and Brazil. This has helped
us to understand the climate risks at local level,
ensuring we apply the right assumptions in our
assessment. While carbon pricing remains our main
risk on company level, if not mitigated; the impact of
water stress and loss of barley yields may highly vary
per country. See next page for more information
about key assumptions and results of the 2023
climate risks assessment.
Risks for HEINEKEN
in a 3–4°C scenario
1 International Panel on Climate Change (IPCC).
2 International Energy Agency (IEA).
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Introduction & Context
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Social
Responsible
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Disclosures
Reporting basis of non-financial indicators
The 2023 refinement of our risk assessment led to an update of the gross financial implications of the three risks. Given the assumption-based approach and wide range of uncertainty on financial impact, we continue to present
results qualitatively. The financial impact overview in the table below shows the comparative impact of climate-related risks in relation to each other, not wider business risks. In the 2023 analysis, carbon pricing remains as a
relative top risk, while water stress is considered as a relative medium risk. The table below outlines the main drivers for the changes versus last year’s analysis.
Gross financial impact of climate-related risks, in relation to each other
1.5⁰C scenario
3-4⁰C scenario
Selected potential risks
2040
2050
2040
2050
Risk drivers and assumptions
Carbon pricing on supply chain and
own operations
Regulatory events to drive change
in energy/supply costs
Higher
Higher
Higher
Higher
Water stress on own operations
Production halts due to instability in supply
and regulations
Medium Medium
Medium Medium
– Changing and tightening regulations and (climate) ambitions could drive implementation of taxes or market schemes. This could translate
into rising direct and indirect costs linked to carbon emissions, where the strongest impact would likely be on cost of sales linked to raw
materials, production and distribution emissions.
– Development of HEINEKEN’s future GHG emissions in line with regular business growth.
–
Percentage of emissions subject to carbon pricing. Emissions that are most likely to be impacted by carbon pricing regulation have been
considered. This reduced the impact of the risk compared to our 2022 analysis.
– Development of future carbon prices based on the IEA and NGFS. In this year’s analysis, we assumed the 2040 and 2050 carbon pricing will
be equal to 2030 forecasted prices. This provides some degree of certainty on impact. The pricing assumption is the main driver for the total
impact of the risk. Though carbon pricing remains our top risk, changing the assumption of carbon prices by 2040 and 2050 has reduced the
expected gross financial impact of this risk versus our 2022 analysis.
Extent of suppliers’ cost increase passed on to the Company. We modelled the most likely scenario of how our suppliers might pass on the
costs to HEINEKEN. This has reduced the impact of the risk compared to our 2022 analysis.
–
– Water-related risks come from exposure to water-related challenges such as water scarcity, water stress, flooding and droughts that may affect
our production facilities’ ability to produce water-based products due to lack of freshwater supply.
– Development of HEINEKEN’s future water footprint in line with regular business growth.
– This year’s analysis did not include the development of water prices based on water stress levels and maturity of different technological
solutions because of the uncertainty of water prices increasing in the short- to medium-term globally. This exclusion reduced the financial
impact of the risk compared to the 2022 analysis.
– Development of regulatory water usage restrictions during extended periods of extreme water stress and high seasonal variability leading to
production halts for 14 days. The frequency and length of the disruption period is the main driver for the total impact of this risk.
– Cost of business disruption is based on revenue loss and continued operational costs.
Sustainability
Review
Climate-related barley yield losses
Low yield to impact agri-commodity
prices and volatility
Other
Information
Quantification approach
Carbon pricing
Lower
Lower
Lower
Lower
– Climate change impacts such as increased temperature, extreme weather events and water scarcity are likely to impact barley yield.
– No technological advancement is assumed in either scenario.
– While average yield losses are relatively limited, annual variability is expected to strongly increase. This could have an impact on price.
–
– Climate change crop yield factor: development of agricultural yield based on FAO future projections.
–
Impact is related to price response factor. We assume a direct 1:1 inverse relationship between crop yield and price.
Future development of key commodity requirements against regular business growth.
Water stress
Barley yield
1. From desk research, obtain expected carbon pricing per scenario and regional
breakdown.1
2. Establish baseline carbon emissions based on year 2022.
3. Scale carbon emissions based on expected annual growth rate.
4. For each time horizon, scenario and country, calculate the gross financial impact on
HEINEKEN business, based on the scaled emissions and carbon pricing outlooks. Scale
according to emissions data coverage.
1. From desk research, obtain baseline and expected changes in water stress and seasonal
availability per site.2.
2. Establish baseline water requirements based on production volume, average water
usage data, and business disruption value based on insurance data.
3. Scale water requirements based on expected annual growth rate.
4. Establish how change in water stress/seasonal variability may drive operational
disruption.
1. Establish baseline barley requirements based on sourcing data.
2. Establish baseline barley cost.
3. Scale barley requirements based on expected annual growth rate.
4. From desk research, calculate expected change in barley yield over time per
5.
climate scenario and supplier country.3
Inversely apply percent change in yield to commodity price to calculate
commodity price per year.
1 External data sources for carbon pricing include: IEA World Energy Report, and NGFS Scenario Explorer.
2 External data sources for water risk include: World Resources Institute, Aqueduct Water Risk Atlas, IBNet Tariffs Database.
3 External data sources for barley yield loss include FAO, Food and Agriculture projections to 2050 crop production.
5. For each time horizon, scenario and country, calculate the gross financial impact on
HEINEKEN business, based on the scaled water requirements and water pricing
outlooks, and business disruption occurrences and disruption values.
6. For each time horizon, scenario and country, calculate the gross financial
impact on HEINEKEN business, based on the scaled barley needs and
barley pricing outlooks.
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Review
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Reporting basis of non-financial indicators
Our strategy to address carbon
pricing risk
Our Brew a Better World strategy aims to equip us to
mitigate our key climate risks. One of the key pillars of
our strategy in terms of climate action is reaching net
zero by 2040 across our value chain. Our intermediate
2030 goal as well as our long-term net zero ambition
will help in mitigating our impact on the environment
and will enhance our resilience to transitional risks,
such as carbon cross-border tax and national quotas
for GHG emissions. Moreover, it will help protect
HEINEKEN’s operating profit in the coming years
and decades.
To achieve our climate goals, we are optimising our
beverage production processes and reducing energy
consumption. We have also continued to reduce our
scope 1 and 2 emissions to an all-time low level with
a reduction of 34% vs. 2018.
This is mainly due to the increase of combined
renewable energy to 45% in 2023 out of which 77%
is our share of renewable electricity that is sourced in
alignment with the RE100 criteria.
We also continue to deploy different initiatives to
reduce our scope 3 emissions. Optimising our
outsourced activities is not enough to reduce our value
chain emissions. This year, we continued engaging
with our suppliers and we focused on our top glass
and aluminium suppliers by supporting them in
developing decarbonisation roadmaps. We have also
continued investing in innovative technologies such as
low-carbon fertiliser, an important step to reduce our
agriculture emissions.
See more information on our net zero strategy on
pages 148-151
Carbon pricing
Carbon pricing, taxation and emissions trading
schemes are expected to be the primary levers
through which governments around the world will
regulate emissions and incentivise decarbonisation.
This will impact our business and value chain,
potentially increasing the price of raw materials,
energy and equipment, among others.
Key implications
– Prices within climate models account for direct
taxation, regulatory measures and secondary
market effects.
– Impacts are modelled on HEINEKEN’s energy and
supply costs.
– This assumes all sectors and related emissions,
except agricultural land use change emissions will
be covered by carbon pricing schemes. Land use
change is excluded as it is considered least likely to
be impacted in the future.
– The impact on HEINEKEN can be higher in the 1.5°C
scenario, due to the materialisation of carbon pricing
schemes around the world. Under this scenario, the
strategic importance of delivering on our net zero
strategy to mitigate carbon pricing impact is key.
– Pass-on factor of carbon pricing from our suppliers in
the value chain. The pass-on factor is the most
uncertain parameter in our analysis. However, we
have considered that in countries where carbon prices
are likely to be high, suppliers are more likely to pass
on the full costs to HEINEKEN.
1.5°C scenario:
– Steep carbon pricing of all activities across the
value chain is used to incentivise businesses to
meet 1.5°C goals. such as:
– Implementation of carbon taxes on fossil fuels
and industrial processes.
– Expansion and strengthening of cap-and-trade
systems (ETS).
– Development of international carbon markets for
cross-border trading of emission reductions.
– Utilisation of carbon pricing revenue to fund
sustainable development, support vulnerable
communities, and invest in clean technologies.
– Financial incentives, including subsidies and
grants, to stimulate research and development in
low carbon technologies.
– Average Price levels considered, ranging from €54
to €108/ tonne1, depending on the NGFS or IEA
data source and country of emissions. This is
considerably lower than the carbon pricing range
considered for 2022 analysis (€50 – €760/tonne).
3–4°C scenario:
– Carbon pricing schemes are fragmented and
prices remain low, with a smaller percentage of
value chain activities covered by carbon pricing
that is ineffective to incentivise renewable
alternatives.
– Many countries do not implement any form of
carbon pricing.
– Limited carbon pricing revenues or financial
incentives to stimulate low carbon technology
investment.
– Average Price levels range from €9 – €33/tonne1
depending on data source and region. The pricing
range considered in 2022 was €0 – €80/tonne.
1 IEA World Energy Report, Macro drivers
and NGFS Scenario Explorer
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Our strategy to address water
stress risk
For water risk, our strategy towards healthy
watersheds aims to protect and restore the
watersheds from which we source our water.
This will help us in building resilience against water
unavailability and business disruptions. Our ambition
is to fully balance and replenish 100% of water used
for our products back to the watershed by 2030
through multi-year water balancing activities and
collective action in water-stressed sites.
Through our climate risk assessment, we identify sites
that will be significantly exposed to water stress in the
long-term. We also consider the impact of water stress
in areas where our suppliers operate.
Moreover, in 2023, we have incorporated water stress
in our greenfield breweries due-diligence process
which guides the decision-making process for site
location and brewery design as well as determine
the potential impact on local communities for our
greenfield projects. Additionally, we aim to engage
with our raw materials suppliers to assess potential
water risks in the value chain and develop
sustainable management practices.
For more information on our towards healthy
watershed strategy, see pages 154-156.
Water stress
Recurring insufficient local water availability could lead
to the inability to meet operating demand for water at
HEINEKEN locations, especially in water-stressed
areas. This is likely to limit the ability of production
sites to produce products due to potential regulatory
restrictions and prioritisation of water use for local
communities during extreme drought periods. We
assumed that water unavailability in water stress
areas is more material than changes of water prices.
Therefore, water price changes are excluded from this
year’s analysis, contrary to last year's analysis.
Key implications
– Insufficient local water availability during certain
periods results in inability to meet operating demand
at HEINEKEN’s locations.
– Forced operational disruptions due to regulatory
restriction of water use leads to loss of business
revenue.
– Physical water stress is expected to be worse in a
3–4°C scenario depending on locations (in general
according to IPCC, wet regions will get wetter and dry
regions drier).
– The financial impact is estimated to be higher in a
1.5°C scenario due to increasing international
regulatory restriction on water use and public
activism leading to more frequent business
disruptions especially during extreme heat waves.
1.5°C scenario:
– Nearly a fifth of HEINEKEN’s sites (32) are
currently exposed to water stress.
– With proactive measures in water resource
management and conservation, the overall stress
on water resources is expected to be lower.
– There will be significant technological
advancements and innovations in water
management. This may include the adoption of
smart water systems, precision agriculture, and
other technologies that contribute to efficient
water use.
– An increase in integration across various sectors,
such as agriculture, industry and urban planning,
to optimise water use.
– An increase in HEINEKEN water-stressed sites is
expected.
– Main impact is through the regulatory restrictions
and access protection.
3–4°C scenario:
– Water stress is expected to worsen under a 3–4°C
scenario in some countries where we operate,
based on the WRI Water Risk Aqueduct.
– Increased population growth, uneven economic
development and limited efforts to mitigate
climate change contribute to higher greenhouse
gas emissions and temperature rise, intensifying
water stress globally.
– An increase in conflicts over water resources
especially in regions with limited adaptive
capacity.
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Loss of barley yield
High quality agricultural commodities such as malted
barley and hops are essential to produce our beers.
Negative climate impacts on agricultural yield and
quality will affect agricultural commodity prices and
market volatility, increasing our future cost of supply.
Key implications
– Barley represents 70% by volume of agricultural
commodities in our supply chain. As a result, the
quantification of risk and impact is mainly focused
on barley.
– Increasing negative climate impacts on agricultural
yields and quality may result from changes in
precipitation, temperature and evapotranspiration.
– This could impact agricultural commodity prices and
market volatility, increasing cost of supply for
HEINEKEN.
– Most of the exposure to yield impacts on barley is
concentrated in Europe and Latin America.
– While some sourcing countries will see a decline in
barley yields, others will experience moderate
temperature increases meaning average yield losses
may be relatively limited. However, annual variability
is expected to increase significantly, which could
affect price.
1.5°C scenario:
– Increasing annual yield variability driven by
climate change effects.
– Yield impacts fluctuate depending on sourcing
country.
– Yield loss expected for some key sourcing
countries.
– Impact of weather on yields by 2050 is expected
to be less severe compared to higher warming
scenarios.
– Technological advancements and practices that
minimise environmental impact may have a
negative impact on yields compared to
conventional agricultural practices.
3–4°C scenario:
– Climate-related yield losses are expected to
increase by 2050.
– Increased annual yield and quality variability
driven by climate change effects compared to
1.5°C scenario.
– Extreme weather events such as wetter and
warmer winters in key growing areas will increase
the protein content, leading to more processing
costs for brewing.
Our strategy to address loss of
barley yield
Climate change impact differs per country. Based on
our climate study, we have identified countries that
benefit from moderate temperature increases while
others can be negatively impacted. In response to
that, HEINEKEN takes a number of actions. For
example, our barley sourcing strategy relies on
sourcing from different geographies including
Western Europe, Central and Eastern Europe, UK,
Scandinavia, Australia, USA, Argentina, Mexico, Brazil
and others. This brings flexibility to our supply chain
which helps mitigate climate impacts. We are also
partnering with one of the leading research
institutions in this field to assess the physical climate
change risk for barley growing areas globally up until
2050, with deep-dive assessments in Europe and the
Americas. On a local level and for countries which will
benefit from temperature increase such as the UK,
maintaining fully locally sourced Barley is key for
mitigating the impact of this risk.
Additionally, in our current barley-sourcing regions, we
continue to deploy regenerative agriculture practices
with our farmers, through our raw materials suppliers,
as part of our Low Carbon Farming Programme.
(LCFP). This programme aims to improve the soil
quality which in turn, improves the barley yields
throughout the year.
For more information our agriculture related
initiatives, see pages 150 and 157
Looking ahead
Adopting the TCFD recommendations will ensure
HEINEKEN provides its stakeholders with robust
information on climate-related risks and how we
are managing them in the short, medium and
long term.
We will continue to develop our assessment of climate
change-related risks and opportunities. This includes
enhancing the quality of scenario modelling and
impact quantification and further embedding our
approach to risk management and mitigation
throughout HEINEKEN.
The geographical spread of our operations makes it
crucial to monitor and analyse climate change
impacts at both regional and country levels. In 2023,
we have already started this process by including two
markets in our assessment, Brazil and UK, and we will
continue to engage with more internal and external
stakeholders and experts. We also aim for the
management of climate-related risks and
opportunities to become an integral part of our
operational model across our global organisation.
This is a constantly evolving process and the
quantification of financial impact and methodologies
will continue to be refined especially with external
guidance evolving. In 2025, covering the reporting
year 2024, we will disclose our climate risks in line with
the EU CSRD requirements which is also aligned with
the TCFD framework.
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Our BaBW pillars, ambitions and goals
Our pillars
Our ambitions
Our goals
Environmental
Social
Responsible
Reach net zero carbon
Reach net zero in scope 1 and 2 by 2030
Reduce scope 3 emissions by 21% by 2030
Reduce emissions across our value chain (scope 1, 2
and 3) by 30% by 2030
Reach net zero across our value chain by 2040
100% sustainably sourced ingredients (hops, barley)
by 2030
Embrace inclusion & diversity
Gender balance across senior management: 30%
women by 2025, 40% by 2030
Cultural diversity: across each region at least 65% of
country leadership teams are regional nationals by
2023
100% of our managers trained in inclusive leadership
by 2023
Maximise circularity
Zero waste to landfill for all our production sites by 2025
A fair & safe workplace
Fair wage for employees: close any gaps by 2023
Turn waste into value and close material loops
throughout the value chain
Equal pay for equal work: assessments and action by
2023
Towards healthy watersheds
Fully balance water used in our products in water-
stressed areas by 2030
Maximise reuse and recycling in water-stressed areas
by 2030
Treat 100% of wastewater of all breweries by 2023
Reduce average water usage to 2.6 hl/hl in water-
stressed areas, and 2.9 hl/hl worldwide by 2030
Ensure fair living and working standards for third-party
employees and brand promoters
Create leadership capacity to drive zero fatal accidents
and serious injuries at work
Positive impact in
our communities
A social impact initiative in 100% of our markets in
scope
Local sourcing of agricultural ingredients in Africa:
50% increase in volume by 2025
Always a choice
A zero alcohol option for two strategic brands in the
majority of our markets (accounting for 90% of our
business) by 2023
Clear and transparent consumer information on 100%
of our products in scope by 2023
Address harmful use
100% of markets in scope have a partnership to address
alcohol-related harm
Make moderation cool
10% of Heineken® media spend invested every year
in responsible consumption campaigns, reaching
1 billion consumers
Foundation:
Our ways of working
Responsible business conduct
An effective Speak Up framework
Respecting human rights
Ongoing due diligence
Zero tolerance to bribery and corruption
Good governance
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Environmental
Our focus area
Reach net
zero carbon
Maximise
circularity
Towards
healthy
watersheds
Our goals and our progress
Our 2023 results
2030
Reach net zero in scope 1 and 2 emissions
2030
Reduce scope 3
emissions by 21%
2040
Reach net zero across the
value chain
2030
Absolute reduction of 30% emissions across our value chain
(scope 1, 2 and 3)
2030
100% sustainably sourced ingredients (hops, barley)
2025
Zero waste to landfill for all our production sites
2030
Turn waste into value and close material loops
throughout the value chain
2030
Fully balance water used in our products in
water-stressed areas
Reduction of 34% vs. baseline 2018 in scope 1 and 2 emissions
Reduction of 20% vs. baseline 2018 in scope 3 emissions
Total absolute reduction of 21% vs. baseline 2018 scope 1, 2
and 3 emissions
77% sustainably sourced ingredients (hops, barley)
120 out of 168 sites are landfill free
Strategy completed, goals can be found on page 152 and
actions ongoing
28% of water-stressed sites are fully water balanced
2030
Maximise reuse and recycling in water-stressed areas
Water circularity actions continuing
2030
Reduce average water usage to 2.6 hl/hl
in water-stressed areas and 2.9 hl/hl globally
2023
Treat 100% of wastewater of all breweries
Reduced to 3.0 hl/hl average water usage in water-stressed
areas and 3.2 hl/hl globally
163 of 168 sites have wastewater treatment
Progress towards our goals
Read more about the definitions and the scope
Note: All numbers in our 2023 results have limited assurance by Deloitte, see page 205 for the Assurance Report.
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Social
Our focus area
Embrace
inclusion
& diversity
A fair &
safe workplace
Positive
impact in our
communities
Our goals and our progress
Our 2023 results
2025
Gender balance:
30% women across
senior management
2030
Gender balance:
40% women across
senior management
2023
At least 65% of country leadership teams to be
regional nationals
2023
100% of management trained in inclusive leadership
2023
Fair wage for employees: close any gaps
28% women in senior management
3 of 4 regions have at least 65% regional nationals
in leadership teams
99.8% of management trained in inclusive leadership
100% fair wage assessments across our operating companies,
from which 100% of direct employees earn at least a fair wage
2023
Equal pay for equal work: assessments and action
100% of operating companies went through equal pay
assessments and 100% have action plans in place
2030
Ensure fair living and working standards for
third-party employees and brand promoters
2030
Create leadership capacity to drive zero
fatal accidents and serious injuries
38% of operating companies have been assessed
to ensure fair living and working standards for
third-party employees and brand promoters
97% of people managers completed the
Life Saving Commitments training
2030 (annually)
A social impact initiative in 100% of our markets in scope
100% of our markets in scope had a social
impact initiative
2025
In Africa, increase volume of local sourcing of
agricultural ingredients by 50%
19% increase in volume from locally
sourced agricultural ingredients
Progress towards our goals
Read more about the definitions and the scope
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Responsible
Our focus area
Always
a choice
Address
harmful use
Make
moderation
cool
Our goals and our progress
Our 2023 results
2023
A zero alcohol option for two strategic brands in the majority
of our markets (accounting for 90% of our business)
Markets with a zero alcohol option for at least two strategic
brands represented 53% of our beer and cider volumes
2023
Clear and transparent consumer information on 100% of our
products in scope by 2023
53% of our products in scope had fully compliant labels
2030 (annually)
100% of markets in scope have a partnership to
address alcohol-related harm
100% of markets in scope had a partnership to
address alcohol-related harm
2030 (annually)
10% of Heineken® media spend invested in responsible
consumption campaigns.
Our operating companies invested 14% of Heineken®
media spend in dedicated responsible consumption campaigns
Reaching 1 billion consumers.
Almost 0.9 billion unique consumers reached worldwide
Progress towards our goals
Read more about the definitions and the scope
Note: All numbers in our 2023 results have limited assurance by Deloitte, see page 205 for the Assurance Report.
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Mobilising our global
organisation towards net zero
Climate change is impacting ecosystems, agriculture and the health
and livelihoods of communities around the world. We must take
bold and urgent action to deliver science-based targets that align
with limiting global warming to 1.5°C. We are focused on reducing
emissions, supporting a circular economy, securing the health of
local watersheds and managing our impact on biodiversity.
Contributing to the UN SDGs – Path to net zero impact:
Learn more in the Environmental section
of our website.
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Reach net zero
carbon by 2040
Why it matters
HEINEKEN is committed to taking bold action to
help limit global warming to 1.5°C. This is crucial to
safeguard the planet and protect communities
from the worst impacts of climate change.
Our aim is to reduce emissions and conserve the
natural world which we all depend on. Achieving it
requires us to find solutions that connect carbon,
water, biodiversity and people’s livelihoods and to
reshape the way we do business globally.
A key ambition of our Brew a Better World strategy is
to reach net zero by 2040. This strategy is aligned with
the latest climate science and translates ambition into
action in both the near and long-term. We have
announced this ambition in April 2021 with
intermediate goals to reach net zero carbon in
scope 1 and 2 and reduce 21% of scope 3 emissions,
both by 2030.
We have mobilised the organisation, established a
team of internal experts and are developing robust
governance and reduction roadmaps.
We have also been engaging and collaborating with
external stakeholders – including suppliers, peers and
partners – to drive collective actions towards a low-
carbon transition.
Science-based approach
We joined the Science Based Targets initiative (SBTi)
in 2019 and contributed to its Net-Zero Standard and
Forest, Land and Agriculture (FLAG) standard as a
technical advisor.
In April 2023, the SBTi approved our long-term net
zero targets and our updated near-term targets.
We added a FLAG target to focus on reducing
emissions from the agriculture and land sectors and
stopping deforestation in our primary commodities.
We are the first global brewer to have both net zero
and FLAG targets approved by SBTi. By grounding
our emissions reduction targets in climate science,
SBTi helps us to define how much and how quickly
we need to reduce our greenhouse gas (GHG)
emissions to limit global warming to 1.5°C above
pre-industrial levels.
Our net zero strategy
Our net zero strategy is built around the four Rs:
Reduce, Replace, Remove and Report. We are working
to decrease absolute carbon emissions in our
operations and across the value chain from barley to
bar. In each category, we focus on reducing energy
demand by deploying energy efficient equipment at
breweries, lightweighting our packaging and
optimising transport. We replace fossil fuels with
renewable energy, develop new capabilities for our
operations and develop and scale solutions with our
suppliers, customers and partners with which it is
crucial we partner with to reach our ambition and
reduce scope 3 emissions.
Read more about our net zero roadmap
We will face many challenges as we work to fully
decarbonise our business and value chains. We are
integrating our strategy in the annual strategic and
planning cycles to prioritise and deliver our goals in a
phased way.
Following SBTi guidance, we aim to neutralise a
maximum 10% of our unabated emissions by
investing in high-integrity removal carbon credits.
In 2023, we started defining the strategy that will
shape how we acquire carbon credits to achieve net
zero by 2040.
Our carbon footprint
HEINEKEN’s entire carbon footprint (scopes 1, 2 and 3) is broken down across the
following lifecycles:
2023 total
15.3 million
tonnes CO2e
Scope 1
1.0 million
tonnes CO2e
Scope 2
0.2 million
tonnes CO2e
Scope 3
14.1 million
tonnes CO2e
Understanding our emissions ensures that we develop
robust and effective near- and long-term roadmaps to
reduce our emissions. Accurate data sharpens our
focus and identifies areas for maximum impact.
We continuously improve our GHG accounting
methodologies to align with the latest standards.
We will continue to report transparently on our
successes and challenges on the path to net zero
through the Climate Disclosure Project (CDP). This
year, we were included in the CDP climate A-list for the
second year in a row. Our current disclosure with CDP
will pave the way to comply with new regulations such
as the Corporate Sustainability Reporting (CSRD).
Enabling the organisation
Since 2021, the number of employees working on
the net zero carbon agenda has increased. We aim
to upskill our teams with the best tools, training and
guidance possible.
An example is the launch of the internal Brew a
Better World Academy to educate employees on
climate change and net zero strategy. In 2023, we
added function-specific training to help each team
integrate the agenda into their unique daily activities.
So far, more than 1,400 employees have completed
the training.
We also developed several internal policies to guide
our teams on the latest best practices and external
standards to follow. These include a renewable
electricity policy, a sustainable biomass policy and
GHG accounting standard.
We also developed a funnel system to manage
the pipeline of reduction projects across scope 1, 2
and 3 and to enable us to forecast delivery against
our targets.
We continue to include absolute carbon reduction in
the Long-Term Incentive scheme for senior managers
in the Company, alongside water efficiency and
gender balance.
Scopes 1 and 2
Scope 3
* 65% of the ‘Other’ category is related to commercial activities and expenses, business travel, employee commuting, and leased cars.
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Finally, we are working with advocacy groups aligned
with our net zero strategy who can influence
policymakers and regulators. We played an active role
in Climate Week NYC and COP28 and continue to
engage in platforms such as the World Economic
Forum Alliance of CEO Climate Leaders, RE100, RE-
Source Platform, Race to Zero, Business Ambition for
1.5°C, Emissions First Partnership, European Biogas
Association and Smart Freight Centre to drive
systemic change across industries. Additionally, we are
an active member of the Beverage Industry
Environmental Roundtable (BIER) with the objective
of standardising the way the beverage industry
reports emissions, complies with upcoming standards
and regulations and shares knowledge and learnings.
2030 goal
Reach net zero in scope 1 and 2
emissions
Meeting our scope 1 and 2 net zero goal by 2030
will require us to optimise processes, reduce energy
demand and replace fossil fuels with renewable
energy across all our sites globally. 86% of our direct
emissions comes from beverage production and we
are working to reduce emissions and shift to
renewable energy at all our sites. We also have
developed reduction roadmaps across our operations
including our own logistics activities, which is 8% of
total scope 1 and 2 emissions.
Our progress
In 2023, our total scope 1 and 2 emissions were
1.2 million tonnes CO₂-eq (2018: 1.8million). This was
a reduction of 34% against the 2018 baseline and
19% since last year, putting us on track to meet our
2030 goal.
This performance was driven by emissions reduction
in production and own logistics. In production, our
emissions fell by 20% versus 2022 due to rapid
adoption of renewable electricity (77% vs 58%
in 2022).
For beverage production scope 1 and 2 emissions,
we achieved a 34% reduction since 2018.
To drive additional reduction in thermal and electric
energy consumption, we deployed 75 good practices
improving efficiency in the brewing process (boiling
and gravity) and utilities (cooling process). We are
already seeing results; implementing three of these
initiatives within three months led to a 3% reduction
of energy consumption.
In our logistics operations, scope 1 and 2 emissions
decreased by 10% versus last year, mainly driven by
volume decline and reduction of own transport as
well as through shifting to renewable electricity and
electric forklifts in our warehouses.
Highlights and challenges
We have maintained our strategic focus on
Reduce and Replace. Thermal energy makes up
70% of our production energy demand and we have
set ambitious roadmaps for all our sites to identify
the right renewable heat solutions. We are also
accelerating our sourcing of renewable electricity
as part of our ambition to reach 100% as part of
our RE100 membership.
Energy efficiency
In 2023, we set internal energy efficiency targets
for each production site. The average combined
energy consumption of all our 168 production sites
increased to 25.16 kwh/hl (2022: 25.10 kwh/hl).
We launched the Integrated Net Zero Production
programme in 2022, establishing a cross-functional
team of internal experts and external suppliers to
drive energy efficiency at our production sites.
The programme is now running at 60 production
sites spanning all regions. With our partners, we are
exploring innovative ways to switch from steam
usage to hot water in the main brewery process,
including mashing, achieving around 20% reduction
in energy usage. Deploying this programme will be
key to achieving our 2030 ambition.
Additionally, we have launched a new programme
Race to Reduce, which aims to accelerate energy and
water reduction efforts on the shop floor by raising
awareness of the importance of reducing energy
and water consumption.
Shifting to renewable energy
Using renewable energy is at the core of our net zero
strategy. It also future-proofs our operations from
potential energy security risks and price increase that
can emerge from geopolitical conflicts.
In 2023, 77% of total electrical energy came from
renewable sources (solar, wind, hydro) and 30% of
our total thermal energy demand was renewable.
This increased our total share of combined renewable
energy to 45% (2022: 37%).
Thermal energy accounts for 70% of our total
production energy demand but it is the most
challenging to replace with renewable solutions.
The renewable thermal market is not as mature as
the electricity market and progress requires a site-by-
site approach.
Through our Integrated Net Zero production
programme, technical experts continue to work with
each site to develop roadmaps with the right
technology. These solutions can be bioenergy from
sustainable feedstocks such as biomass from
agriculture waste in our breweries in Cambodia,
Vietnam and Indonesia or biomethane, as we do in
Mons brewery in France. We have also identified other
solutions, for instance, at HEINEKEN UK and
specifically in our Manchester brewery, we have
announced a major investment to install heat pumps
and a heat pump network to capture and reuse
thermal energy to brew and package beer. Moreover,
we are always exploring innovative solutions such as
Project Circle (see page 153) that aims to drive both
emissions reductions and circularity, and
our first solar thermal in our Seville plant. This plant
became operational in 2023 and is expected
to reduce the Seville brewery’s fossil gas consumption
by 60%.
In 2023, we defined our renewable electricity sourcing
policy in line with the RE100 criteria. We set sourcing
principles (carbon reduction, additionality, local
impacts, environmental impacts, human and labour
rights) which aim to maximise positive impact while
identifying and managing potential risks. Where
possible, we sign Power Purchase Agreements (PPAs)
and pursue on-site solutions.
