5. Segment reporting
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General
Segment information is presented only in respect of geographical segments consistent with Heineken’s management and internal reporting structure. Over 80 per cent of the Heineken sales consist of beer. The risks and rewards in respect of sales of other beverages do not differ significantly from beer, as such no business segments are reported.
Inter-segment pricing is determined on an arm’s-length basis.
Segment results, assets and liabilities 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 expense. Unallocated assets comprise current other investments and cash call deposits.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, goodwill and other intangible assets.
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Export revenue and results are also allocated to the regions. Most of the production facilities are located in Europe. Sales to the other regions are charged at transfer prices with a surcharge for cost of capital. Segment assets are based on the geographical location of the assets.
In 2005 Head Office revenue and expenses were included in Western Europe but are presented this year separately together with eliminations. Prior-year figures have been restated.
Heineken distinguishes the following geographical segments:
- Western Europe
- Central and Eastern Europe
- The Americas
- Africa and the Middle East
- Asia Pacific
- Head Office/eliminations
| Western Europe | Central & Eastern Europe | The Americas | Africa and the Middle East | Asia Pacific | Head Office/ Eliminations | Consolidated | ||||||||
| In millions of EUR | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 |
| Revenue | ||||||||||||||
| Third-party revenue 1 | 4,752 | 4,711 | 3,337 | 2,768 | 1,975 | 1,733 | 1,179 | 1,049 | 560 | 502 | 26 | 33 | 11,829 | 10,796 |
| Inter-regional revenue | 599 | 515 | 12 | 28 | – | – | 3 | 3 | – | – | (624) | (546) | – | – |
| Total revenue | 5,351 | 5,226 | 3,359 | 2,796 | 1,975 | 1,733 | 1,182 | 1,052 | 560 | 502 | (598) | (513) | 11,829 | 10,796 |
| Other income | 361 | 31 | 16 | 26 | 15 | 5 | 3 | 3 | – | 1 | (16) | (3) | 379 | 63 |
| Results from operating activities | 916 | 511 | 339 | 296 | 257 | 242 | 231 | 196 | 86 | 65 | (24) | (56) | 1,805 | 1,254 |
| Net finance expenses | (122) | (114) | ||||||||||||
| Share of profit of associates | 4 | 3 | – | 2 | 10 | 14 | 4 | 2 | 9 | 8 | – | – | 27 | 29 |
| Income tax expense | (365) | (300) | ||||||||||||
| Profit | 1,345 | 869 | ||||||||||||
| Attributable to: | ||||||||||||||
| Equity holders of the company (net profit) | 1,211 | 761 | ||||||||||||
| Minority interest | 134 | 108 | ||||||||||||
| 1,345 | 869 | |||||||||||||
| Beer volumes 2 | ||||||||||||||
| Consolidated volume | 32,100 | 31,896 | 46,925 | 39,308 | 13,197 | 11,782 | 13,281 | 11,559 | 6,402 | 5,976 | – | – | 111,905 | 100,521 |
| Minority interests | – | – | 6,433 | 6,160 | 3,555 | 3,197 | 925 | 679 | 4,157 | 3,779 | – | – | 15,070 | 13,815 |
| Licences | 305 | 285 | – | – | 172 | 144 | 3,500 | 2,798 | 993 | 1,047 | – | – | 4,970 | 4,274 |
| Inter-regional volume | 10,596 | 9,135 | 269 | 120 | – | – | – | – | – | – | (10,865) | (9,255) | – | – |
| Group volume | 43,001 | 41,316 | 53,627 | 45,588 | 16,924 | 15,123 | 17,706 | 15,036 | 11,552 | 10,802 | (10,865) | (9,255) | 131,945 | 118,610 |
| Segment assets | 4,046 | 3,656 | 5,238 | 4,902 | 1,176 | 1,122 | 1,105 | 1,148 | 457 | 388 | 307 | 193 | 12,329 | 11,409 |
| Investment in associates | 9 | 10 | 14 | 15 | 55 | 62 | 36 | 16 | 72 | 69 | – | – | 186 | 172 |
| Total segment assets | 4,055 | 3,666 | 5,252 | 4,917 | 1,231 | 1,184 | 1,141 | 1,164 | 529 | 457 | 307 | 193 | 12,515 | 11,581 |
| Unallocated assets | 482 | 248 | ||||||||||||
| Total assets | 12,997 | 11,829 | ||||||||||||
| Segment liabilities | 3,583 | 3,598 | 2,950 | 2,908 | 546 | 691 | 631 | 668 | 279 | 224 | (512) | (774) | 7,477 | 7,315 |
| Total equity | 5,520 | 4,514 | ||||||||||||
| Total equity and liabilities | 12,997 | 11,829 | ||||||||||||
| Purchase of P, P & E | 340 | 346 | 287 | 254 | 53 | 60 | 98 | 116 | 34 | 51 | 32 | 26 | 844 | 853 |
| Acquisition of goodwill | 5 | 15 | 12 | 430 | 7 | 34 | 4 | 45 | 39 | (11) | – | – | 67 | 513 |
| Purchase of intangible assets | 5 | 5 | 16 | 13 | 11 | 2 | 1 | 1 | – | – | – | – | 33 | 21 |
| Depreciation of P, P & E | 264 | 296 | 298 | 252 | 42 | 51 | 78 | 82 | 20 | 18 | 4 | 6 | 706 | 705 |
| Impairment and reversal of impairment of P, P & E | 11 | 5 | 12 | – | – | – | 1 | 6 | – | – | 9 | – | 33 | 11 |
| Amortisation intangible assets | 6 | 13 | 18 | 19 | 3 | 3 | 1 | 2 | – | – | – | – | 28 | 37 |
| Impairment intangible assets | – | – | 19 | 15 | – | – | – | – | – | – | – | – | 19 | 15 |
1 Includes other revenue of €241 million in 2006 and €257 million in 2005.
2 Please refer to the Glossary for definitions.
