NOTICE TO BONDHOLDERS

of
FOODCO BONDCO, S.A.U.’s
6¼% Senior Secured Notes due 2026
Common code: Reg S: 199073389; Rule 144A: 199073435
ISIN: Reg S: XS1990733898; Rule 144A: XS1990734359

****************

Telepizza publishes 2021 results and bondholder report

Madrid, Spain — April 22, 2022, 14 p.m.

Foodco Bondco, S.A.U., a subsidiary of Food Delivery Brands Group, S.A. (together with its
subsidiaries, the “Group”), announced today that it has published the Group’s 2021 results and
related bondholder report on its website:

https://www.fooddeliverybrands.com/inversores/informacion-trimestral

****************

This announcement may constitute a public disclosure of inside information by the Group
for the purposes of Article 7 under Regulation (EU) 596/2014 (16 April 2014).

The material contained in this announcement is presented solely for information

purposes and is not to be construed as providing investment advice. As such, it has no
regard to the specific investment objectives, financial situation or particular needs of any
recipient. No representation or warranty, either express or implied, is made as to, and
no reliance should be placed on, the fairness, accuracy, completeness, correctness or
reliability of the information contained herein. It should not be regarded by recipients as
a substitute for the exercise of their own judgment. Neither the Group, nor any of its
directors, officers, employees, affiliates, direct or indirect shareholders, advisors or
agents, accepts any liability for any direct, indirect, consequential or other loss or
damage suffered by any person as a result of relying on all or any part of this information,
and any liability is expressly disclaimed.

This announcement may include projections and other “forward-looking” statements

within the meaning of applicable securities laws. You should not place undue reliance on
forward-looking statements and we do not undertake publicly to update or revise any
forward-looking statement that may be made herein, whether as a result of new
information, future events or otherwise.

Foodco Bondco, S.A.U.

Calle Isla Graciosa 7, San Sebastián de los
Reyes, 28073, Madrid, Spain
ID: A-88398532
 FOODCO BONDCO, S.A.U.’S
ANNUAL BONDHOLDER REPORT

Financial Year 2021

Period ended December 31, 2021

2
 TABLE OF CONTENTS
BUSINESS DESCRIPTION ....................................................................................................... 5

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS ................................................... 8

RISK FACTORS ....................................................................................................................... 18

MANAGEMENT....................................................................................................................... 20

2021 FINANCIAL STATEMENTS ...................................................................................... F-1

3
Important note regarding this report

This report has been prepared exclusively for use by any holder of the 6¼ Senior Secured Notes due 2026
(the “Notes”) of Foodco Bondco, S.A.U. (the “Issuer”) or any prospective investor, securities analyst,
broker-dealer or any market maker in the Notes in accordance with Section 4.02 of the indenture governing
the Notes (the “Indenture”). Neither the delivery of nor access to this report implies that any information
set forth in this report is correct as at any date after the date of this report. You may not reproduce or
distribute this report, in whole or in part, and you may not disclose any of the contents of this report or use
any information herein for any purpose other than the evaluation of your investment in, or considering the
purchase of, the Notes. You agree to the foregoing by accepting delivery of, or access to, this report.

As permitted by the Indenture, the Issuer has elected to provide in this report consolidated financial
information of Tasty Bidco, S.L. in lieu of consolidated financial information of the Issuer.

This report contains certain measures and ratios, including Adjusted EBITDA and Pro forma EBITDA, and
other measures and ratios that are not required by, or presented in accordance with, International Financial
Reporting Standards, as adopted by the European Union (“IFRS”), nor in accordance with any accounting
standards. Such measures and ratios may not reflect accurately our performance, our liquidity or our ability
to incur debt and should not be considered as a substitute to net profit/(loss) or any other performance
measures derived from or in accordance with IFRS, SEC requirements or any other generally accepted
accounting principles or as a substitute for net cash from/(used in) operating activities or any other IFRS
measure. These measures have not been audited or reviewed by our auditors nor by independent experts
and should not be considered in isolation.

Disclosure regarding forward-looking statements

This report contains and refers to certain forward-looking statements with respect to our financial condition,
results of operations and business. Forward-looking statements are statements of future expectations that
are based on management’s current expectations and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or events to differ materially from those
expressed or implied in these statements. Forward-looking statements include, among others, statements
concerning the potential exposure to market risks and statements expressing management’s expectations,
beliefs, plans, objectives, intentions, estimates, forecasts, projections and assumptions. All statements other
than statements of historical fact are, or may be deemed to be, forward-looking statements.

Forward-looking statements are typically identified by words such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “objectives,” “outlook,” “probably,” “project,” “will,”
“seek,” “target” and other words of similar meaning in connection with a discussion of future operating or
financial performance. All of these forward-looking statements are based on estimates and assumptions
made by such entities that, although believed to be reasonable, are inherently uncertain. Therefore, undue
reliance should not be placed upon any forward-looking statements. There are important factors that could
cause actual results to differ materially from those contemplated by such forward-looking statements. In
addition, even if our actual results are consistent with the forward-looking statements contained in this
report, those results or developments may not be indicative of results or developments in subsequent
periods. For example, factors that could cause our actual results to vary from projected future results
include, but are not limited to, those described under the caption “Risk Factors” below.

You should not place undue reliance on forward-looking statements. Each forward-looking statement
speaks only as of the date of the particular statement. We undertake no obligation to publicly update or
revise any forward-looking statement, whether as a result of new information, future events or otherwise.
All forward-looking statements are expressly qualified in their entirety by the cautionary statements referred
to in this section and contained elsewhere in this report, including those set forth under “Risk Factors.” In
light of these risks, our results could differ materially from the forward-looking statements contained in this
report.

4
 BUSINESS DESCRIPTION

Overview

Corporate history – The Food Delivery Brands Group

Telepizza was created in 1987 as a family business. Since opening its very first outlet in Madrid in 1988,
the Group has gradually ramped up its activities and expanded internationally. In 1992, Telepizza opened
its first pizza dough production plant in Guadalajara (Spain) and its first outlets in Poland, Portugal and
Chile. Telepizza was listed on Spain’s stock exchanges in 1996 via initial public offering. In 2004,
Telepizza began its digital expansion in Spain and, four years later, in 2008, Telepizza relaunched its
telepizza.es website to improve home delivery.

In 2007, the Company was delisted from the Spanish stock exchange following a delisting tender offer
launched by the private equity fund Permira and other partners. Telepizza continued its international
expansion, entering into master franchise agreements in Guatemala, El Salvador and the United Arab
Emirates in 2009. In 2010, the Group acquired the Colombian pizza chain Jeno’s Pizza, the country’s
biggest pizza chain with 80 outlets, and in the subsequent years the Group opened its first outlet in Peru
and entered the airline catering sector. In 2012, Telepizza established its presence in Ecuador. In 2013,
Telepizza expanded its network of franchises in Panama, Russia and Bolivia. In 2014, the Group gained
a foothold in Angola. After observing a greater reliance on technology among its customer base, in 2015
Telepizza developed “Click & Pizza”, an online delivery service, and started creating smartphone
applications.

In April 2016, Telepizza was again listed on the Spanish stock market and continued its international
expansion, announcing its entry into new markets in EMEA and Latin America, under the Telepizza
brand, and Ireland, under the Apache brand. In December 2018, Telepizza signed a strategic agreement
with Yum! Brands, making it the largest master franchisee of Pizza Hut in the world.

The alliance with Yum! (Pizza Hut)

In June 2018, the Group signed a strategic partnership and multi-country master franchise agreement
between Telepizza Group (now Food Delivery Brands) and Pizza Hut to accelerate their joint growth in
Latin America (excluding Brazil), the Caribbean, Spain, Portugal and Switzerland.

Following the approval of the transaction by the European Commission’s competition authorities on 3
December 2018, the global alliance and master franchise agreement with Pizza Hut was signed and came
into force on 30 December 2018.

Pizza Hut, a division of Yum! Brands, Inc. (“Yum! Brands”), is the world's largest pizzeria company with
more than 18,000 restaurants in over 100 countries. As a result of the partnership, on 30 December 2018
Telepizza operated a total of 1,011 Pizza Hut outlets (in addition to its current 1,620 network outlets and
including the 38 outlets in Ecuador acquired prior to formalization of the agreement), thus making it the
largest Pizza Hut master franchisee in the world by number of outlets and a leading pizza operator
worldwide with an ambitious growth plan in the coming years.

On the back of this partnership, the Food Delivery Brands Group will be able to develop and improve its
capacity to manage networks of outlets and supply pizza dough and ingredients while fostering its
international growth (taking advantage of the synergies existing between both groups).

As part of the agreement, Telepizza granted a purchase option on the bare ownership of the "telepizza"
brand, which would be exercisable 3 years after the signature of the agreement.

5
In May 2021, the subsidiary Food Delivery Brands, S.A. and Yum! Brands Inc. agreed to amend certain
terms and targets of their strategic partnership to better tackle the new economic context. Among others,
the main changes relate to: (i) openings, extending the ten-year target by one additional year and revising
the targets for net new units per market; (ii) slowing down the conversion schedule for Telepizza outlets in
Chile, Colombia and rest of the World; (iii) opening penalty amounts, postponing the period and increasing
the threshold below which these penalties would apply; and (iv) incentives, revising the terms, deadlines
and targets required to obtain them.

As a consequence of this new agreement, on 14 May 2021 the Group and Pizza Hut International LLC
agreed on the possibility of an early exercise of the aforementioned purchase option in exchange for an
additional payment of USD 3.0 million and, on the same date, Pizza Hut decided to exercise this purchase
option on the bare ownership of the "telepizza" brand.

As originally agreed, the Food Delivery Brands Group retains the usufruct of the "telepizza" trademark and
its exclusive right to use it.

In Spain and Portugal, the Group will continue to operate under the Telepizza brand along with Pizza Hut,
given its leadership and privileged recognition of the brand across these markets. Conversely, the current
brands in Latin America (“Telepizza” and “Jeno’s Pizza”) will be gradually changed so as to operate solely
under the “Pizza Hut” brand in the coming years, thereby taking advantage of its greater brand recognition
in the region.

For a description of the Yum! Alliance agreement, please see the Offering Memorandum issued in
connection with the Notes.

Coronavirus pandemic (Covid-19) and significant events in 2021

On 11 March 2020, the World Health Organization declared the outbreak of coronavirus disease (Covid-
19) a pandemic, due to its rapid global spread. Most governments took restrictive measures, which
included: isolation, lockdowns, quarantine and restrictions on the free movement of people, closure of
public and private premises except those considered essential or relating to healthcare, border closures
and drastic reductions in air, sea, rail and road transport.

This situation has had a significant impact on the global economy, due to the disruption or slowing of
supply chains and the sizeable increase in economic uncertainty, evidenced by an increase in the volatility
of asset prices and exchange rates, as well as cuts in long-term interest rates.

In 2020, the Group drew down a (revolving) credit facility and ICO loans were arranged amounting to
Euros 45.0 million (drawn down in 2021) and Euros 10.0 million, respectively, in addition to the existing
funding, which helped the Group to address the health emergency and continue with its activities.

The Group also analysed potential options for optimizing its capital structure, in order to adapt it to the
new business circumstances and the economic and competitive environment resulting from COVID-19,
and to obtain the necessary financial resources to fully implement the business plan devised for the next
few years.

As a result of the foregoing, in January 2021 the following arrangements were made:

• The majority shareholder of Tasty Bidco, S.L. increased capital by Euros 16.9 million and
undertook, if necessary, to raise an additional Euros 18.7 million.

6
• On 22 December 2020, Tasty Bidco, S.L.U. and BG Select Investments (Ireland) Limited (minority
shareholder of Food Delivery Brands Group, S.A), as lenders, and Food Delivery Brands Group,
SA, a subsidiary of Tasty Bidco S.L. as borrower, signed a subordinated loan agreement for an
amount of up to Euros 43,3 million, maturing in 2026, divided into two funding tranches: (i) a first
tranche amounting to Euros 20.7 million that was disposed in January 2021, of which Euros 17,5
million correspond to the Company and Euros 3.1 million to the minority shareholder and (ii) a
second tranche for an amount of up to Euros 22.7 million that Food Delivery Brands Group, SA may
dispose of, under certain assumptions linked to the liquidity situation of the Group.

• Bank loans were arranged for an additional amount of Euros 30.0 million, maturing in November
2025.

The current geopolitical and economic uncertainty as result of the conflict in Ukraine is causing a general
increase in the prices of raw materials and energy products, as well as disruptions in the supply chains,
which could affect the Group's businesses. Although the Group would pass on such increases to the
franchisees and the consumers, it could be hampered by the duration and intensity of this environment
and the capacity of the markets to absorb it.

During 2022, the Parent’s directors will assess the impact of the aforementioned events on the equity and
financial position at 31 December 2022 and on the results of operations, including assets impairment, and
cash flows for the year then ended.

7
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction
with our audited consolidated financial statements and the related notes to those audited consolidated
financial statements contained elsewhere in this report. The following discussion and analysis contains
forward-looking statements that involve risks and uncertainties. Our actual results may differ materially
from those discussed in these forward-looking statements as a result of various factors, including, without
limitation, those set forth in “Forward-Looking Statements” and “Risk Factors.”

Results of operations

Year Ended December 31, 2021 Compared with Year Ended December 31, 2020

The following table sets forth consolidated financial information for the years ended December 31,
2020 and 2021.
For the year ended
December 31,
Including the effects Excluding the effects
of IFRS 16 of IFRS 16
% %
(in € millions)
2020 2021 change 2020 2021 change
Revenues 347.3 391.1 12.6% 355.8 395.2 11.1%
Merchandise and raw materials used (104.2) (115.5) 10.8% (104.2) (115.5) 10.8%
Personnel expenses (95.6) (92.4) (3.3%) (95.6) (92.4) -3.3%
Amortization and depreciation (43.7) (47.3) 8.2% (26.6) (31.9) 19.9%
Other expenses (114.3) (123.2) 7.8% (143.4) (147.3) 2.7%
Impairment of non-current assets (120.7) (6.3) -94.8% (120.7) (6.3) -94.8%
Other profit (losses) 2.2 7.2 227.3% (1.0) 5.3 -630.0%
Operating profit / (loss) (129.0) 13.6 -110.5% (135.7) 7.1 -105.2%
Finance income 1.9 2.4 26.3% 0.4 1.6 300.0%
Finance costs (33.4) (38.3) 14.7% (27.8) (33.2) 19.4%
Loss before tax from continuing operations (160.5) (22.3) -86.1% (163.1) (24.5) -85.0%
Income tax income/(expense) 3.4 - -100.0% 4.7 0.2 -95.7%
Loss for the year from continuing operations (157.1) (22.3) -85.8% (158.4) (24.3) -84.7%
Post-tax loss on discontinued operations (3.3) (4.8) 45.5% (3.1) (4.8) 54.8%
Loss for the year (160.4) (27.1) -83.1% (161.5) (29.1) -82.0%

Revenues

Our revenues increased by 11.1%, to €391.1 million in 2021 from €347.3 million in 2020 due to the
economic uptick following the relaxation of pandemic restrictions, especially from the second quarter od
2021 onwards, with significant growth in sales, which was reflected in our own outlets revenues,
incremental royalties from franchisees and the sale of goods and other supplies to the store network as a
result of the gradual return to normality.

Merchandise and Raw Materials Used

Merchandise and raw materials used increased by 10.8%, to €115.5 million in 2021 from €104.2 million
in 2020, primarily resulting from the increased sales in equity and franchised stores, as well as the increase
in the price of some raw materials, particularly wheat and packaging.

8
Personnel Expenses

Personnel expenses decreased by 3.3%, to €92.4 million in 2021 from €95.6 million in 2020, primarily as
a result of the reduction in the senior management structure and the transfer of own stores to franchise.

Amortization and Depreciation

Consolidated amortization and depreciation increased to €47.3 million in 2021 from €43.7 million in 2020,
primarily as a result of the depreciation of the right of use of the Telepizza Brand and the higher investments
due to the expansion of the network and other industrial and digital developments.

Other Expenses

Other expenses increased by 7.8%, to €123.2 million in 2021 from €114.3 million in 2020, primarily as a
result of the increase of the sales and stores being reopened due to the relaxation of the pandemic
restrictions.

Impairment of Non-Current Assets

Impairment of non-current assets decreased to €6.3 million in 2021 from €120.7 million in 2020. The
goodwill impairment loss recognized in 2020 related to the impact of the Covid-19 pandemic on the global
economy, and the foreseeable effects of the pandemic on the Group’s cash flow forecasts for the next few
years. In 2021, the Group updated this analysis resulting in a minor adjustment as the evolution of the
business did not diverge materially in relation with the plan.

Other Profits

Our other profits increased to €7.2 million in 2021 from €2.2 million in 2020, primarily due to the profit for
the sale of the Telepizza's brand bare ownership for €6.3 million in 2021.

Operating Profit/(Loss)

Our operating profit/(loss) increased to €13.6 million in 2021 from a loss of €129.0 million in 2020. This
was primarily due to the improvement of the business activities and the decrease of the impairment of non-
current assets recognized in 2020 and detailed above.

Finance Income

Our finance income increased to €2.4 million in 2021 from €1.9 million in 2020, primarily due to higher
interest income accrued in 2021.

Finance Costs

Finance costs increased to €38.3 million in 2021 from €33.4 million in 2020, primarily due to the
€30m new ICO loan borrowed in January 2021, the new subordinated loan and the increase in loss for
exchanges rates.

Income Tax Income/(Expense)

Our income tax income decreased to €0.0 million in 2021 from an income tax expense of €3.4 million in
2020, primarily due to the recognizing in 2021 of tax credits for loss carryforwards and deductions
available for offset.

9
Post-Tax Loss on Discontinued Operations

Our post-tax loss on discontinued operations increased to a loss of €4.8 million in 2021 from a loss of €3.3
million in 2020, primarily due to the losses for the sale of our Polish business which were considered as
discontinued operations.

Profit/(Loss) for the Year

Loss for the year decreased to a loss of €27.1 million in 2021 from a loss of €160.4 million in 2020, primarily
due to the improvement of the business activities and the decrease of the impairment of non-current assets
recognized in 2020 and detailed above.

Results and Other Information by Segment

For the year ended December 31, 2020

Other Latin
(in € millions)
Spain Europe America Total

Own outlet sales 49.9 33.0 85.0 167.9

Factory sales to franchisees 88.2 14.1 5.7 108.0
Royalties 47.6 9.6 4.1 61.3
Revenue from franchising activity 4.0 - 0.0 4.0
Other services rendered to franchisees 0.7 0.7 2.3 3.7
Revenue from initial fees 2.4 0.1 0.0 2.5
Total revenues 192.8 57.5 97.1 347.4

Amortization (24.3) (3.3) (16.1) (43.7)

Impairment/(Reversal) of non-current assets (90.2) (14.6) (15.9) (120.7)

Other net gains/(losses) 7.2 (0.3) (4.7) 2.2

Operating profit/(loss) (84.8) (5.9) (38.3) (129.0)

For the year ended December 31, 2021

Other Latin
(in € millions)
Spain Europe America Total

Outlet sales to customers 38.6 30.3 114.7 183.6

Factory sales to franchisees and other sales 98.4 15.2 6.2 119.8
Royalties 54.8 10.8 4.7 70.3
Revenue from franchising activity 2.3 - 0.5 2.8
Other services rendered to franchisees 4.3 1.5 2.2 8
Income from incentives 2.9 0.7 0.4 4
Revenue from initial fees 2.1 - 0.5 2.6
Total revenues 203.4 58.5 129.2 391.1

Amortization (27.5) (3) (16.8) (47.3)

Impairment/(Reversal) of non-current assets (1.8) (1.4) (3.1) (6.3)

Other net gains/(losses) 4.5 0.5 2.2 7.2

Operating profit/(loss) 17.8 9.6 (13.8) 13.6

Total Revenues by Segment

Spain

Total revenues from our Spain segment increased to €203.4 million in 2021 from €192.8 million in 2020,
primarily due to the relaxation of the pandemic restrictions, which directly impacted in the recovery of the
sales activity, as well as the effects of the commercial actions deployed in the period.

10
Rest of Europe

Total revenues from our Rest of Europe segment increased to €58.5 million in 2021 from €57.5 million in
2020, primarily due to the relaxation of the pandemic restrictions and the results of a successful commercial
policy.

Latin America

Total revenues from our Latin America segment increased to €129.2 million in 2020 from €97.1 million in
2020, primarily due to relaxation of pandemic restrictions with a clear recovery in activity in all countries,
especially from the second quarter onwards, and the network expansion of the Pizza Hut business in Mexico.

Operating Profit by Segment

Spain

Operating profit from our Spain segment increased to a profit of €17.8 million in 2021 from a loss of €84.7
million in 2020 due to increase in revenues resulting from the relaxation of restrictions and the reduction of
the impairment of non-current assets vs. 2020.

Rest of Europe

Operating profit from our Rest of Europe segment increased to a profit of €9.6 million in 2021 from a lo ss
o f €5.9 million in 2020, as a result of the decrease of the impairment of non-current assets vs. 2020.

Latin America

Operating losses from our Latin America segment decreased to a loss of €13.8 million in 2021 from a loss
of €38.3 million in 2020, as a result of the increase in revenues due to the relaxation of pandemic restrictions
and the reduction of the impairment of non-current assets vs. 2020.

Adjusted EBITDA

The following table is a reconciliation of total revenue to Adjusted EBITDA for the periods indicated:

For the year ended

December 31,
Including the effects Excluding the effects
of IFRS 16 of IFRS 16
% %
(in € millions) 2020 2021 change 2020 2021 change

Own outlet sales 167.9 183.6 9.4% 167.9 183.6 9.4%

Supply, chain, royalties, marketing and other revenue 179.5 205.7 15.6% 187.9 209.8 11.7%
Total Revenue 347.4 389.3 12.6% 355.8 393.4 10.6%
Product cost (103.2) (115.5) 11.9% (103.2) (115.5) 11.9%
Other operating expenses including royalties and fees paid to Yum!(1) (193.9) (204.5) 5.5% (223.0) (228.6) 2.5%
Adjusted EBITDA (2)
50.2 69.3 37.9% 29.6 49.3 66.4%

(1) Including personnel costs, leases, advertising, logistics and other expenses.
(2) This measure is not a measurement of financial performance under IFRS and should not be considered as a substitute to
other indicators of our operating performance, cash flows or any other measure of performance derived in accordance with
IFRS.

For further details, please see our Director’s Report included in the 2021 Financial Statements.

11
Liquidity and Capital Resources

Overview

Our principal cash requirements consist of the following:

• capital expenditures related to investments in our operations and maintenance and upgrades of
our existing facilities;

• servicing our indebtedness;

• paying taxes; and

• working capital requirements, including buybacks of our stores.

Our principal sources of liquidity are expected to be cash flows from our operating activities, capital
contributions and shareholder contributions, and short-term and long-term loans and financing, including
drawings under our revolving credit facility (the “Revolving Credit Facility”), which provides for
borrowings of up to €45 million. The availability of the Revolving Credit Facility is subject to certain
conditions. During 2021, our Revolving Credit Facility was fully drawn, and the Group also arranged a new
loan pursuant to ICO guarantees.

On 22 December 2020, Food Delivery Brands, S.A., as the borrower, and Banco Santander, S.A. and
Instituto de Crédito Oficial E.P.E., as lenders, signed a framework agreement to grant bilateral loans, and
signed the contracts for said loans amounting to Euros 30 million and Euro 10 million, respectively, to be
used to tackle working capital requirements arising from the COVID-19 health crisis and to repay the Euros
10 million relating to the ICO Santander loan mentioned above in its entirety. These bilateral loans accrue
interest at an annual rate of 3.75% and their final maturity date is 1 November 2025.

The arrangement of this framework agreement and of the bilateral loans was subject to prior or simultaneous
compliance with conditions which, most notably, include the main shareholder of Food Delivery Brands
Group, S.A. granting subordinated loans. All suspensive conditions included in the framework agreement
were fulfilled and on 2 February 2021 the loans entered into force.

On 22 December 2020, Tasty Bidco, S.L.U. and BG Select Investments (Ireland) Limited (minority
shareholder of Food Delivery Brands Group, S.A), as lenders, and Food Delivery Brands Group, SA, a
subsidiary of Tasty Bidco S.L. as borrower, signed a subordinated loan agreement for an amount of up to
Euros 43.3 million, maturing in 2026, divided into two funding tranches: (i) a first tranche amounting to
Euros 20.6 million that was disposed in January 2021, of which Euros 17.5 million correspond to the
Company and Euros 3,1 million to the minority shareholder and (ii) a second tranche for an amount of up to
Euros 22,7 million that Food Delivery Brands Group, SA may dispose of, under certain assumptions linked
to the liquidity situation of the Group.

Disbursement of these loans was subject to the ICO’s approval of the aforementioned bilateral loans. The
funds for the first tranche were released on 29 January 2021, the loans became effective and the net proceeds
therefrom were contributed to the Group.

Our ability to generate operating cash flows depends on our operating performance, which in turn depends
to some extent on general economic, financial, industry, regulatory and other factors, many of which are
beyond our control, as well as other factors discussed in “Risk Factors.” The ability of our subsidiaries to
pay dividends and make other payments to us may be restricted by, among other things, legal prohibitions
on such payments or otherwise distributing funds to us, including for the purpose of servicing debt. Losses
or other events could further reduce the net equity and distributable reserves of our subsidiaries.

12
 We anticipate that we will be highly leveraged for the foreseeable future and our ability to generate future
financing cash flows will be limited by the terms defined by the Indenture and the Revolving Credit
Facility. For a description of our material commitments, contingencies and debt instruments, please see our
2020 Financial Statements.

We or our affiliates may from time to time seek to retire, repurchase or sell our outstanding debt through
cash purchases, in open market purchases, privately negotiated transactions or otherwise. Such repurchases
or sales will depend on market conditions, our liquidity requirements, contractual restrictions and other
factors, and the amounts involved may be material.

Cash Flows

The following table sets forth our consolidated statements of cash flows for the years presented, including
cash from discontinued operations:

For the year ended

December 31
(in € millions) 2020 2021

Net cash from operating activities (6.6) 16.1

Net cash used in investing activities (25.1) (31.3)
Net cash from (used in) financing activities 29.4 28.3
Net increase (decrease) in cash and cash equivalents (2.3) 13.1

Cash Flows Provided by Operating Activities

Our cash flows from operating activities increased to €16.1 million in 2020 from €6.6 million in 2020 due
to the increase in sales and profits and an efficient management of the working capital.

Cash Flows (Used in) Investing Activities

Our cash flows used in investing activities increased to €31.3 million in 2021 from €25.1 million in 2020.
This increase was primarily due to the higher investment in store openings, digital developments and
industrial infrastructure compared last year.

Cash Flows Provided by Financing Activities

Our cash flows used in financing activities decreased to €28.3 million in 2021 from €29.4 million in 2020,
as result of the new additional financing.

