259400T6ZDQIMDBGDN42-20221231-en

AMREST GROUP Consolidated Financial Statements

for the year ended 31 December 2022

Contents


Consolidated income statement for the year ended 31 December 2022 ............................................................................................................................................	5
Consolidated statement of comprehensive income for the year ended 31 December 2022 ...........................................................................................................	6
Consolidated statement of financial position at 31 December 2022 .....................................................................................................................................................	7
Consolidated statement of cash flows for the year ended 31 December 2022 .................................................................................................................................	8
Consolidated statement of changes in equity for the year ended 31 December 2022 ......................................................................................................................	9
Notes to the Consolidated Financial Statements .....................................................................................................................................................................................	10
1. General information on AmRest Group ................................................................................................................................................................................	10
2. Group Structure .......................................................................................................................................................................................................................	13
3. Basis of preparation ................................................................................................................................................................................................................	15
4. Use of judgements and estimates ........................................................................................................................................................................................	16
5. Segment reporting ...................................................................................................................................................................................................................	17
6. Revenues ..................................................................................................................................................................................................................................	19
7. Operating costs and losses ....................................................................................................................................................................................................	19
8. Other operating income/expenses ........................................................................................................................................................................................	20
9. Impairment losses ...................................................................................................................................................................................................................	20
10. Finance income .....................................................................................................................................................................................................................	20
11. Finance costs .........................................................................................................................................................................................................................	21
12. Income taxes ..........................................................................................................................................................................................................................	21
13. Property, plant and equipment ............................................................................................................................................................................................	23


14. Leases .....................................................................................................................................................................................................................................	24
15. Intangible assets ....................................................................................................................................................................................................................	25
16. Goodwill ..................................................................................................................................................................................................................................	26
17. Impairment of non-current assets .......................................................................................................................................................................................	27
18. Other non-current assets .....................................................................................................................................................................................................	31
19. Inventories ..............................................................................................................................................................................................................................	31
20. Trade and other receivables ................................................................................................................................................................................................	31
21. Other current assets .............................................................................................................................................................................................................	31
22. Cash and cash equivalents ..................................................................................................................................................................................................	31
23. Equity .......................................................................................................................................................................................................................................	32
24. Dividends paid and received ...............................................................................................................................................................................................	36
25. Non-controlling interests .......................................................................................................................................................................................................	37
26. Earnings per share ................................................................................................................................................................................................................	39
27. Borrowings ..............................................................................................................................................................................................................................	39
28. Collateral on borrowings .......................................................................................................................................................................................................	41
29. Employee benefits and share based payments ...............................................................................................................................................................	42
30. Provisions ...............................................................................................................................................................................................................................	46
31. Tax risks and uncertain tax positions .................................................................................................................................................................................	46
32. Trade and other liabilities .....................................................................................................................................................................................................	48
33. Future commitments and contingent liabilities ..................................................................................................................................................................	48
34. Transactions with related entities ........................................................................................................................................................................................	48
35. Financial instruments ............................................................................................................................................................................................................	49
36. Audit fees ................................................................................................................................................................................................................................	52
37. Events after the reporting period ........................................................................................................................................................................................	52
38. Significant accounting policies ............................................................................................................................................................................................	53
a. Basis of consolidation ......................................................................................................................................................................................................	53
b. Foreign currency ..............................................................................................................................................................................................................	53
c. Non-current assets held for sale and discontinued operations .................................................................................................................................	54
d. Revenues ..........................................................................................................................................................................................................................	54
e. Government grants ..........................................................................................................................................................................................................	55
f. Income tax ..........................................................................................................................................................................................................................	55
g. Leases ...............................................................................................................................................................................................................................	56
h. Property, plant and equipment .......................................................................................................................................................................................	56
i. Franchise, license agreements and other fees ............................................................................................................................................................	57
j. Intangible assets ................................................................................................................................................................................................................	57
k. Goodwill .............................................................................................................................................................................................................................	58
l. Impairment of non-financial assets .................................................................................................................................................................................	58
m. Investment properties .....................................................................................................................................................................................................	59
n. Inventories .........................................................................................................................................................................................................................	59
o. Cash and cash equivalents ............................................................................................................................................................................................	59
p. Financial assets ................................................................................................................................................................................................................	59
q. Financial liabilities ............................................................................................................................................................................................................	61
r. Derivative financial instruments and hedge accounting .............................................................................................................................................	61
s. Share based payments and employee benefits ..........................................................................................................................................................	62
t. Provisions ...........................................................................................................................................................................................................................	62
u. Equity .................................................................................................................................................................................................................................	63
39. Changes in accounting policies, reclassification and restatement of comparatives summary .................................................................................	63
40. Standards issued but not yet effective ...............................................................................................................................................................................	64
Signatures of the Board of Directors ...........................................................................................................................................................................................	65

Consolidated income statement for the year ended

31 December 2022


		YEAR ENDED
	Note	31 December 2022	31 December 2021
Continuing operations
Restaurant sales		2 267.3	1 821.0
Franchise and other sales		154.7	96.0
Total revenue	5,6	2 422.0	1 917.0
Restaurant expenses:
Food and merchandise	7	(681.7)	(503.3)
Payroll and other employee benefits	7	(538.5)	(459.9)
Royalties	7	(113.4)	(85.8)
Occupancy, depreciation and other operating expenses	7	(697.6)	(583.4)
Franchise and other expenses	7	(121.8)	(71.7)
Gross Profit		269.0	212.9
General and administrative expenses	7	(155.8)	(138.4)
Net impairment losses on financial assets	9	(2.5)	(0.9)
Net impairment losses on other assets	9	(55.4)	(18.2)
Other operating income/expenses	8	19.3	47.7
Profit/loss from operations		74.6	103.1
Finance income	10	4.0	2.8
Finance costs	11	(51.1)	(48.0)
Profit/loss before tax		27.5	57.9
Income tax expense	12	(20.9)	(22.5)
Profit/loss for the period		6.6	35.4
Attributable to:
Shareholders of the parent		1.3	32.9
Non-controlling interests		5.3	2.5
Profit/loss for the period		6.6	35.4


		YEAR ENDED
		31 December 2022	31 December 2021
Basic earnings per ordinary share in EUR	26	0.01	0.15
Diluted earnings per ordinary share in EUR	26	0.01	0.15

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 2022

Consolidated statement of comprehensive income

for the year ended 31 December 2022


		YEAR ENDED
	Note	31 December 2022	31 December 2021
Profit/loss for the period		6.6	35.4
Other comprehensive income/loss	23
Exchange differences on translation of foreign operations		19.3	12.7
Net investment hedges		(2.9)	(1.6)
Income tax related to net investment hedges		0.5	0.3
Other comprehensive income/loss for the period		16.9	11.4
Total comprehensive income/loss for the period		23.5	46.8
Attributable to:
Shareholders of the parent		18.1	44.1
Non-controlling interests		5.4	2.7

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 2022

Consolidated statement of financial position

at 31 December 2022


	Note	31 December 2022	31 December 2021
Assets
Property, plant and equipment	13	501.5	460.9
Right-of-use assets	14	813.3	771.0
Goodwill	16	283.2	316.6
Intangible assets	15	236.4	236.9
Investment properties		4.7	4.8
Other non-current assets	18	24.0	23.1
Deferred tax assets	12	44.5	45.7
Total non-current assets		1 907.6	1 859.0
Inventories	19	37.5	33.1
Trade and other receivables	20, 35	89.1	67.9
Income tax receivables		3.3	4.9
Other current assets	21	13.1	11.3
Cash and cash equivalents	22	229.6	198.7
Total current assets		372.6	315.9
Total assets		2 280.2	2 174.9
Equity
Share capital	23	22.0	22.0
Reserves	23	166.5	165.6
Retained earnings	23	148.8	147.5
Translation reserve	23	(17.2)	(36.4)
Equity attributable to shareholders of the parent		320.1	298.7
Non-controlling interests	25	11.1	8.8
Total equity	23	331.2	307.5
Liabilities
Interest-bearing loans and borrowings	27, 35	551.5	541.9
Lease liabilities	14	705.6	663.8
Provisions	30	18.7	33.4
Deferred tax liability	12	43.0	45.4
Other non-current liabilities and employee benefits	32	3.8	3.6
Total non-current liabilities		1 322.6	1 288.1
Interest-bearing loans and borrowings	27, 35	102.2	122.7
Lease liabilities	14	173.1	159.1
Provisions		4.4	-
Trade payables and other liabilities	32	340.0	287.2
Income tax liabilities		6.7	10.3
Total current liabilities		626.4	579.3
Total liabilities		1 949.0	1 867.4
Total equity and liabilities		2 280.2	2 174.9

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 2022

Consolidated statement of cash flows for the year

ended 31 December 2022


		YEAR ENDED
	Note	31 December 2022	31 December 2021
Cash flows from operating activities
Profit/loss for the period		6.6	35.4
Adjustments for:
Amortisation and depreciation		251.9	236.9
Net interest expense		43.5	39.6
Foreign exchange result		3.1	(1.1)
Result on debt modification and extension fees		-	6.5
Result on disposal of property, plant and equipment and intangibles		(0.9)	(2.0)
Impairment of non-financial assets		55.4	18.2
Share-based payments		3.5	0.1
Tax expense		20.9	22.5
Rent concessions		(2.0)	(10.9)
Loan forgiven		-	(2.7)
Other		(0.9)	0.2
Working capital changes:	22
Change in trade and other receivables and other assets		(25.2)	(7.2)
Change in inventories		(4.3)	(7.1)
Change in payables and other liabilities		46.0	38.6
Change in provisions and employee benefits		(9.2)	1.4
Cash generated from operations		388.4	368.4
Income tax paid		(25.9)	(11.5)
Net cash from operating activities		362.5	356.9
Cash flows from investing activities
Net cash outflows on acquisition		(1.1)	-
Proceeds from the sale of the business		0.1	1.5
Proceeds from the sale of property, plant and equipment, and intangible assets		0.9	-
Purchase of property, plant and equipment		(128.0)	(88.8)
Purchase of intangible assets		(10.0)	(9.3)
Net cash from investing activities		(138.1)	(96.6)
Cash flows from financing activities
Proceeds from share transfers (employees options)		-	-
Proceeds from loans and borrowings	27	128.6	1.1
Repayment of loans and borrowings	27	(132.3)	(106.9)
Payments of lease liabilities including interests paid		(163.6)	(141.7)
Interest paid	27	(24.6)	(18.9)
Interest received		3.9	1.1
Dividends paid to non-controlling interest	24	(1.8)	(1.3)
Transactions with non-controlling interest		(2.3)	(3.8)
Net cash from financing activities		(192.1)	(270.4)
Net change in cash and cash equivalents		32.3	(10.1)
Effect of foreign exchange rate movements		(1.4)	4.0
Balance sheet change of cash and cash equivalents		30.9	(6.1)
Cash and cash equivalents, beginning of period		198.7	204.8
Cash and cash equivalents, end of period	22	229.6	198.7

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 2022

Consolidated statement of changes in equity for the year ended 31 December 2022


		ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT
		Share capital	Reserves	Retained earnings	Translation reserve	Total	Non- controlling interest	Total equity
As of 1 January 2022		22.0	165.6	147.5	(36.4)	298.7	8.8	307.5
Profit/loss for the period		-	-	1.3	-	1.3	5.3	6.6
Other comprehensive income/loss		-	(2.4)	-	19.2	16.8	0.1	16.9
Total comprehensive income/loss		-	(2.4)	1.3	19.2	18.1	5.4	23.5
Transaction with non-controlling interests	23	-	(1.0)	-	-	(1.0)	(3.1)	(4.1)
Share based payments	23	-	4.3	-	-	4.3	-	4.3
As of 31 December 2022		22.0	166.5	148.8	(17.2)	320.1	11.1	331.2


		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		22.0	170.1	114.6	(48.9)	257.8	6.9	264.7
Profit/loss for the period		-	-	32.9	-	32.9	2.5	35.4
Other comprehensive income/loss		-	(1.3)	-	12.5	11.2	0.2	11.4
Total comprehensive income/loss		-	(1.3)	32.9	12.5	44.1	2.7	46.8
Transaction with non-controlling interests	23	-	(4.3)	-	-	(4.3)	(0.8)	(5.1)
Share based payments	23	-	1.1	-	-	1.1	-	1.1
As of 31 December 2021		22.0	165.6	147.5	(36.4)	298.7	8.8	307.5

The above consolidated statement of changes in equity 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 2022

Notes to the Consolidated Financial Statements

1. General information on AmRest Group

AmRest Holdings SE (“The Company”, “AmRest”) was incorporated in the Netherlands in October 2000. Since 2008 the

Company operates a European Company (Societas Europaea, SE). The company is domiciled in Spain.

Paseo de la Castellana 163, 28046 (Madrid), Spain is the Company’s registered office as of 31 December 2022 and has

not changed during the year 2022.

Hereinafter the Company and its subsidiaries shall be referred to as the “Group” and “AmRest Group”.

In 2005 the shares of AmRest Holdings SE were quoted for the first time on the Warsaw Stock Exchange (“WSE”) and in

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).

Grupo Finaccess S.A.P.I. de C.V. is the ultimate parent of the Group.

The Group is the largest independent chain restaurant operator in Central and Eastern Europe. The Group is also

conducting its operations in Western Europe, Russia and China. The Group’s principal place of business is Europe.

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 are operated both by AmRest and its sub-franchisees based on master-franchise agreements

("MFA"). As previously announced, due to termination of Pizza Hut Master Franchise Agreements in Russia and

Germany, the Pizza Hut restaurants on these markets were transferred in Q2 2022 and Q4 2022, respectively, to two

different counterparties designated by Yum! In December 2022 AmRest entered into a share purchase agreement with

Almira OOO, for the sale of its KFC restaurant business in Russia. The closing of the Transaction is subject to the

approval by competition authority in Russia, the consent by Yum! Brands Inc.- brand owner and to other regulatory

authorizations that may be applicable in Russia.

In Spain and Portugal the Group operates its own brand La Tagliatella. This business is based on operating equity and

franchise restaurants and is supported by the central kitchen located in Spain which produces and delivers products to

the whole network. In China the Group operates its own brand called Blue Frog.

In 2018 the Group acquired the Bacoa and Sushi Shop brands, as a result of which it operates proprietary and franchise

restaurants in Spain (Bacoa) and proprietary and franchise Sushi Shop restaurants in France, Belgium, Spain,

Switzerland, United Kingdom, Luxembourg, Italy, United Arab Emirates and Saudi Arabia. Bacoa is a primarily premium

burger concept in Spain and Sushi Shop is the operator of the leading European chain of Japanese cuisine restaurants.

Additionally, among own brands the Group operates virtual brands.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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 2022


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, 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 possibility of extension for a further 10 years	Poland, Czechia, Bulgaria, Slovakia, Romania – 20 years or 10 years 5) Since 20 November 2018: 10 years for restaurants opened.	15 years, possibility of extension for a further 5 years2); in Romania till 10 October 2023 16 years; in Bulgaria till 1 October 2027 20 years
Preliminary fee	up to USD 57.9 thousand 3)	up to USD 57.9 thousand 3)	USD 29.0 thousand 3)	USD 30 thousand	USD 25 thousand
Franchise fee	6% of sales revenues	6% of sales revenues	6% of sales revenues	5% of sales revenues	6% of sales revenues
Marketing costs	5% of sales revenues 4)	5% of sales revenues	6% or 5% of sales revenues depending on the concept	5% of sales revenues	amount agreed each year

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


ACTIVITY PERFORMED THROUGH OWN BRANDS
Brand	La Tagliatella	Blue Frog	Sushi Shop
Area of the activity	Spain, Portugal	China	France, Spain, Belgium, Italy, Switzerland, Luxembourg, UK


ACTIVITY WHERE AMREST IS A FRANCHISOR (OWN BRAND OR BASED ON MASTER-FRANCHISE AGREEMENTS)6)
Brand	Pizza Hut Express, Delivery	La Tagliatella	Blue Frog	Bacoa 7)	Sushi Shop
Partner	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	France, CEE (Hungary, Czechia, Poland, Slovakia, Slovenia)	Spain	China	Spain	France, Belgium, United Arab Emirates, Saudi Arabia, UK
Term of agreement	10 years with possibility of extension	10 years with possibility of extension	5 years with possibility of extension	up to 5 years	Franchise agreements: from 3 years (corners) to 10 years with a limited territorial exclusivity. EADA - exclusivity for specific territories granted to up to 10 years.

1) AmRest, through AmRest Sp. z o.o. owns 82% and Starbucks 18% of the share capital of the companies in Poland (AmRest Coffee Sp. z

o.o), Czechia (AmRest Coffee s.r.o.) and Hungary (AmRest Kavezo Kft.). Upon occurrence of an event of default, both AmRest and Starbucks

(as the case may be, acting as non-defaulting shareholder) will have the option to purchase all of the shares of the other shareholder (the

defaulting shareholder) in the terms and conditions foreseen in the corresponding agreements. In the event of a deadlock, Starbucks will have,

in the first place, the option to purchase all the shares of AmRest and, if Starbucks does not exercise that option, AmRest will have the option to

purchase all the shares of Starbucks, in the terms and conditions foreseen in the corresponding agreements. In the event of a change of control

in AmRest Holdings, Starbucks will have the right to increase its participation in each of the companies up to 100%.

2) The license agreements entered into by and between AmRest’s affiliates and Starbucks EMEA Limited for Poland, Hungary and Czech

Republic, were extended for another 5 years.

3) The fee is updated yearly for inflation.

4) 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.

6) As previously announced, due to termination of Pizza Hut Master Franchise Agreements in Russia and Germany, the Pizza Hut restaurants

on these markets were transferred in Q2 2022 and Q4 2022, respectively, to two different counterparties designated by Yum!

