Earnings Release • Nov 22, 2018
Earnings Release
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Publicly Listed Company
Registered office: Praça do Bom Sucesso, 105/159, 9th floor, Porto Share Capital Euros 36.000.000 Commercial Registry: Oporto under number 501669477 Fiscal number: 501669477
(not audited)
Consolidated turnover for the nine months of the year amounted to EUR 335.7 million, compared to EUR 332.5 million in the same period of the previous year, broken down as follows:
| Turnover | 9M 2018 | ||||
|---|---|---|---|---|---|
| euro million % Ch. 18/17 | |||||
| Sales of Restaurants | 323,19 | $-1.2%$ | |||
| Sales of Merchandise | 9,17 | 404.8% | |||
| Services Rendered | 3,33 | $-9.9%$ | |||
| Net Sales & Services | 335,70 | 1.0% |
The positive evolution of the market in Portugal - it is estimated a market increase by around 6% coupled with the effects of the openings during 2017,contributed to the growth of turnover of 12% in Portugal.
In Spain, in the third quarter there was a slight slowdown in consumption, with growth of less than 1%. In retail, the Group increased around 3%, including the sale of merchandise.
The positive evolution of the Iberian market allowed to minimize 2 relevant impacts on the Group's activity:
The activity of the third quarter was marked by the provisional operation of most restaurants, in the new concessions at Barcelona, Gran Canária and Málaga airports.
At Barcelona airport, where we stopped operating since May 36% of restaurants, only 2 were already converted to the final shape. From a total of 19 restaurants, 89% are operating provisionally or with work in progress.
At Málaga airport, of a total of 6 assigned restaurants, we are operating only 5 in small and provisional format.
At Gran Canaria airport, of a total of 6 restaurants won, only 2 are operating on the final concept and 1 operating as provisional.
The conversion to the new restaurants is expected to be completed until the end of the first half of next year.
As a result of these effects, consolidated restaurant sales reached 323.2 million euros, a decrease of 1.2%, compared to 327.0 million euros in the same period.
| SALES IN RESTAURANTS | 9M 2018 | |
|---|---|---|
| euro million % Ch. 18/17 | ||
| Restaurants | 74.57 | 1.9% |
| Counters | 149,71 | 1.8% |
| Concessions&Catering | 98,91 | $-7.4%$ |
| Total Sales | 323,19 | $-1.2%$ |
Restaurants and counters segments performed in the way, with the good performance of the Pizza Hut, Burger King and KFC brands in Iberia.
In the counters segment, even including KFC's activity in Angola (which decreased by 33% in euros), the brands that we operate in the Iberian Peninsula, maintained the trend observed in the first semester with market share gains and growth rates influenced by a higher number of units operating.
The "Concessions and Catering" segment sales decreased, compared to the same period of the previous year, resulting from the end of the operation of 36% of concession restaurants at Barcelona Airport. Eliminating this effect, the growth of the segment would be 4.5%.
During this period, 19 other units were closed in Spain, 16 of which franchises and 2 units in Italy, continuing the process of the network readjustment.
In Portugal, the closures of two Pasta Caffé restaurants, a KFC restaurant and the Exponor concession unit occurred due to the end of the respective lease agreement.
Following the expansion strategy, the openings of 4 franchised units (Pans and Ribs) and 16 equity restaurants, 8 of which concessioned (one at Barajas airport in Madrid, three provisional points of sale, in the concession of Gran Canaria airport, 2 converted in Barcelona and 2 at Malaga airports. In addition, the opening of 6 new restaurants in Portugal (PH, BK and KFC) and two restaurants in Spain (Pans and Ribs).
At the end of the 3rd quarter, the total number of restaurants was 626 (496 equity and 130 franchises), as shown below:
| Nº of Restaurants | 2017 | 2018 | |||
|---|---|---|---|---|---|
| 31-Dec | Openings | Transfer | Closures | 30-Sep | |
| PORTUGAL | 316 | $6\phantom{1}$ | $\overline{4}$ | 318 | |
| Equity Restaurants | 315 | 6 | 4 | 317 | |
| Pizza Hut | 91 | $\overline{2}$ | 93 | ||
| Okilo+MIIT+Ribs | 4 | $\overline{4}$ | |||
| Pans+Roulotte | 46 | 46 | |||
| Burger King | 77 | 1 | 78 | ||
| KFC | 22 | 3 | 1 | 24 | |
| Pasta Caffé | 9 | $\overline{2}$ | 7 | ||
| Quiosques | 8 | 8 | |||
| Coffee Shops | 27 | 27 | |||
| Catering | $\overline{7}$ | $\overline{7}$ | |||
| Concessions & Other | 24 | 1 | 23 | ||
| Franchise Restaurants | $\mathbf{1}$ | $\blacksquare$ | |||
| SPAIN | 312 | 13 | 34 | 291 | |
| Equity Restaurants | 177 | 10 | 18 | 169 | |
| Pizza Móvil | 31 | $-2$ | 1 | 28 | |
| Pizza Hut | 3 | $\overline{2}$ | 5 | ||
| Burger King | 33 | 33 | |||
| Pans | 35 | 1 | 1 | 35 | |
| Ribs | 9 | 1 | 10 | ||
| FrescCo | 3 | 3 | |||
| Concessions | 63 | 8 | 16 | 55 | |
| Franchise Restaurants | 135 | 3 | 16 | 122 | |
| Pizza Móvil | 16 | 16 | |||
| Pans | 58 | $\overline{2}$ | 7 | 53 | |
| Ribs | 28 | 1 | 1 | 28 | |
| FrescCo | 8 | 1 | $\overline{7}$ | ||
| SantaMaria | 25 | 7 | 18 | ||
| ANGOLA | 10 | 10 1 | |||
| KFC | 9 | 9 | |||
| Pizza Hut | 1 | 1 | |||
| Other Locations - Franchise Restaurants | 8 | $\overline{1}$ | $\overline{2}$ | $\overline{1}$ | |
| Pans Italy | 8 | 1 | $\overline{2}$ | $\overline{7}$ | |
| Total Equity Restaurants | 502 | 16 | $\bf{0}$ | 22 | 496 |
| Total Franchise Restaurants | 144 | 4 | $\bf{0}$ | 18 | 130 |
| TOTAL | 646 | 20 | $\bf{0}$ | 40 | 626 |
The consolidated net income of 9M amounted to Eur 23.8 million euros. Excluding the effect of the application of IAS29, the net result would be 22.6 million euros, 0.7 million euros higher than the same period of 2017.
Gross margin was 75.5% of turnover, 1.6p.p lower than the previous year. This reduction results from a higher weight of merchandise sales. Without this effect the gross margin was 76.9% (9M17: 77.1%).
Staff costs increased 0.3%, which represents a decrease to 29.9% of the turnover (9M17: 30.1%).
External Supplies and services: decrease of 0.4%, representing 32.8% of turnover, 0.5 pp less than in 9M 2017, despite the rents increase in new airport concessions, that fully support the cost but are not in full operation.
Other operating income amounted to 7.0 million euros, which represents a slight reduction of 1.6% over the same period of the previous year.
Other operating costs amounted to 1.5 million euros, of which 0.7 million in fees and taxes and 0.4 million euros to operating loan impairments.
Therefore EBITDA amounted to 48.3 million euros, a decrease of 3.0% over 9M17, strongly influenced by the reduction of activity at Barcelona and activity in Angola, as stated above.
Consolidated EBITDA margin stood at 14.4% of turnover, a decresae of 0.6 pp compared to the same period of 2017 (15.0%).
Consolidated EBIT margin was 8.9% of turnover, corresponding to an operating result of 29.8 million euros, which represents an increase of 0.2p.p compared to the same period of 2017, with 28.8 million of euros. To this result contributed a reduction in the value of depreciation, which represents 5.5% of turnover (6.3% in the first nine months of 2017). This reduction mainly results from the extension of the operation at the Barcelona airport for a period after the final data of the concession agreement in December 2017.
Consolidated Net Financing cost were 2.8 million euros, around 0.8 million euros lower than 9M17. However it should be noted that in the first half of 2018 this item includes around 0.9 million euros corresponding to the account of the discounted value of the collateral provided in Spain, namely those required by the signed agreements into for the new concessions.
Average cost of loans, which stood at 2.2%, lower than 9M17 (2.5%), due to the reduction of interest rates and the dilution of the weight of the debt in Angola.
The income tax for the period amounts to 4.5 million euros, which represents an effective rate of 16%, lower than the nominal rate, mainly due to the tax benefits of 2.4 million euros, under of the Investment Tax Code (CFI).
Total Assets amounted to 438 million euros and equity stood at 203.6 million euros, representing 46,4% of assets.
CAPEX reached 18.5 million euros. About 11.2 million euros for the investment incurred in new restaurant openings and works in progress, the remainder for the refurbishment and reconversion of some restaurants.
Net debt at 30th September 2018 amounted to 69.5 million euros, 13.6 milion euros lower than at the end of 2017.
By resolution of the General Shareholders Meeting held on 14th May 2018, the share capital increased from 30,000,000 to 36,000,000 euros through the incorporation of reserves. This operation was registered at the Commercial Registry of Oporto at 15th June 2018 and the allocation of the new shares took place last July.
As a result of the capital increase, the company held 3,599,926 own shares. By purchasing the remaining fractions, the company acquired 56 new shares at the average price of Euro 9.73, holding a 9.9999% of the share capital, acquired by 11.180.517 euros, corresponding to an average price per share of Euro 3.11.
