passionT O
serve is...
Integrated
Report
T O
serve is…
passion
delivering
OUTSTANDING
results
Content
We are Alsea
Outstanding Results in 2023
Messages
Global Sustainability Management
Ethics and Transparency
Corporate Governance
Growth
Development
Balance
Sustainability Indicators
Financial Information
Information for Investors
07
11
13
19
25
30
36
50
79
87
93
158
About
this report
GRI 2-3, 2-4, 2-5
We are pleased to share our latest integrated
annual report with you, highlighting
Alsea’s progress and achievements in
economic, social, environmental and
corporate governance matters based on the
sustainability strategy we applied between
January 1 and December 31, 2023.
We prepared this report under GRI
(Global Reporting Initiative) standards,
the Sus t ainabilit y Accounting
Standards Board (SASB) sustaina-
bility framework and the UN Global
Compact’s Sustainable Development
Goals. During the period mentioned
above, the company did not report any
significant changes or restatements of
information in our coverage or supply
chain.
An independent third party verifies
our financial information. The audit
process applied to our consolidated
financial statements can be found in
the middle of our reports under the
investors’ section at alsea.net.
We invite you to read the corporate
policies and strategies mentioned in
this report under Corporate Gover-
nance, Sustainability and Corporate
Integrity at alsea.net.
Please send your comments, questions
or suggestions about this document to
rp@alsea.com.mx.
We are Alsea
GRI 2-1, 2-6
We are the leading restaurant operator in Latin
America and Europe, with globally recognized brands
in the Quick service restaurants, Coffee shops and
Full service restaurants segments.
3
Segments
13
Brands
QUICK SERVICE
RESTAURANTS
COFFEE
SHOPS
FULL SERVICE
RESTAURANTS
7
ALSEA AR 2023 12
Countries
4,622
Units
Portugal
27
Mexico
2,313
Argentina
250
Spain
1,122
Luxembourg
4
Netherlands
101
We operate more than 4,622 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.
France
245
Paraguay
3
Belgium
35
Chile
248
Colombia
255
Uruguay
19
8
ALSEA AR 2023 Our
purpose
To bring happiness and
experiences full of flavor is
a commitment everyone at
Alsea embodies daily. It means
thinking about our customers
to ensure every moment is
an unparalleled experience,
spreading our Passion to Serve
and doing everything we can to
impact our planet positively.
Our purpose is based on four princi-
ples that inspire us and make us
unique in what we enjoy the most:
making our customers happy.
Delivery: We give our best, always
putting our heart into everything
we do. We value every interaction
with our customers in each store
and when delivering products to
their homes.
Happiness: In a business like
ours, happiness is experienced in
every detail, from the first contact
through a smile, making guests feel
welcome and calling by their name.
Experiences: We truly connect
with our customers, bringing
unique moments and making
them feel special.
Flavor: Seasoning runs
through our veins. We love
to spice up people’s lives
and fill them with delicious
memories, always leaving a
great taste in their mouths.
9
ALSEA AR 2023 Our philosophy
Demonstrate a
passion for excellence,
to achieve even
higher goals.
We make every
moment unique
to offer
unparalleled
experiences.
10
ALSEA AR 2023 Outstanding
results1
GRI: 201-1
Sales
'21
'22
'23
EBITDA
'21
'22
'23
$8,027
Operating
income
$3,042
Consolidated
net profit
35.2%
ROE4
14.0%
ROIC3
$53,379
$68,831
$76,231
$12,311
$14,070
$16,216
Results
Net sales
Gross profit
Operating income
EBITDA2
Consolidated Net Income
Balance
Total Assets
Cash
Liabilty Costs
Majority Shareholders’ Equity
Profitability
ROIC3
ROE4
Share information
Price
Earnings Per Share
Dividend
Book Value Per Share
Operation
Total Number of Units
Collaborators
CAGR
2019-
20235
6%
5%
12%
5%
23%
%
2022
Annual
Growth
2023
%
10.8% $76,231
100% $68,831 100%
11.0% $53,130 69.7% $47,871 69.5%
9.3%
26.0% $8,027 10.5% $6,368
15.3% $16,216 21.3% $14,070 20.4%
2.4%
81.1% $3,042
4.0% $1,679
(1.9%) $77,434
5.3% $6,410
(6.0%) $26,120
3.7% $8,656
360 pbs
1720 pbs
14.0%
35.2%
74.1% $64.16
76.8% $3.66
N.A.
-
7.6% $10.34
6%
1%
3.9% 4,622
0.4% 71,003
$78,923
$6,087
$27,789
$8,344
10.4%
18.0%
$ 36 . 86
$2.07
-
$9.61
4,447
75,740
1 The figures are expressed in millions of nominal pesos and under IFRS standards (including IFRS 16 effects and the effect of
applying the restatement approach to hyperinflation in Argentina), except for the information per share and the number of
units and collaborators.
2 EBITDA is defined as operating income before depreciation and amortization.
3 ROIC is defined as operating income after taxes divided by net operating investment (total assets-cash and temporary
investments-non-interest-bearing liabilities).
4 ROE is defined as net profit divided by shareholders’ equity.
5 CAGR stands for Compound Annual Growth Rate from 2019 to 2023.
11
ALSEA AR 2023 Highlights 2023
460
Millions of
customers served
257
Gross store
openings
4,622
Units
+2.2
Million of meals
delivered to vulnerable
populations
2,470,718
Fundación Alsea,
A.C. beneficiaries
12
ALSEA AR 2023 GRI 2-22, 2-23
To the General Assembly of Shareholders
of Alsea, S.A.B. de C.V. and
our different
Stakeholders,
I am pleased and proud to share our 2023
Integrated Annual Report with you.
Passion to serve reflects who we are as
the result of a continuous transformation
process to materialize our strategy focused
on what is most important: keeping our
customers happy in a global economy.
They are the source of inspiration that encourages us
to identify their needs by getting to know them better
every day. They inspire our creativity to design products
that respond to the demands of a market with very
diverse lifestyles as we face the challenge of presenting
a differentiating value proposition. They are also the
driving force that ensures our perseverance in creating
and implementing efficient processes focused on
profitability and productivity, promoting sustainability
with the highest quality standards.
For this, our main asset is our collaborators, numbering
over 70,000 worldwide. They strengthen our company’s
culture and, with their dedication, contribute to its
business strategies and operations. The Board of
Directors provides and promotes programs and initiatives
that nurture their development and training so each
can reach their maximum potential, ensuring that they
have the right tools to do their best job. We acknowledge
their efforts with competitive compensation plans, career
paths, and opportunities to work and develop in our
different departments and for our different brands.
13
ALSEA AR 2023 At Alsea, we reaffirm our commitment to adhere to the Code of
Best Corporate Practices. Through our Board of Directors and
its governing bodies, we ensure compliance with the highest
standards of Corporate Governance to promote greater security
and trust among you, our Shareholders.
In 2023, we enjoyed a year of significant achievements aligned with
our strategy. Thanks to our focus on our customer’s experience,
our committed team of collaborators, and our passion for quality
and service, we continued to generate significant benefits for our
stakeholders and reiterate our leadership as the best restaurant
operator in Latin America and Europe.
In this 2023 Annual Report, we share our financial, social and
environmental results and everything that allows us to evolve our
business to a level of excellence. During the year, we continued to
strengthen our Corporate Governance to become an increasingly
institutional Company focused on the need for growth demanded
by our environment. We made certain adjustments to our Board of
Directors, which now enjoys the valuable participation of Gabriela
Garza and Christine Kenna.
In 2023, we attained significant recognition as we reaffirmed our
presence on the S&P/BMV Total Mexico ESG Index. We were listed
on the Dow Jones Sustainability Index MILA for the sixth year in
a row and received a Corporate Social Responsibility Award for
the twelfth year running. We also reaffirmed our commitment to
the UN Global Compact and its Principles, which guide our steps
to contribute to a world that closes social gaps and promotes
equity, equality and the generation of development opportunities
for our communities.
At Alsea, we reiterate our commitment to being a role model in
sustainability, promoting policies, initiatives, and actions that
generate positive impacts for all those with whom we develop
and collaborate and for our planet’s well-being.
I thank each of our customers for their loyalty
and preference and to our collaborators for their
commitment, enthusiasm, and professionalism
that allow us to bring the Alsea culture to all the
geographies in which we have presence to make
our purpose come true: to bring happiness and
experience full of flavor.
Alberto Torrado Martínez
Chairman of the Board
14
ALSEA AR 2023 GRI 2-22, 2-23
Dear
Friends,
I want to share with you that I am very proud of
our performance and achievements in 2023, which
are in line with our strategic plan, and confirm
that our Passion to serve is the key to consolidate
Alsea’s leadership.
15
ALSEA AR 2023 +10.8%
total sales
vs. 2022
+14.7%
same store sales
vs. 2022
Sales through our home delivery
segment grew 4.2% to MXN 12,798
million from more than 48.8 million
orders, representing a 17.1% share in
Alsea’s consolidated sales.
During the year, we invested MXN
4.740 billion, allocating MXN 3.903
billion, equal to 82.3%, to open 184
units, renovate and remodel units of
our different brands, and replace
equipment. We remain firm in our
expansion strategy to take advantage
of market opportunities with our
leading brands by opening new units
in the locations and geographies with
the greatest potential for profitability.
2023 was a year in which we obtained
extraordinary results. Our total sales
increased 10.8% compared to 2022 to
reach MXN 76.2 billion. Our Same
Store Sales registered 14.7% growth,
and EBITDA stood at MXN 16.2 billion,
15.3% above last year. These results
reflect the effectiveness of our
operational strategy, the recovery of
consumer trends, the successful
implementation of digital innova-
tions and the development of new
products.
Our digital strategy continues to be
essential to attracting and retaining
new customers. One of our major
achievements this year was passing
the 1.8 million member mark in our
Starbucks Rewards program while
reaching almost one million Club By
members in Spain in less than three
months of operation. We know the
growth potential that digital platforms
and selective marketing represent, so
we will continue to strengthen our
digital transformation project.
During the year, our more than 70,000
collaborators served more than 460
million customers in the 12 countries
where we operate through the 3
business segments we serve, with
the passion and heart that distingui-
shes us to preserve the preference
for our brands. Last year, we also
broke our turnover record with a 65%
rate compared to the 71% reported
the previous year. In addition, our
internal Global Engagement Index
scored 4.19 out of 5.
Our coffee shop segment continues
its expansion process focused on
strategic locations and the develop-
ment of new products. This year, we
certified 16 Starbucks stores in our
Greener Stores program, bringing the
total number of stores in Latin
America to 85. We also focused on
digital innovation in the fast food
segment to optimize and improve our
service level. At our full-service
restaurants, we continued to improve
our value proposition to leverage
positive traffic trends and increase
customer visit frequency.
16
ALSEA AR 2023 After Hurricane Otis, It’s on Me
partnered with World Vision Mexico
to donate MXN 3 million to help over
10,000 people, providing significant
support to communities affected by
the hurricane in Guerrero.
$54
Millions of pesos
raised by
It's on me
+8,000
Beneficiaries
25
Food kitchens
One key factor in Alsea’s leadership
has been integrating an efficient
supply chain that represents a compe-
titive advantage for our brands. This
service network operates under the
highest standards of food safety and
security quality, exceeding the requi-
rements established by our strategic
partners worldwide.
Within the framework of our sustaina-
bility exercise, we decided to reinforce
the existing process and complete a
Double Materiality analysis to obtain
a clearer and more precise vision of
the relationship we have with our
environment and help us prioritize
our material topics to allocate time,
resources and investments in the
initiatives that generate a greater
impact and respond, to a greater
extent, to our stakeholder’s concerns
and the challenges we face in protec-
ting the planet.
For the second consecutive year, we
presented the “Alsea Award” through
the Alsea Foundation, A.C., and with
the support of World Vision Mexico
to promote innovative original or
in-progress food and nutrition
research projects. The Center for
Advanced Nutrition and Food
Studies (CESNUTRAL) at CES Univer-
sity in Colombia selected the winning
project. This recognition reflects our
commitment to joining efforts to
face the most important global food
challenges.
Our annual It’s on Me fundraising
campaign, backed by Fundación
Alsea, A.C., raised MXN 54 million to
provide meals for over 8,000 people
in 25 food kitchens every day. We also
expanded our efforts to help more
than two million individuals with
financial and in-kind donations.
17
ALSEA AR 2023 As we reflect on the successes achieved this year and look to Alsea’s future, I
want to recognize our management team’s leadership in taking our strategic
plans to all levels across the company and positively impacting our 4,622
units. I also want to acknowledge the commitment of our more than 70,000
collaborators for their efforts and dedication to exceeding our customers’
expectations, making each experience an unforgettable moment and fulfilling
our purpose of bringing happiness and experiences full of flavor. Thanks also to
our shareholders for your participation in Alsea’s success and your trust in us,
which feeds and increases our Passion to serve every day!
Armando Torrado Martínez
CEO of Alsea
18
ALSEA AR 2023
Global
Sustainability
Management
To bring happiness and experiences full of
flavor means integrating sustainability into
everything we do and strengthening our
corporate best practices.
We are not alone on this path to fulfilling our commit-
ments. We created a Global Sustainability Management
structure by working hand in hand with our stakeholders
and being guided by our Board of Directors to ensure that
our initiatives are known and executed at all levels across
the company.
From the creation of sustainability policies and objec-
tives to the implementation, measurement and reporting
processes, our team members work with passion to execute
initiatives related to specific priority topics organized
under three levels as follows:
• Governance Level
• Strategic Level
• Operational Level
• Commissions and priority topics
Governance level
Comprised of our Board of Directors, it defines
our global strategy and oversees compliance
with our initiatives.
Strategic level
It operates on a regional level to identify
environmental and stakeholder needs,
proposing initiatives in response to their
social, environmental, economic and
business ethics concerns.
Operational
level
Four local committees support the execution of initiatives
related to specific priority topics.
Responsible Consumption
• Nutritional communications
• Food safety and health
• Sustainable consumption
• Sustainable sourcing
• Food waste
Quality of Life
• Job security
• Health and well-being to boost
productivity
• Diverse and inclusive culture
• Financial well-being
Environmental
• Energy
• Water
• Supplies
• Waste
Community Development
• Fight hunger
• Education and employability
• Culture
19
ALSEA AR 2023
D
L
O
A R E H
H
S
Talent
management
Community
and
philanthropy
•
S
R
E
C O L L A BORATORS • C
U
Diversity, equity
& inclusion
Climate
Strategy
S
T
O
M
E
R
S
PM E N
T
BA
L
A
N
C
E
Energy and
emissions
O
L
E
V
E
D
We bring
happiness &
experiences full
of flavor
S
U
P
P
Responsible
sourcing
GROWTH
L
I
E
R
S
•
M
E
Food
waste
Food
quality
and safety
Consumers'
well-being
and nutrition
D
I
A • INSTITUTI O N S • C O M M U
T
N
E
M
N
R
E
V
O
Y • G
N I T
Sustainability Model
Our model represents Alsea’s key commitments to Sustainability.
It is built on three pillars to respond to the economic (growth),
social (development) and environmental (balance) aspects of
our operation, based on our Corporate Governance and in close
communication with our stalkeholders.
Development
Growth
It addresses aspects related to the
development and well-being of our
collaborators in an equitable, inclusive,
diverse and safe work environment that
gives them the flexibility they need to
balance their personal and professional
lives. Additionally, it focuses on ensuring
the food security of vulnerable popula-
tion and encourage community develo-
pment through programs that promote
access to education and employability.
It focuses on the operational aspects of
directing leading brands, providing excep-
tional service and premium products with
support from an exemplary industry supply
chain, and managing our commitment to
offering menus adapting to different lifes-
tyles. It also covers labeling practices,
responsible advertising and communica-
tions, technological innovation and initia-
tives to manage food waste responsibly.
Balance
It encompasses actions aimed at caring for
our environment by efficiently managing
natural resources, such as energy, water,
emissions, supplies, and waste manage-
ment and disposal.
20
ALSEA AR 2023
Global Integrated
Materiality Matrix
+
GRI 3-1, 3-2, 3-3
The priority aspects identif ied
through the global materiality study
we conducted in 2022 led us to
establish the strategies and initia-
tives we have worked on for the last
two years.
During our implementation processes,
we work under domestic and inter-
national benchmark standards,
adapting them to the requirements
of the different geographies where
we have presence.
We will conduct our next double-ma-
teriality study in 2024.
e
v
i
t
c
e
p
s
r
e
P
r
e
d
l
o
h
e
k
a
t
S
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
14
7
15
8
1
26
32
24
5
17
11
29
23
20
34
33
22
12
21
9
25
18
19
35
2
31
13
28
16
30
6
3
10
27
4
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 impact
and financial
issues
Material topics
Material financial
issues
Impact material
topics
Potential material
topics (short term)
Non-material
topics
Talent attraction and retention
Customer and consumer satisfaction
Material Topics (14)
1
8
7 Brand reputation
Legal compliance
15
Food safety and quality
28
Sociopolitical risk management
16
Economic performance
6
3 Organizational culture and climate
10 Digital transformation
27
4
2 Diversity, equity & inclusion
Corporate governance
14
Energy and emissions
30
Customer and consumer health and safety
Employee training
Ethics and integrity
Product innovation
Communication and transparency
Employee health, safety and well-being
Potentially material topics (16)
31 Waste management and circular processes
13
11
17
5
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
29 Water
23
12 Human rights
33 Contribution to local food security
9 Data privacy and cybersecurityTemas no materiales (5)
Investment and social commitment
Food waste
Non-material topics (5)
22 Responsible sourcing of raw materials
18
25
19
35 Comprehensive development of farmers and agricultural
Stakeholder relations
Inclusive selling practices
Fair competition practices
producers
21
ALSEA AR 2023
Stakeholder Relations
GRI 2-29
Being close to our stakeholders allows us to
understand their concerns through an open
and constant dialogue based on trust and
transparency. Our relations plan includes
the following phases:
Identification
We analyze and classify
Alsea’s most relevant
stakeholders according to
their needs, concerns and
expectations.
Channels and Objectives
We define our relationship
objectives and develop
strategies to achieve
them by creating specific
communication channels
for each group, parti-
cipation programs and
the means required to
establish our relationship.
Implementation
We execute the actions
established in our strate-
gies to stay in touch,
including networking
events, information
sessions, and satisfac-
tion surveys, among other
activities.
Assessment
We regularly monitor our
engagement activities to
measure their effective-
ness and make the adjust-
ments required through
feedback, key metric
analytics, and a review of
the plan’s objectives.
Periodicity
Permanently
Monthly
Quarterly
Eventually
Annual Report
Governance
Correct Line
Email and website
Participation in
events
Reports
Meetings
Phone calls
Official press
releases
Annual report
Community
Website
Social media
Evaluation visits
Participatory
diagnoses
Forums
Events
Annual report
Suppliers
Media
Partners and Investors
Customers
Correct Line
Email and website
Monthly newsletter
Visits
Phone calls
Annual report
Correct Line
Press releases
Email and website
Forums and events
Annual report
Email and website
Phone calls
Meetings
Relevant releases
Shareholders meeting
Results report
Conferences
Annual report
Investor Day
Correct Line
Email and website
Social media
Mass media
Restaurant
communication plan
Marketing campaigns
Apps
Loyalty programs
Bulletin
Annual report
Collaborators
Correct Line
Email and website
Workplace
Screens
Communication boards
Internal communications
Bulletin
Announcements
Events and conventions
Annual report
22
ALSEA AR 2023 Our contribution
to sustainability
Our activities allow us to contribute
directly to facing global sustainability
challenges, such as those described
in the United Nations Sustainable
Development Goals.
By joining this initiative, we reaffirm
our commitment to adhering to the
fundamental principles and actively
promote business practices that
inspire the stakeholders with whom
we interact.
Some of our main initiatives created to
support the SDGs are as follows.
Food donations
Food waste management
Community kitchens
Promoting healthy
habits
Anti-harassment
protocols
Development of women in
leadership positions
Timed faucets
Dual flush cisterns
Water towers
Solar panel project in
stores in South America
and production centers
and units in Europe
Employment generation
Social employability
and training projects
People management
model
Waste management
project
Food waste management
Digital employment
channels
Process and task digiti-
zation
Social employability
and education projects
Global environmental
policy
Strategic partnerships
with associations and
foundations
23
ALSEA AR 2023 Recognitions, certificates
and sustainability
initiatives
At Alsea, the recognition we obtain for
our work results from the passion and
commitment of all our collaborators,
which inspires us to continue working
under the best industry standards.
These recognitions guide us in applying social,
economic and environmental best practices, reaffir-
ming our commitment to excellence in everything we
do to exceed our customers’ expectations every time
we interact with them.
UN Global Compact
In 2011, we joined the most important
corporate sustainability initiative, the
United Nations Global Compact. This
accession represents our adoption of
ten universal principles related to the
defense of human rights, labor
standards, the environment and the
fight against corruption.
Corporate Social
Responsibility Award
Since 2012, the Mexican Center of
Philanthropy (CEMEFI, acronym in
Spanish) has given us this distinc-
tion, highlighting our performance in
five pillars of sustainability: Quality of
life, environment, ethics, community
engagement, and corporate social
responsibility.
S&P/BMV Total Mexico ESG Index
We have been listed on the Standard
& Poor’s Index (S&P/BMV Total Mexico
ESG Index) since 2013. This index is
designed to promote and disclose to
the Mexican market the performance
of companies that meet sustainabi-
lity criteria.
Dow Jones Sustainability
Index MILA
Since 2018, Alsea has been listed on the
Dow Jones Sustainability Index (DJSI) in
the Latin American Integrated Market
(MILA), a reference index measuring
listed companies’ sustainability perfor-
mance. For Alsea, belonging to this
index means being recognized for its
risks and opportunity identification on
economic, social and environmental
spheres and for creating value for all
our stakeholders.
24
ALSEA AR 2023 Ethics and
transparency
GRI: 2-22, 2-23, 2-24
We live our values and ethical principles in
each decision, always striving to promote
respect, integrity and transparency in all our
relationships.
Our Code of Ethics is the ideology that guides our decisions
with a focus on respect and transparency. We share its
principles with our strategic partners, collaborators and
suppliers to work together within a common framework of
corporate integrity and values.
Guiding
principles of our
Code of Ethics
Law compliance
Our customer
service
Equality of
opportunities
Job
security
Acceptance
of gifts
Harassment-free
workplace
About conflicts
of interest
Taking care
of our work tools
Transparent business
practices free of
bribery
About
fraud
Financial
information
Taking care of our
private and confidential
information
About the
environment
and our responsible
use of resources
25
1 5 937 112 6 1048 1213ALSEA AR 2023 Corporate Integrity
GRI 2-15 205-2
We know that fulfilling our purpose
demands that we establish, respect and
enforce regulations that promote our ethical
principles based on policies responding to
this objective, as we ensure that they reach all
levels of our company.
Anti-Corruption Plan
We have developed the Alsea anti-corruption plan to
comply with applicable legislation, which includes the
Policy Anti-corruption, the Code of Ethics, the organiza-
tion's manual and our anonymous reporting line (Línea
Correcta). We incorporate anti-corruption clauses in
all our contracts. Compliance with the Plan, which our
internal and external auditors continually review, is
mandatory for all collaborators and business partners.
Anti-Corruption Training
We ensure that all collaborators read and comply with
our Anti-Corruption Policy. They also take annual training
courses on transparency and compliance, to uphold
transparency in everything we do across the company.
Protecting Personal Information
We are committed to protecting our stakeholders’ infor-
mation in the digital world. We are pleased to announce
that we did not receive any reports of loss of information
or claims related to our stakeholders’ personal informa-
tion in 2023.
Code of Ethics and Penalties
We are governed by a Code of Ethics that establishes
the values and behavioral standards all collaborators,
suppliers and franchisees must follow. This document,
available on our website, describes potential penalties
for violations, ranging from a warning to termination of
employment and the corresponding legal actions.
26
IA ALSEA 2023
Prevention of money laundering
We have internal policies to comply with the Law of
Prevention of Money Laundering. These policies help us
identify and prevent activities related to illegal proceeds
and reinforce our commitment to integrity and trans-
parency in all our operations, ensuring compliance with
current applicable laws.
Gifts, hospitality, and travel expenses
We value integrity in all our interactions; therefore, we do
not accept conditional gifts from suppliers, third parties
or public officials, and Alsea prohibits offering these to
influence improper behavior. According to our Code of Ethics,
collaborators can only receive institutional gifts containing
a company logo, with a maximum value of USD 100.
Donations
We promote community programs through donations.
Therefore, Alsea strictly adheres to the current applicable
laws to ensure compliance and transparency in our chari-
table actions at all times.
Political Contributions
Alsea absolutely prohibits giving direct and indirect
political contributions, including expenses to influence
elections or donations to political organizations.
Negotiating with government officials
Our collaborators must maintain professional, cordial
and ethical relationships with government officials and
consistently comply with our Anti-Corruption Policy and
all legal regulations.
Suppliers
We ensure that our suppliers and business partners fully
comply with the rules established in our Anti-Corruption
Policy and respect all applicable laws. All forms of bribery,
corruption, extortion and fraud are forbidden. Suppliers
are prohibited from offering, promising, requesting,
accepting or receiving considerations. They must report
all conflicts of interest to our Correct Line and maintain
the confidentiality of the information received from Alsea.
You will find our policies at:
www.alsea.net/corporate-integrity
27
Bribery and undue advantages
We are committed to fighting corruption and bribery in all
their forms. We do not offer, give or promise inducements
to public officials or individuals to obtain undue benefits.
Collaborators, suppliers and partners are prohibited from
requesting, accepting or receiving rewards from government
officials in exchange for benefits on behalf of Alsea.
Conflict of interest
At Alsea, our collaborators must avoid situations that
compromise the integrity of the company’s interests and
theirs. Refraining from directly or indirectly influencing
decisions related to Alsea is essential to guaranteeing
ethical and transparent behavior in all our operations.
ALSEA AR 2023
Correct Line
GRI 2-25, 2-26
We firmly believe we can build a culture based
on high ethical standards by working together.
One of the essential components to achieving this
objective is Correct Line, a mechanism Alsea created
to receive reports or complaints about breaches of our
Code of Conduct by our collaborators, suppliers, brands
or any stakeholder linked to our operation.
The Correct Line is managed by a third party known for
its reliability, confidentiality and objectivity in handling
reports and complaints. We have an independent
portal where we provide more personalized attention
and timely follow-up to the matters reported by our
stakeholders, always in line with our purpose to bring
happiness and experiences full of flavor.
In 2023, we received reports about harassment, discri-
mination, conflicts of interest and breach of trust: 88%
were resolved, and 22% are in progress.
1,292
Reports
Origin:
100%
Reports
addressed
3
1,185
Suppliers
Collaborators
84
Customers
Negligence
Sexual harassment
Discrimination
Total
102
46
56
11
7
8
1
3
6
Attention Channels
Website
Mexico and South America:
https://extranet.alsea.net/lineacorrecta/
Europe:
https://europe.alsea.net/etica-y-cumplimiento/canal-denuncias
28
ALSEA AR 2023
Corporate
Governance
GRI 2-9, 2-10, 2-11, 2-12, 2-13, 2-14, 2-27
At Alsea, we are committed to transparency, accountability
and value creation. Doing the right thing and committing
to improving our operation’s financial, social and
environmental aspects is our priority.
Thanks to the guidance provided by our Corporate Governance, we adopt best
practices, protect our stakeholders’ interests and promote a culture of integrity
and responsibility in all our operations.
