Interim / Quarterly Report • Sep 13, 2022
Interim / Quarterly Report
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IBERSOL – SGPS, SA
Publicly Listed Company
Registered office: Praça do Bom Sucesso, 105/159, 9th floor, Porto Share Capital Euros 46.000.000 Commercial Registry: Oporto under number 501669477 Fiscal number: 501669477
To allow comparison with other companies in the sector and previous financial periods, the Group uses operational performance indicators, as mentioned throughout this section, the definition and explanation of which can be consulted in the glossary.
After the beginning of the semester, still marked by the Ómicron variant, which slowed down the pace of recovery from the effects of the Covid-19 pandemic, the outbreak of the military conflict in Ukraine and the worsening of global geopolitical tensions have challenged again the group portfolio brands.
This context of uncertainty and instability led to a disruption in supply chains, to the acceleration of the escalation of inflation in food products, energy and transport, with a consequent impact on the drop in consumer confidence and on Ibersol cost structure.
Despite the demanding context experienced in the semester, the comparable performance with the same period in 2021, affected by the period of lockdown and restrictions on mobility, resulted in a growth of 79.5%.
Consolidated turnover in the first six months of 2022 amounted to EUR 242.1 million, compared to EUR 134.9 million in the same period of the previous year.
| Turnover (euro million) | 1H 2022 | 1H 2021 | Var. 22/21 | 1H 2019 | Var 22/19 |
|---|---|---|---|---|---|
| Sales of Restaurants | 236.7 | 132.0 | 79.4% | 213.06 | 11.1% |
| Sales of Merchandise | 4,5 | 2,3 | 96.2% | 6.54 | $-31.5%$ |
| Services Rendered | 0.9 | 0.6 | 54.0% | 1.74 | $-45.8%$ |
| Turnover | 242.1 | 134.9 | 79.5% | 221,34 | 9.4% |
The sales evolution compared to 2019 shows the effect of the retraction in consumption checked in March, interrupted in April with a recovery to the highest levels since the beginning of the pandemic – in March 2020 – which coincided with the Easter period, in which there was a growth in mobility and consumption in the operated markets.
In Portugal, after an initial period of the year with a considerable part of the population at home, by the effect of the increase in the number of infected with the new Omnicrom variant, turnover – with the exception of March - exceeded that seen in the pre-pandemic period.
In Spain, there was a reduction in losses to levels below 5% compared to the same period in 2019, directly related to the positive evolution of traffic at airports, especially in locations that are more dependent on tourism.
Sales of restaurants located in Angola reflect the evolution in local currency, - which does not include the impacts arising from currency conversion – continuing to be the least penalized by the effect of the pandemic.
In this context, the monthly sales evolution by segment, illustrates the different impacts of the restrictions that have been in the last two years, the respective comparative with the same period of 2019 and the pace of recovery achieved by business area.
The concessions and catering segment – after a slowdown in the recovery in March, registered a strong growth in April, directly related to the increase in traffic passengers at airports in parallel with the growth in consumption per client, which remained in the following months.
In Spain, where the group operates restaurants at seven airports, passenger traffic has registered a gradual recovery since February, with losses in the 2 nd quarter of 14%, when compared to 2019, with urban airports showing a slower pace of recovery. In Portugal, losses were 5%, which reflects a higher level than in Spain, which is not unrelated to the lower dependence on passengers from markets still affected by restrictions caused by Covid-19, namely the Asian ones. It should also be noted that since the beginning of the second quarter, some of the airports located on the islands have had higher monthly traffic than in the same period in 2019, benefiting from recognition as safe and unrestricted destinations by tourists from the domestic market, as well as by northern European countries.
| SALES IN RESTAURANTS (euro million) |
1H 2022 | 1H 2021 | Var. 22/21 | 1H 2019 | Var 22/19 |
|---|---|---|---|---|---|
| Restaurants | 43.7 | 28.0 | 55.9% | 49.38 | $-11.5%$ |
| Counters | 141,8 | 91,1 | 55.7% | 105,59 | 34.3% |
| Concessions&Catering | 51.2 | 12.9 | 297.6% | 58,09 | $-11.9%$ |
| Total Sales | 236.7 | 132.0 | 79.4% | 213.06 | 11.1% |
The pace of activity recovery in restaurants, with dine-in service resumed at the beginning of the second quarter, after the interruption in March, although it has not yet reached pre-pandemic sales levels.
The counter segment once again showed a good performance, with strong growth compared to the same period of 2021, (a growth of 56%), as well as a high pace of recovery compared to 2019 of 34%, to which contributed three factors:
Delivery sales, which partially offset the impact of the operation's limitations in the restaurant and counter segments in the lockdown period, with the gradual return to normality tends to reduce its weight, representing, however, in the semester 26% of sales - excluding sales in the concessions and catering segment - around 8 p.p. higher than in the first quarter of 2020, the previously period to the impact of the pandemic.
With the gradual resumption of normality in consumer habits, there is a reduction in the relative weight of sales in the drive and delivery channels, as opposed to an increase in the weight of sales in restaurants, namely those located in shopping centers, which returned in end of the first half at a sales weight similar to pre-pandemic levels.
During the semester, 9 restaurants were definitively closed, 7 of which were franchised. In addition to the four openings in the first quarter, five new restaurants were opened in the second quarter: two Burger King restaurants, one KFC and one Taco Bell in Portugal and the conversion of a Pans franchised restaurant in Spain into a equity one.
The closure of the two equity restaurants resulted from the option of not renewing the lease contracts of two Pizza Móvil restaurants.
At the end of the semester, the total number of restaurants was 621 (551 equity and 70 franchises), as shown below:
| Nº of Restaurants | 31.12.2021 | Q1 | Q2 | Closures 2022 | 30.06.2022 |
|---|---|---|---|---|---|
| PORTUGAL | 383 | 3 | $\overline{4}$ | $\bf{0}$ | 390 |
| Equity Restaurants | 382 | 3 | 4 | 0 | 389 |
| Pizza Hut | 100 | 100 | |||
| Okilo+MIIT+Ribs | 4 | 4 | |||
| Pans | 40 | 40 | |||
| Burger King | 119 | $\overline{2}$ | 121 | ||
| KFC | 41 | 3 | 1 | 45 | |
| Pasta Caffé | $\overline{2}$ | 2 | |||
| Quiosques | 8 | 8 | |||
| Taco Bell | 11 | 1 | 12 | ||
| Coffee Shops | 25 | 25 | |||
| Catering | 9 | 9 | |||
| Concessions & Other | 23 | 23 | |||
| Franchise Restaurants | 1 | 1 | |||
| SPAIN | 225 | 1 | $\mathbf{1}$ | 8 | 219 |
| Equity Restaurants | 152 | 1 | 1 | 2 | 152 |
| Pizza Móvil | 14 | 2 | 12 | ||
| Pizza Hut | 3 | 3 | |||
| Burger King | 38 | 38 | |||
| Pans | 28 | 1 | 1 | 30 | |
| Ribs | 13 | 13 | |||
| FrescCo | 2 | 2 | |||
| KFC | $\overline{2}$ | 2 | |||
| Concessions | 52 | 52 | |||
| Franchise Restaurants | 73 | 0 | 0 | 6 | 67 |
| Pizza Móvil | 5 | 1 | 4 | ||
| Pans | 42 | 3 | 39 | ||
| Ribs | 17 | 1 | 16 | ||
| FrescCo | 4 | 4 | |||
| SantaMaria | 5 | 1 | 4 | ||
| ANGOLA | 10 | $\bf{0}$ | $\bf{0}$ | 10 | |
| KFC | 9 | 9 | |||
| Pizza Hut | 1 | 1 | |||
| Other Locations - Franchise | $\overline{3}$ | $\bf{0}$ | $\bf{0}$ | 1 | 2 |
| Pans | 3 | 1 | 2 | ||
| Total Equity Restaurants | 544 | 4 | 5 | 2 | 551 |
| Total Franchise Restaurants | 77 | 0 | 0 | 7 | 70 |
| TOTAL | 621 | 4 | 5 | 9 | 621 |
Compared to the first half of 2019, it should be noted that the number of own restaurants increased by 27 units.
As a result of the application of Ley 13/2021, since October 1st 2021, rents at airports in Spain are no longer relevant for the purposes of applying IFRS16 until passenger traffic per airport returns to 2019 levels.
For this purpose, and in order to allow a correct comparability of results in the first semester of 2022, the comparison with the results of the first half of 2019 is highlighted, simulating a scenario in which the contracts with AENA were not equally relevant for the purposes of IFRS16. In this way, external supplies and services now reflect the entirety of the rents for the semester, and the depreciation for the period is also corrected due to the derecognition of the depreciation of the rights of use associated with the contracts with AENA.
The consolidated operating income at the end of the semester amounted to 10.5 million Euros, which compares with the same period of 2019 corrected, in the amount of 11.8 million Euros.
| (million euros) | 1H 2022 | 1H 2021 corrected |
1H 2019 corrected |
var. 22 vs 19 |
||||
|---|---|---|---|---|---|---|---|---|
| Turnover | 242,1 | 134,9 | 221,3 | 9,4% | ||||
| Cost of sales | 62,5 | 25,8% | 34,3 | 25,4% | 54,2 | 24,5% | 15,3% | |
| gross margin % | 74,2% | 74,6% | 75,5% | $-1,3$ p.p. | ||||
| External supplies and services | 70,1 | 29,0% | 36,6 | 27,2% | 61,7 | 27,9% | 13,6% | |
| Personnel costs | 74,6 | 30,8% | 49,5 | 36,7% | 71,5 | 32,3% | 4,4% | |
| Amortisation, depreciation and impairment losses of TFA, Rights of Use, Goodwill and IA |
27,1 | 11,2% | 27,0 | 20,0% | 24,1 | 10,9% | 12,4% | |
| Other income/operating costs | $-2,7$ | $-1,1%$ | $-7,8$ | $-5,8%$ | $-1,9$ | $-0.9%$ | 41,9% | |
| Operating Income | 10,5 | 4,4% | -4,8 | $-3,6%$ | 11,8 | 5,3% | $-10,4%$ | |
| margin | 4,4% | $-3,6%$ | 5,3% | $-1,0p.p.$ | ||||
| Ebitda | 37,6 | 15,5% | 22,2 | 16,5% | 35,9 | 16,2% | 4,9% | |
| margin | 15,5% | 16,5% | 16,2% | $-0,7p.p.$ |
Turnover amounted to 242.1 million Euros, 9.4% higher than the 221.3 million Euros in the same period of 2019, with more 5.2% directly operated restaurants.
Gross margin was 74.2% of turnover, 1.3 p.p. lower than in the first semester of 2019 (1H19: 75.5%), evidencing the inflationary pressure that led to the increase in raw material prices. Compared to 2021, the more moderate reduction in the margin in the first half highlights the effects of the lifting of limitations in the operation to less aggressive promotional concepts, and thereby with higher gross margins.
Staff costs increased 4.4%, with the weight of this cost representing 30.8% of the turnover (1H 19: 32.3%).
With the gradual recovery of operations at airports in Spain, at the end of the first half of the year, none of the group's employees were covered by the employment support and protection programmes.
External Supplies and services costs increased 13.6%, representing 29.0% of turnover, which represents an increase of 1.1 p.p. compared to the same period of 2019 corrected (1H 2019 corrected: 27.9%).
The commissions paid to aggregators contributed to this increase with the expansion of this channel to all brands and the consequent increase in the weight of delivery sales, as well as the increase in energy costs in Spain.
Other operating income and costs in the total amount of 2.7 million Euros, represent a decrease of 0.8 million Euros compared to the same period of 2019, a difference that mainly results by the reduction of revenue related to contracts with suppliers.
Amortisation, depreciation and impairment losses of TFA, Rights of Use, Goodwill and IA in the first half, amounted to 27.1 million Euros, which compares with 24.1 million euros of the same period of 2019 corrected by the application of Ley 13/2021, of which 12.8 million correspond to amortization of rights of use.
Therefore EBITDA in the first half amounted to 37.6 million Euros, an increase of 4.9% compared to the same period of 2019 corrected with Ley 13/2021.
Consolidated EBITDA margin stood at 15.5% of turnover, which compares with 16.2% in the same period in 2019, if Ley 13/2021 had been in force.
Consolidated Financial Results in the first half of the year were negative by 5.6 million Euros, compared to 5.3 million Euros in the first half of 2019 corrected.
| (million euros) | 1H 2022 | 1H 2021 corrected |
1H 2019 corrected |
var. 22 vs 19 |
|||
|---|---|---|---|---|---|---|---|
| Financial Results | 5,6 | 2.3% | 5,3 | $3.9\%$ | 5,3 | 2.4% | 4,6% |
| Financial expenses and losses | 6,0 | 2.5% | 5.6 | 4.2% | 5.5 | 2.5% | 10.6% |
| Financial income and gains | 0,5 | 0.2% | 0,3 | 0.2% | 0,1 | 0.1% | 252.0% |
Financial expenses and losses totalled 6.0 million Euros, which represents an increase of 0.5 million Euros compared to the corrected first half of 2019. A part of these expenses and losses corresponds to interest with leases in the amount of 3.9 million Euros (3.4 million Euros in the first half of 2019 corrected).
Net interest supported and commissions related to financing reached a total of 1.8 million Euros, which equals an average debt cost of 2.1%.
Total Assets amounted to 616.7 million Euros and Equity stood at 230.2 million Euros, representing 37.3% of total assets.
CAPEX in tangible fixed and intangible assets amounted to 15.7 million Euros. 11 million Euros incurred in the implementation of the expansion program. The remaining 4.7 million Euros were incurred in the remodelling and modernization of restaurants.
| (million euros) | 1H 2022 | 2021 | var. |
|---|---|---|---|
| Fixed assets additions | 14.2 | 29.7 | $-15.5$ |
| Intangible assets additions | 1.5 | 3.6 | |
| Capex | 15.7 | 33.3 | -17.6 |
Current liabilities amount to 150.8 million Euros, of which 22.7 million correspond to liabilities for leases and 34.6 million Euros to current loans. Regarding to current loans, the Group has 51 million Euros related to commercial paper and unused contracted credit lines.
