report 1999 annual - bib.kuleuven.be · 5 Serge Hercberg. Key ﬁgures Systemwide sales in BEF/EUR millions 1999 1998 1997 1996 1995 1999 1998 1999 1998 1999 1998 1997 1996 1995 26

1999 annualreport

Quick, a European challenger1

Message to stockholders 2

Rethinking our business5

Our goal is perfection 7

Mobilizing our workforce – 16,000 challengers9

Becoming a benchmark brand11

Consolidated management report13

Quick and the stock market18

Corporate governance21

Consolidated financial statements25

Quick restaurant locations49

THE STUFF THAT DREAMS ARE MADE OF…

An annual report can reach beyond the numbers and look to the future. It can even be anoccasion for dreams.These men are all Europeans. They are a doctor, a restaurateur, a fashion

creator, a designer and a sociologist. They study our behavior and decipher, anticipate and sometimes

even initiate future trends. Through their work and creativity, they play an essential role in the

development and shaping of our society’s daily life. What do these men think the future holds for fast

service restaurants? In this annual report, François-Xavier Balléry, Frank Fol, Serge Hercberg, Gérard

Mermet and Elvis Pompilio will reveal the secrets and the stuff that dreams are made of…

Key figures

Executive Committee and Board of Directors ¤ (overleaf)

123

45

1François-Xavier Balléry

2Elvis Pompilio

3Frank Fol

4Gérard Mermet

5Serge Hercberg

Key figures

Systemwide sales in BEF/EURmillions

1999

1998

1997

1996

1995

1999

1998

1999

1998

1999

1998

1997

1996

1995

26 435.4

24 946.8

23 457.2

21 507.3

19 550.9

655.3

618.4

14 606.8

11 455.6

8 890.4 10 660.5

10 051.7

8 850.4

Company owned

Franchised

227

172 146

144

254

259 126

13915 764.3 9 182.5

17 060.0 9 375.4

390.8 227.6

422.9 232.4

TOTALBEF

Systemwide number

of restaurants in units

TOTALEUR

CONSOLIDATED HIGHLIGHTS199919981997 99/98

in millionsEUR BEFEURBEFBEFchange in %

655.326 435.4618.424 946.823 457.2 6.0

232.49 375.4227.69 182.58 850.42.1

290.111 701.5281.211 343.610 844.33.2

18.2733.614.2573.1567.828.0

6.3%6.3%5.1%5.1%5.2%-

11.2452.48.0324.7262.439.3

5.5222.23.0120.8(286.9)83.9

1.9%1.9%1.1%1.1%- 2.6%-

1.0040.240.5522.05- 52.89-

30.430.41 228.134.71 400.61 526.8- 12.3

1345 406.11345 405.05 684.3-

4.1%4.1%2.1%2.1%- 4.7%-

0.820.820.760.760.78-

271 136

TOTALBEFBEF

EUR

407

393

385

371

318

Systemwide sales

Sales by company

owned restaurants

Total sales and franchise income

Operating income

as a % of total sales of company

owned restaurants and franchise revenue

Income from ordinary activities before tax

Consolidated net income

as a % of total sales of company

owned restaurants and franchise revenue

Earnings per share (in EUR/BEF)

Net cash from operations before working

capital changes

Stockholders' equity

Return onstockholders' equity

(Net income/Prior year

stockholders' equity)

Gearing ratio

(Net indebtedness/Stockholders' equity)

Net incomein BEF/EURmillions

120.8

222.2

EUR

3.0

5.5

286.9

312.1

597.6

-286.9

312.1

597.6

1999

1998

1997

1996

1995

Board of Directors

Executive Committee

Independent DirectorsMain activityMonth of expiry of term of office

Jacques Marcelin64 years oldChairmanDirector of 3 Suisses InternationalMay 2000

Maurice de Kervenoaël63 years oldDirector of Hermes InternationalMay 2001

Rudi VercruysseDeceased on January 6, 2000

Diego du Monceau50 years oldVice ChairmanDirector of several companiesMay 2001

Chris Van Steenbergen44 years old Managing DirectorMay 2000

Jean-Pierre Bizet52 years oldManaging Director, GIB GROUPMay 2000

Louis Frère47 years oldCFO, GIB GROUPMay 2001

Thomas Meisser56 years oldDirector of several companiesMay 2001

Christian Varin52 years oldManaging Director of COBEPAMay 2001

Roland Vaxelaire43 years oldManaging Director, GIB GROUPMay 2001

1Chris Van Steenbergen (44 /since 07/99) *Managing Director

2Alain Béral(45 / 16)Sales and Operations

3Patrick Glauden(44 / 17)Marketing and Research & Development

4Michel Sellier(49 / 7)Administration and Finance

Roland Higgins(53 /since 01/00)Communication

Eric Bruyninckx(46 /since 04/00)Human Resources

* (Age/number of years with Quick)

Directors nominated by GIB SA

and its main stockholdersMain activityMonth of expiry of term of office

1234

THE STRATEGY OF A CHALLENGER

A business strategy can either copy the leader or make its

own mark. Quick has made its choice.

Because half of the users of hamburger restaurants could

patronize any hamburger restaurant chain without making

a distinction, Quick decided to challenge the market and

provide an alternative, like all those who have proven that

David can still beat Goliath: Apple vs. IBM, The Simpsons

vs. Disney, or Virgin Atlantic vs. British Airways.

Being a challenger means implementing a rigorous and

consistent strategy whose unique goal is to strengthen

profitability.

Rethinking the business, because in order to continually

give customers more satisfaction and pleasure, distinctive

products must be marketed, and we must offer not simply

a restaurant chain, but a place that is warm and friendly.

Each year, Quick launches new products and improves the

diversity of its product range. This also applies to restau-

rant atmosphere, customer reception, service and environ-

mental protection. And speaking of the environment, we

have just introduced a revolutionary packaging that is

100% ecological, biodegradable and recyclable.

Our goal is perfection, because, for a challenger, the

price of innovation is complete mastery over the business.

High standards of quality, monitoring of procedures, opti-

mization of product traceability – these are all initiatives

that contribute to improved profitability.

Mobilizing our workforce: 16,000 challengers, because

the motivation of everyone, if guided by a true vision, is the

greatest stimulus to success.

Becoming a benchmark brand, because to convey your

own values and provide fresh momentum, you have to be

seen by the consumer and bring a new perspective to the

fast service restaurant sector. The latest Quick slogan,

Halte à la routine (Put a Stop to the Routine!), is the first

step of this approach. It signals that consumers can take

pride in identifying with the Quick brand.

1.

Quick, a European challenger

“The year 1999 marked the launch of our business project:Implementation of a true challenger strategy, establishment of our brand’s identity,

and initiation of actions consistent with our ambition”

IN 1999, LAST YEAR’S POSITIVE TREND WAS

CONFIRMED

With like-for-like sales growth of 2.7%, Quick’s year-end

results were noticeably better. Despite a year of adversity,

(dioxin crisis in June, temporary withdrawal of Coca-Cola

products in Belgium in June, December storms in France),

systemwide results showed a marked improvement over

1998: +39% for Income from ordinary activities before tax,

+131% for Income before tax and +84% Consolidated net

income.

The Quick Group in the year 2000 is not the group of the

90s. After two difficult years characterized by economic

stagnation and a food safety crisis, 1999 was the year the

recovery and refashioning of our brand was consolidated.

A NEW STRATEGY THAT WILL LEAVE ITS MARK

In 1999, Quick systematized its challenger strategy, which

now rests on the reinforcement of a policy of innovation

and differentiation, the willingness to create a benchmark

brand that the consumer can identify, the motivation of all

staff and lastly, the constant search for profitability.

A SPRINGBOARD TO THE FUTURE

Our group is entering a new era. We are now going to cap-

italize on our experience, exploit our competencies and

strengthen our positioning on our current markets.

Message to stockholders

“We are now going to capitalize on our experienceand explore other markets.”

Chris Van Steenbergen Jacques Marcelin

Managing Director Chairman of the Board of Directors

3.

We are also going to explore other venues by introducing

our brand in Hungary, a growth market with considerable

potential, where the concept of the fast service restaurant

business is a real added value in the consumer’s everyday

life. Quick will have opened 5 restaurants in Hungary by the

end of 2000.

As we turn this page in our history, we wish to thank all our

stockholders for the confidence shown in us, as well as all

our employees and franchisees whose fighting spirit and

creativity were even more evident, and our suppliers who

helped us along the way.

Each and every one will share in the future success of the

Quick Group and the tomorrow we must build together.

In memoriam Rudi Vercruysse

The Board of Directors wishes to express

its regrets and regard for Rudi Vercruysse,

former Managing Director, GIB Group

restaurants, who passed away on

January 6, 2000.

Rudi Vercruysse, a Quick director since

1985, made a tremendous contribution

to the company’s development for nearly

15 years.

Jacques MarcelinChris Van Steenbergen

Taste, products, the decor of restaurant dining

rooms… differentiation can play a part at several

levels. I would also add esthetics.

Esthetics can transcend cultures,

why not apply it to the world

of hamburgers?

Besides balancing taste, material and color,

why not think of a product’s esthetic quality,

its presentation?

A hamburger is more than a piece of steak

between two slices of bread.

François-Xavier BALLÉRY

FR

AN

ÇO

IS-X

AV

IER

BA

LL

ÉR

Y

Fra

nç

ois

-Xa

vie

rB

AL

LÉ

RY

Stylized hamburger

Twisted French fry

Dessert for two

QUICK, Hamburgers have a right to be

(esthetically) different too!

François-Xavier Balléry, young designer, Reims, France

Soon to graduate from the Ecole Supérieure d’Art et de Design in

Reims, where he specialized in product design, furniture, graphics

and scenography, François-Xavier Balléry has already made a

name for himself with designers the like of Chanel or Issey Miyake.

A winner of the 1999 young designers promotion, sponsored by

the Colbert Committee for Chanel, François-Xavier is obsessed

with an object’s form, its packaging, and how it changes in time

and space. A virtual encounter with the hamburger of tomorrow?

Rethinking our business,for a more creative restaurant service

WITH THE STAR AND THE “INVENTIVES,”

INNOVATION HAS COME TO THE SERVICE

OF TASTE.

Quick is making further innovations and revamping its

product range by offering “classic” recipes, and more

“innovative” or elaborate dishes.

Quick is now offering the “Star,” a new kind of hamburger.

For the first time, a hamburger will come with hot vegeta-

bles smothered in a prepared sauce and served on an old

fashioned bun for a true country taste.

Quick, the first fast service restaurant to offer salads,

is introducing a new product range, the “Inventives”.

These are more subtle mixtures that come close to caterer

salads and which can just as easily accompany or replace

a hamburger.

RESTAURANTS AS LIVING SPACES

With their new “Natural” decors, Quick restaurants are

saying no to the cafeteria style restaurant. The small sitting

room, with its sofa and armchairs, is a significant part of

the effort to improve the welcome and break with the rigid

constraints of past dining areas. The high tables and stools

offer a new kind of comfort to the customer who is alone or

pressed for time. The communal dining tables accommo-

dating 12 to 16 persons are ideal for group interaction.

There is a space for everyone, including children, for whom

we have designed a new play area that is more educational

and friendly.

PACKAGING THAT HAS A GREATER RESPECT

FOR THE ENVIRONMENT

Quick has also decided to differentiate its products in

terms of packaging, thereby demonstrating a concern for

both esthetic and ecological considerations.

The introduction of completely new packaging in late 1999

is a major step.

Meeting the latest European food contact standards, this

packaging was honored at the Trophées ‘99 Entreprises et

Environnement (’99 Business and Environment awards)

awarded by Enjeux Les Echos and PriceWaterhouseCoopers.

The packaging, which comprises three layers of paper,

55% of which is recycled, includes an internal micro-corru-

gated layer that is 100% recycled. It is 100% biodegrad-

able and will decompose by itself within three days in a

humid environment.

Easily compacted, this packaging will also reduce the vol-

ume of Quick’s waste product by 25%. Overall, this pack-

aging is far more ecology friendly than its predecessor.

Quick, like its clientele, has opted for the environment.

5.

“Thanks to our innovation, our customers now see that we really are different.”

6.

CRISIS FROM WHICH TO LEARN

If 1999 was a year of concern for consumers (dioxin, Coca-

Cola), it nevertheless demonstrated that a quality stan-

dards policy, when you are responsible for serving 600,000

daily meals, can only be achieved as the result of a com-

mon approach involving a full range of players. Its success

comes from flawless traceability and the supervision of

multiple and equally important parameters: raw materials,

suppliers, packaging, delivery, human resources, equip-

ment, finished products, service and customer information.

100% PURE BEEF MUSCLE

Quick guarantees its customers 100% pure beef hamburg-

ers, whole muscle meat from animals with the VBF stamp

for France and Belgian origin clearance for Belgium and

Luxembourg.

TRACEABILITY: TASTE, QUALITY

AND SAFETY ASSURANCE

Each meat supplier uses a labeling procedure that provides

the name and type of product, the date of processing using

a tamper-proof system, the consumption expiry date, the

lot number, and identification of the machine used for pro-

cessing.

This labeling system means that hamburger meat can be

traced through the date and time of processing, identity of

the individual responsible for the mix, tag number of the

carcass used, percentage of fat and the temperature at the

time of processing.

All of Quick’s meat suppliers are subject to this traceability,

which means that customers are guaranteed taste, quality,

and safety.

7.

Our goal is perfection:traceability and high standards of quality to guaranteeconsumer safety

“Consumer safety is our number one concernIt is a constant priority that combines taste, quality and safety”

9.

SALES TRAINING - A CORNERSTONE TO SALES

GROWTH

In conjunction with the internal motivation policy with

respect to our business goals, Quick employees have been

receiving new sales training since September 1999. In

addition to enhancing the professional competencies of its

staff, the Quick Group expects to enjoy a substantial boost

in sales through this program. Some 30 restaurants now

have access, and this will be extended to the entire Group

within 24 months. Overall, training represents 5% of the

total payroll cost.

FRENCH LEGISLATION IN REGARD TO THE

REDUCED WORKWEEK

With 16,000 employees under its banner (company owned

and franchise restaurants), of which 12,000 are in France,

Quick is duty bound to be a model employer.

Since Quick anticipated the 35-hour law in France on

November 1, 1999, it will benefit from state incentives. As

part of an industry-wide agreement, Quick signed a com-

pany agreement that provides for the reform of working

hours.

In September 1999, a restaurant productivity audit was

conducted in order to neutralize the impact of the reduc-

tion in hours. The audit enabled us to develop a method for

improving productivity based on a better organization of

units. Successfully tested in the last quarter of 1999, the

method will be gradually applied to company managed

restaurants in 2000.

RECRUIT AND RETAIN OUR TEAMS SO AS

TO PRESERVE OUR KNOW-HOW

In 1999, Quick developed a policy to assist in team recruit-

ment and retention, in order to reduce the turnover rate,

which is traditionally high in the fast service restaurant

sector. Supervisory teams now receive human resources

training, which contributes to their competency develop-

ment and the pride of belonging to our Group.

Mobilizing our workforce: 16,000 challengers

“Our teams are our strength: training will give us an even greater impact”

QUICK FRANCHISEES: THE SYNERGY

OF EXPERIENCE GUARANTEES SUCCESS

Quick franchisees are true challengers and entrepreneurs

who seek personal and professional fulfillment alongside a

group of European origin and culture that has kept a

human face. In 1999, Quick franchisees played an active

role in implementing the Group’s policy. As partners, they

were closely associated with the development of various

brand innovations thanks to discussion groups and an

ongoing and special dialogue with a franchiser who lis-

tened to their views.

Daily players in shaping Group policy, these business lead-

ers are deeply motivated people who contribute to the

company’s growth through their energy and appetite for

challenge.

They benefit from the support and advice of specialized

consultants for techniques governing production, manage-

ment, set-up of business operations and local marketing.

It is this synergetic use of talent that transforms Quick into

a vital and proactive community.

QUICK CREW MEMBER AND PROUD OF IT!

In order to better know and motivate its restaurant crews,

Quick conducted a study last June involving all 15,000

restaurant employees working in France, Belgium and

Luxembourg. The results are laudatory. Employees

say they are happy to work at Quick because of the

atmosphere. Quick is a different kind of employer where

workers clearly feel a certain amount of freedom and a

sense of belonging to an extended family rather than a

company. The criteria distinguishing Quick from its main

competitor are its “dynamism” and “friendlier atmosphere,”

which is mainly conveyed through “less standardization,”

and “more human behavior.”

Quick is above all a company with a strong European con-

nection, according to 61% of crew members. Among the

company’s other strengths, crew members cited its “pro-

fessionalism,” through “customer service quality” (recep-

tion, speed) and “product quality.”

Moreover, 74.4% would recommend Quick to family mem-

bers seeking employment, and 83.5% would refer their

friends to Quick for meals.

LA VISION DE ELVIS POMPILIO

Target a hip clientele,

a leader clientele that will

attract a large public following.

Look for buzzwords and concepts

that spread the Quick message.

Elvis POMPILIO

ELV

IS P

OM

PIL

IO

Elvis Pompilio, hat designer, Brussels, Belgium

Known internationally, Elvis Pompilio opened his first showroom in

Brussels almost 15 years ago. He has since opened boutiques in

Antwerp, Paris, and London and his products are distributed

worldwide. He has some of the most prestigious US department

stores as clients and 200 points of sale for luxury items in Japan.

His market niche: Hats designed by craftsmen according to haute

couture principles.

I GET A QUICK OUT OF YOU!…Steering towards an absolute functionality – minimalism.

Introduction of subtle lighting in the dominant monochrome.

Simplicity in the spatial arrangement, without embellishment,

could give a luxurious tone to the atmosphere similar to the

Hempel Hotel in London.

The furniture - radical. Concrete or wooden seats. In this

environment of bare essentials, why not think of “silver”?

Staff…The essential uniform - with a small cap. The colors are a

study in sober contrasts: alternating black/white or dark

grey/white. And to top it off - a logo with metallic silver high-

lights, embroidered or printed.

Food…Introduce vegetarian menus and other dishes adapted to the

individual needs of consumers. A computer could create

menus tailored to the characteristics of each customer:

height, weight, age, sex, build, tastes, etc.

Offer products that taste like meat, but that are vegetable-

based - chicken and steak alternatives.

When will Quick buy biological farms?

And most of all, real BELGIAN fries

Concept…Always fast, but “cool,” to also address a clientele with great

aspirations that is attracted to fashion and culture and look-

ing for balance and good taste.

Service that is always fast, even during peak hours.

Advertising…Get inspiration from the Absolut Vodka campaigns. Full page

ads in the top magazines, Vogue, Face, Dutch. Target a hip

clientele, a leader clientele that will attract a large public fol-

lowing. Look for buzzwords and concepts that spread the

Quick message.

Parties…Organize parties for particular events. Quick parties for

adults, in a cool environment, with different menu options, for

example. Quick restaurants could be the scene for theme

nights.

And continuing in this party veinGet a kick from Quick!

Elv

isP

OM

PIL

IO

Becoming a benchmark brand

STRATEGIC POSITIONING

The ambition of Quick is to become a benchmark brand, a

brand which consumers will be proud to identify with and

to which they will become attached for the values it conveys.

“HALTE À LA ROUTINE”

(PUT A STOP TO THE ROUTINE!),

The advertising campaign slogan makes a pitch to con-

sumers and encourages them to change. The campaign

signature phrase Les hamburgers aussi ont droit à la dif-

férence (Hamburgers have a right to be different too!)

stresses Quick’s stand against standardization and

monotony in a parody of a political protest.

VISIBILITY CAMPAIGN

The campaign was kicked off with strong visuals of over

31,000 posters in France and Belgium. This translates into

80% of the French population 15 years of age and over

coming into contact with the campaign 73 times, and 68%

of the Belgian population in the same age group being

exposed 30 times. The TV commercial was broadcast

642 times, which means that 75% of the 15- to 34-year old

target audience saw it 4 times in France and 7 times in

Belgium. These efforts led to a significant increase in the

cash register receipt count during the launch of the Star

hamburgers and above all, an awareness of the Quick

brand that was remarkable. According to an Ipso impact

analysis, the commercial and the posters had a great effect

on the general public since 63% of those interviewed

remembered the advertising and associated it with Quick

(compared with an average for all commercials of 53%

in France and 37% in Belgium). Better still, 90% of 15- to

60-year olds stated that they liked the campaign, which

seems to be the general consensus.

11.

“By developing a true territory and communicating our visions, we will become the brand of choice for our customers”

13.

Consolidated management report

A new brand differentiation strategy was developed in the

second half of the year. The first effects are already being

felt since the Star product line represents 25% of products

sold.

On a like-for-like basis, systemwide sales rose 2.7%. Simi-

larly, the number of customers also rose from the previous

year. For a second consecutive year, like-for-like sales

were up.

Results were appreciably better than last year. Income

from ordinary activities was up by 39%, while net income

surged by 84%.

EXTENDING THE RESTAURANT POOL

At December 31, 1999, the Quick Group numbered

407 restaurants, 67% of which operated under franchise.

Quick pursued an expansion policy that is based on:

¤ site selection;

¤ restaurants with drive-in facilities;

¤ franchisee operations.

In 1999, Quick opened 18 new restaurants with 14 in

France, 3 in Belgium and 1 in Luxembourg. Some 80% of

these new additions have drive-in facilities.

Quick also closed down 4 restaurants in France, where the

retail conditions meant that profitability could no longer be

assured. Moreover, Quick decided to close the two restau-

rants still in operation in the Netherlands and to withdraw

from this market where it failed to reach a critical mass

soon enough. The withdrawal is effective from the end of

January 2000.

The tables below show changes in the number of restau-

rants by operating format and principal market.

BENELUX COUNTRIES Company owned Franchised Total

Beginning of the year 32 78 110

Restaurants opened 1 3 4

Restaurants franchised* -2 2 0

Disposals - - -

End of the year 31 83 114

FRANCE Company owned Franchised Total

Beginning of the year 107 176 283

Restaurants opened 5 9 14

Restaurants franchised* -3 3 0

Disposals -4 - -4

End of the year 105 188 293

* Net

Taking advantage of a favorable economic climate,Quick pursued the restructuring initiated in mid 1998

¤ Like-for-like sales remained constant, whereas sales of

franchised restaurants were up. This difference is partly

explained by the older age, on average, of company owned

restaurants and partly because most of these restaurants

are set up in city centers and shopping malls, which means

that establishing a base requires more time than is the

case for drive-in restaurants.

Sales of franchised restaurants and franchise

revenue

Sales of franchised restaurants rose 8.2% thanks to the

opening of 12 new restaurants, the franchising of 8 compa-

ny owned restaurants and the 4.4% increase in like-for-like

sales. Franchise revenue, which includes royalties and

management contract and property rental payments that

can vary depending on the type of franchise contract, rose

7.6%.

SALES TRENDS

Systemwide sales

Systemwide sales, excluding taxes, encompassing both

company and franchise owned restaurants totaled

BEF 26,435 million for the year (BEF 24,947 million in 1998).

This 6% increase is partly attributable to a 2.7% increase

in like-for-like basis sales and partly to the 40 new restau-

rants opened in 1998 and 1999, achieved despite the clo-

sure of 18 restaurants during the same period. The

increase stems from the implementation of a strategy

aimed at differentiating the brand, and attracting and

retaining new customers.

Sales of company owned restaurants

Company owned restaurants generated sales of BEF 9,375

million in 1999 (BEF 9,182 million in 1998).