Risks and Uncertainties
In Angola, the steps taken to improve payments abroad are helping to soften one of the major risks that has been building up over the last three years.
The evolution of the Angolan currency and economy is an uncertainty, which could lead to a consumption and sales decrease in the restaurants.
In Iberia, it is expected a sales growth pace in line with what is has seen in recent months.
In Angola, is expected a decrease in consumption with the inherent drop in transactions. The inability to increase prices at the pace of devaluation, will lead to a decrease in the profitability of our operations. We expect that the devaluation rate may slow down in the coming months.
Following the contests won in the concessions in Spain, it is expected that the opening of 11 units will take place until the end of the year at the airports of Barcelona, Gran Canaria and Malaga until the end of 2018. The remaining 17 units wil only have definitive opening next year.
The group remains attentive to expansion opportunities in Travel. We presented a proposal to Alicante airport tender, currently under evaluation.
In terms of openings outside the concession areas, we will try to remain the rhythm of the expansion plans of recent years, with the opening of more than a dozen restaurants.
In the first semester, an agreement between Pizza Hut ans Telepizza was announced, under which Pizza Hut will assign the rights associated with a master franchise in the Iberian Peninsula and throughout Latin America and South America, exception Brazil. As result, Ibersol will become directly related to Telepizza and only indirectly to Pizza Hut.
Ibersol will manitain the operation of the existing restaurants on the contracted terms and will have to agree with Telepizza the future development of new locations and renewals of the contracts, when they occur.
As reported in the first quarter, the business is still dependent on approvals from different authorities. Despite this fact we are in negotiations with Telepizza to define the future relationship framework.
Porto, 22nd November 2018
______________________________ António Carlos Vaz Pinto de Sousa
______________________________ António Alberto Guerra Leal Teixeira
______________________________
Juan Carlos Vázquez-Dodero
(i) the consolidated financial statements of Ibersol SGPS SA, referring to the first nine months of 2018 were drawn up in compliance with applicable accounting rules and provide a true and suitable picture of the assets and liabilities, financial situation and results of Ibersol SGPS, SA and the companies included in consolidation perimeter, and
(ii) the interim management report includes a fair review of the important events that have occurred in the period, the evolution of business performance and the position of all the companies included in consolidation.
Porto, 22nd November 2018
António Carlos Vaz Pinto Sousa Chairman of the Boards of Director António Alberto Guerra Leal Teixeira Member of the Board of Directors Juan Carlos Vázquez-Dodero Member of the Board of Directors
30th September 2018
| ASSETS | Notes | 30/09/2018 (unaudited) |
31/12/2017 |
|---|---|---|---|
| Non-current | |||
| Tangible fixed assets | 8 | 191 175 611 | 197 972 217 |
| Goodwill | 9 | 92 862 786 | 92 862 786 |
| Intangible assets | 9 | 35 124 311 | 35 115 966 |
| Financial investments - joint controlled subsidiaries | 2 451 660 | 2 420 386 | |
| Available-for-sale financial assets | 198 620 | 233 108 | |
| Other financial assets | 19 | 16 902 763 | 17 823 906 |
| Other non-current assets | 16 | 14 935 320 | 6 335 385 |
| Total non-current assets | 353 651 071 | 352 763 754 | |
| Current | |||
| Stocks | 10 715 984 | 12 089 907 | |
| Cash and bank deposits | 43 844 987 | 34 902 883 | |
| Income tax receivable | 2 895 996 | 5 046 070 | |
| Other financial assets | 19 | 2 434 853 | 5 162 755 |
| Other current assets | 16 | 24 615 370 | 19 823 562 |
| Total current assets | 84 507 190 | 77 025 177 | |
| Total Assets | 438 158 260 | 429 788 931 | |
| EQUITY AND LIABILITIES | |||
| EQUITY Capital and reserves attributable to shareholders |
|||
| Share capital | 10 | 36 000 000 | 30 000 000 |
| Own shares | -11 180 517 | -11 179 969 | |
| Share prize | 469 937 | 469 937 | |
| Legal reserves | 755 581 | 263 001 | |
| Conversion Reserves | -6 994 082 | -2 012 886 | |
| Other Reserves & Retained Results | 160 461 724 | 139 507 205 | |
| Net profit in the year | 23 680 883 | 30 849 460 | |
| Total Shareholders Equity | 203 193 526 | 187 896 748 | |
| Non-controlling interest | 466 606 | 723 445 | |
| Total Equity | 203 660 132 | 188 620 193 | |
| LIABILITIES Non-current |
|||
| Loans | 91 190 685 | 107 687 759 | |
| Deferred tax | 7 817 244 | 9 132 498 | |
| Provisions | 4 489 724 | 4 489 724 | |
| Derivative financial instrument | 217 867 | 235 455 | |
| Other non-current liabilities | 157 556 | 179 192 | |
| Total non-current liabilities | 103 873 076 | 121 724 628 | |
| Current | |||
| Loans | 41 485 814 | 33 326 982 | |
| Accounts payable to suppliers and accrued costs | 73 934 248 | 67 522 339 | |
| Income tax payable Other current liabilities |
16 | 2 079 864 13 125 126 |
324 744 18 270 045 |
| Total current liabilities | 130 625 052 | 119 444 110 | |
| Total Liabilities | 234 498 128 | 241 168 738 | |
| Total Equity and Liabilities | 438 158 260 | 429 788 931 | |
| Notes | 30/09/2018 (unaudited) |
30/09/2017 (unaudited) |
|
|---|---|---|---|
| Operating Income | |||
| Sales | 6 | 332 366 730 | 328 811 926 |
| Rendered services | 6 | 3 333 699 | 3 699 549 |
| Other operating income | 7 | 7 055 399 | 7 170 275 |
| Total operating income | 342 755 828 | 339 681 750 | |
| Operating Costs | |||
| Cost of sales | 82 157 744 | 76 132 002 | |
| External supplies and services | 110 257 516 | 110 685 505 | |
| Personnel costs | 100 467 454 | 100 168 032 | |
| Amortisation, depreciation and impairment losses of TFA and IA | 8 e 9 | 18 568 399 | 21 042 868 |
| Other operating costs | 1 541 698 | 2 873 195 | |
| Total operating costs | 312 992 811 | 310 901 602 | |
| Operating Income | 29 763 017 | 28 780 148 | |
| Net financing cost | 17 | 2 861 073 | 3 668 939 |
| Gains (losses) in joint controlled subsidiaries - Equity method | 31 275 | 24 126 | |
| Gains (losses) in financial investments | -370 000 | - | |
| Gains (losses) on Net monetary position | 8 e 9 | 1 778 155 | - |
| Profit before tax | 28 341 374 | 25 135 335 | |
| Income tax expense | 18 | 4 472 683 | 3 290 877 |
| Net profit | 23 868 691 | 21 844 458 | |
| Other comprehensive income: Change in currency conversion reserve (net of tax and that can be recycled for results) |
|||
| -4 981 196 | 19 413 | ||
| TOTAL COMPREHENSIVE INCOME | 18 887 495 | 21 863 871 | |
| Net profit attributable to: Owners of the parent |
23 680 883 | 21 474 681 | |
| Non-controlling interest | 187 808 | 369 777 | |
| 23 868 691 | 21 844 458 | ||
| Total comprehensive income attributable to: | |||
| Owners of the parent | 18 699 687 | 21 494 094 | |
| Non-controlling interest | 187 808 | 369 777 | |
| 18 887 495 | 21 863 871 | ||
| Earnings per share: | 10 | ||
| Basic | 0,73 | 0,66 | |
| Diluted | 0,73 | 0,66 |
| Notes | 3rd TRIMESTER (unaudited) | ||
|---|---|---|---|
| Operating Income | |||
| Sales | 123 471 094 | 126 840 515 | |
| Rendered services | 904 595 | 1 319 855 | |
| Other operating income | 2 560 652 | 2 234 829 | |
| Total operating income | 126 936 341 | 130 395 199 | |
| Operating Costs | |||
| Cost of sales | 30 929 207 | 29 080 190 | |
| External supplies and services | 39 404 556 | 41 002 430 | |
| Personnel costs | 34 282 768 | 35 340 676 | |
| Amortisation, depreciation and impairment losses of TFA and IA | 6 150 700 | 6 970 644 | |
| Other operating costs | 494 058 | 813 102 | |
| Total operating costs | 111 261 289 | 113 207 042 | |
| Operating Income | 15 675 052 | 17 188 157 | |
| Net financing cost | 588 602 | 1 214 371 | |
| Gains (losses) in joint controlled subsidiaries - Equity method | 7 709 | -1 075 | |
| Gains (losses) in financial investments | - | - | |
| Gains (losses) on Net monetary position | 897 320 | - | |
