IBERSOL – SGPS, SA

Publicly Listed Company

Registered office: Praça do Bom Sucesso, 105/159, 9th floor, Porto Commercial Registry: Oporto under number 501669477 Share Capital Euros 36.000.000 Fiscal number: 501669477

Consolidated Report Report & Accounts 9M 2020

(not audited)

Consolidated Turnover of Decrease of 39.9 213.9 million euros 39.9 % over 9M of 2019
Consolidated Ebitda decreased 59.6 Consolidated EBITDA reached 35.9 million euros creased 59.6% over 9M of 2019
Consolidated Decrease of 47.4 net profit of -36.9 million euros 47.4 miilion euros when compared to the 9M of 2019

Consolidated Management Report

Update COVID-19

In Q3 2020, operations were still affected by the restrictions imposed due to the pandemic situation. There was a recovery of activity adapted to the restrictions implemented in order to guarantee safety and to limit the spread of Covid-19.

During this period, the resumption of the Group's activity was conditioned by:

i) 50% reduction in the capacity of restaurants;
ii) limitation of the opening hours of shopping centers in Lisbon area;
iii) interruptions in air traffic corridors in England and Germany;
iv) football fans banned from stadiums and limitation to events.

In Portugal, in August, the group joined the Extraordinary Incentive to Standardization of Business Activity, while in Spain it remained with around 35% of employees on ERTE.

At the same time, contract renegotiation continued, including the financial rebalancing of lease agreements. The concluded negotiations resulted in a positive impact of around 8.5 million euros, as a result of the amended IFRS16 standard that concerns accounting treatment of rent deductions and reductions due to COVID-19 pandemic.

Currently, negotiations are still underway with most Shopping Centers, with regard to the application of the legislation in the period from March to July, as well as with the concessions in Portugal and Spain.

With the spread of the second wave of Covid-19 outbreak, first in Spain and then in Portugal, the Group has again limitations in its operations, such in term of sales channels, such in opening hours, due to the measures implemented in different countries and different regions. At this time, the depth of the containment measures that are still to be decreed until the end of the year is unpredictable.

In this context, we are monitoring, together with the financial institutions, the evolution of the financial covenants, taking into account the evaluation to be carried out on them at the end of the financial current year. It should be noted that in July was concluded the refinancing of 15 million euros.

Furthermore, as of 30 September 2020, the Group has cash and other applications surplus amounting to 56 million euros, which represents a 30% of remunerated liabilities. Additionally, it has contracted and unused lines amounting to 40 million euros.

Consolidated turnover for the nine months of the year amounted to EUR 213.9 million, compared to EUR 356.2 million in the same period of the previous year, which represents a 39.9% reduction:

Turnover	9M 2020
	euro million	% Ch. 20/19

Sales of Restaurants	208.6	-39.2%
Sales of Merchandise	4,3	-58.6%
Services Rendered	1.0	-63.8%
Net Sales & Services	213.9	-39.9%

In the third quarter of 2020, there was a gradual easing of the restrictions on mobility and circulation imposed in March and during the second quarter in most countries, in order to limit the spread of COVID-19, which allowed to register a recovery with different behaviors, depending on the geography and the weight of the segments operated in each of them.

In Spain, due to a smaller number of restaurants with drives and locations that are more dependent on tourism, sales declines were more abrupt and with no tendency to recover in the summer months at the same pace as in the other geographies.

Due to the weight of restaurants located in airports concessions in this region, in September around 30% of our restaurants remained closed.

Sales of restaurants located in Angola reflect losses in local currency and the effects of converting them to euros.

However, compared to the second quarter of the year, there were smaller decreases in all sales segments, with emphasis on the restaurant and counter segments with losses minimized by the delivery, take away and drive thru services.

The concessions and catering segment, which presents greater difficulties in recovery, resulting from the reduced mobility of passengers which penalize the travel locations and the limitations imposed on the gathering of people in events in the catering channel, with the cancellation and postponement of most of them.

The restaurants located in concessions, namely airports, were strongly affected by the restrictions on airspace during this period, with the month of August showing signs of recovery that were not consolidated in the following months, due to the increase in the number of COVID-19 cases in Europe.

In Spain, where the Group operates restaurants at nine different airports, passenger traffic recorded losses in the 3rd quarter between 70% and 80%, with airports located in the Canary and Balearic Islands being less penalized than urban ones, such as Barcelona and Madrid, in wich passenger traffic lost more than 80%.

During the third quarter, in articulation with the concessionaires, the reopening of the restaurants located in the concessions was evaluated in order to adjust the offer to the passenger's traffic.

SALES IN RESTAURANTS	9M 2020		3rd Quarter 2020
	euro million	% Ch. 20/19	euro million	Var 20/19

Restaurants	49.3	-36.2%	18.2	-34.8%
Counters	127.3	-22.8%	50.2	-15.2%
Concessions&Catering	32.0	-68,3%	9.7	-77.3%
Total Sales	208.6	-39.2%	78.1	-39.9%

Restaurants, with dinne-in service, have a slower recovery trend, as a result of the limitations in force for the occupation of the restaurants and the opening hours of some shopping centers due to the restrictions imposed regionally.

In the counters segment, there was a faster recovery in losses compared to the same period in 2019, to which three factors contributed decisively:

i) the impact of the expansion, namely of the brands Burger King, KFC and Taco Bell that occurred in the second half of 2019;
ii) maintenance of open restaurants with delivery and take away services, since the emergency state was decreed;
iii) the good performance of restaurants with Drive services (operated by Burger King and KFC), that have overcome the losses incurred inside the restaurants.

The combination of these factors, allowed Burger King to achieve sales growth compared to the same period in the quarter, which allows a faster return to pre-covid growth.

During this period, 42 restaurants were closed definitively, sixteen of which were franchised and nine new restaurants were opened.

The closure of the 24 equity restaurants in Spain resulted from the decision to concentrate Pizza Móvil and Pizza Hut operation in urban centers, the option of not renewing the lease contracts for six restaurants of the Pans, Ribs and Frescco brands, and the end of the concession contract at the FCB stadium.

Following the KFC strategy of expansion five new restaurants were opened, one of which in Spain, two Burger King and one Ribs in Portugal and the last restaurant that remained to be opened at Barcelona airport, under the contract that started in May 2018, to complete the commitments that resulted from tenders.

At the end of the period, the total number of restaurants was 626 (530 equity and 96 franchises), as shown below:

Nº of Restaurants	2019				2020
	31-Dec	Openings	Transfer	Closures	30/Sep
PORTUGAL	355	7	0	2	360
Equity Restaurants	354	7	0	2	359
Pizza Hut	98			1	97
Okilo+MIIT+Ribs	4	1			5
Pans+Roulotte	45			1	44
Burger King	101	2			103
KFC	30	4			34
Pasta Caffé	6				6
Quiosques	8				8
Taco Bell	2				2
Coffee Shops	27				27
Catering	10				10
Concessions & Other	23				23
Franchise Restaurants	1				1
SPAIN	287	2		36	253
Equity Restaurants	183	2		24	161
Pizza Móvil	23			9	14
Pizza Hut	5			2	3
Burger King	37				37
Pans	35			3	32
Ribs	15			2	13
FrescCo	3			1	2
KFC	1	1			2
Concessions	64	1		7	58
Franchise Restaurants	104	0		12	92
Pizza Móvil	12			3	9
Pans	52			3	49
Ribs	22			3	19
FrescCo	5				5
SantaMaria	13			3	10
ANGOLA	10				10
KFC	9				9
Pizza Hut	1				1
Other Locations - Franchise	7	0		4	3
Pans	7			4	3
Total Equity Restaurants	547	9	0	26	530
Total Franchise Restaurants	112	0	0	16	તે રેણવાડી તેમ જ દૂધની ડેરી જેવી સવલતો પ્રાપ્ય થયેલી છે. આ ગામના લોકોનો મુખ્ય વ્યવસાય ખેતી, ખેતમજૂરી તેમ જ પશુપાલન છે. આ ગામમાં મુખ્યત્વે ખેત-ઉપયોગ તાલુકામાં આવેલું એક ગામના
TOTAL	659	9	0	42	626

The consolidated net income of 9M amounted to Eur -36.9 million compared to Eur 10.5 million, in the same period of 2019.

The abrupt closure in March and the confinement period that continued until mid-May, during which 73% of the restaurants operated by the Group remained closed, strongly penalized the operational performance, and it was not possible in this period to adjust the cost items to the reduction in sales, which inevitability led to increases in the weight of the items costs and inherent loss of profitability.

The gradual resumption of activity in the third quarter and the conclusion of the negotiations with part of the landlords, allowed in this period minimize losses resulting from 40% reduction in activity and to achieve positive operating results with IFRS16.

(Million euros)	1Q 2020	2Q 2020	3Q 2020	9M 2020	9M 2019	VAR %

Operating income
Sales	94,4	38,6	79,9	212,9	353,5	-39,8%
Rendered services	0,6	0,0	0,4	1,0	2,7	-63,8%
Other operating income	2,4	1,2	4,3	7,9	7,1	12,3%
Total operating income	97,4	39,9	84,6	221,8	363,2	-38,9%
Operating costs
Cost of sales	23,9	9,8	20,3	54,0	87,0	-38,0%
External supplies and services	21,2	13,0	15,6	49,8	74,7	-33,3%
Personnel costs	36,8	15,9	25,8	78,6	109,8	-28,5%
Amortisation, depreciation and impairment losses	21,3	25,6	20,5	67,4	60,1	12,2%
Other operating costs	0,6	0,8	2,2	3,6	2,8	28,9%
Total operating costs	103,8	65,2	84,3	253,4	334,5	-24,2%
Operating Income	-6,4	-25,4	0,2	-31,6	28,8	-209,7%
EBITDA	14,9	0,3	20,7	35,9	88,8	-59,6%

Turnover amounted to 213.9 million euros, a decrease of 142.3 million euros compared to the same period of the previous year.

