LEARNING FROM THE PRESENTTO WIN THE FUTURE April 2021 Global Report 2020 Learning from the Present to Win the Future Our Business Model as a Guarantee to Face New ChallengesCulture and Commitment: Our keys to the futureTalent and Quality of Life: Growing as a TeamIncreased Model Quality and Flexibility: Our Response to New Customer NeedsCapability and Sustainability: Pillars Sustaining Our Operation’s FutureCommunity Response: We Remain Committed to Sharing ValueScope of Information and Contents of ReportAnnex: Indicator Tables617376191109131153157Message from the Chief Executive OfficerTable of Contents12345678 shareholdersDDWith great pleasure, I present you our 2020 Annual Report, a year which
ear friends,
ear friends,
collaborators, and
collaborators, and
shareholders
has put us to the test every day, but from which we came out stronger
and with a learning experience that allows us to look to the future with
optimism.
Stronger and with a learning experience that allows
Stronger and with a learning experience that allows
us to look to the future with optimism.
us to look to the future with optimism.
“
This 2020 we have faced, as has society as a whole and the business
sector, a unique and significant challenge that shall mark an entire ge-
neration. Alsea’s team has demonstrated great flexibility and capability
to adapt to changes in the environment and the market, which, toge-
ther with the strength and recognition of our brands, places us in a
strong position towards the recovery process.
”
Alberto Torrado Martínez
Chief Executive Officer of Alsea
6
7
Global Report 2020 Therefore, I would like to start this message by expressing my gratitude
to everyone who is part of Alsea’s family. During the most challenging
times, your effort and commitment have allowed us to face illusion new
challenges that we will undoubtedly continue to overcome together.
We faced this complicated year under an additionally challenging con-
text, for the Company had just concluded the largest transaction in its
history by acquiring Grupo Vips in Spain and Starbucks in France and
Benelux at the end of 2018, increasing its debt level; during 2020, we
were able to negotiate several terms related to our credit agreements,
and thus we were prepared to face the situation arising from COVID-19,
allowing us to take care of the Company’s liquidity and ensure a mini-
mum level of Capex to continue our strategic projects and maintain the
operation of our restaurants in optimal conditions.
By the end of 2020, we had 4,1921 units in total, 3,283 of which were cor-
porate, and 909 were sub-franchises. During the year, the sales reached
38,495 million Mexican pesos. They reached a sales level of 66.2% com-
pared to the sales reported in 2019. Despite the natural decrease in sales
and the result of the restrictions and reduction in consumption originated
from the health crisis, we managed to partially offset this impact through
an effort to reduce costs and expenses, both operational and adminis-
trative. This effort included effective management of all the Company’s
expenses lines, highlighting the relevant negotiations with suppliers and
lenders, access to government support programs in some regions, and
the obtainment of agreements with our strategic partners, especially the
parent companies of the brands we manage, allowing us to maintain
more than 60,000 direct jobs.
Another example of this adapting process has been the development of
digital sales channels, as a first step in the Company’s digital transfor-
mation strategy, achieving a 26.7% share of the home delivery segment
in consolidated sales, representing more than 9.3 billion pesos for the
year. Thanks to all of this, we have achieved a 3.9% EBITDA margin, with 80
million dollars, representing nearly a third part of the margin achieved in
2019, despite having operated at 100% only 10 out of the 52 weeks of the
year.
We are prepared
We are prepared
Our business model’s strength, focused on the customer, as well as a
philosophy with explicit values and a strong brand portfolio, allow us to
position ourselves in the market as a leading Company in our sector
with determination and commitment to seize opportunities and main-
tain our growth, always in search of improving our profitability.
We are a global company operating in 11 geographic markets, including
Mexico, Argentina, Colombia, Chile, Uruguay in Latin America, and Spain,
Belgium, France, Netherlands, Luxembourg, and Portugal in Europe. We
manage a prestigious multi-brand portfolio, positioned as leaders in
their segment and recognized by our customers, including Domino’s Piz-
za, Starbucks, Burger King, Chili’s, P. F. Chang’s, Italianni’s, The Cheesecake
Factory, Vips, Archies, Foster’s Hollywood, Gino’s, TGI Fridays, and Con-
ceptos Mexicanos.
Seventeen brands with the same purpose: make our clients happy. For
that purpose, we maximized synergies to offer exceptional products
and quality services, focusing even on the smallest detail to achieve
extraordinary results. We conveyed our passion through our dishes ela-
borated with the utmost dedication to offer a differential value and be
present whenever and wherever the customer wants.
“
Be present whenever and wherever the customer wants.
Be present whenever and wherever the customer wants.
Being aware of the changes in consumer habits that our clients have
experienced in the last years, where technology has become primary,
we continue implementing measures to digitize processes. During 2020
we strengthened and consolidated our structure in the digital area,
with specific infrastructure, talent, and technology investment actions,
allowing us to offer the right product and the right time through the ri-
ght channel to our customers, understanding their preferences at every
moment of consumption, as a part of our commitment to make Alsea
the leading Company in the industry in digital transformation. The world
changed, the consumer changed too, and Alsea changed with them.
”
1Does not include 1 unit of Cañas y Tapas, brand sold during 2020. As of December 31, 2020,
Does not include 1 unit of Cañas y Tapas, brand sold during 2020. As of December 31, 2020,
the Cañas y Tapas brand is no longer part of our portfolio, but at the end of 2020 we
the Cañas y Tapas brand is no longer part of our portfolio, but at the end of 2020 we
continue to have a store that is identified as a unit in the accounting.
continue to have a store that is identified as a unit in the accounting.
8
9
Global Report 2020 Home delivery service will continue to be a sales opportunity much
more important than what it represented before the pandemic. Many
customers have adopted this experience and have gotten used to this
channel’s convenience. In Mexico, Colombia, Chile, and Spain, Alsea cu-
rrently has an estimated market share of 12% of the total number of
food and beverage home deliveries in these markets. Likewise, during
2020, our loyalty programs continued growing, reaching more than 650
thousand active members of “Wow Rewards” and more than 15.6 mi-
llion orders through Starbucks Rewards.
To promote the development of a sustainable business model, we have
four lines of action-oriented to satisfy all possible corporate practices
in benefit of a more sustainable and responsible society. Life Quality,
Responsible Consumption, Environment, and Community Development
are our main lines of action.
“
Life Quality, Responsible Consumption, Environment, and
Life Quality, Responsible Consumption, Environment, and
Community Development are our main lines of action.
Community Development are our main lines of action.
In this context, we base our growth and improvement leverage on va-
lues that have defined us throughout our years of activity. We conti-
nually work to improve our environmental performance. We constant-
ly listen and dialogue with our collaborators, customers, and the local
communities, always searching for sustainable growth with a long-
term vision.
”
We assured our commitment to the environment and its challenges
since 2012 with our compliance to the United Nations Global Compact.
We promoted important initiatives towards the realization of the Sus-
tainable Development Goals. We also took part in recognized initiatives
like IPC Sustainability Quotes and Prices Index. We are the only Restau-
rant and Consumer Services Company in the Dow Jones Sustainability
MILA Index. CEMEFI (Mexican Center for Philanthropy A.C from its trans-
lation in Spanish) recognized us as a Socially Responsible Company
(ESR) for the ninth consecutive year.
Alsea’s growth is possible thanks to the passion and commitment of
the more than 60,000 employees who are part of our family. This year,
our team has regained a unique leading role, not only for its professio-
nalism, courage, and moral conviction they showed day after day but
also for its commitment and loyalty.
During 2020 we continued our stores’ renovation, adjusting them to the
criteria of energy efficiency and water consumption savings. We esta-
blished a waste reduction policy and prioritized our stores to recycled
materials products. We also carried out environment awareness activi-
ties among our customers and employees.
Aware that the health and welfare of our employees and clients is pri-
mordial, at Alsea, we have applied the best sanitary safety measures
and strict hygiene protocols in our establishments since the very first
moment the pandemic broke out, reflected in capacity reductions,
use of masks, protocols for action in situations of vulnerability or early
detection of any positive cases in employees. We have strengthened
communication and information channels throughout our value chain,
promoting health and safety, applying initiatives to safeguard the so-
cial guarantees of our employees. We made Alsea an even safer and
more reliable place to work.
Finally, despite times of particular difficulty, we continue to support our
various social initiatives related to food, education, and employabili-
ty projects, maintaining our international commitments in community
development.
Our movement “Va por mi Cuenta” (It’s on Me), active since 2012, has
achieved another year of success, meeting all of our fundraising goals
with more than 25 million Mexican pesos and delivering more than 814
thousand nutritious meals in 2020 to vulnerable people, being a driving
force in the goal of eradicating food poverty in Mexico.
10
11
Global Report 2020 We have also developed specific actions related to the response to the
pandemic. A clear example is the “Va por Nuestros Héroes” (This Is for
Our Heroes) initiative; through it, we supported more than 348 thou-
sand people with 319 tons of foods we donated to employees, health
personnel, patients’ relatives, public safety elements, indigenous com-
munities and people suffering from food poverty.
We faced new challenges in which our track record allows us to be we-
ll-positioned, and we do so with the same sensitivity and responsibility
towards the environment. I reiterate my gratitude to everyone who is
part of Alsea’s family. The commitment of our internal team, the value
of our brands, our strong customer focus, our ability to adapt, and the
learning from this year are undoubtedly our foundations for winning in
the future.
“
The commitment of our internal team, the value of our
brands, our strong customer focus, our ability to adapt,
and the learning from this year are undoubtedly our
foundations for winning in the future.
”
Alberto Torrado Martínez
Chief Executive Officer of Alsea
April 2021
12
13
Global Report 2020 OUTSTANDING
OUTSTANDING
ACHIEVEMENTS
ACHIEVEMENTS
Our results are supported by responsible
Our results are supported by responsible
management with a long-term vision and the
management with a long-term vision and the
implementation of a sustained growth strategy
implementation of a sustained growth strategy
that have allowed us to achieve positive growth
that have allowed us to achieve positive growth
rates for our company.
rates for our company.
During 2020, we have achieved a growth of 4%
During 2020, we have achieved a growth of 4%
in net sales and 10% in EBITDA, according to the
in net sales and 10% in EBITDA, according to the
Annual Compound Growth Rate from 2015 to 2020.
Annual Compound Growth Rate from 2015 to 2020.
*2
2018
2019
SALES
3
EBITDA
NET INCOME
46,157
6,408
1,139
58,154
12,618
1,085
2020
38,495
6,918
(3,895)
4
ROE
5
VMT
UNITS
2018
2019
12.3%
4.9%
3,688
8.5%
5.1%
4,310
2020
(38.2)%
(23.0)%
4,193
*6
Income
Net sales
Gross profit
Operating profit
8
EBITDA
7
CAGR
2015-2020
Annual
Growth
2020
%
7
2019
%
3.6%
-33.8%
38,495.4
100.0%
58,154.6
100.0%
4.1%
N.A.
-34.0%
27,040.5
70.2%
40,990.5
70.5%
-133.2%
-1,517.5
-3.9%
4,570.8
7.9%
10.0%
-45.2%
6,917.6
18.0%
12,617.5
21.7%
Consolidated interest income
N.A.
-459.1%
-3,895.4
-10.1%
1,084.7
1.9%
Balance
Total Assets
Cash
Interest-bearing liabilities
Majority Stockholders’ Equity
Profitability
9
ROIC
10
ROE
Stock Market Data of the Share
Price
Earnings per share
Dividend
Book Value per Share
9.2%
83,437.9
53.1%
3,932.4
26.9%
32,212.2
-34.2%
6,303.4
-148.1%
-3.8%
-549.4%
-38.2%
-48.0%
25.89
-449.5%
-3.88
N.A.
0
-26.1%
9.75
Outstanding Shares (In millions)
0.0%
838,5
Operation
Number of Units
Collaborators
7.3%
-2.7%
4,193
0.6%
-21.3%
63,819
76,412.2
2,568.7
25,381.9
9,581.0
7.9%
8.5%
49.83
1.11
0
13.20
838.5
4,310
81,126
2Figures in millions of nominal pesos and under IFRS standards (they do not include
Figures in millions of nominal pesos and under IFRS standards (they do not include
the effect of IFRS 16, nor the reference effect). The variations with respect to the values
the effect of IFRS 16, nor the reference effect). The variations with respect to the values
reported in 2019 derive from an adjustment in the calculations for that year.
reported in 2019 derive from an adjustment in the calculations for that year.
3EBITDA is defined as earnings before depreciation and amortization.
EBITDA is defined as earnings before depreciation and amortization.
4ROE is defined as net earnings regarding net worth.
ROE is defined as net earnings regarding net worth.
5Same-Store Sales.
Same-Store Sales.
14
15
6Figures in millions of nominal pesos and under IFRS standards (they do not include the
Figures in millions of nominal pesos and under IFRS standards (they do not include the
effect of IFRS 16, nor the effect referring to the restatement of hyperinflation in Argentina),
effect of IFRS 16, nor the effect referring to the restatement of hyperinflation in Argentina),
except data per share, number of units and collaborators.
except data per share, number of units and collaborators.
7TACC Compound Annual Growth Rate for 2015 to 2020.
TACC Compound Annual Growth Rate for 2015 to 2020.
8EBITDA is defined as earnings before depreciation and amortization.
EBITDA is defined as earnings before depreciation and amortization.
9ROIC is defined as earnings after taxes for net operating investment (total assets-cash
ROIC is defined as earnings after taxes for net operating investment (total assets-cash
and temporary investment – liability without cost).
and temporary investment – liability without cost).
10ROE is defined as net earnings regarding net worth.
ROE is defined as net earnings regarding net worth.
Global Report 2020
1717
We are the leading restaurant operator in Latin America and Spain, with globally recog-nized brands within the Fast Food, Cafeteria, Casual Dining, Fast Casual and Family Restau-rant segments.1Our business model Our business model as a guarantee to face as a guarantee to face new challengesnew challengesThe recognition of our brands, the common denominator of quality in all of them and the ability to adapt to changes in the market, will allow us to face with guarantees and from a position of strength the recovery scenario in which we find ourselves, after a year of uncertainty and learning.“” Alsea
Alsea S.A.B. de C.V., hereinafter Alsea, we are
the leading restaurant operator in Latin Ame-
rica and Europe, with globally recognized
brands within the Fast Food, Cafeteria, Ca-
sual Food, Casual Fast Food and Family Res-
taurant segments. We have a multi-brand
portfolio made up of Domino’s Pizza, Star-
bucks, Burger King, Chili’s, PF Chang’s, Ita-
lianni’s, The Cheesecake Factory, Vips, Vips
Smart, El Portón, Archies, Foster’s Hollywood,
Ginos, TGI Fridays, Ole Mole and Corazón de
Barro.
The company has more than 4,192 units in
Mexico, Spain, Argentina, Colombia, Chile,
France, Portugal, Belgium, the Netherlands,
Luxembourg, and Uruguay. Our business
model includes supporting all business units
through a Shared Services and Support
Center, providing support in Administrative,
Development and Supply Chain processes.
4,192
business units
3,283 corporate
909 franchises
Mexico
2,184 units
1,821 corporate
363 franchises
11
Spain
1,041 units
759 coporate
282 franchises
12
Portugal
23 units
20 coporate
3 franchises
Argentina
247 units
247 coporate
Uruguay
9 units
9 coporate
Colombia
178 units
146 coporate
32 franchises
Chile
199 units
199 corporate
Netherlands
88 units
16 coporate
72 franchises
Belgium
31 units
31 franchises
Luxembourg
4 units
4 franchises
France
247 units
66 coporate
122 franchises
18
1919
11Does not include 1 unit of Cañas y Tapas, brand sold during 2020. As of December 31,
Does not include 1 unit of Cañas y Tapas, brand sold during 2020. As of December 31,
2020, the Cañas y Tapas brand is no longer part of our portfolio, but at the end of 2020
2020, the Cañas y Tapas brand is no longer part of our portfolio, but at the end of 2020
we continue to have a store that is identified as a unit in the accounting.
we continue to have a store that is identified as a unit in the accounting.
12Includes 3 franchised units located in Andorra.
Includes 3 franchised units located in Andorra.
Global Report 2020 To sustain this capacity, we have 10 Distribu-
tion Centers in strategic areas to supply and
distribute products to our stores located in
Mexico and Latin America.
Centros logísticos
Centros logísticos
55
Centers owned by Alsea
MEXICO
Hermosillo
22
Centers owned by Alsea
COLOMBIA
Monterrey
Cancún
State of Mexico
Tláhuac
Cali
Bogotá
11
Center operated by third
parties
ARGENTINA
11
Center operated by third
parties
URUGUAY
11
Center operated by third
parties
CHILE
Through these distribution centers, we ma-
nage to provide a differential for brands, en-
suring supply with the best costs in the in-
dustry, supported by a solid production and
distribution model adapted to the needs
and geographies of each market.
At Alsea Europe, we have centralized pur-
chasing management for all the geogra-
phies where we have a presence. This mo-
dality has been implemented since August
1, 2020. Likewise, since May 1, 2020, the supply
chain management process is carried out
by two logistics operators operating under a
4PL (Fourth-Party Logistics) model.
The information collected in the following
sections responds to Alsea’s main activities
in the geographical areas where it is present.
This report collects the actions and global
performance for Alsea S.A.B. de C.V. Howe-
ver, due to the actions carried out in each
geography and for a better understanding,
where appropriate, the information will be
disaggregated according to the following
division:
ALSEA
MEXICO
Mexico
ALSEA
SOUTH AMERICA
Argentina, Chile,
Uruguay, and Colombia
ALSEA
EUROPE
Spain, Portugal, France,
Netherlands, Belgium,
and Luxembourg
20
2121
Global Report 2020 A model
recognized through
our brands
Our business model is customer-centric and
based on a philosophy with clear values that
allow us to establish our commitment to ex-
cellence with determination.
We focus on the operation of restaurant chains, our
We focus on the operation of restaurant chains, our
own and franchisees and related businesses that
own and franchisees and related businesses that
satisfy the food needs of customers inside and outside
satisfy the food needs of customers inside and outside
the home.
the home.
To do this, we maximize synergies to offer
surprising products and quality services, fo-
cusing on the smallest detail to obtain ex-
traordinary results. We convey our passion
through our dishes prepared with the utmost
dedication to offer a differential value to the
customer.
Our brands are positioned as the most re-
cognized and among the most chosen by
consumers
in the different geographies
where we are present. This prestigious port-
folio of brands includes Domino’s Pizza, Star-
bucks, Burger King, Chili’s, PF Chang’s, Ita-
lianni’s, The Cheesecake Factory, Vips, Vips
Smart, El Portón, Archies, Foster’s Hollywood,
Ginos, TGI Fridays, Ole Mole and Corazón de
Barro.
We consolidate a solid position in the mar-
ket, which, backed by market studies and
analysis, places us at the forefront of the
industry. The study recently published by
Brand Finance, in March 2021, has positioned
Starbucks as the first brand in the “Ranking
of the most valuable fast-food brands in the
world”.
This study evaluates the different brands ac-
cording to their impact, strength, and their
value in the market. In addition to Domino’s
and Burger King, other of our brands have
also been part of this ranking that recogni-
zes the impact and weight of each brand in
the fast-food market.
Ranking of
Ranking of
the World’s
the World’s
Most Valuable
Most Valuable
Fast-Food
Fast-Food
Brands
Brands
1º1º
5º5º
Starbucks
Starbucks
Domino´s Pizza
Domino´s Pizza
12º12º
20º20º
23º23º
Burger King
Burger King
Chili’s
Chili’s
The Cheesecake Factory
The Cheesecake Factory
13Annual study carried out by Brand Finance.
Annual study carried out by Brand Finance.
22
23
Global Report 2020 We grow together with our
brands around the world
15%
South America
We promote organic and dynamic growth through solid premises, which are essential to
create shared value globally:
• Customer centric.
• Develop the best team of people.
• Decision making focused on our clients and collaborators.
• Continue to increase the value potential of the company.
• Generate value for all shareholders.
We are a company committed to excellence
in operation, and we act with integrity, soli-
dity and agility in all our brands in order to
guarantee a differential experience for our
clients, focused on providing a dose of hap-
piness even in the smallest details. We serve
a global demand through all our business
units.
Main sales
by
geographical
area
36%
Europe
49%
Mexico
1,234 units
811 corporate
423 franchises
1,524 units
1,270 corporate
254 franchises
402 units
402 corporate
76 units
76 corporate
16 units
16 corporate
79 units
62 corporate
17 franchises
121 units
85 corporate
36 franchises
106 units
89 corporate
17 franchises
24
282 units
272 corporate
10 franchises
32 units
32 corporate
229 units
101 corporate
128 franchises
28 units
28 corporate
1 units
1 corporate
6 units
6 corporate
2 units
1 corporate
1 franchises
39 units
16 corporate
23 franchises
13 units
13 corporate
2 units
2 corporate
*Does not include 1 unit of Cañas y Tapas, brand sold during 2020.
Does not include 1 unit of Cañas y Tapas, brand sold during 2020.
25
Global Report 2020 Market segments by brand*
Market segments by brand*
39%
36%
14%
1%
9%
Fast Food
Restaurant
Cafeteria
Casual Food
Casual
Fast Food
Family
Restaurant
Our operational capacity has allowed us to respond to the challenges of 2020, po-
sitioning ourselves with a differential proposal within the catering industry. Howe-
ver, reviewing and updating our strategy is essential to ensure sustained long-term
growth. We promote and drive innovation in 6 strategic areas for Alsea:
• WE CREATE TALENT
We seek to attract, retain, develop and engage our people to develop the best
talents.
• WE PROMOTE EXCELLENCE
We constantly improve our customers’ experience through excellence in each of
our operations.
• DIGITAL TRANSFORMATION
We support the development of tools and a creative and innovative marketing
strategy that highlights the differential characteristics of our company; our pro-
ducts and services to be as, when and where the client wants.
• WE ENHANCE OUR BRAND PORTFOLIO
We operate through 17 leading brands in the international market. We not only
offer brands, but quality experiences and gratitude to our clients. Our brands ex-
pand us and allow us to bring our experience closer to consumers from anywhere
in the world.
• WE PROMOTE INNOVATION
We work to adopt the best practices in the industry, which allow us to innovate in
products and in the customer experience, with the objective of leadership in each
of our brands.
• COMMITMENT TO SUSTAINABILITY AND CREATION OF
SHARED VALUE
We promote cultural transformation towards a company committed to sustai-
nability in a transversal way and the creation of shared value through a positive
socioeconomic impact in the environments where we operate.
*Includes corporate units and franchised units. The percentage of the
total number of Alsea units operating in each market segment served is
indicated.
26
27
Global Report 2020 We drive growth.
A look from Alsea
to the future
During 2020, our adaptability and flexibility
have been key in a year in during which the
social and economic crisis derived from the
spread of COVID-19 has globally affected all
industries.
We are facing one of the most significant
global challenges in recent times, with pro-
found changes in the short and medium
term, which have led us to develop a strate-
gy to respond to new challenges and a new
reality established, which it has allowed us to
come out stronger to win in the future within
a context of uncertainty.
We have reinforced and
We have reinforced and
intensified advances in lines of
intensified advances in lines of
work in which we were already
work in which we were already
working; quality employment
working; quality employment
and cultural transformation,
and cultural transformation,
digitization, the transversal
digitization, the transversal
impulse of sustainability and
impulse of sustainability and
the capacity for resilience and
the capacity for resilience and
adaptation in the face of a
adaptation in the face of a
context full of challenges and
context full of challenges and
opportunities
opportunities
28
28
29
29
Global Report 2020 20202020
in figures...
in figures...
Starbucks
Number one brand
in the “Ranking of
the World’s Most
Valuable Fast-Food
Brands”
78%
78%
corporate
22%22%
franchises
SUSTAINABLE
SUSTAINABLE
GROWTH
GROWTH
MODEL
MODEL
1111
countries
1717
brands
4,192
4,192
units
48%48%
women
More than
20.09
20.09
average hours of
training per
employee
ALSEA IS
ALSEA IS
TALENT
TALENT
63,000
63,000
employees
1,282,492
1,282,492
hours of training
Strengthening of
measures
health and
health and
safety
safety
measures
More than
More than
EMPATHY
EMPATHY
AND LISTEN
AND LISTEN
TO OUR
TO OUR
CUSTOMERS
CUSTOMERS
273273 million
million
clients served
1111 million
million
members in
our loyalty
programs
94%94%
incidents
resolved by
Customer Service
814,000
814,000
nutritious meals
distributed through
the “Va por Mi
Cuenta” Movement.
More than
175,000
175,000
food rations donated
through the “Va por
Nuestro Héroes”
initiative.
More than
9,000
9,000
food donated
between all Alsea
Europe brands
in Spain.
11 million
million
food rations donated through our
programs.
Commitment
Commitment
to our
to our
communities
communities
395 Tons
395
Tons
of food donated in
all Alsea markets.
More than
25 25 millionmillion
in the “Va Por Mi Cuenta”
campaign to
continue the fight
Obtaining the Socially
Responsible Company
distinctive from the
Mexican Center for
Philanthropy
Promotion of digitization
Promotion of digitization
New digital innovation strategy aimed at
increasing our clients’ trust and experience
in new digital trends.
Alliance for
Alliance for
Social Responsibility
Social Responsibility
in Mexico
in Mexico
9th consecutive year
Global trends
Global trends
and challenges
and challenges
Alignment with
Alignment with
the SDGs
the SDGs
Inclusion in the
S&P Dow Jones
S&P Dow Jones
Sustainability Index Mila
Sustainability Index Mila
For the 3rd
consecutive
year
30
31
Global Report 2020
2020 has been a year of adaptation and
response to the challenges of the pandemic.
We have maintained optimal sales levels, in
accordance with the restrictions imposed
globally in response to the different peaks
of the pandemic. Our solid positioning in
take-out, drive thru, home delivery through
our own platform and through aggregators
have allowed us to immediately meet the
needs of our customers. At the same time,
we have grown in loyalty programs reaching
more than 11 million members in our pro-
grams; 5 million through the Wow program,
2 million in Starbucks Members, 1.5 million
Club Vips from Alsea Europe and 2.5 million
for Fosters in Alsea Europe. Likewise, during
2020, we reached more than 400 thousand
active members of “Wow Rewards” and 4.9
million contactable clients through CMR of
Domino’s Pizza in Alsea Europe.
At an operational level, we have accessed
government support programs in the di-
fferent locations where we are present with
benefits in the return of social security con-
tributions (in Europe), recovery of social se-
curity charges (in Argentina), or the tempo-
rary suspension of social security (in Chile).
From the point of view of our team of pro-
fessionals, we have had to adapt resour-
ces to fluctuating demand throughout the
year, where the activity has even come to
a standstill. The panorama generated has
caused us the need to apply exceptional
emergency and temporary employment re-
gulation mechanisms, in accordance with
the various guidelines established by the
competent authorities in each operating
country.
Also, we have had to face great challenges
within our value chain, taking into account
the different risks generated in each of our
processes. From guaranteeing the supply
for our business units, adapting operations
to the various levels allowed and listening to
the demands of our customers.
Another point of view that has gained great
prominence has been the health and safety
of our employees as well as our clients. We
have applied strict safety standards in all
establishments.
At Alsea Europe we are currently completing
a process of structural integration of our bu-
siness units. This strategic process began at
the end of 2018 with the acquisition, by our
parent company Food Service Project S.L., of
Sigla S.A. (former Grupo Vips) and the ne-
twork of stores operated by Starbucks EMEA
in France and Benelux14.
Based on a solid experience and structure,
at Alsea, we are prepared for a new reality,
which, once established, has caused chan-
ges that are here to stay. This unusual year
has also been reflected in our results.
As a leading company in the sector, we look
to the future with optimism and we are com-
mitted to strengthening our company and
we will continue working to generate socioe-
conomic value, promote employment in the
communities where we operate and mana-
ge our operations in a sustainable way.
32
3333
14Benelux comprises Belgium, the Netherlands and Luxembourg.
Benelux comprises Belgium, the Netherlands and Luxembourg.
Global Report 2020
Aligned with the
challenges of
today’s society
As signatories of the United Nations
As signatories of the United Nations
Global Compact, we assume the
Global Compact, we assume the
commitment to respect the 10
commitment to respect the 10
principles of the Global Compact, in
principles of the Global Compact, in
terms of Human Rights, Labor Rights,
terms of Human Rights, Labor Rights,
the Environment and the Fight
the Environment and the Fight
against corruption.
against corruption.
Likewise, we establish objectives and actions,
within our corporate strategy, that allow us
to contribute and respond to the various
Sustainable Development Goals (SDGs), be-
ing a frame of reference to develop our ac-
tivity in a way that allows us to face global
challenges and assume the responsibility for
the sustainable transformation of our com-
pany globally.
• Collaboration with institu-
tions to support the most
vulnerable groups.
• Support for NGOs and civil
society.
• We work to combat and
eradicate hunger:
◊ Operations of children’s
canteens.
◊ Awareness raising and
fundraising through the
Movement “Va por Mi
Cuenta” and “Va por
Nuestro Héroes”.
◊ Donation of food and
distribution of nutritious
meals and meals served.
◊ Donations in kind to the
Food Bank in Alsea Europe
• Promotion of healthy habits.
• Support for recreational ac-
tivities for our employees.
• Comprehensive security
policies and protocols.
• COVID-19 Protocols.
• Collaboration with educa-
tional institutions.
• Continuous training and
training plan for our colla-
borators.
• Investment in education
and promotion of the em-
ployability of young people
in vulnerable situations.
• Through the Integra pro-
gram, we granted educa-
tional opportunities to 2,073
young people in vulnerable
situations.
• Equality and non-Discrimi-
nation.
• Training and labor insertion
of vulnerable groups.
• Work-family balance.
• Protocol against harass-
ment.
• Code of Ethics.
• Use and treatment of wastewa-
ter.
• Efficient water management
through the evaluation of
improvement and optimization
projects.
• Responsible use of resources.
• Energy efficiency plan.
• Logistics and infrastructure
improvements.
• Energy efficiency (LED lighting,
lighting detectors, others).
• Purchase of clean or renewable
energy.
• Employment Quality.
• Equality and Non-Discrimination
• Training and job placement.
• Promotion of youth employ-
ment.
• Work-family balance.
• Occupational risk prevention
• Stable labor relationships
• Improved logistics and infras-
tructures.
• Digital employment channels.
• QR codes in restaurants.
• Gastronomic innovation.
• Collaboration with institutions,
to support the most vulnerable
groups
• Training and job placement
• Promotion of youth employment
• Support for the social, cultural
and sports development of our
communities.
• Improve infrastructures.
• Electric fleet.
• Safe and inclusive work envi-
ronments.
• Provisioning and local consumption.
• Support local suppliers.
• Efficiency in the use of resources.
• Ecological products and local eco-
nomy boost.
• Efficient waste management.
• Elimination of single-use plastic (in
plastic straws and Styrofoam in all our
brands).
• Adaptation of our Delivery packages
in all Alsea brands, adapting them to
European regulations.
• Food waste management.
• Provisioning and local consumption.
• Improved logistics and infrastructures.
• Efficiency in the use of resources.
• Calculation of Co2 emissions.
• Global Environmental Policy.
• Electric fleet.
• Fat separators, avoiding contamina-
tion.
• Efficient water management through
the evaluation of improvement and
optimization projects.
• Collection of oil to recycle it into fuel.
• Efficiency in the use of resources.
• FSC certified paper.
• Compliance to the Principles of the
Global Compact.
• Transparency in our management.
• Code of Ethics.
• Strategic alliances with NGO’s, asso-
ciations and foundations.
• Volunteering.
34
3535
Global Report 2020 3737
2Culture and commitment: Culture and commitment: our keys for the futureour keys for the futureWe are a company of people and for people, committed to excellence in operation, acting with integrity. We do things with agility to de-liver an amazing experience to our clients and ensure extraordinary results, providing a dose of happiness even in the smallest details.“” Alsea Culture
Our culture is guided by a strong purpose and values that
allow us to focus on deep understanding of the customer
and provide an exceptional experience.
Purpose.
Purpose.
Ignite the spirit
Ignite the spirit
of the people
of the people
“
To know the
To know the
customers, to
customers, to
know what makes
know what makes
them happy and
them happy and
do it.
do it.
”
Our values
Our values
To demonstrate
passion for
excellence, to
achieve higher
and higher goals.
Obsession for
restaurants and
taking care of the
business as his
own.
To constantly raise
the standards of
satisfaction, to serve
and surprise.
To add ideas and
talents to form a
community that
multiplies results.
To continuously
improve to strengthen
the Alsea experience
with flawless
execution.
38
39
Ethical and
responsible
Responsible management, sustained by the
Alsea culture, is centered on principles of
ethics, integrity and transparency and allows
us to advance in the integration of sustaina-
bility at all levels.
Our management model, based on the
commitment to our culture and principles of
good corporate governance, makes it pos-
sible to generate a feeling of belonging and
identity on the part of our collaborators that
allows us to offer the best experience and
enrich the moments of our clients.
In this sense, our Code of Ethics and our Cor-
porate Policies generate a regulatory fra-
mework for responsible action, which rea-
ches all the people who are part of Alsea
and, also, the groups interested in maintai-
ning a relationship with our company. The
aforementioned framework is a mandatory
cross-sectional mechanism that establishes
the guidelines for action.
Global Report 2020
Code
of Ethics
Línea
correcta
The Code of Ethics establishes the guidelines
of conduct to be adopted in a committed
manner by all Alsea employees, their brands
and strategic partners, in order to contri-
bute to the achievement of the company’s
objectives and goals, in addition to ensuring
that the way of doing business is carried out
based on values and ethical standards, thus
ensuring the sustainable development and
generation of value of the company.
The principles and areas of action that defi-
ne the lines of conduct include:
1. Compliance with the Law, regulations
and internal and external standards
2. Our customer service
3. Equal opportunities
4. Harassment-free workplace
5. Occupational Safety
6. On conflicts of interest
7. Acceptance of gifts
8. Transparent and bribery-free business
practices
9. Care of our work tools.
10. Regarding Fraud
11. Financial Information
12. Care of our private and confidential in-
formation
13. Environment and responsible use of re-
sources
Furthermore, tools such as Línea Correc-
ta (Ethics Hotline) or Canal de Denuncias
(Whistleblower Channel) are established to
report situations that are contrary to the gui-
delines of the Alsea Code of Ethics. Likewise,
the correct operation and breaches in line
with the Code of Ethics correspond to the
Ethics Committee.
Aware of the need to identify behaviors or
situations that put our customers, collabo-
rators, and suppliers at risk, at Alsea Mexico
and Alsea South America we continue with
the Línea Correcta program, a confidential
reporting means operated by Deloitte. This
independent third party provides objectivity
and transparency in the process of attention
and resolution of complaints
Our clients also have the opportunity to re-
port deficiencies in the service of any of our
brands through this program, in order to im-
prove the experiences and retain their pre-
ference.
During 2020, in Alsea Mexico and Alsea Sou-
th America, we received 876 complaints, of
which 46 are from suppliers, 35 from cus-
tomers, and the rest of collaborators. At the
end of this year, 100% of the complaints were
dealt with, of which 98% were closed, the re-
maining 18 are in the process of investiga-
tion..
The issues that were reported are coercion,
conflict of interest, breach of trust, fraud and
theft, before which, Alsea defines programs
to strengthen communication options with
customers, communication campaigns to
focus the Línea Correcta system to collabo-
rators and suppliers, and thus channel and
deal with complaints in an agile and objec-
tive way.
At Alsea Europe, the complaint channel is
managed by an internal labor relations
team. In this way, it makes available to all
its collaborators, clients, suppliers and fran-
chisees, a direct and confidential commu-
nication channel to report any breach, irre-
gularity or behavior contrary to its principles
and Code of Ethics. This communication and
complaints channel is organized and ma-
naged in accordance with the provisions of
the Complaints Channel Operation Protocol.
For more information about the Code of
Ethics please visit: http://www.alsea.net/re-
lacion-con-inversionistas/codigo-de-etica
Anti-corruption
Anti-corruption
policy
policy
40
41
Culture of transparency
and anti-corruption
to
integrity,
We uphold principles based on a strong
commitment
transparency,
ethics and business responsibility in all mar-
kets where we operate; prohibiting any form
of corruption, bribery and attitude that goes
against our norms of conduct.
We have an Anti-Corruption Policy that es-
tablishes the mechanisms and guidelines
to guarantee compliance with the different
applicable anti-corruption laws and laws, in
the way we do business and in all relations-
hips that arise in our daily performance. It
provides the set of norms and instructions
to be followed by our collaborators in their
relationship with clients, suppliers, public
administrations and other third parties that
carry out activities on behalf of Alsea. Con-
sequently, it will also apply to franchisees,
contractors, union organizations and em-
ployee representatives.
“
It establishes the necessary
support for compliance with the
legal regulations and regulations
applicable to each country,
promoting the highest ethical
standards.
”
Global Report 2020
“
It establishes the principles for decision-
making with a direct or relevant tax
impact, always in accordance with the
regulations applicable to each country
where Alsea Europe has a presence and
activity.
Fiscal Policy
Fiscal Policy
”
We promote a culture of zero tolerance
when it comes to corruption and bribery, so
we are committed to acting professionally
and ethically at all times and guaranteeing
the necessary mechanisms and channels to
make our performance in this management
transparent.
Since 2019, the dissemination of Alsea’s An-
ti-Corruption Policy to collaborators is con-
ducted through the e-learning platforms
that we have and our internal network. To
reinforce these issues and the guidelines of
our Code of Ethics, employees reiterate their
commitment to the company by signing
acceptance and compliance letters to the
Code and Anti-Corruption Policy.
Likewise, communications are sent that rein-
force our culture of integrity and the use
of Línea Correcta or Canal de Denuncias
(Whistleblower Channel) in Alsea Europe,
reinforcing essential criteria related to our
documents, for example:
• Code of Ethics
• Travel Expenses Business Norms
42
• Social Responsibility Business Norms.
• Policy Conflict of interest
• Purchasing Business Norms
In Alsea Europe, within the framework of its
regulations, there is a Tax Policy linked to the
part of a fiscal nature and the prudent ma-
nagement of the derived risk. Therefore, due
to its direct relationship with the applicable
laws in each geography, it closely affects
matters related to the fight against corrup-
tion and ethical behavior.
The Board of Directors is in charge of deter-
mining and approving the tax strategy, as
well as the supervision and monitoring of
investments with special importance, parti-
cularly regarding their relevance to the tax
impact. In addition, the tax area ensures
compliance with current tax regulations and
our Policy. Lastly, the Audit Committee is the
body responsible for supervising the Policy
and proposing opportunities for improve-
ment.
Alsea is committed to maintaining a work
environment that respects and supports the
protection of basic Human Rights for all its
employees in all the geographies where it
has a presence, regardless of the country in
which they work, to the extent permitted by
law. To that end:
• Alsea strictly prohibits all forms of work
that could be detrimental to the health
or safety of children.
• Alsea strictly prohibits forced or compul-
sory labor for any employee.
• Alsea respects the rights of employees to
participate in free association in collec-
tive bargaining processes if they so wish.
• Alsea promotes, protects and helps gua-
rantee the full and equitable enjoyment
of Human Rights for all people, including
people with disabilities.
Human Rights
as a guarantee of
social strengthening
At Alsea we understand respect for human
rights as an essential and priority principle.
Respect for them must be understood as
a shared responsibility. For this reason, we
provide our stakeholders with the neces-
sary mechanisms to guarantee compliance
and to move towards the strengthening of a
more responsible society.
Our model of good corporate governance
and regulatory compliance, together with
strict respect for current legislation, compri-
se our human rights management model.
Through our Global Human Rights Policy,
applicable to all functional areas, brands
and collaborators that are part of Alsea as-
sume the commitment of relationships ba-
sed on respect, dignity and promoting this
attitude in each of their daily tasks.
“
It emphasizes Alsea’s commitment
to treating each individual with
respect and dignity, always taking
into account the inalienable
Human Rights of each person.
”
Human
Human
Rights
Rights
Policy
Policy
43
Global Report 2020 The management of the privacy of our clients
is supervised by the internal department of
Privacy of Personal Data, in charge of com-
municating to our clients everything related
to the treatment of their data and exercise
of their ARCO Rights through our privacy no-
tices (in Mexico and Argentina).
Additionally, we provide permanent training
on this subject to our collaborators through
work plans and continuous improvement
processes of the organization. We continue
to strengthen our data protection monito-
ring and management practices for Sto-
res, Plants, Distribution Centers and Support
Center.
Data
protection
The control and management of the privacy of
our stakeholders (clients, suppliers, legal repre-
sentatives, collaborators of the organization) is
essential for Alsea. We have protocols and se-
curity measures aligned with current legislation
on this matter, to ensure data protection and
prevent the risk of violating the confidentiali-
ty, integrity and availability of information. The
control and management of privacy and data
protection are supervised by those directly res-
ponsible for each of the internal contact points.
At Alsea, we recognize the importance of
the treatment and protection of personal
data that we collect from individuals (being
clients, suppliers, legal representatives and/
or collaborators) as well as the risk and res-
ponsibility that their use implies. Structura-
lly, we adopt data treatment and protection
measures aligned with the current legisla-
tion of each territory.
In line with the great technological develop-
ment, we have had and the acceleration of
our digital innovation strategy, the security
of internal and external information is of vital
importance. As in all our actions, based on
strict compliance with the law, we guarantee
the confidentiality and data protection of all
people who establish a relationship with our
company.
In a more specific context, for Alsea Europe
we have a Data Protection Policy that esta-
blishes the general and specific principles on
the processing of personal data. In addition,
it establishes the assessment of the need,
accuracy, and veracity of collecting said in-
formation and the procedures to perform it.
Confidentiality obligations are established in
the corporate compliance policies and pro-
cedures. These obligations extend to all per-
sons who establish a relationship with Alsea
Europe and its brands, including franchisees
and suppliers.
During this year, Alsea Europe has promoted
the development of access to information
in restaurants through QR codes, combining
a process of technological innovation with
greater information security. In addition, ma-
nagement through QR codes have helped
minimize contacts in relation to COVID-19.
Corporate
Governance
The Board of Directors is Alsea’s highest go-
verning body and promoter of good corpo-
rate governance practices. In addition, the
corporate management structure is com-
pleted by the Corporate Practices Commi-
ttee and the Audit Committee, two commit-
tees that perform functions as intermediate
management bodies and that support the
Board of Directors.
Alsea’s Board of Directors has been charac-
terized by its actions and its solidity, aligned
with the highest national and international
standards in matters of corporate gover-
nance. We advance in the transparency and
reporting processes to provide complete,
clear and timely information. We took an es-
sential step in the structure of our Council,
reaching twelve members, one of which is
a woman, and the recent incorporation of
three members, to provide the Council with
more experience and a strategic vision that
allows us to face the current challenges and
challenges successfully. Proactivity, adapta-
tion and flexibility in the context of the pan-
demic generated by COVID-19 have been of
great importance.
Likewise, Alberto Torrado Martínez, was rati-
fied as Executive President of Alsea, who as
a founding partner has vast experience and
global knowledge of the company’s busi-
ness and culture, granting suitability for the
strategic and differential management of
the company.
It establishes the guidelines that define the
guidelines to be followed in the processing
of personal data and compliance with the
legislation in each of the countries where
Alsea Europe operates.
Data
Data
Protection
Protection
Policy
Policy
“
”
44
45
Global Report 2020 At Alsea, we have a Nominating and
Compensation Committee that is em-
powered to propose to the Shareholders’
Assembly, the number and integration of
the members of the Board of Directors,
considering the competencies and abili-
ties of the candidates and the goals and
objectives of the company, as well as the
remuneration received by said directors.
Likewise, at Alsea, we determine that the
compensation for the members that
make up its Board is a fixed amount
applicable according to their atten-
dance at each session and the Com-
mittees to which they belong. In turn, we
have implemented clear and objecti-
ve mechanisms to assess performance
management of our Board of Directors
and, where appropriate, propose exter-
nal training on relevant issues in the de-
velopment of the company’s business,
allowing efficient the Directors’ delibera-
tion and decision-making.
Board of
Board of
Directors
Directors
Alsea’s Board of Directors is
made up of 12 members, 4 of
which are related proprietary
directors, 7 are independent
and 1 is related.
Chief Executive Officer
Alberto Torrado Martínez
Proprietary Directors
Alberto Torrado Martínez
Chair of the Board
Cosme Alberto Torrado Martínez
Armando Torrado Martínez
Federico Tejado Bárcena
Independent Directors
Fabián Gerardo Gosselín Castro
Julio Gutiérrez Mercadillo
León Kraig Eskenazi
Adriana María Noreña Sekulist
Carlos Vicente Salazar Lomelín
Alfredo Sánchez Torrado
Luiz Carlos Ferezin
Related Counselors
Pablo Torrado Aguilar Cauz
Technical Secretary
Xavier Mangino Dueñas
CORPORATE
CORPORATE
STRUCTURE
STRUCTURE
Board of Directors
Chief
Executive
Officer
Committee
of Corporate
Practices
Audit
Committee
Internal
Audit
Alsea Europe
Spain, Portugal, France,
Netherlands, Belgium,
and Luxembourg.
Alsea Mexico
Alsea
South America
Argentina, Chile,
Colombia, and
Uruguay.
46
4747
Global Report 2020 Audit Committee
Audit Committee
Committee of Corporate Practices
Committee of Corporate Practices
In accordance with the provisions of the Securities Market Law and the status of Alsea, the
Audit Committee is composed of the following:
It is made up mostly of independent directors and is currently made up of the following:
Alfredo Sánchez Torrado
Chair
León Kraig Eskenazi
Chair
Julio Gutiérrez Mercadillo
Member
Luiz Carlos Ferezin
Member
Julio Gutiérrez Mercadillo
Member
Cosme Alberto Torrado Martínez
Member
Fabián Gerardo Gosselín Castro
Member
Elizabeth Estrella Garrido López
Non-member Secretary of Audit Committee
Elizabeth Estrella Garrido López
Non-member Secretary of Committee of Corporate Practi-
Functions and responsibilities
Functions and responsibilities
Functions and responsibilities.
Functions and responsibilities.
•
•
•
Recommend the Board of Directors the candida-
tes for external auditors of the company, the con-
tracting conditions, and the scope of professional
work and supervise compliance with them.
To be communication channel between the Board
of Directors and the external auditors, as well as
to ensure the independence and objectivity of the
latter.
Review the work program, observation letters and
internal and external audit reports and report to
the Board of Directors on the results.
• Meet periodically with the internal and external
auditors, without the presence of company offi-
cials, to hear their comments and observations on
the progress of their work.
• Give their opinion to the Board of Directors on the
policies and criteria used in the preparation of fi-
nancial information, as well as the process for its
issuance, ensuring its reliability, quality and trans-
parency.
• Contribute to the definition of the general guide-
lines of internal control, internal audit and assess
their effectiveness.
•
Verify that the mechanisms established to con-
trol the risks to which the company is subject are
observed.
• Coordinate the work of the internal auditor.
• Contribute to the establishment of policies for
•
operations with related parties.
Analyze and assess operations with related par-
ties to recommend to the Board of Directors.
• Decide the hiring of third-party experts who give
their opinion on the operations with related parties
or any other matter, which allows the adequate
fulfillment of their functions.
Verify compliance with the Code of Ethics and the
mechanism for the disclosure of undue facts and
the protection of informants.
Assist the Board of Directors in the analysis of con-
tingency and information recovery plans.
Verify that the necessary mechanisms are in pla-
ce to ensure that the company complies with the
different legal provisions.
•
•
•
•
•
•
•
•
•
•
Suggest criteria to the Board of Directors for
appointing or removing the CEO and high-level
officials.
Propose to the Board of Directors the evaluation
and compensation criteria for the General Direc-
tor and high-level officials
Recommend to the Board of Directors the criteria
to determine the payments for separation from
the company of the General Director and high-le-
vel officials.
Recommend criteria for the compensation of the
directors of the company.
Analyze proposal made by the CEO regarding the
structure and criteria for staff compensation.
Analyze and present to the Board of Directors for
approval, the statement to consider the company
as socially responsible, the Code of Ethics, as well
as the information system of improper acts and
the protection of informants.
