Interim / Quarterly Report • Sep 21, 2020
Interim / Quarterly Report
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First semester 2020(1H20) (Audited) Second quarter 2020 (2Q20) (Non audited)
Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails
In accordance with the law, CORTICEIRA AMORIM S.G.P.S., S.A., a public company, presents its:
The second quarter was characterised by a worsening of the public health crisis and by decisions made throughout the world to close down economies to prevent the spread of coronavirus, creating some of the most challenging conditions in decades for the world economy. The impact varied, depending on how the pandemic developed (China began reopening its economy in April), but it was more pronounced in the northern hemisphere, especially in Europe and the US. As the quarter progressed, the earliest affected economies started reopening, while other regions, such as Central America, South America and Africa, began suffering the strongest impact of the epidemic.
Critical monetary and fiscal support measures were implemented during the second quarter. Their magnitude and the fast action of the monetary and fiscal authorities was unprecedented and decisive. The effect was to reduce uncertainty. At the same time, however, the trade dispute between the US and China grew in intensity, increasing instability, uncertainty and risk. It was a period dominated by the unknown, by a willingness to respond, by advances and setbacks in introducing measures, and by expectations, probably excessive, of obtaining a cure or a vaccine for Covid-19 over the short term. More than stabilising, financial markets rose.
The US economy is estimated to have contracted 32.9% compared with the same period of 2019, its biggest every quarterly drop, driven by a sharp fall in consumption of services and in fixed-capital investment. The US contraction in the first half is estimated at about 11%, with a very modest recovery expected in the second half. Even in an optimistic scenario, US economic growth is expected to return to pre-Covid-19 levels only in 2022.
The EU is estimated to have contracted 12.1% in comparison with previous quarter, a bigger drop than second quarter - a contraction of 10.1% - was also more negative than expected. France, in turn, recorded a contraction of 13.8% compared to the same quarter of the previous year. These critical fluctuations reflected a virtual halt in economic activity. Portugal registered an historic contraction of 16.5% in the second quarter.
In China, where the pandemic cycle was further advanced, the economy is estimated to have recovered in the second quarter, with growth of about 11.5% that was strongly supported by exports. However, despite economy is estimated to have contracted 1.6% in the first half of 2020.
As reported in the Management Report accompanying our first-quarter accounts, the Covid-19 pandemic did not have a negative impact on Corticeira Amorim's turnover until the end of March. However, our expectations d at almost full capacity.
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
Activity was impacted by measures to contain the spread of coronavirus and by the temporary closure of some operates. Although some adjustments were made, there were no significant interruptions in the Group's operations, and commercial and production activities remained at normal levels. The response of our employees was exceptional. Even at the most difficult times, they ensured that operations continued and that our customers continued to be supported in the normal way. In this way, Corticeira Amorim upheld its important responsibility of supplying the wine sector, ensuring that everything was done to maintain production and continue serving its customers, even during lockdowns.
Corticeira Amorim is an international company that benefits from its geographical diversification. However, the spread of the pandemic and the containment measures adopted by different countries had a significant impact on the world economy, resulting in big changes in consumption patterns and thus impacting our business. While there was no significant impact on the Group's turnover until the end of March, there was a more severe impact in the second quarter, particularly in May.
At the financial level, the spending controls adopted by the Group were reflected in its results, although logistical costs (specifically air freight) were increased to ensure business continuity and customer service. Revising investment levels, managing working capital and maintaining a solid balance sheet should make it possible to offset the potential negative impact of the pandemic.
All activities celebrating the 150th anniversary of the Corticeira Amorim Group that had not already been implemented were cancelled due to the current situation.
At a time when Corticeira Amorim was preparing to bolster the growth it has achieved, taking advantage of the important investments it has made, the coronavirus crisis has forced the Group to review the set of objectives that it had carefully planned previously.
quarter fell 10.5% due to the drop in economic activities resulting from the Covid-19 pandemic. The foreign exchange effect on sales was immaterial and the consolidation perimeter remained unchanged in relation to the same period of 2019.
In terms of sales by Business Unit (BU), sales by the Cork Stopper BU, the unit with the biggest weight in the total sales of Corticeira Amorim, recorded a 5.4% decline (-11.5% in the second quarter). The Floor and Wall Coverings BU managed to reverse the trend of decreasing sales of the recent past, ending the first half with sales growth of 5.0%. The Raw Materials (-6.3%), Composite Cork (-5.9%) and Insulation (-14.3%) BUs also registered reductions in sales compared with the same period of last year.
-sales ratio increased from 16.6% to 16.8%, mainly reflecting a decrease in the purchase price of raw materials, increased sales prices and operating efficiency gains. These offset the impact on the ratio of the drop in turnover and the increase in operating costs (particularly transport costs and higher impairments). In the context of the pandemic, strict cost controls were strengthened. This contributed to a 2.2% decrease in operating costs in the second quarter, excluding transportation costs and impairments recorded against accounts receivable.
The decrease in income from associate companies was mainly due to the fact that the positive impact of million) in the first half of 2020.
After results attributable to noncompared with the same period of 2019. Excluding the non-recurring impact related to the sale of US Floors, as mentioned above, net earnings would have fallen 9.8%.
Corticeira Amorim is a sound company with an adequate and balanced capital structure. It should be noted that l
Sales by the Raw Materials BU fell 6.3%. This decrease reflected a decline in sales to Group companies as they realigned their inventory levels, as well as a drop in sales to third parties.
in the EBITDA margin (from 11.4% to 8.7%) resulted mainly from an increase in the purchase price of cork for consumption. Cork purchased in the 2017 campaign at a price lower than during the 2018 campaign was used in the first half of the comparable period. Comparing the EBITDA-sales ratio in the second half of 2019 (6.0%), when all cork consumed had been purchased in 2018, with the ratio for the first half of 2020 (8.7%), shows a
The 2020 cork purchasing campaign is proceeding as planned without suffering any significant impacts from the pandemic. Prices have fallen by about 10% and there may be a slight reduction in the quantities purchased due to the decrease in demand.
In terms of projects, it is worth noting that the new technology for producing discs launched in 2019 should improve cork yields, while the automation project will simplify the preparation process (cork classification). The CorkNova project (eradication of TCA from natural cork discs) was extended to all production in 2020. This technology offers additional guarantees in the treatment of discs, constituting an important step towards achieving the highest standards of sensory quality.
The Cork Stopper BU 2019. Sales fell 11.5% in the second quarter.
wine consumption in the HoReCa channel, the collapse of tourism, the drastic reduction in air travel and the temporary closure of some of its customers, particularly in the Champagne and Cognac regions. This was not offset by the growth registered in some countries in the department store segment or even by the online channel.
The cork stoppers for sparkling wines (-12%) and spirits (-7%) segments suffered the greatest corrections. The stoppers for still wines segment showed greater resilience (-2%), particularly Neutrocork stoppers, with sales growth of 13%. Sales fell in all major wine markets with the exception of the US, a notable performance in the current context.
First-half sales of NDtech® service stoppers totalled 36 million units (6M19: 31 million units). Implementation of a technology that will guarantee the eradication of TCA by the end of 2020 is proceeding as planned.
-2.3% year-on-year). The EBITDA margin increased to 19.4% (6M19: 18.8%). Despite the reduction in activity and the increase in operating costs, the increase in the EBITDA margin was achieved through operating improvements in the use of raw materials in the crushing area as well as an increase in prices.
Sales by the Floor and Wall Coverings BU WISE products contributed to this increase with first-half s 2019's full-year sales -resistant, low-cost product expected to generate additional sales in this segment.
Sales growth in North America and Portugal stood out in terms of regional sales.
with generated by the growth in sales, efforts to rationalise and optimise administrative, industrial, logistical and commercial structures contributed to this evolution, as well as the cost savings inherent in not repeating the launch of the Amorim WISE product range this semester, given that its launch last year had affected the margin in the first half of 2019. The improvement in the mix of products sold was also noteworthy, supported by a bigger increase in sales of manufactured products than of new market approaches and the strengthening o -inecosystem) project aimed at lovers of cork and environmentally conscience consumers.
Sales by the Composite Cork BU Despite a favourable USD exchange rate, the fall in sales reflects a decrease in sales volumes and a less favourable sales mix. The migration from ERP to SAP at the end of June, which required a reduction in business activity, also affected sales at the end of the semester.
The biggest sales increases were in the Sport Surfaces, Resilient & Engineering Manufactures and Home Improvement Retail segments. The main drops in sales were in the Footwear, Cork & Corkrubber manufacturers and Construction Speciality Retail segments.
A majority of regional markets performed negatively, with EME (Europe and the Middle East) being the only exception in the Construction segment.
Firstmix and the reduction in activity. A drop in the price of raw materials (cork and non-cork), a higher cork yield, increased efficiency and a reduction in operating costs (travel, marketing, maintenance) prevented a bigger decline.
Sales by the Insulation BU in sales volume. As at the Cork Composite BU, the migration from ERP to SAP at the end of the semester had a negative impact on sales.
EBITDA totalled - - -sales ratio was -0.2% (6M19: -5.0%). The improvement in EBITDA was driven by the use of cork purchased at lower prices, lower personnel costs (reduced overtime) and a reduction in supplies and external services.
As previously mentioned, sales were not affected by any change in the consolidation perimeter. However, Corticeira Amorim's first-half sales were significantly impacted by the Covid-19 pandemic, Floor and Wall Coverings being the only BU that managed to achieve any sales growth over the period.
The increase in the gross margin percentage, which was rose from 48% to 51%, reflects increased operational efficiency and improvements in the mix of products sold.
in personnel costs (-1.8%) compared with the first half of 2019 was mainly due to a reduction in overtime as well as a decrease in the number of employees. Supplies and external services costs increased 3.5% over the same period of last year. The cost increases in transport (+17.6%,reflecting increased air freight) and energy (+11.7%, due to supplier billing adjustments) were partially offset by a reduction in advertising (-61.5%) and travel and accommodation (-74.4%) costs. The increase resulting from the impairment of a Floor and Wall Coverings BU customer in Belgium.
In ter was recorded. The impact of exchange rate differences on assets receivable and liabilities payable, together with the respective foreign exchange hedging measures included under other operating income/gains was -
-sales ratio was 16.8% (6M19: 16.6%).
Non-recurring earnings 1.7 million were recognised in the first half resulting from indemnities for
Financial results were in line with those recorded for the first half of 2019.
the recognition as earnings in the first half of 2019 of the final part of the contingent amount receivable from the sale of US Floors reduction was partially offset by yet owned by Corticeira Amorim at the end of the fist half of 2019.
As normal, it will only be possible to estimate the amount of 2020 investment tax benefits (RFAI and SIFIDE) at the end of the year. As a result, the potential tax gain will only be recorded at the closing of accounts for 2020. In this first half of 2020, the definitive decisions relating to SIFIDE benefits in 2018 were announced and the final tax for 2019 recognised.