| Profit before tax | 15 991 479 | 15 972 711 | |
| Income tax expense | 2 989 116 | 3 809 189 | |
| Net profit | 13 002 363 | 12 163 522 | |
| Other comprehensive income: | |||
| Change in currency conversion reserve (net of tax and that can be | |||
| recycled for results) | -1 218 929 | 11 009 | |
| TOTAL COMPREHENSIVE INCOME | 11 783 434 | 12 174 531 | |
| Net profit attributable to: | |||
| Owners of the parent | 12 940 216 | 11 974 132 | |
| Non-controlling interest | 62 147 | 189 390 | |
| 13 002 363 | 12 163 522 | ||
| Total comprehensive income attributable to: | |||
| Owners of the parent | 11 721 287 | 11 985 141 | |
| Non-controlling interest | 62 147 | 189 390 | |
| 11 783 434 | 12 174 531 | ||
| Earnings per share: | |||
| Basic | 0,40 | 0,37 | |
| Diluted | 0,40 | 0,37 |
(value in euros)
| Ass ign ed har eho lde to s rs |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Not e |
Sha re C api tal |
Ow n Sha res |
Sha re priz e |
Leg al Res erv es |
Con sio ver n Res erv es |
Oth er Res & erv es Ret ain ed Res ults |
Net Pro fit |
Tot al p nt are ity equ |
Inte hat ts t res do not tro l con |
Tot al Equ ity |
|
| Bal n 1 Ja ry 2 017 anc e o nua Cha s in the riod : |
24 000 00 0 |
11 179 34 8 - |
469 93 7 |
1 | 2 0 02 180 - |
117 05 2 5 48 |
23 387 47 1 |
151 72 8 4 29 |
333 39 9 |
152 06 1 82 8 |
|
| nge pe App lica tion of the lida ted fit f 20 16: co nso pro rom |
|||||||||||
| T sfe nd ined ults r to reta ran res erv es a res |
263 00 0 |
23 124 47 1 |
23 387 47 1 - |
- | - | ||||||
| Sha apit al in re c cre ase |
6 0 00 000 |
-6 0 00 000 |
- | - | |||||||
| Con sion An gola ver res erv es - |
19 4 13 |
19 4 13 |
19 4 13 |
||||||||
| Acq uisi tion / (d ispo sal) of sh own are s Net lida ted inc e in the nin h pe riod ont co nso om e m |
-62 1 |
-62 1 |
-62 1 |
||||||||
| end ed 30 Sep ber 20 17 tem on |
21 474 68 1 |
21 474 68 1 |
369 77 7 |
21 844 45 8 |
|||||||
| Tot al c han in the riod ges pe |
6 0 00 000 |
62 1 - |
- | 263 00 0 |
19 4 13 |
17 124 47 1 |
1 9 12 7 90 - |
21 493 47 3 |
369 77 7 |
21 863 25 0 |
|
| Net fit pro |
21 68 474 1 |
21 68 474 1 |
369 77 7 |
21 844 8 45 |
|||||||
| Tot al c hen sive inc om pre om e Tra ctio wit h c api tal s in the riod nsa ns ow ner pe App lica tion of the lida ted fit f 20 16: co nso rom |
21 494 09 4 |
369 77 7 |
21 863 87 1 |
||||||||
| pro P aid divi den ds |
-2 1 60 010 |
2 1 60 010 |
2 1 60 010 |
||||||||
| - | - | - | - | - | -2 1 60 010 |
- | - -2 1 60 010 |
- | - -2 1 60 010 |
||
| Bal n 3 0 S ber 20 17 ept anc e o em |
30 000 00 0 |
11 179 96 9 - |
469 93 7 |
263 00 1 |
1 98 2 7 67 - |
132 01 7 0 09 |
21 474 68 1 |
171 06 1 89 2 |
703 17 6 |
171 76 5 0 68 |
|
| Bal n 1 Ja ry 2 018 anc e o nua |
30 000 00 0 |
11 179 96 9 - |
469 93 7 |
263 00 1 |
2 0 12 8 86 - |
139 50 7 2 05 |
30 849 46 0 |
187 89 6 7 47 |
723 44 5 |
188 62 0 1 92 |
|
| S 9 IFR ch ang e |
-70 2 3 58 |
702 35 8 - |
702 35 8 - |
||||||||
| IFR S 1 5 c han ge |
- | - | - | ||||||||
| Cha s in the riod nge pe : |
|||||||||||
| App lica tion of the lida ted fit f 20 17: co nso pro rom |
|||||||||||
| T sfe nd ined ults r to reta ran res erv es a res |
492 58 0 |
30 356 88 0 |
30 849 46 0 - |
- | - | ||||||
| Sha apit al in re c cre ase |
6 0 00 000 |
-6 0 00 000 |
- | - | |||||||
| Con sion An gola ver res erv es - uisi tion of sh |
-54 8 |
-4 9 81 196 |
-4 9 81 196 -54 |
4 9 81 196 - -54 |
|||||||
| Acq / (d ispo sal) own are s Net lida ted inc e in the nin h pe riod ont co nso om e m |
8 | 8 | |||||||||
| end ed 30 Sep ber 20 18 tem on |
23 680 88 3 |
23 680 88 3 |
187 80 8 |
23 868 69 1 |
|||||||
| Tot al c han in the riod ges pe |
6 0 00 000 |
548 - |
- | 492 58 0 |
4 9 81 196 - |
24 356 88 0 |
7 1 68 577 - |
18 6 99 139 |
187 80 8 |
18 8 86 947 |
|
| Net fit pro |
23 680 88 3 |
23 680 88 3 |
187 80 8 |
23 868 69 1 |
|||||||
| Tot al c hen sive inc om pre om e Tra ctio wit h c api tal s in the riod nsa ns ow ner pe |
18 6 99 687 |
187 80 8 |
18 8 87 495 |
||||||||
| App lica tion of the lida ted fit f 20 17: co nso pro rom |
|||||||||||
| P aid divi den ds |
-2 7 00 006 |
2 7 00 006 - |
444 64 7 - |
3 1 44 653 - |
|||||||
| - | - | - | - | - | -2 7 00 006 |
- | -2 7 00 006 |
444 64 7 - |
3 1 44 653 - |
||
| Bal n 3 0 S ept ber 20 18 anc e o em |
36 000 00 0 |
11 180 51 7 - |
469 93 7 |
755 58 1 |
6 9 94 082 - |
160 46 1 72 0 |
23 680 88 3 |
203 19 3 5 21 |
466 60 5 |
203 66 0 1 27 |
(value in euros)
| Nine months period ending on | |||
|---|---|---|---|
| September 30 (unaudited) | |||
| Note | 2018 | 2017 | |
| Cash Flows from Operating Activities | |||
| Receipts from clients | 333 029 070 | 332 146 083 | |
| Payments to supliers | -173 647 547 | -184 548 568 | |
| Staff payments | -99 575 291 | -76 998 068 | |
| Payments/receipt of income tax | -1 135 401 | -1 306 475 | |
| Other paym./receipts related with operating activities | -19 172 772 | -8 536 016 | |
| Flows from operating activities (1) | 39 498 059 | 60 756 956 | |
| Cash Flows from Investment Activities | |||
| Receipts from: | |||
| Financial investments | 139 763 | 19 049 | |
| Tangible fixed assets | 22 620 | 5 731 | |
| Intangible assets | |||
| Investment benefits | 85 272 | ||
| Interest received | 1 197 182 | 920 448 | |
| Dividends received | |||
| Other | 5 005 817 | ||
| Payments for: | |||
| Financial Investments | 1 627 536 | 64 600 | |
| Other financial assets | 2 907 912 | 3 126 100 | |
| Tangible fixed assets | 15 800 211 | 24 358 808 | |
| Intangible assests | 2 734 168 | 801 542 | |
| Other | 4 000 000 | ||
| Flows from investment activities (2) | -20 619 173 | -27 405 822 | |
| Cash flows from financing activities | |||
| Receipts from: | |||
| Loans obtained | 9 421 418 | 4 535 475 | |
| Sale of own shares | |||
| Payments for: | |||
| Loans obtained | 12 878 598 | 21 571 360 | |
| Amortisation of financial leasing contracts | 1 100 455 | 1 378 987 | |
| Interest and similar costs | 4 278 964 | 4 247 737 | |
| Dividends paid | 3 144 647 | 2 160 010 | |
| Acquisition of own shares | 548 | 621 | |
| Flows from financing activities (3) | -11 981 794 | -24 823 240 | |
| Change in cash & cash equivalents (4)=(1)+(2)+(3) | 6 897 092 | 8 527 894 | |
| Perimeter changes effect | |||
| Exchange rate differences effect | 1 424 | ||
| Cash & cash equivalents at the start of the period | 34 882 539 | 37 782 889 | |
| Cash & cash equivalents at end of the period | 41 779 631 | 46 312 207 |
(Values in euros)
IBERSOL, SGPS, SA ("Company" or "Ibersol") has its 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 626 units in the restaurant segment through the brands Pizza Hut, Pasta Caffé, Pans & Company, Ribs, FresCo, SantaMaria, Kentucky Fried Chicken, Burger King, O' Kilo, Roulotte, Quiosques, Pizza Móvil, Miit, Sol, Sugestões e Opções, Silva Carvalho Catering e Palace Catering, coffe counters and other concessions. The group has 496 units which it operates and 130 units under a franchise contract. Of this universe, 291 are headquartered in Spain, of which 169 are own establishments and 122 are franchised establishments, and 10 in Angola.
Ibersol is a public limited company listed on the Euronext of Lisbon.
Ibersol SGPS parent company is ATPS - SGPS, S.A ..
The main accounting policies applied in preparing these consolidated financial statements are described below.
These consolidated interim financial statements were prepared according to the international standard nº. 34 – Interim Financial Report, and therefore do not include all the information required by the annual financial statements, and should be read together with the company's financial statements for the period ended 31 December 2017.
The consolidated interim financial statements have been prepared in accordance with the historical cost principle, changed to fair value in the case of derivative financial instruments.
The accounting policies applied on 30 September 2018 are identical to those applied for preparing the financial statements of 30 September and 31 December 2017, except for the exchange currency differences included in other income / other operating costs and excluded from net financing cost.
