Alsea S.A.B. de C.V

Good morning, everyone, and welcome to Alsea's third quarter 2025 earnings media conference. My name is Gerardo Lozoya, head of investor relations and corporate affairs. Today you will hear from our chief executive officer, Christian Gurria, and Federico Rodriguez, our chief financial officer. Before we continue, a friendly reminder that some of our comments today will contain forward-looking statements based on our current view of our business. and that future results may differ materially from these statements. Today's call should be considered in conjunction with disclaimers in our earnings release and our most recent Bolsa Mexicana de Valores report. The company is not obliged to update or revise any such forward-looking statements. Please note that unless specified otherwise, the earnings numbers referred to are based on the pre-IFRS 16 standards. I will now hand it over to Christian for his initial remarks. Please go ahead, Chris.

Thank you, Gerardo. Good morning, everyone, and thank you for being with us today. Thank you. Today, I'll provide an overview of our third quarter results, covering our financial earnings, regional highlights, and key brand developments. I will also highlight our progress on digital transformation, ESG initiatives, and expansion strategy. Federico, our CFO, will follow me with an analysis of our results, including revisions to our 2025 guidance. Before we turn to the quarterly results, I want to remind everyone of the continued focus on our strategic priorities that will guide us moving forward. As we mentioned last quarter, our first priority is to continue driving disciplined organic growth. S.A.B. de C.V In addition, we will continue rolling out successful commercial campaigns such as Menú del Día from VIPS in Mexico and Spain, Tres Para Mí or Three For Me in Chile in Mexico, Paradiso Italiano with Italianis in Mexico, and Good Med Burgers from Foster's Hollywood, among other initiatives which would have consistently improved our product offering and reflect our commitment on innovation. Our second priority is to optimize our brand portfolio. We will prioritize return on investment by ensuring that each brand and store format is aligned with the needs of each regional market. Also, scalability and growth across all brands remain a core focus to unlock their full potential. We are also addressing and analyzing potential divestments on noncore assets to concentrate on the business with the greatest strategic and financial value. Our third priority is to enhance profitability. More value is being generated in our existing store's portfolio through consistent operational improvements by leveraging the strength of what we call high-impact operational talent. Organic growth is supported by strategic new store openings and the remodeling of key locations. As mentioned, two stores are being remodeled for every opening. As refreshing, the existing base delivers faster and more efficient returns on capital. Finally, our fourth priority consists on discipline and strategic capital allocation. We will prioritize growth and productivity initiatives with clear return thresholds. Also vertical integration and long term sustainability continue to be central to our strategy. Our CapEx plan is being optimized, adjusting long-term investments to become even more efficient and ensuring every peso invested aligns with our capital allocation priorities as well as different G&A efficiencies that we have been consolidating and working through the year. Now, I'll provide an overview of our quarterly performance, including our financial results, regional highlights, and key brand developments, along with updates on our digital advancement ESG initiatives and expansion strategies. In the third quarter, we reported a 5.7% year-over-year increase in total sales, reaching 21 billion pesos, or a 6.7% increase, excluding foreign exchange effects, since store sales grew by 4.1%. EBITDA increased 1.8% in the third quarter, reaching 2.9 billion pesos, with a margin of 13.7%, decreasing by 50 basis points year-over-year. Regarding brand performance during the third quarter, Starbucks Alsea same-store sales increased by 3.9%. For Starbucks Mexico, same-store sales grew by 3.3%, demonstrating solid in-store performance backed by our loyal customer base. For Starbucks Europe, same-store sales increased by 1.6%, reflecting a challenging environment in France, offset by continued strong momentum in Spain, driven by effective commercial initiatives. Given the strong results in Spain and the importance of the brand in the country, we are very excited about the latest opening of our flagship store in the Santiago Bernabéu Stadium, Starbucks Bernabéu. Finally, in South America, same-store sales rose 9.6%, driven primarily by Argentina. Excluding Argentina, same-store sales declined 1.3%. Nonetheless, there is a sequential improvement in Chile despite lower traffic. Domino's Pizza Alsea posted 2.6% increase in same-store sales. In Mexico, Domino's same-store sales increased 1.6% driven by our continued efforts in product innovation. In Spain, same-store sales increased by 2.9% reflecting the ongoing effective promotional efforts and positive customer response to product innovation. In Colombia, Domino's delivered strong results. Same store sales increased by 9.1%, supported by successful marketing initiatives. Burger King's S.A.B. same store sales, excluding Argentina, decreased 1.4%. In Mexico, Burger King reported a decrease in same store sales of 1.7%. This was driven by a shift of mix toward low price and discount items, combined with a decrease in premium innovation and digital coupon. The full-service restaurant segment delivered a 4% same-store sales growth. This segment remains strong and resilient, supported by marketing campaigns that enhance our product offering and demonstrates our commitment to innovation. Full-service restaurants in Mexico increased by 5.3%, with most brands growing at mid-single-digit pace, while Chilis and Italianis stood out by achieving high single-digit growth. The performance was driven by the strength of our value product menu offering, product innovation, and launches. Same-store sales for full-service restaurants in Spain grew 2.4%, with Foster Hollywood and Genos delivering solid growth of 5.5% and 4%, respectively. We are focusing on introducing new and premium products to attract new guests, capitalize on existing traffic, and strengthening our customer loyalty. Our global expansion strategy remains focused on prioritizing quality over quantity. targeting the most profitable opportunities across our key markets. We remain committed to delivering strong value to our customers, maintaining our pricing strategy and customer loyalty through our resilient brand offering. In the third quarter, we opened 46 new stores, 35 corporate units, and 11 franchises, with an emphasis on high traffic and high potential locations. S.A.B. de C.V. Given the profitability and payback of store remodeling, such as increased customer satisfaction and higher sales, we will continue prioritizing a refreshed and modernized look across all our locations. Our digital platforms continue to be key drivers of growth. By the end of the quarter, loyalty sales increased 7.9%, reaching 5.1 billion pesos, representing 24.6 million orders and contributing 26.1% of total sales. We also surpassed 8 million active users across our loyalty programs, confirming the strength of our digital engagement. Additionally, we serve nearly 33.6 million digital orders in the quarter, totaling 7.3 billion pesos, which represents 37.4% of our total sales. This quarter, we continue to strengthen our sustainability model by aligning our purpose with every aspect of our operations. As part of this effort, we made significant strides towards reducing CO2 emissions, installing over 215 solar panels in Europe, and installing 159 kilowatt per hour of power of Power in Spain. In Mexico, Starbucks served over 1 million beverages in reusable cups and granted 3.2 disposable cups as part of our efforts to reduce waste. We also continue to strengthen our social impact through Fundación Alsea and Movimiento Va Por Mi Cuenta, supporting vulnerable communities and driving positive change. As we launch new fundraising campaign, we expect to surpass previous year's results, reinforcing our long-term commitment to responsible, purpose-driven growth. Let me now turn it over to Federico, our CFO, who will provide further insight and financial performance. Thank you.