-controlling interests, total net income attributable to irst half of 2019.
increase in cash and cash equivalents results from an increase in liquid reserves made as a preventive measure against a potential scarcity of funds. It should also be noted that the dividend was not paid until July, as to improve inventory management and the seasonal variation that usually occurs during this period.
The change in equity reflects the earnings for the period (+ 34.3 million) plus the dividends that were approved at the General Shareholders Meeting ( they contributed to the increase in the Group's liabilities.
-bearing debt offset the increase in cash and cash equivalents and unpaid dividends referred to in the previous paragraph.
rose to 51.4%.
| 1H19 | 1H20 | yoy | 2Q19 | 2Q20 | qoq | ||
|---|---|---|---|---|---|---|---|
| Sales | 412,243 | 391,577 | -5.0% | 209,920 | 187,916 | -10.5% | |
| 204,219 | 203,775 | -0.2% | 101,502 | 98,112 | -3.3% | ||
| 1 ) |
48.0% | 50.8% | + 2.8 p.p. | 46.4% | 51.7% | + 5.3 p.p. | |
| Operating Costs - current | 153,929 | 156,330 | 1.6% | 76,838 | 77,238 | 0.5% | |
| EBITDA - current | 68,287 | 65,945 | -3.4% | 33,503 | 30,177 | -9.9% | |
| EBITDA/Sales | 16.56% | 16.84% | + 0.3 p.p. | 16.0% | 16.1% | + 0.1 p.p. | |
| EBIT - current | 50,290 | 47,445 | -5.7% | 24,663 | 20,874 | -15.4% | |
| Non-current results | 2) | - | -1652 | n.s. | - | -1652 | n.s. |
| Net Income | 40,352 | 34,272 | -15.1% | 21,742 | 14,396 | -33.8% | |
| Earnings per share | 0.303 | 0.258 | -15.1% | 0.173 | 0.108 | -37.5% | |
| Net Bank Debt | 149,912 | 115,625 | - 34,287 |
- | - | - | |
| Net Bank Debt/EBITDA (x) | 3) | 1.20 | 0.94 | -0.26 x | - | - | - |
| EBITDA/Net Interest (x) | 4) | 81.8 | 107.0 | 25.25 x | 73.1 | 103.9 | 30.82 x |
1) Related to Production
2) Figures refer to restructuring costs
3) Current EBITDA of the last four quarters
4) Net interest includes interest from loans deducted of interest from deposits (excludes stamp tax and commissions)
Uncertainty as to the scale, dimension and duration of the current situation makes it difficult to assess the extent of direct and indirect impacts of Covid-19 in the future, this being largely dependent on how much the virus spreads and its impact on the global economy. As a consequence, we expect to see a worldwide drop in wine sales that affects all sparkling wines and Champagne most. Sales to the higher-end segments are likely to be hit hardest, as they are more liable to be affected by the contraction of sales through the restaurant channel. These wines will be bottled sooner or later, but the timing will be out of step with normal production and bottling cycles.
After a very challenging second quarter, a gradual recovery is expected in the second half of 2020. This, however, will be highly dependent on how the pandemic develops and the possible need for additional containment measures in the future. Over the medium term, Corticeira Amorim will seek to maintain its level of activity in order to leverage its growth.
Corticeira Amorim is an international company (more than 90% of its sales are outside Portugal) that is responsible for a activity that is crucial to the sustainability of the entire cork industry, making it is essential to keep the supply chain operating, safe and secure.
Without the cork stoppers produced by Corticeira Amorim, which represent about 72% of the Group's sales, thousands of wine sellers and bottlers across the world could not operate. In the current context of the Covid-19 pandemic, wine is considered, across different regions, as an essential activity that affects thousands of winegrowers who permanently care for their vineyards and the wines stored in their cellars. This approach has enabled the supply chain to continue serving its customers and remain operational while, at the same time, minimising business risks.
Having already ensured its cork supply requirements for the coming year, Corticeira Amorim intends to continue responding without interruption to the needs of its customers across the world by means, in every single product, not a single market, not a single currency) guarantee additional stability.
During the first half of 2020, CORTICEIRA AMORIM did not acquire or dispose of any treasury shares.
As of June 30, 2020, CORTICEIRA AMORIM held no treasury shares.
List of shareholders owning qualifying holdings, as of June 30, 2020:
| Shares Held | Participation | Voting Rights | |
|---|---|---|---|
| Shareholder | (quantity) | (%) | (%) |
| Qualifying interests: | |||
| Amorim Investimentos e Participações, S.A. | 67,830,000 | 51.000% | 51.000% |
| Great Prime, S.A. | 13,725,157 | 10.320% | 10.320% |
| Amorim, Soc. Gestora de Participações Sociais, S.A. | 13,414,387 | 10.086% | 10.086% |
| 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 investment funds managed by Santander Asset Management, SA, SGIIC (communication received by the company on June 6, 2019).
| Shareholder Amorim Investimentos e Participações, SGPS, S.A. (b) |
Shares held | % of Share capital with voting rights |
|---|---|---|
| Directly | 67,830,000 51.000% |
|
| Total attributable | 67,830,000 51.000% |
(b) The voting shares in Amorim Investimentos e Participações, SGPS, SA are wholly owned by three companies, Amorim Holding Financeira, SGPS, SA (11.392%), Amorim Holding II, SGPS, SA (38.608%) and Amorim - Sociedade Gestora de Participações Sociais, SA (50%)) without any of them having a controlling interest in the company, thus ending the imputation chain, pursuant to Art. 20 of the Cod.VM. The share capital and voting rights of these three companies, in turn, are held, respectively, in the case of the first two, directly and indirectly (through Imoeuro SGPS, SA and Oil Investment, BV) by Mrs. Maria Fernanda Oliveira Ramos Amorim and daughters, and, in the case of the third, by Mr. António Ferreira de Amorim, wife and children.
| Shareholder Great Prime S.A. (c) |
Shares held | % of Share capital with voting rights |
||
|---|---|---|---|---|
| Directly | 13,725,157 | 10.320% | ||
| Total attributable | 13,725,157 | 10.320% |
| Maria Fernanda Oliveira Ramos Amorim | Shares held | % of Share capital with voting rights |
|---|---|---|
| Directly | - | - |
| Através da Shareholder Great Prime, S.A. (c) | 13,725,157 | 10.320% |
| Total attributable | 13,725,157 | 10.320% |
(c) Great Prime, SA's share capital is wholly owned by three holding companies: API Amorim Participações Internacionais, SGPS, SA (19.80%), Vintage Prime, SGPS, SA (19.80%) and A Porta da Lua, SASA (60.40%), the latter wholly owned by Maria Fernanda Oliveira Ramos Amorim.
| Shareholder Amorim, Sociedade Gestora de Participações Sociais, S.A. (d) |
Shares held | % of Share capital with voting rights |
|---|---|---|
| Directly | 13.414.387 | 10,086% |
| Total attributable | 13.414.387 | 10.086% |
(d) The capital of Amorim, Sociedade Gestora de Participações Sociais, S.A. is held by Mr. António Ferreira de Amorim and his wife and children, none of which holds a controlling interest in the company..
In compliance with the provisions of paragraphs 6 and 7 of article 14 of CMVM Regulation No. 5/2008, it is stated that during the first half of 2020 no transactions of CORTICEIRA AMORIM shares were made by any of its directors.
No transactions were made of financial instruments related to the securities issued by the Company, either by its managers, by the companies that control CORTICEIRA AMORIM, or by people closely related to them.
These were the verified shareholdings as of June 30, 2020. They remained unchanged on the date of publication of this report.
In accordance with the proposal of the Board of Directors, the Shareholders General Meeting held on June 26, 2020 decided to distribute a dividend of 18.5 euro cents per share. The respective payment was made on July 20, 2020.
Considering the consequences of the pandemic and the inherent worsening of the economic and social context in Portugal and across the world, and in view of the high degree of uncertainty regarding the resumption of normal economic activity, the Board of Directors of Corticeira Amorim decided not to propose in the current year the payment of an extraordinary dividend in December as has been its practice since 2012. This decision reflects the deliberately conservative management of its balance sheet that the Group has followed and takes into account the greater degree of prudence that the current adverse context requires.
Beside these events and until the date on which this report was published, there occurred no other important facts that could materially affect the financial position or future results of Corticeira Amorim or the subsidiary companies belonging to its consolidated group.
In accordance with the requirements of Section 246.1(c) of the Portuguese Securities Market Act, the directors state that, to the best of their knowledge, the financial statements for the half year ended June 30, 2020 and all other accounting documents have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of CORTICEIRA AMORIM, SGPS, SA and the undertakings included in the consolidation taken as a whole. The directors further state that the special section describing the main risks and uncertainties that could impact our business in the next six months.
Mozelos, July 29, 2020
The Board of Directors of CORTICEIRA AMORIM, S.G.P.S., S.A.
