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My name is Lucia and I'll be your operator today. Ask a prepared remark or give an opportunity to ask questions. I'll now hand over to your host, Lisa Twitchell, to take it again. Please go ahead.

Good afternoon, ladies and gentlemen. My name is Piotr Watełko. I'm the director of the company and I'm the usual moderator of the call with on-race. Thank you Lugas.

Good afternoon and thank you for joining us today in SECOND QUARTET 2024 Canvas Results Presentation. It is my pleasure to share with you and updates of unrest situations at the end of the quarter. In this period, the major European economies have shown relatively weak economic growth and moderate increase in standard consumption, driven by the outage flow. However, with relevant differences across countries. As we are going to see later on, we had a very good performance in countries such as Spain and Poland, while business development in France and especially in Germany were negative. In addition, inflation pressure continues to moderate across the region, supporting a little margin expansion in most of our markets. But let's start with today's presentation if we go to the slide 2, please. As we usually do, let me remind you that 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 offers a wide range of consumption occasions. 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 and received. If we move now to slide 3, I'm going to try to summarize in 5 points the most relevant events for the first half of the year. This generated revenue of €1.2 billion in the first half of the year, with a growth of 5.2% compared to the same period in 2023. Second, the EBITDA generated amounted almost €194 million, of nearly 13% versus the same period of 2023. which puts the VISA margin at 15.7% over 1 percentage point higher than the same period of 2024. Third, the operating profit generated in the previous amounts to 23.5 million euros. After registering a value correction of 41 million euros in the goodwill of SushiShop, the total investment book reached 44 million. Fourth, the financial risk profile of the group is very stable, with a leverage of two times. This is at the lowest end of the target leverage range defined by the group. And finally, during the first half of the year, we opened 40 new restaurants and renovated 140 units. In the following slides, we will go into more detail on this point. Let's start with what we are doing in our different brands on the slide four. The commercial position of our brand plays a crucial role in the value generation of others. Let me start with a quick service and copy brand in this slide number four. Starbucks maintains its long, strong leadership position among coffee shop users. We have kept our strategy focused on customers' daily coffee addicts through coffee offers and everyday beverages. In KFC, since the beginning of the year, we have been delighting our customers by consistently offering totally new products as follows. Deluxe shakes with new flavors of bubblegum and popcorn, or pizza twisters, creating a culinary revolution is a delicious fusion of our icon KFC twisters and the worldwide love pizza. For Burger King, we are happy to inform that a new Burger King app is now working in Poland, Czech, and Romania. This gives our guests the opportunity to check current offers, find restaurants, and be able to use the special on-the-app user offers. During the following month, Additional app solutions will be formed as mobile ordering and loyalty products. Now, moving to the cash-landing brands in the United States. Regarding sushi shops, we already referred to the goodwill impairment group. Two reasons have triggered this new value correction. The first one, related to economic factors reflected in the increase in the discount rate used in the models. And the second is the construction in terms of our close expectations of the plans until profitability is fully restored. Commercial initiatives, as the new menu elaborated by the Spanish Chair, Albert Adria, for an unprecedented collaboration of the iconic video game character, Pac-Man, will help this route, complemented by a rigorous program of operational efficiency, commercial positioning, and the creation of synergies with the rest of the group. At Picturehut, we are cooperating with Darkshell Movie Premiere in Poland and Czech Republic. At La Tagliatella, following the demand and our goal to let everybody enjoy our dishes without the return of limitations, we have opened a new Tagliatella Stanza Brutine in Portugal. This is the second restaurant of this kind that shows our commitment with the Celiac audience and our objective of increasing our strength in this sector. And finally, at Blue Frog, we are providing to our workers with an unforgettable taste adventure. We have introduced our new quarter menu in May. Appetizers, snacks, and revolutionary grill products make a delicious blend of creativity and value for Blue Frogs. which has been a great success in mitigating the difficult consumption situation in China. If now we move to slide 6-3, as I mentioned, China generated a revenue of more than 1.2 billion in the first half of the year, which rose of over 5% compared to the same period in 2023. These growths were relevant in a context where consumer spending has been I think that the success has been to adapt in this moment to a very price sensitive and value-seeking cost. On the right-hand chart, you have evolution of the 12-month trading average revenue per score that continues the steady growth for the last three years now, providing a good indicator on both the health of our business and the level of exploitation of economies of scale through the sales leverage. Moving to slide 3, as can be seen in this slide, the group progress in digitalization is another factor that continues to support our activity merits, as sales through digital channels making up 57% of total sales during the quarter. In terms of consumption channels, dining consumption remains stable as the preferred alternative consumers, according to 45% of consumption locations. We see stability of