Working Capital

The following table shows our working capital as of December 31, 2020 and 2021:

For the year ended

December 31
(in € millions) 2020 2021
Current assets (1)
118.9 135.0
Current liabilities 142.1 142.7
Working capital(2) (23.2) (7.7)

(1) Current assets include cash and cash equivalents of €45.1 million and €58.2 million in 2020 and 2021, respectively.
(2) This measure is not a measure of financial performance under IFRS and should not be considered as a substitute for other indicators
of our operating performance, cash flows or any other measure of performance and liquidity derived in accordance with IFRS.

Working capital increased to - €7.7 million in 2021 from -€23.2 million in 2020.

13
Capital Expenditures

We generally require capital expenditures for the maintenance of our existing store portfolio to remain
competitive and maintain the value of our brand. Our capital expenditures are mainly related to the opening
of new stores and the refurbishment and, in some cases, the relocation of our existing stores. In 2021, despite
of the COVID-19 restrictions, we have continued investing in the expansion and upgrading of the existing
network as well as in information services and new developments, digital services and factories’ efficiency
and expansion.

The following table shows our recurring capital expenditures for the periods presented for the maintenance
of existing assets and for investment in expanded capacity, excluding transaction related capital
expenditures:

For the year ended

December 31
(in € millions) 2020 2021

Openings 3.2 10.2

Relocations and conversions 3.8 2.7
Buybacks - 1.2
Maintenance 4.6 6.0
Total Stores 11.6 20.1

IT + Digital 6.7 9.0

Factory 5.7 11.2
Others 0.9 0.4

Total Group excluding M&A 24.9(1) 40.6 (2)

(1) Does not include €6.5 million in capital expenditures in 2020 related to acquisitions of Pizza Hut operations.
(2) Does not include €2.2 million in capital expenditures in 2020 related to acquisitions of Pizza Hut operations.

As part of our general strategy and in connection with the Yum! Alliance, we intend to undertake capital
expenditures during the next years to open new stores and convert Telepizza stores to Pizza Hut,
particularly in Latin America, as well as to invest in our dough factories, although the pace of the expansion
might be adapted to the evolution of the economy and other market factors to ensure an optimal return for
our investments.

We expect to finance our future capital expenditures through either cash from operations, equity
contributions and, if necessary, from bank loans or issuances of debt in the capital markets.

Off-Balance Sheet Arrangements

With the exception of bank and other guarantees provided in the ordinary course of business amounting to
€2.8 million and €3.5 million as of December 31, 2021 and 2020, respectively, we do not currently engage
in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to
as special purpose entities, which include special purposes entities and other structured finance entities.

Quantitative and Qualitative Disclosures About Market Risk

In the ordinary course of business, we are exposed to a variety of financial risks, including interest rate risk,
currency risk, liquidity risk and credit risk. Our global risk management focuses on uncertainty in the
financial markets and aims to minimize potential adverse effect on our profits.

14
Risks are managed by our finance department in accordance with policies approved by our board of
directors. The finance department identifies, evaluates and mitigates financial risks in close collaboration
with our operational units. Our Board of Directors issues global risk management policies, as well as policies
for specific issues such as currency risk, interest rate risk, liquidity risk, the use of derivatives and non-
derivative instruments and investments of cash surpluses.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relate
primarily to our Revolving Credit Facility, which bears interest at a variable rate (interest on the ICO loan
and the Notes accrue at a fixed rate).

While we may enter into hedging agreements in the future, we may also elect not to do so or the terms on
which we hedge may not be satisfactory or may fail to adequately protect us from changes in market interest
rates.

Foreign Currency Risk

Since we operate internationally, we are exposed to variations in exchange rates for commercial transactions
in foreign currency, intragroup payables in foreign currency and net assets deriving from net investments in
foreign operations with functional currencies other than the euro. There are no significant group balances or
commercial transactions denominated in foreign currencies other than the functional currencies of each
country where we operate.

We currently do not hedge our foreign currency risk. We expect that possible fluctuations in the exchange
rates of the Chilean peso, the Colombian peso and Mexican peso will not have a significant impact on our
consolidated equity.

The Notes and the Revolving Credit Facility are denominated in euro, and changes in foreign exchange rates
will therefore give rise to foreign exchange exposure. While we may enter into hedging agreements in the
future, we may also elect not to do so or the terms on which we hedge may not be satisfactory or may fail to
adequately protect us from changes in foreign exchange rates.

At 31 December 2021, had the Euro weakened/strengthened by 10% against the Chilean Peso, the Colombian
Peso and the Mexican Peso with the other variables remaining constant, consolidated post-tax loss would
have been Euros 1.9 million lower or higher (Euros 1.9 million in 2020), mainly as a result of translating
trade receivables, debt instruments classified as available-for-sale financial assets and payables to Group
companies that are eliminated on consolidation. Translation differences recognised under “Other
comprehensive income” would have increased by Euros 3.2 million mainly due to translation differences on
foreign operations.

Liquidity Risk

Liquidity risk is the risk of not being able to fulfill present or future obligations if we do not have sufficient
funds available to meet such obligations at the time they become due. Liquidity risk arises mostly in relation
to cash flows generated and used in working capital and from financing activities, particularly by
servicing our debt, in terms of both interest and capital, and our payment obligations relating to our ordinary
business activities. We manage liquidity risk by continuously monitoring our expected cash flows and
working capital levels and ensuring that adequate borrowing facilities are maintained.

The Group’s liquidity policy consists of arranging credit facilities and holding marketable securities for a
sufficient amount to cover forecast requirements, making financing available and enabling it to settle market
positions relating to short-term investments immediately, thus ensuring that this financial risk is minimized.

15
Credit Risk

Credit risk is the risk of financial loss resulting from counterparty failure to repay or service debt owed to
us according to the contractual terms or obligations. We are not exposed to significant credit risk since
our credit risk is not significantly concentrated, our cash placements and derivative contracts are with
highly solvent entities, the average collection period for trade receivables is very short, and customers have
adequate credit records, which significantly reduces the likelihood of bad debts.

Critical Accounting Policies

The preparation of our consolidated annual accounts and related disclosures in accordance with IFRS-EU
requires our management to make estimates, judgments and assumptions that affect the amounts reported in
our consolidated annual accounts and accompanying notes.

Our management must judge and develop estimates for the carrying values of assets and liabilities which
are not easily obtainable from other sources. The estimates and associated assumptions are based on
historical experience and other factors considered relevant. Actual results could differ from those estimates.

We periodically review these estimates and underlying assumptions. We recognize the effects of revisions
to accounting estimates in the period that estimates are revised if the revision affects only that period, or also
in later periods if the revision affects both current and future periods.

A summary of the items requiring a greater degree of judgment or which are more complex, or where
the assumptions and estimates are significant to the preparation of the audited financial statements, is as
follows:

• We determine the useful life of certain intangible assets acquired in a business combination based
on assumptions relating to brand positioning, estimated future market share, investments in the
brand and the projected cash flows to be generated by these assets.

• Calculation of the recoverable amount: We test goodwill and the brands for impairment on an
annual basis. Calculation of the recoverable amount requires us to use estimates. The recoverable
amount is the higher of fair value less costs to sell and value in use. We generally use discounting
cash flow methods to calculate these values, based on projections of the budgets we approve. The
cash flows take into consideration past experience and represent our best estimate of future market
performance. The key assumptions employed when determining fair value less costs to sell include
growth rates, the weighted average cost of capital, and tax rates. The estimates, including the
methodology used, could have a significant impact on values and impairment.

• Valuation allowances for bad debts require a high degree of judgment by us and a review of
individual balances based on customers’ credit ratings, current market trends and historical
analysis of bad debts at an aggregated level. Any decrease in the volume of outstanding balances
entails a reduction in impairment resulting from an aggregate analysis of historical bad debts,
including an analysis of expected loss, and vice versa.

• We capitalize the tax credits we consider likely to be offset in the foreseeable future based on
our business plan for each tax jurisdiction in which we operate.

• The effects of the Yum! Alliance in our consolidated annual accounts are considered critical due
to the different accounting assumptions and impacts associated with the agreement, as it
substantially modifies the prior business model.

• We are subject to regulatory and legal processes and inspections by government bodies in
various jurisdictions. We use significant judgment when determining the provisions for these legal
processes.

16
 Although estimates are calculated by our directors based on the best information available at the
closing date of the consolidated annual accounts, future events may require changes to these estimates
in subsequent years. Any effect on the financial statements of adjustments to be made in subsequent
years would be recognized prospectively.

For a description of these critical accounting policies and estimates, see our 2021 Financial Statements.

17
 RISK FACTORS

The following are certain risk factors that could affect our business, financial condition and results of
operations. You should carefully consider the risks described below as well as the other information
contained in the section titled “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.” Additional risks and uncertainties that are not presently known to us or are currently deemed
to be immaterial also may materially adversely affect our business, financial condition, and results of
operations in the future. If any of the risks actually occur, the trading price of our securities may be
negatively affected and as a result you may lose all or part of your original investment. The risk factors
described below, as well as any additional risks and uncertainties, may cause the forward-looking statements
described under the section titled “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” to differ from our actual results.

• our inability to integrate Telepizza and Pizza Hut effectively and realize the potential and
anticipated benefits from the alliance with Yum! Brands;

• the risk of harmful economic and political conditions;

• the impact of competition in the quick service restaurants market, and in particular the pizza
delivery sector;

• the risk of any outbreak of severe communicable diseases, including new strains of coronavirus
(COVID-19);

• the current geopolitical and economic uncertainty as result of the conflict in Ukraine, causing a
general increase in the prices of raw materials and energy products, as well as disruptions in the
supply chains;

• the effect of increasing sales or profit taxes and other changes in the tax regulations;

• the impact of impairments to goodwill and other intangible assets;

• the loss of certain clients or franchisees and master franchisees;

• exposure to price and volume fluctuations under certain of our supply contracts;

• a potential loss of our rights to use Telepizza trademarks in certain jurisdiction if we materially
breach our obligations under the Yum! Alliance;

• failure to successfully implement our growth strategy;

• unsuccessful marketing initiatives and advertising campaigns;

• failure of our franchises and master franchises to develop their business;

• our reliance on capital investments;

• our exposure to additional risks through our international operations;

• failure to comply with anti-bribery or anti-corruption laws;

• failure to deliver our products to our customers;

18
 • the risk of labor shortages or increased labor costs;

• our inability to attract and retain qualified employees;

• our inability to protect our intellectual property or the value of our brand;

• our reliance on the strength and reputation of both the Telepizza and Pizza Hut brands;

• the risk of the termination of our leasing contracts;

• the risk of foodborne illness;

• the departure of key executive management and senior management members;

• disruption of our information technology systems and exposure to security breaches;

• our failure to comply with applicable data protection laws and regulations;

• failure to successfully integrate acquired businesses;

• insufficient level of insurance;

• unanticipated fluctuations in exchange rates;

• the impact of changes in laws and regulations;

• the impact of Spanish tax legislation;

• the impact of changes in tax laws or our tax position;

• the risk that the Issuer and the guarantors of the Notes are members of a tax consolidated group
and are exposed to additional tax liabilities;

• the risks from legal and arbitration proceedings;

• the risk associated with unforeseen events, such as terrorist attacks, natural disasters, war conflicts
or catastrophic events; and

• other risks associated with our financing, the Notes and our structure.

The risks mentioned above are not exhaustive. Moreover, we operate in a highly competitive and rapidly
changing environment. New risk factors emerge from time to time and it is not possible for us to predict all
such risk factors to our business.

19
 MANAGEMENT

Foodco Bondco S.A.U. (the “Issuer”)

The Post-Settlement Merger between Tasty Bondco 1, S.A.U. and Foodco Bondco, S.L.U. — which was
identified as “Tasty Bondco 2, S.A.” in the Indenture and the Offering Memorandum — was approved on
December 12, 2019, by the relevant corporate bodies of the merging entities and, on February 25, 2020, the
registration was completed with the Commercial Registry of Madrid. Accordingly, Foodco Bondco S.A.U.
has assumed all obligations of Tasty Bondco 1, S.A.U. as Issuer in respect of the Notes, the Indenture, the
Intercreditor Agreement and any relevant Security Documents in accordance with Spanish law on corporate
reorganizations (Ley 3/2009, de 3 de abril, sobre modificaciones estructurales de las sociedades
mercantiles) and the provisions of the Indenture.

Foodco Bondco S.A.U. is a public limited liability company (sociedad anónima unipersonal) incorporated
under the laws of Spain and registered with the Commercial Registry of Madrid with registration number
(Número de Identificación Fiscal) A88398532. Its registered business address is Calle Isla Graciosa 7, San
Sebastián de los Reyes, 28073, Madrid, Spain.

As of the date of this report, the sole administrator of Foodco Bondco S.A.U. is Food Delivery Brands
Group, S.A. (Jacobo Caller Celestino is its legal representative).

Tasty Bidco, S.L.

Tasty Bidco, S.L. (“Telepizza”) is a limited liability company (sociedad limitada) incorporated under the
laws of Spain and registered with the Commercial Registry of Madrid with registration number B88208848.
Tasty Bidco’s registered business address is Avenida Isla Graciosa, 7, Parque Empresarial La Marina,
28703 San Sebastián de los Reyes, Madrid, Spain.

The following table sets forth the names and positions of the key members of the executive management
team at Telepizza as of the date of this report:

Name Position
Jacobo Caller Chief Executive Officer and Chairman
Jose Luis Renedo Chief Financial Officer
Laura García Chief Growth Officer and Master Franchise
Jesus Torres Chief Human Resource Officer
Ignacio Martín Chief Supply Chain Officer
Jesus Cubero Chief Marketing Officer
Javier Mallo Chief Information Officer
Miguel Angel Fernandez Chief Business Intelligence Officer
Ana Diogo Managing Director Iberia
David Vera Managing Director Chile
Jesús Hernández Gisbert Managing Director Andina Region
Juan Luis Bueno Managing Director Mexico

20
Tasty Bidco S.L. is managed by a board of directors comprised of 9 members. Set forth below are the
names and positions of the current members of the board of directors as of the date of this report:

Name Position

Jacobo Caller Celestino Chief Executive Officer

Gabriele Questa Director
Miguel Carlos Abelló as representative of Nueva Compañía de Inversiones, S.A. Director
Stella Esther Rachel Amar-Cohen Director
Nicolás Jimenez-Ugarte as representative of Artá Capital, S.G.E.I.C., S.A Director
Óscar Salazar Gaitán Director
Jorge Lluch Pauner Director
Victor Culebras Yábar Director
Manuel Echenique Secretary non-director of the
Board

21
 TASTY BIDCO, S.L. AND SUBSIDIARIES

Consolidated Statement of Financial Position

31 December 2021

(Expressed in thousands of Euros)

Assets 2021 2020

Property, plant and equipment (note 8) 76,552 60,699

Right-of-use assets (note 9) 58,555 60,591
Goodwill (note 10) 238,840 240,254
Other intangible assets (note 10) 433,788 453,424
Net investment in subleases (note 9) 12,668 33,071
Deferred tax assets (note 15) 32,021 29,713
Non-current financial assets (note 11) 16,378 15,655

Total non-current assets 868,802 893,407

Inventories (note 12) 15,261 14,861

Trade and other receivables (note 13) 55,024 43,035
Net investment in subleases (note 9) 3,993 8,168
Other current financial assets 637 5,640
Other current assets 1,954 2,104
Cash and cash equivalents (note 14) 58,162 45,134

Subtotal current assets 135,031 118,942

Non-current assets held for sale (note 6) - 13,949

Total current assets 135,031 132,891

Total assets 1,003,833 1,026,298

The accompanying notes form an integral part of the consolidated annual accounts for 2021.
 TASTY BIDCO, S.L. AND SUBSIDIARIES

Consolidated Statement of Financial Position

31 December 2021

(Expressed in thousands of Euros)

Equity and Liabilities 2021 2020

Share capital (note 16) 2,864 2,662

Share premium 268,853 248,942
Retained earnings (194,791) (169,825)
Shareholder contributions 165,108 165,108
Translation differences (7,752) (5,940)

Equity attributable to equity holders

of the Parent company and total equity (note 16) 234,282 240,947

Non-controlling interests 46,055 48,149

Equity 280,337 289,096

Debentures and bonds (note 18(a)) 322,788 320,467

Loans and borrowings (note 18 (b)) 87,239 55,000
Other financial liabilities (note 17) 2,827 6,790
Lease liabilities (note 9) 66,588 89,813
Deferred tax liabilities (note 15) 97,138 102,166
Provisions (note 19) 1,615 1,569
Other non-current liabilities (note 1) 2,585 13,478

Total non-current liabilities 580,780 589,283

Debentures and bonds (note 18(a)) 9,611 9,611

Loans and borrowings (note 18 (b)) 10,723 6,319
Other financial liabilities (note 17) 166 1,883
Lease liabilities (note 9) 22,081 28,930
Trade and other payables (note 20) 95,925 90,238
Provisions (note 19) 114 3,004
Other current liabilities 4,096 2,147

Subtotal current liabilities 142,716 142,132

Liabilities directly associated with non-current assets

held for sale (note 6) - 5,787

Total current liabilities 142,716 147,919

Total equity and liabilities 1,003,833 1,026,298

The accompanying notes form an integral part of the consolidated annual accounts for 2021.
 TASTY BIDCO, S.L. AND SUBSIDIARIES

Consolidated Income Statement

for the year ended
31 December 2021

(Expressed in thousands of Euros)

2021 2020

Revenues (note 21) 391,079 347,357

Merchandise and raw materials used (note 12) (115,517) (104,220)
Personnel expenses (note 22) (92,377) (95,620)
Amortisation and depreciation expenses (notes 8, 9 and 10) (47,313) (43,725)
Other expenses (note 23) (123,214) (114,299)
Impairment of non-current assets (note 24) (6,286) (120,695)
Other profit/(loss) (note 25) 7,243 2,226

Profit/(Loss) from operating activities 13,615 (128,976)

Finance income 2,438 2,640

Finance expenses (note 18) (36,514) (33,367)
Translation differences (1,857) (762)

Loss before tax of continuing operations (22,318) (160,465)

Income tax revenue (note 26) 2 3,417

Loss for the year from continuing operations (22,316) (157,048)

Post-tax loss of discontinued operations (note 6) (4,744) (3,334)

Loss for the year (27,060) (160,382)

Profit/(loss) attributable to non-controlling interests (2,094) (23,550)

Loss for the year attributable to equity holders

of the Parent Company
Continuing operations (20,968) (133,498)
Discontinued operations (3,998) (3,334)

(24,966) (136,832)

The accompanying notes form an integral part of the consolidated annual accounts for 2021.
 TASTY BIDCO, S.L. AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

for the year ended
31 December 2021

(Expressed in thousands of Euros)

2021 2020

Loss for the year (27,060) (160,382)

Other comprehensive income:

Items that will be reclassified to profit/(loss)

Translation differences of financial statements of
foreign operations (1,812) (4,749)

Total comprehensive income for the year (28,872) (165,131)

Profit/(loss) attributable to non-controlling interests 2,094 23,550

Total comprehensive profit/(loss) attributable

to equity holders of the Parent Company (26,778) (141,581)

The accompanying notes form an integral part of the consolidated annual accounts for 2021.
 TASTY BIDCO, S.L. AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

for the year ended
31 December 2021

(Expressed in thousands of Euros)

Cumulative
profit/ Non-
(Losses) Shareholder Translation controlling Total
Share capital Share premium accumulated contributions differences interests equity

Balance at 31/12/2019 2,662 248,942 (31,049) 165,108 (1,191) 72,062 456,534

Prior years’ corrections - - (1,944) - - (363) (2,307)

Balance at 01/01/2020 2,662 248,942 (32,993) 165,108 (1,191) 71,699 454,227

Profit/(loss) for the year - - (136,832) - (4,749) (23,550) (165,131)

Balance at 31/12/2020 2,662 248,942 (169,825) 165,108 (5,940) 48,149 289,096

Transactions with shareholders and owners

Capital increase on 29 January 2021 170 16,804 - - - - 16,974
Capital increase on 28 December 2021 32 3,107 - - - - 3,139
Profit/(loss) for the year - - (24,966) - (1,812) (2,094) (28,872)

Balance at 31/12/2021 2,864 268,853 (194,791) 165,108 (7,752) 46,055 280,337

The accompanying notes form an integral part of the consolidated annual accounts for 2021.
 TASTY BIDCO, S.L. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

for the year ended
31 December 2021
(Expressed in thousands of Euros)

2021 2020
Cash flows from operating activities
Post-tax profit/(loss) of discontinued operations (4,739) (3,429)
Profit/(loss) for the year from continuing operations (22,318) (160,465)
Adjustments for:
Amortisation and depreciation (notes 8, 9 and 10) 47,313 43,725
Finance income (2,438) (2,640)
Finance expenses 36,514 33,367
Translation differences 1,857 762
Impairment of non-current assets 6,286 120,695
Losses on disposal of property, plant and equipment and other losses (7,243) (2,226)
Impairment of inventories - 647
Allocation of provisions - 4,213
Impairment of trade receivables (note 13) 359 198
55,591 34,847
Change in working capital
(Increase)/decrease in inventories (note 12) (400) (2,411)
(Increase)/decrease in trade and other receivables (12,455) 18,680
(Increase)/decrease in other current and non-current assets 4,430 5,105
Increase/(decrease) in trade and other payables 5,687 (20,390)
Increase/(decrease) in provisions (2,844) (470)
(Increase)/decrease in other current and non-current liabilities (4,524) (4,625)
Cash flows from discontinued operations - (1,635)

Cash from operations (10,106) (5,746)

Interest received 2,438 2,640

Interest paid (28,111) (34,418)
Income tax paid (3,715) (3,978)

Net cash from operating activities 16,097 (6,655)

Cash flows from investing activities

Proceeds from sale of property, plant and equipment and intangible assets 4,272 4,857
Acquisition of property, plant and equipment (30,000) (16,943)
Acquisition of intangible assets (10,139) (8,788)
Acquisition of subsidiaries, net of cash and cash equivalents (1.078) (18,689)
Cash flows from (used in) discontinued operations 288 6,090
Income from sub-leases 5,362 8,408

Net cash used in investing activities (31,295) (25,065)

Cash flows from financing activities

Issuance of debentures and bonds, net of issue costs -
Cancellation of borrowings from credit institutions (10,000) -
Issuance of debt with credit institutions, net of issue costs 42,672 58,372
Issuance of related-party debt, net of issue costs 3,026 -
Issuance of equity instruments 20,113 -
Lease liability payments (27,484) (28,990)

Net cash used in financing activities 28,327 29,382

Net increase/(decrease) in cash and cash equivalents 13,129 (2,338)

Cash and cash equivalents at 1 January 45,134 47,857

Cash received in business combinations - -
Effect of translation differences (101) (385)

Cash and cash equivalents at 31 December 58,162 45,134

The accompanying notes form an integral part of the consolidated annual accounts for 2021.
 TASTY BIDCO, S.L.
AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

31 December 2021

(1) Nature, Activities and Composition of the Group

Tasty Bidco, S.L. (hereinafter, “the Company” or “the Parent Company”) was incorporated as a
limited liability company in Spain on 4 October 2018 with the registered name Global
Mastodon, S.L. for an indefinite period, and on 12 December 2018 it changed its registered
name to the current one. The Company’s registered office is located at Calle Isla Graciosa, 7,
San Sebastián de los Reyes, (Madrid, Spain).

On 21 December 2018, KKR Creditor Advisors (US) LLC, the main shareholder of Food
Delivery Brands Group, S.A. (formerly Telepizza Group, S.A.) announced its intention to
acquire all the shares in Food Delivery Brands Group, S.A., so as to delist the Company from
the Spanish stock market. The price offered was Euros 6 per share. The takeover was approved
by the Spanish National Securities Market Commission (CNMV) on 28 April 2019, the results
were made public on 9 May 2019, and the process concluded on 13 May 2019. As a result of
the takeover, Tasty Bidco, S.L. became the main shareholder of Food Delivery Brands Group,
S.A. and therefore Grupo Tasty Bidco, S.L. and subsidiaries (hereinafter, the Group, the Tasty
Group or the Food Delivery Brands Group) was incorporated on 13 May 2019.

The statutory activity of the Company consists of carrying out economic studies, promoting sales
of all types of products on behalf of the Company or third parties, including door-to-door
advertising, import and export of all types of products and raw materials, manufacturing,
distributing and commercialising products for human consumption and leasing machinery and
equipment. The aforementioned statutory activities can be entirely or partially carried out,
directly or indirectly, through the holding of shares or interests in companies that perform
these activities either in Spain or abroad. The Company shall not carry out any activities that
are subject to specific legal conditions or requirements without complying in full therewith.

The core activity of the Parent Company is its ownership interest in Food Delivery Brands Group,
S.A. and the provision of corporate and strategic management-related services on behalf of
Food Delivery Brands Group, S.A. and other group companies.

The principal activity of its subsidiaries consists of the management and operation of retail outlets
under the brand names of “telepizza”, “Pizza World”, “Jeno’s Pizza” and “Apache”, which
sell food for consumption at home and on the premises. At 31 December 2021, this activity
was carried out through 556 own outlets and 1,996 franchises (539 own outlets and 1,977
franchises in 2020), located mainly in Spain, Portugal, Chile, Colombia, Ecuador, Mexico,
Switzerland, Ireland, Guatemala and El Salvador. Furthermore, the Group also conducts its
business via the master franchises located in Guatemala, El Salvador, Costa Rica, Peru,
Honduras, Puerto Rico and Panama, among other countries.

(Continued)
 2

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group purchases cheese in Spain through a supplier with whom it has signed a long-term
exclusivity agreement and agreed a minimum annual volume. This agreement offers flexibility
and enables optimum inventory management. Through its factory and logistics centre in
Daganzo (Madrid), Food Delivery Brands, S.A. (formerly Tele Pizza, S.A.) supplies all the
outlets in Spain and Portugal that are directly operated by the Group or through its franchises.
The Group also owns another 4 plants in countries where it manufactures dough and it operates
through more than 20 logistics platforms. The high volume of purchases gives rise to
economies of scale and facilitates the uniformity of the products purchased.

The franchise activity consists mainly of advising on the management of third parties’ outlets that
operate under the “telepizza”, “Pizza Hut”, “Pizza World”, “Jeno’s Pizza” and “Apache”
brand names. The Food Delivery Brands Group receives a percentage of its franchisees’ sales
(royalties) for these services. The Group centralises the promotional and advertising activities
for all the outlets operating in certain territories under the aforementioned brand names and
receives a percentage of its franchisees’ sales as advertising revenues. In addition, the Group
subleases some of the premises in which its franchisees carry out their activity and provides
personnel management services, such as preparing the payroll for some its franchisees.

The master franchise activity includes the operations carried out in those countries in which the
Group does not operate directly because it has signed a contract licensing the “Pizza Hut”
brand to a local operator. Master franchise contracts entitle the master franchisee to operate in
a specific market, enabling them to open their own outlets or to establish outlets under
franchise agreements.