Thank you, Christian. Good morning, everyone. During the quarter, the sales increased by 5.7%, supported by the brand resilience and strong performance in Mexico, Spain, and Colombia. Excluding foreign exchange effects, sales increased 6.7%. In the third quarter, sales in Mexico were up 7.5% to 11.5 billion pesos. In Europe, sales increased by 8.2% to 6.5 billion pesos, while in Europe sales increased by 3.8%. Finally, South America sales fell 4.7% to 3.1 billion pesos. The EBITDA increased by 1.8% with a margin contraction of 50 basis points, mainly due to a loss of operating leverage given the lower consumer environment in the month of September. These impacts were partially offset by the resilience of the brands across most regions, disciplined revenue management, and improved SG&A efficiency. In this context, we chose to limit price increases to protect traffic and sustain brand competitiveness amid consumer demand slowdown. In Mexico, adjusted EBITDA remained flat as there was lower operating leverage given the softer consumer environment in the month of September. In Europe, adjusted EBITDA increased by 6.2% year-over-year, primarily due to an increase in same-store sales of 2.3%, driven by new products and campaign launches that led to improvements in all brands, offsetting higher labor costs. In South America, adjusted EBITDA decreased by 14.2%, reflecting a lower consumption environment in the region, except for Colombia. A slowdown in consumer activity weighted on operating leverage and contributed to the slow recovery in the region. The net income for the quarter increased 559% year-over-year, reaching 512 million pesos, reflecting a positive non-cash effect, which reduced the cost of our U.S.-denominated debt in Mexican pesos terms. The CapEx for the first nine months of the year totaled 3.8 billion pesos. Of this total, 77% was allocated to store development initiatives, including the opening of 35 new corporate units, the renovation and remodeling of existing locations, and equipment replacement across the branch. The remaining 23% was directed at the strategic projects such as the distribution center in Guadalajara, technological upgrades, processes improvements, and software licenses, all reinforcing the long-term competitiveness and operational efficiency. At the end of the third quarter, the pre-IFRS 16 gross debt decreased by 1.8 billion pesos year-over-year, reaching 51.8 billion pesos. The company's net debt, not counting the impact of IFRS 16, was 34.5 billion pesos, which is 2.5 billion more than it was at the same time last year. This increase reflects the bank loans used to settle the minority stake in the European operations, short-term debt for working capital and capex needs. Consolidated debt debt reached 47.1 billion pesos, including lease liabilities. At the end of the quarter, 74% of the debt was long-term, with 67% denominated in Mexican pesos and 33% in euros. will remain focused on maintaining a healthy capital structure supported by prudent financial management. At the end of the quarter, the cash position stood at 4.7 billion pesos. Turning to financial ratios, the total debt to post-IFRS 16 EBITDA ratio closed the quarter at 2.9 times, while the net debt to EBITDA ratio stood at 2.6 times. Well, while we are still committed, we have adjusted the 2025 guidance given the negative impact generated by a lower than expected consumption dynamism during the month of September and the ongoing impact of the appreciation of the Mexican peso affecting the top line. Now, we expect a high single digit top line growth and a low single digit EBITDA growth for the year. I will now pass you over to the operator for the Q&A session. Thank you very much.

