(all figures in EUR millions unless stated otherwise) Consolidated Directors’ Report for the year ended 31 December 2019 AmRest Holdings SE 28 FEBRUARY 2020 Net 1 AmRest Group Consolidated Directors’ Report for the year ended 31 December 201 9 (all figures in EUR millions unless stated otherwise) 2 AmRest Group Consolidated Directors’ Report for the year ended 31 December 201 9 (all figures in EUR millions unless stated otherwise) Contents LETTER TO THE SHAREHOLDERS ........................................................................................................................................ 4 FINANCIAL HIGHLIGHTS (CONSOLIDATED DATA) ........................................................................................................... 6 GROUP BUSINESS OVERVIEW .............................................................................................................................................. 7 FINANCIAL AND ASSET POSITION OF THE GROUP ...................................................................................................... 12 BRANDS OPERATED BY THE GROUP............................................................................................................................... 21 KEY INVESTMENTS .............................................................................................................................................................. 25 PLANNED INVESTMENT ACTIVITIES ................................................................................................................................. 27 SIGNIFICANT EVENTS AND TRANSACTIONS IN 2019 ................................................................................................... 28 EXTERNAL DEBT ................................................................................................................................................................... 29 SHAREHOLDERS OF AMREST HOLDINGS SE ................................................................................................................. 29 CHANGES IN THE PARENT COMPANY’S GOVERNING BODIES .................................................................................. 29 CHANGES IN THE NUMBER OF SHARES HELD BY MEMBERS OF THE BOARD OF DIRECTORS ......................... 30 TRANSACTIONS ON OWN SHARES CONCLUDED BY AMREST .................................................................................. 30 DIVIDENDS PAID AND RECEIVED ..................................................................................................................................... 31 AVERAGE PERIOD OF PAYMENT TO SUPPLIERS ........................................................................................................... 31 SUBSEQUENT EVENTS ........................................................................................................................................................ 31 FACTORS IMPACTING THE GROUP’S DEVELOPMENT ................................................................................................. 32 BASIC RISKS AND THREATS THE GROUP IS EXPOSED TO ........................................................................................... 32 ACTIVITY IN RESEARCH AND DEVELOPMENT AREA ..................................................................................................... 37 FINANCIAL DATA OF AMREST FOR 3 AND 12 MONTHS ENDED 31 DECEMBER 2019 .......................................... 37 NON-FINANCIAL INFORMATION STATEMENT OF AMREST HOLDINGS SE FOR 2019 .......................................... 40 INTRODUCTION ............................................................................................................................................................................................ 41 AMREST’S BUSINESS MODEL AND OPERATIONS IN 2019 ................................................................................................................... 41 CSR STRATEGY, STAKEHOLDERS AND MATERIALITY TOPICS .............................................................................................................. 46 FOOD-RELATED ISSUES ............................................................................................................................................................................... 48 ENVIRONMENTAL ISSUES ........................................................................................................................................................................... 53 EMPLOYEE ISSUES ........................................................................................................................................................................................ 59 SOCIAL ISSUES .............................................................................................................................................................................................. 66 KEY NON-FINANCIAL FACTORS ................................................................................................................................................................. 70 RISK MANAGEMENT AND NON-FINANCIAL RISKS ................................................................................................................................ 73 ANTI-CORRUPTION POLICY ........................................................................................................................................................................ 75 HUMAN RIGHTS POLICIES .......................................................................................................................................................................... 76 GRI STANDARDS CONTENT INDEX ........................................................................................................................................................... 77 ANNUAL CORPORATE GOVERNANCE REPORT OF LISTED COMPANIES ................................................................. 80 SIGNATURES OF THE BOARD OF DIRECTORS ............................................................................................................. 142 3 AmRest Group Consolidated Directors’ Report for the year ended 31 December 201 9 (all figures in EUR millions unless stated otherwise) LETTER TO THE SHAREHOLDERS Dear Shareholders, It is a great pleasure for me to present herein the AmRest Holdings SE financial report for the full year 2019. It was a year characterized by meaningful strategic and operational progress and by organizational changes in preparation for the company’s continued future success. The appointment of the new CEO and several members of the executive team set the tone for our strategy to build on the foundations focused on operating a portfolio of class-leading brands, employing the best and most committed people in the industry, and leveraging the scale we have gained across the markets where we are active. During the company’s annual strategic offsite meeting, the Board of Directors established the priorities for the coming years, which include accelerating organic expansion through franchisees and a disciplined mergers & acquisitions strategy; increasing profitability, mainly in Western Europe; continuing our efforts to consolidate leadership in the home delivery segment; maintaining healthy leverage levels; offering our employees exciting growth opportunities; and continuing to support our corporate social responsibility initiatives. The purpose of all this is to transform AmRest into the leading and most profitable restaurant operator in Europe. The mindset of growth is deeply ingrained in every single employee and evident in actions at every level, from executive to store management. We have successfully adapted to an environment of constant change and cost headwinds, while continuing to expand our business at a dynamic pace and to strengthen our leadership position across markets and roles within the organization. AmRest’s operational skills and execution at the restaurant level have been well supported by our initiatives focusing on digitalization, efficient supply chain management, and strategies in online food delivery, all of which contributed to another year of solid performance. Consolidated revenue increased by 27% year over year, to EUR 1 962 million; even adjusting for recently acquired businesses, revenue grew 16.4%. The group’s comparable EBITDA (excluding IFRS 16) grew 43% and reached EUR 248 million. In 2019 the company opened 264 new restaurants, for a total of 2,339, and we are well positioned to accelerate the pace of organic expansion in the upcoming years. We see substantial room for growth and are confident that our teams are capable of supporting and executing our plans very well. Following a series of acquisitions over the course of the past few years, in the last twelve months we focused on the integration and reorganization of the acquired businesses in order to optimize business setup and models, leverage identified synergies, and prepare the brands for accelerated growth. Importantly, we have successfully aligned the businesses we have acquired with AmRest’s communication, strategy, and culture. Going forward, we will begin to see the benefits of integration efforts that we embarked on last year and continue to unlock additional synergies focusing mainly on supply, product development, procurement, and services. The Digital and Delivery division has been an important contributor to growth over the past year and will remain an important focus for us going forward. We have enhanced our capabilities