AmRest Holdings SE

Hello and welcome to the AMREST Q3 2024 results conference call. My name is Harry and I'll be your operator today. All lines are currently in listen-only mode and there'll be an opportunity for Q&A after management's prepared remarks. If you would like to enter the queue for questions, please dial star followed by one on your telephone keypad. If you are streaming the call online, you may submit written questions using the Q&A button found on your screen. I would now like to hand the conference over to Jarek Tomczynski with Wood and Company. Thank you. Please proceed.

Hello, everyone. On behalf of AMRES, we would like to welcome you to the conference call with the management to present and discuss the results of the third quarter. The company will be represented by Eduardo Zamarripa, the chief financial officer, and Santiago Camarero Aguilera, IR and strategic planning director. Let me please hand over to the management.

Good morning and thank you for joining us today in this third quarter 2024 AMBRIS results presentation. It is always my pleasure to share with you an update on AMBRIS results and situation at the end of the quarter. So let's start with today's presentations. If we go to slide two, please. As we usually do, let me remind that AMBRIS is Europe 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 franchisee and proprietary brands that cover a wide range of consumption locations. As a result, more than 30 million customers visit our restaurants every month, where they find a distinctive service provided by over 44,000 passionate Ambrestees. Let me also point out that from October 31st, this map has suffered a relevant change, as Ambreste and Pizza Hut Europe Limited have agreed the early termination of the master franchise agreement for France. Therefore, starting from November 1st, Ambreste does not operate any Pizza Hut restaurant in the French market anymore. Ambrest was managing 120 sub-franchises Pizza Hut restaurants and won equity at the end of the quarter. If we move now to slide three, we can see that Ambrest sales during the third quarter of 2024 reached almost 660 million euros. 4.2% higher than those achieved during 2023. This revenue figure, which represents another all-time high for ACQUADR, supports the group's growth strategy and is particularly relevant in a context where several countries are experiencing an important moderation in household consumption. In terms of profitability, The EBITDA generated during the third quarter of the year amounted more than 125 million euros, representing a margin of 19% and an increase of 13% compared to the same period of 2023. In terms of operative profit, the generation reached at 60 million euros. This is 14% higher than a year ago. This profitability increase has been translated into a higher cash flow generation that resulted into cash accumulation and a further deleverage of the group. At the end of the third quarter, the leverage ratio stood at 1.8 times. This is at the low end of of the target range that we have shared on several locations with all of you. Finally, during this period, we opened 21 new restaurants. Now moving to slide four, let's review the commercial position of our brands where the common theme is the clear focus on value across geographies. Let me start with the quick service and coffee brands in this slide four. In KFC, we have continued with our aim of delighting our customers, offering them totally new products. In these occasions, from California-inspired flavors through refreshing bubble tea drinks. In addition, a promotional mega box where a set of five items is offered for 20 Polish Slotties has been an important push to our restaurant sales. Similar offers have been launched in other markets. For Burger King, the new mobile app is getting enhanced with additional solutions and an increased number of users. At the same time, the marketing focus has been on value and premium offers with King deals. In Starbucks, our focus is on coffee expertise, especially in iced coffee. Global trends, but especially Generation Z consumers, consider well-being a top priority, thus preferring lighter, low-calorie beverages. In this regard, iced coffee is offering a balance of taste and indulgence. Now moving to the fast, casual, and dining brands in slide 5, please. At Pizza Hut, we relaunched the takeaway channel in CE markets under the Take It Easy umbrella. based on three main pillars, easy online and offline experience, easy for your pocket, and new communications with the main message, every day, easy, take away. At Blue Floor, we are increasing the occasion of use of our restaurants with our freshly launched new brunch menu, featuring a delightful fusion of flavors that will surely set the tone for a delightful day ahead. At Lata Glatela, we are modernizing the brand with the active participation of customers and employees. This participation has been decisive in building the chain's new identity. The project is culminating with an unveiling of the first refurbished restaurant with a new image in the Madrid area. Finally, at Sushi Shop, we just launched a new website and app e-commerce delivery and click and collect with a new and enhanced user experience and interaction features. So far, we have seen an increase in conversion rates and higher average guest checks from all channels. This enhanced system ability and the new features will deliver new and fresh products from sushi shops to current and potential customers. If now we move to slide six, please. As I mentioned, AMBRIS generated revenues of almost €660 million during the quarter, with a growth of over 4% compared to the same period in 2023. This revenue figure, which represents another all-time high, supports the growth strategy, and is particularly relevant in a context where several countries are experiencing an important moderation in household consumption. As on previous occasions, on the right-hand chart, you have the evolution of the 12-month trailing average revenue per store that continues with steady growth for the last three years, providing a good indication of both the health of our business and the level of utilization of economies of scale through sales leverage. Moving to slide three, we can see the evolution of consumption patterns. The trend of moderation in the growth of delivery sales continued, which now accounts for 17% of the group total sales. On the other hand, dining sales continue to show the highest levels of activity and now account for 47% of the total sales. This is highest percentage recorded since COVID period. In addition, the digital innovation continues to be at the center of our priorities. The result is that more than half of our sales are placed through the digital channels. Digital menu boards, kiosks, enhancement of mobile applications that now join by friendly robots in some of our Pizza Hut restaurants that serve and help to tidy up tables in our restaurants. Now moving to slide eight. The number of restaurants managed by AMRIS reached 2,185 units at the end of the third quarter, after the opening of 21 new restaurants and the closing of 13. As I mentioned before, we have been working on further portfolio adjustment in France. As a result, we have agreed an early termination of the master franchisee agreement for Pizza Hut France. Therefore, starting on November 1st, Ambrose does not operate any Pizza Hut restaurant in the French market anymore. Just to remind you that Ambrose was managing 120 sub-franchises restaurants and one equity restaurant at the end of September for Pizza Hut France. The EBITDA accumulated for this business during the first three quarters of the year was almost 2 million euros negative on pre-IFRS basis. We have also shared with you the figures of the latest portfolio adjustments executed, both in terms of restaurant count and the VITA contribution. If we go to slide 9, the VITA generated during the third quarter of the year amounted more than 125 million euros. This is an increase of 13% compared to the same period in 2023 and represents a margin of 19% that expanded by 1.5 percentage points. The EBITDA shift includes refunds collected during the month of August in the amount of almost 9 million euros. In terms of operating profit, EBIT, the generation reached more than 60 million euros. This represents an increase of 14% and a margin of 9.1%, 0.7 percentage points higher than in 2023. For another quarter, the main factors behind these margin expansions are lower cost pressures and the positive effect of generated by the increase in average sales per restaurants as the continuous progress in efficiency. With this, Santi, if you can cover the main financial highlights, please.