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.

Hi, good morning, and thank you very much for taking my question, Christian Fivico. So, two ones real quick, just following up on some of the commentary you had about the softness towards the end of the quarter in September, and obviously the guidance adjustment as you look now for a slightly lower top line. If you think about the weakness, how has that potentially carried into the fourth quarter in October, and are you seeing any difference between the formats? So thinking coffee versus pizza versus burger versus food services across the board, are there certain areas that are a little more affected versus others? So just a little more granularity as to the weakness in September, maybe over the last couple of weeks, to understand what's driving that kind of tradition.

Good morning, Ben, and thank you for your question. The reality is that, as we mentioned, the third quarter was we saw July and August pretty balanced, and then we have an important drop in September. And this was across, in general, brands and geographies. It's not specific to a particular brand. Obviously, as we mentioned in the report, some of the South American countries, we have a slower, a higher impact in those countries due to the deceleration of consumption. But in general, it was across all geographies and markets. And as you asked, going into Q4, it's too early, no? It's been two weeks in October. We see a similar trend in October. Nevertheless, we have very strong commercial initiatives in all of our brands and across all of our geographies for Q4, focusing on mainly three particular aspects. One is product and customer experience innovation. The second one, value. We can share some examples of some of the initiatives that have been paying off across the year regarding value, like Tres Para Mi in Chile, in Mexico, Paradiso Italiano in Italian in Mexico, Noches Magicas or Magical Nights in Ginos in Spain, and Gourmet Burgers in Fosters and many of the day in some of our brands. which have been continued driving traffic and that nevertheless for Q4 we have very, very strong and powerful innovative and customer experience driven campaigns that we are confident that will help us drive the traffic during this quarter. But something very important to highlight is always protecting this gross margin while we preserve traffic. We know that during these times of lower consumption or slowdown, the brands that remain loyal to their customers are recognized when traffic comebacks. So that's what we are focusing on.