7) Bacoa restaurants are currently operated under trademark license agreements

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

2. Group Structure

As of 31 December 2022, 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.3	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 Management Kft	Budapest, Hungary	AmRest TAG S.L.U.	1.00%	August 2018
GM Invest SRL	Brussels, Belgium	AmRest TAG S.L.U.	100.00%	October 2018
Sushi Shop Group SAS	Paris, France	GM Invest SRL	9.47%	October 2018
Sushi Shop Group SAS	Paris, France	AmRest TAG S.L.U.	90.53%	October 2018
AmRest France SAS	Paris, France	AmRest Holdings SE	100.00%	December 2018
Sushi Shop Management SAS	Paris, France	Sushi Shop Group SAS	100.00%	October 2018
Sushi Shop 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
AmRest Coffee Sp. z o.o.	Wroclaw, Poland	Starbucks Coffee International,Inc.	18.00%	March 2007
AmRest EOOD	Sofia, Bulgaria	AmRest Holdings SE	100.00%	April 2007
OOO AmRest	Saint Petersburg, Russia	AmRest Acquisition Subsidiary Ltd.	44.72%	July 2007
OOO AmRest	Saint Petersburg, Russia	AmRest Sp. z o.o.	55.28%	July 2007
AmRest Coffee s.r.o.	Prague, Czechia	AmRest Sp. z o.o.	82.00%	August 2007
AmRest Coffee s.r.o.	Prague, Czechia	Starbucks Coffee International,Inc.	18.00%	August 2007
AmRest Kávézó Kft	Budapest, Hungary	AmRest Sp. z o.o.	82.00%	August 2007
AmRest Kávézó Kft	Budapest, Hungary	Starbucks Coffee International,Inc.	18.00%	August 2007
AmRest d.o.o.2	Belgrade, Serbia	AmRest Sp. z o.o.	100.00%	October 2007
Restauravia Food S.L.U.	Madrid, Spain	AmRest TAG S.L.U.	100.00%	April 2011
Pastificio Service S.L.U.	Madrid, Spain	AmRest TAG S.L.U.	100.00%	April 2011
AmRest Adria d.o.o.	Zagreb, Croatia	AmRest Sp. z o.o.	100.00%	October 2011
AmRest GmbH i.L.1	Cologne, Germany	AmRest TAG S.L.U.	100.00%	March 2012
AmRest SAS.	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.	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 Coffee SK s.r.o.	Bratislava, Slovakia	AmRest Sp. z o.o.	1.00%	December 2015
AmRest Coffee Deutschland	Munich, Germany	AmRest Kaffee Sp. z o.o.	23.00%	May 2016
Sp. z o.o. & Co. KG	Munich, Germany	AmRest TAG S.L.U.	77.00%	May 2016
AmRest DE Sp. z o.o. & Co. KG	Munich, Germany	AmRest Kaffee Sp. z o.o.	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
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 Pizza	Saint Petersburg, Russia	OOO AmRest	0.000004%	November 2017
AmRest Coffee SRB d.o.o.	Belgrade, Serbia	AmRest Holdings SE	100.00%	November 2017
AmRest Chamnord SAS	Paris, France	AmRest Opco SAS	100.00%	March 2018
AmRest SK s.r.o.	Bratislava, Slovakia	AmRest s.r.o.	99.00%	April 2018
AmRest SK s.r.o.	Bratislava, Slovakia	AmRest Sp. z o.o.	1.00%	April 2018
AmRest Pizza GmbH	Munich, Germany	AmRest DE Sp. z o.o. & Co. KG	100.00%	June 2018
Black Rice S.L.U.	Madrid, Spain	AmRest TAG S.L.U.	100.00%	July 2018
Bacoa Holding S.L.U.	Madrid, Spain	AmRest TAG S.L.U.	100.00%	July 2018
Sushi Shop Restauration SAS	Paris, France	Sushi Shop Management SAS	100.00%	October 2018
Sushi House SA	Luxembourg	Sushi Shop Luxembourg SARL	100.00%	October 2018
Sushi Shop London Pvt LTD	London, UK	Sushi Shop Group SAS	100.00%	October 2018

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


Sushi Shop Belgique SA	Bruxelles, Belgium	Sushi Shop Group SAS	100.00%	October 2018
Sushi Shop Louise SA	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	Bruxelles, Belgium	Sushi Shop Belgique SA	100.00%	October 2018
Sushi Shop Geneve SA	Geneva, Switzerland	Sushi Shop Switzerland SA	100.00%	October 2018
Sushi Shop Lausanne SARL	Lasanne, Switzerland	Sushi Shop Switzerland SA	100.00%	October 2018
Sushi Shop Madrid S.L.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
Sushi Shop Milan SARL	Milan, Italy	Vanray SRL	30.00%	October 2018
Sushi Shop Zurich GMBH	Zurich, Switzerland	Sushi Shop Switzerland SA	100.00%	October 2018
Sushi Shop Nyon SARL	Nyon, Switzerland	Sushi Shop Switzerland SA	100.00%	October 2018
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 4	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
SCM Czech s.r.o.	Prague, Czechia	Ondrej Razga	10.00%	March 2007
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 7 April 2022 the Share Purchase Agreement was concluded to sale and transfer of the 40% of the shares in AmRest d.o.o. from ProFood

Invest GmbH to AmRest Sp. z o.o. On 6 September 2022 changes were registered – AmRest Sp. z o.o. has become sole shareholder of

AmRest d.o.o.

3 On 20 January 2023 AmRest HK Ltd. has been deregistered.

4 On 19 December 2022, AmRest Tag, S.L.U., the sole shareholder of La Tagliatella International, Kft., decided to liquidate this company. The

liquidation process has not been finished up until the date of this Report.

•On 12 July 2022 Pastificio Service S.L.U, the sole shareholder of The Grill Concept S.L.U., decided to liquidate this company.

On 23 August 2022 The Grill Concept S.L.U has been deregistered.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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 27 February

2023.

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

2021, except for the adoption of new standards, interpretations, and amendments to standards effective as of 1 January

2022, as described below and in the note 39. Several amendments and interpretations apply for the first time in 2022, 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.

The Group has prepared these consolidated financial statements on the basis that it will continue to operate as a going

concern.i

War in Ukraine update and Russian operations

The war in Ukraine in late February 2022 has led to increased market volatility and higher economic uncertainty, as

reflected in the widespread deterioration of the consumer confidence indicators, which has impacted on financial and

commodity markets. The escalation of the conflict between Russia and Ukraine resulted in a number of commercial and

economic sanctions to Russia.

European Central Bank (whose exchange rates the Group is using for conversion of foreign operations to Euro) has

suspended its publication of a euro reference rate for the Russian rouble from 1 March 2022. As such the Group has

started using euro-rouble exchange rate as published by National Bank of Russia for preparation of condensed

consolidated interim reports. During year 2022 rouble/ EUR exchange rate characterized with significant volatility. At year

end exchange rate was 11% higher then at the beginning of the year (as of 31 December 2021 1 EUR = 85.47 RUB,

whereas as of 31 December 2022 1 EUR = 75.76 RUB).

The Group is closely monitoring potential impact of war and sanctions imposed to Russia on Group’s current and future

operations. The Group stopped investments in that country and in May 2022 transferred its Pizza Hut operations in

Russia to a local operator. This transaction did not have material impact on Group's income statement and balance sheet.

During the year 2022, the Group has performed the impairment tests for its remaining Russian business and accounted

for EUR 52.9 million impairment loss as a result.

AmRest Group has entered on 6 December 2022 into a share purchase agreement with Almira OOO, for the sale of its

KFC restaurant business in Russia (the "Transaction"). The closing of the Transaction is subject to the approval by

competition authority in Russia, the consent by Yum! Brands Inc.- brand owner and to other regulatory authorizations that

may be applicable in Russia. The final terms of the Transaction are subject to certain external factors, including EUR/RUB

exchange rate.

The transaction would represent full disposal of AmRest business held in Russia. Russian market is a separate operating

segment reported in consolidated financial statements.

Detailed analysis of IFRS 5 “Non-current assets held for sale and discontinued operations” (“IFRS 5”) conditions was run

to assess if the conditions are met for Russian business to disclose as disposal group and discontinued operations as of

31 December 2022.

Such analysis requires high judgements and estimates. For an asset (or disposal group) to be classified as held for sale:

•it must be available for immediate sale in its present condition, subject only to terms that are usual and customary for

sales of such assets (or disposal groups);

•its sale must be highly probable; and

•it must genuinely be sold, not abandoned.

Detailed analysis of all elements of the definition was performed, taking into account details of the Transaction as agreed

in the agreements, conditions that need to be satisfied prior finalization, current market situation including volatility of the

EUR/RUB exchange rates, legislative and regulatory environment in Russia.

In relation to the regulatory conditions, as of the date of these financial statements and in accordance with the published

minutes of the meeting of the sub-commission of the governmental Commission for Control over Foreign Investments in

the Russian Federation of December 12, 2022 (Nº 116/1), a minimum 50% discount to fair value based on the external

valuation is expected to be applied for transactions subject to the Foreign Investment Condition followed by additional

10% tax (referred as exit tax) or deferred payments scheme (payment of the purchase price has to be made in

instalments during 1-2 years). Key performance indicators (KPI such as maintaining the number of employees, tax

revenues) for the acquirer with respect to the business to be purchased shall be also established.

When making decisions on the payment of dividends/profits, the following conditions must be taken into account: the

amount of paid profit is not more than 50% of the net profit for the previous year; results of a retrospective analysis of the

payment of profits for previous periods; willingness of shareholders to continue commercial activities in the Russian

Federation; the positions of the federal executive authorities and the Bank of Russia on the significance of the

organization's activities and the impact of its activities on the technological and industrial sovereignty of the Russian

Federation, the socio-economic development of the Russian Federation or the constituent entities of the Russian

Federation; establishment by federal executive authorities of quarterly KPIs for organizations; the possibility of paying

profit on a quarterly basis (subject to the achievement of established KPIs).

As disclosed in the Inside Information published on 6 December 2022, AmRest expects to receive a minimum of EUR 100

million for the Transaction. The final terms of the Transaction, which are subject to certain external factors, including

exchange rate, will be communicated if the Transaction is closed.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Without prejudice to the information disclosed in note 37, AmRest’s management believes that in accordance with the

IFRS 5 conditions, the sale of Russian business cannot be considered as highly probable and, therefore, will not be

classified as assets/liabilities held for sale and operation of Russian business for year 2022 as discounted operations.

The following key aspects have been taken into consideration for reaching that conclusion: (i) unstable legal and

geopolitical situation in Russia, (ii) possibility of Russian government imposing additional conditions to those already in

place and described above, (iii) possibility of the Russian antitrust authorities not clearing the transaction, (iv) potential

restrictions that might be imposed by the EU authorities and/or other national governments in relation to any operation

related to Russia, and (v) current EUR-RUB exchange rate that does not guarantee the expected minimum sale price.

These aspects could also affect the fulfilment of the conditions precedent to which the transaction is subject.

As of 31 December 2022 the net assets of Russian operations presented in these consolidated financial statements

amount to EUR 64.7 million. Note 5 presents information for Russian segment.

The table below shows total split of net assets of Russian operations of the Group as of 31 December 2022. The

comparative figures for 31 December 2021 presented in second column reflect data reported in consolidated financial

statements for the year ended 31 December 2021, i.e., using forex exchange EUR/RUB as of 31 December 2021. For

illustrative purposes Group presents also, in the third column, the estimate of 31 December 2021 data in EUR if

31 December 2022 forex exchange rate was used at that time.


EUR millions	31 December 2022	31 December 2021	31 December 2021 at December 2022 forex rate
Non-current assets	119.4	151.9	171.4
Lease liabilities	80.4	75.8	85.5
Current assets	48.3	19.5	22.0
Other liabilities	22.6	16.4	18.5
Net assets	64.7	79.2	89.4

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 analysed, 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 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.

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.

Inflation and rising interest rates

Rising inflation and interest rates may cause significant estimation uncertainty for both short and long duration assets and

liabilities. They affect amongst others fair value measurements, expected future cash flows estimates, discount rates

used to determine present value of cash flows, and impairment tests.

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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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.

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.

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.

Expected changes to income tax legislation

On 8 October 2021 agreement was reached between 136 countries for a two-pillar approach to international tax reform

(‘the OECD agreement’). Amongst other things, Pillar One proposes a reallocation of a proportion of tax to market

jurisdictions, while Pillar Two seeks to apply a global minimum effective tax rate of 15%. The OECD Agreement is likely to

see changes in corporate tax rates in a number of countries in the next few years. On 15 December 2022, European

Union Member States unanimously adopted the Minimum Tax Directive. The Directive has to be transposed into national

legislations until 31 December 2023. The impact of changes in corporate tax rates on the measurement of tax assets and

liabilities depends on the nature and timing of the legislative changes in each country. At its meeting in November 2022,

the IASB decided on standard-setting in response to the imminent implementation of the Pillar Two model rules. It is likely

that IAS 12, ‘Income taxes’, will be amended in 2023 to introduce a temporary exception from accounting for deferred

taxes arising from application of the OECD’s Pillar Two model rules.

At the December 2022 reporting period, the Pillar 2 requirements have not been substantively enacted in any of the

territories in which the Group operates, consequently there is no significant impact on current or deferred taxes.

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,
	■ 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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


Segment	Description
Western Europe	Restaurant operations together with supply chain and franchise activity in:
	■ Spain – KFC, La Tagliatella, Sushi Shop,
	■ France – KFC, Pizza Hut, Sushi Shop,
	■ Germany – Starbucks, KFC, Pizza Hut (until December 2022 when it was transferred to other MFA operator)
	■ Portugal – La Tagliatella ■ Belgium, Italy, Switzerland, Luxembourg, United Kingdom and other countries with activities of Sushi Shop.
China	Blue Frog operations in China.
Russia	KFC operations in Russia and until May 2022 Pizza Hut restaurant operations and franchise activity in Russia, Armenia and Azerbaijan (transferred to local operator in May 2022)
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 2022 and for the

comparative year ended 31 December 2021 are presented below.


YEAR ENDED
31 December 2022	CEE	Western Europe	Russia	China	Other	Total
Restaurant sales	1 133.3	756.5	295.1	82.4	-	2 267.3
Franchise and other sales	0.5	72.7	0.2	0.2	81.1	154.7
Inter-segment revenue	-	-	-	-	-	-
Segment revenue	1 133.8	829.2	295.3	82.6	81.1	2 422.0
EBITDA	215.0	107.5	58.6	15.6	(12.3)	384.4
Depreciation and amortisation	112.2	89.0	31.0	19.0	0.7	251.9
Net impairment losses on financial assets	0.2	2.0	0.3	-	-	2.5
Net impairment losses on other assets	(3.9)	2.9	55.7	0.4	0.3	55.4
Profit/loss from operations	106.5	13.6	(28.4)	(3.8)	(13.3)	74.6
Finance income and costs	(17.4)	(8.2)	(2.5)	(0.9)	(18.1)	(47.1)
Profit before tax	89.1	5.4	(30.9)	(4.7)	(31.4)	27.5
Capital investment	83.6	48.0	8.6	7.7	0.8	148.7

*Capital investment comprises additions and acquisition in property, plant and equipment and intangible assets.


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 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.

Information on geographical areas:

Significant geographical regions are disclosed below with their key characteristics:

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


		YEAR ENDED
		31 December 2022	31 December 2021
Revenue from external customers	Poland	580.2	462.5
	Czechia	282.2	204.0
	Spain	305.2	232.8
	France	309.4	313.5
	Russia	295.3	185.2
	Germany	173.0	128.7
	Hungary	151.7	122.2
	China	82.6	100.2


		31 December 2022	31 December 2021
Total of non-current assets other than financial instruments and deferred tax assets	Poland	351.2	330.2
	Czechia	153.1	146.3
	Spain	421.2	383.9
	France	422.3	412.9
	Russia	116.8	149.8
	Germany	122.6	129.9
	Hungary	81.8	74.9
	China	74.2	67.8

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.

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 94% 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.

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 2022	31 December 2021
Food, merchandise and other materials	805.9	580.4
Payroll	525.3	453.6
Social security and employee benefits	128.1	110.2
Royalties	118.4	89.9
Utilities	115.2	76.1
Marketing expenses	98.0	78.1
Delivery fees	91.3	81.0
Other external services	122.0	103.1
Occupancy cost	31.7	15.9
Depreciation of right-of-use assets	147.0	133.4
Depreciation of property, plant and equipment	92.9	91.6

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


	YEAR ENDED
	31 December 2022	31 December 2021
Amortisation of intangible assets	12.0	12.0
Other	21.0	17.2
Total cost by nature	2 308.8	1 842.5

Summary of operating expenses by functions:


	YEAR ENDED
	31 December 2022	31 December 2021
Restaurant expenses	2 031.2	1 632.4
Franchise and other expenses	121.8	71.7
General and administrative expenses	155.8	138.4
Total costs	2 308.8	1 842.5

8. Other operating income/expenses


	YEAR ENDED
	31 December 2022	31 December 2021
Government grants for payroll and employee benefits	0.4	10.5
Government grants for rent and other	1.6	26.7
Supply chain services	7.8	7.7
Franchise agreements related provision	0.6	(1.0)
Reversal (creation) of provision	2.3	(1.1)
Compensations and insurance claims	2.9	-
Other gains and losses	3.7	4.9
	19.3	47.7

The other operating gains in year 2021 consisted mainly from various government assistance programs related to

COVID-19 pandemic. The Group has taken numerous actions aimed at utilising government support related to cost of

labour offered on all markets where the Group operates. 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.

9. Impairment losses

Details of impairments losses recognized:


	YEAR ENDED
	31 December 2022	31 December 2021
Impairment of trade receivables (note 35)	2.5	0.9
Net impairment losses of financial assets	2.5	0.9
Impairment of property, plant and equipment (note 13)	3.7	18.1
Impairment of intangible assets (note 15)	(0.9)	3.0
Impairment of right of use assets (note 14)	5.2	(3.0)
Impairment of goodwill (note 16)	46.9	-
Impairment of inventories and other assets	0.5	0.1
Net impairment losses of non-financial assets	55.4	18.2
Total net impairment losses of assets	57.9	19.1

10. Finance income

Finance income in years ended 31 December 2022 and 31 December 2021 represents mainly bank and other interests

received and net income from exchange differences for the year ended 31 December 2021.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

11. Finance costs


	YEAR ENDED
	31 December 2022	31 December 2021
Interest expense	21.7	17.1
Interest expense on lease liability	25.7	23.7
Net cost from exchange differences	3.1	-
Net exchange differences on lease liability	3.5	-
Net exchange differences - other	(0.4)	-
Other	0.6	7.2
Total finance cost	51.1	48.0

In comparative data, other finance costs include mainly loss on debt modification in an amount of EUR 6.5 million.

