Ibersol SGPS S A : Consolidated Report & Accounts 3M 2022 (view report)

IBERSOL - SGPS, SA

Publicly Listed Company

Registered office: Praça do Bom Sucesso, 105/159, 9th floor, Porto

Share Capital Euros 46.000.000

Commercial Registry: Oporto under number 501669477

Fiscal number: 501669477

Consolidated Report & Accounts

3M 2022

(not audited)

• Consolidated Turnover of 106.5 million Euros

Increase of 91.3% over 3M of 2021

• Consolidated EBITDA reached 14.6 million Euros

Ebitda increased 102.6% over 3M of 2021

• Consolidated net profit of -1.7 million Euros

Increase of 89.2% when compared to the 3M of 2021

Consolidated Management Report

Activity

To allow comparison with other companies in the sector and previous financial periods, the Group uses operational performance indicators, as mentioned throughout this section, the definition and explanation of which can be consulted in the glossary.

After an initial first quarter affected by the Omnicrom variant, which slowed down the pace of recovery from the effects of the Covid-19 pandemic, the quarter was also marked by the outbreak of the military conflict in Ukraine and the worsening of global geopolitical tensions.

This context of uncertainty and instability led to an acceleration of the escalation of inflation in food products, energy and transport, with a consequent impact on the drop in consumer confidence, evident at the end of February.

Despite the demanding context experienced in the first quarter, the comparable performance with the same period in 2021, affected by the period of lockdown and restrictions on mobility, resulted in a growth of 91.3%.

Consolidated turnover for the three months of 2022 amounted to EUR 106.5 million, compared to EUR 55.7 million in the same period of the previous year.

The sales evolution compared to 2019 shows the effect of the retraction in consumption checked in March. In April, there was a recovery to the highest levels since the beginning of the pandemic - in March 2020 - which coincided with the Easter period, in which there was a growth in mobility and consumption in the operated markets.

In Portugal, after an initial period of the year with a considerable part of the population at home, by the effect of the increase in the number of infected with the new Omnicrom variant, turnover exceeded that seen in the pre-pandemic period, except for the month of March.

In Spain, there was a reduction in losses to levels below 20%, directly related to the positive evolution of traffic at airports, especially in locations that are more dependent on tourism.

Sales of restaurants located in Angola reflect the evolution in local currency, - which does not include the impacts arising from currency conversion - continuing to be the least penalized by the effect of the pandemic.

In this context, the monthly sales evolution by segment, illustrates the different impacts of the restrictions that have been in the last two years, the respective comparative with the same period of 2019 and the pace of recovery achieved by business area.

The concessions and catering segment - after the slowdown in the recovery at the end of 2021, registered a strong growth pace in this quarter, directly related to the increased traffic passengers at airports.

In Spain, where the group operates restaurants at seven airports, passenger traffic has registered a gradual recovery since February, with losses in the 1st quarter of 31%, when compared to 2019, with urban airports showing a slower pace of recovery. In Portugal, losses were 28%, which reflects an identical level of recovery of passenger's traffic in the airports of Iberia. It should also be noted that in April, as a result of the Easter period, there was an important increase in passenger traffic, reducing losses to 15% at airports in Spain and 9% at airports in Portugal, compare to the same period in 2019.

The pace of activity recovery in restaurants, with dine-in service, that had taken place since the beginning of the year was interrupted in March, having not yet reached pre-pandemic sales levels.

The counter segment once again showed a good performance, with strong growth compared to the same period of 2021, (a growth of 73%), as well as a high pace of recovery compared to 2019 of 30%, to which contributed decisively three factors:

1. the impact of the expansion which occurred in 2020 and 2021, namely with the Burger King, KFC and Taco Bell brands;
2. the generalized extension to a significant number of restaurants with delivery and take- away services;
3. the positive performance of restaurants with drive-thru services (operated by Burger King and KFC brands) which helped overcome the losses registered in the eat-in services.

Delivery sales, which partially offset the impact of the operation's limitations in the restaurant and counter segments in the lockdown period, with the gradual return to normality tends to reduce its weight, representing, however, in the first quarter 28% of sales - excluding sales in the concessions and catering segment - around 10 p.p. higher than in the first quarter of 2020, the previously period to the impact of the pandemic.

With the gradual resumption of normality in consumer habits, there is a reduction in the relative weight of sales in the drive and delivery channels, as opposed to an increase in the weight of sales in restaurants, namely those located in shopping centers.

During the first quarter, 7 restaurants were definitively closed, 5 of which were franchised, with the opening of three new KFC restaurants in Portugal and the conversion of a Pans franchised restaurant in Spain into a equity one.

The closure of the two equity restaurants resulted from the option of not renewing the lease contracts of two Pizza Móvil restaurants.

At the end of the quarter, the total number of restaurants was 618 (546 equity and 72 franchises), as shown below: