Quarterly Report • Nov 29, 2023
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 42.359.577 Commercial Registry: Oporto under number 501669477 Fiscal number: 501669477
(not audited)
Following the sale of the Burger King operations in Portugal and Spain at the end of November 2022, the activity of all Burger King restaurants in 2022 and the restaurants not yet sold in 2023 are reported as "Discontinued Operations" with regards to financial information reporting.
In the third quarter of 2023 and despite the demanding economic context, namely the pressure on purchasing power resulting from high levels of inflation in parallel with the rise of interest rates in the markets in which we operate, the group recorded a growth of 11% compared with the same period of the previous year.
The monthly evolution of performance in the different geographies reflects the comparability since April with more demanding periods without restrictions in 2022 and the impact of expansion, with the opening of new restaurants in Portugal and Spain, registering a gradual slowdown in the pace of growth, with greater incidence in the summer season, traditionally with greater increase in sales.
In Angola, and despite the good performance in local currency, activity was marked by the sharp devaluation of the AKZ against the EUR, (more than 50%), with an impact since June, causing a reduction in activity in Euros.
The evolution of demand forced an effort to absorb the impact on margins, in order to maintain volumes with occasional price increases. Investments in opening new restaurants also contributed to ensuring a growth in "Continuing Operations" of around 22%, in the first nine months of the year, reaching a total turnover of 310.1 million Euros, which compares with 254.4 million Euros in the same period of the previous year.
| Turnover (euro million) | 9M 2023 | 9M 2022 | Var. 23/22 |
|---|---|---|---|
| Sales of Restaurants | 307.2 | 390.1 | $-21,2%$ |
| Sales of Merchandise | 8.9 | 7.0 | 26,9% |
| Services Rendered | 2,7 | 1.5 | 83,1% |
| Turnover | 318.9 | 398.6 | $-20.0%$ |
| Discontinued Operations | $-8.8$ | $-144.2$ | $-93.9%$ |
| Continued Operations Turnover | 310.1 | 254.4 | 21,9% |
Despite the slowdown in the growth of the restaurant market in the geographies in which we operate, the group recorded a growth in all segments, particularly the "Counters" and "Concessions and Catering", with a relative performance exceeding 25% and 28%, respectively compared to the same period in the previous year.
| SALES IN RESTAURANTS (euro million) |
9M 2023 Continued Operations |
9M 2022 Continued Operations |
Var. 23/22 Continued Operations |
|---|---|---|---|
| Restaurants | 77.0 | 71.6 | 7.6% |
| Counters | 106.9 | 85.1 | 25.6% |
| Concessions&Catering | 114.5 | 89.2 | 28,3% |
| Total Sales | 298.4 | 245.9 | 21.4% |
The "Concessions and Catering" segment, heavily penalized by the pandemic and after a faster than expected recovery in 2022, showed once again a sharp growth pace, directly related to the increase in traffic passengers at airports where the group operates restaurants.
In Spain, where the group operates restaurants in seven airports, the third quarter of the year has registered a slowdown in the pace of the recovery of the traffic passenger's levels seen in the same period of 2019, with emphasis on Barcelona airport, still 9% below the pre-pandemic levels in this period.
In Portugal, traffic at airports was 14% higher than in 2019, with emphasis on Madeira and Lisbon, with traffic increases of 41% and 10%, respectively.
During the month of May, the operation of the nine concession restaurants at Madrid airport began on a provisional basis, until the conversion to restaurants in the definitive brands and formats are completed, which is expected to begin by the end of this year.
The resumption in traffic and the beginning of operations in new concessions, led to a sharp growth in the first nine months of 28,3%, compared to the same period of 2022, eliminating the effect of Burger King restaurants located in concession areas.
Counter segment of continued operations maintained its good performance, registering a growth of 25.6% compared to the same period of 2022, to which the impact of the expansion, namely of the KFC and Taco Bell brands, which occurred at the end of 2022, contributed decisively.
Restaurants, which reflect the performance of higher ticket concepts and with a greater component of internal delivery service, more exposed to greater competition from aggregators, registered the highest slowdown in growth rates in the quarter, with a growth of 7.6% compared to the same period of 2022.
In Spain, during the first nine months of the year, 7 restaurants were definitively closed (6 of which were franchised), with the opening of eleven restaurants in Spain (nine in a provisional format at Madrid airport and two new restaurants of KFC and Pans). In Portugal, 3 new restaurants, from Pans, Pizza Hut and KFC brands were opened.
Additionally, the new concession contract at Lanzarote airport began, in which the group ensured the maintenance of the operation of the seven restaurants it already operated and an additional restaurant scheduled to open at the beginning of next year.
At the end of the September, the total number of restaurants was 494 (434 equity and 60 franchises), as shown below:
| Nº of Restaurants | 31.12.2022 | Q1 | Q 2 | Q3 | Closures | 30.09.2023 |
|---|---|---|---|---|---|---|
| PORTUGAL | 296 | $\mathbf{1}$ | $\mathbf{1}$ | $\mathbf{1}$ | $\bf{0}$ | 299 |
| Equity Restaurants | 295 | 1 | 1 | 1 | $\bf{0}$ | 298 |
| Pizza Hut | 105 | 1 | 106 | |||
| MIIT+Ribs | 3 | 3 | ||||
| Pans | 40 | 1 | 41 | |||
| Burger King | 9 | 9 | ||||
| KFC | 56 | 1 | 57 | |||
| Pasta Caffé | 1 | 1 | ||||
| Quiosques | 8 | 8 | ||||
| Taco Bell | 16 | 16 | ||||
| Coffee Shops | 25 | 25 | ||||
| Catering | 9 | 9 | ||||
| Concessions & Other | 23 | 23 | ||||
| Franchise Restaurants | 1 | 1 | ||||
| SPAIN | 179 | 1 | $\overline{9}$ | 1 | $\overline{7}$ | 183 |
| Equity Restaurants | 116 | 1 | 9 | 1 | 1 | 126 |
| Pizza Móvil | 12 | 12 | ||||
| Pizza Hut | 3 | 3 | ||||
| Burger King | 0 | 0 | ||||
| Pans | 29 | 1 | 30 | |||
| Ribs | 13 | 13 | ||||
| FrescCo | $\overline{2}$ | 1 | 1 | |||
| KFC | 4 | 1 | 5 | |||
| Concessions | 53 | 9 | 62 | |||
| Franchise Restaurants | 63 | 0 | $\bf{0}$ | 0 | 6 | 57 |
| Pizza Móvil | 4 | 4 | ||||
| Pans | 36 | $\overline{2}$ | 34 | |||
| Ribs | 16 | 2 | 14 | |||
| FrescCo | 3 | 1 | $\overline{2}$ | |||
| SantaMaria | 4 | 1 | 3 | |||
| ANGOLA | 10 | $\bf{0}$ | $\bf{0}$ | $\bf{0}$ | 10 | |
| KFC | 9 | 9 | ||||
| Pizza Hut | 1 | 1 | ||||
| Other Locations - Franchise | $\overline{2}$ | $\bf{0}$ | $\bf{0}$ | $\bf{0}$ | $\bf{0}$ | $\overline{2}$ |
| Pans | $\overline{2}$ | 2 | ||||
| Total Equity Restaurants | 421 | 2 | 10 | 2 | 1 | 434 |
| Total Franchise Restaurants | 66 | $\bf{0}$ | $\bf{0}$ | 0 | 6 | 60 |
| TOTAL | 487 | 2 | 10 | 2 | 7 | 494 |
The robust growth in activity made it possible to mitigate the impact of three important factors on the cost structure:
The continued operations operating income at the end of the first nine months amounted to 19.2 million Euros, which compares with 14.5 million Euros in the same period of 2022.
| (million euros) | 9M 2023 Continued Operations |
9M 2022 Continued Operations |
||||
|---|---|---|---|---|---|---|
| Turnover | 310,1 | 254,4 | 21,9% | |||
| Cost of sales | 73.9 | 23.8% | 61.7 | 24.3% | 19.7% | |
| gross margin % | 76,2% | 75,7% | 0.4 p.p. | |||
| External supplies and services | 90.9 | 29.3% | 82.0 | 32.2% | 10.8% | |
| Personnel costs | 93.5 | 30,2% | 75,7 | 29,8% | 23,5% | |
| Amortisation, depreciation and impairment losses of TFA, Rights of Use, Goodwill and IA |
36,5 | 11,8% | 25,9 | 10,2% | 41,0% | |
| Other income/operating costs | $-3,9$ | $-1.3%$ | $-5.4$ | $-2.1%$ | $-27.9%$ | |
| Total de custos operacionais | 290,9 | 93,8% | 239,9 | 94,3% | 21,2% | |
| Operating Income | 19,2 | 6,2% | 14,5 | 5,7% | 32,4% | |
| margin | 6,2% | 5,7% | $+0.5$ p.p. | |||
| Ebitda | 55,7 | 18,0% | 40,4 | 15,9% | 37,9% | |
| margin | 18,0% | 15,9% | $+2.1 p.p.$ | |||
| Financial Results | $-7,1$ | $-2,3%$ | $-4,9$ | $-1,9%$ | 46,3% | |
| Profi before tax | 12,1 | 3,9% | 9,6 | 3,8% | 25,3% | |
| Income tax | $-2,6$ | $-0.8%$ | $-2,3$ | $-0.9%$ | 12,0% | |
| Net profit | 9,5 | 3,0% | 7,3 | 2,9% | 29,6% |
Turnover amounted to 310.1 million Euros, 21.9% higher than the 254.4 million Euros in the same period of 2022, with more 8% directly operated restaurants.
Gross margin was 76.2% of turnover, 0.4 p.p. higher than 2022, evidencing the stabilization of raw material prices after the impact of inflation on food products, with a more pronounced impact in the third quarter of 2022.
The increase in salary costs and the beginning of operation of new concessions with lower productivity due to operating in temporary formats, led to a 23.5% increase in Staff costs, with the weight of this cost representing now 30.2% of the turnover (9M22: 29.8%).
External Supplies and services costs increased 10.8%, representing 29.3% of turnover, which represents a reduction in the weight of this item by 2.9 p.p. compared to the same period of 2022. This reduction, results mainly from the application of IFRS16, through the reversal of rents in Menorca (having reached 2019 traffic in 2022) and the new concession contracts of Lanzarote, Madrid and Tenerife (starting in January, May and July respectively).
Other operating income and costs in the total amount of 3.9 million Euros, represent a reduction of 1.5 million Euros compared to the same period of 2022, a difference that is mainly explained by:
Amortisation, depreciation and impairment losses of TFA, Rights of Use, Goodwill and IA in the first nine months amounted to 36.5 million Euros, which compares with 25.9 million Euros of the same period of 2022, of which 22.8 million correspond to amortization of rights of use, compared to 14.1 million in the same period of the previous year.
Therefore EBITDA in the first nine months amounted to 55.7 million Euros, an increase of 37.9% compared to the same period of 2022.
Continued operations EBITDA margin stood at 18% of turnover, which compares with 15.9% in the same period 2022.
The new contracts in Lanzarote Madrid and Tenerife airports in 2023 contributed to EBITDA with an amount of 6.0 million Euros, which mainly results from the application of IFRS16 to these new lease agreements. Eliminating this effect would result in a 16.0% EBITDA margin, similar to same period in 2022.
