Consolidated Financial Statements
for the year ended 31 December 2021
AmRest Holdings SE capital group
28 FEBRUARY 2022
Consolidated income statement for the year ended 31 December 2021............................................................................................................................ 5
Consolidated statement of comprehensive income for the year ended 31 December 2021 ............................................................................................... 6
Consolidated statement of financial position at 31 December 2021 ................................................................................................................................... 7
Consolidated statement of cash flows for the year ended 31 December 2021 ................................................................................................................... 8
Consolidated statement of changes in equity for the year ended 31 December 2021 ......................................................................................................... 9
Notes to the Consolidated Financial Statements ............................................................................................................................................................. 10
1. General information on AmRest Group ............................................................................................................................................................ 10
2. Group Structure ............................................................................................................................................................................................... 13
3. Basis of preparation ......................................................................................................................................................................................... 14
4. Use of judgements and estimates .................................................................................................................................................................... 15
5. Segment reporting ........................................................................................................................................................................................... 17
6. Revenues ........................................................................................................................................................................................................ 19
7. Operating costs and losses .............................................................................................................................................................................. 19
8. Other operating income/expenses ................................................................................................................................................................... 20
9. Impairment losses ........................................................................................................................................................................................... 21
10. Finance income ............................................................................................................................................................................................... 21
11. Finance costs .................................................................................................................................................................................................. 22
12. Income taxes ................................................................................................................................................................................................... 22
13. Property, plant and equipment ......................................................................................................................................................................... 24
Contents
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
14. Leases ............................................................................................................................................................................................................ 25
15. Intang ble assets ............................................................................................................................................................................................. 27
16. Goodwill .......................................................................................................................................................................................................... 28
17. Impairment of non-current assets ..................................................................................................................................................................... 28
18. Other non-current assets ................................................................................................................................................................................. 32
19. Inventories....................................................................................................................................................................................................... 32
20. Trade and other receivables ............................................................................................................................................................................ 32
21. Other current assets ........................................................................................................................................................................................ 32
22. Cash and cash equivalents .............................................................................................................................................................................. 32
23. Equity .............................................................................................................................................................................................................. 33
24. Dividends paid and received ............................................................................................................................................................................ 37
25. Non-controlling interests .................................................................................................................................................................................. 38
26. Earnings per share .......................................................................................................................................................................................... 40
27. Borrowings ...................................................................................................................................................................................................... 40
28. Collateral on borrowings .................................................................................................................................................................................. 43
29. Employee benefits and share based payments ................................................................................................................................................ 43
30. Provisions........................................................................................................................................................................................................ 46
31. Tax risks and uncertain tax positions ............................................................................................................................................................... 47
32. Trade and other liabilities ................................................................................................................................................................................. 49
33. Future commitments and contingent liabilities .................................................................................................................................................. 49
34. Transactions with related entities ..................................................................................................................................................................... 50
35. Financial instruments ....................................................................................................................................................................................... 51
36. Audit fees ........................................................................................................................................................................................................ 54
37. Events after the reporting period ...................................................................................................................................................................... 54
38. Significant accounting policies ......................................................................................................................................................................... 54
a. Basis of consolidation ................................................................................................................................................................................. 54
b. Foreign currency ........................................................................................................................................................................................ 55
c. Non-current assets held for sale and discontinued operations ..................................................................................................................... 56
d. Revenues ................................................................................................................................................................................................... 56
e. Government grants ..................................................................................................................................................................................... 57
f. Income tax ................................................................................................................................................................................................. 57
g. Leases ....................................................................................................................................................................................................... 58
h. Property, plant and equipment .................................................................................................................................................................... 59
i. Franchise, license agreements and other fees ............................................................................................................................................ 59
j. Intang ble assets ........................................................................................................................................................................................ 59
k. Goodwill ..................................................................................................................................................................................................... 60
l. Impairment of non-financial assets.............................................................................................................................................................. 60
m. Investment properties ................................................................................................................................................................................. 61
n. Inventories ................................................................................................................................................................................................. 62
o. Cash and cash equivalents ......................................................................................................................................................................... 62
p. Financial assets.......................................................................................................................................................................................... 62
q. Financial liabilities ...................................................................................................................................................................................... 63
r. Derivative financial instruments and hedge accounting ............................................................................................................................... 63
s. Share based payments and employee benefits ........................................................................................................................................... 64
t. Provisions .................................................................................................................................................................................................. 65
u. Equity ......................................................................................................................................................................................................... 65
39. Changes in accounting policies, reclassification and restatement of comparatives summary ............................................................................ 66
40. Standards issued but not yet effective .............................................................................................................................................................. 66
Signatures of the Board of Directors .......................................................................................................................................................................... 68
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
5
Consolidated income statement for the year ended
31 December 2021
YEAR ENDED
Note
31 December 2021
31 December 2020
Continuing operations
Restaurant sales
Franchise and other sales
Total revenue
5,6
Restaurant expenses:
Food and merchandise
7
(503.3 )
(413.2 )
Payroll and other employee benefits
7
(459.9 )
(409.6 )
Royalties
7
(85.8 )
(67.9 )
Occupancy, depreciation and other operating expenses
7
(583.4 )
(517.0 )
Franchise and other expenses
7
(71.7 )
(54.6 )
Gross Profit
General and administrative expenses
7
(138.4 )
(143.4 )
Net impairment losses on financial assets
9
(0.9 )
(6.2 )
Net impairment losses on other assets
9
(18.2 )
(84.6 )
Other operating income/expenses
8
Profit/loss from operations
(142.5 )
Finance income
10
Finance costs
11
(48.0 )
(61.0 )
Profit/loss before tax
(201.4 )
Income tax expense
12
(22.5 )
Profit/loss for the period
(183.7 )
Attr butable to:
Shareholders of the parent
(182.0 )
Non-controlling interests
(1.7 )
Profit/loss for the period
(183.7 )
YEAR ENDED
31 December 2021
31 December 2020
Basic earnings per ordinary share in EUR
26
(0.83 )
Diluted earnings per ordinary share in EUR
26
(0.83 )
The above consolidated income statement should be read in conjunction with the accompanying notes.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
6
Consolidated statement of comprehensive income
for the year ended 31 December 2021
YEAR ENDED
Note
31 December 2021
31 December 2020
Profit/loss for the period
(183.7 )
Other comprehensive income/loss
23
Exchange differences on translation of foreign operations
(19.3 )
Net investment hedges
(1.6 )
(10.9 )
Income tax related to net investment hedges
Other comprehensive income/loss for the period
(28.4 )
Total comprehensive income/loss for the period
(212.1 )
Attr butable to:
Shareholders of the parent
(210.3 )
Non-controlling interests
(1.8 )
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
7
Consolidated statement of financial position
at 31 December 2021
Note
31 December 2021
31 December 2020
Assets
Property, plant and equipment
13
Right-of-use assets
14
Goodwill
16
Intangible assets
15
Investment properties
Other non-current assets
18
Deferred tax assets
12
Total non-current assets
Inventories
19
Trade and other receivables
20, 35
Income tax receivables
Other current assets
21
Cash and cash equivalents
22
Total current assets
Total assets
Equity
Share capital
23
Reserves
23
Retained earnings
23
Translation reserve
23
(36.4 )
(48.9 )
Equity attributable to shareholders of the parent
Non-controlling interests
25
Total equity
23
Liabilities
Interest-bearing loans and borrowings
27, 35
Lease liabilities
14
Provisions
30
Deferred tax liability
12
Other non-current liabilities and employee benefits
32
Total non-current liabilities
Interest-bearing loans and borrowings
27, 35
Lease liabilities
14
Trade payables and other liabilities
32
Income tax liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
8
Consolidated statement of cash flows for the year
ended 31 December 2021
YEAR ENDED
Note
31 December 2021
31 December 2020
Cash flows from operating activities
Profit/loss for the period
(183.7 )
Adjustments for:
Amortisation and depreciation
Net interest expense
Foreign exchange result
(1.1 )
Result on debt modification and extension fees
Result on disposal of property, plant and equipment and intangibles
(2.0 )
Impairment of non-financial assets
Share-based payments
Loan forgiven
(2.7 )
Tax expense
(17.7 )
Rent concessions
(10.9 )
(18.6 )
Other
Working capital changes:
22
Change in trade and other receivables and other assets
(7.2 )
Change in inventories
(7.1 )
Change in payables and other liabilities
(24.5 )
Change in provisions and employee benefits
Cash generated from operations
Income tax paid
(11.5 )
(16.1 )
Net cash from operating activities
Cash flows from investing activities
Proceeds from the sale of the business
Proceeds from the sale of property, plant and equipment, and
intangible assets
Proceeds from the sale of financial assets measured at fair value
Purchase of property, plant and equipment
(88.8 )
(84.9 )
Purchase of intangible assets
(9.3 )
(6.5 )
Net cash from investing activities
(96.6 )
Cash flows from financing activities
Proceeds from share transfers (employees options)
Proceeds from loans and borrowings
27
Repayment of loans and borrowings
27
(106.9 )
(80.9 )
Payments of lease liabilities including interests paid
(141.7 )
(134.9 )
Interest paid
27
(18.9 )
(19.4 )
Interest received
Dividends paid to non-controlling interest
24
(1.3 )
(0.8 )
Transactions with non-controlling interest
(3.8 )
Net cash from financing activities
(270.4 )
(95.0 )
Net change in cash and cash equivalents
(10.1 )
Effect of foreign exchange rate movements
Balance sheet change of cash and cash equivalents
(6.1 )
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
22
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
9
Consolidated statement of changes in equity for the year ended 31 December 2021
ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT
Share capital
Reserves
Retained
earnings
Translation
reserve
Total
Non-controlling
interest
Total
equity
As of 1 January 2021
(48.9 )
Profit/loss for the period
Other comprehensive income/loss
(1.3 )
Total comprehensive income/loss
(1.3 )
Transaction with non-controlling interests
23
(4.3 )
(4.3 )
(0.8 )
(5.1 )
Share based payments
23
As of 31 December 2021
(36.4 )
ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT
Share
capital
Reserves
Retained
earnings
Translation
reserve
Total
Non-controlling
interest
Total
equity
As of 1 January 2020
(29.7 )
Profit/loss for the period
(182.0 )
(182.0 )
(1.7 )
(183.7 )
Other comprehensive income/loss
(9.1 )
(19.2 )
(28.3 )
(0.1 )
(28.4 )
Total comprehensive income/loss
(9.1 )
(182.0 )
(19.2 )
(210.3 )
(1.8 )
(212.1 )
Transaction with non-controlling interests
23
(0.8 )
(0.8 )
Share based payments
23
As of 31 December 2020
(48.9 )
The above consolidated income statement should be read in conjunction with the accompanying notes.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
10
Notes to the Consolidated Financial Statements
1. General information on AmRest Group
Company operates a European Company (Societas Europaea , SE). The company is domiciled in Spain .
not changed during the year 2021.
Hereinafter the Company and its subsidiaries shall be referred to as the “Group” and “AmRest Group”.
On 27 April 2005, the shares of AmRest Holdings SE were quoted for the first time on the Warsaw Stock Exchange (“WSE”)
and on 21 November 2018 were quoted on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges, through the
Spanish Automated Quotation System (Sistema de Interconexión Bursátil - SIBE). Since 21 November 2018 AmRest’s
shares have been quoted simultaneously on both the above stock exchanges (dual listing).
The Group operates Kentucky Fried Chicken (“KFC”), Pizza Hut (“PH”), Burger King (“BK”) and Starbucks (“SBX”)
restaurants through its subsidiaries in Poland, the Czech Republic (hereinafter Czechia), Hungary, Slovakia, Russia,
Serbia, Croatia, Bulgaria, Romania, Germany, France, Austria, Slovenia and Spain, on the basis of franchise rights granted.
Starting from 1 October 2016 the Group as a master-franchisee has the right to grant a license to third parties to operate
Pizza Hut Express and Pizza Hut Delivery restaurants (sub-franchise) in countries of Central and Eastern Europe, while
ensuring a certain share of restaurants operated directly by AmRest. Pizza Hut restaurants acquired in France in May 2017,
in Germany in July 2017 and in Russia in June 2018 are operated both by AmRest and its sub-franchisees based on
master-franchise agreements.
In Spain, Germany and Portugal the Group operates its own brands La Tagliatella. This business is based on own
restaurants and the franchise agreements signed with non-related companies. It is supported by the central kitchen located
in Spain which produces and delivers products to the whole network of the mentioned own brands. In China the Group
operates its own brand Blue Frog.
In 2018 the Group acquired the Bacoa and Sushi Shop brands, as a result of which it operates own and franchise
restaurants in Spain (Bacoa) and own and franchise Sushi Shop restaurants among the others in France, Belgium, Spain,
Switzerland, United Kingdom, Luxembourg, Italy, Portugal, United Arab Emirates and Saudi Arabia. Bacoa is a Spanish
premium burger chain, and Sushi Shop is the operator of the leading European chain of Japanese cuisine restaurants.
Additionally, among own brands the Group operates virtual brands.
As of 31 December 2021 the Group operates 2 436 restaurants (own and franchise) in comparison to 2 338 restaurants as
of 31 December 2020.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
11
The Group operates its restaurants mainly on a franchise basis. However being master-franchisee and performing business through own brands has become more important. The
table below shows the terms and conditions of cooperation with franchisors and franchisees of particular brands operated by AmRest as of 31 December 2021
ACTIVITY WHERE AMREST IS A FRANCHISEE
Brand
KFC
Pizza Hut Dine-In
Pizza Hut Express, Delivery
Burger King
Starbucks
1)
Franchisor/
Partner
YUM! Restaurants Europe
Limited and its affiliates
Pizza Hut Europe
Limited
Pizza Hut Europe Limited
Burger King Europe GmbH
Starbucks Coffee
International, Inc/Starbucks
EMEA Ltd., Starbucks
Manufacturing EMEA B.V.
Area covered
by the
agreement
Poland, Czechia,
Hungary, Bulgaria,
Serbia, Croatia, Russia,
Spain, Germany, France,
Austria, Slovenia
Poland
Poland, Czechia, Hungary,
France, Russia, Germany,
Slovakia.
Poland, Czechia, Bulgaria, Slovakia, Romania
Poland, Czechia, Hungary,
Romania, Bulgaria, Germany,
Slovakia, Serbia
Term of
agreement
10 years with possibility of
extension for a further 10
years
10 years with possibility
of extension for a further
10 years
10 years with poss bility of
extension for a further 10 years
and 5 years
Poland, Czechia, Bulgaria, Slovakia, Romania – 20 years or 10
years
5)
Since 20 November 2018: 10 years for restaurants opened
during the agreed development period.
Additional information – please refer to Note 37 – Events after
the reporting period.
15 years, possibility of
extension for a further 5
years
2)
; in Romania till 10
October 2023 16 years; in
Bulgaria till 1 October 2027
20 years
Preliminary
fee
up to
USD 53.4 thousand
3)
up to
USD 53.4 thousand
3)
USD 26.7 thousand
3)
USD 50 thousand or USD 25 thousand, in Czechia USD 60
thousand
5)
Since 20 November 2018: USD 30 thousand for restaurants
opened during the agreed development period.
USD 25 thousand
Franchise fee
6% of sales revenues
4)
6% of sales revenues
4)
6% of sales revenues
4)
5% of sales revenues, in Czechia (for 5 restaurants) 3% of
sales revenues for first 5 years, then 5%
Since 20 November 2018 for restaurants opened during the
agreed development period: 3,5% of revenues in first 2 years
growing to 4%, 4,5% and 5% in next years.
6% of sales revenues
6)
Marketing
costs
5% of sales revenues
5% of sales revenues
6% or 5% of sales revenues
depending on the concept
4)
5% of sales revenues, in Czechia 3% of sales revenues for first
3 years, then 5%.
Since 20 November 2018 for restaurants opened during the
agreed development period 4% or 5% of sales revenues
(depending on the country) and 3% for flagships.
amount agreed each year
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
12
ACTIVITY PERFORMED THROUGH OWN BRANDS
Brand
La Tagliatella
Blue Frog
Bacoa
Sushi Shop
Area of the activity
Spain, Germany,
Portugal
China
Spain
France, Spain, Belgium, Italy,
Switzerland, Luxemburg, UK
ACTIVITY WHERE AMREST IS A FRANCHISOR (OWN BRAND OR BASED ON MASTER-FRANCHISE AGREEMENTS)
Brand
Pizza Hut Dine-In
Pizza Hut Express,
Delivery
La
Tagliatella
Blue Frog
BACOA
Sushi Shop
Partner
Yum Restaurants
International
Holdings LLC
Pizza Hut Europe
Limited, Yum
Restaurants
International
Holdings LLC, Pizza
Hut Europe S.a.r.l
Own brand
Own brand
Own brand
Own brand
Area
covered by
the
agreement
Germany, Russia,
Armenia and
Azerbaijan
Germany, France,
CEE (Hungary,
Czechia, Poland,
Slovakia), Russia,
Armenia and
Azerba jan
Spain
China
Spain
France, Belgium, Spain,
United Arab Emirates,
Saudi Arabia, Italy,
Portugal
Term of
agreement
10 years with
possibility of
extension
7)
10 years with
possibility of
extension
7)
10 years with
possibility of
extension
5 years with
possibility of
extension
10 years
with
possibility of
extension
Franchise agreements:
from 3 years (corners) to
10 years with a limited
territorial exclusivity
EADA i.e. “master
franchise”: exclusivity for
specific territories granted
to from 2 up to 14 years.
1) AmRest Group took up 82% and Starbucks 18% of the share capital of the newly-established companies in Poland, Czechia and Hungary. In
the event of default, deadlock, or disputed take-over or change of control over AmRest Holdings SE and/or its shareholders, Starbucks will be
entitled to increase its share to 100% by purchasing shares from the Group. Option upon termination for event of default or deadlock are symmetric
for both parties, so that AmRest will also be entitled to exercise the option to purchase all of the Shares of Starbucks. According to Group
assessment as of the day of this report issuance there are no indicators making the mentioned above options realizable. The Group acquired
100% of shares in Romanian and Bulgarian entities, being the sole operators in these markets. In Germany the Group acquired 100% of shares
in a key operator in this market.
2) The license agreements entered into by and between AmRest’s affiliates and Starbucks EMEA Limited for Poland, Hungary and Czech
Republic, which are set to expire on May 31, 2022 are subject to a five year extension. Consistent with AmRest’s long-term commitment to its
brand portfolio, AmRest and Starbucks EMEA Limited are currently negotiating the terms of such extension.
3) The fee is updated at the beginning of each calendar year for inflation.
4) Preliminary franchise fees and marketing costs might be changed if certain conditions set in the agreement are met.
5)Validity period of franchisee agreement, therefore licenses for Burger King restaurants opened in Poland in the period from
1 March 2009 till 30 June 2010, and also for newly-opened restaurants in Poland was. extended from 10 to 20 years since the date of restaurant
opening, however, without the option of prolongation for the next 10 years, which was provided in the original development agreement with AmRest
Sp. z o.o. In relation to restaurants opened in Poland in the period from 1 March 2009 to 30 June 2010 and in relation to restaurants opened after
this period (for franchise agreements for 20 years) the initial franchise payment was increased from USD 25,000 to USD 50,000. On 20 November
2018 a new Development Agreement of the Burger King brand in Bulgaria, Czech Republic, Romania, Slovakia and Poland was signed, amended
on 15 September 2020. This Development Agreement was terminated by Burger King Europe GMBH effective 1 February 2022, please refer to
Note 37.
6) Due to global Starbucks decision, the franchisee fee was decreased to 0% for the period April – June 2020.
7) In case of Russia and Germany MFA term ends on 31 May 2022. As a consequence of such termination, the Pizza Hut outlets in those two
territories will be transferred either to Yum! or to a third party designated by Yum!. AmRest and Yum! are currently discussing the terms and
conditions for the transition of the business in those markets, which could extend beyond 31 May 2022, if the parties so agree in writing.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
13
2. Group Structure
As of 31 December 2021, 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 Management Kft
Budapest, Hungary
AmRest Kft
99.00%
August 2018
AmRest TAG S.L.U.
1.00%
GM Invest SRL
Brussels, Belgium
AmRest TAG S.L.U.
100.00%
October 2018
Sushi Shop Group SAS
Paris, France
GM Invest SRL
9.47%
October 2018
AmRest TAG S.L.U.
90.53%
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 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.
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 Coffee Sp. z o.o.
Wroclaw, Poland
AmRest Sp. z o.o.
82.00%
March 2007
Starbucks Coffee International,Inc.
18.00%
AmRest EOOD
Sofia, Bulgaria
AmRest Holdings SE
100.00%
April 2007
OOO AmRest
Saint Petersburg, Russia
AmRest Acquisition Subsidiary Ltd.
44.72%
July 2007
AmRest Sp. z o.o.
55.28%
AmRest Coffee s.r.o.
Prague, Czechia
AmRest Sp. z o.o.
82.00%
August 2007
Starbucks Coffee International,Inc.
18.00%
AmRest Kávézó Kft
Budapest, Hungary
AmRest Sp. z o.o.
82.00%
August 2007
Starbucks Coffee International,Inc.
18.00%
AmRest d.o.o.
Belgrade, Serbia
AmRest Sp. z o.o.
60.00%
October 2007
ProFood Invest GmbH
40.00%
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.
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
Frog King Food&Beverage
Management Ltd
Shanghai, China
Bigsky Hospitality Group Ltd
100.00%
December 2012
Blue Frog Food&Beverage
Management Ltd
Shanghai, China
New Precision Ltd
100.00%
December 2012
Shanghai Kabb Western 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
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 Food Srl.
2
Bucharest, Romania
AmRest Sp. z o.o.
100.00%
July 2019
AmRest Coffee SK s.r.o.
Bratislava, Slovakia
AmRest s.r.o.
99.00%
December 2015
AmRest Sp. z o.o.
1.00%
AmRest Coffee Deutschland
Munich, Germany
AmRest Kaffee Sp. z o.o.
23.00%
May 2016
Sp. z o.o. & Co. KG
AmRest TAG S.L.U.
77.00%
AmRest DE Sp. z o.o. & Co. KG
Munich, 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
Kai Fu Food and Beverage
Management (Shanghai) Co. Ltd
Shanghai, China
Blue Frog Food&Beverage
Management Ltd
100.00%
December 2016
LTP La Tagliatella Portugal, Lda
Lisbon, Portugal
AmRest TAG S.L.U.
100.00%
February 2017
LTP La Tagliatella Franchise II
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
OOO AmRest Pizza
Saint Petersburg, Russia
AmRest Acquisition Subsidiary Ltd.
99.999996%
November 2017
OOO AmRest
0.000004%
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 SK s.r.o.
Bratislava, Slovakia
AmRest s.r.o.
99.00%
April 2018
AmRest Sp. z o.o.
1.00%
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 SAS
Paris, France
Sushi Shop Management SAS
100.00%
October 2018
Sushi House SA
4
Luxembourg
Sushi Shop Luxembourg SARL
100.00%
October 2018
Sushi Shop London Pvt LTD
London, UK
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Belgique SA
Bruxelles, Belgium
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Louise SA
5
Bruxelles, Belgium
Sushi Shop Belgique SA
100.00%
October 2018
Sushi Shop UK Pvt LTD
Charing, UK
Sushi Shop Group SAS
100.00%
October 2018
Sushi Shop Anvers SA
3
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
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
14
Company name
Registered office
Parent/non-controlling undertaking
Owner-ship
interest and
total vote
Date of effective control
Sushi Shop Madrid S.L.U.
Madrid, Spain
Sushi Shop Management SAS
100.00%
October 2018
Sushi Shop Milan SARL
Milan, Italy
Sushi Shop Management SAS
70.00%
October 2018
Vanray SRL
30.00%
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
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
Sushi Shop Morges SARL
Moudon, Switzerland
Sushi Shop Switzerland SA
100.00%
October 2020
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 SAS
Paris, France
AmRest TAG S.L.U.
100.00%
March 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.
Madrid, Spain
AmRest Holdings SE
100.00%
September 2020
Supply services for restaurants operated by the Group
SCM Czech s.r.o.
Prague, Czechia
SCM Sp. z o.o.
90.00%
March 2007
Ondrej Razga
10.00%
SCM Sp. z o.o.
Warsaw, Poland
AmRest Sp. z o.o.
51.00%
October 2008
R&D Sp. z o.o.
33.80%
Beata Szafarczyk-Cylny
5.00%
Zbigniew Cylny
10.20%
1
On 25 November 2016 Amrestavia, S.L.U., the sole shareholder of AmRest GmbH, decided to liquidate this company. The liquidation process
has not been finished up until the date of this Report.
2
On 31 August 2021 AmRest Sp. z o.o. became sole shareholder of AmRest Food Srl., through the purchase agreement of the remaining 1% of
shares.
3
On 1 October 2020 Sushi Shop Belgique SA, the sole shareholder of Sushi Shop Anvers SA, decided to liquidate this company.
The liquidation process has not been finished up until the date of this Report.
4
On 31 August 2021 Sushi Shop Luxembourg SARL has acquired 14% of shares of Sushi House SA. On this day Sushi Shop Luxembourg SARL
has become sole shareholder of Sushi House SA.
5
On 31 August 2021 Sushi Shop Belgique SA has acquired 45.20% of shares of Sushi Shop Louise SA. On this day Sushi Shop Belgique SA has
become sole shareholder of Sushi Shop Louise SA.
-
On 17 February 2021 Sushi Shop NL B.V. has been deregistered
-
On 9 April 2021 AmRest FSVC LLC has been deregistered
- On 30 May 2021 Kai Zhen Food and Beverage Management (Shanghai) Ltd has been deregistered
-
On 16 December 2020 Sushi Shop Management SAS, the sole shareholder of Sushi Shop Holding USA LLC, Sushi Shop NE USA LLC, Sushi
Shop NY1 LLC and Sushi Shop NY2 LLC decided to liquidate these companies. On 30 August 2021 Sushi Shop NE USA LLC, Sushi Shop NY1
LLC and Sushi Shop NY2 LLC have been deregistered. On 15 September 2021 dissolution Sushi Shop Holding USA LLC was executed.
- On 22 November 2021 Amrest Management Kft has been deregistered.
3. Basis of preparation
These consolidated financial statements have been prepared in accordance with the International Financial Reporting
Standards as adopted by the European Union (“IFRS”) and other provisions of the financial reporting applicable in Spain.
These consolidated financial statements were authorised for issue by the Company’s Board of Directors on 28 February
2022.
Unless disclosed otherwise, the amounts in these consolidated financial statements are presented in euro (EUR), rounded
off to full millions with one decimal place.
Details of the Group’s accounting policies are included in note 38.
The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those
followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2020,
except for the adoption of new standards, interpretations, and amendments to standards effective as of 1 January 2021,
as described below and in the note 39.
Several amendments and interpretations apply for the first time in 2021, but do not have any material impact on the Group’s
policies. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not
yet effective.
In May 2020 IASB issued COVID-19-Related Rent Concessions - amendment to IFRS 16 Leases (“the 2020 Amendment”)
that provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising
as a direct consequence of the COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a
COVID-19 related rent concession from a lessor is a lease modification.
The Group has applied the amendments to IFRS 16 already in 2020 for the first time.
One of the conditions of applying the amendment was that it related to a reduction in lease payments due originally on or
before 30 June 2021. However, the pandemic has continued beyond the period envisaged when the 2020 Amendment
was issued. In April 2021 IASB has extended the amendment to IFRS 16 and the entities will be allowed to apply the
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
15
amendment to a reduction in lease payments originally due on or before 30 June 2022 (“the 2021 Amendment”). This
amendment was approved by European Union on 31 August 2021 and applied in these consolidated financial statements.
The effect of the accounting is presented under “rent concessions” lines. The application of these amendments has material
impact on Group’s financial data.
In late 2019 a novel strain of coronavirus, COVID-19, was first detected and in March 2020, the World Health Organization
declared COVID-19 a global pandemic. Throughout 2020 and in 2021 COVID-19 has spread throughout globally, including
the countries the Group operates. Most governments have been implementing restrictions to reduce the spread of COVID-
19. With the approvals of first vaccines at the end of 2020, the governments deployed and started carrying out mass
vaccination programs in 2021.
Visible results of the COVID-19 outbreak include the decrease in demand, the disruption or slowdown of supply chains and
an increase in economic uncertainty, increase of volatility in the price of assets, exchange rates. Possible results of the
pandemic include changes in the market environment, peoples behaviors and ways of living.
The Group is adapting to new local sanitary regulations, developing, and executing safety measures to protect employees
and guests. The Group continues adapting the business model and sales channels that result in steady increase in sales
levels. The Group is also closely monitoring situation on local markets and is taking the benefits of available government
aid schemes which allow to enhance liquidity risk management in current situation.
The new variants of COVID-19 that have emerged during the year have had a lesser impact in the main economies where
the Group operates thanks to the progress in vaccination levels, which have enabled the spread of the virus to be contained
and the restrictions imposed by governments to be gradually relaxed, thus facilitating greater mobility and social interaction.
However, the evolution and impact has been uneven by geographic areas.
This gradual reopening of economies was reflected in the upward trend in AmRest's revenues, and reflected in the higher
number of restaurants in operation, which stood at 99% at the end of 2021, compared to 92% at the end of 2020. The sales
performance is also the result of the transformational work being carried out in the Group thanks to the increasing adoption
of new distribution channels where AmRest aims to offer its guests the same consumer experiences regardless of the
distribution channel selected.
The Group maintains close communication with its financing banks and bondholders. In December 2021, after assessing
different funding alternatives, the Group has decided to sign an amendment to the existing credit facilities and to extend
the maturities. Based on the extended agreement, the repayments are scheduled on each 30 September anniversary of
the next three years and the remaining amount on 31 December 2024. Details were disclosed in note 27 and maturity
analysis is disclosed in note 35.
Based on the available information, facts, circumstances and uncertainties about the future, which is at least, but is not
limited to, twelve months from the end of the reporting period, the going concern assumption applies in the foreseeable
future. Consequently, these consolidated financial statements have been prepared under going concern principle.
4. Use of judgements and estimates
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in applying the group’s accounting policies.
Estimates and judgments are continually verified, and are based on professional experience and various factors, including
expectations of future events, that are deemed to be justified in given circumstances. Revisions to estimates are recognised
prospectively. Actual results may differ from these estimates.
Climate change: risk analysis and financial impacts
All companies face risks and opportunities derived from the climate and are having to make strategic decisions in this area.
The impacts of climate risks on financial statements are broad and potentially complex, and will depend on the specific
risks of the sector. When the future is analyzed, probability scenarios are presented where not only the physical
consequences of climate change are assessed, but also the changes in environmental regulations to face it.
Both physical risks and transitional risks pose a number of threats and opportunities to overall financial stability, potentially
influencing financial markets in the future.
Climate risk has been incorporated into the estimates and judgments in relation to the future used for accounting purposes,
although they do not present significant differences with those used in previous years.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which
are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong.
Judgements
Determination of the lease term, whether the Group is reasonably certain to exercise extension or termination options
For majority of contracts the Group holds options for extension/termination of the lease period, on a specified conditions.
The Group’s practice is to assess the reasonableness of exercising options one year before the decision deadline, because
in that time all relevant facts and circumstances to make such a decision can be generally available. The Group considers,
for example, latest performance of the restaurant, present brand strategy revised during budgeting process, comparison of
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
16
lease fees to the market average, length of the non-cancellable period of a lease and significance of leasehold
improvements recently undertaken (or expected to be undertaken).
The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which
significantly affects the amount of lease liabilities and right-of-use assets recognised.
Revenue from contracts with customers
The Group applies judgements that significantly affect the determination of the amount and timing of revenue from contracts
with customers that relates to identification of the performance obligations and principal versus agent considerations, as
well as allocation of the transaction price to the performance obligations in franchise activities (own brands and master-
franchise agreements).
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Group based its assumptions and estimates on available parameters when the consolidated
financial statements were prepared. Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are
reflected in the assumptions when they occur.
Impairment of non-financial assets including goodwill
Impairment losses are recognised whenever the carrying value of an asset or group of assets that are part of one cash
generating unit or a group of cash generating units exceeds its recoverable amount, which is the higher of its fair value less
costs of disposal and its value in use. The value in use and fair value less costs of disposal calculations are based on a
discounted cash flow (DCF) models. The cash flows are derived from the budgets and forecasts. The recoverable amount
is sensitive to the discount rates used for the DCF model as well as the expected future growth margins, and the growth
rate used for extrapolation purposes.
Accounting policies for impairment testing of non-financial assets are disclosed in note 38.
The key assumptions used to determine the recoverable amount of the different CGUs, including a sensitivity analysis, are
disclosed and further explained in note 17.
Assessment of useful lives
Determination and periodic verification of depreciation rates is made on the basis of the technical abilities of a given asset,
together with planned form and intensity of usage, with simultaneous consideration of experience and legal obligations
influencing usage of the given asset. Sensitivity on changes in average useful lives is disclosed in note 13.
Provision for expected credit losses (ECLs) of trade receivables and contract assets
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are
based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography,
product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance).
The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix
to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions
(i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of
defaults in the manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions.
The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of
customer’s actual default in the future. The information about the ECLs on the Group’s trade receivables and contract
assets is disclosed in note 35.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model,
which depends on the terms and conditions of the grant. This estimation also requires determination of the most appropriate
inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making
assumptions about them.
For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Group uses a
finite difference method. The assumptions and models used for estimating fair value for share-based payment transactions
are disclosed in note 29.
Recognition of provisions for potential tax obligations and uncertain tax provisions
Recognition of provision required estimates of the probable outflows of resources embodying economic benefits and
defining the best estimates of the expenditures required to settle the present obligation at the end of the reporting period.
The Group operates in various tax jurisdictions. Regulations concerning VAT, corporate income tax and social insurance
charges are frequently amended. The applicable regulations may also contain ambiguous issues, which lead to differences
in opinions concerning the legal interpretation of tax legislation both among the tax authorities and between such authorities
and enterprises.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
17
Tax reports and other matters (e.g. customs or foreign currency transactions) may be audited by authorities competent to
impose substantial penalties and fines, whereas any additional tax liabilities assessed during such audits have to be paid
together with interest.
Consequently, the figures presented and disclosed in these consolidated financial statements may change in the future if
a final decision is issued by tax inspection authorities.
Details of current tax inspections open in Group entities are presented in note 31.
Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management judgement is required to determine the probability that in
the future taxable profit will be available against which the deductible temporary difference can be utilised. Details of
deferred tax assets are disclosed in note 12.
5. Segment reporting
AmRest as a group of dynamic developing entities running operations in many markets and various restaurant business
segments is under constant analysis of the Board of Directors. The Board is also constantly reviewing the way business is
analysed and adjusts it accordingly to changes in the Group’s structure as a consequence of strategic decisions.
Group produces various reports, in which its business activities are presented in a variety of ways. Operating segments
are set on the basis of management reports used by the Board when making strategic decisions. The Board of Directors
analyses the Group’s performance by geographical breakdown in divisions described in the table below.
Own restaurant and franchise business is analysed for four operating segments presenting Group’s performance in
geographic breakdown. Geographical areas are identified based on the similarity of products and services, similar
characteristics of the production process and of the customer base and economic similarities (i.e. exposure to the same
market risks). Fifth segment includes in general non-restaurant business. Details of the operations presented in each
segment are presented below:
Segment
Description
Central and Eastern Europe (CEE)
Restaurant operations and franchise activity in:
■ Poland – KFC, Pizza Hut, Starbucks, Burger King, virtual brands
■ Czechia – KFC, Pizza Hut, Starbucks, Burger King,
■ Hungary – KFC, Pizza Hut, Starbucks,
■ Bulgaria – KFC, Starbucks, Burger King,
■ Croatia, Austria, Slovenia – KFC,
■ Slovakia – Starbucks, Pizza Hut, Burger King,
■ Romania – Starbucks, Burger King
■ Serbia – KFC, Starbucks.
Western Europe
Restaurant operations together with supply chain and franchise activity in:
■ Spain – KFC, La Tagliatella, Bacoa, Sushi Shop,
■ France – KFC, Pizza Hut, Sushi Shop,
■ Germany – Starbucks, KFC, Pizza Hut, La Tagliatella,
■ Portugal – La Tagliatella, Sushi Shop,
■ Belgium, Italy, Switzerland, Luxemburg, United Kingdom and other countries with
activities of Sushi Shop.
China
Blue Frog operations in China.
Russia
KFC and Pizza Hut restaurant operations and franchise activity in Russia, Armenia and
Azerba jan.
Other
Other support functions rendered by the subsidiaries for the Group such as e.g. Executive Team,
Controlling, Treasury, Investors Relations, Mergers & Acquisitions. Other also includes expenses
related to M&A transactions not finalised during the period, whereas expenses related to finalised
merger and acquisition are allocated to applicable segments. Additionally, Other includes non-
restaurant businesses performed by AmRest Holdings SE, SCM Sp. z o.o. and its subsidiaries
and other minor entities performing holding and/or financing services.
When analysing the results of particular business segments the Board of Directors draws attention primarily to EBITDA
reached, which is not an IFRS measure.
Segment measures and the reconciliation to profit/loss from operations for the year ended 31 December 2021 and for the
comparative year ended 31 December 2020 is presented below.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
18
YEAR ENDED
31 December 2021
CEE
Western
Europe
Russia
China
Other
Total
Restaurant sales
872.7
664.0
184.8
99.5
-
1 821.0
Franchise and other sales
0.4
56.9
0.4
0.7
37.6
96.0
Inter-segment revenue
-
-
-
-
-
-
Segment revenue
873.1
720.9
185.2
100.2
37.6
1 917.0
EBITDA
196.2
110.6
41.3
28.7
(17.7)
359.1
Depreciation and amortisation
108.8
84.3
25.9
17.3
0.6
236.9
Net impairment losses on financial assets
0.5
-
(0.1)
-
0.5
0.9
Net impairment losses on other assets
7.2
9.6
1.4
-
-
18.2
Profit/loss from operations
79.7
16.7
14.1
11.4
(18.8)
103.1
Finance income and costs
(13.7)
(7.2)
(2.1)
(0.9)
(21.3)
(45.2)
Profit/loss before tax
66.0
9.5
12.0
10.5
(40.1)
57.9
Capital investment*
50.7
38.8
9.6
4.2
0.5
103.8
*Capital investment comprises additions and acquisition in property, plant and equipment and intangible assets.
YEAR ENDED
31 December 2020
CEE
Western
Europe
Russia
China
Other
Total
Restaurant sales
684.2
539.8
152.2
76.1
-
1 452.3
Franchise and other sales
1.3
43.0
0.3
0.3
25.7
70.6
Inter-segment revenue
-
-
-
-
-
-
Segment revenue
685.5
582.8
152.5
76.4
25.7
1 522.9
EBITDA
126.8
38.3
30.8
23.2
(17.4)
201.7
Depreciation and amortisation
111.0
94.2
28.8
18.6
0.8
253.4
Net impairment losses on financial assets
0.3
5.4
0.2
0.1
0.2
6.2
Net impairment losses on other assets
22.8
57.3
3.9
0.6
-
84.6
Profit/loss from operations
(7.3)
(118.6)
(2.1)
3.9
(18.4)
(142.5)
Finance income and costs
(22.8)
(9.2)
(4.6)
(1.0)
(21.3)
(58.9)
Profit/loss before tax
(30.1)
(127.8)
(6.7)
2.9
(39.7)
(201.4)
Capital investment*
42.1
25.6
5.2
1.5
0.3
74.7
*Capital investment comprises additions and acquisition in property, plant and equipment and intangible assets.
Information on geographical areas:
Significant geographical regions are disclosed below with their key characteristics.
YEAR ENDED
31 December 2021
31 December 2020
Revenue from external customers
Poland
462.5
378.7
Czechia
204.0
157.8
Spain
232.8
172.8
France
313.5
254.6
Russia
185.2
152.5
Germany
128.7
119.6
Hungary
122.2
92.5
China
100.2
76.4
31 December 2021
31 December 2020
Total of non-current assets other than financial instruments
and deferred tax assets
Poland
330.2
346.6
Czechia
146.3
136.2
Spain
383.9
359.4
France
412.9
410.0
Russia
149.8
150.0
Germany
129.9
132.2
Hungary
74.9
72.0
China
67.8
65.4
The segment information has been prepared in accordance with the accounting policies applied in these consolidated
financial statements.
Taking into account that the Group operates chains of own restaurants and additionally operates as franchisor (for own
brands) and master-franchisee (for some franchised brands), the Group does not have any single external customer with
the revenue on the level of 10% or more of total revenue earned by the Group.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
19
6. Revenues
The Group operates chains of own restaurants under own brands as well as under franchise license agreements.
Additionally, the Group operates as franchisor (for own brands) and master-franchisee (for some franchised brand) and
develops chains of franchisee businesses, organizing marketing activities for the brands and supply chain. Consequently,
the Group analyses two streams of revenue:
- Restaurant sales,
- Franchise and other sales.
This is reflected in the format of Group’s consolidated income statement. Details of revenues streams are also presented
in note 38d. Additional disaggregation by geographical market is included in the note 5.
Restaurant sales
Restaurant revenues are the most significant source of revenues representing over 95% of total revenues.
Group's customers are mainly individual guests, that are served in the restaurants, therefore the Groups’ customer base is
widely spread. There are no significant concentrations of revenues risks. Payments for the restaurant sales are settled
generally immediately in cash or by credit, debit and other cards. There are no material credit risks related to this type of
operations.
This gradual reopening of economies in 2021 was reflected in the upward trend in AmRest's revenues, and reflected in the
higher number of restaurants in operation. As of the end of December 2021 operating stores constituted almost 100% of
own and over 97% of franchise stores. The sales performance is also the result of the transformation work being carried
out in the Group, developing economies of scope thanks to the adoption of new distribution channels.
Group observed visible increase in revenues month-on-month throughout the year 2021.
7. Operating costs and losses
AmRest Group presents consolidated income statement using a classification based on function of expense method.
Historically consolidated income statement was prepared by function – since AmRest was quoted on the Warsaw Stock
Exchange in 2005, which is a common practice on Polish market. Group considers that analysis of restaurant expenses,
franchise and other expenses – and information regarding result in the functional area provides more relevant information.
The table below presents an additional analysis of operating expenses by nature.
YEAR ENDED
31 December 2021
31 December 2020
Food, merchandise and other materials
580.4
468.2
Payroll
453.6
413.8
Social security and employee benefits
110.2
101.0
Royalties
89.9
71.8
Utilities
76.1
70.3
Marketing expenses
78.1
63.5
Delivery fees
81.0
58.9
Other external services
103.1
74.5
Occupancy cost
15.9
1.1
Depreciation of right-of-use assets
133.4
140.1
Depreciation of property, plant and equipment
91.6
100.2
Amortisation of intang ble assets
12.0
13.1
Other
17.2
29.2
Total cost by nature
1 842.5
1 605.7
Summary of operating expenses by functions:
YEAR ENDED
31 December 2021
31 December 2020
Restaurant expenses
1 632.4
1 407.7
Franchise and other expenses
71.7
54.6
General and administrative expenses
138.4
143.4
Total costs
1 842.5
1 605.7
It is not possible to reliably and objectively quantify the economic impact of pandemic situation on the Group's operating
costs. Some costs such as depreciation and amortisation are fixed in nature, others (like payroll and social contributions)
are dependent on number of operating restaurants but may not be directly correlated to sales revenues generated by the
restaurants. Cost of sales and royalties, variable rent, as a rule are most directly tied to revenues level, and finally costs of
marketing may relatively increase.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
20
In order to secure an ongoing smooth daily business in the Group companies, procedures have been put in place to ensure
prompt reaction of appropriate services. In addition, the Group implemented additional measures to mitigate the risk of
infection among its employees, including in particular:
- Providing detailed instructions and guidelines on monitoring the health of the Group’s employees and the
health of Group’s guests.
- Strengthening already stringent hygiene, cleaning and sanitation procedures and introducing contactless
options that protect both employees and quests in restaurants.
- Providing the restaurant employees with additional personal protection and hygiene supplies.
- Requesting to reduce the number of meetings as well as domestic and foreign business travel, and to use
teleconferencing and video-conferencing facilities to the largest extent possible, as well enabling remote work.
With the spread of pandemic many governments were applying lockdown procedures and various limitations for businesses
to operate. In order to mitigate the disadvantageous effects of the lockdowns, many countries’ governments, have
introduced various measures to assist entities in response to the COVID-19.
The Group was and is closely monitoring available programs that are offered on various markets. The government support
programs include for example direct subsidies to payroll costs, tax exemptions, social security contributions reductions.
Additionally, entities from the Group were able to apply for extended deadlines for payments of various taxes.
The Group has taken numerous actions aimed at utilizing government support related to cost of labor offered on all markets
where the Group operates. One of the priority tasks in this respect has been to avoid a significant decrease in the level of
employment, taking into account the effectiveness of the ongoing processes and to ensure financial security for employees
to the extent possible in the current situation but also to optimize payroll costs in Group.
Government programs implemented with regards to COVID-19 spread allow also to defer payments taxes, social securities
and other public obligations.
Group’s policy is to present government grants related to income as other operating income.
8. Other operating income/expenses
YEAR ENDED
31 December 2021
31 December 2020
Government grants for payroll and employee benefits
10.5
29.5
Government grants for rent and other
26.7
2.1
Supply chain services
3.0
2.5
Franchise agreements related provision
(1.0)
(5.0)
Other provisions
(1.1)
(0.6)
Other gains and losses
9.6
2.6
47.7
31.1
Other operating income and expenses section for year ended 31 December 2021 consists mainly of accounted COVID-19
pandemic governmental programs that amounted to EUR 37.2 million, out of that EUR 10.5 million income was recognised
for government assistance programs for payroll and employee benefits (payroll costs EUR 8.9 million and social contribution
EUR 1.6 million), whereas EUR 26.7 million was recognised for government support programs for rent and other. The
above government grants were in a form of cash grants out of which EUR 1.2 million as of 31 December 2021 was not
received yet.
In 2021 grants related to payroll and employee benefits were significantly lower than in the comparative period due to the
fact that most of the labour related programs introduced in the previous periods ended gradually in the first half of the 2021.
Main programs in the area of labour costs:
- Spain
In accordance with the provisions of article 47 of the Workers Statute, in relation to Royal Decree 1483/2012 and article
22 and 23 of Royal Decree-Law 8/2020, as well as Royal Decree-Law 30/2020, AmRest companies in Spain have filed
before the Spanish labor authority a Temporary Employment Regulation File (Expediente de Regulación Temporal de
Empleo or “ERTE”). The ERTE covered 3 288 employees. As of 31 December 2020 the ERTE covered 591 employees,
since September 2021 there are no employees under ERTE.
- Poland
Under the Act on special solutions related to the prevention and combating of COVID-19, other infectious diseases
and crisis situations caused by them of 2 March 2020 (Journal of Laws of 2020, item 374), in 2020 the Group took
effective measures including the application for compensation for the protection of workplaces from the funds of the
Fund of Guaranteed Employee Benefits. In 2021 Polish subsidiaries have not received support from government
programs.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
21
- France
The Partial Activity technical unemployment government program started on 15 March 2020 is continued but in the
lesser extent (in Q4 2021 when the restaurant is forced to closed due to several cases of COVID-19).
- Germany
Reduced working hours (Kurzarbeitergeld) salary government reimbursement program has been introduced effective
on 1 March 2020. From July 2021 on the Group is not eligible to get the government payment anymore.
- Czechia
During 2020 the companies have applied for the government aid under special COVID-19 regulations. COVID-19
payroll compensations programs finished at the end of May 2021. During Q3-Q4 the only existing government aid
program was about to the reimbursement of the company costs connected with employees in COVID-19 quarantine.
- Hungary
Under the Act on Special Provisions During COVID-19 (Regulation of 485/2020) released on 10 November 2020 the
Hungarian companies applied for:
• 50% reimbursement of gross salaries, but maximum 671 EUR/employee for the period from November 2020 to
May 2021,
• suspension for employer social contributions and suspension of employer rehabilitation contribution from
November 2020 to May 2021.
Similar actions are also taken on other markets. The Group has applied for support programs offered by each country’s
government, in the form of reimbursement of labour costs, and introducing internal actions, such as shortening of working
hours or technical unemployment.
Other grants – main programs:
In April 2021 the State supported loan in Russia in the amount EUR 2.7 million was forgiven. Bank waived it based on the
particular indicators (main that was maintaining the required employment rate).
In April 2021 entities operating in Germany applied for "Nov/Dez Hilfe", a state aid program that was meant to support
industries hit by the second lockdown and compensate lost sales in the months of November and December 2020. The
Group recognized EUR 12.8 million from that program in H1 2021. In the second part of 2021 the Group applied for another
program (Ueberbrueckungshilfe III) that was meant to cover losses from January to June 2021 - the state compensated a
part of carried fixed costs, the amount of compensation being dependent on sales decline compared to 2019 – the German
entities recognised additional EUR 8.3 million from that program.
Entities operating in Czechia and Slovakia applied for a government program called COVID Najem (government grants for
rent costs) and COVID Gastro, entities in France applied for government program called Fond de solidarité. The Group has
recognised EUR 2.4 million from above described programs in 2021.
Government grants are in some cases associated with requirements to keep the agreed level of workforce for agreed period
(or other conditions), there are also subject to external audits. The external audit of the grant received in Germany is
expected in June 2022. As of 31 December 2021 the Group does not expect that required conditions would not be met,
therefore there is no material risk of returning the government assistance that has been recognised.
9. Impairment losses
Details of impairments losses recognized:
10. Finance income
Finance income in years ended 31 December 2021 and 31 December 2020 represents mainly bank and other interests
received and net income from exchange differences for the year ended 31 December 2021.
YEAR ENDED
31 December 2021
31 December 2020
Impairment of trade receivables (note 35)
0.9
6.2
Net impairment losses of financial assets
0.9
6.2
Impairment of property, plant and equipment (note 13)
18.1
35.4
Impairment of intangible assets (note 15)
3.0
2.2
Impairment of right of use assets (note 14)
(3.0)
20.8
Impairment of goodwill (note 16)
-
26.2
Impairment of inventories and other assets
0.1
-
Net impairment losses of non-financial assets
18.2
84.6
Total net impairment losses of assets
19.1
90.8
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
22
11. Finance costs
YEAR ENDED
31 December 2021
31 December 2020
Interest expense
(17.1)
(20.4)
Interest expense on lease liability
(23.7)
(26.7)
Net cost from exchange differences
-
(11.5)
Net loss from exchange differences on lease liability
-
(11.2)
Net loss from exchange differences - other
-
(0.3)
Other
(7.2)
(2.4)
Total finance cost
(48.0)
(61.0)
Other finance costs in year ended 31 December 2021 include mainly loss on debt modification in an amount of EUR 6.5
million, further disclosed in note 27.
12. Income taxes
YEAR ENDED
31 December 2021
31 December 2020
Current tax
23.1
(9.4)
Deferred income tax recognised in the income statement
(0.6)
27.1
Income tax recognised in the income statement
22.5
17.7
Deferred tax asset
Opening balance
37.6
22.4
Closing balance
45.7
37.6
Deferred tax liability
Opening balance
39.0
51.4
Closing balance
45.4
39.0
Change in deferred tax assets/liabilities
1.7
27.6
Temporary differences in the calculation of deferred tax relate to the following items:
Asset
Liability
31 December 2021
31 December 2020
31 December 2021
31 December 2020
Property, plant and equipment and intangible assets
16.2
14.2
50.9
50.2
Leases
7.9
9.4
-
-
Trade and other receivables
1.5
2.4
0.4
-
Provisions and other liabilities
11.2
8.1
1.6
-
Tax losses carried forward
15.0
16.1
-
-
Other differences
2.3
1.7
0.9
3.1
54.1
51.9
53.8
53.3
The offset of tax
(8.4)
(14.3)
(8.4)
(14.3)
45.7
37.6
45.4
39.0
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The current financial
situation and strategic plans allow to consider the level of recognised assets and deferred tax assets to be reasonable.
Changes in deferred tax asset and liabilities are recognized as follow:
YEAR ENDED
31 December 2021
31 December 2020
Change in deferred tax assets/liabilities
1.7
27.6
of which:
Deferred taxes recognised in the income statement
0.6
27.1
Deferred taxes recognised in other comprehensive income – net
investment hedges
(0.3)
(1.8)
Deferred taxes recognised in equity -valuation of employee options
0.6
2.2
Exchange differences
0.8
0.1
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
23
The Group operates in various tax jurisdictions. Income taxes and deferred income taxes are measured using tax rates
enacted or substantively enacted at the reporting date in particular countries. Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the year when the asset is or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income tax on the Group’s profit before tax differs from the theoretical amount which would be obtained if the weighted
average tax rate applicable to consolidated companies were applied:
YEAR ENDED
31 December 2021
31 December 2020
Profit before tax
57.9
(201.4)
Income tax calculated according to domestic tax rates applicable to
income in particular countries*
8.1
(52.3)
Temporary differences on goodwill impairment for which no
deferred tax was recognized
-
7.9
Tax loss for the current period for which no deferred tax asset was
recognized
8.8
15.8
Change of assumptions on deferred tax asset from tax losses
related to previous years
1.6
9.6
Other deferred taxes not recognized or reassessed
(1.1)
-
Effect of local tax reported as income tax
4.1
2.7
Income and expenses permanently not subject tax
(0.3)
-
Change in estimates of deferred tax liabilities
-
(7.9)
Change in tax rate
0.3
Effect of other differences
1.0
6.5
Corporate income tax in the income statement
22.5
(17.7)
*The applicable weighted average tax rate amounted to 14.0% (for the period ended 31 December 2020: 26.0%).
As of 31 December 2021 Group has the following tax losses:
Year of expiry of tax loss
carryforwards
Value of tax losses
Tax losses in respect of which
deferred tax assets were
recognised
Tax losses in respect of
which no deferred tax assets
were recognised
2022 - 2027
19.3
0.4
18.9
No time limit
122.1
14.6
107.5
141.4
15.0
126.4
Deferred taxes were not recognised for the following tax losses:
YEAR ENDED
31 December 2021
31 December 2020
China
0.7
0.3
France
25.8
20.0
Germany
79.9
104.1
Poland
16.4
19.9
Portugal
0.4
-
Romania
0.5
0.4
Russia
0.4
-
Slovakia
0.9
0.8
Slovenia
0.6
0.6
Spain
0.8
-
126.4
146.1
The Group analyses recoverability of deferred taxes on tax losses based on the guidance in IAS 12. Group subsidiaries
analyzes the periods in which tax losses can be utilized, whether there are sufficient taxable temporary differences related
to the same tax authority and tax jurisdiction, and if the entity will create taxable profits in the periods in which unused tax
losses can be utilized. As a result of analysis performed, in 2021 Group recognised total balance of EUR 15.0 million
deferred tax assets related to unused tax losses. The balance relates mainly to tax losses in Spanish market, French KFC,
Sushi entities and Polish market. Tax losses in above mentioned tax jurisdictions have no limit of expiration except for
Polish market – 5 years.
The Group analyses business plans and cash flows forecasts of subsidiaries in terms of recoverability of deferred tax
assets recognised. In particular, the Group performs goodwill impairment tests for whole businesses and balances of tax
losses for which deferred taxes were recognized are verified against projected tax cash outflows. In case unit has projected
negative results, deferred tax assets are reassessed in terms of recoverability.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
24
In 2021 total tax effect of tax loss for the current period for which no deferred tax asset was recognised amounted EUR 8.8
million and tax effect of EUR 1.6 million relates to deferred taxes on tax losses recognized in prior years and derecognized
in current year.
A tax authority may control the tax returns (if they have not already been controlled) of the Group companies from 3 to 5
years as of the date of their filing.
The table below presents tax rate by country applicable for the year 2021 and 2020.
Country
Income tax rates
Deferred income tax assets and liabilities
2021
2020
2021
2020
Spain
25.00%
25.00%
25.00%
25.00%
Poland
19.00%
19.00%
19.00%
19.00%
Czech
19.00%
19.00%
19.00%
19.00%
Hungary
9.00%
9.00%
9.00%
9.00%
Russia
20.00%
20.00%
20.00%
20.00%
Serbia
15.00%
15.00%
15.00%
15.00%
Bulgaria
10.00%
10.00%
10.00%
10.00%
USA
35.00%
35.00%
35.00%
35.00%
Malta
35.00%
35.00%
35.00%
35.00%
Germany
30.00% *
30.00% *
30.00% *
30.00% *
France **
26.50%
28.00%
25.00%
25%, 26.50%
Croatia
18.00%
18.00%
18.00%
18.00%
Hong Kong
16.50%
16.50%
16.50%
16.50%
China
25.00%
25.00%
25.00%
25.00%
Romania
16.00%
16.00%
16.00%
16.00%
Slovakia
21.00%
21.00%
21.00%
21.00%
Slovenia
19.00%
19.00%
19.00%
19.00%
Austria
25.00%
25.00%
25.00%
25.00%
Portugal
21.00%
21.00%
21.00%
21.00%
* Deferred taxes in Germany were calculated using a tax rate of 30% which is the basic income tax rate in Germany of 15% and an additional
average trade tax of 15%.
** Deferred taxes in France were calculated taking into account an approved plan of the progressive reduction of the income tax rate from
26,5% in 2021 to 25.0% in 2022.
13. Property, plant and equipment
The table below presents changes in the value of property, plant and equipment in 2021 and 2020
2021
Leasehold
improvements,
land, buildings
Restaurants
equipment
and vehicles
Furniture and
other assets
Assets under
construction
Total
PPE as of 1 January
277.2
146.6
32.9
18.3
475.0
Additions
9.2
15.4
1.7
68.1
94.4
Depreciation (note 7)
(41.0)
(37.1)
(13.5)
-
(91.6)
Impairment losses (note 9)
(10.1)
(7.3)
(1.0)
0.3
(18.1)
Disposals, liquidation and deconsolidation
(0.9)
(0.3)
(0.5)
(0.2)
(1.9)
Transfers
21.8
21.2
15.5
(60.7)
(2.2)
Exchange differences
3.3
1.4
0.4
0.2
5.3
PPE as of 31 December
259.5
139.9
35.5
26.0
460.9
Gross book value
616.2
385.4
102.7
27.0
1 131.3
Accumulated depreciation and impairments
(356.7)
(245.5)
(67.2)
(1.0)
(670.4)
Net book value
259.5
139.9
35.5
26.0
460.9
2020
Leasehold
improvements,
land, buildings
Restaurants
equipment and
vehicles
Furniture and
other assets
Assets under
construction
Total
PPE as of 1 January
303.2
184.3
31.4
66.0
584.9
Additions
6.8
8.8
4.1
48.5
68.2
Depreciation (note 9)
(43.5)
(40.6)
(16.1)
-
(100.2)
Impairment losses (note 9)
(21.4)
(11.2)
(0.2)
-
(32.8)
Disposals, liquidation and deconsolidation
(1.7)
(2.4)
(0.2)
(9.5)
(13.8)
Transfers
49.9
15.8
16.1
(81.8)
-
Exchange differences
(16.1)
(8.1)
(2.2)
(4.9)
(31.3)
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
25
2020
Leasehold
improvements,
land, buildings
Restaurants
equipment and
vehicles
Furniture and
other assets
Assets under
construction
Total
PPE as of 31 December
277.2
146.6
32.9
18.3
475.0
Gross book value
597.9
366.0
91.2
20.3
1 075.4
Accumulated depreciation and impairments
(320.7)
(219.4)
(58.3)
(2.0)
(600.4)
Net book value
277.2
146.6
32.9
18.3
475.0
Due to the nature of the Group business the balance of the property, plant and equipment consists of assets in over 1.9
thousand restaurants. There are no individually significant assets.
Depreciation was charged as follows:
YEAR ENDED
31 December 2021
31 December 2020
Costs of restaurant operations
88.6
96.5
Franchise expenses and other
1.3
1.3
General and administrative expense
1.7
2.4
Total depreciation
91.6
100.2
Increasing the average useful lives of property, plant and equipment by 10% would lead to a decrease in depreciation for
the 12-month period ended 31 December 2021 by around EUR 9.4 million. Increasing the average useful lives of property,
plant and equipment by 10% would lead to a decrease in depreciation for the 12-month period ended 31 December 2020
by around EUR 10.0 million.
14. Leases
The Group leases over 1.9 thousand properties in order to operate brand restaurants. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions, depending on local lease practice and legal
framework. Additionally, in some countries, the Group leases cars, equipment, as well as properties for administration or
storage purposes and company flats.
The table below presents the reconciliation of the right-of-use assets and lease liabilities for years ended 31 December
2021 and 2020:
Right-of-use asset
Lease liabilities
2021
Restaurant
properties
Other
Total right-of-use asset
Total liabilities
As of 1 January
693.9
15.7
709.6
761.4
Additions – new contracts
57.8
2.3
60.1
59.8
Remeasurements and modifications
119.2
1.1
120.3
106.6
Depreciation expense (note 7)
(128.4)
(5.0)
(133.4)
-
Impairment (note 9,17)
3.0
-
3.0
-
Interest expense (note 11)
-
-
-
23.7
Payments
-
-
-
(141.7)
Exchange differences
11.3
0.1
11.4
13.1
As of 31 December
756.8
14.2
771.0
822.9
Right-of-use asset
Lease liabilities
2020
Restaurant
properties
Other
Total right-of-use asset
Total liabilities
As of 1 January
835.5
17.2
852.7
864.1
Additions – new contracts
62.5
2.7
65.2
65.2
Remeasurements and modifications
(4.7)
2.0
(2.7)
(23.6)
Depreciation expense (note 7)
(134.6)
(5.5)
(140.1)
-
Impairment (note 9,17)
(20.8)
-
(20.8)
-
Interest expense (note 11)
-
-
-
26.7
Payments
-
-
-
(134.9)
Exchange differences
(44.0)
(0.7)
(44.7)
(36.1)
As of 31 December
693.9
15.7
709.6
761.4
The following are the remaining contractual maturities of lease payments at the reporting date. The amounts are gross and
undiscounted and include contractual interest payments.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
26
31 December 2021
31 December 2020
Up to 1 year
163.0
161.0
Between 1 and 3 years
254.9
237.5
Between 3 and 5 years
176.4
164.0
Between 5 and 10 years
218.7
201.9
More than 10 years
142.3
131.2
Total contractual lease payments
955.3
895.6
Future finance costs of leases
132.4
134.2
Total lease liabilities
822.9
761.4
Amortization was charged as follows:
YEAR ENDED
31 December 2021
31 December 2020
Costs of restaurant operations
129.6
135.5
General and administrative expense
3.8
4.6
Total amortisation
133.4
140.1
The Group recognised in 2021 rent expense from short-term leases of EUR 0.7 million, leases of low-value assets of EUR
5.0 million and variable lease payments of EUR 10,1 million (including negative amount of EUR 10.9 million COVID-19-
related rent concessions) for the year ended 31 December 2021. Impairment test procedures, assumptions used and tests’
results are disclosed in note 17.
Amounts recognised in statement of cash flows amounted to EUR 141.7 million presented in financing activity as repayment
of lease liability and EUR 26.7 million in operating activity as lease payments not included in the lease liability. Total cash
outflow for leases amounted to EUR 168.4 million in the year ended 31 December 2021.
In the comparable period, in 2020, the Group recognised rent expense from short-term leases of EUR 1.6 million, leases
of low-value assets of EUR 4.8 million and variable lease payments of EUR -5.3 million (including negative amount of EUR
18.6 million COVID-19-related rent concessions) for the year ended 31 December 2020. Impairment test procedures,
assumptions used and tests’ results are disclosed in note 17.
In the comparable period, in 2020, amounts recognised in statement of cash flows amounted to EUR 134.9 million
presented as repayment of lease liability and EUR 19.7 million as lease payments not included in the lease liability. Total
cash outflow for leases amounted to EUR 154.6 million in the year ended 31 December 2020.
Additional information about lease payments and lease term
The Group’s lease payments are often charged as a higher of fixed payment and turnover based payment. The Group
recognized the excess of turnover based rent as variable lease payments. Therefore the stores’ revenue impacts on the
future variable lease payments. In the year ended 31 December 2021, the share of variable payments (excluding rent
concessions) amounted to 15% of fixed lease payments (2020: 10%).
The intention of the Group is to secure long-term property lease contracts, with flexibility that enables adjustments of
strategy and reaction on changing market conditions. Vast majority part of the Group’s leases provides some extent of
flexibility, for example, the Group can adjust its exposure by exercising termination options, sublease options, extension
options or using pre-emption rights to go into a renewal agreement. Such rights are subject of individual negotiations with
lessors and do not deviate from standard market conditions.
The Group does annual revision of expiring lease contracts. The Group performs case-by-case analysis of the contracts,
adjusted to the latest store performance, up-to-date Group’s strategy and market conditions. During this process, among
others, the Group decides whether to exercise, or not, the extension and termination options falling for the following year.
The decisions have impact on the assessment of the leases end date used in the measurement of lease liability.
COVID-19-related rent concessions
The Group has been negotiating rent concessions with its landlords for the majority of its store leases as a result of the
severe impact of the COVID-19 pandemic during the year. The Group applied the practical expedient for COVID-19-related
rent concessions consistently to eligible rent concessions relating to its store leases. The Group continues to account for
rent concessions relating to its other leases under other applicable guidance in IFRS 16.
