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Corticeira Amorim
Interim / Quarterly Report • Sep 27, 2024
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Interim / Quarterly Report
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CORTICEIRA AMORIM CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2024
First semester 2024(1H24) (Audited) Secondquarter 2024(2Q24) (Non audited)
1
Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails
CONSOLIDATED MANAGEMENT REPORT
1. SUMMARY OF ACTIVITY
Global economic growth slowed during the second quarter of 2024. Despite promising signs at the beginning of the period, the expected momentum failed to materialise as evidence accumulated of an economic slowdown. The acceleration of US consumption proved insufficient to compensate for a deceleration in China's growth rate and the stabilisation of economic activity in Europe.
Growth in the Eurozone continued to recover in the second quarter after a long period of stagnation. Quarter-onquarter economic growth was estimated at about 0.3% in the second three months of 2024, higher than expected and similar to the growth rate recorded in the first quarter. The year-on-year increase is estimated at 0.6%, compared with 0.4% in the first three months. France and Spain stood out among the economies contributing to Eurozone growth. Contrary to expectations, the German economy is estimated to have contracted by 0.1% in the second quarter of 2024.
Second quarter year-on-year economic growth in the US is estimated at 2.8%, compared with 1.4% in the first three months and higher than forecasts of about 2.0%. Elections and political instability had the biggest impact on business sentiment, generating uncertainty and volatility. The resilience of the US consumer and price rigidity led to the postponement of monetary policy changes.
China's GDP grew by 4.7% in the second quarter, below both the expectations of economists and the 5.3% recorded in the first quarter. Economic activity is believed to have been hindered by negative trends in consumption and the real estate sector, which continue to be the two major obstacles to Chinese economic growth.
Corticeira Amorim's consolidated sales totalled €500.7 million in the first six months of 2024, a decrease of 7.1% compared with the same period of the previous year. This was mainly due to lower sales volumes. Sales fell by 4.8% in the second quarter, a deceleration compared with the drop in the first quarter (9.7%). The exchange rate effect had an almost negligible impact in the first half. Excluding this effect, sales at the end of the first six months would have decreased by the same percentage of 7.1%.
All the Group's Business Units (BUs) experienced sales pressure, except for Amorim Cork Composites, whose sales rose to €60 million (+3.2% compared with the same period of 2023. Sales by Amorim Cork (-7.1% compared with the same period in 2023) were affected by reduced volumes across all segments, although they benefited from improvements in the product mix and price increases.
In regard to the other BUs, sales fell by 6.8% at Amorim Forestry, 13.4% at Amorim Cork Insulation and 10.7% at Amorim Cork Flooring.
Consolidated EBITDA fell to €94.4 million in the first six months of 2024, compared with €103.8 million in the same period of the previous year. Consumption of raw material cork purchased at higher prices and the negative
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impact of operational deleveraging were key factors in this reduction. The consolidated EBITDA-sales ratio was 18.9% (1H23: 19.2%). Amorim Cork stood out as the only BU to maintain its level of profitability during the first half.
The results from associates and non-controlling interests fell by 11.2% and 16.9% respectively compared with the same period of 2023.
After accounting for results attributable to non-controlling interests, Corticeira Amorim closed the first half of 2024 with a net profit of €36.5 million, a reduction of 28.9% compared with the same period of 2023. This reduction reflects non-recurring costs associated with the short-term implementation of an Industrial Optimisation Plan, a reassessment of the market offering of Amorim Cork Flooring products and higher financial charges due to rising interest rates and a higher level of indebtedness.
By the end of June, net interest-bearing debt had decreased to €237.5 million (12M23: €240.8 million), despite the payment of dividends (€26.6 million), an increase in working capital needs (€30.0 million) and investment in fixed assets (€22.2 million).
2. OPERATING ACTIVITIES - FIRST HALF 2024
The Amorim Florestal BU recorded sales of €122.9 million, a decrease of 6.8% compared with the same period of 2023. This drop in activity was due to reduced demand from Corticeira Amorim's other BUs.
EBITDA totalled €8.0 million, a reduction compared with the same period of the previous year (€12.6 million). The reduction in the EBITDA margin (from 9.6% in 1H23 to 6.5% in 1H24) was mainly due to the increased cost of raw materials, reduced activity and higher operational costs, notably increased electricity and personnel costs.
The 2024 cork campaign has almost been completed, with a deceleration in inflationary pressure on prices and raw material cork requirements secured for the coming year.
The Forestry Intervention Project at Herdade de Rio Frio and Herdade da Baliza continues to follow the path previously set out, with plantations proceeding as planned.
The BU will continue to develop more efficient technologies to improve processes, ranging from forestry to the manufacture and selection of cork discs.
The Amorim Cork BU recorded sales of €393.3 million, a reduction of 7.1% compared with the same period in 2023.
A drop in volume sales was the main reason for the reduction, although improvements were made in the product mix. Price increases were also implemented.
The exchange rate effect had no material impact; at constant exchange rates, the decrease in sales would also have been 7.1%.
The consolidation of the VMD group added €10.7 million to sales.
Volume sales fell in every segment and in most wine markets, reflecting the impact of stock reductions in the value chain. The spirits segment underperformed, with the mitigating factor that it showed strong growth in the comparable period of 2023. Despite an overall decrease, the still wines segment showed some sales stability. Neutrocork continued to stand out in this segment, demonstrating solid growth in sales value.
The BU's EBITDA totalled €84.7 million, compared with €91.0 million in the same period of 2023. The EBITDA margin was 21.5% (21.5% in the same period of 2023). Increased cork prices and a decrease in operational activity exerted pressure on profitability, but the EBITDA margin remained stable, supported by an improvement in the product mix, lower transport costs, increased sales prices, greater industrial efficiency and a reduction in non-cork raw material prices.
A partial reversal of a provision (€2.2 million) related to the industrial reorganisation of an Amorim Cork subsidiary was recognised under non-recurring gains.
The Amorim Cork Flooring BUrecorded sales of €44.2 million, a decrease of 10.7% compared with the same period of 2023. The challenging conditions affecting the flooring market in Europe continue to have a negative impact on the demand for manufactured products. This was the main cause of the BU's drop in sales, despite the positive evolution of trade product sales.
Sales fell for most product lines, especially those that are being discontinued. New products were launched at the beginning of the year, but their contribution to overall sales remained limited.
A positive sales performance was recorded for the Scandinavian and Canadian markets, but in every other region, including Germany, the BU's most important market, no signs of recovery were observed.
The Amorim Cork Flooring BU recorded a negative EBITDA of €2.9 million, compared with a negative EBITDA of €2.7 million in the same period of 2023. A reduction in operational activity was the main cause of the decline in the EBITDA margin, which was further impacted by price drops, a less favourable product mix and higher marketing, electricity, and transportation costs.
The business climate of the European flooring sector is significantly restrained: sales fell by about 20% in 2023. The economic climate in the construction sector is also unfavourable. Reflecting increasingly intense competition from Asian producers, major players in the sector have suffered significant losses and implemented cost-reduction measures. Amorim Cork Flooring's activity has also been affected by these adverse conditions and has recorded losses in recent years. These losses worsened in the early months of 2024. It is thus become necessary to adjust the BU's cost structure to reduce operational losses and increase efficiency through industrial optimisation. This will initially involve adjusting production and support structures to current sales volumes.
Non-recurring expenses totalling €4 million were recognised, related to restructuring measures included in the industrial optimisation plan that is being implemented at the BU. A further €3.5 million in non-recurring expenses were also recognised, related to the decision to reassess the BU's market offering of new products. These expenses were mainly related to marketing tools, inventory impairments and product development.
Sales by the Amorim Cork Composites BU totalled €60.0 million, an increase of 3.2% compared with the same period of 2023. In terms of sales, price increases and the product mix offset the decrease in volume sales.
The largest sales increases were in the following segments: Resilient & Engineered Flooring Manufacturers, Footwear and Sports Surfaces. The largest decreases were in the Heavy Construction, Cork Specialists and Rail segments.
Joint ventures made a notably positive contribution with sales totalling €4.9 million, an increase of 23.9% compared with the previous year.
EBITDA for the period totalled €10.9 million (€11.9 million in the same period of 2023). The EBITDA margin was 18.1% (1H23: 20.3%). Despite the decrease in the EBITDA margin, it remains at a high level, supported by structural changes in the product mix over recent years as well as benefiting from industrial efficiencies and the lower prices of non-cork materials. Profitability was negatively impacted by the reduction in operational activity, higher cork prices and higher operational costs (especially for electricity, personnel and maintenance and repair).
First-half sales by the Amorim Cork Insulation BUtotalled €8.6 million, a reduction of 13.4% compared with the same period of the previous year. The decrease in sales reflects a reduction in volume sales despite a marginal increase in prices.
EBITDA stood at a negative €1.7 million, compared with a negative €0.6 million in the first half of 2023. The BU's EBITDA is highly sensitive to the price of cork, as this is the only raw material it uses to manufacture its products. As a result, the climate of rising cork prices has had a significant impact on profitability. After two years of significant increases in cork prices, an expected normalisation of prices is forecast to support margins by the end of the year. A more sustainable recovery of margins will depend on increasing volume sales.
3. CONSOLIDATED PROFIT AND LOSS ACCOUNT AND FINANCIAL POSITION
As previously mentioned, the drop in sales (-7.1%) results from a reduction in sales across all the Group's BUs, except for Amorim Cork Composites.
The change in the gross margin percentage was positive, increasing from 51.5% to 54.2%. This essentially reflects an increase in market sales prices and the lower cost of consuming non-cork raw materials.
In regard to operating expenses, the increase of approximately €2.1 million in personnel costs (+2.1%) compared with the same period of 2023 is explained by the perimeter effect (consolidation of the VMD Group) and salary increases. Third party supplies and services increased by 2.4%. Despite a decrease in transport costs (-16.6%)), increases in other items, such as electricity (+33.5%) led to an overall increase in third party supplies and services for the period.
Other operating income/cost items impacting EBITDA remained virtually unchanged. The effect of exchange rate differences on receivable assets and payable liabilities and the respective exchange rate risk hedges included in other operating income/gains was negative, amounting to approximately €0.8 million (1S23: +€0.3 million).
EBITDA decreased by 9.0% to €94.4 million. The EBITDA-sales ratio was 18.9% (1S23: 19.2%).
As previously explained, €7.5 million of non-recurring expenses were recognised by the Amorim Cork Flooring BU in the second quarter, as well as €2.2 million in non-recurring income at the Amorim Cork BU.
Compared with the same period of 2023, financial results deteriorated, reflecting cost increases and the average level of financing.
The earnings of associated companies totalled €3.1 million, a reduction compared with the same period of the previous year (1S23: €3.4 million).
As usual, it will only be possible to estimate the value of investment tax benefits for 2024 (RFAI and SIFIDE) at the end of the financial year. As a result, any tax gain will be recorded only at the close of the 2024 accounts.
Earnings from non-controlling interests decreased compared with the same period in 2023 (€4.7 million vs €5.6 million).
After income tax of €15.8 million and the allocation of results to non-controlling interests, the net result attributable to Corticeira Amorim shareholders totalled €36.5 million, a decrease of 28.9% compared with net results of €51.4 million in the first half of 2023.
Earnings per share were €0.275 (1S23: €0.386).
In terms of the Group's financial position, assets increased by €30 million compared with December 2023. The increases under the Trade receivables item (€44 million) and Other current assets (€29 million) was mainly due to advances made for raw material purchases. The Inventories item decreased by about €41 million, thus achieving Corticeira Amorim's objective of improving inventory management.
The change in Equity (excluding non-controlling interests) was mainly due to the results for the period (+€36.5 million) and the dividends distributed (€26.6 million). The variation in the Non-controlling interests item results from the earnings for the period attributable to non-controlling interests, offset by dividends distributed to noncontrolling interests.
In regard to liabilities, the reduction in the Trade Payables item (-€17 million), offset by the increase in Other current financial liabilities (+€11 million) and Income tax (+€11 million) due to the increase in estimated tax merits noting.
At the end of June 2024, Equity stood at €811 million. The financial autonomy ratio was 56.1%.
4. KEY CONSOLIDATED INDICATORS
| 1H23 | 1H24 | yoy | 2Q23 | 2Q24 | qoq | ||
|---|---|---|---|---|---|---|---|
| Sales | 539,269 | 500,736 | -7.1% | 279,382 | 266,041 | -4.8% | |
| Gross Margin – Value | 277,875 | 271,402 | -2.3% | 141,403 | 139,968 | -1.0% | |
| Gross Margin / Sales | 51.5% | 54.2% | + 2.7 p.p. | 50.6% | 52.6% | + 2.0 p.p. | |
| Operating Costs - current | 200,652 | 206,396 | 2.9% | 98,604 | 103,926 | 5.4% | |
| EBITDA - current | 103,774 | 94,444 | -9.0% | 55,869 | 50,765 | -9.1% | |
| EBITDA/Sales | 19.2% | 18.9% | -0.38 p.p. | 20.0% | 19.1% | -0.92 p.p. | |
| EBIT - current | 77,223 | 65,006 | -15.8% | 42,799 | 36,041 | -15.8% | |
| Net Income | 1) | 51,360 | 36,542 | -28.9% | 27,588 | 20,460 | -25.8% |
| Earnings per share | 0.386 | 0.275 | -28.9% | 0.207 | 0.154 | -25.8% | |
| Net Bank Debt | 187,247 | 237,462 | 50,216 | - | - | - | |
| Net Bank Debt/EBITDA (x) | 2) | 1.10 | 1.42 | 0.31 x | - | - | - |
| EBITDA/Net Interest (x) | 3) | 73.0 | 45.5 | -27.42 x | 65.8 | 53.2 | -12.59 x |
1) Includes non-recurring results, mainly related to Amorim Cork Flooring's restructuring plan.
2) Current EBITDA of the past four quarters.
3) Net interest includes interest from loans deducted of interest from deposits (excludes stamp tax and commissions).
5. OUTLOOK FOR THE SECOND HALF
Economic evidence of a slowdown in the second half of 2024 is accumulating. This climate may affect the performance of Corticeira Amorim in the second half of the year. Nevertheless, the goal is to recover part of the reduction in activity, although some constraints may arise that affect an improvement in the market.
6. BUSINESS RISKS AND UNCERTAINTIES
Corticeira Amorim, like all other companies, operates in the climate of economic uncertainty that is affecting global markets.
The risks and uncertainties listed in the Company's annual report remain up to date. It should be noted that at the end of the first half of 2024, with the Group's cork purchasing needs for 2025 assured, Corticeira Amorim will continue to respond uninterruptedly to its customers needs throughout the world, adopting the best and most appropriate practices at all times. The Company's diversification policy and practices - not just one product, not just one market, not just one currency - will provide additional balance.
Corticeira Amorim's activity is exposed to a variety of financial risks: market risk (including exchange-rate risk and interest-rate risk), credit risk, liquidity risk and capital risk. The Company's objectives and policies regarding the management of these risks, including its hedging policies for each of the main categories of likely transactions for which hedging accounting is used, as well as exposure to price, credit, liquidity and cash flow risks are set out in the note: "Financial Risk Management", which is included in the Notes to the Consolidated Accounts.
7. OWN SECURITIES
Throughout the first half of 2024, Corticeira Amorim did not acquire or dispose of any of its own shares.
On June 30, 2024, Corticeira Amorim did not hold any of its own shares.
