Suzano SA
For the period ended Dec 31, 2023. Filed Apr 26, 2024.
View on SEC.govAbout this filing
The yearly report of a company based outside the US. It covers much of what a 10-K does, and may follow accounting rules other than US ones.
FY2023 · Filed Apr 26, 2024
Contents
16. INTANGIBLE
- INTANGIBLE
16.1. Goodwill and intangible assets with indefinite useful lives
| December 31, 2023 | December 31, 2022 | |
|---|---|---|
| Goodwill - Facepa | 119,332 | 119,332 |
| Goodwill - Fibria | 7,897,051 | 7,897,051 |
| Goodwill - MMC Brasil (1) | 170,859 | |
| Other (2) | 4,834 | 3,405 |
| 8,192,076 | 8,019,788 |
(1)Refers to the goodwill of the MMC Brasil business combination, whose allocation of the purchase price is disclosed in note 1.2.3.
(2)Refers to other intangible assets with indefinite useful lives such as servitude of passage and electricity.
The goodwill is based on expected future profitability supported by valuation reports, after the purchase price allocation.
Goodwill is allocated to cash-generating units as presented in Note 29.4.
The calculation of the value in use of non-financial assets is performed annually using the discounted cash flow method. In 2023, the Company used the strategic plan and the annual budget with projected increases to 2028 and the average rate in perpetuity of the cash generating units considering a nominal rate of 3.5% p.a. from this date, based on historical information for previous years, economic and financial projections from each specific market in which the Company has operations, and additionally include official information disclosed by independent institutions and government agencies.
The discount rate, after taxes, adopted by Management was 8.9% p.a., calculated based on the weighted average cost of capital (“WACC”). The assumptions in the table set forth below were also adopted:
| Net average pulp price – Foreign market (US$/t) | 662.1 |
|---|---|
| Net average pulp price – Internal market (US$/t) | 648.7 |
| Average exchange rate (R$/US$) | 5.15 |
| Discount rate (pos-tax) | 8.9% p.a. |
| Discount rate (pre-tax) | 12.25% p.a. |
For the year ended December 31, 2023, the Company did not identify the need to record any impairment provision for intangible assets.
If the post-tax discount rate applied to the cash flow projections of both cash-generating units had been 1% higher than management’s estimates (9.9% instead of 8.9%), the Company would still not need to record an impairment provision.
Suzano S.A. Explanatory notes to the consolidated financial statementsYear ended December 31, 2023 and 2022
The Company have considered and assessed possible changes for other key assumptions and have not identified any instances that could cause the carrying amount of the cash generating units to exceed its recoverable amount.
16.2. Intangible assets with defined useful lives
| December 31, 2023 · December 31, 2022 | |||
|---|---|---|---|
| Opening balance | 7,173,183 | 8,014,740 | |
| Additions | 104,931 | 90,499 | |
| Fair value adjustment MMC Brasil (1) | 189,655 | ||
| Write-offs | (2) | (51) | |
| Amortization | (990,432) | (966,796) | |
| Transfers and others | 79,674 | 34,791 | |
| Closing balance | 6,557,009 | 7,173,183 | |
| Represented by | Average rate % | ||
| Non-competition agreements | 5.00 | 4,818 | 5,128 |
| Port concessions | 4.30 | 537,179 | 554,832 |
| Lease agreements | 16.90 | 6,875 | 14,374 |
| Supplier agreements | 12.90 | 40,739 | 55,554 |
| Port service contracts | 4.20 | 549,821 | 579,289 |
| Cultivars | 14.30 | 40,784 | 61,176 |
| Trademarks and patents (1) | 9.05 | 188,723 | 10,935 |
| Customer portfolio | 9.10 | 4,925,879 | 5,746,860 |
| Supplier agreements | 17.60 | 10,861 | 21,427 |
| Software | 20.00 | 141,178 | 113,946 |
| Other | 5.75 | 110,152 | 9,662 |
| 6,557,009 | 7,173,183 | ||
| Cost | 12,378,761 | 12,004,503 | |
| Amortization | (5,821,752) | (4,831,320) | |
| Closing balance | 6,557,009 | 7,173,183 | |
(1)On June 1, 2023, the Company completed the acquisition of MMC Brasil and on November 1, 2023 the legal entity has fully merged by Suzano S.A. (Note 1.2.3.)
Suzano S.A. Explanatory notes to the consolidated financial statementsYear ended December 31, 2023 and 2022
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