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Operator: Hello, everybody, and welcome to the AmRest FY 2025 Results. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to Lukasz Wachelko with WOOD & Company. Please go ahead.
Lukasz Wachelko: Good afternoon, ladies and gentlemen. My name is Lukasz Wachelko. I'm representing WOOD & Company. And I have, again, the pleasure to moderate the call of AmRest after the quarterly results. The company is being represented by CEO, Mr. Luis Jimenez; CFO, Mr. Eduardo Zamarripa; and Chief of IR, Mr. Santiago Camarero Aguilera. Without further ado, guys, the mic is yours.
Luis Comas: Good afternoon, and thank you for joining us. We appreciate your time and continued interest in AmRest. I'm Luis Jimenez, CEO of AmRest, and I'm delighted to be with you today. Joining me are our CFO, Eduardo Zamarripa; and our Head of Strategy and IR, Santiago Camarero. Today's call has 2 clear objectives. First, we want to give you a transparent view of the work delivered over the last 12 months, how we have executed and what we have strengthened and what we have learned. Second, we will share our perspective on 2026, our expectations, the main opportunities we see to accelerate performance and obviously, the challenges we are navigating in a dynamic environment. At the heart of our message is confidence in the fundamentals we are building. We believe we are laying the foundations for a compelling value creation story, maintaining disciplined profitable organic growth across the portfolio and improving consistency and execution, so discipline and the financial approach. With that, let's turn to the materials. Let's move on what we would like to share with you today. Let's move to Slide 2, please. AmRest is a truly pan-European company with a broad and diversified footprint across 22 countries in Europe, China and the Middle East. With 2,139 restaurants and a portfolio of 8 brands spanning quick service, fast casual, casual dining and coffee, we serve more than 30 million customers every month across multiple locations and channels with offerings tailored to local preferences. Our scale is a clear competitive advantage. It allows us to replicate best practices across markets drive efficiencies and continuously enhance the guest experience while focusing our resources where demand is the strongest. And what truly powers that scale is our local expertise, more than 44,000 colleagues who understand their markets and execute with discipline every day. Taken together, this combination of geographic reach, brand breadth and operational know-how underpins our ability to identify and capture attractive growth opportunities. Moving to Slide 3. Let me remark the most relevant milestones for 2025 that I would like to try to summarize in 7 points. On a like-for-like basis, the group revenues increased by 2.4% year-on-year, reaching almost EUR 2.6 billion. The group's EBITDA generation during 2025 reached EUR 407 million, representing an EBITDA margin of 15.9% with a clear divergence in the performance across countries. Third, despite a challenging operating environment throughout the year, particularly in the fourth quarter, the profit of the company increased to EUR 18 million compared to EUR 13.5 million last year, supported by lower impairments and interest charges. In addition, the company made a dividend payment in the amount of EUR 15 million or a 7% share, which was paid on the 22nd of December '25. In terms of new openings, during the year, we opened 92 units, and we also renovated 213 restaurants. From a leverage perspective, the group remains prudent with leverage at 2.3x at the year-end within our internal target range. And finally, during 2025, we also advanced our strategic road map throughout a meaningful step in our operating model with the disposal of our 51% stake in SCM and the termination of our mutual commercial agreements and obligations. This milestone supports our ambition to strengthen value creation through a more integrated and efficient platform, enabling AmRest to conduct supply chain management and product quality assurance services internally going forward and identified additional synergies that can support future growth, opening up a significant avenue for value creation throughout the supplies of our more than 2,000 restaurants. With this context, I invite you in the Slide 4 to review the performance in 2025 versus the expectations that we shared with you 1 year ago. First, revenues grew in the low single-digit range despite an operating environment marked by moderate growth in Europe and declining inflation alongside elevated trade policy and geopolitical uncertainty, which continue to weigh on consumers' confidence while easing inflation supported a gradual improvement in financing conditions. Household purchasing decisions remain cautious in several markets. Second, on profitability, we experienced a decline of 0.8% points in our EBITDA margin, affected by the deconsolidation of the SCM business, temporary business affection in the Czech market during the latest month of the year and to still elevated operating cost pressures. most notably labor costs in certain markets, while absolute food prices remain also elevated despite lower inflation rates. With respect to CapEx, we significantly reduced our capital intensity, fully consistent with our guidance. CapEx stood at EUR 158 million in the year compared to EUR 194 million in 2024, while we have maintained the number of new equity stores opened. The total number of openings reached 92 restaurants in 2025 versus 109 in 2024. And finally, as I already mentioned, the leverage continues at the low end of our internal target