8. SHAREHOLDERS' EQUITY
Relationships of shareholders holding qualified equity stakes on the date of closing this report:
| Shares Held | Holding | Voting Rights | |
|---|---|---|---|
| Shareholder | (quantity) | (%) | (%) |
| Qualified Holdings: | |||
| Amorim Investimentos e Participações, S.G.P.S., S.A. | 67 830 000 | 51.000% | 51.000% |
| Amorim, Soc. Gestora de Participações Sociais, S.A. | 13 414 387 | 10.086% | 10.086% |
| A Porta da Lua, SA | 8 290 767 | 6.234% | 6.234% |
| API – Amorim Participações Internacionais, S.A. | 2 717 195 | 2.043% | 2.043% |
| Vintage Prime – S.G.P.S., S.A. | 2 717 195 | 2.043% | 2.043% |
| Freefloat (a) | 38 030 456 | 28.594% | 28.594% |
| Total | 133 000 000 | 100.000% | 100.000% |
(a) Includes 3 045 823 shares (2.29%) held by funds under the management of Santander Asset Management, SA, SGIIC (communication received by the company on 6 June 2019).
| Shareholders Amorim Investimentos e Participações, SGPS, S.A. (b) |
No. of shares | % Capital with voting rights |
||
|---|---|---|---|---|
| Directly | 67 830 000 | 51.000% | ||
| Total attributable | 67 830 000 | 51.000% | ||
| (b) Shares with voting rights in Amorim Investimentos e Participações, SGPS, S.A. are entirely held by three companies, Amorim | ||||
| Holding Financeira, SGPS, S.A. (11.392%), Amorim Holding II, SGPS, S.A. (38.608%) and Amorim - Sociedade Gestora de | ||||
| Participações Sociais, S.A. (50%) without any of these companies having any participation in the company's business affairs, thus | ||||
| thereby terminating the chain of responsibility under the terms of Art. 20 of the CVM Code. The share capital and voting rights of the | ||||
| aforementioned three companies is, in turn, held respectively, in the case of the first two, directly and indirectly by Mrs. Maria |
| Shareholder A Porta da Lua, S.A. |
No. of shares | % Capital with voting rights |
|
|---|---|---|---|
| Directly | 8 290 767 | 6.234% | |
| Total attributable | 8 290 767 | 6.234% |
Fernanda Oliveira Ramos Amorim and daughters and, in the case of the third, by Mr. António Ferreira de Amorim, wife and children.
| No. of shares | % Capital with voting rights |
|---|---|
| - | - |
| 8 290 767 | 6.234% |
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Total attributable 8 290 767 6.234%
(c) The equity capital of the company A Porta da Lua, S.A. is held entirely by Maria Fernanda Oliveira Ramos Amorim.
| API – Amorim Participações Internacionais, S.A. | % Capital with voting rights |
||
|---|---|---|---|
| Directly | 2 717 195 | 2.043% | |
| Total attributable | 2 717 195 | 2.043% |
| Marta Cláudia Ramos Amorim Barroca de Oliveira | No. of shares | % Capital with voting rights |
|
|---|---|---|---|
| Directly | - | - | |
| Through the shareholder API – Amorim Participações Internacionais, S.A (d) | 2 717 195 | 2.043% | |
| Total attributable | 2 717 195 | 2.043% |
(d) The equity capital of the company API – Amorim Participações Internacionais, S.A. is held entirely by Marta Cláudia Ramos Amorim Barroca de Oliveira.
| Vintage Prime – S.G.P.S., S.A. | % Capital with voting rights |
|||
|---|---|---|---|---|
| Directly | 2 717 195 | 2.043% | ||
| Total attributable | 2 717 195 | 2.043% |
| Luisa Alexandra Ramos Amorim | No. of shares | % Capital with voting rights |
|
|---|---|---|---|
| Directly | - | - | |
| Through the shareholder Vintage Prime – S.G.P.S., S.A (e) | 2 717 195 | 2.043% | |
| Total attributable | 2 717 195 | 2.043% |
(e) The equity capital of the company Vintage prime – S.G.P.S., S.A. is entirely held by Luisa Alexandra Ramos Amorim.
| Shareholder Amorim, Sociedade Gestora de Participações Sociais, S.A. (f) |
No. of shares | % Capital with voting rights |
|---|---|---|
| Directly | 13 414 387 | 10.086% |
| Total attributable | 13 414 387 | 10.086% |
(f) The capital of Amorim, Sociedade Gestora de Participações Sociais, S.A. is held by Mr. António Ferreira de Amorim, wife and children and with no family member participating in the running of the company.
9. TRANSACTIONS BY DIRECTORS AND OFFICERS
In the first half of 2024 there were no transactions in shares or financial instruments related with those issued by Corticeira Amorim either by their Executives or by the companies that own Corticeira Amorim, or by persons or entities closely related to them.
10. LIST OF SHAREHOLDERS OWNING MORE THAN ONE TENTH OF THE COMPANY'S SHARE CAPITAL
On the date of issuing this report, the following shareholders owned more than a tenth of the share capital of Corticeira Amorim:
- I. Amorim Investimentos e Participações, S.A. was the holder of 67 830 000 shares in Corticeira Amorim, corresponding to 51% of the share capital and voting rights;
- II. Amorim, Sociedade Gestora de Participações Sociais, S.A. was the holder of 13 414 387 shares in Corticeira Amorim, corresponding to 10.086% of the share capital and voting rights.
11. SUBSEQUENT EVENTS
No significant events that could materially affect the financial position or the future results of Corticeira Amorim, or the subsidiary companies that make up the consolidated group, occurred prior to the date of issue of this report.
12. STATEMENT OF RESPONSIBILITY
In compliance with that established in line c) of paragraph 1 of article 246 of the CVM Code, the members of the Board of Directors hereby declare that, to the best of their knowledge, the quarterly reports and other accounting documents were drafted in compliance with the applicable accountancy norms, provide a true and appropriate image of the assets and liabilities, the financial situation and the results of Corticeira Amorim, SGPS, S.A. and the companies included in its perimeter of consolidation. They furthermore declare that the management report faithfully sets out the trends in business, the performance and position of Corticeira Amorim, SGPS, S.A. and the companies included in its perimeter of consolidation, with the aforementioned report containing a specific chapter detailing the main business risks and uncertainties arising in the following six months.
Mozelos, July 29, 2024
The Board of Directors of Corticeira Amorim, S.G.P.S., S.A.
António Rios de Amorim (Chairman)
Luisa Alexandra Ramos Amorim (Vice- Chairman)
Cristina Rios de Amorim Baptista (Member)
Nuno Filipe Vilela Barroca de Oliveira (Member)
Fernando José de Araújo dos Santos Almeida (Member)
Juan Ginesta Viñas (Member)
João Nuno de SottoMayor Pinto de Castelo Branco (Member)
José Pereira Alves (Member)
Maria Cristina Galhardo Vilão (Member)
António Manuel Mónica Lopes de Seabra (Member)
Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto (Member)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position
| thousand euros | ||||
|---|---|---|---|---|
| Notes | June 30, 2024 |
December 31, 2023 |
June 30, 2023 |
|
| Assets | ||||
| Tangible assets | 8 | 431,470 | 438,297 | 409,208 |
| Intangible assets | 9 | 16,097 | 18,018 | 19,677 |
| Right of use | 11 | 4,952 | 5,046 | 4,094 |
| Goodwill | 9 | 23,870 | 23,872 | 18,889 |
| Biological assets | 10 | 4,956 | 4,952 | 6,154 |
| Investment property | 12 | 2,215 | 2,241 | 4,224 |
| Investments in associates and joint ventures | 13 | 35,461 | 32,630 | 34,166 |
| Otherfinancial assets | 14 | 2,091 | 2,097 | 2,337 |
| Deferred tax assets | 15 | 22,781 | 20,203 | 16,934 |
| Other debtors | 18 | 1,526 | 1,895 | 2,164 |
| Non-current assets | 545,418 | 549,251 | 517,848 | |
| Inventories | 16 | 475,195 | 516,497 | 442,715 |
| Biological assets | 10 | 1,391 | 1,391 | 0 |
| Trade receivables | 17 | 246,952 | 203,080 | 266,466 |
| Income tax assets | 15 | 5,259 | 7,951 | 5,053 |
| Other debtors | 14 | 40,690 | 41,726 | 43,246 |
| Other current assets | 18 | 51,191 | 21,937 | 66,818 |
| Cash and cash equivalents | 19 | 78,854 | 73,394 | 65,568 |
| Current assets | 899,532 | 865,974 | 889,865 | |
| Total Assets | 1,444,950 | 1,415,225 | 1,407,714 | |
| Equity | ||||
| Share capital | 20 | 133,000 | 133,000 | 133,000 |
| Other reserves | 20 | 551,427 | 488,311 | 505,206 |
| Net Income | 36,542 | 88,897 | 51,360 | |
| Non-Controlling Interest | 21 | 90,170 | 89,835 | 83,645 |
| Total Equity | 811,139 | 800,044 | 773,210 | |
| Liabilities | ||||
| Interest-bearing loans | 22 | 123,981 | 101,793 | 129,705 |
| Other financial liabilities | 24 | 7,772 | 8,300 | 10,320 |
| Provisions | 25 | 8,347 | 7,942 | 4,828 |
| Post-employment benefits | 3,270 | 3,228 | 2,701 | |
| Deferred tax liabilities | 15 | 44,784 | 42,715 | 40,671 |
| Non-current liabilities | 188,154 | 163,979 | 188,224 | |
| Interest-bearing loans | 22 | 192,336 | 212,440 | 123,110 |
| Trade payables | 23 | 142,306 | 159,000 | 214,014 |
| Other financial liabilities | 24 | 62,312 | 51,497 | 56,153 |
| Other liabilities | 24 | 34,180 | 24,320 | 32,962 |
| Income tax liabilities | 15 | 14,524 | 3,946 | 20,040 |
| Current liabilities | 445,657 | 451,203 | 446,280 | |
| Total Liabilities and Equity | 1,444,950 | 1,415,225 | 1,407,714 |
(this statement should be read with the attached notes to the consolidated financial statements)
Consolidated income statement by nature
| thousand euros | |||||
|---|---|---|---|---|---|
| 2Q24 | 2Q23 | ||||
| (non audited) | (non audited) | Notes | 1H24 | 1H23 | |
| 266,041 | 279,382 | Sales | 7 | 500,736 | 539,269 |
| -118,031 | -144,688 | Costs of goods sold and materials consumed | -231,809 | -283,132 | |
| -8,043 | 6,709 | Change in manufactured inventories | 2,475 | 21,738 | |
| -39,906 | -36,413 | Third party supplies and services | -78,741 | -76,901 | |
| -51,361 | -50,548 | Staff costs | -102,383 | -100,270 | |
| 336 | -421 | Impairments of assets | 26 | 220 | -959 |
| 3,534 | 3,482 | Other income and gains | 8,483 | 8,417 | |
| -1,805 | -1,634 | Other costs and losses | -4,537 | -4,386 | |
| 50,765 | 55,869 | Operating profit before depreciation | 94,444 | 103,774 | |
| -14,724 | -13,070 | Depreciation | 8, 9, 10, 11,12 |
-29,438 | -26,551 |
| 36,041 | 42,799 | Operating profit | 65,006 | 77,223 | |
| -1,296 | 0 | Non-recurrent results | 27 | -5,296 | 0 |
| -3,481 | -1,941 | Financial costs | -6,429 | -2,991 | |
| 380 | 215 | Financial income | 685 | 290 | |
| 1,662 | 1,825 | Share of (loss)/profit of associates and joint-ventures | 13 | 3,056 | 3,441 |
| 33,307 | 42,897 | Profit before tax | 57,022 | 77,963 | |
| -10,523 | -12,750 | Income tax | 15 | -15,796 | -20,969 |
| 22,784 | 30,147 | Profit after tax | 41,226 | 56,994 | |
| -2,324 | -2,560 | Non-controlling Interest | 21 | -4,684 | -5,634 |
| 20,460 | 27,588 | Net Income attributable to the equity holders of Corticeira Amorim |
36,542 | 51,360 | |
| 0.154 | 0.207 | Earnings per share - Basic e Diluted (euros per share) |
0.275 | 0.386 |
(this statement should be read with the attached notes to the consolidated financial statements)
Consolidated statement of comprehensive income
| thousand euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2Q24 (non audited) |
2Q23 (non audited) |
Notes | 1H24 | 1H23 | ||||
| 22,784 | 30,147 | Net Income | 41,226 | 56,994 | ||||
| Itens that may be reclassified through income statement: | ||||||||
| - 40 |
- 271 |
Change in derivative financial instruments fair value | 15 | - 127 |
56 | |||
| 282 | - 4,263 | Change in translation differences and other | 15 | 726 | - 524 |
|||
| 240 | - 182 |
Share of other comprehensive income of investments accounted for using the equity method |
15 | - 227 |
262 | |||
| - 522 |
- 92 |
Other comprehensive income | 15 | - 442 |
10 | |||
| -40 | -4,809 | Other comprehensive income (net of tax) | -69 | -196 | ||||
| 22,744 | 25,339 | Total Net compreensive income | 41,156 | 56,798 | ||||
| Attributable to: | ||||||||
| 20,186 | 22,970 | Corticeira Amorim Shareholders | 37,361 | 51,072 | ||||
| 2,558 | 2 ,369 | Non-controlling Interest | 3,795 | 5,726 |
(this statement should be read with the attached notes to the consolidated financial statements)
(items in this Statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in note 15)
Consolidated statement of cash flow
| thousand euros | ||||||
|---|---|---|---|---|---|---|
| (non audited) | 2Q24 | 2Q23 (non audited) |
Notes | 1H24 | 1H23 | |
| OPERATING ACTIVITIES | ||||||
| 258,008 | 275,922 | Collections from customers | 487,769 | 508,964 | ||
| -188,579 | -222,791 | Payments to suppliers | -378,887 | -456,151 | ||
| -43,820 | -45,204 | Payments to employees | -88,016 | -87,568 | ||
| 25,609 | 7,927 | Operational cash flow | 20,865 | -34,755 | ||
| -2,444 | -2,945 | Payments/collections - income tax | -2,120 | -7,605 | ||
| 17,447 | 24,875 | Other collections/payments related with operational activities | 39,903 | 55,774 | ||
| 40,612 | 29,858 | CASH FLOW FROM OPERATING ACTIVITIES | 58,649 | 13,414 | ||
| INVESTMENT ACTIVITIES | ||||||
| Collections due to: | ||||||
| -118 | 842 | Tangible assets | 283 | 1,555 | ||
| 21 | 0 | Intangible assets | 33 | 0 | ||
| 96 | -396 | Financial investments | 96 | 0 | ||
| 0 | 1,841 | Other financial assets | 0 | 1,841 | ||
| 0 | -26 | Other assets | 0 | 0 | ||
| 463 | 83 | Interests and similar gains | 831 | 447 | ||
| 0 | 1,342 | Dividends | 0 | 1,342 | ||
| Payments due to: | ||||||
| -9,466 | -25,841 | Tangible assets | -20,588 | -45,156 | ||
| -217 | -802 | Intangible assets | -1,297 | -1,246 | ||
| -9,221 | -22,513 | CASH FLOW FROM INVESTMENTS | -20,642 | -41,217 | ||
| FINANCIAL ACTIVITIES | ||||||
| Collections due to: | ||||||
| 41,809 | 86,105 | Loans | 52,450 | 86,105 | ||
| 165 | 508 | Government grants | 3,936 | 508 | ||
| 360 | 770 | Others | 566 | 1,589 | ||
| 0 | 0 | Payments due to: | ||||
| -18,135 | -50,405 | Loans | -18,135 | -52,250 | ||
| -3,200 | -1,664 | Interests and similar expenses | -6,461 | -2,789 | ||
| -12 | 368 | Leasing | -456 | -874 | ||
| -26,600 | -26,550 | Dividends paid to company's shareholders | 20 | -26,600 | -26,600 | |
| -3,460 | -634 | Dividends paid to non-controlling interest | 21 | -3,460 | -634 | |
| -427 | -857 | Government grants | -1,343 | -1,626 | ||
| -167 | -234 | Others | -338 | -405 | ||
| -9,666 | 7,409 | CASH FLOW FROM FINANCING | 160 | 3,024 | ||
| 21,725 | 14,311 | Change in cash | 38,166 | -24,779 | ||
| 372 | -50 | Exchange rate effect | -188 | -158 | ||
| 0 | 0 | Cash at beginning | 19 | -12,869 | 35,341 | |
| 22,097 | 14,261 | Cash at end | 19 | 25,109 | 10,403 |
(this statement should be read with the attached notes to the consolidated financial statements)
Consolidated Statement of Changes in Equity
thousand euros
| Attributable to owners of Corticeira Amorim, SGPS, S.A. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Notes | Share capital |
Paid-in capital |
Hedge accounting |
Translation difference |
Legal reserve |
Other reserves |
Net income | Non controlling interests |
Total Equity | |
| Balance sheet as at January 1, 2023 | 133,000 | 38,893 | 623 | -4,185 | 26,600 | 372,260 | 98,395 | 79,339 | 744,926 | |
| Profit for the year | 20 | - | - | - | - | 0 | 98,395 | -98,395 | - | |
| Dividends | 20 | - | - | - | - | - | - 26,600 |
- | -634 | -27,234 |
| Perimeter variation | 21 | - | - | - | - | - | 27 | - | 0 | 27 |
| Changes in the percentage of interest retaining control |
21 | - | - | - | - | - | -519 | - | -786 | -1,305 |
| Consolidated Net Income for the period | 20 e | - | - | - | - | - | - | 51,360 | 5,634 | 56,994 |
| Change in derivative financial instruments fair value |
21 3 |
- | - | 56 | - | - | - | - | - | 56 |
| Change in exchange differences | 20 e 21 |
- | - | - | -534 | - | - | - | 10 | -524 |
| Other comprehensive income of associates | 13 | - | - | - | 262 | - | - | - | 262 | |
| Other comprehensive income | - | - | - | - | - | -72 | - | 82 | 10 | |
| Total comprehensive income for the period | 0 | 0 | 56 | - 272 | 0 | - 72 | 51,360 | 5,726 | 56,798 | |
| Balance sheet as at June 30, 2023 | 133,000 | 38,893 | 679 | -4,457 | 26,600 | 443,491 | 51,360 | 83,645 | 773,210 | |
| Balance sheet as at January 1, 2024 | 133,000 | 38,893 | 74 | -6,677 | 26,600 | 429,421 | 88,898 | 89,835 | 800,044 | |
| Profit for the year | 20 | - | - | - | - | 0 | 88,898 | -88,898 | - | |
| Dividends | 20 | - | - | - | - | - | - 26,600 |
- | -3,460 | -30,060 |
| Perimeter variation | 21 | - | - | - | - | - | - | - | 0 | |
| Changes in the percentage of interest retaining control |
21 | - | - | - | - | - | - | - | 0 | |
| Consolidated Net Income for the period | 20 e 21 |
- | - | - | - | - | - | 36,542 | 4,684 | 41,226 |
| Change in derivative financial instruments fair value |
3 | - | - | -127 | - | - | - | - | - | -127 |
| Change in exchange differences | 20 e 21 |
- | - | - | 1,316 | - | - | - | -590 | 726 |
| Other comprehensive income of associates | 13 | - | - | - | -227 | - | - | - | -227 | |
| Other comprehensive income | - | - | - | - | - | -143 | - | -299 | -442 | |
| Total comprehensive income for the period | 0 | 0 | - 127 | 1,089 | 0 | - 143 | 36,542 | 3,795 | 41,156 | |
| Balance sheet as at June 30, 2024 | 133,000 | 38,893 | -53 | -5,588 | 26,600 | 491,575 | 36,542 | 90,170 | 811,139 |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. INTRODUCTION
At the beginning of 1991, Corticeira Amorim, S.A. was transformed into Corticeira Amorim, S.G.P.S., S.A., the holding company for the cork business sector of the Amorim Group. In this report, Corticeira Amorim will be the designation of Corticeira Amorim, S.G.P.S., S.A., and in some cases the designation of Corticeira Amorim, S.G.P.S. together with all of its subsidiaries.