The Financial Results in the first nine months of the year were negative by 7.1 million Euros, 2.3 million Euros higher compared to the same period of 2022.
| (million euros) | 9M 2023 Continued Operations |
9M 2022 Continued Operations |
var. | ||
|---|---|---|---|---|---|
| Financial Results | -7.1 | $-2.3%$ | $-4,9$ | $-1.9%$ | 46,3% |
| Financial expenses and losses | $-10.0$ | $-3.2%$ | -5.7 | $-2.3%$ | 74.9% |
| Financial income and gains | 2.8 | 0.9% | 0.8 | 0.3% | 236.9% |
| Gains (losses) in associated and joint controlled sub. - Equity | 0.1 | 0.0% | 0.0 | 0.0% | 220.2% |
Financial expenses and losses totalled 10 million Euros, which represents an increase of 4.3 million Euros compared to the same period in 2022. A part of these expenses and losses corresponds to interest with leases in the amount of 7.0 million Euros (3.1 million Euros in the 9M of 2022), of which 3.3 million Euros correspond to leases interest on new contracts at airports.
Net interest supported and commissions related to financing reached a total of 2.1 million Euros, which equals an average debt cost of 4.7%, reflecting the increase in reference rates and fixed commissions inherent to the lines unused.
Profit before taxes in the amount of 12.1 million Euros was penalized by the start of new concession agreements, to operate on a provisional basis at Lanzarote and Madrid airports, which represent a negative impact in the amount of 3.5 million Euros.
Total Assets amounted to 673.8 million Euros and Equity stood at 358.6 million Euros, representing 53% of total assets.
CAPEX amounted to 14.3 million Euros. 11 million Euros incurred in the implementation of the expansion program and the remaining were incurred in the remodelling and modernization of restaurants.
A financial investment was made in a capital increase of the Spanish company Medfood, which indirectly operates 31 KFC restaurants in Spain, for an amount of 3 million Euros, with the option of acquiring the entire capital or exiting for the amount invested with monetary correction, a decision that should be taken until the end of this year.
Current liabilities amount to 134.8 million Euros, of which 25.3 million correspond to liabilities for leases and 16.1 million Euros to current loans. Regarding to current loans, the Group has 50 million Euros related to commercial paper and unused contracted credit lines.
Consolidated liabilities reached 315.2 million Euros on September 30, 2023, which represents an increase of 46 million Euros compared to the final result in 2022.
On September 30, 2023, Equity stood at 358.6 million Euros, 25 million Euros lower than at the amount at the end of 2022, reflecting the dividend payment for the financial year of 2022.
The share capital was reduced by the extinction of own shares, from 46.000.000 Euros to the amount of 42.359.577 Euros.
| Consolidated Financial Position (million euros) |
30/09/2023 | 31/12/2022 | Var. |
|---|---|---|---|
| Total Assets | 673,8 | 652,6 | 21,2 |
| Total Equity | 358.6 | 383.7 | $-25,1$ |
| Loans | 30,0 | 70,1 | $-40,1$ |
| Liability for leases | 183.1 | 90.9 | 92,2 |
| Other liabilities | 102,1 | 108,0 | $-5,8$ |
| Total Equity and Liabilities | 673,8 | 652,6 | 21,2 |
At the end of the third quarter of 2023, net debt (including liability for leases) amounted to 39.8 million Euros, 119.1 million Euros higher than the negative amount outstanding at the end of 2022 (-79 million Euros), of which 101.5 million correspond to lease liabilities for new agreements at airports. Consequently, there is a "Gearing" of 10% (- 26% in 2022).
| (million euros) | 30/09/2023 | 31/12/2022 | var. |
|---|---|---|---|
| Total loans | 30.0 | 70.1 | $-40.1$ |
| Cash and bank deposits | $-171,5$ | $-237,1$ | $-65,6$ |
| Other current and non-current liabilities | $-1.7$ | $-3.1$ | $-1.4$ |
| Net Bank Debt | $-143,2$ | $-170,1$ | 26,9 |
| Liability for leases | 183,1 | 90.9 | 92.2 |
| Net Debt | 39,8 | $-79.2$ | 119,1 |
| Equity | 358.6 | 383.7 | $-25.1$ |
| Gearing (Net Debt/Net Debt + Equity) | 10% | $-26%$ |
As expected, there was a slowdown in growth caused by the effects of inflation and the increase in interest rates that took place over the last year to halt the rise in inflation.
The IMF forecasts for 2023 point to a GDP growth of 2.3% in Portugal and 2.5% in Spain, with inflation rates at around of 5%, with a downward trend that is expected to continue in the coming months.
In a context of fragility in household disposable income, in parallel with the increase of tension in the Middle East and the continuation of the conflict in Ukraine, a reduction in the level of consumer confidence and a consequent impact on private consumption is expected. The IMF's most recent forecasts for next year present a growth of around 1.5% of GDP and a scenario of cost inflation.
This trend places increased challenging on our teams and brand portfolio, in order to guarantee the maintenance of volumes and market shares, as well as efforts to minimize the impact caused by the beginning of the conversion of new concession restaurants at Lanzarote, Madrid and Tenerife airports, which will represent increased pressure on profitability, until the conversion of all restaurants into definitive formats and concepts is concluded.
In terms of expansion of our operations, we will continue with the expansion plans for the Pizza Hut, KFC and Taco Bell brands, with the opening of more than ten new restaurants by the end of the year, as well as the start of Pret A Manger operations at three airports in Spain
Under the terms of the SPA, the amount of the final net debt was released in November, without significant changes to the management estimates, reflected in the 2023 and 2022 financial statements.
Within the scope of the share buyback program, in accordance with resolutions approved at the General Meeting on May 26, 2023 Ibersol SGPS, SA held 296.413 own shares, acquired at an average price of 6.84 Euros and representing 0.70% of the share capital.
On November 16, 2023 the company held 391.825 own shares for the amount of 2.672.253 Euros, representing 0.93% of the share capital.
Porto, 27th November 2023
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
| Results and Other Interim Income | |
|---|---|
| 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 for continuing operations |
| EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) |
Operating results for continuing operations less amortization, depreciation and impairment losses of tangible fixed assets, Rights of Use, Goodwill and Intangible Assets |
| Financial Position | |
| Capex | Tangible and intangible assets additions |
| Net Financing Costs | Interest + commissions |
| Interest Coverage | EBITDA / Financing Costs |
| Net Bank Debt | Bonds + bank loans + other loans + financial leases - cash, bank deposits, other non-current financial assets and other current financial assets |
| Net Debt | Net Bank Debt + Liability for Leases |
| Gearing | Net Debt / (Net debt + Equity Capital) |
| Financial Autonomy ratio | Equity/Total Assets |
| Condensed Statement of Interim Consolidated Income and Other Comprehensive Income 13 | ||
|---|---|---|
| Condensed Statement of Interim Consolidated Financial Position 14 | ||
| Condensed Statement of Interim Consolidated Cash Flows 15 | ||
| Condensed Statement of Interim Consolidated Changes in Equity 16 | ||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17 | ||
| 1. | Presentation and Structure of the Group 17 | |
| 1.1. | Ibersol Group Subsidiaries 18 | |
| 1.2. | Ibersol Group's joint ventures and associates 19 | |
| 1.3. | Changes in the consolidation perimeter 19 | |
| 2. | Basis of preparation of the financial information 19 | |
| 2.1. | Bases of presentation 19 | |
| 2.1.1. | Approval of the financial statements 19 | |
| 2.1.2. | Accounting standards 19 | |
| 2.1.3. | Measurement basis 20 | |
| 2.1.4. | Comparability 20 | |
| 2.1.5. | Presentation currency and transactions in foreign currency 20 | |
| 2.2. | New standards, amendment and interpretation 21 | |
| 3. | Operational Risk Management 24 | |
| 3.1. | Risks of the global context 24 | |
| 3.2. | Risks of development and franchise agreements 24 | |
| 3.3. | Quality and food safety risks 25 | |
| 3.4. | Price Risk 25 | |
| 4. | Operational Performance 25 | |
| 4.1. | Revenue 25 | |
| 4.2. | Segment reporting 26 | |
| 4.3. | Operating income and expenses 27 | |
| 4.3.1. | Other operating income/(expenses) 27 | |
| 5. | Working Capital 28 | |
| 5.1. | Accounts receivable 28 | |
| 5.1.1. | Other debtors 29 | |
| 5.2. | Accounts payable 29 | |
| 5.2.1. | Suppliers 30 | |
| 5.2.2. | Accrued expenses 30 | |
| 6. | Investments 30 | |
| 6.1. | Goodwill 30 | |
| 6.2. | Intangible assets 31 | |
| 6.3. | Property, plant and equipment 32 | |
| 6.4. | Right of use assets 32 | |
| 6.5. | Depreciation, amortization and impairment losses on non-financial assets 33 |
| 6.6. | Investment Property 34 | ||
|---|---|---|---|
| 7. | Financing 34 | ||
| 7.1. | Equity 34 | ||
| 7.1.1. | Share capital 34 | ||
| 7.1.2. | Own shares 34 | ||
| 7.1.3. | Dividends 34 | ||
| 7.1.4. | Earnings per share 34 | ||
| 7.2. | Bank Debt 35 | ||
| 7.3. | Lease liabilities 36 | ||
| 7.4. | Treasury Bonds 36 | ||
| 7.5. | Cash and Bank deposits 37 | ||
| 7.6. | Financial activity result 37 | ||
| 8. | Current and Deferred Taxes 37 | ||
| 8.1. | Current income tax 37 | ||
| 8.1.1. | Current tax recognized in the income statements 37 | ||
| 8.1.2. | Current tax recognized in the statement of financial position 38 | ||
| 8.2. | Deferred taxes 38 | ||
| 8.2.1. | Deferred tax assets 38 | ||
| 8.2.2. | Deferred tax liabilities 39 | ||
| 9. | Other Provisions and Contingencies 39 | ||
| 9.1. | Contingent assets and liabilities 39 | ||
| 10. | Commitments not included in the consolidated statement of financial position 39 | ||
| 10.1. | Guarantees 39 | ||
| 11. | Transactions with related parties 40 | ||
| 12. | Subsequent Events 41 |
For the nine-months periods ending 30 September 2023 and 2022
| for the nine months period ended 30 |
|||||
|---|---|---|---|---|---|
| Notes | 2023 | 2022 Restated |
|||
| Sales | 4.1. | 307 341 652 | 252 939 330 | ||
| Rendered services | 4.1. | 2 737 987 | 1 495 621 | ||
| Cost of sales | -73 888 107 | -61 705 776 | |||
| External supplies and services | -90 903 056 | -82 049 287 | |||
| Payrolll costs | -93 510 297 | -75 723 867 | |||
| Amortisation, depreciation and impairment losses of TFA, Rights of | |||||
| Use, Goodwill and IA | 6.5. | -36 479 028 | -25 867 638 | ||
| Other operating gains (losses) | 4.3. | 3 914 871 | 5 428 222 | ||
| Operating Income | 19 214 022 | 14 516 605 | |||