Gross margin was 74.8% of turnover, 0.8p.p lower than the previous year (9M19: 75.6%). This reduction was due to the loss of perishable raw materials in March, following the abrupt interruption of restaurant activity and the limited operation to segments of greater promotional aggressiveness and consequently with lower margins.

Staff costs decreased 28.5%, representing 36.7% of the turnover (9M19: 30.8%).

To reconcile the abrupt reduction in activity and the protection of jobs, the group's companies joined ERTE in Spain and the simplified and normal Lay-off in Portugal.

ERTE in Spain entered into force from the 18th of March, remaining with around 35% of employees at the end of the 3rd quarter. In Portugal, around 1% of employees remained in the normal Lay-off at the end of the 3rd quarter, while the simplified one, was in force from April until July.

External Supplies and services decreased 33.3%, representing 23.3% of turnover, which represents an increase of 2.3p.p. compared to the same period of the previous year (9M19: 22.0%).

In the second quarter, several contracts were cancelled and renegotiated, which made possible to mitigate part of the losses in result from the closure of restaurants. However, the increase in the weight of sales through delivery, did not allow for a greater reduction in the weight of this cost.

As a result of the amended IFRS16 standard, that concerns accounting treatment of rent deductions and reductions due to COVID-19, Eur 8.5 million are recognized as result of agreements with landlords and the suspension of minimum rents in shopping centers in Portugal, due to the application of Law n.º 27 – A / 2020 in the period from August to December 2020.

As of 30th September, negotiations have not yet been concluded, which will have a very significant impact, namely regarding restaurants located in shopping centers (April to July period) and airports in Spain. Leases with shopping centers not yet agreed represent a cost of Eur 2.9 million and with airports in Spain a cost of Eur 14.2 million.

Other operating income and costs with a total amount of 4.3 million euros compare with the same amount in the same period of 2019. In 2020, the following amounts were registered:

In operating income, under the "Extraordinary Incentive to the Normalization of Business Activity" was granted an incentive in the amount of Eur 1.8 million;
In other operating costs, losses on fixed assets due to the closure of restaurants in the amount of Eur 0.7 million.

Therefore EBITDA amounted to 35.9 million euros, a decrease of 59.6% compared to the same period of the previous year.

Consolidated EBITDA margin stood at 16.8% of turnover which compares with 24.9% in the same period of the previous year.

Amortization and impairment losses

Depreciation for the period of 67.4 million euros, which represents an increase of 7.4 million euros.

Impairment losses in the first half of 3.7 million euros. Due to the relevant impact on the activity, impairment tests were carried out in the first half led to the recognition of impairment losses on the following assets:

i) Pizza Móvil Goodwill 3.1 million euros
ii) Tangible assets of five restaurants 0.5 million euros;

EBIT margin was -14.8% of turnover, which compares with 8.1% in the same period of the previous year.

Consolidated Financial Results were 16.3 million euros, around 1.5 million euros lower than the 9M19.

The cost of net debt decreased by 0.3 million euros compared to the same period of the previous year, to 2.5 million euros.

Average cost of loans was 1.9%, lower than 9M19 (2.2%), due to the reduction of loans in Angola with a higher cost, and the lower cost of loans contracted this year.

Financial Situation

Total Assets amounted to 758.4 million euros and Equity stood at 175.4 million euros, representing 23.1% of assets. Eliminating the impact of IFRS16, Equity would represent 37% of total Assets.

CAPEX reached 12.1 million euros. About 10.8 million corresponds to the investment incurred in to complete the expansion plan and the remaining for the refurbishment and modernization of some restaurants.

Current assets amounted to 118.4 million euros, of which 71.5 million correspond to cash and cash equivalents.

Current liabilities amount to 161.7 million euros, of which 48.1 million correspond to Liabilities with Leases and 41 million euros to current loans. With regard to current loans, it should be noted that the Group has 22 million euros of contracted lines and not used with maturities over 1 year. 15 million euros were refinanced in July (with effect from December) and 8 million are in the restructuring.

Without IFRS16, Net debt at 30th September 2020 increased by 37.1 million euros, to 115.2 million euros, to finance the needs generated by the pandemic crisis.

	30/09/2020	31/12/2019	A
Total Assets	758,4	777,3	-18,9
Total Equity	175,4	214.2	-38,9
Loans	177,8	121,2	56.6
Liability for leases	323,2	340.0	-16.8
Other liabilities	82,1	101,9	-19.8
Total Equity and Liabilities	758,4	777,3	-18,9

ECB forecasts point to a reduction of 10% of GDP for Portugal and Spain, with a partial and slow recovery over the following years, namely in the business areas that depend on flow and circulation of people, as well as airports and shopping centers;

As of the date of publication of this report, there is a second wave of the Covid-19 outbreak in European countries, which has led to the restriction of circulation and of the opening hours of restaurants throughout the Iberian, compromising the maintenance of the pace of recovery until the month of October.

With the sharp increase in the spread of the virus in recent weeks it is possible that will keep the restrictions on the circulation and operation of restaurants. Due to this possibility, the Group foresees a reduction in the annual turnover to around 40%, which eventual worsening in the application of measures restricting the mobility of people during the Christmas period may possibly worsen this scenario.

Ibersol Group permanently assesses developments, adjusting operations according to the behaviour of demand, in order to minimize the impacts resulting from this crisis, in order to guarantee the interest of all stakeholders.

We continue to make efforts to conclude rental negotiations with shopping centers and concessionaires, which are expected to have a significant impact on the annual accounts.

In addition to the nine openings completed until September, two new Taco Bell's, one Burger King and one Ribs restaurants have been already opened. By the end of the year, an additional opening of 3 Drive Thru restaurants is planned, due to the good performance of this segment in the current pandemic context.

Porto, 19th November 2020

______________________________ António Carlos Vaz Pinto de Sousa

______________________________ António Alberto Guerra Leal Teixeira

______________________________

Juan Carlos Vázquez-Dodero

Ibersol S.G.P.S., S.A.

Interim Consolidated Condensed Financial Statements

30th September 2020

IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF INTERIM CONSOLIDATED FINANCIAL POSITION (values in euros) ON SEPTEMBER 30, 2020

ASSETS	Notes	30/09/2020	31/12/2019
Non-current
Tangible fixed assets	8	206 777 343	216 563 700
Rights of use	7	285 030 221	321 812 178
Goodwill	9	84 851 938	87 968 225
Intangible assets	9	36 317 737	36 440 964
Financial investments - joint controlled subsidiaries Non-current financial assets		2 474 955	2 566 336
Other financial assets	19	543 378 858 898	435 226 2 710 150
Other non-current assets	16	7 902 671	8 238 111
Deferred tax		15 273 924	4 010 940
Total non-current assets		640 031 065	680 745 830
Current
Inventories		11 797 047	12 014 986
Cash and bank deposits	20	61 411 905	38 424 757
Income tax receivable		1 863 427	1 502 658
Other financial assets	19	10 128 931	12 916 621
Other current assets	16	33 198 054	31 681 067
Total current assets		118 399 364	96 540 090
Total Assets		758 430 430	777 285 920

EQUITY AND LIABILITIES
EQUITY
Capital and reserves attributable to shareholders Share capital	10	36 000 000	36 000 000
Own shares		-11 180 516	-11 180 516
Share prize		469 937	469 937
Legal reserves		1 629 598	1 075 511
Conversion Reserves		-12 283 947	-10 355 553
Other Reserves & Retained Results		197 372 003	180 376 862
Net profit in the year		-36 840 904	17 549 228
		175 166 171	213 935 469
Interests that do not control		197 781	293 007
Total Equity		175 363 952	214 228 476
LIABILITIES
Non-current Loans	11	136 817 706	74 763 367
Liability for leases	11	275 125 106	286 206 086
Deferred tax		9 327 657	8 671 083
Provisions		33 257	33 257
Derivative financial instrument		92 945	128 699
Other non-current liabilities		6 026	6 146
Total non-current liabilities		421 402 697	369 808 638
Current
Loans Liability for leases	11	40 968 795	46 399 315
Accounts payable to suppliers and accrued costs	11 21	48 069 815 59 311 678	53 777 115 77 816 608
Income tax payable		442 589	689 748
Other current liabilities	16	12 870 904	14 566 020
Total current liabilities		161 663 781	193 248 806
Total Liabilities		583 066 478	563 057 444
Total Equity and Liabilities		758 430 430	777 285 920

FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER, 2020 AND 2019 (values in euros) IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF RESULTS AND OTHER INTERIM CONSOLIDATED INTEGRAL INCOME

	Notes	30/09/2020	30/09/2019
Sales	6	212 929 663	353 499 418
Rendered services	6	960 355	2 652 722
Cost of sales		-53 968 928	-87 045 731
External supplies and services		-49 829 086	-74 721 609
Personnel costs		-78 554 674	-109 816 989
Amortisation, depreciation and impairment losses of TFA, Rights
of Use, Goodwill and IA	7, 8 and 9	-67 433 414	-60 084 603
Other operating costs		4 339 155	4 274 803
Operating Income		-31 556 929	28 758 011

Financial expenses and losses	17	-16 298 609	-17 807 760
Financial income and gains	17	935 099	1 232 000
Gains (losses) in joint controlled subsidiaries - Equity method		-291 381	152 302
Gains (losses) on Net monetary position		-	-
Profit before tax		-47 211 820	12 334 553
Income tax expense	18	10 325 496	-1 809 049
Net profit		-36 886 324	10 525 504
Other comprehensive income:
Change in currency conversion reserve (net of tax and that can be
recycled for results)		-1 928 394	-977 288
TOTAL COMPREHENSIVE INCOME		-38 814 718	9 548 216

