Ibersol SGPS S A : Consolidated Report & Accounts 3M 2024 – not audited

IBERSOL - SGPS, SA

Publicly Listed Company

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

Share Capital Euros 42.359.577

Commercial Registry: Oporto under number 501669477

Fiscal number: 501669477

Consolidated Report & Accounts 3M 2024

(not audited)

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Continued Operations Turnover of 98.2 million Euros

Increase of 9.7% over 3M of 2023

Continued Operations EBITDA reached 17.4 million Euros

Ebitda increased 36,9% over 3M of 2023

Continued Operations net profit of -0.9 million Euros

Reduction of 1.1 million Euros compared to the same period of 2023

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Consolidated Management Report

Activity

Following the sale of the Burger King operations in Portugal and Spain at the end of November 2022, the activity of all Burger King restaurants is reported as a "Discontinued Operation" with regards to financial information reporting until the conclusion of the sale of one restaurant, which is expected to be completed at the beginning of 2025, after 8 units have been sold during this fiscal year.

Despite the slowdown in household consumption, leading to a more dynamic competitive environment in the restaurant sector, turnover grew 9.7%, also drien by the opening of new restaurants.

As a result, turnover from "Continued Operations" reached 98.2 million Euros in the first three months of 2024, compared to 89.6 million Euros in the same period of the previous year, during which non-recurring services and sales of goods related to the transfer of Burger King restaurants sold at the end 2022 were provided.

Two key factors significantly contributed to this performance, minimising the impact of restrained consumption in the restaurant market during this period, with a 6% like for like growth in restaurant sales:

1. positive calendar effect resulting from Easter occuring in the first quarter (unlike in 2023) and 2024 being a leap year;
2. increase in passenger traffic throughout the first quarter, which benefited restaurants located in airport concessions, especially those located in southern Spain with growth of over 20%.

In addition, the increase in the number of restaurants resulting from the openings that took place in 2023 and early 2024 - namely those concessioned at airports in Spain despite operating in provisional formats until their conversion to definitive ones - also contributed to this overall performance, with the concessions recording a growth of 28.5%.

During the quarter, three units in the Lanzarote concession were converted into definitive formats, with the opening of a Pizza Hut, a KFC and a Wok, meeting the sales expectations presented for the tender.

Restaurants with higher average revenues have been less resilient in periods of consumption slowdown, with a growth of just 1.2% compared to the same period of 2023.

Counter segment of continued operations maintained its good performance, registering a sharp growth of 9.4% compared to the same period of 2023, to which the impact of the expansion, namely of the KFC and Taco Bell brands, which occurred at the end of 2023 and in this quarter contributed.

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During the first quarter, two franchised Pans restaurants and two equity restaurants in Portugal were definitively closed. Also within the scope of the sale process of Burger King restaurants operated in concessions, the sale of 15 points of sale (8 Burger King restaurants and 7 cafeterias under the operating contracts for these spaces) was completed in January, with the group temporarily operating only one Burger King restaurant located at Madeira Airport.

In addition to the opening of the definitive restaurants at Lanzarote Airport, a Pans franchise was converted into equity restaurant in Spain, two new Taco Bell restaurants in Portugal, and the opening of a KFC restaurant in Angola was carried out.

At the end of the quarter, the total number of restaurants was 490 (433 equity and 57 franchises), as shown below:

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Consolidated Financial Performance

Despite the 9.7% growth in turnover in the first quarter, the impact of the new concession contracts at airports in Spain, which will operate on a limited basis in provisional formats until the conversion process is completed, significantly contributed to the reduction in operating income to 1 million Euros in the first quarter of 2024, compared to 2 million Euros in the same period of 2023, largely due to lower sales volume and staff costs.

Gross margin was 76.1% of turnover, 1.1 p.p. higher than in the first quarter of 2023.

Eliminating in the first quarter of 2023 the effect of the supply of raw materials during the transition process of Burger King restaurants, the gross margin for the first quarter of 2024 would be 0.3p.p higher than the same period in 2023.

The increase in wage costs and the beginning of operations at the new concessions with lower productivity in provisional restaurants led to an increase in staff costs of 13.3%, with the weight of this cost representing now 33.2% of turnover (3M23: 32.1%).