| Financial expenses and losses | 7.6. | -10 038 658 | -5 739 581 | ||
| Financial income and gains | 7.6. | 2 845 672 | 844 590 | ||
| Gains (losses) in associated and joint controlled sub. - Equity method | 57 679 | 18 012 | |||
| Profit before tax from continuing operations | 12 078 715 | 9 639 626 | |||
| Income tax | 8.1.1. | -2 624 648 | -2 343 439 | ||
| Net profit from continuing operations | 9 454 067 | 7 296 187 | |||
| Discontinued operation | |||||
| Profit (loss) from discontinued operations, net of tax | 1 169 780 | 7 266 870 | |||
| TOTAL COMPREHENSIVE INCOME | 10 623 847 | 14 563 057 | |||
| Another integral result Net exchange differences |
-4 126 917 | 4 219 440 | |||
| CONSOLIDATED COMPREHENSIVE INCOME | 6 496 930 | 18 782 497 | |||
| Consolidated net profit attributable to: | |||||
| Shareholders of parent company | |||||
| Continued operations | 9 513 158 | 7 296 279 | |||
| Discontinued operations | 1 169 780 | 7 266 870 | |||
| Non-controlling interests | |||||
| Continuing operations | -59 091 | -92 | |||
| Discontinued Operations | 0 | 0 | |||
| 10 623 847 | 14 563 057 | ||||
| Consolidated comprehensive income attributable to: | |||||
| Shareholders of parent company | |||||
| Continued operations | 5 386 241 | 11 515 719 | |||
| Discontinued operations | 1 169 780 | 7 266 870 | |||
| Non-controlling interests | |||||
| Continuing operations | -59 091 | -92 | |||
| Discontinued Operations | 0 | 0 | |||
| 6 496 930 | 18 782 497 | ||||
| Earnings per share: Basic |
7.1.1. | ||||
| Continuing Operations | 0,22 | 0,17 | |||
| Discontinued Operations | 0,03 | 0,17 | |||
| Diluted | |||||
| Continued operations | 0,22 | 0,17 | |||
| Discontinued Operations | 0,03 | 0,17 | |||
Porto, 27th November 2023 The Board of Directors,
| ASSETS | Notes | 30/ 09/ 2023 |
31/ 12/ 2022 |
|---|---|---|---|
| Non-current | |||
| Goodwill | 6.1. | 54 391 775 | 54 391 775 |
| Intangible Assets | 6.2. | 26 590 223 | 26 862 783 |
| Property, plant and equipment | 6.3. | 126 862 209 | 130 540 302 |
| Assets under rights of use | 6.4. | 178 253 827 | 89 927 682 |
| Investment property | 6.6. | 12 914 890 | 8 470 400 |
| Investments in Associates and Joint Ventures | 1.2. | 6 145 599 | 3 087 921 |
| Debt instruments at amortised cost | 7.4. | 624 333 | 2 477 133 |
| Non-current Receivables | 5.1. | 16 514 134 | 14 727 489 |
| Deferred Tax Assets | 8.2.1. | 11 977 278 | 9 989 258 |
| Total non-current assets | 434 274 268 | 340 474 744 | |
| Current Assets | |||
| Inventories | 13 536 739 | 13 084 136 | |
| Income tax recoverable | 8.1.2. | 29 039 | 109 587 |
| Debt instruments at amortised cost | 7.4. | 1 056 698 | 591 725 |
| Current receivables | 5.1. | 47 503 877 | 55 820 271 |
| Cash and bank deposits | 7.5. | 171 514 703 | 237 132 629 |
| Total current assets | 233 641 056 | 306 738 348 | |
| Group of assets classified as held for sale | 5 876 692 | 5 428 897 | |
| Total Assets | 673 792 016 | 652 641 989 | |
| EQUITY | |||
| Share capital | |||
| Share capital | 7.1.1. | 42 359 577 | 46 000 000 |
| Own shares | 7.1.2. | -2 027 845 | -11 410 227 |
| Share premium | 29 900 789 | 29 900 789 | |
| Currency translation reserve | -14 215 368 | -10 088 451 | |
| Legal reserve | 4 236 428 | 1 976 081 | |
| Retained earnings and other reserves | 287 580 812 | 167 521 938 | |
| Net profit for the year | 10 682 938 | 159 875 149 | |
| Equity attributable to shareholders of Ibersol | 358 517 331 | 383 775 279 | |
| Non-controlling Interests | 91 965 | -81 719 | |
| Total Equity | 358 609 296 | 383 693 560 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Borrowings | 7.2. | 13 822 795 | 46 234 860 |
| Lease liabilities | 7.3. | 157 746 784 | 70 113 338 |
| Deferred tax liabilities | 8.2.2. | 4 302 416 | 4 303 563 |
| Other provisions | 2 530 868 | 2 530 869 | |
| Non-current payables | 5.2. | 3 704 | 43 149 |
| Total non-current liabilities | 178 406 567 | 123 225 779 | |
| Current Liabilities | |||
| Borrowings | 7.2. | 16 146 339 | 23 847 026 |
| Lease liabilities | 7.3. | 25 323 430 | 20 760 371 |
| Current payables | 5.2. | 90 735 804 | 98 821 242 |
| Income tax payable | 8.1.2. | 2 627 455 | 413 865 |
| Total current liabilities | 134 833 028 | 143 842 504 | |
| Liabilities directly associated with the group of assets classified as held for sale | 1 943 125 | 1 880 146 | |
| Total Liabilities | 315 182 720 | 268 948 429 | |
| Total Equity and Liabilities | 673 792 016 | 652 641 989 |
Porto, 27th November 2023 The Board of Directors,
For the nine-months periods ending 30 September 2023 and 2022
| Note | 2023 | 2022 | |
|---|---|---|---|
| Cash Flows from Operating Activities | |||
| Receipts from clients | 330 178 385 | 398 112 871 | |
| Payments to supliers | -156 896 578 | -191 535 570 | |
| Staff payments | -91 193 577 | -109 362 672 | |
| Flows generated by operations | 82 088 230 | 97 214 629 | |
| Payments/receipt of income tax | -2 563 764 | -1 699 261 | |
| Other paym./receipts related with operating activities | -23 171 486 | -6 023 499 | |
| Flows from operating activities (1) | 56 352 981 | 89 491 868 | |
| Cash Flows from Investment Activities | |||
| Receipts from: | |||
| Financial investments | 739 193 | 305 940 | |
| Tangible fixed assets | 5 051 | - | |
| Interest received | 2 821 833 | 1 420 933 | |
| Other financial assets | 231 499 | 454 619 | |
| Payments for: | |||
| Financial investments | -383 834 | -147 620 | |
| Other financial assets | - | -717 901 | |
| Tangible fixed assets | -20 343 305 | -28 200 757 | |
| Intangible assests | -3 081 290 | -3 006 464 | |
| Flows from investment activities (2) | -20 010 854 | -29 891 250 | |
| Cash flows from financing activities | |||
| Receipts from: | |||
| Loans obtained | 7.2. | 328 041 | 3 304 795 |
| Payments for: | |||
| Loans obtained | 7.2. | -40 755 649 | -42 750 491 |
| Rental debt | 7.3. | -19 152 216 | -17 293 280 |
| Interest from loans and similar costs | -3 060 858 | -4 079 972 | |
| Interest from lease contracts | 7.3. | -6 988 441 | -5 991 278 |
| Dividends paid | -29 651 704 | -5 724 002 | |
| Acquisition of own shares | -2 027 844 | - | |
| Flows from financing activities (3) | -101 308 671 | -72 534 228 | |
| Change in cash & cash equivalents (4)=(1)+(2)+(3) | -64 966 544 | -12 933 610 | |
| Effects of exchange rate differences | -651 382 | 1 272 869 | |
| Cash & cash equivalents at the start of the period | 237 132 629 | 96 968 003 | |
| Cash & cash equivalents at end of the period | 7.5. | 171 514 703 | 85 307 262 |
Porto, 27th November 2023 The Board of Directors,
For the six-months periods ending 30 June 2023 and 2022
| Attributable to equity holders | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Other | |||||||||||
| Note | Share Capital |
Own Shares | Share Premium |
Legal Reserves |
Translation Reserve |
Reserves & Retained |
Net Profit |
Total | Non-controlling interests |
Total Equity | |
| Earnings | |||||||||||
| Balance as at 1 January 2022 | 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 | |||||||
| Changes for the period: | |||||||||||
| Application of the 2021 consolidated result: | |||||||||||
| Transfer to reserves and retained earnings | 225 000 | 31 154 907 -31 379 907 | - | - | |||||||
| Liquidation of subsidiaries | 108 183 | 108 183 | -170 245 | -62 062 | |||||||
| Conversion reserves - Angola | 4 219 440 | 4 219 440 | 4 219 440 | ||||||||
| Consolidated net profit for the nine months | 14 563 149 | 14 563 149 | -92 | 14 563 057 | |||||||
| period ending 30 September 2022 | |||||||||||
| Total changes for the period | - | - | - | 225 000 | 4 219 440 | 31 263 090 -16 816 758 | 18 890 772 | -170 337 | 18 720 435 | ||
| Consolidated net profit | 14 563 149 | 14 563 149 | -92 | 14 563 057 | |||||||
| Consolidated comprehensive income | 18 782 589 | -92 | 18 782 497 | ||||||||
| Transactions with equity holders in the period | |||||||||||
| Application of consolidated net profit for 2021: | |||||||||||
| Dividends distributed | 7.1.3. | -5 724 002 | -5 724 002 | -5 724 002 | |||||||
| Balance on 30 September 2022 | 46 000 000 | -11 180 516 29 900 789 1 976 081 -7 111 992 167 592 359 14 563 149 | 241 739 870 | -79 855 | 241 660 015 | ||||||
| Balance as at 1 January 2023 | 46 000 000 | -11 410 227 29 900 789 1 976 081 -10 088 451 167 521 938 159 875 149 | 383 775 279 | -81 719 383 693 560 | |||||||
| Changes in the period: | |||||||||||
| Application of consolidated result 2021: | |||||||||||
| Transfer to reserves and retained earnings | 2 260 347 | 157 614 802 -159 875 149 | - | - | |||||||
| Capital reduction | 7.1.1. -3 640 423 | 11 410 227 | -7 769 804 | - | - | ||||||
| Own shares acquisition | 7.1.2. | -2 027 845 | -2 027 845 | -2 027 845 | |||||||
| Conversion reserves - Angola | -4 126 917 | -4 126 917 | -4 126 917 | ||||||||
| Recognition of minority interest subsidiaries | -134 421 | -134 421 | 232 775 | 98 354 | |||||||
| Consolidated net profit for the nine months | |||||||||||
| period ending 30 September 2023 | 10 682 938 | 10 682 938 | -59 091 | 10 623 847 | |||||||
| Total changes for the period | -3 640 423 | 9 382 382 | - | 2 260 347 | -4 126 917 149 710 577 -149 192 211 | 4 393 755 | 173 684 | 4 567 439 | |||
| Consolidated net profit | 10 682 938 | 10 682 938 | -59 091 | 10 623 847 | |||||||
| Consolidated comprehensive income | 6 556 021 | -59 091 | 6 496 930 | ||||||||
| Transactions with equity holders in the period | |||||||||||
| Application of consolidated net profit for 2022: | |||||||||||
| Dividends distributed | 7.1.3. | -29 651 704 | -29 651 704 | -29 651 704 | |||||||
| Balance on 30 September 2023 | 42 359 577 | -2 027 845 | 29 900 789 4 236 428 -14 215 368 287 580 812 10 682 938 | 358 517 330 | 91 965 | 358 609 295 |
Porto, 27th November 2023 O Conselho de Administração,
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 494 units in the restaurant segment through the brands Pizza Hut, Pasta Caffé, Pans & Company, Ribs, FrescCo, SantaMaría, Kentucky Fried Chicken, Burger King, Pans Café, Pizza Móvil, Miit, Taco Bell, Sol, Silva Carvalho Catering and Palace Catering, Goto Café and others. The group has 434 units which it operates and 60 units under a franchise contract. Of this universe, 299 are based in Portugal, of which 298 are owned and 1 franchised, and 183 are based in Spain, spread over 126 own establishments and 57 franchisees, and 10 in Angola and 2 in other locations.
Ibersol is a public limited company listed on the Euronext of Lisbon.
Company: IBERSOL, SGPS, S.A. Head Office: Edifício Península Praça do Bom Sucesso, nº 105 a 159, 9º, Porto, Portugal Legal Nature: Public Limited Company Share Capital: €42.359.577 L.E.I.: 501 669 477
Ibersol SGPS parent company and ultimate parent entity is ATPS - SGPS, S.A.