12. Income taxes


	YEAR ENDED
	31 December 2022	31 December 2021
Current tax	(24.1)	(23.1)
Deferred income tax recognised in the income statement	3.2	0.6
Income tax recognised in the income statement	(20.9)	(22.5)

Deferred tax asset
Opening balance	45.7	37.6
Closing balance	44.5	45.7

Deferred tax liability
Opening balance	45.4	39.0
Closing balance	43.0	45.4
Change in deferred tax assets/liabilities	1.2	1.7

Temporary differences in the calculation of deferred tax relate to the following items:


	Asset		Liability
	31 December 2022	31 December 2021	31 December 2022	31 December 2021
Property, plant and equipment and intangible assets	14.8	16.2	48.3	50.9
Leases	10.0	7.9	0.3	-
Trade and other receivables	0.3	1.5	-	0.4
Provisions and other liabilities	7.4	11.2	1.3	1.6
Tax losses carried forward	14.6	15.0	-	-
Other differences	5.8	2.3	1.5	0.9
	52.9	54.1	51.4	53.8
The offset of tax	(8.4)	(8.4)	(8.4)	(8.4)
	44.5	45.7	43.0	45.4

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 2022	31 December 2021
Change in deferred tax assets/liabilities	1.2	1.7
of which:
Deferred taxes recognised in the income statement	3.2	0.6
Deferred taxes recognised in other comprehensive income – net investment hedges	0.5	(0.3)
Deferred taxes recognised in equity -valuation of employee options	(1.1)	0.6
Exchange differences	(1.4)	0.8

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Income tax on the Group’s profit before tax differs from the theoretical amount which would be obtained if the weighted

average nominal tax rate applicable to consolidated companies were applied:


	YEAR ENDED
	31 December 2022	31 December 2021
Profit before tax	27.6	57.9
Income tax calculated according to domestic tax rates applicable to income in particular countries*	1.6	8.1
Temporary differences on goodwill impairment for which no deferred tax was recognized	10.4	-
Tax loss for the current period for which no deferred tax asset was recognized	4.3	8.8
Permanent differences and changes in estimates	2.5	0.2
Effect of local tax reported as income tax	3.0	4.1
Change in tax rate	(1.0)	0.3
Effect of other differences	0.1	1.0
Corporate income tax in the income statement	20.9	22.5

*The applicable weighted average nominal tax rate amounted to 5.8% (for the period ended 31 December 2021: 14.0%).

As of 31 December 2022 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
2023 - 2028	23.8	1.6	22.2
No time limit	245.8	57.1	188.7
	269.6	58.7	210.9

Deferred taxes were not recognised for the following tax losses:


	YEAR ENDED
	31 December 2022	31 December 2021
Germany	116.3	107.6
France	54.2	52.3
Russia	14.1	11.3
Poland	10.8	16.7
Portugal	4.3	4.3
China	2.8	1.9
Austria	2.1	2.3
Romania	1.6	1.6
Other	4.7	3.1
	210.9	201.1

The Group analyses recoverability of deferred taxes on tax losses based on the guidance in IAS 12. Group subsidiaries

analyses the periods in which tax losses can be utilised, 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 utilised.

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.

In 2022 the Group reviewed the tax returns for prior periods prepared by the subsidiaries and it resulted in the updated

value of tax losses, for which no deferred tax has been recognized compared to the amounts presented in previous

financial statements. The total tax effect for the period ended 31 December 2022 of tax loss for the current period for

which no deferred tax asset was recognised amounted EUR 4.3 million and tax effect of EUR 0.8 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 2022 and 2021.


Country	Income tax rates		Deferred income tax assets and liabilities
	2022	2021	2022	2021
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%

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


Country	Income tax rates		Deferred income tax assets and liabilities
	2022	2021	2022	2021
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**	25.00%	26.50%	25.00%	26.50%
Croatia	18.00%	18.00%	18.00%	18.00%
Hong Kong	17.00%	17.00%	17.00%	17.00%
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%
Belgium	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 presented at 31 December 2021 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 2022 and 2021:


2022	Leasehold improvements, land, buildings	Restaurants equipment and vehicles	Furniture and other assets	Assets under construction	Total
PPE as of 1 January	259.5	139.9	35.5	26.0	460.9
Acquisitions	-	-	0.3	0.3	0.6
Additions	8.2	18.9	2.7	108.3	138.1
Depreciation (note 7)	(42.3)	(37.5)	(13.1)	-	(92.9)
Impairment losses (note 9)	(1.3)	(2.7)	0.3	-	(3.7)
Disposals, liquidation and deconsolidation	(0.6)	(2.2)	(0.5)	-	(3.3)
Transfers	37.5	36.6	11.3	(86.1)	(0.7)
Exchange differences	2.3	0.4	0.3	(0.5)	2.5
PPE as of 31 December	263.3	153.4	36.8	48.0	501.5
Gross book value	644.9	414.3	110.3	48.6	1 218.1
Accumulated depreciation and impairments	(381.6)	(260.9)	(73.5)	(0.6)	(716.6)
Net book value	263.3	153.4	36.8	48.0	501.5


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

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 2022	31 December 2021
Costs of restaurant operations	89.7	88.6
Franchise expenses and other	1.6	1.3
General and administrative expense	1.6	1.7
Total depreciation	92.9	91.6

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Increasing the average useful lives of property, plant and equipment by 10% would lead to a decrease in depreciation for

the year ended 31 December 2022 by around EUR 9.5 million. Increasing the average useful lives of property, plant and

equipment by 10% would lead to a decrease in depreciation for the year ended 31 December 2021 by around EUR

9.4 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

2022 and 2021:


	Right-of-use asset			Lease liabilities
2022	Restaurant properties	Other	Total right-of-use asset	Total liabilities
As of 1 January	756.8	14.2	771.0	822.9
Additions – new contracts	50.0	7.8	57.8	57.5
Remeasurements and modifications	127.2	6.7	133.9	131.9
Depreciation (Note 7)	(138.7)	(8.3)	(147.0)	-
Impairment (Note 9)	(5.2)	-	(5.2)	-
Interest expense (Note 11)	-	-	-	25.7
Payments	-	-	-	(163.6)
Exchange differences	4.6	0.1	4.7	7.1
Disposals	(1.7)	(0.2)	(1.9)	(2.8)
As of 31 December	793.0	20.3	813.3	878.7


	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 (Note 7)	(128.4)	(5.0)	(133.4)	-
Impairment (Note 9)	3.0	-	3.0	-
Interest expense (Note 11)	-	-	-	23.7
Payments	-	-	-	(141.7)
Exchange differences	11.3	0.1	11.4	13.1
Disposals	-	-	-	-
As of 31 December	756.8	14.2	771.0	822.9

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.


	31 December 2022	31 December 2021
Up to 1 year	178.0	163.0
Between 1 and 3 years	277.3	254.9
Between 3 and 5 years	197.1	176.4
Between 5 and 10 years	242.2	218.7
More than 10 years	160.0	142.3
Total contractual lease payments	1 054.6	955.3
Future finance costs of leases	175.9	132.4
Total lease liabilities	878.7	822.9

Amortisation was charged as follows:


	YEAR ENDED
	31 December 2022	31 December 2021
Costs of restaurant operations	141.6	129.6
General and administrative expense	5.4	3.8
Total amortisation	147.0	133.4

The Group recognised in 2022 rent expense from short-term leases of EUR 0.8 million, leases of low-value assets of

EUR 5.8 million and variable lease payments of EUR 24.6 million (including negative amount of EUR 2.0 million

COVID-19-related rent concessions) for the year ended 31 December 2022. Impairment test procedures, assumptions

used and tests’ results are disclosed in note 17.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Amounts recognised in statement of cash flows amounted to EUR 163.6 million presented in financing activity as

repayment of lease liability and EUR 31.2 million in operating activity as lease payments not included in the lease liability.

Total cash outflow for leases amounted to EUR 194.8 million in the year ended 31 December 2022.

In the comparable period, in 2021, the Group recognised rent expense from short-term leases of EUR 0.7 million, leases

of low-value assets of EUR 5 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.

In the comparable period, in 2021, amounts recognised in statement of cash flows amounted to EUR 141.7 million

presented as repayment of lease liability and EUR 15.8 million as lease payments not included in the lease liability. Total

cash outflow for leases amounted to EUR 157.5 million in the year ended 31 December 2021.

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 2022, the share of variable payments (excluding rent

concessions) amounted to 16% of fixed lease payments (2021: 15%).

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 continued to

account for rent concessions relating to its other leases under other applicable guidance in IFRS 16 until the expiry of the

aforementioned practical expedient i.e. until 30 June 2022.

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 2.0

million (2021: 10.9 million).

15. Intangible assets

The table below presents changes in the value of intangible assets in 2022 and 2021:


2022	Own brands	Licenses for franchise brands	Relations with franchisees and customers	Other intangible assets	Total
IA as of 1 January	154.1	23.1	28.9	30.8	236.9
Additions	-	3.2	-	6.8	10.0
Amortisation (Note 7)	(0.3)	(3.7)	(3.1)	(4.9)	(12.0)
Impairment losses (Note 9)	-	0.1	-	0.8	0.9
Disposals and derecognition of assets	-	(0.1)	-	(0.2)	(0.3)
Transfers between categories	-	-	-	0.7	0.7
Exchange differences	-	0.3	-	(0.1)	0.2
IA as of 31 December	153.8	22.9	25.8	33.9	236.4
Gross book value	158.8	48.8	51.9	83.5	343.0
Accumulated amortisation and impairments	(5.0)	(25.9)	(26.1)	(49.6)	(106.6)
Net book value	153.8	22.9	25.8	33.9	236.4


2021	Own brands	Licenses for franchise brands	Relations with franchisees and customers	Other intangible 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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


2021	Own brands	Licenses for franchise brands	Relations with franchisees and customers	Other intangible assets	Total
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

Amortisation was charged as follows:


	YEAR ENDED
	31 December 2022	31 December 2021
Costs of restaurant operations	5.0	5.1
Franchise expenses and other	1.8	1.8
General and administrative expense	5.2	5.1
Total amortisation	12.0	12.0

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 2022. 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	5.1	(2.5)	-	2.6
Bacoa	definite	Spain - Bacoa	2.5	(0.1)	(2.4)	-
			158.7	(2.6)	(2.4)	153.7

Other intangible assets cover mainly exclusivity rights in the amount of EUR 1.1million (EUR 2.4 million as of

31 December 2021), key monies in the amount of EUR 18.0 millions (EUR 18.1 millions as of 31 December 2021) and

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:


2022	1 January	Increases (provisional)	Impairment	Exchange differences	31 December
Sushi Shop (all markets)	140.5	0.5	-	-	141.0
Spain – La Tagiatella and KFC	90.9	-	-	-	90.9
Russia - KFC	33.1	-	(46.9)	13.8	-
China – Blue Frog	21.5	-	-	(0.4)	21.1
France - KFC	14.0	-	-	-	14.0
Germany - Starbucks	8.6	-	-	-	8.6
Hungary – KFC	3.4	-	-	(0.3)	3.1
Romania - SBX	2.5	-	-	-	2.5
Czechia – KFC	1.5	-	-	(0.1)	1.4
Poland – Other	0.6	-	-	-	0.6
Total	316.6	0.5	(46.9)	13.0	283.2


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
China – Blue Frog	19.3	-	-	2.2	21.5
France - KFC	14.0	-	-	-	14.0

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


2021	1 January	Increases (provisional)	Impairment	Exchange differences	31 December
Germany - Starbucks	8.6	-	-	-	8.6
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

Impairment test procedures, assumptions used and tests’ results are disclosed in note 17.

17. Impairment of non-current assets

Details of impairments losses recognised:


		YEAR ENDED
Note		31 December 2022	31 December 2021
Net impairment of property, plant and equipment	13	3.7	18.1
Net impairment of intangible assets	15	(0.9)	3.0
Net impairment of right of use assets	14	5.2	(3.0)
Net impairment of goodwill	16	46.9	-
Net impairment losses of non- current non financial assets		54.9	18.1

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 analysed 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 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 2021 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.


	Post-tax discount rate 31 December 2022	Implied pre-tax discount rate	Pre-tax discount rate 30 June 2022	Pre-tax discount rate 31 December 2021
Spain	10.9%	14.6%	10.4%	8.6%
Germany	8.9%	12.7%	9.4%	7.2%
France	7.2%	9.6%	9.2%	7.1%

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


	Post-tax discount rate 31 December 2022	Implied pre-tax discount rate	Pre-tax discount rate 30 June 2022	Pre-tax discount rate 31 December 2021
Poland	11.3%	14.0%	11.7%	9.1%
Czechia	9.3%	11.5%	9.3%	7.8%
Hungary	14.5%	16.0%	12.2%	10.0%
Russia	29.2%	36.5%	40.8%	12.1%
China	8.9%	11.8%	9.9%	8.2%
Romania	12.7%	15.2%	11.9%	9.9%
Serbia	14.5%	17.0%	13.8%	10.6%
Bulgaria	11.0%	12.2%	9.8%	8.2%
Croatia	13.4%	16.3%	11.4%	9.4%
Slovakia	11.0%	14.0%	9.7%	8.1%
Portugal	11.1%	14.0%	10.0%	8.5%
Austria	8.9%	11.8%	9.5%	7.9%
Slovenia	11.1%	13.7%	12.0%	8.6%
Belgium	8.5%	11.3%	9.4%	8.2%
Italy	10.8%	14.3%	11.6%	8.7%
Switzerland	7.9%	9.3%	7.3%	5.8%
Luxembourg	8.2%	10.9%	9.1%	7.4%
Netherlands	8.6%	11.4%	9.1%	7.3%
United Kingdom	10.0%	12.4%	9.7%	7.8%

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.

Summary of impairment tests results on the level of restaurants for the year ended 31 December 2022 is presented in the

table below:


YE 2022	Impairment loss	Impairment reversals	Net/Total
Number of units tested			459.0
Units with impairment/reversal recognised	131.0	164.0
Impairment of property, plant and equipment and intangible assets	12.0	(11.7)	0.3
Impairment of right of use assets	1.8	(0.1)	1.7
Five highest individual impairment loss/ reversals totaled	3.2	(2.6)
Average impairment loss/ reversal per restaurant	0.2	(0.2)

Summary of impairment tests results on the level of restaurants for the year ended 31 December 2021 is presented in the

table below:


YE 2021	Impairment loss	Impairment reversals	Net/Total
Number of units tested			507.0
Units with impairment/reversal recognised	240.0	93.0
Impairment of property, plant and equipment and intangible assets	23.5	(2.4)	21.1
Impairment of right of use assets	3.3	(6.3)	(3.0)
Five highest individual impairment loss/ reversals totaled	4.4	(4.5)
Average impairment loss/ reversal per restaurant	0.2	(0.2)

Business (goodwill) level tests

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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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 2022 are as follows:


YE 2022	Post-tax discount rate	Implied pre- tax discount rate	Growth rate for residual value	Average restaurant sales growth 2023-2027	Weighted average budgeted EBITDA margin
Sushi Shop (all markets)	7.2%	8.8%	1.9%	28.0%	18.1%
Spain – KFC and TAG	10.9%	13.6%	2.1%	12.6%	22.3%
France – KFC	7.2%	8.7%	1.9%	4.2%	11.9%
Germany – Starbucks	8.9%	11.2%	2.4%	15.5%	19.3%
China – BF	8.9%	11.0%	2.0%	11.1%	24.4%
Romania – SBX	12.7%	14.3%	3.1%	14.4%	27.2%
Czechia – KFC	9.3%	10.9%	2.5%	9.6%	23.7%
Hungary – KFC	14.5%	15.6%	3.9%	10.5%	20.1%

Test results for YE 2022

No impairment losses were recognized based on the year end tests.

During interim impairment test the Group has recognized EUR 52.9 million impairment on Russian business. For the

results of interim impairment test refer to section below.

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:

•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.

Test results reported in HY 2022

For 6 months period ended 30 June 2022 Group has identified impairment indicators and performed impairment tests for

following businesses: China market, KFC France, Sushi Shop (all markets) and KFC Russia. Impairment losses were

recognised for KFC Russia. In all remaining tests the recoverable amount exceeds the carrying amount of the tested

group of CGUs.

Goodwill impairment test for KFC Russia

The war in Ukraine has introduced uncertainty in the conduct of businesses and, as a result, a significant risk of material

adjustment to the carrying amounts of assets and liabilities may have arisen. Determining the recoverable amount in the

current uncertain environment requires a careful assessment of the cash-flow projections.

The impairment test performed for KFC Russia business resulted in recognition of impairment losses in total value of

EUR 52.9 million (RUB 3 179.8 million retranslated by average forex RUB/EUR exchange rate from June 2022).

Impairment loss included impairment for goodwill EUR 46.9 million, impairment of property, plant, and equipment of EUR

2.5 million and impairment of right of use of assets in amount of EUR 3.5 million.

Test were performed in local currency, and the recoverable value of tested unit amounted RUB 8 713.1 million whereas

the carrying amount of tested non-current assets including goodwill amounted RUB 11 892.9 million. That resulted in

impairment loss of RUB 3 179.8 million, representing 42% of net assets of Russian business.

The Group has performed impairment test taking into account most recent budgets, forecast and expectations towards

operating business in Russia. Cash flow projections reflect current central scenario of continuing business operations in

Russia and there is no new restaurant development in the country.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

The war has impacted the interest rates and inflation trends. Consequently, the discount rate and growth rate for residual

period used to determine the recoverable amount were updated to reflect these developments.

The most relevant factor for updating Russia business discount rate, in the current situation, was the country risk

premium input. In the past the Group was using Moody’s country ratings, however, on 15 March 2022 the European

Union banned top credit rating firms from rating Russia and the Russian companies as part of its sanctions package.

Additionally, on 27 June 2022 a technical default of Russia was declared after missing a bond payment in foreign

currency as Russian central bank’s reserves were frozen and the local banks did not have access to the global financial

system. Nonetheless, holders of Russian government Eurobonds were offered a special account to receive the payment

in roubles in accordance with Russian central bank’s exchange rate. The complexity of this scenario increases with the

strong appreciation showed by the rouble. This movement is contradictory to what would be implied by a sovereign

default due to a lack of resources.

