Hello, and welcome to today's AmRest Q3 2023 results call. My name is Bailey, and I'll be the moderator for today's call. All lines will be muted during the presentation portion, with an opportunity for questions. Good afternoon. ... Now, the market conference can begin, so please go ahead. Again, good afternoon, good morning, ladies and gentlemen. As announced, my name is Lukasz Wachelko. I'm presenting Wood & Company, and I have the pleasure of moderating another call with AmRest. The company is being represented by CFO, Eduardo Zamarripa, and Deputy Director and Chief of IR, Santiago Camarero. Guys, not to steal too much of your time, the mic is yours. Thank you, Lukasz, and good afternoon, and thank you for joining us in AmRest's third quarter 2023 results presentation. Another quarter with good news to share. In a still challenging environment, AmRest's business dynamics continued to show a remarkable growth in most of our markets, and this time together with a recovery in profitability levels. Let me show you these things in our presentation. In slide two, you can see part of this essence of AmRest's business model. A group with a portfolio of more than 2,100 restaurants spread across 21 different geographies, through which more than 44,000 employees provide a distinguished service to over 30 million customers every month. This geographic diversification is complemented by a diversified portfolio of iconic first-class brands that meet the needs of our customers on different consumption occasions, which nonetheless has big bias in terms of capacity towards the quick service and coffee segments. In addition, this portfolio of brands maintains a good balance between franchise and property brands that combined provide a critical size for our logistics and central kitchen models to offer a clear advantage through the generation of economies of scale. Going into the slide three, let me summarize the most relevant events for the third quarter of the year. Once again, we have a quarter where we have to talk about record revenue generation. AmRest sales reach EUR 632.8 million, with a growth of 11.6% versus the same period of last year. These commercial dynamics continued to be supported by an increase in the number of transactions that grew by 3%. In terms of profitability, the EBITDA generated in the quarter increased to almost EUR 111 million. That translates into an EBITDA margin of 17.5%, the highest quarterly figures in the last two years. Third, the profit attributable to the equity holders of the parent company amounted to EUR 27.1 million. Four, the leverage ratio continues to drift slightly downwards to 1.8 times, compared to 1.9 times in the previous quarter. And finally, the number of restaurants reached 2,143 after a net increase of 20 new units in the quarter. In slide 4, you can find the latest organic and non-organic portfolio changes. There were no new non-organic changes from the quarter after the disposal in May of the 213 restaurants that we had in Russia. In terms of organic changes, we opened 24 new restaurants in the quarter, and we closed 4 in the context of our optimization portfolio exercise. In slide 5, we are illustrating AmRest's revenues and main profitability measures trend for the third quarters of the last years. First, as I mentioned before, sales reached almost EUR 633 million, with a growth of 11.6% on a comparable basis to the same period of 2022. Second, the EBITDA generation also showed an excellent performance, with a growth of 16% in the quarter, reaching EUR 111 million, that represent an EBITDA margin of 17.5%. Finally, the EBITDA increase cascades strongly in the operating profit of the group, which, after growing by 36%, reached EUR 52.9 million, that represents an EBIT margin of 8.4%. These excellent results are the consequence of the value generated by all of our brands. In this regard, I would like to share with you the commercial vision and position of them. Let me start with a quick service and coffee brand in slide 6. On Starbucks, iced coffee is showing the biggest growth dynamics, especially among young customers. This type of products is helping us to extend the Starbucks into younger age groups. On KFC, we are focusing in reinforcing our iconic product's image. They are known and loved products by our customers. We reinforce their excellent quality, while we deliver great value for money. All of these are combined by simply the best offering in our KFC restaurants. In Burger King, we are meeting customers who expect something more from burgers, a unique taste, and unconventional ingredients. This is how our gourmet line, King's Collection, was created. Premium burgers that tend with flame-grilled beef, crispy brioche bun, and the highest quality ingredients. On slide seven, let's review our fast and casual dining brands. In Sushi Shop, we have introduced new hot dishes that are providing a nice complementary fit to our existing menu offer. Japanese curry, Yakisoba or Ramen, are dishes arranged by our chefs in the spirit of Japanese gastronomy and with little bit of Sushi Shop magic. In Pizza Hut, a strong promotion in pizzas was launched in September through all-you-can-eat mechanism with new range of flavors. In La Tagliatella, we have a very good example of our commitment to improve eating habits. We are creating and promoting highly nutritional menus. On this occasion, La Tagliatella has launched the Cuore Felice project in collaboration with the Universidad de Navarra, where we offer a selection of dishes made for raw materials with a nutritional profile, typical and a heart-healthy diet. And finally, in Blue Frog, the innovation of the core menu. We are adding more Asian and fusion flavor products such as Korean, Chinese, and new ingredients that provide great experiences, allowing the consumer to enjoy more tasting at the same budget. Returning into the more financial part in slide 8, all the distribution channels recorded again higher levels of activity. Dine-in sales that were 46% of our total sales, continued to show the highest level of growth, followed by takeaway and drive-thru, with delivery being the only channel that did not achieve double-digit growth. On the other side, digital sales continued to make progress and set a new record in the third quarter of the year. In slide 9, as in previous quarters, we are illustrating the evolution of the 12-month trending average revenue per equity store, where once more, we continue to report a consistent attempt that supports improvement in quality of our sales. As we have discussed in several occasions, we are becoming more efficient, reducing the resources that we need to generate sales. In slide 10, let me share a few thoughts on the cost pressure. First, we are seeing price moderations at aggregated level, although we cannot forget that we are still in an environment of abnormally high inflation, at least from the perspective of recent decades. Regarding the price moderation highlights, this reduction is not linear. Some countries are showing volatility in their inflation level, especially affected by the increases in energy prices during the summer months, and uneven behavior across different products, some of them affected by adverse weather conditions. Nonetheless, starting the moderation in the cost of supplies and energy, together with advances in efficiency and higher sales, is enabling us to start the recovery of profitability levels. And with this, I will pass the mic to Santi to cover the main financial highlights and trends on the quarter. Thank you very much, Eduardo, and good afternoon, everyone. It's always my pleasure to have the opportunity to share with you all our results, and to discuss on any issues that may be of interest to you during the call. All in all, today, we are presenting new advances in the quality of our results and another quarter of strengthening in the company financial profile. A further step forward in our objective of growing in a sustainable, profitable, and inclusive manner. If we now go to the slide 12, let me start reviewing the main financial highlights for the third quarter of the year. Group revenues increased by almost 12% to EUR 633 million in the quarter, with a same-store sales level of 9% versus last year. In this regard, the most up-to-date reading is 11% year to date. Second, in nominal terms, the EBITDA generated was almost EUR 111 million. This is a growth of 16.5%, higher than the growth in sales, which led to an increase in margins. Third, the operating profit conversion was higher than in previous quarters. AmRest generated an EBIT of almost EUR 53 million. This is 36% more than in the previous year. This figure represents a margin of 8.4%.... And And finally, CapEx is accelerating in line with the progress in the group's result. In this regard, almost EUR 44 million were dedicated to CapEx during the quarter, compared to almost EUR 31 million during the same period of 2022. This increase in investment is translated into new restaurants openings, more refurbishment, and accelerating and tackling more digitalization projects. Diving into our sales evolution, in slide 14, you can appreciate that the strong commercial momentum continues for AmRest, despite the economic growth slowdown that we have been seeing in the main European countries, where undoubtedly, the strength of the delivery market continues to be a key factor for us. Nonetheless, this commercial trend illustrate well the resilience of our business model and our capture of market share, as support increase in the number of transactions that we are reporting. In the slide 14, you can find the quarterly evolution of our EBITDA and operating profit. And I would like to share two main ideas on this slide. The first one, AmRest third quarter EBITDA is consolidated about the EUR 100 million watermark reached on the second quarter of the year. And second, the path towards margin recovery is also consolidated. We are selling more and with higher margins. In this regard, the EBITDA margin almost reached 18% in the quarter. This is the highest level since the global supply problems and inflationary pressures around the world began to rise a couple of years ago. Let me emphasize the important challenges that continue to be ahead of us, and that still we are confronting a non-standard situation. However, I would like to remark the enormous progression that we are doing in terms of efficiency, that imply a structural and long-lasting changes that are starting to pay off. And equally important, provides key competitive advantages for our future. If we move now to the slide 15, you can find the cash flow generation of the group. In addition to the strong operating cash flow generation, let me focus on the financing cash flow