Net profit attributable to:
Owners of the parent		-36 840 904	10 482 194
Non-controlling interest		-45 420	43 309
		-36 886 324	10 525 503
Total comprehensive income attributable to:
Owners of the parent		-38 769 298	9 504 906
Non-controlling interest		-45 420	43 309
		-38 814 718	9 548 215
Earnings per share:	10
Basic		-1,14	0,32
Diluted		-1,14	0,32

IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF RESULTS AND OTHER INTERIM CONSOLIDATED INTEGRAL INCOME FOR THE THIRD TRIMESTER OF 2020 AND 2019

(values in euros)

		3rd TRIMESTER (unaudited)

	Notes	2020	2019
Sales		79 888 504	133 900 954
Rendered services		359 740	914 325
Cost of sales		-20 261 523	-32 866 640
External supplies and services		-13 102 484	-25 994 395
Personnel costs		-25 798 007	-38 329 721
Amortisation, depreciation and impairment losses of TFA, Rights
of Use, Goodwill and IA		-20 479 004	-20 444 922
Other operating costs		-361 510	2 357 268
Operating Income		245 716	19 536 868
Financial expenses and losses		-5 330 205	-6 078 754
Financial income and gains		225 410	369 212
Gains (losses) in joint controlled subsidiaries - Equity method		-209 180	19 959
Gains (losses) on Net monetary position		-	-583 621
Profit before tax		-5 068 259	13 263 664
Income tax expense		1 544 023	-3 306 142
Net profit		-3 524 236	9 957 522
Other comprehensive income:
Change in currency conversion reserve (net of tax and that can be
recycled for results)		-700 718	-349 337
TOTAL COMPREHENSIVE INCOME		-4 224 954	9 608 185
Net profit attributable to:
Owners of the parent		-3 509 562	9 917 053
Non-controlling interest		-14 674	40 469
		-3 524 236	9 957 522
Total comprehensive income attributable to:
Owners of the parent		-4 210 280	9 567 716
Non-controlling interest		-14 674	40 469
		-4 224 954	9 608 185
Earnings per share:
Basic		-0,11	0,31
Diluted		-0,11	0,31

IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF CHANGES IN INTERIM CONSOLIDATED EQUITY

for the nine months period ended 30th September, 2020 and 2019

(value in euros)

		As sig ned sha reh old to ers
	Not e	Sha re Cap ital	Ow n Sha res	Sha Priz re e	Leg al Res erv es	Co rsi nve on Res erv es	Oth er Res & erv es Ret ain ed Res ults	Net Pro fit	Tot al p nt are ity equ	Inte ts res tha t do t no l tro con	Tot al Equ ity
Bal n 1 Ja ry 2 019 anc e o nua		36 000 00 0	-11 18 0 5 16	469 93 7	755 58 1	-7 1 40 907	158 97 4 7 33	24 962 06 1	202 84 0 8 89	329 20 4	203 17 0 0 93
Ch in t he iod ang es per : App lica tion of the lida ted fit f 20 18: co nso pro rom
T sfe and aine d re sult r to ret ran res erv es s					319 93 0		24 642 13 1	-24 96 2 0 61	-		-
Con sion - A la ver res erv es ngo Net lida ted inc for the nin hs ont co nso ome e m						-97 7 2 88			-97 7 2 88		-97 7 2 88
iod end ed 30 Sep ber , 20 19 tem per on								10 4 82 194	10 4 82 194	43 309	10 5 25 503
Tot al c han in the rio d ges pe		-	-	-	319 93 0	-97 7 2 88	24 642 13 1	-14 47 9 8 67	9 5 04 906	43 309	9 5 48 215
Net ofit pr								10 4 82 194	10 4 82 194	43 309	10 5 25 503
Tot al c reh ive inco omp ens me									9 5 04 906	43 309	9 5 48 215
Tra ctio wit h c api tal s in the rio d nsa ns ow ner pe App lica tion of the lida ted fit f 20 18: co nso rom
pro P aid divi den ds							-3 2 40 000		-3 2 40 000	-12 6 7 79	-3 3 66 779
		-	-		-	-	-3 2 40 000	-	-3 2 40 000	-12 6 7 79	-3 3 66 779

Bal n 3 0 S ber 20 19 ept anc e o em		36 000 00 0	-11 18 0 5 16	469 93 7	1 07 5 5 11	-8 1 18 195	180 37 6 8 64	10 4 82 194	209 10 5 7 95	245 73 4	209 35 1 52 9
Bal n 1 Ja ry 2 020 anc e o nua Ch in t he iod ang es per :		36 000 00 0	-11 18 0 5 16	469 93 7	1 07 5 5 11	-10 35 5 5 53	180 37 6 8 62	17 5 49 228	213 93 5 4 69	293 00 7	214 22 8 4 76
App lica tion of the lida ted fit f 20 19: co nso pro rom
T sfe and aine d re sult r to ret ran res erv es s					554 08 7		16 9 95 141	-17 54 9 2 28	-		-
Con sion - A la ver res erv es ngo for Net lida ted inc the nin ont hs co nso ome e m						-1 9 28 394			-1 9 28 394		-1 9 28 394
iod end ed Sep ber 30 tem , 20 20 per on								-36 84 0 9 04	-36 84 0 9 04	-45 42 0	-36 88 6 3 24
Tot al c han in the rio d ges pe		-	-	-	554 08 7	-1 9 28 394	16 9 95 141	-54 39 0 1 32	-38 76 9 2 98	-45 42 0	-38 81 4 7 18
Net ofit pr								-36 84 0 9 04	-36 84 0 9 04	-45 42 0	-36 88 6 3 24
Tot al c reh ive inco omp ens me									-38 76 9 2 98	-45 42 0	-38 81 4 7 18
Tra ctio wit h c api tal s in the rio d nsa ns ow ner pe
App lica tion of the lida ted fit f 20 19: co nso pro rom
P aid divi den ds									-	-49 80 6	-49 80 6
		-	-	-	-	-	-	-	-	-49 80 6	-49 80 6
Bal n 3 0 S ber 20 20 ept anc e o em		36 000 00 0	-11 18 0 5 16	469 93 7	1 62 9 5 98	-12 28 3 9 47	197 37 2 0 03	-36 84 0 9 04	175 16 6 1 71	197 78 1	175 36 3 9 52

Porto, 19th November 2020

The Board of Directors,

IBERSOL S.G.P.S., S.A. Condensed Statement of Interim Consolidated Cash Flows for the nine months period ended 30 September, 2020 and 2019

(value in euros)

			Nine months period ended on
		September 30
	Note	2020	2019
Cash Flows from Operating Activities
Receipts from clients		217 973 920	357 951 221
Payments to supliers		-107 147 660	-147 742 592
Staff payments		-65 987 971	-106 636 508
Flows generated by operations		44 838 289	103 572 121
Payments/receipt of income tax		-739 871	-3 436 690
Other paym./receipts related with operating activities		-21 378 227	-12 285 475
Flows from operating activities (1)		22 720 191	87 849 956
Cash Flows from Investment Activities
Receipts from:
Financial investments		81 016	82 440
Tangible fixed assets		1 412	22 225
Interest received		748 362	1 080 924
Other financial assets		3 742 596	3 319 475
Payments for:
Financial Investments		189 167	306 550
Tangible fixed assets		23 404 873	33 742 508
Intangible assests		1 931 645	3 305 525
Flows from investment activities (2)		-20 952 299	-32 849 519
Cash flows from financing activities
Receipts from:
Loans obtained		61 175 156	23 193 010
Payments for:
Loans obtained		3 248 231	19 059 612
Amortisation and interest of liability for leases		33 641 066	42 143 628
Interest and similar costs		3 257 049	3 944 161
Dividends paid			3 366 779
Flows from financing activities (3)		21 028 810	-45 321 170
Change in cash & cash equivalents (4)=(1)+(2)+(3)		22 796 702	9 679 267
Cash & cash equivalents at the start of the period		34 684 804	32 048 560
Cash & cash equivalents at end of the period	20	57 481 506	41 727 827

IBERSOL SGPS, S.A.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIOD ENDED ON 30 SEPTEMBER 2020

(Values in euros)

1. INTRODUCTION

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, Taco Bell, Sol, Sugestões e Opções, Silva Carvalho Catering e Palace Catering, coffee counters and other concessions. The group has 530 units which it operates and 96 units under a franchise contract. Of this universe, 360 are headquartered in Portugal, of which 359 are owned and 1 franchised, and 253 are based in Spain, spread over 161 own establishments and 92 franchisees. Finally, 10 units are located in Angola and 3 in other locations.

Ibersol is a public limited company listed on the Euronext of Lisbon.

Ibersol SGPS parent company is ATPS - SGPS, S.A ..

2. MAIN ACCOUNTING POLICIES

The main accounting policies applied in preparing these consolidated financial statements are described below.

2.1 Basis of presentation, consolidation and main accounting policies

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 2019.

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 2020 are identical to those applied for preparing the financial statements of 30 September and 31 December 2019, except for the exchange currency differences included in other income / other operating costs and excluded from net financing cost.

These financial statements were approved by the Board of Directors and authorised for emission on 19th November 2020.