For the periods ended 30 September 2023 and 31 December 2022, the Group companies, their head offices and their main developed business included in the consolidation by the full consolidation method and the respective proportion of equity is as follows:
| % Shareholding | |||
|---|---|---|---|
| Company | Head Office | ||
| set/23 | Dec/22 | ||
| 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% |
| 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% |
| Firmoven Restauração, S.A. | Porto | 100% | 100% |
| IBR - Sociedade Imobiliária, S.A. | Porto | 100% | 100% |
| Anatir SGPS, S.A. | Porto | 100% | 100% |
| Sugestões e Opções-Actividades Turísticas, S.A | Porto | 100% | 100% |
| José Silva Carvalho Catering, S.A. | Porto | 100% | 100% |
| Iberusa Central de Compras para Restauração ACE | Porto | 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% |
| 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% |
| Food Orchestrator, S.A. | Braga | 84% | 84% |
| Iberespana Central de Compras, A.I.E. | Vigo - Espanha | 100% | 100% |
| Eat Tasty, S.L. | Madrid | 84% | 84% |
For the periods ended 30 September 2023 and 31 December 2022 the Group owns the associated company Ziaicos - Serviços e Gestão, Lda and the joint venture UQ Consult - Serviços de Apoio à Gestão, S.A., both based in Porto, and included in the consolidation using the equity method, whose proportion of the share capital is 40% and 50% respectively.
In June, a financial investment of 3 million euros was made in a capital increase of the Spanish company Medfood, which indirectly operates 31 KFC restaurants in Spain. It was decided that, subject to certain conditions and the completion of due diligence processes, Ibersol could make an offer to acquire the remaining share capital or opt to exit for the amount invested with monetary correction. This decision should be made by the end of the year.
At 30 September 2023, this investment is measured using the equity method.
In the nine months period ended 30 September 2023, in addition to the above, there were no acquisitions of subsidiaries
In the year ended 31 December 2022 the subsidiary Food Orchestrator was acquired, by subscription of 83.7% of its share capital.
In the nine months period ended 30 September 2023 there were no disposals s of subsidiaries
On 30 November 2022, the Group sold the subsidiaries Iberking, Restauração S.A. and Lurca S.A.U.
Liquidation of subsidiary With reference to 13 January 2022, the subsidiary Cortsfood, SL was liquidated.
With reference to 1 August 2022, the subsidiaries Ibersol Hotelaria e Turismo, Asurebi and Eggon were merged into the subsidiary Ibersol Restauração, S.A..
With reference to 30 December 2022, the subsidiary IBERESPANA CENTRAL DE COMPRAS A.I.E., a purchasing center in Spain, was constituted, which will replace PANSFOOD, FOODSTATION, VIDISCO Y LURCA UTE, extinguished on 31 December 2022.
The amounts related to the Burger King operation, concerning both the restaurants already sold and the restaurants to be transferred under this operation ("carve ins") are presented in the consolidated statement of income and other comprehensive income as "discontinued operations". The comparatives for the year 2022 have also been restated to include the Burger King activity as discontinued operations.
The financial statements were approved by the Board of Directors and authorized for issue on 27 November 2023.
These condensed consolidated interim financial statements were prepared in accordance with International Standard 34 - Interim Financial Reporting, and therefore do not include all the information required by the annual financial statements, and should be read in conjunction with the company's financial statements for the period ending 31 December 2022.
The interim consolidated financial statements have been prepared in accordance with the historical cost principle.
The Group's Consolidated Financial Statements have been 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 2023, and essentially including an explanation of the events and changes relevant to an understanding of the variations in the Group's financial position and performance since the date of the annual report. Accordingly, the accounting policies and part of the notes contained in the 2022 financial statements have been omitted, either because they have not changed or because they are not materially relevant to understanding these interim financial statements.
The consolidated financial statements were prepared on a going concern basis, under the historical cost convention, changed to fair value in the case of derivative financial instruments.
The preparation of the financial statements requires estimates and management judgments.
The consolidated financial statements are comparable in all material respects with the prior year, considering the effects of the restatement arising from what was referred to in the Introductory Note.
The Financial Statements of each of the Group's entities are prepared using the currency of the economic environment in which the entity operates ("functional currency"). The consolidated Financial Statements are presented in Euros, which is the Ibersol Group's functional and presentation currency.
The foreign currency exchange rates used to convert transactions and balances expressed in Kwanzas at 30 September 2023 and 31 December 2022, were respectively:
| Sep/23 | Average interest | |
|---|---|---|
| Euro exchange rates | Rate on 30 | rate September |
| (x foreign currency per 1 Euro) | September 2023 | 2023 |
| Kw anza de Angola (AOA) |
879,507 | 688,231 |
| Dec/22 | ||
| Euro exchange rates | Rate on 31 | Average interest |
| (x foreign currency per 1 Euro) | December 2022 | rate year 2022 |
| Kw anza de Angola (AOA) |
537,634 | 484,262 |
| Standards | Change | Date of application |
|---|---|---|
| are the following | Recently issued pronouncements already adopted by the Group in the preparation of the financial statements | |
| Following feedback that more guidance was needed to help companies decide what accounting policy information should be disclosed, the Board has today issued amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements. |
||
| Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies |
The key amendments to IAS 1 include: i) requiring companies to disclose their material accounting policies rather than their significant accounting policies; clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company's financial statements. |
1 January 2023 |
| The Board also amended IFRS Practice Statement 2 to include guidance and two additional examples on the application of materiality to accounting policy disclosures. The amendments are consistent with the refined definition of material: "Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements". |
||
| The IASB has issued amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to clarify how companies should distinguish changes in accounting policies from changes in accounting estimates, with a primary focus on the definition of and clarifications on accounting estimates. |
||
| Amendments to IAS 8 Accounting | The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. |
|
| policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates |
The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. The effects of changes in such inputs or measurement techniques are changes in accounting estimates. |
1 January 2023 |
| The amendments are effective for periods beginning on or after 1 January 2023, with earlier application permitted, and will apply prospectively to changes in accounting estimates and changes in accounting policies occurring on or after the beginning of the first annual reporting period in which the company applies the amendments. |
||
| The IASB (' the Board') issued amendments to IAS 12 - 'Income Taxes', on 7 May 2021. |
||
| The amendments require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. |
||
| Amendments to IAS 12: deferred tax related to assets and liabilities arising from a single transaction |
In specified circumstances, companies are exempt from recognising deferred tax when they recognise assets or liabilities for the first time. Previously, there had been some uncertainty about whether the exemption applied to transactions such as leases and decommissioning obligations—transactions for which companies recognise both an asset and a liability. The amendments clarify that the exemption does not apply and that companies are required to recognise deferred tax on such transactions. The aim of the amendments is to reduce diversity in the reporting of deferred tax on leases and decommissioning obligations. |
1 January 2023 |
| IFRS 17 – Insurance Contracts | The IASB issued on 18 May 2017 a standard that superseded IFRS 4 and completely reformed the treatment of insurance contracts. The standard introduces significant changes to the way in which the performance of insurance contracts is measured and presented with various impacts also at the level of the financial position. The standard expected to be effective for annual periods beginning on or after 1 January 2023 |
1 January 2023 |
|---|---|---|
| Amendments to IFRS 17 - Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information |
The International Accounting Standards Board (IASB) has issued a narrow-scope amendment to the transition requirements in IFRS 17 - Insurance Contracts, providing insurers with an option aimed at improving the usefulness of information to investors on initial application of the new Standard. The amendment does not affect any other requirements in IFRS 17. IFRS 17 and IFRS 9 Financial Instruments have different transition requirements. For some insurers, these differences can cause temporary accounting mismatches between financial assets and insurance contract liabilities in the comparative information they present in their financial statements when applying IFRS 17 and IFRS 9 for the first time. The amendment helps insurers to avoid these temporary accounting mismatches and, therefore, improve the usefulness of comparative information for investors. |
1 January 2023 |
| Standards | Change | Date of application |
|---|---|---|
| Recently Issued pronouncements that are not yet effective for the Group | ||
| Clarification requirements for classifying liabilities as current or non-current (amendments to IAS 1 – Presentation of Financial Statements |
IASB issued on 23 January 2020 narrow-scope amendments to IAS 1 Presentation of Financial Statements to clarify how to classify debt and other liabilities as current or non-current. The amendments clarify an IAS 1 criteria for classifying a liability as non-current: the requirement for an entity to have the right to defer the liability's settlement at least 12 months after the reporting period. The amendments aim to: a. specify that an entity's right to defer settlement must exist at the end of the reporting period and have substance; b. clarify that covenants with which the company must comply after the reporting date (i.e. future covenants) do not affect a liability's classification at the reporting date. However, when non-current liabilities are subject to future covenants, companies will now need to disclose information to help users understand the risk that those liabilities could become repayable within 12 months after the reporting date; and c. clarify the requirements to classify the liabilities that an entity will settle, or may settle, by issuing its own equity instruments (e.g. convertible debt). |
1 January 2024 |
| Lease liability in a sale-and leaseback (amendments to IFRS 16 – Leases |
The IASB issued amendments to IFRS 16 - Leases in September 2022 that introduce a new accounting model for variable payments in a sale and leaseback transaction. The amendments confirm the following: - On initial recognition, the seller-lessee includes variable lease payments when it measures a lease liability arising from a sale-and-leaseback transaction. - After initial recognition, the seller-lessee applies the general requirements for subsequent accounting of the lease liability such that it recognises no gain or loss relating to the right of use it retains. A seller-lessee may adopt different approaches that satisfy the new requirements on subsequent measurement. The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted. Under IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, a seller-lessee will need to apply the amendments retrospectively to sale-and-leaseback transactions entered into or after the date of initial application of IFRS 16. This means that it will need to identify and re-examine sale-and leaseback transactions entered into since implementation of IFRS 16 in 2019, and potentially restate those that included variable lease payments. |
1 January 2024 |
| Standards | Change | Date of application |
|---|---|---|
| Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures – Supplier Finance Arrangements |
On 25 May 2023, the International Accounting Standards Board (IASB) published Supplier Finance Arrangements with amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures. The amendments relate to disclosure requirements in connection with supplier financing arrangements - also known as supply chain financing, financing of trade payables or reverse factoring arrangements. |
1 January 2024 |
| The new requirements supplement those already included in IFRS standards and include disclosures about: - Terms and conditions of supplier financing arrangements; - The amounts of the liabilities that are the subject of such agreements, for which part of them the suppliers have already received payments from the financiers and under which item these liabilities are shown in the balance sheet; - The ranges of due dates; and - Information on liquidity risk. |
||
|---|---|---|
| Amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules |
On 23 May 2023, the IASB issued International Tax Reform— Pillar Two Model Rules – Amendments to IAS 12 to clarify the application of IAS 12 Income Taxes to income taxes arising from tax law enacted or substantively enacted to implement the OECD Pillar Two model rules. The amendments introduce: - A mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and - Disclosure requirements for affected entities to help users of the financial statements better understand an entity's exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date. - The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim periods ending on or before 31 December 2023. |
1 January 2024 |
The adoption of the standards and amendments endorsed by the European Union and of mandatory application for annual periods beginning on or after 1 January 2023 did not result in significant impacts on the consolidated financial statements.
The adoption of the new standards and interpretations already endorsed by the EU and of mandatory application on 1 January 2024, as well as of the new standards and interpretations not yet endorsed by the EU is not expected to have a material impact on the Group's consolidated financial statements.
The Ibersol Group attaches particular importance to the global geopolitical context, namely, changes in the global supply chains of food products, which have consequences on the operations and profitability of the business.
The upward trend in energy and fossil fuel prices, which induce food prices increases, also affect the profitability of business in the restaurant sector.