Consolidated liabilities reached 386.5 million Euros at June 30, 2022, which represents a reduction of 17.1million Euros compared to the final result in 2021.
At 30th June 2022, Equity stood at 230.2 million Euros, approximately 1.5 million Euros higher to the amount at the end of 2021.
| Consolidated Financial Position (million euros) |
30/06/2022 | 31/12/2021 | Var. |
|---|---|---|---|
| Total Assets | 616,7 | 632,4 | $-15,6$ |
| Total Equity | 230,2 | 228,7 | 1,5 |
| Loans | 140,1 | 167,0 | $-26,9$ |
| Liability for leases | 147,6 | 143,1 | 4,5 |
| Other liabilities | 98,9 | 93,6 | 5,3 |
| Total Equity and Liabilities | 616,7 | 632,4 | $-15,6$ |
At the end of the first half of 2022, net debt amounted to 213.8 million Euros, 2.8 million Euros higher than the amount outstanding at the end of 2021 (211.0 million Euros), with a "Gearing" of 48%, similar to the end of 2021.
| (million euros) | 30/06/2022 | 31/12/2021 | var. |
|---|---|---|---|
| Total loans | 140,1 | 167,0 | $-26,9$ |
| Cash and bank deposits | $-70.9$ | $-97.0$ | $-26.1$ |
| Other current and non-current liabilities | $-3,0$ | $-2,2$ | 0,8 |
| Net Bank Debt | 66,2 | 67,9 | $-1,7$ |
| Liability for leases | 147,6 | 143,1 | 4,5 |
| Net Debt | 213,8 | 211,0 | 2,8 |
| Equity | 230,2 | 228,7 | 1.5 |
| Gearing (Net Debt/Net Debt + Equity) | 48% | 48% |
At 30 June 2022, the total Net Bank Debt amounted to 66.2 million Euros.
| Turnover | Sales + Services Rendered |
|---|---|
| Sales | Sales of Restaurants + Sales of Merchandise |
| Sales of Restaurants | Sales of directly operated restaurants |
| Retail Sales | Sales of restaurants - Concessions and Catering Sales |
| Sales of Merchandise | Sales of goods to third parties and franchisees |
| Gross Margin | Sales + Services Rendered - Cost of Sales |
| EBIT Margin | EBIT / Turnover |
| EBITDA Margin | EBITDA / Turnover |
| EBIT (Earnings before Interest and Taxes) | Operacional Results |
| EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) |
Operating results plus amortisation, depreciation and impairment losses of fixed assets, Rights of Use, Goodwill and Intangible Assets |
| Financial Position | |
| Capex | Tangible and intangible assets additions |
| Interest Coverage | EBITDA / Net Financing Costs |
| Net Bank Debt | Bonds + bank loans + other loans + financial leases - cash, bank deposits, current investments, and other long-term financial applications |
| Net Debt | Net Bank Debt + Liability for Leases |
| Gearing | Net Debt / (Net debt + Equity Capital) |
Recent IMF forecasts for 2022 point to a 4.0% growth of GDP in Portugal and Spain, which indicates a slower recovery than previously expected.
After the uncertainty associated with the recovery from the pandemic, global geopolitical tensions and the military conflict in Ukraine, have led to a worsening in the escalation of inflation, with deterioration in consumer confidence levels that could compromise the pace of the recovery.
At today's data, despite the positive signs from some sectors, namely those exposed to tourism, the economies reinforce the signs of cooling down, which indicate a less positive macroeconomic framework in the third quarter that will translate into an inability to fully reflect the increase in the price of raw materials and energy, with a consequent impact on the margin. With the portfolio of brands and the teams that in the last two years have demonstrated a capacity for resilience in an adverse context of the pandemic, we are confident that the Group has the necessary strength to overcome the future challenges that are imposed.
In addition to the openings carried out to date, we will continue with plans to expand Pizza Hut, KFC and Taco Bell brands.
On August 2, after a long negotiation process with Restaurant Brands Iberia, S.A., a share purchase and sale agreement was signed for the sale of shares representing the entire share capital of Iber King Restauração, S.A. and Lurca S.A.U., companies that operate Burger King restaurants in Portugal and Spain.
The completion of the sale is subject to certain precedent conditions.
The price will correspond to an Enterprise Value of 259.7 million Euros, on a cash and debt free basis, being part of the price (in the amount of 15.5 million Euros) contingent upon the satisfaction of conditions related to the future evolution of EBITDA and/or cash flows generation.
With the values as at 30 June 2022, assuming that the maximum amount of the price is entirely received the transaction results in a capital gain of approximately 140 million Euros in the Ibersol's consolidated accounts.
Ibersol's Board considers that as of June 30, 2022, the conditions for the Burger King operation to be considered a non-current asset held for sale were not met, given that, on that date, the conditions set out in IFRS 5 were not met, given that Ibersol, at that date, did not consider the sale to be highly probable.
In fact, at that date, there were relevant divergences regarding the value proposition and associated conditions that had been presented by Restaurant Brands Iberia, S.A., which, moreover, culminated in a conclusion of the negotiations with rejection of the offer, according to the communication to the market of 14 July 2022.
Following the claim of amounts associated with the purchase of Eat Out Group, a compensation agreement in the amount of 2 million euros was finally signed in July.
Porto, 8 th September 2022
António Alberto Guerra Leal Teixeira
António Carlos Vaz Pinto de Sousa
_____________________________________ Maria do Carmo Guedes Antunes de Oliveira
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Juan Carlos Vázquez-Dodero de Bonifaz
Maria Deolinda Fidalgo do Couto
In compliance with paragraph c) of section 1 of Article 246 of the Securities Market Code each member of the board identified below declares that to the best of their knowledge:
(i) the consolidated financial statements of Ibersol SGPS SA, referring to the first semester of 2022 were drawn up in compliance with applicable accounting rules and provide a true and suitable picture of the assets and liabilities, financial situation and results of Ibersol SGPS, SA and the companies included in consolidation perimeter;
(ii) the interim management report includes a fair review of the important events that have occurred in the period, the evolution of business performance and the position of all the companies included in consolidation.
António Alberto Guerra Leal Teixeira Chairman of the Boards of Director António Carlos Vaz Pinto Sousa Member of the Board of Directors Maria do Carmo Guedes Antunes de Oliveira Member of the Board of Directors Juan Carlos Vázquez-Dodero Member of the Board of Directors Maria Deolinda Fidalgo do Couto Member of the Board of Directors
Under the terms defined in caption d) of no. 5 of article 66º of the Commercial Companies Code, we hereby declare that, during the first half of 2022, the company did not proceed with any transaction over own shares. Therefore, as at June 30, 2022, Ibersol SGPS, SA hold 3,599,981 own shares representing 7.8260% of its share capital, detailed as follows:
| 2022 | Quantity | Amount (€) | Average price (€) |
|---|---|---|---|
| 1 January | 3,599,981 | 11,180,516 | 3.11 |
| 30 June | 3,599,981 | 11,180,516 | 3.11 |
In compliance with article 9 nº1 paragraph c) of the CMVM Regulation nº 05/2008, we indicate the holders of qualifying holdings known on 30 June 2022:
| Shareholders | $no$ shares | % share capital |
|---|---|---|
| ATPS - SGPS, S.A. (*) | ||
| Directly | 26 004 023 | 56,53% |
| António Alberto Guerra Leal Teixeira | 3 3 1 4 | 0,01% |
| António Carlos Vaz Pinto Sousa | 3 4 9 5 | 0,01% |
| Total attributable | 26 010 832 | 56,55% |
| Magallanes Value Investors SGIIC | ||
| Total attributable | 2 336 800 | 5,08% |
| Bestinver Gestion SGIIC | ||
| Total attributable | 3 316 600 | 7,21% |
| FMR LLC | ||
| Fidelity Managemment & Research Company LLC | 1 529 492 | 3,32% |
| Cobas Asset Management SGIIC | ||
| Total attributable | 1 900 342 | 4,13% |
(*)The voting rights attributable to the ATPS are also attributable to António Pinto Sousa and Alberto Teixeira under subparagraph b) of paragraph 1 of Article 20 and Article 21 paragraph 1, both of the Securities Code, by virtue of the latter are holding the domain of that company, in which participate indirectly in equal parts by, respectively, of CALUM – SERVIÇOS E GESTÃO, SA. with the NIPC 513799486 and DUNBAR – SERVIÇOS E GESTÃO, SA with the NIPC 513799257, which together hold the majority of the capital of ATPS.
Complying with article 9 nº1 of the CMVM Regulation nº 05/2008, we inform the transactions and the number of stocks issued by the company or companies in a controlling relationship held by the members of the Board for the 1st semester:
| Board of Directors | Date | Acquisictions/Increases (a) | Sales | Balance at | ||
|---|---|---|---|---|---|---|
| shares | avg price | shares | avg price | 30.06.2022 | ||
| António Alberto Guerra Leal Teixeira | ||||||
| DUNBAR-SERVIÇOS E GESTÃO SA (1) Ibersol SGPS, SA |
5 100 3 3 1 4 |
|||||
| António Carlos Vaz Pinto Sousa | ||||||
| CALUM-SERVIÇOS E GESTÃO SA (2) Ibersol SGPS, SA |
9 9 9 6 3 4 9 5 |
|||||
| Maria Deolinda Fidalgo Couto | ||||||
| Ibersol SGPS, SA | 6831 | |||||
| DUNBAR- SERVIÇOS E GESTÃO SA (1) ATPS-S.G.P.S., SA (3) |
2840 | |||||
| (2) CALUM-SERVIÇOS E GESTÃO SA | ||||||
| ATPS-S.G.P.S., SA (3) |
2840 | |||||
| ATPS-S.G.P.S., SA (3) |
||||||
| ANUTA - Serviços e Gestão, SA (4) Ibersol SGPS, SA |
dissolved | 4 170 207 | 50 000 | 0 26 004 023 |
||
| ANUTA - Serviços e Gestão, SA (4) |
||||||
| Ibersol SGPS, SA | 4 170 207 | $\bf{0}$ | ||||
No transactions were reported by persons discharging managerial responsibilities and people closely connected with them during the first half of 2022.
