SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of August, 2017
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____
INTERIM CONSOLIDATED FINANCIAL STATEMENTS - AMBEV S.A.
Interim Consolidated Balance Sheets
As at June 30, 2017 and
December 31, 2016
(Expressed in thousands of Brazilian Reais)
Assets
|
Note
|
06/30/2017
|
12/31/2016
|
|
|
|
|
Cash and cash equivalents
|
5
|
8,757,342
|
7,876,849
|
Investment securities
|
6
|
8,770
|
282,771
|
Derivative financial instruments
|
21
|
259,577
|
196,655
|
Trade receivable
|
|
3,572,196
|
4,368,059
|
Inventories
|
7
|
4,663,951
|
4,347,052
|
Income tax and social contributions recoverable
|
|
3,852,294
|
4,693,724
|
Other taxes receivable
|
|
676,845
|
729,586
|
Other assets
|
|
1,251,873
|
1,392,155
|
Current assets
|
|
23,042,848
|
23,886,851
|
|
|
|
|
Investment securities
|
6
|
94,475
|
104,340
|
Derivative financial instruments
|
21
|
29,849
|
16,326
|
Income tax and social contributions recoverable
|
|
-
|
4,493
|
Other taxes recoverable
|
|
345,921
|
343,147
|
Deferred tax assets
|
8
|
3,246,697
|
2,268,142
|
Other assets
|
|
2,049,864
|
1,973,584
|
Employee benefits
|
|
33,713
|
33,503
|
Investments in associates
|
|
306,635
|
300,115
|
Property, plant and equipment
|
9
|
18,638,073
|
19,153,836
|
Intangible assets
|
|
5,239,605
|
5,245,881
|
Goodwill
|
10
|
31,096,331
|
30,511,200
|
Non-current assets
|
|
61,081,163
|
59,954,567
|
|
|
|
|
Total assets
|
|
84,124,011
|
83,841,418
|
1
Interim Consolidated Balance Sheets
(continued)
As at June 30, 2017 and
December 31, 2016
(Expressed in thousands of Brazilian
Reais)
Equity and
liabilities
|
Note
|
06/30/2017
|
12/31/2016
|
|
|
|
|
Trade payables
|
|
9,123,481
|
10,868,757
|
Derivative financial
instruments
|
21
|
195,380
|
686,358
|
Interest-bearing loans and
borrowings
|
11
|
3,590,840
|
3,630,604
|
Bank overdrafts
|
5
|
27,061
|
-
|
Wages and salaries
|
|
799,488
|
686,627
|
Dividends and interest on shareholders’
equity payable
|
|
3,139,950
|
1,714,401
|
Income tax and social contribution
payable
|
|
1,026,736
|
904,240
|
Taxes and contributions
payable
|
|
2,024,276
|
3,378,178
|
Put option granted on subsidiary
and other liabilities
|
|
5,920,044
|
6,735,849
|
Provisions
|
12
|
168,725
|
168,636
|
Current
liabilities
|
|
26,015,981
|
28,773,650
|
|
|
|
|
Trade payables
|
|
186,741
|
237,802
|
Derivative financial
instruments
|
21
|
2,975
|
27,022
|
Interest-bearing loans and
borrowings
|
11
|
1,326,796
|
1,765,706
|
Deferred tax
liabilities
|
8
|
2,264,462
|
2,329,722
|
Taxes and contributions
payable
|
|
735,750
|
681,424
|
Put option granted on subsidiary
and other liabilities
|
|
767,440
|
471,792
|
Provisions
|
12
|
889,488
|
765,370
|
Employee benefits
|
|
2,202,316
|
2,137,657
|
Non-current
liabilities
|
|
8,375,968
|
8,416,495
|
|
|
|
|
Total
liabilities
|
|
34,391,949
|
37,190,145
|
|
|
|
|
Equity
|
13
|
|
|
Issued capital
|
|
57,614,140
|
57,614,140
|
Reserves
|
|
64,284,124
|
64,230,028
|
Carrying value
adjustments
|
|
(75,828,400)
|
(77,019,120)
|
Retained earnings
|
|
1,699,355
|
-
|
Equity attributable to equity
holders of Ambev
|
|
47,769,219
|
44,825,048
|
Non-controlling
interests
|
|
1,962,843
|
1,826,225
|
Total Equity
|
|
49,732,062
|
46,651,273
|
|
|
|
|
Total equity and
liabilities
|
|
84,124,011
|
83,841,418
|
The accompanying notes are an integral
part of these interim consolidated financial statements.
2
Interim Consolidated Income
Statements
For the six and three-month period ended
June 30, 2017 and 2016
(Expressed in thousands of Brazilian
Reais)
|
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
Note
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
|
Net sales
|
15
|
21,509,758
|
21,942,302
|
|
10,267,953
|
10,377,204
|
Cost of sales
|
|
(8,571,330)
|
(7,854,921)
|
|
(4,048,189)
|
(3,894,605)
|
Gross profit
|
|
12,938,428
|
14,087,381
|
|
6,219,764
|
6,482,599
|
|
|
|
|
|
|
|
Distribution expenses
|
|
(2,978,712)
|
(2,972,943)
|
|
(1,467,268)
|
(1,457,812)
|
Sales and marketing
expenses
|
|
(2,797,142)
|
(3,029,420)
|
|
(1,383,356)
|
(1,481,543)
|
Administrative expenses
|
|
(1,076,439)
|
(1,087,189)
|
|
(520,780)
|
(553,551)
|
Other operating income/(expenses),
net
|
16
|
513,396
|
723,467
|
|
222,570
|
331,132
|
Exceptional items
|
17
|
(60,779)
|
(28,465)
|
|
(32,085)
|
(22,226)
|
Income from
operations
|
|
6,538,752
|
7,692,831
|
|
3,038,845
|
3,298,599
|
|
|
|
|
|
|
|
Finance cost
|
18
|
(1,817,950)
|
(2,529,448)
|
|
(821,692)
|
(1,035,991)
|
Finance income
|
18
|
246,533
|
458,260
|
|
122,870
|
136,108
|
Net finance cost
|
|
(1,571,417)
|
(2,071,188)
|
|
(698,822)
|
(899,883)
|
|
|
|
|
|
|
|
Share of results of
associates
|
|
6,301
|
7,837
|
|
5,269
|
388
|
Income before income
tax
|
|
4,973,636
|
5,629,480
|
|
2,345,292
|
2,399,104
|
|
|
|
|
|
|
|
Income tax expense
|
19
|
(558,972)
|
(562,966)
|
|
(220,459)
|
(226,583)
|
Net income
|
|
4,414,664
|
5,066,514
|
|
2,124,833
|
2,172,521
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
Equity holders of Ambev
|
|
4,212,283
|
4,813,019
|
|
2,013,148
|
2,046,154
|
Non-controlling interests
|
|
202,381
|
253,495
|
|
111,685
|
126,367
|
|
|
|
|
|
|
|
Basic earnings per share – common -
R$
|
|
0.27
|
0.31
|
|
0.13
|
0.13
|
Diluted earnings per share – common -
R$
|
|
0.27
|
0.30
|
|
0.13
|
0.13
|
The accompanying notes are an integral
part of these interim consolidated financial statements.
3
Interim Consolidated Statements of
Comprehensive Income
For the six and three-month period ended
June 30, 2017 and 2016
(Expressed in thousands of Brazilian
Reais)
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
Net income
|
4,414,664
|
5,066,514
|
|
2,124,833
|
2,172,521
|
|
|
|
|
|
|
Items that will not be reclassified to
profit or loss:
|
|
|
|
|
|
Full recognition of actuarial
gains/(losses)
|
159,769
|
1,152
|
|
642
|
579
|
|
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
|
Exchange differences on translation of
foreign operations (gains/(losses)
|
|
|
|
|
|
Investment hedge in foreign
operations
|
-
|
(23,331)
|
|
-
|
(46,619)
|
Investment hedge - put option granted
on subsidiary
|
8,055
|
712,346
|
|
(120,737)
|
352,457
|
Gains/losses on translation of other
foreign operations
|
752,054
|
(4,624,929)
|
|
1,363,653
|
(2,674,730)
|
Gains/losses on translation of foreign
operations
|
760,109
|
(3,935,914)
|
|
1,242,916
|
(2,368,892)
|
|
|
|
|
|
|
Cash flow hedge -
gains/(losses)
|
|
|
|
|
|
Recognized in Equity (Hedge
reserve)
|
(6,255)
|
(681,582)
|
|
89,859
|
(308,191)
|
Removed from Equity (Hedge reserve) and
included in profit or loss
|
306,049
|
(518,640)
|
|
102,708
|
(243,725)
|
Total cash flow hedge
|
299,794
|
(1,200,222)
|
|
192,567
|
(551,916)
|
|
|
|
|
|
|
Other comprehensive
(loss)/income
|
1,219,672
|
(5,134,984)
|
|
1,436,125
|
(2,920,229)
|
|
|
|
|
|
|
Total comprehensive
income
|
5,634,336
|
(68,470)
|
|
3,560,958
|
(747,708)
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of Ambev
|
5,406,084
|
125,178
|
|
3,381,366
|
(621,253)
|
Non-controlling interest
|
228,252
|
(193,648)
|
|
179,592
|
(126,455)
|
The accompanying notes are an integral
part of these interim consolidated financial statements. The consolidated
statements of comprehensive income are presented net of income tax. The income
tax effects of these items are disclosed in note 8 -
Deferred income tax and social
contribution.
4
Interim Consolidated Statements of Changes in
Equity
For the six-month period ended June 30, 2017 and
2016
(Expressed in thousands of Brazilian Reais)
|
Attributable to equity holders of Ambev
|
|
|
|
|
Capital
|
Capital
reserves
|
Net income reserves
|
Retained
earnings
|
Carrying value
adjustments
|
Total
|
|
Non-controlling interests
|
Total equity
|
At January 1, 2017
|
57,614,140
|
54,529,780
|
9,700,248
|
-
|
(77,019,120)
|
44,825,048
|
|
1,826,225
|
46,651,273
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
-
|
-
|
-
|
4,212,283
|
-
|
4,212,283
|
|
202,381
|
4,414,664
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on translation of foreign
operations
|
-
|
-
|
-
|
-
|
732,889
|
732,889
|
|
27,220
|
760,109
|
Cash flow hedges
|
-
|
-
|
-
|
-
|
301,096
|
301,096
|
|
(1,302)
|
299,794
|
Actuarial gain/(losses)
|
-
|
-
|
-
|
-
|
159,816
|
159,816
|
|
(47)
|
159,769
|
Total comprehensive income
|
-
|
-
|
-
|
4,212,283
|
1,193,801
|
5,406,084
|
|
228,252
|
5,634,336
|
Gains/(losses) of controlling interest´s
share
|
-
|
-
|
-
|
-
|
(3,081)
|
(3,081)
|
|
31,613
|
28,532
|
Dividends distributed
|
-
|
-
|
-
|
(2,513,077)
|
-
|
(2,513,077)
|
|
(123,247)
|
(2,636,324)
|
Acquired shares and result on treasury
shares
|
-
|
18,413
|
-
|
-
|
-
|
18,413
|
|
-
|
18,413
|
Share-based payment
|
-
|
35,683
|
-
|
-
|
-
|
35,683
|
|
-
|
35,683
|
Prescribed dividends
|
-
|
-
|
-
|
149
|
-
|
149
|
|
-
|
149
|
At June 30, 2017
|
57,614,140
|
54,583,876
|
9,700,248
|
1,699,355
|
(75,828,400)
|
47,769,219
|
|
1,962,843
|
49,732,062
|
The accompanying notes are an integral part of these
interim consolidated financial statements.
5
Interim Consolidated Statements of Changes in Equity
(continued)
For the six-month period ended June 30,
2017 and 2016
(Expressed in thousands of Brazilian Reais)
|
Attributable to equity holders of
Ambev
|
|
|
|
|
Capital
|
Capital
reserves
|
Net
income reserves
|
Retained
earnings
|
Carrying value adjustments
|
Total
|
|
Non-controlling interests
|
Total equity
|
At January 1, 2016
|
57,614,140
|
54,373,451
|
8,201,323
|
-
|
(71,857,031)
|
48,331,883
|
|
2,001,750
|
50,333,633
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
-
|
-
|
-
|
4,813,019
|
-
|
4,813,019
|
|
253,495
|
5,066,514
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
|
Losses on translation of foreign
operations
|
-
|
-
|
-
|
-
|
(3,486,740)
|
(3,486,740)
|
|
(449,174)
|
(3,935,914)
|
Cash flow hedges
|
-
|
-
|
-
|
-
|
(1,202,253)
|
(1,202,253)
|
|
2,031
|
(1,200,222)
|
Actuarial gains
|
-
|
-
|
-
|
-
|
1,152
|
1,152
|
|
-
|
1,152
|
Total Comprehensive income
|
-
|
-
|
-
|
4,813,019
|
(4,687,841)
|
125,178
|
|
(193,648)
|
(68,470)
|
Put option
granted on
subsidiary
|
-
|
-
|
-
|
-
|
(144,079)
|
(144,079)
|
|
-
|
(144,079)
|
Gains/(losses) of controlling
interest´s share
|
-
|
-
|
-
|
-
|
(9,175)
|
(9,175)
|
|
53,674
|
44,499
|
Dividends distributed
|
-
|
-
|
-
|
(2,040,800)
|
-
|
(2,040,800)
|
|
(100,164)
|
(2,140,964)
|
Interest on shareholders’
equity
|
-
|
-
|
(2,039,171)
|
-
|
-
|
(2,039,171)
|
|
-
|
(2,039,171)
|
Acquired shares and result on
treasury shares
|
-
|
88,335
|
-
|
-
|
-
|
88,335
|
|
-
|
88,335
|
Share-based payment
|
-
|
(11,850)
|
-
|
-
|
-
|
(11,850)
|
|
-
|
(11,850)
|
Prescribed dividends
|
-
|
-
|
-
|
686
|
-
|
686
|
|
-
|
686
|
At June 30, 2016
|
57,614,140
|
54,449,936
|
6,162,152
|
2,772,905
|
(76,698,126)
|
44,301,007
|
|
1,761,612
|
46,062,619
|
The accompanying notes are an integral part of these
interim consolidated financial statements.
6
Interim Consolidated Cash Flow
Statements
For the six and three-month period ended
June 30, 2017 and 2016
(Expressed in thousands of Brazilian
Reais)
|
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
Note
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
|
Net income
|
|
4,414,664
|
5,066,514
|
|
2,124,833
|
2,172,521
|
Depreciation, amortization and
impairment
|
|
1,699,965
|
1,747,666
|
|
872,395
|
883,831
|
Impairment losses on receivables
and inventories
|
|
70,810
|
71,908
|
|
42,579
|
47,724
|
Additions/(reversals) in
provisions and employee benefits
|
|
73,294
|
150,166
|
|
24,180
|
59,325
|
Net finance cost
|
18
|
1,571,417
|
2,071,188
|
|
698,822
|
899,883
|
Losses/(gain) on sale of property,
plant and equipment and intangible assets
|
|
(2,689)
|
(28,170)
|
|
(8,065)
|
(25,256)
|
Equity-settled share-based payment
expense
|
20
|
86,382
|
85,549
|
|
41,432
|
47,591
|
Income tax expense
|
19
|
558,972
|
562,966
|
|
220,459
|
226,583
|
Share of result of
associates
|
|
(6,301)
|
(7,837)
|
|
(5,269)
|
(388)
|
Other non-cash items included in
the profit
|
|
187,116
|
(709,625)
|
|
63,643
|
(245,054)
|
Cash flow from operating
activities before changes in working capital and use of
provisions
|
|
8,653,630
|
9,010,325
|
|
4,075,009
|
4,066,760
|
|
|
|
|
|
|
|
(Increase)/decrease in trade and
other receivables
|
|
1,060,883
|
638,122
|
|
(377,432)
|
(383,433)
|
(Increase)/decrease in
inventories
|
|
(285,716)
|
(410,975)
|
|
(85,769)
|
272,567
|
Increase/(decrease) in trade and
other payables
|
|
(3,902,680)
|
(4,506,477)
|
|
(1,194,736)
|
(1,483,097)
|
Cash generated from
operations
|
|
5,526,117
|
4,730,995
|
|
2,417,072
|
2,472,797
|
|
|
|
|
|
|
|
Interest paid
|
|
(250,939)
|
(464,309)
|
|
(95,787)
|
(318,534)
|
Interest received
|
|
136,042
|
407,902
|
|
80,748
|
363,253
|
Dividends received
|
|
3,959
|
25,101
|
|
54
|
5,277
|
Income tax paid
|
|
(1,006,049)
|
(4,832,630)
|
|
22,547
|
(440,916)
|
Cash flow from operating
activities
|
|
4,409,130
|
(132,941)
|
|
2,424,634
|
2,081,877
|
|
|
|
|
|
|
|
Proceeds from sale of property,
plant and equipment and intangible assets
|
|
25,803
|
48,780
|
|
15,270
|
33,201
|
Acquisition of property, plant and
equipment and intangible assets
|
|
(1,310,539)
|
(1,858,539)
|
|
(751,040)
|
(1,151,255)
|
Acquisition of subsidiaries, net
of cash acquired
|
|
(331,441)
|
(1,832,871)
|
|
1,289
|
(137,743)
|
Investment in short term debt
securities and net proceeds/(acquisition) of debt securities
|
|
291,156
|
(39,490)
|
|
18,601
|
(61,451)
|
Net proceeds/(acquisition) of
other assets
|
|
1,558
|
104
|
|
-
|
17
|
Cash flow from investing
activities
|
|
(1,323,463)
|
(3,682,016)
|
|
(715,880)
|
(1,317,231)
|
|
|
|
|
|
|
|
Proceeds/(repurchase) of treasury
shares
|
|
(32,768)
|
(4,541)
|
|
15,607
|
(5,005)
|
Proceeds from borrowings
|
|
2,594,314
|
903,223
|
|
1,356,139
|
130,107
|
Repayment of borrowings
|
|
(2,943,061)
|
(535,530)
|
|
(1,460,251)
|
(308,008)
|
Cash net of finance costs other than
interests
|
|
(718,059)
|
(1,936,963)
|
|
(288,198)
|
(794,192)
|
Payment of finance lease
liabilities
|
|
(4,491)
|
(1,557)
|
|
(2,223)
|
(750)
|
Dividends and Interest on shareholders’
equity paid
|
|
(1,214,998)
|
(2,186,030)
|
|
(82,979)
|
(86,381)
|
Cash flow from financing
activities
|
|
(2,319,063)
|
(3,761,398)
|
|
(461,905)
|
(1,064,229)
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash
and cash equivalents
|
|
766,604
|
(7,576,355)
|
|
1,246,849
|
(299,583)
|
Cash and cash equivalents less bank
overdrafts at beginning of year
(i)
|
|
7,876,849
|
13,617,622
|
|
7,229,143
|
6,007,322
|
Effect of exchange rate
fluctuations
|
|
86,828
|
(488,974)
|
|
254,289
|
(155,446)
|
Cash and cash equivalents less bank
overdrafts at end of year
(i)
|
|
8,730,281
|
5,552,293
|
|
8,730,281
|
5,552,293
|
(i) Net of bank overdrafts.