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
| thousand euros | ||||
|---|---|---|---|---|
| June 30, | December 31, | June 30, | ||
| Notes | 2020 | 2019 | 2019 | |
| Assets | ||||
| Tangible assets | 8 | 279,168 | 278,600 | 263,680 |
| Intangible assets | 9 | 10,103 | 10,852 | 8,401 |
| Right of use | 10 | 6,278 | 6,037 | 6,848 |
| Goodwill | 9 | 13,592 | 13,744 | 13,621 |
| Biological assets | 0 | 0 | 203 | |
| Investment property | 11 | 5,343 | 5,387 | 5,413 |
| Investments in associates and joint ventures | 12 | 23,385 | 22,366 | 11,566 |
| Other financial assets | 1,800 | 1,550 | 1,635 | |
| Deferred tax assets | 13 | 15,172 | 14,396 | 12,736 |
| Other debtors | 3,327 | 3,906 | 4,536 | |
| Non-current assets | 358,168 | 356,836 | 328,641 | |
| Inventories | 14 | 364,132 | 397,840 | 387,093 |
| Trade receivables | 179,992 | 165,484 | 200,726 | |
| Income tax assets | 5,918 | 11,773 | 11,826 | |
| Other debtors | 15 | 71,107 | 36,967 | 63,034 |
| Other current assets | 15 | 4,073 | 3,108 | 1,925 |
| Cash and cash equivalents | 16 | 79,104 | 22,144 | 24,215 |
| Current assets | 704,326 | 637,316 | 688,819 | |
| Total Assets | 1,062,494 | 994,152 | 1,017,459 | |
| Equity | ||||
| Share capital | 17 | 133,000 | 133,000 | 133,000 |
| Other reserves | 17 | 350,441 | 301,515 | 309,026 |
| Net Income | 34,272 | 74,947 | 40,352 | |
| Non-Controlling Interest | 18 | 28,886 | 30,081 | 34,072 |
| Total Equity | 546,599 | 539,543 | 516,450 | |
| Liabilities | ||||
| Interest-bearing loans | 19 | 51,197 | 59,126 | 58,512 |
| Other financial liabilities | 21 | 26,346 | 23,269 | 29,951 |
| Provisions | 25 | 3,581 | 3,777 | 39,586 |
| Post-employment benefits | 1,724 | 1,687 | 1,637 | |
| Deferred tax liabilities | 13 | 48,411 | 50,370 | 7,121 |
| Non-current liabilities | 131,259 | 138,228 | 136,807 | |
| Interest-bearing loans | 19 | 143,531 | 124,108 | 115,615 |
| Trade payables | 20 | 138,643 | 132,086 | 164,562 |
| Other financial liabilities | 21 | 46,148 | 43,040 | 44,945 |
| Dividend attributed | 17 | 24,605 | 0 | 0 |
| Other liabilities | 21 | 23,487 | 15,235 | 23,693 |
| Income tax liabilities | 13 | 8,221 | 1,911 | 15,387 |
| Current liabilities | 384,636 | 316,380 | 364,202 | |
| Total Liabilities and Equity | 1,062,494 | 994,152 | 1,017,459 |
(this statement should be read with the attached notes to the consolidated financial statements)
| thousand euros | |||||
|---|---|---|---|---|---|
| 2Q20 (non audited) |
2Q19 (non audited) |
Notes | 1H20 | 1H19 | |
| 187,916 | 209,920 | Sales | 7 | 391,577 | 412,243 |
| 91,653 | 106,685 | Costs of goods sold and materials consumed | 197,637 | 217,707 | |
| 1,850 | -1,733 | Change in manufactured inventories | 9,835 | 9,684 | |
| 33,726 | 31,471 | Third party supplies and services | 65,415 | 63,216 | |
| 35,327 | 37,674 | Staff costs | 73,304 | 74,664 | |
| -249 | 496 | Impairments of assets | 22 | 1,251 | -45 |
| 1,639 | 2,777 | Other income and gains | 5,221 | 4,766 | |
| 770 | 1,135 | Other costs and losses | 3,080 | 2,863 | |
| 30,177 | 33,502 | Operating Cash Flow (current EBITDA) | 65,945 | 68,287 | |
| 9,303 | 8,840 | Depreciation | 8, 9, 10, 11 | 18,500 | 17,997 |
| 20,874 | 24,663 | Operating Profit (current EBIT) | 47,445 | 50,290 | |
| -1,652 | 0 | Non-recurrent results | 23 | -1,652 | 0 |
| 549 | 320 | Financial costs | 1,230 | 1,056 | |
| 31 | 35 | Financial income | 170 | 45 | |
| -246 | 1,467 | Share of (loss)/profit of associates and joint-ventures | 12 | 1,302 | 4,412 |
| 18,458 | 25,844 | Profit before tax | 46,037 | 53,691 | |
| 3,646 | 2,914 | Income tax | 13 | 10,078 | 10,908 |
| 14,812 | 22,931 | Profit after tax | 35,959 | 42,783 | |
| 416 | 1,188 | Non-controlling Interest | 21 | 1,687 | 2,431 |
| 14,396 | 21,742 | Net Income attributable to the equity holders of Corticeira Amorim | 34,272 | 40,352 | |
| 0.108 | 0.163 | Earnings per share - Basic e Diluted (euros per share) | 0.258 | 0.303 | |
(this statement should be read with the attached notes to the consolidated financial statements)
| thousand euros | |||||
|---|---|---|---|---|---|
| 2Q20 (non audited) |
2Q19 (non audited) |
Notes | 1H20 | 1H19 | |
| 14,812 | 22,930 | Net Income | 35,959 | 42,783 | |
| Itens that may be reclassified through income statement: | |||||
| 32 | 323 | Change in derivative financial instruments fair value | 13 | -66 | 126 |
| -46 | -1,614 | Change in translation differences and other | 13 | -1,830 | 286 |
| 856 | 25 | Share of other comprehensive income of investments accounted for using the equity method |
13 | -283 | -26 |
| -154 | -148 | Other comprehensive income | 13 | 66 | -138 |
| 688 | -1,413 | Other comprehensive income (net of tax) | -2,113 | 249 | |
| 15,500 | 21,517 | Total Net compreensive income | 33,846 | 43,032 | |
| Attributable to: | |||||
| 14,949 | 20,746 | Corticeira Amorim Shareholders | 32,856 | 40,620 | |
| 551 | 771 | Non-controlling Interest | 990 | 2,412 |
(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 13)
| thousand euros | |||||
|---|---|---|---|---|---|
| 2Q20 (non audited) |
2Q19 (non audited) |
Notes | 1H20 | 1H19 | |
| OPERATING ACTIVITIES | |||||
| 211,365 | 198,809 | Collections from customers | 396,765 | 386,518 | |
| -152,806 | -148,244 | Payments to suppliers | -304,764 | -306,639 | |
| -29,256 | -33,620 | Payments to employees | -65,320 | -67,501 | |
| 29,303 | 16,945 | Operational cash flow | 26,681 | 12,378 | |
| -3,163 | -1,817 | Payments/collections - income tax | -3,206 | -2,706 | |
| 16,773 | 12,785 | Other collections/payments related with operational activities | 39,106 | 23,763 | |
| 42,913 | 27,913 | CASH FLOW FROM OPERATING ACTIVITIES | 62,581 | 33,435 | |
| INVESTMENT ACTIVITIES | |||||
| Collections due to: | |||||
| 453 | 282 | Tangible assets | 780 | 841 | |
| 0 | 1 | Intangible assets | 0 | 1 | |
| -30 | 104 | Financial investments | 504 | 2,509 | |
| 146 | 69 | Other assets | 248 | 198 | |
| -19 | 81 | Interests and similar gains | 52 | 131 | |
| 0 | 0 | Dividends | 0 | 0 | |
| Payments due to: | |||||
| -11,364 | -11,469 | Tangible assets | -19,800 | -22,795 | |
| -429 | 0 | Right of use | -727 | 0 | |
| -5 | -440 | Financial investments | -20 | -505 | |
| -436 | -223 | Intangible assets | -647 | -425 | |
| 0 | -16 | Other assets | 0 | -16 | |
| -11,682 | -11,610 | CASH FLOW FROM INVESTMENTS | -19,611 | -20,060 | |
| FINANCIAL ACTIVITIES | |||||
| Collections due to: | |||||
| 9,927 | 13,794 | Loans | 49,926 | 23,144 | |
| 3,827 | 2,328 | Government grants | 3,850 | 2,377 | |
| 0 | 0 | Transactions with non-controlling interest | 68 | 0 | |
| 506 | 728 | Others | 1,058 | 1,418 | |
| Payments due to: | |||||
| -35,010 | 8,850 | Loans | -44,246 | 0 | |
| -542 | -516 | Interests and similar expenses | -1,082 | -1,184 | |
| 0 | 0 | Transactions with non-controlling interest | 0 | 0 | |
| 0 | -24,605 | Dividends paid to company's shareholders | 0 | -24,605 | |
| -144 | -210 | Dividends paid to non-controlling interest | -144 | -210 | |
| -183 | -2,018 | Government grants | -658 | -2,018 | |
| -124 | -117 | Others | -220 | -213 | |
| -21,743 | -1,766 | CASH FLOW FROM FINANCING | 8,552 | -1,291 | |
| 9,487 | 14,537 | Change in Cash | 51,521 | 12,084 | |
| 8 8 |
-69 | Exchange rate effect | -375 | 157 | |
| 0 | 0 | Perimeter variation | 0 | 0 | |
| 17,583 | -40,967 | Cash at beginning | 1 6 |
-23,988 | -38,740 |
| 27,158 | -26,499 | Cash at end | 1 6 |
27,158 | -26,499 |
(this statement should be read with the attached notes to the consolidated financial statements)
thousand euros
| Attributable to owners of Corticeira Amorim, SGPS, S.A. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Notes | Share capital |
Paid-in Capital |
Hedge Accounting |
Translati on Differen ce |
Legal reserve |
Other reserves |
Net income | Non controllin g interests |
Total Equity |
|
| Balance sheet as at January 1, 2019 | 133,000 38,893 | 6 -4,060 21,495 199,642 | 77,389 | 31,871 498,234 | ||||||
| Profit for the year | 1 7 |
- | - | - | - | 2,977 | 74,412 | -77,389 | - | 0 |
| Dividends | 1 7 |
- | - | - | - | - -24,605 | - | -210 -24,815 | ||
| Consolidated Net Income for the period | 17 e 18 | - | - | - | - | - | - | 40,352 | 2,431 | 42,783 |
| Change in derivative financial instruments fair value | 3 | - | - | 126 | - | - | - | - | 0 | 126 |
| Change in exchange differences | 17 e 18 | - | - | - | 7 6 |
- | - | - | 210 | 286 |
| Other comprehensive income of associates | 12 | - | - | - | -159 | - | 133 | - | 0 | -26 |
| Other comprehensive income | - | - | - | - | - | 92 | - | -230 | -138 | |
| Total comprehensive income for the period | 0 | 0 | 126 | -83 | 0 | 225 | 40,352 | 2,412 | 43,032 | |
| Balance sheet as at June 30, 2019 | 133,000 38,893 | 132 | -4,143 24,471 249,674 | 40,352 | 34,072 516,450 | |||||
| Balance sheet as at January 1, 2020 | 133,000 38,893 | 212 | -4,127 24,471 242,068 | 74,947 | 30,081 539,543 | |||||
| Profit for the year | 1 7 |
- | - | - | - | 2,129 | 72,818 -74,947 | - | 0 | |
| Declared dividend | 1 7 |
- | - | - | - | - -24,605 | - | -144 -24,749 | ||
| Alterações de perímetro | 1 8 |
- | - | - | - | - | - | - | 7 0 |
7 0 |
| Alterações da percentagem de interesse mantendo controlo | 1 8 |
- | - | - | - | - | - | - | -2,111 | -2,111 |
| Consolidated Net Income for the period | 17 e 18 | - | - | - | - | - | - | 34,272 | 1,687 | 35,959 |
| Change in derivative financial instruments fair value | 3 | - | - | -66 | - | - | - | - | - | -66 |
| Change in exchange differences | 17 e 18 | - | - | - | -1,174 | - | - | - | -656 | -1,830 |
| Other comprehensive income of associates | 12 | - | - | - | -1,201 | - | 918 | - | - | -283 |
| Other comprehensive income | - | - | - | - | - | 107 | - | -41 | 66 | |
| Total comprehensive income for the period | 0 | 0 | -66 | -2,375 | 0 | 1,025 | 34,272 | 990 | 33,846 | |
| Balance sheet as at June 30, 2020 | 133,000 38,893 | 146 -6,502 26,600 291,306 | 34,272 | 28,886 546,599 |
(this statement should be read with the attached notes to the consolidated financial statements)
17
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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, 2019 and June 30, 2020, 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, 2020. Shareholders have the capacity to modify these financial statements even after their release.