3. New standards, amendments and interpretation adopted

The rules and interpretations that became effective on January 1, 2020 are as follows:

a) IFRS 3 (amendment), "Concentration of business activities" (effective for annual periods beginning on or after 1 January 2020). The intention of changing the standard is to overcome the difficulties that arise when an entity determines whether it has acquired a business or a set of assets.

b) IAS1 and IAS 8 (amendment), "Definition of material" (to be applied in annual periods beginning on or after 1 January 2020). The intention of changing the standard is to clarify the definition of material and align the definition used in international financial reporting standards.

c) Reform of the interest rate reference (issued on September 26, 2019, to be applied in years beginning on or after January 1, 2020). This reform aims to change the standards of financial instruments, provided for in IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures.

d) Improvements to international financial reporting standards (issued on March 29, 2018, to be applied to annual periods beginning on or after January 1, 2020). These improvements involve the revision of several standards.

e) IFRS 16 (amendment), "Leases" (issued on May 28, 2020, to be applied in annual periods beginning on or after June 1, 2020). The general purpose of this change is to allow tenants, as a practical expedient, to treat the changes / concessions related to COVID-19. The change does not affect owners.

These standards and amendments had no material impact on the Group's consolidated financial statements, with the exception of IFRS16 amendment. The group treated rent bonus related with Covid 19 as not being a change to the lease agreement, recognizing the gain obtained from discounts applied to rents in the Condensed Statement of Income and Other Comprehensive Income Consolidated Interim in the amount of 8.5 million euros.

At the date of approval of these financial statements, there are no standards and interpretations endorsed by the European Union, whose mandatory application occurs in future financial years.

The following standards, interpretations, amendments and revisions, with mandatory application in the year and in future economic years, were not, until the date of approval of these financial statements, endorsed by the European Union:

IFRS 3 (amendment), "Concentration of business activities" (effective for annual periods beginning on or after 1 January 2020). The intention of changing the standard is to overcome the difficulties that arise when an entity determines whether it has acquired a business or a set of assets.
IFRS 17 (new), "Insurance contracts" (effective for annual periods beginning on or after 1 January 2021). The general objective of IFRS17 is to provide a more useful and consistent accounting model for insurance contracts between entities that issue them globally.
IAS 1 (Amendment), "Presentation of the financial statements". The intent of the standard is to clarify the classification of liabilities as current or non-current.
Improvements to international financial reporting standards 2018-2020 (issued on May 14, 2020, to be applied to annual periods beginning on or after January 1, 2022). These improvements involve the revision of several standards.
IFRS 4 (amendment). Deferral of effective dates for the application of two optional solutions (temporary exemptions to IFRS 9 and overlap approach).
IAS 16 (amendment). Income obtained before commissioning.
IAS 37 (amendment), "Onerous Contracts". Costs of fulfilling a contract.
Amendments to IFRS 9, IFRS 7, IFRS 4 and IFRS 16 - Reform of the reference interest rate (phase 2).

The Group is assessing the impact resulting from these changes and will apply these standards in the year in which they become effective, or in advance when permitted.

4. IMPORTANT ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgements are continuously evaluated and are based on past experience and on other factors, including expectations regarding future events that are believed to be reasonably probable within the respective circumstances.

Estimates, assumptions and circumstances will rarely, by definition, match actual reported results. Estimates and assumptions that present a significant risk of leading to a material adjustment in the accounting value of the assets and liabilities in the following year are described below:

a) Estimated impairment of goodwill

The group performs annual tests to determine whether the goodwill is subject to impairment, according to the accounting policy. Recoverable amounts from the units generating cash flows are determined based on the calculation of utilisation values. Those calculations require the use of estimates (Note 9).

The assumptions used are sensitive to changes in macroeconomic indicators and to the business assumptions used by management. Considering the uncertainties regarding the goodwill recovery value due to the fact that they are based on the best information available at the date, changes in the assumptions could result in impacts in determining the level of impairment and, consequently, in the results.

b) Provisions

The group on a periodic basis examines possible obligations arising from past events that should be recognized or disclosed.

The subjectivity inherent in determining the probability and amount of internal resources required to settle these obligations may result in significant adjustments due to changes in the assumptions used or the future recognition of provisions previously disclosed as contingent liabilities.

c) Estimated lifetime and impairment of tangible and intangible assets

Tangible and intangible fixed assets are subject to systematic depreciation for the period determined to be their economic useful life. The determination of lifetime period of the assets and the depreciation method to be applied, is essential to determine the amount of depreciation to be recognized in the income statement for each year.

According to the best judgment of the Board of Directors and considering the practices adopted by companies in the sector internationally these two parameters are set for the assets and business in question.

The recoverability of tangible and intangible fixed assets requires the definition of estimates and assumptions by the Management, namely, when applicable, with regard to the determination of the value in use in the scope of the impairment tests of the Group's cash generating units.

d) Impairment losses foreseen

In applying the expected impairment loss models, the Group assesses the probability of default and estimated losses in the event of default. This evaluation involves relevant estimates by the Group, which are based on a set of historical information and assumptions, which may not be representative of the future uncollectibility of the Group's debtors.

e) Lease term and Incremental financing rates

To determine the estimated impacts of adopting IFRS 16, the Group makes estimates on the lease terms and their incremental financing rates, which incorporate specific market and entity risks that require the Group to make relevant judgments and estimates.

f) COVID 19

The World Health Organization on 11 March declared a pandemic associated with the spread of Covid-19, having been declared the "Estado Alarma" in Spain and soon afterwards the State of Emergency in Portugal. Later, at the end of the month, the same happened in Angola. The state of emergency determined measures to contain the population and the closure of most shops and restaurants.

With the gradual opening of the economy and, despite being open, restaurants have been operating below their normal potential.

In order to reconcile the abrupt reduction in activity and the protection of jobs, the Group's companies joined the ERTE (Expediente de Regulación Temporal de Empleo) in Spain and the simplified and normal Lay-off in Portugal.

At the same time, and as detailed in Note 23, initiatives were taken to reduce costs, renegotiate contracts, including the financial rebalancing of lease contracts and the negotiation of payment terms.

5. INFORMATION ABOUT THE COMPANIES INCLUDED IN THE CONSOLIDATION AND OTHER COMPANIES

5.1. The following group companies were included in the consolidation on 30 September 2020 and 30 September and 31 December 2019:

		% Shareholding
Company	Head Office	Sep/20	Dec/19	Sep/19
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 - Espanha	100%	100%	100%
Inverpeninsular, S.L.	Vigo - Espanha	100%	100%	100%
Asurebi SGPS, S.A.	Porto	100%	100%	100%
Charlotte Develops, SL	Vigo - Espanha	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-Espanha	100%	100%	100%
Sugestões e Opções-Actividades Turísticas, S.A	Porto	100%	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 - Espanha	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%
Ibergourmet Produtos Alimentares (ex-Gravos 2012, S.A.)Porto		100%	100%	100%
Lusinver Restauracion, S.A.	Vigo - Espanha	100%	100%	100%
The Eat Out Group S.L.U.	Barcelona - Espanha	100%	100%	100%
Pansfood, S.A.U.	Barcelona - Espanha	100%	100%	100%
Foodstation, S.L.U	Barcelona - Espanha	100%	100%	100%
Dehesa de Santa Maria Franquicias, S.L.	Barcelona - Espanha	100%	100%	100%
Cortsfood, S.L.	Barcelona - Espanha	50%	50%	50%
(d) Volrest Aldaia, S.L	Vigo - Espanha	100%	-	-
(d) Volrest Alcala, S.L	Vigo - Espanha	100%	-	-
(d) Volrest Alfafar, S.L.	Vigo - Espanha	100%	-	-
(d) Volrest Rivas, S.L.	Vigo - Espanha	100%	-	-
Associated companies
(c) Ziaicos - Serviços e gestão, Lda	Porto	40%	40%	-
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) Associated constituted in 2019.

(d) Acquired subsidiaries related to the 4 units that the group started to control in 2019..

The subsidiary companies were included in the consolidation by the full consolidation method. UQ Consult, the jointly controlled entity, and associated Ziaicos, were 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.

5.2. Alterations to the consolidation perimeter

5.2.1. Acquisition of new companies

In the nine months period ended on 30 September 2020 there was no acquisition of subsidiaries.

5.2.2. Disposals

In the nine months period ended on 30 September 2020 there was no disposals of subsidiaries.

6. INFORMATION PER SEGMENT

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	Burger King	Pans & C.ª	Coffee Counters Taco Bell
Concessions
and catering	Sol (SA)	Concessions	Catering	Convenience stores		Travel

The results by segment for the nine-month periods ended September 30, 2020 and 2019, with and without impact of the application of IFRS 16, are presented as follows:

w/ IFRS 16	Restaurants			Counters		Concessions and Catering	Other, write off and adjustments		Total Group
	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
Turnover	52 256 980		84 199 032 129 311 563 170 041 614			32 206 438 101 637 505	115 037	273 989	213 890 018 356 152 140
Operating income net of Amortization, deprec. and impairment losses Amortization, depreciation and impairment	4 875 734	16 604 977	25 966 794	35 470 015	4 657 162	36 480 786	376 795	286 836	35 876 485	88 842 614
losses	13 113 942	8 839 900	23 690 150	20 735 145	29 781 441	29 488 489	847 881	1 021 069	67 433 414	60 084 603
Operating income (1)	-8 238 208	7 765 077	2 276 643		14 734 870 -25 124 279	6 992 297	-471 086	-734 233	-31 556 929	28 758 011
Net financing cost									15 363 510	16 575 760
Other non-operating gains and losses									-291 381	152 302
Income tax expense									-10 325 496	1 809 049
Net profit									-36 886 324	10 525 504
Total assets allocated*						103 728 739 107 316 064 313 145 357 323 975 084 299 160 607 309 506 689 11 252 213 11 641 356			727 286 916 752 439 193
Total liabilities allocated*	40 215 098			43 889 096 125 373 192 136 827 119 228 670 693 249 561 743			1 157 802	1 263 577		395 416 785 431 541 536

n/a IFRS 16	Restaurants		Counters		Catering	Concessions and	Other, write off and adjustments		Total Group
	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
Turnover	52 256 980		84 199 032 129 311 563 170 041 614			32 206 438 101 637 505	115 037	273 989		213 890 018 356 152 140
Operating income net of Amortization, deprec. and impairment losses Amortization, depreciation and impairment	-1 902 771	11 311 420	11 614 480		23 886 304 -14 941 506	8 668 040		- -	-5 229 798	43 865 765
losses	7 974 593	4 203 388	13 640 369	11 460 347	3 520 490	3 563 913	688 165	761 478	25 823 617	19 989 126
Operating income (1)	-9 877 364	7 108 032	-2 025 889		12 425 957 -18 461 996	5 104 127	-688 165	-761 478	-31 053 415	23 876 639
Net financing cost									2 792 401	2 746 502
Other non-operating gains and losses									-291 381	152 302
Income tax expense									-5 350 584	3 787 332
Net profit									-28 786 613	17 495 106
Total assets allocated*	64 727 669		63 248 431 195 405 528 190 939 874 186 678 917 182 412 695				7 021 482	6 861 018		453 833 596 443 462 019
Total liabilities allocated*	7 982 699	10 423 626	24 886 585	32 496 336	45 391 145	59 270 722	229 824	300 099		78 490 253 102 490 783

* non allocated amounts on 30 September 2020 and 31 December 2019 refer essentially to other financial assets, loans and deferred taxes.