Renewable energy source
9%
12%
3,129
Gwh
47%
25%
7%
Bioenergy
Hydro
Wind
Solar
Other
47%
7%
25%
12%
9%
45% energy from renewable sources
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For example, in 2023, we celebrated the opening of
the Mutkalampi wind farm in Finland. After signing a
Virtual Power Purchase Agreement (VPPA) in 2020
with our partners Signify, Nobian, and Philips, we are
now receiving renewable electricity that will power 27
of our European operations with renewable energy for
the next 10 years. Moreover, this year we announced
a 10-year PPA in the Lazio region of Italy with the 70
MW Pontinia agrivoltaic solar project developed by
Cero Generation. The project is estimated to reduce
emissions by approximately 40,000 tonnes annually.
Besides solar energy, over 65% of the site will be
dedicated to agricultural crops, maximising land use
and providing local employment opportunities.
In Nigeria, we announced a 15-year solar PPA with
Daystar Power Energy Solutions. This is a milestone in
a country with limited renewable electricity access.
The project includes a rooftop solar installation and
battery storage at our brewery in Lagos, expected to
cover approximately 20% of the brewery’s demand.
There are many markets where we operate today
where we cannot sign PPAs due to regulatory, supply
or permitting barriers. In these countries, we source
Energy Attribute Certificates (EACs) as a short-term
solution to stimulate the market while pursuing more
impactful options. For example, we sourced I-RECs for
the first time in India and Mexico in 2023 which
helped in reducing our scope 2 emissions.
Looking ahead
As we progress through our net zero journey, our
processes will mature and evolve despite the volatile
circumstances. We aim to continue deploying our
Integrated Net Zero Production programme across all
sites, improve energy efficiency in our breweries while
deploying renewable energy solutions to meet our
ambition. We aim to also expand our focus to
incorporate more decarbonisation roadmaps for
our own production and own logistics activities.
2030 goal
Reduce scope 3 carbon emissions
by 21%
Our ambition to reduce scope 3 emissions by 21%
against the 2018 baseline will help us achieve our 2030
goal and set us on the path for net zero across our value
chain by 2040. With the new science-based scope 3
FLAG (forest, land and agriculture) target, we will
update our near-term scope 3 goal. For more details,
see next page ‘The future of our net zero journey’.
Our progress
In 2023, we are pleased to reach a new milestone and
disclose our full carbon footprint alongside financial
data for the first time in our history.
In 2023, our total scope 3 emissions were
14.1 million tonnes of CO2-eq (2018: 17.6 million).
This accounts for 92% of our total carbon footprint and
is a decrease of 20% versus 2018 and 12% versus 2022.
This decrease is mainly driven by a decline in purchased
packaging materials due to lower product volumes sold
and changes in methodology. Furthermore, our active
engagement with our strategic suppliers has supported
their transition towards renewable energy, directly
impacting our scope 3 emissions.
We started working on internal carbon reporting in
2019 and have consistently improved the scope and
quality of data. In 2022, we disclosed our carbon
footprint two months after our annual report.
Highlights and challenges
We continue to focus on the top four categories
which account for more than 70% of total emissions:
Packaging, Agriculture, Cooling and Logistics.
Greenhouse gas and intensity emissions
2023
ktonnes CO2-eq
2023
Intensity per hl
Scope 1 GHG emissions
Scope 2 GHG emissions1
Scope 3 GHG emissions
Purchased goods and services
Capital goods
Fuel and energy-related activities
Upstream transport and distribution
Waste generated in operations
Business travel
Employee commuting
Upstream leased assets
Downstream transportation and distribution
Use of sold products (refrigeration)
End-of-life treatment of sold products
Franchises
Investment
Total GHG emissions
1 Scope 2 follows market-based approach.
3.6
0.7
51.3
993
200
14,116
9,803
666
259
1,547
68
62
74
91
188
1,168
39
41
110
15,309
55.7
Following our analysis completed in 2022, we
identified areas of impact across these categories:
strategic sourcing and supplier engagement,
efficiency and optimisation, market intervention
and product design.
In 2023, we started exploring and implementing
high impact initiatives that have a strong business
case across these four areas.
Supplier engagement
Reducing emissions across the value chain will only
be possible through supplier engagement in all
categories. Strategic meetings aim to identify and
develop shared solutions that span the entire value
chain. This is how we share our knowledge with
suppliers and support them in creating
decarbonisation roadmaps.
In 2023, a total of 39 suppliers registered in the
Supplier Leadership on Climate Transition (SLoCT),
an industry consortium launching a climate school
to develop suppliers across the value chain.
Through our Low Carbon Farming Programme we
engage with farmers via our raw materials suppliers
to advise them on sustainable practices such as cover
cropping, no tillage, organic matter use, seeds and
fertiliser use. Farmers decide which approaches to
adopt as they lead their own farming and harvesting
process. Pilots in 2022 delivered a 13% reduction in
CO2 emissions and an 81% increase in CO2
sequestration because of methods adopted.
In 2023, we worked on almost 300 pilots including
in Mexico, Brazil, France, UK, Ireland, USA, the
Netherlands, Greece and Australia. We will monitor
and report on the outcomes of these projects. Our
aim is to deliver 500 pilots by 2025 and to scale the
programme across volume, crops and regions.
Apart from the Low Carbon Farming programme,
we regularly engage with our Tier 1 raw materials
suppliers and encourage them to set science-
based targets.
To date, 13 suppliers, representing around 63% of our
agriculture-related emissions, are committed to SBTi,
out of which five have already set targets.
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As part of our Packaging the Future programme,
46 packaging suppliers are committed to SBTi, out of
which 24 have already set near-term targets. We also
launched specific engagements with our glass and
aluminium suppliers. We are supporting our glass
suppliers through roadmap developments that focus
on increasing energy efficiency and use of renewable
energy. We have identified concrete opportunities
with suppliers and will work with them to deliver them
in the coming years.
The cooling category accounts for 8% of our total
carbon footprint. In 2023, HEINEKEN took part in the
first ‘Coolition’ conference in partnership with BIER.
Coolition is a value chain coalition consisting of 41
companies and more than 80 members working
across three work streams: energy efficiency and
innovation for commercial refrigeration, standards
and legislations for energy consumption, and
circularity of fridges.
Optimisation
Optimising our logistics activities to reduce energy
consumption remains a priority, especially for
categories where technology is not yet scalable. For
our outsourced transport and warehouses, we focus
on optimisation of warehouse capacity and transport
by deploying the right capabilities and digital tools
that support both our operating companies and
logistics service providers for more efficient operations.
Reducing the distance our products travel is best for
the environment and optimising the trips and the
trucks used to distribute our products is essential to
reducing scope 3 logistics emissions. In Mexico, we
have reduced our empty return trips and made sure all
trucks – both for inbound or outbound trips – are
always transporting materials or finished products for
the operating company. In Nigeria, one of our biggest
markets in Africa, the local team engaged with the
logistics service providers to invest in newer, larger
and lighter trucks to reduce the number of trips on
the road.
Market intervention
Investing in the right technologies for the future is
essential for our net zero journey. In 2023, HEINEKEN
invested in a company called Fertighy alongside
Siemens Financial Services, EIT InnoEnergy, RIC Energy,
MAIRE and InVivo. Together, we aim to develop low
carbon fertiliser solutions. With this project, we want to
stimulate demand for low carbon fertilisers and have a
wider positive impact in the agricultural industry.
We continue to explore technologies to support the
electrification of freight. By the end of 2023, we have
purchased 57 electric trucks in Austria, France, Mexico
and Brazil, among other countries. We have also
partnered with Einride to introduce five heavy-duty
electric trucks powered by renewable electricity
between HEINEKEN’s Den Bosch brewery and
Duisburg distribution centre in Germany. This is a
promising new and scalable solution for heavy-
duty transport.
Product design and circularity
We are taking concrete steps with our aluminium
value chain, encouraging them to set science-based
targets, transition to renewable electricity and increase
recycled content in their production since the use of
recycled content in our aluminium cans reduces
energy needs during can production. Through this
engagement, we are already seeing results and
reducing aluminium-related emissions.
Moreover, our new circularity strategy (see next page)
is focused on three key areas: Reuse, Recycled content
and Recycle by design. It will contribute to reducing
scope 3 carbon reductions by increasing reuse of
resources and driving up the recycled content of our
glass and cans in collaboration with suppliers.
Looking ahead
Scope 3 emissions are complex and their
decarbonisation requires partnership and collaboration
with many different parties in the value chain along
with investment in innovative solutions. We are making
progress and we will continue to engage with our
operating companies to find the right solutions that will
unlock further reduction of emissions.
For more information, see page 140 in the
TCFD section
Carbon credits and removals strategy
2030 goal
We have started developing a carbon credit and
removals strategy. In the coming years, we will start
building our portfolio of compensation and removals
actions focused on key criteria: high quality,
permanence, positive impact on local communities
(creating jobs, fair livelihoods, gender diversity) and on
nature (increase water retention, restore biodiversity).
The future of our net zero journey
As of 2024, we will begin integrating our updated
science-based targets into our global approach.
Meaning that our near-term scope 3 goals will be:
– Reduce 30% of scope 3 FLAG emissions
(agriculture) by 2030
100% sustainably sourced ingredients
(barley and hops)
We aim to achieve our goal by intensifying our
support to suppliers and adopting higher agricultural
standards in our supply chain.
Our progress
In 2023, 98% of our hops (2022: 96%) and 77% of
our barley (2022: 73%) came from sustainable
sources, resulting in 77% coming from hops and
barley. Overall, 68% of all our crop-related raw
materials came from sustainable sources (2022: 67%).
– Reduce 25% of scope 3 non-FLAG emissions by 2030
Highlights and challenges
Our near-term goal for scope 1 and 2 ( reach net zero
in scope 1 and 2 by 2030) remain the same as well as
our long-term ambition to reach net zero across the
value chain (scopes 1, 2 and 3) by 2040.
With these combined targets we aim for a 33%
emission reduction across scope 1, 2 and 3 by 2030.
As part of our new FLAG target we will also aim to
have no deforestation across our primary crops, with a
target date of 2025.Through our existing initiatives
(Low Carbon Farming and low-carbon fertiliser), we
have already started to work on this and we will
incorporate our efforts towards the assessment that
we have started for science-based targets for nature.
As of 2024, we will change our baseline year from
2018 to 2022 to reflect the Company's most accurate
inventory and start measuring progress against this
new 2022 baseline.
Following the SBTi Net-Zero Standard, we are driven
to regularly review our targets and strategy at least
every five years.
We base our standards for sourcing sustainably
cultivated crops on the globally recognised
Sustainable Agriculture Initiative (SAI) platform
principles. This requires the efficient production of
safe, high quality agricultural products in a way that
protects and improves the natural environment,
enhances the social and economic conditions of
farmers, their employees and local communities, and
safeguards the health and welfare of farmed species.
We have made good progress in improving farming
practices and sourcing sustainable crops by working
with local suppliers.
Developing responsible agricultural supply chains to
increase our volumes of sustainable raw materials is a
key priority for our growing business and a crucial lever
for reducing our carbon footprint.
Growing the raw materials that are used in our
products makes a significant contribution to our value
chain emissions. Other environmental impacts relate
to water resources, soil health and biodiversity.
Looking ahead
We keep fostering our suppliers to adopt SAI principles
and to incorporate more agricultural areas into
sustainable practices around the world.
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Maximise circularity
Today’s patterns of consumption and production are
a leading cause of climate change, biodiversity loss,
waste and pollution. Continued population growth will
only increase pressure on natural resources. We must
transition from a linear economy to a circular one to
protect the planet, mitigate climate change and
safeguard finite resources.
Introduction
Why it matters
A circular economy moves us away from a ‘take-make-
waste’ system towards one that is focused on
‘eliminate-circulate-regenerate’. By stopping waste
being generated in the first place and embedding
circular principles throughout the value chain, we can
significantly reduce environmental impacts and
conserve resources.
Transitioning to a circular economy is important to
HEINEKEN as it reduces our reliance on finite
resources, addresses supply risks and avoids negative
externalities rising from waste.
Improving circularity will play a significant role in
delivering our scope 3 carbon emissions targets
and having a positive social impact on communities
while delivering sustainable and balanced growth
for the Company.
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2030 goal
Our 2030 goal
Turn waste into value and close
material loops throughout the
value chain
Our progress
Our circularity strategy
In 2023, we developed a circularity strategy for our
products and operations that aligns with the principles
of the Ellen MacArthur Foundation. Based on the
outcome of our double materiality assessment,
the strategy focuses on packaging, which builds
on existing work we have been doing to improve
circularity of production waste and water in our
operations.
The strategy prioritises three areas to embed a closed
loop approach in our packaging development: Reuse,
Recycled content and Recyclable by design. These
priorities include goals which are designed to be
transparent and achievable and which prioritise the
areas where we can make the biggest impact.
Reuse
Our aim is to increase our volumes reuse and decrease
the amount of new packaging material we need to
source.
Our 2030 goal
43% of volumes sold in reusable
format
Achieving our goal will require significant effort and
collaboration with multiple stakeholders. We will need
to co-create complex reuse infrastructure and launch
innovations that make reusable formats aspirational.
Recycled content
Our focus is on growing the volume of recycled
content and closing the loop on packaging by
increasing recycling rates.
50% recycled content in bottles
and cans
We will drive up recycling rates in 10 priority markets
and regions and collaborate with suppliers to increase
the availability of high-quality recycled content.
Recyclable by design
When it comes to creating packaging that is
recyclable by design.
Our 2030 goal
99% of all packaging is recyclable
by design
We will ensure that our primary and secondary
packaging is technically designed to fit
into a recycling stream which has been proven
to work at scale in a representative market for
the company.
Highlights and challenges
Our circularity strategy requires a holistic approach
and engagement with stakeholders across the entire
value chain to unlock opportunities to boost the
circular economy.
Reuse: Transitioning from one-way packaging to
reusable formats.
Increasing the share of reusable packaging in markets
where the infrastructure to collect and process does
not yet exist is a challenge that must be addressed.
It will require cross-industry collaboration to set-up the
required infrastructure with an optimally designed and
regulated operation system. We will continue to work
on launching new product innovations to increase the
share of reusable formats in markets where the
infrastructure is available.
In 2023, HEINEKEN Cambodia transitioned to
reusable glass bottles with over 1,600 on-trade outlets
in urban areas signing up so far to implement crates
and support #ReturnTheBottle.
After six months, a quarter of the overall bottle volume
in the country is now sold in crates with a bottle return
rate of over 80%.
In the Netherlands, Desperados is the eighth beer
brand to switch to reusable bottles in the catering and
retail industry meaning more than 90% of HEINEKEN
Netherlands bottles will be filled and sold in a refillable
format in 2024.
Recycled content: Collaborating across the value
chain to maximise recycled content.
We are working on two key enablers to close the
loop for our packaging. Firstly, we can better optimise
can-to-can recycling. Although aluminium is well
recycled, it often ends up in other applications.
Second, there is room to increase glass recycling rates
in some markets where it is still low due to lack of
infrastructure and incentives.
The recycled content of our packaging portfolio is
mainly driven by suppliers, and we must engage in
negotiations and partnerships to achieve our goal.
We are collaborating with partners across the value
chain to maximise the recycled content in aluminium
cans through our global initiative Packaging the
Future. In 2023, we tested a high recycled content
solution ahead of the can deposit return system
implementation in the Netherlands. We incorporated
95% recycled content made from used beverage
cans. To make this a success we work with partners
who span the value chain, like the can maker (Can-
Pack), rolling mill (Constellium) and aluminium
smelter (Alcoa).
To create the best market environment for the specific
packaging waste material we also invest in collection
projects. In South Africa, we are collaborating with
local entrepreneurs to establish collection points for
recyclable materials on glass waste and returnable
bottles. Collection hubs serve as crucial centres for
sorting and processing waste. These create
employment opportunities and generate sustainable
income for bottle collectors in low-income
neighbourhoods.
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Closing the gap on the last 1% of sites to become
landfill-free is a challenge due to local complexities. For
example, in remote places like island states alternative
solutions are harder to find while in other locations
there is a long chain of smaller sites which cannot cost
effectively meet the requirements.
Looking ahead
We will review each situation and identify possible
solutions for the remaining sites in 2024. For example,
we will seek technological solutions that can be
implemented in remote sites, continue working on
technologies that can create value from our waste
products, and work with our local stakeholders to
improve waste management services in the areas
where we operate.
Highlights and challenges
Most of our production waste comprises
biodegradable co-products like brewers’ grain, surplus
yeast, anaerobic sludge from water treatment plant,
spent kieselguhr and spent alcohol. We preserve the
nutritional value of co-products by recirculating them
in animal and human food applications. Where this is
not possible, we recycle them as bio-based materials
or soil organic fertilisers. More than 40 of our
operations spanning all regions now harvest the
biogas from anaerobic digestion in our wastewater
treatment plants as a renewable energy source.
Project Circle is our new initiative to give new life to
spent grains from our breweries. The project is based
on an innovative separation technology that creates
proteins for food and generates renewable energy.
The first industrial implementation will be at our
brewery in Mons-en-Baroeul in France. Following a
successful kick-off which brought together internal
and external experts, construction of the site and
preparation for the installation of the technology has
begun. Once fully operational and optimised, we will
explore the potential for rolling out the technology to
other sites around the world.
Recyclable by design: A closed loop approach is
more easily achieved when a product is designed to
be recycled or reused at its conception. The majority
of our packaging is already designed to be recyclable
and is recycled at scale across the globe. Our two
main challenges are to improve the recyclability of
our caps and secondary packaging film. To do so we
need to improve the designs and recycling at scale
through market interventions. We will also ensure all
innovations meet the recyclable by design standards
and are further integrating this into our sustainable
innovation process.
Looking ahead
In 2024, we will establish our governance and
operating model, develop roadmaps and start
pilots in priority markets before we scale up action
across the business.
We will look to identify partnerships and co-develop
collaborative actions across the value chain.
At the same time, we will focus on upskilling our
workforce to empower operating companies to
deliver our strategy.
We developed our circularity strategy in 2023
and will start reporting on our goals in 2024.
2025 goal
Zero waste to landfill for all our
production sites
Our progress
For the current target of zero waste to landfill in 2023,
120 of our 168 sites were landfill-free (2022: 143 of
186 sites). The drop in landfill-free sites was mostly
due to divestments and acquisitions. A small number
of sites lost their landfill-free status due to challenging
local circumstances and lack of reliable access to
waste management services.
By volume over 99% of waste was diverted from
landfill, and therefore less than 1% went to landfill.
Destination of co-products
We embed circularity in our operations by converting
spent grains into animal feed and human food
sources, generating organic fertiliser from our
wastewater sludge and recycling water within our
breweries. This table shows where our waste from
production ended up in 2023 (the higher up in the
hierarchy, the better).
Co-products and waste hierarchy
Destination
1. Post-industrial reuse
2. Human consumption
3. Animal feed
4. Materials recycling
5. Compost/soil improvement
6. Energy (biogas)
7. Combustion with energy
8. Combustion without energy
9. Landfill (incl. dump and
unknown destination)
ktonnes
28
67
%
1%
1%
4,092
80%
406
336
36
56
8
63
8%
7%
1%
1%
0%
1%
Total
5,092
100%
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Towards healthy
watersheds
Why it matters
Water is essential to life and a basic human right – we
cannot live without it. However, freshwater ecosystems
are under increasing pressure from the competing
demands of agriculture, business and communities.
Globally, over 70% of freshwater resources are devoted
to crop and livestock production. Population growth,
economic development, and urbanisation are driving up
demand and adding pressure on water quality. At the
same time, one of the primary effects of climate
change is the disruption of the water cycle.
Changing weather patterns are making some places
wetter and others much drier. In many parts of the
world, water is becoming a scarce resource. Without
significant changes in how we consume water, water
demand is expected to outstrip supply by 40% in 2030.
Water is also essential for our product: without water,
there is no beer. This is one of the reasons why this topic
has been high on our agenda for decades. We take a
holistic approach which looks beyond the walls of our
breweries and puts the health of local watersheds front
and centre. This includes responsible water use,
effective wastewater management, and supporting
water security in our supply chain, production and
communities – particularly in water-stressed areas.
Understanding our water risks
We have assessed water risks across our breweries and
beyond since 2010. Our three-step approach to
assessing water risks comprises internal and external
evaluations and verification. Every year, our operating
companies conduct a local water security assessment.
We also carry out a Global Water Risk Screening at least
once every five years. For this, we use a water risk
mapping tool developed by the World Resources
Institute (WRI) to identify sites located in high water risk
areas and in addition, we include geospatial data as an
extra layer to better understand water risks that are not
accessible through the WRI tool.
Sites identified as high-water risk are further evaluated
through in-depth local Source Water Vulnerability
Assessments conducted by a third party to confirm
water-stress conditions in areas where we operate.
Currently, 32 of our sites in 15 countries are in water-
stressed areas (see map). We are assessing areas in
which our new sites operate (especially in India) to
confirm their water stress status, anticipating an
increase in the number of sites in the coming year.
For more information on water see page 141 in
the TCFD section
Water in our supply chain
Most of the water we use is dedicated to growing our
crops, with agriculture representing approximately
90% of our water footprint. The primary contributor to
our agricultural footprint is our main crop - barley -
which is highly water efficient and relatively tolerant to
drought. In most countries, barley is rainfed and unlike
many other crops it does not require irrigation.
However, in certain sourcing areas, structural irrigation
is required to maintain optimal soil moisture. We
anticipate that this need will grow in the future.
We address water concerns via our Sustainable
Sourcing programme through dedicated conservation
agriculture projects, such as in Mexico.
In 2023, we initiated a comprehensive Water Global
Screening, focused on our top suppliers and primary
sourcing areas. This yielded valuable insights into
regions experiencing water stress and into the
maturity of our suppliers in managing water resources.
Our next step involves complementing our initial
screening with a broader assessment of our supply
chain following guidance provided by the Science
Based Targets Network (SBTN) which focuses on both
water quantity and quality. This assessment will
enable us to identify priority sourcing countries that
require attention. The initiative marks the first phase
of our Water in Agriculture programme which will
guide us incorporating effective measures to address
water quantity and quality alongside our existing
sustainable agriculture programmes.
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Water in our production
Average water usage (global)
(hl/hl beer, cider, soft drinks, water and wine)
Total water withdrawal
(including sources and excluding export water*)
2030 goal
Reduce average water usage to
2.6 hl/hl in water-stressed areas
and 2.9 hl/hl worldwide
Water serves various purposes in the production of
beer, including cleaning, steam generation, cooling
and, of course, the product itself.
Our progress
Despite efficiency loss due to reduced production
volumes, we have maintained water efficiency at
3.0 (hl/hl) in our breweries in water-stressed areas
and improved our global average water usage across
all our breweries to 3.2 hl/hl (2022: 3.3), progressing
towards our 2030 targets.
Highlights and challenges
In Europe, we identified 290 projects to increase water
efficiency, including a 12-month pilot in Spain that
successfully delivered a 10% reduction in water usage.
We are also actively engaged in a water acceleration
programme, focused on forming partnerships with an
external engineering company and cleaning and
disinfection (C&D) suppliers to unite expertise and
on-the-ground support. For example, our Ponta Grossa
brewery in Brazil improved water efficiency by almost
7.5% through a collaborative pilot project with its
local C&D partner, setting the benchmark for
other breweries.
We faced some efficiency loss due to a decrease in
volumes in regions known for high water efficiency.
At the same time, we are increasing the reuse of
bottles to advance our circularity and net zero agenda,
which, in turn, has the knock-on effect of increasing
water use for washing. Despite this, the continued
implementation of our 'good practices platform'
helped ensure that we maintained our water usage
in water-stressed areas, rather than increasing it,
and even improved our efficiency overall.
14%
86m m3
51%
35%
Groundwater
Third-party water
Surface water
* Export water is not used for production
Looking ahead
51%
35%
14%
We are advancing our efforts through the water
acceleration programme and implementing
sustainable water management projects in
collaboration with our partners. We aim to add
20 new breweries to the acceleration programme in
the coming years based on their potential impact on
water efficiency. Sites included in the programme
will increase efforts and move from planning to
implementation of water efficiency initiatives.
36% improvement of average water
usage (hl/hl) compared to 2008
Average water usage (water-stressed areas)
(hl/hl beer, cider, soft drinks, water and wine)
€19m savings from average water
usage programmes since 2009
2023 goal
Treat 100% of wastewater
of all breweries
Our beverage and malting plants generate
wastewater that requires treatment before discharge.
Wastewater treatment plants are either operated on-
site or managed by a third party.
Our progress
In 2023, 163 of our 1681 breweries have wastewater
treatment. We built six new wastewater treatment
plants in Burundi (two), New Zealand, Nigeria and Papua
New Guinea (two), ensuring that nearly all our breweries
had a wastewater treatment facility installed: 167. One
brewery does not have a wastewater treatment plant.
Four of the newly constructed treatment plants are in
the final phase of commissioning and will be fully
operational in the first quarter of 2024.
In 2023, 98% of our total wastewater volume was
treated before discharge (2022: 97%).
Highlights and challenges
The four breweries faced challenges in commissioning
new wastewater treatment plants on time due to
unforeseen external factors, such as supplier
constraints and customs-related issues. They will be
fully operational in the first quarter of 2024.
Looking ahead
We remain committed to treating 100% of our
wastewater before discharge worldwide and will
ensure this continues by incorporating it as a standard
in our internal HEINEKEN rules. Regarding our new
breweries, all of them are constructed in line with our
Green by Design standard, which mandates
wastewater treatment. Furthermore, any future
acquired brewery will have wastewater treatment in
place, in accordance with local regulations or
HEINEKEN’s standards - whichever is better.
1 In the 2022 report, we mentioned 186 breweries; however, this number
decreased in 2023 due to divestments, such as our business in Russia.
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2030 goal
Maximise reuse and recycling in
water-stressed areas
We see opportunities to create healthier watersheds
by maximising water circularity. This means
recovering, reusing and recycling on-site and off-site
treated wastewater for other purposes.
Introduction
Our progress
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By the end of 2023 we had 23 water reclamation
plants in operation that treat and reuse wastewater
for general cleaning to reduce our reliance and impact
on freshwater (2022: 6). Most of these plants are
related to our breweries in India.
Highlights and challenges
In 2023, we commenced a partnership with paper
manufacturer Greenpaper in Monterrey, Mexico. Our
brewery’s treated wastewater is now being used in the
production of paper and cellulose, benefiting the local
watershed, the community and both businesses. In
many geographies we continue to face local
contextual challenges ranging from infrastructure,
perceptions and regulations related to the use of
treated recycled water.
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Looking ahead
We will explore further opportunities to reuse water on
our sites and collaborate externally with others.
Other
Information
We are a dedicated member of the UNGC’s CEO
Water Mandate Water Resilience Coalition – a global
partnership between the UN, companies and NGOs
collaborating to reduce water stress by 2050.
Emphasising our commitment to water resilience and
aligning with the UN Forward Faster initiative, we
endorse the CEO Water Mandate. This aims to
collectively achieve a positive water impact in at least
100 vulnerable water basins through UNGCs’ Water
Resilience Coalition, a partnership between the UN,
companies and NGOs collaborating to reduce water
stress by 2050. The commitment was underscored at
the historic UN 2023 Water Conference where
HEINEKEN joined over 50 other businesses in an
‘Open Call to Accelerate Water Action’. We are also
part of the Beverage Industry Environmental
Roundtable (BIER), a technical coalition of leading
global beverage companies working together to
advance environmental sustainability within the
beverage sector.
Looking ahead
Our breweries in water-stressed areas have developed
roadmaps which set out the actions they will take to
support a healthy watershed by 2030, including water
balancing. Based on ongoing water-risk assessments
we expect the number of breweries to increase over
time. We will work on sites in water-stressed areas that
do not yet have a water balancing programme in
place to identify the right partners to build water
resilience in the watershed.
Water in our communities
Highlights and challenges
Each watershed is unique, being shaped by the
ecosystem and biodiversity it supports as well as local
governance, stakeholders and community needs. This
means our sites must take a contextual approach
based on local circumstances and that progress may
be faster and more straightforward in some other
locations than others.
In Ethiopia, we renewed our partnership with World
Vision International. This partnership aims to
comprehensively restore the watershed, improve
carbon sequestration and livelihoods. In the last three
years the project has led to over 500 hectares of
rehabilitated land and half a million trees planted. In
its second phase, it will serve as a broader initiative,
providing a collaborative platform for multiple
agencies in Ethiopia's watershed management.
In Algeria, we embarked a collaboration with local
partners to initiate a sustainable agriculture project
supporting local farmers to improve irrigation
efficiency and promote soil restoration.
And in Tunisia, we initiated a project to provide access
to clean water for 400 families in the Jebel Trifi region.
This initiative reflects our focus in WASH benefiting
families by ensuring access to safe drinking water and
contributing to water conservation efforts on both
regional and national level.
Partnerships for change
Many different users tap into shared water resources
and maintaining the health of the watershed requires
collective multi-stakeholder action. As well as
partnering with NGOs like WWF in Vietnam and
Fundación Avina in Brazil, we actively participate in
several local water funds and alliances around the
world, including Mexico and Indonesia.
Our approach in communities is to implement
programmes to replenish watersheds in water-stressed
areas and provide access to safely managed water in
targeted countries. In 2023, we were actively involved
in Water, Sanitation, and Hygiene (WASH) projects in
several countries, including Myanmar and India.
Additionally, the HEINEKEN Africa Foundation
supported projects in Nigeria, Ethiopia, Burundi, South
Africa, Mozambique, and Sierra Leone. Following a
review of our approach in 2023, we plan to be more
intentional in supporting community water projects in
the coming years.
2030 goal
Fully balance water used in our
products in water-stressed areas
Our aim is to fully balance the water used in our
products in water-stressed areas. This means we will
return to the local watershed every litre of water that
goes into our product. We do this through water
balancing projects that replenish water in the
watershed that supports our operations. Projects
range from nature-based solutions like large-scale
reforestations and rainwater harvesting to
infrastructure improvement projects which reduce
water leakages. We use the Volumetric Water Benefit
Accounting standard launched by the World
Resources Institute (WRI) to measure the outcomes
and impacts of water balancing.
Our progress
By the end of 2023, 28 of our 32 sites in water-
stressed areas had active watershed replenishment
programmes in place (2022: 26), including large-scale
reforestation efforts in Vietnam and Nigeria. Nine out
of 32 water-stressed sites (28%) are more than 100%
water balanced (2022: 29%). The total number of
water-stressed sites in scope changed from 31 to 32
due to the divestment of two sites in Tunisia and the
identification of three sites in Burundi, Vietnam, and
Haiti as being water-stressed.
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Biodiversity
Global biodiversity is declining faster than ever before
– mainly driven by human activity. WWF’s Living
Planet Report 2023 finds that wildlife populations
have declined by an average of 69% in the past 50
years and 1 million animal and plant species are
threatened with extinction (IPBES, 2019).
