SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of August, 2023
Commission File Number 1565025
AMBEV S.A.
(Exact name of registrant as specified in its
charter)
AMBEV S.A.
(Translation of Registrant's name into English)
Rua Dr. Renato Paes de Barros, 1017 - 3rd
Floor
04530-000 São Paulo, SP
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the
registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F _______
Indicate
by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____
Ambev S.A.
Interim consolidated
financial statements at
June 30, 2023
and report on review
Report on review of interim
consolidated financial statements
To the Board of Directors and Shareholders
Ambev S.A.
Introduction
We have reviewed the accompanying interim consolidated balance sheet of Ambev S.A.
and its subsidiaries ("Company") as at June 30, 2023, the related interim consolidated income statement and comprehensive income
for the quarter and six-month period then ended and the related interim consolidated statement of changes in equity and cash flows for
the six-month period then ended and notes, comprising a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of these interim
consolidated financial statements in accordance with the accounting standard International Accounting Standard (IAS) 34 - “Interim
Financial Reporting”, of the International Accounting Standards Board (IASB). Our responsibility is to express a conclusion on these interim
consolidated financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standards on Reviews of
Interim Financial Information (ISRE 2410 - “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”,
respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance
with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim consolidated financial statements referred to above is not prepared, in all material respects, in accordance
with IAS 34.
São Paulo, August 16, 2023
PricewaterhouseCoopers
Auditores Independentes Ltda.
CRC 2SP000160/O-5
|
Alessandro Marchesino de Oliveira
Contador CRC 1SP265450/O-8
|
2
PricewaterhouseCoopers Auditores Independentes Ltda., Avenida Brigadeiro Faria
Lima, 3732, Edifício B32, 16o
São Paulo, SP, Brasil, 04538-132
T: +55 (11) 4004-8000, www.pwc.com.br
CONTENTS
INTERIM CONSOLIDATED BALANCE SHEET |
2 |
INTERIM CONSOLIDATED INCOME STATEMENT |
4 |
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
5 |
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
6 |
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS |
8 |
1. CORPORATE INFORMATION |
9 |
2. STATEMENT OF COMPLIANCE |
10 |
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
11 |
4. USE OF ESTIMATES AND JUDGMENTS |
12 |
5. CASH AND CASH EQUIVALENTS |
14 |
6. INVESTMENT SECURITIES |
14 |
7. INVENTORY |
14 |
8. RECOVERABLE INDIRECT TAXES |
15 |
9. DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION |
16 |
10. PROPERTY, PLANT AND EQUIPMENT |
18 |
11. GOODWILL |
21 |
12. TRADE PAYABLES |
22 |
13. INTEREST-BEARING LOANS AND BORROWINGS |
22 |
14. PROVISIONS |
24 |
15. CHANGES IN EQUITY |
26 |
16. SEGMENT REPORTING |
31 |
17. NET SALES |
35 |
18. OTHER OPERATING INCOME/(EXPENSES) |
35 |
19. EXCEPTIONAL ITEMS |
36 |
20. FINANCE EXPENSES AND INCOME |
36 |
21. INCOME TAX AND SOCIAL CONTRIBUTION |
38 |
22. SHARE-BASED PAYMENTS |
39 |
23. FINANCIAL INSTRUMENTS AND RISKS |
43 |
24. COLLATERAL AND CONTRACTUAL COMMITMENTS WITH SUPPLIERS, ADVANCES FROM CUSTOMERS AND OTHERS |
56 |
25. CONTINGENCIES |
56 |
26. RELATED PARTIES |
61 |
INTERIM CONSOLIDATED BALANCE SHEET
All amounts in thousands of Brazilian Reais unless otherwise stated
Assets |
Note |
06/30/2023 |
12/31/2022 |
|
|
|
|
Cash and cash equivalents |
5 |
12,117,013 |
14,926,435 |
Investment securities |
6 |
313,504 |
454,497 |
Trade receivables |
|
4,877,669 |
5,349,105 |
Derivative financial instruments |
23 |
276,180 |
272,301 |
Inventories |
7 |
12,055,022 |
12,923,025 |
Income tax and social contributions recoverable |
|
2,185,642 |
1,808,661 |
Recoverable indirect taxes (i) |
8 |
1,208,472 |
1,044,814 |
Other assets |
|
1,290,589 |
1,037,873 |
Current assets |
|
34,324,091 |
37,816,711 |
|
|
|
|
|
|
|
|
Investment securities |
6 |
246,838 |
219,055 |
Derivative financial instruments |
23 |
37 |
1,531 |
Income tax and social contributions recoverable |
|
4,022,491 |
4,607,486 |
Recoverable indirect taxes (i) |
8 |
6,827,608 |
6,708,773 |
Deferred tax assets |
9 |
8,069,700 |
6,438,835 |
Other assets |
|
1,675,038 |
1,905,194 |
Employee benefits |
|
53,114 |
56,582 |
Long term assets |
|
20,894,826 |
19,937,456 |
|
|
|
|
Investments in joint ventures |
|
329,448 |
331,939 |
Property, plant and equipment |
10 |
29,284,782 |
30,055,690 |
Intangible |
|
9,141,431 |
9,222,249 |
Goodwill |
11 |
39,319,837 |
40,594,038 |
|
|
|
|
Non-current assets |
|
98,970,324 |
100,141,372 |
|
|
|
|
Total assets |
|
133,294,415 |
137,958,083 |
(i) From
the first quarter of 2023, the nomenclature “Recoverable Taxes” was changed to “Recoverable Indirect Taxes”.
The accompanying notes are an integral part of these
interim consolidated financial statements.
INTERIM CONSOLIDATED BALANCE SHEET (CONTINUED)
All amounts in thousands of Brazilian Reais unless
otherwise stated
Equity and liabilities |
Note |
06/30/2023 |
12/31/2022 |
|
|
|
|
Trade payables |
12 |
18,579,963 |
24,328,529 |
Derivative financial instruments |
23 |
1,525,139 |
729,424 |
Interest-bearing loans and borrowings |
13 |
1,320,426 |
982,569 |
Bank overdrafts |
5 |
103,948 |
74,343 |
Wages and salaries |
|
1,938,687 |
2,335,826 |
Dividends and interest on shareholders’ equity payable |
|
1,436,500 |
1,464,812 |
Income tax and social contribution payable |
|
1,082,570 |
1,118,614 |
Taxes and contributions payable |
|
3,726,467 |
5,812,872 |
Put option granted on subsidiaries and other liabilities |
|
3,928,390 |
3,512,822 |
Provisions |
14 |
479,667 |
180,727 |
Current liabilities |
|
34,121,757 |
40,540,538 |
|
|
|
|
Trade payables |
12 |
440,508 |
509,427 |
Interest-bearing loans and borrowings |
13 |
2,671,857 |
2,788,137 |
Deferred tax liabilities |
9 |
3,725,715 |
3,725,692 |
Income tax and social contribution payable |
|
1,581,072 |
1,598,626 |
Taxes and contributions payable |
|
481,986 |
670,974 |
Put option granted on subsidiaries and other liabilities |
|
1,454,093 |
1,896,758 |
Provisions |
14 |
469,144 |
738,982 |
Employee benefits |
|
1,982,312 |
2,161,122 |
Non-current liabilities |
|
12,806,687 |
14,089,718 |
|
|
|
|
Total liabilities |
|
46,928,444 |
54,630,256 |
|
|
|
|
Equity |
15 |
|
|
Issued capital |
|
58,177,929 |
58,130,517 |
Reserves |
|
92,381,957 |
92,246,594 |
Carrying value adjustments |
|
(74,217,686) |
(68,421,478) |
Retained earnings/(losses) |
|
8,732,403 |
- |
Equity attributable to the equity holders of Ambev |
|
85,074,603 |
81,955,633 |
Non-controlling interests |
|
1,291,368 |
1,372,194 |
Total equity |
|
86,365,971 |
83,327,827 |
|
|
|
|
Total equity and liabilities |
|
133,294,415 |
137,958,083 |
The accompanying notes are an integral part of these
interim consolidated financial statements.
INTERIM CONSOLIDATED INCOME STATEMENT
For the period ended June 30
All amounts in thousands of Brazilian Reais unless
otherwise stated
|
|
Six-month period ended: |
|
Three-month period ended: |
|
Note |
2023 |
2022 |
|
2023 |
2022 |
|
|
|
|
|
|
|
Net sales |
17 |
39,429,857 |
36,428,147 |
|
18,898,114 |
17,988,995 |
Cost of sales |
|
(19,767,293) |
(18,788,740) |
|
(9,635,609) |
(9,374,254) |
Gross profit |
|
19,662,564 |
17,639,407 |
|
9,262,505 |
8,614,741 |
|
|
|
|
|
|
|
Distribution expenses |
|
(5,598,401) |
(5,143,994) |
|
(2,681,705) |
(2,614,975) |
Sales and marketing expenses |
|
(3,831,669) |
(3,392,858) |
|
(2,090,369) |
(1,875,882) |
Administrative expenses |
|
(2,621,156) |
(2,468,238) |
|
(1,315,604) |
(1,294,802) |
Other operating income/(expenses), net |
18 |
877,513 |
1,626,153 |
|
396,437 |
1,239,431 |
Exceptional items |
19 |
(151,305) |
(58,449) |
|
(123,416) |
(31,223) |
Income from operations |
|
8,337,546 |
8,202,021 |
|
3,447,848 |
4,037,290 |
|
|
|
|
|
|
|
Finance expenses |
20 |
(3,540,494) |
(3,452,558) |
|
(1,808,328) |
(1,829,465) |
Finance income |
20 |
1,469,148 |
2,360,383 |
|
734,844 |
1,334,003 |
Net finance result |
|
(2,071,346) |
(1,092,175) |
|
(1,073,484) |
(495,462) |
|
|
|
|
|
|
|
Share of results of joint ventures |
|
(16,603) |
(5,610) |
|
(2,431) |
(3,206) |
Income before income tax |
|
6,249,597 |
7,104,236 |
|
2,371,933 |
3,538,622 |
|
|
|
|
|
|
|
Income tax expense |
21 |
167,412 |
(511,350) |
|
225,827 |
(474,574) |
Net income |
|
6,417,009 |
6,592,886 |
|
2,597,760 |
3,064,048 |
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
Equity holders of Ambev |
|
6,202,549 |
6,382,516 |
|
2,502,974 |
2,969,744 |
Non-controlling interest |
|
214,460 |
210,370 |
|
94,786 |
94,304 |
|
|
|
|
|
|
|
Basic earnings per share – common – R$ |
|
0.3939 |
0.4054 |
|
0.1589 |
0.1886 |
Diluted earnings per share – common – R$ |
|
0.3915 |
0.4026 |
|
0.1579 |
0.1873 |
The accompanying notes are an integral part of these
interim consolidated financial statements.
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the period ended June 30
All amounts in thousands of Brazilian Reais unless otherwise stated
|
Six-month period ended: |
|
Three-month period ended: |
|
2023 |
2022 |
|
2023 |
2022 |
|
|
|
|
|
|
Net income |
6,417,009 |
6,592,886 |
|
2,597,760 |
3,064,048 |
|
|
|
|
|
|
Items that may be subsequently reclassified to profit or loss: |
|
|
|
|
|
Exchange differences on the translation of foreign operations (gains/(losses)) |
|
|
|
|
|
Investment hedge – put option granted on subsidiaries |
197,720 |
147,456 |
|
132,053 |
(163,723) |
Gains/losses on translation of other foreign operations |
(5,313,015) |
(4,132,971) |
|
(3,285,254) |
3,176,803 |
Gains/losses on translation of foreign operations |
(5,115,295) |
(3,985,515) |
|
(3,153,201) |
3,013,080 |
|
|
|
|
|
|
Cash flow hedge – gains/(losses) |
|
|
|
|
|
Recognized in equity (Hedge reserve) |
(668,842) |
(168,554) |
|
(655,890) |
517,194 |
Reclassified from equity (Hedge reserve) and included in profit or loss |
(117,170) |
(474,067) |
|
(23,254) |
(44,644) |
Total cash flow hedge |
(786,012) |
(642,621) |
|
(679,144) |
472,550 |
|
|
|
|
|
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
Recognition of actuarial gains/(losses) |
4,230 |
1,763 |
|
(386) |
537 |
|
|
|
|
|
|
Other comprehensive (loss)/income |
(5,897,077) |
(4,626,373) |
|
(3,832,731) |
3,486,167 |
|
|
|
|
|
|
Total comprehensive (loss)/income |
519,932 |
1,966,513 |
|
(1,234,971) |
6,550,215 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
Equity holders of Ambev |
405,714 |
1,808,935 |
|
(1,250,183) |
6,305,534 |
Non-controlling interest |
114,218 |
157,578 |
|
15,212 |
244,681 |
The accompanying notes are an integral part of these
interim consolidated financial statements. The consolidated statement of comprehensive income is presented net of income tax. The income
tax effects of these items are disclosed in Note 9 – Deferred income tax and social contribution.
INTERIM CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
For the period ended June 30
All amounts in thousands of Brazilian Reais unless
otherwise stated
|
Attributable to equity holders of Ambev |
|
|
|
|
Issued capital |
Capital reserves |
Net income reserves |
Retained earnings |
Carrying value adjustments |
Total |
|
Non-controlling interests |
Total equity |
At January 1, 2022 |
58,042,464 |
55,187,188 |
31,191,640 |
- |
(61,778,261) |
82,643,031 |
|
1,374,586 |
84,017,617 |
|
|
|
|
|
|
|
|
|
|
Net Income |
- |
- |
- |
6,382,516 |
- |
6,382,516 |
|
210,370 |
6,592,886 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income: |
|
|
|
|
|
|
|
|
|
Gains/(losses) on the translation of foreign operations |
- |
|
- |
- |
(3,936,782) |
(3,936,782) |
|
(48,733) |
(3,985,515) |
Cash flow hedges |
- |
|
- |
- |
(638,316) |
(638,316) |
|
(4,305) |
(642,621) |
Actuarial gains/(losses) |
- |
|
- |
- |
1,517 |
1,517 |
|
246 |
1,763 |
Total comprehensive income |
- |
- |
- |
6,382,516 |
(4,573,581) |
1,808,935 |
|
157,578 |
1,966,513 |
Capital increase (Note 15) |
88,053 |
(64,289) |
- |
- |
- |
23,764 |
|
- |
23,764 |
Effect of application of IAS 29 (hyperinflation) |
- |
- |
- |
1,737,299 |
- |
1,737,299 |
|
4,978 |
1,742,277 |
Gains/(losses) of controlling interest |
- |
- |
- |
- |
(2,736) |
(2,736) |
|
(249) |
(2,985) |
Dividends paid |
- |
- |
- |
- |
- |
- |
|
(212,993) |
(212,993) |
Purchases of shares, results from treasury shares and share-based payments |
- |
52,833 |
- |
- |
- |
52,833 |
|
- |
52,833 |
At June 30, 2022 |
58,130,517 |
55,175,732 |
31,191,640 |
8,119,815 |
(66,354,578) |
86,263,126 |
|
1,323,900 |
87,587,026 |
The accompanying notes are an integral part of these
interim consolidated financial statements.
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended June 30
All amounts in thousands of Brazilian Reais unless
otherwise stated
|
Attributable to equity holders of Ambev |
|
|
|
|
Issued capital |
Capital reserves |
Net income reserves |
Retained earnings |
Carrying value adjustments |
Total |
|
Non-controlling interests |
Total equity |
At January 1, 2023 |
58,130,517 |
55,339,694 |
36,906,900 |
- |
(68,421,478) |
81,955,633 |
|
1,372,194 |
83,327,827 |
|
|
|
|
|
|
|
|
|
|
Net Income |
- |
- |
- |
6,202,549 |
- |
6,202,549 |
|
214,460 |
6,417,009 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income: |
|
|
|
|
|
|
|
|
|
Gains/(losses) on the translation of foreign operations |
- |
|
- |
- |
(5,016,193) |
(5,016,193) |
|
(99,102) |
(5,115,295) |
Cash flow hedges |
- |
|
- |
- |
(785,019) |
(785,019) |
|
(993) |
(786,012) |
Actuarial gains/(losses) |
- |
|
- |
- |
4,377 |
4,377 |
|
(147) |
4,230 |
Total comprehensive income |
- |
- |
- |
6,202,549 |
(5,796,835) |
405,714 |
|
114,218 |
519,932 |
Capital increase (Note 15) |
47,412 |
(32,869) |
- |
- |
- |
14,543 |
|
- |
14,543 |
Effect of application of IAS 29 (hyperinflation) |
- |
- |
- |
2,529,854 |
- |
2,529,854 |
|
6,053 |
2,535,907 |
Options granted on subsidiaries |
- |
- |
- |
- |
4,700 |
4,700 |
|
- |
4,700 |
Gains/(losses) of controlling interest |
- |
- |
- |
- |
(44) |
(44) |
|
- |
(44) |
Tax on deemed dividends |
- |
- |
- |
- |
(4,029) |
(4,029) |
|
- |
(4,029) |
Dividends paid |
- |
- |
- |
- |
- |
- |
|
(202,193) |
(202,193) |
Purchases of shares, results from treasury shares and share-based payments |
- |
168,232 |
- |
- |
- |
168,232 |
|
1,096 |
169,328 |
At June 30, 2023 |
58,177,929 |
55,475,057 |
36,906,900 |
8,732,403 |
(74,217,686) |
85,074,603 |
|
1,291,368 |
86,365,971 |
The accompanying notes are an integral part of these
interim consolidated financial statements.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended June 30
All amounts in thousands of Brazilian Reais unless otherwise stated
|
|
Six-month period ended: |
|
Note |
2023 |
2022 |
|
|
|
|
Net income |
|
6,417,009 |
6,592,886 |
Depreciation, amortization and impairment |
|
3,230,756 |
2,800,578 |
Impairment losses on receivables and inventory |
|
184,192 |
138,914 |
Additions/(reversals) in provisions and employee benefits |
|
72,085 |
50,183 |
Net finance costs |
20 |
2,071,346 |
1,092,175 |
Losses/(gains) on sale of property, plant and equipment and intangible assets |
|
(42,573) |
(45,913) |
Equity-settled share-based payment expenses |
22 |
181,910 |
150,980 |
Income tax expense |
21 |
(167,412) |
511,350 |
Share of result of joint ventures |
|
16,603 |
5,610 |
Hedge operations results |
23 |
(241,304) |
(496,216) |
Other non-cash items included in profit |
|
(9,031) |
(18,376) |
Cash flow from operating activities before changes in working capital and use of provisions |
|
11,713,581 |
10,782,171 |
|
|
|
|
(Increase)/decrease in trade and other receivables |
|
(208,392) |
(19,864) |
(Increase)/decrease in inventories |
|
(162,591) |
(2,175,958) |
Increase/(decrease) in trade and other payables |
|
(5,885,419) |
(4,471,602) |
Cash generated from operations |
|
5,457,179 |
4,114,747 |
|
|
|
|
Interest paid |
|
(287,867) |
(213,628) |
Interest received |
|
372,445 |
383,633 |
Dividends received |
|
5,278 |
5,053 |
Income tax paid |
|
(2,707,597) |
(1,567,846) |
Cash flow from operating activities |
|
2,839,438 |
2,721,959 |
|
|
|
|
Proceeds from sales of property, plant and equipment and intangible assets |
|
58,276 |
58,204 |
Acquisitions of property, plant and equipment and intangible assets |
|
(2,448,695) |
(2,641,627) |
Acquisitions of subsidiaries, net of cash acquired |
|
- |
(2,928) |
Acquisitions of other investments |
|
(8,421) |
(30,000) |
Investments in short-term debt securities and net proceeds/(acquisitions) of debt securities |
|
99,743 |
341,820 |
Net proceeds/(acquisitions) of other assets |
|
- |
15,000 |
Cash flow from investing activities |
|
(2,299,097) |
(2,259,531) |
|
|
|
|
Capital increase |
|
14,543 |
23,764 |
Proceeds/(repurchases) of treasury shares |
|
(25,082) |
(55,789) |
Acquisitions of non-controlling interest |
|
- |
(52) |
Proceeds from borrowings |
|
38,362 |
127,875 |
Repayment of borrowings |
|
(131,991) |
(76,011) |
Cash net of finance costs other than interests |
|
(1,938,602) |
(2,213,952) |
Payment of lease liabilities |
|
(513,344) |
(371,976) |
Dividends and interest on shareholders’ equity paid |
|
(166,789) |
(164,925) |
Cash flow from financing activities |
|
(2,722,903) |
(2,731,066) |
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
(2,182,562) |
(2,268,638) |
Cash and cash equivalents less bank overdrafts at the beginning of the year |
|
14,852,092 |
16,597,184 |
Effect of exchange rate fluctuations on cash and cash equivalents |
|
(656,465) |
(717,867) |
Cash and cash equivalents less bank overdrafts at the end of the year |
|
12,013,065 |
13,610,679 |
The accompanying notes are an integral part of these interim consolidated
financial statements.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| (a) | Description of business |
Ambev S.A. (referred to as the “Company”
or “Ambev”) together with its subsidiaries (the “Group” or “Consolidated”), headquartered in São
Paulo – SP, Brazil, has as its purpose, either directly or through participation in other companies, the production and sale of
beer, draft beer, soft drinks, other non-alcoholic beverages, malt and food in general, as well as the advertising of its own and of third-party
products; the sale of promotional and advertising materials; and the direct or indirect exploitation of bars, restaurants, snack bars
and similar establishments, among others.