The accompanying notes are an integral
part of these interim
consolidated financial statements
.
7
Notes to the interim consolidated
financial statements:
1.
|
Corporate
information
|
2.
|
Statement of
compliance
|
3.
|
Summary of significant accounting
policies
|
4.
|
Use of estimates and
judgments
|
5.
|
Cash and cash
equivalents
|
6.
|
Investment securities
|
7.
|
Inventories
|
8.
|
Deferred income tax and social
contribution
|
9.
|
Property, plant and
equipment
|
10.
|
Goodwill
|
11.
|
Interest-bearing loans and
borrowings
|
12.
|
Provisions
|
13.
|
Changes in
equity
|
14.
|
Segment
reporting
|
15.
|
Net Sales
|
16.
|
Other operating
income/(expenses)
|
17.
|
Exceptional
items
|
18.
|
Finance cost and
income
|
19.
|
Income tax and social contribution
|
20.
|
Share-based
payments
|
21.
|
Financial instruments and
risks
|
22.
|
Collateral and contractual
commitments, advances from customers and other
|
23.
|
Contingencies
|
24.
|
Non-cash
items
|
25.
|
Related
parties
|
26.
|
Events after the reporting
period
|
8
1.
CORPORATE
INFORMATION
(a)
Description of
business
Ambev S.A. (
referred to as the “Company” or
“Ambev”),
headquartered in São Paulo, Brazil, produces and sells
beer, draft beer, soft drinks, other non-alcoholic beverages, malt and food in
general.
The Company’s shares and ADR’s (American Depositary
Receipts) are listed on the
B3 S.A.- Brasil, Bolsa, Balcão
as “ABEV3” and on the New York Stock Exchange (NYSE) as
“ABEV”.
The Company’s direct controlling shareholders are
Interbrew International B.V. (“IIBV”), AmBrew S.A. (“Ambrew”), both subsidiaries
of Anheuser-Busch InBev N.V. (“AB InBev”) and Fundação Antonio e Helena
Zerrenner Instituição Nacional de Beneficência (“Fundação
Zerrenner”).
The interim financial statements
were approved by the Board of Directors on July 26,
2017.
(b)
Major corporate
events in 2016 and 2017:
On May 16th, 2017, the Board of Directors of Ambev
approved the execution, by and between the Company, or its controlled entities,
and financial institutions to be approved by the Board of Officers, of equity
swaps, having as underlying asset the shares issued by the Company or American
Depositary Receipts representing these shares (“ADRs”). The settlement of the
equity swap will take place within a maximum period of 18 months from this date,
and the agreements may result in an exposure of up to 80 million common shares
(of which all or part may be through ADRs), with a limit value of up to R$ 1.5
billion.
In December 2016, we acquired Cachoeira de Macacu Bebidas
Ltda. from Brasil Kirin Indústria de Bebidas Ltda., a company that owns an
operating industrial plant for the production and packaging of beer and
non-alcohol beverages in the State of Rio de Janeiro for R$478,621.
On May 12, 2016, Ambev and its controlling shareholder,
AB InBev, entered into an agreement for the exchange of shareholdings (“Swap”).
The execution of the Swap was conditional on the implementation of the merger of
the activities of AB InBev and SABMiller Plc (“SABMiller”), which occurred on
October 10, 2016. Subsequently, on December 31, 2016, after the implementation
of certain preparatory corporate acts, the Swap was effected. Based on the
agreement described above, Ambev transferred to AB InBev the equity interest in
Keystone Global Corporation - KGC, which held shares in companies domiciled in
Colombia, Peru and Ecuador. On the other hand, AB InBev transferred to Ambev its
interest in Cerveceria Nacional S. de R.L., a subsidiary domiciled in Panama,
which had previously been acquired as a third party.
The value attributed to the transaction is based on a
fairness opinion prepared by a specialized company and duly approved by the
Board of Directors of Ambev, with abstention from the vote of the directors
appointed by AB InBev.
9
The result of the transaction above mentioned was
R$1,236,824, of which R$1,239,972 was recognized in the income statement on
exceptional items.
On April, 2016, the Company, through
its wholly-owned subsidiary Labatt Breweries, in Canada, acquired the
company Archibald Microbrasserie, known for its local beers and seasonal
specialties. Furthermore, in Brazil, acquired 66% of the company Sucos do Bem,
which has a range of juices, teas and cereal bars. The acquisition amount added
was approximately R$155 million.
On January, 2016, Ambev, through its wholly-owned
subsidiaries, CRBS S.A. and Ambev Luxembourg, acquired companies to a range of
primarily spirit-based beers and ciders from Mark Anthony Group, by R$1.4
billion.
2.
STATEMENT OF
COMPLIANCE
The consolidated financial statements have been prepared
using the accounting basis of going concern and are being presented in
accordance with IAS 34 - Interim Financial Reporting as issued by the
International Accounting Standards Board (“IASB”).
The information does not meet all disclosure requirements
for the presentation of full annual financial statements and thus should be read
in conjunction with the consolidated financial statements prepared in accordance
with International Financial Reporting Standards (“IFRS”) for the year ended
December 31, 2016. To avoid duplication of disclosures which are included in the
annual financial statements, the following notes were not subject to full
filling:
(a)
Summary of significant accounting
policies (Note 3);
(b)
Exceptional
items (Note 8);
(c)
Payroll and related benefits (Note 9);
(d)
Additional
information on operating expenses by nature (Note 10);
(e)
Intangible assets (Note
15);
(f)
Trade receivable (Note
19);
(g)
Changes in
equity (Note 21);
(h)
Interest-bearing
loans and borrowings (Note 22);
(i)
Employee benefits (Note
23);
(j)
Trade payables (Note
25);
(k)
Operating leases
(Note 28);
(l)
Contingencies (Note
30);
(m)
Group Companies
(Note 34);
(n)
Insurance (Note
35)
Management declares that all relevant information
specific to the financial statements, and only them, are being evidenced and
correspond to those used by Management in its business
management.
10
3.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
There were no significant changes in accounting policies
and calculation methods used for the interim financial statements as of June 30,
2017 in relation to those presented in the financial statements for the year
ended December 31, 2016.
(a)
Basis of
preparation and measurement
The
interim
financial statements are presented in
thousands
of Brazilian Real (“R$”),
unless
otherwise indicated, rounded to the nearest
thousand
indicated
. Depending on the applicable IFRS
requirement, the measurement basis used in preparing the interim financial
statements is historical cost, net realizable value, fair value or recoverable
amount.
(b)
Recently issued
IFRS
The reporting standards below were published and are
mandatory
for future annual
reporting
periods
. There were no early adoption of standards and
amendments to standards however the Company is in the evaluation phase of the
revised standards and does not expect significant impacts.
IFRS 9 Financial Instruments
The IFRS 9, which will replace IAS 39, introduces a
logical approach for the classification of financial assets, which is driven by
cash flow characteristics and the business model in which an asset is held;
defines a new expected-loss impairment model that will require more effective
recognition; and introduces a substantially-reformed model for hedge accounting,
with enhanced disclosures about risk management activity. The new hedge
accounting model represents a significant overhaul that aligns the accounting
treatment with risk management activities. IFRS 9 also reduces the volatility in
profit or loss that was caused by changes in the credit risk of liabilities
elected to be measured at fair value. IASB issued IFRS 9, which will be
effective for annual periods beginning on or after January 1st, 2018. The early
adoption is not permitted by the Brazilian Accounting Pronouncements
Committee.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 requires revenue recognition to depict the
transfer of goods or services to customers in amounts that reflect the
consideration (that is, payment) to which the Company expects to be entitled in
exchange for those goods or services. The new standard will also result in
enhanced disclosures about revenue, provide guidance for transactions that were
not previously addressed comprehensively and improve guidance for
multiple-element arrangements. IASB issued IFRS 15, which will be effective for
annual periods beginning on or after January 1st, 2018. The early adoption is
not permitted by the Brazilian Accounting Pronouncements
Committee.
11
IFRS 16 – Leases
The IFRS 16, which supersedes IAS 17, replaces the existing lease accounting requirements and represents a significant change in the accounting introducing the standardization of accounting recognition for the lessee and will require the recognition of the right to use and a lease liability. IASB issued IFRS 16, which will be effective for annual periods beginning on or after January 1st, 2019, with earlier adoption.
4.
USE OF ESTIMATES AND JUDGMENTS
The preparation of interim financial statements in conformity with IFRS requires Management to make 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 associated assumptions are based on past experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for decision making regarding the judgments about carrying amounts of assets and liabilities that are not readily evident from other sources. Actual results may differ from these estimates.
The estimates and assumptions are reviewed on a regular basis. Changes in accounting estimates may affect the period in which they are realized, or future periods.
Although each of its significant accounting policies reflects judgments, assessments or estimates, the Company believes that the following accounting practices reflect the most critical judgments, estimates and assumptions that are important to its business operations and the understanding of its results:
(i) predecessor basis of accounting;
(ii) business combinations;
(iii) impairment;
(iv) provisions;
(v) share-based payments;
(vi) employee benefits;
(vii) current and deferred tax;
(viii) joint arrangements; e
(ix) measurement of financial instruments, including derivatives.
The fair values of acquired identifiable intangibles are based on an assessment of future cash flows. Impairment analyses of goodwill and indefinite-lived intangible assets are performed at least annually and whenever a triggering event occurs, in order to determine whether the carrying value exceeds the recoverable amount.
The company uses its judgment to select a variety of methods including the discounted cash flow method and option valuation models and makes assumptions about the fair value of financial instruments that are mainly based on market conditions existing at each balance sheet date.
12
Actuarial assumptions are established to anticipate
future events and are used in calculating pension and other long-term employee
benefit expense and liability. These factors include assumptions with respect to
interest rates, rates of increase in health care costs, rates of future
compensation increases, turnover rates, and life expectancy.
The company is subject to income tax in numerous
jurisdictions. Significant judgment is required in determining the worldwide
provision for income tax. There are some transactions and calculations for which
the ultimate tax determination is uncertain. Some subsidiaries within the
Company are involved in tax audits usually in relation to prior years. These
audits are ongoing in various jurisdictions at the balance sheet date and, by
their nature, these can take considerable time until its conclusion.
5.
CASH AND CASH
EQUIVALENTS
|
06/30/2017
|
12/31/2016
|
|
|
|
Cash
|
104,011
|
381,928
|
Current bank accounts
|
3,020,992
|
3,467,339
|
Short term bank deposits
(i)
|
5,632,339
|
4,027,582
|
Cash and cash equivalents
|
8,757,342
|
7,876,849
|
|
|
|
Bank overdrafts
|
(27,061)
|
-
|
Cash and cash equivalents less bank
overdraft
|
8,730,281
|
7,876,849
|
(i) The balance refers mostly to Bank
Deposit Certificates - CDB, high liquidity, which are readily convertible into
known amounts of cash and which are subject to an insignificant risk of change
in value.
6.
INVESTMENTS
SECURITIES
|
06/30/2017
|
12/31/2016
|
|
|
|
Financial asset at fair value through profit or
loss-held for trading
|
8,770
|
282,771
|
Current investments securities
|
8,770
|
282,771
|
|
|
|
Debt held-to-maturity
|
94,475
|
104,340
|
Non-current investments
securities
|
94,475
|
104,340
|
|
|
|
Total
|
103,245
|
387,111
|
7.
INVENTORIES
|
06/30/2017
|
12/31/2016
|
|
|
|
Finished goods
|
1,843,492
|
1,445,462
|
Work in progress
|
357,232
|
328,453
|
Raw material
|
1,821,803
|
1,962,731
|
Consumables
|
72,935
|
50,026
|
Spare parts and other
|
461,767
|
447,167
|
Prepayments
|
218,094
|
234,473
|
Impairment losses
|
(111,372)
|
(121,260)
|
|
4,663,951
|
4,347,052
|
13
Write-offs/losses on inventories
recognized in the income statement amounted to
R$27,773 in the period ended in June 30,
2017 (R$
31,730 in the period ended in June 30,
2016).
8.
DEFERRED INCOME
TAX AND SOCIAL CONTRIBUTION
Deferred taxes for income tax and social contribution
taxes are calculated on tax losses, the negative tax basis of social
contributions and the temporary differences between the tax bases and the
carrying amount in the interim financial statement of assets and liabilities.
The rates of these taxes in Brazil, currently set for the determination of
deferred taxes, are 25% for income tax and 9% for social contribution. For the
other regions, with operational activity, applied rates, are as
follow:
Central America and the Caribbean
|
from 23% to 31%
|
Latin America
|
from 14% to 35%
|
Canada
|
26%
|
Deferred tax assets are recognized to
the extent that it is probable that future taxable profit will be available to
be used to offset temporary differences / loss carry forwards based on
projections of future results prepared and based on internal assumptions and
future economic scenarios which may therefore change.
The amount of deferred income tax and
social contribution by type of temporary difference is detailed as
follows:
|
06/30/2017
|
|
12/31/2016
|
|
Assets
|
Liabilities
|
Net
|
|
Assets
|
Liabilities
|
Net
|
Investment securities
|
9,538
|
-
|
9,538
|
|
9,030
|
-
|
9,030
|
Intangible assets
|
-
|
(728,189)
|
(728,189)
|
|
649
|
(733,894)
|
(733,245)
|
Employee benefits
|
499,376
|
-
|
499,376
|
|
467,582
|
-
|
467,582
|
Trade payables - exchange
rate
|
1,460,675
|
(411,107)
|
1,049,568
|
|
977,442
|
(531,285)
|
446,157
|
Trade receivable
|
45,175
|
-
|
45,175
|
|
42,724
|
-
|
42,724
|
Derivatives
|
87,399
|
(13,969)
|
73,430
|
|
71,134
|
(110,735)
|
(39,601)
|
Interest-bearing loans and
borrowings
|
-
|
-
|
-
|
|
-
|
(1,372)
|
(1,372)
|
Inventories
|
176,120
|
(30,376)
|
145,744
|
|
267,430
|
(13,778)
|
253,652
|
Property, plant and
equipment
|
-
|
(839,122)
|
(839,122)
|
|
-
|
(905,676)
|
(905,676)
|
Withholding tax over undistributed
profits
|
-
|
(710,221)
|
(710,221)
|
|
-
|
(684,774)
|
(684,774)
|
Investments in
associates
|
-
|
(421,590)
|
(421,590)
|
|
-
|
(421,590)
|
(421,590)
|
Interest on shareholders’
equity
|
653,383
|
-
|
653,383
|
|
-
|
-
|
-
|
Loss carryforwards
|
987,266
|
-
|
987,266
|
|
1,139,818
|
-
|
1,139,818
|
Provisions
|
404,495
|
(40,185)
|
364,310
|
|
448,879
|
(44,738)
|
404,141
|
Complement of income tax of foreign
subsidiaries due in Brazil
|
-
|
(15,017)
|
(15,017)
|
|
-
|
-
|
-
|
Other items
|
-
|
(131,416)
|
(131,416)
|
|
(15,132)
|
(23,294)
|
(38,426)
|
Gross deferred tax assets /
(liabilities)
|
4,323,427
|
(3,341,192)
|
982,235
|
|
3,409,556
|
(3,471,136)
|
(61,580)
|
Netting by taxable entity
|
(1,076,730)
|
1,076,730
|
-
|
|
(1,141,414)
|
1,141,414
|
-
|
Net deferred tax assets /
(liabilities)
|
3,246,697
|
(2,264,462)
|
982,235
|
|
2,268,142
|
(2,329,722)
|
(61,580)
|
The Company only offsets the balances of
deferred income tax and social contribution assets against liabilities when they
are within the same entity and are expected to be realized in the same
period.
14
Tax losses and negative bases of social contribution and
temporary deductible differences in Brazil, on which the deferred income tax and
social contribution were calculated, have no expiry date.
At June 30, 2017 the assets and liabilities deferred
taxes related to combined tax losses has an expected utilization/settlement by
temporary differences as follows:
|
06/30/2017
|
Deferred taxes not related to tax
losses
|
to be realized until 12
months
|
to be realized after 12
months
|
Total
|
|
|
|
|
Investment securities
|
-
|
9,538
|
9,538
|
Intangible assets
|
-
|
(728,189)
|
(728,189)
|
Employee benefits
|
38,632
|
460,744
|
499,376
|
Trade payables - exchange
rate
|
1,460,675
|
(411,107)
|
1,049,568
|
Trade receivable
|
41,939
|
3,236
|
45,175
|
Derivatives
|
73,430
|
-
|
73,430
|
Inventories
|
145,744
|
-
|
145,744
|
Property, plant and
equipment
|
(69,078)
|
(770,044)
|
(839,122)
|
Withholding tax over undistributed
profits
|
-
|
(710,221)
|
(710,221)
|
Investments in
associates
|
-
|
(421,590)
|
(421,590)
|
Interest on shareholders’
equity
|
653,383
|
-
|
653,383
|
Complement of income tax of foreign
subsidiaries due in Brazil
|
(15,017)
|
-
|
(15,017)
|
Provisions
|
31,676
|
332,634
|
364,310
|
Other items
|
-
|
(131,416)
|
(131,416)
|
|
2,361,384
|
(2,366,415)
|
(5,031)
|
Deferred tax related to tax
losses
|
06/30/2017
|
2017
|
271,104
|
2018
|
249,985
|
2019
|
193,336
|
2020
|
35,089
|
Apart from 2021
(i)
|
237,752
|
|
987,266
|
(i) There is no expected realization that exceed the
period of 10 years.
As at June 30, 2017, deferred tax assets in the amount of
R$600,474 (R$455,616 in December 31, 2016) related to tax losses and temporary
differences of subsidiaries abroad were not recorded as the realization is not
probable.
Major part of the fiscal losses amount do not have
carryforward limit for utilization and the tax losses carried forward in
relation to them are equivalent to R$2,346,313 in June 30, 2017 (R$2,285,196 in
December 31, 2016).
The net change in deferred income tax
and social contribution is detailed as follows:
At December 31, 2016
|
(61,580)
|
Remeasurement of postemployment benefits
|
(22)
|
Investment hedge - put option of a subsidiary
interest
|
(4,149)
|
Cash flow hedge - gains/(losses)
|
(152,625)
|
Gains/(losses) on translation of other foreign
operations
|
221,790
|
Recognized in other comprehensive
income
|
64,994
|
Recognized in income statement
|
700,083
|
Changes directly in balance sheet
|
278,738
|
At June 30, 2017
|
982,235
|
15
9.
