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 November, 2024
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
September 30, 2024
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 September 30, 2024, the related interim consolidated income statement and comprehensive income for the quarter and nine-month period then ended and the related interim consolidated statement of changes in equity and cash flows for the nine-month period then ended and notes, comprising a summary of material 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, November 7, 2024
PricewaterhouseCoopers | Sérgio Eduardo Zamora | |
Auditores Independentes Ltda. | Contador CRC 1SP168728/O-4 | |
CRC 2SP000160/O-5 |
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
AMBEV S.A. |
INTERIM CONSOLIDATED BALANCE SHEET
All amounts in thousands of Brazilian Reais
Assets | Note | 09/30/2024 | 12/31/2023 |
Cash and cash equivalents | 5.1 | 19,784,362 | 16,059,003 |
Investment securities | 5.2 | 1,154,677 | 277,164 |
Trade receivables | 6,087,501 | 5,741,457 | |
Derivative financial instruments | 21 | 533,652 | 378,049 |
Inventories | 6 | 11,093,344 | 9,619,022 |
Recoverable taxes | 7 | 2,471,625 | 3,435,688 |
Other assets | 1,547,769 | 1,052,667 | |
Current assets | 42,672,930 | 36,563,050 | |
Investment securities | 5.2 | 248,018 | 242,168 |
Derivative financial instruments | 21 | 2,394 | 1,673 |
Recoverable taxes | 7 | 11,264,799 | 11,325,096 |
Deferred tax assets | 8.1 | 9,138,239 | 7,969,592 |
Other assets | 1,353,088 | 1,520,701 | |
Employee benefits | 65,588 | 57,261 | |
Long term assets | 22,072,126 | 21,116,491 | |
Investments in associates and joint ventures | 328,000 | 289,063 | |
Property, plant and equipment | 9 | 28,767,577 | 26,630,156 |
Intangible assets | 11,552,331 | 10,041,733 | |
Goodwill | 10 | 41,893,397 | 38,003,640 |
Non-current assets | 104,613,431 | 96,081,083 | |
Total assets | 147,286,361 | 132,644,133 |
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
INTERIM CONSOLIDATED BALANCE SHEET (CONTINUED)
All amounts in thousands of Brazilian Reais
Equity and liabilities | Note | 09/30/2024 | 12/31/2023 |
Trade payables | 11 | 21,071,847 | 23,195,101 |
Derivative financial instruments | 21 | 185,193 | 751,362 |
Interest-bearing loans and borrowings | 12 | 1,211,089 | 1,298,091 |
Payroll and social security payables | 2,531,598 | 2,128,547 | |
Dividends and interest on shareholders’ equity payable | 1,666,361 | 1,526,151 | |
Income tax and social contribution payable | 1,604,295 | 1,340,492 | |
Taxes and contributions payable | 4,086,606 | 6,236,626 | |
Other liabilities, including put option granted on subsidiaries | 2,815,795 | 4,110,138 | |
Provisions | 13 | 500,330 | 418,389 |
Current liabilities | 35,673,114 | 41,004,897 | |
Trade payables | 11 | 343,425 | 307,300 |
Derivative financial instruments | 21 | - | 11,643 |
Interest-bearing loans and borrowings | 12 | 2,169,184 | 2,202,975 |
Deferred tax liabilities | 8.1 | 4,567,515 | 3,318,448 |
Income tax and social contribution payable | 1,339,757 | 1,487,125 | |
Taxes and contributions payable | 572,973 | 513,315 | |
Other liabilities, including put option granted on subsidiaries | 944,668 | 1,083,221 | |
Provisions | 13 | 620,990 | 559,614 |
Employee benefits | 2,170,658 | 2,011,793 | |
Non-current liabilities | 12,729,170 | 11,495,434 | |
Total liabilities | 48,402,284 | 52,500,331 | |
Equity | 14 | ||
Issued capital | 58,226,036 | 58,177,929 | |
Reserves | 98,560,814 | 98,669,404 | |
Carrying value adjustments | (73,481,018) | (77,878,043) | |
Retained earnings/(losses) | 14,834,556 | - | |
Equity attributable to Ambev’s shareholders | 98,140,388 | 78,969,290 | |
Non-controlling interests | 743,689 | 1,174,512 | |
Total equity | 98,884,077 | 80,143,802 | |
Total equity and liabilities | 147,286,361 | 132,644,133 |
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
INTERIM CONSOLIDATED INCOME STATEMENT
For the three and nine-month periods ended September 30
All amounts in thousands of Brazilian Reais unless otherwise stated
Nine-month period ended: | Three-month period ended: | |||||
Note | 2024 | 2023 | 2024 | 2023 | ||
Net sales | 16 | 62,417,251 | 59,747,622 | 22,096,739 | 20,317,765 | |
Cost of sales | (31,091,577) | (29,990,311) | (10,972,603) | (10,223,018) | ||
Gross profit | 31,325,674 | 29,757,311 | 11,124,136 | 10,094,747 | ||
Distribution expenses | (8,269,753) | (8,206,220) | (2,828,265) | (2,607,819) | ||
Commercial expenses | (6,123,679) | (5,608,527) | (2,028,008) | (1,776,858) | ||
Administrative expenses | (4,313,400) | (3,893,180) | (1,530,002) | (1,272,024) | ||
Other operating income/(expenses) | 17 | 1,707,934 | 1,352,248 | 595,321 | 474,735 | |
Exceptional items | 18 | (48,178) | (167,948) | (18,882) | (16,643) | |
Income from operations | 14,278,598 | 13,233,684 | 5,314,300 | 4,896,138 | ||
Finance income | 19 | 1,646,048 | 1,547,633 | 515,567 | 488,284 | |
Finance expenses | 19 | (2,853,655) | (4,225,851) | (936,110) | (1,299,888) | |
Other net financial results | 19 | (496,085) | (231,024) | (260,982) | (26,292) | |
Net financial results (i) | (1,703,692) | (2,909,242) | (681,525) | (837,896) | ||
Share of results of associates and joint ventures | 1,822 | (15,163) | 36,844 | 1,440 | ||
Income before income tax | 12,576,728 | 10,309,279 | 4,669,619 | 4,059,682 | ||
Income tax expense | 8.1 | (2,754,357) | 122,734 | (1,103,318) | (44,678) | |
Net income | 9,822,371 | 10,432,013 | 3,566,301 | 4,015,004 | ||
Attributable to: | ||||||
Equity holders of Ambev | 9,556,858 | 10,114,289 | 3,460,273 | 3,911,740 | ||
Non-controlling interest | 265,513 | 317,724 | 106,028 | 103,264 | ||
Basic earnings per share – common – R$ | 0.6073 | 0.6424 | 0.2200 | 0.2484 | ||
Diluted earnings per share – common – R$ | 0.6040 | 0.6384 | 0.2188 | 0.2469 |
(i) As detailed in note 19 – Net financial results, as of the first quarter of 2024 the Company improved the split between financial result lines, including for comparative purposes.
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the three and nine-month periods ended September 30
All amounts in thousands of Brazilian Reais
Nine-month period ended: | Three-month period ended: | ||||
2024 | 2023 | 2024 | 2023 | ||
Net income | 9,822,371 | 10,432,013 | 3,566,301 | 4,015,004 | |
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 | (74,043) | 135,744 | 22,643 | (61,976) | |
Gains/losses on translation of other foreign operations | 4,133,385 | (5,845,467) | (1,174,030) | (532,452) | |
Gains/losses on translation of foreign operations | 4,059,342 | (5,709,723) | (1,151,387) | (594,428) | |
Cash flow hedge – gains/(losses) | |||||
Recognized in equity (Hedge reserve) | 152,046 | (32,851) | (134,157) | 635,991 | |
Reclassified from equity (Hedge reserve) and included in profit or loss | (256,138) | (5,949) | (217,778) | 111,221 | |
Total cash flow hedge | (104,092) | (38,800) | (351,935) | 747,212 | |
Items that will not be reclassified to profit or loss: | |||||
Re-measurements of post-employment benefits | 496 | 3,961 | (365) | (269) | |
Other comprehensive (loss)/income | 3,955,746 | (5,744,562) | (1,503,687) | 152,515 | |
Total comprehensive (loss)/income | 13,778,117 | 4,687,451 | 2,062,614 | 4,167,519 | |
Attributable to: | |||||
Equity holders of Ambev | 13,453,868 | 4,433,195 | 1,999,486 | 4,027,481 | |
Non-controlling interest | 324,249 | 254,256 | 63,128 | 140,038 |
The consolidated statement of comprehensive income is presented net of income tax. The income tax effects of these items are disclosed in note 8 –Income tax and social contribution.
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the nine-month period ended September 30
All amounts in thousands of Brazilian Reais
Equity attributable to Ambev’s holders | |||||||||
Issued capital | Capital reserves | Profit 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 | - | - | - | 10,114,289 | - | 10,114,289 | 317,724 | 10,432,013 | |
Comprehensive income: | |||||||||
Gains/(losses) on cumulative translation adjustment [CTA] | - | - | - | (5,647,643) | (5,647,643) | (62,080) | (5,709,723) | ||
Cash flow hedges | - | - | - | (37,590) | (37,590) | (1,210) | (38,800) | ||
Actuarial gains/(losses) | - | - | - | 4,139 | 4,139 | (178) | 3,961 | ||
Total comprehensive income | - | - | - | 10,114,289 | (5,681,094) | 4,433,195 | 254,256 | 4,687,451 | |
Capital increase (note 14) | 47,412 | (32,869) | - | - | - | 14,543 | - | 14,543 | |
Effect of application of IAS 29 (hyperinflation) | - | - | - | 3,656,397 | - | 3,656,397 | 9,556 | 3,665,953 | |
Options granted on subsidiaries | - | - | - | - | 6,666 | 6,666 | - | 6,666 | |
Gains/(losses) of controlling interest | - | - | - | - | 811 | 811 | - | 811 | |
Tax on deemed dividends | - | - | - | - | (12,467) | (12,467) | - | (12,467) | |
Dividends paid | - | - | - | - | - | - | (331,215) | (331,215) | |
Share buyback, results from treasury shares and share-based payments | - | 200,122 | - | - | - | 200,122 | 1,487 | 201,609 | |
At September 30, 2023 | 58,177,929 | 55,506,947 | 36,906,900 | 13,770,686 | (74,107,562) | 90,254,900 | 1,306,278 | 91,561,178 |
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
For the nine-month period ended September 30
All amounts in thousands of Brazilian Reais
Equity attributable to Ambev’s holders | |||||||||
Issued capital | Capital reserves | Profit reserves | Retained earnings | Carrying value adjustments | Total | Non-controlling interests | Total equity | ||
At January 1, 2024 | 58,177,929 | 55,479,564 | 43,189,840 | - | (77,878,043) | 78,969,290 | 1,174,512 | 80,143,802 | |
Net Income | - | - | - | 9,556,858 | - | 9,556,858 | 265,513 | 9,822,371 | |
Comprehensive income: | |||||||||
Gains/(losses) on cumulative translation adjustment [CTA] | - | - | - | 3,998,332 | 3,998,332 | 61,010 | 4,059,342 | ||
Cash flow hedges | - | - | - | (101,858) | (101,858) | (2,234) | (104,092) | ||
Actuarial gains/(losses) | - | - | - | 536 | 536 | (40) | 496 | ||
Total comprehensive income | - | - | - | 9,556,858 | 3,897,010 | 13,453,868 | 324,249 | 13,778,117 | |
Capital increase (note 14) | 48,107 | - | - | - | - | 48,107 | - | 48,107 | |
Effect of application of IAS 29 (hyperinflation) | - | - | - | 5,256,878 | - | 5,256,878 | 10,589 | 5,267,467 | |
Gains/(losses) of controlling interest | - | 1,958 | - | - | 517,291 | 519,249 | (518,385) | 864 | |
Tax on deemed dividends | - | - | - | - | (17,276) | (17,276) | - | (17,276) | |
Dividends paid | - | - | - | - | - | - | (248,391) | (248,391) | |
Share buyback, results from treasury shares and share-based payments | - | (110,548) | - | - | - | (110,548) | 1,115 | (109,433) | |
Prescribed/(complementary) dividends | - | - | - | 20,820 | - | 20,820 | - | 20,820 | |
At September 30, 2024 | 58,226,036 | 55,370,974 | 43,189,840 | 14,834,556 | (73,481,018) | 98,140,388 | 743,689 | 98,884,077 |
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the three and nine-month periods ended September 30
All amounts in thousands of Brazilian Reais
Nine-month period ended: | Three-month period ended: | |||||
Note | 2024 | 2023 | 2024 | 2023 | ||
Net income | 9,822,371 | 10,432,013 | 3,566,301 | 4,015,004 | ||
Adjustments by: | ||||||
Depreciation, amortization and impairment | 5,082,448 | 4,902,238 | 1,730,270 | 1,671,482 | ||
Impairment losses on receivables and inventory | 245,746 | 272,126 | 68,443 | 87,934 | ||
Additions/(reversals) in provisions and employee benefits | 210,409 | 107,301 | 79,366 | 35,216 | ||
Net financial results | 19 | 1,703,692 | 2,909,242 | 681,525 | 837,896 | |
Losses/(gains) on sale of property, plant and equipment and intangible assets | (74,887) | (54,551) | (32,998) | (11,978) | ||
Share-based payment expenses | 20 | 287,241 | 269,671 | 102,759 | 87,761 | |
Income tax expense | 8 | 2,754,357 | (122,734) | 1,103,318 | 44,678 | |
Share of results of associates and joint ventures | (1,822) | 15,163 | (36,844) | (1,440) | ||
Hedge operations | 21.2 | (374,885) | (239,937) | (345,416) | 1,367 | |
Other non-cash items included in profit | - | (9,031) | - | - | ||
Cash flow from operating activities before changes in working capital | 19,654,670 | 18,481,501 | 6,916,724 | 6,767,920 | ||
(Increase)/decrease in trade and other receivables | (264,803) | (581,478) | 19,185 | (373,086) | ||
(Increase)/decrease in inventories | (1,270,465) | 833,952 | 78,927 | 996,543 | ||
Increase/(decrease) in trade and other payables | (3,426,717) | (5,612,067) | 946,601 | 273,352 | ||
Cash generated from operations | 14,692,685 | 13,121,908 | 7,961,437 | 7,664,729 | ||
Interest paid | (404,664) | (552,361) | (133,940) | (264,494) | ||
Interest received | 1,098,880 | 629,430 | 346,209 | 256,985 | ||
Dividends received | 21,411 | 11,213 | 10,032 | 5,935 | ||
Income tax paid | (3,223,555) | (2,447,773) | (75,306) | 259,824 | ||
Cash flow from operating activities | 12,184,757 | 10,762,417 | 8,108,432 | 7,922,979 | ||
Proceeds from sales of property, plant and equipment and intangible assets | 117,484 | 83,769 | 26,521 | 25,493 | ||
Acquisitions of property, plant and equipment and intangible assets | (3,229,988) | (3,731,380) | (1,186,002) | (1,282,685) | ||
Proceeds/(acquisitions) of subsidiaries, net of cash acquired | 3,373 | (46,507) | (186) | (46,507) | ||
Capital increase in associates and subsidiaries | - | (6,334) | - | 2,087 | ||
Investments in short-term debt securities and net proceeds/(acquisitions) of debt securities | (877,164) | 191,231 | 32,060 | 91,488 | ||
Net proceeds/(acquisitions) of other assets | (6,424) | - | (6,424) | - | ||
Cash flow from/(used in) investing activities | (3,992,719) | (3,509,221) | (1,134,031) | (1,210,124) | ||
Capital increase | 17,486 | 14,543 | - | - | ||
Capital increase/(decrease) of non-controlling interest | (1,343) | - | (46) | - | ||
Proceeds/(buyback) treasury shares | (367,555) | (79,149) | (228) | (54,067) | ||
Acquisitions of non-controlling interest | (1,716,959) | - | - | - | ||
Proceeds from borrowings | 460,300 | 39,482 | 27,057 | 1,120 | ||
Repayment of borrowings | (557,375) | (180,036) | (49,534) | (48,045) | ||
Cash net of finance costs other than interests | (1,741,399) | (2,800,028) | (647,635) | (861,426) | ||
Payment of lease liabilities | (994,874) | (827,594) | (327,556) | (314,250) | ||
Dividends and interest on shareholders’ equity paid | (187,504) | (292,170) | (89,948) | (125,381) | ||
Cash flow from/(used in) financing activities | (5,089,223) | (4,124,952) | (1,087,890) | (1,402,049) | ||
Net increase/(decrease) in cash and cash equivalents | 3,102,815 | 3,128,244 | 5,886,511 | 5,310,806 | ||
Cash and cash equivalents less bank overdrafts at the beginning of the year | 16,059,003 | 14,852,092 | 14,154,434 | 12,013,065 | ||
Effect of exchange rate fluctuations on cash and cash equivalents | 622,544 | (567,860) | (256,583) | 88,605 | ||
Cash and cash equivalents less bank overdrafts at the end of the year | 19,784,362 | 17,412,476 | 19,784,362 | 17,412,476 |
The accompanying notes are an integral part of these interim consolidated financial statements.