The Group adopted for the first time, on January 1, 2018, the new IFRS 15 - Revenue contracts and IFRS 9 - Financial Instruments, without restatement of the comparative financial statements.
IFRS 15 applies to all revenue arising from contracts with customers (except for contracts covered by other standards), implying amendments to several IAS / IFRS / IFRIC / SIC and the repeal of IAS 11 and 18, IFRIC 13, 15 and 18 and SIC 31.
The main principle of the new standard is that an entity must recognize the revenue to represent the transfer to customers of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for such goods or services, establishing a five-step methodology for the recognition of revenue:
Ibersol applied this new standard as of January 1, 2018, using the modified retrospective method, which establishes that the cumulative effect of the adoption of the standard is recognized in the results carried over to that date. The adoption of IFRS 15 did not result in any effect on the retained earnings of the Group.
The application of the methodology to contracts with clients concluded the following:
In restaurant and merchandise sales there is only one performance obligation, so revenue is recognized immediately, with the delivery of the goods to the customer.
In accordance with IFRIC 13, in sales situations in restaurants where customer discounts are promised to the customer through the customer loyalty program, the fair value of the benefits attributed to customers was estimated, with the recognition of the revenue being deferred until when the obligation is satisfied or expire.
In franchise contracts, the Group has the obligation to grant the customer the right to use the brand and its operating know-how, in a certain place and for an agreed period of time, and the customer is obliged to pay a counterpart, usually translated into:
initial entry value, corresponding to opening rights;
monthly operating royalties, the method of calculation of which is previously defined in the contract (fixed amount previously established or amount determined periodically by applying a percentage to the value of sales made by the client);
monthly quota for advertising purposes.
If there is an initial value of entry, it is accounted as a deferred income, so that the recognition of the respective revenue is effected throughout the life of the contract.
The recognition of the revenue corresponding to the monthly operating royalties and the monthly advertising quotas is carried out immediately, matching the fulfillment of performance obligations.
IFRS 9 introduced new requirements for the classification and measurement of financial assets, financial liabilities and for some contracts for the purchase or sale of non-financial assets. This standard replaces the requirements of IAS 39.
IFRS 9 replaces the model of losses incurred in IAS 39 with an expected loss model.
The Group adopted IFRS 9 assuming the option at the time of transition by the modified retrospective approach, without restatement of comparative information.
The group applied IFRS 9 on the Angolan State Treasury Bonds (TB's), financial assets of the group.
The impact at the time of transition and in the period are shown in Note 19.
There where no substantial differences between accounting estimates and judgments applied on 31 December 2017 and the accounting values considered in the nine months period ended on the 30 September 2018.
| Company | Head Office | % Shareholding | ||
|---|---|---|---|---|
| Sep/18 | Sep/17 | Dec/17 | ||
| Parent company | ||||
| Ibersol SGPS, S.A. | Porto | parent | parent | parent |
| Subsidiary companies | ||||
| Iberusa Hotelaria e Restauração, S.A. | Porto | 100% | 100% | 100% |
| Ibersol Restauração, S.A. | Porto | 100% | 100% | 100% |
| Ibersande Restauração, S.A. | Porto | 100% | 100% | 100% |
| Ibersol Madeira e Açores Restauração, S.A. | Funchal | 100% | 100% | 100% |
| Ibersol - Hotelaria e Turismo, S.A. | Porto | 100% | 100% | 100% |
| Iberking Restauração, S.A. | Porto | 100% | 100% | 100% |
| Iberaki Restauração, S.A. | Porto | 100% | 100% | 100% |
| Restmon Portugal, Lda | Porto | 61% | 61% | 61% |
| Vidisco, S.L. | Vigo - Spain | 100% | 100% | 100% |
| Inverpeninsular, S.L. | Vigo - Spain | 100% | 100% | 100% |
| (d) Ibergourmet Produtos Alimentares, S.A. | Porto | - | - | 100% |
| Ferro & Ferro, Lda. | Porto | 100% | 100% | 100% |
| Asurebi SGPS, S.A. | Porto | 100% | 100% | 100% |
| Charlotte Develops, SL | Madrid-Spain | 100% | 100% | 100% |
| Firmoven Restauração, S.A. | Porto | 100% | 100% | 100% |
| IBR - Sociedade Imobiliária, S.A. | Porto | 100% | 100% | 100% |
| Eggon SGPS, S.A. | Porto | 100% | 100% | 100% |
| Anatir SGPS, S.A. | Porto | 100% | 100% | 100% |
| Lurca, SA | Madrid-Spain | 100% | 100% | 100% |
| Sugestões e Opções-Actividades Turísticas, S.A | Porto | 100% | 100% | 100% |
| (f) Resboavista- Restauração Internacional, Lda | Porto | - | 100% | 100% |
| José Silva Carvalho Catering, S.A | Porto | 100% | 100% | 100% |
| (a) Iberusa Central de Compras para Restauração ACE | Porto | 100% | 100% | 100% |
| (b) Vidisco, Pasta Café Union Temporal de Empresas | Vigo - Spain | 100% | 100% | 100% |
| Maestro - Serviços de Gestão Hoteleira, S.A. | Porto | 100% | 100% | 100% |
| SEC - Eventos e Catering, S.A. | Porto | 100% | 100% | 100% |
| IBERSOL - Angola, S.A. | Luanda - Angola | 100% | 100% | 100% |
| HCI - Imobiliária, S.A. | Luanda - Angola | 100% | 100% | 100% |
| (d) Ibergourmet Produtos Alimentares (ex-Gravos 2012, S.A.) Porto | 100% | 100% | 100% | |
| Lusinver Restauracion, S.A. | Vigo - Spain | 100% | 100% | 100% |
| The Eat Out Group S.L.U. | Barcelona - Spain | 100% | 100% | 100% |
| Pansfood, S.A.U. | Barcelona - Spain | 100% | 100% | 100% |
| Foodstation, S.L.U | Barcelona - Spain | 100% | 100% | 100% |
| (c) Dehesa de Santa Maria Franquicias, S.L. | Barcelona - Spain | 50% | 50% | 50% |
| ( e) Pansfood Italia, S.R.L. | Barcelona - Spain | - | 100% | 100% |
| Companies controlled jointly | ||||
| UQ Consult - Serviços de Apoio à Gestão, S.A. | Porto | 50% | 50% | 50% |
(a) Company consortium agreement that acts as the Purchasing and Logistics Centre and provides the respective restaurants with raw materials and maintenance services. (b) Union Temporal de Empresas which was founded in 2005 and that during the year functioned as the Purchasing Centre in Spain by providing raw materials to the respective restaurants.
( c) Although the parent company owns 50% of the voting rights, there is control of the subsidiary Dehesa.
(d) As a result of the merger of the subsidiary Ibergourmet into Gravos, that adopts the corporate name of the merged subsidiary.
(e) Dissolution of the company occurred in the first three months of 2018. (f) Merge of the subsidiary Resboavista into José Silva Carvalho Catering, SA.
The subsidiary companies were included in the consolidation by the full consolidation method. UQ Consult, the Jointly controlled entity, was subject to the equity method according to the group's shareholding in this company.
The shareholding percentages in the indicated companies imply an identical percentage in voting rights.
In the nine months period ended on 30 September 2018 there was no acquisition of subsidiaries.
In the nine months period ended on 30 September 2018 there was no disposals of subsidiaries.