The amount recognised in profit or loss for the reporting period to reflect changes in lease payments arising from rent
concessions to which the Group has applied the practical expedient for COVID-19-related rent concessions is EUR 11.1
million (2020: 18.6 million).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
27
15. Intangible assets
The table below presents changes in the value of intangible assets in 2021 and 2020:
2021
Own brands
Licenses for franchise
brands
Relations with
franchisees
and
customers
Other intang ble
assets
Total
IA as of 1 January
153.8
22.6
32.0
32.3
240.7
Additions
-
4.2
-
5.1
9.3
Amortisation (note 7)
(0.3)
(2.7)
(3.1)
(5.9)
(12.0)
Impairment losses (note 9)
-
(1.0)
-
(2.0)
(3.0)
Disposals and derecognition of
assets
-
(0.3)
-
(0.7)
(1.0)
Transfers between categories
0.2
-
-
2.0
2.2
Exchange differences
0.4
0.3
-
-
0.7
IA as of 31 December
154.1
23.1
28.9
30.8
236.9
Gross book value
158.9
45.8
51.9
79.3
335.9
Accumulated amortisation and
impairments
(4.8)
(22.7)
(23.0)
(48.5)
(99.0)
Net book value
154.1
23.1
28.9
30.8
236.9
2020
Own brands
Licenses for franchise
brands
Relations with
franchisees
and
customers
Other intangible
assets
Total
IA as of 1 January
156.7
25.9
35.1
35.8
253.5
Additions
-
3.2
-
3.3
6.5
Amortisation (note 7)
(0.3)
(3.8)
(3.1)
(5.9)
(13.1)
Impairment losses (note 9)
(2.6)
(0.8)
-
-
(3.4)
Disposals and derecognition of
assets
-
(0.1)
-
(0.3)
(0.4)
Exchange differences
-
(1.8)
-
(0.6)
(2.4)
IA as of 31 December
153.8
22.6
32.0
32.3
240.7
Gross book value
158.4
44.6
51.9
75.1
330.0
Accumulated amortisation and
impairments
(4.6)
(22.0)
(19.9)
(42.8)
(89.3)
Net book value
153.8
22.6
32.0
32.3
240.7
Amortisation was charged as follows:
YEAR ENDED
31 December 2021
31 December 2020
Costs of restaurant operations
5.1
5.4
Franchise expenses and other
1.8
1.9
General and administrative expense
5.1
5.8
Total amortisation
12.0
13.1
Impairment test procedures, assumptions used and tests’ results are disclosed in note 17.
The Group believes that brands do not generate cash inflows that are largely independent of other groups of assets. For
some Group brands, cash inflows from the franchisee business are partially independent of other cash inflows, however,
these do not represent the value of the whole brand. Brands are used to support restaurant business development and
revenues from sales of products under certain brands are not capable of being split between revenue for the brand and
revenue for costs of production. Consequently, brands are not a cash-generating unit and are not tested on a standalone
basis. Such assets are tested together with their relevant goodwill values. The results of the test are presented in note 17.
The table below presents details of Proprietary brands as of 31 December 2021. Table shows level at which the brands
are tested:
Brand
Useful life
Level of goodwill test
Gross value
Accumulated
amortisation
Impairment
Net value
La Tagliatella
indefinite
Spain – La Tagiatella and KFC
65.0
-
-
65.0
Sushi Shop
indefinite
Sushi Shop (all markets)
86.1
-
-
86.1
Blue Frog
definite
China – Blue Frog
5.3
(2.3)
-
3.0
Bacoa
definite
Spain - Bacoa
2.5
(0.1)
(2.4)
-
158.9
(2.4)
(2.4)
154.1
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
28
Other intangible assets cover mainly exclusivity rights including master-franchise rights in the amount of EUR 2.4 million
(EUR 3.7 million as of 31 December 2020), key monies in the amount of EUR 18.1 millions (EUR 18.3 millions as of 31
December 2020) and computer software.
16. Goodwill
Goodwill recognized on business combinations is allocated to the group of CGUs that is expected to benefit from the
synergies of the business combination.
The table below presents goodwill allocated to particular levels on which it is monitored by the Group. In all cases is not
higher than the operating segment level:
2021
1 January
Increases
(provisional)
Impairment
Exchange
differences
31 December
Sushi Shop (all markets)
140.5
-
-
-
140.5
Spain – La Tagiatella and KFC
90.9
-
-
-
90.9
Russia - KFC
30.8
-
-
2.3
33.1
Germany - Starbucks
8.6
-
-
-
8.6
China – Blue Frog
19.3
-
-
2.2
21.5
France - KFC
14.0
-
-
14.0
Hungary – KFC
3.4
-
-
-
3.4
Romania - SBX
2.6
-
-
(0,1)
2.5
Czechia – KFC
1.4
-
-
0.1
1.5
Poland – Other
0.6
-
-
-
0.6
Total
312.1
-
-
4.5
316.6
2020
1 January
Increases
(provisional)
Impairment
Exchange
differences
31 December
Sushi Shop (all markets)
140.5
-
-
-
140.5
Spain – La Tagiatella and KFC
90.9
-
-
-
90.9
Spain - Bacoa
1.2
-
(1.2)
-
-
Russia - KFC
40.4
-
-
(9.6)
30.8
Germany - Starbucks
35.0
-
(26.4)
-
8.6
China – Blue Frog
19.8
-
-
(0.5)
19.3
France - KFC
14.0
-
-
14.0
Hungary – KFC
3.8
-
-
(0.4)
3.4
Romania - SBX
2.6
-
-
-
2.6
Czechia – KFC
1.4
-
-
-
1.4
Poland – Other
0.6
-
-
-
0.6
Total
350.2
-
(27.6)
(10.5)
312.1
Impairment test procedures, assumptions used and tests’ results are disclosed in note 17.
17. Impairment of non-current assets
Restaurant level tests
The Group periodically reviews the carrying amounts of its non-financial assets to determine whether there is any indication
of impairment. If any such indication exists, then the asset’s recoverable amount is estimated for the purpose of impairment
testing. The recoverable amount of an asset is determined at the level of a single restaurant as the smallest unit (or set of
assets) generating cash flows that are largely independent of the cash inflows generated by other assets /groups of assets.
Restaurant assets include amongst others property, plant and equipment, intangible assets and right of use assets.
Impairment indicators defined by the Group are described in note 38.
Impairment indicators are reviewed twice a year and respective impairments test for restaurants are performed twice a
year.
The recoverable amount of the cash-generating unit (CGU) is determined based on value in use calculation for the
remaining useful life determined by lease expiry date or restaurant closure date (if confirmed), using the discount rate for
each individual country.
For recoverable value calculations of value in use, Group uses cash flow projections based on financial budgets that require
relevant judgments and estimates. Cash flow projections are prepared for individual restaurants. The Group uses most
recently approved budgets and forecasts prepared on the level of countries or activities of brands in certain countries. Next
those assumptions are verified in terms of situation of individual restaurants. Base assumptions may be enhanced or
worsen, to reflect the best estimate for expected cash projections of analyzed restaurant, if needed. Individual projections
for sales and costs may depend on restaurant’s main streams of revenues and its recovery path from pandemic (different
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
29
for take-away business, dine-in, food courts), cost pressure in various markets, supply chain related issues and other. The
restaurant tests are also prepared with diversified projection periods that are correlated to restaurant’s rental agreements.
The main assumptions used to determine the value in use were:
- sales growth projections dependent on sales mix and sales channels for a given restaurant
- impact of changes in revenue on direct costs
- costs structure development
- the amount of investment expenditure
- a discount rate based on the weighted average cost of capital and reflecting the current market assessment of the
time value of money and the business risk of the cash generating unit.
As such, Group does not disclose quantitative ranges for the main assumptions used for restaurant test. The amounts
assigned to each of these parameters reflect the Group's experience adjusted for expected changes in the forecast period
and corrected by local specifics and characteristics of a given restaurant. This reflects the specifics of Group’s operations,
where business is conducted through multiple, individually small operating units.
In the event that the fair value less costs of sale is used as a reference, market references are used that take into
account, among others, location and updated market information.
Carrying amount of each CGU consists of carrying amount of above described assets of the restaurants. Value in use is
determined through the discounted cash flows analysis, without the base rental charge.
As presented below it can be observed that discount rates used for the impairment test have increased comparing to year
end 2020 tests. This is the effect of turbulences on the global market due to pandemic and increases in markets risk
premiums and/or risk-free rates. Discounts rates applied are shown in the table below.
Pre-tax discount rate
31 December 2021
Pre-tax discount rate
30 June 2021
Pre-tax discount rate
31 December 2020
Poland
9.1%
8.4%
7.6%
Czechia
7.8%
7.7%
7.0%
Hungary
10.0%
11.0%
9.9%
Russia
12.1%
12.8%
11.6%
Serbia
10.6%
13.0%
11.4%
Bulgaria
8.2%
9.8%
8.3%
Spain
8.6%
9.1%
8.1%
Germany
7.2%
6.6%
6.0%
France
7.1%
6.8%
6.1%
Croatia
9.4%
11.3%
9.8%
China
8.2%
9.0%
8.3%
Romania
9.9%
10.9%
9.7%
Slovakia
8.1%
8.2%
7.4%
Portugal
8.5%
9.4%
8.2%
Austria
7.9%
7.4%
7.0%
Slovenia
8.6%
9.0%
8.0%
Belgium
8.2%
7.4%
6.6%
Italy
8.7%
9.3%
8.1%
Switzerland
5.8%
5.0%
4.6%
Luxemburg
7.4%
6.9%
6.4%
Netherland
7.3%
6.5%
5.9%
United Kingdom
7.8%
7.4%
6.8%
Details of impairments losses recognised:
YEAR ENDED
Note
31 December 2021
31 December 2020
Net impairment of property, plant and equipment
13
18.1
32.8
Net impairment of intangible assets
15
3.0
3.4
Net impairment of right of use assets
14
(3.0)
20.8
Net impairment of goodwill
16
-
27.6
Net impairment losses of non- current non financial assets
18.1
84.6
Details of impairments losses recognised per category of assets (property, plant and equipment, right of use assets,
intangible assets or goodwill) are presented in notes 13, 14, 15 and 16.
Recognized impairment losses do not relate to any individual significant items, but to numerous restaurants tested during
the year. This reflects the specifics of Group’s operations, where business is conducted through multiple, individually small
operating units.
The Group used its best estimate on the recovery path for pre-pandemic levels of revenues and margins and the Group
observes some reversal for restaurants that were able to enhance its operations in pandemic environment. Other
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
30
restaurants presents still decreased levels of operations comparing to pre-pandemic satiation. Level of impairment losses
recognized was also affected by the increase of the discount rates used.
For financial year ended 31 December 2021 Group has tested 507 restaurants as separate cash generating units.
Impairment loss or partial impairment loss was recognized for 240 restaurants. Reversal of impairment or partial reversal
of impairment was accounted for 93 restaurants. As a result of tests performed during financial year ended 31 December
2021, impairment in the amount of EUR 18.1 million (EUR 21.1 million for property, plant and equipment and intangible
assets, EUR -3.0 million for right of use assets) was recognized. The amount of EUR -3.0 million for right of use assets, is
the result of reversals by EUR 6.3 million and an impairment loss by EUR 3.3 million. The Group performed an analysis of
rent quotations on real estate markets in the main countries where AmRest operates. The analysis covered rent prices
fluctuations during the pandemic period in 2020 and changes observed in 2021. Based on the decrease of current market
rents quotations observed the Group recognized the impairment loss of EUR 3.3 million.
Five highest individual impairment losses amounted in total EUR 4.4 million. An average impairment loss per restaurant
was less then EUR 0.2 million. Five highest individual reversals of impairment losses amounted in total EUR 4.5 million.
An average reversal of impairment per restaurants was less then EUR 0.2 million.
For financial year ended 31 December 2020 Group has tested 763 restaurants as separate cash generating units.
Impairment loss or partial impairment loss was recognized for 236 restaurants. Reversal of impairment or partial reversal
of impairment was accounted for 32 restaurants. As a result of tests performed during financial year ended 31 December
2020, impairment in the amount of EUR 57 million (EUR 36.2 million for property, plant and equipment and intangible
assets, EUR 20.8 million for right of use assets) was recognized. Five highest individual impairment losses amounted in
total EUR 6.3 million. An average impairment loss per restaurant was less then EUR 0.2 million. Five highest individual
reversals of impairment losses amounted in total EUR 2 million. An average reversal of impairment per restaurants was
less then EUR 0.1 million.
Goodwill and intangibles with undefined useful lives level
The Group performs impairment test for goodwill together with any intangible assets with indefinite useful lives, other
intangibles, property plant and equipment, right of use assets, as well any other non-current assets that operate on the
group of CGUs where goodwill is allocated.
For recoverable value calculations, the Group uses cash flow projections based on financial budgets that require
judgment and other estimates that include, among others, the operating result on sales and the discount and growth rates
at long term.
Mandatory impairment tests are performed at year ends.
Present value technique model (the income approach) is used by Group for the purpose of determining fair value. The
income approach converts future amounts (e.g. cash flows or income and expenses) to a single discounted amount. The
fair value reflects current market expectations about those future amounts. The income approach uses unobservable
inputs, as a result, the fair value measurement is generally classified as Level 3 in the fair value hierarchy.
The cash flows were derived from the most recent budgets, plans for next year and forecasts for the following four years.
The 5th year normalized projections are used to extrapolate cash flows into the future if the 5th year represents a steady
state in the development of the business. The adjustments may be necessary to reflect the expected development of the
business (normalization of cash flows). Growth rates do not exceed the long-term average growth rate for the products,
industries, or country or market in which the asset is used.
The recoverable amount is most sensitive to the discount rate used, growth rate used for extrapolation purposes and the
weighted average budgeted EBITDA margin. The weighted average budgeted EBITDA margin is calculated as an average
for the 5 years projection period i.e. without any impact of the residual value element. Budgeted revenues are used as
weights. Average restaurants sales growth refers to same-store-sales growth rates reflected in impairment models.
The main input assumptions used in test performed as of year end 2021 are as follows:
YE 2021
Post-tax
discount rate
Implied
pre-tax
discount rate
Growth rate
for residual
value
Average
restaurant sales
growth 2022-2026
Weighted average
budgeted EBITDA
margin
Czechia – KFC
6.3%
7.3%
2.0%
2.8%
25.1%
Hungary – KFC
9.1%
9.6%
3.2%
3.3%
20.0%
Russia – KFC
9.6%
11.1%
3.8%
3.5%
20.6%
Spain – KFC and TAG
6.4%
8.0%
1.6%
2.9%
23.9%
China – BF
6.2%
7.6%
1.9%
3.4%
25.2%
Romania – SBX
8.3%
9.2%
2.8%
3.0%
25.7%
Germany – Starbucks
5.1%
6.2%
1.9%
9.5%
17.6%
France – KFC
5.3%
6.6%
1.3%
2.4%
13.4%
Sushi Shop (all markets)
5.3%
6.5%
1.3%
1.0%
20.9%
No impairment losses were recognized based on the year end tests.
The Group carried out a sensitivity analysis for the impairment tests performed. The sensitivity analysis examined the
impact of changes in below factors assuming other factors remain unchanged:
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
31
• discount rate applied,
• weighted average budgeted EBITDA margin,
• growth rate for residual value,
• sales revenues increases.
The objective of such a sensitivity analysis is to determine if reasonable possible changes in the main financial assumptions
would lead to an impairment loss being recognized.
For discount rate, growth rate, weighted average budgeted EBITDA margin, a reasonable possible change was determined
as 10% of the input data, applicable for particular unit. Consequently, each impairment test has a different level of a
reasonable change in inputs, which can be determined by multiplying the base input data used in the impairment test as
presented in table above by 10%.
Additionally Group performed sensitivity analysis on the expected changes in sales revenues recognition. In that case
Group determines reasonable change individually for each business tested. Usually this is in a range of 1-5% decrease of
estimated sales revenues in each year of projection.
Results of the sensitivity analysis
Based on the sensitivity analysis performed a reasonably possible change in any of the key assumptions used would not
lead to recognition of impairment losses i.e. carrying amount would not exceed the recoverable amount.
Comparative information for the goodwill impairment tests performed during year ended 31 December 2020
The main input assumptions used in test are as follows:
2020
Post-tax
discount rate*
Implied
pre-tax
discount rate
Growth rate for
residual value
Weighted average
budgeted EBITDA
margin
Czechia – KFC
6.8%
7.8%
2.1%
17.8%
Hungary – KFC
10.0%
10.7%
3.1%
16.9%
Russia – KFC
10.4%
12.0%
3.7%
15.5%
Spain – KFC and TAG
7.1%
9.0%
1.2%
17.0%
Spain – Bacoa
7.1%
7.1%
1.2%
(5.8%)
China – BF
7.3%
8.9%
2.2%
13.2%
Romania – SBX
9.2%
10.2%
3.0%
18.0%
Germany – KFC
5.3%
6.6%
1.7%
4.9%
Germany – Starbucks
5.3%
6.6%
1.7%
5.4%
France – KFC
5.5%
7.0%
1.3%
8.7%
France – PH
5.5%
7.0%
1.3%
(10.9%)
Sushi Shop (all markets)
5.5%
7.1%
1.3%
14.0%
*In year 2020 goodwill impairment tests were performed using model where full rental expenditures were considered
operating expenses contrary to model used in 2021 where recoverable amount was determined assuming base rent charge
is not an operating expenditure but an element of financing (IFRS 16 application). Consistently discount rates used in 2021
reflect lease liabilities as element of financing and in 2020 not.
Based on the impairment test prepared during interim tests, the impairment was recognized in 2020 in following group of
CGUs: Bacoa business in Spain, and Starbucks business in Germany. In all remaining tests the recoverable amount
exceeded the carrying amount of the tested group of CGUs. No impairment losses were recognized based on the year end
tests.
Test results for HY 2020
2020
Post-tax
discount rate
Implied
pre-tax
discount rate
Growth rate for
residual value
Weighted average
budgeted EBITDA
margin
Czechia – KFC
5.9%
6.7%
2.1%
20.2%
Hungary – KFC
8.6%
9.1%
3.0%
20.4%
Russia – KFC
10.7%
12.3%
4.3%
15.3%
Spain – KFC and TAG
6.7%
8.3%
1.5%
18.1%
Spain – Bacoa
6.7%
6.7%
1.5%
(20.9%)
China – BF
6.8%
8.2%
2.5%
11.7%
Romania – SBX
9.9%
11.0%
2.9%
18.8%
Germany – KFC
5.0%
6.1%
1.9%
3.2%
Germany – Starbucks
5.0%
6.1%
1.9%
2.6%
France – KFC
5.0%
6.2%
1.6%
6.7%
France – PH
5.0%
6.3%
1.6%
(8.9%)
Sushi Shop (all markets)
5.0%
6.3%
1.6%
13.6%
Impairment losses were recognized in the following group of CGUs: Bacoa business in Spain, and Starbucks business in
Germany.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
32
The impairment test performed for Bacoa business resulted in recognition of impairment losses in total value of EUR 3.6
million which included impairment for goodwill EUR 1.2 million and impairment of Bacoa trademark in amount of EUR 2.4
million.
The impairment test performed for Starbucks Germany business resulted in recognition of impairment losses. The carrying
amount of the tested unit included goodwill, property, plant and equipment, intangible assets, right of use assts as well
corresponding lease liabilities. Carrying amount of CGU was compared with recoverable amount, as a result impairment
loss of EUR 26.4 million was accounted for goodwill (partial goodwill impairment).
18. Other non-current assets
As of 31 December 2021 and 2020 the balances of other non-current assets were as follows:
31 December 2021
31 December 2020
Deposits for rentals
22.0
21.7
Other
1.1
1.2
23.1
22.9
19. Inventories
As of 31 December 2021 and 2020, inventories cover mainly food and packaging used in the restaurants, finished goods
and stocks in central kitchen for sale by La Tagliatella restaurants.
Due to the nature of its business and applicable Group standards, all inventories are treated as materials. Inventories are
presented at net value including write-downs.
20. Trade and other receivables
As of 31 December 2021 and 2020 the balances of trade and other receivables were as follows:
31 December 2021
31 December 2020
Trade receivables
37.3
34.0
Other tax receivables
22.1
17.2
Credit cards, coupons and food aggregators receivables
17.3
13.4
Loans and borrowings
1.3
1.3
Government grants
1.2
5.1
Other
1.6
1.6
Allowances for receivables (note 35)
(12.9)
(12.2)
67.9
60.4
Information about the impairment of trade receivables and the Group’s exposure to credit risk, foreign currency risk and
interest rate risk can be found in note 35.
21. Other current assets
As of 31 December 2021 and 2020 the balances of other current assets consisted mainly of prepayments for utilities,
marketing and other services.
22. Cash and cash equivalents
Cash and cash equivalents as of 31 December 2021 and 31 December 2020 are presented in the table below:
31 December 2021
31 December 2020
Cash at bank
189.8
198.4
Cash in hand
8.9
6.4
198.7
204.8
Reconciliation of working capital changes as of 31 December 2021 and 31 December 2020 is presented in the table below:
2021
Balance sheet
change
Change in
investment
receivables
Change in
investment
liabilities
Exchange
differences
Working capital
changes
Change in trade and other receivables
(7.5)
-
-
(0.4)
(7.9)
Change in inventories
(6.6)
-
-
(0.5)
(7.1)
Change in other assets
1.1
-
-
(0.4)
0.7
Change in payables
and other liabilities
48.0
-
(5.6)
(3.8)
38.6
Change in other provisions and employee benefits
1.3
-
-
0.1
1.4
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
33
2020
Balance sheet
change
Change in
investment
receivables
Change in
investment
liabilities
Exchange
differences
Working capital
changes
Change in trade and other receivables
44.2
(20.0)
-
(3.9)
20.3
Change in inventories
3.4
-
-
(1.2)
2.2
Change in other assets
8.9
-
-
(2.2)
6.7
Change in payables
and other liabilities
(46.0)
-
16.6
4.9
(24.5)
Change in other provisions and employee benefits
8.9
-
-
-
8.9
23. Equity
Share capital
Share capital consists of ordinary shares. All shares issued are subscribed and fully paid. The par value of each share is
0.1 EUR. There were no changes in share capital of the Company in year 2021.
As of 31 December 2021 and as of 31 December 2020 the Company has 219 554 183 shares issued.
Holders of ordinary shares are authorized to receive dividends and have voting rights at the Group’s General Shareholders’
Meetings proportionate to their holdings.
There are no shares committed to be issued under options, employee share schemes and contracts for the sale of shares.
To the best of AmRest’s knowledge as of 31 December 2021 AmRest Holdings had the following shareholder structure:
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%
Artal International S.C.A.
11 366 102
5.18%
Nationale-Nederlanden OFE
9 358 214
4.26%
Aviva OFE
6 843 700
3.12%
Other Shareholders
44 782 407
20.40%
* FCapital Dutch B. V. is the sole shareholder of FCapital Lux (holding directly 56 509 547 AmRest shares) and the subsidiary of Finaccess
Capital, S.A. de C.V. Grupo Finaccess SAPI de CV is the direct majority shareholder of Finaccess Capital, S.A. de C.V. and a subsidiary of
Grupo Far-Luca, S.A. de C.V. The direct majority shareholder of Grupo Far-Luca, S.A. de C.V., Mr. Carlos Fernández González, is a member of
AmRest’s Board of Directors.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
34
Reserves
The structure of Reserves is as follows:
2021
Share
premium
Employee
options
unexercised
Employee
options
exercised
Treasury
shares
Hedges
valuation
Transactions
with NCI
Total
Reserves
As of 1 January
236.3
13.9
(39.1)
(6.5)
(8.2)
(26.3)
170.1
Net investment hedges
-
-
-
-
(1.6)
-
(1.6)
Income tax related to net investment hedges
-
-
-
-
0.3
-
0.3
Total comprehensive income
-
-
-
-
(1.3)
-
(1.3)
Transaction with non-controlling interests
-
-
-
-
-
(4.3)
(4.3)
Total transactions with non-controlling interests
-
-
-
-
-
(4.3)
(4.3)
Purchases of treasury shares
-
-
-
-
-
-
-
Share based payments
Value of disposed treasury shares
-
-
(2.5)
2.5
-
-
-
Employee stock option plan – value of employee benefits exercised in the period
-
-
-
-
-
-
-
Employee stock option plan – proceeds from employees for transferred shares
-
-
0.2
-
-
-
0.2
Employee stock option plan – reclassification of exercised options
-
(0.7)
0.7
-
-
-
-
Employee stock option plan – change in unexercised options
-
0.3
-
-
-
-
0.3
Change of deferred tax related to unexercised employee benefits
-
0.6
-
-
-
-
0.6
Total share based payments
-
0.2
(1.6)
2.5
-
-
1.1
Total distributions and contributions
-
0.2
(1.6)
2.5
-
-
1.1
As of 31 December
236.3
14.1
(40.7)
(4.0)
(9.5)
(30.6)
165.6
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
35
2020
Share
premium
Employee
options
unexercised
Employee
options
exercised
Treasury
shares
Hedges
valuation
Transactions
with NCI
Total
Reserves
As of 1 January
236.3
13.9
(39.0)
(7.5)
0.9
(26.3)
178.3
Net investment hedges
-
-
-
-
(10.9)
-
(10.9)
Income tax related to net investment hedges
-
-
-
-
1.8
-
1.8
Total comprehensive income
-
-
-
-
(9.1)
-
(9.1)
Purchases of treasury shares
-
-
-
-
-
-
-
Share based payments
Value of disposed treasury shares
-
-
(1.0)
1.0
-
-
-
Employee stock option plan – value of employee benefits exercised in the period
-
-
0.1
-
-
-
0.1
Employee stock option plan – proceeds from employees for transferred shares
-
-
0.1
-
-
-
0.1
Employee stock option plan – reclassification of exercised options
-
(0.7)
0.7
-
-
-
-
Employee stock option plan – change in unexercised options
-
2.9
-
-
-
-
2.9
Change of deferred tax related to unexercised employee benefits
-
(2.2)
-
-
-
-
(2.2)
Total share based payments
-
-
(0.1)
1.0
-
-
0.9
Total distributions and contributions
-
-
(0.1)
1.0
-
-
0.9
As of 31 December
236.3
13.9
(39.1)
(6.5)
(8.2)
(26.3)
170.1
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
36
Share premium
This item reflects the surplus over the nominal value of the share capital increase and additional contributions to equity
without issue of shares made by shareholders prior to becoming a public entity. There were no transactions within share
premium in 2021.
Treasury shares
As of 31 December 2021 the Group had 376 240 treasury shares for a total purchase value of EUR 4.0 million, presented
as treasury shares within “Reserves” under equity.
Transactions with NCI
This item reflects the impact of accounting for transactions with non-controlling interests (NCI).
The following key transactions were recognised in 2021:
Transactions
with NCI
Non-
controlling
interest
Total Equity
Acquisition of non-controlling interests in Sushi Shop Group
(4.3)
0.3
(4.0)
Dividends for non-controlling shareholders
-
(1.3)
(1.3)
Share capital increase in Amrest Kavezo Kft
-
0.2
0.2
Total transactions with non-controlling interests
(4.3)
(0.8)
(5.1)
The following key transactions were recognised in 2020:
Transactions
with NCI
Non-
controlling
interest
Total
Equity
Dividends for non-controlling shareholders
-
(0.8)
(0.8)
Total transactions with non-controlling interests
-
(0.8)
(0.8)
Hedges valuation
The Group is exposed to foreign currency risk associated with the investment in its foreign subsidiaries, which is managed
by applying net hedge investment strategies.
In 2018 AmRest Holdings assigned its PLN 280 million external borrowing as a hedging instrument in a net hedge for its
Polish subsidiaries. Following scheduled debt amortisation repayment, the net investment hedge has been decreased to
PLN 240 million from the end of December 2020.
AmRest Sp. z o.o., a Polish subsidiary, with PLN as functional currency, is a borrower of external EUR financing. A bank
loan of EUR 220 million has been hedging the net investment in its EUR subsidiaries in 2019 and through December 2021.
From there on, following amortisation repayment, the net investment hedge has been decreased to EUR 176 million.
Following a change in presentation currency of the Group from PLN to EUR, AmRest Sp. z o.o. remains exposed to the
foreign currency risk between the functional currency of its net investment in its EUR investments and its own functional
currency (PLN). These different functional currencies create a genuine economic exposure to changes in fair values in the
consolidated financial statements of the Group.
For all net investment hedges, exchange gains or losses arising from the translation of liabilities that are hedging net
investments are charged to equity in order to offset gains or losses on translation of the net investment in subsidiaries.
During the year ended 31 December 2021 and 2020 hedges were fully effective.
Translation reserves
The balance of translation reserves depends on the changes in the foreign exchange rates. This parameter is out of control
of Group.
Total change in translation reserves in year 2021 amounted to EUR 12.5 million. The most significant impact on that balance
had a change in Russian ruble in the amount of EUR 5.1 million, Chinese renminbi of EUR 4.6 million and Czech crown of
EUR 2.1 million. Total change in translation reserves in year 2020 amounted to EUR (19.2) million. The most significant
impact on that balance had a change in Russian ruble to EUR (20.5) million, Polish zloty to EUR 8.6 million, Hungarian
forint to EUR (5.6) million and Czech crown to EUR (1.6) million.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
37
Non-controlling interest
Key elements of non-controlling interests are presented in the table below:
31 December 2021
31 December 2020
AmRest Coffee Sp. z o.o.
(0.4)
(0.1)
SCM Sp. z o.o.
2.8
2.5
AmRest Coffee s.r.o.
3.9
3.3
AmRest Kávézó Kft
0.3
0.2
AmRest d.o.o.
1.1
0.6
SCM s.r.o.
1.0
0.6
Sushi Shop Group
0.1
(0.2)
Non-controlling interests
8.8
6.9
24. Dividends paid and received
In the period covered by these consolidated financial statements the Group has paid a dividend to non-controlling interest
of SCM sp. z o.o. amounting to EUR 1.3 million (PLN 5.9 million).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
38
25. Non-controlling interests
At 31 December 2021 and 31 December 2020 the summarised financial information for each subsidiary that has non-controlling interests is as follows:
Summarised balance sheet
31 December 2021
AmRest Coffee s.r.o.
AmRest Kávézó Kft
AmRest Coffee Sp. z
o. o.
SCM
Sp. z o.o.
SCM
s.r.o.
AmRest
d.o.o.
Sushi Shop
Group
Current assets
6.8
3.8
1.3
7.3
4.2
1.2
0.4
Current Liabilities
7.5
4.4
8.8
3.1
2.6
1.7
0.1
Total current net assets
(0.7)
(0.6)
(7.5)
4.2
1.6
(0.5)
0.3
Non-current assets
30.6
15.0
23.7
1.6
-
7.5
0.8
Non-current liabilities
17.8
9.9
14.5
0.5
-
2.4
0.8
Total non-current net assets
12.9
5.1
9.2
1.2
-
5.1
-
Net assets
12.1
4.4
1.7
5.4
1.6
4.6
0.3
31 December 2020
AmRest Coffee s.r.o.
AmRest Kávézó Kft
AmRest Coffee Sp. z
o. o.
SCM
Sp. z o.o.
SCM
s.r.o.
AmRest
d.o.o.
Sushi Shop
Group
Current assets
4.9
2.1
(1.8)
6.5
2.7
0.7
1.0
Current Liabilities
(7.6)
(5.1)
(9.1)
(2.5)
(1.9)
(3.7)
(1.2)
Total current net assets
(2.7)
(3.0)
(10.9)
4.0
0.8
(3.0)
(0.2)
Non-current assets
40.5
16.4
26.8
0.5
0.1
7.5
1.7
Non-current liabilities
(19.6)
(12.4)
(15.6)
(0.1)
-
(3.0)
-
Total non-current net assets
20.9
4.0
11.3
0.4
0.1
4.5
1.7
Net assets
18.2
1.0
0.3
4.4
0.9
1.5
1.5
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
39
Summarised income statement
year ended
31 December 2021
AmRest Coffee
s.r.o.
AmRest Kávézó
Kft
AmRest Coffee
Sp. z o.o.
SCM
Sp. z o.o.
SCM
s.r.o.
AmRest
d.o.o.
Sushi Shop
Group*
Total sales
24.9
14.9
26.9
19.5
18.1
9.5
1.0
Profit before tax
3.1
0.1
(1.7)
4.0
0.8
1.3
-
Income tax expense/income
0.5
0.3
-
0.8
0.2
0.2
(0.2)
Profit/loss for the period
2.6
(0.2)
(1.7)
3.2
0.6
1.1
0.2
Profit/loss for the period allocated to NCI
0.5
-
(0.3)
1.6
0.3
0.5
(0.1)
year ended
31 December 2020
AmRest Coffee
s.r.o.
AmRest Kávézó
Kft
AmRest Coffee
Sp. z o.o.
SCM
Sp. z o.o.
SCM
s.r.o.
AmRest
d.o.o.
Sushi Shop
Group
Total sales
18.5
10.2
18.9
15.6
10.1
6.5
7.2
Profit before tax
(2.1)
(3.7)
(8.1)
3.7
0.1
(1.1)
(1.5)
Income tax expense/income
0.2
-
0.4
(0.8)
(0.2)
0.2
-
Profit/loss for the period
(1.9)
(3.7)
(7.7)
2.9
(0.1)
(0.9)
(1.4)
Profit/loss for the period allocated to NCI
(0.3)
(0.7)
(1.4)
1.4
-
(0.4)
(0.4)
* On 31 August 2021 Sushi Shop Luxembourg SARL has acquired 14% of shares of Sushi House SA and Sushi Shop Belgique SA has acquired 45.20% of shares of Sushi Shop Louise SA. On this day Sushi Shop
Luxembourg SARL and Sushi Shop Belgique SA have become sole shareholders of Sushi House SA and Sushi Shop Louise SA accordingly. Summarised income statement of Sushi House SA and Sushi Shop
Louise SA is presented till acquisition of non-controlling interests shares i.e. till 31 August 2021.
There are no significant restrictions on the possibility of access to the assets or their use and settlement of obligations for the subsidiaries having a non-controlling interest.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
40
26. Earnings per share
As of 31 December 2021 and 2020 the Company has 219 554 183 shares issued.
Table below presents calculation of basic and diluted earnings per ordinary share for the year 2021 and 2020.
Basic EPS is calculated by dividing net profit attributable to shareholders of the parent by the weighted average number of
ordinary shares outstanding during the year (including treasury shares, vested options under share based programs,
number of shares to be transferred as a consideration for acquisition).
Diluted EPS is calculated by dividing net profit attributable to shareholders of the parent by the weighted average number
of ordinary shares outstanding during the year, adjusted by the weighted average number of ordinary shares that would be
issued on conversion of all dilutive potential ordinary shares into ordinary shares (unvested options for open share based
payments programs).
EPS calculation with the effect of share split
31 December
2021
31 December
2020
Net profit attributable to shareholders of the parent (EUR millions)
32.9
(182.0)
Weighted average number of ordinary shares for basic EPS (in thousands of shares)
219 352
219 169
Weighted average number of ordinary shares for diluted EPS (in thousands of shares)
219 852
219 346
Basic earnings per ordinary share (EUR)
0.15
(0.83)
Diluted earnings per ordinary share (EUR)
0.15
(0.83)
Reconciliation of weighted-average number of ordinary shares for basic EPS:
Weighted-average number of ordinary shares
in thousands of shares
31 December
2021
31 December
2020
Shares issued at the beginning of the period
219 554
219 554
Effect of treasury shares held
(497)
(640)
Effect of share options vested
295
255
Weighted average number of ordinary shares for basic EPS
219 352
219 169
Reconciliation of weighted-average number of ordinary shares for diluted EPS:
Weighted-average number of ordinary shares for diluted EPS
in thousands of shares
31 December
2021
31 December
2020
Weighted-average number of ordinary shares for basic EPS
219 352
219 169
Effect of share options unvested
500
177
Weighted average number of ordinary shares for diluted EPS
219 852
219 346
At 31 December 2021, 9 599 thousand of options were excluded from the diluted weighted-average number of ordinary
shares calculation because their effect would have been anti-dilutive. At 31 December 2020, there were 16 917 thousand
of options with anti-dilutive effect.
27. Borrowings
Long-term
31 December 2021
31 December 2020
Syndicated bank loans
466.2
550.6
SSD
35.5
77.5
Other bank loans
40.2
48.4
541.9
676.5
Short-term
31 December 2021
31 December 2020
Syndicate bank loans
59.2
58.9
SSD
48.0
24.9
Other bank loans
15.5
10.5
122.7
94.3
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
41
Bank loans and bonds
Currency
Loans/Bonds
Effective interest rate
31 December 2021
31 December 2020
PLN
Syndicated bank loan
3M WIBOR+margin
105.6
116.2
EUR
Syndicated bank loan
3M EURIBOR+margin
419.8
493.3
EUR
Schuldscheinedarlehen
Bonds
6M EURIBOR/fixed +margin
83.5
102.4
EUR
Bank loans France
fixed
30.2
30.0
EUR
Bank loans Spain
fixed
25.3
26.2
RUB
Bank loan Russia
fixed
-
2.7
CZK
Bank loans Czech
Pribor + Margin
0.2
-
664.6
770.8
Syndicated bank loan
In December 2021 Group has signed an amendment to syndicated bank loan agreement providing an extension the
repayment of the loan.
Based on the extended agreement, the amounts of the facilities A, B, E and F are equal to the outstanding amounts of
Credit facilities, after the scheduled repayments in September 2020 and September 2021, this is EUR 352mln and PLN
464mln. The repayment schedule is 10% on each 30 September anniversary of the next three years and the remaining
amount on 31 December 2024. The Revolving facility D is available in the amount of up to PLN 450mln and due on 31
December 2024.
As of December 31 2021, following extension signed on 13 December 2021, syndicated bank financing originated in 2017,
with further amendments, accounts for the majority of AmRest debt. Details of bank financing are as follows:
• Signing date: 5 October 2017,
• Final repayment date: 31 December 2024,
• Joint Borrowers: AmRest Holdings SE, AmRest Sp. z o.o. and AmRest s.r.o (the “Borrowers”; AmRest Sp. z o.o. and
AmRest s.r.o are fully owned by AmRest Holdings SE),
• Lenders: Bank Polska Kasa Opieki S.A., Powszechna Kasa Oszczędności Bank Polski S.A., ING Bank Śląski Polska
S.A. and Česká spořitelna, a.s.
The available tranches, following amortised repayments made in Sept 2020 and Sept 2021:
Tranche(*)
Maximum
amount (million)
Date added
Purpose
A
EUR 200
October 2017
Refinancing of bank debt, general
corporate purposes
B
PLN 240
October 2017
C (fully repaid in Q1 2019)
CZK 0
October 2017
D
PLN 450
October 2017
E
PLN 224
June 2019
Refinancing of Polish bonds
F
EUR 152
October 2019
M&A, general corporate purposes
* Approximate total amount: EUR 550m
• Interest rates: Variable interest rates (3M Euribor/Wibor increased by a margin)
• Securities: submissions to execution from the Borrowers, guarantees from Group companies, pledge on shares of
Sushi Shop Group. Additional information presented in note 28.
• Uncommitted Tranche G in the amount of up to EUR 100m has been added to the financing
• Other information: AmRest is required to maintain certain ratios at agreed levels. In particular, net debt/adjusted
consolidated EBITDA is to be held below 3.5 and consolidated EBITDA/interest charge is to stay above 3.5. For both
ratios EBITDA is calculated without effect of IFRS 16. EBITDA as defined in finance agreements for the purpose of
calculating covenants was EUR 199 million for the year ended 31 December 2021. Additionally the Group is obliged
to hold at least EUR 50 million in cash or cash equivalents and undrawn credit lines. The covenants were met at 2021
YE.
For debt extension the Group performed, as required by IFRS 9, so called “10% test” and the qualitative analysis extension
conditions. The aim it to determine if transaction represents debt modification of extinguishment. Based on the analysis
made the Group concluded that the extension presents debt modification.
As such costs or fees incurred (EUR 1.7 million) adjust the carrying amount of the liability and will be amortised over the
remaining term of the modified liability. The amortised cost of the financial liability was recalculated by computing the
present value of estimated future contractual cash flows that discounted at the financial instrument's original effective
interest rate. The consequent adjustment was recognised immediately in profit or loss as loss on modification in amount of
EUR 6.5 million.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
42
Two other sources of AmRest financing are:
• Schuldscheinedarlehen (“SSD” – debt instrument under German law) issued by AmRest Holdings SE. The table
below presents all SSD issues and their maturities after repayments done 2021:
Issue date
Amount (EUR million)
Interest rate
Maturity date
Purpose
7 April 2017
14.0
Fixed
7 April 2022
Refinancing, general
corporate purposes
7 April 2017
6.0
Fixed
5 April 2024
3 July 2017
33.0
Fixed
1 July 2022
3 July 2017
20.0
Fixed
3 July 2024
3 July 2017
9.5
Variable
3 July 2024
As of 31 December 2021, payables concerning SSD issued amount to EUR 83.5 million (including EUR 1.0 million of
interests).
• State supported loans taken on by Spanish and French subsidiaries in Q2 2020 and guaranteed by the
governments in 70% and 90%, respectively. In particular, Restauravia Food SL and Pastificio Service S.L.U. were
granted EUR 22.5 million each and Sushi Shop Restauration SAS received EUR 20 million and AmRest SAS Opco
SAS EUR 10m. As of December 31 2021, EUR 17,7m is still available for drawing for the Spanish entities.
Following certain amendments, final maturities for the French loans fall in 2023 and for the Spanish loans in 2023,
2025 and 2026.
As of 31 December 2021, payables concerning State Supported Loans amount to EUR 55.7 million.
The effective interest rates are similar to the market rates for specific borrowings. Therefore, the fair value of the liabilities
presented in this note does not differ significantly from their carrying amounts.
State supported loans taken by the Group companies
Country
Entities
Effective interest rate
State
guarantee
Total amount
granted
Available
at YE
Maturity
Spain
Restauravia Food SL,
Pastificio Service, S.L.U
Fixed
70%
45.0
17.7 *
3-5 years
France
Sushi Shop Restauration
SAS, AmRest Opco SAS
Fixed
90%
30.0
0
3 years
Czechia
SCM s.r.o
Pribor + Margin
90%
1.2
1.0
1 year
76.2
18.7
* Not including the part revolving (paid) EUR 2 million, without the renewed borrowing.
The maturity of long- and short-term loans as of 31 December 2021 and 2020 is presented in the note 35.
The Group has the following unused, awarded credit limits as of 31 December 2021 and 31 December 2020:
31 December 2021
31 December 2020
With floating interest rate
- expiring beyond one year (tranche D)
33.0
1.5
- Bank loans Spain
17.7
18.8
50.7
20.3
The table below presents the reconciliation of the debt:
2021
Bank loans
SSD
Total
As of 1 January
668.4
102.4
770.8
Payment
(88.6)
(18.4)
(107.0)
Loan taken/ new contracts
1.1
-
1.1
Accrued interests
15.0
2.2
17.2
Payment of interests
(14.7)
(2.7)
(17.4)
Loan forgiven
(2.7)
-
(2.7)
Result on debt modification and extension fees
4.8
-
4.8
Exchange differences
(2.2)
-
(2.2)
As of 31 December
581.1
83.5
664.6
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
43
2020
Bank loans
SSD
Total
As of 1 January
617.8
102.3
720.1
Payment
(80.9)
-
(80.9)
Loan taken/ new contracts
139.6
-
139.6
Accrued interests
18.2
2.2
20.4
Payment of interests
(17.3)
(2.1)
(19.4)
Exchange differences
(9.0)
-
(9.0)
As of 31 December
668.4
102.4
770.8
28. Collateral on borrowings
The Borrowers (AmRest Holding SE, AmRest Sp. z o.o. and AmRest s.r.o.) are jointly and severally responsible for paying
the liabilities resulting from credit agreements. Group companies – AmRest Kaffee Sp. z o.o., AmRest Coffee Deutschland
Sp. z o.o. & Co.KG, AmRest DE Sp. z o.o. & Co.KG, AmRest KFT, OOO AmRest, OOO Chicken Yug, AmRest Coffee
SRL, AmRest Tag S.L.U., Restauravia Food S.L.U., Pastificio Service S.L.U – granted sureties to the financing banks.
These companies guarantee that the Borrowers will discharge their obligations following from the credit agreement until
the loan is repaid, i.e. 30 September 2022 however not later than 30 April 2026. Additionally, pledge on shares of Sushi
Shop Group has been established as security for the bank financing.
29. Employee benefits and share based payments
The Group established long-term incentive plans in order to bind a portion of managers’ and executives’ remuneration with
the Group’s market value. During year 2021, the Group had the share-based payment arrangements according to six share
option plans. Part of options in the Plan 2 is accounted as cash-settled due to the availability of cash exercise method upon
the choice of an employee. All other options in the 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.
Up to November 2014 the exercise method was in equity instruments. In November 2014, the then existing Supervisory
Board of the Company approved a change of regulations by adding net cash settlement of option value (employee decides
about settlement method). Due to the above changes, Plan 2 comprised both equity-settled options and cash-settled
options.
In 2015 a change in regulations eliminated a possibility of option settlement with cash method for the grants after 8
December 2015. Furthermore, a group of employees made a unilateral statement about resignation from the cash
settlement possibility in relation to option also granted in previous periods. As a result of the modification of some options
from cash-settled to equity-settled, in 2017 a reclassification in amount of EUR 0.5 million was accounted from liabilities
into equity.
Plan 4 – Stock Option Plan 2017
In January 2017 the Group introduced a new share-based Stock Option Plan. The number of options granted, employees
awarded and granting dates were initially determined by the then existing Management Board (current Executive Team),
however the number of options was limited to 750,000 options. The Granting Period was set between 1 January 2017 and
31 December 2019. The option exercise price will be in principle equal to the market price of the Company’s shares as of
the date of granting the option, and the vesting period will be 3 to 5 years. There are no cash settlement alternatives.
In December 2018 the Board of Directors of the Company (who took over Management Board faculty on this matter
following the transfer of domicile of the Company from Poland to Spain) resolved to adjust the share-based plans of the
Company so they can also be executed through the Spanish Stock Exchanges, where the Company’s shares started
trading on 21 November 2018.
Plan 5 – Management Incentive Plan 2017
In January 2017 the Group introduced a new share-based Management Incentive Plan, offered to selected employees.
The whole number of shares which were attributed to the options was determined by the Board of Directors, however, it
may not exceed 1,000,000 shares. In accordance with the provisions of the Plan, when requested by management the
Board of Directors, was entitled to determine the employees authorized to participate in the Plan, the number of options
granted and the dates for their granting among other issues. The Granting Period was set between 1 January 2017 and 31
December 2019. The option initial exercise price was in principle equal to the market price of the Company’s shares as of
the date of First Grant. The exercise price shall increase on 1st, 2nd and 3rd anniversary by 11%. The vesting period lasts
3 to 5 years. There are no cash settlement alternatives.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
44
Plan 6 – Stock Option Plan 2020
In 2020 the Group introduced a share-based Stock Option Plan, which is an extension of the regulations introduced in the
Stock Option Plan 2017. The plan is effective for an additional period of one year exclusively during the 2020 financial year
under their exact same terms and conditions with the sole exception of the Exercise Price mentioned in the table below.
The number of options granted, employees awarded and granting dates were initially determined by the Executive Team.
In 2020 the number of options was limited to 3.6 million options. The option exercise price will be in principle equal to the
market price of the Company’s shares as of the date of granting the option, and the vesting period will be 3 to 5 years.
There are no cash settlement alternatives.
Plan 7 – Management Incentive Plan 2020
In 2020 the Group introduced a share-based Management Incentive Plan, offered to selected employees, which is an
extension of the regulations introduced in the Management Incentive Plan 2017. The plan is effective for an additional
period of one year exclusively during the 2020 financial year under their exact same terms and conditions with the sole
exception of the Exercise Price mentioned in the table below. The whole number of shares which were attributed to the
options was determined by the Board of Directors. In 2020 the number of options was limited to 4.65 million options. In
accordance with the provisions of the Plan, when requested by management the Board of Directors, was entitled to
determine the employees authorized to participate in the Plan, the number of options granted and the dates for their granting
among other issues. The option initial exercise price was in principle equal to the market price of the Company’s shares as
of the date of First Grant. The exercise price shall increase on 1st, 2nd and 3rd anniversary by 11%. The vesting period
lasts 3 to 5 years. There are no cash settlement alternatives.
Plan 8 – Long Term Incentive Plan 2021
In 2021 the Group introduced a new Long-Term Incentive (LTI) Program which is addressed to members of the
management team and other relevant personnel of the Group. LTI substitutes previous Management Incentive and Stock
Option Plans functioning at AmRest, keeping in place the already granted stock options. Participants of the new LTI will
have the opportunity to receive AmRest shares. The number of shares to be received will be linked to the Group’s
performance (realization of Global EBITDA 2021-2023). The LTI grants will vest according to a 5-year agenda (60% after
3rd year, 20% after 4th year, 20% after 5th year). Once vested, the LTI rights will be evaluated and converted (if applicable)
into shares, while the shares will be transferred to the participant’s brokerage account. There are no cash settlement
alternatives. On 23
rd
December 2021 the Board of Directors approved the grant on the basis of the above mentioned
assumptions. The fair value of the grant calculated in December 2021 amounted to 7.0 million EUR. The cost related to
period between the grant date and the end of the financial year amounts to 0.2 million EUR.
The terms and conditions for the share options outstanding as of 31 December 2021 are presented in the 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
1-5 years, 20% per annum
10 years
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
5.35
Equity
Plan 4 - SOP
May 30, 2017
3-5 years, 60% after 3rd
year, 20% after 4th and
5th year
10 years
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
9.62
Equity
Plan 5 - MIP
March 15, 2017
3-5 years, 33% p.a.
10 years
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
12.10
Equity
Plan 6 – SOP
July 13, 2020
3-5 years, 60% after 3rd
year, 20% after 4th and
5th year
10 years
4.99
Equity
October 1, 2020
5.78
Equity
Plan 7 - MIP
3-5 years, 33% p.a.
10 years
February 10, 2020
15.10
Equity
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
45
Grant date
Terms and conditions for
vesting of the options
The maximum term of
options
Option exercise price in
EUR
Method of settlement
October 1, 2020
7.90
Equity
February 1, 2021
7.71
Equity
March 23, 2021
6.08
Equity
May 1, 2021
10.62
Equity
*For some options only the equity method is applicable, as some employees can decide upon the settlement method, as disclosed in Plan 2
description above.
Options vest when the terms and conditions relating to the period of employment are met. The Plans do not provide any
additional market conditions for vesting of the options.
In the table below we present the number and weighted average of the exercise prices (WAEP) of, and movements in, the
options from all plans during the year ended 31 December 2021 and 2020:
Number of option 2021
WAEP in EUR
(before
indexation)
Plan 7
Plan 6
Plan 5
Plan 4
Plan 2
At the beginning of the period
8,68
3 350 000
3 204 500
3 283 334
6 779 650
932 402
Granted during the period
7,76
600 000
0
0
0
0
Exercised during the period
4,26
0
(5 000)
0
(3 300)
(367 650)
Forfeited during the period
8,96
(1 550 000)
(285 880)
(1 683 334)
(976 950)
(19 000)
Outstanding at the end of the
period
8,63
2 400 000
2 913 620
1 600 000
5 799 400
545 752
- including exercisable as
of the end of the period
9,05
0,00
0,00
966 667
2 219 460
545 752
Number of option 2020
WAEP in EUR
(before
indexation)
Plan 7
Plan 6
Plan 5
Plan 4
Plan 2
At the beginning of the period
8.52
-
-
5 400 000
6 988 850
1 150 266
Granted during the period
7.07
3 350 000
3 204 500
-
-
-
Exercised during the period
7.04
-
-
(166 666)
-
(159 554)
Forfeited during the period
10.15
-
-
(1 950 000)
(209 200)
(58 310)
Outstanding at the end of the
period
8.68
3 350 000
3 204 500
3 283 334
6 779 650
932 402
- including exercisable as
of the end of the period
6.36
-
-
-
938 730
722 562
The weighted average share price at the dates of exercise of the options was EUR 6.79 in 2021 and EUR 6.98 in 2020.
The weighted average remaining contractual life for the share options outstanding as of 31 December 2021 was 7.62 years
(2020: 8.20 years).
Measurement
The fair value of the equity instruments has been measured using numerical method for solving differential equations by
approximating them with difference equations, called finite difference method. The fair value of the cash-settled options
has been measured using the Black-Scholes formula. The fair value of the options as of the grant date has been determined
using the support of an external actuary.
The fair value of the options granted during the period, as of the grant date, amounted as described below. It was
determined on the basis of the following parameters:
Plan
Average fair
value of
option as of
grant date
Average
share price at
the grant date
Average
exercise
price
Expected
volatility
Expected
term to
exercise of
options
Expected
dividend
Risk-free
interest rate
2021
Plan 7 (MIP)
EUR 1.07
EUR 5.68
EUR 7.76
35%
5 years
-
2%
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%
The expected life of the options is based on historical data and current expectations and is not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period
similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
46
Share-based payments costs and liabilities
The Group recognises accrual for equity-settled options in reserve capital. The amounts as of 31 December 2021 and 31
December 2020 are presented in a table below:
31 December 2021
31 December 2020
Reserve capital - Plan 2
1.2
1.8
Reserve capital - Plan 4
9.5
8.3
Reserve capital - Plan 5
2.9
5.2
Reserve capital - Plan 6
0.6
0.1
Reserve capital - Plan 7
0.6
0.2
14.8
15.6
The Group recognises liability for cash settled options. The amounts as of 31 December 2021 and 31 December 2020
are presented in a table below:
31 December 2021
31 December 2020
Liability for Plan 2
0.1
0.1
Other employee benefits liabilities
0.1
0.2
0.2
0.3
The costs recognised in connection with the plans relating to incentive programs for the years ended
31 December 2021 and 2020 respectively are presented below:
2021
2020
Employee stock option plan 2
0.3
0.1
Employee stock option plan 4
1.4
3.4
Employee stock option plan 5
(2.3)
(1.2)
Employee stock option plan 6
0.5
0.1
Employee stock option plan 7
0.4
0.2
0.3
2.6
Pension, health care and other contributions
The costs recognised in connection with the employee benefits contributions for the years ending on 31 December 2021
and 31 December 2020 respectively are presented below:
2021
2020
Pension, health care contributions and other
109.9
98.2
Apart from those specified above, there are no other liabilities and costs in respect of employee benefits.
30. Provisions
Changes in the balance of provisions are presented in the table below:
2021
As of
1 January
Increased during
the year
Released during
the year
Used during the
year
F/X
differences
As of
31 December
Asset retirement obligation
9.7
0.2
-
(0,3)
-
9.6
Court and legal
proceedings
6.1
0.6
(1.1)
(0.2)
-
5.4
Provision for tax risks
0.4
0.7
-
(0.3)
-
0.8
Franchise and
development agreements
risks
11.0
1.0
-
-
-
12.0
Other provisions
4.8
1.8
(0.9)
(0.2)
0.1
5.6
Total
32.0
4.3
(2.0)
(1.0)
0.1
33.4
2020
As of
1 January
Increased during
the year
Released during
the year
Used during the
year
F/X
differences
As of
31 December
Asset retirement obligation
10.1
0.9
(0.2)
(1.1)
-
9.7
Court and legal
proceedings
3.7
3.5
(0.1)
(0.8)
(0.2)
6.1
Provision for tax risks
0.4
0.3
(0.4)
-
0.1
0.4
Franchise and
development agreements
risks
8.0
5.0
-
(2.0)
-
11.0
Other provisions
0.6
4.2
-
-
-
4.8
Total
22.8
13.9
(0.7)
(3.9)
(0.1)
32.0
Franchise agreements and development agreements
Group restaurants are operated under franchise and development agreements with YUM! and subsidiaries of YUM!, Burger
King Europe GmbH, Starbucks Coffee International, Inc. In accordance with these agreements, the Group is obliged to
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
47
meet certain development commitments as well as maintain the identity, reputation and high operating standards of each
brand.
If the Group believes the development commitments will not be attained the respective provision are recognized.
As of the end of previous balance sheet date, the Group recognised provisions for resetting master-franchise agreements
regarding Pizza Hut signed for the markets: France, CEE, Germany, and Russia, as well as provisions related to franchise
and development agreements with YUM! and subsidiaries of YUM!., Burger King Europe GmbH, Starbucks Coffee
International, Inc. The estimation was updated during the reporting period.
Provision for court and legal proceedings
Periodically, the Group is involved in disputes and court proceedings resulting from the Group’s on-going operations. As
presented in the table above, as of the balance sheet, the Group recognised a provision for the costs of court proceedings
which reflects the most reliable estimate of the probable losses expected as a result of the said disputes and legal
proceedings.
Provision for tax liabilities
The Group operates in numerous markets with different and changing tax rules and additionally realises its growth within
new investments and often has to decide to create or modify the value of tax liability provision. During recognition or
modification of such provisions all available information, historical experience, comparison and best estimates are used.
Asset retirement obligation
The Group recognised a provision for costs of future asset restorations mainly on the acquisition of German and French
subsidiaries. The provision consists of expected costs at the end of rental agreement. The provision would be used for
renovation work needed to restore rented properties, as required by rental agreements.
31. Tax risks and uncertain tax positions
Tax inspections in AmRest Sp. z o.o.
a) On 28 July 2016 a tax inspection began in AmRest Sp. z o.o. regarding VAT returns for 2014. On
11 September 2017 the Company received the decision issued by the Head of the Lower Silesia Tax Office (“Head”),
which questioned the correctness of the output VAT settlement for a part of operational sales revenues. The Head
claimed the tax liability amounting to PLN 4.3 million (EUR 1.0 million) and the amount of the return unduly received
of PLN 10.2 million (EUR 2.3 million). On 22 September 2017 the Company submitted an appeal to the second
instance (Tax Administration Chamber) referring to the above decision.
On 18 February 2019 AmRest Sp. z o.o. received the information from the Tax Administration Chamber that the
proceedings aimed at annulment of the final decision regarding VAT returns for 2014 issued by Tax Administration
Chamber has been opened due to the severe breach of law done by the Chamber in the decision. On 25 June 2019
AmRest Sp. z o.o. received the notification that the proceedings related to the annulment of the final decision covering
VAT for 2014 have been suspended.
On 20 July 2021 AmRest sp. z o.o. has received the notification in respect to opening the suspended proceedings
and on 14 September 2021 the Company received the decision based on which the proceedings related to the
annulment of the final decision covering VAT for 2014 have been cancelled.
b) On 30 July 2018 a tax inspection began at AmRest Sp. z o.o. regarding VAT returns for the period December 2017 –
March 2018. On 29 August 2018 the Company received the tax protocol and on 12 September 2018 the Company
submitted its reservations. On 20 November 2018 tax office initiated tax proceeding. On
23 July 2019 AmRest Sp. z o.o. received the notification that the proceedings are suspended due to request for
preliminary ruling submitted by Polish Supreme Administrative Court to Court of Justice of European Union.
Despite the lack of a final decision from the tax office, in August 2018 Company received from the tax office cash
payments for VAT receivables related to the described VAT settlements (with respective interest).
On 19 July 2021 AmRest sp. z o.o. has received the notification in respect to opening the suspended tax inspection
covering VAT returns for the period December 2017 – March 2018. As of the date of publication of this Report the
proceedings have not concluded.
c) On 12 December 2018 a tax inspection started at AmRest Sp. z o.o. regarding VAT returns for the period April –
September 2018. On 28 February 2019 AmRest Sp. z o.o. received the tax protocol issued by the Head of the Lower
Silesia Tax Office which questioning that VAT settlements for the period. On 14 March 2019 the company filed the
reservations to this protocol. On 25 March 2019 the company received the response to the submitted reservations.
The Head of the Lower Silesia Tax Office upheld the allegations described in the protocol. On 1 August 2019 AmRest
Sp. z o.o. received the notification that the proceedings are suspended due to request for preliminary ruling submitted
by Polish Supreme Administrative Court to Court of Justice of European Union.
Despite the lack of a final decision from the tax office, in January 2020 Company received from the tax office cash
payments for VAT receivables related to the described VAT settlements (with respective interest).
On 28 July 2021 AmRest sp. z o.o. has received the notification from the Polish tax authorities in respect to opening
the suspended tax inspection covering VAT returns for the period April – September 2018. . As of the date of
publication of this Report the proceedings have not concluded.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
48
d) On 17 May 2019 AmRest Sp. z o.o. received the notification that tax inspections have been initiated regarding the
VAT settlements for the period from October 2018 to March 2019 (six separate tax inspections for every month). In
23 August 2021 AmRest sp. z o.o. has received the notification stating that tax inspections had evolved into tax
proceedings. As of the date of publication of these consolidated financial statements, the proceedings have not
concluded.
The Group analyzed the risk with regards to ongoing tax inspections related to VAT and assessed that it is more probable
than not that the tax authority will finally accept the Company’s VAT tax filings. The same conclusions have been taken
considering external tax advisors. In reference to IFRIC 23 point 10, the Board of Directors’ opinion states that there is no
legal obligation for any cash outflows and there is no basis for the assessment of a higher probability that the risk would
materialize. Therefore, the Group decided that as of 31 December 2021 and as of the date of publication of these
Consolidated Annual Financial Statements, there are no obligating events, so there are no grounds for booking the
provisions for the aforementioned risk.
e) On 23 February 2018 a tax inspection began at AmRest Sp. z o.o. regarding CIT for 2016. On 26 November 2019
AmRest Sp. z o.o. received the decision questioning tax settlements in respect of recognition of interest cost on loans
received from AmRest Finance Zrt. PLN 19.8 million (EUR 4.7 million) and claiming additional income amounted to
PLN 15.2 million (EUR 3.6 million) resulting from VAT refund received in 2016. The said decision is not final and
enforceable, ie. AmRest Sp. z o.o. was not obliged to pay the tax assessed by the Tax Authorities upon obtaining
respective decision. The Company disagreed with conclusions presented in the decision and appealed against it on
10 December 2019.
On 13 May 2021 the Company received the decision of second instance which cancelled the decision of first instance.
The proceedings are concluded and the Company has not been obliged to pay any additional tax liability for 2016.
f) On 26 November 2018 a tax inspection began at AmRest Sp. z o.o. regarding CIT for 2013. On 26 November 2019
AmRest Sp. z o.o. received the decision questioning tax settlements in respect of recognition of interest cost on loans
received from AmRest Finance Zrt. PLN 0.2 million (EUR 0.05 million) and claiming additional income amounted to
PLN 7.5 million (EUR 1.8 million) resulting from VAT refund received in 2013. The said Decision is not final and
enforceable, ie. AmRest Sp. z o.o. was not obliged to pay the tax assessed by the Tax Authorities upon obtaining
respective decision. The Company disagreed with conclusions presented in the decision and appealed against it on
5 December 2019.
On 30 March 2021 AmRest sp. z o.o. received the final decision for 2013 CIT settlements issued by the Head of the
Lower Silesian Tax and Customs Office which upheld the decision of the first instance in respect of the CIT levied on
VAT refund for this year - due to the fact that the decision was enforceable the Company paid outstanding tax liability
together with the interest. The Company did not agree with the decision and on 28 April 2021 filed the complaint to
the Local Administrative Court. As of the date of publication of this Report the proceedings have not concluded.
g) On 26 November 2018 a tax inspection began at AmRest Sp. z o.o. regarding CIT for 2014. On 26 November 2019
AmRest Sp. z o.o. received the decision questioning tax settlements in respect of recognition of interest cost on loans
received from AmRest Finance Zrt. amounted to PLN 78.0 million (EUR 18.5 million) and claiming additional income
amounted to PLN 2.1 million (EUR 0.5 million) resulting from VAT refund received in 2014. The said decision is not
final and enforceable, i.e. AmRest Sp. z o.o. was not obliged to pay the tax assessed by the Tax Authorities upon
obtaining respective decision. The Company disagreed with conclusions presented in the decision and appealed
against it on 5 December 2019.
On 30 March 2021 AmRest sp. z o.o. received the final decision for 2014 CIT settlements issued by the Head of the
Lower Silesian Tax and Customs Office, who disagreed with the decision of the first instance and cancelled the
proceedings.
Tax inspections in other Group companies
▪ In September 2016 AmRest Coffee Deutschland Sp. z o.o. & Co. KG (“Company”), identified the products that were
sold with an incorrectly applied VAT rate. This fact was presented to the tax officer who was responsible for the
inspection of periods prior to the acquisition of the business by AmRest. The Company undertook to correct the VAT
calculation for the periods not lapsed.
The corrective tax declarations were submitted and the outstanding tax liability was paid in July 2018. The Company
has filed amended VAT tax returns – based on the approach confirmed with the tax office - for the period from 2009
to 2015.
On 18 October 2018 the Company received a letter from the tax office extending the tax audit by including the financial
year 2016, during the course of which the acquisition of the Company by AmRest was completed. According to said
letter, the tax audit shall cover the following tax settlements: (1) separate and uniform determination of the income tax
base including trade tax base and tax losses, (2) VAT, (3) trade taxes, (4) separate determination of the trade tax loss
carryforwards, (5) separate and uniform determination of the withholding taxes and corporate income taxes. As of the
date of publication of these consolidated financial statements, the inspections related to 2013, 2014 and 2016 have
not concluded, however estimated outstanding tax liability was paid in October 2021.
▪ On 17 December 2020 the French Tax Administration started a tax control on Sushi Shop Group SAS entity, relating
to years 2018 and 2019. On 10 July 2021 the Company has accepted the rectification of tax result proposed by French
Tax Authority and has agreed to pay additional tax liability of EUR 0.3 million together with interest and the proceedings
has finished.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
49
▪ On 22 July 2019 Pastificio Service Service S.L. (as the taxpayer), Amrest Tag SL (as head of the Tax Group 539/11
during the tax audit period) and AmRest Holdings, SE (as the current head of the Tax Group 539/11) were notified of
the initiation of a tax audit, in regard to corporate income tax, for the fiscal years 2014 to 2017. This is a partial tax
audit, only referred to tax relief applied by Pastificio Service, SL in corporate income tax bases of 2014 to 2017, in
regard to the deductions related to certain intangible assets (i.e. patent box regimen).
On 22 March 2021 Pastificio Service S.L.U. (as the taxpayer), AmRest Tag S.L.U. (as head of the Tax Group during
the tax audit period) and AmRest Holdings SE (as the current head of the Tax Group) received the settlement
agreement from the tax office indicating the additional tax liability amounting to EUR 1.1 million, which was paid by
the taxpayer on 14 June 2021. However, the Company disagree with the tax authorities and on 22 April 2021 submitted
the economic-administrative claim and the allegations has been filed on 26 July 2021.
On 23 June 2021 Pastificio Service S.L.U. received notification of the start of an inspection relating to a municipal tax
(business activity tax) for the fiscal years 2018-2021. The tax inspection is related to the Pastificio's activity in the
Central Kitchen (Lleida).
▪ On 9 June 2021 AmRest Kft and on 14 June 2021 AmRest Kávézó Kft have received the notification letters in respect
to planned initiation of tax proceedings. Tax proceeding in AmRest Kft relates to all tax settlements for the period
2018-2019 and in AmRest Kávézó Kft for the year 2019. As of 31 December 2021 and as of the date of publication
of this Report tax proceedings have not concluded
In Group’s opinion there are no other material contingent liabilities concerning pending audits and tax proceedings, other
than those stated above.