AMBEV S.A. |
1. | CORPORATE INFORMATION |
1.1 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 social 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 Group portfolio includes several own brands, like Brahma®, Skol®, Antarctica®, Original®, Colorado®, Bohemia®, Serramalte®, Quilmes®, Patagonia®, Guaraná Antarctica®, Beats® among others, and licensed brands, like Budweiser®, Corona®, Stella Artois®, Spaten® Beck’s® and Mike’s®.
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”), AmBrew S.à.r.l (“Ambrew”), both of which are subsidiaries of Anheuser-Busch InBev N.V. (“AB InBev”).
2. | BASIS OF PREPARATION AND PRESENTATION OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS |
The interim consolidated financial statements on September 30, 2024 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 consolidated financial statements and are disclosed with relevant information and changes in the period, without the level of detail in certain accompanying notes previously disclosed, avoiding repetition which, in Management's opinion, provides an understanding of the Company's equity position and performance during the interim period. Therefore, the consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2023, prepared in accordance with International Financial Reporting Standards (“IFRS®”) issued by the IASB®.
The following notes are not disclosed in the interim consolidated financial statements:
Name of accompanying note in annual financial statements | Accompanying note | |
(a) | Payroll and related benefits | 9 |
(b) | Additional information on cost of sales and operating expenses by nature | 10 |
(c) | Earnings per share | 12 |
(d) | Impairment of non-financial assets | 16 |
(e) | Intangibles | 17 |
(f) | Trade receivables | 20 |
(g) | Employee benefits | 24 |
AMBEV S.A. |
In addition, the material accounting policies presented in the respective accompanying notes are not disclosed in these interim consolidated financial statements. The following notes are not in the same level of detail presented in the annual consolidated financial statements, for the year ended December 31, 2023:
Name of accompanying note in annual financial statements | Accompanying note | |
(a) | Summary of material accounting policies | 3 |
(b) | Use of estimates and judgments | 4 |
(c) | Income tax and social contribution | 13 |
(d) | Goodwill | 15 |
(e) | Changes in equity | 22 |
(f) | Interest-bearing loans and borrowing | 23 |
(g) | Share-based payments | 25 |
(h) | Provisions, contingent liabilities and contingent asset | 27 |
(i) | Financial instruments and risks | 28 |
(j) | Related parties | 30 |
In preparing the interim consolidated financial statements, management uses judgments, estimates and assumptions that affect the application of accounting practices and the reported amounts of assets, liabilities, income and expenses. The relevant estimates and judgments are disclosed in note 4 - Use of estimates and judgments.
The interim consolidated financial statements were approved, in their final form, by the Board of Directors on October 30, 2024.
2.1 Functional and presentation currency
The functional and presentation currency of the Company interim consolidated financial statements is the Brazilian Real, which is the currency of its main economic operating environment. For presentation purposes, the interim consolidated financial statements are presented in thousands of Brazilian Reais (“R$”), unless otherwise indicated, rounded to the nearest thousand.
Foreign currency transactions are registered using the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated using the balance sheet date rate. Non-monetary assets and liabilities denominated in foreign currencies are translated using the foreign exchange rate prevailing as at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies stated at fair value are translated using the exchange rate in force as at the date on which the fair value was determined. Gains and losses arising from the settlement of transactions in foreign currencies and resulting from the conversion of assets and liabilities denominated in foreign currencies are recognized in the income statement.
Assets and liabilities of subsidiaries located abroad are translated using the foreign exchange rates prevailing at the balance sheet date, while amounts from the income statement and cash flow are translated utilizing the average exchange rate for the year, and changes in equity are translated at the historical exchange rate of each transaction. Translation adjustments arising from the difference between the average exchange rates and the historical rates are recorded directly in Carrying value adjustments.
In the consolidation process, exchange differences arising from the translation of equity in foreign operations and borrowing and other currency instruments designated as net investment hedges are recognized in Carrying value adjustments, an equity reserve, and included in Other comprehensive income.
AMBEV S.A. |
Even when recorded in the acquiring entity, the goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the foreign exchange rate at the balance sheet date.
2.1.1 Exchange rates
The most significant exchange rates used for the preparation of the Company’s interim consolidated financial statements are as follow:
Closing rate | Average rate | |||||||||
Nine-month period ended: | Three-month period ended: | |||||||||
Currency | Name | Country | 09/30/2024 | 12/31/2023 | 09/30/2024 | 09/30/2023 | 06/30/2024 | 06/30/2023 | ||
ARS | Argentinian Peso | Argentina | 0.0056 | 0.0060 | 0.0058 | 0.0203 | 0.0058 | 0.0240 | ||
BBD | Barbadian Dollar | Barbados | 2.6857 | 2.3866 | 2.5722 | 2.4717 | 2.4767 | 2.5225 | ||
BOB | Bolivian Peso | Bolivia | 0.7828 | 0.6956 | 0.7497 | 0.7204 | 0.7218 | 0.7352 | ||
CAD | Canadian Dollar | Canada | 4.0307 | 3.6536 | 3.8361 | 3.7174 | 3.7058 | 3.7682 | ||
CLP | Chilean Peso | Chile | 0.0061 | 0.0055 | 0.0056 | 0.0061 | 0.0054 | 0.0063 | ||
GTQ | Quetzal | Guatemala | 0.7089 | 0.6189 | 0.6718 | 0.6401 | 0.6455 | 0.6542 | ||
USD | US Dollar | Panamá and Cuba | 5.4481 | 4.8413 | 5.2179 | 5.0140 | 5.0241 | 5.1171 | ||
PYG | Guarani | Paraguay | 0.0007 | 0.0007 | 0.0007 | 0.0007 | 0.0007 | 0.0007 | ||
DOP | Dominican Peso | Dominican Republic | 0.0904 | 0.0831 | 0.0883 | 0.0899 | 0.0853 | 0.0921 | ||
UYU | Uruguayan Peso | Uruguay | 0.1308 | 0.1241 | 0.1330 | 0.1303 | 0.1297 | 0.1311 |
3. | SUMMARY OF MATERIAL ACCOUNTING POLICIES |
The accounting practices adopted by the Company are consistent in the both years presented. There were no changes in the accounting policies and calculation methods used for the interim consolidated financial statements as at September 30, 2024 compared to those presented in the consolidated financial statements for the years ended December 31, 2023.
3.1 Recently issued IFRS
The changes in standards and new standards, which became effective in 2024 are not applicable or did not have any material impact in these consolidated financial statements. The main changes in accounting standards which, in management's assessment, could possibly generate an impact on subsequent disclosures follows:
(i) | In December 2021, the Organisation for Economic Cooperation and Development ("OECD"), as part of the Inclusive Framework on Base Erosion and Profit Shifting ("BEPS") project, released the Global Model Rules Against Base Erosion (or Global Anti-Base Erosion Model Rules - GloBE), part of “Pilar Two” project, aiming at a common approach to international corporate taxation, in order to ensure that multinational economic groups within the scope of these rules calculate income taxes at a minimum effective rate of 15% in each country where it operates. These rules will have to be approved locally in each country that adheres to the proposal, via applicable legislation. A few countries in which the company operates have already promulgated new laws or are in the process of discussing and approving them. |
AMBEV S.A. |
In May 2023, the IASB® issued scope changes to IAS 12 – Income Taxes that allows a temporary exemption in accounting for deferred income taxes arising from promulgated or substantially promulgated legislation implementing OECD Pillar Two, an exemption which has been adopted by the Group.
In the Group's case, the Pillar Two Rules are effective in 2024 in some jurisdictions without material impacts in the interim financial statements as of September 30, 2024. In Brazil, on October 3, 2024, after the period ended, were published the Provisional Measure No. 1.262/24 and RFB Normative Instruction No. 2.228/24, effective as of January 1, 2025, with has the purpose of adapting Brazilian tax legislation to the Global Anti-Base Erosion Model Rules (GloBE rules) and implementing the additional Social Contribution on Net Income (CSLL), to establish a minimum effective tax rate of 15%. The Company's analysis of the potential impacts of this new legislation on its financial statements is in progress.
(ii) | In August 2023, IASB® issued amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates. The modifications implemented provides the application of a consistent approach when assessing whether a currency is exchangeable for another currency as well as new guidelines on measurement and disclosure in contexts where the currency is not considered exchangeable. The Company is evaluating potential impacts from these amendments, which is required to be adopted for annual reporting periods beginning on or after 1 January 2025. |
(iii) | In April 2024, IASB® issued the IFRS 18 - Presentation and Disclosure in Financial Statements. This standard will replace IAS 1 - Presentation of Financial Statements, for the preparation of financial statements beginning on or after January 1, 2027. The standard intends to address investor demands for more relevant and comparable information disclosed in entities' financial statements. IFRS 18 introduces changes to the income statement with three new categories of income and expenses - operating, investing, and financing - two mandatory subtotals, and changes in the grouping of balances. Additionally, it introduces mandatory disclosures in the notes on management-defined performance measures, changes to the statement of cash flows, and new requirements for presenting expenses by nature or function. The Group is currently assessing the impacts of adopting this standard on its consolidated financial statements. |
Regarding the amendments to IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments: Disclosures, which establish new disclosure requirements for financing transactions with suppliers, the so-called "Supplier Finance Arrangements". The Group has evaluated the changes and has not identified the necessity for additional disclosures in its consolidated financial statements.
In addition, there are no other standards, standard changes or IFRIC interpretations that still haven’t been in force and that may have a material impact in entity’s consolidated financial statements. The company also has not adopted any standards in advance.
4. | USE OF ESTIMATES AND JUDGMENTS |
The preparation of interim consolidated 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 several 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.
AMBEV S.A. |
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.
The accounting policy which reflects significant estimates and judgments used in the preparation of these interim consolidated financial statements for the nine-month period ended September 30, 2024 have not changed from those valid on December 31, 2023.
AMBEV S.A. |
5. | CASH AND CASH EQUIVALENTS AND INVESTMENT SECURITIES |
5.1 Cash and equivalents
09/30/2024 | 12/31/2023 | |
Cash | 137,928 | 267,077 |
Current bank accounts | 8,578,606 | 6,818,336 |
Short-term bank deposits (i) | 11,067,828 | 8,973,590 |
Cash and cash equivalents | 19,784,362 | 16,059,003 |
(i) The balance refers mostly to Bank Deposit Certificates (“CDBs”), high liquidity bonds, 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 includes the amount of R$3,664 million as at September 30, 2024 (R$3,768 million in December 31, 2023), which is not freely transferable to the parent company due to remittance restrictions in Cuba and Argentina, although available for use in the local operations of the subsidiaries in question.
5.2 Investment securities
09/30/2024 | 12/31/2023 | |
Financial assets at fair value through profit or loss | 1,154,677 | 277,164 |
Current assets | 1,154,677 | 277,164 |
Investment on debt securities (i) | 248,018 | 242,168 |
Non-current assets | 248,018 | 242,168 |
Total | 1,402,695 | 519,332 |
(i) The balance refers substantially to financial investments linked to tax incentives that are not readily convertible into a known amount of cash.
