Arcos Dorados Holdings Inc.

Good morning, everyone, and thank you for joining our fourth quarter and full year 2022 earnings webcast. With us today are Marcelo Rabach, our Chief Executive Officer, Luis Raganato, our Chief Operating Officer, and Mariana Tannenbaum, our Chief Financial 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.ir. 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 will answer your questions, which you can submit using the chat function on the left hand side of the screen. You will 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 statements section of our earnings release and recent filings with the SEC. 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 6K. Our discussion today excludes the results of the Venezuelan operation, both at the consolidated level as well as for the SLAD division. For your reference, we include a full income statement excluding Venezuela with today's earnings release. Marcelo, over to you.

Thank you, Don. Good morning everyone and thank you for joining us today. Today we will take you through the best results in Arcos Dorados history and remind you of the reasons we feel confident we can continue improving on these results in 2023 and beyond. Let's start with the key highlights of the fourth quarter and full year 2022. Fourth quarter revenue and adjusted EBITDA were the highest ever for a single quarter. Net income in the quarter was second only to the fourth quarter of 2017, which included significant non-operating income from our redevelopment program. More importantly, full year adjusted EBITDA and net income reached new records in 2022, including our best-ever EBITDA margin for the full year. As you saw during the Investor Update event six weeks ago, system-wide comparable sales growth was very strong throughout 2022 and across all divisions. Restaurant volumes continued normalizing, with all sales channels performing well. and our market share gains show McDonald's brand sales delivered the strongest growth in the industry last year by far. The 3D strategy set records with our highest ever sales in digital, delivery, and drive-through, with much more growth still to come. We also delivered on our promised unit growth for the year. with 66 restaurants open, including 40 in Brazil, 90% freestanding units. We have the largest freestanding restaurant portfolio in the Latin American QSR industry by a wide margin. We leverage this structural competitive advantage with the industry's most robust digital platforms. taking an omnichannel approach to meet our guests' needs and preferences. This is why the McDonald's brand is as strong as ever in our region, and we were able to gain so much market share in all our main markets. I fully expect these trends to continue for the foreseeable future. Luis, let's take a look at sales performance at the divisional level.

Thanks, Marcelo. And hello again, everyone. System-wide comparable sales grew 1.9 times blended inflation in the fourth quarter of 2022 and 2.4 times blended inflation for the full year. In Brazil, comparable sales were up 3.6 times inflation in the fourth quarter, with 52% coming from digital sales channels. This included 41% growth in the market's own channels of MOP and MAC delivery. As an example of the traction we are gaining in digital, on Black Friday in Brazil, we achieved a record for digital sales in a single day, with the McDonald's app being the second most downloaded of all apps in the country, not just in the restaurant industry. Campaigns designed around McDonald's global sponsorship of the FIFA World Cup leveraged the 3Ds and partnered with local celebrities and sports personalities to drive sales in the quarter as well. In NOLAD, comparable sales grew at a rate of 3.1 times blended inflation in the quarter. Many innovation helped drive sales across the region, with the launch of World Cup themed sandwiches in Mexico, Panama, and Costa Rica. In Mexico, the hashtag McDonald's Mexico Me Encanta brand building campaign partnered with Sergio Checo Perez, the popular Mexican Formula One driver, with special activations during Mexico's Grand Prix in October. And Costa Rica strengthened the beef segment with the implementation of Best Burger, with sales growing 21% year over year, achieving the market's highest sales for a single quarter. In SLAD, comparable sales rose 1.6 times blended inflation in the quarter, and most markets achieved their best scores ever for brand love and affinity. Digital sales grew an outstanding 55% versus the prior year period, and achieved the highest digital penetration to date. Beef and chicken campaigns reinforced the value for money proposition, as well as quality and taste perception. This included the launch of the Mac Crispy Chicken Sandwiches in Colombia and Chile, and the FIFA World Cup sandwiches, Selecciones McDonald's, in several slat markets. We also run a special campaign for the World Cup champions in Argentina, where we are official digital sponsors of the country's national team. The sales trends from the fourth quarter have carried into the first quarter of 2023 as well. In fact, January and February comparable sales were very strong, growing a combined 1.9 times inflation with solid growth across all divisions. As we have seen for the last two years, off-prem channel growth remains very strong, especially delivery. And we are very happy with the acceleration of growth in on-premise channels, which is now ahead of our expectations. This speaks to the essence of the McDonald's brand in Latin America and the Caribbean. We remain very much a family restaurant experience and guests still love coming into a restaurant for a visit. This is just one more growth lever we expect to help drive sales growth this year. Mariano will now show you how this strong top line growth generated significant profitability growth in each division as well.