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The Group's chain sales grew by 18% during the first nine months of the year compared to the same period last year and by 4.6% compared to the same period in 2019, before the pandemic.

The company is analyzing potential strategic alternatives, both with its creditors and with Yum! in order to strengthen its position in the face of the continued impact of inflation and the economic slowdown.

Madrid, November 25, 2022 - Food Delivery Brands, a leading pizza delivery foodservice group with a presence in 32 countries and 2,350 stores, today reported third quarter 2022 financial results that, despite exceeding pre-pandemic sales, reflect the impact of high inflation and the economic slowdown.

During the first nine months of 2022, the Group recorded chain sales of €958 million, up 17.9% on the same period of the previous year (12.4% at constant exchange rates). Chain sales were 4.6% higher than in the first nine months of 2019, before the arrival of the pandemic. During the third quarter of this year alone, chain sales reached €339.2 million, 16.6% more than in the same period of 2021.

Despite the increase in sales, the business has been impacted by high inflation and adjusted EBITDA2 for the first 9 months of the year stood at €28 million, down 5.8% year-on-year due to the difficulty in passing on the full cost increase to consumers. The company expects EBITDA to fall to EUR 36-39 million at the end of the year, below the estimate made in the first quarter, given the weak sales outlook for the last quarter of the year and the impact of persistent inflation.

• This economic context also had an impact on the Group's liquidity, which stood at 26.5 million euros at September 30, as well as on net debt, which reached 412.7 million euros in the first nine months of the year, 8% more than in the same period of the previous year.

By markets, sales in Spain and Portugal grew by 8.8% during the first nine months of the year compared to the same period of the previous year, although this growth slowed in the third quarter as a result of the drop in consumption and the economic outlook.

In the rest of Europe, sales increased by 0.7% during the first nine months, with Ireland growing at 6.4%.

In Latin America, sales grew 17.4% during the first nine months of the year, with Telepizza growing at 2.5% and Pizza Hut at 19.2%. The effects of the economic slowdown continue to be less visible in the region. However, rising raw material costs and rising wages are starting to affect store profitability and reducing franchisees' interest in opening new restaurants.

During the first nine months of the year, the Group posted a total of 61 net openings globally. However, the lingering effects of the COVID, coupled with inflation and the economic slowdown, have lowered the Group's expansion plans, which foresee a net reduction of up to 20 stores for the full year 2022.

Strategic review

The high inflation and the duration and depth of the economic slowdown are affecting the Group's profitability, as well as that of the franchisees, when they had not yet overcome the impacts derived from the pandemic. All this has led to a deterioration in EBITDA and Cash Flow estimates.

The company has retained Kirkland & Ellis and Uría Menéndez as legal advisors and Houlihan Lokey as financial advisor to analyze potential financial and strategic alternatives with both its creditors and Yum! to address the impact of the adverse market outlook for the remainder of 2022 and 2023 and prepare for future growth.