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Good afternoon everyone and thank you all for attending the AMREST full year 24 results call. My name is Brica and I will be coordinating your call today. During the presentation you can register to ask a question by pressing start followed by 1 on your telephone keypads if you have dialed in on the phone. Otherwise you can type a written question in the Q&A box provided. I will now hand over to your host Lucas Wachako from Wood and company. Please go ahead when you're ready.

Good afternoon ladies and gentlemen. My name is Łukasz Wachelko. I'm presenting Wooden Company and I have again a pleasure of moderating the call with Amres after the very strong fourth quarter 24 results. The company is being represented by CEO Mr. Louis Comas, by CFO Mr. Eduardo Samaripa and IR Strategic Planning Director Santiago Camara Aguilera. Guys, I don't want to steal too much of your time. The mic is yours.

Thank you very much, Lucas. Good afternoon, and thank you, all of you, for joining us today in this call. It's a pleasure to be with you today and to have the opportunity, together with our CFO, Eduardo Zamarripa, to present the results of the work we have done at Andres over the last 12 months, as well as to share our expectations, challenges, and opportunities that we see for 2025. Because if there is one thing we are convinced of is... is that we are laying the foundation for a great history of value generation that already this year has materialized with the first dividend payment in our history, maintaining the organic growth rate for a restaurant's portfolio and reducing the group's leverage. But let us start with the materials that we would like to share with you today. If we move to the presentation, as you know well, Ambrose is Europe's leading restaurant operator with a portfolio of almost 2,100 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 occasions of use. Nevertheless, almost half our restaurants are oriented towards the QSR segment, which shows the highest level of visibility in the face of economic cycles and a unique capacity for internalization. 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 employees, our umbrella staff. If we move to slide three, let me remark the most relevant milestones for 2024 that I would like to try to summarize in six points. First, we achieved all-time revenues record that reached almost 2.6 billion euros, with a remarkable growth of more than 5% versus 2023. We have also set a record in EBITDA generation that reached more than 430 million euros, and this is an increase of almost 14% compared to 2023. The operative profit also show a significant increase of more than 14% year-on-year, amounting 118 million euros, despite the booking of a substantial impairment back in June. As I mentioned earlier, for the first time in the group's history, we have distributed a dividend of $0.07 per share, a sign of the group's progress in the strategy of combining value generation in a growth company. In terms of new openings, during the 2024 financial year, we have opened 109 units, And we have also renovated 251 restaurants with the aim of offering the best possible experience to our customers. And finally, I would like to point out that we are continuing with the strategy of streamlining our portfolio of restaurants with a closure or transfer of non-strategic or unprofitable units. In this sense, at the end of October, we completed the transfer of the Pizza Hut business in France, which represents a reduction of 121 restaurants, of which 120 of them were sub-franchise. Moving to slide four, I would like to recapitulate on how we saw 24 just one year ago when we shared with you all our expectations for business evolution for this financial year, and finally, what the real evolution has been. We anticipated sales growth of high mid-single digits in a context of weak consumption in several of the markets where we operate. In the end, we have seen precisely that the economic growth of the countries where AMBRIS operates has shown significant divergences. In the Central and Eastern European markets, economic growth was robust, fueled by stronger consumption and increased purchasing power and lower interest rates. But in contrast, in Western Europe, growth has been much more modest, with some countries, such as Germany, facing negative growth rates or almost stagnation, as in the case of France, In this environment, Ambreth has set new historical records for revenues, $2,556 million, by increasing sales by 5.1% compared to 2023. Likewise, you can see how our focus on profitable sales has resulted in a higher than expected increase in profitability, with our EBITDA margin growing by almost 14%, while the level of investments and restaurant openings were in line with our expectations. Finally, the positive progress in cash flow and EBITDA generation has allowed us to reduce leverage while introducing a dividend payment. In summary, I believe that once again this year we humbly bring you the fulfillment of the commitment made. However, allow me to elaborate more on these ideas in the following slides. In slide five, we can see how the strong increases in revenue generation continue and how they affect the average sales per equity restaurant. In this sense, I would like to draw your attention to the yellow line from the right-hand graph, where you can see the significant increase in the portfolio of equity restaurants that Ambrest manages. I will address this issue later on, but I think that it's important to distinguish between equity, franchise, and sub-franchise restaurants. A large part of the adjustments we have made to our portfolio over recent years have been in the sub-franchise restaurant segment, where the amount of fees we collected did not cover the