Arcos Dorados Holdings Inc.

Good morning, everyone, and thank you for joining our first quarter 2024 earnings webcast. With us today are Marcelo Raba, our Chief Executive Officer, Luis Caraganato, 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 unaudited financial statements filed today with the SEC on Form 6-K. Marcelo, over to you.

Thank you, Dan. Good morning, everyone, and thank you for joining us. The strength of the results we reported this morning demonstrate how far we've come as a company over the last decade. They also reinforce the strength of the Arco Dorado's business model, with solid US dollar growth to start 2024, even in the face of a very challenging economic environment in one of our main markets. This is a testament to the importance of operating responsibly and managing the business with a long-term mindset. In the last 10 years, we diversified the business, reducing the weight of any single country. While Brazil remains our biggest market, Nolab now contributes a growing share of sales and EBITDA, much of it in hard or very stable currencies. And within SLAD, markets like Chile, Colombia, and Uruguay have also increased their contributions to consolidated results. Our objective is to generate sustainable profitability growth over the long term. To this end, the business model and the 3D strategy are working well together. Everything starts with sales. And our balanced approach to managing pricing, product mix, and guest volumes is driving above inflation compatible sales growth. The most critical driver of sustainable sales growth is guest volume. And the McDonald's brand continues to capture the highest volume per restaurant in our region by far. The region's growth potential is huge, and we are still accelerating restaurant openings. In fact, we plan to invest in the McDonald's brand for many years to come, and our investments will foster a virtuous cycle of growth in our communities and local economies. In turn, this will support our long-term expansion plans while insulating the business from short-term volatility. Before getting into the specifics of first quarter results, I want to take a moment to express how saddened we are by the severe flooding in Brazil's southernmost state, Rio Grande do Sul. Fortunately, all our employees in the state survived the flooding. In the short term, we are focused on supporting our employees and their families, including with basic necessities, and by guaranteeing their job security until the situation improves. We have also begun distributing food within the communities we serve, as well as to first responders. Moving forward, we will be working on several initiatives in coordination with local governments and NGOs to continue supporting our people and to aid in reconstruction. Finally, I should also note that our business exposure to the state is relatively limited, and so far, Brazil's second quarter trends have not been materially impacted by this situation. Turning now to the first quarter, performance in Brazil and NOLAB more than offset the impact of the devaluation of the Argentine peso on consolidated results. Total revenue rose 9.1% in the first quarter, supported by the 12th consecutive quarter of positive comparable guest traffic at the consolidated level. System-wide comparable sales rose above inflation in nearly all markets as well, and were up 2.2 times blended inflation for the entire company, excluding Argentina. McDonnell's brand visit and spend shares remain more than two times our nearest competitors, and the brand attributes we track are at or near all-time highs across the region. The digitalization of the Arco Dorado's business also remains on track in the quarter, with digital channels generating 55% of system-wide sales. Total digital sales growth of 30% in US dollars was driven by delivery, self-order kiosks, and mobile order and pay sales. Notably, this quarter, we signed an agreement to become a regional sponsor of Formula One in Latin America. Over the years, this global sport has become popular among families within the region, reaching all demographic, gender, and socioeconomic groups. In addition to providing a significant boost to our brand presence in the region, this sponsorship will focus on further leveraging the successful 3D strategy, including the synergy with the precision, teamwork, and speed of service of our industry-leading drive-through business. Finally, restaurant openings continue to accelerate We added 22 EOTF restaurants, 19 of them freestanding. Brazil opened 11 restaurants, including 10 new freestanding units. Luis will now take us through an overview of sales performance in each division.

