Annual Report
2022
SUCCES
IS
IN THE
details
OUTSTANDING
results
TO OBTAIN with a focus on efficiencySUCCESS IS IN THE DETAILS flavorful
MOMENTS
focused on profitabilityTO DELIVER SUCCESS IS IN THE DETAILS WITH OUR
customers
through technologyCONNECTINGSUCCESS IS IN THE DETAILS SAVE OUR
for the futureHELPINGSUCCESS IS IN THE DETAILS Contents
06 Messages12 Our Company About this Report | Highlights | Segments | Sustainability Strategy | ESG Model | Our Contribution | Stakeholders | Certifications43 Growth Supply Chain | Unmatched Customer Experiences | Digitalization51 Development Alsea Team | Community Outreach74 Balance Environmental care | Circular approach and waste management | Climate strategy 85 Indicators89 Financial Information144 Information for Investors GRI 2-22
AR
ALSEA 2022
6
To the General Meeting of Shareholders of Alsea, S.A.B. de C.V.
Dear Shareholders,
I AM PLEASED TO SHARE OUR
COMPREHENSIVE 2022 ANNUAL
REPORT WITH YOU.
This year at Alsea, we have much to be proud of—
we grew, improved, learned and verified that success
is in the details and that we can do more by focusing
on efficiency, sustainability and innovation.
GRI 2-22, 2-23
AR
ALSEA 2022
7
O U R G O A L S A R E
A L I G N E D W I T H T H E :
2 0 3 0
a g e n d a
S U S T A I N A B L E
D E V E L O P M E N T G O A L S
WE REINFORCE OUR
commitment
TO ADHERE TO
THE CODE OF
CORPORATE
GOVERNANCE
BEST PRACTICES
S&P
ESG INDEX
ESR
During this period, we strengthened our
Sustainability Strategy by incorporating financial
materiality into our global materiality analysis
and published our Environmental, Social and
Corporate Governance (ESG) goals for the year.
These goals will direct us to a more responsible
operation aligned with the UN 2030 Agenda and
its Sustainable Development Goals that provide
the blueprint to work towards a common goal at
all levels in the different geographies where we
have a presence.
Mid-year, our Board decided to appoint Armando
Torrado as our CEO. He has over 30 years of
experience working for the Company, beginning
with operating the first Domino’s Pizza stores
opened in Mexico through international brand
development projects. He also led the Company’s
Domino’s Pizza stores in Mexico for more than a
decade, served as Director of Development at Alsea,
Director of Casual Dining, Director of Expansion
for Mexico and South America, and Director of
Alsea International.
We are confident that his vision and leadership
will lead Alsea into a new phase, meeting and
surpassing the goals set by the Board of Directors
by making quick and agile decisions close to the
operation.
The Board of Directors and its governing bodies
continue to work with the Company to achieve the
profitability and growth that the market expects from
us. In this sense, we consistently monitor managing
risks inherent to our operation, considering our
geographical coverage and critical mass.
In addition, at Alsea, we reinforce our commitment
to adhere to the Code of Corporate Governance
Best Practices every day. Through our Board of
Directors and its governing bodies, we guarantee
that the highest Corporate Governance standards
are met to ensure enhanced safety and trust for
our shareholders.
In 2022, we were included in the S&P/BMV Total
Mexico ESG Index; we were listed on the Dow
Jones Sustainability Index for the fifth year in a
row, received a certificate as a Socially Responsible
Company for the 11th year in a row, and reaffirmed
our commitment to the UN Global Compact.
I want to thank our collaborators for their
commitment to ensuring an efficient operation
and delivering happiness and experiences full of
flavor to our customers. I also want to thank our
shareholders and strategic partners for their trust.
At Alsea, we will continue to promote policies,
initiatives and activities that generate positive
impacts for all those with whom we interact and
for our planet and position us as a benchmark for
sustainability in line with our ESG goals for 2030.
AR
ALSEA 2022
8
“I WANT TO THANK OUR
TEAM MEMBERS FOR THEIR
COMMITMENT TO ENSURING
AN EFFICIENT OPERATION AND
DELIVERING HAPPINESS AND
EXPERIENCES FULL OF FLAVOR
TO OUR
customers.”
Alberto Torrado Martínez
GRI 2-22
AR
ALSEA 2022
9
Dear friends,
I WANT TO THANK THE BOARD OF
DIRECTORS FOR THE TRUST THEY
PLACED IN ME BY APPOINTING ME
CHIEF EXECUTIVE OFFICER OF ALSEA.
I am fully committed to executing our long-term strategy
to generate value for all our stakeholders and meet the
goals established in our strategic plan, staying close to our
customers and their needs at all times while conducting
the day-to-day activities of our operations.
AR
ALSEA 2022
10
I am proud to share last year’s results that once
again prove that our Company’s success is based
on its dedication, focus on quality and service, and
attention to detail in everything we do. In 2022, we
experienced an amazing 28.9% growth in sales
for A record-breaking year totaling MXN 68.8
billion, compared to 2021. We also experienced a
34.8% growth in Same Store Sales. Our EBITDA
stood at MXN 14 billion, representing a 14.1%
growth compared to 2021 due to the outstanding
management skills we applied to mitigate inflation
in inputs, energy increases in Europe and the
appreciation of the Mexican peso.
The Delivery channel stayed steady as a percentage
of sales during 2022, representing 17.8% of
Alsea’s consolidated sales, with a 13.8% growth
compared to 2021. We will continue working on
our digital transformation project because we
know it has enormous growth potential, thanks to
the opportunities offered by digital platforms and
targeted marketing, to provide the best customer
experiences.
During 2022, our capital investments totaled
MXN 4.2 billion in 179 Company-owned store
openings and 65 sub-franchises, resulting in 185 net
openings during the year, highlighting the opening
of the first Domino’s Pizza store in Uruguay. We
continue to be in a solid position to take advantage
of market opportunities with our main brands in
the geographies where we operate, as we aim to
open units in our most profitable locations.
A fundamental part of the Company’s effective
restaurant leadership is integrating our supply
chain, which creates major efficiencies and provides
a strategic advantage for our brands. This network,
which serves our 4,447 units, operates under
the highest standards of quality, security and
food safety, efficiently meeting the requirements
established by our strategic global partners.
This year, we published our Environmental, Social
and Corporate Governance (ESG) goals for 2030 in
line with our Sustainability Strategy. We continue to
work on behalf of the people we relate to actively. We
are a responsible employer focused on the personal
and professional growth of our team members to
whom we provide development opportunities in a
safe and inclusive space, respecting individuality
and diversity.
In addition, we delivered the first “Alsea Award”
for food and nutrition research, where a Mexican
project won the USD 150,000 prize out of the 69
projects presented by participants from Argentina,
Colombia, Chile, Mexico, and Spain. This year, we
benefited nearly two million people through our
community development programs by delivering
close to MXN 63 million in cash and 88 tons of in-
kind donations, thus reinforcing our commitment
to society.
We focus on operational efficiency and the consistent
execution of our business model and believe that
success is in the details. Proof of this is found in
our results reflected in this report.
AR
ALSEA 2022
11
“THANKS TO OUR SOLID BRAND PORTFOLIO,
OUR MANAGEMENT TEAM’S EXPERIENCE
AND THE TALENT OF OUR MORE THAN
75,000 COLLABORATORS, WE WILL
SUCCESSFULLY MAINTAIN OUR PROJECTS
AND MEET OUR GOALS, RESPONDING TO
OUR STRATEGIC PARTNERS AND INVESTORS’
TRUST, MEETING OUR PURPOSE TO DELIVER
HAPPINESS AND EXPERIENCES FULL OF
flavor.”
Armando Torrado Martínez
OUR COMPANY | ABOUT THIS REPORT
GRI 2-3, 2-4, 2-5
AR
ALSEA 2022
12
ABOUT
this report
We share our integrated January 1 through
December 31, 2022 report. This document
summarizes our global economic, social,
environmental and corporate governance initiatives
and achievements based on our business strategy,
focusing on sustainability. During this period, there
are no restatements of information or significant
changes for previous periods in terms of coverage.
The report was prepared with the information
requested by the Mexican Stock Exchange through
the S&P/BMV Total México ESG Index for listing
on the Sustainable index, referring to the GRI
standards, the SASB sustainability frameworks
and our actions focused on contributing to the UN
Sustainable Development Goals. Alsea’s internal
departments and divisions generated and verified
its content with financial information examined
through an external auditing process.
As part of our initiatives to reduce our environmental
impact, this report was created in a digital format,
which you can download https://www.alsea.net/
informe-anual/2022
Please direct your feedback, questions or
comments on this report to:
Corporate Affairs
Valeria Oslon Fernández
rp@alsea.com.mx
AR
ALSEA 2022
13
FEATURED
data
+442 million
of served customers
90%
of suppliers
185
openings
OUR FIRST
ARE SMALL AND MEDIUM-
SIZED ENTERPRISES (SMES)
NET
double
MATERIALITY
REPORT,
INTEGRATING IMPACT AND
FINANCIAL ASPECTS
1,202,045
meals delivered
TO VULNERABLE POPULATIONS
OUR COMPANY
GRI 2-1
AR
ALSEA 2022
14
Alsea S.A.B. de C.V.
We are the leading restaurant operator in Latin America and Europe, with globally recognized
brands within the Fast Food, Cafeteria, Casual Dining, Fast Casual Dining, and Family
Restaurant segments. We operate more than 4,400 units in Mexico, Spain, Argentina, Colombia,
Chile, France, Portugal, Belgium, Netherlands, Luxembourg, and Uruguay. Our business
model supports all business units through the Shared Services Center, providing support in
administrative, development and supply chain processes.
AR
ALSEA 2022
15
GRI 2-6
Segments
RESTAURANTS
fast food
cafeteria
DINING
RESTAURANTS
casual
RESTAURANT
family
% corresponding to all units
OUR COMPANY | FINANCIAL RESULTS
AR
ALSEA 2022
16
1,648
Net income
18.6%
ROE4
34.8%
SSS
4,447
Units
5
9
4
,
8
3
9
7
3
,
3
5
1
3
8
,
8
6
8
1
9
,
6
1
1
3
,
2
1
0
7
0
,
4
1
2022 was a very good
year for OUR COMPANY
in terms of business
growth and positioning.
THROUGH RESPONSIBLE AND EFFICIENT
MANAGEMENT, WE MITIGATED INFLATION IN
INPUTS AND FACED THE INCREASE IN THE COST
OF ENERGY IN EUROPE. THESE RESULTS ARE A
REFLECTION OF THE TALENT AND COMMITMENT
OF OUR TEAM MEMBERS, LEADING US TO
AN OPTIMISTIC OUTLOOK WITH SIGNIFICANT
OPPORTUNITIES LOOKING FORWARD.
'20
'21
'22
'20
'21
'22
sales
ebitda
1. Figures in millions of nominal pesos reported under
IFRS standards (including the IFRS 16 effects and
the effects of the restatement due to hyperinflation in
Argentina), except data per share, number of units and
collaborators.
2. EBITDA is defined as operating income before
depreciation and amortization.
3. ROIC means dividing the Company’s net operating profit
after tax (total assets-cash and temporary investments-
liability at no cost).
4. ROE measures our Company’s net income divided by
our shareholders’ equity.
5. CAGR Compound Annual Growth Rate from 2017 to 2022.
RESULTS
Net Sales
Gross Profit
Operating Profit
EBITDA2
Consolidated Net Income
Balance
Total Assets
Cash
Liability Costs
Stockholders’ Equity
Profitability
ROIC3
ROE4
Stock Market Data per Share
Price
Earnings per Share
Dividend
Book Value per Share
Operation
Total Number of Units
Collaborators
%
2021
%
100%
53,379
100%
67.3%
36,626
68.6%
CAGR
2017-20225
ANNUAL
GROWTH
10%
9%
11%
17%
6%
2022
68,831
46,319
6,368
9.3%
14,070
20.4%
28.9%
26.5%
54.1%
14.3%
110.2%
1,648
2.4%
(5.4%)
(11.7%)
78,457
6,087
(12.4%)
27,789
3.1%
7,879
510 bps
870 bps
10.5%
18.6%
(2.9%)
$36.86
116.0%
$2.03
N.A.
5.5%
-
$9.61
$
$
$
5%
1%
4.3%
6.9%
4,447
76,382
7.7%
23.1%
1.5%
4,133
12,311
784
82,978
6,893
31,729
7,639
5.4%
9.9%
37.95
0.94
-
9.11
4,262
70,827
OUR COMPANY | CULTURE ALSEA
AR
ALSEA 2022
17
Our purpose is...
... and it entails a huge responsibility to our excellence and
service to make each consumption occasion an unbeatable
experience when, how and where our customers desire. To
achieve this, we have a team of collaborators who live our
values and bring Alsea’s philosophy to each geography in
which we have a presence.
Thanks to the ethics and transparency of our Corporate
Governance, we are moving towards fulfilling our long-
term vision, putting our hearts and focus on our customer’s
experience in everything we do.
OUR COMPANY | CULTURE ALSEA
AR
ALSEA 2022
18
WE surprise
OUR
CUSTOMERS
We are #1
AND ALWAYS GO
FOR MORE
We take care
OF BUSINESS
We do
WHAT
WE SAY
We empower
OUR
TEAMS
We are more agile
AND
STRAIGHTFORWARD
We have fun,
LEARN AND ENJOY
WHAT WE DO
OUR COMPANY | CODE OF ETHICS
GRI 2-22, 2-23, 2-24
AR
ALSEA 2022
19
CODE OF ETHICS
Each of us who are part of Alsea
promotes our values and culture.
We work with passion and common
goals to fulfill our purpose under the
principles of integrity and transparency
established in our Code of Ethics.
This ideology guides our business decisions to focus on
the customer experience, looking after our relationships
with stakeholders, incorporating sustainability aspects
and establishing the regulatory framework for our
supplier and fr anchisees’ behavior.
GUIDING PRINCIPLES
OF OUR
Code
of ethics
1.
Compliance with the law,
regulations and internal
and external rules
2.
Our customer
service
We live our Code of Ethics
with great pride and a
sense of belonging.
3.
Equal
opportunity
4.
Harassment-Free
workplace
5.
Job
security
6.
About
conflicts of
interest
7.
Acceptance
of gifts
8.
Transparent business
practices free of
bribery
9.
Taking care
of our work tools
10.
About
fraud
11.
Financial
information
12.
Taking care of our
private and confidential
information
13.
About the environment
and our responsible
use of resources
OUR COMPANY | CORPORATE GOVERNANCE
GRI 2-9, 2-27
AR
ALSEA 2022
20
CORPORATE
GOVERNANCE
At Alsea, sustainability is part of our
business strategy, and we live it at all
levels of the operation. Our Corporate
Governance policy guides our efforts to
improve Alsea’s economic, social and
environmental impacts, allowing us to be
exemplary, innovative and sustainable.
Every individual at Alsea is committed
to promoting leadership in sustainability,
transparency and the adoption of
corporate best practices.
C o r p o r a t e G o v e r n a n c e S t r u c t u r e
Bo a rd
O F D I R E C T O R S
Co mmittee
A U D I T
Co mmittee
C O R P O R AT E
P R A C T I C E S
Co mmittee
C O R P O R AT E
G O V E R N A N C E
Offi c e
O F T H E C E O
A L S E A
E U RO PE
A L S E A
S O U T H A M E R I C A
A L S E A
M E X I CO
In 2022, our Board Members
received training on ethical
and transparency issues.
50%
of our Board is made up of
independent members
20%
are women
OUR COMPANY | CORPORATE GOVERNANCE
GRI 2-9, 2-11, 2-12, 2-15, 2-17, 405-1
AR
ALSEA 2022
21
BOARD OF DIRECTORS
The Board of Directors is the highest governance body
of the Company. It supervises the implementation of
strategies and our decision-making processes, supported
by the Audit, Corporate Practices, and Corporate
Governance Committees to recommend and instruct
Senior Management on risk control mechanisms,
business performance, stakeholder relations policies,
compensation and regulatory compliance.
It has 11 members, three of which are related equity
directors, two are independent equity directors, and
six are independent. A related equity director chairs
the Board.
Related Equity
Alberto Torrado Martínez
President
Cosme Alberto Torrado Martínez
Board Member
Armando Torrado Martínez
Board Member
Independent Equity
Federico Tejado Bárcena
Board Member
Fabián Gerardo Gosselín Castro
Board Member
Alsea does not have Alternate Directors since it believes
that Directors who do not attend a Board meeting dilute
their obligations among the rest of the board members.
Alsea allows 25% of the board members to call a
meeting.
Independent
León Kraig Eskenazi
Board Member
Adriana María Noreña Sekulist
Board Member
Carlos Vicente Salazar Lomelín
Board Member
Alfredo Sánchez Torrado
Board Member
Luiz Carlos Ferezin
Board Member
Leticia Mariana Jáuregui Casanueva
Board Member
Board Secretary
Xavier Mangino Dueñas
*Board as of January 2023
Board Diversity
At Alsea, we are committed to applying Diversity and
Inclusion policies and initiatives at all levels of the
organization. In 2022, our Board had two women, and
the average age of the members was 56 years.
Board Experience
Our Board members include professionals with extensive
business experience in the food sector and robust
credentials in finance, international business, social
and philanthropic organizations, entrepreneurship and
innovation.
Furthermore, all our board members are or have
served as board members of leading companies, social
organizations and relevant associations.
Leaders in Sustainability
The directors are involved in the areas where they
have the most experience and participate in developing
strategies, studies and strategic inputs on social,
environmental and governance issues.
We have various governance instruments that guide our
relationships and business conduct and establish the
general guidelines for adherence to integrity, such as
our Code of Ethics, Conflicts of Interest Policy, Diversity
and Inclusion Policy, Code of Best Practices, and Global
Policy on Human Rights.
Further details about our Corporate Policies,
please visit
https://www.alsea.net/integridad-
corporativa.
OUR COMPANY | CORPORATE GOVERNANCE
GRI 2-10, 2-18, 2-19, 2-20
AR
ALSEA 2022
22
BOARD MEMBER SELECTION
AND REMUNERATION PROCESS
The Nominations and Compensation Committee is
responsible for our Board’s selection, appointment,
and renovation procedures. These must ensure a
breakdown of the entity’s corporate bodies that
permit the proper exercise of the functions attributed
to them by law, our Corporate Bylaws and regulations
in the Company’s best interest.
The appointments or re-election proposals that
the Board of Directors presents to the Company’s
Regular General Shareholders’ Meeting and its
direct appointments to fill vacancies in the exercise
of its powers of co-optation are approved at the
Committee’s proposal, in the case of independent
members, and following a report from this Committee,
in the case of all other members.
The proposals submitted for approval to the General
Meeting of Shareholders are accompanied by
a justifying report from the Committee with an
assessment of the proposed candidates’ competence,
experience and merit. The assessment is supported
by an evaluation of the balance of knowledge, skills
and experience on the Board of Directors, as well
as the conditions that each candidate must comply
with to fill the vacancies, assessing the time they
must dedicate to fulfill their mission adequately,
based on the needs of the Company’s governing
bodies at all times.
We are aware of our responsibility as a public Company
to implement institutionalization measures following
the provisions of the Code of Best Corporate Practices
established by the Mexican Stock Exchange. Therefore,
as of January 24, 2022, Alberto Torrado left his
position as Executive President to serve as Chairman
of the Board of Directors and Armando Torrado was
appointed CEO of Alsea on July 11, 2022.
The Nominations and Compensation Committee is also
the body empowered to propose to the Shareholders’
Meeting the remuneration of the members of the
Board of Directors. Alsea has determined this
remuneration as a fixed amount for attendance. We
have also implemented mechanisms and objectives
to evaluate their performance management and,
where appropriate, propose the necessary training
on issues relevant to the Company’s development.
All Board Members are
elected and re-elected
annually and individually.
OUR COMPANY | CORPORATE GOVERNANCE
GRI 2-13, 2-14
AR
ALSEA 2022
23
Audit Committee
Alfredo Sánchez Torrado
President
Luis Carlos Ferezin
Member
Federico Tejado Bárcena
Member
Elizabeth Estrella Garrido López
Secretary
(without being a member)
Corporate Governance Committee
León Kraig Eskenazi
President
Luis Carlos
Ferezin
Member
Armando Torrado
Martínez
Member
Alejandro Arturo
Kipper Lezama
Member
Roles and Responsibilities
• Recommend to the Board of Directors the Company’s
external auditors, their contracting conditions and
scope of work, and oversee compliance.
• Serve as the communication channel between the
Board of Directors and the external auditors, and
ensure the latter’s independence and objectivity.
• Review the work program, the observation letters
and the internal and external audit reports and
report the results to the Board of Directors.
• Meet periodically with the internal and external
auditors, without the corporate officers, to review
their progress reports and hear their comments
and observations.
• Give their opinion to the Board of Directors on the
policies and criteria used in preparing financial
information and the process for its issuance, ensuring
its reliability, quality and transparency.
• Help define general internal control and auditing
guidelines and evaluate their effectiveness.
• Confirm the observation of the mechanisms
established to control the Company’s inherent risks.
• Coordinate the internal auditor’s duties.
• Contribute to the establishment of policies for
operations with related parties.
• Analyze and evaluate operations with related parties
to make recommendations to the Board of Directors.
• Decide to hire third-party experts who issue their
opinion on operations with related parties or any
other matter to ensure the proper performance of
their duties.
• Verify compliance with the Code of Ethics and the
mechanism for disclosure of improper acts and
whistleblower protection.
• Assist the Board of Directors in analyzing contingency
and information recovery plans.
• Verify the implementation of the necessary
mechanisms to ensure that the Company complies
with the different legal provisions.
GRI 2-13, 2-14
AR
ALSEA 2022
24
Corporate Practices Committee
León Kraig Eskenazi
President
Cosme Alberto
Torrado Martínez
Member
Leticia Mariana
Jauregui Casanueva
Member
Fabián Gerardo
Gosselín Castro
Member
Elizabeth Estrella Garrido López
Secretary
(without being a member)
Roles and Responsibilities
• Suggest to the Board of Directors the criteria
for appointing or removing the CEO and C-level
executives.
• Propose the evaluation and compensation criteria
for the CEO and C-level executives to the Board of
Directors.
• Recommend to the Board of Directors the criteria
to determine the settlement for termination of the
CEO and C-level executives.
• Recommend the criteria for remuneration of the
Company’s board members.
• Analyze the proposal made by the CEO about the
staff compensation structure and criteria.
• Analyze and ask the Board to approve the statement
about the Company’s compliance with its corporate
social responsibility, the Code of Ethics, and the
information system used to report improper acts
and whistleblower protection.
• Analyze and propose to the Board of Directors the
approval of the formal succession system for the
CEO and C-level executives, and verify compliance.
• Study and propose the Company’s strategic vision
to ensure its stability and permanence to the Board
of Directors over time.
• Analyze the general guidelines the Office of the CEO
presents to determine the Company’s strategic plan
and follow up on its implementation.
• Evaluate the Company’s investment and financing
policies proposed by Senior Management and share
its opinion with the Board of Directors.
• Give an opinion on the premises of the annual
budget presented by the CEO and follow up on its
application and control system.
• Evaluate the mechanisms the Office of the CEO
presents to identify, analyze, manage and control
the Company’s inherent risks and share its opinion
with the Board of Directors.
• Evaluate the criteria presented by the CEO for the
disclosure of the Company’s inherent risks and
share its opinion with the Board of Directors.
OUR COMPANY | SUSTAINABILITY STRATEGY
GRI 2-24
AR
ALSEA 2022
25
SUSTAINABILITY
STRATEGY
At Alsea, we firmly believe that the
future is our responsibility and that
adopting a sustainability approach
will lead us to face current and future
challenges successfully.
We are committed to pioneering change and positively
impacting society and the planet by integrating clear
objectives and goals into our Sustainability Strategy.
We seek to offer unmatched customer experiences
and generate value for the Company, our employees
and the communities in which we operate. To achieve
this, we improve our processes to positively impact
the environmental and social aspects derived from
our activities through a long-term sustainability vision
we developed based on the adoption of corporate
best practices.
Our strategy is promoted by our Corporate Governance
Guidelines and implemented in all the regions in which
we have a presence, thanks to the support of the local
commissions and committees that work to ensure
adherence to the plans that will lead us to fulfill our
objectives.
4
Global Role
Model
2028-2030
We will use a
sustainability approach
at all levels and all
operational divisions
across
3
Consolidation
2024-2027
We will drive global initiatives
and governance systems for
our brands.
2
Awareness
2023
We will reinforce this
culture and establish
standardized
indicators.
1
Alignment
2022
We defined our ESG goals for
2030 and their contribution to
the UN 2030 Agenda.
evolution
OF THE
STRATEGY
OUR COMPANY | SUSTAINABILITY STRATEGY
GRI 2-29, 3-1, 3-3
AR
ALSEA 2022
26
MATERIALITY
In 2022, we implemented our first
double materiality by integrating
impact and financial aspects to
identify priority issues for Alsea’s
sustainability strategy and focus our
efforts on the common goals that
facilitate impact measurement and
monitoring.
The methodology we used for this analysis was based
on the Global Reporting Initiative (GRI) guidelines
and the terms established by the Sustainability
Accounting Standards Board (SASB). It began by
identifying relevant issues and prioritizing them
according to the opinions stated by the different
stakeholders and the strategic perspective of Alsea
and a final validation process.
identification
OF TOPICS
prioritization
validation
The consultation exercise we conducted to update
our materiality included the participation of the
following Stakeholders:
29
operations
managers
MEXICO, EUROPE AND SOUTH AMERICA
GLOBALLY
2,505
collaborators
98
suppliers
2
4
sustainability
4
COMMITTEE LEADERS
7
COUNTRIES
36
NGOs
related board members
financial
institutions
OUR COMPANY | SUSTAINABILITY STRATEGY
GRI 3-2
AR
ALSEA 2022
27
MATERIALITY
MATRIX
GLOBALLY INTEGRATED
As a result of this effort, we identified 35 material topics grouped
under our strategic pillars of sustainability.