management costs of those businesses. However, we maintain a solid growth in the number of restaurants that we operate directly. In any case, coming back to this slide message, as we have pointed out in previous occasions, this positive evolution of sales per restaurant, in our opinion, is a good indicator of the health of our portfolio. Going into a slide C, please. A few more comments on sales and business dynamics. We have emphasized on several occasions that our commitment to technological innovation as a key factor for adapting efficiently new consumer needs and as a lever for maintaining competitiveness in a constantly changing environment. This is particularly relevant in a world dominated by omnichannel retailing where data appears everywhere. Thanks to this positioning, we have been prepared to run to price competitiveness and continue to strengthen the market position of our different brands. With regard to consumer trends, as we can see in the slide, the evolution of sales originated through digital channels continues to advance instantaneously, and during the year, they surpassed those originated through other channels. In terms of the channels used for consumption, there has been a stability in the distribution of consumption preferences over the last few quarters. In this sense, dine-in is the preferred option and accounts for practically half of the group sales. With respect to the delivery channel, it accounted for 18% of the sales generated during 2024, and practically it was the same proportion as in 22 and 23. If we move to slide seven, please. As I mentioned, we have generated an EBITDA of more than €430 million. Setting also a record in this regard, I'm posting a growth of almost 14% versus a year ago. This result implies that the EBITDA margin rose 1.2 percentage points to almost 17%. Expansion of margins results from the work carried out by optimizing processes, adopting technology-driven efficiencies, and also rethinking work and training models. Each of these efforts significantly impacts margins and enhances the customer experience. Nonetheless, for me, these figures represent a historical record that corroborates the results of the strategic approach that we have adopted of positioning towards sustainable and profitable growth. Moving to slide eight, please. Here, we bring the operating profit that reached 118 million euros after increasing by more than 14%. This represents an EBIT margin of 4.6%. This progress has been achieved despite having booked value corrections of 52 million euros during the year. Out of these 52, 41 million corresponded to the value correction on the goodwill associated with Sushi Shop, which was recorded at the end of the first half of the year. With this, the value of the goodwill of this investment stands at 70 million euros at the end of the year. And it has not been necessary to make any further corrections during the second semester as the profitability target set for the group have been met. In this regard, we also thought that it would be useful to show you the operating profit, excluding the impairment booked on SushiShop, to show the evolution of the EBIT coming purely from the evolution of operations. In this sense, the year-on-year increase reaches 20% and the margin sits above 6%. We go now to slide nine, please. Here we can see the bridge on how it has evolved the number of restaurants in our portfolio during the year. In 2024, the 121 Pizza Hut restaurants that Ambrose managed in France were transferred, 120 of them under a sub-franchise model. However, Ambrose has continued to focus on organic growth with the opening of 109 units, which together with the closure of 52 has led to the end of the 2024 financial year with a portfolio of 2,099 restaurants. In the slide 10, we would like to provide you with more insights of the latest strategic portfolio adjustments that we have performed during the latest quarters and their financial impact. Redefining the perimeter and portfolio of managed restaurants with a closure on our sale or non-strategic businesses has been a key pillar of value generation for the company. I can imagine that many of you are wondering if we are considering transferring or disposing of any other business units. To address this, I can say that we evaluate each business unit based on its strategic fit and long-term value generation potential. Therefore, we should view both the exit and entry of new businesses as an integral part to the efficiency allocation of our capital. And with this, Let me share with you how we do see 2025. If we move to slide 11, please. I will convey this perspective using some of our most relevant management KPIs to illustrate our expectation. First, we expect a mid-single-digit growth in terms of sales based on the assumption of a still challenging economic and political environment ahead for many European countries. In terms of profitability, we expect an EBITDA margin similar to this year level. Efficiency in gains and revenue management should offset cost of sales and cost of labor pressures across different geographies. Our level of investment and new store opening should also be similar to this year figures, and this corroborates our commitment to expanding AMBRIS footprint combined with an efficient usage of the resources that we are generating. And finally, we aim to maintain Leverage at the lower end of our management targets that I remind you that has been set between two and two and a half times, net financial debt versus EBITDA, which the group's management believe to be a prudent level to be able to face new investments, focus on accelerating growth, both organic and non-organic. And thank you very much. And with this, Eduardo, I will appreciate if you can help us to cover the main financial highlights, please.