In May 2018, the Group announced it would enter into a long-term strategic alliance with Pizza
Hut, a Yum! Brands company. Once approval had been obtained from the European anti-trust
authorities, the agreement entered into force on 30 December 2018 through a master franchise
contract. Some of the most relevant aspects of the master franchise contract between the Group
and Pizza Hut are as follows:

 The Group has become the exclusive master franchisee of Pizza Hut for the Iberian
Peninsula, Latin America (including the Caribbean, with the sole exception of Brazil)
and Switzerland.

 The master franchise contracts have a term of 30 years, with two 10-year extensions
(30+10+10) in Spain, Portugal and Chile, and a term of 10 years plus extensions of 10
years and 5 years, respectively, (10+10+5) in the other markets.

 The Group charges franchisees of the Pizza Hut chain a royalty and pays a further royalty
to Yum! Brands on sales of the Pizza Hut chains within the territories covered by the
agreement and on sales of the “telepizza” chain under the strategic partnership agreement.

(Continued)
 3

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

 The Group is required to convert the outlets under the “telepizza” name in Latin America
to “Pizza Hut” within a period of five to ten years. The Group is not required to convert
these outlets in Spain and Portugal and as such, both brands will continue to co-exist.

 The Group has committed to opening a set number of new outlets over a 10-year period,
with annual targets agreed by both parties, which for the first three years includes an
incentive in favour of the Group. See amendments to the original agreement in Note
1(a)(ii).

 In countries where the Group operates under the “telepizza” brand but which are not
covered by the master franchise contract, a period has been established for carrying out
divestments (Poland, the Czech Republic and other minor countries where the Group
operates through a master franchisee). During 2021, the liquidation of the Group's
company in the Czech Republic was completed, as well as the sale of the Group's business
in Poland (see Note 6) and the termination of the master franchise agreement in Russia.

 As part of the agreement, Food Delivery Brands, S.A. contributed the bare ownership of
the “telepizza” brand to a newly-created Group company TDS Telepizza, S.L. in which
Pizza Hut holds a non-controlling interest.

 The Group granted an option to purchase on the aforementioned bare ownership to Pizza
Hut for Euros 1,750 thousand, which may be exercised once, 3 years after signing the
agreements for the agreed price. The price agreed is equal to the fair value of this asset
at that time, which reflects the residual value of the “telepizza” brand at the end of the
master franchise contract indicated above (30+10+10 years) and amounted to Euros
10,100 thousand. This call option may only be settled through the physical delivery of
non-financial consideration; consequently, it is not accounted for as a derivative financial
instrument.

 In financial year 2021, the Group and Pizza Hut International LLC have agreed on the
early exercise of the aforementioned purchase option for an additional payment of USD
3,000 thousand and, as originally agreed, the Group retains the usufruct of the "telepizza"
brand and continues to operate the brand as permitted by the strategic partnership
agreement. Exercise of this option by Pizza Hut does not affect the Group’s rights to the
exclusive use of the brand (see note 4 (f)).

The subsidiaries and subgroups composing the Food Delivery Brands Group (the Group), and the
percentage ownership and details of the respective shareholders’ equities at 31 December 2021
and 2020, are included in Appendix I attached hereto, which forms an integral part of these
notes. The Group does not hold interests in other entities or in jointly controlled entities, assets
or operations.

(Continued)
 4

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(a) Significant events in 2021 and 2020

(i) Coronavirus pandemic (COVID-19)

On 11 March 2020, the World Health Organization declared the outbreak of coronavirus
disease (COVID-19) a pandemic, due to its rapid global spread, affecting more than
150 countries on that date. Most governments took restrictive measures to curb the
spread, which included: isolation, lockdowns, quarantine and restrictions on the free
movement of people, closure of public and private premises except those considered
essential or relating to healthcare, border closures and drastic reductions in air, sea,
rail and road transport.

This situation has had a significant impact on the global economy, due to the disruption
or slowing of supply chains and the sizeable increase in economic uncertainty,
evidenced by an increase in the volatility of asset prices and exchange rates, as well
as cuts in long-term interest rates.

Governments approved various extraordinary emergency measures to mitigate the

economic and social impact of the COVID-19 outbreak.

The Group develop a “COVID-19 Prevention Protocol”, which outlines the security
measures implemented to tackle the situation with the best safeguards for health, and
always in compliance with strict procedures and to ensure the health and welfare of
its employees and customers at all times.

The Group works coordinated with and at the disposal of the authorities to ensure the
health and welfare of employees and customers alike, and to meet any needs we can
by contributing our resources.

Likewise, many of the health measures implemented by governments to curb the spread
of the pandemic consisted of imposing bans or restrictions on opening hours for outlet
operations. Nevertheless, the Group has managed to adapt to these circumstances,
continuing with its activity and increasing primarily home delivery and takeaway
services. However, due to the decline in activity, in order to streamline efforts and
optimise resources the Group implemented various furlough schemes which in Spain
affected 1,520 employees in 2020 (see note 3), and the Group’s executives agreed to
temporary pay cuts.

In 2020, the Group drew down a (revolving) credit facility and ICO loans were arranged
amounting to Euros 45,000 thousand (drawn down in 2021) and Euros 10,000
thousand, respectively, in addition to the existing funding (see note 18), which helped
the Group to address the health emergency and continue with its activities.

(Continued)
 5

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group also analysed potential options for optimising the current capital structure, in
order to adapt it to the new business circumstances and the economic and competitive
environment resulting from COVID-19, and to obtain the necessary financial
resources to fully implement the business plan devised for the next few years.

Along these lines, the Group held contacts with various commercial banks in Spain to
explore access to new ICO-guaranteed loans designed to cover the temporary impacts
of COVID, and also other funding alternatives, including additional shareholder
contributions, renegotiating the conditions of current financing or trading new
financial instruments.

As a result of the foregoing, in January 2021 the following arrangements were made:

 The majority shareholder of Tasty Bidco, S.L. increased capital by Euros 16,974
thousand and undertook, if necessary, to raise an additional Euros 18,671
thousand (see note 16).

 On 22 December 2020, Tasty Bidco, S.L.U. and BG Select Investments (Ireland)

Limited (minority shareholder of Food Delivery Brands Group, S.A), as lenders,
and Food Delivery Brands Group, SA, a subsidiary of Tasty Bidco S.L. as
borrower, signed a subordinated loan agreement for an amount of up to Euros
43,299 thousand, maturing in 2026, divided into two funding tranches: (i) a first
tranche amounting to Euros 20,619 thousand that was disposed in January 2021,
of which 17,499 thousand euros correspond to the Company and Euros 3,120
thousand to the minority shareholder (see note 18(b)) and (ii) a second tranche
for an amount of up to Euros 22,680 thousand that Food Delivery Brands Group,
SA may dispose of, under certain assumptions linked to the liquidity situation of
the Group.

 Bank loans have been arranged for an additional amount of Euros 30,000
thousand, maturing in November 2025 (see note 18(b)).

In 2020, as a result of the impact on the global economy of the COVID-19 pandemic and
based on a new business plan that factors in the estimated effects of the pandemic on
cash flow forecasts for the coming fiscal years, the Group recognised an impairment
on non-current assets for a total of Euros 120,695 thousand. In addition, in 2021 the
Group updated its cash flow projections to the current economic situation in each of
the markets in which it operates and, as a result, recognised an impairment of non-
current assets for an additional amount of Euros 6,286 (see Notes 8, 10 and 24).

(Continued)
 6

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

On the date of issuing these consolidated annual accounts, the Group does not expect any
additional impacts other than the events mentioned above on its cash flows, equity
and financial position and operating earnings. However, there is currently still some
uncertainty regarding the vaccine rollout and the duration of the effects of COVID-19
on the economies of countries where we are present, regarding the behaviour of
consumers in this new environment, the evolution of the economy and the effects of
inflation and the current geopolitical landscape and their effect on the supply chain.

(ii) New agreement with YUM¡

In May 2021, the subsidiary Food Delivery Brands, S.A. and Yum! Brands Inc. agreed
to amend certain terms and targets of their strategic partnership to better tackle the
new economic context. Among others, the main changes relate to: (i) openings,
extending the ten-year target by one additional year and revising the targets for net
new units per market; (ii) slowing down the conversion schedule for Telepizza outlets
in Chile, Colombia and rest of the World; (iii) opening penalty amounts, postponing
the period and increasing the threshold below which these penalties would apply; and
(iv) incentives, revising the terms, deadlines and targets required to obtain them.

In 2018, as part of the initial agreement with YUM¡, Food Delivery Brands, S.A.
contributed the bare ownership of the “Telepizza” brand to a newly-created Group
company TDS Telepizza, S.L. in which Pizza Hut held a non-controlling interest.
Food Delivery Brands, S.A. reserved the right to use and exploit the benefits of the
brand by means of a 30-year usufruct agreement with the new company. In addition,
the Group granted Pizza Hut an option to purchase the aforementioned bare ownership
for an amount of Euros 1,750 thousand, which would be exercisable at a single time
3 years after the signing of the agreements for the agreed price. The agreed price was
equivalent to the fair value of the asset at that date, which amounted to Euros 10,100
thousand. The exercise of this option by Pizza Hut will not affect the Group's rights
to the exclusive use of the brand.

As a consequence of this new agreement, on 14 May 2021 the Group and Pizza Hut
International LLC agreed on the possibility of an early exercise of the aforementioned
purchase option in exchange for an additional payment of USD 3,000 thousand and,
on the same date, Pizza Hut decided to exercise this purchase option on the bare
ownership of the "telepizza" brand. As originally agreed, the Group retains the
usufruct of the Telepizza brand and continues to operate the brand as permitted by the
strategic partnership agreement.

(Continued)
 7

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(iii) Acquisition of Pizza Hut’s Mexico business

In January 2020, the Group acquired control of Pizza Hut’s Mexico business by means
of a subsidiary in Mexico 75%-owned by Food Delivery Brands, S.A. and 25%-owned
by the sellers, a stake on which the Group had a purchase option. In 2021, the Group
exercised this purchase option for the remaining 25% (see Notes 2(d) and 7), and now
controls 100% of the Pizza Hut Mexico operation through Iberifood SAPI S.A. de
R.L. de C.V.

(2) Basis of Presentation

The accompanying consolidated annual accounts have been prepared on the basis of the
accounting records of Tasty Bidco, S.L. and of the consolidated companies. The consolidated
annual accounts for 2021 have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union (IFRS-EU), and other applicable
provisions in the financial reporting framework, to give a true and fair view of the
consolidated equity and consolidated financial position of Tasty Bidco, S.L. and subsidiaries
at 31 December 2021 and of the consolidated results of operations and changes in
consolidated equity and cash flows for the year then ended.

The Group adopted IFRS-EU from the date of first consolidation on 13 May 2019 and applied
IFRS 1, “First-time Adoption of International Financial Reporting Standards”.

The Directors of the Parent Company consider that the consolidated annual accounts for 2021,
authorised for issue on 24 March 2022, will be approved with no changes by the shareholders
at their General Shareholders' Meeting.

(a) Basis of preparation of the annual accounts

These consolidated annual accounts have been prepared on a historical cost basis, except
for the following:
 Non-current assets and disposal groups classified as held for sale, which are measured at
the lower of their carrying amount and fair value less costs to sell.

(b) Comparative information

The consolidated statement of financial position, consolidated statement of profit or loss,

consolidated statement of comprehensive income, consolidated statement of changes in
equity, consolidated statement of cash flows and the notes thereto for 2021 include
comparative figures for the previous year, which were part of the consolidated annual
accounts for 2020, approved by the Sole Shareholder at the general meeting held on 30
June 2021.

(Continued)
 8

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(c) Relevant accounting estimates, assumptions and judgements used when applying accounting
policies

Relevant accounting estimates and judgements and other estimates and assumptions have to
be made when applying the Group’s accounting policies to prepare the consolidated
annual accounts in conformity with IFRS-EU.

A summary of the items requiring a greater degree of judgement or which are more complex,
or where the assumptions and estimates made are significant to the preparation of the
consolidated annual accounts, is as follows:

 The Group determines the useful life of certain intangible assets acquired in a business
combination based on assumptions relating to brand positioning, estimated future market
share, investments in the brand and the projected cash flows to be generated by these
assets (see note 4 (f)).

 The Group tests goodwill and brand “Apache” for impairment on an annual basis.
Calculation of the recoverable amount requires the use of estimates by management. The
recoverable amount is the higher of fair value less costs to sell and value in use. The
Group generally uses discounted cash flow methods to calculate these values, based on
projections of the budgets approved by management. The cash flows take into
consideration past experience and represent management’s best estimate of future market
performance. The key assumptions employed when determining fair value less costs to
sell include growth rates, the weighted average cost of capital, and tax rates. The
estimates, including the methodology employed, could have a significant impact on the
values and the impairment loss (see notes 4(h) and 10).

 Valuation allowances for bad debts require a high degree of judgement by management
and a review of individual balances based on customers’ credit ratings, current market
trends and historical analysis of bad debts at an aggregated level. Any decrease in the
volume of outstanding balances entails a reduction in impairment resulting from an
aggregate analysis of historical bad debts, including an analysis of expected loss, and
vice-versa (see note 13).

 The Group capitalises tax credits when they are likely to be offset in the foreseeable
future based on the business plans for each tax jurisdiction in which it operates (see note
26). The calculation of the recoverable amount of these deferred tax assets requires the
use of estimates by management. The calculations regarding their recoverability are
based on the projections for coming years in the budgets approved by the Board of
Directors, considering past experience, and represent the best estimate of future market
performance.

(Continued)
 9

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

 The Group is subject to regulatory and legal processes and inspections by government
bodies in various jurisdictions. The Group recognises a provision if it is probable that an
obligation will exist at year end which will give rise to an outflow of resources embodying
economic benefits and the outflow can be reliably measured. Legal processes usually
involve complex issues and are subject to substantial uncertainties. As a result, the
Directors use significant judgement when determining whether it is probable that the
process will result in an outflow of resources embodying economic benefits and
estimating the amount.

Although estimates are calculated by the Company’s Directors based on the best information
available at 31 December 2021, future events may require changes to these estimates in
subsequent years. Any effect on the consolidated annual accounts of adjustments to be
made in subsequent years would be recognised prospectively.

(d) Consolidation scope

In January 2020, the Group acquired control of Pizza Hut’s Mexico business by means
of a subsidiary in Mexico 75%-owned by Food Delivery Brands, S.A. and 25%-owned
by the sellers (see notes 1(a) and 7). In 2021, the Group exercised this purchase option
for the remaining 25% (see Notes 2(d) and 7) and will now control 100% of the Pizza
Hut Mexico operation through Iberifood SAPI S.A. de R.L. de C.V.

(e) Standards and interpretations issued

Standards and interpretations effective since 2021

The amendments to standards and interpretations or new standards introduced since 1

January 2021 have not led to changes in the Group’s accounting policies and had no
material impacts.

Standards and interpretations issued but not applied

New standards to be introduced since 1 January 2022 and those scheduled for introduction
in subsequent years have a negligible or zero impact on the consolidated annual accounts
and, accordingly, will not lead to a material change in the Group’s accounting policies.

 Amendment to IAS 37 – Provisions, Contingent Liabilities and Contingent Assets:

Provisions for onerous contracts. The Company must apply this standard in its first IFRS
financial statements for periods beginning on or after 1 January 2022.

 Amendment to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use.
The Company must apply this standard in its first IFRS financial statements for periods
beginning on or after 1 January 2022.

(Continued)
 10

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

 Classification of liabilities as current or non-current. The Company must apply this

standard in its first IFRS financial statements for periods beginning on or after 1 January
2023. Pending adoption by the UE.

 Definition of accounting estimates. The Company must apply this standard in its first
IFRS financial statements for periods beginning on or after 1 January 2023. Pending
adoption by the UE.

 Breakdowns of accounting policies. The Company must apply this standard in its first
IFRS financial statements for periods beginning on or after 1 January 2023. Pending
adoption by the UE.

(f) Functional and presentation currency

The figures disclosed in the consolidated annual accounts are expressed in thousands of
Euros, the functional and presentation currency of the Parent Company, rounded off to
the nearest thousand.

(3) Appropriation of profit or loss of the Parent Company

The proposed appropriation of the profit of Tasty Bidco, S.L. for 2021 of Euros 4,229,959, made
by the Board of Directors for submission to the General Shareholders' Meeting for approval,
was that it be offset with prior years' losses.

The proposed appropriation of Tasty Bidco, S.L.’s Euros 85,921,400 loss in 2020, approved by
the Sole Shareholder on 30 June 2021, was that it be fully transferred to prior years’ losses.

In accordance with note 1(a), some companies belonging to the Group in Spain made use of
furlough schemes regulated by article 1 of Royal Decree-Law 18/2020, dated 12 May,
concerning measures to safeguard employment, articles 1 and 2 of Royal Decree-Law
24/2020, dated 26 June, concerning social measures to reactivate employment and protect
the self-employed and competitiveness in the industrial sector, extended by Royal Decree-
Law 30/2020, dated 29 September, concerning social measures to safeguard employment,
using the public resources earmarked for that purpose and by Royal Decree-Law 2/2021,
dated 26 January, concerning additional support and consolidation of measures to safeguard
employment. As a consequence of this, and in accordance with the provisions of articles 5
of said Royal Decrees, article 4 of Royal Decree-Law 30/2020 and article 3 of Royal Decree-
Law 2/2021, the subsidiaries that have made use of these schemes and that comply with
certain requirements are prohibited from distributing dividends for the fiscal year in which
the furlough schemes are in force, unless they previously reimburse the amount
corresponding to the exemption applied to Social Security contributions and they have
waived said exemption.

(Continued)
 11

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(4) Accounting Principles

(a) Subsidiaries

Subsidiaries are entities over which the Parent Company, either directly or indirectly,
exercises control. The Company controls a subsidiary when it is exposed or has rights to
variable returns from its involvement with the subsidiary and has the ability to affect those
returns through its power over the subsidiary. The Company has power over a subsidiary
when it has existing substantive rights that give it the ability to direct the relevant
activities. The Company is exposed, or has rights, to variable returns from its involvement
with the subsidiary when its returns from its involvement have the potential to vary as a
result of the subsidiary’s performance.

The income, expenses and cash flows of subsidiaries are included in the consolidated annual
accounts from the date of acquisition, which is when the Group takes control. Subsidiaries
are excluded from consolidation from the date that control ceases.

Transactions and balances with Group companies and significant unrealised gains or losses
have been eliminated on consolidation. Nevertheless, unrealised losses have been
considered as an indicator of impairment of the assets transferred.

The subsidiaries’ accounting policies have been adapted to the Group’s accounting policies
for alike transactions and events in similar circumstances.

The annual accounts or financial statements of the subsidiaries used in the consolidation
process have been prepared as of the same date and for the same period as those of the
Parent Company.

Information on the subsidiaries included in the consolidated Group is presented in Appendix

I to note 1.

(b) Business combinations

The Group applies the acquisition method for business combinations.

The acquisition date is the date on which the Group obtains control of the acquiree.

The consideration transferred in a business combination is calculated as the sum of the

acquisition-date fair values of the assets transferred, the liabilities incurred or assumed,
the equity instruments issued and any consideration contingent on future events or
compliance with certain conditions in exchange for control of the acquiree.

(Continued)
 12

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The consideration transferred excludes any payment that does not form part of the exchange
for the acquired business. Acquisition costs are recognised as an expense when incurred.

With the exception of lease and insurance contracts, the assets acquired and liabilities
assumed are classified and designated for subsequent measurement based on contractual
agreements, economic terms, accounting and operating policies and any other conditions
existing at the acquisition date.

The business acquired has a number of associated asset lease contracts with third parties. On
the acquisition date, the Group assessed whether the conditions of said contracts are
favourable or unfavourable as compared with market conditions. The Group measures the
lease liability at the present value of the residual lease payments, as though the contract
acquired were a new lease on the acquisition date. The Group measures the rights-of-use
asset for the same amount as the liability, adjusted to reflect the favourable or
unfavourable conditions as compared with market conditions.

If the business combination can only be determined provisionally the identifiable net assets
are initially recognised at their provisional values and adjustments made during the
measurement period are recognised as if they had been known at the acquisition date.
Comparative figures for the previous year are restated where applicable. In any event,
adjustments to provisional amounts only reflect information obtained about facts and
circumstances that existed at the acquisition date and, if known, would have affected the
measurement of the amounts recognised at that date. After this period, the initial
measurement is only adjusted when correcting errors.

The potential benefit of the acquiree’s income tax loss carryforwards and other deferred tax
assets, which are not recognised as they did not qualify for recognition at the acquisition
date, is accounted for as income tax income provided that it does not arise from an
adjustment of the measurement period.

If the Group has no previously held interest in the acquiree, the excess between the amount
allocated to non-controlling interests, and the net assets acquired and liabilities assumed
is recognised as goodwill. Any shortfall is recognised in profit or loss, after assessing the
value assigned to non-controlling interests, and the identification and measurement of net
assets acquired.

Contingent consideration is classified in accordance with the underlying contractual terms

as a financial asset, financial liability, equity instrument or provision. Subsequent changes
in the fair value of a financial asset or financial liability are recognised in profit or loss,
provided that they do not arise from a measurement period adjustment. Contingent
consideration classified as equity is not remeasured, and subsequent settlement is
accounted for in equity. Contingent consideration classified as a provision is subsequently
recognised at fair value through profit or loss.

(Continued)
 13

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(c) Foreign currency transactions and balances

(i) Foreign currency transactions, balances and cash flows

Transactions in foreign currency are translated at the spot exchange rate prevailing at
the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies have been translated
into Euros at the closing rate, while non-monetary assets and liabilities measured at
historical cost have been translated at the exchange rate prevailing at the transaction
date. Non-monetary assets measured at fair value have been translated into Euros at
the exchange rate at the date that the fair value was recognised.

In the consolidated statement of cash flows, cash flows from foreign currency
transactions have been translated into Euros at the exchange rates prevailing at the
dates the cash flows occur. The effect of exchange rate fluctuations on cash and cash
equivalents denominated in foreign currencies is recognised separately in the
statement of cash flows as “Effect of exchange rate fluctuations on cash and cash
equivalents held”.

Exchange gains and losses arising on the settlement of foreign currency transactions and
the translation into Euros of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss. However, exchange gains or losses arising
on monetary items forming part of the net investment in foreign operations are
recognised as translation differences in other comprehensive income.

Monetary financial assets denominated in foreign currencies classified as available for

sale are measured at amortised cost in the foreign currency. Consequently, the
translation differences associated with changes in amortised cost are recognised in
profit or loss.

Unrealised foreign exchange gains or losses relating to non-monetary assets and

liabilities are recognised in conjunction with the change in fair value. Nevertheless,
the foreign exchange risk component of non-monetary financial assets denominated
in foreign currencies, classified as available-for-sale and as hedged items in fair
value hedges of the component, are recognised in profit or loss.

(ii) Translation of foreign operations

Foreign operations whose functional currency is not the currency of a hyperinflationary

economy have been translated into Euros as follows:
 

(Continued)
 14

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

 Assets and liabilities, including goodwill and net asset adjustments derived from
the acquisition of the operations, including comparative amounts, are translated at
the closing rate at the reporting date.

 Income and expenses, including comparative amounts, are translated at the

exchange rates that approximate those prevailing at each transaction date.

 All resulting translation differences are recognised as translation differences in

other comprehensive income.

For presentation of the consolidated statement of cash flows, cash flows of the
subsidiaries and foreign joint ventures, including comparative balances, are
translated into Euros applying exchange rates that approximate those prevailing at
the transaction date.

Translation differences recognised in other comprehensive income are accounted for in

profit or loss as an adjustment to the gain or loss on the sale using the same criteria
as for subsidiaries.

(d) Property, plant and equipment

Property, plant and equipment are recognised at cost, less accumulated depreciation and any
accumulated impairment losses.

Non-current investments in properties contracted from third parties under operating leases
are measured based on the same criteria used for property, plant and equipment. Assets
are depreciated over the shorter of the lease term and their useful life. The term of the
lease contract is determined consistently with the classification thereof.

Property, plant and equipment are depreciated by allocating the depreciable amount of the
asset on a systematic basis over its useful life.

Property, plant and equipment are depreciated on a straight-line basis over the following
estimated useful lives:

Buildings 33
Technical installations and machinery 3 - 15
Other installations, equipment and furniture 10
IT equipment 4
Other 4-6

The depreciable amount is the cost of an asset.

(Continued)
 15

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group reviews residual values, useful lives and depreciation methods at each financial
year end. Changes to initially established criteria are accounted for as a change in
accounting estimates, where applicable. In the subsequent reviews, the depreciation
period is determined in accordance with the best estimate on the date the investments are
made.

The Group determines the depreciation charge separately for each component of an item of
property, plant and equipment with a cost that is significant in relation to the total cost of
the asset and with a useful life that differs from the remainder of the asset.

Subsequent to initial recognition of the asset, only those costs incurred which will generate
probable future profits and for which the amount may reliably be measured are
capitalised. In that regard, costs of day-to-day servicing of property, plant and equipment
are recognised in profit or loss as incurred.

The Group measures and determines impairment or reversal of impairment of property, plant
and equipment based on the criteria in section (h) of this note.

(e) Right-of-use assets

(i) Identification of a lease

At inception of a contract, the Group assesses whether the contract contains a lease. A
contract is —or contains— a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for consideration. The period in
which a Group uses an asset includes consecutive and non-consecutive periods. The
Group only reassesses the conditions when there is a modification to the contract.

(ii) Lessee accounting

For a contract that contains a lease component and one or more additional lease or non-
lease components, the Group allocates the consideration in the contract to each lease
component on the basis of the relative stand-alone price of the lease component and
the aggregate stand-alone price of the non-lease components.

The payments made by the Group that do not imply the transfer of goods or services
thereto by the lessor do not constitute a separate lease component, but form part of the
total contractual consideration.

The Group has opted not to apply the accounting policies shown below for short-term
leases and those with a value of less than Euros 5 thousand.

(Continued)
 16

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group recognises the lease payments associated with those leases as an expense on
a straight-line basis over the lease term.

At the lease commencement date the Group recognises a right-of-use asset and a lease
liability. The right-of-use asset comprises the amount of the initial measurement of the
lease liability, any lease payment made at or before the commencement date, less any
lease incentives received, any initial direct costs incurred.

The Group measures the lease liability at the present value of the lease payments that are
not paid at that date. The Group discounts lease payments at the appropriate
incremental interest rate, unless it can readily determine the lessor’s implicit interest
rate.

Lease payments pending comprise fixed payments less any incentives receivable, variable
payments that depend on an index or rate, initially measured using the index or rate as
at the commencement date, the amounts expected to be payable under residual value
guarantees, the exercise price of the option to purchase if the lessee is reasonably
certain to exercise that option, and the payment of penalties for terminating the lease,
provided that the lease term reflects the lessee exercising an option to terminate the
lease.

The Group measures right-of-use assets at cost, less any accumulated depreciation and
impairment, adjusted for any re-measurement of the lease liability.

