Alsea S.A.B. de C.V

Good morning, everyone, and welcome to Alsea's fourth quarter and full year 2023 earnings video conference. My name is Gerardo Lozoya, head of investor relations and corporate affairs. And today, our chief executive officer, Armando Torrado, and our chief financial officer, Rafael Contreras, will be presenting our results. Before we continue, a friendly reminder that some of our comments today will contain forward-looking statements. S.A.B. de C.V It's important to note that earnings numbers referred to are based on pre-IFRS 16 standards unless specified otherwise. I would now like to hand it over to Armando for his initial remarks. Please go ahead, Armando.

Thank you, Gerardo, and good morning, everyone. In this conference, I will be sharing insights into our financial results, regional dynamics, grant performance, and highlights from this year. I would first like to take the opportunity to recognize and thank our more than 77,000 team members and other stakeholders for the dedication to ALSEA. Your commitment has made this quarter and a year a great success. Before going into the numbers and highlights for the quarter and a full year, as you will have seen early today, Rafael Contreras is stepping down as our CFO, and this is not a goodbye for Rafa. He will remain as part of our senior management, supporting me and the board of directors in some other projects. Federico Rodriguez, here to my left, will be stepping down into the global CFO role after his many years as a CFO of Alsea Europe. I wish them both the best on this new role. Now on slide number four, we concluded the year achieving strong results. In the fourth quarter of 2023, we reported a 7.8 year over year increase in total sales, reaching a 19.9 billion pesos or a 13.8 increase when excluding foreign exchange effects. Same store sales, grew by 12.1 year-over-year, reflecting a continued favorable consumer trend during this year, this excluding Argentina, same stock set that grew only 8.9. EBITDA grew by 25.8, totaling a 3.1 billion pesos for the quarter, with a 16% of margin. We served over 13 million delivery orders in the quarter, amounting to 3.5 billion pesos, which accounted for 17.7 of our total sales. Turning to the slide number five, overall, we delivered strong results across all the company regions this year. It's clear that our commercial, digital, and operational strategies, along with favorable consumer demands for our brands, have a positive a positive impact. For the full year, we reported an increase in total sales of 10.7%, reaching more than 74 billion pesos, a 7.2 billion pesos increase in comparison of 2022. Same success for the full year, increased by 14.7 compared to 2022, excluding Argentina's system sales, the increase was 12.6%. EBITDA was above 10 billion pesos for the full year, up a significant 22.3 compared to 2022, resulting in an EBITDA margin of 14.2%. Post IFRS 16, EBITDA grew by still a solid 13.6 to 16 billion pesos for the year, with a margin of 20.9%. Sales through the delivery segment in 2023 were resilient, growing by a 4.2, reaching nearly 12,800 million pesos. with over 48.8 million orders. This represents a 17.1% share of S.A.B. consolidated sales. Excluding Domino's Pizza, the delivery segment grew in 2023 11.3%. Lastly, operating cash flow was healthy, 12.9 billion pesos in 2023, allowing us to deliver us alongside a continuing and expansion maintenance plans. Regarding our brands, all regions reported a solid performance. Starbucks achieved a strong year-over-year sales that grew 17% for that fourth quarter and a 23% for the full year. In the fourth quarter, the Starbucks Mexico same store increased by 21.1%, while Europe increased by 3.5%, affected by brand issues in France. In South America, we grew an 18.6%. For the full year, 2023, Starbucks same store sales in Mexico, Europe, and South America increased by 36%. 13.9 and a 23.3 respectively compared to 2022. This strong performance is mainly driving by drive-through formats, product innovation, and implementation of the loyalty programs Starbucks awards in Europe. Regarding Domino's Pizza, we posted a solid four quarter sales in Mexico with an increase of 9.8%. For the full year, sales increased by 6.5% and 4.4% in Spain. This performance was mainly driven by affordable consumer trends, commercial strategies such as Dominos Mania in Mexico, and attractive promotions at the counter in both countries and a product innovation Regarding Burger King, our full-year results were mostly positive, with sales increasing in Mexico, Spain, and Chile of 8.6%, 1.8%, and 4.3% respectively. In Mexico and South America, we continue to focus on expanding the rollout of digital kiosks, which have led to double-digit growth in our average ticket. Regarding the casual dining division, also we reported a solid fourth quarter and full year with same-store sales of up 7% and 10.5% respectively. This performance was helped by product innovation and improvement of customer experience, which contributed to an increase in our traffic and orders. Regarding our VIPs in Mexico, we reported a 7.5% growth in the same-store sales for the fourth quarter. This growth was mainly driven by 7.1 increasing orders, and for the full year, same-store sales increased by 9.8%. We remain very focused on offering a high-quality service product innovation and continue to our plan of remodeling our restaurants to further improving the storage experience for our customers. With a tough comparable year ahead of us, we expected sales growth going forward to normalize. Moving to slide number seven regarding, we have continued with organic expansion strategy. And in the fourth quarter, we opened 96 corporate units and 25 franchisees. As always, focusing on the most profitable and high-growth locations. Additionally, we remain committed to expanding the drive-thru format in Starbucks Mexico, which was increased sales by more than 30%, with approximately 200 drive-thru units in our country. Our total openings for that year amounted to 257, of which 184 were corporate units and 73 were franchisees. Our expansion strategy was in line with our guidance given during last year in our S.A.B. Regarding digital, in line with our digital transformation strategy, at the end of 4.23, our loyalty sales grew 25.1% versus last year, reaching 3.8 billion pesos. This represent a 21.3% share of the total sales. At the end of the year, our loyalty sales grew 29.1% versus last year, reaching 14 billion pesos. This represents 21% of share of the total sales. The development of the Starbucks reward programs continue to be a key factor for the sales grow in this quarter. We reached more than 1.8 million users globally, reaching almost 400,000 users in Europe since the launch of the loyalty program in the second quarter of 2023. Regarding ESG, in 2033, we took our sustainability strategy to the next level by adopting double materiality, enabling us to the target and measure of our initiatives more effectively. Alsea achieved a global milestone by concluding the year with 85 Starbucks Greener stores in Latin America, the highest number of stores in the system for a licensee. The Huerva Por Mi Cuenta campaign, an initiative supported by Fundacion Alsea, raised 45 million pesos to support daily meals for over 6,000 people in 22 child dining rooms. Our efforts have extended to helping over 2 million individuals with sustainable financial and food donations. In the wake of Hurricane Otis, Vapor Mi Cuenta, together with World Vision Mexico, donated 4.3 million pesos to support more than 24,000 people. providing significant support to the affected communities in Guerrero. I am very pleased with our fourth quarter and full year results. They underscore the success of our operational strategy and the enduring apparel of our brand amongst consumers. I look forward to another strong year in 2024 and we extended our current market leading position in our key geographies and our brands. Now, I will hand over to Rafael so he can go over our financial information in a further detail.