Corticeira Amorim is mainly engaged in the acquisition and transformation of cork into a numerous set of cork and cork related products, which are distributed worldwide through its network of sales company.
Corticeira Amorim is a Portuguese company with a registered head office in Mozelos, Santa Maria da Feira. Its share capital amounts to 133 million euros, which are publicly traded in the Euronext Lisbon – Sociedade Gestora de Mercados Regulamentados, S.A.
Amorim - Investimentos e Participações, S.G.P.S, S.A. held, as of December 31, 2023 and June 30, 2024, 67,830,000 shares of Corticeira Amorim, corresponding to 51.00% of the capital stock. Corticeira Amorim consolidates in Amorim – Investimentos e Participações, S.G.P.S., S.A., which is its controlling and Mother Company. Amorim – Investimentos e Participações, S.G.P.S., S.A. is owned by Amorim family.
These financial statements were approved in the Board Meeting of July 29, 2024. Shareholders have the capacity to modify these financial statements even after their release.
Except when mentioned, all monetary values are stated in thousand euros (Thousand euros = K euros = K€).
2. SUMMARY OF ACCOUNTING POLICIES
The condensed consolidated financial statements as of June 30, 2024 were prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with International Accounting Standard 34 - Interim Financial Reporting, and include the statement of financial position, the income statement, the income statement and other comprehensive income, the statement of changes in equity and the condensed statement of cash flows, as well as the selected explanatory notes. The remaining notes were excluded because they have not suffered any changes in their standards which may affect the understanding of the financial statements.
The accounting policies adopted in the preparation of the condensed consolidated financial statements of Corticeira Amorim are consistent with those used in the preparation of the financial statements presented for the year ended December 31, 2023, with the exception of the accounting policy for "share-based payment" which became applicable in the current period, due to the entry into force of the new remuneration policy, which was approved at the General Meeting of shareholders held on April 22, 2024.
Below we present a summary of the applicable accounting policy:
Share-based payment
Benefits granted to employees under share purchase or share option incentive plans are recorded in accordance with the provisions of IFRS 2 – Share-based payments.
In accordance with the terms of the current remuneration plan, Corticeira Amorim grants eligible employees a right to receive a future payment in cash, as the right gives plan beneficiaries a right to shares that are redeemable at the at its discretion, meaning that the benefit granted to employees is classified as a cashsettled share-based payment transaction.
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED FINANCIAL STATEMENTS - FIRST HALF 2024
IFRS 2 determines, for payment transactions based on shares and settled in cash (cash settled), the recognition of an expense as the services are provided, against a liability, which must be measured at fair value at each reporting date. Corticeira Amorim recognizes share-based payment expenses under the heading 'Staff expenses'.
Until the liability is settled, the entity remeasures the fair value of the liability at the end of each reporting period and on the settlement date, with any changes in fair value recognized in profit or loss for the period.
The liability will be measured, initially and at the end of each reporting period until settled, at the fair value of the share appreciation rights.
Changes in accounting policies and disclosures
In addition to the adoption of the accounting policy for share-based payment mentioned above, the standards and interpretations that became effective as of 1 January 2024 are as follows:
- IAS 1 (amendment), 'Classification of liabilities as Non-current and Current' and 'Non-current liabilities with covenants'. These amendments clarify that liabilities are classified as either current or non-current balances depending on the rights that an entity has to defer its settlement for at least 12 months after the reporting date. They clarify also that the covenants that an entity is required to comply with, on or before the reporting date, affect the classification of a liability as current or noncurrent, even if the covenants are only assessed after the entity's reporting date. When an entity classifies liabilities arising from loan arrangements as non-current and those liabilities are subject to covenants, it is required to disclose information that enables investors to assess the risk that the liabilities could become repayable within 12 months, such as: a) the carrying amount of the liabilities; b) the nature of the covenants and the compliance dates; and c) the facts and circumstances that indicate that the entity may have difficulty complying with covenants when it is required to do so. These amendments are applied retrospectively.
- IAS 7(amendment) and IFRS 7 (amendment), 'Supplier finance arrangements'. These amendments require an entity to provide additional disclosures about its supplier finance arrangements to enable: i) the assessment of how supplier finance arrangements affect an entity's liabilities and cash flows; and ii) the understanding of the effect of supplier finance arrangements on an entity's exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available. The additional requirements complement presentation and disclosure requirements already in IFRS as set out in the IFRS IC's Agenda decision of December 2020.
- IFRS 16 (amendment), 'Lease liability in a sale and leaseback'. This amendment introduces guidance for the subsequent measurement of lease liabilities, in the scope of sale and leaseback transactions that qualify as "sales" under IFRS 15, with higher impact when some or all the lease payments are variable lease payments that do not depend on an index or rate. Whilst subsequently measuring lease liabilities, seller-lessees determine "lease payments" and "revised lease payments" in a way that does not result in the seller-lessees recognizing any gains/(losses) relating with the right of use that they retain. This amendment is applied retrospectively.
These standards and amendments had no material impact on Corticeira Amorim's consolidated financial statements.
The standards (new and amended) published, the application of which is mandatory for economic periods beginning after January 1, 2025, but which the European Union has not yet endorsed, are as follows:
• IAS 21 (amendment), 'The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability' (effective for annual periods beginning on or after 1 January 2025). This amendment is still subject to endorsement by the European Union. This amendment adds requirements for determining whether a currency can be exchanged for another currency (exchangeability) and defining how to determine the spot exchange rate to be used when it is not possible to exchange a currency for a long period of time. This change also requires the disclosure of information that allows understanding how the currency that cannot be exchanged for another currency affects, or is expected to affect, the financial performance, financial position and cash flows of the entity, in addition to the spot exchange rate used on the reporting date and how it was determined.
- IFRS 7 and IFRS 9 (amendment), 'Classification and measurement of financial instruments' (effective for annual periods beginning on or after 1 January 2026). This amendment is still subject to endorsement by the European Union. These amendments intend to: i) clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; ii) clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; iii) add new disclosure requirements for instruments with contractual conditions that can change cash flows, like those linked to ESG targets; and iv) update the disclosure requirements for equity instruments designated at fair value through other comprehensive income, separating the fair value reserve into the fair value gains or losses of the investments derecognised and those held at the end of the period. These amendments apply at the date they become effective without restating the comparatives.
- IFRS 18 (new standard), 'Presentation and Disclosure in Financial Statements' (effective for annual periods beginning on or after 1 January 2027). This new standard is still subject to endorsement by the European Union. This new standard will replace the current IAS 1. While retaining many of the existing principles of IAS 1, it is focused on the specification of a structure for the statement of profit or loss, composed of categories and required subtotals. Items in the statement of profit or loss will be classified into one of three categories: operating, investing, financing. Specified subtotals and totals will be required being the main change the mandatory inclusion of the subtotal "Operating profit or loss". This standard also includes improvements to the disclosure of management performance measures including the reconciliation with the most similar specified subtotal in IFRS Accounting standards. This standard also enhances guidance on the principles of aggregation and disaggregation of information in the financial statements and respective notes, based on their shared characteristics. This standard applies retrospectively.
- IFRS 19 (new standard), 'Subsidiaries without Public Accountability: Disclosures' (effective for annual periods beginning on or after 1 January 2027). This new standard is still subject to endorsement by the European Union. IFRS 19 is a voluntary standard which allows "Eligible" subsidiaries to use IFRS Accounting Standards with reduced disclosure requirements. IFRS 19 is a disclosure-only standard and works alongside other IFRS Accounting Standards for recognition, measurement, and presentation requirements. A subsidiary is "Eligible" if (i) it does not have public accountability; and (ii) has a parent that prepares consolidated financial statements available for public use that comply with IFRS Accounting Standards. IFRS 19 can be applied by "Eligible" subsidiaries when preparing their own consolidated, separate or individual financial statements. Complete comparative information needs to be prepared under IFRS 19 unless any exemption applies.
- Annual Improvements to IFRS Accounting Standards, include clarifications, simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards, that become effective for annual periods beginning on or after 1 January 2026.
The amended Standards are:
- IFRS 1 First-time Adoption of International Financial Reporting Standards;
- IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance on implementing IFRS 7;
- IFRS 9 Financial Instruments;
- IFRS 10 Consolidated Financial Statements; and
- IAS 7 Statement of Cash Flows.
Corticeira Amorim is evaluating the impact resulting from these changes and will apply these standards in the year in which they become effective, or in advance when permitted.
3.FINANCIAL RISK MANAGEMENT
The activities of Corticeira Amorim are exposed to a variety of financial risks: market risks (including exchange rate risk, interest rate risk and raw material price risk), credit risk, liquidity risk and capital risk.
Market risk
As regards market risks, the monitoring procedures reported on December 31, 2023 are maintained. International market volatility requires thorough compliance with the already defined procedures in order to avoid the eventual impacts of adverse events.
Credit risk
The credit risk results essentially from the balances receivable from clients resulting from commercial transactions. Corticeira Amorim is attentive to the question of collecting accounts receivable even though, in a universe of almost 30,000 clients around the world, the risks are significantly dispersed. The credit risk is naturally lower given the geographic scope of sales and a very high number of clients on every continent with no individual entity accounting for over 2% of total sales.
The client credit risk is evaluated by the Financial Departments of operating companies taking into account the track record of the commercial relationship, its financial position as well as other information that may be obtained through the business networks of Corticeira Amorim. The credit limits established are regularly subject to analysis and revised whenever necessary.
In general terms, no guarantees are requested from clients. Corticeira Amorim makes occasional recourse to credit insurance. The credit risk also results from the available cash balances and derivative financial instruments. Corticeira Amorim undertakes prior analysis of the respective financial institution ratings in order to minimise the risks of non-compliance by counterparties.
The maximum amount of credit risk is that which results from the non-receipt of the totality of financial assets (June 2024: 371 million euros and December 2023: 325 million euros).
The amounts registered in the Cash and equivalents item by Corticeira Amorim are dispersed across over 100 subsidiaries. In terms of the quality of credit risk, associated with Cash and Equivalents, on June 30, 2024, Corticeira Amorim selects financial institutions with ratings that do not call into doubt the return of these assets. This thereby highlights how, out of the total of Cash and Equivalents (€79 million), around €8 million are deposited in a financial institution (private capital) with the following ratings: Moody's Baa2 / P-2; Fitch: BBB+ / F2.
Liquidity risk
The Corticeira Amorim financial departments regularly analyse the provisional cash-flows in order to ensure there is sufficient liquidity for the group to meet its operational needs and, simultaneously, comply with the obligations assumed under the auspices of various lines of financing. Any amounts of surplus liquidity are invested in remunerated short term deposit accounts. Hence, this underpins the necessary flexibility for running the business.
