(all figures in EUR millions unless statedotherwise)
1
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
(all figures in EUR millions unless statedotherwise)
2
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Wszystkojestmożliwe!CondensedSeparateFinancialStatementsfor12monthsended31December2019AmRestHoldingsSE28FEBRUARY2020
(all figures in EUR millions unless statedotherwise)
3
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
(all figures in EUR millions unless statedotherwise)
4
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
31 December
31 December
2020
2019
Notes
Assets
Intangible assets
0.2
0.1
Non-current investment and loans in group companies
647.7
615.4
Equity instruments
6.1
390.8
387.2
Loans to group companies
6.3
256.9
228.2
Non-current financial investments
6.3
0.1
76.2
Other non-current financial assets
-
0.1
Deferred tax assets
11
2.5
-
Total non-current assets
650.5
691.8
Trade and other receivables
6.4
3.6
22.5
Other receivables from group companies
6.3
1.2
1.1
Other trade receivables
6.3
1.0
20.3
Current tax assets
11
1.4
1.0
Other tax receivables
11
-
0.1
Investments and loans in group companies
6
49.2
23.3
Loans to group companies
6.3
45.8
20.6
Other financial assets
3.4
2.7
Other current assets
0.1
-
Cash and cash equivalents
7
74.2
9.5
Total current assets
127.1
55.3
TOTAL ASSETS
777.6
747.1
Capital and Reserves without valuation adjustments
8
Share capital
22.0
22.0
Share premium
237.3
237.3
Reserves
60.9
35.1
Treasury shares and equity instruments
(6.5)
(7.5)
Profit for the period
34.3
25.8
Other equity instruments
(23.4)
(25.4)
Adjustments for changes in value
(6.7)
18.4
TOTAL EQUITY
317.9
305.7
Liabilities
Non-current provisions
9, 10
0.1
0.5
Non-current financial liabilities
6.5
399.8
394.8
Loans and borrowings from financial institutions
322.3
293.8
Other financial debt
77.5
101.0
Deferred tax liabilities
11
-
8.4
Total non-current liabilities
399.9
403.7
Loans and borrowings from financial institutions
6.5
28.5
30.0
Other financial debt
6.5
25.1
-
Current debts with group companies
6.5
1.7
1.7
Trade and other payables
6.6
4.5
6.0
Trade and other payables to third parties
1.9
0.3
Trade and other payables to group companies
1.8
1.7
Personnel (salaries payable)
0.3
0.2
Other payables with tax administration
11
0.5
3.8
Total current liabilities
59.8
37.7
TOTAL LIABILITES
459.7
441.4
TOTAL EQUITY AND LIABILITIES
777.6
747.1
The accompanying notes are an integral part of the Annual Accounts for 2020
(all figures in EUR millions unless statedotherwise)
5
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Revenues
49.0
17.2
Dividends received from subsidiaries
6.1 and 12.1
7.6
3.1
Net income from the stock option plan
12.1
0.2
7.6
Finance income from group companies
12.1 and 14
7.7
6.5
Results from financial assets held for sale
6.3 and 12.1
33.5
-
Personnel expenses
12.2
(1.3)
(1.0)
Other operating expenses
12.3
(6.4)
(2.7)
Impairments of credits and receivables with group companies
6.4
-
(0.1)
Impairments of investments in group companies
6.1
0.8
(5.3)
Gains (losses) on disposal of investments in group companies
-
27.0
Results from operating activities
42.1
35.1
Finance expenses
(13.1)
(11.0)
Exchange rates gains and losses
2.8
(0.5)
Net finance income (expense)
13
(10.3)
(11.5)
Profit before income tax
31.8
23.6
Income tax expense
11
2.5
2.2
Profit for the period
34.3
25.8
The accompanying notes are an integral part of the Annual Accounts for 2020
Notes
31 December2020
31 December2019
Profit for the period
34.3
25.8
Income from measurement of non-current financial investments
6.3
(33.5)
31.7
Tax impact on adjustment in changes in value
8.4
(8.4)
Total recognised income and expenses for the period
9.2
49.1
The accompanying notes are an integral part of the Annual Accounts for 2020
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Notes
31 December 2020
31 December 2019
Cash flows from operating activities
Profit before tax
31.8
23.6
Adjustments:
(39.3)
(27.3)
Impairment losses
(0.8)
5.4
Dividends from subsidiaries
12
(7.6)
(3.1)
Share based payment plan revenue
12
(0.2)
(7.6)
Gains/(losses)ondisposalofinvestmentsingroup companies
-
(27.0)
Finance income
12
(7.7)
(6.5)
Finance expenses
12 and 13
13.1
11.0
Exchange gains/losses
13
(2.8)
0.5
Results from financial assets held for sale
(33.5)
-
Personnel expenses SOP
0.2
Changes in operating assets and liabilities
(1.4)
(8.7)
Trade and other receivables
6
0.8
9.2
Trade and other payables
6
(2.2)
(0.7)
Other current assets and liabilities
-
(17.2)
Other cash flows from operating activities
(1.4)
(14.3)
Interest paid
(10.9)
(10.1)
Interest received
5.1
2.2
Other payments
(0.5)
Dividends received from subsidiaries
12
5.3
3.1
Income tax payment
11
(0.4)
(9.5)
Net cash provided by operating activities
(10.3)
(26.7)
Cash flows from investing activities
Increase in investments loans and borrowings with group companies
6
(71.8)
(64.8)
Proceeds from investment loans and borrowings with group companies
6
39.4
27.2
Proceeds from other financial assets
75.5
Increase in intangible assets
(0.1)
(0.1)
Net cash used in investing activities
43.0
(37.7)
Cash flows from financing activities
Proceedsfromdisposalsofownshares(employeesoptions)
8
-
0.9
Acquisition of own shares (employees option)
8
-
(0.9)
Proceedsonissuedebtsecuritiesandotherfinancial instruments
6
80.0
67.0
Proceeds from debt with group companies
6 and 14
4.8
1.7
Repayment of debt with financial institutions
6
(48.0)
-
Repayment of debt with group companies
6
(4.8)
(17.7)
Net cash provided by/(used in) financing activities
32.0
51.0
Net change in cash and cash equivalents
64.7
(13.4)
Balance sheet change of cash and cash equivalents”
64.7
(13.4)
Cashandcashequivalentsatthebeginningoftheperiod
7
9.5
22.9
Cash and cash equivalents as at the end of the period
7
74.2
9.5
The accompanying notes are an integral part of the Annual Accounts for 2020
(all figures in EUR millions unless statedotherwise)
7
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Statement of changes in equity for the year ended 31 December 2020
Share capital
Share
premium
Legal
Reserve
Voluntary Reserves
Treasury
shares
Profit or loss for the period
Other
Equity instruments
Adjustment for changes
in value
Total Equity
As at 31 December 2018
22.0
237.3
1.1
29.9
(15.2)
4.1
(6.2)
(4.9)
268.1
Total recognised income and expense
-
-
-
-
-
25.8
-
23.3
49.1
Transactions on own shares and equity holdings (net) (See 8.4)
-
-
-
-
7.7
-
(19.2)
-
(11.5)
Transfer of profit or loss to reserves
-
-
0.4
3.7
-
(4.1)
-
-
-
As at 31 December 2019
22.0
237.3
1.5
33.6
(7.5)
25.8
(25.4)
18.4
305.7
Total recognised income and expense
-
-
-
-
-
34.3
-
(25.2)
9.2
Transactions on own shares and equity holdings (net) (See 8.4)
-
-
-
-
1.0
-
2.0
-
3.0
Transfer of profit or loss to reserves
-
-
2.6
23.2
-
(25.8)
-
-
-
As at 31 December 2020
22.0
237.3
4.1
56.8
(6.5)
34.3
(23.4)
(6.8)
317.9
The accompanying notes are an integral part of the Annual Accounts for 2020
(all figures in EUR millions unless statedotherwise)
8
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Notes to the Annual AccountsAmRestHoldingsSE (“TheCompany”.“AmRest”)wasincorporatedintheNetherlandsinOctober2000and since2008theCompanyoperatesasEuropeanCompany(SocietasEuropaea.SE).TheCompany’sregistered office was changed to Paseo de la Castellana, 163 28046 Madrid, Spain.
ThemainactivityoftheCompanyisthesubscription,possession,managementandtransferofsecurities and shares of other companies, with the exemption of those subject to specific regulations.
TheCompanyistheparentofagroupinthetermsestablishedinarticle42section2oftheCommercial CodeandpreparesitsconsolidatedfinancialstatementsunderIFRS.TheGroupoperatesKentuckyFried Chicken(“KFC”),PizzaHut,BurgerKingandStarbucksrestaurantsthroughitssubsidiariesinPoland,the CzechRepublic(hereinafterCzechia),Hungary,Slovakia,Russia,Serbia,Croatia,Bulgaria,Romania, Germany,France,Austria,Slovenia,andSpain,onthebasisoffranchisesgranted.Startingfrom1October 2016theGroupasamaster-franchiseehastherighttograntalicensetothirdpartiestooperatePizzaHut ExpressandPizzaHutDeliveryrestaurants(sub-franchise)incountriesofCentralandEasternEurope,while ensuringacertainshareofrestaurantsoperateddirectlybyAmRestPizzaHutrestaurantsacquiredin FranceinMay2017,inGermanyinJuly2017andinRussiainJune2018areoperatedbothbyAmRestand its sub-franchisees based on master-franchise agreements.
InSpain,France,Germany,andPortugaltheGroupoperatesitsownbrandsLaTagliatella.Thisbusinessis basedonownrestaurantsandthefranchiseagreementssignedwithnon-relatedcompanies.Itissupported byacentralkitchenwhichproducesanddeliversproductstothewholenetworkofownbrands.Also,the Group operates its own brands Blue Frog (in China. Spain) and KABB (in China).
TheGroupalsooperatesotherownandfranchiserestaurantsinSpainwithBacoaandownandfranchise restaurantswiththeSushiShopbrandinFrance,Belgium,Spain,UnitedArabEmirates,SaudiArabia, Switzerland,UnitedKingdom,Luxembourg,Italy,Germany,Portugal,theNetherlandsandothers.Bacoais aSpanishpremiumburgerchain,andSushiShopistheoperatoroftheleadingEuropeanchainofJapanese cuisine restaurants.
Additionally,amongownbrandstheGroupoperatesvirtualbrandsPokaï,Lepieje,‘OiPoke,MoyaMisa Ramen,PierwszeiDrugie,VivaSalad!,SushiTone,Eat’sFine,Cremontano.Theofferofvirtualbrandsin PolandisavailablealsounderFoodAboutconceptthatenablesorderingdifferentvirtualbranddishes within one order.
On27April2005,thesharesofAmRestHoldingsSEwerequotedforthefirsttimeontheWarsawStock Exchange(“WSE”)andon21November2018werequotedontheMadrid,Barcelona,Bilbao,andValencia StockExchanges,throughtheSpanishAutomatedQuotationSystem(SistemadeInterconexiónBursátil- SIBE). Since21November2018Armrest’sshareshavebeenquotedsimultaneouslyonbothabovestock exchanges (dual listing).
Asat31December2020,FCapitalDutchB.V.isthelargestshareholderofAmRestHoldingsandheld67.05% of its shares and voting rights. The parent entity of the Group on the top level is Grupo Finaccess.
TheseannualaccountshavebeenpreparedandapprovedbytheCompany’sBoardofDirectorson24 February2021.TheBoardofDirectorsconsidersthattheannualaccountsfor2020willbeapprovedwith no changes by the shareholders at their annual general meeting.
Simultaneously,theBoardofDirectorshasformulatedtheconsolidatedfinancialstatementsofAmRest HoldingsSEanditsSubsidiariesforthefinancialyear2020,whichshowconsolidatedlossesofEuros183.7 millionandconsolidatedEquityofEuros264.7million(ProfitsofEuros66.9millionand476.7million, respectively for the financial year 2019).
(all figures in EUR millions unless statedotherwise)
9
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
2. Basis of preparation
True and fair view
TheAnnualAccountsfor2020havebeenpreparedonthebasisoftheaccountingrecordsofAmRest HoldingsSEbytheCompany’sBoardofDirectorsinaccordancewiththeaccountingprinciplesand standardscontainedintheSpanishGeneralChartofAccountsandotherprevailinglegislation,inorderto giveatrueandfairviewoftheCompany’sequityandfinancialpositionasof31December2020andresults of operations, changes in equity and cash flows for the year then ended 31 December 2020.
Aggregation of items
Tofacilitatetheunderstandingofthebalancesheetandprofitandlossaccount,someitemsofthese statementsarepresentedinagroupedmanner,withtherequiredanalysespresentedinthecorresponding notes of the report.
Comparative information
Eachitemofthebalancesheet,thestatementofprofitandloss,thestatementofchangesinequity,the statementofrecognizedincomeandexpenses,thestatementofcashflow,andthenotesoftheannual accountspresentforcomparativepurposes,theamountsfromthepreviousfinancialyear,whichformed partoftheannualaccountsofthefinancialyearended31December2019,approvedbytheShareholders on 10 June 2020.
Theannualaccountsarepresentedineuros,whichisthefunctionalandpresentationcurrencyofthe Company.
Criticalaspectsofthevaluationandestimationofrelevantuncertaintiesandjudgmentsusedinthe application of accounting principles.
Inlate2019anovelstrainofcoronavirus,COVID-19,wasfirstdetectedandinMarch2020,theWorldHealth OrganizationdeclaredCOVID-19aglobalpandemic.Throughout2020,COVID-19hasspreadthroughout globally, in the countries the Group operates.
MostgovernmentshaveimplementedmeasurestoreducethespreadofCOVID-19.Thesemeasuresinclude restrictionsontraveloutsidethehomecountries,closingorimposinglimitationsonbusinessandother activitiesaswellasencouragingsocialdistancing.Withsummerseason2020somerestrictionshavebeen liftedorreduced,howeverwiththeanotherincreasesinnumberofinfectionssincethefallseason governmentauthoritiesinmajorEuropeancountriesre-imposerestrictionsonthebusinessandother activities.Withtheapprovalsoffirstvaccines,thegovernmentsaredevelopingmassvaccinationplansand strategies for 2021.
Thissituationisaffectingsignificantlytheglobaleconomy.VisibleresultsoftheCOVID-19outbreakinclude thedecreaseindemand,thedisruptionorslowdownofsupplychainsandasignificantincreaseineconomic uncertainty,increaseofvolatilityinthepriceofassets,exchangeratesandadecreaseinlongterminterest rates.PossibleresultsoftheCOVID-19outbreakmayincludechangesinthemarketenvironment,people’s behaviors and ways of living.
TheCOVID-19pandemichasaparticularlysignificantnegativeimpactontherestaurantssectors.Theban orsignificantrestrictionsareimposedontherestaurantoperators.Thatresultsinsignificantdecreasein businessactivity.Highpressureonsocialdistancinghasanimpactonthecustomerdemandanddailylives and behavior patterns. This requires adjusting restaurant operations into new reality.
TheGroupmanagementiscloselymonitoringthedevelopmentofsituationandlooksforthewaysof mitigating the impact of COVID-19 spread on the Group.
TheCOVID-19relatedrisksanduncertaintiesarebeinganalyzedatdifferentanglestoassessifgoing concernissueappliesfortheCompany.CrisisTeamsweresetupinallmajorcountriesofGroupoperations tocoordinateactions,executelocalsanitaryregulations,develop,andexecutesafetymeasurestoprotect employees.
(all figures in EUR millions unless statedotherwise)
10
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
ACashTaskforcewassetuptoputatightanddiligentcontroloverpaymentsandvendorrelationsto manage liquidity of the Group and its entities.
TheGroupactivelymanagesliquidityriskunderstoodasapossiblelossorrestrictionofitsabilitytocover currentfinancialcommitments.StrengtheningoftheGroup’spositionintermsofliquidityandmitigationof adverse impacts of COVID-19 outbreak is taken on several areas.
InMarch2020theGroupdrewtheentirefacilityavailableunderrevolvingTrancheDofsyndicatedbank loan,increasingamountdrawnfromEUR37.3millionintheendof2019to98.9millionintheendof1Q 2020.Additionally,inApril2020SpanishandFrenchsubsidiariesappliedforstatesupportedbankloans. TheGroupwasgrantedtotalEUR75million.InQ3additionalEUR3.9millionofgovernmentsupportedloans weregrantedonRussianandCzechmarket.Intotal,during2020,theGroupwasgrantedEUR78.9million of government supported loans out of which EUR 19.3m remains undrawn.
TheGroupmaintainsclosecommunicationwithitsfinancingbanks.Allscheduleddebtrepaymentswere made in 2020.
Priorto2020yearendAmResthasobtainedfromitsfinancingbanksanditsbondholders(Schuldschein) waiverstothecompliancewithfinancialcovenantsrelatedtotheGroup’sleverageandinterestcoverage ratiosfrom31December2020to13December2021(thefourthquarterof2020andthefirst,secondand thirdquartersof2021).Duringsaidperiods,thosecovenantshavebeenreplacedbyacommitmentto maintain a minimum level of liquidity.
Company’smanagementandDirectorsupdatethefinancialplansandcashflowprojectionsasthesituation onthemarketschangesbecauseofCOVID-19pandemic.Themostupdatedversionofthefinancialcash flowprojectionsfor2021hasbeenapprovedbytheBoardonFebruary2021priortoissueoffinancial statements.ThisfinancialplanshowsthattheGroupwillbeabletosettleitsliabilitieswithinnext12months after the 2020 clearing period.
InDecember2020,theCompanyhasfinalizedsaleofitsinvestmentinGlovoapp23,SL,thatresultedincash inflow of EUR 75.5 million.
Duringthereportedperiod,theGroupperformedreviewofitsrentalagreementsandenterednegotiations withlandlordsaswellastookthebenefitsofvariousgovernmentschemesthatalloweddeferralor suspension of payments for rental costs during pandemic.
GovernmentprogramsimplementedwithregardstoCOVID-19spreadallowtodeferpaymentstaxes,social securities,andotherpublicobligations.TheGroupiscloselymonitoringsituationonlocalmarketsandis takingthebenefitsofavailableschemeswhichallowtoenhanceliquidityriskmanagementincurrent situation.
Additionally,theGrouphastakennumerousactionsaimedatutilizinggovernmentsupportrelatedtocost oflaborofferedonmarketswheretheGroupoperates.Oneoftheprioritytasksinthisrespecthasbeento avoidasignificantdecreaseinthelevelofemployment,takingintoaccounttheeffectivenessoftheongoing processesandtoensurefinancialsecurityforemployeestotheextentpossibleinthecurrentsituationbut alsotooptimizepayrollcostsinGroup.ThroughthesupportprogramstheGroupcanpartiallyadjustits payroll costs level more flexible to respective decrease in revenues due to temporarily closures stores.
Afteroutbreakofpandemic,theGroupalsodecidedtotemporarilydefertheearlierplanneddevelopment expendituresandsignificantlydecreasedcapexexpendituresin2020.TheGrouphasalsorenegotiated certaindevelopmentagreements,onmarketswereAmRestalsorunsbusinessunderthefranchisedbrands This is another tool that allowed to support liquidity management.
Ontherevenuesstreamsside,asof31December2020over92%oftheGroup’sownandfranchisestores remainedoperative.TheGroupcloselymonitorstheconstrainmeasurestakenandsubsequentlyliftedby governmentsinvariouscountriesandadjustsondailybasisnumberofopenedstoresandpossiblewaysof
(all figures in EUR millions unless statedotherwise)
11
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
providingproductsandservicestoGroup’scustomers,ensuringstaffandcustomersafety,aswellcomplying with all government directives.
Company’smanagementandDirectorshaveanalyzeditssituationinthecontextofCOVID-19around liquidity,financingandsecuringthecontinuationoftheoperations.Basedontheanalysisofavailable information,facts,circumstances,anduncertaintiesaboutthefuture,whichisatleast,butisnotlimitedto, twelvemonthsaftertheendofthereportingperiod,Company’smanagementandDirectorsconsiderthat goingconcernassumptionappliesintheforeseeablefuture.Consequently,thesestandalonefinancial statements have been prepared under going concern principle.
ThepreparationoftheAnnualAccountrequirestheCompanytousecertainestimatesandjudgments regardingthefuturethatarecontinuallyevaluatedandbasedonhistoricalexperienceandotherfactors, including expectations of future events that are believed to be reasonable, under the circumstances.