Corporate Governance Structure
GRI 2-9
Board
of Directors
Audit
Committee
Corporate Practices
Committee
Office
of the CEO
Alsea
Mexico
Alsea
Europe
Alsea
South America
29
ALSEA AR 2023 Board of
Directors
GRI 2-10, 2-11, 2-12, 2-13, 2-14
The Board of Directors is the highest
decision-making authority within our
company. It oversees the implemen-
tation of strategies and decision-ma-
king processes. It is supported by
the Audit, Corporate Practices and
Corporate Governance Committees
to recommend and instruct Senior
Management on risk control mecha-
nisms, business performance, stake-
holder relations policies, compensa-
tion and regulatory compliance.
The Board of Directors comprises 12
members, three of which are related
proprietary directors, two are indepen-
dent propriety directors, and seven
are independent. A related proprietary
director chairs the Board.
We have the figure of Independent
Director who today represents more
than 58% of the total members,
exceeding the 25% required by the
Securities Market Act.
At Alsea there is no position of
Alternate Director, since it is consi-
dered that if the Proprietary Director
(one who has a direct connection to
the company derived from sharehol-
ding) does not attend to the sessions
of the Board of Directors, dilutes its
obligations in front of the rest of the
members. Alsea's board meetings
must be called if required by at least
25% of directors.
1
5
9
3
7
11
2
6
10
4
8
12
30
ALSEA AR 2023 58%of our Board of
Directors are
independent
members
Proprietary
Directors
Independent
Directors
1 Alberto Torrado Martínez
Chairman
6 León Kraig Eskenazi
Board member
2 Cosme Alberto Torrado
Martínez
Board member
7 Gabriela María
Garza San Miguel
Board member
3 Armando Torrado Martínez
Board member
8 Carlos Vicente Salazar Lomelí
Board member
Independent
Proprietary
Directors
4 Federico Tejado Bárcenas
Board member
5 Fabián Gosselin Castro
Board member
9 Alfredo Sánchez Torrado
Board member
10 Luiz Carlos Ferezin
Board member
11 Leticia Mariana Jauregui
Casanueva
Board member
12 Christine Marguerite Kenna
Board member
31
ALSEA AR 2023
Nomination, election and
remuneration of Board Members
process
GRI 405-1
The Nominations and Compensation
Committee is the body in charge of
managing board member selection,
nomination, and renewal procedures.
Board member nomination or re-elec-
tion proposals are submitted to the
Annual General Meeting of Sharehol-
ders, and all direct nominations to
fill a vacant seat follow a procedure
established to this end. In the case
of Independent Members, these
proposals are approved with recom-
mendations from the corresponding
committee. As for the other members,
the Committee issues a prior report
on the proposals before approval.
All proposals submitted to the
General Meeting of Shareholders are
accompanied by a detailed report
from the committee containing an
evaluation of the proposed candi-
dates’ merits and experience.
The committee considers the balance
between knowledge, skills and
experience, as well as the require-
ments established to fill vacant seats.
Special attention is paid to the candi-
date’s availability required to hold
the position.
The Nominations and Compen-
sation Committee also proposes
board member remuneration to the
Meeting of Shareholders. At Alsea, we
have determined compensation as a
fixed amount based on attendance.
We have also implemented mecha-
nisms and set objectives to assess
each member's performance and
propose training on topics relevant
to the company’s development when
necessary.
Board Diversity
We recognize the value of diversity
and promote the professional growth
of women in the workplace. We are
proud to say that we have three
female board members today, repre-
senting 27% of members and 43% of
the Independent Directors.
Gender diversity is not only important
from an equity perspective; it also
provides a variety of skills, percep-
tions and experiences that streng-
then our decisions and the company’s
performance.
GRI 2-10, 2-17, 2-19, 2-20
27%
of our board
members are
women
32
ALSEA AR 2023 Audit Committee
Roles and
Responsibilities
• Recommend to the Board the candidates
• Contribute to establishing related-party
Alfredo Sánchez Torrado
President
Luiz Carlos
Ferezin
Member
Federico Tejado
Bárcena
Member
Christine Marguerite
Kenna
Member
Elizabeth Garrido López
Secretary (without being a member)
transaction policies.
• Analyze and evaluate related-party
transactions to offer recommendations to
the Board.
• Decide whether or not to hire third-party
experts to give their opinion on related-
party transactions or other matters to
ensure the proper performance of their
duties.
• Verify compliance with the Code of Ethics
and the mechanism provided to disclose
improper behavior and protect whistle-
blowers.
• Assist the Board of Directors in analyzing
information contingency and recovery
plans.
• Verify the implementation of the mecha-
nisms required to ensure the company’s
compliance with the different legal provi-
sions.
selected to serve as the company’s external
auditors, their contracting conditions, and
the scope of the professional work and
supervise compliance thereof.
• Serve as the communication channel
between the Board of Directors and the
external auditors, ensuring the latter’s
independence and objectivity.
• Review the work program, observation letters
and internal and external audit reports,
reporting the results to the Board.
• Meet periodically with the internal and
external auditors without company officers
to obtain their comments and observations
on the progress of their work.
• Give the Board of Directors their opinions on
the policies and criteria used to prepare the
financial information and the processes used
to issue it, ensuring its reliability, quality and
transparency.
• Contribute to defining general internal
control and internal audit guidelines and
evaluating their effectiveness.
• Confirm the observation of the mechanisms
established to control the risks the company
might face.
• Coordinate the work done by the internal
auditor.
33
ALSEA AR 2023 Corporate Practices Committee
Roles and
Responsibilities
León Kraig Eskenazi
President
Cosme Alberto
Torrado Martínez
Member
Fabián Gerardo
Gosselín Castro
Member
Gabriela Maria
Garza San Miguel
Member
Leticia Mariana
Jauregui Casanueva
Member
Elizabeth Garrido López
Secretary (without being a member)
• Suggest to the Board of Directors the criteria
ideal for appointing or removing the Chief
Executive Officer and other senior managers.
• Propose evaluation and compensation
• Analyze the general guidelines presented
by Senior Management to determine the
company’s strategic plan and follow up on
its implementation.
• Review the company’s investment and
financing policies proposed by Senior
Management and give its opinion to the
Board of Directors.
• Give an opinion about the annual budget
the Chief Executive Officer presents
and monitor its application and control
system.
• Evaluate the mechanisms presented by
Senior Management to identify, analyze,
manage and control risks to which the
company is subject and give its opinion
to the Board of Directors on the subject
matter.
• Examine the criteria the Chief Executive
Officer presents to disclose the risks to
which the company is subject and give its
opinion to the Board of Directors.
criteria for the Chief Executive Officer and
other senior managers to the Board
of Directors.
• Recommend the following criteria to the
Board of Directors to determine payments to
the Chief Executive Officer and other senior
managers when they leave the company.
• Suggest the criteria to determine the
compensation of the company’s senior
management team.
• Analyze the proposal made by the Chief
Executive Officer on the staff’s compensa-
tion structure and criteria.
• Study and present to the Board of Directors
for approval the statement prepared to
confirm the company’s social responsibility,
the Code of Ethics, and the system used to
report improper behavior and protect whist-
leblowers.
• Evaluate and propose to the Board of
Directors the approval of the formal
leadership succession system and verify
compliance with the terms approved.
• Study and propose the company’s strategic
vision to the Board of Directors to ensure its
stability and permanence over time.
34
IA ALSEA 2023 G R O W T H
passion
T O
to serve is...
growth
that creates
value
Growth means focusing on our operational aspects to direct
leading brands, providing exceptional service and premium
products supported by an exemplary supply chain in the
industry. We also manage commitments to offer menus adapted
to diverse lifestyles, labeling, communication and advertising
responsible practices, and initiatives to avoid food waste.
35
ALSEA AR 2023 GROWTH
Our
supply chain
Ensuring our customers enjoy amazing
experiences requires the joint work of
collaborators and suppliers in integrated
logistics efforts.
The supply chain is one of our
greatest competitive advantages, a
fundamental pillar in our strategy
and generator of important efficien-
cies for our brands. All of this is
reflected in a positive impact on the
quality and safety of the dishes we
serve every day.
The Alsea Operations Center in
Mexico provides planning, supply,
manufacturing, quality, new product
development, logistics and distribu-
tion processes for over 2,150 stores.
In 2023, Alsea Mexico carried out a
joint venture with Europastry and
acquired Pagnifique to multiply the
production that supplies our restau-
rants in the region.
All our production and distribu-
tion systems guarantee that food
arrives at our restaurants in optimal
temperature conditions, thanks to
a continuous monitoring system of
transport conditions and routes,
available 24/7.
+16,000
SKUs
distributed
+46k
Tons of
pizza dough
4,000
Stores
served
The Alsea
supply chain
+24,500
Monthly
deliveries
532
Cities
New product
development
Purchasing
Planning
and supply
Manufacturing
Logistics
Distribution
36
ALSEA AR 2023 GROWTH
Supplier
Development
GRI 204-1
We are responsible for ensuring that we have
the best suppliers. Therefore, we contribute to
their development and share our values and
commitment to quality with them.
In accordance with our Global Procu-
rement Policy, approval procedures,
risk management and supplier audits,
we guarantee health and safety throu-
ghout the supply chain by verifying
all quality management systems in
processes and facilities.
We have guidelines on human rights,
labor rights, environmental regula-
tions, and anti-corruption policies
applicable to all our suppliers
from the moment we begin our
relationship, when they sign their
acceptance of our Code of Ethics.
We implement a comprehensive
approval, development and monito-
ring program for food preparation
and packaging materials to ensure
compliance with regulatory and
health and safety standards required
by the authorities and our strategic
partners. This approach is relevant,
considering that 90% of our suppliers
in Mexico are small and medium-
sized companies.
Our Global Procurement Policy also
guides our commercial relationships
based on respect and mutual benefit,
promoting healthy competition and
equal opportunities for all.
Local suppliers
Mexico
Europe South America
98%
80%
90%
37
ALSEA AR 2023 GROWTH
Responsible
Sourcing
GRI 2-6, 3-3, 204-1, 414-1
FB-RN-430a.1, FB-RN-430a.2, FB-RN-430a.3
Passion to serve means we strive to
establish processes taking into account
those social, environmental and
economic impacts that our supply chain
can generate.
We strive to ensure that the essential
ingredients in our dishes have interna-
tional sustainability certifications, such
as Fairtrade, Rainforest Alliance, Round
Table on Responsible Soy and Certified
Sustainable Palm Oil.
In accordance with our responsibility
regarding the origin of the products we
use and in support of animal welfare,
at Alsea, 24% of the eggs served in our
restaurants come from cage-free hens.
Our sourcing process begins with
selecting suppliers of goods and
services. We choose suppliers with
Global Food Safety Initiative (GFSI) certi-
fications to ensure the quality of our raw
materials and comply with our Quality
and Food Safety Policy.
This year, in Mexico, 76% of our suppliers
obtained this certification, demonstra-
ting our commitment to food safety and
quality of our products. We applied the
Alsea third-party audit evaluation to
suppliers that are not GFSI-certified.
Overall, 95% of suppliers were approved,
combining both assessment forms. The
remaining 5% that were not approved
implemented an improvement action
plan and will be re-evaluated in 2024 to
ensure compliance with our standards.
100%
Suppliers were
evaluated in quality and
food safety practices
52
Supplier audits
in Europe
95%
Suppliers
approved through
the Alsea Audit
Evaluation
in Mexico
38
ALSEA AR 2023 GROWTH
Manufacture
We deliver extraordinary quality and flavor
products, optimize restaurant operations
and maximize product standardization.
Our production plants prepare pizza dough and make
bread, pastries, sandwiches, meat and processed products,
and sauces.
We have established guidelines that guarantee the highest
quality standards for our products to ensure our opera-
tional excellence in these processes and those completed
by our suppliers. Our operations implement quality
assurance systems recognized by international standards
established by the Global Food Safety Initiative (GFSI). Our
Alsea Safety and Quality Management System (SIGICA) also
exceeds international food quality and safety standards.
46,000
Tons of
pizza dough
production
per year
Documentation
Food safety plan
Our quality
assurance systems
are recognized
by international
standards from
the GFSI
Verification
Traceability
Food allergen
controls
39
ALSEA AR 2023 GROWTH
Food quality and safety
GRI 414-1, 417-1, FB-RN-250a.1
We are delighted to be part of our customers’
lives through every dish we serve, every
pizza delivered, and every coffee shared
with friends. Hence, our commitment to
food safety is fundamental and covers every
single process involved in our operation.
+13,000
Food Safety
Audits in stores
and restaurants
Quality and food safety principles are our guidelines to
guarantee our customers’ health and well-being. By following
these guidelines, our brands can offer dishes made with the
highest quality and safety standards, guaranteeing the best
hygiene practices throughout the entire process, from the
purchase of supplies through the preparation of the dishes
in our restaurants.
At Alsea, our brands and production centers apply the
Hazard Analysis and Critical Control Point (HACCP) system
every day, with a focus on procedures and controls based on
quality standards to prevent and mitigate risks associated
with food products, including microbiological analysis of
surfaces in contact with food, and air and water quality of
the facilities.
We plan verification processes through internal and external
audits that allow us to evaluate compliance with our commit-
ments and procedures while managing the risk levels of
our activities in the region. These audits cover the review
of quality standards, including microbiological analysis by
external labs.
At Alsea, we work to ensure that everyone who requires it
receives technical training in the operating procedures that
ensure our compliance with the Corporate Quality and Food
Safety Policy. All collaborators have access to manuals and
training courses related to these policies and procedures.
Supplies
We follow rigorous acquisition and
audit processes to guarantee the
quality of the raw materials we use
to prepare our products.
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 implement reception and
storage protocols of supplies,
as well as of preparation, hygiene
of equipment and facilities
maintenance.
40
ALSEA AR 2023 GROWTH
Passion to serve
our customers
3-3, 417-1, FB-RN-260a.1
Being when, where, and how our customers want
requires that we make a major effort to get to know
them so we can anticipate their needs.
At Alsea, we conceive customer satisfaction as the
main objective that motivates us to look after every
detail to be part of their most special moments,
evolve with them and provide the right dishes for
all tastes and preferences.
41
ALSEA AR 2023
GROWTH
Options for all
We work to ensure all our restaurants are
known for their inclusive and safe spaces.
Responsible Consumption
The inclusion and appreciation of diverse lifestyles guide
us and confirm that our customers evolve in their food
preferences and increasingly seek innovative alternatives
without sacrificing flavor.
Hence, we have implemented initiatives to inform our
customers about the calorie content of our dishes
committed to consistently following the principles of
responsible marketing and communications at all times.
We have also taken steps to eliminate artificial flavors and
colors and reduce sugar and fat content from some of our
products.
We will continue to innovate with new dishes, ingredients
and options to meet our customers’ needs. For example, at
Vips, we offer a children’s menu featuring dishes created
under the guidelines established by El Plato del Buen Comer
(Healthy Eating Guidelines) and Official Mexican standard
NOM-43-SSA2-2012 as well as low-calorie options for adults.
Inclusive and Safe Spaces
Some of our P.F. Chang’s, Burger King, Chili’s, Starbucks and
VIPS restaurants offer universal accessibility facilities in
some of its restaurants such as spaces that facilitate access
and amenities for people with mobility limitations, parking
spaces, bathrooms equipped with ramps, handrails and
appropriate distribution for the circulation of wheelchairs,
among other characteristics.
Another initiative our brands have implemented in Mexico
includes Braille menus to promote the inclusion of persons
with vision impairment.
We provide inclusive experiences for all our stakehol-
ders in our restaurants and digital media. In this sense, in
2023, we launched a new corporate website with a design
offering users readable content and intuitive navigation in
an interface focused primarily on enabling facilities for users
with visual impairment.
42
ALSEA AR 2023 GROWTH
Digitalization
Passion to Serve our customers also means
offering them the right product in the right
channel and time. Therefore, our digital
transformation strategy is a priority to
consolidate our leadership in the sector.
In recent years, we have created innovative, attractive
and avant-garde solutions focused on the needs of our
customers and leading digitalization innovations. Ease of
access to our products has reinforced customer loyalty,
which translates directly into increased sales.
Our journey in 2023 was marked by an advance in digital
sales by turning “transactions into relationships.” This
growth was achieved thanks to analyzing the information
we obtain through the loyalty programs we manage in our
Customer Relationship Management (CRM) platform.
43
ALSEA AR 2023
GROWTH
Digital sales
and data analysis
Being closer to our customers means
implementing all the technological tools
available to be closer to them wherever
they are.
In 2023, we achieved record sales in our digital channels,
with transactions accounting for 31% of Alsea’s total sales,
a solid 24.4% growth compared to 2022.
This growth is driven by our continued investment in
digital technology, which has significantly impacted order
volumes, which amount to 99 million, an annual increase
of 26% compared to the previous year.
Thanks to data analysis obtained through our digital
platforms, we can establish a segmentation that allows
us to personalize our marketing strategies, adapt our
efforts to improve our customers’ experiences and build
stronger and longer-term relationships.
31.0%
of Alsea’s total sales
come from digital
channels
99
million
orders
+ 26% vs. 2022
7.4
million
digital
customers*
* Customers have been active with Starbucks for 90 days and 180 days with Domino’s Pizza, Burger King, and our full-service restaurants.
44
ALSEA AR 2023 GROWTH
Loyalty
Programs
Starbucks Rewards
Our loyalty program rewards our
most loyal customers by giving them
a special experience each time they
visit our stores. Customers use the
Starbucks Rewards app to earn stars
for every purchase, which they can
exchange for free beverages and other
branded products and enjoy exclusive
offers. We launched the program in
Europe in 2023, enjoying great accep-
tance rates, reporting 520,733 members
in Spain and Portugal by year-end.
Presence in Mexico and Europe
+ 50.4%
Digital sales
growth by brand
vs. 2022
+ 8.8%
+ 31%
My BK
The first free loyalty platform in the fast
food sector that rewards fans for their
purchases. With each purchase made,
the system awards crowns members
can exchange for Burger King products.
Presence in Mexico, Chile and Argentina
Club By
It is the omnichannel platform we
use in Europe to unify our Club VIPS
and Fosterianos loyalty programs. It
encourages customers to enjoy four
brands through a single app, signi-
ficantly expanding their options. At
the end of 2023, we reported 858,191
app members.
FULL SERVICE
RESTAURANTS
Presence in Spain
+8.7%
45
ALSEA AR 2023 GROWTH
Digital solutions
Starbucks Digital
Solutions (SDS)
Starbucks Digital Solutions represents a comprehen-
sive set of tools designed to optimize store opera-
tions, improve collaborator efficiencies, and strengthen
connections with our customers. Implementing SDS has
been key to driving significant growth in the Starbucks
Rewards program, achieving a 62% increase in total
rewards globally and a 23% penetration of total sales.
Domino's Cloud
Domino’s Cloud highlighted Alsea’s commitment
to e-commerce and innovative digital solutions,
such as GPS tracking and Domino’s Rewards.
This platform has been key to the transforma-
tion of Domino’s Pizza’s e-commerce, particularly
in Mexico and Colombia, with expansion plans
including Spain. It grew 4% in 2023, accounting for
31% of total sales.
Burger King
At Alsea, we developed a digital roadmap for
Burger King that focused on implementing digital
platforms to improve operational efficiencies, build
customer loyalty, and increase sales.
46
ALSEA AR 2023
GROWTH
Initiatives
implemented by
our brands
Actions built on shared
objectives produce a
multiplier effect.
Our brands implement local initiatives
to contribute to our growth in the
regions where we have a presence.
With our knowledge of the sector, our
customers’ preferences and the help of
technology, we create products to
pamper our consumers and Deliver
happiness and experiences full of
flavor.
Digital kiosks
Burger King
Starbucks rewards
Starbucks
New burger menu
Foster's Hollywood
Mexico
Spain and Portugal
Spain
This year, Burger King launched digital
kiosks, a platform that makes it easier
for customers to place orders quickly.
The kiosks consist of a touch screen
that customers use to place their orders
upon arrival at the restaurant.
We have made progress with its imple-
mentation in Mexico, which we plan
to complete by June 2024. This effort
increases average tickets in stores
and reinforces the brand’s competitive
position in the region.
In 2023, we launched Starbucks Rewards
in Europe to reward and thank our
frequent customers who earn “Stars”
with each purchase.
This program has two levels: Green
and Gold. Both grant exclusive benefits
obtained by accumulating “stars,” which
members can exchange for drinks
or accumulate to level up and obtain
additional benefits.
We introduced a new collection of ten
hamburgers with authentic and genuine
f lavors. Each burger was carefully
designed to highlight its rich flavors,
keeping simplicity and quality at the
heart of each variety.
We collaborated with the Research &
Development Division to ensure an excep-
tional experience for our customers.
47
ALSEA AR 2023 GROWTH
Dominosmanía
Domino's Pizza
Mexico
Pasta day
Italianni's
Mexico
Mixology
Chili's
Mexico
Domino’s Pizza relaunched Dominos-
manía between June 15 and 24, offering
all pizzas for MXN 229 each, regardless of
the size or ingredients.
We continued to innovate our recipes and
ordering methods, reaching more than 16
million homes and selling more than 50
million pizzas in Mexico.
On October 25, we celebrate Pasta day in
Mexico, highlighting its versatility, nutri-
tional value and universal popularity.
At Italianni’s, we join the celebration with
various innovative pasta-based dishes in
the restaurant and on delivery platforms.
Chili’s has positioned itself as a tradition
to escape from the routine, to relax and
enjoy. From noon to close, we offer a
wide range of cocktails, including those
from our innovative mixology menu,
which guarantees unparalleled customer
experiences.
Gluten-free pizza
Domino's Pizza
Spain
The Spanish Federation of Celiac Associa-
tion recognized Domino’s Pizza gluten-
free pizzas as one of the best products
for celiacs of the year.
This award highlights the excellence of
our offer. We are known for the fresh
preparation of gluten-free pizzas with
high-quality ingredients backed by a
rigorous food safety process that guaran-
tees the absence of gluten contamination.
48
ALSEA AR 2023 D E V E L O P M E N T
Development is managing aspects related to the growth and
well-being of our collaborators in an equitable, inclusive,
diverse and safe work environment, offering them the
flexibility they need to ensure work-life balance.
49
ALSEA AR 2023 DEVELOPMENT
Alsea Team
GRI 2-7, 401-1, FB-RN-000.A
71,003
collaborators*
49.4%
women
50.6 %
men
67,179
Permanent or
indefinite
contract
3,083
Temporary
contract
43,727
Full-time
34,212
Reduced
working hours
Collaborators by region, age, and percentage
Mexico
32,697 / 43%
-18
18-20
21-29
30-39
40-49
50-59
60 +
South America
14,804 / 26%
-18
18-20
21-29
30-39
40-49
50-59
60 +
Europe
23,502/ 31%
-18
18-20
21-29
30-39
40-49
50-59
60 +
0
2,290
8,951
3,710
1,647
696
155
0
1,848
6,676
3,110
2,165
1,311
138
49
1,160
3,842
1,344
356
131
35
52
1,387
4,647
1,323
353
107
18
2
1,989
5,166
2,253
1,340
656
156
12
1,959
5,175
2,170
1,673
812
139
* It includes business units in Alsea Mexico, South America and Europe (Spain, Portugal, France and the Netherlands), being the most significant geographies with their own establishments.
* Article 32 in Argentina supports hiring collaborators ages 16 and 17: Capacity. Individuals can enter into employment contracts as of age 18 (eighteen). Individuals ages 16 (sixteen) and 17 (seventeen) may enter into employment contracts with the authorization of
their parents, tutors or guardians. Such authorization is presumed when the adolescent does not live with them.
50
ALSEA AR 2023
DEVELOPMENT
Talent attraction
and retention
GRI 401-1, FB-RN-310a.1., FB-RN-310a.2
Thanks to the work done by our team of
collaborators, we deliver extraordinary
results. We value both those who are
beginning their careers and those who
enrich our lives with their experience.
In 2023, 95% of our collaborators participated in the ECO
Global Engagement survey, and we scored 4.19, with 5
being the highest rating scale.
This year, we made 46,258 new hires and reported a 65%
turnover rate, 6% below 2022. Part of our success on this
index is attributed to the promotion of over 7,000 colla-
borators in Mexico and 1,925 in Europe this year as part of
our objective to offer them a career plan based on colla-
boration and commitment. Total hours worked in 2023
stood at 127,233,183.
In 2023, the average hiring cost per person in Mexico was
MXN 86.53.
These results motivate us to continue building a company
offering the best personal and professional development
experience for one of our most important stakeholders:
our collaborators.
4.19/5.0
ECO Survey
Results
49,199
Global hiring
1,925
Promotions in
Europe 57%
granted to
women
+7,000
Promotion of
collaborators in
Mexico
65%
Turnover
rates
in Mexico
New hires
Mexico
Argentina
Chile
Colombia
Uruguay
Paraguay
France
Netherlands
Belgium
Spain
Portugal
10,077 14,606
1,299
1,047
1,425
1,401
709
1,157
89
48
37
25
724
478
270
132
5
2
6,936
8,482
149
101
Annual
turnover rate
in Mexico
71.8%
65.1%
'22
'23
51
ALSEA AR 2023 DEVELOPMENT
Training and qualification
GRI 3-3, 404-1, 404-2, 404-3
Building a passionate focused on common
goals team, means supporting them in
perfecting their skills and offering a
development environment that promotes
growth and fosters a sense of belonging.
To achieve these objectives, this year, we invested over
MXN 81 million and implemented a continuous global
training process designed to respond to the operation's
needs or the collaborators’ levels of competence.
Initial training
This training is mandatory for
new hires who must learn our
basic operating concepts, such
as handling allergens, preven-
ting occupational risks, equality,
regulatory compliance and data
protection, among others.
Brand training
This program provides training
on the brand that hired them.
During this process, collabora-
tors are prepared for the activi-
ties, procedures and skills
necessary to ensure their
effective performance.
Continuous
training
Specific training on products
and skills for the work area
ensures our collaborators stay
up-to-date and receive training
on transversal competencies
periodically.
Training in the
accompaniment
process
This training program was created
to promote collaborators to
different levels of responsibility
across the company.
(Leaders Program).
52
ALSEA AR 2023 DEVELOPMENT
1.9
Millions of
training hours
4,356
Collaborators
participated in the
Owner Manager
Program
75,228
Collaborators
took a course at
Alsea College
20,893
Collaborators
trained in
Human Rights
Collaborator training
and development
GRI 404-1
At Alsea, we believe one of the best ways to
recognize our team’s value is to invest in
their personal and professional growth.
Our training programs focus on promoting our collaborators’
talent and leadership skills. Some of our main global training
programs include:
In 2023, we implemented Train the Trainers courses and
kicked off the Diversity and Inclusion Committee in Argentina,
Chile, Paraguay, and Uruguay. We also launched the Genera-
tion BK program, aimed at promoting the employability of
older adults.
Alsea College
Virtual learning platform offering
management and skills courses at our
collaborators’ disposal.
Owner Manager
This leadership program was created
to develop and strengthen skills
that empower team leaders to make
decisions. In 2023, 4,356 collaborators
participated in it.
53
ALSEA AR 2023 Training in Mexico
Alsea scholarships
This year, our goal was to promote the professional growth
of our team, so we significantly increased the number of
university scholarships awarded to our brand managers to a
total of 94, representing four times more than those granted
in previous years.
Classroom courses
We provide in-person training programs to enhance the
skills of our Support Center collaborators in conjunction with
prestigious universities in Mexico and abroad. We taught 143
Training and Development courses to 687 collaborators for
24,917 training hours.