32. Trade payables and other liabilities
Trade payables and other liabilities as of 31 December 2021 and 31 December 2020 cover the following items:
31 December 2021
31 December 2020
Trade payables
89.4
93.7
Accruals and uninvoiced deliveries
67.1
35.0
Employee payables
17.9
13.5
Employee related accruals
33.2
24.4
Accrual for holiday leave
12.3
15.0
Social insurance payables
13.7
15.2
Other tax payables
20.7
9.6
Investment payables
14.2
8.6
Contract liabilities – initial fees, loyaltee programs, gift cards
10.2
8.3
Deferred income
6.5
8.1
Other payables
5.6
11.5
Total trade payables and other liabilities
290.8
242.9
Information on average payment period to suppliers. Third additional provision, “Information requirement” of Law 15/2010
of July 5.
In accordance with the aforementioned Law, the following information corresponding to the Spanish companies of the
AmRest Group is disclosed:
2021
2020
Number of days:
Average payment period to suppliers
41.1
48.9
Ratio of payments
42.8
41.8
Ratio of outstanding invoices
26.2
107.9
Millions of EUR:
Total payments
154.4
138.9
Outstanding invoices
16.7
16.5
The payments to suppliers of the Spanish consolidated companies reflected in the above table are trade payables as they
relate to goods and services.
33. Future commitments and contingent liabilities
As in the previous reporting period, the Group’s future liabilities are derived mainly from the franchise agreements and
development agreements. Group restaurants are operated in accordance with franchise and development agreements with
YUM! and subsidiaries of YUM!, Burger King Europe GmbH, Starbucks Coffee International, Inc. In accordance with these
agreements, the Group is obliged to meet certain development commitments as well as maintain the identity, reputation
and high operating standards of each brand. Details of the agreements together with other future commitments have been
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
50
described in note 1 and 38d. As the COVID-19 pandemic restrictions impacted restaurants operation, the Group is
assessing its development plans.
Commitments regarding credit agreement are described in note 27 and note 28.
34. Transactions with related entities
Transactions with related parties are carried out in accordance with market regulations.
Group shareholders
As of 31 December 2021, FCapital Dutch B.V. was the largest shareholder of AmRest and held 67.05% of its shares and
voting rights, and as such was its related entity. No transactions with FCapital Dutch B.V. related parties were noted.
Transactions with key management personnel
The remuneration of the Board of Directors and Senior Management Personnel (key management personnel) paid by the
Group was as follows:
31 December 2021
31 December 2020
Remuneration of the members of the Board of
Directors
0.7
0.4
Remuneration of Senior Management Personnel:
- Remuneration received by the Senior Executives
3.3
3.5
- Gain on share-based renumeration systems
-
0.5
Remuneration of Senior Management Personnel
3.3
3.0
Total compensation paid to key management
personnel
4.0
4.4
Directors Remuneration Policy was approved at the general shareholders’ meeting held on 12 May 2021 and will remain
in force until 2023 unless the general shareholders’ meeting so resolves to amend or replace it. The fixed components
accrued during the year by the Directors have not changed with respect to the previous year except for the Executive
Chairman compensation package, which was first implemented in 2021 since the Chairman was granted executive powers
in November 2020, effective January 2021. In 2020, due to the exceptional circumstances caused by the COVID-19
pandemic, the Board of Directors lowered its remuneration by 50%.
The Group’s key management personnel participates in the employee share option plans (note 29). In the year ended 31
December 2021 the provision relating to the options decreased by EUR 4,5 million, due to a significant amount of forfeited
option. In the year ended 31 December 2020 the provision increased by EUR 1.1 million.
31 December 2021
31 December 2020
Number of options outstanding (pcs, after split)
4 071 333
6 572 333
Number of available options (pcs, after split)
912 000
445 933
Fair value of outstanding options as of grant date (EUR
millions)
5.4
9.9
As mentioned in note 29 in 2021 the Group introduced a new Long-Term Incentive (LTI) Program addressed to members
of the management team and other relevant personnel of the Group. The fair value of the abovementioned grant related to
key management personnel amounts to EUR 0.9 million.
As of 31 December 2020 and 2019, the Company had no outstanding balances with the key management personnel, apart
from accruals for annual bonuses payable in first quarter of the following year. As of 31 December 2021 and 2020 the
Company has not extended any advances to the Board of Directors or senior management personnel and had no pension
fund, life insurance or other such commitments with these parties, except for the share option plans detailed above and in
note 31. As of 31 December 2021 and 31 December 2020 there were no liabilities to former employees.
Conflicts of interest concerning the Board Directors
The Board Directors and their related parties have had no conflicts of interest requiring disclosure in accordance with article
229 of the Revised Spanish Companies Act.
Other related entities
There were no material transactions with other related entities in 2021. There were also no material receivables and
payables with other related entities as of 31 December 2021 and 31 December 2020.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
51
Employee information
The average headcount of full-time equivalent personnel, distributed by professional category, is as follows:
2021
2020
Board of Directors
7
7
Senior Executives
8
10
Other employees
46 465
46 096
Total
46 480
46 113
At year end the distribution by gender of Group personnel and the members of the board of directors is as follows:
31 December 2021
31 December 2020
Female
Male
Female
Male
Board of Directors
2
5
2
5
Senior Executives
-
8
-
9
Other employees
27 306
21 218
24 865
19 899
Total
27 308
21 231
24 867
19 913
35. Financial instruments
The following table shows the carrying amounts of financial assets and financial liabilities. The Group assessed that the
fair values of cash and cash equivalents, rental deposits, trade and other receivables, trade and other payables, as well
as current loans and borrowings and finance lease liabilities approximate their carrying amounts largely due to the short-
term maturities of these instruments. Fair values of non-current rental deposits, loans and borrowings and financial liabilities
immaterially differs from their carrying values. Trade and other receivables and liabilities presented below does not include
balance relating to taxes and employee settlements.
As of 31 December 2021 and 2020 the Group did not have equity instrument measured at fair value. There were no
transfers between fair value hierarchy levels in year 2021 and in year 2020.
Classification of key classes of financial assets and liabilities with their carrying amounts is presented in note below:
31 December 2021
Note
FVTPL
Financial assets at
amortised cost
Financial liabilities
at amortised cost
Financial assets not measured at fair value
Rental deposits
18
-
22.0
-
Trade and other receivables from clients
20
-
72.9
-
Cash and cash equivalents
22
-
198.7
-
Financial liabilities not measured at fair value
Loans and borrowings
27
-
-
581.2
SSD
27
-
-
83.5
Lease liabilities
14
-
-
822.9
Trade and other liabilities to suppliers
32
-
-
245.2
31 December 2020
Note
FVTPL
Financial assets
at amortised cost
Financial liabilities
at amortised cost
Financial assets not measured at fair value
Rental deposits
18
-
21.7
-
Trade and other receivables from clients
20
-
43.2
-
Cash and cash equivalents
22
-
204.8
-
Financial liabilities not measured at fair value
Loans and borrowings
27
-
-
668.4
SSD
27
-
-
102.4
Lease liabilities
14
-
-
761.4
Trade and other liabilities to suppliers
32
-
-
146.9
Risk management
The Group is exposed to several financial risks in connection with its activities, including: the risk of market fluctuations
(covering the foreign exchange risk and risk of changes in interest rates), risk related to financial liquidity and – to a limited
extent – credit risk. The risk management program implemented by the Group is based on the assumption of the
unpredictability of the financial markets and is used to maximally limit the impact of negative factors on the Group’s financial
results.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
52
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and investments in debt
securities.
Financial instruments especially exposed to credit risk include cash and cash equivalents, trade and other receivables. The
Group has no significant concentration of credit risk. The risk is spread over a number of banks, whose services are used,
and customers it cooperates with.
The maximum credit risk exposure on trade and other receivables and cash and cash equivalents amounts to EUR 293.6
million.
Cash and cash equivalents
Credit risk related to financial instruments in the form of cash in bank accounts is limited, due to the fact that the parties to
the transaction are banks with high credit ratings received from international rating agencies.
Trade receivables
The Group analyses receivables by type of the customer. The Group operates chains of own restaurants under own brands
as well as under franchise license agreements. Additionally, the Group operates as franchisor (for own brands) and master-
franchisee (for some franchised brand) and develops chains of franchisee businesses, organizing marketing activities for
the brands and supply chain. Consequently, the Group analyses two stream of receivables related to:
- Restaurant sales,
- Franchise and other sales.
The Group’ receivables related to restaurant sales are limited and have low credit risk due to the short settlement time and
the nature of settlement, as guests pay in restaurants generally in cash or via credit or debit cards.
Receivables related to franchise sales include franchise receivables referring to own brands and master-franchise
agreements. For these receivables the Group performs detailed analysis of expected credit loss.
The Group’s exposure to that credit risk is influenced mainly by the individual characteristics of each customer. However,
the Group also considers the factors that may influence the credit risk of its customer base, including the default risk
associated with the industry and country in which customers operate, including the external rating related to particular
country.
For these receivables the Group applied the simplified approach permitted by IFRS 9, which requires expected credit losses
(ECLs) to be recognised from initial recognition of the receivables. The Group has established a provision matrix that is
based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
During year 2021 the Group recognized an impairment of the Group’s receivables exposed to credit risk in an net amount
of EUR 0.9 million.
The ageing break-down of receivables and receivable loss allowance as of 31 December 2021 and 31 December 2020 is
presented in the table below.
Current
Overdue in days
Total
2021
current
less than 90
91 - 180
181 - 365
more than 365
Trade and other receivables
55.4
8.7
2.9
4.2
9.6
80.8
Loss allowance (note 20)
(0.9)
(1.0)
(1.2)
(2.2)
(7.6)
(12.9)
Total
54.5
7.7
1.7
2.0
2.0
67.9
Current
Overdue in days
Total
2020
current
less than 90
91 - 180
181 - 365
more than 365
Trade and other receivables
45.2
10.5
2.8
5.2
8.9
72.6
Loss allowance (note 20)
(0.7)
(1.2)
(0.8)
(2.6)
(6.9)
(12.2)
Total
44.5
9.3
2.0
2.6
2.0
60.4
Value of loss allowance for receivables as of 31 December 2021 and 31 December 2020 is presented in table below:
31 December 2021
31 December 2020
Value at the beginning of the period
(12.2)
(8.1)
Allowance created
(3.8)
(6.9)
Allowance released
2.9
0.7
Allowance used
0.1
1.5
Other
0.1
0.6
Value at the end of the period
(12.9)
(12.2)
Interest rate risk
Bank borrowings drawn by the Group are most often based on fluctuating interest rates (note 27). As of 31 December 2021
the Group does not hedge against changes in cash flows resulting from interest rate fluctuations which have an impact on
the results. The Group analyses the market position relating to interest on loans in terms of potential refinancing of debt or
renegotiating the lending terms and conditions. The impact of changes in interest rates on results is analyzed in quarterly
periods.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
53
Had the interest rates on loans denominated in Polish zlotys during the 12 months ended 31 December 2021 been 30 base
points higher/lower, the profit before tax for the period would have been EUR 329.1 thousand lower/higher (2020: EUR
371.1 thousand).
Had the interest rates on loans denominated in euro during the 12 months ended both 31 December 2021 and 31 December
2020 been 30 base points higher/lower, the profit before tax for these periods would have been the same.
Foreign exchange risk
The Group is exposed to foreign exchange risk related to transactions in currencies other than the functional currency in
which the business operations are measured in particular Group companies. Foreign exchange risk results from future
business transactions, recognised assets and liabilities. Moreover, lease payments related to a significant part of the
Group’s lease agreements are indexed to the exchange rate of EUR or USD. Nevertheless, the Group is trying to sign
lease agreements in local currencies whenever possible.
For hedging transactional risk and risk resulting from revaluation of recognised assets and liabilities the Group uses
derivative forward financial instruments.
Net investment foreign currency valuation risk
The Group is exposed to risk of net investment valuation in subsidiaries valued in foreign currencies. This risk is hedged
for key positions with use of net investment hedge. Details concerning hedging on currency risk are described in note 23.
Liquidity risk
Prudent financial liquidity management assumes that sufficient cash and cash equivalents are maintained and that further
financing is available from guaranteed funds from credit lines.
The table below shows an analysis of the Group’s financial liabilities which will be settled in net amounts in particular ageing
brackets, on the basis of the term to maturity as of the balance sheet date. The amounts shown in the table constitute
contractual, undiscounted cash flows. The interest payments on variable interest rates loans in the table below reflect
market interest rates at the reporting date and these amount may change as market interest rates change. The future cash
flows on financial liabilities may be different from the amount in the table below as interest rates and exchange rates
change. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at
significantly different amounts.
The maturity break-down of long- and short-term borrowings as well as trade and other liabilities as of 31 December 2021
and 31 December 2020 is presented in the table below:
31 December 2021
Contractual, undiscounted cash flows
Carrying
amount
Up to
1 year
Between 1
and 2 years
Between 2
and 3 years
Between 3
and 4 years
Between 4
and 5 years
More than 5
years
Total
Trade and other
liabilities to suppliers
180.9
-
-
-
-
-
180.9
180.9
Loan instalments
118.7
86.1
448.1
4.3
1.1
-
658.3
658.3
Interest and other
charges
17.0
15.0
13.0
-
-
-
45.0
-
31 December 2020
Contractual, undiscounted cash flows
Carrying
amount
Up to
1 year
Between 1
and 2 years
Between 2
and 3 years
Between 3
and 4 years
Between 4
and 5 years
More than 5
years
Total
Trade and other
liabilities to suppliers
146.9
-
-
-
-
-
146.9
146.9
Loan instalments
95.1
609.6
13.4
42.8
8.1
2.2
771.2
770.8
Interest and other
charges
16.0
11.0
1.1
0.6
0.1
-
28.8
-
Contractual, undiscounted payments of interests and other fees have been determined taking into consideration following
assumptions:
• for loans in foreign currency the expected cash flows was translated spot rates at reporting date.
• the interest payments on variable interest rate loans reflect market interest rates at the reporting date.
The future cash flows may be different from the amounts in the table as exchange rates or interest rates change.
Capital risk
The Group manages capital risk to protect its ability to continue in operation, so as to enable it to realize returns for its
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce its cost.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
54
36. Audit fees
PwC Auditors, S.L., and other related companies as defined in the fourteenth additional provision of legislation governing
the reform of the financial system, rendered professional services to the Group during the years ended 31 December 2021
and 2020, the fees and expenses for which are as follows:
2021
PwC
Auditores, S.L.
Other entities affiliated
with PwC International
Other auditors
Total
Audit and other assurance services
0.2
0.6
0.4
1.2
Other verification services
0.1
-
-
0.1
Other services
-
-
-
-
0.3
0.6
0.4
1.3
2020
KPMG
Auditores, S.L.
Other entities affiliated
with KPMG International
Other auditors
Total
Audit and other assurance services
0.3
0.6
0.3
1.2
Other verification services
-
0.1
-
0.1
Other services
-
0.1
0.1
0.2
0.3
0.8
0.4
1.5
Other assurance services include, mainly, limited review of the Condensed Consolidated Financial Statements for the six-
month period ending 30 June 2021 and other agreed upon-procedures performed by the auditors.
The amounts detailed in the above table include the total fees for 2021 and 2020, irrespective of the date of invoice.
37. Events after the reporting period
On 1 February 2022 Burger King Europe GMBH has notified AmRest about the termination of the development agreements
of the Burger King brand in Poland, the Czech Republic, Slovakia, Bulgaria and Romania effective as of the same day.
AmRest will continue to operate 93 Burger King restaurants that it owns in mentioned territories under the best standards
of service and quality, in compliance with the franchise agreements signed, which will continue to be in force. Therefore,
the revenues, EBITDA and total assets of AmRest will not be significantly affected by the termination of the development
agreements.
After the reporting period the uncertainty arising from the conflict between Ukraine and Russia has increased, which may
result in a negative impact on economy, including instable currency, interest rates, liquidity, supply chain disruptions and
consumer confidence deterioration. All these events and uncertainty that accompanies them may have a significant
impact on the Group’s operations and financial position, the effect of which is difficult to predict. The future economic and
regulatory situation may differ from the Management’s expectations however it is being monitored in order to adjust
strategic intentions and operational decisions, which will minimize business risks.
38. Significant accounting policies
a. Basis of consolidation
Business combinations
The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets
meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities
and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an
input and substantive process and whether the acquired set has the ability to produce outputs.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of
activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross
assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition
date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group
elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the
acquiree’s identifiable net assets.
Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss
immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre‑existing relationships. Such
amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and
settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each
reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
55
Subsidiaries
Subsidiaries are entities controlled by the Group.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee
if, and only if, the Group has:
- Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee),
- Exposure, or rights, to variable returns from its involvement with the investee,
- The ability to use its power over the investee to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses
control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases
to control the subsidiary.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related
NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the
former subsidiary is measured at fair value when control is lost.
Non-controlling interests and transactions with non-controlling interests
Changes in the Group’s interest in a subsidiary that do not result in a loss of control over subsidiary company are recognised
as equity transactions. In such cases, the Group adjusts the carrying amount of the controlling and non-controlling interest
and effect of transactions with non- controlling interest is presented in equity items allocated to the owners of the parent.
Interests in equity-accounted investees
The Group’s interests in equity‑accounted investees comprise interests in associates and a joint venture.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial
and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights
to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Interests in associates and the joint venture are accounted for using the equity method. They are initially recognised at
cost, which includes transaction costs. The Group’s investment in equity-accounted investees includes goodwill (net of any
potential accumulated impairment write-downs), determined as of the acquisition date. Subsequent to initial recognition,
the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity accounted investees,
until the date on which significant influence or joint control ceases.
Transactions eliminated on consolidation
Intra‑group balances and transactions, and any unrealised income and expenses arising from intra‑group transactions, are
eliminated. Unrealised gains arising from transactions with equity accounted investees are eliminated against the
investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
b. Foreign currency
Functional currencies and presentation currency
The Group’s consolidated financial statements are presented in euros.
For each entity, the Group determines the functional currency and items included in the financial statements of each entity
are measured using that functional currency.
The Group uses European Central Bank‘s exchange rates for currency translations.
The functional currency of none of the subsidiaries is the currency of a hyperinflationary economy as
at 31 December 2021.
Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the
exchange rates at the dates of the transactions. For simplification monthly income statements are translated using average
monthly exchange rates based on the European Central Bank rates.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange
rate at the reporting date. Non‑monetary assets and liabilities that are measured at fair value in a foreign currency are
translated into the functional currency at the exchange rate when the fair value was determined. Non‑monetary items that
are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the
transaction. Foreign currency differences are generally recognised in profit or loss and presented within finance costs.
However, foreign currency differences arising from the translation of the following items are recognised in OCI:
- An investment in equity securities designated as of FVOCI,
- A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is
effective,
- Qualifying cash flow hedges to the extent that the hedges are effective.
Foreign operations
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
56
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are
translated into euro at the exchange rates at the reporting date. The income and expenses of foreign operations are
translated into euro at the exchange rates at the dates of the transactions.
Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent that
the translation difference is allocated to NCI. On disposal of a foreign operation, the component of OCI relating to that
particular foreign operation is reclassified to profit or loss.
c. Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified
as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax
expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal
group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it
is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must
be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the
classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is
classified as held for sale, and:
- Represents a separate major line of business or geographical area of operations,
- Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations,
or
- Is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the statement of profit or loss.
d. Revenues
The Group operates chains of own restaurants under own bands as well as under franchise license agreements.
Additionally Group operates as franchisor (for own brands) and master-franchisee (for some franchised brand), and
develops chains of franchisee businesses, organizing marketing activities for the brands, and supply chain.
Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer
at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or
services.
Restaurant sales
Revenues from the sale of goods by owned restaurants are recognised as Group sales when a customer purchases the
goods, which is when our obligation to perform is satisfied. These revenues are presented in “Restaurant sales” line in
the Consolidated Income Statement.
Franchise and other sales: owned brands
• Royalty fees (based on percentage of the applicable restaurant’s sales) are recognised as the related sales occur.
Royalty fees are typically billed and paid monthly.
• Initial fees, renewal fees: for each brand separately, the Group analyses if the activities performed are distinct from
the franchise brand. If they do not represent a separate performance obligation they are recognised on a straight-line
basis over the contract duration. If they represent a separate obligation, the Group estimates the allocation of the part
of the transaction price to that performance obligation.
• Advertising funds: for Sushi Group and Bacoa brands the Group operates the advertising funds that are designed to
increase sales and enhance the reputation of the own brands and its franchise owners. Contributions to the advertising
cooperatives are required for both Company-owned and franchise restaurants and are generally based on a
percentage of restaurant sales. Revenues for these services are typically billed and paid on a monthly basis.
Advertising services that promote the brand (rather than an individual location), such as national advertising
campaigns, are not separable between different franchise agreements or franchisees, and not distinct because the
services and franchise right are highly dependent and interrelated with each other. The sales-based advertising fund
contributions from franchisees are recognised as the underlying sales occur, are reported gross as part of revenue
and presented in line “Franchise and other sales”. Own restaurants participation in marketing costs as an element is
presented as element of operational costs.
• Revenue from sale of products to franchisees is recognised at the moment of transaction which is when our obligation
to perform is satisfied.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
57
Franchise and other sales: master-franchise agreements
As a result of signed Master Franchise Agreements (MFAs) for different Pizza Hut concepts, YUM (“Master Franchisor”)
granted AmRest (“Master Franchisee”) Master Franchise Rights for the agreed term in the particular territories. Intellectual
property is exclusive property of Master Franchisor and Master Franchisor grants AmRest a license to use it in the agreed
territory. Under the Master Franchise Agreement parties established the development commitments for development
periods.
Performance obligations identified:
• AmRest’s performance obligation to YUM: to develop the market by opening new restaurants (either AmRest own or
sub-franchises) and promote the YUM’s brand by performing marketing activities. Managing marketing fund is not
distinct from the development of the market, and no separate remuneration was agreed between parties for those
services. Various streams of cash flows are agreed in MFA: AmRest collects initial fees and transfers them to YUM,
AmRest manages the marketing fund (collects revenue based contributions from owned and sub-franchised
restaurants and spends them on marketing activities, any unspent amount is to be paid to YUM and YUM spends it
on national campaigns at its discretion). If a certain point of market development level is reached, AmRest is enabled
to receive a bonus that represents the transaction price for the service performed for the Master Franchisor. To reflect
the substance of the transaction, incomes from sub franchisees from initial and marketing fees are netted with the
initial fees paid/actual marketing expenses and bonus earned.
• AmRest’s performance obligation to sub-franchisees: to grant sub-franchisees the right to use the system, system
property etc. and other services solely in connection with the conduct of the business at the outlet (sub-licensing from
YUM). The transaction price is agreed in the form of sales based royalties paid by franchisees. Initial fees and renewal
fees paid by franchisees are part of other performance obligations (described above). Corresponding costs of acquiring
license right from Yum are presented within costs of sales of franchise activities in the line “Franchise and other
expenses”.
Loyalty points programs
The Group has various loyalty points programs where retail customers accumulate points for purchases made which entitle
them to discount on future purchases. The loyalty points give rise to a separate performance obligation as they provide a
material right to the customer. A portion of the transaction price is allocated to the loyalty points awarded to customers
based on relative stand-alone selling price and recognised as a contract liability until the points are redeemed. Revenue
from the award points is recognised when the points are redeemed or when they expire or are likely to expire.
When estimating the stand-alone selling price of the loyalty points, the Group considers the likelihood that the customer
will redeem the points.
Gift cards
Gift cards may be issued to the guests in some brands and redeemed as a payment form in subsequent transactions. The
Group records a contract liability in the period in which gift cards are issued and proceeds are received. This liability is
calculated taking into account the probability of the gift cards’ redemption. The redemption rate is calculated based on own
and industry experience, historical and legal analysis. Revenue is recognised when a performance obligation is fulfilled and
a guest redeems the gift cards.
e. Government grants
Government grants that compensate the Group for expenses incurred are recognised in profit or loss as other operating
income on a systematic basis in the periods in which the expenses are recognised, unless the conditions for receiving the
grant are met after the related expenses have been recognised. In this case, the grant is recognised when it becomes
receivable.
f. Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates
to a business combination, or items recognised directly in equity or in OCI.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best
estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is
measured using tax rates enacted or substantively enacted at the reporting date.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that itis no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered. Depending on the tax jurisdiction where the
Group’s subsidiaries operate recoverability of deferred taxes is assessed taking into account potential time expiry of
availability of deferred tax utilization (e.g. in case of tax losses).
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
58
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date,
are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated
as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or
recognised in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to
settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
g. Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group as a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration
in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property
the Group has elected not to separate non-lease components and account for the lease and non-lease components as a
single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted
for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental
borrowing rate. Generally, the Group uses the incremental borrowing rates as the discount rates.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources
(differentiated by currency of the debt) and makes certain adjustments to reflect the terms of the lease, based on long-term
IRS quotation.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment
made (amortised cost using the effective interest method). It is remeasured when there is:
- a change in future lease payments arising from a change in an index or rate,
- a change in the estimate of the amount expected to be payable under a residual value guarantee, or
- changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a
termination option is reasonably certain not to be exercised.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group incurs expenses on maintenance, security and promotion in the shopping malls (so called “common area
charges”). These items are separate services (non-lease components) and are recognised as an operating expenses.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases. The Group recognises the lease payments associated with these leases as an expenses on a straight-line
basis over the lease term.
COVID-19-related rent concessions
The Group has applied COVID-19-Related Rent Concessions – Amendment to IFRS 16. The Group applies the practical
expedient allowing it not to assess whether eligible rent concessions that are a direct consequence of the COVID-19
pandemic are lease modifications. The Group applies the practical expedient consistently to contracts with similar
characteristics and in similar circumstances. For rent concessions in leases to which the Group chooses not to apply the
practical expedient, or that do not qualify for the practical expedient, the Group assesses whether there is a lease
modification.
The Group as a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of their relative stand-alone prices. When the Group acts as a lessor, it
determines at lease inception whether each lease is a finance lease or an operating lease.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It
assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not
with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption
described above, then it classifies the sub-lease as an operating lease.
Rental income arising from operating lease is accounted for on a straight-line basis over the lease terms and included in
other income in the income statement.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
59
h. Property, plant and equipment
Items of property, plant and equipment (PPE) are measured at cost less accumulated depreciation and any accumulated
impairment losses.
The initial value of the property, plant and equipment of new restaurants built internally (such as construction sites and
leasehold improvements in restaurants) include the cost of materials, direct labor, costs of architecture design, legal
assistance, the present value of the expected cost for the decommissioning of an asset after its use, wages and salaries
and benefits of employees directly involved in launching a given location.
The Group capitalizes the restaurants costs mentioned above incurred from the moment when the completion of the project
is considered likely. In the event of a later drop in the probability of launching the project at a given location, all the previously
capitalized costs are transferred to the income statement.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as
separate items (major components) of property, plant and equipment.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure
will flow to the Group. All other repairs and maintenance are charged to the income statement during the financial period
in which they are incurred.
Gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss, under „other operating
gains and losses”.
Amortisation and depreciation
Property, plant and equipment, including their material components, are depreciated on a straight-line basis over the
expected useful life of the assets/components. Land is not depreciated. Construction in progress is stated at cost, net of
accumulated impairment losses, if any.
The estimated useful lives of property, plant and equipment are as follows:
Buildings, mainly drive- through restaurants
30 - 40 years
Costs incurred on the development of restaurants (including leasehold improvements and
costs of development of the restaurants)
10 - 20 years *
Kitchen equipment assets
3 - 14 years
Vehicles
4 - 6 years
Other property, plant and equipment
3 - 10 years
* over the lease term
The residual value, depreciation method and economic useful lives are reassessed at least annually.
i. Franchise, license agreements and other fees
The Group operates own restaurants on the basis of franchise agreements (third party brands). In accordance with the
franchise agreements, the Group is obliged to pay a non-reimbursable initial fee upon opening each new restaurant and
further fees over the period of the agreement (in the amount of a % of sales revenues, usually 5-6%), and to allocate a %
of revenues (usually 5%) to advertising activities specified in the respective agreements. Moreover, after the end of the
initial period of the franchise agreement, the Group may renew the franchise agreement after paying a renewal fee.
Non-reimbursable initial fees are in fact fees for the right to use the trademark and are included in intangible assets and
amortised over the period of the franchise (usually 10 years). Further payments made in the period of the agreement are
disclosed in the income statement upon being made. Fees for extending the validity of the agreements are amortised as of
the date of a given extension agreement coming into force.
The local marketing fee is recognised in the income statement as incurred in category direct marketing costs.
j. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Acquired licenses for computer software
are capitalized on the basis of costs incurred to acquire and prepare specific software for use.
Franchise right of use for Pizza Hut, KFC, Burger King and Starbucks trademarks are recognised at the acquisition price.
The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure
is reflected in profit or loss in the period in which the expenditure is incurred.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated
impairment losses.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset
to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised
in profit or loss as incurred.
Amortisation
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
60
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or
at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the
asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates. The estimated useful lives of assets are as follows:
Intangible asset
Acquired routinely
Computer software
3-5 years
Franchise rights
5-10 years
Other intangible assets
5-10 years
Acquired in business combinations
Intangible asset category
La Tagliatella brand
Marketing related
indefinite
Sushi Shop brand
Marketing related
indefinite
Blue Frog brand
Marketing related
20 years
Sushi Shop loyalty program
Customer related
10 years
La Tagliatella franchisee relations
Customer related
24 years
Favorable lease agreements
Contract based
2-10 years over the period to the end
of the agreement
Clients’/vendors’/ Franchise databases
Customer related
2-5 years
Exclusivity rights brand operator
Customer related
6-12 years
k. Goodwill
Goodwill on acquisition of a business is initially measured at acquisition cost which is an excess of:
• the sum total of:
o the consideration paid,
o the amount of all non-controlling interest in the acquiree, and
o in the case of a business combination achieved in stages, the fair value, at the acquisition-date, of an
interest in the acquiree,
• over the net fair value of the identifiable assets and liabilities at the acquisition date.
Goodwill on consolidation is disclosed in a separate line in the statement of financial position and measured at cost net of
accumulated impairment write-downs. Goodwill is tested for impairment annually or more frequently if events or changes
in circumstances indicate that the carrying amount may be impaired.
Goodwill of foreign operations is translated into euro at the exchange rates at the reporting date. Gains and losses on the
disposal of an entity include the carrying amount of goodwill allocated to the entity sold.
l. Impairment of non-financial assets
The Group periodically reviews the carrying amounts of its non‑financial assets (other than investment property, inventories
and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated for the purpose of impairment test.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the
cash-generating unit to which the asset belongs.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell.
Goodwill arising from a business combination is allocated groups of CGUs that are expected to benefit from the synergies
of the combination.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impaiment losses are recognised in profit or loss in line “Net impairment losses on other assets” They are allocated first to
reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other
assets in the CGU.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. The reversal of impairment losses in recognised
in line “ Net impairment losses on other assets”.
Group performs in general two types of impairment tests: on restaurant levels, when impairment indicators exists and for
businesses were goodwill is assigned or impairment indicators identified.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
61
Restaurants tests - procedure performed twice a year
Usually individual restaurants are considered separate CGUs in Group.
The following situations are considered impairment indicators for the purpose of testing at restaurant level:
• Restaurant operating result for last 6 month is negative,
• Store was already fully or partially impaired during last impairment test exercise,
• Store is planned to be closed.
A group of stores operating over 24 months in AmRest structures which has not been renovated in the last 24 months is
analysed at least twice a year if impairment indicators exist. If one of the above indicators is identified for the store then the
restaurant is tested for impairment. Value in use is usually determined for the remaining estimated period of operation, as
well analysis of potential onerous liabilities (mainly for rental agreement costs) is performed for planned closures.
Regularly the Group also tests restaurants for which in past the impaired loss was recognised, in order to determine if any
reversal is required.
For recoverable value calculations of value in use, Group uses cash flow projections based on financial budgets that
require relevant judgments and estimates that include, among others, growth in sales and costs and applied discount
rates. In the event that the fair value less costs of sale is used as a reference, market references are used that take into
account, among others, location and updated market information.
Upon application of the IFRS 16 carrying amount of the tested restaurants includes also carrying amount of right of use of
assets in respective restaurants. Value in use is based on the estimated future cash flows, discounted to their present value
using a post‑tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset or CGU. In case the Group believes the asset tested within CGU will be recovered through the sale, sublease or
reallocation into another restaurant the respective adjustment is made in determining final impairment charge. Discounted
cash flows do not include outflows relates to rental agreements as those are considered an element of financing under
IFRS 16 and reflected in discount rate applicable for test.
Goodwill tests - unless impairment indicators exist, procedure performed once a year
For businesses where goodwill is allocated impairment tests are performed at least once a year. Goodwill is testes together
with intangibles (including those with indefinite useful lives), property plant and equipment, right of uses assets as well
other non-current assets allocated to groups of CGUs where goodwill is monitored. If impairment indicators exist additional
tests are performed. Following indicators are analyzed:
Arising from external sources of information such as:
• Significant adverse changes that have taken place (or are expected in the near future) in the technological, market,
economic or legal environment in which the entity operates or in its markets,
• Increases in interest rates, or other market rates of return, that might materially affect the discount rate used in
calculating the asset’s recoverable amount.
Arising from internal sources of information, including:
• Plans to discontinue or restructure the operation to which the asset belongs, as well as reassessing the asset’s useful
life from indefinite to finite,
• Deterioration in the expected level of the asset’s performance i.e. when the actual net cash outflows or operating
profit or loss are significantly worse than budgeted,
• Where management’s own forecasts of future net cash inflows or operating profits show a significant decline from
previous budgets and forecasts.
Materiality applies in determining whether an impairment review is required. If previous impairment reviews have shown a
significant excess of recoverable amount over carrying amount, no review would be necessary in the absence of an event
that would eliminate the excess. Previous reviews might also have shown that an asset’s recoverable amount is not
sensitive to one or more of the impairment indicators.
The recoverable amounts is assessed using fair values less costs of disposal model based on the discounted cash flows.
For recoverable value calculations, the Group uses cash flow projections based on financial budgets that require judgment
and other estimates that include, among others, the operating result on sales and the discount and growth rates at long
term.
Post tax rate is applied, and implied pre-tax rate subsequently determined.
Discounted cash flows do not include outflows relates to rental agreements as those are considered an element of financing
under IFRS 16 and reflected in discount rate applicable for test.
Sensitivity analysis is performed as an element of impairment tests procedures.
m. Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are stated at fair value.
Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the period
in which they arise, including the corresponding tax effect, when applicable.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
62
n. Inventories
Inventories include mainly materials and goods for resale. Inventories are stated at the lower of cost and net realizable
value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs
of completion and the estimated costs necessary to make the sale.
o. Cash and cash equivalents
Cash reported in the statement of financial position comprises cash at banks and on hand, short-term deposits with a
maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts if they are considered an integral part of the Group’s cash
management.
p. Financial assets
The Group classifies its financial assets in the following measurement categories:
• Those to be measured subsequently at fair value through other comprehensive income (FVOCI),
• Those to be measured subsequently at fair value through profit or loss (FVTPL),
• Those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the
time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits
to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial
assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of
ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Financial assets with embedded
derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and
interest. A trade receivable without a significant financing component is initially measured at the transaction price.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt
instruments:
- Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other gains/(losses), together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the statement of profit or loss,
- FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and
foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in
other gains/ (losses). Interest income from these financial assets is included in finance income using the effective
interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment
expenses are presented as separate line item in the statement of profit or loss,
- FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a
debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net within other
gains/(losses) in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to
present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains
and losses to profit or loss following the derecognition of the investment.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
63
Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to
receive payments is established.
Changes in the fair value of financial assets at FVTPL are recognised in other operating gains/(losses) in the statement of
profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Impairment
The group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit
risk. For trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
The Group recognises loss allowance for expected credit losses (ECLs) on:
• Financial assets that are debt instruments such as loans, debt securities, bank balances and deposits and trade
receivables that are measured at amortised cost,
• Financial assets that are debt instruments measured at fair value through other comprehensive income,
• Finance lease receivables and operating lease receivables,
• Contract assets under IFRS 15.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next
12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL). The changes in the loss allowance balance are recognised in profit or loss as
an impairment gain or loss.
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occurred. Evidence that a financial asset is impaired includes observable data about such
events.
The Group applied the simplified approach for:
• all trade receivables or contract assets that result from transactions within the scope of IFRS 15, and that contain a
significant financing component in accordance with IFRS 15,
• all lease receivables that result from transactions that are within the scope of IAS 17 and IFRS 16 (when applied).
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs
at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the economic environment.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
q. Financial liabilities
Financial liabilities are classified as measured at amortised cost or FVTPL.
A financial liability is classified as of FVTPL if it is classified as held‑for‑trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any
interest expense, are recognised in profit or loss. The Group has not designated any financial liability as of fair value through
profit or loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised
in profit or loss. This category generally applies to interest-bearing loans and borrowings.
Initially, borrowings are recognised in the books of account at the fair value net of transaction costs associated with the
borrowing. Subsequently, borrowings are recognised in the books of account at amortised cost using the effective interest
rate.
The liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability
and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit or loss. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
r. Derivative financial instruments and hedge accounting
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-
measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged.
Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge accounting are taken
directly to profit or loss for the period.
The Group designates certain derivatives as either:
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
64
• Hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction
(cash flow hedge), or
• Hedges of a net investment in a foreign operation (net investment hedge).
At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and
hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in
the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge
transactions.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income and accumulated in the hedging reserve. The gain or loss relating to the
ineffective portion is recognszed immediately in the income statement under ‘other financial income or costs – net’.
When forward contracts are used to hedge forecast transactions, the Group generally designates only the change in fair
value of the forward contract related to the spot component as the hedging instrument. Gains or losses relating to the
effective portion of the change in the spot component of the forward contracts are recognised in the cash flow hedge
reserve within equity. The change in the forward element of the contract that relates to the hedged item (‘aligned forward
element’) is recognised within OCI in the costs of hedging reserve within equity. In some cases, the entity may designate
the full change in fair value of the forward contract (including forward points) as the hedging instrument. In such cases, the
gains or losses relating to the effective portion of the change in fair value of the entire forward contract are recognised in
the cash flow hedge reserve within equity.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or
is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is
discontinued, the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a
transaction resulting in the recognition of a non-financial item, it is included in the non-financial item’s cost on its initial
recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged
expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the
amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified
to the income statement under ‘other financial income or costs – net’.
Net investment hedge
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other
comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is
recognised immediately in the income statement. Gains and losses accumulated in equity are included in the income
statement when the foreign operation is partially disposed of or sold.
Hedge is effective if:
• There is economic relationship between hedged item and hedging instrument,
• The effect of credit risk does not dominate the value changes,
• The actual hedge ratio (designated amount of hedged item/designated of hedged instrument) is based on the amounts
the Group is us using for risk management.
The Group uses loans as a hedge of its exposure to foreign exchange risk on its investments in foreign subsidiaries.
s. Share based payments and employee benefits
Share-based payments
The Group has both equity-settled share-based programs and cash-settled share-based programs.
Equity-settled transactions
The cost of equity-settled transactions with employees is measured by reference to awarding fair value at the grant date.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award (“vesting date”). The cumulative expense is recognised for equity-settled transactions at each reporting date
until the vesting date reflects the extent to which the vesting period has expired and the number of awards that, in the
opinion of the parent’s Management Board at that date, based on the best available estimate of the number of equity
instruments, will ultimately vest.
Cash-settled transactions
Cash-settled transactions have been accounted since 2014 as a result of a modification introduced to existing share-based
programs. Some programs were modified so that they may be settled in cash or in shares upon decision of a participant.
As a result, the Group re-measures the liability related to cash-settled transaction.
The liability is subsequently measured at its fair value at every balance sheet date and recognised to the extent that the
service vesting period has elapsed, with changes in liability valuation recognised in income statement. Cumulatively, at
least at the original grant date, the fair value of the equity instruments is recognised as an expense (share-based payment
expense).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
65
At the date of settlement, the Group remeasures the liability to its fair value. The actual settlement method selected by the
employees, will dictate the accounting treatment:
• If cash settlement is chosen, the payment reduces the fully recognised liability,
• If the settlement is in shares, the balance of the liability is transferred to equity, being consideration for the shares
granted. Any previously recognised equity component shall remain within equity.
Long-term employee benefits based on years in service
The net value of liabilities related to long-term employee benefits is the amount of future benefits which were vested in the
employees in connection with the work they have carried out them in the current and past periods. The liability was
accounted for based on the estimated future cash outflows, and at the balance sheet date, the amounts take into
consideration the rights vested in the employees relating to past years and to the current year.
Retirement benefit contributions
During the financial period, the Group pays mandatory pension plan contributions dependent on the amount of gross wages
and salaries payable, in accordance with legally binding regulations. The public pension plan is based on the pay-as-you-
go principle, i.e. the Group has to pay contributions in an amount comprising a percentage of the remuneration when they
mature, and no additional contributions will be due if the Company ceases to employ the respective staff. The public plan
is a defined contribution pension plan. The contributions to the public plan are disclosed in the income statement in the
same period as the related remuneration, under “Payroll and employee benefits”.
t. Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed,
for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of
any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Costs of bringing the location to the condition it had been in before the lease agreement was signed
Depending on particular contracts the Group may be obliged to bring the location to the condition it had been in before the
lease agreement was signed. Asset retirement provision costs are provided for at the present value of expected costs to
settle the obligation using estimated cash flows and are recognised as part of the cost of the relevant asset (leasehold
improvement asset within PPE section).
The unwinding of the discount is expensed as incurred and recognised in the statement of profit or loss as a finance cost.
The estimated future costs of decommissioning are reviewed periodically and adjusted if needed.
Development commitments unattained
Group restaurants are operated under franchise and development agreements with YUM! and subsidiaries of YUM!, Burger
King Europe GmbH, Starbucks Coffee International, Inc. In accordance with these agreements, the Group is obliged to
meet certain development commitments as well as maintain the identity, reputation and high operating standards of each
brand.
Certain development commitments may be determined on annual basis and may result in recognition of agreed bonuses if
case the development commitments are satisfied or exceeded. Alternatively if the Group believes the commitments will not
be attained the respective provision are recognized. The Group considers all available fact and circumstances to determine
the risks related to future liabilities including planned openings as included in the annual operating plan for next reporting
year.
The provisions are periodically reviewed. The net expenses/gains relating to a provision are presented in the statement of
profit or loss in other operating incomes/expenses section.
u. Equity
Equity includes equity attributable to shareholders of the parent and non-controlling interests.
Equity attributable to shareholders of the parent is grouped into the following:
• Share capital,
• Reserves,
• Retained earnings,
• Translation reserve.
The effect of the following transactions is presented under reserves:
• Share premium (surplus over nominal amount) and additional contributions to capital without the issue of shares made
by the shareholders prior to becoming public entity,
• Effect of accounting for put options over non-controlling interests,
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
66
• Effect of accounting for share-based payments,
• Treasury shares,
• Effect of hedges valuation,
• Effect of accounting for transactions with non-controlling interests.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
The income tax effect relating to transaction costs of an equity transaction is also accounted for in equity.
Treasury shares
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly
attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are
presented in “Reserves”.
39. Changes in accounting policies, reclassification and restatement of
comparatives summary
a. Amendment to IFRS 16 - Covid-19-Related Rent Concessions
In May 2020 IASB issued COVID-19-Related Rent Concessions - amendment to IFRS 16 Leases (“the 2020 Amendment”)
that provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising
as a direct consequence of the COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a
COVID-19 related rent concession from a lessor is a lease modification.
The Group has applied the amendments to IFRS 16 already in 2020 for the first time.
One of the conditions of applying the amendment was that it related to a reduction in lease payments due originally on or
before 30 June 2021. However, the pandemic has continued beyond the period envisaged when the 2020 Amendment
was issued. In April 2021 IASB has extended the amendment to IFRS 16 and the entities will be allowed to apply the
amendment to a reduction in lease payments originally due on or before 30 June 2022 (“the 2021 Amendment”). This
amendment was approved by European Union on 31 August 2021 and applied in these consolidated financial statements.
The effect of the accounting is presented under “rent concessions” lines.
b. Other newly applied standards, amendments and interpretations
The amendments and interpretations below were applied in 2021 and had no significant impact on the accounting policies
applied.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate
(IBOR) is replaced with an alternative nearly risk-free interest rate (RFR): practical expedient for changes in the basis for
determining the contractual cash flows as a result of IBOR reform; relief from discontinuing hedging relationships; relief in
area of separately identifiable risk components. Amendments are effective for reporting periods beginning on or after 1
January 2021.
40. Standards issued but not yet effective
Below amendments to standards are effective for annual periods beginning after 1 January 2022 and earlier application is
permitted. The Group has not early adopted the new or amended standards in preparing these consolidated financial
statements.
IFRS 17 Insurance Contracts
IFRS 17 Insurance Contracts (IFRS 17) is a comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure. IFRS 17 will replace IFRS 4 Insurance Contracts. IFRS 17
applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of
entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features.
A few scope exceptions will apply. The overall objective of IFRS 17 is to provide an accounting model for insurance
contracts that is more useful and consistent for insurers. In contrast to the requirements in IFRS 4, which are largely based
on grandfathering previous local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts,
covering all relevant accounting aspects. Additionally, in June 2020, the IASB issued amendments to IFRS 17. IFRS 17 is
effective for reporting periods beginning on or after 1 January 2023. It is not expected that standard will have a material
impact on Group.
Amendments to IFRS 3 -Reference to the Conceptual Framework
The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or
losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires entities to apply the
criteria in IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine whether a present obligation
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
67
exists at the acquisition date. At the same time, the amendments add a new paragraph to IFRS 3 to clarify that contingent
assets do not qualify for recognition at the acquisition date.
The amendments must be applied prospectively. Earlier application is permitted. The amendments are effective for annual
periods beginning on or after 1 January 2022.
Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use
The amendment prohibits entities from deducting from the cost of an item of property, plant and equipment, any proceeds
of the sale of items produced while bringing that asset to the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items,
and the costs of producing those items, in profit or loss. The amendment is effective for annual periods beginning on or
after 1 January 2022.
Amendments to IAS 37 -Onerous Contracts – Costs of Fulfilling a Contract
The amendments specify which costs an entity needs to include when assessing whether a contract is onerous or loss-
making. The amendments apply a ‘directly related cost approach’. The costs that relate directly to a contract to provide
goods or services include both incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs
directly related to contract activities (e.g., depreciation of equipment used to fulfil the contract as well as costs of contract
management and supervision). General and administrative costs do not relate directly to a contract and are excluded unless
they are explicitly chargeable to the counterparty under the contract. The amendments are effective for annual periods
beginning on or after 1 January 2022.
Below standards and amendments that and are issued but not yet approved by European Union. The Group will apply the
standard once approved by the European Union.
Amendments to IAS 1: Classification of liabilities as current or non-current
The amendments specify that the conditions which exist at the end of the reporting period are those which will be used to
determine if a right to defer settlement of a liability exists. Management expectations about events after the balance sheet
date, for example on whether a covenant will be breached, or whether early settlement will take place, are not relevant.
The amendments clarify the situations that are considered settlement of a liability. The new guidance will be effective for
annual periods starting on or after 1 January 2023. The amendments are to be applied prospectively and will be reflected
in accounting for future transactions of Group. The Group has not finalized yet its analysis of impact on future reporting.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
policies.
The amendments specify requirements and provide guidance to help entities make more effective accounting policy
disclosures. The amendments are effective for annual periods beginning on or after 1 January 2023. The Group has not
finalized yet its analysis of impact on future reporting.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates
The amendments introduce the definition of accounting estimate and include other amendments to IAS 8 to help entities
distinguish changes in accounting estimates from changes in accounting policies. The amendments are effective for annual
periods beginning on or after 1 January 2023. The Group has not finalized yet its analysis of impact on future reporting.
Amendments to IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
Amendments were issued on 7 May 2021 and are effective for annual periods beginning on or after 1 January 2023. The
Group has not finalized yet its analysis of impact on future reporting.
Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information.
Amendments were issued on 9 December 2021 and are effective for annual periods beginning on or after 1 January 2023.
These amendments will have no impact on Group reporting.
AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2021
68
Signatures of the Board of Directors
Madrid, 28 February 2022
José Parés Gutiérrez
Chairman of the Board
Luis Miguel Álvarez Pérez
Vice-Chairman of the Board
Carlos Fernández
González
Member of the Board
Romana Sadurska
Member of the Board
Pablo Castilla Reparaz
Member of the Board
Mónica Cueva Díaz
Member of the Board
Emilio Fullaondo Botella
Member of the Board
AmRest Holdings SE
28046 Madrid, Spain
CIF A88063979 | +34 91 799 16 50 | amrest.eu
Directors’ Report
for the year ended 31 December 2021
AmRest Holdings SE capital group
28 FEBRUARY 2022
AmRest Holding SE
Directors’ Report
for the year ended 31 December 2021
Financial highlights (consolidated data) ........................................................................................................................................................................ 6
Group Business Overview............................................................................................................................................................................................ 7
Financial and asset position of the Group ..................................................................................................................................................................... 8
Brands operated by the Group ................................................................................................................................................................................... 16
Key investments ........................................................................................................................................................................................................ 20
Planned investment activities ..................................................................................................................................................................................... 22
Significant events and transactions in 2021 ................................................................................................................................................................ 22
External Debt ............................................................................................................................................................................................................. 23
Shareholders of AmRest Holdings SE ........................................................................................................................................................................ 23
Changes in the Parent Company’s Governing Bodies ................................................................................................................................................ 24
Remuneration of the Board of Directors and Senior Management Personnel .............................................................................................................. 24
Changes in the number of shares held by members of the Board of Directors ............................................................................................................ 25
Transactions on own shares concluded by AmRest ................................................................................................................................................... 25
Dividends paid and received ...................................................................................................................................................................................... 25
Average period of payment to suppliers ..................................................................................................................................................................... 25
Subsequent events .................................................................................................................................................................................................... 26
Factors impacting the Group’s development............................................................................................................................................................... 26
Basic risks and threats the Group is exposed to ......................................................................................................................................................... 26
Activity in Research and Development area ............................................................................................................................................................... 30
NON-FINANCIAL INFORMATION STATEMENT ....................................................................................................................................................... 32
ANNUAL CORPORATE GOVERNANCE REPORT OF LISTED COMPANIES ........................................................................................................... 68
ANNUAL REPORT ON DIRECTOR REMUNERATION OF LISTED COMPANIES .................................................................................................. 120
Signatures of the Board of Directors ........................................................................................................................................................................ 136
Contents
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
4
Dear Shareholders,
It is with immense pride that I share the AmRest Holdings SE financial report for the full year 2021.
Our team thrived in the face of adversity and our annual results are testament to this.
Over the course of the year, we relied on our ability not only to adapt to change but to understand the intricacies of what
our company and our industry needed to do in order to harness the benefits of focusing on our customers and serving
them in new ways. Keeping always as a priority the health of our employees and customers, we achieved sales recovery
and profitability levels well above the average for companies similar to ours.
The daring actions we implemented early on in the pandemic, together with the collaboration and dedication of the
management team and our employees, particularly those who are directly serving our customers, helped us to not only
mitigate the impact of pandemic-induced restrictions, but to flourish by honing our online and delivery strategy.
In 2021, we focused a considerable portion of our efforts on improving execution through the home-delivery and take-out
channels, which became the most dynamic road to market for the company. At year-end, these channels accounted for
70% of total sales, up from 65% in 2020 and 46% in 2019, contrasting sharply with the predominant contribution of the
dine-in channel prior to the pandemic.
However, the dine-in channel continues to have enormous latent potential for improvement, which I am certain we will
once again capture over the coming months. In 2021, we opened 147 new restaurants and, for the first time ever, we did
this with our own resources. Of our current 2,436 establishments, 99% were operating at year-end. We are thrilled to
successfully serve an increasing number of satisfied customers once again inside our stores.
As economies gradually began to reopen, we registered an uptick in consecutive quarterly revenues, achieving record
highs for both the third and fourth quarters. At year-end, sales were up a remarkable 25.9% with respect to 2020,
reaching 1,917 million euros, similar to pre-pandemic levels.
While the company’s performance was encouraging in every region, China and Central and Eastern Europe were
particularly noteworthy, with sales growths of 31% and 27%, respectively. These regions were followed by Western
Europe, with a 24% sales growth, and Russia, which was up 21%.
Throughout the year, we made the necessary investments to strengthen our capabilities in technological platforms and
implemented great discipline in operations and in the way we employ our resources.
Through it all, AmRest has continued to prudently manage liquidity, maintaining high cash or cash-like levels which have
remained virtually unchanged from 2020. In addition, over the course of the year, our net financial debt was reduced by
100.4 million euros, and by 162 million euros if we compare these figures to the start of the pandemic. Our debt reduction
and business improvements contributed to reducing the leverage ratio to 2.3, compared to 12.5 at year-end 2020.
I would like to take this opportunity to congratulate Luis Comas, the new AmRest CEO. With his more than 30 years’
experience in the restaurant business, he has done an excellent job in guiding the management team and brand
presidents under demanding circumstances.
We currently have the team and brands we need to move forward in retaking the path to growth, and I am hopeful
external conditions will finally be gentler to our business.
These challenging months have brought out the best in our employees, and I want to wholeheartedly thank them for their
persistent efforts to serve our customers with dedication and passion. On behalf of the Board of Directors I also wish to
extend our appreciation to our shareholders, directors and stakeholders for their committed work and continued trust,
even during the most difficult times.
I am certain that we are well on our way to continue our recovery process and to anchoring AmRest as the European
leader that inspires the global restaurant industry.
Thank you all for your extraordinary work.
José Parés Gutiérrez
Chairman of the Board of Directors
Highlights
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
6
Financial highlights (consolidated data)
YEAR ENDED
3 MONTHS ENDED
31 December 2021
31 December 2020
31 December 2021
31 December 2020
Revenue
1917.0
1522.9
539.0
397.5
EBITDA
*
359.1
201.7
98.0
46.9
EBITDA margin
18.7%
13.2%
18.2%
11.8%
Adjusted EBITDA
**
364.9
205.5
99.9
48.0
Adjusted EBITDA margin
19.0%
13.5%
18.5%
12.1%
Profit from operations (EBIT)
103.1
(142.5)
28.2
(28.9)
EBIT margin
5.4%
(9.4%)
5.2%
(7.3%)
Profit before tax
57.9
(201.4)
14.0
(41.0)
Net profit
35.4
(183.7)
5.3
(23.9)
Net margin
1.8%
(12.1%)
1.0%
(6.0%)
Net profit attributable to non-controlling
interests
2.5
(1.7)
1.0
(0.5)
Net profit attributable to equity holders of
the parent
32.9
(182.0)
4.4
(23.4)
Cash flows from operating activities
356.9
178.8
108.6
24.2
Cash flows from investing activities
(96.6)
11.7
(36.9)
51.3
Cash flows from financing activities
(270.4)
(95.0)
(46.6)
(50.1)
Total cash flows, net
(10.1)
95.5
25.1
25.4
Average weighted number of ordinary
shares for basic earnings per shares (in
thousands)
219,352
219,169
219,389
219,149
Average weighted number of ordinary
shares for diluted earnings per shares (in
thousands)
219,852
219,346
219,745
219,213
Basic earnings per share (EUR)
0.15
(0.83)
0.02
(0.11)
Diluted earnings per share (EUR)
0.15
(0.83)
0.02
(0.11)
Declared or paid dividend per share
-
-
-
-
* EBITDA – Operating profit before depreciation, amortization and impairment losses.
**Adjusted EBITDA – EBITDA adjusted for new openings expenses (Start-up costs), M&A expenses; all material expenses connected with
successful acquisition covering professional services (legal, financial, other) directly connected with a transaction or profit/loss on sale of
shares/entities and effect of SOP exercise method modification (difference in accounting cost of employee benefits accounted under cash settled
versus equity settled option plan).
YEAR ENDED
31 December 2021
31 December 2020
Total assets
2 174.9
2 114.4
Total liabilities
1 867.4
1 849.7
Non-current liabilities
1 288.1
1 371.6
Current liabilities
579.3
478.1
Equity attr butable to shareholders of the parent
298.7
257.8
Non-controlling interests
8.8
6.9
Total equity
307.5
264.7
Share capital
22.0
22.0
Number of restaurants
2 436
2 338
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
7
Group Business Overview
Basic services provided by the Group
AmRest Holdings SE (“AmRest”, “Company”) with its subsidiaries (the “Group”) is Europe's leading listed restaurant
operator with a portfolio of renowned brands in 25 countries. The Group operates 2,436 restaurants under franchised
brands such as KFC, Starbucks, Pizza Hut and Burger King, as well as its own brands such as La Tagliatella, Sushi Shop,
Bacoa and Blue Frog. The company also has several virtual brands in its portfolio. The offer of virtual brands in Poland is
available also under Food About concept - an umbrella brand that enables the purchasing of different virtual brand dishes
within one order. Food About has its own website that contributes to the Virtual Brands sales.
As of 31 December 2021, AmRest managed a network of 2,436 restaurants. Given the current scale of the business, every
day almost 48.5 thousand of AmRest employees deliver, on a daily basis, delicious taste and exceptional service at
affordable prices, in accordance with the Company’s unique culture.
Nowadays, the Group manages the network of restaurants across four main segments, which are aligned with the
geographical regions of its operations:
■
Central and Eastern Europe (“CEE”), where historically the Company was founded and opened its first restaurant
under the name of Pizza Hut; today CEE division covers the region of 10 countries (Poland, Czech Republic,
Hungary, Bulgaria, Serbia, Croatia, Romania, Austria, Slovenia and Slovakia) and with 1,085 restaurants,
accounting for 45.5% of Group´s revenue.
■
Western Europe (“WE”), is a segment which primarily consists of Spain, France and Germany, where both
franchised and proprietary brands are operated. As a result of dynamic organic expansion supported by previous
acquisitions, Western Europe has become a significant operating segment of the Group consisting of 11 countries
and generating ca. 38% of AmRest’s revenues.
■
Russia, where AmRest manages the network of KFC and Pizza Hut restaurants. The segment also includes Pizza
Hut restaurants located in Armenia and Azerbaijan.
■
China, where the restaurants of Blue Frog proprietary brand are operated.
And one additional segment “Other” which cover corporate office expenses and it does not include any network of owned
or franchised restaurants. It accounts for the results of SCM Sp. z o.o. along with its subsidiaries and other support costs
and functions rendered for the Group or not allocated to applicable segments such as, for instance, Executive Team,
Controlling, Treasury, Investor Relations, Mergers & Acquisitions. The detailed description of the segments is included in
Note 5 (‘Segment reporting’) of the Consolidated Financial Statements.
The brands of AmRest are well-diversified across five main categories of restaurant services:
1) Quick Service Restaurants (“QSR”), represented by KFC and Burger King,
2) Fast Casual Restaurants (“FCR”), represented by Pizza Hut Delivery and Express, Bacoa and Sushi Shop,
3) Casual Dining Restaurants (“CDR”), represented by Pizza Hut Dine-in, La Tagliatella and Blue Frog,
4) Coffee category, represented by Starbucks.
5) Virtual brands, whose offer is available only online, represented by Pokaï, Lepieje, ‘Oi Poke, Moya Misa Ramen,
Pierwsze i Drugie, Sushi Tone, Eat’s Fine, Mr. Kebs, Tacos Square, Potato Patata, Viva Salad! and Cremontano.
Within the current business model of the Group, AmRest operates its network of restaurants as a franchisee (for the brands
of KFC, Pizza Hut, Starbucks and Burger King), as well as a brand owner and franchisor (for the brands of La Tagliatella,
Blue Frog, Sushi Shop and Bacoa). In addition, within the concepts of Pizza Hut Delivery and Pizza Hut Express the
Company acts as a master-franchisee, having the rights to sub-license these brands to third parties.
AmRest restaurants provide on-site catering, take-away and drive-in services at special sales points (“Drive Through”), as
well as deliveries of orders placed online or by telephone. The diversification of channels and the continuous enhancement
of take away and delivery capabilities has been key to adapting quickly to new consumer habits. Since the outbreak of the
pandemic, the take away segment has been the most dynamic segment of AmRest´s operations, with increasing
importance during 2021.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
8
Number of AmRest restaurants broken down by brands as at 31 December 2021
Brand
Restaurants*
Equity share
Franchise share
Share in total
Franchised
1 913
86%
14%
79%
KFC
951
100%
0%
39%
PH
482
48%
52%
20%
Starbucks*
387
94%
6%
16%
Burger King
93
100%
0%
4%
Own
523
55%
45%
21%
La Tagliatella
235
32%
68%
10%
Sushi Shop
201
69%
31%
8%
Blue Frog
77
86%
14%
3%
Bacoa
5
20%
80%
<1%
Shadow Kitchen
5
100%
0%
<1%
*Starbucks franchise share refers to Starbucks licensed stores for which AmRest offers supply service but does not receive any royalty
Number of AmRest restaurants broken down by countries as at 31 December 2021
Region
Restaurants*
Equity share
Franchise share
Share in total
Total
2 436
79%
21%
100%
CEE
1 085
99%
1%
45%
Poland
600
99%
1%
25%
Czech
212
100%
0%
9%
Hungary
142
100%
0%
6%
Romania
63
100%
0%
3%
Other CEE*
68
100%
0%
3%
WE
996
54%
46%
41%
Spain
333
50%
50%
14%
France
353
53%
47%
14%
Germany**
260
61%
39%
11%
Other WE*
50
58%
42%
2%
Russia*
278
85%
15%
11%
China
77
86%
14%
3%
*Other CEE includes Bulgaria, Serbia, Slovakia, Croatia, Austria and Slovenia; Other WE includes Belgium, UAE, Switzerland, Portugal, UK,
Italy, Luxembourg and Saudi Arabia; Russia includes also Armenia and Azerbaijan
**Germany franchise share includes Starbucks licensed stores for which AmRest offers supply service but does not receive any royalty
Financial and asset position of the Group
Revenues and profitability
AmRest Group's consolidated revenues amounted to EUR 1,917.0 million in 2021. This is 25.9% higher than in 2020.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
9
AmRest Group revenue for the 12 months ended 31 December 2019-2021
The new variants of COVID-19 that have emerged during the year have had a lesser impact on the main economies where
the Group operates thanks to the progress in vaccination levels, which have enabled the spread of the virus to be contained
and the restrictions imposed by governments to be gradually relaxed, thus facilitating greater mobility and social interaction.
However, the evolution and impact has varied geographilly areas, and has not followed a homogeneous or synchronised
pattern, as can be seen in the breakdown of Group revenues by region.
This gradual reopening of economies was reflected in the upward trend in AmRest's quarterly revenues. Despite the
particularly significant impact of the OMICRON variant in November and December, which practically cancelled out the
positive seasonal effect that the Christmas holidays traditionally provides to the restaurant business, AmRest recorded all-
time revenue records in the third and fourth quarters. In 4Q 2021 revenues reached EUR 539.0 million, a YOY increase of
35.6% related to the same period of 2020, with a comparable same-store sales ratio of 130.7%. This figure represents the
highest quarterly revenue volume in the Group's history at the end of the year.
Although the impact of COVID-19 has prevented all of the Group's restaurants from being operational, the evident progress
in the fight against the pandemic has also been reflected in the higher number of restaurants in operation, which stood at
99% at the end of 2021, compared to 92% at the end of 2020. In this regard, despite the closures and other restrictions,
the assistance programmes implemented by the various governments have helped to partially mitigate the effects of these
restrictive measures on the business and speed up the recovery. During 2021, revenues of EUR 37.2 million came from
these programmes (EUR 10.5 million from employment programmes and EUR 26.7 million from rents).
The excellent sales performance is also the result of the deep transformational work being carried out in the Group, thanks
to the increasing adoption of new distribution channels (omnichannel model) where AmRest aims to offer its guests the
same consumer experiences regardless of the distribution channel selected. This model has facilitated the increase in the
Group's distribution capacity and provides greater flexibility and resilience in the face of possible restrictions on social
interaction or mobility, which we will probably have to continue to live with for some time, but above all, it has allowed us to
adapt efficiently to the new needs of our customers, while increasing revenue generation capacity and providing greater
stability to cash flow generation.
This journey of adaptation and adequacy, especially towards greater digitalisation, is an ongoing process in which each of
the brands operated by AmRest maintains its own roadmap according to its capabilities. Thus, during the current financial
year, more than half of the aggregate sales generated were made in the Take-away and Drive-Through channels. This
contrasts with the predominant contribution of the dine-in channel in previous years. This channel is still weighed down by
the effect of less social interaction, the absence of tourism, limitations on permitted capacity and opening hours. However,
this channel maintains an enormous latent potential for improvement, largely subject to the evolution of the epidemiological
situation. In this regard, brands with a model more biased towards dine-in service have recorded the highest level of
recovery in sales compared to 2020, but at the same time remain the most affected when compared to pre-Covid figures
for 2019. Finally, the Delivery channel continues to gain weight although its contribution is lower than the other distribution
channels. Aggregators have become relevant players in this space although business models are still in the process of
being defined. AmRest maintains a close collaboration with these companies with the objective of increasing the potential
synergies derived from these relationships. All in all, the comparable same-store sales ratio stood at 120.8% % for the full
year but was still 86.9% compared to 2019.
Finally, the Group's installed capacity continued to increase with the opening of 147 new restaurants during the year, well
above the target of 130 set at the beginning of the year. This, together with 49 closures, means the number of restaurants
in the Group's portfolio totalled 2,436.
1 961,5
1 522,9
1 917,0
FY 2019 FY 2020 FY 2021
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
10
Number of AmRest Group restaurants as at 31 December 2007-2021
A record number of restaurants, but what is even more relevant is that the portfolio optimisation strategy is bearing fruit,
focusing on the efficient allocation of capital and resources, which is leading to the closure or restructuring of businesses
that do not meet the Group's objectives, regardless of the brand or segment involved. This process, introduced in recent
quarters, is a natural part of the process of adapting business models to the new realities and needs of our customers, and
is clearly having a positive impact on profitability, which is now at levels similar to those obtained before the pandemic. As
a result, the EBITDA margin rose to 18.7% compared to 13.2% in 2020. This represents an EBITDA generation of EUR
359.1 million in the current year, 78% more than in 2020.