Biodiversity underpins the health of local
communities; it is directly related to food security,
livelihoods, provision of shelter and materials, and
a wide range of other ecosystem services. Biodiversity
is also crucial to business with more than half of
the world’s GDP – approximately $44 trillion –
moderately or highly dependent on nature and
its services (WEF, 2021).
Why it matters
As a global company, we see these external
developments and increasing stakeholders’ interest
leading to a need to better understand our impacts
and dependencies on nature and biodiversity across
the value chain. At HEINEKEN, we depend on nature
for essential raw materials such as water, barley, hops,
yeast, and fruit extracts.
At the same time, our activities have both direct and
indirect impacts on biodiversity through our use of
land and water, GHG emissions, pollutants to the
environment and waste generation. Understanding
this delicate balance of dependencies and impacts
shapes our approach and demonstrates the
importance of having a holistic strategy to
protect the natural world.
Highlights and challenges
Protection and restoration of biodiversity is closely
interrelated with our existing efforts to reach net zero
emissions, support healthy watersheds, sustainably
source raw materials, promote regenerative
agriculture, and increase circularity.
Many of our existing Brew a Better World goals
contribute to protecting biodiversity, including those
set in our Net Zero roadmap to mitigate GHG
emissions. We are expanding many programmes that
contribute to the preservation and restoration of
biodiversity including our Low Carbon Farming
Programme and water balancing projects. For
example, in Ethiopia the second phase of water
balancing activities will reduce environmental
degradation and ground water depletion in Bedele.
In the last three years the project has already led to
over 500 hectares of rehabilitated land and half a
million trees planted.
We are also exploring opportunities to promote
regenerative agriculture. In March 2023, we launched
a pilot project with Irish Distillers and Earthworm
Foundation to adopt regenerative practices in barley
farming with a specific emphasis to enhance soil
health, water and biodiversity. HEINEKEN Africa
Foundation’s new strategy [link to page] also aims to
adopt programmes that focus on regenerative
farming practices for smallholders.
Our partnerships
We started work to gain deeper insights into the
biodiversity risks and opportunities across our global
value chain. In 2023, we have joined the Science
Based Targets Network (SBTN) Corporate
Engagement programme and the Taskforce on
Nature-Related Financial Disclosures (TNFD) forum.
This will help us guide our assessment of nature across
the value chain and further support development of
our biodiversity approach.
In addition, our operating companies around the
world implement a wide range of projects such as
reforestation to enhance local biodiversity, in
collaboration with local partners. For example, in
Vietnam, our partnership with WWF aims to reforest
one of the most important water conservation areas
of the Tien River basin that includes four canals and is
home to hundreds of bird species and other native
animals and flora. In Brazil, we have a long-standing
partnership with a NGO, SOS Mata Atlantica, to
reforest 500 hectares of farmland and to support a
nursery which has an annual capacity to produce
750,000 seedlings of 110 species native to the
Atlantic Forest region.
The partnership has resulted in a 156% increase in
local biodiversity over the last 15 years.
Looking ahead
We aim to strengthen our biodiversity approach by
carrying out a comprehensive assessment of our
supply chain and direct operations in 2024. This
assessment will serve as the foundation for developing
our biodiversity approach. To guide our efforts, we will
draw upon the expertise and recommendations of
SBTN and TNFD, enabling us to identify key areas and
activities within our value chain that require attention
to combat biodiversity loss and promote regeneration.
Additionally, we will continue to integrate biodiversity
considerations into our existing Brew a Better World
initiatives and projects, such as our Net Zero roadmap
and water balancing projects, while also advancing
our efforts in regenerative agriculture.
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Environmental data table 2023
This table provides an overview of the environmental performance of our operations. It includes indicators for production, energy consumption,
air emissions, refrigerants and wastewater from our beverage production plants, malting plants and other operations.
Performance indicator
Beverage production
Unit
Mhl
2021
253.9
2022
281.5
2023
258.6
2021
253.9
2022
281.5
2023
258.6
2021
2022
2023
2021
2022
2023
Total all sites
Breweries, cider, soft drink and water plants
Malting sites
Other and packaging
Introduction
Malt production
ktonnes
726
769
694
726
769
694
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Total combined energy consumption
Total energy consumption from non-
renewables
Total energy consumption from
renewables
Thermal energy consumption
Renewable thermal consumption
self-generated
Renewable thermal consumption
Purchased
Electricity consumption
Renewable electricity consumption
self-generated*
Renewable electricity consumption
Purchased*
HC-based refrigerants lost
Other
Information
HC-based refrigerants lost
Water withdrawal
Wastewater quantity
Wastewater organic load
before treatment
Effluent organic load discharged
to surface water
* 2021 and 2022 numbers have been restated.
GWh
GWh
GWh
GWh
GWh
GWh
GWh
GWh
GWh
kg R11
equivalents
ktonnes
CO2-eq
Mm3
Mm3
ktonnes COD
ktonnes COD
6,983
7,622
7,009
6,342
7,066
6,508
5,116
4,808
3,880
4,534
4,332
3,473
1,867
2,814
4,890
5,321
3,129
4,832
1,808
2,734
4,337
4,850
3,035
4,408
530
1,160
1,113
530
1,131
1,086
257
2,093
318
2,301
339
2,177
257
2,005
318
2,216
339
2,101
30
42
34
1,049
1,295
1,643
153
16.8
87.5
54.9
192
10.9
191
16.9
94.7
60.9
218
8.9
166
24.2
86
54.7
207
7.5
30
991
153
16.8
85.4
53.4
186
10.7
41
34
1,244
1,577
191
16.9
92.5
59.3
212
8.7
166
24.2
84
53.2
203
7.3
610
555
56
527
0
0
83
0
55
0.1
0
2
1.4
5
0.2
537
461
76
456
29
0
81
0
47
0
0
2.1
1.5
5
0.2
480
392
88
408
27
0
71
0
61
0
0
1.9
1.2
4
0.2
31
27
4
26
0
0
5
0
4
0
0
0.1
0.1
1
0
20
16
5
16
0
0
5
0
5
0
0
0.1
0.1
1
0
21
16
5
16
0
0
5
0
5
0
0
0.1
0.2
1
0
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Walking the talk towards an
inclusive, fair and equitable world
We are raising the bar to create a fair and safe workplace and to
promote diversity, equity and inclusion. This means achieving gender
balance at senior levels, paying our employees a fair wage and
demanding fair living and working standards for third-party employees
and brand promoters. Our safety, health and well-being strategy aims
to embed a leading safety culture and our social impact initiatives are
aligned with relevant UN SDGs.
Contributing to the UN SDGs – Path to an inclusive, fair and equitable company and world:
Learn more in the Social section
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Embrace inclusion
& diversity
Why it matters
Diversity, Equity and Inclusion (DEI) fosters a sense
of true togetherness and drives us to seek meaningful
connections with our employees, consumers and
customers.
Our DEI approach is built on the belief that diversity
of thoughts drives innovation and performance.
It starts with courageous leadership which is why
we nurture bold and caring leaders who create
space for everyone, equally.
Our diverse employees make our company as strong
and as unique as our brands. Equal opportunities and
fair treatment are fundamental building blocks of an
inclusive environment.
Our DEI strategy follows three key principles:
1. We accelerate DEI, starting with courageous
leadership.
2. We all contribute to fostering an inclusive
environment.
3. We create equal opportunity in all the moments
Sustainability
Review
that matter.
Embed our DEI policy
Other
Information
We empower our leaders to role model inclusive
practices, develop inclusive teams and take
responsibility and accountability for the DEI agenda.
Our ambition is to set up DEI councils across all
operating companies to fully embed DEI in our global
operations. Council members work with the local
managing director to support the delivery of the
global DEI strategy. By the end of 2023, 75% of our
operating companies had a DEI Council in place.
Fostering an inclusive environment
We aim to create an environment where people can
share their views freely and be engaged through
inclusive dialogue. We foster a safe and inclusive
culture that ensures psychological safety and provides
learning and development opportunities for everyone
that support DEI and personal growth.
In 2023, our local operating companies and functions
conducted more than 300 listening and dialogue
sessions to understand the impact and progress of DEI
action plans. DEI Ambassadors supported functional
leaders to listen directly to employees to understand
their views and inspire action.
Creating equal opportunities in all the moments
that matter
We embed equal opportunities in HEINEKEN’s way of
working as well as across our recruitment and career
development processes. Inclusive policies and tools
reflect our values, operating companies and global
functions integrate DEI into their people plans, talent
management strategies, employee engagement
surveys and everyday business practices. By the end of
2023, 78% of operating companies and functions had
reviewed and updated their key people processes to
further reflect DEI.
43% of participants have been promoted to more
senior positions in the organization. With over 139
women having completed the programme since its
inception, 2023 marked the launch of the WIN Alumni
Network to nurture strong female role models who will
contribute to mentoring and inspiring emerging
female leaders.
Our operating companies are also conducting
leadership development programmes for women.
In Mexico, the Women to Grow programme aims to
accelerate female talents that are part of a succession
pipeline for senior and managerial roles in Mexico.
The first 31 rising female leaders undertook a 12-
month development journey comprising virtual
master classes and face-to-face workshops.
Participants learnt how to increase their impact and
influence, visibility, networking, self-leadership and
personal branding, as well as developing a personal
development plan and having a mentor or coach to
guide their career development. They also attended
connect sessions with the management team and
female senior leaders.
Our efforts to build a more inclusive and equitable
workplace were recognised in 2023 by the LinkedIn
Talent Awards, and the World Economic Forum
included our Women in Sales initiative as a DEI
Lighthouse.
Looking ahead
In 2024, we will launch a leadership development pilot
– the Women Summit – specifically created for senior
female leaders to level the playing field for women
within the organisation. Our women leaders have a
unique opportunity to be positive female role models
as we work to strengthen female succession pipelines
at all levels.
2025 goal
Gender balance across senior
management: 30% women
Our goal is to increase the number of women among
the HEINEKEN senior management population on our
path to gender balance with 30% women by 2025
and 40% by 2030.
Our progress
By the end of 2023, the representation of women at
senior levels reached 28% (2022: 27%).
Representation by gender in 2023
% women
% men
Supervisory Board
Executive Board
Executive Team
Total Management
Senior Management
Middle Management
Non-Managerial positions
Total workforce
Total promotions
IT/Engineering
New hires
Attrition
44
0
18
29
28
29
23
24
29
16
25
23
56
100
82
71
72
71
77
76
71
84
75
77
Highlights and challenges
We continue to develop our pipeline of talent at levels
below senior management and ensure fair and equal
opportunities when we attract, develop and promote
talent. Senior leaders in key functions have expanded
their commitments to develop and support a diverse
group of future senior managers.
WIN (Women Interactive Network) is a global
leadership development programme for women at
HEINEKEN conducted in partnership with an
independent academic institute, IMD.
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2023 goal
Looking ahead
Cultural diversity: across each region,
at least 65% of country leadership
teams are regional nationals
Embracing cultural diversity in our leadership is
strategically important and we will continue to create
space for everyone, equally, while sharing learnings
and best practices to strengthen our cultural diversity.
2023 goal
100% of our managers trained in
inclusive leadership
The HEINEKEN Inclusive Practices are designed to
spread awareness and understanding of how to
practice inclusion. The message is shared through
e-learnings and workshops focused on the ‘what,
why and how’ to apply each inclusive practice.
Our progress
More than 11,000 leaders completed the ALL Inclusive
Leadership programme in 2023, bringing the total
people managers trained to almost 100% (99.8%).
This engaging and interactive e-learning module is
mandatory for all people managers and available to
everyone in the organisation.
LGBTQIA+ inclusion
The employee resource group, HEINEKEN Open and
Proud (HOP), is active across our operating companies.
In 2023, HEINEKEN employees attended some of the
most iconic demonstrations of love world-wide taking
part in Pride Parades from Amsterdam, Brighton and
Madrid to Monterrey and São Paulo.
Embracing and celebrating diversity enriches our
lives and strengthens our business. As part of our
EverGreen strategy, we embrace the cultural diversity
of our operating companies, notably in country
leadership teams.
Our progress
At the end of 2023, three out of four regions reached
65% of regional nationals in their leadership teams.
All regions embraced developing their regional talents
into leadership, and the dynamics of the fourth region
required blending developing own leaders, as well as
talents from other regions.
Highlight and challenges
We are driven to develop and promote local talent
into leadership roles within the regions to leverage
cultural diversity. Since we first made this commitment
in 2021, we have been on a learning journey to
support longer-term talent management planning
at regional levels.
Boost is the regional talent management agenda
focused on building a sustainable leadership pipeline
in Asia Pacific (APAC). It ensures a holistic approach
through talent acquisition, identification and
development initiatives. Asia Pacific nationals now hold
72% of management team positions in the region.
Unleash is the regional talent programme in Africa
and Middle East (AME) which fosters ownership,
consistency and partnership across the talent
management agenda. Unleash intentionally develops
regional talent through assessment centres and short-
and long-term assignments to improve the business
by unleashing the talent of employees. In the Africa
region, the proportion of nationals on regional and
national management teams has increased from
49% in 2016 to 72% in 2023.
HEINEKEN UK and Stonegate Group joined forces to
shine a light on inclusive pub practices through the
initiative ‘Serving with Pride’. They conducted research
and hosted an event to share best practices on how
hospitality venues can be more inclusive.
In Brazil, Amstel spent 10% of the brand’s media
budget to raise awareness and support the LGBTQIA+
community. The brand helped more than 400 trans
people change their names to reflect their true
identity by bringing the registry office to the streets
during the 2023 São Paulo Pride Parade.
Looking ahead
We will continue to foster an inclusive environment
starting with courageous leadership. Every new people
manager at HEINEKEN will take the All Inclusive
Leadership training to understand and develop
awareness of how to practise inclusion.
Learn more about DEI on our website
We also count on everyone’s leadership,
engagement and participation to embed a leading
health and safety culture in our ways of working.
2023 goal
Fair wage for employees:
close any gaps
Our goal is to ensure all our employees worldwide earn
at least a fair wage by assessing and closing any wage
gaps by the end of 2023. We assess wages across all
operating companies against the Fair Wage Network
annually. Assessments started in 2021 with a step-by-
step approach in our operating companies in
developing countries and were rolled out to all other
countries in 2022.
Our progress
In 2023, we reached our commitment: 100% of our
direct employees globally earn at least a fair wage,
according to the Fair Wage Network definition.
A fair and safe workplace
Why it matters
We are committed to maintaining a fair and safe
workplace for our employees and third parties.
We ensure that all our employees worldwide earn
at least a fair wage and take action to advance
equal pay for equal work between female and
male colleagues. Fair living and working standards
for third-party employees and brand promoters are
also an important part of our responsibility.
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Highlights and challenges
2023 goal
Looking ahead
We partner with the Fair Wage Network, an
independent NGO, to determine the fair wage
amount per country to inform our assessments. A fair
wage is often higher than the minimum wage and
should be sufficient for a decent standard of living,
covering the basic needs of the employee and his or
her family – from food, housing and education to
healthcare, transportation and some discretionary
income and savings.
To maintain a high quality of our data and
assessment, we continued our journey to
independently certify operating companies with the
Fair Wage Network. Following in the footsteps of our
operating companies in the Africa, Middle East and
Eastern Europe region, which were certified in 2022,
the Asia Pacific region will be the next region to have
all entities certified in 2024.
Looking ahead
Although we achieved our goal in 2023, ensuring a
fair wage is a dynamic and ongoing process as the
cost of living and other economic factors can change.
We will maintain the focusing on fair wages through
ongoing assessments and adjustments.
Equal pay for equal work: assessments
and action plans
Equal pay is a key social enabler, complementary to
our DEI commitments and non-discrimination
principles. Our goal is to ensure equal pay for equal
work (or work of equal value) between female and
male colleagues. We also recognise the importance of
equality in our rewards processes by striving for fair
decision making at all key moments experienced by
our colleagues.
Our progress
We achieved our goal by having 100% of our
operating companies assessed and 100% action
plans in place by the end of 2023.
Highlights and challenges
We have received strong support from operating
companies in reviewing and adjusting local plans
based on the latest assessment results (full Company)
in 2022. We continue to monitor the effectiveness of
action plans and check whether year-on-year progress
has been made.
All operating companies are dedicated to delivering,
monitoring and evaluating local action plans aimed at
closing pay disparities between female and male
colleagues. This includes integrating equal pay
considerations into reward strategies, reward
processes and initiatives.
Action plans also target gender representation, equal
opportunities for promotion and gender balance in
management teams. Actions may include embedding
structural checks and controls in processes to ensure
gender-neutral pay decisions. We monitor the
outcomes annually to ensure equal pay for equal work
between female and male colleagues.
It remains our focus to assess all operating companies,
continuously tracking and monitoring improvements
to ensure equal pay for equal work between female
and male colleagues.
2030 goal
Ensure fair living and working
standards for third-party employees
and brand promoters
Looking beyond our direct employees, our goal is that
third-party employees delivering labour-based services
such as catering, cleaning and security on our sites and
brand promoters benefit from fair living and working
standards. Third-party employees are an important
part of our Company and we show responsibility for
making sure they work reasonable hours in a safe,
healthy and decent environment and earn a fair wage.
We operationalise this ambition through our SMART
Outsourcing programme.
Our progress
38% of our operating companies globally have now
been assessed for compliance with our standards for
third-party employees and brand promoters.
Highlights and challenges
To meet our goal, the SMART Outsourcing programme
and guidelines are designed to map third-party service
providers and their employees. We assess a sample of
these against our fair labour principles by using an
external social compliance partner and work with service
providers to close any gaps. We continually embed
learnings to improve contract management of
outsourced service providers and workplace practices.
In 2023, we took significant steps to strengthen our
global governance and clarify operating companies’
roles and responsibilities in delivering this goal. We
began onboarding our operating companies to
improve the quality and consistency of assessments.
As a result, we now have a solid basis on which to
deliver assessments, reassessments and action plans
up to 2025 to drive progress towards our 2030 goal.
Raising standards with service providers
Social sustainability and human rights are foundations
of how we do business with third-party service
providers.
In 2023, we continued to expand the programme
beyond the Africa region where it was first launched,
assessing our operating companies in Asia, and
onboarding the America's region.
Looking ahead
Our aim is to have carried out an initial assessment in
all regions by the end of 2025 with actions to close
gaps and embed standards into the way our
operating companies do business running until 2030.
We will increase the scope to include the Americas
region in 2024.
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Disclosures
Reporting basis of non-financial indicators
2030 goal
Create leadership capacity to drive
zero fatal accidents and serious
injuries at work
While we have significantly reduced incident severity
across our operations, we still experience safety
incidents as a result of our activities. We remain
committed to doing the utmost to ensure that every
one of our colleagues and contractors return home
safely every day.
We are all safety leaders, and our approach must
engage the whole organisation at all levels. The
personal commitment and actions of everyone who
works on behalf of our Company – including
employees, temporary workers and contractors
– must comply with the Life Saving Commitments
and HEINEKEN’s safety standards.
The HEINEKEN Life Saving Commitments (LSCs) are
designed to address the highest risk activities in our
operations. The Golden Principle is the overarching
principle through which we empower people to stop
and speak up when work cannot be executed safely
or if it is not possible to adhere to the LSCs.
Our progress
The Life Saving Commitments training for people
managers is designed to equip leaders in recognising
and applying the LSCs and Golden Principle. In 2023,
the training was completed by 97% of our people
managers.
Highlights and challenges
We developed specific guidelines for people managers
who play a crucial role in the health, safety and well-
being of employees, temporary workers and
contractors. Safety must be included in all business
decisions and all employees, temporary workers and
contractors must be supported to adhere to the LSCs.
We have also an LSC training to ensure all employees
across our operating companies understand the
12 LSCs and Golden Principle.
Safety, health and well-being at the heart of
everything we do
We carried out many activities to shape a leading
health and safety culture in 2023. A regional turn-
around programme was launched as an immediate
call to action to improve safety performance where it
is needed most. Plans to reduce injuries and
strengthen a safety culture and mindset were
implemented for selected functions and operating
companies based on their safety performance and
will be implemented accordingly.
We continue to strengthen the HEINEKEN capability
framework to embed health and safety and to
integrate safety leadership into our global
programmes through competence building,
leadership programmes, etc.
Dedicated tools enable operating companies to
assess their current status, identify gaps and develop
improvement plans to close them. We launched the
Safety Leadership standard in early 2023 to monitor
progress as part of the global health and safety
management system. Other safety standards were
updated and launched – for example, permit to work
and machine safety. Operating companies carried
our gap assessments and put plans in place to meet
the new standards.
This year’s Safety Day theme was: “Because we care,
I don't compromise on safety!” A wide range of global
and local initiatives were held to reinforce the
commitment and increase awareness around safety.
Looking ahead
To equip all people managers with capabilities to
deliver the Life Saving Commitments, training is now
part of the mandatory onboarding curriculum. This
means that all future people managers will be trained
on the LSCs.
Having almost reached the 100% completion target
for LSC people manager training, we will develop a
new safety ambition to drive down the number of
injuries during 2024. We will also launch a new safety
culture transformation programme and a digital H&S
management system to drive safety excellence daily.
Fatalities and serious injuries
We deeply regret that 3 people lost their lives while
working for us in 2023 (2022: 2): one employee, a
temporary worker and a contractor. An independent
investigation team thoroughly investigates every
fatality to identify and understand the root cause.
We take action to prevent recurrence and share
learnings with corrective and improvement actions
followed up until closure.
In 2023, we updated our reporting governance and
standards to align with international standards. Our
Total Recordable injury Rate (TRR) for employees and
temporary workers was 1.2 per 200,000 hours worked
(2022: 0.9). Injuries resulting in permanent disabilities
decreased to 4 in 2023 (2022: 5).
There were 1,073 (2022: 783) injuries that resulted
in 735 with lost time injuries among our employees
and temporary workers. 594 of these injuries were in
logistics and distribution, 167 in commerce, 282 in
production and 30 in other functions.
The increase in the recordable injuries of employees
and temporary workers is mainly related to the
updated governance and reporting standards.
The main types of work-related injuries are slips or
falls, injuries while lifting or carrying objects, cuts by
sharp objects (e.g. glass), hits by moving falling objects
or vehicles (e.g. forklifts).
Fatalities1
Fatalities of employees
Fatalities of temporary workers
Fatalities of contractors
Injuries (absolute values)2
Permanent disabilities of employees
Total recordable injuries of employees and temporary workers
Total recordable injuries of contractors
Injuries (relative values) – employees and temporary workers
Total reportable injury rate (per 200,000 hours)
Lost time injury rate (per 200,000 hours)
1 These numbers have limited assurance by Deloitte.
2 Injury classification and people categories are updated in alignment with international standards.
2022
2023
0
0
2
5
891
216
0.9
0.7
1
1
1
4
1,073
198
1.2
0.8
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Reporting basis of non-financial indicators
Positive impact in
our communities
Why it matters
With operations spanning the globe, HEINEKEN can
be a positive force for change. This is especially
relevant in a world where income inequality and
injustice see increasing numbers of people facing
challenges to afford a decent standard of living.
While our biggest contribution to the social and
economic well-being of communities is through the
jobs we create, the businesses we support and the
taxes we pay, many of our Brew a Better World
ambitions directly touch local communities.
From guaranteeing a fair wage for employees and
raising working and living standards for third-party
employees to contributing to healthy watersheds,
supporting smallholder farmers in Africa and working
with partners to address harmful use of alcohol – our
actions aim to have a positive impact on communities
as well as our business.
Sustainable and transparent
tax strategy
We believe in responsible tax behaviour as an essential
part of our Brew a Better World strategy. The taxes we
pay contribute to local economies and support the
development of the many countries in which we
operate. We support stable, transparent and predictable
tax regimes that incentivise long-term investment and
economic growth.
Our tax strategy is fully aligned with the EverGreen
strategy and our business and organisational values.
This ensures that our approach to taxation reflects our
commitment to sustainability and responsible
business practices.
The tax strategy adheres to the following of key
principles:
– Our commitment to comply with relevant tax laws
and international regulations – we aim to comply
with the letter as well as the spirit of the law.
Total tax contribution paid by category
Corporate income tax paid per region
Our progress
3%
8%
4%
4%
€15.2bn
28%
53%
23%
23%
€1.2bn
11%
42%
Excise duties paid – Collected
Net VAT paid – Collected
Employee taxes paid (incl. social security
contributions) employer part – Borne
Employee taxes paid (incl. social security
contributions) employer part – Collected
Income tax paid – Borne
Other tax paid – Borne
53%
28%
4%
4%
8%
3%
Europe
Americas
Africa, Middle East & Eastern Europe
Asia Pacific
23%
42%
11%
23%
– Compliance with the HEINEKEN Code of Conduct
2030 goal
and Dutch Tax Governance Code.
– Expectation that we will pay tax in the country where
our activities take place. We fully support and follow
the OECD transfer pricing guidelines, and
transactions between HEINEKEN operating
companies are based on the ‘arm’s length’ principle.
– Not using tax havens for tax avoidance purposes.
– Open and constructive dialogue with tax authorities
that is based on mutual respect, transparency and
trust. We have co-operative compliance relationships
with tax authorities in various countries.
For more information about our tax strategy see
our website
A social impact initiative in 100%
of our markets every year
Our goal is that 100% of markets will have a social
impact initiative in place each year. We want to make
a positive difference based on what matters most for
each community. That is why we require initiatives to
support one or more of the UN SDGs, as relevant to
the specific community.
By the end of 2023, 100% of all our markets globally
in scope had a social impact initiative in place.
€6m invested by our markets in
dedicated social impact
initiatives
This amount excludes all other donations (both cash
and in-kind) to charities.
Highlights and challenges
Many initiatives rely on partnerships to address
social inequality, from enhancing access to jobs to
supporting women's empowerment and supporting
underserved communities.
In Haiti, we partner with three women's organisations
to provide microcredits to women in rural areas,
enabling them to start small businesses where they
lacked access to funding.
In South Africa, we installed fire alarms in 700 homes
near our Sedibeng brewery, with plans for another
500. Benefiting over 2,500 residents, this initiative will
prevent fires and safeguard lives and homes. Ten fires
were prevented in the first month post-installation.
In Myanmar, we are aiming to provide clean and
safe water to over 1,000 households. We completed
construction of a water supply system in Pawlamaw
Village in 2023 and began similar projects in three
other villages.
The Joy of True Togetherness
We are constantly looking for ways to bring our
Company purpose, ‘The Joy of True Togetherness’,
to life in a world that is increasingly disconnected and
polarised. We started a global partnership with The
Social Gastronomy Movement and The Human
Library to launch the grassroots campaign
#WorldsTogether. This initiative brought individuals
together over a meal and a beer, fostering
connections among people who might not
otherwise meet or interact.
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Heineken
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In the pilot phase, events at our headquarters and in
eight markets around the world united 1,150
community members and employees – from the
favelas in Brazil to farm fields in Cambodia. Research
conducted after the events revealed increased
openness, understanding and empathy among
participants, reinforcing the goal of #WorldsTogether
to break down barriers and bridge societal gaps, one
conversation at a time.
Introduction
Looking ahead
Report
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Other
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In 2024, we will maintain our objective to have an
initiative every year in every market. We will also
introduce a more focused social impact strategy to
improve our impact and how we measure it. We will
also scale up the Worlds Together platform to engage
more communities.
2025 goal
Local sourcing of agricultural
ingredients in Africa: 50% increase
in volume
Our aim is to increase the quantity of agricultural raw
materials sourced locally in Africa by 50% from 2020
to 2025. Our local sourcing programme is delivered
through a business-led programme which spans 32
value chains across 12 operating companies.
Our progress
In 2023, we achieved an estimated 19% increase -
more than 43,000 tonnes – above the 2020 baseline.
This is lower than the increase reported in 2022, due
to significant market declines in Nigeria and South
Africa, which we have not been able to fully
compensate across the region.
However, the percentage of raw materials sourced
locally shows a positive trend, increasing from 44% in
2020 to 48% in 2023.
Highlights and challenges
Local sourcing is mutually beneficial for farming
communities, governments and businesses.
Substituting imports also reduces demand for hard
currency (Forex) which remains a significant challenge
in many African countries.
We purchased agricultural raw materials with a total
value of over €200 million in 2023, which was shared
across our end-to-end supply chain benefiting farmers,
aggregators, transporters and processors, as well as
their families and wider communities.
The localisation of barley and malt in Africa continues
to make strong progress. In Ethiopia, more than 90%
of agricultural raw materials were sourced locally in
2023, up from less than 5% in 2018. Our barley
development program in Ethiopia started in 2012 and
entered its fifth phase in 2023, through the launch of
the “BOOST 2” project together with the International
Finance Corporation (IFC) and Soufflet Malteries.
This project runs from 2023 to 2027 and will expand
malt barley production to farmers in new parts of
the country.
The introduction of barley as a new crop for farmers
in other African countries continues to gather
momentum. Barley varieties have been tested and
approved in nine countries and barley was added to
the regional seed register of the Common Market for
Eastern and Southern Africa (COMESA). The quantity
of barley and malted barley sourced locally in Africa
has almost tripled between 2020 and 2023.
This is helping our local sourcing programme to keep
pace with rising demand for barley and malt driven
by the premiumisation of our brand portfolios across
Africa. Despite these successes, supply of regional raw
materials continues to be a challenge with, for
example, the structural shortage of African sugar
resulting in higher imports in 2023.
Improving working conditions on farms
Working conditions for farm workers in Africa vary
significantly and we collaborated with Partner Africa in
2023 to develop a training toolkit to encourage and
support our direct farmers to improve conditions for
their employees. The toolkit aims to raise awareness
of local legislation and HEINEKEN expectations on
working conditions. It will increase visibility of potential
issues through training and farm self-assessments, as
well as providing tools and templates to support
sustainable improvements at farm level. The toolkit
was piloted in Nigeria and in the Republic of Congo in
2023 and we are using feedback from these farmers
to improve the content prior to rolling out in 2024.
Looking ahead
With African agricultural value chains increasingly
impacted by climatic, socioeconomic, and political
volatility, long-term persistence and resilience are
prerequisites to improve local sourcing. We continue
to work with expert partners to tackle these challenges,
including with Wageningen University on climate
resilience and IFC on barley development in Eastern
Africa. We anticipate starting new projects in 2024,
with a continued focus on localising barley and malt,
including preparations to build a new malting plant in
Southern Africa.
HEINEKEN Africa Foundation
The aim of the HEINEKEN Africa Foundation (HAF) is
to improve livelihoods in communities in sub-Saharan
African countries where HEINEKEN operates.
Evolving our strategy
In 2023, the HAF shifted its strategy significantly while
still honouring its previous strategic focus on water,
sanitation, hygiene (WASH) and healthcare. In line
with its former strategy, the HAF contributed €1.58
million towards WASH projects in Nigeria, South
Africa, Ethiopia, Mozambique, Rwanda, Burundi, and
Sierra Leone by partnering with WaterAid and World
Vision this year.
Moving forward, the new strategy aims to empower
smallholder farmers to thrive and build climate
resiliency through regenerative farming.
To define the new strategy, we engaged with internal
and external stakeholders – including NGOs, research
institutions and local experts – to understand where the
HAF can make a meaningful impact while leveraging
HEINEKEN’s local presence and infrastructure.