Thank you, Luis, for sharing your insights with us. Good afternoon, everyone. It is always my pleasure to present to you the financial results achieved by AMBRE's team during 2024. Firstly, let me remark that AMBRE's commercial dynamics continue to show a good progress in both quality and quantity perspectives across most of our markets. This improvement is leading to higher operating profitability. to a better financial risk profile and in value generation for our shareholders that this year, for the first time, has resulted in a dividend pay. Risk has already covered the main highlights of our full-year figures, so I will skip slide 13 and move directly to slide 14 to discuss the main financial highlights for the fourth quarter. During the fourth quarter, revenues stood at 665 million euros, an increase of 5.8% compared to the same period of 2023. This sales figure also marks a quarterly record for AMREST and shows an acceleration in the pace of growth compared to previous quarters, driven by a significant increase of almost 5% in the number of transactions and same-store sales index in almost 101. As usual, we bring you also our latest trading figures that point to a gaining momentum with same-store sales reading of 101.6. In terms of profitability, De Vita reached 111 million euros after increasing by 15.5% compared to the same period of 2023. And finally, the capex on the quarter reached 73 million euros. If we move to slide 15, please, here you can find quarterly sales and some store index evolution. Let me share a few thoughts on the commercial dynamics. Although price increases have moderated markedly, They continue to put pressure on consumer budgets, leading them to be cautious with a discretionary spending decision. This context has led to consumers being much more sensitive to the perception of the price and value, and has also resulted in a highly competitive environment in most of the regions. Despite this, Ambrest is adapting well to this environment and the positive commercial momentum continues with a good performance in all our CE markets in addition to Spain and Western Europe. In slide 16, you can find our quarterly EBITDA evolution. As I stated before, the EBITDA reached 111 million euros after increasing by almost 16%. which represents an expansion of 1.4 percentage points in terms of EBITDA margin, which stood at 16.7%. In this regard, it's important to emphasize the important progress made in the EBITDA generated in Western Europe markets. Now, moving to slide 17, please, we can see the operating profit evolution That stood at 34 million euros, which represents a margin of 5.2%. As before, we thought it would be useful to show you the evolution of the operating profit, excluding the effect of the value adjustments that we booked for the goodwill of SushiShop. However, as we can see in the graph on the right, this does not affect the operating profits, which recorded in the fourth quarter. If we go now to slide 18, well, in this slide, you can find a lot of information, but let me focus on some key figures. The first point that I would like to remark is the profit generated by the group. The net profit for full year reached 13.5 million euros compared to almost 51 million generated in 2023. Despite improving operating results, the fall in net income was due to four main factors. First, the booking of hiring permits in the woodwork associated with sushi shop. Second, the case of discontinued operations in 2023. Third, the increase in the financial cost due to higher interest rates. And fourth, the higher effective tax rate. During the fourth quarter, the profits for the period amounted 10.5 million euros compared to the losses recorded in the same period of 2023. The second point that I would like to raise in the operative cash flow generation that reached 408 million euros. This is an increase of 13 million versus last year. In this regard, in slide 19, you can find the organic changes in the restaurant portfolio. Following the seasonality shown in the previous years, we accelerated the number of openings during the fourth quarter with 47 new units, bringing the total number of openings for the year to 109. On the other hand, the portfolio optimization led us to close 12 restaurants in the quarter, with a total of 52 during the whole year, of which 37 of them were equity stores, and the rest, 15, were mainly stored from soft purchases. In other words, the impact in terms of revenue generation for these stores is very small. On slide 