PROPERTY, PLANT
AND EQUIPMENT
|
06/30/2017
|
|
12/31/2016
|
|
Land and buildings
|
Plant and equipment
|
Fixtures and fittings
|
Under construction
|
Total
|
|
Total
|
Acquisition cost
|
|
|
|
|
|
|
|
Balance at end of previous
year
|
8,330,123
|
22,764,314
|
4,584,187
|
1,740,739
|
37,419,363
|
|
36,685,586
|
Effect of movements in foreign
exchange
|
31,769
|
151,836
|
29,405
|
8,637
|
221,647
|
|
(2,652,740)
|
Acquisitions through business
combinations
|
-
|
-
|
-
|
-
|
-
|
|
700,372
|
Acquisitions through stock
exchange
|
-
|
-
|
-
|
-
|
-
|
|
433,849
|
Disposals through stock
exchange
|
-
|
-
|
-
|
-
|
-
|
|
(571,349)
|
Acquisitions
|
2,111
|
278,493
|
72,287
|
873,188
|
1,226,079
|
|
4,009,345
|
Disposals
|
(4,081)
|
(198,432)
|
(42,270)
|
(41)
|
(244,824)
|
|
(1,012,663)
|
Transfer to other asset
categories
|
229,129
|
683,642
|
282,195
|
(1,366,680)
|
(171,714)
|
|
(173,037)
|
Others
|
79,725
|
(112,182)
|
-
|
-
|
(32,457)
|
|
-
|
Balance at end
|
8,668,776
|
23,567,671
|
4,925,804
|
1,255,843
|
38,418,094
|
|
37,419,363
|
|
|
|
|
|
|
|
|
Depreciation and
Impairment
|
|
|
|
|
|
|
|
Balance at end of previous
year
|
(2,278,115)
|
(13,075,250)
|
(2,912,162)
|
-
|
(18,265,527)
|
|
(17,545,499)
|
Foreign exchange effects
|
(11,293)
|
(119,612)
|
(24,348)
|
-
|
(155,253)
|
|
1,137,065
|
Disposals through stock
exchange
|
-
|
-
|
-
|
-
|
-
|
|
345,919
|
Depreciation
|
(145,681)
|
(1,067,837)
|
(330,047)
|
-
|
(1,543,565)
|
|
(3,083,821)
|
Impairment losses
|
-
|
(49,993)
|
-
|
-
|
(49,993)
|
|
(120,905)
|
Disposals
|
664
|
185,601
|
35,382
|
-
|
221,647
|
|
928,903
|
Transfer to other asset
categories
|
(2,531)
|
7,672
|
3,106
|
-
|
8,247
|
|
61,451
|
Others
|
-
|
4,423
|
-
|
-
|
4,423
|
|
11,360
|
Balance at end
|
(2,436,956)
|
(14,114,996)
|
(3,228,069)
|
-
|
(19,780,021)
|
|
(18,265,527)
|
Carrying amount:
|
|
|
|
|
|
|
|
December 31, 2016
|
6,052,008
|
9,689,064
|
1,672,025
|
1,740,739
|
19,153,836
|
|
19,153,836
|
June 30, 2017
|
6,231,820
|
9,452,675
|
1,697,735
|
1,255,843
|
18,638,073
|
|
|
Leases, capitalizes interests and fixed assets provided
as security are not material.
10.
GOODWILL
|
06/30/2017
|
12/31/2016
|
|
|
|
Balance at end of previous year
|
30,511,200
|
30,953,066
|
Effect of movements in foreign
exchange
|
389,468
|
(2,388,878)
|
Acquisitions and disposals through business
combinations
(i)
|
-
|
1,947,012
|
Others
(ii)
|
195,663
|
-
|
Balance at the end of year
|
31,096,331
|
30,511,200
|
(i) It refers mainly to the acquisition of Mark
Anthony and Cerveceria Nacional in the transaction of stock
exchanges.
(ii) It refers to the change in provisional allocations
of assets acquired and liabilities assumed in the 2016 acquisitions.
16
The carrying amount of goodwill was
allocated to the different cash-generating units as follows
:
|
Functional
currency
|
06/30/2017
|
12/31/2016
|
LAN:
|
|
|
|
Brazil
|
BRL
|
17,468,813
|
17,424,616
|
Goodwill
|
|
102,711,446
|
102,667,249
|
Non-controlling transactions
(i)
|
|
(85,242,633)
|
(85,242,633)
|
Dominican Republic
|
DOP
|
3,216,922
|
3,224,896
|
Cuba
(ii)
|
USD
|
3,123
|
3,634
|
Panama
|
PAB
|
1,143,298
|
1,060,063
|
|
|
|
|
LAS:
|
|
|
|
Argentina
|
ARS
|
502,027
|
517,934
|
Bolivia
|
BOB
|
1,170,181
|
1,152,815
|
Chile
|
CLP
|
43,605
|
42,722
|
Paraguay
|
PYG
|
793,532
|
753,724
|
Uruguay
|
UYU
|
172,587
|
165,767
|
|
|
|
|
NA:
|
|
|
|
Canada
|
CAD
|
6,582,243
|
6,165,029
|
|
|
31,096,331
|
30,511,200
|
(i) It refers to the stock exchange operation occurred in
2013 in result of the adoption of the predecessor basis of
accounting.
(ii) The functional currency of Cuba, the Cuban
convertible peso (CUC), has fixed parity with the dollar (USD) at balance sheet
date.
11.
INTEREST-BEARING LOANS AND
BORROWINGS
|
06/30/2017
|
12/31/2016
|
|
|
|
Secured bank loans
|
2,747,882
|
1,381,412
|
Unsecured bank loans
|
495,910
|
1,910,139
|
Debentures and unsecured bond issues
|
299,998
|
296,352
|
Other unsecured loans
|
39,026
|
33,479
|
Financial leasing
|
8,024
|
9,222
|
Current liabilities
|
3,590,840
|
3,630,604
|
|
|
|
Secured bank loans
|
581,278
|
665,786
|
Unsecured bank loans
|
511,712
|
609,848
|
Debentures and unsecured bond issues
|
101,771
|
100,803
|
Other unsecured loans
|
101,877
|
356,236
|
Financial leasing
|
30,158
|
33,033
|
Non-current liabilities
|
1,326,796
|
1,765,706
|
Ambev,
through its subsidiary
in Canadá, renegotiated
one of its
loans
of
R$669,904,
maturing on September, 2017
.
Additional information regarding the exposure of the
Company to the risks of interest rate and foreign currency are disclosed on Note
21 –
Financial instruments and
risks
.
17
Contract clauses (covenants)
In the period ended June 30, 2017, the Company's loans had equal rights to payment without subordination clauses. Except for the credit lines due to FINAME contracted by the Company with Banco Nacional de Desenvolvimento Econômico e Social – BNDES (“BNDES”), where collateral is provided on assets acquired with the credit granted, the other loans and financing contracted by the Company provide for personal guarantees, or are unsecured. Most of the financial contracts provide for restrictive clauses (covenants), such as: financial covenants, including restrictions on new indebtedness; proof of company’s existence; maintenance, in use or in good conditions for the business, of the Company’s assets; restrictions on acquisitions, mergers, sale or disposal of its assets; disclosure of financial statements and balance sheets; and (prohibition related to new real guarantees for loans contracted, except if (i) expressly authorized under the loan agreement in question; or (ii) new loans contracted with financial institutions linked to the Brazilian government – including the BNDES – or foreign governments, whether multilateral financial institutions (e.g., World Bank) or located in jurisdictions in which the Company operates.
On June 30, 2017, the Company was in compliance with all of its contractual obligations relating to its loans and financings.
12.
PROVISIONS
(a) Provision changes
|
Balance as of
December 31, 2016
|
Effect of changes in
foreign exchange rates
|
Additions
|
Provisions used
and reversed
|
Balance as of
June 30, 2017
|
|
|
|
|
|
|
Restructuring
|
7,451
|
409
|
-
|
(21)
|
7,839
|
|
|
|
|
|
|
Provision for contingencies
|
|
|
|
|
|
Taxes on sales
|
247,185
|
(8)
|
30,360
|
(27,861)
|
249,676
|
Income tax
|
323,458
|
2,918
|
135,203
|
(274)
|
461,305
|
Labor
|
165,701
|
(198)
|
68,940
|
(77,635)
|
156,808
|
Civil
|
43,961
|
70
|
19,872
|
(34,740)
|
29,163
|
Others
|
146,250
|
(1,253)
|
28,094
|
(19,669)
|
153,422
|
Total of provision for contingencies
|
926,555
|
1,529
|
282,469
|
(160,179)
|
1,050,374
|
|
|
|
|
|
|
Total of provisions
|
934,006
|
1,938
|
282,469
|
(160,200)
|
1,058,213
|
18
(b)
Disbursement
expectative
|
Balance as of
June 30,
2017
|
1 year or less
|
1-2 years
|
2-5 years
|
Over 5 years
|
|
|
|
|
|
|
Restructuring
|
7,839
|
7,055
|
-
|
784
|
-
|
|
|
|
|
|
|
Provision for
contingencies
|
|
|
|
|
|
Taxes on sales
|
249,676
|
25,716
|
200,842
|
5,596
|
17,522
|
Income tax
|
461,305
|
33,598
|
349,044
|
78,663
|
-
|
Labor
|
156,808
|
77,257
|
41,214
|
30,007
|
8,330
|
Civil
|
29,163
|
17,112
|
9,516
|
1,540
|
995
|
Others
|
153,422
|
7,987
|
37,655
|
104,319
|
3,461
|
Total of provision for
contingencies
|
1,050,374
|
161,670
|
638,271
|
220,125
|
30,308
|
|
|
|
|
|
|
Total of
provisions
|
1,058,213
|
168,725
|
638,271
|
220,909
|
30,308
|
|
Balance as of
December 31,
2016
|
1 year or less
|
1-2 years
|
2-5 years
|
Over 5 years
|
|
|
|
|
|
|
Restructuring
|
7,451
|
6,705
|
746
|
-
|
-
|
|
|
|
|
|
|
Provision for
contingencies
|
|
|
|
|
|
Taxes on sales
|
247,185
|
25,716
|
198,608
|
5,534
|
17,327
|
Income tax
|
323,458
|
33,592
|
236,556
|
53,310
|
-
|
Labor
|
165,701
|
77,357
|
45,770
|
33,324
|
9,250
|
Civil
|
43,961
|
17,325
|
21,033
|
3,403
|
2,200
|
Others
|
146,250
|
7,941
|
35,809
|
99,208
|
3,292
|
Total of provision for
contingencies
|
926,555
|
161,931
|
537,776
|
194,779
|
32,069
|
|
|
|
|
|
|
Total of
provisions
|
934,006
|
168,636
|
538,522
|
194,779
|
32,069
|
The expected settlement of provisions was based on
management’s best estimate at the balance sheet date.
Main lawsuits with probable likelihood of
loss:
(a) Income and Sales taxes
In Brazil, the Company and its
subsidiaries are involved in several administrative and judicial proceedings
related to Income tax, ICMS, IPI, PIS and COFINS taxes. Such proceedings
include, among others, tax offsets, credits and judicial injunctions exempting
tax payment.
(b) Labor
The Company and its subsidiaries are
involved in labor proceedings with former employees or former employees of
service providers. The main issues involve overtime and related effects and
respective charges.
19
(c) Civil
The Company is involved in civel
lawsuits considered with probable likelihood of loss. The most relevant portion
of these lawsuits refers to former distributors, mainly in Brazil, which are
mostly claiming damages resulting from the termination of their
contracts.
The processes with possible
probabilities are disclosed in Note 23
- Contingencies
.
13.
CHANGES IN EQUITY
(a) Capital stock
|
|
06/30/2017
|
|
|
06/30/2016
|
|
Thousands of
common
shares
|
Thousands
of Real
|
|
Thousands of
common
shares
|
Thousands
of
Real
|
Beginning balance as per statutory
books
|
15,717,615
|
57,614,140
|
|
15,717,615
|
57,614,140
|
Share issued
|
-
|
-
|
|
-
|
-
|
|
15,717,615
|
57,614,140
|
|
15,717,615
|
57,614,140
|
(b)
Capital reserves
|
Capital Reserves
|
|
|
Treasury shares
|
Share Premium
|
Others capital
reserves
|
Share-based Payments
|
Total
|
|
|
|
|
|
|
At January 1, 2017
|
(908,676)
|
53,662,811
|
700,898
|
1,074,747
|
54,529,780
|
Purchase of shares and result on treasury
shares
|
18,413
|
-
|
-
|
-
|
18,413
|
Share-based payments
|
-
|
-
|
-
|
35,683
|
35,683
|
At June 30, 2017
|
(890,263)
|
53,662,811
|
700,898
|
1,110,430
|
54,583,876
|
|
Capital Reserves
|
|
|
Treasury shares
|
Share Premium
|
Others capital
reserves
|
Share-based Payments
|
Total
|
|
|
|
|
|
|
At January 1, 2016
|
(1,003,508)
|
53,662,811
|
700,898
|
1,013,250
|
54,373,451
|
Purchase of shares and result on treasury
shares
|
88,335
|
-
|
-
|
-
|
88,335
|
Share-based payments
|
-
|
-
|
-
|
(11,850)
|
(11,850)
|
At June 30, 2016
|
(915,173)
|
53,662,811
|
700,898
|
1,001,400
|
54,449,936
|
(b.1) Treasury
shares
The treasury shares comprise own issued
shares reacquired by the Company and the result on treasury shares that refers
to gains and losses related to share-based payments transactions and
others.
20
Follows the changes of treasury shares:
|
Purchase /realization shares
|
|
Result on Treasure shares
|
|
Total Treasure shares
|
|
Thousands shares
|
|
Thousands
Brazilian Real
|
|
Thousands shares
|
|
Thousands
Brazilian Real
|
|
|
|
|
At January 1, 2017
|
16,512
|
|
(312,670)
|
|
(596,006)
|
|
(908,676)
|
Changes during the year
|
(6,073)
|
|
119,585
|
|
(101,172)
|
|
18,413
|
At June 30, 2017
|
10,439
|
|
(193,085)
|
|
(697,178)
|
|
(890,263)
|
|
Purchase /realization shares
|
|
Result on Treasure Shares
|
|
Total Treasure Shares
|
|
Thousands shares
|
|
Thousands
Brazilian Real
|
|
Thousands shares
|
|
Thousands
Brazilian Real
|
|
|
|
|
At January 1, 2016
|
32,521
|
|
(617,407)
|
|
(386,101)
|
|
(1,003,508)
|
Changes during the year
|
(13,395)
|
|
254,898
|
|
(166,563)
|
|
88,335
|
At June 30, 2016
|
19,126
|
|
(362,509)
|
|
(552,664)
|
|
(915,173)
|
(b.2) Share premium
The share premium refers to the difference between subscription price that the shareholders paid for the shares and theirs nominal value. Since this is a capital reserve, it can only be used to increase capital, offset losses, redemptions, reimbursement or repurchase shares.
(b.3) Share-based payment
There are different share-based payment programs and stock option plans which allow the senior management from Ambev economic group to receive or acquire shares of the Company.
The share-based payment reserve recorded a charge of
R$86,382 at June 30, 2017
(
R$85,549 at June 30, 2016
) (Note 20 –
Share-based payments
).
(c)
Net income reserves
|
Net income reserves
|
|
Investment reserve
|
Statutory reserve
|
Fiscal incentive
|
Interest on capital and
dividends proposed
|
Total
|
At January 1, 2017
|
3,859,995
|
4,456
|
5,835,797
|
-
|
9,700,248
|
|
|
|
|
|
|
At June 30, 2017
|
3,859,995
|
4,456
|
5,835,797
|
-
|
9,700,248
|
|
Net income reserves
|
|
Investment reserve
|
Statutory reserve
|
Fiscal incentive
|
Interest on capital and
dividends proposed
|
Total
|
|
|
|
|
|
|
At January 1, 2016
|
2,141,424
|
4,456
|
4,016,272
|
2,039,171
|
8,201,323
|
Interest on shareholders’ equity
|
-
|
-
|
-
|
(2,039,171)
|
(2,039,171)
|
At June 30, 2016
|
2,141,424
|
4,456
|
4,016,272
|
-
|
6,162,152
|
21
(c.1) Investments
reserve
From net income after deductions
applicable, will be aimed no more than 60% (sixty per cent) to investment
reserve to support future investments.
(c.2) Statutory
reserve
From net income, 5% will be applied
before any other allocation, to the statutory reserve, which cannot exceed 20%
of capital stock. The Company is not required to supplement the statutory
reserve in the year when the balance of this reserve, plus the amount of capital
reserves, exceeds 30% of the capital stock.
(c.3) Tax
incentives
The Company has tax incentives framed in
certain state and federal industrial development programs in the form of
financing, deferred payment of taxes or partial reductions of the amount due.
These state programs aim to promote the expansion of employment generation,
regional decentralization, complement and diversify the industrial base of the
States. In these states, the grace periods, enjoyment and reductions are
permitted under the tax law.
The portion of income for the period
related to tax incentives, which will be allocated to the profit reserve at the
end of the fiscal year on December 31, 2017 and therefore not being used as a
basis for dividend distribution, is composed of:
|
06/30/2017
|
06/30/2016
|
ICMS (Brazilian State value added)
|
849,444
|
724,082
|
Income tax
|
79,022
|
101,451
|
|
928,466
|
825,533
|
(c.4) Interest on shareholders’ equity /
Dividends
Brazilian companies are permitted to
distribute interest attributed to shareholders’ equity calculated based on the
long-term interest rate (TJLP), such interest being tax-deductible, in
accordance with the applicable law and, when distributed, may be considered part
of the minimum mandatory dividends.
As determined by its By-laws, the
Company is required to distribute to its shareholders, as a minimum mandatory
dividend in respect of each fiscal year ending on December 31,an amount not less
than 40% of its net income determined under Brazilian law, as adjusted in
accordance with applicable law, unless payment of such amount would be
incompatible with Ambev’s financial situation. The minimum mandatory dividend
includes amounts paid as interest on shareholders’
equity.