AmRest Group EBITDA for the 12 months ended 31 December 2019-2021
In addition, the reopening of economies and increases in activity levels have strained global supply chains and increased
the price of supplies and energy. This situation has been particularly intense during the last months of the year, exacerbated
by geopolitical tension in Europe, especially the situation in Russia and Ukraine. Moreover, labour markets in many
countries seem to be undergoing structural changes, with less workers available and significant increases in wages.
Increasing sales is one of the most important factors in mitigating inflationary pressures and maintaining margins, so
adapting quickly to customer needs, proper price management and maintaining value in the products offered become more
important than ever in this context. In addition, initiatives aimed at increasing efficiency are analysed and shared among all
the Group's brands, generating synergies that go far beyond the individual capabilities of each of them.
394,4
201,7
359.1
20,1%
13,2%
18,7%
FY 2019 FY 2020 FY 2021
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
11
AmRest remains committed to investing in technology and increasing the digitalisation of the Group. This provides a
competitive advantage that is not easily replicated. The resulting value of this model comes from the fact that the Group
can exploits the data provided by the consumption habits of more than 30 million guests who consume in the different
channels offered by AmRest brands every month. This allows the Group to continue to optimise processes and commercial
actions, and to identify changes in consumer habits at an early stage. Finally, AmRest has centralised purchasing and
service management that leverage the Group's capabilities, increasing its negotiation power and providing a clear
competitive advantage in the industry.
In this context, the Group's EBIT amounts to EUR 103.1 million, representing a margin of 5.4%, compared to negative
figures of EUR -142.5 million during 2020. Finally, the profit attributable to the Company's shareholders amounts to EUR
32.9 million.
According to the official projections of the main relevant international organisations, as base scenario, the economic
recovery is expected to continue to be strong over the coming quarters, favoring an improvement in consumer confidence
levels and, foreseeably, the propensity to consume, especially services. Nonetheless, the increasing geopolitical tensions
and the possibility of new epidemiological outbreaks cannot be completely ruled out, so the capacities developed over the
last few quarters will be key. Finally, inflationary pressures, and the drastic change in their expectations, are changing the
roadmap of central banks with respect to their monetary policy, which could end up affecting financial conditions.
In addition, one of the priorities for the year was to strengthen the balance sheet and reduce leverage
1
. As a result, the
Group's leverage ratio
*
was lower to 2.3x times, after reducing debt and improving revenues. In this regard, AmRest has
continued to prudently manage its liquidity, maintaining high cash or cash-like levels of EUR 198.7 at the year-end, virtually
unchanged from 2020. This provides a solid basis for the further profitable and sustainable expansion of the Group's
capacity.
During 2021, net financial debt (ex-IFRS-16) has been reduced by EUR 100.4 million, and by EUR 162 million since the
start of the pandemic. Despite this, during 2021 AmRest’s capital expenditure increased by 38.9% with respect to 2020,
this increase has accompanied the gradual recovery in the business activity and the completion of the balance sheet
deleverage objective. It was particularly strong during the last quarter of the year and financed from cash flows from
operating activities.
Debt reduction and business improvement reduce the leverage ratio to 2.3 compared to 12.5 at the end of 2020. In addition,
in order to provide the Group with more financial flexibility and after evaluating different financing options, on 13 December
2021 it was agreed to extend the maturity of the current credit lines with the banking club. Based on the extended Credit
Agreement, the new amounts are equal to the outstanding amounts to be repaid as of September 2021, i.e. EUR 352million
and PLN 464million. The new repayment schedule is 10% on each anniversary of 30 September for the next three years
and the remaining amount is to be paid on 31 December 2024. The revolving credit facility is available for an amount of up
to PLN 450 million and matures on 31 December 2024. In addition, a new undrawn and uncommitted credit facility has
been agreed, up to a maximum amount of EUR 100 million.
Net financial debt evolution and cash position
1
Leverage ratio as EBITDA VS net financial debt excluding IFRS 16
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
12
In summary, during the current financial year, the priorities from a business perspective have been set in terms of organic
growth, with the opening of 147 new restaurants. In the continues advances in the implementation and adaptation to new
distribution channels that has enabled the Group to achieve two consecutive quarterly revenue records. Greater integration
of brands and countries, the fostering and promoting of the AmRest brand and a common culture among all AmRestees,
with the clear objective of enhancing synergies and advancing in efficiency, has meant profitability margins are almost back
to pre-COVID levels. Finally, AmRest continues to make decisive progress in the digitalization of the Group.
Likewise, from the financial perspective, priority was given to strengthening the balance sheet and prudent liquidity
management in an environment of still high uncertainty. In this context, no significant non-organic operations were carried
out in 2021, but the Group has the financial capacity and appetite to undertake this type of operation, provided that
sustainable value generating opportunities for shareholders are identified.
Revenues and profitability by segments
Table 1. Structure of Group’s revenue
YEAR ENDED
31 December 2021
31 December 2020
Revenue
Amount
Share
Amount
Share
Central and Eastern Europe
873.1
45.5%
685.5
45.0%
Western Europe
720.9
37.6%
582.8
38.3%
Russia
185.2
9.7%
152.5
10.0%
China
100.2
5.2%
76.4
5.0%
Other*
37.6
2.0%
25.7
1.7%
Total
1 917.0
100.0%
1 522.9
100.0%
Central and Eastern Europe (CEE)
For the full year 2021, sales in this segment amounted to EUR 873.1 million, representing 45.5% of Group sales and a YoY
growth of 27.4%. The easing of restrictions during the second half of the year allowed a certain level of recovery in the dine
in channel after almost no activity at all during the first months of the year. EBITDA generated was EUR 196.2 million, EUR
70 million higher than in 2020, representing an EBITDA margin of 22.5%.
This segment shows a strong dynamism and concentrates the largest increase in installed capacity during the year. The
restaurant portfolio reached 1,085 units after increasing by 60 restaurants. At the end of the period, 100% of the region's
establishments were operational.
In the fourth quarter, revenues reached EUR 250.6 million, 46% higher than in the same quarter of 2020. EBITDA was
EUR 55.5 million, representing an EBITDA margin of 22%, 7 p.p. higher than 4Q20.
Western Europe (WE)
Revenues in this segment were EUR 720.9 million, 23.7% higher than in 2020. It is worth highlighting the strong recovery
in Spain, with the reactivation of dine in activity, albeit still with certain restrictions. EBITDA generated amounted to EUR
110.6 million, almost three times the figure generated in 2020, with a strong recovery in all markets. EBITDA margin
reached 15.3%.
The total number of restaurants in the region reached 996 units after the net opening of 22 units. At the end of the period,
98% of the region's outlets were operational.
Revenues in the fourth quarter were EUR 201.5 million, 27% higher than in the same period of 2020. EBITDA reached
EUR 35.5 million, representing an EBITDA margin of 17.6% and an increase of 12 p.p. vs. 4Q20.
Russia
The Russia region generated EUR 185.2 million in revenues in 2021, 21.5% higher than in 2020. EBITDA was EUR 41.3
million, representing a margin of 22.3% and an increase of 2 percentage points year-on-year. Despite the good performance
of the figures, this region has been one of the most affected by the restrictions in recent months with a severe impact on
the dine-in activity.
The installed capacity in the region is 278 restaurants after increasing by 11 units this year. At the end of the year, 100%
of the restaurants were operational.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
13
During the fourth quarter, revenues amounted to EUR 50.0 million, 30% higher than in 4Q20. EBITDA reached EUR 9.4
million, representing a margin of 18.8% and down 2 p.p. compared to the same period of the previous year.
China
The China segment continues to be one of the Group's most dynamic region. Revenues generated during the year
exceeded the EUR 100 million mark for the first time (EUR 100.2 million) after a year-on-year increase of 31.1%. EBITDA
generated also broke records at EUR 28.7 million, representing a margin of 28.7%, a recurring figure since the installed
capacity has reached an adequate size. AmRest currently has 77 restaurants in the region after increasing the portfolio by
5 units in 2021. At year-end 99% of them were operational.
Revenues in the fourth quarter were EUR 25 million, an increase of 11% compared to 4Q20. EBITDA amounted to EUR
6.1 million with a margin of 24%.
Table 2. Revenues and margins generated in the particular markets for the years
ended 31 December 2021 and 2020.
12 MONTHS ENDED
12 MONTHS ENDED
31 December 2021
31 December 2020
Amount
% of sales
Amount
% of sales
Revenue
1917.0
100.0%
1522.9
100.0%
Poland
462.5
24.1%
378.7
24.9%
Czechia
204.0
10.6%
157.8
10.4%
Hungary
122.2
6.4%
92.5
6.1%
Other CEE
84.4
4.4%
56.5
3.7%
Total CEE
873.1
45.5%
685.5
45.1%
Russia
185.2
9.7%
152.5
10.0%
Spain
232.8
12.1%
172.8
11.3%
Germany
128.7
6.7%
119.6
7.9%
France
313.5
16.4%
254.6
16.7%
Other WE
45.9
2.4%
35.8
2.3%
Western Europe (WE)
720.9
37.6%
582.8
38.2%
China
100.2
5.2%
76.4
5.0%
Other
37.6
2.0%
25.7
1.7%
EBITDA
359.1
18.7%
201.7
13.2%
Poland
92.5
20.0%
64.1
16.9%
Czechia
50.5
24.7%
33.4
21.2%
Hungary
32.8
26.9%
19.2
20.7%
Other CEE
20.4
24.1%
10.1
17.9%
Total CEE
196.2
22.5%
126.8
18.5%
Russia
41.3
22.3%
30.8
20.2%
Spain
45.9
19.7%
24.6
14.2%
Germany
26.9
20.9%
(3.7)
(3.1%)
France
31.6
10.1%
13.1
5.2%
Other WE
6.2
13.2%
4.3
12.0%
Western Europe (WE)
110.6
15.3%
38.3
6.6%
China
28.7
28.7%
23.2
30.3%
Other
(17.7)
(47.0%)
(17.4)
(67.8%)
Adjusted EBITDA*
364.9
19.0%
205.5
13.5%
Poland
93.9
20.3%
65.3
17.2%
Czechia
51.5
25.3%
34.2
21.7%
Hungary
33.5
27.4%
19.5
21.1%
Other CEE
20.9
24.7%
10.8
19.0%
Total CEE
199.8
22.9%
129.8
18.9%
Russia
41.7
22.5%
31.0
20.3%
Spain
46.5
20.0%
24.7
14.3%
Germany
27.3
21.2%
(3.3)
(2.8%)
France
31.8
10.1%
13.1
5.1%
Other WE
6.5
14.1%
4.8
13.3%
Western Europe (WE)
112.1
15.5%
39.3
6.7%
China
29.0
28.9%
23.1
30.4%
Other
(17.7)
(47.0%)
(17.7)
(69.1%)
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
14
EBIT
103.1
5.4%
(142.5)
(9.4%)
Poland
30.3
6.5%
(9.5)
(2.5%)
Czechia
24.6
12.1%
7.3
4.6%
Hungary
17.1
14.0%
1.7
1.9%
Other CEE
7.7
9.1%
(6.8)
(12.1%)
Total CEE
79.7
9.1%
(7.3)
(1.1%)
Russia
14.1
7.6%
(2.1)
(1.4%)
Spain
13.6
5.8%
(20.5)
(11.9%)
Germany
(4.5)
(3.5%)
(70.3)
(58.7%)
France
6.1
1.9%
(27.0)
(10.6%)
Other WE
1.5
3.2%
(0.8)
(2.1%)
Western Europe (WE)
16.7
2.3%
(118.6)
(20.3%)
China
11.4
11.4%
3.9
5.1%
Other
(18.8)
(50.2%)
(18.4)
(71.6%)
Table 3. Revenues and margins generated in the particular markets for 3 months
ended 31 December 2021 and 2020.
3 MONTHS ENDED
3 MONTHS ENDED
31 December 2021
31 December 2020
Amount
% of sales
Amount
% of sales
Revenue
539.0
100.0%
397.5
100.0%
Poland
130.3
24.2%
93.8
23.6%
Czechia
62.4
11.5%
36.8
9.3%
Hungary
35.0
6.5%
24.5
6.2%
Other CEE
22.9
4.3%
16.4
4.1%
Total CEE
250.6
46.5%
171.5
43.2%
Russia
50.0
9.3%
38.3
9.6%
Spain
71.7
13.3%
44.9
11.2%
Germany
39.2
7.3%
28.4
7.2%
France
79.4
14.7%
74.2
18.7%
Other WE
11.2
2.1%
10.7
2.7%
Western Europe (WE)
201.5
37.4%
158.2
39.8%
China
25.0
4.6%
22.6
5.7%
Other
11.9
2.2%
6.9
1.7%
EBITDA
98.0
18.2%
46.9
11.8%
Poland
26.6
20.4%
9.7
10.4%
Czechia
15.9
25.5%
6.8
18.3%
Hungary
8.0
22.7%
5.7
23.3%
Other CEE
5.0
21.9%
3.4
20.8%
Total CEE
55.5
22.2%
25.6
14.9%
Russia
9.4
18.8%
7.9
20.8%
Spain
16.1
22.4%
3.9
8.7%
Germany
11.8
30.1%
(3.0)
(10.5%)
France
6.8
8.6%
5.4
7.3%
Other WE
0.7
6.7%
2.3
20.9%
Western Europe (WE)
35.5
17.6%
8.6
5.4%
China
6.1
24.3%
7.2
31.9%
Other
(8.5)
(71.6%)
(2.4)
(35.0%)
Adjusted EBITDA*
99.9
18.5%
48.0
12.1%
Poland
27.3
21.0%
10.1
10.7%
Czechia
16.3
26.2%
7.1
19.2%
Hungary
8.2
23.3%
5.7
23.6%
Other CEE
5.2
22.5%
3.6
21.4%
Total CEE
57.0
22.7%
26.5
15.4%
Russia
9.5
19.0%
7.9
20.8%
Spain
16.3
22.7%
4.0
8.9%
Germany
11.8
30.2%
(2.8)
(10.0%)
France
6.9
8.7%
5.4
7.3%
Other WE
0.8
7.2%
2.3
21.4%
Western Europe (WE)
35.8
17.8%
8.9
5.6%
China
6.1
24.6%
7.1
31.9%
Other
(8.5)
(71.5%)
(2.4)
(35.4%)
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
15
EBIT
28.2
5.2%
(28.9)
(7.3%)
Poland
10.3
7.9%
(10.0)
(10.7%)
Czechia
9.6
15.5%
0.3
0.9%
Hungary
3.3
9.4%
0.4
1.7%
Other CEE
2.6
11.3%
(0.2)
(1.5%)
Total CEE
25.8
10.3%
(9.5)
(5.5%)
Russia
0.9
1.8%
1.1
2.7%
Spain
7.6
10.5%
(6.1)
(13.8%)
Germany
(0.3)
(0.7%)
(12.0)
(42.0%)
France
1.4
1.8%
(3.0)
(4.1%)
Other WE
(0.3)
(2.8%)
0.2
2.6%
Western Europe (WE)
8.4
4.2%
(20.9)
(13.2%)
China
1.7
6.7%
3.2
14.1%
Other
(8.6)
(72.3%)
(2.8)
(40.6%)
Table 4. Reconciliation of the net profit and adjusted EBITDA for years ended 31 December 2021 and 2020
12 MONTHS ENDED
12 MONTHS ENDED
31 December 2021
31 December 2020
Amount
% of sales
Amount
% of sales
Profit/(loss) for the period
35.4
1.8%
(183.7)
(12.1%)
+ Finance costs
48.0
2.5%
61.0
4.0%
– Finance income
(2.8)
(0.1%)
(2.1)
(0.1%)
+/– Income tax expense
22.5
1.2%
(17.7)
(1.2%)
+ Depreciation and Amortisation
236.9
12.4%
253.4
16.6%
+ Impairment losses
19.1
1.0%
90.8
6.0%
EBITDA
359.1
18.7%
201.7
13.2%
+ Start-up expenses*
5.8
0.3%
4.1
0.3%
+/– Effect of SOP exercise method modification
(0.0)
(0.0%)
(0.3)
(0.0%)
Adjusted EBITDA
364.9
19.0%
205.5
13.5%
* operating costs incurred by the company to open a restaurant but before a restaurant starts generating revenue
Table 5. Reconciliation of the net profit and adjusted EBITDA for 3 months ended 31 December 2021 and 2020
3 MONTHS ENDED
3 MONTHS ENDED
31 December 2021
31 December 2020
Amount
% of sales
Amount
% of sales
Profit/(loss) for the period
5.3
1.0%
(23.9)
(6.0%)
+ Finance costs
16.0
3.0%
12.6
3.2%
– Finance income
(1.8)
(0.3%)
(0.5)
(0.1%)
+/– Income tax expense
8.6
1.6%
(17.1)
(4.3%)
+ Depreciation and Amortisation
59.1
11.0%
60.8
15.3%
+ Impairment losses
10.8
2.0%
15.0
3.8%
EBITDA
98.0
18.2%
46.9
11.8%
+ Start-up expenses*
1.9
0.4%
1.1
0.3%
+/– Effect of SOP exercise method modification
(0.0)
(0.0%)
-
-
Adjusted EBITDA
99.9
18.5%
48.0
12.1%
Table 6. Liquidity analysis
YEAR ENDED
31 December 2021
31 December 2020
Current assets
315.9
311.6
Inventory
33.1
26.5
Current liabilities
579.3
478.1
Cash and cash equivalents
198.7
204.8
Trade and other receivables
67.9
60.4
Trade and other accounts payable
287.2
235.4
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
16
Table 7. Balance sheet leverage analysis
YEAR ENDED
31 December 2021
31 December 2020
Non-current assets
1 859.0
1 802.8
Liabilities
1 867.4
1 849.7
Non-current liabilities
1 288.1
1 371.6
Debt
1 474.9
1 532.2
Share of inventories in current assets (%)
10.5%
8.5%
Share of trade receivables in current assets (%)
21.5%
19.4%
Share of cash and cash equivalents in current assets (%)
62.9%
65.8%
Equity to non-current assets ratio
0.17
0.15
Long-term liabilities to equity ratio
4.19
5.18
Liabilities to equity ratio
6.08
6.98
Debt/equity
4.80
5.79
Definitions:
- Share of inventories, trade and other receivables, cash and cash equivalents in current assets – ratio of, respectively, inventories, trade
receivables and cash and cash equivalents to current assets;
- Equity to non-current assets ratio – equity to non-current assets;
- Non-current liabilities to equity – non-current liabilities to equity;
- Liabilities to equity – liabilities and provisions to equity;
- Debt/equity – total non-current and current interest bearing loans and borrowings.
Alternative Performance Measures (APM) description
APM are metrics used by the company to describe operational or financial performance taking into account some key
information or constituent and adjusting them based on the purpose of such measure. AmRest identifies the following
Alternative Performance Measures in the Director’s Report:
1. Like-for-like or Same Store Sales (“LFL” or “SSS”) – represents revenue growth from comparable restaurants
(restaurants that have been operating for a period of longer than 12 months). The measure shows the ability of a
restaurant or a brand to increase its sales organically. It can be totalled the most accurately by taking the last
twelve months core revenue growth minus the last twelve months net equity openings growth.
2. EBITDA – One of Key Performance Indicators for the Group. It is an close indicator of the cash profitability on
operations and consists of profit from operations excluding amortization and depreciation costs as well as
impairments. Reconciliation of the measure is provided in tables 4 or 5.
3. Adjusted EBITDA – Measures profitability performance without startup costs (operating costs incurred by the Group
to open a restaurant but before a restaurant starts generating revenue), indirect tax adjustments, M&A related
expenses (all material expenses connected with successful acquisitions, covering all professional services, legal,
financial, and other directly connected with a transaction) and effect of Stock Option Plan (SOP) exercise method
modification (difference in the accounting costs of employee benefits accounted for under the cash settled versus
equity settled option plan). It allows to present profitability for restaurants that already generate revenue and without
some unusual costs related to M&A, tax adjustments or accounting adjustments related to SOP. Reconciliation of
this APM is provided in tables 4 or 5.
4. Net debt – measures the level of external financing provided for the business as a sum of balance sheet positions
of loans and borrowings, including financial lease liabilities pre-IFRS 16, net of available cash and cash equivalents,
and guarantees.
5. Leverage ratio - measures the level of EBITDA calculated according to the financing agreements with the banks to
net debt. It is a generally accepted level that shows indebtedness of a company relative to its ability to generate
cash and profits from operations
Brands operated by the Group
As at the date of publication of the report, the portfolio of AmRest comprises 2 436 restaurants under franchised brands
such as KFC, Starbucks, Pizza Hut and Burger King, as well as its own brands such as La Tagliatella, Sushi Shop, Bacoa
and Blue Frog. The company also has several virtual brands in its portfolio (Pokaï, Lepieje, ‘Oi Poke, Moya Misa Ramen,
Pierwsze i Drugie, Sushi Tone, Eat’s Fine, Mr. Kebs, Tacos Square, Potato Patata, Viva Salad! and Cremontano.). The
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
17
offer of virtual brands in Poland is available also under Food About concept - an umbrella brand that enables ordering
different virtual brand dishes within one order. Food About holds its own e-commerce that contributes to the Virtual Brands
sales
AmRest is a franchisee of Yum! Brands Inc. for the KFC and Pizza Hut brands. Starting from 1 October 2016 the Group as
a master-franchisee has the right to grant a license to third parties to operate Pizza Hut Express and Pizza Hut Delivery
restaurants (sub-franchise) in countries of Central and Eastern Europe, while ensuring a certain share of restaurants
operated directly by AmRest. Pizza Hut restaurants acquired in France in May 2017, in Germany in July 2017 and in Russia
in June 2018 are operated both by AmRest and its sub-franchisees.
Burger King restaurants are operated on a franchise basis. With effect 1
st
of February 2022, Burger King Europe GMBH
has notified the termination of AmRest´s development agreements of the Burger King brand in Poland, the Czech Republic,
Slovakia, Bulgaria and Romania. Nonetheless, AmRest will continue to operate the 93 Burger King restaurants that it owns
in these countries under the best standards of service and quality, in compliance with the franchise agreements signed,
which will continue to be in force
Starbucks restaurants in Poland, the Czech Republic and Hungary are opened by the companies AmRest Coffee (owned
in 82% by AmRest and 18% by Starbucks). These companies have the rights and licenses to develop and manage
Starbucks restaurants in their respective countries. The license agreements entered into by and between AmRest’s
affiliates and Starbucks EMEA Limited for Poland, Hungary and Czech Republic are set to expire on May 31, 2022 and are
subject to a five year extension. Consistent with AmRest’s long-term commitment to its brand portfolio, AmRest and
Starbucks EMEA Limited are currently negotiating the terms of such extension. Starbucks restaurants in Romania, Bulgaria,
Germany, Serbia and Slovakia are operated by the Group on a franchise basis.
La Tagliatella is one the proprietary brands of AmRest and became a part of its portfolio in April 2011. La Tagliatella
restaurants are operated directly by AmRest as well as by third party entities which operate restaurants on a franchise
basis.
Blue Frog brand became the property of AmRest in December 2012 as a result of acquisition of majority stake in Blue
Horizon Hospitality Group LTD.
Bacoa brand was acquired by AmRest on 31 July 2018, the chain represents premium burger restaurants operated in
Spain through equity and franchise model.
Sushi Shop, a leading European sushi concept, is a proprietary brand of AmRest and became a part of its portfolio through
the acquisition of Sushi Shop Group SAS on 31 October 2018. Sushi Shop restaurants are operated by both AmRest
(equity stores) and AmRest’s franchisees. Sushi Shop network is present in 10 countries and reported within the Western
Europe segment.
Pokaï is a virtual brand added to the Company’s portfolio together with Sushi Shop business on 31 October 2018.
Lepieje and ‘Oi Poke are virtual brands invented and launched in Poland by AmRest in 2019. Moya Misa Ramen, Pierwsze
i Drugie, Sushi Tone and Eat’s Fine virtual brands were introduced to the Polish market by the Company in 2020. Mr. Kebs,
Tacos Square and Potato Patata joined the portfolio of Polish virtual brands in 2021.
Cremontano and Viva Salad! brands were launched in Spain, in 2019 and 2020 respectively.
Quick Service Restaurants (QSR)
Established in 1952, the KFC brand is the biggest, fastest growing and most popular chain of quick
service restaurants serving chicken meals. There are currently about 25 000 KFC restaurants in over
145 countries worldwide.
On 31 December 2021 the Group operated 951 KFC restaurants: 316 in Poland, 114 in the Czech
Republic, 80 in Hungary, 218 in Russia, 93 in Spain, 25 in Germany, 73 in France, 13 in Serbia, 8 in
Bulgaria, 8 in Croatia, 2 in Austria and 1 in Slovenia.
The beginnings of Burger King date back to 1954. Today, Burger King (“Home of the Whopper”)
operates about 18 700 restaurants, serving about 11 million customers in over 100 countries every
day. Almost 100% of Burger King restaurants are run by independent franchisees and many of them
have been managed for decades as family businesses. Burger King brand is owned by 3G Capital.
On 31 December 2021 AmRest ran a total of 93 Burger King restaurants – 47 in Poland, 30 in the
Czech Republic, 2 in Bulgaria, 5 in Slovakia and 9 in Romania.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
18
Casual Dining and Fast Casual Restaurants (CDR, FCR)
La Tagliatella arose from the experience of more than two decades of specialization in the
traditional cuisine of the regions of El Piemonte, La Liguria and La Reggio Emilia. Over the
past year the brand has entertained more than 10 million customers, who delighted in the
most authentic flavours of Italian cuisine.
On 31 December 2021 AmRest operated 235 La Tagliatella restaurants — 230 in Spain, 1 in Germany and 4 in Portugal.
Pizza Hut is one of the largest casual dining restaurant chains in Europe. Inspired by the
Mediterranean cuisine, it promotes the idea of having a good time while enjoying a meal together with
family and friends. It is also one of the biggest brand in the Polish casual dining segment in terms of
sales and the number of transactions. Pizza Hut’s strong position results from consistently
implemented “Pizza and much more!” strategy which assumes extending the brand’s offer by adding
new categories such as pastas, salads, desserts and starters while retaining the position of a leader
and “pizza expert”.
In addition to the well-established Casual Dining format, AmRest focuses now on creating new concepts within the Pizza
Hut family. Meeting guests’ expectations the Fast Casual Pizza Hut Express and Delivery restaurants have been created.
Pizza Hut’s exceptional taste is now being leveraged with speed, convenience and ease, creating an unique customer
experience.
On 31 December 2021 AmRest ran 482 Pizza Hut restaurants – 163 in Poland, 49 in Russia, 26 in Hungary,
17 in Czech Republic, 130 in France, 83 in Germany, 6 in Armenia, 5 in Azerbaijan and 3 in Slovakia.
Inclusion of the Blue Horizon Hospitality Group to AmRest structure in 2012 enriched the CDR
segment brand portfolio with two new positions operating in the Chinese market: Blue Frog Bar &
Grill and KABB. The operation of KABB was ceased in 2021.
Blue Frog Bar & Grill restaurants are serving grilled dishes from the American cuisine and a wide
selection of wines and drinks in a nice atmosphere.
On 31 December 2021 AmRest operated 77 Blue Frog restaurants in China.
Bacoa is a popular premium burger concept in Spain. Since 2010, it has been bringing high quality,
freshly cooked burgers and chips to their loyal fans. Bacoa is passionate about using premium
ingredients and preparing everything by hand, proving every day that fast food can also be good
food with the right approach.
On 31 December 2021, AmRest operated 5 Bacoa restaurants in Spain.
Founded in 1998 Sushi Shop is the leading European chain of restaurants for sushi, sashimi and
other Japanese specialties. It is positioned as a premium brand offering freshly prepared food with
highest quality ingredients.
Sushi Shop has successfully established an international network of company-operated and
franchises stores across 10 countries.
On 31 December 2021, AmRest operated 201 Sushi Shop restaurants (150 in France, 5 in Spain, 1 in Portugal, 11 in
Belgium, 2 in Italy, 3 in Luxemburg, 5 in UK, 11 in Switzerland, 3 in Saudi Arabia and 10 in UAE).
Coffee category
Starbucks is the world leader in the coffee sector with more than 34 300 stores in about 80 countries.
It offers a broad selection of coffees from different parts of the world, as well as teas, soft drinks and
a wide range of fresh snacks and desserts. The store designs and their atmosphere refer to the
coffee heritage and reflect the culture of the neighborhood.
As at 31 December 2021 AmRest operated 387 stores (69 in Poland, 51 in the Czech Republic, 36
in Hungary, 54 in Romania, 14 in Bulgaria, 151 (including 24 licensed stores) in Germany, 9 in
Slovakia and 3 in Serbia).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
19
Virtual Brands
Pokaï is a virtual brand created by Sushi Shop in April 2018. It offers a large range of fresh, healthy
and gourmet poke bowls. Its products are sold through aggregators. Pokaï is present in most of the
countries where Sushi Shop restaurants operate: France, Belgium, Italy, Spain, Switzerland, UK,
Germany and UEA.
Lepieje is one of the virtual brands created within the AmRest's Shadow Kitchen project, which
responds to the latest trends of the global restaurant market. Since December 2019 the brand has
operateed in Wrocław, Poland and it is available on aggregators websites. The brand is inspired by
the dumplings from the different parts of the world.
‘Oi Poke is a virtual brand. It offers exotic bowls with a meat, fish or prawn base and with original and
freshly prepared vegetables. The cuisine comes from Hawaii, where everything "perfect" is called
"'Oi" and that's why the brand is called 'Oi Poke. The brand also contributes to the Shadow Kitchen
project of AmRest. You may order our Oi bowls on aggregators. The Brand has operated in Poland
since December 2019.
For many years ramen has appealed to consumers’ hearts, due to its original ingredients surprising
consumers with its satiety and the way they are served in characteristic bowls. In Japan everyone
has their own style of preparing Ramen. The secret to a delicious ramen is its consequent uniqueness.
The Virtual Brand MOYA MISA RAMEN is tasty and fun! In the preparation process, we play with
different flavors, ingredients and the way of consumption. The brand delights our Polish consumers
in the delivery segment which runs on aggregators and Food About website.
The “Pierwsze I Drugi”" brand is based on the rule of traditional Polish cuisine – the main meal of a day
has to be delicious and satiated, but also should consist of two dishes: the soup and the main course.
The brand is currently available in Poland through aggregator platforms and Food About website.
Viva Salad! is a brand developed exclusively for the delivery channel that offers fresh, healthy and highly
customizable dishes divided into few segments: Viva salads, protein dishes, desserts, milk shakes and
fruit waters and smoothies. The concept was launched in Madrid and Barcelona in June 2020. The dishes
are prepared in selected La Tagliatella locations.
Eat’s Fine is a virtual brand developed in 2020 in Poland, as part of the Food About concept, committed
to responding to specific dietary needs and customer expectations. The brand offers a well-balanced daily
menu for those who are curious about healthy plant-based meals!
Sushi Tone is a virtual brand for Japanese cuisine lovers, developed in 2020 in Poland, as part of the
Food About concept. It offers 8 sets to choose from and all the most popular rolls, including Nigiri and
Futomaki, as well as typical Asian side dishes like Miso soup with tofu or kimchi salad. The brand sources
ingredients from AmRest’s carefully chosen suppliers, offering only products of outstanding quality. Sushi
Tone was created with fast and convenient delivery in mind, and this way the dishes get to the consumer
within 30 minutes from placing the order. Sushi Tone is a part of the AmRest’s Shadow Kitchen concept
and is available through the aggregators sites, as well as via the AmRest’s Food About service.
Cremontano is a premium ice cream brand only available through delivery as a Virtual brand. It offers a
selection of a dozen delicious Italian flavours with an innovative design where even the finest detail has
been taken care of. It provides a fresh image to the brand and highlights the quality of the product. The
concept is present in a few Spanish cities and available through Glovo aggregator.
Mr. Kebs was launched in April 2021 as part of AmRest’s Shadow Kitchen project in Poland. The concept
offers dishes in important CSR category – Doner Kebab. The menu consists of simple dishes such as
tortilla wraps or boxes with mix of kebab meat, vegetables and sauces. Mr. Kebs is available on
aggregator platforms as well as via Food About website.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
20
Tacos Square is a unique proposition for fast food lovers that was launched in September 2021 as an
extension of the already well-selling Mr. Kebs. The category is already popular in western Europe (French
tacos) and has just started developing in Poland which makes our brand innovative on the Polish market.
French taco as a dish is something in between a kebab, a panini and a burrito, and consists of a protein,
French fries, melted cheese, sauces, and various toppings such as pickles or green onions. In this
concept we offer a range of higher price items than in Mr. Kebs and deliver our usual great quality,
innovation and abundance. Tacos Square is a part of Food About shadow kitchens and is available on
aggregators as well as on Food About website.
Potato Patata – a fries-based concept that was introduced in August 2021 that offers simple dishes with
a base of fries but with various toppings, a category called “loaded fries”. It offers a reasonably low range
of prices range and makes a great offer for a quick tasty lunch. It can be also ordered to share with
friends or family at different gatherings. Potato Patata as a brand is fun and sociable, we keep the range
unique offering combinations such as fries with bacon, sour cream, and fresh chives. The brand is a part
of the AmRest’s Shadow Kitchen concept and is available through the aggregators sites, as well as via
the AmRest’s Food About service.
Key investments
In the overall strategy of AmRest, the capital expenditure related mainly to the development of the restaurant network. The
Group increased the scale of the business through the construction of new restaurants, the acquisition of restaurant chains
from third parties as well as reconstruction and replacement of assets in the existing stores. Each year, the Group’s capital
expenditure depends mainly on the number and type of restaurants opened as well as the scale and profile of M&A
activities.
In 2021 AmRest’s capital expenditure increased by 38.9% with respect to 2020. This increase has accompanied the gradual
recovery in the business activity and the completion of the balance sheet deleverage objective. It was particularly significant
during the last quarter of the year and financed from internal cash flows.
The table below presents purchases of property, plant and equipment, intangible assets as well as the value of acquired
goodwill in 12 months ended 31 December 2021 and 31 December 2020.
Acquisition of property, plant and equipment, intangible assets as well as the value of acquired goodwill in AmRest
YEAR ENDED
31 December 2021
31 December 2020
Intangible assets:
9.3
6.5
Licenses for use of Pizza Hut, KFC, Burger King, Starbucks
trademarks
4.2
3.2
Other intangible assets
5.1
3.3
Goodwill
-
-
Property, plant and equipment:
94.4
68.2
Land
-
-
Buildings and expenditure on development of restaurants
9.2
6.8
Machinery & equipment
15.4
8.6
Vehicles
-
0.2
Other tangible assets (including assets under construction)
69.8
52.6
Total
103.7
74.7
AmRest’s New Restaurants
AmRest equity
restaurants
AmRest franchisee
restaurants
Total
31.12.2020
1 860
478
2 338
New Openings
109
38
147
Acquisitions
0
0
0
Closings
(32)
(17)
(49)
Conversions
(15)
15
0
31.12.2021
1 922
514
2 436
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
21
On 31 December 2021, AmRest operated 2,436 restaurants, including 514 restaurants which are managed by franchisees.
Compared with 31 December 2020, the Group runs 98 more restaurants. 147 new restaurants were opened and 49 closed.
The openings breakdown is: 66 restaurants in Central and Eastern Europe, 20 in Russia division, 53 in Western Europe
and 8 in China.
Number of AmRest restaurants (as at 31 December 2021)
Countries
Brands
31.12.2020
31.03.2021
30.06.2021
30.09.2021
31.12.2021
Poland
Total
565
566
573
579
600
KFC
296
297
301
306
316
BK
45
45
46
46
47
SBX
68
68
68
68
69
PH equity
151
151
151
151
156
PH franchised
1
1
2
3
7
Shadow Kitchen
4
4
5
5
5
Czech Republic
Total
202
203
205
206
212
KFC
109
109
109
110
114
BK
25
26
28
28
30
SBX
51
51
51
51
51
PH
17
17
17
17
17
Hungary
Total
133
133
134
139
142
KFC
73
73
73
77
80
SBX
34
34
35
36
36
PH
26
26
26
26
26
Russia
Total
262
258
261
265
267
KFC
206
206
210
214
218
PH equity
21
20
20
20
19
PH franchised
35
32
31
31
30
Bulgaria
Total
24
24
24
24
24
KFC
8
8
8
8
8
BK
2
2
2
2
2
SBX
14
14
14
14
14
Serbia
Total
15
15
15
15
16
KFC
12
12
12
12
13
SBX
3
3
3
3
3
Croatia
KFC
8
8
8
8
8
Romania
Total
60
61
62
64
63
SBX
54
55
55
55
54
BK
6
6
7
9
9
Slovakia
Total
15
15
16
17
17
SBX
8
8
8
9
9
PH
3
3
3
3
3
BK
4
4
5
5
5
Armenia
PH franchised
3
3
3
5
6
Azerbaijan
PH franchised
2
3
4
4
5
Spain
Total
334
331
330
329
333
TAG equity
72
70
69
69
70
TAG franchised
161
160
159
159
160
KFC
84
86
89
91
93
Blue Frog equity
3
3
2
-
-
Blue Frog franchised
1
1
1
-
-
Bacoa equity
1
1
1
1
1
Bacoa franchised
6
4
4
4
4
Sushi Shop equity
4
4
3
3
3
Sushi Shop franchised
2
2
2
2
2
France
Total
330
332
340
343
353
TAG equity
3
1
-
-
-
PH equity
14
13
10
3
2
PH franchised
109
110
114
121
128
KFC
72
72
73
73
73
Sushi Shop equity
96
100
105
108
111
Sushi Shop franchised
36
36
38
38
39
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
22
Countries
Brands
31.12.2020
31.03.2021
30.06.2021
30.09.2021
31.12.2021
Germany
Total
262
266
266
264
260
SBX
132
134
134
132
127
SBX licensed
22
24
24
24
24
TAG equity
2
2
1
1
1
KFC
26
24
24
25
25
PH equity
8
8
8
7
6
PH franchised
72
74
75
75
77
Austria
KFC
2
2
2
2
2
Slovenia
KFC
1
1
1
1
1
Portugal
Total
6
6
4
5
5
TAG equity
3
3
3
4
4
Sushi Shop franchised
3
3
1
1
1
China
Total
72
73
76
78
77
Blue Frog equity
65
65
67
67
66
Blue Frog franchised
6
7
9
11
11
KABB
1
1
-
-
-
Belgium
Total
11
11
11
11
11
Sushi Shop equity
5
5
5
5
5
Sushi Shop franchised
6
6
6
6
6
Italy
Total
2
2
2
2
2
Sushi Shop equity
1
1
1
1
1
Sushi Shop franchised
1
1
1
1
1
Switzerland
Sushi Shop equity
9
10
10
11
11
Luxembourg
Sushi Shop equity
3
3
3
3
3
Netherlands
Sushi Shop equity
-
-
-
-
-
UK
Sushi Shop equity
5
5
5
5
5
UAE
Sushi Shop franchised
9
10
10
10
10
Saudi Arabia
Sushi Shop franchised
3
3
3
3
3
Total AmRest
2 338
2 344
2 368
2 393
2 436
Planned investment activities
During 2020, as a result of the COVID-19 outbreak, AmRest’s capital expenditure was limited in order to preserve liquidity
in the face of uncertainty posed by the pandemic, and the devastating effect of widespread mobility restrictions on the
business. Working groups were set up in each market to monitor and control financial impact. Cost-saving initiatives were
also put in place. In addition, to control the leverage, especially after breaking financial covenants. Nonetheless, AmRest’s
strategic direction and commitment remained unchanged: to run a profitable and sustainable business as a foundation for
growth.
The recovery of thriving business activity- reaching new quarterly record sales levels and the completion of the balance
sheet deleverage objective- have opened the door for a change of approach, which during the last quarter of 2021 has
been reflected in a significantly increased CAPEX.
In this respect, the list of AmRest’s working priorities go from increasing and optimizing the restaurant portfolio and to
continuing to make progress in a more efficient capital allocation, to the development of own brands and franchising as key
pillars of growth in the short term. The development of lighter restaurant formats as a way to increase the availability of
new locations across Europe. In addition, the Group intends to continue to pursue its development objectives, increase
scale in supply chain management and lead in digitalisation processes.
Finally, potential acquisitions remain an important factor for AmRest’s growth. The Group is well positioned for any
consolidation or acquisition in the sector that might be identified and would generate long term value for AmRest
shareholders.
Significant events and transactions in 2021
Appointment of new auditor for the years 2021, 2022 and 2023
On 30 June 2021 the Extraordinary General Shareholders' Meeting of AmRest appointed PricewaterhouseCoopers
Auditores, SL as new auditor of the Company and its Consolidated Group for the years 2021, 2022 and 2023. KPMG
remains as auditor for the French subsidiaries.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
23
Extension of Credit Agreement with Bank Polska Kasa Opieki S.A., Powszechna Kasa Oszczędności Bank Polski
S.A., ING Bank Śląski S.A and Česká spořitelna, a.s.
On 13 December 2021 AmRest, AmRest Sp. z o.o. (“AmRest Poland”) and AmRest s.r.o. (“AmRest Czech”) - jointly “the
Borrowers” and Bank Polska Kasa Opieki S.A., Powszechna Kasa Oszczędności Bank Polski S.A., ING Bank Śląski S.A
and Česká spořitelna, a.s. - jointly “the Lenders”, had signed an amendment no. 3 providing an extension of the Senior
Term and Revolving Facilities Agreement dated 5 October 2017, as amended and restated thereafter. Further information
on the Credit Agreement is included in the ‘External debt” section of this report.
Approval of a new Long Term Incentive Plan
On 30 December 2021 AmRest informed that the Board of Directors of the Company has decided to approve a new Long
Term Incentive Plan (“LTI”), which substitutes previous management and incentive stock options programs functioning at
AmRest.
The LTI provides the potential delivery of shares of the Company to members of the management team and other relevant
personnel of AmRest, as long as certain conditions are met. The main terms and conditions of the LTI, such as the number
of shares granted, were detailed in the respective regulatory announcement.
External Debt
As mentioned in the Significant Events and Transactions section of this report, AmRest, AmRest Poland and AmRest
Czech had signed on 13 December 2021 with Bank Polska Kasa Opieki S.A., Powszechna Kasa Oszczędności Bank Polski
S.A., ING Bank Śląski S.A and Česká spořitelna, a.s. (the Lenders) an amendment no. 3 providing an extension of the
Credit Agreement dated 5 October 2017.
After evaluating the different funding alternatives available, the Group assessed that extending the maturity of the available
credit facilities at that time with the club banks, was the most optimal option.
Based on the extended Credit Agreement, the amounts of the facilities A, B, E and F (“Credit facilities”) were equal to the
outstanding amounts of Credit facilities, after the scheduled repayments in September 2020 and September 2021, these
were EUR 352mln and PLN 464mln. The repayment schedule is 10% on each 30 September anniversary for the next three
years and the remaining amount is due on 31 December 2024. The Revolving facility D is available with the amount of up
to PLN 450mln and due on December 31
st
, 2024.
Additionally, a new uncommitted credit facility G, up to a maximum amount of EUR 100mln, was agreed. The purpose is
the financing of the general corporate purposes of AmRest Group. All Borrowers bear joint liability for any obligations
resulting from the Credit Agreement.
All the credit facilities are provided at a variable interest rate.
AmRest is required to maintain certain pre IFRS16 ratios at agreed levels, in particular, net debt/EBITDA is to be held
below 3.5x and EBITDA/interest charge is to stay above 3.5.
More information on the external debt, including state supported bank loans taken to mitigate the COVID-19 impact on the
Group’s business, can be found in Note 27 (‘Borrowings’) of the Consolidated Financial Statements.
Shareholders of AmRest Holdings SE
To the best of AmRest’s knowledge as at 31 December 2021 AmRest Holdings had the following shareholder structure:
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%
Artal International S.C.A.
11 366 102
5.18%
Nationale-Nederlanden OFE
9 358 214
4.26%
Aviva OFE
6 843 700
3.12%
Other Shareholders
44 782 407
20.40%
* FCapital Dutch B. V. is the sole shareholder of FCapital Lux (holding directly 56 509 547 AmRest shares) and the subsidiary of Finaccess
Capital, S.A. de C.V. Grupo Finaccess SAPI de CV is the direct majority shareholder of Finaccess Capital, S.A. de C.V. and a subsidiary of
Grupo Far-Luca, S.A. de C.V. The direct majority shareholder of Grupo Far-Luca, S.A. de C.V., Mr. Carlos Fernández González, is a member of
AmRest’s Board of Directors.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
24
Changes in the Parent Company’s Governing Bodies
During the period covered by this Report there were no changes in the composition of the Board of Directors of AmRest.
On 12 May 2021, following the appointment by co-option on July 1, 2020 of Mrs. Mónica Cueva Díaz by the Board of
Directors, the Annual General Shareholders 'Meeting of AmRest resolved to ratify the appointment by co-option and to
appoint Mrs. Mónica Cueva Díaz as a member of the Board of Directors, with the status of independent, for the statutory
term of four years, coming into effect from the date of adoption of the resolution.
On 31 December 2021 the composition of the Board of Directors was as follows:
■
Mr. José Parés Gutiérrez
■
Mr. Carlos Fernández González
■
Mr. Luis Miguel Álvarez Pérez
■
Ms. Romana Sadurska
■
Mr. Pablo Castilla Reparaz
■
Mr. Emilio Fullaondo Botella
■
Ms. Mónica Cueva Díaz
■
Eduardo Rodríguez-Rovira (Secretary, non-Board member)
■
Mauricio Garate Meza (Vicesecretary, non-Board member)
On the day of publication of this Report the composition of the Board of Directors has not changed.
On 13 April, 2021 Board of AmRest reported the appointment of Mr. Luis Comas as new CEO. Mr. Mark Chandler, CEO
of the AmRest Group since May 2019, retired and left AmRest Group effective 30 June 2021.
Remuneration of the Board of Directors and Senior Management Personnel
The remuneration of the Board of Directors and Senior Management Personnel (key management personnel) paid by the
Group was as follows:
31 December 2021
31 December 2020
Remuneration of the members of the Board of
Directors
0.7
0.4
Remuneration of Senior Management Personnel:
- Remuneration received by the Senior Executives
3.3
3.5
- Gain on share-based renumeration systems
-
0.5
Remuneration of Senior Management Personnel
3.3
3.0
Total compensation paid to key management
personnel
4.0
4.4
Directors Remuneration Policy was approved at the general shareholders’ meeting held on 12 May 2021 and will remain
in force until 2023 unless the general shareholders’ meeting so resolves to amend or replace it. The fixed components
accrued during the year by the Directors have not changed with respect to the previous year except for the Executive
Chairman compensation package, which was first implemented in 2021 since the Chairman was granted executive powers
in November 2020, effective January 2021. In 2020, due to the exceptional circumstances caused by the COVID-19
pandemic, the Board of Directors lowered its remuneration by 50%.
The Group’s key management personnel participates in the employee share option plans (note 29). In the year ended 31
December 2021 the provision relating to the options decreased by EUR 4,5 million, due to a significant amount of forfeited
option. In the year ended 31 December 2020 the provision increased by EUR 1.1 million. As mentioned in note 29 in 2021
the Group introduced a new Long-Term Incentive (LTI) Program addressed to members of the management team and
other relevant personnel of the Group.
31 December 2021
31 December 2020
Number of options outstanding (pcs, after split)
4 071 333
6 572 333
Number of available options (pcs, after split)
912 000
445 933
Fair value of outstanding options as at grant date (EUR
millions)
5.4
9.9
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
25
Senior Management Personnel participates also in the Long Term Incentive Plan 2021 introduced on 23
rd
December 2021.
As at 31 December 2020 and 2019, the Company had no outstanding balances with the key management personnel, apart
from accruals for annual bonuses payable in first quarter of the following year. As at 31 December 2021 and 2020 the
Company has not extended any advances to the Board of Directors or senior management personnel and had no pension
fund, life insurance or other such commitments with these parties, except for the share option plans detailed above and in
note 31. As at 31 December 2021 and 31 December 2020 there were no liabilities to former employees.
Changes in the number of shares held by members of the Board of Directors
During the year 2021 there were no changes with respect to AmRest shares and stock options held by the members of the
Board of Directors of AmRest.
On 31 December 2020 Mr. Carlos Fernández González (member of the Company’s Board of Directors) held through its
closely associated person, FCapital Dutch B.V., 147 203 760 shares of the Company with a total nominal value of EUR 14
720 376.
On 31 December 2021, Mr. Carlos Fernández González still owned 147 203 760 AmRest’s shares with a total nominal
value of EUR 14 720 376 through FCapital Dutch B.V.
On 31 December 2020 Mr. Carlos Fernández González held through his another closely associated person - Finaccess
México, S.A. de C.V., Sociedad Operadora de Fondos de Inversión, 1 172 145 AmRest shares with a total nominal value
of EUR 117 214.5.
On 31 December 2021 he still owned through Finaccess México, S.A. de C.V. 1 172 145 AmRest shares with a total
nominal value of EUR 117 214.5.
The direct holder of the shares is Latin 10, SA de CV, a fund independently managed by Finaccess Mexico, S.A. de C.V.
(a subsidiary of Grupo Finaccess).
Transactions on own shares concluded by AmRest
The commencement of the purchase of treasury shares occurred on the basis of Resolution No. 7 of the General Meeting
of the Company of 19 May 2015 concerning the authorization from the Management Board to acquire treasury shares in
the Company and the establishment of reserve capital and (replacing it) Resolution No. 9 of the General Meeting of the
Company of 6 June 2018 concerning the authorization from the Board of Directors for the derivative acquisition of the
Company’s own shares made directly by the Company or indirectly through its subsidiaries as well as for the sale of its
own shares.
The Company was acquiring the own shares for the purposes of execution of stock option programs: Employee Stock
Option Plan and Management Incentive Plan.
In the period between 1 January 2021 and 31 December 2021, AmRest didn’t purchase any of its own shares. During the
same period, the Company disposed a total of 252,045 own shares with a total nominal value of EUR 25,204.5 and
representing 0.1148% of the share capital to entitled participants of the stock options plans. Disposal transactions under
these plans were executed in three settlement methods, which impacted the sale price. A major part of the shares was
transferred to the participants free of charge. As of 31 December 2021 AmRest held 371,416 of its own shares with a total
nominal value of EUR 37,141.6 and representing 0.1692% of the share capital.
The subsidiaries of AmRest Holdings SE do not hold any of the Company’s shares.
Dividends paid and received
In the period covered by this report the Group has paid dividend to non-controlling interest of SCM Sp. z o.o. totalling the
amount of EUR 1.3 million.
Average period of payment to suppliers
Pursuant to Law 15/2010 of July 5, which stipulates measures to combat late payments in commercial transactions, the
information on the average period of payment to suppliers of AmRest and its Spanish subsidiaries at 31 December 2021
and 2020 is as follows:
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
26
2021
2020
Number of days:
Average period of payment to suppliers
41.1
48.9
Ratio of payments
42.8
41.8
Ratio of outstanding invoices
26.2
107.9
Millions of EUR:
Total payments
154.4
138.9
Outstanding invoices
16.7
16.5
The payments to suppliers of the Spanish consolidated companies reflected in the above table are trade payables as they
relate to goods and services.
Subsequent events
On 1 February 2022 Burger King Europe GMBH has notified AmRest about the termination of the development agreements
of the Burger King brand in Poland, the Czech Republic, Slovakia, Bulgaria and Romania effective as of the same day.
AmRest will continue to operate 93 Burger King restaurants that it owns in mentioned territories under the best standards
of service and quality, in compliance with the franchise agreements signed, which will continue to be in force. Therefore,
the revenues, EBITDA and total assets of AmRest will not be significantly affected by the termination of the development
agreements.
Factors impacting the Group’s development
The Board of Directors of AmRest believes that the following factors will have a significant effect on the Group’s future
development and results.
External factors
■
competitiveness – in terms of prices, quality of service, location and quality of food,
■
demographic changes,
■
consumer habits and trends, i.e. the number of people using the restaurants,
■
number and location of the competitors’ restaurants,
■
changes in the laws and regulations which have a direct effect on the functioning of the restaurants and the
employees employed therein,
■
change in real estate rental costs and related costs,
■
changes in the prices of ingredients used to prepare meals and changes in the prices of packaging materials,
■
changes in the general economic and political condition in all countries where the business is run,
■
changes in consumer trust, the amount of disposable income and individual spending patterns,
■
changes in legal and tax determinants,
■
adverse changes on the financial markets.
■
situation around COVID-19 pandemic, including the progress and efficiency of medical treatments
Internal factors
■
gaining and training the human resources necessary for the development of the existing and new restaurant
networks,
■
obtaining attractive locations,
■
effective launching of new brands and products,
■
building an integrated information system.
Basic risks and threats the Group is exposed to
The Board of Directors of AmRest is responsible for the risk management system and the internal control system as well
as for reviewing these systems for operating efficiency. These systems help to identify and manage risks which may prevent
the execution of the long-term objectives of AmRest. However, having these safeguards in place does not ensure
completely against the risk of fraud or against breaking laws. The Board of Directors of AmRest is permanently analyzing
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
27
and reviewing risks to which the Group is exposed. The main current risks and threats have been summarised in this
section. AmRest reviews and improves its risk management and internal control systems on an on-going basis.
Liquidity risk
Liquidity risk is defined as the risk of incurring losses resulting from the inability to meet payment obligations in a timely
manner when they become due or from being unable to do so at a sustainable cost. The Group is exposed to the risk to a
lack of financing at the moment of the maturity of bank loans and bonds.
As of 31 December 2021, the Group has sufficient liquidity to fulfil its liabilities over the next 12 months.
The Group analyses liquidity needs with particular focus on the maturity of debt and proactively investigates various forms
of financing that could be utilised as needed.
Risks related to the COVID-19 and its implications for the economy and society
The COVID-19 pandemic has rapidly spread around the world. Most governments are taking constrain measures to contain
the spread, which includes isolation, confinement, quarantine and restrictions to the free movement of people and the
closure of public and private facilities.
This situation is significantly affecting the global economy, including HORECA sector, and the AmRest Group is not immune
to this.
Visible results of the COVID-19 outbreak include the decrease in demand, the disruption or slowdown of supply chains and
a significant increase in economic uncertainty, the increase of volatility in the price of assets, exchange rates and a
decrease in long term interest rates. Possible results of the COVID-19 outbreak may include changes in the market
environment, people´s behaviours and ways of living.
The COVID-19 pandemic has a particularly negative impact on the restaurants sectors. The ban or significant limitations
in operation of restaurants resulted in a decrease in business activity and customer demand and consequently decrease
in revenues.
Group management is closely monitoring the development of the situation and looks for the ways of mitigating the impact
of COVID-19 spread on the Group. In addition, the Group implemented additional measures to mitigate the risk of infection
among its employees, including in particular:
■
Providing detailed instructions and guidelines on monitoring the health of the Group’s employees and the health
of Group’s customers.
■
Strengthening already stringent hygiene, cleaning and sanitation procedures and introducing contactless options
that protect both employees and guests in restaurants.
■
Providing the restaurant employees with additional personal protection and hygiene supplies.
■
Requesting to reduce the number of meetings as well as domestic and foreign business travel, and to use
teleconferencing and video-conferencing facilities to the largest extent possible, as well enabling remote work.
Lease agreements and continuation options
Almost all AmRest restaurants operate in leased facilities. The majority of the leases are long-term and they are usually
concluded for at least 10 years from the date of commencing the lease (assuming that all continuation options are
exercised, on specified terms, and not including contracts which are subject to periodic renewal, unless they are terminated,
and contracts concluded for an indefinite period). A number of lease grant AmRest the right to prolong the contract provided
that the Company complies with the terms of rental. Regardless of whether the terms are complied with or not, there is no
guarantee that AmRest will be able to prolong a lease on terms deemed satisfactory for the Group. If this is not possible a
potential loss of important restaurant locations may have an unfavorable effect on AmRest’s operating results and its
business activities.
As a consequence of the pandemic and lack of business activity or relatively lower activity in certain locations, the Group
performed reviewed of its rental agreements and has entered into negotiations with landlords. One of the outcomes may
be that some locations would need to be closed due to worsened economics and the lack of a mutual agreement between
the parties. Terminating the relevant rental contract on cost effective terms may prove impossible. This situation may also
have an adverse effect on the business activities and operating results of the Group. Additionally, closing any of the
franchised restaurants is subject to the approval by the franchisor and it is not certain that such approval will be obtained.
In the case of Russian and Chinese restaurants acquired by AmRest between July 2007 and December 2012 respectively,
the average term of the rental contracts is relatively shorter compared to AmRest restaurants in other countries. This results
from the specific nature of these markets.
Dependency on the franchisor
AmRest manages KFC, Pizza Hut, Burger King and Starbucks (in Romania, Bulgaria, Germany and Slovakia) as a
franchisee, and therefore a number of factors and decisions related to the business activities conducted by AmRest and
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
28
the possibility of renewing or extending the duration of the franchise agreements, depend on the limitations or specifications
imposed by the franchisors or on their consent.
Therefore, in relation to the duration of those agreements, the renewal is not automatic and AmRest cannot guarantee that
after the expiry of the initial periods of duration of the franchise agreements, which are typically ten years, a given franchise
agreement will be extended. In the case of KFC and Pizza Hut, AmRest and Yum are in continuous dialogue with respect
to current and further cooperation.
In the case of Burger King, despite the termination by Burger King Europe GMBH of the development agreement, the
franchise agreements for the operation by AmRest of the Burger King restaurants in Europe remain in force in accordance
with their established terms and conditions. In relation to Starbucks, the license agreements entered into by and between
AmRest’s affiliates and Starbucks EMEA Limited for Poland, Hungary and Czech Republic are set to expire on May 31,
2022 and are subject to a five year extension. Consistent with AmRest’s long-term commitment to its brand portfolio,
AmRest and Starbucks EMEA Limited are currently negotiating the terms of such extension
Dependency on cooperation with minority shareholders and Starbuck’s call option
AmRest operates Starbucks restaurants in Poland, the Czech Republic and Hungary based on partnership agreements
with Starbucks Coffee International, Inc. The partnerships assume Starbucks Coffee International, Inc. is the minority
shareholder of companies operating Starbucks stores in mentioned countries. Therefore, some decisions as part of the
joint business activities are dependent on Starbucks’ consent.
If AmRest fails to comply with the obligation to open and run the minimum specified number of cafés, Starbucks Coffee
International, Inc. has the right to increase its share in these companies by acquiring shares from AmRest Sp. z o.o. at a
price agreed between the parties based on the valuation of the companies.
No exclusivity rights
International Franchise Agreements per se do not typically grant exclusivity rights to the franchisee in the relevant territories.
In order to secure exclusivity rights for a certain territory, franchisees aim to have either a master franchise agreement or
a development agreement with the franchisor. Currently, AmRest does not have master franchise agreements or
development agreements in all territories and cannot secure that it will have exclusivity on certain territories.
Risks related to the consumption of food products
Changes in consumer preferences arising from concerns over the nutritious properties of chicken, which is the main
ingredient in the KFC menu, or as a result of unfavorable information being circulated by the mass media concerning the
quality of the products, could pose a threat to the Group. Furthermore, diseases caused by these (ie food poisoning) and
damages to health as a result of eating in AmRest restaurants and restaurants of other franchisees of KFC, Pizza Hut,
Burger King, Starbucks, La Tagliatella, Blue Frog, Bacoa and Sushi Shop, and as a result of revealing unfavorable data
prepared by the government or a given market sector concerning the products served in AmRest restaurants and
restaurants of other franchisees of KFC, Pizza Hut, Burger King, Starbucks, La Tagliatella, Blue Frog, Bacoa and Sushi
Shop, health-related issues and issues related to the functioning patterns of one or more restaurants run both by AmRest
and the competition could also pose a threat to the Group. The above-mentioned risks are mitigated by using the highest
quality ingredients in AmRest restaurants, which come from reliable and reputable suppliers, in compliance with strict quality
control and hygiene standards and the use of top, modern equipment and processes which ensure the absolute safety of
the dishes.
Risks related to key personnel turnover in the Group and increasing labour costs
AmRest´s success depends, to some extent, on the individual effort of selected employees and key members of
management. The methods of remunerating and managing human resources developed by the Group help ensure a low
rotation of the key personnel. Additionally, the career planning system supports preparing successors ready to execute
tasks in key positions. In the event of turnover, a personnel replacement process will be triggered, minimising to the fullest
extent possible the adverse effect on business activities and the operating results of the Group.
Excessive turnover of employees and too frequent changes in managerial positions may pose a significant risk to the
stability and quality of the business activities. Due to the fact that salaries in the HORECA sector are still relatively lower
than in other branches, there is a risk of the outflow of qualified staff. In this regard, the Company is constantly evaluating
the competitiveness of the remunerations offered to minimize the risk and to remain market competitive. An additional risk
in the employment area may be caused by fluctuations in the unemployment rate in a given market.
Risks related to limited access to foodstuffs and the variability of their cost
AmRest´s situation is also affected by the need to ensure frequent deliveries of fresh agricultural products and foodstuffs
and anticipating and responding to changes in supplies costs. The Group cannot rule out the risk related to delivery
shortage or interruptions caused by factors such as unfavorable weather conditions, changes in legal regulations or
withdrawing some foodstuffs from trading. Also the increased demand for certain products accompanied by limited supply
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
29
may lead to difficulties in obtaining these by the Group or to relevant price increases. Both the shortages and product price
increases may have an adverse effect on the Group‘s results, operations and financial standing. In order to mitigate this
risk (among others) AmRest Sp. z o.o. signed a contract with SCM Sp. z o.o. for the provisions of services comprising
intermediation and negotiating terms of delivery to restaurants, including negotiating terms of distribution agreements.
Risks related to opening restaurants in new countries
Opening or taking over restaurants operating in a new geographical and political area involves the risk of varying consumer
preferences, a risk of insufficient knowledge of the market, the risk of legal restrictions arising from local regulations and
the political risk of these countries.
Currency risk
The results of AmRest are exposed to currency risk related to transactions and exchanges into currencies other than the
currency in which business transactions are measured in the individual Capital Group companies. The Group adjusts its
currency portfolio of debt to the geographical structure of its profile of activities. Additionally, AmRest uses forward contracts
to secure transaction risks on a short-term basis.
Risks related to the current geopolitical situation
The Company conducts its business in countries where political climates are uncertain. Tensions around that subject may
result in a negative impact on economy, including instable currency, interest rates, liquidity, supply chain disruptions and
consumer confidence deterioration. All these events and uncertainty that accompanies them may have a significant impact
on the Group’s operations and financial position, the effect of which is difficult to predict. The future economic and regulatory
situation may differ from the Management’s expectations however it is being monitored in order to adjust strategic intentions
and operational decisions, which will minimize business risks.
Risk of increased financial costs
AmRest and its subsidiaries are exposed to a certain extent to adverse impact of interest rate fluctuations in connection
with obtaining financing which bears floating interest rates and investing in assets bearing floating interest rates. The
interest rates of bank loans and borrowings and issued bonds are based on a combination of fixed and floating reference
rates which are updated over periods shorter than one year. Additionally, AmRest and its subsidiaries may, as part of the
interest rate hedging strategy, enter into derivative and other financial contracts, where the valuation of which is significantly
affected by the level of reference rates.
Increases in the cost of commodities, raw materials and goods
Increases in the cost of commodities, raw materials and goods can have an adverse impact on Group's operating profit
margins. In order to mitigate these risks, the Group has implemented sourcing strategies, periodical tender procedures,
and established preventative controls to monitor deviations in actual expenditure, monitoring of pricing trends, and active
review of tender processes.
Tax risk
In the process of managing and making strategic decisions, which can affect the tax settlements, AmRest is exposed to
tax risk. In the event of irregularities occurring in tax settlements increase of the risk of dispute in the case of a potential tax
control. As part of minimising this risk, AmRest works to deepening the knowledge of its employees in the area of tax risk
management and compliance with respective to the legal requirements of the different countries the Group is based in..
The Company implements adequate procedures to facilitate the identification and subsequent reduction or elimination of
risks in the area of tax settlements. Moreover, in connection with frequent legislative changes, the inconsistency of
regulations, as well as differences in the interpretation of legal regulations, AmRest uses professional tax advisory services
and applies for binding interpretations of the tax law provisions. Current fiscal supervisions are presented in Note 33 to the
Consolidated Financial Statements as for the year ended 31 December 2021.
Credit risk
Exposure to credit risk include cash and cash equivalents and trade and other receivables. With the development of
franchise business, AmRest is getting exposed more to credit risk. Therefore the quality of the franchisees portfolio is a
key priority.
Risks of economic slowdowns
Economic slowdown in the countries where AmRest runs its restaurants may affect the level of consumption expenditure
in these markets, which in turn may affect the results of the AmRest restaurants operating in these markets.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
30
Risk of system breakdowns and temporary breaks in serving customers in restaurants
Risk of systems failures and communication network failure, as well as the potential partial or complete loss of data in
connection with system breakdowns or damage or loss of key tangible fixed assets of the Group might result in temporary
interruptions in serving customers in restaurants, which might have an adverse effect on the Group’s financial results. In
order to minimise this risk, the Group has implemented appropriate business continuity procedures and disaster recovery
plans in order to ensure the stability and reliability of its IT systems.
Cyberattack risk
The Group’s operations are supported by a wide variety of IT systems, including point-of-sale systems, electronic ordering
platforms, supply-chain management systems and finance and controlling tools. Consequently, the Group is exposed to
the risk of temporary operational disruption, data integrity risk and/or unauthorised access to confidential data, which may
be a result of cyberattacks. In order to mitigate these risks, the Group established a specialized IT-security unit and
implemented appropriate cybersecurity risk mitigation tools, including security polices, personnel training and technical
prevention countermeasures.
Global crisis and disruption
The risk of global disruption to the Group's business, industry or economy as a consequence of global disasters, such as
health epidemics, economic crises, energy crises, extreme weather events, or other critical events which, could impact on
the Group's day to day business concerns. In response to such events the Group has developed a Business Continuity
and a Crisis Management System, incorporating a crisis prevention mechanism, early detection and warning system with
an advance incident processing and crisis management framework
Remaining factors outside the Group’s control
This risk is related to the effect of factors remaining outside the Group’s control on AmRest’s development strategy which
is based on opening new restaurants. Such factors include: opportunities for finding and securing available and appropriate
locations for restaurants, the ability to obtain the permits required by relevant bodies, the possibility of delays in opening
new restaurants.