Theestimatesandjudgmentsmorecomplexorwithahigherimpactinthecarryingamountsoftheassets and liabilities are related to:
-Therecoverabilityoftheinvestments,andthecorrespondingvaluationadjustmentsforthe differencebetweenthebookvalueandtherecoverableamount.Inthedeterminationofthe impairmentestimateoftheseinvestments,thefuturecashflowsexpectedtobegeneratedbythe investeesaretakenintoaccountthroughtheuseofhypothesesbasedontheexistingmarket conditions).
-Estimatingfairvalueforshare-basedpaymenttransactionsrequiresdeterminationofthemost appropriatevaluationmodel,whichdependsonthetermsandconditionsofthegrant.This estimatealsorequiresdeterminationofthemostappropriateinputstothevaluationmodel includingtheexpectedlifeoftheshareoption,volatilityanddividendyieldandmakingassumptions about them.
Forthemeasurementofthefairvalueofequity-settledtransactionswithemployeesatthegrant date,theCompanyusesafinitedifferencemethod.Theassumptionsandmodelsusedfor estimating fair value for share-based payment transactions are disclosed.
DespitethefactthattheestimatesmadebytheBoardofDirectorsoftheCompanywerecalculatedbased onthebestinformationavailableat1December2020,itispossiblethateventswhichmayoccurinthe futurewillmakeitnecessarytomodifytheminlaterfinancialyears.Theeffectonthecondensedseparated financialstatementsderivingfromtheadjustmentsmadeinlaterfinancialyearswillberecorded prospectively.
TheBoardofDirectorsproposethefollowingdistributionofprofitsfortheyearended31December2020 and the shareholders approved the following to 31 December 2019.
Year ended
31 December 2020
31 December 2019
Basis of Distribution
Profit and loss for the period in EUR
34 276 638.79
25 793 482.33
Distribution
Legal Reserve in EUR
347 301.91
2 579 348.23
Voluntary Reserves in EUR
33 929 336.88
23 214 134.10
34 276 638.79
25 793 482.33
(all figures in EUR millions unless statedotherwise)
12
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Dividends have not been distributed during the 12 months ended 31 December 2020 and 2019.
Details of non-distributable reserves as of 31 December 2020 and 2019 are as follows:
31 December 2020
31 December 2019
Legal reserve
4.1
1.5
The Company’s freely distributable reserves, as well as the results of the period, are nonetheless subject to legal limits. Dividends may not be distributed if equity would be less than share capital as a result. In any case, at 31 December 2020, Voluntary Reserves and Share Premium are totally distributable.
Thestandaloneannualaccountswerepreparedinaccordancewiththeaccountingprinciplesand registrationandvaluationstandardscontainedintheSpanishGeneralAccountancyPlan.Themost significant are:
4.1.1.CLASSIFICATION AND SEPARATION OF FINANCIAL INSTRUMENTS
Financialinstrumentsareclassifiedoninitialrecognitionasafinancialasset,afinancialliabilityoranequity instrumentinaccordancewiththeeconomicsubstanceofthecontractualarrangementandthedefinitions of a financial asset, a financial liability and an equity instrument.
TheCompanyclassifiesfinancialinstrumentsintodifferentcategoriesbasedonthenatureofthe instruments and the Company's intentions on initial recognition.
FinancialassetsandfinancialliabilitiesareoffsetonlywhentheGrouphastherighttooffsettheamounts received and it intends to settle the net amount or realise the asset and simultaneously cancel the liability.
4.1.2.TRADE AND OTHER NON-TRADE RECEIVABLES
Tradeandotherreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthat arenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptformaturitiesgreaterthan 12monthsfromthebalancesheetdatethatareclassifiedasnon-currentassets.Thesefinancialassetsare initiallyvaluedattheirfairvalue,includingtransactioncoststhataredirectlyattributabletothem,and subsequentlyatamortizedcost,recognizingtheaccruedinterestbasedontheireffectiveinterestrateand thediscountratethatequalsthevalueinbooksoftheinstrumentwithallitsestimatedcashflowsuntil maturity.Notwithstandingtheforegoing,loansforcommercialtransactionswithmaturitynotexceeding oneyeararevalued,bothatthetimeofinitialrecognitionandsubsequentlyattheirnominalvalue,provided that the effect of not updating the flows is not significant.
Atleastattheendoftheyearthenecessaryadjustmentsaremadeforimpairmentofvalueifthereis evidence that the amounts owed will not be collected.
Theamountoftheimpairmentlossisthedifferencebetweenthebookvalueoftheassetandthepresent valueoftheestimatedfuturecashflowsdiscountedattheeffectiveinterestrateatthetimeofinitial recognition.Theimpairmentaswellastheirreversal,whereappropriate,isrecognizedintheprofitandloss account.
(all figures in EUR millions unless statedotherwise)
13
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
4.1.3.INVESTMENTS IN THE EQUITY OF GROUP COMPANIES
GroupcompaniesarethoseoverwhichtheCompany,eitherdirectlyorindirectly,throughsubsidiaries exercisescontrolasdefinedinarticle42oftheSpanishCodeofCommerceorwhichthecompaniesare controlledbyoneormoreindividualsorentitiesactingjointlyorunderthesamemanagementthrough agreementsorstatutoryclauses.Controlisthepowertogovernthefinancialandoperatingpoliciesofan entityorbusinesstoobtainbenefitsfromitsactivities.Inassessingcontrol,potentialvotingrightsheldby theGrouporotherentitiesthatareexercisableorconvertibleattheendofeachreportingperiodare considered.
Investmentsingroupcompaniesarevaluedattheircost,whichisequivalenttothefairvalueofthe considerationgiven,minus,whereapplicable,theaccumulatedamountoftheadjustmentsforimpairment ofvalue.However,whenthereisaninvestmentpriortoqualificationasagroup,multi-group,orassociate company,thecarryingamountoftheinvestmentisconsideredasinvestmentcostbeforehavingthat qualification.ThepreviousvaluationadjustmentsrecordeddirectlyinEquityaretransferredtotheincome statement when the investment is disposed or when there is a loss or reversal of the impairment.
Ifaninvestmentnolongerqualifiesforclassificationunderthiscategory,itisreclassifiedasavailable-for-sale and is measured as such from the reclassification date.
Ifthereisobjectiveevidencethatthebookvalueisnotrecoverable,theappropriatevaluationadjustments aremadeforthedifferencebetweentheirbookvalueandtherecoverableamount,definedasthegreater amount between their fair value less costs to sell and the value in use of the investment.
TherecoverableamountoftheinvestmentsisbasedontheCompany’sshareofthepresentvalueoffuture cashflowsexpectedtobederivedfromordinaryactivities,ortheestimatedcashflowsexpectedtobe received from the distribution of dividends and the final disposal of the investment.
Incasethattherecoverableamountcouldnotbeestimatedthroughthepresentvalueoftheexpectedcash flowsordividends,thenetequityoftheinvesteecompanyisconsidered,adjustedforthecapitalgains existing on the valuation date.
Thevalueadjustmentand,ifapplicable,itsreversalisrecordedintheprofitandlossaccountfortheyearin whichitoccursandpresentedinresultsfromoperatingactivities(asthepossessionofinvestmentsactivities is considered part of the ordinary activity of a Holdings company).
4.1.4.FINANCIAL ASSETS AVAILABLE-FOR-SALE
TheCompanyclassifyFinancialInvestmentsinequityinstrumentsthatintendstoholdforanunspecified periodandthatdonotcomplywiththerequirementstobeclassifiedinothercategoriesoffinancialassets asfinancialassetsavailable-for-sale.Theseinvestmentsarerecordedunder“Non-currentassets,”unlessit is probable and feasible that they will be sold within 12 months.
Theyareinitiallymeasuredatfairvalue,whichintheabsenceofevidencetothecontraryisthetransaction price plus directly attributable transaction cost.
Financialassetsavailable-for-salearesubsequentlymeasuredatfairvalue,withoutdeductingany transactioncostsincurredondisposal.Changesinfairvalueareaccountedfordirectlyinequityuntilthe financial asset is derecognized or impaired, and subsequently recognized in the income statement.
4.1.5.INTEREST AND DIVIDENDS FROM FINANCIAL ASSETS
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Interestanddividendsaccruedonfinancialassetsafteracquisitionshallberecognizedasrevenue.Interest shallbeaccountedforusingtheeffectiveinterestratemethod,whiledividendsshallberecognizedwhen the equity holder’s right to receive payment is established.
Uponinitialmeasurementoffinancialassets,accruedexplicitinterestreceivableatthemeasurementdate shallberecognizedseparately,basedonmaturity.Dividendsdeclaredbythepertinentbodyatthe acquisitiondateshallalsobeaccountedforseparately.“Explicitinterest”istheinterestobtainedbyapplying the financial instrument’s contractual interest rate.
Ifdistributeddividendsareclearlyderivedfromprofitsgeneratedpriortotheacquisitiondatebecausethe amountsthathavebeendistributedarehigherthantheprofitsgeneratedbytheinvestmentsince acquisition,thedifferenceshallbeaccountedforasadeductioninthecarryingamountoftheinvestment and shall not be recognized as income.
4.1.6.DEBT AND TRADE AND OTHER PAYABLES
Financialliabilitiesincludedinthiscategoryshallinitiallybemeasuredatfairvalue.Intheabsenceof evidencetothecontrary,thisshallbethetransactionprice,whichisequivalenttothefairvalueofthe considerationreceived,adjustedfordirectlyattributabletransactioncosts.Nonetheless,tradepayables fallingduewithinoneyearforwhichthereisnocontractualinterestrateandcalled-upequityholdings expectedtobesettledintheshorttermcanbemeasuredattheirnominalamountprovidedthattheeffect of not discounting the cash flows is immaterial.
Thefinancialliabilitiesincludedinthiscategoryshallsubsequentlybemeasuredatamortizedcost.Accrued interest shall be recognized in the income statement using the effective interest rate method.
Payablesfallingduewithinoneyearinitiallymeasuredatthenominalamount,inaccordancewiththe preceding section, shall continue to be measured at that amount.
4.1.7.OWN EQUITY INSTRUMENTS
IntransactionscarriedoutbytheCompanywithitsownequityinstruments,theamountofthese instrumentsshallberecognizedinequityasachangeincapitalandreserveswithoutvaluationadjustments. UndernocircumstancesmayitbeaccountedforasafinancialassetoftheCompanyandnoprofitorloss mayberecognizedintheincomestatement.Expensesarisingonthesetransactions,includingcosts incurredonissuingtheinstrumentssuchaslawyer,notary,andregistrarfees,printingofprospectuses, bulletinsandsecurities,taxes,advertising,commissions,andotherplacementexpenses–shallbe accounted for directly in equity as a reduction in reserves.
Thesubsequentamortizationoftheseinstrumentsleadstoacapitalreductionbythenominalamountof thesharesandthepositiveornegativedifferencebetweenthepurchasingcostandthenominalcostofthe shares are accounted in reserves.
4.1.8.OFFSETTING PRINCIPLES
AfinancialassetandafinancialliabilityareoffsetonlywhentheCompanycurrentlyhasthelegally enforceablerighttooffsettherecognisedamountsandintendseithertosettleonanetbasisortorealise the asset and settle the liability simultaneously.
4.1.9.DERECOGNITION OF FINANCIAL ASSETS
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Financialassetsarederecognisedwhenthecontractualrightstothecashflowsfromthefinancialasset expireorhavebeentransferredandtheCompanyhastransferredsubstantiallyalltherisksandrewardsof ownership.
Debtorequityinstrumentsthatformpartofportfoliosofsimilarinstrumentsthathavethesamerightsare measured and derecognised at weighted average cost.
4.2CASH AND CASH AND EQUIVALENTS
Cashandcashequivalentsincludecashinhandandsightbankdepositsincreditinstitutions.Underthis headingarealsoincludedunderotherhighlyliquidshort-terminvestmentsprovidedthatareeasily convertibleintocashandaresubjecttoaninsignificantriskofchangesinvalue.Forthispurpose, investments with maturities of less than three months from the date of acquisition are included.
TheCompanyrecognizescashpaymentsandreceiptsforfinancialassetsandfinancialliabilitiesinwhich turnoverisquickonanetbasisinthestatementofcashflows.Turnoverisconsideredtobequickwhenthe period between the date of acquisition and maturity does not exceed six months.
Inthestatementofcashflows,bankoverdraftswhicharerepayableondemandandformanintegralpart oftheCompany’scashmanagementareincludedasacomponentofcashandcashequivalents.Bank overdrafts are recognized in the balance sheet as financial liabilities arising from loans and borrowings.
4.3FOREIGN CURRENCY TRANSACTIONS
Foreigncurrencytransactionshavebeentranslatedtothefunctionalcurrencyusingthespotexchangerate applicable at the transaction date.
Monetaryassetsandliabilitiesdenominatedinforeigncurrencieshavebeentranslatedtothefunctional currencyattheclosingrate,whilenon-monetaryassetsandliabilitiesmeasuredathistoricalcosthavebeen translated at the exchange rate prevailing at the transaction date.
Non-monetaryassetsmeasuredatfairvaluehavebeentranslatedtothefunctionalcurrencyatthespot exchange rate at the date that the fair value was determined.
Inthestatementofcashflows,cashflowsfromforeigncurrencytransactionshavebeentranslatedtoEuros at the average exchange rate for the year.
Theeffectofexchangeratefluctuationsoncashandcashequivalentsdenominatedinforeigncurrenciesis recognized separately in the statement of cash flows as effect of exchange rate fluctuations.
Exchangegainsandlossesarisingonthesettlementofforeigncurrencytransactionsandontranslationto thefunctionalcurrencyofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognized in profit or loss.
4.4INCOME TAX
Currentanddeferredtaxarerecognizedasincomeoranexpenseandincludedinprofitorlossfortheyear, excepttotheextentthatthetaxarisesfromatransactionoreventwhichisrecognized,inthesameora different year. directly in equity, or from a business combination.
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Currenttaxassetsandliabilitiesarevaluedfortheamountsthatareexpectedtobepaidorrecoveredby thetaxauthorities,usingthetaxratesandtaxlawsthathavebeenenactedorsubstantiallyenactedatthe reporting date.
TheCompanyastherepresentativeofthetaxgroupandtheSpanishsubsidiariesfileconsolidatedtax return (see note 11).
Inadditiontothefactorstobeconsideredforindividualtaxation,setoutpreviously,thefollowingfactors aretakenintoaccountwhendeterminingtheaccruedincometaxexpenseforthecompaniesformingthe consolidated tax group:
■
Temporaryandpermanentdifferencesarisingfromtheeliminationofprofitsandlosseson transactionsbetweenGroupcompanies,derivedfromtheprocessofdeterminingconsolidated taxable income.■
Deductionsandcreditscorrespondingtoeachcompanyformingtheconsolidatedtaxgroup. Forthesepurposes,deductionsandcreditsareallocatedtothecompanythatcarriedoutthe activity or obtained the profit necessary to obtain the right to the deduction or tax credit.Temporarydifferencesarisingfromtheeliminationofprofitsandlossesontransactionsbetweentaxgroup companiesareallocatedtothecompanywhichrecognizedtheprofit/lossandarevaluedusingthetaxrate of that company.
Areciprocalcreditanddebitarisebetweenthecompaniesthatcontributetaxlossestotheconsolidated Groupandtherestofthecompaniesthatoffsetthoselosses.Whereataxlosscannotbeoffsetbytheother consolidatedgroupcompanies,thesetaxcreditsforlosscarryforwardsarerecognizedasdeferredtax assets using the applicable recognition criteria, considering the tax group as a taxable entity.
TheCompanyrecordsthetotalconsolidatedincometaxpayable(recoverable)withadebit(credit)to receivables (payables) from/to group companies and associates.
Theamountofthedebt(credit)relatingtothesubsidiariesisrecognizedwithacredit(debit)topayables (receivables) to/from group companies and associates.
Deferredtaxliabilitiesarecalculatedaccordingtotheliabilitymethod,onthetemporarydifferencesthat arisebetweenthetaxbasesoftheassetsandliabilitiesandtheirbookvalues.However,ifthedeferredtax liabilitiesarisefromtheinitialrecognitionofagoodwilloranassetoraliabilityinatransactionotherthan abusinesscombinationthatatthetimeofthetransactiondoesnotaffecteithertheaccountingresultor the taxable basis of the tax, they are not recognized.
Deferredtaxassetsarerecognizedtotheextentthatitisprobablethatfuturetaxprofitswillbeavailableto offsetthetemporarydifferences.Deferredtaxassetsarerecognizedontemporarydifferencesthatarisein investmentsinsubsidiaries,associatesandjointventures,exceptinthosecasesinwhichtheCompanycan controlthetimingofthereversalofthetemporarydifferencesanditisalsoprobablethatthesewillnot reverse in a foreseeable future.
Thedeferredtaxassetsandliabilitiesaredeterminedbyapplyingtheregulationsandtaxratesapprovedor abouttobeapprovedonthedateofthebalancesheetandwhichisexpectedtobeappliedwhenthe corresponding deferred tax asset is realized, or the deferred tax liability is settled.
(all figures in EUR millions unless statedotherwise)
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4.5REVENUES RECOGNITION
BasedontheprovisionsofconsultationB79C02oftheInstituteofAuditorsandCensorsofSeptember2009, theamountsrelatedtoincomederivedfromdividendsreceivedfromsubsidiaries,resultsontheexecution ofstockoptionplanbyemployees,interestotherrevenuesfromthefinancinggrantedtothesubsidiaries, aswellastherevenuesfromdisposaloffinancialinvestmentsarepresentedintherevenueoftheholding company.
4.6PROVISIONS AND CONTINGENCIES
ProvisionsarerecognizedwhentheCompanyhasapresentobligation,whetherlegal,contractualimplicit ortacit,asaresultofpastevents,anditisprobablethatanoutflowofresourceswillbenecessarytosettle theobligationandtheamountcanbeestimatedreliably.Restructuringprovisionsincludepenaltiesfor cancellationoftheleaseandpaymentsfordismissaltoemployees.Noprovisionsarerecognizedforfuture operating losses.
Provisionsarevaluedatthepresentvalueofthedisbursementsthatareexpectedtobenecessarytosettle theobligationusingapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyand thespecificrisksoftheobligation.Theadjustmentsintheprovisionduetoitsupdatearerecognizedasa financial expense as they are accrued.
Provisionswithmaturitylessthanorequaltooneyear,withanon-significantfinancialeffect,arenot discounted.
Whenitisexpectedthatpartofthedisbursementnecessarytosettletheprovisionisreimbursedbyathird party,thereimbursementisrecognizedasanindependentasset,providedthatitsreceptionispractically certain.Thereimbursementisrecognizedasincomeintheincomestatementofthenatureofthe expenditure up to the amount of the provision.
Ontheotherhand,contingentliabilitiesarethosepossibleobligationsarisingbecauseofpastevents,the materializationofwhichisconditionalontheoccurrenceornon-occurrenceofoneormorefutureevents independent of the Company’s will.
Ifitisnotprobablethatanoutflowofresourceswillberequiredtosettleanobligation,theprovisionis reversed.
4.7SHARE-BASED PAYMENTS
Share-based payments and employee benefits recognition for the benefit plans of the Company’s employees
Share-based payments
The Company has both equity-settled share-based programs and cash-settled share-based programs.
Equity-settled transactions
Thecostofequity-settledtransactionswithemployeesismeasuredbyreferencetoawardingfairvalueat the grant date.
Thecostofequity-settledtransactionsisrecognized,togetherwithacorrespondingincreaseinequity,over theperiodinwhichtheperformanceconditionsarefulfilled,endingonthedateonwhichtherelevant employeesbecomefullyentitledtotheaward(“vestingdate”).Thecumulativeexpenseisrecognizedfor equity-settledtransactionsateachreportingdateuntilthevestingdatereflectstheextenttowhichthe
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
vestingperiodhasexpiredandthenumberofawardsthat,intheopinionoftheparent’sManagementBoard at that date, based on the best available estimate of the number of equity instruments, will ultimately vest.
Cash-settled transactions
Cash-settledtransactionshavebeenaccountedsince2014asaresultofamodificationintroducedto existingshare-basedprograms.Someprogramsweremodifiedsothattheymaybesettledincashorin sharesupondecisionofaparticipant.Asaresult,theCompanyre-measurestheliabilityrelatedtocash-settled transaction.