6. | INVENTORIES |
09/30/2024 | 12/31/2023 | |
Finished goods | 4,188,336 | 2,990,337 |
Work in progress | 766,846 | 826,520 |
Raw materials and consumables | 4,661,081 | 4,599,874 |
Spare parts and others | 974,041 | 806,867 |
Prepayments | 629,180 | 537,871 |
Impairment losses | (126,140) | (142,447) |
11,093,344 | 9,619,022 |
AMBEV S.A. |
The changes in impairment losses on inventory are as follows:
09/30/2024 | 12/31/2023 | |
Balance at the end of the previous year | (142,447) | (160,173) |
Effects of cumulative translation adjustment (CTA) | (9,665) | 12,932 |
Provisions | (176,132) | (262,884) |
Write-offs | 202,104 | 267,678 |
Balance at the end of the period | (126,140) | (142,447) |
7. | RECOVERABLE TAXES |
09/30/2024 | 12/31/2023 | |
PIS/COFINS exclusion of ICMS (i) | 287,179 | 219,010 |
PIS/COFINS | 69,585 | 170,426 |
ICMS | 357,021 | 426,936 |
IPI | 120,676 | 112,541 |
Income tax and social contributions | 1,536,252 | 2,436,614 |
Other | 100,912 | 70,161 |
Current | 2,471,625 | 3,435,688 |
PIS/COFINS exclusion of ICMS (i) | 6,695,512 | 6,490,398 |
ICMS | 378,209 | 436,508 |
Income tax and social contributions | 3,870,133 | 4,087,032 |
Other | 320,945 | 311,158 |
Non-current | 11,264,799 | 11,325,096 |
Total | 13,736,424 | 14,760,784 |
(i) Over the last few years, as disclosed in the respective annual consolidated financial statements, the Company recognized at the income statement PIS and COFINS credits arising from the exclusion of ICMS, including in the form of tax substitution, from the calculation basis. The effect of that entry impacts the balance sheet, in the item Recoverable PIS/COFINS – exclusion of ICMS, according to the table above.
AMBEV S.A. |
8. | INCOME TAX AND SOCIAL CONTRIBUTION |
8.1 Deferred income tax and social contribution
The details of the amount of deferred income tax and social contribution by type of temporary difference are as follows:
09/30/2024 | 12/31/2023 | ||||||
Assets | Liabilities | Net | Assets | Liabilities | Net | ||
Investment securities | 8,147 | - | 8,147 | 8,231 | - | 8,231 | |
Intangible | - | (1,904,063) | (1,904,063) | - | (1,369,738) | (1,369,738) | |
Employee benefits | 915,866 | - | 915,866 | 856,512 | - | 856,512 | |
Trade payables | 3,401,435 | - | 3,401,435 | 2,843,806 | (3,281) | 2,840,525 | |
Trade receivables | 32,671 | (5,186) | 27,485 | 43,807 | (7,002) | 36,805 | |
Derivative financial instruments | 31,040 | (115,513) | (84,473) | 31,091 | (77,210) | (46,119) | |
Interest-bearing loans and borrowings | 8,411 | - | 8,411 | 7,518 | - | 7,518 | |
Inventories | 61,521 | (112,288) | (50,767) | 268,589 | (59,561) | 209,028 | |
Property, plant and equipment | 1,053,481 | (2,333,388) | (1,279,907) | 714,218 | (1,837,179) | (1,122,961) | |
Withholding tax on undistributed profits and royalties | - | (1,849,673) | (1,849,673) | - | (1,385,500) | (1,385,500) | |
Investments in associates and joint ventures | - | (383,678) | (383,678) | - | (383,678) | (383,678) | |
Interest on shareholders’ equity | 881,777 | - | 881,777 | - | - | - | |
Tax losses carryforward | 4,064,849 | - | 4,064,849 | 4,383,261 | - | 4,383,261 | |
Provisions | 1,352,230 | (14,408) | 1,337,822 | 1,026,343 | (4,637) | 1,021,706 | |
Complement of income tax of foreign subsidiaries due in Brazil | - | (136,628) | (136,628) | - | - | - | |
Impact of the adoption of IFRS 16 (Leases) | - | (40,065) | (40,065) | 14,484 | (19,679) | (5,195) | |
Exclusion of ICMS from PIS/COFINS calculation basis | - | (75,842) | (75,842) | - | (228,510) | (228,510) | |
Other items | 257,780 | (527,752) | (269,972) | 266,340 | (437,081) | (170,741) | |
Gross deferred tax assets/(liabilities) | 12,069,208 | (7,498,484) | 4,570,724 | 10,464,200 | (5,813,056) | 4,651,144 | |
Netting by taxable entity | (2,930,969) | 2,930,969 | - | (2,494,608) | 2,494,608 | - | |
Net deferred tax assets/(liabilities) | 9,138,239 | (4,567,515) | 4,570,724 | 7,969,592 | (3,318,448) | 4,651,144 |
Among the deferred tax assets on tax losses carryforward, the tax authorities unilaterally offset in tax proceedings the total amount of R$268,602 (R$268,602 in December 31, 2023), which is equivalent to R$790,005 (R$790,005 in December 31, 2023) in tax losses basis. Such proceedings are classified as having a possible likelihood of loss.
AMBEV S.A. |
8.1.1 Realization of deferred taxes
As at September 30, 2024 the deferred tax assets and liabilities are expected to be utilized/settled, as follows:
09/30/2024 | |||
Deferred taxes not related to tax losses | to be realized until 12 months | to be realized after 12 months | Total |
Investment securities | - | 8,147 | 8,147 |
Intangible | - | (1,904,063) | (1,904,063) |
Employee benefits | 223,967 | 691,899 | 915,866 |
Trade payables | (55,958) | 3,457,393 | 3,401,435 |
Trade receivables | 23,393 | 4,092 | 27,485 |
Derivative financial instruments | (86,560) | 2,087 | (84,473) |
Interest-bearing loans and borrowings | - | 8,411 | 8,411 |
Inventories | (49,429) | (1,338) | (50,767) |
Property, plant and equipment | 16,166 | (1,296,073) | (1,279,907) |
Withholding tax on undistributed profits and royalties | - | (1,849,673) | (1,849,673) |
Investments in associates and joint ventures | - | (383,678) | (383,678) |
Interest on shareholders’ equity | 881,777 | - | 881,777 |
Provisions | 597,922 | 739,900 | 1,337,822 |
Complement of income tax of foreign subsidiaries due in Brazil | (136,628) | - | (136,628) |
Impact of the adoption of IFRS 16 (Leases) | - | (40,065) | (40,065) |
Exclusion of ICMS from PIS/COFINS calculation basis | - | (75,842) | (75,842) |
Other items | (124,549) | (145,423) | (269,972) |
Total | 1,290,101 | (784,226) | 505,875 |
Deferred tax related to tax losses carryforward | 09/30/2024 |
2025 | 373,730 |
2026 | 1,509,387 |
2027 | 787,200 |
2028 to 2030 | 1,049,307 |
2031 onward (i) | 345,225 |
Total | 4,064,849 |
(i) The Company has no tax losses expected to be realized in more than 10 years.
8.1.2 Changes in deferred taxes
The net change in deferred income tax and social contribution is detailed as follows:
At December 31, 2023 | 4,651,144 |
Recognition of actuarial gains/(losses) | (92) |
Cash flow hedge – gains/(losses) | (206,991) |
Gains/(losses) on cumulative translation adjustment [CTA] | 622,819 |
Recognized in other comprehensive income | 415,736 |
Recognized in the income statement | 636,039 |
Changes directly in the balance sheet | (1,132,195) |
Recognized in deferred tax | (726,753) |
Effect of application of IAS 29 (hyperinflation) | (726,753) |
Recognized in other balance sheet group | (405,442) |
At September 30, 2024 | 4,570,724 |
AMBEV S.A. |
8.1.3 Deferred tax asset related to tax losses
As of September 30, 2024, besides the tax credits related to tax losses carryforward effectively recognized in the amounts disclosed above, other tax credits related to tax losses carryforward were not recorded, since their realization is not probable in currently Management evaluation. The accumulated amount represents R$834,599 (R$669,024 in December 31, 2023) - which is equivalent, in value basis, to R$3,183,482 at September 30, 2024 (R$2,521,047 in December 31, 2023).
8.2 Income tax and social contribution
Income taxes reported in the income statement are analyzed as follows:
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Income tax expense – current | (3,390,396) | (2,790,108) | (1,277,530) | (1,269,706) | |
Deferred tax expense on temporary differences | 954,451 | 2,732,018 | 27,978 | 1,323,060 | |
Deferred tax on tax loss carryforward movements in the current period | (318,412) | 180,824 | 146,234 | (98,032) | |
Total deferred tax (expense)/income | 636,039 | 2,912,842 | 174,212 | 1,225,028 | |
Total income tax expenses | (2,754,357) | 122,734 | (1,103,318) | (44,678) |
The reconciliation between the weighted nominal tax rate and the effective tax rate is summarized as follows:
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Profit before income tax | 12,576,728 | 10,309,279 | 4,669,619 | 4,059,682 | |
Adjustment on a taxable basis | |||||
Others non-taxable income | (376,439) | (622,435) | (122,530) | (131,521) | |
Government grants related to excise duties | (27,819) | (2,173,355) | (27,819) | (769,185) | |
Share of results of associates and joint ventures | (1,822) | 15,163 | (36,844) | (1,440) | |
Non-deductible expenses | 49,925 | 31,518 | 15,125 | 11,924 | |
Foreign profit calculation | (30,084) | 422,581 | 36,013 | 161,926 | |
12,190,489 | 7,982,751 | 4,533,564 | 3,331,386 | ||
Aggregated weighted nominal tax rate | 28.57% | 28.97% | 27.22% | 29.65% | |
Taxes payable – nominal rate | (3,483,053) | (2,312,373) | (1,233,924) | (987,677) | |
Adjustment on tax expense | |||||
Income tax incentives | 399,534 | 77,282 | 75,263 | 29,604 | |
Deductible interest on shareholders’ equity | 874,698 | 2,758,884 | 363,660 | 1,082,183 | |
Tax savings from goodwill amortization | 2,689 | 12,868 | 896 | 4,289 | |
Withholding income tax | (564,870) | (222,846) | (154,958) | (122,082) | |
Recognition/(write-off) of deferred charges on tax losses | (105,234) | 29,102 | (73,809) | 123,485 | |
Effect of application of IAS 29 (hyperinflation) | 57,222 | (409,960) | (294) | (152,379) | |
Others with reduced taxation | 64,657 | 189,777 | (80,152) | (22,101) | |
Income tax and social contribution expense | (2,754,357) | 122,734 | (1,103,318) | (44,678) | |
Effective tax rate | 21.90% | -1.19% | 23.63% | 1.10% |
The main events that impacted the effective tax rate for the period were:
· | Government grants for excise duties: Related to regional incentives and economic development policies, these are related primarily to local production, contributing to economic and social impact, and, when reinvested, were not subject to income tax and social contribution, before the advent of Federal Law 14.789/2023, which explains the relevant impact on the effective tax rate in the comparative period. In this regard, since August 2024, the group's companies have been obtaining favorable preliminary injunctions in their operations in Brazil that exempt them from paying IRPJ/CSLL on the amounts calculated as government grants for investment related to tax benefits known as presumed ICMS credits. The amounts described in this line are usually 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. At the end of 2023, the amounts related to tax incentives were allocated to the profit reserve, according to note 14 – Changes in equity. |
AMBEV S.A. |
· | Foreign profit calculation: shows complement of income tax on foreign subsidiaries due in Brazil according to the regulations of Law No. 12,973/14 and taxable adjustments of the foreign companies consolidated in the group. |
· | Income tax incentive: refers mainly to income tax incentives granted by the Federal Government to promote regional development in some areas of the North and Northeast of the country. These incentives are recorded in the income statement on an accrual basis and allocated to the tax incentive reserves account, in accordance with item (14.3.1) "Tax incentives" of note 14 – Changes in equity. |
· | Withholding income tax: The amount is mainly related to dividends already distributed or to be distributed by subsidiaries located outside of Brazil, applicable according to local tax legislation. The recorded values in 2024 are mainly related to withholding tax on dividends distributed in 2024 and the exchange rate variation of the deferred income tax related to subsidiary profits undistributed. |
· | Deductible interest on shareholders’ equity (or Interest on Capital – “IOC”): under Brazilian law, companies have an option to remunerate their shareholders through the payment of Interest on shareholders’ equity, which amount is impacted by the taxable result, profit reserves of the Company and by the long-term interest rate (“TJLP”). These remunerations are deductible for income tax purposes. On December 29, 2023, the Federal Law No. 14,789/23 was enacted, effective as of January 1, 2024, which limited, as from that date, the equity accounts that could be used in the interest on shareholders’ equity calculation basis. |
· | Effect of application of IAS 29 (hyperinflation): our subsidiary in Argentina, which operates 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. |
AMBEV S.A. |
9. | PROPERTY, PLANT AND EQUIPMENT |
09/30/2024 | 12/31/2023 | |
Property, plant and equipment | 25,803,212 | 23,662,728 |
Right of use assets | 2,964,365 | 2,967,428 |
28,767,577 | 26,630,156 |
9.1 Changes in the carrying amount of property, plant, and equipment
Carrying amount | |||||||||||
At December 31, 2022 | Cumulative translation adjustment (CTA) | Effects of application of IAS 29 (hyperinflation) | Acquisitions | Depreciation | Disposals and write-offs | Transfers | At December 31, 2023 | Acquisition cost | Depreciation | ||
Land and buildings | 9,698,425 | (1,485,238) | 663,123 | 44,741 | (481,587) | (3,738) | 800,535 | 9,236,261 | 14,287,840 | (5,051,579) | |
Plant and equipment | 11,589,556 | (1,726,730) | 779,390 | 1,230,174 | (3,533,364) | (39,135) | 2,488,955 | 10,788,846 | 39,509,056 | (28,720,210) | |
Fixtures and accessories | 1,323,571 | (193,404) | 86,460 | 56,419 | (541,605) | (13,471) | 373,702 | 1,091,672 | 7,074,126 | (5,982,454) | |
Under construction | 4,349,748 | (311,718) | 120,197 | 3,283,918 | - | (3,391) | (4,892,805) | 2,545,949 | 2,545,949 | - | |
26,961,300 | (3,717,090) | 1,649,170 | 4,615,252 | (4,556,556) | (59,735) | (1,229,613) | 23,662,728 | 63,416,971 | (39,754,243) |
Carrying amount | |||||||||||
At December 31, 2023 | Cumulative translation adjustment (CTA) | Effects of application of IAS 29 (hyperinflation) | Acquisitions | Depreciation | Disposals and write-offs | Transfers | At September 30, 2024 | Acquisition cost | Depreciation | ||
Land and buildings | 9,236,261 | 247,632 | 955,867 | 16,427 | (369,658) | (21,888) | 444,331 | 10,508,972 | 16,251,037 | (5,742,065) | |
Plant and equipment | 10,788,846 | 282,418 | 1,018,426 | 489,051 | (2,804,903) | (5,037) | 1,701,416 | 11,470,217 | 45,507,098 | (34,036,881) | |
Fixtures and accessories | 1,091,672 | 27,458 | 78,408 | 29,209 | (391,203) | (20,714) | 81,093 | 895,923 | 7,913,660 | (7,017,737) | |
Under construction | 2,545,949 | 68,167 | 141,502 | 2,402,967 | - | - | (2,230,485) | 2,928,100 | 2,928,100 | - | |
23,662,728 | 625,675 | 2,194,203 | 2,937,654 | (3,565,764) | (47,639) | (3,645) | 25,803,212 | 72,599,895 | (46,796,683) |
AMBEV S.A. |
9.2 Changes in the carrying amount of right-of-use assets
Carrying amount | |||||||||||
At December 31, 2022 | Cumulative translation adjustment (CTA) | Effects of application of IAS 29 (hyperinflation) | Additions | Depreciation | Disposals and write-offs | Transfers | At December 31, 2023 | Acquisition cost | Depreciation | ||
Buildings | 1,350,836 | (49,482) | 11,951 | 343,028 | (451,693) | (30,532) | (1,842) | 1,172,266 | 2,925,946 | (1,753,680) | |
Machinery, vehicles and others | 1,743,554 | (32,731) | 15,496 | 1,313,799 | (773,939) | (475,532) | 4,515 | 1,795,162 | 3,534,476 | (1,739,314) | |
Total | 3,094,390 | (82,213) | 27,447 | 1,656,827 | (1,225,632) | (506,064) | 2,673 | 2,967,428 | 6,460,422 | (3,492,994) |
Carrying amount | |||||||||||
At December 31, 2023 | Cumulative translation adjustment (CTA) | Effects of application of IAS 29 (hyperinflation) | Additions | Depreciation | Disposals and write-offs | Transfers | At September 30, 2024 | Acquisition cost | Depreciation | ||
Buildings | 1,172,266 | 50,393 | 5,778 | 296,597 | (314,788) | (22,338) | (3,023) | 1,184,885 | 3,216,733 | (2,031,848) | |
Machinery, vehicles and others | 1,795,162 | 22,780 | 20,715 | 609,709 | (659,456) | (8,359) | (1,071) | 1,779,480 | 4,186,706 | (2,407,226) | |
Total | 2,967,428 | 73,173 | 26,493 | 906,306 | (974,244) | (30,697) | (4,094) | 2,964,365 | 7,403,439 | (4,439,074) |
AMBEV S.A. |
10. | GOODWILL |
09/30/2024 | 12/31/2023 | |
Balance at the end of the previous year | 38,003,640 | 40,594,038 |
Effects of cumulative translation adjustment (CTA) | 1,706,064 | (4,067,916) |
Effect of application of IAS 29 (hyperinflation) | 2,148,278 | 1,481,136 |
Acquisitions, (write-offs) and disposal through business combinations | 35,415 | (3,618) |
Balance at end of the period | 41,893,397 | 38,003,640 |
Impairment testing
The impairment test is performed annually considering the most accurate estimates calculated by Management. The Company’s Management has not identified any relevant indications of impairment in the nine-month period ended September 30, 2024.