Alsea operations academy
Through the Alsea Operations Academy, we trained directors
of various areas and brands. The Academy offered 59 courses
and over 513 hours of training, with 70 internal instructors
participating. This approach helps cultivate a multidiscipli-
nary and operational profile among participants, preparing
them to lead a business unit.
94
University
scholarships
143
Training and
development
courses
59
Courses for
directors
687
Collaborators
+24,000
Training hours
53
Training hours
54
ALSEA AR 2023 DEVELOPMENT
Training in Europe
Alsea classrooms
Alsea Classrooms is a free, open-access training offer
created to improve our collaborators’ skills and compe-
tencies. It is open to everyone wishing to improve since
we aim to provide the best tools to those interested in
the following training fields:
• Digital and office skills classroom
• Restaurant management classroom
Psychosocial well-being classroom
•
University certification program
for managers and zone managers
We created this program to provide academic recognition
to our restaurant managers by acknowledging their skills
and competencies. They are also trained in economics,
marketing, human resources, and restaurant manage-
ment skills and concepts.
University certification program for chefs
This 50-hour program was created to grant academic
recognition to our chefs. It provides them with the
tools they need to control essential parameters when
evaluating the operation’s results. The program covers
everything from a department’s organization and
processes to budget, inventories, waste control, conver-
sion factors and costs.
Training in South America
Cosmos learning
Our collaborative learning platform works as a social network
where we share content of interest and follow other users
based on the content they publish.
This platform allows us to act as learning leaders, helping
other collaborators in their training processes and positively
impacting the business.
This initiative offers us a learning experience tailored to our
needs and interests. We can also access courses, workshops,
talks and videos designed for our individual roles or explore
information about other areas across the company, request
real-time feedback and identify strengths and areas for impro-
vement. This year, 82% of our collaborators were registered and
we provided more than 7,500 hours of training and over 5,400
pieces of shared content.
55
ALSEA AR 2023 DEVELOPMENT
Talent management cycle
GRI 404-3
We want our collaborators to inspire
by example. Identifying our best talent
contributes to their development, allows
us to recognize their contributions, and
strengthens our culture.
We have an Alsea leadership model to clarify what is expected from all
company leaders. The Alsea Leadership Index (ILA) is the vehicle our leaders
can use to ensure the visibility of their teams’ experiences based on their
leadership styles. We strive to leverage strengths and promote individual
opportunities for improvement.
Collaborators evaluated
24,930
By objectives
20,774
Through calibration
423
Through the Alsea
Leadership Index
13,659
11,271
11,547
9,227
165
258
56
ALSEA AR 2023 DEVELOPMENT
Diversity, equity
and inclusion
GRI 405-1
We can all develop our full potential when
we improve our skills.
At Alsea, we provide development
opportunities to collaborators with
diverse abilities and reaffirm our
commitment to labor equity and inclusion.
Our Diversity, Equity & Inclusion (DEI) Policy establi-
shes guidelines for diversity standards, labor equality,
non-discrimination and the inclusion of priority
attention groups.
In 2023, we continued to promote initiatives to ensure
our teams include individuals from dif ferent
backgrounds, lifestyles, ages and abilities.
We reaffirmed our commitment to ensuring that at
least 5% of our workforce belongs to priority attention
groups. Thanks to the initiatives implemented, we
achieved a 44% increase in collaborators in these
groups compared to our global figures reported in
2022 globally.
1,999
Collaborators
belonging to a priority
attention group
Collaborators belonging to a priority attention group
Over 60
742
With disabilities
415
Refugees and young
people in vulnerable
situations
842
57
ALSEA AR 2023
DEVELOPMENT
At Alsea Europe, our application
of the Incorporation Protocol for
People with Disabilities guarantees
an effective and equal onboard-
ing process from the approach to
companies and associations specia-
lized in the labor insertion of persons
with disabilities through their adapta-
tion, suppor t and development
process. In 2023, our team was made
up of 117 people with disability, 13%
more compared with 2022.
We also entered into a collabora-
tion agreement with Down Spain to
work on the development of actions
aimed at improving the employabi-
lity of people with Down Syndrome
and/or intellectual disabilities under
conditions of equality with the rest of
the collaborators.
Global
diversity,
equity and
inclusion
practices
Non-discrimination
We know that our greatest
wealth comes from our
differences.
Behavior
We are respectful and
polite. We live in a culture
that promotes dignified
treatment for all.
Inclusion
Collaborators with disabilities,
older adults and people from
all priority attention groups are
welcome to join the team.
Equity
Men and women enjoy the same
opportunities, treatment, profes-
sional promotion and working
conditions.
Flexibility
We reconcile our personal and
professional lives by ensuring a
better distribution of effective
work time.
Consult our Diversity and Inclusion Policy: www.alsea.net/uploads/es/documents/general_
documents/alsea-politica-diversidad-inclusion-2022.pdf
58
ALSEA AR 2023 DEVELOPMENT
Gender equality and
women in leadership
positions
GRI 405-1
We are stronger working as a team, so we
promote equal opportunities and value the
benefit of having diverse perspectives to
generate creative and innovative solutions.
As a result of our efforts, in 2023, 28% of management
positions were filled by women, reflecting our commit-
ment to gender equality and the recognition of talent
without distinctions.
We firmly believe that individual skills and merits are
the main criteria to access leadership and responsibility
roles in our company, which is why our Talent Attraction
hiring processes (job pool in Mexico) and Únete (Alsea’s
recruitment center in Mexico) establish that at least one
candidate on the shortlist presented must be a woman
with experience and adequate and competitive qualifi-
cations.
We include actions with a gender perspective in all our
Human Resources processes to provide an equitable
basis for development, with a key focus on five dimen-
sions.
Commitment from
Top Management
• Communication of the
organizational position
and strategic agenda
• Alignment with quanti-
tative objectives
Metrics
• Pay gap analysis
• Key indicators with a
gender perspective in all
our processes
Leadership Development
Behavior
• Training focused on
women
• Mentoring and support
• Employee retention and
promotion processes
Organizational infrastructure
• Protocol for preventing and responding to
violence and harassment
• Flexible compensation plans and
schedules
• Extended maternity and paternity leaves
• Training to prevent
unconscious bias at all
levels
• Management training in
gender equality
• Best practices to mitigate
gender discrimination
in talent management
processes
59
ALSEA AR 2023 DEVELOPMENT
Parental leaves
GRI 401-3
Our collaborators are committed
professionals who work passionately to
serve and value their professional careers
and family lives. At Alsea, we want to give
them time and space to adapt to the changes
that arise with the arrival of new family
members.
Our Diversity and Inclusion Policy reaffirms our commit-
ment to supporting fathers and mothers of newborn babies
through parental leave in all the geographies where we are
present.
We recognize the importance of supporting our collabora-
tors in one of the most special moments of their lives: the
arrival of a child into their family. Therefore, we offer paid
parental leave so fathers and mothers can receive and care
for their newborns with full peace of mind. In 2023, 99% of
our collaborators who took their parental leaves returned
to work.
1,089
Collaborators
took advantage
of their parental
leaves
40%
Men
60%
Women
We want all of them to enjoy this period and feel
welcome when they return. To achieve this, we
offer flexible schedules to accommodate childcare
services and encourage collaborators with children
under three to avoid working on weekends to the
extent possible.
60
ALSEA AR 2023 DEVELOPMENT
Well-being in the
workplace
GRI 3-3, 401-2, 401-3 403-3, 403-4, 403-5, 403-6
FB-RN-310a.2
To bring happiness and experiences full of flavor
begins with our collaborators’ well-being.
It is essential for them to develop a physical,
mental and emotional balance.
Health
In 2023, our En Línea Contigo (In Line with
You) program in Mexico provided free
psychological support to 2,851 collabora-
tors who requested this help.
We also invested in physical health services
for the entire work team to contribute to
disease prevention.
In Europe, we addressed these issues
through communication and awareness
campaigns to promote good habits in
workplace safety and healthy nutrition.
We also address road safety issues with all
delivery staff members.
46
Global health
campaigns
Decent income
At Alsea, we work to provide better working
conditions for our work team with an income
that contributes to improving their quality of life.
To determine if the income of our collaborators
exceeds this line of well-being in Mexico, we
use the information published by the National
Council for the Evaluation of Social Development
Policy (CONEVAL) as our baseline. The methodo-
logy compares the monthly poverty line indicator
issued by government institutions versus the
total monthly income per collaborator, including
wages, cash benefits, bonuses, employee profit
sharing, and tips. We are currently at 90% of our
decent income goal in Mexico.
Freedom of association
We respect the right of free collective associa-
tion. All (100%) of our collaborators in Mexico
and Europe are represented by an indepen-
dent union, with the numbers in South America
standing at 2.5% in Colombia, 58% in Argentina,
44% in Chile, and 45% in Uruguay.
61,675 of our global collaborators work under a
collective agreement.
61
ALSEA AR 2023 DEVELOPMENT
Security systems
GRI: 403-2, 403-4, 403-5, 403-6, 403-7, 404-8, 404-9
In 2023, Alsea Comprehensive Security in Mexico committed
to standardizing security technology in stores and increa-
sing the number of business units with access to GPRS-IP
equipment. We reported 73% progress in implementing this
technology, significantly improving communication between
safety and security teams and restaurant alarm systems.
Our Alsea Emergency Assistance Center (CAEA) in Mexico
maintained its legal advice and monitoring activities, taught
workshops and organized work tables for 2,962 collabora-
tors working for different brands, and assisted in equipping
and updating new projects, remodeling, civil protection
and seismic alerts. Furthermore, in response to the
emergency caused by Hurricane Otis in the state of Guerrero
in southwestern Mexico, it coordinated the immediate
response services on-site, installed the control point for the
delivery of food supplies, secured stores and collaborated
in security technology reequipment tasks.
Risks Prevention
To safeguard our collaborators’ physical integrity and
well-being, we use technology to evaluate potential
risks and implement preventive processes that promote
optimal working conditions. This year, 483,077 hours were
lost to injuries, 23% less than in 2022.
Our Occupational Risk Prevention Policy is built on four
lines of action:
• Preventive training
• Communication of opportunities for improvement
• Accident investigations
• Consultation and participation
Alsea Europe has 3 Health and Safety Committees that meet
to discuss the issues proposed by the Legal Representa-
tion of Workers, follow up on occupational health and safety
issues and propose, analyze and approve future actions and
projects. In 2023, we held 12 meetings and addressed over
103 safety and health risk and improvement notifications.
73%
Stores in Mexico are
equipped with
digital technology
security systems
1,944
Preventive visits based
on risk assessments,
inspections and accident
controls
-23%
Work hours lost
due to injuries
vs. 2022
62
ALSEA AR 2023 DEVELOPMENT
Human Rights
We are a team proud to work in an
environment of respect and harmony. We
promote the principles established in our
Global Human Rights Policy because we
believe that everyone deserves the best
treatment.
Our adherence to the legal framework of all the countries
where we have a presence ensures compliance with
human rights best practices.
Our policy shares our position of rejection of child or
forced labor and total acceptance of the right of freedom
of association and collective representation.
We trained 20,843 collaborators on Human Rights and
labor issues to disseminate our policy this year.
At the end of 2023, we published the Protocol for the
Prevention and Intervention in Cases of Violence and
Workplace and Sexual Harassment, aimed at ensuring
an environment free from violence and workplace and
sexual harassment, including gender violence and
harassment. In this sense, the Protocol contemplates
two fundamental aspects: 1) The adoption of prevention
measures, such as actions focused on raising awareness
and training on the problem, and 2) Establishing a formal
procedure for handling complaints about acts of violence,
workplace and/or sexual harassment, including gender-
based violence, seeking to ensure that people who work
at Alsea in Argentina, Chile, Paraguay, and Uruguay
enjoy the protection of their dignity and psycholo-
gical, physical and sexual health, creating an environ-
ment of containment so those affected feel safe to
report acts of violence and harassment.
By launching our Protocol for the Prevention and
Intervention in Cases of Violence and Workplace
and Sexual Harassment, our company demonstrates
its firm commitment to the safety and well-being of
all collaborators, establishing a solid foundation to
create a healthy and respectful work environment
throughout Alsea with all its brands.
Learn more about our Human Rights Policy at:
www.alsea.net/uploads/es/documents/general_
documents/alsea_politica_derechos_humanos.pdf
63
IA ALSEA 2023 DEVELOPMENT
Social commitment
GRI 3-3, 415-1, 413-1
At Alsea, we share with our partners and civil
society the responsibility of building a sustainable
future by investing human and material resources
to cultivate community well-being.
We focus on three areas that we consider
fundamental: actions against hunger, supporting
education and employability.
+$88
million
of pesos
donated
+124
Tons
donated
64
ALSEA AR 2023 DEVELOPMENT
Fundación Alsea, A.C.
Mexico
Fundación Alsea’s mission is to bring
happiness to vulnerable persons and
communities through sustainable social
investments promoting food security,
education and employability.
Revenues in 2023
$93,943,146
The foundation participates in different initiatives directly
or in collaboration with civil society organizations and
its brands to achieve a multiplier effect and produce the
greatest impact possible.
In 2023, Fundación Alsea, A.C. invested more than MXN
88,000,000, achieving positive impacts in all its lines of
action and directly benefiting more than 2.9 million people.
1%
5%
10%
$88,246,139
Expenditures from
donations by Fundación
Alsea A.C.
84%
+124 tons
In-kind donations to
food banks
14,966
Volunteer hours
28
NGOs supported
Lines of action
Amount and percentage of expenses
Food 84%
$73,870,174
Education and employability 5%
$4,368,110
Associations in which
Alsea participates 1%
$687,000
Community development 10%
$8,822,599
Volunteering 0%
$163,256
Events 0%
$335,000
65
ALSEA AR 2023
DEVELOPMENT
The It’s On Me Movement
For over a decade, the It’s On Me Movement has been
driven by a clear purpose: Support the eradication of food
poverty in Mexico to ensure that people who suffer from
hunger have access to nutritious food. Since its inception,
the movement has delivered more than 8.7 million meals.
In the last period, the movement’s annual fundraising
campaign broke all records by raising MXN 54.8 million
to ensure the possibility of feeding over 6,000 persons
in 25 food kitchens daily, benefiting more than 2.4 million
people.
The It’s On Me Movement in Colombia continues to grow,
reporting highly favorable results. It carried out nine
volunteer work assignments in foundations sponsored
by Alsea and three days in food banks.
25
Food kitchens
supported in
Mexico
+8.7
Million meals
served
+2.4+
Million people
benefited
$54,895,832
raised
+23% vs. 2022
Origin:
$24,554,333
Raised among
customers
$15,376,870
Product with
a cause
$7,636,264
Donated by
strategic partners
$3,328,363
Donated by
collaborators
Figures expressed in millions of Mexican pesos
66
ALSEA AR 2023 DEVELOPMENT
2,256,324
meals served
Comedor Santa María A.C.
Huellas de Pan A.C.
Restauración, Salud y
Prosperidad A.C.
Fundación John Langdon
Down A.C.
Fondo para la Paz I.A.P.
Save the Children
México A.C.
Total
654,647
62,885
27,078
5,582
35,257
1,470,875
2,256,324
2,470,718
beneficiaries
Comedor Santa María A.C.
Huellas de Pan A.C.
Restauración, Salud y
Prosperidad A.C.
Fundación John Langdon
Down A.C.
Formadores Mexicanos A.C.
Fondo para la Paz I.A.P.
Save the Children
México A.C.
Asociación Mexicana de
Bancos de Alimentos A.C.
Total
3,572
300
2,709
76
500
116
1,551
2,461,894
2,470,718
67
ALSEA AR 2023
Collaboration with
other It’s On Me partner
organizations
Alsea race with a cause
Our collaborators actively share
Alsea’s values, and proof of this was
seen in their participation in the
first Alsea race, an activity organized
to promote health, solidarity and
spending time with family members,
positively impacting the communities
in which we have a presence.
In 2023, we organized the first edition
of this race with the participation of
1,000 collaborators and their family
members. Our participants’ helped
raise 3,000 kilograms of rice that went
destined to the Mexican Food Bank
Network to benefit more than 740
mexican families.
Truck donations
Alsea and its brands, through the It’s
On Me Movement led by Fundación
Alsea, A.C., delivered two five-ton
truckloads and three 1.5-ton truck-
loads to five Food Banks in the BAMX
Network in the states of Chihuahua,
Jalisco, Sinaloa, Tamaulipas, and
Veracruz in Mexico, significantly
increasing the association’s ability to
f ight hunger among vulnerable
populations.
This effort supported the BAMX
Network in rescuing more than 4.3
tons of food and preparing over
145,000 food packs to benefit more
than 26,000 families directly.
68
ALSEA AR 2023 DEVELOPMENT
Employability and education
Education and employment encourage
personal and social development, so we strive
to ensure that young people have the necessary
skills to access quality jobs that allow them to
live decent lives.
The Integra Program is a joint investment
between Fundación Alsea A.C. and the
Starbucks International Foundation,
which provides education and employa-
bility opportunities to youth in vulne-
rable situations.
In 2023, the program awarded MXN 5.7
million, benefitting more than 4,700
young people through the work of 18
social organizations in Mexico:
Mexican Association for the United
Nations for Youth (AMNU Jóvenes A.C.)
(Education for Sharing); Fundación MVS
Radio A.C.; Mano Amiga Chalco A.C.;
Bécalos; Forge A.C.; Fundación Mitz A.C.;
Fundación John Langdon Down A.C.;
Centro Comunitario Santa Fe A.C.; Univer-
sidad Anáhuac del Sur S.C.; Fundación UP
IPADE A.C.; Comedor Santa María A.C.;
SEDAC I.A.P.; Fondo para la Paz I.A.P.;
Gastromotiva México A.C.; Acción Cultural
y Social de Monterrey A.C.; Sistema
Desem A.C. (Junior Achievement); Asocia-
ción Pro-Personas con Parálisis Cerebral
(APAC, I.A.P.); and Fundación Amparo I.A.P.
On the other hand, through the Academic
Excellence program, Fundación Alsea,
A.C. delivered 1,421 packages of school
supplies to its collaborators’ children
and 1,579 school supply packages to
different beneficiaries of the It’s On Me
Movement in Mexico, benefiting 3,000
elementary, middle and high school
students.
Initiatives such as Academic Excellence
and Integra allow us to link our purpose
To bring happiness and experiences full
of flavor with one of the most important
aspec t s of human development :
education.”
In 2023, Alsea in Europe and South
America promoted various actions to
encourage the labor insertion of young
people in vulnerable situations and
enhance their professional develop-
ment. These actions provided them with
tools to increase their employability,
facilitate their job search process, and
promote equal opportunities for men
and women.
In South America, 142 volunteers from
different areas, brands and countries
dedicated 329 hours to actions, such as
simulated interviews, mentoring, work
skills workshops, testimonial sessions,
company panels, participation in job
fairs and the Genomatón , impacting 698
youth on their path to employment.
Alsea in Europe has done much work on
employability programs involving more
than 300 volunteers and impacting more
than 1,500 persons.
$5.7
Million pesos
granted
6,856
Beneficiaries
69
ALSEA AR 2023 DEVELOPMENT
Solidarity night
South America
As part of our efforts to fight hunger, we held
the Alsea Solidarity Night to raise donations for
the Food Bank and the CONIN Foundation in
Argentina.
This year, we organized an event that
gathered over 300 guests, including
collaborators, strategic partners,
opinion leaders, prominent figures in
Argentina’s social and humanitarian
fields, and more than 30 corporate
sponsors. The evening consisted of
a dinner with live music, prizes and
surprises, where attendees enjoyed
the experiences offered by our Burger
King and Starbucks Coffee brands,
as a token of appreciation for their
generous contributions.
The event raised over 780,000 pesos,
benefiting more than 400,000 people.
We will continue to promote this initia-
tive to expand our reach and benefit
more people who suffer from hunger
and malnutrition in Argentina through
the food kitchens and care centers
supported by the Food Bank and the
CONIN Foundation.
70
ALSEA AR 2023 DEVELOPMENT
Alsea Award
At Alsea, we support the Research &
Development of innovative nutrition
and/or food projects because we
want to help millions of people who
face serious challenges regarding
eating healthy meals.
The Fundación Alsea, A.C. and World
Vision Mexico announced the winner
of the second edition of the Alsea
Award in a ceremony held at the
Interactive Museum of Economics
(MIDE) in Mexico City.
The winning project, proposed by the
Center for Advanced Studies in
Nutrition and Food (CESNUTRAL) of
the CES University in Colombia and
coordinated by Dr. Faiber Jaramillo
Yepes, received recognition and USD
150,000 to execute its focused
proposal to reduce food waste.
According to the United Nations
Environment Program (UNEP), house-
holds worldwide produce almost 570
million tons of food waste annually, an
average of 74 kg per person.
The winning research, titled Bioforti-
fied Food Supplements for Families in
Vulnerable Conditions: a Sustainable
Strategy to Take Advantage of Food
Waste and Strengthen Local Food
Systems, intends to address this
problem by developing food supple-
ments from local food products and
waste, subject to strict quality controls
to maximize the utilization of losses
and reduce food waste.
150,000 USD
Prize to develop
the project
71
ALSEA AR 2023 DEVELOPMENT
3
Millions donated
by Alsea and World
Vision Mexico
2,000
Food baskets
delivered
Support for hurricane
Otis victims
The commitment to providing extraordinary
support in the face of adversity motivated the
It’s On Me Movement to extend its fundraising
campaign through December 15th. The
movement raised MXN 1.4 million to support
hurricane Otis victims in Guerrero, Mexico.
To collaborate with other organizations to benefit more
people, World Vision Mexico matched this contribution by
raising it to MXN 2.8 million. Kitchen equipment was also
delivered to the World Central Kitchen organization, which
prepared and distributed more than 40,000 warm meals
to the victims.
Given the magnitude of the needs in Guerrero, the Alsea
Foundation also activated the emergency fund for vulne-
rable communities facing disasters, continuing with the
coalition established with World Vision Mexico, initially
donating MXN 1.5 million and delivering 2,000 food baskets,
benefiting nearly 10,000 victims.
+10,000
Beneficiaries
72
ALSEA AR 2023 DEVELOPMENT
Aqua Towers
Water is essential for life.
Hence, we are determined to
support projects that bring
this resource closer to the
communities that need it
most.
As part of our goal to install 25 Aqua
Tower systems in the next five years
and guarantee vulnerable commu-
nities’ access to running water,
Fundación Alsea, A.C., The Starbucks
Foundation, World Vision México and
the Planet Water Foundation imple-
mented one of these systems at the
Escuela Telesecundaria Cuauhtémoc
in the state of Veracruz in southeas-
tern Mexico.
Planet Water Foundation’s Aqua
Tower system provides access to safe
drinking water in rural communities.
It consists of a three-stage water
filtration solution that produces
1,000 liters of clean, safe drinking
water per hour.
1,000
Liters per hour
(filtering
capacity)
+5,000
Persons
benefited
(15-year forecast of use-
ful life per tower)
The installation of this water tower
will directly benefit 246 students,
faculty and administrative staff, with
an estimated 3,750 beneficiaries over
its useful life, which is expected to
last at least 15 years.
Two additional towers were installed
in Cundinamarca, Colombia, where
residents have difficulty getting water
from the aqueduct and must travel to
take untreated water to their homes.
As part of the program, within the
framework of World Water Day,
another AquaTower was installed in
Sesquilé, Colombia, where ten volun-
teers gathered to assemble and erect
the system, install the water filters
and plumbing fixtures and help roll
out Planet Water’s Water Health
and Hygiene community education
program.
73
ALSEA AR 2023 DEVELOPMENT
Initiatives
implemented by
our brands
At Alsea, we know there are
no small tasks; all actions
count.
The importance of working together
on programs that promote people’s
well-being lies in the ability to generate
a positive and significant change in
their lives.
With this inspiration, we work with our
brands, collaborators and civil society
organizations to build a more inclusive,
fair and sustainable future for all.
Good meal
Starbucks
Chile
Starbucks Chile features an app that
offers food packs that are about to
expire to promote food rescue.
The initiative involves selling surprise
packages of products that do not sell by
the end of a shift or day. Consumers can
use the app to find stores selling these
products at a at an affordable price.
Too Good to Go
Domino's Pizza, Ginos,
Starbucks and VIPS
Europe
1x2
Starbucks
Spain
VIPS, Domino’s Pizza, Ginos, and Starbucks
stores use this initiative to offer consumers
the possibility of purchasing surprise
packs with their surplus food of the day at
affordable prices by checking availability
through the mobile app in Spain, France,
and Netherlands.
Our collaboration with the Too Good to Go
app allowed us to sell more than 170,000
food packs in 2023.
Starbucks runs the 1x2 campaign
against hunger, which consists of
offering a 50% discount off the usual
price of food before it expires, one hour
before closing in its stores in Spain and
Portugal every day, thus encouraging
the use of food and preventing waste.
All proceeds from these sales were
donated to Action Against Hunger, as
the stores sold over 67,000 products in
2023 and donated more than MXN 1.9
million.
74
ALSEA AR 2023 DEVELOPMENT
Domino's
collaborates
Domino's Pizza
Spain
Domino’s Pizza has donated EUR 175,697
to six Spanish foundations through its
University Cards program, which donates
EUR 0.50 for every order students place.
The beneficiaries include Fundación
Diabetes Cero, Nexe Fundación, Down
Vigo, Fundación Síndrome de West,
Fundación Phelan-McDermid and
Fundación Theodora, who will execute
cause projects with the funds obtained
from the donation promoted by
Domino’s Collaborates.
Openings with a
cause
Domino's Pizza, Ginos,
Starbucks and VIPS
Europe
In 2023, Starbucks joined the Openings
with a Cause project in Europe to donate
all proceeds from the first day of sale at
new locations to different organizations
with local projects near our restaurants.
This year, we benefitted over 25,000
persons and donated more than MXN
1.9 million.
Park bench
donations
Domino's Pizza
Uruguay
Domino’s Pizza joined the “Greener
Montevideo” program by donating 32
plastic park benches to Montevideo’s
City Hall for installation in different
parts of the Uruguayan capital.
The benches are made from recycled
materials and have a longer lifespan
than conventional wood, so more
people can enjoy them for longer
without affecting the environment.
Jr. Pizza Maker
Domino's Pizza
Uruguay
Domino’s Pizza Uruguay launched the
fun Jr. Pizza Maker initiative to generate
a positive impact and promote creati-
vity and teamwork in our Montevideo
community.
More than 100 boys and girls from schools
and civil organizations gathered to learn
how to make pizza, promoting the value
of teamwork and spending time together
as a community.
75
ALSEA AR 2023 DEVELOPMENT
Fundación John
Langdon Down
P.F.Chang's
Mexico
One of P.F. Chang’s initiatives in Mexico
this year included the donation of
MXN 558,240 to the John Langdon
Down Foundation to support young
people with Down Syndrome, as the
proceeds obtained from selling the
“Bento Box with a Cause.”
Food bank
Distribution Center
Spain
Like every year, we take advantage
of the food surplus produced in our
logistics warehouse due to menu
changes, products about to expire, and
other things that we donate to the BAM
Food Bank.
This year, we donated over five tons of
food to indirectly benefit more than
180,000 persons in vulnerable situa-
tions through BAM civil organizations
partners.
Pathway to
employment
Burger King, Domino's Pizza,
Foster's Hollywood, Friday's,
VIPS, Ginos and Starbucks
Europe
It is a socio-labor insertion project for
people in vulnerable situations. It
consists of several phases that include
the development of pre-employment
skills and technical and practical training
in our facilities. Volunteer tutors and
mentors from our operations support
the program. Until now +1,500 people
have participated with the support of
+300 volunteers.