The Company’s shares and American Depositary
Receipts (“ADRs”) are listed on the Brasil, Bolsa, Balcão S.A. (“B3”) under the ticker “ABEV3”
and on the New York Stock Exchange (“NYSE”) under the ticker “ABEV”, respectively.
The Company’s direct controlling shareholders
are Interbrew International B.V. (“ITW International”) and AmBrew S.à.r.l (“Ambrew”), both of which are
subsidiaries of Anheuser-Busch InBev N.V. (“AB InBev”).
The interim financial statements were approved,
in their final form, by the Board of Directors on August 02, 2023.
| (b) | Major corporate events in 2023 and 2022 |
Tax Credits - 2022
After the decision of the Federal Supreme Court
(“STF”) in the judgment of RE 574,706/PR, rendered in 2017 and ratified in May 2021, which declared the unconstitutionality
of the inclusion of the ICMS in the taxable base of PIS and COFINS, the General Attorney’s Office (“PGFN”), with binding
effects, ruled on the content and effects of this decision. The PGFN normative (PGFN Opinion 14,483/2021) presented its understanding
of the limits of the judgment and equated the procedures that must be observed by the Tax Administration in relation to the matter, especially
with regard to issues related to the ICMS to be excluded from the taxable base of PIS and COFINS, temporal aspects regarding the applicability
of the STF understanding (modulation of effects) and the impacts of said exclusion on the credits recorded by the purchasers upon acquisitions.
In view of the pacification and the binding
understanding of the subject by the PGFN, the Company concluded in the second trimester of 2022 analysis that allowed an accounting recognition
of R$1.2 billion at the same period, regarding the tax credit of the exclusion of the ICMS in the taxable base of PIS and COFINS in subsidiaries
operations.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Renegotiation of Tenedora’s shareholders agreement
The Company and E. León Jimenes, S.A.
(“ELJ”), as the shareholders of Tenedora CND, S.A. (“Tenedora”), a holding company headquartered in the Dominican
Republic, the owner of almost the entire share capital of Cervecería Nacional Dominicana, S.A., on July 2, 2020, signed the second
amendment to Tenedora’s Shareholders Agreement (the “Shareholders Agreement”), extending their partnership in the country
and postponing the terms of the put and call options defined in the original Agreement. ELJ is currently the owner of 15% of Tenedora’s
shares, and its put option is now divided into two tranches: (i) Tranche A, corresponding to 12.11% of the shares, exercisable in 2022,
2023 and 2024; and (ii) Tranche B, corresponding to 2.89% of the shares, exercisable starting in 2026. The Company, on the other hand,
has a call option over the Tranche A shares exercisable starting in 2021 and over the Tranche B shares to be exercised starting in 2029.
At June 30, 2023, there were no exercises for these options. The details of the assumptions used for these options are described in Note
23 (Item IV (d)).
| 2. | STATEMENT OF COMPLIANCE |
The consolidated interim financial statements
have been prepared using the going-concern accounting basis and are being presented in accordance with IAS 34 – Interim Financial
Reporting as issued by the International Accounting Standards Board (“IASB”).
The information does not meet all disclosure
requirements for the presentation of full annual financial statements and thus should be read in conjunction with the consolidated financial
statements prepared in accordance with International Financial Reporting Standards (“IFRS”) for the year ended December 31,
2022. To avoid duplication of disclosures which are included in the annual financial statements, the following notes were not subject
to full filing:
| (a) | Summary of significant accounting policies (Note 3); |
| (b) | Trade receivables (Note 20); |
| (c) | Intangibles (Note 15); |
| (e) | Interest-bearing loans and borrowings (Note 23); |
| (f) | Employee benefits (Note 24); |
| (g) | Changes in equity (Note 22); |
| (h) | Additional information on operating expenses by nature (Note 10); |
| (i) | Payroll and related benefits (Note 9); |
| (j) | Contingencies (Note 30); |
| (k) | Group companies (Note 32); and |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
There were no significant changes in the accounting
policies and calculation methods used for the interim financial statements as at June 30, 2023 compared to those presented in the financial
statements for the years ended December 31, 2022.
| (a) | Basis of preparation and measurement |
The interim
financial statements are presented in thousands of Brazilian Reais (“R$”), unless otherwise
indicated, rounded to the nearest thousand. The measurement basis used in preparing the interim financial statements is the historical
cost, net realizable value, fair value or recoverable amount.
The revised standards and new standards, which
became effective in 2023 are not applicable or did not have any material impact for the Company for the preparation of these consolidated
financial statements.
Other Standards, Interpretations and Amendments
to Standards
On May 25 2023, IASB issued changes in IAS 7
– Statement of Cash Flows and IFRS 7 – Financial Instruments: Disclosures, which establishes new disclosure
requirements of supplier finance arrangements, known as reverse factoring. These requirements should be adopted by companies subject to
IFRS from 2024 onwards.
Is not expected that these changes have a significant
impact in the interim consolidated financial statements of the entity. In addition, there are no other standards, standard changes or
IFRIC interpretations that still hasn’t been in force and that may have a significant impact in entity’s financial statements.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| (c) | Foreign currency conversion |
Exchange rates
The main exchange rates used in the preparation of
the Company’s interim financial statements are as follows:
|
|
|
Closing rate |
|
Average rate |
|
|
|
|
|
Six-month period ended: |
|
Three-month period ended: |
Currency |
Name |
Country |
06/30/2023 |
12/31/2022 |
|
06/30/2023 |
06/30/2022 |
|
03/31/2023 |
03/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
CAD |
Canadian Dollar |
Canada |
3.6327 |
3.8540 |
|
3.7682 |
3.9808 |
|
3.8259 |
4.2043 |
DOP |
Dominican Peso |
Dominican Republic |
0.0867 |
0.0925 |
|
0.0921 |
0.0902 |
|
0.0920 |
0.0944 |
USD |
US Dollar |
Panamá and Cuba |
4.8192 |
5.2177 |
|
5.1171 |
5.0490 |
|
5.1736 |
5.3549 |
GTQ |
Quetzal |
Guatemala |
0.6117 |
0.6623 |
|
0.6542 |
0.6547 |
|
0.6603 |
0.6915 |
ARS |
Argentinean Peso |
Argentina |
0.0188 |
0.0295 |
|
0.0240 |
0.0464 |
|
0.0277 |
0.0511 |
BOB |
Bolivian Peso |
Bolivia |
0.6924 |
0.7497 |
|
0.7352 |
0.7254 |
|
0.7433 |
0.7694 |
PYG |
Guarani |
Paraguay |
0.0007 |
0.0007 |
|
0.0007 |
0.0007 |
|
0.0007 |
0.0008 |
UYU |
Uruguayan Peso |
Uruguay |
0.1288 |
0.1302 |
|
0.1311 |
0.1190 |
|
0.1320 |
0.1224 |
CLP |
Chilean Peso |
Chile |
0.0060 |
0.0061 |
|
0.0063 |
0.0061 |
|
0.0062 |
0.0065 |
BBD |
Barbadian Dollar |
Barbados |
2.3757 |
2.5721 |
|
2.5225 |
2.4890 |
|
2.5504 |
2.6397 |
| 4. | USE OF ESTIMATES AND JUDGMENTS |
The preparation of interim financial statements
in compliance with IFRS requires Management to make use of judgments, estimates and assumptions that affect the application of accounting
practices and the reported amounts of assets and liabilities, income and expenses. The estimates and assumptions are based on past experience
and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for decision-making
regarding judgments relating to the carrying amounts of assets and liabilities that are not readily evident from other sources. The actual
results may differ from these estimates.
The estimates and assumptions are reviewed
on a regular basis. Changes in accounting estimates may affect the period during which they are realized, or future periods.
Although each significant accounting policy
reflects judgments, assessments or estimates, the Company believes that the following accounting practices reflect the most critical judgments,
estimates and assumptions that are important to its business operations and the understanding of its results:
(i) predecessor basis of accounting;
(ii) business combinations;
(iii) joint arrangements;
(iv) accounting and financial reporting in hyperinflationary
economies;
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
(v) current and deferred tax;
(vi) leases;
(vii) assets and liabilities recognition related
to extemporaneous tax credits and debits;
(viii) employee benefits;
(ix) share-based payments;
(x) provisions and contingent liabilities, including
tax contingencies;
(xi) measurement of financial instruments, including
derivatives;
(xii) impairment and
(xiii) tax incentives and subsidized loans.
The fair values of acquired identifiable intangibles
with indefinite useful lives are based on an assessment of future cash flow. Impairment analyses of goodwill and intangible assets with
indefinite useful lives are performed at least annually, or whenever a triggering event occurs, to determine whether the carrying value
exceeds the recoverable amount.
The Company uses its judgment to choose between
a variety of methods including the net fair value of expenses approach and option valuation models and makes assumptions about the fair
value of financial instruments mainly based on the market conditions at each balance sheet date.
Actuarial assumptions regarding future events
are used for the calculation of projected pension and other long-term employee benefit expenses and liabilities. These factors include
assumptions regarding interest rates, rates of increase in healthcare costs, rates of future compensation increases, turnover rates, and
life expectancy. Such estimates are reviewed annually by independent actuaries.
The Company is subject to income tax in
numerous jurisdictions. Significant judgment is required to determine the Company’s worldwide provision for income tax. There are
some transactions and calculations for which the ultimate tax determination is uncertain. The Company and some of its subsidiaries are
involved in tax audits, usually in relation to prior years. These audits are ongoing in various jurisdictions as at the balance sheet
date, and, by their nature, can take a considerable time to complete.
To measure the amounts of extemporaneous tax
credits arising from lawsuits, the Company evaluates the documents for the period covered by the lawsuit, and applies the guidelines for
the final decision, applicable legislation or other elements that enable the amount to be estimated with sufficient reliability.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
5.
CASH AND CASH EQUIVALENTS
|
06/30/2023 |
12/31/2022 |
|
|
|
Cash |
103,871 |
280,850 |
Current bank accounts |
5,048,662 |
5,990,271 |
Short-term bank deposits (i) |
6,964,480 |
8,655,314 |
Cash and cash equivalents |
12,117,013 |
14,926,435 |
|
|
|
Bank overdrafts |
(103,948) |
(74,343) |
Cash and cash equivalents less bank overdraft |
12,013,065 |
14,852,092 |
(i) The balance refers mostly to Bank Deposit
Certificates (“CDBs”), of high liquidity, which are readily convertible into known amounts of cash and which are subject to
an insignificant risk of change in value.
The cash and cash equivalents balance include the
amount of R$2,505 million as at June 30, 2023 (R$3,083 million in 2022), which is not freely transferable to the parent company due to
remittance restrictions in Cuba and Argentina.
|
06/30/2023 |
12/31/2022 |
|
|
|
Financial assets at fair value through profit or loss |
313,504 |
454,497 |
Current investment securities |
313,504 |
454,497 |
|
|
|
Investment on debt securities (i) |
246,838 |
219,055 |
Non-current investment securities |
246,838 |
219,055 |
|
|
|
Total |
560,342 |
673,552 |
(i) The balance refers substantially to financial investments
linked to tax incentives that do not have immediate convertibility into a known amount of cash.
|
06/30/2023 |
12/31/2022 |
|
|
|
Finished goods |
4,051,720 |
4,094,014 |
Work in progress |
833,675 |
845,661 |
Raw materials and consumables |
5,958,987 |
6,798,273 |
Spare parts and others |
950,629 |
986,925 |
Prepayments |
368,062 |
358,325 |
Impairment losses |
(108,051) |
(160,173) |
|
12,055,022 |
12,923,025 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The changes in impairment losses on inventory are as follows:
At December 31, 2021 |
(157,774) |
Effects of movements in foreign exchange in the balance sheet |
11,036 |
Provisions |
(108,447) |
Write-off |
126,036 |
At June 30, 2022 |
(129,149) |
|
|
At December 31, 2022 |
(160,173) |
Effects of movements in foreign exchange in the balance sheet |
7,008 |
Provisions |
(124,315) |
Write-off |
169,429 |
At June 30, 2023 |
(108,051) |
| 8. | RECOVERABLE INDIRECT TAXES
|
|
06/30/2023 |
12/31/2022 |
PIS/COFINS exclusion of ICMS (i) |
135,675 |
73,451 |
PIS/COFINS |
306,185 |
242,665 |
ICMS |
482,322 |
542,195 |
IPI |
120,093 |
131,022 |
Other |
164,197 |
55,481 |
Current |
1,208,472 |
1,044,814 |
|
|
|
PIS/COFINS exclusion of ICMS (i) |
6,009,283 |
5,992,800 |
ICMS |
441,466 |
423,158 |
Other |
376,859 |
292,815 |
Non-current |
6,827,608 |
6,708,773 |
|
|
|
Total |
8,036,080 |
7,753,587 |
(i) As detailed in Note 25 – Contingencies,
the Company recognized PIS and COFINS credits arising from the exclusion of ICMS from the calculation basis. The corresponding entry for
recognition is recorded in the item Recoverable PIS/COFINS – exclusion of ICMS, according to the table above.
From the
first quarter of 2023, the nomenclature “Recoverable Taxes” was changed to “Recoverable Indirect Taxes”.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
9.
DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION
Deferred taxes for income tax and social contribution
taxes are calculated on temporary differences between the tax bases of these taxes and the accounting calculations of the Company and
its subsidiaries, which include tax losses. The tax rates in Brazil, which are expected to be applicable upon the realization of the deferred
taxes, are 25% for income tax and 9% for social contribution. For other regions in which the Company operates, the expected nominal rates
are as follows:
Central America and the Caribbean |
from 15% to 27% |
Latin America – South |
from 10% to 35% |
Canada |
26.5% |
Luxembourg |
from 11.7% to 24.94% |
Deferred tax assets are recognized to the extent
that it is probable that future taxable profits are probable, which may be offset against recorded temporary differences at June 30, 2023.
The details of the amount of deferred
income tax and social contribution by type of temporary difference are as follows:
|
06/30/2023 |
|
12/31/2022 |
|
Assets |
Liabilities |
Net |
|
Assets |
Liabilities |
Net |
Investment securities |
7,907 |
- |
7,907 |
|
7,521 |
- |
7,521 |
Intangible |
- |
(1,646,949) |
(1,646,949) |
|
- |
(1,690,219) |
(1,690,219) |
Employee benefits |
791,461 |
- |
791,461 |
|
951,213 |
- |
951,213 |
Trade payables |
2,837,812 |
(2,863) |
2,834,949 |
|
3,232,776 |
(2,884) |
3,229,892 |
Trade receivables |
43,115 |
(27,611) |
15,504 |
|
38,620 |
(3,802) |
34,818 |
Derivatives |
37,722 |
(63,276) |
(25,554) |
|
95,130 |
(44,806) |
50,324 |
Interest-bearing loans and borrowings |
485 |
(569) |
(84) |
|
490 |
(893) |
(403) |
Inventories |
382,236 |
(93,917) |
288,319 |
|
413,856 |
(139,281) |
274,575 |
Property, plant and equipment |
896,263 |
(2,135,977) |
(1,239,714) |
|
899,531 |
(2,177,094) |
(1,277,563) |
Withholding tax on undistributed profits and royalties |
- |
(1,336,479) |
(1,336,479) |
|
- |
(1,877,574) |
(1,877,574) |
Investments in joint ventures |
- |
(421,589) |
(421,589) |
|
- |
(421,589) |
(421,589) |
Interest on shareholders’ equity |
1,676,701 |
- |
1,676,701 |
|
- |
- |
- |
Losses carried forward |
2,939,539 |
- |
2,939,539 |
|
2,660,683 |
- |
2,660,683 |
Provisions |
1,000,980 |
(121,232) |
879,748 |
|
819,288 |
- |
819,288 |
Complement of income tax of foreign subsidiaries due in Brazil |
- |
(37,442) |
(37,442) |
|
- |
- |
- |
Impact of the adoption of IFRS 16 (Leases) |
34,498 |
(17,246) |
17,252 |
|
35,061 |
(11,371) |
23,690 |
ICMS on the assessment bases of PIS/COFINS |
- |
(156,812) |
(156,812) |
|
- |
(168,232) |
(168,232) |
Other items |
280,769 |
(523,541) |
(242,772) |
|
260,861 |
(164,142) |
96,719 |
Gross deferred tax assets/(liabilities) |
10,929,488 |
(6,585,503) |
4,343,985 |
|
9,415,030 |
(6,701,887) |
2,713,143 |
Netting by taxable entity |
(2,859,788) |
2,859,788 |
- |
|
(2,976,195) |
2,976,195 |
- |
Net deferred tax assets/(liabilities) |
8,069,700 |
(3,725,715) |
4,343,985 |
|
6,438,835 |
(3,725,692) |
2,713,143 |
The Company only reclassifies the balances
of deferred income tax and social contribution assets against liabilities to a net presentation basis when the applicable compensation
criteria are met, as determined by the IAS 12 – Income Taxes.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The critical estimates of Ambev’s Management,
as well the main contingent liabilities related to uncertainty about the tax treatment of income, are disclosed in Notes 4 and 25, respectively.