If the lease transfers ownership of the underlying asset to the Group by the end of the
lease term or if the cost of the right-of-use asset reflects that the lessee will exercise a
purchase option, the Group depreciates the right-of- use asset from the commencement
date to the end of the useful life of the underlying asset. Otherwise, the Group
depreciates the right-of-use asset from the commencement date to end of the useful
life of the right-of-use asset or the end of the lease term, whichever is earlier.

The Group applies to the right-of-use asset the impairment of non-current assets criteria
set forth in section (h) of this note.

The Group measures lease liabilities by increasing the carrying amount to reflect interest
on the lease liability, reducing the carrying amount to reflect the lease payments made,
and remeasuring the carrying amount to reflect any lease modifications or to reflect
revised in-substance fixed lease payments.

The Group recognises variable lease payments not included in the measurement of the
lease liability in the period in which the event or condition that triggers those payments
occurs.

The Group recognises the amount of remeasurement of the liability as an adjustment to

the right-of-use asset until this is reduced to zero and subsequently in profit or loss.

(Continued)
 17

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group remeasures lease liabilities by discounting the revised lease payments using a
revised discount rate, if there is a change in the lease term or a change in assessment
of an option to purchase the underlying asset.

The Group accounts for a lease modification as a separate lease if it increases the scope
of the lease by adding the right to use one or more underlying assets and the
consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope and any appropriate adjustments to that stand-alone
price to reflect the circumstances of the particular contract.

If the modification does not result in a separate lease, on the effective lease modification
date the Group allocates the consideration in the modified contract in accordance with
the above, it re-determines the modified lease term and it remeasures the lease liability
by discounting the revised lease payments using a revised discount rate. The Group
decreases the carrying amount of the right-of-use asset to reflect the partial or full
termination of the lease for lease modifications that decrease the scope of the lease, in
those modifications that diminish the lease scope, and it recognises any gain or loss in
profit or loss. For all other lease modifications, the Group adjusts the carrying amount
of the right-of-use asset.

In 2021, the Group did not apply the new optional practical simplification established in
the standard on whether the evaluation of concessions in lease payments resulting from
the COVID-19 coronavirus are a lease modification.

(iii) Lessor accounting

In contracts containing a lease component and one or more additional lease or non-lease
components, the Group allocates the contractual consideration as indicated in the
accounting policy on revenue from contracts with customers.

The Group classifies as financial leases those contracts whose terms transfer substantially
all the risks and rewards incidental to ownership of the leased asset to the lessee.
Otherwise they are classified as operating leases.

 Finance leases

The Group recognises a receivable in the amount equal to the current value of lease
income, plus the unguaranteed residual value, discounted at the interest rate
implicit in the lease (net lease investment). Initial direct costs are included in
the initial measurement of the net investment in the lease and reduce the amount
of income recognised over the lease term. Finance income is taken to profit or
loss using the effective interest method.

(Continued)
 18

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

At the commencement of the lease, the Group recognises in the lease receivable
the payments pending relating to fixed payments less any incentives receivable,
variable payments that depend on an index or rate, initially measured using the
index or rate as at the commencement date, any amounts paid to the lessor under
residual value guarantees by the lessee, a party related thereto or an unrelated
third party with the financial capacity to meet the obligation, the exercise price
of any purchase option if the lessee is reasonably certain to exercise that option,
and the payment of penalties for terminating the lease, provided that the lease
term reflects the lessee exercising an option to terminate the lease.

The Group recognises a modification to a finance lease as a separate lease if the

modification increases the scope of the lease by adding the right to use one or
more underlying assets and the consideration for the lease increases by an
amount commensurate with the stand-alone price for the increase in scope and
any appropriate adjustments to that stand-alone price to reflect the
circumstances of the particular contract.

If the modification does not result in a separate lease and the lease had been
classified as an operating lease, if the modification took place at the
commencement of the lease term, the Group accounts for the modification as a
new lease from the effective date of modification and measures the carrying
amount of the underlying asset as the net lease investment immediately before
the effective modification date. Otherwise, the Group applies the modification
requirements indicated in the accounting policy for financial instruments.

The Group periodically assesses unguaranteed residual values. If there is a

reduction, the recognition of income in the residual period is reviewed and any
decrease relating to the accrued amounts is immediately recognised in profit or
loss.

The finance lease assets that meet the criteria to be classified as non-current assets
held for sale are recognised and measured in accordance with the provisions of
section (g) of this note.

 Operating leases

The Group presents assets leased to third parties under operating lease contracts
according to their nature, applying the accounting policies set out in section (i)
of this note.

(Continued)
 19

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group recognises operating lease income, net of incentives granted, as income
on a straight-line basis over the lease term, unless another systematic basis is
more representative of the pattern in which benefit from the use of the
underlying asset is diminished.

Initial direct costs are added to the carrying amount of the leased asset and
recognised as an expense over the lease term on the same basis as the lease
income.

The Group recognises variable payments as income when they are likely to be
received, which is generally when the events triggering their payment take
place.

The Group recognises modifications to operating leases as a new lease from the
effective date of modification, considering any early or deferred payment for
the original lease as a part of the lease payments for the new lease.

 Subleases

The Group classifies a sublease as an operating lease if the head lease is a short-
term lease. Otherwise, the Group classifies the sublease as an operating or
finance lease by reference to the right-of-use asset of the head lease and not by
reference to the underlying asset.

(iv) Other considerations

Permanent investments in buildings leased by the Group are classified as property, plant
and equipment. Investments made at the lease commencement are depreciated over
the lease term or their useful life, whichever is shorter, consistent with the
determination of the lease term. In the subsequent reviews, the depreciation period is
determined in accordance with the best estimate on the date the investments are made.

(f) Intangible assets

(i) Goodwill

Goodwill on business combinations reflects the excess of the cost of the business
combination (see note 4(b)) over the acquisition-date fair value of the assets acquired
and contingent liabilities assumed from the acquiree. Gains and losses on the sale of
an entity include the carrying amount of goodwill from the sold entity.

(Continued)
 20

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Goodwill is not amortised but is tested for impairment annually or more frequently
where events or circumstances indicate that an asset may be impaired. Goodwill on
business combinations is allocated to the cash-generating units (CGUs) or groups of
CGUs which are expected to benefit from the synergies of the business combination.
The Food Delivery Brands Group has defined each of the outlets in which it operates
and the factories owned by the Group as the main CGUs. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses.

Internally generated goodwill is not recognised as an asset.

(ii) Intangible assets acquired in business combinations

The cost of identifiable intangible assets acquired in business combinations is their

acquisition-date fair value, provided that this can be measured reliably. Subsequent
costs relating to research and development projects are recognised in accordance
with the criteria for internally generated intangible assets.

(iii) Other intangible assets

Other intangible assets acquired by the Group are carried at cost, less any accumulated
amortisation and impairment losses in the consolidated statement of financial
position.

 Concessions, patents and licences

Concessions, patents and licences are measured at their cost of acquisition.

 Computer software

Acquired computer software licences are capitalised on the basis of the costs incurred
to acquire and bring the specific software to use.

Computer software maintenance costs are expensed as incurred.

(iv) Useful life and amortisation rates

The Group assesses whether the useful life of each intangible asset acquired is finite or
indefinite. An intangible asset is regarded as having an indefinite useful life when
there is no foreseeable limit to the period over which the asset will generate net cash
inflows.

(Continued)
 21

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Due to their market leadership and potential as umbrella brands for new sales concepts
through the extension of their range of products, the “telepizza” and “Apache”
brands are considered to have an indefinite useful life, which is in line with sector
practice for brands with similar characteristics. However, due to the early exercise
of the sale option on the "telepizza" brand (see note 1), the usufruct of the brand has
a finite useful life and is now therefore amortised over its remaining useful life,
which coincides with the period of the usufruct.

Intangible assets with indefinite useful lives are not amortised, but are instead tested for
impairment on an annual basis or whenever there is an indication that the intangible
asset may be impaired.

Intangible assets with finite useful lives are amortised by allocating the depreciable
amount of an asset on a straight-line basis over the following useful lives:

Brand (Telepizza Usufruct) 27.5

Patents and licences 4
Contractual rights 25
Computer software 4
Other intangible assets 4 - 10
Administrative concessions Operating term

The depreciable amount is the cost of an asset.

Contractual rights arising from the franchise agreements and the remaining intangible
assets are amortised over the period in which they are expected to contribute to
generating revenues (see note 10).

The Group reviews the residual value, useful life and amortisation method for intangible
assets at each financial year end. Changes to initially established criteria are
accounted for as a change in accounting estimates. In the subsequent reviews, the
depreciation period is determined in accordance with the best estimate on the date
the investments are made.

The Group measures and determines impairment to be recognised or reversed based on

the criteria in section (h) of this note.

(Continued)
 22

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(g) Non-current assets held for sale and discontinued operations

(i) Non-current assets held for sale

Non-current assets or disposal groups are classified as non-current assets held for sale
if their carrying amounts will be recovered principally through a sales transaction
rather than through continuing use. Non-current assets or disposal groups are
classified as held for sale, provided that they are available for sale in their present
condition subject to terms that are usual and customary for sales of such assets and
that the transaction is highly probable.

Non-current assets or disposal groups classified as held for sale are measured at the
lower of the carrying amount and fair value less the costs of disposal and are not
depreciated.

The Group classifies subsidiaries that comply with the above conditions and over
which the Group will lose control, irrespective of whether it continues to exercise
significant influence or joint control, as a disposal group held for sale or
distribution, or as a discontinued operation.

Impairment losses on initial classification and subsequent remeasurement of assets

classified as held-for-sale are recognised under profit or loss from continuing
operations in the consolidated income statement (consolidated statement of
comprehensive income), unless it is a discontinued operation. Impairment losses
on a cash generating unit (CGU) are allocated first to reduce the carrying amount
of goodwill and then to reduce pro rata the carrying amounts of other assets in the
unit.

Gains due to increases in the fair value less costs of disposal are recognised in the
profit or loss to the extent of the cumulative impairment previously recognised due
to measurement at fair value less costs of disposal or to impairment of non-current
assets.

(Continued)
 23

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

A non-current asset or disposal group, including subsidiaries and all or part of

investments in associates and joint ventures acquired exclusively for resale or
swap, is classified at the date of acquisition as held for sale if the transaction is
expected to be realised within twelve months after the reporting date and the sale
is considered highly probable within a short period subsequent to acquisition. On
initial classification as held-for-sale, non-current assets are recognised at the lower
of the carrying amount of the asset had it not been classified as held-for-sale and
fair value less costs of disposal.

The Group measures a non-current asset that ceases to be classified as held-for-sale or

to form part of a disposal group at the lower of the carrying amount before the asset
was classified as held-for-sale, adjusted for any depreciation, amortisation or
revaluations that would have been recognised had the asset not been classified as
held-for-sale, and its recoverable amount at the date of reclassification. Any
required adjustment to the carrying amount of a non-current asset that ceases to be
classified as held for sale is included in profit or loss from continuing operations
or other comprehensive income.

The consolidated annual accounts for prior periods since the classification of a
subsidiary, associate or joint venture as a disposal group or non-current asset held
for sale are restated as if they had never been classified as such. As a result, the
assets and liabilities of subsidiaries are presented according to their nature, and any
amortisation, depreciation or revaluations that would have been recognised had
they not been classified as disposal groups held for sale are recognised.

(ii) Discontinued operations

A discontinued operation is a component of the Group that either has been disposed
of, or is classified as held-for-sale, and:

 represents a separate major line of business or geographical area of operations;

 is part of a single co-ordinated plan to dispose of a separate major line of business

or geographical area of operations; or

 is a subsidiary acquired exclusively with a view to resale.

A component of the Group comprises operations and cash flows that can be clearly
distinguished, operationally and for financial reporting purposes, from the rest of
the Group.

(Continued)
 24

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group discloses the post-tax profit or loss of discontinued operations and the post-
tax gain or loss recognised on the measurement at fair value less disposal or
distribution costs or on the disposal of the assets or disposal groups constituting the
discontinued operation on the face of the consolidated income statement.

(h) Impairment of non-financial assets subject to amortisation or depreciation

The Group evaluates whether there are indications of possible impairment losses on non-
financial assets subject to amortisation or depreciation to verify whether the carrying
amount of these assets exceeds the recoverable amount.

The Group tests goodwill and the brand, which has an indefinite useful life, for impairment
at least annually, irrespective of whether there is any indication that the assets may be
impaired.

The recoverable amount of the assets is the higher of its fair value less costs to sell and its
value in use. An asset’s value in use is measured based on the future cash flows the Group
expects to derive from use of the asset, expectations about possible variations in the
amount or timing of those future cash flows, the time value of money, the price for bearing
the uncertainty inherent in the asset and other factors that market participants would
reflect in pricing the future cash flows the Group expects to derive from the asset.

Negative differences resulting from comparison of the carrying amounts of the assets with
their recoverable amount are recognised in profit or loss.

Recoverable amount is determined for each individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of
assets. If this is the case, recoverable amount is determined for the cash-generating unit
or group of cash-generating assets to which the asset belongs.

If there is an indication of impairment of a CGU to which goodwill has been unable to be

allocated, the Group tests the CGU for impairment first, excluding any goodwill and
recognises, where applicable, any impairment loss at CGU level. The Group then tests
the group of CGUs to which goodwill has been allocated for impairment and recognises,
where applicable, any impairment loss at CGU group level.

(Continued)
 25

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

In testing a CGU for impairment, the Group identifies all the corporate assets that relate to
the CGU. If a portion of the corporate assets can be allocated on a reasonable and
consistent basis to the CGU, the Group compares the carrying amount of the CGU,
including the corporate asset, with its recoverable amount and, where applicable,
recognises any impairment loss at CGU level. If the Group cannot allocate a portion of
the corporate assets on a reasonable and consistent basis to the CGU, it compares the
carrying amount of the unit, excluding the corporate asset, with its recoverable amount
and recognises, where applicable, any impairment loss at CGU level. The Group
identifies the smallest group of CGUs to which the carrying amount of the corporate asset
can be allocated on a reasonable and consistent basis and compares the carrying amount
of the group of CGUs, including the corporate assets, with the recoverable amount and
recognises, where applicable, the impairment loss at CGU group level.

Impairment losses for CGUs are allocated first to reduce the carrying amount of goodwill
allocated to the unit and then to the other non-current assets of the unit pro rata with their
carrying amounts. The carrying amount of each asset may not be reduced below the
highest of its fair value less costs to sell, its value in use and zero.

At the end of each reporting period the Group assesses whether there is any indication that
an impairment loss recognised in prior periods may no longer exist or may have
decreased. Impairment losses on goodwill are not reversible. Impairment losses on other
assets are only reversed if there has been a change in the estimates used to calculate the
recoverable amount of the asset.

A reversal of an impairment loss is recognised in the consolidated income statement. The

increased carrying amount of an asset attributable to a reversal of an impairment loss may
not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, had no impairment loss been recognised.

A reversal of an impairment loss for a CGU is allocated to the assets of each unit, except
goodwill, pro rata with the carrying amounts of those assets. The carrying amount of an
asset may not be increased above the lower of its recoverable amount and the carrying
amount that would have been disclosed, net of amortisation or depreciation, had no
impairment loss been recognised.

However, if the specific circumstances of the assets indicate an irreversible loss, this is
recognised directly in losses on the disposal of fixed assets in the consolidated income
statement.

(Continued)
 26

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(i) Financial instruments

(i) Recognition and classification of instruments

Financial instruments are classified on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the economic substance of the
contractual arrangement and the definitions of a financial asset, a financial liability
and an equity instrument laid down in IAS 32 “Financial Instruments:
Presentation”.
The Group recognises financial instruments when it becomes party to the contract or
legal transaction, in accordance with the terms set out therein.
The Group classifies a financial asset at amortised cost when it 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 (SPPI).
The Group classifies financial liabilities held for trading as at fair value through profit
or loss.
The Group designates a financial liability at initial recognition as measured at fair value
through profit or loss when doing so eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise from
measuring assets or liabilities or recognising the gains and losses on them on
different bases or when a group of financial liabilities or financial assets and
financial liabilities is managed and its performance is evaluated on a fair value
basis, in accordance with a documented risk management or investment strategy,
and information about the group is provided internally on that basis to the Group’s
key management personnel.

The Group classifies other financial liabilities as financial liabilities at amortised cost,
except for financial guarantee contracts, commitments to provide a loan at a below-
market interest rate or financial liabilities that arise when a transfer of a financial
asset does not qualify for derecognition or when the continuing involvement
approach applies.

(Continued)
 27

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(ii) Offsetting principles

A financial asset and a financial liability are offset only when the Group currently has
the legally enforceable right to offset the recognised amounts and intends either to
settle on a net basis or to realise the asset and settle the liability simultaneously. In
order for the Group to currently have a legally enforceable right, it must not be
contingent on a future event and must be legally enforceable in the normal course
of business, or in the event of default, or in the event of insolvency or bankruptcy.

(iii) Financial assets and financial liabilities at amortised cost

Financial assets and financial liabilities at amortised cost are initially recognised at fair
value, plus or minus transaction costs, and are subsequently measured at amortised
cost using the effective interest method.

(iv) Reclassifications of financial instruments

The Group reclassifies financial assets when it changes its business model for managing
them. The Group does not reclassify financial liabilities.

If the Group reclassifies a financial asset out of the amortised cost measurement
category and into the fair value through profit or loss measurement category, the
difference between the fair value and the carrying amount is recognised in profit
or loss. From the reclassification date, the Group does not recognise the interest
separately from the financial asset.

If the Group reclassifies a financial asset out of the amortised cost measurement
category and into the fair value through other comprehensive income measurement
category, the difference between the fair value and the carrying amount is
recognised in other comprehensive income. The effective interest rate and the
measurement of expected credit losses are not adjusted as a result of the
reclassification. However, the cumulative gain or loss on expected credit losses is
recognised in other comprehensive income and disclosed in the notes.

(v) Impairment

The Group recognises in profit or loss a loss allowance for expected credit losses on
financial assets measured at amortised cost, financial assets measured at fair value
through other comprehensive income, finance lease receivables, contract assets,
loan commitments and financial guarantees.

(Continued)
 28

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group assesses prospectively the expected credit losses associated with its debt
instruments measured at amortised cost. The Group uses the practical expedients
provided for in IFRS 9 to measure expected credit losses on trade receivables
through a simplified approach, thereby eliminating the need for an assessment
when there has been a significant increase in credit risk. Under the simplified
approach, expected losses must be recognised upon initial recognition of the
accounts receivable, such that the Group determines the expected credit losses as
a probability-weighted estimate of these losses over the expected life of the
financial instrument.

The practical expedient used consists of the use of a provision matrix, based on
segmentation into groups of homogeneous assets, applying historical information
on default rates for those groups and reasonable information on future economic
conditions.

The default rates are calculated based on actual experience of defaults in the prior year,
as this is a highly dynamic market, and adjusted for differences between current
and historical economic conditions and considering projected information that is
reasonable available.

The Group recognises expected credit losses over the life of the instrument for trade
receivables, contract assets and finance lease receivables.

Expected credit losses represent the difference between contractual and expected flows,
both with regard to amount and term.

The Group has determined the impairment of cash and cash equivalents for the 12-
month expected credit losses. The Group considers that cash and cash equivalents
have low credit risk based on the credit risk ratings of financial institutions where
the cash or deposits are deposited.

(vi) Derecognition, modification and cancellation of financial assets

The Group applies the criteria for derecognition of financial assets to part of a financial
asset or part of a group of similar financial assets or to a financial asset or group
of similar financial assets.

Financial assets are derecognised when the contractual rights to the cash flows from the
financial asset expire or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.

(Continued)
 29

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(vii) Derecognition of financial liabilities

The Group derecognises all or part of a financial liability when it either discharges the
liability by paying the creditor, or is legally released from primary responsibility
for the liability either by process of law or by the creditor.

(j) Distributions to shareholders

Dividends, whether in cash or in kind, are recognised as a reduction in equity when approved
by the General Meeting of Shareholders.

(k) Inventories

Inventories mainly comprise food products, packaging, promotional material and smaller
quantities of other materials, and are recognised at the acquisition or production cost and
net realisable value, whichever is lower.

The purchase price comprises the amount invoiced by the seller, after deduction of any
discounts, rebates or other similar items, plus any additional costs incurred to bring the
goods to a saleable condition and other costs directly attributable to the acquisition.

Trade discounts are recognised as a reduction in cost of inventories when it is probable that
the conditions for discounts to be received will be met. Unallocated discounts are
recognised in the consolidated income statement as a decrease in the purchase. Purchase
returns are recognised as a reduction in the carrying amount of inventories returned.

The production cost of inventories comprises the purchase price of raw materials and
consumables, costs directly related to the units of production and systematic allocation of
fixed and variable production overheads that are incurred in converting materials into
finished goods. The allocation of fixed indirect overheads is based on the higher of normal
production capacity or actual production.

The cost of raw materials and other supplies, the cost of goods for resale and costs of
conversion are allocated to each inventory unit on a weighted average cost basis.

The cost of inventories is written down against profit or loss when it exceeds net realisable
value. Net realisable value is considered as the following:
 

(Continued)
 30

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

 Raw materials and other supplies: replacement cost. Nevertheless, raw materials and
other supplies are not written down below cost if the finished goods into which they
will be incorporated are expected to be sold at or above cost of production.

 Merchandise and finished goods: estimated selling price less costs to sell.

(l) Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand deposits in credit institutions.
They also include other short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in
value. An investment normally qualifies as a cash equivalent when it has a maturity of
less than three months from the date of acquisition.

(m) Government grants

Government grants are recognised when there is reasonable assurance that the Group will
comply with the conditions attaching to them, and that the grants will be received. They
may comprise the following:

 Capital grants: capital grants awarded as monetary assets are recognised under
government grants and allocated to other income in line with the amortisation or
depreciation of the assets for which the grants have been received. Government grants in
the form of transfers of a non-monetary asset are recognised at fair value under
government grants and are allocated to other income in line with the amortisation or
depreciation of the assets for which the grants have been received.

 Operating grants: operating grants are recognised as a reduction in the expenses that they
are used to finance.

(n) Employee benefits

(i) Termination benefits

Termination benefits are recognised at the earlier of when the Group can no longer
withdraw the offer of those benefits and when the Group recognises costs for a
restructuring that involves the payment of termination benefits.

For termination benefits payable as a result of an employee’s decision to accept an offer,

the time when the Group can no longer withdraw the offer of termination benefits is
the earlier of when the employee accepts the offer and when a restriction on the
Group’s ability to withdraw the offer takes effect.

(Continued)
 31

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

In the case of involuntary termination benefits, the Group can no longer withdraw the
offer in the following cases: it has communicated to the affected employees or trade
union representatives the plan; the actions required to complete the plan indicate that
it is unlikely that significant changes to the plan will be made; the plan identifies the
number of employees whose employment is to be terminated, their job classifications
or functions and their locations and the expected completion date; the plan
establishes the termination benefits that employees will receive in sufficient detail
that employees can determine the type and amount of benefits they will receive when
their employment is terminated.

If the termination benefits are not expected to be settled wholly before 12 months after
the end of the annual reporting period, the liability is discounted by reference to
market yields on high quality corporate bonds.

(ii) Short-term employee benefits

Short-term employee benefits are benefits, other than termination benefits, which are
expected to be settled wholly before 12 months after the end of the annual reporting
period in which the employees provide the related service.

The Group recognises the expected cost of short-term employee benefits in the form of
accumulating compensated absences when the employees render services that
increase their entitlement to future compensated absences. In the case of non-
accumulating compensated absences, the expense is recognised when the absences
occur.

The Group recognises the expected cost of profit-sharing and bonus plans when it has a
present legal or constructive obligation to make such payments as a result of past
events and a reliable estimate of the obligation can be made.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as
a result of a past event; it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and a reliable estimate can be made of
the amount of the obligation.

The amount recognised as a provision is the best estimate of the expenditure required to settle
the present obligation at the end of the reporting period, taking into account all risks and
uncertainties surrounding the amount to be recognised as a provision and, where the time
value of money is material, the financial effect of discounting provided that the
expenditure to be made each period can be reliably estimated. The discount rate is a pre-
tax rate that reflects the time value of money and the specific risks for which associated
future cash flows have not been adjusted at each reporting date.

(Continued)
 32

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The financial effect of provisions is recognised as finance expenses in profit or loss. The tax
effect and gains on the expected disposal of assets are not taken into account in measuring
a provision.

If it is not probable that an outflow of resources will be required to settle an obligation, the
provision is reversed. The provision is reversed against the income statement caption in
which the related expense was recognised.

(p) Revenue recognition

The Group operates a chain of outlets engaged in the retail sale of food. The Group
recognises the sales of goods when it sells products to the customer. The transaction price
is collected in cash, and there is no policy for sales returns.

The Group also sells products to its franchisees, and sales are recognised when control of the
products is transferred, i.e. when the goods are delivered to the wholesaler, and there is
no unfulfilled obligation that could affect wholesaler acceptance of the product. Delivery
is made when the products are sent to the destination indicated by the franchisee, the risk
of loss and obsolescence have been transferred thereto and the franchisee has accepted
the products in accordance with the sale contract, the acceptance clauses have expired or
the Group has objective evidence that all the acceptance criteria have been met.

Once the product has been delivered to the customer, an account receivable is recognised to
the extent that an unconditional right to receive payment arises at that time.

Income from royalties and amounts invoiced for advertising, given that consideration takes
the form of royalties based on sales of rights-of-use, are recognised as and when the sales
take place. Amounts invoiced for advertising are not considered distinct goods or services
that are separable from the rights-of-use of the intellectual property licence.

Initial franchise fee/transfer fees and renewal fees that are invoiced to franchisees and master
franchisees are considered as an access licence and are recognised gradually over the term
stipulated in the franchise contract, considering the renewal periods that entail a
significant right for the customer.

(q) Income tax

The income tax expense or tax income for the year comprises current tax and deferred tax.

Current tax is the amount of income taxes payable or recoverable in respect of the
consolidated taxable profit or tax loss for the period. Current tax assets or liabilities are
measured at the amount expected to be paid to or recovered from the taxation authorities,
using the tax rates and tax laws that have been enacted or substantially enacted at the
reporting date.

(Continued)
 33

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Deferred tax liabilities are the amounts of corporate income tax payable in future periods in
respect of taxable temporary differences. Deferred tax assets are the amounts of corporate
income tax recoverable in future periods in respect of deductible temporary differences,
the carryforward of unused tax losses and the carryforward of unused tax credits.
Temporary differences are differences between the carrying amount of an asset or liability
and its tax base.

Current and deferred tax are recognised as income or an expense and included in profit or
loss for the year, except to the extent that the tax arises from a transaction or event which
is recognised, in the same or a different year, directly in equity, or from a business
combination.

Since 1 January 2020, Tasty Bidco, S.L. has been the Parent Company of a tax group in
Spain, as defined by the consolidated tax regime, which at 31 December 2021 comprised
Food Delivery Brands Group, S.A., Food Delivery Brands, S.A., Mixor, S.A., Telepizza
Gestión, S.A., and Luxtor, S.A.