range. Moving to Slide 5. Let's now focus on what we expect for 2026. From a sales perspective, we are facing a challenging start of the year. However, we expect 2026 to be a period of progressive improvement, building momentum throughout the year with a very clear second half stronger than the first. Overall, our guidance is for mid-single-digit growth. Second, as trading momentum improves, we also expect this to translate into better profitability, supported by an ongoing discipline on cost and continuous focus on operational execution. Third and very importantly, we expect a strong increase in free cash flow generation, driven by both higher operating cash generation and tighter control of investment levels, including continued CapEx optimization. In addition, we plan to maintain a similar level of gross openings to 2025. However, the growth is expected to remain modest as we plan to accelerate our portfolio optimization, including a higher level of closures of restaurants that are not strategically aligned or are structurally underperforming so that they no longer dilute the group's profitability. And finally, we will continue to preserve a prudent risk profile, keeping leverage at the low end of our target range. If we move to Slide 6, we would like also to share with you our midterm expectations. Over the last few years, a combination of temporary factors has meant that the group's revenue growth, both at the sales line and across other income streams has not progressed at the pace we believe the business is capable of delivering. Looking ahead, we see a clear path to reaccelerate our return to a high single-digit growth profile over time. That acceleration should, in turn, restore operating leverage and support a meaningful uplift in profitability, targeting around 2 to 3 percentage points of margin recovery versus current levels. This, combined with a disciplined investment framework that will translate into a strong increase in free cash flow generation, supported by a stronger operating cash flow and continued focus on capital allocation. Finally, our ambition is to keep strengthening our portfolio by incorporating new concepts and brands so we can address emerging customer needs, broaden occasions of use and remain highly relevant to local preferences across our markets. If we move now to Slide 7, I would like also to share with you some key strategy considerations. Digital transformation remains a key enabler of efficiency, engagement and growth across AmRest. In 2025, we continue to scale a more unified and data-driven operating model centered on 4 pillars. AI agents supports almost all AmRest employees in central services, streaming daily operation and improving productivity in all business areas. We have also rolled out a comprehensive customer care solution, seamlessly integrated feedback from every channel and enabling efficient resolution of customers' inquiries and issues. Our digital platforms are continually refined to meet changing customer expectations, offering features like personalized kiosk offers in Central Europe or table payment capabilities at La Tagliatella. Ongoing systems standardization ensures agile and modern technology environments. And finally, we have implemented an intelligence platform that empowers daily restaurants and organizational decisions, support targeted marketing, boost customer retention, streamlines resource management and enhances pricing strategy, so enable self-service analytics for all teams. These initiatives improve efficiency and scalability by automating central services, unifying customer interaction across channels and enabling faster and more accurate data-driven decisions, very important. In summary, these initiatives are providing a tangible improvement in the quality and speed of decision-making. So on Slide 8, we can provide some examples of how advanced analytics translate into tangible commercial outcomes, driving traffic, improving financial performance through data-driven pricing, menu simplification and smarter promotion optimization. Data-driven decisions based on advanced analytics allow us to drive traffic and improve financial performance across our portfolio. By applying data-driven pricing tailored to local demand and competition landscape and so simplifying menus to strengthen margins and optimizing promotions based on the incremental impact, we are attracting more customers while improving the efficiency and returns of our commercial investments. Now changing topics. Let me take you to Slide 9, where we can summarize the evolution of our restaurant portfolio for your convenience. While we have already discussed our short and midterm expectations, this slide provides a clear view of the underlying openings, closures and the resulting net change. Finally, if we move to Slide 10, our commitment to sustainability continues to be a part of our long-term value creation. And as it is stated in the headline of this slide, our sustainability agenda remains integral to how we build long-term value. In 2025, we advanced our environmental and social priorities, including a significant reduction of energy and water consumption in our restaurants by 11% and 4% comparing to last year. We also continue to embed ESG criteria into our supply chain processes, including suppliers evaluation and tender processes. Beyond metrics, our people brought up our values to life across markets as set in the fifth edition of the Foodsharing Day initiative delivered across multiple brands and countries, reflecting our continued commitment and connection to the communities where we serve. And saying this, with this, Eduardo, if you can cover the main financial highlights, please.