Analyze and propose to the Board of Directors the
approval of the formal succession system for the
CEO and high-level officials, as well as verify com-
pliance.
•
•
•
•
•
•
Study and propose to the Board of Directors the
strategic vision of the company to ensure its sta-
bility and permanence over time.
Analyze general guidelines presented by the ge-
neral management for the determination of the
strategic plan of the company and follow up on
its implementation.
Assess investment and financing policies of the
company proposed by the general management
and give its opinion to the Board of Directors.
Issue opinion on the premises of the annual bud-
get presented by the CEO and monitor its applica-
tion, as well as its control system.
Assess mechanisms presented by the general
management for the identification, analysis, ad-
ministration and control of risks to which the com-
pany is subject and give its opinion to the Board
of Directors.
Assess criteria presented by the Chief Executive
Officer for the disclosure of the risks to which the
company is subject and give its opinion to the
Board of Directors.
48
4949
Global Report 2020 Currently, as a sign of continuous improve-
ment, we are in the process of creating a
Governance Committee, which will be made
up mainly of independent members and
whose objective will be to advance towards
a solid and benchmark model in terms of
responsible corporate governance.
Its main functions will be to evaluate com-
pliance with the best corporate governan-
ce practices, ensure the permanence and
transparency in the rendering of accounts
by the different management bodies and
directors of the Company and ensure that
the members of the second generation of
the founders successfully transfer the busi-
ness, applying best practices and corporate
strategy for long-term sustainable growth.
Leading the way
to sustainability
At Alsea we understand sustainability as something inherent to our business; it is a commit-
ment that encompasses our entire organization. The company’s Sustainability Model allows our
positioning and performance to achieve our goals and strengthen our contributions towards
sustainable development. To do this, we have four Committees that make up a Sustainability
Model that allows us to move forward responsibly and manage our direct and indirect impact.
Our model is made
Our model is made
up of 4 strategic
up of 4 strategic
committees that
committees that
report to the
report to the
Sustainability
Sustainability
Committee made
Committee made
up of the Company’s
up of the Company’s
Top Management .
Top Management .
The Sustainability Commit-
tee is in charge of identifying
and managing the needs
inherent to the environment
and stakeholders, as well
as defining the sustainabili-
ty strategy and supervising
compliance with the actions
and initiatives proposed by
the committees.
COMMUNITY
DEVELOPMENT
RESPONSIBLE
CONSUMPTION
S t a keholders
S
O
G
N
CUSTOMERS C
DIA
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M
T
N
E
M
N
R
E
V
O
G
Sustainability
Sustainability
Committee
Committee
S
R
E
SHAREHOLD
O
M
M
UNITY
O
L
L
A
B
O
R
A
T
O
R
S
S
U
P
P
L
IE
R
S C
QUALITY
OF LIFE
ENVIRONMENT
50
5151
Global Report 2020Strategic Committes
Alsea Mexico manages and leads this Sus-
tainability Model. South America and Europe
carry out open and fluid coordination with
the sustainability team in Mexico to align
their policies and strategies with the Alsea
Sustainability Model, adapting them to local
demands and requirements. In this matter,
coordination and management of the diffe-
rent strategies and inherent risks are critical,
such as strict compliance with the different
regulations in each of the territories where
we operate.
Our Social Responsibility structure is divided into three levels that guarantee the total efficien-
cy of our actions.
SOCIAL RESPONSIBILITY STRUCTURE
SOCIAL RESPONSIBILITY STRUCTURE
Governance
Level
Strategic
Level
Operational
Level
SOCIAL
RESPONSIBILITY
COMMITTEE
SUPPORT
TEAM
RESPONSIBLE
CONSUMPTION
COMMISSION
QUALITY OF LIFE
COMMISSION
URBAN DEVELOPMENT
COMMISSION
ENVIRONMENTAL
COMMISSION
Each commission has a Support Group, which has the objective of providing support and
support in the execution of the initiatives of each of the commissions
This Sustainability Model works as a reference framework for developing our business growth
strategy and supports both the decisions and initiatives and projects we promote. In turn, we
rely on important international guidelines and standards, and we are part of important initia-
tives in the field of corporate responsibility:
We have been
listed on the
Sustainable
IPC of the BMV
since 2013.
15
16
CEMEFI
has recognized
us for nine consecutive
years as a Socially
Responsible Company
(SRC).
We ratify the compliance
and commitment of
Alsea Mexico to the
United Nations Global
Compact (members
since 2011).
Third consecutive year
as one of the member
companies of the Dow
Jones Sustainability
MILA (Latin American
Integrated Market).
52
5353
15The Mexican Stock Exchange launched in 2011 the Sustainable IPC, the first sustainable index in
The Mexican Stock Exchange launched in 2011 the Sustainable IPC, the first sustainable index in
Mexico, with the aim of promoting the adoption of policies and measurement systems in Social,
Mexico, with the aim of promoting the adoption of policies and measurement systems in Social,
Environmental and Corporate Governance matters.
Environmental and Corporate Governance matters.
16Mexican Center for Philanthropy.
Mexican Center for Philanthropy.
17Reference index that measures the performance of listed companies by market capitalization in
Reference index that measures the performance of listed companies by market capitalization in
economic, environmental and social matters.
economic, environmental and social matters.
Global Report 2020
Strategic Commissions
Through these four strategic commissions, from Alsea Mexico, we guide our
performance of corporate social responsibility.
Responsible consumption
We promote a balanced lifestyle integrating the
pleasure of a quality food and a healthy coexisten-
ce in combination with physical activity.
Quality of life
We promote the integral development of our collabo-
rators, facilitating the conditions for them to harmo-
nize their personal and professional life and we offer
them occupational health and safety programs.
Environment
We promote the care of the environment through the
efficient use of resources: energy, water, supplies and
waste.
Community development
We seek food security for vulnerable communities
and promote human development through initiatives
that promote education and employability.
Nutritional communication
Occupational Safety
• 100% of the pre-packaged foods that we sell to our
consumers of all our brands comply with the new labeling
standard.
• We are in the process of putting the caloric content of our
dishes on the virtual platforms.
• Creation of the COVID-19 Emergency Committee.
• Creation and communication of protocols and operating
guidelines for Stores, Distribution Centers and Support
Center.
• Work on strengthening protocols and prevention measu-
• Plan for reformulation of products by brand (less calories,
res.
sugars, fats and/or salt).
Food safety and health
• Implementation of the COVID-19 plan 100% operations.
• Agility in handling consumer complaints in less than 24
hours
• All Alsea Mexico production plants and distribution
centers obtained their SQF (Safety Quality Food) level II
certification.
• Improved water treatment systems and ice machines in
stores.
Sustainable Account
• Zero Styrofoam, zero plastic bags
19
and single-use non-
plastic straws.
• Evaluation of new materials to replace plastic.
18 10% positive cases.
10% positive cases.
19 With the exception of the Domino’s Pizza brand (in Alsea Spain), which uses plastic bags whose
With the exception of the Domino’s Pizza brand (in Alsea Spain), which uses plastic bags whose
percentage of plastic is in accordance with the provisions of current legislation. .
percentage of plastic is in accordance with the provisions of current legislation. .
54
54
• 133 COVID-19 tests conducted
• Monitors and weekly follow-up of cases in Mexico and
in Alsea Mexico
18
consolidation of case status at a global level.
• Negotiation with hospitals to ensure care and coverage
with Major Medical Expense Insurance negotiation in Spain
with insurance companies for price reduction in private
COVID -19 tests.
• Private vaccination strategy for Alsea Mexico.
Health and well-being as a boost to productivity
• Compliance with NOM-035 in Alsea Mexico:
• Psychosocial risk prevention policy.
• Prevention and control measures.
• Communication of prevention measures to collabo-
rators.
• Training of the human resources team to keep docu-
mentary records of the evaluation and prevention and
control measures.
• Evaluation of the organizational environment.
• Follow-up and support for collaborators who have ex-
perienced traumatic events (Programa Orienta of Alsea
Europe).
Support for workers affected by COVID-19
• Creation of the Emergency Fund for operational colla-
borators from Mexico and South America in conjunction
with Starbucks International.
Culture of diversity and labor inclusion
• Progress in inclusive organizational policies, programs,
and processes at all levels of the organization.
We work to improve our environmental perfor-
mance
• Awareness in environmental performance and detection
of areas of opportunities.
• Operational discipline and changes in habits to improve
operational management (correct waste management,
promotion of the circular economy, and others).
• Progress in the measurement, analysis and establishment
of reduction goals and objectives.
• Efficient water management through the assessment of
improvement and optimization projects (for example, the
current Starbucks treatment plant for a less wasteful one).
• Promote and increase alliances with suppliers and com-
panies that seek the same goals as Alsea.
• Purchase of clean or alternative energy.
Fight hunger
• Children’s soup kitchens operations:
• Operation of existing canteens (13) and the upco-
ming opening of a new soup kitchen in Cancun.
• Study of the impact of dining room models to quan-
tify their impact and social benefits.
• “Va por Mi Cuenta” Movement: an initiative supported by
Fundación Alsea, A.C., which contributes to eradicating
food poverty through food donations, nutritional educa-
tion and food security.
• “Va por Nuestros Héroes” Movement: an initiative created
to support healthcare workers and vulnerable popula-
tions due to the pandemic.
• Creation of the Emergency Fund to exclusively support
employees who suffered a catastrophic situation derived
from COVID-19.
• At Alsea Europe, food rations have been donated to
families and health workers in times of confinement.
• Recovery and donation of food as a lever to reduce food
waste.
• At Alsea Spain, we have donated 29.5 tons of food to
the Food Bank.
• I work in nutritional education and promotion of healthy
life.
Education and employability
• Investment in education and promotion of the employa-
bility of vulnerable youth.
• We are working on our “Programa Integra” initiative to
provide opportunities and employability to young people
in vulnerable situations through alliances with educatio-
nal institutions, companies and foundations.
Culture
• Promote initiatives around culture and local develop-
ment in Alsea Mexico through:
• Promotion of Mexican gastronomy.
• Raise awareness through art.
• Project support through fiscal incentives.
• Others.
55
55
Global Report 2020 Active listening
to define
our priorities
At Alsea we create and lead a responsible
business model aligned with each of the
stakeholders with whom we interact, and
we can generate a direct or indirect impact
for them. After active listening in which we
seek to know their opinions and needs, we
transfer the expectations and requirements
of our stakeholders to our decision-making
processes.
We implement various
We implement various
mechanisms to maintain a fluid
mechanisms to maintain a fluid
and close dialogue with our
and close dialogue with our
stakeholders. This allows us to
stakeholders. This allows us to
meet the demands and build
meet the demands and build
a solid management model
a solid management model
based on the expectations and
based on the expectations and
requirements of key agents for
requirements of key agents for
our business model.
our business model.
COMMUNICATION CHANNELS
COMMUNICATION CHANNELS
COLLABORATORS
CLIENTS
SUPPLIERS
INVESTORS
Our driving force
and main asset.
• Internal Newsletters.
• Communication boards.
• Workplace.
• Intranet - Red Alsea.
• Messages from the Chief
Executive Office.
• Internal Communication
Campaigns.
• Screens.
• Comprehensive Report.
• Email and website.
Our raison d’être and
the reason to improve
ourselves every day
• Communication in restaurants.
• Fundraising Campaign.
• Social Networks.
• Medios masivos.
• Mass Media.
• Comprehensive Report.
• Email and website.
A fundamental part of the
value chain, allies to offer
the best products to our
customers.
• Letter.
• Fundraising Campaign.
• Visits.
• Comprehensive Report.
• Email and website
Promoters of the value
we generate.
• Shareholders’ Meeting.
• Earnings Call.
• Social Networks.
• Telephone Conversations.
• Comprehensive Report.
• Email and website.
• Meetings.
• Conferences.
• Investors and Analysts Day.
COMMUNITY
NGOs
MEDIA
GOVERNMENT
The social environment to which
we belong and in which we carry
out our activity.
Partners in creating a positive
impact on social needs and
concerns.
Strategic group for the
relationship and communication
with other stakeholders
Legislators from each of the
countries and locations where
we operate.
• Assessment visits.
• Participatory diagnostics.
• Work Meetings.
• Reports and control meetings.
• Comprehensive Report.
• Email and website.
• Assessment visits.
• Participatory diagnostics.
• Work Meetings.
• Reports and control meetings.
• Comprehensive Report.
• Email and website.
• Social Networks.
• Comprehensive Report.
• Email and website.
• Participation in events.
• Reports and control meetings.
• Comprehensive Report.
• Email and website.
56
5757
Global Report 2020
We have updated our study according to
the framework of our four strategic com-
missions: Responsible Consumption, Quality
of Life, Environment, and Community Deve-
lopment. We have identified 27 potentially
relevant topics based on documentary re-
views and a reference framework of globally
recognized companies, and we determined
global trends in environmental, social, and
good governance issues.
Likewise, we have prioritized the issues under
the company’s strategic perspective, mainly
through consultation with the different inter-
locutors and leading managers of the stra-
tegic and operational areas of Alsea (Mexi-
co, Europe, and South America) and through
the direct and indirect integration of stake-
holders, thus providing a comprehensive
view of critical concerns and an assessment
of the significant potential impacts related
to our activity.
Based on the results of the analysis, we pre-
sent the materiality matrix, which shows the
concerns and issues relevant to Alsea.
We have identified 27 material themes in to-
tal, under the following dimensions:
We assume a firm commitment to being
accountable to our stakeholders, promo-
ting long-term relationships of trust based
on our values and a culture of transparency
and corporate responsibility.
In addition to the communication above
channels, we highlight in this regard the com-
plaint mentioned above channels. Through
them, we intend to facilitate communica-
tion between Alsea and stakeholders that,
for one reason or another, feel concerned or
doubt about any action within the company
or that may be susceptible to breach of any
internal principle or regulation
In the framework of preparing a global re-
port, and as a reflection of our commitment
to stakeholders and the need to obtain a
framework for decision-making, we have
updated the materiality analysis. The analy-
sis above has been developed considering
the trends of the sector and the market, with
particular attention to the atypical situation
generated by COVID-19 and the importan-
ce and concerns derived from the main ac-
tivities of Alsea in each of the geographical
areas where it operates.
The global materiality study pursues the ob-
jective of promoting strategic reflection in
the company on sustainability and corpora-
te responsibility, with particular attention to
developments in the strategy and business
model and responding to new demands
from stakeholders in a context of maximum
uncertainty and change. Integrating the
stakeholders’ expectations, demands, and
concerns in Alsea’s decision-making pro-
cesses allows having higher quality and pre-
cision information to make more accurate
decisions.
RESPONSIBLE CONSUMPTION
1. Talent management
2. Equality, diversity and inclusion
3. Organizational culture and climate
4. Collaborator’s training
5. Human rights
6. Ethics and Compliance
7. Corporate Governance
8. Regulation and Policies
9. Risk management and Social Responsibility
Management
10. Communication and Transparency.
11. Stakeholder Relations
12. Business strategies
13. Brand Preferences, Value and Loyalty
14. Information Security and Data Privacy
15. Responsible Digitization
QUALITY OF LIFE AND
BUSINESS ETHICS
16. Responsible sourcing
17. Food waste
18. Customer wellness
19. Health and safety
20. Food Quality and Safety
ENVIRONMENT
21. Water
22. Energy and emissions
23. Waste and Pollution
24. Climate Strategy
COMMUNITY DEVELOPMENT
25. Community and Philanthropy
26. Culture and Social Commitment
27. Local impact of operations
l
)
s
r
e
d
o
h
e
k
a
t
S
(
I
E
V
T
C
E
P
S
R
E
P
L
A
N
R
E
T
X
E
58
59
4
21
19
5
14
16
25
22
18
2
23
1
12
20
9
24
26
11
8
10
3
15
17
6
13
27
7
INTERNAL PERSPECTIVE (Alsea Executives)
Global Report 2020
6161
3Talent and quality of life: Talent and quality of life: growing as a teamgrowing as a teamAt Alsea, our employees are the heart of the business, and for this reason, we want people to grow professionally and personally through quality employment and in a safe work envi-ronment.“”At Alsea, we understand that the best way to offer our clients a complete and quality experience in our establishments is based on a human team made up of the best talent and alig-ned with the values of the company. With the aim of transcending the work environment and being next to all the people who work every day to achieve our goals and purposes, we promote the generation of quality employ-ment with equal opportunities, ensuring the professional de-velopment and well-being of workers that make up this great team. Our
collaborators,
our best asset
The generation of quality employment in
all the geographies where we are present
has been and is our differential value as a
leading company in the sector. Alsea’s res-
taurants are the first place of work for many
young people, being their first experience
and a door to the labor market.
The Alsea family is made up of 63,8192020 employees who
The Alsea family is made up of 63,819
employees who
make up the human team in the different geographies
make up the human team in the different geographies
where we are present, with 48% of the workforce being
where we are present, with 48% of the workforce being
professional women.
professional women.
Mexico and Spain are the two countries with
the highest number of collaborators (Mexico
48% and Spain 30%), in accordance with the
volume of business in each of these regions.
However, the distribution of the workforce by
country is the following:
63,819
63,819
collaborators
collaborators
62
62
20The business units of Alsea Mexico, Alsea South America and Alsea Europe (Spain,
The business units of Alsea Mexico, Alsea South America and Alsea Europe (Spain,
Portugal, France and the Netherlands, being the most significant geographies and
Portugal, France and the Netherlands, being the most significant geographies and
those with their own establishments) have been taken into account.
those with their own establishments) have been taken into account.
63
63
Global Report 2020 Annual average of
female professionals (%)
48%
2019
47%
2020
Out of a total
of 79,647
employees
Out of a total
of 63,819
employees
Annual average of professionals by gender and region (%)
Alsea Mexico
YEAR
2020
2019
Alsea South America
2020
Alsea Europe
2019
2020
2019
WOMEN
46%
46%
54%
54%
48%
56%
MEN
54%
54%
46%
46%
52%
44%
Number of professionals by age in Alsea Mexico and Alsea South America (%)
Alsea Mexico
YEAR
2020
2019
Alsea South America
2020
2019
18-29 YEARS
30-49 YEARS
50 YEARS OR MORE
54.39%
57.22%
76.74%
78.82%
38.59%
34.55%
21.57%
19.54%
7.02%
8.23%
1.69%
1.64%
Number of professionals by age in Alsea Europe (%)
Spain and Portugal
France and Netherlands
YEAR
2020
YEAR
2020
18-29 YEARS
30-49 YEARS
50 YEARS OR MORE
57%
37%
7%
18-25 YEARS
26-35 YEARS
36 YEARS OR MORE
41%
43%
16%
From all our centers, we promote quality employment, based on respect, equality and rela-
tionships of trust and we promote permanent hiring as a structural criterion of employment
management, subject to the needs and seasonality of campaigns or other specific situations
in the sector. During 2020, 96% of our collaborators had permanent contracts.
Annual average of professionals with permanent and temporary
contracts by gender and region (%)
INDEFINITE
TEMPORARY
YEAR
WOMEN
HOMBRES
TOTAL
WOMEN
HOMBRES
TOTAL
Alsea Mexico
2020
2019
45.79%
53.89%
99.69%
45.99%
53.57%
99.55%
Alsea South America
2020
52.11%
44.41%
96.52%
2019
53.07%
44.76%
97.83%
Alsea Europe
Total Global Alsea
2020
2019
2020
2019
44.41%
45.73%
40.38%
42.77%
90.14%
83.15%
46.62%
49.36%
95.98%
45.72%
48.83%
94.55%
0.19%
0.20%
1.89%
1.11%
3.80%
7.10%
1.69%
2.34%
0.13%
0.24%
1.58%
1.06%
6.05%
9.75%
2.33%
3.11%
0.31%
0.45%
3.48%
2.17%
9.86%
16.85%
4.02%
5.45%
Annual average of professionals by type of contract (full-time or
part-time) by gender and region (%)
COMPLETO
PARCIAL
YEAR
WOMEN
MEN
TOTAL
WOMEN
MEN
TOTAL
Alsea Mexico
2020
2019
41.65%
50.09%
91.74%
42.32%
50.25%
92.57%
4.33%
3.87%
3.93%
3.56%
8.26%
7.43%
Alsea South America
2020
Alsea Europe
Total Global Alsea
2019
2020
2019
2020
2019
22.16%
21.38%
22.52%
44.68%
31.84%
23.48%
55.32%
21.47%
42.85%
32.80%
24.36%
57.15%
13.76%
14.68%
28.44%
34.46%
37.10%
71.56%
11.15%
12.58%
23.72%
36.33%
39.95%
76.28%
28.75%
33.15%
61.90%
19.56%
18.53%
38.10%
29.50%
34.10%
63.60%
18.56%
17.84%
36.40%
*The comparison is not made for 2019 since only the 2019 data is available, with the other
The comparison is not made for 2019 since only the 2019 data is available, with the other
countries being outside the scope of the 2019 Non-Financial Information Statement.
countries being outside the scope of the 2019 Non-Financial Information Statement.
64
65
Global Report 2020 channeled a group of collaborators into ma-
king an immediate transition to a job, contri-
buting to their job stability, despite being in
a trial period (with an antiquity of fewer than
three months).
Subsequently, an inter-brand transfer plan
was carried out, in which collaborators were
relocated to other brands with greater acti-
vity and that required a larger staff. During
the pandemic period, with a higher level of
restrictions and limitations to our operation
in restaurants, flexible labor schemes were
designed, allowing the conservation of a
greater number of sources of employment.
Inevitably, we had to opt for mechanisms to
regulate temporary employment and sick
leave, in a context where some shops have
had little or no activity. All were carried out
prudently and in accordance with the law
and with the utmost respect for our people.
Likewise, in the period of recovery of the eco-
nomy and of operating capacity, hiring was
reactivated, gradually reintegrating our sta-
ff. In this context, we gave priority to former
employees with the necessary skills to deve-
lop the positions to be filled.
According to the trends and forecasts of the
pandemic, it is expected that after the ad-
vance in the vaccination of the population
and its subsequent control, the reactivation
of our restaurants will take us to the levels of
hiring that we usually had.
2020 was one of the most challenging years
in our 30-year history. The sanitary and eco-
nomic crisis derived from the coronavirus
has had a significant impact at an opera-
tional and strategic level in our organization
and personnel management. At Alsea, and
committed to our collaborators and society,
we have adopted measures of flexibility and
adaptation to the context and focused on
working for a successful reactivation, which
allows us to reach pre-pandemic operatio-
nal levels once again. This has been a great
challenge for a company like Alsea, with a
geographical and cultural spread and di-
versity, and within one of the sectors that
have been most affected by the global pan-
demic.
At the most critical moment in the develop-
ment of the pandemic, Alsea defined 3 prio-
rity objectives for the company in this matter:
• Take care of the health and well-being of
employees and clients.
• Ensure the liquidity of the company to
maintain business and employment
continuity
• Recover our sales levels so that all our
people can ensure their regular income.
Attending to these three objectives, from Al-
sea, we adopt various initiatives according
to the needs of each geography and the le-
vel of activity of each country where we ope-
rate to lessen the impacts of the crisis and
protect the safety of employees. In the first
measure, hiring was frozen during the first
months of the pandemic, taking advantage
of the natural turnover of personnel in the
brands. In turn, we made partnered up with
22 companies from other industries (which
were in the process of hiring), and where we
“Cuentas con toda nuestra entrega”
Cuentas con toda nuestra entrega (You Have All Our
Cuentas con toda nuestra entrega (You Have All Our
Commitment) has been the campaign slogan Alsea designed
Commitment) has been the campaign slogan Alsea designed
in 2020, with the primary objective of protecting and caring
in 2020, with the primary objective of protecting and caring
for the safety and health of its people during the pandemic
for the safety and health of its people during the pandemic
and contributing to the communities nearby in each of the
and contributing to the communities nearby in each of the
geographies where it has a presence.
geographies where it has a presence.
We strive to be close to our people despite isolation and we have established ade-
quate communication channels and provided transparent and open information
to provide our people with a trustworthy and safe environment, through each of the
actions we carry out to deal with to the contingency for COVID-19.
This campaign, in a spirit of union and commitment to
Alsea’s values, sought to reinforce the sense of belonging
of each of our collaborators, based on 4 pillars:
Communication and
adaptability to a new
work modality under
the 100% Home Office
scheme.
1
Health and
well-being of our
employees
2
Solidarity with
the company
3
Course alignment
(where are we
going)
4
Effective
interaction with
leaders.
66
67
Global Report 2020
At Alsea, we adopt various measures for each of the territories, taking into account
the current legislation and the evolution of the pandemic in each of them, which
has led us to develop particular strategies to safeguard the operation in each re-
gion. Some of the main actions carried out were:
• To be one of the leading companies in protecting its vulnerable group from
COVID-19: at Alsea Mexico, at the beginning of the pandemic, we anticipated
the measures adopted by the Government, and we have sent collaborators
within the risk group ( older adults, pregnant women and people with chronic
diseases) to shelter at home while maintaining their salary and all benefits.
• We prioritize teleworking as a protection measure for people: 95% of the Su-
pport Center collaborators have embraced teleworking. We have reinforced the
security measures in the offices, respecting the guidelines established by the
competent authorities.
• Adaptability in our management and operation models: the days have been
redefined in stages and flexibility has been granted while preserving the safety
of the collaborators.
• Establishment of strict health and safety protocols: stablishment of hygie-
ne and sanitation measures applied 100% to safeguard integrity at all times. In
addition, in line with Alsea’s protocols to attend to health situations, those co-
llaborators who have tested positive for COVID-19 have received personalized
follow-up, complying with all medical recommendations and waiting for their
situation to progress favorably.
• Promotion of benefits: in Alsea Mexico, we have reinforced the benefits for
some collaborators, especially for those who went through extreme emergen-
cies, providing insurance for major medical expenses and support in life insu-
rance, coverage of funeral expenses for 100% of our people.
• Commitment to the preservation of employment sources: espite the drop in
sales and the temporary and permanent closure of certain stores, we require
various mechanisms to preserve Alsea’s jobs:
• Plan for the temporary transfer of collaborators to various brands with less
impact from COVID-19.
• Partnerships with 22 leading companies from other industries currently
hiring to channel employees with less than 3 months of seniority (Alsea
Mexico).
• Adoption of temporary flexibility measures, keeping more employees for a
longer time, respecting in all cases the legal frameworks and respect for
labor rights.
• Innovation in times of crisis: our Marketing, Operations and Delivery team have
developed immediate action plans, with attractive promotions and essential
benefits to preserve and retain our customers, promoting alternative sales
channels, preserving the level of activity of our company.
• Creation of “Va por Nuestro Héroes,” initiative of Alsea Mexico, supported by
Fundación Alcea, to support people affected by the coronavirus and in a state
of vulnerability, promote actions for food safety. Distribution of food rations, pre-
pared lunches, breakfasts and the donation of tons of food have been the main
initiatives. Alsea Europe has also carried out actions for food safety by donating
food and meals served to different organizations.
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69
Global Report 2020 Equality, diversity and
inclusion as the basis of
our management
At Alsea we promote values and a culture of equality,
At Alsea we promote values and a culture of equality,
diversity and labor inclusion, paying special attention
diversity and labor inclusion, paying special attention
to groups in vulnerable situations. For this purpose,
to groups in vulnerable situations. For this purpose,
we have a Diversity and Inclusion Policy that ensures
we have a Diversity and Inclusion Policy that ensures
equal opportunities for all company members.
equal opportunities for all company members.
Diversity
Diversity
and Inclusion
and Inclusion
Policy
Policy
“
It establishes the guidelines that
promote a culture of respect
for diversity, labor equality, non-
discrimination and labor inclusion
of groups in vulnerable situations
for Alsea.
”
The principle of equality and non-discrimi-
nation applies to all aspects of established
labor relations, from hiring and working con-
ditions to professional development and es-
tablished salary. Thus, our Code of Ethics in-
cludes the commitment to guarantee equal
opportunities for all people who establish a
professional or commercial relationship with
Alsea.
Our Policy includes the framework of action in which labor relations we must develop, positio-
ning diversity as an advantage that strengthens our culture and performance:
NON-
DISCRIMINATION
GUIDELINES
OF CONDUCT
LABOR
INCLUSION
Prohibiting our corporation
any distinction between our
employees based on their
gender, culture, religion, ethnic
origin, social condition, or sexual
orientation, among other factors.
Promoting a respectful and
educated conduct in the
treatment of other people
and developing a culture that
promotes dignity and respect
for all.
Support and encouragement
in the implementation of
programs that promote labor
inclusion in different sectors of
the population such as people
with disabilities, the elderly, and
people who come from situations
of vulnerability.
GENDER
EQUITY
Promotion of effective equality
between women and men
within the company with regard
to access to employment,
training, professional promotion
and working conditions,
promoting gender diversity as
a manifestation of social and
cultural reality.
FLEXIBLE
QUALITY OF
LIFE SCHEMES
We work under various flexibility
schemes in each country and
operation in order to promote
the reconciliation of work with
family and personal life, through
a better distribution of effective
working time. For example:
maternity and paternity leave,
flexible office, lactation room,
among others.
DIVERSITY IN
THE BOARD OF
DIRECTORS
This policy will be applied to
the selection of candidates for
Directors, in which the correct
selection of members will be
ensured, avoiding discrimination
of any kind.
70
71
Global Report 2020 In this sense, we promote labor flexibility
through measures so that our professionals
can reconcile their personal and work life.
• Flexible entry and exit times, as long as
the job position allows it.
• Schedules adapted to daycare for pro-
fessionals under specific and justified
circumstances.
• Professionals with children under three
years old can request not to work on
weekends and holidays.
• Possibility of transferring to a workplace
closer to home.
Along these lines, we have counted a total
of 1,387 professionals who have exercised
parental rights as of December 31, 2020: 717
professionals from Alsea Mexico, 149 from Al-
sea Chile and 521 from Alsea Europe, the lat-
ter being 47% men and 53% women.
The policy establishes the creation of a Di-
versity and Inclusion Committee, and the
creation of the Diversity and Inclusion Council
in charge of the implementation and com-
pliance of this policy at all levels of the orga-
nization. The policy establishes the creation of
a Diversity and Inclusion Committee, and the
creation of the Diversity and Inclusion Council
in charge of the implementation and com-
pliance of this policy at all levels of the orga-
nization.
As part of our commitment to the social and
labor integration of groups with disabilities,
from Alsea we promote a culture of inclusion
and diversity, integrating people with disa-
bilities into our teams. During 2020, we had
290 employees with disabilities. Likewise, to
guarantee the accessibility of people with li-
mitations and / or physical difficulties to our
facilities, our premises have the necessary
adaptations for the safety and comfort of
our workers, as well as that of our clients.
Through our policies and procedures, we im-
plement the various measures established in
our Diversity and Inclusion Policy regarding
work disconnection and aspects related to
the reconciliation of work and family life.
7272
73
Global Report 2020 We are close to
our employees
We continue to advance in the structural
strengthening of the company at all levels,
adapting to a new environment. In particu-
lar, at Alsea Europe, we are promoting the
process of integration and management
of professionals and social relations, which
will not be complete until we have a single
collective agreement. Currently, 100% of the
employees in Spain and France are covered
by a collective agreement.
We maintain a constant and close social
dialogue with the Legal Representation of
the workers through the specific committees
that protect the consultation and participa-
tion processes in all the parties involved. For
example, in Alsea Europe, through the Group
Inter-Center Committee for general ques-
tions when they exceed the powers of the
center committees. Dialogue with professio-
nals and unions is regular and fluid, always
ensuring compliance and the right to free-
dom of association and collective represen-
tation. Regarding union representation in the
different countries, 65% of our collaborators
are unionized, producing a small decrease
compared to 2019 (with 73% union represen-
tation).
We connect with
our collaborators
around the world
Similarly, global employee satisfaction and
commitment surveys are another mecha-
nism for internal dialogue and consultation.
Through the Workplace tool we strengthen
internal communication within our com-
pany. This allows us to establish fluid com-
munication with all members, be more con-
nected, create synergies, which allows us
to improve the skills of employees and en-
hance teamwork. During 2020, we began to
use this tool in Alsea Mexico and Alsea South
America. In Europe we have the Activate in-
tranet, which in 2020 achieved 70% penetra-
tion and usability.
MORE THAN
29,000
ACTIVE ACCOUNTS
Mexico, Colombia,
Argentina, Chile and
Uruguay
Remuneration consolidation.
Unified compensation systems
At Alsea we promote equal pay for the performance of work activities of equal value. Due to
this, our remuneration policy is established around a salary management based on principles
of justification, equity and non-discrimination, establishing salary reviews based on perfor-
mance.
Compensation
Compensation
process
process
2121
Hired collaborators enter with an initial remuneration,
based on their experience and the position to be filled.
Salary increases are linked to performance, market,
inflation and growth within the company.
The total remuneration is made up of:
• Unquantifiable value/emotional compensation
• Quantifiable value
1
2
3
4
Superior benefits
74
7575
21Applicable to Alsea Mexico.
Applicable to Alsea Mexico.
Global Report 2020 We connect
with the best talent
We are convinced that the growth of the company, the
We are convinced that the growth of the company, the
positioning of our brands and empathizing with our clients are
positioning of our brands and empathizing with our clients are
only possible thanks to the passion and commitment of the
only possible thanks to the passion and commitment of the
collaborators that make up the Alsea family.
collaborators that make up the Alsea family.
When we select professionals, we do not re-
quest personal or physical data, exclusively
seeking the objectivity of the process based
on the qualities demanded for the job posi-
tion. We promote a diverse and transparent
selection process, based on equal opportu-
nities and non-discrimination
At Alsea Europe, this year we highlight as a
novelty the promotion of the launch of 100%
digital employment channels for all brands,
establishing another step forward in our inter-
nal integration process of the business units of
Alsea Europe.
Our employability policy attaches high im-
portance to professional development and
internal promotion. Growth within the com-
pany is part of our culture. In addition, talent
is corporate, not being specific to each bu-
siness unit. Therefore, overarching develop-
ment is promoted by offering the alternative
in each of our brands and geographies.
In this sense, we promote the growth of our
professionals, and, for this, we focus our
efforts on monitoring our human team to
evaluate their skills. In addition, we encou-
rage their initiative by keeping the training
resources open to choose a particular trai-
ning according to their interest and promo-
te their commitment to growing within the
company.
The professional development process has
different nuances depending on the level of
the business unit to which you want to pro-
mote. In general terms, annual goals are es-
tablished, the corresponding performance
assessment is conducted, the talents are
identified, training and development pro-
cesses are conducted, and promotion is
proposed as appropriate.
In Alsea South America, 100% of the emplo-
yees of the Support Center, Starbucks Ope-
rations and Burger King Operations, have
received performance evaluations during
2020, with the exception of Starbucks Argen-
tina Operations, where 95% of the emplo-
yees have received performance evalua-
tions. Along these lines, we have improved
the measurement of the performance of our
employees by increasing the percentage of
evaluations in Chile, compared to 2019.
On the other hand, at Alsea Europe, perfor-
mance evaluations and professional de-
velopment have also been conducted. The
main reason behind the decrease in eva-
luations conducted compared to previous
years is related to the circumstances cau-
sed by the pandemic’s impact.
Performance reviews and
professional development
22
PROFESSIONAL GROUP
Group I
Group II
Group III
Group IV
MEN
528
475
-
-
WOMEN
433
469
-
-
We have conducted 1,905 performance eva-
luations, approximately 11% of our human
team. This year the described and known
circumstances have made it difficult for us
to conduct the process under normal con-
ditions; this is the main reason for the de-
crease compared to the 10,875 evaluations
in 2019.
76
7777
22Alsea Europe business units in Spain. As for the rest of the Alsea Europe countries, we have not
Alsea Europe business units in Spain. As for the rest of the Alsea Europe countries, we have not
been able to conduct evaluations or information is not available.
been able to conduct evaluations or information is not available.
Global Report 2020
Continuous training and
talent development
As a global company, in addition to the
great challenge of generating profitability
in our restaurants, we have the challenge of
managing more than 63 thousand people,
located in diverse geographies and very di-
verse cultures.
From the moment a collaborator joins our
company, we understand as essential to
instill the philosophy and values of Alsea. In
this sense, it is so important that they know
our policies, as well as that they know and
adhere to our Code of Ethics. In turn, we have
a corporate training strategy, which seeks
the complete immersion of each worker in
the company, generating a commitment
and sense of belonging to the brands and
Alsea, and promoting the development and
evolution of each job within the company.
00
44
Alsea Mexico
Alsea Mexico
Corporate
Corporate
Training
Training
Strategy
Strategy
11
33
22
0.0.
Onboarding
Alsea
We perform a very
complete immersion
of our work philosophy,
values, principles
and policies to each
collaborator who joins
our company.
1.1.
Self-
development
We promote a culture of
self-learning that allows
employees to choose
how and when to train.
2.2.
Training
Roadmap
We define learning
activities by level and
competencies. We
continually develop and
adapt courses to adjust
and respond to new
needs.
3.3.
Tools
We offer different training
options and for this, we
have allies who help us
in the design of the best
training tools.
4.4.
Gamification
We implement
a Gamification
methodology, through
credits and badges so
that each collaborator
is committed to
carrying out learning
activities that help them
in the development of
their skills.
78
7979
Global Report 2020
Alsea Europe
Alsea Europe
Corporate
Corporate
Training
Training
Strategy
Strategy
The training processes of Alsea Europe establish a plan
that is structured in three differentiated itineraries:
INITIAL
TRAINNING
CONTINIOUS
TRAINING
Compulsory training for all
professionals who join our
restaurants. It includes prior,
brand-specific and global
training in corporate culture and
policies, as well as the necessary
training on COVID-19.
Specific training in the work area,
on the product and on skills on a
regular basis to keep up to date
on the necessary skills, as well as
cross-disciplinary training.
TRAINING IN THE
ACCOMPANIMENT
PROCESS
Training offered for promotion to
different responsibility levels in
the company
We are promoters of the best continuity and for this reason we develop innovative internal
training and training programs through a wide catalog of training, courses and workshops
aimed at all our collaborators according to the needs of each position.
In this fiscal year we have some difficulties in relation to corporate training planning, adapting
to new requirements and needs.
At Alsea Europe we have reached important milestones:
• Adaptation to online training and digitization of content.
• Creation of a common training model, unifying content and itineraries.
• Establishment of a single platform for training and talent management.
Due to the situation generated by COVID-19, during this year teleworking has been promoted
in areas where the possibility exists, such as in the Support Center. For this, specific training has
been carried out in the efficient use of corporate tools for remote work.
Once the epidemiological situation got better (going from red to orange traffic light), all the
CS and store managers in Mexico were trained in a program called “Comeback” on relevant
matters, such as sanitary protocols, adaptation of the communication strategy, digital me-
nus, innovation, etc. The purpose of the training was to provide basic tools to return into nor-
mal operation conditions.
In 2020, we have given our professionals a total of 1,285,098 hours of training:
Training hours by gender and region
Alsea Mexico
Alsea South
America
23
Alsea Europe
YEAR
2020
2019
2020
2019
2020
2019
WOMEN
MEN
TOTAL
484,391
304,382
47,134
45,974
48,584
97,971
625,329
396,425
32,373
8,599
44,618
99,836
1,109,783
700,807
79,507
54,573
93,202
197,807
During this year, we gave a series of essential trainings within the framework of the adaptabili-
ty of our operations to the reality of the COVID-19 pandemic, and we strengthened our training
programs. Due to this context, the total hours of training were increased by 58.73% in Alsea
Mexico and 45.69% in Alsea South America compared to the hours taught in 2019.
Average hours of training per
person
34.18h
Alsea Mexico
8.34h
Alsea South
America
23
4.61h
Alsea Europe
20.09h
Alsea Global
80
23It does not include Colombia since training hours per employee are not available.
It does not include Colombia since training hours per employee are not available.
81
Global Report 2020 Overcoming the difficulties of an atypical
year and with uncertainty, during 2020, we
developed the following
training programs
training programs
in Mexico...
in Mexico...
The Voice of
the Manager
This program, developed in Mexico, aims
to establish direct contact with store
managers and hear first-hand what
their needs are in the operation, as well
as understand the support they expect
to receive from the support areas in
terms of management, contingency
management and food security
• 15 participants from different
brands
• 98.4% program satisfaction
Alsea
Mentorship
Mentoring program to accompany
our talents (individually or in groups)
and strengthen skills to improve their
performance and development within
our company.
• 12 Participants
• 8 Mentors
• 8 hours of mentoring per
participant
Alsea
College
It is a program that bets on self-develo-
pment through a platform that is online
and functional 24 hours a day. We pro-
mote a proactive attitude of employees
to own their training and development,
accessing training according to their
position. They have various tools for their
training at their disposal such as videos,
films, more than 300 E-learning courses,
and more than 800 lectures.
• 99% of employees accessed some
form of training
• 25,533 hours of training
• 16.5 hours average
• 23,283 courses taken in the year.
From Leader
to Leader
With the launch of Workplace, this
program migrated from a face-to-face
format to a virtual one, enhancing its
reach to all our collaborators in Mexico.
The essence of this program is to bring
the experience and best practices of our
leaders to every corner of Alsea.
• More than 35,000 visits in
Workplace
The Power
of Leadership
This program was launched in 2020, with
the aim of training and educating the
best management team in the support
center. It was taught by Tec de Monte-
rrey experts and training was provided
on topics such as managerial courage,
leadership, team building, business un-
derstanding, and risk management.
• Training for 78 support center
managers
• 1,413 hours of training.
Regional
Coach
Based on the need to have Regional
Directors who generate strategies to
increase business results, we developed
a Diploma together with Tecnológico
de Monterrey in which they developed
leadership skills and worked to improve
their management skills. In turn, emplo-
yees were challenged to implement a
business strategy in their brands, which
will be evaluated by a general manage-
ment panel.
Gerente Dueño
Come back
Due to the health contingency, we take
advantage of our Alsea College plat-
form to train more than 3,000 emplo-
yees of the management staff of all our
brands in health, marketing, sales and
profitability issues. The focus has been
placed on the one hand, on providing
training on the new sanitary protocols
and on the other hand, on training on
more efficient communication and mar-
keting strategies, digital menus, etc.
• 28 Regional Directors
• 28 360º Assessment completed
• 100% compliance in operations
management staff
Alsea College
operations
We managed to bring all our brands
together in a single space, allowing us
to manage, administer and train each
of our operations collaborators in an
approved and more efficient way. In
addition to generating savings of more
than $ 500,000 pesos annually.
• 100% implemented brands: Burger
King, Vips, Italianni’s, Chil’s, P.F.
Chan’s, Domino’s Pizza, Starbucks,
The Cheesecake Factory.
ABC
Scholarships
We are convinced that education is fun-
damental for the development and pro-
fessional growth of people. That is why
this year, we reaffirm our commitment
and continue with our ABC scholarship
program, which allowed a total of 278
employees to continue their studies at
the upper and upper secondary level
• 278 collaborators with ABC
scholarship (high school and
undergraduate)
Hours at the high school level:
30,252 hours
•
• Hours at undergraduate level:
16,380 hours
Sponsorship
Several Top Talent officers had the
opportunity to hold sessions with part-
ners and Alsea officers, strengthening
in our leaders’ executive skills for the
correct management of the business.
Leaders of
Tomorrow
We concluded the second edition of
this program where we work with our
high-potential coordinators to develop
general skills, taught by our expert lea-
ders from different areas.
• 16 Officers participated
• 37 support center coordinators
Management
Training
Program aimed at strengthening the
different leadership competencies of
our assistant directors with high support
center potential.
• 46 assistant directors
• 1,849 hours of training
“Disruptive”
induction
The emergence of new technologies
prompted us to look for tools that would
help facilitate the On-Boarding process
for our new income. For this reason, this
year we launched augmented reality
and virtual reality for the first time, where
employees learn about restaurants and
their history in a totally new and didactic
way, thus taking the first step to genera-
te more disruptive training methods.
• 83 employees trained
498 hours taught
•
In turn, we motivate our collaborators to continue and advan-
ce in their studies, for which we provide support to our collabo-
rators in this matter:
• 705 Employees benefited from Academic Excellence
• 17 Collaborators with Middle School Alsea Scholarship
• 210 Collaborators with High School Alsea Scholarship
• 68 Collaborators with College Alsea Scholarship
82
82
83
83
Global Report 2020
We promote
safe work
environments
The health and safety of all the professionals who
The health and safety of all the professionals who
comprise Alsea and all the people who have a
comprise Alsea and all the people who have a
relationship with our company have always been an
relationship with our company have always been an
aspect of vital importance. For this reason, we are
aspect of vital importance. For this reason, we are
committed to applying good practices concerning
committed to applying good practices concerning
the protection and prevention of occupational
the protection and prevention of occupational
hazards.
hazards.
This commitment has acquired greater re-
levance after the events experienced during
2020 due to the social and health crisis ge-
nerated by the coronavirus. Therefore, during
this fiscal year, we have made every effort to
guarantee the well-being of our employees
and ensure a safe working environment
throughout our value chain and facilities.
We have worked on three strategic lines to
guarantee the well-being of our workers at
all times:
Occupational
Safety
Health and
well-being
as a boost to
productivity
Initiatives to
support employees
affected by
COVID-19.
In terms of occupational safety, we created
a COVID-19 Emergency Committee, to give
an agile response to the critical situation
derived from the health crisis caused by the
coronavirus.
In this line, we have updated and reinforced
our security measures, developing diffe-
rent protocols for action and security, both
for Stores, Distribution Centers, and Support
Center, adapted to the characteristics of
each business unit, complying in all cases
with the specific regulations of each country.
The main highlighted initiatives are:
• DEVELOPING STRICT SPECIFIC HEALTH AND SAFETY PROTO-
COLS for all Alsea areas (collaborators, clients, suppliers, and others).
• STRENGTHENING COMMUNICATION AND MONITORING of the me-
asures to be implemented to guarantee the safety of people and establishments.
• APPLYING PREVENTION MEASURES capacity limit, respect for established
distances, correct use of sanitary material, frequent sanitation, among others.
• DEVELOPING ACTION PROTOCOLS AND SUPPORT measures for po-
tential positive cases of COVID-19 and / or sick relatives. .
• REINFORCING IN THE EMOTIONAL ASSISTANCE of employees and
their families. .
• CONDUCTING PRIVATE TESTS to detect possible cases of COVID-19 among
collaborators and weekly monitoring of the cases (in Alsea Mexico).
• PROMOTING VACCINATION or seasonal influenza of collaborators in Mexico.
84
8585
Global Report 2020 During this period, we have worked on the
management of close contacts due to spe-
cific cases related to the coronavirus and
thus minimize its transmission.
In addition, in more operational terms, at Al-
sea Europe, we provide 100% of our staff with
reusable UNE 0065 certified masks that we
frequently renew according to needs.
We work to promote health and well-being
as a boost to productivity in all our facilities.
For this, we have a Health and Safety Ma-
nagement System for each country, strictly
complying with the respective current legis-
lation. This system is integrated into all of our
activities and processes at all levels of the
organization. We have developed, including
references to legal requirements, following
the guidelines established in national and
international standards and scope to all
professionals, activities, and work environ-
ments.
On the other hand, we have an Occupatio-
nal Risk Prevention Policy (PRL)24, which esta-
blishes the framework, including guidelines
to achieve the objectives in terms of health
and safety in the workplace. The aforemen-
tioned policy constitutes the management
approach of Alsea Europe and the condi-
tions under which we establish the preven-
tion and monitoring actions of the associa-
ted risks.
In terms of occupational health and safety,
we work on various strategic lines, among
which are:
• Preventive training.
• Communication of improvement oppor-
tunities.
• Investigation of accidents.
• Consultation and participation of our
professionals.
• Control and update to guarantee conti-
nuous improvement of the management
system.
To assess our procedures in preventing oc-
cupational risks, control, and establish im-
provement measures, we have a system of
preventive visits. We carry out risk assess-
ments, drills, controls, and internal and exter-
nal audits. During 2020, the situation genera-
ted by the pandemic has limited the activity
in terms of preventive visits and, therefore,
there are exceptional circumstances com-
pared to other periods for a more favorable
performance of them.