(i) Recognition of deferred tax liabilities

The Group recognises deferred tax liabilities in all cases except where:

 they arise from the initial recognition of goodwill or an asset or liability in a

transaction that is not a business combination and, at the time of the transaction,
affects neither accounting profit nor taxable income.

 they are associated with investments in subsidiaries and joint ventures for which
the Group is able to control the timing of the reversal of the temporary difference
and it is not probable that the difference will reverse in the foreseeable future.

(ii) Recognition of deductible temporary differences

The Group recognises deferred tax assets provided that:

 it is probable that taxable profit will be available against which the deductible
temporary difference can be utilised or when tax legislation allows the future
conversion of deferred tax assets into a receivable from public entities. However,
assets arising from the initial recognition of assets or liabilities in a transaction that
is not a business combination and that at the time of the transaction affect neither
accounting profit nor taxable income, are not recognised;

 the temporary differences are associated with investments in subsidiaries and joint
ventures that will reverse in the foreseeable future and sufficient tax gains are
expected to be generated against which the temporary differences can be offset;

(Continued)
 34

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

tax planning opportunities are only considered when assessing the recoverability of
deferred tax assets if the Group intends to use these opportunities or it is probable
that they will be utilised.

(iii) Measurement of deferred tax assets and liabilities

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realised or the liability is settled, based on tax rates
and tax laws that have been enacted or substantively enacted. The tax consequences
that would follow from the manner in which the Group expects to recover or settle
the carrying amount of its assets or liabilities are also reflected in the measurement
of deferred tax assets and liabilities.

The Group reviews the carrying amount of deferred tax assets at the reporting date and
reduces this amount to the extent that it is not probable that sufficient taxable profit
will be available against which to recover them.

Deferred tax assets that do not comply with the above conditions are not recognised in
the consolidated statement of financial position. At year end the Group reassesses
whether conditions are met for recognising previously unrecognised deferred tax
assets.

(iv) Offset and classification

The Group only offsets current tax assets and liabilities if it has a legally enforceable
right to offset the recognised amounts and intends either to settle on a net basis or to
realise the assets and settle the liabilities simultaneously.

The Group only offsets deferred tax assets and liabilities if it has a legally enforceable
right to offset the recognised amounts, and they relate to income taxes levied by the
same taxation authority on the same taxable entity or on different taxable entities
which intend either to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or assets are expected to be
settled or recovered.

Deferred tax assets and liabilities are recognised in the consolidated statement of
financial position under non-current assets or liabilities, irrespective of the expected
date of recovery or settlement.

(Continued)
 35

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(r) Segment reporting

An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly
reviewed by the Group’s chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.

(s) Classification of assets and liabilities as current and non-current

The Group classifies assets and liabilities in the consolidated statement of financial position
as current and non-current. Current assets and liabilities are determined as follows:

 Assets are classified as current when they are expected to be realised or are intended for
sale or consumption in the Group’s normal operating cycle, they are held primarily
for the purpose of trading, they are expected to be realised within 12 months after the
reporting date or are cash or a cash equivalent, unless the assets may not be exchanged
or used to settle a liability for at least 12 months after the reporting date.

 Liabilities are classified as current when they are expected to be settled in the Group’s
normal operating cycle, they are held primarily for the purpose of trading, they are
due to be settled within 12 months after the reporting date or the Group does not have
an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date.

 Financial liabilities are classified as current when they are due to be settled within 12
months after the reporting date, even if the original term was for a period longer than
12 months, and an agreement to refinance or to reschedule payments on a long-term
basis is completed after the reporting date and before the consolidated annual accounts
are authorised for issue.

(t) Environment

The Group takes measures to prevent, reduce or repair the damage caused to the environment
by its activities.

Expenses derived from environmental activities are recognised as other operating expenses
in the period in which they are incurred.

Items of property, plant and equipment acquired by the Group for consistent use in its activity
and whose main purpose is to minimise the environmental impact of its activity and
protect and improve the environment, including the reduction and elimination of future
pollution from the Group’s activities, are recognised as assets, applying the measurement,
presentation and disclosure criteria described in note 4 (d).

(Continued)
 36

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(5) Segment reporting

As described below, the Group is organised internally into operating segments, which are
strategic business units. The strategic business units operate under different market conditions
and are managed separately because they require different strategies.

At 31 December 2021 and 2020, the Group comprises the following operating segments:

 Spain

 Rest of Europe

 Latin America

 Master franchise and rest of the world

Segment performance is measured based on the profit generated by each segment. The profit
generated by each segment is used as a measure of its performance because the Group
considers that this is the most relevant information in the assessment of the profits generated
by specific segments in relation to other groups which operate in these businesses.

Inter-segment transaction prices are established based on the normal commercial terms and
conditions with unrelated third parties.

(Continued)
 37

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

2021
Thousands of Euros
Rest Latin Rest
Spain of Europe America of world Total
Revenue
Own outlet sales 38,574 30,282 114,708 - 183,564
Supply sales to franchisees 98,350 15,171 6,232 - 119,753
Royalties 54,829 10,818 4,647 - 70,294
Revenue from franchising activity 2,268 - 542 - 2,810
Other services rendered to franchisees 4,270 1,528 2,250 - 8,048
Income from incentives 2,921 672 437 - 4,030
Revenue from initial fees 2,144 - 436 - 2,580

Total revenues 203,356 58,471 129,252 - 391,079

Amortisation and depreciation (27,511) (2,996) (16,806) - (47,313)

Impairment of non-current assets (1,787) (1,396) (3,103) - (6,286)

Other profit/(loss) 4,529 508 2,206 - 7,243

Operating profit/(loss) 17,847 9,564 (13,796) - 13,615

Net finance income/(cost) (23,861) (960) (11,112) - (35,933)

Income tax 575 (939) 366 - 2

Profit/(loss) from continuing operations (5,438) 7,664 (24,542) - (22,316)

Profit/(loss) from discontinued operations - (4,744) - - (4,744)

Non-controlling interests (1,329) 3,093 (3,858) - (2,094)

Profit/(loss) attributable to the Parent

Company (4,109) (173) (20,685) - (24,966)

Segment assets 745,847 85,574 172,412 - 1,003,833

Assets from discontinued operations
or held-for-sale assets - - - - -

Group assets 745,847 85,574 172,412 - 1,003,833

Segment liabilities 554,594 31,166 137,736 - 723,496

Liabilities from discontinued operations
or held-for-sale liabilities - - - - -

Group liabilities 554,594 31,166 137,736 - 723,496

Investments in property, plant and equipment

and intangible assets 16,205 1,333 23,679 - 41,217

(Continued)
 38

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

2020
Thousands of Euros
Rest Latin Rest
Spain of Europe America of world Total
Revenue
Own outlet sales 49,875 33,058 84,988 - 167,921
Supply sales to franchisees 88,177 14,055 5,729 - 107,961
Royalties 47,512 9,604 4,066 - 61,182
Revenue from franchising activity 4,039 - 4 - 4,043
Other services rendered to franchisees 739 663 2,331 - 3,733
Revenue from initial fees 2,376 112 29 - 2,517

Total revenues 192,718 57,492 97,147 - 347,357

Amortisation and depreciation (24,321) (3,317) (16,083) (4) (43,725)

Impairment of non-current assets (90,164) (14,593) (15,938) - (120,695)

Other profit/(loss) 7,236 (349) (4,661) - 2,226

Loss from operating activities (84,712) (5,981) (38,305) 22 (128,976)

Net finance income/(cost) (23,093) (2,254) (6,143) 1 (31,489)

Income tax (2,307) (672) 6,397 (1) 3,417

Profit/(loss) from continuing operations (110,110) (8,906) (38,053) 21 (157,048)

Profit/(loss) from discontinued operations 6 (3,340) - - (3,334)

Non-controlling interests (17,105) (469) (5,979) 4 (23,550)

Profit/(loss) attributable to the Parent

Company (93,004) (8,439) (32,074) 18 (133,498)

Segment assets 777,046 80,631 153,235 1,437 1,012,349

Assets from discontinued operations
or held-for-sale assets 6,374 7,575 - - 13,949

Group assets 783,420 88,206 153,235 1,437 1,026,298

Segment liabilities 534,221 57,100 139,205 889 731,415

Liabilities from discontinued operations
or held-for-sale liabilities - 5,787 - - 5,787

Group liabilities 534,221 62,887 139,205 889 737,202

Investments in property, plant and equipment

and intangible assets 17,265 1,415 23,131 - 41,811

(Continued)
 39

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(6) Non-current Assets Held for Sale and Discontinued Operations

In 2018, the global agreement between the Group and Pizza Hut (see note 1) set forth the
obligation for the Telepizza Group to make its best efforts to sell its assets in Poland and the
Czech Republic. In 2019 and in the first quarter of 2020 the Group held talks with various
groups interested in acquiring the Poland and Czech Republic businesses. However, these
talks were stalled as a result of the COVID-19 pandemic and the Group decided in April 2020
to wind down its Czech operations, with the liquidation being completed in 2021.

In addition, on 25 June 2021, the Group sold its Polish business to its local headquarters in Poland.
The Telepizza outlets in Poland will temporarily continue to operate under the “telepizza”
brand. As a result of this sale, the Group has incurred losses totalling Euros 4,362 thousand,
which have been recognised in the consolidated income statement under profit/(loss) from
discontinued operations.

In view of the foregoing, in 2020, the Group’s businesses in Poland and the Czech Republic were
classified as held for sale in the consolidated statement of financial position and as profit or
loss from discontinued operations in the consolidated income statement, as required by the
applicable standards. In addition, at 31 December 2020 the Group also presented as non-
current assets held for sale a group of outlets in Spain under the “telepizza” and “Pizza Hut”
trademarks.

At 31 December 2021 the Group has no assets classified as held-for-sale.

The breakdown of assets and liabilities held for sale relating to the aforementioned operations is
as follows:

Thousands of Euros
2021 2020
Assets held for sale:
Technical installations and machinery - 5,678
Right-of-use - 1,132
Goodwill - 2,167
Other intangible assets - 75
Net investment in subleases - 872
Other non-current assets - 303
Inventories - 82
Other current assets - 3,311
Cash - 329

Total assets - 13,949

Liabilities directly associated with non-current assets held for sale:

Non-current lease liabilities - 1,904
Trade and other payables - 3,883

Total liabilities - 5,787

(Continued)
 40

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The breakdown of profit or loss from discontinued operations presented in the consolidated
income statement relating to the discontinued operation is as follows:

Thousands of Euros
2021 2020

Revenue 3,765 11,942

Merchandise and raw materials used (1,438) (4,093)
Personnel expenses (1,000) (3,043)
Depreciation and amortisation expenses (298) (1,422)
Other expenses (1,368) (5,998)
Profit/(loss) from loss of control of subsidiaries (4,362) -
Other losses (16) (569)

Loss from operating activities (4,717) (3,183)

Finance income 9 71
Finance expenses (31) (317)

Pre-tax loss (4,739) (3,429)

Income tax expense (5) 95

Post-tax loss of discontinued operations (4,744) (3,334)

(7) Business Combinations

(i) Business combinations in 2021

The Group has acquired operational outlets from franchisees in Chile, Spain and Colombia.

The aggregate breakdown of the cost of the business combinations, the net assets acquired and
goodwill is as follows:

Thousands of
Euros

Cost of the combinations, cash paid 1,632

Less, fair value of net assets acquired (1,078)

Goodwill (note 10) 554

The goodwill generated on the business combinations is due to the outlets acquired having a good
market position. This goodwill was considered tax deductible in its entirety.

(Continued)
 41

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The amounts recognised in 2021 by significant class of asset and liability at the acquisition date
are as follows:
Thousands of Euros
Fair value
2021

Intangible assets (note 10) 2

Property, plant and equipment (note 8) 1,076
Total net assets acquired 1,078

Cash paid 1,632

Cash and cash equivalents of the acquiree -

Cash outflow for the acquisition 1,632

The fair value of the assets and liabilities acquired in business combinations does not differ from
their carrying amount; neither do the contractual gross amounts receivable differ from the
carrying amount.
The businesses acquired in 2021 have generated ordinary revenue and consolidated loss of Euros
581 thousand and Euros 62 thousand, respectively, for the Group for the period from the
acquisition date to the reporting date. Had the 2021 acquisition taken place at 1 January 2021,
the Group would have posted an increase in ordinary revenue and consolidated profit for the
year ended 31 December 2021 of Euros 2,766 thousand less Euros 389 thousand, respectively.

(i) Acquisition of Pizza Hut’s Mexico business in 2020

As detailed in note 1, on 1 January 2020, the Group acquired the control of Pizza Hut’s
business in Mexico through a subsidiary in Mexico 75%-owned by Food Delivery Brands,
S.A. and 25%-owned by the sellers, on which the Group and the sellers had call and put
options, respectively, unilaterally exercisable. On 15 December 2021, the Group exercised
this call option.

The breakdown of the consideration paid, the fair value of the net assets acquired and the
goodwill is as follows:
Thousands
of Euros
Consideration paid
Cash paid 10,712

Total consideration paid 10,712

Non-controlling interests -
Fair value of the net assets acquired (7,872)
Goodwill (excess of net assets acquired over the acquisition cost) (note 10) 2,840

(Continued)
 42

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Goodwill generated in business combinations is due to the outlets acquired and the franchise
network having a good market position. No tax-deductible goodwill was generated in the
business combination.

The acquisition cost of the business combinations carried out amounted to Euros 508 thousand
and was recorded under “Other expenses” in the consolidated income statement.

The amounts recognised in 2020 by significant class of asset and liability at the acquisition date
are as follows:

Thousands of
Euros
Fair value
2020

Intangible assets (note 10) 1,057

Property, plant and equipment (note 8) 4,661
Right-of-use assets (note 9) 10,398
Deferred tax assets 919
Other non-current assets 406
Inventories 886
Trade and other receivables 4,838
Other current assets 237
Cash and cash equivalents 3,255

Total assets 26,657

Lease liabilities (10,398)

Provisions (156)
Trade and other payables (8,231)

Total liabilities (18,785)

Total net assets acquired 7,872

Cash paid 10,712

Cash and cash equivalents of the acquiree (3,255)

Cash outflow for the acquisition 7,457

The fair value of the assets and liabilities acquired in business combinations does not differ from
their carrying amount; neither do the contractual gross amounts receivable differ from the
carrying amount.

The businesses acquired in 2020 generated consolidated losses and revenues of Euros 38,999
thousand and Euros 2,947 thousand, respectively, for the Group in the period from the
acquisition date to the reporting date.

(Continued)
 43

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(ii) Rest of business combinations in 2020

In addition to the foregoing, in relation to the acquisition of the business in Mexico in 2020 the
Group acquired 37 operating outlets from franchisees in Chile.

The aggregate breakdown of the cost of the business combinations, the net assets acquired and
goodwill is as follows:

Thousands of
Euros

Cost of the combinations, cash paid 7,977

Less, fair value of net assets acquired (1,017)

Goodwill (note 10) 6,960

The goodwill generated on the business combinations is due to the outlets acquired having a good
market position. This goodwill was considered tax deductible in its entirety.

The amounts recognised in 2020 by significant class of asset and liability at the acquisition date
are as follows:

Thousands of Euros
Fair value
2020

Property, plant and equipment (note 8) 1,017

Total net assets acquired 1,017

Cash paid 7,977

Cash and cash equivalents of the acquiree -

Cash outflow for the acquisition 7,977

The fair value of the assets and liabilities acquired in business combinations does not differ from
their carrying amount; neither do the contractual gross amounts receivable differ from the
carrying amount.

The businesses acquired in 2020 generated ordinary revenue and consolidated profit of Euros
2,185 thousand and Euros 6 thousand, respectively, for the Group for the period from the
acquisition date to the reporting date.

Had the 2020 acquisition taken place at 1 January 2020, the Group would have posted ordinary
revenue and consolidated profit for the year ended 31 December 2020 of Euros 4,701 thousand
and Euros 14 thousand, respectively.

(Continued)
 44

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(8) Property, Plant and Equipment

Details and changes under this heading are as follows:

Thousands of Euros
Technical Other install., Advances and
installations equipment tangible assets
Land and and and under Other
Details buildings machinery furn. construction PPE Total
Cost
Balance at 31/12/2019 5,038 101,577 13,395 988 14,667 135,665

Additions 1 10,955 1,220 3,520 1,247 16,943

Additions due to business combinations - 20,452 161 161 84 20,858
Derecognitions (297) (8,842) (600) (1,012) (778) (11,529)
Transfers from held for sale 1 (1,000) (206) - (227) (1,432)
Other transfers 1 3,261 76 (683) (2,618) 37
Translation differences (83) (4,801) (412) (81) (328) (5,705)

Balance at 31/12/2020 4,661 121,602 13,634 2,893 12,047 154,837

Additions 13 11,640 519 16,544 1,284 30,000

Additions due to business combinations (note 7) - 798 203 - 75 1,076
Derecognitions (1,146) (7,781) (788) (318) (735) (10,768)
Transfers from held for sale - 3,877 562 - 621 5,060
Other transfers - 6,386 108 (6,005) 491
Translation differences (159) (1,648) (31) 622 (177) (1,393)
Balance at 31/12/2021 3,369 134,874 14,207 13,736 13,117 179,303

Amortisation or impairment
Amortisation at 31/12/2019 (3,025) (53,604) (7,553) - (9,578) (73,760)
Impairment at 31/12/2019 - (2,237) - - - (2,237)
Amortisation for the year (106) (9,158) (1,011) - (1,468) (11,743)
Depreciation due to business combinations - (15,176) (1) - (2) (15,179)
Derecognitions 248 4,903 226 - 588 5,965
Transfers from held for sale - 431 132 - 202 765
Translation differences 57 2,768 193 - 310 3,328
Other transfers 1,212 (6,858) 2,173 - 3,396 (77)
Impairment loss (note 24) - (1,200) - - - (1,200)

Amortisation at 31/12/2020 (1,614) (76,694) (5,841) - (6,552) (90,701)

Impairment at 31/12/2020 - (3,437) - - - (3,437)

Amortisation for the year (163) (9,981) (826) - (1,128) (12,098)

Derecognitions 808 5,425 597 - 632 7,462
Transfers from held for sale - (1,177) (129) - (242) (1,548)
Translation differences (512) 1,098 156 - 50 792
Impairment loss (note 24) - (2,699) (496) - (26) (3,221)

Amortisation at 31/12/2021 (1,481) (81,329) (6,043) - (7,240) (96,093)

Impairment at 31/12/2021 - (6,136) (496) - (26) (6,658)

Carrying amount
At 31/12/2020 3,047 41,471 7,793 2,893 5,495 60,699
At 31/12/2021 1,888 47,409 7,668 13,736 5,851 76,552

(Continued)
 45

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

In 2021 and 2020, additions were made to technical installations and machinery, mainly reflecting
the investments related to new outlets opened, the purchase of franchised outlets,
improvements to existing outlets, to plants, and also reflecting the conversion of outlets to the
“Pizza Hut” brand.

“Other installations, equipment and furniture” mainly reflect the acquisition of motorcycles,
furnishings and IT equipment for outlets.

Disposals in 2021 and 2020 primarily include property, plant and equipment used in outlets which
have been franchised, closed or sold, and items relating to the termination of rental contracts
for certain outlets.

At 31 December 2021 and 2020 the Group had no commitments to acquire items of property,
plant and equipment. PPE totalling Euros 1,040 thousand have been pledged as security. The
Group does not have any unused property, plant and equipment for significant amounts.

In 2021 and 2020, the Group recognised impairment losses of Euros 3,221 thousand and Euros
1,200 thousand, respectively (see note 24). Said impairment loss is basically due to the
impairment of assets used in the Group’s outlets. Impairment losses have been determined
based on value in use. The impaired assets are primarily outlet fixtures and right-of-use.

The Group has taken out sufficient insurance policies to cover the risk of damage to its property,
plant and equipment.

The breakdown of the cost of fully depreciated property, plant and equipment at 31 December
2021 and 2020 is as follows:

Thousands of Euros
2021 2020

Technical installations and machinery 32,808 26,070

Other 7,428 7,654

40,236 33,724

(Continued)
 46

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(9) Leases

(a) Right-of-use assets and lease liabilities

The details and changes by class of right-of-use assets in 2021 and 2020 were as follows:

Thousands of
Euros

Carrying amount at 31 December 2019 77,623

Additions 2,353
Transfers (franchise repurchases) (note 9 (b)) 8,208
Rental updates (3,565)
Derecognitions (19,855)
Additions due to business combinations 10,398
Amortisation and depreciation (17,116)
Derecognitions from cumulative depreciation 4,177
Translation differences (1,579)
Cost, attributed cost or revalued cost 87,088
Cumulative depreciation and impairment losses (26,497)
Carrying amount at 31 December 2020 60,591

Additions 9,129
Transfers (franchise repurchases) (note 9 (b)) 146
Rental updates 10,095
Derecognitions (11,365)
Amortisation and depreciation (15,454)
Derecognitions from cumulative depreciation 5,867
Other changes 570
Translation differences (1,024)
Cost, attributed cost or revalued cost 90,224
Cumulative depreciation and impairment losses (31,669)
Carrying amount at 31 December 2021 58,555

Most of the right-of-use assets correspond to leased premises where the Group conducts its
activities as well as the plants and headquarters. Derecognitions in 2021 and 2020
correspond mainly to outlet closures or the sale of outlets to franchisees.

(Continued)
 47

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(i) Nature and exposure to lease contract risk

The Group leases most of the buildings in which it conducts its activity. These include
its own outlets and the plants and offices. Most lease contracts for outlets stipulate
payment of a fixed rent that is revised annually in line with the consumer price
index. The exception are outlets located in shopping centres, for which both a fixed
rent and a sales-based variable rent are paid.

Property lease contracts also have various renewal and cancellation options. Renewal
options are granted to be able to take best advantage of the area in those cases in
which the business responds appropriately.

The initial lease period of each contract is usually 10 years but generally, with few
exceptions, the Group has the option of ending the lease contract early without
having to pay any kind of penalty, giving due notice as provided for in the contract.
Leases on premises located in shopping centres are subject to a mandatory period
of five years during which the Group cannot cancel the contract.

In any case, from a legal standpoint, the lease contracts can generally be cancelled
with prior notice of three months, on average.

In addition, sometimes, when the Group goes from operating an outlet as an owner to
its operation as a franchise, it maintains the original lease contract, which it
subsequently subleases to the franchisee.

The Group has no obligations in respect of lease contracts that the franchisees enter
into directly with the lessor or in respect of properties owned by franchisees.

(ii) Details and material amounts in lease contracts

The details and material amounts in lease contracts by asset class at 31 December
2021 in 2020 are as follows:

Thousands of Euros
2021 2020

Fixed lease payments 27,484 28,990

Finance expenses from lease liabilities 5,137 5,504
Income from subleases 5,362 8,408
Lease liabilities 88,669 118,743

As previously mentioned, the initial lease term of each contract is usually of 10 years,
with few exceptions, and contracts may be cancelled with notice, which is usually
of three months. In these cases the Group has assessed two aspects:

(Continued)
 48

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

- The possibility that the option to cancel is exercised at some time during the
contract lifetime, and
- Establishing a period in which it is considered reasonably certain that said
cancellation may be executed.
The following factors were identified that affect the assessment of whether it is
reasonably certain that the early cancellation option will not be exercised:
- Possible future relocation for demographic reasons: delivery zone coverage, socio-
demographic changes and others.
- Possible future relocation due to business reasons: high sensitivity to the weighting
of the lease price on the restaurant’s profit and loss (<7% sales).
- High volatility and uncertainty in the real estate market in the long term.
- Forecast relocations underway and historical information as a reference.
The Group considers that these factors may imply that, during the contract lifetime, it
may be cancelled early. This possibility increases the longer the time frame
considered (higher probability of cancellation in the last few years of the contract
than at the start), considering that in terms of 10 years it is determined that there is
a higher probability of cancellation of the contract.
In conclusion, the Group has determined that, for lease contracts pertaining to
commercial premises used as restaurants, if the initial duration is equal to or longer
than 10 years and there is an early cancellation option without penalty, the contract
duration is of 10 years.

(iii) Details of lease payments and liabilities

The analysis of the contractual maturity of lease liabilities, including future interest
payable, is as follows:
Thousands of Euros
2021 2020

Six months 13,262 15,289

Six months to one year 13,271 13,641
One to two years 21,909 24,494
Two to three years 18,040 21,623
Three to four years 14,285 18,551
Four to five years 10,822 13,332
More than five years 24,517 24,685

116,106 131,615

(Continued)
 49

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(b) Finance leases – Lessor (Net investment in subleases)

(i) Nature and exposure to finance lease contract risk

The Group has entered into sublease contracts with some of its franchisees in respect
of the premises where the latter operate the brand. These sublease contracts are
arranged for the same period of time as the franchise contract entered into with the
franchisee (10 years). This is a mandatory period and the contracts cannot be
cancelled early. The rent is generally a fixed amount, reviewed annually in line
with the consumer price index.

(ii) Changes of net investment of finance lease contracts

Changes in net investment in finance lease contracts in 2021 and 2020 are as follows:

Thousands of Euros
2021 2020

Balance at 1 January 41,239 66,538

Additions 4,657 2,103
Derecognitions (19,362) (7,831)
Transfers for franchise repurchases (note 9 (b)) (146) (8,208)
Finance income 835 1,429
Rental updates (3,615) (2,853)
Receipts (5,362) (8,408)
Translation differences (1,585) (1,531)

Balance at 31 December 16,661 41,239

Transfers in 2021 and 2020 correspond to lease contracts for franchisee outlets that
have been acquired.

Derecognitions in 2021 and 2020 correspond mainly to the transfer of the head lease
pursuant to lease contracts to the sublessees of the premises.

(Continued)
 50

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(iii) Reconciliation of the gross amount receivable and the net investment in finance
lease contracts

The reconciliation between the total gross amount of finance leases and the current
value of the minimum amounts receivable is as follows:

Thousands of Euros
2021
Non-current Current

Gross amount receivable 14,861 3,993

Unaccrued finance income (1,529) -

Current value of finance leases receivable 12,668 3,993

Thousands of Euros
2020
Non-current Current

Gross amount receivable 38,498 8,168

Unaccrued finance income (5,427) -

Current value of finance leases receivable 33,071 8,168

(iv) Breakdown of the gross amount receivable by maturity of finance lease contracts

The gross amounts receivable for finance lease contracts, broken down by maturities,
is as follows:

Thousands of Euros
2021 2020

Up to one year 2,054 8,168

One to two years 1,939 7,765
Two to three years 3,649 7,399
Three to four years 3,406 6,826
Four to five years 2,489 5,589
More than five years 5,317 10,919

Less current part (3,993) (8,168)

Total non-current 14,861 38,498

(Continued)
 51

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(10) Intangible Assets and Goodwill

Details of “Goodwill” and movement during the year are as follows:

Thousands of
Euros

Balance at 31/12/2019 349,683

Goodwill on business combinations for the year (note 7) 9,800

Translation differences 388
Derecognitions (122)
Impairment losses for the year (note 24) (119,495)

Balance at 31/12/2020 240,254

Goodwill on business combinations for the year (note 7) 554

Translation differences (29)
Other 147
Impairment losses for the year (note 24) (2,086)

Balance at 31/12/2021 238,840

In order to conduct impairment tests, goodwill and intangible assets with indefinite useful lives
were assigned to the Group’s cash-generating units (CGU) in accordance with the country of
the operation and the business segment to which it belongs.