the distribution channel breakdown during the last quarter. Now moving to slide 4. The beta generation stood at 194 million euros during the first half of the year. This is an increase of 13% compared to 2023. The beta margins reached almost 16%. This is over one percentage point higher than the same period of 2013. The main factors behind this margin exposure are lower cost pressures and the positive effects generated by the increase in the average sales progression. The continuous progress in efficiency and the achievement of clear strategic objectives aim at promoting optimization and saving initiatives throughout the group. The graph of the left shows the price evolution, according to the power of some of our main inputs. It is clear that the enormous cost-pressure experience in few quarters ago is now behind us, and our margin is benefiting from the rotation of new contracts. If we can go to slide 90, in terms of fluctuating profits, the generation amounted almost 20 million euros. representing a margin of 2% of the working impairment of 44 millions in the period. Let me share a few thoughts on this very important level of adjustment. More than 41 million corresponds to an extraordinary value adjustment of the goodwill associated with sushi shops. Therefore, it has no impact on the group's liquidity or cash generation capacity of the group. This remaining part is associated to restaurant impairments for the number of restaurants where impairments are reversed, 41. So, guys, the news is impaired for a restaurant. Let me straight this idea. This number of quarter-restaurants impaired is less than half of the last year number, which is 89. I think this is due to the evolution of the quality of the portfolio of resources. For this reason, I consider that it is also very important to look at the results generated in our ordinary operating business, excluding the extraordinary things. This adjusted operating profit, excluding issues of impairment that you can find in the draft shows a generation of 65 million during the first half of the year, and a margin of more than 5% with an expansion of 1.1% since last year. In other words, a clear sign of the strength of our country. Moving to slide 10, you can see that Ambrose operates directly or via franchisees a port-a-pollo of 2,177 vessels. This port-a-pollo has undergone structural changes during the last years. In order to provide a better and more efficient capital allocations, which resulted in the transfer of closure of underperforming businesses. We have listed the most relevant transfer of businesses performed and their EBITDA contribution. As I explained, currently we are negotiating the transfer of an additional business unit that comprises the 123 sub-franchise EBITDA hot restaurants of the French market and the equity that we operate. In addition, you can see that the growth of the restaurant company during the previous four years. With this, Santi, you can cover the next financial targets here. Many thanks, Eduardo, and good afternoon, everyone. Always, it's my pleasure to have the opportunity to address you on our quarterly results presentation. I would like to present a few ideas before starting. the results that we present today have a different taste. On one side, as Eduardo has explained, the ordinary course of our business has been very positive despite the very challenging situation in some of our markets and some of our brands. This fact, precisely, highlights the distinctive advantage of the diversification of our business model. Second, margin expansion is still to be in flow. On this level, innumerable amounts of revenue and e-vita continue to be our dynamic. Behind this growth, there is a huge work in terms of digitalization, data analytics, marketing statistics, and so on, that allow us to be close to our customers and serve efficiently to millions of guests across 22 countries every day. The latter part, of course, is part of the deterioration of the company's history in sushi shops' goodwill. A lot of things have affected the brand of this last work. The situation in the French market that is very challenging and that we have talked on several occasions. Also, the impact of the salmon prices, the transformation of the weekly business and marketing. However, I think that it is important to stress but the value correction resistance is mainly due to a revision on the growth expected for this round, which is conditional on an improvement in profitability. But by the way, this is a very big impact, so this trend should consolidate. As we have underlined, this adjustment has no impact on liquidity or on the cash flow generation capacity of the group. Andres is a well-diversified company with many brands in many countries, and we don't see any reason for changing the full-year guidance that we share at the beginning of the year. The weakness that we are experiencing in the French or European markets has been compensated by the excellent performance in other markets. Now, let's back to the presentation. On slide 12, we have the main financial issues of the half year, which I think all of us have already covered, so let me zoom in on the figures for the quarter on slide 13. During the second quarter of the year, revenue amounted to almost $639 million. This is 5% higher than in the same period of 2023. with the same store sales level of 100 versus last year. In this regard, the most accurate information, or the middle of all, points to a level of 101. These are accurate numbers that include excellent performances in some markets as Poland and Spain, but important contractions in other relevant markets as France and Germany. it has enough talent to have to repopulate a new record in revenue generation from the growth. The ETH generated was almost 113 million euros. It is also a new record in nominal terms, with a year-on-year growth of 11%, which puts the ETH margin at a very decent of almost 18% level, which is over 1% higher than one year earlier. In terms of operating profit, EBIT, we generated 4.9 million euros due to the value correction already explained. This represents an EBIT margin of almost 