30 June 2022
| ASSETS | Notes | 30/06/2022 | 31/12/2021 |
|---|---|---|---|
| Non-current | |||
| Property, plant and equipment | 7 | 216 485 584 | 214 373 712 |
| Rights of use | 6 | 142 239 840 | 138 871 151 |
| Goodwill | 8 | 79 032 821 | 79 032 821 |
| Intangible assets | 8 | 35 513 199 | 35 870 696 |
| Financial investments - joint controlled subsidiaries and associated | 3 036 781 | 2 940 318 | |
| Non-current financial assets | 1 043 942 | 978 965 | |
| Other financial assets | 9 | 842 063 | 841 165 |
| Other non-current assets | 10 | 7 513 186 | 7 524 331 |
| Deferred tax | 16 | 11 778 489 | 11 088 442 |
| Total non-current assets | 6 | 497 485 904 | 491 521 600 |
| Current | |||
| Inventories | 16 833 638 | 15 717 458 | |
| Income tax receivable | 16 | 26 123 | 110 222 |
| Other financial assets | 9 | 2 161 724 | 1 338 791 |
| Other current assets | 12 | 29 324 609 | 26 698 358 |
| Cash and cash equivalents | 11 | 70 903 129 | 96 968 003 |
| Total current assets | 119 249 223 | 140 832 831 | |
| Total Assets | 616 735 128 | 632 354 431 | |
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Capital and reserves attributable to shareholders | |||
| Share capital | 46 000 000 | 46 000 000 | |
| Own shares | -11 180 516 | -11 180 516 | |
| Share premium | 29 900 789 | 29 900 789 | |
| Legal reserves | 1 976 081 | 1 751 081 | |
| Translation reserve | -7 793 643 | -11 331 432 | |
| Other Reserves & Retained Earnings | 167 654 422 | 142 053 271 | |
| Net profit for the period | 3 710 457 | 31 379 907 | |
| 230 267 590 | 228 573 100 | ||
| Non-controlling interests | -79 804 | 90 482 | |
| Total Equity | 230 187 786 | 228 663 582 | |
| LIABILITIES | |||
| Non-current | |||
| Loans | 13 | 105 483 235 | 140 439 066 |
| Lease liabilities | 13 | 124 906 264 | 121 422 685 |
| Deferred tax | 16 | 2 985 773 | 3 376 658 |
| Provisions | 2 338 634 | 2 428 023 | |
| Derivative financial instrument | 5 896 | 18 976 | |
| Other non-current liabilities | 4 176 | 4 176 | |
| Total non-current liabilities | 235 723 978 | 267 689 584 | |
| Current | |||
| Loans | 13 | 34 614 366 | 26 593 284 |
| Lease liabilities | 13 | 22 655 841 | 21 645 649 |
| Accounts payable to suppliers and accrued costs | 14 | 75 326 089 | 72 507 391 |
| Income tax payable Other current liabilities |
16 15 |
1 883 107 16 343 962 |
456 400 14 798 541 |
| Total current liabilities | 150 823 365 | 136 001 265 | |
| Total Liabilities | 386 547 343 | 403 690 849 | |
| Total Equity and Liabilities | 616 735 128 | 632 354 431 |
| Notes | 6 months ended 30/06/2022 |
6 months ended 30/06/2021 |
|
|---|---|---|---|
| Sales | 5 | 241 169 315 | 134 247 085 |
| Rendered services | 5 | 942 622 | 612 080 |
| Cost of sales | -62 476 431 | -34 281 007 | |
| External supplies and services | -70 112 960 | -33 916 991 | |
| Personnel costs | -74 644 782 | -49 501 777 | |
| Amortisation, depreciation and impairment losses of TFA, Rights of | |||
| Use, Goodwill and IA | 6, 7 e 8 | -27 065 723 | -42 641 876 |
| Other operating gains (losses) | 17 | 2 721 019 | 7 777 888 |
| Operating Income | 10 533 060 | -17 704 598 | |
| Financial expenses and losses | 18 | -6 045 991 | -9 854 318 |
| Financial income and gains | 18 | 465 814 | 309 320 |
| Gains (losses) in subsidiary, associated and joint controlled subsidiaries | -76 689 | -105 719 | |
| Profit before tax | 4 876 194 | -27 355 315 | |
| Income tax | 19 | -1 165 777 | 4 405 931 |
| Net profit | 3 710 417 | -22 949 384 | |
| Other comprehensive income: | |||
| Change in currency conversion reserve (net of tax and that can be recycled for results) |
3 537 789 | 166 056 | |
| TOTAL COMPREHENSIVE INCOME | 7 248 206 | -22 783 328 | |
| Net profit attributable to: | |||
| Owners of the parent | 3 710 457 | -22 902 318 | |
| Non-controlling interest | -41 | -47 067 | |
| 3 710 416 | -22 949 385 | ||
| Total comprehensive income attributable to: | |||
| Owners of the parent | 7 248 246 | -22 736 262 | |
| Non-controlling interest | -41 | -47 067 | |
| 7 248 205 | -22 783 329 | ||
| Earnings per share: | 20 | ||
| Basic | 0,09 | -0,71 | |
| Diluted | 0,09 | -0,71 |
(values in euros)
| 2nd TRIMESTER (unaudited) | ||
|---|---|---|
| 3 months | 3 months | |
| ended | ended | |
| 30/06/2022 | 30/06/2021 | |
| Sales | 135 132 942 | 78 797 850 |
| Rendered services | 494 459 | 402 743 |
| Cost of sales | -36 024 105 | -19 852 513 |
| External supplies and services | -38 734 088 | -18 482 492 |
| Personnel costs | -39 653 140 | -28 426 559 |
| Amortisation, depreciation and impairment losses of TFA, Rights of Use, | ||
| Goodwill and IA | -13 823 228 | -21 329 008 |
| Other operating gains (losses) | 1 752 204 | 5 275 544 |
| Operating Income | 9 145 044 | -3 614 435 |
| Financial expenses and losses | -3 308 720 | -4 929 551 |
| Financial income and gains | 57 081 | 63 571 |
| Gains (losses) in associated and joint controlled sub. - Equity method | 255 184 | 92 905 |
| Profit before tax | 6 148 589 | -8 387 510 |
| Income tax | -740 297 | 1 177 075 |
| Net profit | 5 408 292 | -7 210 434 |
| Other comprehensive income: | ||
| Change in currency conversion reserve (net of tax and that can be | ||
| recycled for results) | 1 229 628 | -335 621 |
| TOTAL COMPREHENSIVE INCOME | 6 637 920 | -7 546 055 |
| Net profit attributable to: Owners of the parent |
5 408 312 | -7 175 714 |
| Non-controlling interest | -21 | -34 722 |
| 5 408 291 | -7 210 436 | |
| Total comprehensive income attributable to: | ||
| Owners of the parent | 6 637 940 | -7 511 335 |
| Non-controlling interest | -21 | -34 722 |
| 6 637 919 | -7 546 057 | |
| Earnings per share: | ||
| Basic | 0,13 | -0,22 |
| Diluted | 0,13 | -0,22 |
for the six months period ended 30 June, 2022 and 2021
(value in euros)
| Assigned to shareholders | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Note | Share Capital | Own Shares |
Share Premium |
Legal Reserves |
Translation Reserve |
Other Reserves & Retained Earnings |
Net Profit |
Total parent equity |
Non controlling interests |
Total Equity |
|
| Balance on 1 January 2021 Changes in the period: Application of the consolidated profit from 2020: |
36 000 000 | -11 180 516 | 469 937 | 1 629 598 | -12 821 109 | 197 372 003 | -55 197 249 | 156 272 664 | 133 241 | 156 405 905 | |
| Transfer to reserves and retained results Conversion reserves - Angola Net consolidated income for the six months ended on 30 June, 2021 |
121 483 | 166 056 | -55 318 732 | 55 197 249 -22 902 318 |
- 166 056 -22 902 318 |
-47 067 | - 166 056 -22 949 385 |
||||
| Total changes in the period Net profit Total comprehensive income Transactions with capital owners in the period Application of the consolidated profit from 2020: |
- | - | - | 121 483 | 166 056 | -55 318 732 | 32 294 931 -22 902 318 |
-22 736 262 -22 902 318 -22 736 262 |
-47 067 -47 067 -47 067 |
-22 783 329 -22 949 385 -22 783 329 |
|
| Paid dividends Balance on 30 June 2021 |
- 36 000 000 |
- -11 180 515 |
- 469 937 |
- 1 751 081 |
- -12 655 053 |
- 142 053 271 |
- -22 902 318 |
- - 133 536 402 |
- 86 174 |
- - 133 622 576 |
|
| Balance on 1 January 2022 Changes in the period: Application of the consolidated profit from 2021: |
46 000 000 | -11 180 516 | 29 900 789 | 1 751 081 | -11 331 432 | 142 053 271 | 31 379 907 | 228 573 100 | 90 482 | 228 663 582 | |
| Transfer to reserves and retained results Liquidation of subsiduary Cortsfood Conversion reserves - Angola Net consolidated income for the six months ended on |
225 000 | 3 537 789 | 31 154 907 170 245 |
-31 379 907 | - 170 245 3 537 789 |
-170 245 | - - 3 537 789 |
||||
| 30 June, 2022 Total changes in the period Net profit Total comprehensive income Transactions with capital owners in the period |
- | - | - | 225 000 | 3 537 789 | 31 325 152 | 3 710 457 -27 669 450 3 710 457 |
3 710 457 7 418 491 3 710 457 7 248 246 |
-41 -170 286 -41 -41 |
3 710 416 7 248 205 3 710 416 7 248 205 |
|
| Application of the consolidated profit from 2021: Paid dividends |
- | - | - | - | - | -5 724 002 -5 724 002 |
- | -5 724 002 -5 724 002 |
- | -5 724 002 -5 724 002 |
|
| Balance on 30 June 2022 | 46 000 000 | -11 180 516 | 29 900 789 | 1 976 081 | -7 793 643 | 167 654 421 | 3 710 457 | 230 267 590 | -79 804 | 230 187 786 |
| Note | 6 months ended 30/06/2022 |
6 months ended 30/06/2021 |
|
|---|---|---|---|
| Cash Flows from Operating Activities | |||
| Receipts from clients | 241 057 989 | 135 072 051 | |
| Payments to supliers | 117 125 745 | 59 704 255 | |
| Staff payments | 70 382 475 | 38 134 650 | |
| Flows generated by operations | 53 549 769 | 37 233 145 | |
| Payments/receipt of income tax | 721 614 | 49 297 | |
| Other paym./receipts related with operating activities | -7 299 701 | -10 560 456 | |
| Flows from operating activities (1) | 45 528 454 | 26 623 391 | |
| Cash Flows from Investment Activities | |||
| Receipts from: | |||
| Financial investments | 134 366 | 75 859 | |
| Tangible fixed assets | |||
| Investment benefits | |||
| Interest received | 285 187 | 236 184 | |
| Other financial assets | 53 296 | 1 651 646 | |
| Payments for: | |||
| Financial Investments | 346 963 | 678 450 | |
| Other financial assets | 950 071 | ||
| Tangible fixed assets | 19 816 379 | 10 993 491 | |
| Intangible assests | 2 964 436 | 1 664 916 | |
| Flows from investment activities (2) | -22 654 929 | -12 323 239 | |
| Cash flows from financing activities | |||
| Receipts from: | |||
| Loans obtained | 5 167 928 | 23 333 144 | |
| Payments for: | |||
| Loans obtained | 32 310 475 | 10 511 852 | |
| Leases agreements | 10 812 798 | 12 300 435 | |
| Interest and similar costs | 2 146 929 | 2 111 468 | |
| Interest on lease agreements | 3 924 562 | 3 659 565 | |
| Dividends paid | 5 724 002 | - | |
| Flows from financing activities (3) | -49 750 839 | -5 250 176 | |
| Change in cash & cash equivalents (4)=(1)+(2)+(3) | -26 877 314 | 9 049 976 | |
| Change in the perimeter | -324 186 | ||
| Effects of exchange rate differences | 1 136 626 | -16 747 | |
| Cash & cash equivalents at the start of the period | 96 968 003 | 50 549 377 | |
| Cash & cash equivalents at end of the period | 11 | 70 903 129 | 59 582 606 |
(Values in euros)
IBERSOL, SGPS, SA (Group or Ibersol) with head office at Praça do Bom Sucesso, Edifício Península n.º 105 a 159 – 9º, 4150-146 Porto, Portugal. Ibersol's subsidiaries (jointly called "the Group"), operate a network of 621 units in the restaurant segment through the brands Pizza Hut, Pasta Caffé, Pans & Company, Ribs, FresCo, SantaMaria, Kentucky Fried Chicken, Burger King, O' Kilo, Quiosques, Pizza Móvil, Miit, Taco Bell, Sol, Silva Carvalho Catering e Palace Catering, coffe counters and other concessions. The group has 551 units which it operates and 70 units under a franchise contract. Of this universe, 390 are based in Portugal, of which 389 are owned and 1 franchised, and 219 are based in Spain, spread over 152 own establishments and 67 franchisees, and 10 in Angola and 2 in other locations.
Ibersol is a public limited company listed on the Euronext of Lisbon.
Ibersol SGPS parent company and ultimate parent entity is ATPS - SGPS, S.A..
In Spain, on October 2, 2021 Law 13/2021 of October 1 was published, which determined that the guaranteed minimum annual income provided for in these contracts for the period between March 15, 2020 and June 20, both included, be eliminated and as of June 21, 2020 and until the annual traffic of each Airport reaches the values recorded in 2019, the minimum guaranteed annual rents of existing contracts are reduced in direct proportion to the variation in passenger traffic compared to those verified in 2019. So, in accordance with the disposed of paragraph 39 of IFRS 16, the entire lease liability referring to the contracts with AENA was derecognised against the Right of Use, with reference to the date of entry into force of the refer law.
As a result and given that the traffic accumulated in 2022 has not yet reached those registered in 2019, the contributions, the leasing contributions associated with the contracts with AENA in the first 6 months of 2022 are recognized as rent and rental expenses, which must be taken into account in the comparison of the financial information with the same period of 2021 in terms of operating costs, amortization and financial expenses.
The main accounting policies adopted in the preparation of these consolidated financial statements are described below. These policies have been applied consistently in comparative periods.
These consolidated interim financial statements were prepared according to the international standard nº. 34 – Interim Financial Report, and therefore do not include all the information required by the annual financial statements, and should be read together with the company's financial statements for the period ended 31 December 2021.
The consolidated interim financial statements have been prepared in accordance with the historical cost principle.
The Consolidated Financial Statements of the Group were prepared in accordance with the same accounting principles and policies adopted by the Group in the preparation of the annual financial statements, except for the adoption of new standards, amendments and interpretations with mandatory application from 1 January 2022, and essentially including an explanation of the events and changes relevant to understanding the changes in the Group's financial position and performance since the date of the annual report. In this way, the accounting policies, as well as a part of the notes contained in the 2021 financial statements, are omitted, either because they have not changed, or because they are not materially relevant to the understanding of these interim financial statements.
These financial statements were approved by the Board of Directors and authorised for emission on 08 September 2022.
In June 2021, Regulation No. 1080/2021 was issued by the EU, which was adopted by the Group with effect from 1 January 2022:
Amendments to IFRS 3 Business Combinations: References to the Conceptual Framework
IAS 16 Tangible fixed assets: Income prior to expected use (changes)
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Costs of fulfilling onerous contracts (amendments)
2018-2020 cycle of improvement to IFRS standards: IFRS 1 First-time adoption of international financial reporting standards, IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41 Agriculture. These improvements are prospectively applicable.)
The Group implemented the above changes, with no materially relevant impact on its Consolidated Financial Statements.
The EU adopted and approved in 2022 a set of amendments issued by the IASB, Regulation no.
IAS 1 Presentation of Financial Statements: Disclosure of Accounting Policies (amendments)
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (changes)
IAS 12 Income tax (amendments).
The group has not yet implemented these changes.
Finally, the following standards, interpretations, amendments and revisions, with mandatory application in future financial years, were not, until the date of approval of these financial statements adopted ("endorsed") by the European Union:
IAS 1 Presentation of Financial Statements (clarifications)
IFRS 17 Insurance contracts (amendments): initial application of IFRS 17 and IFRS 9 - Comparative Information.
Estimates and judgements are continuously evaluated and are based on past experience and on other factors, including expectations regarding future events that are believed to be reasonably probable within the respective circumstances.
The group makes estimates and outlines premises about the future. Generally, accounting based on estimates rarely corresponds to the real reported results. Estimates and premises that present a significant risk of leading to a material adjustment in the accounting value of the assets and liabilities in the following year are described below:
a) Goodwill impairment analysis, financial investments in associated and jointly controlled companies, rights of use, property, plant and equipment and intangible assets.
Impairment analyses require the determination of the fair value and / or the use value of these assets (or of some CGU). This process requires a high number of judgments, namely the estimation of future cash flows associated with the assets or the respective CGU and the determination of an appropriate discount rate for calculating the present value of said cash flows. In this regard, the Group has, once again, established the requirement to use the maximum possible amount of observable market data. It also established mechanisms for monitoring calculations based on the critical challenge of the reasonableness of the assumptions used, their coherence and consistency (in similar situations).