External Supplies and services costs reduced 4.5%, representing 26.1% of turnover, which represents a reduction of 3.8 p.p. compared to the same period of 2023. This reduction results from the application of IFRS16 to the concession contracts of Alicante, Malaga and Gran Canaria which reached the passenger traffic levels of 2019 and were not relevant for the application of the standard in 2023.

Other operating income and costs in the total amount of 0.8 million Euros, represent a reduction of 0.3 million Euros compared to the same period of 2023, a difference resulting from contractual penalties.

Amortisation, depreciation and impairment losses of TFA, Rights of Use, Goodwill and IA in the first quarter amounted to 16.3 million Euros, which compares with 10.7 million Euros of the same period of 2023, of which 11.5 million correspond to amortization of right of use.

Therefore EBITDA in the first quarter amounted to 17.4 million Euros, an increase of 37% compared to the same period of 2023, which represents an increase in the EBITDA margin to 17.7% of turnover, which compares with 14.2% in the same period in 2023.

For comparative purposes, eliminating the impact of IFRS16 on EBITDA of continuing operations (the application of which was suspended in concession contracts with AENA prior to 2020 until the recovery of 2019 passenger traffic), the EBITDA margin

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without IFRS16 would be 5.9% in the first quarter of 2024, which represents a reduction of 0.8p.p. compared to the same period in 2023, largely reflecting the impact of the start of operations in the new concessions, mostly operating in provisional formats until the conversion to definitive formats and concepts is completed.

The Financial Results in the first three months of the year were negative by 2.5million Euros, 0.7 million Euros higher compared to the first quarter of 2023.

Financial expenses and losses totalled 3.8 million Euros, which represents an increase of 1.4 million Euros compared to the first quarter of 2023. A part of these expenses and losses corresponds to lease interest in the amount of 3.5 million Euros (1.6 million Euros in the first quarter of 2023).

Financial income and gains registered a substantial increase of 0.9 million Euros due to the application of financial availabilities (average rate of 3%).

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Financial Situation

Total Assets amounted to 681 million Euros and Equity stood at 356 million Euros, representing 52% of total assets.

CAPEX amounted to 6.0 million Euros, mainly for the opening of new restaurants and the conversion of restaurants at airports in Spain.

Current liabilities amount to 125.5 million Euros, of which 42 million correspond to liabilities for leases and 13 million Euros to current loans. Regarding to current loans, the Group has 27.5 million Euros related to commercial paper and unused contracted credit lines.

Consolidated liabilities reached 326 million Euros on March 31, 2024, which represents a reduction of 32 million Euros compared to the final result in 2023.

On March 31, 2024, Equity stood at 356 million Euros, identical to the amount at the end of 2023.

At the end of the first quarter of 2024, net debt (including lease liabilities) was 80.7 million Euros, 13.3 million Euros higher than the amount outstanding at the end of 2023 (67.3 million Euros), of which 227 million are lease liabilities.

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Glossary

Turnover	Sales + Services Rendered
Sales	Sales of Restaurants + Sales of Merchandise
Sales of Restaurants	Sales of directly operated restaurants
Sales of Merchandise	Sales of goods to third parties and franchisees
Gross Margin	Turnover - Cost of Sales
EBIT Margin	EBIT / Turnover
EBITDA Margin	EBITDA / Turnover
EBIT (Earnings before Interest and Taxes)	Operacional Results for continuing operations
EBITDA (Earnings before Interest, Taxes,	Operating results for continuing operations less amortization, depreciation and
impairment losses of tangible fixed assets, Rights of Use, Goodwill and Intangible
Depreciation and Amortization)
Assets
EBITDA without IFRS16	EBITDA excluding the application of IFRS16 to lease contracts
Capex	Tangible and intangible assets additions
Net Financing Costs	Interest + commissions
Interest Coverage	EBITDA / Financing Costs
Net Bank Debt	Bonds + bank loans + other loans + financial leases - cash, bank deposits, other non-
current financial assets and other current financial assets
Net Debt	Net Bank Debt + Liability for Leases
Gearing	Net Debt / (Net debt + Equity Capital)
Financial Autonomy ratio	Equity/Total Assets

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Outlook

Recent forecasts from the Banks of Portugal and Spain for 2024 point to growth of 1.2 per cent and 1.6 per cent respectively, with a slowdown in inflation compared to the last two years and consequently an expected reduction in interest rates over the course of this year.