that reach almost EUR 122 million outflow, and has been abnormally high in this quarter for two main reasons. The first one is that we have repaid almost EUR 70 million of debt using part of the excess cash that we have been accumulating during the last months. Second, is consequence of the higher interest rate that are impacting the financial cost of the group. With regards to the financing cash flow, as we mentioned before, we continue to increase investments in line with our guidance and also in line with the results improvement that we are reporting. Nonetheless, let me also share that we expect to maintain the strong seasonality shown in previous years, where in the last quarters, we concentrate the highest level of investments, especially due to the opening of new restaurants. In this regard, if we move to the slide 16, we can find the number of new restaurant openings and closures undertaken on the last quarters. AmRest closed the quarter with a portfolio of 2,143 restaurants after opening 24 units and closing 4. In year-to-date figures, openings reached 53, while closures amounted 38 units. As I mentioned before, we reaffirm our expectations of opening more restaurants in 2023 than we did in 2022, when we opened 109 units. Therefore, as in previous occasions, the last quarter of the year will concentrate a significant number of new openings. All this work done is gravitating and keeping a balance around three main concepts that I want to share with you. The first one is sustainable value generation, the second is growth, and the third is balance sheet strength. If we can now move, please, to slide 17, we can see the evolution of our net financial debt and leverage ratio, that closes the quarter at 1.8 times EBITDA. As you know, the improvement in operating results is making it possible to combine increased investments with further progress in strengthening the balance sheet. In this regard, in the last quarter, almost EUR 70 million of excess cash has been dedicated to the repayment of debt.... This together with higher EBITDA generation, was once again led to a reduction in the leverage ratio, which stood at 1.8 times at the end of the quarter, compared to 1.9 in the previous quarter. In addition, the strengthening of the balance sheet is also evident in terms of the equity accumulation that exceeded EUR 70 million at the close of the third quarter. Thanks to the accumulations of profit from continued operations, as well to the positive effect generated by the disposal of the Russian business on the second quarter of the year. As last remark, let me point that this situation allow us to comfortably comply with our financial covenants, that, as you know, establish a leverage ratio lower than 3.5 times and an interest coverage ratio of more than 3.5 times. Moving to slide 18, you can find our financial debt structure and the maturity profile, with no material changes during the quarter, besides the debt repayment that I mentioned earlier. Now, as usual, let's review the results by different segments that you can find in slide 19, with the breakdown of revenues, EBITDA, and the number of restaurants that we have in each region. Starting by our biggest market, you can find information of Central and Eastern Europe in slide 20. Revenues in the region reached EUR 354 million in the quarter, an increase of more than 70% versus the same period of 2022. All of our main markets in the region grew at double digits. If we had to highlight a market, once again, I will remark the excellent performance in Hungary, with revenues growing by over 30%. EBITDA generated in the quarter amounted almost EUR 79 million, after increasing by 27%, and resulting in an EBITDA margin of more than 22%. Once again, the improvement in margins is generalized in all the markets, which now have EBITDA margins above 20% threshold. Finally, in terms of footprint, we closed the quarter with a portfolio of 1,138 restaurants in the region after the opening of 11 units and the closure of 1. This brings to 22 the new restaurants open and to 11 the closures for the year. Moving to slide 21, we can find Western Europe results. Revenues in the region grew by almost 8% to EUR 231 million in the quarter. The strongest gain were achieved in Germany, where revenues increased by 21%. On the opposite side, France continues to be lagging the rest of the markets. In terms of profitability, EBITDA stood at EUR 34 million, with a growth of 23%. This figure represents an EBITDA margin of almost 15%. This is around 2 percentage points higher than a year ago. Once again, the evolution in the German and French markets shows the two sides of the coin. In terms of the portfolio, the number of restaurants in the region reached 915 units at the end of the quarter, with the opening of 9 units and the close of 2. This implies 20 new openings for this year and the closure of 25, of which 17 of them were concentrated in France. Finally, in slide 22, we have China, where the depreciation of the renminbi against the euro is affecting the information that we are displaying in these graphs. Revenues in the region stood at almost EUR 26 million. This is a decline of 4% versus last year. However, in constant euros, sales recorded almost double-digit growth, supported by an increase of transactions in our restaurants. The commercial positioning of Amrest's business in China, both due