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Intangible assets
 12 Months Ended
Dec. 31, 2023
Notes and other explanatory information [abstract]  
Intangible assets

 

14.Intangible assets

The intangible assets rollforward, which include right-of-use assets balances (note 17.1), is set forth below:

 

                             
  Average rate (1)   12.31.22   Additions   Disposals   Transfers   Monetary correction by Hyperinflation   Exchange rate variation   12.31.23
Cost                              
Goodwill       3,474,103   -   -     -    96,843   (180,008)     3,390,938
Trademarks       1,881,199   -   -     -     114,516   (122,462)     1,873,253
Non-compete agreement     57,426    465   -     -    -   (2,999)   54,892
Outgrowers relationship       517   -   -     -    -   -     517
Patents       4,878   -   (675)     -   1,335   (1,409)     4,129
Customer relationship       1,340,251   -   -     -     156,141   (278,650)     1,217,742
Software       930,090    140   (357,470)   214,757    33,916    (34,385)     787,048
Intangible in progress     77,263    166,995   (2,757)     (204,828)    (657)   (537)   35,479
        7,765,727    167,600   (360,902)    9,929     402,094   (620,450)     7,363,998
                               
Amortization                              
Non-compete agreement 46.01%     (39,336)    (11,353)   -     -    -     2,848     (47,841)
Outgrowers relationship 16.45%    (347)     (72)   -     -    -   -    (419)
Patents 8.52%    (3,824)   (448)    675     -    (834)     1,236    (3,195)
Customer relationship 6.67%   (622,106)   (101,575)   -     -   (48,487)    136,513   (635,655)
Software 43.58%   (665,504)   (226,029)    356,053     -   (21,656)   20,686   (536,450)
      (1,331,117)   (339,477)    356,728     -   (70,977)    161,283   (1,223,560)
        6,434,610   (171,877)   (4,174)    9,929     331,117   (459,167)     6,140,438

 

(1)Weighted average annual remaining rate.

 

                                   
  Average rate (1)   12.31.21   Additions   Disposals   Business combination   Transfers   Monetary correction by Hyperinflation   Exchange rate variation   12.31.22
Cost                                  
Goodwill      3,425,183     -     -   (4,026)    -   171,880     (118,934)     3,474,103
Trademarks      1,733,335     -     -     -    -   203,246   (55,382)     1,881,199
Non-compete agreement     110,208     19,609    (69,950)     -    -     -     (2,441)   57,426
Outgrowers relationship      4,740     -   (4,223)     -     11     -    (11)     517
Patents      3,518     -   (1)     -    -    1,978     (617)     4,878
Customer relationship      1,119,534     -     -     -    -   381,289     (160,572)     1,340,251
Software     770,399    118    (92,163)     -   240,679     19,111     (8,054)    930,090
Intangible in progress       98,716   209,007     -     -    (224,769)    525     (6,216)   77,263
       7,265,633   228,734     (166,337)   (4,026)     15,921   778,029     (352,227)     7,765,727
                                   
Amortization                                  
Non-compete agreement 62.71%     (106,749)   (5,023)     69,950     -    -     -    2,486     (39,336)
Outgrowers relationship 19.48%   (4,425)     (145)    4,223     -    -     -     -   (347)
Patents 8.08%   (2,928)     (475)     -     -    -     (715)   294    (3,824)
Customer relationship 6.92%     (437,774)     (102,727)     -     -    -     (147,827)     66,222   (622,106)
Software 52.04%     (563,943)     (175,768)     79,091     -     (5,972)   (4,925)    6,013   (665,504)
        (1,115,819)     (284,138)   153,264     -     (5,972)     (153,467)     75,015   (1,331,117)
       6,149,814    (55,404)    (13,073)   (4,026)   9,949   624,562     (277,212)     6,434,610
(1)Weighted average annual remaining rate.

 

14.1 Impairment test

The impairment test of assets is carried out annually based on the discounted cash flow method, which is prepared in order to determine the value in use of the Company’s cash-generating units (“CGU”), which were defined in line with the management format. In 2023, the Company used its budget, strategic and financial planning with projections until 2028 and average perpetuity of the cash generating units of 3.5% p.a., based on the history of recent years, as well as in the economic and financial projections of each market in which the Company operates, in addition to official information from independent and governmental institutions.

The discount rate used by Management to prepare discounted cash flows varied from 11.89% p.a. to 13.62% p.a. according to the CGU. The assumptions presented in the table below were also adopted:

                   
    2024   2025   2026   2027   2028
Inflation Brazil   4.00%   3.50%   3.50%   3.40%   3.40%
Inflation - United States   2.21%   2.16%   2.16%   2.16%   2.16%
Exchange rate - BRL / USD   5.00   5.06   5.13   5.10   5.10

The rates presented above don’t consider the effects of income taxes.

Based on Management’s analysis, no impairment adjustments were identified.

In addition to the analysis mentioned above, Management prepared a sensitivity analysis, in which increases and decreases 2 p.p. the operating margin1 (operating income over net sales) and the nominal discount rate and did not identify any scenarios in which an impairment was necessary.

(1)The main assumptions contained in the margin include the projected net sales and commodity cost value.