Good afternoon and welcome to Sphera Franchise Group earnings call. This morning we published our Q3 2024 results, which are available on our website in the Investor Relations section, as well as on the Bucharest Stock Exchange website under Sphera Franchise Group SFG Investor Profile. My name is Zuzanna Kurek. I am Investor Relations Officer at Sphera Franchise Group, and I will be moderating today's call, during which we'll discuss in detail another quarter of strong performance of our group. Before we begin, please note that this call is being recorded and that the recording will be uploaded on Sphera Franchise Group website next week. By joining the video conference as stated in the call invite, you have automatically and implicitly consented to this recording. If you do not wish to be recorded, we kindly ask you to leave the call. In terms of logistics, we will follow our standard call setup. Management will begin by presenting the nine months of 2024 results, followed by a Q&A session. Please note that all the participants are currently muted. If you have a question, feel free to type it in the chat box at any time during the call. We will address the questions in the order they are received once the management's presentation concludes. Lastly, as always, I'd like to remind you that we might be making forward-looking statements today regarding the future performance of Sphera Franchise Group and that actual results may differ materially. We encourage you to review the disclaimer included in our presentation, which you can now see on the screen. This disclaimer applies equally to all the statements made during today's call. Thank you for your patience. With all the organizational details covered, we can now get started. I'd like to introduce the management team joining me today to present our Q3 2024 results. I am pleased to be joined by Călin Ionescu, Chief Executive Officer, Valentin Budeș, Chief Financial Officer, and Monica Eftimie, Chief Marketing Officer. I will now hand over to our CEO, Mr. Călin Ionescu, who will share insights on our performance over the first nine months of 2024. Călin, the floor is yours. Thank you. Hello everyone and welcome to this year's final earnings call. I'm pleased to share some good news as we wrap up 2024, aligning with the positive outlook we had at the beginning of the year. Today's results reflect strong performance in both sales and profitability, along with positive developments across our brands and markets. We concluded the first nine months of 2024 with record sales once again. Our normalized net profit reached RON 71.4 million, which is 66.3% higher compared to the same period in 2023, and accounts for nearly 90% of the normalized profit achieved in the entire year of 2023. We also experienced our best third quarter ever in terms of sales, EBITDA, and net profit. Valentin and Monica will provide more detailed insights shortly. This year has been quite busy for us. We have opened seven new restaurants so far: five KFCs in Romania, one KFC in Chișinău, and one Taco Bell in Bucharest. We are steadily expanding our network, and this development strategy has already proven effective, as the new restaurants are contributing positively to the group's overall performance, validating the added value of each location. A significant milestone in our strategy is the acquisition of the franchisee right for the Cioccolati taliani brand. I would like to highlight the importance of this step for the group's development. With Cioccolati taliani, we are tapping into new growth opportunities, which we see as crucial for long-term success. Our operational experience and business results in Italy through our KFC franchisee network represent a strong base for diversification, allowing us to capitalize on existing synergies. The acquisition of Cioccolati taliani franchisee rights aligns with Sphera Group's growth strategy, allowing us to expand into a new consumer segment and develop in a healthy manner by adding a profitable brand to our portfolio. This strategic move strengthens our leading market position and better positions us by responding to a new category of customer needs, while delivering to our promise to further development and profitability boost. In the following months, we will get back with news on this topic. Looking ahead, there are signs of concern. Romania needs to go on a diet. The governor of the National Bank states when presenting the latest forecast for inflation. The rate is now expected to rise to 4.9% in 2024, compared to the previous estimate of 4% and to 3.5% in 2025. Importantly, these forecasts do not take into account the fiscal correction anticipated after the elections. Moreover, the National Bank of Romania has kept the interest rate unchanged, indicating a cautious approach to future development. These updates are not surprising to us. Given the high deficits, the government, at the beginning of its four-year mandate, has enough leeway to increase taxes. However, the impact of the private sector can vary significantly depending on the specifics of the tax increases and whether they are accompanied by much-needed reforms of the inflated budgetary apparatus. At this point, we have no indication of such reforms, but we have received assurance that any fiscal changes will benefit for the six-month legal implementation period. Recent positive consultations with the Ministry of Finance give us some confidence that this normal process may be followed in 2025. Nevertheless, we are experiencing a period of uncertainty, which we are all aware of. However, we have been navigating uncertainty for over four years now. Since its inception in 1994, our business has driven through six electoral cycles, and we are confident that we will continue to