In addition, internally, quality audits have
content on prevention, and therefore, they
are also established as preventive visits to
manage the risks inherent in our work acti-
vity. In 2020, we had a voluntary external au-
dit25 carried out by an entity accredited by
the Administration.
At Alsea Europe, we adopt various proce-
dures in matters of occupational health
and safety set out in the separate collective
agreements that affect the professionals of
the different business units. In addition, there
are formal committees for the representa-
tion of professionals, as well as monitoring
commissions on occupational health and
safety, where regular consultations are held.
Finally, we have strengthened the Prevention
Service.Jointly, assuming the technical disci-
plines of Occupational Safety, Industrial Hy-
giene and Ergonomics and Applied Psycho-
sociology. Likewise, we have arranged the
Health Surveillance with an external entity
accredited by the Labor Authority.
Occupational
Occupational
Risk
Risk
Prevention
Prevention
Policy
Policy
“
Strict compliance with the legislation of each
country and our internal regulations, and the
establishment of a risk management system,
achieving a high level of occupational health
and safety are the goals that represent
our commitment to the prevention of
occupational hazards.
24Application to Alsea Europe
Application to Alsea Europe
”
86
Preventive visits at Alsea Europe
Type of preventive visit
Risk assessments
Initial evaluations (openings)
Updated assessments
External Audits
Drills (internal)
26
2020
77
18
59
1
1
2019
64
13
51
0
4
87
25Application to Alsea Europe
Application to Alsea Europe
26Due to the more significant impact, only the business units of Alsea Europe in
Due to the more significant impact, only the business units of Alsea Europe in
Global Report 2020
All these actions are supported by the
completion of preventive training on occu-
pational hazards, as a tool to achieve the
established objectives and ensure the de-
velopment of options under optimal condi-
tions. In 2020, we have strengthened com-
munication and the development of strict
health and safety protocols regarding CO-
VID-19, through which we instruct on the
knowledge and skills needs required by the
situation due to the pandemic. In particular,
we have focused on training related to the
regulations and recommendations establi-
shed by each government, training in the
primary documents, and published guides
on COVID-19 prevention and procedures,
guaranteeing internal and external security
in our activities.
Despite this complicated year, we have put
all our efforts into being able to maintain the
prevention activity, adapting it to the needs
and adapting to the established restrictions.
We carry out exhaustive monitoring and
control of occupational accidents and di-
seases in order to detect their causes and
take the pertinent corrective measures.
On the other hand, we have given special
care to our professionals in situations of risk
or vulnerability and anyone who may be es-
pecially sensitive to the contagion of CO-
VID-19, following Health criteria. Hence, we
work primarily to ensure your health and we-
ll-being.
Following the guidelines and compliance
with NOM 035 regarding the prevention of
occupational accidents and illnesses cau-
sed by work, at Alsea Mexico, we conducted
surveys on the organizational environment
to a population sample of collaborators,
both for the Support Center and Operations,
to detect possible risks and detect the at-
tention to the needs and support those wor-
kers need. In Alsea Europe during 2020, the-
se surveys have not been carried out.
Regarding the results of the surveys, the
workers positively value the work environ-
ment, the organizational environment and
the leadership and relationships at work. On
the other hand, regarding the workload and
rhythm, a greater attention and demand on
the part of the workers is perceived at a cer-
tain level, such as the organization of work
time.
This year marked by the pandemic has re-
quired greater determination in the mana-
gement of labor relations and mainly in those
where the situation required precise and de-
licate management. Therefore, after the clo-
sure period that began in March due to res-
trictions, the return to work of all professionals
has been carried out with the utmost rigor in
terms of occupational health and constant
dialogue with the Workers’ Legal Counsel. Li-
kewise, our responsibility in the actions implies
going beyond the legally established require-
ments. For this reason, we have maintained
a permanent social dialogue with all parties,
especially with the trade union organizations
that make up our Workers’ Legal Counsel.
Jointly, assuming the technical disciplines
of Occupational Safety27 , ndustrial Hygiene
and Ergonomics and Applied Psychosocio-
logy. Finally, we have strengthened the Joint
Prevention Service, assuming the technical
disciplines of Occupational Safety, Industrial
Hygiene and Ergonomics, and Applied Psy-
chosociology.
At Alsea Europe (Spain and Portugal), in
addition to our commitment to assisting
groups in vulnerable situations, we promo-
ted the “Orienta” program for another year.
This social care program for employees and
members of their coexistence unit has had a
particular relevance during 2020 due to the
social emergency generated by COVID-19
and particularly during the state of alarm
stage. This service seeks to improve well-be-
ing in areas and aspects of people such as
health, the economy, education or housing.
This year it has reached 238 professionals,
increasing social needs notably compared
to 2019, where it had reached 28 people.
All the measures adopted have strengthe-
ned the safety of our people and the esta-
blishments, making Alsea a safe place for
its workers and its customers, who are gua-
ranteed enjoyment, in the context of the new
normal, in a safe and careful environment
for all people.
All the procedures described establish the
framework to comply with the requirements
established in terms of occupational health
and safety in the different collective agree-
ments that affect the professionals of the di-
fferent business units. In addition, there are
formal committees for the representation of
professionals, as well as monitoring com-
missions on occupational health and safety,
where regular consultations are held.
In addition to the specific measures wi-
thin the framework of COVID-19, we promo-
te healthy habits in our employees such as
physical exercise (daily training, yoga prac-
tice, etc.) encouraging an active and heal-
thy social life.
Regarding the Initiatives to support collabo-
rators affected by COVID-19, we promote ac-
tions to favor and take care of the well-being
of our workers. We created the Emergency
Fund for operational collaborators of Alsea
Mexico and Alsea South America in conjunc-
tion with Starbucks International, achieving
the following results:
More than
3 million
pesos allocated to emer-
gency and aid funds for
collaborators
236
collaborators
supported in 2020
88
27Service with scope to the business units of Alsea Europe in Spain.
Service with scope to the business units of Alsea Europe in Spain.
89
Global Report 2020
9191
4More quality and flexibility More quality and flexibility in the model: our in the model: our response to new response to new customer customer needsneedsWe listen to our customers, respond to their needs, and offer a guarantee of quality and choice for their meals. Our anticipation and ability to adapt has allowed us to continue providing service through different channels during 2020.“” We know
our clients’needs
Our Social Networks are our main point of contact with
consumers and through which we inform the client about
the existence of promotions with added value and the la-
test products that make a difference. In addition, the use
of social networks in this stage of the pandemic has been
essential to keep clients and other interest groups and au-
diences informed about the importance of the protocols
and the different security measures that we have imple-
mented.
9292
9393
Global Report 2020 Marketing services examine the activity in
social networks. It seeks to make available
to our customers and consumers a menu
of quality and freshness that can be easily
identified, with tasty products with an ex-
cellent value for money. Precisely, this year,
thanks to the study of customer interactions
with our publications, we have been able to
interpret a trend in demand for vegan and
organic products, and we have renewed the
quality and freshness criteria of our products
to meet the demands of our consumers.
We manage our channels of interaction with
customers daily, and in the event of comp-
laints, we have mechanisms to manage and
resolve user complaints. In the same way,
through our listening and customer and
partner service processes (customers ad-
hered to our loyalty system), we complete a
record to manage possible incidents, doubts
or suggestions.
Satisfaction and loyalty of our customers is
Satisfaction and loyalty of our customers is
a commitment of great importance in our
a commitment of great importance in our
company. We want to maintain their trust and
company. We want to maintain their trust and
offer a complete experience, so they return to
offer a complete experience, so they return to
our establishments, transforming recurrence into
our establishments, transforming recurrence into
added value.
added value.
For this reason, we undertake to respond to
the complaints sent by our clients, within a
maximum period of 7 days via telephone or
email, to resolve the claims, a period that is
reduced to 2 days in the particular case of
our partners. In the same way, and with the
main purpose of diagnosing the efficiency in
handling claims, Alsea is developing actions
related to improving the effectiveness and
efficiency of the complaints handling pro-
cess.
At Alsea we have loyalty programs for our
brands, where our partners can access pro-
motions and benefits when it comes to enjo-
ying new experiences through our products
and services. Likewise, we carry out satisfac-
tion surveys that allow us to know the degree
of satisfaction of our clients and consumers,
using the information collected to make the
corresponding improvements in our service.
At Alsea, we are aware that all these con-
tact processes with our clients, suppliers, le-
gal representatives, and even collaborators
of the organization from whom we obtain
very relevant information imply on our part
an outstanding commitment concerning
the protection of personal data. Therefore,
we make use of our Personal Data Protection
Department to offer full guarantees.
Under the preceding, we are constantly wor-
king on implementing security measures
aligned with current legislation, which adhe-
re to the principles and duties regarding the
Protection of Personal Data.
Our management approach towards the
client is based on meeting or exceeding
consumer expectations by offering a com-
plete experience in our restaurants through
the highest quality of the products and ser-
vices.
In this sense, the company’s marketing and
communication strategy aims to position
the differential value of brands and take
advantage of marketing as a driving force
behind the growth of these brands to satisfy
customer needs, generating incredible ex-
periences in restaurants.
94
9595
Global Report 2020 Innovation and
digitization as
a lever for change
At Alsea, we are aware of the current
trend towards digitization. Therefore,
keeping pace with emerging customer
demands, we integrate digital techno-
logy to provide value in interacting with
consumers.
Throughout 2020 we made progress in our digital transformation projects, and we finished
defining and building the foundations of our digitization strategy. Along these lines, this year,
we have faced more than 200 requests and requirements, which have shaped and made
more flexible our digitization strategy, mainly derived and implemented during the pandemic.
Among the most relevant digital innovation activities that we have promoted in some of the
countries where we are present, the following stand out:
• Advancement in Delivery Technology Platforms: integration of Core Alsea
in all Alsea Mexico28 brands in more than 1,100 units and with 3 aggregators
allowing expansion and a better positioning in this market.
• Digital menus for each of Alsea’s brands.
• Meal voucher.
• Christmas dinners.
• Redesign of Apps, Domino’s website, providing greater stability and se-
curity of the operations of our portals.
• Increase in payment methods, including other platforms.
• Implementation of HR Management Software (HCM) in Mexico and progress in other coun-
tries.
• Migration from My Starbucks Rewards to Starbucks Rewards, including change of techno-
logical platform.
• Mobile Order & Pay for Starbucks.
• Implementation in several brands of the food manufacturing business model exclusively
for home sales
• Implementation of the Workplace tool. .
In our desire to offer the best experience, through the
In our desire to offer the best experience, through the
corresponding tools, we analyze communication with the
corresponding tools, we analyze communication with the
client in the most personalized way possible to respond to their
client in the most personalized way possible to respond to their
specific needs and demands. In our desire to offer the best
specific needs and demands. In our desire to offer the best
experience, we analyze communication with the client in the
experience, we analyze communication with the client in the
most personalized way possible to respond to their specific
most personalized way possible to respond to their specific
needs and demands through the corresponding tools.
needs and demands through the corresponding tools.
At Alsea, we were pioneers in the implementation of digitization and digital innova-
tion tools in our operations and commercial activity. However, 2020, to a certain ex-
tent, accelerated our deployment strategy and digital advancement to adapt to the
new reality and changes in the needs and preferences of our customers.
Greater digitization and
delivery boost in 2020
• + 10% in the participation of the total sale of Alsea Mexico.
• Greater sales boost to Delivery compared to previous years.
• Implementation of Marketplace Delivery-Web for Burger King,
Chili’s, Italianni’s, P.F. Chang’s, Portón, Vips, The Cheesecake Fac-
tory and Starbucks brands.
• Implementation of the Takeout channel for Burger King, Chi-
li’s, Italianni’s, P.F. Chang’s, Portón, Vips, The Cheesecake Fac-
tory and Starbucks brands in the Delivery channels (Call Center,
Marketplace Delivery- Web, and App wow Delivery).
96
96
97
97
28Except Domino’s Pizza.
Except Domino’s Pizza.
Global Report 2020 Loyalty
Programs
Through our loyalty programs, we
Through our loyalty programs, we
create a strong
create a strong
community among
community among
our customers.
our customers.
In these communities our data protection
policy establishes the guidelines that define
the guidelines to be followed in the proces-
sing of personal data and compliance with
the legislation of each of the countries in
which we participate
Mexico
Wow Rewards
Wow Rewards is our loyalty program
with each of our brands. We offer
preferential promotions and accu-
mulation of points for consumption
to be redeemed in new visits in any
other Alsea Mexico stores. This pro-
gram allows us to obtain information
about the habits and preferences
of our customers, which allows us to
personalize and optimize the bene-
fits by encouraging consumption in
all our brands.
During 2020, we strengthened our
program, carrying out various ac-
tions, among which the following
stand out:
• Unification of millions of custo-
mer profiles under a single Data
Warehouse and a CDP.
• Integration of a new loyalty tool
(CMR) in order to promote the
evolution of all new loyalty pro-
grams. .
• Improved
digital
marketing segmentation and
analytics.
Domino’s
• Offers customization strategy
achieving:
• Cross-sell customers across
Digital Coupons
brands
• Recover lost clients
• Focus sales on open brands
during the pandemic (such
as Domino’s Pizza)
Thanks to the various initiatives and
continuous improvement in our pro-
gram, we have grown in our clients’
loyalty, reaching approximately
800 thousand unique users
800 thousand unique users
on Wow in 2020, more than
on Wow in 2020, more than
400 thousand active users,
400 thousand active users,
and more than 5 million
and more than 5 million
members in total. During
members in total. During
2020, Wow represented 5%
2020, Wow represented 5%
of our total sales in Mexico.
of our total sales in Mexico.
Our Digital Coupon strategy integra-
tes all brands, with the particularity of
freedom in the choice of promotions
according to the requirements and
needs of each customer target. The
success of this program is based on
a rapid expansion, due to the increa-
se in the use of technology, which
allows it to reach a greater number
of users. At the end of the year, we
reached
more than 4 million
coupons generated and
more than 200 million sales
through the digital coupon
system.
Starbucks Rewards
OLO (On Line Ordering) Domino´s
Another of our loyalty programs is
aimed at our Starbucks customers,
who accumulate stars and recei-
ve benefits according to their pro-
file. During 2020, we have obtained
a good performance from this pro-
gram, reaching
more than 10 million pesos
in APP Orders and more
than one billion in sales.
Thanks to Domino’s online ordering,
this business area has grown by more
than 32% compared to 2019, with more
than 2 billion annual sales. Through
this modality, we have
exceeded 24 thousand daily
orders, more than 171 thou-
sand weekly orders and more
than 744 thousand monthly
orders.
The excellent numbers support tech-
nological growth and the need for a
solid strategy of technological innova-
tion such as the one Alsea is working
on.
98
9999
Global Report 2020
In our desire to offer the best expe-
rience, we analyze communication
with the client in the most personali-
zed way possible to respond to their
specific needs and demands through
the corresponding tools.
We currently have 4.9 million
contactable customers at
Alsea Europe.
SPAIN AND
PORTUGAL
At Alsea Europe, we have loyalty
programs for our brands, where our
partners can access promotions and
benefits when it comes to enjoying
our experiences through our pro-
ducts and services.
Applications such as Club Vips or Fos-
terianos are an example of the effecti-
veness of these measures. With them,
the client will be able to improve their
in our establishments
experience
through, for example, tools such as Pay
& Go and other integrations that will
allow us to optimize our processes and
increase our presence in the markets.
In addition, without defining itself as
a loyalty program but with an equa-
lly close management with the client,
we have our CRM interaction for Do-
mino’s Pizza. In our desire to offer the
best experience, through the corres-
ponding tools, we analyze communi-
cation with the client in the most per-
sonalized way possible to respond to
their specific needs and demands.
We develop a
responsible and safe
offer for everyone
In all of our brands, we work to
In all of our brands, we work to
promote a balanced lifestyle
promote a balanced lifestyle
integrating the pleasure of
integrating the pleasure of
quality food and a healthy
quality food and a healthy
coexistence in combination
coexistence in combination
with healthy habits.
with healthy habits.
We continue with our commitment to pro-
mote responsible consumption by integra-
ting captions in our menus, offering con-
sumption alternatives to our customers. This
information helps consumers to make the
best consumer choice according to their li-
festyle.
All our brands have a common principle and
priority objective to establish and maintain a
food safety system, guaranteeing food safety
and offering the best health and safety condi-
tions to consumers. Our Food Quality and Sa-
fety Policy, which covers both the operations
of brands dedicated to catering and industrial
manufacturing, including professionals, fran-
chisees, and suppliers, establish the commit-
ments acquired by all business units.
Through our HACCP system (Hazard Analy-
sis and Critical Control Points), we reflect the
procedures and controls based on quality
requirements to control and guarantee the
safety and quality of food products at all
stages and carry out daily activities in res-
taurants and facilities. During 2020, 87% of
Alsea Mexico stores were approved under
the ICA standard, 2% more than in 2019.
Together, our professionals, within their com-
mitment, must promote prevention and safe-
ty actions in the area of food quality. To boost
their training, all employees have access to
manuals and training courses related to the
policy and procedures. In this line, we have a
training plan, which covers four main axes:
NOM-251, Ica Standard, Critical factors, and
pest control.
We assume the commitment to the highest
standards and sanitary and hygiene proto-
cols to take care of our clients and emplo-
yees:
• Improvement and strict compliance in
cleaning measures
• Sanitary filters for all employees and
customers
100
101
101
Global Report 2020 • Use of face masks and face shields by
employees
• Preventive daily disinfection in all regions
In Alsea Mexico, during 2020, safety comp-
laints received from consumers have de-
creased by 29% compared to 2019, going
from 500 (in 2019) to 358 (in 2020).
Despite the decrease in verification needs
compared to 2019, derived from the atypi-
cal year motivated by the coronavirus crisis
that has led to the closure of the activity and
the subsequent opening under certain res-
trictions, we have carried out 1,976 audits in
Alsea Europe.
We work every day with the firm commit-
ment to provide an inclusive offer incorpo-
rating healthier alternatives based on the di-
versity of needs of our consumers. Our goal
is to help our consumers make informed
decisions and combine the demands of our
customers with the possibilities of the gas-
tronomic development of our brands.
We promote a balanced lifestyle integra-
ting the pleasure of quality food and exce-
llent fast-food service. To incorporate new
products under the guidelines above, we
develop innovative processes where new in-
gredients focused on offering a nutritionally
more balanced diet prevails.
Evaluation of the
experience of our
clients
To measure the satisfaction of our clients, we evaluate the experience in the various services
and areas of our activities:
Store
experience
+
Home
experience
+
Starbucks
experience
Our clients can provide the information through two means; anonymous surveys (such as
tickets, stickers, account holders) or via email (WOW, OLO, MSR) based on the last transaction
sent on a due date.
Since 2019, we have evolved the way of measuring customer experience, centralizing assess-
ment for all brands in Alsea Mexico and Alsea South America into a single channel and surve-
ying in real-time, either through tickets, the Domino’s app or email, to make transactions with
WOW Rewards and Starbucks Rewards. At Alsea Europe, the channel to survey our clients is
carried out through Club VIPS and Fosterianos.
Our customer experience evaluation tool allows us to compare brands under the same me-
thodology and adapt them to the brand’s needs. Through the continuous improvement of the
tool, the agility in the resolution of incidents, our main objective is to reduce the% of customers
with incidents and solve a high percentage of them.
According to the results of the Voice of the Customer in Alsea Mexico, the percentage of custo-
mer incidents has remained constant compared to 2019, derived from the exceptional nature of
the year. However, general satisfaction has improved notably, increasing by 54.86% compared
to 2019.
102
103103
Global Report 2020 Starbucks has a methodology for assessing
its customers through DPI. According to the
sample taken to analyze the customer ex-
perience, the results obtained have been:
• Improvement in the connection of colla-
borators: such as measuring the effort
that employees make to know their cus-
tomers honestly. The connection has
consistently improved in the 3 markets
(Mexico, Argentina and Chile), with Mexi-
co being the country with the highest
points.
• In Chile, the highest valuation has been
registered in terms of operational perfor-
mance.
Regarding the percentage of
incidents,
a greater number is registered in Mexico,
which is related to the size and volume of
operations compared to other South Ame-
rican countries.
In this line, we have a Customer Service
Contact Center, which allows us to con-
tact them through various tools such as te-
lephone, e-mail, social networks, and others.
Mainly, we collect the metrics of percentage
of abandonment, the level of service (time
in calls) and the percentage of closure of
complaints.
CUSTOMER SERVICE
CUSTOMER SERVICE
1
Identify
complaint
2
Send alert
to brand or
manager
3
Give personalized
customer
follow-up for each
brand
4
Close
complaint
from
operations
% OF INCIDENTS
% OF INCIDENTS
29
11.5
10.5
10.5
9.3
6.8
5.5
5.3
4.6
7.4
6.6
5.5
5.9
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
MEXICO
ARGENTINA
CHILE
29The Starbucks scale is 7 points. Base according to total country.
The Starbucks scale is 7 points. Base according to total country.
104
105105
Global Report 2020 As in other operational facets of the com-
pany, due to the social and health crisis
this year, the external contact center servi-
ce was completely suspended as of March
2020, and internal resources were reduced
to adapt to the new situation. Due to this res-
tructuring, the responsibility of responding
to incidents and suggestions made by our
clients and partners has fallen solely on the
internal team, who have dealt with it suc-
cessfully.
Mexico is one of the geographies that con-
centrates the highest volume of business,
so the number of incidents is usually higher
than in the rest of the geographies where we
have operations. In 2020, a total of 138,170 in-
cidents were received with 94% resolution of
them. At Alsea Europe, the incidents genera-
ted were 100% resolved. In addition, the diffe-
rent brands in that region have received 934
congratulations from our customers.
The decrease in the volume of incidents
compared to 2019 is explained by the tem-
porary and extraordinary closure of the ac-
tivity and later, by the maintenance of cer-
tain restrictions derived from COVID-19 that
had an impact on the traffic of our establi-
shments (capacity limitations, restrictions
hours, restrictions on available services, and
others).
Communications regarding
support and support for inquiries/
claims from Alsea Europe partners
Responsible service
Contact Center
30
(Low criticality level)
2020
7,722
Internal team
(Medium/high criticality level)
15,338
In 2020, at Alsea Mexico, we reinforced our comprehensive security actions in which the fo-
llowing relevant issues have been managed:
• Registration of 1,400 collabo-
rators who access the emergency
platform installed on their mobile App
equipment through which in case of
emergency they are geolocated at the
point where they require it as long as it
corresponds to an emergency.
• Attention to more than 4 thou-
sand calls from collaborators
for COVID -19 issues (confirmed,
suspected, and discarded), applying the
corresponding protocol for their atten-
tion.
• Preparation of the Business
the
Continuity Plan (BCP) under
context of the COVID-19 pandemic.
• Monitoring of 1,631 business
units also through our strategic secu-
rity partners and attending to emergen-
cies generated during the operation.
• Attention to more than 19 thou-
sand alerts per system related to
technical incidents, panic buttons, emer-
gency attention (medical, police, civil
protection, and others).
• Attention of 4,261 calls to the
CAEA related to emergency situations
(robberies, medical emergencies, suspi-
cious persons or alternating the order of
the store, and others).
• Security protocols and moni-
toring of each by our collaborating
teams.
• 4,513
technical assistance
calls carried out day by day to keep
the business units monitored (alarm and
video surveillance system). .
30Data available from January 1 to March 20, 2020.
Data available from January 1 to March 20, 2020.
106
107107
Global Report 2020 109109
5Capacity and Capacity and sustainability: the pillars sustainability: the pillars that cement the future of that cement the future of our operationour operation A supply chain
committed to
sustainability
We assume a comprehensive commitment
to sustainability throughout our value chain,
protecting the environment through conti-
nuous improvement of our processes and
activities.
We are advancing in a more sustainable
value chain, promoting initiatives in energy
efficiency, the fight against climate change,
efficient consumption of resources, and the
proper management of water and waste.
We take care of the environment
We take care of the environment
through the efficient use of
through the efficient use of
the resources and materials
the resources and materials
necessary for the development of
necessary for the development of
our activity.
our activity.
Our supply chain’s careful management and
coordination are essential to provide quali-
ty products and services that our customers
value. In this sense, our Code of Ethics and
the Global Purchasing Policy establish the
framework for action and compliance with
our ethical principles and corporate proce-
dures to prevent and mitigate the associa-
ted risks.
Alsea’s suppliers are an essential part of
the value chain, and, therefore, we promo-
te solid alliances and relationships based on
transparency and mutual trust, involving our
suppliers in sustainable management
We promote a responsible supply chain
through our management in Mexico and
external management in South America,
working together on the optimization and
sustainability of our supply chain. We have
a support area that acts as the organizing
core of our processes. The area is in charge
of supplier selections, raw materials and es-
sential foods reception, storage, manufac-
turing, order assortment, shipping proces-
ses, and distribution of our product.
Our supply chain is divided into 6 processes that operate synchronously with the
common goal of bringing all the necessary supplies to each store, in a timely manner,
in order to meet and exceed the expectations of our customers:
Purchasing
Selection and development of supply sources and
supplier approval program.
Foreign
trade
Ensures that Alsea’s export
and import operations strictly
comply with the regulations of
each country.
Planning and
supply
Organize the phases of
the chain guaranteeing its
effectiveness.
SUPPLY
SUPPLY
CHAIN
CHAIN
PROCESSES
PROCESSES
Manufacturing
We make our own
products (pizza dough,
pastries, and others
Human Resour-
ces, Finance and
Technology
Provide full-time support
and attention to the four
distribution centers.
Distribution
and logistics
Receives, supplies and
transports the orders of the
brands.
Quality
Protect the health of our
customers and the image of
value of the Alsea brands.
OUR SUPPLY CHAIN’S STRATEGIC PILLARS
OUR SUPPLY CHAIN’S STRATEGIC PILLARS
To be the best Food
Service logistics
operator in Mexico
Have a highly
professional, upright
and committed
team
Exceeding the
expectations of
our clients and
investors
Taking care of the
environment and
quality of life of our
collaborators
110
111
Global Report 2020
Planning and
supply
Given the uncertainty in demand, a great
deal of collaboration has been carried out
between the Supply Chain and our Brands,
making demand forecasts and managing
inventories, maintaining levels in line with the
operation and eliminating potential losses in
the brands.
Likewise, work has continued on the SKU re-
duction strategy, achieving a 23% decrease
in active code catalogs.
We improved our ser-
vice level reaching
99.3%
in delivery
efficiency,
2 percentage points above
2019 and a 63% decrease in
complaints from stores and
restaurants.
We had a
reduction
in inventory
losses and
differences
by 42%
compared to 2019.
The route
optimization
program was
executed
achieving an
efficiency of
37% vs 2019.
The accumulated
turnover was 39.2%
having an improvement of 5.3% compared to the
previous year. The training program on issues of
Quality and Industrial Safety was implemented, as
well as the Certification Program aimed at improving
theoretical-practical skills by developing expert
operational collaborators.
We increased
sales of products to
third parties by
44% vs. 2019 with a total of
$46.8 million
112
Responsible purchasing
and sourcing
Alsea’s Global Purchasing Policy provides
the framework for action and the principles
upon which we must develop the company’s
commercial relations. This policy pursues the
objective of guaranteeing the best market
conditions and strict compliance and align-
ment with our corporate values.
In turn, the policy states that all purchasing
management must be based on respect for
people and social values. In addition, the re-
lationships established must be based on
professionalism and mutual benefit, pro-
moting adequate competitiveness in equal
opportunities. Likewise, these relationships
will be subject to compliance with the Code
of Ethics, including social, labor, and environ-
mental criteria.
We assess all suppliers in terms of health
and food safety to establish strict complian-
ce standards regarding the quality of our
products and services.
Global
Global
Purchasing
Purchasing
Policy
of commercial relations. These must always respond
and be aligned with Alsea’s ethical principles,
compliance systems and its responsible way of
acting.
Policy “ It establishes the principles that support the aspects
”
113
Global Report 2020
Supplier Approval
Procedure
Supplier Audit
Procedure
Our Food Safety and Quality Supplier Appro-
val Procedure establishes the system for
evaluating, approving and monitoring po-
tential suppliers. The procedure reaches out
to food suppliers, but also to service provi-
ders that influence product quality and food
safety. In the specific case of franchisees,
in addition to the criteria established in this
procedure, they must also apply commer-
cial and brand protection criteria.
The approval process differentiates the su-
ppliers of reputed and prestigious brands in
the market. In this case, the suppliers must
comply with a series of elements such as:
having a quality assurance system certified
by any system recognized by the GFSI (Glo-
bal Food Safety Initiative). As well as having
a distribution system and compliance with
applicable local legislation.
For those potential suppliers that are in the
process of obtaining the certification of their
quality assurance system, there is the pos-
sibility of granting a conditional approval
as long as during the process of obtaining
their certification, they comply at least with
good manufacturing practices and have an
APCCC system (Analysis of Critical Control
Points), certified by a third party.
At Alsea, we encourage, through our internal
audits, that all our suppliers become certi-
fied in a scheme recognized by the Global
Food Safety Initiative (GFSI), aimed at ensu-
ring throughout the chain supply food sa-
fety. This allows us to guarantee the quality,
traceability and origin of raw materials and
to ensure compliance with our Quality and
Food Safety Policy.
To strengthen compliance with the requi-
rements established in terms of health and
food safety, we carry out audits to approved
suppliers to ensure a quality management
system in their facilities and processes.
In 2020, due to the pandemic, our supplier
activities focused on auditing the most cri-
tical or new ones and closely monitoring the
performance of current suppliers to avoid
food safety and quality incidents.
The Global Purchasing Policy, the homologa-
tion and audit procedures, together with co-
rrect identification and management of ris-
ks, outline our supplier management model
and allow us to extend our health and safety
commitments to the entire supply chain.
During 2020 and derived from the health
contingency, we focused on cost contain-
ment, obtaining. As a result, inflation in the
Price List of 1.24% below the INPC of Food and
Non-Alcoholic Beverages of Mexico.
In addition, in this area, we conducted es-
sential revisions to brand service contracts.
We negotiated prices and payment terms,
which allowed us to obtain cash flow and
working capital benefits.
To reduce the uncertainty associated with
purchasing management, we designed a
specific matrix for possible risks in the pur-
chasing process, included in our risk mana-
gement system. This matrix establishes our
framework and approach to assess and
control the risks identified at the operational,
reputational, and compliance levels..
From the purchasing area we take care of
the search, communication and negotiation
of purchasing conditions with suppliers. On
the other hand, we assume the responsibility
of carrying out the corresponding approval
and auditing processes from the Quality De-
partment.
Materias primas y principales
proveedores
Alsea Mexico has 3,976 suppliers and an
item of expenditure on suppliers of more
than 13 billion pesos, of which 98% of the su-
ppliers are Mexican31 and 2% international. In
turn, 12% are food providers, the main raw
materials being (Mozzarella cheese, Peppe-
roni, Pizza sauce, flour, coffee and consuma-
bles, hamburger meat, ribs and sausages
and cuts, pastries and sandwiches, among
others) and the remaining 88% to suppliers
of other types of goods (inputs such as co-
rrugated box) and the contracting of servi-
ces, marketing, investment or others. On the
other hand, in Spain, we have a total of 993
suppliers and an expenditure of more than
7 billion pesos, of which 96% are of national32
origin and 4% international.
2020 Alsea Suppliers 2020
2020
SUPPLIERS
33
NATIONAL
SUPPLIERS
INTERNATIONAL
SUPPLIERS
Mexico
98.00%
2.00%
Chile
93.00%
7.00%
Argentina
Uruguay
88.20%
11.80%
Spain
96.00%
4.00%
114
31Suppliers headquartered in Mexico
Suppliers headquartered in Mexico
32Suppliers headquartered in Spain that provide service to their own units.
Suppliers headquartered in Spain that provide service to their own units.
33Total purchases (productive, non-productive, services and assets). For Colombia, the
Total purchases (productive, non-productive, services and assets). For Colombia, the
number of suppliers is available: 271 national suppliers and 12 international suppliers.
number of suppliers is available: 271 national suppliers and 12 international suppliers.
115
Global Report 2020 gerated (multi-temperature) to supply all
brands, focusing on fast food, cafes, and
casual dining. In turn, it has a new Product
Development Area that, in collaboration with
brands, is in charge of developing projects
that satisfy consumer needs and promote
the consumption of raw materials and local
suppliers.
In the case of Mexico, we have a vehicle
maintenance area in each of the distribution
centers that serve 215 units nationwide, with
an average of 750 services per month and
that mainly serves preventive and corrective
maintenance, repair, cleaning, and sanita-
tion services necessary for each case.
We have promoted initiatives in terms of dis-
tribution, including a route reduction program.
We managed to reduce 37% and have a 24%
decrease in the kilometers traveled and di-
rectly impact reducing pollutant emissions by
CO2 of the 24.2% all vs. 2019.
We have 10 distribution centers in strategic
areas to supply and distribute products to
our stores located in Mexico (State of Mexico,
Monterrey, Hermosillo, Cancun and Tláhuac),
Colombia (Bogotá and Cali) and in the rest
of Latin America in Argentina, Chile and Uru-
guay.
Alsea Europe has a centralized purchasing
management for all the geographies where
it operates, and the supply chain manage-
ment is carried out by two logistics opera-
tors. In general, the operator carries out an
integral34 management from the purchase
of the merchandise to the distribution in the
centers, assuming responsibility for the pro-
cess and merchandise. Alsea Europe veri-
fies that the process is carried out under the
specifications demanded, and also acts as
a link between the operators and the centers
and departments to provide an efficient so-
lution to incidents and changes.
Alsea Operations
Centers
The Alsea Operations Center (COA) integra-
tes storage, distribution and manufacturing
services in one place, in order to optimize
the operation of our restaurants and main-
tain quality and profitability. Improving ope-
rational capacity and efficiency is the main
objective, such as mitigating the impacts of
new import tariffs on key products such as
cheese, pepperoni, potatoes and prepared
foods, working on inventory reduction and
efficiency in the production chain for su-
ppliers.
DISTRIBUTION IN MEXICO
DISTRIBUTION IN MEXICO
(weekly basis)
(weekly basis)
247
Cities
2,008
Selling points
295
Routes per week
590,685
Boxes delivered
per week
3,427
Deliveries per
week
More than
11,3 million
kilometers traveled
during 2020
117
Strategic logistics and
distribution
Through DIA (Distribuidora e Importado-
ra Alsea), in Mexico, the supply chain of the
brands and establishments where it ope-
rates is optimized and efficiently managed,
focusing its efforts on improving customer
service.
DIA’s objective is to become a competiti-
ve advantage for brands, ensuring supply
at the best cost in the industry, based on a
production and logistics model of maximum
efficiency and operational capacity, adap-
ted to the specific needs of each market.
DIA specializes in the purchase, import, pro-
duction, storage, and distribution at the
national level of food and non-perishable
items, in the modalities of dry, frozen, refri-
34The comprehensive management model is applied to all of Alsea Europe’s business
The comprehensive management model is applied to all of Alsea Europe’s business
units, except in France, where purchasing and supply are carried out, delegating storage
units, except in France, where purchasing and supply are carried out, delegating storage
and distribution management to the different centers to the logistics operator.
and distribution management to the different centers to the logistics operator.
116
Global Report 2020 Manufacturing
This year, this sector focused its efforts on optimizing
operating resources, ensuring compliance with produc-
tion programs, taking this indicator from 95% to 99.6% to
guarantee the existence of products for the stores. In ad-
dition, we developed projects to improve the efficiency
of the production lines, implementing best practices and
standardizing execution criteria and KPIs standardization.
Quality
During 2020, 4 of our 5 Distribution Centers in Mexico
obtained the SQF35 (Safe Quality Food), Level II certifica-
tion, which confirmed that our Alsea Safety and Quality
Management System (ICA) complies with international
standards of food safety for manufacturing and distribu-
tion operations, thus offering security for our customers
and consumers, in the management of quality and safe-
ty in each link of the value chain.
Domino’s International acknowledged us as the Latin
American Operation with the best food safety and qua-
lity management system. Also, Walmart re-certified us,
endorsing us as a supplier that meets its quality, safety,
and social responsibility standards.
Regarding the performance indicators in terms of qua-
lity and safety, this year, we improved the performance
of our suppliers, manufacturing, and distribution opera-
tions, reducing quality complaints by 40% compared to
2019 and 29% in complaints from our customers.
Human Resources
At Alsea Mexico, we invest in the development of our em-
ployees through training programs on Quality and Indus-
trial Safety for operational employees.
Likewise, we developed the Operational Certification
Program to improve theoretical and practical skills to
achieve expert operational collaborators, ensuring the
standardization and mastery of processes, specializing
124 Manufacturing collaborators through 9,812 hours of
training.
Security
At Alsea Mexico, this year we achieved a 40% reduction
in the number of disabling accidents in our operations,
going from 26 accidents in 2019 to 16 accidents in 2020.
We work on the training and dissemination of the De-
tónate program to involve all collaborators in the iden-
tification of unsafe acts and conditions, reporting their
identification through cards for follow-up and closure.
We also develop safety guidelines for each of the opera-
tional areas where we identify the key behaviors on sa-
fety issues within each operation.
118
35It is a Food Safety Management System designed to provide organizations with a
It is a Food Safety Management System designed to provide organizations with a
rigorous system to manage food safety risks, and at the same time provide product and
rigorous system to manage food safety risks, and at the same time provide product and
consumer safety with a recognized food safety certification.
consumer safety with a recognized food safety certification.
119
Global Report 2020 Managing our
impact on the
environment
We act responsibly in favor of the environ-
ment, protecting our surroundings and ope-
rating under high sustainability standards..
We manage resources efficiently and inno-
vatively in order to minimize our impacts. In
addition, we are involved in areas such as
resource efficiency, the fight against climate
change, the circular economy.
We promote the rational and
We promote the rational and
responsible use of natural
responsible use of natural
resources, the optimization of our
resources, the optimization of our
processes and the minimization
processes and the minimization
of their associated risks. Aware
of their associated risks. Aware
that there is still work to be done,
that there is still work to be done,
we make advances in priority
we make advances in priority
areas and adopt innovative
areas and adopt innovative
initiatives, moving towards
initiatives, moving towards
sustainability.
sustainability.
We work every day in our management to
make the processes more demanding and
conducive to making better use of resour-
ces, establishing measures to mitigate our
impacts, and working on initiatives that con-
tribute to strengthening the responsible ma-
nagement of our value chain.
In each of its four committees, our Sustaina-
bility philosophy promotes actions and initia-
tives that allow us to impact the communi-
ties where we are present positively. Likewise,
through our Code of Ethics, we assume res-
ponsibility for the environment, committing
ourselves to taking care of natural resources
and promoting their rational use.
On the other hand, we have a Global Envi-
ronmental Policy that determines the priority
activities to prevent, mitigate and efficient-
ly control the environmental impacts of our
activity.
To this end, we determine guidelines for es-
tablishing goals, guaranteeing compliance,
and establishing continuous improvement
mechanisms to formalize a comprehensive
system for environmental management.
“
The environmental management
and action procedures included in
the Global Environmental Policy are
aligned with the ISO 14001 standard
for environmental management
systems.
Global
Global
Environmental
Environmental
Policy
Policy
”
Our environmental strategy and this policy
are mainly structured around three lines of
action:
1
2
3
Efficient energy
consumption
and reduction of
greenhouse gas
emissions.
Waste
reduction.
Efficient
water
consumption.
120
121
Global Report 2020 Energy efficiency and the fight
against climate change
Our commitment to climate change means we adopt
Our commitment to climate change means we adopt
measures concerning energy efficiency in our facilities to
measures concerning energy efficiency in our facilities to
optimize our energy consumption and decarbonize
optimize our energy consumption and decarbonize
our activities.
our activities.
Given our activity in restaurants and the use of vehicles, electricity and fuel con-
sumption is the main impact identified. Due to this, we adopt energy saving measu-
res related to lighting and air conditioning in our facilities.
In this matter, we establish specific objectives for reducing and optimizing con-
sumption, which are updated based on the evolution and continuous improvement
of our performance. On the other hand, we implement technological solutions to
improve energy efficiency and reduce our GHG (Greenhouse Gas) emissions. Finally,
we promote reduction and efficient use of energy resources with all our collabora-
tors, their commitment to responsible and efficient consumption being essential.
During 2020, the main measures adopted in Alsea Mexico include:
• LED Lighting
• Installation of control and automation equipment in Vips stores.
• Purchase and priority to the use of clean energy.
• Videos to change habits and awareness.
• Start of placement of water treatment plants.
Likewise, in Alsea South America, energy saving and automation strategies, rational
use of water and waste separation are being implemented. In Chile, particularly, the
LEED36 certification of its stores is being promoted.
36LEED (Leadership in Energy and Environmental Design) is a certification program with
LEED (Leadership in Energy and Environmental Design) is a certification program with
international recognition for green buildings created by the Council of Green Building of
international recognition for green buildings created by the Council of Green Building of
the United States (U.S. Green Building Council).
the United States (U.S. Green Building Council).
122
On the other hand, the main measures im-
plemented in Alsea Europe were:
• LED lighting installation.
• Variable frequency drives in extractor
hoods.
• Regulators for room lighting.
• Lighting detectors.
• Installation of an efficient enthalpy recu-
perator marked by RITE for premises with
capacity greater than 62 people.
• Low consumption EC type projected fans
for RITE compliance.
• Installation of solar panels in premises
where specified by the corresponding
town hall.
Due to our activity, acting on the impact of
electricity consumption is important to im-
prove our environmental performance. Al-
sea’s electricity consumption in 2020 was
388,589,233 Kwh, 22% lower than in 2019. The
decrease compared to 2019 was mainly due
to periods where no activity or restrictions
have significantly reduced this.
Electricity consumption (kWh)
37
2020
2019
Alsea Mexico
219,220,762
292,889,551
Alsea South America
52,321,649
56,639,151
Alsea Europe
117,046,821
146,964,839
TOTAL
388,589,233
496,493,541
-22%
37Consumption belonging to Alsea’s own establishments.
Consumption belonging to Alsea’s own establishments.
123123
Global Report 2020 In the three geographies (Alsea Mexico, Al-
sea South America and Alsea Europe), there
is evidence of a 33.64% global decrease in
energy consumption. The decrease in na-
tural gas responds to the closure of establi-
shments caused by the restrictions derived
from the COVID-19 pandemic. On the other
hand, the increase in gasoline and diesel
consumption is motivated by the growth of
our automobile fleet and the exponential
growth of our delivery service throughout the
company.
The main impact identified in terms of
greenhouse gas emissions comes from the
electricity and fuel consumption carried out
in the development of the activity. Through
our various energy efficiency and energy
consumption reduction initiatives, we seek
to reduce our carbon footprint.
Contributing to the decarbonization of eco-
nomies, we have increased the clean energy
purchase mix for Alsea Mexico (wind energy,
cogeneration, or hydro), going from 45.24%
in 2019 to 62.37% in 2020. Part of the electricity
consumption comes from renewable sour-
ces, with 31% standing out in Mexico and 11%
in Chile.
Likewise, in Spain we have 502 electric scoo-
ters with the aim of offering our own more
sustainable delivery service. Electric motor-
cycles represent 14% of the total number of
mopeds belonging to our business units in
this territory.
Fuel consumption (kWh)
38
2020
2019
Alsea Mexico
221,742,788
346,686,936
Alsea South America
26,002,487
34,264,216
Alsea Europe
53,877,915
73,597,063
TOTAL
301,623,190
454,548,215
-33.64%
Greenhouse Gas Emissions (Tn CO2 eq.)
2020
2019
Scope 1. Direct emissions
64,584
98,302
Scope 2. Indirect emissions
106,269
156,028
Scope 3: Indirect emissions
39
-
-
TOTAL
170,853
254,330
-32.82%
Advancing in our management, we promote
the development of various waste reduction
initiatives. In particular, we have promoted
initiatives to reduce and decrease the use
of single-use plastic in Alsea Mexico, among
which the following stand out:
• We eliminated the use of plastic straws
and Styrofoam in all our brands.
• We switched from plastic bags to paper
bags for consumers.
• We are in the process of changing the
rest of the plastic packaging for biode-
gradable and/or compostable packa-
ging.
On the other hand, the main initiatives pro-
moted in Alsea Europe stand out:
• Promotion of the consumption of recy-
cled paper with FSC certification.
• Elimination of plastic straws.
• Single-use plastic packaging project.
We responsibly manage hazardous and
non-hazardous waste caused by our activi-
ty. At Alsea Mexico, only 0.10% of non-hazar-
dous waste is generated out of total waste.
Regarding non-hazardous waste, approxi-
mately 85% goes to recycling, reuse, reco-
very, or composting, and only 15% goes to
“other” and/or landfill.
Sustainable resource
management and circular
economy
The resources and materials identified as
relevant for the development of the activi-
ty are the use of water, plastics, paper and
cardboard. Although we have measures for
its correct management and efficiency in its
use, we continue working on the implemen-
tation of a more complete and formal me-
asurement model. Continuous improvement
in the introduction of more effective measu-
res to control the use of resources has the
fundamental goal of reducing our environ-
mental footprint.
Reduction of waste and
inputs
We promote and participate in the proper
management of waste through recycling
and proper separation, trying to avoid heal-
th problems, pollution, getting involved in
the life stages of the product and working to
minimize its impact on the environment. For
this reason, at Alsea we use an increasing
number of recycled products.
Through our brands, we continue to promote
the commitment acquired with the efficient
use of materials and proper waste manage-
ment. In this regard, our main actions related
to the use of raw materials are related to the
management of containers, bags and nap-
kins, the main materials being plastic, paper
and cardboard.
124
38The unit conversion factors for energy consumption in 2019 have
The unit conversion factors for energy consumption in 2019 have
been updated.
been updated.
39As of December 31, 2020, scope 3 measurements are not carried
As of December 31, 2020, scope 3 measurements are not carried
out..out..
125125
Global Report 2020 37.8%
Recovery
0.3%
Compost
14.8%
Others
0.6%
Dump
Non-
hazardous
waste
management
7.7%
Reuse
38.8%
Recycle
We are improving waste separation throu-
gh various initiatives and actions such as
identifying the type of waste, measuring it,
defining a strategy, and communicating it.
Likewise, it was planned to start with a pilot
test of waste separation in Portal San Ángel
(Offices and Stores), but it has been postpo-
ned due to COVID-19.
On the other hand, oil collection was reduced
by 34% per month in 2020 in Alsea Mexico
and South America, compared to previous
years, managing 525,531 liters of oil. However,
we made progress in the renegotiation and
evaluation of new oil suppliers
Consumption of
materials in Mexico
Throughout our supply chain, we distribute
to brands a total of 12 thousand tons of dis-
posable products, of which 58% correspond
to recycled or biodegradable
materials. On the other hand, we are wor-
king on the reuse of pallets together with our
logistics department. In addition, we have
practically eliminated all the use of plastic
boxes for packaging in our distributions.
Alsea Europe Material con-
sumption
At Alsea Europe, during 2020 we have been
actively working on the modification of sin-
gle-use plastic containers. This project will
be executed during the year 2021. On the
other hand, we are making progress in com-
prehensive waste management in our res-
taurants, by studying the implementation of
measures related to prevention and recy-
cling.
To achieve these goals, we are investing our
efforts in recycling and waste management
projects, such as the packaging recycling
program in collaboration with Ecoembes.
Additionally, we are launching pilot waste
separation projects at our Domino’s Pizza,
Starbucks and VIPS brands.
Each brand is responsible for applying proper
waste and recycling management in its es-
tablishments. This way, Starbucks separates
plastic waste from other waste in the back
office. At Domino’s Pizza, Foster’s Hollywood,
Ginos, TGI Fridays, VIPS, and VIPS Smart, pro-
gress continues in a plan to separate plastic,
organic and other waste in kitchens.
In the case of oil, for all brands and establi-
shments, used oil is removed by authorized
and certified managers for recycling and
reuse, being reused for the manufacture of
other new products or fuels. In 2020 330,940
liters of oil were managed.