11. | TRADE PAYABLES |
09/30/2024 | 12/31/2023 | |
Trade payables | 19,077,242 | 21,278,615 |
Related parties (note 23) | 1,994,605 | 1,916,486 |
Current | 21,071,847 | 23,195,101 |
Trade payables | 113,281 | 107,386 |
Related parties (note 23) | 230,144 | 199,914 |
Non-current | 343,425 | 307,300 |
Total | 21,415,272 | 23,502,401 |
The present value adjustment recorded for trade payables, at September 30, 2024 is R$201 million (R$308 million at December 31, 2023).
The subsidiaries in Argentina, Chile, Paraguay and Panama have discounted trade payables with endorsement (trade payables securitization) with vendors in the amount of R$85 million at September 30, 2024 (R$159 million at December 31, 2023). In general, abovementioned discount transactions occur by legal impositions existing in these jurisdictions. These transactions maintain their commercial characteristics since there are no change in previously established conditions (amount, terms, and counterpart) and its vendor’s choice to carry out the anticipation of its receivables with the Company, therefore, these operations do not result in any additional obligations for the Company.
12. | INTEREST-BEARING LOANS AND BORROWINGS |
09/30/2024 | 12/31/2023 | |
Secured bank loans | 20,507 | 14,938 |
Other secured loans | 137,143 | 136,269 |
Lease liabilities | 1,053,439 | 1,146,884 |
Current liabilities | 1,211,089 | 1,298,091 |
Secured bank loans | 96,940 | 111,628 |
Other secured loans | 231,824 | 279,401 |
Lease liabilities | 1,840,420 | 1,811,946 |
Non-current liabilities | 2,169,184 | 2,202,975 |
Total | 3,380,273 | 3,501,066 |
AMBEV S.A. |
Additional information regarding the exposure of the Company to interest rate, foreign currency risk and debt repayment schedule is disclosed in note 21 - Financial instruments and risks.
12.1 Contractual clauses (Covenants)
In the nine-month period ended September 30, 2024, as well as at December 31, 2023 and until the date of issue of these interim consolidated financial statements there were no events of default, breach of covenant clauses or significant contractual changes that would result in changes to the payment terms of loan and financing contracts.
12.2 Terms and discount rates of leasing contracts
The Company estimates 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 weighted average of rates applied considering the terms of the existing contracts:
Rate % | |
Lease Term | 09/30/2024 |
2024 - 2027 | 11.08% |
2028 – 2035 | 11.26% |
13. | PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS |
The Company and its subsidiaries are involved in administrative and judicial proceedings and arbitrations arising from the normal course of business. The assessment of the probability of loss, carried out by the Company with the support of its legal advisors, considers the probability of the Company position being accepted at the end of the process, considering the applicable legislation, the case law on the subject and the existing evidence. Due to their nature, these legal proceedings involve inherent uncertainties, including, but not limited to, courts rulings negotiations between affected parties and governmental actions and, as a consequence, Ambev's Management cannot, at this stage, estimate the likely timing of resolution of these matters.
13.1 Provision
The Company and some of its subsidiaries are involved in lawsuits, mainly of a tax, civil and labor nature, which are considered probable of loss, and which are fully provisioned, under the terms of IAS 37 - Provisions, Contingent Liabilities and Contingent Assets. Legal proceedings are considered with a probable likelihood of loss when there is consolidated or binding case law unfavorable to the thesis defended by the Company and its subsidiaries, or, in the case of a factual or evidentiary discussion, when the Company and its subsidiaries do not have the necessary and sufficient evidence to prove the right alleged.
13.1.1 Main legal proceedings with a probable likelihood of loss:
Excise duties: 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.
AMBEV S.A. |
Labor: the Company and its subsidiaries are parties to labor proceedings with former employees, including former employees of service providers companies. The main issues involve overtime and related effects and respective charges.
Civil: the Company and its subsidiaries are involved in civil proceedings 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.
13.1.2 Provision changes
Excise duties | Labor | Civil | Other taxes (i) | Restructuring | Total | |
Balance at December 31, 2022 | 246,948 | 132,101 | 335,934 | 192,929 | 11,797 | 919,709 |
Effect of cumulative translation adjustment (CTA) | - | (2,774) | (35,824) | (6,283) | (506) | (45,387) |
Additions | 135,768 | 247,769 | 234,556 | 75,635 | 3,190 | 696,918 |
Provisions consumed | (27,321) | (181,662) | (121,944) | (40,777) | (11,211) | (382,915) |
Provisions reversed | (73,223) | (45,497) | (72,545) | (19,057) | - | (210,322) |
Balance at December 31, 2023 | 282,172 | 149,937 | 340,177 | 202,447 | 3,270 | 978,003 |
Effect of cumulative translation adjustment (CTA) | - | 288 | (613) | 5,432 | 393 | 5,500 |
Additions | 75,544 | 201,381 | 117,269 | 22,725 | 17,293 | 434,212 |
Provisions consumed | (2,430) | (132,526) | (22,638) | (5,759) | (16,388) | (179,741) |
Provisions reversed | (48,245) | (38,485) | (23,079) | (6,845) | - | (116,654) |
Balance at September 30, 2024 | 307,041 | 180,595 | 411,116 | 218,000 | 4,568 | 1,121,320 |
(i) Other taxes refer to provisions for legal proceedings concerning taxes other than excise duties and income taxes. The uncertain tax treatments related to income taxes with a prognosis of probable loss have their value reported directly in the income tax and social contribution payable, as per IFRIC 23 - Uncertainty on the Treatment of Income Taxes.
13.1.3 Expected settlement
12/31/2023 | ||||||
Excise duties | Labor | Civil | Other taxes (i) | Restructuring | Total | |
Current | 113,652 | 67,248 | 226,736 | 7,483 | 3,270 | 418,389 |
Non-current | 168,520 | 82,689 | 113,441 | 194,964 | - | 559,614 |
Total | 282,172 | 149,937 | 340,177 | 202,447 | 3,270 | 978,003 |
09/30/2024 | ||||||
Excise duties | Labor | Civil | Other taxes (i) | Restructuring | Total | |
Current | 188,823 | 60,322 | 226,880 | 19,737 | 4,568 | 500,330 |
Non-current | 118,218 | 120,273 | 184,236 | 198,263 | - | 620,990 |
Total | 307,041 | 180,595 | 411,116 | 218,000 | 4,568 | 1,121,320 |
(i) Other taxes refer to provisions for legal proceedings concerning taxes other than excise duties and income taxes. The uncertain tax treatments related income taxes with a prognosis of probable loss have their value reported directly in the income tax and social contribution payable, as per IFRIC 23 - Uncertainty on the Treatment of Income Taxes.
The expected settlement of provisions was based on management’s best estimate in conjunction with their internal and external legal advisors at the interim consolidated balance sheet date.
AMBEV S.A. |
13.2 Contingencies
The Company and its subsidiaries maintain administrative and judicial disputes with fiscal authorities in Brazil related to certain fiscal positions adopted when calculating the income tax and social contribution, which, based on Management’s current evaluation, probably are going to be accepted in superior court decisions, considering the regular compliance with tax laws, case law, and evidence produced, aligned with IFRIC 23. The Company also has tax actions related to other taxes, which involve risk of a possible loss, according to management's assessment. To these uncertain tax treatments and possible contingencies there are no recorded provisions, due to the assessment carried out. The composition and estimates are as following:
09/30/2024 | 12/31/2023 | |
Income tax and social contribution | 65,124,386 | 63,620,985 |
Value-added and excise duties | 27,660,961 | 26,761,034 |
PIS and COFINS | 1,998,969 | 3,496,221 |
Others | 1,779,306 | 1,679,407 |
96,563,622 | 95,557,647 |
Contingencies with a remote risk of loss are not disclosed, as the possibility of any outflow of resources embodying economic benefits is remote, in accordance with IAS 37 - Provisions, Contingent Liabilities and Contingent Assets.
The Company and its subsidiaries have guarantee-insurance and letters of guarantee for some legal actions, presented as guarantee for civil, labor and tax execution or to enable resources of labor nature.
The Company is also a party to other tax lawsuits in which it is an active party and discusses the possibility of recovering or failing to pay taxes which, in Management's opinion, do not have constitutional and/or legal support for their demand. As disclosed in its accounting policy, the Company does not recognize contingent assets. If the inflow of economic benefits becomes probable, according to a prognosis assessment conducted by external legal advisors in addition to Management's internal assessment, the Company discloses the contingent asset. When the inflow of economic benefits becomes virtually certain, such as when the legal decision is final and the gain can be estimated with certainty, the asset is no longer contingent, and the Company recognizes it in the financial statements for the period in which there was a change in estimate occurred.
13.2.1 Main contingencies with a possible risk of loss
The changes in the amount of contingencies reported relate mainly to the increase resulting from monetary restatement. In addition, the main process classified with a possible loss probability, which relevant changed until September 30, 2024, are summarized in the table below, along with their respective estimated values involved in the cases.