1%. Finally, the capital cut at 47 million euros. which is almost 40% higher than one year ago. In this regard, let me remind you that we expect a more linear allocation during the year of investment and new restaurant openings than on previous occasions. Moving to slide 14, you can find the total sales and sales index evolution. The upward trend in terms of value generation continues with the 5% growth in nominal terms, which I referred before. Again, you need to understand that these aggregated numbers include growth in many markets, as 16% in the case of Poland, 7% in the case of Spain, that declined of 9% in the case of Germany, or 2% in the case of France. In slide 15, we have plot the quarterly EBITDA evolution. For more than 130 million euros were generated with a growth in nominal terms of 0.1%. This figure, once again, is a new record that is very important in the recovery in profitability with a margin expansion of 1% each month. In terms of operating profit, the figure decreases at almost 5 million euros. Moving to slide 16, the adjusted or reasonable printing profit hits at 46 million euros. This is 25% more than a year ago, and represents a margin of more than 70%. As we have regulated, This adjustment of the theoretical value of good value has no impact on the growth of the income cash flow generation, which, however, due to seasonal factors of the business cycle and payment terms, should increase in the coming quarter. On slide 73, I would like to point out a few things. We have a mid-increase of 80 equity restaurants during the last year. In the last 12 months, we have increased our equity portfolio in 80 restaurants. In terms of percentage, the number has been flat due to the decrease of we experience in the French market. Second, the 5% increase in revenue, which was last semester, We consider that it is a good performance, given the extremely challenging commercial conditions that we are having. And of course, this is a huge advantage that we are seeing that we are doing in most of the markets. If we move now to the slide 18, you can find your change changes in the restaurant portfolio. Just to recap, the book has a net growth of 8 restaurants within the quarter, with 22 new openings and the closure of 15 units. With this, at the end of the quarter, the company cooperated a portfolio of 2,127 restaurants. Moving on to slide 183, here we have the cash-compact evolution. The group's gross financial debt was slightly reduced to €609 million after €12 million repayment during the last quarter. The risk profile has not changed much and the leverage remains at the low end of our target, at least 2%. In terms of liquidity, we keep a cautious level of almost €137 million at the end of the quarter. This implies a decrease of €31 million during a period that is full of accelerated investments. This level of liquidity, together with additional liquidity lines and cash fatalities for more than €255 million, we consider is a prudent but efficient level according with the group's needs. In the slide 20, you can find our financial debt structure and maturity profile. Basically, no changes were received in the previous quarter. More than 90% of the carbon financial debt is long-term debt. Going into the slide 21, you can find the fixed amount of revenue and the number of restaurants that we have in each department. This department comprises businesses in 22 countries where we observe daily experience, commercial dynamics, and business experience during the presentation. In slide 22, as usual, we start with Central and Eastern Europe. And one more relevant vision from business activities that we present 58% of business revenues. Revenues generated during the quarter in Africa reached €369 million, an increase of more than 10% over the previous year. Highlight the excellent performance of the Polish market, where revenues increased by almost 16%. Moving into profitability, the ETH generated during the quarter amounted 74 million euros, representing a margin of 20% and an 8% increase year-on-year. The restaurant portfolio amounted 1,169 units, following the opening of five restaurants and the closure of one during the quarter. Community companies for the year amounted 17 and closer Let's continue now, in slide 23, with Western Europe, where what is held in the freedom amounts to 224 million euros. This is flat compared to 2023. This development hides its significant divergence in the evolution shown by different hands. While sales in Spain grew at a rate of more than 7%, Germany released a decline of 9% from France's almost 2% contraction. Nonetheless, the EBITDA in the region reached almost 37 million euros, representing a margin of more than 16% and a growth of also 16%. The restaurant Portugio closed the period with 903 units after the opening of 14 restaurants and the closure of 8. In communes at this time, cities of town were open during the first six months of the year and 14 units were closed. 8% in town. If we move now to the slides for the 24th, most of the platforms in China were closed during the quarter declined by 6% in Europe. To a total figure of 25 million euros. However, the decline in sales in the current currency bears forfeiture. The macroeconomic situation and the global downtime and contraction explain this decline in business generation. However, I would like to remark the recovery and activity of the year across. Behind this, it is the commercial management carryover, the loop of teams that is adapting well to this complicated environment. which have resulted in a significant expansion of margin and growth in each of the generations. Each of the generations was worth almost 6 million euros, representing a margin of 24% compared to less than 2.1% one year ago. Finally, the number of customers managed to close up in the region, and the end of the quarter were 56 units. following the opening of three restaurants and the closure of five. During the first half of the year, we have opened five restaurants in the region and closed seven. From Registro Barro, thank you. Thank you, Santi. And with this, we are open to any questions that you may have.