Except when mentioned, all monetary values are stated
The consolidated financial statements as of June 30, 2020 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 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, 2019.
Changes in accounting policies and disclosures
The standards and interpretations that became effective as of 1 January 2020 are as follows:
IFRS 3 (amendment) January 2020). The intention of changing the standard is to overcome the difficulties that arise when an entity determines whether it has acquired a business or a set of assets.
IAS 1 e IAS 8 (amendment) 1, 2020). The intent of amending the standard is to clarify the definition of material and to align the definition used in international financial reporting standards.
(issued on September 26, 2019, to be applied in financial years beginning on or after January 1, 2020). This reform aims to change the standards of financial instruments, provided for in IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures.
Improvements to international financial reporting standards (issued on March 29, 2018, to be applied to annual periods beginning on or after January 1, 2020). These improvements involve the revision of several standards.
These standards and amendments had no material impact on the consolidated financial statements of Corticeira Amorim.
At the date of approval of these financial statements, there are no standards and interpretations endorsed by European Union, whose mandatory application occurs in future economic years.
The following standards, interpretations, amendments and revisions, with mandatory application in future financial years, have not been endorsed by the European Union, until the date of approval of these financial statements:
IFRS 17 (new) 2021). The general objective of IFRS 17 is to provide a more useful and consistent accounting model for insurance contracts between entities that issue them globally.
IAS 1 (amendment) Non-Current.
Improvements to international financial reporting standards 2018-2020(issued on May 14, 2020, to be applied to annual periods beginning on or after January 1, 2022). These improvements involve the revision of several standards.
IFRS 16 (amendment) June 1, 2020). The general purpose of this change is to allow tenants, as a practical expedient, to treat the changes / concessions related to COVID-19 as not being a modification to the lease. The change does not affect lessor.
IFRS 4 (amendment) periods beginning on or after January 1, 2021). This amendment seeks to address concerns arising from the application of IFRS 9 before the new IFRS 17.
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.
Corticeira Amorim's activity is exposed to a variety of financial risks inherent to its functions, so its monitoring and mitigation is carried out throughout the year. The spread of the Covid-19 pandemic and the measures taken to contain it, had a significant impact on the financial risks to which Corticeira Amorim may be subject, forcing it to strengthen its monitoring and control.
Regarding market risk, although impacted by the pandemic (exchange rate risk, interest rate and raw material prices), were not significantly affected by the current context, with the follow-up procedures reported on December 31, 2019. The volatility of international markets they require scrupulous compliance with the procedures that were already defined, in order to avoid the possible impact of adverse events.
In terms of credit risk, there were no significant changes in the procedures adopted, reinforcing the collection measures that existed previously. Corticeira Amorim is attentive to the issue of customer paymets of accounts receivable, but in a universe of almost 30,000 customers worldwide, the risk is significantly shared. Credit risk is naturally reduced due to the dispersion of sales by a very high number of customers, spread across all continents, with no one representing more than 3% of total sales.
Corticeira Amorim's cash and cash equivalents is spread over another 90 subsidiaries. As of June 30, 2020, there was a significant increase in this item, in order to face any liquidity risk (see next point). At the level of credit risk quality, associated with Cash and cash equivalents, on June 30, 2020, Corticeira Amorim selected (a) financial institutions whose rating does not compromise the realization of these assets. It should be noted public capital) with the following ratings: Moody's Baa3 / P-3; Fitch: BBB- / F3. Additionally, there are about 30 -2; Fitch: BBB + / F2.
CORTICEIRA AMORIM financial department regularly analyses future cash flows so that it can deliver enough liquidity for the group to provide operating needs, and also to comply with credit lines payments. Excess of cash is invested in interest bearing short-term deposits. This police offer the necessary flexibility to conduct its business.
Liquidity risk hedging is achieved by the existence of non-used credit line facilities and, eventually bank deposits. Due to the Covid-19 pandemic, Corticeira Amorim reinforced those lines and programs that were previously available and contracted new financing. Accordingly, Corticeira Amorim ended the semester with d Cash and Cash Equivalents, the Liquidity Reserve at the end of
The Covid-19 pandemic is not expected to threaten Corticeira Amorim's liquidity.
(d) Capitalrisk
CORTICEIRA AMORIM key objective is to assure business continuity, delivering a proper return to its shareholders and the correspondent benefits to its remaining stakeholders. A careful management of the capital employed in the business, using the proper combination of capital in order to reduce its costs, obtains the fulfilment of this objective. In order to achieve the proper combination of capital employed, the Board can obtain from the General Shareholders Meeting the approval of the necessary measures, namely adjusting the
dividend pay-out ratio, the treasury stock, raising capital through new shares issue, sale of assets or other type of measures.
The key indicator for the said combination is the Equity/Assets ratio. CORTICEIRA AMORIM establishes as a target a level of not less than 40% of Equity/Assets ratio attending the company features and of the economic sector that she belongs. Corticeira Amorim is a solid company with an adequate and balanced capital structure (financial autonomy on June 30, 2020 of 51.4%), responsible for a fundamental activity for the sustainability of the entire cork industry. Without the corks produced by Corticeira Amorim, thousands of cellars and bottlers could not operate in the most varied geographies. It is not estimated that any significant adverse effects of the Covid-19 pandemic would jeopardize the continuity of Corticeira Amorim's operations.
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:
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.
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 adve
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.
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.
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.
Th concerned, and taking account of the practices adopted by companies in the sectors in which the Group operates.
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.
Deferred income tax assets are recognised only when there is strong assurance that there will be future taxable income available to use the temporary differences or when there are deferred tax liabilities whose reversal is expected in the same period in which the deferred tax assets are reversed. The assessment of deferred income tax assets is undertaken by management at the end of each period taking account of the expected future performance of the Group.
The credit risk on the balances of accounts receivable is assessed at each reporting date, through the use of a collection matrix, which is based on the history of past collections adjusted for the future expectation of evolution of collections, to determine the non-receipt rate. Expected credit losses on accounts receivable are adjusted by the evaluation made, which may differ from the actual risk incurred in the future.
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 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.
Some contracts give the customer the right to return goods and volume rebates. The right of return and volume discounts give rise to variable remuneration. When estimating the variable consideration, Corticeira Amorim determined that the use of a combination of the most probable quantity method and the value method expected is most appropriate. Before including any amount of variable consideration in the transaction price, Corticeira Amorim considers whether the amount of the variable consideration is restricted. Corticeira Amorim determined that the variable compensation estimates are not limited based on their historical experience, forecast of business and economic conditions. In addition, uncertainty over variable consideration will be resolved in a short period of time.
| Company | Head Office | Country 1H20 2019 | |||
|---|---|---|---|---|---|
| Raw Materials | |||||
| Amorim Natural Cork, S.A. | Vale de Cortiças - Abrantes | PORTUGAL 100% 100% | |||
| Amorim Florestal, S.A. | Ponte de Sôr | PORTUGAL | 100% 100% | ||
| Amorim Florestal II, S.A. | Ponte de Sôr | PORTUGAL | 100% 100% | ||
| Amorim Florestal III, S.A. | Ponte de Sôr | 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% | ||
| 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 | Jijel | ALGERIA | 51% | 51% | |