Thank you, Armando. We are delighted with Alsea's fourth quarter 23 performance as quarterly sales and full year increased 7.8% and 10.7% respectively. driven by positive trends in all regions. Excluding foreign exchange effects, sales increased 13.8% for the quarter and 19.7% for all regions for the full year. In Mexico, sales were up 13.9% to 10.7 billion pesos for the quarter. Sales in Europe grew by 2.7% to 6.1 billion pesos or by 9% in Euro terms. Finally, South America posted a slight 0.5% decrease in sales for the quarter to 3.1 billion pesos due to the devaluation impact in Argentina. In Mexico, adjusted EBITDA increased 12.7% to 2.4 billion pesos for the quarter. This improvement was driven by ongoing fireball consumption trends and effective cost management. Also, The 13.5% growth in same-store sales boosted operating leverage, and the appreciation of the Mexican peso helped cut costs by 160 basis points as a percentage of sales. For the full year 2023, adjusted EBITDA increased 18.9% to 9 billion pesos with margin expansion of 30 basis points. In Europe, adjusted EBITDA increased by 14.5% to 1.1 billion pesos for the quarter and 22% in euros driven by lower energy costs. For the full year, adjusted EBITDA increased by 9.3% to 3.5 billion pesos with margin expansion of 60 basis points. In South America, adjusted EBITDA increased by 7.3% to reach $568 million, driven by lower food costs. For the full year, adjusted EBITDA increased 10.4% to $2.2 billion, with margin expansion of 120 basis points. S.A.B. de C.V Product Innovation, Digital Application Development, and Improving Cost Control. For the full year 2023, earnings per share was 3.15 pesos. Post IFRS 16, earnings per share rose to 3.53 pesos and increased to 79.9% year over year. In terms of our investments, our full-year capex amounted to 4.7 billion pesos. We allocated 28% of the amount to maintenance, 54% to store openings and remodels, and 18% for other strategic projects. We made solid responsible investment through the year, focusing on profitability. Regarding our debt profile, As of December 31st, 2023, we made amortization payments of 324 million pesos. Our gross debt decreased by 1.3 billion pesos year over year, closing at 26.5 billion pesos. This reduction in debt corresponds mainly to the devaluation of the euro against the Mexican peso and debt amortization during the year. Looking to our total debt to EBITDA ratio, we closed the year at 2.45 times and our net debt to EBITDA ratio at 1.89 times. Our EBITDA to interest rate closed the year at 4.2 times. The debt structure at the end of the year was 93% long-term with 62% in Mexican pesos and 38% in euros. S.A.B. de C.V another minority partners for 23% of food service project S.A.B. that is Alsea Europe. We will finance this transaction with cash and a bank loan and the company maintains a strong balance to address deep needs and prioritize organic growth in the immediate future. This transaction reflects Alsea's commitment to the region and the growth potential for the company in the future. Now I would like to hand over to Gerardo.

