History 2016 / 2017
It is necessary to go back 17 years to find growth rates similar to those registered by the Portuguese economy in 2017. Gross Domestic Product (GDP) grew 2.7%, thereby achieving its highest rate since 2000, when the economy grew 3.8%.According to the National Institute of Statistics (INE), this value is 1.1 percentage points higher than the previous year, having reached, in nominal terms, 193 billion euros, as a result of the increase in the contribution from
domestic demand. An economic scenario felt, quite directly, by various sectors, namely the hotel sector, which has largely benefitted from tourism, with Portuguese hotels registering an average annual occupation rate of 71%, up three percentage points since 2016.
Although tourism has been influential, Portugal is also in fashion for those who live here and are again beginning to consume at pre-crisis levels. The number of clients at our restaurants, where many Portuguese honour us with their choice every day, has also bounced back to what we registered before. They are demanding customers in every respect, from product, service and cleanliness, to the general ambience of the restaurant. These clients increasingly share their experiences through comments or images over social networks, which have become an important asset to promote our products.
This is also a way of assessing the satisfaction of our customers who, although they value an overall experience, will continue to pay close attention to good value for money.
In the Iberian Peninsula growth remained quite favourable and that has had a positive impact on the Group’s results. Angola, however, registered a reversal of its growth trend, as of the second quarter.
The acquisition of the Eat Out Group contributed to a higher volume of service provision and almost all the segments registered positive growth, above the average of the market, with special emphasis on “Counters”.
The businesses grouped under “Catering and Concessions”, with the best relative performance, benefitted from a high number of major events and increased traffic in the spaces under concession that we operate, namely airports.
The fourth quarter consolidated the sales growth trend, whereas in Portugal there was an impact on the consolidated sales of the first semester, which we estimate at around 4.5% due to the reduction in VAT during 2016.
The implementation of the refurbishment and opening plan, which applied to all of the Group’s brands, is noteworthy.
Regarding Eat Out Group, it is important to highlight the opening of a new unit awarded in the public tender of the Madrid Airport, the participation in the public tender of Barcelona Airport, the five units in a group awarded following the public tender of the Gran Canaria Airport and the participation in the public tenders for Barcelona and Málaga.
In Angola, business evolution remained very much dependent on the price of oil and its impact on economic activity, in a year of elections which resulted in the replacement of President Eduardo dos Santos. During the year inflation reached very high levels, which led to a significant drop in consumption, since income did not evolve in a positive way, the Kwanza not having been devalued as expected. Notwithstanding, a new cycle began after the August elections and the government gave signs of a strategy for manufacture, decreasing dependency on imports and oil, creation of conditions for increasing foreign investment, compliance and a return to the international markets.
In February, the Instituto Nacional de Estatística (Portuguese Statistics Institute) disclosed its estimate for 2016, which projected a growth in the Portuguese economy of 1.4%, attributing the acceleration in GDP seen in the last quarter to the increase in the contribution from domestic demand, as a result of investment recovery and a more pronounced growth in private consumption.
As such, the positive trend was consolidated, with an impact on the Ibersol Group’s performance, as private consumption heightened in a quarter that by nature is very important for Modern Restaurant Services.
In this context, the Ibersol Group continued to show a notable recovery compared to the years of external intervention, an evolution that was somewhat jeopardised by the effect of the exchange conversion of the sales in Angola, as a consequence of the devaluation of the local currency. On the other hand, in July the application of an intermediate VAT rate of 13% on food came into force, which enabled the impact of the rise in tax, which took place in 2012, to be softened.
2016 was also marked by the transformation and evolution of the group’s brands, by openings and refurbishments carried out, and by the pursuit of the selective expansion strategy, especially involving the Pizza Hut and Burger King brands.
2016 showed us the multiple aspects of the Group’s capacity for management, innovation and sustainability.
The example of this management dimension is in the inauguration of 12 new Burger King restaurants, which confirmed the Ibersol Group’s leadership in implementing the brand in Portugal and its presence in Angola, where the Group has become the major player in the Modern Restaurants category, reinforcing the presence of the KFC brand with a further 2 restaurants, as well as a Pizza Hut restaurant.
During the year, the Group had the opportunity to reinforce its presence in the Spanish market by acquiring 100% of the capital of the Eat-Out Group last October.
The Eat Out Group is one of the most important restaurant groups in Spain, with a history dating back more than 25 years and with geographic presence in Spain, Italy and Portugal. It operates in the restaurant business with the Pans & Company, Ribs, Santa Maria and FrescCo brands, and in the Travel business with those and another 13 franchised ones, in 6 airports and 3 railway stations.
With this acquisition, the Ibersol Group became one of the most important restaurant groups in the Iberian Peninsula: 667 restaurants and aggregate system sales of more than 478 million euros reported in 2016.
As cornerstones of a robust customer service, the Group continues to especially focus on the aspects of Quality and Food Safety, which can be seen in the certification of its activity, built upon constant work and the Group’s persistence in its operations, in order to ensure the highest standards to its Customers, as reflected in the recognition and acceptance of its brands and the millions of meals served every year.