Below is a summary of goodwill assignment by CGU (or groups of CGUs):

Thousands of Euros
2021 2020

Spain 174,332 174,239

Portugal 32,870 32,723
Chile 23,063 24,919
Mexico (note 7(i)) 2,840 2,840
Colombia 202 -
Ireland 5,533 5,533

238,840 240,254

(Continued)
 52

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

As a consequence of the impact of the COVID-19 pandemic on the global economy (see Note
1), the Group devised a new 5-year business plan which factors the foreseen effects of the
pandemic into the cash flow forecasts for the next few years and, as a result, in 2020 a loss
was recorded for impairment of goodwill in an amount of Euros 119,495 thousand. In
addition, in 2021 the Group updated its cash flow projections to the current economic
situation in each of the markets in which it operates and, as a result, an impairment loss of
goodwill of Euros 2,086 thousand was recognised which correspond to stores acquired in
2020 and 2019 from the CGU Chile (see Notes 1(a) and 24).

The recoverable amount of goodwill is determined on the basis of fair value calculations, less
costs to sell or otherwise dispose of the item. These calculations are based on cash flow
projections from the financial budgets approved by the Directors of the Parent Company for
a period of five years for each of the CGU groups. Cash flows beyond the five-year period
are extrapolated using the specific growth rates of the business in the country and sector in
which it operates. Furthermore, the calculation of the terminal value does not exceed the
long-term average growth base in each country for the home delivery business in which the
Group operates.
The pre-tax discount rate assumptions and growth rates used in the impairment tests in the years
2021 and 2020 are as follows:

2021
Spain Portugal Chile Mexico Ireland

Discount rate (WACC) 8.60% 8.80% 9.20% 9.80% 8.70%

Growth rate of income in perpetuity (g) 2.00% 1.90% 1.90% 1.90% 2.00%

2020
Spain Portugal Chile Ireland

Discount rate (WACC) 8.40% 8.70% 8.85% 7.51%

Growth rate of income in perpetuity (g) 1.50% 2.00% 2.00% 1.85%

These assumptions were used for the analysis of each CGU in the business segment.
To calculate the fair value of the different groups of CGUs over the 5-year budget periods, the
Directors’ business operating assumptions were for net annual revenue growth rates of
between 2.5% and 10%, in accordance with the features of each market and estimated
inflation. These annual sales growth rates have an almost proportionate impact on the other
operating assumptions of the business, such as gross margin and EBITDA. Growth rates of
income in perpetuity have been determined based on the Economist Intelligence Unit (EIU)
estimates of the GDP deflator and the CPI of the different countries.

(Continued)
 53

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The income and expense growth rates have been determined based on past performance and
expectations for future market development. The discount rates used reflect specific risks
related to the relevant segments.
In the sensitivity analysis of goodwill impairment per CGU group, only considering reasonably
possible variations of the goodwill of the CGU Chile relating to the aforementioned stores,
this would have resulted in an additional impairment of goodwill of Euros 1,172 thousand
euros. Rest of CGU group considering reasonably possible variations of between 50 and 25
basis points in the discount rate, between 50 and 25 basis points in the growth rate of income
in perpetuity, would not have impact on the consolidated annual accounts at 31 December
2021
In the sensitivity analysis of goodwill impairment per CGU group, considering reasonably
possible variations of between 50 and 25 basis points in the discount rate, between 50 and 25
basis points in the growth rate of income in perpetuity, would have led to a negative impact
on the consolidated annual accounts at 31 December 2020 as follows:
In the sensitivity analysis of goodwill impairment per CGU group, considering reasonably
possible variations of between 50 and 25 basis points in the discount rate, between 50 and 25
basis points in the growth rate of income in perpetuity, would have led to a negative impact
on the consolidated annual accounts at 31 December 2020 as follows:

Thousands of Euros
2020
Growth rate of income in perpetuity (g)
Discount rate (WACC) 0.00 0.25 0.50

0.00 - 23,222 44,812

0.25 27,303 48,767 68,770
0.50 52,721 72,606 91,179

Similarly, considering reasonably possible negative variations of a range of between 25 and 50

points in the business operating assumptions in 2020, this would have resulted in an additional
impairment of goodwill of Euros 29,963 thousand and Euros 59,926 thousand, respectively.

(Continued)
 54

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Details of “Other intangible assets” and changes are as follows:

Thousands of Euros

Concession, Contractual Other

patents, Trademar and other intangible Software
licences ks rights assets applications Total
Cost

Balance at 31/12/2019 16,113 265,206 167,499 6 43,554 492,378

Additions 1,735 58 - - 6,539 8,332

Derecognitions (164) - (33) (6) (115) (318)
Transfers from/to held for sale (note 6) (46) - - - (12) (58)
Additions due to initial business combinations (note 7) 1,102 - - - 37 1,139
Translation differences (503) - (2) - 485 (20)

Balance at 31/12/2020 18,237 265,264 167,464 - 50,488 501,453

Additions 1,802 - - - 7,783 9,585

Additions due to business combinations (note 7) - - - - 2 2
Derecognitions (1,767) (7,205) (43) - (9,664) (18,679)
Other transfers (405) - - - - (405)
Translation differences 202 - - - (239) (37)

Balance at 31/12/2021 18,069 258,059 167,421 - 48,370 491,919

Amortisation or impairment

Amortisation at 31/12/2019 (1,412) (148) (4,392) - (26,422) (32,374)

Impairment at 31/12/2019 8 - - - (871) (863)

Amortisation for the year (1,417) (425) (6,699) - (6,508) (15,049)

Additions due to business combinations (note 7) (82) - - - - (82)
Translation differences 137 - (2) - 167 302

Amortisation at 31/12/2020 (2,774) (573) (11,056) - (32,763) (47,166)

Impairment at 31/12/2020 8 - - - (871) (863)

Amortisation for the year (921) (5,602) (6,699) - (6,540) (19,762)

Derecognitions 1,495 - 43 - 8,039 9,577
Translation differences (123) - - - 314 191
Derecognitions (impairment) - - - - 871 871
Impairment (note 24) (42) - (931) - (6) (979)

Amortisation at 31/12/2021 (2,323) (6,175) (17,712) - (30,950) (57,160)

Impairment at 31/12/2021 (34) - (931) - (6) (971)

Carrying amount
At 31 December 2020 15,471 264,691 156,408 - 16,854 453,424
At 31 December 2021 15,712 251,884 148,778 - 17,414 433,788

Concessions, patents and licences mainly reflect the Euros 11,850 thousand entry fee under the
agreement with Pizza Hut signed in 2018.

During 2021, the Group recognised impairment losses of Euros 979 thousand (see Note 24), of
which Euros 931 thousand related to the contractual rights of its franchisees in Switzerland.

(Continued)
 55

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

In the process of allocating the purchase price of shares in Food Delivery Brands Group, S.A.
(see note 7 (i)), which owns the “telepizza”, “Jeno’s pizza” and “Apache” brands, theses were
measured at their fair value for the amounts of Euros 236,030 thousand, Euros 998 thousand
and Euros 28,178 thousand, respectively. Moreover, in the aforementioned business
combination, the rights arising from the franchise contracts were also recognised at their fair
value, which originally totalled Euros 167,485 thousand.

The “telepizza” brand and the “Apache” brand were both deemed intangible assets with indefinite
lifetimes, as is the “Jeno’s Pizza” brand (see note 1) inasmuch as one of the obligations
included in the agreements reached with Pizza Hut was that all of the Group’s outlets in
Colombia be converted to the “Pizza Hut” brand within a maximum period of three years.

However, as a result of the early exercise of the purchase option by Yum¡

Brands on the bare ownership of the brand (see Notes 1 and 4(f)), the usufruct of the brand has
become finite and therefore has started to be amortised over its remaining useful life, which
coincides with the usufruct period. In addition, as a result of the aforementioned early exercise
of the purchase option on the bare ownership of the brand, a gain on the sale of Euros 6,269
thousand was generated (see Note 25).

In 2021 it was not considered necessary to perform an impairment test on the "telepizza" brand
as it has a defined useful life and there are no indications of impairment that could indicate
the potential impairment of this asset.

The recoverable amount of “telepizza” (in 2020) and “Apache” brand intangible assets with an
indefinite useful life is determined by calculating the fair value less costs to sell. These
calculations are based on cash flow projections from the budget and business plan approved
by the Directors of the Parent Company and prepared by the management of the Parent
Company. Beyond the projection period, cash flows are extrapolated using specific industry
growth rates in each country that do not exceed the average long-term growth rate for the
business. As a result of the agreement with Pizza Hut, in 2020 most of the value of the
“telepizza” brand resided in the businesses in Spain and Portugal.

Based on the estimates and projections available to the Parent Company’s Directors, the forecast
net cash flows fully justify the carrying amount of the intangible assets with an indefinite
useful life that have been recognised. The main discount rate assumptions used when
calculating fair value in 2021 and 2020 for intangible assets with an indefinite useful life, and
the perpetuity growth rates, are as follows:
2021 2020
Apache Telepizza Apache

Discount rate (WACC) 8.70% 8.46% 7.51%

Growth rate of income in perpetuity (g) 2.00% 1.50% 1.85%

(Continued)
 56

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

To calculate fair value over budget periods, the Directors’ operating assumptions for the business
consider 12.2% average growth of net revenues. These annual sales growth rates have an
almost proportionate impact on the other operating assumptions of the business, such as gross
margin and EBITDA. Growth rates of income in perpetuity have been determined based on
the Economist Intelligence Unit (EIU) estimates of the GDP deflator and the CPI of the
different countries.

According to a sensitivity analysis of impairment of intangible assets with an indefinite useful

life, considering reasonably possible variations of between 50 and 25 basis points in the
discount rate, between 50 and 25 basis points in the growth rate of income in perpetuity or in
the business operating assumptions, would have no impact on the consolidated annual
accounts at 31 December 2021 and 2020.

As regards contractual rights with franchisees subject to amortisation, there are no indications of
the potential impairment of these intangible assets, except in the case of the Swiss franchises.

The breakdown of remaining useful life, amortisation for the year, accumulated amortisation and
the carrying amount of individually significant intangible assets at 31 December is as follows:

Thousands of Euros

Description of the asset Remaining Amortisation Impair Accum. Carrying

useful life for the year ment amortisation amount
2021
“telepizza” brand 27 5,177 - 5,177 223,706
“Jeno’s Pizza” brand - 425 - 998 -
“Apache” brand Indefinite - - - 28,178
Contractual rights 23 6,699 931 17,712 148,778
12,301 931 23,887 400,662

Thousands of Euros
Remaining Amortisation for Accumulated
Description of the asset useful life the year amortisation Carrying amount
2020
“telepizza” brand Indefinite - - 236,088
“Jeno’s Pizza” brand 1 425 573 425
“Apache” brand Indefinite - - 28,178
Contractual rights 24 6,699 11,056 156,408
7,124 11,629 421,099

At 31 December 2021 and 2020 the Group has no commitments to purchase intangible assets.

(Continued)
 57

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The breakdown of the cost of fully amortised intangible assets at 31 December 2021 and 2020 is
as follows:

Thousands of Euros
2021 2020

Computer software 19,155 22,102

Trademarks 998 -
Other 147 5

20,300 22,107

(11) Non-current Financial Assets

The breakdown of other non-current financial assets at 31 December 2021 and 2020 is as follows:

Thousands of Euros
2021 2020

Security and other deposits 4,136 5,354

Non-current trade receivables 10,267 10,205
Other loans and receivables 1,975 96

16,378 15,655

These non-current financial assets are measured at amortised cost and their carrying amount does
not differ significantly from their fair value.

Non-current trade receivables mainly reflect revenue receivable from franchising activities. The
payment method for these sales transactions depends on what is contractually agreed with
each franchisee. Deferred collection is usually agreed, with due dates falling between one and
ten years, secured by the franchisees’ operating businesses.

The average maturity of non-current trade receivables at 31 December 2021 and 2020 is 2.28
years and 2.27 years, respectively.

Since 2016, various Group companies granted loans to the Directors and personnel amounting,
at 31 December 2021 and 2020, to Euros 478 and 3,794 thousand, respectively, which are due
in 2021 and accrue interest at a market rate. They are classified as current financial assets at
31 December 2021 and 2020. The Group recognised a valuation allowance due to the
impairment of these loans amounting to Euros 347 thousand and Euros 520 thousand in 2021
and 2020, respectively. In addition, since 2021, various Group companies have granted new
loans to the Directors and personnel amounting, at 31 December 2021, to Euros 1,892
thousand, which are due in 2025 and accrue interest at a market rate.

(Continued)
 58

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(12) Inventories

The breakdown at 31 December 2021 and 2020 is as follows:

Thousands of Euros
2021 2020
Merchandise 15,358 15,639
Raw materials 691 894
Finished goods 192 82
Impairment (980) (1,754)

Total inventories 15,261 14,861

The cost of inventories recognised as an expense and included in the cost of goods sold is as
follows:
Thousands of Euros
2021 2020

Net purchases 116,003 106,631

Change in inventories (486) (2,411)

115,517 104,220

The Group has long-term commitments to purchase certain inventories, which if breached would
give rise to penalties of approximately Euros 2 million. This circumstance is not expected to
arise (Euros 2 million in 2020).

At 31 December 2021 and 2020 the Group has no inventories pledged as collateral to secure
repayment of debts and commitments with third parties. The Group has taken out sufficient
insurance policies to cover the risk of damage to its inventories.

(13) Trade and Other Receivables

Details are as follows:

Thousands of Euros
2021 2020
Trade receivables 53,354 41,698
Other receivables 3,614 3,451
Public entities 8,555 8,690
Impairment losses (10,499) (10,804)

Trade and other receivables 55,024 43,035

(Continued)
 59

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Trade and other receivables comprise financial assets at amortised cost and their carrying amount
does not differ significantly from their fair value.

Trade receivables mainly comprise uncollected amounts in respect of the normal billings to
franchisees.

An analysis of impairment losses due to the credit risk associated with financial assets is as
follows:

Thousands of Euros
Assets at amortised cost
2021 2020
Current Non-current Current
Current
Balance at 1 January (10,804) (3,825) (16,672)
Charge (410) - (292)
Application 490 - 9,325
Transfers - 3,825 (3,825)
Reversal 51 - 94
Translation differences 174 - 566

Balance at 31 December (10,499) - (10,804)

(note 11)

(14) Cash and Cash Equivalents

The breakdown at 31 December 2021 and 2020 is as follows:

Thousands of Euros
2021 2020

Cash in hand and at banks 58,162 45,134

Cash and cash equivalents 58,162 45,134

Cash and cash equivalents recognised in the consolidated statement of financial position are the
same as those reported in the statement of cash flows as the Group does not have any
overdrafts.

(Continued)
 60

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(15) Deferred Tax

The breakdown of deferred tax assets is as follows:

Thousands of Euros
Non-deductible
amortisation
and Tax credit
Deferred tax assets depreciation and deductions Leases Other Total

Balance at 31/12/2019 2,037 8,048 3,000 8,155 21,240

Additions due to business combinations - - - 919 919

Transfers - 2,976 - (2,976) -
Taken to the income statement (note 26) 778 4,533 (241) 2,484 7,554

Balance at 31/12/2020 2,815 15,557 2,759 8,582 29,713

Taken to the income statement (note 26) (899) 4,320 (288) (825) 2,308

Balance at 31/12/2021 1,916 19,877 2,471 7,757 32,021

The deferred tax assets recognised in the consolidated statement of financial position at 31
December 2021 and 2020 mainly correspond to tax loss carryforwards generated by the Group
companies Food Delivery Brands Group, S.A., Food Delivery Brands, S.A., Mixor, S.A. and
Telepizza Chile, S.A. (see note 26).

Other deferred tax assets in 2021 and 2020 include the tax effect of the impairment of trade
receivables and other temporary differences in Chile amounting to Euros 6,654 thousand
(4,137 thousand in 2020).

The Group has recognised deferred tax assets in respect of tax credits for loss carryforwards and
deductions available for offset because the Directors consider these credits to be recoverable.
This assumption is based on the business plans approved by the Directors. Due to the
restrictions established in tax regulations on the deductibility of finance expenses, the tax
group in Spain has been generating positive taxable income and will continue to do so in the
next few years, other than 2020 and 2021 due to non-recurring expenses.

Based on estimated profit and loss for the coming years, the budgets approved by the Board of
Directors, and considering the estimated tax adjustments to be applied to accounting profit or
loss, the deferred tax assets recognised are expected to be recovered in 2026.

In the case of Spanish companies and under Royal Decree-Law 3/2018, the limits for the offset
of tax loss carryforwards have been amended to 25% of the taxable income. Nevertheless
and in any event, tax loss carryforwards up to a maximum of Euros 1 million may be offset
in each tax period.

(Continued)
 61

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The breakdown of deferred tax liabilities by item is as follows:

Thousands of Euros
Deferred Freedom of
tax liabilities depreciation/am Intangible
ortisation assets Other Total

Balance at 31/12/2019 12 102,742 1,122 103,876

Credit/(charge) to the income

statement (note 26) (8) (1,781) 79 (1,710)

Balance at 31/12/2020 4 100,961 1,201 102,166

Credit/(charge) to the income

statement (note 26) - (4,953) (75) (5,028)

Balance at 31/12/2021 4 96,008 1,126 97,138

The deferred tax liability related to intangible assets is due to the tax effect of various intangible
assets, primarily trademarks, and the contractual rights that arose as a result of the business
combinations in prior years, as explained in note 10. In the case of intangible assets with a
definite useful life, this deferred tax is reduced every year as the intangible assets are
amortised and will not generate any cash outflow from the Group.

(16) Equity
(a) Capital
On 4 October 2018, the Company was incorporated by means of the issuance of 3,600
ordinary shares, each with a par value of Euro 1, which were fully subscribed and paid in
and which grant their holders the same economic and voting rights.
On 29 January 2021, the share capital was increased by Euros 169,735 by means of the
issuance of 169,735 new shares, each with a par value of Euro 1, with a share premium
of Euros 16,803,843, i.e. Euros 99 per new share created (see note 1). This capital
increase was subscribed and fully paid in by Tasty Debtco S.à.r.l. and its purpose was to
grant the aforementioned subordinated loan.
On 28 December 2021, the share capital was increased by Euros 32,201 by means of the
issuance of 32,201 new shares, each with a par value of Euro 1, with a share premium of
Euros 3,107,408, i.e. Euros 96.50 per new share created (see note 1). This capital increase
was fully subscribed and paid in by certain employees of the Group.

At 31 December 2021 and 2020, Tasty Bidco, S.L.’s share capital is represented by
2,863,538 shares, each with a par value of Euro 1, with the only company that has a
percentage equal to or greater than 10% at 31 December 2021 being Tasty Debtco S.à.r.l.
with 99.99%

(Continued)
 62

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(b) Share premium

At 31 December 2021 and 2020, this reserve is freely distributable, provided that, as a result
of its distribution, the shareholders' equity does not fall below the share capital.
(c) Retained earnings
 Legal reserve
The Parent Company is obliged to transfer 10% of each year’s profits to a legal reserve
until this reserve reaches an amount equal to 20% of share capital. This reserve is
not distributable to shareholders and may only be used to offset losses if no other
reserves are available. Under certain conditions it may be used to increase share
capital provided that the balance left on the reserve is at least equal to 10% of total
share capital after the increase. At 31 December 2020, the Parent Company does
not have a legal reserve since it has incurred in losses since its incorporation in 2018.
 Shareholder contributions
At 31 December 2021 and 2020, this reserve is freely distributable.
(d) Translation differences
Translation differences are mainly those generated by subsidiaries with currencies other than
the euro since the Food Delivery Brands Group subgroup joined the Group in May 2019.
(17) Other Current and Non-current Financial Liabilities

The breakdown of other current and non-current financial liabilities is as follows:

Thousands of Euros
2021 2020
Non- Non-
current Current current Current

Deposits and guarantees 601 - 1,261 -

Other payables 2,226 166 5,529 1,883

2,827 166 6,790 1,883

Other payables at 31 December 2021 correspond to the Euros 2,226 thousand (3,116 thousand
in 2020) payable to the former shareholder of the company acquired in Ireland in 2017 – The
Good Food Company, Ltd., due in December 2025. At 31 December 2020, there was also
an outstanding debt for the companies acquired in Mexico amounting to Euros 1,717
thousand (see Note 7 (i)).

(Continued)
 63

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(18) Debentures, Bonds, Loans and Other Remunerated Liabilities with credit institutions

(a) Debentures and bonds

As a result of the takeover of the Food Delivery Brands Group, S.A. (see note 1), on 12 June
2019 it completed the refinancing of the Group’s financial debt by means of the following
transactions:

 The acquisition of all shares representing the share capital of Tasty Bondco 1, S.A.
from Tasty DebtCo S.à.r.l., an affiliate of Tasty Bidco, S.L., which completed a Euro
335,000 thousand bond issue at a fixed interest rate of 6.25%, maturing in 2026.
This bond is listed in the Luxembourg stock exchange’s Euro MTF market.

 Early repayment of the Euros 200,000 thousand syndicated loan arranged by the
Group with certain banks on 8 April 2016 and, simultaneously, the loan guarantees
were released.

Moreover, linked to the financing obtained through issuance of the bond, the Group has a
revolving credit facility syndicated for a maximum drawdown amount of Euros 45,000
thousand, at an interest rate of 3.25% and maturing in 2026. At 31 December 2021 and
2020 this credit line is fully drawn down by the investee Food Delivery Brands, S.A., (see
Note 18 (b)).

The costs incurred by the issuance of the aforementioned bond amounted to Euros 18,207
thousand, which are included in the measurement at amortised cost of said debt.

The breakdown of debentures and bonds at 31 December 2021 and 2020 is follows:
Thousands of Euros
Category Final Balance Balance Interest
maturity Limit 13/12/21 31/12/20 rate
Senior
Bond 2026 335,000 335,000 335,000 6.25%
Arrangement costs (12,212) (14,533)

Balance at 31 December 322,788 320,467

Interest accrued in 2021 and 2020 totalled Euros 20,938 thousand. At 31 December 2021
and 2020, outstanding unpaid interest on these payables amounted to Euros 9,611
thousand. Likewise, Euros 2,321 thousand and Euros 2,122 thousand were recognised in
2021 and 2020, respectively, under interest finance expenses relating to the measurement
of the bond issuance costs at amortised cost.

(Continued)
 64

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The Group has pledged the shares of Food Delivery Brands, S.A., Telepizza Chile, S.A.,
Luxtor, S.A. and Telepizza Portugal Comercio de Productos Alimentares, S.A. to secure
the above-mentioned bond. The aforementioned shares directly or indirectly make up
practically all of the assets and liabilities pledged as collateral.

There are also obligations relating to shareholder information and the verification of
compliance with certain ratios, including, in the case of significant investments, increases
in indebtedness, dividend payment or the sale of material assets. At 31 December 2021
and 2020, all the obligations were fulfilled.

(b) Non-current loans and borrowings

The breakdown of current financial debt in the consolidated statement of financial position
at 31 December 2021 and 2020 is as follows:

Thousands of Euros
2021 2020
Non- Non-
current Current current Current

Revolving credit facility (note 18 (a)) 45,000 - 45,000 -

ICO loan 38,468 800 10,000 -
Loans to related parties 3,489 106 - -
Unpaid accrued interest - 655 - 447
Reverse factoring lines - 7,095 - 3,565
Credit facility - 2,067 - 2,307
Other payables 282 - - -

87,239 10,723 55,000 6,319

On 5 June 2020, Food Delivery Brands, S.A. and Banco Santander, S.A, arranged a loan
amounting to Euros 10,000 thousand pursuant to ICO guarantees. This loan accrues
interest at a rate of 3.61% and matures in 2025.

On 22 December 2020, Food Delivery Brands, S.A., as the borrower, and Banco Santander,
S.A. and Instituto de Crédito Oficial E.P.E., as lenders, signed a framework agreement to
grant bilateral loans, and signed the contracts for said loans amounting to Euros 30,000
thousand and Euro 10,000 thousand, respectively, to be used to tackle working capital
requirements arising from the COVID-19 health crisis and to repay the Euros 10,000
relating to the ICO Santander loan mentioned above in its entirety. These bilateral loans
accrue interest at an annual rate of 3.75% and their final maturity date is 1 November
2025.

(Continued)
 65

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The arrangement of this framework agreement and of the bilateral loans was subject to prior
or simultaneous compliance with conditions which, most notably, include the main
shareholder of Food Delivery Brands Group, S.A. granting subordinated loans. All
suspensive conditions included in the framework agreement were fulfilled and on 2
February 2021 the loans entered into force.

On 22 December 2020, Food Delivery Brands Group, S.A., as borrower, and BG Select
Investments (Ireland) Limited, as lender, signed a subordinated loan agreement
undertaking to finance the Group’s liquidity requirements up to a maximum amount of
Euros 6,552 thousand by means of two funding tranches. This loan accrues interest
payable quarterly and matures on 16 November 2026. At 31 December the amount of this
loan with capitalised interest amounts to Euros 3,489 thousand.

Disbursement of this loan was subject to the ICO’s approval of the aforementioned bilateral
loans. The funds for the first tranche were released on 29 January 2021 and the loans
became effective.

The credit facility corresponds to Telepizza Chile, S.A. to tackle various local payment
obligations.

Reverse factoring lines correspond to the 90-day extension of payment granted by financial
institutions in reverse factoring operations with suppliers.

