Good morning, everyone. Thank you for joining our third quarter 2021 earnings webcast. With us today are Marcelo Rabach, our Chief Executive Officer; Luis Raganato, our Chief Operating Officer; and Mariano Tannenbaum, our Chief Financial Officer. Today's webcast, which is being recorded, will consist of prepared remarks from our leadership team, which will be accompanied by a slide presentation, also available in the Investors section of our website, www.arcosdorados.com/ir. As a reminder, to better view the presentation on the webcast platform, we suggest you scroll over the upper left-hand side of the screen and click on the arrows to maximize the slides. After our speakers conclude their opening remarks, we will answer your questions, which you can submit using the chat function on the left-hand side of the screen. You will need to minimize the slides to access the chat function. Before turning the call over to Marcelo, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. In addition to reporting financial results in accordance with Generally Accepted Accounting Principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial results as compared with GAAP results, which can be found in the press release and unaudited financial statements filed today with the SEC on Form 6-K. Our discussion today excludes the results of the Venezuelan operation, both at the consolidated level as well as for the Caribbean division due to the country's ongoing macroeconomic volatility. For your reference, we include a full income statement, excluding Venezuela, with our earnings release. As part of today's presentation, Marcelo, Luis and Mariano will take you through the main highlights of our consolidated and divisional results as well as our investments in capital structure for the third quarter of 2021. They will also update you on the achievements and recent commitments we've made related to our recipe for the future of the ESG platform. Marcelo, over to you.

Thank you, Dan, and thanks to all of you for joining us on today's webcast. The results we are reporting today are among the best ever for the third quarter and demonstrate what is possible with the full revival of . We are very pleased with the trends in the business and believe we are the best positioned restaurant company to capture the opportunity ahead of us, no matter what short-term challenges we may face in the region. But before we get into the specifics of the quarter's results, I want to talk to you about the structural competitive appendages that are now bearing fruit. This starts with the McDonald's brand. Thanks to our long-term strategic approach, brand metrics across Latin America and the Caribbean indicate we are the region's favorite restaurant. We have worked hard to revive and reposition the brand, implementing a variety of strategies to establish this important competitive pillar. One of the most important is the operational excellence that makes Arcos Dorados the strongest restaurant operator in the region. Quality, service and cleanliness are the mantra of our restaurant teams and indeed the entire organization. This was put to the test in March of last year. And our teams stepped up to the challenge. We quickly developed and deployed the Dorados or safe hygiene and food safety protocols to all restaurants, reinforcing our industry benchmark procedures and strengthening trust with our people and guests. We also reinforced the loyalty that our teams already felt to the company by doing everything we could to protect them and their families throughout the period. ESG is part of the DNA of our coveralls, which is why we booked ahead with the recipe for the future ESG platform, continuing to establish a mid tangible commitments to benefit the planet, our…

Thanks Marcelo. All divisions generated positive two-year comparable sales growth in the third quarter and the three exceeded the blended inflation for the period. This is a testament to the structural competitive advantages that Marcelo just described. We surpassed three pending sales in local currency by liberating the flexibility of the restaurant portfolio to offset the temporary decline in mall stores and the on-premise sales channels. Importantly, we delivered another quarter of increased market share across all divisions building on the gains from 2020. Brazil's two year comparable sales growth turned positive at the end of the quarter, growing mid-single digits in September. Digital sales channels of delivery, mobile app and self-ordering kiosks are very strong in Brazil where they generated 45% of system-wide sales. On premise channels are recovering gradually as mobility improves in the country, leading both mall-based locations and restaurant from counters to see improved traffic. In fact, October two-year comparable sales growth was already very close to double digits in Brazil, marketing activities in Brazil included a new line of chicken sandwiches, take home bottles of the popular tasty sauce, getting imitation of all artificial colors and flavors from the kids' menu and the first ever a 100% plastic free happy meal toy collection as has been the case in each of the last five quarters. No that delivered a sequential improvement in top line growth. Total revenue in us daughters grew by 3.7% versus the third quarter of 2019 backed by the 5.1% growth in comparable sales on a two-year basis. And it relatively stable currency environment. Mexico is the main story here benefiting from the strength of the brand and the restaurant portfolio and the receiving consumption environment find among Costa Rica are also returning to normal after experiencing a more prolonged period of…