succeed through the next six, regardless of what next year may bring. I will now hand it over to Vali, who will guide you through the financials that highlight the strong fundamentals of our business and support our optimistic long-term outlook. Vali, please. Thank you, Călin, and welcome everyone. I'm excited to discuss the details of our performance over the first nine months. This breakdown will highlight the strong fundamentals behind our impressive results. Key highlights include a double-digit increase in profitability at KFC Romania, a continued profitability trend for KFC Italy and Taco Bell, a reduction in losses for Pizza Hut, and an excellent EBITDA margin for KFC Italy. The results for the first nine months of this year have set new historical records. Our consolidated sales reached RON 1.14 billion, reflecting a 6.4% increase if we are comparing the figures with the similar period of last year. This growth is a testament to our strong business model and the commitment of our team to ongoing success. Most of the revenue was generated in Romania, where sales of RON 986.7 million were recorded, with 86.3% weight in the total, while the market in the Republic of Moldova had the highest growth of 10.9% compared to the same period of 2023. These results reflect consistent performance and stable expansion in key markets. KFC brand continued to lead in performance, achieving a sales growth of 7.7% across the three markets during the first nine months of the year. Pizza Hut experienced a 7.7% decline in sales due to the restaurant closure over the past 12 months, aimed at streamlining the activity. However, as we'll outline later, Pizza Hut is making significant progress in its business turnaround, particularly evident in the third quarter, with improved profitability. Taco Bell continues its steady growth, reporting a 7.1% increase in sales and an impressive 83.8% rise in EBITDA. The brand reached break-even in the second half of last year, capitalizing on the continuous investment since its entry into the Romanian market. The profit of RON 2.1 million and the spectacular increase in the EBITDA in the first nine months, compared to the similar period of 2023, confirm the brand's ability to contribute long-term to the group performance. We are very confident in Taco Bell prospects, which is why we opened a new unit in November and plan to continue expanding the restaurant network. Going into the details of the nine-month performance, our restaurant operating profit experienced a significant increase of 41%, reaching nearly RON 142 million. This growth occurred as restaurant expenses rose at a slower rate compared to sales. Additionally, normalized EBITDA saw a double-digit increase of 36.2%, totaling RON 129 million. This improvement can be attributed to effective cost control measures that boost our operating profit. EBITDA remained strong at 11.3 percentage points during our first nine months of this year. The margins differ by brand, with US Food Network Moldova leading at an impressive 19.3%, followed by US Food Network Romania KFC at 13.3%. Taco Bell with the entity California Fresh Flavors has seen improvement, reaching a margin of 9.6%, thanks to an exceptional third quarter in which it achieved 12.8 percentage points of EBITDA margin. Additionally, ARS, which is the entity for Pizza Hut, increased its EBITDA margin by 2.5 percentage points, reaching only minus 2.9% on a year-to-date basis. Moving on to the performance of the third quarter, I'm delighted to present once again our record-breaking results. We achieved total sales of RON 403.4 million, surpassing the 400 million milestone for the first time in a single quarter. This marks a 6.4% year-on-year growth and aligns with our expectations of progressive sales increase throughout the year, with peak performance usually occurring in the final quarter. In Q3 2024, there was a significant rise in restaurant operating profit of 35.4%. This growth was driven by restaurant expenses increasing with a slower rate than sales, with expenses up by 3.1% year-on-year compared to a 6.4% rise in sales. As a result, the expense-to-sales ratio fell by nearly 3 percentage points, bringing it down to 86.7% in Q3 of this year. We experienced a double-digit increase in both operational profits, plus 61.3% to RON 38.5 million, and normalized net profit, a 30.8% uptake to RON 30.8 million. One small non-recurring normalization was applied only in 2023. However, for consistent reporting, the analysis refers to normalized net profit and EBITDA as well. Furthermore, the normalized EBITDA margin improved by 1.2 percentage points to 12.4% if we are looking to the quarter three of 2024 compared to the previous year quarter. Examining the nine-month performance more closely, all relevant indicators showed a double-digit increase. Very important operating profit for restaurants rose by an impressive 41%, while restaurant expenses only increased by modestly 2.9%, reaching RON 1 billion. These reduced expenses resulted in their share of total sales decreasing by nearly 3 percentage points, now accounting for 87.7%. All expense categories experienced single-digit growth. Food and material costs increased by only 0.9% compared with the first nine months of the previous year, totaling RON 358.3 million. This was achieved through negotiation efforts and cost control, which reduced this category's share of total sales by nearly 2 percentage points, bringing it down to only 31.3%. Additionally, efforts to support and retain employees led to a 4.3% increase in payroll, in line with the general labor market trends. In terms of profitability, the figures are quite impressive. The net profit doubled year- over- year to RON 71.4 million. The normalized profit also increased by 