(1) In the Concessions and Catering segment, Travel brand, the exemption of RMGA (minimum guaranteed rents) was considered in the months of the state of alarm in Spain (April to June).

On September 30, 2020 and 2019 income and non-current assets by geography is presented as follows:

30 SEPTEMBER 2020	Portugal	Angola	Spain	Grupo
Total sales and services	138 908 464	5 654 886	69 326 668	213 890 018
Tangible fixed and intangible assets	152 596 966	20 309 426	70 188 688	243 095 080
Rights of use	83 142 305		724 529 201 163 387	285 030 221
Goodwill	7 605 482	-	77 246 456	84 851 938
Deferred tax asset	-	-	15 273 924	15 273 924
Financial investments - joint controlled subsidiaries	2 474 955	-	-	2 474 955
Non-current financial assets	543 378	-	-	543 378
Other financial assets	-	858 898	-	858 898
Other non-current assets	-	-	7 902 671	7 902 671
Total non-current assets	246 363 086		21 892 853 371 775 126	640 031 065

30 SEPTEMBER 2019	Portugal	Angola	Spain	Grupo
Total sales and services	190 256 994		10 132 491 155 762 655	356 152 140
Tangible fixed and intangible assets	154 917 073	24 711 669	58 176 447	237 805 189
Rights of use	68 718 822		2 397 489 264 897 142	336 013 453
Goodwill	7 605 482	-	83 240 845	90 846 327
Financial investments - joint controlled subsidiaries	2 612 144	-	-	2 612 144
Non-current financial assets	435 539	-	-	435 539
Other financial assets	-	12 405 449	-	12 405 449
Other non-current assets	-	-	12 159 079	12 159 079
Total non-current assets	234 289 060		39 514 608 418 473 513	692 277 181

7. RIGHTS OF USE

In the nine months period ended 30 September 2020 and in the year ending on 31 December 2019, entries in the value of rights of use, depreciation and accumulated impairment losses were as follows:

Rights of use

1 January 2019
Initial net amount	291 085 260
Additions	88 072 137
Decreases	-1 467 059
Depreciation in the year	55 878 164
Final net amount	321 812 178
31 December 2019
Cost	384 554 772
Accumulated depreciation	62 742 598
Net amount	321 812 178
	Rights of use
1 January 2020
Initial net amount	321 812 178

Initial net amount	321 812 178
Currency conversion	-316 117
Additions	7 934 505
Decreases	-545 650
Transfers	-750 910
Depreciation in the year	43 103 785

Final net amount	285 030 221

30 September 2020
Cost	388 676 091
Accumulated depreciation	103 645 870

8. TANGIBLE FIXED ASSETS

In the nine months period ended 30 September 2020 and in the year ending on 31 December 2019, entries in the value of tangible fixed assets, depreciation and accumulated impairment losses were as follows:

Land Buildings Equipment fixed Assets in progress Total 1 January 2019 Cost 14 163 037 267 021 639 138 067 977 30 839 024 3 574 147 453 665 824 Accumulated depreciation 243 567 105 564 602 100 649 863 19 662 947 - 226 120 979 Accumulated impairment - 10 207 629 730 304 43 212 - 10 981 144 Net amount 13 919 470 151 249 408 36 687 810 11 132 865 3 574 147 216 563 700 1 January 2019 Initial net amount 14 490 886 142 801 429 33 468 569 9 552 595 996 812 201 310 291 Change in accounting policy (IFRS 16) - -3 335 985 -899 062 -47 363 - -4 282 410 Changes in the perimeter - 1 600 000 845 363 119 304 - 2 564 667 Currency conversion -542 668 -1 209 078 -540 488 -117 382 -19 445 -2 429 061 Additions - 25 420 469 11 712 366 3 596 959 3 144 834 4 3 874 629 Decreases - -1 298 973 -119 844 -25 680 -43 908 -1 488 406 Transfers - 39 603 280 569 34 644 -504 148 -149 332 Depreciation in the year 28 749 12 999 373 8 257 847 1 995 447 - 23 281 415 Impairment in the year - 492 746 - - - 492 746 Impairment reversion - -724 062 -198 182 -15 236 - -937 480 Final net amount 13 919 470 151 249 408 36 687 810 11 132 865 3 574 147 216 563 700 31 December 2019 Cost 14 163 037 267 021 639 138 067 977 30 839 024 3 574 147 453 665 824 Accumulated depreciation 243 567 105 564 602 100 649 863 19 662 947 - 226 120 979 Accumulated impairment - 10 207 629 730 304 43 212 - 10 981 144 Net amount 13 919 470 151 249 408 36 687 810 11 132 865 3 574 147 216 563 700 Other tangible Tangible Assets Land Buildings Equipment fixed Assets in progress Total 1 January 2020 Initial net amount 13 919 470 151 249 408 36 687 810 11 132 865 3 574 147 216 563 700 Currency conversion -264 963 -449 726 -161 686 -30 102 -65 310 -971 787 Additions - 6 546 045 2 107 763 537 013 1 048 788 10 23 9 609 Decreases - -424 337 -153 591 -35 783 -20 006 -633 716 Transfers - 1 604 793 961 823 102 124 -2 566 484 102 25 5 Depreciation in the year 15 943 10 178 984 6 104 654 1 635 184 - 17 934 765 Impairment in the year - 627 296 - - - 627 296 Impairment reversion - -20 610 -18 735 - - -39 345 Final net amount 13 638 564 147 740 513 33 356 199 10 070 933 1 971 134 206 777 343 30 September 2020 Cost 13 877 833 272 400 321 139 750 450 31 253 578 1 971 134 459 253 316 Accumulated depreciation 239 269 114 457 104 105 701 491 21 139 643 - 241 537 507 Accumulated impairment - 10 202 704 692 760 43 002 - 10 938 466			Other tangible	Tangible Assets







































Net amount 13 638 564 147 740 513 33 356 199 10 070 933 1 971 134 206 777 343

The investment of 10 million euros in the first nine months of 2020 mainly refers to the opening of concessions in the travel Spain segment (1.5 million euros), and the remaining investment in five KFCs, two Burger King, two Taco Bell and one restaurant Ribs.

In 2019, an investment of around 54 million was made in the opening of 40 new units, mainly 14 Burger King, 3 KFC and 3 Pizza Hut in Portugal, and 5 concessions at the airports of Alicante, Barcelona and Las Palmas, 2 Burger King and 2 Pans in Spain. On part of the investment in Spain, leasing contracts were made in the amount of around 10 million (rights of use, note 7).

Tangible Fixed Assets - impairment tests

On September 30, 2020 and December 31, 2019, impairment tests were carried out on the Group's main tangible assets that showed signs of impairment. The methods and main assumptions used in the preparation of the impairment tests were as follows:

		2020	2019
	Portugal	Spain	Portugal	Spain
Method used		Use Value		Use Value
Base used*	Projections with perpetuity	Projections with perpetuity	Projections with perpetuity	Projections with perpetuity
Periodo Utiizado (anos) Discount rate for the period	5	5	5	5
(WACC)**	7,4%/7,8%/8,2%	6,5%/6,8%/7,2%	5.6%	5.2%

* The discount rate presented was calculated based on the WACC (Weighted Average Cost of Capital) methodology.

** According to the business segment, Fast Food (Burguer King and KFC), Restaurants and Travel, respectively.

The perpetuity growth rate used in the cash flow projections is 2.5%.

The tests carried out on the Ibersol group restaurants with signs of impairment resulted in the need to record impairment in the amount of 627,296 euros and 492,745 euros as at 30 September 2020 and 31 December 2019, respectively, and impairment reversals in the amounts 39,345 euros and 937,480 euros, in the same period, related to tangible fixed assets, as follows:

September 2020
Unit	Recoverable amount (use value)	Assets account value	Impairment losses
FresCo (1 unit)	-	24 743	24 743
Pizza Móvil (1 unit)	-	47 374	47 374
Ribs (1 unit)	-	58 123	58 123
Pans & C.ª (2 units)	211 779	708 836	497 057
TOTAL	211 779	839 075	627 296

	Year 2019
Unit	Recoverable amount (use value)	Assets account value	Impairment losses
Ribs (1 unit)	539 050	864 530	325 480
Pizza Movil (2 units)	-	167 265	167 265
TOTAL	539 050	1 031 795	492 745

The reversals of impairment as at 30 September 2020 and 31 December 2019 are presented as follows:

Units	Sep/20	Ano 2019
Pizza Hut (2 units)	-	403 720
Burger King (1 unit)	-	262 209
Pasta caffe (1 unit)	-	211 714
Roulotte (1 unit)	-	59 837
Pans & C.ª (1 unit)	23 247	-
Ribs (1 unit)	16 098	-
TOTAL	39 345	937 480

Sensitivity analysis

From the sensitivity analysis carried out, with an increase of 1% in the discount rate used for each of the segments, it did not lead to signs of additional impairments.