Thanks Luis. We are very pleased with adjusted with that generation. In the third quarter, this result was underscored by improved profitability with all divisions generating restaurant level, with the margins equal to or higher than the pre pandemic period. Although we thought we would have a better second semester, these recovery in profitability came sooner and stronger than we expected. Three commissions generated higher adjusted EBITDA results in US dollars compared with the third quarter of 2019 boosted by the fact that almost 40% of the quarter's EBITDA came from markets that operate in hard or more stable currencies. Keep in mind that in addition to Argentina's relatively small contribution to consolidated EBITDA, having our corporate back-office based in provides a natural hedge against currency risk. In other words, when the Argentina based, so is devalued corporate expenses declined more or less in line with the declining Argentina's EBITDA in us dollars. Once again, both for the paper costs and payroll expenses were lower as a percentage of revenue versus two years ago for paper improved by 30 basis points versus the prior year and was 50 basis points better versus the third quarter of 2019. Payroll expenses were also lower versus the third quarter of 2019, improving by 180 basis points as a percentage of revenue, partly due to the higher contribution from the more efficient of premise sales segments. This margin improvement more than offset the margin impact of higher aggregator payments as associated with the growth in delivery sales. Brazil's adjusted EBITDA margin reached 19% in the second quarter or 16.6% excluding the tax credit, which matched its third quarter 2019 margin. The paper costs remain in line with 2020 levels despite commodity price and the input cost increases. NOLAD's EBITDA margin improved by 50 basis…

Thanks Mariano. As I mentioned, barrier, ESC is part of DNA. The recipe for the future ESG platform focuses on the area. So youth opportunity, packaging and recycling, sustainable sourcing, climate change, commitment to families and diversity and inclusion starting with youth opportunity. On our last call, we announced a new program offered through our, our wean hamburger university that may free online certificate courses available to all young people in Latin America and the Caribbean. These introductory level courses cover five areas of instruction designed to help young people enter the workforce and build successful careers. We are very pleased to report that more than 20,000 young people enrolled in the courses in the last three months, we also launched a very interesting pilot program in Colombia, within the packaging and recycling pillar of our ESG platform. We have partnered with Amazon echo and NGO dedicated to promote the recycling and the guns, and we die our exclusive delivery aggregator in Columbia. The program provides customers with a kit to call it, and we don't recycle the waste from their delivery orders by returning it to ICL drivers, supporting a more tubular economy, you know, Dina, we took another step to support our climate change commitments by signing an agreement with Pumbaa and up here to start using sustainable energy sources, to power our restaurants in the country, within commitment to families together with McDonald's last month, we announced that happy meal toys will be made from 100% sustainable materials by 2025. As you heard today from Lewis, we introduced the first 100% sustainable toy collection this year, working toward the 20 twenty-five commitment. Finally in Brazil, we were ranked in the top 10 among the country's largest companies by great place to work. We are the only restaurant…

Our first question comes from Marcella Rekia of Credit Suisse, who says, thanks and congrats on the results and asks that with our net debt to EBITDA ratio already below the targeted 2.5 times, what can we expect in terms of expansion plans for 2022? I think that's over for you, Marcelo.

Yeah. Thank you. Good morning, everyone. And especially Marcella, thank you for the question. Yeah. As you mentioned, we are already within our conference range in terms of be ratio, which is two to 2.5 times in the low end or that ratio you and the excellent results we have during the year as you know, under the MFA every three years, we are going to in a restaurant opening plan and a reinvestment plan with McDonald's, particularly for 2020 and 2020, the one we suspended the three year agreement mechanism, you would do the uncertainty, the region related with the important impact of the COVID issue. So today we feel comfortable enough and we, the trends of the business and the visibility we have of the markets where we operate in order to resume the three-year planning in this case, the cycle will be for 20, 22 and 2024. And we are in the final stages of the discussions of the process with Matana sun. I think that we are going to have a very strong plan for this three year cycle. We expect to announce the new plan early next year, as we always did in the past. And the idea this time is to do that during our investor updates, but hopefully we will have we will have in-person in Brazil during the first couple of months of 2022. What I can tell you is that what we are seeing is that we will be able to accelerate both openings and reinvestments on the deployment of your DF restaurants given the fact that we are seeing a high potential for both investments, if you recall our pre-pandemic plan for the period of 2020 to 2022 included something around the one candidate restaurant openings per year it's important…

Great, thanks Marcello. The next question comes from my Matthias of Black Brick Investment. He says that as our balance sheet and cash flow continues to improve where we and the board considered buying back shares. If the price doesn't reflect the value of Arcos and does management or the board regularly compare the IRR of buying back shares versus opening new restaurants, I think we'll turn it over to you Mariano.

Thank you. Dan and thank you Matthias for the question and hi to everybody. We continuously evaluate the rate of returns to make our capital allocation decisions and as you know, but he has seen in recent years, we have implemented abide by shares program and for going forward and looking forward, we will continue to do exactly the same. We will continue to evaluate all different options that we have available, including of course, restaurant openings, weatherization of existing stores, digital investments, and folding investments. We have been doing so far on top of other alternatives, like buying back shares. And we will define that of course looking at best rate of returns of each of them.