Activity in Research and Development area
The Group wants to serve to its customers the highest quality products that are balanced in terms of taste and nutritional
composition. According to the business trends and customer needs, all brands operated by the Group have set up
departments focusing on new product development, as well as the improvement of the existing products.
Activities in this area include for example: market researches, the careful selection of ingredients and packaging, the
creation and preparation of new products, tastings followed by collection of customers feedbacks and, ultimately, the launch
of the final products.
The statements contained in this Director’s Report may contain certain forward-looking statements relating to the Group
that are based on the beliefs of the Group’s management as well as assumptions made by and information currently
available to the Group’s management and are not a guarantee of future performance or developments. These forward-
looking statements are, by their nature, subject to significant risks and uncertainties. The Group does not intend to update
or otherwise revise such forward-looking statements, whether as a result of new information, future events or otherwise.
Reliance on any forward-looking statements involves known and unknown risks and uncertainties and, accordingly,
readers are strongly cautioned to not place reliance on any forward-looking information or statements.
Non-financial
Information Statement
AmRest Holdings SE capital Group
28 FEBRUARY 2022
Non-financial Information Statement
According to the Royal Decree-Law 11/2018 of 28 December, relating to non-financial information and diversity, the Board
of Directors of AmRest Holdings SE is issuing this Non-financial Information Statement (NFIS) for the 2021 Financial Year
as part of the Consolidated Directors’ Report, which is presented with Consolidated Annual Accounts. This statement has
a public character and may be reviewed on the following website: www.amrest.eu.
For the purposes of this document, the following should be understood to mean the same: AmRest Holdings SE, AmRest,
the AmRest Group and the Group. The reporting scope is from 1 January 2021 to 31 December 2021. All the data is
presented as of 31 December 2021 unless stated otherwise.
The statement is an independent part of the Consolidated Directors’ Report for 2021 and includes information concerning
all the subsidiaries of AmRest Holdings SE. In the cases where the data presented does not apply to all AmRest units, the
scope is specified exactly. As of 31 December 2021, AmRest operated 2 436 equity and franchised restaurants and coffee
houses in 25 countries, and the Group’s registered office was Paseo de la Castellana 163 (10
th
floor), 28046 Madrid, Spain.
Although the franchised restaurants of AmRest are a part of its portfolio, the Group does not disclose information regarding
these restaurants, as they are operated by third parties.
The following NFIS has been prepared in accordance with the GRI Sustainability Reporting Standards (used when
appropriate to present quantitative information), which are listed in the table at the end of the statement. The material topics
covered in the following document were diagnosed during the materiality analysis, as further explained in Section 3
(Materiality analysis) herein.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
36
AmRest's business model and operations in 2021
AmRest Holdings SE with its subsidiaries is Europe's leading listed restaurant operator with a portfolio of leading brands in 25
countries. The Group delivers exceptional food and excellent service, winning the hearts of 30 million guests every month. AmRest
operates franchised brands such as KFC, Starbucks, Pizza Hut and Burger King, as well as proprietary brands such as La
Tagliatella, Sushi Shop, Blue Frog and Bacoa. In addition, AmRest also has several virtual brands in its portfolio. The offer of
virtual brands in Poland is available also under Food About concept - an umbrella brand that enables ordering different virtual
brand dishes within one order. Food About holds its own e-commerce that contributes to Virtual Brands sales.
Currently, AmRest operates 2 436 restaurants in 25 countries: Armenia, Austria, Azerbaijan, Belgium, Bulgaria, China, Croatia,
the Czech Republic, France, Germany, Hungary, Italy, Luxembourg, Poland, Portugal, Romania, Russia, Saudi Arabia, Serbia,
Slovakia, Slovenia, Spain, Switzerland, the UAE and the UK.
AmRest’s operations are well-diversified across five main categories of the restaurant industry:
■
Quick Service Restaurants (“QSR”), represented by KFC and Burger King
■
Fast Casual Restaurants (“FCR”), represented by Pizza Hut Fast Casual Dine In, Sushi Shop and Bacoa
■
Casual Dining Restaurants (“CDR”), represented by Pizza Hut Dine In, La Tagliatella, Blue Frog
■
Coffee category, represented by Starbucks
■
Virtual brands, whose offer is available only online, represented by Pokaï, Lepieje, ‘Oi Poke, Moya Misa Ramen, Pierwsze
i Drugie, Sushi Tone, Eat’s Fine, Mr. Kebs, Tacos Square, Potato Patata, Viva Salad! and Cremontano.
Business strategy
AmRest’s business approach to running a multi-branded company is based on crucial elements that have been at the center of
company’s attention; managing a profitable, sustainable operation to deliver growth.
Purpose
Service is our recipe for winning.
Vision
To become the European leader who inspires the global restaurant industry.
Mission
Winning our guest’s hearts through unique service, product and experience in our restaurants, delivered by passionate
AmRestees, makes our scalable and sustainable brands thrive.
Table. Brands operated by AmRest in 2021
Proprietary brands
Franchise brands
Virtual brands
La Tagliatella
Sushi Shop
KFC
Starbucks
Pokaï, Lepieje, ‘Oi Poke, Moya Misa
Ramen, Pierwsze i Drugie, Sushi Tone,
Eat’s Fine, Mr. Kebs, Tacos Square, Potato
Patata, Viva Salad! and Cremontano
Blue Frog
Bacoa
Pizza Hut
Burger King
Table. Restaurant count
Brand
Restaurant count (total)
Self-owned restaurants
Franchise restaurants
KFC
951
951
-
Starbucks
387
363
24
Pizza Hut
482
229
253
Burger King
93
93
-
La Tagliatella
235
75
160
Sushi Shop
201
139
62
Blue Frog
77
66
11
Bacoa
5
1
4
Virtual brand outlets
5
5
-
Total number of restaurant
and coffee houses
2 436
1 922
514
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
37
Materiality analysis
In 2020, AmRest conducted a comprehensive materiality analysis to identify the social, environmental and ethical issues relevant
to defining its approach to sustainability. These issues were included in AmRest Non-financial Information Statement for 2020.
In 2021, AmRest conducted an internal review of the materiality matrix. AmRest Management Team and heads of key functions
assessed and prioritized 20 material topics in 5 areas: business model, customer relationships, environment, good governance
and Human Resources. The topics that were evaluated to be material to AmRest, with relevant Key Performance Indicators, have
been included in this statement.
Infographic. AmRest material topics assessment
Sustainability strategy and governance
In 2021, AmRest updated the Global Sustainability Strategy. The strategy is centred on three pillars – Our Food, Our People and
Our Environment. It applies to all AmRest employees and executives, in every geography, across each brand operated by AmRest.
Infographic. AmRest Global Sustainability Strategy
The strategy is based on global sustainability standards, benchmarks and trends and reflects the existing and forthcoming
legislation applying to ESG (Environmental, Social and Governance) areas.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
38
AmRest defined its sustainability strategy pillars and key initiatives in line with five United Nations Sustainable Development Goals
(SDGs):
Table. Topics covered in AmRest Global Sustainability Strategy
Our Food
Our People
Our Environment
Responsible sourcing
Fair employment practices
Circular economy
Nutrition and balanced choice
Diversity & Equality
Climate change
Food safety
Social engagement
Governance model
Overall ownership of the sustainability strategy rests with the Sustainability, Health and Safety Committee composed of three
independent members of the AmRest Board of Directors. Responsibility for each pillar rests with AmRest Management Team
Members: Chief Food Services Officer (Our Food), Chief People Officer (Our People), and Chief Operations Officer (Our
Environment). The Executive Chairman leads the Social Engagement agenda. The pillar owners are responsible for delivering
the goals and KPIs set under the strategy and for reporting progress to the AmRest Board of Directors.
The member of AmRest Management Team including CEO and global heads of key functions participate in the governance of the
strategy through sessions dedicated to sustainability matters held during regular meetings of the Management Team.
Sustainability-related matters, as well as non-financial reporting, are coordinated globally by the External Communications and
Corporate Affairs department, whose head reports directly to the Executive Chairman.
Infographic. Sustainability-related matters governance
Risk management at AmRest
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
39
AmRest identifies financial and non-financial risks and manages them both at the Group level and at the level of individual
companies. The risk management system, internal control system and the review of the effectiveness of these systems, have
been supervised by each Risk Owner at the company, Chief Risk and Compliance Officer, Risk and Compliance Committee,
Management Team, Audit and Risk Committee and ultimately by the Board of Directors of AmRest Holdings SE.
The Global Risk and Compliance department was established at the beginning of 2021 with the department head reporting directly
to the Audit and Risk Committee Chairman (Board of Directors level). Their key responsibilities include:
■
Promoting and guiding the organization to establish a consistent risk management culture, through adequate
communication, training and awareness building, among all AmRest employees
■
Periodically updating the risk catalogue and the risk map
■
Overseeing the adequate functioning of the Enterprise Risk Management (ERM) System, specifically to the identify,
assess, respond and report to the Audit and Risk Committee critical risks to which the Group is exposed, including
emerging risks.
■
Fostering the implementation of efficient and complete risk response strategies to mitigate or reduce critical risks to which
the Group is exposed, within the risk appetite and tolerance levels approved by the company.
■
Reporting to the Audit and Risk Committee regarding the performance and functioning of the Enterprise Risk
Management.
AmRest’s risk management process begins with the organization’s long-term and short-term objective setting. This leads to the
identification of risks defined as any event which might pose a threat to the fulfilment of these objectives. Risks are assessed on
a periodic basis, at inherent and residual level, based on their expected impact, likelihood and the organization’s vulnerability, and
are prioritized in the risk map.
For all risks identified as critical, the management defines response strategies to mitigate the inherent risk to a reasonable risk
appetite level. The response strategies combine the monitoring of risk performance indicators and the execution of control
activities, which are assessed for operating effectiveness purposes on a periodical basis.
The trends in critical risks performance and the effectiveness of the control activities are reported on a quarterly basis to the Risk
and Compliance Committee and the Audit and Risk Committee. When risks exceed the defined tolerance level, the action plans
implemented to address them are also reported.
Table. Risks that may have a considerable adverse effect on operating areas of AmRest including corruption prevention, environment
protection, respect for human rights and others
2
Risks
3
Adverse impact on the image of the Group or the Brands
Cyber threats
Disruption in the supply chain
ESG priorities not adequately engrained within overall business strategy
Failure to adapt to stakeholders' interests
Failure to foster an ethical culture
Global crisis and disruptions
Inadequate sourcing process
Increase in the cost of commodities, raw material and goods
Key personnel turnover
Non-compliance with internal regulations regarding Health & Safety, Data Protection, Tax or other areas
Quality issues affecting products and services
Threat of financial crime
Through having implemented the Code of Ethics and Business Conduct and the Global Sustainability Strategy, AmRest aims to
minimize among others, exposure to the following risks:
2
Other risks identified by AmRest are presented in the Directors’ Report in section “Basic risks and threats the Group is exposed to”.
3
Listed in alphabetical order.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
40
■
damage to AmRest’s reputation caused by cooperation with suppliers who behave unethically;
■
inadequate response to environmental trends;
■
lack of awareness and sensitivity of managers with regard to the ethics and rules of a responsible business;
■
lack of public knowledge of AmRest’s implementation of practices in the area of ethics and responsible business;
■
major negative impact of the company’s operations on the environment;
■
negative perception of the company by the public in connection with undue care paid by AmRest to social/public interests;
■
unethical practices by AmRest and AmRest employees.
The response to COVID-19 pandemic
The COVID-19 pandemic had a significant impact on the restaurant sector. Periods of closures, bans or significant restrictions on
customer numbers and trading hours were imposed in practically all AmRest markets and limited the company’s ability to operate
to its full potential. Additionally, customers concerns about health and safety influenced their behavior patterns and impacted the
demand for eating out.
With employee and customer health and safety as the priority, AmRest quickly adapted to the changing hygiene and safety
regimes. Additionally, through introducing innovative technological solutions such as contactless payments, online ordering and
curb pick up AmRest managed to maintain its customer base. As a result, the Group was able to successfully navigate through
the pandemic, delivering on its promises to all key stakeholders: employees, customers, investors and business partners.
Responsible sourcing ...................................................................................................................................................................................................... 42
Nutrition and balanced choice ......................................................................................................................................................................................... 42
Food safety ..................................................................................................................................................................................................................... 42
Quality and food safety audits ......................................................................................................................................................................................... 43
Customer relations .......................................................................................................................................................................................................... 43
Our Food
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
42
One of the most relevant topics for AmRest as a food company is to ensure the safety and quality of the products served in its
restaurants and coffee houses. The Group is committed to applying the highest product safety and quality standards throughout
the supply chain and the production process. Wherever possible, fresh products are sourced from local suppliers.
AmRest identified the following key topics in ‘Our Food’ area of its Global Sustainability Strategy:
■
Responsible sourcing
■
Animal welfare
■
Ethical practices
■
Sustainable packaging
■
Nutrition and balanced choice
■
Ingredients
■
Recipes and profile
■
Transparency
■
Food safety
■
Suppliers
■
Logistics
■
Central Kitchen
■
Restaurants
Responsible sourcing
Each supplier cooperating with AmRest must meet strict product quality criteria and requirements for sustainable production
standards, animal husbandry, and crop cultivation. They must also uphold employment standards, respect human rights and
maintain health and safety rules in the workplace.
As of 31 Dec 2021 over 92% of food suppliers in CEE region were signatories of Code of Conduct for AmRest Suppliers,
addressing social and environmental matters such as prevention of child labor, discrimination, health and safety and protection of
the environment. In other regions, suppliers were covered by the requirements and standards set by AmRest franchisors (YUM,
Starbucks, RBI). For example, AmRest KFC operations in Western Europe sourced from suppliers managed by YUM and
maintained their standards.
In 2021, the Food Services Sustainability Project Group, under the leadership of the Chief Food Services Officer, regularly
monitored and addressed crucial supply chain issues at AmRest. The scope of the team’s work included defining and monitoring
progress on issues such as responsible sourcing of raw materials, sustainable packaging, and cage free eggs.
Area
Description
Palm oil
In 2021 AmRest sourced solely RSPO (Roundtable on Sustainable Palm Oil) certified palm
oil globally in 96%
4
of its operations.
Sustainable packaging
In line with relevant EU law, in 2021 AmRest eliminated single-use plastic products e.g.
straws and cutlery in all EU markets. The same solution was introduced in China.
Cage free eggs
In 2021 AmRest completed transition to cage-free eggs in all brands across all EU markets
where the company operates.
Nutrition and balanced choice
AmRest has been working to meet customers’ expectations and needs for wellbeing, nutrition and balanced choice, through varied
menus and specific dietary choices, including vegetarian and vegan products.
Food safety
AmRest places the highest priority on food safety, complying with relevant legislation, standards and codes of practice. Through
programs and training, the Group develops the employee competencies, increases awareness, and manages risk.
AmRest constantly works to establish a food safety mindset and to ensure the right behaviors across the organization.
This objective is achieved through:
■
an order management system that helps restaurant and coffee house managers optimize the quantity of products
they order and to ensure that the inventory is always fresh;
■
applying highly effective, professional cleaning agents/disinfectants as well as specific devices to make dosing more
efficient; continual monitoring of agent concentration to ensure maximum effectiveness;
■
conducting unannounced audits in restaurants by internal and external, independent auditors;
4
Taking into account the number of equity restaurants.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
43
■
designing, constructing and maintaining restaurants, equipment, small wares, and consumables to standards that
allow the company to maintain safety of our products;
■
identifying possible risks and mitigating or eliminating them;
■
implementing and executing strict hygiene, food safety and quality standards and procedures;
■
implementing systems and procedures for the prevention of pest entry and activity;
■
periodic training sessions on hygiene, quality, and food safety maintenance standards;
■
systems designed to track expiration dates and manage inventory rotation;
■
systems for temperature control throughout the supply chain (from producer to restaurant to customer).
Quality and food safety audits
In 2021, Food Safety and Quality Systems, Distribution Center and Transportation audits were conducted for every brand and
market, taking into account location-specific requirements. Additionally, AmRest-operated restaurants and coffee houses were
meticulously audited for hygiene and food safety programs. Individual audit standards and schedules were applied across the
different brands to account for their specific needs.
All audit reports with results were uploaded to an online system and analyzed. If the results were not satisfactory, a Corrective
Action Plan was put in place.
The total number of audits conducted in restaurants and among suppliers in 2021 was 7 687.
Customer relations
Customer feedback plays an extremely important role in AmRest operations worldwide. Guests can give their feedback via phone,
e-mails, letters, online contact forms, customer satisfaction surveys, third party delivery service provider systems, and social
media accounts. They can also voice their opinions directly to the staff at a restaurant, who may invite them to file their comments
in writing.
In stores, customers are invited to take part in an online Customer Satisfaction Survey, which frequency is determined at POS
(point of sale) level. Every operational leader: restaurant or coffee house manager may access the survey results. The guest
satisfaction survey program delivers valuable insights every day, which allow AmRest managers and staff to continuously improve
their service. Based on the customer feedback reports, AmRest restaurant managers set weekly priorities to increase customer
satisfaction at the restaurant, regional, district and market level.
In 2021 AmRest’s equity restaurants and coffee houses handled approx. 220 million transactions.
The total number of complaints received in 2021 was 92 061
5
. The complaint-handling processes are governed by separate
procedures for different markets and are in compliance with local legislation. Each complaint is evaluated by the subject matter
experts and a dedicated Customer Care representative. Based on its nature, the complaint gets assigned to an appropriate grid
tier, which determines the necessary path to follow and the maximum time allowed to solve it. The complaints are resolved by the
AmRest restaurant managers and the whole process is carefully monitored.
Customer satisfaction results are distributed to all AmRest’s restaurant managers every day. Additionally, once a month, each
Brand President communicates the next steps to improve customer satisfaction.
Table. Summary of main documents at AmRest in terms of food-related matters
Name of the document
Food Safety Policy
6
Procurement Procedure [SCM]
7
Food Safety Fundamentals (FSF)
Supplier Approval Procedure
Brand Protection Monitoring System
Supply Sourcing Code of Practice
8
Code of Ethics and Business Conduct
Global Procurement Procedure
5
AmRest ensures support with handling customer inquiries for the franchisees. The number of complaints may contain complaints from franchisee
restaurants, which are not directly run by AmRest.
6
Document under internal approval process.
7
Document under internal approval process.
8
Document under internal approval process.
Work ethics ..................................................................................................................................................................................................................... 45
Occupational health and safety ....................................................................................................................................................................................... 46
Talent Development ........................................................................................................................................................................................................ 46
Equality at AmRest ......................................................................................................................................................................................................... 46
Work-life balance ............................................................................................................................................................................................................ 46
Collective bargaining ....................................................................................................................................................................................................... 47
Social engagement ......................................................................................................................................................................................................... 47
Saving food .................................................................................................................................................................................................................... 47
Strategic partnership – SIEMACHA Spot Wrocław .......................................................................................................................................................... 47
Employees engagement in charity .................................................................................................................................................................................. 47
Our People
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
45
AmRest’s success is built on people and the communities they serve. In towns and cities, across diverse countries, AmRest
employees share values that create a safe and friendly workplace and nurture ambition that anyone can succeed and make an
impact. That impact is not only professional growth; it means making a difference and supporting those in need.
Main areas of focus in “Our People” pillar of AmRest Global Sustainability Strategy are:
■
Fair employment practices
■
Work ethics
■
Occupational Health & Safety
■
Talent Development
■
Diversity & Equality
■
Diversity
■
Pay Equality
■
Social engagement
AmRest employees and associates
9
are expected to maintain the required working conditions of the staff under their responsibility,
including contract workers. This means ensuring compliance with all applicable labour regulations, in particular, those related to
hygiene, health and safety at work, as well as working hours and rest periods, payment of wages according to law, and no minors
at the work place (except in cases provided by law).
Basic employment matters, including internal organization, employee and employer rights and responsibilities are regulated by
separate documents adopted by AmRest subsidiaries in accordance with the relevant national laws.
Work ethics
AmRest is committed to conduct business to the highest ethical standards and in compliance with all relevant law and regulation.
The Group has put in place clear practices so that all employees live by consistent work ethics. This includes a company-wide
Code of Ethics and Business Conduct and a global Whistleblowing Policy.
The Code of Ethics and Business Conduct is a set of guidelines and rules that all people who make up the company must follow.
The Code is an essential tool that serves as a cornerstone for AmRest, informing of actions and setting out the principles of
conduct all employees must observe, both when performing their professional duties and in relationships with all stakeholders.
The Group has zero tolerance for any form of corruption, bribery, extortion or kickbacks. AmRest employees must never receive,
accept, provide or offer any payments or anything of value for the purpose of obtaining any kind of benefit, advantage or undue
consideration, when interacting with public officials or business partners.
AmRest undertakes to comply with all applicable international legislation and provisions to fight against money laundering and
terrorist financing.
AmRest recognizes the importance of reporting irregularities related to the Group’s operations and therefore the need for
protection of anyone making such a report being able to do so in good faith. To this effect, in 2021, AmRest Board of Directors
approved the updated Whistleblowing Policy to ensure those standards are protected in accordance with the law. The document
gives clear guidelines on how to report irregularities, how to conduct investigations and how to take remedial measures in a way
that ensures the protection of “whistleblower”. The online service “Speak Openly” guarantees that the communication between
the reporting person and case operator can be performed on fully anonymous basis.
The number of potential irregularities filed by the “Speak Openly” in 2021 was 107.
10
9
Natural persons or legal entities that have an ongoing relationship with AmRest.
10
In total 5 cases were related to human rights area.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
46
Observing human rights is a fundamental responsibility for the Group and is a standard that derives from the AmRest's corporate
culture. Respect for human rights governs the relations with internal (employees) and external stakeholders (e.g. customers,
suppliers, local communities). The Group does not operate or participate in projects that would infringe on human rights nor does
it encourage anybody to do so.
Occupational health and safety
AmRest applies firm principles and organizational commitment to prevent occupational risks. As a responsible company, AmRest
integrates these principles into the general system of management to ensure the safety of employees, partners and customers,
during all activities and at all levels. The health & safety at workplace culture is implemented in all countries of operation.
AmRest Board of Directors assumes the role of directly promoting the integration of occupational risk prevention into the Group's
management systems, promoting the safety and health of AmRest employees through the application of measures and the
development of activities, necessary for the prevention of occupational risks.
In 2021, the Health & Safety Global Guidelines for AmRest were developed, establishing 10 basic principles to follow in order to
ensure a safe and stable workplace.
During the continued COVID-19 pandemic, AmRest maintained a strict hygiene regime to protect employee health and safety,
both in the AmRest restaurants and while delivering orders to customers through contactless delivery.
Talent Development
AmRest places a strong emphasis on people development. The Group offers a wide array of internal training courses (vocational
and occupational) led by qualified instructors. Managers support their teams, acting as coaches and mentors.
Store-level managers participate in dedicated development programs depending on their position. They are offered training to
develop the skills necessary to effectively manage people and restaurants, including food safety, human resource management,
customer service, product marketing, promotion and sales.
Restaurant staff are given training that includes a customer-focused approach. Employees who are not covered by the above-
mentioned development programs are offered other training opportunities as part of the People Development Initiatives.
Table. The total number of training hours of AmRest employees. OPS - Employees of restaurants and coffee houses. RST - Restaurant
support team
2020
2021
OPS
742 591
1 843 427
RST
6 246
21 024
Selected employee development initiatives at AmRest:
■
Internal and External Training - AmRest regularly conducts internal training sessions dedicated to progressing
employee development. Employees also have the opportunity and are encouraged to take part in external training
sessions.
■
Mentoring – AmRest leadership teams in local markets conduct special training sessions under mentoring schemes.
■
Relocation - AmRest as a global company creates opportunities for employees to work abroad and to continue the
career in another market.
■
Internships - AmRest offers a range of internships for students, with the possibility of a full-time position afterwards.
Equality at AmRest
11
AmRest takes steps to ensure equal treatment and opportunity, regardless of, among others, gender, race or disability.
For example:
■
Avoiding discriminatory words or inappropriate expressions in internal or external communication channels.
■
Including Group's commitment to equal opportunities in job advertisements.
■
Training staff responsible for pre-selection (CV review) and selection (telephone and face-to-face interviews) on
equality processes to ensure that candidates are assessed solely on their competences.
■
Collaborating with non-profit associations that facilitate the labor integration of people at risk of exclusion.
Work-life balance
The Group uses a flexible working time system. Restaurant employees can adapt their work schedules, which makes it easier for
them to maintain a work-life balance.
Continuously in 2021, due to the continuing COVID-19 pandemic, offices in many countries were open, but with limited number
of staff performing essential tasks. Work from home (Home Office) was a daily routine for the majority of AmRest office workers.
The offices in many countries operated to a limited extent.
11
In compliance with local labor law, in Spain equality plans are implemented.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
47
Collective bargaining
AmRest follows local regulations regarding the freedom of association.
Table. Organization of dialogue and negotiating with staff in main markets applicable
Country
Description
France
All French entities are covered by Working Councils (French "Comité Economique et Social"). The company
representatives must meet with the councils at least 12 times a year. Moreover, AmRest negotiates collective company
agreements with unions when required by law. The company is represented by the HR department.
Germany
AmRest representatives in Germany (HR and Legal Departments) meet regularly with Unions and Workers Councils.
All company projects and activities that may impact the employees must be discussed with the Councils.
Spain
Following the National Labor Law, each AmRest entity has the Convenio Colectivo (Collective agreement). The
negotiations are held regularly between the work council and the labor law manager who represents the company (with
the support of other representatives if needed).
Table. Summary of main documents at AmRest in terms of personnel-related matters
Name of the document
Code of Ethics and Business Conduct
Social Media Policy
Criminal Compliance Policy
Gender Equality Policy
Diversity Policy
Community Relations Policy (CSR Policy)
Whistleblowing Policy
Global Health & Safety Guidelines
Social engagement
AmRest encourages employees to engage in voluntary work to the benefit of their communities. Each year AmRest makes
contributions to social or charitable organizations.
Strategic partnership – SIEMACHA Spot Wrocław
An important project under AmRest social engagement is the strategic partnership with SIEMACHA Spot Wroclaw run by
SIEMACHA Association. It is an educational space for children, where they can develop their talents and gain new experiences.
The facility was officially opened in June 2017. The total value of AmRest financial support for the place between 2016 and 2021
reached over 500 000 EUR. During a 5-year cooperation with SIEMACHA, more than 600 children have been members of the
SIEMACHA Spot Wrocław community. In 2021, SIEMACHA Association and AmRest signed a new cooperation agreement for
the next 3 years.
Employees engagement in charity
In November 2021 AmRest organized a Food Sharing Day in Poland and Spain. The initiative was conducted in cooperation with
non-governmental organizations caring for children and youth from underprivileged families such as SIEMACHA Association in
Poland and Cuantaya Association in Spain. In total, over 1600 children participated in the event. AmRest volunteers from the
offices and restaurants helped to prepare food and delivered it to gathering, where they took part in social activities together with
children.
Table. AmRest engagement in numbers
Number of projects
171
Number of volunteers
864
Number of beneficiaries
3 807
Saving food
AmRest is determined to reduce organic waste, and especially food waste. In 2021, AmRest’s brands were involved in two global
food waste prevention schemes: Harvest and Too Good To Go.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
48
Table. AmRest food waste prevention programs
Name of the project
Harvest
Too Good To Go
Short description
Donating surplus products to people in
need. Cooperation with Food Banks
Selling food products with short expiry
date via mobile app. Partnership with
Too Good To Go company
AmRest brands involved
KFC, Pizza Hut, Burger King
Starbucks, Pizza Hut, La Tagliatella,
Sushi Shop
Number of stores involved
333
407
Amount of food saved in 2021
178 943 kilograms
294 528 boxes saved
(950 000 food items)
Table. Summary of AmRest documents governing social issues
Name of the document
Code of Ethics and Business Conduct
Community Relations Policy (CSR)
Circular economy ............................................................................................................................................................................................................ 50
Climate change ............................................................................................................................................................................................................... 50
Water.............................................................................................................................................................................................................................. 50
Environmental risk prevention ......................................................................................................................................................................................... 50
Our Environment
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
50
AmRest is committed to managing its environmental impact in a thoughtful and responsible manner across all its operations.
AmRest aims to develop a coherent, organization-wide understanding of the significance of environmental protection among all
internal stakeholders. This understanding must be consistent across all countries and regions in which the Group operates,
regardless of any cultural differences.
AmRest Global Sustainability Strategy is focused on the following environmental areas:
■
Circular economy
■
Management of bio/organic waste
■
Waste recycling
■
Climate change
■
Carbon footprint
■
Energy efficiency
In 2021, AmRest restaurants and coffee houses were working to minimize the environmental impact of their operations in
accordance with the procedures specified for each brand operated by the Group.
Although the Group has no direct operations in protected areas, it has been working closely with suppliers to ensure the highest
environmental standards across the whole supply chain regarding protection of biodiversity.
Circular economy
AmRest aims to minimize waste produced in every aspect of its operations and has implemented food waste prevention programs
globally (more information on this topic can be found in “Saving food” sub-chapter in “Our People”).
In 2021, all AmRest brands in European markets and in China replaced single-use plastic in restaurants with sustainable materials
such as paper straws and wooden cutlery. Moreover, the Group has been gradually increasing the level of sustainable packaging
across its operations, introducing recyclable packaging and packaging made from recycled materials.
AmRest restaurants produce different categories of waste. The waste management solutions used by the Group are based on
different legal requirements across individual countries, and are designed for store type and location (such as shopping malls,
drive through, in-line street). Management of waste from restaurants in specific categories is done in compliance with the relevant
laws, standards and good practices specific to that type of restaurant.
Climate change
Climate change is an important element of the AmRest Sustainability Strategy. In 2021 AmRest calculated its Scope 1 and Scope
2 emissions. The Group has been continuously reducing greenhouse gas emissions, especially through optimizing energy use or
reducing electricity consumption levels.
All of AmRest's restaurants and coffee houses in Poland are monitored by a remotely-operated energy consumption system
(media readings), providing analysis of energy use at the store level, in order to conserve energy and identify opportunities to
improve efficiency. AmRest is working on implementing this system in each of its operated stores.
■
In all core markets AmRest uses optimized equipment-operating procedures that are explained in detail to employees in
information materials.
■
AmRest restaurants use motion detectors in utility rooms and restrooms as well as energy efficient ventilators. AmRest
also uses air conditioning systems with heat pumps.
■
Most of the deep fryers, freezers, ovens and other equipment used in the restaurants are energy-saving devices with
ENERGY STAR certificates. Fryers are fitted with a special, energy-saving system that makes it possible to reduce the
amount of oil used.
■
KFC, Burger King and Pizza Hut restaurants in Poland recover heat from their refrigeration systems and use it to heat
water.
■
KFC and Burger King restaurants recover heat from the kitchen exhaust system to pre-heat fresh air and optimize the
consumption of electricity.
■
AmRest is working on the development of BMS (Building Management System) to optimize energy consumption by
remote supervision of most important equipment and installations. The BMS will provide more functionalities to the
currently used system (Media Readings).
Water
Water consumption at AmRest is mainly related to meal preparation. Consumption is constantly monitored and the Group strives
to make every effort to achieve greater efficiency, implementing water-saving aerators and proximity sensors in newly built
restaurants and coffee houses.
Environmental risk prevention
Environmental risks are managed through a dedicated role in the Operations structure. Facility Management and/or Maintenance
departments are responsible for ensuring that the national requirements regarding environment are met, including waste
management and sustainable use of land and water resources.
With regards to provisions and guarantees for environmental risks, AmRest has no specific environmental insurance.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
51
AmRest Taxonomy disclosure
AmRest as an entity subject to the obligation to disclose non-financial data in accordance with The Non-financial Reporting
Directive (NFDR), falls under the Taxonomy Regulation1 , together with the delegated acts in force: Delegated Act supplementing
Article 8 of the Taxonomy Regulation (“the Disclosures Delegated Act2”) and the EU Taxonomy Climate Delegated Act3, officially
published on 9th December 2021.
To meet the obligation under above quoted regulations, AmRest has conducted an analysis of its activities to identify those that
are Taxonomy eligible. The analysis was based on the description of Taxonomy-eligible activities according to the final version of
Climate Delegated Act, Annex I and Annex II.
Determination whether a given activity was considered taxonomy eligible was based on applying the two taxonomy criteria: 1.
Substantial contribution to climate mitigation and 2. Substantial contribution to climate adaptation.
Table. Taxonomy eligible activities by AmRest in 2021
12
Sector
No.
Activity
Description of the activity
Technical screening
criteria
Explanation of cost calculation method
substantial
contribution
to climate
mitigation
substan ial
contribu ion
to climate
adaptation
Energy
4.16
Installation and
operation of
electric heat
pumps
Installation and operation of
electric heat pumps
Yes
Yes
Heat pumps are an element of the HVAC system
used by AmRest. The comments related to a
calculation of related Capex and Opex are included
in the related part referring to activity 7.3.
Construction and real estate
7.3
Installation,
maintenance
and repair of
energy
efficiency
equipment
Individual renovation
measures consisting in
installation, maintenance or
repair of energy efficiency
equipment such as:
installation, replacement,
maintenance and repair of
heating, ventilation and air
conditioning (HVAC) and
water heating systems,
including equipment related
to district heating services,
with highly efficient
technologies;
Yes
Yes
Total maintenance costs of complete HVAC
installations based on heat pumps which were
installed in 2021. Calculation was estimated on the
basis of average energy consumption and average
market cost of maintenance for a given country.
The costs of installation of technological equipment
other than HVAC which can be classified as energy
saving (installed in 2021).
Calculation made based on purchase prices. No
maintenance cost were included as the equipment
was covered by the producer warranty.
7.5
Installation,
maintenance
and repair of
instruments
and devices for
measuring,
regulation and
controlling
energy
performance of
buildings
Installation, maintenance
and repair of instruments
and devices for measuring,
regulation and controlling
energy performance of
buildings
Yes
Yes
Costs of installation and maintenance of equipment
designed for remote energy reading or for remote
control over energy consuming installations. This
refers only to media-reading equipment and BMS.
7.6
Installation,
maintenance
and repair of
renewable
energy
technologies
Installation, maintenance
and repair of renewable
energy technologies, on-site
Yes
Yes
Costs of photovoltaic installations in AmRest
restaurants. For 2021 these costs are non-material.
Information and
communication
8.2
Data-driven
solutions for
GHG emissions
reductions
Development or use of ICT
solutions that are aimed at
collecting, transmitting,
storing data and at its
modelling and use where
those activities are
predominantly aimed at the
provision of data and
analytics enabling GHG
emission reductions.
Yes
No
This activity relates to media reading equipment and
BMS which are included in the activity in point 7.5.
The cost aspect has been addressed in the relevant
section referring to the activity 7.5.
While making the calculations of costs related to activities listed in the table, AmRest Group took into account only CapEx/OpEx
directly related to each of the activities, as a result the risk of double counting was eliminated.
12
Calculation of CapEx numerator - due to lack of detailed information for the first year of reporting, it has been considered that all the new
solutions implemented regarding the activity 7.3. in Germany are energy efficient. For the same reason, in some cases the installation and transport
costs of the equipment are also included in CapEx.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
52
AmRest Taxonomy KPIs for 2021
According to the Article 8 Delegated Act, in the fiscal year 2021 AmRest Group is required to only disclose the proportion of
Taxonomy-eligible and Taxonomy non-eligible economic activities in the total turnover, CapEx and OpEx.
Consolidation of CapEx and OpEx data which are considered as taxonomy eligible (numerator) and total turnover, CapEx
and OpEx (denominator) at the Group level.
Contextual information
AmRest core business is running and developing restaurant chains. A description of activities conducted by the Group in the year
2021 can be found in the chapter “AmRest business model and operations in 2021” (section 1 of this Statement). AmRest core
activities are not included in the list of activities that are substantially contributing to the first two of the environmental
objectives of Taxonomy Regulation: climate change mitigation and adaptation to climate change. The revenues generated
by AmRest in 2021 were derived from activities which did not qualify as environmentally sustainable, Therefore, in 2021 AmRest
achieved no turnover meeting taxonomy eligibility criteria.
■
Turnover: In 2021, AmRest Turnover KPI for taxonomy eligible activities equals to 0%.
■
CapEx: In 2021, CapEx considered as taxonomy eligible amounted to 9% of the Group capital expenditures. As
explained above, the nominator was calculated as the CapEx related to activities listed in table Taxonomy eligible
activities by AmRest in 2021.
Denominator: additions to tangible and intangible assets in 2021. Denominator amounted to EUR 163.8 million.
KPI
Eligible (%)
Non-eligible (%)
Capital expenditure
(CapEx)
9
91
■
OpEx: In 2021 total operating expenses of AmRest Group excluding amortization and depreciation amounted to
EUR 1 605.4 million and are described in the note 8 of the Consolidated Financial Statements for the year ended
31 December 2021. Out of that amount, EUR 34.9 million (2,2%) constitutes building renovation measures, short-
term leases, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets
of property, plant and equipment by the undertaking that are necessary to ensure the continued and effective
functioning of such assets incurred during the relevant financial year (mainly direct maintenance expenses).
In 2021, the taxonomy OpEx for AmRest was non material (under 5%) with respect to the total OpEx of the Group.
Therefore, according to section 1.1.3.2 of Annex I of Delegated Regulation of July 6th, AmRest reports the OpEx
numerator as 0 and only discloses the denominator.
2021 OpEx denominator: EUR 34.9 million.
Accounting policy
■
Turnover:
The turnover covers the revenue recognized pursuant to International Accounting Standard IAS 1.
The Group operates chains of own restaurants under own brands as well as under franchise license agreements. Additionally,
Group operates as a franchisor (for own brands) and master-franchisee (for some franchised brand), and develops chains of
franchisee businesses, organizing marketing activities for the brands, and supply chain.
Revenue from contracts with customers is recognized when control of the goods or services is transferred to the customer at an
amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
Detailed policy is presented in the note 6 and 38d of the Consolidated Financial Statements for the year ended 31 December
2021.
Numerator – revenues derived from products/services associated with economic activities that qualify as environmentally
sustainable. None of the activities were classified as Taxonomy-eligible hence the numerator equals zero in the year 2021.
Denominator – total revenues presented in the Consolidated income statement for the year ended 31 December 2021.
■
Capital Expenditure (CapEx):
Numerator – equals to the part of the capital expenditure included in the denominator that is any of the following:
a) related to assets or processes that are associated with Taxonomy-aligned economic activities
b) part of a plan to expand Taxonomy-aligned economic activities or to allow Taxonomy-eligible economic activities to
become Taxonomy-aligned (“CapEx plan”)
c) related to the purchase of output from Taxonomy-aligned economic activities and individual measures enabling the target
activities to become low-carbon or lead to greenhouse gas reductions and provided that such measures are implemented
and operational within 18 months.
Denominator – additions to tangible and intangible assets during the financial year considered before depreciation, amortization
and any re-measurements, including those resulting from revaluations and impairments, for the relevant financial year and
excluding fair value changes. The denominator shall also cover additions to tangible and intangible assets resulting from business
combinations.
References to the Consolidated Financial Statements for the year ended 31 December 2021:
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
53
a) Intangible assets – note 15
b) Property, plant and equipment – note 13
c) Right-of-use assets – note 14
■
Operating Expenditure (OpEx):
Numerator – The numerator equals to the part of the operating expenditure included in the denominator that is any of the
following:
a) related to assets or processes associated with Taxonomy-aligned economic activities, including training and other
human resources adaptation needs, and direct non capitalized costs that represent research and development;
b) part of the CapEx plan to expand Taxonomy-aligned economic activities or allow Taxonomy-eligible economic
activities to become Taxonomy-aligned within a predefined timeframe as set out in the second paragraph of this point
1.1.3.2;
c) related to the purchase of output from Taxonomy-aligned economic activities and to individual measures enabling
the target activities to become low-carbon or to lead to greenhouse gas reductions as well as individual building
renovation measures as identified in the delegated acts adopted pursuant to Article 10(3), Article 11(3), Article 12(2),
Article 13(2), Article 14(2) or Article 15(2) of Regulation (EU) 2020/852 and provided that such measures are
implemented and operational within 18 months.
Denominator – shall cover direct noncapitalized costs that relate to research and development, building renovation measures,
short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of
property, plant and equipment by the undertaking that are necessary to ensure the continued and effective functioning of such
assets, incurred during the relevant financial year. Only direct costs should be included, as consequence AmRest includes in the
denominator related part of the Restaurant expenses and Franchise and other expenses (lines above Gross Profit).
Denominators of turnover and CapEx KPIs does not differ from any Alternative Performance Measures (APMs) as defined in
ESMA.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
54
Key metrics
1. Table. Number of suppliers by type
13
2021
Total suppliers
7 307
(incl. food suppliers):
1 363
2. Table. Main raw material consumption [t]
14
2020
2021
Meat (incl. Fish)
40 013
46 737
Flour
10 564
13 601
Dairy
10 643
12 882
Fruits & Vegetables
6 051
8 473
Cold drinks
16 517
20 420
3. Table. AmRest electricity consumption [GJ]
15
2020
2021
AmRest
1 088 268
1 226 507
16
4. Table. Fuel consumption of AmRest car fleet [liter]
17
2020
2021
DIESEL
PETROL
DIESEL
PETROL
AmRest
650 363
726 907
649 419
1 132 387
5. Table. Scope 1 and Scope 2 for AmRest [tCO2eq]
18
Carbon footprint
AmRest
Scope 1
213 536
Scope 2
157 333
19
6. Table. Total amount of waste generated by type [tonnes]
20
Type of waste
Mixed waste
Paper and
cardboard
Plastic
Glass
Organic
Used oil
2020
21 357
57% recycled
27% recycled
89% recycled
-
100% reused
2021
39 484
42% recycled
26% recycled
99% recycled
8% segregated
100% reused
7. Table. Water consumption [m³]
21
2020
2021
AmRest
1 934 161
2 532 010
13
The data for 2020 are not presented due to the change in the calculation method in 2021. Therefore the data for 2020 would not be comparable.
14
Data collected from 6 biggest AmRest markets.
15
8 countries reported the data based on estimations.
16
In 2021, 10 990 GJ of AmRest energy consumption came from renewable energy sources.
17
8 countries reported the data based on estimations.
18
8 countries reported the data based on estimations.
19
Potential saved emission in 2021, due to using renewable energy sources: 1 315 tCO2e.
20
8 countries reported the data based on estimations.
21
8 countries reported the data based on estimations.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
55
8. Table. AmRest employees by gender [headcount]
Women
Men
Total
Total
27 308
21 231
48 539
incl.
Permanent contract
18 897
14 178
33 075
incl.
Temporary contract
8 411
7 053
15 464
incl.
Full-time
12 608
9 283
21 891
incl.
Part-time
14 700
11 948
26 648
Dismissals
2 102
2 489
4 591
9. Table. AmRest employees by age [headcount]
<30
30-50
>50
Total
Total
34 721
12 323
1 495
48 539
incl.
Permanent contract
20 668
11 136
1 271
33 075
incl.
Temporary contract
14 053
1 187
224
15 464
incl.
Full-time
13 505
7 630
756
21 891
incl.
Part-time
21 216
4 693
739
26 648
Dismissals
3 215
1 266
110
4 591
10. Table. AmRest employees by work classification [headcount]
OPS - Employees of restaurants and coffee houses. RST - Restaurant support team
OPS
RST
Total
Total
46 328
2 211
48 539
incl.
Permanent contract
30 957
2 118
33 075
incl.
Temporary contract
15 371
93
15 464
incl.
Full-time
19 782
2 109
21 891
incl.
Part-time
26 546
102
26 648
Dismissals
3 795
796
4 591
11. Table. AmRest average annual employment [headcount]
Average annual number of employees
46 480
Average annual number of men
20 414
Average annual number of women
26 066
Average annual number of permanent contract
32 797
Average annual number of temporary contract
13 683
Average annual number of full-time employees
21 348
Average annual number of part-time employees
25 132
Average annual number of employees <30
32 920
Average annual number of employees 30-50
12 132
Average annual number of employees >50
1 429
Average annual number of OPS employees
44 301
Average annual number of RST employees
2 180
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
56
12. Table. AmRest employees covered by collective bargaining agreements [%]
2020
2021
AmRest Group
24%
24%
22
13. Table. Average annual salary by gender, positioning within organization
23
and segments, in thousand
EUR. The segments are defined in note number 5 of Consolidated Financial Statements. Total salary
pay gap between men and women by position within the organization
Due to data protection and confidentiality, AmRest does not disclose information about remuneration in some segments when there are two or
less persons employed on a given level, e.g. China level 6 below.
Division
Level
Women
Men
2020 2021
2020 2021
China
Level 1
6.0
7.8
6.1
8.0
Level 2
12.9
14.6
13.4
16.2
Level 3
17.5
21.0
180
22.6
Level 4
28.1
32.9
29.6
35.0
Level 5
59.3
74.3
599
77.4
Western Europe
Level 1
15.8
17.4
17.3
18.5
Level 2
23.1
22.5
22.6
23.0
Level 3
22.5
26.8
24.6
27.4
Level 4
37.0
37.4
38.6
38.2
Level 5
59.3
57.8
59.7
57.8
Level 6
103.7
106.6
102.6
90.7
Central Europe
Level 1
6.2
6.8
6.0
6.6
Level 2
10.0
10.2
10.1
10.5
Level 3
12.9
13.0
13.5
13.8
Level 4
17.4
17.5
19.1
19.3
Level 5
35.3
36.3
37.4
36.2
Level 6
66.8
58.5
74.3
70.7
Russia
Level 1
2.4
2.8
2.6
2.7
Level 2
4.7
5.6
4.9
5.7
Level 3
6.5
7.4
7.1
8.5
Level 4
9.9
10.8
11.1
10.8
Level 5
25.2
23.3
250
22.7
Level 6
64.7
66.7
38.4
38.7
Group Pay Gap
+0.2%
24
22
11 of formal agreements with unions across AmRest markets covered health & safety topics.
23
The salaries are presented by level in the organization, which is a basis for payroll analysis.
24
In total women earn 0,2% more than men.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
57
14. Table. Total average annual salary by age in thousand EUR
thousand EUR
<30
9.1
30-50
17.7
>50
18.3
15. Table. The average remuneration of directors and executives by gender
25
Annual average remuneration
thousand EUR
Board of Directors
26
women
100
men
85
Management Team
27
women
n/a
men
302
16. Table. Indicator of diversity
Number of employees
Percentage of all employees
Disability
1 100
2%
17. Table. Information about occupational health and safety in AmRest Holdings
28
,
29
Work-related injuries
men
546
women
490
Absenteeism among employees
men
1 909 860
women
3 797 548
Type of injuries
broken hands and legs; bone fractures; dislocations or sprains or tears; hot water, steam or
chemical burns; internal injures
18. Table. Expenditure on social causes
EUR
AmRest
177 502
25
Jose Pares Gutierrez receives additional remuneration as a compensation package, this amount was not included in the numbers presented in
the table, which only covers the directors’ fixed remuneration in their capacity as such.
26
The fixed remuneration of the Board of Directors Members is equal. The differences are related to the Board Committees where the directors
are members.
27
Calculated for the Members of the Management Team active as of 31st December 2021.
28
No work-related fatalities reported.
29
Frequency and severity rates have not been calculated due to the lack of required global data for the denominator. The company will report
these indicators for 2022.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
58
19. Table. Membership of industry organization
Country
Name of the organization
China
Shanghai GiftCard Association
Shanghai JinQiao Economic and Technological Development Zone Enterprise Association
Shanghai Pudong Foreign Investment Enterprise Association
Shanghai Catering and Cooking Industry Association
Croatia
Croatian Chamber of Economics
Czech Republic
International Facility Management Association
France
SNARR (National Professional Restaurant Union)
Germany
Bundesverband Systemgastronomie (The Federal Association of the System Catering)
Industrie- und Handelskammer (Chamber of Commerce and Industry)
Hungary
Chamber of Commerce
Poland
Związek Pracodawców Hoteli, Restauracji i Cateringu (Association of HORECA Employers)
Polska Rada Centrów Handlowych (Polish Council of Shopping Centers)
American Chamber of Commerce
Spain
Comité Horeca de AECOC (HORECA Committee)
Asociación progreso dirección - APD (Formación) (Association for Progress and Management)
Asociación Empresarial de Marcas de Restauración-Fehrcarem (Business Association of Restaurant Brands)
Asociación Española del Franquiciado (Spanish Association of Franchisees)
Asociación del Cluster Food Service de Cataluña (Association of the Food Service Cluster of Catalonia)
EUR
Total fees paid
193 558
20. Table. Profits earned by country
Country
Profit/(loss) before tax
EUR
Austria
276 301
Belgium
(2 698 959)
Bulgaria
1 880 739
Croatia
946 036
Czech Republic
18 396 832
China
10 724 382
France
(29 393 299)
Germany
(10 535 299)
Hungary
13 472 524
Italy
(61 333)
Luxembourg
15 528
Poland
26 825 660
Portugal
(2 058 207)
Romania
224 908
Russia
10 032 706
Serbia
1 126 060
Slovakia
(95 902)
Slovenia
(210 599)
Spain
(5 917 965)
Switzerland
999 513
UK
620 283
USA
698 867
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
59
21. Table. Income taxes paid (unearned)
30
Country
Income taxes paid (unearned)
EUR
Austria
1 363
Belgium
1 289
Bulgaria
122 712
Czech Republic
2 386 488
China
2 347 099
France
369 877
Germany
13 181
Hungary
1 613 621
Luxembourg
30 987
Poland
1 239 188
Portugal
1 546
Romania
-2 908
Russia
2 751 337
Slovakia
-23 176
Spain
654 575
22. Table. Public subsidies received
Other operating income and expenses section for year ended 31 December 2021 consists mainly of accounted COVID-19
pandemic governmental programs that amounted to EUR 37.2 million, out of that EUR 10.5 million income was recognized for
government assistance programs for payroll and employee benefits (payroll costs EUR 8.9 million and social contribution EUR
1.7 million), whereas EUR 26.7 million was recognized for government support programs for rent and other. The above
government grants were in a form of cash grants out of which EUR 1.2 million as of 31 December 2021 was not received yet.
In 2021 grants related to payroll and employee benefits were significantly lower than in the comparative period due to the fact that
most of the labour related programs introduced in the previous periods ended gradually in the first half of the 2021.
Country
Czech Republic
During 2020 the companies have applied for the government aid under special COVID-19
regulations. COVID-19 payroll compensations programs finished at the end of May 2021. During Q3-
Q4 the only existing government aid program was about to the reimbursement of the company costs
connected with employees in COVID-19 quarantine.
France
The Partial Activity technical unemployment government program started on 15 March 2020 is
continued but in the lesser extent (in Q4 2021 when the restaurant is forced to closed due to several
cases of COVID-19).
Germany
Reduced working hours (Kurzarbeitergeld) salary government reimbursement program has been
introduced effective on 1 March 2020. From July 2021 on the Group is not eligible to get the
government payment anymore.
Hungary
Under the Act on Special Provisions During COVID-19 (Regulation of 485/2020) released on 10
November 2020 the Hungarian companies applied for:
■
50% reimbursement of gross salaries, but maximum 671 EUR/employee for the period from
November 2020 to May 2021,
■
suspension for employer social contributions and suspension of employer rehabilitation
contribution from November 2020 to May 2021
30
AmRest has the obligation to pay legally due taxes in any territory where it operates in accordance with the existing legal provisions. The Group
follows the relevant rules when determining the amount of the company’s tax liabilities, submitting tax returns, paying taxes and disclosing
information to tax authorities. In order to ensure compliance with existing tax laws, regulations and principles, AmRest has put in place effective
control mechanisms. AmRest’s tax professionals monitor the tax situation of the Group and changes in tax laws and practices which may impact
the business and its growth. AmRest makes significant investments in people, material resources and technology to ensure that this tax strategy
is applied throughout the organization.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
60
Country
Poland
Under the Act on special solutions related to the prevention and combating of COVID-19, other
infectious diseases and crisis situations caused by them of 2 March 2020 (Journal of Laws of 2020,
item 374), in 2020 the Group took effective measures including the application for compensation for
the protection of workplaces from the funds of the Fund of Guaranteed Employee Benefits. In 2021
Polish subsidiaries have not received support from government programs.
Spain
In accordance with the provisions of article 47 of the Workers Statute, in relation to Royal Decree
1483/2012 and article 22 and 23 of Royal Decree-Law 8/2020, as well as Royal Decree-Law
30/2020, AmRest companies in Spain have filed before the Spanish labor authority a Temporary
Employment Regulation File (Expediente de Regulación Temporal de Empleo or “ERTE”). The
ERTE covered 3 288 employees. As of 31 December 2020 the ERTE covered 591 employees, since
September 2021 there have been no employees under ERTE.
Similar actions are also taken on other markets. The Group has applied for support programs offered by each country’s
government, in the form of reimbursement of labor costs, and introducing internal actions, such as shortening of working hours or
technical unemployment.
Other grants – main programs:
In April 2021, the State-supported loan in Russia in the amount EUR 2.7 million was forgiven. Bank waived it based on the
particular indicators (the main indicator being maintaining the required employment rate).
In April 2021 entities operating in Germany applied for "Nov/Dez Hilfe", a state aid program that was meant to support industries
hit by the second lockdown and to compensate lost sales in the months of November and December 2020. The Group recognized
EUR 12.8 million from that program in H1 2021. In the second part of 2021 the Group applied for another program
(Ueberbrueckungshilfe III) that was meant to cover losses from January to June 2021 - the state compensated a part of carried
fixed costs, the amount of compensation being dependent on sales decline compared to 2019 – the German entities recognized
additional EUR 8.3 million from that program.
Entities operating in Czechia and Slovakia applied for a government program called COVID Najem (government grants for rent
costs) and COVID Gastro, entities in France applied for government program called Fond de solidarité. The Group has recognized
EUR 2.4 million from above described programs in 2021.
Government grants are in some cases associated with requirements to keep the agreed level of workforce for agreed period (or
other conditions), there are also subject to external audits. The external audit of the grant received in Germany is expected in
June 2022. As of 31 December 2021 the Group does not expect that required conditions would not be met, therefore there is no
material risk of returning the government assistance that has been recognised.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
61
Appendix – 2020 data
1. Table. Number of suppliers by type
2020
Total suppliers
13 493
(incl. food suppliers)
1 253
Local suppliers
79%
Foreign suppliers
21%
Total number of audits conducted in restaurants and among suppliers
4 993
2. Table. Scope 1 and Scope 2 for AmRest [tCO2eq]
Carbon footprint
AmRest
Scope 1
531 551
Scope 2
129 119
3. Table. AmRest employees by gender 2020 [headcount]
Women
Men
Total
Total
24 867
19 913
44 780
incl.
Permanent contract
18 403
14 194
32 597
incl.
Temporary contract
6 464
5 719
12 183
incl.
Full-time
11 611
8 799
20 410
incl.
Part-time
13 256
11 114
24 370
Dismissals
1 666
2 217
3 883
4. Table. AmRest employees by age 2020 [headcount]
<30
30-50
>50
Total
incl.
Permanent contract
20 816
10 637
1 144
32 597
incl.
Temporary contract
11 037
903
243
12.183
Dismissals
2 867
928
88
3 883
5. Table. AmRest employees by work classification 2020 [headcount]
OPS - Employees of restaurants and coffee houses. RST - Restaurant support team
OPS
RST
Total
Total
42 549
2 231
44 780
incl.
Permanent
contract
30 476
2 121
32 597
incl.
Temporary
contract
12 073
110
12 183
Dismissals
3 801
82
3 883
6. Table. AmRest emplyees by country
Country
2020
2021
Austria
48
49
Belgium
143
155
Bulgaria
329
359
Croatia
154
171
Czech Republic
6 638
7 243
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
62
Country
2020
2021
China
2 110
2 108
France
4 783
4 772
Germany
2 735
2 610
Hungary
2 003
2 274
Italy
13
12
Luxembourg
91
81
Poland
14 180
16 008
Portugal
55
91
Romania
720
794
Russia
6 357
6 768
Serbia
363
431
Slovakia
213
261
Slovenia
13
16
Spain
3 576
4 090
Switzerland
179
186
UK
79
60
USA
1
0
7. Table. AmRest average annual employment [headcount]
Permanent
33 285.5
Incl. women
18 649
Inc. men
14 636.5
8. Table. Total average annual salary by age in thousand EUR 2020
thousand EUR
<30
12.1
30-50
19.9
>50
23.3
9. Table. Gender Pay Gap 2020
Group Pay Gap
2%
10. Table. The average remuneration of directors and executives by gender 2020
Annual average remuneration
thousand EUR
José Parés Gutiérrez
37.5
Luis Miguel Álvarez Pérez
37.5
Carlos Fernández González
37.5
Pablo Castilla Reparaz
50
Romana Sadurska
50
Emilio Fulloaondo Botella
50
Mustafa Ogretici
50
Mónica Cueva Díaz
50
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
63
Total remuneration
thousand EUR
Total
4 071
Fixed
2 975
Variable
607
Share based remuneration schemes
489
Other
-
Allowances
-
11. Table. Indicator of diversity 2020
Number of employees
Percentage of all employees
Disability
992
2%
12. Table. Information about occupational health and safety in AmRest Holdings 2020
Work-related injuries
men
473
women
344
Absenteeism among employees (days)
men
214 950
women
476 572
Type of injuries
Broken hand and legs; bone fractures; dislocations or sprains or tears; hot water, steam or
chemical burns; internal injuries
13. Table. Expenditure on social causes incl. in kind donations 2020
EUR
AmRest
188 278
14. Table. Total number of complaints received
Total
Complaints
92 061
Irregularities (Human Right)
0
15. Table. Profits earned by country
Country
Profit/(loss) before tax
EUR
Austria
(18 255,5)
Belgium
(689 357.9)
Bulgaria
404 221.7
Croatia
(287 255.5)
Czech Republic
4 924 469.8
China
4 924 469
France
(43 577 185.6)
Germany
(44 529 494.6)
Hungary
302 424.3
Italy
(7 099.9)
Luxembourg
(417 036.1)
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
64
Country
Profit/(loss) before tax
EUR
Malta
(29 934.2)
Netherlands
(451 897.1)
Poland
(68 469 364.4)
Portugal
(1 004 922.5)
Romania
(2 633 978.5)
Russia
(1 835 838.9)
Saudi Arabia
120 020.6
Serbia
(748 564.5)
Slovakia
(1 210 178.4)
Slovenia
(425 563.2)
Spain
(26 854 821.5)
Switzerland
300 847.2
UK
939 264.0
United Arab Emirates
554 515.2
USA
(713 853.4)
16. Table. Income taxes paid (unearned)
Country
Income taxes paid (unearned)
EUR
Czech Republic
4 342 293.1
China
1 232 075.4
France
947 346.3
Germany
523 789.3
Hungary
2 167 800.3
Poland
5 072 338.4
Russia
1 456 076.4
Slovakia
22 146.1
Spain
371 235.6
17. Table. Public subsidies received
For the main markets of operation the Group has filled the following programs in the area of labor costs:
■ Spain
In accordance with the provisions of article 47 of the Workers Statute, in relation to Royal Decree 1483/2012 and article 22 and 23 of
Royal Decree-Law 8/2020, as well as Royal Decree-Law 30/2020, AmRest companies in Spain have filed before the Spanish labor
authority a Temporary Employment Regulation File (Expediente de Regulación Temporal de Empleo or “ERTE”). The ERTE covered
3 288 employees. Under the ERTE, the employees remain employed with AmRest with suspended salary and at the same time receive
unemployment benefits from authorities of up to 70% of their normal salary. One Spanish entity, The Grill Concept, S.L.U. declined to
extend the Temporary Employment Regulation (ERTE) in September. As of 31 December 2020 the ERTE covers 591 employees.
■ Poland
Under the Act on special solutions related to the prevention and combating of COVID-19, other infectious diseases and crisis situations
caused by them of 2 March 2020 (Journal of Laws of 2020, item 374), the following measures were taken, effective in the period 7 April
– 6 July 2020, with respect to 4 050 employees of AmRest Polish companies:
■ introduction of reduced working hours and salary by 20% (2 897 employees),
■ introduction of economic downtime (3 936 employees),
■ application for compensation for the protection of workplaces from the funds of the Fund of Guaranteed Employee Benefits
to co-finance the remuneration of employees affected by economic downtime or reduced working hours as a result of COVID-
19.
In the period 1 August – 31 October 2020 following measures were taken: application for compensation for the protection of workplaces
from the funds of the Fund of Guaranteed Employee Benefits to co-finance the remuneration of employees affected by economic
downtime (August 3 736 crew employees, September 3 628 crew employees, October 3 747 crew employees). From 1 December 2020
following measures were taken: application for compensation for the protection of workplaces from specific industries - Fund of
Guaranteed Employee Benefits, article 15gga (December 309 crew employees, 247 managers in stores, 33 RST employees).
Applications are continued in January and February 2021.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
65
■ France
Introduced “partial activity” technical unemployment government program for 4 188 employees (Sushi Shop, KFC, Pizza Hut).
Employees were partially or 100% unemployed by the Companies. With the suspension of the employment contract the gross salary
was maintained at 70% and 100% for minimum salary. The employee social security contr butions were also reduced, allowing the
employees to receive 84% of net salary (or 100% for those who perceive the minimum salary). The government reimburses 100% of
the salary paid to employees in partial activity. The program started from 15 March and is maintained until the end of the year in the
same condition. Restaurants continue to use it on rotating employee basis, especially during the second confinement (15 October to
15 December 2020). Refunds requests are in progress. Companies have one year to request the reimbursement.
■ Germany
Reduced working hours (Kurzarbeitergeld) salary government reimbursement program has been introduced effective on 1 March 2020
for approx. 3 000 employees. The government reimburses 60% of the employee’s net salary and social contributions. In the period July
- September 2020 the companies stopped meeting the conditions but after the second wave of restrictions started in Q4 2020 the
companies applied for the next governmental help beginning of November 2020. The government reimburses now 60-87% of the net
salary and social contribution depending on the individual situations. The reimbursement is based on not worked hours as compared
to the contract hours. The company pays the difference up to 90% of the average salary before March 2020.
■ Czech Republic
The companies have applied for the government aid under special COVID-19 regulations. There were two separate programs:
■ employees on downtime between 13 March and 31 May 2020: 80% of salary and social contribution reimbursed by the
government (1 600 employees covered),
■ employees with 40% reduction of working hours between 13 March and 31 May 2020: 60% of salary and social contribution
reimbursed by the government (80 employees covered).
Both programs were extended until the end of February 2021. Governmental help for the period June – September was not material
as not many employees were on downtime. During the second wave of restrictions (October – December) the companies applied for
governmental help in the amount of EUR 1.55 million.
Similar actions are also taken on other markets. The Group has applied for support programs offered by each country’s government, in the form
of reimbursement of labor costs, and introducing internal actions, such as shortening of working hours or technical unemployment. Group’s policy
is to present government grants related to income as other operating income. For 12 months period ended 31 December 2020 Group has
recognized government grants for payroll costs (EUR 21.6 million) and social contr bution (EUR 7.9 million). The total amount of EUR 29.5 million
has been recognized as other operating income. The above government grants are in a form of waived social security payables (EUR 3.7 million)
and cash grants (EUR 25.8 million, out of which EUR 5.1 million as of 31 December 2020 was not received yet). In August 2020 entities operating
in Czechia applied for a government program called COVID Najem, providing the government grants for rent costs (grant limit CZ 20 million per
entity). For 12 months period ended 31 December 2020 Group has recognized government grants for rent costs in the amount of EUR 1.7 million
as other operating income. Granting of the grant by governments is in some cases associated with requirements to keep the agreed level of
workforce for agreed period. As of 31 December 2020 the Group does not expect that such conditions would not be met, therefore there are no
material unfulfilled conditions or other contingencies attached to government assistance that has been recognized.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
66
GRI Standards content index
Non-financial Information Report. Contents index of the Law 11/2018
General information
GRI selected/Reporting
criteria
Pages
Business model
Brief description of the group’s business model
GRI 102-2
GRI 102-7
36
Geographical presence
GRI 102-3
GRI 102-4
GRI 102-6
36
Objectives and strategies of the organization
GRI 102-14
36-38
Main factors and trends that may affect future evolution
GRI 102-14
GRI 102-15
37-40
General
Reporting framework
GRI 102-54
34, 66-67
Materiality principle
GRI 102-46
GRI 102-47
37
Management approach
Description of the applicable policies
GRI 103-2
40, 43, 47,
48
The results of these policies
GRI 103-2
42-43, 45-48
The main risks related to these issues involving the activi ies of the group
GRI 102-15
39-41
Environmental questions
Environmental
management
Current and predictable impacts of the company's activities on the environment
and, if applicable, on health and safety.