As at June 30, 2023 the deferred tax assets and
liabilities related to combined tax losses which are expected to be utilized or settled using temporary differences, as follows:
|
06/30/2023 |
Deferred taxes not related to tax losses |
to be realized until 12 months |
to be realized after 12 months |
Total |
|
|
|
|
Investment securities |
- |
7,907 |
7,907 |
Intangible |
(1,247) |
(1,645,702) |
(1,646,949) |
Employee benefits |
146,899 |
644,562 |
791,461 |
Trade payables |
(212,979) |
3,047,928 |
2,834,949 |
Trade receivables |
8,204 |
7,300 |
15,504 |
Derivatives |
(30,478) |
4,924 |
(25,554) |
Interest-bearing loans and borrowings |
(327) |
243 |
(84) |
Inventories |
378,043 |
(89,724) |
288,319 |
Property, plant and equipment |
52,174 |
(1,291,888) |
(1,239,714) |
Withholding tax on undistributed profits and royalties |
- |
(1,336,479) |
(1,336,479) |
Investments in joint ventures |
- |
(421,589) |
(421,589) |
Interest on shareholders’ equity |
1,676,701 |
- |
1,676,701 |
Provisions |
576,963 |
302,785 |
879,748 |
Complement of income tax of foreign subsidiaries due in Brazil |
(37,442) |
- |
(37,442) |
Impact of the adoption of IFRS 16 (Leases) |
- |
17,252 |
17,252 |
ICMS on the assessment bases of PIS/COFINS |
- |
(156,812) |
(156,812) |
Other items |
27,198 |
(269,970) |
(242,772) |
Total |
2,583,709 |
(1,179,263) |
1,404,446 |
The majority of tax losses and negative social
contribution bases on which deferred income tax and social contribution were calculated do not have a statute of limitations. The use
of credits related to tax losses is based on the projected future existence of taxable profits, according to the actual figures for prior
years, and the projections of the Company’s business and its subsidiaries in the economies in which they are located, and thus is
in compliance with the applicable fiscal and accounting rules, which in Brazil is limited to 30% of taxable income for the year.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Deferred tax related to tax losses |
06/30/2023 |
2023 |
376,620 |
2024 |
134,594 |
2025 |
101,881 |
2026 |
106,593 |
2027 |
1,042,387 |
2028 to 2030 |
739,534 |
2031 to 2032 (i) |
437,930 |
Total |
2,939,539 |
(i) There is no expectation of realization beyond
a term of ten years.
As of June 30, 2023, besides the tax credits
related to tax losses effectively recognized in the amounts disclosed above, other tax credits related to accumulated tax losses in the
amount of R$725,522 (R$875,267 in 2022) - which are equivalent, in value basis, to R$2,750,720 at June 30, 2023 (R$3,359,497 in December
31, 2022) - were not recorded, since their realization is not probable in currently evaluation.
The net change in deferred income tax and social
contribution is detailed as follows:
At December 31, 2022 |
2,713,143 |
Recognition of actuarial gains/(losses) |
(46) |
Investment hedge – put option granted on subsidiaries |
(101,857) |
Cash flow hedge – gains/(losses) |
295,990 |
Gains/(losses) on translation of other foreign operations |
122,772 |
Recognized in other comprehensive income |
316,859 |
Recognized in the income statement |
1,687,814 |
Changes directly in the balance sheet |
(373,831) |
Recognized in deferred tax |
(382,119) |
Effect of application of IAS 29 (hyperinflation) |
(382,119) |
Recognized in other balance sheet group |
8,288 |
At June 30, 2023 |
4,343,985 |
| 10. | PROPERTY, PLANT AND EQUIPMENT |
|
06/30/2023 |
12/31/2022 |
Property, plant and equipment |
25,892,383 |
26,961,300 |
Right of use assets |
3,392,399 |
3,094,390 |
|
29,284,782 |
30,055,690 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
Land and buildings |
Plant and equipment |
Fixtures and fittings |
Under construction |
Total |
Acquisition cost |
|
|
|
|
|
At December 31, 2021 |
13,539,889 |
37,469,551 |
7,526,730 |
5,404,521 |
63,940,691 |
Effects of movements in foreign exchange in the balance sheet |
(1,075,903) |
(3,378,423) |
(879,479) |
(360,672) |
(5,694,477) |
Effects of application of IAS 29 (hyperinflation) |
870,517 |
2,890,991 |
744,355 |
252,720 |
4,758,583 |
Acquisitions |
11,197 |
1,283,543 |
87,339 |
4,923,571 |
6,305,650 |
Disposals and write-offs |
(24,603) |
(1,531,367) |
(349,763) |
(10) |
(1,905,743) |
Transfers from/(to) other asset categories |
1,173,106 |
3,083,855 |
553,405 |
(5,870,382) |
(1,060,016) |
At December 31, 2022 |
14,494,203 |
39,818,150 |
7,682,587 |
4,349,748 |
66,344,688 |
Effects of movements in foreign exchange in the balance sheet |
(941,152) |
(2,786,624) |
(750,277) |
(144,965) |
(4,623,018) |
Effects of application of IAS 29 (hyperinflation) |
673,463 |
2,367,399 |
601,916 |
96,308 |
3,739,086 |
Acquisitions |
83 |
722,126 |
11,943 |
1,439,389 |
2,173,541 |
Disposals and write-offs |
(64) |
(386,311) |
(55,350) |
- |
(441,725) |
Transfers from/(to) other asset categories |
344,555 |
925,047 |
480,196 |
(2,217,623) |
(467,825) |
Balance as at June 30, 2023 |
14,571,088 |
40,659,787 |
7,971,015 |
3,522,857 |
66,724,747 |
|
|
|
|
|
|
|
Land and buildings |
Plant and equipment |
Fixtures and fittings |
Under construction |
Total |
Depreciation |
|
|
|
|
|
At December 31, 2021 |
(4,449,481) |
(26,585,042) |
(6,242,098) |
- |
(37,276,621) |
Effects of movements in foreign exchange in the balance sheet |
243,770 |
2,311,071 |
767,887 |
- |
3,322,728 |
Effects of application of IAS 29 (hyperinflation) |
(157,793) |
(1,938,440) |
(647,696) |
- |
(2,743,929) |
Depreciation |
(436,447) |
(3,160,997) |
(579,654) |
- |
(4,177,098) |
Disposals and write-offs |
4,526 |
1,515,730 |
335,175 |
- |
1,855,431 |
Transfers from/(to) other asset categories |
57 |
32,721 |
7,341 |
- |
40,119 |
Impairment losses |
(410) |
(403,637) |
29 |
- |
(404,018) |
At December 31, 2022 |
(4,795,778) |
(28,228,594) |
(6,359,016) |
- |
(39,383,388) |
Effects of movements in foreign exchange in the balance sheet |
208,287 |
1,901,547 |
652,307 |
- |
2,762,141 |
Effects of application of IAS 29 (hyperinflation) |
(133,368) |
(1,751,459) |
(516,994) |
- |
(2,401,821) |
Depreciation |
(236,541) |
(1,680,460) |
(272,779) |
- |
(2,189,780) |
Disposals and write-offs |
24 |
414,097 |
47,895 |
- |
462,016 |
Transfers from/(to) other asset categories |
6,149 |
423,785 |
(313,258) |
- |
116,676 |
Impairment losses |
(15) |
(198,165) |
(28) |
- |
(198,208) |
At June 30, 2023 |
(4,951,242) |
(29,119,249) |
(6,761,873) |
- |
(40,832,364) |
|
|
|
|
|
|
Carrying amount: |
|
|
|
|
|
At December 31, 2022 |
9,698,425 |
11,589,556 |
1,323,571 |
4,349,748 |
26,961,300 |
At June 30, 2023 |
9,619,846 |
11,540,538 |
1,209,142 |
3,522,857 |
25,892,383 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Right-of-use assets:
|
|
|
|
|
|
Buildings |
Machinery, equipment and vehicles |
Others |
Total |
Acquisition cost |
|
|
|
|
At December 31, 2021 |
2,307,181 |
2,023,890 |
111,705 |
4,442,776 |
Effects of movements in foreign exchange in the balance sheet |
(111,567) |
(11,725) |
(5,411) |
(128,703) |
Additions |
627,999 |
915,042 |
94,670 |
1,637,711 |
Write-offs |
(11,221) |
(252,542) |
- |
(263,763) |
Transfers from/(to) other asset categories |
(114,039) |
21,695 |
(7,816) |
(100,160) |
At December 31, 2022 |
2,698,353 |
2,696,360 |
193,148 |
5,587,861 |
Effects of movements in foreign exchange in the balance sheet |
(77,621) |
(17,310) |
(12,390) |
(107,321) |
Additions |
258,692 |
912,806 |
18,264 |
1,189,762 |
Write-offs |
(54,649) |
(376,909) |
- |
(431,558) |
Transfers from/(to) other asset categories |
22,339 |
10,305 |
18,909 |
51,553 |
At June 30, 2023 |
2,847,114 |
3,225,252 |
217,931 |
6,290,297 |
|
|
|
|
|
|
Buildings |
Machinery, equipment and vehicles |
Others |
Total |
Depreciation |
|
|
|
|
At December 31, 2021 |
(1,101,199) |
(724,183) |
(57,203) |
(1,882,585) |
Effects of movements in foreign exchange in the balance sheet |
47,332 |
6,040 |
2,915 |
56,287 |
Depreciation |
(391,625) |
(415,310) |
(38,550) |
(845,485) |
Write-offs |
20,918 |
58,011 |
- |
78,929 |
Transfers (from)/to other asset categories |
77,057 |
11,799 |
10,527 |
99,383 |
At December 31, 2022 |
(1,347,517) |
(1,063,643) |
(82,311) |
(2,493,471) |
Effects of movements in foreign exchange in the balance sheet |
34,512 |
6,490 |
3,115 |
44,117 |
Depreciation |
(233,450) |
(288,828) |
(28,473) |
(550,751) |
Write-offs |
16,391 |
104,638 |
- |
121,029 |
Transfers (from)/to other asset categories |
(12,809) |
(7,493) |
1,480 |
(18,822) |
At June 30, 2023 |
(1,542,873) |
(1,248,836) |
(106,189) |
(2,897,898) |
|
|
|
|
|
Carrying amount: |
|
|
|
|
At December 31, 2022 |
1,350,836 |
1,632,717 |
110,837 |
3,094,390 |
At June 30, 2023 |
1,304,241 |
1,976,416 |
111,742 |
3,392,399 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Term contracts and discount rate
The Company estimated discount rates, based on
risk-free interest rates observed in the Brazilian market, for the terms of its contracts, adjusted to their reality (credit spread).
Spreads were obtained with financial institutions. The following table shows the rates applied:
|
Rate % |
Lease Term |
06/30/2023 |
12/31/2022 |
2022 - 2026 |
11.06% |
9.46% |
2027 - 2031 |
10.89% |
10.27% |
2032 - 2036 |
16.29% |
15.16% |
|
06/30/2023 |
12/31/2022 |
|
|
|
Balance at the end of the previous year |
40,594,038 |
42,411,260 |
Effects of movements in foreign exchange in the balance sheet |
(2,460,791) |
(3,510,494) |
Effect of application of IAS 29 (hyperinflation) |
1,186,590 |
1,709,880 |
Acquisitions, (write-offs) and disposal through business combinations |
- |
(16,608) |
Balance at the end of the year |
39,319,837 |
40,594,038 |
The carrying amount of goodwill was allocated
to the different cash-generating units as follows:
|
Functional currency |
06/30/2023 |
12/31/2022 |
|
|
|
|
Brazil |
BRL |
17,702,415 |
17,702,415 |
Goodwill |
|
102,945,048 |
102,945,048 |
Non-controlling transactions (i) |
|
(85,242,633) |
(85,242,633) |
|
|
|
|
CAC: |
|
|
|
Dominican Republic |
DOP |
3,966,208 |
4,231,606 |
Panama |
PAB |
1,675,230 |
1,813,772 |
|
|
|
|
Latin America - South: |
|
|
|
Argentina |
ARS |
3,393,194 |
3,462,984 |
Bolivia |
BOB |
1,704,650 |
1,845,619 |
Chile |
CLP |
52,526 |
53,094 |
Paraguay |
PYG |
890,533 |
953,771 |
Uruguay |
UYU |
191,061 |
193,108 |
|
|
|
|
Canada |
CAD |
9,744,020 |
10,337,669 |
|
|
39,319,837 |
40,594,038 |
(i) This refers to the shareholding exchange transaction
in 2013 as a result of the adoption of the predecessor basis of accounting.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Impairment testing
The impairment test is updated annually
considering the most accurate estimates calculated by Management. For the second year of the model, we used the assumptions that were
already considered for the projection of the other years, considering that they are still valid. There are no indications of impairment
until June 30, 2023.
|
06/30/2023 |
12/31/2022 |
|
|
|
Trade payables |
17,470,730 |
23,498,099 |
Related parties (Note 26) |
1,109,233 |
830,430 |
Current |
18,579,963 |
24,328,529 |
|
|
|
Trade payables |
140,754 |
165,871 |
Related parties (Note 26) |
299,754 |
343,556 |
Non-current |
440,508 |
509,427 |
|
|
|
Total |
19,020,471 |
24,837,956 |
The Company recognizes its third party and related
party vendor obligations in trade payables line. When relevant, vendor trade payables are adjusted at present value. Therefore, the present
value adjustment recorded for trade payables, at June 30, 2023 is R$289 million (R$367 million at December 31, 2022).
The controlled companies in Argentina, Chile,
Paraguay and Panama have transactions with discounted trade bills with endorsement (trade payables securitization) with vendors in the
amount of R$153.1 million at June 30, 2023 (R$219.3 million at December 31, 2022). In general, the abovementioned discounted trade bills
transactions occur by legal impositions existing in these jurisdictions. These transactions maintain commercial characteristics since
there are no changes in previously established conditions and its vendor’s choice to carry out the anticipation of its trade receivables
with the Company.
| 13. | INTEREST-BEARING LOANS AND BORROWINGS |
|
06/30/2023 |
12/31/2022 |
|
|
|
Secured bank loans |
31,277 |
54,536 |
Other unsecured loans |
136,243 |
144,424 |
Lease liabilities |
1,152,906 |
783,609 |
Current liabilities |
1,320,426 |
982,569 |
|
|
|
Secured bank loans |
111,744 |
126,240 |
Other unsecured loans |
323,031 |
328,116 |
Lease liabilities |
2,237,082 |
2,333,781 |
Non-current liabilities |
2,671,857 |
2,788,137 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Additional information regarding the exposure
of the Company to interest rate risk, foreign currency risk and debt repayment schedule risk is disclosed in Note 23 – Financial
instruments and risks.
Contractual clauses (Covenants)
As June 30, 2023, as well as at December
31, 2022, the Company’s loans had equal rights to payment without subordination clauses. For the credit lines due to FINAME contracted
by the Company with Banco Nacional de Desenvolvimento Econômico e Social (“BNDES”), the assets acquired using the credit
granted were placed as collateral. Other loans and financing contracted by the Company require various guarantees as collateral, such
as warranty or real estate, or are unsecured. Most loan contracts contain contractual covenants, including: financial covenants, including
actions that can reduce the ability to pay the loans; maintenance of the Company's assets, purposing to assure that all remain under usage
condition; restrictions on acquisitions, mergers, sales or disposals of its assets; disclosure of financial statements and the balance
sheet; no prohibitions related to new guarantees for loans contracted, except if: (i) expressly authorized under the agreement; (ii) new
loans contracted from financial institutions linked to the Brazilian government including BNDES or foreign governments; or foreign governments,
multilateral financial institutions (e.g. the World Bank) or in jurisdictions in which the Company operates.
Additionally, all agreements with BNDES
are subject to certain “provisions applicable to agreements entered into with BNDES” (“Provisions”). Such Provisions
require the borrower to obtain prior consent from BNDES if they, for instance, wish to: (i) raise new loans (except for the loans described
in the Provisions); (ii) give preference and/or priority to other debts; and/or (iii) dispose of or encumber any items of their fixed
assets (except as provided for within the Provisions).
These clauses are applicable from the date of
execution and effectiveness of each contract to the extent that the events mentioned in the contract occur. Depending on the materiality
of each event and its potential adverse effects on the Company and/or its subsidiaries or the rights of its creditors, contractual penalties
may be applied, including the early maturity of the respective contract. In certain contracts, in the event of occurrence of any of the
events set out in the restrictive clauses, the Company may be granted a grace period to resolve any contractual defaults, in order to
avoid any penalties resulting from the breach of its obligations.
Lastly, regarding the tax incentives on financing
or subsidized loans, these are subject to the fulfillment of several commitments according to the legislation or contracts upon which
those incentives are based on, such as (i) maintenance of jobs or job creation; (ii) realization of investments; (iii) increase in production
capacity; (iv) commitment to collect ICMS; (v)
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
maintenance of fiscal good standing; among others,
obligations that refer to facts under the Company’s control. These commitments are applicable as from the signature date of the
respective contracts related to fiscal benefits.
As at June 30, 2023, as well as at December 31,
2022, the Company was in compliance with all of its contractual obligations for its loans and financing.
(a) Provision changes
|
Balance as at December 31, 2021 |
Effect of changes in foreign exchange rates |
Additions |
Provisions used |
Provisions reversed |
Balance as at December 31, 2022 |
|
|
|
|
|
|
|
Provision for disputes and litigation |
|
|
|
|
|
|
Taxes on sales |
218,553 |
- |
157,621 |
(85,842) |
(43,384) |
246,948 |
Labor |
124,188 |
(4,605) |
194,228 |
(161,975) |
(19,735) |
132,101 |
Civil |
252,954 |
(17,537) |
312,731 |
(196,613) |
(15,601) |
335,934 |
Other taxes |
162,989 |
(8,097) |
60,145 |
(7,181) |
(14,927) |
192,929 |
Total provision for disputes and litigation |
758,684 |
(30,239) |
724,725 |
(451,611) |
(93,647) |
907,912 |
|
|
|
|
|
|
|
Restructuring |
17,406 |
(2,015) |
- |
(3,594) |
- |
11,797 |
|
|
|
|
|
|
|
Total provisions |
776,090 |
(32,254) |
724,725 |
(455,205) |
(93,647) |
919,709 |
|
Balance as at December 31, 2022 |
Effect of changes in foreign exchange rates |
Additions |
Provisions used |
Provisions reversed |
Balance as at June 30, 2023 |
|
|
|
|
|
|
|
Provision for disputes and litigation |
|
|
|
|
|
|
Taxes on sales |
246,948 |
- |
22,968 |
(7,215) |
(6,953) |
255,748 |
Labor |
132,101 |
(2,646) |
109,114 |
(70,389) |
(9,419) |
158,761 |
Civil |
335,934 |
(11,157) |
55,114 |
(4,165) |
(17,083) |
358,643 |
Other taxes |
192,929 |
(5,836) |
4,858 |
(3,881) |
(15,223) |
172,847 |
Total provision for disputes and litigation |
907,912 |
(19,639) |
192,054 |
(85,650) |
(48,678) |
945,999 |
|
|
|
|
|
|
|
Restructuring |
11,797 |
(368) |
- |
(8,617) |
- |
2,812 |
|
|
|
|
|
|
|
Total provisions |
919,709 |
(20,007) |
192,054 |
(94,267) |
(48,678) |
948,811 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
06/30/2023 |
|
12/31/2022 |
|
Current |
Non-current |
Total |
|
Current |
Non-current |
Total |
|
|
|
|
|
|
|
|
Provision for disputes and litigation |
|
|
|
|
|
|
|
Taxes on sales |
106,772 |
148,976 |
255,748 |
|
53,103 |
193,845 |
246,948 |
Labor |
58,041 |
100,720 |
158,761 |
|
27,210 |
104,891 |
132,101 |
Civil |
282,271 |
76,372 |
358,643 |
|
72,891 |
263,043 |
335,934 |
Other taxes |
29,771 |
143,076 |
172,847 |
|
22,925 |
170,004 |
192,929 |
Total provision for disputes and litigation |
476,855 |
469,144 |
945,999 |
|
176,129 |
731,783 |
907,912 |
|
|
|
|
|
|
|
|
Restructuring |
2,812 |
- |
2,812 |
|
4,598 |
7,199 |
11,797 |
|
|
|
|
|
|
|
|
Total provisions |
479,667 |
469,144 |
948,811 |
|
180,727 |
738,982 |
919,709 |
The expected settlement of provisions
was based on management’s best estimate at the balance sheet date.