| Société Nouvelle du Liège, S.A. (SNL) | Tabarka | TUNISIA | 100% 100% | ||
| Société Tunisienne d'Industrie Bouchonnière | Tabarka | TUNISIA | 55% | 55% | |
| Vatrya - Serviços de Consultadoria, Lda. | Funchal - Madeira | PORTUGAL | 100% 100% | ||
| Cork Stoppers 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 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 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 | Plovdiv | BULGARIA | 100% 100% | ||
| Amorim Cork Deutschland GmbH & Co KG | Mainzer | GERMANY | 100% 100% | ||
| Amorim Cork España, S.L. | San Vicente Alcántara | SPAIN | 100% 100% | ||
| Amorim Cork Itália, SPA | Conegliano | ITALY | 100% 100% | ||
| Amorim Cork South Africa (Pty) Ltd. | Cape Town | 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 | 100% 100% | ||
| Biocape - Importação e Exportação de Cápsulas, Lda. | Mozelos | PORTUGAL | 60% | 60% | |
| Bouchons Prioux | Epernay | FRANCE | 91% | 91% | |
| Chapuis, S.L. | Girona | SPAIN | 100% 100% | ||
| Corchera Gomez Barris Corchos de Argentina, S.A. |
(c) (b) |
Santiago Mendoza |
CHILE ARGENTINA |
50% 50% |
50% 50% |
| Corpack Bourrasse, S.A. | Santiago | CHILE | 70% | 70% | |
| Elfverson & Co. AB | (f) | Paryd | SWEDEN | 75% | 53% |
| Equipar, Participações Integradas, Lda. | Coruche | PORTUGAL | 100% 100% | ||
| S.A.S. Ets Christian Bourassé | Tosse | FRANCE | 70% | 70% | |
| FP Cork, Inc. | Califórnia | U. S. AMERICA | 100% 100% | ||
| Francisco Oller, S.A. | Girona | SPAIN | 94% | 94% | |
| Hungarocork, Amorim, RT | Budapeste | HUNGARY | 100% 100% | ||
| Indústria Corchera, S.A. | (c) | Santiago | CHILE | 50% | 50% |
| Korken Schiesser Ges.M.B.H. | Viena | AUSTRIA | 69% | 69% | |
| Olimpiadas Barcelona 92, S.L. | Girona | SPAIN | 100% 100% | ||
| Portocork América, Inc. | Califórnia | U. S. AMERICA | 100% 100% | ||
| Portocork France, S.A.S. | Bordéus | FRANCE | 100% 100% | ||
| Portocork Internacional, S.A. | Santa Maria Lamas | PORTUGAL | 100% 100% | ||
| Portocork Itália, s.r.l | Milão | ITALY | 100% 100% | ||
| Sagrera et Cie | Reims | FRANCE | 91% | 91% | |
| S.A. Oller et Cie | Reims | FRANCE | 94% | 94% | |
| S.C.I. Friedland | Céret | FRANCE | 100% 100% | ||
| S.C.I. Prioux | Epernay | FRANCE | 91% | 91% | |
| Socori, S.A. | Rio Meão | PORTUGAL | 70% | 70% | |
| Socori Forestal, S.L. | Cáceres | SPAIN | 70% | 70% | |
| Société Nouvelle des Bouchons Trescases | (b) | Perpignan | FRANCE | 50% | 50% |
| Trefinos Australia | Adelaide | AUSTRALIA | 91% | 91% | |
| Trefinos Italia, s.r.l | Treviso | ITALY | 91% | 91% | |
| Trefinos USA, LLC | Fairfield, CA | U. S. AMERICA | 91% | 91% | |
| Trefinos, S.L. Victor y Amorim, S.L. |
(c) | Girona Navarrete - La Rioja |
SPAIN SPAIN |
91% 50% |
91% 50% |
| Vinolok a.s | (b) | Jablonec nad Nisou | CZECH REP. | 50% | 50% |
| Wine Packaging & Logistic, S.A. | (b) | Santiago | CHILE | 50% | 50% |
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
| Company | Head Office | Country 1H20 2019 | |||
|---|---|---|---|---|---|
| Floor & Wall Coverings | |||||
| Amorim Cork Flooring, S.A. | S. Paio de Oleiros | PORTUGAL 100% 100% | |||
| Amorim Benelux, BV | Tholen | NETHERLANDS | 100% 100% | ||
| Amorim Deutschland, GmbH | (a) | Delmenhorts | GERMANY | 100% 100% | |
| Amorim Subertech, S.A. | S. Paio de Oleiros | PORTUGAL | 100% 100% | ||
| Amorim Flooring (Switzerland) AG | Zug | SWITZERLAND | 100% 100% | ||
| Amorim Flooring Austria GesmbH | Viena | AUSTRIA | 100% 100% | ||
| Amorim Flooring Investments, Inc. | Hanover - Maryland | U. S. AMERICA | 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 | 84% | 84% | |
| Amorim Flooring UK, Ltd. | Manchester | UN. KINGDOM | 100% 100% | ||
| Amorim Japan Corporation | Tóquio | JAPAN | 100% 100% | ||
| Cortex Korkvertriebs, GmbH | Fürth | GERMANY | 100% 100% | ||
| Dom KorKowy, Sp. Zo. O. | (c) | Kraków | POLAND | 50% | 50% |
| Korkkitrio Oy | Tampere | FINLAND | 51% | 51% | |
| Timberman Denmark A/S | (g) | Hadsund | DENMARK | 100% 100% | |
| Composite Cork | |||||
| 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% | ||
| Amorim Deutschland, GmbH | (a) | Delmenhorts | GERMANY | 100% 100% | |
| Amorim Industrial Solutions - Imobiliária, S.A. | Corroios | PORTUGAL | 100% 100% | ||
| Amorim Sports, Lda. | (e) | Mozelos | PORTUGAL | 70% 100% | |
| Amosealtex Cork Co., Ltd. | (b) | Xangai | CHINA | 50% | 50% |
| Chinamate (Shaanxi) Natural Products Co., Ltd. | Shaanxi | CHINA | 100% 100% | ||
| Chinamate Development Co. Ltd. | Hong Kong | CHINA | 100% 100% | ||
| Mozelos | PORTUGAL | 100% 100% | |||
| Corkeen Europe | (d) | Mozelos | PORTUGAL | 85% | - |
| Corkeen Global | (d) | Mozelos | PORTUGAL | 100% | - |
| Corticeira Amorim - France, SAS | Lavardac | FRANCE | 100% 100% | ||
| Mozelos | PORTUGAL | 100% 100% | |||
| Postya - Serviços de Consultadoria, Lda. | Funchal - Madeira | PORTUGAL | 100% 100% | ||
| Insulation Cork | |||||
| Amorim Cork Insulation, S.A. | Vendas Novas | PORTUGAL 100% 100% | |||
| Holding | |||||
| 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. | (b) | Mozelos | PORTUGAL | 50% | 50% |
| Gröwancork - Estruturas isoladas com cortiça, Lda. | (b) | Mozelos | PORTUGAL | 25% | 25% |
| TDCork - Tapetes Decorativos com Cortiça, Lda. | (b) | Mozelos | PORTUGAL | 25% | 25% |
| Soc. Portuguesa de Aglomerados de Cortiça, Lda. | Montijo | PORTUGAL | 100% 100% |
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.
| Exchage rates | June 30, 2020 |
Average jan-jun 20 |
Average jan-jun 19 |
December 31, 2019 |
|
|---|---|---|---|---|---|
| Argentine Peso | ARS | 78.9640 | 71.0509 | 53.8506 | 67.1031 |
| Australian Dollar | AUD | 1.6344 | 1.6775 | 1.6109 | 1.5995 |
| Lev | BGN | 1.9558 | 1.9558 | 1.9558 | 1.9558 |
| Brazilian Real | BRL | 6.1118 | 5.4104 | 4.4134 | 4.5157 |
| Canadian Dollar | CAD | 1.5324 | 1.5033 | 1.4855 | 1.4598 |
| Swiss Franc | CHF | 1.0651 | 1.0642 | 1.1124 | 1.0854 |
| Chilean Peso | CLP | 924.200 | 895.575 | 786.305 | 842.430 |
| Yuan Renminbi | CNY | 7.9219 | 7.7509 | 7.7355 | 7.8205 |
| Czech Koruny | CZK | 26.7400 | 26.3333 | 25.6705 | 25.4080 |
| Danish Krona | DKK | 7.4526 | 7.4648 | 7.4661 | 7.4715 |
| Algerian Dinar | DZD | 144.503 | 136.775 | 133.320 | 133.159 |
| Euro | EUR | 1.0000 | 1.0000 | 1.0000 | 1.0000 |
| Pound Sterling | GBP | 0.9124 | 0.8746 | 0.8778 | 0.8508 |
| Hong Kong Dollar | HKD | 8.7046 | 8.5519 | 8.7688 | 8.7329 |
| Forint | HUF | 356.580 | 345.261 | 325.297 | 330.530 |
| Yen | JPY | 120.660 | 119.267 | 122.006 | 121.940 |
| Moroccan Dirham | MAD | 10.8972 | 10.7598 | 10.7594 | 10.7212 |
| Zloty | PLN | 4.4560 | 4.4120 | 4.2976 | 4.2568 |
| Ruble | RUB | 79.6300 | 76.6692 | 72.3651 | 69.4519 |
| Swedish Krona | SEK | 10.4948 | 10.6599 | 10.5891 | 10.4468 |
| Tunisian Dinar | TND | 3.2071 | 3.1482 | 3.2767 | 3.1262 |
| Turkish Lira | TRL | 7.6761 | 7.1492 | 6.3578 | 6.6843 |
| US Dollar | USD | 1.1198 | 1.1020 | 1.1195 | 1.1234 |
| Rand | ZAR | 19.4425 | 18.3112 | 16.1757 | 15.7773 |
CORTICEIRA AMORIM is organised in the following Business Units (BU): Raw Materials, Cork Stoppers, Floor and Wall Coverings, Composite Cork and 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 organization 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 said units, and, whenever possible, the reconciliation with the consolidated indicators:
| thousand euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| Raw | Cork | Floor & | Composite | Insulation | Adjustm. Consolida | |||
| 1H20 | Materials | Stoppers | Wall | Cork | Cork | Holding | ted | |
| Trade Sales | 5,530 | 275,055 | 57,431 | 48,511 | 4,990 | 61 | 0 | 391,577 |
| Other BU Sales | 94,626 | 4,594 | 1,498 | 1,685 | 1,010 | 1,746 | -105,159 | - |
| Total Sales | 100,156 | 279,649 | 58,929 | 50,196 | 6,000 | 1,807 -105,159 | 391,577 | |
| EBITDA (current) | 8,747 | 54,357 | 1,033 | 4,058 | -13 | -1,927 | -310 | 65,945 |
| Assets (non-current) | 38,113 | 199,649 | 37,055 | 46,398 | 4,333 | 903 | 31,718 | 358,168 |
| Assets (current) | 171,531 | 364,107 | 67,783 | 56,508 | 9,552 | 53,643 | -18,798 | 704,326 |
| Liabilities | 55,725 | 176,365 | 44,113 | 28,965 | 2,123 | 14,537 | 194,067 | 515,895 |
| Capex | 2,727 | 11,612 | 1,755 | 2,475 | 420 | 64 | 0 | 19,052 |
| Year Depreciation | -2,097 | -11,034 | -3,266 | -1,786 | -268 | -48 | 0 | -18,500 |
| Gains/Losses in associated companies |
0 | 1,307 | 0 | 3 | 0 | -9 | 0 | 1,302 |
| 1H19 | Raw | Cork | Floor & | Composite | Insulation | Holding | Adjustm. Consolida | |
| Materials | Stoppers | Wall | Cork | Cork | ted | |||
| Trade Sales Other BU Sales |
8,936 97,949 |
290,631 5,047 |
55,959 143 |
50,753 2,597 |
5,727 1,271 |
237 900 |
0 -107,907 |
412,243 - |
| Total Sales | 106,885 | 295,678 | 56,101 | 53,351 | 6,998 | 1,137 -107,907 | 412,243 | |
| EBITDA (current) | 12,200 | 55,660 | -2,053 | 6,126 | -353 | -1,928 | -1,366 | 68,287 |
| Assets (non-current) | 33,706 | 178,855 | 38,383 | 40,831 | 4,180 | 1,457 | 31,228 | 328,641 |
| Assets (current) | 208,295 | 363,881 | 63,192 | 53,894 | 10,961 | 1,605 | -13,009 | 688,819 |
| Liabilities | 62,910 | 189,433 | 41,706 | 35,849 | 2,449 | 17,784 | 150,878 | 501,009 |
| Capex | 2,808 | 13,055 | 1,998 | 5,147 | 206 | 113 | 0 | 23,327 |
| Year Depreciation | -2,133 | -10,491 | -3,323 | -1,684 | -300 | -67 | 0 | -17,997 |
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 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.
Cork Stoppers BU 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.
Raw Materials BU is, by far, the most integrated in the production cycle of CORTICEIRA AMORIM, with 90% of its sales to others BU, specially to Cork Stoppers BU. Main products are bark and discs.