GRI 102-15
50
Environmental assessment or certification procedures
GRI 103-2
50
Resources dedicated to the prevention of environmental risks
GRI 103-2
50
Application of the precautionary principle
GRI 102-11
50
Amount of provisions and guarantees for environmental risks
GRI 103-2
50
Contamination
Measures to prevent, reduce or offset air pollution emissions (including noise and
light pollution)
GRI 102-46
50
Circular economy and
waste prevention and
management
Prevention, recycling, reuse, other forms of recovery and types of waste disposal
GRI 103-2
GRI 306-2
54
Ac ions to combat food waste
GRI 103-2
GRI 306-2
48
Sustainable use of
resources
Water consumption and water supply according to local constraints
GRI 303-5
(2018 GRI version)
54
Use of raw materials and measures taken to improve the efficiency of their
utilization
GRI 301-1
GRI 301-2
GRI 301-3
54
Energy use, direct and indirect
GRI 302-1
54
Measures taken to improve energy efficiency
GRI 103-2
GRI 302-4
50, 54
Use of renewable energies
GRI 302-1
54
Climate change
The important elements of greenhouse gas emissions generated as a result of
the company's ac ivities, including the use of the goods and services it produces
GRI 305-1
GRI 305-2
GRI 305-3
50
Measures taken to adapt to the consequences of climate change
GRI 103-2
50
Reduc ion goals established voluntarily in the medium and long term to reduce
greenhouse gas emissions and measures implemented for that purpose
GRI 305-4
GRI 305-5
50
Protection of
biodiversity
Measures taken to protect or restore biodiversity
GRI 102-46
42
Impacts caused by activities or operations in protected areas
GRI 102-46
n/a
Social and personnel questions
Employees
Total number and distribution of employees according to country, gender, age,
country and professional classification
GRI 102-8
GRI 405-1
55
Total number and distribution of work contract modalities
GRI 102-8
55
Annual average of work contract modalities (permanent, temporary and part-time)
by sex, age, and professional classification
GRI 102-9
55
Number of dismissals by sex, age, and professional classification
GRI 103-2
55
Salary gap
GRI 103-2
GRI 405-2
56
The average remunera ions and their evolution disaggregated by sex, age, and
professional classification or equal value
GRI 103-2
GRI 405-2
56
The average remunera ion of directors and execu ives, including variable
remuneration, allowances, compensation, payment to long-term forecast savings
and any other perception broken down by gender
GRI 103-2
GRI 405-2
57
Implementation of employment termination policies
GRI 103-2
45
Employees with disabilities
GRI 405-1
57
Work organization
Work schedule organization
GRI 103-2
45-46
Number of hours of absenteeism
GRI 403-9
(2018 GRI version)
57
Measures aimed to facilitate the conciliation while encouraging the co-
responsible performance by both parents
GRI 103-2
GRI 401-3
46
Health and safety
Work health and safety conditions
GRI 403-1
GRI 403-2
GRI 403-3
GRI 403-7
(2018 GRI version)
46
Work accidents, in par icular their frequency and severity, disaggregated by
gender
GRI 403-9
GRI 403-10
(2018 GRI version)
57
Occupational diseases, disaggregated by gender
GRI 403-9
GRI 403-10
(2018 GRI version)
57
Social relationships
Organization of social dialog, including procedures to inform and consult staff and
negotiate with them
GRI 103-2
47
Percentage of employees covered by collective agreement by country
GRI 102-41
56
The balance of collective agreements, particularly in the field of health and safety
at work
GRI 403-3
56
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Non-financial Information Statement
67
Non-financial Information Report. Contents index of the Law 11/2018
Training
Policies implemented for training activities
GRI 103-2
GRI 404-2
46
The total amount of training hours by professional category
GRI 404-1
46
Universal accessibility
for people with
disabilities
Universal accessibility for people with disabilities
GRI 103-2
45
Equality
Measures taken to promote equal treatment and opportunities between women
and men
GRI 103-2
46
Equality plans (Section III of Organic Law 3/2007, of March 22, for the effective
equality of women and men)
GRI 103-2
46
Measures adopted to promote employment, protocols against sexual and gender-
based harassment, integration, and the universal accessibility of people with
disabilities
GRI 103-2
46
Policy against any type of discrimination and, where appropriate, diversity
management
GRI 103-2
46, 48
Information about the respect for human rights
Human rights
Application of due diligence procedures in the field of human rights; prevention of
the risks of violation of human rights and, where appropriate, measures to
mitigate, manage, and repair possible abuses committed
GRI 102-16
GRI 102-17
GRI 412-1
45
Claims regarding cases of human rights violations
GRI 103-2
GRI 406-1
45
Promotion and compliance with the provisions contained in the related
fundamental Conventions of the International Labor Organization with respect for
freedom of association and the right to collective bargaining; the elimina ion of
discrimination in employment and occupation; the elimination of forced or
compulsory labor; and the effective abolition of child labor
GRI 103-2
GRI 407-1
GRI 408-1
GRI 409-1
45
Information about anti-bribery and anti-corruption measures
Corruption and bribery
Measures adopted to prevent corruption and bribery
GRI 103-2
GRI 102-16
GRI 102-17
GRI 205-2
45
Measures adopted to fight against anti-money laundering
GRI 103-2
GRI 102-16
GRI 102-17
GRI 205-2
45
Contributions to foundations and non-profit-making bodies
GRI 102-13
GRI 201-1
57
Information about the society
Commitment by the
company to sustainable
development
Impact of the company’s activities on employment and local development
GRI 103-2
GRI 203-2
GRI 204-1
47
The impact of company activity on local populations and on the territory
GRI 413-1
GRI 413-2
47
The relationships maintained with representatives of the local communities and
the modali ies of dialog with these
GRI 102-43
GRI 413-1
47
Ac ions of association or sponsorship
GRI 103-2
GRI 201-1
47
Subcontractors and
suppliers
The inclusion of social, gender equality and environmental issues in the
purchasing policy
GRI 103-2
42
Consideration of social and environmental responsibility in relations with
suppliers and subcontractors
GRI 102-9
GRI 308-1
42
Supervision systems and audits, and their results
GRI 102-9
GRI 308-2
43
Consumers
Customer health and safety measures
GRI 103-2
43
Claims systems, complaints received and their resolution
GRI 103-2
GRI 418-1
43
Tax information
Benefits obtained by country
GRI 103-2
GRI 207-4
58
Taxes on paid benefits
GRI 103-2
GRI 207-4
59
Public subsidies received
GRI 201-4
59-60
Other indicators
AmRest Taxonomy disclosure
Regula ion (EU) 2020/852 of the
European Parliament and of the
Council of June 18th 2020 and
its Delegated Acts
51-53
Data identify issuer
Ending date of reference financial year
31/12/2021
Tax Identification Code [C.I.F]
A88063979
Registered name
AmRest Holdings SE
Registered office
Paseo de la Castellana, 163, 10° floor, 28046 Madrid, Spain
Annual Corporate Governance
report of listed companies
for the year ended 31 December 2021
AmRest Holding SE
Annual corporate governance report of listed companies
for the year ended 31 December 2021
A. OWNERSHIP STRUCTURE ................................................................................................................................................................................. 70
B. GENERAL SHAREHOLDER’S MEETING ............................................................................................................................................................. 75
C. STRUCTURE OF THE COMPANY'S ADMINISTRATION ..................................................................................................................................... 77
D. RELATED-PARTY AND INTRAGROUP TRANSACTIONS ................................................................................................................................... 94
E. RISK MANGEMENT AND CONTROL SYSTEMS ................................................................................................................................................. 97
F. INTERNAL RISK MANAGEMENT AND CONTROL SYSTEMS RELATING TO THE PROCESS OF PUBLISHING FINANCIAL INFORMATION
(ICFR) .......................................................................................................................................................................................................................... 102
G. DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS
........................................................................ 107
H. FURTHER INFORMATION OF INTEREST ....................................................................................................................................................... .118
Contents
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
70
A. OWNERSHIP STRUCTURE
A.1 Complete the following table on share capital and the attributed voting rights, including those corresponding
to shares with a loyalty vote as of the closing date of the year, where appropriate:
Indicate whether company bylaws contain the provision of double loyalty voting:
Yes _ No X
Indicate whether the company has awarded votes for loyalty:
Yes _ No X
Date of the last
modification of the
share capital
Share capital
(euros)
Number of
shares
Number of voting
rights (not
including additional
loyalty-attributed
votes)
Number of additional
attributed voting
rights corresponding
to shares with a
loyalty vote
Total number of
voting rights,
including additional
loyalty-attributed
votes
15/10/2018
21,955,418.30
219,554,183
219,554,183
0
219,554,183
Number of shares registered in the special register pending the expiry of the loyalty period
0
Remarks
Indicate whether there are different classes of shares with different associated rights:
Yes _ No X
A.2 List the company’s significant direct and indirect shareholders at year end, including directors with a
significant shareholding:
Name or company name
of shareholder
% of voting rights
attached to the
shares (including
votes for loyalty)
% of voting rights
through financial
instruments
% of total voting
rights
From the total number of voting rights
attributed to the shares, indicate, where
appropriate, the additional votes
attributed corresponding to the shares
with a loyalty vote
Direct
Indirect
Direct
Indirect
Direct
Indirect
Artal International SCA
5.18
0.000
0.000
0.000
5.18
0.000
0.000
AVIVA Otwarty Fundusz
Emerytalny AVIVA
BZWBK SA
3.12
0.000
0.000
0.000
3.12
0.000
0.000
Nationale-Nederlanden
Open Pension Fund
4.26
0.000
0.000
0.000
4.26
0.000
0.000
FCAPITAL DUTCH, B.V.
41.31
0.000
0.000
0.000
41.31
0.000
0.000
FCAPITAL LUX, S.A.R.L.
25.74
0.000
0.000
0.000
25.74
0.000
0.000
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
71
Remarks
See Section H.2.
Breakdown of the indirect holding:
Name or company
name of the indirect
owner
Name or company
name of the direct
owner
% of voting rights
attached to the
shares (including
votes for loyalty)
% of voting rights
through financial
instruments
% of total voting
rights
From the total number of voting
rights attributed to the shares,
indicate, where appop,nm
ropriate, the additional votes
attributed corresponding to the
shares with a loyalty vote
Indicate the most significant changes in the shareholder structure during the year:
Most significant movements
N/A
A.3 Give details of the participation at the close of the fiscal year of the members of the board of directors who are
holders of voting rights attributed to shares of the company or through financial instruments, whatever the
percentage, excluding the directors who have been identified in Section A2 above:
Name or
company
name of
director
% of voting rights
attached to the
shares (including
loyalty votes)
% of voting rights
through financial
instruments
% of total
voting
rights
From the total % of voting rights attributed
to the shares, indicate, where appropriate,
the % of the additional votes attributed
corresponding to the shares with a loyalty
vote
% voting rights that
can be transmitted
through financial
instruments
Direct
Indirect
Direct
Indirect
Direct
Indirect
Direct
Indirect
Total percentage of voting rights held by the Board of Directors
67.05
Remarks
See Section A.2.
Breakdown of the indirect holding
Name or company name
of director
Name or company
name of the direct
owner
% of voting
rights
attached to
the shares
(including
loyalty votes)
% of voting
rights
through
financial
instruments
% of total
voting
rights
From the total % of
voting rights
attributed to the
shares, indicate,
where appropriate,
the % of the
additional votes
attributed
corresponding to
the shares with a
loyalty vote
% voting rights
that can be
transmitted
through
financial
instruments
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
72
List the total percentage of voting rights represented on the board:
Total percentage of voting rights held by the Board of Directors
67.05
A.4 If applicable, indicate any family, commercial, contractual or corporate relationships that exist among
significant shareholders to the extent that they are known to the company, unless they are insignificant or arise
in the ordinary course of business, with the exception of those reported in section A.6:
Name or company name of related party
Nature of relationship
Brief description
A.5 If applicable, indicate any commercial, contractual or corporate relationships that exist between significant
shareholders and the company and/or its group, unless they are insignificant or arise in the ordinary course of
business:
Name or company name of related party
Nature of relationship
Brief description
A.6 Unless insignificant for both parties, describe the relationships that exist between significant shareholders,
shareholders represented on the Board and directors or their representatives in the case of directors that are legal
persons.
Explain, if applicable, how the significant shareholders are represented. Specifically, indicate those directors appointed to
represent significant shareholders, those whose appointment was proposed by significant shareholders, or who are linked
to significant shareholders and/or companies in their group, specifying the nature of such relationships or ties. In particular,
mention the existence, identity and post of any directors of the listed company, or their representatives, who are in turn
members or representatives of members of the Board of Directors of companies that hold significant shareholdings in the
listed company or in group companies of these significant shareholders.
Name or company name
of related director or
representative
Name or company name
of related significant
shareholder
Company name of the
group company of the
significant shareholder
Description
of relationship/post
Luis Miguel Álvarez Pérez
FCapital Dutch, B.V.
Grupo Finaccess
S.A.P.I. de C.V.
Luis Miguel Álvarez Pérez is a proprietary
director of controlling shareholder Grupo
Finaccess.
José Parés Gutiérrez
FCapital Dutch, B.V.
Grupo Finaccess
S.A.P.I. de C.V.
José Parés is an executive director linked to
controlling shareholder Grupo Finaccess.
Carlos Fernández González
FCapital Dutch, B.V.
Grupo Finaccess
S.A.P.I. de C.V.
Carlos Fernández González is a proprietary
director of controlling shareholder Grupo
Finaccess.
Remarks
A.7 Indicate whether the company has been notified of any shareholders’ agreements that may affect it, in
accordance with the provisions of Articles 530 and 531 of the Spanish Corporate Enterprises Act. If so, describe
them briefly and list the shareholders bound by the agreement:
Yes No X
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
73
Parties
to the shareholders’
agreement
% of share capital
concerned
Brief description
of the agreement
Expiry date
of the agreement, if any
Indicate whether the company is aware of any concerted actions among its shareholders. If so, provide a brief
description:
Yes No X
Parties to the concerted action
% of share capital concerned
Brief description
of the concerted action
Expiry date
of the concert, if any
If any of the aforementioned agreements or concerted actions have been amended or terminated during the year,
indicate this expressly:
A.8 Indicate whether any individual or company exercises or may exercise control over the company in
accordance with Article 5 of the Securities Market Act. If so, identify them:
Yes X No
Name or company name
CARLOS FERNÁNDEZ GONZÁLEZ
Remarks
FCapital Dutch, B.V., FCapital Lux, S.à.r.l. – being direct shareholders of AmRest – hold jointly 67.05% of the voting rights in the company.
Finaccess Capital, S.A. de C.V. controls first two direct shareholders (FCapital Dutch, B.V., FCapital Lux, S.à.r.l.), and is in turn owned by
Grupo Finaccess, S.A.P.I. de C.V.
Carlos Fernández González owns the majority of the share capital and voting rights in Grupo Far-Luca, S.A. de C.V., which in turn controls
Grupo Finaccess, S.A.P.I. de C.V.
A.9 Complete the following table with details of the company’s treasury shares:
At the close of the year:
Number of direct shares
Number of indirect shares (*)
Total percentage of share capital
371 416
-
0.1692%
(*) Through:
Name or company name of direct shareholder
Number of direct shares
Total:
Explain any significant changes during the year:
Explain significant changes
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
74
A.10 Provide a detailed description of the conditions and terms of the authority given to the Board of Directors
to issue, repurchase, or dispose of treasury shares.
The general shareholders’ meeting held on 6 June 2018 authorised the company’s Board of Directors to buy back treasury shares under the
following terms: (i) the acquisition may be executed in the form of a sale and purchase transaction, shares swap, shares distribution or shares
in lieu of payment and, in general, via any other lawful acquisition method involving valuable consideration for shares in circulation. Such
transaction may be executed once or on several occasions, provided that the acquired shares – added to those already in the company’s
possession – do not exceed the maximum permitted by law; (ii) the price or exchange value will range between a minimum amounting to their
par value and a maximum equivalent to the closing price of the shares on the Continuous Market upon their acquisition; and (iii) the
aforementioned authorisation will remain in place for five years as of the following day on which this resolution was adopted. Moreover, the
resolution stipulates that the shares acquired under this authorised transaction(s) may be disposed of, used in the successful bidding process
of potential corporate deals or applied to the remuneration mechanisms set forth under Article 146.1 a) of the Spanish Capital Companies Act
(such as AmRest’s long term incentive plan for employees).
In addition, a resolution was also passed at the general shareholders’ meeting to delegate the authority to the Board of Directors to increase
the company’s share capital and issue convertible securities – including the ability to exclude pre-emptive rights (restricted in this instance to
20% of the share capital) – in accordance with the terms of the Spanish Capital Companies Act.
A.11 Estimated float:
%
Estimated float
20.23
Remarks
The company’s free float amounts to just above 20% once the stakes of shareholders holding at least 3% of the shares, the shares owned by
the company’s directors closely related to significant shareholders and the treasury stock have been discounted.
A.12 Indicate whether there are any restrictions (articles of incorporation, legislative or of any other nature) placed
on the transfer of shares and/or any restrictions on voting rights. In particular, indicate the existence of any type
of restriction that may inhibit a takeover of the company through acquisition of its shares on the market, as well
as such regimes for prior authorisation or notification that may be applicable, under sector regulations, to
acquisitions or transfers of the company’s financial instruments.
Yes No X
Description of restrictions
A.13 Indicate whether the general shareholders' meeting has resolved to adopt measures to neutralise a
takeover bid by virtue of the provisions of Law 6/2007.
Yes No X
If so, explain the measures approved and the terms under which such limitations would cease to apply:
Explain the measures approved and the terms under which such limitations would cease to apply
A.14 Indicate whether the company has issued shares that are not traded on a regulated EU market.
Yes No X
If so, indicate each share class and the rights and obligations conferred.
Indicate the various share classes
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
75
B. GENERAL SHAREHOLDER’S MEETING
B.1 Indicate whether there are any differences between the minimum quorum regime established by the Spanish
Corporate Enterprises Act for General Shareholders’ Meetings and the quorum set by the company, and if so give
details:
Yes X No
% quorum different from that established
in Article 193 of the Spanish Corporate
Enterprises Act for general matters
% quorum different from that established
in Article 194 of the Spanish Corporate
Enterprises Act for special resolutions
Quorum required at
1st call
At least 40% of share capital subscr bed with
voting rights.
At least 60% of share capital subscr bed with
voting rights.
Quorum required at
2nd call
N/A
At least 40% of share capital subscr bed with
voting rights.
Description of differences
B.2 Indicate whether there are any differences between the company’s manner of adopting corporate resolutions
and the regime provided in the Spanish Corporate Enterprises Act and, if so, give details:
Yes No X
Describe how it is different from the regime provided in the Spanish Corporate Enterprises Act.
Qualified majority other than that set
forth in Article 201.2 of the Corporate
Enterprises Act for matters referred to in
Article 194.1 of this Act
Other matters requiring a qualified majority
% established by the
company for the adoption of resolutions
B.3 Indicate the rules for amending the company’s articles of incorporation. In particular, indicate the majorities
required for amendment of the articles of incorporation and any provisions in place to protect shareholders’ rights
in the event of amendments to the articles of incorporation.
B.4 Give details of attendance at General Shareholders’ Meetings held during the reporting year and the two
previous years:
Describe the
differences
Pursuant to Articles 19 and 20 of AmRest’s Articles of Association and Articles 16 and 26 of the Board of Directors Regulation, where an ordinary
or extraordinary general shareholders’ meeting is arranged to discuss amendments to the Articles of Association, shareholders representing at
least 60% of the share capital subscribed with voting rights must be in attendance at the first call (‘primera convocatoria’) for such meeting(s) to
be considered valid. At second call (‘segunda convocatoria’), at least 40% of the subscribed capital with voting rights is required.
With regard to the adoption of resolutions, the Articles of Association and Board Regulation refer to the terms set forth by law, i.e. resolutions
adopted by way of absolute majority where the present or represented capital equals 50% (60% at the first call). At second call, where
shareholders representing less than 50% of the capital subscribed with voting rights are present, resolutions concerning amendments to the
Articles of Association may only be validly adopted with a favourable vote of two-thirds of the present or represented shared capital at the
general shareholders’ meeting.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
76
Attendance data
Date of General Meeting
% physically
present
% present by proxy
% distance voting
Total
Electronic voting
Other
30/06/2021
0.00%
70.00%
0.00%
0.00%
70.00%
Of which floating capital:
0.00%
2.95%
0.00%
0.00%
2.95%
12/05/2021
0.00%
68.723%
0.00%
0.00%
68.723%
Of which floating capital:
0.00%
1.673%
0.00%
0.00%
1.673%
10/06/2020
0.00%
70.32%
0.00%
0.00%
70.32%
Of which floating capital:
0.00%
4.66%
0.00%
0.00%
4.66%
14/05/2019
0.00%
79.26%
0.00%
0.00%
79.26%
Of which floating capital:
0.00%
12.18%
0.00%
0.00%
12.18%
06/06/2019
0.00%
76.50%
0.00%
8.19%
84.69%
Of which floating capital:
0.00%
1.20%
0.00%
3.14%
4.34%
Remarks
B.5 Indicate whether any point on the agenda of the General Shareholders’ Meetings during the year was not
approved by the shareholders for any reason.
Yes No X
Items on the agenda not approved
% votes against (*)
(*) If the non-approval of the point was for a reason other than the votes against, this will be explained in the text part
and “N/A” will be placed in the "% votes against" column.
B.6 Indicate whether the articles of incorporation contain any restrictions requiring a minimum number of shares
to attend General Shareholders’ Meetings, or to vote remotely:
Yes No X
Number of shares required to attend General Meetings
Number of shares required for voting remotely
B.7 Indicate whether it has been established that certain decisions, other than those established by law, entailing
an acquisition, disposal or contribution to another company of essential assets or other similar corporate
transactions must be submitted for approval to the General Shareholders’ Meeting.
Yes No X
Explain the decisions that must be submitted to the General Shareholders’ Meeting, other than those established by law
B.8 Indicate the address and manner of access on the company's website to information on corporate governance
and other information regarding General Shareholders’ Meetings that must be made available to shareholders
through the company website.
The company’s website address is www.amrest.eu. Information on corporate governance can be found by clicking on the “Investors” tab and
subsequently the “Corporate governance” and “General Shareholders Meeting” subsections of the menu (among others).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
77
C. STRUCTURE OF THE COMPANY'S ADMINISTRATION
C.1 BOARD OF DIRECTORS
C1.1 Maximum and minimum number of directors established in the articles of incorporation and the number set
by the general meeting:
Maximum number of directors
15
Minimum number of directors
5
Number of directors set by the general meeting
7
C1.2 Complete the following table on Board members:
Name or
company
name of
director
Represen-
tative
Category of
director
Position on
the board
Date first
appointed
Date of last
appointment
Election
procedure
Date of birth
José
Parés
Gutiérrez
Executive
Executive
Chairman
October 5,
2017
October 5,
2017
General
shareholders’
meeting
resolution
August 12,
1970
Luis
Miguel
Álvarez
Pérez
Proprietary
Vice chairman
October 5,
2017
October 5,
2017
General
shareholders’
meeting
resolution
January 31,
1970
Carlos
Fernández
González
Proprietary
Member
October 5,
2017
October 5,
2017
General
shareholders’
meeting
resolution
September 29,
1966
Romana
Sadurska
Independent
Vocal
May 14, 2019
June 10, 2020
General
shareholders’
meeting
resolution
July 28, 1951
Emilio
Fullaondo
Botella
Independent
Vocal
May 14, 2019
June 10, 2020
General
shareholders’
meeting
resolution
May 22, 1971
Pablo
Castilla
Reparaz
Independent
Member- Lead
Independent
Director
October 5,
2017
October 5,
2017
General
shareholders’
meeting
resolution
December 6,
1960
Mónica
Cueva
Díaz
Independent
Member
July 1, 2020
May 12, 2021
General
shareholders’
meeting
resolution
April 6, 1965
Total number of Directors
7
Indicate any cessations, whether through resignation or by resolution of the general meeting, that have taken place in the
Board of Directors during the reporting period:
Name or company
name of director
Category of the
director at the
time of cessation
Date of last
appointment
Date of
cessation
Specialised
committees of
which he/she was a
member
Indicate whether the
director left before the
end of his or her term
of office
Reason for cessation when this occurs before the end of the term of office and other observations; information on whether the director
has sent a letter to the remaining members of the board and, in the case of cessation of non-executive directors, explanation or
opinion of the director dismissed by the general meeting
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
78
C1.3 Complete the following table on Board members and their different category:
EXECUTIVE DIRECTORS
Name or company name of director
Post in organizational chart of the
company
Profile
José Parés Gutiérrez
Previously proprietary director. The
Executive Chairman was delegated all
of the powers that correspond to the
Board of Directors except those that
are non-delegable by virtue of the
current legislation, the Bylaws and the
Regulations of the Board of Directors
of AmRest.
CEO of Finaccess Capital since 2013, in charge
of portfolio management and Chairman of the
Board of Restaurant Brands New Zealand
Limited. He spent 19 years of his career working
in various roles for Grupo Modelo and was the
member of the Board of Crown Imports (Chicago,
Illinois), Vice Chairman of the Board of MMI
(Toronto, Canada), member of the Board of DIFA
(Mexico) and a former member of the Mexican
Brewers Association (Cámara de Cerveceros de
México).
Total number of Executive Directors
1
Percentage of Board
14.29
EXTERNAL PROPRIETARY DIRECTORS
Name or company
name of director
Name or company name of the
significant shareholder
represented by the director or that
nominated the director
Profile
Luis Miguel Álvarez
Pérez
Grupo Finaccess S.A.P.I. de C.V.
Board Member, Audit Committee Member and Investment Committee
Member of Finaccess, S.A.P.I. Founder and CEO of Compitalia, S.A. de
C.V. Member of the Board of Restaurant Brands New Zealand Limited.
Previously held several roles at Grupo Modelo. Currently a member of the
board of numerous private companies and NGOs.
Carlos Fernández
González
Grupo Finaccess S.A.P.I. de C.V.
Mr. Carlos Fernández has held management functions in various
economic sectors for more than 30 years. He currently holds the role of
Chairman of the Board of Directors and CEO of Grupo Finaccess S.A.P.I.
de C.V. He is also currently a proprietary director of Inmobiliaria Colonial
Socimi, S.A. (Spain) and member of the Board of Restaurant Brands New
Zealand Limited (New Zealand). Previously held several roles at Grupo
Modelo (the last one as Chairman of the Board and CEO) and has also
served on the boards of national and international companies (such as
independent Board member of Banco Santander).
Total number of proprietary directors
2
Percentage of Board
28.57
EXTERNAL INDEPENDENT DIRECTORS
Name or company name of director
Profile
Pablo Castilla Reparaz
Mr. Pablo Castilla has held the roles of Director of Santander Direkt Bank (Germany),
Director of Banco Mercantil (Peru), Non-member Secretary of BT
Telecomunicaciones, S.A., Member Secretary of Santander Investment, S.A.,
Secretary of the Grupo Santander Investment Committee, Director Secretary of
OpenBank and Member Secretary of Grupo Vitaldent. Mr. Castilla held the position of
International and Corporate Legal Manager of Banco Santander for more than 20
years.
Mónica Cueva Díaz
Ms. Mónica Cueva worked with Banco Santander for more than 30 years, holding
various roles in different jurisdictions, generally linked to the financial, accounting and
control areas. Ms. Mónica Cueva has also led important integration processes such
as the acquisition of ABN AMRO.
Ms. Mónica Cueva has also been a college professor and lecturer, and a member of
the European Banking Authority representing Banco Santander.
Ms. Mónica Cueva has been a director in numerous companies of the Santander
Group and currently holds the position of director of Banco Santander Rio (Argentina).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
79
Romana Sadurska
Ms. Romana Sadurska holds a Law degree (Warsaw University) and LLM from Yale
University and PhD from the Polish Academy of Sciences. She was a professor at the
University of Sidney and the Australian National University, as well as partner
Secretary General of the Spanish law firm Uria Menedez, being responsible for the
practice area of Central and Eastern Europe of said firm. She currently holds the
position of Executive Vice Chairman of the Professor Uria Foundation and is a
member of the Patronage (“Patronato”) of the Aspen Institute Spain.
Emilio Fullaondo Botella
Mr. Emilio Fullaondo has held senior management positions for more than twenty-
three years in the beer industry, leading various departments related to the financial
area of the Mexican beer group Grupo Modelo, including the position of Chief Financial
Officer for a period of four years and subsequently in the Belgian company AB InBev,
following the acquisition by Grupo Modelo as Chief People Officer for Middle Americas
until his resignation in January 2019. He is also an independent director of the
Restaurant Brands company, which is listed on the New Zealand Stock Exchange
(NZX) and the Australian Securities Exchange (ASX).
Number of independent directors
4
Percentage of the Board
57.14
Indicate whether any director classified as independent receives from the company or any company in its group any amount
or benefit other than remuneration as a director, or has or has had a business relationship with the company or any company
in its group during the past year, whether in his or her own name or as a significant shareholder, director or senior executive
of a company that has or has had such a relationship.
If so, include a reasoned statement by the Board explaining why it believes that the director in question can perform his or
her duties as an independent director.
Name or company name of director
Description
of the relationship
Reasoned statement
OTHER EXTERNAL DIRECTORS
Identify the other external directors, indicate the reasons why they cannot be considered either proprietary or
independent, and detail their ties with the company or its management or shareholders:
Name or company
name of director
Reason
Company, manager or shareholder to
which or to whom the director is related
Profile
Total number of other external directors
Percentage of the Board
Indicate any changes that have occurred during the period in each director's category:
Name or company name of
director
Date of change
Previous category
Current category
C1.4 Complete the following table with information relating to the number of female directors at the close of the
past four years, as well as the category of each:
Number of female directors
% of total directors for each category
Year n
Year n-1
Year n-2
Year n-3
Year n
Year n-1
Year n-2
Year n-3
Executive
0
0
0
0
0.00%
0.00%
0.00%
0.00%
Proprietary
0
0
0
0
0.00%
0.00%
0.00%
0.00%
Independent
2
2
1
0
28.57%
28.57%
14.29%
0.00%
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
80
Number of female directors
% of total directors for each category
Year n
Year n-1
Year n-2
Year n-3
Year n
Year n-1
Year n-2
Year n-3
Other external
0
0
0
0
0.00%
0.00%
0.00%
0.00%
Total
2
2
1
0
28.57%
28.57%
14.29%
0.00%
Remarks
C1.5 Indicate whether the company has diversity policies in relation to its Board of Directors on such
questions as age, gender, disability, education and professional experience. Small and medium-sized
enterprises, in accordance with the definition set out in the Spanish Auditing Act, will have to report at least
the policy that they have implemented in relation to gender diversity.
Yes X No
Partial policies
If so, describe these diversity policies, their objectives, the measures and the way in which they have been applied
and their results over the year. Also indicate the specific measures adopted by the Board of Directors and the
nomination and remuneration committee to achieve a balanced and diverse presence of directors.
If the company does not apply a diversity policy, explain the reasons why
C1.6 Describe the measures, if any, agreed upon by the nomination committee to ensure that selection procedures
do not contain hidden biases which impede the selection of female directors and that the company deliberately
seeks and includes women who meet the target professional profile among potential candidates, making it
possible to achieve a balance between men and women. Also indicate whether these measures include
encouraging the company to have a significant number of female senior executives:
Explanation of measures
Board members are selected and appointed based on the company’s needs and in compliance with the requirements set out in the AmRest
Director Selection Policy. The Board of Directors and Appointments Committee seek candidates who bring a wealth of diverse knowledge,
abilities, experience and profile within the company. Searches are essentially based on the notion that the chosen candidates provide
experience, know-how and professional merit, as well as demonstrating conduct and a background aligned to AmRest’s values. Any male or
female who meets these requirements can be included in the selection process.
In the last two years, Ms Romana Sadurska and Ms Mónica Cueva Díaz have been appointed as directors.
The Group strives to ensure that senior management has the necessary diversity of knowledge, skills, experience and gender, although
there is no specific policy to this effect.
If in spite of any measures adopted there are few or no female directors or senior managers, explain the reasons for this:
Description of policies, objectives, measures and how they have been applied, and results achieved
AmRest counts with a Directors’ Selection Policy, dated December2018, that apply to the selection of prospective directors. The purpose of
that policy is to ensure that, in the process for the selection of prospective directors, those individuals who meet the requirements laid down in
this Policy and who, given their profile and description, favour diversity of knowledge, skills, experiences and gender on the Board of Directors,
shall be considered and any implicit bias which might entail any manner of discrimination and specifically hamper selection of female directors
shall be prevented. The aim of this policy is to comply with AmRest’s commitment to the diverse composition of its board of directors.
Specifically and with regard to gender diversity, AmRest Director Selection Policy specifically states that all possible efforts shall be made so
that within five years from approval of the policy, female directors would represent at least 30% of the Board members. The Company shall
encourage females to apply for director roles during selection processes. In this sense, the first female member of AmRest Board of Directors,
Ms. Romana Sadurska, was appointed in May 2019, followed by the second female director of the Company, Ms Mónica Cueva Díaz, appointed
in July 2020, which evidence AmRest’s commitment with the compliance of its diversity goals.
In accordance with the AmRest Director Selection Policy, Prospective directors of the Company shall meet the following requirements (i) be
honest, appropriate persons of well-known ability, competence, experience and merits, (ii) be trustworthy professionals, whose conduct and
career are in line with the principles laid down in the Code of Business Conduct and with the views and values of the AmRest Group. In the
process for the selection of directors, efforts shall be made so that the Board of Directors would reach an appropriate balance of profiles,
knowledge, skills, careers and experiences so that multiple viewpoints are contributed to the discussion of the business transacted and the
decision-making process is enriched so that the diversity within AmRest Board of Directors is ensured.
AmRest is firmly convinced that diversity in all its facets and at all levels of its professional team, is an essential factor in ensuring the Company's
competitiveness and an important element that favours a critical attitude, as well as members having different points of view and different
positions.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
81
Explanation of reasons
Recently, there has been a restructuring in the composition of senior management, so that gender diversity has been affected. The Company
is aware of the situation and is dedicating efforts to balance the gender diversity at senior management level.
C1.7 Explain the conclusions of the nomination committee regarding verification of compliance with the policy
aimed at promoting an appropriate composition of the Board of Directors.
AmRest Director Selection Policy specifically states that all possible efforts shall be made so that within five years from approval of the policy
(December 2018), female directors would represent at least 30% of the Board members. The Company shall encourage females to apply for
director roles during selection and Board member re-appointment processes. To comply with this commitment, the first female member of
AmRest Board of Directors, Ms. Romana Sadurska, was appointed in May 2019, followed by the second female director of the Company, Ms
Mónica Cueva Díaz, appointed in July 2020.
C1.8 If applicable, explain the reasons for the appointment of any proprietary directors at the request of
shareholders with less than a 3% equity interest:
Name or company name of shareholder
Reason
Indicate whether the Board has declined any formal requests for presence on the Board from shareholders whose equity
interest is equal to or greater than that of others at whose request proprietary directors have been appointed. If so,
explain why the requests were not granted:
Yes No X
Name or company name of shareholder
Explanation
C.1.9 Indicate the powers, if any, delegated by the Board of Directors, including those relating to the option of
issuing or re-purchasing shares, to directors or board committees:
Name or company name of director or
committee
Brief description
Executive Committee
The Executive Committee has been delegated all of the Board’s faculties, aside from those
which may not be delegated according to the law, the Articles of Association and the Board of
Directors Regulation.
Mr. José Parés Gutiérrez
The board of directors delegated to Mr. José Parés Gutiérrez all the powers inherent to the
position of executive director at the time of his appointment in November 2020, with effects
from 1 January 2021.
C.1.10 Identify any members of the Board who are also directors, representatives of directors or managers in other
companies forming part of the listed company's group:
Name or company name of
director
Company name of the group
entity
Position
Does the director have executive
powers?
C.1.11 List the positions of director, administrator or representative thereof, held by directors or representatives
of directors who are members of the company's board of directors in other entities, whether or not they are listed
companies:
Identity of the director or
representative
Company name of the listed or non-listed entity
Position
José Parés Gutierrez
Finaccess Capital, S.A. de C.V.
Sole Director
José Parés Gutierrez
Finaccess Filantropía, A.C.
Member of the managers board
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
82
José Parés Gutierrez
Fundación Antonino y Cinia, A.C.
Member of the managers board
José Parés Gutierrez
Grupo Far-Luca, S.A. de C.V.
Director
José Parés Gutierrez
Grupo Finaccess, S.A.P.I. de C.V.
Director
José Parés Gutierrez
Wafi, S.A. de C.V.
Sole Director
José Parés Gutierrez
Tenedora PGB, S.A. de C.V.
Sole Director
José Parés Gutierrez
Finaccess Capital USA, Inc.
Chairman
José Parés Gutierrez
Fincap USA, Inc.
Manager
José Parés Gutierrez
Grupo RBNZ México, S.A. de C.V.
Sole Director
José Parés Gutiérrez
Restaurant Brands New Zealand Limited.
Chairman
José Parés Gutierrez
GD Holdings USA Inc.
Sole Director
José Parés Gutierrez
Destilados GD SAPI de CV
Chairman
Luis Miguel Álvarez Pérez
Finaccess Filantropía, A.C.
Chairman
Luis Miguel Álvarez Pérez
Finaccess Social, S.A. de C.V.
Director
Luis Miguel Álvarez Pérez
Grupo Finaccess, S.A.P.I. de C.V.
Director
Luis Miguel Álvarez Pérez
Cristel House Mexico, A.C.
Director
Luis Miguel Álvarez Pérez
Gestación de Proyectos Sociales, A.C.
Director
Luis Miguel Álvarez Pérez
Compitalia, S.A. de C.V.
CEO
Luis Miguel Álvarez Pérez
Restaurant Brands New Zealand Limited
Director
Luis Miguel Álvarez Pérez
Rancho La Escandalera, S.A. de C.V.
Sole Director
Luis Miguel Álvarez Pérez
Destilados GD, S.A.P.I. de C.V.
Director
Luis Miguel Álvarez Pérez
Global Beverage Team, LLC
Director
Luis Miguel Álvarez Pérez
Sueños y Conceptos Inmobiliarios, S.A. de C.V.
Director Secretary
Luis Miguel Álvarez Pérez
Fornix, S.A. de C.V.
Chairman
Luis Miguel Álvarez Pérez
Cima Everest, S.A. de C.V.
Chairman
Luis Miguel Álvarez Pérez
Grupo Aradam, S.A.P.I. de C.V.
Director
Carlos Fernández González
Inmobiliaria Colonial SOCIMI, S.A.
Director
Carlos Fernández González
Restaurant Brands New Zealand Limited.
Director
Carlos Fernández González
Centros de Conocimiento Tecnológico, S.A. de C.V.
Director
Carlos Fernández González
Estudia Mas, S.A.P.I. de C.V. (antes Promotora de
Credito Educativo, S.A.P.I. de C.V.)
Director
Carlos Fernández González
Prepárate, S.A. de C.V.
Director
Carlos Fernández González
Fundación CEPA González Díez
Chairman
Carlos Fernández González
Grupo Finaccess, S.A.P.I. de C.V.
Chairman and CEO
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
83
Carlos Fernández González
Endeavor España
Patron
Carlos Fernández González
Grupo Far-Luca, S.A. de C.V.
Chairman
Carlos Fernández González
Finacprom, S.A. de C.V.
Chairman
Carlos Fernández González
Fundación Antonino y Cinia, A.C.
Chairman
Carlos Fernández González
Finaccess Filantropía, A.C.
Director
Emilio Fullaondo Botella
Restaurant Brands New Zealand Limited
Director
Romana Sadurska
Fundación Profesor Uría
Executive Vice Chairman
Romana Sadurska
Aspen Institute España
Patron
Pablo Castilla Reparaz
Procurator Litigation Advisors, S.A.
Director
Pablo Castilla Reparaz
Fundación Dádoris
Patron Secretary
Mónica Cueva Díaz
Banco Santander Argentina
Director
Remarks
See Section H.2.
Indicate, where appropriate, the other remunerated activities of the directors or directors' representatives, whatever their nature,
other than those indicated in the previous table
Identity of the director or representative
Other paid activities
Luis Miguel Alvarez Pérez
Member of the Investment Committee of Grupo Educación, S.A. de C.V.
C.1.12 Indicate whether the company has established rules on the maximum number of company boards on
which its directors may sit, explaining if necessary and identifying where this is regulated, if applicable:
Yes X No
Explanation of the rules and identification of the document where this is regulated
Pursuant to Article 22 of the AmRest Board of Directors Regulation, directors shall not form part of more than four other listed companies’
boards of directors. In this regard, all of the companies’ boards of directors belonging to the same group will be considered to have one single
mandate as well as those holding board memberships as proprietary directors proposed by a company of the same group even if the stock
held in the company, or the level of control, may not qualify that company to be considered as part of the group.
Exceptionally, and provided there is just cause, the Company’s Board may exempt directors from this proh bition. In addition, directors shall
inform to the Appointments and Remuneration Committee of any material changes to their professional situation and any that may affect the
nature or condition by virtue of which they have been appointed as a director.
C.1.13 Indicate the remuneration received by the Board of Directors as a whole for the following items:
Remuneration accruing in favour of the Board of Directors in the financial year (thousands of euros)
745
Funds accumulated by current directors for long-term savings systems with consolidated economic rights
(thousands of euros)
0
Funds accumulated by current directors for long-term savings systems with unconsolidated economic
rights (thousands of euros)
0
Pension rights accumulated by former directors (thousands of euros)
0
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
84
Remarks
C.1.14 Identify members of senior management who are not also executive directors and indicate their total
remuneration accrued during the year:
Name or company name
Position(s)
Luis Comas
Chief Executive Officer
Ismael Sánchez Moreno
Chief People Officer
Daniel del Río Benitez
Chief Operations Officer
Eduardo Zamarripa
Chief Financial Officer
Santiago Gallo
Chief Marketing Officer
Robert Żuk
Chief Information Officer
Ramanurup Sen
Food Services President
Mauricio Gárate Meza
General Counsel
Number of women in senior management
0
Percentage of total senior management
0.00%
Total remuneration of senior management (thousands of euros)
3 279
Remarks
During 2021, there was an important restructuring in the composition of senior management.
Above table reflects the composition of the senior management as of December 31
st
, 2021. Although, presented total remuneration of senior
management includes salaries of persons who departed the Company during 2021.
C.1.15 Indicate whether the Board regulations were amended during the year:
Yes No X
Description of amendment(s)
C.1.16 Specify the procedures for selection, appointment, re-election and removal of directors. List the competent
bodies, steps to follow and criteria applied in each procedure.
Pursuant to Article 14 of the AmRest Articles of Association and Article 7 of the General Shareholders’ Meeting Regulation, said shareholders’
meeting shall be responsible for appointing and removing directors, as well as ratifying directors appointed by co-optation.
Nevertheless, in accordance with Article 6 of the Board of Directors Regulation, the Board is responsible for appointing directors in the event of
vacancies, until the general shareholders’ meeting next meets.
The Appointments and Remuneration Committee assesses the capabilities, knowledge and experience required for a place on the Board. In
this regard, the Committee is tasked with defining the duties and suitability of the candidates needed to fill each vacancy, as well as gauging
the specific time and dedication required for them to properly perform such duties.
The Committee issues proposals to the Board concerning the appointment of independent members and those to be appointed by co-optation.
Said proposals, as well as those relating to the re-appointment and removal of directors, are submitted for approval to the general shareholders’
meetings. Moreover, the Committee must inform the Board of the appointment, re-election and removal of directors from their roles on the
Board.
The appointment, ratification and re-appointment proposals issued to the general shareholders’ meeting by the Board must be preceded by the
corresponding report prepared by the Appointments and Remuneration Committee for the appointment of the remaining non-independent
(all figures in EUR millions unless stated otherwise)
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members. Each director’s performance and dedication throughout their tenure will be taken into consideration upon their re-appointment or
ratification.
Board members shall be appointed for a term of four years. They may be re-appointed on one or several occasions for periods of the same
maximum duration. Once the term has expired, the tenure will be terminated upon the next general shareholders’ meeting, or when the legal
term for holding such meeting to approve the accounts for the preceding fiscal year has elapsed.
C.1.17 Explain to what extent the annual evaluation of the Board has given rise to significant changes in its
internal organisation and in the procedures applicable to its activities:
Description of amendment(s)
Describe the evaluation process and the areas evaluated by the Board of Directors with or without the help of an
external advisor, regarding the functioning and composition of the Board and its committees and any other area or
aspect that has been evaluated.
C.1.18 Provide details, for years in which the evaluation was carried out with the help of an external advisor, of
the business relationships that the external advisor or company in its group maintains with the company or any
company in its group.
The Company’s evaluation of the Board of Directors for the year 2020 has been engaged to EY in 2021. EY has provided other services to
certain companies within the AmRest Group related to particular and concrete tax advisory and other services related to compliance. The fees
for those services do not represent a significant percentage of EY annual income.
C.1.19 Indicate the cases in which directors are obliged to resign.
Pursuant to Article 25 of the Articles of Association and Article 11 of the Board of Directors Regulation, the directors shall make their position
available to the Board and execute, where deemed appropriate, the relevant resignation in the following cases: (a) when they cease to hold the
executive positions to which their appointment as director was associated; (b) when they are involved in any of the situations deemed to be
incompatible or prohibited according to law; (c) when they have committed a serious breach of their obligations as director; or (d) when remaining
on the Board may endanger the company’s interests, negatively affect the Board’s credibility or reputation, or when the reasons for which they
were appointed disappear (for example, when proprietary directors transfer or reduce their shareholding in the company).
C.1.20 Are qualified majorities other than those established by law required for any particular kind of decision?
Yes No X
If so, describe the differences.
Description of differences
C.1.21 Explain whether there are any specific requirements, other than those relating to directors, for being
appointed as chairman of the Board of Directors.
Yes No X
Description of the evaluation process and areas evaluated
The Board has evaluated its performance for the year 2020 at a meeting held in February 2021.
The conclusions were contained in a report approved by the Board that focused on pandemic management, leading role of the chairman,
execution team composition, and also, among other aspects, analysed the structure and composition of the Board, its internal efficiency and
performance, and its relationship with the senior management team; the performance of the Board and committees’ duties; and the latest
improvements and recommendations for the next year.
The Company engaged in 2021 EY to evaluate the Board of Directors and its committees’ functioning as recommended by the Unified Code on
Good Governance to have the Board evaluated by an external advisor at least every three years. EY’s conclusions were evaluated by the board
of directors at a meeting held in January 2022. The conclusions of the evaluation were highly satisfactory in the board’s opinion. Nevertheless,
a plan of action was approved to improve certain aspects evaluated in certain areas, such as the role of the Lead Independent Director, Board
and Committee’s agenda, and delegated committees coordination between themselves and with management.
(all figures in EUR millions unless stated otherwise)
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Description o
f requirements
C.1.22 Indicate whether the articles of incorporation or Board regulations establish any limit as to the age of
directors:
Yes No X
Age limit
Chairman
Managing Director/CEO
Director
C.1.23 Indicate whether the articles of incorporation or Board regulations establish any term limits for independent
directors other than those required by law or any other additional requirements that are stricter than those
provided by law:
Yes No X
Additional requirements and/or maximum number of years of office
C.1.24 Indicate whether the articles of incorporation or Board regulations establish specific rules for appointing
other directors as proxy to vote in Board meetings, if so the procedure for doing so and, in particular,
the maximum number of proxies that a director may hold, as well as whether any limit has been established
regarding the categories of director to whom votes may be delegated beyond the limits imposed by law.
If so, briefly describe these rules.
Pursuant to Article 13 of the Board of Directors Regulation, directors should attend the sessions in person. Where this is not possible, they may,
using any written means including email and for that session alone, delegate their representation to another director, with the appropriate
instructions. This representation will be notified to the chairman or secretary of the Board. A single director may hold several representations.
Non-executive directors may only delegate their representation to another non-executive director.
C.1.25 Indicate the number of meetings held by the Board of Directors during the year. Also indicate, if applicable,
the number of times the Board met without the chairman being present. Meetings where the chairman gave specific
proxy instructions are to be counted as attended.
Number of Board meetings
34
Number of Board meetings held without the chairman's presence
0
Indicate the number of meetings held by the coordinating director with the other directors, where there was neither
attendance nor representation of any executive director:
Number of meetings
0
Remarks
Indicate the number of meetings held by each Board committee during the year:
(all figures in EUR millions unless stated otherwise)
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Number of meetings held by the Executive Committee
5
Number of meetings held by the Audit Committee
8
Number of Meetings held by the Nomination and Remuneration Committee
9
Number of meetings held by the Nomination Committee
N/A
Number of meetings held by the Remuneration Committee
N/A
Number of meetings held by the Sustainability, Health and Safety Committee
4
Remarks
C.1.26 Indicate the number of meetings held by the Board of Directors during the year with member attendance
data.
Number of meetings in which at least 80% of directors were present in person
34
Attendance in person as a % of total votes during the year
98%
Number of meetings with attendance in person or proxies given with specific instructions, by all directors
30
Votes cast in person and by proxies with specific instructions, as a % of total votes during the year
98%
C.1.27 Indicate whether the individual and consolidated financial statements submitted to the Board for issue are
certified in advance:
Yes No X
Identify, if applicable, the person(s) who certified the individual and consolidated financial statements of the company for issue
by the Board:
Name
Position
C.1.28 Explain the mechanisms, if any, established by the Board of Directors to ensure that the financial
statements it presents to the General Shareholders’ Meeting are prepared in accordance with accounting
regulations.
C.1.29 Is the secretary of the Board also a director?
Yes No X
If the secretary is not a director, please complete the following table:
Pursuant to Article 19 of the Board of Directors Regulation and Article 5 of the Audit and Risk Committee Regulation, the Audit and Risk
Committee is responsible for the following, among other, duties: (i) to explain the results of the audit and how it contributed to the integrity of
the financial information and the Audit and Risk Committee’s role in this process; and (ii) to oversee the effectiveness of the company’s internal
control system, the internal audit and the risk management system, and discuss with the statutory auditor the significant weaknesses of the
internal control system revealed in the course of the audit, while maintaining its independence. For such purposes, the Committee may, if
appropriate, submit recommendations or motions to the Board of Directors, with the relevant term for follow-up.
Moreover, Article 9 of the Audit and Risk Committee Regulation states that the Committee shall review the content of the audit reports and, as
the case may be, the limited review of the interim accounts, as well as other mandatory reports to be prepared by the auditors prior to the issue
of the former, in order to avoid the issuance of qualified reports, endeavoring to ensure that the Board of Directors submits the accounts to the
general shareholders’ meeting in an audit report without reservations or, in exceptional circumstances when such reservations do exist, for the
Committee chair and the auditors to be able to explain the content and scope of the reservations to shareholders in a clear manner.
(all figures in EUR millions unless stated otherwise)
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Name or company name of the secretary
Representative
Eduardo Rodríguez-Rovira
C.1.30 Indicate the specific mechanisms established by the company to safeguard the independence of the
external auditors, and any mechanisms to safeguard the independence of financial analysts, investment banks
and rating agencies, including how legal provisions have been implemented in practice.
C.1.31 Indicate whether the company changed its external auditor during the year. If so, identify the incoming and
outgoing auditors:
Yes X No
Outgoing auditor
Incoming auditor
KPMG Auditores, S.L.
PricewaterhouseCoopers Auditores, S.L.
If there were any disagreements with the outgoing auditor, explain their content:
Yes No X
Explanation of
disagreements
C.1.32 Indicate whether the audit firm performs any non-audit work for the company and/or its group and, if so,
state the amount of fees it received for such work and express this amount as a percentage of the total fees
invoiced to the company and/or its group for audit work:
Yes X No
Company
Group
Companies
Total
Amount invoiced for non-audit services
(thousand euros)
52.0
46.0
98.0
Amount invoiced for non-audit
services/Amount for
audit work (in %)
35%
7%
12%
C.1.33 Indicate whether the auditors’ report on the financial statements for the preceding year contains a qualified
opinion or reservations. If so, indicate the reasons given to shareholders at the general meeting by the chairman
of the audit committee to explain the content and extent of the qualified opinion or reservations.
Yes No X
Pursuant to the Board of Directors Regulation, the Audit and Risk Committee is responsible for proposing motions regarding the recruitment,
appointment, re-election and replacement of the accounts auditor to the Board of Directors, taking charge of the recruitment process, as well
as the terms and conditions of the agreement, the scope of their professional mandate and the renewal or termination of their mandate. In
accordance with Article 19 of the Board of Directors Regulation, the Audit and Risk Committee shall also liaise with the auditor to receive
information on matters that could represent a threat to its independence; any matter related to the implementation of the audit process; and,
where appropriate, the authorisation of any services, other than those forbidden under the terms of the applicable audit regulations, and other
communications envisaged by these regulations.
In any event, the Audit and Risk Committee must receive the following from the accounts auditor on an annual basis: (i) written confirmation of
its independence regarding the entity or those entities that it has direct or indirect links to; and (ii) information on any additional services rendered
of any kind and the relevant fees received by the auditor or those persons, natural or legal, related to the auditor, from the abovementioned
entities, pursuant to the provisions of the prevailing audit regulations.
Moreover, the Audit and Risk Committee shall issue – annually prior to the issue of the audit report – a report expressing an opinion on whether
the independence of the accounts’ auditor has been jeopardised. Such report must include a reasoned assessment of the provision of each and
every additional service referred to in the foregoing paragraph (other than the legal audit), individually and as a whole, and in relation to the
independence system or the audit regulations.
(all figures in EUR millions unless stated otherwise)
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Explanation of the reasons and direct link to the document made available to the shareholders at the time that the general meeting
was called in relation to this matter
C.1.34 Indicate the number of consecutive years for which the current audit firm has been auditing the company's
individual and/or consolidated financial statements. Also, indicate the number of years audited by the current
audit firm as a percentage of the total number of years in which the financial statements have been audited:
Individual
Consolidated
Number of consecutive years
1
1
Individual
Consolidated
Number of years audited by the current audit firm/number of years in which the
company has been audited (in %)
25%
25%
C.1.35 Indicate whether there is a procedure for directors to be sure of having the information necessary to prepare
the meetings of the governing bodies with sufficient time; provide details if applicable:
Yes X No
Details of the procedure
Article 25 of the Board of Directors Regulation sets forth the directors’ right to counsel and information, insofar as they shall have access to all
of the company’s services and may, with the broadest powers, obtain any information and advice they may need to perform their duties. The
right to information is extended to the subsidiaries, in Spain or overseas, and shall be channelled through the chairman or secretary of the Board
of Directors. Said chairman or secretary will fulfil all requests from directors by supplying the information directly, putting the directors in touch
with the appropriate persons or taking such measures as may be necessary for the requested examination.
Directors shall also be entitled to propose to the Board of Directors, by way of majority, the engagement of any legal, accounting, technical,
financial, commercial or other advisors as they may consider necessary for the company’s interests in a bid to assist them in the performance
of their functions when facing specific, important or complex problems relating to their duties. Likewise, directors have a specific App from which
they can easily access meeting documentation to prepare for meetings.
The secretary of the Board must notify the company’s CEO of the proposal. The Board of Directors may withhold its approval if it considers the
engagement unnecessary for the performance of the commissioned duties, either in view of its cost (disproportionate to the importance of the
problem and the company’s assets and revenues) or if it considers that the technical assistance requested could be adequately given by experts
and officers within the company.
C.1.36 Indicate whether the company has established rules obliging directors to inform the Board of any
circumstances, whether or not related to their actions in the company itself, that might harm the company’s
standing and reputation, tendering their resignation where appropriate. If so, provide details:
Yes X No
Explain the rules
As set forth in the Articles of Association and the Board Regulations, the cases in which directors must tender their resignation to the Board
and, as the case may be, tender the corresponding resignation, include cases in which their continued presence on the Board may jeopardise
the interests of the Company or negatively affect the credit and reputation of the Company or when the reasons for which they were appointed
disappear (e.g. when a proprietary director disposes of or reduces his or her shareholding in the Company).
C.1.37 Indicate whether, apart from such special circumstances as may have arisen and been duly minuted, the
Board of Directors has been notified or has otherwise become aware of any situation affecting a director, whether
or not related to his or her actions in the company itself, that might harm the company’s standing and reputation:
Yes No X
Remarks
This calculation has been made using data since the company’s registered office had been relocated to Spain.
(all figures in EUR millions unless stated otherwise)
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Director's name
Nature of the situation
Remarks
Indicate whether the Board of Directors has examined the case. If so, explain with reasons whether, given the
specific circumstances, it has adopted any measure, such as opening an internal enquiry, requesting the director's
resignation or proposing his or her dismissal.
Indicate also whether the Board decision was backed up by a report from the nomination committee.
Yes No
Decision/Action taken
Reasoned explanation
C.1.38
Detail any material agreements entered into by the company that come into force, are modified or are
terminated in the event of a change in control of the company following a public takeover bid, and their effects.
The Change of Control Clause is included in the agreements concerning the issue of Schuldscheindarlehen („SSD”) and in the bank credit
agreements, both agreements signed in 2017.
C.1.39
Identify individually as regards directors, and in aggregate form in other cases, and provide details of
any agreements between the company and its directors, executives or employees containing indemnity or
golden parachute clauses in the event of resignation or dismissal without due cause or termination of
employment as a result of a takeover bid or any other type of transaction.
Number of beneficiaries
0
Type of beneficiary
Description of agreement
Executives (other than Directors) and employees
Few selected officers and employees of the Company have in their
contracts, specific severance clauses, which provides for higher
severance payments than envisaged in applicable general labour law,
in case of termination. The amount of the severance is determined on
a case-by-case basis taking into account seniority, function and
possible impact on the Company’s business in case of withdrawal
from office of such officer. In any case the severance payments do
not exceed a maximum of two times annual salary.
Indicate whether, beyond the cases established by legislation, these agreements have to be communicated and/or
authorised by the governing bodies of the company or its group. If so, specify the procedures, the cases concerned
and the nature of the bodies responsible for their approval or communication:
Board of Directors
General Shareholders’ Meeting
Body authorising the clauses
X
YES
NO
Are these clauses notified to the General Shareholders’ Meeting?
X
C.2 COMMITTEES OF THE BOARD OF DIRECTORS
C.2.1 Provide details of all committees of the Board of Directors, their members, and the proportion of
executive, proprietary, independent and other external directors forming them:
(all figures in EUR millions unless stated otherwise)
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EXECUTIVE COMMITTEE
Name
Position
Current category
José Parés Gutiérrez
Chairman
Executive
Luis Miguel Álvarez Pérez
Member
Propietary
Pablo Castilla Reparaz
Member
Independent
% of executive directors
33.33%
% of proprietary directors
33.33%
% of independent directors
33.33%
% of external directors
0.00%
Remarks
Explain the functions delegated or assigned to this committee, other than those that have already been described in Section
C.1.9, and describe the rules and procedures for its organisation and functioning. For each of these functions, briefly
describe its most important actions during the year and how it has exercised in practice each of the functions assigned to
it by law, in the articles of incorporation or in other corporate resolutions.
AUDIT AND RISK COMMITTEE
Name
Position
Current category
Emilio Fullaondo Botella
Chairman
Independent
Pablo Castilla Reparaz
Member
Independent
Mónica Cueva Díaz
Member
Independent
% of proprietary directors
0.00%
% of independent directors
100%
% of external directors
0.00%
Explain the functions assigned to this committee, including where applicable those that are additional to those prescribed
by law, and describe the rules and procedures for its organisation and functioning. For each of these functions, briefly
describe its most important actions during the year and how it has exercised in practice each of the functions assigned to
it by law, in the articles of incorporation or in other corporate resolutions.
The rules regarding the Executive Committee are found under Article 18 of the Board of Directors Regulation. The Executive Committee shall
consist of a minimum of three and a maximum of five directors, in similar proportions to their weight on the Board of Directors. At least two-
thirds of the Board members currently in office must vote in favour to appoint members of the Executive Committee. The chairman and secretary
of the Board of Directors shall be the chairman and secretary, respectively, of the Executive Committee, and may also be assisted by the deputy
secretary.
The members will step down from the Executive Committee when they relinquish the role of director or whenever agreed by the Board. The
Board of Directors shall promptly fill any vacancies.
The Board of Directors will permanently delegate all of its powers to the Executive Committee, aside from those which may not be delegated
according to law, the Articles of Association or the Board of Directors Regulation.
The Executive Committee shall meet as and when called by the chairman or requested by the majority of its members. The secretary shall
record the resolutions adopted in the meeting minutes, a copy of which shall be made available to the Board members. The Executive Committee
shall inform the Board of Directors about the important matters and decisions adopted at its sessions.
(all figures in EUR millions unless stated otherwise)
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Identify the directors who are members of the audit committee and have been appointed taking into account their knowledge
and experience in accounting or audit matters, or both, and state the date on which the Chairperson of this committee was
appointed.
Name of directors with experience
Emilio Fullaondo Botella / Pablo Castilla Reparaz / Mónica Cueva Díaz
Date of appointment of the chairperson
14 May 2019
APPOINTMENTS AND REMUNERATION COMMITTEE
The rules regarding the AmRest Audit and Risk Committee are found under Article 19 of the Board of Directors Regulation and the Committee’s
own Regulation. The Audit and Risk Committee will be made up of a minimum of three and a maximum of five directors and shall be chaired by
whoever among them is appointed by the Board of Directors, as long as they are an independent director. All of the Audit and Risk Committee
members will be appointed by the Board of Directors and shall be non-executive directors, the majority of whom, at least, must be independent
directors. At least one of them must be appointed based on their knowledge and experience in accounting, auditing or both. The Audit and Risk
Committee members, as a group, must have the relevant know-how regarding the industry that the entity subject to the audit belongs to.
The chairman of the Audit and Risk Committee will exercise their office for four years and may not be re-appointed until at least one year after
stepping down.
Basic responsibilities: (i) To report, through its chairman, to the General Shareholders’ Meeting on questions raised by the shareholders
regarding matters within its remit, and explain the audit results and how it contributed to the integrity of the financial information and the Audit
and Risk Committee’s role in this process; (ii) To oversee the effectiveness of the company’s internal control system, the internal audit, and the
risk management system and discuss with the accounts auditor the significant weaknesses of the internal control system revealed in the course
of the audit, while maintaining its independence. For such purposes, the Committee may, if appropriate, submit recommendations or motions
to the Board of Directors, with the relevant term for follow-up; (iii) To oversee the process for preparing and disclosing mandatory financial
information regarding the company and submit recommendations or motions to the Board of Directors for the purposes of safeguarding the
integrity of such financial information; (iv) To propose motions regarding the recruitment, appointment, re-election and replacement of the
accounts auditor to the Board of Directors, taking charge of the recruitment process, as well as the terms and conditions of the agreement, the
scope of their professional mandate, the renewal or termination of their mandate and where appropriate, regularly gather information about the
audit plan and its implementation, while preserving its independence in the performance of its duties; (v) To liaise with the auditor to receive
information on matters that could represent a threat to its independence; any matter related to the implementation of the audit process; and,
where appropriate, the authorisation of any services, other than those forbidden under the terms of the applicable audit regulations, and other
communications envisaged by these regulations; (vi) To issue – annually prior to the issue of the audit report – a report expressing an opinion
on whether the independence of the accounts auditor has been jeopardised. Such report must include a reasoned assessment of the provision
of each and every additional service referred to in the foregoing paragraph (other than the legal audit), individually and as a whole, and in
relation to the independence system or the audit regulations; (vii) To advise the company’s Board of Directors, in advance, of all of the topics
covered by law, the Articles of Association and this Regulation, and namely, of: (a) The financial information that the company must disclose on
a regular basis; (ii) The creation or acquisition of interests in special purpose vehicles or entities resident in countries or territories considered
to be tax havens; and (iii) Any transactions with related parties.
The Audit and Risk Committee’s annual report for 2021 – which will be available to shareholders on the AmRest website – details the key
activities performed by the Committee during such period, including the following: (i) review of the company's individual and consolidated
annual accounts and non-financial information report for the 2021 fiscal year and other financial information prior to them being put together
by the Board of Directors; (ii) with regard to external auditing, the Committee monitored the actions and services provided by PWC (and
KPMG for the audit of 2020 fiscal year); (iii) with regard to internal auditing, the Audit and Risk Committee promoted a project to review and
update the Company's risk map, in addition to perform the duties relating to the internal auditing of the Company as assigned thereto under
the Board of Directors Regulation and Audit and Risk Committee Regulation; (iv) has continued to work on improving consolidation and
reporting systems for better control of information and more efficient preparation to enhance the performance of operations; (v) in regard to
the related party transactions, has followed up those transactions and, as the case may be, informed the board of directors in relation to them,
and (vi) analysed and took note of the company's treasury stock balance and the transactions executed using its own shares on a quarterly
basis.
Name
Position
Current category
Pablo Castilla Reparaz
Chairman
Independent
Luis Miguel Álvarez Pérez
Member
Propietary
Romana Sadurska
Member
Independent
Emilio Fullaondo Botella
Member
Independent
% of proprietary directors
25.00%
% of independent directors
75.00%
% of external directors
0.00%
(all figures in EUR millions unless stated otherwise)
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Explain the functions assigned to this committee, including where applicable those that are additional to those prescribed
by law, and describe the rules and procedures for its organisation and functioning. For each of these functions, briefly
describe its most important actions during the year and how it has exercised in practice each of the functions assigned to
it by law, in the articles of incorporation or in other corporate resolutions.
SUSTAINABILITY, HEALTH AND SAFETY COMMITTEE
Name
Post
Category
Romana Sadurska
Chairman
Independent
Mónica Cueva Díaz
Member
Independent
Pablo Castilla Reparaz
Member
Independent
% of proprietary directors
0.00%
% of independent directors
100.00%
% of external directors
0.00%
Explain the functions assigned to this committee and describe the rules and procedures for its organisation and functioning.
For each of these functions, briefly describe its most important actions during the year and how it has exercised in practice
each of the functions assigned to it by law, in the articles of incorporation or in other corporate resolutions.
The rules regarding the Appointments and Remuneration Committee (ARC) are found under Article 20 of the Board of Directors Regulation.
The ARC shall be made up of no less than three and no more than five non-executive directors, at least two of which must be independent
directors.
Under Article 20.2 of the Board of Directors Regulation, the Board of Directors shall endeavour to ensure that the members, and in particular
the chairman, of the ARC have the appropriate knowledge, qualifications and expertise to perform the duties entrusted to them. The ARC shall
appoint the chairman from among its members.
Basic responsibilities: (i) To assess the qualifications, knowledge and experience required for the Board of Directors. For such purposes, to
define the functions and qualifications required from candidates who must fill each vacancy and evaluate the exact amount of time and dedication
required for them to effectively perform their duties; (ii) Submit proposals on independent directors to be appointed by co-optation to the Board
of Directors to be subject to decision at the General Shareholders’ Meeting, as well as the proposals for the re-appointment or removal of said
directors; (iii) To issue a report regarding proposals to appoint the remaining directors for their appointment by co-optation or to be submitted to
the General Shareholders’ Meeting, as well as the proposals for their re-appointment or removal; (iv) To inform the Board of Directors about the
appointment, re-election and removal of internal positions on the company’s Board of Directors; (v) To issue a report regarding the motions to
appoint and remove senior executives (including, for these purposes, the brand and area managers) and the basic terms of their contracts; (vi)
To inform the Board about gender diversity matters and, particularly, to ensure that the selection procedures for directors and senior executives
do not implicitly bias female candidates; (vii) To propose to the Board of Directors: (a) the remunerations policy for the directors and general
managers or for those who have senior management functions and report directly to the Board of Directors, committees or the CEOs; (b) the
individual remuneration for executive directors and other conditions of their contracts, ensuring that they are followed; and (c) the basic
conditions of senior executive contracts; (viii) To analyse, pose and periodically review the remuneration policy applied to senior executives and
the management team, including the remuneration packages with shares and their application, and ensure that it is proportionate to that paid
to the other directors and members of the management team and to other personnel of the company; (ix) To ensure compliance with the
remuneration policy established by the company; (x) To review and arrange for the succession of the chairman of the Board of Directors and
the company’s CEO and, where appropriate, to propose motions to the Board of Directors for such succession to take place in an orderly and
well-planned manner; (xi) To inform the shareholders about the exercise of its functions, attending the General Shareholders’ Meeting for this
purpose; and (xii) To assist the Board in the preparation of the report on the remuneration policy and submit to the Board any other remuneration
reports foreseen in this Regulation, verifying the information about the directors and senior executives’ remuneration established in different
corporate documents, including the annual report on directors’ remuneration.