126
127
Global Report 2020 Efficient water
management
We work to reduce the water footprint of
the company and implement global cam-
paigns to raise awareness of good use and
management among our employees. At the
same time, we apply measures linked to a
more rational and responsible consumption,
among which the following stand out:
• Double discharge cisterns.
• Urimat-type urinals in Foster’s Hollywood
brand restaurants.
• Timed water taps.
• Aerator filters to save water.
In addition, our water supply and supply ma-
nagement is always carried out in full accor-
dance with local limitations, extracting the
water consumed from public infrastructures.
In 2020, Alsea’s water consumption was 2.4
million m3, which represents a 33% decrea-
se compared to 2019. Likewise, there is a de-
crease in the intensity of consumption com-
pared to the volume of billing.
In this matter, at Alsea Mexico, we are stud-
ying and evaluating the viability of a water
treatment plant for Starbucks, which will lead
to advantages in saving average water con-
sumption, reducing or not using salt, making
use of 100% drinking water consumed, and
the guarantee of water quality for the prepa-
ration of beverages under Alsea standards
Regarding wastewater and effluent mana-
gement, at Alsea Europe, we install grease
separators in accordance with the EN 1825
standard to ensure that organic fats and
oils are removed effectively. The separators
are applied in the restaurants of the brands
where the spills may contain these substan-
ces.
Water consumption (m3)
Country
2020
2019
Alsea Mexico
1,700,000
2,514,000
Alsea South America
12,292
19,000
Alsea Europe
40
862,270
1,336,262
TOTAL
2,574,562
3,869,262
-33%
40Due to internal information monitoring systems, it is not possible to show water
Due to internal information monitoring systems, it is not possible to show water
consumption in liters (or equivalent unit) for 2020. Instead, an approximation is made
consumption in liters (or equivalent unit) for 2020. Instead, an approximation is made
according to the cost in euros and the average price of water € / m³ for Spain
according to the cost in euros and the average price of water € / m³ for Spain
and Portugal. It does not consider the cost of water consumption in France and the
and Portugal. It does not consider the cost of water consumption in France and the
Netherlands, due to the impossibility of distinguishing the amount allocated to this cost in
Netherlands, due to the impossibility of distinguishing the amount allocated to this cost in
the internal information systems. Furthermore, Spain and Portugal represent 90% of Alsea
the internal information systems. Furthermore, Spain and Portugal represent 90% of Alsea
Europe’s own establishments, consequently, the justified omission of the aforementioned
Europe’s own establishments, consequently, the justified omission of the aforementioned
information does not entail a significant impact on the final result.
information does not entail a significant impact on the final result.
128
128
129
129
Global Report 2020 131
131
6Community response: Community response: we remain committed we remain committed to continue sharing valueto continue sharing valueEvery year we reaffirm our commitment to so-ciety, promoting an inclusive growth path in all the territories where we are present, pro-moting responsible and fair development for all people“”At Alsea, we are firmly committed to creating sha-red value and spreading it to society, making it a par-ticipant in our growth and promoting the develop-ment of each of the environments where we operate. To achieve this great objective, we are directly involved in lo-cal development and promote initiatives and programs in alliance with social organizations supporting the most vulne-rable groups in our surroundings. Alliances to
favor the closest
environment
Strategic alliances in Alsea
Mexico, South America and
Europe
We are a company that operates in 11 geo-
graphies worldwide, which leads us to inte-
ract with very diverse cultures, realities, and
people. Because of this, at Alsea, we unders-
tand as essential the development of a glo-
bal strategy of commitment and social coo-
peration, but that is nourished by specific
objectives, adapted to the reality and need
of each territory. This local vision allows us
to enhance our collaborations and increase
the positive impact in each of the locations
we operate.
In this line, we establish multiple strategic alliances
In this line, we establish multiple strategic alliances
to generate value in the environment and respond
to generate value in the environment and respond
to the needs of the territories where we are present.
to the needs of the territories where we are present.
Mainly, the impulse of these alliances is centered on
Mainly, the impulse of these alliances is centered on
the collaboration of all the parties involved and the
the collaboration of all the parties involved and the
dialogue with them.
dialogue with them.
To achieve a more significant impact, we
adhere to platforms and promote collabo-
ration in different events where we connect
with interest groups and interested parties,
including actors from local communities.
132
These strategic alliances are also established with associations and NGOs through contribu-
tions to develop our closest environment, aimed at meeting specific needs according to each
organization. Throughout 2020 we have made donations to associations and non-profit enti-
ties for a value of more than 1.7 million pesos and an economic value of donations in kind for
more than 20 million pesos, which amounts to approximately 22 million pesos of collaboration
with organizations, turning to the communities and environments where we operate.
NON-PROFIT ASSOCIATIONS AND ENTITIESV2020
NON-PROFIT ASSOCIATIONS AND ENTITIESV2020
E
E
P
P
O
O
R
R
U
U
E
E
Professional and
Professional and
social volunteer
social volunteer
• ASPACE
• CEAR
• Federación de PPSS Pinardi
• Fundación éxit
• Fundación Luz Casanova
• Fundación Manantial
• Fundación Secretariado Gitano
• Fundación Tomillo
• Orden de Malta
• Zonta, centro de acogida Arturo Soria
E
E
P
P
O
O
R
R
U
U
E
E
Financial and in-kind
Financial and in-kind
donations
donations
• Acción contra el Hambre
• Adena/WWF
• AFMD
• ALZHE
• AMIZADE
• Asociación Española Contra el Cáncer
• Asociación Espiral Loranca
• Asociación manos de ayuda social
• Association Arpejeh
• Association Vie et Coeur (AVEC)
• Banco Alimentar - Emergência Alimentar
• Banco de alimentos
• Cáritas Diocesana de Jaén
• COGAM
• Cruz Roja
• FESBAL
• Fundación Adra
• Fundación Bobath
• Handicap et Compétences
• Manos Unidas
• SEO/Birdlife
• Voluntare
Professional and
Professional and
social volunteer
social volunteer
• Colombia Cuida Colombia
• Fundación Flexer
• Fundación Retro Alimenta
D
D
N
N
A
A
O
O
C
C
X
X
E
E
M
M
I
I
I
I
A
A
C
C
R
R
E
E
M
M
A
A
H
H
T
T
U
U
O
O
S
S
Financial and in-kind
Financial and in-kind
donations
donations
• Banco de Alimentos Argentina
• Ceprodih
• Coanil
• Descubreme
• Fundación ABC Prodeín
• Fundación Flexer
• Fundación Funoz
• Fundación Natalí Dafne
• Fundación Semilla y Fruto
• Fundación Sí
• Trabajadores de la Salud
D
D
N
N
A
A
O
O
C
C
X
X
E
E
M
M
I
I
133133
I
I
A
A
C
C
R
R
E
E
M
M
A
A
H
H
T
T
U
U
O
O
S
S
Global Report 2020
Positive impact
on local
communities
We are committed to society in all the countries in
We are committed to society in all the countries in
which we are present, collaborating with different
which we are present, collaborating with different
entities in carrying out different social benefit
entities in carrying out different social benefit
activities.
activities.
However, the coronavirus this 2020 has been an omnipresent
However, the coronavirus this 2020 has been an omnipresent
issue in collaborations in all the countries in which we participate.
issue in collaborations in all the countries in which we participate.
GLOBAL
GLOBAL
RESOULTS
RESOULTS
20202020
More than
50
NGOs
supported
More than
More than
800
volunteering Hours
from January to
March, 2020
395
tons of in-kind
donations
134
135135
Global Report 2020 MEXICO
As a result of our commitment to Mexican
society, the Alsea Foundation was founded
in 2004, whose mission is to be a vehicle for
sustainability, focusing mainly on the food
security of vulnerable communities, educa-
tion and employability.
We support the growth and well-being of the
communities where we operate by providing
or improving services to the community and
carrying out social volunteering actions, fi-
nancial and in-kind donations. Our main lines
of action are:
Food
Social and cultural
investment
Education and
employability
Mexican
Gastronomy
Through our
campaign “Va por mi
cuenta”(It’s on Me)
and under the slogan
no one else is hungry,
we collaborate
with our clients and
stakeholders in the
eradication of food
poverty in Mexico.
This year 2020 we have
seen how Mexican society
suffered with serious
consequences from the
action of the pandemic,
therefore, we have
decided to strengthen
the commitment that has
always characterized us
as a company and create
the “Va por nuestros
Héroes” (This One’s for
Our Heroes) movement to
support people who, as a
result of COVID-19, are in a
situation of vulnerability.
Our Integra program provides
educational and employability
opportunities to talented
young Mexicans through the
action of the Alsea Foundation.
Promotion of Mexican
gastronomy
In turn, in alliance with World Vision of Mexico, it has collabora-
ted with the families of Villahermosa affected by the floods cau-
sed by the tropical storm “ETA” and their situation has been ag-
gravated by the state of alarm and the pandemic. We carried
out this project for five days with the primary goal of distributing
humanitarian aid; 1,000 food security kits to children, teens, and
youths and their families, benefiting a total of 3,910 people.
WE STRENGTHEN OUR SUPPORT
WE STRENGTHEN OUR SUPPORT
DURING THE PANDEMIC
DURING THE PANDEMIC
We created “Va por
nuestros Héroes”
11,278
food baskets
for VXMC beneficiaries
$6,060,597.00
Food baskets and operating cost
of 10 soup kitchens for children.
Emergency
fund
for employees of the Alsea
operation in Mexico, Chile,
Colombia, Uruguay and
Argentina
2.5 million pesos
More than
170,000
rations
of food for health workers from
various hospitals in the country
348,745
people
benefited
and we continue to impact
many more on a daily basis
1,650
food baskets
for collaborators who are
single mothers
$700,000
395
tons
of food donated in all Alsea
markets
8,865
food rations
or patients and families
of the Hospital Siglo XXI +
the hundreds of products
donated by the brands
$300,000
Food
security
for 620 beneficiaries of
indigenous communities in
Oaxaca and SLP + purchase and
distribution of medical supplies
$1,578,000
Purchase of
11 tons
of grains benefiting
2,759
families in 11 states of the
Republic
$250,000
136
137
Global Report 2020
$42,291,765.30
Total expenses
Causes/ Destined Resources:
Food
78.48%
Education and employability
6.43%
Emergency fund
Variable contributions
New soup kitchen
construction
Associations in which Alsea
participates
Citizen participation
Community Development
1.76%
0.57%
4.66%
0.77%
0.83%
7.09%
”
a
t
n
e
u
C
m
i
r
o
p
a
V
“
t
n
e
m
e
v
o
M
The “Va por mi Cuenta” movement is part of
the heart of Alsea’s social action. It arose in
2012 as an initiative endorsed by Fundación
Alsea A.C. in which, through the participation
of Alsea, its brands, volunteers, and the
various interest groups that participate in
our campaign, we contribute and fight to
eradicate food poverty from our surroundings.
As a result of the effort and commitment of
the Alsea family, we have achieved essential
achievements and contributed to helping
the most vulnerable population. We have 13
children’s soup kitchens in operation and
during 2021, a new Food Center is scheduled to
open in Cancun.
138
139139
Informe Global 2020
We are very proud of the growth and acceptance that our program has had and of the
results that we have achieved throughout these years:
More than
More than
35 million
pesos invested
per year in the operation of our
soup kitchens.
3 million
nutritious
meals
served since 2012.
7,400
boys and girls
have access to nutritious
food daily.
More than
2,000
families
benefited indirectly.
Models
Models
OUR LINES OF ACTION
OUR LINES OF ACTION
Food rescue
and
donations in kind
• “Alimento para com-
partir” (Food for Sha-
ring) program in con-
junction with Starbucks.
• Donations of food
rations to various
associations.
Nutritional
education
Food
Safety
• Delivery of nutritional
and values talks, and
distribution of cook-
books in vulnerable
communities that in-
cludes dishes prepared
with a low budget.
• Construction and ope-
ration of 13 children’s
soup kitchens called
“Nuestro Comedor”.
1. Urban model: 9
2. Community model: 3
3. School model: 1
1.1.
1.1.
2.2.
1.1.
3.3.
1.1.
2.2.
1.1. Urban model
Urban model
Partner: Comedor Santa María A.C.
Number of soup kitchens: Construction and operation of 13 children’s soup kitchens
called “Nuestro Comedor”.
Capacity: 300 to 500 children.
Características: Human training program, talks to parents, community social project.
Features: State of Mexico (Metepec, Ecatepec, Ecatepec Embajadas, Valle de
Chalco), Mexico City (Iztapalapa, Santa Úrsula, Golondrinas), Nuevo León (García),
Coahuila (Saltillo)
2.2.
3.3.
Community model
Community model
Partner: Fondo para la paz I.A.P.
Number of soup kitchens: 3 operating under this model.
Capacity: 150 to 200 boys and girls approx.
Características: Comprehensive and sustainable design, it has rainwater harvesting,
drainage, water treatment plant, dual drinker, patsari-style saving stoves, vegetable
garden, LED lighting, etc.
Features: Oaxaca (Santa Rosa, El Corozal), San Luis Potosí (La Concepción).
School model
School model
Partner: Comedor Santa María A.C. y SEDAC I.A.P.
Number of soup kitchens: 1 operating under this model
Capacity: 740 children
Características: operates within a school directly impacting the school performance
of minors in basic education.
Features: State of Mexico (Ixtapaluca).
140
141
Global Report 2020 This unusual year, we have strongly valued
having solid social contribution programs
to fight inequalities and the most disadvan-
taged groups. During 2020, we have conti-
nued with our annual fundraising campaign,
which has exceeded the goal set for this
year, achieving excellent results:
+7.2%
of the collection goal
for 2020
Customer fundraising:
10,940,563.68 pesos
Collaborators fundraising
1,812,312.16 pesos
40
:
Products with a Cause:
12,633,077.70 pesos
FUNDRAISING
TOTAL
25,385,953.54
The excellent results achieved and our com-
mitment to continue fighting and combating
child food poverty motivates us to continue
with this program, promote social collabo-
ration, and alliances with social organiza-
tions that help people at risk of social and
economic exclusion.
During 2020, Alsea has made investments of
more than 4 million pesos to Integra, a pro-
gram that seeks to facilitate access to qua-
lity employment and education for young
people in vulnerable situations.
Likewise, together with Starbucks, we crea-
ted a fund of 5 million pesos to benefit our
operational collaborators seriously affected
by the pandemic in Mexico, Chile, Argentina,
Colombia, and Uruguay.
Latin America
Our satisfaction with the social actions con-
ducted in Mexico and our concern for the
social situation of various sectors of socie-
ty in South America prompted us to expand
our work throughout Latin America.
Colombia
More than
More than
Contribution to
616,000
pesos
donated
to social action
18,000
beneficiaries
education
and support
to the health
sector
• Colombia cuida Colombia: e contri-
bute to the initiative “Colombia Cuida
Colombia” (Colombia Cares for Co-
lombia) a partnership between civil
society and the private sector to con-
nect and articulate people, organiza-
tions, foundations, companies and the
government, to mitigate the negative
impact of COVID-19 on security food
and health, in the most vulnerable
populations of the country (including
older adults, informal workers, single
mothers, indigenous and migrant po-
pulations, among others).
• During the winter wave suffered
in Colombia, the collaborators
donated the value they wanted
through a link, where some of
them joined to donate a figure,
others doing it individually.
40Collection until March 2020.
Collection until March 2020.
142
143143
Global Report 2020 • From Alsea Colombia, the use
of sales of all the products of its
brands was donated for Decem-
ber 1 and the money raised was
used to cover the needs and ini-
tiatives of Colombia Cuida Co-
lombia.
• Fundación ABC Prodeín: we collabo-
rate with this foundation, whose main
purpose is the comprehensive edu-
cation of people in all its aspects. Our
collaboration was mainly aimed at
guaranteeing the school days provi-
ded by said entity, contributing to the
provision of recreational and didactic
materials for teaching children.
• Fundación Funo: together with Ar-
chies and Starbucks, we are part of
an initiative in which 400 coffees and
250 calzoni were distributed to co-
llaborating personnel, mainly nurses,
doctors, assistance personnel, clea-
ning, surveillance, of the San Rafael
University Hospital and La Samaritana
University Hospital.
• Fundación Semilla y fruto: We con-
tributed with an investment in mate-
rial and security elements necessary
to operate the bakery that supports
part of the Foundation’s income, and
that were essential to obtain the li-
cense to operate, especially given the
strict restrictions and measures im-
plemented during the pandemic.
Chile
More than
Collaboration with
1,700 kilos
of food
donated to hospitals in
Chile
3
social
entities
Help vulnerable children
and young people
and/or with
learning
disabilities
Our social action in Chile is based on colla-
boration with various social organizations:
• Fundación Forge: It aims to motivate
economically vulnerable young peo-
ple to access a quality life through
work, continuous learning, and com-
mitment to the community. Its pro-
grams focus on the development of
key social-emotional and digital skills
for the jobs of the future and adapta-
tion to changing scenarios.
• Descubreme: It was created in 2010
with the mission of promoting the
comprehensive inclusion of people
with cognitive disabilities in all areas
of human development.
• Coanil: It provides and develops su-
pport services for people with inte-
llectual disabilities with standards of
excellence and recognition of their
needs. In addition to promoting a so-
cial change that is essential to impro-
ve their quality of life.
During 2020, we have collaborated with
various hospitals in Chile, in which we
have donated more than 1,700 kg of food,
supporting health services at critical ti-
mes to face the fight against the pan-
demic.
144
145
Global Report 2020 Argentina
More than
More than
Help vulnerable children and
47,000
plates of food
donated
to the Food Bank
44,000
Solidarity
Whoppers
donated
to the Food Bank.
make visible
the struggle of
children with
cancer and
their families
Our social action in Argentina has been di-
rected at various social entities and institu-
tions:
• Universidad Nacional de La Matanza:
Public institution located in one of the
most important areas of the province
of Buenos Aires, from a demographic,
political and economic point of view, in
which young people who acquire a de-
gree are the first generation of their fa-
milies to achieve it.
• We have collaborated with the dona-
tion of toys for vulnerable children.
• Fundación Natalí Dafne Flexer: It is an
entity that develops emotional support
activities for children with cancer and
their families.
• We have celebrated the 12th anni-
versary of our collaboration with the
NGO, in which we have donated 3,000
cups of milk.
Uruguay
Our action in Uruguay, on the one hand,
includes assistance to the Center for the
Promotion of Human Dignity, which aims
to serve and promote family members
who, for various reasons, are unemplo-
yed, unexpected pregnancy, among
others, especially women with children in
a high-risk situation.
Through Starbucks, we collaborate with
organizations like Ceprodih by donating
mainly food. It has also collaborated with
various hospitals in Uruguay with break-
fasts and bags of coffee.
•
From Starbucks Argentina, each year, wi-
thin the framework of the International
Child and Adolescent Cancer Day, we
support #FundaciónFlexer in publicizing
their awareness campaign: #PoneteLa-
Camiseta That day all the collaborators
work with a white t-shirt, with the aim of
spreading and sensitizing society about
the fight of children suffering from can-
cer and their families. In addition, various
volunteer actions and fundraising activi-
ties are carried out, among others.
• Fundación Sí: NGO whose main objecti-
ve is to promote the social inclusion of
the most vulnerable sectors of Argentina.
• We donate products to the Funda-
ción Sí in support of vulnerable adults
for international coffee day.
• Food Bank: Through Burger King, we
have donated more than 47 thou-
sand plates of food and more than 44
thousand Whopper Solidario, which is
equivalent to more than 78 thousand
Mexican pesos.
It has also collaborated with various hos-
pitals and health workers in Argentina
through the donation of free breakfasts
and coffee during certain periods of time
during the pandemic.
146
147
Global Report 2020 We establish strategic relationships with
other companies and with NGOs to genera-
te value and respond to the needs of the te-
rritory in which we are present. This 2020 we
have donated in total, adding economic do-
nations and donations in kind to food banks,
more than 200,000 euros. Additionally, du-
ring the months of confinement, we have
collaborated with both the Emergency Mili-
tary Unit, the Spanish Red Cross, and other
social entities, providing 9,300 food rations
to vulnerable groups (in addition to the ini-
tiatives carried out by our brands in Europe).
EUROPE
We conducted employment promotion acti-
vities for vulnerable groups. In addition, with
our volunteer programs we collaborate in
strengthening the territory by reaching out
to local populations.
• Path to employment: We offer an em-
ployment option for people at risk of
social exclusion. We divided this project
into three phases.
1. Starting line: Training stage.
2. Practice and learn: Carrying out work
practices in our school restaurants.
3. First opportunity: In collaboration with
the public employment service and
the La Caixa Foundation.
Unfortunately, this 2020 we have not
been able to reach the same number
of people with this project as in previous
years due to limitations caused by the
pandemic.
• Volunteering: We promote volunteering
among all Alsea employees, our main
volunteer programs are related to the
themes of the environment and labor in-
sertion.
Domino’s
Ginos
We donated 600 pizzas and 200
combos to health personnel and
police forces supporting the fight
against COVID-19.
We collaborate with the Red Cross by
delivering 650 pizzas to its volunteers
and to families and people at risk of
social exclusion.
We started our program “Aperturas
con causa” (Openings with a Cause)
in which we commit to donate funds
raised during our stores’ opening
day. During 2020, 19,000 euros were
raised for various local organizations
under the framework of this program.
In our “Smiles” project, we donated
50 cents from the sale of our pizzas
to Fundación Theodora. Fundación
Theodora collaborates with hospitals
to bring joy to more than 5,000 hos-
pitalized children and accompany
their families. In 2020, more than
70,000 euros have been raised and
donated.
During 2020, 110,000 euros have been
allocated to the sponsorship of chil-
dren’s sports, benefiting 723 teams
and 11,000 children..
We partnered with Deliveroo to bring
1,782 food rations to vulnerable fami-
lies in Madrid and 495 to Red Cross
professionals active
the fight
against COVID-19.
in
Starbucks
We collaborate with the military field
hospital installed at IFEMA and a lar-
ge number of hospitals distributed
between Spain and Portugal throu-
gh the donation of 9,000 coffee cap-
sules, more than 1,000 liters of milk,
croissants, paper cups.
We created the
“Extra Solidario”
campaign in which the client makes
a voluntary donation by adding an
amount to their order and we double
the amount. We managed to raise
800 euros. .
148
149
Global Report 2020 Vips
We donated 5,544 food rations to
homeless families as a result of CO-
VID-19. Together with the Madrid City
Council and the Luz Casanova Foun-
dation, we created the “No second
Night” initiative, offering 50 women
at risk 5,500 meals and 2,500 break-
fasts, at a cost that was financed by
the Madrid City Council.
Fight
Food Waste
Actions to combat food waste come from
implementing management based on the
prevention and control of surpluses to redu-
ce and mitigate waste.
Through Burger King, Chili’s, P.F. Chang’s Star-
bucks and Alsea Support Center they have
collaborated with the Fundación Retro Ali-
menta, collecting and recovering more than
4 tons of vegetables to be donated to foun-
dations and soup kitchens. More than 100
volunteers have participated in this initiative
to fight against food waste. Cosecha Solida-
ria (Solidarity Harvest) is one of the volunteer
campaigns, in which agricultural volunteers
of fruit and vegetables recover harvested
food that is not intended for distributors,
which is donated to various organizations
with social purposes.
On the other hand, Alsea Europe restaurants
and cafeterias have information systems to
adjust orders by carrying out consumption
estimates. Under this mechanism, the supply
needs to warehouses and daily product pre-
parations are foreseen. On the other hand,
we are also implementing the recording of
organic waste throughout the company,
both in the room and by the client, to esta-
blish control and opportunities for improve-
ment.
In addition, we have established a proto-
col that allows the surplus produced in the
warehouses to be donated when there is a
change of letter or recipe. In this sense, we
link donations of products close to the expi-
ration period described above.
On the other hand, the Quality Department
of Alsea Europe is developing life studies for
each product so that its duration can be ex-
tended under strict food safety standards.
The increase in the useful life product seeks
to avoid food waste.
Responsible for our
environment
Convinced of the importance of promoting
animal protection and welfare, Alsea, the lea-
ding restaurant operator in Latin America and
Spain, remains committed to promoting the
transition to a supply of eggs from cage-free
hens.
For this reason, during the last 4 years we have
explored with our suppliers’ different alterna-
tives that allow us to have a sufficient supply
of cage-free chicken eggs to satisfy market
demand, under affordable conditions acces-
sible to customers.
ady have the optimal conditions so that 100%
of the Shell eggs that we use in the different
brands come from cage-free hens.
Aware of the road ahead, in Alsea we will con-
tinue working hand in hand with our primary
producers and suppliers in each country whe-
re we operate to achieve a sufficient supply
of cage-free chicken eggs to supply demand.
Alsea is convinced that, with this type of ac-
tion, we contribute to generating a process of
change towards a practice that positively im-
pacts animal welfare.
2020 was an atypical year, not only for Alsea
and the restaurant industry, but for various
sectors around the world and this had a clear
effect on the levels of production and con-
sumption of the raw materials used. Howe-
ver, our commitment made in 2016 continues
and, as part of the actions to achieve it, we
are proud to report that, in Iberia, a market in
which we have more than 1,000 units, we alre-
On the other hand, from Alsea Europe, we are
also working to acquire 100% of the I range ve-
getables (fresh or preserved, not processed)
and IV range (fresh prepared for consump-
tion) from suppliers that have some certifica-
tion of good agricultural practices.
150
151
Global Report 2020
153153
7Scope of the information Scope of the information and content of the reportand content of the report Scope of
the information
Reporting
Criteria
This sustainability report includes the main
results of the activities we carry out at Alsea
S.A.B. of CV. and subsidiaries in terms of sus-
tainability during the year 2020, in the period
between January 1 and December 31.
The report mainly includes our relationship
with stakeholders, the identification of mate-
rial issues, risk management and the analy-
sis of the impacts and positive contributions
of our operation, in economic, social and en-
vironmental matters.
For its preparation we rely on the report of
the main actions of our management in the
territories where we operate: Mexico, Spain,
Argentina, Colombia, Chile, France, Portugal,
Belgium, the Netherlands, Luxembourg, and
Uruguay.
We work to improve accountability and
greater transparency, explaining our sustai-
nability strategy and addressing issues of
important relevance to our Company. We
publish this report giving continuity to our
management reports and progress of our
actions and strategies. In 2020, we published
our Sustainability Progress Report for the
year 2019. In this annual exercise, we detail
our initiatives aligned to the fulfillment of the
Sustainable Development Goals (SDG) and
their goals, with which we also respond to
our corporate commitment to the Ten (10)
Principles of the Global Compact and the
2030 Agenda of the Organization of the Uni-
ted Nations.
We have selected and included content fo-
llowing the principles and requirements de-
fined by the most up-to-date versions of the
GRI Standards guides in their essential op-
tion. The information presented is expanded
and is related to the content published on
the Alsea website through various policies
and public documents, such as the Con-
solidated Financial Statements for the year
2020.
The report details the actions and milestones
reached in 2020, one of the most exceptional
years in recent times. For comparison and
analysis purposes, quantitative data from
previous years have been included, ensuring
transparency and clarity in communicating
the results to interested parties.
Principles for the definition of contents:
• Inclusion of stakeholders
• Sustainability context
• Materiality
• Completeness
Principles for the definition of quality:
• Precision
• Balance
• Clarity
• Comparability
• Reliability
• Timeliness
154
155155
Global Report 2020 157157
8Annex. Annex. Indicator TablesIndicator Tables Additional
information on
collaborators
Number of professionals per
professional group
Professionals by professional group Alsea
Mexico and Alsea South America (%)
SPAIN
Group I
Group II
Zena Alsea
2019
5.95%
6.15%
GRUPO
2019
2020
Group III
16.60%
Alsea Mexico
Administrative
4.46%
4.81%
Operational
95.54%
95.19%
Alsea
41
South America
Administrative
5.18%
4.61%
Operational
67.87%
68.30%
Group IV
67.29%
Group V
4.02%
Total
100.00%
In this section, the number of professionals is
broken down by professional group for Alsea.
Considering the different classifications of the
categories, it is not possible to display the infor-
mation according to the characterization des-
cribed in chapter one (Alsea Mexico, Alsea South
America and Alsea Europe).
At Alsea Europe, different collective agreements
are applied but signed under homogeneous cri-
teria for all professionals in companies in Spain.
For this reason, under the premise of integration
of Alsea Europe, we have added professionals
from groups corresponding to different collecti-
ve agreements but under a criterion of similarity
and following the guidelines established in the
State Hospitality Labor Agreement..
Likewise, for the distribution by professional
group for Alsea Europe, it is presented disag-
gregated by the countries that respond to the
geographical distribution where Alsea Europe
operates under its own establishments. The pro-
fessional groups respond to the classifications
by their own classification or their own collec-
tive agreement, if available, in each country. In
addition, the data presented for 2019 respond to
distribution by agreement and companies prior
to the company’s integration process. Finally, the
number of professionals outside of Spain in 2019
is not shown because it is not within the scope of
the 2019 Non-Financial Information Statement.
Professionals by professional group (%)
SPAIN
Group I
2020
7.98%
Group II
11.94%
Group III
37.95%
Group IV
42.12%
Total
100.00%
SPAIN
Group I
Group II
Grupo VIPS
2019
7.83%
11.51%
GroupIII
49.59%
Group IV
31.07%
Total
100.00%
PORTUGAL
Kitchen Helper
Area Expert 1
Area Expert 2
Assistant Store Manager
Barista
Barista 1ª
Kitchen Chef
Cook
Director
District Manager
Waiter
Waiter 1
Manager
Kitchen Manager
Room Manager
Shift Supervisor
Specialist 1
Specialist 2
Store Manager
Supervisor
2020
4.10%
0.51%
0.51%
4.10%
45.13%
10.77%
0.51%
1.54%
0.51%
1.03%
3.59%
0.51%
1.03%
0.51%
2.05%
12.82%
3.59%
1.03%
5.64%
0.51%
FRANCE
Executive
Agent
Employee
Total
NETHERLANDS
Store Manager
Shift supervisor
Barista
Assistant
Support functions
2020
11.42%
31.60%
56.98%
100.00%
2020
8.57%
24.29%
60.00%
2.86%
4.29%
158
41It does not include the employees of Alsea Chile, since there is no disaggregated
It does not include the employees of Alsea Chile, since there is no disaggregated
information by professional category.
information by professional category.
159
Total
100.00%
Total
100.00%
Global Report 2020 New Hires
New hires by gender
42
2020
2019
WOMEN
MEN
TOTAL
WOMEN
MEN
TOTAL
Alsea Mexico
10,410
5,819
16,229
21,055
13,673
34,728
Alsea Sudamérica
1,387
911
2,298
3,177
2,823
6,000
Alsea Europa
3,669
1,808
5,477
2,804
3,447
6,251
Alsea Global
15,466
8,538
24,004
27,036
19,943
46,979
Nuevas contrataciones por edad
2020
30-49
AÑOS
18-29
AÑOS
50 AÑOS
O MÁS
18-29
AÑOS
2019
30-49
AÑOS
50 AÑOS
O MÁS
Alsea Mexico
12,746
3,241
242
27,100
6,901
727
Alsea Soud America
43
1,817
462
Alsea Europa
4,185
1,003
19
77
4,889
1,066
5,552
668
45
31
Alsea Global
18,748
4,706
338
37,541
8,635
803
New hires by age Alsea France and the Netherlands
2020
26-35
AÑOS
34
10
44
18-25
AÑOS
125
36
161
35 AÑOS
O MÁS
18-25
AÑOS
2019
26-35
AÑOS
35 AÑOS
O MÁS
2
5
7
-
-
-
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France
Netherlands
Alsea Global
GRI Table of Contents
and Global Compact
GRI Standards Table of Contents
Response to indicator/Pages
Global compact
General contents
Organizational profile
102-1
102-2
Name of the Organization
Activities, brands, products, and services
18
18-26
102-3
Location of headquarters
Avenida Revolución Número 1267,
Torre Corporativa, Piso 21, Colonia Los
Alpes, Delegación Álvaro Obregón,
01040 Ciudad de México
102-4
102-5
102-6
102-7
102-8
102-9
102-10
102-11
102-12
102-13
Strategy
Location of operations
Ownership and legal form
Markets served
Scale of the organization
Information on employees and other workers
Supply Chain
Significant changes to the organization and
its supply chain
Precautionary Principle or approach
External initiatives
Membership of associations
102-14
Statement from senior decision-maker
102-15
Key impacts, risks, and opportunities
Ética e integridad
18-21
45-49
18-26
30,31
61-65
110-119
110-119
48-52
34,53
193
6-12
51-55
Principle 6
102-16
102-17
Gobernanza
Values, principles, standards, and norms of behavior
38-43
Mechanisms for advise and concerns about ethics
39-43
Principle 10
Principle 6
102-18
Governance structure
45-50
42In relation to the new hires for Alsea Europe in 2019, due to the internal compilation
In relation to the new hires for Alsea Europe in 2019, due to the internal compilation
operation of the previous year, only the information corresponding to the companies
operation of the previous year, only the information corresponding to the companies
that comprised the old VIPS Group is presented.
that comprised the old VIPS Group is presented.
43Includes only Spain and Portugal.
Includes only Spain and Portugal.
160
161
Global Report 2020 102-19
Delegating authority
102-20
102-21
102-22
Executive-level responsibility for economic,
environmental, and social topics
Consulting stakeholders on economic,
environmental, and social topics
Composition of the highest governance body
and its committees
102-23
Chair of the highest governance body
102-24
102-26
102-27
102-28
102-29
102-31
102-32
102-33
102-34
102-35
Nominating and selecting the highest governance
body
Role of highest governance body in setting
purpose, values, and strategy
Collective knowledge of highest governance
body
Evaluating the highest governance body’s
performance
Identifying and managing economic
environmental, and social topics
Review of economic, environmental, and
social topics
Highest governance body’s role in sustainability
reporting
51-55
Communicating critical concerns
45-50, 58,59
Nature and total number of critical concerns
45-50, 58,59
Remuneration policies
Principle 6
45-50
45-50
56-59
45-50
47
45-50
51-55
45-55
45-50
45-50, 58,59
45-50, 58,59
Stakeholder’s involvement
102-40
List of stakeholder groups
102-41
102-42
102-43
Collective bargaining agreements
Identifying and selecting stakeholders
Approach to stakeholder engagement
102-44
Key topics and concerns raised
Practicing reporting
46
47
73
56-59
56-59
56-59
102-45
Entities included in the consolidated financial
statements
Consolidated financial statements
102-46
Defining report content and topic boundaries
153,154
102-47
List of material topics
58,59
102-48
Restatements of information
The indicators have been reviewed
and environmental consumption ad-
justed, applying improvements in the
measurement methodology.
102-49
102-50
102-51
102-52
102-53
102-54
102-55
102-56
Changes in reporting
Reporting period
Date of most recent report
Reporting cycle
153,154
2020
2019
Anual
Contact point for questions regarding the report
155
Claims of reporting in accordance with the
GRI Standards
GRI content index
External assurance
153,154
161-166
No
Management approach
103-1
103-2
103-3
Economic
Explanation of the material topic and its Boundary
58,59
The management approach and its components
51-55
The management approach and its components
51-55
Economic performance
201-1
Direct economic value generated and distributed
Consolidated financial statements
Indirect economic impacts
203-1
203-2
Infrastructure investments and services supported
14,15
Significant indirect economic impacts
14,15
Acquisition practices
Principles 1 and 3
204-1
Expenditure proportion in local suppliers
115
Anti-corruption
205-1
Operations assessed for risks related to corruption
40,41
205-2
205-3
Principle
207-1
207-2
Communication and training about anti-corruption
policies and procedures
Confirmed incidents of corruption and actions
taken
Fiscal approach
Tax governance, control and risk management
40,41
40,41
14,15,42
14,15,42
Principle 10
Principle 10
Principle 10
162
163
Global Report 2020 Environmental
Materials
301-2
301-3
Energy
302-1
302-2
Recycled input materials used
125-127
Principles 7 and 8
Reused products and their packaging materials
125-127
Energy consumption within the organization
Energy consumption outside the organization
122-124
122-124
Principles 7 and 8
302-3
Energy intensity
302-4
Reduction of energy consumption
Water and effluents
303-4
303-5
Emissions
305-1
305-2
305-3
305-4
305-5
Water spilling
Water consumption
Direct (Scope 1) GHG emissions
Indirect (Scope 2) GHG emissions
Other indirect (Scope 3) GHG emissions
GHG emissions intensity
Reduction of GHG emissions
Effluents and waste
The energy intensity went from 16.35
kwh / thousand pesos in 2019 to 17.93
kwh / thousand pesos in 2020, increa-
sing by 9.64%.
Principle 8
In 2020, the total energy consumed in
Alsea was 690,212.42 Mwh, 27% lower
than the 2019 consumption.
Principles 8 and 9
128,129
128
123,124
123,124
123,124
123,124
123,124
Principles 7 and 8
Principles 7 and 8
Principle 8
Principles 8 and 9
401-3
Parental leave
73
Principle 6
Occupational Health and Safety
403-1
403-2
403-3
403-4
403-5
403-6
Occupational health and safety management
system
Hazard identification, risk assessment, and incident
investigation
Occupational health services
84-89
87,88,119
84-89
Worker participation, consultation and
communication on occupational health and safety
73
Worker training on occupational health and safety
82,83,86,87
Promotion of worker health
84-89
Training and education
404-1
Average hours of training per year per employee
80,81
404-2
404-3
Programs for upgrading employee skills and transition
assistance programs
80-83
Percentage of employees receiving regular
performance and career development reviews
76-77
Diversity and equal opportunities
Principle 3
Principle 3
405-1
Diversity of governance bodies and employees
45,46,64,65
Principle 6
Child labor
408-1
Operations and suppliers at significant risk for inci-
dents of forced or compulsory labor
39-40
Forced or Compulsory Labor
306-2
Waste by type and disposal method
125,126
Principles 7 and 8
409-1
Operaciones y proveedores con riesgo significativo
de casos de trabajo forzoso u obligatorio
39-40
Environmental evaluation of suppliers
Security Practices
New suppliers that have passed evaluation and
selection filters in accordance with
environmental criteria.
114,115
308-1
Social
Employment
401-1
New employee hires and employee turnover
160
401-2
Benefits provided to full-time employees that
are not provided to temporary or part-time
employees
75
164
Principle 6
Principle 6
410-1
Security personnel trained in human rights policies
or procedures
39-43
Evaluación de Derechos Humanos
412-2
Employee training on human rights policies
or procedures
39-43
Local communities
413-1
Operations with local community engagement,
impact assessments, and development programs
131-151
165
Principle 5
Principle 4
Principle 1
Principle 1
Global Report 2020 Supplier Social Assessment
New suppliers that were screened using
social criteria
114
Principle 2
Negative social impacts in the supply chain and
actions taken
110-119
414-1
414-2
Public Policy
415-1
Political contributions
Customer Health and Safety
Given our neutral position regarding
politics, Alsea does not grant any
kind of financing to political parties or
institutions that support them
Principle 10
416-1
416-2
Assessment of the health and safety impacts of
product and service categories
87,114,115
Incidents of non-compliance concerning the health
and safety impacts of products and services
During 2020, the payment of fines to
COFEPRIS (Federal Commission for
the Protection against Sanitary Risks,
a federal agency of the government
of Mexico has decreased by 65%
compared to 2019.
Marketing and label
417-1
Requirements for product and service
information and labeling
54,101-105
Client Privacy
418-1
Substantiated complaints concerning breaches of
costumer privacy and losses of customer data
40
Principle 10.
Consolidated
Financial
Statements
166
167
Global Report 2020 Alsea, S.A.B. de C.V. and Subsidiaries
Independent Auditors’ Report
and Consolidated Financial Statements
for 2020, 2019 and 2018
Contents
Independent Auditors’ Report
Consolidated Statements of Financial Position
Consolidated Statements of Income
Consolidated Statements of Other Comprehensive Income
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
169
174
176
177
178
180
182
Independent Auditors’ Report to the Board of Directors
and Stockholders of Alsea, S.A.B. de C.V.
Opinion
We have audited the accompanying consolidated financial statements of Alsea, S.A.B. de C.V.
and Subsidiaries (the Entity), which comprise the consolidated statements of financial position as
of December 31, 2020, 2019 and 2018, and the consolidated statements of income, consolidated
statements of other comprehensive income, consolidated statements of changes in stockholders’
equity and consolidated statements of cash flows for the years then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of Alsea, S.A.B. de C.V. and subsidiaries as of December
31, 2020, 2019 and 2018, and their consolidated financial performance and their consolidated cash
flows for the years then ended in accordance with International Financial Reporting Standards (IFRSs),
issued by the International Accounting Standards Board.
Basis for Opinion
We conducted our audits in accordance with International Standards on Auditing (ISA). Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the
Entity in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics
for Professional Accountants (IESBA Code) together with the Code of Ethics issued by the Mexican
Institute of Public Accountants (IMCP Code), and we have fulfilled our other ethical responsibilities in
accordance with the IESBA Code and with the IMCP Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis paragraph
As mentioned in Note 1a and 20 to the consolidated financial statements, the declaration of the
COVID-19 pandemic that emerged in 2020 had a major impact on the restaurant industry and the
Operations of the Entity, affecting the operation of the restaurants and, consequently, the amount of
income. This had mainly impacts on operating results, cash generation.
In addition, as mentioned in Note 20 to the attached consolidated financial statements, as of
December 31, 2020, the entity has to comply with certain covenants, as well as to maintain certain
financial ratios related to bank loans, which were met at year-end; However, there are other
168
169
Global Report 2020
covenants, as well as financial ratios for the twelve-month period ending December 31, 2021, from
which only waivers were obtained by their bank creditors until June 30, 2021, and at year-end the
Entity has no certainty they could be complied, as established by IAS 1 Presentation of Financial
Statements, indicating the long-term debt shall be classified as current. The amount of this debt was
reclassified in the short term in the consolidated statement of financial position amounting to $19,394
million, causing short-term liabilities to significantly exceed short-term assets at that date.
On April 5, 2021, the Entity formalized a new negotiation of the conditions of the credit, which establish
new debt obligations, which allows the Entity to have certainty about its fulfillment for the twelve-
months period ending December 31, 2021.
The Entity has undertaken a series of internal actions to ensure the viability and the success of its
operations will depend upon the continuity of the pandemic and the measures taken by different
governments with respect to the operation of restaurants, as well as the ability of the management to
generate income and liquidity. Our opinion has not been modified in relation to this matter.
Key Audit Matters
Key audit matters are those which, according to our professional judgment, have the greatest
significance for our audit of the consolidated financial statements of the current period. They have
been handled within the context of our audit of the consolidated financial statements taken as a
whole and the formation of our opinion in this regard. Accordingly, we do not express a separate
opinion on these matters. We have decided that the issues described below constitute the key audit
matters that must be included in our report.
Impairment of Long-Lived Assets
The Entity has determined that the smallest cash generating units are its stores. It has developed
financial and operating performance indicators for each of its stores and performs an annual study
to identify indications of impairment. If necessary, it also performs an impairment analysis according
to IAS 36, Impairment of Assets (“IAS 36”), in which discounted future cash flows are calculated to
ascertain whether the value of assets has become impaired. However, a risk exists whereby the
assumptions utilized by management to calculate future cash flows may not be fair based on current
conditions and those prevailing in the foreseeable future.
The audit procedures we applied to cover the risk of the impairment of long-lived assets include the
following:
The application of internal control and substantive tests, in which we performed a detailed review
of projected income and expenses and, on this basis, discounted future cash flows. We also verified,
according to our knowledge of the business and historical audited information, the regularization of
any nonrecurring effect, so as to avoid considering these effects in the projections. We evaluated the
fairness of the discount rate utilized by management, for which purpose we requested support from
our firm’s experts. The results derived from the application of our audit tests were reasonable.
As discussed in Note 4m to the consolidated financial statements, the Entity has recorded an amount
of $220,000 (thousand) for impairment as of December 31, 2020.
Goodwill and Other Intangible Assets
Given the importance of the goodwill balance and continued economic uncertainty, when necessary,
it is important to ensure that goodwill is adequately reviewed to identify potential impairment.
The determination as to whether the book value of goodwill is recoverable requires the Entity’s
management to make significant estimates regarding future cash flows, discount rates and growth
based on its opinion regarding future business perspectives.
In our capacity as auditors, we have analyzed the assumptions utilized in the impairment model,
specifically including cash flow projections, discount rates and long-term rate growth. The key
assumptions used to estimate cash flows in the Entity’s impairment tests are those related to the
growth of revenues and the operating margin.
Our fair value valuation specialists assisted us by preparing an independent evaluation of the
discount rates and methodology used to prepare the impairment testing model, together with the
utilized market multiple estimates. We also tested the completeness and accuracy of the impairment
model.
The results of our audit tests were reasonable and we agree that the utilized assumptions, including
the discount rate and the goodwill impairment amount recorded for the year, are appropriate.
Information Other Than the Consolidated Financial Statements and Independent Auditors’ Report
The management is responsible for the other information. The other information includes the
information included in the annual report (but does not include the consolidated financial
statements, nor our audit report) that the Entity is obliged to prepare in accordance with the General
Provisions Applicable to Issuers and other Market Participants of Securities in Mexico. The annual
report is expected to be available for our reading after the date of this audit report.
Our opinion regarding the consolidated financial statements does not cover the other information
and we do not give any assurance in this regard.
In relation to our audit of the consolidated financial statements, our responsibility will be to read
the annual report and other information, when it is available, and when we do so, consider whether
the other information contained therein is materially inconsistent with the consolidated financial
statements or our knowledge obtained during the audit, or that appears to contain a material error.
If, based on the work we have carried out, we conclude that there is a material error in the other
information; we would have to report it in the declaration on the annual report required by the
170
171
Informe Global 2020
National, Banking and Securities Commission and those responsible for the Entity’s government.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the accompanying
consolidated financial statements in accordance with IFRSs, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Entity or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s consolidated financial
reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with ISA’s, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
•
Identify and asses the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Entity’s internal control.
•
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management´s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Entity’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditors’ report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Entity to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provided the Entity’s corporate governance officers with a declaration to the effect that we
have fulfilled applicable ethical requirements regarding our independence and have reported all the
relations and other issues that could be reasonably be expected to affect our independence and,
when applicable, the respective safeguards.
The issues we have reported to the Entity’s governance officers include the matters that we consider
to have the greatest significance for the audit of the consolidated financial statements of the current
period and which, accordingly, are classified as key audit matters. We have described these matters
in this audit report, unless legal or regulatory provisions prevent them from being disclosed or, under
extremely infrequent circumstances, we conclude that a given matter should be excluded from
our report because we can fairly expect that the resulting adverse consequences will exceed any
possible benefits as regards the public interest.