In previous years, the Group signed development contracts with Taco Bell and KFC (for Portugal and Spain). During 2022 a new development contract was signed with the Pret a Manger brand.
These development contracts guarantee the right and obligation to open new restaurants (in exceptional circumstances, such as the pandemic crisis, readjustments to the development programs were agreed upon). In case of non-fulfillment of the opening plans foreseen in these contracts the franchisors may terminate the respective development contracts.
In addition, the development agreements provide for requirements and conditions to be met prior to the sale of the controlling interest of the subsidiary that operates the agreement, the issuance of capital instruments and/or change of control in those subsidiaries, as well as the sale of the business or restaurants owned by said subsidiaries, which include, among others: the prior agreement of the franchisors, information obligations and several transfer procedures, possible payment of charges or fees, as well as the right of first refusal in favor of the franchisors. The franchise contracts in relation to some international brands foresee the possibility of termination in case of change of control of Ibersol SGPS, S.A. without the franchisor's prior agreement.
In the restaurants where it operates with international brands, the group enters into long-term franchise contracts: 10 years in the case of Pizza Hut, Taco Bell and KFC and up to 12 years in the case of Prêt A Manger, renewable for another 10 years at the franchisee's option, as long as certain obligations are met.
It has been the practice for these contracts to be renewed upon expiration. However, nothing obliges franchisors to do so, so there may be the risk of non-renewal.
In these contracts it is normal to pay an "Initial Fee" at the beginning of each contract and a "Renewal Fee" at the end of the initial period, in addition to an operating and marketing royalty on sales made.
Ibersol Group's quality department is responsible for identifying and ensuring control of food quality and safety risks. Thus, various prevention and control measures are implemented for different areas of the Group's business. In this context, some measures stand out, such as: ensuring the implemented Traceability System and the control of the Production Process in the units, through the HACCP (Hazard Analysis & Critical Control Points) System.
Significant changes in commodity prices are largely reflected in the selling prices of products and monitored by the market. However, when commodity price increases are much higher than general inflation, these changes are gradually impacted in selling prices, and in the short term there may be a degradation of the gross margin.
The revenue from contracts with customers is presented as follows:
| 2023 | 2022 | |
|---|---|---|
| Catering sales | 307 210 855 | 390 083 086 |
| Restaurant sales | 290 289 862 | 376 543 186 |
| Event catering sales | 12 258 080 | 9 541 659 |
| Concession catering sales | 4 662 913 | 3 998 241 |
| Merchandise sales to franchisees | 8 930 873 | 7 037 478 |
| Total sales | 316 141 728 | 397 120 564 |
| Services Rendered | 2 737 987 | 1 495 621 |
| Franchise royalties | 1 412 012 | 1 354 465 |
| Other | 1 325 975 | 141 156 |
| Turnover Continuing Operations | 318 879 715 | 398 616 185 |
| Turnover Discontinued Operations (note 6.7) | -8 800 076 -144 181 234 | |
| Turnover | 310 079 639 | 254 434 951 |
After a start to the first half of the year with robust growth in continuing operations, still due to the impact of the Omnicrom variant in the first quarter of 2022, in the second quarter of 2023, despite the challenging economic context, the group recorded a positive performance across the portfolio of brands and geographies in which it operates.
Ibersol's Management monitors the business based on the following segments:
| SEGMENT | ||
|---|---|---|
| Restaurants | Counters | Concessions, Travel and Catering |
| Brands | ||
| Pizza Hut | KFC | SOL (AS) |
| Pasta Caffe | Taco Bell | Concessions |
| Pizza Móvil | Miit | Catering |
| FresCo | Pans & Co. | Convenience |
| Ribs Sta Maria | Pans Café | stores |
| Goto Café | Travel |
| Restaurants | Counters | Concessions, Travel and Catering |
Others, eliminations and adjustments |
Total Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sep/23 | Sep/22 | Sep/23 | Sep/22 | Sep/23 | Sep/22 | Sep/23 | Sep/22 | Sep/ 23 |
Sep/ 22 |
|
| Turnover | 81 282 387 | 75 900 646 | 110 337 145 | 84 229 556 | 115 070 217 | 94 069 911 | 3 389 890 | 234 839 | 310 079 639 | 254 434 951 |
| Operating profit minus amortisation, deprec. and impairment losses |
13 309 780 | 14 591 663 | 21 869 584 | 13 320 580 | 20 093 689 | 12 568 056 | 419 998 | -96 056 | 55 693 050 | 40 384 243 |
| Amortisation, depreciation and impairment losses |
-7 566 964 | -8 151 450 | -13 901 150 | -11 300 939 | -13 762 027 | -5 258 167 -1 248 888 | -1 157 082 | -36 479 028 | -25 867 638 | |
| Operating profit | 5 742 816 | 6 440 213 | 7 968 435 | 2 019 641 | 6 331 662 | 7 309 889 | -828 890 | -1 253 138 | 19 214 022 | 14 516 605 |
| Financial profit (loss) | -7 192 986 | -4 894 991 | ||||||||
| Other non-operating gains (losses) | 57 679 | 18 012 | ||||||||
| Income tax for the period | -2 624 648 | -2 343 439 | ||||||||
| Consolidated net profit | 9 454 067 | 7 296 187 | ||||||||
| Sep/ 23 |
Dec/ 22 |
Sep/ 23 |
Dec/ 22 |
Sep/ 23 |
Dec/ 22 |
Sep/ 23 |
Dec/ 22 |
Sep/ 23 |
Dec/ 22 |
|
| Total allocated assets | 90 161 726 | 91 896 930 | 177 480 712 | 183 447 497 | 175 790 226 | 83 279 920 | 5 885 287 | 7 153 239 | 449 317 951 | 365 777 586 |
| Total allocated liabilities | 48 516 892 | 54 157 982 | 101 020 497 | 111 840 362 | 127 081 367 | 26 414 682 | 1 664 960 | 1 736 089 | 278 283 715 | 194 149 115 |
The unallocated assets and liabilities resulting from investment, financing and tax activities managed on a centralized and consolidated basis, are as follows:
| The unallocated assets and liabilities resulting from investment, financing and tax activities managed on a centralized and consolidated basis, are as follows: |
||||
|---|---|---|---|---|
| Assets and liabilities of the unallocated segments |
Sep/ | 23 | Dec/ | 22 |
| Assets | Liabilities | Assets | Liabilities | |
| Deferred Taxes | 11 977 278 | 4 302 416 | 9 989 258 | 4 303 563 |
| Income tax | 29 039 | 2 627 455 | 109 587 | 413 865 |
| Net Financing | 171 514 703 | 29 969 134 | 237 132 629 | 70 081 886 |
| BK sale receivable amount | 32 374 762 | - | 32 974 762 | - |
| Non-current accounts receivable | 751 653 | - | 501 388 | - |
| Investments in associates and joint ventures | 6 145 599 | - | 3 087 921 | - |
| Debt instruments at amortised cost | 1 681 031 | - | 3 068 858 | - |
| Total | 224 474 065 | 36 899 005 | 286 864 403 | 74 799 314 |
| Sep/ | 23 | Dec/ | 22 | |
|---|---|---|---|---|
| Allocated by segment | 449 317 951 | 278 283 715 | 365 777 585 | 194 149 115 |
| Not allocated | 224 474 065 | 36 899 005 | 286 864 403 | 74 799 314 |
| Total Balance | 673 792 016 | 315 182 720 | 652 641 989 | 268 948 429 |
| 30 September 2023 | Portugal | Angola | Spain | Group |
|---|---|---|---|---|
| Turnover | 174 236 411 | 9 163 167 | 126 680 061 | 310 079 639 |
| Tangible and intangible fixed assets | 109 286 212 | 14 336 147 | 29 830 072 | 153 452 432 |
| Right-of-Use Assets | 44 562 042 | 217 661 | 133 474 125 | 178 253 827 |
| Investment property | 12 914 890 | - | - | 12 914 890 |
| Goodwill | 6 604 503 | 130 714 | 47 656 558 | 54 391 775 |
| Deferred tax assets | - | - | 11 977 278 | 11 977 278 |
| Investments in assoc. and joint ventures | 6 145 599 | - | - | 6 145 599 |
| Non-current accounts receivable | 7 751 653 | - | 8 762 481 | 16 514 134 |
| Debt instruments at amortised cost | - | 624 333 | - | 624 333 |
| Total non-current assets | 187 264 899 | 15 308 855 | 231 700 514 | 434 274 268 |
| Assets | Liabilities | Liabilities | ||
|---|---|---|---|---|
| Allocated by segment | 449 317 951 | 278 283 715 | 365 777 585 | 194 149 115 |
| Not allocated | 224 474 065 | 36 899 005 | 286 864 403 | 74 799 314 |
| Total Balance | 673 792 016 | 315 182 720 | 652 641 989 | 268 948 429 |
| INFORMATION BY GEOGRAPHY At 30 September 2023 the breakdown of revenues and non-current assets by geography is as follows: |
||||
| 30 September 2023 | Portugal | Angola | Spain | |
| Turnover | 174 236 411 | 9 163 167 | 126 680 061 | |
| Tangible and intangible fixed assets | 109 286 212 | 14 336 147 | 29 830 072 | |
| Right-of-Use Assets | 44 562 042 | 217 661 | 133 474 125 | |
| Investment property | 12 914 890 | - | - | |
| Goodwill | 6 604 503 | 130 714 | 47 656 558 | |
| Deferred tax assets | - | - | 11 977 278 | |
| Investments in assoc. and joint ventures | 6 145 599 | - | - | |
| Non-current accounts receivable | 7 751 653 | - | 8 762 481 | |
| Debt instruments at amortised cost Total non-current assets |
- 187 264 899 |
624 333 15 308 855 |
- 231 700 514 |
|
| 4.3. Operating income and expenses 4.3.1. Other operating income/(expenses) |
||||
| 2023 | 2023 | |||
| Other expenses and other operating income breakdown in 30 September 2023 and 2022 are presented as follows: Other operating expenses |
||||
| Direct/indirect taxes not affecting the operating activity | 615 617 | 518 506 | ||
| Losses on tangible fixed assets | 10 707 | 100 050 | ||
| Exchange differences | 1 282 840 | 771 045 | ||
| Stock losses | 30 778 | 5 842 | ||
| Membership fees, donations and gifts and inventory samples | 118 854 | 83 641 | ||
| Impairment adjustments (of receivables) | 64 974 | 189 116 | ||
| Other operating expenses | 236 529 | 119 583 | ||
| 2 360 299 | 1 787 783 | |||
| Other operating income | ||||
| Operating subsidies | 108 579 | 53 801 | ||
| Supplementary income | 5 551 677 | 3 270 728 | ||
| Exchange differences | 240 095 | 1 095 653 | ||
| Compensation | - | 2 618 320 | ||
| Impairment (reversal) of accounts receivable | 107 020 | 60 700 | ||
| Gains on tangible fixed assets | 4 648 | 19 718 | ||
| Investment subsidies | 10 995 | 24 581 | ||
| Other operating income | 252 156 | 72 504 | ||
| 6 275 170 | 7 216 005 |
Supplementary income essentially derives from revenues related to contracts with suppliers and franchisees (Eat Out group).
Due to the devaluation of the Angolan currency as of May 2023, net charges for exchange rate differences increased by 1.3 million euros compared to the same period in 2022.
A indemnity was received in the amount of 618,320 euros relating to the fire at the Alicante airport (amounts recorded under compensation), and that resulting from the compensation agreement associated with the purchase of the EatOut group in Spain, in the amount of 2 million euros.