20, you can find the cash and debt evolution. The group's net financial debt amounted to 468 million euros at year end, but what is more important the group's leverage continues to decrease to 1.82 times compared to 1.84 times at the end of 2023. This level is at the lower end of our internal target. On the other hand, the group's liquidity was 153 million euros at the end of the year. The group considers that this amount of liquidity, together with additional liquidity lines, and credit facilities of more than 200 million euros constitutes an efficient level in accordance to our needs. In the slide 21, you can find the terms of the financial debt structure and maturity profile. Only to highlight that 94% of our debt is long-term. Therefore, we only have to attend to maturities for 6% of our debt during the current year. Next, we will focus on the results by different segments. In slide 22, you can find the breakdown of revenue, EBITDA, and the number of restaurants we have added in each segment. Segments comprising business in 22 countries and in which we have observed significant divergences in the commercial dynamics and results of the three geographical areas that we use to analytically group of business. As usual, let's start with CEE, our most relevant region in terms of business generation. In slide 23, we provide the main metrics, and you can find its evolution in slide 24. So let's go to that slide, please. In 2024, annual sales in this segment amounted to 1.4 billion euros, representing 58 of the group sales and a year-on-year growth of 10.6%. The EBITDA generated reached 305 million. This is 38 million more than in 2023, representing an EBITDA margin of 20.6%. These figures represent a new record in sales in EBITDA in nominal terms. The good evolution registered in Poland, the group's main market, has been remarkable, where sales grew by more than 15% and EBITDA by 25.5%. In the fourth quarter, revenues amounted to 390 million euros, almost 12% higher than the same quarter of 2023. EBITDA was 78 million euros, representing an EBITDA margin of more than 20%. The restaurant portfolio reached 1,228 units after increasing by 51 restaurants, with the opening of 65 new restaurants and the closure of 14 during the year. In slide 25, we have the main metrics in breakdown for Western Europe. And in slide 26, the evolution of the metrics. If we go to slide 26, please, revenues in this segment amounted to almost $900 million for full year 2024. This implies a small drop of 0.5%. However, the EBITDA generated amounted $135.4 million after increasing by almost 14%. That represents an EBITDA margin expansion of 1.9 percentage points that stands at 15.1%. During the whole year, there were significant performance differences among countries. While annual sales in Spain, Amherst, second biggest market, grew by almost 8%, sales here in Germany and France decreased by more than 5% on both cases. The positive generation of EBITDA in the French market is remarkable, with an EBITDA margin of more than 8% after increasing by 4.5 percentage points, corroborating the success of value strategies implemented in the market. Four-quarter sales stood at 231 million euros. This is a decrease of 1.6% with respect to the same period of 2023. Evita reached 37.8 million after increasing almost 30%. This is an Evita margin of 16.4%, 3.9 percentage points higher than the previous year. The total number of restaurants in the region stood at 784 units. From an organic perspective, there were 36 new units openings and 29 closures, in addition to the transfer of the 121 pizza hot restaurants in France, of which 120 were soup franchises. And finally, in slide 27 and 28, we have the main metrics in our business on China. If we go to slide 28, please, revenues generated during the year stood at 92.4 million. This is 7.6% lower than in 2023. The depreciation of the yuan against the euro impacted this performance. In local currency, annual sales decreased by 6%. On the other hand, the EBITDA generated 18.7 million, represents a margin of 20.2%, almost repeating the level of 2023. Focus on the fourth quarter. Sales reached 23.3 million, showing a modest but progressing growth of 3% compared to the same period of 2023. The EBITDA amounted to 4.2 million with a margin expansion of 1.4 percentage points that stands at 17.9%. Ambrose closed 2024 with 87 restaurants in the region after opening of eight new units and a closure of nine. That is all for my side at this moment. Back to you, Luis.