Ibersol Administration monitors the business based on the following segmentation:
| SEGMENT | BRANDS | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Restaurants | Pizza Hut | Pasta Caffe | Pizza Movil | FresCo | Ribs | StaMaria | |||
| Counters | KFC | O'Kilo | Miit | Burguer King | Pans & C.ª | Coffee Counters | |||
| Concessions | |||||||||
| and catering | Sol (SA) | Concessions | Catering | Convenience stores | Travel |
The results per segment in the nine months period ended 30 September 2018 and 2017 were as follows:
| 30 September 2018 | Restaurants | Counters | Concessions and Catering |
Other, write off and adjustments |
Total Group |
|---|---|---|---|---|---|
| Inter-segment client | - | - | - | - | - |
| External client | 81 737 615 | 154 157 284 | 99 520 502 | 285 028 | 335 700 429 |
| Turnover | 81 737 615 | 154 157 284 | 99 520 502 | 285 028 | 335 700 429 |
| Royalties | 3 066 816 | 6 064 625 | 1 039 045 | - | 10 170 486 |
| Rents and Condominium | 8 328 615 | 14 910 106 | 29 872 465 | - | 53 111 186 |
| Coste of sales | 19 223 223 | 44 144 387 | 18 790 134 | - | 82 157 744 |
| Operating cash-flow (EBITDA) | 11 781 695 | 21 529 411 | 15 020 309 | - | 48 331 416 |
| Amortization, depreciation and impairment losses | 4 557 650 | 10 348 875 | 2 910 479 | 751 395 | 18 568 399 |
| Operating income (EBIT) | 7 224 045 | 11 180 536 | 12 109 830 | -751 395 | 29 763 017 |
| 30 September 2017 | Restaurants | Counters | Concessions and Catering |
Other, write off and adjustments |
Total Group |
|---|---|---|---|---|---|
| Inter-segment client | - | - | - | - | - |
| External client | 76 408 685 | 148 420 008 | 106 854 273 | 828 510 | 332 511 475 |
| Turnover | 76 408 685 | 148 420 008 | 106 854 273 | 828 510 | 332 511 475 |
| Royalties | 2 843 846 | 5 839 375 | 1 331 242 | - | 10 014 464 |
| Rents and Condominium | 8 204 876 | 14 711 469 | 31 679 897 | - | 54 596 242 |
| Coste of sales | 15 497 815 | 39 239 468 | 21 394 719 | - | 76 132 002 |
| Operating cash-flow (EBITDA) | 11 985 496 | 23 647 308 | 14 190 212 | - | 49 823 016 |
| Amortization, depreciation and impairment losses | 5 294 945 | 11 130 302 | 4 288 019 | 329 602 | 21 042 868 |
| Operating income (EBIT) | 6 690 551 | 12 517 006 | 9 902 193 | -329 602 | 28 780 148 |
On September 30, 2018 and 2017 income and non-current assets by geography is presented as follows:
| 30 September 2018 | Portugal (1) | Spain | Grupo |
|---|---|---|---|
| Restaurants | 178 225 402 | 144 969 219 | 323 194 621 |
| Merchandise | 598 774 | 8 573 335 | 9 172 109 |
| Rendered services | 198 136 | 3 135 563 | 3 333 699 |
| Total sales and services | 179 022 312 | 156 678 117 | 335 700 429 |
| Tangible fixed and intangible assets | 168 687 357 | 57 612 565 | 226 299 922 |
| Goodwill | 7 605 482 | 85 257 304 | 92 862 786 |
| Financial investments - joint controlled subsidiaries | 2 451 660 | - | 2 451 660 |
| Available-for-sale financial assets | 198 620 | - | 198 620 |
| Other financial assets | 16 902 763 | - | 16 902 763 |
| Other non-current assets | - | 14 935 320 | 14 935 320 |
| Total non-current assets | 195 845 882 | 157 805 189 | 353 651 071 |
| 30 September 2017 | Portugal (1) | Spain | Grupo |
| Restaurants | 166 833 118 | 160 021 778 | 326 854 896 |
| Merchandise | 895 996 | 1 061 034 | 1 957 030 |
| Rendered services | 149 793 | 3 549 756 | 3 699 549 |
| Total sales and services | 167 878 907 | 164 632 568 | 332 511 475 |
| Tangible fixed and intangible assets | 149 790 190 | 42 840 730 | 192 630 920 |
| Goodwill | 7 605 482 | 103 551 176 | 111 156 658 |
| Financial investments - joint controlled subsidiaries | 2 441 757 | - | 2 441 757 |
| Available-for-sale financial assets | 486 092 | - | 486 092 |
| Other financial assets | 8 376 056 | - | 8 376 056 |
| Other non-current assets | - | 6 522 718 | 6 522 718 |
| Total non-current assets | 168 699 577 | 152 914 624 | 321 614 201 |
(1) Due to the small size of its operations Angola is included in Portugal segment.
No unusual facts took place during the nine months period ended 30 September 2018.
In the restaurant segment season activity is characterized by an increase of sales in the months of July, August and December, witch leads to a greater activity on the third trimester of the year compared with the first semester. The previous years have evidenced that, in comparable perimeter and with an equal distribution of openings and closings, in the period that understands the nine first months of the year, sales are about 75% of annual volume and, with the dilution effect of the fixed costs with the increase of the activity, the operating income represents about 85%.
In the nine months period ended 30 September 2018 and in the year ending on 31 December 2017, entries in the value of tangible fixed assets, depreciation and accumulated impairment losses were as follows:
| Other tangible | Tangible Assets | |||||
|---|---|---|---|---|---|---|
| Land | Buildings | Equipment | fixed Assets | in progress | Total | |
| 1 January 2017 | ||||||
| Cost | 11 342 041 | 220 212 458 | 117 019 630 | 22 193 978 | 1 500 446 | 372 268 553 |
| Accumulated depreciation | 74 637 | 80 298 255 | 87 254 431 | 15 115 597 | - | 182 742 920 |
| Accumulated impairment | - | 10 319 953 | 1 082 628 | 64 515 | - | 11 467 096 |
| Net amount | 11 267 404 | 129 594 249 | 28 682 571 | 7 013 867 | 1 500 446 | 178 058 537 |
| 31 December 2017 | ||||||
| Initial net amount | 11 267 404 | 129 594 249 | 28 682 571 | 7 013 867 | 1 500 446 | 178 058 537 |
| Changes in consolidat perimeter | - | - | - | - | - | - |
| Hyperinflationary Economies (IAS 29) (1) | 4 080 348 | 8 651 564 | 3 298 994 | 847 509 | 128 459 | 17 006 874 |
| Currency conversion | -15 473 | -39 843 | -21 568 | -4 851 | -184 | -81 919 |
| Additions | 56 250 | 19 394 715 | 9 055 620 | 2 376 456 | 1 293 809 | 32 176 850 |
| Decreases | - | 917 791 | 61 047 | -4 228 | 159 773 | 1 134 383 |
| Transfers | - | 1 041 722 | 45 576 | 7 795 | -1 086 883 | 8 210 |
| Depreciation in the year | 63 815 | 16 988 782 | 9 279 936 | 1 559 785 | - | 27 892 318 |
| Deprec. by changes in the perimeter | - | - | - | - | - | - |
| Impairment in the year | - | 169 635 | - | - | - | 169 635 |
| Impairment reversion | - | - | - | - | - | - |
| Final net amount | 15 324 714 | 140 566 200 | 31 720 210 | 8 685 219 | 1 675 874 | 197 972 217 |
| 31 December 2017 | ||||||
| Cost | 15 551 381 | 243 311 373 | 127 906 062 | 25 621 216 | 1 675 874 | 414 065 908 |
| Accumulated depreciation | 226 667 | 92 908 055 | 95 172 615 | 16 877 084 | - | 205 184 420 |
| Accumulated impairment | - | 9 837 119 | 1 013 238 | 58 914 | - | 10 909 271 |
| Net amount | 15 324 714 | 140 566 200 | 31 720 210 | 8 685 219 | 1 675 874 | 197 972 217 |
| Land | Buildings | Equipment | Other tangible fixed Assets |
Tangible Assets in progress |
Total | |
|---|---|---|---|---|---|---|
| 30 September 2018 | ||||||
| Initial net amount | 15 324 714 | 140 566 200 | 31 720 210 | 8 685 219 | 1 675 874 | 197 972 217 |
| Changes in consolidat perimeter | - | - | - | - | - | - |
| Hyperinflationary Economies (IAS 29) (1) | 585 506 | 846 823 | 221 134 | 43 836 | -42 137 | 1 655 162 |
| Currency conversion | -1 407 462 | -3 381 264 | -1 680 052 | -370 250 | -33 944 | -6 872 972 |
| Additions | - | 7 510 464 | 3 982 681 | 923 100 | 3 589 096 | 16 00 5 341 |
| Decreases | - | 490 548 | 642 552 | 15 360 | 133 757 | 1 282 217 |
| Transfers | - | 35 857 | 484 598 | 82 728 | -603 183 | - |
| Depreciation in the year | 13 607 | 10 081 593 | 5 046 423 | 1 160 297 | - | 16 301 920 |
| Deprec. by changes in the perim. | - | - | - | - | - | - |
| Impairment in the year | - | - | - | - | - | - |
| Impairment by changes in the perim. | - | - | - | - | - | - |
| Impairment reversion | - | - | - | - | - | - |
| Final net amount | 14 489 151 | 135 005 939 | 29 039 596 | 8 188 976 | 4 451 949 | 191 175 611 |
| 30 September 2018 | ||||||
| Cost | 14 718 547 | 238 508 596 | 125 572 998 | 25 870 168 | 4 451 949 | 409 122 258 |
| Accumulated depreciation | 229 397 | 93 995 563 | 95 593 064 | 17 622 743 | - | 207 440 767 |
| Accumulated impairment | - | 9 507 094 | 940 338 | 58 448 | - | 10 505 880 |
| Net amount | 14 489 150 | 135 005 939 | 29 039 596 | 8 188 977 | 4 451 949 | 191 175 611 |
(1) changes resulting from the application of IAS 29, hyperinflationary economy, on tangible fixed assets of the subsidiaries in Angola are presented as follows
| Restatement of Tangible Fixed Assets (TFA) 31/12/2017 Restatement of TFA for the nine months period ended on 30/09/2018 |
17 006 874 |
|---|---|
| Cost Accumulated depreciation |
3 387 392 -1 732 230 |
| Sub-total | 1 655 162 |
| Total | 18 662 036 |
In 2017, an investment of approximately 2.7 million euros was made in the central kitchen in Portugal. The remaining investment mainly concerns the opening of 11 Burger King units, 4 KFC units, the opening of the concession at Santa Maria Airport (Azores) and a concession in the group Eat Out.
In 2018, the investment relates mainly to the opening of 3 KFC units, 2 Pizza Hut, 1 Burguer King and 1 Ribs units and 9 Burguer King units to be opened during the year.