(c) Main lawsuits with a probable likelihood
of loss:
(c.1) Sales taxes
In Brazil, the Company and its subsidiaries are
parties to various administrative and judicial proceedings related to ICMS, IPI, PIS and COFINS taxes, considered as probable likelihood
of loss. Such proceedings include, among others, tax offsetting, appropriation of tax credits and alleged insufficient payment of the
respective taxes.
(c.2) Labor
The Company and its subsidiaries are parties
to labor proceedings with former employees or former employees of service providers. The main issues involve overtime and related effects
and respective charges.
(c.3) Civil
The Company and its subsidiaries are involved
in civil lawsuits considered as representing a probable likelihood of loss. The most relevant portion of these lawsuits refers to former
distributors, mainly in Brazil, mostly claiming damages resulting from the termination of their contracts.
The processes representing possible likelihood of
loss are disclosed in Note 25 – Contingencies.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
15.
CHANGES IN EQUITY
(a) Capital stock
|
06/30/2023 |
|
12/31/2022 |
|
Thousands of common shares |
Thousands of Real |
|
Thousands of common shares |
Thousands of Real |
Beginning balance |
15,750,217 |
58,130,517 |
|
15,744,452 |
58,042,464 |
Capital increase (i) |
3,616 |
47,412 |
|
5,765 |
88,053 |
Final
balance (ii) |
15,753,833 |
58,177,929 |
|
15,750,217 |
58,130,517 |
(i) Capital increase related to the issue of shares.
(ii) The capital stock is fully subscribed and paid up.
(b) Capital reserves
|
Capital Reserves |
|
|
Treasury shares |
Share Premium |
Other capital reserves |
Share-based Payments |
Total |
At January 1, 2022 |
(1,037,711) |
53,662,811 |
700,898 |
1,861,190 |
55,187,188 |
Capital increase |
- |
- |
- |
(64,289) |
(64,289) |
Purchases of shares, results from treasury shares and share-based payments |
(37,700) |
- |
- |
90,533 |
52,833 |
At June 30, 2022 |
(1,075,411) |
53,662,811 |
700,898 |
1,887,434 |
55,175,732 |
|
Capital Reserves |
|
|
Treasury shares |
Share Premium |
Other capital reserves |
Share-based Payments |
Total |
At January 1, 2023 |
(1,073,506) |
53,662,811 |
700,898 |
2,049,491 |
55,339,694 |
Capital increase |
- |
- |
- |
(32,869) |
(32,869) |
Purchases of shares, results from treasury shares and share-based payments |
18,154 |
- |
- |
150,078 |
168,232 |
At June 30, 2023 |
(1,055,352) |
53,662,811 |
700,898 |
2,166,700 |
55,475,057 |
(b.1) Purchase of shares and result of treasury shares
Treasury shares represent the Company’s
own issued shares reacquired by the Company, and the results of treasury shares related to gains and losses on share-based payment transactions
and others.
The changes in treasury shares are as follows:
|
Acquisition/realization of shares |
|
Result of Treasury Shares |
|
Total Treasury Shares |
|
Thousands of shares |
|
Thousands of Brazilian Reais |
|
Thousands of shares |
|
Thousands of Brazilian Reais |
At January 1, 2022 |
5,783 |
|
(98,140) |
|
(939,571) |
|
(1,037,711) |
Changes during the year |
2,820 |
|
(35,634) |
|
(2,066) |
|
(37,700) |
At June 30, 2022 |
8,603 |
|
(133,774) |
|
(941,637) |
|
(1,075,411) |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
Acquisition/realization of shares |
|
Result of Treasury Shares |
|
Total Treasury Shares |
|
Thousands of shares |
|
Thousands of Brazilian Reais |
|
Thousands of shares |
|
Thousands of Brazilian Reais |
At January 1, 2023 |
8,482 |
|
(131,877) |
|
(941,629) |
|
(1,073,506) |
Changes during the year |
(1,338) |
|
21,540 |
|
(3,386) |
|
18,154 |
At June 30, 2023 |
7,144 |
|
(110,337) |
|
(945,015) |
|
(1,055,352) |
(b.2) Share premium
The share premium refers to the difference
between the subscription price that the shareholders paid for the shares and their nominal value. Since this is a capital reserve, it
can only be used to increase capital, offset losses, or redeem, reimburse or repurchase shares.
(b.3) Share-based payment
Different share-based payment programs
and stock purchase option plans allow the senior management from Ambev’s economic group to acquire shares in the Company.
The share-based payment reserve recorded a charge
of R$181,910 on June 30, 2023 (R$150,980 at June 30, 2022) (Note 22 – Share-based payments).
(c) Net income reserves
|
Net income reserves |
|
|
Investments reserve |
Legal reserve |
Fiscal incentive |
Total |
At January 1, 2022 |
18,359,259 |
4,456 |
12,827,925 |
31,191,640 |
At June 30, 2022 |
18,359,259 |
4,456 |
12,827,925 |
31,191,640 |
|
Net income reserves |
|
|
Investments reserve |
Legal reserve |
Fiscal incentive |
Total |
At January 1, 2023 |
22,055,901 |
4,456 |
14,846,543 |
36,906,900 |
At June 30, 2023 |
22,055,901 |
4,456 |
14,846,543 |
36,906,900 |
There was no change in net income reserves in the second quarter of
2022 and 2023.
(c.1) Investments reserve
From the net income after applicable deductions,
there will be a target allocation of no more than 60% of the adjusted net profit to the investment reserve, to be used to support future
investments, as defined in the Company’s bylaws. This reserve cannot exceed 80% of capital stock. If this limit is exceeded, the
General Meeting shall deliberate about the distribution of the amount to shareholders or capital increase.
(c.2) Legal reserve
From the net income, 5% will be applied
before any other allocation to the legal reserve, which cannot exceed 20% of the capital stock. The Company is not required to supplement
the legal reserve for the year when the balance of
this reserve, plus the amount of the capital reserves, exceeds 30% of the capital stock.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
(c.3) Tax incentives
The Company recognizes in its equity, in the
net income reserves line, the fiscal incentives regarding government subsidies at the respective fiscal year.
In general, these incentives are related to industrial
development programs to generate employment, promote regional decentralization, and complement and diversify the industrial base of the
states. In these states, the grace periods and use and reductions are set out according to the legislation upon which those incentives
are based on, depending on their nature, when conditions for obtaining these grants exist, they are under Company’s control. The
treatment due to the incentives comply with current federal, state and municipal legislations, specially with Complementary Federal Law
160/2017 and by Convênio CONFAZ 190/2017, as well as Federal Law 12,973/2014. State fiscal incentives related to sales taxes
are recognized as government subsidies for investments, aligned with the STJ interpretation manifested in the judgment ERESP nº 1,517,492/PR,
as of the judgment of subject nº 1,182.
The portion of income for the period related
to tax incentives, which will be allocated to the profit reserve at the end of the fiscal year and therefore was not being used as a basis
for dividend distribution, was composed of the following:
|
06/30/2023 |
12/31/2022 |
ICMS (Brazilian state value-added tax) |
1,404,170 |
1,093,627 |
Income tax |
47,678 |
101,960 |
|
1,451,848 |
1,195,587 |
(c.4) Interest on shareholders’
equity/dividends
Brazilian companies are permitted to distribute
the interest attributed to shareholders’ equity calculated based on the long-term interest rate (“TJLP”), with such
interest being tax-deductible, in accordance with the applicable law and, when distributed, may be considered part of the minimum mandatory
dividends.
As determined by its by-laws, the Company
is required to distribute to its shareholders, as a minimum mandatory dividend in respect of each fiscal year ending December 31, an amount
of not less than 40% of its net income determined under Brazilian law, adjusted in accordance with the applicable law, unless the payment
of such amount would be incompatible with Ambev’s financial situation. The minimum mandatory dividend includes amounts paid as interest
on shareholders’ equity.
There was no payment of dividends or interest
on shareholders’ equity by the Company in the six-month periods ended June 30, 2022 and June 30, 2023.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
(d) Carrying value adjustments
|
Carrying value adjustments |
|
|
Translation reserves |
Cash flow hedge |
Actuarial gains/ (losses) |
Put option granted on subsidiary |
Gains/(losses) of non-controlling interest’s share |
Business combination |
Accounting adjustments for transactions between shareholders |
Total |
At January 1, 2022 |
13,526,157 |
1,225,253 |
(1,131,476) |
(6,666) |
(121,599) |
156,091 |
(75,426,021) |
(61,778,261) |
Comprehensive income: |
|
|
|
|
|
|
|
|
Gains/(losses) on the translation of foreign operations |
(3,936,782) |
- |
- |
- |
- |
- |
- |
(3,936,782) |
Cash flow hedges |
- |
(638,316) |
- |
- |
- |
- |
- |
(638,316) |
Actuarial gains/(losses) |
- |
- |
1,517 |
- |
- |
- |
- |
1,517 |
Total comprehensive income |
(3,936,782) |
(638,316) |
1,517 |
- |
- |
- |
- |
(4,573,581) |
Gains/(losses) of controlling interest |
- |
- |
- |
- |
(2,736) |
- |
- |
(2,736) |
At June 30, 2022 |
9,589,375 |
586,937 |
(1,129,959) |
(6,666) |
(124,335) |
156,091 |
(75,426,021) |
(66,354,578) |
|
Carrying value adjustments |
|
|
Translation reserves |
Cash flow hedge |
Actuarial gains/ (losses) |
Put option granted on subsidiary |
Gains/(losses) of non-controlling interest’s share |
Business combination |
Accounting adjustments for transactions between shareholders |
Total |
At January 1, 2023 |
6,753,983 |
908,521 |
(664,985) |
(6,666) |
(130,578) |
156,091 |
(75,437,844) |
(68,421,478) |
Comprehensive income: |
|
|
|
|
|
|
|
|
Gains/(losses) on the translation of foreign operations |
(5,016,193) |
- |
- |
- |
- |
- |
- |
(5,016,193) |
Cash flow hedges |
- |
(785,019) |
- |
- |
- |
- |
- |
(785,019) |
Actuarial gains/(losses) |
- |
- |
4,377 |
- |
- |
- |
- |
4,377 |
Total comprehensive income |
(5,016,193) |
(785,019) |
4,377 |
- |
- |
- |
- |
(5,796,835) |
Options granted on subsidiaries |
- |
- |
- |
4,700 |
- |
- |
- |
4,700 |
Gains/(losses) of controlling interest |
- |
- |
- |
- |
(44) |
- |
- |
(44) |
Tax on deemed dividends |
- |
- |
- |
- |
(4,029) |
- |
- |
(4,029) |
At June 30, 2023 |
1,737,790 |
123,502 |
(660,608) |
(1,966) |
(134,651) |
156,091 |
(75,437,844) |
(74,217,686) |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
(d.1) Translation reserves
The translation reserves comprise all
foreign currency exchange differences arising from the translation of the financial statements with a functional currency different to
the Real.
The translation reserves also comprise the portion
of the gain or loss on the foreign currency liabilities and on the derivative financial instruments determined to be effective net investment
hedges.
(d.2) Cash flow hedge reserves
The hedging reserves represent the effective
portion of the cumulative net change in the fair value of cash flow hedges to the extent that the hedged risk has not yet impacted profit
or loss (for additional information, see Note 23 – Financial instruments and risks).
(d.3) Actuarial gains and losses
Actuarial gains and losses include expectations
regarding future pension plan obligations. Consequently, the results of actuarial gains and losses are recognized on a timely basis considering
the best estimates available to Management. Accordingly, the Company recognizes the results of these estimated actuarial gains and losses,
on a monthly basis, based on the expectations presented in the independent actuarial report.
(d.4) Accounting
adjustments for transactions between shareholders
As determined by IFRS 10, any difference between
the amount paid (fair value) for the acquisition of a non-controlling interest and the carrying amount of such non-controlling interest
shall be recognized directly in the controlling shareholders’ equity. The acquisition of the non-controlling interest related to
Companhia de Bebidas das Américas (“Former Ambev”), and the abovementioned adjustment was recognized in carrying value
adjustments when applicable.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| (a) | Reportable segments six-month–period ended in: |
|
Brazil |
CAC (i) |
Latin America – South (ii) |
Canada |
Consolidated |
|
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
21,412,744 |
19,050,551 |
4,779,140 |
4,506,717 |
8,397,960 |
8,051,612 |
4,840,013 |
4,819,267 |
39,429,857 |
36,428,147 |
Cost of sales |
(11,270,571) |
(10,364,678) |
(2,376,802) |
(2,322,919) |
(4,048,802) |
(4,090,924) |
(2,071,118) |
(2,010,219) |
(19,767,293) |
(18,788,740) |
Gross profit |
10,142,173 |
8,685,873 |
2,402,338 |
2,183,798 |
4,349,158 |
3,960,688 |
2,768,895 |
2,809,048 |
19,662,564 |
17,639,407 |
Distribution expenses |
(3,081,399) |
(2,721,701) |
(466,150) |
(454,647) |
(1,099,929) |
(1,020,317) |
(950,923) |
(947,329) |
(5,598,401) |
(5,143,994) |
Sales and marketing expenses |
(2,156,816) |
(1,825,768) |
(355,068) |
(279,920) |
(757,137) |
(727,030) |
(562,648) |
(560,140) |
(3,831,669) |
(3,392,858) |
Administrative expenses |
(1,677,789) |
(1,561,228) |
(216,404) |
(129,335) |
(429,125) |
(410,923) |
(297,838) |
(366,752) |
(2,621,156) |
(2,468,238) |
Other operating income/(expenses) |
822,339 |
1,549,149 |
4,458 |
34,910 |
37,951 |
33,874 |
12,765 |
8,220 |
877,513 |
1,626,153 |
Exceptional items |
(121,888) |
(19,263) |
(14,164) |
(8,648) |
(15,253) |
(30,538) |
- |
- |
(151,305) |
(58,449) |
Income from operations |
3,926,620 |
4,107,062 |
1,355,010 |
1,346,158 |
2,085,665 |
1,805,754 |
970,251 |
943,047 |
8,337,546 |
8,202,021 |
Net finance costs |
(1,312,168) |
(217,710) |
(76,298) |
13,090 |
(610,256) |
(814,376) |
(72,624) |
(73,179) |
(2,071,346) |
(1,092,175) |
Share of results of joint ventures |
(4,820) |
(4,827) |
1,119 |
(934) |
- |
- |
(12,902) |
151 |
(16,603) |
(5,610) |
Income before income tax |
2,609,632 |
3,884,525 |
1,279,831 |
1,358,314 |
1,475,409 |
991,378 |
884,725 |
870,019 |
6,249,597 |
7,104,236 |
Income tax expense |
1,401,942 |
595,527 |
(359,790) |
(423,410) |
(490,571) |
(367,382) |
(384,169) |
(316,085) |
167,412 |
(511,350) |
Net income |
4,011,574 |
4,480,052 |
920,041 |
934,904 |
984,838 |
623,996 |
500,556 |
553,934 |
6,417,009 |
6,592,886 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
5,883,804 |
5,685,192 |
1,757,591 |
1,682,455 |
2,692,522 |
2,377,774 |
1,217,782 |
1,251,568 |
11,551,699 |
10,996,989 |
Depreciation, amortization and impairment |
(1,962,004) |
(1,582,957) |
(401,462) |
(337,231) |
(606,857) |
(572,020) |
(260,433) |
(308,370) |
(3,230,756) |
(2,800,578) |
Net finance costs |
(1,312,168) |
(217,710) |
(76,298) |
13,090 |
(610,256) |
(814,376) |
(72,624) |
(73,179) |
(2,071,346) |
(1,092,175) |
Income tax expense |
1,401,942 |
595,527 |
(359,790) |
(423,410) |
(490,571) |
(367,382) |
(384,169) |
(316,085) |
167,412 |
(511,350) |
Net income |
4,011,574 |
4,480,052 |
920,041 |
934,904 |
984,838 |
623,996 |
500,556 |
553,934 |
6,417,009 |
6,592,886 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin as a % |
27.5% |
29.8% |
36.8% |
37.3% |
32.1% |
29.5% |
25.2% |
26.0% |
29.3% |
30.2% |
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment |
1,619,067 |
1,688,895 |
270,991 |
438,729 |
423,401 |
408,914 |
135,236 |
105,089 |
2,448,695 |
2,641,627 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
(continued)
|
Brazil |
CAC (i) |
Latin America – South (ii) |
Canada |
Consolidated |
|
06/30/2023 |
12/31/2022 |
06/30/2023 |
12/31/2022 |
06/30/2023 |
12/31/2022 |
06/30/2023 |
12/31/2022 |
06/30/2023 |
12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
57,244,433 |
57,353,828 |
14,070,783 |
15,385,644 |
20,560,944 |
22,044,529 |
15,786,450 |
16,093,315 |
107,662,610 |
110,877,316 |
Intersegment elimination |
|
|
|
|
|
|
|
|
(2,442,940) |
(2,533,082) |
Non-segmented assets |
|
|
|
|
|
|
|
|
28,074,745 |
29,613,849 |
Total assets |
|
|
|
|
|
|
|
|
133,294,415 |
137,958,083 |
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities |
23,352,157 |
29,153,247 |
4,301,395 |
5,097,957 |
5,001,790 |
6,843,640 |
4,402,217 |
5,053,663 |
37,057,559 |
46,148,507 |
Intersegment elimination |
|
|
|
|
|
|
|
|
(2,442,936) |
(2,534,093) |
Non-segmented liabilities |
|
|
|
|
|
|
|
|
98,679,792 |
94,343,669 |
Total liabilities |
|
|
|
|
|
|
|
|
133,294,415 |
137,958,083 |
(i) CAC: includes the Dominican Republic, Panama, Guatemala,
Cuba, Barbados, Saint Vincent, Dominica, Nicaragua, Honduras and Antigua.