Solidarity portion
Domino's Pizza
Spain
This year, Domino’s Pizza converted its
Eat & Drink promotion into a solidarity
action to raise customers' awareness of
the need to reduce food surplus.
Customers donate one euro for each
slice of pizza they take home, which we
then donate directly to the Red Cross.
In 2023 more than 5,000 portions were
sold with an estimated value of $97,000
pesos.
76
ALSEA AR 2023 DEVELOPMENT
Santa María
Foundation
Starbucks and Ginos
Portugal
Our brands work with the foundation
to provide technical training and
non-formal education to families
and youth in vulnerable situations,
helping them find jobs.
These actions supported more than
260 young people and 140 families.
France Terré d´Asilé
Starbucks
France
The "Duos De Main" project's purpose
is to assist young refugees or those
under asylum in France in contacting
young french people, creating ties in the
country, and improving their language
skills or relationships with their surroun-
dings.
Starbucks backs this effort through
different actions, such as pre-work
techniques and the provision of meeting
spaces, supporting more than 400 young
people.
Just a Change
Foundation
Starbucks
Portugal
Together with the Foundation, the colla-
borators support the reconstruction and
renovation of homes of families in vulne-
rable situations.
This action involved more than 270
collaborators who supported their
community, benefiting 14 families
through this organization.
Arpejeh
Starbucks
France
Starbucks works with this organization
to offer job search training for people
with physical, sensory or intellectual
disabilities and provide them with
special equipment to do their jobs.
Thanks to the support provided, we
have helped 30 people find their first
job.
77
ALSEA AR 2023 B A L A N C E
Balance is carrying out actions aimed at caring for
our environment by efficiently managing natural
resources, such as energy, water, emissions, supplies
and waste disposal. At Alsea, we adopt a preventive
approach to environmental issues.
78
ALSEA AR 2023 BALANCE
Waste management
and circular processes
GRI: 3-3, 306-1, 306-2, 306-3, 306-4, 306-5
FB-RN-150a.1., FB-RN-150a.2
Our waste management processes are one
of our environmental priorities. At Alsea,
we have made a huge effort to change our
packaging, reduce single-use plastics, use
continuous-use containers and separate
waste to make it recyclable and reusable. We
know it is a long-term task, but we are on the
path to getting there.
Waste generation
and reduction
Our Global Environmental Policy establishes our waste
management and reduction guidelines to reduce the
negative impact generated by our operations. We seek to
reduce, recycle and reuse waste derived from our activi-
ties, revalue it and establish viable alternatives to ensure
its proper disposal.
-60%
Waste of pizza
dough in Europe
vs. 2022
Alsea Europe has managed over 40 tons of waste, including
packaging, hazardous waste, cardboard and clean plastic.
Furthermore, as part of our responsible organic waste
management activities, we destine fat derived from oil
by-products to the biodiesel production industry and
take meat waste to the animal feed industry.
Comprehensive waste management and reduction
In 2021, all our Starbucks coffee shops in Mexico imple-
mented our “Everything and everyone for the planet”
initiative. To reduce the consumption of disposable
packaging, customers were encouraged to bring their
cups or thermoses every time they visited Starbucks, and
they were offered a discount every time.
We also replaced plastic containers with compostable
materials that are more easily degradable and are made
primarily of cardboard.
Recycled waste
Mexico
Europe South America
Oil (liters)
707,200
540,680
336,000
Food (metrics tons)
195
-
75
79
ALSEA AR 2023 BALANCE
Emissions
FB-RN-150a.1., FB-RN-150a.2
We strive to reduce emissions by focusing
on energy efficiencies, using renewable
and clean energies, and implementing
environmental awareness activities.
Sustainable mobility
in Europe
At Alsea Europe, we implement initia-
tives that improve mobility processes
to reduce greenhouse gas emissions.
One of our objectives is to offer a more
sustainable delivery service, and we
are committed to gradually changing
our fleet. This year, we ensured our
delivery drivers in all business units
used 15% of electric vehicles. Burger
King Europe currently has 3,000
electric motorcycles in Spain.
We support our collaborators in
purchasing electric motorcycles and
bicycles, financing a percentage of
their cost. Through this project, we
contribute to promoting and raising
awareness of the need for sustaina-
bility among our team.
We have installed charging stations for
electric vehicles inside our factories
and parking spaces for skates and
bicycles to encourage eco-friendly
transportation.
Regarding emissions, in Mexico, we
take an inventory of Compounds and
Greenhouse for all our brands and
report them to the National Emissions
Registry, complying with the General
80
ALSEA AR 2023 BALANCE
Climate Change Act.
Energy
GRI: 302-1, 305-1, 305-2, 305-3
FB-RN-130a.1
At Alsea Mexico, we implemented planning and design
software for distribution routes throughout our supply
chain to reduce time and distance in our transportation
services, thus reducing fuel and CO2 emissions.
As a proof of our interest in environmental care, this
year, we filled out the CDP (Carbon Disclosure Project)
Climate Change questionnaire again, through which we
identified opportunities for improvement and specific
risks related to climate change.
GHG emissions Scope 1
Mexico
Europe South America
tonCO2eq
103,136
17,561
6,742
GHG emissions Scope 2
Mexico
Europe South America
tonCO2eq
73,200
34,449
17,965
Total energy consumed
Mexico
Europe South America
GJ
957,552
756,091
238,632
1,594
Solar panels in
Europe
In Europe, we implemented efficiency
measures that have helped us
reduce energy use in our restau-
rants. These include LED lighting,
frequency regulators in extractor
hoods and light sensors.
We also renewed an impor tant
part of our climate and industrial
refrigeration equipment and plan
to continue implementing these
changes in 2024. These actions allow
us to take a step forward in the
optimization and efficiency of our
equipment and processes.
Clean energy
Our clean energy supply in Mexico
has a lower emission factor than
conventional energy, and it repre-
sents 39% of total consumption.
Renewable energy
We installed 1,594 solar panels in Europe on 75% of our
input factories. This reduced CO2 emissions by 21.2% and
significantly increased renewable energy production.
Energy consumption from
renewable energy sources
Mexico
Europe South America
GJ
297,246
191,612
103,000
50%
Of the energy
consumed in Europe
comes from certified
renewable energy
sources
81
ALSEA AR 2023 BALANCE
Sustainable
stores
In 2023, we adopted new design and
construction guidelines based on best
practices and international sustainable
criteria, such as those described as follows:
• Location in places with pedestrian access
• Respect for the site’s biodiversity
• Low water consumption and energy-efficient systems
• Use of sustainable construction and decoration
materials
• Hiring local suppliers
• Promoting sustainable approaches
• Accessible designs for customers with mobility
limitations, among others
Inclusive
stores
Location and
transportation
Environmental
awareness
Sustainable
sites
Innovation and
design
Water efficien-
cies
Local
sourcing
Energy and
atmosphere
Indoor
environmental
quality
Materials and
resources
82
ALSEA AR 2023 BALANCE
Greener Stores
In 2023, 85 of our Starbucks stores in Mexico and
South America were certified under the Greener Store
Framework.
To obtain this certification, you must successfully comply
with 25 mandatory standards verified by an external
auditor in eight areas related to environmental impacts,
such as energy efficiency, water management and waste
diversion. These standards were developed with the
World Wildlife Fund (WWF) and SCS Global Services.
Greener Stores are known for their eco-friendly construc-
tion systems and operating processes. From the design,
they incorporate technologies for water saving and energy
efficiencies, responsible waste disposal processes,
and eco-friendly packaging materials. These stores are
designed to reduce their energy consumption by 30% and
carbon footprint by 20%. In addition, the new light-co-
lored roof reflects between 70% and 80% of sunlight and
all store signage and interior and exterior lighting use
LED fixtures.
Some of the standards characterizing a Greener Store
are as follows:
Water stewardship
Recovery of water from
the store’s ice machine
and water filtration
system reclaimed to flush
the toilets.
Energy efficiency
Retrofitting store lighting
to LEDs, installing
more energy-efficient
appliances, and standardi-
zing energy-use schedules
and heating/cooling
temperatures.
Renewable energy
Installation of EV charging
stations and on-site solar
energy that help mitigate
greenhouse gas emissions
and improve local air
quality.
Waste diversion
Clear signage around what
items go in what bin and
collecting ground coffee
for compost.
83
Responsible materials
Limit the use of volatile organic
compounds, such as paints, coating,
adhesives and sealants, that can harm the
environment and degrade air quality.
ALSEA AR 2023 BALANCE
Water
GRI: 303-5, FB-RN-140a.1
At Alsea, we have implemented several
initiatives to monitor and reduce water
consumption. We strive to establish the
standardized control of its use and will use
the results to implement new initiatives.
We promote water savings and reuse whenever
possible, especially in water-stressed areas.
Some of the measures we have implemented in all
regions to minimize consumption are as follows:
•
Installation of plumbing pressure regulators to
reduce excess pressure and adjust the amount of
water required
• Use of dual flush cisterns
• The installation of timed faucets
• Use of aerator filters to save water
•
Installation of water recirculation systems
when required
Water consumption in cubic meters (m3)
2021
2022
2023
Mexico
Europe South America
1,689,703
902,782
1,709,994
943,927
1,799,554
1,170,931
140,198
456,966
540,492
* Increase derived from the demand for new units.
84
ALSEA AR 2023 BALANCE
Other initiatives to
help save our planet
The most significant thing we
can do to protect our planet is
to spread our desire to preserve
it for us and future generations.
Every small action we take for the planet
can seem insignificant on its own;
however, when we come together to do
our part, we can achieve extraordinary
results.
Efficient
buildings
Alsea
Mexico
Emissions
reduction
Alsea Supply
Chile
Charcoal
grills
Foster's Hollywood
Spain
As part of our efforts to contribute
to protecting the environment, in
2023, we joined the Efficient Buildings
Challenge organized by the Mexico
City government in collaboration with
SEDEMA, WRI México, Berkeley Lab,
CONUE and the UNAM. Our participa-
tion included our corporate office and
nine stores with different formats.
We contracted a rail transport system
for raw materials, which has allowed
us to obtain significant benefits:
• Accident risk reduction
• Environmental protection
• Road decongestion
• 65% reduction in CO2 emissions
Our Foster’s Hollywood brand is elimi-
nating charcoal grills in remodeled
restaurants by replacing them with
electric or gas grills.
The new openings will have gas or
electric grills as long as operating
conditions allow.
85
ALSEA AR 2023 GRI content index
Alsea has reported the information cited in this GRI
Content Index for the period from January 1 to
December 31, 2023, with reference to the standards.
Estandar
Content
2-1
2-2
2-3
2-4
2-5
2-6
2-7
2-9
2-10
2-11
2-12
2-13
2-14
2-15
2-16
Employees
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
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
Page / Omission
Estandar
Page Omission
2-17
2-18
2-19
2-20
2-22
2-23
2-24
2-25
2-26
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
2-27 Mechanisms for seeking advice and raising concerns
2-29
Compliance with laws and regulations
2-30 Membership associations
3-1
3-2
3-3
Process to determine material topics
List of material topics
Management of material topics
7
Alsea S.A.B de C.V.
6
6
6
7, 39
51
30
30, 31
30, 31
30, 31
30, 31
30, 31
26
29
33
33
33
33
13 - 17, 25
13, 15, 25
25
29
29
30
22
62
21
21
11, 12, 21, 39, 42, 53, 62,
65, 66, 79, 80
86
ALSEA AR 2023 Estandar
Economic Performance
Page/ Omission
Estandar
Waste
201-1 Direct economic value generated and distributed
Indirect Economic Impacts
203-1
Infrastructure investments and services supported
203-2 Significant indirect economic impacts
Procurement Practices
204-1 Proportion of spending on local suppliers
Anti-corruption
205-1 Operations assessed for risks related to corruption
205-2 Communication and training about anti-corruption
policies and procedures
205-3 Confirmed incidents of corruption and actions taken
Energy
302-1
Energy consumption within the organization
302-4 Reduction of energy consumption
302-5 Reductions in energy requirements of products and
services
Water and Effluents
303-5 Water consumption
Emissions
305-1 Direct (Scope 1) GHG emissions
305-2 Energy indirect (Scope 2) GHG emissions
305-3 Other indirect (Scope 3) GHG emissions
Page / Omission
79
79
79
79
79
11
11
11
306-1 Waste generation and significant waste-related impacts
306-2 Management of significant waste-related impacts
306-3 Waste generated
306-4 Waste diverted from disposal
306-5 Waste directed to disposal
38, 39
Employment
401-1 New employee hires and employee turnover
51, 52
401-2 Benefits provided to full-time employees that are not
provided to temporary or part-time employees
401-3 Parental leave
Occupational Health and Safety
403-1 Occupational health and safety management system
403-2 Hazard identification, risk assessment, and incident
investigation
403-3 Occupational health services
403-4 Worker participation, consultation, and communication
on occupational health and safety
403-5 Worker training on occupational health and safety
403-6 Promotion of worker health
403-7 Prevention and mitigation of occupational health and
safety impacts directly linked by business relationships
26
26
25, 29
80, 81
80
80
84
80, 81
80, 81
80, 81
62
61
57
62
62
62, 63
62, 63
62, 63
63
87
ALSEA AR 2023 Estandar
Training and Education
404-1 Average hours of training per year per employee
404-2 Programs for upgrading employee skills and transition
assistance programs
404-3 Percentage of employees receiving regular performance
and career development reviews
Diversity and Equal Opportunity
Page/ Omission
53, 54
53
53
405-1 Diversity of governance bodies and employees
33, 58, 60
405-2 Ratio of basic salary and remuneration of women to men
Local Communities
413-1 Operations with local community engagement, impact
assessments, and development programs
Supplier Social Assessment
414-1 New suppliers that were screened using social criteria
Public Policy
415-1
Political contributions
417-1
Requirements for product and service information and
labeling
Percentage of global
wage gap between
men and women:
26.4%
65
39, 41
Alsea does not grant
any kind of political or
institutional support
to political parties
or institutions that
support them
41, 42
88
ALSEA AR 2023 Table of contents SASB / Restaurants
Code
Content
Resource Management
Energy Management
Unit of measure
Response /
page
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 (%)
Gestión de residuos
Food & Packaging Waste Management
FB-RN-150a.1.
FB-RN-150a.2.
Quality and Safety
Food Safety
FB-RN-250a.1.
(1) Total amount of waste, (2) percentage food waste, and (3) percentage diverted Metric tons (t),
Percentage (%)
(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 (%)
(1) Percentage of restaurants inspected by a food safety oversight body, (2)
percentage receiving critical violations
Percentage (%)
FB-RN-250a.2.
(1) Number of recalls issued and (2) total amount of food product recalled
Number, Metric tons (t)
FB-RN-250a.3.
Number of confirmed foodborne illness outbreaks, percentage resulting in U.S.
Centers for Disease Control and Prevention (CDC) investigation
Number, Percentage (%)
81
84
79, 80
79, 80
89
ALSEA AR 2023 Responsible consumption
Nutritional Content
FB-RN-260a.1.
FB-RN-260a.2.
FB-RN-260a.3
Supply chain
FB-RN-430a.1.
FB-RN-430a.2.
FB-RN-430a.3.
Team members
(1) Percentage of meal options consistent with national dietary guidelines and
(2) revenue from these options
Percentage (%),
Reporting currency
(1) Percentage of children’s meal options consistent with national dietary guide-
lines for children and (2) revenue from these options
Percentage (%),
Reporting currency
Number of advertising impressions made on children, percentage promoting
products that meet national dietary guidelines for children
Percentage (%)
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
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
Discussion of strategy to manage environmental and social risks within the
supply chain, including animal welfare
n/a
FB-RN-310a.1.
(1) Voluntary and (2) involuntary turnover rate for restaurant employees
Percentage (%)
FB-RN-310a.2.
FB-RN-3101.3.
(1) Average hourly wage, by region and (2) percentage of restaurant employees
earning minimum wage, by region
Reporting currency, Percen-
tage (%)
Total amount of monetary losses as a result of legal proceedings associated
with (1) labor law violations and (2) employment discrimination
Reporting currency, Percen-
tage (%)
FB-RN-000.A
Number of employees at (1) company-owned and (2) franchise locations
Number
42
39
39
39
51, 52
62
51
90
ALSEA AR 2023 United Nations Global Compact Principles
Principles
Principle 1:
Businesses should support and respect the protection of internationally proclaimed human rights
United Nat ions Global
Principle 2:
Businesses should make sure that they are not complicit in human rights abuses
Compact Principles
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
44, 64
44
62
44
44
67
78
78 - 85
80 -81
26
91
ALSEA AR 2023 financial
data
Annual Corporate Practices Committee Report
Audit Committee's Annual Report
Independent Auditors' Report
Consolidated Statements of Financial Position
Consolidated Statements of Comprehensive Income
Consolidated Statements of Other Comprehensive Income
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
1
2
3
4
5
6
7
8
9
92
ALSEA AR 2023 Annual report of the corporate
practices committee
to the Board of Directors of Alsea, S.A.B. de C.V.:
Mexico City on February 28, 2024.
In compliance with Article 42 and 43 of the Mexican Securities Market Law, and cn behalf of the
Corporate Practices Committee2 1 hereby submit to you my report on the main activities we
carried out during the year that ended on December 31, 2023. In the development of our work, we
have tüen 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
offeers 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
Ill. paragraph D of the Securities Market Law, so it was not necessary to make any recommenda-
tion in this regard.
2. The quarterly and cumulative results of the 2023 Bursatility Plan were presented.
3. We were presented with the Shareholder Cost restatement applicable at the end of each quarter
of2023, using the methodology authorized by the Board of Directors.
4. We received a quarterly summary of the risk management operations through "Exchange rate
fonvards" (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 longterm credit
coverage, as well as compliance with the Covenants.
5.
6. We were presented with the 2023 Budget draft, for which we requested several modifications to
be presented to the Board.
7. During the period covered bv 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 2023 was presented.
10. We supervised the Compensation plan for the relevant executives referred to in article 28, section
Ill, paragraph d) ofthe 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 ofthe 2023 Performance Evaluation of relevant executives were presented to us, with
which this committee verified the mechanism implemented by the Company to identify the perfor-
mance of such executives, and we have no observations in this regard.
13. The Corporate Human Resources Management presented the 2023 Compensation Strategy for
the executive levels. This Committee recommended to the Board of Directors the approval ofthis
strategy.
14. The General Management informed us about the adjustments to be made to the company's
organizational structures
15. At each and every meeting of the Board of Directors, a report on the activities cf 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.
16. Finally, I would like to mention that, as part of the activities we carried out, including the prepa-
ration of this report, we have always listened to and taken into account the point of view of the
relevant managers and direetors, without there being a difference of opinion to highlight.
León Kraig Eskenazi
Corporate Practices Committee
Chairman
93
ALSEA AR 2023
Annual report of the audit
committee
To the Board of Directors of Alsea, S.A.B. de C.V.,
Mexico City on February 28, 2024.
According to the Mexican Securities Law, Articles 42 and 43, and the Audit Committee Regulations,
I inform you of our activities during the year ending December 31, 2023. In the development of
our work, we have kept in mind the recommendations established in the Code of Best Corporate
Governance Practices and, under 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
The company's processes were identified and evaluated to measure and manage the main risks
in an integrated and global manner in all the geographies where it operates, as well as the
work plans to address them and mitigate their potential impact. Likewise, the organization's
preparedness to respond to and recover from incidents due to the materialization of these
risks has also been assessed.
financial statements. We were informed promptly of their conclusions and reports on the
annual financial statements, including the communication referred to in the General Provisions,
Article 35, applicable to entities and issuers supervised by the National Banking and Securities
Commission and contracting external auditing services for basic financial statements ("Sole
Circular of External Auditors").
We followed up on implementing the observations and recommendations they developed
during their work. We reviewed the reports issued by the External Auditors referred to in the
Sole Circular of External Auditors.
We authorized the fees paid to the external auditors for audit services and other permitted
additional or complementary services, ensuring they did not interfere with their independence
from the company. Considering Management's views, we evaluated their services for the previous
year, and we began the evaluation process for fiscal year 2023.
II. INTERNAL CONTROL
IV. INTERNAL AUDIT
We ensured that management, in compliance with its internal control responsibilities, has
established appropriate processes and policies. In addition, we followed up on the comments
and observations made by the External and Internal Auditors during their work.
III. EXTERNAL AUDIT
We recommend to the Board of Directors the engagement of the external auditors of the
Group and subsidiaries for the fiscal year 2023. To this end, we ensure their independence
and compliance with the requirements established by law. We discussed their approach and
work program with them.
To maintain its independence and objectivity, the Internal Audit area functionally reports to
the Audit Committee.
Promptly, we reviewed and approved their annual program of activities. To prepare it, Internal
Audit carried out a process of risk identification, analysis of impacts on processes, and evaluation
of the associated controls in the organization's operation, as well as support in developing
action plans for their correct mitigation.
We receive quarterly reports on the progress of the approved work program, any variations
it may have had, and the causes that originated them.
We maintained constant and direct communication with them to learn about their work progress
and any observations they had and take note of the comments on their review of the annual
We followed up on the observations and suggestions they developed and their timely imple-
mentation.
94
ALSEA AR 2023
We received and analyzed the annual report on transactions with related parties to verify
that they were carried out under existing policies and at market securities. For such purposes,
opinions were requested, and the corresponding appraisals were performed.
Following Best Corporate Practices, we asked a third party to evaluate the internal audit function.
During 2023 and 2024, the recommendations of the respective report must be implemented.
V. FINANCIAL INFORMATION, ACCOUNTING POLICIES, AND REPORTS TO THIRD PARTIES.
We reviewed the process of preparing the Company's quarterly and annual financial statements
with the persons in charge. We recommended their approval and authorization to be published
to the Board of Directors. As part of this process, we considered the opinions and observations
of the external auditors. We ensured that the criteria, accounting, and information policies used
by management to prepare the financial information were sufficient and applied consistently
with the previous year. Accordingly, the information presented by management fairly reflects
the financial position, results of operations, cash flows, and changes in the Company's financial
position for the year ended December 31, 2023.
We also reviewed the quarterly reports prepared by Management for presentation to shareholders
and the public: they were prepared under International Financial Reporting Standards (IFRS),
and they use the same accounting criteria used to prepare the annual information. We verified
that a comprehensive process is in place to provide reasonable assurance of its content. In
conclusion, we recommended that the Board authorize its publication.
We received communication from the auditor on the key audit matters that, in the auditor's
professional judgment, have been most significant in this year's audit. We did not observe
any material adjustments or deviations that could impact the issued financial information.
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 different legal provisions to which it is bound: they were adequately
disclosed in the financial information.
We periodically review the various tax, legal, and labor contingencies in the company; we
monitor 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 followed up on promptly
during this fiscal year:
a) In 2014, the Ministry of Finance of Mexico City assessed Italcafé S.A. de C.V., for the
fiscal year 2010, taxable income concerning 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), although such income was accrued by the latter company, giving it all
the corresponding tax effects. On November 28, 2018, the Tax Prosecutor's Office of
Mexico City issued a partially favorable resolution of the motion of revocation against
the determinant issued by the Ministry of Finance. It also requested the supervening
evidence provided be considered and a new resolution be issued. In January 2019, the
Company filed the corresponding means of defense against the resolution issued by
the Tax Prosecutor's Office of Mexico City. Finally, the company obtained a judgment
declaring the plain and simple nullity of the resolution determining the tax credit.
Therefore, the matter is definitively resolved.
b) In March 2016, the Tax Administration Service (hereinafter, "TAS") initiated domiciliary
visits to Grupo Amigos de San Ángel, S.A. de C.V. (GASA), and Italcafe S.A. de C.V. (Italcafe),
for the fiscal 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 to clarify and refute these observations. Additionally, a request for a
Conclusive Agreement was filed with the Procuraduría de Defensa del Contribuyente
(hereinafter, “PRODECON”). The instances in PRODECON were resolved in January 2019
without reaching a consensus with the TAS. Finally, the companies filed the means of
defense through the courts in August 2019 for GASA and in November for ITALCAFE. The
matter is in process.
c) In September 2017, the TAS initiated a review process for Operadora Alsea de Restaurantes
Mexicanos S.A., de C.V. (OARM) for the fiscal year 2014. The foregoing derived from the
sequential review that began with the certified public accountant who audited the
acquisition of the VIPS business for tax purposes.
During the 2018 fiscal year, various information requested by the tax authorities was
submitted, which 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, and a request was made for a conclusive
agreement with PRODECON. On July 30, 2019, PRODECON terminated the conclusive
agreement procedure as there was no consensus with the TAS. As a result, in February
2021, the TAS issued an official notice of liquidation of the tax credit for 99.9 million
Mexican pesos. On March 23, 2021, the Company filed an appeal for revocation of the
tax assessment before the tax authorities.
95
ALSEA AR 2023
On June 14, 2023, OARM filed a nullity action before the Federal Court of Administrative
Justice against the resolution issued on April 27, 2023, by the Large Taxpayers Litigation
Administration "1", which resolved the appeal filed by OARM in the sense of confirming
the different resolution issued by the Central Administration for the Audit of Corporate
Groups. The matter is currently in process.
d) In the case of Alsea, S.A.B. de C.V. (ALSEA), the TAS initiated in December 2017 a review
process and, in December 2018, issued an official notice of observations in which it
deems some objections regarding the acquisition of the VIPS brand. For such purpose,
it submitted additional information to refute the objections made and 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 TAS. As a result, in
February 2021, the TAS issued an official notice of liquidation of the tax credit for 3,781
million Mexican pesos. On March 23, 2021, the Company filed an appeal for revocation
of the tax assessment before the tax authorities.
On June 13, 2023, ALSEA filed a nullity action before the Federal Court of Administrative
Justice against the resolution issued on April 27, 2023, by the Large Taxpayers Litigation
Administration "1", which resolved the appeal filed by ALSEA in the sense of confirming
the different resolution issued by the Central Administration for the Audit of Corporate
Groups. The matter is currently in process.
VIII. ADMINISTRATIVE ASPECTS
We hold regular meetings with Management to inform us 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 deem it appropriate, we request the support and opinion of independent
experts. Likewise, we were unaware of any significant non-compliance with operating policies,
internal control systems, and accounting policies.
We hold executive meetings with the exclusive participation of the members of the Committee,
during which agreements and recommendations for Management are established.
The Chairman of the Audit Committee reported quarterly to the Board of Directors on the
activities that were carried out.
The work we carried out was duly documented in the minutes prepared for each meeting,
which were reviewed and approved promptly by the members of the Committee.
VII. CODE OF CONDUCT
With the support of Internal Audit, we ensure that our personnel comply with the Company's
Code of Business Conduct, that there are adequate processes for its updating and dissemination
to personnel, and that the corresponding sanctions apply in cases of detected violations.
Sincerely,
C.P. Alfredo Sanchez Torrado
Presidente del Comité de Auditoria
We reviewed the complaints received in the system established by the Company for this
purpose, following up on their correct and timely attention.
96
ALSEA AR 2023
Independent auditors' report
to the Board of Directors and Stockholders of Alsea, S.A.B. de C.V.
Opinion
Key Audit Matters
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, 2023, 2022 and 2021, 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.
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.
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, 2023, 2022 and 2021,
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.
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:
Design Testing and Implementation of Internal Control, 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.
97
ALSEA AR 2023 As discussed in Note 3o to the consolidated financial statements, the Entity has recorded an
amount of $32,484 $140,703 and $184,430 (thousands of Mexican pesos) for impairment as of
December 31, 2023, 2022 and 2021, respectively.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
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 29.