3.70
+
3.60
3.50
3.40
3.30
3.20
3.10
3.00
2.90
2.80
2.70
2.60
2.50
2.40
2.30
2.20
e
v
i
t
c
e
p
s
r
e
P
r
e
d
o
h
e
k
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t
S
l
14
7
15
2
31
13
28
16
30
6
3
10
27
4
5
17
26
32
24
11
29
23
20
34
33
22
12
9
21
25
18
19
35
8
1
2.25
2.35
2.45
2.55
2.65
2.75
2.85
2.95
3.05
3.15
3.25
3.35
3.45
3.55
3.65
3.75
3.85
3.95
Internal Perspective (Alsea Executives)
+
# Material Topics (14)
Talent attraction and retention
1
Customer and consumer satisfaction
8
7
Brand reputation
15 Legal compliance
28 Food safety and quality
16 Sociopolitical risk management
6
3
10 Digital transformation
27 Customer and consumer health and safety
4
2
14 Corporate governance
30 Energy and emissions
Economic performance
Organizational culture and climate
Employee training
Diversity, equity & inclusion
Material impact and financial issues
Material financial issues
Impact material topics
Material topics
Potential material topics
(short term)
Non-material topics
#
Potentially material topics (16)
31 Waste management and circular processes
13 Ethics and integrity
11 Product innovation
17 Communication and transparency
5
Employee health, safety and well-being
32 Climate strategy
26 Nutritious and affordable products
24 Responsible communication and marketing of products
20 Responsible supplier assessment and development
21 Availability of local raw materials
34 Investment and social commitment
29 Water
23 Food waste
12 Human rights
33 Contribution to local food security
9
Data privacy and cybersecurity
# Non-material topics (5)
22 Responsible sourcing of raw materials
18 Stakeholder relations
25 Inclusive selling practices
19 Fair competition practices
35 Comprehensive development of farmers
and agricultural producers
OUR COMPANY | ESG MODEL
GRI 3-3
AR
ALSEA 2022
28
ESG
model
To focus on our purpose To
deliver happiness and experiences
full of flavor in every aspect of
our operation, we created our
ESG model, which illustrates
our sustainability strategy and
links our purpose to Alsea’s
economic (growth), environmental
(balance), social (development) and
governance, as well as our goals for
2030 and their direct relationship
with the Sustainable Development
Goals, prioritizing, as a frame of
reference, our stakeholders’ needs
and expectations.
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DEVELOPMENT
It integrates aspects of the development of our
collaborators in a fair, inclusive, diverse, dignified and
safe work environment, with the flexibility required to
harmonize their personal and professional lives.
It refers to providing food security for vulnerable
communities and promoting human development
through initiatives favoring education and employability.
BALANCE
It includes activities related to caring for our planet
with the efficient use of resources, such as energy,
water, inputs and waste.
GROWTH
It addresses issues related to operating responsible
brands that offer professional services and products
with the highest quality and safety standards, thanks
to the support provided by a leading industry supply
chain.
It also integrates the commitment to offer balanced
dishes and menus featuring alternatives for all lifestyles,
labeling, communications, responsible advertising, and
food waste reduction practices.
Our contribution to the UN 2030 Agenda
Putting our hearts into everything we do involves
setting specific sustainability goals to produce positive
impacts through our activities. Hence, we focus on
issues contributing to the UN Sustainable Development
Goals (SDGs). We aim to measure Alsea’s contribution
further and drive positive impact initiatives that advance
our focus and innovation.
GRI 308-1, 414-1
AR
ALSEA 2022
29
Growth
Progress made in
2022
We avoided food
waste (kg)
1,077,185
Mexico
62,137
South America
5,118
Europe
Suppliers in our operations evaluated
under social and environmental criteria
and standards
41%
Mexico
Alsea
Goal for
2030
0%
food waste
100%
suppliers audited on
sustainability issues
SDG
RELATED
TARGET
12.3 By 2030, halve per capita
global food waste at the retail and
consumer levels and reduce food
losses along production and supply
chains, including post-harvest losses.
12.6 Encourage companies,
especially large and multinational
corporations, to adopt sustainable
practices.
80%
of our menus in Mexico have updated
caloric information
100%
transparency in the calorific
content of our dishes
3.4 By 2030, reduce by one-
third premature mortality from non-
communicable diseases through
prevention and treatment and promote
mental health and well-being.
We started projects to improve
the nutritional quality of food
50%
of products with reduced salt,
sugar and/or fat
0%
artificial colors
and flavors
AR
ALSEA 2022
30
Development
Progress made in
2022
77%
of collaborators in Mexico receive salaries
above a living income (calculation based on data
from Mexico)
1%
of collaborators belong to
priority attention groups
508
Seniors
317
People with
disabilities
60
people with
refugee status
We develop and promote
female leadership.
Percentage of management positions held by women
23%
Overall
We support society with
programs that fight food
poverty
23%
PROGRESS
2,366,693
beneficiaries
Alsea
Goal for
2030
100%
of our collaborators are guaranteed
competitive compensation
within the industry in each country and salaries
above a living income
5%
of our collaborators belong to
priority attention groups
40%
of management positions held by
women
10 million
people benefited from our
programs to combat hunger
Economic investment in programs
to end hunger
17%
PROGRESS
2,069,207 USD
investment in 2022
15 million
investment in initiatives
to end hunger
SDG
RELATED
TARGET
10.4 Adopt policies, especially
fiscal, wage and social protection
policies, and progressively achieve
greater equality.
10.2 By 2030, empower and
promote the social, economic and
political inclusion of all, irrespective
of age, sex, disability, race, ethnicity,
origin, religion or economic or other
status.
5.5 Ensure women’s full and
effective participation and equal
opportunities for leadership at all
levels of decision-making in political,
economic, and public life.
2.1 PBy 2030, end hunger and
ensure access by all people, in
particular, the poor and people in
vulnerable situations, including infants,
to safe, nutritious and sufficient food all
year round.
4.4 By 2030, substantially increase
the number of youth and adults who
have relevant skills, including technical
and vocational skills, for employment,
decent jobs and entrepreneurship.
1.a Ensure significant mobilization of
resources from a variety of sources, including
through enhanced development cooperation, in
order to provide adequate and predictable means
for developing countries, in particular least
developed countries, to implement programs and
policies to end poverty in all its dimensions.
2.1 By 2030, end hunger and ensure
access by all people, in particular, the
poor and people in vulnerable situations,
including infants, to safe, nutritious and
sufficient food all year round.
AR
ALSEA 2022
31
Balance
Progress made in
2022
Greenhouse emissions (Tn CO2eq)
Scopes 1 and 2. We will take the year 2022
as our baseline.
154,455
tCO2e
Mexico
19,305
tCO2e
South America
51,569
tCO2e
Europe
Alsea
Goal for
2030
-25%
emissions CO2
We promote the use of a clean
energy infrastructure
Percentage of clean energy used
70%
Mexico
30%
South America
100%
Europe
100%
clean energy subject to each
country’s legislation
Water consumption in
thousands of cubic meters
2022 baseline
1,710
Mexico
19
South America
944
Europe
-35%
water consumption
We designed and built
2
restaurants certified as Green Stores
in 2022
100%
new stores built under Alsea’s
sustainable design and
construction standards
SDG
RELATED
TARGET
11.6 By 2030, reduce the adverse
per capita environmental impact of
cities, including by paying special
attention to air quality and municipal
and other waste management.
7.2 By 2030, increase substantially
the share of renewable energy in the
global energy mix.
6.4 By 2030, substantially increase
water-use efficiency across all sectors and
ensure sustainable withdrawals and supply
of freshwater to address water scarcity and
substantially reduce the number of people
suffering from water scarcity.
9.1 Develop
quality, reliable,
sustainable
and resilient
infrastructure.
Electrical energy (kWh)
2022 baseline
259.613
GWh
Mexico
58.300
GWh
South America
146.288
GWh
Europe
-25%
electricity consumption
7.3 Double
the global rate of
improvement in energy
efficiency by 2030.
OUR COMPANY | ESG MODEL
GRI 2-29
AR
ALSEA 2022
32
STAKEHOLDER
ENGAGEMENT
At Alsea, Delivering happiness and
experiences full of flavor also implies
caring for our relations with all
the sectors with which we interact
and that impact or are impacted
by our operation. Based on our
stakeholders’ concerns, we analyze
our sustainability strategy, business
risks and opportunities, and our
strategic plan and global challenges.
We strive to identify and prioritize those groups
with whom we must collaborate on strategic issues
for Alsea. For example, guaranteeing the quality
and safety of the food we offer in our restaurants,
improving our environmental impact or ensuring
regulatory compliance for our business are
some activities that require the establishment of
relationships and collaboration frameworks with
different stakeholders such as government agencies,
industrial chambers or associations, partnerships
with institutions, and civil society organizations.
Below we explain the channels we use to maintain
ongoing and regular communication with our key
stakeholders:
Customers
• Communication in restaurants
• Social media
• Mass media
• Annual report
• Email and website
• Communication campaigns
• Marketing campaigns
• Apps
• Loyalty programs
• Monthly newsletter
• Correct line
Collaborators
• Internal newsletters
• Communication boards
• Workplace
• Communications from the Office of the CEO
• Internal communication campaigns
• Screens
• Annual report
• Email and website
• In person and remote events and conventions
• Monthly newsletter
• Correct line
Media
• Evaluation visits
• Participatory diagnoses
• Work meetings
• Reports and control meetings
• Annual report
• Email and website
• Participation in forums and events
• Monthly newsletter
• Correct line
Community
• Evaluation visits
• Participatory diagnoses
• Work meetings
• Reports and control meetings
• Annual report
• Email and website
• Participation in forums
• In person and remote events
• Social media
• Monthly newsletter
• Correct line
Suppliers
• Visits
• Annual report
• Email and website
• Monthly newsletter
• Phone calls
• Correct line
Government
• Participation in events
• Reports
• Meetings
• Annual report
• Email and website
• Phone calls
• Official announcements
• Monthly newsletter
• Correct line
Partners and Investors
• Shareholder meetings
• Results report
• Phone calls
• Annual report
• Email and website
• Meetings
• In person and remote conventions
• Investor and Analyst Day
• Sending relevant communications
• Monthly newsletter
• Correct line
OUR COMPANY | ESG MODEL
AR
ALSEA 2022
33
AWARDS,
CERTIFICATES AND
SUSTAINABILITY
INITIATIVES
At Alsea, standing out as a responsible
Company working with the best
industry standards and as a leader in
the sectors and markets we participate
in is the result of many years of
efforts to achieve and endorse relevant
recognitions, certificates, and awards.
These recognitions guide us and lead us towards
the corporate best practices in social, economic and
environmental matters and reaffirm our commitment
to excellence in everything we do.
UN Global Compact
Since 2011, we have followed the UN Global Compact,
the leading corporate sustainability initiative worldwide.
This adhesion represents a commitment to promote
and comply with its Ten Principles in human rights,
labor, and the environment.
S&P/BMV Total Mexico ESG Index
Since 2013, we have been listed on the IPC Sustentable
Index, now known as the S&P/BMV Total Mexico ESG
Index, aimed at providing exposure to the Mexican
market and boosting the performance of companies
that meet sustainability criteria.
ESR Certificate
For the 11th year in a row, the Mexican Philanthropy
Center (CEMEFI) gave us this distinction highlighting
our performance in five pillars of sustainability: Quality
of life, environment, ethics, community engagement,
and corporate social responsibility management.
Company Committed to Labor
Inclusion Certificate
For our progress and contribution to including people
with disabilities in our workplace, according to the
inclusion strategy established by the Labor Inclusion
Index for people with disabilities.
Éntrale.org.mx is a digital platform that promotes labor
inclusion by connecting companies with civil society
organizations that assist with implementing inclusion
programs and programs for people with disabilities.
This year we received an award for our progress in
favoring the Labor Inclusion of People with Disabilities
in Mexico.
Dow Jones Sustainability Index
Since 2018, Alsea has been included in the Dow Jones
Sustainability Index (DJSI) in the Latin American
Integrated Market (MILA), a benchmark index that
measures the ESG performance of publicly traded
companies. For the Company, being listed on this
index means being recognized for identifying and
managing risks and opportunities on the economic,
social and environmental fronts and creating value
for all its stakeholders.
The Sustainability Yearbook 2022
Recognition from Standard & Poor’s (S&P) Financial
Services LLC Global. This year we were listed among
the ten Mexican companies recently added to the
Yearbook for our efforts to promote the development
of ESG matters. It is important to note that we were
the only Mexican Company in the restaurant industry
that received this recognition.
AR
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34
SUSTAINABLE GROWTH
GRI 3-3
AR
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35
DELIVER
happiness
AND EXPERIENCES FULL OF FLAVOR MEANS
HAVING A BUSINESS MODEL THAT GENERATES
VALUE, PLACING THE CUSTOMER AT THE HEART
OF OUR BUSINESS DECISIONS TO MEET AND
EXCEED THEIR EXPECTATIONS WITH OPTIONS
THAT RESPOND TO THEIR LIFESTYLES.
Sustainable growth is the result of carefully
integrating all factors in our supply chain, from
planning and selecting the best suppliers committed
to implementing best practices through delivering
our products inside or outside our restaurants.
GROWTH | SUPPLY CHAIN
GRI 2-6, 3-3
AR
ALSEA 2022
36
supply
CHAIN
SUPPLY CHAIN
At Alsea, we know that happiness
and flavor are found in every
detail, experience, and visit to our
restaurants. For this to happen, we
have a team of professionals who
work to ensure that each dish provides
an extraordinary experience for our
customers every day in each geography
in which we have a presence.
Our supply chain leads to significant
efficiencies representing a competitive
advantage for our brands. It provides
specialized attention to our stores in
the planning and supply processes,
procurement, manufacturing, quality,
new product development, logistics
and distribution. And thanks to the
Alsea Shared Services Center, we
also have access to help with human
resources, finance, technology and
security processes.
New product
development
Planning
and supply
Purchasing
Manufacture
Logistics
Distribution
Food safety quality
GROWTH | SUPPLY CHAIN
AR
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37
Our Company comprises a network of
11 distribution centers and 11 production
plants, some wholly owned and others
operated by third parties, which we
select and certify under the highest food
safety and quality standards and carefully
supervise to meet the requirements
established by our global brands. These
work centers produce our bread, pizza,
pastry dough, sandwiches, processed
meat products, and sauces.
+60,000
kilometers traveled
+530
cities
12
+44,000 TONS
of pizza dough per year
+16,000
COUNTRIES
SKUS
+6,300
deliveries
PER WEEK
+4,400
stores
SERVED
OUR
achievements
OUR
strategic
PILLARS
TO BE THE BEST
GLOBAL FOOD SERVICE
LOGISTICS OPERATOR
1
2
TO HAVE A TEAM
OF HIGHLY TRAINED
PROFESSIONALS
TO EXCEED
OUR CUSTOMER
AND INVESTORS’
EXPECTATIONS
3
4
TO CARE
FOR THE ENVIRONMENT
AND THE QUALITY OF LIFE
OF OUR TEAM MEMBERS
GROWTH | SUPPLY CHAIN
GRI 2-6, 3-3
AR
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38
SUPPLY
At Alsea, we know that
sustainability is a commitment
that must span the entire value
chain to guarantee a responsible
operation and lower our operation’s
environmental and social impact to
ensure significant changes in our
industry. As a leading Company
in our sector, we are responsible
for leading the way to a more
sustainable and responsible value
chain.
Our supply process begins with our selection of
suppliers of inputs and services. To guarantee the
quality and traceability of our raw materials and ensure
compliance with our Quality and Food Safety Policy, we
work with suppliers holding certifications recognized
by the Global Food Safety Initiative (GFSI). Some of
our suppliers are still undergoing their certification
processes, so we grant them conditional approval
provided they comply with good manufacturing
practices and have implemented an Analysis of
Critical Control Points (APCC) system certified by
a third party.
We work to ensure that our restaurants’ essential
products and supplies are backed by international
sustainability certifications, such as Fairtrade, the
Rainforest Alliance, the Roundtable on Responsible
Soy, and the Roundtable on Sustainable Palm Oil.
In 2022, 41% of our suppliers in Mexico presented
evidence of some type of audit in terms of social
responsibility.
Food safety audits in
restaurants
3,976
Europe
GROWTH | SUPPLY CHAIN
GRI 308-1, 414-1
AR
ALSEA 2022
39
RESPONSIBLE
SOURCING
We generate shared value across
our entire value chain. The
relationships we establish with our
suppliers, as our strategic partners
in fulfilling our purpose, are the
cornerstone that underpins our
operation and are based on trust,
compliance with our values and
commitment to excellence.
México
+3,000
direct
suppliers
84%
are local suppliers
To ensure compliance with our health and safety
commitments across the supply chain, we rely on our
Global Purchasing Policy, approval procedures, risk
management and supplier audits to verify the quality
management systems used in their processes and
facilities.
We have specific human and labor rights guidelines
and environmental and anti-corruption regulations
applicable to all suppliers who sign our Code of Ethics
at the beginning of our business relationship.
Furthermore, our Global Purchasing Policy establishes
the principles governing our commercial relations
based on respect, professionalism and mutual benefit,
promoting healthy competition and equal opportunity
for all.
We work hand in hand with our suppliers, supporting
their development and encouraging them to adopt
certifications and sustainable approaches.
We have a program in place to approve, develop and
monitor the performance of our food and packaging
material suppliers. This program guarantees their
regulatory compliance with the health and safety
issues the authorities and our brands demand of us.
This matter is particularly important because 90% of
our suppliers in Mexico are small and medium-sized
enterprises (SMEs).
GROWTH | SUPPLY CHAIN
IA
AR
ALSEA 2022
ALSEA 2022
40
40
OUR
suppliers
100%
audited
IN MEXICO
97%
approved
BASED ON QUALITY
AND SAFETY CRITERIA
IN COLOMBIA
OF OUR FOOD AND PACKAGING
100%
material
suppliers
IN MEXICO
ARE AUDITED AT LEAST
ONCE A YEAR
GROWTH | SUPPLY CHAIN
AR
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41
FOOD QUALITY
AND SAFETY
At Alsea, we grow thanks to the trust
of our customers, which is why we
recognize the importance of the quality
and safety of the products and supplies
we use in our restaurants.
This has led us to establish standards and guidelines
to ensure that our products meet the highest quality
standards and comply with our Quality and Food Safety
Policy.
Alsea Mexico uses the Alsea Comprehensive Safety
and Quality Management System (SIGICA, acronym in
Spanish) to establish and share with the entire operation
the procedures and policies that guarantee the quality
and safety of the food we serve in our restaurants. In
2022, Alsea’s distribution centers in Mexico completed
their Safe Quality Food (SQF) certification process
spanning all supply chain stages from production to
manufacturing, distribution, packaging and the sale of
our products.
Food
HEALTH
At Alsea Europe, the brands and business units manage
the Hazard Analysis and Critical Control Points (HACCP)
system daily, which reflects the procedures and controls
based on quality requirements to prevent and mitigate
the risks inherent to food products and the daily activities
of restaurants and facilities.
SUPPLIES
We follow rigorous acquisition
and audit processes to guarantee
the quality of the raw materials
we use to make our products.
In 2022, we worked on digitalizing our food safety control
tools. Using the bioluminescence method, we establish
the electronic HACCP through digitized controls and
records and have a new model for digital analytical
sampling of surfaces.
CONSERVATION
We have cold chain traceability
processes to ensure the supplies
are stored and distributed at the
right temperature to preserve their
flavor and nutritional values.
PREPARATION
We implement strict cleaning
and sanitation controls in the
production areas of each phase
of the process.
SERVICE
We have implemented protocols
for the reception and storage of
supplies, production processes,
personal hygiene and maintenance
of the facilities.
GROWTH | SUPPLY CHAIN
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42
ANIMAL WELFARE
We implement joint actions to generate
well-being and work hard to ensure
our products are made with inputs
that contribute to practices focused
on ensuring animals are treated with
respect and dignity, adhering to animal
welfare and zero tolerance towards
animal cruelty policies.
In 2022, we began to draft a Code of Conduct for our
external stakeholders, including suppliers, considering
relevant corporate responsibility issues, including
animal welfare. This Code of Conduct will formalize
and strengthen our approach to the dignified treatment
of animals and the principles we want to promote in
this regard.
We work to ensure that our brands source products
according to sustainable approaches. This year, The
Cheesecake Factory Punto Valle in Guadalajara,
Mexico, began buying cage-free eggs, securing 1,550
kg in five months. We hope to extend this initiative to
more restaurants in 2023, as permitted by supply and
commercial conditions.
PRINCIPLES OF
animal
welfare
4.
Freedom from
injury and disease
5.
Freedom to
display their
natural behavior
1.
Freedom from
cages, hunger,
thirst and
malnutrition
2.
Libre de temor y
angustia
3.
Freedom
from physical
and thermal
discomfort
Los Tlaxcas Farm
Cage-free eggs
In 2021, we partnered with the Peace Fund (Fondo
para la Paz) NGO and the Los Tlaxcas Farm to
purchase eggs laid by cage-free hens. Local
families work the farm and painstakingly prepare
the eggs the Peace Fund delivers directly to our
restaurants weekly. By year-end, we reported the
consumption of 468 kg of cage-free eggs.
OF CAGE-FREE
468 kg
eggs
GROWTH | UNMATCHED CUSTOMER EXPERIENCES
AR
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43
UNMATCHED
customer
experiences
At Alsea, we want to be happiness multipliers and
make each meeting an unparalleled experience.
Our Customers are our reason for being, and we
look after every detail in our processes for them,
from creating products that respond to their
lifestyles to the service we provide both inside and
outside our restaurants.
Thanks to our ability to adapt and innovate, we
launch new products, services and communication
channels that respond to key market trends.
GROWTH | UNMATCHED CUSTOMER EXPERIENCES
GRI 3-3, 417-1
AR
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44
RESPONSIBLE
CONSUMPTION
According to the World Health Organization, obesity
is one of the main risk factors leading to numerous
chronic diseases, including diabetes and cancer. In
recent decades, the percentage of people with obesity
has tripled worldwide and in Latin America, 62% of
the adult population is overweight.
At Alsea, we are implementing initiatives to face this
challenge, promoting the adoption of balanced eating
styles based on standards, health recommendations
and the preferences of the millions of customers we
serve through our brand portfolio.
We create options for customers to enjoy delicious
and healthy dishes and provide relevant nutritional
information with alternatives to meet all tastes and
preferences. Our goals for 2030 include transparency
in the calorific content of our dishes and salt, sugar
and fat reduction in our products. We aim to offer
dishes made without artificial flavors or colors in all
our restaurants to provide the best quality and promote
healthier diets.
80%of the menus in our
restaurants in Mexico
have updated caloric
information
40%of our brands
offer menus with fewer
calories and options suitable
for different eating styles
GROWTH | UNMATCHED CUSTOMER EXPERIENCES
AR
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45
Domino's Nutritional
Calculator
Domino’s Pizza created a nutritional
calculator to learn about our customers’
needs and recommend options that are as
delicious as they are nutritious. This app
calculates body mass based on age, height,
weight, and lifestyle data to provide diet,
physical activation recommendations, and
cooking secrets.
Burger King’s
Gluten-Free Menu
Burger King expands its gluten-free
offer as part of the FACE project.
The chain offerings include new
options with and without cheese,
including French fries for those
demanding consumers looking to
enjoy delicious gluten-free dishes
that meet their nutritional needs in
adherence to their healthy lifestyles.
NotBurger at Burger
King and Chili's
Hamburger made with
pea protein, vegetable fat,
vegetable oil, vegetable
fibers and natural flavorings
NotMilk at Starbucks
A healthy option to
personalize your favorite
beverage, with vegetable
milk made with seeds,
including soybeans,
almonds, chestnuts and
walnuts.
Plant-based
Aware of how consumer preferences
evolve as customers look for options
to eat a balanced diet, this year, we
partnered with the leading food
technology startup NotCo. The goal is
to provide customers with more and
better plant-based meal options with
products like NotBurger, NotChicken,
and NotMilk at our Chili’s and
Starbucks restaurants.
GROWTH | UNMATCHED CUSTOMER EXPERIENCES
AR
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46
INCLUSIVE
AND SAFE SPACES
Comfort, cleanliness, safety and
accessibility in our restaurants are
essential to creating unparalleled
experiences and encounters for our
visitors.
The World Health Organization estimates that 16% of
the world’s population lives with some type of disability.
Hence, Alsea strives to ensure that our restaurants
meet the highest inclusion standards because we love
to welcome all customers.
Our Diversity and Inclusion Policy establishes the
guidelines to promote and nurture the inclusion of all
people, eliminating any type of barrier and tailoring our
services to meet our customers’ needs and ensure
we offer them a positive experience.
Our Burger King, Starbucks, Italianni’s, P.F. Chang’s,
and Chilli’s brands currently operate branches offering
universal access for people with some type of physical
disability. These restaurants have entry ramps, special
parking spaces, restrooms, and areas designed to
accommodate people with disabilities, including
handrails and proper lighting. We focus on these
issues because we know the future means dreaming
of safe, diverse, and inclusive spaces tailored to our
customers’ needs.
GROWTH | DIGITALIZATION
AR
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47
Digitization
At Alsea, we strive for an increasingly
efficient operation focused on business
intelligence, innovation and technology.
Digital platforms are transforming all
industries, and the restaurant sector is
no exception.
Our omnichannel strategy has
been one of our linchpins of digital
transformation. The Delivery
channel has maintained its growth
trend, representing 17.8% of Alsea’s
consolidated sales, a 13.8% growth over
2021, totaling 50 million global orders.
We create consumer
experiences to turn
transactions into relationships
GROWTH | DIGITALIZATION
AR
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48
DIGITAL
presence
Our apps and loyalty programs have
reached all-time highs for active
users, reflecting our commitment to
operational excellence by making
technology our best ally.
We know that there is huge potential for growth thanks
to the opportunities offered by digital platforms and
selective marketing, and we will continue working to
strengthen our technological tools to offer enhanced
customer experiences.