to its geographic presence concentrated in the fastest-growing urban centers and the attractive value for money proposition offer, continues to provide an interesting opportunity for growth. EBITDA generated in the region amounted EUR 5.6 million, representing an EBITDA margin of 22%, which is almost seven percentage points lower than in the same period of 2022. As last point, the number of restaurants in the region reached 90 restaurants after opening of 4 and the closure of 1. The cumulative annual numbers of openings are stand at 11, with only 1 closure. This is from inside, Eduardo, if you want to conclude with some remarks. Many thanks, Santi, and many thanks to everyone. We're very pleased with the results presented today. At the same time, we are aware that we still have significant challenges ahead of us, but our commitment is to continue to work for making AmRest a better company and a clear leader and the referent in our sector. In this regard, the results presented here today demonstrate a further step forward in our progression towards this goal. With this, we are open to any questions that you may have. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. If you've joined us via the webcast, please submit a written question. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question, and please ensure that you have unmuted locally. We will just pause here as questions are registered. Okay, maybe in the meantime, I will- First question. Yeah, can I take, or make use of my moderator's privilege? I wanted to ask about one of the markets of yours, namely Germany, because it was one of the weakest points for a longer while. But in fact, this quarter was standing out both in terms of the dynamics of sales and profitability. So if you could elaborate more, what was behind this major turnaround of troublesome market, not that long ago? Hi, Lukasz. There are two main, two main dynamics on this and the profitability. I would say, first, the level of sales continues strong. Same-store sales, same-store transactions continue at a very positive, at a very positive level. Of course, as you saw in our comment, at different levels within the regions, the regions that we have within AmRest, AmRest position. And number two is, given that this level of sales and some reductions, as we say, or moderation in terms of the cost, mainly on the cost of food, that helped, that also helped, in an important, in an important way. No? Particularly that you mentioned Germany, the recovery that Germany is having is quite, let's say, outstanding from comparing to the rest, to the rest of the region, no? And the two main brands that we have over there for KFC, the same-store sales and transactions are very positive, but mainly I would say that Starbucks is the one that is outstanding in terms of results. And things that we are doing within the brand, as we were mentioning, it's, of course, always understanding our consumer, launching new products that comply with this, and having a lot of dynamics in terms of our off- offerings, coffee, drinks, food. So extending the offering that we are having. Besides, also, we are particularly investing in, in Starbucks and particularly in Germany, in the new, POS system, which help us to understand more the consumer and, give a better, give a better price. Okay, thank you. Just to follow up, after this remarkable recovery of German market, what are you planning for France? Because I must say that among all the strong markets of yours, France lag behind. So what kind of medicine are you planning to apply there? Sorry, Lukasz, can you repeat? We miss a little bit the line. Okay, so, well, you've turned around the German market, which was one of the weakest of yours for a longer while. Currently, I'd say France is lagging the other geographies. So what are the plans to turn around the business in France? We have two topics in France. Economy is one, and the sector is suffering in France. No, it's not only our brands. No, of course, we always compare to what is happening in the economy and the sector, and France is a region which is suffering at this moment in terms of the restaurant industry. And particularly for us, what we are doing in KFC and in Sushi Shop is incentivizing the transactions, and that's crucial for us, no? Transaction is something that we cannot lose, no? So we are focusing on the top line in order to maintain our growth at the biggest pace that is possible, the revenues, and the rest will follow, no? One of the topics that we're listening here is, if drive-thru sales are there, the rest of the P&L follows, no? So that's our focus, on how to keep the traffic, how to keep the sales, the same-store sales. And now all our initiatives in terms of operations, in terms of marketing, right now are related to incentivize the consumption on that market. And of course, as you can imagine, in these times, also initiatives in terms of supply chain efficiencies in terms of the restaurants and all those things that follow. But the priority right now is in terms of the revenue. Okay, great. Thank you. Operator, do we have any questions from the room? Yes. Thank you. Our first question comes from the line of J.P Monaldas from the LP Funds. Please go ahead. Your line is now open. Yes, hello, and congratulations again for a great quarter. Quarter after quarter, it's, you know, superb results. I have three