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Member of Deloitte Touche Tohmatsu Limited
C.P.C. Juan Carlos Reynoso Degollado
Mexico City, Mexico
April 14, 2021
172
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Global Report 2020 Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated Statements of Financial Position
At December 31, 2020,2019 and 2018
(Figures in thousands of Mexican pesos)
Assets
Current assets:
Cash and cash equivalents
Customers, net
Value-added tax and other recoverable
taxes
Other accounts receivable
Inventories
Non-current assets classified as held
for sale
Advance payments
Total current assets
Long-term assets:
Guarantee deposits
Investment in shares of associated
companies
Store equipment, leasehold improvements
and property, net
Right of use assets
Intangible assets, net
Deferred income taxes
Total long-term assets
Total assets
Notes
2020
2019
7
8
9
10
$
$
3,932,409
890,484
1,274,055
730,291
1,617,570
-
328,034
8,772,843
2,568,771
764,902
338,597
682,319
1,779,646
52,546
289,885
6,476,666
$
2018
(Restated)
1,987,857
582,135
286,360
211,086
2,120,208
70,340
412,676
5,670,662
1,789,833
753,850
863,512
17
13
11
14 and
19
23
90,110
85,471
14,296
15,879,778
16,692,801
18,960,250
23,423,275
21,192,657
-
28,816,687
27,375,209
27,779,352
4,665,412
74,665,095
3,835,593
69,935,581
2,867,571
50,484,981
$
83,437,938
$
76,412,247
$
56,155,643
Current liabilities:
Current maturities of long-term debt
Current obligation under finance leases
Debt instruments
Suppliers
Factoring of suppliers
Accounts payable to creditors
Accrued expenses and employee benefits
Option to sell the non-controlling interest
Total current liabilities
Long-term liabilities:
Long-term debt, not including current maturities
Obligation under finance leases
Debt instruments
Other liabilities
Deferred income taxes
Employee retirement benefits
Total long-term liabilities
Total liabilities
Stockholders’ equity:
Capital stock
Premium on share issue
Retained earnings
Reserve for repurchase of shares
Reserve for obligation under put option of non-controlling
interest
Other comprehensive income items
Stockholders’ equity attributable to the controlling interest
Non-controlling interest
Total stockholders’ equity
Notes
2020
2019
2018
(Restated)
20
12
$
24,233,053
4,207,633
7,979,149
2,949,829
654,115
2,834,150
4,279,180
2,701,407
49,838,516
-
-
21,092,417
265,050
4,364,054
244,056
25,965,577
75,804,093
478,749
8,676,827
(683,700)
660,000
(2,013,801)
(814,676)
6,303,399
1,330,446
7,633,845
$
$
-
-
305,668
3,915,338
2,327,048
889,046
2,234,461
3,278,798
2,586,553
6,799
2,290,788
757,976
2,326,156
4,239,559
2,304,864
15,255,223
2,506,006
14,713,837
17,102,448
19,542,694
7,973,765
416,663
4,365,095
213,797
49,614,462
64,869,685
478,749
8,670,873
2,551,874
660,000
(2,013,801)
(766,696)
9,580,999
1,961,563
11,542,562
16,040,204
284,375
6,983,244
758,053
3,772,048
151,988
27,989,912
42,703,749
478,749
8,444,420
3,906,447
660,000
(2,013,801)
97,337
11,573,152
1,878,742
13,451,894
22
20
12
21
23
24
26
22 and
26
27
Total liabilities and stockholders’ equity
$
83,437,938
$
76,412,247
$
56,155,643
See accompanying notes to the consolidated financial statements.
174
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Global Report 2020
Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated Statements of Income
For the years ended December 31, 2020, 2019 and 2018
(Figures in thousands of Mexican pesos)
Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated statements of other comprehensive income
Consolidated statements of other comprehensive income
For the years ended December 31, 2020, 2019 and 2018
(Figures in thousands of Mexican pesos)
2020
2019
2018
$
38,495,420
11,454,884
$
58,154,617
17,164,021
$
46,156,590
14,187,508
Assets
Current assets:
Cash and cash equivalents
Customers, net
Value-added tax and other recoverable
taxes
Other accounts receivable
Inventories
Non-current assets classified as held
for sale
Advance payments
Total current assets
Notes
2020
2019
7
8
9
10
$
$
3,932,409
890,484
1,274,055
730,291
1,617,570
-
328,034
8,772,843
2,568,771
764,902
338,597
682,319
1,779,646
52,546
289,885
6,476,666
$
2018
(Restated)
1,987,857
582,135
286,360
211,086
2,120,208
70,340
412,676
5,670,662
Note
29
30
11,
13
and
14
Continuing operations
Net sales
Cost of sales
Depreciation and amortization
Employee benefits
Services
Advertising
Royalties
Repair and maintenance
Supplies
Distribution
Other operating expenses
(Loss) operating profit
Interest income
Interest expenses
Changes in the fair value of financial
instruments
Exchange loss (gain), net
22
Equity in results of associated companies
17
(Loss) income before income taxes
(Profit) income taxes
23
Consolidated net (loss) income
from continuing operations
Net (loss) income for the year
attributable to:
Controlling interest
Non-controlling interest
Earnings per share:
Basic and diluted net earnings
per share from continuing and
discontinued operations (cents per
share)
Basic and diluted net earnings per
share from continuing operations
(cents per share)
8,435,190
12,138,673
2,004,405
1,398,352
1,124,108
866,926
765,373
521,046
1,303,972
(1,517,509)
(118,987)
3,225,511
456,548
11,318
3,574,390
(2,647)
(5,094,546)
(1,199,088)
8,046,665
16,044,061
2,872,443
2,026,539
1,779,165
1,080,830
928,544
613,309
3,028,149
4,570,891
(101,168)
3,123,023
(201,142)
29,083
2,849,796
3,114,728
11,557,626
2,533,938
1,644,825
1,460,437
923,279
852,515
644,022
5,944,126
3,293,586
(56,526)
1,627,938
(114,806)
(636)
1,455,970
(942)
-
1,720,153
635,420
1,837,616
698,294
1,139,322
953,251
186,071
$
$
$
$
$
$
(3,895,458)
$
1,084,733
(3,235,574)
(659,884)
$
$
926,669
158,064
28
$
(3.86)
$
1.11
$
1.14
See accompanying notes to the consolidated financial statements.
28
$
(3.86)
$
1.11
$
1.14
See accompanying notes to the consolidated financial statements.
176
177
Long-term assets:
Guarantee deposits
1,789,833
753,850
863,512
Investment in shares of associated
companies
17
90,110
85,471
14,296
Store equipment, leasehold improvements
and property, net
Right of use assets
Intangible assets, net
Deferred income taxes
Total long-term assets
Total assets
13
11
14 and
19
23
15,879,778
16,692,801
18,960,250
23,423,275
21,192,657
-
28,816,687
27,375,209
27,779,352
4,665,412
74,665,095
3,835,593
69,935,581
2,867,571
50,484,981
$
83,437,938
$
76,412,247
$
56,155,643
Global Report 2020
Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
For the years ended December 31, 2020, 2019 and 2018
(Figures in thousands of Mexican pesos)
Contributed capital
Retained earnings
Other comprehensive income items
Capital
stock
Premium on
issuance
of share
Reserve for
repurchase
of shares
Reserve for
obligation under
put option of
non-controlling
interest
Legal
reserve
Retained
earnings
Inflation
effect
Valuation of
financial
instruments
Cumulative
translation
adjustment
Remeasurement
of defined
benefit
obligation
Total
controlling
interest
Non-
controlling
interest
Total stock
holders’
equity
Balances at January 1, 2018
$
478,749
$
8,223,224
$
660,000
$
(2,673,053)
$
100,736
$
3,506,551
$ -
$
(211,766)
$
(538,668)
$
(64,213)
$
9,481,560
$
1,121,566
$ 10,603,126
Repurchase of shares (Note 26a)
-
(152,204)
-
-
-
-
-
-
-
-
(152,204)
-
(152,204)
Sales of shares (Note 26a)
Dividend paid (Note 26a)
-
-
373,400
-
-
-
-
-
-
-
-
-
(654,091)
-
-
-
-
-
-
-
373,400
-
373,400
(654,091)
(66,052)
(720,143)
Acquisition of business and sale option
for uncontrolled participation (Note 26)
Other movements
Comprehensive income
-
-
-
-
-
-
-
-
-
659,252
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
659,252
-
953,251
545,766
149,109
190,222
26,887
1,865,235
613,029
24,128
186,071
1,272,281
24,128
2,051,306
Balances at December 31, 2018
478,749
8,444,420
660,000
(2,013,801)
100,736
3,805,711
545,766
(62,657)
(348,446)
(37,326)
11,573,152
1,878,742
13,451,894
Effect of change in accounting policy for
initial application of IFRS 16
Sales of shares
(Note 26a)
Other movements (Note 27)
Comprehensive income
-
-
-
-
-
(2,281,242)
-
-
-
-
(2,281,242)
-
(2,281,242)
-
-
-
226,453
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
226,453
-
-
926,669
313,132
12,686
(1,141,069)
(48,782)
62,636
(75,243)
158,064
226,453
(75,243)
220,700
Balances at December 31, 2019
478,749
8,670,873
660,000
(2,013,801)
100,736
2,451,138
858,898
(49,971)
(1,489,515)
(86,108)
9,580,999
1,961,563
11,542,562
Repurchase of shares (Note 26a)
Other movements (Note 27)
Comprehensive income
-
-
-
5,954
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,954
-
-
28,767
5,954
28,767
(3,235,574)
263,736
(202,333)
(131,277)
21,894
(3,283,554)
(659,884)
(3,943,438)
Balances at December 31, 2020
$
478,749
$
8,676,827
$
660,000
$
(2,013,801)
$
100,736
$
(784,436)
$
1,122,634
$
(252,304)
$
(1,620,792)
$
(64,214)
$
6,303,399
$
1,330,446
$
7,633,845
See accompanying notes to the consolidated financial statements.
178
179
Global Report 2020
Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2020, 2019 and 2018
(Figures in thousands of Mexican pesos)
Cash flows from operating activities:
Consolidated net income
Adjustment for:
Income taxes
Equity in results of associated
companies
Interest expense
Interest income
Disposal of store equipment,
leasehold improvements and
property
Impairment goodwill
19
Profit on sale of fixed assets
Changes in the fair value of financial
instruments
11,13
and
14
Depreciation and amortization
Changes in working capital:
Customers
Other accounts receivable
Inventories
Advance payments
Suppliers
Factoring of suppliers
Accrued expenses and employee
benefits
Income taxes paid
Other liabilities
Labor obligations
Net cash flows provided by
operating activities
Note
2020
2019
2018
$
(3,895,458)
$
1,084,733
$
1,139,322
(1,199,088)
635,420
698,294
2,647
3,225,511
(118,987)
324,877
220,000
(178,774)
942
-
3,123,023
(101,168)
1,627,938
(56,526)
1,362,947
32,469
10,994
87,673
-
(70,374)
456,548
(201,142)
(114,806)
8,212,474
7,049,750
8,046,665
13,994,883
3,114,728
6,426,249
(125,582)
(47,972)
162,076
(1,074,132)
622,781
(234,931)
(4,299)
(261,948)
356,210
398,617
(645,479)
131,070
1,251,019
(1,209,205)
(546,667)
(326,440)
61,536
(588,322)
(482,203)
(7,880)
217,292
57,151
57,253
(102,897)
(1,822)
184,879
343,403
(709,011)
539,553
(6,287)
Cash flows from investing activities:
Proceeds from equipment and property
Interest collected
Store equipment, leasehold
improvements and property
Intangible assets
Acquisition in investment in shares of
associated companies
Acquisitions of business, net of cash
acquired
Net cash flows used in
investing activities
Cash flows from financing activities:
Bank loans
Repayments of loans
Issuance of debt instruments
Payments for debt instruments
Interest paid
Dividends paid
Cash received non-controlling stake
Payments for financial leasing
Repurchase of shares
Sigla debt payment
Sales of shares
Net cash flows (used in)
provided by financing
activities
Net increase (decrease) in cash
and cash equivalents
231,320
118,987
82,668
-
101,168
56,526
13
14
(1,778,242)
(403,916)
(3,087,269)
(425,573)
(4,253,226)
(356,929)
(7,286)
(72,117)
(14,296)
1 and
18
-
(1,109,933)
(10,618,697)
(1,839,137)
(4,511,056)
(15,186,622)
10,045,269
(4,703,310)
21
-
-
1,633,890
(2,797,076)
4,000,000
21,515,017
(9,849,731)
-
(3,000,000)
-
(3,225,511)
(3,123,023)
(1,627,938)
-
-
28,767
(4,186,643)
5,954
(75,243)
(4,139,136)
221,400
-
-
-
5,053
(720,143)
637,157
(10,269)
(152,204)
(1,690,050)
373,400
(2,035,474)
(7,274,135)
8,475,239
2,916,827
(103,747)
294,380
Exchange effects on value of cash
(1,553,189)
684,661
153,074
Cash and cash equivalents:
At the beginning of the year
2,568,771
1,987,857
1,540,403
At end of year
$
3,932,409
$
2,568,771
$
1,987,857
6,791,438
11,681,444
7,005,763
See accompanying notes to the consolidated financial statements.
180
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Global Report 2020
Alsea, S.A.B. de C.V. and Subsidiaries
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
(Figures in thousands of Mexican pesos)
1.
Activity, main operations and significant events
Operations
Alsea, S.A.B. de C.V. and Subsidiaries (Alsea or the Entity) was incorporated as a variable income
stock company on May 16, 1997 in Mexico. The Entity’s domicile is Av. Revolución 1267 Int. 20 and
21, Col. Alpes, Alcaldía Álvaro Obregón, C.P. 01040, Mexico City, Mexico.
The Entity was incorporated for a period of 99 years, beginning on the date in which the deed
was signed, which was April 7, 1997.
For disclosure purposes in the notes to the consolidated financial statements, reference made
to pesos, “$” or MXP is for thousands of Mexican pesos, and reference made to dollars is for US
dollars.
Alsea is mainly engaged in operating fast food restaurants “QSR” cafes and casual dining
“Casual Dining”. The brands operated in Mexico are Domino’s Pizza, Starbucks, Burger King, Chili’s
Grill & Bar, P.F. Chang’s, Italianni’s, The Cheese Cake Factory, Vips, El Portón, Corazón de Barro, La
Casa del Comal and Ole Mole. In order to operate its multi-units, the Entity has the support of
its shared service center, which includes the supply chain through Distribuidora e Importadora
Alsea, S.A. de C.V. (DIA), real property and development services, as well as administrative
services (financial, human resources and technology). The Entity operates the Burger King,
P.F. Chang’s, Chili’s Grill & Bar and Starbucks brands in Chile. In Argentina, Alsea operates the
Burger King, and Starbucks brands. In Colombia, Alsea operates the Domino’s Pizza, Starbucks,
P.F. Chang’s and the Archie’s brands. In Uruguay, it operates the Starbucks brand. In Spain,
Alsea operates the brands Foster’s Hollywood, Burger King, Domino’s Pizza, VIPS, VIPS Smart,
Foster’s Hollywood Street, Starbucks, Ginos, Fridays and Wagamama and until mid-2020 Cañas
y Tapas, and from January and February 2020, Alsea operates the Starbucks brand in France,
Netherlands, Belgium and Luxembourg.
Significant events
a.
Implications resulted from COVID-19 – Net sales in 2020 decreased by 33.8% to $38,495
million pesos, compared to $58,155 million pesos the previous year. This decrease is mainly
due to the impact of the contingency related to the COVID-19 pandemic, which affected
both the number of units in operation, as well as the trend of consumption and changes
in purchasing habits. During the fourth quarter of the year, there was a recovery in sales in
Mexico and South America compared to the third quarter of 2020, reporting growth of 21%
and 36%, respectively. Europe declined by 1%, as a result of health restrictions implemented
due to the spread of the infection.
EBITDA in 2020 decreased 45.2% to reach $6,918 million pesos, compared to $12,618 million
pesos the previous year. The decrease in EBITDA of 5.7 billion pesos was mainly due to
the decrease in the generation of EBITDA in all geographies where Alsea has a presence,
affected by the implementation of contingency measures by the COVID-19 pandemic.
In the fourth quarter of the year, resulting from the recovery in sales and savings
generated, adjusted EBITDA (store level) increased by 146% in Mexico, 68% in Europe
and 119% in South America in comparison to 3Q20. In all the geographies the Entity
has managed to reopen more stores. At the end of the year, they have in operation
approximately 88% of the stores, operating under home delivery schemes, deliveries at the
counter to take away and with on-site service implementing a limited capacity, while the
remaining 12% remains closed.
Alsea continues with agreements reached with all banks, with the aim of suspending
(financial constraints) from 29 June 2020 to 30 June 2021, the commitments originally
made to banks that, in the event of the impacts of the pandemic, have been affected
(mainly those related to the gross leverage index and interest hedging index) , thus being
in a better position to deal with the situation arising from COVID-19.
b.
c.
Alsea receives liquidation letter - On February 14, 2020, Alsea informs that the Tax
Administration Service (SAT) carried out a review of the fiscal aspects related to the
purchase operation of the Vips restaurant division from Wal-Mart de México, S.A.B. de
C.V. “Walmex” carried out in 2014. The SAT issued a liquidation document in which Alsea is
required to pay taxes for alleged income from the acquisition of goods, which amounts to
$3,881 million. This amount includes upgrade, surcharges and penalty. On March 23, 2020,
Alsea filed an Administrative Appeal with the tax authorities, which is under review.
Alsea agrees to obtain a waiver in its credit agreements - On July 2, 2020, the Entity
has reached agreements with all the banks with which it has a relationship, to negotiate
various terms in their credit agreements, in order to suspend from June 29, 2020 to June
30, 2021, the commitments originally assumed with the banks that, due to the impacts of
the pandemic, have been affected (mainly those related to the gross leverage ratio and
the interest coverage index), thus achieving better conditions to face the situation derived
from COVID-19.
Derived from the agreements, the cost of interest and commissions will be temporarily
increased during the suspension period.
Additionally, Alsea has agreed with the banks, taking care at all times of the Entity’s
liquidity, to maintain a minimum level of Capex that allows ensuring the continuity of its
priority strategic projects and the operation of its restaurants in optimal conditions, as
well as achieving growth organic estimated between 80 and 90 corporate units by 2021.
In addition, Alsea will have the possibility of accessing additional debt, which will allow the
Entity to have the ability to respond to any liquidity need during this contingency period.
Similarly, focusing on the Company’s liquidity, the existing short-term credit agreements at
182
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Global Report 2020 the end of May 2020 have been refinanced, extending the payment commitments to June
30, 2021.
On April 5, 2021, Alsea has negotiated with all its relationship banks to extend the
suspension of the computation of certain covenants in their credit contracts, (primarily
those related to the gross leverage ratio and the interest coverage ratio) effective from
April 1, 2021 to June 30, 2022. This puts Alsea in a stronger position to continue facing the
impact of the COVID-19 pandemic and to ensure the continuity of its priority strategic
projects, the operation of its restaurants in optimal conditions, as well as the continued
organic growth of the Company.
In addition, Alsea has assumed the following commitments during the aforementioned
period, which will be reviewed with the banks on a monthly basis:
•
•
•
•
Maximum indebtedness:
-
-
The debt that the company has in Mexican pesos should not exceed 19.4 billion
Mexican pesos or its equivalent in U.S. dollars or Chilean pesos.
The debt that the company has in euros must not exceed 615 million euros or
its equivalent in U.S. dollars or Chilean pesos.
Minimum liquidity:
-
During this period, the company agrees to maintain a minimum liquidity level
of 3 billion pesos.
Minimum consolidated stockholders’ equity:
-
During this period, the company must maintain a minimum consolidated
stockholders’ equity of 6.9 billion pesos.
Capital expenditure (Capex):
-
The Company agrees not to exceed 800 million pesos in capital expenditure
per quarter during the established period.
The Entity’s management is in the process of formalizing the contractual extension of the
term of its short-term loan contracts to renegotiate the maturities that it will have during
2021, which will be formally approved during May 2021.
d.
Development of the Starbucks brand in Netherlands, Belgium and Luxembourg – In
February 2019, Alsea executed a development contract with Starbucks Coffee Company
to obtain the full license and acquire Starbucks corporate store operations in Netherlands,
Belgium and Luxembourg. This transaction resulted in the acquisition by Alsea of 13
corporate units in Netherlands, as well as the rights to provide services to licensed
operators in those countries (95 licensed stores in these territories), while operating
and generating expansion opportunities for Starbucks stores in those countries. Alsea
concluded the purchase process on February 25, 2019.
e.
f.
g.
h.
i.
Transfer of operations and development rights of the California Pizza Kitchen (CPK)
brand – In May 2019, as follow-up on the portfolio restructuring strategy, Alsea reached
an agreement with CPK to divest the brand under an asset lease scheme and transfer
operating and development rights to Opcal, S.A. de C.V. as of May 8, 2019, while also
assuming the operation of the 13 corporate units, the rights to 2 sub-franchises at airports,
together with the rights to develop and build the CPK brand in Mexico.
Transfer of operations and development rights of the P.F. Chang’s brand in Brazil – In
June 2019, as follow-up on the portfolio restructuring strategy and to seek efficiencies,
Alsea executed an agreement with Banco de Franquias for the incorporation of a joint
venture involving P.F. Chang’s in Brazil as of June 2019. As part of this agreement, Banco
de Franquias will manage the operation of the P.F. Chang’s units in that country within the
joint venture, while also developing new units.
In November 2020, Alsea concluded an agreement for the sale of the P.F. Chang’s in Brazil
to Banco de Franquicias mentioned in the previous paragraph. As part of this agreement,
Alsea will cease to operate the brand in that Country. This operation is aligned with the
portfolio restructuring strategy and search for its efficiencies to increase the profitability of
the company.
Transfer of operations and development rights of the Burger King brand in Colombia
and the P.F. Chang’s brand in Argentina – In August 2019, Alsea executed an agreement
to sell the Burger King business in Colombia and the P.F. Chang’s business in Argentina.
As part of this agreement, Alsea will cease to operate its 16 Burger King units in Colombia
and 1 unit in Argentina. This transaction is aligned with the portfolio restructuring strategy
and to seek efficiencies to enhance the company’s profitability.
Acquisition of Sigla, S.A. - In October 2018, through its subsidiary Food Service Project, S.L.
(Grupo Zena), Alsea entered into a purchase and sale agreement whereby, subject to the
conditions contained therein, it acquired from the majority stockholders and founders, led
by the Arango family and ProA Capital Iberian Buyout Fund II, F.C.R., a Spanish company,
100% of the common stock of the company known as Sigla, S.A., established under the
laws of Spain and which, in conjunction with its subsidiaries is known as Grupo VIPS, and
is engaged in the exploitation of multibrand restaurant establishments in Spain of the
brands VIPS, VIPS Smart, Starbucks, GINOS, Fridays, and Wagamama, for the price of €471
million after debt (equivalent to MX $10,618,697) (hereinafter the acquisition price). Alsea
consolidates the financial information of Grupo VIPS as of December 27, 2018, when the
acquisition was formalized (see accounting effects in Note 18).
The business of Grupo VIPS comprises more than 400 establishments between corporate
and franchises, including a total of six brands, which address the segments of Casual
Meals, Fast-Casual, Family Restaurants and Cafeterias in Spain, Portugal and Andorra.
Development of the Starbucks brand in France - In December 2018, Alsea entered into
a development contract with Starbucks Coffee Company to obtain the total license and
acquire the operations of Starbucks corporate and stores in France.
This transaction resulted in Alsea acquiring 170 units (70 corporate and 100 franchises),
and the rights to operate, sub-franchise and generate expansion opportunities for
Starbucks stores in France. Alsea concluded the purchase process on January 27, 2019.
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Global Report 2020 2.
Basis of presentation
Restatement of the consolidated financial statements 2018
During December 2019, the period allowed by IFRS 3, Business Combinations, Alsea concluded
the valuation of the acquisitions of Grupo VIPS mentioned in Note 1 to the consolidated finan-
cial statements. The final valuation resulted in changes to the preliminary accounting of such
acquisitions; the changes are presented in Note 18. Following is a summary of the effects of the
adjustments to the consolidated statements of financial position:
Concept
Figures previously
reported
Valuation adjustment
Balance as of
December 31, 2019
(As adjusted)
$
814,032
404,969
$
(231,897)
7,707
(1)
(1)
$
582,135
412,676
3.
a.
Application of new and revised International Financial Reporting Standards
Application of new and revised International Financing Reporting Standards (“IFRSs” or
“IAS”) and interpretations that are mandatorily effective for the current year
In the current year, the Entity has applied a number of amendments to IFRSs issued by the
International Accounting Standards Board (“IASB”) that are mandatorily effective for an ac-
counting period that begins on or after January 1, 2020.
Impact of the initial application of Interest Rate Benchmark Reform amendments to IFRS 9,
IAS 39 and IFRS 7.
In September 2019, the IASB issued Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS
39 and IFRS 7). These amendments modify specific hedge accounting requirements to allow
hedge accounting to continue for affected hedges during the period of uncertainty before the
hedged items or hedging instruments affected by the current interest rate benchmarks are
amended as a result of the on-going interest rate benchmark reforms.
These modifications have not implied changes for the Entity since it has no exposure to IBOR
reference interest rates.
Current assets:
Customers, net
Advance payments
Long – term assets:
Guarantee deposits
Store equipment, leasehold
improvements and property,
net
Intangible assets, net
Deferred income taxes
Current liabilities:
Current maturities of long –
term debt
Suppliers
Long – term liabilities:
Long – term debt, not
including current maturities
Other liabilities
Deferred income taxes
678,260
185,252
(1)
863,512
Impact of the initial application of Covid-19-Related Rent Concessions Amendment to IFRS
16
19,167,225
25,822,831
2,764,884
(206,975)
1,956,521
102,687
(1)
(1)
(2)
18,960,250
27,779,352
2,867,571
$
49,652,201
$
1,813,295
$
51,465,496
$
2,588,266
4,457,901
$
(1,713)
159,043
(1)
(1)
$
2,586,553
4,616,944
16,038,416
802,211
2,073,713
1,788
(44,158)
1,698,335
(1)
(1)
(2)
16,040,204
758,053
3,772,048
$
25,960,507
$
1,813,295
$
27,773,802
In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that
provides practical relief to lessees in accounting for rent concessions occurring as a direct
consequence of COVID-19, by introducing a practical expedient to IFRS 16. The practical expe-
dient permits a lessee to elect not to assess whether a COVID-19-related rent concession is
a lease modification. A lessee that makes this election shall account for any change in lease
payments resulting from the COVID-19-related rent concession the same way it would ac-
count for the change applying IFRS 16 if the change were not a lease modification.
The practical expedient applies only to rent concessions occurring as a direct consequence of
COVID-19 and only if all of the following conditions are met:
a)
b)
c)
The change in lease payments results in revised consideration for the lease
that is substantially the same as, or less than, the consideration for the lease
immediately preceding the change;
Any reduction in lease payments affects only payments originally due on
or before 30 June 2021 (a rent concession meets this condition if it results
in reduced lease payments on or before 30 June 2021 and increased lease
payments that extend beyond 30 June 2021); and
There is no substantive change to other terms and conditions of the lease.
In the current financial year, the Group has applied the amendment to IFRS 16 (as issued by
the IASB in May 2020) in advance of its effective date in the consolidated statement of income
under other operating expenses.
Impact on accounting for changes in lease payments applying the exemption
Adjustments explanations:
(1)
Related to the net effect of the valuation at fair value of the fixed assets, intangible assets, accrued expenses and
employee benefits of Grupo VIPS (see Note 18).
(2)
Related to the effect in income taxes due to the increase in the fair value of fixed assets and intangible assets by
$1,698,335, and the effect of the assets deferred tax pending register by $102,687
186
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Global Report 2020
The Entity has applied the practical expedient retrospectively to all rent concessions that
meet the conditions in IFRS 16:46B, and has not restated prior period figures.
The Entity has benefited from reductions in the rental payment amounts for leases. The
waiver of lease payments of $1,596,496 has been accounted for as a negative variable
lease payment in profit or loss. The Entity has derecognized the part of the lease liability
that has been extinguished by the forgiveness of lease payments, consistent with the
requirements of IFRS 9:3.3.1.
The Entity has negotiated with its lessors different discount percentages depending on
the impact on the flow of customers suffered by each brand operated. The discount
percentages are periodically reviewed and; in some cases, readjusted as a result of
reductions in operating hours, limited capacity and/or restrictions on the opening of
restaurants in shopping malls, mainly. The Entity continued to recognise interest expense
on the lease liability.
Impact of the initial application of other new and amended IFRS Standards that are
effective for the fiscal years and reporting periods beginning on or after January 1, 2020
In the current year, the Group has applied the below amendments to IFRS Standards and
Interpretations issued by the Board that are effective for an annual period that begins on
or after 1 January 2020. Their adoption has not had any material impact on the disclosures
or on the amounts reported in these consolidated financial statements.
During the current year, the Entity applied a series of amendments to the Standards
and Interpretations of IFRS issued by the International Accounting Standards Board
(IASB), which are effective for the annual period starting on or as of January 1, 2020. Their
adoption did not have any material effects on the disclosures or amounts recorded in
these consolidated financial statements.
Amendments
The Entity has adopted the amendments included in
to References
to the
Conceptual
Framework in
IFRS Standards
Amendments to References to the Conceptual Framework
in IFRS Standards for the first time in the current year. The
amendments include consequential amendments to affected
Standards so that they refer to the new Framework. Not all
amendments, however, update those pronouncements with
regard to references to and quotes from the Framework so
that they refer to the revised Conceptual Framework. Some
pronouncements are only updated to indicate which version
of the Framework they are referencing to (the IASC Framework
adopted by the IASB in 2001, the IASB Framework of 2010, or the
new revised Framework of 2018) or to indicate that definitions
in the Standard have not been updated with the new
definitions developed in the revised Conceptual Framework.
The Standards, which are amended, are IFRS 2, IFRS 3, IFRS 6, IFRS
14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC
22, and SIC-32.
Amendments
to IFRS 3
Definition of a
business
The Entity has adopted the amendments to IFRS 3 for the first
time in the current year. The amendments clarify that while
businesses usually have outputs, outputs are not required
for an integrated set of activities and assets to qualify as a
business. To be considered a business an acquired set of
activities and assets must include, at a minimum, an input and
a substantive process that together significantly contribute to
the ability to create outputs.
The amendments remove the assessment of whether market
participants are capable of replacing any missing inputs
or processes and continuing to produce outputs. The
amendments also introduce additional guidance that helps to
determine whether a substantive process has been acquired.
The amendments introduce an optional concentration test that
permits a simplified assessment of whether an acquired set of
activities and assets is not a business.
Under the optional concentration test, the acquired set of
activities and assets is not a business if substantially all of the
fair value of the gross assets acquired is concentrated in a
single identifiable asset or group of similar assets.
The amendments are applied prospectively to all business
combinations and asset acquisitions for which the acquisition
date is on or after 1 January 2020.
Amendments
to IAS 1 and IAS
8 Definition of
material
The Group has adopted the amendments to IAS 1 and IAS 8 for
the first time in the current year. The amendments make the
definition of material in IAS 1 easier to understand and are not
intended to alter the underlying concept of materiality in IFRS
Standards. The concept of ‘obscuring’ material information
with immaterial information has been included as part of the
new definition.
The threshold for materiality influencing users has been
changed from ‘could influence’ to ‘could reasonably be
expected to influence’. The definition of material in IAS 8 has
been replaced by a reference to the definition of material in
IAS 1.
In addition, the IASB amended other Standards and the
Conceptual Framework that contain a definition of ‘material’ or
refer to the term ‘material’ to ensure consistency.
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Global Report 2020 New and revised IFRS Standards in issue but not yet effective
At the date of authorization of these financial statements, the Group has not applied the
following new and revised IFRS Standards that have been issued but are not yet effective:
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
Amendments to IFRS 3
Reference to the Conceptual Framework
Annual Improvements to
Amendments to IFRS 1 First-time Adoption of
IFRS Standards 2018-2020
Cycle
International Financial Reporting Standards, IFRS
9 Financial Instruments, IFRS 16 Leases, and IAS 41
Agriculture
The directors do not expect that the adoption of the Standards listed above will have a
material impact on the financial statements of the Group in future periods, except as
noted below:
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
The amendments to IAS 1 affect only the presentation of liabilities as current or non-
current in the statement of financial position and not the amount or timing of recognition
of any asset, liability, income or expenses, or the information disclosed about those items.
The amendments clarify that the classification of liabilities as current or non-current
is based on rights that are in existence at the end of the reporting period, specify that
classification is unaffected by expectations about whether an entity will exercise its right to
defer settlement of a liability, explain that rights are in existence if covenants are complied
with at the end of the reporting period, and introduce a definition of ‘settlement’ to make
clear that settlement refers to the transfer to the counterparty of cash, equity instruments,
other assets or services.
The amendments are applied retrospectively for annual periods beginning on or after 1
January 2023, with early application permitted.
Amendments to IFRS 3 – Reference to the Conceptual Framework
The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead
of the 1989 Framework. They also add to IFRS 3 a requirement that, for obligations within
the scope of IAS 37, an acquirer applies IAS 37 to determine whether at the acquisition
date a present obligation exists as a result of past events. For a levy that would be
within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the
obligating event that gives rise to a liability to pay the levy has occurred by the acquisition
date.
Finally, the amendments add an explicit statement that an acquirer does not recognise
contingent assets acquired in a business combination.
The amendments are effective for business combinations for which the date of acquisition
is on or after the beginning of the first annual period beginning on or after 1 January
2022. Early application is permitted if an entity also applies all other updated references
(published together with the updated Conceptual Framework) at the same time or earlier.
Annual Improvements to IFRS Standards 2018–2020
The Annual Improvements include amendments to four Standards.
IFRS 9 Financial Instruments
The amendment clarifies that in applying the ‘10 per cent’ test to assess whether to
derecognize a financial liability, an entity includes only fees paid or received between the
entity (the borrower) and the lender, including fees paid or received by either the entity or
the lender on the other’s behalf.
The amendment is applied prospectively to modifications and exchanges that occur on
or after the date, the entity first applies the amendment.
The amendment is effective for annual periods beginning on or after 1 January 2022, with
early application permitted.
IFRS 16 Leases
The amendment removes the illustration of the reimbursement of leasehold
improvements. As the amendment to IFRS 16 only regards an illustrative example, no
effective date is stated.
4.
Significant accounting policies
a.
Statement of compliance
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards released by IASB.
The entity’s management has, at the time of approving the financial statements, a
reasonable expectation that the Entity has the necessary resources to continue operating
in the foreseeable future. Therefore, they continue to adopt the Going Concern accounting
basis when preparing the financial statements.
b.
Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis
except for the revaluation of certain properties and financial instruments that are
measured at revalued amounts or fair values at the end of each reporting period, as
explained in the accounting policies below.
i.
Historical cost
Historical cost is generally based on the fair value of the consideration given in
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Global Report 2020 exchange for goods and services.
ii.
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability,
the Entity takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or
liability at the measurement date.
Fair value for measurement and/or disclosure purposes in these consolidated
financial statements is determined on such a basis, except for share-based
payment transactions that are within the scope of IFRS 2, leasing transactions that
are within the scope of IFRS 16, and measurements that have some similarities to fair
value but are not fair value, such as net realizable value in IAS 2 or value in use in IAS
36.
In addition, for financial reporting purposes, fair value measurements are
categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
•
•
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that
are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
iii.
Re-expression of financial statements
As of July 1, 2018, accumulated inflation of the last three years in Argentina exceeded
levels of 100%, for which reason the Argentine peso was classified as a currency in
a hyperinflationary economic environment. As a result, the financial statements of
the subsidiaries in that country, whose functional currency is the Argentine peso,
have been re-expressed to adopt the requirements of International Accounting
Standard 29, Financial Information in Hyperinflationary Economies, (IAS 29) and
have been consolidated in accordance with the requirements of IAS 21, Effects of
Variances in the Exchange Rates of the Foreign Currency. The purpose of applying
such requirements is to consider the changes in the general purchasing power
of the Argentine peso and thus present the financial statements in the current
measurement unit at the date of the statement of financial position. Argentina, for
purposes of its financial reporting, updated its figures using the country’s inflation
rate based on official indexes. The financial statements before the re-expression
were prepared using the historical costs method.
c.
Basis of consolidation of financial statements
The consolidated financial statements incorporate the financial statements of Alsea, S.A.B.
de C.V. and entities controlled by the Entity. Control is obtained when the Entity:
•
•
•
Has power over the investee;
Is exposed, or has rights, to variable returns from its involvement with the investee;
and
Has the ability to use its power to affect its returns.
The Entity reassesses 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 listed
above.
When the Entity has less than a majority of the voting rights of an investee, it has power
over the investee when the voting rights are sufficient to give it the practical ability to
direct the relevant activities of the investee unilaterally.
The Entity considers all relevant facts and circumstances in assessing whether or not the
Entity’s voting rights in an investee are sufficient to give it power, including:
•
•
•
•
The size of the Entity’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;
Potential voting rights held by the Entity, other vote holders or other parties;
Rights arising from other contractual arrangements; and
Any additional facts and circumstances that indicate that the Entity has, or does not
have, the current ability to direct the relevant activities at the time that decisions
need to be made, including voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Entity obtains control over the subsidiary
and ceases when the Entity loses control of the subsidiary. Specifically, income and
expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated statements of income and other comprehensive income from the date the
Entity gains control until the date when the Entity ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the
owners of the Entity and to the non-controlling interests. Total comprehensive income of
subsidiaries is attributed to the owners of the Entity and to the non-controlling interests
even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Entity’s accounting policies.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity
therein. Those interests of non-controlling shareholders that are present ownership
interests entitling their holders to a proportionate share of net assets upon liquidation may
initially be measured at fair value or at the non-controlling interests’ proportionate share
of the fair value of the acquiree’s identifiable net assets. The choice of measurement is
made on an acquisition-by-acquisition basis. Other non-controlling interests are initially
measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling
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Global Report 2020 interests is the amount of those interests at initial recognition plus the non-controlling
interests’ share of subsequent changes in equity. All intragroup assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members
of the Entity are eliminated in full on consolidation. Total comprehensive income of the
subsidiaries is attributed to the owners of the Company and to the non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between the members of the Group are eliminated on consolidation.
Changes in the Entity’s ownership interests in existing subsidiaries
Changes in the Entity’s ownership interests in subsidiaries that do not result in the Entity
losing control over the subsidiaries are accounted for as equity transactions. The carrying
amounts of the Entity’s interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiaries.
Any difference between the amount by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received is recognized directly in equity and
attributed to owners of the Entity.
When the Entity loses control of a subsidiary, a gain or loss is recognized in profit or loss
and is calculated as the difference between (i) the aggregate of the fair value of the
consideration received and the fair value of any retained interest and (ii) the previous
carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests.
All amounts previously recognized in other comprehensive income in relation to that
subsidiary are accounted for as if the Entity had directly disposed of the related assets
or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another
category of equity as specified/permitted by applicable IFRSs). The fair value of any
investment retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under IAS 39, when
applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
d.
Information by segment
The operating segments are reported consistently with the internal reports prepared to
provide information to the Audit Committee, which is responsible for assisting the Board
of Directors, which is why it is considered the body that makes strategic decisions for the
allocation of resources and the evaluation of the operating segments on the established
platform of Corporate Governance.
e.
Previous fiscal year reclassifications
The financial statements for the year ended December 31, 2019 have been reclassified in
certain items for the adequate presentation of lease liabilities and that the information
can be presented in a comparative way with that used in 2020.
Concept
Figures previously
reported 2019
Reclassifications
Reclassified balance
2019
$
$
Cash and cash equivalents
Customers, net
Other accounts receivable
Guarantee deposits
Current obligation under
finance leases
Suppliers
Accounts payable to creditors
Accrued expenses and
employee benefits
Income taxes
Obligation under finance leases
2,625,389
974,187
473,034
697,232
8,763,668
4,561,509
111,702
2,595,586
571,510
14,694,364
(56,618)
(209,285)
209,285
56,618
(4,848,330)
(2,234,461)
2,122,759
683,212
(571,510)
4,848,330
$
2,568,771
764,902
682,319
753,850
3,915,338
2,327,048
2,234,461
3,278,798
-
19,542,694
i)
ii)
The balance of Current obligation under finance leases for short-term leases was reclassified to Obligation under
finance leases because the review of the lease payments determined that the short-term liability was lower.
The balance of Suppliers was reclassified to Accrued expenses and employee benefits to show only the balances of
suppliers for the acquisition of products.
f.
Financial instruments
Financial assets and financial liabilities are recognized when the Entity becomes a party to
the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of financial
assets and financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets and financial
liabilities at fair value through profit or loss are recognize immediately in profit or loss.
g.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized
on a trade date basis. Regular way purchases or sales are purchases or sales of financial
assets that require delivery of assets within the time frame established by regulation or
convention in the marketplace.
All recognized financial assets are measured subsequently in their entirety at either
amortized cost or fair value, depending on the classification of the financial assets.
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Global Report 2020 Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at
amortized cost:
•
•
The financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.
Debt instruments that meet the following conditions are measured subsequently at fair
value through other comprehensive income (FVTOCI):
•
•
The financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling the financial assets; and
The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.
By default, all other financial assets are measured subsequently at fair value through profit
or loss (FVTPL).
Despite the foregoing, the Entity may make the following irrevocable election / designation
at initial recognition of a financial asset:
The Entity may irrevocably elect to present subsequent changes in fair value of an
equity investment in other comprehensive income if certain criteria are met (see (iii)
below); and
The Entity may irrevocably designate a debt investment that meets the amortized
cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch (see (iv) below).
•
•
(i)
a credit-adjusted effective interest rate is calculated by discounting the estimated
future cash flows, including expected credit losses, to the amortized cost of the debt
instrument on initial recognition.
The amortized cost of a financial asset is the amount at which the financial asset is
measured at initial recognition minus the principal repayments, plus the cumulative
amortization using the effective interest method of any difference between that
initial amount and the maturity amount, adjusted for any loss allowance. The gross
carrying amount of a financial asset is the amortized cost of a financial asset before
adjusting for any loss allowance.
Interest income is recognized using the effective interest method for debt
instruments measured subsequently at amortized cost and at FVTOCI.
For financial assets other than purchased or originated credit-impaired financial
assets, interest income is calculated by applying the effective interest rate to the
gross carrying amount of a financial asset, except for financial assets that have
subsequently become credit-impaired (see below). For financial assets that
have subsequently become credit-impaired, interest income is recognized by
applying the effective interest rate to the amortized cost of the financial asset. If,
in subsequent reporting periods, the credit risk on the credit-impaired financial
instrument improves so that the financial asset is no longer credit-impaired, interest
income is recognized by applying the effective interest rate to the gross carrying
amount of the financial asset.
For purchased or originated credit-impaired financial assets, the Entity recognizes
interest income by applying the credit-adjusted effective interest rate to the
amortized cost of the financial asset from initial recognition. The calculation does
not revert to the gross basis even if the credit risk of the financial asset subsequently
improves so that the financial asset is no longer credit-impaired.
Interest income is recognized in profit or loss and is included in the “finance income
- interest income” line item.
Amortized cost and effective interest method
A financial asset is held for trading if:
The effective interest method is a method of calculating the amortized cost of a
debt instrument and of allocating interest income over the relevant period.
For financial assets other than purchased or originated credit-impaired financial
assets (i.e. assets that are credit-impaired on initial recognition), the effective
interest rate is the rate that exactly discounts estimated future cash receipts
(including all fees and points paid or received that form an integral part of the
effective interest rate, transaction costs and other premiums or discounts) excluding
expected credit losses, through the expected life of the debt instrument, or, where
appropriate, a shorter period, to the gross carrying amount of the debt instrument
on initial recognition. For purchased or originated credit-impaired financial assets,
•
•
•
It has been obtained with the main objective of being sold in the short term; or
On initial recognition, it is part of a portfolio of identified financial instruments
that the Entity manages together and has evidence of a recent pattern of
obtaining profits in the short term; or
It is a derivative (except for derivatives that are contractual financial
guarantees or a designated and effective hedging instrument).
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Global Report 2020 (ii)
Debt instruments classified as at FVTOCI
The corporate bonds held by the Entity are classified as at FVTOCI. Fair value. The corporate
bonds are initially measured at fair value plus transaction costs. Subsequently, changes in the
carrying amount of these corporate bonds as a result of foreign exchange gains and losses
(see below), impairment gains or losses (see below), and interest income calculated using
the effective interest method (see (i) above) are recognized in profit or loss.
The amounts that are recognized in profit or loss are the same as the amounts that
would have been recognized in profit or loss if these corporate bonds had been
measured at amortized cost. All other changes in the carrying amount of these
corporate bonds are recognized in other comprehensive income and accumulated
under the heading of investments revaluation reserve.
When these corporate bonds are derecognized, the cumulative gains or losses
previously recognized in other comprehensive income are reclassified to profit or
loss.
(iii)
Equity instruments designated as at FVTOCI
On initial recognition, the Entity may make an irrevocable election (on an instrument-
by-instrument basis) to designate investments in equity instruments as at FVTOCI.
Designation at FVTOCI is not permitted if the equity investment is held for trading or if
it is contingent consideration recognized by an acquirer in a business combination.
A financial asset is held for trading if:
•
•
•
It has been acquired principally for the purpose of selling it in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments
that the Entity manages together and has evidence of a recent actual pattern
of short-term profit-taking; or
It is a derivative (except for a derivative that is a financial guarantee contract
or a designated and effective hedging instrument).
Investments in equity instruments at FVTOCI are initially measured at fair value plus
transaction costs. Subsequently, they are measured at fair value with gains and
losses arising from changes in fair value recognized in other comprehensive income
and accumulated in the investments revaluation reserve. The cumulative gain or
loss is not being reclassified to profit or loss on disposal of the equity investments;
instead, it is transferred to retained earnings.
Dividends on these investments in equity instruments are recognized in profit or loss
in accordance with IFRS 9, unless the dividends clearly represent a recovery of part
of the cost of the investment. Dividends are included in the ‘finance income’ line item
in profit or loss.
The Entity has designated all investments in equity instruments that are not held for
trading as at FVTOCI on initial application of IFRS 9.
(iv)
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortized cost
or FVTOCI (see (i) to (iii) above) are measured at FVTPL. Specifically:
•
•
Investments in equity instruments are classified as at FVTPL, unless the
Entity designates an equity investment that is neither held for trading nor a
contingent consideration arising from a business combination as at FVTOCI on
initial recognition (see (iii) above).
Debt instruments that do not meet the amortized cost criteria or the FVTOCI
criteria (see (i) and (ii) above) are classified as at FVTPL.
In addition, debt instruments that meet either the amortized cost criteria or the
FVTOCI criteria may be designated as at FVTPL upon initial recognition if such
designation eliminates or significantly reduces a measurement or recognition
inconsistency (so called ‘accounting mismatch’) that would arise from
measuring assets or liabilities or recognizing the gains and losses on them
on different bases. The Entity has not designated any debt instruments as at
FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting
period, with any fair value gains or losses recognized in profit or loss to the extent
they are not part of a designated hedging relationship (see hedge accounting
policy).
The net gain or loss recognized in profit or loss includes any dividend or interest
earned on the financial asset and is included in the ‘other gains and losses’.
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is
determined in that foreign currency and translated at the spot rate at the end of each
reporting period. Specifically;
•
•
For financial assets measured at amortized cost that are not part of a designated
hedging relationship, exchange differences are recognized in profit or loss in the
‘other gains and losses’;
For debt instruments measured at FVTOCI that are not part of a designated hedging
relationship, exchange differences on the amortized cost of the debt instrument
are recognized in profit or loss in the ‘other gains and losses’. Other exchange
differences are recognized in other comprehensive income in the investments
revaluation reserve;
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Global Report 2020 •
•
For financial assets measured at FVTPL that are not part of a designated hedging
relationship, exchange differences are recognized in profit or loss in the ‘other gains
and losses’ line item; and
For equity instruments measured at FVTOCI, exchange differences are recognized in
other comprehensive income in the investments revaluation reserve.
See hedge accounting policy regarding the recognition of exchange differences where
the foreign currency risk component of a financial asset is designated as a hedging
instrument for a hedge of foreign currency risk.
Impairment of financial assets
The Entity recognizes a loss allowance for expected credit losses on investments in debt
instruments that are measured at amortized cost or at FVTOCI, lease receivables, trade
receivables and contract assets, as well as on financial guarantee contracts. The amount
of expected credit losses is updated at each reporting date to reflect changes in credit
risk since initial recognition of the respective financial instrument.
The Entity always recognizes lifetime ECL for trade receivables, contract assets and lease
receivables.
The expected credit losses on these financial assets are estimated using a provision
matrix based on the Entity’s historical credit loss experience, adjusted for factors that are
specific to the debtors, general economic conditions and an assessment of both the
current as well as the forecast direction of conditions at the reporting date, including time
value of money where appropriate.
For all other financial instruments, the Entity recognizes lifetime ECL when there has been
a significant increase in credit risk since initial recognition. However, if the credit risk
on the financial instrument has not increased significantly since initial recognition, the
Entity measures the loss allowance for that financial instrument at an amount equal to
12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible
default events over the expected life of a financial instrument. In contrast, 12-month ECL
represents the portion of lifetime ECL that is expected to result from default events on a
financial
instrument that are possible within 12 months after the reporting date.