66.3%, reaching RON 71.4 million, which accounts for 90% of the total profit generated in the entire year of 2023. We continue to maintain a very healthy approach from a financial point of view, with a net debt-to-EBITDA ratio at its lowest level in the history of our company, standing at only 0.2 as a ratio. Moving on to the business updates, we have been actively expanding our network by opening new KFC restaurants in Romania, focusing particularly on drive-throughs, as mentioned also in the past. Additionally, we have added another unit in the Republic of Moldova. As of September, Sphera operated a total number of 472 restaurants across our markets, but we continue to expand, and we have opened one new Taco Bell unit in Bucharest in November. I'm very excited to share details about the newest addition to Sphera brand portfolio, the Cioccolati taliani franchise, which Călin briefly mentioned. The brand is well-known for its chocolate-based products, including ice cream, pastries, and coffee. We plan to develop the franchise in the Italian market, with the first Cioccolati taliani unit set to be opened in the beginning of 2025, requiring an estimated investment of EUR 500,000. Our goal is to open about four new units per year over the next five years, initially focusing on the northern region of Italy. Additionally, we are considering expanding into the Romania market as well, depending on the evolution of the local economy. All the significant achievements over the first nine months of 2024 are reflected in the performance of Sphera shares on the Bucharest Stock Exchange, which continued to outperform the stock market significantly. During this period, Sphera shares appreciated by approximately 53% compared to its only 15% increase in the BET index. Additionally, the total return of the stock, including the dividends paid in June, was 57.8%, while the total return index showed a 22% evolution. Furthermore, liquidity has improved visibly, with the trading volumes of Sphera shares being doubled to the ones for the same period of 2023. The total value of the transactions has nearly reached a four-time level. I would like to note that during the general shareholders' meetings on 7 October, the shareholders approved a gross dividend of RON 1.05 per share to be paid from the undistributed net profit of the financial year of 2023. The dividend was actually paid on November 7. This marks the second dividend payment in 2024 for our company, bringing the total annual dividend yield, which includes the dividend distributed in both periods, June and November, to almost 6%. In conclusion, Sphera Franchise Group has maintained a solid performance. We have achieved positive results across all our brands and in every market where we operate. By streamlining costs, we have significantly improved our profit margins, enhancing our ability to create added value for our shareholders. We continue to grow our restaurant network steadily, while also expanding our portfolio to ensure a broad and diverse foundation for our future growth. We are confident that our integrated approach, focused on optimizing operations and capitalizing on strategic investments, will support the group's long-term performance. Thank you, and now I will give the floor to Monica for the brand and marketing information. Thank you, Vai, and good afternoon. We had a busy year already, but with positive results, including for marketing. We faced two main challenges: increased competition and pressure from consumers. Our primary objective remains to increase transactions, so we aligned our campaign calendar closely with consumer needs, while increasing competitiveness through value offers and innovation across all three brands. I will first cover KFC's main initiatives aimed at driving transactions and consolidating the brand. And I will start with non-spicy strips, a campaign successfully launched this quarter, restating the brand's core attributes: freshly prepared chicken with a unique taste. A spin-off product innovation but aimed at growing sales through transactions was Spui Burger, a value offer communicated for the back-to-school period. Value for money perception is an attribute we constantly build up, both through disruptive offers such as Tuesday Bucket or Monday Burgers, the latter being a new initiative for this year that grows our category, and also through everyday value through our well-known Ceva platform. All three initiatives drove traffic in the stores and had positive store sale transaction numbers. In the third quarter, we continued to promote our new e-commerce platform. The communication campaign managed to increase the number of app downloads and transactions through this strategic channel. With the aim of optimizing sales and increasing footfall, we started a new wave of localized tactics in selected KFC stores and added new coupons in the KFC app. Winning on taste is a strategic pillar for KFC, so we launched a campaign that looked like a game show as a sequel to our last year's scheme in Bucharest, to reinforce that fresh chicken sourced from local producers is cooked by hand daily in our stores. Last but not least, in Q3, we opened two new drive-throughs, one in Sinaia and the other one in Craiova, and we had opening events and freebies for the first 100 clients. Now, moving on to Pizza Hut. Relevance and value are keywords for Pizza Hut for this quarter. The 30th anniversary of Pizza Hut in Romania was a very complex campaign through which we gave away three 30,000 prizes, as well as a substantial cash prize of EUR 30,000. The campaign started in Q2 and was finalized in Q3 with positive same-store transaction results and strong brand health KPIs. For the back-to-school period, we focused on improving transaction levels by