This 2.1% increase can be attributed to:

¤ Sales for a full year from the prior year’s openings;

Systemwide sales in BEF millions

1995

1996

1997

1998

1999

12 0

14.2

12 8

92.6

11 1

48.5

8 14

8

5 70

1

TO

TA

L

Analysis of Quick Restaurants by type in 1999

27.8 % Dowtown

10.6 % Shopping mall

2.1 % Other: Motorways, train stations, kiosks

59.5 % Drive-in

13 7

49

15 5

05

17 7

08.4

19 0

90.9

20 1

58.1

Company owned Franchised

8 04

8

7 35

7

6 55

9.9

707

6.7

726

5.5

3 75

0.1

4 16

7.4

3 45

8.3

3 30

7

3 18

9

TO

TA

L

5 80

2

6 00

2

5 74

8.8

5 85

5.9

6 27

7.3

2 61

3

2 69

5

2 29

0.5

2 10

5.8

2 10

9.9

FRANCE BENELUX

1995

1996

1997

1998

1999

15.

ANALYSIS OF RESULTS

¤ Operating income reached BEF 734 million versus BEF

573 million in 1998, an increase of 28%. This improvement is

due to the increase in like-for-like sales and the reduction

of other operating expenses, which more than offset higher

business and general expenses, generated by the new

business strategy, new product launch and improved

restaurant support.

Results have been interpreted according to a change in the

presentation of accounts in 1999 designed to enhance the

analysis of operating profitability.

Income and expenses considered as extraordinary until the

end of 1998, particularly provisions raised or released for

restaurant closing costs and reductions in business value,

have been recorded in operating profit since January 1,

1999. This change resulted in the recording of income net

of operating expenses amounting to BEF 35 million in 1999

which, according to the previous presentation, would have

been recognized as extraordinary.

¤ Net financial expenses stood at BEF 193.6 million, up by

14.2% over 1998, an increase which stems from higher

interest rates and net indebtedness.

¤ Income from ordinary activities before tax rose 39% to BEF

452 million versus BEF 325 million in 1998. This is after tak-

ing into account goodwill amortization of BEF 87.6 million

(BEF 79 million in 1998).

¤ Extraordinary expenses amounted to BEF 81 million, com-

pared with BEF 164 million in 1998. They cover the cost of

ceasing business activity in the Netherlands and various

provisions.

¤ Net income stood at BEF 222 million, compared with BEF

121 million in 1998. This is attributable to the tax expense

for the year, which included extraordinary tax adjustments

amounting to BEF 22 million, and the reversal of 1998

deferred tax assets whose future use was uncertain.

¤ Cash from operating activities before working capital

changes was BEF 1,228 million, down 12.3% from the pre-

vious year. The drop is due to expenses disbursed in 1999

but provided for during previous years and the absence of

dividends paid by equity affiliates in 1999.

Analysis of systemwide sales

in BEF millions

France

Company owned Franchised Company owned Franchised

3 750.1

2 105.8

7 076.7

12 014.2

1998

France

4 167.4

2 109.9

7 265.5

12 892.6

1999

49 %

28 %

15 %

8 %

Benelux Benelux

49 %

27 %

16 %

8 %

CAPITAL EXPENDITURE AND FINANCING

Group investment during the year totaled BEF 1,322 million

(BEF 1,621 million in 1998), of which BEF 353 million was

spent in the Benelux countries and BEF 969 million in

France. Expenditure was mainly concentrated on new

restaurants and the refurbishment and remodeling of exist-

ing restaurants. Cash from operating activities was used to

finance a large part of this investment.

Net indebtedness totaled BEF 4,409 million as at December 31,

1999, against BEF 4,109 one year previously.

The debt/equity ratio stood at 0.82%, compared with 0.76%

in 1998.

Stockholders will be asked to approve distribution of the

following dividend per share of common stock at the Annual

General Meeting:

The total dividend distribution of BEF 220.9 million

(BEF 206.1 million in 1998) will fall due for payment on

May 11, 2000.

EURO

A structure was put into place in 1997 to oversee the intro-

duction of the euro. In the opinion of the Board of Direc-

tors, the measures implemented will ensure continuance of

the business. Costs have been recognized as and when

commitments were made.

1995 1996 1997 1998 1999

Systemwide Employment(full time equivalent)

8 83

8

7 55

9 9 13

8

9 29

5

9 77

3

1999 contribution to income from ordinary activitiesin BEF millions

France Benelux Total

540

104.

7

435.

3

Ordinary stock and AFV stock

1999 1998

GROSS NET* NET*

in BEF in EUR in BEF in EUR BEF

40.00 0.99 30.00 0.74 28.00

* after deduction of 25% withholding tax

The restaurant of the future will offer quality

dishes at an affordable price and be part of

a well-advertised chain.

Frank FOL

FR

AN

K F

OL

The future of independent restaurants is uncertain. The ne-

cessary investments are increasingly significant and finding

trained staff is becoming difficult. Added to this is a public

that is more cost conscious even though it eats out more

often. Top-flight restaurants will continue to exist, but for a

very specific clientele.

In these circumstances, how do we secure the future of our

culinary heritage? How de we transmit the taste for gastrono-

my and regional specialties to younger generations?

The answer is simple – by opening theme restaurants that are

part of well-positioned chains. Only this type of restaurant

can reconcile general public accessibility and our gastronom-

ical tradition.

In Europe, and particularly in Belgium and France, this tradi-

tion puts us one step ahead of the rest of the world. As a

restaurateur and “gastronomic militant”, I am not against fast

service restaurants, as long as notions of freshness, health

and culinary culture are given priority. This type of restaurant

will continue to conquer its market shares.

Our job is to develop the fast service business in this direc-

tion, so that future generations have products that are better,

healthier and tastier. It is up to us to ensure that the chains set

higher and higher standards, with maximum creativity. Making

use of our tradition in order to extend European culinary cul-

ture on a wide scale is the great challenge of the future.

Frank Fol, restaurateur, Leuven, Belgium

After the Ecailler du Palais Royal and the Villa Lorraine (Brussels),

where he displayed his talents as a chef for several years, Frank

Fol opened his own restaurant, the Sire Pynnock, in June 1989 in

Leuven. Very active in his field, he writes recipe books and con-

tributes to numerous magazines. He also hosts his own cooking

shows on Flemish television and radio stations. His secret: bring

back vegetables and natural taste for an inventive cuisine.

Fra

nk

FO

L

17.THE RESTAURANT MARKET

¤ The restaurant business in France and Belgium, expressed according to the number of meals served over the

period from 1998 to 2005, has grown by an average of 2.0% in France and 2.4% in Belgium (source Gira).

¤ This increase is partly due to the boom in theme restaurants but mostly to the continuing development of

hamburger restaurants, the fastest growing segment of the business.

¤ Growth forecasts for this market are optimistic because of the rapid expansion of retail and entertainment

centers and the boost in take away sales.

¤ Quick has confirmed its position as leader in the Belgium and Luxembourg market and as sole challenger in

France and intends to preserve its respective market shares of 63% and 28%.

OUTLOOK FOR 2000

¤ Demand will remain steady in the early part of the year, and the Group expects continued revenue and busi-

ness growth.

¤ Quick will pursue its innovation policy, particularly via the introduction of a significant number of promotional

products.

¤ Quick will accelerate expansion during the year and expects to open approximately 25 restaurants in France,

Belgium and Luxembourg, as well as 5 restaurants in Hungary, an emerging market with strong potential.

The stock market

As at December 31, 1999, Quick stock stood at EUR 31.50 /

BEF 1,271, up by 2% over December 31, 1998, with a high

of EUR 36.25 / BEF 1,462 and a low of EUR 27.50 / BEF 1,109.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held on May 10, 2000

at 2:30 p.m. in the Auditorium J. Thierry, BBL, Avenue

Marnix 24 at 1000 Brussels.

DIVIDEND

The Board of Directors proposes the distribution of a net

dividend per ordinary and AFV share of EUR 0.74 / BEF 30

(EUR 0.99 / BEF 40 gross) compared with payment of a net

dividend of EUR 0.69 / BEF 28 (EUR 0.93 / BEF 37.33 gross) in

respect of 1998. The total distribution of Quick will amount

to BEF 220.9 million in 2000 (BEF 206.1 million in 1999). The

dividend will fall due for payment on May 11, 2000.

COMMON STOCK

The Extraordinary General Meeting of May 14, 1997

extended, for a period of 5 years, the Board of Directors

authorization to make common stock issues up to a maxi-

mum aggregate amount of BEF 3,600 million.

In this context and subject to stock issue authorization

limits, the Board of Directors meeting approved the follow-

ing transactions:

¤ On July 25, 1997, issue of a 5-year debenture loan in the

amount of BEF 30 million, bearing interest at a rate of

2.75% and with 300,000 warrants attached, each warrant

entitling the holder to subscribe for one new ordinary share

in Quick.

The warrants may be exercised any time between Septem-

ber 1, 2000 and June 30, 2004. The debenture issue was

reserved for Group management and executive employees.

¤ On October 29, 1999, issue of a 5-year debenture loan in

the amount of BEF 20.7 million, bearing interest at a rate of

2.75% and with 207,400 warrants attached, each warrant

entitling the holder to subscribe for one new ordinary share

in Quick.

The warrants may be exercised any time between March 1,

2003 and November 30, 2005. The debenture issue was

reserved for Group management and executive employees.

The Belgian stock market disappointed investors in 1999. The BEL 20 index dropped by

5%, whereas the main European stock indices were on the rise.

19.

Common stock remained the same in 1999:

¤ Stock outstanding as at December 31, 1999 5 521 261

Potential stock corresponding to the exercise

of outstanding warrants:

¤ Number of shares following 1997 debenture loan 204 500

¤ Number of shares following 1999 debenture loan 207 400

¤ Maximum number of shares 5 933 161

¤ Weighted average number of shares for 1999 5 521 261

Stock market capitalization and per share data are

calculated on the basis of actual outstanding common

stock given that the debentures with warrants have no

dilutive effect on earnings per share. On this basis, the

maximum potential common stock of the company is

BEF 7,456.9 million.

STOCKHOLDERS

On the basis of beneficial ownership returns received and

information held by Quick, the principal stockholders as at

December 31, 1999 were as follows*:

GIB SA 57.88 %

Other stockholders 42.12 %

(institutional and private individuals)

* Percentages based on the number of shares outstanding as at

December 31, 1999

No stockholder other than GIB SA has reported owning more

than 3% of the shares issued by Quick Restaurants SA.

KEY FINANCIAL DATES

¤ 2000 Annual General Meeting May 10, 2000

¤ Dividend payment date May 11, 2000

¤ Publication of 2000

interim results September 11, 2000

¤ 2001 Annual General Meeting May 9, 2001

Net income and cash from operationsbefore working capital changes per share

1995

1996

1997

1998

1999

256

22228

1

326

341

40

- 53

58112

22

Net income per share

Cash from operations before working capital changes per share

Net dividend per share (in BEF)

1995

1996

1997

1998

1999

30 30

25

28

30

95 609 3 856 854 3 856 854 3 735 645 - 5 521 261 5 521 261 5 440 455- 5 933 161 5 821 261 5 820 241- 3 377 177 3 377 177 3 210 000- 5 521 261 5 478 948 5 424 899

36.25 1 462 1 950 2 20027.50 1 109 1 100 1 34032.48 1 310 1 545 1 80331.50 1 271 1 250 1 380

173 920 7 015 904 6 901 576 7 507 8284 780 8 351 6 024

1.00 40.24 22.05 - 52.892.03 81.94 59.26 48.365.51 222.44 255.64 281.45

24.27 979.14 986.51 1 047.81

0.99 40 37.33 33.330.74 30 28 25

31.6 56.7 n.s.5.7 4.9 4.93.1 3 2.42.4 2.2 1.84.1 2.1 n.s.1.3 1.3 1.399 171 n.s.