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 antivibratic 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 flooring and insulation products are in Europe and for composites products the USA. 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 totalize 417 M by inventories (149 (126 70
| thousand euros | ||||
|---|---|---|---|---|
| Markets | 1H20 | 1H19 | ||
| European Union | 250,294 | 63.9% | 272,767 | 66.2% |
| From which: Portugal | 22,862 | 5.8% | 29,786 | 7.2% |
| Other European countries | 15,831 | 4.0% | 15,744 | 3.8% |
| United States | 80,336 | 20.5% | 74,902 | 18.2% |
| Other American countries | 22,272 | 5.7% | 22,929 | 5.6% |
| Australasia | 18,756 | 4.8% | 19,984 | 4.8% |
| Africa | 4,088 | 1.0% | 5,916 | 1.4% |
| TOTAL | 391,577 | 100% | 412,243 | 100% |
The value of sales relates in its entirety, as in 2019, to contracts covered by IFRS 15 - Revenue from contracts with customers.
| thousand euros | |||||
|---|---|---|---|---|---|
| Land and Buildings |
Machinery | Other | Tangible Fixed Assets in Progress |
Total Tangible Assets |
|
| Gross Value | 273,001 | 429,431 | 35,482 | 40,365 | 778,279 |
| Depreciation and impairments | -163,982 | -326,056 | -30,777 | 0 | -520,815 |
| Opening balance after IFRS 16 adoption (Jan 1, 2019) |
109,019 | 103,375 | 4,705 | 40,365 | 257,464 |
| ACQUISITION OF A SUBSIDIARY | 0 | 0 | 0 | 0 | 0 |
| INCREASE | 3,038 | 7,989 | 1,112 | 10,306 | 22,445 |
| PERIOD DEPREC. AND IMPAIRMENTS | -3,074 | -11,690 | -982 | 0 | -15,746 |
| SALES AND OTHER DECREASES | 166 | -547 | -63 | 0 | -444 |
| TRANSFERS AND RECLASSIFICATIONS | 622 | 2,140 | -207 | -2,737 | -182 |
| TRANSLATION DIFFERENCES | 94 | 21 | 8 | 20 | 143 |
| Gross Value | 277,086 | 437,529 | 35,756 | 47,954 | 798,325 |
| Depreciation and impairments | -167,221 | -336,241 | -31,183 | 0 | -534,645 |
| Closing balance (Jun 30, 2019) | 109,865 | 101,288 | 4,573 | 47,954 | 263,680 |
| Gross Value | 282,493 | 469,983 | 38,047 | 30,416 | 820,940 |
| Depreciation and impairments | -166,386 | -344,808 | -31,146 | 0 | -542,340 |
| Opening balance (Jan 1, 2020) | 116,107 | 125,175 | 6,901 | 30,416 | 278,600 |
| INCREASE | 3,160 | 5,615 | 758 | 8,872 | 18,405 |
| PERIOD DEPREC. AND IMPAIRMENTS | -3,096 | -12,735 | -906 | 0 | -16,737 |
| SALES AND OTHER DECREASES | 0 | -1,043 | -392 | -77 | -1,512 |
| TRANSFERS AND RECLASSIFICATIONS | 2,431 | 4,297 | 86 | -5,988 | 826 |
| TRANSLATION DIFFERENCES | -230 | -124 | -23 | -35 | -412 |
| Gross Value | 287,458 | 474,558 | 38,152 | 33,188 | 833,356 |
| Depreciation and impairments | -169,086 | -353,373 | -31,728 | 0 | -554,188 |
| Closing balance (Jun 30, 2020) | 118,372 | 121,185 | 6,424 | 33,188 | 279,168 |
Impairment losses recognized were recognised on 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.
No interest was capitalised during the period.
| thousand euros | ||
|---|---|---|
| Intangible Assets |
Goodwill | |
| Gross Value | 14,424 | 14,090 |
| Depreciation and impairments | -6,839 | -103 |
| Opening balance (Jan 1, 2019) | 7,585 | 13,987 |
| ACQUISITION OF A SUBSIDIARY | 0 | 0 |
| INCREASE | 897 | 0 |
| PERIOD DEPREC. AND IMPAIRMENTS | -608 | 3 |
| SALES AND OTHER DECREASES | -29 | 0 |
| TRANSFERS AND RECLASSIFICATIONS | 555 | 0 |
| TRANSLATION DIFFERENCES | 1 | -369 |
| Gross Value | 15,834 | 13,721 |
| Depreciation and impairments | -7,432 | -100 |
| Closing balance (Jun 30, 2019) | 8,401 | 13,621 |
| Gross Value | 18,613 | 13,847 |
| Depreciation and impairments | -7,761 | -103 |
| Opening balance (Jan 1, 2020) | 10,852 | 13,744 |
| INCREASE | 647 | 0 |
| PERIOD DEPREC. AND IMPAIRMENTS | -695 | 0 |
| SALES AND OTHER DECREASES | 0 | 0 |
| TRANSFERS AND RECLASSIFICATIONS | -701 | 0 |
| TRANSLATION DIFFERENCES | 0 | -152 |
| Gross Value | 18,559 | 13,695 |
| Depreciation and impairments | -8,456 | -103 |
| Closing balance (Jun 30, 2020) | 10,103 | 13,592 |
Intangible Assets essentially include software, autonomous product development projects and innovative solutions.
With the exception of goodwill, there are no intangible assets of indefinite life.
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
Detail of goodwill according to the following table:
| thousand euros | |||||
|---|---|---|---|---|---|
| Opening | Transalation | End | |||
| 2019 | Balance | Increase | Decrease | differences | Balance |
| Bourrassé | 9,745 | 9,745 | |||
| Elfverson | 4,242 | -341 | 3,901 | ||
| Korkkitrio | 0 | 98 | 98 | ||
| Goodwill | 13,987 | 98 | 0 | -341 | 13,744 |
| Goodwill | 13,987 | 98 | 0 | -341 | 13,744 |
|---|---|---|---|---|---|
| m | ilhares de euros | ||||
| Opening | Transalation | End | |||
| 1H20 | Balance | Increase | Decrease | differences | Balance |
| Bourrassé | 9,745 | 9,745 | |||
| Elfverson | 3,901 | -152 | 3,749 | ||
| Korkkitrio | 98 | 98 | |||
| Goodwill | 13,744 | 0 | 0 | -152 | 13,592 |
As referred to in b) in Note 2 of the annual report, impairment tests are performed annually. For the tests are projected cash-flows, based on the budget and plans ratified by management. In the interim report of June 30, the business plans and the potential effect of the Covid-19 pandemic on previously approved plans were reviewed.
In the annual impairment tests the growth assumptions took into account the expected growth in the wine, champagne and sparkling wine market, as well as the evolution of the subsidiaries' market share in this business. In the tests, growth rates of 14% and 22% were used for Bourrassé and Elfverson, respectively, for the period 2020-2022 and 2% for the following years. The discount rate used was 6.98%.
The result of the annual impairment tests showed that the recoverable amounts are sufficiently higher than the accounting values, even in the case of unfavourable developments in the main variables. Even in a scenario of loss of 25% of sales, inherent to Covid-19, the group would not recognize impairment losses in the goodwill recorded.
At the date of approval of the accounts for June 30, it was analyzed that, even projecting a variation in sales and profitability in the second half, similar to the first half, the Group would not recognize impairment in the goodwill recognized over Bourrassé and Elfverson.
| thousand euros | |
|---|---|
| Right of use | |
| Gross Value | 10,202 |
| Depreciation and impairments | -3,473 |
| Opening balance after IFRS 16 adoption (Jan 1, 2019) |
6,729 |
| ACQUISITION OF A SUBSIDIARY | 0 |
| INCREASE | 1,091 |
| PERIOD DEPREC. AND IMPAIRMENTS | -972 |
| SALES AND OTHER DECREASES | 0 |
| TRANSFERS AND RECLASSIFICATIONS | 0 |
| TRANSLATION DIFFERENCES | 0 |
| Gross Value | 11,293 |
| Depreciation and impairments | -4,445 |
| Closing balance (Jun 30, 2019) | 6,848 |
| Gross Value | 10,187 |
| Depreciation and impairments | -4,150 |
| Opening balance (Jan 1, 2020) | 6,037 |
| INCREASE | 739 |
| PERIOD DEPREC. AND IMPAIRMENTS | -769 |
| SALES AND OTHER DECREASES | 0 |
| TRANSFERS AND RECLASSIFICATIONS | 271 |
| TRANSLATION DIFFERENCES | 0 |
| Gross Value | 10,516 |
| Depreciation and impairments | -4,238 |
| Closing balance (Jun 30, 2020) | 6,278 |
| thousand euros | |
|---|---|
| Investment Property |
|
| Gross Value | 22,071 |
| Depreciation and impairments | -16,589 |
| Opening balance (Jan 1, 2019) | 5,481 |
| ACQUISITION OF A SUBSIDIARY | 0 |
| INCREASE | 0 |
| PERIOD DEPREC. AND IMPAIRMENTS | -520 |
| SALES AND OTHER DECREASES | -11 |
| TRANSFERS AND RECLASSIFICATIONS | 462 |
| TRANSLATION DIFFERENCES | 0 |
| Gross Value | 22,050 |
| Depreciation and impairments | -16,637 |
| Closing balance (Jun 30, 2019) | 5,413 |
| Gross Value | 22,116 |
| Depreciation and impairments | -16,730 |
| Opening balance (Jan 1, 2020) | 5,387 |
| INCREASE | 15 |
| PERIOD DEPREC. AND IMPAIRMENTS | -316 |
| SALES AND OTHER DECREASES | 0 |
| TRANSFERS AND RECLASSIFICATIONS | 258 |
| TRANSLATION DIFFERENCES | 0 |
| Gross Value | 22,121 |
| Depreciation and impairments | -16,778 |
| Closing balance (Jun 30, 2020) | 5,343 |
The amount of 5,343 31, 2019: 5,387 land and buildings that are not used in production.
The fair value of the Investment Properties in the case of the land and building in Corroios (determined on the basis of an independent valuation) is close to the value recorded in the accounts. This item also includes a property (Interchampagne with a value of 1,410 K ) with a recent valuation that corresponds to the book value. At the end of December 31, 2019, management made an analysis of these valuations and considered that they remained up to date.
These properties are not generating income and conservation and repair costs are insignificant.
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Opening Balance | 22,366 | 9,537 | 9,537 |
| In / Out | 0 | 11,000 | 0 |
| Results | 1,302 | 2,708 | 2,056 |
| Dividends | 0 | -500 | 0 |
| Exchange Differences | -1,201 | -1,071 | -159 |
| Other | 918 | 693 | 133 |
| End Balance | 23,385 | 22,366 | 11,566 |
| Equity method | 1,302 | 2,708 | 2,056 |
| Gains on disposal of associates | 0 | 2,874 | 2,356 |
| Share of (loss)/profit of associates and joint-ventures |
1,302 | 5,581 | 4,412 |
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.
Gain on the disposal of associates in the last year due to the final recognition of the contingent amount receivable from the sale of US Floors, occurred in 2016, which was received in that year.
| thousand euros | ||||
|---|---|---|---|---|
| 1H20 | ||||
| Share in net assets |
Goodwill | Total | Contribution to net income |
|
| Trescases | 5,320 | 1,715 | 7,035 | 585 |
| Wine Packaging & Logistic | 1,154 | 0 | 1,154 | 0 |
| Corchos Argentina | 3,141 | 0 | 3,141 | -239 |
| Vinolok | 11,650 | 0 | 11,650 | 961 |
| Others | 405 | 0 | 405 | -5 |
| End Balance | 21,670 | 1,715 | 23,385 | 1,302 |
| 1H19 | ||||
|---|---|---|---|---|
| Share in net assets |
Goodwill | Total | Contribution to net income |
|
| Trescases | 5,259 | 1,715 | 6,974 | 1,274 |
| Wine Packaging & Logistic | 1,308 | 0 | 1,308 | 0 |
| Corchos Argentina | 2,891 | 0 | 2,891 | 637 |
| Others | 393 | 0 | 393 | 144 |
| End Balance | 9,851 | 1,715 | 11,566 | 2,056 |
In addition to the above, the Group has significant influence on a set of other individually immaterial associates.