Information on the most relevant assumptions used in the impairment analysis, as well as the sensitivity of the results obtained in the face of certain changes in assumptions, is disclosed in Notes 7 and 8.
b) Measurement and recognition of deferred taxes
Deferred tax assets are recognized only when it is probable that there will be sufficient taxable profits or taxable temporary differences related to the same tax authority to use those same deferred tax assets. At the end of each year, a review of the deferred taxes recorded is made, as well as of the unrecognized taxes, which are reduced whenever their future use is no longer probable or recorded, provided that, and to the extent that, it becomes probable the generation of taxable profits in the future/ reversal of taxable temporary differences that allow their recovery.
The Group makes estimates on lease terms and the incremental financing rate.
The Group determines the lease term as the non-cancellable period of the lease, taking into account the periods covered by an option to extend the contract if it is reasonable for the Group to exercise it, or any periods covered by an option to terminate the contract, if it is reasonably certain that the Group will not exercise it. In determining the lease term, the Group therefore makes a judgment on the relevant factors that create an economic incentive to exercise the renewal or termination (in cases where such options belong to the lessee and the lessor, the Group exercises judgment about the economic incentives for lessor and lessee).
In most leases, the Group is not able to readily determine the interest rate implicit in the contracts, so it considers its incremental financing rate to measure lease liabilities. The incremental financing rate is the interest rate that the Group would have to pay to obtain loans of similar terms and guarantees, to acquire an asset identical to the leased asset in a similar economic environment. In this way, the incremental financing rate reflects what the Group would have to pay, which requires an estimate when there are no observable rates available (such as in subsidiaries that do not carry out financing operations) or when they need to be adjusted to reflect the terms and conditions of the lease (for example when the contracts are not in the Group's functional currency). The Group estimates the incremental funding rate using observable information (such as market interest rates) when available, and it is necessary to make some specific estimates based on consultations with funding institutions such as Banks and Investment Funds.
Concerning Burger King business sale process, on 30 June 2022 Ibersol's Board of Directors considers that the conditions for the Burger King operation to be considered a non-current asset held for sale were not met and that the terms set out in IFRS 5 were not fulfilled, given that Ibersol, at that date, did not consider the sale to be highly probable.
In fact, at that date, there were relevant divergences regarding the value proposition and associated conditions that had been presented by Restaurant Brands Iberia, S.A., which, moreover, culminated in a conclusion of the negotiations with rejection of the offer, according to the communication to the market of 14 July 2022.
The group's activities are exposed to a number of financial risk factors: market risk (including currency exchange risk, fair value risk associated to the interest rate and price risk), credit risk, liquidity risk and cash flow risks associated to the interest rate. The group maintains a risk management program that focuses its analysis on financial markets to minimise the potential adverse effects of those risks on the group's financial performance.
Financial risk management is headed by the Financial Department based on the policies approved by the Board of Directors. The treasury identifies, evaluates and employs financial risk hedging measures in close cooperation with the group's operating units. The Board provides principles for managing the risk as a whole and policies that cover specific areas, such as the currency exchange risk, the interest rate risk, the credit risk and the investment of surplus liquidity.
i) Currency exchange risk
With regard to exchange rate risk, the Group follows a natural hedge policy using financing in local currency. Since the Group is mainly present in the Iberian market, bank loans are mainly denominated in euros and the volume of purchases outside the Euro zone are of irrelevant proportions.
The Group's main source of exposure comes from investment outside the Euro zone, namely from the operation it is being developed in Angola, which is still small. The imbalances of the Angolan economy give rise to significant exchange rate variations of the kwanza, so it is to be considered that there is an exchange rate risk. Financing contracted by Angolan subsidiaries is denominated in the local currency, the same currency in which income is generated.
The exchange rate used in the financial statements for the conversion of transactions and balances expressed in Kwanzas was, respectively:
| Jun/22 | |||
|---|---|---|---|
| Euro exchange rates | (x | Rate on June, 30 | Average rate 1st |
| foreign currency per 1 Euro) | 2022 | Semester 2022 | |
| Kwanza de Angola (AOA) | 433,088 | 488,281 | |
| Dec/21 |
| Euro exchange rates | (x | Rate on December, | Average rate year | |
|---|---|---|---|---|
| foreign currency per 1 Euro) | 31 2021 | 2021 | ||
| Kwanza de Angola (AOA) | 635,728 | 705,219 |
ii) Price risk
The Group is not greatly exposed to goods price risk, despite the fact that the raw materials market is experiencing a period of disruption.
iii) Interest rate risk (cash flow and fair value)
The Group's interest rate risk follows its liabilities, in particular long-term loans.
Unpaid debt bears variable interest rate, part of which has been the object of an interest rate swap. Interest rate swap contracts to hedge the interest rate risk of part of the loans (commercial paper) of 3.2 million Euros are subject to interest maturities and repayment plans identical to the terms of the loans. A loan of 31 million Euros with fixed rate debt is contracted.
Based on simulations performed on 30 June 2022, an increase of 100 basis points in the interest rate, maintaining other factors constant, would have a negative impact in the net profit of 329,000 Euros (522,000 Euros in December 2021).
As a result of the main activity (sales of retail goods) being cash or payment cards, with the exception of sales through aggregators in which payments are made by periodic summary as contractually established, the risk is limited to the catering business and sales of goods and services to franchisees, which represent only 4.3% of consolidated turnover.
For the catering business, the Group has policies that ensure that sales on credit are made to customers with an appropriate credit history, and in outside catering, when there is no credit history or it is not favourable, an advance payment is required on the date of the adjudication of the event.
The Group's cash and cash equivalents include mainly deposits resulting from cash provided by sales and its deposits in current accounts. Excluding these amounts, the amount of financial investments at 30 June 2022, is not significant, with the exception of the above mentioned Treasury Bonds of the Republic of Angola in the amount of 3 million Euros, subject to country risk.
Deposits and other financial investments are spread over several credit institutions; therefore there is not a concentration of these financial assets.
On 30 June 2022, current liabilities reached 151 million Euros, compared with 119 million Euros in current assets. The Group presents a situation of current liabilities greater than current assets, a financial characteristic of this business, it is important to note that current liabilities include some Commercial Paper programs, with termination clauses, in which reimbursement on the termination date is considered regardless of the terms for which they are contracted. On the other hand, circumstantially the option for issuance under contracts of lesser maturity at the expense of other programs of greater maturity that are left unused and consequently with amounts available for coverage.
The Group considers the expected operating cash flows and, if necessary, the commercial paper and the contracted credit lines, the amounts of which have not yet been used, are sufficient to settle all current liabilities.
On 30 June 2022, the Group had Commercial Paper Programs and unused medium and long-term lines of 38 million Euros and unused short term liquidity cash flow amounted to 13 million Euros. Investments in term deposits and other application of 63 million Euros, match 48% of liabilities paid. Unused lines are sufficient to cover current liabilities less current assets, which in this activity has a structurally negative component and which as of 30 June amounts to 32 million euros.
The following table shows the Group financial liabilities (relevant items), considering contractual cash-flows:
| until 30 June 2023 | > 1 year | |
|---|---|---|
| Bank loans and overdrafts | 34 614 366 | 105 483 235 |
| Lease liabilities | 22 655 841 | 124 906 264 |
| Other non-current liabilities Accounts payable to suppliers and |
- | 4 176 |
| accrued costs (*) | 64 091 890 | - |
| Other current liabilities (**) | 5 975 239 | - |
| Total | 127 337 336 | 230 393 675 |
(*) amount excluding remunerations to be paid (note 14).
(**) amount excluding balances with the state and deferred income (note 15).
The capital structure balance is monitored based on the gearing ratio (defined as: (net remunerated debt / net remunerated debt + equity)) in order to place the ratio within a 50%-75% range.
As at 30 June 2022 and 31 December 2021 the gearing ratio was of 48%, as follows:
| jun/22 | Dec-21 | ||
|---|---|---|---|
| Lease liabilities | 147 562 105 | 143 068 334 | |
| Bank loans | 140 097 602 | 167 032 350 | |
| Other financial assets | -3 003 787 | -2 179 955 | |
| Cash and bank deposits | -70 903 129 | -96 968 003 | |
| Net indebtedness | 213 752 791 | 210 952 726 | |
| Equity | 230 187 786 | 228 663 582 | |
| Total capital | 443 940 577 | 439 616 308 | |
| Gearing ratio | 48% | 48% |
In restaurants where it operates with international brands, the group enters into long-term franchise agreements: 20 years for Burger King and 10 years for Pizza Hut, Taco Bell and KFC, which are renewable for another 10 years at the franchise's option, provided certain obligations have been fulfilled.
It has become practical for these contracts to be renewed. However, nothing obliges the franchisees to do so, so the risk of non-renewal may be verified.
In these contracts it is normal to contract the payment of an "Initial Fee" at the beginning of each contract and a "Renewall Fee" at the end of the initial period, in addition to a royalty of marketing operations on the sales made.
Periodically, development contracts are negotiated which guarantee the right and the obligation to open new restaurants. In case of non-compliance with the opening plans provided for in these contracts, franchisors may terminate their development contracts.
The group has development contracts with Taco Bell for Portugal and KFC, Burger King and Pret A Manger for Portugal and Spain. In unusual circumstances, such as the current pandemic crisis, readjustments to the development programs with the different brands Taco Bell and KFC were agreed. In the case of Burger King for Portugal and Spain, an amendment to the contract was being negotiated, but Burger King decided to terminate them, on the grounds that two restaurants were not built and three renovations weren't carried out, in addition to the 12 open restaurants and the 7 renovations made.
In the franchise agreements of several international brands operated by the subsidiaries of Ibersol SGPS, S.A. requirements and conditions are foreseen to be fulfilled prior to the disposal of the participation of the subsidiary that operates the contract, issuance of equity instruments and/or change of control in said subsidiaries, as well as the disposal of the business or restaurants owned by those subsidiaries, which include , among others: the prior agreement of the franchisors, information obligations and various transmission procedures, eventual payment of charges or fees, as well as the right of first refusal in favour of the franchisors. Franchise agreements with some international brands provide for the possibility of termination in the event of a change in control of Ibersol SGPS, S.A. without prior agreement from the franchisor.
4.1. The following Group companies were included in the consolidation perimeter as at 30 June 2022 and 31 December 2021:
| % Shareholding | ||||
|---|---|---|---|---|
| Company | Head Office | Jun/22 | Dec/21 | |
| Parent company | ||||
| Ibersol SGPS, S.A. | Porto | mãe | mãe | |
| Subsidiary companies | ||||
| Iberusa Hotelaria e Restauração, S.A. | Porto | 100% | 100% | |
| Ibersol Restauração, S.A. | Porto | 100% | 100% | |
| Ibersande Restauração, S.A. | Porto | 100% | 100% | |
| Ibersol Madeira e Açores Restauração, S.A. | Funchal | 100% | 100% | |
| Ibersol - Hotelaria e Turismo, S.A. | Porto | 100% | 100% | |
| Iberking Restauração, S.A. | Porto | 100% | 100% | |
| Iberaki Restauração, S.A. | Porto | 100% | 100% | |
| Restmon Portugal, Lda | Porto | 61% | 61% | |
| Vidisco, S.L. | Vigo - Espanha | 100% | 100% | |
| Inverpeninsular, S.L. | Vigo - Espanha | 100% | 100% | |
| Asurebi SGPS, S.A. | Porto | 100% | 100% | |
| Firmoven Restauração, S.A. | Porto | 100% | 100% | |
| IBR - Sociedade Imobiliária, S.A. | Porto | 100% | 100% | |
| Eggon SGPS, S.A. | Porto | 100% | 100% | |
| Anatir SGPS, S.A. | Porto | 100% | 100% | |
| Lurca, SA | Madrid-Espanha | 100% | 100% | |
| Sugestões e Opções-Actividades Turísticas, S.A | Porto | 100% | 100% | |
| José Silva Carvalho Catering, S.A | Porto | 100% | 100% | |
| (a) Iberusa Central de Compras para Restauração ACE | Porto | 100% | 100% | |
| (b) Vidisco, Pasta Café Union Temporal de Empresas | Vigo - Espanha | 100% | 100% | |
| Maestro - Serviços de Gestão Hoteleira, S.A. | Porto | 100% | 100% | |
| SEC - Eventos e Catering, S.A. | Porto | 100% | 100% | |
| IBERSOL - Angola, S.A. | Luanda - Angola | 100% | 100% | |
| HCI - Imobiliária, S.A. | Luanda - Angola | 100% | 100% | |
| Ibergourmet Produtos Alimentares (ex-Gravos 2012, S.A.) Porto | 100% | 100% | ||
| Lusinver Restauracion, S.A. | Vigo - Espanha | 100% | 100% | |
| The Eat Out Group S.L.U. | Barcelona - Espanha | 100% | 100% | |
| Pansfood, S.A.U. | Barcelona - Espanha | 100% | 100% | |
| Foodstation, S.L.U | Barcelona - Espanha | 100% | 100% | |
| Dehesa de Santa Maria Franquicias, S.L. | Barcelona - Espanha | 100% | 100% | |
| (c) Cortsfood, S.L. | Barcelona - Espanha | - | 50% | |
| Volrest Aldaia, S.L | Vigo - Espanha | 100% | 100% | |
| Volrest Alcala, S.L | Vigo - Espanha | 100% | 100% | |
| Volrest Alfafar, S.L. | Vigo - Espanha | 100% | 100% | |
| Volrest Rivas, S.L. | Vigo - Espanha | 100% | 100% | |
| Voesmu Restauracion, SL | Vigo - Espanha | 100% | 100% | |
| Associated companies | ||||
| Ziaicos - Serviços e gestão, Lda | Porto | 40% | 40% | |
| Companies controlled jointly | ||||
| UQ Consult - Serviços de Apoio à Gestão, S.A. | Porto | 50% | 50% |
(a) Company consortium agreement that acts as the Purchasing and Logistics Centre and provides the respective restaurants with raw materials and maintenance services. (b) Union Temporal de Empresas which was founded in 2005 and that during the year functioned as the Purchasing Centre in Spain by providing raw materials to the respective restaurants. (c ) Subsidiary liquidated in January 2022..