This technical default merits a substantial increase in the country risk premium of Russia. Even though, the country's

ability to repay in an appreciating local currency remains in place, the Group considers it reasonable to make the

assumption that the country's equivalent credit rating would be in the default threshold “C” (no ability to pay in USD). This

scenario implies a country risk premium of 20.34% and a discount rate of 32.62% for Russia market.

Following key assumption were used when performing impairment test:


HY 2022	Post-tax discount rate	Implied pre-tax discount rate	Growth rate for residual value	Weighted average budgeted EBITDA margin	Average total sales growth
Russia – KFC	32.6%	38.7%	5.9%	21.2%	6.6%

The Group carried out a sensitivity analysis. 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 3-5% decrease of

estimated sales revenues in each year of projection.

The following table presents what change in impairment loss would be accounted if respective input data were changed

by tested percentage, assuming remaining parameters remain stable.


Input/ change in input	(Increase)/ decrease in impairment loss (EUR million)
Discount rate - in model (post-tax discount rate (32.6%))
-10% of base value	15.7
-5% of base value	7.4
+5% of base value	(6.6)
+10% of base value	(12.5)
Growth rate for residual value - in model (5.9%)
-10% of base value	(0.9)
-5% of base value	(0.4)
+5% of base value	0.4
+10% of base value	0.9
Weighted average budgeted EBITDA margin value - in model (21.2%)
-10% of base value	(22.2)
-5% of base value	(11.1)
+5% of base value	11.1
+10% of base value	22.2
Restaurant Sales
-5% in each year of projection	(10.7)
-3% in each year of projection	(6.4)
+3% in each year of projection	6.4
+5% in each year of projection	10.7

The following table shows the values to discount rate and growth rate under which recoverable amount in the model

would equal to carrying amount of tested unit (assuming remaining input in model unchanged).


Input value	Post tax discount rate	Growth rate
Applied in model	32.6%	5.9%
When carrying amount of CGU equals to recoverable amount	24.0%	21.2%

Comparative information for the goodwill impairment tests performed during year ended 31 December 2021

The main input assumptions used in test were as follows:

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


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
Sushi Shop (all markets)	5.3%	6.5%	1.3%	1.0%	20.9%
Spain – KFC and TAG	6.4%	8.0%	1.6%	2.9%	23.9%
France – KFC	5.3%	6.6%	1.3%	2.4%	13.4%
Germany – Starbucks	5.1%	6.2%	1.9%	9.5%	17.6%
Russia – KFC	9.6%	11.1%	3.8%	3.5%	20.6%
China – BF	6.2%	7.6%	1.9%	3.4%	25.2%
Romania – SBX	8.3%	9.2%	2.8%	3.0%	25.7%
Czechia – KFC	6.3%	7.3%	2.0%	2.8%	25.1%
Hungary – KFC	9.1%	9.6%	3.2%	3.3%	20.0%

No impairment losses were recognized based on the year end tests.

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.

18. Other non-current assets

As of 31 December 2022 and 2021 the balances of other non-current assets were as follows:


	31 December 2022	31 December 2021
Deposit for rentals	23.6	22.0
Other	0.4	1.1
	24.0	23.1

19. Inventories

As of 31 December 2022 and 2021, 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 2022 and 2021 the balances of trade and other receivables were as follows:


	31 December 2022	31 December 2021
Trade receivables	44.2	37.3
Other tax receivables	27.2	22.1
Credit cards, coupons and food aggregators receivables	26.9	17.3
Loans and borrowings	1.7	1.3
Government grants	0.6	1.2
Other	1.7	1.6
Allowances for receivables (note 35)	(13.2)	(12.9)
	89.1	67.9

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 2022 and 2021 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 2022 and 31 December 2021 are presented in the table below:

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


	31 December 2022	31 December 2021
Cash at bank	216.8	189.8
Cash in hand	12.8	8.9
	229.6	198.7

Reconciliation of working capital changes as of 31 December 2022 and 31 December 2021 is presented in the table

below:


2022	Balance sheet change	Change in investment receivables	Change in investment liabilities	Exchange differences	Working capital changes
Change in trade and other receivables	(21.2)	-	-	(1.5)	(22.7)
Change in inventories	(4.4)	-	-	0.1	(4.3)
Change in other assets	(2.7)	-	-	0.2	(2.5)
Change in payables and other liabilities	53.0	-	(10.1)	3.1	46.0
Change in other provisions and employee benefits	(10.3)	-	-	1.1	(9.2)


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

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 2022.

As of 31 December 2022 and as of 31 December 2021 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 2022 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 S.L.*	147 203 760	67.05%
Artal International S.C.A.	11 366 102	5.18%
Aviva OFE Aviva BZWBK SA	7 013 700	3.19%
Nationale-Nederlanden OFE	10 718 700	4.88%
Other Shareholders	43 251 921	19.70%

* FCapital Dutch S.L. is 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

On 15 July 2022, as a result of the merger by absorption between FCapital Dutch, S.L. (at that time named FCapital

Dutch, B.V.), as the absorbing company, and FCapital Lux S.à r.l. (holding directly 56 509 547 AmRest shares), as the

absorbed company, the shareholding of FCapital Lux S.à r.l. in AmRest Holdings SE became the property of FCapital

Dutch, S.L.

Likewise, FCapital Dutch, S.L. (formerly FCapital Dutch, B.V.) carried out the international transfer of its registered office,

without dissolution or loss of its legal personality, from its previous domicile located in Amsterdam (The Netherlands) to

Madrid (Spain), under a public deed executed on December 1, 2022 (effective date of the transfer of domicile), which was

registered in the Commercial Registry of Madrid on January 16, 2023.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Reserves

The structure of Reserves is as follows:


2022	Share premium	Employee options unexercised	Employee options exercised	Treasury shares	Hedges valuation	Transactions with NCI	Total Reserves
As at 1 January	236.3	14.1	(40.7)	(4.0)	(9.5)	(30.6)	165.6
Net investment hedges	-	-	-	-	(2.9)	-	(2.9)
Income tax related to net investment hedges	-	-	-	-	0.5	-	0.5
Total comprehensive income	-	-	-	-	(2.4)	-	(2.4)
Transaction with non-controlling interests	-	-	-	-	-	(1.0)	(1.0)
Total transaction with non-controlling interests	-	-	-	-	-	(1.0)	(1.0)
Purchases of treasury shares	-	-	-	-	-	-	-
Share based payments	-	-	-	-	-	-	-
Value of disposed treasury shares	-	-	(0.3)	0.3	-	-	-
Employee stock option plan – proceeds from employees for transferred shares	-	-	-	-	-	-	-
Employee stock option plan – reclassification of exercised options	-	(3.0)	3.0	-	-	-	-
Employee stock option plan – change in unexercised options	-	5.5	(0.1)	-	-	-	5.4
Change of deferred tax related to unexercised employee benefits	-	(1.1)	-	-	-	-	(1.1)
Total share based payments	-	1.4	2.6	0.3	-	-	4.3
Total distributions and contributions	-	1.4	2.6	0.3	-	-	4.3
As at 31 December	236.3	15.5	(38.1)	(3.7)	(11.9)	(31.6)	166.5

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


2021	Share premium	Employee options unexercised	Employee options exercised	Treasury shares	Hedges valuation	Transactions with NCI	Total Reserves
As at 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 transaction 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 – 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 at 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 2022

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 2022.

Treasury shares

As of 31 December 2022 the Group had 341 645 treasury shares for a total purchase value of EUR 3.7 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 2022:


	Transactions with NCI	Non-controlling interest	Total Equity
Acquisition of non-controlling interests in AmRest d.o.o.	(1.0)	(1.3)	(2.3)
Dividends for non-controlling shareholders	-	(1.8)	(1.8)
Total transactions with non-controlling interests	(1.0)	(3.1)	(4.1)

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)

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 repayments, the net investment hedge has been decreased. As of

31 December 2022 , the value of net investment hedge amounts to PLN 196 million (PLN 224 million as of 31 December

2021).

AmRest Sp. z o.o., a Polish subsidiary, with PLN as functional currency, is a borrower of external EUR financing. The

bank loan has been hedging the net investment in its EUR subsidiaries until 31 December 2021 and throughout the

period ending 31 December 2022. Following scheduled repayments and an increase during 2022 in the financing of EUR

23 million regarding to the Tranche G of the syndicated bank loan, the net investment hedge as of 31 December 2022 is

EUR 177 million (176 million as of end of 2021).

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 2022 and 2021 hedges were fully effective.

As of 31 December 2022 the accumulated value of currency revaluation recognised in reserve capital (resulting from net

investment hedges) amounted to EUR 2.9 million, and deferred tax concerning this revaluation EUR 0.5 million.

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 2022 amounted to EUR 19.2 million. The most significant impact on that

balance had a change in Russian rouble in the amount of EUR 18.8 million, Polish zloty of EUR 2.9 million, Czech crown

of EUR 1.6 million and Hungarian forint of EUR (2.6) million. 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 rouble in the amount of EUR

5.1 million, Chinese renminbi of EUR 4.6 million and Czech crown of EUR 2.1 million.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Non-controlling interest

Key elements of non-controlling interests are presented in the table below:


	31 December 2022	31 December 2021
AmRest Coffee Sp. z o.o.	0.3	(0.4)
SCM Sp. z o.o.	3.8	2.8
AmRest Coffee s.r.o.	4.9	3.9
AmRest Kávézó Kft	0.4	0.3
AmRest d.o.o.	-	1.1
SCM s.r.o.	1.9	1.0
Sushi Shop Milan Sarl	(0.2)	0.1
Non-controlling interests	11.1	8.8

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. and SCM Czech s.r.o. in total amount of EUR 1.8 million.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

25. Non-controlling interests

At 31 December 2022 and 31 December 2021 the summarised financial information for each subsidiary that has non-controlling interests is as follows:

Summarised balance sheet


31 December 2022	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 Milan Sarl
Current assets	13.6	3.9	2.4	11.1	7.6	-	0.2
Current Liabilities	9.9	6.2	9.7	5.7	4.0	-	0.2
Total current net assets	3.7	(2.3)	(7.3)	5.4	3.6	-	-
Non-current assets	28.8	16.6	23.7	2.0	-	-	(0.4)
Non-current liabilities	16.0	11.0	14.4	0.4	-	-	0.1
Total non-current net assets	12.8	5.6	9.3	1.6	-	-	(0.5)
Net assets	16.5	3.3	2.0	7.0	3.6	-	(0.5)

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

*Summarised balance sheet of AmRest d.o.o. is presented till acquisition of non-controlling interests shares i.e. till 6 September 2022.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Summarised income statement


year ended 31 December 2022	AmRest Coffee s.r.o.	AmRest Kávézó Kft	AmRest Coffee Sp. z o.o.	SCM Sp. z o.o.	SCM Czech s.r.o.	AmRest d.o.o.*	Sushi Shop Milan Sarl
Total sales	38.8	21.3	40.3	42.6	38.5	14.2	0.9
Profit before tax	6.0	1.1	4.0	7.5	2.1	0.7	(0.8)
Income tax expense/income	1.2	0.3	-	1.4	0.4	0.1	-
Profit/loss for the period	4.8	0.8	4.0	6.1	1.7	0.6	(0.8)
Profit/loss for the period allocated to NCI	0.9	0.1	0.7	2.8	0.9	0.1	(0.2)

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)

*Summarised income statement of AmRest d.o.o. for year 2022 is presented till acquisition of remaining non-controlling interests shares in September 2022.

** Non- controlling interest on Sushi Shop Group entities existed in 2022 for Sushi Shop Milan SARL.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 2022

26. Earnings per share

As of 31 December 2022 and 2021 the Company has 219 554 183 shares issued.

Table below presents calculation of basic and diluted earnings per ordinary share for the year 2022 and 2021.

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 2022	31 December 2021
EPS calculation with the effect of share split	31 December 2022
Net profit attributable to shareholders of the parent (EUR millions)	1.3	32.9
Weighted average number of ordinary shares for basic EPS (in thousands of shares)	219 269	219 352
Weighted average number of ordinary shares for diluted EPS (in thousands of shares)	219 269	219 852
Basic earnings per ordinary share (EUR)	0.01	0.15
Diluted earnings per ordinary share (EUR)	0.01	0.15

Reconciliation of weighted-average number of ordinary shares for basic EPS:


Weighted-average number of ordinary shares in thousands of shares	31 December 2022	31 December 2021
	31 December 2022	31 December 2021
Shares issued at the beginning of the period	219 554	219 554
Effect of treasury shares held	(357)	(497)
Effect of share options vested	72	295
Weighted average number of ordinary shares for basic EPS	219 269	219 352

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 2022	31 December 2021
	31 December 2022
Weighted-average number of ordinary shares for basic EPS	219 269	219 352
Effect of share options unvested	-	500
Weighted average number of ordinary shares for diluted EPS	219 269	219 852

At 31 December 2022, 10 567 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 2021, there were 9 599 thousand

of options with anti-dilutive effect.

27. Borrowings


Long-term	31 December 2022	31 December 2021
Syndicated bank loans	497.3	466.2
SSD	35.5	35.5
Other bank loans	18.7	40.2
Total	551.5	541.9


Short-term	31 December 2022	31 December 2021
Syndicated bank loans	68.6	59.2
SSD	0.4	48.0
Other bank loans	33.2	15.5
Total	102.2	122.7

As of the end of the year 2022, bank loans and bond debt (SSD) amounted EUR 653.7 million, whereas at the end of

year 2021 EUR 664.6 million.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Bank loans and bonds


Currency	Loans/Bonds	Effective interest rate	31 December 2022	31 December 2021
PLN	Syndicated bank loan	3M WIBOR+margin	87.1	105.6
EUR	Syndicated bank loan	3M EURIBOR+margin	478.9	419.8
EUR	Schuldscheinedarlehen Bonds	6M EURIBOR/fixed +margin	35.9	83.5
EUR	Bank loans Germany	fixed	1.4	-
EUR	Bank loans France	fixed	30.1	30.2
EUR	Bank loans Spain	fixed	20.3	25.3
CZK	Bank loans Czech	Pribor + Margin	-	0.2
			653.7	664.6

Syndicated bank loan

As at 31 December 2022 syndicated bank financing entered into in 2017, with further amendments, accounts for the

majority of AmRest debt. In December 2021 Group has signed an amendment to syndicated bank loan agreement

providing an extension the repayment of the loan.

During 2022, Group has signed an amendment to syndicated bank loan agreement ensuring the disbursement of tranche

G in the amount of EUR 100 million. On 27 September 2022, Group disposed the full amount of this credit line.

Additionally, the amount of syndicated bank loan has been increased by EUR 27 million from Tranche D and followed by

scheduled repayments in the amount of EUR 56 million in September 2022. During October, the Group repaid the

Tranche D in the amount of EUR 25 million.

The outstanding amount of syndicated bank loan as of 31 December 2022 is EUR 566 million.

Details of syndicated bank financing originated in 2017, with further amendments, as of 31 December 2022, 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 repayments made in December 2021 and December 2022:


Tranche(*)	Maximum amount (million)	Date added	Purpose
A	EUR 175	October 2017	Refinancing of bank debt, general corporate purposes
B	PLN 210	October 2017
C (fully repaid in Q1 2019)	CZK 0	October 2017
D	PLN 450	October 2017
E	PLN 196	June 2019	Refinancing of Polish bonds
F	EUR 133	October 2019	M&A, general corporate purposes
G	EUR 100	September 2022	General corporate purposes

* Approximate total amount: EUR 560m. For the tranche D base currency is PLN and optional currency is EUR.

•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 and AmRest SAS France. 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. Both

ratios are calculated according to the definitions mentioned in the loan agreement. Additionally, the Group is obliged

to maintain the equity ratio (expressed as a percentage), calculated as total equity divided by the total assets, above

8%. As of the date of this report, AmRest is in compliance with the three financial covenants.

Two other sources of AmRest financing are:

•Schuldscheinedarlehen (“SSD” – debt instrument under German law) issued by AmRest Holdings SE.

As of 31 December 2022, payables concerning SSD issued amount to EUR 35.9 million. During the year Group has

made repayments in amount of EUR 52.1 million.The table below presents all SSD issues and their maturities after

repayments done 2022:


Issue date	Amount (EUR million)	Interest rate	Maturity date	Purpose
7 April 2017	6.0	Fixed	5 April 2024	Refinancing, general corporate purposes
3 July 2017	20.0	Fixed	3 July 2024
3 July 2017	9.5	Variable	3 July 2024

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

•State supported loans taken on by Spanish and French subsidiaries in Q2 2020 and guaranteed by the governments.

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 10 million. As of 31 December 2022, EUR

17.6 milion is still available for drawing for the Spanish entities.

As of 31 December 2022, payables concerning State Supported Loans amount to EUR 50.4 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	Balance as at 31 December 2022	Available at 31 December 2022	Maturity
Spain	Restauravia Food SL, Pastificio Food SL	Fixed	70%	20.3	17.6	3-4 years
France	Sushi Shop Restauration SAS, AmRest Opco SAS	Fixed	90%	30.1	0	1-4 years
				50.4	17.6

In January 2023 Group has signed the annex based on which the repayment of French EUR 10.0 million loans was

prolonged from year 2023. After the amendment, the loans will be repaid during the period 2023 to 2026.

The maturity of long- and short-term loans as of 31 December 2022 and 2021 is presented in the note 35.

The Group has the following unused, awarded credit limits as of 31 December 2022 and 31 December 2021:


	31 December 2022	31 December 2021
- Syndicated bank loan	28.2	33.0
- Bank loan/Credit line Spain	17.6	17.7
- Bank loan/Credit line Poland	4.2	-
- Bank loan/Credit line Germany	4.6	-
- Bank loan/Credit line Czech	0.5	-
	55.1	50.7

The table below presents the reconciliation of the debt:


2022	Bank loans	SSD	Total
As of 1 January	581.1	83.5	664.6
Payment	(85.3)	(47.0)	(132.3)
Loan taken/ new contracts	127.2	1.4	128.6
Accrued interests	20.7	1.0	21.7
Payment of interests	(22.9)	(1.7)	(24.6)
Exchange differences	(3.0)	(1.3)	(4.3)
As of 31 December	617.8	35.9	653.7


2021	Bank loans	SSD	Total
As of 1 January	668.4	102.4	770.8
Payment	(88.5)	(18.4)	(106.9)
Loan taken/ new contracts	1.1	-	1.1
Accrued interests	14.9	2.2	17.1
Payment of interests	(16.2)	(2.7)	(18.9)
Loan forgiven	(2.7)	-	(2.7)
Result on debt modification and extension fees	4.8	-	4.8
Exchange differences	(0.7)	-	(0.7)
As of 31 December	581.1	83.5	664.6

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, 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., 31 December 2024.