(i)
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased
significantly since initial recognition, the Entity compares the risk of a default
occurring on the financial instrument at the reporting date with the risk of a default
occurring on the financial instrument at the date of initial recognition. In making this
assessment, the Entity considers both quantitative and qualitative information that
is reasonable and supportable, including historical experience and forward-looking
information that is available without undue cost or effort.
Forward-looking information considered includes the future prospects of the
industries in which the Entity’s debtors operate, obtained from economic expert
reports, financial analysts, governmental bodies, relevant think-tanks and other
similar organizations, as well as consideration of various external sources of actual
and forecast economic information that relate to the Entity’s core operations.
In particular, the following information is taken into account when assessing whether
credit risk has increased significantly since initial recognition.
•
•
•
•
•
•
An actual or expected significant deterioration in the financial instrument’s
external (if available) or internal credit rating;
Significant deterioration in external market indicators of credit risk for a
particular financial instrument, e.g. a significant increase in the credit spread,
the credit default swap prices for the debtor, or the length of time or the extent
to which the fair value of a financial asset has been less than its amortized
cost;
Existing or forecast adverse changes in business, financial or economic
conditions that are expected to cause a significant decrease in the debtor’s
ability to meet its debt obligations;
An actual or expected significant deterioration in the operating results of the
debtor;
Significant increases in credit risk on other financial instruments of the same
debtor;
An actual or expected significant adverse change in the regulatory, economic,
or technological environment of the debtor that results in a significant
decrease in the debtor’s ability to meet its debt obligations.
Irrespective of the outcome of the above assessment, the Entity presumes that the
credit risk on a financial asset has increased significantly since initial recognition
when contractual payments are more than 30 days past due, unless the Entity has
reasonable and supportable information that demonstrates otherwise.
Despite the foregoing, the Entity assumes that the credit risk on a financial
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Global Report 2020 instrument has not increased significantly since initial recognition if the financial
instrument is determined to have low credit risk at the reporting date. A financial
instrument is determined to have low credit risk if:
(1)
(2)
The financial instrument has a low risk of default,
The debtor has a strong capacity to meet its contractual cash flow obligations
in the near term, and
(3) Adverse changes in economic and business conditions in the longer term may,
but will not necessarily, reduce the ability of the borrower to fulfil its contractual
cash flow obligations.
The Entity considers a financial asset to have low credit risk when the asset
has external credit rating of ‘investment grade’ in accordance with the globally
understood definition or if an external rating is not available, the asset has an
internal rating of ‘performing’. Performing means that the counterparty has a strong
financial position and there are no past due amounts.
For financial guarantee contracts, the date that the Entity becomes a party to the
irrevocable commitment is considered to be the date of initial recognition for the
purposes of assessing the financial instrument for impairment. In assessing whether
there has been a significant increase in the credit risk since initial recognition of a
financial guarantee contracts, the Entity considers the changes in the risk that the
specified debtor will default on the contract.
The Entity regularly monitors the effectiveness of the criteria used to identify whether
there has been a significant increase in credit risk and revises them as appropriate
to ensure that the criteria are capable of identifying significant increase in credit risk
before the amount becomes past due.
(ii)
Definition of default
The Entity considers the following as constituting an event of default for internal
credit risk management purposes as historical experience indicates that financial
assets that meet either of the following criteria are generally not recoverable:
•
•
When there is a breach of financial covenants by the debtor; or
Information developed internally or obtained from external sources indicates
that the debtor is unlikely to pay its creditors, including the Entity, in full (without
taking into account any collateral held by the Entity).
Irrespective of the above analysis, the Entity considers that default has occurred
when a financial asset is more than 90 days past due unless the Entity has
reasonable and supportable information to demonstrate that a more lagging
default criterion is more appropriate.
(iii) Credit-impaired financial assets
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 credit-impaired includes observable
data about the following events:
(a) Significant financial difficulty of the issuer or the borrower;
(b) A breach of contract, such as a default or past due event (see (ii) above);
(c)
(d)
(e)
The lender(s) of the borrower, for economic or contractual reasons relating
to the borrower’s financial difficulty, having granted to the borrower a
concession(s) that the lender(s) would not otherwise consider;
It is becoming probable that the borrower will enter bankruptcy or other
financial reorganization; or
The disappearance of an active market for that financial asset because of
financial difficulties.
(iv) Write-off policy
The Entity writes off a financial asset when there is information indicating that the
debtor is in severe financial difficulty and there is no realistic prospect of recovery,
e.g. when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings, or in the case of trade receivables, when the amounts are
over two years past due, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the
Entity’s recovery procedures, taking into account legal advice where appropriate.
Any recoveries made are recognized in profit or loss.
(v) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of
default, loss given default (i.e. the magnitude of the loss if there is a default) and
the exposure at default. The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-looking information as
described above.
As for the exposure at default, for financial assets, this is represented by the assets’
gross carrying amount at the reporting date; for financial guarantee contracts,
the exposure includes the amount drawn down as at the reporting date, together
with any additional amounts expected to be drawn down in the future by default
date determined based on historical trend, the Entity’s understanding of the
specific future financing needs of the debtors, and other relevant forward-looking
information.
For financial assets, the expected credit loss is estimated as the difference between
all contractual cash flows that are due to the Entity in accordance with the contract
and all the cash flows that the Entity expects to receive, discounted at the original
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Global Report 2020 effective interest rate. For a lease receivable, the cash flows used for determining
the expected credit losses is consistent with the cash flows used in measuring the
lease receivable in accordance with IAS 16, Leases.
For a financial guarantee contract, as the Entity is required to make payments
only in the event of a default by the debtor in accordance with the terms of the
instrument that is guaranteed, the expected loss allowance is the expected
payments to reimburse the holder for a credit loss that it incurs less any amounts
that the Entity expects to receive from the holder, the debtor or any other party.
If the Entity has measured the loss allowance for a financial instrument at an
amount equal to lifetime ECL in the previous reporting period, but determines at
the current reporting date that the conditions for lifetime ECL are no longer met,
the Entity measures the loss allowance at an amount equal to 12-month ECL at the
current reporting date, except for assets for which simplified approach was used.
The Entity recognizes an impairment gain or loss in profit or loss for all financial
instruments with a corresponding adjustment to their carrying amount through
a loss allowance account, except for investments in debt instruments that
are measured at FVTOCI, for which the loss allowance is recognized in other
comprehensive income and accumulated in the investment revaluation reserve,
and does not reduce the carrying amount of the financial asset in the statement of
financial position.
On derecognition of a financial asset measured at amortized cost, the difference between
the asset’s carrying amount and the sum of the consideration received and receivable is
recognized in profit or loss.
In addition, on derecognition of an investment in a debt instrument classified as at FVTOCI,
the cumulative gain or loss previously accumulated in the investments revaluation
reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in
equity instrument which the Entity has elected on initial recognition to measure at FVTOCI,
the cumulative gain or loss previously accumulated in the investments revaluation
reserve is not reclassified to profit or loss, but is transferred to retained earnings.
h.
Cash and cash equivalents
They consist mainly of bank deposits in checking accounts and investments in short-
term securities, liquid, easily convertible into cash or with a maturity of up to three
months from the date of acquisition and subject to insignificant risks of changes in value.
Cash is presented at nominal value and equivalents are valued at fair value; fluctuations
in its value are recognized in income for the period.
Cash equivalents are represented by investments in money desks and mutual funds and
are recognized at fair value.
Derecognition of financial assets
i.
Inventories and cost of sales
The Entity derecognizes a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another entity.
If the Entity neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Entity recognizes its
retained interest in the asset and an associated liability for amounts it may have
to pay. If the Entity retains substantially all the risks and rewards of ownership of a
transferred financial asset, the Entity continues to recognize the financial asset and
also recognizes a collateralized borrowing for the proceeds received.
Inventories are valued at the lower of cost or net realizable value. Costs of inventories are
determined using the average cost method.
The Entity reviews the book value of inventories, in the presence of any indication of
impairment that would indicate that their book value may not be recoverable, estimating
the net realizable value, the determination of which is based on the most reliable
evidence available, at the time the estimate of the amount in which they are expected
to be made is made. Net realizable value represents the estimated selling price for
inventories less all estimated cost of completion and costs necessary to make the sale.
Cost of sales represents the cost of inventories at the time of sale, increased, when
applicable, by reductions in the value of inventory during the year to its net realizable
value. The Entity records the necessary estimations to recognize reductions in the value of
its inventories due to impairment, obsolescence, slow movement and other causes that
indicate that utilization or realization of the items comprising the inventories will be below
the recorded value.
j.
Store equipment, leasehold improvements and property
Store equipment, leasehold improvements and property are recorded at acquisition cost.
Depreciation of store equipment, leasehold improvements and property is calculated by
the straight-linemethod, based on the useful lives estimated by the Entity’s management.
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Global Report 2020 Annual depreciation rates of the main groups of assets are as follows:
Brands owned by Alsea included under intangibles assets are the following:
Buildings
Store equipment
Leasehold improvements
Transportation equipment
Computer equipment
Production equipment
Office furniture and equipment
Rates
5
5 to 30
7 to 20
25
20 to 30
10 to 20
10
Any significant components of store equipment, leasehold improvements and property
that must be replaced periodically are depreciated as separate components of the asset
and to the extent they are not fully depreciated at the time of their replacement, are
written off by the Entity and replaced by the new component, considering its respective
useful life and depreciation.
Likewise, when major maintenance is performed, the cost is recognized as a replacement
of a component provided that all recognition requirements are met. All other routine
repair and maintenance costs are recorded as an expense in the period as they are
incurred.
Buildings, furniture and equipment held under finance leases are depreciated based on
their estimated useful life as own assets. However, when there is no reasonable certainty
that the property is obtained at the end of the lease term, the assets are depreciated
over the shorter of the lease life and life period.
k.
Advance payments
Advance payments include advances for purchase of inventories, leasehold
improvements and services that are received in the twelve months subsequent to the
date of the consolidated statements of financial position and are incurred in the course
of regular operations.
l.
Intangible assets
1.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognized separately
from goodwill are initially recognized at their fair value at the acquisition date
(which is regarded as their cost). Subsequent to initial recognition, intangible
assets acquired in a business combination are reported at cost less accumulated
amortization and accumulated impairment losses, on the same basis as intangible
assets that are acquired separately.
Brand
Archie’s
Foster’s Hollywood
Vips
El Portón
La Finca
Casa de comal
Corazón de barro
Vips
Ginos
Ole Mole
Country
Colombia
Spain
Mexico
Mexico
Mexico
Mexico
Mexico
Spain
Spain
Spain
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
2.
Intangible assets acquired separately
Other intangible assets represent payments made to third parties for the rights to
use the brands with which the Entity operates its establishments under the respective
franchise or association agreements. Amortization is calculated by the straight-line
method based on the use period of each brand, including renewals considered to be
certain, which are generally for 10 to 20 years. The terms of brand rights are as follows:
Brands
Mexico
Argentina
Chile
Colombia
Uruguay
America
Domino’s Pizza
Starbucks Coffee
Burger King
Chili’s Grill & Bar
P.F. Chang’s
The Cheesecake Factory
Italianni’s
2025
2037
-
2027
Depending on opening dates
2023
2029 (2)
Depending on
opening dates
2031
-
-
-
-
-
2027
2026
2021(2)
-
-
2026
2033
-
-
2021(2)
-
-
-
2026
-
-
-
-
-
Europe
Brands
Spain
Luxembourg
Portugal Andorra
France
Netherlands
Belgium
Domino’s Pizza
2029 (3)
Starbucks Coffee
Fridays
Wagamama
Burger King
2030
2030
2036
Depending on
opening dates
-
2030
-
-
-
-
2030
2030
2036
-
2030
2036
-
-
-
2034
-
2034
-
2034
-
-
-
-
-
-
-
-
-
(1)
(2)
(3)
The term for each store under this brand is 20 years as of the opening date, with the right to a 10-year extension.
The term for each store under this brand is 10 years as of the opening date, with the right to a 10-year extension.
Term of 10 years with the right to an extension, where Domino’s Pizza Spain renewed its contract in 2019. Burger King Spain is
valid for 20 years.
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Global Report 2020 The Entity has affirmative and negative covenants under the aforementioned
agreements, the most important of which are carrying out capital investments
and opening establishments. As of December 31, 2020, derived from the Covid-19
pandemic, it was business to limit the investment of new stores until the recovery
of sales as normal. At December 31, 2019 and 2018, the Entity has fully complied with
those obligations.
Amortization of intangible assets is included in the depreciation and amortization
accounts in the consolidated statements of income.
As of December 31, 2020, 2019 and 2018, the Entity recorded an amount of $220,000,
$32,469 and $3,647, respectively, for impairment of the values of its long-lived assets.
When an impairment loss subsequently reverses, the carrying amount of the asset (or
a cash-generating unit) is increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognized for the asset
(or cash generating unit) in prior years. A reversal of an impairment loss is recognized
immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated as a revaluation increase.
3.
Derecognition of intangible assets
n.
Business combinations
An intangible asset is derecognized on disposal, or when no future economic
benefits are expected from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the difference between the net
disposal proceeds and the carrying amount of the asset are recognized in profit or
loss when the asset is derecognized.
m.
Impairment in the value of long-lived assets, equipment, leasehold improvements,
properties, and other intangible assets
At the end of each reporting period, the Entity reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable amount
of the asset is estimated in order to determine the extent of the impairment loss (if
any). When it is not possible to estimate the recoverable amount of an individual asset,
the Entity estimates the recoverable amount of the cash-generating unit to which the
asset belongs. When a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they
are allocated to the smallest group of cash-generating units for which a reasonable and
consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use
are tested for impairment at least annually, and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less
than its carrying amount, the carrying amount of the asset (or cash-generating unit)
is reduced to its recoverable amount. An impairment loss is recognized immediately in
profit or loss, unless the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
The Entity performs impairment test annually to identify any indication.
Acquisitions of businesses are accounted for using the acquisition method. The
consideration transferred in a business combination is measured at fair value, which is
calculated as the sum of the acquisition-date fair values of the assets transferred by the
Entity, liabilities incurred by the Entity to the former owners of the acquire and the equity
interests issued by the Entity in exchange for control of the acquire. Acquisition-related
costs are generally recognized in the consolidated statement of income as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are
recognized at their fair value, except that:
-
-
-
Deferred tax assets or liabilities, and assets or liabilities related to employee benefit
arrangements are recognized and measured in accordance with IAS 12 and IAS 19,
respectively;
Liabilities or equity instruments related to share-based payment arrangements
of the acquire or share-based payment arrangements of the Entity entered into
to replace share-based payment arrangements of the acquire are measured in
accordance with IFRS 2, Share-based Payments, at the acquisition date;
Assets (or disposal groups) that are classified as held for sale in accordance
with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, are
measured in accordance with that standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the
amount of any non-controlling interests in the acquire, and the fair value of the acquirer’s
previously held equity interest in the acquire (if any) over the net of the acquisition-date
amounts of the identifiable assets acquired and the liabilities assumed.
If, after reassessment, the net of the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of the consideration transferred, the
amount of any non-controlling interests in the acquire and the fair value of the acquirer’s
previously held interest in the acquire (if any), the excess is recognized immediately in
profit or loss as a bargain purchase gain.
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Global Report 2020 Non-controlling interests that are present ownership interests and entitle their holders
to a proportionate share of the entity’s net assets in the event of liquidation may be
initially measured either at fair value or at the non-controlling interests’ proportionate
share of the recognized amounts of the acquirer’s identifiable net assets. The choice of
measurement basis is made on a transaction-by-transaction basis.
Other types of non-controlling interests are measured at fair value or, when applicable,
on the basis specified in another IFRS.
When the consideration transferred by the Entity in a business combination includes
assets or liabilities resulting from a contingent consideration arrangement, the
contingent consideration is measured at its acquisition-date fair value and included as
part of the consideration transferred in a business combination.
Changes in the fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments
against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed
one year from the acquisition date) about facts and circumstances that existed at the
acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration
that do not qualify as measurement period adjustments depends on how the contingent
consideration is classified. Contingent consideration that is classified as equity is not
remeasured at subsequent reporting dates and its subsequent settlement is accounted
for within equity.
Contingent consideration that is classified as an asset or a liability is remeasured at
subsequent reporting dates in accordance with IAS 39, or IAS 37, Provisions, Contingent
Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss
being recognized in profit or loss.
When a business combination is achieved in stages, the Entity’s previously held equity
interest in the acquire is remeasured to its acquisition-date fair value and the resulting
gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the
acquire prior to the acquisition date that have previously been recognized in other
comprehensive income are reclassified to profit or loss where such treatment would be
appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the
reporting period in which the combination occurs, the Entity reports provisional amounts
for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see above), or
additional assets or liabilities are recognized, to reflect new information obtained about
facts and circumstances that existed at the acquisition date that, if known, would have
affected the amounts recognized at that date.
o.
Goodwill
Goodwill arising from an acquisition of a business is carried at cost as established at the
date of acquisition of the business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Entity’s cash-
generating units that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment
annually, or more frequently when there is an indication that the unit may be impaired.
If the recoverable amount of the cash-generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized
directly in profit or loss.
An impairment loss recognized for goodwill is not reversed in subsequent periods.
At December 31, 2018, the Entity has identified impairment effects on its La Vaca Argentina
and Il Tempietto brands for an amount of $3,270, and $377, respectively.
At December 31, 2019, the Entity has identified impairment effects on its El Portón brands
for an amount of $32,469.
During 2020, the Entity has identified impairment effects on its El Portón, Stabucks Coffee,
Burger King, Italiani´s y Vips brands for an amount of $220,000.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
p.
Investment in shares of associated companies and joint venture
An associate is an entity over which the Entity has significant influence. Significant
influence is the power to participate in the financial and operating policies decisions of
the investee, but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the joint arrangement. Joint control is
the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing
control.
The results and assets and liabilities of associates or joint ventures are incorporated
in these consolidated financial statements using the equity method of accounting,
except when the investment, or a portion thereof, is classified as held for sale, in which
case it is accounted for in accordance with IFRS 5, Non-current Assets Held for Sale and
Discontinued Operations.
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Global Report 2020 Under the equity method, an investment in an associate or a joint venture is initially
recognized in the consolidated statements of financial position at cost and adjusted
thereafter to recognize the Entity’s share of the profit or loss and other comprehensive
income of the associate or joint venture.
When the Entity’s share of losses of an associate or a joint venture exceeds the Entity’s
interest in that associate or joint venture (which includes any long-term interests that, in
substance, form part of the Entity’s net investment in the associate or joint venture), the
Entity discontinues recognizing its share of further losses. Additional losses are recognized
only to the extent that the Entity has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity
method from the date on which the investee becomes an associate or a joint venture. On
acquisition of the investment in an associate or a joint venture, any excess of the cost of
the investment over the Entity’s share of the net fair value of the identifiable assets and
liabilities of the investee is recognized as goodwill, which is included within the carrying
amount of the investment.
Any excess of the Entity’s share of the net fair value of the identifiable assets and liabilities
over the cost of the investment, after reassessment, is recognized immediately in profit or
loss in the period in which the investment is acquired.
The requirements of IAS 36 are applied to determine whether it is necessary to recognize
any impairment loss with respect to the Entity’s investment in an associate or a joint
venture. When necessary, the entire carrying amount of the investment (including
goodwill) is tested for impairment in accordance with IAS 36, Impairment of Assets, as a
single asset by comparing its recoverable amount (higher of value in use and fair value
less costs to sell) with its carrying amount. Any impairment loss recognized forms part of
the carrying amount of the investment.
Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent
that the recoverable amount of the investment subsequently increases.
The Entity discontinues the use of the equity method from the date when the investment
ceases to be an associate or a joint venture, or when the investment is classified as held
for sale. When the Entity retains an interest in the former associate or joint venture and
the retained interest is a financial asset, the Entity measures the retained interest at fair
value at that date and the fair value is regarded as its fair value on initial recognition in
accordance with IFRS 9.
The difference between the carrying amount of the associate or joint venture at the date
the equity method was discontinued, and the fair value of any retained interest and any
proceeds from disposing of a part interest in the associate or joint venture is included in
the determination of the gain or loss on disposal of the associate or joint venture.
In addition, the Entity accounts for all amounts previously recognized in other
comprehensive income in relation to that associate or joint venture on the same basis
as would be required if that associate or joint venture had directly disposed of the
related assets or liabilities. Therefore, if a gain or loss previously recognized in other
comprehensive income by that associate or joint venture would be reclassified to profit
or loss on the disposal of the related assets or liabilities, the Entity reclassifies the gain
or loss from equity to profit or loss (as a reclassification adjustment) when the equity
method is discontinued.
The Entity continues to use the equity method when an investment in an associate
becomes an investment in a joint venture or an investment in a joint venture becomes an
investment in an associate. There is no remeasurement to fair value upon such changes
in ownership interests. When the Entity reduces its ownership interest in an associate or
a joint venture but the Entity continues to use the equity method, the Entity reclassifies
to profit or loss the proportion of the gain or loss that had previously been recognized
in other comprehensive income relating to that reduction in ownership interest if that
gain or loss would be reclassified to profit or loss on the disposal of the related assets or
liabilities. When a group entity transacts with an associate or a joint venture of the Entity,
profits and losses resulting from the transactions with the associate or joint venture are
recognized in the Entity’s consolidated financial statements only to the extent of interests
in the associate or joint venture that are not related to the Entity.
q.
Leasing
The Entity as lessor
The Entity executes lease contracts for certain investment properties as the lessor.
The Entity also rents the equipment needed by retailers for the presentation and
development of their activities and the equipment manufactured by the Entity.
The leases in which the Entity acts as lessor are classified as capital leases or
operating leases.
When contractual terms substantially transfer all the risks and rewards of
ownership to the lessee, the contract is classified as a capital lease. All other
contracts are classified as operating contracts.
When the Entity acts as an intermediary lessor, it accounts for the main lease and
sublease as two separate contracts. The sublease is classified as a capital lease or
operating lease with regard to the right-of-use asset derived from the main lease.
Rental revenue derived from operating leases is recognized according to the
straight-line method during the relevant lease period. The direct initial costs
incurred for the negotiation and arrangement of the operating lease are added
to the book value of the leased asset and are recognized in conformity with the
straight-line method throughout the lease period.
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Global Report 2020
The outstanding amounts of finance leases are recognized as leases receivable
for the amount of the net investment in the leases. Income from finance leases is
allocated to accounting periods in such a way as to reflect a constant periodic rate
of return on the net unpaid investment in respect of the leases.
When a contract includes lease and non-lease components, the Entity applies IFRS
15 to assign the respective payment to each contractual component.
The Entity as lessee as of January 1, 2019
The Entity assesses whether a contract initially contains a lease.
The Entity recognizes a right-of-use asset and the respective lease liability for all
the lease contracts in which impacts it acts as lessee, albeit with the exception of
short-term leases (executed for periods of 12 months or less) and those involving
low-value assets (like electronic tablets, personal computers and small items of
office furniture and telephones). For these leases, the Entity records rental payments
as an operating expense according to the straight-line method throughout the
lease period, unless another method is more representative of the time pattern in
which economic gains result from the consumption of the leased assets.
The lease liability is initially measured at the present value of the rental payments
that are not settled at the starting date, discounted according to the implied
contractual rate. If this rate cannot be easily determined, the Entity utilizes
incremental rates.
The rental payments included in the lease liability measurement are composed by:
•
•
•
•
•
Fixed rental payments (including substantially fixed payments), less any
received lease incentive;
Variable rental payments that depend on an index or rate, which are initially
measured by utilizing the index or rate in effect at the starting date;
The amount expected to be paid by the lessee under residual value
guarantees;
The purchase option exercise price, if it is reasonably certain that the lessee
will exercise these options; and
Penalty payments resulting from the termination of the lease, if the lease
period reflects the exercise of a lease termination option.
The lease liability is presented as a separate item in the consolidated statement of
changes in financial position.
The lease liability is subsequently measured based on the book value increase
to reflect the interest accrued by the lease liability (using the effective interest
method) and reducing the book value to reflect the rental payments made.
The Entity revalues the lease liability (and makes the respective adjustments to the
related right-of-use asset) as long as:
•
The lease period is modified or an event or significant change takes place
with regard to the circumstances of the lease, thereby resulting in a change
to the assessment of the purchase option exercise, in which case, the lease
•
•
liability is measured by discounting restated rental payments and utilizing a
restated discount rate.
Rental payments are modified as a result of changes to indexes or rates, or a
change in the payment expected under a guaranteed residual value, in which
case, the lease liability is revalued by discounting restated rental payments
by using the same discount rate (unless the change in rental payments is due
to a change of variable interest rate, in which case a restated discount rate is
used).
A lease contract is amended and the lease amendment is not accounted for
as a separate lease, in which case the lease liability is revalued according to
the amended lease period by discounting restated rental payments using a
discount rate restated at the date on which the amendment took effect.
The Entity did not make any of these adjustments in the presented periods.
Right-of-use assets are composed by the initial measurement of the respective
lease liability, the rental payments made on or prior to the starting date, less any
received lease incentive and any initial direct costs. The subsequent valuation is the
cost less accumulated depreciation and impairment losses.
If the Entity assumes an obligation derived from the cost of dismantling and
removing a leased asset, to restore the place where it is located or restore the
underlying asset to the condition required by lease terms and conditions, a
provision measured according to IAS 37 must be recognized. To the extent that
costs are related to a right-of-use asset, they are included in the related right-of-
use asset unless they are incurred to generate inventories.
Right-of-use assets are depreciated during the shorter of the lease period and the
useful life of the underlying asset. If a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset indicates that the Entity plans to exercise
the purchase option, the right-of-use asset is depreciated according to its useful
life. Depreciation begins at the lease starting date.
Right-of-use assets are presented as a separate item in the consolidated
statement of changes in financial position.
The Entity applies IAS 36 to determine whether a right-of-use asset is impaired and
to account for any identified impairment loss, as described in the ‘Property, plant
and equipment’ policy.
Variable leases that do not depend on index or rate are not included in the
measurement of the lease liability and right-of-use asset. The related payments
are recognized as an expense of the period in which the event or condition leading
to the payments arises and are included under the “Other expenses” heading in the
consolidated statement of income.
As a practical expedient, IFRS 16 offers the option of not separating non-lease
components and instead recording any lease and its associated non-lease
components as a single agreement. The Entity has not utilized this practical
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expedient. For contracts containing lease components and one or more additional
lease or non-lease components, the Entity assigns the contractual payment to
each lease component according to the relative stand-alone selling price method
for all non-lease components.
The Entity as lessee, until December 31, 2018
Leases are classified as capital leases when the terms of the lease substantially
transfer all the risks and rewards inherent to ownership to lessees. All other leases
are classified as operating leases.
The assets maintained under capital leases are recognized as the Entity’s assets
at fair value at the start of the lease or, if this value is lower, at the present value of
the minimum lease payments. The respective liability of the lessor is included in the
consolidated statement of changes in financial position as a capital lease liability.
Lease payments are distributed between financial expenses and the reduction
of lease obligations in order to obtain a constant interest rate for the remaining
liability balance. Financial expenses are charged directly to results.
Operating lease rental payments are charged to results by utilizing the straight-line
method during the respective lease period.
The lessors of leased real property require guarantee deposits equal to between 1
and 2 monthly rentals. These deposits are classified as non-current.
r.
Foreign currency transactions
In order to consolidate the financial statements of foreign operations carried out
independently from the Entity (located in Latin America and Europe), which comprise
50%, 53% and 45% of consolidated net income and 39%, 36% and 34% of the total
consolidated assets at December 31, 2020, 2019 and 2018, respectively, companies apply
the policies followed by the Entity.
The financial statements of consolidating foreign operations are converted to the
reporting currency by initially identifying whether or not the functional and recording
currency of foreign operations is different, and subsequently converting the functional
currency to the reporting currency. The functional currency is equal to recording currency
of foreign operations, but different to the reporting currency.
In order to convert the financial statements of subsidiaries resident abroad from the
functional currency to the reporting currency at the reporting date, the following steps
are carried out:
-
Assets and liabilities, both monetary and non-monetary, are converted at the
closing exchange rates in effect at the reporting date of each consolidated
statements of financial position.
-
-
-
Income, cost and expense items of the consolidated statements of income are
converted at the average exchange rates for the period, unless those exchange
rates will fluctuate significantly over the year, in which case operations are
converted at the exchange rates prevailing at the date on which the related
operations were carried out.
Capital movements (contributions or reductions) are converted at the exchange
rate on the date these movements were carried out.
All conversion differences are recognized as a separate component under
stockholders’ equity and form part of other comprehensive income items.
s.
Employee benefits
Retirement benefits costs from termination benefits
Payments to defined contribution retirement benefit plans are recognized as an expense
when employees have rendered service entitling them to the contributions.
The defined benefit plan includes retirement. The other benefits correspond to the
legal seniority premium in Mexico. Its cost is determined using the projected unit credit
method, with actuarial valuations that are made at the end of each reporting period.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the
asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected
immediately in the statement of financial position with a charge or credit recognized in
other comprehensive income in the period in which they occur.
Remeasurement recognized in other comprehensive income is reflected immediately
in retained earnings and will not be reclassified to profit or loss. Past service cost is
recognized in profit or loss in the period of a plan amendment. Net interest is calculated
by applying the discount rate at the beginning of the period to the net defined benefit
liability or asset.
A liability for a termination benefit is recognized at the earlier of when the entity can no
longer withdraw the offer of the termination benefit and when the entity recognizes any
related restructuring costs.
Short-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and
salaries, annual leave and sick leave in the period the related service is rendered at the
undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the
undiscounted amount of the benefits expected to be paid in exchange for the related
service.
Statutory employee profit sharing (PTU)
As result of the PTU is recorded in the results of the year in which it is incurred and is
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Global Report 2020 presented in other expenses and other income.
end of the reporting period, to recover or settle the carrying amount of its assets
and liabilities.
As result of the 2014 Income Tax Law, as of December 31, 2020, 2019 and 2018, PTU is
determined based on taxable income, according to Section I of Article 9 of the that Law.
3. Current and deferred tax for the year
t.
Income taxes
The income tax expense represents the sum of the tax currently payable and deferred
tax.
1. Current tax
Current and deferred tax are recognized in profit or loss, except when they
relate to items that are recognized in other comprehensive income or directly in
equity, in which case, the current and deferred tax are also recognized in other
comprehensive income or directly in equity respectively.
Where current tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the business
combination.
Current income tax (ISR) is recognized in the results of the year in which is incurred.
u.
Provisions
2. Deferred income tax
Deferred tax is recognized on temporary differences between the carrying
amounts of assets and liabilities in the consolidated financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognized for all taxable temporary differences. Deferred
tax assets are generally recognized for all deductible temporary differences to
the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Such deferred tax assets
and liabilities are not recognized if the temporary difference arises from the initial
recognition (other than in a business combination) of assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated
with investments in subsidiaries and associates, and interests in joint ventures,
except where the Entity is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets arising from deductible temporary differences associated with
such investments and interests are only recognized to the extent that it is probable
that there will be sufficient taxable profits against which to utilize the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected
to apply in the period in which the liability is settled or the asset realized, based on
tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Entity expects, at the
Provisions are recorded when the Entity has a present obligation (be it legal or assumed)
as a result of a past event, and it is probable that the Entity will have to settle the
obligation and it is possible to prepare a reliable estimation of the total amount.
The amount recognized as a provision is the best estimate of the consideration required
to settle the present obligation at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flow.
When some or all of the economic benefits required to settle a provision are expected to
be recovered by a third party, a receivable is recognized as an asset if it is virtually certain
that reimbursement will be received and the amount of the receivable can be measured
reliably.
Provisions are classified as current or non-current based on the estimated period of time
estimated for settling the related obligations.
1.
Contingent liabilities acquired as part of a business combination
Contingent liabilities acquired in a business combination are initially measured at
fair value at the acquisition date.
At the end of subsequent reporting periods, such contingent liabilities are measured
at the higher of the amount that would be recognized in accordance with IAS 37
and the amount initially recognized less cumulative amortization recognized in
accordance with IFRS 15.
v.
Financial liabilities and equity instruments
1.
Classification as debt or equity
Debt and / or equity instruments are classified as financial liabilities or as capital in
accordance with the substance of the contractual agreement and the definitions of
liabilities and capital.
2.
Financial liabilities
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Global Report 2020 Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other
financial liabilities’.
3.
Other financial liabilities
Other financial liabilities (including borrowings and trade and other payables) are
subsequently measured at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a
financial liability and of allocating interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash
payments (including all fees and points paid or received that form an integral part
of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or (where appropriate) a shorter
period, to the net carrying amount on initial recognition.
4.
Derecognition of financial liabilities
The Entity derecognizes financial liabilities when, and only when, the Entity’s
obligations are discharged, cancelled or have expired. The difference between the
carrying amount of the financial liability derecognized and the consideration paid
and payable is recognized in profit or loss.
w.
Derivative financial instruments
Alsea uses derivative financial instruments (DFI) known as forwards or swaps, in order
to a) mitigate present and future risks of adverse fluctuations in exchange and interest
rates, b) avoid distracting resources from its operations and the expansion plan, and
c) have certainty over its future cash flows, which also helps to maintain a cost of debt
strategy.
DFI’s used are only held for economic hedge purposes, through which the Entity agrees to
the trade cash flows at future fixed dates, at the nominal or reference value, and they are
valued at fair value.
Embedded derivatives: The Entity reviews all signed contracts to identify the existence
of embedded derivatives. Identified embedded derivatives are subject to evaluation to
determine whether or not they comply with the provisions of the applicable regulations;
if so, they are separated from the host contract and are valued at fair value. If an
embedded derivative is classified as trading instruments, changes in their fair value are
recognized in income for the period.
Changes in the fair value of embedded derivatives designated for hedging recognize in
based on the type of hedging: (1) when they relate to fair value hedges, fluctuations in
the embedded derivative and in the hedged item they are valued at fair value and are
recorded in income; (2) when they relate to cash flows hedges, the effective portion of
the embedded derivative is temporarily recorded under other comprehensive income,
and it is recycled to income when the hedged item affects results. The ineffective portion
is immediately recorded in income.
Strategy for contracting DFI’s: Every month, the Corporate Finance Director’s office
must define the price levels at which the Corporate Treasury must operate the different
hedging instruments. Under no circumstances should amounts above the monthly
resource requirements be operated, thus ensuring that operations are always carried out
for hedging and not for speculation purposes. Given the variety of derivative instruments
available to hedge risks, Management is empowered to define the operations for which
such instruments are to be contracted, provided they are held for hedging and not for
speculative purposes.
Processes and authorization levels: The Deputy Director of Corporate Treasury
must quantify and report to the Director of Administration and Finance the monthly
requirements of operating resources. The Director of Administration and Finance may
operate at his discretion up to 50% of the needs for the resources being hedged, and
the Administration and Financial Management may cover up to 75% of the exposure risk.
Under no circumstances may amounts above the limits authorized by the Entity’s General
Management be operated, in order to ensure that operations are always for hedging and
not for speculation purposes. The foregoing is applicable to interest rates with respect to
the amount of debt contracted at variable rates and the exchange rate with respect to
currency requirements. If it becomes necessary to sell positions for the purpose of making
a profit and/or incurring a “stop loss”, the Administration and Finance Director must first
authorize the operation.
Internal control processes: With the assistance of the Deputy Director of Corporate
Treasury, the Director of Administration and Finance must issue a report the following
working day, specifying the Entity’s resource requirements for the period and the
percentage covered by the Administration and Financial Manager. Every month, the
Corporate Treasury Manager will provide the Accounting department with the necessary
documentation to properly record such operations.
The Administration and Finance Director will submit to the Corporate Practices
Committee a quarterly report on the balance of positions taken.
The actions to be taken in the event that the identified risks associated with exchange
rate and interest rate fluctuations materialize, are to be carried out by the Internal Risk
Management and Investment Committee, of which the Alsea General Director and the
main Entity’s directors form part.
Main terms and conditions of the agreements: Operations with DFI’s are carried out
under a master agreement on an ISDA (International Swap Dealers Association) form,
which must be standardized and duly formalized by the legal representatives of the Entity
and the financial institutions.
Margins, collateral and credit line policies: In certain cases, the Entity and the financial
institutions have signed an agreement enclosed to the ISDA master agreement, which
stipulates conditions that require them to offer guarantees for margin calls in the event
that the mark-to-market value exceeds certain established credit limits.
The Entity has the policy of monitoring the volume of operations contracted with
each institution, in order to avoid as much as possible margin calls and diversify its
counterparty risks.
Identified risks are those related to variations in exchange rate and interest rate.
Derivative instruments are contracted under the Entity’s policies and no risks are
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Global Report 2020 expected to occur that differ from the purpose for which those instruments are contracted.
Provision of services
Markets and counterparties: Derivative financial instruments are contracted in the local
market under the over the counter (OTC) mode. Following are the financial entities that
are eligible to close operations in relation to the Entity’s risk management: BBVA Bancomer
S.A., Banco Santander, S. A., Barclays Bank México S. A., UBS AG Actinver Casa De Bolsa,
Banorte-Ixe, BTG Pactual, Citi, Credit Suisse, Grupo Bursátil Mexicano GBM Casa De Bolsa,
HSBC Global Research, Interacciones Casa de Bolsa, Intercam Casa de Bolsa, Invex, Itau
BBA, Monex Casa de Bolsa, UBS Investment Research, Grupo Financiero BX+, and Vector
Casa de Bolsa.
The Corporate Financial Director is empowered to select other participants, provided that
they are regulated institutions authorized to carry out this type of operations, and that
they can offer the guarantees required by the Entity.
Hedge accounting: DFI’s are initially recorded at their fair value, which is represented by
the transaction cost. After initial recognition, DFI’s are valued at each reporting period at
their fair value and changes in such value are recognized in the consolidated statements
of income, except if those derivative instruments have been formally designated as and
they meet the requirements to be considered hedge instruments associated to a hedge
relation.
Polices for designating calculation and valuation agents: The fair value of DFIs is
reviewed monthly. The calculation or valuation agent used is the same counterparty
or financial entity with whom the instrument is contracted, who is asked to issue the
respective reports at the month-end closing dates specified by the Entity.
Likewise, as established in the master agreements (ISDA) that cover derivative financial
operations, the respective calculations and valuations are presented in the quarterly
report. The designated calculation agents are the corresponding counterparties.
Nevertheless, the Entity validates all calculations and valuations received by each
counterparty.
x.
Revenue recognition
The Entity recognizes income from the following sources:
Sale of goods
Provision of services
Royalties
Sale of goods
Beverages and food sold by Alsea are transferred to the customer at the time they are
delivered and/or consumed by them. Mostly sales of goods, the payment method is cash
and is recorded at the time they are delivered to the customer.
The income is recognized according to the percentage of termination. Every month the
Entity receives from the clients a fixed agreed payment and the recording is made when
the services have been accrued and generally accepted in time.
Royalties
Revenue from royalties is based on a fixed percentage on sales of subfranchises. Alsea
has two revenues from the sale of the subfranchises. At the beginning of the contract, the
subfranchisee pays an amount depending on the franchise, which is recorded as income
in the period of the duration of the contract.
5.
Critical accounting judgments and key sources for estimating uncertainties
In the application of the Entity’s accounting policies, which are described in Note 3, the Entity’s
management is required to make certain judgments, estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
Estimations and assumptions are reviewed on a regular basis. Changes to the accounting
estimations are recognized in the period in which changes are made, or in future periods if the
changes affect the current period and other subsequent periods.
a.
Critical judgments for applying the accounting policies
There are critical judgments, apart from those involving estimations, that the Entity’s
management has made in the process of applying the Entity´s accounting policies and
that have the most significant effect on the amounts recognized in the consolidated
financial statements.
Control over Food Service Project, S.L. (Zena Group) and sale option of the non-controlling
interest
Note 22 mentions that Grupo Zena is a subsidiary of Alsea, over which it owns 66.24%.
Based on the contractual agreements between the Entity and other investors, Alsea has
the power to appoint and dismiss the majority of the members of the board of directors,
executive committee and management positions of Grupo Zena, which have the power
to direct the activities of the Zena Group. Therefore, the Entity’s management concluded
that Alsea has the ability to direct the relevant activities of Grupo Zena and therefore has
control over that entity.
Similarly, Grupo Zena has the right to sell Alsea its uncontrolled participation (21.06%
put option). The sale option may be exercised no later than June 20, according to the
addendum to the shareholders’ agreement dated June 20, 2019 and the remaining 12.70%,
the put option may be exercised during the 7-year period as of the acquisition date.
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Global Report 2020 Alsea’s management has calculated the financial liability derived from the contractual
requirements in effect at the purchase option date, as well as the current value of the
financial liability according to the requirements of IAS 32. Details of this liability can be
consulted in Note 22.
b.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of
estimation uncertainty at the end of the reporting period, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year.
1.
Impairment of long-lived assets
The Entity annually evaluates whether or not there is indication of impairment in
long-lived assets and calculates the recoverable amount when indicators are
present. Impairment occurs when the net carrying value of a long-lived asset
exceeds its recoverable amount, which is the higher of the fair value of the asset
less costs to sell and the value in-use of the asset. Calculation of the value in-use
is based on the discounted cash flow model, using the Entity’s projections of its
operating results for the near future.
The recoverable amount of long-lived assets is subject to uncertainties inherent to
the preparation of projections and the discount rate used for the calculation.
2.
Right-of-use asset
The main aspects considered by the Entity for the implementation of IFRS 16 are:
a) assess, at the start of the contract, whether the right to control the use of an
identified asset for a given period of time is obtained; b) a change in the nature
of lease-related expenses by replacing the operating lease expense determined
according to IFRS 16 with the depreciation or amortization of right-of-use assets (in
operating costs) and an interest expense for lease liabilities in interest expenses;
and c) the determination of lease payments because the Entity has variable rental
contracts.
The recoverable amount of right-of-use assets is sensitive to the uncertainty
inherent to the preparation of projections and the discount rate utilized in the
calculation.
3.
Discount rate to determine lease payments
IFRS 16 requires the tenant to discount the lease liability using the interest rate
implied in the lease if that rate can be easily determined. If the interest rate implied
in the lease cannot be easily determined, then the tenant must use its incremental
indebtedness rate. The renter’s incremental loan rate is the interest rate that the
tenant would have to pay to borrow for a similar term, with similar security and the
funds needed to obtain an asset of a value similar to the right-to-use asset in a
similar economic environment.
There are three steps to determining the incremental loan rate: (i) determining a
benchmark rate, (ii) determining the credit risk adjustment, and, (iii) determining
the specific adjustment of the lease.
4.
Income tax valuation
The Entity recognizes net future tax benefits associated with deferred income
tax assets based on the probability that future taxable income will be generated
against which the deferred income tax assets can be utilized. Evaluating the
recoverability of deferred income tax assets requires the Entity to prepare
significant estimates related to the possibility of generating future taxable income.
Future taxable income estimates are based on projected cash flows from the
Entity’s operations and the application of the existing tax laws in Mexico, LATAM and
Spain.
The Entity’s capacity to realize the net deferred tax assets recorded at any reporting
date could be negatively affected to the extent that future cash flows and taxable
income differ significantly from the Entity’s estimates. Additionally, future changes in
Mexico’s tax laws could limit the capacity to obtain tax deductions in future periods.
5.
Fair value measurements and valuation processes
Some of the Entity’s assets and liabilities are measured at fair value for financial
reporting purposes. The Entity’s Board of Directors has set up a valuation
committee, which is headed up by the Entity’s Financial Director, to determine the
appropriate valuation techniques and inputs for fair value measurements.
In estimating the fair value of an asset or liability, the Entity uses market-observable
data to the extent it is available. When level 1 inputs are not available, the Entity
engages third party qualified appraisers to perform the valuation.
The valuation committee works closely with the qualified external appraiser to
establish the appropriate valuation techniques and inputs to the model. Every three
months, the Financial Director reports the findings of the valuation committee to the
Entity’s board of directors to explain the causes of fluctuations in the fair value of
assets and liabilities. Information about the valuation techniques and inputs used in
the determining the fair value of various assets and liabilities are disclosed Note 25
i.
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Global Report 2020 6.
Contingencies
Given their nature, contingencies are only resolved when one or more future events
occur or cease to occur. The evaluation of contingencies inherently includes the use
of significant judgment and estimations of the outcomes of future events.
6.
Non-monetary transactions
The Entity carried out the following activities, which did not generate or utilize cash, for which
reason, they are not shown in the consolidated statements of cash flows:
As discussed in Note 22, Grupo Zena has the option of selling the noncontrolling interest of
Alsea. On October 30, 2018, Alsea and the investors of Grupo Zena signed a new agreement for
purchase and sale options, termination of the stockholders’ agreement and a commitment to
enter into a new stockholders’ agreement, which was ratified on December 27, 2018, stipulating
the termination of the original stockholders’ agreement and the formalization of this new
agreement, whereby Grupo Zena has the right to sell to Alsea its noncontrolling interest in
other investors for 21.06% of the equity of Grupo Zena, the net amount between termination of
the original agreement and recognition of the new right was recorded net in the consolidated
statement of changes in stockholders’ equity under Reserve for purchase of noncontrolling
interest, in the amount of $659,252 at December 31, 2018.
7.
Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, the cash and cash equivalents
caption includes cash, banks and investments in money market instruments. The cash and
cash equivalents balance included in the consolidated statements of financial position and
the consolidated statements of cash flows at December 31, 2020, 2019 and 2018 is comprised as
follows:
2020
2019
2018
(restated)
Cash
Investments with original maturities of
under three months
$
2,614,467
$
1,864,521
$
1,769,871
1,317,942
704,250
217,986
At December 31, 2020, 2019 and 2018, the customer balance is comprised as follows:
Franchises
Credit card and daily sale
Other (1)
Expected credit losses
2020
2019
2018
(restated)
$
917,477
$
746,115
$
52,505
18,525
988,507
(98,023)
75,862
36,105
858,082
(93,180)
523,049
97,256
59,085
679,390
(97,255)
$
890,484
$
764,902
$
582,135
(1)
In others there are concepts such as third parties, officials and employees and vouchers to be redeemed.
Accounts receivable
The average credit term for the sale of food, beverages, containers, packaging, royalties and
other items to owners of sub-franchises is from 8-30 days. Starting from the day next dates
of the contractual maturity are generated interests on the defeated balance at moment of
settlement. The rate comprises the Mexican Interbank Equilibrium Rate (TIIE) plus 5 points and
is multiplied by 2.
The reserve is then composed of the part of the general and significant customers, which
follows a procedure of credit losses expected according to the provisions of the standard.
Additionally, it incorporates a criterion to be followed, either quantitative or qualitative, to
consider a significant increase in the credit risk of the account receivable and follow up to
prepare the estimate of its reserves on a quarterly basis.
Before accepting any new client, the Entity uses an external credit rating system to evaluate
the credit quality of the potential client and defines the credit limits per client. As mentioned in
Note 4g, for the determination of the estimation of doubtful accounts, the Entity performs an
analysis of balances seniority per client and is assigned based on the experience an estimation
percentage.
This first analysis gives an indication of deterioration; subsequently, an analysis of the
financial situation of all the included clients is carried out to determine which are the accounts
that present an impairment according to the expected credit loss model and on these the
corresponding estimate is recorded.
Total cash and cash equivalents
$
3,932,409
$
2,568,771
$
1,987,857
Following is the aging of past due but unimpaired accounts receivable:
The Entity maintains its cash and cash equivalents with accepted financial entities and it has
not historically experienced losses due to credit risk concentration.
8.
Customers, net
The accounts receivable from customers disclosed in the consolidated statements of financial
position are classified as loans and accounts receivable and therefore they are valued at their
amortized cost.
226
15-60 days
60-90 days
More than 90 days
Total
Current balance
Total account receivable
2020
2019
$
$
$
125,380
$
32,360
71,312
229,052
629,030
858,082
$
$
$
$
$
59,245
47,268
171,351
277,864
745,203
988,507
227
2018
(restated)
95,469
24,213
123,622
243,304
436,086
679,390
Global Report 2020
The concentration of credit risk is limited because the balance is composed of franchisees,
which are supported or controlled by a service contract and / or master franchise; likewise
consists of balances with from financial institutions cards, which are recovered within from 15
days.