The above entities develop their business in the countries where they are based.
The subsidiary companies were included in the consolidation by the full consolidation method. UQ Consult, the jointly controlled entity and the associated Ziaicos, was subject to the equity method according to the group's shareholding in this company.
The shareholding percentages in the indicated companies imply an identical percentage in voting rights.
4.2.1. Acquisition of new companies
In the six month period ended in 30 June 2022 and in 31 December 2021 there were no acquisitions of subsidiaries.
4.2.2. Disposals
In the six month period periods ended in 30 June 2022 and in 31 December 2021 there were no disposals of subsidiaries.
4.2.3. Other changes in the consolidation perimeter
With reference to January 13, 2022, the subsidiary Cortsfood, SL was liquidated.
Revenue is measured by the amount that the entity expects to be entitled to receive under the contract entered into with the customer.
The revenue recognition model is based on five steps of analysis, in order to determine when revenue should be recognized and the amount to be recognised:
Revenue is recognized only when the performance obligation is satisfied, which depends on whether the "performance obligations" are satisfied over time or whether, on the contrary, the control over the good or service is transferred to the customer at a given time and is recognized as follows:
In most of the sales of goods carried out by the Group (Sales in Restaurants), there is only a performance obligation ("performance obligation"), so the revenue is recognized immediately, with the delivery of the goods to the customer. A performance obligation is a commitment to deliver goods or services to customers.
In the evaluation of contracts with customers in which a third party is involved, namely at the level of delivery people (home delivery), the Group evaluates its relationship between agent and principal, having concluded that, with regard to the obligation to deliver the goods , acts as an agent, as this performance obligation rests with the respective aggregators.
Regarding the obligation to perform the sale of goods, Ibersol acts as the principal and the aggregators as the agent, since Ibersol is responsible for their production, preparation, packaging and dispatch.
In catering sales, two types of services are distinguished - outside catering for specific events, direct to the final customer or through event organizers and concession contracts in which there is a multi-year exclusivity for the holding of events in these places - and in any of the In these cases, revenue is recognized at the time the event takes place.
In rendered services, revenue is recognized monthly, applying the contractual conditions of the franchise agreements, royalties with the calculation of the monthly sales of the franchisees.
Revenue from contracts with customers is presented as follows:
| 2022 | 2021 | |
|---|---|---|
| Turnover | 242 111 937 | 134 859 165 |
| Restaurant activity sales | 236 692 359 | 131 965 516 |
| Restaurants sales | 228 911 776 | 130 338 332 |
| Event catering sales | 5 229 647 | 970 994 |
| Catering sales in concessions | 2 550 935 | 656 190 |
| Merchandise sales | 4 476 956 | 2 281 569 |
| Rendered services | 942 622 | 612 080 |
| Franchised Royalties | 859 374 | 501 038 |
| Others | 83 248 | 111 042 |
In 30 June 2022, sales through Aggregator platforms amounted to 27.5 million Euros (21.4 million euros in the first half of 2021).
Ibersol Administration monitors the business based on the following segmentation (Note 2.5):
| SEGMENT | BRANDS | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Restaurants | Pizza Hut | Pasta Caffe | Pizza Movil | FresCo | Ribs | StaMaria | |||
| Counters | KFC | O'Kilo | Miit | Burger King | Pans & C.ª | Coffee Counters Taco Bell | |||
| Concessions, Travel | |||||||||
| and catering | Sol (SA) | Concessions | Catering | Convenience stores | Travel |
| Restaurants | Counters | Concessions, Travel and Other, write off and Catering adjustments |
Total Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| jun/22 | jun/21 | jun/22 | jun/21 | jun/22 | jun/21 | jun/22 | jun/21 | jun/22 | jun/21 | |
| Turnover | 46 480 171 | 29 413 321 144 068 806 | 92 381 877 | 51 423 876 | 12 982 454 | 139 085 | 81 513 | 242 111 937 134 859 165 | ||
| Operating income net of Amortization, deprec. and impairment losses Amortization, depreciation and impairment |
7 461 949 | 4 547 871 | 24 473 129 | 18 820 405 | 5 700 363 | 1 420 363 | -36 657 | 148 639 | 37 598 783 | 24 937 278 |
| losses Operating income |
-5 486 464 1 975 484 |
-1 716 187 | -6 264 059 -17 465 510 -15 917 878 7 007 620 |
2 902 527 | -3 549 470 -19 847 884 2 150 893 -18 427 522 |
-564 280 -600 937 |
-612 056 -463 416 |
-27 065 723 -42 641 876 10 533 060 -17 704 598 |
||
| Financial gains (losses) | -5 580 177 | -9 544 998 | ||||||||
| Financial gains (losses) | -76 689 | -105 719 | ||||||||
| Income tax | -1 165 777 | 4 405 931 | ||||||||
| Net profit | 3 710 417 -22 949 384 |
The total assets and liabilities allocated, by segment, are presented as follows:
| 30 JUNE 2022 | Restaurants | Counters | Concessions, Travel and Catering |
Other, write off and adjustments |
Group |
|---|---|---|---|---|---|
| Assets | 119 985 471 369 271 344 | 96 421 235 | 12 167 956 | 597 846 006 | |
| Liabilities | 44 434 034 170 025 941 | 26 287 691 | 827 299 | 241 574 966 | |
| Net investment in Intangible Assets and Property, Plant and Equipment (Notes 7 and 8) |
-115 826 | 15 650 876 | - | - | 15 535 050 |
| 30 DECEMBER 2021 | Restaurants | Counters | Concessions, Travel and Catering |
Other, write off and adjustments |
Group |
| Assets | 123 439 559 379 901 762 | 99 196 967 | 12 518 242 | 615 056 529 | |
| Liabilities | 42 821 202 163 854 471 | 25 333 521 | 797 271 | 232 806 465 | |
| Net investment in Intangible Assets and Property, Plant and Equipment (Notes 7 and 8) |
3 167 059 | 28 896 284 | 28 256 | 658 968 | 32 750 568 |
Unallocated assets and liabilities arising from investment, financing and tax activities are presented as follows:
| Jun/22 | Dec/21 | |||||
|---|---|---|---|---|---|---|
| Assets | Liabilities | Assets | Liabilities | |||
| Deferred taxes | 11 778 489 | 2 985 773 | 11 088 442 | 3 376 658 | ||
| Current taxes | 26 123 | 1 883 107 | 110 222 | 456 400 | ||
| Current bank loans | - | 34 614 366 | - | 26 593 284 | ||
| Non current bank loans | - | 105 483 235 | - | 140 439 066 | ||
| Derivative financial instrument | - | 5 896 | - | 18 976 | ||
| Non-current financial assets | 1 043 942 | - | 978 965 | - | ||
| Financial investments - joint controlled subsidiaries | 3 036 781 | - | 2 940 318 | - | ||
| Other financial assets | 3 003 787 | - | 2 179 955 | - | ||
| Total | 18 889 121 | 144 972 377 | 17 297 902 | 170 884 384 |
| Jun/22 | Dec/21 | |||||
|---|---|---|---|---|---|---|
| Assets | Liabilities | Assets | Liabilities | |||
| Allocated by segment | 597 846 006 | 241 574 966 | 615 056 529 | 232 806 465 | ||
| Not allocated | 18 889 121 | 144 972 377 | 17 297 902 | 170 884 384 | ||
| 616 735 128 | 386 547 344 | 632 354 431 | 403 690 850 |
As at 30 June 2022 and 2021 income and non-current assets by geography is presented as follows:
| 30 JUNE 2022 | Portugal | Angola | Spain | Group |
|---|---|---|---|---|
| Turnover | 152 873 614 | 6 760 023 | 82 478 300 | 242 111 937 |
| Property, plant and equipment and intangible assets | 187 510 206 | 16 406 850 | 48 081 727 | 251 998 783 |
| Rights of use | 76 177 803 | 583 280 | 65 478 757 | 142 239 840 |
| Goodwill | 7 474 768 | 130 714 | 71 427 339 | 79 032 821 |
| Deferred tax asset | 4 962 414 | - | 6 816 075 | 11 778 489 |
| Financial investments - joint controlled subsidiaries | 3 036 781 | - | 3 036 781 | |
| Non-current financial assets | 643 942 | - | 400 000 | 1 043 942 |
| Other financial assets | - | 842 063 | - | 842 063 |
| Other non-current assets | - | - | 7 513 186 | 7 513 186 |
| Total non-current assets | 279 805 914 | 17 962 907 | 199 717 084 | 497 485 904 |
| 30 JUNE 2021 | Portugal | Angola | Spain | Group |
| Turnover | 89 447 109 | 3 819 083 | 41 592 973 | 134 859 165 |
| 31 DECEMBER 2021 | ||||
| Property, plant and equipment and intangible assets | 183 302 165 | 16 913 672 | 50 028 570 | 250 244 407 |
| Rights of use | 76 171 530 | 514 414 | 62 185 207 | 138 871 151 |
| Goodwill | 7 474 768 | 130 714 | 71 427 339 | 79 032 821 |
| Deferred tax asset | 4 899 059 | - | 6 189 382 | 11 088 442 |
| Financial investments - joint controlled subsidiaries | 2 940 318 | - | 2 940 318 | |
| Non-current financial assets | 578 965 | - | 400 000 | 978 965 |
| Other financial assets | - | 841 165 | - | 841 165 |
| Other non-current assets | - | - | 7 524 331 | 7 524 331 |
| Total non-current assets | 275 366 805 | 18 399 965 |
During the six month period ended on 30 June 2022 and the period ended on 31 December 2021, rights of use, as well as in the respective accumulated amortizations and impairment losses, were as follows:
| Stores and Commercial |
|||||
|---|---|---|---|---|---|
| Spaces | Buildings | Equipment | Other assets | Total | |
| 1 January 2021 | |||||
| Initial net amount | 270 400 085 | 8 021 626 | 2 993 872 | 217 007 | 281 632 590 |
| Currency conversion | 154 069 | - | - | - | 154 069 |
| Increases | 32 581 675 | 50 201 | 2 270 203 | 203 951 | 35 106 030 |
| Decreases | -128 752 142 | -38 928 | - | - | -128 791 070 |
| Transfers | - | -3 022 | -75 610 | -11 364 | -89 996 |
| Depreciation in the year | -46 258 100 | -2 148 068 | -691 846 | -42 456 | -49 140 470 |
| Final net amount | 128 125 587 | 5 881 809 | 4 496 619 | 367 138 | 138 871 151 |
| 31 December 2021 | |||||
| Cost | 185 762 640 | 14 604 837 | 7 132 225 | 470 934 | 207 970 636 |
| Accumulated depreciation | -57 637 054 | -8 723 027 | -2 635 606 | -103 796 | -69 099 483 |
| Net amount | 128 125 587 | 5 881 809 | 4 496 619 | 367 138 | 138 871 151 |
| Stores and Commercial |
|||||
|---|---|---|---|---|---|
| Spaces | Buildings | Equipment | Other assets | Total | |
| 1 January 2022 | |||||
| Initial net amount | 128 125 587 | 5 881 809 | 4 496 619 | 367 138 | 138 871 152 |
| Currency conversion | 240 692 | - | - | - | 240 692 |
| Increases | 14 942 780 | 10 423 | 997 765 | 64 583 | 16 015 551 |
| Decreases | -58 945 | - | - | - | -58 945 |
| Depreciation in the year | -10 970 161 | -1 100 409 | -716 409 | -41 632 | -12 828 611 |
| Final net amount | 132 279 953 | 4 791 823 | 4 777 975 | 390 089 | 142 239 840 |
| 30 June 2022 | |||||
| Cost | 199 312 456 | 14 615 260 | 8 129 990 | 535 517 | 222 593 222 |
| Accumulated depreciation | -67 032 503 | -9 823 437 | -3 352 014 | -145 428 | -80 353 382 |
| Net amount | 132 279 953 | 4 791 823 | 4 777 975 | 390 089 | 142 239 840 |
The value of the increases corresponds to 14 new leases (9 of spaces and 5 of equipment), 10 renovations and 8 extensions of space leases and also the effect of remeasurement of contracts by the rent updates by the Consumer Price Index and other changes to expected lease payments (e.g. in cases of lease term reassessment).
The decrease in depreciation is due to the leasing contracts of the Airports in Spain, which in 2021 were being considered as a result of the application of IFRS16.