Thanks, Marcelo, and good morning, everyone. As Marcelo just mentioned, we believe sales growth above inflation is the most sustainable way to increase profitability. Brazil's comparable sales rose 9.4% on top of 13.8% in the first quarter last year. This year's growth was 2.2 times inflation in the period, with higher volume and average check contributing to the result. Digital sales grew 38% and accounted for 65% of total sales in Brazil. Importantly, 26% of sales were identified. As a reminder, these are transactions where we not only have customer data, but where customers have explicitly authorized us to track and use their data. Additionally, the milk-making loyalty program continued to gain traction in the market in the quarter. Brazil's marketing plans and campaigns became the talk of the town during the first quarter. With the continuation of the successful Make Me Pega campaign and the launch of Big Tasty Turbo Cheese, We engaged with Gen Z customers by once again sponsoring the Lollapalooza Music Festival in Sao Paulo, as well as the country's most popular primetime TV show, Big Brother Brazil. We also drove brand excitement and customer engagement across all sales channels by bringing back the McFish sandwich as a limited time offer, selling out in a very short time. Finally, the dessert category included the introduction of the McFlurry Chococanchi with an iconic Brazilian chocolate, Diamante Negro. No less comparable, sales grew more than three times blended inflation in the quarter, with guest volumes driving almost the entire result. Every single market in NOLA grew comparable sales above inflation in the quarter with strong volume growth as the main driver. Performance was particularly impressive in Mexico with comparable sales up in the teens, driven primarily by guest volume growth. I should note that the quarter's results also benefited from the extra trading day due to leap year, as well as from holiday week, particularly in Mexico. Key marketing activities in Mexico included the launch of the new value platform, Elige Tu Fab, which allows guests to choose between delicious beef or chicken combos at an attractive price. Notably, digital channel sales in Mexico doubled versus last year, and the McDonald's app is now the most downloaded and used app across the country's QSR industry. Panama implemented a strong value platform coupled with one of the biggest brand equity scores in the region to accelerate the business in that country. In Puerto Rico, we gained significant visit share as the new brand campaign, Saca tu Encanto, resonated well with guests. Finally, as Marcelo mentioned, we signed a regional sponsorship of Formula One that resonates across our footprint with special meaning given the popularity of Mexican driver, Checo Pérez. Comparable sales grew below blended inflation in SLAT due to the significant economic slowdown in Argentina in the quarter. However, except for Argentina and Ecuador, the other large markets in the division generated comparable sales growth well above local inflation. This included Chile, Colombia, and Uruguay, where gas value growth was robust. Comparable sales were up 1.8 times blended inflation in SLAT, excluding Argentina. The silver lining in Argentina was that while consumption was down 20 to 30% in the country, Arcos Dorados volumes declined at about half that rate in the period. The local team delivered this impressive result by continuing to offer consumers the best value proposition in the market's QSR industry. This led to significant market share gains against our main competitors and improvements in our brand equity scores, which should position us for a strong rebound once the economy stabilizes. Similar to Brazil, the Slab division strengthened brand affinity and excitement among younger consumers by sponsoring the most relevant music festivals in the region, including Lollapalooza in Argentina and Chile, as well as Estéreo Picnic in Colombia. We brought menu innovation to Slab's markets with the launch of the Quarter Pounder Western Barbecue in Chile and Uruguay. Quarter Pounder Cheesy Jalapeno in Ecuador, and The Grand Taste is Spicy in Argentina. These new product launches were all met with strong guest responses, helping drive restaurant traffic and average check growth. SLAT also continued making inroads in the chicken category. with the launch of the McRespi Chicken platform in Uruguay and the McRespi Chicken Legend in Colombia, which is quickly becoming a guest favorite. All the marketing efforts related to menu favorites, music, and sports are generating tangible results. Market share performance in the quarter was strong throughout the Arcos Dorados footprint in both visit and sales share. We also measured 2.5 times top of mind and 1.5 times favorite brand scores against our main competitors on average across the geography. This was supported by all the markets we track with quarterly data in NOLED and SLAT, which gained important market share in the period. In Brazil, where we continue to strengthen the brand's leadership position, we achieved an all-time high visit share score over the training 12 months. According to our research, Brazil reached record high scores in brand equity, including top of mind, while remaining the country's favorite QSR brand by a wide margin. Notably, we measured favorable gaps against our main competitor in all the brand attributes we track, covering experience, taste, community impact, family environment, and affordability, among others. Over to Mariano for a closer look at consolidated and divisional profitability in the quarter.