Eduardo Zamarripa: Thank you, Luis, for your insights. Good afternoon, everyone, and thank you for joining us. It is a pleasure to be with you again to share a summary of the results delivered by AmRest team during the last year. 2025 was marked by ongoing geopolitical uncertainty and a consumer backdrop shaped by persistent cost of living pressures. Against this backdrop, AmRest once again demonstrated the resilience of its business model, supported by disciplined execution across markets and routes. Throughout the year, we continue to adapt to a more precise conscious consumer, delivering a compelling and consistent value proportion across brands and geographies that remain central to sustaining traffic and protecting profitability. At the same time, technology and digitalization have become increasingly important enablers of this ambition, enhancing convenience for guests while supporting operational execution and data-driven decisions making at scale. Luis already covered the key full year highlights, so I will skip Slide 2 (sic) [ 12 ] and move directly to Slide 13 to walk you through the main financial highlights for the fourth quarter. Turning to the fourth quarter. Revenues amounted EUR 636 million, representing a 1% increase versus the fourth quarter of 2024 and the same-store sales index stood at 96. We have already discussed the temporary factors behind this performance in addition to the underlying macro backdrop. We also faced an external headwinds. However, we are not satisfied with this. We want to be clear that we are taking decisive actions to improve, and we are already seeing the situation improve progressively. It is also important to highlight the divergence we continue to see across markets. Most of our core markets delivered solid progress, most notably Poland, where quarterly revenues increased by almost 6% year-on-year in the fourth quarter or by 9% on a full year basis. On profitability, the sales evolution meant that we kept the EBITDA margin close to 17% in the quarter, resilient but still clearly below the group's potential and objective. We continue to view the drivers of largely temporarily as we expect a gradual improvement in profitability as sales trends recover and operating cost pressures eases over time, both on food and labor. As you can see on the slide, fourth quarter EBITDA amounted to EUR 106 million, while EBITDA non-IFRS 16 was almost EUR 58 million, implying a margin of over 9%. On the other hand, the operating profit for the quarter reached EUR 26 million. Finally, cash generation remains strong. Operating cash flow in the quarter was EUR 109 million, while investing cash flow was below EUR 46 million, reflecting the continued decline of investment intensity and our disciplined approach to capital allocation. Moving to Slide 14, please. On this slide, you can see the evolution of the group's quarterly revenues over time, reflecting the natural seasonality of our business. At the same time, digital sales gained relevance, particularly in the QSR segment. Excluding our casual dining brands, digital sales represented a primary route to market in 2025, reaching around 62% of total sales. We see this as a very exciting opportunity. It strengthens the way we interact with our guests, enhances convenience and give us additional levers to build loyalty and improve our commercial effectiveness through a more personalized and data-driven consumer engagement. With that backdrop on revenues and the growing weight of digital channels, let me move to Slide 15. where we summarize the evolution of our profitability, tracking EBITDA and EBIT and how margins progressed through the year. As discussed, EBITDA in the fourth quarter was over EUR 106 million with almost 17% margin, broadly stable versus the recent quarters. In terms of EBIT, the generation was EUR 26 million with a 4.1% margin. The key message from my side is the resilience of profitability with our focus on gradually restoring operation leverage. Now moving to Slide 16. Let's look at our cash and debt evolution and more broadly, our liquidity and leverage position. At year-end, AmRest net financial debt stood at EUR 518 million. Leverage increased to 2.3x as expected, sitting at the low end of our internal target range, an area where expected to operate over the coming quarters. Finally, the group's liquidity at year-end was over EUR 146 million, a decrease of EUR 7 million versus the prior year. This reflects an efficient liquidity position, supported by the additional unused committed lines in more than EUR 140 million. This financial risk profile provides a prudent use of resources and a solid liquidity that we consider to be efficient, fully aligned with the group's operating needs. In summary, keeps us well positioned to support the business while maintaining disciplined capital allocation. With this balance sheet context, let me now turn to the operating view by geography. Turning to Slide 17, you can see the breakdown of revenue, EBITDA and restaurant count across our segments. These segments span our footprints across 22 countries. And after several years of broadly synchronized trends, we are seeing a more differentiated set of dynamics across markets. In other words, performance is increasingly driven by local market dynamics, which also creates