AMBEV S.A. |
Uncertainty over the treatment of income taxes In accordance with IFRIC 23 (Note 8 - Income tax and social contribution) |
Estimates (in million of Brazilian Reais) | ||
# | Description of the main processes | 09/30/2024 | 12/31/2023 |
1 |
Deductibility of Interest on Shareholders’ Equity (or Interest On Capital – “IOC”) expenses In 2013, as approved in a Shareholders Meeting, Ambev implemented a corporate restructuring with the purpose of simplifying its corporate structure and converting into a single class of shares company, among other reasons. One of the steps of such restructuring involved a contribution of shares followed by the merger of shares of its controlled entity, Companhia de Bebidas das Americas, into Ambev. As one of the results of this restructuring, the counterpart registered the positive difference between the value of shares issued for the merger and the net equity value of its controlled entity’s share, as per IFRS 10/CPC 36 and ICPC09, in an equity account of Ambev referred to as carrying value adjustment. As a result of this restructuring, since 2019, Ambev has been receiving tax assessments from the Brazilian Federal Tax Authorities related to the interest on capital deduction in calendar years 2014 to 2021. The assessments refer primarily to the accounting and corporate effects of the restructuring carried out by Ambev in 2013 and its impact on the increase in the deductibility of IOC expenses. In all of the cases the Company obtained partially favorable decisions at the first-level administrative court and filed appeals to the Lower Administrative Court. The appeals related to tax assessments involving calendar years 2014 and 2017 to 2021 await judgment by the Lower Administrative Court. The favorable portion of the decisions rendered by the first-level administrative court in these cases is subject to mandatory review by the Lower Administrative Court as well. Regarding the tax assessment for the calendar years 2015 and 2016, in May 2024, Ambev obtained a partially favorable decision from CARF, dismissing the application of the qualified fine. The Company is awaiting the formalization and notification of the mentioned decision to evaluate the applicable appeals, whether in the administrative or judicial sphere. The updated value of this uncertain tax treatment, in accordance with ICPC 22/IFRIC 23, already assessed, is approximately R$29.1 billion as of September 30, 2024 (R$27.4 billion as of December 31, 2023). Ambev has not recorded any provisions for this matter based on the probability of loss. The uncertain tax position, as per IFRIC 23, continued to be adopted by Ambev as it also distributed or accrued IOC in the years following the assessed period (2022-2023) and deducted such amounts from its Corporate Income Taxes basis. Therefore, in a scenario where the IOC deductibility would also be questioned for the period after 2021, on the same basis and arguments as the aforementioned tax assessments, Ambev management estimates that the outcome of such potential further assessments would be consistent with the already assessed periods. In December 2023, Law No. 14,789/2023 (introduced in August 2023 as Provisional Measure No. 1,185), was enacted in Brazil, which changed the calculation basis for IOC effective as of 1 January 2024. As a result, effective as of 1 January 2024, the uncertain tax treatment, as per IFRIC 23, is limited only to Corporate Income Taxes calculated in accordance with rules and regulations in place prior to the enactment of Law No. 14,789/2023. |
29,147 | 27,439 |
2 |
Disallowance of tax paid abroad Since 2014, Ambev has been receiving tax assessments from the Brazilian Federal Tax Authorities, for calendar years as of 2007, related to the disallowance of deductions associated with alleged unproven taxes paid abroad by its subsidiaries and has been filing defenses. The cases are being challenged at both the administrative and judicial levels. In November 2019, the Lower Administrative Court rendered a favorable decision to Ambev in one of the cases (related to the 2010 tax period), which became definitive. For the assessments related to the periods of 2015 and 2016, Ambev received unfavorable decisions at the Administrative courts in three out of four tax assessments and filed an appeal to the first-level judicial court which awaits judgment. In July 2024, CARF issued a favorable decision in the case involving the 2012 tax year. The approximate value of the judgment was R$1.4 billion as of September 30, 2024 and the Company awaits formal notification to assess potential impacts on the contingency classification and necessary actions with its external advisors. For the other cases concerning additional tax years, the Company awaits decisions at both administrative and judicial levels. In connection with this matter, additional tax assessments were filed to charge isolated fines due to the lack of monthly prepayments of income tax as a result of allegedly undue deductions of taxes paid abroad for the 2015 to 2019 tax years. For the infraction notice related to the 2019 tax year. The company awaits judgment by the first-level administrative court. For the cases concerning the 2016 and 2018 tax years, Ambev received unfavorable decisions from the first-level administrative court and filed appeals in connection therewith, which are pending judgment by the Lower Administrative Court. In August 2024, CARF issued rulings on cases related to the 2015 and 2017 tax years. The first decision, related to the 2015 case with an approximate value of R$488 million, was unfavorable, while the second decision, for the 2017 case valued at approximately R$661 million, was favorable. Neither decision is final, and the Company awaits formal notification to assess potential impacts and take any necessary additional actions. The updated value of this uncertain tax treatment, classified as a possible loss as per ICPC 22/IFRIC 23 and already assessed, is approximately R$15.7 billion as of September 30, 2024 (R$14.3 billion as of December 31, 2023). Ambev has not recorded any provision in connection therewith. Ambev has continued to take the same deductions for the calendar years following the assessed periods (2018 to 2024). Therefore, if Ambev receives similar tax assessments for this period, Ambev management believes the outcome would be the same as those tax years already assessed. |
15,672 | 14,302 |
3 |
Foreign Earnings Since 2005, the Company and some of its subsidiaries have been assessed by the Brazilian Federal Revenue Service (RFB) regarding the taxation of profits earned by subsidiaries domiciled abroad. Considering these charges illegitimate, the Company is challenging these assessments in both administrative and judicial courts. In 2022 and 2023, CARF issued favorable and partially favorable decisions for the Company. These decisions canceled part of the assessments, recognizing as partially correct the calculations made by the Company regarding the taxable profit in Brazil of foreign-domiciled entities, as well as the inability of Brazilian tax authorities to disregard goodwill amortization by a foreign subsidiary. Some of these decisions represented a definitive success, totaling approximately R$1 billion as of September 30, 2024. In the cases under judicial review, the Company has favorable decisions, subject to review by a higher court. The updated value of this uncertain tax treatment with a possible loss probability, as per ICPC 22/IFRIC 23, already assessed, is approximately R$4.9 billion as of September 30, 2024 (R$6.1 billion as of December 31, 2023). This uncertain tax treatment, as per ICPC 22/IFRIC 23, continued to be applied by the Company and affected tax years following those assessed (2019–2023). Therefore, if Ambev receives similar tax assessments for this period, Ambev management believes the outcome would be the same as those tax years already assessed. |
4,938 | 6,075 |
AMBEV S.A. |
Indirect taxes |
Estimates (in million of Brazilian Reais) | ||
# | Description of the main process | 09/30/2024 | 12/31/2023 |
1 |
IPI Suspension In 2014 and 2015, Ambev received tax assessments from the Brazilian Federal Tax Authorities relating to IPI allegedly due to the suspension of finished products between its units. The cases are being challenged at both the administrative and judicial levels. In January 2024, Ambev received a partially favorable decision from the Upper Administrative Court reducing 98% of the amount alleged to be owed by Ambev in this case, corresponding to approximately R$916 million. Ambev filed an appeal at the judicial level against the unfavorable portion of the decision. In the judicial sphere, the first decision obtained in a case on this subject was rendered in July 2022, the decision was unfavorable to Ambev, and it filed an appeal. The Federal Court rendered its decision on the appeal, annulling the first-level decision. The federal government has filed motions for clarification against this decision, which are pending judgment by the Federal Court. |
1,198 | 1,824 |
2 |
Social Contributions over bonus products Since 2015, Ambev has been assessed by the Brazilian Federal Revenue Service (RFB) for the collection of amounts allegedly related to Social Contributions over bonus products. Considering these charges illegitimate, the Company challenged these assessments in both administrative and judicial courts. In March 2023, CARF issued favorable decisions to the Company in the last two cases within the administrative sphere, recognizing the tax treatment applied by the Company to the granted bonuses as correct. In July 2024, the Company was notified of these decisions, which, since they were not contested by the Internal Revenue Service (IRS), represent definitive successes amounting to approximately R$1.2 billion. In the judicial sphere, the Company awaits the judgment of an appeal by the Federal Regional Court. Ambev estimates that the amount involved in these cases as of September 30, 2024, classified as a possible loss, is approximately R$549.8 million (R$1.8 billion as of December 31, 2023). |
549,8 | 1,776 |
14. | CHANGES IN EQUITY |
14.1 Issued capital
At September 30, 2024, the authorized share capital, fully subscribed, in the amount of R$58,226,036 (R$58,177,929 in September 30, 2023) in the amount of 15,757,657 common shares (15,753,833 in September 30, 2023) nominative, without nominal value, distributed as follows:
09/30/2024 | 09/30/2023 | ||||
Shareholder | Thousands of common shares | % | Thousands of common shares | % | |
Interbrew International B.V. | 8,441,665 | 53.57% | 8,441,666 | 53.58% | |
Ambrew S.A.R.L. | 1,287,671 | 8.17% | 1,287,671 | 8.17% | |
Fundação Zerrenner | 1,609,987 | 10.22% | 1,609,987 | 10.22% | |
Market (free float) | 4,388,852 | 27.85% | 4,403,651 | 27.96% | |
Treasury shares | 29,482 | 0.19% | 10,858 | 0.07% | |
15,757,657 | 100.00% | 15,753,833 | 100.00% |
09/30/2024 | 09/30/2023 | ||||
Thousands of common shares | Thousands of Real | Thousands of common shares | Thousands of Real | ||
Beginning balance | 15,753,833 | 58,177,929 | 15,750,217 | 58,130,517 | |
Capital increase (i) | 3,824 | 48,107 | 3,616 | 47,412 | |
Balance at the end of the period | 15,757,657 | 58,226,036 | 15,753,833 | 58,177,929 |
(i) Capital increase related to the issue of shares, in connection with share-based program.
AMBEV S.A. |
14.2 Capital reserves
Capital Reserves | |||||
Treasury shares | Share Premium | Other capital reserves | Share-based Payments | Total | |
Balance at January 1, 2023 | (1,073,506) | 53,662,811 | 700,898 | 2,049,491 | 55,339,694 |
Capital increase | - | - | - | (32,869) | (32,869) |
Share buyback, results from treasury shares and share-based payments | (31,241) | - | - | 231,363 | 200,122 |
Balance at September 30, 2023 | (1,104,747) | 53,662,811 | 700,898 | 2,247,985 | 55,506,947 |
Capital Reserves | |||||
Treasury shares | Share Premium | Other capital reserves | Share-based Payments | Total | |
Balance at January 1, 2024 | (1,011,949) | 53,662,811 | 700,898 | 2,127,804 | 55,479,564 |
Gains/(losses) of controlling interest | - | - | - | 1,958 | 1,958 |
Share buyback, results from treasury shares and share-based payments | (302,714) | - | - | 192,166 | (110,548) |
Balance at September 30, 2024 | (1,314,663) | 53,662,811 | 700,898 | 2,321,928 | 55,370,974 |
14.2.1 Share buyback and treasury shares results
Treasury shares represent the Company’s own issued shares bought back by the Company, and the result 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 | Treasury shares results | Total treasury shares | |||||
Thousands of shares | Thousands of Brazilian Reais | Thousands of shares | Thousands of Brazilian Reais | ||||
Balance at January 1, 2023 | 8,482 | (131,877) | (941,629) | (1,073,506) | |||
Changes during the year | 2,376 | (28,373) | (2,868) | (31,241) | |||
Balance at September 30, 2023 | 10,858 | (160,250) | (944,497) | (1,104,747) |
Acquisition/realization of shares | Treasury shares results | Total treasury shares | |||||
Thousands of shares | Thousands of Brazilian Reais | Thousands of shares | Thousands of Brazilian Reais | ||||
Balance at January 1, 2024 | 4,384 | (63,095) | (948,854) | (1,011,949) | |||
Changes during the year | 25,098 | (300,689) | (2,025) | (302,714) | |||
Balance at September 30, 2024 | 29,482 | (363,784) | (950,879) | (1,314,663) |
14.2.2 Share-based payment
Different share-based payment programs and stock purchase option plans allow the senior management from Ambev’s economic group to acquire Company shares. The share-based payment reserve recorded a charge of R$290,447 on September 30, 2024 (R$269,671 at September 30, 2023) (note 20 – Share-based payments).
14.3 Profit reserves
Profit reserves | ||||
Investments reserve | Legal reserve | Fiscal incentive | Total | |
Balance at January 1, 2023 | 22,055,901 | 4,456 | 14,846,543 | 36,906,900 |
Balance at September 30, 2023 | 22,055,901 | 4,456 | 14,846,543 | 36,906,900 |
Profit reserves | ||||
Investments reserve | Legal reserve | Fiscal incentive | Total | |
Balance at January 1, 2024 | 25,786,098 | 4,456 | 17,399,286 | 43,189,840 |
Balance at September 30, 2024 | 25,786,098 | 4,456 | 17,399,286 | 43,189,840 |
AMBEV S.A. |
There was no change in profit reserves in the nine-month periods ended September 30, 2023 and September 30, 2024.
14.3.1 Tax incentives
The Company recognizes annually in its equity, in the profit reserves line, the tax incentives regarding tax benefits at the government subsidies for the current year.
In general, these incentives are related to industrial development programs that aim 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 under the respective state normative acts, and when conditions for obtaining these grants exist, they are under Company’s control. The treatment of incentives complies with the provisions of current federal, state and municipal legislation, in particular set by Complementary Federal Law 160/2017 and by Agreement “CONFAZ No. 190/2017”. For the purposes of constituting the tax incentives reserve, the state tax incentives related to excise duties are recognized as government subsidies for investments, regardless of the actual tax treatment given to them, in line with the interpretation of the Superior Court of Justice manifested mainly in the judgment of ERESP No. 1,517,492/PR, as well as in the judgment of Theme No. 1.182 and of the Federal Supreme Court, according to the manifestations expressed in the judgment of Theme No. 843.
The portion of income for the period related to tax incentives, which is estimated to eventually 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:
09/30/2024 | 09/30/2023 | |
ICMS (Brazilian state value-added tax) | 2,342,120 | 2,173,355 |
Income tax | 399,534 | 77,282 |
2,741,654 | 2,250,637 |
14.3.2 Interest on shareholders’ equity/dividends
There was no payment of dividends or interest on shareholders’ equity by the Company in the nine-month periods ended September 30, 2023 and September 30, 2024.