Thank you, Rafa. Before moving to the Q&A, I would like to extend a formal invitation to our Alsea Day that will be held on March 13 at the Mexican Stock Exchange in Mexico City from 9 a.m. to noon local time. Regarding the program, you can see on this slide, this is the agenda for the day. We will go and cover key financial results, performance analysis for our brands, our growth strategies, guidance for 2024, along with a Q&A session. This will be followed by a networking cocktail with our top management in P.F. Chang's and a guided visit to our operations center, the COA, with transportation provided to us. You can attend in person or virtually. Please register in our website, alsea.net. I will now hand the call over to the operator to open the Q&A session. Please go ahead, operator.

We will now start the Q&A session. If you have a question, please press the question button in the browser. Please make sure you are not in full screen mode to see the button. The first question is from Mr. Ben Theroux from Barclays. Please go ahead.

Good morning, everyone, and thanks for taking my questions. First of all, Rafael, all the best in the future, and it was nice working with you, so looking forward to then work with Federico as time goes on. Now, two quick questions actually for you. So one, as you look into the outlook for 2024, and if you consider obviously the consumer strength you've highlighted, you've seen in 2023, and we've seen this obviously in some of your core categories with same-store sales being really strong across many verticals. So if you think about the onset for this year, What are, like, the puts and takes? How do you feel about the consumer strength and the ability to maintain the strong growth you had from top to bottom? That would be my first question, and I have a very quick follow-up, just technically.

Okay, thank you. Good morning, everybody. Well, regarding the sensor sales, about your question, we are not growing for the future at a double digit in the rest of our brands. We are seeing a strength in the customers and the different regions where we operate, especially with the siren, with Starbucks. It's amazing what we are achieving. And honestly, we cannot promise a double digit after 22, 23, etc. But on the LCA Day on March 13, we will give you the guidance for 24. And it would be very aligned in terms of openings. But you can expect a high single digit increase in terms of like for like for the next year.

Okay, perfect. And then just my quick follow-up question was in regards to the put option on the remaining stake that you not yet own in Spain. Can you remind us when this is due and when this will hit your cash flow? Just technical question.