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 ment and amounts to 1,847 9: 1, 331
On the consolidated statement of financial position this effect, excluding tax contingencies, amounts to 15,172 9: 14,396 141 9: 7,676
According to IFRIC 23, the deferred tax liability item now includes provisions for tax contingencies in the amount of 41.3 In September 2019, the IFRS Interpretation Commitee issued a document in which it concluded that a company is required to present liabilities relating to uncertainty over income ta treatment in current tax or deferred tax. Corticeira Amorim considers that taking into account the previous treatment (in which these liabilities were presented as non-current) and the fact that these contingencies do not imply a transfer of economic resources in the short term, it would be more appropriate to present it under the caption Deferred tax.
Deferred tax related with items directly registered in equity was -11 debt 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 | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Related with Inventories and third parties | 7,662 | 6,760 | 5,950 |
| Related with tax losses carry forward | 2,884 | 2,650 | 2,257 |
| Related with Fixed Tangible Assets / Intang. / Inv. Prop | 1,102 | 1,102 | 1,247 |
| Related with other deductable temporary differences | 3,523 | 3,884 | 3,281 |
| Deferred Tax Assets | 15,172 | 14,396 | 12,736 |
| Related with Fixed Tangible Assets | 3,835 | 4,217 | 3,952 |
| Related with other taxable temporary differences | 3,305 | 3,459 | 3,169 |
| Tax contingencies | 41,270 | 42,694 | 0 |
| Deferred Tax Liabilities | 48,411 | 50,370 | 7,121 |
| Current Income Tax | -11,925 | -13,283 | -10,352 |
| Deferred Income Tax | 1,847 | 1,331 | -556 |
| Income Tax | -10,078 | -11,951 | -10,908 |
Tax relating to components of other comprehensive income is as follows:
| thousand euros | |||
|---|---|---|---|
| 1H20 | |||
| before tax | tax | after tax | |
| Itens that could be reclassified through income statement: | |||
| Change in derivative financial instruments fair value | -77 | 11 | -66 |
| Change in translation differences | -1,830 | 0 | -1,830 |
| Share of other comprehensive income of investments accounted for using | -283 | 0 | -283 |
| Other comprehensive income | 66 | 0 | 66 |
| Other comprehensive income | -2,124 | 11 | -2,113 |
| the equity method |
| thousand euros | ||||
|---|---|---|---|---|
| 1H19 | ||||
| before tax | tax | after tax | ||
| Itens that could be reclassified through income statement: | ||||
| Change in derivative financial instruments fair value | 104 | 22 | 126 | |
| Change in translation differences | 286 | 0 | 286 | |
| Share of other comprehensive income of investments accounted for using the equity method |
-26 | 0 | -26 | |
| Other comprehensive income | -138 | 1 | -138 | |
| Other comprehensive income | 226 | 22 | 249 |
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Income tax - minimum advances | 13 | 9 | 24 |
| Income tax - advances / to be recovered | 5,744 | 11,603 | 11,604 |
| Income tax - withholding | 162 | 162 | 198 |
| Income tax - special payment (RERD) | 2,093 | 2,093 | 2,587 |
| Income tax - special payment (RERD) impairment | -2,093 | -2,093 | -2,587 |
| Income tax - special payment (PERES) | 5,383 | 5,383 | 5,383 |
| Income tax - special payment (PERES) impairment | -5,383 | -5,383 | -5,383 |
| Income tax (assets) | 5,918 | 11,773 | 11,826 |
| Income tax - Estimation and others | 8,221 | 1,911 | 1,924 |
| Income tax (liabilities) | 8,221 | 1,911 | 15,387 |
In 2013, Corticeira Amorim made the payment instituted by DL 151-A / a payment that does not imply the abandonment by Corticeira Amorim of defending the respective processes. In 2016, a final decision was made on one of the paid processes relating to stamp taxes, which was partially won process . In this way, the amount that remains open for ongoing proceedings p
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,
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 income tax payable by some foreign subsidiaries when the tax return for the year 2019 is presented.
In the year ended December 31, 2019, the main movement in tax contingencies corresponds to the reclassification of contingencies to deferred taxes (Note 25) resulting from the application of IFRIC 23 (note 2 point a) of the annual report), with the item ending with 42.7 million euros. As of June 30, 2020, the value of the
During the year, the provisions in the Balance Sheet decreased by 1.4 This variation is essentially due to the receipt of final declarations from SIFIDE 2018 and the calculation for the purposes of estimating SIFIDE 2019.
CORTICEIRA AMORIM's claims are pending, both in the judicial phase and in the non-contentious phase, and which may adversely affect CORTICEIRA AMORIM, refer to the financial years 1997, 1998, 1999 and 2003 to 2015.The most recent fiscal year analysed by Portuguese tax authorities was 2016.
These tax cases are basically related with questions like non-remunerated guarantees given between group companies, group loans (stamp tax), interest costs of holding companies (SGPS), and with the acceptance as tax costs of losses related with the closing of subsidiaries.
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.
The value of tax processes to date for the 2019 accounts amounted to 8.1
In addition to the tax provisions referred to above, CORTICEIRA AMORIM has recorded a provision to cover the tax benefits to apply for 2019 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 constra ints 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 amounts paid under the RERD and PERES).
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Goods | 11,595 | 18,169 | 18,912 |
| Raw materials | 185,767 | 218,654 | 203,095 |
| Finished and semi-finished goods | 138,652 | 134,078 | 137,843 |
| Work in progress | 35,734 | 34,431 | 34,812 |
| Finished and semi-finished goods impairments | -5,998 | -5,764 | -5,373 |
| Raw materials impairments | -1,617 | -1,728 | -2,197 |
| Inventories | 364,132 | 397,840 | 387,093 |
| thousand euros | |||
|---|---|---|---|
| Impairment losses | 1H20 | 2019 | 1H19 |
| Initial Balance | 7,492 | 6,659 | 6,659 |
| Increases | 779 | 1,887 | 2,190 |
| Decreases | 655 | 1,054 | 1,279 |
| End Balance | 7,616 | 7,492 | 7,571 |
(Raw Material BU), products and work in progress essentially include boiled cork and discs (Raw Materials BU) and finished products essentially include a variety of types of cork stoppers (Cork Stoppers BU), coverings (Floor and Wall Coverings BU) and composite products (Composite Cork BU).
Increases in impairment are booked on Costs of goods sold and materials consumed in the income statement.
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Advances to suppliers | 35,952 | 6,078 | 34,380 |
| Hedge accounting assets | 923 | 111 | 85 |
| VAT | 18,454 | 21,336 | 16,988 |
| Stamp tax/VAT - special payment (PERES) | 2,051 | 2,051 | 2,051 |
| Stamp tax/VAT - special payment (PERES) impairment | -2,051 | -2,051 | -2,051 |
| Others | 15,778 | 9,442 | 11,581 |
| Other debtors | 71,107 | 36,967 | 63,034 |
As of December 31, 2020 and 2019, there were no overdue in the amounts of VAT.
Other non-current debtors include advances to suppliers (3,327 hich will only be fulfilled for more than 12 months.
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Accrued income | 325 | 292 | 169 |
| Deferred costs | 3,749 | 2,817 | 1,756 |
| Other assets | 4,073 | 3,108 | 1,925 |
40
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Cash | 221 | 368 | 312 |
| Bank Balances | 70,200 | 13,829 | 10,715 |
| Term deposits | 7,854 | 7,759 | 12,989 |
| Others | 829 | 187 | 199 |
| Cash and cash equivalents as for stament of financial position |
79,104 | 22,144 | 24,215 |
| Overdrafts | -51,946 | -46,131 | -50,715 |
| Cash and cash equivalents as for cash flow statement |
27,158 | -23,988 | -26,499 |
As of June 30, 2020, 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 conditio
As of June 30, 2020, CORTICEIRA AMORIM held no treasury stock.
No purchases were registered during the first of 2020.
Legal reserve and share premium are under the legal reserve rule and can only be used for (art. 296 CSC - Portuguese commercial law):
Legal reserve and share premium values are booked in Corticeira Amorim, SGPS, S.A. separate accounts.
orticeira Amorim, SGPS, S.A. books, as well as non-distributed cumulative results of Corticeira Amorim, SGPS, S.A. subsidiaries.
41
June 26, 2020, a dividend distribution of 0.185 euros per share was approved. The respective payment was made on July 20, 2020.
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Approved dividends | 24,605 | 35,910 | 24,605 |
| Dividends paid | 0 | 35,910 | 24,605 |
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Initial Balance | 30,081 | 31,871 | 31,871 |
| I n |
70 | 562 | 0 |
| Out | -2,111 | -4,397 | -230 |
| Results | 1,687 | 4,514 | 2,431 |
| Dividends | -144 | -1,901 | -210 |
| Exchange Differences | -656 | -380 | 210 |
| Others | -41 | -188 | 0 |
| End Balance | 28,886 | 30,081 | 34,072 |
The amount of Dividends corresponds to the amounts paid by the entities to non-controlling interests.
Out value is essentially related to the acquisition of 30% of Elfverson.
At year-end, current interest bearing loans was as follows:
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Overdrafts and bank loans | 70,942 | 67,426 | 74,936 |
| Leasing | 2,589 | 1,683 | 1,680 |
| Commercial paper | 70,000 | 55,000 | 39,000 |
| Interest-bearing loans - current | 143,531 | 124,108 | 115,615 |
Non-current interest bearing loans was as follows:
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Bank loans | 27,620 | 34,507 | 33,205 |
| Reimbursable grants | 47 | 47 | 70 |
| Leasing | 3,531 | 4,572 | 5,237 |
| Commercial paper | 20,000 | 20,000 | 20,000 |
| Interest-bearing loans - non-current | 51,197 | 59,126 | 58,512 |
From non-current and current interest bearing debt, 166,029 28,699 Average cost, during 1H20, for all the credit utilized was 0.91% (2019: 1.07%).
On March 5, 2015, Corticeira Amorim entered into a loan agreement with the EIB in the amount of years, with a four-year grace period. This loan allowed Corticeira Amorim to expand substantially its maturity curve at a competitive price.