The coverage of liquidity risks essentially stems from the existence of an immediately available series of credit lines and commercial bond issues, and, eventually, by the existence of bank account deposits. Corticeira Amorim closed the six months with unused credit lines and commercial bond issue programs totalling €268.1 million (on December 31, 2023, the comparative amount stood at €229.9 million). When combined with Cash and Equivalents, the Liquidity Reserve at the end of the aforementioned period amounted to €347 million (€303.3 million on December 31, 2023).
Capital risk
The fundamental objective of the Board is to ensure the continuity of operations, providing an appropriate level of remuneration to Shareholders and the corresponding benefits to the remaining Stakeholders in Corticeira Amorim. To achieve this objective, the careful management of the capital deployed in the business is fundamental alongside ensuring an optimal capital structure that thereby brings about a reduction in capital costs. Corticeira Amorim is a solid business endowed with an appropriate and balanced capital structure, responsible for its core activity of underpinning the sustainability of the entire cork sector. Without the stoppers produced by Corticeira Amorim, thousands of wine-makers and bottlers would not be able to operate across the most varied geographies.
Within the framework of maintaining or adjusting the capital structure deemed most appropriate, the Board may propose to the General Shareholder Assembly the measures considered necessary and that may involve adjustments to the pay-out regarding the dividends payable, transactions in the company's shares, raising equity capital through issuing shares and selling assets, among other measures. The indicator applied to monitor the capital structure is the Financial Autonomy ratio. The Board has established as its target a level of Financial Autonomy of no less than 40% taking into account the characteristics of the company and its respective sector of activity. Financial Autonomy reported the following trend:
| thousands of euros | |||
|---|---|---|---|
| June 30, 2024 |
December31, 2023 |
June 30, 2023 |
|
| Own Capital | 811,139 | 800,044 | 773,210 |
| Assets | 1,444,950 | 1,415,225 | 1,407,714 |
| Financial Autonomy | 56.1% | 56.5% | 54.9% |
Fair value of the financial assets and liabilities
The Group measures part of its financial assets and liabilities by their fair value on the reference date for the financial reporting. The derivative financial instruments acquired by Corticeira Amorim are not market traded and have no listing (derivatives negotiated over the counter).
Furthermore, the accountancy norms establish a hierarchy of fair value that classifies the data across the three levels incorporated into the measurement techniques for the fair value of financial assets and liabilities:
Level 1 Data – listed prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 Data – distinct data on the listed prices that are observable for the asset or liability, directly or indirectly;
Level 3 Data – non-observable data relating to the asset or liability. During the financial year, there were no transfers among the aforementioned levels.
The value of the derivative financial instruments recognised in the report on the Corticeira Amorim financial position, dated June 30, 2024, amounts to 59 K€ in the assets (December 31, 2023: 189 K€), and 525 K€ in liabilities (December 31, 2023: 68 K€), as notes 14 and 24.
Corticeira Amorim makes recourse to outright forwards and options for exchange rate risk coverage as is detailed below. The evaluation of exchange rate risk hedging instruments involved valuation techniques that apply observable inputs (Level 2). The fair value is calculated through a model owned by Corticeira Amorim and developed by Reuters that adopts the updated cash-flow method for the outright forwards while applying the Black & Scholes calculation model to options contracts.
The main inputs deployed in valuation are: forward exchange rate curve and currency volatility estimates.
Currency operations contracted with credit institutions
On 30 June 2024, there were options and outright forwards contracts relating to the currencies used by Corticeira Amorim transactions.
It is foreseeable that such transactions in foreign currencies are very likely to happen, which were therefore subject to exchange rate risk coverage, and taking place during the second half of 2024. The amount recognised in the "under Adjustment of Accountancy Coverage" will be recognised in the financial results for the same period.
The amount recognised in integral earnings related to variations in the fair value of efficient cash flow coverage was -127 K€ (1H23: 56 K€).
4.CRITICAL ESTIMATES AND JUDGEMENTS
The preparation of consolidated financial statements requires the Group's management to make judgments and estimates that affect the statement of financial position and the reported results. These estimates are based on the best information and knowledge about past and/or present events and on the operations that the Company considers it may implement in the future. However, at the date of completion of such operations, their results may differ from these estimates.
Changes to these estimates that occur after the date of approval of the consolidated financial statements will be corrected in the income statement in a prospective manner, in accordance with IAS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors".
The estimates and assumptions that imply a greater risk of giving rise to a material adjustment in assets and liabilities are described below:
- Entities included in the consolidation perimeter
To determine the entities to be included in the consolidation perimeter, the Group assesses the extent to which it is exposed, or has rights, to variability in return from its involvement with that entity and can take possession of them through the power it holds over this entity.
The decision that an entity must be consolidated by the Group requires the use of judgment, estimates, and assumptions to determine the extent to which the Group is exposed to return variability and the ability to take possession of them through its power.
Other assumptions and estimates could lead to the Group's consolidation perimeter being different, with direct impact on the consolidated financial statements.
- Impairment of non-current assets, excluding goodwill
The determination of a possible impairment loss can be triggered by the occurrence of various events, such as the availability of future financing, the cost of capital or other market, economic and legal changes or changes with an adverse effect on the technological environment, many of which are beyond the Group's control. The identification and assessment of impairment indicators, the estimation of future cash flows, and the calculation of the recoverable value of assets involve a high degree of judgment by the Board.
- Impairment of goodwill
Goodwill is annually subjected to impairment tests or whenever there are indications of a possible loss of value in accordance with the criteria described in Note 2 b). The recoverable values of the cash-generating units to which goodwill is allocated are determined based on the calculation of current use values. These calculations require the use of estimates by management.
- Intangible and tangible assets
The life of an asset is the period during which the Company expects that an asset will be available for use and this should be reviewed at least at the end of each financial year. The determination of the useful lives of assets, the amortisation/depreciation method to be applied, and the estimated losses resulting from the replacement of equipment before the end of its useful life due to technological obsolescence is crucial in determining the amount of amortisation/ depreciation to be recognised in the consolidated income statement each period.
These three parameters are defined using management's best estimates for the assets and businesses concerned, and taking account of the practices adopted by companies in the sectors in which Corticeira Amorim operates.
- Consumable biological assets
When determining the fair value of consumable biological assets, the present value method of discounted cash flows is used, which were determined using a model developed internally.
In the model developed, assumptions corresponding to the nature of the assets under evaluation are considered, namely, the development cycle, productivity, mortality rate, cork sales price, deducted from the extraction cost.
- Provisions
The Group periodically reviews any obligations arising from past events, which should be recognised or disclosed. The subjectivity involved in determining the probability and amount of internal resources required to meet obligations may give rise to significant adjustments, either due to changes in the assumptions made, or due to the future recognition of provisions previously disclosed as contingent liabilities.
- Fair value of financial assets and liabilities
When the fair value of a financial asset or liability is calculated, on an active market, the respective market price is used. When there is no active market, which is the case with some of Corticeira Amorim's financial assets and liabilities, valuation techniques generally accepted in the market, based on market assumptions, are used.
The Group applies evaluation techniques for unlisted financial instruments, such as derivatives, financial instruments at fair value and instruments measured at amortised cost. The most frequently used valorisation models are models of discounted cash flows and option models, which incorporate, for example, interest rate and market volatility curves.
For certain types of more complex derivatives, more advanced valuation models are used containing assumptions and data that are not directly observable in the market, for which the Group uses the proprietary model specified in Note 3.
5.EXCHANGE RATES USED IN CONSOLIDATION
| Exchage rates | June 30, 2024 |
Average 2024 |
Average 2023 |
December 31, 2023 |
|
|---|---|---|---|---|---|
| Argentine Peso | ARS | 975.954 | 929.147 | 319.957 | 892.205 |
| Australian Dollar | AUD | 1.608 | 1.642 | 1.629 | 1.626 |
| Lev | BGN | 1.956 | 1.956 | 1.956 | 1.956 |
| Brazilian Real | BRL | 5.892 | 5.492 | 5.401 | 5.362 |
| Canadian Dollar | CAD | 1.467 | 1.469 | 1.460 | 1.464 |
| Swiss Franc | CHF | 0.963 | 0.962 | 0.972 | 0.926 |
| Chilean Peso | CLP | 1007.500 | 1015.958 | 907.849 | 971.810 |
| Yuan Renminbi | CNY | 7.775 | 7.801 | 7.660 | 7.851 |
| Czech Koruny | CZK | 25.025 | 25.015 | 24.004 | 24.724 |
| Danish Krona | DKK | 7.458 | 7.458 | 7.451 | 7.453 |
| Algerian Dinar | DZD | 143.565 | 145.102 | 146.547 | 148.007 |
| Euro | EUR | 1.000 | 1.000 | 1.000 | 1.000 |
| Pound Sterling | GBP | 0.846 | 0.855 | 0.870 | 0.869 |
| Hong Kong Dollar | HKD | 8.365 | 8.453 | 8.466 | 8.618 |
| Forint | HUF | 395.100 | 389.757 | 381.853 | 382.800 |
| Yen | JPY | 171.940 | 164.461 | 151.990 | 156.330 |
| Moroccan Dirham | MAD | 10.666 | 10.829 | 10.952 | 10.886 |
| Zloty | PLN | 4.309 | 4.317 | 4.542 | 4.340 |
| Ruble | RUB | 92.418 | 97.978 | 92.874 | 99.192 |
| Swedish Krona | SEK | 11.360 | 11.391 | 11.479 | 11.096 |
| Tunisian Dinar | TND | 3.369 | 3.371 | 3.351 | 3.394 |
| Turkish Lira | TRL | 35.187 | 34.236 | 25.760 | 32.653 |
| US Dollar | USD | 1.071 | 1.081 | 1.081 | 1.105 |
| Rand | ZAR | 19.497 | 20.248 | 19.955 | 20.348 |
6. COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS
| Company | Head Office | Country | 1H24 | 2023 | |
|---|---|---|---|---|---|
| Amorim Florestal | |||||
| Amorim Florestal, S.A. | Vale de Cortiças - Abrantes | PORTUGAL | 100% | 100% | |
| Amorim Agroflorestal , S.A. | Ponte de Sor | PORTUGAL | 100% | 100% | |
| Amorim Florestal III, S.A. | Ponte de Sor | PORTUGAL | 100% | 100% | |
| Amorim Florestal España, S.L. | San Vicente Alcántara | SPAIN | 100% | 100% | |
| Amorim Florestal Mediterrâneo, S.L. | Cádiz | SPAIN | 100% | 100% | |
| Amorim Tunisie, S.A.R.L. | Tabarka | TUNISIA | 100% | 100% | |
| Herdade de Rio Frio, S.A. | Ponte de Sor | PORTUGAL | 100% | 100% | |
| Comatral - C. de Maroc. de Transf. du Liège, S.A. | Skhirat | MOROCCO | 100% | 100% | |
| Cosabe - Companhia Silvo-Agrícola da Beira S.A. | Lisboa | PORTUGAL | 100% | 100% | |
| SIBL - Société Industrielle Bois Liége Société Nouvelle du Liège, S.A. (SNL) |
Jijel Tabarka |
ALGERIA TUNISIA |
51% 100% |
51% 100% |
|
| Société Tunisienne d'Industrie Bouchonnière | Tabarka | TUNISIA | 55% | 55% | |
| Vatrya - Serviços de Consultadoria, Lda. | Funchal - Madeira | PORTUGAL | 100% | 100% | |
| Amorim Cork | |||||
| Amorim Cork, SGPS, S.A. | Santa Maria Lamas | PORTUGAL | 100% | 100% | |
| ACIC USA, LLC | Califórnia | U. S. AMERICA | 100% | 100% | |
| Agglotap, S.A. | Girona | SPAIN | 91% | 91% | |
| All Closures In, S.A. | Paços de Brandão | PORTUGAL | 75% | 75% | |
| Amorim Cork, S.A. | Santa Maria de Lamas | PORTUGAL | 100% | 100% | |
| Amorim Australasia Pty Ltd. | Adelaide | AUSTRALIA | 100% | 100% | |
| Amorim Bartop, S.A. | Vergada | PORTUGAL | 75% | 75% | |
| Amorim Champcork, S.A. | Santa Maria de Lamas | PORTUGAL | 100% | 100% | |
| Amorim Cork América, Inc. | Califórnia | U. S. AMERICA | 100% | 100% | |
| Amorim Cork Beijing Ltd. | Beijing | CHINA | 100% | 100% | |
| Amorim Cork Bulgaria EOOD Amorim Cork Deutschland GmbH & Co KG |
Plovdiv Mainzer |
BULGARIA GERMANY |
100% 100% |
100% 100% |
|
| Amorim Cork España, S.L. | San Vicente Alcántara | SPAIN | 100% | 100% | |
| Amorim Cork Hungary Zrt. | Budapeste | HUNGARY | 100% | 100% | |
| Amorim Cork Itália, SPA | Conegliano | ITALY | 100% | 100% | |
| Amorim Cork South Africa (Pty) Ltd. | Cidade do Cabo | SOUTH AFRICA | 100% | 100% | |
| Amorim France, S.A.S. | Champfleury | FRANCE | 100% | 100% | |
| Amorim Top Series France, S.A.S. | Merpins | FRANCE | 100% | 100% | |