Stakeholder interviews, desk research and board
discussions highlighted the SDGs for poverty
alleviation, food security, climate action and equality
as priorities. Smallholder farming communities were
identified as the key stakeholder group with whom
we can make the most significant impact.
Supporting thriving and resilient communities
Our goal is to enable a shift from surviving to thriving by
improving farmer incomes, implementing regenerative
agriculture practices and making land more resilient to
climate shocks. The active involvement of women and
young adults in farming communities is a key priority.
The HAF has committed €3 million to fund a series
of three-year pilots in Burundi and Ethiopia to
kick-start the strategy. These programmes will
equip smallholders with essential skills in regenerative
farming practices and provide access to inputs
like seeds, mechanisation and small livestock,
empowering them to improve their livelihoods
and climate resilience.
€3m committed to improve
smallholder farmers in Burundi
and Ethiopia
Looking ahead
In Burundi, we are partnering with Ripple Effect
and One Acre Fund to reach approximately
20,000 smallholder families by 2026. Similarly, in
Ethiopia we are collaborating with World Vision to
reach more than 23,000 smallholder farmers within
the same timeframe.
We will start more projects in other sub-Saharan
African countries and aim to expand gradually to
include two additional countries per year, drawing on
insights gained from the previous pilot programmes.
For more information about the HAF see our
website
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A consumer-centric approach to
moderation and no harmful use
We aim to lead the debate on responsible consumption and
support actions that address harmful consumption. We are giving
consumers more choice with our 0.0 portfolio of beer and cider
brands and empowering them with clear and transparent
information on our products.
Contributing to the UN SDGs – Path to moderation and no harmful use:
Learn more in the Responsible section
of our website
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Sustainability
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Brew a Better World 2030 Strategy
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Social
Responsible
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Disclosures
Reporting basis of non-financial indicators
Always a choice
Why it matters
As society evolves, the trend towards moderation
continues to grow in markets around the world.
Research shows that 67% of people are moderating
their consumption of alcohol and consuming low- or
non-alcoholic alternatives (Global Data, Moderation
& Avoidance 2023).
We are actively creating choices for consumers with
our 0.0 beer and cider portfolio of brands, recognising
that this is where we can have a real impact. Our aim
is to empower consumers by making it easier to select
the right beer and cider for the right occasion, be it
with or without alcohol.
2023 goal
Highlights and challenges
2023 goal
A zero alcohol option for two strategic
brands in the majority of our markets
(accounting for 90% of our business)
Our ambition is to serve 0.0 always, so that our
consumers around the world have a choice. This
means building the category and investing in
developing outstanding 0.0 beverages so that a
non-alcoholic alternative is available where we
sell beverages.
Our progress
We made progress in delivering our ambition but fell
short of the 2023 goal. Operating companies with a
zero alcohol option for at least two strategic brands
represented 53% (2022: 46%) of our total beer and
cider volume.
Our zero alcohol beer and cider beverages category
had 245 zero alcohol line extensions across 103
brands. Heineken® 0.0 was available in 114 markets
by the end of the year and was launched in four
countries: Argentina, China, Japan and Morocco.
Our experience has found that, for operating
companies without an established non-alcoholic beer
category, focusing on seeding one strategic brand,
rather than two, is more impactful. Going forward,
our new goal will reflect this approach. We aim to have
a zero alcohol option for one strategic brand in the
majority of markets (accounting for 90% of our
business) by 2025.
The redesigned target will build on our achievements
to date and consider the different development
stages of markets to direct our strategic investments
to ensure there is always a choice.
Our 0.0 category
We are closing the gap between alcoholic and non-
alcoholic beer penetration, resulting in strong double-
digit revenue growth for Heineken® 0.0 in key markets
such as Brazil, USA and Vietnam. We are also
witnessing strong growth in Mexico with the launch of
Tecate 0.0. Meanwhile, we continue to add a variety
to the category in markets where it is well established
by extending existing ranges through innovative
flavour launches such as Zywiec 0.0 Lemon & Cola,
Zywiec 0.0 Tropical with a hint of ginger and Ciuc
Radler Melon & Blackcurrant.
Looking ahead
Our aim is to have a zero alcohol option for one
strategic brand in the majority of markets
(accounting for 90% of our business) by 2025.
In markets where the non-alcoholic category is less
established, we will bring credibility through the
launch of Heineken® 0.0 and/or a local 0.0 strategic
brand launch.
Meanwhile, we will bring even more diversity of choice
to the category in established markets by continuing
to widen our portfolio with options for all occasions.
Clear and transparent consumer
information on 100% of our
products in scope
We advocate for labelling transparency so that
consumers can make an informed choice about the
products they consume.
Our progress
By the end of 2023, 53% of our products in scope
had fully compliant labels. Our journey to achieving
100% has been impacted by complex local market
circumstances and as a result we did not reach
our goal.
Highlights and challenges
Responding to the evolving landscape, we aim for
clear and transparent consumer information on 100%
of our products in scope. This means including full
nutritional information, ingredients, alcohol warning
symbols (enjoy responsibility, don’t drink and drive,
don’t drink pregnant and legal drinking age),
packaging recycling symbols and a QR code on pack
that links to further information on alcohol and health.
This goal goes beyond industry standard.
We aim to have this information on pack whenever
possible. However, in specific cases when local market
circumstances make this problematic, a URL or QR
code is used to ensure consumers have access to the
necessary information.
Looking ahead
We have extended the goal deadline until the end
of 2024 – with a clear roadmap in place to deliver
against this ambition, We also have a global working
group supporting all operating companies to
implement the labelling changes and confirm
ongoing compliance.
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Address harmful use
Why it matters
Harmful drinking negatively impacts the people
directly involved and their communities, as well as our
industry and our reputation. Alcohol abuse is a
complex societal issue and there is no simple solution
or one-size-fits-all approach. Different regions have
their own cultural attitudes towards alcohol and the
issues vary across countries.
Due to the complexities, we must work with diverse
stakeholders including industry peers, governments,
NGOs, consumer groups, police forces, legislators,
retailers, hospitality venues, communities, schools
and consumers themselves. Community engagement
is key as local stakeholders are best placed to
understand the issues in their community and
how best to address them.
2030 goal
100% of markets in scope have a
partnership to address
alcohol-related harm
Sustainability
Review
In some countries we develop partnerships together
with governments to maximise the impact we
can have.
Our progress
Other
Information
For a second consecutive year, 100% of our markets
in scope had a partnership in place to contribute to
the reduction of harmful drinking.
Highlights and challenges
The issues tackled by our partnerships around the
world include drink driving, under-age drinking,
excessive consumption, drinking while pregnant
and alcohol addiction.
In Italy, we are proud to partner with the top Italian
Sommelier Association (ASPI) where we were able to
incorporate responsible consumption and moderate
drinking on the curriculum of National Hotel schools.
This initiative draws on the power of education to
promote a culture of moderate drinking and making
conscious choices.
In Vietnam, we continued to champion moderation
through its 14-year partnership with the Vietnamese
National Traffic Safety Committee. This is a strategic
partnership that aims to tackle drink and driving
through advocating a positive change on
consumers’ behaviour.
Looking ahead
We will continue to strengthen and develop our
partnerships to maximise our impact and address
harmful use in markets around the world.
Make moderation cool
Why it matters
We have a long history of using our brands to
make moderation and responsible consumption cool.
By leveraging the strength of our brands and
partnerships, we ensure that our message resonates
with consumers through innovative campaigns that
lead the debate. We design Heineken® campaigns to
connect with the right audiences and reflect different
contexts by using digital media platforms, advertising
assets and digital activations to drive awareness and
relevance at scale.
2030 goal
10% of Heineken® media spend
invested every year in responsible
consumption campaigns, reaching
1 billion consumers
Our progress
In 2023, our operating companies invested 14%
of Heineken® media spend in our latest campaigns
dedicated to responsible consumption. The over-
achievement has been reached through an additional
campaign rolled out in the US. The US overinvested in
their responsible consumption campaign activation,
doubling down on an innovative partnership to drive
relevance for this important message.
We reached almost 900 million unique consumers
worldwide within the country borders of 30 operating
companies. This outcome is calculated using the
Sainsbury Formula method which allows us to
estimate audience duplication to ascertain net reach
across multiple markets and digital media channels/
platforms. The approach has been validated by third-
party independent media auditors, such as Ebiquity.
This year, a smaller number of markets executed
the campaigns on responsible consumption we
therefore did not achieve our goal of reaching
1 billion unique consumers.
Highlights and challenges
Our groundbreaking campaigns such as ‘Sunrise
Belongs to Moderate Drinkers’, 'Dance More, Drink
Slow’ and ‘When You Drive, Never Drink’ aim to
change habits by advocating positive behaviour
rather than using criticism or shaming people.
Introducing our new campaigns
‘When You Drive, Never Drink’ (WYDND) is our long-
standing flagship campaign promoting an anti-drink
driving message. In 2023, we doubled down on the
ambition to make moderation cool by partnering with
three-time F1™ World Champion Max Verstappen and
Marvel Studios to create two innovative campaigns.
Max Verstappen features in our latest WYDND
campaign. He delivers this important message ‘the
best driver is the one that 'does not drink’ featuring
Heineken® 0.0 as an alternative. Through our
partnership with Max Verstappen we developed Player
0.0, a unique online gaming competition tapping into
the fast-growing global gaming universe. The
immersive online competition layer reinforces the
important message that ‘When You Drive, Never Drink
– even if it is online’.
In the US, our first-ever partnership with Marvel
Studios was built around the ‘Ant-Man and The Wasp:
Quantumania’ movie. The campaign stars main actors
from the movie, Paul Rudd and Michael Douglas, to
reinforce responsible consumption by building on the
movie theme ‘Don’t Drink & Shrink, Shrink
Responsibly’. The campaign was premiered during
Super Bowl, one of the biggest events in the US, and
was heavily supported in digital.
Looking ahead
We will unleash the full potential of The Best Driver
campaign across the globe in 2024. Our learnings and
results have proven that this campaign is breaking
through in the fight for consumer attention and the
campaign message take-out is strong.
Having piloted the Player 0.0 activation in the
Netherlands, Mexico and Brazil with positive impact
across PR, media, on-site and gaming, we will scale the
initiative across at least 10 markets in 2024.
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Sustainability
Review
Other
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Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Foundation:
Our ways of
working
We know that we can only
be successful if we lead with
integrity and fairness, with
respect for people, the law
and our values.
This is the purpose of our
Foundation which guides our
day-to-day decisions, actions,
engagement and governance.
Our ways of working apply to
all our operating companies
globally and everyone who
works at, or on behalf of,
HEINEKEN.
Responsible business
conduct
Our business conduct framework ensures that we
conduct our global business in a responsible manner,
following the principles of the UN Global Compact
and the OECD Guidelines for Multinational Enterprises.
Code of Business Conduct
A cornerstone of the framework is our Code of
Business Conduct (the ‘Code’). It serves as a beacon
and reflects the core principles and policies that define
expected behaviours for everyone in our Company.
The Code serves as a framework for ethical decision-
making, provides guidance to employees on how to
navigate challenges, and fosters a culture of integrity
and compliance.
In 2023, we updated the Code to reflect the dynamic
nature of our business environment and keep up with
developments and challenges. The new Code
incorporates insights and lessons learned from past
experiences – including breaches of its standards –
and aims to improve clarity and understanding of
relevant topics such as harassment and corruption.
Regular updates ensure the Code remains a relevant
and effective tool for guiding ethical behaviour.
Business conduct training for employees
We provide annual mandatory Code of Business
Conduct training to all employees worldwide. This
training presents practical dilemmas and encourages
participants to explore a range of business conduct
topics. In 2023, more than 82,000 employees
completed the training.
We take every opportunity to raise awareness
and keep employees engaged in understanding
and applying the principles for responsible
business conduct.
In 2023, global and local campaigns supported the
launch of the new Code of Business Conduct and
promoted World Whistleblower Day, Anti-Corruption
Day and Integrity Week.
Zero tolerance of bribery
and corruption
As a multinational company operating in more than
70 countries, including countries with high levels of
corruption, we pay close attention to potential
exposure to bribery and corruption. Our principle is
never to engage in bribery and our anti-bribery
framework is designed to prevent, detect and respond
to bribery and corruption threats. The framework
includes risk-based third-party due diligence,
mandatory disclosures of conflicts of interests,
and internal and external awareness campaigns
and training.
Training on anti-bribery and corruption
Anti-bribery and corruption e-learning equips selected
employees to recognise and deal with potential
bribery challenges that they may encounter during
their work. In 2023, more than 16,000 employees
completed the training. Anti-corruption policies –
which cover bribery and other topics such as conflicts
of interest, fraud, money laundering and gifts,
entertainment and hospitality – are also addressed
in the mandatory Code of Business Conduct training
for employees.
We require third parties that may be exposed to
corruption risks to complete our third-party anti-
bribery and corruption training. This training reiterates
our zero tolerance of corruption policy and explains
how to recognise and resist bribery and speak up
where needed. In 2023, around 180 third-party
employees completed this training.
An effective Speak Up framework
Transparency and trust are a crucial foundation of our
culture and values. We proactively encourage
everyone to speak up when they have questions or
concerns about potential misconduct such as fraud,
discrimination, harassment or corruption related to our
Company, employees or business partners.
Multiple channels are available to employees and
people outside the Company to communicate
concerns in confidence and without fear of retaliation.
Requests for advice and concerns shared are treated
confidentially and people have the option to make
reports anonymously.
Our Speak Up channels include a network of trusted
representatives (employees selected and trained to
receive and help register potential Speak Up reports)
and an external Speak Up service. This is run by an
independent service provider and is available 24/7,
365 days a year. Speak Up channels are regularly
communicated to employees and third parties to
encourage their use.
In 2023, we received over 2,700 reports of suspected
misconduct through Speak Up (2022: 2,400). Reports
received concerned allegations of fraud (26%),
discrimination and harassment (35%), conflicts of
interest (7%) and other issues (32%). 85% of the cases
reported in 2023 have been closed and 15% are
pending closure. 63% of fraud cases, 43% of
discrimination and harassment, 34% of conflicts of
interest and 36% of other issues were fully or partly
substantiated, which led to an overall substantiation
rate of 46%.
Where appropriate, corrective and preventive actions
were taken. Such actions include process and control
improvements, awareness-raising, training, coaching
and disciplinary measures ranging from issuance of a
warning to termination of employment.
We were not subject to any criminal or regulatory
investigations on the grounds of corruption including
bribery, facilitation payments, extortion, money
laundering and collusion.
Robust internal controls
Robust internal controls ensure we keep reasonable
and proportionate oversight of activities related to the
implementation and effectiveness of our business
conduct framework.
Learn more about Business Conduct on our
website
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Respecting human rights
Respect for people’s dignity and human rights is a
foundation of how we do business within our own
operations and across our value chain. Tackling
human rights issues requires multi-stakeholder
collaboration and sharing expertise across HEINEKEN
as well as within and beyond our industry.
We follow the UN Guiding Principles on Business and
Human Rights and the OECD Guidelines for
Multinationals. Our Code of Business Conduct, Human
Rights Policy and Supplier Code guide us to assess, act
to prevent or address, and track human rights-related
risks around the world as well as our progress. These
documents are available in 40 languages and
therefore accessible for all intended audiences.
Human rights is overseen by our Chief People Officer.
As part of our governance structure, the Executive
Board, S&R Steering Committee and Supervisory
Board receive regular updates to align on strategy and
report on progress and challenges.
We took the time during the year to reflect on our
overall journey and profound societal developments in
the near term. We started to shape a new ambition
and strategy to keep future-proofing the company
and ensuring the respect of people's rights connected
to our business.
Addressing human rights in our
operations
To identify the risks to people and the business,
we continued to carry out local on-site human rights
risk assessments and action planning through
internal workshops.
We have conducted these with 17 operating
companies globally to date. Risks differ by country
and include topics such as discrimination, excessive
working hours, harassment, road safety, working
conditions of third-party employees and farm
workers. The workshop a carried out in Croatia in 2023
identified potential risks related to working conditions
of employees, especially around health and safety
due to heat stress during the peak season, as well
as overtime for third-party employees. The responsible
consumption of alcohol was also discussed.
These salient risks inform the Operating
Companies’ priorities.
In 2023, we extended and strengthened our approach
to land rights through an enhanced due diligence
process to assess environmental and human rights
impacts of development projects.
To ensure proper implementation of our human rights
policy in our operations and to continuously integrate
learnings, we reviewed our standalone internal human
rights control introduced in 2022. This requires
operating companies to execute self-assess standards
and local implementation of specific programmes,
such as fair wage and our goal to ensure fair living and
working conditions for third-party employees.
Human rights audits
We also conduct internal human rights audits to
assess performance of our internal human rights
management at global and local levels across all four
regions. We have completed 30 reviews since 2019.
HEINEKEN employees, and in some instances on-site
third-party employees, are in scope of these reviews.
Action plans are put in place to address audit findings
and root causes.
In 2023, a global human rights audit concluded
that awareness of human rights risks within the
Company has increased over time, but we have an
opportunity to further strengthen governance and
joint accountability with relevant functions to
ensure consistent implementation that keeps pace
with evolving stakeholder expectations and
regulatory demands.
Building capabilities and culture is critical to fully
embed respect for human rights in daily operations.
A new competency model for employees working in
the People function has been launched and includes
human rights as a key competency. We delivered an
internal campaign to support employees in mastering
this competency via diverse content- including videos,
podcasts and live chats with peer companies on
relevant topics - and to elevate the topic of human
rights beyond compliance. To create the right culture,
we delivered an internal awareness campaign for all
employees to mark International Human Rights Day.
Human rights in high-risk contexts
When we enter a new market, we become embedded
in the local economy and society. Some countries may
go through periods of volatility which can present
significant challenges and dilemmas for governments,
citizens and long-term investors like HEINEKEN. We
must be prepared to deal with high-risk contexts that
could impact our business and the human rights of
employees and other people connected to our
business. The risk of human rights violations can be
disproportionately high in areas of poor governance,
volatility and political instability and we constantly
reviews whether we can continue to operate in such
contexts and how to manage the risks.
When identifying volatile countries, and specifically
what a volatile context could look like for our business,
we are guided by external expertise to consider
conflict, security and economic, political and social
factors such as governance, economic development
and potentially vulnerable groups. Countries included
in this category invariably change over time in relation
to the external context and our portfolio of operating
companies. We review the situation annually to
consider developments.
Our global Human Rights Policy includes specific
information on respecting human rights in high-risk
contexts. We have also provided a set of Golden
Principles, a ‘Volatile Environment’ playbook of actions,
and internal workshops on how to operate in high-risk
contexts. Our focus in 2023 remained on business
preparedness and the implementation of
the playbook.
Our presence in a volatile country can be an enabler
for development when we operate responsibly and
sustainably. With this in mind, we continue to
thoughtfully consider how to stay engaged in
Myanmar while respecting the company’s
commitment to doing business responsibly. For this
purpose, we collectively engaged with other
companies in Myanmar and an independent
organisation with expertise in human rights to help us
gain a better understanding of the negative impacts a
company may be associated with when operating in a
conflict- affected country. In 2023, we took the
learnings and ran a heightened human rights due
diligence for the company across its value chain,
including a conflict risk analysis in line with
international standards. The outcomes of this
heightened human rights due diligence will be used
in 2024 to create the relevant actions plan.
Security and human rights training
Our Human Rights Policy commits us to protect the
security of our employees and of our facilities.
To uphold our ambition, we have developed an
operational framework that supports operating
companies to maintain the safety and security of
people and assets with respect for human rights at its
centre. This framework includes in-person training for
security staff in line with the Voluntary Principles on
security and human rights, especially focused on
operations in volatile environments. We have also
developed an onboarding video for security staff to
raise awareness from day one of security tasks and
respect for human rights.
Launched in 2022, the training is designed to ensure
security service providers have the knowledge and
understanding to conduct daily tasks in compliance
with international standards on security and human
rights and with our policies regarding human rights
and ethical conduct.
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Disclosures
Reporting basis of non-financial indicators
In 2023, we delivered training in Democratic Republic
of Congo (DRC), Burundi and Nigeria. Over 2,300
private security staff have been trained in 2023 –
more than 3,500 since the implementation of this
training - and a pre- and post-training survey has
been set up to ensure we monitor the impact of
each session.
Respecting human rights in our
value chain
We take responsibility for human rights impacts
arising from our business activities across the entire
value chain – from the farms on which our raw
materials are grown to the disposal of our waste.
Human rights supplier due diligence
Our impact on human rights can occur wherever we
operate – including through the activities of our direct
suppliers and their own suppliers. We are committed
to conducting business with integrity and fairness and
with respect for people, the law and our values. We
expect our suppliers to do the same as stated in our
Supplier Code.
Our Supplier Code compliance procedure is
implemented across all our operating companies
worldwide with a compliance score of 98% in 2023.
We also pursued our journey for improving our
supplier risk management process.
We built on the pilot run in 2022 and the new solution
tested allowed us to perform an extended screening
of our new suppliers as part of the selection process
as well as for the performance evaluation of our
existing suppliers. This approach covers financial,
compliance, environmental and human rights risks.
So far, we have covered nearly 4,000 of our direct
suppliers and we plan to complete the assessment of
our 40,000 supplier-base by the end of 2025.
On top of this systemic suppliers screening, we
proceed with enhanced human rights due diligence
of our suppliers. For instance, as part of the Distell
business acquisition in South Africa, we performed
a series of risk assessments of outsourced service
providers and some key suppliers, further up in our
value chain. For the assessments performed, we are
tracking closure of the issues identified. Follow-up
reviews will be conducted where required depending
on the severity of the cases.
Despite our commitment and the management
systems in place, we must sometimes manage cases
of non-compliance among our suppliers. In March
2021, HEINEKEN Brazil was made aware of labour
violations by one of its transportation service providers
involving transportation employees servicing
HEINEKEN Brazil and others. These practices were
in clear breach of the HEINEKEN Supplier Code and
swift disciplinary action was taken.
We ensured that affected employees were offered
lodging, financial assistance and emotional support.
Following a comprehensive review, HEINEKEN Brazil
terminated business relations with the supplier and
implemented a more rigorous supplier governance
process in addition to maintaining stringent
enforcement of its Supplier Code of Conduct.
We invested locally approximately €3.6 million to
establish new facilities at all its breweries to cater to
the needs of truck drivers during shipment drop-offs
and pick-ups.
See our SMART Outsourcing programme to
understand what else we do to assess human rights
risks of on-site suppliers’ employees and to ensure
proper living and working conditions.
Raising awareness at farms level
As a food and beverage company, we rely on our
agricultural value chain and its many farmers to
deliver our raw materials. Working conditions for farm
workers can vary significantly. In 2023, we
collaborated with Partner Africa, a company
specialising in social compliance, to develop a training
toolkit to encourage and support farmers in Africa we
source directly from. The toolkit aims to raise
awareness of local legislation and HEINEKEN
expectations on working conditions. It will increase
visibility of potential issues through training and farm
self-assessments, as well as providing tools and
templates to support sustainable improvements at
farm level. The toolkit was piloted in Nigeria and the
Republic of Congo in 2023. To ensure it would fit
farmers’ needs, we engaged with a small group to get
their feedback. We adapted the content of the toolkit
based on their inputs and plan to roll it out in all
markets in Africa where we directly source our
agricultural raw materials in 2024.
We have also provided face-to-face trainings to
around 40 people from our direct supplying farms in
South Africa, one of our largest markets. This training
took place within three of our facilities and offered a
deep dive into our supplier code and human rights
policy to clarify expectations, roles and responsibilities.
Human rights in local communities
In 2023, we extended and strengthened our processes
and controls around land rights due diligence for
greenfield projects to assess environmental and
human rights impacts.
To ensure we prioritise the rights of local communities,
improvements include enhanced rights holders
engagement such as landowners, tenants, informal
settlers to evaluate multiple parameters relevant to
the responsible acquisition of new sites. This process
ensures that we assess and understand the potential
impacts of projects on local communities and the
environment to inform business decision and shape
action plans when needed to prevent or mitigate any
potential adverse impacts.
Within one specific project, which ran in 2023, we set
up in-house a community liaison officer role as part of
our grievance mechanism process to ensure we stay
connected with the local communities.
To find out what else we do to support local
communities, please see Positive impact in our
communities .
Learn more about Human Rights on our website
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Disclosures
Reporting basis of non-financial indicators
Measuring stakeholder capitalism
We continually monitor and respond to developments in reporting standards and regulations to improve our reporting.
HEINEKEN was one of the initial endorsing companies of the World Economic Forum (WEF) Stakeholder Capitalism
Metrics. The metrics are a set of universal, comparable disclosures focused on people, planet, prosperity and governance
that companies can report on, regardless of industry or region. We provide an overview of our disclosures based
on the Stakeholder Capitalism Metrics in the following pages.
Find out more about the World Economic Forum
Principles of Governance
Core metrics
Disclosures
Governing purpose
Quality of
governing body
Stakeholder
engagement
Ethical behaviour
Setting purpose
The Company’s stated purpose, as the expression of the means by which a
business proposes solutions to economic, environmental and social issues.
Corporate purpose should create value for all stakeholders, including
shareholders.
Governance body composition
Composition of the highest governance body and its committees by:
competencies relating to economic, environmental and social topics; executive
or non-executive; independence; tenure on the governance body; number of
each individual’s other significant positions and commitments, and the nature
of the commitments; gender; membership of under-represented social groups;
stakeholder representation.
Material issues impacting stakeholders
A list of the topics that are material to key stakeholders and the company,
how the topics were identified and how the stakeholders were engaged.
Anti-corruption
1. Total percentage of governance body members, employees and business
partners who have received training on the organisation’s anti-corruption
policies and procedures, broken down by region.
a. Total number and nature of incidents of corruption confirmed during
the current year, but related to previous years; and
b. Total number and nature of incidents of corruption confirmed
during the current year, related to this year.
2. Discussion of initiatives and stakeholder engagement to improve the
broader operating environment and culture, in order to combat corruption.
Protected ethics advice and reporting mechanisms
A description of internal and external mechanisms for:
1. Seeking advice about ethical and lawful behaviour and organisational
integrity; and
2. Reporting concerns about unethical or unlawful behaviour and lack of
organisational integrity.
Our Purpose and Values are presented in our strategy, EverGreen.
See the ‘Corporate Governance statement’ and ‘Report of the Supervisory Board’ for the composition and description of HEINEKEN’s
governance bodies.
See the section ‘Stakeholder engagement and materiality’, which describes how we engage with stakeholders and how we analyse and
identify material issues.
1. More than 16,000 of our employees received anti-bribery training in 2023. Our Company's anti-corruption policies (which not only
cover bribery but also other topics such as conflicts of interest, fraud, money laundering and gifts, entertainment and hospitality) are
also addressed in our annual Code of Business Conduct training, which was completed by more than 82,000 employees in 2023.
Incidents of corruption are investigated and remedied as part of our Speak Up framework.
See the section ‘Foundation – Responsible business conduct’ for details of our anti-bribery and Speak Up framework.
2. For initiatives and actions our anti-bribery framework refers to the section ‘Foundation – Responsible business conduct’.
1. Description of the Company’s mechanisms and procedures that provide advice about ethical behaviours is presented in
the section ‘Foundation – Responsible business conduct’.
2. Details of our Speak Up framework, our mechanism for reporting concerns about unethical behaviour, are presented in
the section ‘Foundation – Responsible business conduct’. For more details on our Speak Up policy and procedures, see our website.
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Principles of Governance
Core metrics
Disclosures
Risk and opportunity
oversight
Integrating risk and opportunity into business process
Company risk factor and opportunity disclosures that clearly identify the
principal material risks and opportunities facing the company specifically (as
opposed to generic sector risks), the company appetite in respect of these risks,
how these risks and opportunities have moved over time and the response to
those changes. These opportunities and risks should integrate material
economic, environmental and social issues, including climate change and
data stewardship.
See a description of our risk management process, key company-specific risks and opportunities and risk response in the section
‘Risk Management’. Our key risks integrate material economic, environmental and social issues, including impacts of climate change,
information security and data privacy.
Introduction
Planet
Climate change
Report
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Nature loss
Core metrics
Disclosures
Greenhouse gas (GHG) emissions
For all relevant greenhouse gases (e.g. carbon dioxide, methane, nitrous oxide, F-
gases, etc.), report in metric tonnes of carbon dioxide equivalent (tCO2e) GHG
Protocol scope 1 and scope 2 emissions.
Estimate and report material upstream and downstream (GHG Protocol scope 3)
emissions where appropriate.
TCFD implementation
Fully implement the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD). If necessary, disclose a timeline of at most three
years for full implementation. Disclose whether you have set, or have committed
to set, GHG emissions targets that are in line with the goals of the Paris Climate
Agreement – to limit global warming to well below 2°C above pre-industrial levels
and pursue efforts to limit warming to 1.5°C – and to achieve net zero emissions
before 2050.
Land use and ecological sensitivity
Report the number and area (in hectares) of sites owned, leased or managed in
or adjacent to protected areas and/or key biodiversity areas (KBA).
Freshwater availability
Water usage and withdrawal in water-stressed areas
Company risk factor and opportunity disclosures that clearly identify the
principal material risks and opportunities facing the company specifically (as
opposed to generic sector risks), the company appetite in respect of these risks,
how these risks and opportunities have moved over time and the response to
those changes.
These opportunities and risks should integrate material economic, environmental
and social issues, including climate change and data stewardship.
Net zero carbon emissions is one of the key pillars of the HEINEKEN Brew a Better World 2030 strategy, and our ambition is to reach
net zero by 2040. For details of the programme and current results, see the section ‘Reach net zero carbon emissions’.
Refer to HEINEKEN CDP Climate 2023 report for further details on our carbon performance.
We follow the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) which aim to advance global
efforts to improve quality and consistency of climate-related information.
See the section ‘Climate-related risks assessment (TCFD analysis)’ for disclosures related to TCFD recommendations.
In 2023, we started work to gain deeper insights into the biodiversity risks and opportunities across our value chain. To support us in
our journey, we have joined the Science Based Targets Network (SBTN) Corporate Engagement programme and the Taskforce for
Nature-Related Financial Disclosures (TNFD) forum, which will help guide our assessment of, and enhance disclosure for nature across
the value chain. We also continue to work towards existing Brew a Better World goals which help protect biodiversity, including
advancing our net zero roadmap to mitigate greenhouse gas emissions. We are expanding our programmes that contribute to the
preservation of biodiversity including the implementation of water balancing projects and our partnerships with farmers – as well as
exploring opportunities to promote regenerative agriculture. See the section ‘Biodiversity’ for details of our current programmes on
biodiversity enhancement.
Water is essential to our business; it constitutes 95% of our beer and is vital for growing our crops. Our 2030 water strategy, Towards
Healthy Watersheds, is based on three pillars that focus our efforts on responsible water management in our operations, in local
communities and across the value chain.