18 14.7 11.9

Common stock 1

Number of shares Maximum number of shares Number of shares quoted on the stock marketWeighted average number of shares for the year

Share price in EUR/BEF

HighLowAverage pricePrice as at 12/31Stock market capitalization 1/2

Average daily volume of shares traded

Consolidated data per share in EUR/BEF 3

Attributable net incomeIncome from ordinary activities before taxNet cash from operations before working capital changes 4

Stockholders’ equity

Dividend per share in EUR/BEF

Gross ordinaryNet ordinary

RatiosPrice earning ratio 2/3

Price cash flow ratio 2/3

Gross yield per ordinary share 2 %Net yield per ordinary share %Return on stockholders’ equity 5 %Stock market capitalization / stockholders’ equityDistributed income / consolidated net income, %Distributed income / net cash from operations,before working capital changes, %

1 in thousands of EUR / BEF

2 based on the share price as at 12/313 calculated on the basis of the weighted average number of shares

4 calculation detailed in the cash flow statement on page 305 on the basis of stockholders' equity at the end of the previous financial yearns: not significant

1999 1998 1997

at year-end

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

0

150

100

50

0

Jan

Mar

ch

May Ju

l

Sep

t

No

v

Jan

Mar

ch

May Ju

l

Sep

t

No

v

Jan

Mar

ch

May

Jul

Sep

t

No

v

Jan

Mar

ch

May Ju

l

Sep

t

No

v

Jan

Mar

ch

May Ju

l

Sep

t

No

v

Jan

Mar

ch

1995 1996 1997 1998 1999 2000

Quick's share price and the BEL 20 indexPrices in EUR - Brussels Stock Exchange

BE

L 20

ind

ex

Qui

ck’s

sha

re p

rice

in E

UR

Tra

nsac

tio

n vo

lum

es (

/100

0)

QUICK share

BEL 20 index

Transaction volumes

STOCKHOLDER KEY INDICATORS

In order to develop, the fast service restaurant

business will have to satisfy ten commandments,

which means it will have to change.

Gérard MERMET

GÉ

RA

RD

ME

RM

ET

The Ten CommandmentsSocial and consumer forecasting enables us to identify ten

great customer “demands” in regard to fast service restaurant

business:

¤ Sensuousness – A pleasure that all five senses can enjoy.

Products, decor, atmosphere, activities and human relation-

ships should all be part of the sensual feast. Diversity and

change will bring new sensations.

¤ Safety – Products that are reliable, harmless, labeled and

guaranteed, whose quality is consistent. A formidable brand

that inspires and deserves trust.

¤ Health – Products that are nutritionally balanced, offering,

among other things, real health benefits. Premises for sale

and consumption that serve as an antidote to stress.

¤ Mobility – Multiple points of sale (public areas, working prem-

ises, transportation areas, stores, etc.) enabling on-site con-

sumption, take away or delivery. Development of automatic

distribution and “corners” in large self-service stores.

¤ Friendliness – Between the chain and the customer (relational)

but also between customers (activities, play, access to

communication tools, etc.) before, during and after the pur-

chase, inside and outside the restaurant, in the virtual and real

worlds.

¤ Identity – Personalized products (ingredients, accompani-

ments, mix, portion, temperature) like the relationships and

communication.

¤ Information – Traceability of ingredients, transparency of the

company, its manufacturing and its values, nutritional con-

tent, educational effort, etc.

¤ Membership – A powerful brand image and concept to dif-

ferentiate the product and establish a relationship with the

customer. Products and concepts that convey history, culture

and feeling in order to create a sense of belonging.

¤ Virtue – Company commitments to its customers but also to

the environment. Will and ability to keep promises and, if pos-

sible, to go even further in order to create a “nice surprise.”

¤ “Value for money” – Moving from a quality/price ratio to a

value/cost ratio, which will add intangible added values

(brand, welcome, service, atmosphere, etc.) to quality and

non-financial costs (accessibility, waiting time, effort made) to

price.

Gérard Mermet, sociologist, Paris, France

A specialist in analyzing social and life style changes, Gérard

Mermet provides consulting services to companies and organiza-

tions in the public and private sectors.

An engineer in applied arts and holder of an MBA (Columbia

University), he has authored Francoscopie (French social fore-

casting and analysis) since 1985.

Among his other works are: “Vous et les Français”, “Démocrature”,

“Les Français en questions”, “Euroscopie”, and “La piste française”.

Gé

rard

ME

RM

ET

Corporate governance

Quick is in full agreement with the recommendations on

corporate governance of the Brussels stock exchange, and

the Banking and Finance Commission. Corporate gover-

nance is the whole set of internal rules and organizational

principles that have the aim of making a company’s bodies

of authority and control fulfill their roles of leading, manage-

ment and control as fully as possible. Quick has reorgan-

ized its management structure in line with these principles.

21.

BOARD OF DIRECTORS

Jacques Marcelin 64 years old Chairman Director of 3 Suisses International May 2000

Maurice de Kervenoaël 63 years old Director of Hermes International May 2001

Rudi Vercruysse Deceased on January 6, 2000

Diego du Monceau 50 years old Vice Chairman Director of several companies May 2001

Chris Van Steenbergen 44 years old Managing Director May 2000

Jean-Pierre Bizet 52 years old Managing Director, GIB GROUP May 2000

Louis Frère 47 years old CFO, GIB GROUP May 2001

Thomas Meisser 56 years old Director of several companies May 2001

Christian Varin 52 years old Managing Director of COBEPA May 2001

Roland Vaxelaire 43 years old Managing Director, GIB GROUP May 2001

Directors nominated by GIB SA

and its main stockholders Main activity Term of office expiry date

Independent Directors Main activity Term of office expiry date

Following the resignation of Thomas Meisser from his day-

to-day management role, announced during the Board of

Directors meeting on July 2, 1999, and effective July 16,

1999, the Board appointed Chris Van Steenbergen to the

position effective July 16, 1999. Thomas Meisser is pursu-

ing his term of office as a director.

Messrs. Eric ter Hark and Jean-Louis Raymond resigned as

directors of Quick Restaurants on September 10, 1999. On

that same date, the Board co-opted Messrs. Jean-Pierre

Bizet and Chris Van Steenbergen as directors.

Their nominations will be voted on at the Annual General

Meeting on May 10, 2000. Mr. Chris Van Steenbergen,

responsible for the day-to-day management of Quick

Restaurants since July 16, 1999, has acted as managing

director since September 10.

The Board of Directors of Quick has the power to perform

all actions necessary or useful to the realization of the

company's corporate purpose, with the exception of those

actions which by law or the bylaws fall under the authority

of stockholders in general meeting. The Board determines

the Group’s strategic direction and management program,

ensures the execution thereof, appoints Group manage-

ment and exercises full and effective control over the com-

pany and its subsidiaries.

The Board of Directors currently comprises nine members,

eight of whom - including the Chairman - are non-execu-

tive directors. Directors are appointed to a three-year term

of office and are re-eligible without age limit.

The Board of Directors meets in accordance with an annu-

al timetable and when convened by the Chairman as and

when the needs of the company require. The Board met six

times in 1999. At least half of the Board members must be

present or represented for the meeting to have a quorum

and the Board has to be provided in advance with detailed

information on the points on the agenda. All decisions are

taken on a simple majority vote.

The Board of Directors addresses such issues as Group

and subsidiary strategy, statements of account and finan-

cial communication, development of new markets, partner-

ships, investments and divestitures, plans and budgets,

and business financing. In addition to dealing with specific

files, every Board meeting reviews the progress of business

and the latest operating results available. The directors also

discuss reports from the chairmen of the Audit and Remu-

neration Committees.

Because of its youth appeal,

openness and modern image,

the fast service restaurant business

is an exceptional vehicle for creatively

and effectively informing

consumers about nutrition.

Serge HERCBERG

SE

RG

E H

ER

CB

ER

G

As a public health nutritionist, I sometimes have a strange and

vivid dream. It takes place in a fast service restaurant in the

third millennium, where pleasure and health are found in the

same dish and the restaurant itself serves as both living and

learning space - a “people” place that helps promote nutrition

and plays a real role in public health.

At the close of the second millennium, the restaurant busi-

ness, like the entire food industry was confronted by the food

safety problem.

Industry players with foresight demonstrated their ability to

respond to consumer concern by instituting traceability for

their products.

Those who will manage the consumer food business in the

third millennium will have to go further, integrating the fast

service restaurant with healthy food.

Because of its youth appeal, openness and modern image,

the fast service restaurant business is an exceptional vehicle

for creatively and effectively informing consumers about nutri-

tion.

In addition to culinary innovations, quality, comfort and

respect for the consumer, tomorrow’s fast service restaurant

will have to include a nutritional dimension in order to become

a special partner in preventive nutrition.

Hippocrates reminded us that food was our first remedy over

2,500 years ago. May the fast service restaurant business of

tomorrow contribute to this wisdom.

Serge Hercberg, research director and nutritional doctor, Paris,France

A research director at INSERM and a director of the Institut

Scientifique et Technique de la Nutrition et de l’Alimentation at the

Conservatoire National des Arts et Métiers, Dr. Serge Hercberg

was awarded the Prix de l’Institut Français de la Nutrition in 1997.

A member of the Association Française de Nutrition, the

International Nutritional Anaemia Consultative Group, WHO expert

and, among others, member of the IFN Commission for food prod-

uct inquiries, he coordinates numerous epidemiology study pro-

grams and studies on nutrition in France and in Europe

(SUI.VI.MAX and EURALIM projects). He has also authored numer-

ous international publications and contributed to nutrition and

public health conferences worldwide.

Se

rge

HE

RC

BE

RG

The day-to-day management of Quick is the responsibility

of the Managing Director. His Executive Committee is

responsible for implementing the strategy and programs

outlined by the Board of Directors across the Quick Group

as a whole and ensuring the every day management of all

the subsidiaries of the Quick Group in their specific areas

of competence. The Executive Committee reports directly

to the Board of Directors and meets once a fortnight. At

each Board of Directors meeting, the Executive Committee

presents business trends in the markets where Quick

restaurants are located.

Any matters that are beyond the scope of the day-to day

management of the Group fall within the exclusive jurisdic-

tion of the Board of Directors, except those issues

reserved for the General Meeting by law.

The Managing Director sits on the Boards of Directors of

the main subsidiaries of Quick Restaurants SA.

AUDIT COMMITTEE

Quick formed an Audit Committee at the end of 1998. Its

members are Mr. Roland Vaxelaire, Chairman, Mr. Jacques

Marcelin and Mr. Christian Varin, and they held three meet-

ings in 1999. The Managing Director, Finance Director, the

head of GIB Group Corporate Audit and the Statutory Audi-

tors are involved in the dealings of the Audit Committee

without actually being members.

The Audit Committee is in charge of monitoring the man-

agement of the company. It examines and evaluates the

accounting, financial and operational internal control sys-

tems in terms of quality, relevance and implementation. It

controls the way in which the assets of the company and

its subsidiaries are recorded and protected against losses

of any kind. It evaluates the reliability and completeness of

management accounting information produced by the

company and its subsidiaries. The Audit Committee is also

responsible for assessing and proposing candidates for the

statutory audit of Group companies. The Chairman of the

Audit Committee reports to the Board of Directors.

23.

EXECUTIVE COMMITTEE

Chris Van Steenbergen (44 /since 07/99) * Managing Director

Alain Béral (45 / 16) Sales and Operations

Patrick Glauden (44 / 17) Marketing and Research & Development

Michel Sellier (49 / 7) Administration and Finance

Roland Higgins (53 /since 01/00) Communications

Eric Bruyninckx (46 /since 04/00) Human Resources

* (Age/number of years with Quick)

REMUNERATION COMMITTEE

Quick has also established a Remuneration Committee

consisting of Mr. Jacques Marcelin, Chairman, Mr. Diego

du Monceau and Mr. Maurice de Kervenoaël. The Commit-

tee met three times in 1999.