Well, the put option exists since the entry of BITS into our portfolio. That was December 27th of 2018. and we had the opportunity. It was not due the option. We could have stayed till two years more, but with the cash positions that we held and honestly the leverage ratio that we have, it was the opportunity to have the 100% of the state of food service project entity of Europe. Okay.

If I may add, Ben, in terms of the cash position that we are expecting or kind of the cash that we're paying for them, this will be on the course of 2024. So we will be paying some at the end of, I would say, Q4 of 2024. And the rest and the final output of the cash will be in the first quarter of 2025.

or be more clear, 200 million euros will be paid by the end of 2024 and 40 million euros in the first quarter of 2025.

Okay, that's what I was looking for. Thank you very much.

Okay.

Thank you very much for your question. Our next question is from Ms. Renata Cabral from Citi. Please go ahead.

Hello, everyone. Good morning. Thanks for taking my question. My first one is regarding the Starbucks performance in Mexico. We saw an impressive year in 2023. I just would like to understand how is the outlook for 2024? I know that you have just mentioned that in the LCS, you probably will give more color in terms of numbers. But just to understand if you have additional innovations in terms of products that you delivered this year that showed an incredible growth. And what is your perspective also in terms of traffic for 2024? Since I believe that 2023, it was a year more in terms of normalization after the COVID. So what we can expect for 2024?

Gracias, Renata. Thank you very much. I mean, we still have a lot of things to do in Starbucks. The game is not over about growth, I would say. We already completed our first session with Starbucks International regarding what is going to be the plan for marketing this year. There is an amazing product innovation. It comes with beverage that I will assure you will make a difference in traffic count. Only innovation also in food. There is some new strategies, new product that it will come to help us leverage again the traffic that it was done in last year. Regarding merch, we are probably now one of the highest merch countries of selling in percentage of base of what is done. S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V that the stores that are opening now, they have better average of sales with better margins because we've been controlling our costs exactly in occupancy better. So that will come. And also digital is a plane transformation that we will say a little bit more details in Dalcea Day, how we're working with CRM regarding processing better all the database that we have in order to increase the frequency in our stores and give them a better, I would say, promotion to each of one regarding the time, the date, the product they take. So we will give you more alignment in a few days. And as I mentioned, we have now over 200 and X amount of drive-throughs. Most of them, the one that we're going to open are in the pipeline. and the drive-throughs are generating quite far return of investment, 1.3 times probably better investment, 40% more return of investment than the regular stores that we know. So I think there's still good news and a good momentum for our brand, not only in Mexico, I would say in other regions too.

Oh, great. That's super clear. If you allow me the second question. It is about Europe. So we saw the performance positive, even considering the appreciation of the peso. So the question is regarding 2024, what do you expect in terms of consumptions and growth for the region?

Okay, Renata, that's for me. Since the last quarter of 23, we have seen a slowdown in Europe in the different segments that we run. However, at this point, there are no fundamentals for such thing as long as the labor market in France, Spain, Portugal, et cetera, are super strong. So, we are not worried for the future. Obviously, there's a topic in France. As you know, there has been tensions in the Middle East, so we're having a lot of closures, a lot of reductions in the same-store sales in this geography, but the results of 23 have been spectacular for Starbucks in France. We are not worried for the future. Obviously, it is not the best way to start the year, but, well, the future looks bright for Starbucks in France and in the rest of geographies, not only in Europe, but in the rest of Alsea. Additionally, we think that for the Easter period, there will be a warm-up in terms of the traffic coming to the store. So, that would be the answer for your question.

Amazing. Super clear. Thank you.

Thank you, Renata.

Thank you very much for your question. Our next question is from Mr. Hector Maya from Scotiabank. Go ahead.

Hi. Thank you very much. Congratulations on the strong results, and thank you for taking my questions. I just wanted to understand what's your vision for how much structural contributions to sales and margins we could expect from the upselling effects of menu and digital innovation, particularly from digital screens in restaurants and on how – What are your plans to continue leveraging in 2024 the critical mass that you have achieved on the loyalty customer base? Thank you.