The ARC shall meet each time the chairman deems it necessary. The chairman will call a meeting whenever a report is issued or proposals
need to be adopted and, in any case, whenever it is suitable for the successful performance of its functions.
The Sustainability, Health and Safety Committee must be made up of a minimum of three and a maximum of five directors, all of them non-
executive and, at least two of them, must be independent directors. The Chairman must be an independent director. The Sustainability, Health
and Safety Committee shall be validly formed when the majority of its members attended, being present or represented by proxy. The
agreements shall be adopted by a majority of concurrent members, present or represented by proxy.
The competencies of the Sustainability, Health and Safety Committee are: (i) to review, to supervise and to suggest to the Board of Directors
the framework and policies of the Sustainability, Health and Safety Risk Management of the Company; (ii) to evaluate and to advise the Board
of Directors on the various strategies to achieve the Sustainability, Health and Safety goals of the Company; (iii) to review and to suggest to the
Board of Directors, the Sustainability, Health and Safety performance goals and to evaluate the performance in relation to those goals; (iv) to
monitor the compliance by the Company with both, the Sustainability, Health and Safety policies and the applicable sustainability, health and
safety laws; (v) to ensure that the systems used to identify and to manage the Sustainability, Health and Safety risks of the Company are
adequate for the intended purposes and are applied effectively, periodically reviewed and continually improved; (vi) the Committee should
(all figures in EUR millions unless stated otherwise)
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C.2.2 Complete the following table with information regarding the number of female directors who were members
of Board committees at the close of the past four years:
Number of female directors
Year n
Number %
Year n-1
Number %
Year n-2
Number %
Year n-3
Number %
Executive committee
0.00%
0.00%
0.00%
0.00%
Audit committee
33.33%
33.33%
0.00%
0.00%
Nomination and remuneration
committee
25.00%
25.00%
25.00%
0.00%
Nomination committee
N/A
N/A
N/A
N/A
Remuneration committee
N/A
N/A
N/A
N/A
Sustainability, Health and Safety
committee
66.67%
66.67%
0.00%
N/A
C.2.3 Indicate, where applicable, the existence of any regulations governing Board committees, where these
regulations are to be found, and any amendments made to them during the year. Also indicate whether any annual
reports on the activities of each committee have been voluntarily prepared.
The rules regarding the committees are set out in the Articles of Association and the Board of Directors Regulation, both of which are available
on the company’s website at www.amrest.eu. Moreover, the Audit and Risk Committee has its own internal regulation, which is also available
on the company’s website. Those regulations have not been changed during the year. Performance reports on each of the Audit. Appoinments
and Remuneration and Sustainability, Health and Safety committee committees have been prepared by the respective committee, which shall
also be available to shareholders on the website.
D. RELATED-PARTY AND INTRAGROUP TRANSACTIONS
D.1 Explain, where appropriate, the procedure and competent bodies relating to the approval of transactions
with related and intragroup parties, indicating the criteria and general internal rules of the entity that regulate
the abstention obligations of the affected director or shareholders. Detail the internal information and
periodic control procedures established by the company in relation to those related-party transactions
whose approval has been delegated by the board of directors.
ensure that the Board of Directors is kept informed and updated on issues related to Sustainability, Health and Safety risks; (vii) to ensure that
the Company is effectively structured to manage and to prevent risks related to Sustainability, Health and Safety, which includes having trained
employees, adequate communication proceedings and enough documentation; (viii) to examine and to advise the Board of Directors on the
suitability of the resources available for the Sustainability, Health and Safety management systems and programmes of the Company; and (ix)
to monitor and to supervise all incidents or matters related to sustainability, health and safety, as well as the measures taken by the Board of
Directors to avoid their repetitions.
The Sustainability, Health and Safety Committee’s annual report for 2021 – which will be available to shareholders on the AmRest website –
details the key activities performed by the Committee during such period including the following: (i) operation of the food safety policy, (ii) review
of the KPIs audits carried out in suppliers and logistic, (iii) implementation of new policies and advances in relation to nutrition, (iv) analysis of
waste management and environmental strategies within the market, (v) review of the Health and Safety and Working Conditions policy, (vii)
approval of the amendment of the Committee’s name too Sustainability, Health and Safety Committee, in order to include the sustainability
area.
The procedure and competent bodies relating to the approval of transactions with related and intragroup parties are as established by the
recently amended article 231 bis and 529 vicies et seq of the Spanish Capital Companies Act. The Board of the Company has not delegated
the approval of intragroup and related party transactions as per article 529 duovicies of the Capital Companies Act so no specific procedure of
periodic control has been established in this regard.
In addition to the above, pursuant to Article 19 of the Board of Directors Regulation and Article 5 of the Audit and Risk Committee Regulation,
the Audit and Risk Committee is responsible for advising the Board of transactions with related parties. For the approval of such transactions,
any directors or related individuals with a direct or indirect conflict of interest must refrain from participating in the discussion and vote on the
corresponding resolutions or decisions. Any resolutions or decisions which affect these individuals in their role as director, such as their
appointment or removal from the Board and similar concepts, are excluded from the aforementioned obligation.
(all figures in EUR millions unless stated otherwise)
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D.2 Give individual details of operations that are significant due to their amount or of importance due to their
subject matter carried out between the company or its subsidiaries and shareholders holding 10% or more
of the voting rights or who are represented on the board of directors of the company, indicating which has
been the competent body for its approval and if any affected shareholder or director has abstained. In the
event that the board of directors has responsibility, indicate if the proposed resolution has been approved
by the board without a vote against the majority of the independents:
Name or
company
name of the
shareholder
or any of its
subsidiaries
% Share-
holding
Name or
company
name of the
company or
entity within
its group
Nature of
the
relationship
Type of
operation and
other
information
required for its
evaluation
Amount
(thousand of
euros)
Approving
body
Identity of the
significant
shareholder or
director who
has abstained
The proposal to the
board, if applicable,
has been approved by
the board without a
vote against the
majority of
independents
D.3 Give individual details of the operations that are significant due to their amount or relevant due to their
subject matter carried out by the company or its subsidiaries with the administrators or managers of the
company, including those operations carried out with entities that the administrator or manager controls or
controls jointly, indicating the competent body for its approval and if any affected shareholder or director
has abstained. In the event that the board of directors has responsibility, indicate if the proposed resolution
has been approved by the board without a vote against the majority of the independents:
Name or company
name of the
administrators or
managers or their
controlled or jointly
controlled entities
Name or
company name
of the company
or entity within
its group
Relationship
Nature of the
operation and
other
information
necessary for
its evaluation
Amount
(thousand of
euros)
Approving
body
Identity of the
shareholder
or director
who has
abstained
The proposal to the
board, if applicable, has
been approved by the
board without a vote
against the majority of
independents
D.4 Report individually on intra-group transactions that are significant due to their amount or relevant due
to their subject matter that have been undertaken by the company with its parent company or with other
entities belonging to the parent's group, including subsidiaries of the listed company, except where no other
related party of the listed company has interests in these subsidiaries or that they are fully owned, directly
or indirectly, by the listed company.
In any case, report any intragroup transaction conducted with entities established in countries or territories
considered as tax havens:
Company name of the entity within the
group
Brief description of the operation and other information
necessary for its evaluation
Amount
(thousand of euros)
Remarks
D.5 Give individual details of the operations that are significant due to their amount or relevant due to their
subject matter carried out by the company or its subsidiaries with other related parties pursuant to the
international accounting standards adopted by the EU, which have not been reported in previous sections.
Company name of the related party
Brief description of the operation and other
information necessary for its evaluation
Amount
(thousand of euros)
Lastly, according to Article 3 of the Internal Code of Conduct, the Company shall keep an updated list of the related parties to People Developing
Managerial Responsibilities.
(all figures in EUR millions unless stated otherwise)
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D.6 Give details of the mechanisms in place to detect, determine and resolve potential conflicts of interest
between the company and/or its group and its directors, senior management, significant shareholders or
other associated parties.
D.7 Indicate whether the company is controlled by another entity in the meaning of Article 42 of the
Commercial Code, whether listed or not, and whether it has, directly or through any of its subsidiaries,
business relationships with said entity or any of its subsidiaries (other than the listed company) or carries
out activities related to those of any of them
Yes X No
The Company is controlled by the Finaccess Group.
Indicate whether the respective areas of activity and any business relationships between the listed company or its
subsidiaries and the parent company or its subsidiaries have been defined publicly and precisely:
Yes No X
Report covering the respective areas of activity and any business relationships between the listed company or its
subsidiaries and the parent company or its subsidiaries, and identify where these aspects have been publicly reported
Not reported as there are no business relationships between the parent company or its group and the Company or any of its subsidiaries and
no activities related to those of any of them.
Identify the mechanisms in place to resolve potential conflicts of interest between the parent of the listed company
and the other group companies:
Mechanisms for resolving possible conflicts of interest
No specific mechanisms have been established other than those already existing in the applicable regulations in relation to resolving poss ble
conflicts of interest between the parent of the listed company and the other group companies.
The director shall take the necessary measures to avoid incurring situations in which his or her own or other interests may conflict with the
corporate interest and their duties towards the company.
Article 24 of the Board of Directors Regulation stipulates that directors must inform the Board of any direct or indirect conflicts which they or
related individuals may have with the company’s interests. In this regard, directors’ related parties shall be understood as the following: a) The
director’s spouse or persons with a similar relationship; b) The director or their spouse’s parents, children and s blings; c) The spouses of the
director’s parents, children and siblings; d) Companies with which the director, directly or by proxy, is affiliated in any of the manners described
under article 42, paragraph one of the Spanish Commercial Code. When directors are legal entities, their related parties shall be understood as
the following persons: a) Partners or shareholders who are affiliated with such entity in any of the manners described in article 42, paragraph
one of the Commercial Code; b) De jure or de facto directors, liquidators and attorneys with general powers of attorney in the company’s legal
entity director; c) Companies forming part of the same group and their partners or shareholders; d) Persons who, pursuant to the provisions of
the preceding paragraph, qualify as affiliates in respect of the above legal entity’s representative.
As set forth in said Regulation with regard to the duty of loyalty, directors are obliged to refrain from participating in the discussion and vote on
resolutions or decisions with which they or a related individual have a direct or indirect conflict of interest. Any resolutions or decisions which
affect these individuals in their role as director, such as their appointment or removal from the Board and similar concepts, are excluded from
the aforementioned obligation.
Article 24 of the Board of Directors Regulation obliges the directors to refrain from: (a) Carrying out transactions with the company, except when
they are part of the company’s ordinary business, are carried out under normal market conditions and are of little significance, with these being
understood to be those involving information that is not required to express a true image of the company’s property, financial situation and
results; (b) Using the company’s name or adducing their standing as director to have undue influence when carrying out private transactions;
(c) Making use of the corporate assets, including the company’s confidential information, for private means; (d) Taking advantage of the
company’s business opportunities; (e) Obtaining advantages or remuneration from third parties other than the company or its group, associated
to the discharge of their duties, other than minor matters of mere courtesy; (f) Carrying out activities on their own, or another’s, behalf which
entail effective competition, whether currently or potentially, or which, in any other way, places them in permanent conflict with the company’s
interests.
Additionally, the Company set the Procedure for Conflicts of Interest and Related-Party Transactions with Senior Officers (the “Procedure”) of
AmRest Holdings, SE, establishing the rules that must be followed in those situations in which there is a direct or indirect conflict of interest
between the interest of the Company or any of the companies belonging to the group of which the Company is the controlling entity, within the
meaning established by law and the interest of said persons or of other persons that the Audit and Risk Committee decides to make subject to
the conflict of interest rules or the persons related thereto, as well as in transactions that said persons engage in with the companies of the
Group. The Code of Ethics and Business Conduct also governs this matter under section 2 - Honesty, Integrity and Transparency.
Global Internal Audit and Internal Control Departments review during their assignments any risks related to potential or existing conflicts of
interest. In case of identifying such risks, these departments provide recommendations, request for action plans and later monitor & verify their
implementation. The audit reports, including risks, recommendations, action plans and status of action plans monitoring & verification, are
communicated to the Audit and Risk Committee and the Top Management.
(all figures in EUR millions unless stated otherwise)
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E. RISK MANGEMENT AND CONTROL SYSTEMS
E.1 Explain the scope of the company's financial and non-financial risk management and control system,
including tax risk.
To effectively govern and manage AmRest enterprise approach to the risk management, the Group has implemented a 3-line of defense model
within the organization.
Each of the 3 lines play a distinct role within the framework, and the responsibilities allocated, from the first line assigned to the risk owners and
risk delegates, the second line is supported by Risk and Compliance Department, and 3rd line held by the Global Internal audit and Internal
Controls Department.
Global Internal Audit and Internal Control Departments support AmRest Management by realizing ad-hoc and planned audit assignments,
according to the Annual Audits Plan.
The Management is responsible for preparing action plans addressing identified by the Global Internal Audit and Internal Control Departments
risks and opportunities. The Global Internal Audit and Internal Control Departments regularly monitor, verify and report to the Audit and Risk
Committee and the Top Management, the status of the action plans implementation declared by the Management.
The Global Risk and Compliance Department was established in the beginning of 2021 with the department head reporting directly to the Audit
and Risk Committee Chairman (Board of Directors level). Their key responsibilities include:
■
Promoting and guiding the organization in the creation of a consistent risk management culture, through an adequate communication,
training and building awareness of all AmRest employees
■
Periodically updating the risk catalogue and the risk map
■
Overseeing the adequate functioning of the ERM System, specifically regarding the identification, assessment, response and reporting to
the Audit and Risk Committee over the critical risks to which the Group is exposed, including emerging risks.
■
Fostering the implementation of efficient and complete risk response strategies to mitigate or reduce critical risks to which the Group is
exposed within the risk appetite and tolerance levels approved by the Group.
■
Reporting to the Audit and Risk Committee regarding the performance and functioning of the ERM.
AmRest risk management process begins with the organization’s long-term and short-term objective setting, which leads to the identification of
risks defined as any event which might pose a threat to the fulfilment of such objectives. Risks are assessed on a periodical basis at inherent
and residual level, based on their expected impact, likelihood and the organization’s vulnerability, and prioritized in the risk map.
For all the risks identified as critical risks based on such assessment, the management defines risk response strategies to mitigate the inherent
risk to a reasonable risk appetite level. The response strategies combine the monitoring of risk performance indicators and the execution of
control activities, which are assessed for operating effectiveness purposes on a periodical basis.
AmRest identify financial and non-financial risks and manage them both at the Group level and at the level of individual companies.
The Group has set up as well a Global AmRest Tax Policy that establishes the rules and procedures on this matter and are supervised by the
Tax Department and, ultimately, by the Audit and Risk Committee.
E.2 Identify the bodies within the company responsible for preparing and executing the financial and non-
financial risk management and control system, including tax risk.
The risk management system, the internal control system and review of effectiveness of such systems were supervised by risk owners, Chief
Risk & Compliance Officer, Risk & Compliance Committee, Senior Management, Audit and Risk Committee and ultimately by the Board of
Directors of AmRest Holdings SE.
AmRest’s risk management process begins with the organization’s long-term and short-term objective setting, which leads to the identification
of risks defined as any event which might pose a threat to the fulfilment of such objectives. Risks are assessed on a periodical basis at inherent
and residual level, based on their expected impact, likelihood and the organization’s vulnerability, and prioritized in the risk map.
Audit and Risk Committee is responsible to oversee the effectiveness of the Group’s risk management system.
Senior Management is respons ble for the sponsorship of the ERM, with the aim to foster and promote a common and consistent risk culture
throughout the organization.
Global Risk & Compliance Function is respons ble for the global coordination of the risk identification, assessment, and response processes;
and provides recommendations supporting risk reduction.
Employees and Co-workers is responsible to comply with risk management policies and procedures.
The finance team, led by the Chief Financial Officer, is responsible for the Group’s tax policy and for the implementation of its tax strategy. Tax
strategy is reviewed on an ongoing basis as part of the regular financial planning cycle. The Audit and Risk Committee is responsible for
monitoring all significant tax matters. Audit and Risk Committee meetings are usually attended by a number of Group officers and employees
including representatives from the tax, internal audit, compliance and risk and financial reporting areas, including the Chief Financial Officer.
E.3 Indicate the main financial and non-financial risks, including tax risks, as well as those deriving from
corruption (with the scope of these risks as set out in Royal Decree Law 18/2017), to the extent that these are
significant and may affect the achievement of business objectives.
(all figures in EUR millions unless stated otherwise)
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The AmRest group is subject to various risks in the different markets in which it does business.
1. Liquidity risk
Liquidity risk is defined as the risk of incurring losses resulting from the inability to meet payment obligations in a timely manner when they
become due or from being unable to do so at a sustainable cost. The Group is exposed to the risk to a lack of financing at the moment of the
maturity of bank loans and bonds.
As of 31 December 2021, the Group has sufficient liquidity to fulfil its liabilities over the next 12 months.
The Group analyses liquidity needs with particular focus on the maturity of debt and proactively investigates various forms of financing that
could be utilised as needed.
2. Risks related to the COVID-19 and its implications for the economy and society
The COVID-19 pandemic has rapidly spread around the world. Most governments are taking constrain measures to contain the spread, which
includes isolation, confinement, quarantine and restrictions to the free movement of people and the closure of public and private facilities.
This situation is significantly affecting the global economy, including HORECA sector, and the AmRest Group is not immune to this.
Visible results of the COVID-19 outbreak include the decrease in demand, the disruption or slowdown of supply chains and a significant
increase in economic uncertainty, the increase of volatility in the price of assets, exchange rates and a decrease in long term interest rates.
Possible results of the COVID-19 outbreak may include changes in the market environment, people´s behaviours and ways of living.
The COVID-19 pandemic has a particularly negative impact on the restaurants sectors. The ban or significant limitations in operation of
restaurants resulted in a decrease in business activity and customer demand and consequently decrease in revenues.
Group management is closely monitoring the development of the situation and looks for the ways of mitigating the impact of COVID-19 spread
on the Group. In addition, the Group implemented additional measures to mitigate the risk of infection among its employees, including in
particular:
■
Providing detailed instructions and guidelines on monitoring the health of the Group’s employees and the health of Group’s
customers.
■
Strengthening already stringent hygiene, cleaning and sanitation procedures and introducing contactless options that protect both
employees and guests in restaurants.
■
Providing the restaurant employees with additional personal protection and hygiene supplies.
■
Requesting to reduce the number of meetings as well as domestic and foreign business travel, and to use teleconferencing and
video-conferencing facilities to the largest extent possible, as well enabling remote work.
3. Lease agreements and continuation options
Almost all AmRest restaurants operate in leased facilities. The majority of the leases are long-term and they are usually concluded for at least
10 years from the date of commencing the lease (assuming that all continuation options are exercised, on specified terms, and not including
contracts which are subject to periodic renewal, unless they are terminated, and contracts concluded for an indefinite period). A number of
lease grant AmRest the right to prolong the contract provided that the Company complies with the terms of rental. Regardless of whether the
terms are complied with or not, there is no guarantee that AmRest will be able to prolong a lease on terms deemed satisfactory for the Group.
If this is not possible a potential loss of important restaurant locations may have an unfavorable effect on AmRest’s operating results and its
business activities.
As a consequence of the pandemic and lack of business activity or relatively lower activity in certain locations, the Group performed reviewed
of its rental agreements and has entered into negotiations with landlords. One of the outcomes may be that some locations would need to be
closed due to worsened economics and the lack of a mutual agreement between the parties. Terminating the relevant rental contract on cost
effective terms may prove impossible. This situation may also have an adverse effect on the business activities and operating results of the
Group. Additionally, closing any of the franchised restaurants is subject to the approval by the franchisor and it is not certain that such approval
will be obtained.
In the case of Russian and Chinese restaurants acquired by AmRest between July 2007 and December 2012 respectively, the average term
of the rental contracts is relatively shorter compared to AmRest restaurants in other countries. This results from the specific nature of these
markets.
4. Dependency on the franchisor
AmRest manages KFC, Pizza Hut, Burger King and Starbucks (in Romania, Bulgaria, Germany and Slovakia) as a franchisee, and therefore
a number of factors and decisions related to the business activities conducted by AmRest and the poss bility of renewing or extending the
duration of the franchise agreements, depend on the limitations or specifications imposed by the franchisors or on their consent.
Therefore, in relation to the duration of those agreements, the renewal is not automatic and AmRest cannot guarantee that after the expiry of
the initial periods of duration of the franchise agreements, which are typically ten years, a given franchise agreement will be extended. In the
case of KFC and Pizza Hut, AmRest and Yum are in continuous dialogue with respect to current and further cooperation.
In the case of Burger King, despite the termination by Burger King Europe GMBH of the development agreement, the franchise agreements
for the operation by AmRest of the Burger King restaurants in Europe remain in force in accordance with their established terms and conditions.
In relation to Starbucks, the license agreements entered into by and between AmRest’s affiliates and Starbucks EMEA Limited for Poland,
Hungary and Czech Republic are set to expire on May 31, 2022 and are subject to a five year extension. Consistent with AmRest’s long-term
commitment to its brand portfolio, AmRest and Starbucks EMEA Limited are currently negotiating the terms of such extension.
5. Dependency on cooperation with minority shareholders and Starbuck’s call option
AmRest operates Starbucks restaurants in Poland, the Czech Republic and Hungary based on partnership agreements with Starbucks Coffee
International, Inc. The partnerships assume Starbucks Coffee International, Inc. is the minority shareholder of companies operating Starbucks
stores in mentioned countries. Therefore, some decisions as part of the joint business activities are dependent on Starbucks’ consent.
(all figures in EUR millions unless stated otherwise)
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If AmRest fails to comply with the obligation to open and run the minimum specified number of cafés, Starbucks Coffee International, Inc. has
the right to increase its share in these companies by acquiring shares from AmRest Sp. z o.o. at a price agreed between the parties based on
the valuation of the companies.
6. No exclusivity rights
International Franchise Agreements per se do not typically grant exclusivity rights to the franchisee in the relevant territories. In order to secure
exclusivity rights for a certain territory, franchisees aim to have either a master franchise agreement or a development agreement with the
franchisor. Currently, AmRest does not have master franchise agreements or development agreements in all territories and cannot secure that
it will have exclusivity on certain territories.
7. Risks related to the consumption of food products
Changes in consumer preferences arising from concerns over the nutritious properties of chicken, which is the main ingredient in the KFC
menu, or as a result of unfavorable information being circulated by the mass media concerning the quality of the products, could pose a threat
to the Group. Furthermore, diseases caused by these (ie food poisoning) and damages to health as a result of eating in AmRest restaurants
and restaurants of other franchisees of KFC, Pizza Hut, Burger King, Starbucks, La Tagliatella, Blue Frog, Bacoa and Sushi Shop, and as a
result of revealing unfavorable data prepared by the government or a given market sector concerning the products served in AmRest
restaurants and restaurants of other franchisees of KFC, Pizza Hut, Burger King, Starbucks, La Tagliatella, Blue Frog, Bacoa and Sushi Shop,
health-related issues and issues related to the functioning patterns of one or more restaurants run both by AmRest and the competition could
also pose a threat to the Group. The above-mentioned risks are mitigated by using the highest quality ingredients in AmRest restaurants, which
come from reliable and reputable suppliers, in compliance with strict quality control and hygiene standards and the use of top, modern
equipment and processes which ensure the absolute safety of the dishes.
8. Risks related to key personnel turnover in the Group and increasing labour costs
AmRest´s success depends, to some extent, on the individual effort of selected employees and key members of management. The methods
of remunerating and managing human resources developed by the Group help ensure a low rotation of the key personnel. Additionally, the
career planning system supports preparing successors ready to execute tasks in key positions. In the event of turnover, a personnel
replacement process will be triggered, minimising to the fullest extent possible the adverse effect on business activities and the operating
results of the Group.
Excessive turnover of employees and too frequent changes in managerial positions may pose a significant risk to the stability and quality of
the business activities. Due to the fact that salaries in the HORECA sector are still relatively lower than in other branches, there is a risk of the
outflow of qualified staff. In this regard, the Company is constantly evaluating the competitiveness of the remunerations offered to minimize the
risk and to remain market competitive. An additional risk in the employment area may be caused by fluctuations in the unemployment rate in
a given market.
9. Risks related to limited access to foodstuffs and the variability of their cost
AmRest´s situation is also affected by the need to ensure frequent deliveries of fresh agricultural products and foodstuffs and anticipating and
responding to changes in supplies costs. The Group cannot rule out the risk related to delivery shortage or interruptions caused by factors
such as unfavorable weather conditions, changes in legal regulations or withdrawing some foodstuffs from trading. Also the increased demand
for certain products accompanied by limited supply may lead to difficulties in obtaining these by the Group or to relevant price increases. Both
the shortages and product price increases may have an adverse effect on the Group‘s results, operations and financial standing. In order to
mitigate this risk (among others) AmRest Sp. z o.o. signed a contract with SCM Sp. z o.o. for the provisions of services comprising
intermediation and negotiating terms of delivery to restaurants, including negotiating terms of distribution agreements.
10. Risks related to opening restaurants in new countries
Opening or taking over restaurants operating in a new geographical and political area involves the risk of varying consumer preferences, a risk
of insufficient knowledge of the market, the risk of legal restrictions arising from local regulations and the political risk of these countries.
11. Currency risk
The results of AmRest are exposed to currency risk related to transactions and exchanges into currencies other than the currency in which
business transactions are measured in the individual Capital Group companies. The Group adjusts its currency portfolio of debt to the
geographical structure of its profile of activities. Additionally, AmRest uses forward contracts to secure transaction risks on a short-term basis.
12. Risks related to the current geopolitical situation
The Company conducts its business in countries where political climates are uncertain. Tensions around that subject may result in a negative
impact on economy, including instable currency, interest rates, liquidity, supply chain disruptions and consumer confidence deterioration. All
these events and uncertainty that accompanies them may have a significant impact on the Group’s operations and financial position, the effect
of which is difficult to predict. The future economic and regulatory situation may differ from the Management’s expectations however it is being
monitored in order to adjust strategic intentions and operational decisions, which will minimize business risks.
13. Risk of increased financial costs
AmRest and its subsidiaries are exposed to a certain extent to adverse impact of interest rate fluctuations in connection with obtaining financing
which bears floating interest rates and investing in assets bearing floating interest rates. The interest rates of bank loans and borrowings and
issued bonds are based on a combination of fixed and floating reference rates which are updated over periods shorter than one year.
Additionally, AmRest and its subsidiaries may, as part of the interest rate hedging strategy, enter into derivative and other financial contracts,
where the valuation of which is significantly affected by the level of reference rates.
14. Increases in the cost of commodities, raw materials and goods
Increases in the cost of commodities, raw materials and goods can have an adverse impact on Group's operating profit margins. In order to
mitigate these risks, the Group has implemented sourcing strategies, periodical tender procedures, and established preventative controls to
monitor deviations in actual expenditure, monitoring of pricing trends, and active review of tender processes.
(all figures in EUR millions unless stated otherwise)
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15. Tax risk
In the process of managing and making strategic decisions, which can affect the tax settlements, AmRest is exposed to tax risk. In the event
of irregularities occurring in tax settlements increase of the risk of dispute in the case of a potential tax control. As part of minimising this risk,
AmRest works to deepening the knowledge of its employees in the area of tax risk management and compliance with respective to the legal
requirements of the different countries the Group is based in.. The Company implements adequate procedures to facilitate the identification
and subsequent reduction or elimination of risks in the area of tax settlements. Moreover, in connection with frequent legislative changes, the
inconsistency of regulations, as well as differences in the interpretation of legal regulations, AmRest uses professional tax advisory services
and applies for binding interpretations of the tax law provisions. Current fiscal supervisions are presented in Note 33 to the Consolidated
Financial Statements as for the year ended 31 December 2021.
16. Credit risk
Exposure to credit risk include cash and cash equivalents and trade and other receivables. With the development of franchise business,
AmRest is getting exposed more to credit risk. Therefore the quality of the franchisees portfolio is a key priority.
17. Risks of economic slowdowns
Economic slowdown in the countries where AmRest runs its restaurants may affect the level of consumption expenditure in these markets,
which in turn may affect the results of the AmRest restaurants operating in these markets.
18. Risk of system breakdowns and temporary breaks in serving customers in restaurants
Risk of systems failures and communication network failure, as well as the potential partial or complete loss of data in connection with system
breakdowns or damage or loss of key tangible fixed assets of the Group might result in temporary interruptions in serving customers in
restaurants, which might have an adverse effect on the Group’s financial results. In order to minimise this risk, the Group has implemented
appropriate business continuity procedures and disaster recovery plans in order to ensure the stability and reliability of its IT systems.
19. Cyberattack risk
The Group’s operations are supported by a wide variety of IT systems, including point-of-sale systems, electronic ordering platforms, supply-
chain management systems and finance and controlling tools. Consequently, the Group is exposed to the risk of temporary operational
disruption, data integrity risk and/or unauthorised access to confidential data, which may be a result of cyberattacks. In order to mitigate these
risks, the Group established a specialized IT-security unit and implemented appropriate cybersecurity risk mitigation tools, including security
polices, personnel training and technical prevention countermeasures.
20. Global crisis and disruption
The risk of global disruption to the Group's business, industry or economy as a consequence of global disasters, such as health epidemics,
economic crises, energy crises, extreme weather events, or other critical events which, could impact on the Group's day to day business
concerns. In response to such events the Group has developed a Business Continuity and a Crisis Management System, incorporating a crisis
prevention mechanism, early detection and warning system with an advance incident processing and crisis management framework
21. Remaining factors outside the Group’s control
This risk is related to the effect of factors remaining outside the Group’s control on AmRest’s development strategy which is based on opening
new restaurants. Such factors include: opportunities for finding and securing available and appropriate locations for restaurants, the ability to
obtain the permits required by relevant bodies, the possibility of delays in opening new restaurants.
E.4 Indicate whether the entity has risk tolerance levels, including for tax risk.
The Global Risk and Compliance Department is responsible for the regular updating of AmRest Risk Map, incorporating the risks to
which the Group is exposed in the form of a chart, in which the impact of the risk materialization; and the likelihood of the risk
materialization are captured.
The objectives of the AmRest Risk Map:
■
collect comprehensive and structured information about risks at AmRest Group (identification);
■
perform risk prioritization of the identified risks (assessment);
■
have an updated and integrated risk map for AmRest Group.
In line with the 3-line of defense risks management framework, both risk owners and risk delegates are accountable for risk identification
and risk response strategies development, risk identified are assessed documented within the process system and risk map
documented.
The Risk Map is communicated to the AmRest Risk and Compliance Committee and to the Audit
and Risk
Committee for review and
overseeing adequate action plans addressing identified risks.
The AmRest Risk structure included a 3-level risk classification system:
■
The first level (main categories of risks) was divided into 5 areas:
- Governance,
- Strategy & Planning,
- Operations & Infrastructure,
- Compliance,
- Reporting.
■
The second level contained specific risks.
The risks are evaluated by using the consistent parameters: impact (refers to the extent a risk event might affect the Group and measured
as a % of EBITA), and likelihood (represents the probability that a given event will occur, is measured as a % materialization possibility).
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
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The Group identifies and assesses risks that may impact the achievement of the entity’s strategy and business objectives, by monitoring
key risk indicators to gauge behavior and exposure, providing early warnings which are then combined with strategies of acceptance,
reduction or mitigation measures.
The Group has further developed control activities for the risks in the processes with the aim to mitigate the exposure to the risk
materialization, either reducing its likelihood or minimizing its impact.
Risks are prioritized according to their severity and considering the entity’s risk appetite. The organization then selects risk responses
and monitors performance for change. The organization determines a portfolio view of the amount of risk the entity has assumed in the
pursuit of its strategy and business objectives.
E.5 Indicate which risks, including tax risks, have materialised during the year.
Liquidity risk
The Group was exposed to the liquidity risk due to the breach of covenants and reclassification of long-term debt to short-term which
could be therefore due in the next 12 months.
The positive business performance recorded during 2021 reduced the Group's leverage below the thresholds established in the financial
covenants with its financing banks and bondholders, ahead of the schedule established in the waiver signed in 2020. In addition, this
positive evolution, together with the support of its financing bank, allowed the Group to sign a 3-year debt maturity extension for the
outstanding club banks funding.
Increase in the cost of commodities, raw material and goods
Increases in the cost of commodities, raw materials and goods can have an adverse impact on Group's operating profit margins. In
order to mitigate these risks, the Group has implemented sourcing strategies, from Spec optimizations and value engineering initiatives
to avoid price increase, to bulk orders to secure stock, periodical tender procedures, and established preventative controls to monitor
deviations in actual expenditure, monitoring of pricing trends, and active review of tender processes.
Price increases had no significant impact throughout the 2021, however partially in Q4 2021, with tangible effects across specialized
services (IT, Digital area, etc.) and services connected to crude oil price (transport, delivery services)
Risk related to coronavirus and its implication for the economy and society.
The COVID-19 pandemic had a particularly negative impact on the restaurants sectors. The ban or significant limitations in operation of
restaurants resulted in a decrease in business activity and customer demand and consequently decrease of revenues.
Some other risks related to the activity of the Company have materialized during the year. None of these risks had a relevant impact on
the AmRest business since the measures for their prevention and/or mitigation worked properly.
E.6 Explain the response and oversight plans for the company's main risks, including tax risks, as well as
the procedures followed by the company in order to ensure that the Board of Directors responds to any new
challenges that arise.
In order to address and supervise the Group’s risk management and control (including fiscal risks), model is based on a series of
tools/processes described in section E.1 and E.2 of this report.
Global Internal Audit and Internal Control Departments support AmRest Management in risks identification and provide
recommendations in area of risk management, collect action plans from the Management, which address risks, and monitor and verify
their implementation.
There are the committees operating at AmRest in order to respond and supervise entity’s main risks, including:
1. Committees composed of the members of the Board of Directors:
■
Audit and Risk Committee;
■
Sustainability, Health and Safety Committee;
■
Appointments and Remuneration Committee;
■
Executive Committee;
2. Other committees:
■
Risk and Compliance Committee.
■
Crisis Management Committee;
■
Sustainability Committee.
■
Ethics Committee;
■
Information Security Committee
To reduce unnecessary tax risk AmRest introduced the following rules:
1. applies the Tax Policy which includes good practices in respect of taxes,
2. ensures that the company has the accounting and control mechanisms needed to handle day to day tax and reporting requirements,
3. ensures that tax is properly considered as part of corporate decision making processes,
4. considers the probability of a different approach of tax authority to the application of the tax law and acting in a manner which
mitigates such risk
(all figures in EUR millions unless stated otherwise)
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F. INTERNAL RISK MANAGEMENT AND CONTROL SYSTEMS RELATING TO
THE PROCESS OF PUBLISHING FINANCIAL INFORMATION (ICFR)
Describe the mechanisms forming your company's Internal Control over Financial Reporting (ICFR) system.
F.1 THE ENTITY'S CONTROL ENVIRONMENT
Report on at least the following, describing their principal features:
F.1.1 The bodies and/or departments that are responsible for: (i) the existence and maintenance of an adequate
and effective ICFR system; (ii) its implementation; and (iii) its supervision.
The Board of Directors is ultimately respons ble for the internal control and risk management systems. In this sense, in accordance with article
19.4.b) of the Regulations of the Board of Directors, this function is entrusted to the Audit and Risk Committee. In particular, the audit and Risk
committee shall:
■
oversee the effectiveness of the Company’s internal control system, the internal audit, and the risk management system and discuss
with the accounting auditor the significant weaknesses of the internal control system revealed in the course of the audit, while
maintaining its independence;
■
oversee the process for preparing and disclosing mandatory financial information regarding the Company and submit recommendations
or motions to the Board of Directors for the purposes of safeguarding the integrity of such financial information.
Regulations adopted on Audit and Risk Committee, develop and supplement the provisions of the Status and Regulations of the Board of
Directors. With regard to the process of preparing economic and financial information, Audit and Risk Committee shall:
■
oversee the process of preparation and submission and the clarity and integrity of the regulated financial information relating to the
Company and its Group, ensuring that the half-yearly financial reports and the quarterly management statements are drafted in
accordance with the same accounting standards as the annual financial reports and to oversee the review of the interim financial
statements requested from the auditor, with the scope and frequency that may be defined, as the case may be
■
review compliance with legal requirements, the proper delimitation of the scope of consolidation, and the correct application of such
generally accepted accounting principles and international financial reporting standards as may be applicable
■
submit recommendations or motions to the Board of Directors for the purposes of safeguarding the integrity of the financial information
■
advice the Board of Directors on any significant change of accounting standard and of the significant risks on the balance sheet and off-
balance sheet;
The Finance Department prepares the financial information and submits it for approval of the Audit and Risk Committee and the Board, and
keeps the daily interaction and communication with the Group’s external auditor.
The Internal Audit and Internal Control Department of the Group, with regard to its function of supporting the Audit and Risk Committee when
supervising the efficiency of the Internal Control System and company Risk Management, includes in its audit plan periodic revisions of the
internal, financial and operational controls; the results of these revisions are summarized in the audit reports indicating the deficiencies detected
and the action plans proposed by the Group Management to remedy them.
Additionally, the Global Risk and Compliance Department was established in the beginning of 2021 with the department head reporting directly
to the Audit and Risk Committee Chairman.
The Company has also adopted the Regulatory Compliance Policy implementing:
■
Set of operating principles associated with the main compliance areas affecting organization;
■
Set of mechanisms and procedures to prevent, identify and resolve situations in which unethical, unlawful practice or regulatory
breaches occur in the course of our activities.
Lastly, the code of business conduct sets out the main ethical principles and regulations on behavior for all Group employees..
F.1.2 Indicate whether the following exist, especially in relation to the drawing up of financial information:
■
Departments and/or mechanisms in charge of: (i) the design and review of the organisational structure;
(ii) clear definition of lines of responsibility and authority with an appropriate distribution of tasks and
functions; and (iii) ensuring that adequate procedures exist for their proper dissemination throughout the
entity.
The Group, through the corporate organisation division and the organisational units for each country, defines, implements and maintains the
organisational structures, set of job positions aligned with the size and complexity of the units and strategy of the Group, addressing appropriate
distribution of work and segregation of duties.
With respect to the process of preparing financial information group has set in place, several policies, instruction and manuals (l ke Group
Reporting and Accounting Manual, Group Charts of Accounts, Financial Calendar, Corporate Fiscal Policy, Finance and Investment Policy,
Regulatory Compliance Policy, Risk Management Policy) determining responsibilities and authorities. Preparation of financial information
concerns planning, the distribution of tasks and functions, specific timeline, various reviews to be performed at several levels and dissemination
thereof. To this end, the Group has financial accounting and control functions in each of its operating markets or countries where it has
presence; which are headed up by a controller respons ble for implementing and integrating at the local level of global policies defined by
Group ensuring the unified reporting standards across all the Group. The consolidation work is carried out in the corporate unit, in the finance
department, which has overall responsibility for the preparation and issuance of the group's financial information. As a consequence of all the
former, AmRest's organisational structure defines lines of action and responsibility for the areas involved in the generation of financial
information, both at the individual entity level and consolidated Group level.
(all figures in EUR millions unless stated otherwise)
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■
Code of conduct, the body approving this, degree of dissemination and instruction, principles and
values covered (stating whether there is specific mention of record keeping and preparation of
financial information), body charged with analysing breaches and proposing corrective actions and
sanctions.
■
Whistleblower channel allowing notifications to the audit committee of irregularities of a financial
and accounting nature, in addition to potential breaches of the code of conduct and unlawful
activities undertaken in the organisation, indicating whether this channel is confidential and whether
anonymous notifications can be made, protecting the rights of the whistleblower and the person
reported.
■
Training and periodic refresher programmes for personnel involved in the preparation and revision
of financial information, as well as in the assessment of the ICFR system, covering at least accounting
standards, auditing, internal control and risk management.
With regard to employee training in financial and control issues, AmRest provides through internal and external trainings.
Financial reporting personnel attend technical sessions run by external consultancy firms and covering developments in accounting. Likewise,
the Group relies on the external advice of experts in specific areas related to the financial reporting.
AmRest supports also financial reporting personnel in getting professional and internationally recognized certificates like ACCA or CIMA.
AmRest supports Internal Auditors in getting professional and internationally recognized certificates like CIA, CISA and others.
F.2 ASSESSMENT OF RISKS IN FINANCIAL REPORTING
Report on at least the following:
F.2.1 The main characteristics of the risk identification process, including risks of error and fraud, as regards:
■
Whether the process exists and is documented.
In December 2021 AmRest reviewed and revitalized its Code of Ethics and Business Conduct. The Board of Directors of AmRest Group has
an exclusive authority to approve and amend the Code. The document underlines AmRest's commitment to ethics and compliance with the
law as a fundamental part of the company's culture. The Code covers aspects related to the compliance the law, prevention of bribery and
corruption, good accounting and tax practices, as well as respect in the workplace including due regard for human rights, equal opportunities,
diversity and health and safety.
All Personnel must familiarize themselves and comply with the Code, and cooperate to facilitate its implementation throughout AmRest which
includes reporting any breach of the Code of which they become aware through AmRest’s whistleblowing channel.
AmRest set up the process to analyse breaches and propose corrective actions and sanctions where the body charged with these
responsibilities is Global Ethics Committee on AmRest Group level and Local Ethics Committees on the country level. Global Ethics Committee
consists, among others, of representatives from Global HR, Legal, Finance, and the Internal Audit Director, Chief Risk and Compliance Officer
and Global Compliance Lead, proposed by the Risk and Compliance Committee and approved by the Audit and Risk Committee.
AmRest operates whistleblowing channels, including the online Speak Openly solution, to allow employees and other stakeholders to report
any irregularities and breaches of external or internal regulations. The online solution currently operates in all countries where AmRrest is
present except for: France, Hungary, Russia and China.
The rules and commitments related to the whistleblowing channels are documented in the Whistleblowing Group Policy, approved by the Board
of Directors and ensure among others the confidentiality, possibility of anonymous reporting, protection of whistleblowers and person reported,
impartiality of the investigation and prohibition of retaliation.
AmRest Group's risk identification and assessment is an internal process, defined by Global Risk Management Policy adopted by the Company
and cascaded to all subsidiaries within the Group.
Per this policy, process carried out by:
■
the Board of Directors and Audit and Risk Committee (oversight the effectiveness of the Group’s risk management system),
■
Top Management (promoting risk management culture),
■
Risk Owners (Identifying current, conducting risk assessment and keeping the risk map updated, defining and executing risk response
strategies to mitigate risks
■
Risk and Compliance Committee (fostering the implementation of efficient and complete risk response strategies)
■
Risk and Compliance Department (coordinating, promoting and supervising risk management process)
■
Internal Audit and Internal Control Department (evaluating risk management, internal controls and corporate governance and providing
recommendations)
■
Employees and Co-workers (complying with Global Risk Management Policy and procedures)
Section E.4 of this report indicates the risk classification system, which takes into account all classes of risk. Its scope is greater than the risks
directly related to the preparation of the Group’s financial information.
(all figures in EUR millions unless stated otherwise)
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■
Whether the process covers all the objectives of financial reporting, (existence and occurrence;
completeness; valuation; presentation; disclosure and comparability; and rights and obligations),
whether it is updated and if so how often.
Identification of risks is carried out for each process identified as relevant based on the objectives of the financial reporting: existence and
occurrence, completeness, valuation, presentation, breakdown and comparability, and rights and obligations.
■
The existence of a process for identifying the scope of consolidation, taking into account, among
other factors, the possible existence of complex corporate structures or special purpose vehicles.
In the process of identifying the consolidation scope, the Group Controller (Head of Group Accounting Department), regularly updates the
consolidation scope, verifying all changes (additions and removals) in the Group structure. Any changes within the scope of consolidation are
subject to Audit and Risk Committee approval.
■
Whether the process takes into account the effects of other types of risk (operational, technological,
financial, legal, tax, reputational, environmental, etc.) to the extent that they affect the financial
statements.
The process of identifying risks leading to errors in the financial reporting takes into account also qualitative factors, together with other types
of risk (like operational, financial, strategic, regarding regulatory compliance) as they ultimately affect the financial statements.
■
The governing body within the company that supervises the process.
The Board through the Audit and Risk Committee supervises this process.
F.3 CONTROL ACTIVITIES
Report on whether the company has at least the following, describing their main characteristics:
F.3.1 Review and authorisation procedures for financial information and a description of the ICFR, to be disclosed
to the securities markets, indicating those responsible, as well as documentation describing the flow of activity
and controls (including those relating to the risk of fraud) of the various types of transactions which may materially
affect the financial statements, including accounting closing procedures and the specific review of significant
judgements, estimates, valuations and projections.
As indicated in F.1.1 section of this report, the Board of Directors relies on the Audit and Risk Committee to supervise the process of preparing
and presenting the required financial information relating to the Company and the Group, including related nonfinancial information, as well as
its integrity, reviewing the Audit and Risk Committee in the first place compliance with regulatory requirements, the proper determination of the
scope of consolidation and the correct application of accounting standards.
The Audit and Risk Committee also has the duty to report to the board, in advance of the adoption by it of the corresponding decisions,
regarding the financial information that the Group must periodically make public, ensuring that such information is prepared in accordance with
the same principles and practices used to prepare the financial statements and is as reliable as such statements.
Each quarter the Group Accounting Department submits the periodic consolidated financial information to the Audit and Risk Committee,
highlighting the main assumptions and accounting criteria applied and clarifying any significant events which occurred during the reporting
period.
L kewise, the AmRest Group has in place documented financial processes, which implies common criteria for preparing financial information
for all subsidiaries within the Group. The Group Accounting Department issues mandatory instructions setting out the calendar and contents
for the financial reporting period for the preparation of the consolidated financial statements.
The Group Accounting Department also follows documented procedures for preparing consolidated financial information (provided in section
F.4.2).
The Group Accounting Department reviews the key judgments, estimates, valuations and forecasts to identify critical accounting policies that
require the use of estimates and value judgments. The most relevant are dealt with by the Audit and Risk Committee. Senior management
defines the format for presenting the financial statements prior to approval by the Board.
The most significant aspects of the accounting process and the review of the material judgements, estimates, measurements and projections
used are as follows:
■
impairment losses on certain assets,
■
the useful life of the tangible and intangible assets,
In relation to reporting of financial information the Group additionally ensures the existence of specific controls covering the potential risk of
error or fraud in the issuance of the financial information, i.e., potential errors in terms of: the existence of the assets, liabilities and transactions
as of the corresponding date and reporting period; proper and timely recognition and correct measurement of its assets, liabilities and
transactions; and
the correct application of the accounting rules and standards and adequate disclosures.
These controls are applied dynamically and updated continually to reflect the reality of the Group’s business as it evolves..
(all figures in EUR millions unless stated otherwise)
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■
the measurement of goodwill arising on consolidation,
■
recognition of provisions for potential tax obligations and uncertain tax provisions
■
going concern
■
leases.
The Board of Directors is responsible for approving the financial information that the Group, being a listed company, is obliged to publish.
F.3.2 Internal IT control policies and procedures (access security, control of changes, system operation,
operational continuity and segregation of duties, among others) which support significant processes within
the company relating to the preparation and publication of financial information.
The Group’s IT systems are directly or indirectly related to the financial reporting and financial statements as such. They are configured to
ensure the correct preparation and publication of financial information at all times by means of a specific internal control procedures. The Group
has internal policies and procedures, which are duly updated and distr buted, relating to systems security and access to the IT applications
and systems based on roles and in accordance with the duties and clearances ensuring proper separation of powers. The Group’s internal
policies establish that access to all systems storing or processing data shall be strictly controlled, and that the level of access control required
is determined by potential impact on the business. Access rights are assigned by Group experts in this area, by roles and functions. In addition,
to ensure compliance, the user and profile maintenance control and review processes in which responsible personnel in each area are involved
ensure that information is only available to persons who need it for their work.
Per Group’s methodology, any new software developments and any updates of existing IT solutions go through 3 phases, i.e. design,
development, and test before final implementation to the productive environment, which guarantees that financial information is handled
reliably.
The Group have taken necessary steps to ensure on-going performance of key functions in the event of disasters or other events that could
halt or interrupt business operations. These steps constitute specific initiatives mitigating the scale and severity of IT incidents and ensuring
that operations are up and running again as quickly and with as little damage as possible. The Group has highly automated back-up systems
to ensure the continuity of the most critical systems. In addition, there are specific risk mitigation strategies in place, such as cloud and virtual
data processing centres, back-up power suppliers and offsite storage facilities.
F.3.3. Internal control policies and procedures for overseeing the management of activities subcontracted to
third parties, as well as of those aspects of assessment, calculation or valuation entrusted to independent
experts, which may materially affect financial statements.
AmRest Group does not usually outsource to third parties’ activities that have the impact on the financial reporting process. In case a process
or its part is outsourced to an independent party, the same set of policies and procedures applicable for internal reporting purposes is put in
place for the external contractor, to ensure coverage of the risks associated with such outsourcing. The Group puts in place service level
agreements ensuring the integrity and quality of information provided by external contractors. The Group mostly assesses its estimates in
house. Whenever it is advisable to hire a third-party contractor, it does so having verified their expertise and independence, and validated their
methods and the reasonableness of the assumptions made.
F.4 INFORMATION AND COMMUNICATION
Report on whether the company has at least the following, describing their main characteristics:
F. 4.1 A specifically assigned function for defining and updating accounting policies (accounting policy area
or department) and resolving doubts or conflicts arising from their interpretation, maintaining a free flow of
information to those responsible for operations in the organisation, as well as an up-to-date accounting
policy manual distributed to the business units through which the company operates.
F.4.2 Mechanisms for capturing and preparing financial information in standardised formats for application
and use by all units of the entity or group, and support its main financial statements and notes, as well as
disclosures concerning ICFR.
The Group’s reporting structure supplies different kinds of services, including:
■
General IT systems
■
Management systems providing information for business monitoring and control purposes.
Group Accounting department is responsible for defining, updating and disseminating the accounting policies of the AmRest Group.
Accordingly, it has a Group Reporting and Accounting Manual adapted to the needs of the Group. These accounting policies are developed
based on the International Financial Reporting Standards adopted by the European Union (IFRS).
The Group Reporting and Accounting Manual is disseminated throughout all the personnel involved in the financial reporting process.
Any significant changes affecting Group Reporting and Accounting Manual, are communicated to the organization together with the updated
Manual. Group Accounting department consist of high qualified personnel and resolves queries or conflicts deriving from the interpretation of
the accounting standards and/or policies.
(all figures in EUR millions unless stated otherwise)
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■
Business systems encompassing the operation (sales) related systems
■
Structural systems providing the data shared and used by all the applications and services. These systems include all those related to
the accounting and financial information.
The same accounting system has been already implemented already in main subsidiaries; the Group’s though is still in progress of
implementing it in remaining subsidiaries. Group is in the process of integration of subsidiaries and business acquired during last years.
L kewise, Group has a consolidation system that enables standardized information to be obtained about the Group’s companies for the
consolidation purposes.
As stated above, there is a Group Accounting and Reporting Manual and Group Charts of Accounts, which include specific instructions on
preparing the financial statements.
Preventive controls have been defined, ensuring safe data input to the consolidation system. The implementation of this solution ensures for
the financial statement information and the annual accounts standardization.
The data in native currencies reported by subsidiaries are within the consolidation system automatically and in standardized way converted to
euro and are subsequently aggregated to the consolidated figures.
The consolidation process is designed to identify intragroup transactions, ensuring they are correctly eliminated. In addition, in order to ensure
the quality and comprehensiveness of the information, the consolidation system is configured to make investment-equity elimination
adjustments and to eliminate intragroup transactions, which are generated automatically in keeping with the system settings and checks.
This entire process is highly automated and includes automatic controls to enable the detection of incidents in the consolidation process. The
Group Accounting and Planning & Analysis departments perform additionally oversight and analytical controls.
F.5 SUPERVISION OF THE FUNCTIONING OF THE SYSTEM
Report on at least the following, describing their principal features:
F.5.1 The activities of the audit committee in overseeing ICFR as well as whether there is an internal audit function
one of the responsibilities of which is to provide support to the committee in its task of supervising the internal
control system, including ICFR. Additionally, describe the scope of ICFR assessment made during the year and
the procedure through which the person responsible for performing the assessment communicates its results,
whether the company has an action plan detailing possible corrective measures, and whether their impact on
financial reporting has been considered.
The Corporate Bylaws and Regulations of the Board of Directors state that the primary duty of the Audit and Risk Committee shall be to support
the Board of Directors in its supervisory duties, with its main functions including: supervising the effectiveness of the Company’s internal control
system and risk management systems, and discussing with the Auditors significant or material weaknesses in the internal control system
detected during the audit. The Audit and Risk Committee is responsible for supervising the effectiveness of the internal controls carried out by
the AmRest Group's Internal Audit function.
The Internal Audit function and Risk and Compliance function report functionally to the Audit and Risk Committee, with the primary goal of
lending them support in their responsibilities concerning:
■
ensuring governance,
■
risk management
■
the Group's Internal Control System.
The Internal Audit function is carried out in accordance with Internal Audit Articles of Association.
With regard to supervision of internal control over Financial Reporting (ICFR), AmRest is listed on the Spanish Stock Exchanges (and Warsaw
Stock Exchange) and is subject to the regulatory requirements established by the supervision authority (CNMV) applicable to companies being
traded on Spanish Stock Exchange.
F.5.2 Whether there is a discussion procedure whereby the auditor (as defined in the Spanish Technical Audit
Standards), the internal auditor and other experts can report to senior management and the audit committee or
directors of the company any significant weaknesses in internal control identified during the review of the annual
financial statements or any others they have been assigned. Additionally, state whether an action plan is available
for correcting or mitigating any weaknesses detected.
According to the Internal Audit Articles of Association, the Internal Audit Department reports progress of Annual Audits Plan realization, issues
with controls, corporate governance, significant AmRest risks, progress of management action plans implementation and others which are
required by the Audit and Risk Committee.
Any irregularities identified in standalone and/or consolidated financial statements are reported to Audit and Risk Committee as Summary
Report (after the half-year review and audit of the annual accounts). Audit and Risk Committee meets the Financial Auditors at least twice a
year.
According to the “Regulations Audit and Risk Committee of the Board of Directors of AmRest Holdings SE”, the Audit and Risk Committee
should, among others, oversee the effectiveness of the Company’s internal control system, the internal audit, and the risk management system
and discuss with the accounting auditor the significant weaknesses of the internal control system revealed in the course of the audit, while
maintaining its independence For such purposes, the Committee may, if appropriate, submit recommendations or motions to the Board of
Directors.
(all figures in EUR millions unless stated otherwise)
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With regard to the preparation of the regulated financial information of the Company and its Group, the Committee shall have the following
main duties:
a) To oversee the process of preparation and submission and the clarity and integrity of the regulated financial information relating to the
Company and its Group, ensuring that the half-yearly financial reports and the quarterly management statements are drafted in
accordance with the same accounting standards as the annual financial reports and to oversee the review of the interim financial
statements requested from the auditor, with the scope and frequency that may be defined, as the case may be. The Committee meets
often with the external auditor to comply with this function;
b) To review compliance with legal requirements, the proper delimitation of the scope of consolidation, and the correct application of such
generally accepted accounting principles and international financial reporting standards as may be applicable;
c) To submit recommendations or motions to the Board of Directors for the purposes of safeguarding the integrity of the financial
information; and
d) To advice the Board of Directors on any significant change of accounting standard and of the significant risks on the balance sheet and
off-balance sheet.
F.6 OTHER RELEVANT INFORMATION
N/A
F.7 EXTERNAL AUDITOR´S REPORT
Report:
F.7.1 Whether the ICFR information sent to the markets has been subjected to review by the external auditor,
in which case the entity should include the corresponding report as an attachment. If not, reasons why
should be given.
The information on the internal control over the financial reporting system has been not submitted for review by the external auditor as the
Group continues implementing the improvements and recommendations arising from the ICFR implementation process at corporate level in
Spain and in its main subsidiaries.
G. DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE
RECOMMENDATIONS
Specify the company’s degree of compliance with recommendations of the Good Governance Code for listed companies.
In the event that a recommendation is not followed or only partially followed, a detailed explanation of the reasons must be
included so that shareholders, investors and the market in general have enough information to assess the company´s
conduct. General explanations are not acceptable.
1. That the articles of incorporation of listed companies should not limit the maximum number of votes that may
be cast by one shareholder or contain other restrictions that hinder the takeover of control of the company through
the acquisition of its shares on the market.
Complies X | Explain
2. That when the listed company is controlled by another entity in the meaning of Article 42 of the Commercial
Code, whether listed or not, and has, directly or through its subsidiaries, business relations with said entity or any
of its subsidiaries (other than the listed company) or carries out activities related to those of any of them it should
make accurate public disclosures on:
a) The respective areas of activity and possible business relationships between the listed company or its
subsidiaries and the parent company or its subsidiaries.
b) The mechanisms in place to resolve any conflicts of interest that may arise.
Complies | Complies partially | Explain | Not Applicable X
3. That, during the ordinary General Shareholders’ Meeting, as a complement to the distribution of the written
annual corporate governance report, the chairman of the Board of Directors should inform shareholders orally, in
sufficient detail, of the most significant aspects of the company's corporate governance, and in particular:
a) Changes that have occurred since the last General Shareholders’ Meeting.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
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b) Specific reasons why the company has not followed one or more of the recommendations of the Code of
Corporate Governance and the alternative rules applied, if any.
Complies | Complies partially | Explain X
At the Annual General Meeting held in May 2021, such a verbal presentation was not made, since all the attending
shareholders other than the controlling shareholder, who has representation on the Board, attended through proxies to the
members of the Board of Directors, thus no such explanation was necessary.
4. That the company should define and promote a policy on communication and contact with shareholders and
institutional investors, within the framework of their involvement in the company, and with proxy advisors that
complies in all aspects with rules against market abuse and gives equal treatment to similarly situated
shareholders. And that the company should publish this policy on its website, including information on how it has
been put into practice and identifying the contact persons or those responsible for implementing it.
And that, without prejudice to the legal obligations regarding dissemination of inside information and other types
of regulated information, the company should also have a general policy regarding the communication of
economic-financial, non-financial and corporate information through such channels as it may consider
appropriate (communication media, social networks or other channels) that helps to maximise the dissemination
and quality of information available to the market, investors and other stakeholders.
Complies | Complies partially X | Explain
The Group does not have a specific independent policy regarding the communication of economic-financial, non-financial
and corporate information, although these aspects are dealt with in the policy on communication and contacts with
shareholders and institutional investors.
5. That the Board of Directors should not submit to the General Shareholders’ Meeting any proposal for delegation
of powers allowing the issue of shares or convertible securities with the exclusion of preemptive rights in an
amount exceeding 20% of the capital at the time of delegation.
And that whenever the Board of Directors approves any issue of shares or convertible securities with the exclusion
of preemptive rights, the company should immediately publish the reports referred to by company law on its
website.
Complies X Complies partially Explain
6. That listed companies that prepare the reports listed below, whether under a legal obligation or voluntarily,
should publish them on their website with sufficient time before the General Shareholders’ Meeting, even if their
publication is not mandatory:
a) Report on the auditor’s independence.
b) Reports on the workings of the audit and nomination and remuneration committees.
c) Report by the audit committee on related party transactions.
Complies | Complies partially X | Explain
Although the external auditors are fully independent and was so stated in the Audit and Risk Committee report on the
auditor’s independence, in 2021 such report was not published on AmRest’s website. Audit and Risk Committee reports
on related party transactions have not been prepared independently but instead that information was part of the annual
report on activities of the Audit and Risk Committee.
7. That the company should transmit in real time, through its website, the proceedings of the General
Shareholders’ Meetings.
And that the company should have mechanisms in place allowing the delegation and casting of votes by means
of data transmission and even, in the case of large-caps and to the extent that it is proportionate, attendance and
active participation in the General Meeting to be conducted by such remote means.
Complies Explain X
Thus far, the holding of the General Shareholders’ Meeting has not been transmitted via the corporate website since the
implementation of the mechanisms required for such retransmission has not been considered necessary, taking into
account the shareholder structure of the Company.
The Company has mechanisms that allow the delegation and exercise of votes by remote means. The Company is not a
highly capitalized company and therefore does not consider attendance and active participation in the General
Shareholders' Meeting to be necessary or convenient.
(all figures in EUR millions unless stated otherwise)
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8. That the audit committee should ensure that the financial statements submitted to the General Shareholders’
Meeting are prepared in accordance with accounting regulations. And that in cases in which the auditor has
included a qualification or reservation in its audit report, the chairman of the audit committee should clearly
explain to the general meeting the opinion of the audit committee on its content and scope, making a summary of
this opinion available to shareholders at the time when the meeting is called, alongside the other Board proposals
and reports.
Complies X Complies partially Explain
9. That the company should permanently publish on its website the requirements and procedures for certification
of share ownership, the right of attendance at the General Shareholders’ Meetings, and the exercise of the right to
vote or to issue a proxy.
And that such requirements and procedures promote attendance and the exercise of shareholder rights in a non-
discriminatory fashion.
Complies X Complies partially Explain
10. That when a duly authenticated shareholder has exercised his or her right to complete the agenda or to make
new proposals for resolutions in advance of the General Shareholders’ Meeting, the company:
a) Should immediately distribute such complementary points and new proposals for resolutions.
b) Should publish the attendance, proxy and remote voting card specimen with the necessary changes such
that the new agenda items and alternative proposals can be voted on in the same terms as those proposed
by the Board of Directors.
c) Should submits all these points or alternative proposals to a vote and apply the same voting rules to them
as to those formulated by the Board of Directors including, in particular, assumptions or default positions
regarding votes for or against.
d) That after the General Shareholders’ Meeting, a breakdown of the voting on said additions or alternative
proposals be communicated.
Complies Complies partially Explain Not Applicable X
11. That if the company intends to pay premiums for attending the General Shareholders’ Meeting, it should
establish in advance a general policy on such premiums and this policy should be stable.
Complies Complies partially Explain Not Applicable X
12. That the Board of Directors should perform its functions with a unity of purpose and independence of criterion,
treating all similarly situated shareholders equally and being guided by the best interests of the company, which
is understood to mean the pursuit of a profitable and sustainable business in the long term, promoting its
continuity and maximising the economic value of the business.
And that in pursuit of the company’s interest, in addition to complying with applicable law and rules and
conducting itself on the basis of good faith, ethics and a respect for commonly accepted best practices, it should
seek to reconcile its own company interests, when appropriate, with the interests of its employees, suppliers,
clients and other stakeholders that may be affected, as well as the impact of its corporate activities on the
communities in which it operates and on the environment.
Complies X Complies partially Explain
13. That the Board of Directors should be of an appropriate size to perform its duties effectively and in a collegial
manner, which makes it advisable for it to have between five and fifteen members.
Complies X Explain
14. That the Board of Directors should approve a policy aimed at favouring an appropriate composition of the
Board and that:
a) Is concrete and verifiable.
b) Ensures that proposals for appointment or re-election are based upon a prior analysis of the skills required
by the Board of Directors; and
c) Favours diversity of knowledge, experience, age and gender. For these purposes, it is considered that the
measures that encourage the company to have a significant number of female senior executives favour
gender diversity.
(all figures in EUR millions unless stated otherwise)
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That the result of the prior analysis of the skills required by the Board of Directors be contained in the supporting
report from the nomination committee published upon calling the General Shareholders’ Meeting to which the
ratification, appointment or re-election of each director is submitted.
The nomination committee will annually verify compliance with this policy and explain its findings in the annual
corporate governance report.
Complies Complies partially X Explain
The Company has a Director Selection Policy aimed at promoting an appropriate composition of the Board of Directors.
There is no specific policy for the appointment of senior executives other than the provisions included in the Board
Regulations regarding the competencies of the Appointments and Remuneration Committee.
15. That proprietary and independent directors should constitute a substantial majority of the Board of Directors
and that the number of executive directors be kept to a minimum, taking into account the complexity of the
corporate group and the percentage of equity participation of executive directors.
And that the number of female directors should represent at least 40% of the members of the Board of Directors
before the end of 2022 and thereafter, and no less 30% prior to that date.
Complies | Complies partially X | Explain
Proprietary and Independent directors represent 85%, being only one Executive Director. With regards of the number of
female directors, that number represents shy of 30% (28.57%).
16. That the number of proprietary directors as a percentage of the total number of non-executive directors not be
greater than the proportion of the company's share capital represented by those directors and the rest of the
capital.
This criterion may be relaxed:
a) In large-cap companies where very few shareholdings are legally considered significant.
b) In the case of companies where a plurality of shareholders is represented on the Board of Directors
without ties among them.
Complies X| Explain
17. That the number of independent directors should represent at least half of the total number of directors.
That, however, when the company does not have a high level of market capitalisation or in the event that it is a
large-cap company with one shareholder or a group of shareholders acting in concert who together control more
than 30% of the company’s share capital, the number of independent directors should represent at least one third
of the total number of directors.
Complies X | Explain
18. That companies should publish the following information on its directors on their website, and keep it up
to date:
a) Professional profile and biography.
b) Any other Boards to which the directors belong, regardless of whether or not the companies are listed, as
well as any other remunerated activities engaged in, regardless of type.
c) Category of directorship, indicating, in the case of individuals who represent significant shareholders, the
shareholder that they represent or to which they are connected.
d) Date of their first appointment as a director of the company’s Board of Directors, and any subsequent re-
elections.
e) Company shares and share options that they own.
Complies | Complies partially X | Explain
Information of letter b) is not included in the Company’s website.