During the six month period ended 30 June 2022 and the period ended on 31 December 2021, property, plant and equipment, as well as in the respective depreciation and accumulated impairment losses, were as follows:
| Other property, plant and |
Property, plant and equipment |
|||||
|---|---|---|---|---|---|---|
| Land | Buildings | Equipment | equipment | in progress | Total | |
| 1 January 2021 | ||||||
| Cost | 15 001 280 | 276 253 056 | 141 016 913 | 31 686 781 | 1 422 880 | 465 380 910 |
| Accumulated depreciation | -263 756 | -116 144 593 | -105 430 174 | -21 309 796 | - | -243 148 319 |
| Accumulated impairment | - | -8 542 269 | -367 858 | -18 437 | - | -8 928 564 |
| Net amount | 14 737 524 | 151 566 194 | 35 218 881 | 10 358 548 | 1 422 880 | 213 304 027 |
| 1 January 2021 | ||||||
| Initial net amount | 14 737 524 | 151 566 194 | 35 218 881 | 10 358 548 | 1 422 880 | 213 304 027 |
| Currency conversion | 168 469 | 177 992 | 27 483 | -17 | 47 175 | 421 102 |
| Charge-off | 4 647 921 | 18 519 568 | 4 743 443 | 1 690 090 | 142 409 | 29 743 431 |
| Decreases | - | -117 430 | -55 986 | -19 595 | - | -193 010 |
| Transfers | - | 396 419 | 485 375 | 36 569 | -843 745 | 74 617 |
| Depreciation in the year | -47 575 | -13 778 150 | -8 587 171 | -2 353 322 | - | -24 766 218 |
| Impairment in the year | -9 000 | -3 526 492 | -627 433 | -47 315 | - | -4 210 240 |
| Final net amount | 19 497 339 | 153 238 101 | 31 204 592 | 9 664 958 | 768 719 | 214 373 711 |
| 31 December 2021 | ||||||
| Cost | 19 835 816 | 290 078 276 | 144 097 484 | 33 130 863 | 768 720 | 487 911 159 |
| Accumulated depreciation | -329 477 | -125 922 984 | -112 137 610 | -23 414 548 | - | -261 804 619 |
| Accumulated impairment | -9 000 | -10 917 191 | -755 280 | -51 359 | - | -11 732 830 |
| Net amount | 19 497 339 | 153 238 101 | 31 204 592 | 9 664 958 | 768 719 | 214 373 711 |
| Land | Buildings | Equipment | Other property, plant and equipment |
Property, plant and equipment in progress |
Total | |
|---|---|---|---|---|---|---|
| 1 January 2022 | ||||||
| Initial net amount | 19 497 339 | 153 238 101 | 31 204 592 | 9 664 958 | 768 719 | 214 373 711 |
| Currency conversion | 378 571 | 241 323 | -73 026 | -39 636 | 1 298 | 508 530 |
| Charge-off | 666 478 | 7 901 400 | 2 675 574 | 2 119 715 | 805 629 | 14 168 797 |
| Decreases | - | -81 759 | 2 100 | -15 750 | -1 847 | -97 254 |
| Transfers | - | 93 983 | 41 230 | 3 249 | -133 465 | 4 996 |
| Depreciation in the year | -26 081 | -7 051 560 | -4 148 473 | -1 247 082 | - | -12 473 196 |
| Impairment in the year | - | - | - | - | - | - |
| Final net amount | 20 516 307 | 154 341 488 | 29 701 997 | 10 485 454 | 1 440 334 | 216 485 584 |
| 30 June 2022 | ||||||
| Cost | 20 934 208 | 297 680 783 | 147 185 143 | 35 214 755 | 1 440 335 | 502 455 225 |
| Accumulated depreciation | -408 901 | -132 499 486 | -116 727 863 | -24 677 943 | - | -274 314 194 |
| Accumulated impairment | -9 000 | -10 839 809 | -755 280 | -51 359 | - | -11 655 448 |
| Net amount | 20 516 307 | 154 341 488 | 29 701 999 | 10 485 454 | 1 440 334 | 216 485 584 |
The investment incurred in the first half of 2022 refers, essentially, to the opening of four KFC, two Burger King, two Pans and one Taco Bell.
In 2021, the investment of around 30 million refers to the opening of five Taco Bells (2 due to the conversion of other existing units), five Pizza Huts, twelve Burger Kings, six KFC and the acquisition of land for the installation of 5 restaurants. The investment of approximately 25 million Euros in 2020 essentially refers to the opening of six KFC's, six Burger King's, two Taco Bell's and a Ribs restaurant.
Under the expansion and development contracts with the brands (see note 3.2 b), the Group assumed the commitment to make investments in tangible and intangible fixed assets associated with new store openings and remodelling.
The assessment of the existence of signs of impairment at CGU and the respective tests, if necessary, were performed out at each reporting date. Each store / restaurant is considered a CGU, and in the case of airports each airport it's a CGU.
Each UCG is composed of all the assets and liabilities attributable to each restaurant, namely: tangible fixed assets, intangible assets, rights of use and respective lease liabilities.
Assets subject to amortization are reassessed to determine any impairments, to be constituted or to be reversed, whenever events or changes in circumstances occur that compromise sales capacity, namely restrictions and restrictions on mobility or accessibility to restaurants, as well as the opening of a competitor in the area of influence and that give rise to the value at which they are carried may or may not be recoverable. Stores with negative profitability during the first two years are not usually an indicator of impairment and the viability plans of the time of the investment decision are considered valid, as this is the period normally necessary to reach levels of notoriety and local market share.
The assumptions for the analysis of impairment of Tangible Fixed Assets used in the preparation of the financial statements as of December 31, 2021 remain valid and there have been no changes to the facts and circumstances underlying them. No relevant evidence was identified that would indicate the need to carry out new impairment tests in the first six months of 2022.
Goodwill and intangible assets are broken down as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Goodwill | 79 032 821 | 79 032 821 |
| Intangible assets | 35 513 199 | 35 870 696 |
| 114 546 020 | 114 903 517 |
During the six month period ended 30 June 2022 and the period ended on 31 December 2021, intangible assets, amortization and accumulated impairment losses were as follows:
| Goodwill | Brands | Industrial property |
Other intangible Assets |
Intangible Assets in progress |
Total | |
|---|---|---|---|---|---|---|
| 1 January 2021 | ||||||
| Cost | 93 984 684 | 22 000 000 | 49 137 541 | 12 867 206 | 1 655 511 | 179 644 942 |
| Accumulated amortization | - | -4 583 333 | -29 430 863 | -11 075 698 | - | -45 089 893 |
| Accumulated impairment | -13 475 042 | - | -3 681 055 | -39 711 | - | -17 195 808 |
| Net amount | 80 509 642 | 17 416 667 | 16 025 623 | 1 751 799 | 1 655 511 | 117 359 239 |
| 1 January 2021 | ||||||
| Initial net amount | 80 509 642 | 17 416 667 | 16 025 623 | 1 751 799 | 1 655 511 | 117 359 239 |
| Currency conversion | - | - | 10 101 | - | 26 373 | 36 474 |
| Charge-off | - | - | 3 458 095 | 5 000 | 136 179 | 3 599 274 |
| Decreases | - | - | -146 657 | - | -252 470 | -399 127 |
| Transfers | - | - | 308 401 | - | -335 351 | -26 950 |
| Amortization in the year | - | -1 100 000 | -2 091 966 | -345 149 | - | -3 537 115 |
| Impairment in the year | -1 476 821 | - | -651 454 | - | - | -2 128 275 |
| Final net amount | 79 032 821 | 16 316 667 | 16 912 142 | 1 411 652 | 1 230 241 | 114 903 517 |
| 31 December 2021 | ||||||
| Cost | 93 984 684 | 22 000 000 | 52 839 447 | 12 232 341 | 1 230 241 | 182 286 713 |
| Accumulated amortization | - | -5 683 333 | -31 599 025 | -10 788 395 | - | -48 070 753 |
| Accumulated impairment | -14 951 863 | - | -4 328 280 | -32 296 | - | -19 312 439 |
| Net amount | 79 032 821 | 16 316 667 | 16 912 142 | 1 411 652 | 1 230 241 | 114 903 517 |
| Industrial | Other intangible | Assets in | ||||
|---|---|---|---|---|---|---|
| Goodwill | Brands | property | Assets | progress | Total | |
| 1 January 2022 | ||||||
| Initial net amount | 79 032 821 | 16 316 667 | 16 912 142 | 1 411 652 | 1 230 241 | 114 903 517 |
| Currency conversion | - | - | 6 794 | - | 48 429 | 55 223 |
| Charge-off | - | - | 523 587 | - | 958 493 | 1 482 080 |
| Decreases | - | - | -104 933 | - | 86 362 | -18 571 |
| Transfers | - | - | 43 181 | -5 000 | -43 181 | -5 000 |
| Amortization in the year | - | -550 000 | -1 162 376 | -158 853 | - | -1 871 229 |
| Impairment in the year | - | - | - | - | - | - |
| Final net amount | 79 032 821 | 15 766 667 | 16 218 395 | 1 247 799 | 2 280 344 | 114 546 020 |
| 30 June 2022 | ||||||
| Cost | 93 984 684 | 22 000 000 | 53 424 413 | 12 227 788 | 2 280 344 | 183 917 229 |
| Accumulated amortization | - | -6 233 333 | -32 877 738 | -10 947 695 | - | -50 058 766 |
| Accumulated impairment | -14 951 863 | - | -4 328 280 | -32 296 | - | -19 312 439 |
| Net amount | 79 032 821 | 15 766 667 | 16 218 395 | 1 247 799 | 2 280 344 | 114 546 020 |
Intangible assets in progress mostly relate to territorial rights to open units still under construction, which are paid in advance to brands at the time when joint agreements are made to open units between Ibersol and the franchisors.
Goodwill is allocated to each of the groups of homogeneous cash-generating units as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Restaurants | 7 147 721 | 7 147 721 |
| Counters | 37 199 991 | 37 199 991 |
| Concessions, Travel and Catering | 34 505 388 | 34 505 388 |
| Other, write off and adjustments | 179 721 | 179 721 |
| 79 032 821 | 79 032 821 |
Regarding the above segments, the following groups of homogeneous cash-generating units were identified:
| Jun/22 | Dec/21 | |
|---|---|---|
| Restaurants | ||
| Ribs | 5 175 479 | 5 175 479 |
| Pizza Hut | 1 972 242 | 1 972 242 |
| Sub-total | 7 147 721 | 7 147 721 |
| Counters | ||
| Pans & C.º | 11 850 160 | 11 850 160 |
| Burguer King | 24 641 046 | 24 641 046 |
| KFC | 708 785 | 708 785 |
| Sub-total | 37 199 991 | 37 199 991 |
| Concessions, Travel and Catering | ||
| Concessions and Travel (SP) | 30 630 919 | 30 630 919 |
| Concessions and Travel (PT) | 850 104 | 850 104 |
| Catering | 3 024 365 | 3 024 365 |
| Sub-total | 34 505 388 | 34 505 388 |
| Others | 179 721 | 179 721 |
| TOTAL | 79 032 821 | 79 032 821 |
Goodwill is not amortized. The Group performs impairment tests on goodwill annually, or whenever there are signs of impairment.
For the purpose of impairment tests on CGU, the recoverable amount was determined based on the value in use, according to the discounted cash flow method. The recoverable value of the CGU derives from assumptions related to the activity, namely, sales volumes, operating costs, planned investments, remodelling and closing of units, the impact of other market players, internal management projections and historical performance.
These projections result from the budgets for the following period and the estimated cash flows for a subsequent period of four years reflected in the medium and long-term plans approved by the Board of Directors.
In terms of impairment losses, the effects of the pandemic on the restaurant sector and the pace of recovery, particularly in locations most dependent on the recovery of tourist traffic, namely in concessioned spaces, resulted in the maintenance of the application of different risks in determining the value recoverable from the tests carried out, depending on the business areas.
In 2021, the tests performed resulted in the need to record impairment related to the goodwill allocated to Frescco units in the amount of 1,476,821 euros.
With the exception of the results obtained in the analysis of the FresCo operation in Spain, the remaining impairment tests did not result in impairment losses, which is in line with Management's expectations, which effectively indicate that there are no other permanent losses in its businesses, with the clear expectation of business recovery in the medium term to pre-Covid-19 levels.
In the first six months of 2022 considering the overall positive performance of the various business segments, namely the concessions and catering segment, despite other factors such as the increase in inflation and interest rates, management considers that to date there are no indications relevant impairments that indicate the need to carry out new impairment tests in the first six months of 2022.
Intangible assets that do not have a defined useful life are not subject to amortization but are subject to annual impairment tests (or in each reporting period in which there is evidence of impairment). In the remaining intangible assets, with a finite useful life, the impairment tests carried out revealed that the recoverable amount is higher. The assumptions for the analysis of impairment used in the preparation of the financial statements as at 31 December 2021 remain valid and there have been no changes to the facts and circumstances underlying them. No relevant evidence was identified that would indicate the need to carry out new impairment tests in the first six months of 2022.
In the case of own brands, valuations were carried out based on the value in use calculated based on the Discounted Cash Flow (DCF) method and in accordance with the Royalty Relief methodology, depending on the type of asset sustaining the recoverability of their values.
The values reached are sustained by historical performance, expectations of market development and strategic development plans for each business.
Industrial property includes: space exploitation rights (entrance rights or surface rights), trademark exploitation rights and concession rights.
The group's main operating rights relate to the franchise rights paid to international brands at the opening of the restaurants operating under the brand: 20 years for Burger King and 10 years for Pizza Hut and KFC, which are renewable by others 10 years by option of the franchisee.
On 30 June 2022, the group's concessions, territorial rights and related life cycle are shown below:
| Concession Rights | No of years | Termination Date |
|---|---|---|
| Lusoponte Service Areas | 33 | 2032 |
| 2ª Circular Service Areas | 10 | 2027 |
| Portimão Marina | 60 | 2061 |
| Aeroport Service Area | 20 | 2022 |
| Pizza Hut Cais Gaia | 20 | 2024 |
| Modivas Service Areas | 28 | 2031 |
| Barcelos Service Areas | 30 | 2036 |
| Alvão Service Areas | 30 | 2036 |
| Lousada (Felgueiras) Service Areas | 24 | 2030 |
| Vagos Service Areas | 24 | 2030 |
| Aveiro Service Areas | 24 | 2030 |
| Ovar Service Areas | 24 | 2030 |
| Gulpilhares (Vilar do Paraíso) Service Areas | 24 | 2030 |
| Talhada (Vouzela) Service Areas | 25 | 2031 |
| Viseu Service Areas | 25 | 2031 |
| Matosinhos Service Areas | 24 | 2030 |
| Maia Service Areas | 26 | 2032 |
As intangible assets related to industrial property are allocable to cash-generating units, the impairment analysis is carried out as described in note 7, in the section "Impairment tests for cash-generating units".
Concerning intangible assets in progress, they are also allocated to the cash-generating unit of the store, under construction, which is based on an economic feasibility analysis that assumes the recovery of the investment and which is carried out before the decision to open each new unit.