In 2023, we initiated a comprehensive Water Global Screening, focusing on our top suppliers and primary sourcing areas. This
initiative has provided valuable insights into regions experiencing high water stress and has assessed the maturity level of our suppliers
in managing water resources. This screening marks the initial phase of our water in agriculture programme, and we are dedicated to
further action. Our next step involves adopting the SBTN guidance approach, particularly for freshwater in agriculture, addressing both
water quantity and quality. This approach will help us identify priority sourcing countries and establish targets at the watershed level
for water quality and quantity. Additionally, we are committed to adhering to the latest European and global reporting requirements
for water management.
Refer to HEINEKEN CDP Water 2023 report for further details on our water strategy and actions. And, see the section ‘Towards healthy
watersheds’ for details and current results of our water stewardship strategy.
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People
Core metrics
Disclosures
Dignity and equality
Diversity and inclusion (%)
Percentage of employees per employee category, by age group, gender and
other indicators of diversity (e.g. ethnicity).
As a part of our inclusion and diversity strategy, we monitor the composition of our workforce by gender and nationalities, both at
senior management level and for the total workforce. Gender and cultural diversity are focus areas within our Brew a Better World
2030 strategy. See the section ‘Embrace inclusion and diversity’ for more details.
Percentage of employees by gender:
Women
Men
Other
Percentage of employees by nationalities:
Europe
The Americas
Africa, Middle East & Eastern Europe
Asia Pacific
Percentage of employees by age:
Under 30 years old
30 to 50 years old
Above 50 years old
24% of total workforce and 28% of senior management
76% of total workforce and 72% of senior management
0% of total workforce and 0% of senior management
29% of total workforce and 61% of senior management
41% of total workforce and 17% of senior management
17% of total workforce and 13% of senior management
13% of total workforce and 9% of senior management
23% of total workforce and 0% of senior management
62% of total workforce and 66% of senior management
15% of total workforce and 34% of senior management
Pay equality (%)
Ratio of the basic salary and remuneration for each employee category by
significant locations of operation for priority areas of equality: women to men,
minor to major ethnic groups, and other relevant equality areas.
Equal pay is an important social topic and we promote this ambition both within and beyond our Company. Our goal is to ensure
equal pay for equal work (or work of equal value) between female and male colleagues. We also recognise the importance of equality
in our rewards processes; a fair and neutral decision must be assured at every moment in the employee lifecycle where relevant
decisions are made.
By the end of 2023, 100% of operating companies have been assessed and 100% have action plans in place.
See the section ‘A fair and safe workplace’ for further equal pay strategy information.
Wage level (%)
Ratios of standard entry level wage by gender compared to local minimum
wage. Ratio of the annual total compensation of the CEO to the median of the
annual total compensation of all its employees, except the CEO.
Our goal is to ensure all our employees worldwide earn at least a fair wage by assessing and closing any wage gaps by the end of 2023.
We assess wages across all operating companies against the Fair Wage Network annually. Assessments started in 2021 with our operating
companies in developing countries where the challenges are the greatest and were rolled out to all other countries in 2022.
In 2023 we achieved a threshold of 100% of employees globally paid at least a fair wage. This means all of our direct employees earn at
least a fair wage, according to the Fair Wage Network.
Whilst we achieved our goal in 2023, ensuring a fair wage is a dynamic and ongoing process as the cost of living and other economic factors
can change. We will maintain the focusing on fair wages through ongoing assessments and adjustments and will continue to disclose the
percentage of employees paid at least a fair wage.
See the section ‘A fair and safe workplace’ of our Sustainability Review, for more information. For the ratio of total annual compensation of
CEO to median annual total compensation see the section ‘Remuneration Report’.
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People
Core metrics
Disclosures
Health and well-being
Risk for incidents of child, forced or compulsory labour
An explanation of the operations and suppliers considered to have significant
risk for incidents of child labour, forced or compulsory labour. Such risks could
emerge in relation to:
a. type of operation (such as manufacturing plant) and type of supplier; and
b. countries or geographic areas with operations and suppliers considered at risk.
Respect for people’s dignity and human rights is a foundation of how we do business within our own operations and across our value
chain. Tackling human rights issues requires multi-stakeholder collaboration and sharing of expertise internally across HEINEKEN and
within and beyond our industry. We follow the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for
Multinationals. Our Code of Business Conduct, Human Rights Policy and Supplier Code guide us to assess, act to prevent or address, and
track human rights-related risks around the world.
Our impact on human rights can occur wherever and however we operate – including through the activities of our direct suppliers and
their own suppliers. We are committed to conducting business with integrity and fairness and with respect for people, the law and our
values and we expect our suppliers to do the same as stated in our Supplier Code.
Our Supplier Risk Management process would flag any suppliers for further screening and due diligence process if required. See the
section ‘Foundation – Respecting human rights’ for more detail on our Supplier Risk management programme.
The number and rate of fatalities as a result of
work-related injury
The number and rate of fatalities as a result of work-related injury; high-
consequence work-related injuries (excluding fatalities); recordable work-related
injuries; main types of work-related injury; and the number of hours worked.
One of the key goals of our Brew a Better World 2030 strategy is to create leadership capacity to drive zero fatal accidents and
permanent disabilities at work shifting our focus from an accident-based approach to building capacity for identifying and mitigating
potential risks. See the section ‘A fair and safe workplace’ for 2023 data and details of our strategy.
Access to non-occupational medical and healthcare services
An explanation of how the organisation facilitates workers’ access to non-
occupational medical and healthcare services, and the scope of access provided
for employees and workers.
We have more than 400 health professionals worldwide, based on more than 100 on-site HEINEKEN clinics in 25 different countries, to
ensure our employees can access a wide and extensive health network. They provide care, early diagnosis, treatment and recovery at all
levels: primordial, primary, secondary, tertiary and quaternary (including remote areas within Africa, Middle East & Eastern Europe).
Our employees and dependants have access to broad medical services, such as screening and lab tests, medicines and pharmacy, health
benefits, disease prevention and health promotion projects (such as HIV, malaria, COVID-19), health trainings and educations. They also
have access to a vast and extensive health services network, available through our local partnerships and insured by qualified private
health insurance companies.
HEINEKEN also provides world class international evacuating and treatment to expats, business travellers, local employees and dependants
when the medical condition of a person cannot be safely and effectively treated in the country of employment or travel.
Sustainability
Review
Skills for the future
Training provided
Other
Information
Average hours of training per person that the organisation’s employees have
undertaken during the reporting period, by gender and employee category
(total number of hours of training provided to employees divided by the
number of employees).
We embrace the learning and growth of our employees, teams and organisation. Investing in the training and development of our
people is a core priority. We follow the 70-20-10 approach recognising that around 70% of what people learn comes through the
experience and practice of doing their jobs, 20% through engagement, networking and dialogue, and 10% through formal learning
and training.
Average training and development expenditure per full time employee (total
cost of training provided to employees divided by the number of employees).
In 2023, overall our employees received over 560,000 hours of formal training. Our direct spend on the formal training was €36.6 million.
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Reporting basis of non-financial indicators
Prosperity
Core metrics
Disclosures
Employment and
wealth generation
Absolute number and rate of employment
1. Total number and rate of new employee hires during the reporting
period, by age group, gender, other indicators of diversity and region.
2. Total number and rate of employee turnover during the reporting period,
by age group, gender, other indicators of diversity and region.
Economic contribution
1. Direct economic value generated and distributed (EVG&D), on an accruals
basis, covering the basic components for the organisation’s global
operations, ideally split out by:
– Community investment
– Revenues
– Operating costs
–
–
–
– Community investment
Employee wages and benefits
Payments to providers of capital
Payments to government
2. Financial assistance received from the government: total monetary value of
financial assistance received by the organisation from any government
during the reporting period.
Financial investment contribution
1. Total capital expenditures (CapEx) minus depreciation, supported by
narrative to describe the Company’s investment strategy.
In 2023, over 20,500 new employees joined HEINEKEN operating companies across the globe (23.46% of the total workforce).
The total number of employee turnover was also just over 20,300 employees (24.09% to the total workforce).
1. Direct economic value generated and distributed in 2023, € million:
Revenues
Operating costs: Raw materials, consumables and services
Operating costs: Amortisation, depreciation and impairments
Employee wages and benefits
Payments to capital providers: interest expenses
Payments to capital providers: dividend payments1
Payments to government: CIT expenses
Excise tax expense
Community investment (CSI)
36,375
(20,077)
(3,096)
(4,353)
(640)
(1,080)
(121)
(6,013)
6
Consolidated Income Statement, Note 6.1
Consolidated Income Statement, Note 6.3
Consolidated Income Statement, Note 6.6
Consolidated Income Statement, Note 6.4
Consolidated Income Statement, Note 11.1
Note 11.4 Capital and Reserves
Consolidated Income Statement, Note 12.1
Consolidated Income Statement, Note 6.1
Section ‘Positive impact in our communities’
Financial assistance reported in 2021 included mainly government grants related to COVID-19 (furlough arrangements), which are no
longer reported.
1. Total capital expenditures (CapEx) minus depreciation in 2023, € million:
CapEx related to Property, Plant and Equipment (PP&E)
Depreciation on PP&E
CapEx minus Depreciation
(2,434)
(1,464)
970
Consolidated Statement of Cash Flows
Note 8.2 Property, Plant & Equipment
Our EverGreen strategy has been built on our value creation model, which we call the Green Diamond. This value creation model puts
growth, profit and capital on equal footing with sustainability and responsibility. Refer to the section ‘Our EverGreen strategy’ for
further details.
2. Share buybacks plus dividend payments, supported by narrative to describe
2. Share buybacks plus dividend payments in 2023, € million:
the company’s strategy for returns of capital to shareholders.
Share buybacks
Dividend payments
(942)
(1,080)
Consolidated Statement of Cash Flows
Note 11.4 Capital and Reserves1
1. Dividend payments are reported on a cash basis and relate to dividend payments to HEINEKEN N.V. shareholders. Dividend
payments to minority shareholders of subsidiaries are excluded.
For a description of the Company Strategy for returns of capital to shareholders, see the section ‘Shareholder Information’/’Dividend Policy’.
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Prosperity
Core metrics
Disclosures
Innovation of better
products and services
Total R&D expenses
Total costs related to research and development.
Community and
social vitality
Total tax paid
The total global tax borne by the company, including corporate income taxes,
property taxes, non-creditable VAT and other sales taxes, employer-paid payroll
taxes, and other taxes that constitute costs to the company, by category of taxes.
Expenses related to Research and Development in 2023, € million:
Consumer research, Brand development and Business innovation
R&D in Digital & Technology
44.7
207
Refer to the sections ‘Shape the future of beer and beyond’ and ‘Become the best-connected brewer’ for more details on our commerce
and technology innovation strategy.
See details of the total tax paid in the section ‘Sustainable and transparent tax strategy’.
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Other climate-related disclosures
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Reporting basis of non-financial indicators
The Corporate Sustainability Reporting
Directive (CSRD)
The Corporate Sustainability Reporting Directive
(CSRD) was adopted by the European Parliament on
10 November 2022 and published in the Official
Journal on 16 December 2022.
The EU taxonomy Regulation
The EU taxonomy Regulation, adopted by the
European Commission on 4 June 2021, is a
classification system which defines a list of activities
that could make a substantial contribution to one or
more of six environmental objectives:
Its purpose is to increase transparency on
environment, social affairs and governance matters
across companies. This should help to improve
consistency and comparability in sustainability
reporting and drive the quality of reporting against
sustainability matters.
The CSRD will come into effect for HEINEKEN as of
1 January 2024 and will require limited assurance in
the 2024 Annual Report (filed in 2025). The
introduction of CSRD will significantly increase our
disclosure requirements, as provided in the European
Sustainability Reporting Standards (ESRS).
We are carrying out CSRD implementation activities
towards CSRD compliance. In 2023 we have carried
out our first double materiality assessment, which
determines the ESRSs HEINEKEN will report on in our
2024 Annual Report. In addition, a gap assessment
has been conducted and new metrics have been
defined. Deployment of the metrics is in progress,
including implementing the related control framework.
A cross-functional team is managing the CSRD
implementation, following a detailed
implementation roadmap.
As the CSRD will have a broad organisational impact,
including on governance, strategy, systems, processes
and controls, many functions within HEINEKEN are
involved in the execution of the CSRD
implementation.
More information on our double materiality
assessment can be found on page 135
1. Climate Change Mitigation (CCM);
2. Climate Change Adaptation (CCA);
3. Sustainable and protection of water and marine
resources (Water);
4. Pollution prevention and control (Pollution);
5. Protection and restoration of biodiversity and
ecosystems (Biodiversity); and
6. Transition to a circular economy (Circularity).
For each of these objectives, companies should
assess if their economic activities are in scope.
For economic activities in scope, it is required to report
on how much Turnover, Capital Expenditure (‘CapEx’)
and Operating Expenses (‘OpEx’) are ‘eligible’ (in
scope), and how much is ‘aligned’ with the EU
taxonomy. For an economic activity to be aligned, it
should make a substantial contribution to one or more
of the EU’s environmental objectives, providing it does
not do significant harm (‘DNSH’) to the other
objectives, and that the company as a whole complies
with the minimum safeguards and the economic
activity has to comply with the applicable technical
screening criteria.
Reporting
Based on further guidance published on the practical
application of the EU taxonomy, we have re-assessed
our approach during 2023. Non-revenue generating
activities have now been included in the scope of the
eligibility assessment for the CapEx and OpEx KPIs.
This resulted in the inclusion of activities related to
energy efficient equipment, renewable energy
technology, wastewater treatment and water
collection into the reporting of the eligible CapEx KPI.
As the eligible CapEx is not material, HEINEKEN has
not assessed the alignment criteria and therefore
reports 0% alignment. The OpEx KPI is not reported as
the amounts are also considered immaterial and
therefore reporting 0% eligible and aligned OpEx.
New EU taxonomy requirements came into effect
in 2023 related to Water, Pollution, Biodiversity
and Circularity. HEINEKEN has assessed the new
requirements and found no additional activities to
report on.
In the future HEINEKEN will further update and
fine-tune the reporting as more practical guidance
comes available.
The disclosure tables are included on the next pages.
Assumptions and accounting policies applied
in our eligibility analysis
There are different practices in reporting and
interpretations observed in the market. We continue
to monitor the developments in the regulation and
market practice and consider this in our future
reporting.
The key assumptions and policies applied by
HEINEKEN are:
– Total Turnover under the EU taxonomy is assumed
equal to Revenue as reported under IFRS and
HEINEKEN’s accounting policies (see note 6.1 of the
consolidated financial statements).
– Total CapEx includes purchased PP&E, additions to
ROU assets and purchased intangible assets as
reported in the consolidated financial statements.
See the table below with the total CapEx as included
in the denominator of the CapEx KPI, including
references to the consolidated financial statements.
CapEx denominator
In millions of €
Purchased owned
PP&E
Additions to ROU
Assets
Reference to
consolidated
financial
statements
2023
2,255
Note 8.2
350
Note 8.2
Purchased Intangible
Assets
Total CapEx
241
2,846
Note 8.1
– Total ‘OpEx’ includes direct non-capitalized costs
incurred for the day-to-day servicing of assets,
consisting primarily of repair and maintenance costs
and short -term lease expenses. See the table below
with the total OpEx as included in the denominator
of the OpEx KPI, including references to the
consolidated financial statements.
OpEx denominator
In millions of €
Amount in
€ mn
Repair and
Maintenance
Short-term lease
expenses
Total OpEx
622
110
732
Reference to
consolidated
financial
statements
Note 6.3
Note 6.3
Net zero carbon emission strategy
As part of Brew a Better World, we aim to reach net
zero carbon emissions in scope 1 and 2 in 2030 and in
scope 1, 2 and 3 in 2040.
Power Purchase Agreements (PPAs) and Energy
Attribute Certificates (EACs) are an important part of
our sourcing strategy to contract renewable energy
and drive progress towards our net zero emissions
ambitions in scope 1 and 2. While these steps
contribute in decreasing our carbon emissions in scope
1 and 2, they are not part of CapEx and OpEx KPIs as
reported under the EU taxonomy.
The biggest part of our carbon footprint lies in the
value chain beyond our own production sites (scope
3). Any measures taken to reduce the carbon footprint
in the value chain are also out of scope of the CapEx
and OpEx KPIs.
More information on our Sustainability strategy
and measures can be found in the Sustainability
Review section
179
EU taxonomy
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Disclosures
Reporting basis of non-financial indicators
Turnover
Economic Activities (1)
Text
Substantial Contribution Criteria
DNSH Criteria ('Does Not Significantly Harm')
T
u
r
n
o
v
e
r
(
3
)
A
b
s
o
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e
l
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r
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r
(
4
)
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t
i
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o
C
o
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e
(
2
)
M
i
t
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a
t
i
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(
5
)
*
C
l
i
m
a
t
e
C
h
a
n
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e
A
d
a
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t
a
t
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(
6
)
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
(
7
)
Millions,
€
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
(
8
)
Y; N;
N/EL
P
o
l
l
u
t
i
o
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c
o
s
y
s
t
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s
(
1
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s
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)
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c
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(
9
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l
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m
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e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
(
1
2
)
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
(
1
3
)
(
1
4
)
P
o
l
l
u
t
i
o
n
E
c
o
n
o
m
y
C
i
r
c
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a
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l
(
1
5
)
i
B
o
d
i
v
e
r
s
i
t
y
(
1
6
)
S
a
f
e
g
u
a
r
d
s
(
1
7
)
i
i
M
n
m
u
m
Taxonomy aligned
proportion of total
turnover, year
2022 (18)
Category
(enabling activity)
(20)
Category
(transitional
activity)
(21)
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
Introduction
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Turnover of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
Of which enabling
Of which transitional
0
0
0
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Turnover of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
A. Turnover of Taxonomy-eligible
activities (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
0
0
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
E
T
0%
0%
0%
0%
0%
Turnover of Taxonomy-non-
eligible activities
Sustainability
Review
Total (A+B)
36,375
100%
36,375
100%
Other
Information
180
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Reporting basis of non-financial indicators
CapEx
Substantial Contribution Criteria
DNSH Criteria ('Does Not Significantly Harm')
Economic Activities (1)
Introduction
Text
P
r
o
p
o
r
t
i
o
n
o
f
C
a
p
E
x
(
4
)
M
i
t
i
g
a
t
i
o
n
(
5
)
*
C
o
d
e
(
2
)
C
a
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E
x
(
3
)
A
b
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l
C
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m
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A
d
a
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(
6
)
C
l
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a
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e
C
h
a
n
g
e
W
a
t
e
r
(
7
)
Millions,
€
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
(
8
)
Y; N;
N/EL
P
o
l
l
u
t
i
o
n
E
c
o
s
y
s
t
e
m
s
(
1
0
)
i
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r
s
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d
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(
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1
)
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c
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(
9
)
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l
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e
C
h
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e
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d
a
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t
a
t
i
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n
(
1
2
)
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l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
(
1
3
)
(
1
4
)
P
o
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l
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t
i
o
n
E
c
o
n
o
m
y
C
i
r
c
u
a
r
l
(
1
5
)
i
B
o
d
i
v
e
r
s
i
t
y
S
a
f
e
g
u
a
r
d
s
(
1
7
)
(
1
6
)
i
i
M
n
m
u
m
Taxonomy
aligned
proportion
of total
CapEx, year
2022 (18)
Category
(enabling
activity)
(20)
Category
(transitiona
l activity)
(21)
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N
Y/N Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. CapEx of environmentally sustainable activities (Taxonomy-aligned)
CapEx of environmentally sustainable activities (Taxonomy-aligned)
(A.1)
Of which enabling
Of which transitional
0
0
0
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Construction, extension and operation of water collection,
treatment and supply systems
Financial
Statements
Construction, extension and operation of waste water
collection and treatment
Installation, maintenance and repair of energy efficiency
equipment
Installation, maintenance and repair of renewable energy
technologies
Sustainability
Review
5.1
5.3
7.3
7.6
CapEx of Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities) (A.2)
Other
Information
A. CapEx of Taxonomy-eligible activities (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of Taxonomy-non-eligible activities
Total (A+B)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
8
0.3 %
28
1.0 %
8
0.3 %
0.9 %
27
71
71
2,775
97.5 %
2,846
100%
2.5 % 2.5 %
2.5 % 2.5 %
E
T
0%
0%
0%
0%
0%
0%
0%
0%
0%
181
EU taxonomy
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Reporting basis of non-financial indicators
OpEx
Economic
Activities (1)
Text
Substantial Contribution Criteria
DNSH criteria ('Does Not Significantly Harm')
C
o
d
e
(
2
)
O
p
E
x
(
3
)
A
b
s
o
u
t
e
l
o
f
O
p
E
x
(
4
)
P
r
o
p
o
r
t
i
o
n
M
i
t
i
g
a
t
i
o
n
(
5
)
*
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
(
6
)
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
(
7
)
Millions,
€
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
(
8
)
Y; N;
N/EL
P
o
l
l
u
t
i
o
n
e
c
o
s
y
s
t
e
m
s
(
1
0
)
i
B
o
d
i
v
e
r
s
i
t
y
a
n
d
M
i
t
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g
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t
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(
1
1
)
E
c
o
n
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m
y
C
i
r
c
u
a
r
l
(
9
)
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
(
1
2
)
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
(
1
3
)
(
1
4
)
P
o
l
l
u
t
i
o
n
E
c
o
n
o
m
y
C
i
r
c
u
a
r
l
(
1
5
)
i
B
o
d
i
v
e
r
s
i
t
y
(
1
6
)
S
a
f
e
g
u
a
r
d
s
(
1
7
)
i
i
M
n
m
u
m
Taxonomy aligned
proportion of total
OpEx, year 2022
(18)
Category
(enabling activity)
(20)
Category
(transitional
activity)
(21)
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
Introduction
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
0
0
0
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Report
of the
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OpEx of Taxonomy-eligible
but not environmentally
sustainable activities (not
Taxonomy-aligned activities)
(A.2)
Financial
Statements
A. OpEx of Taxonomy-
eligible activities (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Sustainability
Review
OpEx of Taxonomy-non-
eligible activities
Total (A+B)
732
732
100%
100%
Other
Information
0
0
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
E
T
0%
0%
0%
0%
0%
Introduction & Context
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Reporting basis of non-financial indicators
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This section provides an overview of the reporting scope, key definitions
and measurement principles related to our Brew a Better World 2030 KPIs.
Reporting period
The non-financial indicators in this report cover the performance of all HEINEKEN consolidated entities
from 1 January 2023 up to and including 31 December 2023, unless otherwise stated. The scope of
entities included is equal to the basis of consolidation as per our financial statements, unless otherwise
stated. Refer to note 5 General accounting policies sub (a) of the financial statements for the
consolidation principles and note 13.4 for the list of our significant subsidiaries.
Entities in scope of reporting
New acquisitions are included in the consolidated reporting from the first full calendar year after
acquisition. In 2023, HEINEKEN acquired NBL and Distell and disposed Russia and Vrumona (refer to
note 10.1 Acquisitions and disposals of subsidiaries and non-controlling interests and note 10.2 Assets
or disposal groups classified as held for sale). The results of NBL and Distell will be included as of next
reporting year (2024). The results of Russia and Vrumona are included until the date of disposal (24
August and 29 September 2023 respectively).
Deviations from the reporting scope depend on the nature of each indicator and exceptions and
limitations are explained per each indicator below. Units (countries, sites, suppliers, brands, etc.) which,
for specific reasons, received formal derogations for compliance are excluded from the indicator
reporting scope.
Financial
Statements
Indicators in scope
The content of this report is related to the Key Performance Indicators (‘KPI’s) directly linked to our
Brew a Better World (BaBW) strategy and 2030 goals.
Sustainability
Review
Risk management
As a part of the HEINEKEN Risk management process, we assess the main risks that could hinder
HEINEKEN in achieving its strategy and business objectives. This process includes identifying
Environmental, Social and Governance (ESG) risks. These main risks are included in this report
(see the Risk Management section).
Other
Information
Reliability and accuracy of data
We have processes governing the collection, review and validation of non-financial data included in this report at
both local operating company and global level. We apply uniform definitions and instructions for reporting
purposes to improve the accuracy and comparability of data. Where possible, standard or automated calculations
and validity checks are built into systems to minimise errors. We are continuously strengthening our data collection
processes and underlying controls.
Our operating companies and data owners report fairly and in accordance with agreed procedures and
instructions. However, it is not possible to ascertain full completeness and accuracy of data contained in our report.
Operating companies are at different stages of maturity with regards to data collection and reporting processes.
HEINEKEN’s internal audit function, Global Audit, is involved in the annual review of the non-financial reporting
process, including the quality of control processes at various levels and data ownership. Deloitte provides limited
assurance on the indicators as described in detail in the Assurance report of the independent auditor.
Definitions per indicator
We gather data in accordance with guidelines and definitions based on the Global Reporting Initiative (GRI
Standards) Guidelines, unless stated otherwise. We aim to align with international standards (WEF Common
Metrics, TCFD, CSRD, etc.), and, if not available, we work with industry partners such as the Beverage Industry and
Environmental Roundtable (BIER) to develop common practices.
‘Production site’ is used in various KPIs and refers to breweries, cider plants, soft drink plants, malteries, water plants
and combinations of these at which malt, beer, cider, soft drinks, water or wine are produced. Production sites are
only included when these are part of a consolidated entity.
The tables below provide more information on definitions, scope, measurement criteria and reporting
assumptions per reported indicator.
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Environmental – Reach net zero carbon
Reach net zero in scope 1 and 2 by 2030
Key performance indicator
Metric tonnes of CO₂-equivalent (CO₂-eq) emissions
Measurement/units
–
– % of CO₂-eq emissions reduction in production in the year compared to the CO₂-eq emissions in production in 2018.
Tonnes of CO₂-eq emissions (in metric tons).
Key definitions
–
–
–
To calculate the CO₂-eq emissions, the green house gas (GHG) protocol is used, Corporate reporting scope 1 and 2 methodology.
Formula: Fuel purchased and energy imported (MJ or kWh) x GHG emission factor (CO₂, N₂O, CH₄).
Energy emission factor: Converts energy to carbon, depending on the type of energy and related emissions. The energy emission factor is based on the IEA (International
Energy Agency, https://www.iea.org/) for grid electricity, DEFRA (Department for Environment, Food & Rural Affairs, UK) for biofuels and IPCC 2006 report for fossil fuels.
– Net zero as defined by SBTi Net-Zero Standard means reducing CO₂eq (GHG) emissions to zero, or to a residual level, and compensating the residual emissions with a
–
–
maximum of 10% of emissions.
CO₂-eq emissions: this includes emissions caused by direct emissions from combustion of fuels, indirect emissions from imported (purchased) heat and electricity, and
emissions from refrigerant losses.
The production sites represent 90% of scope 1 and 2 emissions. By reaching 0 emissions in production, HEINEKEN will decrease its scope 1 and 2 emissions by 90% in line with
its science-based targets.
Environmental – Reach net zero carbon
Reduce scope 3 emissions by 21% by 2030
Reduce emissions across our value chain (scope 1, 2 and 3) by 30% by 2030
Reach net zero across our value chain by 2040
Baseline:
2018
–
Baseline changes are implemented
–
according to the GHG protocol.
Scope:
– All production sites of consolidated entities
with more than 20 khl volume produced on
an annual basis.
Key performance indicator
1. Metric tonnes of CO₂-eq emissions
2. % of CO₂-eq emissions reduction in the value chain in the year compared to the CO₂-eq emissions in value chain in 2018
Measurement/units
–
– % of CO₂-eq emissions reduction in value chain in the year compared to the CO₂-eq emissions in value
Baseline:
2018
–
Baseline changes are implemented according to the GHG protocol.
–
Total CO₂-eq emissions (in metric tons).
chain in 2018.
Methodology
–
The Company Carbon Footprint includes GHG emissions, measured with CO₂-equivalent (CO₂-eq) from all the activities linked to making and selling our products across the entire barley to bar value chain. We have identified
seven phases in the lifecycle of a beverage: agriculture, raw materials processing, beverage production, packaging, logistics, cooling and other emissions. A full description of the coverage of the workstreams is given in the
lifecycle definitions below.
– We started measuring our carbon footprint in 2010 when only a few of our operating companies were included and a specific methodology was not yet available. Since then, our scope has expanded and the methodologies we
use have improved. Today, our Company Carbon Footprint includes our entire value chain – from our own operations to suppliers, subcontractors and customers, across activities including manufacture and recycling of
packaging and cooling beverages at points of sale. We continue to develop it in line with new methodologies, availability of better data sources and alignment with industry best practice.
– HEINEKEN’s calculation scope and principles are compared to the requirements of three relevant protocols: the GHG protocol Product Standard, the GHG protocol Corporate Standard (scope 1 and 2) and the GHG protocol Corporate
Standard (scope 3). HEINEKEN accounts for relevant GHG emissions along its production: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), sulphur hexafluoride (SF6), perfluorocarbons (PFCs) and hydrofluorocarbons (HFCs).
HEINEKEN has worked closely with BIER (Beverage Industry Environmental Roundtable) to develop GHG emissions sector guidance to standardise GHG reporting. We adhere to the latest BIER protocol, version 4.2.
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Key definitions
Lifecycle definitions:
– Agriculture covers all activities for land-bound inputs used for beverage production, for example, cultivation
–
–
–
–
of barley, hops, sugar beets, fruits. The impact related to land use change is included in this lifecycle stage.
Raw materials processing covers all processing of inputs before the beverage production stage, for
example malting barley, concentrating hops, producing sugar syrup or fruit concentrates.
Packaging material production and disposal covers all activities for packaging material production,
generated at the packaging suppliers. This includes input materials, energy used and the recycled material
used. The disposal (recycling) of packaging materials are calculated with the ‘Circular Footprint Formula’ (as
per the Product Environmental Footprint Category Rules (PEFCR) and includes country- and material-
specific recycling rates).
Logistics covers both inbound transport of raw agricultural inputs, processed inputs and packaging
materials to our breweries as outbound distribution of beverages to the point of sale consumer, and
warehouse energy consumption. It includes the logistics network, both controlled and not controlled by
HEINEKEN, to get the finished product to the point of sale and back (returnable packaging).
Cooling covers the emissions from cooling the beverages. This can be cooling in draught beer
installations (DBIs), cooling in fridges in bars and restaurants and home cooling by consumers.
– Other emissions cover: Purchased goods and services (other than packaging and raw materials), Capital
–
–
–
goods, Business travel, Commuting, Upstream leased assets and Investments.
Emission categories: As per GHG protocol requirements we split our emissions into scope 1, scope 2 and
different scope 3 categories.
Scope 1 emissions are emissions from fuel combustion and fugitive emissions at our production plants
and own transport.
Scope 2 emissions are emissions from acquired and consumed electricity, steam, heat.
Scope 3 emissions fall under different categories:
–
Category 1 – upstream emissions from production of raw and packaging materials, external
processing, co-packing and municipal water intake. This category also includes end-of-life
treatment of packaging materials related to recycling credits;
Category 2 – emissions from capital goods (purchased Property, Plant & Equipment);
Category 3 – upstream emissions of fuels, electricity and heat used by own production sites,
warehouses and transport;
Category 4 – emissions from inbound and outbound transportation;
Category 5 – emissions from solid waste and wastewater;
Category 6 – emissions from business travel;
Category 7 – emissions from employee commuting;
Category 8 – emissions from leased cars (fuel);
Category 9 – emissions from transportation to end customers and storage of products at retailers;
Category 11 – emissions of fridges, DBIs and home cooling;
Category 12 – end-of-life treatment of sold products emissions, as well as fridges and DBIs;
Category 14 – emissions from franchises (UK Star Pubs & Bars)
Category 15 – emissions of joint ventures and associates.