22
Events during six-month period ended June 30, 2017:
Event
|
Approval
|
Type
|
Date of payment
|
Year
|
Type of share
|
Amount per share
|
Total amount
|
Board of Directors Meeting
|
05/17/2017
|
Dividends
|
07/17/2016
|
2017
|
ON
|
0.1600
|
2,513,077
|
|
|
|
|
|
|
|
2,513,077
|
Events during six-month period ended June 30, 2016:
Event
|
Approval
|
Type
|
Date of payment
|
Year
|
Type of share
|
Amount per share
|
Total amount
|
Board of Directors Meeting
|
01/15/2016
|
Interest on shareholders’ equity
|
02/29/2016
|
2015
|
ON
|
0.1300
|
2,039,171
|
Board of Directors Meeting
|
06/24/2016
|
Dividends
|
07/29/2016
|
2016
|
ON
|
0.1300
|
2,040,800
|
|
|
|
|
|
|
|
4,079,971
|
23
(d) Carrying value adjustments
|
Carrying value adjustments
|
|
|
Translation
reserves
|
Cash flow
hedge
|
Actuarial gains/
(losses)
|
Put option
granted on
subsidiary
|
Gains/(losses) of non-controlling interest´s share
|
Business combination
|
Accounting adjustments for transactions between shareholders
|
Total
|
At January 1, 2017
|
(289,483)
|
(144,568)
|
(1,262,170)
|
(2,390,843)
|
2,150,643
|
156,091
|
(75,238,790)
|
(77,019,120)
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
Gains/(losses) on translation of foreign operations
|
732,889
|
-
|
-
|
-
|
-
|
-
|
-
|
732,889
|
Cash flow hedges
|
-
|
301,096
|
-
|
-
|
-
|
-
|
-
|
301,096
|
Actuarial gains/(losses)
|
-
|
-
|
159,816
|
-
|
-
|
-
|
-
|
159,816
|
Total Comprehensive income
|
732,889
|
301,096
|
159,816
|
-
|
-
|
-
|
-
|
1,193,801
|
Gains/(losses) of controlling interest´s share
|
-
|
-
|
-
|
-
|
(3,081)
|
-
|
-
|
(3,081)
|
At June 30, 2017
|
443,406
|
156,528
|
(1,102,354)
|
(2,390,843)
|
2,147,562
|
156,091
|
(75,238,790)
|
(75,828,400)
|
|
Carrying value adjustments
|
|
|
Translation
reserves
|
Cash flow
hedge
|
Actuarial gains/
(losses)
|
Put option
granted on
subsidiary
|
Gains/(losses) of non-controlling interest´s share
|
Business combination
|
Accounting adjustments for transactions between shareholders
|
Total
|
At January 1, 2016
|
3,472,291
|
932,109
|
(1,131,499)
|
(2,246,679)
|
2,123,565
|
156,091
|
(75,162,909)
|
(71,857,031)
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
Gains/(losses) on translation of foreign operations
|
(3,486,740)
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,486,740)
|
Cash flow hedges
|
-
|
(1,202,253)
|
-
|
-
|
-
|
-
|
-
|
(1,202,253)
|
Actuarial gains / (losses)
|
-
|
-
|
1,152
|
-
|
-
|
-
|
-
|
1,152
|
Total Comprehensive income
|
(3,486,740)
|
(1,202,253)
|
1,152
|
-
|
-
|
-
|
-
|
(4,687,841)
|
Put option
granted on
subsidiary
|
-
|
-
|
-
|
(144,079)
|
-
|
-
|
-
|
(144,079)
|
Gains / (losses) of controlling interest´s share
|
-
|
-
|
-
|
-
|
(9,175)
|
-
|
-
|
(9,175)
|
At June 30, 2016
|
(14,449)
|
(270,144)
|
(1,130,347)
|
(2,390,758)
|
2,114,390
|
156,091
|
(75,162,909)
|
(76,698,126)
|
24
(d.1) Translation reserves
The translation reserves comprise all foreign currency
exchange differences arising from the translation of the interim financial
statements with functional currency different from the Real.
The translation reserves also comprise the portion of the
gain or loss on the foreign currency liabilities and on the derivative financial
instruments determined to be effective net investment hedges in conformity with
IAS 39.
(d.2) Cash flow hedge reserves
The hedging reserves comprise the effective portion of
the cumulative net change in the fair value of cash flow hedges to the extent
the hedged risk has not yet impacted profit or loss (For additional information,
see Note 21 –
Financial instruments and risks)
.
(d.3) Actuarial gains and losses
The actuarial gains and losses include expectations with
regards to the future pension plans obligations. Consequently, the results of
actuarial gains and losses are recognized on timely basis considering best
estimate obtained by Management. Accordingly, the Company recognizes on monthly
basis the results of these estimated actuarial gains and losses according to the
expectations presented based on an independent actuarial
report.
The actuarial gain of R$158,509 arising from the surplus
reverted to the Sponsor, originating from Ambev Private Pension Institute of the
defined benefits plan was fully recorded under the heading of actuarial gains
and losses.
(d.4) O
ptions
granted on
subsidiary
As part of the shareholders agreement between the Ambev
and ELJ, an option to sell (“put”) and to purchase (“call”) was issued, which
may result in an acquisition by Ambev of the remaining shares of CND, for a
value based on EBITDA from operations, the “put” exercisable annually until 2019
and the “call” from 2019. On June 30, 2017 the put option held by ELJ is valued
at R$5,146,155 (R$4,879,459 on December 31, 2016) and the liability categorized
as “Level 3”, as the Note 21 (b) and in accordance with the IFRS 3. No value has
been assigned to the call option held by the Company. The fair value of this
consideration deferred was calculated by using standard valuation techniques
(present value of the principal amount and future interest rates, discounted by
the market rate). The criteria used are based on market information and from
reliable sources and the fair value is revaluated on an annual
basis.
As part of the agreement to acquire the remaining shares
of Sucos do Bem, the Company has a put option determined by gross revenue of its
products and exercisable from 2019. On June 30, 2017 the option is valued at
R$130,333 (R$127,718 on December 31, 2016).
25
As part of the acquisition agreement of all shares of the
company Tropical Juice, the Company has put option exercisable from 2018. On
June 30, 2017 the option is valued at R$23,380 (R$23,380 on December 31,
2016).
The reconciliation of changes in these options is
presented in Note 21
– Financial instruments and risks
.
(d.5) Accounting for acquisition of non-controlling
interests
In transactions with non-controlling
interests of the same business, even when performed at arm's length terms, that
present valid economic grounds and reflect normal market conditions, will be
consolidated by the applicable accounting standards as occurred within the same
accounting entity.
As determined by IFRS 10, any difference between the
amount paid (fair value) for the acquisition of non-controlling interests and
are related to carrying amount of such non-controlling interest shall be
recognized directly in controlling shareholders’ equity. The acquisition of
non-controlling interest related to Old Ambev, the above mentioned adjustment
was recognized in the Carrying value adjustments when
applicable.
26
14.
SEGMENT REPORTING
Segment information is presented in thousands
of Brazilian Reais (R$).
(a)
Reportable segments – six-month periods ended in:
|
Latin America - north
(i)
|
Latin America - south
(ii)
|
Canada
|
Consolidated
|
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
13,805,363
|
13,809,447
|
4,850,036
|
4,787,291
|
2,854,359
|
3,345,564
|
21,509,758
|
21,942,302
|
Cost of sales
|
(5,759,706)
|
(4,989,291)
|
(1,921,131)
|
(1,772,338)
|
(890,493)
|
(1,093,292)
|
(8,571,330)
|
(7,854,921)
|
Gross profit
|
8,045,657
|
8,820,156
|
2,928,905
|
3,014,953
|
1,963,866
|
2,252,272
|
12,938,428
|
14,087,381
|
Distribution expenses
|
(1,986,569)
|
(1,897,108)
|
(471,922)
|
(473,741)
|
(520,221)
|
(602,094)
|
(2,978,712)
|
(2,972,943)
|
Sales and marketing expenses
|
(1,769,480)
|
(1,826,546)
|
(575,804)
|
(648,137)
|
(451,858)
|
(554,737)
|
(2,797,142)
|
(3,029,420)
|
Administrative expenses
|
(735,913)
|
(734,045)
|
(200,709)
|
(200,097)
|
(139,817)
|
(153,047)
|
(1,076,439)
|
(1,087,189)
|
Other operating income/(expenses)
|
502,656
|
779,064
|
8,315
|
(43,385)
|
2,425
|
(12,212)
|
513,396
|
723,467
|
Exceptional items
|
(29,808)
|
(11,958)
|
(30,971)
|
(8,508)
|
-
|
(7,999)
|
(60,779)
|
(28,465)
|
Income from operations (EBIT)
|
4,026,543
|
5,129,563
|
1,657,814
|
1,641,085
|
854,395
|
922,183
|
6,538,752
|
7,692,831
|
Net finance cost
|
(1,135,747)
|
(2,058,172)
|
(402,484)
|
(245,268)
|
(33,186)
|
232,252
|
(1,571,417)
|
(2,071,188)
|
Share of result of associates
|
5,552
|
6,879
|
-
|
-
|
749
|
958
|
6,301
|
7,837
|
Income before income tax
|
2,896,348
|
3,078,270
|
1,255,330
|
1,395,817
|
821,958
|
1,155,393
|
4,973,636
|
5,629,480
|
Income tax expense
|
322,938
|
49,304
|
(583,320)
|
(366,243)
|
(298,590)
|
(246,027)
|
(558,972)
|
(562,966)
|
Net income
|
3,219,286
|
3,127,574
|
672,010
|
1,029,574
|
523,368
|
909,366
|
4,414,664
|
5,066,514
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA
(iii)
|
5,351,120
|
6,430,953
|
2,010,025
|
2,000,636
|
938,351
|
1,037,378
|
8,299,496
|
9,468,967
|
Exceptional items
|
(29,808)
|
(11,958)
|
(30,971)
|
(8,508)
|
-
|
(7,999)
|
(60,779)
|
(28,465)
|
|
(1,294,769)
|
(1,289,432)
|
(321,240)
|
(351,043)
|
(83,956)
|
(107,196)
|
(1,699,965)
|
(1,747,671)
|
Net finance costs
|
(1,135,747)
|
(2,058,172)
|
(402,484)
|
(245,268)
|
(33,186)
|
232,252
|
(1,571,417)
|
(2,071,188)
|
Share of results of associates
|
5,552
|
6,879
|
-
|
-
|
749
|
958
|
6,301
|
7,837
|
Income tax expense
|
322,938
|
49,304
|
(583,320)
|
(366,243)
|
(298,590)
|
(246,027)
|
(558,972)
|
(562,966)
|
Net income
|
3,219,286
|
3,127,574
|
672,010
|
1,029,574
|
523,368
|
909,366
|
4,414,664
|
5,066,514
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA margin in %
|
38.8%
|
46.6%
|
41.4%
|
41.8%
|
32.9%
|
31.0%
|
38.6%
|
43.2%
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
795,615
|
1,081,683
|
347,864
|
592,910
|
106,867
|
137,548
|
1,250,346
|
1,812,141
|
|
|
|
|
|
|
|
|
|
|
06/30/2017
|
12/31/2016
|
06/30/2017
|
12/31/2016
|
06/30/2017
|
12/31/2016
|
06/30/2017
|
12/31/2016
|
Segment assets
|
48,543,113
|
50,935,027
|
11,027,825
|
11,149,019
|
10,276,252
|
9,245,718
|
69,847,190
|
71,329,764
|
Intersegment elimination
|
|
|
|
|
|
|
(3,173,763)
|
(3,968,045)
|
Non-segmented assets
|
|
|
|
|
|
|
17,450,584
|
16,479,699
|
Total assets
|
|
|
|
|
|
|
84,124,011
|
83,841,418
|
|
|
|
|
|
|
|
|
|
Segment liabilities
|
20,614,049
|
22,958,871
|
4,770,131
|
5,576,413
|
3,741,639
|
3,275,676
|
29,125,819
|
31,810,960
|
Intersegment elimination
|
|
|
|
|
|
|
(3,174,976)
|
(3,968,045)
|
Non-segmented liabilities
|
|
|
|
|
|
|
58,173,168
|
55,998,503
|
Total liabilities
|
|
|
|
|
|
|
84,124,011
|
83,841,418
|
(i) Latin America – North: includes operations in Brazil, Luxembourg and CAC (El Salvador, Guatemala, Nicaragua, Dominican Republic, Saint Vincent, Dominica, Antigua, Cuba, Barbados and Panama).
(ii) Latin America – South: includes operations in Argentina, Bolivia, Chile, Paraguay and Uruguay.
(iii) Normalized EBITDA is calculated excluding of the net income the following effects: (i)
Income tax expense
, (ii)
Share of results of associates
, (iii)
Net finance result
, (iv) Exceptional items, and (v) Depreciation, amortization and impairment of property, plant and equipment.
27
(b)
Reportable segments – three-month periods ended in:
|
Latin America - north
(i)
|
Latin America - south
(ii)
|
Canada
|
Consolidated
|
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
6,453,297
|
6,533,784
|
2,086,047
|
1,813,439
|
1,728,609
|
2,029,981
|
10,267,953
|
10,377,204
|
Cost of sales
|
(2,631,289)
|
(2,504,444)
|
(861,224)
|
(728,083)
|
(555,676)
|
(662,078)
|
(4,048,189)
|
(3,894,605)
|
Gross profit
|
3,822,008
|
4,029,340
|
1,224,823
|
1,085,356
|
1,172,933
|
1,367,903
|
6,219,764
|
6,482,599
|
Distribution expenses
|
(954,515)
|
(925,891)
|
(213,650)
|
(192,911)
|
(299,103)
|
(339,010)
|
(1,467,268)
|
(1,457,812)
|
Sales and marketing expenses
|
(852,130)
|
(887,281)
|
(273,171)
|
(291,537)
|
(258,055)
|
(302,725)
|
(1,383,356)
|
(1,481,543)
|
Administrative expenses
|
(359,263)
|
(385,382)
|
(103,278)
|
(97,984)
|
(58,239)
|
(70,185)
|
(520,780)
|
(553,551)
|
Other operating income/(expenses)
|
214,423
|
352,519
|
6,877
|
(15,655)
|
1,270
|
(5,732)
|
222,570
|
331,132
|
Exceptional items
|
(13,649)
|
(5,719)
|
(18,436)
|
(8,508)
|
-
|
(7,999)
|
(32,085)
|
(22,226)
|
Income from operations (EBIT)
|
1,856,874
|
2,177,586
|
623,165
|
478,761
|
558,806
|
642,252
|
3,038,845
|
3,298,599
|
Net finance cost
|
(441,685)
|
(976,623)
|
(246,330)
|
(28,312)
|
(10,807)
|
105,052
|
(698,822)
|
(899,883)
|
Share of result of associates
|
4,858
|
(136)
|
-
|
-
|
411
|
524
|
5,269
|
388
|
Income before income tax
|
1,420,047
|
1,200,827
|
376,835
|
450,449
|
548,410
|
747,828
|
2,345,292
|
2,399,104
|
Income tax expense
|
261,810
|
(10,552)
|
(286,287)
|
(15,319)
|
(195,982)
|
(200,712)
|
(220,459)
|
(226,583)
|
Net income
|
1,681,857
|
1,190,275
|
90,548
|
435,130
|
352,428
|
547,116
|
2,124,833
|
2,172,521
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA
(iii)
|
2,519,106
|
2,830,880
|
806,657
|
664,921
|
617,562
|
708,821
|
3,943,325
|
4,204,622
|
Exceptional items
|
(13,649)
|
(5,719)
|
(18,436)
|
(8,508)
|
-
|
(7,999)
|
(32,085)
|
(22,226)
|
Depreciation, amortization and impairment excluding exceptional items
|
(648,583)
|
(647,575)
|
(165,056)
|
(177,652)
|
(58,756)
|
(58,570)
|
(872,395)
|
(883,797)
|
Net finance costs
|
(441,685)
|
(976,623)
|
(246,330)
|
(28,312)
|
(10,807)
|
105,052
|
(698,822)
|
(899,883)
|
Share of results of associates
|
4,858
|
(136)
|
-
|
-
|
411
|
524
|
5,269
|
388
|
Income tax expense
|
261,810
|
(10,552)
|
(286,287)
|
(15,319)
|
(195,982)
|
(200,712)
|
(220,459)
|
(226,583)
|
Net income
|
1,681,857
|
1,190,275
|
90,548
|
435,130
|
352,428
|
547,116
|
2,124,833
|
2,172,521
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA margin in %
|
39.0%
|
43.3%
|
38.7%
|
36.7%
|
35.7%
|
34.9%
|
38.4%
|
40.5%
|
(i) Latin America – North: includes operations in Brazil, Luxembourg and CAC (El Salvador, Guatemala, Nicaragua, Dominican Republic, Saint Vincent, Dominica, Antigua, Cuba, Barbados and Panama).
(ii) Latin America – South: includes operations in Argentina, Bolivia, Chile, Paraguay and Uruguay.
(iii) Normalized EBITDA is calculated excluding of the net income the following effects: (i)
Income tax expense
, (ii)
Share of results of associates
, (iii)
Net finance result
, (iv) Exceptional items, and (v) Depreciation, amortization and impairment of property, plant and equipment.