Theliabilityissubsequentlymeasuredatitsfairvalueateverybalancesheetdateandrecognizedtothe extentthattheservicevestingperiodhaselapsed,withchangesinliabilityvaluationrecognizedinincome statement.Cumulatively,atleastattheoriginalgrantdate,thefairvalueoftheequityinstrumentsis recognized as an expense (share-based payment expense).
Atthedateofsettlement,theCompanyremeasurestheliabilitytoitsfairvalue.Theactualsettlement method selected by the employees, will dictate the accounting treatment:
•If cash settlement is chosen, the payment reduces the fully recognized liability,
•Ifthesettlementisinshares,thebalanceoftheliabilityistransferredtoequity,beingconsideration for the shares granted. Any previously recognized equity component shall remain within equity.
Recognition of the share-based plans correspondent to employees of other group companies
Intheparentcompanybookstheoperationrepresentsacontributiontothesubsidiarythatismade effectivethroughthepersonnelserviceitreceivesinexchangefortheequityinstrumentsoftheparent companytheoptionsdeliveredrepresentsingeneralagreatervalueoftheinvestmentthattheparent companyhasintheequityofthesubsidiary,andregisteredasanincreaseintheCompany’sequity(“Other equity instruments”).
Accordingtoconsultationnº2oftheBOICAC97/2014whentheparentcompanysignsettlementagreements (Sharetransferagreements)throughwhichtheparentcompanychargetheintrinsicvalueofthecostofthe agreementequivalenttothemarketvalueofthesharesdelivered,itisconsideredthattherearetwo separated operations:
- Anon-genuinecorporateoperationofcontributionoftheparentcompanyinthesubsidiarythatis registered as a higher value of the investment according to consultation nº 7 of BOICAC Nº 75/2008
- Andasecondcorporateoperationofdistributionorrecoveryoftheinvestmentthatisequivalentto difference between the re-charge described above and the cost of the options at grant.
4.8TRANSACTIONS BETWEEN RELATED PARTIES
Ingeneral,transactionsbetweengroupcompaniesareinitiallyaccountedforattheirfairvalue.Iftheagreed pricediffersfromitsfairvalue,thedifferenceisrecordedaccordingtotheeconomicrealityoftheoperation. Thesubsequentevaluationiscarriedoutinaccordancewiththeprovisionsofthecorresponding regulations.
TheCompanycarriesoutallitsoperationswithGroupcompanies,entitiesandpartieslinkedtomarket values.Inaddition,thetransferpricesareadequatelysupported,whichiswhytheCompany’sBoardof Directors consider that there are no significant risks in this respect from which future liabilities could arise.
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
5. Financial Risk Management
5.1.FINANCIAL RISK FACTORS
TheCompany'sactivitiesareexposedtovariousfinancialrisks.TheCompany'sglobalriskmanagement programfocusesontheuncertaintyofthefinancialmarketsandtriestominimizethepotentialadverse effects on its financial profitability.
- Currency risk
Theresultsofthecompanyareexposedtocurrencyriskrelatedtotransactionsandtranslationsinto currenciesotherthanEuro(PolishZloty(PLN)andUSDollar(USD),mostly).Theexposuretoforeigncurrency cash flow risk is not hedged as there is no significant impact on cash flows.
- Risk of increased financial costs
TheCompanyisexposedtoacertainextenttoadverseimpactofinterestratefluctuationsinconnection withobtainingfinancingwhichbearsfloatinginterestratesandinvestinginassetsbearingfloatinginterest rates.Theinterestratesofbankloansandborrowingsandissuedbondsarebasedonacombinationof fixedandfloatingreferencerateswhichareupdatedoverperiodsshorterthanoneyear.Additionally,the Companyanditssubsidiariesmay,aspartoftheinterestratehedgingstrategy,enterintoderivativeand other financial contracts the valuation of which is significantly affected by the level of reference rates.
- Liquidity risk
TheGroupofwhichtheCompanyisthedominantentityisexposedtotheliquidityriskduetothebreachof covenantsandreclassificationoflong-termdebttoshort-termwhichcanbethereforedueinthenext12 months,however,priorto2020yearendAmResthasobtainedfromitsfinancingbanksandmajorityof bondholders(Schuldschein)waiverstothecompliancewithcertaincovenantsrelatedtotheGroup’sleverage andinterestcoverageratiosfrom31December2020to31December2021(fourthquarterof2020andthe first, second and third quarters of 2021).
TheGroupactivelymanagesliquidityresourcesanddoesitsbesttoimprovethebusiness.Strengtheningof theGroup’spositionintermsofliquidityandmitigationofadverseimpactsofCOVID-19outbreakistaken onseveralareas.TheGroupmaintainsclosecommunicationwithitsfinancingbanks.InMarch2020Group hasdrawnentirefacilityavailableunderrevolvingTrancheDofsyndicatedbankloan,increasingamount drawnfromEUR37.3millionintheendof2019to98.9millionintheendof1Q2020.Additionally,inApril 2020SpanishandFrenchsubsidiariesofAmRestHoldingsSEappliedforstatesupportedbankloans, guaranteedbythegovernmentsin70%and90%,respectively.TheGroupwasgrantedtotalEUR75million. Additionally,theGroupseesrecoveryinitscorebusinessasthenumberofopenrestaurantshaveincreased and the revenues trends have been recovering.
AmResthasestablishedinternaltaskforcesineverymarkettomonitorthesituationalsoaroundcostsaving initiativesandalsoabigpartofcapitalexpenditureshasbeenputunderreview.TheGroupwasandisclosely monitoringavailableprogramthatareofferedonvariousmarkets.Thegovernmentsupportprogramsinclude forexampledirectsubsidiestopayrollcosts,taxexemptions,socialsecuritycontributionsreductions. Additionally,entitiesfromtheGroupwereabletoapplyforextendeddeadlinesforpaymentsofvarioustaxes.
TheGroupanalyzesliquidityneedswithparticularfocusonmaturityofdebtandproactivelyinvestigates variousformsoffinancingthatcouldbeutilizedifneeded.Asat31December2020,thecompanyhasenough short-term assets to fulfil its liabilities due in the next 12 months.
- Credit Risk
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Creditriskarisesfromcashandcashequivalentsanddepositswithbanksandfinancialinstitutionsand balances with the Group, including pending receivables and committed transactions.
Ingeneral,theCompanymaintainsitstreasuryandequivalentliquidassetsinfinancialentitieswithahigh credit rating and of recognized prestige.
6.1.EQUITY INSTRUMENTS
ThevalueofthesharesownedbytheCompanyinitssubsidiariesasat31December2020and2019isas follow:
31 December 2020
31 December 2019
Interest ownership
Value of Shares
Interest ownership
Value of Shares
Dividends received in 2020
Dividends received in 2019
AmRest Sp. z o.o. (Poland)
100%
219.6
100%
217.3
-
-
AmRest China Group PTE Ltd. (China)
100%
40.5
100%
40.4
-
-
AmRest s.r.o. (Czechia)
100%
6.9
100%
6.7
7.6
3.1
AmRest France SAS (France)
100%
58.7
100%
58.5
-
-
AmRest HK Ltd
100%
-
100%
-
-
-
AmRest FSVC LLC
100%
-
100%
-
-
-
AmRest EOOD (Bulgaria)
100%
4.1
100%
3.5
-
-
AmRest Acquisition Subsidiary (Malta)
100%
60.9
100%
60.8
-
-
AmRest Food SRL
1%
0.1
1%
-
-
-
390.8
387.2
The movement of the equity instruments in group companies as at 31 December 2020 is as follow:
31 December 2019
Increase
Decrease
Share-base options
31 December 2020
Cost
AmRest Sp. z o.o. (Poland)
217.3
-
-
2.3
219.6
AmRest China Group PTE Ltd. (China)
40.4
0.1
-
-
40.5
AmRest s.r.o. (Czechia)
6.7
-
-
0.2
6.9
AmRest France SAS
58.5
-
-
0.2
58.7
AmRest HK Ltd
5.2
-
-
-
5.2
AmRest FSVC LLC
10.5
0.8
(1.0)
10.3
AmRest EOOD (Bulgaria)
4.1
-
-
-
4.1
AmRest Acquisition Subsidiary (Malta)
60.8
0.1
-
-
60.9
AmRest Food SL SRL
-
-
-
0.1
0.1
403.5
1.0
-
1.8
406.3
-
-
Impairment
-
AmRest HK Ltd
(5.2)
-
-
-
(5.2)
AmRest FSVC LLC
(10.5)
(0.8)
1.0
-
(10.3)
AmRest EOOD (Bulgaria)
(0.6)
-
0.6
-
-
(16.3)
(0.8)
1.6
-
(15.5)
Total Equity instruments in Group companies
387.2
0.2
1.6
1.8
390.8
-OnJune2020AmRestHoldingsSEincreasecapitalinitssubsidiaryAmRestChinaGroupPTELtd.(China) by EUR 0.1 million
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
-OnMayandJune2020weresignedcapitalincreasesresolutionsintheentityAmRestAcquisitionSubsidiary by a total amount of EUR 0.1 million.
-Duringtheyear2020theCompanypassedseveralcapitalincreasesresolutionsintheentityAmRestFSVC LLCuptoanamountofEUR0.8million.Thetotalamountofthesecapitalincreaseswasimpairedasat31 December 2020.
-Thevalueofinvestmentofsomesubsidiarieswasaffectedbythevaluationofshare-basedoptionswithin SOPandMIP.Thetotalcapitalizedcostofshareoptionplansin2020equalsEUR1.8millionanditis presentedinthetablebelow.Inthecolumndecreasearepresentedthecostofexercisedoptions.The details by subsidiaries for the year ended as of 31 December 2020 is presented below:
Increase
Decrease
Cost
AmRest Sp. z o.o. (Poland)
2.3
-
Amrest SRO (Czechia)
0.2
-
AmRest France SAS
0.2
-
AmRest Food SL SRL
0.1
-
AmRest FSVC LLC
-
(1.0)
2.8
(1.0)
The movement of the equity instruments in group companies as at 31 December 2019 is as follow:
31 December 2018
Increase
Decrease
Reclassifications
31 December 2019
Cost
AmRest Sp. z o.o. (Poland)
216.4
6.0
(2.7)
(2.4)
217.3
AmRest HK Ltd
5.2
-
-
-
5.2
AmRest China Group PTE Ltd. (China)
40.3
0.1
-
-
40.4
AmRest s.r.o. (Czechia)
7.2
0.3
(0.1)
(0.7)
6.7
AmRest France SAS
58.1
0.4
-
-
58.5
Restaurant Partner Polska Sp. z o.o.
5.9
5.2
(10.7)
(0.4)
0.0
AmRest EOOD (Bulgaria)
4.0
0.1
-
-
4.1
AmRest Acquisition Subsidiary (Malta)
60.8
-
-
-
60.8
AmRest FSVC LLC
3.7
5.8
(2.2)
3.2
10.5
401.6
17.9
(15.7)
(0.3)
403.5
Call up Capital
Restaurant Partner Polska Sp. z .o.o.
(0.4)
-
-
0.4
-
(0.4)
-
-
0.4
-
Impairment
AmRest HK Ltd
(5.2)
-
-
-
(5.2)
AmRest EOOD (Bulgaria)
(0.6)
(0.6)
AmRest FSVC LLC
(3.7)
(5.3)
-
(1.5)
(10.5)
(9.5)
(5.3)
-
(1.5)
(16.3)
Total Equity instruments in Group companies
392.1
12.6
(15.7)
(1.8)
387.2
-On13March2019AmRestHoldingsSE(thebuyer)hasacquiredtoDeliveryHeroSE(theSeller)the remaining49%ofRestaurantPartnerPolskaSp.zo.o.shares.Thepurchasepriceofthistransactionwas EUR 5.2 million.
-On13August2019wassignedtheSaleandPurchaseandContributionAgreementonthe100%ofthe sharesinRestaurantPartnerPolskaSp.zo.o.betweenAmRestHoldingsSEandGlovoAPP23.S.L.(“Glovo”) foratotaltransactionpriceofEUR35millionincludinganearn-outasthepriceconditionshavebeenmet. On28October2019AmRestHoldingsSElostcontroloverRestaurantPartnerPolskaSp.zo.o.In considerationforthetransferof100%ofsharesinRestaurantPartnerPolskaSp.zo.o.(“PizzaPortal”) AmRestHoldingsreceivedtotalsalepriceintheamountofEUR35million.asacombinationofcashpayment
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
ofEUR20million.whichwasrepaidinJanuary2020(seenote6.4).andnewlyissuedsharesofGlovowhose fairvalueamountedEUR17.7million.whichconstitutesfinalsettlementoftheAgreement(seenote6.3). TheequityinstrumentstransferredtoGlovohadabookvalueofEUR10.7millionattheSaleandPurchase Agreement’s date what produced a gain on disposal of equity instruments of EUR 27 million.
-On23May2019,thecompanypaidEUR0.3milliontoTopBrandsNV(previousownersofPizzaHutFrance) as adjustment to price as per the conditions established in the SPA dated on 24 January 2017.
-Duringtheyear2019thecompanypassedseveralcapitalincreasesresolutionsintheentityAmRestFSVC LLCuptoanamountofEUR0.6million.Thetotalamountofthesecapitalincreaseswasimpairedasat31 December 2019.
-On13August2019,thetotalamountofreceivablesheldbyAmRestHoldingsSEwithAmRestFSVCLLC (EUR 5.2 million) was converted into capital. This amount was fully impaired as at 31 December 2019.
-Thevalueofinvestmentofsomesubsidiarieswasaffectedbythevaluationandexercisesofshare-based optionswithinSOPandMIP.Thetotalcapitalizedcostofshareoptionplansin2019equalsEUR6.6million anditispresentedinthecolumnincrease.Thetotalamountthatreferstoexercisedoptionin2019EUR5.0 million is presented in the column decrease.
The details by subsidiaries for the year ended as of 31 December 2019 is presented below:
Increase
Decrease
Cost
AmRest Sp. z o.o. (Poland)
6.0
2.7
AmRest China Group PTE Ltd. (China)
0.1
-
Amrest SRO (Czechia)
0.3
0.1
AmRest France SAS
0.1
-
AmRest FSVC LLC
0.1
2.2
6.6
5.0
Impairment test of Equity Investment in group companies:
ToestimatethepotentialimpairmentoftheCompany'sinvestmentsingroupcompaniesandgiventhatthe fairvalueoftheseinvestmentsisnottradedinanactivemarket,thisisdeterminedusingvaluation techniques.TheCompanyusesjudgmenttoselectavarietyofmethodsandmakeassumptionsthatare based primarily on market conditions existing at the balance sheet date.
TheCompanyconsidersthatthereareindicationsofimpairmentinitsinvesteesifthenetbookvalueofthe investmentexceedsthetheoreticalbookvalueoftheequityoftheinvestee.Additionally,other considerationsdecreaseintheactivityoftheinvesteesorothersituationsthatcouldindicatesignsof deterioration in the companies.
TheCompanyidentifiedimpairmentindicatorsforitsinvestmentsinAmRestEOOD(Bulgaria),andAmRest HKLtd (China)andAmRestFSVCLLC.ForthecompaniesoftheGroupAmRestHKLtd(China)andAmRest FSVCLLCnoimpairmenttestwasperformed,asbothcompaniesaredormant,andtheCompanydoesnot expect to reactivate them.
InrelationtoinAmRestEOOD(Bulgaria)thecompanyhasperformedanimpairmenttestwhichledtoa reversalontheimpairmentfrompreviousperiodsofEur0.6million.Theprincipalhypothesisconsideredin the impairment test are the following:
-Expectedincreaseinoperatingincomeexcludingamortizationexpenses:Thegrowthinoperatingincome excludingamortizationexpensesisbasedontheprojectionsestimatedbytheManagementbasedonthe evolutionsestimatedinthevariousstrategicbusinessplansforthenextfiveyears.Theweightedbudgeted averageEBITDAMarginusedintheimpairmenttestforAmRestEOOD(Bulgaria)is17,63%(14,63%in2019).
-Discountrates:Reflecttheevolutionofthemarketwithrespecttothespecificrisksofeachcash-generating unit,consideringthetimevalueofmoney.Thediscountrateisbasedonthespecificcircumstancesofthe companyanditsoperatingsegmentsandisaconsequenceofitsweightedaveragecostofcapital("WACC"). TheWACCtakesintoaccountbothdebtandequity.Thecostofnetworthisbasedontheexpectedreturn
(all figures in EUR millions unless statedotherwise)
23
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
oninvestmentsmadebytheinvestorsoftheCompany.Ontheotherhand,thecostofthedebtisbasedon theinterestratesoftheloansthattheCompanyisobligedtorepay.Thespecificriskofthesegmentis incorporatedbyapplyingindividualbetafactors,whichareevaluatedannuallybasedonmarketdata.Discounts rates applied in the impairment test for AmRest EOOD (Bulgary) is 8.5% in 2020 (5.5% in 2019).
There were no conditions for testing of investments in other companies.
(all figures in EUR millions unless statedotherwise)
24
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
The Details of the main subsidiaries of the group are presented below:
Company name
Registered office
2020
2019
Holding activity
Total Equity
Net result
Operating result
Dividends distributed
Total Equity
Net result
Operating result
Dividends distributed
AmRest TAG S.L.U*
Madrid Spain
265.9
(14.0)
(13.0)
-
279.0
3.7
2.9
-
AmRest China Group PTE Ltd
Singapore
13.4
3.7
5.9
-
9.7
(0.5)
(0.2)
-
Sushi Shop Group SAS
Paris France
167.3
(1.2)
1.2
-
13.2
3.4
4.0
-
AmRest France SAS
Paris France
58.3
0.1
0.1
-
58.1
14.1
12.9
-
Sushi Shop Management SAS
Paris France
(5.0)
2.9
3.9
-
0.4
3.1
4.9
-
Sushi Shop Belgique SA
Bruxelles Belgium
(1.4)
(1.1)
(1.1)
-
(-)
(-)
(-)
-
Sushi Shop Holding USA LLC
Dover Kent USA
(0.1)
-
-
-
0.1
-
-
-
Sushi Shop Luxembourg SARL
Luxembourg
3.6
(0.0)
(0.0)
-
4.2
(-)
(-)
-
Sushi Shop Switzerland SA
Fribourg Switzerland
2.9
(0.1)
(0.0)
-
(-)
1.7
(0.1)
-
Restaurant, franchise and master-franchise activity
Total Equity
Net result
Operating result
Dividends distributed
Total Equity
Net result
Operating result
Dividends distributed
AmRest Sp. z o.o.
Wroclaw Poland
323.8
(36.1)
(11)
-
384.8
16.0
28.9
-
AmRest s.r.o.
Prague Czechia
22.4
3.9
7.1
(7.6)
27.0
13.0
17.9
(3.1)
AmRest Kft
Budapest Hungary
40.1
0.2
0.6
-
43.9
7.4
6.0
-
AmRest Coffee Sp. z o.o.
Wroclaw Poland
1.0
(6.8)
(6.8)
-
8.3
(1.7)
(1.6)
-
AmRest EOOD
Sofia Bulgaria
3.7
0.3
0.4
-
3.3
0.4
0.3
-
OOO AmRest
Saint Petersburg Russia
58.3
1.5
2.9
-
50.9
2.1
1.1
-
AmRest Coffee s.r.o.
Prague Czechia
18.4
(1.3)
(1.4)
-
21.7
4.6
5.6
-
AmRest Kávézó Kft
Budapest Hungary
2.1
(2.5)
(2.5)
-
5.1
1.1
1.1
-
AmRest d.o.o.
Belgrade Serbia
-
-
-
-
-
(-)
(-)
-
Restauravia Food S.L.U.
Madrid Spain
13.3
(8.0)
(9.7)
-
21.6
1.0
1.8
-
Pastificio Service S.L.U.
Madrid Spain
18.8
(14.6)
(4.6)
-
33.0
24.4
15.7
-
AmRest Adria d.o.o.