Starbucks
Global Alsea (all countries)
THE DOMINO'S
APP
Domino’s Pizza
Mexico, Spain and Colombia
WOW+
VIPS
CLUB
BK, Domino’s, Chili’s, Italiani’s,
P.F. Chang’s, Starbucks, Vips,
The Cheesecake Factory
Vips
THE FOSTERIAN’S
APP
Foster's Hollywood
Mexico and Spain
Spain
Spain
MY
BK
Burger King
Mexico, Spain, Chile and Argentina
NEW CHANNELS
WhatsApp / Teams
AGGREGATORS
Glovo / Rappi / Uber Eats / Didi Food
GROWTH | DIGITALIZATION
AR
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49
WOW+
Being able to surprise our customers by
giving them what they want, whenever,
however, and wherever they want it,
is the greatest value featured by our
digital transformation project.
Our WOW+ program consolidates all our brands in a
single place to ensure our customers earn points with
each consumption, both in restaurants and online. The
competitive advantage our Inside Analytics and Big
Data departments provide allows us to understand
our customers’ tastes, preferences and frequency
of consumption, reward their loyalty and provide
personalized benefits and rewards, always prioritizing
their personal data’s privacy and security.
1.
PERSONALIZED
OFFERS AND
PROMOTIONS
2.
EARN POINTS
WITH EACH
PURCHASE
3.
BENEFITS
4.
REWARDS
GROWTH | DIGITALIZATION
GRI 3-3, 318-1
AR
ALSEA 2022
50
CYBERSECURITY
The innovation and digitization
processes instilled in our operations
have led us to strengthen our platforms’
cybersecurity to protect the personal
information we handle with our
customers, team members, suppliers
and legal representatives, among others.
Because we are aware of our responsibility to correctly
handle this information and prevent the risk of breach
of confidentiality at all times, we have implemented
security protocols aligned with the laws in force in
each region in which we operate and use all available
mechanisms to guarantee the protection of the data
we receive.
During the period included in this report, we did not
receive any claims related to a breach of our information
systems that would put privacy or loss of information
at risk.
AR
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51
DEVELOPMENT | TEAM ALSEA
GRI 401-1
AR
ALSEA 2022
52
positively
IMPACT
EVERYONE WE DEVELOP WITH, BEGINNING
AT HOME, WITH OUR TEAM MEMBERS.
WE ARE COMMITTED TO PROVIDING THEM
WITH A SPACE NURTURING PERSONAL AND
PROFESSIONAL DEVELOPMENT IN A SAFE,
INCLUSIVE ENVIRONMENT OFFERING EQUAL
OPPORTUNITIES.
In this sense, we contribute to the community’s
sustainable development through our programs
created to fight hunger and favor education and
employability. We know it is not an easy path,
but we have the passion and commitment to
achieve these goals.
We emphasize:
Talent
ATTRACTION
AND RETENTION
Culture
AND ORGANIZATIONAL
CLIMATE
Diversity,
EQUITY AND
INCLUSION
DEVELOPMENT | TEAM ALSEA
AR
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53
TEAM ALSEA
Our team is growing every day. We are
a multicultural team that works with
pride and a sense of belonging in an
environment of respect and harmony.
We share the same values and take our
philosophy to each region where we
have a presence.
We consistently strive to improve our
talent attraction and retention policies
and programs because we want the
experience of working at Alsea to
inspire our team members and nurture
their development.
new hires
2022
Women
Angentina
1,863
Chile
2,099
Colombia
981
Spain
7,627
France
437
Mexico
10,868
Netherlands
Portugal
Uruguay
199
169
63
Men
1,451
1,778
1,418
9,101
326
15,777
87
138
27
DEVELOPMENT | TEAM ALSEA
GRI 2-7
AR
ALSEA 2022
54
women
49.4%
78,944
Collaborators
50.6%
men
35,300
46% Mexico
Men Women
18,937 16,363
20,588
27% Latin America
Men Women
11,163
9,425
23,056
27% Europe
Men Women
11,569 11,487
60%
full-time
96%
with a
permanent
contract
396,577,134
hours worked in 2022
16-17
18-20
21-29
30-39
40-49
50-59
60 or older
0
0
2,484
1,956
9,398 6,897
3,513
4,111
2,551
2,012
1,349
815
97
117
16-17*
18-20
21-29
30-39
40-49
50-59
60 or older
76
77
1,954 2,467
6,707
5,473
1,458
1,413
349
362
85
125
20
22
16-17
18-20
21-29
30-39
40-49
50-59
60 or older
2
1,753
5,431
2,329
1,350
556
148
8
1,769
5,136
2,151
1,619
695
109
Note: The figures include Alsea business units in Mexico, South America and Europe (Spain, Portugal, France and the Netherlands) as our most significant geographies and those with their
own establishments.* Hiring teenagers ages 16 and 17 in Argentina is protected by Article 32: Ability. People can enter into an employment contract from the age of 18. People aged 16
and 17 can enter into an employment contract with authorization from their parents, guardians or tutors. Such authorization is presumed valid with the teenager does not live with them.
508
people over 60
116
hired in 2022
317
persons with
disabilities
60
people with refugee
status
An inclusive and
diverse environment
is not only right but
essential to attracting
and retaining the
best talent.
DEVELOPMENT | TEAM ALSEA
GRI 3-3
AR
ALSEA 2022
55
DIVERSITY, EQUITY
AND INCLUSION
Shaping a company where we can feel
free to be who we are in a diverse
environment that promotes equity and
equal opportunity, builds trust and
makes you feel welcome is one of our
main objectives.
Our commitment to respectful and equal diverse
treatment comes from our Code of Ethics, which
promotes Diversity and Inclusion as a core focus. To
create a more robust corporate framework, in 2022,
we updated and strengthened our Diversity, Equity
& Inclusion (DEI) Policy that sets specific guidelines
regarding diversity, labor equality, non-discrimination
and the inclusion of priority attention groups and
provides us with governance structures that facilitate
the design and implementation of programs to meet
these goals.
DIVERSE TEAM
Diversity is a gift. It means understanding our individual
value when we contribute our ideas and talent to create
solutions. At Alsea, we create teams with collaborators
of diverse ages, beliefs, genders, and experiences. One
of our goals for 2030 is to ensure that 5% of our team
members come from priority attention groups (people
with a disability, refugees, seniors), and we are on the
right track to meet this goal.
DEVELOPMENT | TEAM ALSEA
GRI 405-1
AR
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56
Team members with
some type of disability
175MExico
39South America
103Europe
• Equal selection, hiring and promotion processes
• Actions to raise awareness and drive the creation
and shaping of communication channels
• Compliance with our compensation policy
•
• Sexual harassment prevention and elimination
Improved mediation processes
In addition, Fundación Alsea A.C. supports the integration
of people with Down Syndrome by purchasing art. The
Foundation has purchased more than 800 prints and
lithographs hanging on the walls of more than 200
Starbucks stores. Our Pedregal branch in Mexico City
features a mural painted by four artists. Our Vips stores
also joined this initiative and purchased 29 art pieces,
while Domino’s Pizza has purchased 88 works painted
by students at the Mexican School of Down Art..
We have partnered with government agencies in Mexico,
like the National Institute of Seniors (INAPAM), to help
include seniors in the workforce. We want to leverage
the value provided by their experience and ensure that
all our senior collaborators feel safe and appreciated.
Other of our internal initiatives include our awareness
campaigns featuring testimonial videos created by our
teams in South America to raise awareness about the
importance of respecting differences and promoting
inclusion. We also collaborate with specialized
organizations such as Éntrale and Pride for experience
and knowledge exchanges to apply inclusion and
diversity best practices.
At Alsea Spain, the Equality Plan continues to
establish the protocols and procedures to guarantee
compliance with our principle of equality, as it includes
the objectives established to strengthen our gender
equality perspective and focus on its management.
Some of the key measures we’ve established to ensure
equal opportunities between women and men are
as follows:
DEVELOPMENT | TEAM ALSEA
AR
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57
DIVERSITY AND
INCLUSION COMMITTEE
During this period, the Diversity and Inclusion Committee
promoted programs that contributed to consolidating the
organization’s diversity and inclusion and guaranteeing
our multiculturalism, gender equality, profile diversity
and the experience of Alsea team members.
GENDER EQUITY
AND FEMALE LEADERSHIP
We promote effective equality between men and women
in all labor aspects, including access to employment,
training, promotion and opportunities to ensure a
balanced representation of female talent at all levels
across the organization.
• Hiring guidelines. Our DEI Policy proposes including
at least one woman in the hiring lists based on a
function analysis.
• Human Rights Policy. Fosters fair practices and
non-discrimination in all Alsea processes and
functions.
One of the Committee’s responsibilities is to ensure
that all team members individually pledge to follow
the procedures established by our Diversity, Equity &
Inclusion (DEI) Policy to guarantee diversity, inclusion
and non-discrimination in their actions, drawing
attention to any discriminatory practice they see and
refraining from harassing or intimidating their team
members, customers or visitors.
One of our goals for 2030 is to ensure that women
hold 40% of management positions. To make this a
reality, we have instruments such as:
Hires
26,645
Mexico
40.7%
women
9,680
South America
51.7%
women
18,104
Europe
50%
women
women
on the rise
23%
in leadership
positions
DEVELOPMENT | TEAM ALSEA
GRI 3-3, 403-4, 403-5, 403-7
AR
ALSEA 2022
58
EMPLOYEE
WELL-BEING
Our team members’ well-being
comprises several dimensions, such as
physical and mental health, healthy
diets, physical activity, and work-life
balance. At Alsea, we offer our team
members programs and initiatives
addressing these issues to provide them
with a positive workplace experience.
RISK PREVENTION
Occupational safety begins with prevention. We want
our collaborators to feel safe and confident in their
workplaces and know that they will be cared for in any
situation that could represent a risk for them and diners
visiting our restaurants. Alsea has an Occupational Risk
Prevention Policy that establishes the guidelines to achieve
Occupational Health and Safety objectives. Our strategy
addresses specific lines of action as follows:
• Preventive training. We teach courses and provide
workshops and training activities to raise awareness
among our collaborators on safety issues to avoid
accidents.
• Communicating opportunities for improvement.
We analyze and communicate the opportunities
for improvement detected in our reviews and
inspection tours. In 2022, we conducted more than
5,000 preventive visits and risk assessments in
our restaurants focused on preventing accidents.
• Accident investigation. We conduct investigations
and take corrective action as required.
• Consultation and participation. We use our internal
inquiry tools to include questions on these topics
and use the results to inform our team about our
health and safety strategy.
COMPREHENSIVE
safety
TECHNOLOGY
The implementation of
cutting-edge anti-intrusion
and video surveillance
system technologies.
HIGH IMPACT
CRIMES
The activation of night
patrols, liaison with local
security systems, workshops
and periodic bulletin
publications.
PHYSICAL
SAFETY
Continuity of the Host
Guard model 24/7365.
INVESTIGATION
Response to requests to investigate an
operation or investigations conducted
as the result of a regular store visit.
TICKETS
Risk analysis at the
request of the protocols
established for the
Service Desk.
MONITORING
Support through patrols,
medical assistance
services and fire trucks.
In 2022, our collaborators
in Mexico received:
603specialized
healthcare
services
HEALTH SERVICES FOR OUR
COLLABORATORS IN MEXICO
Breast ultrasound 60 collaborators
and 30 family members
Medical checkup in laboratories
Resting electrocardiogram
Influenza vaccines
90
100
103
310
DEVELOPMENT | TEAM ALSEA
GRI 403-2, 403-3, 403-5, 403-6, 403-9
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59
In this reporting period, an average of half a day of work
by collaborator was lost due to injury (632,035 hours),
and we received 50 health and safety risk notifications.
We are implementing the strategies mentioned above to
reduce this number. For example, in 2022, we promoted
safety and hygiene to preserve our collaborators’
physical and psychosocial integrity through training
for new hires, monthly safety talks, and specific topic
training courses.
RISK ASSESSMENT
Risk assessments
Risk assessments (external)
Factory inspections
Safety inspections
Internal operations audits
Drills
MEXICO
183
9
13
2,229
1,000
3
Otro aspecto muy importante en materia de seguridad
es la prevención de violencia de género. En respuesta,
implementamos iniciativas para que nuestras
colaboradoras perciban que no están solas y que
son escuchadas:
• We established a care protocol for victims of gender
violence
• We held workshops on gender violence with the
participation of 900 collaborators in Monterrey,
Guadalajara, and Mexico City.
• We work with the local authorities to outline safe
and patrol points near our restaurants.
DRILLS
We implemented natural disaster follow-up programs,
and 554 collaborators participated in an earthquake drill.
HEALTH
We know that mental health and burnout represent
distressing societal and workplace issues. According
to the WHO, an estimated 15% of working-age adults
have a mental disorder at any point in time. Therefore,
we developed the “Online With You” service program
at Alsea to provide our collaborators with free
psychological care and support. The program served
2,572 people in Mexico in 2022.
DEVELOPMENT | TEAM ALSEA
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60
TRAINING
We accompany all our team members
in their career plans, offering the
same opportunities for professional
development and corporate growth
based on their performance and
commitment.
At Alsea, we have four specific lines of action to attract,
retain, develop and engage the best talent:
•
1. Efficient structures to implement our strategies
2. Talent attraction, development and retention
3. The promotion of a service culture
4. Reinforce the sense of pride for belonging to Alsea
We manage our work team’s training processes with
a plan structured in three phases:
Initial training. Mandatory training for all new hires
joining our Company. It includes comprehensive,
brand-specific, global training on our corporate
culture and policies.
• Continuous training. Specific training in the work
area, on the product and skills, allows our team
members to stay current and receive regular
cross-curricular training.
• Accompaniment process. Training of high-potential
collaborators, which allows them to develop their
skills.
USD 2,891,404
invested in training
and development
2,729,800
hours of training
36
HOURS PER
TEAM MEMBER
DEVELOPMENT | TEAM ALSEA
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61
TRAINING
programs
Alsea College
Our virtual learning content platform
for collaborators provides access
to management courses and skills.
In 2022, 58,428 collaborators
representing 77% of the Alsea team,
took a course on the platform.
University Certificate
Program for Managers
This program is intended to
acknowledge our restaurant
managers academically, recognizing
their skills and competencies. They
are also provided with financial
management, marketing, HR, and
managerial skills, concepts and tools
to run their restaurants. The firm
commitment behind this course is to
transfer our vision for the business,
implement the necessary measures
to avoid unforeseen events, and lay
the foundation supporting the path
to sustainable growth.
Owner Manager
Digital Mindset Program
A program focused on leadership
development where our operations
leads can strengthen their profiles,
and develop the skills required
to improve business decision-
making processes, promote
growth opportunities and obtain
compensation as winners, with
an inclusive and more humane
approach. 4,648 people have been
trained under this initiative.
Management This program was
designed to change our managers’
mindset and attitudes, both at the
restaurants and in our support
centers, allowing them to respond
in a scalable and systematic manner
to the ongoing cultural and digital
transformation, thus favoring more
autonomous, agile and efficient
teams.
DEVELOPMENT | TEAM ALSEA
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62
Key factors in our team members’ development are
assessments and feedback. At Alsea, we promote
the evaluation by objectives to give clarity to our
collaborators of the business goals and thus build
them as a team.
WOMEN
PERFORMANCE
EVALUATED BY OBJECTIVES (29%)
evaluations
22,626
collaborators
19,712
collaborators
310
collaborators
EVALUATED THROUGH CALIBRATION (25%)
203
107
WOMEN
WOMEN
MEN
MEN
MEN
EVALUATED THROUGH ALSEA
LEADERSHIP INDEX (ALI) (0.67%)
12,176
10,450
10,629
9,083
DEVELOPMENT | TEAM ALSEA
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LABOR
CONDITIONS
At Alsea, we strive to ensure that
our team members feel valued and
appreciated in safe, professional
environments with the best conditions
in the sector, thus fostering a strong
sense of belonging and commitment to
the Company.
We know the challenges our industry faces in retaining
and attracting talent. Internationally, turnover in our
sector is approximately 75%, with 80% estimated
for Mexico. That is why we work tirelessly to ensure
that our collaborators feel valued and appreciated in
safe, professional environments with the best market
conditions, thus fostering a strong sense of belonging
and commitment to the Company. Thanks to this effort,
the turnover rate at Alsea was 71% this year, which
exceeded our expectations.
Satisfaction and a sense of belonging are essential
elements to our team members. During the last period, we
obtained a 92% response rate to the global engagement
survey evaluating satisfaction, treatment and leadership
at Alsea. Of that percentage, 81% mentioned being
actively engaged with our Company.
DEVELOPMENT | TEAM ALSEA
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LIVING INCOME
Aware of industry trends, the economic context and
the international situation, at Alsea, we have been
working to establish indicators to calculate the base
salary of our collaborators using geographic and market
references and family income studies. The well-being
of our collaborators is a central issue for our business;
therefore, one of our goals for 2030 is for 100% of
our team members to have a guaranteed salary that
is competitive with the industry in each country and a
decent salary above the living income. The objective is
that our collaborators have an adequate income that
covers their individual and their families’ basic needs.
PARENTAL LEAVE AND
LACTATION ROOM
For our collaborators who continue breastfeeding their
babies after they return to work after maternity leave,
we have a lactation room designed with the conditions
required to extract and store their milk.
In 2022, 1,273 collaborators took their parental leave:
26% were granted to fathers and 73% to mothers
of newborns. These percentages are influenced by
regulatory changes and global trends oriented towards
parental co-responsibility.
At Alsea, we promote effective protection to exercise
the right to support breastfeeding as an essential
condition in the search for real equal opportunity for
women in the workplace, and an example of this is
our lactation rooms.
77%
of our
collaborators
in Mexico earned
a living income
DEVELOPMENT | TEAM ALSEA
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At Alsea, we have Zero
Tolerance for Corruption
and Bribery.
ETHICS, INTEGRITY
AND HUMAN RIGHTS
Our relationship with the communities
and all our stakeholders is carried out
in strict adherence to the integrity,
transparency and Human Rights
guidelines embodied in our Code of
Ethics.
In addition, at Alsea, we also have other instruments,
such as the Anti-Corruption Policy, the Conflicts of
Interest Policy, the Human Rights Policy and the Global
Donations and Volunteer Policy, which govern how we
collaborate and engage with stakeholders.
Learn more about our instruments to promote integrity
and ethics at https://www.alsea.net/integridad-
corporativa.
HUMAN RIGHTS
In 2022, we updated our Human Rights Policy to
guarantee a respectful work environment. The policy
establishes guidelines prohibiting child or forced labor
and discrimination and protects the right to freedom of
association and collective bargaining. In this reporting
period, we trained 4,843 collaborators on Human
Rights. These activities contribute to fulfilling the
ten principles of the United Nations Global Compact
adhered to by Alsea.
CORRECT LINE AT ALSEA
Alsea has the Correct Line to identify and follow up on
situations that could jeopardize the Company’s integrity
and our stakeholder relations. It is a mechanism created
to receive reports regarding violations of the Code of
Conduct and the Human Rights Policy. Following business
best practices, this mechanism is managed by a third
party to ensure its objectivity, reliability and confidentiality.
During 2022, the Correct Line received 983 reports
about the following offenses:
• Cohesion
• Abuse of trust
• Conflicts of interest
• Fraud and theft
• Harassment
• Discrimination
DEVELOPMENT | TEAM ALSEA
GRI 2-26, 406-1
IA
AR
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66
66
lineCORRECT
983
complaints
FROM COLLABORATORS
928
10
45
FROM VENDORS
FROM SUPPLIERS
100%
of cases addressed
Women
HARASSMENT COMPLAINTS
176 90
SEXUAL HARASSMENT COMPLAINTS 19 15
5 3
DISCRIMINATION COMPLAINTS
Men
86
4
2
REPORTING CHANNELS
Toll-free in Mexico
800 2677 3282
Website
http://www.tipsanonimos.com/Linea-correctaSIA
E-mail
alsealinea-correcta@tipsanonimos.com
Fax
+52 (55) 5255 1322
P.O. Box
Galaz, Yamazaki, Ruiz Urquiza,
S.C., A.P. (CON-080), 06401
Ciudad de México
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community
ENGAGEMENT
We are committed to our customers,
people, and community at Alsea. We
put our heart into everything we
do and give our best to contribute
to the sustainable development of
our communities by implementing
programs to fight food poverty and
create education and employability
opportunities.
DEVELOPMENT | COMMUNITY ENGAGEMENT
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Income
MXN
69,434,336
Alsea is known as a Company that is
socially committed to the environment
and the communities we serve.
We know the future is everyone’s
responsibility, so we work tirelessly to
build it through every idea and choice
we make. In this sense, we are investing
both human and material resources
in the sustainable development of
our communities, focused on several
issues we master that are crucial to us:
actions against hunger, education, and
employability.
We believe that our contribution must be significant
and produce a real impact on the world around us.
For this reason, we have designed a strategy focused
on concrete projects and actions addressing the most
relevant challenges in the communities we serve.
We are committed to generating positive and lasting
change in our society by working hand-in-hand with
our collaborators, customers, civil society organizations
and local authorities.
The Alsea Foundation’s mission is to deliver happiness to
vulnerable people and communities through sustainable
social investment projects promoting food security,
education and employability.
This year, the Alsea Foundation raised over MXN
70 million.
LINES OF
action
FOOD
COMMUNITY
DEVELOPMENT
71%
19.4%
EDUCATION
MXN 56,841,991
from the Alsea Foundation
7.3%
2.3%
Breakdown
Food
$40,349,535
71%
Community development
$11,011,030
19.4%
Education and employability
$4,152,391
7.3%
Other civil associations
$1,329,034
2.3%
EMPLOYABILITY
+80 TONS
of food
collected and
donated
GLOBALLY THROUGH SEVERAL
FOODBANK NETWORKS
193
NGOs
Supported
GLOBALLY
DEVELOPMENT | COMMUNITY ENGAGEMENT
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it’s on
me
THE IT’S ON ME MOVEMENT
The Alsea Foundation’s It’s on Me movement celebrates
ten years of contributing to eradicating food poverty
in Mexico.
The movement currently serves 19 children’s soup
kitchens managed by strategic partners, such as
Comedor Santa María A.C., Fondo para la Paz I.A.P.,
Save the Children, and Huellas de Pan A.C. Although
the project originated in Mexico, we are pleased to say
that other countries where we have a presence have
joined the effort, replicating the model locally.
In Colombia, for example, we have benefited the
following four institutions: Corporación Uno Más,
Hermanas Misioneras de Cristo Maestro, Fundación
Semilla y Fruto, and Fundación Créalo. We will continue
to dedicate our efforts to fighting food poverty and
making a significant difference in our communities.
1. Represents the number of meals served during the period from January 1,
2022 to December 31, 2022.
2. Represents the number of people provided with food assistance in the
period from January 1, 2022 to December 1, 2022.
1
TO VULNERABLE POPULATIONS
1,202,045
meals delivered
$40.3
million invested
$44.6
million raised
3.08 MILLION
2,366,693
people benefited
19
food
kitchens
supported
3,157*
218*
2,366*
2,359,697*
161
1,094*
2,366,693
22.8 MILLION
SPENT ON THE IT’S
ON ME CAMPAIGN
COMEDOR SANTA MARÍA
(EXPENSES) IN FOOD
FONDO PARA LA PAZ
SAVE THE CHILDREN
FROM OTHER ALLIES
HUELLAS DE PAN
MAIN PARTNERS
POR UN HOGAR
BENEFICIARIES
IN MEXICO
TOTAL
BAMX
2
MEALS
SERVED
847,555*
43,384*
26,221*
-
17,254*
267,631
1,202,045
15.7 MILLION
PRODUCT WITH
A CAUSE
3.1 MDP
DONATED BY
COLLABORATORS
*THE DATA WERE ASSURED BY AN INDEPENDENT THIRD PARTY. FOR FURTHER
INFORMATION, PLEASE REFER TO THE LIMITED ASSURENCE REPORT.
achievements
2022
DEVELOPMENT | COMMUNITY ENGAGEMENT
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In October, Pink Moves Us
Latin America
Barista School
Latin America
OUR BRANDS’
initiatives
Starbucks joined the activities organized
by Fundación Cáncer in Argentina and
Fundación Arturo López Pérez in Chile in
multiple media outlets to disseminate
awareness messages, participate in events
and provide internal training talks. It also
donated 1% of the sale of its Strawberry
Creme Frappuccino & Strawberry Acai
Refreshers using small actions to raise
awareness about the importance of
prevention and caring for your health.
Our Starbucks stores in
South America partnered with
Fundación Forge to train young
people interested in working as
baristas. We trained and provided
intern opportunities for low-income
youth, which allowed them to live the
Starbucks experience to motivate
them and contribute to their
professional development.
Sustainability Week
Latin America
Within the framework of
Sustainability Week, we
organized in-person and
digital events to listen
to our collaborators
share their “diverse and
inclusive experiences.”
In 2022, our brands engaged in
initiatives supporting social causes in
line with our objective of positively
impacting the communities we serve.
Domino’s collaborates
Europe
Domino’s Pizza maintained this
project for one more year to reinforce
its commitment to supporting the
community. This year and in collaboration
with local city halls, it provided leisure
time for families in vulnerable groups in
Madrid, Cuenca, and Andalusia, impacting
more than 350 people assisted by the
help provided by 60 brand volunteers.
+350 beneficiaries
+350
beneficiaries
International Coffee Day
Latin America
Openings with a Cause
Europe
We celebrated International
Coffee Day in all our
Starbucks stores in South
America with afternoon
meetings in which we shared
coffee tastings and took
the opportunity to provide
information to our customers
about sustainable practices,
ethical sourcing, and our
regional initiatives.
A social impact initiative that has become
one of our strategic projects. We aim to
establish stable relationships between
our businesses and the communities
where we open new stores. To do this,
on opening day, we select a local social
organization and one of its projects to
support it by donating all the proceeds
from our first day of sales. In 2022, our
brands in Spain, including VIPS, Gino’s
and Domino’s Pizza, raised more than
70,000 euros, impacting more than
17,000 beneficiaries.