28
(c)
Additional information – by Business unit:
|
S
ix-month period ended:
|
|
Three-month period ended:
|
|
Latin America - north
|
|
Latin America - north
|
|
CAC
|
Brazil
|
Total
|
|
CAC
|
Brazil
|
Total
|
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
2,186,179
|
1,998,756
|
11,619,184
|
11,810,690
|
13,805,363
|
13,809,446
|
|
1,128,307
|
981,187
|
5,324,990
|
5,552,596
|
6,453,297
|
6,533,783
|
Cost of sales
|
(953,326)
|
(912,109)
|
(4,806,380)
|
(4,077,181)
|
(5,759,706)
|
(4,989,290)
|
|
(489,403)
|
(440,262)
|
(2,141,886)
|
(2,064,181)
|
(2,631,289)
|
(2,504,443)
|
Gross profit
|
1,232,853
|
1,086,647
|
6,812,804
|
7,733,509
|
8,045,657
|
8,820,156
|
|
638,904
|
540,925
|
3,183,104
|
3,488,415
|
3,822,008
|
4,029,340
|
Distribution expenses
|
(253,561)
|
(205,293)
|
(1,733,008)
|
(1,691,815)
|
(1,986,569)
|
(1,897,108)
|
|
(126,967)
|
(103,415)
|
(827,548)
|
(822,476)
|
(954,515)
|
(925,891)
|
Sales and marketing expenses
|
(241,451)
|
(229,279)
|
(1,528,029)
|
(1,597,267)
|
(1,769,480)
|
(1,826,546)
|
|
(112,323)
|
(106,898)
|
(739,807)
|
(780,383)
|
(852,130)
|
(887,281)
|
Administrative expenses
|
(120,935)
|
(97,402)
|
(614,978)
|
(636,642)
|
(735,913)
|
(734,044)
|
|
(60,542)
|
(54,259)
|
(298,721)
|
(331,122)
|
(359,263)
|
(385,381)
|
Other operating income/(expenses)
|
1,333
|
4,877
|
501,323
|
774,187
|
502,656
|
779,064
|
|
(6,740)
|
(1,776)
|
221,163
|
354,295
|
214,423
|
352,519
|
Exceptional items
|
(17,409)
|
-
|
(12,399)
|
(11,958)
|
(29,808)
|
(11,958)
|
|
(6,758)
|
-
|
(6,891)
|
(5,719)
|
(13,649)
|
(5,719)
|
Income from operations (EBIT)
|
600,830
|
559,550
|
3,425,713
|
4,570,014
|
4,026,543
|
5,129,564
|
|
325,574
|
274,577
|
1,531,300
|
1,903,010
|
1,856,874
|
2,177,587
|
Net finance cost
|
(56,479)
|
(14,979)
|
(1,079,268)
|
(2,043,193)
|
(1,135,747)
|
(2,058,172)
|
|
(6,388)
|
29,755
|
(435,297)
|
(1,006,378)
|
(441,685)
|
(976,623)
|
Share of result of associates
|
9,890
|
13,048
|
(4,338)
|
(6,169)
|
5,552
|
6,879
|
|
6,126
|
2,992
|
(1,268)
|
(3,128)
|
4,858
|
(136)
|
Income before income tax
|
554,241
|
557,619
|
2,342,107
|
2,520,652
|
2,896,348
|
3,078,271
|
|
325,312
|
307,324
|
1,094,735
|
893,504
|
1,420,047
|
1,200,828
|
Income tax expense
|
(155,111)
|
(167,186)
|
478,049
|
216,490
|
322,938
|
49,304
|
|
(84,274)
|
(88,490)
|
346,084
|
77,938
|
261,810
|
(10,552)
|
Net income
|
399,130
|
390,433
|
2,820,156
|
2,737,142
|
3,219,286
|
3,127,575
|
|
241,038
|
218,834
|
1,440,819
|
971,442
|
1,681,857
|
1,190,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA
(i)
|
808,829
|
732,307
|
4,542,291
|
5,698,647
|
5,351,120
|
6,430,954
|
|
431,908
|
353,554
|
2,087,198
|
2,477,327
|
2,519,106
|
2,830,881
|
Exceptional items
|
(17,409)
|
-
|
(12,399)
|
(11,958)
|
(29,808)
|
(11,958)
|
|
(6,758)
|
-
|
(6,891)
|
(5,719)
|
(13,649)
|
(5,719)
|
Depreciation. amortization and impairment excluding exceptional items
|
(190,590)
|
(172,757)
|
(1,104,179)
|
(1,116,675)
|
(1,294,769)
|
(1,289,432)
|
|
(99,576)
|
(78,977)
|
(549,007)
|
(568,598)
|
(648,583)
|
(647,575)
|
Net finance costs
|
(56,479)
|
(14,979)
|
(1,079,268)
|
(2,043,193)
|
(1,135,747)
|
(2,058,172)
|
|
(6,388)
|
29,755
|
(435,297)
|
(1,006,378)
|
(441,685)
|
(976,623)
|
Share of results of associates
|
9,890
|
13,048
|
(4,338)
|
(6,169)
|
5,552
|
6,879
|
|
6,126
|
2,992
|
(1,268)
|
(3,128)
|
4,858
|
(136)
|
Income tax expense
|
(155,111)
|
(167,186)
|
478,049
|
216,490
|
322,938
|
49,304
|
|
(84,274)
|
(88,490)
|
346,084
|
77,938
|
261,810
|
(10,552)
|
Net income
|
399,130
|
390,433
|
2,820,156
|
2,737,142
|
3,219,286
|
3,127,575
|
|
241,038
|
218,834
|
1,440,819
|
971,442
|
1,681,857
|
1,190,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA margin in %
|
37.0%
|
36.6%
|
39.1%
|
48.2%
|
38.8%
|
46.6%
|
|
38.3%
|
36.0%
|
39.2%
|
44.6%
|
39.0%
|
43.3%
|
(i) Normalized EBITDA is calculated excluding of the net income the following effects: (i)
Income tax expense
, (ii)
Share of results of associates
, (iii)
Net finance result
, (iv) Exceptional items, and (v) Depreciation, amortization and impairment of property, plant and equipment.
29
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
Brazil
|
|
Brazil
|
|
Beer
|
Soft drink and
Non-alcoholic
and
non-carbonated
|
Total
|
|
Beer
|
Soft drink and
Non-alcoholic
and
non-carbonated
|
Total
|
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
9,916,819
|
10,011,436
|
1,702,365
|
1,799,254
|
11,619,184
|
11,810,690
|
|
4,546,354
|
4,701,579
|
778,636
|
851,017
|
5,324,990
|
5,552,596
|
Cost of sales
|
(3,835,217)
|
(3,233,391)
|
(971,163)
|
(843,790)
|
(4,806,380)
|
(4,077,181)
|
|
(1,721,306)
|
(1,634,003)
|
(420,580)
|
(430,178)
|
(2,141,886)
|
(2,064,181)
|
Gross profit
|
6,081,602
|
6,778,045
|
731,202
|
955,464
|
6,812,804
|
7,733,509
|
|
2,825,048
|
3,067,576
|
358,056
|
420,839
|
3,183,104
|
3,488,415
|
Distribution
expenses
|
(1,404,349)
|
(1,373,124)
|
(328,659)
|
(318,691)
|
(1,733,008)
|
(1,691,815)
|
|
(672,332)
|
(659,954)
|
(155,216)
|
(162,522)
|
(827,548)
|
(822,476)
|
Sales and marketing expenses
|
(1,437,394)
|
(1,481,805)
|
(90,635)
|
(115,462)
|
(1,528,029)
|
(1,597,267)
|
|
(697,722)
|
(748,869)
|
(42,085)
|
(31,514)
|
(739,807)
|
(780,383)
|
Administrative expenses
|
(530,183)
|
(575,246)
|
(84,795)
|
(61,396)
|
(614,978)
|
(636,642)
|
|
(257,532)
|
(285,391)
|
(41,189)
|
(45,731)
|
(298,721)
|
(331,122)
|
Other operating income/(expenses)
|
401,060
|
619,226
|
100,263
|
154,961
|
501,323
|
774,187
|
|
178,251
|
282,459
|
42,912
|
71,836
|
221,163
|
354,295
|
Exceptional items
|
(10,560)
|
(11,461)
|
(1,839)
|
(497)
|
(12,399)
|
(11,958)
|
|
(5,899)
|
(5,414)
|
(992)
|
(305)
|
(6,891)
|
(5,719)
|
Income from operations
(EBIT)
|
3,100,176
|
3,955,635
|
325,537
|
614,379
|
3,425,713
|
4,570,014
|
|
1,369,814
|
1,650,407
|
161,486
|
252,603
|
1,531,300
|
1,903,010
|
Net finance cost
|
(1,079,268)
|
(2,043,193)
|
-
|
-
|
(1,079,268)
|
(2,043,193)
|
|
(435,297)
|
(1,006,378)
|
-
|
-
|
(435,297)
|
(1,006,378)
|
Share of result of associates
|
(4,338)
|
(6,169)
|
-
|
-
|
(4,338)
|
(6,169)
|
|
(1,268)
|
(3,128)
|
-
|
-
|
(1,268)
|
(3,128)
|
Income before income
tax
|
2,016,570
|
1,906,273
|
325,537
|
614,379
|
2,342,107
|
2,520,652
|
|
933,249
|
640,901
|
161,486
|
252,603
|
1,094,735
|
893,504
|
Income tax expense
|
478,049
|
216,490
|
-
|
-
|
478,049
|
216,490
|
|
346,084
|
77,938
|
-
|
-
|
346,084
|
77,938
|
Net income
|
2,494,619
|
2,122,763
|
325,537
|
614,379
|
2,820,156
|
2,737,142
|
|
1,279,333
|
718,839
|
161,486
|
252,603
|
1,440,819
|
971,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA
(i)
|
4,070,505
|
4,906,150
|
471,786
|
792,497
|
4,542,291
|
5,698,647
|
|
1,855,572
|
2,133,804
|
231,626
|
343,523
|
2,087,198
|
2,477,327
|
Exceptional items
|
(10,560)
|
(11,461)
|
(1,839)
|
(497)
|
(12,399)
|
(11,958)
|
|
(5,899)
|
(5,414)
|
(992)
|
(305)
|
(6,891)
|
(5,719)
|
Depreciation, amortization and
impairment excluding exceptional items
|
(959,769)
|
(939,054)
|
(144,410)
|
(177,621)
|
(1,104,179)
|
(1,116,675)
|
|
(479,859)
|
(477,983)
|
(69,148)
|
(90,615)
|
(549,007)
|
(568,598)
|
Net finance costs
|
(1,079,268)
|
(2,043,193)
|
-
|
-
|
(1,079,268)
|
(2,043,193)
|
|
(435,297)
|
(1,006,378)
|
-
|
-
|
(435,297)
|
(1,006,378)
|
Share of results of associates
|
(4,338)
|
(6,169)
|
-
|
-
|
(4,338)
|
(6,169)
|
|
(1,268)
|
(3,128)
|
-
|
-
|
(1,268)
|
(3,128)
|
Income tax expense
|
478,049
|
216,490
|
-
|
-
|
478,049
|
216,490
|
|
346,084
|
77,938
|
-
|
-
|
346,084
|
77,938
|
Net income
|
2,494,619
|
2,122,763
|
325,537
|
614,379
|
2,820,156
|
2,737,142
|
|
1,279,333
|
718,839
|
161,486
|
252,603
|
1,440,819
|
971,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized EBITDA margin in %
|
41.0%
|
49.0%
|
27.7%
|
44.0%
|
39.1%
|
48.2%
|
|
40.8%
|
45.4%
|
29.7%
|
40.4%
|
39.2%
|
44.6%
|
(i) Normalized EBITDA is calculated
excluding of the net income the following effects: (i)
Income tax expense
, (ii)
Share of results of associates
, (iii)
Net finance result
, (iv) Exceptional items, and (v)
Depreciation, amortization and impairment of property, plant and
equipment.
30
15.
NET SALES
The reconciliation between gross sales and net sales is
as follows:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Gross sales
(i)
|
33,102,339
|
43,929,257
|
|
15,613,123
|
18,950,050
|
Excise duty
|
(7,520,818)
|
(8,578,492)
|
|
(3,542,766)
|
(4,105,527)
|
Discounts
(i)
|
(4,071,763)
|
(13,408,463)
|
|
(1,802,404)
|
(4,467,319)
|
|
21,509,758
|
21,942,302
|
|
10,267,953
|
10,377,204
|
(i)
Variance resulting from the change in
the billing method with direct effect on Gross sales and
Discounts.
Services provided by distributors, such
as the promotion of our brands and logistics services are considered as expense
when separately identifiable.
16.
OTHER
OPERATING INCOME / (EXPENSES)
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Government grants/NPV of long term
fiscal incentives
|
427,531
|
673,165
|
|
205,634
|
317,846
|
(Additions)/Reversals to
provisions
|
(27,701)
|
(28,857)
|
|
(17,150)
|
(6,616)
|
Gains/(losses) on disposal of property,
plant and equipment and intangible assets
|
2,689
|
28,170
|
|
8,065
|
25,255
|
Other operating income/(expenses),
net
|
110,877
|
50,989
|
|
26,021
|
(5,353)
|
|
513,396
|
723,467
|
|
222,570
|
331,132
|
Government grants are not recognized until there is
reasonable assurance that the Company will meet related conditions and that the
grants will be received. Government grants are systematically recognized in
income during the periods in which the Company recognizes as expenses the
related costs that the grants are intended to offset.
17.
EXCEPTIONAL ITEMS
The
exceptional
items included in the income statement
are detailed below:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Restructuring
|
(59,686)
|
(20,466)
|
|
(31,692)
|
(14,227)
|
Costs arising from business
combinations
|
(1,093)
|
(7,999)
|
|
(393)
|
(7,999)
|
|
(60,779)
|
(28,465)
|
|
(32,085)
|
(22,226)
|
The Company opted to exclude these items
when measuring segment-based performance, as per Note 14 –
Segment reporting
.
31
18.
FINANCE COST AND INCOME
(a)
Finance costs
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Interest expense
|
(792,505)
|
(721,750)
|
|
(389,662)
|
(358,671)
|
Capitalized
borrowings
|
617
|
2,851
|
|
18
|
723
|
Net Interest on pension
plans
|
(49,663)
|
(56,276)
|
|
(24,749)
|
(27,613)
|
Losses on hedging instruments
|
(391,890)
|
(997,270)
|
|
(143,279)
|
(474,695)
|
Interest on provision for
contingencies
|
(120,741)
|
(265,245)
|
|
(48,051)
|
(47,138)
|
Exchange variation
|
(187,246)
|
(320,368)
|
|
(100,104)
|
(50,664)
|
Tax on financial
transactions
|
(71,615)
|
(90,643)
|
|
(33,646)
|
(47,295)
|
Bank guarantee
expenses
|
(43,830)
|
(45,675)
|
|
(22,562)
|
(21,974)
|
Other financial
results
|
(161,077)
|
(35,072)
|
|
(59,657)
|
(8,664)
|
|
(1,817,950)
|
(2,529,448)
|
|
(821,692)
|
(1,035,991)
|
Interest expenses are presented net of
the effect of interest rate derivative financial instruments which mitigate
Ambev interest rate risk (Note 21 –
Financial instruments and
risks
). The interest expense are as
follows:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Financial liabilities measured at
amortized cost
|
(220,633)
|
(221,475)
|
|
(105,525)
|
(106,034)
|
Liabilities at fair value through
profit or loss
|
(554,755)
|
(479,977)
|
|
(276,339)
|
(242,360)
|
Fair value hedge - hedged
items
|
(17,896)
|
(29,120)
|
|
(7,785)
|
(10,814)
|
Fair value hedge - hedging
instruments
|
779
|
8,822
|
|
(13)
|
537
|
|
(792,505)
|
(721,750)
|
|
(389,662)
|
(358,671)
|
(b)
Finance income
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Interest income
|
226,423
|
288,779
|
|
117,759
|
103,671
|
Gains on derivative
|
3,943
|
114,713
|
|
1,933
|
9,513
|
Financial assets at fair value through
profit or loss
|
7,609
|
36,234
|
|
(1,133)
|
11,854
|
Other financial results
|
8,558
|
18,534
|
|
4,311
|
11,070
|
|
246,533
|
458,260
|
|
122,870
|
136,108
|
Interest income arises from the
following financial assets:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Cash and cash
equivalents
|
86,249
|
133,653
|
|
42,985
|
62,971
|
Investment securities held for
trading
|
15,020
|
23,355
|
|
4,851
|
13,745
|
Other receivables
|
125,154
|
131,771
|
|
69,923
|
26,955
|
|
226,423
|
288,779
|
|
117,759
|
103,671
|
32
19.
INCOME TAX AND SOCIAL
CONTRIBUTION
Income taxes reported in the income
statement are analyzed as follows:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Income tax expense -
current
|
(1,259,055)
|
(1,172,401)
|
|
(577,296)
|
(533,547)
|
|
|
|
|
|
|
Deferred tax expense on temporary
differences
|
852,635
|
(446,563)
|
|
398,510
|
(281,898)
|
Deferred tax over taxes losses
carryforwards movements in the current period
|
(152,552)
|
1,055,998
|
|
(41,673)
|
588,862
|
Total deferred tax
(expense)/income
|
700,083
|
609,435
|
|
356,837
|
306,964
|
|
|
|
|
|
|
Total income tax
expenses
|
(558,972)
|
(562,966)
|
|
(220,459)
|
(226,583)
|
The reconciliation from the weighted
nominal to the effective tax rate is summarized as follows:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Profit before tax
|
4,973,636
|
5,629,480
|
|
2,345,292
|
2,399,104
|
Adjustment on taxable
basis
|
|
|
|
|
|
Non-taxable income
|
(168,029)
|
(263,577)
|
|
(63,179)
|
(133,584)
|
Government grants related to sales
taxes
|
(849,444)
|
(724,082)
|
|
(415,031)
|
(382,967)
|
Share of results of
associates
|
(6,301)
|
(7,837)
|
|
(5,269)
|
(388)
|
Non-deductible expenses
|
30,508
|
464,503
|
|
(59,487)
|
204,068
|
Complement of income tax of foreign
subsidiaries due in Brazil
|
44,166
|
92,159
|
|
22,083
|
61,144
|
Results of intercompany transactions
non-taxable/not deductible in Brazil
|
(299,083)
|
915,919
|
|
(311,799)
|
467,943
|
|
3,725,453
|
6,106,565
|
|
1,512,610
|
2,615,320
|
Aggregated weighted nominal tax
rate
|
28.30%
|
30.33%
|
|
26.36%
|
29.54%
|
Taxes payable – nominal rate
|
(1,054,274)
|
(1,852,043)
|
|
(398,726)
|
(772,649)
|
Adjustment on tax
expense
|
|
|
|
|
|
Regional incentives - income
taxes
|
79,022
|
101,451
|
|
50,881
|
49,448
|
Deductible interest on shareholders’
equity
|
653,383
|
1,118,698
|
|
368,988
|
425,382
|
Tax savings from goodwill amortization
on tax books
|
82,573
|
71,122
|
|
46,349
|
35,533
|
Withholding tax over undistributed
profits
|
(175,602)
|
(82,016)
|
|
(124,364)
|
130
|
Others with reduced
taxation
|
(144,074)
|
79,822
|
|
(163,587)
|
35,573
|
Income tax and social contribution
expense
|
(558,972)
|
(562,966)
|
|
(220,459)
|
(226,583)
|
Effective tax rate
|
11.24%
|
10.00%
|
|
9.40%
|
9.44%
|
The main events that impacted the effective tax rate in
the period were:
§
|
Non-taxable net
financial and other income: The movement perceived in this line is related
to incomes and expenses in subsidiaries, which occurs mainly due
to foreign exchange variation;
|
|
|
§
|
Government subsidy
on sales taxes: The Company has state tax incentives within certain
industrial development programs in the form of financing, deferral of tax
payments or partial
reductions of the amount due. Such investment subsidies
arising from deferred and presumed ICMS credits are deductible for income
tax purposes.
|
33
§
|
Additional income tax of foreign associates taxed in
Brazil: The reduction in this line, which is related to Ambev subsidiaries
foreign profits taxation in Brazil, is the outcome of a better management
of our capital structure;
|
|
|
§
|
Results of intercompany transactions taxed/deductible in
Brazil: In this line are recorded the foreign exchange variation effect
and the interest generated by intercompany transactions, between
companies based in different jurisdictions. The main cause of the
variation is related to foreign exchange;
|
|
|
§
|
Deductible Interest on net equity: Under Brazilian law,
companies have the option to distribute interest on equity (“JCP”),
calculated based on the long-term interest rate (“TJLP”), Which are
deductible for income tax purposes under the applicable legislation, which
approximate amount to be distributed until now is R$1,922 million and the
tax impact is R$653 million.
|
The Company has been granted income tax incentives by the
Brazilian Government in order to promote economic and social development in
certain areas of the North and Northeast. These incentives are recorded as
income on an accrual basis and allocated at year-end to the tax incentive
reserve account.
20.
SHARE-BASED
PAYMENTS
There are different share-based payment programs and
stock option plans which allow the senior management from the Company and its
subsidiaries to receive or acquire shares
of the Company
. For all option plans, the fair value is estimated at
grant date, using the Hull binomial pricing model, modified to reflect the IFRS
2 requirement that assumptions about forfeiture before the end of the vesting
period cannot impact the fair value of the option.