Thank you. Perfect. And then my second question is you mentioned potential asset disposal. Could you just elaborate? Is that more like... regions you think of not being worth maintaining, or is it brands in particular? I mean, we've seen, for example, the Burger King transaction in Spain, so is that something maybe in other regions to follow? How should we think about this?

We have been very vocal regarding divesting processes that we are setting in different non-core units. I would say that is one of the main priorities not only for this year but for the future. And we're still dealing with more potential buyers for different business units. It is not going to be relevant in terms of the contribution to the top line or to the EBITDA. S.A.B. de C.V

Thank you very much for your question. Our next question is from Mr. Thiago Bortolucci from Goldman Sachs. Please go ahead.

Yes, hi, good morning everyone, and thanks for taking my question. I'd like to understand a little bit more the add up of the revised guidance, right? And this is on top of one very particular moving part that is effects. You cut revenue and EBITDA similarly, which, you know, could suggest as your broad expectations for margins are virtually unchanged. obviously we know that the stronger currency the translation from Europe is a headwind but gross margin could actually benefit from that going forward right so this is just to see if you could elaborate a little bit more on how you're seeing effects translation versus transaction effects how your hedging positions are how you're thinking about pricing and cost and more importantly what is your underlying assumptions for margins going forward thank you very much

Thank you, Tiago. I will answer the first part of the question regarding the cutoff of the guidance in top line and in EBITDA growth. Obviously, we are losing the operating leverage and even while we are having some help in terms of EBITDA margin from Europe because of the appreciation of the peso in comparison with the euro, we are losing some kind of operating leverage in Mexico too. We had a really weird quarter. We have a good July and a strange August with one strongest week and a terrible September. So that's the reason that we are cutting off all the guidance for the rest of the year. And I would say it is only operating leverage. We are having tailwinds from the FX. You know that we deliver a guidance with a forecast of 20.8% S.A.B. de C.V with three quarters out of the 13 weeks of the last quarter, it is pretty early to say what is going to happen. That's the reason of the haircut of the guidance. So if you want to complement.

Yes. Good morning, Tiago. And also regarding gross margin, we have seen positive tailwinds regarding COX. As you know, there was a lot of pressure on COX of goods, particularly with some commodities based on the FX. Now we're seeing that both the internal initiatives that we shared some of them last quarter are starting to pay off. You know, there's normally three to five months of time when you start seeing the different initiatives to pay off. We're seeing that. And also, on the other hand, the initiatives that we have implemented and consolidated around productivity and labor, we have seen them to start to pay off. So in these terms, we are seeing a slow but steady margin recovery in our brands through these initiatives. And still have had some increments on beef, no? But we are, again, it's part of our business. We are managing every year as they come and through different platforms.

No, thank you. This is helpful. And if I may, a quick follow-up. We have been discussing on our open remarks and now the drag in September, right? Anything you could share to help us calibrate the magnitude of the pressure that you saw particularly in that month?

We do not disclose the transactions by brand, but obviously there are some brands where we had a contraction of around 100 basis points in terms of the same store sales in comparison with the previous two months. And that's the reason, as I said before, Tiago, it was only one month, unfortunately, when we take a look at the guidance. 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. de C.V S.A.B. de C.V

Mr. Alexandre Fuchs from ICAO-EBA. Please go ahead. Our next question is from Antonio Hernandez from Atinter. Please go ahead.

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I would say it's really macroeconomical factors, Antonio. I cannot say that we are dealing with something different from a cost of food point of view or something internal. I would say that we are delivering the same campaigns. Obviously, most of the value coming from traffic, we have been telling you these guys, we are not doing a 100% pass-through coming from Pickett. We have positive tailwinds regarding FX. Obviously, we have 30% of the food basket dollar index. And I would say that everything is known from competitors. We know that the competitors are slowing down the pace of openings, especially in coffee and pizza. But having said this, we're not dealing with something different from a commercial point of view. Do you want to...