DEVELOPMENT | COMMUNITY ENGAGEMENT
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ALSEA VOLUNTEERS
In 2022, our collaborators gradually resumed their
volunteer activities after two years of the COVID-19
pandemic and went back to contribute in person and
make a difference in their communities. We worked
with partner organizations to ensure all volunteers
felt comfortable and safe.
We are grateful to each volunteer who participated
this year and thank them for their dedication and
passion to make a difference in the world. In 2023,
we will continue to impact our local communities
positively.
Volunteer Hours
5,210
Mexico
4,229
Europe
1,580
South America
11,019
total hours
DEVELOPMENT | COMMUNITY ENGAGEMENT
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ALSEA AWARD 2022
This year we launched the Alsea Award, an initiative
promoting food and nutrition innovation. In this first
edition, we received 69 projects from academics and
research teams in Argentina, Colombia, Chile, Spain,
and Mexico.
The prize consists of a diploma and USD 150,000
to implement the project. Doctor Emilio Martínez de
Velazco Aguirre from Universidad Anáhuac Mayab won
the 2022 prize for developing a communication and
social change strategy to promote inclusive, sustainable,
nutritious diets. This initiative is carried out with the
support and experience provided by World Vision
Mexico.
69projects
5countries
DEVELOPMENT | COMMUNITY ENGAGEMENT
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EMPLOYABILITY AND
EDUCATION
Employability is another strategic backbone of our
social investment goals. Our initiatives aim to ensure
that young people have the skills to access quality jobs.
Integra
A program created to provide educational and
employability opportunities to talented young
people in vulnerable situations, benefitted
by Fundación Alsea, A.C., The Starbucks
Foundation and the Alsea brands. The program
donated MXN 5.6 million to support 6,514
vulnerable people facing barriers to education
and job opportunities.
USD 211,964
awarded
6,514
beneficiaries
John Langdon Down Foundation
The Alsea Foundation and P.F. Chang’s
donated MXN 558,240 to the John Langdon
Down Foundation to support young people
with Down syndrome and their families. The
amount was raised by selling the “Bento Box
for Children with a Cause” at P.F. Chang’s
restaurants. The funds will benefit 44 young
people enrolled in the Integra program
through the John Langdon Down Foundation
Gastronomy Workshop aimed at developing
and improving the skills of people with Down
syndrome to prepare meals, desserts and
beverages.
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BALANCE
GRI 3-3
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WE CHOSE
to boost
OUR BUSINESS STRATEGY WITH MORE
SUSTAINABLE PROCESSES RESPECTING THE
ENVIRONMENT. WE WANT TO BE A COMPANY
THAT REDUCES ITS NEGATIVE ENVIRONMENTAL
IMPACT, AND ALTHOUGH WE KNOW THAT
WE STILL HAVE A LONG WAY TO GO, WE
ARE CONVINCED THAT THE FUTURE IS OUR
RESPONSIBILITY, AND WHAT WE DO TODAY TO
PROTECT THE ENVIRONMENT WILL BEAR FRUIT
TOMORROW.
We emphasize:
Energy
AND EMISSIONS
CLIMATE
STRATEGY
Water
FOOD waste
Waste
management
AND CIRCULAR
PROCESSES
BALANCE | ENVIRONMENTAL CARE
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environmental
CARE
The future is our responsibility; we create it
with each idea and each choice, which is why
Alsea strives to create an operation based
on efficiency, innovation and environmental
awareness. We are familiar with our greatest
impacts and work to reduce them, always based
on a preventive approach. Our Environmental
Policy is aligned with the ISO 14001 standard
and emphasizes the efficient use of resources,
reduced emissions, and efficient waste
management.
BALANCE | ENVIRONMENTAL CARE
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SUSTAINABLE
RESOURCE
MANAGEMENT
SUSTAINABLE STORES
One of the most important projects to improve our
environmental impact is establishing a sustainable
standard for all Alsea restaurants. Our standard
comprises ten construction guidelines based on
international sustainable design and construction
criteria that provide a framework for healthy, cost-
saving and efficient buildings.
These standards will help reduce our emissions and
use resources more efficiently. During this period,
we began to implement these guidelines in two of our
restaurants in Mexico and South America. Our goal
for 2030 is to ensure that all new restaurants are built
under this approach; we will also make improvements
to existing restaurants.
In addition, in line with this strategy, our Starbucks
restaurants will adopt the Greener Store certification,
a sustainability framework for Starbucks stores and
a component of the brand’s global strategy to halve
its CO2 emissions by 2030. We currently have two
certified Green Stores and expect to extend this
program looking forward.
DESIGN AND
CONSTRUCTION
Guidelines
1.
LOCATION AND
TRANSPORTATION
Open our restaurants
in places accessible to
pedestrians and public
transportation users.
4.
ENERGY AND
ATMOSPHERE
Energy efficiency
systems, renewable
energy and LED
lighting.
2.
SUSTAINABLE SITES
Respect biodiversity and
the environment at the
selected sites.
3.
WATER EFFICIENCY
Low consumption systems.
5.
MATERIALS AND
RESOURCES
Use of
sustainable
materials.
6.
INDOOR
ENVIRONMENTAL
QUALITY
Non-toxic
materials.
7.
REGIONAL
PRIORITY
Local
sourcing.
8.
INNOVATION AND
DESIGN
Design based on best
practices and standards.
9.
ENVIRONMENTAL
AWARENESS EDUCATION
Promote sustainable
approaches among
stakeholders.
10.
INCLUSIVE STORES
Inclusive architectural
scopes for all users.
BALANCE | ENVIRONMENTAL CARE
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WATER
At Alsea, we strive to implement measures to ensure
correct and efficient water management. We focused
primarily on improving our consumption measurement
and water control models during this period. We are
currently working on establishing a standardized
quantification of water consumption by business unit
and creating reduction plans. Some of the initiatives
carried out by our European stores include installing
pressure-reducing and dual flush button valves, as
well as water-saving filters and water return circuits.
In addition, we expect to see increased savings and
improved water use efficiencies by implementing the
sustainable store standard. For example, our Starbucks
Greener Store in Mexico is designed to reduce water
use by 30% thanks to low-water aerators and faucets.
Water Consumption in Cubic Meters (m3)
2022
1,709,994
943,927
19,009
2020
1,700,000
862,270
12,292
Mexico
Europe
South America
2021
1,698,000
1,048,047
18,638
ENERGY EFFICIENCY
Electricity consumption is one of the main impacts
produced by our restaurants. Therefore, at Alsea, we
are working on implementing energy-saving projects,
particularly automated air conditioning and lighting
systems. For example, in line with our new standards
for sustainable stores, in 2022, we installed LED lighting
and light detectors and dimmers.
Electricity Consumption in kWh
Mexico
Europe
South America
2020
219,220,762
117,046,821
52,321,649
2021
238,369,880
131,581,791
40,429,000
2022
259,613,320
146,288,381
58,300,704
During this period, our restaurants in Chile implemented
an air conditioning energy-saving pilot by installing
a smart thermostat to switch the system off and on.
Operation in
Europe in 2022
-10%
water
consumption
We implemented
automated
air conditioning
and lighting projects
BALANCE | CIRCULAR APPROACH AND WASTE MANAGEMENT
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CIRCULAR
APPROACH AND
waste
management
We know that single-use packaging has
major implications for waste generation
and our carbon footprint. Therefore, we
are working to innovate by implementing
recycling and reuse approaches, using
better materials and raising awareness
among our customers.
In Europe,
100%of the paper used in our
Support Center is FSC-
certified.
In Colombia,
100%of our containers are
recyclable.
BALANCE | CIRCULAR APPROACH AND WASTE MANAGEMENT
306-2, 306-3, 306-4, 305-5
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PAPER USE AND
CONSUMPTION
We are raising awareness about using paper to reduce
our consumption, leading to lower waste generation
levels. In this period, we promoted a reduction in
printing through a warning system installed in our
printers to remind all collaborators of the reduction
approach adopted by Alsea. In addition, we increasingly
opt for digital communication options, such as our
Annual Report, which we have not printed since 2017.
SINGLE USE BOTTLES
AND ITEMS
In 2022, our Starbucks coffee shops in Mexico continued
to promote circular approaches among customers,
serving more than 980,000 drinks in reusable cups
motivated with incentives such as discounts on drinks
when customers bring their own cups.
Our European stores eliminated plastic straws and
have begun replacing single-use plastic containers with
alternatives made from more sustainable materials. For
example, the British Factory in Spain developed a new
compostable plastic container for one of their salads.
In addition, we are implementing European regulations
to transition to reusable dishes for consumption inside
our stores.
Also, during this period, we worked on enhancing our
management of packaging, bags and napkins and using
raw materials that produce a lower impact, such as
FSC-certified recycled paper.
WASTE MANAGEMENT
AND REDUCTION
We are working to implement comprehensive waste
management processes in all our restaurants by
establishing prevention and recycling measures.
During this period, we established waste sorting
stations throughout our Distribution Center building in
Europe. We also ran information campaigns on waste
management and removed individual trash cans to
encourage the use of recycling stations.
In addition, we began a waste segregation pilot project
in our Starbucks stores in Spain and Chile, which we
plan to extend to the rest of our brands. Also, during
this period, we began a coffee capsule pilot project in
Mexico that currently covers 37 stores.
Authorized managers with the corresponding
certificates remove used oil from all our brands’
establishments to ensure recycling and reuse. In
2022, authorized managers handled 1,714,665 liters
of oil used in Alsea operations.
Revalued or Recycled Inputs
Waste
Oil
Food
Revalued or
recycled
Revalued or
recycled
Revalued or
recycled
MEXICO
EUROPE
SOUTH
AMERICA
3,521,870 kg
-
366,478 kg
802,745 lt. 495,606 lt.
416,314 lt.
52,597kg
5,077kg
32,196kg
BALANCE | CIRCULAR APPROACH AND WASTE MANAGEMENT
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FOOD WASTE
According to the United Nations, one-third of the
world’s food rots in trash cans, representing close
to 6% of total global carbon emissions. At Alsea, we
acknowledge this challenge and work hard to reduce
food waste to meet our zero food waste goal within our
manufacturing processes by 2030. During this period,
we implemented a management system focused on
preventing and controlling surpluses to reduce and
mitigate food waste. For example, our restaurants and
cafeterias have information systems to adjust orders
through consumption estimates.
We also implement awareness actions and partner
with food banks to prevent waste in manufacturing and
distributing our products. During 2022, we kept 84,793
kg of food from landfills thanks to our collaboration
efforts with Food Banks.
DONATIONS TO
food banks
52,597KG
Mexico
5,077KG
Europe
32,196KG
South America
Our Waste Reduction Technologies
At Alsea, we believe technology must resolve
social and environmental challenges. In March
2021, we partnered with the Too Good To Go App
in 241 European restaurants. This app connects
customers with restaurants with food surpluses.
Through this collaboration, we used 17,630 food
packs and prevented the emission of 44 TCO2 eq.
Our Starbucks stores in Chile have also partnered
with Godmeal, an app that helps reduce food
waste and CO2 emissions. Thanks to this initiative
implemented in four stores, we prevented the
generation of 15,000 kg of CO2 emissions, which is
equal to taking six medium-sized cars off the road
per year.
BALANCE | CLIMATE STRATEGY
GRI 3-3
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CLIMATE
strategy
This year, we worked on developing plans and
initiatives aimed at addressing aspects related
to climate change. Our 2030 strategy establishes
relevant goals to reduce emissions, increase
energy efficiency and adopt clean energies. We
also completed our Carbon Disclosure Project
(CDP) Climate Change questionnaire, which
will help us closely measure and monitor the
impacts of Climate Change on our operations
and become more aware of the importance of
managing and mitigating its risks.
BALANCE | CLIMATE STRATEGY
GRI 302-1, 305-1
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EMISSIONS
Our 2030 goals include reducing our carbon emissions
by 25%. This major commitment compels us to
implement energy efficiency policies, programs and
initiatives, use renewable energies and transform our
process. For example, during this reporting period, our
Foster’s Hollywood establishments in Spain began
removing charcoal grills from some stores to replace
them with less polluting alternatives.
SUSTAINABLE MOBILITY
An important component of our operation is our Delivery
service, which represents 17.8% of our consolidated
sales. For this reason, we are committed to improving
our fleet’s efficiency to promote more sustainable
mobility. We have 498 electric motorcycles and bicycles,
representing 13% of our total fleet for our in-house
Delivery services in Spain and 83 electric bicycles in
22 stores in Mexico.
GHG emissions (Scope 1)
tCO2 eq
Mexico
Europe
South America
GHG emissions (Scope 2)
tCO2 eq
Mexico
Europe
South America
82,452
50,584
10,199
72,003
985
9,106
RENEWABLE ENERGY
An important goal we have set ourselves for 2030
is that 100% of the energy we use must come from
renewable sources. We began installing photovoltaic
panels in all our European manufacturing centers
during this reporting period. We expect to save 30%
in electricity consumption and increase our use of
renewable energies.
Clean Energy Consumption
Mexico
Europe
South America
72%
100%
30%
Spain
498
electric
motorcycles
and bicycles
13%
total of our
total fleet
BALANCE | CLIMATE STRATEGY
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Energy Savings
Mexico
Zero Waste Campaign
Mexico
ENVIRONMENTAL
awareness
During this period, our stores joined the campaign
promoted by the Mexico City government seeking
to reduce waste generation and single-use plastic
items. We aligned with this campaign by creating
a program centered on two key objectives: 1) Raise
awareness about the need to minimize plastic
consumption, and 2) Promote waste segregation
best practices among consumers and collaborators.
In the program’s first phase, we designed
communication materials for each store, including
posters, digital applications, and videos. In
the second phase, we developed the physical
communication kit installed in our stores. We invite
customers to promote and share waste reduction
stories. The campaign has been extended to 332 of
our stores in Mexico City.
Earth Day
South America
At Alsea, we want to influence our customers,
suppliers and collaborators positively. During this
reporting period and within the framework of Earth
Day, our stores in South America ran a campaign to
promote sustainable approaches such as the use
of bicycles and transport causing lower pollution
rates, the use of reusable cups and cups to avoid
waste generation, the adoption of alternative
vegetable diets, and reduced energy consumption.
To complement this initiative, we conducted a
reforestation activity with our team members,
planting 600 native trees in the Patagonian forests
in Argentina and south-central Chile.
Green Apron: Environmental training for
our collaborators
Global
During this period, nearly 200 team members
enrolled in the Greener Apron program taught
through the Starbucks Global Academy. The course
addresses our global environmental challenges,
provides examples of how different actors are
pioneering solutions and addresses Starbucks’
efforts to improve its environmental footprint.
200
team members
ENROLLED IN OUR
GREENER APRON
PROGRAM
We teach the energy course
to our store managers
to raise environmental
awareness and reinforce
our energy efficiency and
energy-saving strategies.
Environmental awareness
Europe
Our restaurants have also implemented
actions to raise environmental awareness,
including beach, forest and river cleanups
and reforestation activities. In addition,
during this period, we partnered with World
Vision and the WWF to work on initiatives to
raise awareness of water and energy use and
consumption.
Burger King
Argentina
Our restaurants in
Argentina ran the
“Real Whopper Beach”
campaign for the
second year in a row
to clean up coastal
beaches.
INDICATORS GRI
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Alsea has reported the information cited in this GRI Content Index for the period from January 1 to
December 31, 2022, with reference to the standards.
GRI 1: FOUNDATION 2021
STANDARD
TABLE OF CONTENTS
GENERAL CONTENT
2-1
2-2
2-3
2-4
2-5
2-6
2-7
2-8
2-9
2-10
2-11
2-12
2-13
2-14
2-15
2-16
2-17
2-18
2-19
2-20
2-21
2-22
2-23
2-24
2-25
2-26
2-27
2-28
2-29
2-30
Organizational details
Entities included in the organization’s sustainability reporting
Reporting period, frequency and contact point
Restatements of information
External assurance
Activities, value chain and other business relationships
Employees
Workers who are not employees
Governance structure and composition
Nomination and selection of the highest governance body
Chair of the highest governance body
Role of the highest governance body in overseeing the management of impacts
Delegation of responsibility for managing impacts
Role of the highest governance body in sustainability reporting
Conflicts of interest
Communication of critical concerns
Collective knowledge of the highest governance body
Evaluation of the performance of the highest governance body
Remuneration policies
Process to determine remuneration
Annual total compensation ratio
Statement on sustainable development strategy
Policy commitments
Embedding policy commitments
Processes to remediate negative impacts
Mechanisms for seeking advice and raising concerns
Compliance with laws and regulations
Membership associations
Approach to stakeholder engagement
Collective bargaining agreements
14
Alsea S.A.B de C.V.
12
12
12
15
99% of our employees have
a permanent contract
20
22
21
21
23, 24
23, 24
21
65
21
22
22
22
6, 7, 9. 19
7, 19
19, 25
65
65, 66
21 (missing sanctions)
26, 32
74% of our team members
have a collective agreement
LOCATION
STANDARD
TABLE OF CONTENTS
GRI 3: MATERIAL ISSUES 2021
3-1
3-2
3-3
Process to determine material topics
List of material topics
Management of material topics
SUSTAINABLE GROWTH
Supply
3-3
204-1
308-1
414-1
Management of material topics
Proportion of spending on local suppliers
New suppliers that were screened using environmental criteria
New suppliers that have passed selection filters according to social criteria
Digitalization
3-3
Management of material topics
418-1
Substantiated complaints concerning breaches of customer privacy and losses of
customer data
Management of material topics
Requirements for product and service information and labeling
Responsible Consumption
3-3
417-1
Ethics, Integrity and Human Rights
3-3
205-1
205-2
205-3
Manejo de temas materiales
Operations assessed for risks related to corruption
Communication and training about anti-corruption policies and procedures
Confirmed incidents of corruption and actions taken
LOCATION
26
27
26, 28
35, 36, 38
38
29, 40
29,4 0
50
50
44
44
65
65
65, 66
415-1
Political contributions
Alsea does not grant any
kind of financing to political
parties or institutions that
support them
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STANDARD
TABLE OF CONTENTS
environment
Materials
3-3
302-1
302-4
303-5
Emissions
3-3
305-1
305-2
305-3
Management of material topics
Energy consumption within the organization
Reduction of energy consumption
Reductions in energy requirements of products and services
Management of material topics
Direct (Scope 1) GHG emissions
Energy indirect (Scope 2) GHG emissions
Other indirect (Scope 3) GHG emissions
Waste Management and Circular
306-1
306-2
306-3
306-4
306-5
Waste generation and significant waste-related impacts
Management of significant waste-related impacts
Waste generated
Waste diverted from disposal
Waste directed to disposal
LOCATION
STANDARD
TABLE OF CONTENTS
LOCATION
75
78, 83
78
78
82
84
79
80
80
80, 81
80
TEAM MEMBERS AND COMMUNITIES
Labor Well-being
401-1
New employee hires and employee turnover
401-2
401-3
403-2
403-3
403-4
403-5
403-6
403-7
Benefits provided to full-time employees that are not provided to temporary or part-time
employees
Parental leave
Hazard identification, risk assessment, and incident investigation
Occupational health services
Worker participation, consultation, and communication on occupational health and safety
Worker training on occupational health and safety
Promotion of worker health
Prevention and mitigation of occupational health and safety impacts directly linked by
business relationships
Work-related injuries
403-9
Training and Formation
404-1
Average hours of training per year per employee
404-2
404-3
Programs for upgrading employee skills and transition assistance programs
Percentage of employees receiving regular performance and career development reviews
Diversity, Equity and Inclusion
405-1
406-1
Communities
Diversity of governance bodies and employees
Incidents of discrimination and corrective actions taken
53
64
59
59
58
58, 59
59
58
59
60
61
62
21, 57
66
413-1
Operations with local community engagement, impact assessments, and development
programs
67, 68, 69, 70
SASB INDEX
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SASB STANDARDS | RESTAURANTS
Code
Content
RESOURCE MANAGEMENT
Energy Management
FB-RN-130a.1
(1) Total energy consumed, (2) percentage grid electricity, (3)
percentage renewable
GJ
Water Management
FB-RN-140a.1
(1) Total water withdrawn, (2) total water consumed, percentage
of each in regions with High or Extremely High Baseline Water
Stress
Thousand cubic
meters (m³),
Percentage (%)
78,83
(1) 78
GESTIÓN DE RESIDUOS
Food & Packaging Waste Management
FB-RN-150a.1.
(1) Total amount of waste, (2) percentage food waste, and (3)
percentage diverted
Metric tons (t),
Percentage (%)
(3) 80,81
FB-RN-150a.2.
(1) Total weight of packaging, (2) percentage made from
recycled and/or renewable materials, and (3) percentage that is
recyclable, reusable, and/or compostable
Metric tons (t),
Percentage (%)
(3) 80
QUALITY AND SAFETY
Food Safety
FB-RN-250a.1.
(1) Percentage of restaurants inspected by a food safety
oversight body, (2) percentage receiving critical violations
FB-RN-250a.2.
(1) Number of recalls issued and (2) total amount of food
product recalled
FB-RN-250a.3.
Number of confirmed foodborne illness outbreaks, percentage
resulting in U.S. Centers for Disease Control and Prevention
(CDC) investigation
Percentage (%)
Number, Metric
tons (t)
Number,
Percentage (%)
Unit of measure
Response / page
Code
Content
Unit of measure
Response / page
RESPONSIBLE CONSUMPTION
Nutritional Content
FB-RN-260a.1.
(1) Percentage of meal options consistent with national dietary
guidelines and (2) revenue from these options
Percentage (%),
Reporting currency
FB-RN-260a.2.
(1) Percentage of children’s meal options consistent with national
dietary guidelines for children and (2) revenue from these
options
Percentage (%),
Reporting currency
FB-RN-260a.3
Number of advertising impressions made on children, percentage
promoting products that meet national dietary guidelines for
children
Percentage (%)
SUPPLY CHAIN
FB-RN-430a.1.
"Percentage of food purchased that (1) meets
environmental and social sourcing standards and (2) is certified
to third-party environmental and/or social standards"
Percentage (%) by
cost
(1) 29,40
FB-RN-430a.2.
Percentage of (1) eggs that originated from a cage-free
environment and (2) pork that was produced without the use of
gestation crates
Percentage
(%) by number,
Percentage (%) by
weight
FB-RN-430a.3.
Discussion of strategy to manage environmental and social risks
within the supply chain, including animal welfare
n/a
(1) 42
39
TEAM MEMBERS
FB-RN-310a.1.
(1) Voluntary and (2) involuntary turnover rate for restaurant
employees
Percentage (%)
(1) 63
FB-RN-310a.2.
(1) Average hourly wage, by region and (2) percentage of
restaurant employees earning minimum wage, by region
Reporting currency,
Percentage (%)
(2) 64
FB-RN-310a.3.
Total amount of monetary losses as a result of legal proceedings
associated with (1) labor law violations and (2) employment
discrimination
Reporting currency,
Percentage (%)
FB-RN-000.A
Number of employees at (1) company-owned and (2) franchise
locations
Number
(1) 54
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PRINCIPLES OF THE UN GLOBAL
COMPACT
Principle 1:
Businesses should support and respect the protection of internationally proclaimed human rights
Principle 2:
Businesses should make sure that they are not complicit in human rights abuses
Principle 3:
Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining
Principle 4:
Businesses should uphold the elimination of all forms of forced and compulsory labour
Principle 5:
Businesses should uphold the effective abolition of child labour
Principle 6:
Businesses should uphold the elimination of discrimination in respect of employment and occupation.
Principle 7:
Businesses should support a precautionary approach to environmental challenges
Principle 8:
Businesses should undertake initiatives to promote greater environmental responsibility
Principle 9:
Businesses should encourage the development and diffusion of environmentally friendly technologies
Principle 10:
Businesses should work against corruption in all its forms, including extortion and bribery
Page 29,40
Page 65, 66
Page 85
Page 65
Page 65
Page 55,56,57
Page 29,40, 76
Page 29,40, 76
Page 77, 78, 81, 83
Page 65, 66
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ALSEA, S.A.B de C.V.
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020, AND
INDEPENDENT AUDITORS’ REPORT DATED APRIL 26, 2023
Annual Corporate Practices Committee ReportAudit Committee's Annual ReportIndependent Auditors' ReportConsolidated Statements of Financial Position Consolidated Statements of Comprehensive Income Consolidated Statements of Other Comprehensive IncomeConsolidated Statements of Changes in Stockholders’ EquityConsolidated Statements of Cash FlowsNotes to the Consolidated Financial StatementsAlsea, S.A.B. de C.V.April 26, 20239091949899100101102103 AR
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ANNUAL CORPORATE PRACTICES
COMMITTEE REPORT
TO THE BOARD OF DIRECTORS OF ALSEA, S.A.B. DE C.V.:
Mexico City on February 28, 2023.
In compliance with Article 42 and 43 of the Mexican Securities Market Law, and on behalf of the
Corporate Practices Committee, I hereby submit to you my report on the main activities we carried
out during the year that ended on December 31, 2022. In the development of our work, we have taken
into account the recommendations contained in the CCE Code of Corporate Governance Principles
and Best Practices.
In order to analyze the Company's relevant results, the Committee held meetings to ensure adequate
monitoring of the resolutions adopted in the exercise of its duties, inviting the Company's officers as
deemed appropriate.
To fulfill the responsibilities of this Committee, we carried out the following activities:
1. During this period we did not receive any request for a waiver in accordance with article 28,
section III, paragraph f) of the Securities Market Law, so it was not necessary to make any
recommendation in this regard.
2. The quarterly and cumulative results of the 2022 Bursatility Plan were presented.
3. We were presented with the Shareholder Cost restatement applicable at the end of each quarter
of 2022, using the methodology authorized by the Board of Directors.
4. We received a quarterly summary of the risk management operations through "Exchange rate
forwards" (peso-dollar) that were carried out during the year. These transactions have been
made in accordance with the authorized terms, i.e., in compliance with the objective of hedging
the foreign exchange risk of the transaction based on the authorized budget.