(ii) Latin America – South: includes operations
in Argentina, Bolivia, Chile, Paraguay and Uruguay.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| (b) | Reportable segments – three-month periods ended in: |
|
Brazil |
CAC (i) |
Latin America – South (ii) |
Canada |
Consolidated |
|
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
10,366,028 |
9,452,346 |
2,473,541 |
2,223,859 |
3,266,016 |
3,449,016 |
2,792,529 |
2,863,774 |
18,898,114 |
17,988,995 |
Cost of sales |
(5,478,287) |
(5,266,615) |
(1,252,838) |
(1,157,144) |
(1,715,925) |
(1,754,798) |
(1,188,559) |
(1,195,697) |
(9,635,609) |
(9,374,254) |
Gross profit |
4,887,741 |
4,185,731 |
1,220,703 |
1,066,715 |
1,550,091 |
1,694,218 |
1,603,970 |
1,668,077 |
9,262,505 |
8,614,741 |
Distribution expenses |
(1,507,482) |
(1,336,809) |
(249,343) |
(261,029) |
(449,563) |
(494,646) |
(475,317) |
(522,491) |
(2,681,705) |
(2,614,975) |
Sales and marketing expenses |
(1,243,599) |
(1,058,889) |
(178,201) |
(136,859) |
(377,746) |
(383,150) |
(290,823) |
(296,984) |
(2,090,369) |
(1,875,882) |
Administrative expenses |
(855,249) |
(806,332) |
(108,032) |
(71,810) |
(212,493) |
(212,291) |
(139,830) |
(204,369) |
(1,315,604) |
(1,294,802) |
Other operating income/(expenses) |
375,735 |
1,212,356 |
(6,750) |
10,785 |
21,420 |
10,946 |
6,032 |
5,344 |
396,437 |
1,239,431 |
Exceptional items |
(103,941) |
(6,054) |
(11,937) |
(4,284) |
(7,538) |
(20,885) |
- |
- |
(123,416) |
(31,223) |
Income from operations |
1,553,205 |
2,190,003 |
666,440 |
603,518 |
524,171 |
594,192 |
704,032 |
649,577 |
3,447,848 |
4,037,290 |
Net finance costs |
(600,781) |
82,934 |
(68,159) |
25,833 |
(370,662) |
(547,563) |
(33,882) |
(56,666) |
(1,073,484) |
(495,462) |
Share of results of joint ventures |
(2,642) |
(2,435) |
63 |
(771) |
- |
- |
148 |
- |
(2,431) |
(3,206) |
Income before income tax |
949,782 |
2,270,502 |
598,344 |
628,580 |
153,509 |
46,629 |
670,298 |
592,911 |
2,371,933 |
3,538,622 |
Income tax expense |
732,390 |
(42,141) |
(151,227) |
(188,765) |
(94,400) |
(43,770) |
(260,936) |
(199,898) |
225,827 |
(474,574) |
Net income |
1,682,172 |
2,228,361 |
447,117 |
439,815 |
59,109 |
2,859 |
409,362 |
393,013 |
2,597,760 |
3,064,048 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
2,572,480 |
2,991,072 |
908,312 |
794,449 |
830,340 |
883,722 |
838,204 |
834,456 |
5,149,336 |
5,503,699 |
Depreciation, amortization and impairment |
(1,021,917) |
(803,504) |
(241,809) |
(191,702) |
(306,169) |
(289,530) |
(134,024) |
(184,879) |
(1,703,919) |
(1,469,615) |
Net finance costs |
(600,781) |
82,934 |
(68,159) |
25,833 |
(370,662) |
(547,563) |
(33,882) |
(56,666) |
(1,073,484) |
(495,462) |
Income tax expense |
732,390 |
(42,141) |
(151,227) |
(188,765) |
(94,400) |
(43,770) |
(260,936) |
(199,898) |
225,827 |
(474,574) |
Net income |
1,682,172 |
2,228,361 |
447,117 |
439,815 |
59,109 |
2,859 |
409,362 |
393,013 |
2,597,760 |
3,064,048 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin as a % |
24.8% |
31.6% |
36.7% |
35.7% |
25.4% |
25.6% |
30.0% |
29.1% |
27.2% |
30.6% |
(i) CAC: includes the Dominican Republic, Panama, Guatemala,
Cuba, Barbados, Saint Vincent, Dominica, Nicaragua, Honduras and Antigua.
(ii) Latin America – South: includes operations
in Argentina, Bolivia, Chile, Paraguay and Uruguay.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
(c)
Additional information – by
business unit:
|
Six-month period ended: |
|
Three-month period ended: |
|
Brazil |
|
Brazil |
|
Beer |
Soft drinks and
Non-alcoholic and
non-carbonated |
Total |
|
Beer |
Soft drinks and
Non-alcoholic and
non-carbonated |
Total |
|
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
06/30/2023 |
06/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
17,980,803 |
16,013,087 |
3,431,941 |
3,037,464 |
21,412,744 |
19,050,551 |
|
8,710,651 |
7,912,900 |
1,655,377 |
1,539,446 |
10,366,028 |
9,452,346 |
Cost of sales |
(9,332,855) |
(8,511,622) |
(1,937,716) |
(1,853,056) |
(11,270,571) |
(10,364,678) |
|
(4,541,364) |
(4,319,455) |
(936,923) |
(947,160) |
(5,478,287) |
(5,266,615) |
Gross profit |
8,647,948 |
7,501,465 |
1,494,225 |
1,184,408 |
10,142,173 |
8,685,873 |
|
4,169,287 |
3,593,445 |
718,454 |
592,286 |
4,887,741 |
4,185,731 |
Distribution expenses |
(2,488,770) |
(2,232,799) |
(592,629) |
(488,902) |
(3,081,399) |
(2,721,701) |
|
(1,223,347) |
(1,090,256) |
(284,135) |
(246,553) |
(1,507,482) |
(1,336,809) |
Sales and marketing expenses |
(1,913,535) |
(1,661,855) |
(243,281) |
(163,913) |
(2,156,816) |
(1,825,768) |
|
(1,089,889) |
(953,225) |
(153,710) |
(105,664) |
(1,243,599) |
(1,058,889) |
Administrative expenses |
(1,449,747) |
(1,364,164) |
(228,042) |
(197,064) |
(1,677,789) |
(1,561,228) |
|
(740,253) |
(704,018) |
(114,996) |
(102,314) |
(855,249) |
(806,332) |
Other operating income/(expenses) |
603,530 |
1,300,351 |
218,809 |
248,798 |
822,339 |
1,549,149 |
|
254,743 |
1,018,298 |
120,992 |
194,058 |
375,735 |
1,212,356 |
Exceptional items |
(121,888) |
(17,473) |
- |
(1,790) |
(121,888) |
(19,263) |
|
(106,154) |
(4,832) |
2,213 |
(1,222) |
(103,941) |
(6,054) |
Income from operations |
3,277,538 |
3,525,525 |
649,082 |
581,537 |
3,926,620 |
4,107,062 |
|
1,264,387 |
1,859,412 |
288,818 |
330,591 |
1,553,205 |
2,190,003 |
Net finance costs |
(1,312,168) |
(217,710) |
- |
- |
(1,312,168) |
(217,710) |
|
(600,781) |
82,934 |
- |
- |
(600,781) |
82,934 |
Share of results of joint ventures |
(4,820) |
(4,827) |
- |
- |
(4,820) |
(4,827) |
|
(2,642) |
(2,435) |
- |
- |
(2,642) |
(2,435) |
Income before income tax |
1,960,550 |
3,302,988 |
649,082 |
581,537 |
2,609,632 |
3,884,525 |
|
660,964 |
1,939,911 |
288,818 |
330,591 |
949,782 |
2,270,502 |
Income tax expense |
1,401,942 |
595,527 |
- |
- |
1,401,942 |
595,527 |
|
732,390 |
(42,141) |
- |
- |
732,390 |
(42,141) |
Net income |
3,362,492 |
3,898,515 |
649,082 |
581,537 |
4,011,574 |
4,480,052 |
|
1,393,354 |
1,897,770 |
288,818 |
330,591 |
1,682,172 |
2,228,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
5,020,009 |
4,916,436 |
863,795 |
768,756 |
5,883,804 |
5,685,192 |
|
2,193,773 |
2,566,722 |
378,707 |
424,350 |
2,572,480 |
2,991,072 |
Depreciation, amortization and impairment |
(1,747,291) |
(1,395,738) |
(214,713) |
(187,219) |
(1,962,004) |
(1,582,957) |
|
(932,028) |
(709,745) |
(89,889) |
(93,759) |
(1,021,917) |
(803,504) |
Net finance costs |
(1,312,168) |
(217,710) |
- |
- |
(1,312,168) |
(217,710) |
|
(600,781) |
82,934 |
- |
- |
(600,781) |
82,934 |
Income tax expense |
1,401,942 |
595,527 |
- |
- |
1,401,942 |
595,527 |
|
732,390 |
(42,141) |
- |
- |
732,390 |
(42,141) |
Net income |
3,362,492 |
3,898,515 |
649,082 |
581,537 |
4,011,574 |
4,480,052 |
|
1,393,354 |
1,897,770 |
288,818 |
330,591 |
1,682,172 |
2,228,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin as a % |
27.9% |
30.7% |
25.2% |
25.3% |
27.5% |
29.8% |
|
25.2% |
32.4% |
22.9% |
27.6% |
24.8% |
31.6% |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
In compliance with the Federal Law 6,404/76, Company
discloses the reconciliation between gross sales and net sales presented in the consolidated income statement. The values by each operational
segment are disclosed in note 16 – Segment reporting.
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
|
|
|
|
|
|
Gross sales and/or services |
60,410,057 |
57,630,920 |
|
28,604,820 |
28,323,374 |
Excise duty |
(12,146,959) |
(11,305,015) |
|
(5,907,359) |
(5,692,547) |
Discounts |
(8,833,241) |
(9,897,758) |
|
(3,799,347) |
(4,641,832) |
|
39,429,857 |
36,428,147 |
|
18,898,114 |
17,988,995 |
At gross sales and/or services line, the Company
recognizes the best estimate received or to be received regarding the products and services offered for its clients. Gross sales are disclosed
before taxes and discounts.
The gross sales obtained by the Company, in general,
are subject to the incidence of certain taxes and contributions, which are calculated and paid to fiscal authorities in accordance with
current federal, municipal and state legislation, and do not result in equity increase for the Group. These taxes and contributions are
deducted from gross sales and relate substantially to tax on transactions concerning the circulation of goods (“ICMS”), social
integration program (“PIS”), contribution to social security financing (“COFINS”), tax on manufactured products
(“IPI”) and tax on services of any nature (“ISSQN”) in Brazil. At the period and on June 30, 2023 the Company
calculated R$648,680 million of fiscal incentives (R$539,895 million at December 31, 2022), which are registered in the net revenue.
The discounts and rebates are also deducted from the Company’s gross
sales.
| 18. | OTHER OPERATING INCOME/(EXPENSES) |
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
|
|
|
|
|
|
Government grants/net present value of long-term fiscal incentives |
755,489 |
553,733 |
|
385,976 |
321,378 |
Extemporaneous credits/(debits) (i) |
- |
1,013,521 |
|
- |
922,065 |
(Additions)/reversals of provisions |
(11,706) |
(11,013) |
|
(3,430) |
1,581 |
Gains/(losses) on disposals of property, plant and equipment, intangible assets and the operations of associates |
42,573 |
45,913 |
|
14,496 |
12,490 |
Other operating income/(expenses), net |
91,157 |
23,999 |
|
(605) |
(18,083) |
|
877,513 |
1,626,153 |
|
396,437 |
1,239,431 |
(i) As detailed in Note 25 – Contingencies,
the Company has recognized PIS and COFINS credits arising from the exclusion of ICMS from its calculation basis, in the item Other operating
income/(expenses).
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
According to market practices and our accounting
policy, the Company recognizes, in other operating income/(expenses) line, tax incentives granted as rate reduction, calculation basis
reduction, financing or subsidized loans, presumed credit, deferred payment or partial reductions of due state tax payable.
Government grants are not recognized until there
is reasonable assurance that the Company will meet the respective conditions and obligations related to governmental terms.
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Restructuring (i) |
(56,295) |
(41,972) |
|
(28,406) |
(25,414) |
COVID-19 impacts (ii) |
- |
(15,567) |
|
- |
(4,899) |
Legal fees (iii) |
(94,670) |
- |
|
(94,670) |
- |
Effect of application of IAS 29 (hyperinflation) |
(340) |
(910) |
|
(340) |
(910) |
|
(151,305) |
(58,449) |
|
(123,416) |
(31,223) |
(i) The restructuring expenses primarily related to
centralized projects and resizing in the Brazil, Latin America and CAC.
(ii) COVID-19 expenses refer to (a) additional
administrative expenses to ensure the safety of our people (increased frequency of cleaning at the Company’s facilities, providing
alcohol gel and masks for our employees); (b) donations; and (c) Company initiatives providing support for some customer ecosystems, which
were necessary due to the COVID-19 pandemic.
(iii) In 2003 some holders of warrants issued
by Cervejaria Brahma filed lawsuits in order to discuss the criteria used in calculating the exercise price of such warrants. In 2023,
the Company obtained some final favorable decisions on the matter, which was already classified as a remote loss. The amount recorded
in this line refers to the provision for legal fees related to this matter.
| 20. | FINANCE EXPENSES AND INCOME |
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Interest expense |
(1,276,412) |
(957,469) |
|
(659,603) |
(559,707) |
Net interest on pension plans |
(59,307) |
(53,650) |
|
(29,247) |
(25,707) |
Losses on hedging instruments |
(1,101,882) |
(1,553,745) |
|
(462,258) |
(845,997) |
Interest on provision for disputes and litigation |
(90,301) |
(96,810) |
|
(72,987) |
(57,787) |
Exchange variations |
(597,475) |
(247,366) |
|
(320,028) |
(121,903) |
Tax on financial transactions |
(123,388) |
(146,615) |
|
(64,984) |
(85,927) |
Bank guarantee expenses |
(114,910) |
(97,931) |
|
(77,548) |
(58,776) |
Other financial results |
(176,819) |
(298,972) |
|
(121,673) |
(73,661) |
Total of finance expenses |
(3,540,494) |
(3,452,558) |
|
(1,808,328) |
(1,829,465) |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Interest expenses
are presented net of the effects of interest rate derivative financial instruments which mitigate Company’s interest rate risk (Note
23 – Financial instruments and risks). The interest
expenses are as follows:
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Financial instruments measured at amortized cost |
(352,090) |
(280,264) |
|
(200,200) |
(169,710) |
Financial instruments at fair value through profit or loss (i) |
(924,322) |
(677,205) |
|
(459,403) |
(389,997) |
Total |
(1,276,412) |
(957,469) |
|
(659,603) |
(559,707) |
(i) Include R$715 million (R$525 million at June 30, 2022) as accounts
payable present value adjustment.
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Interest income |
865,826 |
1,154,072 |
|
521,408 |
756,804 |
Interest and foreign exchange rate on loans to/from related parties |
18,349 |
14,964 |
|
1,550 |
11,642 |
Other financial results |
192,230 |
409,000 |
|
109,058 |
114,336 |
Total |
1,076,405 |
1,578,036 |
|
632,016 |
882,782 |
|
|
|
|
|
|
Effect of application of IAS 29 (hyperinflation) |
392,743 |
782,347 |
|
102,828 |
451,221 |
Total of finance income |
1,469,148 |
2,360,383 |
|
734,844 |
1,334,003 |
Interest income arises from the following financial assets:
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Cash and cash equivalents |
350,903 |
215,159 |
|
202,084 |
137,652 |
Investment on debt securities |
29,467 |
84,147 |
|
8,682 |
37,757 |
Other receivables (i) |
485,456 |
854,766 |
|
310,642 |
581,395 |
Total |
865,826 |
1,154,072 |
|
521,408 |
756,804 |
(i) Refers, mainly, to monetary adjustment of recoverable
taxes.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| 21. | INCOME TAX AND SOCIAL CONTRIBUTION |
Income taxes reported in the income statement are analyzed
as follows:
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Income tax expense – current |
(1,520,402) |
(2,451,893) |
|
(670,445) |
(2,189,517) |
|
|
|
|
|
|
Deferred tax expense on temporary differences |
1,408,958 |
1,940,416 |
|
824,014 |
1,718,975 |
Deferred tax on tax loss carryforward movements in the current period |
278,856 |
127 |
|
72,258 |
(4,032) |
Total deferred tax (expense)/income |
1,687,814 |
1,940,543 |
|
896,272 |
1,714,943 |
|
|
|
|
|
|
Total income tax expenses |
167,412 |
(511,350) |
|
225,827 |
(474,574) |
The reconciliation between the weighted nominal tax rate and the effective
tax rate is summarized as follows:
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
Profit before tax |
6,249,597 |
7,104,236 |
|
2,371,933 |
3,538,622 |
Adjustment on a taxable basis |
|
|
|
|
|
Others non-taxable income |
(490,914) |
(574,695) |
|
(340,483) |
(493,560) |
Government grants related to sales taxes |
(1,404,170) |
(1,093,627) |
|
(721,470) |
(607,291) |
Share of results of joint ventures |
16,603 |
5,610 |
|
2,431 |
3,206 |
Non-deductible expenses |
19,594 |
51,187 |
|
3,367 |
43,783 |
Worldwide taxation |
260,655 |
104,648 |
|
114,242 |
(41,252) |
|
4,651,365 |
5,597,359 |
|
1,430,020 |
2,443,508 |
Aggregated weighted nominal tax rate |
28.48% |
29.66% |
|
24.34% |
30.57% |
Taxes payable – nominal rate |
(1,324,696) |
(1,660,005) |
|
(348,088) |
(746,965) |
Adjustment on tax expense |
|
|
|
|
|
Income tax incentives |
47,678 |
101,960 |
|
19,721 |
80,581 |
Deductible interest on shareholders’ equity |
1,676,701 |
1,352,781 |
|
820,019 |
606,174 |
Tax savings from goodwill amortization |
8,579 |
18,629 |
|
4,290 |
4,289 |
Withholding income tax |
(100,764) |
(34,453) |
|
(43,208) |
(205,078) |
Recognition/(write-off) of deferred charges on tax losses |
(94,383) |
(46,761) |
|
(84,542) |
(42,345) |
Effect of application of IAS 29 (hyperinflation) |
(257,581) |
(108,431) |
|
(136,990) |
(70,930) |
Others with reduced taxation |
211,878 |
(135,070) |
|
(5,375) |
(100,300) |
Income tax and social contribution expense |
167,412 |
(511,350) |
|
225,827 |
(474,574) |
Effective tax rate |
-2.68% |
7.20% |
|
-9.52% |
13.41% |
The main events that impacted the effective tax
rate for the period were:
| · | Government subsidy for sales taxes: for regional incentives and economic
development policies, these are related primarily to local production, contributing to economic and social impact, and, when reinvested,
are not subject to income tax and social contribution, which explains the impact on the effective tax rate. The amount above is impacted
by fluctuations in the volume, price, and any eventual increases in state VAT (“ICMS”) reflected in other operating income
or net sales depending on its nature. Still, the abovementioned amount is annually allocated to net income reserves,
in accordance with item (c.3) “Tax incentives” from note 15 – Changes in Equity. |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| · | Complement of income tax on foreign subsidiaries due in Brazil: shows the
result of the calculation of universal taxation of profits, according to the regulations of Law 12,973/14. |
| · | Withholding income tax: the amount is mainly related to dividends already
distributed and to be distributed by subsidiaries located outside of Brazil, applicable according to local tax legislation. The amount
recognized in 2023 is mainly due to the exchange rate variation of the deferred income tax balances. |
| · | Deductible interest on shareholders’ equity: under Brazilian law,
companies have an option to remunerate their shareholders through the payment of Interest on Capital (“IOC”), which amounts
are impacted by taxable result, net income reserves and by the long-term interest rate (“TJLP”). Such earnings are deductible
for income tax purposes. |
| · | Effect of application of IAS 29 (hyperinflation): our subsidiary in Argentina,
for operating in a hyperinflationary economy, is subject to monetary correction of non-financial assets and liabilities, equity and income
statement, which, at times, reflects in the consolidated effective tax rate and implies variation between periods. |
Currently the Company has two plans for share-based
payment programs: (i) the Stock Option Plan, approved in Extraordinary General Meeting of July 30, 2013 (“Stock Option Plan”),
and (ii) the Share-based Payment Plan approved in Extraordinary General Meeting of April 29, 2016, amended in Extraordinary General Meeting
of April 24, 2020 (“Share-Based Plan”). In each plan different restricted stock options and share-based payment programs are
issued periodically which allow the employees and senior management of the Company and its subsidiaries to acquire, through the exercise
of stock options, or receive shares of the Company.
(i) Stock Option Plan
There are three models of stock options that
were or may be granted under the Stock Option Plan.