To avoid being repetitive, it's more, we have seen in general a deceleration on consumption, particularly after the end of the summer, which had its peak in September. We know that normally every September it slows down. Nevertheless, this was a little bit more, the peak or the value was higher. So again, this has to do more to a macroeconomic environment, and in general we see less trust on the consumers in certain geographies as Europe, certain economies slow down in South America, and likewise in Mexico. But we expect to have, as you know, most of our S.A.B. de C.V

Okay. Okay. Perfect. Thanks. Have a nice day. Thank you, Antonio.

Thank you very much for your question. Our next question is from Ms. Renata Cabral from Citi. Please go ahead. Ernest? Can you open your camera?

Yes, I did.

Don't worry.

Go forward with your question, Renata.

Thank you so much, guys. Sorry for the problem with the connection here. My question is regarding Europe and the improvement that we are seeing there. 2024, we know that it was a challenging year in terms of same-store sales, and we are seeing now any stabilization in the region contributing to the company's results. So my question is, what were... S.A.B. de C.V

Good morning, Renata, and thank you for your question. Let me take that one. I believe what we have seen in terms of the recovery that you mentioned, particularly driven by Spain, we've seen a very S.A.B. de C.V The first half of the year, they were very much driven in having more, let's say, less traffic-driven and promotional activity, which brought us good margins. And now the second half for Domino's will be more driven on achieving traffic, obviously protecting the margin. So I would say, to make the answer short, is the consolidation. S.A.B. de C.V drivers, and likewise as protecting value and margin for the customer, to protect value for the customer, to drive traffic, but at the same time in a smart way to protect our margin. So I believe understanding what is the behavior and what the customer is looking for is what's being paying off, particularly driven by S.P.A.Y.

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and to complement this last part that you mentioned Renata also we have seen this let's say approach where we consolidate the brands and when we are capturing opportunities like in the FSR segment where we are creating and generating a lot of synergies, it's paying off. So, in a way, the strategy that we started at the beginning of the year in these terms is maturing and we are already seeing part of the benefits of this strategy.

Very clear. Thank you so much for this.

Thank you, Renato.

Thank you very much for your question. Our next question is from Mr. Ulises Argote from Santander. Please go ahead.

Hola, senores. Buenos dias. Thanks for the space for questions. I just wanted to understand a little bit better here on the pace of remodelings. Is this something we can expect going forward for the next couple of years, or what's more the timeline that you guys have in mind for this? And also to understand if this is focused on any specific format or region, or if it's more across the board. Then a follow-up to that is if you guys have any color that you can share maybe on the sales list that you're seeing on these remodel stores. Thank you very much.

Yes. Good morning, Ulises. I will take that one. Yes, as I mentioned in our first call, one of our main priorities is how do we make our existing portfolio more profitable through driving same-store sales and basically driven by traffic. And remodeling is clearly a very strategic lever S.A.B. de C.V or remodelings. We are just an adapt to the reality of each one of the stores and the needs of each one of the stores. So as we mentioned in our last call, we are in an average of two to one, two remodelings or renovations for each opening. That shifts between different brands. Some brands or some geographies, we have three to one. Some cases we are one to one, but clearly the renovation of our existing portfolio is one of the key drivers of traffic together with having the best operational talent in each one of our stores, which is also one of our key strategies where we are focusing. Regarding the payoff, where we have seen the highest impact in terms of payoff is in the FSR or casual dining segment and in Starbucks because obviously different from Domino's or the customer doesn't necessarily stay in the store for a long period of time. In the case of a Starbucks and our food service restaurant segment in both geographies, we clearly see that the customer really appreciates this type of renovation. So we've seen between mid to high single digit growth in some of the segments and to double, I would say double. Low teams. Low teams in the case of FSR. So it's a core, it's part

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

Hi, Christian, Federico, Gerardo. Thank you very much for taking my question. I have two here. So firstly, could you discuss a little bit more about the input cost, particularly in this scenario of peso appreciation? We kind of wanted to get a sense of how you're thinking about your profit inflation going forward and how that compares to what you have experienced through this year. and how should you think about the margin setup for next year. And my second one, it's a quick one, is regarding leverage ratio. You've just reiterated your guidance for this year, so we were wondering if you have any views you could share for next year, any kind of range or what you'd be aiming for. That's it. Thank you very much.