Zagreb Croatia
0.9
3.8
0.2
-
0.9
(0.1)
(0.1)
-
AmRest GmbH
Cologne Germany
(13.2)
(0.3)
0.0
-
(13.0)
(0.3)
-
-
AmRest SAS
Lyon France
(3.1)
(2.1)
(2.1)
-
(1.4)
(1.6)
(1.6)
-
Frog King Food&Beverage Management Ltd
Shanghai China
1.7
(0.4)
(0.5)
-
2.2
(0.3)
(0.4)
-
Blue Frog Food&Beverage Management Ltd
Shanghai China
20.6
4.6
6.4
-
18.7
4.4
6.1
-
Shanghai Kabb Western Restaurant Ltd
Shanghai China
(1.8)
(0.1)
(0.1)
-
(1.6)
(0.3)
(0.2)
-
(all figures in EUR millions unless statedotherwise)
25
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Company name
Registered office
2020
2019
Restaurant, franchise and master-franchise activity
Total Equity
Net result
Operating result
Dividends distributed
Total Equity
Net result
Operating result
Dividends distributed
AmRest Skyline GMBH
Cologne Germany
(1.0)
(0.9)
(0.9)
-
(0.4)
(0.4)
(0.4)
-
Kai Zhen Food and Beverage Management (Shanghai) Ltd
Shanghai China
0.5
0.1
0.1
-
0.4
0.2
0.2
-
AmRest Coffee EOOD
Sofia Bulgaria
2.7
0.0
0.0
-
2.7
0.3
0.2
-
AmRest Coffee S.r.l.
Bucharest Romania
10.6
(1.8)
(1.9)
-
9.1
3.4
3.4
-
AmRest Coffee Deutschland
Munich Germany
(26.2)
(31.5)
(30.6)
-
(13.0)
2.4
3.1
-
AmRest DE Sp. z o.o. & Co. KG
Berlin Germany
(37.0)
(14.3)
(13.1)
-
21.6
18.1
14.1
-
The Grill Concept S.L.U.
Madrid Spain
(2.2)
(3.3)
(4.4)
-
1.1
(2.5)
(3.2)
-
Kai Fu Food and Beverage Management (Shanghai) Co. Ltd
Shanghai China
(0.1)
0.1
0.1
-
(0.1)
0.2
0.2
-
LTP La Tagliatella Portugal Lda
Lisbon Portugal
0.1
(1.2)
(1.1)
-
(0.5)
(0.5)
(0.5)
-
LTP La Tagliatella Franchise II Portugal Lda
Lisbon Portugal
(0.0)
(0.0)
(0.0)
-
-
-
-
-
AmRest Topco France SAS
Paris France
2.2
0.4
1.1
-
20.7
(0.8)
(0.5)
-
AmRest Delco France SAS
Paris France
0.1
(4.0)
(3.2)
-
1.3
(6.3)
(4.4)
-
AmRest Opco SAS 3
Paris France
46.0
(14.7)
(6.9)
-
44.8
(0.8)
3.2
-
OOO Chicken Yug
Saint PetersburgRussia
9.0
1.2
1.2
-
11.0
4.4
5.0
-
OOO Pizza Company 5
Saint PetersburgRussia
(7.0)
(5.9)
(4.4)
-
(9.2)
(5.5)
(7.3)
-
AmRest Chamnord SAS
Paris France
-
-
-
-
1.1
0.1
-
-
AmRest SK s.r.o.
Bratislava Slovakia
(0.4)
(0.7)
(0.7)
-
0.3
0.6
0.6
-
AmRest Pizza GmbH
Munich Germany
0.2
-
(2.3)
-
(0.2)
(-)
(0.1)
-
Black Rice S.L.U.
Madrid Spain
0.2
(1.4)
(1.8)
-
60.3
-
-
-
Bacoa Holding S.L.U.
Madrid Spain
0.8
(0.5)
(0.7)
-
-
-
-
-
Sushi Shop Restauration SAS *
Paris France
9.8
(4.7)
(3.7)
-
(10.3)
(1.9)
3.8
-
Sushiga SARL
Paris France
-
-
-
-
(1.8)
(-)
(-)
-
SSW 1 SPRL
Waterloo Belgium
-
-
-
-
0.2
-
(-)
-
SSW 2 SPRL
Wavre Belgium
-
-
-
-
0.4
-
(0.2)
-
Sushi House SA
Luxembourg
(4.9)
(0.8)
(0.8)
-
(0.3)
0.2
0.4
-
Sushi Sablon SA
Bruxelles Belgium
-
-
-
-
1.6
(0.2)
(0.2)
-
Sushi Shop London Pvt LTD
London UK
(2.5)
0.4
0.4
-
(0.5)
(0.5)
(0.3)
-
Sushi Shop Louise SA
Bruxelles Belgium
1.1
(0.7)
(0.7)
-
(1.1)
(0.4)
(0.4)
-
Sushi Shop UK Pvt LTD
Charing UK
(1.3)
(0.1)
(0.1)
-
(0.2)
(0.2)
(0.3)
-
Sushi Uccle SA
Uccle Belgium
-
-
-
-
(0.9)
(0.1)
(0.1)
-
Sushi Shop Anvers SA
Bruxelles Belgium
(2.2)
1.7
(0.1)
-
-
(0.4)
(0.3)
-
Sushi Shop Geneve SA
Geneva Switzerland
0.7
(0.3)
(0.2)
-
-
0.6
0.9
-
Sushi Shop Lausanne SARL
Lasanne Switzerland
0.7
0.5
0.6
-
0.2
0.7
0.9
-
Sushi Shop Madrid S.L. 7
Madrid Spain
(0.6)
(2.4)
(2.4)
-
(0.2)
(1.0)
(0.2)
-
Sushi Shop Milan SARL
Milan Italy
(0.3)
(0.2)
(0.1)
-
0.3
-
0.1
-
Sushi Shop NE USA LLC
New York USA
(1.1)
-
-
-
-
-
-
-
Sushi Shop NY1
New York USA
-
-
-
-
-
-
-
-
Sushi Shop NY2
New York USA
-
-
-
-
-
-
-
-
Sushi Shop International SA
Bruxelles Belgium
-
-
-
-
0.2
(0.4)
(0.4)
-
Sushi Shop Zurich GMBH
Zurich Switzerland
(1.5)
(0.3)
(0.3)
-
-
(0.2)
(-)
-
Sushi Shop Nyon SARL
Nyon Switzerland
0.2
0.2
0.2
-
0.1
0.2
0.4
-
Sushi Shop NL B.V.
Amsterdam Netherlands
(0.5)
0.6
(0.4)
-
-
(0.5)
(0.4)
-
(all figures in EUR millions unless statedotherwise)
26
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Company name
Registered office
2020
2019
Financial services and others for the Group
Total Equity
Net result
Operating result
Dividends distributed
Total Equity
Net result
Operating result
Dividends distributed
AmRest LLC
Wilmington, USA
(0.4)
(0.1)
(0.0)
-
(6.3)
5.9
(-)
-
AmRest Work Sp. z o.o.
Wroclaw Poland
0.3
0.1
0.1
-
0.2
(-)
-
-
La Tagliatella International Kft
(0.1)
(0.3)
(0.3)
-
0.2
(0.1)
(0.1)
-
La Tagliatella SAS
Lyon France
(0.2)
(0.0)
(0.0)
-
0.1
-
-
-
AmRest FSVC LLC
Wilmington USA
(0.8)
(0.6)
(0.6)
-
9.6
(10.6)
(4.8)
-
AmRest Kaffee Sp. z o.o.
Wroclaw Poland
(26.5)
(31.0)
0.0
-
4.7
(0.2)
4.4
-
AmRest Franchise Sp. z o.o.
Wroc?aw Poland
1.0
0.8
3.6
-
-
0.2
0.3
-
Supply services for restaurants operated by the Group
Total Equity
Net result
Operating result
Dividends distributed
Total Equity
Net result
Operating result
Dividends distributed
SCM Sp. z o.o.
Warsaw Poland
4.6
2.9
3.6
(1.2)
6.2
3.5
4.1
(2.9)
Above data were derived from local documentation of AmRest Group in accordance with local GAAPS in each country. In some countries local audits for 2020 have not finalized.
*See details in note 14.
(all figures in EUR millions unless statedotherwise)
27
AmRest Holdings SE
Annual Accounts and Directors’ Report
for the year ended 31 December 2020
6.2 ASSETS AND LIABILITIES IN FOREIGN CURRENCIES:
Thevalueofassetsandliabilitiesdenominatedinforeigncurrencyasat31December2020arepresented below:
Denominated
Millions of foreign currency
Denominated in PLN
In CZK
Denominated in
USD
Assets foreign currency
Total non-current assets foreign currency
-
-
15.9
Total current assets foreign currency
0.4
60.0
1.4
Total assets foreign currency
0.4
60.0
17.3
Liabilities foreign currency
Total non-current liabilities foreign currency
224.0
-
-
Total current liabilities foreign currency
28.5
-
-
Total liabilities foreign currency (see note 6.5)
252.5
-
-
Totalliabilitiesinforeigncurrency,bothintheshortandlongterm,mainlycorrespondtotheseniortermand revolvingfacilitiesagreementwithfinancialinstitutionsforatotalamountofPLN252millionsignedon October5,2017.Attheendof2020,thetotalliabilitiespendingtobepaidcorrespondtothetotalamountof the loan less the amortization of part of it during 2020.
TheassetsdenominatedinCZKandUSDcorrespondsmainlytoDividendsreceivableswiththeentityAmRest S.R.O(CZK)andwithloansandinterestreceivableswiththeentitiesAmrestChinagroupLTD.,BlueFrogFood & Beverage Management and AmRest HK Limited (USD).
Thevalueofassetsandliabilitiesdenominatedinforeigncurrencyasat31December2019arepresentedbelow:
Assets foreign currency
Total non-current assets foreign currency
-
13.2
Total current assets foreign currency
1.4
1.3
Total assets foreign currency
1.4
14.5
Liabilities foreign currency
Total non-current liabilities foreign currency
252.0
-
Total current liabilities foreign currency
28.4
-
Total liabilities foreign currency (see note 6.5)
280.4
-
6.3.CURRENT AND NON-CURRENT FINANCIAL ASSETS (EXCLUDING EQUITY INVESTMENTS)
Thenetbookvalueofeachoneofthecategoriesoffinancialassetsestablishedintheregistrationand valuation rule for “Financial Instruments” except for investments in the equity of group is as follows:
Non-current Financial assets
Current Financial assets
Other credits and derivatives
Other credits and derivatives
Categories
2020
2019
2020
2019
Loans to group companies (note 14)
256.9
228.2
45.8
20.6
Other financial assets
0.1
0.1
0.1
-
Other financial assets with group companies (note 14)
-
-
3.4
2.7
(all figures in EUR millions unless statedotherwise)
28
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Trade and other receivables (nota 6.4)
-
-
2.2
21.4
Available-for-sale financial assets at fair value
-
76.2
-
-
Total
257.0
304.5
51.5
44.7
TheCompanygrantsloanstogroupcompaniesatvariableinterestratesintherangeof2.3%-5.5%plus3-months Euribor/Libor margin, with maturities starting in 2021 (see note 6.7).
TheCompanyconsidersthatthereareindicationsofimpairmentinthefinancialassetsifthefinancialcredits totheGroupcompaniesexceedsthetheoreticalbookvalueoftheequityofthegroupcompanyorifthe credits has allocated impairments from previous periods.
TheCompanyidentifiedimpairmentindicatorsforthefollowingcreditstogroupcompanies:AmRestAdria d.o.o.,AmRestPizzaGmbH,AmRestSKs.r.o.,AmRest CoffeeDeutschlandSp.z o.o,AmRest DESp.zo.o.& Co. KG, AmRest Kaffee Sp. z o.o, AmRest TopCo, AmRest HK Ltd.
Toestimatethepotentialimpairmentofthecreditstogroupcompanies,thisisdeterminedusingvaluation techniques.TheCompanyusesjudgmenttoselectavarietyofmethodsandmakeassumptionsthatarebased primarily on market conditions existing at the balance sheet date.
ThetotalamountofloanswiththeentityAmRestHKhavebeenimpairedinpreviousyearsbyatotalamount of 1,7million EUROS as the entity is dormant.
Available-for-sale financial assets
Available-for-salefinancialassetscomprisedtheequityinvestmentinGlovoapp23.S.L.,basedinBarcelona, Spain (“Glovo”).
The movement of the Available for sale financial assets as at 31 December 2020 is as follow:
Cost
31 December 2019
Increase
Decrease
31 December 2020
Glovoapp23. S.L.
76.2
-
76.2
-
Total
76.2
76.2
InOctober2020,theCompanyhasreachedanagreementwithDeliveryHeroforthetransferofits7.5%stake (non-diluted)theCompanyhasinGlovoforanamountofEUR76.2million.Thisagreementledtoarevenue recognitionofEUR33.5millionarisingfromthereversalinequityofthepastfairrevaluationsregistered(EUR 31.7millionandEUR1.9millionin2019and2018,respectively),netofthedeferredtaxassetsarisenfrom thesevaluations(EUR8.4million).ThefinalizationtookplaceinDecember2020andresultedincashinflow ofEUR75.5million,presentedasproceedsfromotherfinancialassetsintheStatementofCashFlows.At31 December 2020 Eur 0.7 million are pending to be collected from this operation.
The movement of the Available for sale financial assets as at 31 December 2019 is as follow:
Cost
31 December 2018
Additions
Fair valuation
31 December 2019
Glovoapp23. S.L.
26.9
17.6
31.7
76.2
Total
26.9
17.6
31.7
76.2
On18July2018,basedontheagreementssigned,AmRestacquiredatrancheofnewly-issuedsharesinGlovo andpurchasedaportionofexistingsharesfromcertainshareholdersofGlovo.Asaresultoftheinvestment, whichtotaledEUR25million,AmRestbecameaco-leadinvestorholdingGlovosharesgivingita10%stakeat shareholders’ meetings.
On13August2019,theGroupsignedtheagreementwithGlovoapp23.S.L.forthetransferfromAmRestto Glovoof100%sharesinRestaurantPartnerPolskaSp.zo.o.(“PizzaPortal”).On28October,duetosatisfaction ofconditionsprecedent,AmResttransferred100%ofsharesinPizzaPortaltoGlovo.Thetransactionprice
(all figures in EUR millions unless statedotherwise)
29
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
amountedtoEUR35million,includingearn-outastherequirementshavebeenmetinconsiderationforthe transferof100%ofsharesinPizzaPortal,AmRestreceivedtotalsalepriceintheamountofEUR35million,as acombinationofcashpaymentofEUR20millionandnewlyissuedsharesofGlovovaluedaccordingtothe agreementatEUR15million(seenote6.1),whichconstitutesfinalsettlementoftheagreement.Fairvalueof newly issued shares amounted to EUR 17.6 million.
AsaresultoftheabovementionedtransactionandsharecapitalincreasesinGlovo,asof31December2019 AmRestheldGlovosharesgivingita7.5%stakeatshareholders’meetings.Astherearesomedilutive instruments such as employee options and phantom shares, a fully-diluted AmRest stake in Glovo is 6.19%.
6.4 TRADE AND OTHER RECEIVABLES
As at 31 December 2020 and 2019 the trade and other receivables were composed as follows (see note 6.3):
31 December2020
31 December2019
Trade and other receivables with third parties
1.0
20.3
Trade and other receivables with group companies
3.0
2.9
Income tax and other credits with the tax administration
1.4
1.1
Impairment on other accounts receivables with group companies
(1.8)
(1.8)
Total Trade and other receivables
3.6
22.5
At 31 December 2019 the Company had pending to receive EUR 20 million arising from the sale of Glovo.
The analysis of the movements of the impairment losses deriving from the credit risk of financial assets recorded at amortized cost is as follows:
Year ended
Balance at the beginning of the year
1.8
2.4
Reclassifications to Equity instruments
-
(1.5)
other
-
0.9
Balance at the end of the financial year
1.8
1.8
Classes
Non-current Financial Liabilities
Current
Financial Liabilities
Categories
2020
2019
2020
2019
Debts with Financial Institutions
322.3
293.8
28.5
30.0
Other Debts and payables
77.5
101.0
25.1
-
Debts with group companies (note 14)
-
-
1.7
1.7
Total
399.8
394.8
55.3
31.7
Debt with financial institutions – Bank loans
Asat31December2020,syndicatedbankfinancingsecurityforliabilitiesin2017,withfurtheramendments, accountsforthemajorityofAmRestdebt.AmRestHoldingsSEexecutedpartiallytranchesAandDandthe tranchesEandFwhicharepresentedinthefinancialdebtwithfinancialinstitutionsofthisAnnualAccounts (amountingtoEUR350.8milliontherestofthetrancheswereexecutedfromAmRestSp.zo.o.andAmRest s.r.o. ). Short term debt includes 0,5 million Euros related to waiver fees payables.
(all figures in EUR millions unless statedotherwise)
30
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
The available tranches following scheduled repayment in September 2020:
Tranche(*)
Maximum amount (million)
Date added
Purpose
A
EUR 225
October 2017
B
PLN 270
October 2017
C (fully repaid in Q1 2019)
CZK 0
October 2017
D
PLN 450
October 2017
Refinancing of bank debt, general corporate purposes
E
PLN 252
June 2018
Refinancing of Polish bonds
F
EUR 171
October 2018
M&A, general corporate purposes
* Approximate total amount: EUR 609m
Details of bank financing are as follows:
■
Signing date: 5 October 2017, ■
Final repayment date: 30 September 2022, ■
JointBorrowers:AmRestHoldingsSE,AmRestSp.zo.o.andAmRests.r.o.(the“Borrowers”;AmRest Sp. z o.o. and AmRest s.r.o. are fully owned by AmRest Holdings SE), ■
Lenders:BankPolskaKasaOpiekiS.A.,PowszechnaKasaOszczędnościBankPolskiS.A.,INGBank Śląski Polska S.A. and Česká spořitelna, a.s. ■
Interestrates:Approximatelyhalfoftheavailablefacilityisprovidedatvariableinterestrates(3-month Euribor/Wibor increased by margin) and parts of tranches A and F are provided on fixed rate.■
Securities:submissionstoexecutionfromtheBorrowers,guaranteesfromGroupcompanies,pledge on shares of Sushi Shop Group.■
Otherinformation:AmRestisrequiredtomaintaincertainratiosatagreedlevel,inparticular,net debt/adjustedconsolidatedEBITDAistobeheldbelow3.5andconsolidatedEBITDA/interestchargeistostay above 3.5. Both ratios are calculated without the effect of IFRS 16. Priorto2020-year-endAmResthasobtainedfromitsfinancingbanksandmajorityofbondholders (Schuldschein)waiverstothecompliancewithcertaincovenantsrelatedtotheGroup’sleverageandinterest coverageratiosforfourthquarterof2020andthefirst,secondandthirdquartersof2021).Duringsaid periods,thosecovenantshavebeenreplacedbyacommitmenttomaintainaminimumlevelofliquidity(80 million euros, which is lowered to 50 million euros for the third and fourth quarters of 2021).
TheGroupmaintainsclosecommunicationwithitsfinancingbanks.Allscheduledrepaymentsweremadein 2020
Currentfinancialdebtwithfinancialinstitutionsprincipallyincludesshorttermrepaymentsofthepreviously mentioned facility agreement payable on September 30, 2021.
Theeffectiveinterestratesaresimilartothemarketratesforspecificborrowings.Therefore,thefairvalueof the liabilities and presented above does not differ significantly from their carrying amounts.
Other debts and payables - Bonds
(all figures in EUR millions unless statedotherwise)
31
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
The table below presents all SSD issues and their maturities:
Issue date
Amount (EUR million)
Interest rate
Maturity date
Amount expected to be repaid* in 2021 (EUR million)
Purpose
7 April 2017
17.0
Fixed
7 April 2022
3.0
7 April 2017
9.0
Fixed
5 April 2024
8.0
3 July 2017
45.5
Fixed
1 July 2022
12.5
3 July 2017
20.0
Fixed
3 July 2024
0
3 July 2017
9.5
Variable
3 July 2024
0
Repayment. general corporate purposes
101.0
The role of the Lead Arranger and Paying Agent on all issues was entrusted to Erste Group Bank AG.
Asat31December2020thedebtamountstoEUR101.0million,interestandwaiverfeespayablesamounting to EUR 1.4 million and 0.2 million respectively, that are presented in the current liabilities.
AmRestGroupisrequiredtomaintaincertainratiosatagreedlevels,inparticularnetdebt/EBITDAistobe heldbelow3.5xandEBITDA/interestchargeistostayabove3.5.Asthesecovenantswerenotmetat2020YE, theCompanyexpectsEUR23.5millionoutof101millionwillberepaidin2021*toinvestorswhodidnotgrant the covenant waivers.