The instability in the Middle East and the ongoing conflict in Ukraine, which is jeopardising the climate of security in Europe, could worsen consumer confidence. However, given the most recent indicators, particularly airport traffic, the markets most exposed to tourism in southern Europe will continue to show greater resilience, which will help to minimise the natural slowdown in consumption.

Throughout 2024 we estimate to complete the process of converting the newly concessioned restaurants at Lanzarote, Madrid, Tenerife and Malaga airports into their definitive formats and concepts.

In terms of expansion of our operations, we will continue with the expansion plans for the Pizza Hut, KFC, Taco Bell and Pret A Manger brands.

Subsequent Events

On 19 April, the sellers were informed of the purchase of 54% of the company's share capital for 12.1 million Euros. Following the seller's approval and the fulfilment of other precedent conditions, the deal could be concluded by the end of the first half of 2024.

The acquisition assumes an enterprise value of 27.9 million Euros. The company operates 34 KFC restaurants and generated an EBITDA (excluding IFRS16) of around 4 million Euros.

Porto, 28th May 2024

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António Alberto Guerra Leal Teixeira

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António Carlos Vaz Pinto de Sousa

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Maria do Carmo Guedes Antunes de Oliveira

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Juan Carlos Vázquez-Dodero de Bonifaz

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Maria Deolinda Fidalgo do Couto

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Interim Condensed Consolidated Financial Statements

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

31 March 2024

Index

Condensed Statement of Interim Consolidated Income and Other Comprehensive Income	11
Condensed Statement of Interim Consolidated Financial Position	12
Condensed Statement of Interim Consolidated Cash Flows	13
Condensed Statement of Interim Consolidated Changes in Equity	14
Notes to the condensed consolidated interim financial statements	15
1. Presentation and Structure of the Group	15
	1.1.	Ibersol Group Subsidiaries	16
	1.2.	Ibersol Group's joint ventures and associates	17
	1.3.	Changes in the consolidation perimeter	17
2. Basis of preparation of the financial information	17
	2.1.	Bases of presentation	17
	2.1.1.	Approval of the financial statements	17
	2.1.2.	Accounting standards	18
	2.1.3.	Measurement basis	18
	2.1.4.	Comparability	18
	2.1.5.	Presentation currency and transactions in foreign currency	18
	2.2.	New standards, amendment and interpretation	19
3.	Operational Risk Management	20
	3.1.	Risks of the global context	20
	3.2.	Risks of development and franchise agreements	20
	3.3.	Quality and food safety risks	21
	3.4.	Price Risk	21
	3.5.	Environmental risks	21
4.	Operational Performance	22
	4.1.	Revenue	22
	4.2.	Segment reporting	22
	4.3.	Operating income and expenses	24
	4.3.1.	Other operating income/(expenses)	24
5.	Working Capital	24
	5.1.	Accounts receivable	24
	5.1.1.	Other accounts receivable	25
	5.1.2.	Other debtors	25
	5.2.	Accounts payable	26
	5.2.1.	Suppliers	26
	5.2.2.	Accrued expenses	27
6.	Investments	27
	6.1.	Goodwill	27
	6.2.	Intangible assets	28
	6.3.	Property, plant and equipment	29
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6.4.	Right of use assets	30
6.5.	Depreciation, amortization and impairment losses on non-financial assets	30
6.6.	Discontinued operations and non-current assets held for sale	31
6.7.	Investment Property	33
7.	Financing	34
7.1.	Equity	34
	7.1.1.	Share capital	34
	7.1.2.	Own shares	34
	7.1.3.	Earnings per share	34
7.2.	Bank Debt	35
7.3.	Lease liabilities	35
7.4.	Treasury bonds	36
7.5.	Cash and bank deposits	37
7.6.	Financial activity result	37
8.	Income tax	37
8.1.	Current income tax	37
	8.1.1.	Current tax recognized in the income statements	37
	8.1.2.	Current tax recognized in the statement of financial position	37
8.2.	Deferred taxes	38
	8.2.1.	Deferred tax assets	38
	8.2.2.	Deferred tax liabilities	39
9. Other Provisions and Contingencies	39
9.1.	Other provisions	39
9.2.	Contingent assets and liabilities	39
9.3.	Guarantees	40
10.	Transactions with related parties	40
11.	Subsequent Events	41

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