Great. Thanks Mariano. The next question comes from from Morgan. He asks if coupons or discounts are included in the mobile app sales or is it only the takeaway functionality in other words, mobile order and pay in Brazil? I think that's for you Luis.

Yeah. All right. Thank you for the question. The answer is yes. The digital offers are included in the mobile app sales and wider concept would be that everything is continuing to digital sales. This is mop digital offers that he really through POS own delivery and serve order and kiosks. And one thing that I wanted to highlight is that easy to offer are very important for us. We deliver them by segmenting our customer base and personalization,

And just a quick heads up. I think the operator may have heard that as well. We had some background noise if you guys could clean that up, that'd be great. Thank you. The next question is from Jaguar of Goldman Sachs. He says, hi, Marcello, Dan and team. Good morning, everyone. Congrats on the results. And thanks for taking our questions. Gross margin has positively contributed to overall profitability printing higher than 2019, despite the persistently high cost inflation, given the macro backdrop in the region, shouldn't get improved anytime soon. How are you framing that equation between growth has through mix and profitability going forward and on a relative basis? What are the markets in which you believe pricing and profitability could be more challenging over the next 12 months? That's the first part of Charlotte's question. And then I guess we'll start with Marianna and then we'll take the second part.

Perfect. Thank you. You have a four for the question. And in fact, all of the work that we did during the pandemic with, with cost management initiatives are paying off during this full recovery phase. A sales are returning to pre pandemic levels and we are gaining market share. So we think that the best way to contribute to our, to our margins is by increasing sales and by increasing traffic, having more customers visiting our stores. And from there, we have built in all the costs management reductions initiatives that are showing in this third quarter, and we are doing everything possible to maintain and to have all these profitability gains going forward. What I, can tell you is I said, I already mentioned a bit about this state's recovery, and this is what is allowing us to leverage on all our costs lines, all segments from the service centers drive from delivery are showing very good results. And from there is that where we are building up, for example, in the paper, in the gross margin, which as you know, is the most important cost line in our P&L the food and paper costs, and we are effectively improving our gross margin, despite the food cost pressures that we are facing in many of our markets by managing pricing, through revenue management dynamic pricing, and as well by working on the product mix with segmentation, with all the effort we are doing in digital, in the, in the digital, in here area where we are investing. And we are doing a lot of things like with the district lab. And I'll just mark marketing segmentation, which are giving us the results that we are, we are we are seeing in our unit. And on top of that, of course, all the cost negotiations with our main suppliers that we can do given our size and the long-term relationship that we have with, with our main suppliers. So I think that what you are asking about that mix between focusing on, on, on growth market share safe. I think we are doing a bit of all of them. We are improving sales, we are improving traffic. We are working our costs. We are working on the product mix we are working on dynamic pricing. And all of them are the ones that are showing in our final results for the quarter. And maybe we can go to the second part.

Great, thanks. Mariana was the second part of question, relates to market share and he asked, is it also, is it possible to share more details around market share evolution specifically in result? So turn it over to you with and LTL.

Thank you for that question. In Brazil, according to crest, I remind, use a syndicated customer study that is conducted by the research agency, the NP group, and it's used in major patent police around the world. According to them, the QSR segment grew about 1.5 percentage points of market share. We got 32 thirds of that share is comparing to 20, 20, 21 versus numbers and know whether they are getting more and 20 basis points of sharing that theory. And when I went to the set, we experienced market share gains in all divisions and in every quarter these gains are seen in both traffic share and value share. It's also important to know that not only we are gaining share, but we're doing faster than any of our closest competitors. And we take these same from our customers. And this is nothing we solved unless you've rebooted. These market gains are a product of our unique restaurant footprint. The strong focus on operational excellence, this allows us to operate to drive through delivery. These are centers not cafes from counters, and that we have the industry leading digital strategy. And we have two, a set of market has that have comes to the, any of the brands, either region.

Thanks, Louis. The next question is from Joaquin . He congratulates us on the results qualities for having been disconnected for a period, but a ask what was the rationale of the operations reorganization and what kind of G&A savings kind of generate. And by the way both Joaquin asked this, and then we're going to have another question from from JPMorgan who asks a similar question. So rather than repeat it I'll turn it over to Mike, to you, Marcel, to answer the question that both walking in Luis's have asked.