Many thanks, Eduardo. Thank you very much. I think that with this, we are open to any questions that you may have. Thank you.

Thank you. We will now begin the question and answer session. If you would like to ask a question, you can do so by pressing star followed by one on your telephone keypad. Otherwise, you can type a written question in the Q&A box provided today online. And as a reminder, that is star followed by one. Otherwise, you can type your questions in the Q&A box provided. We will pause here briefly whilst questions are registered.

Maybe in the meantime, waiting for the questions to be registered, I will take the privilege of moderator and start with questions from my list. First of all, you've paid out first ever dividend. Can you share with us any ideas for the dividend policy going forward?

Thank you, Lucas, for the question. Yes, as you said, this is an important milestone for AMRIS as it's the first dividend that we pay. Luis was mentioning during his section, and we saw in the highlights the goals that we have for the year. We achieved better results than the ones that we share with the market. So that's why the board of directors took the decision to pay a dividend for first time in 2024. Going forward, the idea is is that, as we shared the guidance today, the Board will analyze how the results are going and make the proper decision at the proper time regarding dividends.

Okay, thank you.

And another one from my end. You have done a lot of adjustments of portfolio in the last couple of quarters, but the numbers of closures were easing towards the end of 2024. What kind of numbers should we expect going forward? How many restaurants are still under question marks from your perspective? Can you share these numbers with us?

Look, the number here is a dynamic figure. There is not a fixed amount. As you can imagine, with some markets that the performance is still a little bit unstable, it's hard to define a single number. However, this is a year-on-year exercise that we conduct. Obviously, portfolio units, country by country, happens. And most of the cases, in some cases, are due to financial reasons. In some cases, by force majeure, where we have no options. But generally speaking, as a group thing, we attack all the closures planned individually by region, by brand, by even cities, so it's not a matter of a strategic approach. We aim to decrease them to reduce the losses that these stores may be generating and cut down the targets on the losses that they represent. So it's mostly a case-by-case, quarter-by-quarter revision, not a full plan that I can share.

Okay, thank you.

Operator, are there any questions from the room? We have some text questions. Sorry.

We have received some questions from . He's asking about the reasons of the strong improvement that we have, especially in Western Europe. So I think that here what is important to see is that most of the markets are showing progress. If you see the situation in Western Europe and the total EBITDA that we have generated, we are coming back to the 35 million euro level per quarter. That is a similar figure to previous quarter. And this progress has been really coming from other countries. to have a little bit coming from Germany, from France. Spain has been progressing with another million, and the rest of the countries where we operate are also contributing to this. So all the countries have really come in and contributed to this margin expansion. We have also questions with respect on how Amherst plans to keep the EBITDA margin similar to the levels that we have in 2025 in light of the further increases that we have in the food cost and also in the minimum wages across several countries, especially in CE.

Margins management is part of the Amherst profitability strategy, and we are planning to keep them through efficiencies. Mostly, what we are talking here is As you may remember from previous calls, we have been investing in digitalization quite a lot that help us to increase our ticket average and therefore to minimize the wages or cost of sales increases through a better ticket average income. The organization is also facing internally adjustments, the way we operate that has been happening for the last two or three years, but we are implementing better tools on scheduling, ordering, forecasting, sales projections, and those are turning to be a much more efficient platform for the management of our own resources. This is translated into better margins at the very end. Also, more and more effective value campaigns on the marketing side is also helping us to drive extra traffic that we are now facing in some of those territories. So as a continuous management policy, I think the efficiency organization and the efficiency of the operation are the two key aspects of how we are increasing our margin efficiency.

Thank you very much, Luis. So, we have some questions as well. I think that this is addressed also to you. The question is, do you see any changes in a Starbucks strategy operational improvements after the change of the CEO?