questions. The first one is relating to La Tagliatella. Are you thinking of extending the format to other countries than Spain and Portugal? The second question is regarding the bakery segment, where in some countries it's quite popular. Are you thinking of developing that segment, maybe not now, but in a couple of years from now, if and when you can afford it in terms of leverage? The last question is, you have less and less Polish investors, according to Bloomberg. So is it not now start... Is it not, sorry, time to move your main listing to somewhere else, to NASDAQ, for example, where people are more familiar with the restaurant business and give and reward good management with better value, valuations. You in Poland, you feel a bit isolated and undervalued. I can see from other restaurant business I'm invested in. Good. Thank you, JP, for the questions and results. And we are, we're very happy, as you stated, with the results, no? But going direct to your questions. In terms of Tagliatella to other countries, right now, as you stated, Spain is our core market, and it will continue being. And we still think that there is room for growth in terms of this market. In fact, going to major cities that we still have room for growth and also going to some other cities in which not necessarily we are present right now. And one thing that we need to take into consideration, which is, like, the best format that suits each of the regions in which we can be opening a store. So still greenfield to have opportunities in France, and we see exactly the same in Portugal. Up to now, this is our focus in these two countries. We may think in the future to have other latitudes, but not in the short term. In terms of the bakery, as you were saying, this is a very interesting concept, no? And this is something that we continuously follow, no, being, as you mentioned, bakery, one of the most important and interesting ones, no? As you said, it was not the proper moment, let's say, to look into that. But every day, as you see our results, as you see our leverage, as we see the opportunities, is something that is discussed within the company as opportunities that may arise at co- and that could, at some moment, make sense for the company. But definitely, it's a very attractive segment. And in terms of your third question, in terms of the markets that we are present right now, we have our dual listing in Poland and in Spain, and that's where we are at this moment, no? And right now we are not considering any new market, no, but it's something that always is worth to analyze, as you point out. Yes, no, I think that you're raising a quite important point, no, regarding a little bit the isolation that we have in terms of our segment, no? So, as you mentioned before, in the States, it's and in the UK, no, there are quite a few companies. ... of the sector trading there, and investors will actually visit this with a different perspective and understanding the business more from this side, no? So, the work that we are doing right now is to try to be educational, to try to be proactive, to deliver what we are promising into the market, and to show the beauties, you know, that we have in terms of our business model, no? We have a business model where we don't have credit risk, because you receive all the money that you have up front, and where you enjoy the benefits and a buffer of a negative working capital. So there are, like, quite very unique advantages of this very diversified business model in terms of brands, with the complementarity between franchise, proprietary brands in terms of geographies, that, what we, we hope not little by little, we are showing to the market the value that it has, through the results that we are delivering. Thank you very much. Thank you. We have a written question here that comes from Janusz Pięta from mBank, and they ask: Would you-- how would you assess the state of the European consumer? Do you see any signs of an improvement in the consumer environment? Thank you. Okay. Thank you, Janusz, for that. This is very challenging times, as I was stating. Now, in terms of the dynamics, what we can see up to now in most of our brands and regions is that the level of transactions continue to be strong. And that's how we sense, that's how we sense our consumer, no? If we, of course, go to the economics and whatever we have, like, within the different countries, different expectations from the official statistics, no. But up to now, what we can see and what it's showing in our brands is that the transactions continue at a very healthy level. Yes, no, I mentioned that another topic, no, that we expect to start to be more relevant in the quarters to come, no, is different dynamics across different countries, no? What we see is that at the end of the day, the high levels of inflation, the different pace in terms of the tightening of the monetary policy, no, is making a certain level of desynchronization among the different economies, no? So in this regard, what we really expect now is that Central and Eastern European markets are going to have a little bit harder, but perhaps the worst is already behind those economies in terms of consumption, and perhaps Western European economies are going to be lagging a little bit, a little bit strength, no? But once more, no, what, what is really important, and we are trying always to