Hello, Hector. That answer will be given to you on the outside. I think you will see all the contribution from the digital strategy of Starbucks, CRM for our casual dining local bureaus in Europe and in Mexico. In the Alsea, honestly, there's a lot of different items to cover with that question, so I prefer to wait until that day.

Just in a loyalty part, regarding screens, we do have all the Starbucks, as you may know. All of our Starbucks in Alsea are digital menu already driven by. We don't have any other S.A.B. We have a third party involving the companies in 19 months ago, really deeply and focusing on our structure of price. And this is how we've been dealing the past 25 months to not let any opportunity go away of our hands.

S.A.B. de C.V probably at mid-year of 2024 with all the stores of Burger King in Mexico having digital kiosks. And that has been resulted in positive ticket sales ticket increase. So that is also something positive to highlight for digital.

Yeah, for example, With that example of Burger King, Hector, we had in Europe when we implemented a 17% increment in ticket. But as I said before, the digital menus, the kiosks, the loyalty programs, all of them have different answers to your question.

Perfect. Thank you. And also, quickly, if you could share your thoughts on the dynamics for 2024 in Mexico on potential effects that we could see in margins related to changes in working hours from the labor reform that is in the works. And also, very quickly, if you could update us on your ambitions for M&A. I just wanted to understand if you feel comfortable enough now to potentially see some activity there, or if something like this should happen until the company achieves a much lower leverage down the road.

Okay. In terms of the margins, we will deliver the guidance for 24 on our LCR day on March 13. Nevertheless, there is no reason as of today to think there will be a contraction in the EBITDA margins. And the second question, I did not understand it. Can you repeat it?

Yeah, just if you could update us on your ambitions for M&A. Just wanted to understand if you feel the company should be ready now to start doing that again or you need to level up?

Let's see. We are not seeing any targets and should be aligned with the brands that we are operating, but there is nothing at this point for M&A. We have a lot of white space in the different brands and regions to work with it, and especially we have tremendous results with the things we are doing. So, non-M&A at this point.

Excellent. Thank you. Thank you very much. Thank you.

Thank you very much for your question. Our next question is from Ms. Sara Maldonado from Santander. Please go ahead.

Hi, good morning. Thank you for taking my question. Can you please comment about cost trends?

What are your expectations for world material prices for 2024?

This is... Thank you, Sarah. This is something that we've been always... We check every month, every single month, and we do projections for six months. There's very good news for us in that matter. Not only in the Sesta de la Compra that we call, of course, also energy prices in Europe that we've been affecting in 2022 are very steady right now at the prices probably of before the pandemic came. So I will think there is no other... and the exchange rate for us in Mexico regarding, as you know, we import cheese, we import coffee. That's our two main or two of the five main products that our business demands. So they are all covered. And we feel very comfortable, very steady about the situation of price. That will, of course, make a result of not increasing prices. So we can... Thank you very much. Thank you very much for your question.

Our next question is from Mr. Thiago Bortolucci from Goldman Sachs. Please go ahead.

Hi, good morning, gentlemen. First of all, congrats on what I'll call a remarkable year, right? And welcome, Federico, and thanks, Rafa, for the work. My questions are actually two follow-ups, right? There was one point regarding labor, and I understand, Federico, that you mentioned you see space for a margin to be flourished. I would just like to understand qualitatively in this front, right, what are you guys planning to do eventually to mitigate this effect over the earnings season? We have been discussing across the broad consumption space a lot, especially in regards of a higher minimum wage, but also potentially lower working hours, right? And my feeling is that this is a specific concern that might impact your operations, so I would like to to understand in more details how you're planning to offset this is the first question. And the second one, if I may, is related to capital allocation, right? Your margins are back on track, actually better and recovering faster than what we would imagine. You are resuming organic growth and leverage is at very healthy levels, right? Going forward, how should we think about the balance between eventually reducing your cost of debt improve inorganic openings or eventually starting to pay back through dividends or buybacks? These are the questions. Thank you very much.