The Board of Directors has made the Remuneration Com-

mittee responsible for determining the basic principles

relating to the status of senior executives and for setting

the components of their remuneration. The Remuneration

Committee is composed of non-executive directors. The

Managing Director attends Remuneration Committee

meetings except when matters which concern him are dis-

cussed.

DIRECTORS’ FEES

Independent directors receive directors’ fees for their work

within the Group. The directors nominated by GIB SA and

its main stockholders are not paid by Quick unless they

manage Group companies on a day-to-day basis.

Total gross remuneration paid in fiscal 1999 was BEF

17 million.

A portion of management remuneration depends on com-

pany performance.

DIVIDEND POLICY

The Board of Directors hopes that Quick will continue to

increase the size of its dividend while retaining enough of

its consolidated earnings to finance the expansion of the

Group. This policy has been followed with the exception of

fiscal 1997. The Board of Directors drafted their proposal

for the Annual General Meeting after taking into account

the following criteria:

¤ the change in consolidated income and cash from operat-

ing activities;

¤ the pattern of past dividend payments;

¤ the percentage of cash flow distributed.

THE RELATIONSHIP BETWEEN QUICK GROUP

AND GIB SA

GIB SA is represented on the Board of Directors of Quick

Restaurants SA and its subsidiaries, and thus has a say in

all Board decisions.

Furthermore, the subsidiaries of GIB SA provide administra-

tive services to the Quick Group, particularly in the areas of

property management and IT. These services are provided

at market price.

COMPANY CHARTER

As a subsidiary of GIB SA, Quick adopts the rules laid down

in the GIB GROUP Company Charter, which defines com-

mon values and rules of conduct for all subsidiaries and

employees of the GIB GROUP.

1.

Consolidated financial statements

Consolidated income statement 26

Consolidated balance sheet 28

Consolidated cash flow statement 30

Notes to the consolidated financial statements 31

Statutory Auditors’ report 42

I Sales and franchise revenuea Sales by company owned restaurantsb Franchise revenue

II Restaurant expensesa Expenses of company owned restaurants

1 Cost of supplies and goods for resale2 Salaries and social security contributions3 Other operating expenses4 Rent and other occupancy costs5 Depreciation and amortization

b Expenses of franchise owned restaurants1 Rent and other occupancy costs2 Depreciation and amortization3 Other operating expenses

III Operating margin

IV/VI Business and research and development expenses

V Administration expenses

VII Other operating revenues

VIII Other operating expenses

IX Operating income

X Financial incomea Income from long-term investmentsb Income from short-term investmentsc Other financial income

XI Financial expensesa Interest expenseb Reduction in current asset values excluding inventories,

orders-in-progress and trade receivablesc Other financial expenses

Net financial income (expense)before amortization of goodwill

Income from ordinary activities before tax and amortization of goodwillAmortization of goodwill

XII Income from ordinary activities before tax

Consolidated income statement

CONSOLIDATED INCOME STATEMENT

(in BEF ‘000) 1999 1998 1997

11 701 5319 375 442

2 326 089

8 642 3227 644 488

2 541 689

2 982 761

1 009 244

544 985

565 809

997 834

553 285

393 853

50 696

3 059 209

1 051 422

1 272 030

591 972

594 166

733 563

206 86026 905

22 729

157 226

400 464195 238

–

205 226

(193 604)

539 959

87 556

452 403

11 343 554

9 182 4802 161 074

8 521 443

7 552 9812 581 8212 942 920

950 711520 885556 644

968 462545 406392 384

30 672

2 822 111

782 929

1 179 440

278 264

564 929

573 077

181 552

22 60551 973

106 974

351 076

220 806

116130 154

(169 524)

403 553

78 896

324 657

10 844 281

8 850 4471 993 834

8 109 828

7 184 5722 542 9692 701 593

878 502483 057578 451

925 256492 158371 955

61 143

2 734 453

746 003

1 133 357

270 642

557 986

567 749

165 586

24 04736 906

104 633

353 178

208 606

52144 520

(187 592)

380 157

117 794

262 363

note 13

note 14

XIII Extraordinary incomea Amounts released from provisions for depreciation, amortization

and diminution in value of tangible and intangible fixed assetsc Amounts released from provisions for extraordinary contingencies and lossesd Gains on fixed asset disposalse Other extraordinary income

XIV Extraordinary expensesa Depreciation, amortization and diminution in value of

establishment costs, tangible and intangible fixed assetsb Diminution in value of long-term investmentsc Provisions for extraordinary contingencies and lossesd Losses on fixed asset disposalse Other extraordinary expenses

Net extraordinary income/expenses

XV Income (loss) for the period before tax

XVI Deferred taxa Transfers to deferred taxb Deductions from deferred taxc Set-off of deferred tax assetsd Transfers to deferred tax assets

XVII Income tax

XVIII Income (loss) of consolidated companies

XIX Share of income (losses) of equity affiliatesa Net income

XX Consolidated net income (loss)

XXI Minority interests

XXII Group net income (loss) for the year

27.

CONSOLIDATED INCOME STATEMENT (CONTINUED)

(in BEF ‘000) 1999 1998 1997

205 340

15 418

102 926

17 747

69 249

286 831

90 601

–

120 706

18 357

57 167

(81 491)

370 912

(31 130)(25 571)

15 632

(21 191)

–

156 279

183 503

38 69238 692

222 195

–

222 195

660 784

182 494373 097

19 05686 137

824 656

210 1623 884

212 45469 596

328 560

(163 872)

160 785

(32 207)

(67 826)14 416

–21 203

39 773

88 805

32 003

32 003

120 808

–

120 808

135 026

15 19660 33048 31211 188

760 734

140 651–

392 67944 576

182 828

(625 708)

(363 345)

110 575

(40 202)150 777

––

68 640

(321 410)

34 490

34 490

(286 920)

–

(286 920)

note 16

note 16

FIXED ASSETS

I Establishment costs

II Intangible fixed assets

IIl Goodwill

IV Property, plant and equipmenta Land and buildingsb/cPlant, machinery and equipment, furniture and vehiclesd Finance lease and similar rightse Other property, plant and equipmentf Fixed assets in progress and payments on account

V Long-term investments a Equity affiliates

1 Participating interestsb Long-term investments

1 Participating interests and equity investments2 Loans and cash deposits

CURRENT ASSETS

VI Receivables, falling due after more than one yeara Trade receivablesb Other

VIl Inventoriesa Goods and supplies

VlIl Receivables, falling due within one yeara Trade receivablesb Other

IX Short-term investmentsb Other investments

X Cash and cash equivalents

XI Prepayments and deferred charges

Total assets

Consolidated balance sheet

ASSETS

(in BEF ‘000) 1999 1998 1997

11 530 575

4 248

2 354 516

908 172

7 161 3655 021 450

1 162 759

387 643

557 273

32 240

1 102 274497 571

497 571

604 703

28 372

576 331

4 387 718

30 344680

29 664

484 420484 420

1 972 5491 641 676

330 873

435 461435 461

904 833

560 111

15 918 293

11 667 830

8 250

2 319 666

987 057

7 202 960

5 075 5001 087 140

410 261598 778

31 281

1 149 897

458 879458 879691 018

26 899664 119

4 034 326

64 958

20864 750

348 379

348 379

1 450 700

1 018 936431 764

797 273

797 273

793 543

579 473

15 702 156

11 978 775

9 698

2 280 378

1 066 425

7 727 520

5 523 2581 099 255

430 496619 150

55 361

894 754

489 992489 992404 762

27 031377 731

3 507 966

61 223

17 18644 037

322 060

322 060

1 292 761

927 847364 914

816 372

816 372

524 054

491 496

15 486 741

note 2

note 3

note 6

note 4

note 5

note 7

note 8

STOCKHOLDERS’ EQUITY

I Common stocka Capital subscribed

II Additional paid-in capital

IV Reserves

VI Translation differences

MINORITY INTERESTS

VIII Minority interests

PROVISIONS AND DEFERRED TAX

IX Provisions and deferred taxa Provisions for contingencies and losses

1 Pensions and similar commitments2 Tax provisions3 Major repairs and maintenance4 Other contingencies and losses

b Deferred tax

LIABILITIES

X Liabilities falling due after more than one yeara Long-term borrowings

2 Non-subordinated debenture loans3 Finance lease obligations and similar liabilities4 Credit institutions

d Other liabilities

XI Liabilities falling due within one yeara Short-term portion of long-term liabilitiesb Borrowings

1 Credit institutions2 Other borrowings

c Trade payables1 Suppliers2 Notes payable

d Payments on account receivede Tax and employee-related liabilities

1 Taxation2 Salaries and social security contributions

f Other liabilities

XII Accruals and deferred income

Total liabilities and stockholders’ equity

29.

LIABILITIES AND STOCKHOLDERS’ EQUITY

(in BEF’000) 1999 1998 1997

5 406 098

3 856 8543 856 854

475 209

1 002 165

71 870

1

1

849 367

849 367329 029

25 920

–

16 720

286 389

520 338

9 662 827

2 864 6572 848 549

41 190

334 504

2 472 855

16 108

6 572 4282 206 410

694 523

694 523

–

2 495 567

2 495 567

–

14 163

1 091 256

378 455

712 801

70 509

225 742

15 918 293

5 405 020

3 856 854

3 856 854

475 209

1 000 820

72 137

–

–

1 068 203

1 068 203

597 086206

2 16419 211

575 505471 117

9 228 933

3 936 643

3 921 40330 000

366 7653 524 638

15 240

5 052 815

1 047 585730 655730 647

82 096 7161 736 991

359 725–

885 834249 377636 457292 025

239 475

15 702 156

5 684 257

3 735 645

3 735 645

475 209

1 389 917

83 486

–

–

854 772

854 772

737 368752

2 17022 211

712 235117 404

8 947 712

4 849 241

4 837 49730 000

395 5034 411 994

11 744

3 890 835

572 744336 594306 583

30 0111 906 0301 530 455

375 575–

880 175260 772619 403195 292

207 636

15 486 741

notes 9 and 10

note 11

note 12

note 12

note 12

NET CASH FROM OPERATING ACTIVITIES

Income (loss) of consolidated companiesDividend distributed by equity affiliatesDepreciation and amortizationChange in provisions for diminution in valueCapital gains/losses on fixed asset disposalsProceeds from the franchising of restaurantsMerger or absorption deficitChange in deferred taxesNet cash from operating activities before changes in working capitalChange in inventoriesChange in trade receivablesChange in prepaid expensesChange in other receivablesChange in trade payablesChange in other payablesChanges in working capitalNet cash from operating activities

NET CASH USED IN INVESTING ACTIVITIES

Fixed asset disposalsAcquisitions of property, plant and equipmentAcquisitions of intangible fixed assetsInvestments included within deferred costsChange in long-term investmentsChange in goodwillNet cash used in investing activities

NET CASH FROM (USED IN) FINANCING ACTIVITIES

Issues of common stockDividends paid to parent company stockholdersNew long and medium-term borrowingsRepayments of short-term portion of long-term borrowingsMovement in short-term borrowingsMovement in receivables falling due after more than one yearMovement in receivables in respect of fixed asset disposal to franchisesNet cash from (used in) financing activitiesImpact of exchange rate fluctuations

NET INCREASE (DECREASE) IN CASH RESOURCES *

Consolidated cash flow statement

(in BEF’000) 1999 1998 1997

183 502

–

1 108 053

(167 058)

9 928

62 592

–

31 130

1 228 147(101 803)

(622 739)

19 361

2 121

398 850

(29 826)

(334 036)894 111

101 310

(1 239 647)

(49 967)

(11 956)

86 315

(8 671)

(1 122 616)

–

(206 109)

1 134 425

(1 047 585)

(8)

34 614

98 770

14 107–

(214 398)

88 80561 844

1 011 983(56 925)

147 657114 308

74432 208

1 400 624(25 633)(16 083)(89 977)(10 955)56 56670 184

(15 898)

1 384 726

702 836(1 260 710)

(145 332)(24 753)

(286 257)(814)

(1 015 030)

121 209(181 348)134 986(572 744)

(30 003)12 184(55 894)

(571 610)

28 239

(173 675)

(321 410)45 181

1 202 983622 867(84 937)

172 700–

(110 575)1 526 809

(2 311)4 323

(85 715)271 354(226 830)(151 462)(190 641)

1 336 168

321 993(1 358 516)

(72 866)(20 254)

(5 420)–

(1 135 063)

47 448(221 443)

1 210 537(297 215)

30 011(12 441)

515 8371 272 734

67 667

1 541 506

* Cash resources represent the aggregate of Short-term investments and Cash and cash equivalents less bank overdrafts.