9. INTANGIBLE ASSETS AND GOODWILL

Goodwill and intangible assets are broken down as follows:

	Sep/20	Dec/19

Goodwill	84 851 938	87 968 225
Intangible assets	36 317 737	36 440 964
	121 169 675	124 409 189

The distribution of Goodwill allocated to the segments is presented as follows:

	Sep/20	Dec/19

Restaurants	8 624 542	11 740 829
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
	84 851 938	87 968 225

In the nine months period ended 30 September 2020 and in the year ending on 31 December 2019, entries in the value of intangible assets and goodwill, amortization and accumulated impairment losses were as follows:

	Goodwill	Brands	Industrial property	Other intangible Assets	Intangible Assets in progress	Total
1 January 2019
Cost	90 846 327	22 000 000	42 232 722	12 960 943	2 370 483	170 410 475
Accumulated amortization	-	2 383 333	26 100 687	11 211 040	-	39 695 061
Accumulated impairment	-	-	3 681 055	41 875	-	3 722 930
Net amount	90 846 327	19 616 667	12 450 980	1 708 028	2 370 483	126 992 484
1 January 2019
Initial net amount	90 846 327	19 616 667	12 450 980	1 708 028	2 370 483	126 992 484
Changes in the perimeter	1 121 898	-	-	-	-	1 121 898
Change in accounting policy (IFRS 16)	-	-	-	-	-	-
Currency conversion	-	-	-74 408	-	-100 681	-175 089
Additions	-	-	3 372 763	317 030	244 781	3 934 574
Decreases	-	-	-37 273	-	-57 258	-94 530
Transfers	-	-	442 100	600 000	-1 042 100	-
Amortization in the year	-	1 100 000	1 737 240	532 903	-	3 370 143
Impairment in the year	4 000 000	-	0	-	-	4 000 000
Final net amount	87 968 225	18 516 667	14 416 923	2 092 155	1 415 225	124 409 189
31 December 2019
Cost	87 968 225	22 000 000	45 735 432	13 793 294	1 415 225	170 912 176
Accumulated amortization	-	3 483 333	27 637 453	11 659 270	-	42 780 056
Accumulated impairment	-	-	3 681 055	41 875	-	3 722 930
Net amount	87 968 225	18 516 667	14 416 923	2 092 155	1 415 225	124 409 189

	Goodwill	Brands	Industrial property	Other intangible Assets	Assets in progress	Total
1 January 2020
Initial net amount		87 968 225 18 516 667	14 416 923	2 092 155	1 415 225	124 409 189
Currency conversion	-	-	-26 387	-	-40 305	-66 692
Additions	-	-	1 690 260	-	219 055	1 909 315
Decreases	-	-	-22 677	-	-	-22 677
Transfers	-	-	899 342	22 500	-279 620	642 222
Amortization in the year	-	825 000	1 393 827	366 567	-	2 585 394
Impairment in the year	3 116 287	-	-	-	-	3 116 287
Final net amount		84 851 938 17 691 667	15 563 634	1 748 088	1 314 355	121 169 675
30 September 2020
Cost		84 851 938 22 000 000	48 189 094	13 565 559	1 314 354	169 920 945
Accumulated amortization	-	4 308 333	28 944 405	11 775 597	-	45 028 335
Accumulated impairment	-	-	3 681 055	41 874	-	3 722 929
Net amount		84 851 938 17 691 667	15 563 634	1 748 088	1 314 355	121 169 675

On September 30, 2020 and December 31, 2019, impairment tests were carried out on the Group's main assets that showed signs of impairment, and an impairment of 3,116,287 euros was recognized in Goodwill.

Goodwill and brands - Impairment tests

Goodwill is not amortized. The Group performs impairment tests on goodwill annually, or whenever there are signs of impairment.

As of September 30, 2020 and December 31, 2019, the methods and main assumptions used in the preparation of impairment tests for goodwill and Group brands were as follows:

	2020			2019
	Portugal	Spain	Spain (Vidisco)	Portugal	Spain	Spain (Vidisco)
Method used		Use Value			Use Value
Base used*	Projections with perpetuity	Projections with perpetuity	Projections with perpetuity	Projections with perpetuity	Projections with perpetuity	Projections with perpetuity
Used Period (years)	5	5	5	5	5	5
Growth rate in perpetuity	2.5%	2.5%	2.5%	2.5%	2.5%	2.5%
Discount rate for the period (WACC)**	7,4%/7,8%/8,2%	6,5%/6,8%/7,5%	7,50%	5.6%	5.2%	8%

* The discount rate presented was calculated based on the WACC (Weighted Average Cost of Capital) methodology.

** According to the business segment, Fast Food (Burguer King and KFC), Restaurants and Travel, respectively.

In the interim accounts for the third quarter, given the impacts of Covid-19 in the catering sectors, impairment tests were carried out on Goodwill, with the assumptions for the evolution of the different segments, the most recent market inputs and the evolution of the operation, in the gradual reopening restaurants, as well as local and international entities that operate in the air transport market, with decisive relevance for the Travel segment.

The discount rates adopted correspond to the weighted average cost of capital (WACC) estimated for each of the segments operated in Portugal and Spain with the highest risk in the segments that show a trend of greater resistance to the recovery from the pandemic crisis.

Results of impairment tests:

As of September 30, 2020, the tests performed resulted in the need to record an impairment in the amount of 3,116,287 euros in goodwill (restaurants), as follows:

September 2020
Unit		Recoverable amount (use value)	Assets account value	Impairment losses
Vidisco (CFU)		-	3 116 287	3 116 287
	TOTAL	-	3 116 287	3 116 287

Following the decision not to reopen nine Pizza Móvil restaurants in Spain, the need arose to constitute impairment for the total amount of 3.1 million euros. It should also be noted that, during the second quarter of the year, the remaining 17 restaurants resumed their activity.

Additional analyzes of signs of impairment and revision of projections did not result in the determination of losses.

Sensitivity Analysis

In the current climate of uncertainty, the assumptions used are sensitive to changes in macroeconomic indicators and to the business assumptions used by management. Considering the uncertainties regarding the goodwill recovery value due to the fact that they are based on the best information available at the date, changes in the assumptions could result in impacts in determining the level of impairment and, consequently, in the results.

The sensitivity analysis carried out, with an increase of 1% in the discount rate used for each of the segments, did not lead to signs of additional impairments.

10. INCOME PER SHARE

Income per share in the six months period ended 30 September 2020 and 2019 was calculated as follows:

	Sep/20	Sep/19
Profit payable to shareholders	-36 886 324	10 525 504
Mean weighted number of ordinary shares issued	36 000 000	36 000 000
Mean weighted number of own shares	-3 599 981	-3 599 981
	32 400 019	32 400 019
Basic earnings per share (€ per share)	-1,14	0,32
Earnings diluted per share (€ per share)	-1,14	0,32
Number of own shares at the end of the year	3 599 981	3 599 981

Since there are no potential voting rights, the basic earnings per share is equal to earnings diluted per share.

11. LOANS AND LEASE LIABILITIES

11.1 Loans

On 30 September 2020 and 31 December 2019, current and non-current loans were broken down as follows:

Non-current	Sep/20	Dec/19
Bank loans	60 817 706	16 763 367
Commercial paper programmes	76 000 000	58 000 000
	136 817 706	74 763 367
Current	Sep/20	Dec/19
Bank overdrafts	3 930 399	3 739 953
Bank loans	30 038 396	23 659 362
Commercial paper programmes	7 000 000	19 000 000
	40 968 795	46 399 315
Total loans	177 786 501	121 162 682

There are no significant differences between the balance sheet amounts and fair value of current and non-current loans.

Long-term loans contracted under the acquisition of Eat Out Group include clauses with the following financial covenants:

Financial Covenants	SPAIN PORTUGAL (EOG Consolidated) (Consolidated)
Debt/EBITDA	2,5x to 1,5x from 2017 to 2021 with reductions of 0.25 per year	3,5x or 4,5x
EBITDA/Financial Cost	5x	-
Equity/Assets	-	30%

The Group is monitoring, together with the financial institutions, the evolution of compliance with the financing covenants, taking into account the assessment to be carried out on them at the end of the year 2020.

11.2 Lease liabilities

On 30 September 2020 and December 31, 2019, the company has commitments made to third parties, arising from lease contracts, namely real estate contracts, as follows:

		set/20			Dec/19
		Não			Não
		Corrente	corrente	Total	Corrente	corrente	Total

Leases		48 069 815	275 125 106	323 194 921	53 777 115	286 206 086	339 983 201
	TOTAL	48 069 815	275 125 106	323 194 921	53 777 115	286 206 086	339 983 201

12. CONTINGENT ASSETS AND LIABILITIES

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 2020 and 31st December 2019, responsibilities not recorded by the companies and included in the consolidation consist mainly of bank guarantees given on their behalf, as shown below:

	Sep/20	Dec/19

Bank guarantees	25 462 685	26 329 519

13. COMMITMENTS

On September 30th, 2020 there are no significant commitments for contracted investments not included in these financial statements.