This current model of share based
payment includes two types of grants: Grant 1: the beneficiary may choose to
allocate 30%, 40%, 60%, 70% or 100% of the amount related to the profit share he
received in the year, at the immediate exercise of options, thus acquiring the
corresponding shares of the Company, and the delivery of a substantial part of
the acquired shares is conditioned to the permanency in the Company for a period
of five-years from the date of exercise; Grant 2: the beneficiary may exercise
the options after a period of five years.
Additionally, as a means of a creating
long term incentive (wealth incentive) for certain senior employees and members
of management considered as having “high potential,” the Company
issue share appreciation rights in the
form of phantom stocks or stocks to future delivery to those employees, pursuant
to which the beneficiary shall receive two separate lots – Lot A and Lot B –
subject to maturation periods of five and ten years,
respectively.
34
In addition, the Company has implemented
a Stock Based Payment Plan under which certain employees and members of the
management of the Company or its direct or indirect subsidiaries are eligible to
receive shares of the Company including in the form of ADR’s. The shares that
are subject to the Stock Plan are designated as "Restricted Shares" and the
restricted share price for the purposes of the stock plan will correspond to the
price of the Company's shares on B3 S.A.- Brasil, Bolsa, Balcão, in the trading
session immediately prior to the stock concession Restricted.
The weighted average fair value of the
options and assumptions used in applying the A
mbev
option pricing model for the “Grant 2”
of 2017 and 2016 grants are as follows:
In R$, except when otherwise
indicated
|
06/30/2017
|
(i)
|
12/31/2016
|
(i)
|
|
|
|
|
|
Fair value of options
granted
|
5.57
|
|
6.21
|
|
Share price
|
17.16
|
|
17.18
|
|
Exercise price
|
17.16
|
|
17.18
|
|
Expected volatility
|
26.8%
|
|
27.0%
|
|
Vesting year
|
5
|
|
5
|
|
Expected dividends
|
5%
|
|
5%
|
|
Risk-free interest rate
|
10.0%
|
(ii)
|
12.4%
|
(ii)
|
(i)
Information based on weighted average
plans granted, except for the expected dividends and risk-free interest
rate.
(ii
) The percentages include the grants of stock options and
ADR’s during the period, in which the risk-free interest rate of ADR’s are
calculated in U.S. dollar.
The total number of outstanding options developed
as follows:
Thousand options
|
06/30/2017
|
|
12/31/2016
|
|
|
|
|
Options outstanding at January
1
st
|
131,244
|
|
121,770
|
Options issued during the
period
|
4,336
|
|
24,806
|
Options exercised during the
period
|
(8,212)
|
|
(11,613)
|
Options forfeited during the
period
|
(2,099)
|
|
(3,719)
|
Options outstanding at ended
period
|
125,269
|
|
131,244
|
The range of exercise prices of the outstanding options
is nearly zero (R$0.02 as of December 31, 2016) and
R$25.95
(R$28.32 as of December 31, 2016) and the weighted
average remaining contractual life is approximately
6.28
years (5.96 years as of December 31,
2016).
Of the 125,269 thousand outstanding options (131,244
thousands of December 31, 2016), 44,486 thousand options are vested as at June
30, 2017 (52,780 thousands of December 31, 2016).
35
The weighted average exercise price of the options is as follows:
In R$ per share
|
06/30/2017
|
|
12/31/2016
|
|
|
|
|
Options outstanding at January 1
st
|
13.87
|
|
12.36
|
Options issued during the period
|
17.16
|
|
17.18
|
Options forfeited during the period
|
17.75
|
|
12.83
|
Options exercised during the period
|
5.07
|
|
2.52
|
Options outstanding at ended period
|
13.73
|
|
13.87
|
Options exercisable at ended period
|
3.75
|
|
3.66
|
For the options exercised during the period ended June 30,2017, the weighted average share price on the exercise date was R$17.89 (R$18.41 as of December 31, 2016).
During the period, A
mbev
issued 366 thousand (7,329 thousand in 2016) deferred stock units related to exercise of the options in the model “Grant 1”. These deferred stock units are valued at the share price of the day of grant, representing fair value of approximately R$6,127 on June 30, 2017 (R$133,884 on December 31, 2016), and cliff vest after five years.
The total number of shares purchased under the plan of shares by employees, whose grant is deferred to future time under certain conditions (deferred stock), is shown below:
Thousand deferred shares
|
06/30/2017
|
|
12/31/2016
|
|
|
|
|
Deferred shares outstanding at January 1
st
|
19,260
|
|
19,056
|
New deferred shares during the period
|
366
|
|
7,329
|
Deferred shares granted during the period
|
(2,804)
|
|
(6,118)
|
Deferred shares forfeited during the period
|
(686)
|
|
(1,007)
|
Deferred shares outstanding at ended period
|
16,136
|
|
19,260
|
Additionally, certain employees and directors of the Company receive options to acquire AB Inbev shares, the compensation cost of which is recognized in the income statement against equity
.
These share-based payments generated an expense of
R$94,547
(R$97,474 for the six-month period ended June 30, 2016), recorded as administrative expenses.
21.
FINANCIAL INSTRUMENTS AND RISKS
Risk factors
The Company is exposed to foreign currency
,
interest rate
,
commodity price
,
liquidity and
credit risk
in the
ordinary course of business
. The Company a
nalyzes
each of these
risks
both individually and as a whole to define
strategies
to manage
the
economic
impact
on
Company’s
performance
consistent
with
its
Financial Risk Management Policy
.
36
The Company’s use of derivatives strictly follows its
Financial Risk Management Policy approved by the Board of Directors. The purpose
of the policy is to provide guidelines for the management of financial risks
inherent to the capital markets in which Ambev carries out its operations. The
policy comprises four main aspects: (i) capital structure, financing and
liquidity, (ii) transactional risks related to the business, (iii) financial
statements translation risks and (iv) credit risks of financial
counterparties.
The policy establishes that all the financial assets and
liabilities in each country where Ambev operates must be denominated in their
respective local currencies. The policy also sets forth the procedures and
controls needed for identifying, measuring and minimizing market risks, such as
variations in foreign exchange rates, interest rates and commodities (mainly
aluminum, wheat, corn and sugar) that may affect Ambev’s revenues, costs and/or
investment amounts. The policy states that all the known risks (e.g. foreign
currency and interest) shall be hedged by contracting derivative financial
instruments. Existing risks not yet recorded (e.g. future contracts for the
purchase of raw material or property, plant and equipment) shall be mitigated
using projections for the period necessary for the Company to adapt to the new
costs scenario that may vary from ten to fourteen months, also through the use
of derivative financial instruments. Most of the translation risks are not
hedged. Any exception to the policy must be approved by the Board of
Directors
.
Derivative financial
Instruments
Derivative financial instruments authorized by the
Financial Risk Management Policy a
re futures contracts traded on exchanges, full
deliverable forwards, non-deliverable forwards, swaps and options. At June 30,
2017, the Company and its subsidiaries had no target forward, swaps with
currency verification or any other derivative operations representing a risk
level above the nominal value of their contracts. The derivative operations are
classified by strategies according to their purposes, as
follows:
i) Cash flow hedge derivative instruments –
The highly probable forecast transactions contracted in
order to minimize the Company's exposure to fluctuations of exchange rates and
prices of raw materials, investments, equipment and services to be procured,
protected by cash flow hedges that shall occur at various different dates during
the next fourteen months. Gains and losses classified as hedging reserve in
equity are recognized in the income statement in the period or periods when the
forecast and hedged transaction affects the income statement.
ii) Fair value hedge derivative instruments – operations
contracted with the purpose of mitigating the Company’s net indebtedness against
foreign exchange and interest rate risk. Cash net positions and foreign currency
debts are continually assessed for identification of new exposures.
37
The results of these operations, measured according to
their fair value, are recognized in financial results.
iii
) Net
investment hedge
derivative instruments
–
transactions entered into
in order
to
minimize
exposure
of the exchange differences arising
from
conversion
of
net investment
in the Company's subsidiaries
located abroad
for
translation account
balance
. The effective p
ortion
of the
hedge
is allocated
to
equity a
nd
the
ineffectiveness
portion
is recorded
directly
in financial results.
The following tables summarize the
exposure of the Company that were identified and protected in accordance with
the Company's Risk Policy. The following denominations have been
applied:
Operational Hedge: Refers to the
exposures arising from the core business of Ambev, such as: purchase of inputs,
purchase of fixed assets and service contracts linked to foreign currency, which
is protected through the use of derivatives.
Financial Hedge: Refers to the exposures arising from
cash and financing activities, such as: foreign currency cash and foreign
currency debt, which is protected through the use of derivatives.
Investment hedge abroad: Refers mainly to exposures
arising from cash hold in foreign currency in foreign subsidiaries whose
functional currency is different from the consolidation currency.
Investment hedge -
Put option
granted on
subsidiary
: As detailed in Note 13 (d.4) the
Company constituted a liability related to acquisition of Non-controlling
interest in the Dominican Republic operations. This financial instrument is
denominated in Dominican Pesos and is recorded in a Company which functional
currency is the Real. The Company assigned this financial instrument as a
hedging instrument for part of its net assets located in the Dominican Republic,
in such manner the hedge result can be recorded in other comprehensive income of
the group, following the result of the hedged item.
38
Transactions protected by derivative financial
instruments in accordance with the Financial Risk Management
Policy
|
|
|
|
|
|
|
06/30/2017
|
|
Six-month period ended:
06/30/2017
|
|
Three-month period ended: 06/30/2017
|
|
|
|
|
|
|
|
Fair Value
|
|
Gain / (Losses)
|
|
Gain / (Losses)
|
Exposure
|
|
Risk
|
|
|
Notional
|
|
Assets
|
Liability
|
|
Finance Result
|
Operational Result
|
Equity
|
|
Finance Result
|
Operational Result
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
(9,046,666)
|
|
8,816,281
|
|
249,460
|
(192,310)
|
|
(465,052)
|
(191,032)
|
264,692
|
|
(174,153)
|
(67,441)
|
235,055
|
|
|
Commodity
|
(1,840,046)
|
|
1,609,661
|
|
108,945
|
(136,889)
|
|
(2,667)
|
54,917
|
31,748
|
|
(2,299)
|
10,211
|
33,608
|
|
|
American Dollar
|
(6,798,492)
|
|
6,798,492
|
|
96,743
|
(53,170)
|
|
(460,645)
|
(260,777)
|
205,052
|
|
(178,014)
|
(104,847)
|
174,565
|
|
|
Euro
|
(86,128)
|
|
86,128
|
|
3,188
|
(1,874)
|
|
(768)
|
(1,196)
|
4,501
|
|
(1,170)
|
8,739
|
(2,026)
|
|
|
Mexican Pesos
|
(322,000)
|
|
322,000
|
|
40,584
|
(377)
|
|
(972)
|
16,024
|
23,391
|
|
7,330
|
18,456
|
28,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
(586,652)
|
|
586,652
|
|
7,520
|
(1,657)
|
|
(1,114)
|
-
|
-
|
|
786
|
-
|
-
|
|
|
American Dollar
|
(541,424)
|
|
541,424
|
|
7,520
|
(1,625)
|
|
(1,670)
|
-
|
-
|
|
(335)
|
-
|
-
|
|
|
Euro
|
(45,228)
|
|
45,228
|
|
-
|
(32)
|
|
556
|
-
|
-
|
|
1,121
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
(112,942)
|
|
112,942
|
|
2,471
|
(1,609)
|
|
(2,655)
|
3,916
|
574
|
|
(222)
|
3,798
|
331
|
|
|
American Dollar
|
(99,720)
|
|
99,720
|
|
2,100
|
(1,445)
|
|
(2,524)
|
3,513
|
519
|
|
(116)
|
3,513
|
519
|
|
|
Rupee
|
(13,222)
|
|
13,222
|
|
371
|
(164)
|
|
(131)
|
403
|
55
|
|
(106)
|
285
|
(188)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
1,125,286
|
|
(1,125,286)
|
|
-
|
(419)
|
|
(1,134)
|
-
|
-
|
|
(16,359)
|
-
|
-
|
|
|
American Dollar
|
1,140,286
|
|
(1,140,286)
|
|
-
|
(395)
|
|
(1,139)
|
-
|
-
|
|
(16,359)
|
-
|
-
|
|
|
Interest rate
|
(15,000)
|
|
15,000
|
|
-
|
(24)
|
|
5
|
-
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debts
|
|
|
(2,636,957)
|
|
2,049,800
|
|
27,800
|
(2,360)
|
|
(20,729)
|
-
|
-
|
|
51,572
|
-
|
-
|
|
|
American Dollar
|
(1,937,398)
|
|
1,350,241
|
|
786
|
-
|
|
(23,276)
|
-
|
-
|
|
51,827
|
-
|
-
|
|
|
Interest rate
|
(699,559)
|
|
699,559
|
|
27,014
|
(2,360)
|
|
2,547
|
-
|
-
|
|
(255)
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Instrument
|
|
|
(1,500,000)
|
|
330,820
|
|
2,175
|
-
|
|
2,175
|
-
|
-
|
|
2,175
|
-
|
-
|
|
|
ADR's Price
|
(1,500,000)
|
|
330,820
|
|
2,175
|
-
|
|
2,175
|
-
|
-
|
|
2,175
|
-
|
-
|
As of June 30, 2017
|
|
|
(12,757,931)
|
|
10,771,209
|
|
289,426
|
(198,355)
|
|
(488,509)
|
(187,116)
|
265,266
|
|
(136,201)
|
(63,643)
|
235,386
|
39
|
|
|
|
|
|
|
12/31/2016
|
|
Six-month period ended:
06/30/2016
|
|
Three-month period ended: 06/30/2016
|
|
|
|
|
|
|
|
Fair Value
|
|
Gain / (Losses)
|
|
Gain / (Losses)
|
Exposure
|
|
Risk
|
|
|
Notional
|
|
Assets
|
Liability
|
|
Finance Result
|
Operational Result
|
Equity
|
|
Finance Result
|
Operational Result
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
(8,807,524)
|
|
8,624,076
|
|
190,727
|
(582,809)
|
|
(789,765)
|
709,625
|
(1,078,446)
|
|
(374,741)
|
245,054
|
(512,702)
|
|
|
Commodity
|
(1,742,763)
|
|
1,559,315
|
|
136,502
|
(43,743)
|
|
-
|
(132,064)
|
7,783
|
|
-
|
(57,939)
|
-
|
|
|
American Dollar
|
(6,566,888)
|
|
6,566,888
|
|
36,042
|
(491,299)
|
|
(795,641)
|
803,190
|
(994,655)
|
|
(382,118)
|
287,808
|
(501,289)
|
|
|
Euro
|
(135,235)
|
|
135,235
|
|
-
|
(4,685)
|
|
7,102
|
41,264
|
(91,735)
|
|
8,132
|
15,894
|
(11,413)
|
|
|
Mexican Pesos
|
(359,191)
|
|
359,191
|
|
18,183
|
(43,326)
|
|
(1,226)
|
(2,765)
|
161
|
|
(755)
|
(709)
|
-
|
|
|
Brazilian Real
|
(3,447)
|
|
3,447
|
|
-
|
244
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
(523,088)
|
|
523,088
|
|
3,009
|
(76,101)
|
|
(195,003)
|
-
|
-
|
|
(116,767)
|
-
|
-
|
|
|
American Dollar
|
(430,332)
|
|
430,332
|
|
2,974
|
(5,814)
|
|
(134,536)
|
-
|
-
|
|
(74,328)
|
-
|
-
|
|
|
Euro
|
(92,756)
|
|
92,756
|
|
35
|
(70,287)
|
|
(60,467)
|
-
|
-
|
|
(42,439)
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
(103,779)
|
|
103,779
|
|
824
|
(1,089)
|
|
49,238
|
-
|
(134,211)
|
|
(1,297)
|
-
|
4,756
|
|
|
American Dollar
|
(90,945)
|
|
90,945
|
|
35
|
(1,089)
|
|
(1,248)
|
-
|
(28,608)
|
|
(966)
|
-
|
4,756
|
|
|
Euro
|
-
|
|
-
|
|
-
|
-
|
|
(375)
|
-
|
688
|
|
(331)
|
-
|
-
|
|
|
Canadian Dollar
|
-
|
|
-
|
|
-
|
-
|
|
50,861
|
-
|
(106,291)
|
|
-
|
-
|
-
|
|
|
Rupee
|
(12,834)
|
|
12,834
|
|
789
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
1,043,872
|
|
(1,043,872)
|
|
(3)
|
7,841
|
|
76,511
|
-
|
-
|
|
24,873
|
-
|
-
|
|
|
American Dollar
|
592,341
|
|
(592,341)
|
|
(3)
|
7,832
|
|
37,254
|
-
|
-
|
|
12,320
|
-
|
-
|
|
|
Euro
|
51,531
|
|
(51,531)
|
|
-
|
110
|
|
7,954
|
-
|
-
|
|
315
|
-
|
-
|
|
|
Interest rate
|
400,000
|
|
(400,000)
|
|
-
|
(101)
|
|
31,303
|
-
|
-
|
|
12,238
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debts
|
|
|
(2,547,901)
|
|
2,000,198
|
|
18,424
|
(61,222)
|
|
(21,660)
|
-
|
-
|
|
(21,023)
|
-
|
-
|
|
|
American Dollar
|
(1,874,157)
|
|
1,326,454
|
|
2,576
|
(48,488)
|
|
(7,518)
|
-
|
-
|
|
(18,873)
|
-
|
-
|
|
|
Interest rate
|
(673,744)
|
|
673,744
|
|
15,848
|
(12,734)
|
|
(14,142)
|
-
|
-
|
|
(2,150)
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Investments
|
|
|
-
|
|
-
|
|
-
|
-
|
|
(1,161)
|
-
|
35,348
|
|
-
|
-
|
-
|
|
|
American Dollar
|
-
|
|
-
|
|
-
|
-
|
|
(937)
|
-
|
37,166
|
|
-
|
-
|
-
|
|
|
Euro
|
-
|
|
-
|
|
-
|
-
|
|
44
|
-
|
1,683
|
|
-
|
-
|
-
|
|
|
Canadian Dollar
|
-
|
|
-
|
|
-
|
-
|
|
(268)
|
-
|
(3,501)
|
|
-
|
-
|
-
|
Total
|
|
|
(10,938,420)
|
|
10,207,269
|
|
212,981
|
(713,380)
|
|
(881,840)
|
709,625
|
(1,177,309)
|
|
(488,955)
|
245,054
|
(507,946)
|
40
I.