LIST OF CONSOLIDATED COMPANIES

Company VAT N° Country of Percentage interest Percentage interest (Fully consolidated) incorporation as at 12/31/1999 as at 12/31/1998

Quick Restaurants SA (parent company) BE 412 121 524 Belgium

Quick Coordination Center SA BE 454 991 663 Belgium 100.00% 100.00%Logirest Benelux SA BE 460 954 490 Belgium 100.00% 100.00%Equilease International SA Luxembourg 99.97% 99.97%Quick Nederland BV Netherlands 100.00% 100.00%Sorbec Trustees Ltd UK 100.00% 100.00%Quick Logistics Services (GEIE) France 100.00% 100.00%France Quick SA (sub-group) France 100.00% 100.00%

Négoce Pierre SNC France 100.00% 100.00%La Rose d’Anjou SCI France 100.00% 100.00%Logirest SNC France 100.00% 100.00%Quick Invest France SNC France 100.00% 100.00%Quick Franchise Développement SNC France 100.00% 100.00%Resto DM Jaude SARL France 100.00% 100.00%Woippyrest SARL France 100.00% 100.00%Logimat SARL** France – 100.00%Altus Drive SARL France 100.00% 100.00%Aeres SARL France 100.00% 100.00%Quick 04 SAS France 100.00% 100.00%Champs II SA France 100.00% 100.00%Savial SARL* France 100.00% –

Company Country of Percentage interest Percentage interest (Equity affiliates) as at 12/31/1999 as at 12/31/1998

Serrac SA France 50.00% 50.00%Agaquick SAS France 49.00% 49.00%

Dieppe Restauration EURL France 49.00% 49.00%

Agaquick Invest SNC* France 49.00% –

31.

Notes to the consolidated financial statements

DESCRIPTION OF THE GROUPThe Group is principally engaged in the operation of owned and franchised fast food restaurants under the Quick name inBelgium, Luxembourg, France and the Netherlands.

CHANGE IN THE SCOPE OF CONSOLIDATION Companies marked below by an asterix (*) were acquired or incorporated during the year and as such have been consoli-dated for the first time in 1999. Companies indicated by a double asterix (**) were absorbed, dissolved or disposed of duringthe course of the year.

ACCOUNTING POLICIES1.1 General

The consolidated financial statements have been drawn up in accordance with the accounting policies and consolidationrules laid down by Belgian accounting legislation. They are also in compliance with International accounting standards. The presentation used for the Income statement and Balance sheet is consistent with that used by other major internationalgroups in this sector. As this results in an improved level of group disclosure, the Commission Bancaire et Financière(Banking and Finance Commission) has accepted this format even although it departs from the statutory Belgian format.

1.2 Consolidation methodsThe financial statements of the companies over which Quick Restaurants SA exercises exclusive control, directly or indirect-ly, are fully consolidated. Certain affiliates satisfying this criterion, which have been acquired during the last quarter of theyear, are not necessarily included within the scope of consolidation. Companies over which Quick Restaurants SA exercises significant influence, directly or indirectly, are accounted for usingthe equity method. Such influence is presumed to exist where the Group holds between 20% and 50% of voting rights. Thegross carrying value of investments in equity affiliates is adjusted for the Group share of post-acquisition earnings net ofdividends received.

1.3 Translation of financial statements of foreign companiesBalance sheet items are translated using the period-end exchange rate. Income statement items are translated using theaverage rate of exchange for the period. The differences arising from the application of these rates are taken to Exchangedifferences within stockholders’ equity. The following rates of exchange were used:

1999 1998 1997

Closing rate FRFAverage rate FRF

Closing rate NLGAverage rate NLG

1.4 GoodwillThe excess of the purchase cost of interests in subsidiaries over the share of net assets acquired is, within one year, brokendown as follows by the Board of Directors: - amounts attributable to identifiable non-current assets are allocated to the rele-vant balance sheet heading, and depreciated or amortized, where appropriate, over their useful economic lives; - anyamounts not so allocated are treated as goodwill and are amortized on a straight-line basis, over a period determined case-by-case, not exceeding 20 years; - amounts of consolidation goodwill of less than BEF 10 million are written off during theyear.

1.5 Establishment costsEstablishment costs include company incorporation costs and equity and debt issuance costs. They are amortized over a 5-year period.

1.6 Intangible fixed assetsPurchased trademarks, goodwill and leasehold rights are capitalized and are not amortized where they are legally protected.This is mainly the case for leases held by French companies, as the holder of the leasehold rights is entitled to almost unlim-ited renewal of the lease; if the lessor wishes to cancel the lease, the lessee has the right to an eviction indemnity equal tothe value of the leasehold interest at the date of cancellation. Otherwise leasehold rights are amortized over 5 years usingthe straight-line method. The value is written down where material changes occur in the factors used as a basis for theirvaluation. Purchased software is amortized over 3 to 5 years using the straight-line method.

6.149776.14977

18.305518.3055

6.149776.153

18.305518.301

6.1666.130

18.30318.335

note 1

33.

1.7 Property, plant and equipmentProperty, plant and equipment is stated at historical cost. Interest expenses incurred during the period prior to installationare not capitalized. Property, plant and equipment is depreciated using the straight-line method over the estimated usefullife of the assets. Property, plant and equipment held under lease or hire-purchase agreements which transfer the risks and rewards of owner-ship to the Group is capitalized at cost and depreciated as described above. The corresponding lease obligations arerecorded within liabilities. The useful lives of property, plant and equipment, for depreciation purposes are as follows:

Buildings 5%Fittings 10% to 25%Restaurant equipment and furniture 20%Other property, plant and equipment 10% to 20%

1.8 Long-term investmentsParticipating interests and equity investments are valued at cost. A provision for impairment is raised where the year-endmarket value is less than cost and the diminution in value is considered by the Board of Directors to be permanent.

1.9 InventoriesSupplies are valued at purchase cost given their rapid turnover. Other inventories are valued at the lower of weighted aver-age cost and net realizable value.

1.10 Short-term investmentsThese take the form of transferable securities and are valued at the lower of historical cost and market value

1.11 Supplementary retirement benefits and other employee commitmentsWhere supplementary retirement benefits or other specific employee commitments exist, their cost is recorded either bymeans of a provision or on the basis of contributions paid to the organizations responsible for the administration of the rele-vant schemes.

1.12 Deferred taxDeferred tax assets and liabilities are recognized according to the liability method for all timing differences resulting fromaccounting adjustments made to subsidiaries’ accounts to bring them in to line with group accounting and consolidationpolicies, and also on certain taxation differences based on balance sheet figures. Deferred tax assets are only recognized tothe extent that the company will have a tax charge against which it will be able to offset these timing differences. They arerecorded in the Balance sheet under Other receivables falling due after more than one year. No provision is made for taxeson profits which are not intended for distribution.

1.13 Research and development costsResearch and development costs are expensed as incurred.

1.14 Restaurant pre-opening costsCosts incurred prior to the opening of restaurants are spread out over the first 12 months of operation, under Other operat-ing expenses. Until this point, such costs are recorded within Prepayments and deferred charges.

note 1ctd.

1.15 Restaurant franchisesThe company franchises restaurants to independent operators under franchise agreements lasting a minimum of 9 years.The shared franchise agreement provides for the acquisition of equipment, fixtures and fittings by the prospective candidate.The Group finances the cost of the land and buildings either as proprietor or principal lessee. In certain restaurants, allassets which constitute the business are leased or franchised under a management contract. In the case of a full franchise,the franchisee bears the cost of the whole investment. Finally, the Group may be called on to acquire a minority interest incompanies created with partners to operate the restaurants under franchise agreements. Under these various contracts the franchisee pays the Group royalties for the use of the Quick name, its services and itsshare of national advertising campaigns as well as a rental charge calculated on the basis of restaurant sales, subject in cer-tain cases to a fixed minimum charge. The total amount of this income is recorded within franchise revenue when received,with the exception of the advertising contribution which is deducted from the costs incurred by Quick. Given their recurring nature in the normal course of business, capital gains and losses realized on the sale of owned restaur-ants to franchisees are recorded within other operating revenues or expenses as appropriate.

1.16 Extraordinary income and expensesExtraordinary income and expenses records operations of a non-recurring and abnormal nature falling outside the normalactivities of the Group.

1.17 Disputes and legal proceedings in progressDuring the course of the normal activities of the Group and its subsidiaries disputes can arise with third parties and legal pro-ceedings can be instigated. Provisions for contingencies and losses are raised where the impact of these disputes and legal proceedings can be esti-mated, if necessary with the assistance of Group advisors. Provisions are determined on an individual case basis after a prudent appraisal of associated risks.

1.18 Financial instrumentsTransactions involving forward financial instruments, which mainly comprise hedging transactions, are disclosed off-balancesheet. Income and expenses in respect of hedging instruments are determined and recorded in the accounts in line withincome and expenses relating to the items hedged. Quick’s strategy does not include speculative transactions. There are no open currency or interest rate positions liable togive rise to material risks. Currency and interest rate hedging transactions are carried out and controlled by the Group’shead office.

1.19 Net indebtednessNet indebtedness is the sum of borrowings falling due within and after one year, less short-term investments and cash andcash equivalents

note 1ctd.

35.

ESTABLISHMENT COSTS

(in BEF ‘000) 1999 1998

Balance at the beginning of the periodTransfers during the period

Costs incurred during the periodAmortizationOtherTranslation differences

Balance at the end of period

Establishment costs comprise company incorporation costs and equity and debt issuance costs.

INTANGIBLE FIXED ASSETS

(in BEF ‘000) Franchises, Purchased Totalpatents Goodwill

licenses, etc.