Liability balances classified under financing activities are reconciled as follows:

Thousands of Euros
Non-current Current
financial debts financial debts Total

Balance at 1 January 2021 375,467 15,930 391,397

Accrued interest 453 23,288 23,741

Interest paid - (28,111) (28,111)
Finance expense due to the updating of rental rates - 5,137 5,137
(Redemption)/issuance of debt 32,408 3,290 35,698
Amortised cost (arrangement costs) 2,499 - 2,499
Transfers between current and non-current (800) 800 -

Balance at 31 December 2021 410,027 20,334 430,361

(Continued)
 66

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Thousands of Euros
Non-current Current
financial debts financial debts Total
Balance at 1 January 2020 317,778 16,298 334,076

Accrued interest - 25,180 25,180

Interest paid - (34,418) (34,418)
Finance expense due to the updating of rental rates - 5,498 5,498
(Redemption)/issuance of debt 55,000 3,372 58,372
Amortised cost (arrangement costs) 2,689 - 2,689

Balance at 31 December 2020 375,467 15,930 391,397

(19) Provisions

The breakdown of other provisions and their classification as current or non-current is as follows:

Thousands of Euros
2021 2020
Non-current Current Non-current Current

Litigation, claims and inspections 493 - 558 -

Obligations to employees 1,122 63 1,011 2,953
Other provisions - 51 - 51

Total 1,615 114 1,569 3,004

The breakdown and changes of provisions in 2021 and 2020 are as follows:

Thousands of Euros
Litigation, Obligations
claims and to employees Other
inspections provisions Total

At 01 January 2020 700 - 34 734

Additions due to business combinations - 136 - 136
Allowances - 4,196 17 4,213
Payments (142) (328) - (470)
Translation differences - (40) - (40)

At 31 December 2020 558 3,964 51 4,573

Allowances - 28 - 28
Derecognitions (65) (364) - (429)
Payments - (2,394) - (2,394)
Translation differences - (49) - (49)

At 31 December 2021 493 1,185 51 1,729

(Continued)
 67

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(a) Litigation, claims and inspections

The Group has certain administrative claims ongoing, which it estimates could give rise to
a payable of approximately Euros 500 thousand.
(b) Obligations to Employees

Provisions for obligations to employees correspond mainly to an employment commitment

with the Group’s workers in certain countries, as well as certain severance agreements
with employees.

(c) Contingencies

The Group has contingent liabilities for bank and other guarantees related to its normal
business operations amounting to Euros 2,836 thousand and Euros 3,479 thousand at 31
December 2021 and 2020, respectively. No significant liabilities are expected to arise
from these guarantees.

(20) Trade and Other Payables

Details are as follows:

Thousands of Euros
2021 2020

Trade payables and other payables 80,207 76,244

Public entities 7,648 6,497
Salaries payable 8,070 7,497

95,925 90,238

At 31 December 2021 and 2020, trade payables include Euros 18,879 thousand and Euros 12,846
thousand, respectively, payable to financial institutions for reverse factoring transactions.

The balance of remuneration pending payment at 31 December 2021 and 2020 respectively
includes Euros 836 thousand and Euros 2,215 thousand for adjustments pending payment in
connection with the increase in the minimum wage in Spain.

Trade and other payables comprise financial liabilities at amortised cost and their carrying
amount does not differ significantly from their fair value.

(Continued)
 68

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Average supplier payment period. Additional Provision Three. “Duty of Information” pursuant
to Law 15/2010 of 5 July

Details of late payments to suppliers by Spanish consolidated companies are as follows:

2021 2020
Days Days
Average supplier payment period 110 94
Transactions paid ratio 102 112
Transactions payable ratio 175 65
Thousands of Thousands of
Euros Euros
Total payments made 109,919 112,701
Total payments outstanding 32,225 28,526

(21) Ordinary revenue from contracts with customers

Details are as follows:

Thousands of Euros
2021 2020

Outlet sales to customers 183,564 167,921

Supply sale to franchisees and others 119,753 107,961
Royalties 70,294 61,182
Revenue from franchising activity 2,810 4,043
Other services rendered to franchisees 8,048 3,733
Income from incentives 4,030 -
Revenue from initial fees 2,580 2,517

391,079 347,357

All of the revenue indicated above is generated at a specific point in time, except revenue
from initial fees and royalties, which is generated over time.

Details of revenue by geographical segment are provided in note 5.

(Continued)
 69

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(22) Personnel expenses

The breakdown of personnel expenses in 2021 and 2020 is as follows:

Thousands of Euros
2021 2020
Salaries, wages and similar 77,000 79,584
Social Security 9,671 11,034
Termination benefits 5,617 4,533
Other employee benefits expenses 89 469
Total personnel expenses 92,377 95,620

The average number of full-time equivalent employees in the Group during 2021 and 2020,
distributed by category, is as follows:
Number
2021 2020

Management personnel 41 45
Outlet managers 482 503
Other personnel 6,486 6,380

7,009 6,928

At year end the distribution by gender of the Group’s personnel and the Parent Company’s
Directors is as follows:

Number
2021 2020
Male Female Male Female

Directors 8 1 7 1
Management personnel 32 6 11 3
Outlet managers 221 258 139 153
Other personnel 3,638 2,596 2,156 1,366

3,899 2,861 2,313 1,523

(Continued)
 70

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The average number of Company employees with a minimum disability rating of 33% (or local
equivalent) in 2021 and 2020, distributed by category, is as follows:

Number
2021 2020

Technicians 1 1
Other personnel 84 58

85 59

(23) Other Expenses

The breakdown of other expenses is as follows:

Thousands of Euros
2021 2020

Fees and royalties 29,702 26,449

Transport 15,286 14,679
Advertising and publicity 25,903 19,251
Utilities 14,044 13,606
Other expenses 38,279 40,314

123,214 114,299

Fees and royalties include mainly the royalties paid to the Yum! Group for use of the “Pizza Hut”
trademark and the partnership fee (see note 1).

(24) Impairment of Non-current Assets

Details at 31 December 2021 and 2020 are as follows:

Thousands of Euros
2021 2020

Impairment of other intangible assets (note 10) (979) -

Impairment of goodwill (note 10) (2,086) (119,495)
Impairment of property, plant and equipment (note 8) (3,221) (1,200)

(6,286) (120,695)

(Continued)
 71

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(25) Other profit/(loss)

Details at 31 December 2021 and 2020 are as follows:

Thousands of Euros
2021 2020

Profit/(loss) from the sale of Telepizza's bare ownership (Note 10) 6,269 -
Profit/(loss) from net investment in subleases 1,957 3,252
Profit/(loss) on derecognition of other intangible asset (1,075) -
Profit/(loss) on sale of property, plant and equipment 92 (1,026)

7,243 2,226

(26) Income Tax

A reconciliation of income tax, resulting from applying the standard tax rate in Spain to the pre-
tax profit or loss, with the income tax expense recognised in the consolidated income
statement for 2021 and 2020 is as follows:

Thousands of Euros
2021 2020

Pre-tax loss
from continuing operations (22,318) (160,465)
Consolidation goodwill impairment - 116,410
Tax losses not recognised as
tax credits 19,744 14,967

(2,574) (29,088)

Expected tax expense/(income) at the tax rate applicable to the

Parent Company (25%) (643) (7,272)
Non-deductible expenses at the tax rate 53 456
Withholdings for payments to non-residents 4,189 3,263
Recognition (adjustment) of deferred taxes (2,515) -
Expense/(income) due to different tax rates (643) 136
Other changes (443) -

Tax income (2) (3,417)

(Continued)
 72

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Income tax payable/(recoverable) for 2021 and 2020 is calculated as follows:

Thousands of Euros
2021 2020

Tax income (2) (3,417)

Deductible temporary differences and tax credits (note 15) 2,308 7,554
Taxable temporary differences (note 15) 5,023 1,710
Payments on account and withholdings (7,905) (5,508)
Other changes 709 -

Income tax payable/(recoverable) 138 339

In accordance with prevailing legislation in each country, losses declared may be carried forward
to be offset against profits of the subsequent accounting periods, the amount being distributed
as considered appropriate. Losses are offset when the tax declarations are filed, without
prejudice to the taxation authorities’ power of inspection within the periods and limits
established by applicable legislation.
At 31 December 2021 and 2020, the Group has recognised the following deferred tax assets
amounting to Euros 12,609 thousand and Euros 15,557 thousand (see note 15) in respect of
certain tax loss carryforwards from the tax group in Spain, from Telepizza Chile, S.A. and
from other countries (Ecuador and Mexico).
Total tax loss carryforwards pending of compensation of the aforementioned countries are as
follows:

Thousands of Euros
2021 2020
Year Spain Chile Other Spain Chile

2009 - - - 4,234 -
2010 - - - 628 -
2011 13,725 - - 14,366 -
2012 4,343 - - 4,343 -
2013 1,182 - - 1,182 -
2014 - - - 491 -
2015 - - 286 - -
2016 1,539 - 1,724 - -
2017 - - 792 - -
2018 - - 1,915 3,293 -
2019 757 10,823 - 11,024
2020 15,340 11,783 3,749 9,596 12,807
2021 (estimated) ‐ 16,529 1,550 - -

Total 36,886 39,135 10,016 38,132 23,831

Furthermore, a tax loss carryforward was generated at Tasty Bidco, S.L. in 2020 for Euros 15,778
thousand prior to its inclusion in the tax group in Spain which is not recognised as deferred
tax assets.

(Continued)
 73

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

At 31 December 2021 and 2020 the Group has the following unrecognised deferred tax assets in
respect of tax loss carryforwards of companies in Switzerland and Colombia (in 2020 also in
Poland and Czech Republic):

Thousands of Euros
Year 2021 2020

2013 161 178

2014 4,086 4,529
2015 3,459 4,100
2016 549 1,765
2017 1,952 1,510
2018 662 1,467
2019 916 1,875
2020 3,991 4,424

Total 15,776 19,848

At 31 December 2021, the Group has non-deductible interest arising from the Group companies
in Spain and Portugal for Euros 180,238 thousand Euros (169,697 thousand in 2020) and
Euros 1,620 thousand (Euros 13,217 thousand in 2020), available for future offset indefinitely.
The breakdown is as follows:

Thousands of Euros
Year 2021 2020

2012 33,042 33,042

2013 38,045 38,045
2014 48,939 53,296
2015 15,938 20,153
2016 8,711 11,356
2017 1,620 2,000
2019 12,130 8,249
2020 12,081 16,774
2021 (estimated) 11,352 -

181,858 182,914

The Group has deductions recognised as deferred tax assets amounting to Euros 7,268 thousand
and, according to the tax returns filed by Group companies in previous years and estimates for
2021, the Group has the following deductions pending application:

(Continued)
 74

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Thousands of Euros
Year 2021
RD RD&I

2019 884 ‐
2020 2,565 112
2021 (estimated) 4,109 366

7,558 478

In 2020, the following inspections commenced at Group companies:

- The subsidiary Telepizza Chile, S.A. was in the midst of a general tax inspection with
respect to income tax and transfer prices in relation to the fiscal year 2017. This inspection
procedure was completed in 2021 without any significant impact on the financial statements
of this Group company.

- The consolidated tax group in Spain: In October 2020, notification was received of the start
of partial tax inspection proceedings in respect of corporate income tax relating to the 2014-
2020 period. These proceedings refer to the consolidated tax group in force in that period,
which was headed by Food Delivery Brands Group, S.A., and whose composition was
different to the current one. On 20 December 2021, the tax auditors signed the tax
assessments, which mainly consider certain expenses from previous years to be non-
deductible. The aforementioned assessments have resulted in a reduction of taxable income
for previous years amounting to Euros 2,580 thousand and a reduction of tax payable
amounting to Euros 289 thousand.

In addition, pursuant to current legislation, taxes cannot be considered definitive until they have
been inspected and agreed by the taxation authorities or before the inspection period of four
years has elapsed. In addition to those mentioned above, at the date on which these
consolidated annual accounts were authorised for issue, the principal Group companies have
open to inspection by the taxation authorities all main applicable taxes and income tax since
1 January 2016.

Due to the treatment permitted by fiscal legislation of certain transactions, additional tax
liabilities could arise in the event of inspection. In any case, the Parent Company’s Directors
do not consider that any such liabilities that could arise would have a significant effect on
the annual accounts.

(Continued)
 75

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(27) Commitments

As stated in notes 8 and 10, at 31 December 2021 and 2020 the Group has no relevant
commitments relating to investing activities.

(28) Information on the Parent Company’s Directors and Senior Management Personnel

In 2021 and 2020 the Parent Company’s Directors received remuneration (including severance
pay) amounting to Euros 3,774 thousand and Euros 880 thousand, respectively. Moreover, at
31 December 2021 and 2020, the Group has extended loans or advances to the Directors
totalling Euros 745 thousand and Euros 1,392 thousand, respectively. These loans are secured
by the Directors with certain shares of the Parent Company. The main conditions and
characteristics of the loans to the Directors are described in note 11. Life insurance premiums
of Euros 3 thousand and Euros 6 thousand were paid on behalf of the Directors in 2021 and
2020, respectively, and the savings plan contributions made amounted to Euros 73 thousand
and Euros 191 thousand, respectively.

Public liability insurance premiums paid on behalf of the Directors in 2021 and 2020 amounted
to Euros 52 thousand and Euros 38 thousand, respectively.

In 2021 and 2020, the members of the Group’s Senior Management received remuneration
(including severance pay) amounting to Euros 5,760 thousand and Euros 1,479 thousand.
Moreover, at 31 December 2021 and 2020, the Group has extended loans or advances to Senior
Management totalling Euros 830 thousand and Euros 1,216 thousand, respectively. These
loans are secured with certain shares of the Parent Company. The main conditions and
characteristics of the loans to Senior Management are described in note 11. Life insurance
premiums of Euros 5 thousand and Euros 6 thousand were paid on behalf of Senior
Management in 2021 and 2020, respectively, and the savings plan contributions made
amounted to Euros 42 thousand and Euros 53 thousand, respectively.

At 31 December 2020, the Group had recognised provisions to tackle severance agreements with
Directors amounting to Euros 2,388 thousand (see note 19).

In 2021 and 2020 the Parent Company's Directors did not carry out any transactions other than
ordinary business or applying terms that differ from market conditions with the Company or
Group companies.

Conflicts of interest concerning the Directors

In 2021 and 2020 the Directors of the Company and their related parties have had no conflicts of
interest requiring disclosure in accordance with article 229 of the Revised Spanish Companies
Act.

(Continued)
 76

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(29) Environmental Information

The Group’s operations are subject to legislation governing environmental protection and health
and safety in the workplace (environmental protection and occupational health and safety
laws). The Group complies substantially with these laws and has established procedures
designed to encourage and ensure compliance.

The Group has adopted the appropriate measures aimed at protecting the environment and
minimising any environmental impact, in accordance with prevailing legislation. No
provision for environment-related liabilities and charges was recognised during the year, as
no contingencies exist in this regard.

The Group considers that the environmental risks deriving from its activity are minimal and
adequately covered and that no additional liabilities will arise therefrom. The Group did not
make any investments, incur any expenses or receive any significant grants related with these
risks during the years ended 31 December 2021 and 2020.

(30) Audit Fees

Fees relating to services provided by the firm (KPMG Auditores, S.L.) auditing the Group’s
annual accounts for the years ended 31 December 2021 and 2020, regardless of when they
were invoiced, are as follows:
Thousands of Euros
2021 2020

Audit services 226 215

Other assurance services 3 3

239 218

The amounts detailed in the above table include the total fees for services rendered in 2021 and
2020, irrespective of the date of invoice.

Other entities affiliated with KPMG International invoiced the Group the following fees and
expenses for professional services during the years ended 31 December 2021 and 2020:
Thousands of Euros
2021 2020
Audit services 104 90
Other services 19 19

125 109

(Continued)
 77

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

(31) Events after the Reporting Period

The current geopolitical and economic uncertainty as result of the conflict in Ukraine is causing
a general increase in the prices of raw materials and energy products, as well as disruptions in
the supply chains, which could affect the Group's businesses. Although the Group would pass
on such increases to the franchisees and the consumers, it could be hampered by the duration
and intensity of this environment and the capacity of the markets to absorb it.

At the date of authorization for issue of the consolidated annual accounts, it is not possible to
make a reliable estimate of the effects resulting from this situation. During 2022, the Parent’s
directors will assess the impact of the aforementioned events on the equity and financial
position at 31 December 2022 and on the results of operations, including assets impairment,
and cash flows for the year then ended.

(32) Risk Management Policy

Financial risk factors

The Group’s activities are exposed to various financial risks: market risk (including currency risk,
fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate
risk. The Group’s global risk management programme focuses on uncertainty in the financial
markets and aims to minimise potential adverse effects on the Group’s profits. The Group
therefore uses derivatives to mitigate certain risks.

Risks are managed by the Group’s Finance Department in accordance with policies approved by
the Board of Directors of the Parent Company. This department identifies, evaluates and
mitigates financial risks in close collaboration with the Group’s operational units. The Board
of Directors issues global risk management policies, as well as policies for specific issues such
as currency risk, interest rate risk, liquidity risk, the use of derivative and non-derivative
instruments, and investments of cash surpluses.

Interest rate risk

Variations in interest rates affect the fair value of assets and liabilities that accrue interest at fixed
rates, as well as the future cash flows of assets and liabilities indexed to a variable interest
rate. Such variations could have a significant impact on the cost of debt and the return on
investments.

The objective of interest rate risk management is to achieve a balanced debt structure that
minimises the cost of the debt over several years with reduced income statement volatility.
Exhaustive monitoring of trends in benchmark interest rates is essential to ensure that any
substantial fluctuations identified are evaluated and that optimum hedging is arranged, where
necessary, to minimise the risk, assuring a reasonable interest rate.

(Continued)
 78

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

The structure of financial risk at 31 December 2021 and 2020 is as follows:

Thousands of Euros
Type of financing Interest rate 2021 2020

Bond Fixed (6.25%) 322,788 320,468

Revolving facility Fixed (3.25%) 45,000 45,000
ICO loan Fixed (3.61%) 39,268 10,000
Loans to related parties Fixed rate capitalisable 3,595 -

Total 410,651 375,468

The benchmark interest rates for the debt undertaken by Group companies is primarily a fixed
rate of 6.25%, and interest on the revolving credit facility is charged at 3.25%.

At 31 December 2021 and 2020, had interest rates been 25 basis points higher or lower, with the
other variables remaining constant, this would not have affected income for the year, because
almost all of the Group’s indebtedness is at a fixed rate.

Currency risk

As the Food Delivery Brands Group operates internationally, fluctuations in exchange rates for
financial or commercial transactions in foreign currencies represent another fundamental
financial risk to which the Group is exposed. -

Currency risk mainly arises from three types of transactions:

- Commercial transactions in foreign currency.

- Intragroup payables in foreign currency.

- Net assets deriving from net investments in foreign operations with functional currencies other
than the Euro (risk of exchange rate fluctuations on translation of the financial statements
of these companies in the consolidation process).

The Group has no significant balances or commercial transactions denominated in foreign

currencies other than the functional currencies of each country where the Group operates.

(Continued)
 79

TASTY BIDCO, S.L.

AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

At 31 December 2021, had the Euro weakened/strengthened by 10% against the Chilean Peso,
the Colombian Peso and the Mexican Peso with the other variables remaining constant,
consolidated post-tax loss would have been Euros 1,862 thousand lower or higher (Euros
1,946 thousand in 2020), mainly as a result of translating trade receivables, debt instruments
classified as available-for-sale financial assets and payables to Group companies that are
eliminated on consolidation. Translation differences recognised under “Other comprehensive
income” would have increased by Euros 3,159 thousand, mainly due to translation differences
on foreign operations.

Liquidity risk

The Group’s liquidity policy consists of arranging credit facilities and holding marketable
securities for a sufficient amount to cover forecast requirements, making financing available
and enabling it to settle market positions relating to short-term investments immediately, thus
ensuring that this financial risk is minimised.

The Group’s exposure to liquidity risk at 31 December 2021 and 2020 is shown below. These
tables present an analysis of financial liabilities by remaining contractual maturity dates.

Thousands of Euros

Amount at Future cash Up to 3 3 months to 1 to 5 More than

31/12/2021 flow maturities months 1 year years 5 years
Bonds and loans from
credit institutions
Principal 420,095 429,162 7,095 2,067 420,000 -
Interest 10,266 149,161 10,266 18,710 120,185 -
Trade and
other accounts payable 95,925 95,925 95,925 - - -

Total 526,286 674,248 113,286 20,777 540,185 -

Thousands of Euros

Amount at Future cash Up to 3 3 months to 1 to 5 More than

31/12/2020 flow maturities months 1 year years 5 years
Bonds and loans from
credit institutions
Principal 381,786 395,872 5,872 - 55,000 335,000
Interest 9,611 91,602 10,469 10,469 83,750 6,979
Trade and
other accounts payable 90,238 90,238 90,238 - - -

Total 481,635 577,712 106,579 10,469 138,750 341,979

(Continued)
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AND SUBSIDIARIES

Notes to the Consolidated Annual Accounts

Lease payment maturities are detailed in note 9.

Payables to public entities are not included in trade and other payables.

Future cash flow maturities include the loan principal plus interest based on contractual interest
rates at year end.

Approved investments not recognised as property, plant and equipment under construction at the
reporting date are not included.

Credit risk

Credit risk is the risk of financial loss for the Group in the event that a customer or counterparty
to a financial instrument fails to discharge a contractual obligation, and mainly arises on the
Group’s trade receivables and its investments in debt instruments.

The financial instruments that are particularly exposed to credit risk mainly include net
investment in subleases, trade and other receivables and cash and cash equivalents. The Group
does not have significant concentrations of credit risk. This risk is distributed across a number
of banks whose services the Group uses and the customers with which it operates.

Maximum exposure to credit risk through net investment in subleases, trade and other receivables
and cash and cash equivalents is as follows:

Thousands of Euros
2021 2020

Non-current financial assets 16,378 15,655

Net investment in subleases 16,661 41,239
Trade and other receivables 55,024 43,035
Cash and cash equivalents 58,162 45,134

146,225 145,063

(i) Trade receivables

The Group analyses receivables by type of customer. The Group operates proprietary outlets
and also acts as a franchiser, organising marketing activities for the brands and the supply
chain. As such, the Group has receivables associated with the franchising activity.

(Continued)
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Notes to the Consolidated Annual Accounts

The Group’s receivables arising from sales at its own restaurants are minimal and subject to a
low level of credit risk in view of the short settlement period and the nature of the
settlement, inasmuch as customers generally pay in cash or by credit card in restaurants.

Receivables arising from the franchising activity include those from franchises under
proprietary brands. For these receivables, the Group performs a detailed analysis of the
expected credit losses.

The Group’s exposure to credit risk is influenced primarily by the individual characteristics
of each customer. However, the Group also considers the factors that could affect the credit
risk of its customer base, including default risk associated with the sector and the country
in which the customers operate, and even the external rating of a particular country.

For trade receivables, the Group applies the simplified approach permitted under IFRS 9,
which requires expected credit losses to be recognised at initial recognition of the accounts
receivable. The Group determines lifetime expected credit losses of the financial assets on
a collective basis, grouped by geographical area. The Group has established a provision
matrix based on its historical credit loss experience, adjusted for factors that are specific to
the borrowers and economic conditions:

2021 Thousands of Euros

Europe Latin America
Maturity % Amount Impairm. % Amount Impairm.

Current 0.06% 32,529 (18) 0.00% 6,784 -

Less than 3 months 0.24% 1,485 (4) 11.29% 760 (86)
3 to 6 months 26.52% 600 (159) 44.13% 487 (215)
6 months to 1 year 89.87% 145 (130) 0.00% 172 -
More than 1 year 99.31% 7,771 (7,717) 82.76% 2,622 (2,170)

18.88% 42,530 (8,029) 22.82% 10,824 (2,470)

2020 Thousands of Euros

Europe Latin America
Maturity % Amount Impairm. % Amount Impairm.

Current 0.00% 20,467 - 7.60% 5,442 (413)

Less than 3 months 0.00% 2,620 - 56.25% 456 (257)
3 to 6 months 27.14% 814 (221) 74.70% 781 (583)
6 months to 1 year 0.00% 546 - 76.60% 1,244 (953)
More than 1 year 88.99% 8,290 (7,377) 96.42% 1,036 (999)

23.21% 32,738 (7,598) 35.78% 8,960 (3,206)

(Continued)
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Notes to the Consolidated Annual Accounts

Nevertheless, for trade receivables that are more than 360 days overdue, the Group determines
expected credit losses on an individual basis. In 2021, the Group recognised an impairment
of Euros 410 thousand (Euros 292 thousand in 2020) in respect of receivables exposed to
credit risk.

(ii) Cash and cash equivalents

Credit risk related to financial instruments in the form of cash held at banks is minimal insofar
as the parties to the transaction are banks that have been awarded a high rating by
international rating agencies.

(Continued)
 Appendix I (page 1 of 2)
TASTY BIDCO, S.L. AND SUBSIDIARIES
Details of Shareholdings in Group Companies
31 December 2021

(Expressed in thousands of Euros)

Registered Percentage shareholding Total

office Direct Indirect Capital Reserves Profit/(loss) equity

Food Delivery Brands Group, S.A. (1) Madrid 84.3% - 25,180 369,221 1,627 396,028
Food Delivery Brands, S.A. (1) Madrid - 100% 16,380 58,553 (15,948) 58,985
Mixor, S.A. (3) Madrid - 100% 3,215 (12,609) 1,020 (8,374)
Telepizza Gestión, S.A. (3) Madrid - 100% 1,085 251 743 2,079
Foodco Bondco, S.A. (1) Madrid - 100% 5,214 386,660 3,256 395,130
Telepizza Chile, S.A. (2) Santiago de Chile - 100% 29,038 15,288 (21,819) (22,507)
Telepizza Portugal Comercio de Produtos
Alimentares, S.A (1) Lisbon - 100% 1,900 9,586 3,992 15,478
Telepizza Guatemala, S.A (3) Guatemala - 100% 1 439 - 440
Luxtor, S.A. (1) Avila - 100% 6,128 1,261 5,758 13,147
Alimentos de la Costa Costahut, S.A. (3) Ecuador - 100% 1 (31) (13) (43)
Sociedad de Turismo Sodetur, S.A. (3) Ecuador - 100% 6,689 2,655 (2,057) 7,287
Telepizza Industries International Telepizzainter, S.A. Ecuador - 100% 1 18 (391) (372)
Inverjenos S.A.S. (1) Bogota - 100% 746 9,975 (4,840) 5,881
Telepizza Shanghai S.L. (3) Shanghai - 100% 104 52 (26) 130
Telepizza Switzerland GmbH(3) Berne - 100% 18 (2,993) (413) (3,388)
The Good Food Company Ltd (3) Ireland - 51% - 6,507 2,982 9,489
Mooncharm Limited (3) Ireland - 51% - 1,554 1,735 3,289
TDS Telepizza, S.L. (3) Spain - 100% 4 10,293 (237) 10,059
Insular Procurement & Services, S.L. (3) Spain - 100% 3 (135) 1,085 953
IBERIFOOD, SAP.I. SA de C.V. Mexico - 100% - 5,841 (227) 5,614
Desarrolladora Inmobiliaria de Restaurantes, S. de R. L. de C. V. Mexico - 100% 7,017 (2,694) (3,634) 689
Expertos en Repartos a Domicilio, S. de R.L. de C.V. Mexico - 100% - 145 (17) 128
Expertos en Restaurantes, S. de R.L. de C.V. Mexico - 100% - 483 275 758
(1) Statutory accounts audited
(2) Statutory accounts of main companies of the subgroup audited
(3) Statutory accounts not audited
(4) Dormant companies

This appendix forms an integral part of note 1 to the consolidated annual accounts for 2021, in conjunction with which it should be read.
 Appendix I (page 2 of 2)
TASTY BIDCO, S.L. AND SUBSIDIARIES
Details of Shareholdings in Group Companies
31 December 2020

(Expressed in thousands of Euros)

Registered Percentage shareholding Total

office Direct Indirect Capital Reserves Profit/(loss) equity

Food Delivery Brands Group, S.A. (1) Madrid 84.3% - 25,180 441,515 (72,294) 394,401
Food Delivery Brands, S.A. (1) Madrid - 100% 16,380 47,822 (3,056) 61,146
Mixor, S.A. (3) Madrid - 100% 3,215 (5,515) (7,095) (9,394)
Telepizza Gestión, S.A. (3) Madrid - 100% 1,085 (533) 785 1,336
Foodco Bondco, S.A. (1) Madrid - 100% 5,214 436,813 (70,153) 371,874
Telepizza Chile, S.A. (2) Santiago de Chile - 100% 2,462 23,317 (10,902) 14,873
Telepizza Portugal Comercio de Produtos
Alimentares, S.A (1) Lisbon - 100% 1,900 63,552 2,990 68,442
Telepizza Poland Sp. Z o.o. (1) Warsaw - 100% 13,101 (10,404) (1,635) 68
Telepizza Guatemala, S.A (3) Guatemala - 100% 1 408 (3) 406
Luxtor, S.A. (1) Avila - 100% 6,128 (3,374) 4,636 7,389
Telepizza Ecuador, S.A. (3) Quito - 100% 3,015 (2,588) (1,075) (648)
Alimentos de la Costa Costahut, S.A. (3) Ecuador - 100% 1 17 (47) (29)
Sociedad de Turismo Sodetur, S.A. (3) Ecuador - 100% 1,621 2,240 (2,394) 1,466
Telepizza Industries International Telepizzainter, S.A. Ecuador - 100% 1 (125) 156 32
Inverjenos S.A.S. (1) Bogota - 100% 669 9,036 (6,412) 3,293
Telepizza Shanghai S.L. (3) Shanghai - 100% 104 13 24 141
Procusto Activos, S.L.U (4) Madrid - 100% 3 (2) - 1
Telepizza Switzerland GmbH(3) Berne - 100% 18 (2,213) (630) (2,825)
Fortys Pizza SRO (3) Czech Republic - 100% 1,039 (1,591) (1,341) (1,893)
The Good Food Company Ltd (3) Ireland - 51% - 4,332 2,179 6,511
Mooncharm Limited (3) Ireland - 51% - 567 1,128 1,695
TDS Telepizza, S.L. (3) Spain - 100% 4 10,198 94 10,296
Insular Procurement & Services, S.L. (3) Spain - 100% 3 (975) 840 (132)
IBERIFOOD, SAP.I. SA de C.V. Mexico - 100% 2,045 3,887 (324) 5,608
Desarrolladora Inmobiliaria de Restaurantes, S. de R. L. de C. V. Mexico - 75% 6,134 (20) (2,556) 3,558
Expertos en Repartos a Domicilio, S. de R.L. de C.V. Mexico - 75% - 112 41 153
Expertos en Restaurantes, S. de R.L. de C.V. Mexico - 75% - 478 39 439
(1) Statutory accounts audited
(2) Statutory accounts of main companies of the subgroup audited
(3) Statutory accounts not audited
(4) Dormant companies

This appendix forms an integral part of note 1 to the consolidated annual accounts for 2021, in conjunction with which it should be read.
 1

TASTY BIDCO, S.L.