Thank you. Please press star followed by the number one if you'd like to ask a question, and enjoy your devices on mute remotely when it goes down to sleep. If you can't online, you can submit written questions in the Q&A box provided. I just forwarded it briefly.

Maybe I will take the privilege of moderator and start with some questions from my end. Thank you very much for a very detailed presentation. I wanted to ask you for more flavor on the 124 franchise. How the project actually looks like, what are you heading towards, and what is your general idea of those outfits of yours? Thank you, Lucas, for the question. We are still in discussions. with in terms of having the answer of the market to them. we consider that this should take place in the following week. We wanted to give an update of this on the market. And this is part of our strategy of allocation of resources to the most profitable investment objectives. Would there be a write-down for that in the internment? Not really. As we mentioned, we only have one equity store. So, of course, the transfer will have some impact on the financials, but nothing that is relevant or significant for the company. Just to point out, we have provided the details of what we have seen, the contribution and previous transfers of businesses, and in this case, the figures should be also similar. So, this goes with the strategy as Eduardo was pointing out, of this efficient capital allocation and the risk of underperforming business in our portfolio. Yes, of course there is still some goodwill. and is in the level of 70 meter. 70? It's 71 in fact. 71 meters. Okay. Thank you for that. So we are seeing you doing deep restructuring and Now you are speaking of as you go over business to Siam, what is the time horizon for this construction? When should your chain of restaurants be ready to go to the core and you go normally without any improvement? Is there any time horizon? Particularly for this project, it should take place in the remaining part of this year. Are there any large projects of yours to think about? No, nothing at this point. This is pretty much. If you see what we have been mentioning, it's focusing on the latitudes and the businesses that generate a higher contribution for the company and this is the aim of this project that has been carried out for several years. now that we see in different latitudes, different distances, we are there. I think that Eduardo was pointing out a very important, was providing a very important data before with the number of restaurants that have been interred during the first half year. So the total number of restaurants interred was 40 units. We have 43 units that were interment. And this is the lowest figure that we have in many, many years. And it's less than half the figure of restaurants that required a permit in previous years. So I think that despite the fact that we have this goodwill permit in the case of SushiShop, because we have reviewed this growth potential of brands on this stage, the quality of the portfolio is to produce and that the number of non-performing performance that we have is getting lower and lower okay thank you so as you are well closer and closer to end of the structuring should be no longer attached on the bottom line What was your strategy for this sale? That's an interesting point, Lucas, and we are in the evolution of the company and we have been sailing for quite several quarters now, being very focused in terms of profitability and we have been very, very vocal on this. walking towards a value without defining the growth story of the company. And we have several steps that we have taken in place in order to go to our cities. The first one, optimizing the portfolio, which we discussed now briefly in the call. Second one, stabilize the profits. There have been very challenging times in terms of consumption in terms of economy topics which unfortunately are not closed yet there are still challenges in terms of the economy that are happening around the world and europe is not different the third one is in terms of hard into recovery we are seeing that we are seeing that coming in the numbers that we have shown in the latest quarters So we are working to that and it's the path to get there. So that's where we are heading to. Do you have any milestones, any races you want to achieve to be able to get there? It's still early to talk about that, but we have been working, I would say, in order to get there. Okay, thank you. Operator, we don't want to monopolize the call entirely, so if there are any questions, please. Thank you.