11.
Entity as lessee
Entity leases premises for its stores, office, including an industrial warehouse, furniture and
equipment. The average lease term is between 6 and 7 years for 2020 an 2019.
Right of use assets
Amount
9.
Inventories, net
At December 31, 2020, 2019 and 2018, inventories are as follows:
2020
2019
2018
(restated)
Food and beverages
Containers and packaging
Other (1)
Obsolescence allowance
$
1,599,260
$
1,747,219
$
2,095,626
21,479
2
(3,171)
33,445
3,430
(4,448)
25,883
6,676
(7,977)
Total
$
1,617,570
$
1,779,646
$
2,120,208
(1)
In others are concepts such as toys, uniforms, cleaning utensils, kitchen appliances and souvenirs.
Derived from the COVID-19 pandemic, the entity had to take the following actions to avoid an
increase in inventory obsolescence or the destruction of perishable foods:
a)
b)
c)
d)
Sales of slow moving products were made to employees
Analysis of slow-moving products was carried out on a weekly basis with the
administration of each brand for decision-making
Donations of slow-moving and / or near-expiring products were made
The safety stock was reduced with the intention of not increasing the days of inventory,
always monitoring the sale of the brands.
10. Advance payments
Advance payments were made for the acquisition of:
Insurance and other services
Inventories
Lease of locales
Total
2020
2019
138,983
160,271
28,780
$
39,760
$
224,497
25,628
2018
(restated)
124,116
255,531
33,029
328,034
$
289,885
$
412,676
$
$
Cost:
Balance at January 1, 2019
Additions
Balance as of December 31, 2019
Additions and renovations
$
18,493,689
6,709,656
25,203,345
6,535,160
Balance as of December 31, 2020
$
31,738,505
Depreciation:
Balance at January 1, 2019
Charge for depreciation for the year
Balance as of December 31, 2019
Charge for depreciation for the year
$ -
(4,010,688)
(4,010,688)
(4,304,542)
Balance as of December 31, 2020
$
(8,315,230)
Net cost:
Balance as of December 31, 2019
Balance as of December 31, 2020
$
$
21,192,657
23,423,275
Amounts recognized in the consolidated statement income
Depreciation expense of the asset for use rights
Finance expense caused by lease liabilities
$
Expense related to short-term leases
Expense related to leasing of low-value assets
Expense related to variable lease payments, not included in the
measurement of lease liabilities
Benefits obtained from negotiations related to COVID-19
2020
4,304,542
1,034,284
199,669
36,847
316,173
(1,596,496)
$
2019
4,010,688
1,081,791
216,883
42,045
101,069
-
Some of the leases of properties in which the Entity participates as lessee contain variable
lease payment terms that are related to sales generated in the leased stores. Variable
payment terms are used to link lease payments to store cash flows and reduce fixed cost.
228
229
Global Report 2020
The composition of the lease payments by the stores is detailed in the following table.
12. Obligation under finance leases
Fixed payments
Variable payments
2020
2019
$
5,344,326
316,173
$
4,949,390
101,069
Total lease payments
$
5,660,499
$
5,050,459
In general, variable payments constitute 6% and 2% at December 31, 2020 and 2019,
respectively, of the Entity’s total lease payments. The Entity expects this proportion to remain
constant in future years. Variable payments depend on sales and, consequently, on economic
development during the following years.
Considering into consideration the development of expected sales over the next 10 years, it is
expected that the expense for variable leases will continue to present a similar proportion of
store sales in the following years. The total cash outflows for leases amount to $5,660,499 and
$5,050,459 for 2020 and 2019, respectively.
Due to the COVID-19 pandemic generated as of March 2020, the entity made different
agreements with the tenants of the premises to achieve a decrease in the payment of rent
or a grace period in those stores that had to be closed obligatorily by indications of the local
authorities. In May 2020, the IASB issued an amendment to IFRS 16 called “Lease Concessions
Related to Covid-19”, exempting lessees from having to consider leases individually to
determine whether the lease concessions to be produced as a direct consequence of the
Covid-19 pandemic are modifications to those contracts, and it allows tenants to account for
such concessions as if they were not modifications to the lease contracts.
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Year 5
Later
Less: Unearned interest
Analyzed:
Long term
Short term
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Year 5
Later
Less: Unearned interest
Analyzed:
Long term
Short term
28,678,622
21,092,417
2020
$
5,092,312
4,640,483
4,158,803
3,320,533
2,698,233
8,768,258
(3,378,572)
$
25,300,050
4,207,633
$
25,300,050
2019
$
$
$
$
4,574,273
3,950,863
3,308,716
2,846,815
2,316,689
9,657,198
26,654,554
(3,196,522)
23,458,032
19,542,694
3,915,338
23,458,032
The Entity does not face a significant liquidity risk regarding its lease liabilities.
Lease liabilities are monitored through the Entity’s Treasury.
230
231
Global Report 2020
13.
Store equipment, leasehold improvements and property, net
Store equipment, leasehold improvements and properties are as follows:
Cost
Buildings
Store equipment
Leasehold
improvements
Capital lease
Transportation
equipment
Computer equipment
Production equipment
Office furniture and
equipment
Construction in process
Total
Balance as of January 1, 2019
$
947,088
$
10,209,510
$
16,333,671
$
282,859
$
269,900
$
1,270,902
$
987,519
$
427,312
$
2,436,776
$
33,165,537
Acquisitions
Business acquisitions
Reclassified of equipment under
-
-
1,020,646
69,215
1,236,703
-
51,915
251,680
68,587
388,528
-
-
-
-
273,727
5,842
financial leasing contracts
-
-
(309,463)
(282,859)
-
-
-
-
-
Disposals
Restatement
(29,085)
-
Adjustment for currency conversion
(10,721)
(419,724)
335,129
(738,536)
(611,966)
-
504,801
-
(1,471,548)
-
(28,726)
1,649
(14,395)
(87,089)
(65,798)
21,441
-
(84,549)
-
(41,787)
7,290
(108,373)
184,011
13,774
(402,224)
70,327
(130,896)
3,087,269
477,359
(592,322)
(1,686,399)
940,637
(2,559,018)
Balance as of December 31, 2019
907,282
10,476,240
16,070,726
-
280,343
1,372,385
990,308
564,011
2,171,768
32,833,063
Acquisitions
Disposals
Restatement
54,590
(60,829)
-
Adjustment for currency conversion
77,554
668,875
(355,725)
233,034
552,760
844,503
-
(827,659)
-
349,978
-
2,002,050
-
25,946
(27,153)
1,078
22,026
99,727
(27,858)
15,286
-
84,588
-
24,733
(931)
59,868
-
(55,533)
4,980
262,902
(188,632)
39,398
4,868
1,778,242
(1,544,320)
643,754
3,006,749
Balance as of December 31, 2020
Depreciation
Balance as of January 1, 2019
$
$
978,597
$
11,575,184
$
18,439,598
$ -
$
302,240
$
1,544,128
$
1,014,110
$
836,228
$
2,027,402
$
36,717,488
Buildings
Store equipment
Leasehold
improvements
Capital lease
Transportation
equipment
Computer equipment
Production equipment
Office furniture and
equipment
Construction in process
Total
113,919
$
5,133,697
$
7,239,212
$
45,830
$
133,639
$
874,273
$
557,725
$
106,992
$ -
$
14,205,287
Charge for depreciation for the year
6,240
1,150,947
2,204,789
-
49,800
202,407
41,546
134,828
-
Reclassified of equipment under
financial leasing contracts
-
-
-
(45,830)
-
-
-
-
-
Disposals
Restatement
Adjustment for currency conversion
-
(2,096)
(1,396)
(377,119)
131,018
(306,697)
(592,571)
-
236,050
-
(554,998)
-
(25,769)
1,450
(7,002)
(83,145)
(65,781)
10,420
-
(56,767)
-
(67,698)
-
2,528
-
(50,179)
-
3,790,557
(45,830)
(1,214,179)
381,466
(977,039)
Balance as of December 31, 2019
116,667
5,731,846
8,532,482
-
152,118
947,188
533,490
126,471
-
16,140,262
Charge for depreciation for the year
Disposals
Restatement
56,317
(2,238)
-
Adjustment for currency conversion
46,258
1,054,166
(293,138)
163,195
413,768
Balance as of December 31, 2020
Net cost
Balance as of January 1, 2019
Balance as of December 31, 2019
Balance as of December 31, 2020
$
$
$
$
217,004
$
7,069,837
833,169
790,615
761,593
$
$
$
5,075,813
4,744,394
4,505,347
$
$
$
$
2,164,640
-
(603,537)
-
289,240
-
802,607
-
11,185,432
$ -
9,094,459
$
237,029
7,538,244
$ -
7,254,166
$ -
$
$
$
$
44,804
(20,477)
1,147
10,028
187,620
136,261
128,225
114,620
$
$
$
$
184,627
(26,471)
13,590
63,571
1,182,505
396,629
425,197
361,623
-
-
$
$
$
$
39,224
(917)
571,797
429,794
456,818
442,313
$
$
$
$
232
178,558
-
(39,286)
-
3,903
-
153,867
-
423,513
$ -
320,320
437,540
412,715
$
$
$
2,436,776
2,171,768
2,027,402
233
3,722,336
(986,064)
471,075
1,490,100
20,837,710
18,960,250
16,692,801
15,879,778
$
$
$
$
Global Report 2020
14.
Intangible assets, net
Intangible assets are comprised as follows:
Cost
Brand rights
Commissions for store
opening
Franchise and use of locale
rights
Licenses and developments
Goodwill
Total
Balance as of January 1, 2019
$
15,515,745
$
Acquisitions
Business acquisition
Adjustment for currency conversion
Disposals
Restatement
85,407
608,076
-
(1,154,231)
(152,513)
99,570
525,592
15,396
(8,391)
(10,068)
40
$
1,443,581
$
139,001
308,701
43,580
(446,916)
-
-
-
1,534,295
185,769
(72,271)
(2,302)
$
12,553,038
$
31,572,251
19,823
-
-
-
-
425,573
936,600
(1,191,313)
(611,799)
99,610
Balance as of December 31, 2019
15,002,054
522,569
1,487,947
1,645,491
12,572,861
31,230,922
Acquisitions
Adjustment for currency conversion
Disposals
Restatement
33,881
553,775
(93,080)
58,734
110
149,145
(3,689)
1,711
160,076
227,883
(25,128)
8,228
209,849
126,510
(3,787)
3,343
-
-
-
477,505
403,916
1,534,818
(125,684)
72,016
Balance as of December 31, 2020
$
15,555,364
$
669,846
$
1,859,006
$
1,981,406
$
13,050,366
$
33,115,988
Amortization
Brand rights
Commissions for store
opening
Franchise and use of locale
rights
Licenses and developments
Goodwill
Total
Balance as of January 1, 2019
$
1,483,851
$
Amortization
Business acquisition
Adjustment for currency conversion
Disposals
Balance as of December 31, 2019
Amortization
Adjustment for currency conversion
Disposals
Restatement
Balance as of December 31, 2010
Net cost
Balance as of January 1, 2019
Balance as of December 31, 2019
Balance as of December 31, 2020
182,621
(143,522)
(178,218)
24,180
1,368,912
143,572
57,383
(98,206)
(31,819)
489,078
286
(4,656)
(46,736)
211
438,183
91,748
39,046
(3,649)
(1,681)
$
$
$
$
1,439,842
$
563,647
14,031,894
13,633,142
14,115,522
$
$
$
36,514
84,386
106,199
$
$
$
$
$
597,291
154,466
(23,083)
(9,676)
(5,717)
713,281
72,698
1,011
(18,548)
(4,603)
763,838
846,290
774,666
1,095,167
$
1,205,726
$
16,953
$
3,792,899
175,184
(10,340)
(52,186)
1,318,384
100,294
118,490
(18,660)
(3,489)
1,515,019
328,569
327,107
466,387
-
$
$
$
$
-
-
-
-
-
-
-
-
16,953
$
$
$
$
16,953
12,536,085
12,555,908
13,033,413
$
$
$
$
512,557
(181,601)
(286,816)
18,674
3,855,713
408,312
215,930
(139,063)
(41,592)
4,299,301
27,779,352
27,375,209
28,816,687
As of December 31, 2020, derived from the COVID-19 pandemic, the entity recorded
a loss in its brands El Portón, Stabucks Coffe, Burger King, Italiani’s and Vips, for an
amount of $220,000, affecting $58,163 to fixed assets and $161,837 to intangible assets.
234
235
Global Report 2020
15. Operating lease agreements
a.
Operating leases, until December 31, 2018
The real estate housing the majority of the stores of Alsea are leased from third parties. In
general terms, lease agreements signed for the operations of the Entity’s establishments
are for a term of between five and ten years, with fixed rates set in pesos. Lease
payments are generally revised annually and they increase on the basis of inflation.
Alsea considers that it depends on no specific lessor and there are no restrictions for the
entity as a result of having signed such agreements. Some of the Entity’s subsidiaries
have signed operating leases for company vehicles and computer equipment. In the
event of breach of any of the lease agreements, the Entity is required to settle in advance
all its obligations, including payments and penalties for early termination, and it must
immediately return all vehicles to a location specified by the lessor.
The amounts of the lease payments derived from the operating leases related to the
premises where the stores of the different Alsea brands are located are presented below.
Rental expense derived from operating lease agreements related to the real estate
housing the stores of the different Alsea brands are as follows:
Minimum lease payments
$
3,944,744
b.
Commitments non-cancellable operating leases
2018
Less than a year
Between one and five years
c.
Financial lease liabilities
2018
$
4,598,153
24,731,869
From 2014, the Entity has entered into leases that qualify as finance in the Vips brand,
which are recorded at present value of minimum lease payments or the market value of
the property, whichever is less, and are amortized over the period of the lease renewals
considering them. As of 2019, the lease liability on leases previously classified as finance
leases under IAS 18 and previously presented under “Obligations under finance leases” is
now presented under “Lease liability”. There were no changes in the recognized liability.
Future minimum lease payments and the present value of the minimum lease payments
are summarized below:
Less than a year
Between one and five years
More than five years
Less future finance charges
Minimum payments of
leases
2018
$
32,398
113,295
456,633
602,326
(311,152)
Minimum lease payments
$
291,174
Less than a year
Between one and five years
More than five years
Present value of minimum lease payments
Included in the consolidated financial statements as:
Short-term financial liability
Long-term financial liability
Present value of
minimum payments of
leases
2018
$
$
$
$
6,799
23,898
260,477
291,174
6,799
284,375
291,174
236
237
Global Report 2020
16.
Investment in subsidiaries
Name of subsidiary
Principal activity
2020
2019
2018
The Entity’s shareholding in the capital stock of its main subsidiaries is as follows:
Name of subsidiary
Principal activity
2020
2019
2018
Panadería y Alimentos para Food
Service, S.A. de C.V.
Café Sirena, S. de R.L de C.V.
Operadora de Franquicias Alsea,
S.A. de C.V. (1)
Operadora y Procesadora de
Productos de Panificación, S.A.
de C.V.
Distribution of Alsea brand foods
Operator of the Starbucks brand
100.00%
100.00% 100.00%
in Mexico
100.00%
100.00% 100.00%
Operator of the Burger King
brand in Mexico
80.00%
80.00%
80.00%
Operator of the Domino’s Pizza
brand in Mexico
100.00%
100.00% 100.00%
Operator of the Chili’s Grill &
Gastrosur, S.A. de C.V.
Bar brand in Mexico
100.00%
100.00% 100.00%
Fast Food Sudamericana, S.A.
brand in Argentina
100.00%
100.00% 100.00%
Operator of the Burger King
Fast Food Chile, S.A.
Starbucks Coffee Argentina,
S.R.L.
Servicios Múltiples
Empresariales ACD, S.A. de
C.V. (before SOFOM E.N.R.)
Asian Bistro Colombia, S.A.S.
Asian Bistro Argentina, S.R.L.
(2)
Operator of the Burger King
brand in Chile
Operator of the Starbucks brand
100.00%
100.00% 100.00%
in Argentina
100.00%
100.00% 100.00%
Operator of Factoring and
Financial Leasing in Mexico
100.00%
100.00% 100.00%
Operator of the P.F. Chang’s
brand in Colombia
Operator of the P.F. Chang’s
brand in Argentina
100.00%
100.00% 100.00%
-
-
100.00%
95.03%
95.03%
95.03%
Operadora Alsea en Colombia,
Operator of the Burger King
S.A.
brand in Colombia
Operator of the P.F. Chang’s
Asian Food, Ltda.
brand in Chile
100.00%
100.00% 100.00%
Grupo Calpik, S.A.P.I. de C.V.
Especialista en Restaurantes de
Comida Estilo Asiática, S.A.
de C.V.
Distribuidora e Importadora
Alsea, S.A. de C.V.
Italcafé, S.A. de C.V.
Grupo Amigos de San Ángel,
Operator of the California Pizza
Kitchen brand in Mexico
100.00%
100.00% 100.00%
Operator of the P.F. Chang’s
brand in Mexico
100.00%
100.00% 100.00%
Distributor of foods and
production materials for the
Alsea and related brands
Operator of Italianni’s brand
100.00%
100.00%
100.00% 100.00%
100.00% 100.00%
S.A. de C.V.
Operator of Italianni’s brand
100.00%
100.00% 100.00%
Grupo Amigos de Torreón, S.A.
de C.V.
Operator of Italianni’s brand
Operator of the Starbucks brand
100.00%
100.00% 100.00%
Starbucks Coffee Chile, S.A.
in Chile
100.00%
100.00% 100.00%
Estrella Andina, S.A.S.
Operadora Vips, S. de R.L.
de C.V.
OPQR, S.A. de C.V.
Food Service Project, S.L.
(Grupo Zena)
Operator of the Starbucks brand
in Colombia
70.00%
70.00% 70.00%
Operator of Vips brand
Operator Brand Cheesecake
Factory in Mexico
100.00%
100.00% 100.00%
100.00%
100.00% 100.00%
Operator of Spain
Operator of Chili’s Grill & Bar
66.24%
66.24%
66.24%
Gastrococina Sur, S.P.A.
Gastronomía Italiana en
Colombia, S.A.S.
in Chile
100.00%
100.00% 100.00%
Operator of Archie´s brand in
Colombia
97.60%
97.60%
97.60%
Sigla, S.A. (Grupo VIPS) (see
Note 2)
Operator of the VIPS, VIPS
Smart, Starbucks, GINOS,
Fridays and Wagamama brands
in Spain
Operator of Starbucks brand in
100.00%
100.00% 100.00%
Café Sirena Uruguay, S.A.
Uruguay
100.00%
100.00% 100.00%
Operadora GB Sur, S.A. de C.V.
Operator of the Burger King
and Domino’s Pizza brand in
Mexico
70.90%
70.90%
70.90%
(1)
Control over Operadora de Franquicias Alsea, S.A. de C.V. (OFA) - Based on the contractual agreements signed by the Entity and
other investors, the Entity is empowered to appoint and remove most of the members of the board of directors of OFA, which
has the power to control the relevant operations of OFA. Therefore, the Entity’s management concluded that the Entity has the
capacity to unilaterally control the relevant activities of OFA and therefore it has control over OFA.
Certain significant decisions, including the following are subject to the unanimous consent of the two stockholders: 1) the
approval or modification of the budget of the year, and 2) changes to the development schedule, which do not modify the
Entity’s control over the subsidiary.
238
239
Global Report 2020 17.
Investment in shares of associated companies
At December 31, 2020, 2019 and 2018, the investment in shares of associated companies is comprised of the Entity’s direct interest
in the capital stock of the companies listed below:
2020
(%)
2019
2018
Main operations
Interest in associated company
2020
2019
2018
Operadora de Restaurantes AYB
Polanco, S.A. de C.V. (1)
Other investments
Total
Operadora de Restaurantes AYB
Polanco, S.A. de C.V (1)
Other investments
Total
30.00%
30.00%
30.00%
30.00%
-
-
Operator of restaurants of the EF Entre
Fuegos brand and EF Entre Fuegos
Elite Steak House that operates in
Mexico
Operator of restaurants of the EF Entre
Fuegos brand and EF Entre Fuegos
Elite Steak House that operates in
Mexico
$
$
$
12,691
77,419
14,932
70,539
$
14,296
-
90,110
$
85,471
$
14,296
Equity in results
$
$
(1,550)
$
636
$ -
(1,097)
(1,578)
-
(2,647)
$
(942)
$ -
(1)
On September 12, 2018, AFP Asesores de Franquicias, S.A. of C.V. (subsidiary of Alsea) signed an investment contract for $14,296 that represents 30% of the
shareholding of Restaurant Operator AYB Polanco, S.A. de C.V.
Operadora de Restaurantes AYB Polanco, S.A. de C.V.
Total assets, liabilities, equity and profit and losses of the associated entity are as follows:
Current assets
Non-current assets
Current liabilities
Income
Net profit for the period
2020
15,410
38,160
11,268
$
$
$
2019
2018
14,263
$ -
40,924
$ -
5,413
$ -
2020
2019
2018
19,379
(5,166)
$
$
46,224
$ -
2,120
$ -
$
$
$
$
$
240
241
Global Report 2020
18.
Business combination
Subsidiaries acquired
Entity name
Main activity
Acquisition date
shares acquired
transferred
Proportion of
Consideration
(%)
Clover
Operator of the Starbucks brand
in France, Holland, Belgium and
Luxembourg
February 25, 2019
100%
$
1,109,933
Sigla, S.A.
Starbucks, GINOS, Fridays and
Operator of the VIPS, VIPS Smart,
Concept
Fair value
Current liabilities:
Suppliers and other accounts payable
Long-term liabilities:
Deferred income taxes
Other liabilities
Fair value of net assets
Considerations paid in cash
(590,044)
(183,845)
(140,812)
1,090,110
1,109,933
Wagamama brands in Spain
December 27, 2018
100%
$
10,618,697
Goodwill
$
19,823
The following transactions classify as a business combination and have been recognized by
utilizing the purchase method as of the acquisition date based on the following steps:
i.
ii.
iii.
Recognize and value the assets, liabilities and non-controlling interest.
In a business combination performed by stages, the buyer revalues its equity in the
acquired entity prior to the acquisition date at face value to recognize the resulting profit
or loss, as the case may be in results.
Identify intangible assets and determine goodwill.
Acquisition of Clover
During the months of January and February 2019, the acquisition process was concluded with
Starbucks Coffee Company to obtain the full license and acquire the store operations of the
Starbucks companies in France, the Netherlands, Belgium and Luxembourg and which together
with its subsidiaries they are called Clover.
The consideration paid for the acquisition was €50 million after debt payable in cash
(equivalent to MX $1,109,933).
The acquisition does not contemplate any contingent consideration.
The following is an analysis of the preliminary allocation of the cost of acquisition over the
values of the net assets acquired and that are in the measurement stage according to IFRS 3.
Since it is in the measurement period, the preliminary amounts below are subject to change:
Concept
Fair value
Current assets
Cash and cash equivalents
Customers, net
Inventories, net
Advance payments
Long-term assets:
Store equipment, leasehold improvements
and property, net
Intangible assets, net
Guarantee deposits
Deferred income taxes
$
188,675
199,078
15,648
110,237
477,359
936,600
55,927
21,287
The goodwill that arises from the acquisition of Clover, derives from the paid consideration that
included amounts related to the benefits of operating more than 270 establishments between
corporate and franchisees, expecting a market growth with a development plan for the next
five years in the market, likewise the adjacent benefits mainly income growth, synergies
expected in the operation and in the purchase of inputs. These benefits are not recognized
separately from goodwill because they do not meet the recognition criteria for identifiable
intangible assets.
Net cash flows related to the acquisition of the subsidiary total $921,258, corresponding to the
consideration paid in cash of $1,109,933, less cash and cash and cash equivalent balances
acquired for $188,675.
If the acquisition had occurred at beginning of year, Alsea’s consolidated net profit for the
period would have been $933,045 and revenues would have been $58,371,001. Acquisition
expenses related to this transaction amounted to $42,006, which is shown within other
expenses (income).
Acquisition of Sigla
On December 27, 2019, the acquisition process was concluded for the majority stockholders
and founders, led by the Arango family and ProA Capital Iberian Buyout Fund II, F.C.R., a Spanish
company, whereby 100% of the common stock of the company known as Sigla, S.A., established
under the laws of Spain and which, in conjunction with its subsidiaries is known as Grupo VIPS.
As of December 31, 2018, a consideration paid for €500 million euros was considered, however,
this figure was made up of a contribution made after the takeover by Grupo Zena and should
not have been considered as part of the price paid. The final consideration paid for the
acquisition was €471 million euros after debt payable in cash (equivalent to $10,618,697). At
the same time, the previous shareholders of Grupo Zena, the Arango family and ProA Capital,
reinvested €75 million (equivalent to MX $1,711,703 (thousand)), through a capital increase in
Grupo Zena, after which they became minority shareholders.
The acquisition does not contemplate any contingent consideration. This transaction
establishes a purchase and sale option for 12.70% of the share capital during the 7-year period
as of the acquisition date, which was recorded under IFRS 9, Financial Instruments: Presentation
(Note 22).
242
243
Global Report 2020
In December 2019, the acquisition measurement period concluded. An analysis of the
assignment of the acquisition cost based on the fair values of the acquired net assets at the
acquisition date is presented below. Certain interim accounting changes were made to the
acquisition at that date, as detailed below:
If the acquisition had occurred at beginning of year, Alsea’s consolidated net profit for the
period would have been $682,777 and revenues would have been $54,849,482. Acquisition
expenses related to this transaction amounted to $54,172, which is shown within other
expenses.
Preliminary
book entry
Adjustment for
valuation
Fair
value
19. Goodwill
Cash and cash equivalents
$
413,716
$ -
$
413,716
Concept
Current assets:
Accounts receivable and other accounts
receivable
Inventories
Advance payments
Long-term assets:
Store equipment, leasehold improvements
and property, net
Intangible assets, net
Guarantee deposits
Deferred income taxes
Current liabilities:
Accounts payable to suppliers and other
accounts payable
Current maturities of long-term debt
Long-term liabilities:
Other liabilities
Long – term debt, not including current
maturities
Deferred income taxes
Fair value of net assets
431,694
369,541
-
(231,897)
7,707
-
2,707,972
125,085
-
457,679
(206,975)
6,842,156
185,252
102,687
199,797
369,541
7,707
2,500,997
6,967,241
185,252
560,366
(1,802,471)
(1,713)
(159,043)
(1,961,514)
1,713
-
(150,654)
44,158
(106,496)
Considerations paid in cash
10,618,697
-
Goodwill
$
10,561,055
$
(4,885,635)
$
(2,481,009)
(12,198)
57,642
(1,788)
(1,698,335)
4,885,635
(2,482,797)
(1,710,533)
4,943,277
10,618,697
5,675,420
The goodwill that arises from the acquisition of Grupo VIPS, derives from the paid consideration
that included amounts related to the benefits of operating more than 400 establishments
between corporate and franchisees, expecting a market growth with a development plan
for the next five years in the market, likewise the adjacent benefits mainly income growth,
synergies expected in the operation and in the purchase of inputs. These benefits are not
recognized separately from goodwill because they do not meet the recognition criteria for
identifiable intangible assets.
Net cash flows related to the acquisition of the subsidiary total $10,204,981, corresponding to
the consideration paid in cash of $10,618,697, less cash and cash and cash equivalent balances
acquired for $413,716.
Assignment of goodwill to cash generating units
In order to carry out impairment tests, goodwill was assigned to the following cash
generating units:
Concept
2020
2019
Burger King
Domino’s Pizza
Chili’s
Italianni’s
Vips
Starbucks Coffee
Foster’s Hollywood
Grupo Vips Spain (See Note 18)
Ginos
Starbucks Spain
Fridays
British Sandwich Factory
Clover
Cañas and Tapas
$
$
1,336,967
1,078,622
26,614
785,816
3,058,697
368,513
198,598
3,662,326
1,224,095
917,727
6,006
349,609
19,823
-
1,336,967
1,078,622
26,614
785,816
3,058,697
368,513
198,598
3,374,722
1,127,665
845,431
5,534
322,068
19,823
6,838
$
2018
(Restated)
1,336,967
1,078,622
26,614
785,816
3,058,697
368,513
198,598
3,374,722
1,127,665
845,431
5,534
322,068
-
6,838
$
13,033,413
$
12,555,908
$
12,536,085
As of December 31, 2020, 2019 and 2018, the studies carried out on the impairment tests
concluded that the goodwill has no impairment.
244
245
Global Report 2020
20.
Long-term debt
Long-term debt at December 31, 2020, 2019 and 2018 is comprised of unsecured loans, as shown below:
Bank
Type of credit
Currency
Rate
Maturity
2020
2019
2018
(Restated)
Sindicado
Sindicado
Sindicado
Bank of America
Sumitomo
Banco Nacional de Comercio Exterior
S.N.C. (Bancomext)
Banco Santander, S.A.
Scotiabank Inverlat, S.A.
Scotiabank Inverlat, S.A.
Scotiabank Inverlat, S.A.
Banco Santander, S.A.
Banco Santander, S.A.
Banco Santander, S.A.
Banco Santander, S.A.
Banco Santander, S.A.
Scotiabank Inverlat, S.A.
Scotiabank Inverlat, S.A.
BBVA Bancomer, S.A.
Sindicado
Clover ING
Clover Rabobank
Banca March
Banco Unión Argentina
Banco Unión Argentina
Banco HSBC, S.A.
Banco Citibank
Banco Citibank Argentina
Santander Chile, S.A.
Santander Chile, S.A.
Banco de Chile
Bankia Icos
Sabadel Icos
Santander Icos
BBVA Icos
Ibercaja Icos
Abanca Icos
Caja rural Icos
BNP CIC
Santander Totta
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Mexican pesos
Variable rate TIIE +1.85%
Euros
Euros
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Mexican pesos
Euros
Variable rate Euribor +1.25%
Euribor + 3.25%
6.11% (Fixed rate)
Euribor + 1.60%
Variable rate TIIE +1%
Variable rate TIIE +1.85%
Variable rate TIIE +0.45%
Variable rate TIIE +1.1%
Variable rate TIIE +2.15%
Variable rate TIIE +1.85%
Variable rate TIIE +0.65%
Variable rate TIIE +0.50%
Variable rate TIIE +0.65%
Euribor + 1.35%
Mexican pesos
Variable rate TIIE +0.45%
Mexican pesos
Mexican pesos
Argentine pesos
Euros
Euros
Euros
Argentine pesos
Argentine pesos
Argentine pesos
Argentine pesos
Argentine pesos
Chilean pesos
Chilean pesos
Chilean pesos
Euros
Euros
Euros
Euros
Euros
Euros
Euros
Euros
Euros
Variable rate TIIE +0.45%
Variable rate TIIE +2.75%
Euribor + 1.25%
Euribor + 1.95%
Euribor + 1.95%
Euribor + 1.50%
29% (Fixed rate)
29.25% (Fixed rate)
29% (Fixed rate)
29.25% (Fixed rate)
29.50% (Fixed rate)
3.6% (Fixed rate)
Variable rate TIIE +0.41%
29% (Fixed rate)
Euribor + 1.85%
Euribor + 2.20%
Euribor + 2.10%
Euribor + 2.75%
Euribor + 1.75%
Euribor + 1.75%
Euribor + 1.60%
Euribor + 2%
Euribor + 1.50%
Less - current portion
Long-term debt maturities
2023
2023
2021
2020
2021
2025
2021
2020
2021
2025
2022
2020
2020
2020
2022
2020
2020
2020
2023
2022
2022
2020
2019
2019
2019
2019
2019
2020
2021
2024
2022
2023
2022
2025
2023
2023
2023
2025
2026
$
4,432,195
$
4,533,800
$
10,312,875
8,969,600
2,500,000
-
-
-
-
599,223
-
-
1,668,413
155,000
1,668,411
113,628
3,681,937
8,872,628
1,000,000
1,661,002
152,893
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
285,993
-
400,000
400,000
285,369
200,000
120,000
130,000
200,000
200,000
400,000
19,466
819,999
19,466
27,253
106,157
107,079
71,628
151,880
993,526
-
-
283,594
287,500
243,802
-
-
-
-
-
-
-
1,145,869
411,072
243,802
411,072
-
205,536
-
-
-
-
-
-
121,504
83,182
93,888
-
-
243,802
-
136,773
-
341,323
-
243,801
-
24,380
48,760
36,571
-
-
-
365,704
-
36,570
-
-
-
-
-
-
-
-
-
-
-
-
24,233,053
(24,233,053)
17,408,116
(305,668)
18,626,757
(2,586,553)
$ -
$
17,102,448
$
16,040,204
246
247
Global Report 2020
Annual debt maturities at December 31, 2020 are as follows:
21. Debt instruments
Year
2021
2022
2023
2024
2025
$
Amount
4,838,775
6,332,063
11,244,335
728,380
1,089,500
$
24,233,053
Bank loans include certain affirmative and negative covenants, such as maintaining certain
financial ratios. At December 31, 2020, 2019 and 2018, all such obligations have been duly met.
The declaration of the COVID-19 pandemic that emerged in 2020 had a great impact on the
restaurant industry and on the Entity’s operations, affecting the operation of restaurants.
The foregoing had effects on income, operating results, and cash generation, mainly. As of
December 31, 2020, the entity has to comply with certain covenants, as well as to maintain
certain financial ratios related to bank loans, which were met at year-end; However, there are
other covenants, as well as financial ratios for the twelve-month period ending December
31, 2021, from which only waivers were obtained by their bank creditors until June 30, 2021,
and at year-end the Entity has no certainty they could be complied, as established by IAS
1 Presentation of Financial Statements, indicating the long-term debt shall be classified
as current. The amount of this debt was reclassified in the short term in the consolidated
statement of financial position amounting to $19,394 million, causing short-term liabilities to
significantly exceed short-term assets at that date.
On April 5, 2021, the Entity formalized a new negotiation of the conditions of the credit, which
establish new debt obligations, which allows the Entity to have certainty about its fulfillment for
the twelve-months period ending December 31, 2021.
The Entity has undertaken a series of internal actions to ensure the viability and the success
of its operations will depend upon the continuity of the pandemic and the measures taken by
different governments with respect to the operation of restaurants, as well as the ability of the
management to generate income and liquidity.
The Entity’s management is in the process of formalizing the contractual extension of the term
of its short-term loan contracts to renegotiate the maturities that it will have during 2021, which
will be formally approved during May 2021.
The Entity as of December 31, 2020, has lines of credit contracted for 75,700 million Euros.
In May 2019, the Entity placed of debt instruments worth $1,350,000 over 5 years as from the
issuance date, maturing in May 2024. Those instruments will accrue interest at the 28-day TIIE
rate plus 0.95 percentage points; and other debt instrument worth $2,650,000 over 7 years as
from the issue date, maturing in May 2026. Those instruments will accrue interest at a fixed rate
of 10.01%.
In October 2017, the Entity placed of debt instruments worth $1,000,000 over 5 years as from
the issuance date, maturing in September 2022. Those instruments will accrue interest at the
28-day TIIE rate plus 0.90 percentage points; and other debt instrument worth $2,000,000 over
10 years as from the issue date, maturing in September 2027. Those instruments will accrue
interest at a fixed rate of 8.85%.
In March 2015, the Entity placed of debt instruments worth $3,000,000 over 5 years as from the
issuance date, maturing in March 2020.
Those instruments will accrue interest at the 28-day TIIE rate plus 1.10 percentage points; and
other debt instrument worth $1,000,000 over 10 years as from the issue date, maturing in March
2025. Those instruments will accrue interest at a fixed rate of 8.07%.
The balance at December 31, 2020, 2019 and 2018 amounts to $7,979,149, $7,973,765 and
$6,983,244, respectively.
Year
2022
2024
2025
2026
2027
$
Amount
1,000,000
1,350,000
979,149
2,650,000
2,000,000
$
7,979,149
As of December 31, 2020, the entity has to comply with certain covenants, as well as to
maintain certain financial ratios related to bank loans, which were met at year-end; However,
there are other covenants, as well as financial ratios for the twelve-month period ending
December 31, 2021, from which only waivers were obtained by their bank creditors until June
30, 2021, and at year-end the Entity has no certainty they could be complied, as established
by IAS 1 Presentation of Financial Statements, indicating the long-term debt shall be classified
as current. The amount of this debt was reclassified in the short term in the consolidated
statement of financial position amounting to $7,979 million, causing short-term liabilities to
significantly exceed short-term assets at that date.
248
249
Global Report 2020
22.
Long-term liabilities, option to sell noncontrolling interest
In October 2014, the Entity acquired Grupo Zena; as a result, it has the right to sell to Alsea
its noncontrolling interest for 28.24% in other investors, upon completion of the fourth year
after the acquisition (original agreement). In compliance with IFRS 9, Financial Instruments,
the present value of the estimated debt that will be liquidated at the time the sale option is
exercised should be recognized in accordance with the clauses of the contract. The initial
recognition of such debt is recognized as a supplemental equity account and every year its
revaluation affects the result for the year.
On October 30, 2018, an agreement was signed for purchase and sale options, termination
of the stockholders’ agreement and a commitment to sign a new stockholders’ agreement,
ratified on December 27, 2019, whereby the following agreements were reached:
1.
2.
3.
4.
5.
Terminate the original stockholders’ agreement and formalize this new agreement.
The minority stockholders invested €75 million in Grupo Zena, which resulted in the
acquisition of 7.7% of the common stock of Grupo Zena by such minority stockholders.
Britania Investments, S.A.R.I. has the right to sell to Alsea its noncontrolling interest in other
investors equal to 21.06%, in April 2019. In compliance with IFRS 9, Financial Instruments,
the present value of the estimated debt that will be liquidated at the time the sale option
is exercised should be recorded in accordance with the contract clauses. The net amount
between termination of the agreement mentioned in the first point and recognition of the
new right was recorded net in the consolidated statement of changes in stockholders’
equity under Reserve for purchase of noncontrolling interest, for the amount of $659,252
as of December 31, 2019.
Britania Investments, S.A.R.I., on June 20, 2019, signs a new agreement in which a fixed
amount of €111 million euros is agreed, which will be liquidated when exercising the put
option according to the clauses of the new agreement to take effect no later than June
2022. The present value of the estimated debt as of December 31, 2020 and 2019 as of
$2,701,407 and $2,304,864, respectively.
In the new agreement Grupo Zena has the right to sell to Alsea 12.7% of its noncontrolling
interest in other investors upon completion of the seventh year after the acquisition;
such right will be liquidated through delivery of the variable number of shares of Alsea.
Consequently, in accordance with IFRS 9, it is accounted for as a financial derivative that
will be settled at the time the sale option is exercised in accordance with the contract
clauses. The liability will be restated every year up to the date on which the option is
exercised, and the effects generated subsequently will be recognized in the statement of
income. The financial liability derived from the sale option as of December 31, 2020 and
2019 is $50,178 and $17,436, respectively.
23.
Income taxes
The Entity is subject to ISR. Under the ISR Law the rate for 2020, 2019 and 2018 was 30% and
will continue at 30% and thereafter. The Entity incurred ISR on a consolidated basis until 2013
with its Mexican subsidiaries. As a result of the 2014 Tax Law, the tax consolidation regime was
eliminated, and the Entity and its subsidiaries have the obligation to pay the long-term income
tax benefit calculated as of that date over a five-year period beginning in 2014, as illustrated
below.
Pursuant to Transitory Article 9, section XV, subsection d) of the 2018 Tax Law, given that as of
December 31, 2014, the Entity was considered to be a holding company and was subject to
the payment scheme contained in Article 4, Section VI of the transitory provisions of the ISR
law published in the Federal Official Gazette on December 7, 2009, or article 70-A of the ISR
law of 2013 which was repealed, it must continue to pay the tax that it deferred under the tax
consolidation scheme in 2007 and previous years based on the aforementioned provisions,
until such payment is concluded.
The ISR liability as of December 31, 2017 is $19,892 related to the effects for benefits and fiscal
deconsolidation, which was paid in 2018.
In Chile, in September 2014, the government gradually enacted a rate increase in its tax reform
according to the following 25.5% for 2017, by 2018, 2019 and 2020 the rate will be 27%, according
to the taxation system chosen. The change in The First Category tax was enacted in July 2010.
In Colombia, the applicable tax provisions stipulate that the rate applicable to income tax for
taxable years 2018 and 2019 is 33%, 32% for 2020, 31% for 2021 and 30% from the 2022 taxable
year. Likewise, for taxable bases over $800,000,000 Colombian pesos must settle a surcharge
of 4% for the year 2018 that will not be applicable from 2019. In any event, from the 2018 taxable
year, the taxable amount of income tax may not be less than 3.5% of the liquid assets of the
immediately before, this percentage will be reduced to 1.5% for taxable years 2019 and 2020
and 0% from the 2021 taxable year.
In addition, tax losses determined from 2017 may be offset by liquid income earned within
twelve (12) years. The term for offsetting presumptive income excesses will remain five (5)
years. These tax credits cannot be tax reset.
In Argentina, i.- Income tax: The Entity applies the deferred method to recognize the accounting
effects of income tax; the tax rate was 30% for the year 2018 and 2019 and 25% from 2020.;
this change was suspended until fiscal years commrising from 1 January 2021 inclusive, the
reduction in the aforementioned income tax aliquot will remain at 30% during the suspension
period. In addition, withholding tax on dividends for accrued profits will be 7% during the same
period. (ii.- Presumed minimum earnings tax (IGMP), the company determined the IGMP by
applying the 1% rate on computable assets at the end of the 2018 financial year; from 2019 on
this tax was repealed. -
In Spain, tax reforms, which include the reduction of this tax rate 25% in 2020, 2019 and 2018, with
the exception of credit institutions and entities engaged in hydrocarbon exploration, research
and exploration. Newly created companies will pay tax at the 15% rate during the first tax period
in which their tax basis is positive and in the following period. As of 2021, the tax exemption on
dividends and capital gains is limited from 100% to 95%, so that 5% of income will be taxed in
Spain without said adjustment being eliminated in consolidation. Similarly, as part of these tax
reforms, tax losses will be applicable without a time limitation; until 2015, the right to apply such
losses expired after 18 years.
250
251
Global Report 2020 The tax rates established for the financial year 2020, in the rest of the countries in which Alsea is
present in Europe are as follows:
•
•
•
•
•
a.
Portugal: 21%.
France: 28%
Netherlands: First 200,000 euros at 16.5%, the rest at 25.00%.
Belgium: 25%
Luxembourg: 16.05% plus solidarity and municipal surcharges (includes the solidarity
surcharge of 7% on the CIT amount).
Income taxes recognized in income
Current
Deferred
2020
465,379
(1,664,467)
(1,199,088)
$
$
$
$
2019
2018
988,600
(353,180)
635,420
$
$
836,509
(138,215)
698,294
The tax expense attributable to income before ISR differs from that arrived at by applying
the 30% statutory rate in 2020, 2019 and 2018 due to the following items:
2020
2019
2018
Statutory income tax rate
Non-deductible expenses
Effects of inflation and others
Fixed asset update
Others
(30%)
2%
3%
1%
1%
30%
6%
9%
(3%)
(5%)
30%
6%
11%
(7%)
(2%)
Effective consolidated income tax
rate
(23%)
37%
38%
b.
Deferred taxes in the statement of financial position
Following is an analysis of deferred tax assets shown in the consolidated statements of
financial position:
Deferred (assets) liabilities:
Estimation for doubtful
accounts and inventory
obsolescence
Liability provisions
Advances from customers
Unamortized tax losses
Store equipment, leasehold
improvements and property
Advance payments
2020
2019
2018
(restated)
$
(29,897)
(995,418)
(64,507)
(969,854)
1,596,223
162,095
$
$
(29,048)
(657,526)
(121,311)
(568,505)
1,748,904
156,988
(28,802)
(743,666)
(38,180)
(586,659)
2,228,491
73,293
$
(301,358)
$
529,502
$
904,477
c.
Deferred tax in statement of financial position
The following is the analysis of deferred tax assets (liabilities) presented in the
consolidated statements of financial position:
2020
2019
2018
(restated)
Deferred tax assets
Deferred tax liabilities
$
4,665,412
4,364,054
$
3,835,593
4,365,095
$
2,867,571
3,772,048
$
(301,358)
$
529,502
$
904,477
252
253
Global Report 2020
d.
Deferred income tax balances
Temporary differences:
2020
Beginning
balance
Recognized in profit
Recognized in
or loss
stockholders’ equity
Acquisitions
Ending
balance
Estimation for doubtful accounts and inventory obsolescence
$
(29,048)
$
(849)
$ -
$ -
$
Liability provisions
Advances from customers
Store equipment, leasehold improvements and property
Prepaid expenses
(657,526)
(121,311)
1,748,904
156,988
1,098,007
(250,628)
(87,263)
-
56,804
-
-
(1,073,552)
920,870
-
5,107
-
-
(1,263,118)
833,607
-
Tax loss carryforwards and unused tax credits:
Tax loss carryforwards
(568,505)
(401,349)
-
-
Temporary differences:
2019
$
529,502
$
(1,664,467)
$
833,607
$ -
Beginning
balance
Recognized in profit
Recognized in
or loss
stockholders’ equity
Acquisitions
Estimation for doubtful accounts and inventory obsolescence
Liability provisions
Advances from customers
Store equipment, leasehold improvements and property
$
(28,802)
$
(246)
(743,666)
(38,180)
2,228,491
$ -
$ -
177,382
5,437
(83,131)
-
-
(549,034)
156,613
(96,679)
(87,166)
Prepaid expenses
73,293
83,695
-
-
$
$
Tax loss carryforwards and unused tax credits:
1,491,136
(371,334)
162,050
(183,845)
Tax loss carryforwards
(586,659)
18,154
-
-
$
904,477
$
(353,180)
$
162,050
$
(183,845)
$
(29,897)
(995,417)
(64,507)
1,596,222
162,095
668,496
(969,854)
(301,358)
Ending
balance
(29,048)
(657,526)
(121,311)
1,748,904)
156,988
1,098,007
(568,505)
529,502
Temporary differences
2018 (restated)
Beginning
balance
Recognized in profit
or loss
Recognized in
stockholders’ equity
Acquisitions
Ending
balance
Estimation for doubtful accounts and inventory obsolescence
$
(2,347)
$
(26,455)
Liability provisions
Advances from customers
Store equipment, leasehold improvements and property
Prepaid expenses
(623,225)
(164,635)
471,310
123,515
$ -
$ -
$
(125,079)
78,030
(73,392)
126,455
-
-
30,044
196,829
1,530,308
(50,222)
-
-
Tax loss carryforwards and unused tax credits
(195,382)
(45,257)
274,859
1,456,916
(28,802)
(743,666)
(38,180)
2,228,491
73,293
1,491,136
Tax loss carryforwards
(186,952)
(92,958)
-
(306,749)
(586,659)
$
(382,334)
$
(138,215)
$
274,859
$
1,150,167
$
904,477
254
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Global Report 2020
The benefits of restated tax loss carryforwards for which the deferred ISR asset and tax
credit, respectively, have been (in such case partially) recognized, can be recovered
subject to certain conditions. Expiration dates and restated amounts as of December 31,
2020, are:
Year of maturity
Amortizable losses
Country
2023
2024
2025
2026
2027
2028
2029
2030
Losses of entities abroad without expiration
Losses of entities abroad without expiration
2022
2023
2023
Losses of entities abroad without expiration
24.
Employee retirement benefits
Defined contribution plans
$
12,103
84,111
261,962
102,966
130,658
259,130
996,703
1,555,070
2,122,390
812,010
234
39,315
28,055
211
$
6,404,918
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Spain
Chile
Argentina
Argentina
Argentina
Colombia
Retirement plan is established with the objective of offering benefits in addition to and
complementary to
those provided by other public retirement plans.
The total revenue recognized in the consolidated statements of income and other
comprehensive income is $(31,277), $69,689 and $35,411 in 2020, 2019 and 2018, respectively.
The net cost for the period related to obligations derived from seniority premiums amounted to
$23,838, $1,669 and $($522) in 2020, 2019 and 2018, respectively.