5. We reviewed, with Management, the bank financing strategy, the corresponding long-term credit
coverage, as well as compliance with the Covenants.
6. We were presented with the 2022 Budget draft, for which we requested several modifications
to be presented to the Board.
7. During the period covered by this report, the transactions made by the issuer with related parties
and their characteristics were analyzed by the Audit Committee, which in its report makes the
appropriate statement, without any significant transactions to be highlighted.
8. We were presented with and approved the share Repurchase Fund strategy.
9. The ESG (Environmental, Social and Governance) criteria plan for 2022 was presented.
10. We supervised the Compensation plan for the relevant executives referred to in article 28,
section III, paragraph d) of the Securities Market Law, which we recommended for submission
to the Board for approval.
11. We were informed of the Succession and Talent Development Plans of the main executives.
12. The results of the 2022 Performance Evaluation of relevant executives were presented to us,
with which this committee verified the mechanism implemented by the Company to identify the
performance of such executives, and we have no observations in this regard.
13. The Corporate Human Resources Management presented the 2022 Compensation Strategy
for the executive levels. This Committee recommended to the Board of Directors the approval
of this strategy.
14. The General Management informed us about the adjustments to be made to the company's
organizational structure.
15. At each and every meeting of the Board of Directors, a report on the activities of the Corporate
Practices Committee was submitted for consideration of said collegiate body, recommending
to the Board its ratification and/or approval, as the case may be.
Finally, I would like to mention that, as part of the activities we carried out, including the preparation
of this report, we have always listened to and taken into account the point of view of the relevant
managers and directors, without there being a difference of opinion to highlight.
Corporate Practices Committee
León Kraig Eskenazi
Chairman
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AUDIT COMMITTEE'S
ANNUAL REPORT
FOR THE BOARD OF DIRECTORS OF ALSEA, S.A.B. DE C.V.:
Mexico City on February 28, 2023.
In compliance with the provisions of Articles 42 and 43 of the Securities Market Law and the Audit
Committee's Regulations, I hereby inform you of the activities we carried out during the year that ended
on December 31, 2022. In the development of our work, we have kept in mind the recommendations
established in the Code of Best Corporate Governance Practices, and in accordance with a work
program prepared based on the Committee's Regulations, we meet at least once every quarter to
carry out the activities described below:
I. RISK ASSESSMENT
We reviewed, with Management and the External and Internal Auditors, the critical risk factors
that may affect the Company's operations, determining that they have been appropriately identified
and managed.
II. INTERNAL CONTROL
We ensured that management, in compliance with its internal control responsibilities, has
established appropriate processes and policies. In addition, we monitored the comments and
observations made by the External and Internal Auditors in the performance of their work.
III. EXTERNAL AUDIT
We recommended, to the Board of Directors, the engagement of the external auditors of the
Group and subsidiaries for tax year 2022. To this end, we ensured their independence and
compliance with the requirements established by law. We analysed, with them, their approach
and work program.
We maintained constant and direct communication with them in order to know the progress
of their work, any observations they had and to take note of the comments on their review of
the annual financial statements. We were informed in a timely manner of their conclusions and
reports on the annual financial statements, including the communication referred to in article 35
of the General Provisions applicable to entities and issuers supervised by the National Banking
and Securities Commission that contract external auditing services for basic financial statements
("Single Circular of External Auditors") and we monitored the implementation of the observations
and recommendations they developed in the course of their work. We reviewed the reports
issued by the External Auditors referred to in the Single Circular of External Auditors.
We authorized the fees paid to the external auditors for audit services and other permitted
additional or complementary services, ensuring that they did not interfere with their independence
from the company. Taking into account the Management's views, we conducted the evaluation
of the services for the previous year, and began the evaluation process for tax year 2022.
IV. INTERNAL AUDIT
In order to maintain its independence and objectivity, the Internal Audit area reports functionally
to the Audit Committee.
In a timely manner, we reviewed and approved its annual program of activities. To prepare it,
Internal Audit participated in the risk identification process, the establishment of controls and
their verification.
We received quarterly reports on the progress of the approved work program, any variations
it may have had, as well as the causes that originated them.
We followed up on the observations and suggestions they developed and monitored their timely
implementation.
We received and analyzed the annual report on transactions with related parties, in order to
verify that they were carried out in accordance with existing policies and at market values. For
such purposes, opinions were requested and the corresponding evaluations were made.
In accordance with Best Corporate Practices, we asked a third party to evaluate the internal
audit function. During 2022 and 2023, the recommendations of the respective report will be
implemented.
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V. FINANCIAL INFORMATION, ACCOUNTING POLICIES AND REPORTS TO THIRD PARTIES.
We reviewed, with the responsible persons, the process of preparation of the Company's
quarterly and annual financial statements and recommended their approval and authorization
to the Board of Directors for publication. As part of this process, we took into account the
opinion and observations of the external auditors and made sure that the criteria, accounting
and information policies used by Management to prepare the financial information are adequate
and sufficient and have been applied consistently with the previous tax year. Accordingly, the
information presented by Management fairly reflects the financial position, results of operations,
cash flows and changes in financial position of the Company for the year that ended on December
31, 2022.
a) In 2014, the Secretary of Finance of Mexico City determined for the company Italcafé S.A.
de C.V. (Italcafe), in relation to 2010, taxable income in respect of deposits made to its bank
accounts derived from the operation of several restaurants owned by Grupo Amigos de San
Ángel, S.A. de C.V. (GASA), notwithstanding the fact that such income was accrued by the
latter company, giving it all the corresponding tax effects. On November 28, 2018, the Tax
Attorney General's Office of Mexico City, issued a partial favorable resolution of the Revocation
Resource against the determination issued by the Secretariat of Finance and requested for
the supervening evidence provided to be considered and a new resolution to be issued. In
January 2019, the Company filed the corresponding means of defense against the resolution
issued by the Tax Attorney General's Office of Mexico City. The case is in process.
We also reviewed the quarterly reports prepared by Management for presentation to shareholders
and the general public, verifying that they were prepared under International Financial Reporting
Standards (IFRS) and using the same accounting criteria used to prepare the annual information.
We were able to verify that there is a comprehensive process in place to provide reasonable
assurance of their contents. In conclusion, we recommended the Board to authorize their
publication.
We confirmed, together with the External Auditor and Management, that the migration of the
ERP platform to the "Cloud" environment was carried out properly, maintaining the integrity of
the records and the controls that guarantee the validity of the resulting financial information.
b) In March 2016, the Tax Administration Service (SAT) initiated domiciliary visits to Grupo
Amigos de San Ángel, S.A. de C.V. (GASA), and Italcafe S.A. de C.V. (Italcafe), for tax years
2010 and 2011, respectively; in November the last partial reports were issued in which
observations were determined, derived from unidentified deposits according to the criteria
of the Authorities. In December 2017, additional information was submitted in order to clarify
and refute these observations. In addition, a request for a Conclusive Agreement was filed
with the Attorney General's Office for Taxpayer's Protection (PRODECON). The instances in
PRODECON were resolved in January 2019, without reaching a consensus with the SAT, so
finally the companies filed the means of defense at the court in the month of August 2019
for GASA and in November in the case of ITALCAFE. The case is in process.
Likewise, we have observed the evolution of the business and the gradual return of consumption,
which has strengthened the performance of the entity and, together with the auditor, we
confirmed the reduction of risks on ongoing business, the early termination of debt settlements
and the increase in the impairment of fixed asset investments held by the group.
c) In September 2017, the SAT initiated a review process to Operadora Alsea de Restaurantes
Mexicanos S.A., de C.V., (OARM) with respect to tax year 2014. The foregoing derived from
the sequential review that began with the public accountant who audited the acquisition of
the VIPS business for tax purposes.
VI. COMPLIANCE WITH REGULATIONS, LEGAL ASPECTS AND CONTINGENCIES
We confirmed the existence and reliability of the controls established by the company to ensure
compliance with the various legal provisions to which it is subject, making sure that they were
adequately disclosed in the financial information.
We periodically reviewed the various tax, legal and labor contingencies existing in the company;
we monitored the effectiveness of the procedure established for their identification and follow-up,
as well as their adequate disclosure and recording. The following tax issues were highlighted,
some of which were initiated and reported since 2014 and were monitored on in a timely
manner during this tax year:
During tax year 2018, various information was filed, requested by the tax authorities, who then
issued an official notice of Observations for OARM considering some objections regarding
the acquisition of the VIPS business. In October 2018, additional information was filed with
the tax authorities, as well as a request for a conclusive agreement with PRODECON. On
July 30, 2019, PRODECON terminated the conclusive agreement procedure as there was
no consensus with the SAT. As a result, in February 2021, the SAT issued an official notice
for the tax credit payment of $99.9 million pesos. On March 23, 2021, the Company filed an
appeal for Revocation of the tax assessment of the tax authorities.
On June 14, 2022, OARM filed a claim for annulment of an exclusive substantive resolution
before the Federal Court of Administrative Justice against the resolution issued on April
27, 2022 by the Large Taxpayer Litigation Administration "1", through which the appeal for
revocation filed by OARM was resolved in order to confirm the diverse resolution issued
by the Central Administration for tax control of business Groups. The case is currently in
process.
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d) In the case of Alsea, S.A.B. de C.V. (ALSEA), the SAT initiated, in December 2017, a review
process and, in December 2018, issued an official notice of observations in which it considers
some objections regarding the acquisition of the VIPS brand. For such purpose, it submitted
additional information to refute the objections made, as well as a request for a conclusive
agreement before PRODECON. On July 30, 2019, PRODECON terminated the conclusive
agreement procedure as there was no consensus with the SAT. As a result, in February
2021, the SAT issued an official notice for the tax credit payment of $3,781 million pesos. On
March 23, 2021, the Company filed an appeal for Revocation of the tax assessment of the
tax authorities.
In 2022, ALSEA filed a claim for annulment of an exclusive substantive resolution before the
Federal Court of Administrative Justice against the resolution issued on April 27, 2022 by
the Large Taxpayer Litigation Administration "1", through which the appeal for revocation
filed by ALSEA was resolved in order to confirm the diverse resolution issued by the Central
Administration for tax control of business Groups. The case is currently in process.
VII. CODE OF CONDUCT
With the support of Internal Audit, we ensured that our personnel comply with the Company's
Code of Business Conduct, that there are adequate processes for its updating and dissemination
to personnel, as well as the application of the corresponding sanctions in cases of detected
violations.
We reviewed the complaints received in the system established by the Company for this purpose,
monitoring their correct and timely attention.
VIII. ADMINISTRATIVE ASPECTS
We held regular meetings with Management to keep us informed of the Company's progress,
activities and relevant and unusual events. We also met with the external and internal auditors
to discuss the development of their work, any limitations they may have had and to facilitate
any private communication they wished to have with the Committee.
In those cases where we deemed it appropriate, we requested the support and opinion of
independent experts. Likewise, we were not aware of any significant non-compliance with
operating policies, internal control systems and accounting policies.
We held executive meetings with the exclusive participation of the members of the Committee,
during which agreements and recommendations for Management were established.
The Chairman of the Audit Committee reported quarterly to the Board of Directors on the
activities carried out.
The work we carried out was duly documented in the minutes prepared for each meeting,
which were reviewed and approved in a timely manner by the members of the Committee.
Sincerely
P. A. Alfredo Sanchez Torrado
Chairman of the Audit Committee
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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, 2022, 2021 and 2020, 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 the Entity as of December 31, 2022, 2021 and 2020, 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.
OTHER MATTER
The accompanying financial statements have been translated into English for the convenience of readers.
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 4p to the consolidated financial statements, the Entity has recorded an amount
of $140,703, $184,430 and $220,000 (thousands of Mexican pesos) for impairment as of December
31, 2022, 2021 and 2020, respectively.
SYSTEM MIGRATION
The Entity migrated the Mexico operation from its Oracle EBS system to Oracle Fusion. This migration
required a process of preparation, implementation, testing and control of key figures to ensure that
balances and transactions have been fully transferred from one system to another.
Our procedures consisted of: i) involvement of our Technology specialists who reviewed the general
controls of the computer, ii) the specialist team also reviewed the segregation of duties and user
profiles, iii) we checked that the balances migrated from the Oracle EBS system to Oracle Fusion
have been fully loaded.
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The results to procedures performed were reasonable.
INFORMATION OTHER THAN THE CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT
AUDITORS’ REPORT
The Entity’s management is responsible for the other information presented. The other information
encompasses: the information included in: numeral i) of the Annual Report; ii) the information that will
be included in the Annual Report which the Entity must prepare according to the article 33, section I,
numeral b) of Title Fourth, Chapter First of the General Provisions Applicable to Issuers and other Stock
Market Participants in Mexico, and the Guidelines accompanying these provisions (the “Provisions”).
The Annual Reports are expected to be available to our reading after the date of this audit report;
and iii) additional other information, which is not actually required by IFRS, but has been included to
provide an additional explanation to the Entity’s investors and the main readers of its consolidated
financial statements to enable them to evaluate the performance of each operating segment and other
indicators associated with the Entity’s ability to satisfy its obligations as regards Earnings before Interest,
Taxes, Depreciation and Amortization (adjusted “EBITDA”); this information is presented in Note 31.
Our opinion on the consolidated financial statements will not be extended to the other information
and we do not express any opinion on this regard.
In relation to our audit of the consolidated financial statements, our responsibility will be to read
the other information when it becomes available and, when doing so, consider whether the other
information contained therein is materially inconsistent with the consolidated financial statements, the
knowledge we obtained during the audit or whether it appears to contain material misstatement. If,
based on our work performed, we conclude that the other information contains material misstatement,
we would have to report this situation. When reading the Annual Report, we will issue a declaration
on this regard, as required by Article 33 Section I, paragraph b) numeral 1.2. of the Provisions. In
addition, with regards to our audit of the consolidated financial statements, our responsibility is to
read and recalculate the other information which, in this case, is not required by IFRS and, when
doing so, consider whether the other information contained therein is materially inconsistent with the
consolidated financial statements, the knowledge we obtained during our audit or whether it appears to
contain material misstatement. If, based on the work performed, we conclude that the other information
contains material misstatement, we would have to report this situation in our declaration related to
the Annual Report required by the National Banking and Securities Commission, and those charged
with governance of the Entity. As of the date of this report, we have nothing to report in this regard.
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.
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- 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.
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.
- 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.
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
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.
C. P. C. Carlos Alberto Torres Villagómez
Mexico City, Mexico
April 26, 2023
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ALSEA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
At December 31, 2022, 2021 and 2020
(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
Put option on non-controlling interest
Carrot River Holding, S. A. R. L.
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
2022
2021
2020
5
6
7
8
14
11
9
12
19
$
6,086,817 $
1,247,211
442,152
578,533
2,895,326
14,188
870,514
12,134,741
6,893,433 $
1,070,153
355,293
448,110
2,009,258
-
641,421
11,417,668
3,932,409
890,484
1,274,055
487,524
1,617,570
-
328,034
8,530,076
670,190
877,016
1,789,833
180,816
-
-
207,810
233,264
242,767
156,903
131,867
90,110
15,369,639
15,277,931
15,879,778
20,435,725
22,274,256
23,423,275
26,664,038
27,796,564
28,816,687
2,637,415
66,322,536
4,968,996
71,559,894
4,665,412
74,907,862
$
78,457,277 $
82,977,562 $
83,437,938
See accompanying notes to the consolidated financial statements.
LIABILITIES AND STOCKHOLDERS’ EQUITY
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 direct employee benefits
Option to sell the non-controlling interest
NOTES
2022
2021
2020
$
17
10
18
1,277,638 $
4,103,865
-
4,252,803
1,375,794
4,861,118
5,667,413
-
1,638,000 $
4,415,950
1,000,000
2,971,439
1,007,798
4,446,604
3,854,182
-
24,233,053
4,207,633
7,979,149
2,949,829
654,115
2,834,150
3,658,063
2,701,407
Total current liabilities
21,538,631
19,333,973
49,217,399
LONG-TERM LIABILITIES:
Long-term debt, not including current maturities
Obligation under finance leases
Debt instruments
Option to sell the non-controlling interest
Other liabilities
Derivative financial instruments
Deferred income taxes
Employee benefits
Total long-term liabilities
Total liabilities
STOCKHOLDERS’ EQUITY:
Capital stock
Share premium issuance
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
16
10
17
18
19
21
22
19 and 24
23
3,762,760
17,720,573
22,748,440
1,123,439
897,384
691,056
826,746
318,586
48,088,984
69,627,615
478,749
8,675,410
312,115
272,330
(808,098)
(1,051,855)
7,878,651
951,011
8,829,662
12,012,739
19,347,324
17,078,340
1,272,474
894,135
305,968
3,710,272
348,250
54,969,502
74,303,475
478,749
8,676,827
(1,054,274)
660,000
(808,098)
(314,040)
7,639,164
1,034,923
8,674,087
-
21,092,417
-
-
265,050
621,117
4,364,054
244,056
26,586,694
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
Total liabilities and stockholders’ equity
$
78,457,277 $
82,977,562 $
83,437,938
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ALSEA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
For the years ended December 31, 2022, 2021 and 2020
(FIGURES IN THOUSANDS OF MEXICAN PESOS)
NOTES
2022
2021
2020
NOTES
Consolidated net income (loss)
Items that may be reclassified subsequently to income:
Valuation of derivative financial instruments, net of income
taxes
Remeasurement of defined benefit obligation, net of income
taxes
Inflation effect, net of income taxes
Cumulative translation adjustment, net of income taxes
Total comprehensive income (loss), net of income taxes
Comprehensive income (loss) for the year attributable to:
Controlling interest
Non-controlling interest
38,495,420
11,454,884
1,034,682
8,435,190
12,003,552
1,951,278
1,398,352
1,124,108
843,613
521,046
756,147
490,077
(1,517,509)
(118,987)
3,225,511
456,548
11,318
3,574,390
Continuing operations
Net sales
Cost of sales
Cost of distribution
Depreciation and amortization
Employee benefits
Services
Advertising
Royalties
Repair and maintenance
Supplies
Distribution
Other operating expenses
Operating income (loss)
Comprehensive financing result:
Interest income
Interest expenses
Changes in the fair value of financial instruments
Exchange loss (gain), net
Equity in results of associated companies
Income (loss) before income taxes
Income tax (benefit)
Consolidated net income (loss) from continuing operations
Net income (loss) for the year attributable to:
Controlling interest
Non-controlling interest
Earnings per share:
Basic and diluted net earnings per share from continuing
operations (cents per share)
See accompanying notes to the consolidated financial statements.
9, 11 and
12
27
19
14
20
24
$
25
26
68,831,305 $
20,960,639
1,551,410
53,379,469 $
15,591,274
1,161,787
8,178,329
13,759,593
2,414,136
1,719,398
1,685,022
1,090,474
109,363
1,037,100
2,500,054
4,132,939
(141,707)
3,508,158
(120,340)
(110,747)
3,135,364
7,701,750
17,203,057
2,958,683
1,970,376
2,356,674
1,368,225
226,594
1,317,365
4,848,251
6,368,281
(362,643)
3,940,429
225,534
11,152
3,814,472
(223)
2,553,586
1,840
999,415
(2,647)
(5,094,546)
905,857
214,946
(1,199,088)
1,647,729 $
784,469 $
(3,895,458)
1,706,389
835,129
(3,235,574)
(58,660) $
(50,660) $
(659,884)
2.03 $
1.00 $
(3.86)
$
$
$
2022
1,647,729 $
2021
784,469 $
2020
(3,895,458)
74,942
(16,715)
(48,593)
(747,449)
(737,815)
909,914 $
41,560
3,044
620,457
(164,425)
500,636
1,285,105 $
(202,333)
21,894
263,736
(131,277)
(47,980)
(3,943,438)
968,574 $
1,335,765 $
(3,283,554)
(58,660) $
(50,660) $
(659,884)
$
$
$
$
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ALSEA, S.A.B. DE C.V. AND SUBSIDIARIES
ECONSOLIDATED STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY
For the years ended December 31, 2022, 2021 and 2020
(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
stockholders’
equity
Balances at January 1, 2020
$
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 23a)
Other movements (Note 24)
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
Other movements (Note 24)
Comprehensive income
-
-
-
-
-
-
1,205,703
-
-
-
(1,205,703)
-
-
-
835,129
620,457
41,560
(164,425)
-
3,044
-
1,335,765
(244,863)
(50,660)
(244,863)
1,285,105
Balances at December 31, 2021
478,749
8,676,827
660,000
(808,098)
100,736
(1,155,010)
1,743,091
(210,744)
(1,785,217)
(61,170)
7,639,164
1,034,923
8,674,087
Repurchase of shares (Note 23a)
Increase in repurchase fund (Note 24)
Other movements
Comprehensive utility
-
-
-
-
(1,417)
-
-
-
(727,670)
340,000
-
-
-
-
-
-
-
-
-
-
-
(340,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
(729,087)
-
-
1,706,389
(48,593)
74,942
(747,449)
(16,715)
968,574
-
-
(25,252)
(58,660)
(729,087)
-
(25,252)
909,914
Balances at December 31, 2022
$
478,749 $
8,675,410 $
272,330 $
(808,098) $
100,736 $
211,379 $
1,694,498 $
(135,802) $
(2,532,666) $
(77,885) $
7,878,651 $
951,011 $
8,829,662
See accompanying notes to the consolidated financial statements.
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ALSEA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the years ended December 31, 2022, 2021 and 2020
(FIGURES IN THOUSANDS OF MEXICAN PESOS)
NOTES
2022
2021
2020
NOTES
2022
2021
2020
Cash flows from operating activities:
Consolidated net income (loss)
Adjustment for:
Income taxes (benefit)
Equity in results of associated companies
Interest expense
Interest income
Disposal of store equipment, leasehold improvements and
property
Impairment goodwill
Loss (gain) on sale of fixed assets
Changes in the fair value of financial instruments
Depreciation and amortization
12
9,11 and 12
Changes in working capital:
Customers
Other accounts receivable
Related parties
Inventories
Advance payments
Suppliers
Factoring of suppliers
Accrued expenses and employee benefits
Income taxes paid
Other liabilities
Employee benefits
Net cash flows provided by operating activities
$
1,647,729 $
784,469 $
(3,895,458)
905,857
223
3,940,429
(362,643)
76,071
140,703
-
225,534
7,583,840
14,157,743
(348,352)
(141,028)
(14,187)
(1,043,572)
(135,486)
1,933,190
367,996
2,438,556
(1,735,963)
(465,469)
(53,543)
14,959,885
214,946
(1,840)
3,508,158
(141,707)
(111,713)
184,430
70,986
(120,340)
8,178,329
12,565,718
(252,500)
36,665
-
(461,157)
576,613
265,064
353,683
1,131,299
(101,859)
434,048
108,543
14,656,117
(1,199,088)
2,647
3,225,511
(118,987)
324,877
220,000
(178,774)
456,548
8,212,474
7,049,750
(125,582)
(47,972)
-
162,076
(1,074,132)
622,781
(234,931)
1,251,019
(546,667)
(326,440)
61,536
6,791,438
Cash flows from investing activities:
Proceeds from equipment and property
Interest collected
Store equipment, leasehold improvements and property
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
Cash received non-controlling stake
Payments for financial leasing
Sales of shares
Net cash flows used in financing activities
11
19
18
-
362,643
(4,373,122)
(25,259)
-
(4,035,738)
209,287
(8,216,547)
6,854,473
(1,000,000)
(2,991,894)
(25,252)
(5,320,062)
(729,087)
(11,219,082)
142,796
141,707
(2,881,888)
(39,917)
(1,113,251)
(3,750,553)
179,210
(10,161,796)
10,257,850
-
(2,457,826)
(244,863)
(5,738,455)
-
(8,165,880)
231,320
118,987
(2,182,158)
(7,286)
-
(1,839,137)
10,045,269
(4,703,310)
-
-
(3,225,511)
28,767
(4,186,643)
5,954
(2,035,474)
Net (decrease) increase in cash and cash
equivalents
(294,935)
2,739,684
2,916,827
Exchange effects on value of cash
(511,681)
221,340
(1,553,189)
Cash and cash equivalents:
At the beginning of the year
6,893,433
3,932,409
2,568,771
At the end of year
$
6,086,817 $
6,893,433 $
3,932,409
See accompanying notes to the consolidated financial statements.
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ALSEA, S.A.B. DE C.V. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the years ended December 31, 2022, 2021 and 2020
(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, reference made to dollars is for US dollars
and reference made to euros is for of the European Union.
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 La Finca. 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, Archie’s and until December 2021 P.F.
Chang’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, Starbucks, Ginos, Fridays, Ole
Mole and until mid-2020 Wagamama and Cañas y Tapas, and from January and February 2020,
Alsea operates the Starbucks brand in France, Netherlands, Belgium and Luxembourg.
SIGNIFICANT EVENTS
a. Alsea announces the execution of the early redemption of the "ALSEA 17" stock certificate
- The entity informed the investing public about the execution of the early repayment of the
"Alsea 17" issue made on March 16, 2022, as follows:
1. The amount of interest accrued for the 28-day period between February 16, 2022 and March
16, 2022, at the annual gross interest rate of 7.13% amounting to $5,545 million pesos.
2. The amount of the Early Repayment for an amount of $ 1,000,000 million, which was
calculated in accordance with what is established in the "Early Repayment" section of the
Title of the ALSEA 17 issue.
b. Alsea announces the successful pricing of senior bonds with maturity in 2026 for the amount
of US$ 500 million on international markets – On December 14, 2021, the placement of senior
bonds was concluded for the amount of US$ 500 million, with an annual interest rate of 7.75%
payable semi-annually and with the option of partial or full settlement from December 14, 2023.
c. Alsea increased its equity in Alsea Europa, incorporating Bain Capital Credit as an investor
- In October 2021, the Entity, jointly with Alia Capital Partners and Bain Capital Credit agreed to
acquire the 21.1% of the noncontrolling interest of Food Service Project, S.A. (Alsea Europa).