The Group's main activity is the operation of restaurants of various own brands and franchises, and the preferred mode of payment of its sales is cash, debit card or other type of card, for example, meal card. With the emergence of sales platforms for home delivery, sales collected through the intermediary are gaining expression. The largest volume of credit results from delivery activity through Aggregators, catering sales, although the model of payment in advance is implemented for most customers, as well as the supply of goods and debit of royalties to franchisees.
At 30 September 2023 and 31 December 2022, the accounts receivable item breaks down as follows:
| Note | Sep/ 23 |
Dec/ 22 |
|
|---|---|---|---|
| Non-current accounts receivable | |||
| Non-current financial assets | 751 653 | 501 388 | |
| Other accounts receivable | 8 870 301 | 7 355 485 | |
| BK sale receivable amount | 7 000 000 | 7 000 000 | |
| Accumulated impairment losses | -107 820 | -129 384 | |
| 16 514 134 | 14 727 489 | ||
| Current accounts receivable | |||
| Clients | 6 329 401 | 17 442 675 | |
| State and other public entities | 3 401 002 | 3 041 134 | |
| Other debtors | 5.1.1. | 7 914 962 | 6 165 750 |
| BK sale receivable amount | 25 374 762 | 25 974 762 | |
| Advances to suppliers c/a | 188 483 | 247 487 | |
| Advances to suppliers of fixed assets | 2 532 405 | 296 657 | |
| Accrued income | 2 670 811 | 4 012 292 | |
| Expenses to be recognised | 1 934 721 | 1 526 337 | |
| Accumulated impairment losses | -2 842 670 | -2 886 823 | |
| 47 503 877 | 55 820 271 | ||
| Total Accounts receivable | 64 018 011 | 70 547 760 |
Of the estimated amount receivable from the sale of BK, totaling 32,374,762 euros, 7,000,000 euros relate to the earn-out to be received for compliance with a program to extend certain contracts, to be completed in 2024, and are therefore presented as non-current.
Still in the process of concluding the sale of the subsidiaries Iberking, Restauração S.A. and Lurca S.A.U., under the price adjustment mechanism provided for in the purchase and sale agreement signed in November 2022, the values considered in the financial statements for 2022 and 30 September 2023 have been defined, already taking into account the results contained in the independent expert's final report, as described in note12.
The balance relates essentially to the Labor Compensation Fund.
The balance relates essentially to VAT recoverable in the amount of 3,352,898 euros at 30 September 2023 (3,041,087 euros in 2022)
On 30 September 2023 and 31 December 2022 the balance under Other debtors includes aggregators, other suppliers' debts, debits to suppliers for the recovery of charges for marketing and rappel contributions, meal vouchers (delivered by customers), short-term guarantees and miscellaneous advances, as follows:
| Sep/ 23 |
Dec/ 22 |
|
|---|---|---|
| Meal cards/aggregators | 2 826 943 | 1 866 687 |
| Deposits and bonds | 333 519 | 1 064 483 |
| Marketing and rappel | 1 754 322 | 848 190 |
| Debtors suppliers and others | 1 569 630 | 1 377 361 |
| Advances | 132 745 | 131 447 |
| Staff expenses | 173 216 | 122 876 |
| Credit sales | 869 820 | 660 547 |
| Continente card | 254 767 | 94 160 |
| Total | 7 914 962 | 6 165 750 |
The "Meal card" amounts refer to payments at the establishments, charged to the card issuers electronically after 15 days of processing or, when by physical delivery, after picking, checking and deposit. The aggregators transfer payments made on behalf of the restaurants within an average period of 15 days.
The Marketing and rappel item corresponds to amounts invoiced to Suppliers at the end of the year.
In the periods ended 30 September 2023 and 31 December 2022, the accounts payable item breaks down as follows:
| down as follows: | |||
|---|---|---|---|
| Note | Sep/ 23 |
Dec/ 22 |
|
| Non-current payables | |||
| Non-current payables | 3 704 | 43 149 | |
| 3 704 | 43 149 | ||
| Current payables | |||
| Suppliers | 5.2.1. | 48 268 570 | 60 214 442 |
| Accrued expenses | 5.2.2. | 30 045 480 | 23 469 782 |
| Other creditors | 5 346 015 | 5 977 098 | |
| State and other public entities | 6 961 267 | 8 401 652 | |
| Income to be recognised | 114 472 | 758 268 | |
| 90 735 804 | 98 821 242 | ||
| Total accounts payable | 90 739 508 | 98 864 391 |
The balance of the item State and other public entities results, essentially, from VAT payable (3,194,446 euros) and Social Security (2,795,136 euros).
| The breakdown of suppliers on 30 September 2023 and 31 December 2022, is as follows: | ||
|---|---|---|
| Sep/ 23 |
Dec/ 22 |
|
| Suppliers - Incoming invoices | 37 856 759 | 44 166 336 |
| Suppliers - Invoices being received and checked | 7 081 683 | 5 782 983 |
| Suppliers of fixed assets - current account | 3 330 128 | 10 265 123 |
| Total accounts payable to suppliers | 48 268 570 | 60 214 442 |
| As at 30 September 2023 and 31 December 2022 the breakdown of accrued expenses, is as follows: | ||
|---|---|---|
| Sep/ 23 |
Dec/ 22 |
|
| Insurance payable | 129 146 | 85 737 |
| Accrued payroll | 10 259 349 | 8 256 196 |
| Rents and leases | 12 526 435 | 9 559 234 |
| External services rendered | 6 488 499 | 5 237 673 |
| Others | 642 051 | 330 942 |
| Total accrued expenses | 30 045 480 | 23 469 782 |
The accrued expenses - rents and leases include the amount related to AENA rents from airports in Spain that are not relevant for lease liabilities.
Goodwill is allocated to each of the reportable segments as follows:
| Goodwill is allocated to each of the reportable segments as follows: | ||||
|---|---|---|---|---|
| Sep/ 23 |
Dec/ 22 |
|||
| Restaurants | 7 147 721 | 7 147 721 | ||
| Counters | 12 558 945 | 12 558 945 | ||
| Concessions and Catering | 34 505 388 | 34 505 388 | ||
| Others | 179 721 | 179 721 | ||
| Total | 54 391 775 | 54 391 775 |
Goodwill is in turn allocated to the following groups of homogeneous cash generating units:
| Goodwill is in turn allocated to the following groups of homogeneous cash generating units: | ||
|---|---|---|
| Sep/ 23 |
Dec/ 22 |
|
| Restaurants | 7 147 721 | 7 147 721 |
| Ribs | 5 175 479 | 5 175 479 |
| Pizza Hut | 1 972 242 | 1 972 242 |
| Counters | 12 558 945 | 12 558 945 |
| Pans & C.º | 11 850 160 | 11 850 160 |
| KFC | 708 785 | 708 785 |
| Concessions and Catering | 34 505 388 | 34 505 388 |
| Concessions & travel (ES) | 30 630 919 | 30 630 919 |
| Concessions & travel (PT) | 850 104 | 850 104 |
| Catering | 3 024 365 | 3 024 365 |
| Others | 179 721 | 179 721 |
| Total | 54 391 775 | 54 391 775 |
The group's main operating rights refer to the franchise rights paid to international brands when opening restaurants operating under the brand: 10 years in the case of Pizza Hut, Taco Bell and KFC, these renewable for another 10 years at the option of the franchised.
At 30 September 2023, the concessions, included under the industrial property heading, and the respective associated useful life, are presented as follows:
| Concession Rights | No. Years | Limit year for use |
|---|---|---|
| Lusoponte Service Area | 33 | 2032 |
| 2ª Circular Service Area | 10 | 2027 |
| Portimão Marina | 60 | 2061 |
| Pizza Hut Cais Gaia | 20 | 2024 |
| Modivas Service Area | 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 |
During the nine months period ending in 30 September 2023 and in the year ending 31 December 2022, the movement in the value of intangible assets, as well as in the respective amortization and accumulated impairment losses, was as follows:
| Brands | Industrial property |
Other intangible assets |
Intangible assets in progress |
Total | |
|---|---|---|---|---|---|
| 01 January 2022 | 16 316 667 | 16 912 143 | 1 411 650 | 1 230 242 | 35 870 696 |
| Changes to the consolidation perimeter | - | 447 026 | - | - | 447 026 |
| Currency translation | - | 2 649 | - | 18 885 | 21 534 |
| Additions | - | 2 413 845 | 714 714 | 554 367 | 3 682 926 |
| Decreases | - | -8 738 366 | -152 760 | -540 976 | -9 432 102 |
| Transfers | - | 208 008 | -5 000 | -98 546 | 104 462 |
| Amortization of the year from discontinued | |||||
| operations | - | -561 444 | -1 866 | - | -563 310 |
| Amortization for the year | -1 100 000 | -1 519 886 | -312 405 | - | -2 932 291 |
| Reversal of impairment | - | 17 339 | - | - | 17 339 |
| Transfer discontinued operations | - | -353 497 | - | - | -353 497 |
| 31 December 2022 | 15 216 667 | 8 827 817 | 1 654 333 | 1 163 972 | 26 862 783 |
| Currency translation | - | -12 160 | - | -47 573 | -59 733 |
| Additions | - | 1 316 513 | 135 325 | 963 486 | 2 415 324 |
| Decreases | - | -25 254 | -30 000 | -128 725 | -183 979 |
| Transfers | - | 10 948 | - | -2 000 | 8 948 |
| Amortization for the year | -825 000 | -1 480 727 | -147 393 | - | -2 453 120 |
| 30 September 2023 | 14 391 667 | 8 637 137 | 1 612 265 | 1 949 160 | 26 590 223 |
Decreases in 2022 refer essentially to the effect of the sale of the Burger King business, in the amount of 9,386,910 euros.
Intangible assets in progress mostly relate to territorial rights to open units, which are paid in advance to the brands at the time when joint agreements are signed between Ibersol and the franchisors to open units.
During the nine months period ending in 30 September 2023 and in the year ending 31 December 2022, the movement in the value of tangible fixed assets, as well as in the respective amortization and accumulated impairment losses, was as follows:
| Buildings and | Other | |||||
|---|---|---|---|---|---|---|
| Land | other | Equipment | tangible fixed | Other tangible | Total | |
| constructions | assets | fixed assets | ||||
| 01 January 2022 | 19 497 339 | 153 238 101 | 31 204 592 | 9 664 958 | 768 719 214 373 712 | |
| Currency translation | 147 622 | 94 102 | -28 478 | -15 456 | 506 | 198 296 |
| Additions | 3 103 | 25 557 781 | 9 805 617 | 3 419 615 | 1 650 695 | 40 436 811 |
| Decreases | -1 308 187 | -67 356 069 | -13 986 649 | -5 900 966 | -706 538 -89 258 409 | |
| Transfers | -3 661 214 | -4 818 523 | 79 403 | 3 849 | -306 942 | -8 703 426 |
| Depreciation charge for the year on discontinued operations - | -3 707 595 | -2 390 155 | -834 229 | - | -6 931 979 | |
| Depreciation for the year | -97 127 | -8 832 192 | -4 742 138 | -1 113 791 | - | -14 785 248 |
| Impairment for the year | - | -2 410 175 | - | - | - | -2 410 175 |
| Reversal of impairment | - | 992 976 | - | - | - | 992 976 |
| Transfer discontinued operations | - | -2 295 260 | -732 862 | -344 133 | - | -3 372 255 |
| 31 December 2022 | 14 581 536 | 90 463 145 | 19 209 331 | 4 879 846 | 1 406 440 130 540 302 | |
| Currency translation | -360 739 | 7 110 | 123 809 | 74 032 | -11 847 | -167 635 |
| Additions | - | 4 159 118 | 3 218 957 | 539 987 | 3 936 014 | 11 854 076 |
| Decreases | - | -8 556 | -160 017 | -6 193 | -14 615 | -189 381 |
| Transfers | -3 484 496 | -150 555 | 214 437 | 47 139 | -681 323 | -4 054 798 |
| Depreciation for the year | -35 517 | -6 745 288 | -3 301 392 | -924 375 | - | -11 006 572 |
| Transfer discontinued operations | - | -99 308 | -11 052 | -3 423 | - | -113 783 |
| 30 September 2023 | 10 700 784 | 87 625 666 | 19 294 073 | 4 607 013 | 4 634 669 126 862 209 |
The value of 2022 decreases essentially corresponds to the effect of the sale of Burger King, in the amount of 88,941,949 euros. The transfer to discontinued operations respects Burger King restaurants located in concessions, essentially Service Areas, whose sale will be completed by the end of 2023.