| Amorim Top Series, S.A. | Vergada | PORTUGAL | 75% | 75% | |
| Amorim Top Series Scotland, Ltd | Dundee | SCOTLAND | 75% | 75% | |
| Biocape - Importação e Exportação de Cápsulas, Lda. | Mozelos | PORTUGAL | 75% | 75% | |
| Bouchons Prioux | Epernay | FRANCE | 91% | 91% | |
| Bozales ICAS HITE Argentina | (b) | Mendoza | ARGENTINA | 26% | 26% |
| Chapuis, S.L. Corchera Gomez Barris |
(b) | Girona Santiago |
SPAIN CHILE |
100% 50% |
100% 50% |
| Corchos de Argentina, S.A. | (a) | Mendoza | ARGENTINA | 50% | 50% |
| Bourrassé Chile | Santiago | CHILE | 100% | 100% | |
| Elfverson & Co. AB | Paryd | SWEDEN | 38% | 38% | |
| Elfverson I.P., S.A. | Vergada | PORTUGAL | 38% | 38% | |
| Elfverson Portugal, SA | Santa Maria de Lamas | PORTUGAL | 38% | 38% | |
| S.A.S. Ets Christian Bourrassé | Tosse | FRANCE | 100% | 100% | |
| FP Cork, Inc. | Califórnia | U. S. AMERICA | 100% | 100% | |
| Francisco Oller, S.A. | Girona | SPAIN | 98% | 98% | |
| HITE, S.A. - Hispano Italiana Trenzados Especiales, S.A. | (b) | Barcelona | SPAIN | 25% | 25% |
| I.C.A.S. S.p.A. | (b) | Ivrea | ITALY | 50% | 50% |
| ICAS Brasil Ltda. | (b) | Garibaldi (RS) | BRAZIL | 25% | 25% |
| ICAS France S.a.r.l. ICAS HITE Australasia |
(b) | Reims Adelaide |
FRANCE AUSTRALIA |
50% 37% |
50% 37% |
| Indústria Corchera, S.A. | (b) | Santiago | CHILE | 50% | 50% |
| Kapselfabrik. GmbH | (b) | Bad Kreuznach | GERMANY | 50% | 50% |
| Korken Schiesser Ges.M.B.H. | Viena | AUSTRIA | 69% | 69% | |
| Olimpiadas Barcelona 92, S.L. | Girona | SPAIN | 100% | 100% | |
| Pfefferkorn & Co. GmbH | (b) | Simmern | GERMANY | 50% | 50% |
| Pfefferkorn & Reiter GmbH | (b) | Simmern | GERMANY | 50% | 50% |
| Portocork América, Inc. | Califórnia | U. S. AMERICA | 100% | 100% | |
| Portocork France, S.A.S. | Bordéus | FRANCE | 100% | 100% | |
| Portocork Itália, s.r.l | Milão | ITALY | 100% | 100% | |
| Prats & Bonany S.A. | (b) | Reims | FRANCE | 37% | 37% |
| Relvas II - Rolhas de Cortiça S.A. | (b) | Montemor-o-Novo | PORTUGAL | 50% | 50% |
| Sarl Relvas France | (b) | Reims | FRANCE | 37% | 37% |
| SACI S.r.l. Sagrera et Cie |
(b) | Ivrea Reims |
ITALY FRANCE |
50% 91% |
50% 91% |
| S.A. Oller et Cie | Reims | FRANCE | 98% | 98% | |
28
| San Bernardo Tappi Spumante S.r.l | (b) | Ivrea | ITALY | 50% | 50% |
|---|---|---|---|---|---|
| Schneider (Mainsee 1407. V V) GmbH | (b) | Bad Kreuznach | GERMANY | 50% | 50% |
| S.C.I. Friedland | Céret | FRANCE | 100% | 100% | |
| S.C.I. Prioux | Epernay | FRANCE | 91% | 91% | |
| Socori, S.A. | Rio Meão | PORTUGAL | 100% | 100% | |
| Socori Forestal, S.L. | Cáceres | SPAIN | 100% | 100% | |
| Société Nouvelle des Bouchons Trescases | (a) | Perpignan | FRANCE | 50% | 50% |
| Sumois S.A | (b) | Sant Sadurni D'Anoia | SPAIN | 25% | 25% |
| Tango S.S | (b) | Ivrea | ITALY | 37% | 37% |
| Trefinos Italia, s.r.l | Treviso | ITALY | 91% | 91% | |
| Trefinos USA, LLC | Fairfield, CA | U. S. AMERICA | 91% | 91% | |
| Trefinos, S.L. | Girona | SPAIN | 91% | 91% | |
| Victor y Amorim, S.L. | (b) | Navarrete - La Rioja | SPAIN | 50% | 50% |
| Vinolok a.s | (a) | Jablonec nad Nisou | CZECH REP. | 50% | 50% |
| Wine Packaging & Logistic, S.A. | (a) | Santiago | CHILE | 16% | 16% |
| VMD Group SA | Pully | SWITZERLAND | 55% | 55% | |
| Chaillot Bouchons SA | Saint-Prex | SWITZERLAND | 55% | 55% | |
| SUBOENO SA | Saint-Prex | SWITZERLAND | 55% | 55% | |
| PM OEnologie Consulting Sàrl | Saint-Léonard | SWITZERLAND | 55% | 55% | |
| Company | Head Office | Country | 1H24 | 2023 | |
| Amorim Cork Flooring | |||||
| Amorim Cork Flooring, S.A. | S. Paio de Oleiros | PORTUGAL | 100% | 100% | |
| Amorim Benelux, BV | Tholen | NETHERLANDS | 100% | 100% | |
| Amorim Deutschland, GmbH | Delmenhorts | GERMANY | 100% | 100% | |
| Amorim Flooring (Switzerland) AG | Zug | SWITZERLAND | 100% | 100% | |
| Amorim Flooring Austria GesmbH | Viena | AUSTRIA | 100% | 100% | |
| Amorim Flooring Canada, Inc. | Vancôver | CANADA | 100% | 100% | |
| Amorim Flooring North America Inc. | Hanover - Maryland | U. S. AMERICA | 100% | 100% | |
| Amorim Flooring Rus, LLC | Moscovo | RUSSIA | 100% | 100% | |
| Amorim Flooring Sweden AB | Mölndal | SWEDEN | 100% | 100% | |
| Amorim Flooring UK, Ltd. | (c) | Manchester | UN. KINGDOM | 0% | 100% |
| Cortex Korkvertriebs, GmbH | Fürth | GERMANY | 100% | 100% | |
| Dom KorKowy, Sp. Zo. O. | (b) | Kraków | POLAND | 50% | 50% |
| Korkkitrio Oy | Tampere | FINLAND | 78% | 78% | |
| Timberman Denmark A/S | Hadsund | DENMARK | 80% | 80% | |
| Amorim Cork Composites | |||||
| Amorim Cork Composites, S.A. | Mozelos | PORTUGAL | 100% | 100% | |
| Amorim (UK), Ltd. | Horsham West Sussex | UN. KINGDOM | 100% | 100% | |
| Amorim Cork Composites, LLC | São Petersburgo | RUSSIA | 100% | 100% | |
| Amorim Cork Composites, GmbH | Delmenhorts | GERMANY | 100% | 100% | |
| Amorim Cork Composites, Inc. | Trevor - Wisconsin | U. S. AMERICA | 100% | 100% | |
| Navicork by Amorim, Lda. | Mozelos | 100% | |||
| Amorim Deutschland, GmbH | |||||
| PORTUGAL | 100% | ||||
| Delmenhorts | GERMANY | 100% | 100% | ||
| Amorim Industrial Solutions - Imobiliária, S.A. | Corroios | PORTUGAL | 100% | 100% | |
| Amorim Sports, Lda. | Mozelos | PORTUGAL | 100% | 100% | |
| Amorim Sports North America, Inc. | Trevor - Wisconsin | U. S. AMERICA | 100% | 100% | |
| Chinamate (Shaanxi) Natural Products Co., Ltd. | Shaanxi | CHINA | 100% | 100% | |
| Chinamate Development Co. Ltd. | Hong Kong | CHINA | 100% | 100% | |
| Compruss – Investimentos e Participações, Lda. | Mozelos | PORTUGAL | 100% | 100% | |
| Corkeen Europe | Mozelos | PORTUGAL | 85% | 85% | |
| Corkeen Global | Mozelos | PORTUGAL | 100% | 100% | |
| Corkeen North America, Ltd. | Trevor - Wisconsin | U. S. AMERICA | 100% | 100% | |
| Korko - Made By Nature, Lda | (a) | Mozelos | PORTUGAL | 50% | 50% |
| Postya - Serviços de Consultadoria, Lda. | Funchal - Madeira | PORTUGAL | 100% | 100% | |
| Amorim Cork Insulation | |||||
| Amorim Cork Insulation, S.A. | Vendas Novas | PORTUGAL | 100% | 100% | |
| Corticeira Amorim and Others | |||||
| Corticeira Amorim, SGPS, S.A. | Mozelos | PORTUGAL | 100% | 100% | |
| Ginpar, S.A. (Générale d' Invest. et Participation) | Skhirat | MOROCCO | 100% | 100% | |
| Amorim Cork Research, Lda. | Mozelos | PORTUGAL | 100% | 100% | |
| Amorim Cork Services, Lda. | Mozelos | PORTUGAL | 100% | 100% | |
| Amorim Cork Ventures, Lda. | Mozelos | PORTUGAL | 100% | 100% | |
| Corecochic - Corking Shoes Investments, Lda. | (a) | Mozelos | PORTUGAL | 50% | 50% |
| TDCork - Tapetes Decorativos com Cortiça, Lda. | (a) | Mozelos | PORTUGAL | 25% | 25% |
| Soc. Portuguesa de Aglomerados de Cortiça, Lda. | Montijo | PORTUGAL | 100% | 100% | |
| Amorim Cork IT S.A. | Mozelos | PORTUGAL | 100% | 100% | |
| Amorim - Viagens e Turismo, S.A. | Mozelos | PORTUGAL | 100% | 100% |
(a) - Equity method consolidation.
(b) - Corticeira Amorim directly or indirectly controls the relevant activities – line-by-line consolidation method.
(c) - Company liquidated in the first half of 2024.
The percentages indicated are the percentages of interests and not of control.
For entities consolidated by the full consolidation method, the percentage of voting rights held by "Non-Controlling Interests" is equal to the percentage of share capital held.
7. SEGMENT REPORT
Corticeira Amorim is organized into the following Business Units: Amorim Florestal (formerly called Raw Materials), Amorim Cork (formerly Cork Stoppers), Amorim Cork Flooring (formerly Floor and Wall Coverings), Amorim Cork Composites (formerly Composite Cork) and Amorim Cork Insulation (formerly Insulation Cork).
There are no differences between the measurement of profit and loss and assets and liabilities of the reportable segments, associated to differences in accounting policies or centrally allocated cost allocation policies or jointly used assets and liabilities.
For purposes of this Report, the Business approach was selected as the primary segment. This is consistent with the formal organisation and evaluation of business. Business Units correspond to the operating segments of the company and the segment report is presented the same way they are analysed for management purposes by the board of Corticeira Amorim.
The following table shows the main indicators of the business units, and, whenever possible, the reconciliation with the consolidated indicators:
| thousand euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| 1H24 | Amorim Florestal |
Amorim Cork |
Amorim Cork Flooring |
Amorim Cork Composites |
Amorim Cork Insulation |
Corticeira Amorim and Others |
Adjustm. | Consolidated |
| Trade Sales | 4,444 | 386,397 | 43,043 | 58,922 | 7,325 | 605 | 0 | 500,736 |
| Other BU Sales | 118,411 | 6,950 | 1,200 | 1,124 | 1,231 | 8,455 | - 137,372 |
- |
| Total Sales | 122,855 | 393,347 | 44,244 | 60,047 | 8,555 | 9,060 | - 137,372 |
500,736 |
| EBITDA (*) | 8,043 | 84,665 | -2,855 | 10,895 | -1,671 | -4,162 | -471 | 94,444 |
| Profit before tax | 1,256 | 67,108 | -13,749 | 7,174 | -2,412 | -1,891 | -464 | 57,022 |
| Assets (non-current) | 98,485 | 302,775 | 35,805 | 55,882 | 8,175 | 2,226 | 40,116 | 543,466 |
| Assets (current) | 265,221 | 526,418 | 54,614 | 63,820 | 12,960 | 3,379 | -26,879 | 899,532 |
| Liabilities | 72,657 | 213,276 | 49,228 | 40,544 | 6,942 | 253,338 | -4,126 | 631,859 |
| Capex | 4,555 | 14,322 | 795 | 1,947 | 298 | 253 | 0 | 22,169 |
| Year Depreciation | -3,342 | -18,961 | -2,816 | -3,482 | -534 | -304 | 0 | -29,438 |
| Gains/Losses in associated companies |
0 | 3,132 | 0 | -69 | 0 | -6 | 0 | 3,056 |
| 1H23 | Amorim Florestal |
Amorim Cork |
Amorim Cork Flooring |
Amorim Cork Composites |
Amorim Cork Insulation |
Corticeira Amorim and Others |
Adjustm. | Consolidated |
|---|---|---|---|---|---|---|---|---|
| Trade Sales | 7,386 | 417,644 | 48,262 | 57,328 | 8,364 | 284 | 0 | 539,269 |
| Other BU Sales | 124,377 | 5,627 | 1,294 | 837 | 1,509 | 8,355 | - 141,999 |
- |
| Total Sales | 131,763 | 423,271 | 49,556 | 58,165 | 9,874 | 8,639 | - 141,999 |
539,269 |
| EBITDA (*) | 12,622 | 91,031 | -2,724 | 11,782 | -578 | 175 | -8,534 | 103,774 |
| Profit before tax | 8,819 | 76,251 | -6,255 | 8,625 | -1,005 | -3,911 | -4,561 | 77,963 |
| Assets (non-current) | 100,514 | 279,752 | 39,149 | 55,620 | 7,304 | 2,337 | 33,172 | 517,848 |
| Assets (current) | 244,674 | 545,165 | 62,233 | 60,561 | 15,896 | 17,667 | -56,330 | 889,865 |
| Liabilities | 95,158 | 237,073 | 38,864 | 39,251 | 3,570 | 29,049 | 191,538 | 634,503 |
| Capex | 5,208 | 27,969 | 6,293 | 4,714 | 969 | 480 | 0 | 45,633 |
| Year Depreciation | -2,822 | -16,718 | -3,305 | -2,790 | -356 | -560 | 0 | -26,551 |
| Gains/Losses in associated companies |
0 | 3,494 | 0 | -50 | 0 | -3 | 0 | 3,441 |
Adjustments = eliminations inter-BU and amounts not allocated to BU.
(*) EBITDA = Profit before net financing costs, depreciation, non-controlling interests, income tax and non-recurrent results. Provisions and asset impairments were considered the only relevant non-cash material cost.
The decision to report EBITDA figures (excluding non-recurring operational results – see note 27, which due to its materiality or nature could distort Corticeira Amorim's financial performance, as well as its comparability), allows a better comparison of the different BU performances, disregarding the different financial situations of each BU. This is also coherent with the existing Corporate Departments, as the Financial Department is responsible for the bank negotiations, being the tax function the responsibility of the Holding Company.
Amorim Cork main product is the different types of existing cork stoppers. The main markets are the bottling countries, from the traditional ones like France, Italy, Germany, Spain and Portugal, to the new markets like USA, Australia, Chile, South Africa and Argentina.
Amorim Florestal is, by far, the most integrated in the production cycle of Corticeira Amorim, with 90% of its sales to others BU, in particular the sale of cork boards and disks to the Amorim Cork.
The remaining Business Units produce and sell a wide range of products that use the raw material left over from the production of stoppers, as well as the cork raw material that is not susceptible to be used in the production of stoppers. Main products are cork floor tiles, cork rubber for the automotive industry and anti-vibration systems, expanded agglomerates for insulation and acoustic purposes, technical agglomerates for civil construction and shoe industry, as well as granulates for agglomerated, technical and champagne cork stoppers.
Major markets for Amorim Cork Flooring, Amorim Cork Insulation and for Amorim Cork Composites are in Europe. Major production sites are in Portugal, where most of the invested capital is located. Products are distributed in practically all major markets through a fully owned network of sales companies. About 70% of total consolidated sales are achieved through these companies.
Capex was concentrated in Portugal. Assets in foreign subsidiaries, particularly the items of tangible fixed assets, inventories and customers, totalise 488 M€, and are mostly composed by inventories (190 M€) and trade receivables (180 M€).
In non-current assets, it is important to note the 313 M€ (2023: 323 M€) of tangible fixed assets, 2.2 M€ (2023: 2.2 M€) of property investment, and 9.2 M€ (2023: 11 M€) of intangible assets, located in Portugal.
| thousand euros | ||||
|---|---|---|---|---|
| Markets | 1H24 | 1H23 | ||
| European Union | 341,910 | 68.3% | 371,278 | 68.8% |
| From which: Portugal | 29,914 | 6.0% | 38,654 | 7.2% |
| Other European countries | 15,955 | 3.2% | 11,722 | 2.2% |
| United States | 87,517 | 17.5% | 95,019 | 17.6% |
| Other American countries | 26,963 | 5.4% | 31,459 | 5.8% |
| Australasia | 21,825 | 4.4% | 22,863 | 4.2% |
| Africa | 6,566 | 1.3% | 6,928 | 1.3% |
| TOTAL | 500,736 | 100% | 539,269 | 100% |
Sales by markets:
The value of sales relates in its entirety, as in 2023, to contracts covered by IFRS 15 - Revenue from contracts with customers.