Gross carrying valueBalance at 12/31/1997

AdditionsDisposals and eliminations TransfersTranslation differences

Balance at 12/31/1998 AdditionsDisposals and eliminationsTransfersTranslation differences

Balance at 12/31/1999

AmortizationBalance at 12/31/1997

Charge for the yearTransferred from third partiesDisposalsTranslation differences

Balance at 12/31/1998 Charge for the yearTransferred from third partiesDisposalsTranslation differences


Net book value at 12/31/1999

note 2

note 3

8 250

–

(3 043)

(959)

–

4 248

9 698

3 661(5 102)

–(7)

8 250

62 864 2 560 537 2 623 401– 141 671 141 671– (60 762) (60 762)– – –

(1) (5 312) (5 313)62 863 2 636 134 2 698 997

– 50 926 50 926– (48 808) (48 808)– – –– – –

62 863 2 638 252 2 701 115

62 247 280 776 343 023– 92 916 92 916– – –– (57 235) (57 235)1 626 627

62 248 317 083 379 331 – 32 097 32 097

– (64 829) (64 829)

62 248 284 351 346 599

615 2 353 901 2 354 516

PROPERTY, PLANT AND EQUIPMENT

(in BEF ‘000) Land & Plant Finance Other Fixed assets Totalbuildings machinery, leases & property in progress &

equipment, similar rights plant & payments onfurniture & equipment account

vehicles


AdditionsDisposals and removalsTransfersTranslation differences

Balance at 12/31/1998AdditionsDisposals and removalsTransfersTranslation differences


DepreciationBalance at 12/31/1997

Charge for the yearReversalsDisposalsTransfersTranslation differences

Balance at 12/31/1998Charge for the yearReversalsDisposalsTransfersTranslation differences



Finance leases and similar rights comprise:

Land and buildings 387 643

1 495 939112 389(69 441)

1 916 (33)

1 540 770141 774(36 665)

(57)–

1 645 822

876 789113 522(38 914)(12 270)

2 80956

941 992181 295

(2 426)(32 257)

(55)–

1 088 549

557 273

513 290–––

(1 291)511 999

–(22 192)

––

489 807

82 79419 114

–––

(170)101 738

18 490–

(18 064)––

102 164

387 643

3 425 797487 372(309 649)

6 203(7 086)

3 602 637463 813(285 810)

7–

3 780 647

2 326 542400 343(68 087)

(161 524)23 063(4 840)

2 515 497439 572(78 848)

(230 001)(28 332)

–2 617 888

1 162 759

8 699 201676 841(708 318)

–(21 499)

8 646 225630 699(351 147)

50–

8 925 827

3 175 943502 810

–(143 974)

43 848(7 902)

3 570 725528 209(39 467)

(202 180)47 090

–3 904 377

5 021 450

54 5548 861

(29 089)(8 119)

(134)26 07315 317(14 581)

––

26 809

(807)4 656

(926)–

(8 119)(12)

(5 208)–

(8 342)8 119

––

(5 431)

32 240

14 188 7811 285 463(1 116 497)

–(30 043)

14 327 7041 251 603

(710 395)––

14 868 912

6 461 2611 040 445

(107 927)(317 768)

61 601(12 868)

7 124 7441 167 566

(129 083)(474 383)

18 703–

7 707 547

7 161 365

note 4

LONG-TERM INVESTMENTS

(in BEF ‘000) 1999 1998

1 Equity affiliatesAt the beginning of the period

AcquisitionsIncome for the periodDividends receivedTranslation differences

Net book value at the end of the period

2 Other undertakingsa) Acquisition value At the beginning of the period

AcquisitionsDisposals and retirementsTranslation differences

Value at the end of the periodb) Provisions for diminution in valueAt the beginning of the period

Charge for the yearDisposalsTranslation differences

Value at the end of the periodNet book value at the end of the period

3 Loans and cash depositsNet book value At the beginning of the period

AdditionsRepaymentsTranslation differencesOther

Net book value at the end of the period

Equity affiliatesFrance Quick SA holds participating interests intwo companies, SERRAC SA (associate of theELIOR Group) and AGAQUICK SAS (associate ofthe AUCHAN Group), which operate QUICKrestaurants in partnership, under franchiseagreements. The salient financial informationconcerning these companies taken together ispresented below:

(in BEF ‘000) 1999 1998

Number of restaurantsSERRACAGAQUICK

Restaurant sales underthe Quick tradename

Operating income

Financial income

Net income on ordinary activities

Net income for the period

Net cash from operatingactivities before changes in working capital

Total assets

Stockholders' equity

Net indebtednessQuick share in net incomeDividends paid to Quick

16

16

2 325 394

179 367

(13 164)

166 202

77 622

229 897

2 185 985

1 245 009

511 476

38 692

–

1612

1 910 205

127 773

(6 104)

121 669

63 837

174 419

2 069 010

1 141 662

409 66732 00361 844

GOODWILLThe goodwill recognized is that of France Quick SA and its subsidiaries. Movements for the year are as follows:

(in BEF ‘000) France Quick SA Total


MovementsDecreasesTranslation differences


AmortizationBalance at 12/31/1998

Charge for the yearDecreasesTranslation differences



458 879

–

38 692

–

–

497 571

79 978

788

(17)

–

80 749

53 079

526

(1 228)

–

52 377

28 372

664 119

60 060

(143 716)

–

(4 132)

576 331

489 992–

32 003(61 844)

(1 272)458 879

78 9771 209

– (208)

79 978

51 9461 270

–(137)

53 07926 899

377 731300 907(13 594)

(925)–

664 119

1 832 989 1 832 9898 671 8 671

– –– –

1 841 660 1 841 660

845 932 845 93287 556 87 556

– –– –

933 488 933 488

908 172 908 172

note 5

note 6

ANALYSIS OF GOODWILL BY TYPE

(in BEF ‘000) NBV NBV Period of1999 1998 amortization

France Quick Goodwill on O'Kitch 142 577 162 944 20 yearsConsolidation goodwill 765 595 824 113 20 years

Total 908 172 987 057

The goodwill recorded in 1986 on acquisition of the O’Kitch chain corresponds to amounts not allocated to identifiable intangibles (existing purchased goodwill of thebusiness acquired). It represents the premium paid by Quick for an increase in its market share, and for the positive impact on the image of the Quick trade name.Consolidation goodwill represents the excess of the cost of interests in subsidiaries over the share of restated net assets acquired, as at the beginning of the first year inwhich the subsidiary is consolidated. Consolidation goodwill is amortized over 20 years due to the long-term strategic interest represented by these controlling interests.

OTHER RECEIVABLES FALLING DUE AFTER MORE THAN ONE YEAR

(in BEF ‘000) 1999 1998

Deferred tax assets on losses carried forward – 21 191 Amounts due from the French State 29 664 43 559

Total 29 664 64 750

The amounts due from the French State arose as a result of a change in the VAT rules. This debt is repayable over 20 years up to 2013 and bears interest at 0.1%.

RECEIVABLES FALLING DUE WITHIN ONE YEAR

(in BEF ‘000) 1999 1998

a Trade receivables

Total 1 641 676 1 018 936

Trade receivables comprises royalties and rents due by franchisees at the year end net of diminutions in value.

b Other receivablesLuncheon vouchers to be cashedInput VATReceivables on fixed asset disposalsIncome tax creditsOther

Total

MOVEMENTS IN STOCKHOLDERS’ EQUITY (after appropriation of earnings)

(in BEF ‘000) Number of shares Common Additional Reserves Translation Stockholders’in circulation Stock paid-in capital Differences Equity

Balance at 12/31/1997Effect of change in accounting policy from 01/01/19981998 Net incomeCommon stock issue on exercise of warrantsMovement in translation differencesDividend proposed in respect of 1998Balance at 12/31/19981999 Net incomeCommon stock issue on exercise of warrantsMovement in translation differencesDividend proposed in respect of 1999


5 440 455 3 735 645 475 209 1 389 917 83 486 5 684 257

– – – (303 796) – (303 796)– – – 120 808 – 120 808

80 806 121 209 – – – 121 209– – – – (11 349) (11 349)– – – (206 109) – (206 109)

5 521 261 3 856 854 475 209 1 000 820 72 137 5 405 020– – – 222 195 – 222 195– – – – – –– – – – (267) (267)– _ – (220 850) – (220 850)

5 521 261 3 856 854 475 209 1 002 165 71 870 5 406 098

99 217

56 190

73 367

2 287

99 812

330 873

121 18752 207

172 1374 237

81 996

431 764

note 6ctd.

note 7

note 8

note 9

The accounting standard IAS 12 Revised, which deals with accounting for deferred tax, has been applied by Quick with effect from January 1 1998. Deferred tax willhenceforth be calculated on the basis of short term timing differences relating to the tax and accounting value of items on the balance sheet, and not as previously on the basis of timing differences between income in the financial statement and in tax computations. The impact as of January 1, 1998 of the application of this standard lead Quick to recognize a deferred tax liability of BEF 303.8 million which was deducted from opening stockholders’ equity.

POTENTIAL COMMON STOCK

The Extraordinary General Meeting of May 14, 1997 extended, for a period of 5 years, the Board of Directors authorization to make common stock issues up to a maximum aggregate amount of BEF 3,600 million. In this context and subject to stock issue authorization limits, the Board of Directors meeting approved the following transactions: - on July 25, 1997, issue of a 5-year debenture loan in the amount of BEF 30 million, bearing interest at a rate of 2.75% and with 300,000 warrants attached, each warrant entitling the holder to subscribe for one new ordinary share in Quick. The warrants may be exercised at a price of BEF 1,880 (EUR 46.60) any time betweenSeptember 1, 2000 and June 30, 2004. The debenture issue was reserved for Group management and executive employees. - on October 29, 1999, issue of a 5-year debenture loan in the amount of BEF 20.7 million, bearing interest at a rate of 2.75% and with 207,400 warrants attached,each warrant entitling the holder to subscribe for one new ordinary share in Quick. The warrants may be exercised at a price of BEF 1,341 (EUR 33.24) any time between March 1, 2003 and November 30, 2005. The debenture issue was reserved for Group management and executive employees.

PROVISIONS FOR CONTINGENCIES AND LOSSES

(in BEF ‘000) 1999 1998

Provisions for disputes and legal proceedings 273 769 495 182Provisions for restaurant closures 12 620 74 436Provisions for restructuring costs – 5 887

Total 286 389 575 505

The above provisions were raised in accordance with the accounting policy described in note 1.17 above. Where the closure of a restaurant is decided as of theyear end, closure costs corresponding to the accelerated depreciation of the assets concerned are deducted from the corresponding asset headings.

BORROWINGS (as of December 31, 1999)

(in BEF ‘000) Falling due < 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years > 5 years

Non-subordinated debenture loans Credit institutionsFinance leasesDebts falling due after morethan one year when contractedBank overdraftsBank borrowings

ANALYSIS OF BORROWINGS FALLING DUE AFTER MORE THAN 1 YEAR AT 12/31/1999

Effective interest rate Nature Amount

Belgian francsNon-subordinated debenture loans 2.75 fixed 41 190Credit institutions 3.34 floating 300 000Finance leases – – –

French francsCredit institutions 4.05 floating 3 750 555Finance leases 7.12 fixed/floating 334 504

Dutch FlorinsCredit institutions 3.26 floating 600 420

OTHER OPERATING INCOME

1999 1998

Capital gains realized on restaurants transferred to franchisees 21 652 4 277Down payments and entry fees paid by franchisees 19 470 21 787Amounts released from operating provisions 422 402 193 825Other 128 448 58 375

Total 591 972 278 264

39.– – 20 450 – 20 740 –

2 178 121 1 794 432 514 429 163 994 – –28 289 30 358 32 577 34 962 37 523 199 084

2 206 410 1 824 790 567 456 198 956 58 263 199 084694 523 – – – – –

– – – – – –

note 10

note 11

note 12

note 13

(in BEF ‘000)

OTHER OPERATING EXPENSES

1999 1998

Restaurant pre-opening expensesAmortization of equity issuance costsSundry provisions for contingencies and lossesDebt waiversOther expenses

Total

Income and expenses considered as extraordinary until the end of 1998, particularly provisions raised or released for restaurant closing costs and reductions in good-will and leasehold rights, have been recorded in operating profit since January 1, 1999. This change resulted in the recording of income net of operating expensesamounting to BEF 35 million in 1999 which, according to the previous presentation, would have been recognized as extraordinary.

INFORMATION BY GEOGRAPHICAL AREA

1999 1998

Belgium Netherlands France Total Belgium Netherlands France TotalLuxembourg Luxembourg

Systemwide salesSales by company owned restaurants and franchise revenueOperating marginOperating incomeIncome on ordinary activities before tax and amortization of consolidation goodwillShare of income (losses) of equity affiliatesTotal assets

Shown after adjustment for intra-group transactions and apportionment of shared costs.

INCOME TAX

1999 1998

Income tax in France and BelgiumRevised assessments and additional tax due in respect of prior yearsSet-off (recognition) of deferred tax assetsMovements in deferred taxNet income tax charge/(credit)

The tax represented by tax losses available for carry forward not utilized by the Group was BEF 213 million as at December 31, 1999 against BEF 191 million as atDecember 31, 1998. Where there is a strong probability that the tax losses will be utilized, a deferred tax asset is recorded. No tax asset had been recorded as atDecember 31, 1999.