As a result of this investment, Alsea holds the 76.8% of the Equity of Alsea Europa (formerly
66.2%), while Alia Capital Partners and Bain Capital Credit will indirectly hold equity of 10.6%,
and the remaining minority shareholders represent 12.7%. The Entity paid 55 million euros (equal
to $1,205,703). Similarly, reimbursements of $92.4 million pesos were also obtained. Based on
this agreement, the Entity renegotiated its PUT - CALL options in the following manner:
a) Deadline of December 31, 2026.
b) The Entity has an enforceable and optional “Call Option” as of the third year.
c) Half-yearly payment of a coupon with annual interest payable annually at the 4.6% rate on
principal of €55 million until the date on which the “Put Option” is exercised
d) The Entity has the possibility of settling the obligation through the exchange of shares or
cash.
d. Development of the Domino’s Pizza brand in Uruguay - In December 2021, Alsea executed a
contract for a 10-year period (with a conditional renewal right) with Domino’s Pizza International
Franchising Inc. to exclusively operate and develop the Domino’s Pizza brand in Uruguay. This
agreement represents the expansion of Alsea to a new South American market with this brand,
together with the plan of opening at least 24 units within the next 10 years.
e. Closure of stores pertaining to the PF Chang’s brand in Colombia - In December 2021, Alsea
ceased to exclusively operate and develop establishments under the PF Chang’s brand in
Colombia.
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f. Related implications with COVID-19 - During 2022, the Entity had no impacts related to Covid-19,
the operation of the business had results higher than in the years prior to the pandemic.
g. Alsea receives liquidation letter - On February 14, 2020, Alsea informs that the Tax Administration
Service (SAT by its acronym in Spanish) carried out a review of the tax aspects related to the
purchase 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 letter in which Alsea is claimed to pay taxes
for alleged income in the acquisition of Vips, for an amount of $3,881 millions. This amount
includes inflation, surcharges and penalty as of the date of notification. Since March 23, 2020,
Alsea filed an Administrative Appeal with the tax authorities which is under review as of the
date of issuance of these consolidated financial statements.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL
REPORTING STANDARDS
Annual Improvements
to IFRS 2018-2021
a. Application of new and revised International Financing Reporting Standards (“IFRSs” or
“IAS”) and interpretations that are mandatorily effective for the current year
In the year, the Entity has applied amendments to IFRS issued by the International Financial
Reporting Standards Board (IASB) that are mandatory for accounting periods beginning on
or after January 1, 2022. Its adoption has not had a material impact on the disclosures or the
amounts reported in these financial statements.
Amendments to IAS 16 - Property,
Plant and Equipment - Revenue
before intended use
The Group has adopted the amendments to IAS 16 Property,
Plant and Equipment for the first time in the current year. The
amendments prohibit deducting from the cost of an item of
property, plant and equipment any proceeds from selling items
produced before that asset is available for use, i.e. proceeds
while bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended by
management. Consequently, an entity recognises such sales
proceeds and related costs in profit or loss. The entity measures
the cost of those items in accordance with IAS 2 Inventories.
The amendments also clarify the meaning of 'testing whether
an asset is functioning properly'. IAS 16 now specifies this as
assessing whether the technical and physical performance
of the asset is such that it is capable of being used in the
production or supply of goods or services, for rental to others,
or for administrative purposes.
If not presented separately in the statement of comprehensive
income, the financial statements shall disclose the amounts
of proceeds and cost included in profit or loss that relate
to items produced that are not an output of the entity’s
ordinary activities, and which line item(s) in the statement of
comprehensive income include(s) such proceeds and cost.
The Group has adopted the amendments included in the
Annual Improvements to IFRS Accounting Standards 2018-
2020 Cycle for the first time in the current year. 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 derecognise 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.
IFRS 16 Leases
The amendment removes the illustration of the reimbursement
of leasehold improvements.
New and amended IFRS Standards that are not yet effective
At the date of authorization of these consolidated financial statements, the Entity has not applied
the following new and amended IFRS Standards that have been issued but are not yet effective:
Amendments to IAS 1
Amendments to IAS 1 and to IFRS 2
practice statements
Amendments to IAS 8
Amendments to IAS 12
Classification of Liabilities as Current
or Non-current
Disclosure of accounting policies
Definition of accounting estimates
Deferred taxes related to assets and liabilities
arising from a single transaction.
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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:
3. SIGNIFICANT ACCOUNTING POLICIES
Amendments to IAS 12 Deferred Taxes – Deferred taxes relating to assets and liabilities arising
from a single transaction.
The amendments introduced an additional exception apart from the exemption from initial recognition.
In the amendments, an entity does not apply the initial recognition exception for transactions that
result in taxable and deductible temporary differences.
Depending on the applicable tax law, temporary taxable and deductible differences may occur in
the initial recognition of an asset and liability in a transaction that is not a business combination
and does not affect accounting or taxable profits. For example, it may occur with the recognition
of a lease liability and the corresponding right-of-use asset by applying IFRS 16 Leases on the
date of commencement of a lease.
Following amendments to IAS 12, an entity is required to recognise relative deferred tax assets
and liabilities, whereas the recognition of any active deferred tax is subject to the recoverability
criterion in IAS 12.
The IASB also added an illustrative example to IAS 12 explaining how the amendments are
implemented.
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 exchange
for goods and services.
ii. Fair value
The amendments apply to transactions that occur on or after the beginning of the earliest
comparative period presented. Additionally, at the beginning of the first oldest comparative period,
an entity recognizes:
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.
• An active deferred tax (to the extent taxable income is likely to be available against the deductible
temporary difference) and a passive deferred tax for all taxable and temporary deductions
associated with:
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.
• Right of use assets and lease liabilities.
• Decommissioning, restoration and other similar liabilities and corresponding amounts
recognized as part of the cost of related assets.
• The cumulative effect of the initial application of the amendments as an adjustment to the initial
balance sheet of retained earnings (or some other capital component, as appropriate) at that
date.
The amendments will be in force for the annual periods beginning on January 1, 2023, with the
option of early application.
Management anticipates that the application of these amendments may have an impact on the
Entity's consolidated financial statements in future periods.
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.
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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.
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.
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.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Entity’s accounting policies.
All assets, liabilities, equity, income, expenses and cash flows relating to transactions between
related parties have been fully eliminated in consolidation.
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 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.
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.
All intercompany balances, transactions and cash flows have been eliminated in consolidation.
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.
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).
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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.
As of December 31, 2020:
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. Liquidity - As disclosed in the financial statements as of December 31, 2022, 2021 and 2020, its
current liabilities exceed its current assets by $9,817,002, $41,065,673 and $8,778,557, respectively.
The accompanying consolidated financial statements do not include those adjustments related
to the valuation and classification of assets and liabilities, which may be necessary in the event
that the Entity is unable to continue its operations.
f. Previous fiscal year reclassifications
The financial statements for the year ended December 31, 2021 and 2020 have been reclassified
in certain items for the adequate presentation of distribution costs and that the information can
be presented in a comparative way with that used in 2022.
As of December 31, 2021:
Concept
Consolidated statements of financial
position:
Other accounts receivable(1)
Carrot River Holding, S. A. R. L.(1)
Accrued expenses and employee
benefits(2)
Derivative financial instruments(2)
$
$
Figures
previously
reported
Reclassifications
Reclassified
balance
681,374 $
(233,264) $
-
4,160,150
233,264
(305,968)
448,110
233,264
3,854,182
- $
305,968 $
305,968
Concept
Consolidated statements of financial
position:
Figures
previously
reported
Reclassifications
Reclassified
balance
Other accounts receivable (1)
$
730,291 $
(242,767) $
Carrot River Holding, S. A. R. L.(1)
Accrued expenses and employee
benefits (2)
-
4,279,180
242,767
(621,117)
487,524
242,767
3,658,063
Instrumentos financieros derivados (2)
-
621,117
621,117
(1) It corresponds to the balance receivable with Carrot River Holding, S. A. R. L. (related party),
for an amount of 10 million euros, which will be payable in the year 2026, so this has been
classified in the long-term in the statement of financial position.
(2) It corresponds to the fair value of the derivative financial instruments contracted by the Entity,
whose maturities correspond to years 2025 and 2026.
g. 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.
h. 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.
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
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• 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) Amortized cost and effective interest method
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, 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.
A financial asset is held for trading if:
• 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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(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’;
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• 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;
• 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 (credit losses) 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.
(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.
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.
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 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:
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(1) The financial instrument has a low risk of default,
(2) 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) 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;
(d) It is becoming probable that the borrower will enter bankruptcy or other financial
reorganization; or
(e) 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 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.
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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.
Derecognition of financial assets
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.
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.
i. 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
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.
j. 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.
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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.
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.
k. 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.
l. Inventories and cost of sales
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.
Inventories are valued at the lower of cost or net realizable value. Costs of inventories are
determined using the average cost method.
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 expected to occur that
differ from the purpose for which those instruments are contracted.
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, S.A., Banco Santander, S.
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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.
n. 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.
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.
o. 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.
Brands owned by Alsea included under intangibles assets are the following:
m. 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- line method, based on the useful lives estimated by the Entity's management.
Annual depreciation rates of the main groups of assets are as follows:
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.
Brand
Archie’s
Vips
El Portón
La Finca
Casa de Comal
Corazón de barro
Vips
Ginos
Ole Mole
Foster’s Hollywood
Country
Colombia
Mexico
Mexico
Mexico
Mexico
Mexico
Spain
Spain
Spain
Spain
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
Own brand
During 2020, the Entity has identified impairment effects on its El Portón, Starbucks Coffee,
Burger King, Italianni´s y Vips brands for an amount of $220,000.
During 2021, the Entity has identified impairment effects on its El Portón, Burger King
Argentina and Starbucks Coffee Argentina brands for an amount of $184,430.
During 2022, the Entity has identified impairment effects on its El Portón, Vips, Starbucks
Coffee, Burger King and PF Changs brands for an amount of $140,703.
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.
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The terms of brand rights are as follows:
p. Impairment in the value of long-lived assets, equipment, leasehold improvements, properties,
Brands
Domino’s Pizza
Starbucks Coffee
Burger King
Chili’s Grill & Bar
P.F. Chang’s
The Cheesecake
Factory
Italianni’s
AMERICA
Mexico Argentina
-
2027
2025
2037
Depending on opening dates
2023
2029(2)
Depending on
opening dates
2031(1)
-
-
-
-
Chile
-
2027
2026
Colombia
2026
2033
-
-
Uruguay
2031
2026
-
-
2021(2)
2021(2) (5)
-
-
-
-
-
-
-
Brands
Domino’s Pizza
Starbucks Coffee
Spain Luxembourg
-
2030
2029(3)
2030
Portugal
-
2030
Andorra
-
-
France Netherlands
-
2034
-
2034
Belgium
-
2034
EUROPE
Fridays
Burger King
2030
Depending
on opening
dates(4)
-
-
-
2030
2030
-
-
-
-
-
-
-
-
(1) The term for each store under this brand is 20 years as of the opening date, with the
right to a 10-year extension.
(2) The term for each store under this brand is 10 years as of the opening date, with the
right to a 10-year extension.
(3) 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.
(4) Term of 20 years with from the date of opening.
(5) PF Chang's brand in Colombia operated until December 2021.
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, 2021 and 2020, derived from the Covid-19 pandemic, it was business
to limit the investment of new stores until the recovery of sales as normal.
Amortization of intangible assets is included in the depreciation and amortization accounts
in the consolidated statements of income.
3. Derecognition of intangible assets
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.
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. As of December 31,
2022, 2021 and 2020, the Entity recorded an amount of $140,703, $184,430 and the $220,000,
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.
q. Business combinations
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.
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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.
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.
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.
r. 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.
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.
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.
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.
An impairment loss recognized for goodwill is not reversed in subsequent periods.
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.
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s. 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.
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 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.
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.
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.
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.
t. 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.
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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.
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 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.
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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.
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
Right-of-use assets are presented as a separate item in the consolidated statement of changes
in financial position.
date these movements were carried out.
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 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.
u. 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 51%, 51% and 50% of
consolidated net income and 40%, 39% and 36% of the total consolidated assets at December
31, 2022, 2021 and 2020, 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.
- All conversion differences are recognized as a separate component under stockholders’
equity and form part of other comprehensive income items.
v. 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.
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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 presented
in other expenses and other income.
Federal Labor Law
On December 27, 2022, the decree amending articles 76 and 78 of the Federal Labor Law
regarding vacations in Mexico was published in the Official Gazette of the Federation, which
enters into force on January 1, 2023. The main changes caused by this labor reform consider
an increase in the minimum annual vacation period of workers based on the years they have
of service. According to the reform of Article 168 of the Social Security Law published on
December 16, 2020 and with entry into force on January 1, 2023, changes are established in the
stratification of contribution base salary ranges in terms of employer contributions progressively
from 2023 to 2030.
The Entity evaluated the accounting impacts generated by these labor reforms and determined that
the increases in the provision of vacations, vacation premiums and social security contributions
were not significant as of December 31, 2022.
w. Income taxes
The income tax expense represents the sum of the tax currently payable and deferred tax.
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 end of the reporting period,
to recover or settle the carrying amount of its assets and liabilities.
3. Current and deferred tax for the year
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.
1. Current tax
Current income tax (ISR) is recognized in the results of the year in which is incurred.
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.
2. Deferred income tax
x. Provisions
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.
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.
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Provisions are classified as current or non-current based on the estimated period of time
estimated for settling the related obligations.
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.
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.
y. 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.
Provision of services
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.
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES FOR
ESTIMATING UNCERTAINTIES
In the application of the Entity's accounting policies, which are described in Note 4, 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.
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 20 mentions that Grupo Zena is a subsidiary of Alsea, over which it owns 76.8%. 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 (10.6% put
option). The sale option may be exercised no later than December 31, 2026. The Entity has an
enforceable and optional “Call Option” as of the third year, as well as the payment of a coupon
with annual interest payable annually at the 4.6% rate on principal until the date on which the
“Put Option” is exercised. The Entity has the possibility of settling the obligation through the
exchange of shares or cash.
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 20.
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.
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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 23 i.
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.
5. 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, 2022, 2021 and 2020 is comprised as follows:
Cash
Investments with original maturities of under three
months
2022
3,587,600 $
$
2021
3,381,941 $
2020
2,614,467
2,499,217
3,511,492
1,317,942
Total cash and cash equivalents
$
6,086,817 $
6,893,433 $
3,932,409
The Entity maintains its cash and cash equivalents with accepted financial entities and it has not
historically experienced losses due to credit risk concentration.
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6. CUSTOMERS, NET
Following is the aging of past due but unimpaired accounts receivable:
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.
At December 31, 2022, 2021 and 2020, the customer balance is comprised as follows:
Franchises
Other (1)
$
2022
1,260,291 $
134,533
1,394,824
2021
1,089,594 $
185,659
1,275,253
2020
917,477
71,030
988,507
15-60 days
60-90 days
More than 90 days
Total
Current balance
Total account receivable
2022
92,036 $
43,025
205,510
2021
115,789 $
72,109
273,148
2020
59,245
47,268
171,351
340,571 $
461,046 $
277,864
1,054,254 $
814,207 $
710,643
1,394,824 $
1,275,253 $
988,507
$
$
$
$
Expected credit losses
(147,613)
(205,100)
(98,023)
$
1,247,211 $
1,070,153 $
890,484
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.
(1) In others there are concepts such as third parties, officials and employees and vouchers to be
7. INVENTORIES, NET
redeemed.
ACCOUNTS RECEIVABLE
The Entity sells food and beverages to the general public in cash and to franchisees with contracted
terms of 8 to 30 days. From the day following the contracted maturity date, interest is generated
on the overdue balance, at the time of settlement. As of December 31, 2022, the rate consists of
Equilibrium Interbank Interest Rate (TIIE) plus 5 points and multiplied by 1.5.
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
5g, 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.
At December 31, 2022, 2021 and 2020, inventories are as follows:
Food and beverages
Other, mainly containers and packaging(1)
Obsolescence allowance
$
2022
2,859,697 $
38,469
(2,840)
2021
1,978,553 $
33,540
(2,835)
2020
1,599,260
21,481
(3,171)
Total
$
2,895,326 $
2,009,258 $
1,617,570
(1) In others are concepts such as toys, uniforms, cleaning utensils, kitchen appliances and souvenirs.
8. ADVANCE PAYMENTS
Advance payments were made for the acquisition of:
Insurance and other services
Inventories
Lease of locales
Total
2022
348,296 $
485,489
36,729
2021
288,855 $
324,260
28,306
2020
138,983
160,271
28,780
870,514 $
641,421 $
328,034
$
$
AR
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122
9. RIGHT OF USE ASSETS
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 2022, 2021 and 2020.
Right of use assets
Cost:
Balance at January 1, 2020
Additions and renovations
Balance as of December 31, 2020
Additions and renovations
Balance as of December 31, 2021
Additions and renovations
Amount
$ 25,203,345
6,535,160
31,738,505
3,522,783
35,261,288
2,512,224
Balance as of December 31, 2022
$
37,773,512
Depreciation:
Balance at January 1, 2020
Charge for depreciation for the year
Balance as of December 31, 2020
Charge for depreciation for the year
Balance as of December 31, 2021
Charge for depreciation for the year
$
(4,010,688)
(4,304,542)
(8,315,230)
(4,671,802)
(12,987,032)
(4,350,755)
Balance as of December 31, 2022
$ (17,337,787)
Net cost:
Balance as of December 31, 2020
Balance as of December 31, 2021
Balance as of December 31, 2022
$ 23,423,275
$ 22,274,256
$ 20,435,725
Amounts recognized in the consolidated statement
income
Depreciation expense of the asset for use rights
Finance expense caused by lease liabilities
Expense related to leasing of low-value assets
Expense related to variable lease payments, not included
in the measurement of lease liabilities
2022
2021
$
4,350,755 $
948,535
257,686
4,671,802 $
1,050,332
176,314
2020
4,304,542
1,034,284
236,516
751,329
553,419
316,173
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. The composition of the
lease payments by the stores is detailed in the following table.
Fixed payments
Variable payments
Total lease payments
2022
5,320,062 $
751,329
2021
5,738,455 $
553,419
2020
5,344,326
316,173
6,071,391 $
6,291,874 $
5,660,499
$
$
In general, variable payments constitute 12%, 9% and 6% at December 31, 2022, 2021 and 2020,
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.
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.
10. OBLIGATION UNDER FINANCE LEASES
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Year 5
Later
2022
2021
2020
$
4,907,925 $
4,126,190
3,459,579
2,857,341
2,336,443
7,551,600
25,239,078
5,455,183 $
4,918,822
4,095,434
3,403,711
2,750,413
7,765,454
28,389,017
5,092,312
4,640,483
4,158,803
3,320,533
2,698,233
8,768,258
28,678,622
Benefits obtained from negotiations related to COVID-19
(27,970)
(840,873)
(1,596,496)
Less: Unearned interest
(3,414,640)
(4,625,743)
(3,378,572)
$
21,824,438 $
23,763,274 $ 25,300,050
AR
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123
The Entity does not face a significant liquidity risk regarding its lease liabilities. Lease liabilities are monitored through the Entity's Treasury.
11. STORE EQUIPMENT, LEASEHOLD IMPROVEMENTS AND PROPERTY, NET
Store equipment, leasehold improvements and properties are as follows:
Cost
Buildings
Store
equipment
Leasehold
improvements
Transportation
equipment
Computer
equipment
Production
equipment
Office furniture
and equipment
Construction in
process
Total
Balance as of 1 January 2020
$
907,282 $
10,476,240 $
16,070,726 $
280,343 $
1,372,385 $
990,308 $
564,011 $
2,171,768 $
32,833,063
Additions
Disposals
Revaluation
Translation adjustments
54,590
(60,829)
-
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
262,901
-
(188,632)
39,398
4,869
Balance as of December 31, 2020
$
978,597 $
11,575,184 $
18,439,598 $
302,240 $
1,544,128 $
1,014,110 $
836,227 $
2,027,403 $
Additions
Disposals
Revaluation
Translation adjustments
-
(199,277)
-
(9,506)
672,788
(380,044)
379,676
(426,991)
794,503
(768,010)
557,217
(839,646)
41,750
(41,953)
1,637
(10,416)
124,033
(67,283)
24,852
(58,227)
312,665
(19,806)
-
(4,766)
71,094
(56,763)
7,961
(75,376)
724,087
(22,055)
64,316
(64,936)
1,778,242
(1,544,320)
643,754
3,006,748
36,717,487
2,740,920
(1,555,191)
1,035,659
(1,489,864)
Balance as of December 31, 2021
769,814
11,820,613
18,183,662
293,258
1,567,503
1,302,203
783,143
2,728,815
37,449,011
Additions
Disposals
Revaluation
Translation adjustments
-
(17,946)
-
(5,549)
932,545
(346,795)
370,697
(945,291)
1,081,186
(568,297)
867,782
(1,770,590)
60,131
(37,060)
6,905
(16,512)
178,452
(69,111)
42,355
(114,699)
16,106
(515)
-
(12,513)
145,812
(21,699)
6,660
(174,161)
1,440,420
(6,930)
-
(79,215)
3,854,651
(1,068,353)
1,294,400
(3,118,530)
Balance as of December 31, 2022
$
746,319 $
11,831,768 $
17,793,743 $
306,722 $
1,604,499 $
1,305,281 $
739,756 $
4,083,090 $
38,411,178
AR
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124
Depreciation
Buildings
Store
equipment
Leasehold
improvements
Transportation
equipment
Computer
equipment
Production
equipment
Office furniture
and equipment
Construction in
process
Total
Balance as of 1 January 2020
$
116,667 $
5,731,846 $
8,532,482 $
152,118 $
947,188 $
533,490 $
126,471 $
- $
16,140,262
Additions
Disposals
Revaluation
Translation adjustments
Balance as of December 31, 2020
Additions
Disposals
Revaluation
Translation adjustments
56,317
(2,238)
-
46,258
217,004
3,304
(83,398)
-
(3,070)
1,054,166
(293,138)
163,195
413,768
7,069,837
919,414
(389,483)
252,275
(260,505)
2,164,640
(603,537)
289,240
802,607
11,185,432
1,738,620
(678,432)
424,338
(790,230)
44,804
(20,477)
1,147
10,028
187,620
36,184
(36,835)
1,682
(6,490)
184,627
(26,471)
13,590
63,571
1,182,505
157,585
(61,331)
22,858
45,190
39,224
(917)
-
-
571,797
70,426
(18,937)
-
(2,182)
178,558
(39,286)
3,903
153,868
423,514
161,691
(35,706)
5,730
(48,947)
-
-
-
-
-
-
-
-
-
Balance as of December 31, 2021
$
133,840 $
7,591,538 $
11,879,728 $
182,161 $
1,256,427 $
621,104 $
506,282 $
- $
Additions
Disposals
Revaluation
Reclasification
Translation adjustments
Balance as of December 31, 2022
Net balance as of December 31, 2020
Net balance as of December 31, 2021
Net balance as of December 31, 2022
$
$
$
$
1,017
-
-
(133,047)
(1,809)
912,213
(325,306)
114,545
(627,455)
(583,004)
1,431,323
(532,496)
682,361
757,369
(1,446,224)
129,802
(29,438)
2,948
(87,404)
(14,421)
157,928
(65,954)
36,173
(72,105)
(92,203)
75,192
(107)
1,162
371,138
(4,875)
130,050
(19,461)
5,950
216,133
(119,532)
-
-
-
-
-
- $
7,082,531 $
12,772,060 $
183,648 $
1,220,266 $
1,063,613 $
719,421 $
- $
23,041,539
761,593 $
4,505,347 $
7,254,166 $
114,620 $
361,623 $
442,313 $
412,713 $
2,027,403 $
15,879,778
635,974 $
4,229,075 $
6,303,934 $
111,097 $
311,076 $
681,099 $
276,861 $
2,728,815 $
15,277,931
746,319 $
4,749,237 $
5,021,682 $
123,074 $
384,233 $
241,668 $
20,335 $
4,083,090 $
15,369,639
3,722,336
(986,064)
471,075
1,490,100
20,837,709
3,087,224
(1,304,122)
706,883
(1,156,614)
22,171,080
2,837,524
(972,762)
843,138
424,628
(2,262,069)
AR
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125
12. INTANGIBLE ASSETS, NET
Intangible assets are comprised as follows:
Cost
Balance as of January 1, 2020
Acquisitions
Adjustment for currency conversion
Disposals
Restatement
Balance as of December 31, 2020
Acquisitions
Adjustment for currency conversion
Disposals
Restatement
Balance as of December 31, 2021
Acquisitions
Adjustment for currency conversion
Disposals
Restatement
Brand
rights
Commissions for
store opening
Franchise and use
of locale rights
Licenses and
developments
Construction
in process
Goodwill
Total
$
15,002,054 $
522,569 $
1,487,947 $
1,645,491 $
- $
12,572,861 $
31,230,922
33,881
553,775
(93,080)
58,734
15,555,364
22,032
(450,831)
(49,591)
95,197
15,172,171
(3,617)
(1,189,653)
(26,900)
148,870
110
149,145
(3,689)
1,711
669,846
-
(19,304)
(14,610)
2,300
638,232
-
(2,698)
(177,622)
2,495
160,076
227,883
(25,128)
8,228
1,859,006
15,147
(37,863)
(3,785)
13,949
1,846,454
31,171
(22,339)
(23,736)
21,940
209,849
126,510
(3,787)
3,343
1,981,406
103,789
(67,245)
(4,099)
5,543
2,019,394
275,831
(121,447)
(5,432)
8,521
-
-
-
-
-
-
-
-
-
-
215,085
(73,758)
(80)
144,736
-
477,505
-
-
13,050,366
-
(274,435)
-
-
12,775,931
-
(759,038)
-
-
403,916
1,534,818
(125,684)
72,016
33,115,988
140,968
(849,678)
(72,085)
116,989
32,452,182
518,471
(2,168,933)
(233,770)
326,562
Balance as of December 31, 2022
$
14,100,871 $
460,407 $
1,853,490 $
2,176,867 $
285,985 $
12,016,893 $
30,894,512
Amortization
Balance as of January 1, 2020
Amortization
Adjustment for currency conversion
Disposals
Restatement
Balance as of December 31, 2020
Amortization
Adjustment for currency conversion
Disposals
Restatement
Balance as of December 31, 2021
Amortization
Adjustment for currency conversion
Disposals
Reclasication
Restatement
Balance as of December 31, 2022
Net balance as of December 31, 2020
Net balance as of December 31, 2021
Net balance as of December 31, 2022
Brand
rights
Commissions for
store opening
Franchise and use
of locale rights
Licenses and
developments
Construction
in process
Goodwill
Total
$
1,368,912 $
438,183 $
713,281 $
1,318,384 $
- $
16,953 $
3,855,713
143,572
57,383
(98,206)
(31,819)
1,439,842
98,851
(94,489)
(17,211)
48,516
1,475,509
117,428
(63,133)
(12,592)
24,558
79,931
91,748
39,046
(3,649)
(1,681)
563,647
42,185
10,310
(14,359)
2,413
604,196
33
(2,820)
(177,613)
33,018
3,579
72,698
1,011
(18,548)
(4,603)
763,839
98,517
47,062
(1,428)
8,214
916,204
154,668
(99,186)
(23,437)
27,290
15,001
100,294
118,490
(18,660)
(3,488)
1,515,020
179,750
(53,768)
(3,657)
5,411
1,642,756
123,432
(11,915)
(2,646)
(509,494)
13,416
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,953
-
-
-
-
16,953
-
(114,663)
-
-
-
408,312
215,930
(139,063)
(41,591)
4,299,301
419,303
(90,885)
(36,655)
64,554
4,655,618
395,561
(291,717)
(216,288)
(424,628)
111,927
$
$
$
$
1,621,701 $
460,393 $
14,115,522 $
13,696,662 $
12,479,169 $
106,199 $
34,036 $
14 $
990,540 $
1,095,167 $
930,250 $
862,950 $
1,255,549 $
466,387 $
376,638 $
921,318 $
- $
- $
- $
(97,710) $
4,230,473
13,033,413 $
28,816,687
12,758,978 $
27,796,564
285,985 $
12,114,602 $
26,664,038
AR
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126
As of December 31, 2022, the Entity has identified impairment effects on its El Portón, Vips,
Starbucks Coffee, Burger King and PF Changs brands for an amount of $140,703.