Market
risk
a.1) Foreign currency
risk
The Company
is exposed to foreign currency risk on borrowings,
investments, purchases, dividends and/or interest expense/income whenever they
are denominated in currency other than the functional currency of the
subsidiary. The main derivatives financial instruments used to manage foreign
currency risk are futures contracts, swaps, options, non deliverable forwards
and full deliverable forwards.
a.2) Commodity
Risk
A significant portion of the Company inputs comprises
commodities, which historically have experienced substantial price fluctuations.
The Company therefore uses both fixed price purchasing contracts and derivative
financial instruments to minimize its exposure to commodity price volatility.
The Company has important exposures to the following commodities: aluminum,
sugar, wheat and corn. These derivative financial instruments have been
designated as cash flow hedges.
a.3) Interest rate
risk
The Company a
pplies a dynamic interest rate hedging approach whereby
the target mix between fixed and floating rate debt is reviewed periodically.
The purpose of t
he Company
’s policy is to achieve an optimal balance between cost
of funding and volatility of financial results, taking into account market
conditions as well as
the Company
’s overall business strategy and this strategy is
reviewed periodically.
The table below demonstrates the
Company’s exposure related to debts, before and after interest rates hedging
strategy.
|
06/30/2017
|
|
Pre - Hedge
|
|
Post - Hedge
|
|
Interest rate
|
Amount
|
|
Interest rate
|
Amount
|
Brazilian Real
|
8.0%
|
894,038
|
|
6.3%
|
404,881
|
Working capital in Argentinean peso
|
24.7%
|
26,368
|
|
24.7%
|
26,368
|
Dominican Peso
|
9.7%
|
287,223
|
|
9.7%
|
287,223
|
American Dollar
|
3.6%
|
26,552
|
|
3.6%
|
26,552
|
Working Capital in Paraguayan
Guarani
|
10.5%
|
693
|
|
10.5%
|
693
|
Guatemala´s Quetzal
|
7.9%
|
10,317
|
|
7.9%
|
10,317
|
Interest rate pre-set
|
|
1,245,191
|
|
|
756,034
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazilian Real
|
9.3%
|
479,563
|
|
9.9%
|
2,295,279
|
American Dollar
|
1.9%
|
1,887,164
|
|
2.5%
|
560,605
|
Canadian Dollar
|
1.6%
|
1,327,810
|
|
1.6%
|
1,327,810
|
Barbadian Dollar
|
2.3%
|
4,969
|
|
2.3%
|
4,969
|
Interest rate
postfixed
|
|
3,699,506
|
|
|
4,188,663
|
41
|
|
|
12/31/2016
|
|
Pre - Hedge
|
|
Post - Hedge
|
|
Interest rate
|
Amount
|
|
Interest rate
|
Amount
|
Brazilian Real
|
6.8%
|
1,223,500
|
|
6.2%
|
841,923
|
Dominican Peso
|
9.7%
|
288,808
|
|
9.7%
|
288,808
|
American Dollar
|
6.0%
|
11,561
|
|
6.0%
|
1,797
|
Guatemala´s Quetzal
|
8.0%
|
9,947
|
|
8.0%
|
9,947
|
Barbadian Dollar
|
4.3%
|
48,517
|
|
4.3%
|
48,517
|
Interest rate pre-set
|
|
1,582,333
|
|
|
1,190,992
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazilian Real
|
10.0%
|
667,703
|
|
12.6%
|
2,375,614
|
American Dollar
|
1.5%
|
1,882,252
|
|
2.2%
|
565,683
|
Canadian Dollar
|
1.6%
|
1,259,107
|
|
1.6%
|
1,259,106
|
Barbadian Dollar
|
2.7%
|
4,915
|
|
2.7%
|
4,915
|
Interest rate
postfixed
|
|
3,813,977
|
|
|
4,205,318
|
Sensitivity
analysis
The Company mitigates risks arising from non-derivative
financial assets and liabilities substantially, through derivative
financial
instruments. In this context, the Company has identified
the main risk factors that may generate losses from these derivative financial
instruments and has developed a sensitivity analysis based on three scenarios,
which may impact the Company’s future results and/or cash flow, as described
below:
1 – Probable scenario: Management
expectations of deterioration in each transaction’s main risk factor. To measure
the possible effects on the results of derivative transactions, the Company uses
parametric Value at Risk – VaR. is a statistical measure developed through
estimates of standard deviation and correlation between the returns of several
risk factors. This model results in the loss limit expected for an asset over a
certain time period and confidence interval. Under this methodology, we used the
potential exposure of each financial instrument, a range of 95% and horizon of
21 days after June 30, 2017 for the calculation, which are presented in the
module.
2 – Adverse scenario: 25% deterioration in each
transaction’s main risk factor as compared to the level observed on June 30,
2017.
3 – Remote scenario: 50% deterioration in each
transaction’s main risk factor as compared to the level observed on June 30,
2017.
42
Transaction
|
Risk
|
Fair Value
|
Probable
scenario
|
Adverse
scenario
|
Remote
scenario
|
|
|
|
|
|
|
Commodities hedge
|
Decrease on commodities
price
|
(27,944)
|
(79,974)
|
(430,359)
|
(832,774)
|
Input purchase
|
27,944
|
76,426
|
372,762
|
717,581
|
Foreign exchange
hedge
|
Foreign currency
decrease
|
85,094
|
25,878
|
(1,716,561)
|
(3,518,216)
|
Input purchase
|
(85,094)
|
(25,878)
|
1,716,561
|
3,518,216
|
Costs effects
|
|
-
|
(3,548)
|
(57,597)
|
(115,193)
|
|
|
|
|
|
|
Foreign exchange
hedge
|
Foreign currency
decrease
|
5,863
|
1,304
|
(140,800)
|
(287,463)
|
Capex Purchase
|
(5,863)
|
(1,304)
|
140,800
|
287,463
|
Fixed assets
effects
|
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
Foreign exchange
hedge
|
Foreign currency
decrease
|
862
|
183
|
(27,373)
|
(55,609)
|
Expenses
|
(862)
|
(183)
|
27,373
|
55,609
|
Expenses effects
|
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
Hedge cambial
|
Foreign currency
increase
|
(395)
|
(10,506)
|
(285,467)
|
(570,538)
|
Cash
|
395
|
10,506
|
285,467
|
570,538
|
Interest Hedge
|
Decrease in interest rate
|
(24)
|
(186)
|
(3,707)
|
(4,289)
|
Interest revenue
|
24
|
186
|
3,707
|
4,289
|
Cash effects
|
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
Hedge cambial
|
Foreign currency
decrease
|
786
|
(13,306)
|
(336,775)
|
(674,335)
|
Cash
|
(786)
|
7,178
|
189,985
|
380,756
|
Interest Hedge
|
Increase in interest
rate
|
24,654
|
17,129
|
(126,749)
|
(148,766)
|
Interest expenses
|
(24,654)
|
(17,129)
|
126,749
|
148,766
|
Debt effects
|
|
-
|
(6,128)
|
(146,790)
|
(293,579)
|
Equity Instrument
Hedge
|
ADR's price decrease
|
2,175
|
(2,278)
|
(80,530)
|
(163,235)
|
Expenses
|
(2,175)
|
(13,459)
|
(211,765)
|
(421,355)
|
Equity effects
|
|
-
|
(15,737)
|
(292,295)
|
(584,590)
|
|
|
-
|
(25,413)
|
(496,682)
|
(993,362)
|
43
As of June 30, 2017 the Notional and Fair Value amounts per instrument and maturity were as follows:
|
|
Notional Value
|
Exposure
|
Risk
|
2017
|
2018
|
2019
|
2020
|
>2020
|
Total
|
|
|
|
|
|
|
|
|
Cost
|
|
6,722,176
|
2,094,105
|
-
|
-
|
-
|
8,816,281
|
|
Commodity
|
856,383
|
753,278
|
-
|
-
|
-
|
1,609,661
|
|
American Dollar
|
5,649,128
|
1,149,364
|
-
|
-
|
-
|
6,798,492
|
|
Euro
|
24,201
|
61,927
|
-
|
-
|
-
|
86,128
|
|
Mexican Peso
|
192,464
|
129,536
|
-
|
-
|
-
|
322,000
|
|
|
|
|
|
|
|
|
Fixed asset
|
|
513,243
|
73,409
|
-
|
-
|
-
|
586,652
|
|
American Dollar
|
468,015
|
73,409
|
-
|
-
|
-
|
541,424
|
|
Euro
|
45,228
|
-
|
-
|
-
|
-
|
45,228
|
|
|
|
|
|
|
|
|
Expenses
|
|
83,961
|
28,981
|
-
|
-
|
-
|
112,942
|
|
American Dollar
|
77,575
|
22,145
|
-
|
-
|
-
|
99,720
|
|
Rupee
|
6,386
|
6,836
|
-
|
-
|
-
|
13,222
|
|
|
|
|
|
|
|
|
Cash
|
|
(1,140,286)
|
-
|
-
|
15,000
|
-
|
(1,125,286)
|
|
American Dollar
|
(1,140,286)
|
-
|
-
|
-
|
-
|
(1,140,286)
|
|
Brazilian Real
|
-
|
-
|
-
|
15,000
|
-
|
15,000
|
|
|
|
|
|
|
|
|
Debt
|
|
1,650,241
|
-
|
-
|
-
|
399,559
|
2,049,800
|
|
American Dollar
|
1,350,241
|
-
|
-
|
-
|
-
|
1,350,241
|
|
Brazilian Real
|
300,000
|
-
|
-
|
-
|
399,559
|
699,559
|
|
|
|
|
|
|
|
|
Equity Instrument
|
|
-
|
330,820
|
-
|
-
|
-
|
330,820
|
|
ADR's Price
|
-
|
330,820
|
-
|
-
|
-
|
330,820
|
|
|
7,829,335
|
2,527,315
|
-
|
15,000
|
399,559
|
10,771,209
|
|
|
Fair Value
|
Exposure
|
Risk
|
2017
|
2018
|
2019
|
2020
|
>2020
|
Total
|
|
|
|
|
|
|
|
|
Cost
|
|
104,909
|
(47,759)
|
-
|
-
|
-
|
57,150
|
|
Commodity
|
35,910
|
(63,854)
|
-
|
-
|
-
|
(27,944)
|
|
American Dollar
|
61,862
|
(18,289)
|
-
|
-
|
-
|
43,573
|
|
Euro
|
45
|
1,269
|
-
|
-
|
-
|
1,314
|
|
Mexican Peso
|
7,092
|
33,115
|
-
|
-
|
-
|
40,207
|
|
|
|
|
|
|
|
|
Fixed asset
|
|
5,995
|
(132)
|
-
|
-
|
-
|
5,863
|
|
American Dollar
|
6,027
|
(132)
|
-
|
-
|
-
|
5,895
|
|
Euro
|
(32)
|
-
|
-
|
-
|
-
|
(32)
|
|
|
|
|
|
|
|
|
Expenses
|
|
1,255
|
(393)
|
-
|
-
|
-
|
862
|
|
American Dollar
|
884
|
(229)
|
-
|
-
|
-
|
655
|
|
Rupee
|
371
|
(164)
|
-
|
-
|
-
|
207
|
|
|
|
|
|
|
|
|
Cash
|
|
(20,877)
|
20,482
|
-
|
(24)
|
-
|
(419)
|
|
American Dollar
|
(20,877)
|
20,482
|
-
|
-
|
-
|
(395)
|
|
Interest rate
|
-
|
-
|
-
|
(24)
|
-
|
(24)
|
|
|
|
|
|
|
|
|
Debt
|
|
(1,574)
|
-
|
-
|
-
|
27,014
|
25,440
|
|
American Dollar
|
786
|
-
|
-
|
-
|
-
|
786
|
|
Interest rate
|
(2,360)
|
-
|
-
|
-
|
27,014
|
24,654
|
|
|
|
|
|
|
|
|
Equity Instrument
|
|
-
|
2,175
|
-
|
-
|
-
|
2,175
|
|
ADR's Price
|
-
|
2,175
|
-
|
-
|
-
|
2,175
|
|
|
89,708
|
(25,627)
|
-
|
(24)
|
27,014
|
91,071
|
44
II.
Credit
Risk
Concentration of credit risk on trade
receivables
A substantial part of the Company’s
sales is made to distributors, supermarkets and retailers,
within a broad distribution network.
Credit risk is reduced because of the widespread number of customers and control
procedures used to monitor risk. Historically, the Company has not experienced
significant losses on receivables from customers.
Concentration of credit risk on
counterpart
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 limits and credit analysis of
financial institutions, avoiding credit concentration, i.e., the credit risk is
monitored and minimized to the extent that negotiations are carried out only
with a select group of highly rated counterparties.
The selection process of financial
institutions authorized to operate as the Company’s counterparty is set forth in
our Credit Risk Policy. This Credit Risk Policy establishes maximum limits of
exposure to each counterparty based on the risk rating and on each
counterparty's capitalization.
In order to minimize the risk of credit
with its counterparties on significant derivative transactions, the Company has
adopted bilateral “trigger” clauses. According to these clauses, where the fair
value of an operation exceeds a percentage of its notional value (generally
between 10% and 15%), the debtor settles the difference in favor of the
creditor.
As of June 30, 2017, the Company held its main short-term
investments with the following financial institutions: Banco do Brasil,
Bradesco, Bank Mendes Gans, Caixa Econômica Federal, Citibank, Itaú, JP Morgan
Chase, Merrill Lynch, Santander e Toronto Dominion Bank. The Company had
derivative agreements with the following financial institutions: Banco Bisa,
Barclays, BNB, BNP Paribas, Bradesco, Citibank, Deutsche Bank, Itaú, Goldman
Sachs, JP Morgan Chase, Macquarie, Merrill Lynch, Morgan Stanley, Santander,
ScotiaBank e TD Securities.
The carrying amount 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 represents the maximum exposure of credit risks of June 30, 2017.
There was no concentration of credit risk with any counterparties as of June 30,
2017.
III.
Liquidity
Risk
The Company
believes that
cash flows
from operating
activities
,
cash and
cash
equivalents and
short-term
investments
, together
with
the derivative
financial instruments and access to
loan facilities are sufficient to
finance capital expenditures, financial liabilities and dividend payments in the
future.
45
IV.
Equity price risk
Through the equity swap transaction approved on May 16th,
2017 by the Board of Directors of Ambev, the Company, or its controlled entity,
will receive the price variation related to its shares traded on the stock
exchange or ADRs, neutralizing the possible effects of the stock prices’
oscillation in view of the share-based payment of the Company. As these
derivative instruments are not characterized as hedge accounting they were not
therefore designated to any hedge.
In June 2017, an exposure equivalent to R$1.5 billion in
AmBev’s shares (or ADR’s) was partially hedged, resulting in a gain in income
statement of R$ 2,175
V.
Capital
management
Ambev is continuously optimizing its capital structure
targeting to maximize shareholder value while keeping the desired financial
flexibility to execute the strategic projects. Besides the statutory minimum
equity funding requirements that apply to the Company’s subsidiaries in the
different countries, Ambev is not subject to any externally imposed capital
requirements. When analyzing its capital structure, the Company uses the same
debt ratings and capital classifications as applied in the Company’s financial
statements.
Financial instruments
(a)
Financial instruments categories
Management
of the financial
instruments held by the Company is
effected through
operational strategies and internal
controls
to assure
liquidity,
profitability and transaction security
.
Financial instruments
transactions are
regularly reviewed
for the effectiveness
of
the
risk exposure
that
management
intends
to cover
(foreign exchange,
interest rate,
etc.).
46
The table below shows all financial instruments
recognized in the financial statements,
segregated
by
category
:
|
06/30/2017
|
|
Loans and
receivables
|
Held for
trading
|
Financial assets/liabilities at
fair value through profit or loss
|
Derivatives
hedge
|
Financial liabilities through
amortized cost
|
Total
|
Financial assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
8,757,342
|
-
|
-
|
-
|
-
|
8,757,342
|
Investment
securities
|
-
|
94,475
|
8,770
|
-
|
-
|
103,245
|
Trade receivables excluding
prepaid expenses
|
6,077,769
|
-
|
-
|
-
|
-
|
6,077,769
|
Financial instruments
derivatives
|
-
|
-
|
29,661
|
259,765
|
-
|
289,426
|
Total
|
14,835,111
|
94,475
|
38,431
|
259,765
|
-
|
15,227,782
|
|
|
|
|
|
|
|
Financial
liabilities
|
|
|
|
|
|
|
Trade payables and put option
granted on subsidiary and other liabilities
|
-
|
-
|
5,388,275
|
-
|
10,609,431
|
15,997,706
|
Financial instruments
derivatives
|
-
|
-
|
55
|
198,300
|
-
|
198,355
|
Interest-bearning loans and
borrowings
|
-
|
-
|
-
|
-
|
4,917,636
|
4,917,636
|
Total
|
-
|
-
|
5,388,330
|
198,300
|
15,527,067
|
21,113,697
|
|
12/31/2016
|
|
Loans and
receivables
|
Held for
trading
|
Financial assets/liabilities at fair
value through profit or loss
|
Derivatives
hedge
|
Financial liabilities through
amortized cost
|
Total
|
Financial assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
7,876,849
|
-
|
-
|
-
|
-
|
7,876,849
|
Investment
securities
|
-
|
104,340
|
282,771
|
-
|
-
|
387,111
|
Trade receivables excluding
prepaid expenses
|
6,962,541
|
-
|
-
|
-
|
-
|
6,962,541
|
Financial instruments
derivatives
|
-
|
-
|
18,424
|
194,557
|
-
|
212,981
|
Total
|
14,839,390
|
104,340
|
301,195
|
194,557
|
-
|
15,439,482
|
|
|
|
|
|
|
|
Financial
liabilities
|
|
|
|
|
|
|
Trade payables and put option
granted on subsidiary and other liabilities
|
-
|
-
|
5,106,125
|
-
|
13,208,075
|
18,314,200
|
Financial instruments
derivatives
|
-
|
-
|
49,850
|
663,530
|
-
|
713,380
|
Interest-bearning loans and
borrowings
|
-
|
-
|
-
|
-
|
5,396,310
|
5,396,310
|
Total
|
-
|
-
|
5,155,975
|
663,530
|
18,604,385
|
24,423,890
|
(b) Classification of financial
instruments by type of fair value measurement
IFRS 13 defines fair value as the price
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date.