AMBEV S.A. |
14.4 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 | |
Balance 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 cumulative translation adjustment [CTA] | (5,647,643) | - | - | - | - | - | - | (5,647,643) |
Cash flow hedges | - | (37,590) | - | - | - | - | - | (37,590) |
Actuarial gains/(losses) | - | - | 4,139 | - | - | - | - | 4,139 |
Total comprehensive income | (5,647,643) | (37,590) | 4,139 | - | - | - | - | (5,681,094) |
Options granted on subsidiaries | - | - | - | 6,666 | - | - | - | 6,666 |
Gains/(losses) of controlling interest | - | - | - | - | 811 | - | - | 811 |
Tax on deemed dividends | - | - | - | - | (12,467) | - | - | (12,467) |
Balance at September 30, 2023 | 1,106,340 | 870,931 | (660,846) | - | (142,234) | 156,091 | (75,437,844) | (74,107,562) |
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 | |
Balance at January 1, 2024 | (2,458,382) | 697,825 | (678,235) | - | (145,675) | 156,091 | (75,449,667) | (77,878,043) |
Comprehensive income: | ||||||||
Gains/(losses) on cumulative translation adjustment [CTA] | 3,998,332 | - | - | - | - | - | - | 3,998,332 |
Cash flow hedges | - | (101,858) | - | - | - | - | - | (101,858) |
Actuarial gains/(losses) | - | - | 536 | - | - | - | - | 536 |
Total comprehensive income | 3,998,332 | (101,858) | 536 | - | - | - | - | 3,897,010 |
Gains/(losses) of controlling interest | 385,670 | (578) | (1,174) | - | 133,373 | - | - | 517,291 |
Tax on deemed dividends | - | - | - | - | (17,276) | - | - | (17,276) |
Balance at September 30, 2024 | 1,925,620 | 595,389 | (678,873) | - | (29,578) | 156,091 | (75,449,667) | (73,481,018) |
AMBEV S.A. |
15. | SEGMENT REPORTING |
(a) | Reportable segments nine-month–period ended on September, 30: |
Brazil | CAC (i) | Latin America – South (ii) | Canada | Consolidated | ||||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
Net sales | 34,886,737 | 32,771,548 | 7,753,204 | 7,248,389 | 12,392,401 | 12,295,919 | 7,384,909 | 7,431,766 | 62,417,251 | 59,747,622 |
Cost of sales | (17,558,979) | (17,129,140) | (3,593,146) | (3,694,681) | (6,775,847) | (6,021,639) | (3,163,605) | (3,144,851) | (31,091,577) | (29,990,311) |
Gross profit | 17,327,758 | 15,642,408 | 4,160,058 | 3,553,708 | 5,616,554 | 6,274,280 | 4,221,304 | 4,286,915 | 31,325,674 | 29,757,311 |
Distribution expenses | (4,649,879) | (4,605,066) | (673,994) | (618,859) | (1,603,059) | (1,548,041) | (1,342,821) | (1,434,254) | (8,269,753) | (8,206,220) |
Sales and marketing expenses | (3,501,598) | (3,176,039) | (583,592) | (514,397) | (1,285,951) | (1,096,064) | (752,538) | (822,027) | (6,123,679) | (5,608,527) |
Administrative expenses | (2,770,356) | (2,498,819) | (327,902) | (299,715) | (708,554) | (633,577) | (506,588) | (461,069) | (4,313,400) | (3,893,180) |
Other operating income/(expenses) | 1,671,133 | 1,316,885 | 8,313 | (12,446) | 18,793 | 31,891 | 9,695 | 15,918 | 1,707,934 | 1,352,248 |
Exceptional items | (13,334) | (124,987) | (7,547) | (16,989) | (11,538) | (25,325) | (15,759) | (647) | (48,178) | (167,948) |
Income from operations | 8,063,724 | 6,554,382 | 2,575,336 | 2,091,302 | 2,026,245 | 3,003,164 | 1,613,293 | 1,584,836 | 14,278,598 | 13,233,684 |
Net financial results | (1,703,692) | (2,909,242) | ||||||||
Share of results of associates and joint ventures | 1,822 | (15,163) | ||||||||
Income before income tax | 12,576,728 | 10,309,279 | ||||||||
Income tax expense | (2,754,357) | 122,734 | ||||||||
Net income | 9,822,371 | 10,432,013 | ||||||||
Acquisition of property, plant and equipment | 2,053,198 | 2,452,714 | 367,684 | 406,888 | 635,312 | 656,534 | 173,794 | 215,244 | 3,229,988 | 3,731,380 |
AMBEV S.A. |
(continued)
Brazil | CAC (i) | Latin America – South (ii) | Canada | Consolidated | ||||||
09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 | |
Segment assets | 57,448,034 | 56,974,055 | 15,009,961 | 13,692,342 | 24,029,458 | 16,084,960 | 17,551,350 | 15,856,930 | 114,038,803 | 102,608,287 |
Intersegment elimination | (3,465,330) | (2,162,090) | ||||||||
Non-segmented assets (iii) | 36,712,888 | 32,197,936 | ||||||||
Total assets | 147,286,361 | 132,644,133 | ||||||||
Segment liabilities | 24,454,457 | 28,841,281 | 5,180,780 | 4,981,469 | 5,475,389 | 5,095,432 | 5,447,419 | 5,130,990 | 40,558,045 | 44,049,172 |
Intersegment elimination | (3,465,331) | (2,161,919) | ||||||||
Non-segmented liabilities (iii) | 110,193,647 | 90,756,880 | ||||||||
Total liabilities | 147,286,361 | 132,644,133 |
(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.
(iii) The non-segmented assets relate primarily to cash and cash equivalents, taxes and investments balances. The non-segmented liabilities, relate primarily to shareholders' equity, taxes and derivatives balances.
Non-current assets attributed to Brazil (country of domicile of the company) and Canada amounted to R$44.6 billion and R$15.0 billion, respectively as of September 30, 2024 (R$45.1 billion and R$13.9 billion, respectively, as of December 31, 2023). The net revenue attributable to the Company's operations in Argentine amount to R$7.0 billion in the nine-month period ended September 30, 2024 (R$7.2 billion as of September 30, 2023), and segmented non-current assets attributed to the same country amounted R$11.0 billion for the same period ended September 30, 2024 (R$5.9 billion as of December 31, 2023).
AMBEV S.A. |
(b) | Reportable segments – three-month period ended on September, 30: |
Brazil | CAC | Latin America – South | Canada | Consolidated | ||||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
Net sales | 11,959,311 | 11,358,804 | 2,858,513 | 2,469,249 | 4,381,830 | 3,897,959 | 2,897,085 | 2,591,753 | 22,096,739 | 20,317,765 |
Cost of sales | (5,954,799) | (5,858,569) | (1,288,860) | (1,317,879) | (2,498,055) | (1,972,837) | (1,230,889) | (1,073,733) | (10,972,603) | (10,223,018) |
Gross profit | 6,004,512 | 5,500,235 | 1,569,653 | 1,151,370 | 1,883,775 | 1,925,122 | 1,666,196 | 1,518,020 | 11,124,136 | 10,094,747 |
Distribution expenses | (1,520,653) | (1,523,667) | (247,973) | (152,709) | (550,900) | (448,112) | (508,739) | (483,331) | (2,828,265) | (2,607,819) |
Sales and marketing expenses | (1,093,784) | (1,019,223) | (225,783) | (159,329) | (421,107) | (338,927) | (287,334) | (259,379) | (2,028,008) | (1,776,858) |
Administrative expenses | (968,082) | (821,030) | (113,651) | (83,311) | (274,199) | (204,452) | (174,070) | (163,231) | (1,530,002) | (1,272,024) |
Other operating income/(expenses) | 565,522 | 494,546 | 2,142 | (16,904) | 26,382 | (6,060) | 1,275 | 3,153 | 595,321 | 474,735 |
Exceptional items | (6,497) | (3,099) | (3,387) | (2,825) | (6,747) | (10,072) | (2,251) | (647) | (18,882) | (16,643) |
Income from operations | 2,981,018 | 2,627,762 | 981,001 | 736,292 | 657,204 | 917,499 | 695,077 | 614,585 | 5,314,300 | 4,896,138 |
Net financial results | (681,525) | (837,896) | ||||||||
Share of results of associates and joint ventures | 36,844 | 1,440 | ||||||||
Income before income tax | 4,669,619 | 4,059,682 | ||||||||
Income tax expense | (1,103,318) | (44,678) | ||||||||
Net income | 3,566,301 | 4,015,004 |
The net revenue attributable to the Company's operations in Argentine amount to R$2.3 billion in the three-month period ended September 30, 2024 (R$2.1 billion in the three-month period ended September 30, 2023).
AMBEV S.A. |
(c) | Additional information – by business unit – nine and three-month periods ended in: |
Nine-month period ended September 30: | Three-month period ended September 30: | ||||||||||||
Brazil | Brazil | ||||||||||||
Beer | Soft drinks and Non-alcoholic and non-carbonated |
Total | Beer | Soft drinks and Non-alcoholic and non-carbonated |
Total | ||||||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||
Net sales | 28,885,252 | 27,533,278 | 6,001,485 | 5,238,270 | 34,886,737 | 32,771,548 | 9,886,331 | 9,552,475 | 2,072,980 | 1,806,329 | 11,959,311 | 11,358,804 | |
Cost of sales | (14,252,701) | (14,123,533) | (3,306,278) | (3,005,607) | (17,558,979) | (17,129,140) | (4,825,072) | (4,790,678) | (1,129,727) | (1,067,891) | (5,954,799) | (5,858,569) | |
Gross profit | 14,632,551 | 13,409,745 | 2,695,207 | 2,232,663 | 17,327,758 | 15,642,408 | 5,061,259 | 4,761,797 | 943,253 | 738,438 | 6,004,512 | 5,500,235 | |
Distribution expenses | (3,727,702) | (3,712,906) | (922,177) | (892,160) | (4,649,879) | (4,605,066) | (1,196,033) | (1,224,136) | (324,620) | (299,531) | (1,520,653) | (1,523,667) | |
Sales and marketing expenses | (3,140,534) | (2,831,057) | (361,064) | (344,982) | (3,501,598) | (3,176,039) | (969,168) | (917,522) | (124,616) | (101,701) | (1,093,784) | (1,019,223) | |
Administrative expenses | (2,409,986) | (2,172,054) | (360,370) | (326,765) | (2,770,356) | (2,498,819) | (843,057) | (722,307) | (125,025) | (98,723) | (968,082) | (821,030) | |
Other operating income/(expenses) | 1,359,101 | 988,676 | 312,032 | 328,209 | 1,671,133 | 1,316,885 | 461,649 | 385,146 | 103,873 | 109,400 | 565,522 | 494,546 | |
Exceptional items | (13,334) | (124,987) | - | - | (13,334) | (124,987) | (6,497) | (3,099) | - | - | (6,497) | (3,099) | |
Income from operations | 6,700,096 | 5,557,417 | 1,363,628 | 996,965 | 8,063,724 | 6,554,382 | 2,508,153 | 2,279,879 | 472,865 | 347,883 | 2,981,018 | 2,627,762 | |
Net financial results | (1,097,617) | (1,662,585) | (401,486) | (350,417) | |||||||||
Share of results of associates and joint ventures | 2,691 | (4,422) | 36,592 | 398 | |||||||||
Income before income tax | 6,968,798 | 4,887,375 | 2,616,124 | 2,277,743 | |||||||||
Income tax expense | (766,215) | 1,978,005 | (450,639) | 576,063 | |||||||||
Net income | 6,202,583 | 6,865,380 | 2,165,485 | 2,853,806 |
AMBEV S.A. |
16. | NET SALES |
In compliance with the Brazilian Federal Law 6,404/76, Company discloses the reconciliation between gross and net sales presented in the consolidated income statement. The values by each operational segment are disclosed in note 15 – Segment reporting.
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Gross sales | 93,425,564 | 91,735,377 | 33,120,469 | 31,325,320 | |
Excise duty | (19,436,205) | (18,531,708) | (6,989,973) | (6,384,749) | |
Discounts | (11,572,108) | (13,456,047) | (4,033,757) | (4,622,806) | |
62,417,251 | 59,747,622 | 22,096,739 | 20,317,765 |
At September 30, 2024 the Company calculated R$1,041.0 million (R$1,013.3 million at September 30, 2023), in government grants, registered in the net revenue. Since March 2024, the Group has been obtaining favorable preliminary injunctions in its operations in Brazil that exempt it from paying PIS and Cofins on the amounts calculated as a government grant for investment related to the tax benefits called presumed ICMS credits, under the terms of Law No. 14,789/2024.
17. | OTHER OPERATING INCOME/(EXPENSES) |
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Government grants/ present value adjustment of long-term fiscal incentives (i) | 1,301,119 | 1,180,889 | 479,441 | 425,400 | |
Extemporaneous credits/(debits) | 22,913 | - | 22,913 | - | |
(Additions)/reversals of provisions | (19,910) | (12,517) | (8,009) | (811) | |
Gains/(losses) on disposals of property, plant and equipment, intangible assets and the operations of associates | 74,887 | 54,551 | 32,998 | 11,978 | |
Other operating income/(expenses), net | 328,925 | 129,325 | 67,978 | 38,168 | |
1,707,934 | 1,352,248 | 595,321 | 474,735 |
(i) As detailed in note 16 – Net sales, since March 2024, the Group has been obtaining favorable preliminary injunctions in its operations in Brazil that exempt it from paying PIS and Cofins on the amounts calculated as a government grant for investment related to the tax benefits called presumed ICMS credits, under the terms of Law No. 14,789/2024.
18. | EXCEPTIONAL ITEMS |
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Restructuring (i) | (47,371) | (72,402) | (18,401) | (16,107) | |
Legal fees (ii) | - | (94,670) | - | - | |
Effect of application of IAS 29 (hyperinflation) | (807) | (876) | (481) | (536) | |
(48,178) | (167,948) | (18,882) | (16,643) |
(i) The restructuring expenses primarily related to centralization projects and resizing in Brazil, Latin America CAC and Canada.
(ii) 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.
AMBEV S.A. |
19. | FINANCIAL RESULTS |
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Finance income | |||||
Income from cash and cash equivalents | 1,008,455 | 602,588 | 278,719 | 251,685 | |
Income from debt securities | 71,368 | 40,175 | 33,558 | 10,708 | |
Income from other receivables (i) | 523,596 | 644,098 | 190,181 | 158,642 | |
Other finance income | 42,629 | 260,772 | 13,109 | 67,249 | |
Total of finance income | 1,646,048 | 1,547,633 | 515,567 | 488,284 | |
Finance expenses | |||||
Interest on accounts payable present value adjustment (ii) | (860,154) | (1,082,349) | (245,661) | (367,398) | |
Interest on bank debts and tax incentives (ii) | (142,342) | (126,477) | (49,115) | (42,809) | |
Interest on provision for disputes and litigation | (153,105) | (106,077) | (59,059) | (15,776) | |
Interest on leases (ii) | (123,769) | (159,512) | (45,031) | (52,026) | |
Interest on pension plans | (82,400) | (86,727) | (28,886) | (27,420) | |
Other interest expenses (ii) (iii) | (410,162) | (539,460) | (147,644) | (169,153) | |
Losses on hedging instruments (iv) | (513,464) | (1,571,276) | (170,325) | (469,394) | |
Tax on financial transactions | (146,601) | (149,437) | (45,725) | (43,105) | |
Bank guarantee expenses and surety bond premiums (v) | (215,150) | (163,508) | (98,529) | (48,598) | |
Other finance expenses | (206,508) | (241,028) | (46,135) | (64,209) | |
Total of finance expenses | (2,853,655) | (4,225,851) | (936,110) | (1,299,888) | |
Effect of application of IAS 29 (hyperinflation) (vi) | (243,649) | 538,621 | (99,444) | 145,878 | |
Exchange differences, net (vi) | (252,436) | (769,645) | (161,538) | (172,170) | |
Other net financial results | (496,085) | (231,024) | (260,982) | (26,292) | |
Net financial results | (1,703,692) | (2,909,242) | (681,525) | (837,896) |
(i) Refers, mainly, to monetary adjustment of recoverable taxes.
(ii) From the 1st quarter of 2024 onwards, the balances previously presented in the line “Interest expense” have been segregated between the lines “Interest on bank debts and tax incentives”, “Interest on accounts payable present value adjustment”, “Interest on leases”, and “Other interest expenses”, including for comparative purposes.
(ii) Includes, among others, interest on tax payment financing, under the terms of the Special Tax Regularization Program (PERT) of 2017.
(iv) Refers to term element, which can be separated and excluded from the designation of the financial instrument as a hedging instrument, is recognized in the financial result, in accordance with IFRS 9 - Financial Instruments.
(v) Description changed to “Bank guarantee expenses and surety bond premiums”, to better reflect the nature of the balances, including for comparative purposes, from the 1st quarter of 2024.