opportunities to allocate resources more selectively and accelerate improvement where the upside is the strongest. Turning to Slide 18 and 19, we present the key metrics of Central and Eastern Europe, our largest segment. In 2025, annual sales in this segment amounted to EUR 1.6 billion, representing a year-on-year growth of 6.5%. At country level, Hungary posted double-digit growth of 10.2%, while Poland also achieved a strong performance with almost 9% increase in revenues. EBITDA generated reached EUR 306 million, representing an EBITDA margin of over 19%. Profitability remains solid and broadly consistent across regions, with Hungary posting the highest margin at almost 21%, while other markets delivered comparable levels. Looking at the fourth quarter, revenues totaled EUR 394 million, 1.2% higher than in the same quarter of 2024. EBITDA was over EUR 78 million, representing an EBITDA margin of almost 20%, broadly flat year-on-year. Finally, the restaurant portfolio in the region reached 1,283 units after increasing by 55 restaurants with the opening 28 units during the last quarter of the year. With this, let's now move to Western Europe in Slide 20 and 21 to discuss the performance and key dynamics of that region. Revenues in this segment amounted to EUR 870 million for full year 2025. This represents a 3% year-on-year decline. EBITDA generated amounted to EUR 121 million, resulting in an EBITDA margin of 14.8%, 0.3 percentage points lower than the prior year. Performance diverged significantly by country. Spain, AmRest's second largest market, delivered flat sales versus last year, while Germany recorded almost 5% growth, supported by continued momentum in the market. By contrast, France experienced a 13% decline, reflecting a more challenging trading environment and weaker consumer confidence. In the fourth quarter, sales reached EUR 221 million, a decrease of 4%, which represents to the same period of 2024. EBITDA stood at EUR 33.5 million. This is an EBITDA margin of 15%, more than 1 percentage points below the prior year. Finally, the total number of restaurants in the region stood at 771 units after 19 openings and 32 closures. Approximately half of the closures occurred in France, reflecting ongoing portfolio optimization efforts and a focus on improving the quality and profitability of the market. With that, let me move to the next slide and briefly comment on China, where we operate the Blue Frog portfolio. This segment is smaller in scale, but strategically important, and we remain focused on protecting relevance and profitability while navigating a more volatile consumer backdrop. Revenues generated during the year stood at EUR 85 million, which is 8% lower than in 2024. The depreciation of the Chinese yuan against the euro was the key headwind. In local currency, sales decreased by 4%. Despite the softer top line, EBITDA amounted over EUR 16 million, implying a solid EBITDA margin of over 19%. In the fourth quarter, revenues were EUR 20 million and EBITDA reached almost EUR 4 million. With this, EBITDA margin improved to over 18%, almost 0.5 percentage point higher than 1 year ago, reflecting ongoing cost discipline and operational focus despite the more challenging trading environment. The restaurant portfolio closed 2025 with 85 restaurants in the region after no openings during the last quarter of the year. And with this, Luis, I believe we are ready to take questions from the audience. Many thanks.
Luis Comas: Thank you, Eduardo.
Operator: [Operator Instructions]
Santiago Aguilera: We're going to start perhaps with some questions that we have received in the box. The first one is asking about the situation in Hungary during the 4Q of the year if the performance that we have seen in the market and the strong revenue growth is coming from any one-off in this market?
Luis Comas: No. Hungary has been last year and so previous years as well, a growing market. I think we have been very pleased with the performance, customer confidence and traffic has been growing. And so it has been one of the best years as we have seen in the percentage of margin that Eduardo just mentioned, reaching to almost 21%. So it was a great one and nothing as one-off. It was a continuous operation.
Santiago Aguilera: Thanks, Luis. We have the next question referring to Czechia. Do you see already the normalization of sales in Czechia following the allegations of food safety?
Luis Comas: Yes, Santiago. And let me be very transparent on this issue. AmRest performance sales in Czechia were negatively affected in the final months of 2025, following misleading allegations about food safety spread through social media. We at AmRest take food safety very seriously. And always, we are fully committed to rigorous food safety standards, and we conduct comprehensive reviews across our network. We do combine robust internal controls and also independent third-party audits. And saying that in this context, AmRest has also submitted itself to hundreds of additional audits and inspections conducted by both the respective brand owner and the competent health and hygiene authorities. And gladly, the results of this out is identified, no systemic issues and all restaurants continue operating normally. So after this event, I think we are observing now a progressive recovery, Santiago.