We have a question from Jacob with RBR. Please go ahead. Your line is open.

Yeah, hi everyone. I hope you can hear me all right. Congrats on the figures. I have a question about SushiShop. I apologize in advance if I missed something from the call, but what is the strategy forward with SushiShop and how would you rate the chances for further goodwill impairment from the 71 million? And can you please remind me, is this the first goodwill impairment for SushiShop And obviously, I think there could be a worry that should you adjust your business plan further, where it should be further in terms of that in the next, let's say, for example, or something. So, can you just give some thought on that, please?

Perfect. Thank you, Jacob, for the question, and I'll take your comments on the results of the of the company. I think we're really happy on that, that the company is available for that. But also, as we have highlighted, we have the topic of sushi shops. I would split the answer in two parts. First one is still there are economic factors that are affecting the businesses, and there are particularly France as a country is having a challenging time. It's not alone, also Germany is having a difficult time. So that's one thing that we need to take into consideration in order to drive the premises that we have. that we have over there. So that's why part of the environment is related to an increase in the discount rate of the model that we have there. But what is important here is to pay attention to the development of the countries in which SushiShop is present. The second one, and also is related to this one, if we want to be more prudent in terms of the growth of the growth of the business. We are not, as I was mentioning before, we are not resigning to the goal, but we want to be more prudent on that because our main focus right now is profitability of that business. And we have established a task force in which, of course, all the social team is involved. but we have a direct involvement of the CEO of the company with Thomas, a direct involvement for myself, the marketing team, the operations team, development, so it's a key priority of the organization right now, the development of that market. We are working on a lot of initiatives commercial one, how to drive more traffic to the source, revenue management initiative, value delivery for the consumer, how to make the brand more relevant to the consumer. And also we have initiatives in terms of procurement in the local team, but also on the global team. A lot of efforts have been done in terms of negotiation Salmon has been a very tough time in terms of pressures of salmon, and it's a very important, it's the most important protein for us in that industry. So we are working on all the funds in order to deliver what we have in the food plan.

Okay, thank you so much. I mean, I actually know that, you know, your UBICAP margin in Western Europe in general has, as a narrow draft to Eastern Europe, so I think that's a good win, despite the bad wins you mentioned in France and Germany. Can you just clarify one thing for me? Because you mentioned, I think you mentioned, that you have communicated through the transfers, of course you have communicated in due course, but is there like a reminder market about In fact, in some organized fashion, or is it supposed to now sort of go back in history to your previous documents to find the details on how things were posted then? Or have you now reminded us exactly in some form on a slide or in the... No, thank you for the question.

So, on those previous transfers, there were no changes on the book value. And basically, what we were expecting is that they have negative competition to our market.

So, a similar story to the statistics in this case. And it's in France, right?

Yes, it is there in France. We have the MFA in the market, where what we have is 123,000. but there's only this one in computer sports. So, we are in business decisions from translating the management of the whole country to Pizza Hut Europe.

And do we... Is there any update on the strategy for the brand, for the Pizza Hut flag from Yam or from yourselves on... where this business is headed, because obviously it's been sort of an identity crisis, or maybe, I don't know, positioning crisis for many players right across the industry. So I'm just wondering, do you see any development on that side of the brand?