(vi) From the 1st quarter of 2024 onwards, the Company changed the way it presents note 19 – Net financial results. The exchange differences and hperinflation, previously shown between financial income and expenses, are now presented net of the balances under the label "Other net financial results" both in this explanatory note and in the income statements.
Interest expenses are presented net of the effects of interest rate derivative financial instruments which mitigate Ambev’s interest rate risk (note 21- Financial instruments and risks).
20. | SHARE-BASED PAYMENTS |
Currently the Company has two plans of share-based payment programs: (i) the Stock Option Plan, approved in Extraordinary General Meeting of July 30, 2013 (“Stock Option Plan”) and (ii) Share-based Plan, approved in Extraordinary Shareholders Meeting of April 29, 2016, as amended in Extraordinary Shareholders Meeting of April 24, 2020 (“Share-Based Plan”). Under each of these plans, the Company are able to periodically issue different stock options and restricted share units programs. These programs allows certain Group employees and members of the Management, indicated by the Board of Directors and People Committee, to either buy shares of the Company by exercising stock options or receive shares directly.
AMBEV S.A. |
20.1 Share-Based Plan
During the period, the Company granted 6,787 thousand restricted shares and performance shares under the Share-Based Plan (6,813 thousand in September 30, 2023), representing a fair value of approximately R$85,384 in September 30, 2024 (R$89,315 in September 30, 2023).
The total number of shares granted to the Company’s executives under the Share-Based Plan, which will be delivered in the future under certain conditions, is shown below:
Restricted and performance shares
Thousand restricted shares | 09/30/2024 | 09/30/2023 | |
Restricted and performance shares outstanding at January | 118,996 | 108,854 | |
New restricted and performance shares during the period | 6,787 | 6,813 | |
Restricted and performance shares granted during the period | (7,307) | (3,765) | |
Restricted and performance shares forfeited during the period | (3,480) | (4,483) | |
Restricted and performance shares outstanding at the end of the period | 114,996 | 107,419 |
20.2 Option Plan
The Company has not granted stock options, neither there were options exercised during the period ended September 30, 2024, and September 30, 2023. The total number of outstanding options developed was as follows:
Thousand options | 09/30/2024 | 09/30/2023 | |
Options outstanding at January | 87,961 | 99,717 | |
Options forfeited during the period | (1,694) | (3,203) | |
Options outstanding at the end of the period | 86,267 | 96,514 |
The range of exercise prices of the outstanding options is from R$15.95 in September 30, 2024 (R$15.95 in September 30, 2023) to R$34.18 in September 30, 2024 (R$37.91 in September 30, 2023) and the remaining exercise period for these options ranges approximately between 5 and 53 months. Additionally, there is a stock option program in the vesting period, which cannot be exercised yet.
Of the 86,267 thousand outstanding options (96,514 thousand on September 30, 2023), 68,402 thousand options were vested on September 30, 2024 (65,145 thousand on September 30, 2023).
The weighted average exercise price of the options is as follows:
In R$ per share | 09/30/2024 | 09/30/2023 | |
Options outstanding at January 1 | 18.86 | 19.39 | |
Options forfeited during the period | 18.50 | 18.09 | |
Options outstanding at the end of the period | 18.93 | 19.35 | |
Options exercisable at the end of the period | 19.16 | 20.18 |
AMBEV S.A. |
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.
20.3 Expenses related to share-based payments
The transactions with share-based payments described above generated an expense of R$291,812 on September 30, 2024 (R$269,574 on September 30, 2023), recorded as administrative expenses.
21. | FINANCIAL INSTRUMENTS AND RISKS |
21.1 Financial instruments 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 of the consolidated financial instruments recognized in the financial statements, segregated by category:
09/30/2024 | 12/31/2023 | |
Assets | ||
Amortized cost | ||
Cash and cash equivalents less bank overdrafts (note 5.1) | 19,784,362 | 16,059,003 |
Trade receivables excluding prepaid expenses | 7,909,857 | 7,566,654 |
Investment securities (note 5.2) | 248,018 | 242,168 |
Subtotal | 27,942,237 | 23,867,825 |
Fair value through profit or loss | ||
Investment securities (note 5.2) | 1,154,677 | 277,164 |
Derivatives hedges (note 21.2) | 536,046 | 379,722 |
Subtotal | 1,690,723 | 656,886 |
Total assets | 29,632,960 | 24,524,711 |
Liabilities | ||
Amortized cost | ||
Trade payables (note 11) | 21,415,272 | 23,502,401 |
Interest-bearing loans and borrowings (note 12) | 3,380,273 | 3,501,066 |
Other liabilities | 2,504,020 | 2,129,624 |
Subtotal | 27,299,565 | 29,133,091 |
Fair value through profit or loss | ||
Put options granted on subsidiaries (i) | 937,670 | 2,791,088 |
Derivatives hedges (note 21.2) | 185,193 | 763,005 |
Other liabilities | 318,773 | 272,647 |
Subtotal | 1,441,636 | 3,826,740 |
Total liabilities | 28,741,201 | 32,959,831 |
(i) 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 was denominated in US Dollars for Tranche A, exercised in January 2024 and remains denominated Dominican Pesos for 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.
AMBEV S.A. |
21.2 Derivative financial instruments
Transactions protected by derivative financial instruments in accordance with the Financial Risk Management Policy
Nine-month period ended: 09/30/2024 | Three-month period ended: 09/30/2024 | |||||||||||||
Fair Value | Gain / (Losses) | Gain / (Losses) | ||||||||||||
Hedge position | Risk | Notional | Assets | Liabilities | Financial results | Operational result | Equity | Financial results | Operational result | Equity | ||||
Term element | Present element | Hedge accounting effect | Term element | Present element | Hedge accounting effect | |||||||||
Cost | 17,576,560 | 527,969 | (179,656) | (499,851) | 366,409 | 83,538 | (168,587) | 341,930 | (118,102) | |||||
Commodities | 4,723,695 | 278,214 | (113,550) | (223,532) | (170) | 202,929 | (57,753) | 49,959 | 238,812 | |||||
US Dollars | 12,819,450 | 249,667 | (64,255) | (278,808) | 365,594 | (119,535) | (111,415) | 291,757 | (357,175) | |||||
Euros | 3,977 | 89 | - | (197) | 617 | 546 | (41) | 363 | 405 | |||||
Mexican Pesos | 29,438 | (1) | (1,851) | 2,686 | 368 | (402) | 622 | (149) | (144) | |||||
Importing of fixed assets | 182,914 | 6,313 | (3,238) | (2,966) | 6,565 | 11,207 | 371 | 2,571 | 1,168 | |||||
US Dollars | 182,914 | 6,313 | (3,238) | (2,966) | 6,565 | 11,207 | 371 | 2,571 | 1,168 | |||||
Expenses | 57,304 | 1,764 | (901) | (1,186) | 1,911 | 3,369 | (106) | 915 | 794 | |||||
US Dollars | 57,304 | 1,764 | (901) | (1,186) | 1,911 | 3,369 | (106) | 915 | 794 | |||||
Financial assets | (573,797) | - | (1,398) | 10,445 | - | - | 8,230 | - | - | |||||
US Dollars | (573,797) | - | (1,398) | 10,445 | - | - | 8,230 | - | - | |||||
Balance at end of the period | 17,242,981 | 536,046 | (185,193) | (493,558) | 374,885 | 98,114 | (160,092) | 345,416 | (116,140) |
AMBEV S.A. |
12/31/2023 | Nine-month period ended: 09/30/2023 | Three-month period ended: 09/30/2023 | ||||||||||||
Fair Value | Gain / (Losses) | Gain / (Losses) | ||||||||||||
Hedge position | Risk | Notional | Assets | Liabilities | Financial results | Operational result | Equity | Financial results | Operational result | Equity | ||||
Term element | Present element | Hedge accounting effect | Term element | Present element | Hedge accounting effect | |||||||||
Cost | 17,374,318 | 379,571 | (741,901) | (1,485,795) | 224,598 | 127,651 | (457,124) | (1,363) | 985,512 | |||||
Commodities | 4,025,739 | 198,319 | (219,325) | (301,482) | (302,542) | (133,734) | (170,021) | (79,143) | (511,534) | |||||
US Dollars | 13,200,032 | 164,916 | (522,348) | (1,183,608) | 513,234 | 247,951 | (286,803) | 72,211 | 1,465,416 | |||||
Euros | 37,424 | 143 | (228) | (72) | 2,114 | (716) | 204 | 1,017 | (979) | |||||
Mexican Pesos | 111,123 | 16,193 | - | (633) | 11,792 | 14,150 | (504) | 4,552 | 32,609 | |||||
Fixed Assets | 249,716 | 62 | (14,637) | (25,861) | 76 | 8,244 | (11,853) | 1,560 | 19,435 | |||||
US Dollars | 249,716 | 62 | (14,637) | (25,861) | 76 | 8,244 | (11,853) | 1,560 | 19,435 | |||||
Expenses | 64,675 | 89 | (4,212) | (21,844) | 15,263 | 14,419 | (4,266) | (1,564) | 7,943 | |||||
US Dollars | 64,675 | 89 | (4,212) | (21,844) | 15,263 | 14,419 | (4,266) | (1,564) | 7,943 | |||||
Financial assets | (59,306) | - | (2,255) | - | - | - | - | - | - | |||||
US Dollars | (59,306) | - | (2,255) | - | - | - | - | - | - | |||||
Balance at end of the period | 17,629,403 | 379,722 | (763,005) | (1,533,500) | 239,937 | 150,314 | (473,243) | (1,367) | 1,012,890 |
As disclosed in its accounting policy, the term element, which can be separated and excluded from the designation of the financial instrument as a hedging instrument, is recognized in the financial result, in accordance with IFRS 9 - Financial Instruments.
AMBEV S.A. |
21.2.1 Instrument maturity
As of September 30, 2024 the notional and fair value amounts per instrument and maturity were as follows:
Notional Value | |||||
Hedge position | Risk | 2024 | 2025 | >2026 | Total |
Cost | 7,979,615 | 9,596,945 | - | 17,576,560 | |
Commodities | 1,603,026 | 3,120,669 | - | 4,723,695 | |
US Dollars | 6,343,174 | 6,476,276 | - | 12,819,450 | |
Euros | 3,977 | - | - | 3,977 | |
Mexican Pesos | 29,438 | - | - | 29,438 | |
Importing of fixed assets | 42,853 | 140,061 | - | 182,914 | |
US Dollars | 42,853 | 140,061 | - | 182,914 | |
Expenses | 16,660 | 40,644 | - | 57,304 | |
US Dollars | 16,660 | 40,644 | - | 57,304 | |
Financial assets | (573,797) | - | - | (573,797) | |
US Dollars | (573,797) | - | - | (573,797) | |
7,465,331 | 9,777,650 | - | 17,242,981 |
Fair Value | |||||
Hedge position | Risk | 2024 | 2025 | >2026 | Total |
Costs | 145,817 | 202,496 | - | 348,313 | |
Commodities | 67,973 | 96,691 | - | 164,664 | |
US Dollars | 79,607 | 105,805 | - | 185,412 | |
Euros | 89 | - | - | 89 | |
Mexican Pesos | (1,852) | - | - | (1,852) | |
Importing of fixed assets | 429 | 2,646 | - | 3,075 | |
US Dollars | 429 | 2,646 | - | 3,075 | |
Expenses | 43 | 820 | - | 863 | |
US Dollars | 43 | 820 | - | 863 | |
Financial assets | (1,398) | - | - | (1,398) | |
US Dollars | (1,398) | - | - | (1,398) | |
144,891 | 205,962 | - | 350,853 |
21.2.2 Margins pledged as collateral
In order to comply with the guarantee requirements regarding derivative exchanges and/or counterparties to certain operations with derivative financial instruments, as at September 30, 2024 the Company held R$355,744 in highly liquid financial investments or in cash, classified as cash and cash equivalents and investment securities (R$197,736 as at December 31, 2023).
AMBEV S.A. |
21.3 Classification of financial instruments
09/30/2024 | 12/31/2023 | ||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||
Financial assets | |||||||||
Investment securities | 1,154,677 | - | - | 1,154,677 | 277,164 | - | - | 277,164 | |
Derivatives – operational hedge | 60,279 | 475,767 | - | 536,046 | 53,372 | 326,350 | - | 379,722 | |
1,214,956 | 475,767 | - | 1,690,723 | 330,536 | 326,350 | - | 656,886 | ||
Financial liabilities | |||||||||
Put options granted on subsidiaries | - | - | 937,670 | 937,670 | - | - | 2,791,088 | 2,791,088 | |
Other liabilities | - | - | 318,773 | 318,773 | - | - | 272,647 | 272,647 | |
Derivatives liabilities at fair value through profit and loss | 1,398 | - | - | 1,398 | 2,255 | - | - | 2,255 | |
Derivatives – operational hedge | 19,706 | 164,089 | - | 183,795 | 70,007 | 690,743 | - | 760,750 | |
21,104 | 164,089 | 1,256,443 | 1,441,636 | 72,262 | 690,743 | 3,063,735 | 3,826,740 |
21.3.1 Financial instruments level 3
As part of the negotiations regarding the acquisition of the shares of Tenedora, the Company signed in 2020 the second amendment to the Shareholders' Agreement extending the partnership between the Company and ELJ. As at December 2023, ELJ was the owner of 15% of the shares of Tenedora, and its put options was divided into two tranches: (i) Tranche A, corresponding to 12.11% of the shares, that was exercised on January 31, 2024; and (ii) Tranche B, corresponding to 2.89% of the shares, exercisable by ELJ from 2026. The Company, on the other hand, has a call option over Tranche B shares, exercisable from 2029. On September 30, 2024, the fair value of Tranche B held by ELJ, is R$937,670(R$2,791,088 on December 31, 2023, considering the sum of the two tranches existing up to this point).
The fair value of (i) Tranche A was 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 (ii) 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 WACC 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”.
21.3.2 Reconciliation of changes in the liabilities categorized at Level 3
Financial liabilities at December 31, 2023 | 3,063,735 |
Acquisition of investments | (2,040,682) |
Total gains and losses during the period | 233,390 |
Losses/(gains) recognized in net income | 84,093 |
Losses/(gains) recognized in equity | 149,297 |
Financial liabilities at September 30, 2024 | 1,256,443 |
21.4 Risk management
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.