14. IMPAIRMENT

Changes during the nine months period ended on 30 September 2020 and in the year 2019, under the heading of asset impairment losses were as follows:

	Sep/20
	Starting balance	Currency conversion	Cancellation and reclassif.	Impairment assets disposals	Impairment in the year	Impairment reversion	Closing balance
Tangible fixed assets	10 981 144	-	-	-630 629	627 296	-39 345	10 938 466
Intangible assets	3 722 929	-	-	-	-	-	3 722 929
Stocks	74 981	-	-	-	-	-	74 981
Other current assets Other financial assets	2 585 661	-5 484	-1 158 744	-	818 915	-	2 240 348
(current and non-current)	707 366	-	-	-	130 927	-	838 293
	18 072 081	-5 484	-1 158 744	-630 629	1 577 138	-39 345	17 815 017

	Dec/19
	Starting balance	Currency conversion	Cancellation and reclassif.	Impairment assets disposals	Impairment in the year	Impairment reversion	Closing balance
Tangible fixed assets	11 632 624	-	-	-206 746	492 746	-937 480	10 981 144
Intangible assets	3 722 929	-	-	-	-	-	3 722 929
Stocks	74 981	-	-	-	-	-	74 981
Other current assets Other financial assets	2 931 120	-10 923	-931 803	-	1 002 267	-405 000	2 585 661
(current and non-current)	940 762	-	-	-	-	-233 396	707 366
	19 302 416	-10 923	-931 803	-206 746	1 495 013	-1 575 876	18 072 081

15. FINANCIAL RISK MANAGEMENT

15.1 Financial risk factors

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.

a) Market risk

i) Currency exchange risk

With regard to exchange rate risk, the Group follows a natural hedge policy using financing in local currency. Since the Group is mainly present in the Iberian market, bank loans are mainly denominated in euros and the volume of purchases outside the Euro zone are of irrelevant proportions.

The 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. Financing concerning Angolan subsidiaries are denominated in the local currency, the same in which the income is generated. In view of the current limitations on payments abroad, the group adopted a policy of monthly monitoring of credit balances in foreign currency and its full coverage with the acquisition of Treasury Bonds of the Republic of Angola, indexed to the USD.

Currency exchange rate used for conversion of the transactions and balances denominated in Kwanzas, were respectively:

Sep/20
Euro exchange rates		Rate on June, 30	Average interest 1st
(x foreign currency per 1 Euro)		2020	Semester 2020
Kwanza de Angola (AOA)		725,163	651,890

Dec/19
Euro exchange rates	(x	Rate on December,	Average interest rate
foreign currency per 1 Euro)		31 2019	year 2019
Kwanza de Angola (AOA)		536,193	408,497

ii) Price risk

The group is not greatly exposed to the merchandise price risk.

iii) Interest rate risk (cash flow and fair value)

With the exception of the Angolan State Treasury Bonds (TB's), the group has no interest-bearing assets with significant interest. Therefore, the profit and cash flows from the investment activity are substantially independent of changes in the market interest rate. As regards the Angolan State Treasury Bonds, interest is fixed, so there is also no risk.

The Group's main interest rate risk arises from liabilities, namely long-term loans. Loans issued at variable rates expose the Group to cash flow risk associated with interest rates. Loans issued at fixed rates expose the Group to the fair value risk associated with the interest rate. With the current level of interest rates, the policy of the group is, in financing of greater maturity, to proceed with the fixing of interest rates of around 50% of the amount owed.

Interest-bearing debt bears interest at a variable rate, having been part of an interest rate setting through an interest rate swap derivative. The interest rate swap contracts to cover the interest rate risk of part of the loans (commercial paper) of 16 million euros are based on interest maturities and repayment plans identical to the loan conditions. In addition, 24 million euros of debt contracted at a fixed rate.

Based on simulations carried out on September 30, 2020, an increase of another 100 basis points in the interest rate, keeping everything else constant, would have a negative impact on the net profit for the period of 465 thousand euros (513 thousand euros in December 2019).

b) Credit risk

The Group's main activity is carried out with sales paid in cash, debit or credit card (meal cards, etc.) or other electronic payment, so the Group has no relevant credit risk concentrations. In relation to customers, the risk is limited to the Catering business and sales of goods and services to franchisees, which represent 6.4% of the consolidated turnover. The Group has policies that 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, with no information on the rating assigned to these entities.

The Group's cash and cash equivalents essentially include deposits arising from cash generated by operations and respective deposits in current accounts. Excluding these amounts, the value of financial investments is reduced on September 30, 2020, with the exception of the aforementioned TB's from the Republic of Angola in the amount of 11 million euros, subject to country risk.

Deposits and other financial investments are spread over several credit institutions, therefore, there is no concentration of these financial assets.

c) Liquidity risk

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.

At 30 September 2020, current liabilities amounted to 162 million euros, compared to 118 million euros in current assets. This disequilibrium is, in part, a financial characteristic of this business and to which it adds a large component of leases, in other part it is due to some Commercial Paper programs, with termination clauses, in which reimbursement on the termination date is considered regardless of the deadlines for which they are hired and still circumstantially, the option for issuing under contracts of lesser maturity to the detriment of other programs of greater maturity that remain unused and consequently with amounts available for coverage. During the year 2020, the issue of Commercial Paper is considered to be considered as short-term debt (9,000,000 euros). Loans in the form of commercial paper issues are classified as non-current liabilities when they are guaranteed to be placed for a period of more than one year and it is the intention of the Group's Board of Directors to use this funding source for a period of more than one year. With the restructuring of the financing due in 2020 and the financing contracted in the second quarter, the Group will have sufficient available means to settle the total current liabilities.

As of September 30, 2020, surplus availability and other investments amounted to 53 million euros, corresponding to 28% of interest-bearing liabilities. On the other hand, it has contracted and unused lines that amount to 40 million euros.

After September 30, 2020, the payment of € 15M financing has already been renegotiated, moving from short to medium to long term.

The following table shows the Group financial liabilities (relevant items), considering contractual cash-flows:

	to September 2021	from September 2021 to 2039
Bank loans and overdrafts	40 968 795	136 817 706
Liability for leases	48 069 815	275 125 106
Other non-current liabilities	-	6 026
Accounts payable to suppliers and
accrued costs	48 751 212	-
Other current liabilities	5 881 362	-
Total	143 671 184	411 948 838

15.2 Capital risk

a) Gearing ratio

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.

The financial gearing ratio without the application of IFRS16, on September 30, 2020 and December 31, 2019, was 39% and 26%, respectively, as shown in the table below:

		set/20	30/09/2020 (n/a IFRS16)	31/12/2019 (n/a IFRS16)	Dec/19
Liability for leases		323 194 921	-	-	339 983 201
Bank loans		177 786 501	187 628 631	132 095 130	121 162 682
Other financial assets		-10 987 830	-10 987 830	-15 626 772	-15 626 772
Cash and bank deposits		-61 411 905	-61 411 905	-38 424 757	-38 424 757
Net indebtedness		428 581 688	115 228 897	78 043 601	407 094 354
Equity		175 363 952	183 463 663	223 729 770	214 228 476
Total capital		603 945 640	298 692 560	301 773 371	621 322 830
	Gearing ratio	71%	39%	26%	66%

b) Risk of franchise agreements

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 this moment, a contract is signed for the implementation of 80 KFC restaurants in the period between May 2017 and May 2022 and whose implementation program is being revised.

15.3 Estimated fair value

The fair value of financial instruments commercialised in active markets (such as publicly negotiated derivatives and securities for negotiation) 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.

16. OTHER ASSETS AND LIABILITIES

16.1 Other current assets and liabilities

Other current assets and liabilities on 30th September 2020 and 31st December 2019 are broken down as follows:

Other current assets

	Sep/20	Dec/19

Clients	6 107 769	9 398 831
State and other public entities	4 683 807	6 264 376
Other debtors	18 390 581	8 659 243
Advances to suplliers	219 248	226 991
Advances to fixed suppliers	483 227	539 636
Accruals and income	3 347 440	7 600 004
Deferred costs	2 206 331	1 577 647
Other current assets	35 438 403	34 266 728
Accumulated impairment losses	2 240 349	2 585 661
	33 198 054	31 681 067
Other current liabilities
	Sep/20	Dec/19
Other creditors	5 881 362	4 576 409
State and other public entities	6 337 517	9 143 072
Deferred income	652 025	846 539
	12 870 904	14 566 020

16.2 Other non-current assets and liabilities

The breakdown of other non-current assets as at 30 September 2020 and 31 December 2019 is presented as follows:

	Sep/20	Dec/19
Other non-current assets (1)	7 902 671	8 164 336
Credits granted to third parties	-	464 334
Impairment balances	-	-390 559
	7 902 671	8 238 111

(1) balance of other non-current debtors is mainly comprised of deposits and securities in Spain resulting from lease agreements. Trade accounts receivable from other debtors are initially recognized at fair value and, in the case of medium and long-term debt, are subsequently measured at amortized cost using the effective interest method, less impairment.

Impairment refers to a balance receivable from a Vidisco franchisee, witch result in a debt agreement, in July 2020.

FINANCIAL EXPENSES AND LOSSES / (INCOME AND GAINS)

Net financing cost on 30th September 2020 and 2019 are broken down as follows:

	2020	2019

Interest on rentals liabilities (IFRS16)	12 571 109	13 829 258
Interest paid	2 512 220	2 857 060
Interest earned	-794 991	-1 067 655
Currency exchange differences	102 702	-
Other financial costs and income	972 470	957 097
	15 363 510	16 575 760

The detail of other financial expenses and losses / (income and gains) is presented as follows:

	2020	2019

Financial instruments - cash flow hedge	-35 754	20
Commercial paper programmes charges	359 582	392 341
Discounted value	-	326
TB's Impairment (IFRS9)	130 927	-86 871
Other commissions	66 000	100 375
Other financial cost and gains	451 715	550 906
	972 470	957 097

18. INCOME TAX

Income taxes recognized as of September 30, 2020 and 2019 are detailed as follows:

	Sep/20	Sep/19
Current taxes	361 369	3 414 240
Insufficiency (excess) of income tax	-17 293	300 811
Deferred taxes	-10 669 572	-1 906 002
	-10 325 496	1 809 049

The effective tax rate on profits was 22% on September 30, 2020 and 15% in the same period of 2019, as follows:

		set/20	set/19
Profit before tax		-47 211 820	12 334 553
Income tax expense		-10 325 496	1 809 049
	Effective tax rate	22%	15%

On September 2019 the estimated effective tax rate in the period was lower than the nominal rate, mainly due to the tax benefits obtained under the terms of the Investment Tax Code (CFI).