–
–
–
–
–
–
–
–
–
–
–
–
Significant estimates and judgements
– HEINEKEN strives to report the Carbon Footprint as accurately and completely as possible. Due to inherent limitations
in relation to the uncertainty of measurement equipment and/or availability of actual data we apply extrapolations,
use estimates, assumptions and judgements in our reporting. Estimates, assumptions and judgements are based on
historical data. As such, emissions reporting provides inherent limitations to the accuracy of information.
We used the following significant estimates to report our emissions:
–
–
–
–
To calculate emissions of our own production operations, we use data provided by our energy and fuel suppliers. If this
data is not available, we use the 2006 IPCC Guidelines for National Greenhouse Gas Inventories for emission factors of
fossil fuels, International Energy Agency data (September 2022) for country grid emission factors and UK DEFRA
emission factors for biofuels;
The transport emissions reporting has limitations for all transport modes. For fleet within our control, we have started to
use fuel-based data in countries where we have telematics systems in place. For contracted partners where have the
data of kilometres driven and type of vehicle used, we calculate emissions based on a Global Logistics Emissions Council
(GLEC) framework accredited emission factor gCO2-eq/km. For contracted partners where data on distance travelled is
not available, calculations are based on estimates. For inbound transport, emissions are calculated for our biggest
categories such as glass bottles, aluminium cans, malt and adjuncts.
Emissions at outsourced logistics sites also have limitations. For such sites where data on electricity (kWh)
consumption and fuel consumption for forklift trucks is not available, estimations are used.
Packaging emissions are based on a circular carbon footprint formula (as per PEFCR) incorporating upstream
production, use and end of life of the product. As glass bottles and aluminium cans are HEINEKEN’s most significant
emissions contributors, suppliers making up 80% of these emissions provide information about the carbon intensity
of their production locations supplying HEINEKEN. For the remainder of our packaging materials, an industry-
approved PEFCR emissions factor is applied.
– Agriculture and processing emissions reporting has limitations. We use external party inputs for land use change
–
–
(LUC) emission factors per country and per crop. Based on the available data per supplier shed base (regional base
of our farmers) and per crop in the external party database, a weighted average emission factor per crop is
calculated (for barley we have data available for 67% of the total volume). This weighted average emission factor is
applied to calculate the emission per crop for all countries. For processing, we collect data from suppliers. In case
there is no data available, we estimate the emission factor per material group.
To calculate cooling emissions, we assume the lifetime of fridges and DBIs to be seven years. We calculate DBI
emissions based on the actual number of DBIs in the market. Emissions of fridges are based on the total number of
fridges purchased in the last seven years (2017- 2023). We also estimate home cooling emissions based on the
volume sold via non-keg pack types and percentage sold via home cooling (vs. fridges).
For the other emissions category we also apply assumptions and judgement. For goods purchased for resale, we
assume that these have a similar carbon footprint as our own produced products. For assets under construction
(purchased Property, Plant and Equipment), we assume that these have a similar carbon footprint as our capitalised
assets. For employee commuting distance and methodology, we use an employee survey to have HEINEKEN
related statistics about average distance of the commute, its frequency per week and the chosen mode of transport.
For emissions factors, we use those published by parties like DEFRA – with a frequency of update to match the
change scale. As of 2022 we also included emissions related to UK Star Pubs & Bars business in the ‘Other’ category.
Scope
– We calculate the GHG emissions for the largest emitting operating companies and extrapolated the obtained results to reach the absolute total amount. Every year we add entities in scope of the calculation and at the same time decrease the extrapolated
amount. calculation (e.g. pubs and bars in UK). Russia has been excluded from the scope of calculation and included in the extrapolation due to unavailability of actual information from 1 January 2023 until 26 August 2023 (moment of HEINEKEN’s exit
from Russia)
2023 scope
Raw materials
Processing
Beverage
Production
Packaging
Top-34
Top-34
64 (All)
Top-23
Logistics
Top-32
Cooling
Top-32
Coverage per stream based on total volume produced
85%
85%
100%
75%
82%
86%
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Reporting basis of non-financial indicators
Environmental – Reach net zero carbon
Energy from renewable sources
Key performance indicator
Percentage of energy from renewable sources in production
Measurement/units
– % of renewable energy consumption compared to the total amount of energy consumption.
Key definitions
–
–
Thermal energy from renewable sources: quantity of thermal energy coming from: biomass, biogas, solar thermal and imported heat (with 100% renewable % and 0 g CO2/MJ)
Electrical energy coming from renewable sources includes:
– Own renewable energy production = all electricity generated from renewable resources on-site (hydro, solar, biogas);
– Imported electricity under green certificates via PPAs (Power Purchase Agreements). Such green certificates are dependent on information provided by the energy supplier.
Baseline:
– N/A
Scope:
– All production sites of consolidated entities
with more than 20 khl volume produced on
an annual basis.
Environmental – Reach net zero carbon
100% sustainable ingredients (hops, barley) by 2030
Key performance indicator
% of sustainable volume (barley and hops)
Measurement/units
– % of contracted sustainable volumes (in metric tonnes) for the next year compared to total contracted volumes (in metric tonnes) for the next year.
–
For the measurement of the KPI, we use contracted volumes for the next year and not the actual volumes purchased.
Baseline:
– N/A
Key definitions
–
Sustainability
Review
Other
Information
–
–
–
Sustainable volume: measured in accordance with the Sustainable Agriculture Initiative (SAI): The efficient production of safe, high quality agricultural products, in a way that
protects and improves the natural environment, social and economic conditions of farmers, their employees and local communities, and safeguards the health and welfare of
all farmed species.
The compliance with SAI is monitored via a third party. On an annual basis, the third party performs random on-site visits for supplier verification on a number of suppliers and
their farmers.
SAI: A food industry organisation aimed at supporting the development of sustainable agriculture, involving stakeholders of the food chain. For more details see
www.saiplatform.org.
Sustainable ingredient: An agricultural material that was produced in a manner which produces safe, high quality agricultural products, protects and improves the natural
environment and the social and economic conditions of farmers and their communities.
– Mass balance approach: HEINEKEN applies the Mass Balance approach for the calculation of sustainable volumes in the supply chain. This entails that the inputs into a process
must be equal to the outputs, plus any losses or accumulation in the process.
Scope:
–
The reported volume includes both the
volume purchased for our consolidated
entities, as well as volume purchased
centrally on behalf of some joint ventures
and associates.
Smaller African farmers (<150ha) are
excluded from the reporting scope.
–
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Environmental – Maximise circularity
Zero waste to landfill for all our production sites by 2025
Key performance indicator
Number of production sites with zero waste to landfill
Measurement/units
–
# of landfill free sites compared to the total number of sites.
Baseline:
– N/A
Key definitions
–
– Waste: A material, substance, or by-product eliminated or discarded as no longer useful or required after the completion of a process. The majority of our production waste
Landfill free site: A site is considered to be landfill free in case less than 2% of the waste (in kilograms) of that site is sent to landfill.
comprises of organic co-products like brewers’ grain, surplus yeast, anaerobic sludge from wastewater, spent kieselguhr and spent alcohol.
Scope:
– All production sites of consolidated entities
with more than 20 khl volume produced on
an annual basis.
– Waste destinations include reuse, human consumption, animal feed, material recycling, compost/soil improvement, energy (biogas), combustion with energy recovery,
–
combustion without energy recovery.
Landfill: deposit into or on to land, deep injection, surface impoundment (e.g. discard into pits, ponds or lagoons), release into water bodies, permanent storage (e.g. containers
in a mine); sanitary landfills, all waste which is not reused, recycled or combusted/incinerated, all waste brought to landfill by parties contracted by us, dump and/or waste with
unknown waste destination are also considered to be landfilled.
Environmental – Towards healthy watersheds
Fully balance water used in our products in water-stressed areas by 2030
Key performance indicator
Percentage of water-stressed sites with 100% or more water balance
Measurement/units
–
Percentage of water-stressed sites with 100% or more water balance compared to the total of water-stressed sites.
Key definitions
– Water stress: A territory is considered water stressed when it withdraws 25% or more of its renewable freshwater resources (UN Water 2021).
– Water balancing: Water balancing is redressing the balance in water-stressed areas between the amount of water we source from the watershed and the amount that is not
Other
Information
returned because it is used in our products, and loss through evaporation.
– Water-stressed area: We identify water-stressed area through a three-step screening:
– A site water security self-assessment that is completed by operating companies annually;
– Global Water Risk Screening that is led by Global Sustainable Production and supported by Global Sustainable Development every five years;
–
Source Vulnerability Assessment (SVA) by a third party with experience in hydrology for shortlisted sites is conducted after step two. SVA is a compilation, review and
validation of scientific data in relation to quantity, quality, accessibility and local capabilities, has an inventory and analysis of water-related risks, stakeholder mapping and
proposed list of solutions.
For reporting of this KPI make use of the Volumetric Water Benefit Accounting method as published by the World Resources Institute.
–
Baseline:
– N/A
Scope:
– All water-stressed production sites of
consolidated entities with more than 20 khl
volume produced on an annual basis.
Currently 32 water-stressed sites are
identified.
–
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Environmental – Towards healthy watersheds
Treat 100% of wastewater of all breweries by 2023
Key performance indicator
Number of sites discharging untreated wastewater to surface water
Measurement/units
– Number of sites discharging untreated wastewater to surface water.
Baseline:
– N/A
Key definitions
– Wastewater refers to untreated wastewater discharged from a production site or a third-party wastewater treatment plant.
– Waste Water Treatment Plant (WWTP): Plant removing contaminants from the brewery’s wastewater and producing environmentally safe treated wastewater before releasing
it into surface water.
Third party WWTP: An external party in charge of the treatment of production site wastewater and subsequent discharge into surface water.
–
Scope:
– All production sites of consolidated entities
with more than 20 khl volume produced on
an annual basis.
Environmental – Towards healthy watersheds
Reduce average water usage to 2.6 hl/hl in water-stressed areas, and 2.9 hl/hl worldwide by 2030
Key performance indicator
Water withdrawal/volume beverage produced (hl/hl)
Measurement/units
–
hl water withdrawal per hl of volume produced.
Baseline:
–
–
2008 for all sites.
2014 for sites in water-stressed areas.
Key definitions
– Water withdrawal: The production site can obtain water from various sources, such as: groundwater or well water abstraction, water purchased from a public or private water
Scope:
– All beverage production sites of
company, surface water from rivers, lakes or sea and collected rainwater.
Volume produced is the total amount of beverage volume produced.
–
consolidated entities with more than 20 khl
volume produced on an annual basis.
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Review
Other
Information
188
Reporting basis of non-financial indicators
Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Social – Embrace inclusion and diversity
Gender balance across senior management: 30% women by 2025, 40% by 2030
Key performance indicator
Percentage of women in senior management
Measurement/units
–
Percentage of women senior managers in the full senior management population (men – women – others) as of 31 December.
Baseline:
– N/A
Key definitions
–
Senior managers are all internal employees entitled to the Senior Management Reward Policy.
Social – Embrace inclusion and diversity
Cultural diversity: across each region at least 65% of country leadership teams are regional nationals by 2023
Key performance indicator
In each region, % regional nationals across the operating company Management Teams
Scope:
– All consolidated entities.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Measurement/units
–
(Headcount with nationalities from the region in all operating company Management Teams in that region)/(Total headcount of all the operating company Management
Teams in that region as of 31 December).
Baseline:
– N/A
Key definitions
– Management Team (MT): The MT in an operating company is defined by the General Manager/Managing Director (GM/MD). In principle this includes all direct reports of the
Scope:
– All consolidated entities, except head office
–
GM/MD, but there could be employees reporting to the GM/MD, which are not considered to be part of the operating company MT (e.g. business support).
Region follows the managerial reporting structure in our segment reporting (refer to note 6.1 Operating segments in the financial statements). Head office and regional offices
are excluded.
– Headcount: Based on internal headcount, both temporary as well as permanent contracts.
–
For people with double nationalities, we select the first nationality as recorded in our People database.
and regional offices.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
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Reporting basis of non-financial indicators
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
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Report
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Supervisory
Board
Financial
Statements
Sustainability
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Other
Information
Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Social – Embrace inclusion and diversity
100% of our managers are trained in inclusive leadership by 2023
Key performance indicator
% of people managers trained in the full people managers population
Measurement/units
–
People managers who completed the inclusive leadership e-learning/total population of people managers.
Key definitions
–
–
People managers are employees managing a team of employees (one or more direct reports). Employees without direct reports are excluded.
Inclusive leadership e-learning includes our nine inclusive practices. The nine inclusive practices are: provide equal opportunities, seek multiple points of view, be transparent,
communicate inclusively, give and receive feedback, develop self-awareness, find common ground, make it safe for others and shape and deliver with the team. The e-learning
can be completed in 30 minutes.
Baseline:
– N/A
Scope:
– All people managers within all our
consolidated entities.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
Social – A fair and safe workplace
Fair wage for employees: close any gaps by 2023
Key performance indicator
1. % of (in scope) operating companies assessed per region
2. % of direct employees of assessed (in scope) operating companies that earn at least a fair wage, according to the Fair Wages Network (FWN)
Measurement/units
–
–
Percentage of operating companies assessed compared to all operating companies.
Percentage of employees (measured in FTE) that earn a fair wage according to the FWN compared to all employees (measured in FTE).
Baseline:
– N/A
Key definitions
–
Fair wage: A wage that supports a decent standard of living for the employee and his/her family and is reasonable for the type of work done and sufficient to meet employees’
basic needs for food, shelter, education for their children and some discretionary income. Fair wages also take into account factors such as family size, number of individuals
employed per family and hours worked. Fair wage is not structurally dependent on variable factors, such as working overtime or incentive pay.
Fair Wage Network: The FWN is our data source to determine the level of fair wages in different countries. The FWN is an NGO with data available for 200+ countries, which is
updated annually.
–
– Assessment: Evaluation of possible pay gap per employee per operating company in scope.
–
Pay gap: A difference between Country Annual Fair Wage based on FWN and the individual employee Annual Base Salary + Fixed Guaranteed Allowances + Cash Equivalent of
Benefits.
Scope:
– All directly employed employees with a
–
permanent contract of all production sites
of consolidated entities.
Consolidated entities with less than 50 FTE
are not included in the reporting scope.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
– UBL is excluded from the reporting scope in
2023.
190
Reporting basis of non-financial indicators
Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Social – A fair and safe workplace
Equal pay for equal work: assessments and action by 2023
Key performance indicator
1. % in scope operating companies assessed
2. % in scope operating companies with actions to close any gap
Measurement/units
–
–
Percentage of operating companies assessed compared to the total number of HEINEKEN operating companies.
Percentage of operating companies with an action plan to close any gap compared to the total number of HEINEKEN operating companies.
Baseline:
– N/A
Equal pay: Comparable salary levels for male and female employees on similar types of jobs in an operating company.
Equal work: Positions in HEINEKEN that are comparable to each other.
Key definitions
–
–
– Assessment: The analysis to review the current state of equal pay for equal work in an operating company. This analysis includes five measurement drivers related to equal pay,
and is based on the actual employee population and salary details in an operating company. The assessments are performed every two years, except in cases with a higher gap
where more frequent monitoring takes place.
– Action plan: A list of commitments, actions and timelines aimed to improve on the various drivers of equal pay, based on the outcomes of the equal pay assessment for the
Scope:
– All consolidated entities.
–
Consolidated entities with less than 50 FTE
are not included in the reporting scope.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
–
operating company.
Equal pay drivers:
– Gender Pay Gap: Relative salary position (RSP) % gap between male and female employees per job grade per operating company;
– Gender Representation: The distribution of males and females per operating company;
–
–
– MT representation: The distribution of male and female employees in management teams.
Performance Assessment and Salary Increase: Comparison of the salary increase % difference per performance rating between males and females;
Promotions: Comparison of the promotion % of male and female employees over the last 12 months respectively;
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Heineken
N.V.
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2023
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Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Social – A fair and safe workplace
Ensure fair living and working standards of third-party employees and brand promoters
Key performance indicator
Operating companies assessed for fair living and working standards
Measurement/units
–
Percentage of operating companies assessed compared to the total number of in scope operating companies.
Baseline:
– N/A
Key definitions
Living and working standards:
– Workers of third-party service providers are receiving legal entitlements and basic conditions of employment;
–
–
Legal entitlements: Salaries, pensions, holiday allowance, overtime pay, etc. as required by local law;
Basic conditions of employment include: Third-party employees should be paid fair wages and work reasonable hours, above minimum requirements where applicable; work in
a decent work environment and operate under an appropriate and effective health and safety management system.
Assessments:
–
Social assessments at HEINEKEN are based on third-party assessment as per the ‘ERSA’ and/or ‘SMETA’ methodology and are used to assess whether HEINEKEN facilities and
the Outsourced Service Providers (OSPs) are compliant to these standards or have action plans in place to meet standards;
Scope:
–
–
–
–
2023 regions in scope: AMEE and
Americas.
Consolidated entities with production.
Export entities are not in scope.
Consolidated entities with less than 50 FTE
are not included in the reporting scope.
– On-site labour based third-party service
providers.
– Operating companies and their facilities are expected to be assessed once per three years, in addition to follow-up assessments where necessary to monitor non-compliance
– HEINEKEN South Africa is excluded due to
and corrective actions;
– Assessments include a sample of OSPs on its facilities, the environment they work in and the management systems HEINEKEN has in place to monitor its relationship with both
the integration within HEINEKEN
Beverages.
OSPs and brand promoter agencies.
Social – A fair and safe workplace
Create leadership capacity to drive zero fatal accidents and serious injuries at work
Key performance indicator
Completion Life Saving Commitments (LSC) e-learning training for people managers
Measurement/units
–
Percentage of people managers that have completed the LSC training compared to the total population of people managers.
Baseline:
– N/A
Key definitions
–
–
People managers are employees managing a team of employees (one or more direct reports).
The Life Saving Commitments (LSC) are based on our operation’s highest risk activities and focus on our personal commitment to follow and abide by HEINEKEN’s safety
standards. With the Golden Principle everyone is empowered to stop work and speak up when work cannot be executed safely or if it is not possible to adhere to the LSC.
LSC e-learning: The e-learning includes LSC and Golden Principle descriptions, scenarios with practical examples and questions. Once all questions are correctly answered, the
training is completed.
–
Scope:
– All consolidated entities.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
192
Reporting basis of non-financial indicators
Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Social – A fair and safe workplace
Create leadership capacity to drive zero fatal accidents and serious injuries at work
Key performance indicator
Zero work-related fatalities and permanent disabilities
Measurement/units
–
Total number of fatalities and permanent disabilities as a result of work-related accidents in a calendar year.
Baseline:
– N/A
Key definitions
– Work-related fatal accident: Work-related fatal accident means occupational accident leading to death. All work-related fatal accidents of permanent, fixed-term or temporary
personnel. Including work-related fatal accidents occurring outside the premises owned or rented by HEINEKEN, such as during outlet visits, business travel, participation in
courses or visits to conferences and fairs.
Scope:
– All consolidated entities.
– HEINEKEN Beverages is included in the
reporting of fatalities.
– Any fatal accidents involving permanent, fixed-term or temporary personnel in case the fatal accident occurred on the premises owned or rented by the HEINEKEN Company
(e.g. headquarters, the production or warehousing site (incl. employee housing when applicable) and HORECA (hotels, restaurants and cafés).
– Any fatal accidents when occurring with HEINEKEN Company assets (e.g. trucks), HEINEKEN materials (e.g. promotion materials), HEINEKEN Company products or HEINEKEN
Company services (e.g. events), including such fatal accidents involving contractor personnel when work was carried out as ordered by or on behalf of the HEINEKEN Company.
Excluded are fatal accidents of members of the public due to use of HEINEKEN products.
Fatal accidents to suppliers delivering raw materials, auxiliary materials and packaging materials are only in scope if a connection can be made to the HEINEKEN Company (e.g.
drunk driving).
–
– We are following a prudent approach in disclosure of fatalities. In case we do not have sufficient information on the causes or circumstances of a fatality (e.g. lack of witnesses)
–
and the conclusion of the local authorities is not clear, we consider the case as work-related and disclose it accordingly.
Permanent disabilities: Work related injury that diminishes a worker's ability to perform the duties or normal activities performed before the accident. Permanent disabilities are
reported for permanent, fixed-term or temporary HEINEKEN personnel, not for contractors.
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Reporting basis of non-financial indicators
Heineken
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Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Social – Positive impact in our communities
A social impact initiative in 100% of our markets in scope
Key performance indicator
Percentage of markets having a social impact initiative in place
Measurement/units
–
Percentage of operating companies in scope with a social impact initiative in place.
Baseline:
– N/A
Key definitions
–
–
–
–
Social impact initiative: An initiative which addresses a social issue within a community. An initiative qualifies when having a relevant focus area, a valid partner and a clear
agreement.
Community: A group of people living in the same place or having a particular characteristic in common (like circumstances, lifestyle, belief or interest). Examples are a
neighbourhood, families living near the brewery, a municipality, smallholder farmers, an under-represented group in society.
Relevant focus area: A social issue within a community which is linked to HEINEKEN’s business and Brew a Better World pillars, and which contributes to one (or more) of the UN
Global Goals. For example, creating access to water, reducing inequality, promoting inclusion and diversity, economic empowerment of underserved groups, etc.
Valid partner: A third-party organisation which has a well known and credible interest to bring people together and help tackle the problems raised by the community. Examples
are an NGO, foundation (including HEINEKEN’s own foundations), charity, governmental body, public agency, social enterprise, co-operative, etc. In case there is no suitable
third party to address the issue the operating company may take direct action itself.
– A clear agreement: Operating company and the relevant third party have agreed objectives, actions and (financial) contribution. Evidence of this can include a Memorandum of
Understanding, a contract signed by both parties, an exchange of letters or mails. The agreement should be valid for the reporting year. Only one initiative is required per country.
Social – Positive impact in our communities
Local sourcing of agricultural ingredients in Africa: 50% increase in volume by 2025
Sustainability
Review
Key performance indicator
% increase in volume of locally sourced agricultural ingredients
Measurement/units
– Growth in the total quantity of local raw materials compared to 2020, reported in a percentage of increase.
Other
Information
Key definitions
Locally sourced agricultural ingredients:
–
Estimated quantity (in metric tons) of agricultural ‘extract’ producing raw materials that are cultivated in Africa and that are used in the manufacture of beers, soft drinks, cider,
wine and spirits at our own production facilities in Africa;
Local means both domestic as well as from other countries on the African continent.
–
Scope:
– All consolidated entities.
–
–
Entities without production (like sales only
entities, export entities) are not in scope,
with the exception of HEINEKEN USA.
Consolidated entities with less than 50 FTE
are not included in the reporting scope.
– Derogations may be granted, for example
in case of external circumstances, such as
civil unrest and high volatility, which
hamper or delay the process.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
Baseline:
2020
–
Scope:
– All consolidated entities on the African
continent.
194
Reporting basis of non-financial indicators
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Environmental
Social
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Foundation
Disclosures
Reporting basis of non-financial indicators
Responsible – Always a choice
A zero alcohol option for two strategic brands in the majority of our markets (accounting for 90% of our business) by 2023
Key performance indicator
% of volume of operating companies with 0.0 line extensions for two strategic brands
Measurement/units
–
Percentage of full-year consolidated beer and cider volumes of operating companies which have two zero alcohol options in the latest quarter of the year compared to the full-
year consolidated volume for all operating companies in the scope for beer and cider.
Key definitions
–
–
–
–
Strategic brand: A brand in our portfolio where we invest in.
Zero alcohol option (line extension): An adult beverage (beer or cider) proposition which has beer associations either through brand or taste.
Export markets: Refer to countries outside the custom borders of countries where operating companies are residing.
Licensed markets: Refer to countries where our products are sold under a licence agreement by joint ventures, associates and third parties.
Responsible – Always a choice
Clear and transparent consumer information on 100% of our products in scope by 2023
Key performance indicator
Percentage compliant line extensions in scope
Measurement/units
–
Volume (in hl) of 100% compliant line extensions divided by total volume (in hl).
Baseline:
– N/A
Scope:
– All consolidated entities selling beer and
–
–
cider.
Export markets and licensed markets are
excluded from the scope.
Lagunitas is excluded from the scope, as it
is a single brand OpCo.
– HEINEKEN South Africa is excluded from
the scope.
Baseline:
– N/A
Key definitions
–
Line extension: A line extension is a different beverage from an established brand name. While the products have distinct differences the extension is very dependent initially on
customer recognition of the parent brand name. For example, Heineken® 0.0 is a line extension of Heineken® Original.
Compliant line extension: A line extension is compliant in case all stock-keeping-units (SKUs) reported under the line extension are compliant. A SKU is compliant in case all
required consumer information is included on the label of that SKU or online in particular cases due to local market circumstances.
Required consumer information on the labels includes information on alcohol by volume, ingredients, allergens, energy values, full nutritional values, responsible consumption
symbols, recycling symbols, QR code (not required for soft drinks) with a link to alcohol and health webpage and recycling symbols. If the full nutritional values do not fit on the
label, they may alternatively be put online, on the brand’s webpage. Energy values (Kcal) should always be presented on pack.
In case mandatory local laws prescribed more, less or different information to be included on consumer facing packaging these local requirements take precedence.
Timing of compliance: All SKUs leaving the breweries before the end of 2023.
–
–
–
–
Scope:
–
Volumes produced and/or sold by
consolidated operating companies. This
does not include sales in export markets
and licensed brands.
Line extensions with a prior year volume
below 50 khl are excluded from the
reported KPI.
–
– UBL is excluded from the reporting scope in
2023.
195
Reporting basis of non-financial indicators
Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Responsible – Address harmful use
100% of markets in scope have a partnership to address alcohol-related harm
Key performance indicator
Percentage of operating companies in scope with active partnership
Measurement/units
–
Percentage of operating companies in scope with active partnership compared to all operating companies in scope.
Baseline:
– N/A
Key definitions
– Active partnership: An initiative qualifies when having a relevant focus area, a valid partner and a clear agreement.
–
–
Relevant focus area – A relevant partnership should address one of the following alcohol-related harms: drink driving (DD), underage drinking, excessive consumption,
drinking while pregnant, or alcohol addiction.
Valid partner: A third-party organisation which has a well known and credible interest to bring people together and help tackle the problems raised by the community.
Examples are an NGO, foundation (including HEINEKEN’s own foundations), charity, governmental body, public agency, social enterprise, co-operative, etc. In case there
is no suitable third party to address the issue, the operating company may take direct action itself.
– A clear agreement: Operating company and the relevant third party have agreed objectives, actions and (financial) contribution. Evidence of this can include a
Memorandum of Understanding, a contract signed by both parties, an exchange of letters or mails. The agreement should be valid for the reporting year. Only one
initiative is required per country.
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Responsible – Make moderation cool
10% of Heineken® media spend invested every year in responsible consumption campaigns, reaching one billion consumers
Other
Information
Key performance indicator
1. 10% Heineken media spend invested every year in responsible consumption campaigns
2. Reaching one billion consumers
Measurement/units
1. Percentage of media spend on the Heineken® brand for responsible consumption campaigns compared to the total media spend on the Heineken® brand.
2. The number of consumers reached with Enjoy Heineken® Responsibly campaigns.
Key definitions
– Heineken® media spend: Expenses incurred for placing and broadcasting Heineken® brand dedicated campaigns.
–
Enjoy Heineken® Responsibly campaign: Media spend for placing and broadcasting Heineken® brand dedicated responsible consumption campaigns (e.g. supporting
‘Enjoy Heineken® Responsibly’ or ‘When You Drive, Never Drink’, or other Responsible Consumption initiatives).
Consumers reached: The number of unique consumers reached is calculated using the Sainsbury Formula, allowing us to estimate audience duplication so we can
ascertain the net reach across multiple markets and several digital media channels/platforms.
For reporting of the KPIs we rely on third-party information providers.
–
–
Scope:
– All consolidated entities.
–
Entities without production (like sales only
entities, export entities) are not in scope,
with the exception of HEINEKEN USA.
Consolidated entities with less than 50 FTE
are not included in the reporting scope.
– HEINEKEN South Africa is excluded due to
–
the integration within HEINEKEN
Beverages.
– Derogations may be granted, for example,
in case of religious grounds, local legislation
prohibiting alcohol companies from harm
reduction activities or markets where there
is a conflict or natural disaster.
In 2023 a derogation was granted for
Algeria.
–
Baseline:
– N/A
Scope:
– Markets where our consolidated operating
companies operate. Export markets and
markets where media advertising is not
fully allowed (‘(semi-)dark markets’) are
excluded.
196
Reporting basis of non-financial indicators
Introduction & Context
Brew a Better World 2030 Strategy
Environmental
Social
Responsible
Foundation
Disclosures
Reporting basis of non-financial indicators
Foundation: our ways of working – Responsible business conduct
An effective Speak Up framework
Key performance indicator
Speak Up reports per year
Measurement/units
– Number of Speak Up reports filed per year per 100 FTE.
Key definitions
–
Speak Up report: A report of a concern about a (suspected) violation(s) of the Code of Business Conduct and its underlying policies or the law, reported via one of the Speak Up
channels (such as the Speak Up website, phone line or email).
Baseline:
– N/A
Scope:
– All consolidated entities.
Foundation: our ways of working – Responsible business conduct
Zero tolerance to bribery and corruption
Key performance indicator
1. The % of employees that completed the Code of Business Conduct (CoBC) training
2. The % of employees out of the pre-assigned target audience that completed the Anti-Bribery & Corruption (ABAC) training
Measurement/units
–
–
Percentage of individual trainings completed compared to the total number of employees.
Percentage of total number of individual training completions compared to the total number of employees to whom the training is assigned.
Baseline:
– N/A
CoBC training: Annual dilemma-based e-learning covering the topics within the Code of Business Conduct.
Key definitions
–
– ABAC training: Dilemma-based e-learning aimed at recognising and resisting bribery and corruption.
–
Pre-assigned target audience: The training is mandatory for employees in certain functions, such as Management teams, Sales and Distribution, Procurement, Finance, Corporate
Affairs, Legal, Customer Service and Logistics and other employees who interact with public officials or manage relations with third parties who interact with public officials on our behalf.
Scope:
– All consolidated entities.
– HEINEKEN South Africa is excluded due to
the integration within HEINEKEN
Beverages.
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Appropriation of Results
Article 12, paragraph 7, of the Articles of Association stipulates:
“Of the profits, payment shall first be made, if possible, of a dividend of six % of the issued part of the authorised
share capital. The amount remaining shall be at the disposal of the General Meeting of Shareholders.”
Civil Code
Heineken N.V. is not a ‘structuurvennootschap’ within the meaning of Section 2:152-164 of the Dutch Civil Code.