AMBEV S.A. |
21.4.1 Market risk
21.4.1.1 Interest rate risk: consists of the possibility that the Company may incur losses due to fluctuations in interest rates, which may increase the financial expenses of financial liabilities, and/or decrease the financial income of financial assets, as well as negatively impact the fair value of financial assets measured at fair value. To mitigate this 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. 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 September 30, 2024, the Company and its subsidiaries did not hold hedge positions to the exposure described below:
09/30/2024 | 12/31/2023 | ||||
Risk | Risk | ||||
Interest rate | Amount in Brazilian Real | Interest rate | Amount in Brazilian Real | ||
Brazilian Reais | 10.2% | 2,265,567 | 10.1% | 2,372,010 | |
Other | 12.1% | 439,657 | 11.5% | 405,613 | |
US Dollars | 14.0% | 5,786 | 14.0% | 24 | |
Canadian Dollars | 5.8% | 434,931 | 5.6% | 480,255 | |
Pre-fixed interest rate | 3,145,941 | 3,257,902 | |||
Brazilian Reais | 7.8% | 234,332 | 8.1% | 243,164 | |
Post fixed interest rate | 234,332 | 243,164 |
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.
AMBEV S.A. |
Sensitivity analysis of exchange rate variations and commodity price variations:
Transaction | Risk | Fair Value | Probable scenario | Adverse scenario | Remote scenario |
Commodities hedge | Increase in commodities price | 164,664 | 200,692 | 1,345,588 | 2,526,512 |
Input purchases | (164,664) | (200,692) | (1,345,588) | (2,526,512) | |
Foreign exchange hedge | Foreign currency increase | 183,649 | 308,240 | 3,396,865 | 6,610,081 |
Input purchases | (183,649) | (310,258) | (3,915,179) | (7,646,710) | |
Cost effects | - | (2,018) | (518,314) | (1,036,629) | |
Foreign exchange hedge | Foreign currency increase | 3,075 | 3,767 | 48,803 | 94,532 |
Capex Purchases | (3,075) | (3,767) | (48,803) | (94,532) | |
Fixed asset effects | - | - | - | - | |
Foreign exchange hedge | Foreign currency increase | 863 | 1,076 | 15,189 | 29,515 |
Expenses | (863) | (1,231) | (51,476) | (102,089) | |
Result of expense effects | - | (155) | (36,287) | (72,574) | |
Foreign exchange hedge | Foreign currency increase | (1,398) | (7,316) | (144,847) | (288,297) |
Cash | 1,398 | 7,316 | 144,847 | 288,297 | |
Financial assets effects | - | - | - | - | |
- | (2,173) | (554,601) | (1,109,203) |
21.4.1.2 Foreign currency risk: the Company is exposed to foreign currency risk on borrowings, investments, purchases, dividends and/or interest expenses/income where these are denominated in a currency other than the functional currency of the Group entity. The main derivative financial instruments used to manage foreign currency risk are futures contracts, swaps, options, non-deliverable forwards, and full deliverable forwards.
21.4.1.3 Commodity Risk: A significant portion of the Company’s raw materials is composed by commodities, which have historically experienced substantial price fluctuations. The Company therefore uses both fixed prices 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.
21.4.2 Credit Risk
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 September 30, 2024. As at September 30, 2024, there was no concentration of credit risk in any counterparties in excess of the limits established by the Company’s risk policy. The counterparty risk is reassessed on a quarterly basis.
Customers
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 large number of customers and control procedures used to monitor risk. Historically, the Company has not incurred significant losses on receivables from customers.
AMBEV S.A. |
Investments
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.
21.4.3 Liquidity Risk
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: payments of dividends and interest on shareholders’ equity; capital expenditure; investments in companies; increases in the ownership of Ambev’s subsidiaries or companies in which it holds equity investments; share buyback programs; and debt servicing.
The Company believes that cash flows from operating activities, cash and cash equivalents and short-term investments, together with derivatives and access to loan facilities are sufficient to finance capital expenditures, financial liabilities, and dividend payments in the future.
09/30/2024 | |||||||
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) | 31,561,074 | 33,224,469 | 30,328,031 | 145,859 | 13,991 | 951,016 | 1,785,572 |
Secured bank loans | 117,447 | 156,909 | 31,000 | 25,181 | 25,182 | 50,364 | 25,182 |
Other secured loans | 368,967 | 508,579 | 152,828 | 159,934 | 113,643 | 28,340 | 53,834 |
Lease liabilities | 2,893,859 | 3,535,785 | 1,294,439 | 959,042 | 631,893 | 520,302 | 130,109 |
34,941,347 | 37,425,742 | 31,806,298 | 1,290,016 | 784,709 | 1,550,022 | 1,994,697 |
12/31/2023 | |||||||
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) | 36,817,788 | 38,453,664 | 35,522,500 | 439,912 | 10,606 | 808,553 | 1,672,093 |
Secured bank loans | 126,566 | 177,794 | 26,704 | 25,182 | 25,181 | 50,364 | 50,363 |
Other secured loans | 415,670 | 594,730 | 156,040 | 171,214 | 134,204 | 79,381 | 53,891 |
Lease liabilities | 2,958,830 | 3,473,027 | 1,343,980 | 608,305 | 552,630 | 452,614 | 515,498 |
40,318,854 | 42,699,215 | 37,049,224 | 1,244,613 | 722,621 | 1,390,912 | 2,291,845 |
(i) Mainly includes amounts related to suppliers, taxes, fees and contributions payables, dividends, and interest on shareholders’ equity payable, salaries and charges, put options related to the Company’s participation in subsidiaries and other liabilities, except transactions with related parties.
21.4.4 Capital management
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 financial statements.
AMBEV S.A. |
The company evaluates its net debt in order to guarantee the continuity of its business in the long term.
09/30/2024 | 12/31/2023 | ||
Debt details | |||
Interest-bearing loans and borrowings current and non-current | 3,380,273 | 3,501,066 | |
(-) Financial assets at fair value through profit or loss | (1,154,677) | (277,164) | |
(-) Cash and cash equivalents less bank overdraft | (19,784,362) | (16,059,003) | |
Net debt/(cash) | (17,558,766) | (12,835,101) |
21.5 Offsetting 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 will have the option to settle on a net basis, in case of a default by the counterparty.
21.6 Risks management 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 have been no changes in the key risks considered by management compared to those presented in the financial statements for the year ended December 31, 2023.
22. | COLLATERAL AND CONTRACTUAL COMMITMENTS WITH SUPPLIERS, ADVANCES FROM CUSTOMERS AND OTHERS |
09/30/2024 | 12/31/2023 | |
Collateral given for the Company’s own liabilities | 618,074 | 581,019 |
Other commitments | 1,206,196 | 1,146,841 |
1,824,270 | 1,727,860 | |
Commitments to suppliers - Property, plant and equipment and Intangible | 1,049,955 | 1,000,817 |
Commitments to suppliers - Inventories | 38,713,739 | 38,390,957 |
39,763,694 | 39,391,774 |
As at September 30, 2024 the company had R$594,193 (R$558,182 as at December 31, 2023) of cash guarantees. The amount of fixed assets pledged as collateral are not material.
Most of the balance relates to commitments to suppliers of packaging. These commitments have as its main goal to provide strategic supplies of long term security to the Company, besides providing greater security to vendors in long term investments.
Future contractual commitments as at September 30, 2024 and December 31, 2023 are as follows:
AMBEV S.A. |
09/30/2024 | 12/31/2023 | |
Less than 1 year | 14,921,474 | 9,619,224 |
Between 1 and 2 years | 10,089,553 | 9,536,293 |
More than 2 years | 14,752,667 | 20,236,257 |
39,763,694 | 39,391,774 |
AMBEV S.A. |
23. | RELATED PARTIES |
The Company adopts the corporate governance practices recommended and/or required by the applicable laws. Under the Company’s bylaws, 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 is 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.
23.1 Transactions with key management members
The key management includes the Statutory Executive Board and Board of Directors. In addition to short-term benefits (primarily salaries), management members are entitled to participate in the share-based payment, as in note 20 – Share-based payments.
Total expenses related to the Company’s management members are as follow:
Nine-month period ended: | Three-month period ended: | ||||
09/30/2024 | 09/30/2023 | 09/30/2024 | 09/30/2023 | ||
Short-term benefits (i) | 38,011 | 36,890 | 12,072 | 11,052 | |
Share-based payments (ii) | 73,206 | 61,728 | 25,218 | 20,780 | |
Social security (iii) | 11,791 | 5,888 | 2,969 | 1,355 | |
Total key management remuneration | 123,008 | 104,506 | 40,259 | 33,187 |
(i) These mainly correspond to management’s salaries 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 and Committees.
(iii) These correspond to the social security charges levied on the management’s remuneration.
Except the abovementioned remuneration, the Company has no other types of transaction with the Management members or pending balances receivable or payable in its balance sheet.
23.2 Transactions with the Company's shareholders:
23.2.1 Medical, dental and other benefits
Fundação Zerrenner is one of Ambev’s shareholders, 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, facilities for assisting elderly people, either directly or through financial assistance agreements with other entities. As at September 30, 2024, and December 31, 2023, 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. |
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.
On September 30, 2024, expenses incurred and recorded by Fundação Zerrenner with third parties for providing these benefits totaled R$257,393 (R$243,716 as at September 30, 2023), of which R$232,243 and R$25,150 were related to active employees and retirees, respectively (R$219,794 and R$23,922 as at September 30, 2023, respectively).
23.2.2 Licensing agreement with AB Inbev
The Company has a licensing agreement with Anheuser-Busch, Inc. S.A./N.V. (“AB Inbev”) to produce, bottle, sell and distribute Budweiser® products in Brazil, Canada and Argentina, and sales and distribution agreements for Budweiser® products in Guatemala, the Dominican Republic, Paraguay, Bolívia, Nicaragua, Uruguay, Chile, Panama, Costa Rica, Puerto Rico and in certain other CAC countries. In addition, the Company produces and distributes Stella Artois® products under a license to ABI in Brazil and in other Latin America - South countries and Canada and, through a license granted to ABI, can distribute Brahma® products in the United States and several other countries such as the United Kingdom, Spain, Sweden, Finland and Greece.
The Company and its subsidiaries have licensing agreements with the Group Modelo, subsidiaries of AB Inbev to import, produce, promote and sell Corona® products in Brazil, Canada, Argentina e Chile, as well agreements to import, promote and sell Corona® products in Latin America – South. The Company has agreements with Spaten-Franziskaner-Bräu GmbH, a subsidiary of ABI, to produce, promote, advertise and sell Spaten® in Brazil and Canada, and agreements to import and distribute Spaten® products in Uruguay.
The Company and its subsidiaries also have agreements to import, promote and resell Michelob Ultra®, Michelob® and Goose Island® products in Brazil, Argentina, Chile, Uruguay, Paraguay, Guatemala, Dominican Republic, Panama, Puerto Rico, Costa Rica, Nicaragua, and in other CAC countries and Canada.
The Company has a licensing agreement with ABI Inbev that allow the Company and its subsidiaries to produce, promote and market Cutwater® in Canada, and allows ABI to produce, promote, advertise and sell Nutrl® in the United States.
In this context, in period ended September 30, 2024, the Company recorded R$35,963 (R$28,177 as at September 30, 2023) and R$746,893 (R$637,365 as at September 30, 2023) as income and cost of sales relating to licensing, respectively in their consolidated results.
23.3 Transactions with related parties
The Group’s consolidated results includes R$519,629 from sales of products, provision of services and other income in the nine-month period ended September 30, 2024 (R$297,541 in September 30, 2023). Regarding product purchases and other expenses, the Group recorded, in the same nine-month period ended September 30, 2024 the amount to R$2,122,445 (R$2,187,225 in September 30, 2023). Finally, the amount to R$(16,352) also recorded by the Group as Net financial results in Transactions with related parties in the nine-month period ended September 30, 2024 (R$36,398 in September 30, 2023). The Group's main transactions were recorded with the following companies AB Inbev, AB Package, AB USA, Bavaria, Cervecería Modelo, among other.
In addition to those disclosed, the Group had no other significant transactions recorded in its results or equity position during the period.
AMBEV S.A. |
List of companies included in the texts above:
Anheuser-Busch InBev N.V. (“AB InBev”) |
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”) |
24. | EVENTS AFTER THE REPORTING PERIOD |
24.1 Cerbuco Brewing arbitration
Cerbuco Brewing Inc., (“Cerbuco”) a Canadian subsidiary of Ambev, owns a 50% equity ownership in Cerveceria Bucanero S.A. (“Bucanero”), a joint venture in Cuba. In 2021, Cerbuco initiated an arbitration proceeding at the International Chamber of Commerce (“ICC”), relating to the potential breach of certain obligations relating to the joint venture. On October 24, 2024, the ICC released an arbitration award partially favorable to Cerbuco. The decision is subject to a motion for clarification depending on the outcome of the arbitration process, there may be impact on Cerbuco’s rights. As a result, Ambev’s ability to continue consolidating Bucanero into its financial statements may also be affected. The financial impact has not been ascertained by the decision and will depend on further assessment by the Court of Arbitration.
24.1 Share buyback program
In a meeting held on October 30, 2024, the Board of Directors approved, pursuant to article 30, Paragraph 1st, “b”, of Law 6,404/76 and CVM Resolution 77/2022, a share buyback program for the repurchase of shares issued by the Company up to the limit of 155,159,038 common shares (“Program”), with the primary purpose of cancelation, and the shares not canceled may be held in treasury, transferred and/or used to cover any share delivery requirements contemplated in the Company's share-based compensation plans. The Program will be in effect until April 30, 2026, as detailed in the Notice Regarding the Negotiation of Shares Issued by the Company, prepared and disclosed today as provided on Exhibit G of CVM Resolution 80/2022.
The Company has 4,388,851,573 outstanding shares as defined in CVM Resolution 77/2022. The acquisition will be recorded as a debit on the capital reserve in the balance sheet dated as of September 30, 2024. The transaction will be carried out through UBS Brasil Corretora de Câmbio, Títulos e Valores Mobiliários S.A. (CNPJ No. 02.819.125/0001-73), Merrill Lynch S.A. Corretora de Títulos e Valores Mobiliários (CNPJ No. 02.670.590/0001-95), Santander Corretora de Câmbio e Valores Mobiliários S.A. (CNPJ No. 51.014.223/0001-49), and Itaú Corretora de Valores S/A (CNPJ No. 61.194.353/0001-64).
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: November 7, 2024
AMBEV S.A. | ||
By: | /s/ Lucas Machado Lira | |
Lucas Machado Lira Chief Financial and Investor Relations Officer |