19. OTHER FINANCIAL ASSETS

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:

	Sep/20		Dec/19
		Non			Non
	Current	current	Total	Current	current	Total

Treasury bonds	10 831 866	994 256	11 826 123	13 501 309	2 832 828	16 334 138
Sub-total	10 831 866	994 256	11 826 123	13 501 309	2 832 828	16 334 138

Accumulated impairment losses	702 935	135 358	838 293	584 688	122 678	707 366
TOTAL	10 128 931	858 898	10 987 830	12 916 621	2 710 150	15 626 772

The Probability of Default and Loss Given Default indices are in line with the publication of Moody's and S & P.

20. CASH AND CASH EQUIVALENTS

On 30th September 2020 and 31st December 2019, cash and cash equivalents are broken as follows:

	Sep/20	Dec/19
Cash	816 206	1 065 534
Bank deposits	60 595 199	37 358 723
Treasury applications	500	500
Cash and bank deposits in the balance sheet	61 411 905	38 424 757
Bank overdrafts	-3 930 399	-3 739 953

Cash and cash equivalents in the cash flow statement	57 481 506	34 684 804

21. ACCOUNTS PAYABLE TO SUPPLIERS AND ACCRUED COSTS

On 30th September 2020 and 31st December 2019, accounts payable to suppliers and accrued costs were broken down as follows:

	Sep/20	Dec/19

Suppliers c/ a	27 873 485	32 908 102
Suppliers - invoices pending approval	837 744	5 548 999
Suppliers of fixed assets c/ a	4 316 222	19 231 301
Total accounts payable to suppliers	33 027 451	57 688 402

	Sep/20	Dec/19

Accrued costs - Payable insurance	192 912	109 426
Accrued costs - Payable remunerations	10 560 466	8 201 758
Accrued costs - Performance bonus	-	1 910 792
Accrued costs - Rent and lease (1)	1 181 431	1 842 319
Accrued costs - External services	12 162 076	6 219 141
Accrued costs - Other	2 187 342	1 844 770
Total acrrued costs	26 284 227	20 128 206

Total accounts payable to suppl.and accrued costs	59 311 678	77 816 608

(1) With the adoption of IFRS 16, accrued costs- rents and lease include only the amount related to variable rents and additions to contracts that are not relevant for the adoption of this standard.

22. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions with related parties in the nine months period ended in September 2020 and in the year 2019 can be presented as follows:

	Parent entiti e		Jointly controlled entitie		Associated entiti e		Other enti ties
	3rd T 2020	Year 2019	3rd T 2020	Year 2019	3rd T 2020	Year 2019	3rd T 2020	Year 2019
Supplies a nd services	620 592	1 000 000	2 623 109	3 767 298	-	-	-	-
Rental lease	-	-	-	-	-	-	823 858	1 520 719
Accounts Payabl e	-	-	1 091 176	1 069 114	-	-	-	-
Other current assets	-	25 000	-	-	-	-	-	-
Other non current assets	-	-	-	-	300 000	300 000	-	-

The parent company of Ibersol SGPS S.A. is ATPS - SGPS, SA, holder of 19.767.058 shares. The shareholder company provides administration and management services for the group, under a service provision agreement with the subsidiary Ibersol, Restauração, SA. company directors, Dr. António Carlos Vaz Pinto de Sousa and Dr. António Alberto Guerra Leal Teixeira, exercise their positions without the same company having to incur any additional charges. The company does not pay any remuneration directly to any of its directors.

Dr. António Carlos Vaz Pinto de Sousa and Dr. António Alberto Guerra Leal Teixeira each hold 2.520 shares of Ibersol SGPS, SA The voting rights attributable to ATPS are also attributable to António Carlos Vaz Pinto de Sousa and António Alberto Guerra Leal Teixeira under the terms of paragraph b) of no. 1 of article 20 and no. 1 of 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, the companies CALUM - SERVIÇOS E GESTÃO, SA with NIPC 513799486 and DUNBAR - SERVIÇOS E GESTÃO, SA with NIPC 513799257, which, jointly, hold the majority of the share capital of ATPS.

Other entities refer to entities controlled by other holders of significant influence in the parent company of the Ibersol Group. The amounts presented refer to the rents paid in the year and, as a result of the adoption of IFRS16, do not correspond to the amount of lease expenses reflected in the financial statements.

Transactions with related parties were carried out under normal market conditions, thus corresponding to the values that would be charged between unrelated companies.

23. OTHER INFORMATION

COVID-19

In the third quarter of 2020, the Group's activity continued to be affected by the impact of the Covid-19 pandemic, however there was a gradual resumption of activity in the various segments of the Group, which was nonetheless conditioned to health standards in order to ensure safety and reduce the risk of contagion.

During this period, the resumption of the Group's activity was conditioned by:

50% reduction in restaurant capacity
limitation of the opening hours of shopping centers in the Lisbon Region
interruptions of air corridors in England and Germany
absence of an audience at football stadiums and no events

With the spread of the second wave of the Covid-19 pandemic, first in Spain and then in Portugal, the Group again faced limitations in its operations, both in terms of sales channels and opening hours, due to the measures implemented in different countries and in the different regions. At this time, the depth of the containment measures that are still to be enacted by the end of the year is unpredictable.

Currently, the Group is monitoring, together with financial institutions, the evolution of covenants associated with financing, taking into account the assessment to be made on them at the end of the year 2020.

Finally, with regard to short-term treasury cash, it should be noted that the Group, in July, completed the refinancing of 15 million euros, so that on September 30, 2020, the Group has surpluses of cash and other investments amounting to 56 million euros, which correspond to 30% of interest-bearing liabilities. In addition the Group has contracted and unused lines that amount to 40 million euros.

24. SUBSEQUENT EVENTS

After September 30, 2020 and to the present date, no relevant subsequent event has occurred that could have a material impact on the interim consolidated condensed financial statements, which has not been disclosed in the notes to the financial statements.

AI Terminal

Ibersol

1932_10-q_2020-11-20_1e4ffe22-aa45-4665-bdb8-149a6da1caf0.pdf

IBERSOL – SGPS, SA

Consolidated Report Report & Accounts 9M 2020

Consolidated Management Report

Update COVID-19

Amortization and impairment losses

Financial Situation

Ibersol S.G.P.S., S.A.

Interim Consolidated Condensed Financial Statements

IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF INTERIM CONSOLIDATED FINANCIAL POSITION (values in euros) ON SEPTEMBER 30, 2020

FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER, 2020 AND 2019 (values in euros) IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF RESULTS AND OTHER INTERIM CONSOLIDATED INTEGRAL INCOME

IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF RESULTS AND OTHER INTERIM CONSOLIDATED INTEGRAL INCOME FOR THE THIRD TRIMESTER OF 2020 AND 2019

IBERSOL S.G.P.S., S.A. CONDENSED STATEMENT OF CHANGES IN INTERIM CONSOLIDATED EQUITY

for the nine months period ended 30th September, 2020 and 2019

IBERSOL S.G.P.S., S.A. Condensed Statement of Interim Consolidated Cash Flows for the nine months period ended 30 September, 2020 and 2019

IBERSOL SGPS, S.A.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIOD ENDED ON 30 SEPTEMBER 2020

1. INTRODUCTION

2. MAIN ACCOUNTING POLICIES

3. New standards, amendments and interpretation adopted

4. IMPORTANT ACCOUNTING ESTIMATES AND JUDGMENTS

a) Estimated impairment of goodwill

c) Estimated lifetime and impairment of tangible and intangible assets

d) Impairment losses foreseen

e) Lease term and Incremental financing rates

f) COVID 19

5. INFORMATION ABOUT THE COMPANIES INCLUDED IN THE CONSOLIDATION AND OTHER COMPANIES

5.1. The following group companies were included in the consolidation on 30 September 2020 and 30 September and 31 December 2019:

5.2. Alterations to the consolidation perimeter

5.2.1. Acquisition of new companies

5.2.2. Disposals

6. INFORMATION PER SEGMENT

7. RIGHTS OF USE

Rights of use

8. TANGIBLE FIXED ASSETS

Tangible Fixed Assets - impairment tests

9. INTANGIBLE ASSETS AND GOODWILL

Goodwill and brands - Impairment tests

Results of impairment tests:

Sensitivity Analysis

10. INCOME PER SHARE

11. LOANS AND LEASE LIABILITIES

11.1 Loans

11.2 Lease liabilities

12. CONTINGENT ASSETS AND LIABILITIES

13. COMMITMENTS

14. IMPAIRMENT

15. FINANCIAL RISK MANAGEMENT

15.1 Financial risk factors

a) Market risk

i) Currency exchange risk

ii) Price risk

iii) Interest rate risk (cash flow and fair value)

b) Credit risk

c) Liquidity risk

15.2 Capital risk

a) Gearing ratio

b) Risk of franchise agreements

15.3 Estimated fair value

16. OTHER ASSETS AND LIABILITIES

Other current assets

18. INCOME TAX

19. OTHER FINANCIAL ASSETS

20. CASH AND CASH EQUIVALENTS

21. ACCOUNTS PAYABLE TO SUPPLIERS AND ACCRUED COSTS

22. TRANSACTIONS WITH RELATED PARTIES

23. OTHER INFORMATION

COVID-19

24. SUBSEQUENT EVENTS

More from Ibersol

Talk to a Data Expert