Okay. Thank you, Isabella. Regarding the input costs, we are not having, I'm talking only regarding Mexico and South America, we are not having more headwinds regarding FX. I would say that at this point of the year is totally comparable and in some cases better than in 2024. That's from one side. As you know, we have 30% of the inputs dollar index in Mexico and the rest of South America's brands. And additionally, for the next year, we are forecasting a low single digit input cost for 2026. And regarding the guidance, we changed the guidance for 2025 from allow things in top line to high single digit and regarding EBITDA growth from a mid single digit to allow single digit. Regarding 2026, it is too early. We are building our budget with the different variables. So we'll tell you something in the next conference in the month of February. Thank you very much.

Thank you very much for your question. Our next question is from Ms. Julia Rizzo from Morgan Stanley. Please go ahead.

Hello, good morning. Thank you, everyone, for taking my question. I have three, actually. One, it's a... Could you... I noticed a sharp increase in the leasing expense on the cash flow from 4.6, from 3.6 billion, 26% increase actually, which is quite high compared to your sales and also to the store base. Is there anything here with a renegotiation in some region specific, some brand? Okay, Julia.

Yes, Julia. We have been very vocal from December on regarding the lease change that we do from a post-IFRS 16 perspective. As you know, we manage the business on pre-IFRS 16 figures. But the change was because we standardized the criteria of all the leasing contracts across the geographies. to have a single one company-wide. For example, we had a different policy in Europe from a BIPs perspective that BIPs here in Mexico, while it's the same business, etc. So it is more an accounting perspective than a real change on the lease payment that we do on a monthly basis. This does not imply just to be repetitive and increasing the rental expense, but in the way that we account these leases. This is an effect we'll have until the last quarter of 2025, and from the first quarter of 2026, it is not going to be a relevant change. I don't know if you had another question, Julia?

Yes, just a follow-up. I'm not talking about the depreciation and amortization. I'm talking about the cash flow payment on the free cash flow generation. Non-changes.

From a free cash flow payment, it is pretty much the same. We have around 35% of the lease contracts on a variable base, totally linked to the depreciation. S.A.B. de C.V

Okay. So, we follow up that later. Also, on the interest expenses, also, when we analyze the rate of how much you paid, again, on a cash basis, the 2.9, almost 3 billion pesos, compared to the average net debt of the period, we have kind of a rate around 14%, roughly, which is well above the base rate. Is there anything here that is not occurring? Again, looking forward, how we should expect the cost of that or interest expenses to be?

Well, unfortunately, it was like that, because even while we had the $500 million bonds at 73 quarters, it is stopped. So we pay a rate above 13% from the dollar bonds. And that's the reason, and I want to link to what are we doing with the LT, with the liabilities management for for 2026. We are moving forward accordingly to the plan. We are almost ending with their financing of the 100% of the liabilities, the financial liabilities in the balance sheet, and we'll have savings above $20 million for 2026. We're still dealing with it. That's the reason I do not want to give you more details, but we will change from bonds in S.A.B. de C.V

Fantastic. Last one would be on the remodeling, the increased focus of the company on the remodelings. Is there any specific brand or region that you're going to allocate resources more or less? And can you give me a rough sense of how much it costs to remodel in a Starbucks versus one opening? We can make some calculations here of... How that would be?

Regarding the cost, it's around one-third of the cost of a new opening.

And regarding the regions and the… Yeah, regarding the regions and the brands, as I was sharing before, Julia, the brands where we see that react most, the best when we do a remodeling are Starbucks and all the FSR segments. So we also do remodelings in some of the other brands, but we are focusing mainly on the brands where we have the best reaction from our customers in terms of traffic, which are the casual dining segment and Starbucks. S.A.B. de C.V And I can tell you that, or in the case where we see some additional competition coming in, so there is a different, very strategic approach to this. And as I mentioned before, we are privileging remodelings over openings with a much more focused and disciplined growth.