Additionally, pledge on shares of Sushi Shop Group and AmRest SAS France has been established as security for the

bank financing.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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 2022, 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.

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.

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.

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

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 for three years following the date of approval of each grant). 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. The grant date for each plan will take place at the vesting

date of the 1st tranche. This LTI Program will be the basis for grants that are going to be approved in following years.

Stock Option and Management Incentive Plans

The terms and conditions for the share options outstanding as of 31 December 2022 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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


Grant date	Terms and conditions for vesting of the options	The maximum term of options	Option exercise price in EUR	Method of settlement
April 30, 2012	1-5 years, 20% per annum	10 years	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	3-5 years, 60% after 3rd year, 20% after 4th and 5th year	10 years	5.78	Equity
Plan 7 - MIP	3-5 years, 33% p.a.	10 years
February 10, 2020			15.10	Equity
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 2022 and 2021:


Number of option 2022	WAEP in EUR (before indexation)	Plan 7	Plan 6	Plan 5	Plan 4	Plan 2
At the beginning of the period	8.63	2 400 000	2 913 620	1 600 000	5 799 400	545 752
Granted during the period	-	-	-	-	-	-
Exercised during the period	2.60	-	-	-	-	(39 450)
Expired during the period	9.87	-	-	(900 000)	(368 200)	(37 820)
Forfeited during the period	8.16	-	(470 620)	-	(724 100)	-
Outstanding at the end of the period	8.56	2 400 000	2 443 000	700 000	4 707 100	468 482
- including exercisable as of the end of the period	9.37	-	-	300 000	3 644 680	468 482
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	6 779 850	932 402
Granted during the period	7.76	600 000	-	-	-	-
Exercised during the period	4.26	-	(5 000)	-	(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	-	-	966 667	2 219 460	545 752

The weighted average share price at the dates of exercise of the options was EUR 4.07 in 2022 and EUR 6.79 in 2021.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

The weighted average remaining contractual life for the share options outstanding as of 31 December 2022 was 7.31

years (2021: 7.62 years).

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. In 2022 the

Group has not decided to grant any options to employees. In 2021 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%

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.

Long Term Incentive Plans

The principal terms and conditions for each LTI plan as of 31 December 2022 are presented in the table below:


LTI Plan	Approval date	Terms and conditions for vesting of the options	Performance condition factor
LTI 2021	23 December 2021	3-5 years, 60% after 3rd year, 20% after 4th and 5th year	Global EBITDA 2021-2023
LTI 2022	30 November 2022	3-5 years, 60% after 3rd year, 20% after 4th and 5th year	Global EBITDA 2022-2024

The LTI Program is not an option program – Participants will receive AmRest shares instead of share options. The rights

under the LTI Plan were granted as an amount denominated in payroll currency of each Participant, which will be

converted into shares at the vesting date of the 1st tranche. The number of shares to be received will be determined

according to the following formula:

N = [(Grant ÷ ExRate) ÷ VWAP] × M,

where:

-Grant is the amount of the grant denominated in payroll currency,

-ExRate is the average exchange rate for the month preceding the vesting date of the 1st tranche that is applicable to

the payroll currency being converted into EUR,

-VWAP is the volume weighted average price of AmRest expressed in EUR, during the month preceding the vesting

date of the 1st tranche,

-M is the multiplier, the amount of which will depend on the degree to which non-market performance conditions are

met (minimum 0%, maximum 200%).

The fair value of the LTI grant is periodically remeasured using the assumptions of the Black-Scholes model. The fair

value of the LTI grant was determined on the basis of the following parameters:

- Share price at the valuation date: 4,17 EUR

- No expected dividends

- Risk-free interest rates for each currency according to the table below:


Currency	BGN	CNY	CZK	EUR	GBP	HRK	HUF	PLN	RON	RSD	RUB
Rate	2.78%	2.29%	5.52%	2.55%	3.58%	3.16%	10.81%	6.54%	6.51%	5.39%	8.59%

The amounts for each plan determined based on the valuation above are listed in the table below:


2021	LTI 2021	LTI 2022
At 1 January 2021	-	-
Granted during the period	7.0	-
At 31 December 2021	7.0	-
2022
Granted during the period	-	7.6
Forfeited and remeasured during the period	(1.1)
Outstanding as of 31 December 2022	5.9	7.6
- including exercisable as of the end of the period	-	-

Cost of plans recognized during the period are recognized based on the above fair values adjusted by the multiplier M.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Share-based payments costs and liabilities

The Group recognises accrual for equity-settled options in reserve capital. The amounts as of 31 December 2022 and

31 December 2021 are presented in a table below:


	31 December 2022	31 December 2021
Reserve capital - Plan 2	1.2	1.2
Reserve capital - Plan 4	11.4	9.5
Reserve capital - Plan 5	1.2	2.9
Reserve capital - Plan 6	1.0	0.6
Reserve capital - Plan 7	1.1	0.6
Reserve capital - Plan 8	1.3	-
	17.2	14.8

The Group recognises liability for cash settled options. The liabilities related to Plan 2 amounts to EUR 0.1 million both as

of 31 December 2022 and 31 December 2021.

The costs recognised in connection with the plans relating to incentive programs for the years ended 31 December

2022 and 2021 respectively are presented below:


	YEAR ENDED
	31 December 2022	31 December 2021
Employee stock option plan 2	0.2	0.3
Employee stock option plan 4	2.7	1.4
Employee stock option plan 5	0.2	(2.3)
Employee stock option plan 6	0.5	0.5
Employee stock option plan 7	0.5	0.4
Long term incentive plan 8	1.3	—
	5.4	0.3

Pension, health care and other contributions

The costs recognised in connection with the employee benefits contributions for the years ending on 31 December 2022

and 31 December 2021 respectively are presented below:


	2022	2021
Pension, health care contributions and other	106.1	109.9

Apart from those specified above, there are no other liabilities and costs in respect of employee benefits.

Employee information

The information required under the reporting requirement established in Spanish Mercantile Law and Spanish

Commercial Code:

AmRest Group average annual employment distributed by professional category:


	2022	2021
Senior Executives	8	8
Office employees	2 279	2 171
Restaurant employees	47 852	44 301
Total	50 139	46 480

Year end distribution of Group employees and members of the Board of Directors by gender:


	31 December 2022		31 December 2021
	Female	Male	Female	Male
Board of Directors (not employees)	2	5	2	5
Senior Executives	-	8	-	8
Office employees	1 350	969	1 173	1 030
Restaurant employees	27 612	20 994	26 135	20 193
Total	28 964	21 976	27 310	21 236

In 2022 Spanish AmRest Group companies employed on average 16 people with a disability greater than or equal to 33%

(15 in 2021).

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

30. Provisions

Changes in the balance of provisions are presented in the table below:


2022	As at 1 January	Increases	Releases	Usage	Exchange differences	As at 31 December	of which presented as short term
Asset retirement obligation	9.6	0.2	-	(0.5)	-	9.3	-
Court and legal proceedings	5.4	0.1	(1.1)	(1.5)	(0.1)	2.8	-
Provision for tax risks	0.8	-	(0.3)	-	-	0.5	-
Franchise and development agreements risks	12.0	4.5	(3.9)	(5.4)	-	7.2	2.9
Other provisions	5.6	1.5	(3.3)	(0.4)	(0.1)	3.3	1.5
Total	33.4	6.3	(8.6)	(7.8)	(0.2)	23.1	4.4


2021	As at 1 January	Increases	Releases	Usage	Exchange differences	As at 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

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 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 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 the Polish

Supreme Administrative Court to the 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 and on 7 July 2022 AmRest Sp. z o.o. received the

decision based on which the Company has not been obliged to pay any tax liability for the period December 2017 –

March 2018 due to the binding power of the individual ruling of the Ministry of Finance held AmRest Sp. z o.o.

b) 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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

o.o. received the notification that the proceedings are suspended due to request for preliminary ruling submitted by the

Polish Supreme Administrative Court to the 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 Tax Authorities in respect to opening the

suspended tax inspection covering VAT returns for the period April – September 2018. Due to procedural reasons on

28 September 2022, the Head of the Customs and Tax Office initiated new customs and tax inspection on VAT for the

period from April to September 2018. On 23 January 2023 AmRest Sp. z o.o. received the control result. The tax

authorities identified irregularities, but AmRest Sp. z o.o. is covered by binding individual ruling of the Ministry of Finance

issued for AmRest Sp. z o.o. and no tax liability should arise.

c) 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 Annual Financial Statements, the proceedings have not concluded.

The Tax Office set new deadline for proceedings.

The Group analysed 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 2022 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.

d) 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.

The questioned decision of the Tax Authorities has been repealed by the Court on 6 April 2022 and new decision should

be issued by the Tax Authorities. As of the date of publication of these Consolidated Annual Financial Statements the

proceedings have not concluded.

Tax inspections in other Group companies

e) 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 communication from the tax office extending the tax audit by including the

financial year 2016, during which the acquisition of the Company by AmRest was completed. The tax audit covered 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.

On September 26, 2022, the tax audit ended with a tax assessment amounting to EUR 410k for VAT (already paid) and

EUR 421k for trade tax, which is being paid as required by the competent tax administration (currently paid EUR 119 k).

f) On 9 June 2022, the Suhi Shop Group received two tax assessments related to the computations of Corporate Income

Tax (CIT). The first assessment included two different corrections from CIT computations, i) an increase of tax payable for

CIT 2019 amounting to EUR 7 million which was paid by the Company on 1 August 2022 and it did not file allegations and

ii) correction of the CIT 2018-2019 for some other aspects (e.g. limit of deductibility of financial expenses). However, the

Company did not agree with the latter correction and filed allegations before the Tax Authorities. Those allegations were

rejected on 7 February 2023, and the Company has two months to file allegations before the French Courts.

The second settlement corresponded to the non-filing of the 2020 CIT return, so the tax authorities estimated the tax

payable based on the 2019 tax result, which resulted in a tax liability of EUR 2.8 million. The Company filed allegations in

August 2022 and received on 14 February 2023 a favourable resolution regarding the allegations submitted. Therefore,

the Group does not have any tax liability in relation to this second settlement.

The entity provided a bank guarantee for EUR 3.1 million covering both the CIT tax settlements appealed for 2018, 2019

and 2020.

g) On 22 July 2019 Pastificio 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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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 which were rejected. On 21 December 2022, the

companies filed before the National Audience the allegations writ and to date the Court's resolution has not been

received.

On July 2022 the Company received the tax settlement related to municipality tax (business activity tax) of it´s the Central

Kitchen activity (Lleida) related to fiscal years 2018 to 2021 for which it was claimed an additional tax liability amounting

to EUR 203k. The company agreed with the final tax assessment and paid on 29 July 2022.

h) 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. Both tax audits have been concluded in April 2022 without any

relevant assessment.

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 2022 and 31 December 2021 cover the following items:


	31 December 2022	31 December 2021
Trade payables	104.2	89.4
Accruals and uninvoiced deliveries	78.8	67.1
Employee payables	21.0	17.9
Employee related accruals	32.7	33.2
Accrual for holiday leave	13.1	12.3
Social insurance payables	22.3	13.7
Other tax payables	25.2	20.7
Investment payables	24.2	14.2
Contract liabilities – initial fees, loyaltee programs, gift cards	11.1	10.2
Deferred income	5.9	6.5
Other payables	5.3	5.6
Total trade payables and other liabilities	343.8	290.8

The information required from Spanish AmRest Group companies under the reporting requirement established in Spanish

Law 18/2022 of 29 September and introduced measures to combat late payments in commercial transactions, is as

follows:


	2022	2021
Number of days:
Average payment period to suppliers	46.6	41.1
Ratio of payments	40.4	42.8
Ratio of outstanding invoices	47.0	26.2
Millions of EUR:
Total payments	205.4	154.4
Outstanding invoices	27.1	16.7
Amount payments < 60 days	84.2	-
Other:
Number of invoices paid < 60 days	46 444	-
% Amount of payments made < 60 days out of the total payments	82%	-
% Number of invoices paid < 60 days out of the total payments	77%	-

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 to make the renovations

required to maintain the identity, reputation and high operating standards of each brand. Details of the agreements

together with other future commitments have been described in note 1 and 38d.

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Group shareholders

As of 31 December 2022, FCapital Dutch, S.L. (formerly 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, S.L.

related parties were noted.

Transactions with members of the Board of Directions and Senior Management Personnel

The remuneration of the Board of Directors and Senior Management Personnel (for these purposes, Senior Management

Personnel is understood to be those executives who report directly to the Board of Directors, the chief executive officer or

the first executive of the Company, including the person responsible for Internal Audit) paid by the Group was as follows:


	31 December 2022	31 December 2021
Remuneration of the members of the Board of Directors	0.8	0.7
Remuneration of Senior Management Personnel:
- Remuneration received by the Senior Executives*	3.3	3.3
- Gain on share-based remuneration systems	-	-
Remuneration of Senior Management Personnel	3.3	3.3
Total compensation paid to key management personnel	4.1	4.0

*includes the total amount of the variable remuneration in cash (Short-Term Incentive Program) that is recognized in the year it is paid.

Directors Remuneration Policy was approved at the General Shareholders’ Meeting held on 12 May 2022 and will remain

in force until 2025 unless the General Shareholders’ Meeting so resolves to amend or replace it.

The Group’s Senior Management Personnel participates in the employee share option plans (note 29). In relation to the

stock option plans and Management incentive plans in the year ended 31 December 2022 the fair value of outstanding

options decreased by EUR 1,9 million, due to a significant amount of expired options. In the year ended 31 December

2021 the fair value decreased by EUR 4.5 million.


	31 December 2022	31 December 2021
Number of options outstanding (pcs, after split)	3 285 000	4 071 333
Number of available options (pcs, after split)	352 000	912 000
Fair value of outstanding options as at grant date (EUR millions)	3.5	5.4

The Group's Senior Management Personnel participates in the Long-Term Incentive (LTI) Program which has been

started in 2021. The LTI grants will vest according to a 5-year agenda (60% after 3rd year, 20% after 4th year, 20% after

5th year). The first vesting will take place on 31st May 2024. As of 31 December 2022 the fair value of all grants related to

key management equals EUR 1.9 million. By the end of the year ended 31 December 2022 the cost of LTI related to key

management amounted to EUR 1.0 million.

As of 31 December 2022 and 2021, the Group had no outstanding balances with the Senior Management Personnel,

except for the accrual and payment of annual bonuses to be paid in the first quarter of the following year.

As of 31 December 2022 and 2021, the Group's members of the Board of Directors had no pension fund or life insurance.

Stock Option and Management Incentive Plans as well as LTI Program in which Senior Management Personnel

participates are detailed above and in note 29. Members of the Board of Directors do not participate in such programs.

Furthermore, the Group had not granted any advance, loan or credit in favour of the Board Members or the Senior

Management. As of 31 December 2022 and 31 December 2021 there were no material 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 2022. There were also no material receivables and

payables with other related entities as of 31 December 2022 and 31 December 2021.

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 2022 and 2021 the Group did not have equity instrument measured at fair value. There were no

transfers between fair value hierarchy levels in year 2022 and in year 2021.

Classification of key classes of financial assets and liabilities with their carrying amounts is presented in note below:

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


31 December 2022	Note	FVTPL	Financial assets at amortised cost	Financial liabilities at amortised cost
Financial assets not measured at fair value
Rental deposits	18	-	23.6	-
Trade and other receivables from clients	20	-	89.1	-
Cash and cash equivalents	22	-	229.6	-
Financial liabilities not measured at fair value
Loans and borrowings	27	-	-	617.8
SSD	27	-	-	35.9
Lease liabilities	14	-	-	878.7
Trade and other liabilities to suppliers	32	-	-	278.4


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	-	-	581.1
SSD	27	-	-	83.5
Lease liabilities	14	-	-	822.9
Trade and other liabilities to suppliers	32	-	-	245.2

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.

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 342.3

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 2022 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 2022 and 31 December 2021 is

presented in the table below.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


	Current	Overdue in days				Total
2022		Less than 90	91-180	181 - 365	More than 365
Trade and other receivables	74.8	8.0	5.8	3.3	8.7	100.6
Loss allowance (note 20)	(1.1)	(0.2)	(1.3)	(2.3)	(8.3)	(13.2)
Total	73.7	7.8	4.5	1.0	0.4	87.4


	Current	Overdue in days				Total
2021		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

Value of loss allowance for receivables as of 31 December 2022 and 31 December 2021 is presented in table below:


	31 December 2022	31 December 2021
Value at the beginning of the period	(12.9)	(12.2)
Allowance created	(4.5)	(3.8)
Allowance released	2.0	2.9
Allowance used	2.6	0.1
Other	(0.4)	0.1
Value at the end of the period	(13.2)	(12.9)

Interest rate risk

Bank borrowings drawn by the Group are most often based on fluctuating interest rates (note 27). As of 31 December

2022 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

analysed in quarterly periods.

Had the interest rates on loans denominated in Polish zlotys during the year ended 31 December 2022 been 30 base

points higher/lower, the profit before tax for the period would have been EUR 285 thousand lower/higher (2021: EUR

329.1 thousand).

Had the interest rates on loans denominated in euro during the year ended 31 December 2022 been 30 base points

higher/lower, the profit before tax for the period would have been EUR 653 thousand lower/higher. (Had the interest rates

on loans denominated in euro during the 12 months ended 31 December 2021 been 30 base points higher/lower, the

profit before tax for the period 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.

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 2022

and 31 December 2021 is presented in the table below:


31 December 2022
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	Carrying amount
Trade and other liabilities to suppliers	211.3	-	-	-	-	-	211.3	211.3
Loan instalments	97.9	544.1	7.4	3.3	-	-	652.7	652.7
Interest and other charges	26.6	22.9	0.2	-	-	-	49.7	-

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


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	Carrying amount
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	-

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.