Yeah, that's a great question. That's been asked for many people, and I'm happy to say that I know firsthand the strategy that Brian Nichols is addressing for the Starbucks world. As you may see, the Starbucks game-change plan is mostly focused on the U.S. market. This is where their hospitality increase and the improvement on the speed of service and reduction of products, all these actions that have been shared with the market are mostly addressed. However, international markets are also receiving some of those potential improvements. We may say that the way Starbucks is operating international markets, they first quite a lot to what they are facing in the US. In our case, we have been in the higher level of standards and hospitality level. So we are adopting some of those measures where it makes some sense. Name it in some places we also considering menu rationalization, We are improving our hospitality steps so there are more comfort. The third place is more live than ever. And so this is it, but not as much as you can read for the news what is going on in the States. This is the basic difference from here.

Thank you, Luis. Matias Siler from Buriens is also asking, can you comment on existing future expected competition from Popeyes in CEA? and beyond KFC unique chicken position coming under threat?

Well, Popeyes is another competitor on the landscape of the chicken world. It's not only Popeyes, there are some other brands coming to Europe, but definitely Popeyes is starting heavily their development both in Western Europe and some places in Central Europe. The good thing about having more competitors on the chicken territory is that people have more options to compare and delight the KFC products. That's where we are becoming stronger and stronger. And our like-for-like growth in Central Europe, especially in Spain, is growing this way. It's showing a proven result versus competition. Despite the number of stores being opened by competitors, we kept growing and we kept increasing our like-for-like sales. So I think this is good signs. We are strong. We have a very strong mature customer base, loyal customers, and also new customers are attracted by us. And KFC is not a standstill. KFC is still developing different categories of products, different categories of services, and different models of the store layouts. So this is even a further impulse for the brand to become more effective, more energetic, and attack different segments that were not touched before. So happy to have people in the room, but we are still standing above all of them.

Matias is also asking about the fact that the rations sections potentially could be removed. if Andres is considering buyback options of the former Racion franchise.

So we don't use to share opinions on hypothetical scenarios. We are mostly addressing them case by case. Whenever a new situation happens, we will consider how to address those things. At the moment, no.

And also the business was sold, as you know, and there is no option that we could exercise in order to do that. It was a definite exit for the Russian market.

Absolutely. Many thanks.

I don't think that we have any more writing questions. I don't know if anyone else may have a question to ask.

Maybe one question from my end. You said that year to date your likes for likes have improved from 0.8% in the fourth quarter to 1.6% for the last couple of weeks. Can you share the breakdown? Was it more on the Western Europe or Central Europe or was it a broad move all the markets together?

Well, I can say that Central Europe and Western Europe did perform very well, had a strong behavior and kept the good path. No matter what, we all know that some territories, specifically France and Germany, economies are on their target. They are under recessions, and therefore consumer confidence and consumer retailing climate is cooling down, still behaving as they did in the last part of the year. So probably those are the two lagging markets, but the rest is still growing in the right direction.

Okay, thank you very much. Thank you.

Thank you. Just as a quick reminder, it's star one to register for a question. Otherwise, you can type your questions in the Q&A box provided. We currently have no questions registered, so I would like to hand it back to Lucas for some closing comments.

Well, if there are no further questions, thank you very much.

Thank you very much for joining the call. It's really a pleasure to have you here. Present good results. We are happy for what was achieved in this year. And we look forward for the challenges in 2025. And as always, we expect you to see in our restaurants to have the pleasure to serve you. Thank you very much.

Thank you, Eduardo. I'm joining your words. We delivered what we promised. That was a good thing. And we are also looking forward to keep improving our key targets. Definitely for us, this trend shows that the model is robust. We keep growing and growing our margin production. We keep growing and growing our cash flow generation. And with a better and more improved efficiencies on our CapEx line, we will be aiming even to consider fewer options in the future. This is just a start and the beginning of a very, very profitable growth in a sustainable way moving forward. So thank you, Eduardo. Thank you, all of you, for attending this call. It was a pleasure to share with you all 2024 year results.

Thank you very much.

Thank you for all attending today's call with AMRAS. I can confirm that does conclude today's call. Please enjoy the rest of your day.

You may now disconnect. And thank you again for your participation.