As of December 31, 2021, the entity recorded a loss in its brands El Portón, Starbucks Coffee
Argentina and Burger King Argentina, for an amount of $184,430, affecting $21,534 to fixed assets
and $162,896 to intangible assets.
As of December 31, 2020, derived from the COVID-19 pandemic, the entity recorded a loss in its
brands El Portón, Starbucks Coffee, Burger King, Italianni's and Vips, for an amount of $220,000,
affecting $58,163 to fixed assets and $161,837 to intangible assets.
13. INVESTMENT IN SUBSIDIARIES
The Entity's shareholding in the capital stock of its main subsidiaries is as follows:
Subsidiary
Activity
2022
2021
2020
Starbucks brand operator in
Mexico
Operator of the Burger King
brand in Mexico
Operator of the Domino's
Pizza brand in Mexico
Operator of the Chili's Grill &
Bar brand in Mexico
Distribution of Alsea
brand food
Factoring and Leasing
Operator
Operator of the California
Pizza Kitchen brand in Mexico
Operator of the P.F. Chang's
brand and in Mexico
Distributor of food and
supplies for Alsea and
related brands
Operator of the
Italianni's brand
Operator of the
Italianni's brand
Operator of the
Italianni's brand
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.
Gastrosur, S.A. de C.V.
Panadería y Alimentos para
Food Service, S.A. de C.V.
Servicios Múltiples
Empresariales ACD, S.A. de
C.V. (formerly SOFOM E.N.R)
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,
S.A. de C.V.
Grupo Amigos de Torreón, S.A.
de C.V.
Operadora Vips, S. de R.L.
de C.V.
OPQR, S.A. de C.V.
Operadora GB Sur, S.A. de C.V.
Vips brand operator
100.00%
100.00%
100.00%
Operator of the Cheesecake
Factory brand in Mexico
Operator of the Vips brands
and Domino's Pizza in Mexico
100.00%
100.00%
100.00%
-
-
70.90%
Subsidiary
Fast Food Chile, S.A.
Asian Food, Ltda.
Starbucks Coffee Chile, S.A.
Gastrococina Sur, S.P.A.
Fast Food Sudamericana, S.A.
Starbucks Coffee Argentina,
S.R.L.
Asian Bistro Colombia, S.A.S.
Operadora Alsea en Colombia,
S.A.
Estrella Andina, S.A.S.
Gastronomía Italiana en
Colombia, S.A.S.
Café Sirena Uruguay, S.A.
Food Service Project, S.L.
(Grupo Zena) (1)
Activity
2022
2021
2020
Operator of the Burger King
brand in Chile
Operator of the P.F. Chang's
brand in Chile
Starbucks brand operator
in Chile
Chili's Grill & Bar operator
in Chile
Operator of the Burger King
brand in Argentina
Starbucks brand operator in
Argentina
Operator of the P.F. Chang's
brand in Colombia
Operator of the Burger King
brand in Colombia
Starbucks brand operator
in Colombia
Operator of the Archie's brand
in Colombia
Brand operator
Starbucks in Uruguay
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
95.03%
95.03%
95.03%
70.00%
70.00%
70.00%
97.60%
97.60%
97.60%
100.00%
100.00%
100.00%
Operator of Spain
76.77%
76.77%
66.24%
Operator of the VIPS, VIPS
Smart, Starbucks, GINOS,
Fridays’ and Wagamama
brands in Spain
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
80.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Sigla, S.A. (Grupo VIPS)
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
(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. On June 28, 2021, the entity purchase shares that represent 20% of the non- controlling
interest of Operadora de Franquicias Alsea, S.A.P.I. de C.V., thereby increasing its participation
in that entity to 100%
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.
AR
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127
14. INVESTMENT IN SHARES OF ASSOCIATED COMPANIES
15. GOODWILL
At December 31, 2022, 2021 and 2020, the investment in shares of associated companies is comprised of the Entity's direct interest in the
capital stock of the companies listed below:
ASSIGNMENT OF GOODWILL TO CASH GENERATING UNITS
Restaurant Operator
AYB Polanco, S.A. de
C.V. (1)
Other investments
Total
Restaurant Operator
AYB Polanco, S.A. de
C.V. (1)
Other investments
Total
2022
(%)
2021
2020
Main activity
Investing in shares
2022
2021
30.00%
30.00%
30.00% Restaurant operator of the EF
$
13,936 $
14,536 $
2020
12,691
Entre Fuegos and EF Entre
Fuegos Elite Steak House brand
operating in Mexico.
142,967
117,331
77,419
$
156,903 $
131,867 $
90,110
2022
(%)
2021
2020
Main activity
2022
2021
Participation in results
30.00%
30.00%
30.00% Restaurant operator of the EF
$
(223) $
1,840 $
2020
(1,550)
Entre Fuegos and EF Entre
Fuegos Elite Steak House brand
operating in Mexico.
In order to carry out impairment tests, goodwill included in Note 12, was assigned to the following
cash generating units:
Concept
Burger King
Domino’s Pizza
Chili’s
Italianni’s
Vips
Starbucks Coffee
Foster’s Hollywood
Grupo Vips Spain
Ginos
Starbucks Spain
Fridays
British Sandwich Factory
Clover
$
2022
2021
1,336,967 $
1,078,622
26,614
785,816
3,058,697
368,513
198,598
2,962,401
1,126,546
824,597
5,515
321,740
19,976
1,336,967 $
1,078,622
26,614
785,816
3,058,697
368,513
198,598
3,496,696
1,171,185
878,060
5,746
334,498
18,966
2020
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
-
-
(1,097)
$
12,114,602 $
12,758,978 $
13,033,413
$
(223) $
1,840 $
(2,647)
As of December 31, 2022, 2021 and 2020, the studies carried out on the impairment tests concluded
that the goodwill has no impairment.
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
2022
2021
22,486 $
17,517 $
2020
15,410
36,932 $
40,362 $
38,160
13,710 $
9,427 $
11,268
43,015 $
39,789 $
19,379
(744) $
6,133 $
(5,166)
$
$
$
$
$
16. LONG-TERM DEBT
Annual debt maturities at December 31, 2022 are as follows:
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128
Long-term debt at December 31, 2022, 2021 and 2020 is comprised of unsecured loans, as shown below:
Bank
Type of credit
Currency
Rate
Maturity
2022
2021
$
- $
34,988 $
-
-
-
1,280,141
-
57,481
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Santander Totta
Simple credit
BBVA Bancomer, S.A.
Bilateral
BNP CIC
BBVA Icos
Simple credit
Simple credit
Euros
Euros
Euros
Euros
Banco Nacional de Comercio
Exterior S.N.C. (Bancomext)
Simple credit
Mexican pesos
Scotiabank Inverlat, S.A.
Simple credit
Mexican pesos
Euribor + 1.50%
3% (Fixed rate)
Euribor + 2%
Euribor + 2.75%
Variable rate TIIE
+1%
Variable rate TIIE
+2.15%
Banco de Chile
Sindicado
Simple credit
Chilean pesos
3.48% (Fixed rate)
Simple credit
Mexican pesos
Sindicado
Simple credit
Euros
Sabadel Icos
Ibercaja Icos
Abanca Icos
Caja rural Icos
Simple credit
Simple credit
Simple credit
Simple credit
Euros
Euros
Euros
Euros
Banco Santander, S.A.
Simple credit
Mexican pesos
Banco Santander, S.A.
Clover ING
Bankia Icos
Santander Icos
Sindicado
Sumitomo
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Euros
Euros
Euros
Euros
Euros
Variable rate TIIE
+1.85%
Variable rate
Euribor+ 1.25%
Euribor + 2.20%
Euribor + 1.75%
Euribor + 1.75%
Euribor + 1.60%
Variable rate TIIE
+1.85%
Euribor + 1.35%
Euribor + 1.95%
Euribor + 1.85%
Euribor + 2.10%
Euribor + 3.25%
Simple credit
Mexican pesos
Euribor + 1.60%
Banco Santander, S.A.
Simple credit
Mexican pesos
Santander Chile, S.A.
Simple credit
Chilean pesos
Banca March
Sindicado
Simple credit
Simple credit
Euros
Euros
Santander, S.A.
Simple credit
Euros
Clover ING
Simple credit
Euros
Societe Generale
Simple credit
Euros
Variable rate TIIE
+1.85%
Variable rate TIIE
+0.41%
Euribor + 1.50%
Variable rate Euribor
+2.75%
Variable rate Euribor
+2.75%
Variable rate Euribor
+2.75%
Variable rate Euribor
+3.00%
Less - current
portion
Long-term debt
maturities
2026
2026
2025
2025
2025
2025
2024
2023
2023
2023
2023
2023
2023
2022
2022
2022
2022
2022
2021
2021
2021
2021
2020
2026
2023
2023
2024
2020
36,570
36,570
365,704
243,801
1,668,413
169,350
349,897
233,265
1,586,163
-
993,526
60,375
563,059
93,888
4,432,195
8,255,972
10,312,875
126,165
23,327
46,654
34,989
-
233,264
1,096,341
233,264
326,569
-
-
-
136,773
24,380
48,760
-
283,594
243,802
1,145,869
243,802
341,323
2,500,000
599,223
155,000
Year
2023
2024
2025
2026
$
Amount
1,277,638
1,512,168
1,420,744
829,848
$
5,040,398
The Entity as of December 31, 2022, has lines of credit contracted for 1,700 millions mexican
pesos and 59 million Euros.
Bank loans include certain affirmative and negative covenants, such as maintaining certain financial
ratios. At December 31, 2022, 2021 and 2020, 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 had 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.
43,834
83,182
233,263
243,801
17. DEBT INSTRUMENTS
On January 21, 2022, senior notes for 300 million Euros were placed at an interest rate of 5.50%
per year, issued through its subsidiary Food Service Project, S.A. and guaranteed by Alsea (the
"Euro Bonds 2027") and with an option for partial or full settlement as of January 21, 2024.
3,216,729
82,127
193,014
210,906
-
-
-
-
-
-
-
-
5,040,398
(1,277,638)
13,650,739
24,233,053
(1,638,000)
(24,233,053)
$
3,762,760 $
12,012,739 $
-
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In December 2021, the Entity placed of the senior bonds with maturity in 2026 for the amount
of US$ 500 million on international markets with a term of five years from its issuance date and
maturity in December 2026. Those instruments will accrue interest at a fixed rate of 7.75%.
each country to deal with the pandemic, have ensured continuity and a return to productivity at
pre-pandemic levels in 2020.
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, 2022, 2021 and 2020 amounts to $22,748,440, $18,078,340 and
$7,979,149, respectively.
Year maturity
2024
2025
2026
2027
$
Amount
1,200,449
1,000,000
2,650,000
17,897,991
$
22,748,440
As of December 31, 2020, the Entity had certain obligations to do and not to do, as well as to maintain
certain financial reasons derived from bank loans, which at that date were fulfilled; However, there
are other obligations to do and not to do, as well as financial reasons for the twelve-month period
ending December 31, 2020, of which waivers were only obtained by its bank creditors until June
30, 2020, and at the date of the reporting period it was not certain that they could be fully fulfilled
as of December 31, 2020. December 2020, as established by IAS 1 Presentation of Financial
Statements, which indicates that the liability should be classified as current. The amount of this
debt as of December 31, 2020, was reclassified to the short term in the consolidated statement
of financial position for an amount of Ch$7,979 million, causing short-term liabilities to significantly
exceed short-term assets at that date.
18. 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.
In September 2021, the Entity, Alia Capital Partners and Bain Capital Credit agreed to invest in
a noncontrolling interest of 21.1% in Food Service Project, S.A. (Alsea Europa). Following this
investment, Alsea holds equity of 76.8% (formerly 66.2%), while Alia Capital Partners and Bain
Capital Credit will indirectly hold equity of 10.6%, and the remaining minority shareholders represent
12.7%. The Entity’s outlay was 55 million euros (equal to $1,205,703). Similarly, reimbursements
of $92.4 million pesos were also obtained. Based on this agreement, the Entity renegotiated its
PUT - CALL options in the following manner:
a) Deadline of December 31, 2026.
b) The Entity has an enforceable and optional “Call Option” as of the third year.
c) The weekly payment of a coupon (4.6% per year) payable until the date on which the “Put
Option” is exercised.
d) The Entity has the possibility of settling the obligation through the exchange of shares or cash.
19. INCOME TAXES
In Mexico, the Entity is subject to ISR. Under the ISR Law the rate for 2022, 2021 and 2020 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.
In Chile, the Tax Modernization Law established the Tax Regimes in effect as of January 1, 2020,
the companies of the Alsea Group in Chile were placed under the general semi-integrated regime
of Article 14 A), whose tax rate is 27%.
In Colombia, the applicable tax provisions stipulate that the rate applicable to income tax for taxable
years 2019 is 33%, 32% for 2020, 31% for 2021 and 35% from the 2022 taxable year.
The placement of the Euro Bond 2027 and issuance, of the US$500 million stock certificate,
allowed the liquidation of its short-term obligations and the restructuring of long-term debt. Both
bond placements, together with the reductions in operating restrictions imposed by authorities in
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.
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"In Argentina, i.- Income tax: On June 16, 2021, Law No. 27,630 was published, which modifies
the income tax for fiscal years or fiscal years beginning on or after January 1, 2021, establishing
a scale for the purposes of payment of the tax according to the accumulated net taxable profit.
By virtue of AFIP General Resolution 5168/2022 dated March 14, 2022 that modifies the scale
of the taxable net profit, the tax rate applicable to the Company will be determined according to
the following scale: up to $ 7,604,949 (Argentine pesos) corresponds to pay the tax on a rate of
25%; from $7,604,949 (Argentine pesos) to $76,049,486 (Argentine pesos), the sum of $1,901,237
(Argentine pesos) plus 30% on the surplus of $7,604,949 (Argentine pesos) is taxed; and from $
76,049,486 (Argentine pesos) corresponds to tax $ 22,434,598 (Argentine pesos), plus 35% on the
surplus of $ 76,049,486 (Argentine pesos). These amounts will be updated annually in the month
of January, considering the annual variation of the Consumer Price Index (CPI) corresponding to
the month of October of the year prior to the adjustment, with respect to the same month of the
second year prior to the adjustment.
Likewise, the withholding rate for the payment of dividends is set at 7%.
As of December 31, 2021, the parameters established by the income tax law to practice the
adjustment for tax inflation are met and in the registration of the current and deferred income tax,
the effects arising from the application of that adjustment have been incorporated in the terms
provided for in the law.
In Spain, tax reforms, which include the reduction of this tax rate 25% in 2022, 2021 and 2020,
and no modification is foreseen for the following fiscal years. 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.
The tax rates established for the financial year 2021, in the rest of the countries in which Alsea is
present in Europe are as follows:
• Portugal: 21%
• France: 25%
• Netherlands: First 395,000 euros at 15%, the rest at 25.80%.
• Belgium: 25%
• Luxembourg: 17% plus solidarity and municipal surcharges (includes the solidarity surcharge
of 7% on the CIT amount).
a. Income taxes recognized in income
Current
Deferred
2022
2021
2020
1,183,079 $
(277,222)
1,120,853 $
(905,907)
465,379
(1,664,467)
905,857 $
214,946 $
(1,199,088)
$
$
The tax expense attributable to income before ISR differs from that arrived at by applying the
30% statutory rate in 2022, 2021 and 2020 due to the following items:
Statutory income tax rate
Non-deductible expenses
Effects of inflation and others
Fixed asset update
Lease Effects under IFRS 16
Effect of tax loss carryforwards not capitalized
Difference in tax rates
Others
2022
30%
9%
18%
(19%)
(5%)
3%
1%
(1%)
2021
30%
18%
37%
(43%)
(17%)
(6%)
3%
-
2020
30%
(2%)
(3%)
(1%)
4%
(1%)
(2%)
(1%)
Effective consolidated income tax rate
35%
22%
24%
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
Temporally non-deductible interest
Advance payments
2022
2021
2020
$
(25,239) $
(31,692) $
(29,897)
(1,521,877)
(24,563)
(1,368,012)
974,377
-
154,645
(963,796)
(20,090)
(1,312,947)
(995,418)
(64,507)
(969,854)
982,118
1,596,223
(88,192)
175,875
-
162,095
$
(1,810,669) $
(1,258,724) $
(301,358)
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:
Deferred tax assets
Deferred tax liabilities
2022
2021
2020
$
(2,637,415) $ (4,968,996) $
826,746
3,710,272
(4,665,412)
4,364,054
$
(1,810,669) $
(1,258,724) $
(301,358)
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, 2022, are:
AR
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DEPRECIABLE LOSSES
21. FINANCIAL INSTRUMENTS
Year of
expiration
Mexico
Europe
Chile
Argentina
Colombia
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Losses of
entities
abroad
without
maturity
Total losses
Losses
triggered for
deferred
$
$
6,385 $
- $
- $
6,799
208,868
93,936
139,963
296,130
140,924
1,595,105
850,513
381,016
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,848,343
594,380
- $
-
149,591
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
41,485
35,585
29,229
35,000
26,041
20,961
Total
6,385
6,799
358,459
93,936
139,963
296,130
182,409
1,630,690
879,742
416,016
26,041
20,961
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 2021
and 2020.
The Entity's capital structure consists of the net debt (the loans described in Note 17, 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 23).
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.
75,381
3,518,104
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.
3,719,639 $
2,848,343 $
594,380 $
149,591 $
263,682 $
7,575,635
1,546,057 $
2,848,343 $
637,107 $
- $
57,400 $
5,088,908
For the years ended December 31, 2022, 2021 and 2020, 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.
Legal Fee
30%
25%
27%
-
35%
-
- Net Debt to EBITDA = Net Debt / EBITDA ltm.
As of December 31, 2022 and 2021, 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.
Deferred tax
effect
$
463,817 $
712,086 $
172,019
- $
20,090 $
1,368,012
20. EMPLOYEE BENEFITS
DEFINED CONTRIBUTION PLANS
Retirement plan is established with the objective of offering benefits in addition to and complementary
to those provided by other public retirement plans.
Total income recognized in the consolidated statements of income and other comprehensive
income net of income taxes as of December 31, 2022, 2021 and 2020 is ($16,715) ($3,044) and
($21,894), respectively.
The net cost of the period for the obligations derived from the seniority premium, amounted to
$55,731, $29,062 and $23,838 in 2022, 2021 and 2020, respectively.
b. Financial instrument categories
The types of derivative financial instruments approved by the Entity for the purpose of mitigating
exchange fluctuation and interest rate risk are as follows:
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132
Financial assets
Cash and cash equivalents
Loans and accounts receivable at amortized cost
Financial liabilities at amortized cost
Suppliers
Factoring of suppliers
Accounts payable to creditors
Current maturities of long-term debt
Current maturities of financial lease liabilities
Debt instruments
Long-term debt, not including current maturities
Obligation under finance leases
Option to sell the non-controlling interest
2022
2021
2020
$
6,086,817 $
2,047,742
6,893,433 $
1,751,527
3,932,409
1,620,775
4,252,803
1,375,794
4,861,118
1,277,638
4,103,865
-
3,762,760
17,720,573
22,748,440
2,971,439
1,007,798
4,446,604
1,638,000
4,415,950
1,000,000
12,012,739
19,347,324
17,078,340
2,949,829
654,115
2,834,150
24,233,053
4,207,633
7,979,149
-
21,092,417
-
c. Objectives of managing financial risks
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. Riesgo de mercado
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.
- 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.
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 34 shows foreign currency
positions at December 31, 2022, 2021 and 2020. 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.
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, 2022, 2021 and 2020.
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Underlying / reference
variable
Notional amount/ face
value (thousands of USD)
Fair value
(thousands of USD)
Type of
derivative,
security or
contract
Objective of
the
hedging
Position
Forwards
Long
Economic
2022
current
2021
current
2020
previous
2022
current
2021
current
2020
previous
2022
current
2021
current
2020
previous
20.0900
USDMXN
20.9100
USDMXN
21.0200
USDMXN
-
-
78,100 $
- $
- $
1,738
Options
Long
Economic
20.0900
USDMXN
20.9100
USDMXN
20.9100
USDMXN
31.200
16,675
11,200 $
(2,008) $
277 $
2,697
1. Foreign currency sensitivity analysis
As of December 31, 2022, 2021 and 2020, the Entity has hedges for the purchase of US dollars for the next 12 months for a total of
$85.7, $24.5 and $89.3 million, respectively, with an average exchange rate of $20.02, $19.97 and $21.69 per US dollar, respectively,
the valuation is made with an average exchange rate of $20.11, $20.47 and $19.94, per US dollar, respectively, for the following 12
months starting from December 31, 2022, 2021 and 2020.
Given the aforementioned values and amounts of foreign exchange hedges, management does not anticipate a significant risk that
could affect its results at the close of December 31, 2022, as well as its obligations incurred in its current operations due in the next
twelve months. The net position of assets against dollar-denominated financial liabilities is not considered as it is neither representative
nor material. The analysis shows only the impact on the hedges for the dollar purchase operations contracted and in force at the
end of December 31, 2022.
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, 2022, 2021 and 2020, a total of 402, 396 and 539 derivative financial instrument operations (forwards and options)
were carried out, respectively, for a total of 96.5, 127.7 and 240.3 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, 2022, 2021 and 2020, Alsea has contracted DFI's to purchase US dollars in the next twelve months for a total of
approximately 85, 24 and 89 million USD, at the average exchange rate of $20.02, $19.97 and $20.69 pesos to the dollar, respectively.
At December 31, 2022, 2021 and 2020, the Entity had contracted the financial instruments shown in the table above.
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, 2021, the Entity has a total debt of $27.788 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 6% is fixed at a weighted rate of 8.73%, and 3% 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.
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, 2022, 2021 and 2020.
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Underlying / reference
variable
Notional amount/ face
value (thousands of USD)
Fair value
(thousands of USD)
Type of
derivative,
security or
contract
Objective of
the
hedging
Position
IRS Plain Vanilla
Long
Coverage
2022
current
2021
current
2020
previous
2022
current
2021
current
2020
previous
2022
current
2021
current
2020
previous
10.76 % -
TIIE 28 d
5.7150% -
TIIE 28 d
6.7376% -
TIIE 28 d
502,775
195,684
208,817 $
21,090 $
14,675 $
(1,302)
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.
IRS Plain Vanilla
Long
Economic
10.76 % -
TIIE 28 d
5.7150% -
TIIE 28 d
6.7376% -
TIIE 28 d
-
63,732
87,032 $
- $
(238) $
(906)
Capped IRS
Long
Economic
10.76 % -
TIIE 28 d
5.7150% -
TIIE 28 d
6.7376% -
TIIE 28 d
364,277
61,173
65,211 $
(12,395) $
277 $
(766)
The following table details quantitatively the instrument contracted for the senior bond issued in dollars with a value of $500 million
outstanding as of December 31, 2022:
Instrument
Coupon Only
Call Spread
Principal Only Swap
Cap Option
Rate
TIIE+85bps
2.397 %
5.922 %
0.525 %
1. Analysis of interest rate sensitivity
Notional
(Miles USD)
Notional
(Miles MXP)
214,465
257,358
171,512
84,401
4,446,770
6,176,606
3,557,416
1,750,000
Closing
date
10.ene.22
05.ene.22
10.ene.22
15.feb.22
Expiring
date
14.dic.23
08.dic.26
14.dic.26
14.dic.23
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, 2022 close, the increase in financial costs is of approximately $114.9 million.
• A 150 bps increase in the 28-day TIIE rate represents an increase in the financial cost of approximately $87.2 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 $57.5 million.
The previous scenarios were carried out on the bank and stock market debt contracted in Mexican pesos with 28-day TIIE floating rate.