Goodwill and intangible assets are broken down as follows:
| Sep/18 | Dec/17 | |
|---|---|---|
| Goodwill | 92 862 786 | 92 862 786 |
| Intangible assets | 35 124 311 | 35 115 966 |
| 127 987 097 | 127 978 752 |
In the nine months period ended 30 September 2018 and in the year ending on 31 December 2017, entries in the value of intangible assets, amortization and accumulated impairment losses were as follows:
| Goodwill | Brands | Industrial property |
Other intangible Assets |
Intangible Assets in progress |
Total | |
|---|---|---|---|---|---|---|
| 1 January 2017 | ||||||
| Cost | 92 862 786 | 22 000 000 | 37 973 000 | 14 875 727 | 693 528 | 168 405 041 |
| Accumulated amortization | - | 183 333 | 22 597 027 | 12 252 079 | - | 35 032 440 |
| Accumulated impairment | - | - | 3 668 664 | 41 875 | - | 3 710 538 |
| Net amount | 92 862 786 | 21 816 667 | 11 707 309 | 2 581 773 | 693 528 | 129 662 064 |
| 31 December 2017 | ||||||
| Initial net amount | 92 862 786 | 21 816 667 | 11 707 309 | 2 581 773 | 693 528 | 129 662 064 |
| Hyperinflationary Economies (IAS 29) (1) | - | - | 368 432 | - | 538 852 | 907 284 |
| Currency conversion | - | - | -2 792 | - | -2 808 | -5 600 |
| Additions | - | - | 1 221 296 | - | 96 547 | 1 317 843 |
| Decreases | - | - | -178 | 22 024 | - | 21 845 |
| Transfers | - | - | 13 664 | - | -13 664 | - |
| Amortization in the year | - | 1 100 000 | 1 916 576 | 864 416 | - | 3 880 994 |
| Amortiz. by changes in the perimeter | - | - | - | - | - | - |
| Impairment in the year | - | - | - | - | - | - |
| Impairment by changes in the perimeter | - | - | - | - | - | - |
| Impairment reversion | - | - | - | - | - | - |
| Final net amount | 92 862 786 | 20 716 667 | 11 391 511 | 1 695 333 | 1 312 455 | 127 978 752 |
| 31 December 2017 | ||||||
| Cost | 92 862 786 | 22 000 000 | 40 254 584 | 13 873 100 | 1 312 455 | 170 302 926 |
| Accumulated amortization | - | 1 283 333 | 25 197 741 | 12 135 892 | - | 38 616 967 |
| Accumulated impairment | - | - | 3 665 332 | 41 875 | - | 3 707 207 |
| Net amount | 92 862 786 | 20 716 667 | 11 391 511 | 1 695 333 | 1 312 455 | 127 978 752 |
| Goodwill | Brands | Industrial property |
Other intangible Assets |
Assets in progress |
Total | |
|---|---|---|---|---|---|---|
| 30 September 2018 | ||||||
| Initial net amount | 92 862 786 | 20 716 667 | 11 391 511 | 1 695 333 | 1 312 455 | 127 978 752 |
| Changes in consolidat. perimeter | - | - | - | - | - | - |
| Hyperinflationary Economies (IAS 29) (1) | - | - | 42 262 | - | 80 732 | 122 994 |
| Currency conversion | - | - | -219 353 | - | -258 256 | -477 609 |
| Additions | - | - | 808 259 | 10 000 | 1 694 222 | 2 512 481 |
| Decreases | - | - | 37 899 | - | 3 670 | 41 569 |
| Transfers | - | - | - | - | - | - |
| Amortization in the year | - | 825 000 | 1 006 949 | 276 004 | - | 2 107 953 |
| Amortiz. by changes in the perimeter | - | - | - | - | - | - |
| Impairment in the year | - | - | - | - | - | - |
| Impairm. by changes in the perimeter | - | - | - | - | - | - |
| Impairment reversion | - | - | - | - | - | - |
| Final net amount | 92 862 786 | 19 891 667 | 10 977 831 | 1 429 329 | 2 825 483 | 127 987 097 |
| 30 September 2018 | ||||||
| Cost | 92 862 786 | 22 000 000 | 40 546 331 | 13 209 569 | 2 825 483 | 171 444 170 |
| Accumulated amortization | - | 2 108 333 | 25 903 166 | 11 738 364 | - | 39 749 865 |
| Accumulated impairment | - | - | 3 665 332 | 41 875 | - | 3 707 207 |
| Net amount | 92 862 786 | 19 891 667 | 10 977 833 | 1 429 330 | 2 825 483 | 127 987 097 |
(1) changes resulting from the application of IAS 29, the hyperinflationary economy, on intangible assets of the subsidiaries in Angola are as follows:
| Restatement of Intangible Assets (IA) 31/12/2017 | 907 284 |
|---|---|
| Restatement of IA for the nine months period ended on 30/09/2018 | |
| Cost | 272 837 |
| Accumulated amortization | -149 843 |
| Sub-total | 122 994 |
| Total | 1 030 278 |
The distribution of goodwill allocated to segments is presented as follows:
| Sep/18 | Dec/17 | |
|---|---|---|
| Restaurants | 16 635 390 | 16 635 390 |
| Counters | 37 199 991 | 37 199 991 |
| Concessions and Catering | 38 847 684 | 38 847 684 |
| Other, write off and adjustments | 179 721 | 179 721 |
| 92 862 786 | 92 862 786 |
Income per share in the nine months period ended 30 September 2018 and 2017 was calculated as follows:
| Sep/18 | Sep/17 | |
|---|---|---|
| Profit payable to shareholders | 23 680 883 | 21 474 681 |
| Mean weighted number of ordinary shares issued | 36 000 000 | 36 000 000 |
| Mean weighted number of own shares | -3 599 982 | -3 599 982 |
| 32 400 018 | 32 400 018 | |
| Basic earnings per share (€ per share) | 0,73 | 0,66 |
| Earnings diluted per share (€ per share) | 0,73 | 0,66 |
| Number of own shares at the end of the year | 3 599 982 | 3 599 982 |
Since there are no potential voting rights, the basic earnings per share is equal to earnings diluted per share.
At the Annual General Meeting of May 14, 2018, an increase in the share capital to 36 million euros was approved by the incorporation of free reserves amounting to 6 million euros. This increase in share capital results in an increase of 599.988 own shares
Ibersol acquired 56 own shares in the period ended 30 September 2018.
At the General Meeting of 14th May 2018, the company decided to pay a gross dividend of 0,10 euro per share (0,10 euro in 2017), representing a total value of 2.700.006 euro for outstanding shares (2.160.010 euro in 2017), settled on June 2018.
The group has contingent liabilities regarding bank and other guarantees and other contingencies related with its business operations (as licensing, advertising fees, food hygiene and safety and employees, and the rate of success of these processes is historically high in Ibersol). No significant liabilities are expected to arise from the said contingent liabilities.
On 30th September 2018 and 31st December 2017, responsibilities not recorded by the companies and included in the consolidation consist mainly of bank guarantees given on their behalf, as shown below:
| Sep/18 | Dec/17 | |
|---|---|---|
| Bank guarantees | 36 143 054 | 25 753 064 |
On September 30th, 2018 there are no significant commitments for contracted investments not included in these financial statements.
Changes during the nine months period ended on 30 September 2018 and in the year 2017, under the heading of asset impairment losses were as follows:
| Sep/18 | |||||||
|---|---|---|---|---|---|---|---|
| Starting balance |
Currency conversion |
Cancellation | Impairment assets disposals |
Impairment in the year |
Impairment reversion |
Closing balance |
|
| Tangible fixed assets | 10 909 271 | - | - | -403 392 | - | - | 10 505 879 |
| Intangible assets | 3 707 206 | - | - | - | - | - | 3 707 206 |
| Stocks | 74 981 | - | - | - | - | - | 74 981 |
| Other current assets Other financial assets |
2 159 669 | -28 029 | -37 454 | - | 400 600 | - | 2 494 786 |
| (current and non-current) | - | - | - | - | 882 613 | - | 882 613 |
| 16 851 128 | -28 029 | -37 454 | -403 392 | 1 283 213 | - | 17 665 466 | |
| Dec/17 | |||||||
| Starting balance |
Currency conversion |
Cancellation | Impairment assets disposals |
Impairment in the year |
Impairment reversion |
Closing balance |
|
| Tangible fixed assets | 11 467 097 | - | - | -727 460 | 169 635 | - | 10 909 271 |
| Intangible assets | 3 710 538 | - | - | -3 332 | - | - | 3 707 206 |
| Stocks | 74 981 | - | - | - | - | - | 74 981 |
Other current assets 2 753 877 305 -1 176 843 - 702 271 -119 940 2 159 669
18 006 493 305 -1 176 843 -730 792 871 905 -119 940 16 851 128
The group's activities are exposed to a number of financial risk factors: market risk (including currency exchange risk, fair value risk associated to the interest rate and price risk), credit risk, liquidity risk and cash flow risks associated to the interest rate. The group maintains a risk management program that focuses its analysis on financial markets to minimise the potential adverse effects of those risks on the group's financial performance.
Financial risk management is headed by the Financial Department based on the policies approved by the Board of Directors. The treasury identifies, evaluates and employs financial risk hedging measures in close cooperation with the group's operating units. The Board provides principles for managing the risk as a whole and policies that cover specific areas, such as the currency exchange risk, the interest rate risk, the credit risk and the investment of surplus liquidity.
With regard to exchange rate risk, the Group follows a natural hedge policy using financing in local currency. Since the Group is mainly present in the Iberian market, bank loans are mainly denominated in euros and the volume of purchases outside the Euro zone are of irrelevant proportions.
The main source of the Group's exposure arises from the investment outside the euro area of operation that develops in Angola, although it is still small is growing and consequently to gain weight in the group activity. The reduction of oil prices is to lead to a shortage of foreign currency in Angola by the devaluation of the kwanza is a risk to consider. The financing of the Angolan subsidiary in foreign currency in the amount of \$ 625.000, does not have large exposure due to the reduced amount. The remaining financing concerning Angolan subsidiaries are denominated in the local currency, the same in which the income is generated. Given the current limitations of payments abroad, the group adopted a monthly monitoring policy of credit balances in foreign currency and its full coverage with the acquisition of treasury bonds of the Republic of Angola, indexed to USD.