Okay. Thank you. Thank you. Both of them for the question. We have been always leaders in the QSR industry in our region in Latin America and the Caribbean thanks to the way the strategic and long term vision that we have in order to take important decisions for the company. So we, we have been given careful that issue thought to how the organization should be managed going forward. And we believe we predominately believe that our teams are ready for this, these new organization and these new, these next step. It's important for me to for, for you to know that this is not a cost cutting decision. Instead this reorganization is intended to leave us more and more a giant company giving our local teams more ownership. And at the same time, more resources to support the daily decision making, you know, the markets at the same time we are allocating additional resources to maximize the initiatives that are providing th the greatest contribution and have the greatest potential for genetic future growth and increased profit. We feel, we believe that this is the right organization as structural to take advantage of face. You know, what am I it's in the years to come overtime? And in recent years, we started do a decentralized decision-making, eh, even markets, more freedom to operate within our strategic framework. During the pandemic. For example, local management teams were crucial for a successful response to the rapidly changing conditions in each market. Each market was very different to the other. So our people in the markets needed a tremendous job on the kind of results we are reporting to date. I can assure you that those are a consequence of all the great people, our collateral class across the region, taking the right decision every day. So we think that these newest structure will allow us to apply the learnings from the pandemic, and we will build on the Excel excellent results we deliver in the third quarter of 2021 efficient teams. We continue to provide guidance and share best practices. And these will ensure that each market works within the studies triangle and corporate teams will develop and deploy new capabilities, and we manage the company's strategic direction established by our board. So that's the rationale behind the changes we made on, for sure. We will talk a little bit more around this, on our investor updates in the first quarter of next year.

Great, thanks Marcello. The next question is from when we started going through, who had, you've already answered the second part of his question where he says from JP Morgan first says, lo everyone hope all is well and congrats on the results. And his first question is related to EBITDA margin outlook. As we mentioned on the call margins across the regions are trending in line with, or about 2019 levels. So he wanted to get our thoughts on the sustainability of these trends and the main drivers for further margin expansion. I think that is for you my now.

Perfect, thanks. So what he says for, for the question, and I will answer the question or keeping in mind that part of that I already answered when, when asked about sakes and, and gross margin how we are seeing the business on the, on the EBITDA margin outlook. Well, there was lot said in this third quarter EBITDA margin improved by 220 basis points compared with 2019 130 basis points. If we exclude the tax credit. As I mentioned in the previous question the main driver is that states are recovering and that we are in this full recovery phase now, and customers are returning to our stores. I already mentioned we are improving the gross margin, working on pricing, working on product mix and working on costs. And we believe that with the new divert or how the business is evolving with the new segments, with the growth in we are seeing in, in, in drive-through and delivery and how the front counter and be certain centers are recovering. We still have we have the possibility to maintain and to improve our gross margin in that respect regarding payroll, which is our second coastline. We are seeing improvements compared to 2019. Those improvements are coming mainly from productivity gains. Remember that while we sell off premises, our productivity increases and also we have received some government support in the last month, but that probably will not replicate going forward regarding rent. We are keeping rents under, under control, and this has been the result of all the work regarding rent and all the other fixed costs that we have in the occupancy and other costs line, all the work that we have been doing since the pandemic started, but that we are very confident that these gains in,…

Our next question is from Joan follow-up on the day of school, you congratulate us on our results and thanks for taking this question. And he asked what was the penetration of delivering the quarter, if we could share I guess that, that question is for you is

Hello, Joel, thank you for the question. Yeah. the, the so far is here. We have generated around 17% of sales year to today and around 15.5% in Q3. Despite the gradual recovery in, in the on-premise segments sales were up 83% a year delayed in 43% in figure in the third queue of 2021. This is versus 2020. And like we said before, this growth of 43% is on top of 180% growth of last year in our operation. Our focus today, we still have opportunities is to improve accuracy service time and the customer satisfaction. And we are benefiting from a sustained customer demand because even though we are seeing a strong record variation of the on-premise channels, I remind you that on premise channels are, is the centers from counters or mode stores. Even though they're, these channels are recuperating delivery at a slower pace, keeps on growing, and we're being able to, to sustain the big base gain during the pandemic. We strongly believe that on premise sales, we dilute rather than cannibalize the sales of the second.

Perfect. Thanks Louis. And actually, I should have mentioned Joan Paulo had a second part to his question, which I think we've already addressed. It just his question has to do with our remarkable ability to having maintain food and paper costs flat, despite inflationary pressure in Brazil. And he also asked, how should we expect that line to perform moving forward, given protein export embargo to China and so on. I think you've already addressed that. So that being the case, it's actually the last question that we received one or two thank everyone for joining us today and for your interest in the company at DC and I are more than happy to get on the phone with any of you following up today's call and next few days to go through our results in more detail. Until then we look forward to speaking with you again on our next earnings call, which will be sometime in March of 2022, actually before that we'll have our investor events in, no later than February of next year. And until then have a safe day and we'll talk to you soon. Thanks so much.