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.
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.
98
ALSEA AR 2023
- 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.
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.
- 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.
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Member of Deloitte Touche Tohmatsu Limited
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Entity to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
C. P. C. Carlos Alberto Torres Villagómez
Mexico City, Mexico
April, 10, 2024
99
ALSEA AR 2023 Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated statements of financial position
At December 31, 2023, 2022 and 2021
(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
Put option on non-controlling interest
Carrot River Holding, S. A. R. L.
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
2023
2022
2021
Liabilities and stockholders’ equity
Notes
2023
2022
2021
5 $
6,409,798 $
6,086,817 $
6,893,433
Current maturities of long-term debt
16 $
388,217 $
1,277,638 $
1,638,000
Current liabilities
6
7
8
14
11
9
12
19
1,426,215
1,247,211
1,070,153
Current obligation under finance leases
866,979
759,422
442,152
578,533
355,293
448,110
Debt instruments
Suppliers
2,750,665
2,895,326
2,009,258
Factoring of suppliers
-
14,188
-
-
180,816
186,896
430,711
-
-
-
Accounts payable to creditors
Accrued expenses and direct employee benefits
Option to sell the non-controlling interest
870,514
641,421
Total current liabilities
13,011,502
12,134,741
11,417,668
Long-term liabilities
861,096
-
-
179,780
670,190
180,816
207,810
156,903
877,016
-
233,264
131,867
15,662,476
15,369,639
15,277,931
17,215,823
20,435,725
22,274,256
24,915,068
26,664,038
27,796,564
5,587,845
3,102,781
5,402,823
64,422,088
66,787,902
71,993,721
$
77,433,590 $ 78,922,643 $ 83,411,389
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
10
17
18
16
10
17
18
19
20
22
3,315,031
4,103,865
4,415,950
1,350,000
-
1,000,000
4,265,968
4,252,803
1,501,931
4,172,708
7,030,557
1,123,439
1,375,794
2,971,439
1,007,798
4,861,118
4,446,604
5,667,413
3,854,182
-
-
23,147,851
21,538,631
19,333,973
4,828,112
3,762,760
12,012,739
15,101,829
17,720,573
19,347,324
19,553,791
22,748,440
17,078,340
-
1,123,439
1,272,474
260,617
1,328,149
3,225,633
390,524
897,384
691,056
826,746
318,586
894,135
305,968
3,710,272
348,250
44,688,655
48,088,984
54,969,502
67,836,506
69,627,615
74,303,475
466,996
478,749
478,749
7,725,728
8,675,410
8,676,827
3,692,763
885,528
777,481
272,330
(620,447)
660,000
See accompanying notes to the consolidated financial statements.
Non-controlling interest
Total stockholders’ equity
Total liabilities and stockholders’ equity
Reserve for obligation under put option of non-controlling
23
(808,098)
(808,098)
(808,098)
Other comprehensive income items
(3,306,454)
(1,051,855)
(314,040)
Stockholders' equity attributable to the controlling interest
8,656,463
8,344,017
23
940,621
951,011
8,072,991
1,034,923
9,597,084
9,295,028
9,107,914
$
77,433,590 $ 78,922,643 $ 83,411,389
100
ALSEA AR 2023 Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated statements of comprehensive income
For the years ended December 31, 2023, 2022, 2021
(Figures in thousands of Mexican pesos)
Continuing operations
Net sales
Cost of sales
Cost of distribution
Depreciation and amortization
Employee benefits
Services
Advertising
Royalties
Repair and maintenance
Distribution
Other operating expenses
Operating income (loss)
Comprehensive financing result:
Interest income
Interest expenses
Notes
2023
2022
2021
Notes
2023
2022
2021
Earnings per share:
25 $ 76,231,048 $ 68,831,305 $ 53,379,469
26
23,101,531
20,960,639
15,591,274
Basic and diluted net earnings per share from continuing
operations (cents per share)
9, 11
y 12
1,899,689
1,551,410
1,161,787
8,189,381
7,701,750
8,178,329
19,620,034
17,203,057
13,759,593
2,390,080
2,958,683
2,158,735
1,970,376
2,414,136
1,719,398
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
2,622,562
2,356,674
1,685,022
Cumulative translation adjustment, net of income taxes
1,496,377
1,368,225
1,090,474
1,343,656
1,317,365
27
5,382,388
5,074,845
8,026,615
6,368,281
1,037,100
2,609,417
4,132,939
Total comprehensive income (loss), net of income taxes
Comprehensive income (loss) for the year attributable to:
Controlling interest
(815,110)
(362,643)
(141,707)
4,751,228
3,940,429
3,508,158
Non-controlling interest
24 $
3.66 $
2.07 $
0.88
$
3,041,618 $
1,679,268 $
683,525
(417,629)
1,537
322,176
(2,227,752)
(2,321,668)
74,942
(16,715)
(48,593)
(747,449)
(737,815)
41,560
3,044
620,457
(164,425)
500,636
719,950 $
941,453 $
1,184,161
660,683 $
1,000,113 $
1,234,821
59,267 $
(58,660) $
(50,660)
$
$
$
Changes in the fair value of financial instruments
Exchange loss (gain), net
Equity in results of associated companies
Income (loss) before income taxes
19
14
384,102
(692,752)
225,534
(120,340)
11,152
(110,747)
3,627,468
3,814,472
3,135,364
3,404
(223)
4,402,551
2,553,586
1,840
999,415
Income tax (benefit)
19
1,360,933
874,318
315,890
Consolidated net income (loss) from continuing operations
$
3,041,618 $
1,679,268 $
683,525
Net income (loss) for the year attributable to:
Controlling interest
Non-controlling interest
2,982,351
1,737,928
734,185
$
59,267 $
(58,660) $
(50,660)
See accompanying notes to the consolidated financial statements.
101
ALSEA AR 2023 Alsea, S.A.B. de C.V. and Subsidiaries
Changes in Stockholders’ Equity
For the years ended December 31, 2023, 2022, 2021
(Figures in thousands of Mexican pesos)
Contributed capital
Retained earnings
Capital
stock
Premium
on issuance
of share
Reserve for
repurchase
of shares
Reserve for
obligation
under put
option of
noncontrolling
interest
Legal
reserve
etained
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, 2021
$
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
Deferred tax (IAS 12 amendment
-
-
-
-
-
534,771
-
-
-
-
534,771
-
534,771
Balances at January 1,2021
adjusted
478,749
8,676,827
660,000
(2,013,801)
100,736
(249,665)
1,122,634
(252,304)
(1,620,792)
(64,214)
6,838,170
1,330,446
8,168,616
Other movements
Comprehensive income
-
-
-
-
-
-
1,205,703
-
-
-
Balances at December 31, 2021
478,749
8,676,827
660,000
(808,098)
100,736
Repurchase of shares (Note 23a)
Increase in repurchase fund
(Note 24)
Other movements
comprehensive utility
-
-
-
-
(1,417)
-
-
-
(727,670)
340,000
-
-
-
-
-
-
-
-
-
-
(1,205,703)
734,185
(721,183)
-
(340,000)
-
-
-
-
620,457
41,560
(164,425)
1,743,091
(210,744)
(1,785,217)
-
3,044
(61,170)
-
(244,863)
(244,863)
1,234,821
8,072,991
(50,660)
1,034,923
1,184,161
9,107,914
-
-
-
-
-
-
-
-
-
1,737,928
(48,593)
74,942
(747,449)
-
-
-
(729,087)
-
-
(16,715)
(77,885)
1,000,113
8,344,017
Balances at December 31, 2022
478,749
8,675,410
272,330
(808,098)
100,736
676,745
1,694,498
(135,802)
(2,532,666)
Repurchase of shares (Note 22a)
(11,753)
(949,682)
613,198
Other movements
Comprehensive utility
-
-
-
-
-
-
-
-
-
-
-
-
-
(67,069)
2,982,351
-
-
-
67,069
-
-
-
-
(348,237)
-
322,176
(417,629)
(2,227,752)
1,537
660,683
-
-
(25,252)
(58,660)
(729,087)
-
(25,252)
941,453
951,011
9,295,028
-
(348,237)
(69,657)
59,267
(69,657)
719,950
Balances at December 31, 2023
$
466,996
$
7,725,728
$
885,528
$
(808,098)
$
100,736
$
3,592,027
$
2,016,674
$
(486,362)
$ (4,760,418)
$
(76,348)
$
8,656,463
$
940,621
$
9,597,084
See accompanying notes to the consolidated financial statements.
102
ALSEA AR 2023 Alsea, S.A.B. de C.V. and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2023, 2022
(Figures in thousands of Mexican pesos)
Notes
2023
2022
2021
Notes
2023
2022
2021
Cash flows from operating activities:
Consolidated net income (loss)
Adjustment for:
Income taxes (benefit)
Equity in results of associated companies
Interest expense
Interest income
$
3,041,618 $
1,679,268 $
683,525
Proceeds from equipment and property
Cash flows from investing activities:
Interest collected
1,360,933
874,318
(3,404)
223
315,890
(1,840)
Store equipment, leasehold improvements and property
Acquisition in investment in shares of associated companies
4,751,228
3,940,429
3,508,158
Acquisitions of business, net of cash acquired
(815,110)
(362,643)
(141,707)
Net cash flows used in investing activities
(Gain) loss from decommissioning of store equipment,
improvements to leased premises and properties and intangibles
Impairment goodwill
Employee benefit
Changes in the fair value of financial instruments
Depreciation and amortization
12
20
9,11 y
12
188,804
76,071
(40,727)
32,484
60,136
384,101
140,703
55,731
225,534
184,430
29,062
(120,340)
8,249,071
7,583,840
8,178,329
17,249,861
14,213,474
12,594,780
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
Net cash flows provided by operating activities
See accompanying notes to the consolidated financial statements.
(395,951)
(348,352)
(252,500)
(263,732)
(141,028)
36,665
14,187
(14,187)
-
(212,115)
(1,043,572)
(461,157)
54,147
1,178,595
126,137
(135,486)
1,933,190
367,996
576,613
265,064
353,683
(265,155)
2,329,282
1,210,780
(1,505,837)
(1,735,963)
(101,859)
(529,137)
(465,469)
434,048
15,451,000
14,959,885
14,656,117
11
19
18
309,021
815,110
-
362,643
142,796
141,707
(5,284,116)
(4,373,122)
(2,881,888)
-
-
(25,259)
(39,917)
-
(1,113,251)
(4,159,985)
(4,035,738)
(3,750,553)
4,110,862
209,287
179,210
(3,544,505)
(8,216,547)
(10,161,796)
-
-
6,854,473
10,257,850
(1,000,000)
-
(3,788,033)
(2,991,894)
(2,457,826)
(69,657)
(25,252)
(244,863)
(5,130,210)
(5,320,062)
(5,738,455)
(348,237)
(729,087)
-
(8,769,780)
(11,219,082)
(8,165,880)
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
Net (decrease) increase in cash and cash equivalents
2,521,235
(294,935)
2,739,684
Exchange effects on value of cash
(2,198,254)
(511,681)
221,340
Cash and cash equivalents:
At the beginning of the year
6,086,817
6,893,433
3,932,409
At the end of year
$
6,409,798 $
6,086,817 $
6,893,433
103
ALSEA AR 2023 Alsea, S.A.B. de C.V. and Subsidiaries
Notes to the Consolidated
Financial Statements
For the years ended December 31, 2023, 2022 and 2021
(Figures in thousands of Mexican pesos)
1. Activity, main operations and significant events
Operations
Significant events
Alsea, S.A.B. de C.V. and Subsidiaries (Alsea or the Entity) was incorporated 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.
a. Effects of Hurricane OTIS - In October 2023, Hurricane Otis affected the Mexican pacific coast,
causing damage to 30 stores, which have extensive insurance for catastrophe coverage, for
which the replacement coverage of the stores' fixed assets and equipment and payroll insurance
for our collaborators did not represent a significant expense for Alsea.
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 and Domino's Pizza brands. In
Spain, Alsea operates the brands Foster's Hollywood, Burger King, Domino's Pizza, VIPS, VIPS
Smart, Starbucks, Ginos, Fridays, Ole Mole
b. Sale of Operation of the El Portón Brand in Mexico - In September 2023, an agreement was
reached for the sale of the “El Portón” operations in Mexico. As part of said agreement, there
will be a transition period to perfect said transaction and Alsea will stop operating the 15 units
of “El Portón” and 2 of “Corazón de Barro” that it had in said country at the end of the first
quarter of 2023.
c. Development of the Starbucks brand in Paraguay - In April 2023, Alsea signed a contract with
Starbucks to operate and develop Starbucks brand establishments in Paraguay.
d. Alsea announces the successful pricing of senior bonds maturing in 2027 for 300 million euros
in international markets - On January 21, 2022, the pricing of senior bonds for 300 million euros
took place, at an interest rate of 5.5% per year, issued through its subsidiary Food Service
Project, S. A. and guaranteed by Alsea (the “Euro Bonds 2027”) and with the option of partial
or complete settlement as of January 21, 2024 and with a maturity of January 21 of 2027.
e. 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.
104
ALSEA AR 2023
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
2. Application of new and revised International Financial Reporting Standards
a. Application of new and revised International Financing Reporting Standards (“IFRSs” or “IAS”)
and interpretations that are mandatorily effective for the current year
f. 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 semiannually and with the option of partial or full settlement from December 14, 2023.
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, 2023. Its adoption has not had a material impact on the disclosures or the
amounts reported in these financial statements.
g. 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.
On February 26, 2024, a share purchase agreement was signed between Alsea SAB de CV (Alsea)
and the minority partners of Food Service Project SL (FSP), a subsidiary of Alsea and operator
of various brands in Europe. With this agreement, Alsea acquires 23.23% of the minority stake
in FSP's capital. The conditions of the purchase are disclosed in note 32 on subsequent events.
h. 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.
i. 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.
Amendments to IAS 1
Presentation of Financial
Statements and Practice Paper 2
Making Judgments on Materiality
– Disclosures of Accounting
Policies
The Group has adopted the IAS 1 amendments for the first
time this year. The amendment changes the requirements
in IAS 1 with respect to accounting policy disclosures. The
amendment replaces all references to the term "significant
accounting policies" with "material accounting policy
information."
Accounting policy information is material if, when considered
in conjunction with other information included in the
financial statements, it can reasonably be expected to
influence the decisions that primary users of general
purpose financial statements make based on those financial
statements.
The supporting paragraphs in IAS 1 are also amended to
clarify that information related to transaction accounting
policies, other intangible events or conditions need not
be disclosed.
Accounting policy information may be material because
of the nature of the related transactions, other events or
conditions, even if the amount of the events is immaterial.
However, not all information relating to accounting policies
for material transactions, other events or conditions is
itself material.
The IASB has developed guides and examples to explain
and demonstrate the application of the four-step process
outlined in Practice Paper 2.
105
ALSEA AR 2023
Amendments to IAS 12 Income
Taxes - Deferred taxes on assets
and liabilities arising from a
single transaction.
The amendments introduce an additional exception to the
initial recognition exception. According to the amendments,
an entity does not apply the initial recognition exemption for
transactions that result in equal cumulative and deductible
time differences, for tax purposes. Depending on applicable
tax law, cumulative and deductible temporary differences
may arise at the initial recognition of assets and liabilities
in a transaction that is not a business combination and
does not affect accounting or tax results.
The amendments to IAS 12 provide that an entity is required
to recognize deferred tax assets and relative liabilities,
considering that the recognition of any active deferred tax
is subject to the recoverability criteria of IAS 12.
Concept
2021
Figures
previously
reported
Advanced
Adjusted
balances
Deferred income taxes assets
$
4,968,996 $
433,827 $
5,402,823
Income tax
Retained earnings
2022
214,946
(784,436)
100,943
(534,771)
315,889
(249,665)
Deferred income taxes assets
$
2,637,415 $
465,366 $
3,102,781
Income tax
Retained earnings
905,857
(784,436)
(31,538)
(433,828)
874,319
(350,608)
Amendments to IAS 12 Income Taxes – Interna-
tional Tax Reform – Pillar 2
Amendments to IAS 8 Changes
in Accounting Policies, Estimates, and Errors –
Definition of Accounting Estimate.
The Group has adopted the amendments to IAS
12 for the first time this year. The IASB amended
the scope of IAS 12 to clarify that the standard
applies to taxes arising from tax laws enacted
or substantially enacted to implement the Pillar
2 model rules published by the Organization
for Economic Co-operation and Development
("OECD"), including tax laws that implement
minimum additional qualified domestic taxes
as described in those rules.
The amendment s introduce a temporar y
exception to the deferred tax requirements in
IAS 12, so that an entity does not recognize or
disclose information on deferred tax assets
and liabilities related to taxes arising from the
application of Pillar 2.
Continuing with the amendments, the Panel
is required to disclose that it has applied the
exception and to separately disclose its current
tax expense or income related to the application
of Pillar 2.
The Group has adopted the amendments to IAS
8 for the first time this year. The amendments
replace the definition of a "change in accounting
estimate" with the definition of "accounting
estimate." Under the new definition, accounting
estimates are monetary amounts in financial
statements that are not subject to certainty in
their measurement. The definition of a change
in accounting estimate was eliminated
106
ALSEA AR 2023
New and amended IFRS Standards that are not yet effective
Amendments to IAS 1 Presentation of Financial Statements - Non-Current Liabilities with Covenants
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
Classification of liabilities as current or non-current.
Amendments to IAS 1
Non-current liabilities with covenants
Amendments to IAS 7
Financing Provider Agreements
Amendments to IFRS 16
Lease liabilities in a sale-lease transaction.
The directors do not expect that the adoption of the Standards listed above will have a material
impact on the financial statements of the Group in future periods, except as noted below:
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as
Current and Non-Current
The amendments to IAS 1 published in January 2020 affect only the presentation of liabilities as
current and non-current in the statement of financial position and not the amount or timing at
which any assets, liabilities, income or expenses are recognized, or the information disclosed
about those items.
The amendments clarify that the classification of liabilities as current and non-current is based on
whether the rights in existence at the end of the reporting period, specify that the classification is
not affected by expectations as to whether the entity will exercise its right to defer the settlement
of a liability, explain that rights exist if contractual obligations (covenants) are fulfilled at the
end of the reporting period, and introduce the Definition of 'settlement' to make it clear that
settlement refers to the transfer to the counterparty of cash, equity instruments, other assets
or other services.
Amendments are applied retrospectively for annual periods beginning on or after January 1, 2024,
with the advance application permitted. The IASB has aligned the effective date with the 2022
amendments to IAS 1. If an entity applies the 2020 amendments early, it is also required to apply
the 2022 amendments early.
The amendments specify that only covenants that an entity is required to comply with on or before
the end of the reporting period affect the entity's right to defer payment of the liability for at least
twelve months after the reporting date (and therefore should be considered in evaluating the
classification of a liability as current and non-current). Such covenants affect whether entitlements
exist at the end of the reporting period, even if compliance with the covenants is assessed only
after the reporting date (e.g., a covenant based on the entity's financial position as of the reporting
date that is assessed for compliance only after the reporting date).
The IASB also specifies that the right to defer payment of a liability for at least twelve months
after the reporting date is not affected if the entity only has to comply with a covenant after
the reporting period. However, if the entity's right to defer payment of a liability is subject to
the fulfillment of covenants within twelve months after the reporting date, the entity discloses
information that makes users of the financial statements understand the risk that the liabilities
will be paid within twelve months after the reporting period. This would include information
about the covenants (including the nature of the covenants and when the entity requires them
to be fulfilled), the carrying amount of related liabilities, and the facts and circumstances, if any,
indicating that the entity may have difficulty complying with the covenants.
The amendments are applied retrospectively for annual reporting periods beginning on or
after January 1, 2024. Early implementation of amendments is permitted. If an entity applies the
amendments for a prior period, it is also required to apply the 2020 amendments in advance as well.
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Statements: Disclosures –
Financing Provider Agreements.
The amendments add a disclosure in IAS 7 stating that an entity requires disclosure of information
about financing provider agreements that allow the user of the financial statements to assess
the effects of such agreements on the entity's liabilities and cash flows. In addition, IFRS 7 was
amended to add supplier financing agreements as an example of the requirements to disclose
information on the Entity's exposure to concentration and liquidity risks.
The term "provider agreements" is not defined. Instead, the amendments describe the characteristics
of an arrangement under which an entity would be required to provide information.
107
ALSEA AR 2023
To fulfill the purpose of disclosure, an entity is required to disclose in aggregate form for its
financing provider agreements:
Early application is permitted. If a seller-lessee applies the amendments in advance, this fact
must be disclosed.
To meet the disclosure objective, an entity is required to disclose in aggregate for its financing
provider arrangements:
A seller-lessee applies amendments retrospectively in accordance with IAS 8 for return sale and
lease transactions where it enters after the initial date of application, which is defined as the
beginning of the annual reporting period in which the entity initially applied IFRS 16.
- The terms and conditions of the agreements.
- The carrying amount and other lines in the entity's statements of financial position in
which liabilities relating to the arrangements are presented.
- The carrying amount and other lines for which suppliers have received payment from
financing providers.
- Payday ranges for both financial liabilities that are part of the financing provider agreement
and comparable accounts payable that are not part of the financing provider agreements.
- Liquidity risk information.
The amendments contain specific transition considerations for the first annual reporting period
in which the entity applies the amendments. It is applicable for reporting periods beginning on
or after January 1, 2024.
Amendments to IFRS 16 Leases – Lease liability on a sale and lease on return.
The amendments to IFRS 16 add subsequent measurement requirements for sale and lease
transactions that satisfy the requirements of IFRS 15 to be recorded as a sale. The amendments
require the sellerlessee to determine lease payments or revised lease payments such that
the seller-lessee does not recognize a gain or loss that relates to the right of use retained
by the seller-lessee after the lease commencement date.
The amendments do not affect the gain or loss recognized by the seller-lessee relating to the
partial or total termination of a lease. Without these new requirements, a seller-lessee could have
recognized a gain on the right of use it retains solely by remetering the lease liability (e.g., after
a modification to a lease or change in the term of a lease) by applying the general requirements
in IFRS 16. This could have been particularly the case in the case of leases that include lease
payments that are not dependent on an index or rate.
As part of the amendments, the IASB amended an illustrative example in IFRS 16 and added a
new example to illustrate the subsequent measurement of a right-of-use asset and lease liability
in a salelease-back transaction with variable payments that are not dependent on an index or
rate. The illustrative examples also clarify that the liability arising from a sell-lease transaction
that qualifies as an IFRS 15 sale is a lease liability.
3. Significant accounting policies
a. Statement of compliance
The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards released by IASB.
The entity's management has, at the time of approving the financial statements, a reasonable
expectation that the Entity has the necessary resources to continue operating in the foreseeable
future. Therefore, they continue to adopt the Going Concern accounting basis when preparing
the financial statements.
b. Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for the
revaluation of certain properties and financial instruments that are measured at revalued amounts
or fair values at the end of each reporting period, as explained in the accounting policies below.
i. Historical cost
Historical cost is generally based on the fair value of the consideration given in exchange
for goods and services.
ii. Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date, regardless of whether that price is directly observable or estimated using another
valuation technique.
In estimating the fair value of an asset or a liability, the Entity takes into account
the characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the measurement date.
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Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date, regardless of whether that price is directly observable or estimated using another
valuation technique.
In estimating the fair value of an asset or a liability, the Entity takes into account
the characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the measurement date.
The Entity reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.
When the Entity has less than a majority of the voting rights of an investee, it has power over
the investee when the voting rights are sufficient to give it the practical ability to direct the
relevant activities of the investee unilaterally. The Entity considers all relevant facts and
circumstances in assessing whether or not the Entity’s voting rights in an investee are sufficient
to give it power, including:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets
• The size of the Entity’s holding of voting rights relative to the size and dispersion of
or liabilities that the entity can access at the measurement date;
holdings of the other vote holders;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
iii. Re-expression of financial statements
As of July 1, 2018, accumulated inflation of the last three years in Argentina exceeded
levels of 100%, for which reason the Argentine peso was classified as a currency in a
hyperinflationary economic environment.
As a result, the financial statements of the subsidiaries in that country, whose functional
currency is the Argentine peso, have been re-expressed to adopt the requirements
of International Accounting Standard 29, Financial Information in Hyperinflationary
Economies, (IAS 29) and have been consolidated in accordance with the requirements
of IAS 21, Effects of Variances in the Exchange Rates of the Foreign Currency. The purpose
of applying such requirements is to consider the changes in the general purchasing
power of the Argentine peso and thus present the financial statements in the current
measurement unit at the date of the statement of financial position. Argentina, for
purposes of its financial reporting, updated its figures using the country’s inflation
rate based on official indexes. The financial statements before the re-expression were
prepared using the historical costs method.
c. Basis of consolidation of financial statements
The consolidated financial statements incorporate the financial statements of Alsea, S.A.B. de
C.V. and entities controlled by the Entity. Control is obtained when the Entity:
• Has power over the investee;
•
Is exposed, or has rights, to variable returns from its involvement with the
investee; and
• Has the ability to use its power to affect its returns.
• Potential voting rights held by the Entity, other vote holders or other parties;
• Rights arising from other contractual arrangements; and
• Any additional facts and circumstances that indicate that the Entity has, or does not
have, the current ability to direct the relevant activities at the time that decisions
need to be made, including voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Entity obtains control over the subsidiary and
ceases when the Entity loses control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statements
of income and other comprehensive income from the date the Entity gains control until the
date when the Entity ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners
of the Entity and to the non-controlling interests. Total comprehensive income of subsidiaries
is attributed to the owners of the Entity and to the non-controlling interests even if this results
in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies into line with the Entity’s accounting policies.
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 noncontrolling interests are initially measured at
fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the
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amount of those interests at initial recognition plus the noncontrolling interests’ share of
subsequent changes in equity. All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the Entity are eliminated in full
on consolidation. Total comprehensive income of the subsidiaries is attributed to the owners
of the Company and to the non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
All intercompany balances, transactions and cash flows have been eliminated in consolidation.
Changes in the Entity’s ownership interests in existing subsidiaries
Changes in the Entity’s ownership interests in subsidiaries that do not result in the Entity losing
control over the subsidiaries are accounted for as equity transactions. The carrying amounts
of the Entity’s interests and the non-controlling interests are adjusted to reflect the changes
in their relative interests in the subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the consideration paid or received is
recognized directly in equity and attributed to owners of the Entity.
When the Entity loses control of a subsidiary, a gain or loss is recognized in profit or loss and
is calculated as the difference between (i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the previous carrying amount of the
assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognized in other comprehensive income in relation to that subsidiary
are accounted for as if the Entity had directly disposed of the related assets or liabilities of the
subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/
permitted by applicable IFRSs).