The amount of financial assets refers to investments in Angolan State Treasury Bonds. The separation by maturity is as follows:
| Jun/22 | ||||||
|---|---|---|---|---|---|---|
| Non | Dec/21 Non |
|||||
| Current | current | Total | Current | current | Total | |
| Treasury bonds | 2 193 085 | 854 279 | 3 047 364 | 1 429 154 | 968 215 | 2 397 368 |
| Sub-total | 2 193 085 | 854 279 | 3 047 364 | 1 429 154 | 968 215 | 2 397 368 |
| Accumulated impairment losses | 31 361 | 12 216 | 43 577 | 90 363 | 127 050 | 217 413 |
| TOTAL | 2 161 724 | 842 063 | 3 003 787 | 1 338 791 | 841 165 | 2 179 955 |
As there was no significant increase in credit risk since the initial recognition of Treasury Bonds, expected losses within a period of 12 months were considered.
Indices used for Probability of Default and Loss Given Default are in accordance with the publication of Moodys and S&P, the probability of default considered was 2.4% and the loss given default considered to be 59%.
Treasury bond securities held by the group on 30 June 2022 with a maturity of more than 12 months are as follows:
| Non-current | TOTAL | |||
|---|---|---|---|---|
| Issue date | 08/07/2020 | 31/08/2017 | 31/07/2020 | - |
| Acquisition date | 25/05/2021 | 06/05/2021 | 24/11/2021 | - |
| Due date | 08/07/2023 | 31/08/2024 | 31/07/2024 | - |
| BNA exchange rate | n/a | 645 | n/a | - |
| Amount | 1 350 | 250 | 1 000 | - |
| Amount as at 30/06/2022 | 283 661 | 375 507 | 195 111 | 854 279 |
| Gross annual return | 16,25% | 7% | 16,50% | - |
Treasury bond securities held by the group as at 30 June 2022 with a maturity of less than 12 months are presented as follows:
| 16/04/2021 28/02/2019 25/05/2021 05/05/2021 16/10/2022 28/02/2023 n/a |
|---|
| 2 000 1 000 |
| 443 328 213 559 |
| 15,75% 16,5% |
| TOTAL |
| 29/09/2017 21/04/2021 - |
| 16/03/2021 04/10/2021 - |
| 29/09/2022 21/04/2023 - |
| n/a - |
| 250 1 200 - |
| 51 335 257 130 2 193 085 |
| 12% 16% - |
Other non-current assets breakdown is presented as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Other non-current assets | 7 513 186 | 7 524 331 |
| 7 513 186 | 7 524 331 |
Balance of other non-current debtors is mainly comprised of deposits and securities in Spain resulting from lease agreements. Trade accounts receivable from other debtors are initially recognized at fair value and, in the case of medium and long-term debt, are subsequently measured at amortized cost using the effective interest method, less impairment.
The Group considers that this asset is not exposed to significant credit risk, since in general these assets are directly associated with rent payment obligations.
These guarantees may be enforced by the beneficiaries in the event of breach of contract by Ibersol, for example in cases where the rent is not paid.
As at 30 June 2022 and 31 December 2021, Cash and cash equivalents were as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Cash | 760 692 | 1 029 212 |
| Bank deposits | 70 141 937 | 95 938 291 |
| Treasury applications | 500 | 500 |
| Cash and bank deposits in the balance sheet | 70 903 129 | 96 968 003 |
| Bank overdrafts | - | - |
| Cash and cash equivalents in the cash flow statement | 70 903 129 | 96 968 003 |
As at 30 June 2022 and 31 December 2021, Other current assets were as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Clients | 7 385 556 | 6 369 453 |
| State and other public entities | 5 200 672 | 5 803 060 |
| Other debtors (1) | 13 244 994 | 10 895 308 |
| Advances to suplliers | 333 729 | 202 341 |
| Advances to fixed suppliers | 296 657 | 225 008 |
| Accruals and income | 3 540 848 | 4 386 985 |
| Deferred costs | 2 156 868 | 1 698 608 |
| Other current assets | 32 159 324 | 29 580 764 |
| Accumulated impairment losses | -2 834 715 | -2 882 406 |
| 29 324 609 | 26 698 358 |
Clients balance, related to supplies to franchisees and catering contracts, reflects the growth in activity in the second quarter of 2022.
(1) As at 30 June 2022 and 31 December 2021, the balance in Other debtors includes aggregators, other debtor balances from suppliers c/c, debts to suppliers for the recovery of charges for marketing and rappel co-payments, meal vouchers (delivered by customers), short-term bails and various advances, as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Meal card/Aggregators | 5 623 357 | 3 939 484 |
| Deposits and bails | 3 720 436 | 2 611 543 |
| Marketing and rappel | 1 034 444 | 2 244 102 |
| Suppliers and other debit balances | 2 003 140 | 1 674 746 |
| Advances | 77 706 | 136 857 |
| Personnel expenses | 168 351 | 79 559 |
| Credit sales | 293 460 | 69 143 |
| Insurance | 61 275 | 68 692 |
| IEFP | 4 847 | 43 708 |
| Continente card | 257 976 | 27 475 |
| 13 244 994 | 10 895 308 | |
As at 30 June 2022 and 31 December 2021, current and non-current loans were as follows:
| Non-current | Jun/22 | Dec/21 |
|---|---|---|
| Bank loans | 66 933 235 | 75 839 066 |
| Commercial paper programmes | 38 550 000 105 483 235 |
64 600 000 140 439 066 |
| Current | Jun/22 | Dec/21 |
| Bank overdrafts | - | - |
| Bank loans | 19 488 438 | 13 325 470 |
| Commercial paper programmes | 15 125 928 | 13 267 814 |
| 34 614 366 | 26 593 284 | |
| Total loans | 140 097 602 | 167 032 350 |
Some of the Ibersol Group's bank loan contracts and commercial paper programs with financial institutions, corresponding to a total outstanding amount as of 30 June 2022 of 35.7 million euros, include Financial Covenants (i.e. 25% of the total loans outstanding on that date). Such covenants can be summarized as follows:
| Financial Covenants (consolidated ratios) |
|
|---|---|
| ND/EBITDA | < 4,5x a 5,5x |
| ND/EBITDA (without IFRS16) | < 3,5x a 4x |
| ND/EBITDAR | < 5x |
| Equity/Assets | > 30% |
Some contracts still have Debt/EBITDA adjusted for the effects
Additionally, the total amount owed as at 30 June 2022 in financing from the Ibersol Group for which the respective creditors have the possibility of considering the debt overdue in the event of a change in shareholder control was 24.1 million euros (i.e., 17.0% of the total amount of loans outstanding on that date).
In Spain, there is a financing agreement of the subsidiary Eat Out Group maturing at the end of 2022, with ratios referring to the company's consolidated (Debt/Ebitda without IFRS16 of 1.5x and Ebitda/Financial Expenses of 5x) and that until 2021 were suspended.
Movements in 30 June 2022 and 31 December 2021 in current and non-current loans, except financial leases and bank overdrafts, are as follows:
| jun/22 | Dec/21 | |
|---|---|---|
| 1st January | 167 032 350 | 165 068 581 |
| Variations with impact on cash flows: | ||
| Loan receipts obtained | 5 167 928 | 34 298 753 |
| Financial debt payments | -32 310 475 | -32 227 604 |
| Variations without impact on cash flows: | ||
| Variation effect of bank overdrafts (note 11) | - | -916 |
| Financing assembly costs | -30 967 | -344 259 |
| Capitalized interest and others | 238 766 | 237 793 |
| 140 097 602 | 167 032 350 |
As at 30 June 2022 and 31 December 2021, the company has commitments made to third parties, arising from lease contracts, namely real estate contracts. The breakdown of future payments of lease payments, given their maturity, can be analyzed as follows:
| jun/22 dez/21 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Current | Non-current | Total | Current | Non-current | Total | ||||
| Leases | 22 655 841 | 124 906 264 | 147 562 105 | 21 645 649 | 121 422 685 | 143 068 334 | |||
| TOTAL | 22 655 841 | 124 906 264 | 147 562 105 | 21 645 649 | 121 422 685 | 143 068 334 |
The movements in the first 6 months 2022 in liabilities with leases are presented as follows:
| jun/22 | Dec/21 | |
|---|---|---|
| 1st January | 143 068 335 | 329 014 533 |
| Variations with impact on cash flows: | ||
| Financial debt payments | -14 737 360 | -34 031 830 |
| Variations without impact on cash flows: | ||
| Update of liabilities with leases | 3 924 562 | 13 361 651 |
| Lease contract increases | 16 015 550 | 35 106 030 |
| Contract terminations / store closings | -58 945 | -276 893 |
| Write-off Liabilities lease contracts AENA (1) | - | -195 183 511 |
| Income concessions resulting from the COVID-19 pandemic | -769 943 | -4 681 174 |
| Others | 119 904 | -240 474 |
| 147 562 105 | 143 068 335 |
(1) Referring to October 1, 2021 the debt of concession contracts at airports in Spain managed by AENA was derecognised, pursuant to the application of Law 13/2021 (introductory note). This diploma determines the reduction of the minimum guaranteed annual rents of the contracts, in direct proportion to the reduction of annual passenger traffic compared to those verified in 2019, until the annual volume of passengers at the airport resumes the traffic of the same year, thus making it impossible for the future responsibilities of these same contracts are determined.
During the first six months of 2022, the Group obtained discounts on rent payments with the amount of 769,943 Euros that led to the respective decrease in liabilities without outflow of funds.
As at 30 June 2022 and 31 December 2021, accounts payable to suppliers and accrued costs were broken down as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Suppliers c/ a | 40 927 614 | 38 501 025 |
| Suppliers - invoices pending approval | 5 117 829 | 3 196 603 |
| Suppliers of fixed assets c/ a | 2 724 789 | 10 063 593 |
| Total accounts payable to suppliers | 48 770 232 | 51 761 221 |
| Jun/22 | Dec/21 | |
| Accrued costs - Payable insurance | 160 134 | 108 056 |
| Accrued costs - Payable remunerations | 11 234 199 | 8 987 232 |
| Accrued costs - Rent and lease (1) | 6 266 598 | 5 583 055 |
| Accrued costs - External services | 7 092 831 | 5 583 485 |
| Accrued costs - Other | 1 802 094 | 484 342 |
| Total acrrued costs | 26 555 857 | 20 746 170 |
| Total accounts payable to suppl.and accrued costs | 75 326 089 | 72 507 391 |
(1) accrued costs- rent and lease include only the amount related to variable rents that are not included in the lease liability.
As at 30 June 2022 and 31 December 2021, "Other current liabilities" may be broken down as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Other creditors | 5 975 239 | 5 536 323 |
| State and other public entities | 8 856 207 | 8 480 036 |
| Deferred income | 1 512 516 | 782 182 |
| 16 343 962 | 14 798 541 |
As at 30 June 2022, income tax receivable amounts to 26,123 Euros (2021: 110,222 Euros), presented as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Inverpeninsular Group (1) Ibersol Angola |
21 615 - |
35 614 70 100 |
| Others | 4 508 | 4 508 |
| 26 123 | 110 222 |
(1) tax amount resulting from the tax group of subsidiaries in Spain.
Income tax payable in the periods ended 30 June 2022 and 31 December 2021 is broken down as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| RETGS (1) | 1 839 969 | 444 395 |
| Ibersol Angola | 43 138 | - |
| Others (2) | - | 12 006 |
| 1 883 107 | 456 401 |
(1) amount of tax resulting from the tax group of subsidiaries in Portugal (RETGS).
(2) excluded from RETGS, income tax to be paid by subsidiary Iberusa ACE.
Changes in deferred taxes in the period are:
| Movement in the | |||
|---|---|---|---|
| Deferred taxes | 30.06.2022 | 31.12.2021 | year (1) |
| Assets | 11 778 489 | 11 088 442 | 690 047 |
| Liabilities | -2 985 773 | -3 376 658 | 390 885 |
| Total | 8 792 716 | 7 711 784 | 1 080 932 |
(1) tax for the year in the amount of 834,651 euros (note 19) and 246,281 euros of currency exchange conversion recognized in reserves.
Nominal tax rates of the jurisdictions in which the Group is present are as follows:
| Portugal | 21% |
|---|---|
| Spain | 25% |
| Angola | 25% |
As at 30 June 2022 and 31 December 2021 deferred tax assets on, according to jurisdiction and the temporary differences that generate them, are broken down as follows:
| jun/22 | Dec/21 | ||||||
|---|---|---|---|---|---|---|---|
| Deferred tax assets | Portugal | Spain | Total | Portugal | Spain | Total | |
| Tax losses carried forward | - | 7 569 349 | 7 569 349 | - | 7 005 961 | 7 005 961 | |
| Ded. temporary differences (IFRS16) (1) | - | 871 897 | 871 897 | - | 744 265 | 744 265 | |
| Taxable temporary differences | -33 859 | -1 572 089 | -1 605 947 | -33 859 | -1 572 089 | -1 605 947 | |
| Homogenization of property, plant and | |||||||
| equipment and intangible assets (2) | -4 999 587 | -742 016 | -5 741 604 | -5 065 885 | -677 689 | -5 743 575 | |
| Other temporary differences deductible | |||||||
| and tax credits (3) | 9 995 860 | 688 934 | 10 684 794 | 9 998 803 | 688 934 10 687 737 | ||
| 4 962 414 | 6 816 075 | 11 778 489 | 4 899 059 | 6 189 382 11 088 442 |
(1) deferred taxes resulting from a temporary difference due to the application of IFRS16 in the Group's consolidated accounts, not applicable in the statutory accounts of subsidiaries in Spain.
(2) deferred taxes that correspond to the difference in the net amount considered in the individual financial statements of the subsidiaries and the net amount to which they contribute in the consolidated financial statements.