36. Audit fees

The services commissioned to the auditors meet the independence requirements stipulated by the Spanish Audit Law

22/2015, July 20. PwC Auditores S.L., and other related companies rendered professional services to the Group during

the years ended 31 December 2022 and 2021, as detailed below:


2022	PwC Auditores, S.L.	Other entities affiliated with PwC International	Other auditors	Total
Audit and other assurance services	0.3	0.6	0.4	1.3
Other verification services	0.1	-	-	0.1
Other services	-	-	-	-
	0.4	0.6	0.4	1.4

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

Other assurance services include limited review of interim financial statements. Other verification services include the

verification of the non-financial information in the annual reports and agreed upon-procedures performed by the auditors.

The amounts detailed in the above table include the total fees for 2022 and 2021, irrespective of the date of invoice.

37. Events after the reporting period

In connection with the sale of its KFC stores in Russia (the “Business”), AmRest informs that, subsequent to 31

December 2022, Unirest LLC (“Unirest”), an affiliate of Yum! Brands Inc. (“Yum! Brands”), has exercised its right of first

refusal pursuant to the underlying franchise agreements for itself or for the benefit of a third party, and has appointed

Smart Service Nord Ltd (“Smart Service”) as the purchaser of the Business.

Smart Service is operated by two Russian KFC franchisees, Messrs. Konstantin Kotov and Andrey Oskolkov and,

according to public information, is the entity with which Yum! Brands Inc. entered into a sale and purchase agreement to

transfer ownership of its Russian KFC restaurants in October of 2022.

As a consequence of Unirest’s exercise of its right of first refusal, AmRest has terminated the sale and purchase

agreement entered into with OOO Almira on 6 December 2022, and signed a new sale and purchase agreement with

Smart Service on 25 February 2023 substantially in the same terms and conditions of the agreement between AmRest

and OOO Almira.

Therefore, the new sale and purchase agreement is subject to the approval by the anti-trust agency of Russia and to

other regulatory approvals which could be applicable in Russia.

As of today, and according to the terms of the sale and purchase agreement, AmRest expects to receive a minimum of

EUR 100 million from the sale of the Business.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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.

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

The Group uses European Central Bank‘s exchange rates for currency translations. For Russian rouble the Group is

using exchange rate as published by National Bank of Russia as European Central Bank has suspended its publication of

a euro reference rate for the Russian rouble from 1 March 2022.

The functional currency of none of the subsidiaries is the currency of a hyperinflationary economy as at 31 December

2022.

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

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

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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.

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 utilisation (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 2022

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.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-

line basis. If the group is reasonably certain to exercise a purchase option, the right of-use asset is depreciated over the

underlying asset’s useful life.

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 – Amendments 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 applied 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.

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 labour, costs of architecture design, legal

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a

substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other

borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that

an entity incurs in connection with the borrowing of funds.

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.

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:

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022


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
Favourable 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:

othe consideration paid,

othe amount of all non-controlling interest in the acquiree, and

oin 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.

Impairment 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.

Restaurants tests - procedure performed twice a year

Usually individual restaurants are considered separate CGUs in Group.

Twice a year out of all Group’s own restaurants that are operating over 24 months in AmRest structures are checked for

impairment indicators. If at least one of the below indicators is met, then a restaurant impairment test is performed.

•Restaurant EBITDA for last 12 month is negative.

•Store was already fully or partially impaired during previous impairment processes.

•Store is planned to be closed or sold after 3 months.

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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 analysed:

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.

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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,

-FVTPL: 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.

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial

position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on

a net basis, to realise the assets and settle the liabilities simultaneously.

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:

•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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

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).

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.

Contingent liabilities and assets

A contingent liability is disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of

economic benefits to the entity. Contingent assets are not recognised in financial statements since this may result in the

recognition of income that may never be realised. A contingent asset is disclosed, where an inflow of economic benefits is

probable.

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,

•Effect of accounting for share-based payments,

•Treasury shares,

•Effect of hedges valuation,

•Effect of accounting for transactions with non-controlling interests.

Share capital

Ordinary shares are classified as share capital. 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”.

Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion

of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

39. Changes in accounting policies, reclassification and restatement of

comparatives summary

Newly applied standards, amendments and interpretations

The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those

followed in the preparation of the Group’s consolidated financial statements for the year ended 31 December 2021,

except for the adoption of new standard, interpretations, and amendments to standards effective as of 1 January 2022.

The amendments and interpretations below were applied in 2022 and had no significant impact on the accounting policies

applied.

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 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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

40. Standards issued but not yet effective

Below amendments to standards are effective for annual periods beginning after 1 January 2023 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 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. It is expected that standard will not have a material impact on Group.

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. It is expected that

standard will not have a material impact on Group.

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. It is expected that standard will not have a material impact on

Group.

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. It is

expected that standard will not have a material impact on Group.

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 and Non-current Liabilities with Covenants

These amendments clarify how conditions with which an entity must comply within twelve months after the reporting

period affect the classification of a liability. The new guidance will be effective for annual periods starting on or after 1

January 2024. The amendments are to be applied prospectively and will be reflected in accounting for future transactions

of Group. The Group will implement these amendments for future transactions and it is expected that standard will not

have a material impact on Group.

Amendment to IFRS 16 – Leases on sale and leaseback

Amendments were issued in September 2022. These amendments include requirements for sale and leaseback

transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale

and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an

index or rate are most likely to be impacted. Effective date Annual periods beginning on or after 1 January 2024. it is

expected that standard will not have a material impact on Group.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

Signatures of the Board of Directors



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

Madrid, 27 February 2023


AMREST GROUP Consolidated Financial Statements
for the year ended 31 December 2022

AmRest Holdings SE

28046 Madrid, Spain

CIF A88063979 | +34 91 799 16 50 | amrest.eu

Directors’ Report

for the year ended 31 December 2022

AmRest Holdings SE capital group

27 FEBRUARY 2023

AmRest Holding SE

Directors’ Report

for the year ended 31 December 2022

Contents


Financial highlights (consolidated data) ........................................................................................................................................................................................	6
Group Business Overview ...............................................................................................................................................................................................................	7
Financial and asset position of the Group .....................................................................................................................................................................................	8
Brands operated by the Group ........................................................................................................................................................................................................	17
Key investments ................................................................................................................................................................................................................................	19
Planned investment activities ..........................................................................................................................................................................................................	21
Significant events and transactions in 2022 .................................................................................................................................................................................	21
External Debt .....................................................................................................................................................................................................................................	22
Shareholders of AmRest Holdings SE ...........................................................................................................................................................................................	22
Changes in the Parent Company’s Governing Bodies ................................................................................................................................................................	23
Remuneration of the Board of Directors and Senior Management Personnel ........................................................................................................................	23
Changes in the number of shares held by members of the Board of Directors ......................................................................................................................	24
Transactions on own shares concluded by AmRest ....................................................................................................................................................................	24
Dividends paid and received ...........................................................................................................................................................................................................	24
Average period of payment to suppliers ........................................................................................................................................................................................	25
Subsequent events ...........................................................................................................................................................................................................................	25
Factors impacting the Group’s development ................................................................................................................................................................................	25
Basic risks and threats the Group is exposed to ..........................................................................................................................................................................	26
Activity in Research and Development area .................................................................................................................................................................................	29

NON-FINANCIAL INFORMATION STATEMENT .........................................................................................................................................................................	31
ANNUAL CORPORATE GOVERNANCE REPORT OF LISTED COMPANIES .....................................................................................................................	61
ANNUAL REPORT ON DIRECTOR REMUNERATION OF LISTED COMPANIES ...............................................................................................................	127

Signatures of the Board of Directors ..............................................................................................................................................................................................	145

Dear Shareholders,

I am proud to confirm that during 2022, at AmRest we proved to be exceptionally well-positioned to meet the challenges

of our exciting industry, which is currently undergoing one of the most interesting transformations in its history.

Over the course of the year, our business model once again demonstrated its resilience and ability to adapt, and even

thrive, under any circumstances, enabling us to reap the benefits of our international scope, sound strategic approach,

and diversification.

Our passionate employees lead by a knowledgeable and committed management team, provide our consumers in every

region with an extraordinary experience every day through our fully integrated omni-channel approach and technological

innovations.

At AmRest we are increasingly mindful of the importance of taking care of the environment, the people around us and

ourselves. Therefore we have continued to integrate sustainability into all of our processes and decisions, investing in

both the development of our human capital and in innovating, and in aligning our growth objectives, generating value for

our shareholders and society, and addressing the demands of our customers.

We have modified how we work and interact with each other and adopted new technologies which have become part of

our daily lives, allowing us to connect efficiently with each other regardless of where we are and to serve our customers,

embracing their changing consumption habits.

During the height of the pandemic, we effectively served the surge in demand for off-premise consumption with

excellence in delivery and take-out options and by constantly improving our technology and digital channels. In more

recent months, as consumers have begun to return safely and enthusiastically to our establishments, we have made sure

that they receive the friendly greeting, excellent service, and quality food that they demand in order to continue to honour

us with their patronage. Regardless of any global challenges we face, we continue to be committed to providing the best

value to our guests.

In 2022, the result of these actions led AmRest to generate our highest sales on record, at 2,422 million euros, with a

growth of more than 26%, compared to 2021, and double-digit increases in the number of transactions.

We also increased our capital investments by more than 40%, for a record resource allocation to modernising a

significant number of restaurants, as part of our renewed focus on our customers. We expect the number of restaurants in

the portfolio to begin to increase again soon, as we leverage the strategic adjustments we made during the year.

I am very optimistic about the opportunities that lie ahead for AmRest and I am certain we will continue to be the

European leader that inspires the global restaurant industry.

I wish to extend my appreciation to the AmRest team, for their hard work and professionalism, and to our Board of

Directors and shareholders for their continued support.

José Parés Gutiérrez

Chairman of the Board of Directors

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Financial highlights (consolidated data)


	YEAR ENDED		3 MONTHS ENDED
	31 December 2022	31 December 2021	31 December 2022	31 December 2021
Revenue	2 422.0	1 917.0	651.1	539.0
EBITDA*	384.4	359.1	94.3	98.0
EBITDA margin	15.9%	18.7%	14.5%	18.2%
Adjusted EBITDA**	389.8	364.9	97.2	99.9
Adjusted EBITDA margin	16.1%	19.0%	14.9%	18.5%
Profit from operations (EBIT)	74.6	103.1	25.6	28.2
EBIT margin	3.1%	5.4%	3.9%	5.2%
Profit before tax	27.5	57.9	8.0	14.0
Net profit	6.6	35.4	3.6	5.4
Net margin	0.3%	1.8%	0.5%	1.0%
Net profit attributable to non-controlling interests	5.3	2.5	1.1	1.0
Net profit attributable to equity holders of the parent	1.3	32.9	2.5	4.4
Cash flows from operating activities	362.5	356.9	112.9	108.6
Cash flows from investing activities	(138.1)	(96.6)	(53.9)	(36.9)
Cash flows from financing activities	(192.1)	(270.4)	(76.9)	(46.6)
Total cash flows, net	32.3	(10.1)	(17.9)	25.1
Average weighted number of ordinary shares for basic earnings per shares (in thousands)	219 269	219 352	219 265	219 389
Average weighted number of ordinary shares for diluted earnings per shares (in thousands)	219 269	219 852	219 265	219 745
Basic earnings per share (EUR)	0.01	0.15	0.01	0.02
Diluted earnings per share (EUR)	0.01	0.15	0.01	0.02
Declared or paid dividend per share	-	-	-	-

* EBITDA – Operating profit before depreciation, amortisation 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 2022	31 December 2021
Total assets	2 280.2	2 174.9
Total liabilities	1 949.0	1 867.4
Non-current liabilities	1 322.6	1 288.1
Current liabilities	626.4	579.3
Equity attributable to shareholders of the parent	320.1	298.7
Non-controlling interests	11.1	8.8
Total equity	331.2	307.5
Share capital	22.0	22.0
Number of restaurants	2 340	2 439

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

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 23 countries. The Group operates 2 340 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

Blue Frog and Bacoa. The company also has several virtual brands in its portfolio.

As of 31 December 2022, AmRest managed a network of 2 340 restaurants. Given the current scale of the business,

every day almost 51 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 1 127 restaurants,

accounting for 46.9% 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, 919 restaurants and generating 34.2% of AmRest’s revenues.

■Russia, where AmRest manages a network of 214 KFC restaurants.

■China, where the 80 restaurants of Blue Frog proprietary brand are operated.

And one additional segment “Other” which covers corporate office expenses. 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.

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, Bacoa and Sushi Shop). 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. Dine in

was the biggest sales channel previous to the pandemic, however despite the end of the restrictions dine in sales

volumes are still pending to recover previous levels.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Number of AmRest restaurants broken down by brands as at 31 December 2022


Brand	Restaurants*	Equity share	Franchise share	Share in total
Franchised	1 834	90%	10%	78%
KFC	991	100%	-	42%
PH	348	57%	43%	15%
Starbucks*	395	93%	7%	17%
Burger King	100	100%	-	4%
Own	506	55%	45%	22%
La Tagliatella	231	32%	68%	10%
Sushi Shop	193	68%	32%	8%
Blue Frog	80	86%	14%	3%
Bacoa	2	-	100%	<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 2022


Region	Restaurants*	Equity share	Franchise share	Share in total
Total	2 340	83%	17%	100%
CEE	1 127	99%	1%	48%
Poland	615	98%	2%	26%
Czech	220	100%	0%	9%
Hungary	149	100%	0%	6%
Romania	65	100%	0%	3%
Other CEE*	78	100%	0%	3%
WE	919	58%	42%	39%
Spain	339	53%	47%	14%
France	355	50%	50%	15%
Germany**	177	85%	15%	8%
Other WE*	48	56%	44%	2%
Russia	214	100%	0%	9%
China	80	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.

** 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

The year 2022 has been marked by the sanitary normalisation in most countries after mass vaccinations were carried out

among the population, leaving behind the restrictions on mobility and other constraints on daily life that the Covid-19

pandemic entailed. The big exception was China, conditioned by strict Covid zero policies. The second major event of

2022 was the start of the war in Ukraine. The economic repercussions of the conflict exacerbated inflationary pressures

around the world by generating a shock to energy production prices. Central banks have reacted by tightening their

monetary policies and consequently financing conditions. However, most economies have shown a high level of

resilience in terms of economic growth thanks to the strength of the labour market and to the high levels of savings

accumulated by households over the last years, which has allowed consumption levels to be maintained.

This challenging economic context has put in value the tremendous progress AmRest has made in recent years, from a

commercial perspective, in terms of technological transformation, efficiency gains and balance sheet strengthening.

The commercial positioning has resulted in an all-time revenue record. In 2022 AmRest generated revenues of

EUR 2 422 million.

The gradual easing of virtually all sanitary restrictions significantly boosted mobility, which, combined with AmRest's

omnichannel positioning, resulted in a significant increase in the Group's commercial activity. Guest changing habits have

accelerated over the last few years demanding meals fast prepared and served in a convenient fashion. Off-premises,

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

drive-through, delivery, and mobile are increasingly important and AmRest is adapting efficiently to those changes. As a

result, for the full year 2022, Group revenues reached EUR 2 422 million with a growth of 26.3% compared to 2021 and

same store sales (SSS) stood at 121. Quarterly revenues showed a growing trend supported by a strong increase in the

number of transactions and, to a lesser extent, by moderate price increases in order to minimise the impact of cost

pressure on margins. In this regards, the number of same store transactions (SST) index stood at 116.

During the fourth quarter of the year, revenues amounted to EUR 651.1 million, 20.8% higher than in 2021. Excluding

Russia, the Group's quarterly sales grew quarter-on-quarter by 1.5% and set a new all-time high.

AmRest Group revenue for the 12 months ended 31 December 2019-2022

The technology transformation is at the heart of AmRest's value proposition. Digital sales are growing strongly

and already account for more than half of all transactions in the QSR segment.

Technology and people are the two fundamental pillars underpinning AmRest's value proposition based on service

excellence and a compelling value for money consumer experience. The Group is immersed in an ambitious

technological transformation that already provides clear competitive advantages from front to back end.

AmRest maintains the majority of its IT services in Cloud which provides high flexibility, especially from the scalability

perspective, a key capability for a clearly growth oriented company. It also maintains a centralised and integrated e-

commerce platform for the entire Group that enables accuracy, minimisation of errors, speed of execution and stability of

systems, resulting in an exceptional experience for the growing number of customers who chose our digital channels

(web, mobile, kiosks or aggregators). Currently more than half of the sales from the QSR segment are generated through

digital channels, which allows for a more customized offer to our customers needs while increasing the value of the

transaction.

From a back office perspective, the development of new inventory management or forecasting systems, such as

AmChicken, is improving the management of our restaurants, reducing waiting times for our customers and at the same

time decreasing waste.

Finally, through Global BI, we have been able to connect in real time all the restaurants operated by the Group and

access valuable information on the millions of transactions that take place in the different countries and brands of

AmRest, providing a great starting point to better understand the preferences of our customers and adapt efficiently to

them.

Advances in efficiency as a differentiating element. EBITDA generated in 2022 amounted to EUR 384.4 million.

Cost pressures in 2022 were initially caused by supply side distortions or bottlenecks following the opening of economies

that had left the worst of the pandemic behind. Although bottlenecks in global value chains eased in 2022, the start of the

war in Ukraine led to a new supply shock in energy products and many commodities, including agricultural products. This

situation led to higher and more persistent inflationary pressure than expected, with a global scope that has aggravated

risks to economic growth, especially in Europe.

In this context, efficiency plays a key role as a differentiating element among our competitors, as it allows us to limit the

pass-through of costs to end consumers and to maintain a compelling price-value proposition for our guests.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

In order to control cost pressures and position AmRest to expand margins, an ambitious value-added programme has

been put in place which, through multidisciplinary teams from different brands and countries, identifies, develops, applies

and shares opportunities for savings in cost of sales, G&A, semis and CAPEX. This allows for increased visibility on

costs, facilitating the implementation of best practices, with clear traceable targets through operational KPIs and

establishing new routines and work processes. Some of the main pillars of work have been energy efficiency, process

control over suppliers, waste reduction, packaging management and delivery model.