In 2019 Corticeira Amorim contracted a commercial paper program with guarantee of subscription by a bank entity. The program has an effective maturity of 3 years, so the emissions made during the first two years are classified as non-current. Only Corticeira Amorim has the option to revoke the program when the first year of the contract has passed.
As of June 30, 2020, CORTICEIRA AMORIM had credit lines with contractual clauses that include covenants generally used in these type of contracts, namely: cross-default, pari-passu and in some cases negative pledge.
As of June 30, 2020, three foreign subsidiaries have a 7 million euro loan mortgage guarantee on assets. These assets are booked on Statement of financial position of those subsidiaries.
CORTICEIRA AMORIM uses two credit lines on June 30, 2020 (for a total of 7.0 covenants. These included ratios accomplishment that allowed for an accompaniment of the financial position of the company, namely:
The above ratios are not restrictive and the requirements contained in the contracts that formalized 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, 2020, of 211 million euros of credit lines approved, but not used, credit lines and 79 million euros of cash and cash equivalents.
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Trade payables - current account | 49,142 | 63,220 | 65,112 |
| Trade payables - confirming | 59,208 | 59,994 | 70,152 |
| Trade payables -invoices pending | 30,293 | 8,872 | 29,298 |
| Trade payables | 138,643 | 132,086 | 164,562 |
From the total values, 52% comes from Cork Stoppers BU (2019: 53%) and 26% from Raw Materials BU (2019: 21%).
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Repayable grants | 15,781 | 12,568 | 13,759 |
| Agreement to acquire non-controlling interests | 10,088 | 10,007 | 15,283 |
| Other | 477 | 695 | 909 |
| Other financial liabilities - non current | 26,346 | 23,269 | 29,951 |
| Repayable grants | 2,377 | 2,464 | 3,684 |
| Agreement to acquire non-controlling interests | 4,996 | 4,955 | 4,956 |
| Accrued costs - supplies and services | 5,438 | 3,545 | 6,469 |
| Accrued costs - others | 9,199 | 8,337 | 8,654 |
| Other deferred income - others | 81 | 93 | 104 |
| VAT | 9,636 | 8,470 | 8,744 |
| State and social security - withholding and others | 4,526 | 5,907 | 5,160 |
| Other | 9,895 | 9,269 | 7,173 |
| Other financial liabilities - current | 46,148 | 43,040 | 44,945 |
In Other financial liabilities is included a value of 18 Dec. 2019: 234 exchange rate hedge derivatives.
The agreement to acquire non-controlling interests results from the purchase of S.A.S. ETS CHRISTIAN provides for the subsequent acquisition by 2022 of the remaining 40% ("agreement for acquisition of noncontrolling interests") at a price which, based on the value already paid for the first 60%, will also depend on the evolution of BOURRASSÉ's performance in next years. The first tranche of 10% was acquired during the month of July 2019, and in July 2020 the second tranche corresponding to + 10% of Bourrassé will be acquired.
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Non-repayable - grants | 3,138 | 3,081 | 3,443 |
| Accrued costs - staff costs | 20,350 | 12,154 | 20,250 |
| Other liabilities - current | 23,487 | 15,235 | 23,693 |
| thousand euros | ||
|---|---|---|
| 1H20 | 1H19 | |
| Receivables | 1,133 | -20 |
| Tangible, intangible assets and others | 119 | -25 |
| Impairments of assets and non-current costs | 1,251 | -45 |
Receivables include customers and other debtors.
As for the non-recurring amounts, they are related to restructuring expenses of Cork Stoppers BU, Composite Cork BU and Floor and wall covering BU in Portugal.
| thousand euros | ||
|---|---|---|
| 1H20 | 1H19 | |
| Restructuring costs | -1,652 | 0 |
| Non-current results | -1,652 | 0 |
CORTICEIRA AMORIM consolidates directly in AMORIM INVESTIMENTOS E PARTICIPAÇÕES, S.G.P.S., S.A. with head-office at Mozelos (Santa Maria da Feira, Portugal), Amorim Group holding company.
As of June 30, 2020, 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 (Amorim Serviços e Gestão, S.A., Amorim Viagens e Turismo, S.A., OSI Sistemas Informáticos e Electrotécnicos, Lda.). Total sales of these subsidiaries to the remaining CORTICEIRA AMORIM companies totalled 6,425 Jun. 2019: 5,885
Sales from Quinta Nova, S.A., AMORIM - INVESTIMENTOS E PARTICIPAÇÕES, S.G.P.S., S.A. subsidiary to CORTICEIRA AMORIM subsidiaries reached 2 Jun. 2019: 21 Purchases totaled 5 Jun. 2019: 243
Cork acquired during 1H2020, from companies held by the main indirect shareholders of CORTICEIRA AMORIM, amounted to 928 Jun. 2019: 533
Balances at year-end 2019 and June 30, 2020 are those resulting from the usual payment terms (from 30 to 60 days) and so are considered to be immaterial.
| thousand euros | |||
|---|---|---|---|
| 1H20 | 2019 | 1H19 | |
| Tax contingencies | 705 | 707 | 37,459 |
| Guarantees to customers | 722 | 936 | 582 |
| Others | 2,154 | 2,133 | 1,544 |
| Provisions | 3,581 | 3,777 | 39,586 |
In the year ended December 31, 2019, the movement in Income tax contingencies corresponds to the reclassification of contingencies to deferred taxes (Note 15) resulting from the issue of IFRIC 23 (note 2 point a)), in the amount of 40.2 million euros.
Claims by the tax authorities are related with income tax, stamp tax and marginally VAT.
Trade receivables guarantees are essentially from Floor and wall coverings BU and are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Other contingencies include provisions for termination of employment and ongoing law suits.
46
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.
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
| 1H20 | 1H19 | |
|---|---|---|
| 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) | 34,272 | 40,352 |
| Net Profit per share (euros) | 0.258 | 0.303 |
During its operating activities CORTICEIRA AMORIM issued in favour of third-parties guarantees amounting to 1,806 in June 2020 (Dec. 2019: 1,62
| thousand euros | ||
|---|---|---|
| Beneficiary | Amount | Purpose |
| Government agencies | 900 | Capex grants / subsidies |
| Other | 906 | Miscellaneous guarantees |
| TOTAL | 1,806 |
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 |
Derivatives not designated as hedging |
Total | |
| Trade receivables | 165,484 | 165,484 | |||
| Other debtors (note 15) | 30,778 | 111 | 30,889 | ||
| Other financial assets | 1,550 | 1,550 | |||
| Cash and cash equivalents (note 16) | 22,144 | 22,144 | |||
| Total as of December 31, 2019 |
218,405 | 1,550 | 111 | 0 | 220,066 |
| Trade receivables | 179,992 | 179,992 | |||
| Other debtors (note 15) | 34,232 | 923 | 35,154 | ||
| Other financial assets | 1,800 | 1,800 | |||
| Cash and cash equivalents (note 16) | 79,104 | 79,104 | |||
| Total as of June 30, 2020 | 293,328 | 1,800 | 923 | 0 | 296,050 |
| Agreement to Derivatives Loans and Accounts acquire non Derivatives not Dividend payables payable controlling as hedging designated attributed interests as hedging Interest-bearing loans (note 19) 183,234 |
Total 183,234 132,086 |
|---|---|
| Trade payables (note 20) 132,086 |
|
| Other financial liabilities (note 21) 15,032 36,081 14,962 23 212 |
66,310 |
| Total as of December 31, 198,266 168,167 14,962 2 3 212 2019 |
0 381,630 |
| Interest-bearing loans (note 19) 194,728 |
194,728 |
| Trade payables (note 20) 138,643 |
138,643 |
| Other financial liabilities (note 21) 18,158 39,017 15,084 23 212 |
72,494 |
| Dividend attributed | 24,605 24,605 |
| Total as of June 30, 2020 212,886 177,660 15,084 2 3 212 24,605 |
430,470 |
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.
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 recognizing in income, maturities and current interest rate levels, difference between book value and fair value is not significant.
CORTICEIRA AMORIM, SGPS, S.A. CONSOLIDATED ANNUALREPORT 2019
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 |
| Financial autonomy | Equity / Total assets |
In accordance with the proposal of the Board of Directors, the Shareholders General Meeting held on June 26, 2020 decided to distribute a dividend of 18.5 euro cents per share. The respective payment was made on July 20, 2020.
Considering the consequences of the pandemic and the inherent worsening of the economic and social context in Portugal and across the world, and in view of the high degree of uncertainty regarding the resumption of normal economic activity, the Board of Directors of Corticeira Amorim decided not to propose in the current year the payment of an extraordinary dividend in December as has been its practice since 2012. This decision reflects the deliberately conservative management of its balance sheet that the Group has followed and takes into account the greater degree of prudence that the current adverse context requires.
As foreseen in t
Beside these events and until the date on which this report was published, there occurred no other important facts that could materially affect the financial position or future results of Corticeira Amorim or the subsidiary companies belonging to its consolidated group.
Mozelos, July 29, 2020
The Board of CORTICEIRA AMORIM, S.G.P.S., S.A.
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
We have performed a limited review on the accompanying 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 2020 (showing a total of 1.062.494 thousand euros and a total equity of 546.599 thousand euros, including a net profit attributable to equity holders of the Group of 34.272 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 consolidated financial statements, including a summary of significant accounting policies.
Management is responsible for the preparation of 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.
Our responsibility is to express a conclusion on the accompanying 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 consolidated 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.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements of Corticeira Amorim, S.G.P.S., S.A. as at 30 June 2020, 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, 17 September 2020
Ernst & Young Audit & Associados – SROC, S.A. Sociedade de Revisores Oficiais de Contas Represented by:
(Signed)
Rui Manuel da Cunha Vieira - ROC nr. 1154 Registered with the Portuguese Securities Market Commission under licence nr. 20160766
Having started its activity in the 19th century, Corticeira Amorim has become the largest cork product processing company in the world, generating a turnover of more than 780 million euros in more than 100 countries, through a network of dozens of subsidiary companies.
Investing millions of euros annually in R&D, Corticeira Amorim is a company committed to promoting this unique raw material, developing a varied portfolio of 100% natural products that are used by some of the most technological and demanding industries in the world, such as wine & spirits, aerospace, automotive, construction, sports, interior design and fashion industries.
Corticeira Amorim's approach to the choice of raw materials and its sustainable production processes are the basis of a unique interdependence between the industry and an important ecosystem, the montado - a paradigmatic example in terms of sustainable social, economic and environmental development.
www.amorim.com
Corticeira Amorim, SGPS, S.A. Edifício Amorim Rua de Meladas 380 Apartado 20 4536-902 Mozelos · VFR Portugal
IRO | Ana Negrais de Matos, CFA +351 227 475 423 [email protected]
Geral +351 227 475 400 [email protected]
Instagram: amorimcork
Sahre Capital: A company incoporated in Santa Maria da Feira PT 500 077 797
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