So it's mostly Starbucks and casual dining. Yes, correct. But the region, you don't have a specific target if it is in Mexico?

No, it's in general. In general, obviously where we have a higher number of stores or a bigger portfolio like we do in Mexico with more than 900 Starbucks stores, you will see a bigger number of renovations. Likewise with the FSR or casual dining segment in Mexico. in Mexico and Spain, where we have also an important portfolio there. So that depends more on the size of your existing portfolio. But this is a very high priority for us, and with a good ROI every time we do a study. What we're saying is a third of what we do in a new store, and the ROI is very, very good.

Thank you. Thank you, Julia.

Thank you very much for your question. Our next question is from Mr. Bruno Ramirez from J.P. Morgan. Please go ahead.

Hi, everyone. Thank you for taking the question. Her question would be regarding full-service restaurants. How sustainable is to keep seeing this performance as it has been in the past four years? And second question would be about the run rate for CAPEX levels.

Thank you. I will go with the second one regarding the CAPEX. This year we will be spending around 6, 6.1 billion pesos for CAPEX. We are turning things into the company so only we have non-brain projects. As you know, we have recently opened the facility of the distribution center in Guadalajara. It was a on Tuesday, and it will have a lot of profitability and diversification to all the different routes. So for 2026, I think that the guidance, as I said before, it is too early, but should be in the range of 5.5 billion pesos, at least for 2026. And the openings should be a similar figure to what we have seen during 2025 of around S.A.B.

As you have seen in the past 24 months, we have seen a very steady growth in the performance of our FSR segment, both in Spain and Mexico. S.A.B. de C.V where we are working, we have seen clearly brands like Chili's doing an extraordinary, with an extraordinary performance in the U.S. So we learn a lot from that. We continue holding hands with our franchisors and seeing how this is really being executed and transferred with some value driven initiatives in Mexico. Likewise with the Cheesecake Factory. So I think the preference of the consumer of our brands S.A.B. de C.V into this attractive or sexy approach into trying to reduce costs by reducing portions or things. We are clearly going the other way. We are very disciplined in maintaining our value-driven initiatives. that have been there for more than three years now, and we keep refreshing them with innovation and new products. So, again, this is a segment that we are very happy with the performance. At the same time, we are very – obviously the investment in these types of products of stores or restaurants is an important investment, so we are always very cautious and careful on going for the no-brainer and locations that we know we're going to do well. And as I said before, we still have an important number of stores to renovate, and we know that this is going to drive and continue driving additional traffic. and also in some cases growing through our franchises is a very important part of our strategy. Our franchises are very happy and confident with the performance of this brand, so we continue getting demands on trying to continue developing the brand through franchises, particularly in Europe and in some of our brands in Mexico.

Thank you. And just a follow-up question regarding CAPEX. Beyond 2026, what percentage of sales should we expect? Is 2026 levels a good proxy beyond 2026?

I would say it should be around 1.5% as a perpetuity rate, the capex plot. It is better to have the guidance and I will deliver both answers, what to model in 2026 and what is happening in the next 10 years.

Thank you very much for your question. Our next question is from Mr. Nicolas Riva from Bank of America. Please go ahead. Our next question is from Thiago Bortolucci from Goldman Sachs. Please go ahead.

Hey guys, I don't know, but I think I'm double-counted here. No further questions on my end.

Thank you.

That was the last question. I will now hand over to Mr. Cristian Gurria for final comments.

First of all, I want to thank everyone for being here today and the interest and for your... questions. Thank you very much. Before we conclude, we'd like to thank you for your participation and interest in our quarterly conference call. If you have any additional questions or require further information, our investor relations team is always available to assist you. We wish you an excellent day, and look forward to having you join us for our next quarterly season. Thank you everyone! Thank you.