(3) amount referring, essentially to tax benefits. As at 31 December 2021, there are 147,000 euros of tax benefit associated with the capital increase and 9,847,534 euros of tax benefits not deducted, to be used in subsequent years, of which 1,337,879 euros of RFAI for 2019, 2,066,044 euros of 2020 RFAI, 4,731,689 euros from 2021 RFAI and 1,711,922 euros from CFEI II (1,142,477 euros deductible until 2025 and 569.45 euros until 2026, inclusive). It should be noted that these credits have a reporting period of 10 tax periods, a period whose count was suspended during 2020 and during the following tax period, according to Law No. 21/2021, of 21 of April.
As at 30 June 2022 and 31 December 2021, Deferred tax liabilities, according to jurisdiction and the temporary differences that generated them, are broken down as follows:
| jun/22 | Dec/21 | |
|---|---|---|
| Deferred tax liabilities | Angola | |
| Homogenization of property, plant and equipment and intangible | ||
| assets (1) | -790 296 | -450 931 |
| Hyperinflationary Economies (IAS 29) | 3 848 488 | 3 927 202 |
| Deductible temporary differences (IFRS16) | -61 524 | -45 259 |
| Other temporary differences | -10 895 | -54 354 |
| 2 985 772 | 3 376 657 |
(1) deferred taxes corresponding to the difference of the net value as in the individual financial statements of the subsidiaries and the net amount that they contribute in the consolidated.
Other operating and income costs in the six months periods ended 30 June 2022 and 30 June 2021 are broken down as follows:
| Other operating costs | 2022 | 2021 | |
|---|---|---|---|
| Direct/indirect taxes not assigned to operating activities | 473 265 | 447 583 | |
| Losses in fixed assets | 45 633 | 205 604 | |
| Currency exchange differences | 573 771 | 457 155 | |
| Membership fees, donations samples and inventory offers | 88 981 | 60 484 | |
| Impairment adjustments (debts receivable) | 71 126 | 165 063 | |
| Inventories break | 12 588 | - | |
| Other operating costs | 43 635 | 34 862 | |
| 1 308 999 | 1 370 751 | ||
| Other operating income | 2022 | 2021 | |
| Supplementary income (1) | 2 282 607 | 1 263 199 | |
| Operating grants (2) | 24 423 | 7 563 558 | |
| Currency exchange differences | 934 242 | 124 436 | |
| Compensation | 618 320 | 60 000 | |
| Gains in fixed assets | 4 950 | 86 796 | |
| Provision reduction | 60 000 | - | |
| Investment grants | 26 770 | 29 228 | |
| Other operating gains | 78 706 | 21 422 | |
| 4 030 018 | 9 148 639 | ||
| Other operating income / (costs) | 2 721 019 | 7 777 888 |
(1) arise essentially from revenue from contracts with suppliers and franchisees (Eat Out group);
(2) amount referring, essentially, to government support within the scope of Covid-19.
Financial expenses and losses in the three months periods ended 30 June 2022 and 30 June 2021 are broken down as follows:
| Financial expenses and costs | 2022 | 2021 |
|---|---|---|
| Interest on rentals liabilities (IFRS16) | 3 924 562 | 7 712 286 |
| Interest paid | 1 352 383 | 1 360 545 |
| Other financial expenses and costs | 769 046 | 781 487 |
| 6 045 991 | 9 854 318 |
The reduction in interest on lease liabilities is due to the interest related to lease contracts for restaurants and retail establishments located at airports in Spain, which in 2021 were being considered as a result of the application of IFRS16.
Financial income and gains in the six months periods ended 30 June 2022 and 30 June 2021 are broken down as follows:
| Financial income and gains | 2022 | 2021 |
|---|---|---|
| Interest earned (1) | 267 427 | 228 188 |
| Other financial income and gains | 198 387 | 81 132 |
| 465 814 | 309 320 |
(1) essentially interest on treasury bonds and term deposits.
Income tax recognised in the three months periods ended on 30 June 2022 and 2021 are broken down as follows:
| Jun/22 | Jun/21 | |
|---|---|---|
| Current taxes | 2 000 428 | 266 032 |
| Deferred taxes | -834 651 | -4 671 963 |
| 1 165 777 | -4 405 931 |
The effective tax rate on profits is presented as follows:
| Jun/22 | Jun/21 | ||
|---|---|---|---|
| Profit before tax | 4 876 194 | -27 355 315 | |
| Income tax expense | -1 165 777 | 4 405 931 | |
| Effective tax rate | 24% | -16% |
Income per share in the six months periods ended 30 June 2022 and 2021 was calculated as follows:
| Jun/22 | Jun/21 | |
|---|---|---|
| Profit payable to shareholders of the parent company | 3 710 457 | -22 902 318 |
| Number of shares issued at the beginning of the period | 46 000 000 | 36 000 000 |
| Number of shares issued at the end of the period | 46 000 000 | 36 000 000 |
| Average weighted number of ordinary shares issued (i) | 46 000 000 | 36 000 000 |
| Average weighted number of own shares (ii) | -3 599 981 | -3 599 981 |
| Weighted average number of outstanding shares (i-ii) | 42 400 019 | 32 400 019 |
| Basic earnings per share (€ per share) | 0,09 | -0,71 |
| Earnings diluted per share (€ per share) | 0,09 | -0,71 |
| Number of own shares at the end of the year | 3 599 981 | 3 599 981 |
Since there are no potential voting rights, the basic earnings per share is equal to earnings diluted per share.
At the Annual General Meeting of 26 May 2022, gross dividends of 0.135 euros per share were attributed, corresponding to a value of 5,724,002 euros for shares in circulation, which payment was made on 22 June 2022.
The Group has contingent liabilities related to its business (related to licensing, advertising fees, hygiene and food safety and employees, the success rate of Ibersol in these processes being historically high). It is not expected that there will be significant liabilities arising from contingent liabilities.
An indemnity proceeding was brought against a subsidiary of the Eat Out Group in Spain for alleged noncompliance with non-compete agreements in the amount of approximately 11.7 million Euros. The Board of Directors, supported by the position of the lawyers who accompany the process, considers that this situation represents a contingent liability. Additionally, it should be noted that the process concerns facts that occurred before the acquisition of this subsidiary by the Ibersol Group, and is therefore, under the liability and guarantees clauses provided for in the share purchase and sale agreement of the Eat Out Group, there is a right of return.
As part of the negotiation of concession contracts for airports in Spain, the Ibersol Group initiated, during the first quarter of 2021, legal proceedings against AENA in order to obtain the economic and financial balance of the respective concession contracts.
Regarding the precautionary measures requested, preventing AENA from executing the guarantees and deposits which it has in its favor in the amount of 24.7 million euros. On 26 March 2021, the Court ruled in favour of the precautionary measure. In March 2022, the higher court confirmed that Pansfood was right again in relation to the process of precautionary measures, in response to the appeal filed by AENA, regarding the first decision in March 2021. A hearing on the substantive case was held in May, and this September the court, in order to ensure the economic and financial balance of the contracts, decided to apply Law 13-202 from 2021, as has been recognize in the financial statements.
As at 30 June 2022 and 31 December 2021, liabilities not recorded by Ibersol's subsidiaries are mainly made up of bank guarantees provided on their account, as follows:
| Jun/22 | Dec/21 | |
|---|---|---|
| Bank guarantees | 25 110 138 | 24 929 721 |
Bank guarantees by hedge type are as follows:
| Leases and rents |
Other supply contracts |
Fiscal and legal proceedings |
Other | Other legal claims |
|---|---|---|---|---|
| 24 978 592 | 20 683 | 67 131 | 23 000 | 20 731 |
The bank guarantees essentially arise from the concessions and rents of the Group's stores and commercial spaces, and can be executed in the event of non-compliance with the lease contracts, namely due to non-payment of rents.
The relevant amount comes from the guarantees required by the owners of spaces concession (ANA Airports and AENA Airports in Spain) or leased (shopping centres and other places) under concessions and rents, which amounts to 20,216,000 Euros with AENA Airports.
Balances and transactions with related parties as at 30 June 2022 and 31 December 2021, can be presented as follows:
| Parent entitie | Jointly controlled entitie | Associated entitie | Other entities | |||||
|---|---|---|---|---|---|---|---|---|
| 1ºS 2022 | 2021 | 1ºS 2022 | 2021 | 1ºS 2022 | 2021 | 1ºS 2022 | 2021 | |
| Supplies and services |
500 000 | 1 000 000 | 1 901 684 | 4 174 391 | - | - | - | - |
| Rental lease | - | - | - | - | - | - | 1 103 029 | 2 200 946 |
| Accounts Payable | - | - | 1 045 179 | 1 395 331 | - | - | - | - |
| Financial investments |
- | - | - | - | 300 000 | 300 000 | - | - |
| Other financial assets |
- | - | - | - | - | - | 400 000 | 400 000 |
The parent company of Ibersol SGPS S.A. is ATPS - SGPS, SA, holder directly and indirectly of 26.004.023 shares.
Dr. António Carlos Vaz Pinto de Sousa and Dr. António Alberto Guerra Leal Teixeira each hold 2.520 shares of Ibersol SGPS, SA The voting rights attributable to ATPS are also attributable to António Carlos Vaz Pinto de Sousa and António Alberto Guerra Leal Teixeira according to paragraph 1.b) Article 20, and paragraph 1 Article 21, both of the Portuguese Securities Market Code, by holding the domain of ATPS, in which they participate indirectly in equal parts by their companies, respectively, the companies CALUM - SERVIÇOS E GESTÃO, S.A. with NIPC 513799486 and DUNBAR - SERVIÇOS E GESTÃO, S.A. with NIPC 513799257, which, jointly, hold the majority of the share capital of ATPS.
The other entities refer to entities controlled by other holders of significant influence in the parent company of Ibersol Group. The amounts presented refer to rents paid in the year, which, as a result of the adoption of IFRS16, do not correspond to the amount of lease expenses reflected in the financial statements. As at 30 June 2022, the estimated payment commitments for rents over the term of the respective contracts amount approximately to 17.4 million Euros (31 December 2021: 17.9 million Euros).
On August 2, at the end of a long negotiation process with Restaurant Brands Iberia, S.A. a share purchase and sale agreement was signed for the sale of shares representing the entire share capital of Iber King Restauração, S.A. and Lurca S.A.U, companies that operate Burger King restaurants in Portugal and Spain.
The conclusion of this sale is subject to the verification of a set of suspensive conditions The price will correspond to an Enterprise Value of 259.7 million euros, on a cash and debt-free basis, with part of the price (in the amount of 15.5 million euros) subject to the verification of conditions related to the future evolution of EBITDA and/or cash flow generation.
With the values as at 30 June 2022, assuming that the maximum value of the price is fully receive, the transaction results in a capital gain of approximately 140 million euros in Ibersol's consolidated accounts.
Following the claim of amounts associated with the purchase of Eat Out Group, a compensation agreement was finally signed in July in the amount of 2 million euros.
KPMG & Associados - Sociedade de Revisores Oficiais de Contas, S.A. Edifício Burgo - Avenida da Boavista, 1837, 16.º 4100-133 Porto - Portugal +351 220 102 300 | www.kpmg.pt
(This report is a free translation to English from the original Portuguese version. In case of doubt or misinterpretation the Portuguese version will prevail.)
We have performed a limited review of the accompanying condensed consolidated interim financial statements of Ibersol SGPS, S.A. (the Group), which comprise the consolidated interim statement of financial position as of 30 June 2022 (that presents a total of Euro 616,735,128 and total equity attributable to the shareholders of Euro 230,267,590, including a net profit attributable to the shareholders of Euro 3,710,457), the condensed consolidated interim statements of income and other comprehensive income, changes in equity and cash flows for the six-month period then ended, and the accompanying explanatory notes to these condensed consolidated interim financial statements.
Management is responsible for the preparation of this condensed consolidated financial statements in accordance with IAS 34 – Interim Financial Reporting as adopted by the European Union, and for the implementation and maintenance of an appropriate internal control system to enable the preparation of condensed financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express a conclusion on the accompanying condensed consolidated interim financial statements. Our work was performed in accordance with the international standards on review engagements and further technical and ethical standards and guidelines issued by the Portuguese Institute of Statutory Auditors ("Ordem dos Revisores Oficiais de Contas"). These standards require that we conduct the review in order to conclude whether anything has come to our attention that causes us to believe that the condensed financial statements are not prepared in all material respects in accordance with the IAS 34 – Interim Financial Reporting as adopted by the European Union.
A limited review of condensed consolidated financial statements is a limited assurance engagement. The procedures that we have performed consist mainly of making inquiries and applying analytical procedures and subsequent assessment of the evidence obtained. The procedures performed in a limited review are substantially less that those performed in an audit conducted in accordance with International Standards on Auditing (ISA). Accordingly, we do not express an audit opinion on these condensed consolidated financial statements.
KPMG & Associados –Sociedade de Revisores Oficiais de Contas, S.A., sociedade anónima portuguesa e membro da rede global KPMG, composta por firmas membro independentes associadas com a KPMG International Limited, uma sociedade inglesa de responsabilidade limitada por garantia.
KPMG & Associados – Sociedade de Revisores Oficiais de Contas, S.A. Capital Social: 3.916.000 Euros - Pessoa Coletiva N.º PT 502 161 078 - Inscrito na O.R.O.C. N.º 189 - Inscrito na C.M.V.M. N.º 20161489 Matriculada na Conservatória do registo Comercial de Lisboa sob o N.º PT 502 161 078
Based on the work performed, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements of Ibersol SGPS, S.A. as of 30 June 2022, are not prepared, in all material respects, in accordance with the IAS 34 – Interim Financial Reporting as adopted by the European Union.
13 September 2022
SIGNED ON THE ORIGINAL
KPMG & Associados Sociedade de Revisores Oficiais de Contas, S.A. (no. 189 and registered at CMVM with the nr. 20161489) represented by Pedro Manuel Bouça de Morais Alves da Costa (ROC no. 1466 and registered at CMVM with the nr. 20161076)
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