Arcos Dorados Holdings Inc.

Good morning, everyone, and thank you for joining our second quarter 2024 earnings webcast. With us today are Marcelo Rabach, our Chief Executive Officer, Luis Aranato, 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. Today, we will take you through our results for the second quarter, which we believe demonstrate how our business model has evolved to perform strongly in any operating context. Sales and profitability growth from June have been consistent with our strategies. especially when you consider the tougher than expected macroeconomic and consumer environments we are facing this year. We are focused on the factors we can control to minimize short-term volatility and maximize long-term growth. Top-line growth in the second quarter was strong, with comparable sales growing well above inflation in just about every market, leading to continued market share gains for the McDonald's brand in our footprint. Total revenue rose 6.8% in the second quarter, reaching the highest level ever for the second quarter in U.S. dollars. Guest traffic grew for the 13th consecutive quarter, continuing to support comparable sales growth, even as consumers have become more discerning with their discretionary spending. This is where our omnichannel approach, strong value proposition, and operational excellence have established McDonald's as the region's favorite QSR brand. System-wide compatible sales growth was 2.4 times the company's blended inflation, excluding Argentina. According to market sources, as well as our own research Market share expanded in our biggest markets, outpacing the main competitors in nearly every market. The 3D strategy of digital delivery and drive-through has set a new standard of quality, service, and value for the quick service restaurant industry in Latin America and the Caribbean. Today's guests expect their QSR experience to be convenient and versatile with multiple alternatives to receive great service and high quality food at a fair value. And we are meeting their expectations with sophisticated digital capabilities, a dedication to operational excellence, convenient freestanding restaurant locations, and the best menu offerings in the QSR industry. No other restaurant brand in the region can match these structural competitive advantages. We remain on pace to extend this leadership position, with 37 EOTF restaurant openings in the first half of the year, including 34 freestanding locations. In our biggest market, Brazil, we added 21 EOTF restaurants in the first half, including 20 new freestanding units. Importantly, first year returns on investments for new restaurant openings remain strong and will support additional unit growth for many years to come. Luis will now take us through sales performance in each division.

Thanks, Marcelo, and good morning, everyone. Long-term sustainable cash flow growth starts with sales. So far this year, sales growth has been strong in US dollar terms. Brazil's comparable sales rose 10.2%, up 2.6 times inflation in the period, with volume and average check contributing about equally to growth. Digital channels that include the mobile app, delivery, and self-order kiosks generated almost 70% of total sales in Brazil and identified sales now represent about 28% of the division sales. Please keep in mind that for a sale to be identified, we need customers to explicitly authorize us to track and use their data. The mail making loyalty program that we launched in October of last year is performing very well in Brazil. I will tell you more about the loyalty program in a few minutes. Brazil's marketing campaigns included strong, happy meal properties, such as Disney's Inside Out 2, boosting the family business. We also continued sponsoring Big Brother Brazil, the country's most popular reality TV program, using it to support the chicken category. We also ran promotions and limited time offers to strengthen brand affinity with menu favorites such as McFish, McFries, Tasty Sauce, and desserts. Nolet's comparable sales grew 2.5 times the division's blended inflation. Higher guest volume accounted for most of the quarter's sales growth. Mexico's sales grew strongly despite a tough comparison with holiday week in the prior year quarter. Digital sales grew at least 70% in markets like Mexico, Puerto Rico, and French West Indies. And for the entire division, digital sales grew more than 60% versus the prior year, leading to a significant jump in Nolet's digital channel penetration. Knowledge marketing initiatives included the launch of Best Burger in Mexico, leading to around 50% higher comparable volume growth for the Big Mac, Cheeseburger, and the Quarter Pounder with Cheese in the country. Strong Properties supported Happy Meal sales in the Quarter as well. In addition, we leveraged the regional Formula One sponsorship with the Indulgent Grants platform to drive growth in the three days. Finally, we introduced new menu offerings in the important chicken and dessert categories in several of the divisions markets. Comparable sales grew two times slats blended inflation, excluding Argentina. Guest volumes accounted for almost half this growth, with markets like Colombia, Chile, and Venezuela delivering the best results. The digitalization of Arcos Dorados was also evident in SLAD, with digital channel sales growth between 25 and 50% in markets such as Chile, Colombia, Ecuador, and Uruguay. The division's digital sales grew more than 30% versus the prior year, excluding Argentina. These volumes in Argentina outperform the broader economy and improved slightly against the first quarter of 2024. The country's macroeconomic indicators in the first half of 2024 exceeded our low expectations, but the operating environment remains very challenging. Against this backdrop, we are capitalizing on the competitive advantages we built over the years in Argentina. to gain market share and strengthen brand preference. We believe this will position us well to return to growth once economic and consumption conditions stabilize. SLAT's marketing activities included attractive happy meal offerings across the division, chicken focus promotions in Chile, and innovations in the dessert category in Colombia. In addition, we dropped sales by focusing on the sports passion point during the Copa America tournament, with activations related to local football federation sponsorships. According to our proprietary research, the McDonald's brand gained nearly three points of market share during the first half of 2024. maintaining a 2 to 1 advantage against its nearest competitor on average. We measured especially strong gains in Brazil, Chile, Colombia, Costa Rica, and Panama, to name a few. Visit share also improved almost one point versus the prior year, building on top of the sustained volume growth we generated over the last several years. We will talk more about delivery when I come back to tell you about the 3Ds, but it is fair to say that this sales channel continues to exceed expectations. We are the clear leaders among all QSR brands, and during the first half of 2024, we added additional market share by continuing to deliver the best customer experience in this important segment. According to our research, the biggest market share gains in the first half of the year came in Brazil, Costa Rica, Ecuador, Panama, and Puerto Rico. Mariano, over to you.