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 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. 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.
2. 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.
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3. 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, 2022 and 2021, the Entity has incurred in 53 and 13 margin calls
just in 2022 and 2021, respectively.
At December 31, 2022, 2021 and 2020, 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, 2022, 2021 and 2020, that risk amounts to $2,195,355, $1,956,627
ande $1,718,798, 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 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.
As of
December 31, 2022
Long-term debt
Debt instruments
Financial leasing
Derivates
Suppliers
Factoring of suppliers (1)
Sale of non-controlling
interest
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
6,46% $
1,277,638 $
1,512,168 $
1,420,744 $
829,848 $
- $
5,040,398
9,14%
8.00%
-
3,865
260,745
4,252,803
1,375,794
1,200,449
3,503,867
4,606
-
-
-
1,123,439
1,000,000
2,980,936
4,424
2,650,000
2,493,175
430,129
-
-
-
-
-
-
17,897,991
8,743,595
-
-
-
-
22,748,440
17,725,438
699,904
4,252,803
1,375,794
1,123,439
Total
$
7,170,845 $
7,344,529 $
5,406,104 $
6,403,152 $
26,641,586 $
52,966,216
As of
December 31, 2021
Long-term debt
Debt instruments
Financial leasing
Derivatives
Suppliers
Factoring of suppliers (1)
Sale of non-controlling
interest
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
6.48% $
1,638,000 $
3,651,966 $
3,157,355 $
3,057,287 $
2,146,131 $
13,650,739
8.13%
4.00%
1,000,000
4,415,950
73,176
2,971,439
1,007,798
-
-
3,564,491
2,121
-
-
-
1,350,000
3,326,858
223,702
-
-
1,272,474
820,490
2,851,593
6,969
-
-
-
14,907,850
9,604,382
-
-
-
-
18,078,340
23,763,274
305,968
2,971,439
1,007,798
1,272,474
Total
$
11,106,363 $
7,218,578 $
9,330,389 $
6,736,339 $
26,658,363 $
61,050,032
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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
During the period there were no transfers between level 1 and 3.
Total
(1) The fair value is presented from a bank's perspective, which means that a negative amount
As of
December 31, 2020
Long-term debt
Debt instruments
Financial leasing
Derivatives
Suppliers
Factoring of suppliers (1)
sale of non-controlling
interest
6.48% $
24,233,053 $
8.13%
4.00%
7,979,149
4,207,744
97,475
2,949,829
654,115
2,701,407
- $
-
- $
-
- $
-
- $
24,233,053
-
7,979,149
3,946,443
44,759
3,638,393
162,738
2,936,185
273,862
-
-
-
-
-
-
-
-
-
10,571,285
25,300,050
42,283
-
-
-
621,117
2,949,829
654,115
2,701,407
Total
$
42,822,772 $
3,991,202 $
3,801,131 $
3,210,047 $
10,613,568 $
64,438,720
(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
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
1) Forwards and currency options agreements
$
(38,978) $
2022
2021
- $
2020
(34,637)
Fair value
hierarchy
Nivel 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
$
409,945 $
276 $
(53,771)
Nivel 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.
represents a favorable result for the Entity.
(2) 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.
(3) 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, 2022, 2021 and 2020, 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.
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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:
2022
2021
2020
Carrying
value
Fair
value
Carrying
value
Fair
value
Carrying
value
Fair
value
Financial liabilities 2020
Financial liabilities maintained at amortized cost:
Current maturities of long-term debt
Current obligation under finance leases
Obligation under finance leases
Debt instruments
Total
Level 2
$ 24,233,053
4,207,633
21,092,417
7,979,149
$
57,512,252
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
$
4,252,803 $
1,375,794
1,277,638
4,103,865
3,762,760
17,720,573
22,748,440
4,252,803 $
1,375,794
1,620,976
4,103,865
4,160,393
17,720,573
22,211,789
2,971,439 $
1,007,798
1,638,000
4,415,950
12,012,739
19,347,324
18,078,340
2,971,439 $
1,007,798
1,899,197
4,415,950
13,338,888
19,347,324
18,504,850
2,949,829 $
654,115
24,233,053
4,207,633
-
21,092,417
7,979,149
2,949,829
654,115
25,796,432
4,207,633
-
21,092,417
8,442,256
VALUATION
a) 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.
Total
$
55,241,873 $
55,446,193 $
59,471,590 $
61,485,446 $
61,116,196 $
63,142,682
Financial liabilities 2022
Financial liabilities maintained at amortized cost:
Current maturities of long-term debt
Current obligation under finance leases
Debt instruments
Long-term debt, not including current maturities
Obligation under finance leases
Debt instruments
Total
Financial liabilities 2021
Financial liabilities maintained at amortized cost:
Current maturities of long-term debt
Current obligation under finance leases
Debt instruments
Long-term debt, not including current maturities
Obligation under finance leases
Option to sell the non-controlling interest
Debt instruments
$
Level 2
1,277,638
4,103,865
3,762,760
17,720,573
1,123,439
22,748,440
$
50,736,715
$
Level
1,638,000
4,415,950
1,000,000
12,012,739
19,347,324
1,272,474
17,078,340
Total
$
56,764,827
b) Liquidity in derivative financial operations:
1. The resources used to meet the requirements related to financial instruments, will come
from the resources generated by Alsea.
2. External sources of liquidity: No external sources of financing will be used to address
requirements pertaining to derivative financial instruments.
22. 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:
Number of
actions
Thousands of
pesos social
capital
Figures as of December 31, 2020
838,578,725 $
478,749
Placement of actions
Figures as of December 31, 2021
Placement of actions
-
838,578,725
-
-
478,749
-
Figures as of December 31, 2022
838,578,725 $
478,749
Premium in
issuance of
shares
8,676,827
-
8,676,827
(1,417)
8,675,410
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.
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138
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.
b. Following is the detail of the Non-Controlling interest of the main subsidiaries of the Entity:
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. 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, 2022, 2021 and 2020, the legal reserve amounted
to $100,736, which amount does not reach the required 20%.
II. 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.
23. NON-CONTROLLING INTEREST
a. Following is a detail of the non-controlling interest.
Ending balance at December 31, 2019
Equity in results for the year ended December 31, 2020
Other movements in capital
Ending balance at December 31, 2020
Equity in results for the year ended December 31, 2020
Other movements in capital
Ending balance at December 31, 2021
Other movements in capital
Ending balance at December 31, 2022
$
$
Amount
1,961,563
(659,884)
28,767
1,330,446
(50,660)
(244,863)
1,034,923
(83,912)
951,011
Subsidiary
Country
2022
2021
2020
2022
2021
2020
2022
2021
2020
Percentages of the
non-controlling interest
Income (loss) attributable to the
non-controlling interest
Accumulated non-controlling
interest
Food Service Project,
S.L. (Grupo Zena)(2)
Operadora de
Franquicias Alsea,
S.A. de C.V.(1)
Estrella Andina,
S.A.S.
Spain
23.23% 23.23% 33.76% $
(58,261) $
(51,276) $
(617,817) $ 839,700 $
934,191 $ 1,179,805
Mexico
-
- 20.00%
-
-
(35,908)
-
-
30,340
Colombia 30.00% 30.00% 30.00%
7,666
851
(10,757)
108,825
92,447
47,804
(1) On June 28, 2021, the entity purchase shares that represent 20% of the non- controlling
interest of Operadora de Franquicias Alsea, S.A.P.I. de C.V., thereby increasing its participation
in that entity to 100%. The amount of the transaction was for $30,254, which is equivalent
to the book value, so a goodwill is not generated.
(2) In September 2021, the Entity, Alia Capital Partners and Bain Capital Credit agreed to invest
in a noncontrolling interest of 21.1% in Food Service Project, S.A. (Alsea Europa). Following
this investment, Alsea holds equity of 76.8% (formerly 66.2%), while Alia Capital Partners
and Bain Capital Credit will indirectly hold equity of 10.6%, and the remaining minority
shareholders represent 12.7%. The Entity’s outlay was 55 million euros (equal to $1,205,703),
which represents 10.5% of the noncontrolling interest. Similarly, reimbursements of $92.4
million pesos were also obtained. Based on this agreement, the Entity renegotiated its PUT
- CALL options in the following manner:
a) Deadline of December 31, 2026.
b) The Entity has an enforceable and optional “Call Option” as of the third year.
c) The weekly payment of a coupon (4.6% per year) payable until the date on which the “Put
Option” is exercised.
d) The Entity has the possibility of settling the obligation through the exchange of shares or
cash.
24.EARNINGS PER SHARE
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, 2022, 2021 and 2020, the Entity has no potentially dilutive
shares, for which reason diluted earnings per share is equal to basic earnings per share.
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The following table contains data on income and shares used in calculating basic and diluted
earnings per share:
27. OTHER OPERATING EXPENSES
Other operating expenses included in the consolidated statements of income are as follows:
Net profit (in thousands of Mexican pesos):
Attributable to shareholders
Shares (in thousands of shares):
Weighted average of shares outstanding
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)
$
$
2022
2021
2020
$
1,706,389 $
835,129 $ (3,235,574)
838,579
838,579
838,579
2.03 $
1.00 $
(3.86)
2.03 $
1.00 $
(3.86)
Commission aggregators
Fees
Insurance
Taxes and rights
Occupancy expenses
Other expenses
$
2022
2021
882,896 $
224,867
839,412
769,449
156,472
1,975,155
566,550 $
196,234
164,654
(549,187)
59,589
2,062,214
2020
397,682
150,325
133,452
(811,614)
25,716
594,516
Total
$
4,848,251 $
2,500,054 $
490,077
25. REVENUES
Revenues from the sale of goods
Services
Royalties
2022
2021
2020
$ 66,865,480 $
1,240,480
725,345
52,009,161 $
804,878
565,430
37,403,800
676,154
415,466
Total
$
68,831,305 $
53,379,469 $
38,495,420
28. BALANCES AND TRANSACTIONS WITH RELATED PARTIES
OFFICER COMPENSATIONS AND BENEFITS
The total amount of compensation paid by the Entity to its directors and principal officers for
the fiscal year ended December 31, 2022, 2021 and 2020 was approximately $160,217, $127,716,
$137,839, respectively.
This amount includes emoluments determined by the General Assembly of Shareholders of the
Entity for the performance of their positions during said year, as well as salaries and salaries.
For the year ended December 31, 2021, operating income increased 28% compared to the year ended December
31, 2020, primarily driven by the effects of the COVID-19 pandemic.
The Entity continually reviews salaries, bonuses and other compensation plans in order to offer
its employees competitive compensation conditions.
26. COST OF SALES
29. FINANCIAL INFORMATION BY SEGMENTS
The costs and expenses included in other operating costs and expenses in the consolidated
statements of income are as follows:
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.
Food and beverage of costs
Royalties of costs
Other costs
2022
2021
2020
$
20,379,321 $
138,774
442,544
14,985,941 $
121,368
483,965
10,873,059
96,524
485,301
Total
$ 20,960,639 $
15,591,274 $
11,454,884
The accounting policies of the segments are the same as those of the Entity's described in Note 4.
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 (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.
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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.
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, 2022, 2021 and 2020 is as follows:
(figures in millions of pesos).
Figures in millions of pesos as of December 31, division:
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
Food and beverages
Mexico
Food and beverages
LATAM
Food and beverages
Europe
Consolidated
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
$
33,468 $
26,015 $
19,067 $
13,388 $
8,950 $
5,568 $
21,975 $
18,414 $
13,861 $
68,831 $
53,379 $
12,017
11,064
10,387
3,579
2,363
4,445
9,160
8,723
8,132
3,395
1,911
2,826
6,018
8,263
4,786
3,616
820
350
4,503
5,801
3,084
1002
1,086
996
3,033
3,800
2,117
1,157
373
587
1,954
2,749
865
1,015
283
(433)
5,992
10,536
5,447
3,121
1,399
927
4,560
7,947
5,907
3,627
1,561
719
4,518
6,830
2,513
3,804
143
(1,434)
22,512
27,401
18,918
7,702
4,848
6,368
3,940
(363)
237
3,814
-
906
1,648
(59)
16,753
20,511
16,115
8,179
3,804
4,132
3,508
(142)
(231)
3,135
2
215
784
(51)
2020
38,496
12,490
17,399
8,164
8,435
1,246
(1,517)
3,226
(119)
468
3,574
(3)
(1,199)
(3,895)
(659)
$
1,707 $
835 $
(3,236)
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Assets
$
28,564 $
48,707 $
49,960 $
9,901 $
7,705 $
6,570 $
35,620 $
23,991 $
25,044 $
74,084 $
80,404 $
Food and beverages
Mexico
Food and beverages
LATAM
Food and beverages
Europe
Consolidated
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
Investment in productive assets
Investment in associates
Investment in Fixed Assets and Intangible
Total assets
Total liability
$
$
157
1,892
(745)
1,425
(435)
747
-
962
877
192
525
243
-
1,519
-
825
-
784
157
4,373
132
2,442
30,456 $
49,387 $
50,272 $
10,863 $
8,774 $
7,338 $
37,139 $
24,816 $
25,828 $
78,457 $
82,978 $
83,438
35,741 $
46,512 $
48,203 $
4,745 $
4,682 $
3,792 $
29,141 $
23,110 $
23,809 $
69,628 $
74,303 $
75,804
2020
81,574
90
1,774
30. FOREIGN CURRENCY POSITION
Assets and liabilities expressed in US dollars, shown in the reporting currency at December 31, 2022, 2021 and 2020,
are as follows:
Assets
Liabilities
Net monetary liability position
Thousands of
Mexican pesos
2022
Thousands of
Mexican pesos
2021
Thousands of
Mexican pesos
2020
5,631,500 $
5,566,171 $
(28,071,938)
(19,394,119)
4,028,843
(19,872,347)
(22,440,438) $
(13,827,948) $
(15,843,504)
$
$
Country of origin 2021
Argentina
Chile
Colombia
Spain
Country of origin 2020
Argentina
Chile
Colombia
Spain
Currency
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
Currency
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
Closing
exchange rate
0.1997
0.0241
0.0050
23.3264
Closing
exchange rate
0.5192
0.0283
0.0061
22.5340
The exchange rate to the US dollar at December 31, 2022, 2021 and 2020 was $20.51, $19.91 and $18.87, respectively.
At April 26, 2023, date of issuance of the consolidated financial statements, the exchange rate was $18.0892 to the
US dollar.
The exchange rates used in the different conversions to the reporting currency at December 31, 2022, 2021 and 2020
and at the date of issuance of these consolidated financial statements are shown below:
Country of origin 2022
Argentina
Chile
Colombia
Spain
Currency
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
Closing
exchange rate
Issuance
April 26, 2023
0.1099
0.0227
0.0040
20.7810
0.08202
0.0225
0.0039
19.9975
In converting the figures, the Entity used the following exchange rates:
Foreign transaction
Fast Food Sudamericana, S.A.
Starbucks Coffee 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.
Country
of origin
Argentina
Argentina
Chile
Chile
Colombia
Colombia
Colombia
Spain
Currency
Recording
Functional
Presentation
ARP
ARP
CLP
CLP
COP
COP
COP
EUR
ARP
ARP
CLP
CLP
COP
COP
COP
EUR
MXP
MXP
MXP
MXP
MXP
MXP
MXP
MXP
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31. COMMITMENTS AND CONTINGENT LIABILITIES
COMMITMENTS:
a) 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 20).
b) The Entity has acquired several commitments with respect to the arrangements established in
the agreements for purchase of the brands.
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.
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.
c) 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.
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.
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 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.
Alsea and its external lawyers consider that there is sufficient evidence to demonstrate that the
assessments made by the tax authorities are inadmissible and to demonstrate that Alsea has
complied in a timely manner with its tax obligations with respect to the aforementioned sale
transaction; for this reason, on March 23, 2020, an Administrative Appeal was filed with the
tax authorities, which is under review. No provision is being created in this regard.
Appeals for revocation have been filed with the tax authorities, which are still pending resolution,
and in order to carry out an adequate assessment of all the elements that are available to
prove the inadmissibility of the indicated settlements. By decision issued on 15 June 2022, the
Specialised Chamber for Exclusive Resolution on the Merits admitted the application for annulment
under file number 57/22-ERF-01-7 and granted the outright suspension of the execution of the
contested resolutions, including the order to unblock the company's bank accounts due to the
seizure carried out by the collecting authority. Subsequently, the defendant authorities replied
to the complaint and expanded the questionnaire of the expert evidence on valuation offered by
the company. This expert evidence is duly integrated since the experts of the parties rendered
their opinions and the respective extensions.
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We are currently waiting for the litigation fixation hearing to be held, which is scheduled for April
25, 2023 for resolution, and in case of not obtaining a favorable response, the legal defense of
the resolutions issued will continue.
The accounting framework under which the transaction was recorded was in accordance with
IFRS and in particular in International Financial Reporting Standards 10 (IFRS 10) Consolidated
Financial Statements, which establish that, in a business combination, the capital gain that is
part of the carrying amount of an investment of a subsidiary is not recognized separately, that
is, the goodwill generated by the acquisition of Vips must be presented in conjunction with the
equity investment in OARM's individual financial statements, as it does not meet the definition
of a separate asset in the individual financial statements.
In Alsea's separate financial statements, the acquisition of the VIPS Mark relates solely to the
acquisition of the intellectual property of the VIPS Mark.
Alsea applied the accounting or purchase method mentioned in IFRS 3, Business combination,
which is only applicable in the consolidated financial statements of the acquiring entity, in the
application of this method the assets and liabilities that are acquired in the purchase of the
business including the identified intangible assets of the acquired entity were recognized, The
assets and liabilities under the above terms are compared with the consideration paid and the
difference between these values is recorded at the consolidated level as a capital gain.
Purchase accounting as mentioned above, is a special accounting, relative adjustments are
recognized only in the consolidated financial statements, they are not recognized in the financial
statements of the acquired company, nor in the separate financial statements of the acquirer.
32. SUBSEQUENT EVENTS
a. In February 2023, the Entity announced that at the Ordinary and Extraordinary General
Shareholders' Meeting held on January 27, 2023, was agreed to cancel 18,579,079 ordinary
shares repurchased in the market for an amount equivalent to 2.2% of the total outstanding
shares.
b. On April 19, 2023, the Entity announced the signing of a contract with Starbucks to operate and
develop Starbucks branded stores in Paraguay.
33. AUTHORIZATION OF CONSOLIDATED FINANCIAL STATEMENT
The consolidated financial statements were authorized for issuance on April 26, 2023, by Mr.
Rafael Contreras Grosskelwing, Director of Administration and Finance, consequently they do
not reflect the events that occurred after that date, and are subject to the approval of the audit
committee and the ordinary shareholders' meeting of the Entity, who can decide to modify it in
accordance with the provisions of the General Law of Commercial Companies.
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INDEPENDENT PRACTITIONER’S LIMITED
ASSURANCE REPORT FOR SELECTED
SUSTAINABILITY INFORMATION OF
FUNDACIÓN ALSEA, A. C.
INFORMATION SUBJECT TO THE ASSURANCE ENGAGEMENT
We have been engaged by Fundación Alsea, A. C. ("Fundación Alsea" or "Entity") to perform a limited
assurance engagement on selected sustainability information included in the Integrated Annual Report
2022 for the year ended December 31, 2022.
Our work was performed by an independent, multidisciplinary team, including assurance practitioners
and sustainability specialists.
Our limited assurance engagement was performed solely in respect of the selected sustainability
information included in Appendix A. Our assurance report does not extend to information from
previous periods or other information included in the Integrated Annual Report 2022, including other
information related to such report that may contain images, audio or videos.
CRITERIA USED FOR THE PREPARATION OF THE INFORMATION SUBJECT TO THE ASSURANCE
ENGAGEMENT (“CRITERIA”)
The selected sustainability information included in Appendix A has been prepared and presented in
accordance with the internal guidelines of Fundación Alsea, A. C. based on the following concepts:
Number of direct beneficiaries: represents the number of people provided with food assistance in
the period from January 1, 2022 to December 31, 2022.
Number of meals served: represents the number of meals served during the period from January
1, 2022 to December 31, 2022.
FUNDACIÓN ALSEA RESPONSIBILITY FOR SELECTED SUSTAINABILITY INFORMATION
Fundación Alsea is responsible for the preparation of the selected sustainability information in accordance
with internal guidelines. This responsibility includes the design, implementation and execution of internal
controls over the relevant information for the preparation of the selected information that is free from
material misstatement, whether due to fraud or error.
INHERENT LIMITATIONS TO THE ASSURANCE ENGAGEMENT
Selected sustainability information is subject to inherent uncertainty due to the use of non-financial
information, which is subject to greater inherent limitations than financial information, given the nature of
the methods used to determine, calculate, sample, or estimate such information. In preparing the
selected information, the Entity makes qualitative interpretations about the relevance, materiality and
accuracy of the information that are subject to assumptions and judgments.
OUR INDEPENDENCE AND QUALITY CONTROL
We have complied with the independence and ethical requirements of the Code of Ethics for Public
Accountants issued by the International Ethics Standard Board for Accountants (IESBA), which is
founded on fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality, and professional behavior.
The Firm applies International Standard on Quality Management 1 (ISQM 1) and, accordingly maintains
a comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
OUR RESPONSIBILITY
Nuestra responsabilidad es expresar una conclusión de aseguramiento limitado sobre la información
seleccionada de sostenibilidad por el año terminado el 31 de diciembre de 2022, con base en los
procedimientos que hemos efectuado y la evidencia que hemos obtenido. Llevamos a cabo nuestro
compromiso de aseguramiento limitado de acuerdo con el Estándar Internacional para Encargos de
Aseguramiento 3000, trabajos de aseguramiento, diferentes de auditorías o revisiones de información
financiera histórica (“ISAE 3000”) emitido por el International Auditing and Assurance Standards Board
(IAASB). Este estándar requiere la planeación y realización del compromiso para obtener la seguridad
limitada acerca de si la información seleccionada está libre de errores materiales.
A limited assurance engagement undertaken in accordance with ISAE 3000 involves assessing the
suitability in the circumstances of Fundación Alsea’s use of methodologies in accordance with "internal
guidelines" as the basis for the preparation of the selected sustainability information, assessing the
risks of material misstatement of the selected sustainability information whether due to fraud or
error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall
presentation of the selected sustainability information. A limited assurance engagement is substantially
less in scope than a reasonable assurance engagement in relation to both the risk assessment
procedures, including an understanding of internal control, and the procedures performed in response
to the assessed risks.
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The procedures we performed were based on our professional judgment and included inquiries,
observation of processes performed, inspection of documents, analytical procedures, evaluation of
the appropriateness of quantification methods, and agreeing or reconciling with underlying records.
RESTRICTION ON USE AND DISTRIBUTION
Our report is intended solely for the management of Fundación Alsea, A. C., in accordance with the
terms of our engagement letter and should not be used by, or distributed to, any other party.
Given the circumstances of the engagement, in performing the procedures listed above, we:
• Performed inquiries, through which we obtained an understanding of the Entity’s internal policies
related to the selected sustainability information.
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Member of Deloitte Touche Tohmatsu Limited
• Performed inquiries, through which we obtained an understanding of Fundación Alsea´s control
environment and information systems relevant to the preparation of selected sustainability
information but did not evaluate the design of particular control activities, obtain evidence about
their implementation or test operating effectiveness.
.• Evaluated whether Fundación Alsea´s methods for developing estimates are appropriate and
had been consistently applied in the preparation of the selected sustainability information.
.• Performed substantive tests on the selected sustainability information referred in this report,
to corroborate that the data has been adequately measured, recorded, compiled, and reported
through:
C.P.C. David Alejandro Solano Zúñiga
Mexico City, Mexico
September 12, 2023
• Inspection;
• Observation;
• Inquiry;
The procedures performed in a limited assurance engagement vary in nature and opportunity from, and
are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance
obtained in a limited assurance engagement is substantially lower than the assurance that would have
been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express
a reasonable assurance opinion about whether Fundación Alsea's selected sustainability information
has been prepared, in all material respects, in accordance with the internal guidelines of its indicators.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited
assurance conclusion.
LIMITED ASSURANCE CONCLUSION
Based on the procedures performed and the evidence obtained, nothing has come to our attention
that causes us to believe that the selected sustainability information for the year ended December 31,
2022, was not prepared, in all material aspects, in accordance with the Criteria section of this report.
Number of meals served
APPENDIX A
The following are the internal indicators subject to limited assurance defined by the management of
Fundación Alsea.
Description
Number of direct beneficiaries
Metrics
The number of direct beneficiaries assured, by organization, is
as follows:
Huellas de Pan A.C.: 218 direct beneficiaries.
Asociación Mexicana de Bancos de Alimentos A.C.:2,359,697
direct beneficiaries.
Comedor Santa Maria A.C.: 3,157 direct beneficiaries.
Save The Children México A.C.: 1,094 direct beneficiaries.
Restauración Salud Y Prosperidad A.C.: 2,366 direct
beneficiaries.
The number of meals served assured, by organization, is as
follows:
Huellas de Pan A.C.: 43,384 meals served.
Fondo para la Paz, IAP: 17,254 meals served.
Comedor Santa Maria A.C.: 847,555 meals served.
Restauración Salud Y Prosperidad A.C.: 26,221 meals served.
for
investors
External AuditorsDeloitteGalaz, Yamazaki, Ruiz Urquiza, S.C.Av. Paseo de la Reforma 4896th Floor, Col. CuauhtémocMexico City, Zip Code 06500+52(55) 5080-6000CORPORATE OFFICESAlsea, S.A.B. de C.V.Avenida Revolución N° 1267,Torre Corporativa, Floor 21,Colonia Los Alpes, Álvaro Obregón,Zip Code 01040+52(55) 7583 2000FinanceRafael ContrerasChief Finance Officer+52(55) 7583 2000Investor RelationsNicolás Espinoza Menesesri@alsea.com.mx+52(55) 7583 2000Corporate AffairsValeria Oslon Fernándezrp@alsea.com.mx+52(55) 7583 2000www.alsea.net