8.TANGIBLE ASSETS
| thousand euros | |||||
|---|---|---|---|---|---|
| Land and Buildings |
Machinery | Other | Tangible Fixed Assets in Progress |
Total Tangible Assets |
|
| Gross Value | 380,562 | 593,792 | 54,791 | 52,189 | 1,081,334 |
| Depreciation and impairments | -197,015 | -446,786 | -44,945 | 0 | -688,745 |
| Opening balance (Jan 1, 2023) | 183,547 | 147,006 | 9,846 | 52,189 | 392,588 |
| Increase | 2,300 | 5,610 | 1,559 | 34,948 | 44,417 |
| Period deprec. and impairments | -4,100 | -16,332 | -1,590 | 0 | -22,022 |
| Sales and other decreases | -4 | -543 | -86 | -274 | -908 |
| Transfers and reclassifications | -4,576 | 8,228 | 3,294 | -11,427 | -4,481 |
| Translation differences | -24 | -193 | -160 | -11 | -388 |
| Gross Value | 377,674 | 604,625 | 58,712 | 75,424 | 1,116,435 |
| Depreciation and impairments | -200,532 | -460,848 | -45,848 | 0 | -707,228 |
| Closing balance (Jun 30, 2023) | 177,142 | 143,777 | 12,864 | 75,424 | 409,208 |
| Gross Value | 399,510 | 670,248 | 60,341 | 36,160 | 1,166,259 |
| Depreciation and impairments | -205,334 | -476,020 | -46,608 | 0 | -727,962 |
| Opening balance (Jan 1, 2024) | 194,176 | 194,227 | 13,734 | 36,160 | 438,297 |
| Increase | 1,746 | 6,736 | 1,489 | 10,076 | 20,047 |
| Period deprec. and impairments | -4,526 | -19,266 | -1,575 | 0 | -25,367 |
| Sales and other decreases | -38 | -452 | -124 | -1,381 | -1,995 |
| Transfers and reclassifications | 1,637 | 10,034 | 776 | -11,892 | 555 |
| Translation differences | -15 | -21 | -34 | 3 | -66 |
| Gross Value | 403,095 | 686,431 | 62,405 | 32,967 | 1,184,898 |
| Depreciation and impairments | -210,116 | -495,173 | -48,139 | 0 | -753,427 |
| Closing balance (Jun 30, 2024) | 192,979 | 191,258 | 14,266 | 32,967 | 431,470 |
The impairment adjustments of assets recognized in 2023 and 2024 were offset by the Depreciation/Amortization line in the consolidated income statement by nature.
Expenses to place the assets in the required location and condition related with tangible fixed assets had no impact.
In other tangible fixed assets, biological assets for production with a net value of 3,239 K€ are included, mainly consisting of vines and cork oak from Herdade do Rio Frio.
No interest was capitalised during the period.
9.INTANGIBLE ASSETS AND GOODWILL
| thousand euros | |||
|---|---|---|---|
| Intangible Assets |
Goodwill | ||
| Gross Value | 44,551 | 28,856 | |
| Depreciation and impairments | -22,564 | -9,982 | |
| Opening balance (Jan 1, 2023) | 21,987 | 18,874 | |
| Increase | 1,096 | 0 | |
| Period deprec. and impairments | -3,357 | 0 | |
| Sales and other decreases | -80 | 0 | |
| Transfers and reclassifications | 55 | 0 | |
| Translation differences | -23 | 15 | |
| Gross Value | 45,499 | 28,864 | |
| Depreciation and impairments | -25,821 | -9,975 | |
| Closing balance (Jun 30, 2023) | 19,677 | 18,889 | |
| Gross Value | 46,958 | 33,847 | |
| Depreciation and impairments | -28,940 | -9,974 | |
| Opening balance (Jan 1, 2024) | 18,018 | 23,872 | |
| Increase | 1,380 | 0 | |
| Period deprec. and impairments | -3,066 | 0 | |
| Sales and other decreases | -56 | 0 | |
| Transfers and reclassifications | -210 | 0 | |
| Translation differences | 30 | -2 | |
| Gross Value | 48,299 | 33,852 | |
| Depreciation and impairments | -32,202 | -9,982 | |
| Closing balance (Jun 30, 2024) | 16,097 | 23,870 |
Intangible Assets essentially include software, autonomous product development projects and innovative solutions, and customer portfolio acquired.
With the exception of goodwill, there are no intangible assets of indefinite life.
thousand euros
| 2023 | Opening balance | Increase | Decrease | Reclassification | Transalation differences | End balance |
|---|---|---|---|---|---|---|
| Bourrassé | 8,431 | 8,431 | ||||
| Grupo Saci | 9,031 | 22 | 9,053 | |||
| Grupo VMD | 0 | 4,836 | 239 | 5,075 | ||
| Elfverson | 1,314 | 1,314 | ||||
| Korkkitrio | 98 | -98 | 0 | |||
| Goodwill | 18,874 | 4,836 | -98 | 0 | 261 | 23,872 |
thousand euros
| 1H24 | Opening balance | Increase | Decrease | Reclassification | Transalation differences | End balance |
|---|---|---|---|---|---|---|
| Bourrassé | 8,431 | 8,431 | ||||
| Grupo Saci | 9,053 | -2 | 9,051 | |||
| Grupo VMD | 5,075 | 5,075 | ||||
| Elfverson | 1,314 | 1,314 | ||||
| Goodwill | 23,872 | 0 | 0 | 0 | -2 | 23,870 |
Impairment tests are carried out annually. In the tests, cash-flows were designed, based on the budget and plans approved by management. The growth assumptions considered the expected growth of each company's business, essentially in the wine, champagne and sparkling wine market, as well as the evolution of the subsidiaries' market share in this business.
In the case of Bourrassé, the tests used operational cash-flow growth rates of 7.3% for the period 2024-2026 and 1.4% for the following years. In the case of Saci, the tests used operational cash-flow growth rates of 1.3% for the period 2024-2026 and 2.0% for the following years. In the case of Elfverson, operational cash-flow growth rates of 37.3% were used in the tests for the period 2024-2026 and 2% for the following years.
For the impairment test of the VMD group, the 2024 budget was considered (with a 36% growth in operating income) without growth in cash-flows in 2025 and 2026, with a growth rate of 1.8% being considered for the periods following.
The discount rate used in the tests described above was 7.3%. Sensitivity analyzes (adjusting the discount rate by an additional 10% and the perpetuity growth rate by an additional 20%) would not imply recording an impairment in the accounts for the four cash-generating units under analysis.
Considering the performance of the first half of 2024, it is concluded that it is not necessary to change the previously approved plans and impairment tests.
10. BIOLOGICAL ASSETS
| thousand euros | |
|---|---|
| Biological Assets |
|
| Gross Value | 913 |
| Depreciation and impairments | 0 |
| Opening balance (Jan 1, 2023) | 913 |
| Increase | 0 |
| Period deprec. and impairments | 0 |
| Sales and other decreases | 0 |
| Transfers and reclassifications | 5,241 |
| Translation differences | 0 |
| Gross Value | 6,154 |
| Depreciation and impairments | 0 |
| Closing balance (Jun 30, 2023) | 6,154 |
| Gross Value | 6,342 |
| Depreciation and impairments | 0 |
| Opening balance (Jan 1, 2024) | 6,342 |
| Increase | 0 |
| Period deprec. and impairments | 0 |
| Sales and other decreases | 0 |
| Transfers and reclassifications | 5 |
| Translation differences | 0 |
| Gross Value | 6,347 |
| Depreciation and impairments | 0 |
| Closing balance (Jun 30, 2024) | 6,347 |
The detail of the value of biological assets, as of June 30, 2024, is as follows:
| Cork | Cattle | Total | |
|---|---|---|---|
| Opening balance (Jan 1, 2022) | 62 | 62 | |
| Perimeter entry | 867 | 867 | |
| Perimeter entry | -15 | -15 | |
| Closing balance (Dec 31, 2022) | 47 | 867 | 913 |
| Opening balance (Jan 1, 2023) | 47 | 867 | 913 |
| Fair value increases/decreases | 315 | 0 | 315 |
| Sales and other decreases | 0 | -109 | -109 |
| Transfers and reclassifications | 5,223 | 0 | 5,223 |
| Closing balance (Dec 31, 2023) | 5,584 | 758 | 6,342 |
| Opening balance (Jan 1, 2024) | 5,584 | 758 | 6,342 |
| Transfers and reclassifications | 5 | 0 | 5 |
| Closing balance (June 30, 2024) | 5,589 | 758 | 6,347 |
As of June 30, 2024, there are no biological assets whose ownership is restricted or which are pledged as collateral for liabilities as well as commitments relating to the development or acquisition of biological assets.
Fair value measurement
According to accounting standards, a fair value hierarchy is established that classifies the data to be used in fair value measurement techniques into three levels. At the level of biological assets, level 3 data is considered: unobservable data regarding the asset or liability.
When measuring the fair value of cork trees, around 351 thousand arrobas are considered at the beginning and end of the period.
Biological assets are measured at their fair value less estimated costs at the point of sale. The respective fair value is determined based on the present value of discounted cash flows method.
The following assumptions were considered:
- Productivity of the Herdade's history;
- Average sales price for the quality of cork deducted from extraction costs;
- Discountrate: 3%
11. RIGHT OF USE
| thousand euros | |
|---|---|
| Right of use | |
| Gross Value | 12,610 |
| Depreciation and impairments | -8,045 |
| Opening balance (Jan 1, 2023) | 4,564 |
| Increase | 340 |
| Period deprec. and impairments | -663 |
| Sales and other decreases | -73 |
| Transfers and reclassifications | -59 |
| Translation differences | -14 |
| Gross Value | 12,057 |
| Depreciation and impairments | -7,962 |
| Closing balance (Jun 30, 2023) | 4,094 |
| Gross Value | 13,584 |
| Depreciation and impairments | -8,538 |
| Opening balance (Jan 1, 2024) | 5,046 |
| INCREASE | 273 |
| PERIOD DEPREC. AND IMPAIRMENTS | -334 |
| SALES AND OTHER DECREASES | -29 |
| TRANSFERS AND RECLASSIFICATIONS | -9 |
| TRANSLATION DIFFERENCES | 4 |
| Gross Value | 13,507 |
| Depreciation and impairments | -8,555 |
| Closing balance (Jun 30, 2024) | 4,952 |
12. INVESTMENT PROPERTY
| thousand euros | |
|---|---|
| Investment Property |
|
| Gross Value | 13,936 |
| Depreciation and impairments | -9,970 |
| Opening balance (Jan 1, 2023) | 3,966 |
| Increase | 0 |
| Period deprec. and impairments | -39 |
| Sales and other decreases | 0 |
| Transfers and reclassifications | 298 |
| Translation differences | 0 |
| Gross Value | 14,234 |
| Depreciation and impairments | -10,010 |
| Closing balance (Jun 30, 2023) | 4,224 |
| Gross Value | 6,403 |
| Depreciation and impairments | -4,163 |
| Opening balance (Jan 1, 2024) | 2,241 |
| Increase | 13 |
| Period deprec. and impairments | -39 |
| Sales and other decreases | 0 |
| Transfers and reclassifications | 0 |
| Translation differences | 0 |
| Gross Value | 6,417 |
| Depreciation and impairments | -4,202 |
| Closing balance (Jun 30, 2024) | 2,215 |
The amount of 2,215 K€, referred as Investment Property (December 31, 2023: 2,241K€), is due, mainly, to land and buildings that are not used in production.
The fair value of the Investment Properties, in the case of the land, is close to the value recorded in the accounts.
At the end of the year, management analyzed these assessments and considered that they remained up to date. These properties are not generating income and conservation and repair costs are insignificant.
13. INVESTIMENTS IN ASSOCIATES AND JOINT-VENTURES
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Opening Balance | 32,630 | 32,083 | 32,083 |
| In / Out | 0 | -166 | -332 |
| Results | 3,056 | 3,011 | 3,441 |
| Dividends | 0 | -1,788 | -1,312 |
| Exchange Differences | -227 | -510 | 262 |
| Other | 0 | 0 | 24 |
| End Balance | 35,460 | 32,630 | 34,166 |
| Equity method | 3,056 | 3,011 | 3,441 |
| Gains on disposal of associates | 0 | 0 | 0 |
| Share of (loss)/profit of associates and joint ventures |
3,056 | 3,011 | 3,441 |
The associates and joint-ventures are entities through which the group operates in the markets in which they are based, acting as distribution channels of products.
The book values are described by subsidiary:
| thousand euros | ||||
|---|---|---|---|---|
| 1H24 | ||||
| Share in net assets |
Goodwill | Total | Contribution to net income |
|
| Trescases | 7,992 | 1,715 | 9,707 | 1,673 |
| Wine Packaging & Logistic | 1,091 | 0 | 1,091 | 0 |
| Corchos Argentina | 7,988 | 0 | 7,988 | 407 |
| Vinolok | 16,544 | 0 | 16,544 | 1,052 |
| Outros | 130 | 0 | 130 | -75 |
| End Balance | 33,745 | 1,715 | 35,460 | 3,056 |
| 1H23 | ||||
|---|---|---|---|---|
| Share in net assets |
Goodwill | Total | Contribution to net income |
|
| Trescases | 7,254 | 1,715 | 8,969 | 1,161 |
| Wine Packaging & Logistic | 1,260 | 0 | 1,260 | 0 |
| Corchos Argentina | 7,023 | 0 | 7,023 | 818 |
| Vinolok | 16,775 | 0 | 16,775 | 1,515 |
| Outros | 139 | 0 | 139 | -53 |
| End Balance | 32,451 | 1,715 | 34,166 | 3,441 |
In addition to the above, the Group has significant influence on a set of other individually immaterial associates.
14. OTHER FINANCIAL ASSETS
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Hedge accounting assets | 59 | 189 | 1,357 |
| VAT | 22,077 | 24,948 | 26,013 |
| Stamp tax/VAT - special payment (PERES) | 1,854 | 1,854 | 2,051 |
| Stamp tax/VAT - special payment (PERES) impairment | -1,436 | -1,436 | -2,051 |
| Investments in funds, capitalization insurance and similar | 6,192 | 6,192 | 6,194 |
| Others | 11,942 | 9,979 | 9,682 |
| Other debtors | 40,690 | 41,726 | 43,246 |
Investments in funds, capitalization insurance and similar essentially refer to SACI Group's capitalization insurance. These insurance policies (insurance policies associated with investment funds) are short-term investments, which can be sold when necessary without any particular constraint.
Assets included in other non-current financial assets (June 30, 2024: 2,091 K€, December 31, 2023: 2,097 K€) refer to financial assets at fair value through profit or loss, including essentially equity instruments. They are measured at fair value and when it is estimated that there are no significant differences in relation to the cost this is maintained. The assets were acquired with the main purpose of sale or resale, as appropriate, and in certain cases ensuring the maintenance and survival of entities that Corticeira Amorim considers partners for its business. The effective management of the underlying operations and assets continues to be exclusively provided by the partners, serving the financial participation as a mere "guarantee" of the investment made.
In June 2024 and at the end of 2023, there were no overdue in the amounts of VAT.
15. DEFERRED TAX / INCOME TAX
• Deferred tax and income tax
The difference between the tax due for the current period and prior periods and the tax already paid or to be paid of these periods is booked as "deferred tax" in the consolidated income statement and amounts to – 1,764 K€ (30/06/2023: + 3.137K€).
On the consolidated statement of financial position this effect, excluding tax contingencies, amounts to 15,796 K€ (31/12/2023: 20,203 K€) as asset, and to 44,784 K€ (31/12/2023: 42,715 K€) as liability.
Deferred tax related with items directly registered in equity was 22 K€ (credit balance) and relates to hedge accounting. No other deferred tax values related with other equity movements were booked.