6.6 TRADE AND OTHER PAYABLES
As at 31 December 2020 and 2019 the trade and other payables were composed as follows:
31 December 2020
31 December 2019
Trade and other payables with third parities
1.9
0.3
Trade and other payables with group companies
1.8
1.7
Personnel expenses
0.3
0.2
Other payables with tax administration (see note 11)
0.5
3.8
Total trade and other payables
4.5
6.0
Information on average payment period to suppliers. Third additional provision. “Information requirement” of Law 15/2010 of July 5.
31 December 2020
31 December 2019
Number of days:
63
29
Ratio of payments
34
32
Ratio of outstanding invoices
120
19
Millions of EUR:
Total payments
6.3
5.1
Outstanding invoices
3.2
1.7
ThemaximumlegalperiodapplicabletotheSpanishentitiesoftheGroupinaccordancewithLaw3/2004,of 29December,whichestablishesmeasurestocombatlatepaymentincommercialoperations,andin accordancewiththetransitoryprovisionsestablishedinLaw15/2010,of5July,is60daysfrom1January2013.
InGeneral,paymentstoexternalsuppliersweremadewithinthelegallimitof60days.Theratioof outstandinginvoicesincreasedduetothefactthatthepaymentofsomeintercompanyinvoiceswas postponed.
(all figures in EUR millions unless statedotherwise)
32
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
6.7ANALYSIS BY MATURITIES
Asat31December2020and2019,theamountsoffinancialinstrumentswithadeterminedordeterminable maturity classified by year of maturity are the following:
Financial Assets
Total
2020
2021
2022
2023
2024
Following years
Loans to group companies (note 6.3)
45.8
122.6
112.4
13.4
8.5
302.7
Trade and other receivables
3.6
-
-
-
-
3.6
Other financial assets with group companies
3.4
-
-
-
-
3.4
Other current assets
0.1
-
-
-
-
0.1
Total
52.9
122.6
112.4
13.4
8.5
309.8
Financial Assets
2019
2020
2021
2022
2023
Following years
Total
Loans to group companies (note 6.3)
20.6
33.1
95.3
99.8
-
248.8
Trade and other receivables
21.4
-
-
-
-
21.4
Other financial assets with group companies
2.7
-
-
-
-
2.7
Total
44.7
33.1
95.3
99.8
-
272.9
Financial Liabilities
2020
2021
2022
2023
2024
Following years
Total
Debts with Financial Institutions
28.5
322.3
-
-
-
350.8
Other Debts and payables
25.1
47.0
-
30.5
-
102.6
Debts with group companies
1.7
-
-
-
-
1.7
Trade and Other payables
4.5
-
-
-
-
4.5
Total
59.8
369.3
-
30.5
-
459.6
Financial Liabilities
2019
2020
2021
2022
2023
Following years
Total
Other Debts and payables
1.3
-
62.5
-
38.5
102.3
Debts with Financial Institutions
28.7
28.5
265.3
-
-
322.5
Debts with group companies
1.7
-
-
-
-
1.7
Trade and Other payables
6.0
-
-
-
-
6.0
Total
37.7
28.5
327.8
-
38.5
432.5
Cash and cash equivalents as at 31 December 2020 and 2019 are presented in the table below:
31 December 2020
31 December 2019
Cash at bank
74.2
9.5
74.2
9.5
(all figures in EUR millions unless statedotherwise)
33
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
8. Equity
8.1.SHARE CAPITAL
Since27April2005,thesharesofAmRestHoldingsSEwerelistedontheWarsawStockExchange(“WSE”)and since 21 November 2018 on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges.
There were no changes in share capital of the Company during the years 2020 and 2019.
As at 31 December 2020 and 2019 the Company has 219 554 183 shares issued.
Sharecapitalconsistsofordinaryshares.Allsharesissuedaresubscribedandfullypaid.Theparvalueof each share is 0.1 EUR.
HoldersofordinarysharesareauthorizedtoreceivedividendsandhavevotingrightsattheGroup’sGeneral Shareholders’ Meetings proportionate to their holdings.
Therearenosharescommittedtobeissuedunderoptions,employeeshareschemesandcontractsforthe sale of shares.
Shareholder
Number of shares and votes at the Shareholders’ meeting
% of shares and votes at the Shareholders’ meeting
FCapital Dutch B. V.*
147 203 760
67.05%
Nationale-Nederlanden OFE
9 358 214
4.26%
Artal International S.C.A.
11 366 102
5,18%
Aviva OFE
6 843 700
3.12%
Other Shareholders
44 782 407
20.40%
*FCapitalDutchB.V.isthesoleshareholderofFCapitalLux(holdingdirectly56509547AmRestshares)andthesubsidiaryofFinaccessCapital, S.A.deC.V.GrupoFinaccessSAPIdeCVisthedirectmajorityshareholderofFinaccessCapital,S.A.deC.V.andasubsidiaryofGrupoFar-Luca, S.A.deC.V.ThedirectmajorityshareholderofGrupoFar-Luca,S.A.deC.V.,Mr.CarlosFernándezGonzález,isamemberofAmRest’sBoardof Directors.
8.2.RESERVES
The composition of reserves as at 31 December 2020 and 2019 is as follows:
31 December 2020
31 December 2019
Voluntary Reserves
56.8
33.5
Legal reserves
4.1
1.6
60.9
35.1
Thelegalreserveshavebeenaccruedaccordingtoarticle274oftheCapitalCompaniesLawwhichstablishes that,inanycase,anamountof10%oftheprofitoftheperiodshallbedistributedtolegalreservesuntilit reaches, at least, 20% of the share capital.
Itcan’tbedistributedandincaseitisusedtocompensatelosses,becausetherearenototherreserves available for it, the reserve has to be replaced with future profits.
AsofDecember31,2020,and2019,theCompanyhasnotfullyendowedthisreservewiththeminimumlimit established by the Consolidated Text of the Capital Companies Law.
8.3.TREASURY SHARES
TheCompanyusuallyacquirestreasurysharesforthepurposeoftheexecutionofthestockoptionplanof theemployeesonWarsawStockExchangeinPoland,thatiswhythepriceoftheshareisdenominatedinPLN.
Asat31December2020AmRestheld623,461ownsharesrepresenting0.2840%ofthesharecapital(724,415 shares in 2019).
(all figures in EUR millions unless statedotherwise)
34
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
During2020,AmRestHoldingsSEdidnotpurchaseanyownshares(89.000treasurysharesatanaverage purchase price of PLN 43.75 in 2019)
The movement of treasury shares for the stock option plan is as follows:
Year ended
31 December 2020
31 December 2019
Initial Balance
(7.5)
(15.2)
Acquisition of own shares
-
(0.9)
Delivery of shares for the stock option plan (see note 8.4)
1.0
8.6
Ending Balance
(6.5)
(7.5)
8.4.OTHER EQUITY INSTRUMENTS
Intheitemofthebalancesheetotherequityinstruments,itisregisteredtheprovisionofthestockoption plan for the employees recognized under the equity settlement method.
The movement of the accrual for the equity instruments of the stock option plan is as follow:
Year ended
31 December 2020
31 December 2019
Initial Balance
(25.4)
(6.2)
Equity share base plans accrual
2.8
6.6
Settlement of cash-settled plans in shares (accrued costs)
0.1
0.7
Reclassification of options exercised in cash
-
(17.1)
Delivery of shares for the stock option plan (see note 8.3)
(1.0)
(8.6)
Proceeds from shares transfers (employee’s options)
0.1
0.9
Settlements of WHT paid by the entity
-
(1.7)
Ending Balance
(23.4)
(25.4)
8.5.ADJUSTMENTS FOR CHANGES IN VALUE
The balance of the adjustments for changes in value is as follow:
31 December 2020
31 December 2019
Currency translation reserve
(6.7)
(6.7)
Fair value adjustments of assets available for sale (see note 6)
-
33.5
Tax impact on adjustment of changes in value
-
(8.4)
Adjustments for changes in value
(6.7)
18.4
Intheitemcurrencytranslationreserveisregisteredtheresultofthechangeofthefunctionaland presentation currency from PLN to EUR.
Intheitemfairvalueadjustmentsofassetsavailable-for-salewasregisteredtherevenueresultingfromthe valuationatfairvalueofGlovoapp23.S.L.investment(EUR33.5million)anditscorrespondingtaximpact. During the year 2020 fair valuation was transferred to P&L and the tax impact adjustment was reversed.
8.6.SHARE PREMIUM
Thisreserveisunrestricteduptotheamountwhich,asaresultofitsdistribution,meansthattheequityis not less than the share capital.
Thisitemreflectsthesurplusoverthenominalvalueofthesharecapitalincreaseandadditionalcontributions to equity without issue of shares made by shareholders prior to becoming a public entity.
(all figures in EUR millions unless statedotherwise)
35
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
There were no transactions within share premium in 2020 and 2019.
TheCompanyestablishedlong-termincentiveplansinordertobindaportionofmanagers’andexecutives’ remunerationwiththeGroup’smarketvalue.Duringyear2020,theCompanyhadtheshare-basedpayment arrangementsaccordingtosixshareoptionplans.PartofoptionsinthePlan2isaccountedascash-settled duetotheavailabilityofcashexercisemethoduponthechoiceofanemployee.Allotheroptionsinthe following plans are equity-settled.
Plan 2 – Stock Option Plan 2005
Plan 2 was implemented in April 2005. Granting of the options finished in 2016.
UptoNovember2014theexercisemethodwasinequityinstruments.InNovember2014,thethenexisting SupervisoryBoardoftheCompanyapprovedachangeofregulationsbyaddingnetcashsettlementofoption value(employeedecidesaboutsettlementmethod).Duetotheabovechanges,Plan2comprisedbothequity-settled options and cash-settled options.
In2015achangeinregulationseliminatedapossibilityofoptionsettlementwithcashmethodforthegrants after8December 2015.Furthermore,agroupofemployeesmadeaunilateralstatementaboutresignation fromthecashsettlementpossibilityinrelationtooptionalsograntedinpreviousperiods.Asaresultofthe modificationofsomeoptionsfromcash-settledtoequity-settled,in2017areclassificationinamountofEUR 0.5 million was accounted from liabilities into equity.
Plan 3 – Management Incentive Plan 2011
Grantingoftheoptionsfinishedin2014.TheSupervisoryBoardofGroup(thenexisting)wasentitledto determinetheemployeesauthorizedtoparticipateinthePlanandthenumberofoptionsgrantedandthe datesfortheirgranting.TheoptionexercisepricewasinprincipleequaltothemarketpriceoftheCompany’s sharesasatthedateprecedingthedayofawardingtheoptionandthenincreasedby11%eachyear.The vestingperiodwas3-5years.AllremainingoptionsgrantedwithinthePlan3hasbeenexercisedduringyear 2019.
Plan 4 – Stock Option Plan 2017
InJanuary2017theGroupintroducedanewshare-basedStockOptionPlan.Thenumberofoptionsgranted, employeesawardedandgrantingdateswereinitiallydeterminedbythethenexistingManagementBoard (currentExecutiveTeam),howeverthenumberofoptionswaslimitedto750,000options.TheGrantingPeriod wassetbetween1January2017and31December2019.Theoptionexercisepricewillbeinprincipleequal tothemarketpriceoftheCompany’ssharesasatthedateofgrantingtheoption,andthevestingperiodwill be 3 to 5 years. There are no cash settlement alternatives.
InDecember2018theBoardofDirectorsoftheCompany(whotookoverManagementBoardfacultyonthis matterfollowingthetransferofdomicileoftheCompanyfromPolandtoSpain)resolvedtoadjusttheshare-basedplansoftheCompanysotheycanalsobeexecutedthroughtheSpanishStockExchanges,wherethe Company’s shares started trading on 21 November 2018.
Plan 5 – Management Incentive Plan 2017
InJanuary2017theGroupintroducedanewshare-basedManagementIncentivePlan,offeredtoselected employees.ThewholenumberofshareswhichwereattributedtotheoptionswasdeterminedbytheBoard ofDirectors,however,itmaynotexceed1,000,000shares.InaccordancewiththeprovisionsofthePlan,when requestedbymanagementtheBoardofDirectors,wasentitledtodeterminetheemployeesauthorizedto participateinthePlan,thenumberofoptionsgrantedandthedatesfortheirgrantingamongotherissues. TheGrantingPeriodwassetbetween1January2017and31December2019.Theoptioninitialexerciseprice
(all figures in EUR millions unless statedotherwise)
36
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
wasinprincipleequaltothemarketpriceoftheCompany’ssharesasatthedateofFirstGrant.Theexercise priceshallincreaseon1st,2ndand3rdanniversaryby11%.Thevestingperiodlasts3to5years.Thereare no cash settlement alternatives.
Plan 6 – Stock Option Plan 2020
In2020theGroupintroducedashare-basedStockOptionPlan,whichisanextensionoftheregulations introducedintheStockOptionPlan2017.Theplaniseffectiveforanadditionalperiodofoneyearexclusively duringthe2020financialyearundertheirexactsametermsandconditionswiththesoleexceptionofthe ExercisePricementionedinthetablebelow.Thenumberofoptionsgranted,employeesawardedand grantingdateswereinitiallydeterminedbytheExecutiveTeam.In2020thenumberofoptionswaslimitedto 3.6millionoptions.TheoptionexercisepricewillbeinprincipleequaltothemarketpriceoftheCompany’s sharesasatthedateofgrantingtheoption,andthevestingperiodwillbe3to5years.Therearenocash settlement alternatives.
Plan 7 – Management Incentive Plan 2020
In2020theGroupintroducedashare-basedManagementIncentivePlan,offeredtoselectedemployees, whichisanextensionoftheregulationsintroducedintheManagementIncentivePlan2017.Theplanis effectiveforanadditionalperiodofoneyearexclusivelyduringthe2020financialyearundertheirexactsame termsandconditionswiththesoleexceptionoftheExercisePricementionedinthetablebelow.Thewhole numberofshareswhichwereattributedtotheoptionswasdeterminedbytheBoardofDirectors.In2020 thenumberofoptionswaslimitedto4.65millionoptions.InaccordancewiththeprovisionsofthePlan,when requestedbymanagementtheBoardofDirectors,wasentitledtodeterminetheemployeesauthorizedto participateinthePlan,thenumberofoptionsgrantedandthedatesfortheirgrantingamongotherissues. TheoptioninitialexercisepricewasinprincipleequaltothemarketpriceoftheCompany’ssharesasatthe dateofFirstGrant.Theexercisepriceshallincreaseon1st,2ndand3rdanniversaryby11%.Thevesting period lasts 3 to 5 years. There are no cash settlement alternatives.
Thetermsandconditionsfortheshareoptionsoutstandingasat31December2020arepresentedinthe table below:
Grant date
Terms and conditions for vesting of the options
The maximum term of options
Option exercise price in EUR
Method of settlement
Plan 2 – SOP
June 20, 2011
1.87
Equity or equity/cash*
April 30, 2012
1.68
Equity or equity/cash*
April 30, 2013
1.94
Equity or equity/cash*
April 30, 2014
1.96
Equity or equity/cash*
December 9, 2015
3.14
Equity or equity/cash*
April 30, 2016
1-5 years, 20% per annum
10 years
5.35
Equity
Plan 4 – SOP
May 30, 2017
8.14
Equity
January 1, 2018
9.66
Equity
April 30, 2018
10.91
Equity
August 6, 2018
10.46
Equity
October 1, 2018
10.63
Equity
December 10, 2018
9.40
Equity
April 30, 2019
3-5 years, 60% after 3rd year, 20% after 4th and 5th year
10 years
9.62
Equity
Plan 5 – MIP
March 15, 2017
10.51
Equity
September 13, 2017
10.97
Equity
March 3, 2018
10.43 - 10.88
Equity
October 1, 2018
14.54
Equity
March 26, 2019
10.23 - 14.49
Equity
May 13, 2019
3-5 years, 33% p.a.
10 years
12.10
Equity
Plan 6 – SOP
July 13, 2020
3-5 years, 60% after 3rd
10 years
4,99
Equity
(all figures in EUR millions unless statedotherwise)
37
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Grant date
Terms and conditions for vesting of the options
The maximum term of options
Option exercise price in EUR
Method of settlement
Plan 2 – SOP
June 20, 2011
1.87
Equity or equity/cash*
April 30, 2012
1.68
Equity or equity/cash*
April 30, 2013
1.94
Equity or equity/cash*
April 30, 2014
1.96
Equity or equity/cash*
December 9, 2015
3.14
Equity or equity/cash*
April 30, 2016
1-5 years, 20% per annum
10 years
5.35
Equity
October 1, 2020
year, 20% after 4th and 5th year
5,78
Equity
Plan 7 – MIP
February 10, 2020
15,10
Equity
October 1, 2020
3-5 years, 33% p.a.
10 years
7,90
Equity
*Forsomeoptionsonlytheequitymethodisapplicable,assomeemployeescandecideuponthesettlementmethod,asdisclosed in Plan 2 description above.
Optionsvestwhenthetermsandconditionsrelatingtotheperiodofemploymentaremet.ThePlansdonot provide any additional market conditions for vesting of the options.
Inthetablebelowwepresentthenumberandweightedaverageoftheexerciseprices(WAEP)of,and movements in, the options from all plans during the year ended 31 December 2020 and 2019:
Number of option 2020
WAEP in EUR (before indexation)
Plan 7
Plan 6
Plan 5
Plan 4
Plan 3
Plan 2
Atthebeginningofthe period
8.52
-
-
5 400 000
6 988 850
-
1 150 266
Grantedduringthe period
7.07
3 350 000
3 204 500
-
-
-
-
Exercisedduringthe period
7.04
-
-
(166 666)
-
-
(159 554)
Forfeitedduringthe period
10.15
-
-
(1 950 000)
(209 200)
-
(58 310)
Outstandingattheend of the period
8.68
3 350 000
3 204 500
3 283 334
6 779 650
-
932 402
-includingexercisable asattheendoftheperiod
6.36
-
-
-
938 730
-
722 562
Number of option 2019
WAEP in EUR (before indexation)
Plan 7
Plan 6
Plan 5
Plan 4
Plan 3
Plan 2
Atthebeginningofthe period
7.71
-
-
6 650 000
4 118 750
2 750 003
2 274 776
Grantedduringthe period
9.23
-
-
1 450 000
3 440 800
-
-
Exercisedduringthe period
1.98
-
-
-
(10 000)
(2 750 003)
(1 027 742)
Forfeitedduringthe period
8.30
-
-
(2 700 000)
(560 700)
-
(96 768)
Outstandingattheend of the period
8.52
-
-
5 400 000
6 988 850
-
1 150 266
-includingexercisable asattheendoftheperiod
3.59
-
-
-
499 168
-
-
TheweightedaveragesharepriceatthedatesofexerciseoftheoptionswasEUR6.98in2020andEUR9.83 in 2019.
Theweightedaverageremainingcontractuallifefortheshareoptionsoutstandingasat31December2020 was 8.20 years (2019: 8,21 years).
Measurement
Thefairvalueoftheequityinstrumentshasbeenmeasuredusingnumericalmethodforsolvingdifferential equationsbyapproximatingthemwithdifferenceequations,calledfinitedifferencemethod.Thefairvalueof
(all figures in EUR millions unless statedotherwise)
38
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
thecash-settledoptionshasbeenmeasuredusingtheBlack-Scholesformula.Thefairvalueoftheoptionsas at the grant date has been determined using the support of an external actuary.
Thefairvalueoftheoptionsgrantedduringtheperiod,asatthegrantdate,amountedasdescribedbelow.It was determined on the basis of the following parameters:
Plan
Average fair value of option as at grant date
Average share price at the grant date
Average exercise price
Expected volatility
Expected term to exercise of options
Risk-free interest rate
2020
Plan 6 (SOP)
EUR 0.93
EUR 4.14
EUR 5.75
35%
5 years
2%
Plan 7 (MIP)
EUR 0.63
EUR 4.50
EUR 8.30
35%
5 years
2%
2019
Plan 4 (SOP)
EUR 2.90
EUR 9.62
EUR 9.62
30%
5 years
2%
Plan 5 (MIP)
EUR 2.83
EUR 10.36
EUR 11.37
30%
5 years
2%
Theexpectedlifeoftheoptionsisbasedonhistoricaldataandcurrentexpectationsandisnotnecessarily indicativeofexercisepatternsthatmayoccur.Theexpectedvolatilityreflectstheassumptionthatthe historicalvolatilityoveraperiodsimilartothelifeoftheoptionsisindicativeoffuturetrends,whichmaynot necessarily be the actual outcome.