launching My Box, a value bundle that offers three products at a special price, which generated increased trial. Disruptive value through buy-one-get-one-free Monday offer and abundant value through the relaunch of Duo Mix are two initiatives which attracted price-conscious consumers without cannibalizing sales. And now, moving on to Taco Bell. At Taco Bell, we continue to focus on driving trial and building brand. To increase consideration, we concentrated on value for products. As such, we launched a range of Grillers based on a popular permanent menu item. This proved to be a winning card as the campaign resulted in same-store sales and transaction growth. Another successful example on value on core is the campaign launched in September, Crunchwrap, a beloved value product where we innovated with a new ingredient. We continue communicating our pick-and-collect platform to increase consumer loyalty and our gaming platform, PlayMás, to increase awareness among Gen Z. Next, I will present the financial evolution of each brand. KFC has demonstrated a strong performance throughout the year. It maintains the leading status in Sphera's portfolio, registering a double-digit increase in normalized net profit, up 45.9% to 74.9 million lei, and normalized EBITDA, up 37.1% to 112 million lei. In Italy, the brand's evolution reflects the maturity of the market, with a 1.7% increase, while our stores in Chișinău continue to grow at a comfortable pace. The latest addition to our network in the Republic of Moldova, a food court restaurant opened in September, already contributes to the brand's growth. Pizza Hut's path to recovery is visible. The streamlining of the restaurant network has impacted sales, but the decline has been smaller than in the previous quarters. At the end of the nine months, the operating loss in the restaurants was only RON 0.3 million, an improvement of 96.3% compared to the previous year. Moreover, in the third quarter, the brand recorded an operating profit at the restaurant level of approximately RON 1 million and reduced the net loss to only RON 0.9 million. We are optimistic about the brand's future performance as we continue to implement our turnaround strategy. Taco Bell has been a standout performer, reporting a robust 13.1% growth in sales for Q3. This growth is indicative of the brand's increasing popularity and the success of our marketing initiatives. We remain confident about Taco Bell's potential for further growth in the coming quarters, especially following the latest opening in November. As you know, delivery has been a key focus area for us. To optimize costs while maintaining our sales levels, we have decided to gradually outsource our delivery fleet to established partners. In the third quarter of 2024, delivery sales decreased by 1 percentage point compared to the second quarter of 2024, representing 17% of total group sales. Despite this slight decline, the overall value of delivery sales grew by 11.5% year-on-year. The group's own delivery sales channel contributed 9% of total delivery sales, and now we'll open for questions during the Q&A session. Thank you very much, Monica. This concludes our presentation of the results for the first nine months of 2024, and we will now open the floor for questions. For the sake of those who will be watching the replay of this recording, we will read each question aloud and address it accordingly. If you do have a question, please type it in the chat box. I see we already received several questions, so we can get started on the Q&A. How many Taco Bell restaurants do you plan to open in 2025? And I will invite Călin to address this question. Because the location is very important in the development of this brand, depending on the availability of the spaces in the shopping center and those on the streets we are targeting, we estimate that we will open between one and three units next year. Thank you. The next question: What is the rationale behind the acquisition of Cioccolati taliani franchise, and how much revenues do you expect to generate from this new segment in the next years after the planned openings? And I will invite Valentin to address this question. Yes. So Cioccolati taliani, for us, it's a logical addition to our portfolio. As we have mentioned in the past, we are actively looking to diversify our portfolio of brands to leverage more our excellent ability to operate restaurants, and based on the screening that we are performing, this was considered by the management as an opportunity, especially for the Italian market, based on the performance of the brand there and based on the condition we have managed to achieve by entering in this collaboration there. As I try to touch base on this, we are targeting an average investment of EUR 500,000 per restaurant. This is an average-plus format that we are planning to open. Obviously, the formats of the restaurants will be adapted to the location based on the opportunities that we will find in Italy. But in order to be able to model and to have an estimation of the magnitude of the turnover impact in our group consolidated figures, we see EUR 700,000 sales per unit, which, depending on the timing of the units where we'll be able to open, it's a simple math with a path of around four restaurants, hopefully, per year. Of course, it will be a learning curve. I mean, the development will have a gliding path based on the experience that we'll gain with the locations there in Italy. Thank you, Valentin. The next question: You mentioned the positive effects from the implemented cost control measures. Can you detail a bit about what these cost control measures involved, and where do you see the level of restaurant expenses in the next quarters? Again, this is for Valentin. Yeah. As