Under the first model, beneficiaries, in accordance
with their internal category, could choose between allocating (a) 30% or 100%, (b) 40% or 100%, and (c) 60% or 100% of the amounts
received by them as profit sharing, regarding the immediate year to the exercise of stock options, thereby allowing them to acquire the
corresponding amount of Ambev shares. Under this model, a substantial part of the shares acquired is to be delivered only within five
years from the corresponding stock option grant date. During such five-year period, the beneficiary must remain employed at Ambev or
in any other company of its group.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Under the second model, the beneficiary may exercise
the stock options granted only after a period of up to five years from the corresponding grant date. Vesting of the stock options granted
under the second model is not subject to the Company’s performance measures; however, the right to exercise such options may be
forfeited in certain circumstances, including the beneficiary’s resignation or dismissal prior to the stock options’ vesting.
Under the third model, the beneficiaries, in
accordance with their internal category, may choose between allocating (a) 20% or 100%, (b) 30% or 100%, and (c) 50% or 100%, of the amounts
received by them as profit-sharing regarding the immediate year to the exercise of stock options, acquisition of the corresponding amount
of Ambev shares. The totality of the shares acquired is to be delivered to the beneficiary within forty-five days from the corresponding
stock option exercising date (which shall not be later than forty-five days from the stock option grant date). The beneficiaries of this
third model are under a three or five-year lock-up period.
For all stock option programs, the fair value
of the shares is estimated as at the option grant date, using the “Hull Binomial” pricing model, adjusted to reflect the IFRS
2- Share-based Payment requirement that assumptions regarding forfeiture before the end of the vesting period cannot impact the
fair value of the option. The fair value of the share options is estimated at the grant date, using an option pricing model. Based on
the expected number of options that will be exercised, the fair value of the options granted is recognized as an expense over the vesting
period with a corresponding credit to equity. When the options are exercised, the equity is increased by the amount of the proceeds received.
(ii) Share-Based Plan
In this plan, certain employees and members of
the Management of the Company or its subsidiaries are eligible to receive shares in the Company including in the form of ADRs. The shares
that are subject to the Share-Based Plan are designated as “restricted shares” (RSUs) or “performance shares”
(PSUs).
The delivery of restricted shares and performance
shares are made free, and the waiting period may vary between three and five years from the corresponding share-based plan stock grant
date, during which the beneficiary must remain employed at Ambev or any other company of its group.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The restricted shares and performance shares
give to participants the right to receive additional shares with the same conditions, such as compensation dividends and Interest on shareholder’s
equity declared and paid by the Company during the waiting period. The right to receive restricted, performance and additional shares
can be fully or partially lost depending on circumstances, including cases of resignation or resignation during the grace period.
Under the Share-Based Plan, the reference price
per restricted share is defined on the stock grant date based on the share price of the trading session on B3 S.A. immediately prior to
the granting of the shares, except for the performance shares, which the fair value is defined at the grant date based on “Monte
Carlo” pricing method. After defining the reference price, based on number of grant shares, the calculated amount is recorded as
expense against equity. The shares are transferred to attendees according to terms and periods by the respective programs.
The total number of outstanding options developed
was as follows:
Thousand options |
06/30/2023 |
|
12/31/2022 |
|
|
|
|
Options outstanding at January |
99,717 |
|
113,760 |
Options forfeited during the period |
(1,687) |
|
(14,043) |
Options outstanding at the end of the period |
98,030 |
|
99,717 |
The range of exercise prices of the outstanding
options is from R$15.95 (R$15.95 in 2022) to R$38.69 (R$39.04 in 2022) and the weighted average remaining contractual life is approximately
3.79 years (4.29 years in 2022).
Of
the 98,030 thousand outstanding options (99,717 thousand in 2022), 66,288 thousand options were vested in 2023(63,850
thousand in 2022).
The weighted average exercise price of the options is as follows:
In R$ per share |
06/30/2023 |
|
12/31/2022 |
|
|
|
|
Options outstanding at January 1 |
19.39 |
|
19.92 |
Options forfeited during the period |
17.95 |
|
22.60 |
Options outstanding at the end of the period |
19.39 |
|
19.39 |
Options exercisable at the end of the period |
20.23 |
|
20.12 |
There were no options exercised during the period
ended in June 30, 2023 and December 31, 2022.
To settle the exercised stock options,
the Company may use treasury shares. The current limit on the authorized capital is considered sufficient to meet the Company’s
obligations under all stock option plans if the issue of new
shares is required to meet the grants awarded under the Programs.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
During the period, the Company did not
grant deferred shares under the Stock Option Plan (in 2022 44 thousand deferred shares have been granted, which are valued based on the
share market price prior to the grant, which represented a fair value of R$643). Such deferred shares are subject to a vesting period
of five years from the grant date.
During the period, the Company granted
6,813 thousand restricted shares and performance shares under the Share-Based Plan (49,328 thousand in 2022), which are valued based on
the parameters referenced above, representing a fair value of approximately R$89,315 in 2023 (R$766,615 in 2022).
The the total number of shares purchased by or granted
to employees, as the case may be, under the Stock Option Plan and Share-Based Plan which will be delivered in the future based
on the fulfilment of certain conditions (deferred stock, restricted and performance shares), is as set out below:
Deferred shares
Thousand deferred shares |
06/30/2023 |
|
12/31/2022 |
|
|
|
|
Deferred shares outstanding at January 1 |
889 |
|
1,168 |
New deferred shares during the period |
- |
|
44 |
Deferred shares granted during the period |
- |
|
(214) |
Deferred shares forfeited during the period |
- |
|
(109) |
Deferred shares outstanding at the end of the period |
889 |
|
889 |
Restricted and performance shares
Thousand restricted shares |
06/30/2023 |
|
12/31/2022 |
|
|
|
|
Restricted and performance shares outstanding at January |
108,854 |
|
62,545 |
New restricted and performance shares during the period |
6,813 |
|
49,328 |
Restricted and performance shares granted during the period |
(3,370) |
|
(12) |
Restricted and performance shares forfeited during the period |
(3,231) |
|
(3,007) |
Restricted and performance shares outstanding at the end of the period |
109,066 |
|
108,854 |
Additionally,
certain employees and managers of the Company received options to acquire AB InBev shares and restricted shares, the compensation costs
of which are recognized in the income statement against equity.
The transactions with share-based payments
described above generated an expense of R$184,584 on June 30, 2023 (R$149,652 on June 30, 2022), recorded as administrative expenses.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
| 23. | FINANCIAL INSTRUMENTS AND RISKS |
Risk factors
The Company is exposed to foreign currency, interest
rate, commodity price, liquidity and credit risk in the ordinary course of its business. The Company analyzes each of these risks both
individually and on a consolidated basis, to define strategies to manage the economic impact on risk’s performance consistent with
its Financial Risk Management Policy (the “Policy”) approved by the Board of Directors.
The Policy intend to provide guidelines for
the management of the financial risks inherent to the capital markets in which Ambev operates. The Policy includes four main aspects:
(i) capital structure; financing and liquidity; (ii) transactional risks related to the business; (iii) financial statement translation
risk; and (iv) credit risks of financial counterparties. The Company’s use of derivatives strictly follows the Financial Risk Management
Policy.
The Policy establishes that all the financial
assets and liabilities in each country in which Ambev operates must be denominated in their respective local currencies. The Policy also
sets out the procedures and controls required to identify, measure and minimize market risks, such as variations in foreign exchange rates,
interest rates and commodities (mainly aluminum, wheat, corn and sugar) that may affect Ambev’s revenue, costs and/or investment
amounts. All of the known risks (e.g. foreign currency and interest) shall be hedged by contracting derivative financial instruments.
Existing risks which are not yet recorded (e.g. future contracts for the purchase of raw materials or property, plant and equipment) shall
be mitigated using projections for the period required for the Company to adapt to the new costs scenario, which may vary from ten to
fourteen months, also through the use of derivative financial instruments. Most translation risks are not hedged. The exceptions to the
policy must be approved by the Operations and Finance Committee.
Derivative financial instruments
The derivative financial instruments authorized
under the Policy include futures contracts traded on exchanges, full deliverable forwards, non-deliverable forwards, swaps and options.
At June 30, 2023, the Company and its subsidiaries had no target forwards, swaps with currency verification, or any other derivative transactions
representing a risk level above the nominal value of the contracts. The derivative operations are managed on a consolidated basis and
classified based on the strategy according to their purposes, as follows:
i) Cash flow hedge
derivative instruments – Forecast transactions, with a
high probability of occurrence, contracted to minimize the Company’s exposure to fluctuations in exchange rates and the prices
of raw materials, investments, equipment and services to be procured, protected by cash flow hedges that shall occur at various different
dates over the next fourteen months. Gains and losses classified as hedging reserves in equity are recognized in the income statement
in the period or periods during which the forecast and hedged transaction affects the income statement.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
ii) Fair value
hedge derivative instruments – operations contracted for
the purpose of mitigating the Company’s net indebtedness against foreign exchange and interest rate risk. Net cash positions and
foreign currency debts are continually assessed to identify new indications of exposure.
The results of these operations, measured according
to their fair value, are recognized in financial results.
iii) Net investment
hedge derivative instruments – transactions entered into
to minimize the exposure to exchange differences arising from the conversion of net investments in the Company's subsidiaries located
abroad for the purpose of translating the account balance.
In accordance with the hedge accounting, the
effective hedge amount is recorded in equity and, in the event of an ineffective portion this result is recorded immediately in finance
result during the period ineffectiveness was identified, for cash flow hedge and net investment hedge.
Non-derivative financial instruments
Put options granted on subsidiaries: the Company
constituted a liability related to the acquisition of a non-controlling interest of the operations in the Dominican Republic. This financial
instrument is denominated in US Dollars (Tranche A) and Dominican Pesos (Tranche B) and is recorded by an entity whose functional currency
is the Real. The Company assigned this financial instrument as a hedging instrument for a portion of its net assets located in subsidiaries
whose functional currency is the US Dollar and the Dominican Peso, in such a manner that the hedge result can be recorded in other comprehensive
income of the Group, following the result of the hedged item.
The following tables summarize the exposure identified
and protected in accordance with the Company’s Risk Policy:
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Transactions protected by derivative financial instruments in accordance
with the Financial Risk Management Policy
|
|
|
|
|
|
|
Six-month period ended: 06/30/2023 |
|
Three-month period ended: 06/30/2023 |
|
|
|
|
|
Fair Value |
|
Gain / (Losses) |
|
Gain / (Losses) |
Hedge position |
|
Risk |
Notional |
|
Assets |
Liabilities |
|
Finance Result |
Operational Result |
Equity |
|
Finance Result |
Operational Result |
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
18,297,447 |
|
258,727 |
(1,491,792) |
|
(1,028,671) |
225,961 |
(857,861) |
|
(461,413) |
130,308 |
(776,072) |
|
|
Commodities |
4,241,288 |
|
127,115 |
(531,623) |
|
(131,461) |
(223,399) |
377,800 |
|
(30,693) |
(93,230) |
373,474 |
|
|
US Dollars |
13,883,640 |
|
108,439 |
(959,761) |
|
(896,805) |
441,023 |
(1,217,465) |
|
(430,243) |
216,396 |
(1,128,335) |
|
|
Euros |
40,314 |
|
923 |
(328) |
|
(276) |
1,097 |
263 |
|
(39) |
981 |
(440) |
|
|
Mexican Pesos |
132,205 |
|
22,250 |
(80) |
|
(129) |
7,240 |
(18,459) |
|
(438) |
6,161 |
(20,771) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Importing of fixed assets |
|
|
277,612 |
|
15,628 |
(27,688) |
|
(14,008) |
(1,484) |
(11,191) |
|
(10,448) |
(255) |
928 |
|
|
US Dollars |
277,612 |
|
15,628 |
(27,688) |
|
(14,008) |
(1,484) |
(11,191) |
|
(10,448) |
(255) |
928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
106,461 |
|
1,862 |
(5,659) |
|
(17,578) |
16,827 |
6,476 |
|
(9,124) |
6,423 |
4,128 |
|
|
US Dollars |
106,461 |
|
1,862 |
(5,659) |
|
(17,578) |
16,827 |
6,476 |
|
(9,124) |
6,423 |
4,128 |
As at June 30, 2023 |
|
|
18,681,520 |
|
276,217 |
(1,525,139) |
|
(1,060,257) |
241,304 |
(862,576) |
|
(480,985) |
136,476 |
(771,016) |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
|
|
|
|
12/31/2022 |
|
Six-month period ended: 06/30/2022 |
|
Three-month period ended: 06/30/2022 |
|
|
|
|
|
Fair Value |
|
Gain / (Losses) |
|
Gain / (Losses) |
Hedge position |
|
Risk |
Notional |
|
Assets |
Liabilities |
|
Finance Result |
Operational Result |
Equity |
|
Finance Result |
Operational Result |
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
19,853,289 |
|
271,806 |
(719,460) |
|
(1,510,732) |
486,195 |
(260,432) |
|
(946,256) |
146,693 |
1,068,882 |
|
|
Commodities |
4,809,884 |
|
100,774 |
(376,141) |
|
11,553 |
443,063 |
(617,314) |
|
37,139 |
151,246 |
(948,801) |
|
|
US Dollars |
14,874,705 |
|
157,731 |
(342,866) |
|
(1,518,384) |
36,459 |
369,174 |
|
(982,029) |
(2,548) |
2,099,700 |
|
|
Euros |
32,198 |
|
1,916 |
(3) |
|
(484) |
679 |
(1,835) |
|
(134) |
405 |
(95) |
|
|
Mexican Pesos |
136,502 |
|
11,385 |
(450) |
|
(3,417) |
5,994 |
(10,457) |
|
(1,232) |
(2,410) |
(81,922) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets |
|
|
226,810 |
|
1,534 |
(5,392) |
|
(4,529) |
3,146 |
(4,428) |
|
28,844 |
(5,843) |
(15,176) |
|
|
US Dollars |
226,810 |
|
1,534 |
(5,392) |
|
(4,529) |
3,146 |
(4,428) |
|
28,844 |
(5,843) |
(15,176) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
204,907 |
|
492 |
(4,572) |
|
(32,141) |
6,872 |
(23,277) |
|
2,270 |
(372) |
(223,151) |
|
|
US Dollars |
204,907 |
|
492 |
(4,572) |
|
(32,141) |
6,872 |
(23,277) |
|
2,270 |
(372) |
(223,151) |
Total |
|
|
20,285,006 |
|
273,832 |
(729,424) |
|
(1,547,402) |
496,213 |
(288,137) |
|
(915,142) |
140,478 |
830,555 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
a.1) Foreign currency risk
The Company is exposed to foreign currency risk
on borrowings, investments, purchases, dividends and/or interest expenses or income where these are denominated in a currency other than
the functional currency of the subsidiary. The main derivative financial instruments used to manage foreign currency risk are futures
contracts, swaps, options, non-deliverable forwards and full deliverable forwards.
a.2) Commodity Risk
A significant portion of the Company’s
inputs is made up of commodities, which have historically experienced substantial price fluctuations. The Company therefore uses both
fixed price purchasing contracts and derivative financial instruments to minimize its exposure to volatility in the commodity prices of
aluminum, sugar, wheat, corn and paraxylene. These derivative financial instruments have been designated as cash flow hedges.
a.3) Interest rate risk
The Company applies a dynamic interest rate hedging
approach, whereby the target mix between fixed- and floating-rate debt is reviewed periodically. The purpose of the Company’s policy
is to achieve an optimal balance between the cost of funding and the volatility of financial results, considering market conditions, as
well as the Company’s overall business strategy, which is reviewed periodically.
The table below demonstrates the Company’s and
its subsidiaries exposure related to debts. As at June 30, 2023, the Company and its subsidiaries does not hold hedge positions to the
exposure described below:
|
06/30/2023 |
|
Risk |
|
Interest rate |
Amount in Brazilian Real |
Brazilian Reais |
10.0% |
2,879,160 |
Working capital in Argentinean Peso |
91.0% |
103,948 |
Other |
10.9% |
404,589 |
US Dollars |
14.0% |
24 |
Canadian Dollars |
5.4% |
468,819 |
Pre-fixed interest rate |
|
3,856,540 |
|
|
|
|
|
|
Brazilian Reais |
8.3% |
239,691 |
Post fixed interest rate |
|
239,691 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
12/31/2022 |
|
Risk |
|
Interest rate |
Amount in Brazilian Real |
Brazilian Reais |
8.5% |
2,602,063 |
Working capital in Argentinean Peso |
73.5% |
74,343 |
Other |
10.4% |
421,289 |
US Dollars |
14.0% |
6,193 |
Canadian Dollars |
5.3% |
511,018 |
Pre-fixed interest rate |
|
3,614,906 |
|
|
|
|
|
|
Brazilian Reais |
8.5% |
230,143 |
Post fixed interest rate |
|
230,143 |
Sensitivity analysis
The Company substantially mitigates the risks arising
from non-derivative financial assets and liabilities through the use of derivative financial instruments. In this context, the Company
has identified the main risk factors that could generate losses from these derivative financial instruments, and has developed a sensitivity
analysis based on three scenarios which may impact the Company’s future results and/or cash flow, as described below:
1 –
Probable scenario: Management’s expectations regarding the deterioration of each transaction’s
main risk factor. To measure the possible effects on the results of derivative transactions, the Company uses the parametric Value at
Risk (“VaR”), a statistical measure developed based on estimates of standard deviation and correlation between the returns
of several risk factors. This model provides the loss limit expected for an asset over a certain time period and confidence interval.
Under this methodology, we used the potential exposure of each financial instrument, a range of 95% and a horizon of 21 days after June
30, 2023 for the calculation, which are presented in the model.
2 – Adverse scenario: 25% deterioration in each
transaction’s main risk factor compared to the level observed as at June 30, 2023.
