AmRest Holdings SE

Good afternoon, everybody. I would like to welcome you all to the AMREST first quarter 2024 results call. My name is Brica and I will be your moderator for today. All lines are on mute for the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. Otherwise, you can type a text question in the Q&A text box provided online in the right-hand corner of your screen. I would now like to pass the conference over to your host, Lucas with Wooden Company, to begin. So, please go ahead.

Okay, thank you. My name is Lucas Wachełko. I am presenting Wooden Company. Again, the pleasure of moderating the call with Wambres. The company is being presented by CFO Eduardo Zamarripa and Chief of IR Santiago Camarero. Guys, not to take too much time of yours, we already have a four-minute delay. The mic is yours.

Thank you, Lucas, and good afternoon, everybody. And thank you for joining us in today's first quarter 2024 AMBROIS Results presentation. It is always a pleasure to have the opportunity to share with you AMBROIS results and our views on our passionate industry. This first quarter, of the year show a business that was accelerating as the quarter progressed, even though most European countries have started 2024 with a timid economic growth that was lower than initially expected. At the same time, inflation has also been declining faster than expected, mainly thanks to the sharp correction in energy prices. This price moderation together with the continuous strength of the labor market, is starting to have a positive effect on real wage growth and household purchasing power. However, the context of high political risk remains, and this has affected consumer confidence and propensity to consume in this beginning of the year. But let's start with today's presentation. If we go to the slide two, please. As you know well, Ambrose is Europe's leading restaurant operator with a portfolio of almost 2,200 restaurants in 22 countries across Europe, Middle East, and China. We keep a balanced portfolio of franchise and proprietary brands that covers a wide spectrum of vocation of use. As a result, more than 30 million customers visit our restaurants every month. where they find a distinctive service provided by over 45,000 passionate AMBRIS teams. If we move now to slide three, I am going to try to summarize in five points the most relevant event in the beginning of the year. First, AMBRIS generated revenues of 593 million euros in the first quarter of 2024. a growth of 5.2% compared to the same period in 2023. Second, the VITA generated amounted to 81.1 million euros, up 14.9% versus the same period of 2023, which puts the VITA margin at 13.7%, over one percentage point higher than in the same period of 2023. Third, the net profit generated in the period amounts to minus 2.1 million. The progress at the commercial level were offset by higher financial expenses as a result of the higher rates. Fourth, the group's leverage ratio defined as net debt EBITDA X IFRS stood at two times. This is at the low end of the target level range defined for the group. Fifth, finally, at the end of the first quarter of 2024, AMBRIS managed a portfolio of 2,197 restaurants after a net increase of nine units, mainly located in CEE countries. In the following slides, we will go into more depth and detail of these points. But let's first start with what we are doing in our different brands on slide four. The commercial position of our brand plays a crucial role in the value generation of Amherst. Let me start with the quick service and coffee brands in slide number four. Starbucks is the brand that turns everyday beverage into a cherished moment. In first quarter of 2024, with a growing lineup of limited time offer drinks, We aim to enhance Starbucks' reputation as a source of creativity, inspiration, and joy. In KFC, since the beginning of the year, we have been delighted our customers by consistently offering their favorite chicken classics. But that's not all. We have also introduced exciting new flavors. Well-known and iconic products mixed with totally new, delicious, wild products. At KFC, everyone will find a taste for themselves. For Burger King in 2024, started with a revolution in digital aspects. Through the digitalization, the brand aims to provide every customer the majestic experience of feeling like a queen or king. Now, moving to the fast casual and dinner and dining brands in slide five, please. At Sushi Shop, The Spanish chef Albert Adria has signed the new menu. Committed to both tradition and innovation, the three-star chef is an emblematic figure in world gastronomy. Exclusive and original recipes combining new flavors and new forms of sushi perfectly completed our existing menu. At Pizza Hut, a strong promotion returned in January through an all-you-can-eat mechanism. This time, not only in full-service restaurants, but also in fast casual, enabling the mechanism to be implemented in more countries. At La Tagliatella, we maintain our commitment of providing exceptional service to our guests and serving the finest Italian recipes. All the new dishes at La Tagliatella are associated with innovation, quality, and origin. We launched our 2024 menu, including new additions like the pizza tricolore, emulating the Italian flag with new ingredients. And finally, at Blue Frog, we are providing to our guests an unforgettable taste adventure, whether it's a reunion fest or a cozy date. Blend of traditional delicacies and modern flavors, delivering a unique culinary experience. If now we move to slide six, please. As I mentioned, revenue generation in the quarter accelerated as the third quarter progressed. After a week January, sales gradually recovered and we closed the quarter with almost 593 million euros of revenues generated in the first quarter of 2024. A growth of more than 5% compared to the same period of 2023. At the same time, you can find on the right-hand chart the evolution of the 12-month trailing average revenue per store that is growing steadily for the last three years, providing a good indicator of both the health of the business and the level of exploitation of economies of scale through the sales leverage. Moving to slide seven, we have discussed on several occasions the prominent role that the technological innovation is having in the transformation of the restaurant industry. In this slide, we provide the evolution of two key indicators that explains this statement. First, on the left-hand graph, you can find an increasingly wide channel between the growing total sales and the part of the sales coming from the dining channel. is the space occupied by the alternatives takeaway and the drive-through distribution channels. Secondly, in the graph on the right, you can see the rapid growth of digital sales. That means the orders that we receive through digital channels. In the first quarter of the year, they accounted for 56% of the group total sales. The importance of these orders come from the higher value that we are able to extract. Now, moving to slide eight, let me share a few comments on the group profitability. The beta generation stood at 81 million euros in first quarter of 2024. This is an increase of 15% compared to the first quarter of previous year. The beta margins reached 13.7%. This is over one percentage point higher than in the same period of 2023. The moderation in both supplies prices and energy costs are the main reasons behind the improvement in profitability, which also reflects the progress made in terms of efficiency. The positive effects of economies of scale and appropriate pricing decisions. In terms of operating profit, EBIT, the annual growth was even higher and stood at 30%. This represents an EBIT margin of 3.1%, versus 2.5% in the first quarter of 2023. If we can go now to slide nine, you can see that Ambrose operates directly or via franchisees a portfolio of 2,197 restaurants. This portfolio has undergone structural changes during the last years in order to provide a better and more efficient capital allocation which results in the transfer and closure of underperforming businesses, which together with our relevant organic growth of restaurants, 11% on the net basis since COVID eruption, has shaped our current portfolio. With this, Santi, if you can go over the main financial highlights, please.