Arcos Dorados Holdings Inc.

Good morning, everyone, and thank you for joining our third quarter 2024 earnings webcast. With us today are Marcelo Rabach, our Chief Executive Officer, Luis Raganato, our Chief Operating Officer, and Mariano Donenbaum, 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 Investors section of our website, www.arcosdorados.com.ir. We've moved to a new webcast platform beginning with today's call. To better follow the presentation, please note that you can set your view to full screen. Additionally, you can submit your questions at any time during the presentation using the Q&A function on the bottom of the screen. After we conclude our opening remarks, we will answer your questions. 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. I will now turn the call over to our CEO, Marcel Robach.

Thank you, Dan. Good morning, everyone, and thank you for joining us. Third quarter 2024 results demonstrate the resilience of Arco Dorado's business model. Sales and profitability were strong, while the strategy built around digital delivery and drive-through remained a structural competitive advantage across all our markets. Our balance sheet is as strong as ever, which allows us to continue ramping up on the fourth D of our strategy, development. In line with McDonald's global growth strategy, we expect our restaurant opening pipeline to unlock even more shareholder value as we capture the significant opportunity to expand our footprint over the next several years. This is why, moving forward, you will hear us talk about our For This strategy. Let's get into the details of the quarter's results, starting with the key highlights. U.S. dollar revenue set a new high for the third quarter. Comguest counts rose for the 14th consecutive quarter, with growth-based traffic increases in the region. This helped drive system-wide comp sales up more than 32% in the quarter, despite a more challenging economic and consumer environment. All three divisions contributed positively to the result. U.S. dollar EBITDA was the second highest for the third quarter, with a 50 basis point margin contraction and devalued currencies impacting the result, especially in SLAM. the digital delivery and drive-thru platforms continue to be an unmatched competitive advantage. Total digital sales grew 16%, while guest-scanned growth in both drive-thru and delivery helped these off-premise channels generate 43% of system-wide sales. For the year to date through September, we opened 56 experiences of the future restaurants, including 32 openings in Brazil. And just a few weeks away from the end of the year, we are on track to deliver openings guidance for 2024. I will turn it over to Luis now for a look at sales performance in each division.

Thanks, Marcelo, and good morning, everyone. Brazil's third quarter comp sales were up 6.8% on top of last year's double-digit growth. Notably, for the last 24 months, Brazil's comp sales grew more than 18%. Both guest count growth and a higher average check drove the quarter's result. U.S. dollar sales were impacted by the devaluation of the Brazilian real versus the prior year. Digital channels that include the mobile app delivery and self-order kiosks generated almost 70% of sales in Brazil, one of the region's most digitalized marketplaces. Drive-through sales growth was also strong in the third quarter, leveraging the largest freestanding restaurant portfolio in Brazil. Based on internal research, Brazil strengthened its brand attributes in the quarter, including its industry-leading top-of-mind and favorite brand scores with marketing activities focused on brand with the Why I Call Makey Makey campaign, menu with the Sheda Swimming Pool and Bravo's Premium Line campaigns, desserts with innovations in cones, sundaes, and macshakes, and family with a successful Despicable Me 4 Happy Meal. Nolat's cone sales rose 6.2% in the quarter, with higher guest counts responsible for most of the division's sales growth in the quarter. The digitalization of Nolat continued in the third quarter. Digital channels accounted for 40% of sales in the period, up from 30% last year. The increased penetration of digital sales channels was helped by the continued modernization of the restaurant portfolio in Mexico, which is ramping up in the market. Nolad's marketing initiatives included campaigns focused on menu items designed for families, generating strong engagement with relevant Happy Meal licenses. We also appealed to Gen Z guests with a special edition of Chicken McNuggets, introducing Asian-inspired sauces in collaboration with the popular K-pop group BTS. Mexico continued benefiting from the launch of Best Burger, with a campaign emphasizing the unique taste and high quality of our crawl products. In SLAD, com sales growth of 90.4% includes the impact of Argentina's high inflation rate over the last 12 months. Comm sales, excluding Argentina, rose strongly, with guest counts and average check contributing about evenly to the result. Digital sales are strengthening the connection with guests in SLAD and accounted for 57% of the division sales in the quarter. Inflation in Argentina remains high, but has declined steadily this year through September. The currency is weaker than last year, but it has been stronger than originally expected. Against the backdrop, Arcos Dorados' performance in Argentina has improved sequentially from quarter to quarter so far in 2024. SLAT's marketing activities included a focus on improving value perception, building compelling entry-level menu items with a strong guest response. We also built our chicken credentials through the BTS collaboration, as well as variations on the popular McChicken sandwich. Finally, with the same Happy Meal licenses that I already mentioned, SLAC significantly improved its brand attributes related to families. One of the keys to sustainable, long-term, and profitable growth is maintaining healthy market share levels. This is why this year's market share gains have been so important. No matter what short-term operating environment we are currently navigating, being the favorite QSR brand in the industry supports a more efficient operation and continued expansion throughout the region in the long term. With that in mind, we are capturing important market share gains. Based on proprietary research, the McDonald's brand gained five points of value share across the company's footprint in the quarter and 3.6 points of value share during the first nine months of the year. Importantly, we also gained the most market share this year in our biggest market, Brazil. The QSR industry is growing faster than the broader restaurant segment in many markets. And by providing the best value proposition and restaurant experience in the industry, we are consolidating our leadership position throughout the region. Mariano?