25.
Financial instruments
a.
Capital risk management
The Entity manages its capital to ensure that the companies that it controls are able
to continue operating as a going concern while they maximize the yield for their
shareholders by streamlining the debt and equity balances. The Entity’s general strategy
has not changed in relation to 2019.
The Entity’s capital structure consists of the net debt (the loans described in Note 20,
compensated by cash balances and banks) and the Entity’s capital (made up of issued
capital stock, reserves and retained earnings, as shown in Note 26).
The Entity is not subject to external requirements to manage its capital.
The main purpose for managing the Entity’s capital risk is to ensure that it maintains a
solid credit rating and sound equity ratios to support its business and maximize value to
its shareholders.
The Entity manages its capital structure and makes any necessary adjustments based on
changes in economic conditions. In order to maintain and adjust its capital structure, the
Entity can modify the dividend payments to the shareholders, reimburse capital to them
or issue new shares. For the years ended December 31, 2020, 2019 and 2018, there were no
modifications to the objectives, policies or processes pertaining to capital management.
The following ratio is used by the Entity and by different rating agencies and banks to
measure credit risk.
-
Net Debt to EBITDA = Net Debt / EBITDA ltm.
At December 31, 2019 and 2018, the financial restriction established in the Entity’s
loan agreements relates to the Net Debt to EBITDA ratio for the last twelve months.
The Entity complied with the established ratio.
As of December 31, 2020, the company agreed, through a waiver, not to measure
the financial restriction established in the Entity’s credit agreements corresponding
to the ratio of Total Debt to EBITDA in the last twelve months.
b.
Financial instrument categories
Financial assets
Cash and cash equivalents
$
3,932,409
$
2,568,771
$
1,987,857
2020
2019
2018
(restated)
Loans and accounts receivable at
amortized cost
Financial liabilities at amortized cost
Suppliers by merchandise
Factoring of suppliers
Current maturities of long-term debt
Current maturities of financial lease
1,620,775
1,447,221
793,221
2,949,829
654,115
24,233,053
2,327,048
889,046
305,668
2,290,788
757,976
2,586,553
liabilities
4,207,633
3,915,338
6,799
Long-term debt, not including current
maturities
Non-current financial lease liabilities
Debt instruments
-
21,092,417
7,979,149
17,102,448
19,542,694
7,973,765
16,040,204
284,375
6,983,244
256
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Global Report 2020
c.
Objectives of managing financial risks
e. Currency exchange risk management
The Entity carries out transactions in foreign currency and therefore it is exposed to
exchange rate fluctuations. Exposure to exchange rate fluctuations is managed within
the parameters of approved policies, using foreign currency forwards contracts. Note 33
shows foreign currency positions at December 31, 2020, 2019 and 2018. It also shows the
exchange rates in effect at those dates.
USD hedging and its requirements are determined based on the cash flow budgeted
by the Entity, and it is aligned to the current Risk Management Policy approved by the
Corporate Practices Committee, the General Director’s office and the Administration and
Financial Director’s office. The policy is overseen by the Internal Audit Department.
The exchange rate risk expressed in a foreign currency (USD) is internally monitored on
a weekly basis with the positions or hedges approximating maturity at market exchange
rates. The agent calculating or valuing the derivative financial instruments is in all cases
the counterparty designated under the master agreement.
The purpose of the internal review is to identify any significant changes in exchange rates
that could pose a risk or cause the Entity to incur in non-compliance with its obligations.
If a significant risk position is identified, the Corporate Treasury Manager informs the
Corporate Financial Director’s office.
Among the main associated financial risks that the Entity has identified and to which it is
exposed are: (i) market (foreign currency and interest rate), (ii) credit, and (iii) liquidity.
The Entity seeks to minimize the potential negative effects of the aforementioned risks
on its financial performance by applying different strategies. The first involves securing
risk coverage through derivative financial instruments. Derivative instruments are only
traded with well-established institutions and limits have been set for each financial
institution. The Entity has the policy of not carrying out operations with derivative financial
instruments for speculative purposes.
d. Market risk
The Entity is exposed to market risks resulting from changes in exchange and interest
rates. Variations in exchange and interest rates may arise as a result of changes in
domestic and international economic conditions, tax and monetary policies, market
liquidity, political events and natural catastrophes or disasters, among others.
Exchange fluctuations and devaluation or depreciation of the local currency in the
countries in which Alsea participates could limit the Entity’s capacity to convert local
currency to US dollars or to other foreign currency, thus affecting their operations,
results of operations and consolidated financial position. The Entity currently has a
risk management policy aimed at mitigating present and future risks involving those
variables, which arise mainly from purchases of inventories, payments in foreign
currencies and public debt contracted at a floating rate. The contracting of derivative
financial instruments is intended to cover or mitigate a primary position representing
some type of identified or associated risk for the Entity. Instruments used are merely for
economic hedging purposes, not for speculation or negotiation.
The types of derivative financial instruments approved by the Entity for the purpose of
mitigating exchange fluctuation and interest rate risk are as follows:
-
-
-
-
USD/MXN exchange-rate forwards contracts
USD/MXN exchange-rate options
Interest Rate Swaps and Swaptions
Cross Currency Swaps
Given the variety of possible derivative financial instruments for hedging the risks
identified by the Entity, the Director of Corporate Finance is authorized to select such
instruments and determine how they are to be operated.
258
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Global Report 2020 The following table shows a quantitative description of exposure to exchange risk based on foreign currency forwards and options agreements contracted by the Entity in USD/MXN, in effect as of December 31, 2020,
2019 and 2018.
Type of derivative,
security or contract
Position
Objective of
the
hedging
Underlying / reference variable
face value (thousands of USD)
Notional amount/
Fair value
(thousands of USD)
Amounts of
maturities
31/12/2020
31/12/2019
31/12/2018
31/12/2020
31/12/2019
31/12/2018
31/12/2020
31/12/2019
31/12/2018
(thousands of
current
previous
previous
current
previous
previous
current
previous
previous
USD)
Forwards
Long
Economic
21.0200
USDMXN
19.8727
USDMXN
19.6512
USDMXN
78,100
28,350
62,650
$ 1,738
$ 2,450
$
147
78,100
Options
Long
Economic
20.9100
USDMXN
19.8727
USDMXN
19.6512
USDMXN
11,200
31,250
56,400
$ 2,697
$
267
$ 18,880
11,200
1.
Foreign currency sensitivity analysis
At December 31, 2020, 2019 and 2018, the Entity has contracted hedging in order to purchase US dollars for the next 12 months, a total of $89.3, $59 and $119 million dollars, respectively, at the average exchange
rate of $21.69, $19.45 and $19.16 pesos per US dollar, respectively the valuation is based on an average exchange rate of $19.94, $19.00 and $19.65, pesos per US dollar, respectively, over the next 12 months as of
December 31, 2020, 2019 and 2018. The initial price of currency derivatives is ($89.3), $(3.9) and $(10.9) million Mexican pesos, respectively, payable to the Entity.
Given the values and amounts of exchange rate hedges, management does not foresee a significant risk that could affect its results at the December 31, 2020 close or the obligations contracted under current
operations that will expire during the next 12 months. The Entity does not match its net asset position with financial liabilities denominated in US dollars because it is not representative or material. The analysis
shows only the effect on hedging for purchases of US dollars contracted and in effect at the December 31, 2020 closing.
Management considers that in the event of a stress scenario as the one described above, the Entity’s liquidity capacity would not be affected, there would be no negative effects on its operations, nor would
compliance with the commitments assumed in relation to contracted derivative financial instruments be at risk.
2.
Foreign currency forwards and options contracts
At December 31, 2020, 2019 and 2018, a total of 539, 603 and 465 derivative financial instrument operations (forwards and options) were carried out, respectively, for a total of 240.3, 329.7 and 275.6 million US
dollars, respectively. The absolute value of the fair value of the derivative financial instruments entered into per quarter over the year does not comprise more than 5% of assets, liabilities or total consolidated
capital, or otherwise 3% of the total consolidated sales for the last quarter. Therefore, the risk for the Entity of exchange rate fluctuations will have no negative effects, nor will it affect its capacity to carry out
derivative financial instrument operations.
At December 31, 2020, 2019 and 2018, Alsea has contracted DFI’s to purchase US dollars in the next twelve months for a total of approximately 89, 59 and 119 million USD, at the average exchange rate of $20.69,
$19.45 y $19.16 pesos to the dollar, respectively.
At December 31, 2020, 2019 and 2018, the Entity had contracted the financial instruments shown in the table above.
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Global Report 2020
Such contracts allow the Entity to mitigate interest rate change risks on the fair value of
the debt issued at a fixed interest rate and the exposure to cash flows on the debt issued
at a variable interest rate. The starting price of the swaps of interest at the end of the
period being reported is determined by discounting future cash flows using the curves
at the end of the period being reported and the credit risk inherent to the contract, as
described further on in these consolidated financial statements. The average interest rate
is based on current balances at the end of the period being reported.
The following table shows a quantitative description of exposure to interest rate risk
based on interest rate forwards and options agreements contracted by the Entity, in
effect as of December 31, 2020, 2019 and 2018.
f.
Interest rate risk management
The Entity faces certain exposure to the volatility of interest rates as a result of contracting
bank and public stock exchange debt at fixed and variable interest rates. The respective
risks are monitored and evaluated monthly on the basis of:
-
-
-
-
Cash flow requirements
Budget reviews
Observation of the market and interest rate trends in the local market and in the
countries in which Alsea operates (Mexico, Argentina, Chile and Colombia).
Differences between negative and positive market rates
The aforementioned evaluation is intended to mitigate the Entity’s risk concerning
debt subject to floating rates or indicators, to streamline the respective prices and to
determine the most advisable mix of fixed and variable rates.
The Corporate Treasury Manager is responsible for monitoring and reporting to the
Administration and Financial Director any events or contingencies of importance that
could affect the hedging, liquidity, maturities, etc. of DFI’s. He in turn informs Alsea’s
General Management of any identified risks that might materialize.
The type of derivative products utilized and the hedged amounts are in line with the
internal risk management policy defined by the Entity’s Corporate Practices Committee,
which contemplates an approach to cover foreign currency needs without the possibility
to carry out speculative operations.
At December 31, 2020, the Entity has a total debt of $32,212 million pesos, this debt was
contracted at a fixed rate and a variable rate; in addition to the above, it was decided to
apply a risk management strategy in order to you mitigate the fluctuations of the interest
rate staying in a mix of rates where 39% is fixed at a weighted rate of 8.11%, and 61% at a
variable rate, this strategy has generated a positive result for the Entity.
Interest rate swap contracts
According to contracts for swaps of interest (Interest Rate Swap - ISR), the Entity
agrees to exchange the difference between the amounts of the fixed and variable
rates calculated on the agreed notional amount.
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Global Report 2020
Type of derivative,
security or contract
Position
Objective of
the
hedging
Underlying / reference variable
Notional amount/
face value (USD)
Fair value (USD)
31/12/2020
current
31/12/2019
previous
31/12/2018
previous
31/12/2020
current
31/12/2019
previous
31/12/2018
previous
31/12/2020
current
31/12/2019
previous
31/12/2018
previous
Amounts of
expiration
(thousands of
USD)
IRS Plain Vanilla
Long
Coverage
6.7376% -
TIIE 28 d
7.5002% -
TIIE 28 d
8.5956% -
TIIE 28 d
208,817
207,495
187,853
$
(1,302)
$ 11,565
$ 20,413
$ 207,495
IRS Plain Vanilla
Long
Economic
6.7376% -
TIIE 28 d
7.5002% -
TIIE 28 d
8.5956% -
TIIE 28 d
87,032
144,161
107,326
$
(906)
$
723
$
(7,251)
$ 144,161
Capped IRS
Long
Economic
6.7376% -
TIIE 28 d
7.5002% -
TIIE 28 d
8.5956% -
TIIE 28 d
65,211
32,890
33,263
$
(766)
$
89
$
(53)
$ 32,890
1.
Analysis of interest rate sensitivity
The following sensitivity analysis has been determined on the basis of the exposure to interest rates of derivative instruments and of non-derivative instruments at the end of the period being reported. In the
case of variable rate liabilities, an analysis is prepared assuming that the amount of the liability held at the end of the period being reported has been the amount of the liability throughout the year.
•
•
•
The first stress scenario considered by the Entity’s management is a 200 bps increase in the 28-day TIIE reference rate while the rest of the variables remain constant. With the mix in the hedging portfolio of
plain vanilla interest rate swaps and the swaptions contracted at the December 31, 2020 close, the increase in financial costs is of approximately $247.8 million. The above effect arises because the barriers
protecting the increase in the interest rates are exceeded, which leaves the Entity exposed to market rates, with approximately 49% coverage of the debt.
A 150 bps increase in the 28-day TIIE rate represents an increase in the financial cost of approximately $186.3 million, which poses no risk to the Entity’s liquidity nor gives rise to a negative effect on the
business’s operations or in assuming commitments for contracting interest rate derivative financial instruments.
Lastly, the scenario with a 100 bps increase in the 28-day TIIE reference rate would have a positive effect on the financial cost of approximately $124.8 million.
The previous scenarios were carried out on the bank and stock market debt contracted in Mexican pesos with 28-day TIIE floating rate, which represents about 7.26% of the total debt contracted by the Entity.
g. Credit risk management
Credit risk refers to the uncertainty of whether one or several of the counterparties will comply with their contractual obligations, which would result in a financial loss for the Entity. The Entity has adopted the
policy of only operating with solvent institutions and obtaining sufficient collateral, when deemed necessary, as a way to mitigate the risk of financial loss caused by non-compliance.
The Entity has identified in its portfolio a credit risk among its derivative financial instruments designed as cash flow hedges, since are measured at fair value.
The Entity’s exposure and the credit ratings of its counterparties are supervised on a regular basis. The maximum credit exposure levels allowed are established in the Entity’s risk management internal
policies. Credit risk over liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings issued by accepted rating agencies.
In order to reduce to a minimum, the credit risk associated to counterparties, the Entity contracts its financial instruments with domestic and foreign institutions that are duly authorized to engage in those
operations and which form part of the Mexican Financial System.
With respect to derivative financial instruments, the Entity signs a standard agreement approved by the International Swaps and Derivatives Association Inc. with each counterparty along with the standard
confirmation forms for each operation. Additionally, the Entity signs bilateral guarantee agreements with each counterparty that establish the margin, collateral and credit line policies to be followed. Such
agreements, commonly known as “Credit Support Annexes”, establish the credit limits offered by credit institutions that would apply in the event of negative scenarios or fluctuations that might affect the fair
264
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Global Report 2020
the Entity and recognized credit ratings. The only instruments authorized for temporary
investments are those issued by the federal government, corporate and banking
institutions under the repurchase modality.
h.
Liquidity risk management
The ultimate responsibility for managing liquidity lies in the Financial Director, for which
purpose the Entity has established policies to control and follow up on working capital,
thus making it possible to manage the Entity’s short-term and long-term financing
requirements. In keeping this type of control, cash flows are prepared periodically to
manage risk and maintain proper reserves, credit lines are contracted and investments
are planned.
The Entity’s main source of liquidity is the cash earned from its operations.
The following table describes the contractual maturities of the Entity’s financial
liabilities considering agreed payment periods. The table has been designed based
on undiscounted, projected cash flows and financial liabilities considering the
respective payment dates. The table includes the projected interest rate flows and the
capital disbursements made towards the financial debt included in the consolidated
statements of financial position. If interest is agreed at variable rates, the undiscounted
amount is calculated based on the interest rate curves at the end of the period being
reported. Contractual maturities are based on the minimum date on which the Entity
must make the respective payments.
value of open positions of derivative financial instruments. Such agreements establish
the margin calls for instances in which credit facility limits are exceeded.
In addition to the bilateral agreements signed further to the ISDA maser agreement,
known as Credit Support Annexes (CSA), the Entity monitors the favorable or negative
fair value on a monthly basis. Should the Entity incur a positive result, and that result be
considered material in light of the amount, a CDS could be contracted to reduce the risk
of breach by counterparties.
The methodologies and practices generally accepted in the market and which are
applied by the Entity to quantify the credit risk related to a given financial agent are
detailed below.
1.
2.
3.
Credit Default Swap, the credit risk is quantified based on the quoted market price.
The CDS is the additional premium that an investor is willing to pay to cover a credit
position, meaning that the risk quantification is equal to this premium. This practice
is utilized as long as quoted CDS are available on the market.
Issuance Credit Spread, if issuances are available for quotation on different
financial markets, the credit risk can be quantified as the difference between the
internal rate of return of the bonds and the risk-free rate.
Comparable items, if the risk cannot be quantified by using the above
methodologies, the use of comparable items is generally accepted; i.e., the use of
entities or bonds of the sector that the company wishes to analyze as a reference.
The Entity has the policy of monitoring the volume of operations contracted with each
institution, in order to avoid margin calls and mitigate credit risks with counterparties.
At the close of December 31, 2020 and 2018, the Entity has incurred in 28 and 13 margin
calls just in 2020 and 2019 respectively. At December 31, 2019 has had no margin calls.
At December 31, 2020, 2019 and 2018, the Entity has recorded no breaches to the
agreements signed with different financial entities for exchange rate hedging operations.
The Entity’s maximum exposure to credit risk is represented by the carrying value of its
financial assets. At December 31, 2020, 2019 and 2018, that risk amounts to $5,629,155,
$4,072,609 and $3,012,975, respectively.
The credit risk generated by the management of the Entity’s temporary investments
reflects its current investment policy, which has the following objectives: I) enhance
resource efficiency, and II) mitigate the credit risk. In order to fulfill these objectives,
certain guidelines and maximum amounts were established for counterparties,
instruments and periods within the Entity’s policies.
All transactions performed in Mexican pesos and foreign currency are supported by an
outline brokerage agreement duly executed by both parties with regulated institutions
belonging to the Mexican Financial System, which have the guarantees required by
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Global Report 2020 As of
Average effective
December 31, 2020
interest rate
Up to 1 year
Up to 2 years
Up to 3 years
Up to 4 years
Up to 5 years or more
Total
Long-term debt
Debt instruments
Financial leasing
Derivatives
Suppliers
Factoring of suppliers (1)
Total
6.48%
8.13%
4.00%
$
24,233,053
7,979,149
4,207,744
$ -
-
$ -
-
$ -
-
$ -
-
$
3,946,443
3,638,393
2,936,185
10,571,285
89,839
-
2,949,829
-
654,115
-
-
-
-
-
-
-
-
-
-
24,233,053
7,979,149
25,300,050
89,839
2,949,829
654,115
$
40,113,729
$
3,946,443
$
3,638,393
$
2,936,185
$
10,571,285
$
61,206,035
As of
Average effective
December 31, 2019
interest rate
Up to 1 year
Up to 2 years
Up to 3 years
Up to 4 years
Up to 5 years or more
Total
Long-term debt
Debt instruments
Financial leasing
Derivatives
Suppliers
Factoring of suppliers (1)
Total
8.76%
9.03%
4.00%
$
1,093,453
735,841
4,574,273
$
1,558,759
735,841
3,950,863
$
2,394,325
1,715,588
3,308,716
$
13,906,439
648,077
2,846,815
$
1,139,110
8,554,678
11,077,714
$
3,904
-
2,327,048
-
889,046
-
-
-
-
-
-
-
-
-
-
20,092,086
12,390,025
25,758,381
3,904
2,327,048
889,046
$
9,623,565
$
6,245,463
$
7,418,629
$
17,401,331
$
20,771,502
$
61,460,490
As of
December 31, 2018 (restated)
Average effective
interest rate
Up to 1 year
Up to 2 years
Up to 3 years
Up to 4 years
Up to 5 years or more
Total
Long-term debt
Debt instruments
Financial leasing
Derivatives
Suppliers
Factoring of suppliers (1)
Total
9.53%
9.18%
4.00%
$
3,093,379
640,446
32,398
$
1,090,172
3,397,887
32,398
$
2,726,458
353,787
32,398
$
6,358,985
1,325,103
32,398
$
7,277,773
3,789,577
472,734
$
10,361
-
2,290,788
-
757,976
-
-
-
-
-
-
-
-
-
-
20,546,767
9,506,800
602,326
10,361
2,290,788
757,976
$
6,825,348
$
4,520,457
$
3,112,643
$
7,716,486
$
11,540,084
$
33,715,018
(1)
The policy of payment to suppliers is 90 days, for which the Entity signed financial factoring contracts backed by credit lines with financial institutions, through which a
supplier can contact the financial institution to collect the any invoice in particular, previously approved by Alsea, before the payment date, which ends the payment
obligation of Alsea to the supplier; in turn, Alsea will settle the balance to the financial institution on the due date for the invoice, in accordance with the terms previously
agreed with the supplier. This transaction has no cost to Alsea, provided that the balances are liquidated in a timely manner, the balances not settled in a timely manner
will be subject to a default interest that will be determined by the financial institution; Additionally, Alsea receives a commission for the balances discounted by the
suppliers. These amounts have been classified as factoring of suppliers in the statement of financial position.
268
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Global Report 2020
i.
Fair value of financial instruments
This notes provides information on the manner in which the Entity determines the fair
values of the different financial assets and liabilities.
Some of the Entity’s financial assets and liabilities are valued at fair value at each
reporting period. The following table contains information on the procedure for
determining the fair values of financial assets and financial liabilities (specifically the
valuation technique(s) and input data used).
Financial assets/liabilities
Fair value (1)(2)
Figures in thousands of USD
Fair value
hierarchy
12/31/2020
12/31/2019
12/31/2018
1) Forwards and currency options
agreements
$
(34,637)
$
46,244
$
147,543
Level 2
Valuation technique(s) and main
input data
Plain vanilla forwards are calculated based on discounted cash flows
on forward exchange type bases. The main input data are the Spot,
the risk-free rates in MXN and USD + a rate that reflects the credit
risk of counterparties. In the case of options, the methods used are
Black and Scholes and Montecarlo digital and/or binary algorithms.
2) Interest rate swaps
$
(53,771)
$
5,041
$
18,880
Level 2
Valuation technique(s) and main
input data
Discounted cash flows are estimated based on forwards interest rates
(using the observable yield curves at the end of the period being
reported) and the contractual rates, discounted at a rate that reflects
the credit risk of the counterparties.
During the period there were no transfers between level 1 and 3
(1)
(2)
(3)
The fair value is presented from a bank’s perspective, which means that a negative
amount represents a favorable result for the Entity.
The calculation or valuation agent used is the same counterparty or financial entity with
whom the instrument is contracted, who is asked to issue the respective reports at the
month-end closing dates specified by the Entity.
Techniques and valuations applied are those generally used by financial entities, with official
price sources from banks such as Banxico for exchange rates, Proveedor Integral de Precios
(PIP) and Valmer for supply and databases of rate prices, volatility, etc.
In order to reduce to a minimum, the credit risk associated with counterparties,
the Entity contracts its financial instruments with domestic and foreign institutions
that are duly authorized to engage in those operations.
In the case of derivative financial instruments, a standard contract approved
by the International Swaps and Derivatives Association Inc. (ISDA) is executed
with each counterparty; the standard confirmation forms required for each
transaction are also completed.
Likewise, bilateral guarantee agreements are executed with each counterparty to
determine policies for the margins, collateral and credit lines to be granted.
This type of agreement is usually known as a “Credit Support Annex”; it establishes
the credit limits that financial institutions grant to the company and which are
applicable in the event of negative scenarios or fluctuations that affect the fair
value of the open positions of derivative financial instruments. These agreements
establish the margin calls to be implemented if credit line limits are exceeded.
Aside from the bilateral agreements attached to the ISDA outline agreement
known as the Credit Support Annex (CSA), the Entity monthly monitors the fair
value of payable or receivable amounts. If the result is positive for the Entity and is
considered relevant due to its amount, a CDS can be contracted to reduce the risk
of counterparty noncompliance.
The Entity has the policy of monitoring the number of operations contracted with
each of these institutions so as to avoid margin calls and mitigate the counterparty
credit risk.
At December 31, 2020, 2019 and 2018, the Entity has not received any margin
calls and does not have any securities given as a guarantee with counterparties
as interest rate hedges. Furthermore, it did not record any instances of
noncompliance with the contracts executed with different financial institutions for
operations involving interest rate hedges.
j.
Fair value of financial assets and liabilities that are not valued at fair value on a
recurring basis (but that require fair value disclosure)
Except for the matter described in the following table, Management considers that the
carrying values of financial assets and liabilities recognized at amortized cost in the
consolidated financial statements approximate their fair value:
270
271
Global Report 2020 Financial liabilities
Financial liabilities maintained at amortized cost:
Suppliers
Factoring of suppliers
Bank loans
Obligation under finance leases
Long-term bank loans
Non-current financial lease liabilities
Debt instruments
12/31/2020
12/31/2019
12/31/2018
Carrying
value
Fair
value
Carrying
value
Fair
value
Carrying
value
Fair
value
$
2,949,829
654,115
24,233,053
4,207,633
$
2,949,829
654,115
25,796,432
4,207,633
-
-
21,092,417
7,979,149
21,092,417
8,442,256
$
2,327,048
889,046
305,668
3,915,338
17,102,448
19,542,694
7,973,765
$
2,327,048
889,046
322,187
3,915,338
17,102,448
19,542,694
8,243,744
$
2,290,788
757,976
2,586,553
6,799
16,040,204
284,375
6,983,244
$
2,290,788
757,976
2,702,880
6,799
16,040,204
284,375
6,809,099
Total
$
61,116,196
$
63,142,682
$
52,056,007
$
52,342,505
$
28,949,939
$
28,892,121
Financial liabilities 2020
Financial liabilities maintained at amortized cost:
Bank loans
Current maturities of financial lease liabilities
Non-current financial lease liabilities
Debt instruments
Total
Financial liabilities 2019
Financial liabilities maintained at amortized cost:
Bank loans
Current maturities of financial lease liabilities
Long-term bank loans
Non-current financial lease liabilities
Debt instruments
Total
Financial liabilities 2018
Financial liabilities maintained at amortized cost:
Bank loans
Current maturities of financial lease liabilities
Long-term bank loans
Non-current financial lease liabilities
Debt instruments
Total
Valuation
Level 2
24,233,053
4,207,633
21,092,417
7,979,149
57,512,252
Level 2
305,668
3,915,338
17,102,448
19,542,694
7,973,765
48,839,913
Level 2
2,586,553
6,799
16,040,204
284,375
6,983,244
25,901,175
$
$
$
$
$
$
272
273
Global Report 2020
a)
b)
Description of valuation techniques, policies and frequency:
The derivative financial instruments used by Alsea (forwards and swaps) are contracted
to reduce the risk of adverse fluctuations in exchange and interest rates. Those
instruments require the Entity to exchange cash flows at future fixed dates on the face
value or reference value and are valued at fair value.
Liquidity in derivative financial operations:
1.
2.
The resources used to meet the requirements related to financial instruments, will
come from the resources generated by Alsea.
External sources of liquidity: No external sources of financing will be used to address
requirements pertaining to derivative financial instruments.
26.
Stockholders’ equity
Following is a description of the principal features of the stockholders’ equity accounts:
a.
Capital stock structure
The movements in capital stock and premium on share issue are shown below:
Figures as of January 1, 2019
835,640,182
$
478,749
$
8,444,420
Number of actions
Thousands of pesos
social capital
Premium in issuance of
shares
Placement of actions
2,938,543
-
226,453
Figures as of December 31, 2019
838,578,725
478,749
8,670,873
Placement of actions
-
-
5,954
Figures as of December 31, 2020
838,578,725
478,749
$
8,676,827
As discussed in Note 22, Grupo Zena has the sale option of the noncontrolling interest
of Alsea. On October 30, 2018, Alsea and the investors of Grupo Zena entered into a new
agreement for purchase and sale options, termination of the stockholders’ agreement
and a commitment to sign a new stockholders’ agreement, which was ratified on
December 27, 2018, and stipulates the termination of the original stockholders’ agreement
and the formalization of this new agreement, whereby Grupo Zena has the right to sell to
Alsea its noncontrolling interest in other investors equal to 21.06% of the equity of Grupo
Zena. The net amount between the termination of the original agreement and recognition
of the new right was recorded net in the consolidated statement of changes in
stockholders’ equity under Reserve for purchase of noncontrolling interest, in the amount
of $659,252, as of December 31, 2018.
In April 2018, Alsea declared a dividend payment of $654,091 with a charge to the after-
tax earnings account, which is to be paid against net earnings at $0.78 (zero pesos
seventy and eight cents) per share. The Treasury society must make payment on April 23,
2018 for $654,091.
The fixed minimum capital with no withdrawal rights is comprised of Class I shares, while
the variable portion is represented by Class II shares, and it must in no case exceed 10
times the value of the minimum capital with no withdrawal rights.
The National Banking and Securities Commission has established a mechanism that
allows the Entity to acquire its own shares in the market, for which purpose a reserve for
repurchase of shares must be created and charged to retained earnings, which Alsea
has created as of December 31, 2015.
Total repurchased shares must not exceed 5% of total issued shares; they must be
replaced in no more than one year, and they are not considered in the payment of
dividends.
The premium on the issuance of shares is the difference between the payment for
subscribed shares and the par value of those same shares, or their notional value (paid-
in capital stock divided by the number of outstanding shares) in the case of shares with
no par value, including inflation, at December 31, 2012.
Available repurchased shares are reclassified to contribute capital.
b.
Stockholders’ equity restrictions
I.
II.
5% of net earnings for the period must be set aside to create the legal reserve until
it reaches 20% of the capital stock. At December 31, 2020, 2019 and 2018, the legal
reserve amounted to $100,736, which amount does not reach the required 20%.
Dividends paid out of accumulated profits will be free of ISR if they come from the
CUFIN and for the surplus 30% will be paid on the result of multiplying the dividend
paid by the update factor. The tax arising from the payment of the dividend that
does not come from the CUFIN will be charged to the Entity and may be credited
against the corporate ISR for the following two years.
274
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Global Report 2020
27. Non-controlling interest
a.
Following is a detail of the non-controlling interest.
Amount
Ending balance at January 1, 2019 (Restated)
$
1,878,742
Equity in results for the year ended December 31, 2019
Other movements in capital
Ending balance at December 31, 2019
Equity in results for the year ended December 31, 2020
Other movements in capital
158,064
(75,243)
1,961,563
(659,884)
28,767
Ending balance at December 31, 2020
$
1,330,446
b.
Following is the detail of the Non-Controlling interest of the main subsidiaries of the Entity:
Subsidiary
Country
31/12/2020
31/12/2019
31/12/2018
31/12/2020
31/12/2019
31/12/2018
31/12/2020
31/12/2019
31/12/2018
Percentages of the non-controlling interest
to the non-controlling interest
Accumulated non-controlling interest
Income (loss) attributable
Food Service Project, S.L. (Grupo Zena)
Spain
33.76%
33.76%
33.76%
$
(617,817)
$
169,700
$
200,690
$
1,179,805
$
1,797,622
$
1,704,079
Operadora de Franquicias Alsea,
S.A. de C.V.
Estrella Andina, S.A.S.
28.
Earnings per share
Mexico
Colombia
20.00%
30.00%
20.00%
30.00%
20.00%
30.00%
(35,908)
(10,757)
2,530
(12,404)
(8,350)
(10,936)
30,340
47,804
66,248
58,561
63,718
65,114
Basic earnings per share is calculated by dividing the net profit for the period attributable to the controlling interest holders of ordinary capital by the average weighted number of ordinary shares outstanding during
the period.
Diluted earnings per share is calculated by dividing the net profit attributable to controlling interest holders of ordinary capital (after adjusting for interest on the convertible preferential shares, if any) by the average
weighted ordinary shares outstanding during the year plus average weighted ordinary shares issued when converting all potentially ordinary diluted shares to ordinary shares. For the years ended December 31, 2020,
2019 and 2018, the Entity has no potentially dilutive shares, for which reason diluted earnings per share is equal to basic earnings per share.
The following table contains data on income and shares used in calculating basic and diluted earnings per share:
Net profit (in thousands of Mexican pesos):
Attributable to shareholders
Shares (in thousands of shares):
2020
2019
2018
$
(3,235,574)
$
926,669
$
953,251
Weighted average of shares outstanding
838,579
838,579
835,640
Basic and diluted net income per share of continuous and discontinued
operations (cents per share)
Basic and diluted net income per share of continuous operations (cents per
share)
$
$
(3.86)
(3.86)
$
$
1.11
1.11
$
$
1.14
1.14
276
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Global Report 2020
29.
Revenues
2020
2019
2018
The accounting policies of the segments are the same as those of the Entity’s described in Note
3.
The Food and Beverages segments in which Alsea in Mexico, Europe and Latin America
(LATAM) participates are as follows:
Fast Food: This segment has the following features: i) fixed and restricted menus, ii) food for
immediate consumption, iii) strict control over individual portions of each ingredient and
finished product, and
iv) individual packages, among others.
This type of segment can be easily accessed and therefore penetration is feasible at any
location.
Coffee Shops: Specialized shops where coffee is the main item on the menu. The distinguishing
aspects are top quality services and competitive prices, and the image/ambiance is aimed at
attracting all types of customers.
Casual Dining: This segment comprises service restaurants where orders are taken from
customers and there are also to-go and home delivery services. The image/ambiance of these
restaurants is aimed at attracting all types of customers. This segment covers fast food and
gourmet restaurants.
The main features of casual dining stores are i) easy access, ii) informal dress code, iii)
casual atmosphere, iv) modern ambiance, v) simple decor, vi) top quality services, and vii)
reasonable prices. Alcoholic beverages are usually sold at those establishments.
Restaurant - cafeteria - (Vips): Is a familiar-type segment and its main characteristic is the
hospitality, and be close to the client. These restaurants have a wide variety of menus.
Fast Casual Dining: This is a combination of the fast food and casual dining segments.
Revenues from the sale of goods
$
37,403,800
$
56,594,841
$
44,991,698
Services
Royalties
676,154
415,466
850,163
709,613
742,915
421,977
Total
$
38,495,420
$
58,154,617
$
46,156,590
For the year ended December 31, 2020, operating income decreased 34% compared to the year
ended December 31, 2019, primarily driven by the effects of the COVID-19 pandemic.
30. Cost of sales
The costs and expenses included in other operating costs and expenses in the consolidated
statements of income are as follows:
2020
2019
2018
Food and beverage of costs
$
10,873,059
$
16,457,416
$
13,438,000
Royalties of costs
Other costs
96,524
485,301
160,732
545,873
158,930
590,578
Total
$
11,454,884
$
17,164,021
$
14,187,508
31.
Balances and transactions with related parties
Officer compensations and benefits
The total amount of compensation paid by the Entity to its main advisors and officers for the
period ended December 31, 2020, 2019 and 2018 was of approximately $137,839, $134,000 and
$185,740, respectively.
This amount includes emoluments determined by the General Assembly of Shareholders of
the Entity for the performance of their positions during said fiscal year, as well as salaries and
salaries.
The Entity continuously reviews salaries, bonuses and other compensation plans in order to
ensure more competitive employee compensation conditions.
32.
Financial information by segments
The Entity is organized into three large operating divisions comprised of sales of food and
beverages in Mexico and South America (LATAM - Argentina, Chile, Colombia and Uruguay)
and Europe (Spain, Portugal, France, Netherlands, Belgic and Luxemburg) all headed by the
same management.
278
279
Global Report 2020
The definition of the operating segments is based on the financial information provided by General Management and it is reported on the same bases as
those used internally by each operating segment. Likewise, the performance evaluations of the operating segments are periodically reviewed.
Information on the segments for the years ended December 31, 2020, 2019 and 2018 is as follows:
(figures in millions of pesos).
Figures in millions of pesos as of December 31, division:
Food and beverages
Food and beverages
Food and beverages
2020
Mexico
2019
2018
2020
LATAM
2019
2018
2020
Europe
2019
2018
2020
2019
2018
Consolidated
Income
From third parties
Income
Costs
Operating costs
EBITDA store
Depreciation and amortization
Non-operating expenses
Utility operation
Interest paid
Earned interests
Other financial expenses
Participation in associates
Income taxes
Consolidated net income for the year
Noncontrolling interest
Majority net income
$
$
19,067
19,067
6,018
7,750
5,299
3,616
1,263
420
$
27,217
27,217
8,398
10,066
8,753
3,921
1,617
3,215
$
25,462
25,462
8,032
11,530
5,900
2,123
1,553
2,224
$
5,568
5,568
1,954
2,749
865
1,015
283
(433)
$
9,732
9,732
3,190
4,710
1,832
907
664
261
$
10,832
10,832
3,430
5,906
1,496
572
803
121
$
13,861
13,861
3,483
6,830
3,548
3,804
1,178
(1,434)
$
21,206
21,206
5,576
9,834
5,796
3,219
1,482
1,095
$
9,862
9,862
2,726
5,220
1,916
419
549
948
$
38,496
38,496
11,455
17,329
9,712
8,435
2,724
(1,447)
3,226
(119)
468
3,575
(3)
(1,178)
(3,847)
(660)
$
58,155
58,155
17,164
24,610
16,381
8,047
3,763
4,571
3,123
(101)
(172)
2,850
(1)
-
635
1,085
158
$
(3,187)
$
927
$
46,156
46,156
14,188
22,656
9,312
3,114
2,905
3,293
1,628
(57)
(115)
1,456
698
1,139
186
953
Food and beverages
Food and beverages
Food and beverages
2020
Mexico
2019
2018
2020
LATAM
2019
2018
2020
Europe
2019
2018
2020
2019
2018
Consolidated
Assets
$
50,009
$
46,557
$
23,610
$
6,570
$
4,922
$
5,469
$
25,044
$
21,077
$
6,652
$
81,623
$
72,556
$
35,731
Investment in productive assets
Investment in associates
Investment in Fixed Assets and Intangible
(435)
747
85
1,718
Total assets
Total liability
$
$
50,321
$
48,360
48,203
$
39,818
$
$
14
3,014
26,638
25,315
$
$
525
243
7,338
3,792
-
-
-
-
-
649
5,571
2,466
$
$
1,155
6,624
1,638
$
$
784
1,404
16,242
$
$
25,828
23,809
$
$
22,481
22,586
$
$
22,894
15,751
$
$
90
1,774
83,487
75,804
$
$
85
3,771
76,412
64,870
$
$
14
20,411
56,156
42,704
280
281
Global Report 2020
33.
Foreign currency position
Assets and liabilities expressed in US dollars, shown in the reporting currency at December 31,
2020, 2019 and 2018, are as follows:
Thousands of
Mexican pesos
Thousands of
Mexican pesos
Thousands of
Mexican pesos
2020
2019
2018
Assets
Liabilities
$
4,028,843
(19,872,347)
$
3,238,135
(15,310,246)
$
2,331,077
(14,955,348)
Net monetary liability position
$
(15,843,504)
$
(12,072,111)
$
(12,624,271)
The exchange rate to the US dollar at December 31, 2020, 2019 and 2018 was $19.91, $18.87
and $19.65, respectively. At April 14, 2021, date of issuance of the consolidated financial
statements, the exchange rate was $20.07 to the US dollar.
The exchange rates used in the different conversions to the reporting currency at December 31,
2020, 2019 and 2018 and at the date of issuance of these consolidated financial statements are
shown below:
Country of origin
Currency
rate
April 14, 2021
Closing exchange
Issuance
2020
Chile
Argentina
Colombia
Spain
Country of origin
2019
Argentina
Chile
Colombia
Spain
Country of origin
2018
Argentina
Chile
Colombia
Spain
0.2164
0.0283
0.0054
23.9767
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
0.2369
0.0280
0.0058
24.3802
Closing exchange
Currency
rate
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
0.5192
0.0283
0.0061
22.5340
Currency
rate
Closing exchange
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
1.0509
0.0321
0.0066
23.6587
In converting the figures, the Entity used the following exchange rates:
Foreign transaction
Country of origin
Currency
Recording
Functional
Presentation
Fast Food Sudamericana, S.A.
Starbucks Coffee Argentina, S.R.L.
Asian Bistro Argentina, S.R.L.
Fast Food Chile, S.A.
Asian Food Ltda,
Gastronomía Italiana en Colombia, S.A.S.
Operadora Alsea en Colombia, S.A.
Asian Bistro Colombia, S.A.S.
Food Service Project S.L.
Argentina
Argentina
Argentina
Chile
Chile
Colombia
Colombia
Colombia
Spain
ARP
ARP
ARP
CLP
CLP
COP
COP
COP
EUR
ARP
ARP
ARP
CLP
CLP
COP
COP
COP
EUR
MXP
MXP
MXP
MXP
MXP
MXP
MXP
MXP
MXP
34. Commitments and contingent liabilities
Commitments:
a)
b)
c)
d)
The Entity leases locales to house its stores and distribution centers, as well as certain
equipment further to the lease agreements entered into for defined periods (see Note 15).
The Entity has acquired several commitments with respect to the arrangements
established in the agreements for purchase of the brands.
In the normal course of operations, the Entity acquires commitments derived from supply
agreements, which in some cases establish contractual penalties in the event of breach
of such agreements.
In the signed contracts with third parties, the Entity is entitled to comply with certain
mandatory clauses; some of the main mandatory clauses are related to capital
investments and opening of restaurants. As of December 31, 2020, derived from the
Covid-19 pandemic, it was business to limit the investment of new stores until the
recovery of sales as normal. As of December 31, 2019 and 2018, these obligations have
been met.
Contingent liabilities:
a.
In September 2014, the Finance Department of Mexico City determined taxable income for
the company denominated Italcafé, S.A. de C.V. (Italcafé) based on amounts deposited
in its bank accounts derived from different restaurants owned by Grupo Amigos de San
Ángel, S.A. de C.V. (GASA), however, that these revenues were accumulated by the latter
company giving it all the corresponding tax effects , that authority concluded that the
observations were partially called into effect, and in January 2019, Italcafé brought an
action for invalidity against the partial favourable decision, trial continues in legal process
and in analysis by the Superior Chamber of the First Section of the Tax Court who shall be
appointed to issue the decision.
In March 2019, the Tax Administration Service (SAT) determined tax liabilities for GASA and
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Global Report 2020
Italcafé derived from the review performed for 2010 and 2011, respectively, with regard
to the deposits made in their bank accounts. Accordingly, the companies filed a motion
for reconsideration and, in August and November 2019, filed a proceeding for annulment
against the rulings issued in the motions for reconsideration. The trial continues in its
legal process.
Please note that the former owners of GASA and Italcafé will assume the economic
effects derived from the aforementioned tax liability due to the terms and conditions
established in the agreements executed by Alsea with these vendors.
b.
The tax authorities conducted an inspection of Alsea and its subsidiary, Operadora Alsea
de Restaurantes Mexicanos, S.A., de C.V. (OARM) for 2014, which primarily focused on tax
aspects related to the transactions performed to acquire the Vips division from Wal-Mart
de México, S.A.B. de C.V. that year.
The tax authorities issued payment requests, the most significant of which requests the
payment of taxes for alleged income derived from the acquisition of goods from ALSEA
for the total amount of $3,881 million pesos, including restatement.
Alsea and its external attorneys consider that they have sufficient elements to show that
the payment requests issued by the tax authorities are unlawful, while demonstrating that
Alsea has fulfilled its tax obligations in time and form with regard to the aforementioned
purchase-sale transaction; for this reason, an Administrative Appeal was lodged with the
tax authorities on 23 March 2020, which is under review. I do not know, a provision has not
been created for this purpose.
Appeals for revocation have been filed with the tax authorities, which are still pending
resolution, in order to make an adequate assessment of all the elements to be
established to establish the improperness of the abovementan settlements.
The transaction was recorded for accounting purposes according to IFRS and, more
specifically, International Accounting Standards (IAS) 27 and 28, Consolidated and
separate financial statements, and Investments in Associates and Joint Ventures,
respectively. These standards establish that, in a business combination, the surplus
value forming part of the book value of an investment in a subsidiary is not recognized
separately; i.e., the surplus value generated by the acquisition of Vips must be presented
together with the investment in shares in the separate financial statements of OARM
because it does not fulfill the definition of a separate asset in the individual financial
statements.
In the separate financial statements of Alsea, the acquisition of the VIPS Brand is only
referred to as the acquisition of the intellectual property of the VIPS brand.
Alsea applied the accounting or purchase method contained in IFRS 3, Business
combination, which is only applicable to the buyer in the Entity’s consolidated financial
statements. When applying this method, the assets and liabilities acquired through
the purchase of this business included the identified intangible assets of the acquired
company, the assets and liabilities covered by the previous terms are matched with the
amount paid and the difference between these values is recorded as surplus value at the
consolidated level.
As discussed above, purchase accounting is a special accounting treatment; the
respective adjustments are only recognized in the consolidated financial statements, but
are not recognized in the financial statements of the acquired entity or in the separate
financial statements of the buyer.
35.
Subsequent events
On April 5, 2021, Alsea has negotiated with all banks an extension to suspend the calculation of
certain covenants for their credit contracts, (primarily those related to the gross leverage ratio
and the interest coverage ratio) effective from April 1, 2021 to June 30, 2022. By doing so Alsea is
a stronger position to continue facing the impact of the COVID-19 pandemic and to ensure the
continuity of its priority strategic projects, the operation of its restaurants in optimal conditions,
as well as the continued organic growth of the Entity.
In addition, Alsea has assumed the following commitments during the aforementioned period,
which will be
reviewed with the banks on a monthly basis:
•
•
•
•
Maximum indebtedness:
-
-
The debt that the company has in Mexican pesos should not exceed 19.4 billion
Mexican pesos or its equivalent in U.S. dollars or Chilean pesos.
The debt that the company has in euros must not exceed 615 million euros or its
equivalent in U.S. dollars or Chilean pesos.
Minimum liquidity:
-
During this period, the company agrees to maintain a minimum liquidity level of 3
billion pesos.
Minimum consolidated stockholders’ equity:
-
During this period, the company must maintain a minimum consolidated
stockholders’ equity of 6.9 billion pesos.
Capital expenditure (Capex):
-
The company agrees not to exceed 800 million pesos in capital expenditure per
quarter during the established period.
The Entity has undertaken a series of internal actions to ensure the viability and their
success will depend upon the continuityof the pandemic and the measures taken by
different governments regarding the operation of the restaurants, as well as the ability to the
management to generate income and liquidity.
36. Authorization of consolidated financial statement
The consolidated financial statements were authorized for issuance on April, 14 2021 by
Mr. Rafael Contreras Grosskelwing, Administration and Financial Director, and therefore they
do not reflect any facts that might occur after that date and are subject to the approval of the
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Global Report 2020 audit committee and the Entity’s stockholders, who can decide to modify them in accordance
with the provisions of the Corporations Law.
CONTACT
INFORMATION
Finance
Rafael Contreras
Chief Finance Officer
+52(55) 7583-2000
Investor Relations
Salvador Villaseñor Barragán
ri@alsea.com.mx
+52(55) 7583-2000
Sustainability
Ivonne Madrid Canudas
responsabilidad-social@alsea.com.mx
+52(55) 7583-2000
Corporate Matters:
Valeria Olson Fernández
rp@alsea.com.mx
+52(55) 7583-2000
External Auditors
Deloitte
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Av. Paseo de la Reforma 489
6th Floor, Col. Cuauhtémoc
Mexico City, Zip Code 06500
+52(55) 5080-6000
CORPORATE OFFICES
Alsea, S.A.B. de C.V.
Avenida Revolución N° 1267,
Torre Corporativa, Floor 21,
Colonia Los Alpes,
Delegación Álvaro Obregón,
Zip Code 01040
+52(55) 7583-2000
We have been listed on the Sustainable IPC of the BMV since 2013.
• • We have been listed on the Sustainable IPC of the BMV since 2013.
CEMEFI has recognized us for eight consecutive years as a Socially Responsible Company
• • CEMEFI has recognized us for eight consecutive years as a Socially Responsible Company
We are joined the United Nations Global Compact since 2011
• • We are joined the United Nations Global Compact since 2011
Third year in the Dow Jones Sustainability Index
• • Third year in the Dow Jones Sustainability Index
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See here our previous annual reports: https://www.alsea.net/sustentabilidad/informes-anuales
Global Report 2020