The fair value of any investment retained in the former subsidiary at the date when control is
lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39,
when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
d. Information by segment
The operating segments are reported consistently with the internal reports prepared to
provide information to the Audit Committee, which is responsible for assisting the Board
of Directors, which is why it is considered the body that makes strategic decisions for the
allocation of resources and the evaluation of the operating segments on the established
platform of Corporate Governance.
e. Liquidity
As disclosed in the financial statements as of December 31, 2023, 2022 and 2021, its current
liabilities exceed its current assets by $10,136,349, $9,403,890 and $7,916,305, respectively. The
main financial items have had significant increases compared to the previous year. In the case of
income, the increase was 11% compared to last year, reaching $74,700 as of December 31, 2023;
EBITDA grew 22% compared to the previous year, gaining 1.4 percentage points (pp) and 50% of
net profit. Likewise, investments have been made in the investment cost of projects to continue
operational growth. During the year, 257 points of sale were opened and 219 remodeled. The
operating profit, without considering depreciation, generates approximately 16 billion, which,
added to the 6,600 million of short-term assets without considering cash, are used to meet
the short-term liabilities that the Entity has. The attached consolidated financial statements
do not include those adjustments related to the valuation and classification of assets and
liabilities, which could be necessary in the event that the Entity could not continue its operation.
f. Financial instruments
Financial assets and financial liabilities are recognized when the Entity becomes a party to the
contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit or loss) are added
to or deducted from the fair value of financial assets and financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets and
financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
g. Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis. Regular way purchases or sales are purchases or sales of financial assets
that require delivery of assets within the time frame established by regulation or convention
in the marketplace.
All recognized financial assets are measured subsequently in their entirety at either amortized
cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at
amortized cost:
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• The financial asset is held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are measured subsequently at fair value
through other comprehensive income (FVTOCI):
• The financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling the financial assets; and
• The contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit
or loss (FVTPL).
Despite the foregoing, the Entity may make the following irrevocable election / designation at
initial recognition of a financial asset:
• The Entity may irrevocably elect to present subsequent changes in fair value of an
equity investment in other comprehensive income if certain criteria are met (see (iii)
below); and
• The Entity may irrevocably designate a debt investment that meets the amortized
cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch (see (iv) below).
(i) 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 creditadjusted 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 instru-
ment-byinstrument 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 profittaking; 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’.
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Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is determined
in that foreign currency and translated at the spot rate at the end of each reporting period.
Specifically;
• For financial assets measured at amortized cost that are not part of a designated
hedging relationship, exchange differences are recognized in profit or loss in the
‘other gains and losses’;
• For debt instruments measured at FVTOCI that are not part of a designated hedging
relationship, exchange differences on the amortized cost of the debt instrument are
recognized in profit or loss in the ‘other gains and losses’. Other exchange differences
are recognized in other comprehensive income in the investments revaluation reserve;
• 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.
Lifetime ECL represents the expected credit losses that will result from all possible default
events over the expected life of a financial instrument. In contrast, 12-month ECL represents the
portion of lifetime ECL that is expected to result from default events on a financial instrument
that are possible within 12 months after the reporting date.
(i) Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased
significantly since initial recognition, the Entity compares the risk of a default
occurring on the financial instrument at the reporting date with the risk of a
default occurring on the financial instrument at the date of initial recognition. In
making this assessment, the Entity considers both quantitative and qualitative
information that is reasonable and supportable, including historical experience
and forward-looking information that is available without undue cost or effort.
Forward-looking information considered includes the future prospects of the
industries in which the Entity’s debtors operate, obtained from economic expert
reports, financial analysts, governmental bodies, relevant think-tanks and other
similar organizations, as well as consideration of various external sources of actual
and forecast economic information that relate to the Entity’s core operations.
In particular, the following information is taken into account when assessing whether
credit risk has increased significantly since initial recognition.
• An actual or expected significant deterioration in the financial instrument’s
external (if available) or internal credit rating;
• Significant deterioration in external market indicators of credit risk for a particular
financial instrument, e.g. a significant increase in the credit spread, the credit
default swap prices for the debtor, or the length of time or the extent to which
the fair value of a financial asset has been less than its amortized cost;
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• 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
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.
the debtor;
(ii) Definition of default
• Significant increases in credit risk on other financial instruments of the same
debtor;
• An actual or expected significant adverse change in the regulatory, economic,
or technological environment of the debtor that results in a significant decrease
in the debtor’s ability to meet its debt obligations.
Irrespective of the outcome of the above assessment, the Entity presumes that the
credit risk on a financial asset has increased significantly since initial recognition
when contractual payments are more than 30 days past due, unless the Entity has
reasonable and supportable information that demonstrates otherwise.
Despite the foregoing, the Entity assumes that the credit risk on a financial instrument
has not increased significantly since initial recognition if the financial instrument
is determined to have low credit risk at the reporting date. A financial instrument
is determined to have low credit risk if:
(1) 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
purpose 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
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.
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(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 forwardlooking
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.
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.
When derecognized from a financial asset measured at amortized cost, the difference
between the carrying amount of the asset and the sum of the consideration received
and receivable is recognized in profit or loss. In addition, when derecognition of
an investment in a debt instrument classified as fair value through other compre-
hensive income, the accumulated gain or loss previously accrued in the investment
revaluation reserve is reclassified to profit or loss. In contrast, in the derecognition
of an investment in an equity instrument that the Entity chose at initial recognition
to measure at fair value through other comprehensive income, the accumulated
gain or loss previously accumulated in the investment revaluation reserve is not
reclassified to profit or loss, but is transferred to accumulated earnings (deficit).
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h. 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. inancial 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.
i. Derivative financial instruments
Alsea uses derivative financial instruments (DFI) known as forwards or swaps, in order to a)
mitigate present and future risks of adverse fluctuations in exchange and interest rates, b)
avoid distracting resources from its operations and the expansion plan, and c) have certainty
over its future cash flows, which also helps to maintain a cost of debt strategy.
DFI's used are only held for economic hedge purposes, through which the Entity agrees to the trade
cash flows at future fixed dates, at the nominal or reference value, and they are valued at fair value.
Embedded derivatives: The Entity reviews all signed contracts to identify the existence of
embedded derivatives. Identified embedded derivatives are subject to evaluation to determine
whether or not they comply with the provisions of the applicable regulations; if so, they are
separated from the host contract and are valued at fair value. If an embedded derivative is
classified as trading instruments, changes in their fair value are recognized in income for
the period.
Changes in the fair value of embedded derivatives designated for hedging recognize in based
on the type of hedging: (1) when they relate to fair value hedges, fluctuations in the embedded
derivative and in the hedged item they are valued at fair value and are recorded in income;
(2) when they relate to cash flows hedges, the effective portion of the embedded derivative is
temporarily recorded under other comprehensive income, and it is recycled to income when
the hedged item affects results. The ineffective portion is immediately recorded in income.
Strategy for contracting DFI's: Every month, the Corporate Finance Director's office must
define the price levels at which the Corporate Treasury must operate the different hedging
instruments. Under no circumstances should amounts above the monthly resource requirements
be operated, thus ensuring that operations are always carried out for hedging and not for
speculation purposes. Given the variety of derivative instruments available to hedge risks,
Management is empowered to define the operations for which such instruments are to be
contracted, provided they are held for hedging and not for speculative purposes.
Processes and authorization levels: The Deputy Director of Corporate Treasury must quantify
and report to the Director of Administration and Finance the monthly requirements of operating
resources. The Director of Administration and Finance may operate at his discretion up to 50%
of the needs for the resources being hedged, and the Administration and Financial Management
may cover up to 75% of the exposure risk. Under no circumstances may amounts above the limits
authorized by the Entity's General Management be operated, in order to ensure that operations
are always for hedging and not for speculation purposes. The foregoing is applicable to interest
rates with respect to the amount of debt contracted at variable rates and the exchange rate
with respect to currency requirements. If it becomes necessary to sell positions for the purpose
of making a profit and/or incurring a "stop loss", the Administration and Finance Director must
first authorize the operation.
Internal control processes: With the assistance of the Deputy Director of Corporate Treasury,
the Director of Administration and Finance must issue a report the following working day,
specifying the Entity's resource requirements for the period and the percentage covered by
the Administration and Financial Manager. Every month, the Corporate Treasury Manager will
provide the Accounting department with the necessary documentation to properly record
such operations.
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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.
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.
j. 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.
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.
Cash is presented at nominal value and equivalents are valued at fair value; fluctuations in its
value are recognized in income for the period.
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.
Cash equivalents are represented by investments in money desks and mutual funds and are
recognized at fair value.
k. Inventories and cost of sales
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. 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.
Inventories are valued at the lower of cost or net realizable value. Costs of inventories are
determined using the average cost method.
The Entity reviews the book value of inventories, in the presence of any indication of impairment
that would indicate that their book value may not be recoverable, estimating the net realizable
value, the determination of which is based on the most reliable evidence available, at the time
the estimate of the amount in which they are expected to be made is made.
Net realizable value represents the estimated selling price for inventories less all estimated
cost of completion and costs necessary to make the sale. Cost of sales represents the cost
of inventories at the time of sale, increased, when applicable, by reductions in the value of
inventory during the year to its net realizable value. The Entity records the necessary estimations
to recognize reductions in the value of its inventories due to impairment, obsolescence, slow
movement and other causes that indicate that utilization or realization of the items comprising
the inventories will be below the recorded value.
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l. Store equipment, leasehold improvements and property
n. Intangible assets
Store equipment, leasehold improvements and property are recorded at acquisition cost.
1. Intangible assets acquired in a business combination
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.
m. 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.
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:
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 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 Chang’s brands for an amount of $140,703.
During 2023, the Entity recorded an impairment loss on its El Portón, Starbucks
Coffee, Burger King and Italianni's brands, for an import of $32,484.
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2. Intangible assets acquired separately
(2) The term for each store under this brand is 10 years as of the opening date, with the right to
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.
Brands
Mexico
Argentina
Chile
Colombia
Uruguay
America
Domino’s Pizza
Starbucks Coffee
2025
2037
-
2027
-
2027
Burger King
Depending on opening dates
Chili’s Grill & Bar
2023
P.F. Chang’s
2029 (2)
The Cheesecake
Factory
Depending
on opening
dates
Italianni’s
2031(1)
-
-
-
-
2026
2021 (2)
2021 (2) (5)
-
-
-
-
2026
2033
-
-
2031
2026
-
-
-
-
-
Brands
Spain Luxembourg
Portugal
Andorra
France Netherlands Belgium
Europe
Domino’s
Pizza
Starbucks
Coffee
Fridays
Burger
King
2029(3)
-
-
2030
2030
2030
-
-
-
-
-
2034
2034
2034
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.
a 10-year extension.
(3) Term of 10 years with the right to an extension.
(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.
o. Impairment in the value of long-lived assets, equipment, leasehold improvements, properties,
and other intangible assets
At the end of each reporting period, the Entity reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). When
it is not possible to estimate the recoverable amount of an individual asset, the Entity
estimates the recoverable amount of the cashgenerating 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.
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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,
2023, 2022 and 2021, the Entity recorded an amount of $32,484, $140,703 and the $184,430,
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.
p. 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.
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, Noncurrent 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 noncontrolling 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-bytransaction basis. Other types of non-controlling interests are
measured at fair value or, when applicable, on the basis specified in another IFRS.
When the consideration transferred by the Entity in a business combination includes assets or
liabilities resulting from a contingent consideration arrangement, the contingent consideration
is measured at its acquisition-date fair value and included as part of the consideration
transferred in a business combination.
Changes in the fair value of the contingent consideration that qualify as measurement period
adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional information
obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition
date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that
do not qualify as measurement period adjustments depends on how the contingent consid-
eration 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.
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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.
r. Investment in shares of associated companies and joint venture
An associate is an entity over which the Entity has significant influence. Significant influence is
the power to participate in the financial and operating policies decisions of the investee but
is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the joint arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except when the
investment, or a portion thereof, is classified as held for sale, in which case it is accounted
for in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations.
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.
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.
q. 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-gen-
erating units that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired.
If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to
the unit and then to the other assets of the unit pro rata based on the carrying amount of
each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss.
An impairment loss recognized for goodwill is not reversed in subsequent periods.
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.
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.
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
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ALSEA AR 2023
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.
s. Leases
- The Entity as lessor
Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that
the recoverable amount of the investment subsequently increases.
The Entity discontinues the use of the equity method from the date when the investment ceases
to be an associate or a joint venture, or when the investment is classified as held for sale.
When the Entity retains an interest in the former associate or joint venture and the retained
interest is a financial asset, the Entity measures the retained interest at fair value at that date
and the fair value is regarded as its fair value on initial recognition in accordance with IFRS 9.
The difference between the carrying amount of the associate or joint venture at the date the
equity method was discontinued, and the fair value of any retained interest and any proceeds
from disposing of a part interest in the associate or joint venture is included in the determination
of the gain or loss on disposal of the associate or joint venture.
In addition, the Entity accounts for all amounts previously recognized in other comprehensive
income in relation to that associate or joint venture on the same basis as would be required
if that associate or joint venture had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognized in other comprehensive income by that
associate or joint venture would be reclassified to profit or loss on the disposal of the related
assets or liabilities, the Entity reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when the equity method is discontinued.
The Entity continues to use the equity method when an investment in an associate becomes an
investment in a joint venture or an investment in a joint venture becomes an investment in an
associate. There is no remeasurement to fair value upon such changes in ownership interests.
When the Entity reduces its ownership interest in an associate or a joint venture but the Entity
continues to use the equity method, the Entity reclassifies to profit or loss the proportion of
the gain or loss that had previously been recognized in other comprehensive income relating
to that reduction in ownership interest if that gain or loss would be reclassified to profit or
loss on the disposal of the related assets or liabilities. When a group entity transacts with an
associate or a joint venture of the Entity, profits and losses resulting from the transactions with
the associate or joint venture are recognized in the Entity’s consolidated financial statements
only to the extent of interests in the associate or joint venture that are not related to the Entity.
The Entity executes lease contracts for certain investment properties as the lessor. The
Entity also rents the equipment needed by retailers for the presentation and development
of their activities and the equipment manufactured by the Entity.
The leases in which the Entity acts as lessor are classified as capital leases or
operating leases. When contractual terms substantially transfer all the risks and
rewards of ownership to the lessee, the contract is classified as a capital lease. All
other contracts are classified as operating contracts.
When the Entity acts as an intermediary lessor, it accounts for the main lease and
sublease as two separate contracts. The sublease is classified as a capital lease or
operating lease with regard to the right-of-use asset derived from the main lease.
Rental revenue derived from operating leases is recognized according to the straight-
line method during the relevant lease period. The direct initial costs incurred for
the negotiation and arrangement of the operating lease are added to the book value
of the leased asset and are recognized in conformity with the straight-line method
throughout the lease period.
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.
LThe 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.
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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 remeasures the lease liability (and makes the respective adjustments to the
related right-of-use asset) whenever:
• The lease period is modified or an event or significant change takes place with regard
to the circumstances of the lease, thereby resulting in a change to the assessment
of the purchase option exercise, in which case, the lease liability is measured by
discounting restated rental payments and utilizing a restated discount rate.
• Rental payments are modified as a result of changes to indexes or rates, or a change
in the payment expected under a guaranteed residual value, in which case, the lease
liability is revalued by discounting restated rental payments by using the same
discount rate (unless the change in rental payments is due to a change of variable
interest rate, in which case a restated discount rate is used).
• A lease contract is amended and the lease amendment is not accounted for as a
separate lease, in which case the lease liability is revalued according to the amended
lease period by discounting restated rental payments using a discount rate restated
at the date on which the amendment took effect.
The Entity did not make any of these adjustments in the presented periods.
Right-of-use assets are composed by the initial measurement of the respective lease
liability, the rental payments made on or prior to the starting date, less any received
lease incentive and any initial direct costs. The subsequent valuation is the cost less
accumulated depreciation and impairment losses.
If the Entity assumes an obligation derived from the cost of dismantling and removing a
leased asset, to restore the place where it is located or restore the underlying asset to
the condition required by lease terms and conditions, a provision measured according
to IAS 37 must be recognized. To the extent that costs are related to a right-of-use
asset, they are included in the related right-of-use asset unless they are incurred to
generate inventories.
Right-of-use assets are depreciated during the shorter of the lease period and the
useful life of the underlying asset. If a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset indicates that the Entity plans to exercise
the purchase option, the right-of-use asset is depreciated according to its useful life.
Depreciation begins at the lease starting date.
Right-of-use assets are presented as a separate item in the consolidated statement
of changes in financial position.
The Entity applies IAS 36 to determine whether a right-of-use asset is impaired and
to account for any identified impairment loss, as described in the ‘Property, plant and
equipment’ policy.
Variable leases that do not depend on index or rate are not included in the measurement
of the lease liability and right-of-use asset. The related payments are recognized as an
expense of the period in which the event or condition leading to the payments arises and
are included under the “Other expenses” heading in the consolidated statement of income.
As a practical expedient, IFRS 16 offers the option of not separating non-lease components
and instead recording any lease and its associated non-lease components as a single
agreement. The Entity has not utilized this practical expedient. For contracts containing
lease components and one or more additional lease or non-lease components, the
123
ALSEA AR 2023
Entity assigns the contractual payment to each lease component according to the
relative stand-alone selling price method for all non-lease components. .
t. Foreign currency transactions
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.
In order to consolidate the financial statements of foreign operations carried out independently
from the Entity (located in Latin America and Europe), which comprise 48%, 51% and 50% of
consolidated net income and 53%, 40% and 39% of the total consolidated assets at December
31, 2023, 2022 and 2021, respectively, companies apply the policies followed by the Entity.
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.
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.
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.
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:
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.
- 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.
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)
- Capital movements (contributions or reductions) are converted at the exchange
rate on the date these movements were carried out.
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.
- All conversion differences are recognized as a separate component under stockholders’
Federal Labor Law
equity and form part of other comprehensive income items.
u. Employee benefits
Retirement benefits costs from termination benefits
Payments to defined contribution retirement benefit plans are recognized as an expense when
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.
124
ALSEA AR 2023
The monetary impacts derived from the implementation of the reform are included in the
consolidated statement of comprehensive income for the period under review.
v. Income taxes
The income tax expense represents the sum of the tax currently payable and deferred tax.
1. Current tax
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.
Current income tax (ISR) is recognized in the results of the year in which is incurred.
3. Current and deferred tax for the year
2. Deferred income tax
Deferred tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the consolidated financial statements and the corresponding
tax bases used in the computation of taxable profit. Deferred tax liabilities are
generally recognized for all taxable temporary differences. Deferred tax assets are
generally recognized for all deductible temporary differences to the extent that it
is probable that taxable profits will be available against which those deductible
temporary differences can be utilized.
Current and deferred tax are recognized in profit or loss, except when they relate
to items that are recognized in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognized in other comprehensive
income or directly in equity respectively.
Where current tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the business combination.
w. Provisions
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.
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.
The amount recognized as a provision is the best estimate of the consideration required to
settle the present obligation at the end of the reporting period, taking into account the risks
and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flow.
When some or all of the economic benefits required to settle a provision are expected to be
recovered by a third party, a receivable is recognized as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
Provisions are classified as current or non-current based on the estimated period of time
estimated for settling the related obligations.
125
ALSEA AR 2023
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.
x. Revenue recognition
The Entity recognizes income from the following sources:
Sale of goods
Provision of services
Royalties
Sale of goods
Beverages and food sold by Alsea are transferred to the customer at the time they are delivered
and/or consumed by them. Mostly sales of goods, the payment method is cash and is recorded
at the time they are delivered to the customer.
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.
Estimations and assumptions are reviewed on a regular basis. Changes to the accounting estimations
are recognized in the period in which changes are made, or in future periods if the changes affect
the current period and other subsequent periods.
a. Critical judgments for applying the accounting policies
There are critical judgments, apart from those involving estimations, that the Entity’s management
has made in the process of applying the Entity´s accounting policies and that have the most
significant effect on the amounts recognized in the consolidated financial statements.
Control over Food Service Project, S.L. (Zena Group) and sale option of the non-controlling interest
Note 18 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 18.
126
ALSEA AR 2023
On February 26, 2024, a share purchase agreement was signed between Alsea SAB de CV (Alsea)
and the minority partners of Food Service Project SL (FSP), a subsidiary of Alsea and operator
of various brands in Europe. With this agreement, Alsea acquires 23.23% of the minority stake
in FSP's capital. The conditions of the purchase are disclosed in note 32 on subsequent events.
b. Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
1. Impairment of long-lived assets
The Entity annually evaluates whether or not there is indication of impairment in long-lived
assets and calculates the recoverable amount when indicators are present. Impairment
occurs when the net carrying value of a long-lived asset exceeds its recoverable amount,
which is the higher of the fair value of the asset less costs to sell and the value in-use
of the asset.
Calculation of the value in-use is based on the discounted cash flow model, using the
Entity's projections of its operating results for the near future.
The recoverable amount of long-lived assets is subject to uncertainties inherent to the
preparation of projections and the discount rate used for the calculation.
2. Right-of-use asset
The main aspects considered by the Entity for the implementation of IFRS 16 are: a)
assess, at the start of the contract, whether the right to control the use of an identified
asset for a given period of time is obtained; b) a change in the nature of lease-related
expenses by replacing the operating lease expense determined according to IFRS 16
with the depreciation or amortization of right-of-use assets (in operating costs) and
an interest expense for lease liabilities in interest expenses; and c) the determination
of lease payments because the Entity has variable rental contracts.
The recoverable amount of right-of-use assets is sensitive to the uncertainty inherent
to the preparation of projections and the discount rate utilized in the calculation.
3. Discount rate to determine lease payments
IFRS 16 requires the tenant to discount the lease liability using the interest rate implied
in the lease if that rate can be easily determined. If the interest rate implied in the lease
cannot be easily determined, then the tenant must use its incremental indebtedness
rate. The renter's incremental loan rate is the interest rate that the tenant would have
to pay to borrow for a similar term, with similar security and the funds needed to obtain
an asset of a value similar to the right-to-use asset in a similar economic environment.
There are three steps to determining the incremental loan rate: (i) determining a
benchmark rate, (ii) determining the credit risk adjustment, and, (iii) determining the
specific adjustment of the lease.
4. Income tax valuation
The Entity recognizes net future tax benefits associated with deferred income tax assets
based on the probability that future taxable income will be generated against which
the deferred income tax assets can be utilized.
Evaluating the recoverability of deferred income tax assets requires the Entity to prepare
significant estimates related to the possibility of generating future taxable income.
Future taxable income estimates are based on projected cash flows from the Entity's
operations and the application of the existing tax laws in Mexico, LATAM and Spain.
The Entity's capacity to realize the net deferred tax assets recorded at any reporting date
could be negatively affected to the extent that future cash flows and taxable income
differ significantly from the Entity's estimates.
Additionally, future changes in Mexico's tax laws could limit the capacity to obtain tax
deductions in future periods.
5. Fair value measurements and valuation processes
Some of the Entity's assets and liabilities are measured at fair value for financial reporting
purposes. The Entity's Board of Directors has set up a valuation committee, which is
headed up by the Entity's Financial Director, to determine the appropriate valuation
techniques and inputs for fair value measurements.
127
ALSEA AR 2023
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 22 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.
6. Customers, net
The accounts receivable from customers disclosed in the consolidated statements of financial position
are classified as loans and accounts receivable and therefore they are valued at their amortized cost.
At December 31, 2023, 2022 and 2021, the customer balance is comprised as follows:
Franchises
Other (1)
2023
2022
$
787,972 $
618,824 $
843,541
1,631,513
776,000
1,394,824
2021
436,677
838,576
1,275,253
Expected credit losses
(205,298)
(147,613)
(205,100)
$
1,426,215 $
1,247,211 $
1,070,153
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, 2023, 2022 and 2021 is comprised
as follows:
(1) In others there are concepts such as third parties and vouchers to be 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.
Cash
$
3,599,508 $
3,587,600 $
3,381,941
Inversiones a la vista con vencimiento
original menor a tres meses
2,810,290
2,499,217
3,511,492
2023
2022
2021
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.
Total cash and cash equivalents
$
6,409,798 $
6,086,817 $
6,893,433
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.
The Entity maintains its cash and cash equivalents with accepted financial entities and it has not
historically experienced losses due to credit risk concentration.
To determine the estimate of doubtful receivables, the Entity performs an analysis of the age of
balances per customer and assigns an estimate percentage based on experience. This first analysis
gives an indication of deterioration; Subsequently, an analysis of the financial situation of all the
customers included is carried out to determine which are the accounts that present an impairment
according to the expected credit loss model and the corresponding estimate is recorded on these.
128
ALSEA AR 2023
Following is the aging of past due but unimpaired accounts receivable:
8. Advance payments
15-60 days
60-90 days
More than 90 days
Total
Current balance
Total account receivable
$
$
$
$
Advance payments were made for the acquisition of:
2023
2022
294,766 $
92,036 $
14,712
169,456
43,025
205,510
2021
115,789
72,109
273,148
Insurance and other services
Inventories
Lease of locales
478,934 $
340,571 $
461,046
Total
1,152,579 $
1,054,253 $
814,207
9. Right of use assets
2023
2022
114,380 $
348,296 $
261,004
55,327
485,489
36,729
430,711 $
870,514 $
2021
288,855
324,260
28,306
641,421
$
$
1,631,513 $
1,394,824 $
1,275,253
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 2023, 2022 and 2021.
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.
7. Inventories, net
At December 31, 2023, 2022 and 2021, inventories are as follows:
Right of use assets
Cost:
Balance at January 1, 2021
Additions and renovations
Balance as of December 31, 2021
Additions and renovations
2023
2022
2021
Balance as of December 31, 2022
Food and beverages
$
2,704,639 $
2,859,697 $
1,978,553
Other, mainly containers and packaging (1)
Obsolescence allowance
53,053
(7,027)
38,469
(2,840)
33,540
(2,835)
Total
$
2,750,665 $
2,895,326 $
2,009,258
(1) In others are concepts such as toys, uniforms, cleaning utensils, kitchen appliances and souvenirs.
Additions and renovations
Balance as of December 31, 2023
Depreciation:
Balance at January 1, 2021
Charge for depreciation for the year
Balance as of December 31, 2021
Charge for depreciation for the year
Balance as of December 31, 2022
Charge for depreciation for the year
Balance as of December 31, 2023
Amount
$
31,738,505
$
$
3,522,783
35,261,288
2,512,224
37,773,512
997,387
38,770,899
(8,315,230)
(4,671,802)
(12,987,032)
(4,350,755)
(17,337,787)
(4,217,289)
$
(21,555,076)
129
ALSEA AR 2023 Right of use assets
Net cost:
Balance as of December 31, 2021
Balance as of December 31, 2022
Balance as of December 31, 2023
Amount
22,274,256
20,435,725
17,215,823
$
$
$
Amounts recognized in the consolidated
2023
2022
2021
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
Benefits obtained from negotiations
related to COVID-19
$
4,217,289 $
4,350,755 $
4,671,802
963,195
948,535
1,050,332
145,854
257,686
176,314
1,018,474
751,329
553,419
In general, variable payments constitute 17%, 12% and 9% at December 31, 2023, 2022 and 2021,
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.
10. Obligation under finance leases
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Year 5
Later
2023
2022
2021
$
4,008,333 $
4,907,925 $
5,455,183
3,758,878
3,119,610
2,604,540
2,133,236
6,134,747
4,126,190
3,459,579
2,857,341
2,336,443
7,551,600
4,918,822
4,095,434
3,403,711
2,750,413
7,765,454
21,759,344
25,239,078
28,389,017
-
(27,970)
(840,873)
Less: Unearned interest
(3,342,484)
(3,414,640)
(4,625,743)
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.
The Entity does not face a significant liquidity risk regarding its lease liabilities. Lease liabilities
are monitored through the Entity's Treasury.