In this context, AmRest generated an EBITDA of €384.4 million in 2022, up 7% compared to 2021. The highest figure in

AmRest's history excluding the extraordinary contribution of €37 million generated by the sale of Pizza Portal in 2019. By

geography, the excellent figures generated in Poland and the Czech Republic stand out. Despite all this, margins

deteriorated more than expected. The EBITDA margin reached 15.9% compared to 18.7% in 2021.

In the fourth quarter of the year, the EBITDA generated was EUR 94.3 million, -3.7% lower than in the same period of

2021. The comparison is affected by the the depreciation of the rouble and the impact of the business in China where

Covid infections soared in the country after the easing of restrictions, which caused a drastic disruption in our business

with the closure of restaurants and even a lack of available staff for delivery. However, a strong recovery of activity has

been observed as January progressed and Covid infections decreased. As of today, all AmRest restaurants in the country

are open and fully operational.

AmRest Group EBITDA for the 12 months ended 31 December 2019-2022

*percentage change excluding extraordinary gain in 2019.

The restaurant portfolio was adjusted with organic growth and strategic adjustments.

AmRest ended 2022 with a portfolio of 2 340 restaurants, 99 less than in the previous year. In terms of new openings,

109 new restaurants were opened in 2022, 79 owned and 30 franchised. As in previous years, there was a strong

seasonality and the last quarter of the year concentrated the highest number of openings with 63. Likewise, the portfolio

optimisation strategy continued to make progress with the closure of 63 non-strategic restaurants in the year, 16 of them

during the fourth quarter.

In addition, several business strategic adjustments were made. The Pizza Hut Russia business was transferred during

the second quarter of the year and Pizza Hut Germany during the fourth quarter. The combined number of restaurants

transferred amounted to 145, 20 of which were equity and 125 sub-franchised.

An agreement was signed in December for the sale of the remaining business in Russia comprising 214 KFC restaurants.

The closing of the transaction is subject to clearance by the Russian competition authority, the consent of Yum! Brands

Inc. and other regulatory approvals that may apply in Russia.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Number of AmRest Group restaurants at 31 December 2007-2022

Sustainable model that combines leverage control with growth

The high uncertainty about the evolution of inflation and geopolitical risks make difficult to predict the level of monetary

tightening that can be applied by the different central banks, which could condition the financing capacity of companies

and households in the future.

In this regard, one of the main priorities for AmRest's management in recent years has been to guarantee a sustainable

model, aligning the company's cash flow generating capacity with the investments made. In addition to reducing leverage

to levels considered prudent. At year end, financial leverage stood at 2x EBITDA (pre-IFRS16), which allows an adequate

capacity for action to face potential challenges and opportunities that may arise.

From the accounting point of view, shareholders' equity continued to strengthen. The Group's equity amounted to EUR

331 million after increasing by almost 8% during the year, despite the significant extraordinary impairment of EUR 52.9

million booked on the Russian business.

The Group's net financial debt amounted to EUR 425.4 million at year-end 2022, a reduction of more than EUR 200

million since the beginning of the pandemic, of which EUR 42 million was reduced during the year. In addition, a prudent

cash level of EUR 229.6 million is maintained, which represents an increase of EUR 31 million throughout the year. This

increase has been compatible with an acceleration in CAPEX to EUR 148.7 million compared to EUR 103.8 million in

2021. During the fourth quarter of 2022, CAPEX increased to EUR 71.7 million. On the other hand, the Group's operating

cash flow generation reached EUR 362.5 million for the year, of which EUR 112.9 million was generated in the fourth

quarter.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Net financial debt evolution and cash position

*Net Debt pre IFRS16

Profit attributable to shareholders amounted to EUR 1.3 million after registering a significant impairment of EUR

52.9 million in the Russian business.

The Group's gross margin remained at 11.1%, the same level as in 2021, despite the enormous cost pressure faced.

However, the EBIT margin fell by more than two percentage points to 3% as consequence of the extraordinary

impairment booked for the Russia business. The total non-financial asset impairments amounted to EUR 55.4 million.

As of 30 June AmRest recorded an impairment of EUR 52.9 million on its Russian business. Subsequently, on 6

December it announced the agreement to sell this business. The closing of the transaction is subject to the approval of

the Russian competition authorities, the consent of Yum! Brands Inc. owner of the brand and other regulatory approvals

that may be applicable in Russia. At year-end 2022, the net asset value of this business in the consolidated accounts

amounted to EUR 64.7 million.

Furthermore, an additional EUR 2 million was recorded for impairment at the restaurant business unit level. This figure is

clearly lower than the EUR 18 million recorded in the financial year 2021. Furthermore, the number of restaurants subject

to impairment in 2022 was 131 compared to 240 in the previous year.

Table 1. Structure of Group’s revenue


	YEAR ENDED
	31 December 2022		31 December 2021
Revenue	Amount	Share	Amount	Share
Central and Eastern Europe	1 133.8	46.9%	873.1	45.5%
Western Europe	829.2	34.2%	720.9	37.6%
Russia	295.3	12.2%	185.2	9.7%
China	82.6	3.4%	100.2	5.2%
Other*	81.1	3.3%	37.6	2.0%
Total	2 422.0	100.0%	1 917.0	100.0%

*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.

Revenues and profitability by segments

Central and Eastern Europe (CEE)

For the full year 2022, sales in this segment amounted to EUR 1 133.8 million, representing 46.9% of Group sales and a

YoY growth of 29.9%. EBITDA generated was EUR 215.0 million, EUR €18.8 million higher than in 2021, representing an

EBITDA margin of 19.0%. These figures represent record sales and EBITDA generation in nominal terms. The

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

commercial activity has been gaining momentum throughout the year, explained by the gradual recovery of dine-in,

following the sanitary normalisation, and by the increasing use of take away by our customers.

In the fourth quarter, revenues reached EUR 309.2 million, 23.4% higher than in the same quarter of 2021. EBITDA was

EUR 53.0 million, representing an EBITDA margin of 17.1%.

The restaurant portfolio reached 1 127 units after increasing by 41 restaurants with the opening of 58 new restaurants

and the closure of 17.

Western Europe (WE)

Revenues in this segment reached EUR 829.2 million, 15.0% higher than in 2021. The EBITDA generated amounted to

EUR 107.5 million with an EBITDA margin of 13.0%. Once more, sales were gaining momentum throughout the year,

mostly due to easing of restrictions that supported a gradual recovery of the dine in. Nonetheless, there were importance

divergencies among countries, while Spain and Germany recorded over 30% sales growth sales in France were stagnant

due to a lower delivery activity.

Revenues in the fourth quarter stood at EUR 223.5 million, 10.9% higher than in the same period of 2021. EBITDA

reached EUR 29.5 million, representing an EBITDA margin of 13.2%.

The total number of restaurants in the region stood at 919 units with a net decrease of 79 during 2022. From an organic

perspective there were 43 new openings and 36 closures, in addition to the transfer of the 86 Pizza Hut restaurants

located in Germany at year end.

Russia

Sales in Russia reached EUR 295.3 million, 59.4% more than in 2021 very affected by the exchange rate appreciation of

the rouble.

Due to the termination on 31 May 2022 of the Pizza Hut Master Franchise Agreement (MFA) in Russia, the Pizza Hut's

restaurants in this market were transferred during the second quarter of 2022 to a third party operator appointed by Yum!

The transfer resulted in the exit of 59 restaurants, 19 equity and 40 franchised

As of 30 June AmRest recorded an impairment of EUR 52.9 million on its remaining Russian business. Subsequently, on

6 December it announced the agreement to sell this business that comprises 214 restaurants. The closing of the

transaction is subject to the approval of the Russian competition authorities, the consent of Yum! Brands Inc. owner of the

brand and other regulatory approvals that may be applicable in Russia. At year-end 2022, the net asset value of this

business in the consolidated accounts amounted to EUR 64.7 million.

China

Revenues generated during the year stood at EUR 82.6 million, (17.6)% lower that in 2021. The EBITDA generated EUR

15.6 million, represents a margin of 18.8%. The business performance during the year was conditioned by the evolution

of the restrictions marked by the Zero Covid approach. Revenues in the fourth quarter were EUR 20.2 million, an

increase of 11% compared to 4Q20. EBITDA amounted to EUR 2.9 million with a margin of 14.4%%. After Covid

restrictions were lifted the infections spiked resulting in a significant business disruption. However, a strong recovery of

activity has been observed as January progressed and Covid infections decreased. As of today, all AmRest restaurants in

the country are open and fully operational

AmRest closed 2022 with 80 restaurants in the region after increasing the portfolio by 3 units during the year with the

opening of 8 new units and the close of 5. At year-end all the restaurants were operational but during the quarter up to

20% of the portfolio was affected by closures.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Table 2. Revenues and margins generated in the particular markets for the years

ended 31 December 2022 and 2021


	12 MONTHS ENDED
	31 December 2022		31 December 2021
	Amount	% of sales	Amount	% of sales
Revenue	2 422.0	100.0%	1 917.0	100.0%
Poland	580.2	24.0%	462.5	24.1%
Czechia	282.2	11.7%	204.0	10.6%
Hungary	151.7	6.3%	122.2	6.4%
Other CEE	119.7	4.9%	84.4	4.4%
Total CEE	1 133.8	46.9%	873.1	45.5%
Russia	295.3	12.2%	185.2	9.7%
Spain	305.2	12.6%	232.8	12.1%
Germany	173.0	7.1%	128.7	6.7%
France	309.4	12.8%	313.5	16.4%
Other WE	41.6	1.7%	45.9	2.4%
Western Europe (WE)	829.2	34.2%	720.9	37.6%
China	82.6	3.4%	100.2	5.2%
Other	81.1	3.3%	37.6	2.0%

EBITDA	384.4	15.9%	359.1	18.7%
Poland	100.9	17.4%	92.5	20.0%
Czechia	61.6	21.8%	50.5	24.7%
Hungary	26.8	17.7%	32.8	26.9%
Other CEE	25.7	21.5%	20.4	24.1%
Total CEE	215.0	19.0%	196.2	22.5%
Russia	58.6	19.8%	41.3	22.3%
Spain	61.8	20.3%	45.9	19.7%
Germany	24.5	14.2%	26.9	20.9%
France	17.1	5.5%	31.6	10.1%
Other WE	4.1	9.9%	6.2	13.2%
Western Europe (WE)	107.5	13.0%	110.6	15.3%
China	15.6	18.8%	28.7	28.7%
Other	(12.3)	(15.1)%	(17.7)	(47.0)%

Adjusted EBITDA	389.8	16.1%	364.9	19.0%
Poland	102.4	17.7%	93.9	20.3%
Czechia	62.6	22.2%	51.5	25.3%
Hungary	27.5	18.1%	33.5	27.4%
Other CEE	26.3	21.9%	20.9	24.7%
Total CEE	218.8	19.3%	199.8	22.9%
Russia	58.6	19.8%	41.7	22.5%
Spain	62.9	20.6%	46.5	20.0%
Germany	24.6	14.2%	27.3	21.2%
France	17.1	5.5%	31.8	10.1%
Other WE	4.1	9.9%	6.5	14.1%
Western Europe (WE)	108.7	13.1%	112.1	15.5%
China	16.0	19.4%	29.0	28.9%
Other	(12.3)	(15.1)%	(17.7)	(47.0)%

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022


EBIT	74.6	3.1%	103.1	5.4%
Poland	49.4	8.5%	30.3	6.5%
Czechia	33.9	12.0%	24.6	12.1%
Hungary	12.5	8.2%	17.1	14.0%
Other CEE	10.7	8.9%	7.7	9.1%
Total CEE	106.5	9.4%	79.7	9.1%
Russia	(28.4)	(9.6)%	14.1	7.6%
Spain	24.3	8.0%	13.6	5.8%
Germany	(0.8)	(0.5)%	(4.5)	(3.5)%
France	(8.1)	(2.6)%	6.1	1.9%
Other WE	(1.8)	(4.4)%	1.5	3.2%
Western Europe (WE)	13.6	1.6%	16.7	2.3%
China	(3.8)	(4.6)%	11.4	11.4%
Other	(13.3)	(16.5)%	(18.8)	(50.2)%

Table 3. Revenues and margins generated in the particular markets for 3 months

ended 31 December 2022 and 2021


	3 MONTHS ENDED
	31 December 2022		31 December 2021
	Amount	% of sales	Amount	% of sales
Revenue	651.1	100.0%	539.0	100.0%
Poland	152.0	23.3%	130.3	24.2%
Czechia	78.0	12.0%	62.4	11.5%
Hungary	44.2	6.8%	35.0	6.5%
Other CEE	35.0	5.4%	22.9	4.3%
Total CEE	309.2	47.5%	250.6	46.5%
Russia	75.3	11.6%	50.0	9.3%
Spain	86.0	13.2%	71.7	13.3%
Germany	46.7	7.2%	39.2	7.3%
France	81.0	12.4%	79.4	14.7%
Other WE	9.8	1.5%	11.2	2.1%
Western Europe (WE)	223.5	34.3%	201.5	37.4%
China	20.2	3.1%	25.0	4.6%
Other	22.9	3.5%	11.9	2.2%

EBITDA	94.3	14.5%	98.0	18.2%
Poland	24.2	15.9%	26.6	20.4%
Czechia	15.1	19.3%	15.9	25.5%
Hungary	7.7	17.4%	8.0	22.7%
Other CEE	6.0	17.0%	5.0	21.9%
Total CEE	53.0	17.1%	55.5	22.2%
Russia	12.6	16.7%	9.4	18.8%
Spain	17.4	20.2%	16.1	22.4%
Germany	7.6	16.3%	11.8	30.1%
France	3.9	4.8%	6.8	8.6%
Other WE	0.6	6.4%	0.7	6.7%
Western Europe (WE)	29.5	13.2%	35.5	17.6%
China	2.9	14.4%	6.1	24.3%
Other	(3.7)	(15.9)%	(8.5)	(71.6)%

Adjusted EBITDA	97.2	14.9%	99.9	18.5%
Poland	25.1	16.5%	27.3	21.0%
Czechia	15.6	20.0%	16.3	26.2%
Hungary	8.1	18.4%	8.2	23.3%
Other CEE	6.4	18.2%	5.2	22.5%
Total CEE	55.2	17.8%	57.0	22.7%
Russia	12.6	16.7%	9.5	19.0%
Spain	17.9	20.7%	16.3	22.7%
Germany	7.6	16.3%	11.8	30.2%
France	3.9	4.9%	6.9	8.7%
Other WE	0.6	6.4%	0.8	6.7%
Western Europe (WE)	30.0	13.4%	35.8	17.7%
China	3.1	15.4%	6.1	24.6%
Other	(3.7)	(15.9)%	(8.5)	(71.5)%

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022


EBIT	25.6	3.9%	28.2	5.2%
Poland	10.6	7.0%	10.3	7.9%
Czechia	8.3	10.7%	9.6	15.5%
Hungary	3.7	8.4%	3.3	9.4%
Other CEE	2.3	6.7%	2.6	11.3%
Total CEE	24.9	8.1%	25.8	10.3%
Russia	3.0	4.0%	0.9	1.8%
Spain	4.4	5.2%	7.6	10.5%
Germany	1.5	3.1%	(0.3)	(0.7)%
France	(1.4)	(1.7)%	1.4	1.8%
Other WE	(1.1)	(11.2)%	(0.3)	(2.8)%
Western Europe (WE)	3.4	1.5%	8.4	4.2%
China	(1.9)	(9.4)%	1.7	6.7%
Other	(3.8)	(17.0)%	(8.6)	(72.3)%

Table 4. Reconciliation of the net profit and adjusted EBITDA for years ended 31 December 2022 and 2021


	12 MONTHS ENDED
	31 December 2022		31 December 2021
	Amount	% of sales	Amount	% of sales
Profit/(loss) for the period	6.6	0.3%	35.4	1.8%
+ Finance costs	51.1	2.1%	48.0	2.5%
– Finance income	(4.0)	(0.2)%	(2.8)	(0.1)%
+/– Income tax expense	20.9	0.9%	22.5	1.2%
+ Depreciation and Amortisation	251.9	10.4%	236.9	12.4%
+ Impairment losses	57.9	2.4%	19.1	1.0%
EBITDA	384.4	15.9%	359.1	18.7%
+ Start-up expenses*	5.4	0.2%	5.8	0.3%
+/– Effect of SOP exercise method modification	-	-	-	-
Adjusted EBITDA	389.8	16.1%	364.9	19.0%

* 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 2022 and 2021


	3 MONTHS ENDED
	31 December 2022		31 December 2021
	Amount	% of sales	Amount	% of sales
Profit/(loss) for the period	3.6	0.6%	5.3	1.0%
+ Finance costs	17.1	2.6%	16.0	3.0%
– Finance income	0.5	0.1%	(1.8)	(0.3)%
+/– Income tax expense	4.4	0.7%	8.6	1.6%
+ Depreciation and Amortisation	63.4	9.7%	59.1	11.0%
+ Impairment losses	5.3	0.8%	10.8	2.0%
EBITDA	94.3	14.5%	98.0	18.2%
+ Start-up expenses*	2.9	0.4%	1.9	0.4%
+/– Effect of SOP exercise method modification	0.0	-	0.0	-%
Adjusted EBITDA	97.2	14.9%	99.9	18.5%

* operating costs incurred by the company to open a restaurant but before a restaurant starts generating revenue

Table 6. Liquidity analysis


	YEAR ENDED
	31 December 2022	31 December 2021
Current assets	372.6	315.9
Inventory	37.5	33.1
Current liabilities	626.4	579.3
Cash and cash equivalents	229.6	198.7
Trade and other receivables	89.1	67.9
Trade and other accounts payable	340.0	287.2

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Table 7. Balance sheet leverage analysis


	YEAR ENDED
	31 December 2022	31 December 2021
Non-current assets	1 907.6	1 859.0
Liabilities	1 949.0	1 867.4
Non-current liabilities	1 322.6	1 288.1
Debt	1 532.4	1 487.5
Share of inventories in current assets (%)	10.1%	10.5%
Share of trade receivables in current assets (%)	23.9%	21.5%
Share of cash and cash equivalents in current assets (%)	61.6%	62.9%
Equity to non-current assets ratio	0.17	0.17
Long-term liabilities to equity ratio	3.99	4.19
Liabilities to equity ratio	5.88	6.07
Debt/equity	4.63	4.84

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 a close indicator of the cash profitability on

operations and consists of profit from operations excluding amortisation 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

At year end 2022, the portfolio of AmRest comprises 2 340 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, Blue Frog and Bacoa. The

company also has several virtual brands in its portfolio.