Currency exchange rate used for conversion of the transactions and balances denominated in Kwanzas, were respectively:
| Euro exchange rates | (x | Rate on September, | Average interest rate |
|---|---|---|---|
| foreign currency per 1 Euro) | 30 2018 | September 2018 | |
| Kwanza de Angola (AOA) | 288,850 | 262,467 | |
| Dec/17 | |||
|---|---|---|---|
| Euro exchange rates | (x | Rate on December, | Average interest rate |
| foreign currency per 1 Euro) | 31 2017 | year 2017 | |
| Kwanza de Angola (AOA) | 185,391 | 187,441 |
The group is not greatly exposed to the merchandise price risk.
With the exception of the Angola Treasury Bonds, the group has no significant interest bearing assets. Therefore, profit and cash flows from investment activities are substantially independent of changes in market interest rate. Regarding the Angolan State treasury bonds, interest is fixed, so there is also no risk.
The group's interest rate risk follows its liabilities, in particular long-term loans. Loans issued with variable rates expose the group to the cash flow risk associated to interest rates. Loans with fixed rates expose the group to the risk of the fair value associated to interest rates. At the current interest rates, in financing of longer maturity periods the group has a policy of fixing interest rates of at least 50% of the outstanding amount.
The unpaid debt bears variable interest rate, part of which has been the object of an interest rate swap. Interest rate swap contracts to hedge the interest rate risk of part of the loans (commercial paper) of EUR 31,3 million are subject to interest maturities and repayment plans identical to the terms of the loans.
Based on simulations performed on 30 September 2018, an increase of 100 basis points in the interest rate, maintaining other factors constant, would have a negative impact in the net profit of 570.000 euros (949.000 euros in December 2017).
The main activity of the Group is carried out with sales paid in cash, or debit or credit card, so the Group has no significant credit risk concentrations. Regarding the customers, the risk is limited to the Catering business and sales of merchandise to franchisees representing less than 6% of the consolidated turnover. The Group has policies to ensure that credit sales are made to customers with an appropriate credit history. The Group has policies that limit the amount of credit that customers have access to.
The Group's cash and cash equivalents include mainly deposits resulting from cash provided by sales and its deposits in current accounts. These amounts excluded, the value of financial investments at September 30, 2018, is not significant, with the exception of the above mentioned Treasury Bonds of the Republic of Angola in the amount of 19 million euro, subject to country risk.
Deposits and other financial investments are spread over several credit institutions; therefore there is not a concentration of these financial assets.
Liquidity risk management implies maintaining a sufficient amount of cash and bank deposits, the feasibility of consolidating the floating debt through a suitable amount of credit facilities and the capacity to liquidate market positions. Treasury needs are managed based on the annual plan that is reviewed every quarter and adjusted daily. Related with the dynamics of the underlying business operations, the group's treasury strives to maintain the floating debt flexible by maintaining credit lines available.
The Group considers that the short-term bank loans are due on the renewal date and that the commercial paper programmes matured on the dates of denunciation.
At the end of the period, current liabilities reached 131 million euros, compared with 85 million euros in current assets. This disequilibrium is, on one hand, a financial characteristic of this business and, on the other hand, due to the use of commercial paper programmes in witch the Group considers the maturity date as the renewal date, regardless of its initial stated periods. In order to ensure liquidity of the short term debt it is expected in the year 2018 the renewal of the commercial paper programmes (10.000.000 euros). However, the expected operating cash flows and, if necessary, contracted credit lines, on the amounts of which have not yet been used, are sufficient to settle current liabilities.
Even with reduced use of the group has contracted a significant amount of short-term lines. On September 30, 2018, the use of short term liquidity cash flow support was about 5%. Investments in term deposits and other application of 49 million euros, match 37% of liabilities paid.
The following table shows the Group financial liabilities (relevant items), considering contractual cash-flows:
| to September 2019 | from September 2019 to 2028 | |
|---|---|---|
| Bank loans and overdrafts | 41 485 814 | 91 190 685 |
| Other non-current liabilities | - | 157 556 |
| Accounts payable to suppliers and | ||
| accrued costs | 63 902 614 | 388 924 |
| Other current liabilities | 3 059 539 | - |
| Total | 108 447 967 | 91 737 165 |
The company aims to maintain an equity level suitable to the characteristics of its main business (cash sales and credit from suppliers) and to ensure continuity and expansion.
The capital structure balance is monitored based on the gearing ratio (defined as: net remunerated debt / net remunerated debt + equity) in order to place the ratio within a 35%-70% interval.
On 30th September 2018 and 31st December 2017 the gearing ratio was of 25% and 31%, respectively, as follows:
| set/18 | Dec-17 | ||
|---|---|---|---|
| Bank loans | 132 676 499 | 141 014 741 | |
| Other financial assets | -19 337 615 | -22 986 661 | |
| Cash and bank deposits | -43 844 987 | -34 902 883 | |
| Net indebtedness | 69 493 897 | 83 125 197 | |
| Equity | 203 660 132 | 188 620 193 | |
| Total capital | 273 154 029 | 271 745 390 | |
| Gearing ratio | 25% | 31% |
In restaurants where it operates with international brands, the group enters into long-term franchise agreements: 20 years in the case of Burger King and 10 years in the case of Pizza Hut and KFC, which are renewable for another 10 years at the franchise's option, provided certain obligations have been fulfilled.
It has become practical for these contracts to be renewed. However, nothing obliges the franchisees to do so, so the risk of non-renewal may be verified.
In these contracts it is normal to contract the payment of an "Initial Fee" at the beginning of each contract and a "Renewall Fee" at the end of the initial period, in addition to a royalty and marketing operations fee on the sales amount.
Periodically, development contracts are negotiated which guarantee the right to open new restaurants.
At the moment a contract has been signed for the implementation of 40 KFC restaurants in the period between May 2017 and May 2022.
The fair value of financial instruments commercialised in active markets (such as publicly negotiated derivatives, securities for negotiation and available for sale) is determined based on the listed market prices on the consolidated statement of financial position date. The market price used for the group's financial assets is the price received by the shareholders in the current market. The market price for financial liabilities is the price to be paid in the current market.
The nominal value of accounts receivable (minus impairment adjustments) and accounts payable is assumed to be as approximate to its fair value. The fair value of financial liabilities is estimated by updating future cash flows contracted at the current market interest rate that is available for similar financial instruments.
Other current assets and liabilities on 30th September 2018 and 31st December 2017 are broken down as follows:
| Sep/18 | Dec/17 | |
|---|---|---|
| Clients | 9 705 203 | 7 045 044 |
| State and other public entities | 3 691 594 | 1 821 312 |
| Other debtors | 5 745 278 | 4 797 968 |
| Advances to suplliers | 298 569 | 443 940 |
| Advances to financial investments debt | - | 320 781 |
| Accruals and income | 5 265 079 | 5 060 103 |
| Deferred costs | 2 404 433 | 2 494 073 |
| Other current assets | 27 110 156 | 21 983 221 |
| Accumulated impairment losses | 2 494 786 | 2 159 659 |
| 24 615 370 | 19 823 562 | |
| Other current liabilities | ||
| Sep/18 | Dec/17 | |
| Other creditors | 3 059 539 | 9 900 301 |
| State and other public entities | 8 561 469 | 7 677 912 |
| Deferred income | 1 504 118 | 691 832 |
| 13 125 126 | 18 270 045 |
The breakdown of other non-current assets as at 30 September 2018 and 31 December 2017 is presented as follows:
| Sep/18 | Dec/17 | |
|---|---|---|
| Advance for financial investment | 1 511 000 | - |
| Other loans | 4 000 000 | - |
| Other debtors: | ||
| Deposits (1) | 9 800 086 | 5 853 001 |
| Credits granted | 500 770 | 641 326 |
| Other non-current assets | 15 811 856 | 6 494 327 |
| Discounted value (1) | 876 536 | - |
| 14 935 320 | 6 494 327 |
(1) balance of long term deposits and securities from Spain subsidiaries, resulting from lease agreements.
Accounts receivable from clients and other debtors are initially recognised at the fair value. Medium and long term debts are subsequently measured at the amortised cost, using the effective rate method minus the impairment adjustment.
In the period, a discount rate of 2% was applied, recognizing a loss in the amount of 876.536 eur (Note 17).
Net financing cost on 30th September 2018 and 2017 are broken down as follows:
| 2018 | 2017 | |
|---|---|---|
| Interest paid | 2 179 807 | 3 406 360 |
| Interest earned | -1 228 956 | -900 136 |
| Currency exchange differences | -16 329 | -126 779 |
| Payment discounts obtained | -9 416 | -7 629 |
| Other financial costs and income | 1 935 967 | 1 297 123 |
| 2 861 073 | 3 668 939 |
The detail of other financial costs and income, is presented as follows:
| 2017 | 2016 | |
|---|---|---|
| Bank services (1) | 665 489 | 807 804 |
| Financial instruments - cash flow hedge | -39 832 | -40 873 |
| Commercial paper programmes charges | 503 536 | 524 419 |
| Discounted value (Nota 16) | 876 536 | - |
| Impairment adjustments reversion TB's (IFRS 9) | -120 756 | - |
| Other commissions (1) | 44 491 | 24 686 |
| Other financial cost and gains | 6 503 | -18 913 |
| 1 935 967 | 1 297 123 |
(1) amount referring essentially to bank commissions on guarantees and commissions on treasury bonds transactions in Angola.