It is conviction of the Board that, according to its business plan, the amounts registered in deferred tax assets will be recovered as for the tax carry forward losses.
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Related with Inventories and third parties | 11,380 | 12,261 | 11,012 |
| Related with tax losses carry forward | 2,191 | 2,541 | 1,314 |
| Related with Fixed Tangible Assets / Intang. / Inv. Prop | 312 | 312 | 386 |
| Related with other deductable temporary differences | 8,898 | 5,089 | 4,222 |
| Deferred Tax Assets | 22,781 | 20,203 | 16,934 |
| Related with Fixed Tangible Assets | 2,781 | 2,797 | 2,910 |
| Related with other taxable temporary differences | 8,070 | 6,203 | 3,969 |
| Tax contingencies | 33,934 | 33,714 | 33,791 |
| Deferred Tax Liabilities | 44,784 | 42,715 | 40,671 |
| Current Income Tax | -14,032 | -30,539 | -24,106 |
| Deferred Income Tax | -1,764 | 9,637 | 3,137 |
| Income Tax | -15,796 | -20,903 | -20,969 |
Tax relating to components of other comprehensive income is as follows:
thousand euros 1H24 before tax tax after tax Itens that could be reclassified through income statement: Change in derivative financial instruments fair value -149 22 -127 Change in translation differences 726 0 726 Share of other comprehensive income of investments accounted for using the equity method -227 0 -227 Other comprehensive income -442 0 -442 Other comprehensive income -91 22 -69
thousand euros
| 1H23 | |||
|---|---|---|---|
| before tax | tax | after tax | |
| Itens that could be reclassified through income statement: | |||
| Change in derivative financial instruments fair value | 66 | -10 | 56 |
| Change in translation differences | -524 | 0 | -524 |
| Share of other comprehensive income of investments accounted for using the equity method |
262 | 0 | 262 |
| Other comprehensive income | 10 | 0 | 10 |
| Other comprehensive income | -186 | -10 | -196 |
Provisions for tax contingencies
Provisions for tax contingencies in terms of income tax ended with a value of €33.9 M (31.12.2023: €33.7 M). During the year, contingencies for taxes payable in the statement of financial position decreased by €0.2 million.
The processes that remain open, both in the judicial and grace phases, and which may adversely affect Corticeira Amorim, refer to the 2015 financial year. The 2020 financial year was the last financial year reviewed by the Portuguese tax authorities.
At the end of each year, an analysis of the tax cases is made. The procedural development of each case is important to decide new provisions, or reverse or reinforce existing provisions. Provisions correspond to situations that, for its procedural development or for doctrine and jurisprudence newly issued, indicate a probability of an unfavourable outcome for CORTICEIRA AMORIM and, if that happens, a cash outflow can be reasonably estimated. Note that during the year there were no developments worthy of note in the processes mentioned above. There is only one tax litigation case open as of the June 2024 closing date, totaling €7K, which is fully provisioned.
In addition to the tax provisions referred to above, Corticeira Amorim has recorded a provision to cover the tax benefits to apply for 2023 and applied in previous years. The certification requirement by ANI of SIFIDE projects, the requirement for maintenance of jobs over five years in RFAI projects as well as other constraints to the realization of benefits, has led Corticeira Amorim to record provisions in order to take account of future breaches of such requirements. It should be noted that the determination of the tax benefits can not be concluded, since its constraints extend over several years, in particular as regards the maintenance of jobs.
There are no tax proceedings that have not been provisioned, thus, contingent liabilities are zero.
Corticeira Amorim has a large number of other favourable processes. They refer, in essence, to payments related with autonomous taxation, inspection fees and tax benefits. The value of these processes amounts to 0.8 M€, which is not recorded as part of its assets. Total contingent assets amounts to 4.4 M€ (including amounts paid under the RERD and PERES).
Pillar 2 – Calculation of supplementary tax
Considering the provisions of Council Directive (EU) 2022/2523 of 14 December 2022, concerning the establishment of a global minimum level of taxation for multinational enterprise groups and large domestic groups in the Union, it is verified that the Corticeira Amorim Group falls within the scope of the global minimum tax regime, as it is a multinational enterprise group with annual revenues equal to or exceeding EUR 750,000,000 in the consolidated financial statements of its ultimate parent entity in at least two of the four fiscal years immediately preceding the fiscal year of 2024.
Given that, as of the reporting date, Directive (EU) 2022/2523 of 14 December 2022 has not yet been transposed into Portuguese law, and there is some general uncertainty regarding specific technical aspects (since regulations on this matter are not yet in force in the national territory), and that it only takes effect in the fiscal year beginning on 1 January 2024, the Corticeira Amorim Group does not anticipate having any current tax exposure related to the adoption of Pillar Two, that is, to the payment of a top-up tax with material impact.
To this end, the Corticeira Amorim Group has conducted a preliminary analysis and assessment of its exposure to Pillar Two (which will be subject to adjustment following the approval and entry into force of national legislation on this matter), taking into consideration the potential obligation to pay a top-up tax under the Income Inclusion Rule ("IIR"), corresponding to the difference between the effective tax rate per jurisdiction and the minimum rate of 15%. As a result of this preliminary assessment, the Corticeira Amorim Group does not foresee any materially relevant impact from the adoption of Pillar Two, although, potentially and residually, there may be exposure to a top-up tax in some jurisdictions where it has subsidiaries.
It is worth noting that, although in some jurisdictions the average effective tax rate may be lower than 15%, considering that transition safe harbors (such as the safeguard based on country or jurisdiction-level financial and tax reporting) and specific adjustments provided for in Pillar Two legislation, which result in effective tax rates different from those calculated under paragraph 86 of IAS 12 (which determines that the average effective tax rate is the tax expense [income] divided by the accounting profit), may be applicable, the Corticeira Amorim Group, based on the analyses carried out, considers that it is not exposed to the payment of a material top-up tax.
It should also be mentioned that the Corticeira Amorim Group applies the exception to the recognition and disclosure of information on deferred tax assets and liabilities related to income taxes under Pillar Two, as provided for in the amendments to IAS 12.
Notwithstanding the above, the Corticeira Amorim Group is monitoring its exposure to Pillar Two legislation to make the necessary adjustments regarding the potential obligation to pay a top-up tax, so as to adjust its analysis in accordance with the national legislation that may be approved.
In summary, due to the inherent complexities of the application of the legislation and the calculation of the topup tax, the quantitative impact of European and national legislation to be enacted is not yet reasonably estimable.
The Corticeira Amorim Group is currently working towards the correct implementation of this legislation.
• Income tax (Stament of Financial Position)
| thousandeuros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Income tax-minimum advances | 457 | 395 | 5 |
| Income tax-advances/to be recovered | 4,025 | 6,714 | 2,571 |
| Income tax-with holding | 162 | 227 | 260 |
| Income tax-special payment (RERD) | 637 | 637 | 602 |
| Income tax-special payment (RERD) impairment | -637 | -637 | -602 |
| Income tax-special payment (PERES) | 3,709 | 3,709 | 5,330 |
| Income tax-special payment (PERES) impairment | -3,094 | -3,094 | -3,113 |
| Income tax (assets) | 5,259 | 7,951 | 5,053 |
| Income tax - Estimation and others | 14,524 | 3,946 | 20,040 |
| Income tax (liabilities) | 14,524 | 3,946 | 20,040 |
In 2013, Corticeira Amorim made the payment instituted by DL 151-A / 2013 (RERD) in the amount of 4.3 M€, a payment that does not imply the abandonment by Corticeira Amorim of defending the respective processes. In2023, the final decision on cases won by Corticeira Amorim took place, with an amount of 1.5M€ being received. In this way, the amount that remains open for ongoing proceedings paid under the RERD is 0.6 M€.
At the end of 2016, a special Plan for the Reduction of Indebtedness to the State (PERES) was approved by Decree-Law no. CORTICEIRA AMORIM decided to partially adhere to that measure. In December 2016, approximately 7.4 M€ were paid in respect of Stamp Tax / VAT (2 M€) and Income Tax (IRC) in the amount of 5.4 M€. In 2023, Corticeira Amorim received €1.6M of the amounts paid under PERES, whose impairment was reversed in 2022. In 2024, another €1.6M of the amounts paid under PERES was received. The remaining payments are still pending.
To be noted that Corticeira Amorim was not a debtor to the social security and to the tax authority. Those amounts were subject to court litigation. The disputs that were chosen to adhere are old cases whose values of interest on late payments and fines to be paid, in case of loosing, would be high.
RERD and PERES allowed for the payment of the capital without any payment regarding late payment interests and other costs. Due to the fact that adhesion to RERD and PERES does not imply a mandatory abandonment of the court cases and those processes are still in court, Corticeira Amorim will continue to fight for its rights.
The liability amount under this caption includes the estimate of the income tax payable under the Special Regime for Taxation of Groups of Companies and by some foreign subsidiaries.
16. INVENTORIES
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Goods | 19,187 | 26,820 | 22,853 |
| Raw materials | 289,807 | 332,482 | 257,221 |
| Finished and semi-finished goods | 156,843 | 145,501 | 156,590 |
| Work in progress | 26,098 | 26,391 | 21,427 |
| Finished and semi-finished goods impairments | -9,838 | -12,774 | -8,398 |
| Raw materials impairments | -6,903 | -1,923 | -6,979 |
| Inventories | 475,195 | 516,497 | 442,715 |
| thousand euros | |||
|---|---|---|---|
| Impairment losses | 1H24 | 2023 | 1H23 |
| Initial Balance | 14,698 | 10,380 | 10,380 |
| Increases | 3,865 | 6,225 | 6,068 |
| Decreases | 1,822 | 1,907 | 1,070 |
| End Balance | 16,741 | 14,698 | 15,377 |
Raw materials essentially reproduction cork ("amadia" cork) and virgin cork from pruning the tree ("falca" cork) (Amorim Florestal) and the finished products essentially include a diversity of types of cork stoppers (Amorim Cork), coatings (Amorim Cork Flooring) and composite products (Amorim Cork Composites).
17. TRADE RECEIVABLES
thousand euros
| 1H24 | 2023 | 1H23 | |
|---|---|---|---|
| Gross amount | 256,674 | 213,323 | 275,992 |
| Impairments | -9,722 | -10,243 | -9,525 |
| Trade receivables | 246,952 | 203,080 | 266,466 |
thousand euros
| Impairment losses | 1H24 | 2023 | 1H23 |
|---|---|---|---|
| Initial Balance (reported) | 10,243 | 9,029 | 9,668 |
| Increases | 2,215 | 5,952 | 2,022 |
| Decreases | -2,521 | -4,826 | -1,418 |
| Others | -214 | 88 | -747 |
| End Balance | 9,722 | 10,243 | 9,526 |
Increases and decreases were recognised under the account heading, impairment of assets, in the income statement.
At the end of each period, Trade receivables credit quality is analysed. As a result of the adoption of IFRS 9 to the balances up to 90 days, an expected credit loss is recognised. From 90 to 120 days a 30% impairment register is considered and from 120 to 180 days 60%. Over 180 days as well as all doubtful balances are fully impaired. These rules do not overlap the need for analysis of specific cases.
18. OTHER ASSETS
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Accrued income | 1,253 | 657 | 1,117 |
| Advances to suppliers | 45,491 | 18,151 | 61,289 |
| Deferred costs | 4,447 | 3,128 | 4,411 |
| Other assets | 51,191 | 21,937 | 66,818 |
Other non -current assets include advances to suppliers (1,526 K€), which will only take place over 12 months.
19. CASH AND EQUIVALENTS
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Cash | 311 | 524 | 1,276 |
| Bank Balances | 68,825 | 61,046 | 51,032 |
| Term deposits | 9,692 | 11,752 | 10,185 |
| Others | 26 | 72 | 3,075 |
| Cash and cash equivalents as for stament of financial position |
78,854 | 73,394 | 65,568 |
| Overdrafts | -53,745 | -86,263 | -55,165 |
| Cash and cash equivalents as for cash flow statement | 25,109 | -12,869 | 10,403 |
20. CAPITAL AND RESERVES
• Share Capital
As of June 30, 2024, the share capital is represented by 133,000,000 ordinary registered shares, conferring dividends, with a par value of 1 Euro.
The Board of Corticeira Amorim is authorised to raise the share capital, one or more times, respecting the conditions of the commercial law, up to 250,000,000€.
• Treasury stock
As of June 30, 2024, Corticeira Amorim held no treasury stock.
No purchases were registered during the first half of 2024.
• Legal reserve and share premium
Legal reserve and share premium are under the legal reserve rule and can only be used for (art. 296 CSC - Portuguese commercial law):
- Offset losses in the financial position that cannot be offset by the use of other reserves;
- Offset losses of prior year that cannot be offset by the profit of the year nor the use of other reserves;
- Incorporation in share capital.
Legal reserve and share premium values are booked in Corticeira Amorim, SGPS, S.A. separate accounts.
• Other reserves
Value is composed from other reserves account and prior year's results of Corticeira Amorim, SGPS, S.A. books, as well as non-distributed cumulative results of Corticeira Amorim, SGPS, S.A. subsidiaries.
• Dividends
In the Shareholders' General Meeting of April 22, 2024, a dividend distribution of 0.2 euros per share was approved. The respective payment was made on May 22, 2024.
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Approved dividends | 26,600 | 38,570 | 26,600 |
| Dividends paid | 26,600 | 38,570 | 26,600 |
21. NON-CONTROLLING INTEREST
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Initial Balance | 89,835 | 79,339 | 79,339 |
| In | 0 | 7,833 | 0 |
| Out | 0 | -1,452 | -786 |
| Results | 4,684 | 11,239 | 5,634 |
| Dividends | -3,460 | -5,493 | -634 |
| Exchange Differences | -590 | -1,596 | 10 |
| Others | -299 | -35 | 82 |
| End Balance | 90,170 | 89,835 | 83,645 |
The amount of Dividends corresponds to the amounts paid by the entities to non-controlling interests.
22. INTEREST BEARING DEBT
At year-end, current interest bearing loans was as follows:
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Overdrafts and bank loans | 65,575 | 101,062 | 71,592 |
| Leasing | 2,361 | 1,828 | 1,318 |
| Commercial paper | 114,400 | 99,550 | 50,200 |
| Bond loans | 10,000 | 0 | 0 |
| Interest-bearing loans - current | 192,336 | 212,440 | 123,110 |
Non-current interest bearing loans was as follows:
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Bank loans | 5,993 | 9,558 | 10,594 |
| Leasing | 2,788 | 3,035 | 2,410 |
| Commercial paper | 85,200 | 59,200 | 76,700 |
| Bond loans | 30,000 | 30,000 | 40,000 |
| Interest-bearing loans - non-current | 123,981 | 101,793 | 129,705 |
From non-current and current interest-bearing debt, 238.7 M€ carries floating interest rates. Remaining 77.6 M€ carries fixed interest rate. Average cost, during 2024, for all the credit utilised was 3.8% (2023: 3.1%).
On March 5, 2015, Corticeira Amorim entered into a loan agreement with the EIB in the amount of 35 M €, ten years, with a four-year grace period. This loan allowed Corticeira Amorim to expand substantially its maturity curve at a competitive price.
On 3 December 2020, Corticeira Amorim launched its first Green Bond issue, in the amount of € 40 M, by private subscription, without guarantees and for a period of 5 years, earning interest at a fixed rate every six months and with staggered repayment (25% at the end of the 4th year and 75% at maturity). This issue was an important milestone in its sustainability strategy, reaffirming its ongoing commitment to the application of ESG (Environmental, Social and Governance).