$
18,416,860 $
21,824,438 $
23,763,274
Fixed payments
Variable payments
Total lease payments
2023
2022
2021
5,130,210 $
5,320,062 $
5,738,455
1,018,474
751,329
553,419
6,148,684 $
6,071,391 $
6,291,874
$
$
130
ALSEA AR 2023 11. Store equipment, leasehold improvements and property, net
Store equipment, leasehold improvements and properties are as follows:
Cost
Buildings
Store
equipment
Leasehold
improvements
Transportation
equipmen
Computer
equipment
Production
equipment
Office
furniture
and
equiptment
Construction
in process
Total
Balance as of 1
January 2021
Additions
Disposals
Revaluation
Translation
adjustments
Balance as of
December 31, 2021
Additions
Disposals
Revaluation
Translation
adjustments
Balance as of
December 31, 2022
Additions
Disposals
Revaluation
Reclassifications
Translation
adjustments
Balance as of
December 31, 2023
$
497,287
$
15,273,701
$
19,734,860 $
315,130 $
2,027,702
$
617,423
$
836,227
$
2,027,404
$
41,329,734
-
672,788
(199,277)
(380,044)
-
379,676
794,503
(768,010)
557,217
41,750
(41,953)
1,637
124,033
(67,283)
24,852
312,665
(19,806)
-
71,094
(56,763)
7,961
724,087
(22,055)
64,316
2,740,920
(1,555,191)
1,035,659
(9,506)
(426,991)
(839,646)
(10,416)
(58,227)
(4,766)
(75,376)
(64,936)
(1,489,864)
288,504
15,519,130
19,478,924
306,148
2,051,077
905,516
783,143
2,728,816
42,061,258
-
932,545
1,081,186
60,131
(17,946)
(346,795)
(568,297)
(37,060)
-
370,697
867,782
6,905
178,452
(69,111)
42,355
16,106
(515)
-
145,812
(21,699)
6,660
1,440,420
3,854,652
(6,930)
(1,068,353)
-
1,294,399
(5,549)
(945,291)
(1,770,590)
(16,512)
(114,699)
(12,513)
(174,161)
(79,212)
(3,118,527)
265,009
15,530,286
19,089,005
319,612
2,088,074
908,594
739,755
4,083,094
43,023,429
-
-
-
-
2,041,914
2,026,684
58,774
266,232
44,248
(1,090,882)
(936,552)
(24,819)
(158,702)
(40,980)
550,160
1,124,322
10,576
98,188
-
-
-
-
-
-
17,314
(5,767)
50,738
345,363
4,800,529
(2,173)
(2,259,875)
-
1,833,984
-
(53,619)
(53,619)
1,166
(1,338,932)
(2,593,334)
(32,938)
(150,557)
6,539
(10,245)
(219,066)
(4,337,367)
$
266,175
$
15,692,546
$
18,710,125
$
331,205
$
2,143,235
$
918,401
$
791,795
$
4,153,599
$
43,007,081
Depreciation
Buildings
Store
equipment
Leasehold
improvements
Transportation
equipment
Computer
equipment
Production
equipment
Office
furniture
and
equiptment
Construction
in process
Balance as of 1
January 2021
Additions
Disposals
Revaluation
Translation
adjustments
Balance as of
December 31, 2021
Additions
Disposals
Revaluation
$
217,003
$
10,055,346
$
12,940,748
$
203,434
$
1,603,547
$
6,364
$
423,514
$
3,304
919,414
1,738,620
36,184
(83,398)
(389,483)
(678,432)
(36,835)
-
252,275
424,338
1,682
157,585
(61,331)
22,858
70,426
(18,937)
-
161,691
(35,706)
5,730
(3,070)
(260,505)
(790,230)
(6,490)
(45,190)
(2,182)
(48,947)
133,839
10,577,047
13,635,044
197,975
1,677,469
55,671
506,282
1,017
-
-
912,213
(325,306)
114,545
10,217
1,431,323
(532,496)
682,361
119,697
129,802
(29,438)
2,948
(87,404)
157,928
(65,954)
36,173
(72,105)
75,192
(107)
1,162
371,138
130,050
(19,461)
5,950
216,133
Reclassification
(133,047)
Translation
adjustments
Balance as of
December 31, 2022
Additions
Disposals
Revaluation
Reclassification
Translation
adjustments
Balance as of
December 31, 2023
$
(1,809)
(583,004)
(1,446,224)
(14,421)
(92,203)
(4,875)
(119,532)
-
-
-
-
-
-
-
10,705,712
13,889,705
199,462
1,641,308
498,181
719,422
1,126,135
(913,524)
436,379
-
1,206,553
34,369
206,019
67,637
(689,001)
(18,036)
(119,629)
(23,889)
977,840
-
4,723
-
86,663
-
(808,578)
(1,772,106)
(16,867)
(114,928)
5,957
(5,492)
29,115
-
(8,875)
(348)
-
698
$
10,546,124
$
13,612,991
$
203,651
$
1,699,433
$
542,279
$
740,127
$
Total
$
25,449,956
3,087,224
(1,304,122)
706,883
(1,156,614)
26,783,327
2,837,525
(972,762)
843,139
424,629
(2,262,068)
27,653,790
2,646,670
(1,769,571)
1,534,372
-
(2,720,656)
$
27,344,605
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net balance as of
December 31, 2021
Net balance as of
December 31, 2022
Net balance as of
December 31, 2023
$
154,665
$
4,942,083
$
5,843,880 $
108,173
$
373,608
$
849,845
$
276,861
$
2,728,816
$
15,277,931
$
265,009
$
4,824,574
$
5,199,300 $
120,150 $
446,766 $
410,413
$
20,333
$
4,083,094
$
15,369,639
$
266,175
$
5,146,422
$
5,097,134
$
127,554
$
443,802
$
376,122
$
51,668
$
4,153,599
$
15,662,476
131
ALSEA AR 2023 12. Intangible assets, net
Intangible assets are comprised as follows:
Cost
Balance as of January
1, 2021
Brand rights
Commissions for
store opening
Franchise
and use of
locale rights
Licenses and
developments
Construction
in process
Goodwill
Total
$
17,135,490
$
209,438
$
1,766,845
$
2,573,405
$
49,244
$ 13,050,366
$ 34,784,788
Acquisitions
22,032
-
15,147
103,789
(450,831)
(19,304)
(37,863)
(67,245)
(49,591)
95,197
(14,610)
2,300
(3,785)
13,949
(4,099)
5,543
-
-
-
-
-
140,968
(274,435)
(849,678)
-
-
(72,085)
116,989
Adjustment for
currency conversion
Disposals
Restatement
Balance as of
December 31, 2021
16,752,297
177,824
1,754,293
2,611,393
49,244
12,775,931
34,120,982
Acquisitions
(3,617)
-
31,171
275,831
215,085
-
518,470
Adjustment for
currency conversion
Disposals
Restatement
Balance as of
December 31, 2022
Acquisitions
Disposals
Restatement
Reclassifications
Adjustment for
currency conversion
Balance as of
December 31, 2023
(1,189,653)
(2,698)
(22,339)
(121,447)
(73,758)
(759,038)
(2,168,933)
(26,900)
148,870
(177,622)
2,496
(23,736)
21,940
(5,432)
8,521
(80)
144,736
-
-
(233,770)
326,563
15,680,997
110,233
(7,054)
140,845
-
(1,085,694)
-
-
-
-
-
-
1,761,329
2,768,866
335,227
12,016,893
32,563,312
50,410
(34,536)
63,455
-
284,484
(14,117)
24,369
-
38,460
-
204,776
53,619
-
-
-
-
483,587
(55,707)
433,445
53,619
(53,560)
(120,749)
(198,576)
(535,692)
(1,994,271)
$ 14,839,327
$
-
$
1,787,098
$
2,942,853
$
433,506
$ 11,481,201
$ 31,483,985
Amortization
Balance as of
January 1, 2021
Amortization
Adjustment for
currency conversion
Disposals
Restatement
Balance as of
December 31, 2021
Adjustment for
currency conversion
Disposals
Reclassification
Restatement
Balance as of
December 31, 2022
Amortization
Disposals
Restatement
Adjustment for
currency conversion
Net balance as of
December 31, 2021
Net balance as of
December 31, 2022
Net balance as of
December 31, 2023
Brand rights
Commissions for
store opening
Franchise
and use of
locale rights
Licenses and
developments
Construction
in process
$
2,897,162
$
103,254
$
690,421
$
2,260,311
$
98,851
(94,489)
(17,211)
48,516
42,185
10,310
(14,359)
2,413
98,517
179,750
47,062
(53,768)
(1,428)
8,214
(3,657)
5,411
2,932,829
143,803
842,786
2,388,047
Amortization
117,428
33
154,668
123,432
(63,133)
(2,820)
(99,186)
(11,915)
(12,592)
(177,613)
(23,437)
33,018
3,579
27,290
15,002
(2,646)
(509,494)
13,416
24,558
79,931
3,079,021
503,469
(2,631)
106,513
(276,341)
-
-
-
-
-
917,123
2,000,840
94,609
(275)
37,121
330,157
(12,797)
19,594
(30,248)
(99,528)
Goodwill
Total
$
16,953
$
5,968,101
-
-
-
-
419,303
(90,885)
(36,655)
64,554
16,953
6,324,418
-
395,561
(114,663)
(291,717)
-
-
-
(216,288)
(424,628)
111,928
(97,710)
5,899,274
-
-
-
-
928,235
(15,703)
163,228
(406,117)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 13,819,468
$
34,021
$
911,507
$
223,346
$
49,244
$ 12,758,978
$ 27,796,564
$ 12,601,976
$
-
$
844,206
$
768,026
$
335,227
$
12,114,603
$ 26,664,038
$ 11,429,296
$
-
$
768,768
$
704,587
$
433,506
$
11,578,911
$ 24,915,068
132
ALSEA AR 2023 As of December 31, 2023, the Entity has identified impairment effects on its El Portón, Starbucks
Coffee, Burger King and Italianni´s brands for an amount of $32,484.
Subsidiaria
Actividad
2023
2022
2021
As of December 31, 2022, the entity recorded a loss in its brands El Portón, Vips, Starbucks Coffee,
Burger King and PF Chang´s, for an amount of $140,703
As of December 31, 2021, the Entity recorded a loss in its El Portón, Starbucks Coffee Argentina
and Burger King Argentina brands, amounting to $184,430, affecting $21,534 to fixed assets and
$162,896 to intangible assets.
13. Investment in subsidiaries
The Entity's shareholding in the capital stock of its main subsidiaries is as follows:
Activity
2023
2022
2021
Starbucks brand operator in
Mexico
100.00% 100.00% 100.00%
Operator of the Burger King brand
in Mexico
100.00% 100.00% 100.00%
OPQR, S.A. de C.V.
Operator of the Domino's
Pizza brand in Mexico
100.00% 100.00% 100.00%
Fast Food Chile, S.A.
Asian Food, Ltda.
Especialista en
Restaurantes de
Comida Estilo
Asiática, S.A. de C.V.
Distribuidora e
Importadora Alsea,
S.A. de C.V.
Operator of the P.F. Chang's
brand and in Mexico
100.00% 100.00% 100.00%
Distributor of food and supplies
for Alsea and related brands
100.00% 100.00% 100.00%
Italcafé, S.A. de C.V.
Operator of the Italianni's brand
100.00% 100.00% 100.00%
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.
Operator of the Italianni's brand
100.00% 100.00% 100.00%
Operator of the Italianni's brand
100.00% 100.00% 100.00%
Vips brand operator
100.00% 100.00% 100.00%
Operator of the Cheesecake
Factory brand in Mexico
Operator of the Burger King
brand in Chile
Operator of the P.F. Chang's
brand in Chile
100.00% 100.00% 100.00%
100.00% 100.00% 100.00%
100.00% 100.00% 100.00%
Operator of the Chili's Grill &
Bar brand in Mexico
100.00% 100.00% 100.00%
Starbucks Coffee
Chile, S.A.
Starbucks brand operator in
Chile
100.00% 100.00% 100.00%
Distribution of Alsea brand
food
100.00% 100.00% 100.00%
Gastrococina Sur, S.P.A.
Chili's Grill & Bar operator in Chile
100.00% 100.00% 100.00%
Fast Food Sudamericana,
S.A.
Operator of the Burger King brand
in Argentina
100.00% 100.00% 100.00%
Factoring and Leasing
Operator
Operator of the California Pizza
Kitchen brand in
Mexico
100.00% 100.00% 100.00%
Starbucks Coffee
Argentina, S.R.L.
Starbucks brand operator in
Argentina
100.00% 100.00% 100.00%
Asian Bistro Colombia,
S.A.S.
Operator of the P.F. Chang's brand
in Colombia
100.00% 100.00% 100.00%
100.00% 100.00% 100.00%
Operadora Alsea en
Colombia, S.A.
Operator of the Burger King brand
in Colombia
95.03%
95.03%
95.03%
133
Subsidiary
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. (antes SOFOM
E.N.R.)
Grupo Calpik,
S.A.P.I. de C.V.
ALSEA AR 2023
Subsidiaria
Actividad
2023
2022
2021
Estrella Andina, S.A.S.
Starbucks brand operator in
Colombia
70.00%
70.00%
70.00%
Gastronomía Italiana
en Colombia, S.A.S.
Operator of the Archie's brand in
Colombia
97.60%
97.60%
97.60%
Café Sirena Uruguay, S.A.
Brand operator Starbucks in
Uruguay
100.00% 100.00% 100.00%
Food Service Project, S.L.
(Grupo Zena) (1) (2)
Sigla, S.A. (Grupo VIPS)
Operator of Spain
76.77%
76.77%
76.77%
Operator of the VIPS, VIPS Smart,
Starbucks, GINOS, Fridays’ and
Wagamama brands in Spain
100.00% 100.00% 100.00%
(1) ontrol 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.
(2) On February 26, 2024, a share purchase agreement was signed between Alsea SAB de CV (Alsea) and the
minority partners of Food Service Project SL (FSP), a subsidiary of Alsea and operator of various brands in
Europe. . With this agreement, Alsea acquires 23.23% of the minority stake in FSP's capital. The conditions
of the purchase are disclosed in note 32 on subsequent events.
14. Investment in shares of associated companies
At December 31, 2023, 2022 and 2021, the investment in shares of associated companies is comprised
of the Entity's direct interest in the capital stock of the companies listed below:
(%)
Investing in shares
2023
2022
2021
Main activity
2023
2022
2021
30.00% 30.00% 30.00% Restaurant
$
13,936
$
13,936
$
14,536
operator of the EF
Entre Fuegos and
EF Entre Fuegos
Elite Steak House
brand operating in
Mexico.
49.00%
-
-
22,878
-
-
142,966
142,967
117,331
$
179,780
$ 156,903
$
131,867
Restaurant
Operator AYB
Polanco, S.A.
de C.V. (1)
Europastry
México Inc.
Other
investments
Total
134
ALSEA AR 2023
(%)
Participation in results
15. Goodwill
2023
2022
2021
Main activity
2023
2022
2021
Assignment of goodwill to cash generating units
30.00% 30.00% 30.00% Restaurant
$
-
$
(223)
$
1,840
Restaurant
Operator AYB
Polanco, S.A.
de C.V. (1)
Other
investments
Total
operator of the EF
Entre Fuegos and
EF Entre Fuegos
Elite Steak House
brand operating in
Mexico.
3,404
-
-
$
3,404
$
(223)
$
1,840
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
2023
22,486 $
36,932 $
13,710 $
- $
- $
2022
22,486 $
36,932 $
13,710 $
43,015 $
(744) $
2021
17,517
40,362
9,427
39,789
6,133
$
$
$
$
$
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 España
Ginos
Starbucks España
Fridays
British Sandwich Factory
Clover
2023
2022
$
1,336,967 $
1,336,967 $
1,078,622
1,078,622
26,614
785,816
26,614
785,816
2021
1,336,967
1,078,622
26,614
785,816
3,058,697
3,058,697
3,058,697
368,513
198,598
2,658,018
1,013,171
741,610
4,960
289,360
17,965
368,513
198,598
2,962,401
1,126,546
824,597
5,515
321,740
19,976
368,513
198,598
3,496,696
1,171,185
878,060
5,746
334,498
18,966
$
11,578,911 $
12,114,602 $
12,758,978
As of December 31, 2023, 2022 and 2021, the studies carried out on the impairment tests concluded
that the goodwill has no impairment.
135
ALSEA AR 2023 Type of credit
Currency
Rate
Maturity
2023
2022
2021
16. Long-term debt
Long-term debt at December 31, 2022, 2023 and 2021 is comprised of unsecured loans, as shown
below:
Bank
Santander Totta
BBVA Bancomer, S.A.
BNP CIC
BBVA Icos
Simple credit
Bilateral
Simple credit
Simple credit
Euros
Euros
Euros
Euros
Euribor + 1.50%
3% (Fixed rate)
Euribor + 2%
Euribor + 2.75%
Banco Nacional de Comercio Exterior S.N.C. (Bancomext)
Simple credit Mexican pesos
Variable rate TIIE +1%
Banco de Chile
Syndicated
Syndicated
Sabadel Icos
Ibercaja Icos
Abanca Icos
Caja rural Icos
Banco Santander, S.A.
Clover ING
Bankia Icos
Santander Icos
Simple credit
Chilean pesos
3.48% (Fixed rate)
Simple credit Mexican pesos
Variable rate TIIE +1.85%
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Euros
Euros
Euros
Euros
Euros
Euros
Euros
Euros
Euros
Variable rate Euribor+ 1.25%
Euribor + 2.20%
Euribor + 1.75%
Euribor + 1.75%
Euribor + 1.60%
Euribor + 1.35%
Euribor + 1.95%
Euribor + 1.85%
Euribor + 2.10%
Santander Chile, S.A.
Simple credit
Chilean pesos
Variable rate TIIE +0.41%
Banca March
Sindicado
Sindicado
Santander, S.A.
Clover ING
Societe Generale
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Simple credit
Euros
Euros
Euros
Euros
Euros
Euros
Euribor + 1.50%
Variable rate Euribor +1.25%
Variable rate Euribor +2.75%
Variable rate Euribor +2.75%
Variable rate Euribor +2.75%
Variable rate Euribor +3.00%
2026
2026
2025
2025
2025
2024
2023
2023
2023
2023
2023
2023
2022
2022
2022
2022
2021
2020
2023
2026
2023
2023
2024
$
$
-
-
-
-
-
-
-
-
$
34,988
169,350
349,897
233,265
1,047,024
1,280,141
1,586,163
61,674
57,481
-
-
-
-
-
-
-
-
-
-
-
-
-
4,107,631
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,216,729
-
82,127
193,014
210,906
60,375
563,059
8,255,972
126,165
23,327
46,654
34,989
233,264
1,096,341
233,264
326,569
43,834
233,263
-
-
-
-
-
Less - current portion
(388,217)
(1,277,638)
(1,638,000)
Long-term debt maturities
$
4,828,112
$
3,762,760
$
12,012,739
5,216,329
5,040,398
13,650,739
136
ALSEA AR 2023
Annual debt maturities at December 31, 2023 are as follows:
Year
2024
2025
2026
Amount
$
388,217
1,200,164
3,627,948
$
5,216,329
The Entity as of December 31, 2023, has lines of credit contracted for 2,000 million Mexican pesos
and 44 million Euros.
Bank loans include certain affirmative and negative covenants, such as maintaining certain financial
ratios. At December 31, 2023, 2022 and 2021, all such obligations have been duly met.
On April 5, 2021, the Entity formalized a new negotiation of the conditions of the credit, which
establishes new debt obligations, which allows the Entity to have certainty about its fulfillment
for the twelve-months period ending December 31, 2021.
17. Debt instruments
On January 21, 2022, senior notes for 300 million Euros were placed at an interest rate of 5.55% 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, 2027.
In December 2021, the Entity placed of the senior bonds with maturity in 2026 for the amount of
US$ 500 millio5n 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%.
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 instruments 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, 2023, 2022 and 2021 amounts to $20,903,791, $22,748,440 and $18,078,340,
respectively.
Year
maturity
2024
2025
2026
2027
Amount
$
1,350,000
1,000,000
11,109,500
7,444,291
$
20,903,791
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
each country to deal with the pandemic, have ensured continuity and a return to productivity at
pre-pandemic levels in 2020.
137
ALSEA AR 2023
18. Non-Controlling Interest Put Option
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 2023, 2022 and 2021 was 30%
and will continue at 30% and thereafter.
In addition, tax losses determined from 2017 may be offset by liquid income earned within twelve
(12) years. The term for offsetting presumptive income excesses will remain five (5) years. These
tax credits cannot be tax reset.
"In Argentina, i.- Income tax: 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 2023, 2023 and 2021, 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.
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%.
The tax rates established for the financial year 2022, in the rest of the countries in which Alsea
is present in Europe are as follows:
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.
• Portugal: 21%
• France: 25%
• Netherlands: First 395,000 euros at 15%, the rest at 25.80%.
• Belgium: 25%
• Luxembourg: 17% (includes the solidarity surcharge of 7% on the CIT amount).
138
ALSEA AR 2023
a. Income taxes recognized in income
b. Deferred taxes
Current
Deferred
2023
2022
2021
1,751,243 $
1,183,079 $
1,120,853
(390,310)
(308,761)
(804,963)
1,360,933 $
874,318 $
315,890
$
$
The tax expense attributable to income before ISR differs from that arrived at by applying the
30% statutory rate in 2023, 2022 and 2021 due to the following items:
Liability provisions
Statutory income tax rate
Non-deductible expenses
Effects of inflation and others
Fixed asset update
Lease Effects under IFRS 16
Effect of changes in prior years' taxes
Difference in tax rates
Others
2023
30%
6%
3%
(5%)
(1%)
1%
0%
(3%)
2022
30%
8%
18%
(23%)
(6%)
2%
1%
4%
Effective consolidated income tax rate
31%
34%
2021
30%
20%
37%
(43%)
(7%)
(6%)
3%
(2%)
32%
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
Advances from customers
Unamortized tax losses
Store equipment, leasehold
improvements and property
2023
2022
2021
$
(39,914) $
(25,239) $
(31,692)
(1,639,117)
(1,521,877)
(44,878)
(24,563)
(963,796)
(20,090)
(1,313,166)
(1,368,012)
(1,312,947)
979,112
974,377
982,118
Temporally non-deductible interest
-
-
Effects under IFRS 16
Advance payments
(390,623)
(465,366)
86,375
154,645
(88,192)
(433,827)
175,875
$
(2,362,211) $
(2,276,035) $
(1,692,551)
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
2023
2022
2021
$
(5,587,845) $
(3,102,781) $
(5,402,823)
3,225,633
826,746
3,710,272
$
(2,362,212) $
(2,276,035) $
(1,692,551)
139
ALSEA AR 2023 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, 2023, are:
20. Employee benefits
Defined contribution plans
Year of
expiration
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Losses of
entities
abroad
without
maturity
Depreciable losses
Retirement plan is established with the objective of offering benefits in addition to and comple-
mentary to those provided by other public retirement plans.
Mexico
Europe
Chile
Argentina
Colombia
7,115
130,827
82,121
89,900
305,985
118,165
1,511,123
885,503
381,177
1,040,167
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,774,851
448,967
-
1,092
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,936
28,439
26,498
25,136
20,971
Total
7,115
131,919
82,121
89,900
305,985
143,101
1,539,562
912,001
406,313
1,061,138
Total income recognized in the consolidated statements of income and other comprehensive
income net of income taxes as of December 31, 2023, 2022 and 2021 is $1,537 ($16,715) and ($3,044),
respectively.
The net cost of the period for the obligations derived from the seniority premium, amounted to
$60,136, $55,731 and $29,062 in 2023, 2022 and 2021, respectively.
21. Financial Instruments
a. Capital risk management
The Entity manages its capital to ensure that the companies that it controls are able to continue
operating as a going concern while they maximize the yield for their shareholders by streamlining
the debt and equity balances. The Entity's general strategy has not changed in relation to
2022 and 2021.
102,245
3,326,063
The Entity's capital structure consists of the net debt (the loans described in Note 16 and 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 22).
Total losses $
4,552,083
$
2,774,851
$
448,967
$
1,092
$
228,225
$
8,005,218
LThe Entity is not subject to external requirements to manage its capital.
Losses
triggered for
deferred
Legal Fee
Deferred
tax effect
$
2,048,662
$
2,394,138
$
337,315
$
-
$
25,594
$
4,805,709
30%
25%
27%
35%
35%
-
$
614,599
$
598,534
$
91,075
$
-
$
8,958
$
1,313,166
The main purpose for managing the Entity's capital risk is to ensure that it maintains a solid credit
rating and sound equity ratios to support its business and maximize value to its shareholders.
The Entity manages its capital structure and makes any necessary adjustments based on
changes in economic conditions. In order to maintain and adjust its capital structure, the
Entity can modify the dividend payments to the shareholders, reimburse capital to them or
issue new shares.
140
ALSEA AR 2023
For the years ended December 31, 2023, 2022 and 2021, there were no modifications to the
objectives, policies or processes pertaining to capital management.
c. Objectives of managing financial risks
The following ratio is used by the Entity and by different rating agencies and banks to measure
credit risk.
- Net Debt to EBITDA = Net Debt / EBITDA ltm.
As of December 31,to 2023, 2022 and 2021, the company agreed, through a waiver, not to
measure the financial restriction established in the Entity's credit agreements corre-
sponding to the ratio of Total Debt to EBITDA in the last twelve months.
b. Financial instrument categories
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.
Financial assets
Cash and cash equivalents
$
6,409,798 $
6,086,817 $
6,893,433
Loans and accounts receivable at
amortized cost
2,185,637
1,825,744
1,518,263
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.
2023
2022
2021
d. Market risk
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
4,265,968
4,252,803
1,501,931
4,172,708
388,217
1,375,794
4,861,118
1,277,638
2,971,439
1,007,798
4,446,604
1,638,000
3,315,031
4,103,865
4,415,950
Debt instruments
1,350,000
-
1,000,000
Long-term debt, not including current
maturities
4,828,112
3,762,760
12,012,739
Obligation under finance leases
15,101,829
17,720,573
19,347,324
Option to sell the non-controlling
interest
19,553,791
22,748,440
17,078,340
Exchange fluctuations and devaluation or depreciation of the local currency in the countries
in which Alsea participates could limit the Entity's capacity to convert local currency to US
dollars or to other foreign currency, thus affecting their operations, results of operations and
consolidated financial position. The Entity currently has a risk management policy aimed at
mitigating present and future risks involving those variables, which arise mainly from purchases
of inventories, payments in foreign currencies and public debt contracted at a floating rate.
The contracting of derivative financial instruments is intended to cover or mitigate a primary
position representing some type of identified or associated risk for the Entity. Instruments
used are merely for economic hedging purposes, not for speculation or negotiation.
The types of derivative financial instruments approved by the Entity for the purpose of mitigating
exchange fluctuation and interest rate risk are as follows:
- USD/MXN exchange-rate forwards contracts
- USD/MXN exchange-rate options
-
- Cross Currency Swaps
Interest Rate Swaps and Swaptions
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.
141
ALSEA AR 2023
e. Currency exchange risk management
1. Foreign currency sensitivity analysis
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 31 shows foreign currency
positions at December 31, 2023, 2022 and 2021. It also shows the exchange rates in effect at
those dates.
As of December 31, 2023, 2022 and 2021, the Entity has hedges for the purchase of US dollars
for the next 12 months for a total of $72.0, $85.7 and $24.5 million, respectively, with an
average exchange rate of $19.82, $20.02 and $19.97 per US dollar, respectively, the valuation
is made with an average exchange rate of $19.92, $20.11 and $20.47, per US dollar, respectively,
for the following 12 months starting from December 31, 2023, 2022 and 2021.
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, 2023, 2022 and 2021.