The value of tangible assets in progress in the amount of €3.9M refers to investments incurred for future openings.
During the nine months period ending in 30 September 2023 and in the year ending 31 December 2022, the movement in the value of the rights of use, as well as in the respective amortization and accumulated impairment losses, is presented as follows:
| Shops and | |||||
|---|---|---|---|---|---|
| Commercial | Buildings | Equipment | Other assets | Total | |
| Spaces | |||||
| 01 January 2022 | 128 125 587 | 5 881 809 | 4 496 619 | 367 138 | 138 871 153 |
| Currency translation | 93 857 | - | - | - | 93 857 |
| Increases | 41 567 014 | 10 423 | 997 765 | 62 218 | 42 637 420 |
| Decreases | -64 078 803 | -35 172 | -1 552 617 | -159 620 | -65 826 212 |
| Transfers | - | 92 801 | 20 112 | 400 | 113 313 |
| Depreciation of the year from discontinued operations | -4 196 869 | -3 999 | -258 495 | -21 527 | -4 480 890 |
| Depreciation for the year | -17 793 551 | -1 253 051 | -690 927 | -40 286 | -19 777 815 |
| Transfers from discontinued operations | -1 703 145 | - | - | - | -1 703 145 |
| 31 December 2022 | 82 014 090 | 4 692 812 | 3 012 457 | 208 323 | 89 927 682 |
| Currency translation | -208 654 | - | - | - | -208 654 |
| Increases | 113 880 622 | - | - | - | 113 880 622 |
| Decreases | -1 769 224 | - | - | - | -1 769 224 |
| Transfers | - | -395 402 | -3 239 | - | -398 641 |
| Depreciation for the year | -21 364 899 | -934 392 | -513 515 | -31 138 | -22 843 944 |
| Transfers from discontinued operations | -334 012 | - | - | - | -334 012 |
| 30 September 2023 | 172 217 923 | 3 363 017 | 2 495 703 | 177 185 | 178 253 827 |
The value of the increases essentially corresponds to the new lease contracts at Madrid, Lanzarote, Tenerife and Malaga Airports, for which the incremental rate updated with current market conditions was used. And also the effect of remeasurement of contracts by rent updates by the Consumer Price Index and other changes in expected lease payments.
The value of 2022 decreases refers essentially to the effect of the sale of Burger King, in the amount of 65,725,852 euros.
The complexity and level of judgment inherent to the model adopted for the calculation of impairment and the identification and aggregation of cash generating units (CGU's) implies considering this topic as a significant accounting estimate.
For the purposes of impairment tests, the recoverable amount is the higher of the fair value of an asset less costs inherent in its sale and its value in use. The recoverable amount of CGU's derives from assumptions related to the activity, namely, sales volumes, operating expenses, planned investments, refurbishment and closure of units, impact of other market players, internal Management projections and historical performance.
These projections result from the budgets for the following year and the estimated cash flows for a subsequent four-year period reflected in the medium-long-term plans approved by the Board of Directors.
Sensitivity analyzes were also performed on the main assumptions used in the base calculation, as shown below.
Restaurants with signs of impairment are tested, considering operating results less amortization, depreciation and impairment losses of tangible fixed assets, intangible assets and goodwill, as well as other cash-generating units whenever circumstances determine or unusual facts occur.
The negative profitability of the stores is an indication of impairment, and the subsequent impairment analysis considers the projected cash flows of each store. In cases of recent openings, such initial negative profitability may not be representative of the expected profitability pattern for that store and may not constitute an indication of impairment if such behavior was expected for that period.
When an asset has an operating performance that exceeds the projections that previously supported the recording of an impairment loss, such loss is reversed to the extent that the value in use based on the updated projections exceeds the carrying amount.
The assumptions for analyzing impairment of tangible fixed assets, intangible assets, rights of use and goodwill used in the preparation of the financial statements as of December 31, 2022, remain valid and there have been no changes to the underlying facts and circumstances. No relevant signs were identified that would indicate the need to carry out new impairment tests in the first six months of 2023.
Expenses with depreciation, amortization and impairment losses on non-financial assets in the nine months period ending in 30 September 2023 and in the year ending 31 December 2022, were as follows:
| 2023 | 2022 | ||||||
|---|---|---|---|---|---|---|---|
| Nature | Note | Depreciation and amortisation |
Impairment losses |
Total | Depreciation and amortisation |
Impairment losses |
Total |
| Goodwill | 6.1. | - | - | - | - | - | - |
| Intangible assets | 6.2. | -2 453 120 | - | -2 453 120 | -2 148 014 | - | -2 148 014 |
| Property, plant and equipment | 6.3. | -11 006 569 | - | -11 006 569 | -9 740 853 | - | -9 740 853 |
| Right-of-use assets | 6.4. | -22 843 944 | - | -22 843 944 | -14 099 111 | - | -14 099 111 |
| Currency translation | -175 395 | - | -175 395 | 120 340 | - | 120 340 | |
| Total | -36 479 028 | - | -36 479 028 | -25 867 638 | - | -25 867 638 |
The investment properties, which at 30 September 2023 and 31 December 2022 which total 12,914,819 euros and 8,470,400 euros, respectively, relate to real estate assets where 9 Burger King restaurants operate. These assets were subject to a lease agreement with Burger King Portugal.
Based on the terms of negotiation for the sale of Burger King, the Group estimates that the fair value of these assets amounts to approximately 13.4 million euros.
As decided at the Annual General Meeting of May 26, 2023, in June 2023 the company reduced the share capital from 46,000,000 euros to 42,359,577 euros, by extinguishing 3,640,423 own shares, to release excess capital.
At 31 December 2022, Ibersol's share capital was fully subscribed and paid up, represented by 46,000,000 registered shares with a nominal value of 1 euro each.
In 2023, the Group extinguished 3,640,423 own shares acquired for 11,410,227 euros, as per note 7.1.1, and acquired 296,413 own shares for 2,027,844 euros, starting the Buyback Program approved at the last General Meeting.
At the end of the period, the company held 296,413 own shares acquired for 2,027,844 euros.
At the Annual General Meeting of May 26, 2023, it was decided to grant gross dividends of 0.70 euros per share (0.135 euros in 2022), corresponding to a value of 29,651,704 euros (5,724,002 euros in 2022) for the outstanding shares, payment for which was made on June 20, 2023.
At 30 September 2023 and 2022, basic and diluted earnings per share were calculated as follows:
| 2023 | 2022 | |
|---|---|---|
| Profit attributable to equity holders | ||
| Continuing operations | 9 513 158 | 7 296 279 |
| Discontinued operations | 1 169 780 | 7 266 870 |
| Number of shares issued at the beginning of the year | 46 000 000 | 46 000 000 |
| Number of shares issued at the end of the year | 42 359 577 | 46 000 000 |
| Weighted average number of ordinary shares issued (i) | 44 306 470 | 44 306 470 |
| Weighted average number of treasury shares (ii) | 1 947 534 | 1 947 534 |
| Weighted average number of shares outstanding (i-ii) | 42 358 936 | 42 358 936 |
| Basic earnings per share (euros per share) | ||
| Continued operations | 0,22 | 0,17 |
| Discontinued operations | 0,03 | 0 |
| Diluted earnings per share (€ per share) | ||
| Continued operations | 0,22 | 0,17 |
| Discontinued operations | 0,03 | 0 |
| Number of treasury shares at the end of the period | 296 413 | 3 599 981 |
As there are no preferred voting rights, basic earnings per share equals diluted earnings per share.
At 30 September 2023 and 31 December 2022 current and non-current borrowings had the following detail:
| Sep/ 23 |
Dec/ 22 |
|
|---|---|---|
| Non-current | ||
| Bank loans | 9 022 795 | 29 834 860 |
| Commercial paper | 4 800 000 | 16 400 000 |
| 13 822 795 | 46 234 860 | |
| Current | ||
| Bank overdrafts | - | - |
| Bank loans | 4 536 212 | 12 274 609 |
| Commercial paper | 11 610 127 | 11 572 417 |
| 16 146 339 | 23 847 026 | |
| Total borrowings | 29 969 134 | 70 081 886 |
For Commercial Paper Programs, when there is a termination date, we consider maturity on that date, regardless of the terms for which they are contracted.
There are commercial paper financing agreements that include cross default clauses. Such clauses refer to contractual non-compliance in other contracts or tax non-compliance, in which case it does not occur.
Some of the bank loans include Financial Covenants, which are being complied with.
The interest rate in force on 30 September 2023 for PPC and borrowings was on average around 4.2% (2.55% on 31 December 2022). Borrowings indexed at variable rates are indexed to Euribor.
The Group had 50 million euros relating to commercial paper and unused contracted credit lines.
Movements in the nine months period ending in 30 September 2023 and in the year ending 31 December 2022 under current and non-current loans, except for finance leases and bank overdrafts, are presented as follows:
| 2023 | 2022 | |
|---|---|---|
| 1 January | 70 081 886 167 032 350 | |
| Variations with impact in cash flows: | ||
| Proceeds from borrowings obtained | 328 041 | 3 000 000 |
| Financial debt repayments | -40 755 649 | -83 427 754 |
| Variations without impact on cash flows: | ||
| Financing associated with Burger King sale operation | - | -16 676 137 |
| Financing set-up costs | 359 857 | - |
| Capitalised interest and other | -44 999 | 153 428 |
| as at 30 September | 29 969 134 | 70 081 886 |
At 30 September2023 and 31 December 2022, the company has commitments to third parties arising from lease contracts, namely real estate contracts. At 30 September 2023 and 31 December 2022 current and non-current leases are as follows:
| Sep/23 | dez/22 | ||||||
|---|---|---|---|---|---|---|---|
| Current | Non-current | Total | Current | Non-current | Total | ||
| Leases | 25 323 430 | 157 746 784 | 183 070 214 | 20 760 371 | 70 113 338 | 90 873 709 | |
| TOTAL | 25 323 430 | 157 746 784 | 183 070 214 | 20 760 371 | 70 113 338 | 90 873 709 |
Changes in the nine months period ending in 30 September 2023 and in the year ending 31 December 2022 are presented as follows:
| 2023 | 2022 | |
|---|---|---|
| 1 January | 90 873 709 | 143 068 335 |
| Variations with impact in cash flows: | ||
| Lease payments | -26 140 657 | -32 399 561 |
| Variations with no impact in cash flows: | ||
| Leases associated with Burger King sale operation | -384 620 | -67 281 693 |
| Interest for the period from updating lease liabilities | 6 989 445 | 4 481 130 |
| Interest for the period from updating lease liabilities of discontinued operations | - | 3 601 415 |
| Lease increases | 113 869 492 | 42 637 420 |
| Contracts terminations / shop closings | -1 769 223 | -100 360 |
| Reclassification to liabilities directly associated with the group of assets | - | -1 880 146 |
| classified as held for sale | ||
| Rent concessions arising from the COVID-19 pandemic | - | -830 996 |
| Others | -367 933 | -421 835 |
| 30 September | 183 070 214 | 90 873 709 |
Lease payments include 19,152,216 euros (24,317,016 euros in 2022) of principal and 6,988,441 euros (8,082,545 euros in 2022) of interest.