Share-based payments costs and liabilities
TheCompanyrecognisesaccrualforequity-settledoptionsinreservecapital.Theamountsasat31December 2020 and 31 December 2019 are presented in a table below:
31 December 2020
31 December 2019
Reserve capital - Plan 2
1.8
1.8
Reserve capital - Plan 4
8.3
5.0
Reserve capital - Plan 5
5.2
6.6
Reserve capital - Plan 6
0.1
-
Reserve capital - Plan 7
0.2
-
15.6
13.4
Intheitemofthebalancesheetotherprovisionsisregisteredtheprovisionofthestockoptionplanforthe employees recognized under the cash settlement method:
Year ended
Initial Balance
0.5
1.3
Revaluation fair value
(0.3)
-
Plan modification (reclassification from SOP Equity settlement to cash settlement)
(0.1)
17.1
Reclassification of options settled with equity method
-
(0.7)
Options under Equity settlement method exercise in cash
-
(17.1)
Options exercised with cash settlement method
-
(0.1)
Ending Balance
0.1
0.5
The composition of the balances with the public administrations is as follow:
(all figures in EUR millions unless statedotherwise)
39
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Assets (note 6.4)
31 December 2020
31 December 2019
Income tax receivable
1.4
1.0
VAT Receivable
-
0.1
Total
1.4
1.1
Liabilities (note 6.6)
VAT payable
0.4
0.1
Personal income tax and other withholding taxes
0.1
3.7
Total
0.5
3.8
Income tax
Witheffects1January2018.theCompanyisundertheconsolidationtaxregimesetforthinChapterVIofTitle VIIofCorporateIncomeTaxLaw27/2014of27November2014,beingtheheadofthetaxgroupcomposed by the Company itself and the rest of the Spanish subsidiaries which at 31 December 2020 are the following:
■
Restauravia Food. S.L.U.■
Pastificio Service. S.L.U.*■
The Grill Concept. S.L.U■
Black Rice S.L.U■
Bacoa Holdings S.L.U■
Shushi Shop Madrid S.L.U■
AmRest Global S.L.U.On1October2019 AmRestavia,S.L.U.and Restauravia GrupoEmpresarial,S.L.weremergedinto AmRest Tag S.L.U. On26December2019 AmRest CapitalZrt.(Hungary)wasmergedinto AmRest TagS.L.U. Onmentioned date all assets of merged companies have been taken by AmRest TAG S.L.U.
The composition of the income tax expense of the individual Company is as follows:
31 December 2020
31 December 2019
Corporate income tax
-
2.2
Change in deferred taxes and liabilities
2.5
-
Total income tax recognized in the income statement
2.5
2.2
The amounts reported in change in deferred tax assets correspond to tax losses of the period.
The reconciliation between the net result and the tax base of the individual entity as of 31 December 2020 is as follows:
Income statement
Additions
Decreases
Total
Profit and loss for the period
-
-
34.3
Income tax expense
-
-
(2.5)
Permanent differences
-
(7.6)
(7.6)
Temporary differences
-
(34.3)
(34.3)
- With origin in the current year
-
(0.8)
(0.8)
- With origin in the previous year
-
(33.5)
(33.5)
Tax base
-
-
(10.1)
Corporate income tax expense/(revenue) 25%
-
-
-
The reconciliation between the net result and the tax base of the individual entity as of 31 December 2019 is as follows:
Income statement
Additions
Decreases
Total
Profit and loss for the period
25.8
Income tax expense
(2.2)
Permanent differences
-
(37.7)
(37.7)
(all figures in EUR millions unless statedotherwise)
40
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Temporary differences
5.4
-
5.4
- With origin in the current year
5.4
-
5.4
Tax base
(8.7)
Corporate income tax expense/(revenue) 25%
(2.2)
InpermanentdifferencesareadjustedtherevenuesfromDividends,thestockoptionplan,andthegainson disposals of financial assets held for sale that are considered exempt for income tax purposes.
Intemporarydifferencesareadjustedmostlytheimpairmentsforreceivablesandinvestmentswithgroup companies, that will be deductible once the companies are liquidated.
Themovementofthedeferredtaxassetsandliabilitiesfortheyearsended31December2020and2019has been as follows:
Year ended
Deferred tax assets
31 December 2020
31 December 2019
Balance at beginning of the period
-
-
Debit (credit) on the profit and loss account
2.5
-
Balance at the end of the period
2.5
-
Deferred tax liability
Balance at beginning of the period
8.4
-
Debit (credit) registered in Equity (see note 8.3)
(8.4)
8.4
Balance at the end of the period
-
8.4
The increase in deferred tax assets corresponds to the tax losses generated during the FY 2020.
ThedeferredtaxliabilitiesimputedinEquityin2019correspondstothetaximpactofthefairvaluationof assets held for sale that was reverted in December 2020 (see note 6).
The reconciliation between the consolidated tax base and the individual tax base of the subsidiaries of the tax group is detailed below:
31 December 2020
31 December 2019
Tax base AmRest Holdings
(10.1)
(8.7)
Tax base contributed by subsidiaries of the tax group:
(18.1)
36.5
AmRest TAG, S.L.U.
(3.1)
(1.3)
Restauravia Food, S.L.U.
(8.2)
4.1
Pastificio Service, S.L.U.
(2.1)
37.1
The Grill Concept, S.L.U.
(2.0)
(2.4)
Black Rice, S.L.U.
(1.2)
(0.6)
Bacoa Holding, S.L.U.
(0.7)
(1.1)
Shushi Shop Madrid, S.L.U.
(1.0)
0.7
Current income tax of the consolidated tax group (25%)
-
7.0
Withholding taxes and CIT advances
0.4
8.4
Subtotal
(0.4)
(1.5)
Reversal of excess of accrual
-
0.5
Income tax receivable from 2019
(1.0)
-
Income tax receivable payable (receivable)
(1.4)
(1.0)
AmRestHoldingsSEhasthefollowingbalancesrelatedtocurrentaccountswithgroupentitiesresultedfrom the Consolidated tax regimen:
31 December 2020
31 December 2019
Receivables:
Restauravia Food. S.L.U.
1.0
1.0
Pastificio Service. S.L.U.
-
1.0
(all figures in EUR millions unless statedotherwise)
41
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
AmRest TAG S.L.U.
0.1
0.1
Total receivables from the Consolidated tax regime
1.1
2.1
Payables
The Grill Concept S.L.U.
(1.0)
(1.0)
Black Rice S.L.
(0.2)
(0.2)
Shushi Shop Madrid. S.L.U.
-
(0.1)
Total payables from the Consolidated tax regime
(1.3)
(1.3)
12.1REVENUES
IntheitemRevenuesoftheseparateincomestatementfortheyearsendedon31December2020and2019 wererecognizedtheresultoftheexecutionofstockoptionplanforemployeesandtheinterestanddividends received from subsidiaries and the results from financial assets held for sale (see note 6.3):
Year ended
31 December 2020
31 December 2019
Dividends from Subsidiaries (see note 14)
7.6
3.1
Revenue from the stock option plan
0.2
7.6
Financial income from group companies
7.7
6.5
Results from financial assets held for sale
33.5
-
Total Revenues
49.0
17.2
Thedividendsreceivedduringtheannualperiodendedasat31December2020and2019correspondedto thesubsidiaryAmRests.r.o.(CzechRepublic).ThebreakdownofDividendsbygeographicalareaforthe annual periods ended at 31 December 2020 and 2019 is as follow:
Year ended
31 December 2020
31 December 2019
Exports:
7.6
3.1
a) European Union
7.6
3.1
Total Dividends received from Subsidiaries
7.6
3.1
Revenuesfromstockoptionplancorrespondtothedifferencebetweenthevaluationofthestockoptions andthebookvalueoftheownsharesexecutedforthestockoptionplanthebreakdownofrevenuesfrom thestockoptionplanfortheemployeesbygeographicalareafortheannualperiodsendedasat31December 20120 and 2019 is as follow:
Year ended
31 December 2020
31 December 2019
Domestic market
-
4.5
Exports:
0.2
3.1
a) European Union
0.2
1.1
b) O.E.C.D countries
-
1.7
c) Other countries
-
0.3
Net income from the stock option plan
0.2
7.6
Financialincomefromsubsidiariescorrespondtotheaccruedinterestoftheloansandotherfinancialassets givenfromtheCompanytothegroupcompaniesduringtheyear.Thebreakdownoffinanceincomefrom groupcompaniesbygeographicalareafortheannualperiodsendedasat31December2020and2019isas follow:
Year ended
31 December 2020
31 December 2019
Domestic market
2.5
2.4
(all figures in EUR millions unless statedotherwise)
42
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Exports:
5.2
4.1
a) European Union
4.4
3.5
b) Other countries
0.9
0.7
Finance income from group companies (see note 14)
7.7
6.5
12.2.PERSONNEL EXPENSES:
Thedetailofpersonnelexpensesfortheannualperiodsendedasat31December2020and2019isasfollow:
Year ended
31 December 2020
31 December 2019
Salaries and social charges
(1.1)
(1.0)
Stock option plan
(0.2)
-
Total other operating expenses
(1.3)
(1.0)
12.3.OTHER OPERATING EXPENSES
Year ended
31 December 2020
31 December 2019
Professional Services
(4.8)
(2.1)
Business travel
(0.1)
(0.3)
Other taxes
(1.1)
(0.3)
Other expenses
(0.4)
-
Total other operating expenses
(6.4)
(2.7)
12.4 INCOME AND EXPENSES IN FOREIGN CURRENCY
The income and expenses denominated in foreign currency for the annual periods ended at 31 December 2020 and 2019 are as follow:
PLN
USD
Expenses
-
-
Other operating expenses
(0.3)
-
Results from operating activities
(0.3)
-
Finance income
-
0.8
Finance expenses
(1.7)
-
Net finance income (expense)
(1.7)
0.8
Total Income and expenses in foreign currency
(2.0)
0.8
For the year ended 31 December 2019
PLN
USD
Revenues
-
-
Other operating expenses
(0.2)
(0.1)
Results from operating activities
(0.2)
(0.1)
Finance income
-
0.6
Finance expenses
(1.2)
-
Net finance income (expense)
(1.2)
0.6
Total Income and expenses in foreign currency
(1.4)
(0.5)
The financial result for the annual periods ended at 31 December 2020 and 2019 is as follows:
Year ended
Financial Expenses
31 December 2020
31 December 2019
With group companies (nota 14)
(0.8)
(0.7)
With third parties
(12.3)
(10.3)
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Year ended
Total Financial Expenses
(13.1)
(11.0)
Exchange rates differences
2.8
(0.5)
13.1 Exchange rates differences:
The breakdown of exchange losses and gains recognized in the income statement is follows:
Year ended
31 December 2020
31 December 2019
On Investments and loans with group companies
(1.3)
(0.4)
On Banks and other assets
(0.2)
(0.1)
On Financial liabilities
4.3
-
Total
2.8
0.5
As at 31 December 2020, the Group comprised the following subsidiaries:
Company name
Registered office
Parent/non-controlling undertaking
Owner-ship interest and total vote
Date of effective control
Holding activity
AmRest Acquisition Subsidiary Ltd.
Birkirkara, Malta
AmRest Holdings SE
100.00%
May 2007
AmRest TAG S.L.U.
Madrid, Spain
AmRest Sp. z o.o.
100.00%
March 2011
AmRest HK Ltd
Hong Kong, China
AmRest Holdings SE
100.00%
September 2011
AmRest China Group PTE Ltd
Singapore
AmRest Holdings SE
100.00%
December 2012
Bigsky Hospitality Group Ltd
Hong Kong, China
AmRest China Group PTE Ltd
100.00%
December 2012
New Precision Ltd
Mriehel, Malta
AmRest China Group PTE Ltd
100.00%
December 2012
Horizon Consultants Ltd.
Mriehel, Malta
AmRest China Group PTE Ltd
100.00%
December 2012
AmRest Kft
99.00%
AmRest Management Kft
Budapest, Hungary
AmRest TAG S.L.U.
1.00%
August 2018
GM Invest SRL
Brussels, Belgium
AmRest TAG S.L.U.
100.00%
October 2018
GM Invest SRL
9.47%
Sushi Shop Group SAS
Paris, France
AmRest TAG S.L.U.
90.53%
October 2018
AmRest France SAS
Paris, France
AmRest Holdings SE
100.00%
December 2018
Sushi Shop Management SAS
Paris, France
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Holding USA LLC9
Dover Kent, USA
Sushi Shop Management SAS
100.00%
October 2018
Sushi Shop Luxembourg SARL
Luxembourg
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Switzerland SA
Fribourg, Switzerland
Sushi Shop Management SAS
100.00%
October 2018
Restaurant, franchise and master-franchise activity
AmRest Sp. z o.o. 2
Wroclaw, Poland
AmRest Holdings SE
100.00%
December 2000
AmRest s.r.o.
Prague, Czechia
AmRest Holdings SE
100.00%
December 2000
AmRest Kft
Budapest, Hungary
AmRest Sp. z o.o.
100.00%
June 2006
AmRest Sp. z o.o.
82.00%
AmRest Coffee Sp. z o.o.
Wroclaw, Poland
StarbucksCoffee International,Inc.
18.00%
March 2007
AmRest EOOD
Sofia, Bulgaria
AmRest Holdings SE
100.00%
April 2007
AmRestAcquisitionSubsidiary Ltd.
44.72%
OOO AmRest
Saint Petersburg, Russia
AmRest Sp. z o.o.
55.28%
July 2007
AmRest Sp. z o.o.
82.00%
AmRest Coffee s.r.o.
Prague, Czechia
StarbucksCoffee International,Inc.
18.00%
August 2007
AmRest Sp. z o.o.
82.00%
AmRest Kávézó Kft
Budapest, Hungary
StarbucksCoffee International,Inc.
18.00%
August 2007
AmRest Sp. z o.o.
60.00%
AmRest d.o.o.
Belgrade, Serbia
ProFood Invest GmbH
40.00%
October 2007
Restauravia Food S.L.U.
Madrid, Spain
AmRest TAG S.L.U.
100.00%
April 2011
Pastificio Service S.L.U.
Madrid, Spain
AmRest TAG S.L.U.
100.00%
April 2011
AmRest Adria d.o.o.
Zagreb, Croatia
AmRest Sp. z o.o.
100.00%
October 2011
AmRest GmbH i.L.1
Cologne, Germany
AmRest TAG S.L.U.
100.00%
March 2012
AmRest SAS.5
Paris, France
AmRest TAG S.L.U.
100.00%
April 2012
AmRest Adria 2 d.o.o.
Ljubljana, Slovenia
AmRest Sp. z o.o.
100.00%
August 2012
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Company name
Registered office
Parent/non-controlling undertaking
Owner-ship interest and total vote
Date of effective control
FrogKingFood&Beverage Management Ltd
Shanghai, China
Bigsky Hospitality Group Ltd
100.00%
December 2012
BlueFrogFood&Beverage Management Ltd
Shanghai, China
New Precision Ltd
100.00%
December 2012
ShanghaiKabbWestern Restaurant Ltd
Shanghai, China
Horizon Consultants Ltd.
100.00%
December 2012
AmRest Skyline GMBH
Cologne, Germany
AmRest TAG S.L.U.
100.00%
October 2013
KaiZhenFoodandBeverage Management (Shanghai) Ltd
Shanghai, China
BlueFrogFood&Beverage Management Ltd
100.00%
March 2014
AmRest Coffee EOOD
Sofia, Bulgaria
AmRest Sp. z o.o.
100.00%
June 2015
AmRest Coffee S.r.l.
Bucharest, Romania
AmRest Sp. z o.o.
100.00%
June 2015
AmRest Sp. z o.o.
99.00%
July 2019
AmRest Food Srl.
Bucharest, Romania
AmRest Holdings SE
1.00%
July 2019
AmRest s.r.o.
99.00%
AmRest Coffee SK s.r.o.
Bratislava, Slovakia
AmRest Sp. z o.o.
1.00%
December 2015
AmRest Coffee Deutschland
AmRest Kaffee Sp. z o.o.
23.00%
Sp. z o.o. & Co. KG
Munich, Germany
AmRest TAG S.L.U.
77.00%
May 2016
AmRest DE Sp. z o.o. & Co. KG
Berlin, Germany
AmRest Kaffee Sp. z o.o.
100.00%
December 2016
The Grill Concept S.L.U.
Madrid, Spain
Pastificio Service S.L.U.
100.00%
December 2016
KaiFuFoodandBeverage Management (Shanghai) Co. Ltd
Shanghai, China
BlueFrogFood&Beverage Management Ltd
100.00%
December 2016
LTP La Tagliatella Portugal, Lda
Lisbon, Portugal
AmRest TAG S.L.U.
100.00%
February 2017
LTPLaTagliatellaFranchiseII Portugal, Lda
Lisbon, Portugal
AmRest TAG S.L.U.
100.00%
April 2019
AmRest AT GmbH
Vienna, Austria
AmRest Sp. z o.o.
100.00%
March 2017
AmRest Topco France SAS
Paris, France
AmRest France SAS
100.00%
May 2017
AmRest Delco France SAS
Paris, France
AmRest Topco France SAS
100.00%
May 2017
AmRest Opco SAS
Paris, France
AmRest France SAS
100.00%
July 2017
OOO Chicken Yug
Saint Petersburg, Russia
OOO AmRest
100.00%
October 2017
AmRestAcquisitionSubsidiary Ltd.
99.999996%
OOO AmRest Pizza
Saint Petersburg, Russia
OOO AmRest
0.000004%
November 2017
AmRest Coffee SRB d.o.o.
Belgrade, Serbia
AmRest Holdings SE
100.00%
November 2017
AmRest Chamnord SAS
Paris, France
AmRest Opco SAS
100.00%
March 2018
AmRest s.r.o.
99.00%
AmRest SK s.r.o.
Bratislava, Slovakia
AmRest Sp. z o.o.
1.00%
April 2018
AmRest Pizza GmbH
Munich, Germany
AmRest DE Sp. z o.o. & Co. KG
100.00%
June 2018
Black Rice S.L.U.
Madrid, Spain
AmRest TAG S.L.U.
100.00%
July 2018
Bacoa Holding S.L.U.
Madrid, Spain
AmRest TAG S.L.U.
100.00%
July 2018
Sushi Shop Restauration SAS7
Paris, France
Sushi Shop Management SAS
100.00%
October 2018
Midicapital
14.00%
Sushi House SA
Luxembourg
Sushi Shop Luxembourg SARL
86.00%
October 2018
Sushi Shop London Pvt LTD
London, UK
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Belgique SA4
Bruxelles, Belgium
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Belgique SA
54.80%
Sushi Shop Louise SA
Bruxelles, Belgium
Midicapital
45.20%
October 2018
Sushi Shop UK Pvt LTD
Charing, UK
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Anvers SA6
Bruxelles, Belgium
Sushi Shop Belgique SA
100.00%
October 2018
Sushi Shop Geneve SA
Geneva, Switzerland
Sushi Shop Switzerland SA
100.00%
October 2018
Sushi Shop Lausanne SARL
Lasanne, Switzerland
Sushi Shop Switzerland SA
100.00%
October 2018
Sushi Shop Madrid S.L.
Madrid, Spain
Sushi Shop Management SAS
100.00%
October 2018
Sushi Shop Management SAS
70.00%
Sushi Shop Milan SARL
Milan, Italy
Vanray SRL
30.00%
October 2018
Sushi Shop NE USA LLC9
New York, USA
Sushi Shop Holding USA LLC
100.00%
October 2018
Sushi Shop Holding USA LLC
64.00%
Sushi Shop NY1 LLC9
New York, USA
Sushi Shop NE USA LLC
36.00%
October 2018
Sushi Shop NY2 LLC9
New York, USA
Sushi Shop Holding USA LLC
100.00%
October 2018
Sushi Shop Zurich GMBH
Zurich, Switzerland
Sushi Shop Switzerland SA
100.00%
October 2018
Sushi Shop Nyon SARL
Nyon, Switzerland
Sushi Shop Switzerland SA
100.00%
October 2018
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Company name
Registered office
Parent/non-controlling undertaking
Owner-ship interest and total vote
Date of effective control
Sushi Shop NL B.V. 8
Amsterdam, Netherlands
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Vevey SARL
Vevey, Switzerland
Sushi Shop Switzerland SA
100.00%
November 2019
Sushi Shop Fribourg SARL
Fribourg, Switzerland
Sushi Shop Switzerland SA
100.00%
November 2019
Sushi Shop Yverdon SARL
Yverdon, Switzerland
Sushi Shop Switzerland SA
100.00%
Novemner 2019
Financial services and others for the Group
AmRest LLC
Wilmington, USA
AmRest Sp. z o.o.