Heineken Holding N.V., a company listed on Euronext Amsterdam, holds 50.005% of the issued shares of
Heineken N.V.
Authorised capital
The Company’s authorised capital amounts to €2,500 million.
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Independent Auditor’s Report
To the shareholders and the Supervisory Board of Heineken N.V.
Report on the audit of the financial statements for the year ended December 31,
2023 included in the annual report
Our opinion
We have audited the financial statements for the year ended December 31, 2023 of Heineken N.V., based in
Amsterdam, the Netherlands. The financial statements comprise the Consolidated Financial Statements and
the Company Financial Statements.
In our opinion:
– The accompanying Consolidated Financial Statements give a true and fair view of the financial position of
Heineken N.V. as at December 31, 2023, and of its result and its cash flows for the year ended December 31,
2023 in accordance with International Financial Reporting Standards as adopted by the European Union
(EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
– The accompanying Company Financial Statements give a true and fair view of the financial position of
Heineken N.V. as at December 31, 2023, and of its result for the year ended December 31, 2023 in accordance
with Part 9 of Book 2 of the Dutch Civil Code.
The Consolidated Financial Statements comprise:
– The Consolidated Statement of Financial Position as at 31 December 2023.
– The following statements for 2023: the Consolidated Income Statement, the Consolidated Statement of
Other Comprehensive Income, the Consolidated Statement of Cash Flows, and the Consolidated statement
of Changes in Equity.
– The Notes to the Consolidated Financial Statements comprising material accounting policy information and
other explanatory information.
The Company Financial Statements comprise:
– The Company Balance Sheet as at 31 December 2023.
– The Company Income Statement for the year ended December 31, 2023.
– The Notes to the Company Financial Statements comprising a summary of the accounting policies and other
explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our
responsibilities under those standards are further described in the 'Our responsibilities for the audit of the
financial statements' section of our report.
We are independent of Heineken N.V. in accordance with the EU Regulation on specific requirements regarding
statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision
act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of
Ethics for Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags-
en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a whole and in
forming our opinion thereon. The following information in support of our opinion was addressed in this context,
and we do not provide a separate opinion or conclusion on these matters.
Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at
€220 million (2022: €210 million). The materiality is based on 8.7% of profit before tax from continuing
operations using also net revenue as supporting benchmark and 6.5% of profit before tax from continuing
operations when normalized for impairments and CTA recycling of the Russia disposal. We have also taken into
account misstatements and/or possible misstatements that in our opinion are material for the users of the
financial statements for qualitative reasons. The increase compared to 2022 is predominantly the result of the
increase in operating income before the effects of the impairments recorded during the year and the loss from
the sale of the Russia disposal group.
Audits of group entities (components) were performed using materiality levels determined by the judgement of
the group audit team, having regard to the materiality of the consolidated financial statements. Component
materiality for our two largest components was €77 million (2022: €65 million), and our materiality for other
components did not exceed €69 million (2022: €45 million).
We agreed with the Supervisory Board that misstatements in excess of €11 million, which are identified during
the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on
qualitative grounds.
Scope of the group audit
Heineken N.V. is at the head of a group of entities. The financial information of this group is included in the
Consolidated Financial Statements of Heineken N.V.
Because we are ultimately responsible for the opinion, we are responsible for directing, supervising, and
performing the group audit. In this respect we have determined the nature and extent of the audit procedures to
be carried out on the entities. Our group audit is mainly focused on financially large entities in terms of size and
financial interest or where significant risks or complex activities were present, leading to full audits performed for
27 (2022: 27 components) components, including 2 non-consolidated components.
We have performed audit procedures ourselves at Heineken N.V., corporate entities, and certain operations in
the Netherlands. Furthermore, we performed audit procedures at group level on areas such as consolidation,
disclosures, impairment testing for intangible assets (including goodwill) and non-current assets held for sale,
joint ventures, financial instruments, acquisitions, and divestments. Specialists were involved amongst others in
the areas of treasury, information technology, forensics, tax, accounting, pensions, and valuations. For the
selected component audit teams, the group audit team provided detailed written instructions, which, in addition
to communicating our requirements of component audit teams, also detailed significant audit areas and
information obtained centrally relevant to the audit of individual components, including awareness for risks
related to management override of controls.
Furthermore, we developed a plan for overseeing each component audit team based on its relative significance
and specific risk characteristics.
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Our oversight procedures included (virtual) meetings with the component auditor and component management
and physical or remote working paper reviews for The Netherlands, United Kingdom, France, Spain, Italy, Austria,
Poland, Brazil, Mexico, USA, Nigeria, Vietnam, South Africa (Heineken Beverages), India, Greece, Ethiopia, Burundi,
DRC, Cambodia, Indonesia, UBL and Malaysia. We also reviewed component audit team deliverables for the
countries listed above and the additional countries in scope to gain a sufficient understanding of the work
performed based on our instructions. The nature, timing and extent of our oversight procedures varied based on
both quantitative and qualitative considerations. For smaller components, we have performed review procedures
or specific audit procedures.
By performing the procedures mentioned above at group entities, together with additional procedures at group
level, we have been able to obtain sufficient and appropriate audit evidence about the group's financial
information to provide an opinion on the consolidated financial statements.
Revenues
Profit before income tax
Full scope audit coverage
Full scope audit coverage
Other coverage
Other coverage
Sustainability
Review
Assets
Other
Information
Full scope audit coverage
Other coverage
Audit approach fraud risks
In accordance with Dutch Standards on Auditing, we are responsible for obtaining reasonable assurance that the
financial statements taken as a whole are free from material misstatements, whether due to fraud or error.
Inherent to our responsibilities for the audit of the financial statements, there is an unavoidable risk that material
misstatements go undetected, even though the audit is planned and performed in accordance with Dutch law.
The risk of undetected material misstatements due to fraud is even higher, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Also, we are not responsible for the
prevention and detection of fraud and non-compliance with all laws and regulations. Our audit procedures differ
from a forensic or legal investigation, which often has a more in-depth character.
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During
our audit we obtained an understanding of the entity and its environment and the components of the system of
internal control, including the risk assessment process and management's process for responding to the risks of
fraud and monitoring the system of internal control and how the Supervisory Board exercises oversight, as well as
the outcomes. We refer to section Risk management of the Executive Board report for the Executive Board’s
(fraud) risk assessment and section To the Shareholders (paragraph Audit Committee) of the Supervisory Board
report in which the Supervisory Board reflects on this fraud risk assessment. We note that management regularly
updates its risk assessment including fraud and updates its risk and control framework.
We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk
assessment, as well as the Code of Business Conduct, Company Rules, Speak Up policy, third party screening and
incident registrations. We evaluated the design and the implementation and, where considered appropriate,
tested the operating effectiveness of internal controls designed to mitigate fraud risks. Further, for certain selected
speak up cases, we evaluated management’s response and remedial actions and measures.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting
fraud, misappropriation of assets and bribery and corruption in close co-operation with our forensic specialists. We
evaluated whether these factors indicate that a risk of material misstatement due fraud is present.
Following these procedures, and the presumed risks under the prevailing audit standards, we considered fraud risks
related to management override of controls. Our audit procedures to respond to these fraud risks include,
amongst others, an evaluation of relevant internal controls and supplementary substantive audit procedures,
including detailed testing of journal entries and post-closing adjustments based on supporting documentation.
Data analytics, including selection of journal entries based on risk-based characteristics, form part of our audit
approach to address the identified fraud risks.
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Additionally, we performed further procedures including, among others, the following:
– We incorporated elements of unpredictability in our audit. We also considered the outcome of our other
audit procedures and evaluated whether any findings were indicative of fraud or non-compliance.
– We considered available information and made enquiries of relevant key management personnel, the Executive
Board and the Supervisory Board.
– We tested the appropriateness of journal entries recorded in the general ledger and other adjustments made in
the preparation of the financial statements.
– We evaluated whether the selection and application of accounting policies by the group, particularly those
related to subjective measurements and complex transactions, may be indicative of fraudulent financial
reporting.
– We evaluated whether the judgments and decisions made by the Executive Board in making the accounting
estimates included in the financial statements indicate a possible bias that may represent a risk of material
misstatement due to fraud. The Executive Board's insights, estimates and assumptions that might have a
major impact on the financial statements are disclosed in Note 3 of the financial statements.
– We performed a retrospective review of management judgments and assumptions related to significant
accounting estimates reflected in prior year financial statements.
Certain management estimates and judgements are considered most significant to our audit. Reference is
made to the section 'Our key audit matters' for further details on those estimates and judgments.
For significant transactions such as various business acquisitions or disposals during the year, we evaluated
whether the business rationale of the transactions suggest that they may have been entered into to engage
in fraudulent financial reporting or to conceal misappropriation of assets.
We obtained sufficient appropriate audit evidence regarding provisions of those laws and regulations generally
recognized to have a direct effect on the financial statements.
Apart from these, Heineken N.V is subject to other laws and regulations where the consequences of non-
compliance could have a material effect on amounts and/or disclosures in the financial statements, for instance,
through imposing fines or litigation.
Given the nature and complexity of Heineken N.V.’s business, we considered the risk of non-compliance in the
areas of competition, data protection, human rights, tax and other applicable laws and regulations. In addition,
we considered major laws and regulations applicable to listed companies.
Our procedures are more limited with respect to laws and regulations that do not have a direct effect on the
determination of the amounts and disclosures in the financial statements. Compliance with these laws and
regulations may be fundamental to the operating aspects of the business, to Heineken N.V ’s ability to continue
its business, or to avoid material penalties (e.g., compliance with the terms of operating licenses and permits or
compliance with environmental regulations, anti-competition laws, sanctions and trade laws) and therefore non-
compliance with such laws and regulations may have a material effect on the financial statements. Our
responsibility is limited to undertaking specified audit procedures to help identify non-compliance with those
laws and regulations that may have a material effect on the financial statements.
Our procedures are limited to (i) inquiry of key management personnel, the Executive Board, the Supervisory
Board and others within Heineken N.V.’s as to whether Heineken N.V is in compliance with such laws and
regulations and (ii) inspecting correspondence, if any, with the relevant licensing or regulatory authorities to
help identify non-compliance with those laws and regulations that may have a material effect on the
financial statements.
This did not lead to indications for fraud potentially resulting in material misstatements.
We remained alert to indications of (suspected) non-compliance throughout the audit.
Audit approach compliance with laws and regulations
We assessed the laws and regulations relevant to the entity through discussion with, amongst others, the
Executive Board, Group Legal Counsel, and those charged with governance, reading minutes of board meetings
and reports in internal audit. We also involved our forensic specialists in this assessment.
As a result of our risk assessment procedures, and while realizing that the effects from non-compliance could
considerably vary, we considered the following laws and regulations: adherence to (corporate) tax laws and
financial reporting regulations, the requirements under the International Financial Reporting Standards as
adopted by the European Union (EU-IFRS) and Part 9 of Book 2 of the Dutch Civil Code with a direct effect on
the financial statements as an integrated part of our audit procedures, to the extent material for the related
financial statements.
Finally, we obtained written representations that all known instances of (suspected) fraud or non-compliance
with laws and regulations have been disclosed to us.
Audit approach going concern
Our responsibilities, as well as the responsibilities of the Executive Board and the Supervisory Board, related to
going concern under the prevailing standards are outlined in the “Description of responsibilities regarding the
financial statements” section below. In fulfilling our responsibilities, we performed procedures including
evaluating management’s assessment of the Company’s ability to continue as a going concern and considering
the impact of financial, operational, and other conditions. Based on these procedures, we did not identify any
reportable findings related to the entity’s ability to continue as a going concern.
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Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key
audit matters are not a comprehensive reflection of all matters discussed.
The below identified key audit matters were addressed in the context of our audit of the financial statements as
a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Accounting for the acquisition of Distell and Namibia Breweries — Refer to Note 10.1 to the
financial statements
Key audit
matter
On 14 April 2023, HEINEKEN obtained a controlling stake of 59.4% in Namibia Breweries Limited
(NBL) and on 26 April 2023, HEINEKEN fully acquired the remaining operations of Distell Group
Holdings Limited (Distell) post the carve-out of their whiskey and gin activities.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
How the scope
of our audit
responded to
the key audit
matter
Accounting for these acquisitions in accordance with IFRS 3 requires management to apply
estimates to determine the fair value of the identifiable assets and liabilities. The purchase price
allocation resulted in the recognition of goodwill (€656 million), intangible assets other than
goodwill (€775 million), a non-controlling interest (€557 million), and a gain on previously held
equity interest (€14 million).
Further details on the accounting and disclosures under IFRS 3 Business Combinations are
included in note 10.1 to the financial statements.
Given the significance of the acquisition transaction, the complexity of accounting for business
combinations, and the significant management assumptions in the valuation of the (intangible)
assets identified, performing procedures to evaluate the purchase price allocation required higher
degree of auditor judgement and a need to involve valuation, real estate and tax specialists.
Our audit procedures to address management's judgements related to the accounting for the
acquisition of Distell and Namibia Breweries included the following, amongst others:
– We have gained an understanding of the main processes and procedures in place at the
company for acquisitions that are relevant for our audit.
– We assessed and evaluated the purchase consideration of Distell (€1.2 billion) and NBL
(€358 million) and evaluated management’s accounting assessment for the valuation of
the previously held equity interest in NBL, the recognition of related gains (€14 million)
and the accounting policy choice of applying the partial goodwill method.
– We involved our valuation, real estate and tax specialists for the evaluation and challenge
of management’s position regarding the methodology and valuation of brands, property,
plant & equipment, and tax positions.
– We challenged the business assumptions used in the forecast period underlying the
valuation of the (in)tangible fixed assets (revenue, EBITDA, cash flow projections, royalty,
synergies) including the useful lives of the (in)tangible assets, by management.
– We assessed the integration of the acquired companies with HEINEKEN South Africa into
the new established company HEINEKEN Beverages and challenged management on the
CGU identification. For the outcome of impairment testing related to the HEINEKEN
Beverages CGU we refer to the KAM Impairment of intangible assets (including goodwill),
property, plant, and equipment, investments in associates and assets or disposal groups
held for sale.
Observation
Applying the aforementioned materiality, we did not identify any reportable findings in
management's accounting for the acquisition of Distell and Namibia Breweries and the
determination and recognition of the fair value of assets and liabilities and the disclosures in
Note 10.1.
Impairment of intangible assets (including goodwill), property, plant and equipment, investments
in associates, and assets or disposal groups held for sale — Refer to Notes 8.1, 8.2, 10.2, 10.3 and
13.5 to the financial statements
Key audit
matter
Intangible assets (including goodwill), property, plant and equipment and investments in
associates and joint ventures amounted to €40,683 million on 31 December 2023 and
represented 93 percent of the consolidated total assets.
For purposes of impairment testing, goodwill is allocated and monitored on a (group of)
Cash Generating Unit ('CGU') level. Other intangibles and property, plant, and equipment,
are grouped to CGUs. For goodwill, management is required to assess the recoverable
amount of the respective CGUs (or groups of CGUs). Recoverable amounts of other non-
current assets are assessed upon the existence of a triggering event. Investments in
associates are accounted for using the equity method of accounting, meaning they are
initially recognized at cost. The consolidated financial statements include HEINEKEN’s share
of the net profit or loss of the associates and joint ventures whereby the result is determined
using the accounting policies of HEINEKEN. Triggers for the impairment of investments in
associates, are amongst others, a prolonged and significant decline in the fair value of the
equity instrument. For assets or disposal groups held for sale, an impairment loss is
recognised should the carrying amount exceed the fair value less cost to sell.
In view of the inherent uncertainties, including those related to the current macro-economic
environment, the projection of sales volumes, revenues, margins, and discount rates in
management's impairment tests, involved an increased level of judgement for certain CGUs.
As a result of impairment testing for the current year, management concluded on
impairment losses of €783 million, of which €491 million is related to the impairment loss
recorded for the newly established HEINEKEN Beverages CGU, and €10 million for Russia
(excluding €209 million for CTA recycling). A reversal of €103 million was recorded during
the year for the impairment of €113 million recorded at HY1 2023 for Russia that was
classified as a disposal group held for sale. Further details on the accounting and disclosures
under IAS 36 Impairment of Assets are included in notes 8.1 and 8.2 to the financial
statements. Further details on the accounting and disclosure under IFRS 5 Non-current
Assets Held for Sale are included in note 10.2 to the financial statements. Further details on
the accounting and disclosure under IAS 28 Investments in Associates and Joint Ventures
are included in note 10.3 to the financial statements.
Given the high level of judgement made by management to estimate the recoverable
amounts used in management’s impairment tests for intangible assets (including goodwill)
and property, plant and equipment, procedures to evaluate the reasonableness of projected
sales volumes, revenue and discount rates required a high degree of auditor judgement and
an increased extent of effort, including the need to involve our valuation specialists.
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Our audit procedures related to the projection of sales volumes, revenue, margins, and discount
rates used by management included the following, amongst others:
– We obtained an understanding of management's process over the impairment trigger
tests and the resulting impairment tests.
– We evaluated management's ability to accurately forecast by comparing actual results to
management's historical forecasts.
– We evaluated sensitivities in management's projections, including those potentially related
to climate risk factors, which could cause a substantial change to the impairments
recorded, and or cause headroom to change in an impairment.
– We evaluated projected cash flows by:
–
–
Comparing the projections to historical forecasts, historical growth rates,
including assessing the effects of the current macro-economic and geopolitical
climate, and information included in HEINEKEN's internal communications to the
management and the Executive Board.
Challenging management’s ability to price adjust for expected inflation rates and
comparing projected sales volumes, revenue, and margins to, for example,
external economic outlook data, analyst reports and external market data on the
beer market.
–
For HEINEKEN Beverages we challenged the key business assumptions used in the
impairment model which are related to volume growth, which is driven by sourcing costs
and returnable bottle introductions.
– With the assistance of our valuation specialists, we evaluated the reasonableness of
discount rates, including testing the source information underlying the determination of
the discount rates, testing the mathematical accuracy of the calculation, and developing a
range of independent estimates and comparing those to the discount rates selected by
management.
– We assessed whether a decline in available quoted market price investments in associates
is either prolonged or significant and any impairment loss should be recognized.
Applying the aforementioned materiality, we did not identify any reportable findings in
management's assessment of the recoverability of intangible assets (including goodwill) and
property, plant and equipment, investments in associates and assets or disposal groups held
for sale, the impairments recorded and the disclosures in Notes 8.1, 8.2, 10.2, 10.3 and 13.5.
Heineken
N.V.
Annual
Report
2023
How the scope
of our audit
responded to
the key audit
matter
Introduction
Report
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Report
of the
Supervisory
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Financial
Statements
Observation
Sustainability
Review
Other
Information
Management judgement related to the provisions for uncertain tax positions and the
recoverability of deferred tax assets — Refer to Notes 9.2 and 12 to the financial statements
Key audit
matter
How the scope
of our audit
responded to
the key audit
matter
HEINEKEN operates across several tax jurisdictions and is subject to periodic challenges by
local tax authorities during the normal course of business. In those cases where the amount of
tax payable is uncertain, management establishes provisions based on its judgement of the
probable amount of the related tax liability. Deferred tax assets are only recognized to the
extent that it is probable that future taxable income will be available, against which unused tax
losses can be utilized. This assessment is performed annually and based on budgets and
business plans for the coming years, including planned commercial initiatives and the impact
of macro-economic uncertainties. HEINEKEN reported provisions for uncertain tax positions
and deferred tax assets for an amount of €397 million and €1,292 million, respectively, as of
31 December 2023. Deferred tax assets significantly increased to €775 million, this includes
newly recorded amounts of €751 million following a corporate restructuring, the recent win of
the lawsuit regarding goodwill deduction and higher forecasted taxable profits.
The accounting for uncertain tax positions and deferred tax assets, as detailed in Notes 9.2
and 12 to the financial statements, inherently requires management to apply judgement in
quantifying appropriate provisions (including assessing probable outcomes) for uncertain tax
positions, and in determining the recoverability of deferred tax assets.
Given the significant judgement applied by management, performing procedures to evaluate
the reasonableness of probable outcomes for uncertain tax positions and the recoverability of
deferred tax assets based on budgets and business plans, required a higher degree of auditor
judgement, an increased extent of effort and a need to involve our in-country tax specialists.
Our audit procedures to address management's judgements related to the provisions for
uncertain tax positions and recoverability of deferred tax assets included the following,
amongst others:
– We obtained an understanding of management’s tax process related to the assessment
of uncertain tax positions and the recoverability of deferred tax assets.
– We involved our in-country tax specialists to assess tax risks, tax carry forward facilities,
legislative developments, and the status of ongoing local tax authority audits.
– We challenged, with the help of our tax specialists, management’s judgement applied
in quantifying provisions for tax uncertainties and assessing probable outcomes
based on correspondence with tax authorities, case law and opinions from
management’s tax experts.
– We evaluated management’s ability to forecast taxable income accurately by comparing
prior forecasts on future taxable income with the actual income for the year.
– We evaluated management’s recoverability assessment, including the likelihood of
generating sufficient future taxable income based on budgets, business plans, and tax
losses carry forward facilities in the various tax jurisdictions (including expiry dates).
– We challenged, with the support of our tax specialist and local component team,
management’s judgement applied in the timing of deferred tax recognition, the
underlying profit forecast, and the potential effects of Pillar Two.
Observation
Applying the aforementioned materiality, we have audited the provisions for uncertain tax
positions and the valuation of deferred tax assets as well as the related disclosure in Notes 9.2
and 12 and have no reportable findings.
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Information
Independent Auditor’s Report
Report on the other information included in the annual report
The annual report contains other information, in addition to the financial statements and our auditor's
report thereon.
The other information consists of:
– Report of the Executive Board.
– Report of the Supervisory Board.
– Sustainability Review.
– Other Information as required by Part 9 of Book 2 of the Dutch Civil Code.
– Other Information included in the Annual Report.
Based on the following procedures performed, we conclude that the other information:
– Is consistent with the financial statements and does not contain material misstatements.
– Contains all the information regarding the management report and the other information as required by Part 9
of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of
the financial statements or otherwise, we have considered whether the other information contains material
misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code
and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of
those performed in our audit of the financial statements.
The Executive Board is responsible for the preparation of the other information, including the report of the
Executive Board in accordance with Part 9 of Book 2 of the Dutch Civil Code, and the other information as
required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the Supervisory Board as auditor of Heineken N.V. on April 24, 2014, for the audit of the
year 2015 and have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on
specific requirements regarding statutory audit of public-interest entities.
European Single Electronic reporting Format (ESEF)
Heineken N.V. has prepared its annual report in ESEF. The requirements for this are set out in the Commission
Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a
single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion, the annual report, prepared in XHTML format, including the (partly) marked-up consolidated
financial statements, as included in the reporting package by Heineken N.V. complies in all material respects
with the RTS on ESEF.
The Executive Board is responsible for preparing the annual report including the financial statements in
accordance with the RTS on ESEF, whereby the Executive Board combines the various components into one
single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting
package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N 'Assurance-
opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal
verantwoordingsdocument' (assurance engagements relating to compliance with criteria for digital reporting).
Our examination included amongst others:
– Obtaining an understanding of the Company's financial reporting process, including the preparation of the
reporting package.
– Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on
ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for
our opinion, including:
– obtaining the reporting package and performing validations to determine whether the reporting package
containing the Inline XBRL instance, and the XBRL extension taxonomy files has been prepared in accordance
with the technical specifications as included in the RTS on ESEF;
– examining the information related to the consolidated financial statements in the reporting package to
determine whether all required mark-ups have been applied and whether these are in accordance with the
RTS on ESEF.
Description of responsibilities regarding the financial statements
Responsibilities of the Executive Board and the Supervisory Board for the financial statements
The Executive Board is responsible for the preparation and fair presentation of the financial statements in
accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is
responsible for such internal control as the Board determines is necessary to enable the preparation of the
financial statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the Executive Board is responsible for assessing the
Company's ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the
Executive Board should prepare the financial statements using the going concern basis of accounting unless the
Executive Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.
The Executive Board should disclose events and circumstances that may cast significant doubt on the
Company's ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the Company's financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and
appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect
all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of
the effect of identified misstatements on our opinion.
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We have exercised professional judgement and have maintained professional scepticism throughout the audit,
in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our
audit included among others:
– Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or
error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
– Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.
– Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Executive Board.
Introduction
– Concluding on the appropriateness of the Executive Board's use of the going concern basis of accounting, and
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
– Evaluating the overall presentation, structure, and content of the financial statements, including the disclosures.
– Evaluating whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising, and
performing the group audit. In this respect we have determined the nature and extent of the audit procedures to
be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations.
On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of
financial information or specific items.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant findings in internal control that we identified
during our audit. In this respect we also submit an additional report to the audit committee in accordance with
Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The
information included in this additional report is consistent with our audit opinion in this auditor's report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters
that were of most significance in the audit of the financial statements. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, not communicating the matter is in the public interest.
Amsterdam, February 13, 2024
Deloitte Accountants B.V.
M.J. van der Vegte
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Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Assurance Report of the Independent Auditor (of non-financial indicators)
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR ON
HEINEKEN’S SELECTED KEY PERFORMANCE INDICATORS 2023
The scope of our review was to provide limited assurance on the following KPIs in the section
“Our Brew a Better World 2030 goals and progress”, on the pages 144 to 146 namely:
To the Shareholders and the Supervisory Board of Heineken N.V
Our conclusion
We have examined selected key performance indicators 2023 (“KPIs”), as described below, and presented in
the sustainability report the sustainability information as stated on page 132 to 196 in the accompanying
Annual Report for the year 2023 ("the sustainability data") of Heineken N.V., Amsterdam.
Based on our procedures performed nothing has come to our attention that causes us to believe that the
KPIs are not prepared, in all material respects, in accordance with the reporting criteria as included in the
section ‘Reporting Criteria’ of our report.
Focus areas
Key performance indicator as disclosed in the column “Our 2023 results”
Reach net zero carbon
1. Reduction of tCO2e % vs. baseline 2018 in scope 1 & 2 emissions
2. % energy from renewable sources (as disclosed on page 149)
3. Reduction of tCO2 % versus 2018 scope 1, 2 and 3 emissions
4. % sustainable sourced ingredients (barley and hops)
Maximise circularity
5. # of sites that are landfill free
Towards healthy
watersheds
6. % of water-stressed sites are fully water balanced
7. # of sites that have wastewater treatment plants
Embrace inclusion and
diversity
8. Average water usage in water-stressed areas and globally
9. % women in senior management
10. # of regions have at least 65% regional nationals in leadership team
11. % of management trained in inclusive leadership
A fair & safe workplace
12. % fair wage assessments across our operating companies
13. % of direct employees earn at least a fair wage
14. % of operating companies went through equal pay assessments
15. % operating companies have action plans in place
16. Fatal accidents and permanent disabilities (as disclosed on page 163)
17. % of people managers completed the Life Saving Commitments training
18. % of operating companies have been assessed to ensure fair living and working
standards for third-party employees and brand promoters
Positive impact in our
communities
19. % increase in volume from locally sourced agricultural ingredients
20. % of our markets in scope had a social impact initiative
Always a choice
21. Markets with a zero alcohol option for at least two strategic brands representing
90% of our beer and cider volumes
22. % of our products in scope had fully compliant labels
Make moderation cool
23. Our operating companies invested over 10% of Heineken media spend in
dedicated responsible consumption campaigns
24. # unique consumers reached worldwide
Address harmful use
25. % of markets in scope had a partnership to address alcohol-related harm
The information in scope of this assurance report needs to be read and understood in conjunction with the
Reporting basis of non-financial indicators as included in the Annual Report 2023 on page 182 to 196.
206
Heineken
N.V.
Annual
Report
2023
Assurance Report of the Independent Auditor (of non-financial indicators)
Basis for our conclusion
We have performed our examination in accordance with Dutch law, including Dutch Standard 3000A
‘Assurance-opdrachten anders dan opdrachten tot controle of beoordeling van historische financiële
informatie (attest-opdrachten)’ (Assurance engagements other than audits or reviews of historical financial
information (attestation engagements)). This engagement is aimed to obtain limited assurance. Our
responsibilities under this standard are further described in the ‘Our responsibilities for the examination of
the KPIs’ section of our report.
Our responsibilities for the examination of the KPIs
Our responsibility is to plan and perform the examination in a manner that allows us to obtain sufficient and
appropriate evidence to provide a basis for our conclusion.
Procedures performed to obtain a limited level of assurance are aimed to determine the plausibility of
information and vary in nature and timing from, and are less in extent, than for a reasonable assurance
engagement. The level of assurance obtained in review is therefore substantially less than the assurance
obtained in an audit.
We are independent of Heineken N.V. in accordance with the ‘Verordening inzake de onafhankelijkheid van
accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with
respect to independence) and other relevant independence regulations in The Netherlands. This includes that we
do not perform any activities that could result in a conflict of interest with our independent assurance
engagement. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels
accountants’ (VGBA, Dutch Code of Ethics).
We apply the ‘Nadere voorschriften kwaliteitssystemen’ (NVKS, Regulations for quality management systems)
and accordingly maintain a comprehensive system of quality control including documented policies and
procedures regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
We have exercised professional judgement and have maintained professional scepticism throughout the review,
in accordance with the Dutch Standard 3000A, ethical requirements and independence requirements.
Introduction
We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for
our conclusion.
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Reporting criteria
The reporting criteria applied for the preparation of the KPIs are disclosed on page 182 to 196 of the annual
report in the section ‘Reporting basis of non-financial indicators’.
The comparability of KPIs between entities and over time may be affected by the absence of an uniform
practice on which to draw, to evaluate and measure this information. This allows for the application of different,
but acceptable, measurement techniques.
Consequently, the KPIs need to be read and understood together with the reporting criteria used.
Limitations to the scope of our assurance engagement
In the sustainability data, the calculations to determine KPIs are partly based on assumptions and sources
from third parties. The assumptions and sources used are disclosed on page 182 to 196 of the annual report in
the section ‘Reporting basis of non-financial indicators’. We have reviewed that these assumptions and external
sources are appropriate, but we have not performed procedures on the content of these assumptions and
external sources. Also we note that in accordance with the reporting criteria we evaluate whether compliance
of a KPI is substantiated by either a third-party verification or other information provided by third parties for
example evidenced by a certificate or confirmation (together: “third party info”). We have not performed any
procedures on the objectivity or competence of the third party or its processes underpinning this third party info.
The references to external sources or websites in the sustainability information are not part of the sustainability
data as included in the scope of our assurance engagement. We therefore do not provide assurance on
this information.
Our conclusion is not modified in respect to these matters.
Responsibilities of the Executive Board and the Supervisory Board for the KPIs
The Executive Board is responsible for the preparation of the KPIs in accordance with the reporting criteria as
included in the ‘Reporting Criteria’ section, including the identification of the intended users and the definition
of material matters. The Executive Board is also responsible for selecting and applying the reporting criteria and
for determining that these reporting criteria are suitable for the legitimate information needs of stakeholders,
taking into account applicable law and regulations related to reporting. The choices made by the Executive
Board regarding the scope of the KPIs and the reporting policy are summarised on page 182 - 196 of the
annual report.