19. That the annual corporate governance report, after verification by the nomination committee, should explain
the reasons for the appointment of any proprietary directors at the proposal of shareholders whose holding is less
than 3%. It should also explain, if applicable, why formal requests from shareholders for presence on the Board
were not honoured, when their shareholding was equal to or exceeded that of other shareholders whose proposal
for proprietary directors was honoured.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
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Complies | Complies Partially | Explain | Not Applicable X
20. That proprietary directors representing significant shareholders should resign from the Board when the
shareholder they represent disposes of its entire shareholding. They should also resign, in a proportional fashion,
in the event that said shareholder reduces its percentage interest to a level that requires a decrease in the number
of proprietary directors.
Complies X | Complies Partially | Explain | Not Applicable
21. That the Board of Directors should not propose the dismissal of any independent director before the
completion of the director’s term provided for in the articles of incorporation unless the Board of Directors finds
just cause and a prior report has been prepared by the nomination committee. Specifically, just cause is
considered to exist if the director takes on new duties or commits to new obligations that would interfere with his
or her ability to dedicate the time necessary for attention to the duties inherent to his or her post as a director,
fails to complete the tasks inherent to his or her post, or is affected by any of the circumstances which would
cause the loss of independent status in accordance with applicable law.
The dismissal of independent directors may also be proposed as a result of a public takeover bid, merger or other
similar corporate transaction entailing a change in the shareholder structure of the company, provided that such
changes in the structure of the Board are the result of application of the proportionate representation criterion
provided in Recommendation 16.
Complies X | Explain
22. That companies should establish rules requiring that directors inform the Board of Directors and, where
appropriate, resign from their posts, when circumstances arise which affect them, whether or not related to their
actions in the company itself, and which may harm the company’s standing and reputation, and in particular
requiring them to inform the Board of any criminal proceedings in which they appear as suspects or defendants,
as well as of how the legal proceedings subsequently unfold.
And that, if the Board is informed or becomes aware in any other manner of any of the circumstances mentioned
above, it must investigate the case as quickly as possible and, depending on the specific circumstances, decide,
based on a report from the nomination and remuneration committee, whether or not any measure must be adopted,
such as the opening of an internal investigation, asking the director to resign or proposing that he or she be
dismissed. And that these events must be reported in the annual corporate governance report, unless there are
any special reasons not to do so, which must also be noted in the minutes. This without prejudice to the
information that the company must disseminate, if appropriate, at the time when the corresponding measures are
implemented.
Complies X | Complies partially | Explain
23. That all directors clearly express their opposition when they consider any proposal submitted to the Board of
Directors to be against the company’s interests. This particularly applies to independent directors and directors
who are unaffected by a potential conflict of interest if the decision could be detrimental to any shareholders not
represented on the Board of Directors.
Furthermore, when the Board of Directors makes significant or repeated decisions about which the director has
serious reservations, the director should draw the appropriate conclusions and, in the event the director decides
to resign, explain the reasons for this decision in the letter referred to in the next recommendation.
This recommendation also applies to the secretary of the Board of Directors, even if he or she is not a director.
Complies X | Complies Partially | Explain | Not Applicable
24. That whenever, due to resignation or resolution of the General Shareholders' Meeting, a director leaves before
the completion of his or her term of office, the director should explain the reasons for this decision, or in the case
of non-executive directors, their opinion of the reasons for cessation, in a letter addressed to all members of the
Board of Directors.
And that, without prejudice to all this being reported in the annual corporate governance report, insofar as it is
relevant to investors, the company must publish the cessation as quickly as possible, adequately referring to the
reasons or circumstances adduced by the director.
Complies X | Complies Partially | Explain | Not applicable
25. That the nomination committee should make sure that non-executive directors have sufficient time available
in order to properly perform their duties.
(all figures in EUR millions unless stated otherwise)
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And that the Board regulations establish the maximum number of company Boards on which directors may sit.
Complies X | Complies partially | Explain
26. That the Board of Directors meet frequently enough to be able to effectively perform its duties, and at least
eight times per year, following a schedule of dates and agendas established at the beginning of the year and
allowing each director individually to propose other items that do not originally appear on the agenda.
Complies X | Complies partially | Explain
27. That director absences occur only when absolutely necessary and be quantified in the annual corporate
governance report. And when absences do occur, that the director appoint a proxy with instructions.
Complies X | Complies partially | Explain
28. That when directors or the secretary express concern regarding a proposal or, in the case of directors,
regarding the direction in which the company is headed and said concerns are not resolved by the Board of
Directors, such concerns should be included in the minutes at the request of the director expressing them.
Complies X | Complies Partially | Explain | Not Applicable
29. That the company should establishes adequate means for directors to obtain appropriate advice in order to
properly fulfil their duties including, should circumstances warrant, external advice at the company’s expense.
Complies X | Complies partially | Explain
30. That, without regard to the knowledge necessary for directors to complete their duties, companies make
refresher courses available to them when circumstances make this advisable.
Complies X | Explain | Not Applicable
31. That the agenda for meetings should clearly indicate those matters on which the Board of Directors is to make
a decision or adopt a resolution so that the directors may study or gather all relevant information ahead of time.
When, in exceptional circumstances, the chairman wishes to bring urgent matters for decision or resolution before
the Board of Directors which do not appear on the agenda, prior express agreement of a majority of the directors
shall be necessary, and said consent shall be duly recorded in the minutes.
Complies X | Complies partially | Explain
32. That directors be periodically informed of changes in shareholding and of the opinions of significant
shareholders, investors and rating agencies of the company and its group.
Complies X | Complies partially | Explain
33. That the chairman, as the person responsible for the efficient workings of the Board of Directors, in addition
to carrying out the duties assigned by law and the articles of incorporation, should prepare and submit to the
Board of Directors a schedule of dates and matters to be considered; organise and coordinate the periodic
evaluation of the Board as well as, if applicable, the chief executive of the company, should be responsible for
leading the Board and the effectiveness of its work; ensuring that sufficient time is devoted to considering
strategic issues, and approve and supervise refresher courses for each director when circumstances make this
advisable.
Complies X | Complies partially | Explain
34. That when there is a coordinating director, the articles of incorporation or Board regulations should confer
upon him or her the following powers in addition to those conferred by law: to chair the Board of Directors in the
absence of the chairman and deputy chairmen, should there be any; to reflect the concerns of non-executive
directors; to liaise with investors and shareholders in order to understand their points of view and respond to their
concerns, in particular as those concerns relate to corporate governance of the company; and to coordinate a
succession plan for the chairman.
Complies | Complies Partially X | Explain | Not Applicable
AmRest partially complies with the recommendation to the extent that the Regulations of the Board of Directors attribute in
article 16 the following functions to the Coordinating Director: a) to reflect the concerns of non-executive directors and to
meet them when it considers it appropriate; b) to request the calling of the Board of Directors or the inclusion of new items
of the day in a meeting of the Board already called; and c) to direct the periodic evaluation of the Chairman of the Board of
Directors.
(all figures in EUR millions unless stated otherwise)
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35. That the secretary of the Board of Directors should pay special attention to ensure that the activities and
decisions of the Board of Directors take into account such recommendations regarding good governance
contained in this Good Governance Code as may be applicable to the company.
Complies X | Explain
36. That the Board of Directors meet in plenary session once a year and adopt, where appropriate, an action plan
to correct any deficiencies detected in the following:
a) The quality and efficiency of the Board of Directors’ work.
b) The workings and composition of its committees.
c) Diversity in the composition and skills of the Board of Directors.
d) Performance of the chairman of the Board of Directors and of the chief executive officer of the company.
e) Performance and input of each director, paying special attention to those in charge of the various Board
committees.
In order to perform its evaluation of the various committees, the Board of Directors will take a report from the
committees themselves as a starting point and for the evaluation of the Board, a report from the nomination
committee.
Every three years, the Board of Directors will rely for its evaluation upon the assistance of an external advisor,
whose independence shall be verified by the nomination committee.
Business relationships between the external adviser or any member of the adviser’s group and the company or
any company within its group must be specified in the annual corporate governance report.
The process and the areas evaluated must be described in the annual corporate governance report.
Complies X | Complies partially | Explain
37. That if there is an executive committee, it must contain at least two non-executive directors, at least one of
whom must be independent, and its secretary must be the secretary of the Board.
Complies X | Complies Partially | Explain | Not Applicable
38. That the Board of Directors must always be aware of the matters discussed and decisions taken by the
executive committee and that all members of the Board of Directors receive a copy of the minutes of meetings of
the executive committee.
Complies X | Complies Partially | Explain | Not Applicable
39. That the members of the audit committee, in particular its chairman, be appointed in consideration of their
knowledge and experience in accountancy, audit and risk management issues, both financial and non-financial.
Complies X | Complies partially | Explain
40. That under the supervision of the audit committee, there should be a unit in charge of the internal audit
function, which ensures that information and internal control systems operate correctly, and which reports to the
non-executive chairman of the Board or of the audit committee.
Complies X | Complies partially | Explain
41. That the person in charge of the unit performing the internal audit function should present an annual work plan
to the audit committee, for approval by that committee or by the Board, reporting directly on its execution,
including any incidents or limitations of scope, the results and monitoring of its recommendations, and present
an activity report at the end of each year.
Complies X | Complies Partially | Explain | Not Applicable
42. That in addition to the provisions of applicable law, the audit committee should be responsible for the
following:
1. With regard to information systems and internal control:
a) Supervising and evaluating the process of preparation and the completeness of the financial and non-
financial information, as well as the control and management systems for financial and non-financial risk
relating to the company and, if applicable, the group - including operational , technological, legal, social,
(all figures in EUR millions unless stated otherwise)
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environmental, political and reputational risk, or risk related to corruption - reviewing compliance with
regulatory requirements, the appropriate delimitation of the scope of consolidation and the correct
application of accounting criteria.
b) Ensuring the independence of the unit charged with the internal audit function; proposing the selection,
appointment and dismissal of the head of internal audit; proposing the budget for this service; approving
or proposing its orientation and annual work plans for approval by the Board, making sure that its activity
is focused primarily on material risks (including reputational risk); receiving periodic information on its
activities; and verifying that senior management takes into account the conclusions and
recommendations of its reports.
c) Establishing and supervising a mechanism that allows employees and other persons related to the
company, such as directors, shareholders, suppliers, contractors or subcontractors, to report any
potentially serious irregularities, especially those of a financial or accounting nature, that they observe in
the company or its group. This mechanism must guarantee confidentiality and in any case provide for
cases in which the communications can be made anonymously, respecting the rights of the whistleblower
and the person reported.
d) Generally ensuring that internal control policies and systems are effectively applied in practice.
2. With regard to the external auditor:
a) In the event that the external auditor resigns, examining the circumstances leading to such resignation.
b) Ensuring that the remuneration paid to the external auditor for its work does not compromise the quality
of the work or the auditor’s independence.
c) Making sure that the company informs the CNMV of the change of auditor, along with a statement on any
differences that arose with the outgoing auditor and, if applicable, the contents thereof.
d) Ensuring that the external auditor holds an annual meeting with the Board of Directors in plenary session
in order to make a report regarding the tasks performed and the development of the company's accounting
situation and risks.
e) Ensuring that the company and the external auditor comply with applicable rules regarding the provision
of services other than auditing, limits on the concentration of the auditor’s business, and, in general, all
other rules regarding auditors' independence.
Complies X | Complies partially | Explain
43. That the audit committee be able to require the presence of any employee or manager of the company, even
stipulating that he or she appear without the presence of any other member of management.
Complies X | Complies partially | Explain
44. That the audit committee be kept abreast of any corporate and structural changes planned by the company in
order to perform an analysis and draw up a prior report to the Board of Directors on the economic conditions and
accounting implications and, in particular, any exchange ratio involved.
Complies X | Complies Partially | Explain | Not Applicable
45. That the risk management and control policy identify or determine, as a minimum:
a) The various types of financial and non-financial risks (including operational, technological, legal, social,
environmental, political and reputational risks and risks relating to corruption) which the company faces,
including among the financial or economic risks contingent liabilities and other off-balance sheet risks.
b) A risk control and management model based on different levels, which will include a specialised risk
committee when sector regulations so require or the company considers it to be appropriate.
c) The level of risk that the company considers to be acceptable.
d) Measures in place to mitigate the impact of the risks identified in the event that they should materialised.
e) Internal control and information systems to be used in order to control and manage the aforementioned
risks, including contingent liabilities or off-balance sheet risks.
Complies X | Complies partially | Explain
46. That under the direct supervision of the audit committee or, if applicable, of a specialised committee of the
Board of Directors, an internal risk control and management function should exist, performed by an internal unit
or department of the company which is expressly charged with the following responsibilities:
(all figures in EUR millions unless stated otherwise)
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a) Ensuring the proper functioning of the risk management and control systems and, in particular, that they
adequately identify, manage and quantify all material risks affecting the company.
b) Actively participating in drawing up the risk strategy and in important decisions regarding risk
management.
c) Ensuring that the risk management and control systems adequately mitigate risks as defined by the policy
laid down by the Board of Directors.
Complies X | Complies partially | Explain
47. That in designating the members of the nomination and remuneration committee – or of the nomination
committee and the remuneration committee if they are separate – care be taken to ensure that they have the
knowledge, aptitudes and experience appropriate to the functions that they are called upon to perform and that
the majority of said members are independent directors.
Complies X | Complies partially | Explain
48. That large-cap companies have separate nomination and remuneration committees.
Complies | Explain | Not Applicable X
49. That the nomination committee consult with the chairman of the Board of Directors and the chief executive of
the company, especially in relation to matters concerning executive directors.
And that any director be able to ask the nomination committee to consider potential candidates that he or she
considers suitable to fill a vacancy on the Board of Directors.
Complies | Complies partially X | Explain
Although it is not expressly contemplated in AmRest's internal regulations for the Appointments and Remunerations
Committee to consult the Chairman of the Board and the chief executive when dealing with matters relating to executive
directors, in practice said Committee indeed consult the Chairman and the Chief Executive on those matters.
50. That the remuneration committee exercise its functions independently and that, in addition to the functions
assigned to it by law, it should be responsible for the following:
a) Proposing the basic conditions of employment for senior management to the Board of Directors.
b) Verifying compliance with the company's remuneration policy.
c) Periodically reviewing the remuneration policy applied to directors and senior managers, including share-
based remuneration systems and their application, as well as ensuring that their individual remuneration
is proportional to that received by the company's other directors and senior managers.
d) Making sure that potential conflicts of interest do not undermine the independence of external advice
given to the committee.
e) Verifying the information on remuneration of directors and senior managers contained in the various
corporate documents, including the annual report on director remuneration.
Complies X | Complies partially | Explain
51. That the remuneration committee should consult with the chairman and the chief executive of the company,
especially on matters relating to executive directors and senior management.
Complies | Complies partially X | Explain
Although it is not expressly contemplated in AmRest's internal regulations for the Appointments and Remunerations
Committee to consult the Chairman of the Board and the chief executive when dealing with matters relating to executive
directors and senior management, in practice said Committee indeed consult the Chairman when needed. The Company
does not have a Chief Executive Officer, but just one executive director, who happens to also be the Chairman of the Board.
52. That the rules regarding the composition and workings of the supervision and control committees should
appear in the regulations of the Board of Directors and that they should be consistent with those applying to
legally mandatory committees in accordance with the foregoing recommendations, including:
a) That they be composed exclusively of non-executive directors, with a majority of independent directors.
b) That their chairpersons be independent directors.
c) That the Board of Directors select members of these committees taking into account their knowledge,
skills and experience and the duties of each committee; discuss their proposals and reports; and require
(all figures in EUR millions unless stated otherwise)
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them to render account of their activities and of the work performed in the first plenary session of the
Board of Directors held after each committee meeting.
d) That the committees be allowed to avail themselves of outside advice when they consider it necessary to
perform their duties.
e) That their meetings be recorded and their minutes be made available to all directors.
Complies X | Complies Partially | Explain | Not Applicable
53. That verification of compliance with the company's policies and rules on environmental, social and corporate
governance matters, and with the internal codes of conduct be assigned to one or divided among more than one
committee of the Board of Directors, which may be the audit committee, the nomination committee, a specialised
committee on sustainability or corporate social responsibility or such other specialised committee as the Board
of Directors, in the exercise of its powers of self-organisation, may have decided to create. And that such
committee be composed exclusively of non-executive directors, with a majority of these being independent
directors, and that the minimum functions indicated in the next recommendation be specifically assigned to it.
Complies | Complies partially X | Explain
See response to recommendation 54.
54. The minimum functions referred to in the foregoing recommendation are the following:
a) Monitoring of compliance with the company’s internal codes of conduct and corporate governance rules,
also ensuring that the corporate culture is aligned with its purpose and values.
b) Monitoring the application of the general policy on communication of economic and financial information,
non-financial and corporate information and communication with shareholders and investors, proxy
advisors and other stakeholders. The manner in which the entity communicates and handles relations
with small and medium-sized shareholders must also be monitored.
c) The periodic evaluation and review of the company’s corporate governance system, and environmental
and social policy, with a view to ensuring that they fulfil their purposes of promoting the interests of
society and take account, as appropriate, of the legitimate interests of other stakeholders.
d) Supervision of the company's environmental and social practices to ensure that they are in alignment with
the established strategy and policy.
e) Supervision and evaluation of the way in which relations with the various stakeholders are handled.
Complies | Complies partially X| Explain
Although not expressly contemplated in the Company's internal regulations, the Audit and Risk Committee, the
Appointments and Remuneration Committee and the Sustainability, Health and Safety Committee perform the functions
referred to in this recommendation.
55. That environmental and social sustainability policies identify and include at least the following:
a) The principles, commitments, objectives and strategy relating to shareholders, employees, clients,
suppliers, social issues, the environment, diversity, tax responsibility, respect for human rights, and the
prevention of corruption and other unlawful conduct
b) Means or systems for monitoring compliance with these policies, their associated risks, and management.
c) Mechanisms for supervising non-financial risk, including that relating to ethical aspects and aspects of
business conduct.
d) Channels of communication, participation and dialogue with stakeholders.
e) Responsible communication practices that impede the manipulation of data and protect integrity and
honour.
Complies | Complies partially X | Explain
The Company partially complies with this recommendation to the extent that it has a Corporate Sustainability and Social
Responsibility Policy, available on its website, although it does not include all the principles contained in the
recommendation. The Company also has a Global Sustainability Strategy which addresses key topics from environmental,
social and governance areas.
56. That director remuneration be sufficient in order to attract and retain directors who meet the desired
professional profile and to adequately compensate them for the dedication, qualifications and responsibility
demanded of their posts, while not being so excessive as to compromise the independent judgement of non-
executive directors.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
117
Complies X | Explain
57. That only executive directors should receive variable remuneration linked to corporate results and personal
performance, as well as remuneration in the form of shares, options or rights to shares or instruments referenced
to the share price and long-term savings plans such as pension plans, retirement schemes or other provident
schemes.
Consideration may be given to delivering shares to non-executive directors as remuneration providing this is
conditional upon their holding them until they cease to be directors. The foregoing shall not apply to shares that
the director may need to sell in order to meet the costs related to their acquisition.
Complies X | Complies partially | Explain
58. That, as regards variable remuneration, remuneration policies should incorporate the necessary limits and
technical safeguards to ensure that such remuneration is in line with the professional performance of its
beneficiaries and not based solely on general developments in the markets or in the sector in which the company
operates, or other similar circumstances.
And, in particular, that variable remuneration components:
a) Are linked to pre-determined and measurable performance criteria and that such criteria take into account
the risk incurred to achieve a given result.
b) Promote the sustainability of the company and include non-financial criteria that are geared towards
creating long term value, such as compliance with the company's rules and internal operating procedures
and with its risk management and control policies.
c) Are based on balancing the attainment of short-, medium- and long-term objectives, so as to allow
remuneration of continuous performance over a period long enough to be able to assess its contribution
to the sustainable creation of value, such that the elements used to measure performance are not
associated only with one-off, occasional or extraordinary events.
Complies | Complies Partially | Explain | Not Applicable X
AmRest policy on Director’s Remuneration does not allow any variable component.
59. That the payment of variable remuneration components be subject to sufficient verification that previously
established performance or other conditions have effectively been met. Entities must include in their annual report
on director remuneration the criteria for the time required and methods used for this verification depending on the
nature and characteristics of each variable component.
That, additionally, companies consider the inclusion of a reduction ('malus') clause for the deferral of the payment
of a portion of variable remuneration components that would imply their total or partial loss if an event were to
occur prior to the payment date that would make this advisable.
Complies | Complies Partially | Explain | Not Applicable X
AmRest policy on Director’s Remuneration does not allow any variable component.
60. That remuneration related to company results should take into account any reservations that might appear in
the external auditor’s report and that would diminish said results.
Complies | Complies Partially | Explain | Not Applicable X
AmRest policy on Director’s Remuneration does not allow any variable component.
61. That a material portion of executive directors' variable remuneration be linked to the delivery of shares or
financial instruments referenced to the share price.
Complies | Complies Partially | Explain | Not Applicable X
AmRest policy on Director’s Remuneration does not allow any variable component.
62. That once shares or options or financial instruments have been allocated under remuneration schemes,
executive directors be prohibited from transferring ownership or exercising options or rights until a term of at
least three years has elapsed.
An exception is made in cases where the director has, at the time of the transfer or exercise of options or rights,
a net economic exposure to changes in the share price for a market value equivalent to at least twice the amount
of his or her fixed annual remuneration through the ownership of shares, options or other financial instruments.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
118
The forgoing shall not apply to shares that the director may need to sell in order to meet the costs related to their
acquisition or, following a favourable assessment by the nomination and remuneration committee, to deal with
such extraordinary situations as may arise and so require.
Complies | Complies Partially | Explain | Not Applicable X
No executive director currently holds shares, options or financial instruments corresponding to remuneration schemes.
63. That contractual arrangements should include a clause allowing the company to demand reimbursement of
the variable remuneration components in the event that payment was not in accordance with the performance
conditions or when payment was made based on data subsequently shown to have been inaccurate.
Complies | Complies Partially | Explain | Not Applicable X
AmRest policy on Director’s Remuneration does not allow any variable component.
64. That payments for contract termination should not exceed an amount equivalent to two years of total annual
remuneration and should not be paid until the company has been able to verify that the director has fulfilled all
previously established criteria or conditions for payment.
For the purposes of this recommendation, payments for contractual termination will be considered to include any
payments the accrual of which or the obligation to pay which arises as a consequence of or on the occasion of
the termination of the contractual relationship between the director and the company, including amounts not
previously vested of long-term savings schemes and amounts paid by virtue of post-contractual non-competition
agreements.
Complies X | Complies Partially | Explanation | Not Applicable
H. FURTHER INFORMATION OF INTEREST
1. If there is any significant aspect regarding corporate governance in the company or other companies in the group that
has not been included in other sections of this report, but which it is necessary to include in order to provide a more
comprehensive and reasoned picture of the structure and governance practices in the company or its group, describe them
briefly below.
2. This section may also be used to provide any other information, explanation or clarification relating to previous sections
of the report, so long as it is relevant and not repetitive.
Specifically, indicate whether the company is subject to any corporate governance legislation other than that of Spain and,
if so, include any information required under this legislation that differs from the data required in this report.
In relation to section A.2:
Carlos Fernández González owns the majority of the share capital and voting rights in Grupo Far-Luca, S.A. de C.V., which
in turn controls Grupo Finaccess, S.A.P.I. de C.V. The latter owns 99.99% of the capital and voting rights of Finaccess
Capital, S.A. de C.V., which controls the two direct shareholders: FCapital Dutch, B.V. (100%) and FCapital Lux S.à.r.l.
(100%). Thus, the direct shareholders are controlled by an entity linked to Mr. Carlos Fernández González.
In relation to Mr. Carlos Fernández González, additionally, and as "other close ties" of the Board Members, the following
information is indicated:
D. Carlos Fernández González has a close relationship with Finaccess México, S.A. de C.V., Sociedad Operadora de
Fondos de Inversión. This company has a 0.53% interest in the capital stock of the company. The holder of the participation
is Latin 10, SA de CV, a fund managed independently by Finaccess Mexico, SA de CV.
In relation to section C.1.11:
Mr. José Parés Gutierrez’s positions in Restaurant Brands New Zealand and Finaccess Capital USA, Inc.; Luis Miguel
Alvarez’s positions in Restaurant Brands New Zealand, Grupo Finaccess, S.A.P.I. de C.V. and Compitalia, S.A. de C.V.;
Mr. Carlos Fernández Gonzalez’s positions in Restaurant Brands New Zealand, Grupo Finaccess, S.A.P.I. de C.V.,
Inmobiliaria Colonial Socimi, S.A. and Grupo Far-Luca, S.A. de C.V.; Mr. Emilio Fullaondo’s position in Restaurant Brands
New Zealand, Ms. Mónica Cueva Díaz’s position in Banco Santander Rio and Mr. Pablo Castilla’s position in Procurator
Litigation Advisors, S.A. are remunerated.
3. The company may also indicate whether it has voluntarily subscribed to other ethical or best practice codes, whether
international, sector-based, or other. In such case, name the code in question and the date on which the company
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Corporate Governance Report of listed companies
for the year ended 31 December 2021
119
subscribed to it. Specific mention must be made as to whether the company adheres to the Code of Good Tax Practices
of 20 July 2010
As AmRest is listed on the Warsaw Stock Exchange, the Company periodically reports on the degree of compliance with
the corporate governance recommendations required by applicable law through the publication of the Declaration of
Compliance with the Principles of Good Practice for Companies Listed on the Warsaw Stock Exchange.
This Annual Corporate Governance Report was approved by the Board of Directors of the company at the meeting held on
28 February, 2022.
State whether any directors voted against or abstained from voting on this report.
Yes | No X
Name or company name of the member of the Board of
Directors who has not voted for the approval of this report
Reasons (against,
abstention, non-attendance)
Explain the reasons
Data identify issuer
Ending date of reference financial year
31/12/2021
Tax Identification Code [C.I.F]
A88063979
Registered name
AmRest Holdings SE
Registered office
Paseo de la Castellana 163, Madrid
Annual Report on Director Remuneration
of listed companies
for the year ended 31 December 2021
AmRest Holding SE
Annual Report on Director Remuneration of listed companies
A. REMUNERATION POLICY OF THE COMPANY FOR THE CURRENT FINANCIAL YEAR ....................................................................................... 122
B. OVERALL SUMMARY OF HOW REMUNERATION POLICY WAS APPLIED DURING THE YEAR LAST ENDED.................................................... 125
C. ITEMISED INDIVIDUAL REMUNERATION ACCRUED BY EACH DIRECTOR ......................................................................................................... 129
D. OTHER INFORMATION OF INTEREST ................................................................................................................................................................... 135
Contents
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
122
A. REMUNERATION POLICY OF THE COMPANY FOR THE CURRENT
FINANCIAL YEAR
A1.1 Explain the current director remuneration policy applicable to the year in progress. To the extent that it is
relevant, certain information may be included in relation to the remuneration policy approved by the General
Shareholders’ Meeting, provided that these references are clear, specific and concrete.
Such specific determinations for the current year as the board may have made in accordance with the contracts
signed with the executive directors and with the remuneration policy approved by the General Shareholders’
Meeting must be described, as regards directors' remuneration both in their capacity as such and for executive
functions carried out.
In any case, the following aspects must be reported, as a minimum:
a) Description of the procedures and company bodies involved in determining, approving and applying the
remuneration policy and its terms and conditions.
b) Indicate and, where applicable, explain whether comparable companies have been taken into account in order to
establish the company's remuneration policy.
c) Information on whether any external advisors took part in this process and, if so, their identity.
d) Procedures set forth in the current remuneration policy for directors in order to apply temporary exceptions to the
policy, conditions under which those exceptions can be used and components that may be subject to exceptions
according to the policy.
At the recommendation of the Appointments and Remuneration Committee (the “ARC”), the Board of Directors of AmRest Holdings, SE (the
“Company”) drew up the “2021-2023 Directors Remuneration Policy” (the “Policy”) for its subsequent approval by the general shareholders’
meeting held on May 12th, 2021.
Basic principles of the Policy: (i) to assess the dedication, qualification and responsibility required by the position, remaining in line with the
market remuneration paid by peer companies; (ii) to balance the directors and shareholders’ interests and, in particular, alignment with the
values of the Company, its commitment to maximise its shareholder dividend and returns; (iii) to ensure that the remuneration system promotes
the achievement of the strategic goals set by the Company and its group; and (iv) to ensure commitment with the principle of full transparency
of the Directors’ Remuneration Policy, providing timely, sufficient and clear information in line with the applicable regulations and corporate
governance recommendations followed in international markets regarding directors’ remuneration.
Competent bodies: The GSM determines the maximum annual statutory remuneration for all the members of the Board of Directors. The
Board defines for each financial year the method and time of payment and agrees upon the exact allocation among its members of the overall
remuneration.
Structure of the Remuneration of Directors in their Capacity as such: The Board members, in their capacity as such, shall receive remuneration
comprising the following items: (i) a fixed payment; and (ii) allowances for attending the meetings of the Board of Directors and its delegate
or advisory committees.
(i) The maximum amount the Company will pay to its directors as a fixed annual amount in their capacity as board members for
each financial year in which this policy is in force shall not exceed the total sum of EUR 1,500,000.
Within the above mentioned maximum annual remuneration, the allocation among the Board members would be as follows: (i)
Member of the board: 75,000 euros for each director; (ii) Independent director member of the Executive Committee or of any of the
advisory Committees of the Board (irrespective of the number of Committees on which the independent director serves): 25,000
additional euros for each independent director.
(ii) Attendance Fees and Coverage of Risk and Civil Liability Benefits: Directors, in their capacity as such, may receive attendance
fees for every meeting of the Board of Directors or the committees they actually attend. The total annual amount of attendance fees
will depend on the number of meetings effectively held and on the number of directors attending the meetings. The Company may
pay the premiums of the insurance policies taken out with several insurance companies covering the death or disability of directors
caused by accidents or due to natural causes, as well as any potential civil liability against the directors in their position as such.
Aside from the remuneration indicated in the previous sections, the directors will not be entitled to receive any other remuneration from the
Company or its Group, regardless of the concept.
Structure of Remuneration of Executive Directors for the performance of executive duties
The Board of Directors will determine the remuneration that executive director will receive for performing the executive functions delegated or
entrusted to them by the Board of Directors, in addition to what executive director are entitled to receive. The remuneration of the executive
director according to the applicable policy as detailed in the following sections includes a fixed remuneration and a compensation package.
The main terms and conditions of the contracts should include, in particular: their term, compensation for early termination or termination of
the contractual relationship and exclusivity agreements, as well as post-contractual non-compete and length of service or loyalty clauses.
The Company analysed the policies of other Spanish listed entities as a reference when drafting the terms of the Remuneration Policy. AmRest
did not hire any external advisors to assist with the creation of the Policy.
No procedure is foreseen in the current Directors' Remuneration Policy in relation with the application of temporary exceptions to the policy.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
123
A1.2 Relative importance of variable remuneration items vis-à-vis fixed remuneration (remuneration mix) and the
criteria and objectives taken into consideration in their determination and to ensure an appropriate balance
between the fixed and variable components of the remuneration. In particular, indicate the actions taken by the
company in relation to the remuneration system to reduce exposure to excessive risks and to align it with the
long-term objectives, values and interests of the company, which will include, as the case may be, mention of the
measures taken to ensure that the long-term results of the company are taken into account in the remuneration
policy, the measures adopted in relation to those categories of personnel whose professional activities have a
material impact on the risk profile of the company and measures in place to avoid conflicts of interest.
Furthermore, indicate whether the company has established any period for the accrual or vesting of certain
variable remuneration items, in cash, shares or other financial instruments, any deferral period in the payment of
amounts or delivery of accrued and vested financial instruments, or whether any clause has been agreed reducing
the deferred remuneration not yet vested or obliging the director to return remuneration received, when such
remuneration has been based on figures that have since been clearly shown to be inaccurate.
The Directors' Remuneration Policy does not foresee the possibility of remunerating directors by means of variable remuneration.
A1.3 Amount and nature of fixed components that are due to be accrued during the year by directors in their
capacity as such.
The following fixed components are expected to be paid, subject to the approval of the mandatory bodies, to the directors in 2022:
Board member: 82,500 euros per director.
Independent director and member of the Executive Committee or any of the advisory committees: 27,500 additional euros per independent
director.
A1.4 Amount and nature of fixed components that are due to be accrued during the year for the performance of
senior management functions of executive directors.
There are no fixed components that are due to be accrued during the year for the performance of senior management functions of executive
directors other than the compensation package the Executive Chairman is entitled to in the amount of EUR 72,000 net per year.
A1.5 Amount and nature of any component of remuneration in kind that will accrue during the year, including, but
not limited to, insurance premiums paid in favour of the director.
In 2022, it is not expected that any remunerations in kind will be accrued.
A1.6 Amount and nature of variable components, differentiating between those established in the short and long
terms. Financial and non-financial, including social, environmental and climate change parameters selected to
determine variable remuneration for the current year, explaining the extent to which these parameters are related
to performance, both of the director and of the company, and to its risk profile, and the methodology, necessary
period and techniques envisaged to be able to determine the effective degree of compliance, at the end of the
year, with the parameters used in the design of the variable remuneration, explaining the criteria and factors
applied in regard to the time required and methods of verifying that the performance or any other conditions linked
to the accrual and vesting of each component of variable remuneration have effectively been met.
Indicate the range, in monetary terms, of the different variable components according to the degree of fulfilment
of the objectives and parameters established, and whether any maximum monetary amounts exist in absolute
terms.
The current Directors´ Remuneration Policy does not foresee any possible variable remuneration.
A1.7 Main characteristics of long-term savings schemes. Among other information, indicate the contingencies
covered by the scheme, whether it is a defined contribution or a defined benefit scheme, the annual contribution
that has to be made to defined contribution schemes, the benefits to which directors are entitled in the case of
defined benefit schemes, the vesting conditions of the economic rights of directors and their compatibility with
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
124
any other type of payment or indemnification for early termination or dismissal, or deriving from the termination
of the contractual relationship, in the terms provided, between the company and the director.
Indicate whether the accrual or vesting of any of the long-term savings plans is linked to the attainment of certain
objectives or parameters relating to the director's short- or long-term performance.
N/A
A1.8 Any type of payment or indemnification for early termination or dismissal, or deriving from the
termination of the contractual relationship, in the terms provided, between the company and the director,
whether at the company's or the director's initiative, as well as any type of agreement reached, such as
exclusivity, post-contractual non-competition, minimum contract term or loyalty, that entitles the director to
any kind of remuneration.
N/A
A1.9 Indicate the conditions that the contracts of executive directors performing senior management
functions should contain. Among other things, information must be provided on the duration, limits on
amounts of indemnification, minimum contract term clauses, notice periods and payment in lieu of these
notice periods, and any other clauses relating to signing bonuses, as well as compensation or golden
parachute clauses for early termination of the contractual relationship between the company and the
executive director. Include, among others, the pacts or agreement on non-competition, exclusivity, minimum
contract terms and loyalty, and post-contractual non-competition, unless these have been explained in the
previous section.
The contract with the current Executive Director is for an indefinite duration, it does not provide indemnification or permanence clause.
The contract does not establish a specific notice period for its termination, which may take place through unilateral resolution by either party,
mutual agreement or by decision of either party in the event of non-compliance by the other, leaving safe in this case, the claim that for damages
may correspond to the other party.
The contract does not foresee clauses relating to hiring bonuses, indemnities or shields for early resolution or termination of the contractual
relationship between the company and the executive director, nor pacts or agreements of non-competition, exclusivity, permanence or loyalty
and post-contractual non-competition.
The contract provides a standard confidentiality clause.
A1.10 The nature and estimated amount of any other supplementary remuneration that will be accrued by directors
in the current year in consideration for services rendered other than those inherent in their position.
As at the date of this report, no supplementary remuneration as consideration for services other than those intrinsic to the role are foreseen.
A1.11 Other items of remuneration such as any deriving from the company's granting the director advances,
loans or guarantees or any other remuneration.
No advance payments, loans or guarantees imposing contrary common or market conditions are expected to be granted to any director this
fiscal year.
A1.12 The nature and estimated amount of any other planned supplementary remuneration to be accrued by
directors in the current year that is not included in the foregoing sections, whether paid by the company or by
another group company.
There are no further remuneration concepts to those listed above.
A.2 Explain any significant change in the remuneration policy applicable in the current year resulting from:
a) A new policy or an amendment to a policy already approved by the General Meeting.
b) Significant changes in the specific determinations established by the board for the current year regarding the
remuneration policy in force with respect to those applied in the previous year.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
125
c) Proposals that the Board of Directors has agreed to submit to the general shareholders’ meeting to which
this annual report will be submitted and for which it is proposed that they be applicable to the current year.
The “2021-2023 Directors Remuneration Policy” will apply to this year. Notwithstanding, pursuant to the amendment introduced in the Capital
Spanish Companies Act by Law 5/2021, the “2021-2023 Directors´ Remuneration Policy” is expected to be modified during 2022.
A.3 Identify the direct link to the document containing the company's current remuneration policy, which
must be available on the company's website.
The “2021-2023 Directors Remuneration Policy” is available on the Company’s website at https://www.amrest.eu/es/inversores/politica-e-
informes-anual-de-remuneraciones-de-los-consejeros
A.4 Explain, taking into account the data provided in Section B.4, how account has been taken of the voting
of shareholders at the General Shareholders’ Meeting to which the annual report on remuneration for the
previous year was submitted on a consultative basis.
The annual report on remuneration for the previous financial year has been submitted to the consultative vote of the Annual General Meeting
of Shareholders, with positive outcome, with 99.977 % of the votes in favour and 0.023 % against.
This result reflects the broad support the annual report on directors' remuneration received from the Company's shareholders.
B. OVERALL SUMMARY OF HOW REMUNERATION POLICY WAS APPLIED
DURING THE YEAR LAST ENDED
B1.1 Explain the process followed to apply the remuneration policy and determine the individual remuneration
contained in Section C of this report. This information will include the role played by the remuneration committee,
the decisions taken by the Board of Directors and the identity and role of any external advisors whose services
may have been used in the process of applying the remuneration policy in the year last ended.
The ARC drafted the “2021-2023 Directors´ Remuneration Policy” and issued it to the Board of Directors, with the Policy then approved at the
AmRest general shareholders’ meeting held on 12 May 2021.
In order for the Remuneration Policy to come into force during the 2021 fiscal year, the ARC performed the following duties: (i) to propose to
the Board of Directors: (a) the remuneration policy for the directors; (b) the individual remuneration for the executive director and other
conditions of its contract, ensuring that they are followed; and (c) the basic conditions of senior executive contracts; (ii) to analyse, pose and
periodically review the remuneration policy applied to senior executives and the management team, including the remuneration packages with
shares and their application, and ensure that it is proportionate to that paid to the personnel of the company; (iii) to ensure compliance with the
remuneration policy established by the Company; and (iv) to assist the Board in the preparation of the report on the remuneration policy and
submit to the Board any other remuneration reports foreseen in Board’s internal regulation, verifying the information about the directors and
senior executives’ remuneration established in different corporate documents, including the annual report on directors’ remuneration.
The general shareholders’ meeting held on 12 May 2021 agreed to set the maximum fixed annual remuneration for the entire group of Board
members at EUR 1,500,000. In turn, the meeting delegated the duty of allocating such amount among the Board members to the Board itself,
with said allocation to be based on the duties and respons bilities of each member, their involvement in the numerous committees and other
objective elements deemed relevant.
No external advisors have been used in the process to apply the remuneration policy in the year ended.
B1.2 Explain any deviation from the procedure established for the application of the remuneration policy that has
occurred during the year.
There has been no deviation in the application of the “2021-2023 Directors´ Remuneration Policy”.
B1.3 Indicate whether any temporary exception has been applied to the remuneration policy and, if so, explain the
exceptional circumstances that have led to the application of these exceptions, the specific components of the
remuneration policy affected and the reasons why the entity believes that these exceptions have been necessary
to serve the long-term interests and sustainability of the society as a whole or ensure its viability. Similarly,
quantify the impact that the application of these exceptions has had on the remuneration of each director over the
year.
No temporary exception has been applied to the remuneration policy.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
126
B.2 Explain the different actions taken by the company in relation to the remuneration system and how they have
contributed to reducing exposure to excessive risks, aligning it with the long-term objectives, values and interests
of the company, including a reference to the measures adopted to ensure that the long-term results of the company
have been taken into consideration in the remuneration accrued. Ensure that an appropriate balance has been
attained between the fixed and variable components of the remuneration, the measures adopted in relation to
those categories of personnel whose professional activities have a material effect on the company’s risk profile
and the measures in place to avoid any possible conflicts of interest.
The measures or actions taken by the Company in relation to the remuneration system in a bid to reduce exposure to excessive risks and
align the system to the long-term objectives, values and interests of the Company are summarised as follows:
(i) The executive director’s remuneration can only be of fixed nature, it may vary based on the specific responsibilities and nature
of the duties performed and will be reviewed annually by the Board of Directors at the request of the Appointments and
Remuneration Committee. In any event, said fixed remuneration must remain in line with the market remuneration paid by peer
companies;
(ii) To balance the directors and shareholders’ interests and, in particular, alignment with the values of the Company, its commitment
to maximise its shareholder dividend and returns; and
(iii) To align the policy to economic conditions and the international landscape.
B.3 Explain how the remuneration accrued and consolidated over the financial year complies with the provisions
of the current remuneration policy and, in particular, how it contributes to the company’s long-term and
sustainable performance.
Furthermore, report on the relationship between the remuneration obtained by the directors and the results or
other performance measures of the company in the short and long term, explaining, if applicable, how variations
in the company's performance have influenced changes in directors' remuneration, including any accrued
remuneration payment of which has been deferred, and how such remuneration contributes to the short- and long-
term results of the company.
The remuneration owed in relation to the 2021 fiscal year fulfils the terms of the Remuneration Policy insofar as the amounts accrued fall
within the maximum annual amount approved by the general shareholders’ meeting and correspond to the allocation agreed by the Board of
Directors. Moreover, the numerous concepts set out in the Remuneration Policy have been covered in the sense that the directors’
remuneration in their position as such comprised only a fixed amount, and in the case of the Executive Chairman remuneration, a
compensation package.
Directors' remuneration is austere and balanced, reflecting the Company's corporate and personal ethics, thus contr buting to its sustainability
and results.
B.4 Report on the result of the consultative vote at the General Shareholders’ Meeting on remuneration in the
previous year, indicating the number of votes in favour, votes against, abstentions and blank ballots:
Number
% of total
Votes cast
150,884,919
68.723
Number
% of total cast
Votes against
34,607
0.023
Votes in favour
150,850,332
99.977
Blank ballots
0
0
Abstentions
0
0
Observations
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
127
B.5 Explain how the fixed components accrued and vested during the year by the directors in their capacity as
such were determined, their relative proportion with regard to each director and how they changed with respect
to the previous year
B.6 Explain how the salaries accrued and vested by each of the executive directors over the past financial year for
the performance of management duties were determined, and how they changed with respect to the previous year.
B.7 Explain the nature and the main characteristics of the variable components of the remuneration systems
accrued and vested in the year last ended.
In particular:
a) Identify each of the remuneration plans that determined the different types of variable remuneration accrued by
each of the directors in the year last ended, including information on their scope, date of approval, date of
implementation, any vesting conditions that apply, periods of accrual and validity, criteria used to evaluate
performance and how this affected the establishment of the variable amount accrued, as well as the measurement
criteria used and the time needed to be able to adequately measure all the conditions and criteria stipulated,
explaining the criteria and factors applied in regard to the time required and the methods of verifying that the
performance or any other kind of conditions linked to the accrual and vesting of each component of variable
remuneration have effectively been met.
b) In the case of share options and other financial instruments, the general characteristics of each plan must include
information on the conditions both for acquiring unconditional ownership (vesting) of these options or financial
instruments and for exercising them, including the exercise price and period.
c) Each director that is a beneficiary of remunerations systems or plans that include variable remuneration, and his
or her category (executive director, external proprietary director, external independent director or other external
director).
d) Information is to be provided on any periods for accrual, vesting or deferment of payment of vested amounts
applied and/or the periods for retention/unavailability of shares or other financial instruments, if any.
Explain the short-term variable components of the remuneration systems
N/A
Explain the long-term variable components of the remuneration systems
N/A
B.8 Indicate whether certain variable components have been reduced or clawed back when, in the former case,
payment of non-vested amounts has been deferred or, in the latter case, they have vested and been paid, on the
The following fixed components for directors in their position as such accrued during the 2021 fiscal year:
Member of the board: 75,000 euros for each director.
Independent director member of the Executive Committee or of any of the advisory Committees of the Board: 25,000 additional euros for each
independent director.
Executive Chairman: compensation package in the amount of Eur 72,000, net, annually.
The fixed components accrued during the year by the directors have not changed with respect to the previous year except for the Executive
Chairman compensation package, which was first implemented in 2021 since the Chairman was granted executive powers in November 2020,
effective January 2021.
It should be noted that in 2020, exceptionally, given the circumstances created by the Covid-19 pandemic, the Board of Directors agreed on
March 26th to reduce its remuneration by 50% and to defer its payment until December 2020.
There are no salaries accrued for the executive directors over the past financial year related to the performance of management duties.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
128
basis of data that have subsequently been clearly shown to be inaccurate. Describe the amounts reduced or
clawed back through the application of the "malus" (reduction) or clawback clauses, why they were implemented
and the years to which they refer.
B.9 Explain the main characteristics of the long-term savings schemes where the amount or equivalent annual
cost appears in the tables in Section C, including retirement and any other survivor benefit, whether financed in
whole or in part by the company or through internal or external contributions, indicating the type of plan, whether
it is a defined contribution or defined benefit plan, the contingencies covered, the conditions on which the
economic rights vest in favour of the directors and their compatibility with any type of indemnification for early
termination or cessation of the contractual relationship between the company and the director.
B.10 Explain, where applicable, the indemnification or any other type of payment deriving from the early cessation,
whether at the company's or the director's initiative, or from the termination of the contract in the terms provided
therein, accrued and/or received by directors during the year last ended.
B.11 Indicate whether there have been any significant changes in the contracts of persons exercising senior
management functions, such as executive directors, and, if so, explain them. In addition, explain the main
conditions of the new contracts signed with executive directors during the year, unless these have already been
explained in Section A.1.
B.12 Explain any supplementary remuneration accrued by directors in consideration of the provision of services
other than those inherent in their position.
B.13 Explain any remuneration deriving from advances, loans or guarantees granted, indicating the interest rate,
their key characteristics and any amounts returned, as well as the obligations assumed on their behalf by way of
guarantee.
B.14 Itemise the remuneration in kind accrued by the directors during the year, briefly explaining the nature of the
various salary components.
B.15 Explain the remuneration accrued by any director by virtue of payments made by the listed company to a
third company in which the director provides services when these payments seek to remunerate the director’s
services to the company.
B.16 Explain and detail the amounts accrued in the year in relation to any other remuneration concept other than
that set forth above, whatever its nature or the group entity that pays it, including all benefits in any form, such as
when it is considered a related-party transaction or, especially, when it significantly affects the true image of the
total remuneration accrued by the director. Explain the amount granted or pending payment, the nature of the
Not applicable since there are no variable components in directors’ remuneration.
Not applicable since directors are not entitled to benefit from long-term savings schemes.
N/A
N/A
No supplementary remuneration as consideration for services other than those intrinsic to the role were paid to the directors in 2021.
No advance payments, loans or guarantees imposing contrary common or market conditions were granted to any director in 2021.
There was not any remuneration in kind accrued by the directors during the year.
No payments of this type were made in 2021.
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
129
consideration received and the reasons for those that would have been considered, if applicable, that do not
constitute remuneration to the director or in consideration for the performance of their executive functions and
whether or not has been considered appropriate to be included among the amounts accrued under the “Other
concepts” heading in Section C.
C. ITEMISED INDIVIDUAL REMUNERATION ACCRUED BY EACH DIRECTOR
C.1 Complete the following tables regarding the individual remuneration of each director (including remuneration
received for performing executive duties) accrued during the year.
a) Remuneration from the reporting company:
i) Remuneration accruing in cash (thousands of euros)
Observations
No remuneration under concepts other than those listed above was paid out in 2021.
Name
Type
Period of accrual in year n
José Parés Gutiérrez
Executive
From 01/01/2021 to 31/12/2021
Luis Miguel Álvarez Pérez
Proprietary
From 01/01/2021 to 31/12/2021
Carlos Fernández González
Proprietary
From 01/01/2021 to 31/12/2021
Pablo Castilla Reparaz
Independent
From 01/01/2021 to 31/12/2021
Romana Sadurska
Independent
From 01/01/2021 to 31/12/2021
Emilio Fullaondo Botella
Independent
From 01/01/2021 to 31/12/2021
Mónica Cueva Díaz
Independent
From 01/01/2021 to 31/12/2021
Name
Fixed
remunera
tion
Attendan
ce fees
Remuner
ation for
members
hip of
board
committe
es
Salary
Short-
term
variable
remuner
ation
Long-
term
variable
remuner
ation
Indemnifi
cation
Other
items
Total
year n
Total
year n-1
José Parés
Gutiérrez
75
120
195
38
Luis Miguel
Álvarez Pérez
75
75
38
Carlos
Fernández
González
75
75
38
Pablo Castilla
Reparaz
75
25
100
50
Romana
Sadurska
75
25
100
50
Emilio
Fullaondo
Botella
75
25
100
50
Mónica Cueva
Díaz
75
25
100
50
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
130
In 2020, due to the exceptional circumstances caused by the Covid-19 pandemic, the Board lowered its remuneration by 50%.
ii) Table of changes in share-based remuneration schemes and gross profit from vested shares or
financial instruments
Observations
In 2020, due to the exceptional circumstances caused by the Covid-19 pandemic, the Board lowered its remuneration by 50%.
iii) Long-term savings schemes
Remuneration from vesting of rights
to savings schemes
Director 1
Observations
Name
Name of
plan
Financial instruments
at start of year n
Financial instruments
granted during year n
Financial instruments vested
during the year
Instrume
nts
matured
but not
exercise
d
Financial instruments
at end of year n
No. of
instrume
nts
No. of
equivalen
t shares
No. of
instrume
nts
No. of
equivalen
t shares
No. of
instrume
nts
No. of
equivalen
t / vested
shares
Price of
vested
shares
EBITDA
from
vested
shares or
financial
instrume
nts
(thousan
ds of
euros)
No.
of
instrume
nts
No. of
instrume
nts
No. of
equivalen
t shares
Director 1
Plan 1
Plan 2
Contribution for the year by the company
(thousands of euros)
Amount of accrued funds
(thousands of euros)
Name
Savings schemes with vested
economic rights
Savings schemes with non-
vested economic rights
Year n
Year n-1
Year n
Year n-1
Year n
Year n-1
Schemes
with vested
economic
rights
Schemes
with non-
vested
economic
rights
Schemes
with vested
economic
rights
Schemes
with non-
vested
economic
rights
Director 1
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
131
iv) Details of other items
Name
Concept
Amount of remuneration
Director 1
Observations
b) Remuneration of directors of the listed company for seats on the boards of other subsidiary companies:
i) Remuneration accruing in cash (thousands of euros)
Name
Fixed
remunera
tion
Attendan
ce fees
Remuner
ation for
members
hip of
board
committe
es
Salary
Short-
term
variable
remuner
ation
Long-
term
variable
remuner
ation
Indemnifi
cation
Other
items
Total
year n
Total
year n-1
Director 1
Director 2
Observations
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
132
ii) Table of changes in share-based remuneration schemes and gross profit from vested shares or
financial instruments
Observations
iii) Long-term savings schemes
Remuneration from vesting of rights
to savings schemes
Director 1
Observations
Name
Name of
plan
Financial instruments
at start of year n
Financial instruments
granted during year n
Financial instruments vested during the year
Instrume
nts
matured
but not
exercise
d
Financial instruments
at end of year n
No. of
instrume
nts
No. of
equivalen
t shares
No. of
instrume
nts
No. of
equivalen
t shares
No. of
instrume
nts
No. of
equivalen
t / vested
shares
Price of
vested
shares
EBITDA
from
vested
shares or
financial
instrume
nts
(thousan
ds of
euros)
No.
of
instrume
nts
No. of
instrume
nts
No. of
equivalen
t shares
Director 1
Plan 1
Plan 2
Contribution for the year by the company
(thousands of euros)
Amount of accrued funds
(thousands of euros)
Name
Savings schemes with vested
economic rights
Savings schemes with non-
vested economic rights
Year n
Year n-1
Year n
Year n-1
Year n
Year n-1
Schemes
with vested
economic
rights
Schemes
with non-
vested
economic
rights
Schemes
with vested
economic
rights
Schemes
with non-
vested
economic
rights
Director 1
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
133
iv) Details of other items
Name
Concept
Amount of remuneration
Director 1
Observations
c) Summary of remuneration (thousands of euros):
This summary must include the amounts corresponding to all the remuneration items included in this report that have
accrued to each director, in thousands of euros.
Observations
Remuneration accruing in the Company
Remuneration accruing in group companies
Name
Total
cash
remuner
ation
EBITDA
from
vested
shares or
financial
instrume
nts
Remuner
ation by
way of
savings
systems
Other
items of
remuner
ation
Total in
year n,
compan
y
Total
cash
remuner
ation
Gross
benefit
of
vested
shares
or
financial
instrume
nts
Remune
ration by
way of
savings
systems
Other
items of
remuner
ation
Total in
year n.
group
Total in
year n,
compan
y +
group
José
Parés
Gutiérrez
75
120
195
Luis
Miguel
Álvarez
Pérez
75
75
Carlos
Fernánde
z
González
75
75
Pablo
Castilla
Reparaz
100
100
Romana
Sadurska
100
100
Emilio
Fullaond
o Botella
100
100
Mónica
Cueva
Díaz
100
100
Total:
625
120
745
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
134
C.2 Indicate the evolution in the last five years of the amount and percentage variation of the remuneration accrued
by each of the directors of the listed company who have held this position during the year, the consolidated results
of the company and the average remuneration on an equivalent basis with regard to full-time employees of the
company and its subsidiaries that are not directors of the listed company.
Observations
The Company moved its registered office to Spain and set up a Board of Directors in March 2018. Therefore, there is no comparable information
for year n-4 (2017).
Ms. Romana Sadurska and Mr. Emilio Fullaondo joined AmRest Board in May 2019. Ms. Mónica Cueva joined in July 2020.
In 2020, due to the exceptional circumstances caused by the Covid-19 pandemic, the Board lowered its remuneration by 50%. In 2021 there
was no increase in directors’ remuneration but just the reinstatement of the ordinary remuneration, which has been maintained with no
modification since year 2017.
Total amounts accrued and % annual variation
Year n
%
variation
n/n-1
Year n-1
%
variation
n-1/n-2
Year n-2
%
variation
n-2/n-3
Year n-3
%
variation
n-3/n-4
Year n-4
Executive directors
José Parés Gutiérrez
195
>100.00%
38
-50 00 %
75
-
75
External directors
Luis Miguel Álvarez
Pérez
75
100.00%
38
-50 00 %
75
-
75
Carlos Fernández
González
75
100.00%
38
-50 00 %
75
-
75
Pablo Castilla
Reparaz
100
100.00%
50
-50.00%
100
-
100
Romana Sadurska
100
100.00%
50
-16.67%
60
-
-
Emilio Fullaondo
Botella
100
100.00%
50
-16.67%
60
-
-
Mónica Cueva Díaz
100
100.00%
50
-
-
-
-
Consolidated results
of the company
57,875
>100.00%
-201,462
<-100.00%
93,358
62.26%
57,537
Average employee
remuneration
10
11%
9
-10%
10
25%
8
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Annual Report on Director Remuneration of listed companies
for the year ended 31 December 2021
135
D. OTHER INFORMATION OF INTEREST
If there are any significant issues relating to directors’ remuneration that it has not been possible to include in the
foregoing sections of this report, but which it is necessary to include in order to provide more comprehensive and
reasoned information on the remuneration structure and practices of the company with regard to its directors, list
them briefly.
This annual remuneration report was approved
by the Board of Directors of the company in its meeting of February 28, 2022.
Indicate whether any director voted against or abstained from approving this report.
Yes No X
Name or company name of any member of the Board
of Directors not voting in favour of the approval of this report
Reasons (against,
abstention,
non attendance)
Explain the reasons
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
136
Signatures of the Board of Directors
Madrid, 28 February 2022
José Parés Gutiérrez
Chairman of the Board
Luis Miguel Álvarez Pérez
Vice-Chairman of the Board
Carlos Fernández González
Member of the Board
Romana Sadurska
Member of the Board
Pablo Castilla Reparaz
Member of the Board
Mónica Cueva Díaz
Member of the Board
Emilio Fullaondo Botella
Member of the Board
(all figures in EUR millions unless stated otherwise)
AMREST GROUP Director’s Report
for the year ended 31 December 2021
137
Statement of responsibility of AMREST HOLDINGS, SE
The members of the Board of Directors of AMREST HOLDINGS, SE (“AmRest” or the “Company”) on its meeting held on
28 February 2022, and according to article 118 of the reinstated text of the Spanish Securities Markets Act approved by
Royal Legislative Decree 4/2015 of 23 October as well as to article 8.1. b) of Royal Decree 1362/2007, of 19 October,
declare that, as far as they are aware, the individual Annual Accounts of the Company, as well as the consolidated ones
with its dependent companies, corresponding to the financial year ended 31 December 2021, drawn up by the Board of
Directors on the referred meeting of 28 February 2022 and prepared in accordance with the applicable accounting
principles, offer a true and fair image of the equity, the financial situation and the results of the Company and the companies
within the consolidation taken as a whole, and the complementary management reports of the individual and consolidated
Annual Accounts include an accurate analysis of the business evolution and results and of the position of AmRest and the
companies within the consolidation taken as a whole, together with the main risks and uncertainties which they face.
Madrid, on 28 February 2022
AmRest Holding SE
2846 Madrid, Spain
CIF A88063979 | +34 917 99 16 50 | amrest.eu
pwc
AmRest Holdings, SE
Consolidated Non-Financial Information Statement
pwc
Independent
verification
report
To
the
shareholders
of
AmRest
Holdings,
SE:
Pursuant
to
article
49
of
the
Code
of
Commerce,
we
have
verified,
with
the
scope
of
a
limited
assurance
engagement,
the
Consolidated
Non-Financial
Information
Statement
(
“
NFIS
”
)
for
the
year
ended
31
December
2021
of
AmRest
Holdings,
SE
(Parent
company)
and
subsidiaries
(hereinafter
"AmRest"
or
the
Group)
which
forms
part
of
the
accompanying
Group
consolidated
management
report.
Responsibility
of
the
directors
of
the
Parent
company
The
preparation
of
the
NFIS
included
in
AmRest's
consolidated
management
report
and
the
content
thereof,
are
the
responsibility
of
the
directors
of
AmRest
Holdings,
SE.
The
NFIS
has
been
drawn
up
in
accordance
with
the
provisions
of
current
mercantile
legislation
and
following
the
criteria
of
the
Sustainability
Reporting
Standards
of
the
Global
Reporting
Initiative
(
“
GRI
Standards
”
)
selected
as
per
the
details
provided
for
each
matter
in
the
“
GRI
Standards
content
index
”
of
the
consolidated
management
report.
This
responsibility
also
includes
the
design,
implementation
and
maintenance
of
the
internal
control
considered
necessary
to
allow
the
NFIS
to
be
free
of
material
misstatement
due
to
fraud
or
error.
The
directors
of
AmRest
Holdings,
SE
are
also
responsible
for
defining,
implementing,
adapting
and
maintaining
the
management
systems
from
which
the
information
required
to
prepare
the
NFIS
is
obtained.
Our
independence
and
quality
control
We
have
complied
with
the
independence
requirements
and
other
ethical
requirements
of
the
International
Code
of
Ethics
for
Professional
Accountants
(including
International
Independence
Standards)
issued
by
the
International
Ethics
Standards
Board
for
Accountants
(
“
IESBA
Code
”
)
which
is
founded
on
fundamental
principles
of
integrity,
objectivity,
professional
competence
and
due
care,
confidentiality
and
professional
behaviour.
Our
firm
applies
International
Standard
on
Quality
Control
1
(ISQC
1)
and
accordingly
maintains
a
comprehensive
system
of
quality
control,
including
documented
policies
and
procedures
regarding
compliance
with
ethical
requirements,
professional
standards
and
applicable
legal
and
regulatory
requirements.
The
engagement
team
consisted
of
professionals
specialising
in
Non-financial
Information
reviews,
specifically
in
information
on
economic,
social
and
environmental
performance.
PricewaterhouseCoopers
Auditores,
S.L.,
Torre
PwC,
P°
de
la
Castellana
259
B,
28046
Madrid,
España
Tel:
+34
915
684
400
/
+34
902
021
ill,
Fax:
+34
915
685
400,
www.pwc.es
1
R.
M.
Madrid,
hoja
87.250-1,
folio
75,
tomo
9.267,
libro
8.054,
sección
3
a
Inscrita
en
el
R.O.A.C.
con
el
número
S0242
-
CIF:
B-79
031290
JL
pwc
Our
responsibility
Our
responsibility
is
to
express
our
conclusions
in
a
limited
assurance
independent
report
based
on
the
work
we
have
performed.
We
carried
out
our
work
in
accordance
with
the
requirements
laid
down
in
the
current
International
Standard
on
Assurance
Engagements
(ISAE)
3000
Revised,
Assurance
Engagements
other
than
Audits
or
Reviews
of
Historical
Financial
Information
(ISAE
3000
Revised)
issued
by
the
International
Auditing
and
Assurance
Standards
Board
(IAASB)
of
the
International
Federation
of
Accountants
(IFAC)
and
in
the
Guidelines
for
verification
engagements
of
the
Non-
Financial
Information
Statement
issued
by
the
Spanish
Institute
of
Auditors
(
“
Instituto
de
Censores
Jurados
de
Cuentas
de
España
”
).
In
a
limited
assurance
engagement,
the
procedures
performed
vary
in
nature
and
timing
of
execution,
and
are
less
extensive,
than
those
carried
out
in
a
reasonable
assurance
engagement
and
accordingly,
the
assurance
provided
is
also
lower.
Our
work
consisted
of
posing
questions
to
management
as
well
as
to
the
various
units
of
Group
that
were
involved
in
the
preparation
of
the
NFIS,
of
the
review
of
the
processes
for
compiling
and
validating
the
information
presented
in
the
NFIS,
and
in
the
application
of
certain
analytical
procedures
and
review
procedures
on
a
sample
basis,
as
described
below:
•
Meetings
with
the
AmRest
Holdings,
SE
personnel
to
understand
the
business
model,
policies
and
management
approaches
applied,
principal
risks
relating
to
these
matters
and
to
obtain
the
information
required
for
the
external
review.
•
Analysis
of
the
scope,
relevance
and
integrity
of
the
content
of
the
NFIS
for
the
year
2021,
based
on
the
materiality
analysis
carried
out
by
Group
and
described
in
section
“
Materiality
analysis
”
,
taking
into
account
the
content
required
by
current
mercantile
legislation.
•
Analysis
of
the
procedures
used
to
compile
and
validate
the
information
presented
in
the
NFIS
for
the
year
2021.
•
Review
of
information
relating
to
risks,
policies
and
management
approaches
applied
in
relation
to
material
matters
presented
in
the
NFIS
for
the
year
2021.
•
Verification,
by
means
of
sample
testing,
of
the
information
relating
to
the
content
of
the
NFIS
for
the
year
2021
and
that
it
was
adequately
compiled
using
data
provided
by
the
sources
of
the
information.
•
Obtaining
a
management
representation
letter from
the
directors
and
management
of
the
Parent
company.
Basis
for
qualified
conclusions
The
Group
does
not
include
in
the
scope
of
its
NFIS
the
information
related
to
the
frequency
and
severity
rates
in
relation
to
work
accidents
for
the
years
2021
and
2020.
Qualified
conclusion
Based
on
the
procedures
performed
in
our
verification
and
the
evidence
we
have
obtained,
except
for
the
effects
of
the
matter
referred
to
in
the
section
“
Basis
of
qualified
conclusion
”
,
nothing
has
come
to
our
attention
that
causes
us
to
believe
that
AmRest
Holdings,
SE
and
its
subsidiaries
NFIS
for
the
year
ended
31
December
2021
is
not
prepared,
in
all
material
respects,
in
accordance
with
the
provisions
of
current
mercantile
legislation
and
following
the
criteria
of
the
GRI
Standards
selected
as
per
the
details
provided
for
each
matter
in
the
“
GRI
Standards
content
index
”
of
the
consolidated
management
report.
2
pwc
Emphasis
of
matter
The
Regulation
(EU)
2020/852
of
the
European
Parliament
and
of
the
Council
of
18
June
2020
relating
to
the
establishment
of
a
framework
to
facilitate
sustainable
investments,
establishes
the
obligation
to
disclose
information
on
the
manner
and
extent
to
which
the
company's
activities
are
associated
with
economic
activities
that
are
considered
to
be
environmentally
sustainable
in
relation
to
the
objectives
of
climate
change
mitigation
and
adaptation
to
climate
change
for
the
first
time
for
the
year
2021,
provided
that
the
NFIS
is
published
as
of
1
January
2022.
Consequently,
comparative
information
on
this
matter
has
not
been
included.
In
addition,
information
has
been
included
in
respect
of
the
criteria
that
the
directors
of
AmRest
have
chosen
to
apply
that,
in
their
opinion,
best
allow
compliance
with
the
new
obligation
and
that
are
defined
in
note
AmRest
Taxonomy
disclosure
of
the
accompanying
consolidated
management
report.
Our
conclusion
has
not
been
modified
in
relation
to
this
matter.
Other
matters
On
25
February
2021
other
verifiers
issued
their
independent
verification
report
of
the
Consolidated
Non-Financial
Information
Statement
and
subsidiaries
for
the
year
2021
in
which
they
expressed
a
favorable
conclusion.
Use
and
distribution
This
report
has
been
drawn
up
in
response
to
the
requirement
established
in
current
Spanish
mercantile
legislation
and
therefore
may
not
be
suitable
for
other
purposes
and
jurisdictions.
PricewaterhouseCoopers
Auditores,
S.L.
INSTITUTO
DE
CENSORES
JURADOS
DE
CUENTAS
DE
ESPAÑA
PRICEWATERHOUSECOOPERS
AUDITORES,
S.L.
2022
Núm.
01/22/01172
SELLO
CORPORATIVO:
30,00
EUR
Sello
distintivo
de
otras
actuaciones
3