100.00%
July 2008
AmRest Work Sp. z o.o.
Wroclaw, Poland
AmRest Sp. z o.o.
100.00%
March 2012
La Tagliatella International Kft
Budapest, Hungary
AmRest TAG S.L.U.
100.00%
November 2012
La Tagliatella SAS5
Paris, France
AmRest TAG S.L.U.
100.00%
March 2014
AmRest FSVC LLC
Wilmington, USA
AmRest Holdings SE
100.00%
November 2014
AmRest Kaffee Sp. z o.o.
Wroclaw, Poland
AmRest Sp. z o.o.
100.00%
March 2016
AmRest Estate SAS
Paris, France
AmRest Opco SAS
100.00%
September 2017
AmRest Leasing SAS
Paris, France
AmRest Opco SAS
100.00%
September 2017
AmRest Franchise Sp. z o.o.
Wrocław, Poland
AmRest Sp. z o.o.
100.00%
December 2018
AmRest Global S.L.U. 3
Madrid, Spain
AmRest Holdings SE
100.00%
September 2020
Supply services for restaurants operated by the Group
SCM Sp. z o.o.
90.00%
SCM Czech s.r.o.
Prague, Czechia
Ondrej Razga
10.00%
March 2007
AmRest Sp. z o.o.
51.00%
R&D Sp. z o.o.
33.80%
Beata Szafarczyk-Cylny
5.00%
SCM Sp. z o.o.
Warsaw, Poland
Zbigniew Cylny
10.20%
October 2008
1On25November2016Amrestavia,S.L.U.,thesoleshareholderofAmRestGmbH,decidedtoliquidatethiscompany.The liquidation process has not been finished up until the date of this Report.
2On30June2020newcompanywasregistered-AmRestTrauguttaSp.zo.o.withregisteredofficeWroclaw,Poland.AmRest Sp.zo.o.owned99,9999%ofshares,0,0001%ofsharesownedMichalLewandowski.Asof30September2020AmRestSp.zo.o. owned 100% of shares. On 21 December 2020 AmRest Traugutta Sp. z o.o. was merged with AmRest Sp. z o.o.
3On2September2020newcompanywasregistered-AmRestGlobalS.L.U.withregisteredofficeinMadrid,Spain(100%subsidiary of AmRest Holdings, SE).
4On30September2020(withtheeffectivedateasof1January2020)followingentitiesweremergedintoSushiShopBelgiqueSA: SSW1SPRL,SSW2SPRL,SushiSablonSA,SushiUccleSAandSushiShopInternationalSA.Onmentioneddateallassetsofmerged companies have been taken by Sushi Shop Belgique SA.
5 On 1 October AmRest SAS and La Tagliatella SAS changed the registered office from Lyon, France to Paris, France.
6On1October2020SushiShopBelgiqueSA,thesoleshareholderofSushiShopAnversSA,decidedtoliquidatethiscompany. The liquidation process has not been finished up until the date of this Report.
7On30November2020(withtheeffectivedateasof1January2020)CMLCTroyesandOrphusSARLweremergedintoSushiShop Restauration SAS.
8On1October2020SushiShopGroupSAS,thesoleshareholderofSushiShopNLB.V.,decidedtoliquidatethiscompany.The liquidation process has not been finished up until the date of this Report.
9On16December2020SushiShopManagementSAS,thesoleshareholderofSushiShopHoldingUSALLC,SushiShopNEUSALLC, SushiShopNY1LLC,andSushiShopNY2LLCdecidedtoliquidatethesecompanies.Theliquidationprocesshasnotbeenfinished up until the date of this Report..
•On 2 January 2020 the company La Tagliatella Financing Kft has been deregistered.
•On 27 March 2020 the company OOO RusCo Food has been deregistered.
•On 12 June 2020 the company AmRest Trademark Kft "v.a." (Hungary) has been deregistered.
31 December 2020
31 December 2019
Assets
Total loans granted to group companies
302.7
248.8
(Long and short term classification)
Long term loans granted to group companies (note 6.3)
256.9
228.2
Short term loans granted to group companies (note 6.3)
45.8
20.6
(Group entity classification)
AmRest TopCo
8.2
8.5
AmRest Opco SAS
35.9
33.5
Amrest China group LTD
7.0
7.3
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
AmRest Coffee Deutschland Sp. z o.o.
37.2
9.7
AmRest DE Sp. z o.o. & Co. KG
42.8
29.5
AmRest AT GmbH
3.9
3.9
AmRest Kaffee Sp. z o.o.
35.1
38.5
AmRest TAG S.L.U.
70.3
68.7
Blue Frog Food & Beverage Management
6.9
4.5
Pastificio Service. S.L.U.
27.1
26.9
Restauravia Food. S.L.U.
11.2
11.1
AmRest Adria d.o.o.
1.2
0.8
AmRest Pizza GmbH
1.9
1.4
AmRest SK s.r.o.
1.6
1.2
OOO AmRest
0.7
1.8
Sushi Shop SAS
2.5
1.5
Amrest Food SRL
1.5
-
AmRest sp.zoo
7.1
-
AmRest Coffee SK Sro
0.6
-
Other financial assets with group companies(see note 6.3)
3.4
2.7
Restauravia Food. S.L.U.
1.0
1.0
Pastificio Service S.L.U.
-
1.0
AmRestavia S.L.U.
-
0.6
AmRest TAG S.L.U.
0.2
0.1
AmRest S.R. O
2.2
-
Trade and other receivables with group companies (see note 6.4)
1.2
1.1
AmRest Sp. z o.o.
0.8
0.6
Restauravia Food. S.L.U.
-
0.1
OOO AmRest
-
0.2
AmRestag S.L
0.2
-
AmRest Kft
-
0.1
AmRest SRO
0.1
0.0
Pastificio Service S.L.U.
0.1
0.1
Short term debt and other current financial liabilities(see note 6.5)
1.8
1.7
Pastificio Service S.L.
0.5
-
The Grill Concept S.L.U.
1.0
1.0
AmRest TAG S.L.U.
-
0.5
Bacoa Black Rice S.L.
0.2
0.1
Sushi Shop SAS
0.1
0.1
Trade payables with group companies(see note 6.6)
1.8
1.7
Pastificio Service
0.1
-
AmRest Sp. z o.o.
0.3
0.2
AmRest kft
0.1
-
AmRest TAG S.L.U.
1.2
1.1
OOO AmRest
0.1
-
Other related parties
-
0.4
(all figures in EUR millions unless statedotherwise)
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AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
The transactions with group entities are as follows:
Year ended
31 December 2020
31 December 2019
Revenues
Revenues from dividends (note 12.1)
7.6
3.1
AmRest SRO
7.6
3.1
Financial Income from group companies (see note 12.1)
7.7
6.5
AmRest Sp. z o.o.
0.2
0.2
AmRest HK Ltd.
0.1
0.1
AmRest China Group PTE Ltd.
0.4
0.3
AmRest Coffee Deutschland
0.4
0.1
AmRest Topco France
0.2
0.2
AmRest Opco SAS
1.0
0.8
AmRest DE Sp. z o.o. & Co. KG
1.1
0.7
AmRest Kaffee Sp. z o.o.
1.1
1.1
AmRest TAG S.L.U.
1.6
1.5
Pastificio Service S.L.U.
0.6
0.6
Restauravia Food S.L.U.
0.3
0.3
AmRest AT GmbH
0.1
0.1
Blue Frog Food & Beverage Management
0.4
0.2
AmRest Capital Zrt
-
0.1
Sushi Shop SAS
0.1
-
Other group companies
0.1
0.2
Expenses
Financial expenses with group companies(see note 13)
(0.8)
0.7
AmRest Sp. z o.o.
(0.3)
(0.3)
Pastificio Service S.L.U.
(0.1)
(0.1)
AmRest SRO
(0.1)
(0.1)
AmRest TAG S.L.U.
(0.1)
(0.1)
OOO AmRest
(0.1)
(0.1)
Other group companies
(0.1)
-
Impairment of financial instruments with group companies
(see note 6.1)
0.8
(5.3)
AmRest EOOD (Bulgaria)
0.6
-
AmRest FSV LLC
0.2
(5.3)
Exchange rates differences
(1.3)
(0.4)
AmRest China Group PTE Ltd.
(0.6)
(0.2)
Blue Frog Food & Beverage Management
(0.7)
(0.2)
(all figures in EUR millions unless statedotherwise)
48
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
15. Remuneration of the board of directors and senior executives
(a)BelowaredescribedtheremunerationsoftheboardofDirectorsandManagementBoard(Senior Executives) following the regulations of the CNMV Circular 5/2015 from 28 October:
TheremunerationofBoardofDirectorspaidbyAmRestHoldingsSEforalltheretributionconceptsisthe following:
Year ended
Board of Directors Remunerations
Fixed Remuneration
0.4
0.6
Operations with shares and/or other financial instruments
-
15.5
Total Board of Director remunerations
0.4
16.1
TheremunerationoftheBoardofDirectorspaidbyothersubsidiariesofthegroupforalltheretribution concepts are as follows:
Year ended
Board of Directors Remunerations
31 December 2020
31 December 2019
Salaries
-
0.1
Variable Remuneration
-
0.1
Termination benefits
-
0.4
Total Board of Director remunerations
-
0.6
DirectorsRemunerationPolicywasapprovedatthegeneralshareholders’meetingheldon6June2018and willremaininforceuntil2021unlessthegeneralshareholders’meetingsoresolvestoamendorreplaceit. Accordingtothepolicy.Executivedirectorsmayreceiveadditionalremunerationforperformingexecutive functions.SinceNovember2020Mr.JoséParésistheonlyboardmemberwhoperformexecutivefunctions,noadditionalremunerationisforeseeninhisfavorforcarryingoutthesefunctions. In2019Mr.McGovern was the only executive director entitled to a variable cash remuneration.
Inaddition,healsoreceivedacashamountaftertheexerciseofhisshareoptionsgrantedundertheMIPand SOPprogramswhichweregrantedtohiminhiscapacityasfirstexecutiveoftheCompany,previoustoand independent from his status as Board member.
Year ended
Senior Executives
31 December 2020
31 December 2019
Remuneration received by the Senior Executives
0.8
0.7
Operations with shares and/or other financial instruments
0.5
7.8
Total remuneration received by the Senior Executives
1.3
8.5
The remuneration of the Senior Executives paid by other subsidiaries of the group is as follows:
Year ended
Senior Executives
31 December 2020
31 December 2019
Remuneration received by the Senior Executives
2.7
2.0
Total remuneration received by the Senior Executives
2.7
2.0
(b)Information about conflict of interest situations of the Board of Directors:
InthedutytoavoidsituationsofconflictwiththeinterestoftheCompany,duringtheyearthedirectorswho haveheldpositionsontheBoardofDirectorshavecompliedwiththeobligationssetforthinarticle228of theconsolidatedtextoftheCapitalCompaniesLaw,Likewise,boththeyandthepersonsrelatedtothem, haverefrainedfromincurringinthecasesofconflictofinterestforeseeninarticle229ofsaidlaw,exceptin the cases in which the corresponding authorization has been obtained.
(all figures in EUR millions unless statedotherwise)
49
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
(c)Transactionsotherthanordinarybusinessorundertermsdifferingfrommarketconditions carried out by the Board of Directors or Audit Committee:
In2020and2019themembersoftheBoardofDirectorsoftheCompanyoroftheAuditCommitteehavenot carriedoutanytransactionsotherthanordinarybusinesswiththeCompanyorappliedtermsthatdifferfrom market conditions.
16.1.Number of employees
The average number of employees distributed by categories. for the year 2020 and 2019 is a follow:
Year ended
Categories
31 December 2020
31 December 2019
Executive Managers
2
2
Managers and others
5
3
7
5
The number of employees distributed by gender, as at 31 December 2020 and 2019 is as follow:
Gender
31 December 2020
31 December 2019
Total
Males
Female
Total
Males
Female
Board Members
7
5
2
7
6
1
Executive Managers
2
2
-
2
2
-
Managers and others
5
3
2
4
2
3
14
10
4
13
10
4
There are no employees with a disability rating of 33% or higher.
16.2.Tax inspections
On22July2019,PastificioServiceServiceS.L.(asthetaxpayer),AmrestTagSL(asheadoftheTaxGroup 539/11duringthetaxauditperiod)andAmRestHoldings,SE(asthecurrentheadoftheTaxGroup539/11) werenotifiedoftheinitiationofataxaudit,regardingtocorporateincometax,forthefiscalyears2014to 2017.Thisisapartialtaxaudit,onlyreferredtotaxreliefappliedbyPastificioService,SLincorporateincome taxbasesof2014to2017,regardingthedeductionsrelatedtocertainintangibleassets(i.e.,patentbox regimen).
On17August2020,thementionedcompaniesreceivedthesettlementproposalfromthetaxauditors, including the regularization of the total amount of the tax relief applied during 2014 to 2017. This settlement proposal amounted to 1 million Euros.
On 14 September 2020, the companies submitted allegations before the Tax Auditors, being dismissed.
On10December2020theCompanieshavesignedtheNon-ConformityTaxAuditSettlementwithregardsto thesettlementproposaland,afterwards,onJanuary2021thecompaniessubmittedthecorresponding allegations before the Technical Office against the final settlement proposal.
Baseonindependentexpertsadvise,Directorsofthecompaniesconsidertheallegationssubmittedwill success.Therefore,thereisnotrecordedanyprovisiononthismatterontheFinancialStatementsasof December 2020.
(all figures in EUR millions unless statedotherwise)
50
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
16.3 Information about the environment
GiventheactivitytowhichtheCompanyisdedicated,ithasnoliabilities,expenses,assets,provisions,or environmentalcontingenciesthatcouldbesignificantinrelationtotheassets.financialsituationandresults of the same. For this reason. the specific disclosures of information are not included in this report.
16.4 Subsequent events
OnJanuary30,2021,RoyalDecree1/2021,ofJanuary12,waspublished,modifyingtheGeneralAccounting PlanapprovedbyRoyalDecree1514/2007,ofNovember16,theGeneralAccountingPlanofSmalland MediumEnterprisesapprovedbyRoyalDecree1515/2007,ofNovember16;theRulesfortheFormulationof ConsolidatedAnnualAccountsapprovedbyRoyalDecree1159/2010,ofSeptember17;andtherulesforthe AdaptationoftheGeneralAccountingPlantonon-profitentitiesapprovedbyRoyalDecree1491/2011,of October 24.
ThechangestotheGeneralAccountingPlanareapplicabletothefiscalyearsbeginningonJanuary1,2021 andfocusonthecriteriaforrecognition,valuationandbreakdownofincomefromthedeliveryofgoodsand services,financialinstruments,accountingofhedging,valuationofthestocksofrawmaterialsquotedbythe intermediaries that trade with them and in the definition of fair value.
Inthissense,theindividualannualaccountscorrespondingtothefirstyearbeginningonJanuary1,2021will bepresentedincludingcomparativeinformation,althoughthereisnoobligationtore-expressthe informationfromthepreviousyear.Thecomparativeinformationwillonlybedisplayedagainonthe assumptionthatallthecriteriaapprovedbytheRoyalDecreecanbeappliedwithoutincurringaretrospective bias, without prejudice to the exceptions established in the transitory provisions.
Theapplicationoftherule,ingeneral,isretroactive,althoughwithalternativepracticalsolutions.However, theapplicationofhedgeaccountingisprospective,thecriteriafortheclassificationoffinancialinstruments canbeappliedprospectivelyandthecriteriaforincomefromsalesandprovisionofservicescanbeapplied prospectively to contracts initiated on or after 1 January 2021.
TheDirectorsoftheCompanyarecarryingoutanevaluationoftheapplicabletransitionoptionsandthe accountingimpactsthatthesemodificationswillentail,althoughatthedateofpreparationoftheseindividual annual accounts they do not yet have sufficient information to conclude on the results of this analysis.
Thefeesaccruedduringtheyearended31December2020and2019byKPMGAuditores.S.L.wereasfollows:
Year ended
In thousands of Euros
31 December 2020
31 December 2019
Audit fees Service
Audit
30.0
30.0
Total audit fees
30.0
30.0
KPMG Auditores, S.L. has not provided any additional services different to audit during 2020 and 2019.
51
AmRest Holdings SE
Annual Accounts and Directors’ Report
for the year ended 31 December 2020
José Parés Gutiérrez
Chairman of the Board
Luis Miguel Álvarez PérezVice-Chairman of the Board
Carlos Fernández GonzálezMember of the Board
Romana Sadurska
Member of the Board
Pablo Castilla ReparazMember of the Board
Mónica Cueva Díaz
Member of the Board
Emilio Fullaondo Botella
Member of the Board
Madrid,28February2018
1
AmRest Holdings SE
Annual Accounts and Directors’ Report
for the year ended 31 December 2020
(all figures in EUR millions unless statedotherwise)
2
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
1. Financial highlights
year ended
31 December 2020
year ended
31 December 2019
3 months ender on
December 31 2020
3 months ender on December 31 2019
Revenues
49.0
17.2
37.8
2.6
Results from operating activities
42.1
35.1
36.0
29.5
Financial Cost
(10.3)
(11.5)
(1.6)
(5.6)
Income tax expense
2.5
2.2
1.6
1.3
Profit/(loss) for the period
34.3
25.8
32.5
25.2
31 December 2020
31 December 2019
Total Assets
777.6
747.1
Total liabilities and provisions
459.7
441.4
Non-current liabilities
399.9
403.7
Current liabilities
34.7
37.7
Share capital
22
22.0
Satisfaction of all conditions envisaged by the agreement concluded with Glovoapp23 S.L.
On13August2019theGrouphassignedtheagreementwithGlovoapp23,S.L.(“Glovo”)forthetransferfrom AmResttoGlovoof100%sharesinRestaurantPartnerPolskaSp.zo.o.(“PizzaPortal”)(further:the “Agreement”).Asat30September2019,RestaurantPartnerPolskaSp.zo.o.wasclassifiedasadisposalgroup heldforsale.On28October,duetosatisfactionofconditionsprecedent,AmResttransferred100%ofshares in PizzaPortal to Glovo.
On24January2020theCompanyannouncedsatisfactionofallconditionsenvisagedbytheAgreementand finalsettlementofthetransaction.Inconsiderationforthetransferof100%ofsharesinRestaurantPartner PolskaSp.zo.o.AmRestreceivedtotaltransactionpriceintheamountofEUR35million,asacombinationof cashpaymentofEUR20millionandnewlyissuedsharesofGlovo,whichconstitutedfinalsettlementofthe Agreement.
As a result of the abovementioned transaction AmRest held 7.5% stake in Glovo’s share capital (non-diluted).
Update on business situation
On9July2020AmRestreleasedtheupdateonbusinesssituation.Followingtheliftingorlooseningof restrictionsontheopeningofrestaurantscausedbytheCOVID-19pandemic,inthefirsthalfofJulyAmRest maintained open 94% of the Group's total number of restaurants.
Outofthe26marketsinwhichtheGroupoperates,openingshadbeenfullyrestoredinalmostallofthem, with the exception of Russia where the percentage of open stores was slightly below 80%.
TheAmRestGrouphadimplementedthestrictestmeasuresinitsrestaurantstoguaranteethesafetyof customers and employees at all times.
Agreement with Delivery Hero
On19October2020AmRestreportedthatithadreachedanagreementwithDeliveryHeroforthetransfer ofits7.5%stake(non-diluted)inthecompanyGlovoapp23,SL(“Glovo”)foranaggregateamountofEUR76.2 million.
MentionedsalehadnofinancialimpactforAmRestsincetheinvestmentinGlovohasabookvalueofEUR 76.2 million.