Gracias, Tiago. Thank you for the comments. And yes, regarding the update of the labor, we are concerned about labor, of course. I mean, that's something that it will be sooner or later. As you know, and I told you in the one-on-one that we have, we have a in all our concepts, this restriction of hours. In Chile, 42 hours. In Europe, 40 hours. So we're already operating this company without the restriction in other geographies. Of course, our biggest geography is Mexico. We have 48 hours, and we know sooner or later that it can be a law change. We expect, because we've been talking to the Canada, to the Camara, and with our partners, that that... The law will come gradually. It won't go from 48 to 40 strictly. It will go gradually like in other ways. But we are already implementing our systems, our scheduling for our stores. regarding that issue. And I think in the burger concept, we are making a cinco por dos, that it's been very successful. So I am not very, very worried about that decision. The 20% increase of labor, sueldo mínimo that has been going on in the last five years, S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V and then I will turn off to Federico so he can tell you the capital.

Yeah, I'm complimenting Armando's answer. We have different tools to increase the productivity in the different stores. Obviously, the margins in the different brands and regions are not the same, so we do not expect even with the reduction of the journey or increasing the minimum wage to have a contraction and effect on the margin of labor. Passing to the second question about CapEx allocation. As usual, we allocate CapEx in the most profitable and resilient concepts, and we will keep a very similar pace in 24. in terms of openings with a concentration of around 60% for Starbucks coffee in the different regions. Obviously, Mexico and France concentrates a huge part of these openings. Nevertheless, as I said before, all our concepts will keep growing with new openings. We're in 24, the local heroes, Chili's Cheesecake Factory, et cetera. We believe in all our brands. So that would be the answer to your second question. Regarding the balance sheet, we have a lot of white space. We pretend to keep the pace, as I said before, to increase the openings, obviously profitable openings, remodeling the portfolio. The payback for the remodelings is amazing, Thiago. So we are not doing payings of debt with anticipation.

Amazing. Thank you very much.

And regarding buybacks, we are not preparing any kind of buybacks for this year.

Thanks, Benedicto.

Thank you very much for your question. Our next question is from Mr. Alvaro Garcia from BTG Patchwell. Please go ahead.

Hi, gentlemen. Thanks for the space. Congrats on results. Couple questions. One, just a quick follow-up on the foot in Europe. I'm just curious if you'll use shares at all to pay for that or if it's going to be strictly cash. And then my second question for Armando, I know you're obsessed with sort of maintenance capex and the capacity that has to drive same-store sales. I was wondering what opportunities you see into 24 and 25 with a much healthier balance sheet to sort of put some energy back into your brands. I was wondering if you could sort of, you know, What's on your mind in terms of opportunities in your portfolio? Thank you.

Hola, Alvaro. Well, regarding the acquisition of the entity of Europe, we are using cash plus F. So that would be the answer. And the second question?

Gracias, Alvaro. I mean, as you remember, and we talked about that when we had opportunities to each other, we are about one billion pesos less in the capex that we say in the Alciate and Rafa. S.A.B. de C.V we conclude the openings that we say in the LCA Day. We did the target of that. And we put less capex in the maintainers. Nevertheless, not doing a compromise of affecting the operation. So we're going to still, with that methodology this year, in LCA Day we will tell you what is the capex that we're going to implement. But we were probably 25-30% short over the capex that we told you in that And that is going to be especially what we're going to focus on, no? As I tell you, we would like to put all the CapEx in new openings, no? But as just Federico said, the remodelations are being a great success, giving us sometimes better return of investment than in other projects. S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V

That's super helpful. And then maybe just one last one. You mentioned your trends here to date weren't as great. Maybe if you could talk about your other markets, what you're seeing here to date. We're already at the end of February.

In Europe, that is the only effect that we have. And the effect is more in France. In the other concepts. Actually, we've seen growth. I mean, as Federico says, one digit growth, not the growth that we had. We started January a little bit low, but then February has been recovered. So I think we are willing to report again another strong report resulting for the first quarter.

Great.