highlight, no, coming to my previous point before, no, is the resilience of the business model, that we have and the complementary of the offer that we have through our restaurants, no? So if things goes well, we sell. If things doesn't go well, we continue to be selling, no? So for us, what is really important, and one of the key KPIs that I know we're very focused on, is, in terms of the employment, no? We offer something that is very attractive to a very modest price. So as long as the people has employment, has a possibility to be working and some income, basically, the way of providing is a service that is essential. And this perception of essentiality is increasing through generations. So more and more young people is using the services at the restaurant in the normal daily lives. So in some markets, what we are seeing since some 2 years ago, is that the volume of business at the restaurant will represent much higher figures than the business that you have or the experience that on those countries you can find in the number in the normal shops for buying food. So this is something that is a trend that is there and that we are going to taking advantage. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad, or please do submit a written question. We currently have no questions registered, so I'd like to pass it back to the management team. Okay, so maybe I will jump in if I can, because I have a couple of questions. So first of all, it's fairly likely that after the elections with new government forming in Poland, Sunday trading ban will be removed or loosened. What's your view on that, on extending your, sorry, firepower in the shopping malls in Poland over Sunday, likely coming next year? On that, Lukasz, one of the, the cycle of opening, of opening a store is quite long, no? In fact, the, restaurants that we want to open in 2024, the vast majority of them, we already have them committed, no? So this is always that, we always look, the development team has always the work in order to find the best locations available, whatever that means, no? And we have a mix into, a, a mix that, we want to follow in terms of, inline street to the ones that we have, as drive-throughs, the ones that we have in shopping malls, and we always look for diverse location that make, that make sense for the, for the, for the company. But one thing to consider, as I was mentioning, is taking into account that opening a restaurant is something that takes... the cycle is around a year to open, to open one, no? But, but what is relevant, in here is to find the best locations, because that's, that's part of the secret of, of the business: location, location, and location. Okay. But we understand that given that your closings were only for this quarter, the lowest number in last couple of years, and in fact, the net, net rollout was the strongest among last couple of quarters, is it right to assume from our end that you are pretty close to ending the restructuring, and going forward, we should be seeing more of a net opening than we've seen before? So one of the points that we always remark, you know, is that the closure of the stores has to be understood as an intrinsic part of our business model, no? So it's true that if you are looking for a short-term catalyst in terms of valuation, you can focus on the absolute number of restaurants that you have. But what we want is really to create value, and it's normal to have certain level of closures because some concepts may be outdated, because dynamic changes in regions, because we make mistakes. So there are many different reasons, you know, that really support, you know, the fact that the closures of restaurants is an intrinsic part of our business model. So what we were saying is that on previous years, when we started really with this model, we were participating in an abnormally high level of closures. This is something that little by little, we should be leaving behind, no? And the number of closures, going forward, it should be lower than on previous years. But once more, let me remind, no, that this, it has to be understood as an intrinsic part of our business model. Okay, thank you. And if I can go back to my question on the trading ban, which we have currently in Poland, restaurants are allowed to be opened, but most of the shopping mall is closed, so the food courts are suffering. It's likely that the Sunday trading ban will be removed or loosened next year with new government coming to power. What would be your view on the potential impact on AmRest operations? So it's something that we really need to, to finish, you know, to make numbers. What we are doing right now, for example, is to be working on the budgeting for 2024. As always, on next quarter, we will try to provide you the guidance of how we see 2024, and this is part, you know, of the things that we need to, that we need to process. So we are working on it. Okay, great. Thank you. Operator, are there any more questions in the room? There are no questions registered. As a final comment, I would like to thank you for your participation in the third quarter AmRest conference call, and looking forward to see you in some of our restaurants in the near future. Thank you very much, and have a nice day. Thank you. Thank you. This concludes today's conference call. Thank you all for your participation. You may now disconnect your line.