Arcos Dorados Holdings Inc.

Good morning, everyone, and thank you for joining our fourth quarter and full year 2021 earnings webcast. With us today are Marcelo Rabach, our Chief Executive Officer, Luis Taganato, our Chief Operating Officer, Mariana Tannenbaum, our Chief Financial Officer, and Manny Gonzalez-Vicorica, our Chief Technology Officer. Today's webcast, which is being recorded, will consist of prepared remarks from our leadership team, which will be accompanied by a slide presentation, also available in the investor section of our website, www.arcosdorados.com. As a reminder, to better view the presentation on the webcast platform, please scroll over the upper left-hand part of the screen and click on the arrows to maximize the slides. After we conclude our opening remarks, we'll answer your questions, which you can submit using the chat function on the left-hand side of the screen. You'll need to minimize the slides to access the chat function. Today's call will contain forward-looking statements, and I refer you to the forward-looking We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. In addition to reporting financial results in accordance with generally accepted accounting principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial results as compared with GAAP results, which can be found in the press release and audited financial statements filed today with the SEC on Form 6-K. Today, we also filed the Form 6-K with historical quarterly information to three operating divisions. The information will also be available for download on our IR website later in the day. We hope this helps you in your analysis of Arquis Dorado's moving forward. Our discussion today excludes the results of the Venezuelan operation, both at the consolidated level as well as for the slab division. For your reference, we included a full income statement excluding Venezuela with today's earnings release. Marcelo, over to you.

Thank you, Dan. Good morning, everyone. and thank you for joining us on today's webcast. Since we already provided a preview of fourth quarter results on our recent investor update webcast, today's presentation will follow a different format. Mariano and I will comment on our strong consolidated results, capital structure, and growth plans. We encourage you to review today's earnings release for the details of our results by division. After this brief overview, our presentation will focus mainly on the successful 3D strategy of digital, delivery, and drive-through. We will show you how far we have come, how we did it, and what we are planning for the next few years. Luis and Male will walk you through our digital transformation journey. So let's start with our fourth quarter and full year 2021 results. As we already reported in January, sales trends remain very strong with additional market share gains across all divisions in the fourth quarter. The 3Ds established several new records. The highest ever drive-through guest volume. The highest ever delivery order volume. and the highest ever digital sales total for a single quarter. These trends drove significant operating leverage leading to record EBITDA for a single quarter up 10.5% in US dollars versus the pre-pandemic fourth quarter 2019. Thanks to the record setting second half, full year 2021 EBITDA rebounded strongly including our highest ever full year EBITDA margin. Over to you, Mariano.

Thanks, Marcelo. And good morning again. As you just heard, adjusted EBITDA margin performance remained strong in the fourth quarter and set a new record for a full year in 2021. At the restaurant level, fourth quarter margin rose versus the same period in 2019. We successfully managed our food and paper costs with gross margin improvements across the board, captured additional productivity to reduce payroll expenses, which also included some non-recurring government support and other payroll tax credits, and leveraged fixed costs in occupancy and other operating expenses mostly offsetting the impact of higher delivery volume on expenses. Adjusted EBITDA margin expanded by 100 basis points versus the fourth quarter 2019, and was 160 basis points higher when we exclude non-recurring items from both periods. Cash flow from operations was also very strong last year, This helped us build cash throughout the year, buy back some of our outstanding long-term debt and, together with the rebound in EBITDA, improve our leverage ratio to a healthy 1.4 times. The balance sheet is in a great position to support our future growth plans and I am happy to report that 2022 is off to a strong start in terms of sales, profitability and the pace of openings. Let's recap recent growth and future expansion plans. For the full year 2021, we delivered on guidance with 46 new restaurant openings, 40 of which were freestanding locations. We also met capital expenditure guidance with $115 million invested last year on both development and non-development projects. As we said in January, our goal is to capture the full profitable potential of the McDonald's brand in our region. We plan to open at least 200 new restaurants in this underpenetrated market from 2022 to 2024. with about 90% being freestanding units, our highest ever three-year total. We are on track to meet this year's operating guidance of 55 new restaurants. Through the first two months of the year, we have already opened 13 new restaurants, including 11 freestanding units. Notably, about 75% of the three-year $650 million CAPEX plan will go to development projects, including openings, modernizations, and maintenance. The remaining 25% of the planned CAPEX will be invested in non-development projects, primarily related to the digital transformation of Arcos Dorados. As Marcelo suggested, please refer to today's earnings release for the details of the fourth quarter's results by division. With that, I will turn it over to Luis and Male for a closer look at our digital transformation journey.