you already used with our approach, our philosophy is, it was, it is, and will continue to be with a very high focus on the cost. Basically, our programs are cascaded down per entity, and we have multiple streamlines. One of the most important ones is the procurement efficiency, where we are renegotiating contracts with our suppliers, and we have managed to achieve a very good performance in terms of stabilizing the chicken cost, despite the increasing trend that we all see in Europe and in Romania as well. Indeed, it's a very big pressure, and we'll try to fight with this pressure as much as possible. But it will be a difficult period in Q4, for sure. But continuing with the overview on the cost efficiency, we are also very careful with energy and utility, where we have managed to record savings. We have investments in the more energy-efficient equipment and operational protocols that help us to reduce the utility cost across our restaurant network. Also, we are looking to streamline operations, and we have achievements in simplifying the workflows and the processes by reducing the necessary steps. We have leveraged technology for more accurate demand forecasting on our inventory management and multiple other initiatives that, all in all, are gathering the performance that we can see in our P&L. Thank you, Valentin. I see we have one more question. In the meantime, if you can type any other questions you have for the management team, and we will address them. Otherwise, we will wrap up the call. So the question that we have is: Do you see room for further EBITDA margin expansion in 2025? What will be the main drivers? Again, I will invite Valentin. It's a similar question. Or, in fact, that there is still room to increase the EBITDA margin as the units operate in the recent years, reach maturity, plus the reorganization of the Pizza Hut that we've had, we'll have a contribution to the EBITDA margin. So, yes, basically, in order to go a little bit back in the history, we tried to reach the very important 10% EBITDA margin at the consolidated level, which was a critical milestone for us, and what we are planning now on, starting with this year and continuing to 2025, to add on this foundation and to have a creative contribution year- over- year. From where it can come this and why we think it's realistic, as Călin mentioned, everything coming from the success of the turnaround in Pizza Hut will definitely be an accretive to the EBITDA margin that we have now because we speak about a negative contribution until now, so everything turning positive will be a net addition to the margin, and of course, the maturation, again, as Călin mentioned, for the existing brands with headroom for both Taco Bell and Italy to generate extra margin because they are not, especially Taco Bell, at the maximum potential level. Obviously, with the stabilization of the KFC, which is a very mature brand, and the additions from Republic of Moldova, which are not significant, but it counts for our overall performance. Thank you, Valentin. The next question: Can you elaborate on the success of restructuring of Pizza Hut? Do you envisage more cuts to improve profitability? Valentin will answer the question. Yeah. So Pizza Hut, it's a long process, as we always mentioned here. Everything happened until now creates confidence that we are on the right path. It's not only a perception because, as you easily can spot it from our financial performance evolution, Q3 especially, it's validating the right direction. However, we need to admit that it is not a straightforward path. We have adopted a lot of measures on the way. We still have the majority are already implemented, so we are expecting to produce even more positive effects. But still, we have some things to be done. We are also working on the layouts of some restaurants. There are some operational things to be adopted in the next period. So, all in all, based on what we have achieved until now, based on the optimism of the managerial team in this brand, we cannot foresee but only good things in 2025. Thank you, Valentin. And the last question that we have on the chat: Could you please elaborate on the low same-store growth in KFC Romania? How does this growth split between traffic and transactions and pricing? Again, I will let Valentin answer the question. Yeah. So, basically, for KFC, it's something that we are expecting. The same store cannot go indefinitely with a big evolution. As you remember, initially, we had, in the comparison, a base effect with the years of the pandemic and the recovery period after. But this is normal to slow down because we speak about the weight of the mature restaurant in the overall network of KFC sizable. However, we still had a good evolution from the transactions for which we are proud. This also is not fueled as much as it used to be in the years of the inflation by price adjustments because we are very careful, and there were not so many price adjustment events. So, all this put together, it results in a performance that is not a threat, and we consider it no rmal. Thank you very much, Valentin. I see that we do not have any more questions. Thank you very much for your insightful questions for our management team. We look forward to reconnecting with you all at the end of February or early March of next year after we will publish our preliminary financial results for full year 2024. The specific dates for our 2025 financial reporting and earnings call will be announced via a current report to the Bucharest Stock Exchange in January 2025. In the meantime, if you have any questions, please feel free to contact us at investor.relations@spheragroup.com. We thank you all for joining us today, and we wish you an excellent rest of the day. Thank you.