Ibersol Angola operates with a large component of imports that generate liabilities in foreign currency. In order to reduce the exchange rate risk and face Kwanza variations, the company adopted the policy of holding assets indexed to the USD in an amount, at least, of the same order of magnitude as the liabilities.
In addition to holding USD-indexed Treasury Bonds, the company acquired non-adjustable Treasury Bonds (denominated in AKZ) for the financial application of surpluses.
The amount of financial assets refers to investments in Treasury Bonds of the Angolan State. The separation by maturity is as follows: Sep/ 23 Dec/ 22
| Non Current Total |
Current | Non | Total | |||
|---|---|---|---|---|---|---|
| current | current | |||||
| Angolan Treasury Bonds | 1 128 942 | 705 355 | 1 834 297 | 607 662 | 2 771 741 | 3 379 403 |
| Accumulated impairment losses | -72 244 | -81 022 | -153 266 | -15 937 | -294 608 | -310 545 |
| TOTAL | 1 056 698 | 624 333 | 1 681 031 | 591 725 | 2 477 133 | 3 068 858 |
As there has been no significant increase in credit risk since the initial recognition of Treasury Bonds, expected losses within a period of 12 months were considered.
The indices used for Probability of Default and Loss Given Default of Angolan Treasury Bonds are in accordance with Moodys and S&P publications, the probability of default considered was 7.9% and the loss given default considered to be 59%.
At 30 September 2023 and 31 December 2022, the breakdown of cash and cash equivalents was as follows:
| follows: | ||
|---|---|---|
| Sep/ 22 |
Dec/ 22 |
|
| Cash | 515 982 | 474 011 |
| Bank deposits | 170 998 721 | 236 658 618 |
| Cash and bank deposits in the balance sheet | 171 514 703 | 237 132 629 |
| Cash and cash equivalents on the cash flow statement | 171 514 703 | 237 132 629 |
Financial expenses and losses in September 2023 and 2022 are presented as follows:
| Financial expenses | 2023 | 2022 |
|---|---|---|
| Interest from lease liabilities (IFRS16) | 6 988 441 | 3 127 835 |
| Interest expenses with financing | 1 887 256 | 1 639 607 |
| Other financial expenses | 1 162 961 | 972 139 |
| 10 038 658 | 5 739 581 |
The change in interest on lease liabilities relates mainly to the new lease contracts for Madrid and Lanzarote Airports, for a total of 3 million euros.
Income and financial gains in September 2023 and 2022 are presented as follows:
| Financial income and gains | 2023 | 2022 |
|---|---|---|
| Interest income | 2 625 219 | 542 891 |
| Other financial income | 220 453 | 301 699 |
| 2 845 672 | 844 590 |
Income taxes recognized in the nine months period ended 30 September 2023 and 2022 are detailed as follows:
| follows: | ||
|---|---|---|
| Sep/ 23 |
Sep/ 22 |
|
| Current tax | 4 929 604 | 2 548 494 |
| Deferred tax | -2 304 956 | -205 055 |
| 2 624 648 | 2 343 439 |
At 30 September 2023 the effective tax rate is 22%.
At 30 September 2023, the amount of tax on income to be recovered amounts to EUR 29,039 (EUR 109,587 in 2022), as follows:
| Sep/ 23 |
Dec/ 22 |
|
|---|---|---|
| Spain | 29 039 | 31 557 |
| Portugal | - | 78 030 |
| 29 039 | 109 587 |
At 30 September 2023 and 31 December 2022, the amount of tax payable breaks down as follows:
| Sep/ 23 |
Dec/ 22 |
|
|---|---|---|
| Portugal | 2 457 437 | - |
| Angola | 170 018 | 406 730 |
| Others | - | 7 135 |
| 2 627 455 | 413 865 |
At 30 September 2023 and 31 December 2022 the detail of deferred tax assets, according to the jurisdiction, is as follows: Sep/ 23 Dec/ 22
| Deferred tax assets | Spain | Spain |
|---|---|---|
| Tax losses carried forward | 11 907 092 | 10 621 807 |
| Ded. temporary differences (IFRS16) | 1 476 047 | 576 596 |
| Taxable temporary differences | -645 937 | -645 937 |
| Homogenization of property, plant and equipment and intangible assets | -1 317 175 | -1 140 379 |
| Other temporary differences | 557 251 | 577 171 |
| 11 977 278 | 9 989 258 |
Deferred taxes resulting from a temporary difference by applying IFRS16 in the Group's consolidated accounts, not applicable in the statutory accounts of the subsidiaries in Spain and Angola.
Deferred taxes corresponding to the difference between the net value of fixed assets considered in the individual financial statements of the subsidiaries and the net value they contribute in the consolidated.
In the analysis of the recoverability of deferred tax assets, the Group took into consideration the best estimates of future taxable income projections and the existence of taxable temporary differences against which tax losses, tax credits and deductible temporary differences can be utilized.
Business plans were prepared which, considering the Spanish taxation rules and the specificities of the group of companies, formed the basis for the recoverability assessment. The business plans were approved by management and are based on projections from external entities, such as Eurocontrol in the case of traffic, as well as being consistent with the business plans that served as the basis for the impairment analyses of the Group's assets.
The detail of deferred tax liabilities at 30 September 2023 and 31 December 2022, according to the jurisdiction and temporary differences that generated them, is as follows: set/ 23 Dec/ 22
| Deferred tax liabilities | Portugal | Angola | TOTAL | Portugal | Angola | TOTAL |
|---|---|---|---|---|---|---|
| Homogenization of property, plant and equipment and | ||||||
| intangible assets | 4 420 167 | -491 387 | 3 928 780 | 4 543 332 | -711 518 | 3 831 813 |
| Hyperinflationary Economies (IAS 29) | - | 3 496 574 | 3 496 574 | - | 3 658 913 | 3 658 913 |
| Deductible temporary differences (IFRS16) | - | -25 211 | -25 211 | - | -50 116 | -50 116 |
| Other temporary differences | -3 059 410 | -38 317 | -3 097 727 | -3 059 410 | -77 637 | -3 137 047 |
| 1 360 757 | 2 941 660 | 4 302 416 | 1 483 922 | 2 819 641 | 4 303 563 |
Deferred taxes that correspond to the difference between the net value of tangible and intangible fixed assets considered in the individual financial statements of the subsidiaries and the net value they contribute in the consolidated.
The amount of other temporary differences refers, essentially, to unused tax benefits. As of 31 December 2022 there are 117,600 of tax benefits associated with the capital increase and 2,975,669 of tax benefits not deducted, to be used in following years. 2,676,201 of RFAI of the year 2022 and 299,468 of CFEI II (165,283 deductible until 2025 and 134,185 until 2026, inclusive). It should be noted that these credits have a reporting period of 10 tax periods, a period whose counting was suspended during the 2020 tax period and during the following tax period, under Law 21/2021, of April 21.
The Group has contingent liabilities related to its business (relating to licensing, advertising fees, hygiene and food safety and employees), and Ibersol's success rate in these processes is historically high. It is not estimated that these contingent liabilities will represent any relevant liabilities for Ibersol.
A lawsuit was filed against a subsidiary of the Eat Out Group in Spain for alleged breach of noncompetition agreements in the amount of approximately 11.7 million euros. The Board of Directors, supported by the position of the lawyers that are following the process, considers that this situation represents a contingent liability. In addition, it should be noted that the lawsuit concerns facts that occurred before the acquisition of this subsidiary by the Ibersol Group, and is therefore covered by the clauses of responsibility and guarantees provided for in the agreement for the purchase and sale of shares of the Eat Out Group, with a right of return. There is already a decision in favor of Ibersol, and we are awaiting a definitive outcome.
The agreement for the sale of the Burger King operation includes indemnity clauses in the event of the verification of certain conditions attributable to the sold entities and on events prior to the sale date (30 November 2022).
Commitments undertaken and not included in the consolidated statement of financial position include bank guarantees given to third parties and contractual commitments for the acquisition of fixed tangible assets.
At 30 September 2023 and 31 December 2022, the liabilities not reflected in the balance sheet by the companies included in the consolidation are comprised mainly of bank guarantees provided on their behalf, as follows:
| set/ 23 |
Dec/ 22 |
|
|---|---|---|
| Bank Guarantees | 37 508 037 | 38 674 924 |
At 30 September 2023 the bank guarantees are detailed, by type of coverage, as follows:
| Concessions | Other supply | Fiscal and legal | Other | Other legal |
|---|---|---|---|---|
| and rents | contracts | proceedings | claims | |
| 30 996 941 | 20 683 | 61 682 | 6 408 000 | 20 731 |
The bank guarantees arise mainly from the concessions and rents of the Group's stores and commercial spaces, and may be executed in the event of non-compliance with lease contracts, namely for nonpayment of rents.
The relevant amount derives from the guarantees required by the owners of spaces under concession (ANA Airports and AENA Airports, in Spain) or leased (some malls and other locations) in concessions and rents, of which 26,936,000 euros with AENA Airports.
In other guarantees, and following the sale of the Burger King units, the Group provided a bank guarantee of 6.4 M to BK Portugal, S.A., to cover the asset relating to existing receivables at IberKing and unused at the date of the transaction, regarding CFEI II and RFAI, for a period of 5 years with decreasing annual values.
| September 2023 | Year 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Parent entitie |
Jointly controlled entitie |
Associated entitie |
Other Entities |
Parent entitie |
Jointly controlled entitie |
Associated entitie |
Other Entities |
|
| Fupply of services | 808 506 | 2 196 210 | - | - | 1 000 000 | 4 731 672 | - | - |
| Rental income from lease contracts |
- | - | - | 139 066 | - | - | - | 2 035 463 |
| Accounts payable | - | 1 274 398 | - | - | - | 1 713 701 | - | - |
| Other current assets | - | - | - | - | - | - | - | - |
| Financial investments | - | - | 300 000 | - | - | - | 300 000 | - |
The balances and transactions with related parties in 30 September 2023 and 31 December 2022 can be presented as follows:
The parent company of Ibersol SGPS S.A. is ATPS - SGPS, SA, direct and indirect holder of 21,452,754 shares.
António Carlos Vaz Pinto de Sousa and António Alberto Guerra Leal Teixeira each hold 3,314 shares of Ibersol SGPS, S.A. respectively. The voting rights attributable to ATPS are also attributable to António Carlos Vaz Pinto de Sousa and António Alberto Guerra Leal Teixeira under the terms of sub-paragraph b) of no. 1 of article 20 and no. 1 of article 21, both of the Securities Code. º, both of the Portuguese Securities Code, by virtue of the fact that they hold control of the referred company, in which they participate indirectly, in equal parts, through, respectively, the companies CALUM - SERVIÇOS E GESTÃO, S.A. with Tax ID No. 513799486 and DUNBAR - SERVIÇOS E GESTÃO, S.A. with Tax ID No. 513799257, which together hold the majority of the share capital of ATPS.
The amounts shown under rents and lease contracts relate to the rents paid during the year and, as a result of IFRS16, do not correspond to the amount of lease expenses reflected in the financial statements. The estimated rental payment commitments over the term of the respective contracts amount to around 712,701 euros at 30 September 2023.
Burger King business sale
Under the terms of the SPA, and during the conclusion of the sale process of the subsidiaries Iberking, Restauração S.A. and Lurca S.A.U, the amounts expected under the price adjustment mechanism were received at the beginning of November, after the final Net Debt was calculated.
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