On August 3, 2021, Corticeira Amorim reformulated a program for the issuance of commercial paper of 20 M€, transforming it into Sustainability Linked through the introduction of two KPIs: (i) consumption of energy from renewable sources and (ii) non-renewable waste. valued cork; that will influence the interest rate on issues if the respective target levels are not reached. This program will expire on August 3, 2024.
Corticeira Amorim's 3rd ESG operation - a program for the issuance of green commercial paper of 11.6 M€ was carried out on 17 December 2021 and will expire on 22 December 2026, intended to finance the investment in photovoltaic panels by some companies from the different Business Units of Corticeira Amorim.
During 2022, Corticeira Amorim completed 2 more ESG operations: (i) a 35 M€ green commercial paper issue program maturing on 26 November 2029 and (ii) a green commercial paper issue program of 20 M€ maturing on 20 June 2027; both under the Corticeira Amorim Green Finance Framework – November 2022. Issuances carried out within the scope of said programs are intended to refinance the acquisition of the company Herdade de Rio Frio, S.A., the acquisition of a land of 1,855 hectares and the financing of investment in new plantations of cork oaks, all within the scope of the Intervention Project Corticeira Amorim Forestry.
In the 1st half of 2024, Corticeira Amorim implemented a new Sustainability-Linked commercial paper issuance program, in the amount of €25 M, within the scope of its Sustainability-Linked Financing Framework, May 2024, which was the subject of an Independent Limited Assurance Report issued by KPMG & Associados – S.R.O.C., S.A. in May 2024.
As of June 2024, Corticeira Amorim had credit lines with contractual clauses that include covenants generally used in these types of contracts, namely: cross-default, pari-passu and in some cases negative pledge. On the same date, a foreign subsidiary of Corticeira Amorim was marginally using (€117) a credit facility covered by a fixed asset mortgage guarantee. This asset is recorded in the statement of financial position of that subsidiary.
Corticeira Amorim and two foreign subsidiaries used financing as at 30 June 2024 (a total of around 47.2 M€) to which financial covenants were associated. These consisted, essentially, in the fulfillment of ratios that allow monitoring the financial situation of companies, namely:
- Asset coverage ratio;
- Fixed charge coverage ratio;
- Net income; and
- Net debt/ EBITDA (Interest-bearing loans and equivalent)/ total cash-flow
The above ratios are not restrictive and the requirements contained in the contracts that formalised the referred financing were largely and fully complied with. In the event of non-compliance, there would be a possibility that this would lead to the early repayment of the debts.
In addition, it is important to inform that the capacity to ensure debt service was further enhanced by the existence, as of June 30, 2024, of 268.1 M€ of credit lines approved, but not used.
23. TRADE PAYABLES
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Trade payables - current account | 56,483 | 77,993 | 65,681 |
| Trade payables - confirming | 44,004 | 52,857 | 64,903 |
| Trade payables -invoices pending | 41,820 | 28,151 | 83,430 |
| Trade payables | 142,306 | 159,000 | 214,014 |
From the total values, 54% comes from Amorim Cork (Dec. 2023: 53%) and 27% from Amorim Florestal (Dec. 2023: 27%).
24. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
• Other financial liabilities
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Repayable grants | 7,739 | 7,844 | 9,837 |
| Other | 33 | 456 | 482 |
| Other financial liabilities - non current | 7,772 | 8,300 | 10,320 |
| Repayable grants | 5,781 | 4,333 | 2,848 |
| Accrued costs - supplies and services | 6,612 | 3,454 | 7,498 |
| Accrued costs - others | 11,187 | 9,641 | 9,796 |
| VAT | 10,542 | 6,597 | 10,738 |
| State and social security - withholding and others | 6,684 | 8,983 | 5,713 |
| Other | 21,506 | 18,489 | 19,561 |
| Other financial liabilities - current | 62,312 | 51,497 | 56,153 |
• Other liabilities
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Non-repayable - grants | 5,923 | 5,873 | 6,632 |
| Income to be recognized | 280 | 857 | 1,380 |
| Accrued costs - staff costs | 27,976 | 17,590 | 24,950 |
| Other liabilities - current | 34,180 | 24,320 | 32,962 |
25. PROVISIONS
| thousand euros | |||
|---|---|---|---|
| 1H24 | 2023 | 1H23 | |
| Tax contingencies | 80 | 64 | 649 |
| Guarantees to customers | 761 | 476 | 756 |
| Others | 7,506 | 7,402 | 3,422 |
| Provisions | 8,347 | 7,942 | 4,828 |
Claims by the tax authorities are related with income tax, stamp tax and marginally VAT.
Trade receivables guarantees are essentially from Amorim Cork Flooring and are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Other contingencies essentially include restructuring provisions (3.5 M€), provisions for termination of employment (2.5 M€) and ongoing processes (0.7 M€).
26. IMPAIRMENTS OF ASSETS
| thousand euros | ||
|---|---|---|
| 1H24 | 1H23 | |
| Receivables | 309 | − 530 |
| Tangible, intangible assets and others | − 89 | − 429 |
| Impairments of assets and non-current costs | 220 | − 959 |
Receivables include customers and other debtors.
27. NON-RECURRENT RESULTS
Non-recurring results, as of June 2024, essentially include the discontinuation of a product line (€3.5 M) and restructuring costs (€4M) at Amorim Cork Flooring, as well as the partial reversal of restructuring expenses, recorded in December 2023, arising of the industrial reorganization in a subsidiary of Amorim Cork of €2.2 M.
| thousand euros | ||
|---|---|---|
| 1H24 | 1H23 | |
| Restructuring costs | -4,000 | - |
| Product line discontinuation | -3,496 | - |
| Partial reversal of restructuring costs | 2,200 | - |
| Non-current results | -5,296 | 0 |
28. RELATED-PARTY TRANSACTIONS
Corticeira Amorim consolidates directly in Amorim – Investimentos e Participações, S.G.P.S., S.A. with headoffice at Mozelos (Santa Maria da Feira, Portugal), Amorim Group holding company.
As of June 30, 2024, financial stake of Amorim – Investimentos e Participações, S.G.P.S., S.A. in Corticeira Amorim was 51%, corresponding to 51% of the voting rights.
Corticeira Amorim related party transactions are, in general, due to the rendering of services through some of AIP subsidiaries. Total sales of these subsidiaries to the remaining Corticeira Amorim companies totalled 231 K€ (Jun. 2023: 989 K€), the variation is essentially justified by the companies Amorim Serviços e Gestão, SA and Amorim Viagens e Turismo, SA, which were still considered related parties within the Corticeira Amorim group until 2023.
Cork acquired during 1H2024, from companies held by the main indirect shareholders of Corticeira Amorim, amounted to 1,908 K€ (Jun. 2023: 2,039 K€).
Balances at year-end 2023 and of June 30, 2024 are those resulting from the usual payment terms (from 30 to 60 days) and so are considered to be immaterial.
Services are usually traded with related parties on a "cost plus" basis in the range of 2% to 5%.
29. ATIVITY DURING THE YEAR
Corticeira Amorim sales are composed by a wide range of products that are sold through all the five continents, over 100 countries. Due to this notorious variety of products and markets, it is not considered that this activity is concentrated in any special period of the year. Traditionally first half, specially the second quarter, has been the best in sales; third and fourth quarter switch as the weakest one.
30. OTHER INFORMATION
a) Net profit per share calculation used the average number of issued shares deducted by the number of average owned shares. The non-existence of potential voting rights justifies the same net profit per share for basic and diluted.
| 1H24 | 1H23 | |
|---|---|---|
| Total issued shares | 133,000,000 | 133,000,000 |
| Average nr. of treasury shares | 0 | 0 |
| Average nr. of outstanding shares | 133,000,000 | 133,000,000 |
| Net Profit (thousand euros) | 36,542 | 51,360 |
| Net Profit per share (euros) | 0.275 | 0.386 |
b) Guarantees
In the course of its operational activity, Corticeira Amorim issued guarantees to third parties amounting to 263 K€ on 30/06/2024 (Dec. 2023: 267 K€).
| thousand euros | ||
|---|---|---|
| Beneficiary | Amount | Purpose |
| Government agencies | 77 | Investment support |
| Other | 186 | Other |
| TOTAL | 263 |
c) Financial Assets and Liabilities
Financial Assets are mainly registered in the Loans and Other Receivables caption. As for Financial Liabilities they are included in the Amortized Liabilities caption.
thousand euros
| Financial assets at amortized cost |
Financial assets at fair value |
Derivatives as hedging |
Total | |
|---|---|---|---|---|
| Trade receivables (note 17) | 203,080 | 203,080 | ||
| Other financial assets (note 14) | 35,345 | 8,289 | 189 | 43,823 |
| Cash and cash equivalents (note 19) | 73,394 | 73,394 | ||
| Total as of December 31, 2023 | 311,818 | 8,289 | 189 | 320,296 |
| Trade receivables (note 17) | 246,952 | 246,952 | ||
| Other financial assets (note 14) | 34,438 | 8,283 | 59 | 42,780 |
| Cash and cash equivalents (note 19) | 78,854 | 78,854 | ||
| Total as of June 30, 2024 | 360,244 | 8,283 | 59 | 368,587 |
| thousand euros | ||||||
|---|---|---|---|---|---|---|
| Loans and payables |
Accounts payable |
Agreement to acquire non controlling interests |
Derivatives as hedging |
Derivatives not designated as hedging |
Total | |
| Interest-bearing loans (note 22) | 314,233 | 314,233 | ||||
| Trade payables (note 23) | 159,000 | 159,000 | ||||
| Other financial liabilities (note 24) | 12,177 | 47,552 | 0 | 68 | 59,797 | |
| Total as of December 31, 2023 | 326,410 | 206,553 | 0 | 68 | 0 | 533,030 |
| Interest-bearing loans (note 22) | 316,316 | 316,316 | ||||
| Trade payables (note 23) | 142,306 | 142,306 | ||||
| Other financial liabilities (note 24) | 13,520 | 56,039 | 0 | 525 | 70,084 | |
| Total as of June 30, 2024 | 329,836 | 198,345 | 0 | 525 | 0 | 528,706 |
Corticeira Amorim understands that the fair value of the classes of financial instruments presented does not differ significantly from its book value, taking into account the contractual conditions of each of these financial instruments.
Current assets and liabilities, given their short-term nature, have an accounting value similar to fair value
Non-current net debt is mostly payable at a variable rate. The only fixed-rate was contracted during the year 2015. As there were no significant changes in the reference interest rates, the rate does not differ substantially from the current market conditions, and therefore the fair value does not differ significantly from the value Accounting. The remaining fixed -rate non -current debt corresponds to the Green Bonds.
In the case of Other financial liabilities (mainly grants with no interest bearing measured at fair value at initial recognition), given the initial adjustment differential for recognising in income, maturities and current interest rate levels, difference between book value and fair value is not significant.
d) Reconciliation of Alternative Performance Measures
According to the guidelines of the ESMA (European Sales and Marketing Association) of October 2015 on Alternative Performance Measures (APM), Corticeira Amorim presents below a table to reconcile APMs that are not directly readable in the primary financial statements.
| Management report | Consolidated financial statements |
|---|---|
| Gross margin | Sales - Cost of goods sold and materials consumed + Change in manufactured inventories |
| Gross margin % | Gross margin / (Sales + Change in manufactured inventories) |
| Operational costs | Third party supplies and services + Staff costs + Impairments of assets - Other income and gains + Other costs and losses + Depreciation |
| Working capital | Inventories + trade receivables - trade payables + other operating assets - other operating liabilities |
| Invested capital | Goodwill + tangible fixed assets + intangible assets + right of use + working capital + investment properties + Investments in associates and joint ventures + other operating assets / (liabilities) |
| Net interest-bearing debt / consolidated debt | Current and non-current Interest-bearing loans - cash and cash equivalents |
| Operating profit | Gross margin + operational costs |
| Operating profit before depreciation | Gross margin + Third party supplies and services + Staff costs + Impairments of assets - Other income and gains + Other costs and losses |
| EBITDA | Operating profit before depreciation and non-recurrent |
| EBITDA margin | EBITDA / Sales |
| EBIT | Result before taxes and expenses/financial income |
| Financial autonomy | Equity / Total assets |
31. SUBSEQUENTS EVENTS
No significant events that could materially affect the financial position or the future results of Corticeira Amorim, or the subsidiary companies that make up the consolidated group, occurred prior to the date of issue of this report.
Mozelos, July 29, 2024
The Board of Corticeira Amorim, S.G.P.S., S.A.
António Rios de Amorim (Chairman)
Luisa Alexandra Ramos Amorim (Vice- Chairman)
Cristina Rios de Amorim Baptista (Member)
Nuno Filipe Vilela Barroca de Oliveira (Member)
Fernando José de Araújo dos Santos Almeida (Member)
Juan Ginesta Viñas (Member)
João Nuno de SottoMayor Pinto de Castelo Branco (Member)
José Pereira Alves (Member)
Maria Cristina Galhardo Vilão (Member)
António Manuel Mónica Lopes de Seabra (Member)
Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto (Member)
Ernst & Young Audit & Associados - SROC, S.A. Avenida da Boavista, 36, 3º 4050-112 Porto Portugal
Tel: +351 226 002 015 Fax: +351 226 000 004 www.ey.com
(Translation from the original Portuguese language. In case of doubt, the Portuguese version prevails.)
Limited Review Report on the Condensed Consolidated Financial Statements
Introduction
We have performed a limited review on the accompanying condensed consolidated financial statements of Corticeira Amorim, S.G.P.S., S.A. (the Group), which comprise the Consolidated Statement of Financial Position as at 30 June 2024 (showing a total of 1.444.950 thousand euros and a total equity of 811.139 thousand euros, including a net profit attributable to equity holders of the Group of 36.542 thousand euros), the Consolidated Statement of Income by Nature, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the six months period then ended, and notes to the condensed consolidated financial statements.
Management responsibilities
Management is responsible for the preparation of condensed consolidated financial statements in accordance with International Financial Reporting Standards as endorsed by the European Union, for the purpose of interim financial reporting (IAS 34), and for the design and maintenance of an appropriate internal control system to enable the preparation of consolidated financial statements that are free from material misstatement due to fraud or error.
Auditor's responsibilities
Our responsibility is to express a conclusion on the accompanying condensed consolidated financial statements. We conducted our review in accordance with ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, and other technical and ethical standards and guidelines as issued by the Institute of Statutory Auditors. These standards require that our work is performed in order to conclude whether anything has come to our attention that causes us to believe that the financial statements are not prepared in all material respects in accordance with International Financial Reporting Standards as endorsed by the European Union, for the purpose of interim financial reporting (IAS 34).
A limited review of financial statements is a limited assurance engagement. The procedures performed consisted primarily of making inquiries and performing analytical procedures, and evaluating the evidence obtained.
The procedures performed in a limited review are substantially less in scope than those performed in an audit conducted in accordance with International Standards of Audit (ISA). Accordingly, we do not express an audit opinion on these financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated financial statements of Corticeira Amorim, S.G.P.S., S.A. as of 30 June 2024, have not been prepared, in all material respects, in accordance with International Financial Reporting Standards as endorsed by the European Union, for the purpose of interim financial reporting (IAS 34).
Porto, 27 September 2024
Ernst & Young Audit & Associados – SROC, S.A. Sociedade de Revisores Oficiais de Contas Represented by:
(Signed)
Sandra e Sousa Amorim - ROC nr. 1213 Registered with the Portuguese Securities Market Commission under licence nr. 20160824