3 – Remote scenario: 50% deterioration
in each transaction’s main risk factor compared to the level observed as at June 30, 2023.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Transaction |
Risk |
Fair Value |
Probable scenario |
Adverse scenario |
Remote scenario |
|
|
|
|
|
|
Commodities hedge |
Increase in commodities price |
(404,508) |
(251,611) |
655,814 |
1,716,136 |
Input purchases |
|
404,508 |
248,736 |
(678,946) |
(1,762,400) |
Foreign exchange hedge |
Foreign currency increase |
(828,557) |
(583,132) |
2,685,484 |
6,199,524 |
Input purchases |
|
828,557 |
579,026 |
(2,934,881) |
(6,698,317) |
Cost effects |
|
- |
(6,981) |
(272,529) |
(545,057) |
|
|
|
|
|
|
Foreign exchange hedge |
Foreign currency increase |
(12,060) |
(10,389) |
57,343 |
126,746 |
Capex Purchases |
|
12,060 |
10,389 |
(57,343) |
(126,746) |
Fixed asset effects |
|
- |
- |
- |
- |
|
|
|
|
|
|
Foreign exchange hedge |
Foreign currency increase |
(3,797) |
(3,177) |
22,818 |
49,434 |
Expenses |
|
3,797 |
2,782 |
(46,814) |
(97,424) |
Result of expense effects |
|
- |
(395) |
(23,996) |
(47,990) |
|
|
- |
(7,376) |
(296,525) |
(593,047) |
As at June 30, 2023 the notional and fair value amounts per instrument
and maturity were as follows:
|
|
Notional Value |
Hedge position |
Risk |
2023 |
2024 |
2025 |
2026 |
>2026 |
Total |
|
|
|
|
|
|
|
|
Cost |
|
13,182,144 |
5,115,303 |
- |
- |
- |
18,297,447 |
|
Commodities |
2,349,903 |
1,891,385 |
- |
- |
- |
4,241,288 |
|
US Dollars |
10,751,636 |
3,132,004 |
- |
- |
- |
13,883,640 |
|
Euros |
16,342 |
23,972 |
- |
- |
- |
40,314 |
|
Mexican Pesos |
64,263 |
67,942 |
- |
- |
- |
132,205 |
|
|
|
|
|
|
|
|
Importing of fixed assets |
|
138,934 |
138,678 |
- |
- |
- |
277,612 |
|
US Dollars |
138,934 |
138,678 |
- |
- |
- |
277,612 |
|
|
|
|
|
|
|
|
Expenses |
|
69,200 |
37,261 |
- |
- |
- |
106,461 |
|
US Dollars |
69,200 |
37,261 |
- |
- |
- |
106,461 |
|
|
13,390,278 |
5,291,242 |
- |
- |
- |
18,681,520 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
|
Fair Value |
Hedge position |
Risk |
2023 |
2024 |
2025 |
2026 |
>2026 |
Total |
|
|
|
|
|
|
|
|
Costs |
|
(1,075,733) |
(157,332) |
- |
- |
- |
(1,233,065) |
|
Commodities |
(282,679) |
(121,829) |
- |
- |
- |
(404,508) |
|
US Dollars |
(808,214) |
(43,108) |
- |
- |
- |
(851,322) |
|
Euros |
864 |
(269) |
- |
- |
- |
595 |
|
Mexican Pesos |
14,296 |
7,874 |
- |
- |
- |
22,170 |
|
|
|
|
|
|
|
|
Importing of fixed assets |
|
(6,036) |
(6,024) |
- |
- |
- |
(12,060) |
|
US Dollars |
(6,036) |
(6,024) |
- |
- |
- |
(12,060) |
|
|
|
|
|
|
|
|
Expenses |
|
(1,905) |
(1,892) |
- |
- |
- |
(3,797) |
|
US Dollars |
(1,905) |
(1,892) |
- |
- |
- |
(3,797) |
|
|
(1,083,674) |
(165,248) |
- |
- |
- |
(1,248,922) |
Concentration of trade receivables credit risk
A substantial portion of the Company’s
sales is made to distributors, supermarkets and retailers, through a broad distribution network. Credit risk is reduced due to the widespread
number of customers and control procedures used to monitor risk. Historically, the Company has not incurred significant losses on receivables
from customers.
Concentration of counterparty credit risk
In order to minimize the credit risk of its investments,
the Company has adopted procedures for the allocation of cash and investments, taking into consideration the credit limits and credit
analysis of financial institutions, avoiding credit concentration, i.e. the credit risk is monitored and minimized by restricting negotiations
to a select group of highly rated counterparties.
The selection process for financial institutions
authorized to operate as counterparties of the Company is set forth in the Policy, which also establishes exposure limits for each counterparty
based on each counterparty’s risk rating and capitalization.
Any deposits or cash available must be
kept in accounts with top-tier banks, or banks with a high credit rating in the respective country. Any position of a short-term nature
(less than six months) should be considered as a deposit or cash.
Counterparty risk must be managed by the
Company globally, with product limits established by the treasury area, considering: (i) the counterparty’s credit rating; (ii)
the transaction term; (iii) the amount; and (iv) the split between assets and liabilities, in the absence of a clearing clause in derivative
contracts.
The counterparty risk is reassessed.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The carrying amounts of cash and cash equivalents,
investment securities, trade receivables excluding prepaid expenses, recoverable taxes and derivative financial instruments are disclosed
net of provisions for impairment and represent the maximum exposure to credit risk as at June 30, 2023. As at June 30, 2023, there was
no concentration of credit risk in any counterparties in excess of the limits established by the Company’s risk policy.
Historically, the Company’s primary sources
of cash flow have been cash flow from operating activities, the issuance of debt, bank borrowings and equity securities. Ambev’s
material cash requirements have included the following:
· |
Investments in companies; |
· | Increases in the ownership of
Ambev’s subsidiaries or companies in which it holds equity investments; |
· |
Share buyback programs; and |
· |
Payments of dividends and interest on shareholders’ equity. |
The Company believes that cash flows from operating
activities, cash and cash equivalents, short-term investments, together with derivatives and access to loan facilities, are sufficient
to finance capital expenditure, financial liabilities and dividend payments in the future.
|
|
|
|
|
|
|
06/30/2023 |
|
Carrying amount |
Contractual cash flows |
Less than 1 year |
1-2 years |
2-3 years |
3-5 years |
More than 5 years |
Trade and other payables (i) |
30,442,395 |
31,971,247 |
28,720,378 |
477,310 |
420,551 |
769,714 |
1,583,294 |
Secured bank loans |
143,021 |
194,430 |
43,225 |
25,298 |
25,181 |
50,363 |
50,363 |
Other unsecured loans |
459,274 |
739,519 |
161,119 |
174,087 |
158,159 |
115,664 |
130,490 |
Lease liabilities |
3,389,988 |
4,308,025 |
1,406,030 |
755,149 |
660,095 |
601,086 |
885,665 |
|
34,434,678 |
37,213,221 |
30,330,752 |
1,431,844 |
1,263,986 |
1,536,827 |
2,649,812 |
|
|
|
|
|
|
|
12/31/2022 |
|
Carrying amount |
Contractual cash flows |
Less than 1 year |
1-2 years |
2-3 years |
3-5 years |
More than 5 years |
Trade and other payables (i) |
39,354,388 |
40,656,296 |
36,818,534 |
86,759 |
1,275,053 |
1,008,364 |
1,467,586 |
Secured bank loans |
180,776 |
245,638 |
68,163 |
26,385 |
25,182 |
50,363 |
75,545 |
Other unsecured loans |
472,540 |
759,078 |
169,854 |
156,686 |
151,624 |
165,410 |
115,504 |
Lease liabilities |
3,117,390 |
3,657,425 |
962,898 |
1,008,416 |
620,955 |
696,911 |
368,245 |
|
43,125,094 |
45,318,437 |
38,019,449 |
1,278,246 |
2,072,814 |
1,921,048 |
2,026,880 |
(i) Mainly includes amounts related to suppliers,
taxes, fees and contributions payable, dividends and interest on equity payable, salaries and charges, put options related to our participation
in subsidiaries and other liabilities, except for related parties, with payment term of less than one year.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Equity price risk
On June 30, 2023 and December 31, 2022, the Company
did not have equity swap positions.
The Company is continuously optimizing its capital
structure in order to maximize shareholder value while maintaining the desired financial flexibility to execute its strategic projects.
Besides the statutory minimum equity funding requirements applicable to the Company’s subsidiaries in different countries, the Company
is not subject to any externally imposed capital requirements. When analyzing the capital structure, the Company uses the same debt ratings
and capital classifications applied to the interim financial statements.
Financial instruments
(a) Financial instrument categories
The financial instruments held by the Company
are managed through operational strategies and internal controls to assure liquidity, profitability, and transaction security. Transactions
involving financial instruments are regularly reviewed to assess the effectiveness of the risk exposure that management intends to cover
(foreign exchange, and interest rate, among others).
The table below shows all the financial instruments
recognized in the financial statements, segregated by category:
|
06/30/2023 |
|
Amortized cost |
Fair value through profit or loss |
Total |
Financial assets |
|
|
|
Cash and cash equivalents less bank overdrafts |
12,013,065 |
- |
12,013,065 |
Trade receivables excluding prepaid expenses |
6,916,695 |
- |
6,916,695 |
Investment securities |
246,838 |
313,504 |
560,342 |
Derivatives hedges |
- |
276,217 |
276,217 |
Total |
19,176,598 |
589,721 |
19,766,319 |
|
|
|
|
Financial liabilities |
|
|
|
Trade payables |
19,020,471 |
- |
19,020,471 |
Put options granted on subsidiaries |
- |
2,847,528 |
2,847,528 |
Derivatives hedges |
- |
1,525,139 |
1,525,139 |
Interest-bearing loans and borrowing |
3,992,283 |
- |
3,992,283 |
Other liabilities |
2,211,250 |
323,705 |
2,534,955 |
Total |
25,224,004 |
4,696,372 |
29,920,376 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
12/31/2022 |
|
Amortized cost |
Fair value through profit or loss |
Total |
Financial assets |
|
|
|
Cash and cash equivalents less bank overdrafts |
14,852,092 |
- |
14,852,092 |
Trade receivables excluding prepaid expenses |
7,791,362 |
- |
7,791,362 |
Investment securities |
219,055 |
454,497 |
673,552 |
Derivatives hedges |
- |
273,832 |
273,832 |
Total |
22,862,509 |
728,329 |
23,590,838 |
|
|
|
|
Financial liabilities |
|
|
|
Trade payables |
24,837,956 |
- |
24,837,956 |
Put options granted on subsidiaries |
- |
3,060,276 |
3,060,276 |
Derivatives hedges |
- |
729,424 |
729,424 |
Interest-bearing loans and borrowing |
3,770,706 |
- |
3,770,706 |
Other liabilities |
2,015,631 |
333,673 |
2,349,304 |
Total |
30,624,293 |
4,123,373 |
34,747,666 |
(b) Classification of financial instruments by type of fair
value measurement
IFRS 13 defines the fair value as the price that
would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.
Also pursuant to IFRS 13, financial instruments
measured at fair value shall be classified within the following categories:
Level
1 – quoted prices (unadjusted)
in active markets available to the entity for identical assets or liabilities as at the valuation date;
Level 2 –
inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly or indirectly; and
Level
3 – inputs which are not observable
for the asset or liability.
|
06/30/2023 |
|
12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Level 1 |
Level 2 |
Level 3 |
Total |
Financial assets |
|
|
|
|
|
|
|
|
|
Investment securities |
313,504 |
- |
- |
313,504 |
|
454,497 |
- |
- |
454,497 |
Derivatives – operational hedge |
112,833 |
163,384 |
- |
276,217 |
|
57,038 |
216,794 |
- |
273,832 |
|
426,337 |
163,384 |
- |
589,721 |
|
511,535 |
216,794 |
- |
728,329 |
Financial liabilities |
|
|
|
|
|
|
|
|
|
Put options granted on subsidiaries |
- |
- |
2,847,528 |
2,847,528 |
|
- |
- |
3,060,276 |
3,060,276 |
Other liabilities |
- |
- |
323,705 |
323,705 |
|
- |
- |
333,673 |
333,673 |
Derivatives – operational hedge |
98,105 |
1,427,034 |
- |
1,525,139 |
|
76,073 |
653,351 |
- |
729,424 |
|
98,105 |
1,427,034 |
3,171,233 |
4,696,372 |
|
76,073 |
653,351 |
3,393,949 |
4,123,373 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Reconciliation of changes in the assets categorized at Level 3
Financial liabilities at December 31, 2022 |
3,393,949 |
Acquisition of investments |
(565) |
Level reclassification |
(4,700) |
Total gains and losses during the period |
(217,451) |
Losses/(gains) recognized in net income |
11,374 |
Losses/(gains) recognized in equity |
(228,825) |
Financial liabilities at June 30, 2023 |
3,171,233 |
(c) Fair value of financial liabilities measured at amortized cost
The Company’s liabilities, interest-bearing
loans and borrowing, trade payables excluding tax payables, are recorded at amortized cost based on the effective rate method, plus indexation
and foreign exchange gains/losses, based on the closing indices for each exercise.
The financial instruments recorded at amortized
cost are similar to the fair value and are not sufficiently material to require disclosure.
(d) Fair value of liabilities measured through
profit or loss
As part of the negotiations regarding the acquisition
of the shares of Tenedora, the Company signed the second amendment to the Shareholders’ Agreement extending the partnership between
the Company and ELJ. ELJ is currently the owner of 15% of the shares of Tenedora, and its put options are now divided into two tranches:
(i) Tranche A, corresponding to 12.11% of the shares, exercisable in 2022, 2023 and 2024; and (ii) Tranche B, corresponding to 2.89% of
the shares, exercisable from 2026. The Company, on the other hand, has a call option over the Tranche A shares, exercisable from 2021,
and Tranche B shares, exercisable from 2029, whereas until June 30, 2023, no options were exercised. On June 30, 2023, the sum of the
two ELJ tranches is R$2,845,645 (R$3,053,693 on December 31, 2022).
The fair value of Tranche A is calculated considering
the interest under the contract, plus foreign exchange variations, less the dividends paid between the date of signature of the amendment
and the exercise of the option.
The fair value of Tranche B is calculated based
on the EBITDA multiple defined in the contract, less the net debt, brought to its present value, calculated using standard valuation techniques
(the present value of the principal amount and future interest, discounted by the local currency’s weighted average cost of capital
rate as at the date of the calculation). The criteria used are based on market information from reliable sources and are categorized as
“Level 3”.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Calculation of the fair value of derivatives
The Company measures derivative financial instruments
by calculating their fair value, using market curves that impact the value of the instrument as at the computation date. In the case of
swaps, the asset and the liability positions are estimated independently and brought to their fair value, equivalent to the difference
between the results of the asset and liability amounts, which generates the swap’s market value. For traded derivative financial
instruments, the fair value is calculated based on the exchange-listed price.
Margins pledged as guarantees
In order to comply with the guarantee requirements
regarding derivative exchanges and/or counterparties to certain operations with derivative financial instruments, as at June 30, 2023
the Company held R$163,520 in highly liquid financial investments or in cash, classified as cash and cash equivalents and investment securities
(R$376,850 as at December 31, 2022).
Offsetting of financial assets and liabilities
For financial assets and liabilities subject
to settlement agreements on a net basis or similar agreements, each agreement between the Company and the counterparty allows this type
of settlement when both parties opt for this. In the absence of such a decision, the assets and liabilities will be settled at their gross
amounts, but each party shall have the option to settle on a net basis, in case of a default by the counterparty.
Risks of climate change and the sustainability
strategy
Considering the nature of the Company’s operations,
there is an inherent exposure to certain risks related to climate change, and relevant sustainability aspects.
There was no significant change in the main risks
considered by Management related to those stated in the annual financial statements as of December 31, 2022.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
24.
COLLATERAL AND CONTRACTUAL COMMITMENTS WITH SUPPLIERS, ADVANCES FROM CUSTOMERS AND OTHERS
|
06/30/2023 |
12/31/2022 |
|
|
|
Collateral given for the Company’s own liabilities |
607,627 |
764,473 |
Other commitments |
1,152,863 |
1,368,092 |
|
1,760,490 |
2,132,565 |
|
|
|
Commitments to suppliers |
43,028,179 |
50,365,256 |
|
43,028,179 |
50,365,256 |
The collateral
provided for liabilities totaled approximately R$1,760,490 as at June 30, 2023 (R$2,132,565 as at December 31, 2022), including R$586,444
(R$743,951 as at December 31, 2022) of cash guarantees. The deposits in cash used as guarantees are presented as part of other assets.
To provide the guarantees required for derivatives exchanges and/or counterparties contracted in certain derivative financial instrument
transactions, as at June 30, 2023, Ambev maintained R$163,520 (R$376,850 as at December 31, 2022) in highly liquid financial investments
or in cash, classified as cash and cash equivalents and investment securities (Note 23 –
Financial instruments and risks).
Most of the balance relates to commitments
to suppliers of packaging. These commitments have as its main goal provide strategic supplies long term security to the Company, besides
providing greater security to vendors in long term investments.
Future contractual commitments as at June 30,
2023 and December 31, 2022 are as follows:
|
06/30/2023 |
12/31/2022 |
|
|
|
Less than 1 year |
11,359,379 |
12,490,958 |
Between 1 and 2 years |
9,648,392 |
10,315,253 |
More than 2 years |
22,020,408 |
27,559,045 |
|
43,028,179 |
50,365,256 |
The Company and its subsidiaries have contingent liabilities
related to lawsuits arising in the normal course of its business. Due to their nature, such legal
proceedings involve certain uncertainties including, but not limited to, court rulings, negotiations between affected parties and governmental
actions, and therefore the Management cannot estimate the likely timing of the resolution of these matters at this stage.
Contingent
liabilities with a probable risk of loss are fully recorded as liabilities (Note 14 –
Provisions).
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The Company and its subsidiaries have administrative
and judicial discussions with tax authorities in Brazil related to certain tax treatments adopted when calculating the income tax and
social contribution, for which, based on Management’s current evaluation, is probable that the tax authorities will accept the uncertain
tax treatment, in accordance with IFRIC 23. The Company also is part at administrative and judicial lawsuits related to other taxes of
tributary nature, which involve risk of a possible loss, as assessment carried out by Management.
To these uncertain tax treatments and possible
contingencies there are no provisions recorded, due to the assessment carried out by Management, with the following composition and estimates:
|
06/30/2023 |
12/31/2022 |
|
|
|
Income tax and social contribution |
54,564,558 |
60,453,543 |
Value-added and excise taxes |
26,870,276 |
25,904,633 |
PIS and COFINS |
3,209,832 |
3,293,478 |
Others |
1,924,430 |
1,909,071 |
|
86,569,096 |
91,560,725 |
The Company and its subsidiaries have guarantee-insurance
policies and letters of guarantee for some legal actions, presented as guarantee for civil, labor and tax executions or to enable resources
of labor nature.
Principal lawsuits with a likelihood of possible loss that changed during
the period
In the period ended June 30, 2023 the main movements
in lawsuits with possible loss are detailed below by the Company.
In March 2023, the STF, when ruling on case 736
(RE 796,939), confirmed its understanding that imposing a separate fine for failure to ratify tax offsets is unconstitutional. In view
of the judgment, the Company reassessed, together with its internal lawyers and external advisors, the prognosis of the discussion and
reclassified the risk of loss from possible to remote. Ambev estimates that the amount involved in the lawsuits related to this matter,
as of March 31,2023 was R$1.6 billion (R$1.7 billion as of December 31, 2022). Due
to the prognosis of remote loss, the processes related to this theme are no longer reported as possible contingencies in the first quarter
of 2023.
PIS and COFINS
PIS/COFINS on bonuses
Since 2015, Ambev has been assessed by the Brazilian
Federal Revenue Service for the collection of amounts allegedly due as PIS and COFINS on bonuses granted to its customers. The Company is challenging these assessments in
the administrative and judicial courts because it believes that such collection is illegitimate.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
In March 2023, the CARF handed down decisions
favorable to the Company in two lawsuits, in the amount of approximately R$1.1 billion, recognizing
as correct the tax treatment given by the Company to the bonuses granted. The Company waits to be notified of these decisions in order
to assess, together with its external advisors, the filing of any appeals, as well as to eventually reassess the probability of losing
the dispute.
Ambev estimates that the amount involved in the
lawsuits as of June 30, 2023, classified as possible loss, is approximately R$1.6 billion (R$1.6 billion as of December 31, 2022).
Uncertainty
over IRPJ and CSLL treatment
Foreign Earnings
Since 2005 the Company and some of its subsidiaries
have been receiving tax assessments from the Brazilian Internal Revenue Service regarding the taxation of profits earned by subsidiaries
domiciled abroad. Because it believes that these charges are illegitimate, the Company is challenging these assessments in the administrative
and judicial courts.
The lawsuits in progress in the administrative
level have partially favorable decisions, still subject to reexamination by the administrative court. In turn, in the lawsuits underway
at the judicial level, the Company has a favorable preliminary decision in order to suspend the enforceability of the tax credit, and
decisions in favor, subject to reexamination by the higher court.