ANALYSIS OF THE TOTAL TAX CHARGE

1999 1998

Total Income on Extraord. Total Income on Extraord.ordinary items ordinary items

activities activities

Tax on income and deferred taxesRevised tax assessments

Net income tax charge/(credit)

6 217,2 60,1 20 158,1 26 435,4

2 711,1 60,1 8 930,3 11 701,5735,0 (34,3) 2 358,5 3 059,2190,4 (55,6) 598,8 733,6

177,1 (72,4) 435,3 540,0

– – 38,7 38,72 503,0 204,4 13 210,9 15 918,3

5 796,2 59,7 19 090,9 24 946,8

2 653,2 59,7 8 630,7 11 343,6639,2 (51,8) 2 234,7 2 822,1

31,7 (81,3) 622,7 573,1

11,5 (96,5) 488,6 403,6

– – 32,0 32,02 359,7 287,4 13 055,1 15 702,2

51 582

1 172

179 856

97 404

264 152

594 166

135 042–

158 500133 796137 591

564 929

134 017

22 262

21 192

9 938

187 409

39 773

–(21 203)53 41071 980

71 980 149 719 (77 739)– – –

71 980 149 719 (77 739)

165 147 158 696 6 45122 262 – 22 262

187 409 158 696 28 713

note 14

note 15

note 16

(in BEF million)

(in BEF ‘000)

(in BEF ‘000)

(in BEF ‘000)

41.

AVERAGE NUMBER OF EMPLOYEES AND PERSONNEL COSTS

1999 1998

Average number of employees full time equivalentRestaurant personnelManagement, sales and marketing and administration

Total

Personnel expenses (in BEF’000)

Remuneration and benefitsEmployer social security contributionsEmployer additional contributionsOther personnel costsPensions

TotalCharge to (release from) provision for pension commitments

FINANCIAL COMMITMENTS

1999 1998

Commitments givenGuarantees in favor of third partiesBuildings in progressFutures market (foreign currency purchased)Futures market (foreign currency sold)

Total

Commitments receivedRental payments guaranteed by GIB SA and third parties

Total

The Quick Group is hedged against interest rate fluctuations as part of future rate agreements and swaps for notional amounts of: BEF 300 million for less than 6 months; BEF 900 million from 6 months to 1 year; and BEF 300 million from 1 to 5 years.

TRANSACTIONS WITH NON-CONSOLIDATED ASSOCIATED UNDERTAKINGS AND PARTICIPATING INTERESTS

Associated undertakings 1 Participating interests 2

1999 1998 1999 1998

Participating interests, equity investments – – 497 571 458 879

ReceivablesFalling due within one year 16 004 118 18 274 16 635Short-term investmentsReceivables – – – –LiabilitiesFalling due after more than one year – 4 543

Falling due within one year 18 172 17 863

Collateral granted or committed by associatedundertakings to secure the debts orundertakings of the company 3 290 3 255

Financial income/expenseIncome from current assets – –

Interest expense 163 1 227

Other financial charges – –1 GIB Group companies not included within the scope of consolidation. 2 Serrac SA and Agaquick SAS accounted for using the equity method.

FINANCIAL RELATIONS WITH DIRECTORS

1999 1998

A Total fees paid to directors of the parent companyfor the financial period, in respect of duties performedfor the parent company and its subsidiaries 17 006 9 664

B Total advances and loans granted to the directors of the parent company by the parent company and its subsidiaries 4 100 3 100

note 17

note 18

note 19

note 20

3 019183

3 202

2 790 788984 818

8 61091 378

–

3 875 594

(546)

3 215

210

3 425

2 736 500

994 746

10 358

88 133

–

3 829 737(483)

6 826

176 960

–

–

183 786

133 388

133 388

6 830123 66969 150

–

199 112

102 231

102 231

(in BEF ‘000)

(in BEF ‘000)

(in BEF ‘000)

Statutory Auditors’ report

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1999 PRESENTED TO THE ANNUAL GENERAL MEETING OF STOCKHOLDERS OF QUICK RESTAURANTS SA.

In accordance with the provisions of current legislation and the bylaws we hereby report to you on the performance of thestatutory audit engagement entrusted to us.

We conducted an audit of the consolidated financial statements prepared by the Board of Directors for the year endedDecember 31, 1999, showing total net assets of BEF 15,918,293,000 and a net income for the year of BEF 222,195,000. Wealso performed a review of the consolidated management report.

Unqualified audit opinion on the consolidated financial statementsWe conducted our audit in accordance with the standards of the Belgian Institute of Statutory Auditors. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, taking into account legal and regulatory requirements applicable to consolidatedfinancial statements in Belgium.

In accordance with these standards we considered the administrative and accounting organization and internal control system of your Group. We obtained the necessary explanations and information for the performance of our controls. We examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We assessed theappropriateness of valuation and consolidation rules and significant estimates made by management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the financial position and the assets and liabilities of the Group as at December 31, 1999 and the results of its operations for the year then ended in accordance withcurrent legislation and regulations applicable in Belgium and that the information provided in the notes thereto is satisfactory.

Additional opinionThe management report contains the information required by law and is consistent with the consolidated financial state-ments.

Brussels, April 27, 2000

DELOITTE & TOUCHE DELOITTE & TOUCHEReviseurs d’Entreprises s.c.c. Reviseurs d’Entreprises s.c.c.Represented by Claude Pourbaix Represented by Philippe RoelantsPartner Partner

This is a free translation of the original French text for information purposes only.

1

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11

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1

2

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1

1

26

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16

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41

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112

3

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28

1

1

Verviers

Brussel

Hasselt

Nivelles

Waterloo

Tournai

Ronse

La Louvière

Jemappes

Froyennes

NamurJambes

DeinzeRoeselare

Wijnegem

SchotenTurnhout

Schilde

HouthalenMol

Mechelen

LeuvenTielt-Winge

Korbeek Lo

Châtelineau

CouilletBoncelles

Huy

Seraing

Fléron

HerstalRocourt

Liège

GentBrugge

Kortrijk

Charleroi

Arlon

Knokke

BiergesBraine l'Alleud

Eke

Luxembourg

Mons

Middelkerke

Châtelet

Bruxelles

Kapellen

GenkBeveren

St. Truiden

Maasmechelen

Antwerpen

Aalst

Malmédy

Dunkerque

Lille

Valenciennes

Saint Quentin

RoncqBéthune

Amiens Le Havre

Rouen

EvreuxCaen

MantesMeaux

Reims

Metz

Nancy

Strasbourg

Colmar

Mulhouse

Besançon

Le Creusot

Bourg-en-Bresse

LyonChambéry

L'Isle d'Abeau

Annecy

GrenobleValence

Avignon

Aix

Aubagne

Salon de Provence

MarseilleToulon

Fréjus

Nimes

Montpellier

St. Jean de Vedas

Toulouse

Pau

Andorre

Bordeaux

Angoulême

Limoges

Riom

Albi

Orléans

Chartres

Montargis

Auxerre

Clermont Fd

Poitiers

ToursAngers

Rennes

St. Brieuc

Cherbourg

BrestMorlaix

Quimper

Lorient

Nantes

Anglet

Bayonne

BéziersNarbonne

Perpignan

Loubet

St. Etienne

Le Puy

TroyesParis et RP

Hautmont

Villeneuve

Dieppe

CannesSaint Raphaël

Antibes

Liévin Englos

Assevillers

Villeneuve d'Ascq

Compiègne

Beauvais

Cambrai

Creil

Dijon

Montbéliard

Belfort

Nice

Tourcoing/RoubaixCalais

Le Mans

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2 2

3

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2

1

3

4

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3

35

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47

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15

7

9

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3

2

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1

1

1

3

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4 3

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2

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2

3

1

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1 1

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1

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3

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3

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1

2

23

1

1

1

80

1

Villers1

Trelissac1

QUICK restaurant locations

AS AT DECEMBER 31, 1999

France 293

Belgium 106

Luxembourg 6

Netherlands (closed in 01/00) 2

The Quick logo, Big, Big Bacon, Big Cheese, Big Fresh, Big Swiss, Big Tom, Big Western, Breek de sleur, Cheeseburger, Chick Chicken, Chick’n Toast, Chicken Dips, Chicken Filet, Come on,

De verrassers, Deliquick, Douceur de saison, Fishburger, Fresh’n Quik, Fresh’n Toast, Giant, Halte à la routine, Happy Quick, King Fish, Les inventives, Long Bacon, Long Cheese, Long

Chicken, Magic planet, Mat’n Toast, Q Quick, Quick Fresh, Quick Magic Box, Quick Quality Burger, Quick Star Bacon, Quick Star Forest, Quick Star Pepper, Quick, de ene hamburger is de

andere niet, Quick, les hamburgers aussi ont droit à la différence, Quick’n Toast, Quickies, Quick’n Fresh, Seizoensverleiding, Softy, Softy Cup, Star Chef, Star Fakir, Star Vaudou, Swiss’n

Swiss, Swiss’n Toast, Triple Swiss, Winter Toast are registered trademarks of Quick Restaurants S.A.

RESTAURANTS OPENED IN 1999

France - company owned

Greater Paris Villiers sur Marne

Caen Mondeville

St Etienne Expo

Toulouse Blagnac

Paris Seine Left Bank

France - franchised restaurants

Annecy Epagny

Villars

Creil Nogent

Paris Pantin

Greater Paris Roissy 2

Trelissac

Lille Faches Thumesnil

Angoulême

Pessac Rocade

Belgium - company owned

Aalst

Belgium - franchised restaurants

Namur Champion

Malmédy

Grand Duchy of Luxembourg

Luxembourg Gare

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1

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1

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1

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2

1

1

1

1

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26

1

1

1

16

11

1

1

1 1

41

13

11

33

1

112

3

11

1

28

1

1

Verviers

Brussel

Hasselt

Nivelles

Waterloo

Tournai

Ronse

La Louvière

Jemappes

Froyennes

NamurJambes

DeinzeRoeselare

Wijnegem

SchotenTurnhout

Schilde

HouthalenMol

Mechelen

LeuvenTielt-Winge

Korbeek Lo

Châtelineau

CouilletBoncelles

Huy

Seraing

Fléron

HerstalRocourt

Liège

GentBrugge

Kortrijk

Charleroi

Arlon

Knokke

BiergesBraine l'Alleud

Eke

Luxembourg

Mons

Middelkerke

Châtelet

Bruxelles

Kapellen

GenkBeveren

St. Truiden

Maasmechelen

Antwerpen

Aalst

Malmédy

Dit jaarverslag is ook verkrijgbaar in het Nederlands. Ce rapport annuel est aussi disponible en français.

QUICK RESTAURANTS SA

Administrative headquarters

Grotesteenweg 224 b 5

B-2600 Berchem

T +32 3 286 18 11

F +32 3 286 18 79

Registered office

Rue du Damier 26

B-1000 Brussels

RCB 370279

TVA BE 412 121 524

Les Mercuriales

40, rue Jean Jaurès

F-93176 Bagnolet

Cedex

T +33 1 49 72 13 00

F +33 1 43 63 59 13

Michel Sellier

Administration

& Finance

T +33 1 49 72 16 09

F +33 1 43 63 59 13

Roland Higgins

Communications

T +32 3 286 18 11

F +32 3 286 18 79

France

T +33 1 49 72 43 21

F +33 1 43 63 59 13

Belgium

T +32 3 286 18 11

F +32 3 286 18 79

FRANCE QUICK SA FOR ALL ADDITIONAL INFORMATIONPLEASE CONTACT:

INFORMATION ONFRANCHISES

Documents

report 1999 annual - bib.kuleuven.be · 5 Serge Hercberg. Key ﬁgures Systemwide sales in BEF/EUR millions 1999 1998 1997 1996 1995 1999 1998 1999 1998 1999 1998 1997 1996 1995 26