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Directors’ Report

Corporate background – the Food Delivery Brands Group

Telepizza was created in 1987 as a family business. Since opening its very first outlet in Madrid in 1988,
the Group has gradually ramped up its activities and expanded internationally.

In 1992, Telepizza opened its first pizza dough production plant in Guadalajara (Spain) and its first
outlets in Poland, Portugal and Chile. Telepizza was listed on Spain’s stock exchanges in 1996 via initial
public offering. In 2004, Telepizza began its digital expansion in Spain and, four years later, in 2008,
Telepizza relaunched its telepizza.es website to improve home delivery.

In 2007, the Company was delisted from the Spanish stock exchange following a delisting tender
offer launched by the private equity fund Permira and other partners. Telepizza continued its
international expansion, entering into master franchise agreements in Guatemala, El Salvador and
the United Arab Emirates in 2009. In 2010, the Group acquired the Colombian pizza chain Jeno’s
Pizza, the country’s biggest pizza chain with 80 outlets, and in the subsequent years the Group opened
its first outlet in Peru and entered the airline catering sector. In 2012, Telepizza established its
presence in Ecuador. In 2013, Telepizza expanded its network of franchises in Panama, Russia and
Bolivia. In 2014, the Group gained a foothold in Angola. After observing a greater reliance on
technology among its customer base, in 2015 Telepizza developed “Click & Pizza”, an online
delivery service, and started creating smartphone applications.

In April 2016, Telepizza was again listed on the Spanish stock market and continued its international
expansion, announcing its entry into new markets in EMEA and Latin America, under the Telepizza
brand, and Ireland, under the Apache brand. In December 2018, Telepizza signed a strategic agreement
with Yum! Brands, making it the largest master franchisee of Pizza Hut in the world.

The partnership with Yum! (Pizza Hut)

In June 2018, the Group signed a strategic partnership and multi-country master franchise agreement
between Telepizza Group (now Food Delivery Brands) and Pizza Hut to accelerate their joint growth
in Latin America (excluding Brazil), the Caribbean, Spain, Portugal and Switzerland.

Following the approval of the transaction by the European Commission’s competition authorities
on 3 December 2018, the global alliance and master franchise agreement with Pizza Hut was signed
and came into force on 30 December 2018.

Pizza Hut, a division of Yum! Brands, Inc. (“Yum! Brands”), is the world's largest pizzeria company
with more than 18,000 restaurants in over 100 countries. As a result of the partnership, on 30
December 2018 Telepizza operated a total of 1,011 Pizza Hut outlets (in addition to its current 1,620
network outlets and including the 38 outlets in Ecuador acquired prior to formalisation of the
agreement), thus making it the largest Pizza Hut master franchisee in the world by number of outlets
and a leading pizza operator worldwide with an ambitious growth plan in the coming years.

On the back of this partnership, the Food Delivery Brands Group will be able to develop and improve
its capacity to manage networks of outlets and supply pizza dough and ingredients while fostering
its international growth (taking advantage of the synergies existing between both groups).
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Consolidated Directors’ Report

As part of the agreement, Telepizza granted a purchase option on the bare ownership of the
"telepizza" brand, which would be exercisable 3 years after the signature of the agreement. In
financial year 2021, Pizza Hut International exercised the aforementioned purchase option and, as
originally agreed, the Food Delivery Brands Group retains the usufruct of the "telepizza" trademark
and its exclusive right to use it.

In Spain and Portugal, the Group will continue to operate under the Telepizza brand along with Pizza
Hut, given its leadership and privileged recognition of the brand across these markets. Conversely,
the current brands in Latin America (“Telepizza” and “Jeno’s Pizza”) will be gradually changed so
as to operate solely under the “Pizza Hut” brand in the coming years, thereby taking advantage of its
greater brand recognition in the region.

Recent changes in the corporate and capital structures

On 21 January 2019, Tasty Bidco, S.L. –an investment vehicle controlled by various funds and
accounts that are managed or advised by KKR Credit Advisors (US) LLC or its affiliates, with
entities affiliated with Torreal, Safra, Artá and Altamar as co-investors–, filed with the Comisión
Nacional del Mercado de Valores (CNMV) a voluntary tender offer with a public offer of Euros
6.00 per share for the acquisition of all the shares of Telepizza Group S.A. (currently called Food
Delivery Brands Group, S.A.). The result of the voluntary takeover process was published on 8
May 2019 and it was resolved on 13 May 2019. The takeover resulted in Tasty Bidco owning
56,699,827 shares in Telepizza, representing 56.29% of its share capital. Subsequently, Tasty Bidco
S.L. approved a sustained order to acquire shares in the Telepizza Group.

As a result of the takeover, on 10 June 2019, the Group completed the refinancing of its existing
financial debt by means of the following transactions:

 The acquisition of all shares representing the share capital of Tasty Bondco 1, S.A. from Tasty
DebtCo S.à.r.l., an affiliate of Tasty Bidco, S.L. which completed a Euros 335,000 thousand
bond issue at a fixed interest rate of 6.25%, maturing in 2026. These bonds are listed in the
Luxembourg stock exchange’s Euro MTF market.

 Early repayment of the Euros 200,000 thousand syndicated loan arranged by the Group with
certain banks on 8 April 2016 and, simultaneously, the syndicated loan guarantees were released
and guarantees were provided to bondholders.

As part of the recapitalisation of the Group, the Company’s General Meeting of Shareholders, held
on 17 June 2019, approved the distribution of an extraordinary dividend charged to unrestricted
reserves amounting to Euros 130,936,882.70, which was allocated by certain investors to the partial
repayment of their purchase loans.

Furthermore, on that same date, the General Meeting of Shareholders of Telepizza Group, S.A.,
approved the delisting of the shares from the Madrid, Barcelona and Bilbao stock exchanges.
Trading in Telepizza Group, S.A. shares was suspended on 9 July 2019, and the shares were
effectively delisted on 26 July 2019.
 3

TASTY BIDCO, S.L.

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Consolidated Directors’ Report

As previously stated, Tasty Bondco 1, SA.U. is a limited liability company incorporated in

accordance with the laws of Spain, which on 3 May 2019 issued a Euros 335,000 thousand senior
secured bond maturing in 2026.

On 12 December 2019, a merger was approved between the issuer Tasty Bondco 1, S.A.U. and
Foodco Bondco, S.L., identified as “Tasty Bondco 2, S.A.” in the Indenture and Merger
Memorandum, which was approved by the competent bodies of the merged entities. On 26 February
2021 the merger deed was filed with the Madrid Companies Register and, as a result, Foodco
Bondco, SAU (transformed into a corporation – sociedad anónima) assumed all the issuer’s
obligation in connection with the bonds, the Indenture, the Intercreditor agreement and any other
document relating to the issue, in accordance with Spanish law.

The bonds accrue interest at an annual rate of 6.25%. The bonds will mature on 15 May 2026 and
the issuer will pay interest on the bonds half-yearly every 15 January and 15 July, from 15 January
2021.

On 21 July 2021, the General Meeting of Shareholders of Telepizza Group, S.A. agreed to change
the Company’s name to Food Delivery Brands Group, S.A. and to change the corporate name of the
Group. Accordingly, the corporate identity and image will boost our international positioning
recognition as a multi-brand group. The Group, which operates the “Telepizza”, “Pizza Hut”,
“Jeno’s Pizza” and “Apache Pizza” concepts, thereby takes another step forward in its strategy to
position itself as the world’s largest pizza delivery group.

This change is aimed at boosting and reinforcing the development of each of its brands, affording
them greater personality and differentiation in the various markets in which they operate. The
change will also shore up the individual ‘Telepizza’ concept, a brand with more than 30 years of
history which, following its performance during the COVID-19 crisis, has strengthened its
recognition and renown even more, to its highest ever levels.

The Group’s position and business performance

Coronavirus pandemic (COVID-19)

On 11 March 2020, the World Health Organization declared the outbreak of coronavirus disease
(COVID-19) a pandemic, due to its rapid global spread, affecting more than 150 countries on that
date. Most governments have taken restrictive measures to curb the spread, which include: isolation,
lockdowns, quarantine and restrictions on the free movement of people, closure of public and private
premises except those considered essential or relating to healthcare, border closures and drastic
reductions in air, sea, rail and road transport.

This situation has had a significant impact on the global economy, due to the disruption or slowing
of supply chains and the sizeable increase in economic uncertainty, evidenced by an increase in the
volatility of asset prices and exchange rates, as well as cuts in long-term interest rates.
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TASTY BIDCO, S.L.

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Consolidated Directors’ Report

Governments have approved various extraordinary emergency measures to mitigate the economic
and social impact of the COVID-19 outbreak.

The Group has developed a “COVID-19 Prevention Protocol”, which outlines the security measures
implemented to tackle the situation with the best safeguards for health, and always in compliance
with strict procedures and to ensure the health and welfare of its employees and customers at all times.

The Group is working, coordinating with and at the disposal of the authorities to ensure the health
and welfare of employees and customers alike, and to meet any needs we can by contributing our
resources.

Likewise, many of the health measures implemented by governments to curb the spread of the
pandemic consisted of imposing bans or restrictions on opening hours for outlet operations.
Nevertheless, the Group has managed to adapt to these circumstances, continuing with its activity
and increasing primarily home delivery and takeaway services by following zero contact procedures.
Nevertheless, due to the decline in activity and in order to streamline efforts and optimise resources,
the Group has implemented various furlough schemes which in Spain have affected 1,520 employees
in 2020. In addition, the Group's management agreed to a temporary reduction of their remuneration.

In 2020, the Group drew down a (revolving) credit facility and an ICO loan was arranged amounting
to Euros 45,000 thousand and Euros 10,000 thousand, respectively, in addition to the existing
funding, which has helped the Group to address the health emergency and continue with its activities.

In 2020, the Group also analysed potential options for optimising the current capital structure, in order
to (i) adapt it to the new business circumstances and the economic and competitive environment
resulting from COVID-19, and (ii) to obtain the necessary financial resources to fully implement the
business plan devised for the next few years.
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TASTY BIDCO, S.L.

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Consolidated Directors’ Report

The reconciliation between the consolidated income statements for 2021 and 2020, and the same
excluding the effects of IFRS 16, is shown below

Thousands of Euros
2021 ex
2021 IFRS 16 IFRS 16

Revenues 391,079 4,105 395,184

Merchandise and raw materials used (115,517) - (115,517)
Personnel expenses (92,377) - (92,377)
Depreciation and amortisation expenses (47,313) 15,454 (31,859)
Other expenses (123,214) (24,112) (147,326)
Impairment of non-current assets (6,286) - (6,286)
Other losses 7,243 (1,994) 5,249

Loss from operating activities 13,615 (6,547) 7,068

Finance income 2,438 (835) 1,603

Finance expenses (38,371) 5,137 (33,234)

Loss before tax from

continuing operations (22,318) (2,245) (24,563)

Income tax expense 2 179 181

Loss for the year

from continuing operations (22,316) (2,066) (24,382)

Post-tax loss of discontinued operations

discontinued operations (4,744) (21) (4,765)

Loss for the year (27,060) (2,087) (29,147)

Profit/(loss) attributable to non-controlling interests (2,094) (328) (2,422)

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TASTY BIDCO, S.L.

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Consolidated Directors’ Report

Thousands of Euros
2020 ex
2020 IFRS 16 IFRS 16

Revenues 347,357 8,415 355,772

Merchandise and raw materials used (104,220) - (104,220)
Personnel expenses (95,620) - (95,620)
Depreciation and amortisation expenses (43,725) 17,116 (26,609)
Other expenses (114,299) (29,038) (143,337)
Impairment of non-current assets (120,695) (120,695)
Other losses 2,226 (3,252) (1,026)

Loss from operating activities (128,976) (6,759) (135,735)

Finance income 1,878 (1,436) 442

Finance expenses (33,367) 5,521 (27,846)

Loss before tax from

continuing operations (160,465) (2,674) (163,139)

Income tax expense 3,417 1,251 4,668

Loss for the year

from continuing operations (157,048) (1,423) (158,471)

Post-tax loss of discontinued operations

discontinued operations (3,334) (255) (3,079)

Loss for the year (160,382) (1,168) (161,550)

Profit/(loss) attributable to non-controlling interests (23,550) (223) (23,773)

Food Delivery Brands Group chain sales in the 12-month reporting period ended on 31
December 2021

EMEA LatAm Total

1
Chain sales growth 6.7% 22.4% 13.6%

1
Growth in chain sales in constant currency (%) 6.8% 27.2% 15.7%
1
Growth in chain sales in constant currency - Telepizza (%) 6.1% 22.1% 7.6%
1
Growth in chain sales in constant currency - Pizza Hut (%) 11.7% 27.9% 25.4%

Excluding the discontinued operations in Poland and the Czech Republic

2
Including personnel costs, leases, advertising, logistics and other expenses
3
Detailed in the section “Alternative performance measures”
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TASTY BIDCO, S.L.

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Consolidated Directors’ Report

Summary of the income statement for the 12-month reporting period ended on 31 December
2021 (excluding discontinued operations)

Below are the Group’s revenues from 1 January 2021 to 31 December 2021, and its adjusted and
reported EBITDA:

2020 2021
(millions of Euros) (Without effect (Without effect % change
of IFRS 16) of IFRS 16)
Own outlet sales 167.9 183.6 9.3%
Supply chain, royalties, marketing fee and other revenue 187.9 209.8 11.7%
Revenues 355.8 393.4 10.6%
Product cost -103.2 -115.5 11.9%
% Gross margin 71.0% 70.6% -0.3p.p
Other operating expenses -223.0 -228.6 2.5%
Adjusted EBITDA 29.6 49.3 66.4%
% adjusted EBITDA margin 8.3% 12.5% 4.2p.p
3
Non-operating and recurring costs -17.0 -9.3 7.7

EBITDA reported 12.6 40.0 217.3%

In the 2021 period, the Food Delivery Brands roup reported an increase in chain sales (which
includes the total sales of own outlets, franchisees and master franchisees) of 15.7% at fixed
exchange rate to Euros 1,133.6 million, compared with Euros 997.5 million in the same period of
2020 (excluding discontinued operations in Poland). Revenues increased by 10.6% to Euros 393.4
million, compared to Euros 355.8 million in the same period of 2020, due to the economic uptick
following the relaxation of pandemic restrictions, especially from the second quarter onwards, with
significant growth in sales, both in our own outlets and in royalty income, and the sale of dough and
other supplies to our franchisees as a result of the gradual return to normality.

EBITDA reported in 2021 amounted to Euros 40.0 million, compared with Euros 12.6 million in
the same period of 2020 (+217.3%). Adjusted EBITDA, excluding non-operating and non-recurring
costs, amounted to Euros 49.3 million, compared with Euros 29.6 million in the same period of 2020
(+66.4%).

This strong growth in adjusted EBITDA, exceeding the estimate given to the market, has been
possible thanks to the gradual recovery of activity in the existing network of outlets, as well as the
strong expansion carried out during 2021, which has resulted in the net opening of 120 new
restaurants during this financial year.
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TASTY BIDCO, S.L.

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Consolidated Directors’ Report

EMEA

Chain sales in EMEA increased by 6.8% in the current year to Euros 593.5 million, compared with
Euros 556.1 million in the same period of 2020 (excluding the discontinued operation in Poland).

Growth was recorded in the Iberian peninsula from the second half of the year, with a recovery in
activity thanks to actions in the area of sales policies and the focus on products and service.

Rest of Europe: Sales in Ireland have grown month on month throughout 2021 showing a clear
recovery in consumption and a successful commercial policy.

LatAm

Chain sales in LatAm increased by 27.2% in the year to Euros 540.1 million, compared with Euros
441.4 million in the same period of 2020.

A clear recovery in activity in all countries, especially from the second quarter onwards. At 31
December 2021, 99% of outlets in the region were operational, although, as in EMEA, still subject
to significant opening hours and service constraints.

M&A

In 2021, the call option on 25% of Pizza Hut's equity in Mexico, which was held by our minority
partners and previous owners of the operation in the country, was exercised. Following this
acquisition, the Food Delivery Brands Group now controls 100% of our Pizza Hut subsidiary in
Mexico, one of the markets with the highest growth potential in the restaurant sector in Latin
America.

Expansion of the outlet network (continued operations)

At 31 December 2021, the Group operated 2.552 outlets belonging to the Telepizza and Pizza Hut
brands, of which 1.223 were located in EMEA and 1,329 in LatAm. This figure compares with a
total of 2,446 outlets on 31 December 2020.

During 2021, there was a notable expansion of the network of outlets, with the opening of 160
outlets, of which 70 are located in EMEA and 90 in LatAm. A number of outlets have been closed
to optimise the network, with a net increase of 106 outlets in 2021.

Outlook for 2022

The Group expects a gradual return to normality with a recovery in activity around 2021, as the
restrictions associated with the pandemic are gradually lifted in the various markets in which we
operate.

However, it is difficult to assess what the impact on the recovery will be due to strong growth in
inflation and energy prices, supply chain tensions and general uncertainty as a result of geopolitical
tensions in the wake of the war in Ukraine.
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The intensity and duration of these factors may have a very significant effect on the economy, and
thus on consumption, which could affect the strength of the expected recovery, once the effects of
COVID are overcome.

The Group continues to work on short- and medium-term actions to minimise the possible adverse
effects of the aforementioned risks, as well as to accelerate the optimisation of its operating
processes and the development of its digital capabilities to adapt to the new needs and habits of
consumers.

Risks and uncertainties

The main risks to which the Group is exposed are derived from the level of consumer spending and
the status of the restaurant market in each country in which we operate.

The Group’s activities are exposed to various financial risks: market risk (including currency risk,
fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.
The Group’s global risk management programme focuses on uncertainty in the financial markets
and aims to minimise potential adverse effects on the Group’s profits. The Group therefore uses
derivatives to mitigate certain risks.

Liquidity risk

The Group’s liquidity policy consists of arranging credit facilities and holding marketable securities
for a sufficient amount to cover forecast requirements, making financing available and enabling it
to settle market positions relating to short-term investments immediately, thus ensuring that this
financial risk is minimised.

Credit risk

The Group is not exposed to significant credit risk because this risk is not heavily concentrated, both
cash placements and derivative contracts are with highly solvent entities, the average collection
period for trade receivables is very short and customers have adequate credit records, which reduces
the possibility of bad debts.

Innovation
The Group works constantly to create, develop and improve all its products, taking consumer
preferences into consideration at all times and working with optimum ingredients that enable us to
provide balanced products in terms of taste and nutritional composition. Quality is a key factor in
this process and rigorous control measures are followed when approving new suppliers, thereby
guaranteeing maximum product and service quality to outlets.
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Acceptance tests are another decisive factor in research, development and innovation work. These
tests are carried out with market research companies and aim mainly to gauge customer opinion and
ensure product acceptance. They also incorporate the opinions and experience of personnel from
other departments in the Company, such as operations and marketing. The entire testing process is
based on suggestions regarding product preparation and the names, ingredients and presentation of
different products.

The international area benefits from research, development and innovation work performed in
Spain, and also receives support in the local development and testing of products.

Transactions with own shares

There have been no transactions with own shares.

Average supplier payment period

The average supplier payment period of the consolidated Spanish companies is 110 days, and
actions are being implemented to facilitate reverse factoring lines in order to reduce this average
payment period.

Non-financial Information Statement

The non-financial information required pursuant to Spain’s Law 11/2018, of 28 December 2018,
concerning non-financial reporting and diversity, is presented separate from this Consolidated
Directors’ Report, in the “2021 Non-Financial Information Statement”, a document which is
available on the website www.fooddeliverybrands.com.

Events after the reporting period

The current geopolitical and economic uncertainty as result of the conflict in Ukraine is causing a
general increase in the prices of raw materials and energy products, as well as disruptions in the
supply chains, which could affect the Group's businesses. Although the Group would pass on such
increases to the franchisees and the consumers, it could be hampered by the duration and intensity
of this environment and the capacity of the markets to absorb it.

At the date of authorization for issue of the consolidated annual accounts, it is not possible to make
a reliable estimate of the effects resulting from this situation. During 2022, the Parent’s directors
will assess the impact of the aforementioned events on the equity and financial position at 31
December 2022 and on the results of operations, including assets impairment, and cash flows for
the year then ended.

Alternative performance measures

This report includes various financial and non-financial metrics used to better explain the
performance of the Group’s business.

 Chain sales: Chain sales are the retail sales of our own outlets, plus those of the franchised
outlets and master franchisees.
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 LFL sales growth: LFL growth is chain sales growth after adjustments for openings and
closures of outlets and at fixed exchange rate.
o Adjustment. If an outlet has been open for the entire month, we consider it to be an
“operating month” for the outlet in question; if not, that month is not an “operating
month” for that outlet. LFL sales growth only takes into account the change in an
outlet’s sales for a given month if that month was an “operating month” for the
outlet in the two periods being compared. The scope adjustment is the percentage
variation between two periods resulting from dividing (i) the variation between
system sales excluded in each of these periods (“chain sales excluded”) because
they were obtained in operating months that were not operating months in the
comparable period by (ii) the chain sales for the prior period as adjusted to deduct
chain sales excluded from such period (“adjusted chain sales”). This gives the
actual changes in chain sales between operating outlets, eliminating the impact of
changes between periods due to outlet openings and closings.

o Fixed exchange rate. We calculate the system’s LFL sales growth on a constant
currency basis to eliminate the impact of changes between the Euro and the
currencies in certain countries where the Group operates. To make this
adjustment, we apply the average monthly exchange rate in Euros for the most
recent operating month in the period to the comparable operating month of the
previous period.

 EBITDA: EBITDA is earnings before interest, tax, depreciation and amortisation.

 Adjusted EBITDA: Adjusted EBITDA is EBITDA adjusted for non-operating costs,

other adjustments that have no impact on cash flow, non-recurring costs relating to
severance pay linked to restructuring, non-recurring costs relating to COVID-19, the
partnership with Pizza Hut and the new corporate structure and refinancing.

 Non-operating costs: Expenses, linked mainly to onerous leases, which are not operating
leases.

 Non-recurring costs: Extraordinary expenses linked to the establishment and

development of the partnership with Pizza Hut (strategic consultancy, legal expenses and
others), also including extraordinary expenses linked to setting up the new corporate
structure (financial consultancy, legal expenses and others), extraordinary expenses
relating to COVID-19, costs associated with outlet closures in mergers and acquisitions,
severance pay relating to restructuring and extraordinary expenses as a result of the
Group’s refinancing and new financial debt.
 TASTY BIDCO, S.L.
AND SUBSIDIARIES
SIGNATURE PAGE

The Board of Directors of the Company TASTY BIDCO, S.L.U. in the meeting held on 24 March
2021 and in compliance with the requirements set out in article 253.2 of the Spanish Companies
Act and in article 37 of the Code of Commerce, draw up the consolidated annual accounts and the
consolidated management report of TASTY BIDCO, S.L.U. and subsidiaries corresponding to
fiscal year beginning on 1 January 2021 and ending on 31 December 2021. The consolidated
annual accounts are formed by the annexed documents preceding to this page.

Mr. Jacobo Caller Celestino Mr. Nicolás Jiménez-Ugarte Luelmo

Board Chairman and Natural person representing
Chief Executive Officer ARTÁ CAPITAL SGEIC, S.A.U.

Mr. Óscar Gaitán Salazar Mr. Víctor Culebras Yabar

Board Member Board Member

Mr. Miguel Carlos Abelló Gamazo Mr. Gabriele Questa

Natural person representing Board Member
NUEVA COMPAÑÍA DE INVERSIONES, S.A.

Mrs. Stella Esther Rachel Amar-Cohen Mr. Jorge Lluch Pauner

Board Member Board Member

Mr. Manuel Echenique Sanjurjo

Secretary

Manuel Echenique Sanjurjo, in my condition of Secretary non-director of the Board of Directors,

hereby certify that the signatures which are above the names are authentic and corresponds to the
members of the Board of Directors of the Company.