In March 2023, the Administrative Council of
Tax Appeals ("CARF") handed down decisions favorable and partially favorable to the Company in three lawsuits, amounting to
approximately R$0.9 billion. The decisions handed down canceled part of the assessments, in the amount of approximately R$0.7 billion,
recognizing as partially correct the calculations made by the Company regarding the taxable income in Brazil of companies domiciled abroad,
as well as the impossibility for the Brazilian tax authorities to disregard the amortization of the goodwill carried out by the subsidiary
abroad. The Company is awaiting notification of these decisions to analyze their contents and possible appeals and reassessment of the
probability of loss.
In May 2023, the Company was served a favorable
decision, issued by CARF in October 2022, in an approximate amount of R$1.4 billion. Of this amount, approximately R$1 billion constitutes
a definitive success already reduced, thus, from the total amount of the contingency reported in the period ending on June 30, 2023. The
remaining amount (R$0.4 billion) was subject to an appeal by the Brazilian IRS, awaiting
judgment by the Superior Chamber of Tax Appeals ("CSRF").
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The updated value of the referred uncertain tax
treatment, according to ICPC 22/IFRIC 23, already assessed, is approximately R$6.6 billion on June 30, 2023 (R$7.3 billion on December
31, 2022), and there was no provision in the period due to its loss classification, except for R$60 million (R$58 million on December
31, 2022).
Goodwill Inbev Holding
In December 2011, the Company received the first
notice of infringement issued by the Brazilian Federal Revenue Service, mainly regarding the disallowance of goodwill amortization expenses,
for the calendar years 2005 to 2010, resulting from the incorporation of InBev Holding Brasil S.A.. In the administrative level, partially
favorable decisions were made. In light of these decisions, the Company filed legal actions to discuss the matter in which it was defeated
in the administrative setting, which are awaiting judgment in the first instance.
In June 2016, Ambev received the second notice
of infringement issued by the Brazilian Federal Revenue Service, relating to the disallowance of the remaining portion of the aforementioned
goodwill, for the calendar years 2011 to 2013. In April 2023, the Company obtained a definitive partially favorable decision, resulting
in a success of approximately R$0.8 billion. For the remaining amount, Ambev initiated a legal action, which awaits judgment.
The updated amount of this tax treatment, as
per ICPC 22/IFRIC 23, already audited, is approximately R$10.7 billion on June 30, 2023 (R$11.1 billion on December 31, 2022), and, due
to its classification of loss, no provision was made in the period. In the event that the Company is required to pay this amount, Anheuser-Busch
InBev SA/NV will reimburse the proportional amount (70%) of its benefit from the mentioned goodwill amortization, as well as the respective
costs, under the "Reimbursement Agreement" executed on December 21, 2011, between Companhia de Bebidas das Américas -
Ambev and Anheuser-Busch InBev SA/NV.
Disallowance of Expenses and Deductibility
of Losses
In 2015, 2016, and 2020, the Company received
tax assessments by the Brazilian Federal Revenue Service concerning the disallowance of expenses related to the results of financial instruments
used against inherent risks of price or rate fluctuations, as well as loans related to the Company's operational activities.
In May and June 2023, Ambev was notified of definitive
favorable administrative decisions for the tax assessments received in 2016 and 2020, which fully canceled tax assessments, in an approximate
amount of R$5.1 billion.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Regarding the tax assessment in 2015, the judgment
by CARF is awaited for both the necessary reexamination of the matter and the appeal filed by the Company regarding the portion of the
first-instance decision in which it was defeated.
The updated amount of this uncertain tax treatment,
as per ICPC 22/IFRIC 23, already audited, is approximately R$306 million on June 30, 2023 (R$5.2 billion on December 31, 2022). Due to
its classification, no provision was made in the period.
Proposed class action in Quebec
Labatt and other, third-party defendants have
been named in a proposed class action lawsuit in the Superior Court of Quebec seeking unquantified compensatory and punitive damages. The
plaintiffs allege that the defendants failed to warn of certain specific health risks of consuming defendants’ alcoholic beverages. A
sub-class of plaintiffs further alleges that their diseases were caused by the consumption of defendants’ products. The proposed
class action has not yet been authorized by the Superior Court.
Contingent assets
Exclusion of ICMS and ICMS-ST from the PIS
and COFINS Tax Base
In 2017, the Brazilian Supreme Federal Court
(STF) ruled that the inclusion of ICMS in the taxable base of PIS and COFINS is unconstitutional (Topic 69 of general repercussion). The
effects and scope of this decision were reaffirmed in May 2021 when the Court confirmed that the judgment would only produce effects after
March 15, 2017, except for taxpayers who had filed judicial and administrative claims before that date (which is the case for the Company
and its subsidiaries, most of them with favorable decisions already subject to res judicata).
Specifically regarding the exclusion of ICMS
under the tax substitution regime (“ICMS-ST”), in November 2022, the Superior Court of Justice (STJ) began the trial of Topic
1,125 with a favorable vote for taxpayers, that is, for the exclusion of this type of ICMS from the taxable base of PIS and COFINS for
the substituted taxpayers, in line with the understanding applied by the Company since August 2017, due to a favorable decision obtained
that is still in force. It is expected that the trial of this topic will be resumed by the Court still in 2023.
From 2017 to 2023, the Company and its subsidiaries
recognized tax credits and had a positive impact on operations after the implementation of the favorable judicial decision for the exclusion
of ICMS-ST, in accordance with IAS 37/CPC 25 – Provisions, Contingent Liabilities, and Contingent Assets, in the amount
of R$10.5 billion, of which: (i) R$0.7 billion refers to the period from 1990 to 2009; (ii) R$4.9 billion relates to the period from
2009 to 2015, during which the so-called “REFRI” – Special Regime for Cold Beverages was in force; (iii) R$4 billion
refers to the New Taxation Model, including operations with subsidiaries, according to Note 1 – Corporate Information; and
(iv) R$0.9 billion relates to the exclusion of ICMS-ST from the taxable base of PIS and COFINS during the period of the New Taxation
Model, in addition to values related to ICMS-ST in our network of resellers that, under certain circumstances, do not comprise their
remuneration.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Part of these amounts has already been subject
to offset requests, as per the res judicata of the respective judicial measures and the necessary administrative procedures. The amounts
not yet offset remain recorded in the assets (see Note 8 – Recoverable Indirect Taxes) and largely refer to the tax credit
related to “REFRI,” the judicial lawsuit of which is still in the discovery phase.
The accounting recognition resulted from the
decisions obtained by the Group occurred considering that (i) the gain realization is virtually certain, according to the decision issued
by the STF in Topic 69, and the specific circumstances of each individual case, as well as (ii) the value can be reasonably estimated
with certainty by surveying the respective documents and quantifying the undue payment.
For additional matters related to this subject,
the contingent asset subject to estimation corresponds to approximately R$0.5 billion. Eventually, additional amounts may be disclosed
and recognized. Currently, these amounts are not probable or virtually certain since they depend on specific circumstances of each case
and on physical documentation not yet located, and consequently, it is not possible to measure the value of any tax undue payment to be
recovered. The values will be disclosed and recognized to the extent that the realization of the gain is probable and virtually certain,
respectively, and the values can be ascertained with reasonable certainty.
Policy and practices regarding the realization of transactions with
related parties
The Company adopts the corporate governance practices
recommended and/or required by the applicable laws.
Under the Company’s by-laws, the Board
of Directors is responsible for approving any transactions or agreements between the Company and/or any of its subsidiaries (except for
full subsidiaries), its directors and/or shareholders (including direct or indirect shareholders of the Company). The Governance Committee
of the Company is required to advise the Board of Directors on all transactions with related parties, among other subjects.
Management is prohibited from interfering in
any transaction in which a conflict of interest exists, even in theory, with the Company’s interests. Management also are not permitted
to interfere in decisions of any other members of
management, and the Minutes of Meeting of the Board are required to document any decision to abstain from the respective deliberations.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The Company’s guidelines on related parties
require it to follow reasonable or commutative terms, similar to those prevailing in the market, or under which the Company would contract
similar transactions with third parties. These related parties transactions are clearly disclosed in the interim financial statements
as formalized in the written contracts.
Transactions with Management members
In addition to short-term benefits (primarily
salaries), Management members are entitled to participate in the Stock Option Plan and Share-Based Payments Plan (Note 22 – Share-based
payments).
Total expenses related to the Company’s Management members
are as follows:
|
Six-month period ended: |
|
Three-month period ended: |
|
06/30/2023 |
06/30/2022 |
|
06/30/2023 |
06/30/2022 |
|
|
|
|
|
|
Short-term benefits (i) |
25,838 |
32,103 |
|
11,173 |
16,017 |
Share-based payments (ii) |
40,948 |
30,413 |
|
22,800 |
18,705 |
Total key management remuneration |
66,786 |
62,516 |
|
33,973 |
34,722 |
(i) These mainly correspond to management’s
salaries, net of social security of employer’s responsibility, and profit sharing (including performance bonuses).
(ii) These correspond to compensation expenses
of share options, restricted stocks and performance stocks granted to Management. In total amounts above exclude remuneration paid to
members of the Fiscal Council.
Excluding
the abovementioned plan (Note 22 – Share-based payments),
the Company no longer has any types of transaction with the Management members or pending balances receivable or payable in its balance
sheet.
Transactions with the Company’s shareholders:
a) Medical, dental and other benefits
Fundação Zerrenner is one
of Ambev’s shareholders, and at June 30, 2023 held 10.2% of its total share capital. Fundação Zerrenner is also an
independent legal entity whose main goal is to provide Ambev’s employees, both active and retired, with health care and dental assistance,
technical and higher education courses, and facilities for assisting elderly people, either directly or through financial assistance agreements
with other entities. As at June 30, 2023 and December 31, 2022, actuarial obligations related to the benefits provided directly by Fundação
Zerrenner were fully funded by plan assets, held for that purpose, which significantly exceeded the liabilities at these dates.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Ambev recognizes the assets (prepaid expenses)
of this plan to the extent of the economic benefits available to the Company, arising from reimbursements or from reductions in future
contributions.
The expenses incurred and recorded by
Fundação Zerrenner with third parties for providing these benefits totaled R$150,278 (R$150,116 as at June 30, 2022), of
which R$141,379 and R$8,900 were related to active employees and retirees respectively (R$130,532 and R$19,584 as at June 30, 2022 related
to active employees and retirees respectively).
b) Licensing agreement
At November, 2021, Ambev and Anheuser-Busch Inc.
negotiated the general guidelines towards royalties and transfer price to fixate royalties and mark-up percentages applicable to production,
import, distribution and sale of (a) ABI’s finished goods and/or its respective subsidiaries by the Company and/or its respective
subsidiraries (b) Company’s finished goods and/or its respective subsidiaries by ABI and/or its respective subsidiaries. All the
metrics, prices and methodologies were stablished at similar market conditions, based on a study carried out by a first-class external
audit company, duly approved by the Governance Committee and by the Board of Directors.
In this context, the Company and its subsidiaries
have some licensing agreements with Anheuser-Busch, Inc. to produce, bottle, sell and/or distribute products of brands such as Budweiser,
Stella Artois, Spaten and Corona. Likewise, the Company and its subsidiaries license to AB InBev and its subsidiaries
the right to produce and/or distribute, in several countries, products of its own brands such as Brahma.
Therefore, the Company recorded R$17,694 as at
June 30, 2023 (R$8,067 as at June 30, 2022) and R$417,772 (R$373,560 as at June 30, 2022) as licensing income and expenses, respectively.
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
Transactions with related parties
|
06/30/2023 |
Current |
Trade receivables (i) |
Other trade receivables (i) |
Trade payables (i) |
Dividends receivables |
AB Africa |
1,236 |
- |
- |
- |
AB InBev |
73,680 |
- |
(205,624) |
- |
AB Package |
- |
- |
(151,711) |
- |
AB Services |
52,345 |
- |
(4,093) |
- |
AB USA |
94,719 |
- |
(287,221) |
- |
Bavaria |
46,233 |
- |
(6,486) |
- |
Cervecería Modelo |
5,397 |
- |
(425,261) |
- |
Cervecerías Peruanas |
1,743 |
- |
(1,215) |
- |
Inbev |
1,126 |
21,659 |
(12,707) |
- |
Panama Holding |
3,965 |
- |
(424) |
1,026 |
Other |
17,971 |
28 |
(14,491) |
- |
|
298,415 |
21,687 |
(1,109,233) |
1,026 |
(i) The amount represents trading operations (purchase and sale) and
reimbursements between the companies of the group.
|
12/31/2022 |
Current |
Trade receivables (i) |
Other trade receivables (i) |
Trade payables (i) |
AB Africa |
1,584 |
- |
- |
AB InBev |
142,678 |
- |
(81,969) |
AB Package |
- |
- |
(79,325) |
AB Services |
23,738 |
- |
(5,651) |
AB USA |
71,101 |
- |
(237,741) |
Bavaria |
13,912 |
- |
(6,931) |
Cervecería Modelo |
12,044 |
- |
(345,474) |
Cervecerías Peruanas |
929 |
- |
(46,421) |
Inbev |
1,032 |
23,861 |
(12,183) |
Panama Holding |
3,850 |
- |
- |
Other |
19,815 |
947 |
(14,735) |
|
290,683 |
24,808 |
(830,430) |
(i) The amount represents trading operations (purchase and sale) and
reimbursements between the companies of the group.
|
06/30/2023 |
12/31/2022 |
Non-current |
Trade payables |
Trade payables |
ITW International |
(299,754) |
(343,556) |
|
(299,754) |
(343,556) |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
The tables below represent transactions with
related parties, recognized in the income statement:
|
Six-month period ended: 06/30/2023 |
Company |
Sales and other |
Service fees / Reimbursement of expenses and other receivables |
|
Product purchases and other |
Service fees / reimbursement of expenses and other payables |
Net finance cost |
AB InBev |
30 |
11,059 |
|
(123,669) |
(6,182) |
(104) |
AB Package |
- |
- |
|
(139,014) |
- |
- |
AB Services |
50 |
2,668 |
|
- |
- |
(3) |
AB USA |
17,664 |
- |
|
(462,795) |
(1,568) |
(42) |
Bavaria |
180,114 |
- |
|
(27,195) |
- |
- |
Cervecería Modelo |
193 |
- |
|
(574,975) |
- |
- |
Cervecerías Peruanas |
- |
- |
|
(142) |
- |
- |
GCC India |
- |
- |
|
- |
(1,785) |
- |
Inbev |
- |
- |
|
(22,778) |
- |
- |
ITW International |
- |
- |
|
- |
- |
18,554 |
Other |
20,098 |
4,228 |
|
(16,234) |
- |
1,034 |
|
218,149 |
17,955 |
|
(1,366,802) |
(9,535) |
19,439 |
|
Three-month period ended: 06/30/2023 |
Company |
Sales and other |
Service fees / Reimbursement of expenses and other receivables |
|
Product purchases and other |
Service fees / reimbursement of expenses and other payables |
Net finance cost |
AB InBev |
30 |
10,856 |
|
(68,861) |
(6,182) |
(73) |
AB Package |
- |
- |
|
(65,414) |
- |
- |
AB Services |
34 |
(41) |
|
- |
- |
(3) |
AB USA |
11,888 |
- |
|
(255,010) |
(776) |
(23) |
Bavaria |
20,992 |
- |
|
(11,177) |
- |
- |
Cervecería Modelo |
130 |
- |
|
(368,089) |
- |
- |
Cervecerías Peruanas |
- |
- |
|
(72) |
- |
- |
GCC India |
- |
- |
|
- |
(1,042) |
- |
Inbev |
- |
- |
|
(7,620) |
- |
- |
ITW International |
- |
- |
|
- |
- |
1,705 |
Other |
11,475 |
1,491 |
|
(9,188) |
- |
1,034 |
|
44,549 |
12,306 |
|
(785,431) |
(8,000) |
2,640 |
|
Six-month period ended: 06/30/2022 |
Company |
Sales and other |
Service fees /
Reimbursement of
expenses and other receivables |
|
Product purchases and other |
Service fees /
reimbursement of
expenses and other
payables |
Net finance cost |
AB InBev |
- |
5,160 |
|
(91,125) |
(4,393) |
153,909 |
AB Package |
- |
- |
|
(184,019) |
- |
- |
AB USA |
11,220 |
- |
|
(577,532) |
(1,545) |
- |
Ambev Peru |
458 |
- |
|
- |
- |
- |
Bavaria |
18,009 |
- |
|
(38,857) |
- |
- |
Cervecería Modelo |
1,776 |
- |
|
(693,229) |
- |
- |
Cervecerías Peruanas |
118 |
- |
|
(24,899) |
- |
- |
GCC India |
- |
- |
|
- |
(3,693) |
- |
Inbev |
- |
- |
|
(97,517) |
- |
- |
ITW International |
- |
- |
|
- |
- |
14,964 |
Other |
22,177 |
5,541 |
|
(52,692) |
- |
1,903 |
|
53,758 |
10,701 |
|
(1,759,870) |
(9,631) |
170,776 |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
|
Three-month period ended: 06/30/2022 |
Company |
Sales and other |
Service fees / Reimbursement of expenses and other receivables |
|
Product purchases and other |
Service fees / reimbursement of expenses and other payables |
Net finance cost |
AB InBev |
- |
5,160 |
|
(48,571) |
(4,393) |
153,909 |
AB Package |
- |
- |
|
(97,411) |
- |
- |
AB USA |
4,767 |
- |
|
(319,596) |
(729) |
- |
Ambev Peru |
127 |
- |
|
- |
- |
- |
Bavaria |
(32,100) |
- |
|
(24,067) |
- |
- |
Cervecería Modelo |
1,146 |
- |
|
(294,901) |
- |
- |
Cervecerías Peruanas |
118 |
- |
|
(17,292) |
- |
- |
GCC India |
- |
- |
|
- |
(1,703) |
- |
Inbev |
- |
- |
|
(29,451) |
- |
- |
ITW International |
- |
- |
|
- |
- |
11,642 |
Other |
6,125 |
2,282 |
|
(15,366) |
- |
1,903 |
|
(19,817) |
7,442 |
|
(846,655) |
(6,825) |
167,454 |
List of companies included in the tables above:
AB InBev Procurement GmbH (“AB Procurement”) |
Anheuser-Busch Inbev Africa (Pty) Ltd. (“AB Africa”) |
Anheuser-Busch InBev N.V. (“AB InBev”) |
Anheuser-Busch Inbev Services LLC (“AB Services”) |
Anheuser-Busch Inbev USA LLC (“AB USA”) |
Anheuser-Busch Packaging Group Inc. (“AB Package”) |
Bavaria S.A. (“Bavaria”) |
Cervecería Modelo de Mexico S. de R.L. de C.V. (“Cervecería Modelo”) |
Cervecería Nacional S de RL (“Panamá Holding”) |
Compañia Cervecera Ambev Peru S.A.C. (“Ambev Peru”) |
GCC Services India Private Ltd. (“GCC India”) |
Inbev Belgium N.V. (“Inbev”) |
Interbrew International B.V. (“ITW International”) |
Unión de Cervecerias Peruanas Backus Y Johnston S.A.A. (“Cervecerías Peruanas”) |
AMBEV S.A. |
|
Notes to the interim consolidated financial statements For the period ended June 30, 2023 All amounts in thousands of Brazilian Reais unless otherwise stated |
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 16, 2023
|
|
|
|
AMBEV S.A. |
|
|
|
|
By: |
/s/ Lucas Machado Lira |
|
Lucas Machado Lira
Chief Financial and Investor Relations Officer |
Ambev (NYSE:ABEV)
Historical Stock Chart
From May 2024 to Jun 2024
Ambev (NYSE:ABEV)
Historical Stock Chart
From Jun 2023 to Jun 2024