Yes. I would say that in the market in France and Germany, it was very in terms of delivery. It's a little bit different in the theme market in which we operate because we have more dining. And we have been working a lot in terms of the Pizza Hut brand in that segment, which we have been working and we have been developing for many, many, many, many years. So we have the segment which is very relevant to delivery. which pizza is a great category for having that. But out of the distinct pizzas that we have on flea markets, that we have restaurants, and on that, what we have done is having a better or a big offer for our consumers. So we have pizza, we have salad, we have pasta, but we have menus that complement We are having an investment a lot in terms of the applications to get in the restaurant a very nice experience. In fact, one of the projects that we are doing right now, and you have the opportunity to visit one of our restaurants in Poland. We are sending in some of our restaurants. Some robots are helping us to give the service in the restaurant. Of course, that has patients over all in terms of the patients. What they are doing is they are... With that, we send to the... to our consumers in the table and gives a very nice approach to the service in terms of radicalization. Also, we are working in terms of payment in the table or ordering from the table besides having the waiters. So, we are enhancing the experience that we have over there with very good results on the market. I think that we have lies at one point. Sometimes when we think about Europe, we think Europe as a whole. For some brands, the situation in different countries, the position, the perception of the taste on those countries is quite different. In the case of France, of course, what we are causing fear is that we are in negotiations of the transfer of the business. What we can tell right now is that there are not more transfers on the table at this stage, and that we are very happy with the position that we have in the other countries. There are a lot of initiatives that are taking place, as Eduardo has already explained.

Okay, thank you very much. Thank you. Thank you.

No, we have a situation for this specific pool of restaurants. There are 22 restaurants, Starbucks restaurants in Germany that we don't manage. So basically what we are doing is to provide some services to them. analyzing the situation where we don't have the right to grant those licenses or to rebook them, we consider the facility not to be for those restaurants as in the portfolio of properties. So what we have planned is to exclude this number of restaurants from the restaurant count. But for these services we are providing to them, we get some money and of course we will continue to do so. So part of the duty of our business and group of course is that we have different genocides and that generate credit and this is one of them thank you we have many other questions on the line so i'll try to maybe maybe one question more from from my end

Life-to-life was 2% in the first quarter, in the second quarter it was 0%. Can you tell us about the current trends over the third quarter and the current trading updates and even better with breakdowns into Western and Eastern Europe could be very helpful.

I think that one factor that is very important is the Easter week, no? So what we were expecting for this year, and this is part of what we are seeing, is that it was to be a challenging year. We were expecting to have a gradual recovery of activity according to the year's progress. This is what we are seeing. But during the first few, what we have, it was the last normal effect of the Easter. So that was the Q1 number and on the opposite, this is damaging the comparable figure on the Q2. As we have expressed in the column for allocations, we are seeing across different countries. We were expecting the different monetary policy approaches to generate different situations where they synchronize the economic cycles across the countries. This is what we are seeing, that once more, part of the business that we have is that we are present in 22 countries, putting everything aggregated and together, we are able to propose 5% growth. This is very important in our future as well, future and our neighbors. And as we were saying before, I think that our numbers are good numbers from this perspective. And of course, we have the other side of the case that we mentioned before about this issue in terms of the growth in one of our grants. But it's something that we are working on. But we know what we have to do, and we are doing it. I would also like to thank you for the questions. Traffic is very important, as you were mentioning, and this is a metric and this is a KPI that we follow very closely in all the videos, in all the formats, all the backgrounds. The traffic is really important. We want to welcome our guests. to continue visiting, to continue visiting restaurants. That's why everything is focused on the consumer. And we measure this a lot. In these times in which there are certain constraints in terms of the economy, it's one of the things that give us a very good sign of how we are performing. And up to now, given the joke of diversification that we have, we are... we are performing and we are getting the results that we are showing, but this is not over. As we were saying, there are a lot of economical challenges that we have in the future, but we are focusing on delivering very close to our consumer so that we can continue delivering positive results. Okay, Chris, come here. What? If there are no further questions, thank you very much to everybody for attending this conference call. It was great to have you here and to have the opportunity to share the response of this order of hundreds. As I was saying, traffic is very important for us. We are working towards that. I hope to see you soon in one of our restaurants to get that number. Thank you very much and have a nice weekend. Thank you.

This concludes today's call. Thank you for joining. You may now disconnect your line.