Also pursuant to IFRS 13, financial
instruments measured at fair value shall be classified within the following
categories
:
47
Level 1 – quoted prices (unadjusted) in
active markets for identical assets or liabilities that the entity can access at
the measurement date valuation;
Level 2 – inputs other than quoted
prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and
Level 3 – unobservable inputs for the
asset or liability.
|
06/30/2017
|
|
12/31/2016
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Financial
assets
|
|
|
|
|
|
|
|
|
|
Financial asset at fair value
through profit or loss
|
8,770
|
-
|
-
|
8,770
|
|
282,771
|
-
|
-
|
282,771
|
Derivatives assets at fair value
through profit or loss
|
472
|
29,189
|
-
|
29,661
|
|
2,576
|
15,848
|
-
|
18,424
|
Derivatives - operational
hedge
|
27,162
|
232,603
|
-
|
259,765
|
|
83,611
|
110,946
|
-
|
194,557
|
|
36,404
|
261,792
|
-
|
298,196
|
|
368,958
|
126,794
|
-
|
495,752
|
Financial
liabilities
|
|
|
|
|
|
|
|
|
|
Financial liabilities at fair
value through profit and loss
(i)
|
-
|
-
|
5,388,275
|
5,388,275
|
|
-
|
-
|
5,106,125
|
5,106,125
|
Derivatives liabilities at fair
value through profit or loss
|
55
|
-
|
-
|
55
|
|
9,919
|
39,931
|
-
|
49,850
|
Derivatives - operational
hedge
|
103,332
|
92,608
|
-
|
195,940
|
|
78,935
|
575,867
|
-
|
654,802
|
Derivatives - fair value
hedge
|
-
|
2,360
|
-
|
2,360
|
|
-
|
8,728
|
-
|
8,728
|
|
103,387
|
94,968
|
5,388,275
|
5,586,630
|
|
88,854
|
624,526
|
5,106,125
|
5,819,505
|
(i) Refers to the put option granted on subsidiary as
described in Note 13 d(4).
Reconciliation of changes in the categorization of Level
3
Financial liabilities at December 31,
2016
(i)
|
5,106,125
|
Acquisition of
investments
|
7,134
|
Total gains and losses in the
period
|
275,016
|
Losses recognized in net
income
|
282,515
|
Gain recognized in equity
|
(7,499)
|
Financial liabilities at June 30, 2017
(i)
|
5,388,275
|
(i) The liability was recorded under “Trade payables and
put option granted on subsidiary and other liabilities” on the balance
sheet.
(c) Fair value of financial liabilities
measured at amortized cost
The Company’s liabilities,
interest-bearing loans and borrowings, trade payables excluding tax payables,
are recorded at amortized cost according to the effective rate method, plus
indexation and foreign exchange gains/losses, based on closing indices for each
exercise.
If the Company had recognized its
financial liabilities measured at amortized at cost, at fair value, it would
have recorded an additional gain, before income tax and social contribution, of
approximately R$1,537 on June 30, 2017 (gain of R$2,622 on December 31, 2016),
related to Bond 2017. The other financial instruments recorded at amortized cost
are similar to the fair value and are not material for
disclosure.
The criteria used to determine the fair
value of the debt securities was based on quotations of investment brokers, on
quotations of banks which provide services to Ambev and on the
secondary market value of bonds as of
June 30, 2017, being approximately 99.49% for Bond 2017 (97.91% at December 31,
2016).
48
Calculation of fair value of
derivatives
The Company measures derivative
financial instruments by calculating their present value, through the use of
market curves that impact the instrument on the computation dates. In the case
of swaps, both the asset and the liability positions are estimated independently
and brought to present value, where the difference between the result of the
asset and liability amount generates the swaps market value. For the traded
derivative financial instruments, the fair value is calculated according to the
adjusted exchange-listed price.
Margins given in
guarantee
In order to comply with the guarantee requirements of the
derivative exchanges and/or counterparties in certain operations with derivative
financial
instruments, as of June 30, 2017 the Company held
R$52.728
in highly liquid financial investments or in
cash,
classified as cash and cash equivalents and investment
securities (R$486,822 on December 31, 2016).
Offsetting of financial assets and
liabilities
For financial assets and liabilities subject to
settlement agreements by the net or similar agreements, each agreement between
the Company and the counterparty allows this type of settlement when both
parties make this option. In the absence of such election, the assets and
liabilities will be settled by their amounts, but each party shall have the
option to settle on net, in case of default by the
counterparty.
22.
COLLATERAL AND CONTRACTUAL COMMITMENTS
WITH SUPLLIERS, ADVANCES FROM CUSTOMERS AND OTHER
|
06/30/2017
|
12/31/2016
|
|
|
|
Collateral given for own
liabilities
|
610,042
|
1,051,538
|
Other commitments
|
801,630
|
754,306
|
|
1,411,672
|
1,805,844
|
|
|
|
Commitments with
suppliers
|
7,908,434
|
4,019,236
|
Commitments - Bond 2017
|
300,000
|
300,000
|
|
8,208,434
|
4,319,236
|
The collateral provided for liabilities
totaled approximately R$1,411,672 on June 30, 2017 (R$1,805,844 on December 31,
2016), including
R$564,897 (R$571,305 on December 31,
2016)
of cash guarantees. The deposits in
cash used as guarantees are presented as part of other assets. To meet the
guarantees required by derivative exchanges and/or counterparties contracted in
certain derivative financial instrument transactions, Ambev maintained on June
30, 2017,
R$52,728 (R$486,822 on December 31,
2016)
in highly liquid financial
investments or in cash,
classified as cash and cash equivalents
and investment securities
(Note 21 –
Financial instruments and
risks
).
49
Most of the balance relates to commitments with suppliers
of packaging.
Ambev is full guarantor of the Bond 2017 in amount of
R$300,000, remunerated at 9.5% per year, with semiannual interest payments and
final maturity in July 2017, which was issued by Ambev International that is a
100% owned finance subsidiary of the Company.
Future contractual commitments on June
30, 2017 a
nd
December 31, 2016 are as
follows:
|
06/30/2017
|
12/31/2016
|
|
|
|
Less than 1 year
|
4,367,323
|
3,325,724
|
Between 1 and 2 years
|
2,526,882
|
420,777
|
More than 2 years
|
1,314,229
|
572,735
|
|
8,208,434
|
4,319,236
|
23.
CONTINGENCIES
The Company has
contingent liabilities arising from lawsuits in the normal course of its
business.
Due to their nature, such legal proceedings
involve inherent uncertainties including, but not limited to, court and
tribunals rulings, negotiations between affected parties and governmental
actions, and as a consequence the Company’s management cannot at this stage
estimate the likely timing of the resolution of these matters.
Contingent
liabilities with a probable likelihood of loss are fully recorded as liabilities
(Note 12 –
Provisions
).
The Company also has lawsuits related to tax, civil and
labor, for which the likelihood of loss classified by management as possible and
for which there are no provisions. Estimates of amounts of possible losses are
as follows:
|
06/30/2017
|
12/31/2016
|
|
|
|
IRPJ and CSLL
|
29,872,497
|
28,934,826
|
PIS and COFINS
|
2,423,265
|
1,971,048
|
ICMS and IPI
|
16,947,079
|
16,046,890
|
Labor
|
246,262
|
222,037
|
Civil
|
4,706,769
|
4,417,574
|
Others
|
836,974
|
858,075
|
|
55,032,846
|
52,450,450
|
Principal lawsuits
with
a likelihood of
possible loss:
The significant changes in the main processes with a
possible likelihood of loss in relation to those presented in the financial
statements for the year ended December 31, 2016 refers to the monetary variation
of the period. There was no new lawsuit individually relevant to the previous
period.
50
Contingent assets
According to IAS 37, contingent assets
are not recorded in consolidated financial statements, except when the
realization of income is virtually certain.
24.
NON-CASH ITEMS
The Company carried out the following
investment and financing activities not involving cash:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
Acquisition of investments
payables
|
-
|
278,602
|
|
-
|
255,594
|
Cash financing cost other than
interests
|
66,661
|
57,667
|
|
60,543
|
14,866
|
Others
|
-
|
(1,565)
|
|
-
|
(1,565)
|
25.
RELATED PARTIES
Policies and practices regarding the
realization of transactions with related parties
The Company adopts corporate governance
practices and those recommended and/or required by the applicable
law.
Under the Company’s bylaws the Board of
Directors is responsible for approving any transaction or agreements between the
Company and/or any of its subsidiaries, directors and/or shareholders (including
shareholders, direct or indirect shareholders of the Company). The Antitrust
Compliance and Related Parties Committee of the Company is required to advise
the Board of Directors of the Company in matters related to transactions with
related parties.
Management is prohibited from
interfering in any transaction in which conflict exists, even in theory, with
the Company interests. It is also not permitted to interfere in decisions of any
other management member, requiring documentation in the Minutes of Meeting of
the Board any decision to abstain from the specific
deliberation.
The Company’s guidelines with related
parties follow reasonable or commutative terms, similar to those prevailing in
the market or under which the Company would contract similar transactions with
third parties. These are clearly disclosed in the financial statements as
reflected in written contracts.
Transactions with management
members:
In addition to short-term benefits
(primarily salaries), the management members are entitled to participate in
Stock Option Plan (Note 20 –
Share-based payments
).
51
Total expenses related to the Company’s
management members are as follows:
|
Six-month period
ended:
|
|
Three-month period
ended:
|
|
06/30/2017
|
06/30/2016
|
|
06/30/2017
|
06/30/2016
|
|
|
|
|
|
|
Short-term benefits
(i)
|
10,128
|
10,595
|
|
5,096
|
3,926
|
Share-based payments
(ii)
|
16,138
|
19,682
|
|
6,956
|
7,757
|
Total key management remuneration
|
26,266
|
30,277
|
|
12,052
|
11,683
|
(i) These correspond substantially to
management’s salaries and profit sharing (including performance
bonuses
).
(ii) These correspond to the
compensation cost of stock options and restricted stocks granted to
management. These amounts exclude remuneration paid to members of the Fiscal
Council
.
Excluding the above mentioned plan (Note
20 –
Share-based payments
), the Company no longer has any type of
transaction with the Management members or pending balances receivable or
payable in its balance sheet.
Transactions with the Company's
shareholders:
a
) Medical,
dental and other
benefits
The Fundação Antonio e Helena Zerrenner
Instituição Nacional de Beneficiência (“Fundação Zerrenner) is one of Ambev’s
shareholders, and at June 30, 2017 held 10.0% of total share capital. Fundação
Zerrenner is also an independent legal entity whose main goal is to provide
Ambev’s employees, both active and retirees, with health care and dental
assistance, technical and superior education courses, facilities for assisting
elderly people, through direct initiatives or through financial assistance
agreements with other entities. On June 30, 2017 and December 31, 2016,
actuarial responsibilities related to the benefits provided directly by Fundação
Zerrenner are fully funded by plan assets, held for that purpose, which
significantly exceeds the liabilities at these dates. Ambev recognizes the
assets (prepaid expenses) of this plan to the extent of amounts from economic
benefits available to the Company, arising from reimbursements or future
contributions reduction.
The expenses incurred by Fundação
Zerrenner in providing these benefits totaled
R$135,640
(R$124,938 on June 30, 2016), of which
R$119,536
and
R$16,104
related to active employees and
retirees
respectively
(R$107,308 and R$17,629 on June 30, 2016
related to active employees and retirees
respectively).
b) Leasing
The Ambev, through its subsidiary BSA
(labeling), has an asset leasing agreement with Fundação Zerrenner, for R$63,328
for ten years, maturing on March 31, 2018.
c) Leasing – Ambev head
office
Ambev has a leasing agreement of two
commercial sets with Fundação Zerrenner in the annual amount of R$3,255,
maturing on January,
2020.
52
d) Licensing agreement
The Company maintains a licensing agreement with
Anheuser-Busch, Inc., to produce, bottle, sell and distribute Budweiser products
in Brazil, Canada, and sales and distribution agreements of Budweiser products
in Guatemala, Dominican Republic, Paraguay, El Salvador, Nicaragua, Uruguay and
Chile. In addition, the Company produces and distributes Stella Artois products
under license to ABI in Brazil and Canada and, by means of a license granted to
ABI, it also distributes Brahma’s product in the United States and several
countries such as the United Kingdom, Spain, Sweden, Finland and Greece. The
amount recorded was R$866 (R$1,075 on June 30, 2016) and R$164,951 (R$197,062
on June 30, 2016) as licensing income and expense,
respectively.
Ambev has licensing agreements with the Group Modelo,
subsidiaries of ABI, for to import, promote and sell products Corona
(
Corona Extra
,
Corona Light
,
Coronita
,
Pacifico a
nd
Negra Modelo
) in countries of the Latin America and the
Canada.
Transactions with related
parties
|
|
|
|
|
|
06/30/2017
|
Current
|
Trade receivables
(i)
|
Other Trade receivables
(i)
|
Trade payables
(i)
|
Other Trade payables
(i)
|
Borrowings and interest
payable
|
Dividends payables
|
AB InBev
|
374
|
15,158
|
(317,254)
|
(746)
|
-
|
-
|
AB Services
|
467
|
21,079
|
(15)
|
(5,032)
|
-
|
-
|
AB USA
|
14,037
|
13,816
|
(287,671)
|
(3,350)
|
-
|
-
|
Ambev Peru
|
8,672
|
205
|
(18,899)
|
(17)
|
-
|
-
|
Ambrew
|
-
|
-
|
-
|
-
|
-
|
(205,489)
|
Cervecería Modelo
|
84,714
|
1,704
|
(719,659)
|
(57,502)
|
-
|
-
|
Inbev
|
128
|
22,096
|
(35,139)
|
-
|
-
|
-
|
ITW International
|
-
|
-
|
-
|
(212,540)
|
(34,257)
|
(1,350,713)
|
Panama Holding
|
-
|
13,636
|
-
|
(1,429)
|
-
|
-
|
Others
|
1,939
|
2,703
|
(61,720)
|
(11,129)
|
-
|
-
|
|
110,331
|
90,397
|
(1,440,357)
|
(291,745)
|
(34,257)
|
(1,556,202)
|
(i
) The amount represents the marketing operations (purchase
and sale) and the reimbursement between the companies of the
group.
|
12/31/2016
|
Current
|
Trade receivables
(i)
|
Other Trade receivables
(i)
|
Trade payables
(i)
|
Other Trade payables
(i)
|
Borrowings and interest
payable
|
Dividends payables
|
AB InBev
|
6,278
|
13,414
|
(308,866)
|
(687)
|
-
|
-
|
AB Package
|
-
|
-
|
(31,301)
|
-
|
-
|
-
|
AB Services
|
275
|
15,175
|
(10)
|
(3,098)
|
-
|
-
|
AB USA
|
19,737
|
18,623
|
(247,389)
|
(1,675)
|
-
|
-
|
Ambev Peru
|
7,095
|
-
|
(4,679)
|
-
|
-
|
-
|
Ambrew
|
-
|
-
|
-
|
-
|
-
|
(89,902)
|
Bogotá Beer
|
-
|
210,961
|
-
|
(210,961)
|
-
|
-
|
Cervecería Modelo
|
1,071
|
-
|
(444,080)
|
-
|
-
|
-
|
Inbev
|
182
|
17,599
|
(17,553)
|
(169)
|
-
|
-
|
ITW International
|
-
|
-
|
-
|
(209,385)
|
(30,455)
|
(590,937)
|
Modelo
|
32
|
986
|
(15,685)
|
(54,476)
|
-
|
-
|
Others
|
2,579
|
7,255
|
(6,185)
|
(14,441)
|
-
|
-
|
|
37,249
|
284,013
|
(1,075,748)
|
(494,892)
|
(30,455)
|
(680,839)
|
(i) The amount represents the marketing operations
(purchase and sale) and the reimbursement between the companies of the
group.
53
The tables below represent the transactions with related
parties, recognized in the income statement:
|
Six-month period ended:
06/30/2017
|
Company
|
Buying / Service fees /
Rentals
|
Sales
|
Royalties / Benefits
|
Net Finance Cost
|
AB USA
|
(149,196)
|
21,883
|
(126,281)
|
-
|
Ambev Peru
|
(8,469)
|
1,410
|
-
|
-
|
Cervecería Modelo
|
(242,846)
|
62
|
(22,061)
|
-
|
Inbev
|
(33,636)
|
-
|
-
|
-
|
Others
|
(42,707)
|
1,540
|
(15,743)
|
(3,338)
|
|
(476,854)
|
24,895
|
(164,085)
|
(3,338)
|
|
Three-month period ended:
06/30/2017
|
Company
|
Buying / Service fees /
Rentals
|
Sales
|
Royalties / Benefits
|
Net Finance Cost
|
AB USA
|
(74,467)
|
9,868
|
(79,172)
|
-
|
Ambev Peru
|
(3,548)
|
458
|
-
|
-
|
Cervecería Modelo
|
(159,107)
|
34
|
(16,717)
|
-
|
Inbev
|
(19,647)
|
-
|
-
|
-
|
Others
|
(25,460)
|
933
|
(6,934)
|
(4,162)
|
|
(282,229)
|
11,293
|
(102,823)
|
(4,162)
|
|
Six-month period ended:
06/30/2016
|
|
Three-month period ended:
06/30/2016
|
Company
|
Buying / Service fees /
Rentals
|
Sales
|
Royalties / Benefits
|
|
Buying / Service fees /
Rentals
|
Sales
|
Royalties /
Benefits
|
AB Inbev
|
(9,394)
|
-
|
(18,996)
|
|
(6,198)
|
-
|
(3,426)
|
AB USA
|
(83,033)
|
26,950
|
(151,683)
|
|
(46,970)
|
12,456
|
(88,134)
|
Cervecería Modelo
|
(283,665)
|
380
|
(25,570)
|
|
(107,677)
|
278
|
(18,975)
|
InBev
|
(37,352)
|
-
|
-
|
|
(19,981)
|
-
|
-
|
Modelo
|
(33,828)
|
-
|
-
|
|
(25,065)
|
(41)
|
-
|
Others
|
(39,768)
|
-
|
(637)
|
|
(17,116)
|
-
|
(312)
|
|
(487,040)
|
27,330
|
(196,886)
|
|
(223,007)
|
12,693
|
(110,847)
|
Denomination used in the tables above
:
Ambrew S.A. (“Ambrew”)
|
Anheuser-Busch InBev N.V. (“AB
InBev”)
|
Anheuser-Busch Packaging Group Inc.
(“AB Package”)
|
Anheuser-Busch Inbev Services LLC (“AB
Services”)
|
Anheuser-Busch Inbev USA LLC (“AB
USA”)
|
Bogotá Beer Company BBC S.A.S. (“Bogotá
Beer”)
|
Compañia Cervecer Ambev Peru S.A.C. (“Ambev
Peru”)
|
Cervecería Modelo de Guadalajara S.A.
(“Modelo”)
|
Cervecería Modelo de Mexico S. de R.L. de C.V.
(“Cervecería Modelo”)
|
Cervecería Nacional S. de R.L. (“Panama
Holding”)
|
Inbev Belgium N.V. (“Inbev”)
|
Interbrew International B.V. (“ITW
International”)
|
54
26.
EVENTS AFTER THE REPORTING PERIOD
On July 24, 2017, the contractual commitment related to Bond 2017 in the amount of R$314,250 was due.
55
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 11, 2017
|
|
|
|
AMBEV S.A.
|
|
|
|
|
By:
|
/s/
Ricardo Rittes de Oliveira Silva
|
|
Ricardo Rittes de Oliveira Silva
Chief Financial and Investor Relations Officer
|
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