Furthermore, the Executive Board is responsible for such internal control as it determines is necessary to enable
the preparation of the KPIs that are free from material misstatement, whether due to fraud or errors.
Our review included among others:
• Performing an analysis of the external environment and obtaining an understanding of relevant social themes
and issues, and the characteristics of the company including a media search to identify relevant risks and issues
within the scope of the assurance engagement during the reporting period.
• Evaluating the appropriateness of the reporting criteria used, their consistent application and related disclosures
for the KPIs. This includes the evaluation of the results of the stakeholders’ dialogue and the reasonableness of
estimates made by the Executive board.
• Obtaining through inquiries a general understanding of control environment, processes and information systems
relevant to the preparation of the KPIs, but not to obtain assurance evidence about their implementation or their
operating effectiveness.
• Obtaining an understanding of the procedures performed by the internal audit department and the external
subject matter experts of Heineken.
• Identifying areas of KPIs with a higher risk of misleading or unbalanced information or material misstatements,
whether due to errors of fraud. Designing and performing further assurance procedures aimed at determining
the plausibility of the sustainability data responsive to this risk analysis. These procedures consisted amongst
others of:
– interviewing management responsible for the sustainability strategy, policy and results;
– interviewing relevant staff responsible for providing the information for, carrying out internal control procedures
on, and consolidating the data for the KPIs;
– for certain KPIs involving component auditors to enhance our understanding for 5 key locations, validating source
data and evaluating the design (and implementation) of internal controls and validation procedures;
– obtaining assurance information that the sustainability data reconciles with underlying records of the company;
– reviewing, on a limited test basis, relevant internal and external documentation;
– performing an analytical review of the data and trends.
• Evaluating the consistency of the KPIs with the information in the annual report which is not included in the scope
of our review.
• Evaluating the presentation, structure and content of the sustainability data.
• Considering whether the sustainability information as a whole, including the disclosures, reflects the purpose of
the reporting criteria used.
We communicate with the supervisory board regarding, among other matters, the planned scope and timing of
the review and significant findings that we identify during our review.
Amsterdam, February 13, 2024
Deloitte Accountants B.V.
The Supervisory Board is responsible for overseeing the reporting process of Heineken N.V.
M.J. van der Vegte
207
Shareholder Information
Investor relations
Heineken
N.V.
Annual
Report
2023
HEINEKEN is committed to maintaining an open and constructive dialogue with shareholders and bondholders.
HEINEKEN aims to keep them updated by informing clearly, accurately and in a timely manner about
HEINEKEN’s strategy, performance and other matters and developments that could be relevant to investors’
decisions.
Share distribution by geography
Heineken N.V. shares*
Based on 277.4 million shares in free float
(excluding the holding of Heineken Holding N.V.
and shares held by Treasury)
Heineken N.V. share price
In €, Euronext Amsterdam
Ownership structure
Heading the HEINEKEN Group and pursuant to its Articles of Association, the objective of Heineken Holding
N.V., is to manage or supervise the management of the HEINEKEN Group and to provide services for Heineken
N.V. The role Heineken Holding N.V. has performed for the HEINEKEN Group since 1952 has been to safeguard
its continuity, independence and stability and create conditions for controlled and steady growth of the
activities of the HEINEKEN Group. The stability provided by this structure has enabled the HEINEKEN Group to
remain independent and to rise to its present position as the brewer with the broadest international presence
and one of the world’s largest brewing groups.
Every Heineken N.V. share held by Heineken Holding N.V. is matched by one share issued at the level of
Heineken Holding N.V. These shares are traded at a lower price due to technical factors that are market-specific.
Heineken Holding N.V. holds 50.005% of the Heineken N.V. issued shares. L’Arche Green N.V. holds 53.171% of
the issued share capital of Heineken Holding N.V.. The Heineken family holds 88.98% of L’Arche Green N.V. The
remaining 11.02% of L’Arche Green N.V. is held by the Hoyer family. Mrs. de Carvalho-Heineken also owns a
direct 0.03% stake in Heineken Holding N.V.
Heineken N.V. shares and options
Heineken N.V. shares are traded on Euronext Amsterdam, where the Company is included in the main AEX
Index. The shares are listed under ISIN code NL0000009165. Prices for the shares may be accessed on
Bloomberg under the symbol HEIA.NA and on the Reuters Equities 2000 Service under HEIA. AS. Options on
Heineken N.V. shares are listed on Euronext Amsterdam.
In 2023, the average daily trading volume of Heineken N.V. shares was 647,245 shares.
Market capitalisation Heineken N.V.
Shares outstanding as at 31 December 2023: 565.426.968 shares of €1.60 nominal value (excluding own
shares held by the Company)
At a year-end price of €91.94 on 29 December 2023, the market capitalisation of Heineken N.V. on the
balance sheet date was €52.0 billion.
4.7%
1.9%
11%
1%
16.4%
41.6%
23.4%
Dividend per share
Americas
UK/Ireland
Rest of Europe
Rest of World
Retail
Netherlands
Unidentified
41.6
23.4
16.4
11
1.9
1
4.7
* Source Cmi2i based on available information December 2023.
Year-end price
Highest closing price
Lowest closing price
€91.94
€105.40
€82.18
29 December 2023
Heineken Holding N.V. shares
4 May 2023
3 October 2023
The shares of Heineken Holding N.V. are traded on Euronext Amsterdam. The shares are listed under ISIN code
NL0000008977. Prices for the shares may be accessed on Bloomberg under the symbol HEIO.NA and on the
Reuters Equities 2000 Service under HEIO.AS.
In 2023, the average daily trading volume of Heineken Holding N.V. shares was 138,852 shares.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
208
Shareholder Information
Heineken
N.V.
Annual
Report
2023
Market capitalisation Heineken Holding N.V.
Shares outstanding as at 31 December 2023: 282.873.387 shares of €1.60 nominal value (excluding Heineken
Holding N.V. shares held by Heineken N.V.).
At a year-end price of €76.60 on 29 December 2023, the market capitalisation of Heineken N.V. on the balance
sheet date was €21.7 billion.
American Depositary Receipts (ADRs)
HEINEKEN’s shares are trading Over-the-Counter (OTC) in the US as American Depositary Receipts (ADRs).
There are two separate HEINEKEN ADR programmes representing ownership respectively in: 1) Heineken N.V.
and 2) Heineken Holding N.V. For both programmes, the ratio between HEINEKEN ADRs and the ordinary
Dutch (€ denominated) shares is 2:1, i.e. two ADRs represent one HEINEKEN ordinary share. Deutsche Bank
Trust Company Americas acts as depositary bank for HEINEKEN’s ADR programmes.
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Other
Information
Year-end price
Highest closing price
Lowest closing price
€76.60
€87.95
€70.00
29 December 2023
19 April 2023
20 October 2023
Share distribution by geography
Heineken Holding N.V. shares*
Heineken N.V. share price
In €, Euronext Amsterdam
Based on 129.7 million shares in free float (excluding
Heineken Holding shares held by L’Arche Green N.V.
and Heineken N.V. )
Heineken N.V.
Ticker: HEINY
ISIN: US4230123014
CUSIP: 423012301
Heineken Holding N.V.
Ticker: HKHHY
ISIN: US4230081014
CUSIP: 423008101
Structure: Sponsored Level I ADR
Structure: Sponsored Level I ADR
Exchange: OTCQX
Ratio (DR:ORD): 2:1
Exchange: OTCQX
Ratio (DR:ORD): 2:1
11.8%
3.5%
2.8%
0.4%
9.3%
54.2%
18%
Dividend per share
ADR contact information
Deutsche Bank Shareholder Services
c/o Equiniti Trust Company LLC
Peck Slip Station
PO Box 2050 New York, NY 10272-2050, USA
E-mail: adr@equiniti.com
Shareholder Service (toll-free) Tel. +1 866 249 2593
Shareholder Service (international) Tel. +1 718 921 8137
www.equinity.com
Americas
UK/Ireland
Rest of Europe
Rest of World
Retail
Netherlands
Unidentified
54.2
18
9.3
2.8
3.5
0.4
11.8
* Source Cmi2i based on available information December 2023.
Shareholder Information
Financial calendar in 2024 for both Heineken N.V. and Heineken Holding N.V.
Dividend policy
14 February
22 February
The dividend policy of Heineken N.V. intends to preserve the independence of the Company, to maintain a healthy
financial structure and to retain sufficient earnings in order to grow the business both organically and through
acquisitions.
24 April
25 April
29 April
7 May
29 July
31 July
8 August
23 October
The dividend payments are related to the annual development of the net profit before exceptional items and
amortisation of brands (net profit beia), which translates in a dividend payout of 30–40%.
Dividends are paid in the form of an interim dividend and a final dividend. The interim dividend is fixed at 40%
of the total dividend of the previous year. Annual dividend proposals will remain subject to shareholder approval.
Contact Heineken N.V. and Heineken Holding N.V.
Further information on Heineken N.V. and Heineken Holding N.V. is available from the Investor Relations
department, telephone + 31 20 523 95 90 or by email: investors@heineken.com.
Further shareholder information is available on the Company’s website:
www.theHEINEKENcompany.com/investors.
209
Heineken
N.V.
Annual
Report
2023
Announcement of 2023 result
Publication of Annual Report 2023
Trading update first quarter 2024
Annual General Meeting of Shareholders
Quotation ex-final dividend 2023
Final dividend 2023 payable
Announcement of half year results 2024
Quotation ex-interim dividend 2024
Interim dividend 2024 payable
Introduction
Trading update third quarter 2024
Report
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Statements
Sustainability
Review
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Information
210
Heineken
N.V.
Annual
Report
2023
Introduction
Report
of the
Executive
Board
Report
of the
Supervisory
Board
Financial
Statements
Sustainability
Review
Bondholder Information
HEINEKEN has a Euro Medium Term Note (EMTN) Programme which was last updated in March 2023.
The programme allows Heineken N.V. to issue Notes for a total amount of up to €20 billion. Approximately
€12.2 billion is outstanding under the programme as at 31 December 2023.
Traded Heineken
N.V. Notes
Issue date
Total face value
Interest rate
Maturity
ISIN code
500 million
3.500%
19 Mar 2024
XS0758420748
500 million
3.875% 23 Sept 2024
XS2599731473
EUR EMTN 2024
19 Mar 2012
EUR EMTN 2024
23 Mar 2023
EUR EMTN 2024
7 Dec 2015
EUR EMTN 2025
25 Mar 2020
EUR EMTN 2025
30 Mar 2020
EUR EMTN 2025
EUR EMTN 2025
EUR EMTN 2026
2 Aug 2012
20 Oct 2015
4 May 2016
EUR EMTN 2026
15 Nov 2023
EUR EMTN 2027
29 Nov 2016
EUR EMTN 2027
17 Sep 2018
144A/RegS 2028
29 Mar 2017
EUR EMTN 2029
30 Jan 2014
EUR EMTN 2029
3 Oct 2017
EUR EMTN 2030
30 Mar 2020
EUR EMTN 2030
23 Mar 2023
EUR EMTN 2031
17 Sep 2018
EUR EMTN 2032
12 May 2017
EUR EMTN 2033
EUR EMTN 2033
15 April 2013
19 Apr 2013
144A/RegS 2033
7 May 2020
EUR EMTN 2035
23 Mar 2023
EUR EMTN 2040
7 May 2020
144A/RegS 2042
10 Oct 2012
144A/RegS 2047
29 Mar 2017
EUR
EUR
EUR
CHF
EUR
EUR
EUR
EUR
USD
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
USD
USD
460 million
100 million
600 million
750 million
225 million
EUR
EUR 1,000 million1
600 million
EUR
500 million
600 million
1,100 million
200 million
800 million
800 million
750 million
750 million2
500 million
180 million
100 million
650 million
750 million
850 million
500 million
1.500%
0.638%
1.625%
2.875%
2.000%
1.000%
3.625%
1.375%
1.250%
3.500%
3.500%
1.500%
2.250%
7 Dec 2024
XS1330434389
25 Mar 2025
XS2145099201
30 Mar 2025
XS2147977479
4 Aug 2025
XS0811555183
20 Oct 2025
XS1309072020
4 May 2026
XS1401174633
15 Nov 2026
XS2719096831
29 Jan 2027
XS1527192485
17 Mar 2027
XS1877595444
29 Jan 2028
US423012AF03
30 Jul 2029
XS1024136282
3 Oct 2029
XS1691781865
30 Mar 2030
XS2147977636
3.875% 23 Sept 2030
XS2599730822
1.750%
17 Mar 2031
XS1877595014
2.020% 12 May 2032
XS1611855237
3.250%
2.562%
1.250%
4.125%
1.750%
4.000%
15 Apr 2033
19 Apr 2033
XS0916345621
XS0920838371
7 May 2033
XS2168629967
23 Mar 2035
XS2599169922
7 May 2040
XS2168630205
1 Oct 2042
US423012AE38
650 million
4.350%
29 Mar 2047
US423012AG85
Other
Information
1 Includes EUR 200 million tap issued on 15 July 2019.
2 Includes EUR 100 million tap issued on 5 June 2019.
The EMTN programme and the above Heineken N.V. Notes issued thereunder are listed on the Luxembourg
Stock Exchange.
HEINEKEN has a €2.0 billion Euro Commercial Paper (ECP) programme to facilitate its cash management
operations and to further diversify its funding sources. There was €500 million ECP in issue per
31 December 2023.
211
Historical Summary
Heineken
N.V.
Annual
Report
2023
Revenue and profit
In millions of €
Revenue
Net revenue
Net revenue (beia)
Operating profit
Operating profit (beia)
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
Cash flow statement
In millions of €
36,375
34,676
26,583
23,770
28,521
Cash flow from operations
5,949
5,660
5,127
4,232
5,556
30,362
28,719
21,941
19,715
23,969
Cash flow related to interest, dividend and
income tax
(1,519)
(1,164)
(946)
(1,096)
(1,219)
30,308
28,694
21,901
19,724
23,894
Cash flow from operating activities
4,430
4,496
4,181
3,136
4,337
3,229
4,443
4,283
4,502
4,483
3,414
778
2,421
3,633
4,020
Cash flow used in operational investing
activities
(2,671)
(2,087)
(1,667)
(1,623)
(2,109)
Free operating cash flow
1,759
2,409
2,514
1,513
2,228
Introduction
as % of net revenue
as % of total assets
14.6
8.1
15.7
8.6
15.6
7.0
12.3
5.7
16.8
8.6
Net profit/(loss)
Net profit (beia)
as % of shareholders' equity
Dividend (proposed)
as % of net profit (beia)
Per share
In €
Cash flow from operating activities
Net profit (beia) – basic
Net profit (beia) – diluted
Dividend (proposed)
Shareholders' equity
2,304
2,632
2,682
2,836
3,324
2,041
(204)
1,154
13.1
978
37.2
7.86
4.67
4.67
1.73
14.5
995
35.1
7.81
4.93
4.92
1.73
11.8
714
35.0
7.26
3.55
3.54
1.24
8.6
403
34.9
5.45
2.00
2.00
0.70
2,166
2,517
15.6
967
38.4
7.56
4.39
4.38
1.68
35.60
33.97
30.15
23.27
28.15
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Sustainability
Review
Other
Information
Cash flow (used in)/from acquisitions and
disposals
Dividends paid
Cash flow (used in)/from financing
activities, excluding dividend
Net cash flow
(905)
(199)
(1,335)
(1,099)
(610)
(796)
185
(811)
519
38
(2,028)
(2,087)
(917)
(979)
2,049
2,936
(2,764)
(1,223)
207
(1,552)
Cash conversion ratio
61.4%
75.3%
110.0%
111.3%
80.2%
Financing ratios
Net debt/EBITDA (beia)
2.4
2.1
2.6
3.4
2.6
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
212
Historical Summary
Heineken
N.V.
Annual
Report
2023
Operating profit (beia)/net interest
expense (beia)
Free operating cash flow/net debt
Net debt/shareholders’ equity
Financing
In millions of €
Share capital
8.0
11.1%
0.79
11.8
17.8%
0.69
8.5
18.4%
0.79
5.2
11.0%
1.06
9.2
15.0%
0.95
922
922
922
922
922
Reserves and retained earnings
19,134
18,629
16,434
12,470
15,225
Shareholders' equity
Non-controlling interest
Total equity
20,056
19,551
17,356
13,392
16,147
2,733
2,369
2,344
1,000
1,164
22,789
21,920
19,700
14,392
17,311
Post-retirement obligations
586
Provisions (including deferred tax liabilities)
3,046
568
2,936
668
2,908
938
2,103
1,189
2,362
Employment of capital
In millions of €
Property, plant and equipment
14,772
13,623
12,401
11,551
13,269
Intangible assets
Other non-current assets
21,781
21,408
20,762
15,767
17,769
7,200
6,360
6,109
6,294
7,047
Total non-current assets
43,753
41,391
39,272
33,612
38,085
Inventories
Trade and other current assets
Cash, cash equivalents and current other
investments
Total current assets
Total assets
3,721
5,301
3,250
5,000
2,377
2,765
11,399
11,015
2,438
3,892
3,248
9,578
1,958
3,062
4,000
9,020
2,213
4,385
1,821
8,419
55,153
52,406
48,850
42,632
46,504
Non-current borrowings
14,046
12,893
13,640
14,616
13,366
Total equity/total non-current assets
0.52
0.53
0.50
0.43
0.45
Other liabilities (excluding provisions)
14,686
14,089
11,934
10,583
12,276
Liabilities (excluding provisions and
post-retirement obligations)
28,732
26,982
25,574
25,199
25,642
Total equity and liabilities
55,153
52,406
48,850
42,632
46,504
Shareholders' equity/
Total liabilities
0.62
0.64
0.60
0.47
0.55
Current assets/current liabilities
(excluding provisions)
0.78
0.79
0.81
0.86
0.69
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Historical Summary
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2023
Key figures1
(in € million unless otherwise stated)
Revenue
Excise tax expense
Net Revenue
Marketing and selling expenses
Personnel expenses
Amortisation, depreciation
and impairments
Other net (expenses)/income
2021
Eia
Beia
Reported
0
26,583
34,676
(41)
(40)
0
(4)
(4,683)
(5,957)
21,901
28,719
(2,091)
(3,489)
(2,692)
(4,079)
420
(1,539)
(1,886)
(1,445)
(11,368)
(15,779)
Reported
26,583
(4,642)
21,941
(2,091)
(3,485)
(1,959)
(9,923)
Introduction
Total net other (expenses)/income
(17,458)
(1,029)
(18,487)
(24,436)
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Operating profit
Interest income
Interest expense
Net interest income/(expenses)
Other net finance income/(expenses)
Share of profit of associates and joint ventures
Income tax expense
Non-controlling interests
Financial
Statements
Net profit
EBITDA2
4,483
(1,069)
3,414
4,283
49
(462)
(413)
14
250
(799)
(211)
3,324
6,692
(1)
11
10
(108)
(12)
(73)
(30)
(1,283)
(1,501)
48
(451)
(403)
(94)
238
(872)
(241)
2,041
5,191
74
(458)
(384)
48
223
(1,131)
(357)
2,682
6,392
1 This table will not always cast due to rounding.
2 EBITDA is derived from 'Operating profit' less 'Amortisation, depreciation and impairments' plus 'Share of profit of associates and joint ventures'.
Eia
(33)
8
(25)
(43)
74
207
6
244
219
(1)
6
5
(111)
40
8
(6)
155
52
Beia
34,643
(5,949)
28,694
(2,735)
(4,005)
(1,679)
(15,773)
(24,192)
4,502
73
(452)
(380)
(63)
263
(1,124)
(363)
2,836
6,444
Currency
translation
Consolidation
impact
1,740
(159)
1,582
(150)
(160)
(81)
(933)
(1,324)
258
6
(13)
(7)
4
29
(61)
(26)
198
1,247
(677)
570
(27)
(40)
(35)
(456)
(558)
12
0
2
2
16
(32)
(11)
(17)
(30)
Organic
growth
5,072
(431)
4,642
(467)
(316)
(24)
(3,016)
(3,824)
818
18
9
27
12
29
(180)
(79)
627
2022
Organic
growth %
19.1 %
(9.2) %
21.2 %
(22.4) %
(9.1) %
(1.6) %
(26.5) %
(20.7) %
24.0 %
37.2 %
2.1 %
6.8 %
12.3 %
12.1 %
(20.7) %
(32.5) %
30.7 %
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Glossary
Acquisition-related intangible assets
Acquisition-related intangible assets are assets that
HEINEKEN only recognises as part of a purchase price
allocation following an acquisition. This includes,
among others, brands, customer-related and certain
contract-based intangibles.
Average effective interest rate
Net interest income and expenses related to the net
debt position divided by the average net debt position
calculated on a quarterly basis.
Beia
Before exceptional items and amortisation of
acquisition-related intangible assets.
Whenever used in this report, the term “beia” refers to
performance measures (EBITDA, net profit, effective
tax rate, etc) before exceptional items and
amortisation of acquisition related intangible assets.
Alcoholic and non-alcoholic beverage propositions
beyond core beer, which leverage natural ingredients
and/or beer production process. This includes for
example flavoured beer, Ciders, RTDs (Ready-To-
Drinks) and malt based drinks.
Financial
Statements
Capital expenditure related to PP&E and
intangible assets (capex)
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Sum of ‘Purchase of property, plant and equipment’
and ‘Purchase of intangible assets’ as included in the
consolidated statement of cash flows.
Cash conversion ratio
Free operating cash flow/net profit (beia) before
deduction of non-controlling interests, calculated on
an annual basis.
Cash flow (used in)/from operational investing
activities
This represents the total of cash flow from sale and
purchase of Property, plant and equipment and
Intangible assets, proceeds and receipts of Loans to
customers and Other investments.
Centrally available cash
Eia
Net debt
Represents cash after the deduction of overdraft
balances in the group cash pooling structure and other
cash and cash equivalents owned at group level.
Centrally available financing headroom
This consists of the undrawn part of the committed
€3.5 billion revolving credit facility and centrally
available cash, minus centrally issued commercial
paper and short-term bank borrowings at group level.
Consolidation changes
Changes as a result of acquisitions and disposals.
Exceptional items and amortisation of acquisition-
related intangible assets.
Exceptional items
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.
Non-current and current interest-bearing borrowings
(incl. lease liabilities), bank overdrafts and market
value of cross-currency interest rate swaps less cash,
cash equivalents and other investments.
Net profit
Profit after deduction of non-controlling interests (profit
attributable to shareholders' of the Company).
Free operating cash flow
Net revenue
Total of cash flow from operating activities and cash
flow from operational investing activities.
Depletions
Gross merchandise value
Sales by distributors to the retail trade.
Dividend payout
Value of all products sold via our eB2B platforms. This
includes our own and third-party products, including all
duties and taxes.
Proposed dividend as percentage of net profit (beia).
Gross savings
Basic
Net profit/(loss) divided by the weighted average
number of shares – basic – during the year.
Diluted
Net profit/(loss) divided by the weighted average
number of shares – diluted – during the year.
EBITDA
Earnings before interest, taxes, net finance expenses,
depreciation, amortisation and impairment. EBITDA
includes HEINEKEN’s share in net profit of joint
ventures and associates.
Effective tax rate
Income tax expense expressed as a percentage of the
profit before income tax, adjusted for share of profit
of associates and joint ventures.
Structural cost reductions resulting from targeted
initiatives to improve efficiency and productivity,
relative to the baseline of expenses of a previous
period adjusted for inflation. The gross savings
exclude cost-to-achieve, consolidation changes and
decisions to reinvest.
Group net revenue (beia)
Consolidated net revenue (beia) plus attributable
share of net revenue (beia) from joint ventures and
associates.
Group operating profit (beia)
Consolidated operating profit (beia) plus attributable
share of operating profit (beia) from joint ventures
and associates, excluding Head Office and
eliminations.
Revenue as defined in IFRS 15 (after discounts) minus
the excise tax expense for those countries where the
excise is borne by HEINEKEN.
Net revenue per hectolitre
Net revenue divided by total consolidated volume.
Organic growth
Growth excluding the effect of foreign currency
translational effects, consolidation changes, exceptional
items and amortisation of acquisition-related intangible
assets.
Organic Growth %
Organic growth divided by the related prior year beia
amount. Whenever used in this report, the term
“organically” refers to the organic growth % of the
related performance measures (revenue, operating
profit, net profit, etc).
Organic volume growth
Growth in volume, excluding the effect of
consolidation changes.
Price mix on a constant geographic basis
Refers to the different components that influence net
revenue per hectolitre, namely the changes in the
absolute price of each individual SKU and their weight
in the portfolio. The weight of the countries in the
total revenue in the base year is kept constant.
Beyond Beer
Earnings per share (EPS)
Glossary
Profit
Total profit of HEINEKEN before deduction of non-
controlling interests.
Pro-forma 12-month rolling net debt/EBITDA
(beia) ratio
Net debt divided by the 12-month rolling pro-forma
EBITDA (beia), which includes acquisitions and
excludes disposals on a 12-month pro-forma basis.
®
All brand names mentioned in this report, including
those brand names not marked by an ®, represent
registered trademarks and are legally protected.
Region
A region is defined as HEINEKEN’s managerial
classification of countries into geographical units.
Total borrowings
Volume
Beer volume
Beer volume produced and sold by consolidated
companies.
Brand specific volume (Heineken® volume,
Amstel® volume, etc.)
Brand volume produced and sold by consolidated
companies plus 100% of brand volume sold under
licence agreements by joint ventures, associates and
third parties.
Group beer volume
The sum of beer volume, licensed beer volume and
attributable share of beer volume from joint ventures
and associates.
Licensed volume
100% of volume from HEINEKEN's beer brands sold
under licence agreements by joint ventures, associates
and third parties.
Sum of ‘Non-current borrowings’ and ‘current
borrowings’ as included in the consolidated statement
of financial position.
LONO
Low- and non-alcoholic beer, cider & brewed soft
drinks with an ABV <=3.5%.
Variable cost
Includes input costs (raw material, packaging material
and inventory movements), transport and energy &
water.
Non-beer volume
Cider, soft drinks and other non-beer volume produced
and sold by consolidated companies.
Premium beer
Beer sold at a price index equal or greater than 115
relative to the average market price of beer.
Third-party products volume
Volume of third-party products (beer and non-beer)
resold by consolidated companies.
Total consolidated volume
The sum of beer volume, non-beer volume and third-
party products volume.
Weighted average number of shares
Basic
Weighted average number of outstanding shares.
Diluted
Weighted average number of outstanding shares and
the weighted average number of shares that would be
issued on conversion of the dilutive potential shares
into shares as a result of HEINEKEN's share-based
payment plans.
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A Heineken N.V. publication
Heineken N.V.P.O. Box 28 1000 AA Amsterdam The Netherlands
Telephone: +31 20 523 92 39
The PDF, iXBRL viewer copy and the official ESEF reporting package of this Annual Report are available at:
www.theheinekencompany.com
The PDF and iXBRL viewer copy of the Annual Report of Heineken N.V. for the year 2023 is not in the ESEF-
format as specified by the European Commission in Regulatory Technical Standard on ESEF (Regulation (EU)
2019/815). The ESEF reporting package is available at http://www.theheinekencompany.com/
investors/results-reports-webcasts-and-presentations.
Production and editing
Heineken N.V. Global Corporate Affairs
Text
HEINEKEN
Photography
Sander Stoepker page 7
Graphic design and electronic publishing
Radley Yeldar:
www.ry.com
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Disclaimer and Reference Information
This report contains forward-looking statements based on current expectations and assumptions regarding the
financial and non-financial position of HEINEKEN’s activities, anticipated developments, and other factors and
HEINEKEN’s Brewing a Better World ambitions, which sets out amongst others emissions reduction ambitions
and other climate change related matters (including actions, potential impacts and risks associated therewith).
All statements other than statements of historical facts are or may be deemed to be, forward-looking
statements. Forward-looking statements also include, but are not limited to, statements and information in
HEINEKEN’s non-financial reporting, such as HEINEKEN’s Brewing a Better World ambitions, which sets out
amongst others emissions reduction and other climate change related matters (including actions, potential
impacts and risks associated therewith). These forward-looking statements are identified by their use of
interchangeable terms and phrases such as “aim”, “aims to”, “ambition”, “anticipate”, “believe”, “could”,
“estimate”, “expect”, “goals”, “intend”, “is anticipated”, “is predicted”, “it is estimated”, “commit”, “committed to”,
“may”, “might”, “milestones”, “objectives”, “outlook”, “plan”, “potential”, “probably”, “project”, “result”, “risks”,
“schedule”, “seek”, “should”, “target”, “will”, “will continue”, “will likely result”, or other similar expressions. All
forward-looking statements are subject to numerous assumptions, known and unknown risks and uncertainties,
and limits in data quality and integrity which may change over time, that could cause actual results to differ
materially from those expressed or implied in the forward-looking statements. These statements are out of
scope of assurance, in the sense that they are not guarantees of future performance.
One should not place undue reliance on these forward-looking statements since actual results may differ from
those stated in this report. Many of these risks and uncertainties relate to factors that are beyond HEINEKEN’s
ability to control or estimate precisely, such as but not limited to future market and economic conditions, the
behaviour of other market participants, climate change, other sustainability related factors, and legal, regulatory
or market measures in response to developments regarding such factors, including climate change mitigation
and adaptation, the cost and supply of water; water stress; financial distress; negative publicity; our ability to hire
and/or retain the best talent; our ability to find sustainable solutions for our input and output materials and
packaging; legal and regulatory developments, including changes in regulations relating to production,
distribution, importation, marketing, advertising, sales, pricing, labelling, packaging, product liability, antitrust,
labour, compliance and control systems, environmental issues and/or data privacy; changes or evolution in
measurement standards, modelling methodology and the level of data granularity, quality and integrity;
reputation of our brands; changes in consumer preferences; the ability to make acquisitions and/or divest
businesses; execution and effectiveness of business transformation projects; consequences of integrating
acquired businesses and/or divestment of divisions; economic, social and political risks and natural disasters;
costs of raw materials and other goods and services; access to capital and the actions of government regulators,
and weather conditions.
Although we endeavour to provide accurate and timely information, there can be no guarantee that such
information is accurate as of the date it is received or that it will continue to be accurate in the future, as this is
subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the
forward-looking statements and scenario analyses.
This report also contains data on HEINEKEN’s Scope 1, 2 and 3 emissions. Scope 1 and 2 emissions relate to
emissions under HEINEKEN control from own activities and supplied heat, power and cooling. Scope 3 emissions
relate to indirect emissions from different organisations (suppliers, service providers, customers) and is therefore
subject to a range of uncertainties, amongst others due to various methodologies applied. International
standards and protocols governing emissions calculations and categorisations evolve, as do accepted norms
regarding terminology such as 'carbon neutral' and 'net zero'.
Any forward-looking statements made in this communication are qualified in their entirety by these cautionary
statements, and there can be no assurance that the actual results, targets, ambitions, goals, commitments, or
developments anticipated by HEINEKEN will be realized or, even if substantially realized, that they will have the
expected consequences to, or effects on, HEINEKEN or its business or operations. Except as required by law,
HEINEKEN undertakes no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.