Thedealwassubjecttothefulfillmentofcertainconditionsprecedentstandardforthistypeofdealsand completion of the corresponding corporate requirements in accordance with Glovo’s internal regulations.
(all figures in EUR millions unless statedotherwise)
3
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
ThetransactionprovidedasolidreturnastheGroupmadeitsfirstinvestmentinGlovoinJuly2018andpaid EUR25.0millionfora10%stake.ItwasfollowedbyasaleofPizzaPortaltoGlovoinOctober2019,which AmRestboughtforanaggregateamountofca.EUR10.0million,forthetotalamountofEUR35.0millionof which EUR 15.0 million was received in Glovo’s shares.
On31December2020AmRestinformedthat,oncethecorrespondingcorporaterequirementshavebeen metinaccordancewiththeinternalregulationsofGlovo,thetransferofAmRest’sstakeinGlovoapp23,SL, whichamountedto7.5%ofGlovo’sexistingsharecapital,hasbeenclosedforacombinedtotalconsideration of EUR 76.15 million.
Shareholder
Number of shares and votes at the Shareholders’ meeting
% of shares and votes at the Shareholders’ meeting
FCapital Dutch B. V.*
147 203 760
67.05%
Nationale-Nederlanden OFE
9 358 214
4.26%
Artal International S.C.A.
11 366 102
5.18%
Aviva OFE
6 843 700
3.12%
Other Shareholders
44 782 407
20.40%
*FCapitalDutchB.V.isthesoleshareholderofFCapitalLux(holdingdirectly56509547AmRestshares)andthe subsidiaryofFinaccessCapital,S.A.deC.V.GrupoFinaccessSAPIdeCVisthedirectmajorityshareholderofFinaccess Capital,S.A.deC.V.andasubsidiaryofGrupoFar-Luca,S.A.deC.V.ThedirectmajorityshareholderofGrupoFar-Luca, S.A. de C.V., Mr. Carlos Fernández González, is a member of AmRest’s Board of Directors.
On9July,2020AmRestreportedthatithadobtainedthewaiverfromitsfinancingbankstocomplywith certainfinancialcovenantasof31March,2020,asanticipatedintheinterimmanagementreportforthefirst quarterof2020.AmRestispunctuallymeetingitsfinancialpaymentobligationsvis-à-visitsfinancingbanks, withwhomAmRestkeepsworkingcloselytoadaptthefinancialcommitmentstothesituationcausedbythe COVID-19.
On1September2020theGrouphasreceivedanotherwaiverletterfromthebanks.Therequirementofthe bank covenant for the quarter ending 30 June 2020 has been waived.
Likewise,on30September2020AmResthadalsoobtainedalreadyfromsaidfinancingbanksawaiverforthe fulfillmentofcertainfinancialcommitments(covenants)linkedtotheGroup’sleverageforthethirdquarter of2020.Consequently,thelong-termdebtattheendofthethirdquarterhadbeenclassifiedasnon-current liabilities.
On7October2020AmRestreportedthat,intimelycompliancewithitsfinancialpaymentobligationsand followingthecorrespondingmaturitycalendar,theCompanyhadpartiallyrepaidthesyndicatedloanithas with its financing banks through the repayment in September 2020 of the amount of EUR 56.8 million.
On31December2020AmRestinformedthatithadobtainedrespectivelyfromitsfinancingbanksandits bondholders(Schuldschein)waiverstothecompliancewithcertaincovenantsrelatedtotheGroup’sleverage andinterestcoverageratiosforthe(fourthquarterof2020andthefirst,secondandthirdquartersof2021). Duringsaidperiods,thosecovenantswillbereplacedbyacommitmenttomaintainaminimumlevelof liquidity.
The waiver obtained from the bondholders was approved by a majority of 77% (above the required 70%).
TherequiredminimumlevelofliquidityofthenewcovenantassumedbytheGrouphadbeendeterminedat 80 million euros and lowered to 50 million euros for the third and fourth quarters of 2021.
(all figures in EUR millions unless statedotherwise)
4
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
5. Information on dividends paid
Dividends have not been distributed during the 12 months ended 31 December 2020.
On1July2020AmRestinformedoftheresignationpresentedbythedirectorMr.MustafaOgreticiandthe appointmentbyco-optiontofillsaidvacancyofMs.MónicaCuevaDíaz,asanindependentdirector,approved onthesamedaybytheBoardofDirectors,followingaproposalfromtheAppointmentsandRemunerations CommitteeandareportfromtheBoard.Ms.MónicaCuevaDíazalsoheldthepositionsofmemberofthe AuditCommitteeandtheHealthandSafetyCommittee;thelatterofwhichstartedtobechairedbyMs. Romana Sadurska.
Inaccordancewiththeprovisionsofarticle244oftheCapitalCompaniesLaw,saidappointmentissubjectto ratification by the next General Shareholders’ Meeting.
On1December2020AmRestinformedthattheBoardofDirectorsoftheCompany,followingthe recommendationoftheAppointmentsandRemunerationCommittee,hasresolvedtoappointMr.JoséParés Gutiérrez,pastChairmanoftheBoardofDirectorsandofitsExecutiveCommittee,asnewExecutiveChairman of the AmRest Group.
TheExecutiveChairmanwasdelegatedallthepowersthatcorrespondtotheBoardofDirectorsexceptthose thatarenon-delegablebyvirtueofthecurrentlegislation,theBylawsandtheRegulationsoftheBoardof Directors of AmRest.
As at 31 December 2020 the composition of the Board of Directors was as follows:
■
Mr. José Parés Gutiérrez■
Mr. Carlos Fernández González■
Mr. Luis Miguel Álvarez Pérez■
Mr. Emilio Fullaondo Botella■
Ms. Romana Sadurska■
Mr. Pablo Castilla Reparaz■
Ms. Mónica Cueva Díaz■
Eduardo Rodríguez-Rovira Rodríguez (Secretary, non-Board member)■
Jaime Tarrero Martos (Deputy Secretary, non-Board member)As at the day of publication of this Report the composition of the Board of Directors has not changed.
Duringtheyear2020thefollowingchangesoccurredwithrespecttoAmRestsharesandstockoptionsheld by the members of the Board of Directors of AmRest.
Asat31December2019Mr.CarlosFernándezGonzález(memberoftheCompany’sBoardofDirectors)held throughitscloselyassociatedperson,FCapitalDutchB.V.,147203760sharesoftheCompanywithatotal nominalvalueofEUR14720376.On31December2020,Mr.CarlosFernándezGonzálezstillheld147203 760 AmRest’s shares with a total nominal value of EUR 14 720 376 through FCapital Dutch B.V.
Asat31December2019Mr.CarlosFernándezGonzálezdidn’townAmRestsharesthroughanyotherclosely associated person.
Asat31December2020heheldthroughhisanothercloselyassociatedperson-FinaccessMéxico,S.A.de C.V.,SociedadOperadoradeFondosdeInversión,1172 145AmRestshareswithatotalnominalvalueofEUR 117214.5.ThedirectholderofthesharesisLatin10,SAdeCV,afundindependentlymanagedbyFinaccess Mexico, S.A. de C.V. (a subsidiary of Grupo Finaccess).
(all figures in EUR millions unless statedotherwise)
5
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
8. Transactions on own shares concluded by AmRest
ThecommencementofthepurchaseoftreasurysharesoccurredonthebasisofResolutionNo.7ofthe GeneralMeetingoftheCompanyof19May2015concerningtheauthorizationfortheManagementBoardto acquiretreasurysharesintheCompanyandtheestablishmentofreservecapitaland(replacingit)Resolution No.9oftheGeneralMeetingoftheCompanyof6June2018concerningtheauthorizationtotheBoardof DirectorsforthederivativeacquisitionoftheCompany’sownsharesmadedirectlybytheCompanyor indirectly through its subsidiaries as well as for the sale of the own shares.
TheCompanywasacquiringtheownsharesforthepurposesofexecutionofstockoptionprograms: Employee Stock Option Plan and Management Incentive Plan.
Intheperiodbetween1January2020and31December2020,AmRestdidn’tpurchaseanyownshares.During thesameperiod,theCompanydisposedatotalof100954ownshareswithatotalnominalvalueofEUR10 095.4andrepresenting0.0460%ofthesharecapitaltoentitledparticipantsofthestockoptionsplans. Disposaltransactionsundertheseplanswereexecutedinthreesettlementmethods,whichimpactedthesale price.Majorpartoftheshareswastransferredtotheparticipantsfreeofcharge.Asat31December2020 AmRestheld623461ownshareswithatotalnominalvalueofEUR62346.1andrepresenting0.2840%ofthe share capital.
The subsidiaries of AmRest Holdings SE do not hold any Company’s shares.
TheBoardofDirectorsofAmRestisresponsiblefortheriskmanagementsystemandtheinternalcontrolsystem aswellasforreviewingthesesystemsforoperatingefficiency.Thesesystemshelptoidentifyandmanagerisks whichmaypreventtheexecutionofthelong-termobjectivesofAmRest.However,havingthesesystemsinplace doesnotensurecompleteeliminationoftheriskoffraudandviolationofthelaw.TheBoardofDirectorsof AmRestispermanentlyanalyzingandreviewingriskstowhichtheGroupisexposed.Themaincurrentrisksand threatshavebeensummarizedinthissection.AmRestreviewsandimprovesitsriskmanagementandinternal control systems on an on-going basis.
TheGroupisexposedtotheliquidityriskduetothebreachofcovenantsandreclassificationoflong-termdebt toshort-termwhichcanbethereforedueinthenext12months,however,priorto2020yearendAmResthas obtainedfromitsfinancingbanksandmajorityofbondholders(Schuldschein)waiverstothecompliancewith certaincovenantsrelatedtotheGroup’sleverageandinterestcoverageratiosforfourthquarterof2020and the first, second and third quarters of 2021).
AmResthasestablishedinternaltaskforcesineverymarkettomonitorthesituationalsoaroundcostsaving initiativesandalsoabigpartofcapitalexpenditureshasbeenputunderreview.TheGroupwasandisclosely monitoringavailableprogramthatareofferedonvariousmarkets.Thegovernmentsupportprogramsinclude forexampledirectsubsidiestopayrollcosts,taxexemptions,socialsecuritycontributionsreductions. Additionally, entities from the Group were able to apply for extended deadlines for payments of various taxes.
TheGroupanalyzesliquidityneedswithparticularfocusonmaturityofdebtandproactivelyinvestigatesvarious forms of financing that could be utilized if needed.
Risk related to the COVID-19 and its implications for the economy and society
TheCOVID-19pandemichasrapidlyspreadaroundtheworld.Mostgovernmentsaretakingconstrainmeasures tocontainthespread,whichincludeisolation,confinement,quarantineandrestrictionstofreemovementof people and closure of public and private facilities.
This situation is affecting significantly the global economy, including HORECA sector, as well as AmRest Group.
VisibleresultsoftheCOVID-19outbreakincludethedecreaseindemand,thedisruptionorslowdownofsupply chainsandasignificantincreaseineconomicuncertainty,increaseofvolatilityinthepriceofassets,exchange ratesandadecreaseinlongterminterestrates.PossibleresultsoftheCOVID-19outbreakmayincludechanges in the market environment, people’s behaviors and ways of living.
(all figures in EUR millions unless statedotherwise)
6
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
TheCOVID-19pandemichasaparticularlynegativeimpactontherestaurantssectors.Thebanorsignificant limitationsinoperationofrestaurantsresultedinadecreaseinbusinessactivityandcustomerdemandand consequently decrease of revenues.
Groupmanagementiscloselymonitoringthedevelopmentofsituationandlooksforthewaysofmitigatingthe impact of COVID-19 spread on the Group.
Risk related to keeping key personnel in the Group
TheIssuer’ssuccessdependstosomeextentontheindividualeffortofselectedemployeesandkeymembers ofmanagement.ThemethodsofremuneratingandmanaginghumanresourcesdevelopedbytheIssuerhelp ensurealowrotationofthekeypersonnel.Additionally,thecareerplanningsystemsupportspreparing successorsreadytoexecutetasksinkeypositions.TheIssuerbelievesitwillbeabletoreplaceitskeypersonnel. Regardlessofthat,theirlossmayhaveashort-termadverseeffectonthebusinessactivitiesandoperating results of the Issuer.
TheresultsofAmRestareexposedtocurrencyriskrelatedtotransactionsandtranslationsintocurrenciesother thanthecurrencyinwhichbusinesstransactionsaremeasuredintheindividualCapitalGroupcompanies.The Groupadjustsitscurrencyportfolioofdebttothegeographicalstructureofitsprofileofactivities.Additionally, AmRest uses forward contracts to secure transaction risks on a short term basis.
Risk of increased financial costs
TheIssueranditssubsidiariesareexposedtoacertainextenttoadverseimpactofinterestratefluctuationsin connectionwithobtainingfinancingwhichbearsfloatinginterestratesandinvestinginassetsbearingfloating interestrates.Theinterestratesofbankloansandborrowingsandissuedbondsarebasedonacombinationof fixedandfloatingreferencerateswhichareupdatedoverperiodsshorterthanoneyear.Additionally,theIssuer anditssubsidiariesmay,aspartoftheinterestratehedgingstrategy,enterintoderivativeandotherfinancial contracts the valuation of which is significantly affected by the level of reference rates.
Tax risk
Intheprocessofmanagingandmakingstrategicdecisions,whichcanaffectthetaxsettlements,AmRestis exposedtotaxrisk.Allirregularitiesoccurringintaxsettlementsincreaseoftheriskofdisputeinthecaseofa potentialtaxcontrol.Aspartoftheserisks’minimization,AmResttakescareofdeepeningtheknowledgeofits employeesintheareaoftaxriskmanagementandcompliancewithrespectivelegalrequirements.The Companyimplementsadequateprocedurestofacilitatetheidentificationandsubsequentreductionor elimination of risks in the area of tax settlements.
Moreover,inconnectionwithfrequentlegislativechanges,inconsistencyofregulations,aswellasdifferencesin interpretationoflegalregulations,AmRestusesprofessionaltaxadvisoryservicesandappliesforbinding interpretations of the tax law provisions.
Tax inspections
On22July2019,PastificioServiceServiceS.L.(asthetaxpayer),AmrestTagSL(asheadoftheTaxGroup 539/11duringthetaxauditperiod)andAmRestHoldings,SE(asthecurrentheadoftheTaxGroup539/11) werenotifiedoftheinitiationofataxaudit,regardingtocorporateincometax,forthefiscalyears2014to 2017.Thisisapartialtaxaudit,onlyreferredtotaxreliefappliedbyPastificioService,SLincorporateincome taxbasesof2014to2017,regardingthedeductionsrelatedtocertainintangibleassets(i.e.,patentbox regimen).
On17August2020,thementionedcompaniesreceivedthesettlementproposalfromthetaxauditors, including the regularization of the total amount of the tax relief applied during 2014 to 2017. This settlement proposal amounted to 1 million Euros.
On 14 September 2020, the companies submitted allegations before the Tax Auditors, being dismissed.
Cyberattack risk
(all figures in EUR millions unless statedotherwise)
7
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
Group’soperationsaresupportedbywidevarietyofITsystems,includingpoint-of-salesystems,electronic orderingplatforms,supply-chainmanagementsystemsandfinanceandcontrollingtools.Consequently,the Groupisexposedtotheriskoftemporaryoperationaldisruption,dataintegrityriskand/orunauthorizedaccess toconfidentialdata,whichmaybearesultofbothintentionalcyberattackoranunintentionalevent.Inorderto mitigatetheserisks,theGroupestablishedspecializedIT-securityunitandimplementedappropriate cybersecurityriskmitigationtools,includingsecuritypolices,personneltrainingandtechnicalprevention countermeasures.
The average number of employees distributed by categories. for the year 2020 and 2019 is a follow:
Year ended
Categories
31 December 2020
31 December 2019
Executive Managers
2
2
Managers and others
5
3
7
5
The number of employees distributed by gender, as at 31 December 2020 and 2019 is as follow:
Gender
31 December 2020
31 December 2019
Total
Males
Female
Total
Males
Female
Board Members
7
5
2
7
6
1
Executive Managers
2
2
-
2
2
-
Managers and others
5
3
2
4
2
3
14
10
4
13
10
4
There are no employees with a disability rating of 33% or higher.
During the year ended on 31 December 2019, the average payment period was 63 days.
OnJanuary30,2021,RoyalDecree1/2021,ofJanuary12,waspublished,modifyingtheGeneralAccounting PlanapprovedbyRoyalDecree1514/2007,ofNovember16,theGeneralAccountingPlanofSmalland MediumEnterprisesapprovedbyRoyalDecree1515/2007,ofNovember16;theRulesfortheFormulationof ConsolidatedAnnualAccountsapprovedbyRoyalDecree1159/2010,ofSeptember17;andtherulesforthe AdaptationoftheGeneralAccountingPlantonon-profitentitiesapprovedbyRoyalDecree1491/2011,of October 24.
ThechangestotheGeneralAccountingPlanareapplicabletothefiscalyearsbeginningonJanuary1,2021 andfocusonthecriteriaforrecognition,valuationandbreakdownofincomefromthedeliveryofgoodsand services,financialinstruments,accountingofhedging,valuationofthestocksofrawmaterialsquotedbythe intermediaries that trade with them and in the definition of fair value.
Inthissense,theindividualannualaccountscorrespondingtothefirstyearbeginningonJanuary1,2021will bepresentedincludingcomparativeinformation,althoughthereisnoobligationtore-expressthe informationfromthepreviousyear.Thecomparativeinformationwillonlybedisplayedagainonthe assumptionthatallthecriteriaapprovedbytheRoyalDecreecanbeappliedwithoutincurringaretrospective bias, without prejudice to the exceptions established in the transitory provisions.
Theapplicationoftherule,ingeneral,isretroactive,althoughwithalternativepracticalsolutions.However, theapplicationofhedgeaccountingisprospective,thecriteriafortheclassificationoffinancialinstruments
(all figures in EUR millions unless statedotherwise)
8
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
canbeappliedprospectivelyandthecriteriaforincomefromsalesandprovisionofservicescanbeapplied prospectively to contracts initiated on or after 1 January 2021.
TheDirectorsoftheCompanyarecarryingoutanevaluationoftheapplicabletransitionoptionsandthe accountingimpactsthatthesemodificationswillentail,althoughatthedateofpreparationoftheseindividual annual accounts they do not yet have sufficient information to conclude on the results of this analysis.
TheAnnualCorporateGovernanceReportisanintegralpartofthisManagementReportandispresentedin theconsolidatedmanagementreportforthe2020financialyearofAmRestHoldingsSEandsubsidiaries Reported to the CNMV.
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
José Parés Gutiérrez
Chairman of the Board
Luis Miguel Álvarez PérezVice-Chairman of the Board
Carlos Fernández GonzálezMember of the Board
Romana Sadurska
Member of the Board
Pablo Castilla ReparazMember of the Board
Mónica Cueva Díaz
Member of the Board
Emilio Fullaondo Botella
Member of the Board
Madrid,28February2018
AmRestHoldingsSEAnnualAccountsandDirectors’Reportfortheyearended31December2020
STATEMENT OF RESPONSIBILITY OF AMREST HOLDINGS, SE
ThemembersoftheBoardofDirectorsofAMRESTHOLDINGS,SE("AmRest"orthe"Company")onits meetingheldon24February2021,andaccordingtoarticle118ofthereinstatedtextoftheSpanishSecurities MarketsActapprovedbyRoyalLegislativeDecree4/2015of23Octoberaswellastoarticle8b)ofRoyal Decree1362/2007,of19October,declarethat,asfarastheyareaware,theindividualAnnualAccountsofthe Company,aswellastheconsolidatedoneswithitsdependentcompanies,correspondingtothefinancialyear ended31December2020,drawnupbytheBoardofDirectorsonthereferredmeetingof24February2021 andpreparedinaccordancewiththeapplicableaccountingprinciples,offeratrueandfairimageoftheequity, thefinancialsituationandtheresultsoftheCompanyandthecompanieswithintheconsolidationtakenasa whole,andthecomplementarymanagementreportsoftheindividualandconsolidatedAnnualAccounts includeanaccurateanalysisofthebusinessevolutionandresultsandofthepositionofAmRestandthe companieswithintheconsolidationtakenasawhole,togetherwiththemainrisksanduncertaintieswhich they face.
Madrid, on 24 February 2021