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
Options
Long
Economic
2023
current
2022
current
2021
previous
2023
current
2022
current
2021
previous
2023
current
2022
current
2021
previous
16.9200
USDMXN
20.0900
USDMXN
20.9100
USDMXN
16.9200
USDMXN
20.0900
USDMXN
20.9100
USDMXN
923,292
-
-
$
-
285,948 1,720,709
512,295
$ (170,029)
$
$
-
(40,341)
$
$
-
5,792
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, 2023, 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, 2023.
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, 2023, 2022 and 2021, a total of 404, 402 and 396 derivative financial instrument
operations (forwards and options) were carried out, respectively, for a total of 117.2, 96.5 and
127.7 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 5% 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, 2023, 2022 and 2021, Alsea has contracted DFI's to purchase US dollars in
the next twelve months for a total of approximately 72, 85.7 and 24.5 million USD, at the
average exchange rate of $19.82, $20.02 and $19.97 to the dollar, respectively.
At December 31, 2023, 2022 and 2021, the Entity had contracted the financial instruments
shown in the table above.
142
ALSEA AR 2023
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 Adminis-
tration 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, 2023, the Entity has a total debt of $26,120 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 61% is fixed at a weighted rate of 9.43%%, and 39% 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, 2023, 2022 and 2021.
Underlying /
reference variable
Notional amount/
face value (thousands of USD)
Fair value
(thousands of USD)
Type of
derivative,
security
or contract Position
Objective
of the
hedging
2023
current
2022
current
2021
previous
2023
current
2022
current
2021
previous
2023
current
2022
current
2021
previous
IRS Plain
Vanilla
IRS Plain
Vanilla
Capped
IRS
Long
Coverage
Long
Economic
Long
Economic
11.50% -
TIIE 28 d
10.76% -
TIIE 28 d
5.7150% -
TIIE 28 d
11.50% -
TIIE 28 d
10.76% -
TIIE 28 d
5.7150% -
TIIE 28 d
11.50% -
TIIE 28 d
10.76% -
TIIE 28 d
5.7150% -
TIIE 28 d
33,674,856 9,789,783
4,014,594
$ 1,150,255
410,654
$
301,068
-
-
1,307,507
302,500 7,093,020
1,255,007
$
$
$
$
-
-
7,865
$ (241,349)
$
$
(4,883)
5,683
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, 2023:
Instrument
Coupon Only Swap
Call Spread
Principal Only Swap
Coupon Only Swap
Notional
(Miles USD)
Notional
(Miles MXP)
Rate
Closing
date
Expiring
date
8.2750%
2.3970%
5.1675%
TIIE 28D +
0.7100%
428,931
8,093,928 Jan 20, 2023 Dec 16, 2024
257,358
6,176,606
Jan 05, 2022 Dec 08, 2026
171,512
3,557,416
Jan 10, 2022 Dec 14, 2026
232,727
4,308,468 Feb 16, 2023 Dec 14, 2025
Coupon Only Swap
8.7300%
232,727
4,308,468 Feb 16, 2023 Dec 14, 2025
Coupon Only Swap
9.1800%
215,000
3,893,650 Mar 30, 2023 Dec 14, 2026
Coupon Only Swap
8.9800%
215,000
3,874,300 Mar 31, 2023 Dec 16, 2024
143
ALSEA AR 2023
1. Analysis of interest rate sensitivity
The following sensitivity analysis has been determined on the basis of the exposure to
interest rates of derivative instruments and of non-derivative instruments at the end of
the period being reported. In the case of variable rate liabilities, an analysis is prepared
assuming that the amount of the liability held at the end of the period being reported has
been the amount of the liability throughout the year.
• The first stress scenario considered by the Entity’s management is a 200 bps increase in the
28-day TIIE reference rate while the rest of the variables remain constant. With the mix in
the hedging portfolio of plain vanilla interest rate swaps and the swaptions contracted at
the December 31, 2023 close, the increase in financial costs is of approximately $47.4 million.
• A 150 bps increase in the 28-day TIIE rate represents an increase in the financial cost of
approximately $35.5 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 $23.7 million.
The previous scenarios were carried out on the bank and stock market debt contracted in
Mexican pesos with 28-day TIIE floating rate.
g. Credit risk management
Credit risk refers to the uncertainty of whether one or several of the counterparties will comply
with their contractual obligations, which would result in a financial loss for the Entity. The Entity
has adopted the policy of only operating with solvent institutions and obtaining sufficient
collateral, when deemed necessary, as a way to mitigate the risk of financial loss caused by
non-compliance.
The Entity has identified in its portfolio a credit risk among its derivative financial instruments
designed as cash flow hedges, since are measured at fair value.
The Entity's exposure and the credit ratings of its counterparties are supervised on a regular basis.
The maximum credit exposure levels allowed are established in the Entity's risk management
internal policies. Credit risk over liquid funds and derivative financial instruments is limited
because the counterparties are banks with high credit ratings issued by accepted rating agencies.
In order to reduce to a minimum, the credit risk associated to counterparties, the Entity contracts
its financial instruments with domestic and foreign institutions that are duly authorized to
engage in those operations and which form part of the Mexican Financial System.
With respect to derivative financial instruments, the Entity signs a standard agreement approved
by the International Swaps and Derivatives Association Inc. with each counterparty along with
the standard confirmation forms for each operation. Additionally, the Entity signs bilateral
guarantee agreements with each counterparty that establish the margin, collateral and credit
line policies to be followed. Such agreements, commonly known as "Credit Support Annexes",
establish the credit limits offered by credit institutions that would apply in the event of negative
scenarios or fluctuations that might affect the fair 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.
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.
144
ALSEA AR 2023
At the close of December 31, 2023 and 2022, the Entity has incurred in 104 and 53 margin
calls just in 2023, 2022 and 2021, respectively.
At December 31, 2023, 2022 and 2021, the Entity has recorded no breaches to the agreements
signed with different financial entities for exchange rate hedging operations.
As of December
31, 2023
Average
effective
interest rate
Up to 1
year
Up to 2
years
Up to 3
years
Up to 4
years
Long-term debt
7.58%
$
388,217
$
1,200,164
$
3,627,948
$
-
$
Debt
instruments
Financial
leasing
Derivates
Suppliers
Factoring of
suppliers (1)
Accounts
payable
creditors
Accumulated
expenses and
employee
benefits
Sale of
non-controlling
interest
The Entity's maximum exposure to credit risk is represented by the carrying value of its
financial assets. At December 31, 2023, 2022 and 2021, that risk amounts to $2,390,935,
$1,973,357 and $1,7723,363, 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.
Up to 5
years or
more
-
-
Total
$
5,216,329
20,903,791
8.13%
1,350,000
1,000,000
11,109,500
7,444,291
4.00%
3,315,031
-
4,265,968
1,501,931
4,172,708
7,030,557
2,762,529
1,328,149
-
-
-
-
2,578,360
2,210,023
7,550,917
18,416,860
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,328,149
4,265,968
1,501,931
4,172,708
7,030,557
1,123,439
-
Total
$
23,147,851
$
6,290,842
$
17,315,808
-
$
9,654,314
-
$
-
1,123,439
7,550,917
$
63,959,732
145
ALSEA AR 2023
As of December
31, 2022
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
As of December
31, 2021
Total
Average
effective
interest rate
Up to 1
year
Up to 2
years
Up to 3
years
Up to 4
years
Up to 5
years or
more
Total
Long-term debt
6.46%
$
1,277,638
$
1,512,168
$
1,420,744
$
829,848
$
-
$
5,040,398
Long-term debt
6.48%
$
1,638,000
$
3,651,966
$
3,157,355
$
3,057,287
$
2,146,131
$
13,650,739
Debt
instruments
Financial
leasing
Derivates
Suppliers
Factoring of
suppliers (1)
Accounts
payable
creditors
Accumulated
expenses and
employee
benefits
Sale of
non-controlling
interest
9.14%
-
1,200,449
1,000,000
2,650,000
17,897,991
22,748,440
8.00%
4,103,865
3,503,867
2,980,936
2,493,175
8,742,595
21,824,438
Debt
instruments
Financial
leasing
8.13%
1,000,000
-
1,350,000
820,490
14,907,850
18,078,340
4.00%
4,415,950
3,564,491
3,326,858
2,851,593
9,604,382
23,763,274
-
691,056
4,252,803
1,375,794
4,861,118
5,667,413
-
-
-
-
-
1,123,439
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
691,056
Derivatives
4,252,803
Suppliers
1,375,794
4,861,118
5,667,413
1,123,439
Factoring of
suppliers (1)
Accounts
payable
creditors
Accumulated
expenses and
employee
benefits
Sale of
non-controlling
interest
-
305,968
2,971,439
1,007,798
4,446,604
3,854,182
-
-
-
-
-
-
-
-
-
-
-
1,272,474
-
-
-
-
-
-
-
-
-
-
-
-
305,968
2,971,439
1,007,798
4,446,604
3,854,182
1,272,474
Total
$
21,538,631
$
8,030,979
$
5,401,680
$
5,973,023
$ 26,640,586
$ 67,584,899
Total
$
19,333,973
$
7,522,425
$
9,106,687
$
6,729,370
$ 26,658,363
$ 69,350,818
(1) The policy of payment to suppliers is 90 days, for which the Entity signed financial factoring contracts backed
by credit lines with financial institutions, through which a supplier can contact the financial institution to
collect the any invoice in particular, previously approved by Alsea, before the payment date, which ends the
payment obligation of Alsea to the supplier; in turn, Alsea will settle the balance to the financial institution
on the due date for the invoice, in accordance with the terms previously agreed with the supplier. This
transaction has no cost to Alsea, provided that the balances are liquidated in a timely manner, the balances
not settled in a timely manner will be subject to a default interest that will be determined by the financial
institution; Additionally, Alsea receives a commission for the balances discounted by the suppliers. These
amounts have been classified as factoring of suppliers in the statement of financial position.
146
ALSEA AR 2023 i. Fair value of financial instruments
During the period there were no transfers between level 1 and 3.
This notes provides information on the manner in which the Entity determines the fair values
of the different financial assets and liabilities.
(1) The fair value is presented from a bank's perspective, which means that a negative amount
represents a favorable result for the Entity.
Some of the Entity's financial assets and liabilities are valued at fair value at each reporting
period. The following table contains information on the procedure for determining the fair
values of financial assets and financial liabilities (specifically the valuation technique(s) and
input data used).
Financial assets/liabilities
Fair value (1)(2)
Figures in thousands of USD
Fair value
hierarchy
2023
2022
2021
1) Forwards and currency options
agreements
$
(121,313) $
(38,978) $
-
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 riskfree 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
$ (1,206,836) $
409,945 $
5,662 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.
(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 Inter-
national 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, 2023, 2022 and 2021, 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.
147
ALSEA AR 2023
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:
Financial liabilities 2023
Financial liabilities maintained at amortized cost:
Current maturities of long-term debt
Current obligation under finance leases
Debt instruments
2023
2022
2021
Long-term debt, not including current maturities
Financial
liabilities
Carrying
value
Fair
value
Carrying
value
Fair
value
Carrying
value
Fair
value
Obligation under finance leases
Debt instruments
Financial
liabilities
maintained at
amortized cost:
Total
Suppliers
$
4,265,968
$
4,265,968
$
4,252,803
$
4,252,803
$
2,971,439
$
2,971,439
Factoring of
suppliers
1,501,931
1,501,931
Bank loans
388,217
542,514
1,375,794
1,277,638
1,375,794
1,620,976
Financial liabilities 2022
1,007,798
1,007,798
Financial liabilities maintained at amortized cost:
1,638,000
1,899,197
Current maturities of long-term debt
Obligation
under finance
leases
Long-term
bank loans
Non-current
financial lease
liabilities
Debt
instruments
3,315,031
3,315,031
4,103,865
4,103,865
4,415,950
4,415,950
Current obligation under finance leases
Debt instruments
Long-term debt, not including current maturities
4,828,112
5,680,772
3,762,760
4,160,393
12,012,739
13,338,888
Obligation under finance leases
15,101,829
15,101,829
17,720,573
17,720,573
19,347,324
19,347,324
20,903,791
21,054,728
22,748,440
22,211,789
18,078,340
18,504,850
Debt instruments
Total
Total
$
50,304,879
$
51,462,773
$
55,241,873
$
55,446,193
$
59,471,590
$
61,485,446
Level 2
$
388,217
3,315,031
4,828,112
15,101,829
1,123,439
20,903,791
$
45,660,419
Level 2
$
1,277,638
4,103,865
3,762,760
17,720,573
1,123,439
22,748,440
$
50,736,715
148
ALSEA AR 2023
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
Total
Valuation
Level 2
22. Stockholders’ equity
$
1,638,000
Following is a description of the principal features of the stockholders' equity accounts:
4,415,950
a. Capital stock structure
1,000,000
12,012,739
19,347,324
1,272,474
17,078,340
The movements in capital stock and premium on share issue are shown below:
Figures as of December 31, 2022
838,578,725 $
478,749 $
8,676,827
Number of
actions
Thousands
of pesos
social capital
Premium in
issuance of
shares
Placement of actions
$
56,764,827
Figures as of December 31, 2022
Placement of actions
-
838,578,725
(23,506,079)
-
478,749
(11,753)
(1,417)
8,675,410
(949,682)
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.
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.
Figures as of December 31, 2023
815,072,646 $
466,996 $
7,725,728
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.
Total repurchased shares must not exceed 5% of total issued shares; they must be replaced in
no more than one year, and they are not considered in the payment of dividends.
The premium on the issuance of shares is the difference between the payment for subscribed
shares and the par value of those same shares, or their notional value (paid-in capital stock
divided by the number of outstanding shares) in the case of shares with no par value, including
inflation, at December 31, 2012.
Available repurchased own shares are reclassified to contributed capital.
149
ALSEA AR 2023
During the Ordinary and Extraordinary General Shareholders' Meeting held on April 27, 2023, it
was agreed to cancel 4,927,000 common shares repurchased in the market, equivalent to $202,300
b. Following is the detail of the Non-Controlling interest of the main subsidiaries of the Entity:
During the Ordinary and Extraordinary General Shareholders' Meeting held on February 1,
2023, it was agreed to cancel 18,579,079 ordinary shares repurchased in the market, an amount
equivalent to 2.2% of the total shares in circulation.
Percentages of the
non-controlling interest
Income (loss) attributable
to the non-controlling interest
Accumulated non-controlling
interest
Subsidiary
Country
2023
2022
2021
2023
2022
2021
2023
2022
2021
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, 2023, 2022 and 2021, the legal reserve
amounted to $100,736, which amount reaches 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.
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% 23.23% $
55,700
$
(58,261)
$
(51,276)
$
789,108
$
839,700 $
934,191
Mexico
-
-
-
-
-
-
-
-
Colombia 30.00% 30.00% 30.00%
4,549
7,666
851
87,912
108,825
92,447
23. Non-controlling interest
a. Following is a detail of the non-controlling interest.
Ending balance at December 31, 2021
Equity in results for the year ended December 31, 2021
Other movements in capital
Ending balance at December 31, 2021
Other movements in capital
Ending balance at December 31, 2022
Equity in results for the year ended December 31, 2023
Other movements in capital
Amount
$
1,330,446
(50,660)
(244,863)
1,034,923
(83,912)
951,011
59,267
(69,657)
Ending balance at December 31, 2023
$
940,621
(1) On June 28, 2021, the entity purchased 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.
150
ALSEA AR 2023
On February 26, 2024, a share purchase agreement was signed between Alsea S. A. B. de C. V. (Alsea)
and the minority shareholders of Food Service Project SL (FSP), a subsidiary of Alsea and operator of
various brands in Europe. With this agreement, Alsea acquires 23.23% of the minority stake in FSP. The
terms of the purchase are disclosed in note 32 on subsequent events.
25. Revenues
2023
2022
2021
24. Earnings per share
Revenues from the sale of goods
$
73,519,878 $
66,865,480 $
52,009,161
Services*
Royalties
1,963,468
747,702
1,240,480
725,345
796,408
573,900
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.
Total
$
76,231,048 $
68,831,305 $
53,379,469
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, 2023, 2022 and 2021, the Entity has no potentially dilutive shares,
for which reason diluted earnings per share is equal to basic earnings per share.
The following table contains data on income and shares used in calculating basic and diluted
earnings per share:
* Includes merchandise revenue through digital platforms.
26. Cost of sales
The costs and expenses included in other operating costs and expenses in the consolidated
statements of income are as follows:
Food and beverage of costs
$
22,452,021 $
20,379,321 $
14,985,941
2023
2022
2021
2023
2022
2021
Royalties of costs
Other costs
153,156
496,354
138,774
442,544
121,368
483,965
Net profit (in thousands of Mexican pesos):
Attributable to shareholders
$
2,982,351 $
1,737,928 $
734,185
Shares (in thousands of shares):
Weighted average of shares outstanding
814,268
838,579
838,579
Basic and diluted net income per
share of continuous and discontinued
operations (cents per share)
Basic and diluted net income per
share of continuous operations
(cents per share)
$
$
3.66 $
2.07 $
0.88
3.66 $
2.07 $
0.88
Total
$
23,101,531 $
20,960,639 $
15,591,274
151
ALSEA AR 2023
27. Other operating expenses
Other operating expenses included in the consolidated statements of income are as follows:
Commission aggregators
$
1,035,010 $
882,896 $
2023
2022
353,441
729,381
1,164,328
54,557
131,794
224,867
839,412
981,045
156,472
226,594
1,913,877
1,763,559
1,624,167
2021
566,550
196,234
164,654
(111,140)
59,589
109,363
Fees
Insurance
Taxes and rights
Occupancy expenses
Distribution
Other expenses
Total
$
5,382,388 $
5,074,845 $
2,609,417
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, 2023, 2022 and 2021 was approximately $277,702, $160,217,
$127,716, 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.
The Entity continually reviews salaries, bonuses and other compensation plans in order to offer
its employees competitive compensation conditions.
29. Financial information by segments
The Entity is organized into three large operating divisions comprised of sales of food and beverages
in Mexico and South America (LATAM - Argentina, Chile, Colombia and Uruguay) and Europe (Spain,
Portugal, France, Netherlands, Belgic and Luxemburg) all headed by the same management.
The accounting policies of the segments are the same as those of the Entity's described in Note 3.
The Food and Beverages segments in which Alsea in Mexico, Europe and Latin America (LATAM)
participates are as follows:
Fast Food: This segment has the following features: i) fixed and restricted menus, ii) food for
immediate consumption, iii) strict control over individual portions of each ingredient and finished
product, and iv) Individual packages, among others. This type of segment can be easily accessed
and therefore penetration is feasible at any location.
Coffee (Coffee Shops): Specialized shops where coffee is the main item on the menu. The distin-
guishing aspects are top quality services and competitive prices, and the image/ambiance is
aimed at attracting all types of customers.
Casual Dining: This segment comprises service restaurants where orders are taken from customers
and there are also to-go and home delivery services. The image/ambiance of these restaurants is
aimed at attracting all types of customers. This segment covers fast food and gourmet restaurants.
The main features of casual dining stores are i) easy access, ii) informal dress code, iii) casual
atmosphere, iv) modern ambiance, v) simple decor, vi) top quality services, and vii) reasonable
prices. Alcoholic beverages are usually sold at those establishments.
Restaurant - cafeteria - (Vips): Is a familiar-type segment and its main characteristic is the hospitality,
and be close to the client. These restaurants have a wide variety of menus.
Fast Casual Dining: This is a combination of the fast food and casual dining segments.
The definition of the operating segments is based on the financial information provided by General
Management and it is reported on the same basis 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, 2023, 2022 and 2021 is as follows:
152
ALSEA AR 2023
Figures in millions of pesos as of December 31, division:
Food and beverages
Mexico
Food and beverages
LATAM
Food and beverages
Europe
Consolidated
Food and beverages
Mexico
Food and beverages
LATAM
Food and beverages
Europe
Consolidated
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
Income
$
39,359
$
33,468
$
26,015
$
13,906
$
13,388
$
8,950
$
22,966
$
21,975
$
18,414
$
76,231
$
68,831
$
53,379
Assets
$
33,746
$
28,608
$
48,976
$
7,968
$
10,029
$
7,738
$
30,564
$
35,755
$
24,123
$
72,278
$
74,392
$
80,837
13,847
12,017
9,160
4,539
4,503
3,033
6,615
5,992
4,560
25,001
22,512
16,753
15,624
13,427
10,634
7,238
6,887
4,173
12,153
11,935
9,508
35,015
32,249
24,315
4,357
3,579
3,395
931
1,002
1,157
2,901
3,121
3,627
8,189
7,702
8,179
5,531
4,445
2,826
1,198
996
587
1,297
927
719
8,026
4,751
6,368
3,940
4,132
3,508
(815)
(363)
(142)
(309)
3,627
3
1,361
237
3,814
-
874
3,041
1,680
59
(59)
(231)
3,135
2
315
684
(51)
Costs
Operating
costs
Depreciation
and
amortization
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
$
$
$
$
$
$
$
$
$
$
2,982
$
1,739
$
735
Assets
Liabilities
Investment
in productive
assets
Investment
in associates
Investment
in Fixed
Assets and
Intangible
180
157
(745)
-
-
877
-
-
-
180
157
132
2,644
1,892
1,425
825
962
192
1,506
1,519
825
4,975
4,373
2,442
Total assets
$
36,570
$
30,657
$
49,656
$
8,763
$
10,991
$
8,807
$
32,070
$
37,274
$
24,948
$
77,443
$
78,922
$
83,411
Total liability
$
31,511
$
35,742
$
46,511
$
5,801
$
4,745
$
4,682
$
30,524
$
29,140
$
23,110
$
67,836
$
69,627
$
74,303
30. Foreign currency position
Assets and liabilities expressed in US dollars, shown in the reporting currency at December 31,
2023, 2022 and 2021, are as follows:
Thousands
of Mexican
pesos 2023
Thousands
of Mexican
pesos 2022
Thousands
of Mexican
pesos 2021
$
5,415,419 $
5,631,500 $
5,566,171
(25,872,624)
(28,071,938)
(19,394,119)
Net monetary liability position
$
(20,457,205) $ (22,440,438) $
(13,827,948)
153
ALSEA AR 2023
The exchange rate to the US dollar at December 31, 2023, 2022 and 2021 was $16.9190, $19.47 and
$20.51, respectively. At April 10, 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,
2023, 2022 and 2021 and at the date of issuance of these consolidated financial statements are
shown below:
Country of origin 2023
Currency
Closing exchange
raye
Issuance
April 10, 2023
Argentina
Chile
Colombia
Spain
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
0.0209
0.0191
0.0044
18.6869
0.0012
0.0010
0.2600
17.9137
In converting the figures, the Entity used the following exchange rates:
Country of
origin
Currency
Recording Functional Presentation
Foreign transaction
Fast Food Sudamericana, S.A.
Starbucks Coffee Argentina, S.R.L.
Asian Bistro Argentina, S.R.L.
Fast Food Chile, S.A.
Asian Food Ltda,
Argentina
Argentina
Argentina
Chile
Chile
Gastronomía Italiana en Colombia, S.A.S.
Colombia
Operadora Alsea en Colombia, S.A.
Asian Bistro Colombia, S.A.S.
Food Service Project, S.L.
Colombia
Colombia
Spain
ARP
ARP
ARP
CLP
CLP
COP
COP
COP
EUR
ARP
ARP
ARP
CLP
CLP
COP
COP
COP
EUR
MXP
MXP
MXP
MXP
MXP
MXP
MXP
MXP
MXP
Country of origin 2023
Currency
Closing exchange
raye
Issuance
April 10, 2023
31. Commitments and contingent liabilities
Argentina
Chile
Colombia
Spain
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
0.1099
0.0227
0.0040
20.7810
0.08202
0.0225
0.0039
19.9975
Country of origin 2021
Currency
Closing exchange
raye
Argentina
Chile
Colombia
Spain
Argentinian peso (ARP)
Chilean peso (CLP)
Colombian peso (COP)
Euro (EUR)
0.1997
0.0241
0.0050
23.3264
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 19).
b) The Entity has acquired several commitments with respect to the arrangements established
in the agreements for purchase of the brands.
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.
154
ALSEA AR 2023 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 June 2023, the company obtained a ruling in the annulment trial favorable to its interests.
The ruling declares the outright annulment of the resolution determining the tax credit, the
matter is considered definitively resolved.
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.
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.
The tax authorities issued payment requests, the most significant of which requests the payment
of taxes for alleged income derived from the acquisition of goods from ALSEA for the total
amount of $3,881 million pesos, including restatement.
Alsea and its external 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; 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.
The Superior Chamber exercised the power of attraction to resolve the trial, the hearings to
settle the litigation have been carried out. The matter is currently pending.
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.
As of December 31, 2023, the company has several active labor lawsuits with a total contingency
of $776,452. According to the confirmation of their lawyers, there is a possibility that the
resolution will be complicated and 60% of them may be lost.
While the company is advised by its attorneys and maintains a strategy for care and its resolution
in the short term, it has recorded a provision of $481,094 to cover any future disbursements
related to them.
The provision is reflected in the accrued expenses and employee benefits section of the
statement of financial position.
155
ALSEA AR 2023
33. Authorization of consolidated financial statement
The consolidated financial statements were authorized for issuance on April 10, 2024, 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.
32. Subsequent events
On February 26, 2024, a share purchase agreement was signed between Alsea SAB de CV (Alsea)
and the minority partners of Food Service Project SL (FSP), a subsidiary of Alsea and operator of
various brands in Europe.
With this agreement, Alsea acquires 23.23% of the minority interest in the capital of FSP under
the following terms:
Acquired minority
Acquired stake
Thousands of euros
Britania Investments S.A.R.L. (1)
Familia Arango (2)
ProA Capital Iberian Buyout Fund
II, F.C.R (1)
Carrot River Holding, S.A.R.L. (3)
TOTAL
10.53%
5.13%
2.57%
5.00%
23.23%
99,243
50,000
25,000
70,000
244,243
(1) Payable in cash on the date of the transaction
(2) Payable on December 31, 2024 with interest at 2.5% annual interest
(3) Payable $30 million Euros on the date of the operation and $40 million Euros on February 28, 2025 with
interest at 2.5% annual interest.
To settle the operation, a syndicated loan has been contracted between BBVA and Santander for
$3,317 million with a maturity period of 3 years, an interest rate of TIIE 28 days with a spread of
140 bps and a grace period of 1 year for amortization of capital.
This agreement has replaced the original agreements where there was a purchase option with
a maximum execution of December 31, 2025 for Britania Investments, ProA Capital and Carrot
River and December 31, 2026 for the Arango Family. The asset and liability shown in the financial
statement as Long-term noncontrolling interest put option, as well as the security deposit of
Carrot River Holding, S.A.R.L., will be canceled and the effects of the acquisition together with
the share premium paid by That capital will be shown within the assets.
156
ALSEA AR 2023
information
FOR
investors
Administration and Finance
Federico Rodríguez
+52(55) 7583 2000
Investor Relations and Corporate Affairs
Gerardo Lozoya Latapi
ri@alsea.com.mx
rp@alsea.com.mx
+52(55) 7583 2000
External Auditors
Deloitte
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Av. Paseo de la Reforma 489, 6º Piso
Colonia Cuauhtémoc, C.P.06500,
Alcaldía Cuauhtémoc, CDMX
+52(55) 5080 6000
www.alsea.net
Corporate Offices
Alsea, S.A.B. de C.V.
Avenida Revolución N° 1267, Torre Corporativa, Piso 21
Colonia Los Alpes, C.P. 01040, Delegación Álvaro Obregón
Ciudad de México +52(55) 7583 2000
157
ALSEA AR 2023