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 are operated mainly by

AmRest's sub-franchisees. Pizza Hut businesses acquired in Germany in July 2017 and in Russia in June 2018 (operated

both by AmRest and its sub-franchisees) were sold in 2022 to third party operators designated by Yum!

Burger King restaurants are operated on a franchise basis. With effect 1st of February 2022, Burger King Europe GMBH

notified the termination of AmRest´s development agreements of the Burger King brand in Poland, the Czech Republic,

Slovakia, Bulgaria and Romania. Nonetheless, AmRest continues to operate Burger King restaurants that it owns in these

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

countries under the best standards of service and quality, in compliance with the franchise agreements that 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, were extended for another 5 years.

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. It is a primarily burger restaurants concept operated in Spain.

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 9 countries and reported within the

Western Europe segment.

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 27 700 KFC restaurants in over 145 countries worldwide. On 31 December 2022 the Group operated 991 KFC restaurants: 335 in Poland, 119 in the Czech Republic, 86 in Hungary, 214 in Russia, 105 in Spain, 25 in Germany, 73 in France, 15 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 2022 AmRest ran a total of 100 Burger King restaurants – 47 in Poland, 33 in the Czech Republic, 2 in Bulgaria, 8 in Slovakia and 10 in Romania.

Casual Dining and Fast Casual Restaurants (CDR, FCR)


	La Tagliatella arose from the experience of 20 years of specialization in the tradition of the Italian cuisine and the innovation in its recipes. Over all these years the brand has always focused on the Italian origin of raw materials, the quality of service and the satisfaction of its more than 10 million yearly customers. On 31 December 2022 AmRest operated 231 La Tagliatella restaurants — 227 in Spain and 4 in Portugal.

	The activity of Pizza Hut has its beginnings in 1958. The brand’s famous menu includes pizza based on iconic PAN dough – fluffy inside, crunchy on the outside. The most popular pizza flavour is pepperoni. In addition to pizza, the offer includes also pasta and numerous appetizers. AmRest has pioneered the brand's growth since 1993 - first restaurant was opened in Poland. On 31 December 2022 AmRest ran 348 Pizza Hut restaurants – 165 in Poland, 26 in Hungary, 16 in Czech Republic, 138 in France 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 2022 AmRest operated 80 Blue Frog restaurants in China.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022


	Bacoa is a primarily 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, proving every day that fast food can also be good food with the right approach. On 31 December 2022 there were 2 licensed 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 9 countries. On 31 December 2022, AmRest operated 193 Sushi Shop restaurants (144 in France, 5 in Spain, 10 in Belgium, 1 in Italy, 3 in Luxembourg, 6 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 35 700 stores in about 85

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 neighbourhood.

As at 31 December 2022 AmRest operated 395 stores (68 in Poland, 52 in the Czech Republic,

37 in Hungary, 55 in Romania, 16 in Bulgaria, 10 in Slovakia, 5 in Serbia and 152, including 26

licensed stores, in Germany).

Key investments

In the overall strategy of AmRest, capital expenditure is mainly related 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, IT investments, as well as

the scale and profile of M&A activities.

In 2022 AmRest’s capital expenditure stood at EUR 148.7 million with an increased of 43.4% with respect to 2021. This

increase has accompanied the gradual recovery in the business activity and the completion of the balance sheet

deleverage objective of the Group.

The table below presents purchases of property, plant and equipment and intangible assets in 12 months ended 31

December 2022 and 31 December 2021.

Acquisition of property, plant and equipment and intangible assets


	YEAR ENDED
	31 December 2022	31 December 2021
Intangible assets:	10.0	9.3
Licenses for use of Pizza Hut, KFC, Burger King, Starbucks trademarks	3.2	4.2
Other intangible assets	6.8	5.1
Property, plant and equipment:	138.7	94.4
Land
Buildings and expenditure on development of restaurants	8.2	9.2
Machinery & equipment	18.9	15.4
Vehicles	-	-
Other tangible assets (including assets under construction)	111.6	69.8
Total	148.7	103.7

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

AmRest’s New Restaurants


	AmRest equity restaurants	AmRest franchisee restaurants	Total
31/12/2021	1 923	516	2 439
New Openings	79	30	109
Acquisitions / Disinvestments	-20	-125	-145
Closings	-46	-17	-63
Conversions	-3	3	0
31/12/2022	1 933	407	2 340

On 31 December 2022, AmRest operated 2 340 restaurants, including 407 restaurants which were managed by

franchisees. Compared with 31 December 2021, the Group operates 99 restaurants less. 109 new restaurants were

opened and 63 closed. The openings breakdown is: 58 restaurants in Central and Eastern Europe, 43 in Western Europe

and 8 in China. The Pizza Hut businesses in Russia and Germany consisting of respectively 59 and 86 restaurants were

sold in 2022.

Number of AmRest restaurants (as at 31 December 2022)


Countries	Brands	31.12.2021	31.03.2022	30.06.2022	30.09.2022	31.12.2022
Poland	Total	601	599	595	593	615
	KFC	316	316	317	320	335
	BK	47	47	46	46	47
	SBX	70	69	69	68	68
	PH equity	156	154	152	151	151
	PH franchised	7	8	8	8	14
	SK	5	5	3	-	-
Czechia	Total	212	212	213	213	220
	KFC	114	114	114	114	119
	BK	30	30	31	32	33
	SBX	51	51	51	51	52
	PH equity	17	17	17	16	16
Hungary	Total	142	142	143	144	149
	KFC	80	80	80	81	86
	SBX	36	36	37	37	37
	PH equity	26	26	26	26	26
Russia	Total	267	267	217	216	214
	KFC	218	218	217	216	214
	PH equity	19	19	-	-	-
	PH franchised	30	30	-	-	-
Bulgaria	Total	24	24	24	24	26
	KFC	8	8	8	8	8
	BK	2	2	2	2	2
	SBX	14	14	14	14	16
Serbia	Total	16	16	19	20	20
	KFC	13	13	15	15	15
	SBX	3	3	4	5	5
Croatia	KFC	8	8	8	8	8
Romania	Total	63	63	63	64	65
	SBX	54	54	54	54	55
	BK	9	9	9	10	10
Slovakia	Total	17	18	18	18	21
	SBX	9	9	9	9	10
	PH equity	3	3	3	3	3
	BK	5	6	6	6	8
Armenia	PH franchised	6	6	-	-	-
Azerbaijan	PH franchised	5	5	-	-	-
Spain	Total	333	329	332	333	339
	TAG equity	70	70	71	71	71
	TAG franchised	160	157	157	157	156
	KFC	93	92	94	95	105
	BCA equity	1	1	1	1	-
	BCA franchised	4	4	4	4	2

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022


	SSG equity	3	5	5	5	5
	SSG franchised	2	-	-	-	-
France	Total	353	353	355	351	355
	PH equity	1	1	1	1	1
	PH franchised	131	129	130	131	137
	KFC	73	73	73	73	73
	SSG equity	111	112	112	107	104
	SSG franchised	37	38	39	39	40
Germany	Total	262	261	263	262	177
	SBX	128	127	129	126	126
	SBX licensed	25	25	25	26	26
	TAG equity	1	1	1	-	-
	KFC	25	25	25	25	25
	PH equity	6	6	6	2	-
	PH franchised	77	77	77	83	-
Austria	KFC	2	2	2	2	2
Slovenia	KFC	1	1	1	1	2
Portugal	Total	5	4	4	4	4
	TAG equity	4	4	4	4	4
	SSG franchised	1	-	-	-	-
China	Total	77	80	78	80	80
	BF equity	66	68	66	68	69
	BF franchised	11	12	12	12	11
Belgium	Total	11	11	11	12	10
	SSG equity	5	5	5	5	3
	SSG franchised	6	6	6	7	7
Italy	Total	2	2	1	1	1
	SSG equity	1	1	1	1	1
	SSG franchised	1	1	-	-	-
Switzerland	SSG equity	11	11	11	11	11
Luxembourg	SSG equity	3	3	3	3	3
UK	Total	5	6	6	6	6
	SSG equity	5	5	5	5	5
	SSG franchised	-	1	1	1	1
UAE	SSG franchised	10	11	11	10	10
Saudi Arabia	SSG franchised	3	3	3	3	3
Total AmRest		2 439	2 437	2 381	2 379	2 340

Planned investment activities

The recovery of the business activity and cash flow generation, in addition to achieved target level of deleveraging, has

resulted in over 40% CAPEX increased.

The Group intends to make further progress with a more efficient capital allocation. In this respect, AmRest’s working

priorities combined increasing the number of restaurants, brands and commercial capabilities, in addition to maintaining

restaurants and systems in optimal conditions.

From a business model perspective the development of a robust franchising activity is a key pillar of growth in the short

term. 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 2022

The end of the development agreement with Burger King

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.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

AmRest continues to operate 100 Burger King restaurants that it owns in mentioned territories under the best standards

of service and quality, in compliance with the franchise agreements which 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.

Initiation of process to suspend temporarily operations in Russia

On 9 March 2022, following the recent announcement made by Yum! Brands, the owner of the KFC and Pizza Hut

brands, AmRest informed that it was initiating the process to temporarily suspend its operations in Russia. All investment

in the region were also halted.

Transfer of Pizza Hut business in Russia and Germany

As previously announced, due to termination of Pizza Hut Master Franchise Agreements in Russia and Germany, the

Pizza Hut restaurants on these markets were transferred in Q2 2022 and Q4 2022, respectively, to two different

counterparties designated by Yum! These two transactions have led to the transfer of 145 restaurants (20 equity + 125

franchised), 59 in Russia and 86 in Germany.

Amendment to terms of the Credit Agreement

In relation with the Senior Term and Revolving Facilities agreement dated 5 October 2017 (the “Credit Agreement”) and

with the Other Relevant Information published by the Company on 13 December 2021 (with registration number 13163),

AmRest signed on 8 September 2022 an amendment to certain terms of the Credit Agreement, including the lenders’

commitment to grant AmRest the so-called Facility G, in the amount of additional EUR 100 million, as well as the

inclusion of the obligation to maintain an equity / assets ratio, with the main terms regarding interest and maturity

remaining unchanged.

As a consequence of such amendment, after the usual conditions for this type of transactions were fulfilled, AmRest drew

down the full amount of this credit line and is using it to finance the general corporate purposes of the AmRest group and

expansion.

Agreement to sale the business in Russia

On 6 December 2022 AmRest, through its subsidiaries AmRest Sp. z o.o. and AmRest Acquisition Limited, has entered

into a share purchase agreement with Almira OOO, for the sale of its KFC restaurant business in Russia (the

"Transaction"). The closing of the Transaction is subject to the approval by competition authority in Russia, the consent by

Yum! Brands Inc. and to other regulatory authorizations that may be applicable in Russia.

According to the terms of the share purchase agreement, as of the date of signing, AmRest expected to receive a

minimum of 100,000,000 euros for the Transaction.

The final terms of the Transaction, which are subject to certain external factors, including exchange rate, will be

communicated if the Transaction is closed. Nevertheless, AmRest estimates that after recognition of the impairment of the

Russian business in the consolidated financial statements as of June 30, 2022, the completion of the Transaction should

not require further adjustments.

External Debt

As explained in the Significant events and transactions section, in relation with the Senior Term and Revolving Facilities

agreement dated 5 October 2017 (the “Credit Agreement”) and with the Other Relevant Information published by the

Company on 13 December 2021 (with registration number 13163), AmRest signed on 8 September 2022 an amendment

to certain terms of the Credit Agreement, including the lenders’ commitment to grant AmRest the so-called Facility G, in

the amount of additional EUR 100 million, as well as the inclusion of the obligation to maintain an equity / assets ratio,

with the main terms regarding interest and maturity remaining unchanged.

As a consequence of such amendment, after the usual conditions for this type of transactions were fulfilled, AmRest drew

down the full amount of this credit line and is using it to finance the general corporate purposes of the AmRest group and

expansion.

More information on the external debt, can be found in Note 27 (‘Borrowings’) of the Consolidated Financial Statements.

Shareholders of AmRest Holdings SE

During the period covered by this Report following changes occurred with respect to the Company’s shareholder

structure:

On 15 July 2022, as a result of the merger by absorption between FCapital Dutch, S.L. (at that time named FCapital

Dutch, B.V.), as the absorbing company, and FCapital Lux S.à r.l. (holding directly 56 509 547 AmRest shares), as the

absorbed company, the shareholding of FCapital Lux S.à r.l. in AmRest Holdings SE became the property of FCapital

Dutch, S.L.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Likewise, FCapital Dutch, S.L. (formerly FCapital Dutch, B.V.) carried out the international transfer of its registered office,

without dissolution or loss of its legal personality, from its previous domicile located in Amsterdam (The Netherlands) to

Madrid (Spain), under a public deed executed on December 1, 2022 (effective date of the transfer of domicile), which was

registered in the Commercial Registry of Madrid on January 16, 2023.

To the best of AmRest’s knowledge as at 31 December 2022 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 S.L.*	147 203 760	67.05%
Artal International S.C.A.	11 366 102	5.18%
Nationale-Nederlanden OFE	10 718 700	4.88%
Aviva OFE Aviva BZWBK SA	7 013 700	3.19%
Other Shareholders	43 251 921	19.70%

* FCapital Dutch S.L. is 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

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.

As at 31 December 2022 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 remains the same.

Remuneration of the Board of Directors and Senior Management Personnel

The remuneration of the Board of Directors and Senior Management Personnel (for these purposes, Senior Management

Personnel is understood to be those executives who report directly to the Board of Directors, the chief executive officer or

the first executive of the Company, including the person responsible for Internal Audit) paid by the Group was as follows:


	31 December 2022	31 December 2021
Remuneration of the members of the Board of Directors	0.8	0.7
Remuneration of Senior Management Personnel:
- Remuneration received by the Senior Executives*	3.3	3.3
- Gain on share-based remuneration systems	-	-
Remuneration of Senior Management Personnel	3.3	3.3
Total compensation paid to key management personnel	4.1	4.0

*includes the total amount of the variable remuneration in cash (Short-Term Incentive Program) that is recognized in the year it is paid.

Directors Remuneration Policy was approved at the General Shareholders’ Meeting held on 12 May 2022 and will remain

in force until 2025 unless the General Shareholders’ Meeting so resolves to amend or replace it.

The Group’s Senior Management Personnel participates in the employee share option plans (note 29). In relation to the

stock option plans and Management incentive plans in the year ended 31 December 2022 the fair value of outstanding

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

options decreased by EUR 1,9 million, due to a significant amount of expired options. In the year ended 31 December

2021 the fair value decreased by EUR 4.5 million.


	31 December 2022	31 December 2021
Number of options outstanding (pcs, after split)	3 285 000	4 071 333
Number of available options (pcs, after split)	352 000	912 000
Fair value of outstanding options as at grant date (EUR millions)	3.5	5.4

The Group's Senior Management Personnel participates in the Long-Term Incentive (LTI) Program which has been

started in 2021. The LTI grants will vest according to a 5-year agenda (60% after 3rd year, 20% after 4th year, 20% after

5th year). The first vesting will take place on 31st May 2024. As of 31 December 2022 the fair value of all grants related to

key management equals EUR 1.9 million. By the end of the year ended 31 December 2022 the cost of LTI related to key

management amounted to EUR 1.0 million.

As of 31 December 2022 and 2021, the Group had no outstanding balances with the Senior Management Personnel,

except for the accrual and payment of annual bonuses to be paid in the first quarter of the following year.

As of 31 December 2022 and 2021, the Group's members of the Board of Directors had no pension fund or life insurance.

Stock Option and Management Incentive Plans as well as LTI Program in which Senior Management Personnel

participates are detailed above and in note 29. Members of the Board of Directors do not participate in such programs.

Furthermore, the Group had not granted any advance, loan or credit in favour of the Board Members or the Senior

Management. As of 31 December 2022 and 31 December 2021 there were no material liabilities to former employees.

Changes in the number of shares held by members of the Board of Directors

During the year 2022 there were no significant changes with respect to AmRest shares and stock options held by the

members of the Board of Directors of AmRest.

As of 31 December 2021 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 2022, Mr. Carlos Fernández González still owned (through FCapital Dutch S.L.) 147 203

760 AmRest’s shares with a total nominal value of EUR 14 720 376.

In addition, as of 31 December 2021 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 2022 Finaccess México, S.A. de C.V. held 1 477 523 AmRest shares

with a total nominal value of EUR 147 752.3. 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 AmRest of 19 May 2015 concerning the authorization for 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 to 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 the

own shares. The Ordinary General Shareholders’ Meeting of AmRest held on May 12, 2022 resolved to renew the

previous authorization granted by the General Shareholders’ Meeting of June 6, 2018, revoking it in the unused part.

In the past the Company was acquiring 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 2022 and 31 December 2022, AmRest didn’t purchase any own shares. During the

same period, the Company disposed a total of 29 771 own shares with a total nominal value of EUR 2 977.1 and

representing 0.0136% 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. Major part of the shares was

transferred to the participants free of charge. As at 31 December 2022 AmRest held 341 645 own shares with a total

nominal value of EUR 34 164.5 and representing 0.1556% of the share capital.

The subsidiaries of AmRest Holdings SE do not hold any 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. in the

amount of EUR 1.8 million.

(all figures in EUR millions unless stated otherwise)


AMREST GROUP Director’s Report
for the year ended 31 December 2022

Average period of payment to suppliers

Pursuant to Law 18/2022 of September 28, amending Law 15/2010 of July 5, which established measures against late

payment in commercial transactions, the information on the average period of payment to suppliers of AmRest and its

Spanish subsidiaries at 31 December 2022 and 2021 is as follows:


	2022	2021
Number of days:
Average period of payment to suppliers	46.56	41.1
Ratio of payments	40.4	42.8
Ratio of outstanding invoices	46.99	26.2
Millions of EUR:
Total payments	205.4	154.4
Outstanding invoices	27.1	16.7
Amount payments<60 days	84.2	-
Number of invoices paid < 60 days	46 444	-
% Amount of payments made < 60 days out of the total payments	82%	-
% Number of invoices paid < 60 days out of the total payments	77%	-

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