Income taxes recognized as of September 30, 2018 and 2017 are detailed as follows:
| Sep/18 | Sep/17 | |
|---|---|---|
| Current taxes | 6 700 576 | 6 407 356 |
| Insufficiency (excess) of income tax | -32 560 | -2 707 163 |
| Deferred taxes | -2 195 333 | -409 316 |
| 4 472 683 | 3 290 877 |
The effective tax rate on profits was 16% on September 30, 2018 and 24% in the same period of 2017, as follows:
| Sep/18 | Sep/17 | ||
|---|---|---|---|
| Profit before tax | 28 341 374 | 25 135 335 | |
| Income tax expense | 4 505 243 | 5 998 040 | |
| Effective tax rate | 16% | 24% |
The estimated effective tax rate in the period was of 16%, lower than the nominal rate, is mainly due to the tax benefits obtained under the terms of the Investment Tax Code (CFI), as in the "Decreto –Lei" no. 162/2014, of 31st October.
The amount of financial assets refers to the acquisition of Angola treasury bonds, resettable in accordance with the variation of the National Bank of Angola (BNA) exchange rate for the purchase of United States dollars, with rates interest coupon of default by maturity, as follows:
| set/18 | dec/17 | ||||||
|---|---|---|---|---|---|---|---|
| Non | Non | ||||||
| Current | Current | Total | Current | Current | Total | ||
| Treasury bonds | 2 545 985 | 17 674 244 | 20 220 228 | 5 162 755 | 17 823 906 | 22 986 661 | |
| Sub-total | 2 545 985 | 17 674 244 | 20 220 228 | 5 162 755 | 17 823 906 | 22 986 661 | |
| Accumulated impairment (1) | 111 132 | 771 481 | 882 613 | - | - | - | |
| TOTAL | 2 434 853 | 16 902 763 | 19 337 615 | 5 162 755 | 17 823 906 | 22 986 661 |
(1) As a result of the implementation of mandatory IFRS 9 as of January 1, 2018 (Note 3), considering the type of TB's that Ibersol holds, and since they are indexed to the USD, impairment was calculated assuming the option at the time of transition by the modified retrospective approach, as follows:
| Impact on the Interim Consolidated Statement of Income and Other Comprehensive Income: | ||
|---|---|---|
| Deferred tax | 264 784 | |
| Impact on Other Reserves and Retained Earnings | (2018, 01 January) | 1 003 369 |
| Impact on the Interim Consolidated Statement of Financial Position: |
Net financing cost -120 756 Income tax expense 36 227
The Probability of Default and Loss Given Default indices are in line with the publication of Moody's and S & P.
The related parties of Ibersol group are:
(*) ATPS voting rights are also attributable to Antonio Carlos Vaz Pinto de Sousa and António Alberto Guerra Leal Teixeira under subparagraph b) of paragraph 1 of article 20 and paragraph 1 Article 21, both of the Portuguese Market Code, by holding the domain of ATPS, in which they participate indirectly in equal parts by their companies, respectively, CALUM - SERVIÇOS E GESTÃO, S.A. with the NIPC 513799486 and DUNBAR - SERVIÇOS E GESTÃO, S.A with the NIPC 513799257, which together hold the majority of the capital of ATPS.
With respect to the balances and transactions with related entities, the overall value of the balances and transactions of the Group with the joint controlled UQ Consult relates mainly to support services and management information systems, and was, respectively, 1.029.132 and 2.302.173 euros.
The company shareholder ATPS-S.G.P.S., S.A., which signed a service-rendering contract with the subsidiary Ibersol Restauração, SA, provided services of administration and management to the group. ATPS-S.G.P.S., S.A. under contract with Ibersol Restauração, S.A. has the obligation to ensure that its administrators, António Carlos Vaz Pinto de Sousa and António Alberto Guerra Leal Teixeira, manage the group without incur in any additional charge. The company does not pay directly to its administrators any remuneration.
1) Standards (new and amendments) that have been published and are mandatory for the accounting periods beginning on or after 1 January 2018, endorsed by the EU:
a) IFRS 16 (new), 'Leases' (effective for annual periods beginning on or after 1 January 2019). This new standard replaces the IAS 17 with a significant impact on the accounting by lessees that are now required to recognise a lease liability reflecting future lease payments and a "right-of-use asset" for all lease contracts, except for certain short-term leases and for low-value assets. The definition of a lease contract also changed, being based on the "right to control the use of an identified asset". It is estimated that its application has relevant impacts, Ibersol will determine the respective amounts.
b) IFRS 4 (amendment), 'Insurance contracts (Applying IFRS 4 with IFRS 9)' transactions' (effective for annual periods beginning on or after 1 January 2018). This amendment allows companies that issue insurance contracts the option to recognise in Other Comprehensive Income, rather than Profit or Loss the volatility that could rise when IFRS 9 is applied before the new insurance contract standard is issued. Additionally, it is given an optional temporary exemption from applying IFRS 9 until 2021, to the companies whose activities are predominantly connected with insurance, not being applicable at consolidated level. It is not expected that its application has significant impacts.
c) Amendments to IFRS 15 'Revenue from contracts with customers' (effective for annual periods beginning on or after 1 January 2018). These amendments refer to additional guidance for determining the performance obligations in a contract, the timing of revenue recognition from a license of intellectual property, the review of the indicators for principal versus agent classification, and to new practical expedients to simplify transition. It is not expected that its application has significant impacts.
2) Standards (new and amendments) and interpretations that have been published and are mandatory for the accounting periods beginning on or after 1 January 2017, but are not yet endorsed by the EU:
a) Annual Improvements 2014 - 2016, (generally effective for annual periods beginning on or after 1 January 2017). The 2014-2016 annual improvements impacts: IFRS 1, IFRS 12 and IAS 28. It is not expected that its application has significant impacts.
b) IAS 40 (amendment), 'Transfers of Investment property' (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment clarifies when assets are transferred to, or from investment properties, the evidence of the change in use is required. A change of management intention in isolation is not enough to support a transfer. It is not expected that its application has significant impacts.
c) IFRS 2 (amendment), 'Classification and measurement of share-based payment transactions' (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment clarifies the measurement basis for cash-settled, share-based payments and the accounting for modifications to a share-based payment plan that change the classification an award from cashsettled to equity-settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee's tax obligation associated with a share-based payment and pay that amount to the tax authority. It is not expected that its application has significant impacts.
d) IFRS 9 (amendment), 'Prepayment features with negative compensation' (effective for annual periods beginning on or after 1 January 2019). This amendment is still subject to endorsement by the European Union. The amendment introduces the possibility to classify certain financial assets with negative compensation features at amortized cost, provided that specific conditions are fulfilled, instead of being classified at fair value through profit or loss. It is not expected that its application has significant impacts.
e) IAS 28 (amendment), 'Long-term interests in Associates and Joint Ventures' (effective for annual periods beginning on or after 1 January 2019). This amendment is still subject to endorsement by the European Union. The amendment clarifies that long-term investments in associates and joint ventures (components of an entity's investments in associates and joint ventures), that are not being measured through the equity method, are to be measured in accordance with IFRS 9, being subject to impairment expected credit loss model, prior to any impairment test of the investment as a whole. It is not expected that its application has significant impacts.
f) Annual Improvements 2015 - 2017, (generally effective for annual periods beginning on or after 1 January 2019). These improvements are still subject to endorsement by the European Union. The 2015-2017 annual improvements impact: IAS 23, IAS 12, IFRS 3 and IFRS 11. It is not expected that its application has significant impacts.
g) IFRS 17 (new), 'Insurance contracts' (effective for annual periods beginning on or after 1 January 2021). This standard is still subject to endorsement by European Union. This new standard replaces IFRS 4 and applies to all entities issuing insurance contracts, reinsurance contracts and investment contracts with discretionary participation characteristics. IFRS 17 is based on the current measurement of technical liabilities at each reporting date. The current measurement can be based on a complete "building block approach" or "premium allocation approach". The recognition of the technical margin is different depending on whether it is positive or negative. IFRS 17 is of retrospective application. It is not expected that its application has significant impacts.
a) IFRIC 22 (new), 'Foreign currency transactions and advance consideration' (effective for annual periods beginning on or after 1 January 2018). This interpretation is still subject to endorsement by European Union. An Interpretation of IAS 21 'The effects of changes in foreign exchange rates' it refers to the determination of the "date of transaction" when an entity either pays or receives consideration in advance for foreign currency denominated contracts". The date of transaction determines the exchange rate used to translate the foreign currency transactions. It is not expected that its application has significant impacts.
b) IFRIC 23 (new), 'Uncertainty over income tax treatment' (effective for annual periods beginning on or after 1 January 2019). This interpretation is still subject to endorsement by European Union. This is an interpretation of IAS 12 - 'Income tax', referring to the measurement and recognition requirements to be applied when there is uncertainty as to the acceptance of an income tax treatment by the tax authorities. In the event of uncertainty as to the position of the tax authority on a specific transaction, the entity shall make its best estimate and record the income tax assets or liabilities under IAS 12, and not under IAS 37 - "Provisions, contingent liabilities and contingent assets ", based on the expected value or the most probable value. The application of IFRIC 23 may be retrospective or retrospective modified. It is not expected that its application has significant impacts.
There are no subsequent events to 30th September 2018 that may have a material impact on the financial statements presented.
The financial statements were approved by the Board of Directors and authorised for emission on 22th November 2018.
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