We reported, just to tell you, Domino's Pizza has been just starting a terrific eight weeks, past eight weeks, with very, very great numbers for that concept. So we have this balance, and that's great to see.

For sure. Awesome. Thanks for the call. Appreciate it. Yes.

Thank you very much for your question. Our next question is from Ms. Camila Acevedo from UBS. Please go ahead.

Thank you for taking my question and congrats on the results. My first question is a follow-up to Renata's question. So please, could you elaborate on the commercial initiatives implemented at Starbucks in Mexico? And also, could you break down the performance of Domino's Pizza and Burger King in Mexico? That would be my first question.

Yeah, I mean, I don't know what was missing on the question regarding what are we doing in Starbucks, but I will again, it's about the digital transformation, the product transformation that we've been having in beverage, the drive-through leverage that has been helping us having a S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V S.A.B. for Burger King. Regarding Domino's, we had one of the best years in Mexico. Also, I will tell you, in Spain, a strong momentum for this brand in the beginning of this year. Also, with our transformation in digital, still we have our own native application that has been working, exactly the one that the U.S. allows. We are implementing GPS. in most of the stores, Flex, SDS. There's five or six concept that the U.S. and other countries have. We are already ready to implement. Some stores are already working. We did pilot tests. They are working fine. So we are really still working. As you know, five years ago, we started with aggregators in this concept. The U.S. went behind three years later, but we are working with aggregators. We raised success. And last year, nevertheless, I would say we did a promotion for carryout that we see a lot of opportunity to carry out, 149 with a pizza sartén that is giving us a great momentum. You know, 40% right now or above counts for a carryout segment. We will steer longingly and we will persist with that promotion in order to gain more market share in the carryout sector that there's a big opportunity still there.

and the increase in sales for Domino's Pizza and Burger King is around 10% for Domino's and around 9% for Burger King in the last quarter in terms of sales, Camila.

Perfect. Thank you. Super clear. And my second question would be regarding corporate actions. What are your latest thoughts regarding a potential IPO in Europe for the Starbucks brand? Is this something that is within your priorities for the short term?

We look for all the opportunities. Five years ago, we saw about the IPO in Europe, but it was not something fair for the company. It did not make sense. So we look at all the opportunities presented to us, but nothing at this time to comment.

Perfect. Thank you.

Thank you very much for your question. Our next question is from Mr. Fernando Herrera from Compass Group. Please go ahead.

Can you hear me?

Yes, yes.

Perfect. First of all, it covers the good results. And here I have two questions. The first one is related to pricing. I mean, do you still see space to keep increasing prices, especially in Starbucks Mexico? Or you have seen some sensibility in that front?

As I told you, we have a third-party company that has been working for us the last two years here, and there's always a space, no? There's always a space when you do things right and the customer goes with a great smile and their experience is great, no? So there has to be a space, yes. Something that we would like to focus in ticket average, I think, no, we... are a company that also likes always are focused S.A.B. de C.V S.A.B. de C.V S.A.B. de C.V We don't have a menu that is already settled down. We can move on back and forward any other week. In Argentina, we are flexible. Every 15 days, we move price. So we know how to deal with that. But nevertheless, in this time, we are very steady regarding the movements of price. We took the last incremental prices in some brands the first week of December. And since then on, we've been not moving anything.

S.A.B. de C.V

The money in dollars at this point, but for the future, we need to operate. There's a lot of white space for Burger King and Starbucks in Argentina. The figures are terrific, especially in Burger King is the country with the best transactions per store on a daily basis. So we have a lot of confidence in Argentina, and we will see it growing in the future, Fernando.

Great. Thanks.

Thank you, Fernando.

I think we're going to – one more? Or we're going to go to remarks? I think – okay. So, first of all, thank you. Thank you very much. Thank you very much for attending our quarterly and fully year video conference. If you have any further questions regarding that same day of our results, please feel free to get in touch with our investor relations team. I wish you a good week and have a great day. Thank you very much.

Alsea would like to thank you for participating in today's video conference. You may now disconnect.