Santiago Aguilera: Thank you, a very detailed answer for this issue. The next question is related to CapEx. This says what CapEx levels do you expect to reach in 2026 and 2027?
Eduardo Zamarripa: In terms of CapEx, we addressed the topic during the call. And we expect similar levels to the ones that we had in the previous year. And we want to be very objective on this and focus on 2 main topics. openings, and we are doing a very detailed procedure in terms of getting sure that those openings give the returns that are expected by the company. And on the second topic is very important, the renovations that we are doing across the organization. This is very important to us because it's part of the service level that we give to our consumers. So it's important to have updated the restaurants to have a very good experience in our consumers. And also, this drives additional transactions and sales during the reopening of those restaurants.
Luis Comas: Eduardo, let me jump in because I think it's also significant that the usage of CapEx this year has been outstanding and greater to previous years. I would like to highlight the efforts made by the teams into how to improved efficiency of the jobs of the construction of the supply, everything, all the parts related to CapEx investment has really saw an improvement. And I think the efficiencies that we are observing will stay even improve for longer. So those are good signs and good data that really allow us to be more positive about how the -- we're flying in the same level of CapEx be more effective on the usage of the capital.
Santiago Aguilera: Okay. Thank you very much, gents. The next question that we have is related to the dividends. And they are asking if AmRest is planning to establish an official dividend policy, and we can expect or we have any guidance with respect to next year's dividends?
Eduardo Zamarripa: We are focusing on the cash flow of the company, mainly enhancing the operating part of it. So at this moment, the results are the one that mark the dividend that we can share. So our focus right now is on cash flow and the Board of Directors will take the decision depending on the level that we generate as a company.
Santiago Aguilera: Okay. Thank you very much. I don't know if we have any further questions, operator?
Lukasz Wachelko: Maybe I will take the privilege of moderator and ask a couple of follow-up questions. First of all, I would like to ask about Czechia. You said that you are seeing gradual improvement. Can you share with us what kind of same-store sales are you observing in Czech Republic in the first quarter of this year?
Luis Comas: As I said, after this impact on the last month of last year and let's say, the customers has been more aware of the real status of our safety and our conditions and the restaurants, the trust is recovered and the granted operation trust and confidence is showing back. So the performance is gradually recovering. It may take some time. We don't have a clear vision on that. But definitely, we see just positive week-on-week. So this is good news.
Lukasz Wachelko: Okay. And in the presentation, you also shared with us that you are considering new brands and new concepts. Can you shed more light on that? What kind of a brand, what kind of concept, just even the direction, where are going?
Luis Comas: Sure. Sure, Lukasz. The company has been always evaluating and assessing different perspectives of how to improve and grow our portfolio. And in that regard, we continue doing that. Obviously, we are looking forward to onboard brands that increase our reach through different business proposals. And that's an important thing because I think the diversified portfolio of brands that we operate is one of the strengths of AmRest. So we want to keep expanding that and from there, looking forward. When I cannot disclose that, but we are seriously working on that topic.
Lukasz Wachelko: Okay. And on the flip side, you are still in a cleanup at closing down the less efficient part of your network. And as I understand that's also the plan for 2026. Can you tell us which restaurants, which markets are under your consideration?
Luis Comas: Yes. This is also as well a dynamic exercise and a dynamic assessment. And as you can imagine, there are brands and territories and customer dynamics that are changing in the years. We expect to keep running in the same level of closures as we saw in the last years. This is a discipline that we are taking to really be present where the consumer occasions are now and also to be sure that our profitability is not dragged out by underperforming stores. So probably the same level. I expect that for a couple of years, we still have some areas to keep working on, and that will be the reference as same as we did this past year.
Lukasz Wachelko: Can you give us any details on the markets or brands or you will like to say as you are now?
Luis Comas: Well, probably, this is a variety of actions because not all markets do have a continuous trend. And saying that, what one market was a target 1 year, another one will be next. This is on many occasions also related to leases agreements with landlords. So it's not geographically driven and some occasions are regulated by contracts, disposals and so on.
Santiago Aguilera: We have received in our box an additional question that is asking about the evolution of the EBITDA margin in Germany during the fourth quarter of the year. I don't know if perhaps Eduardo, you can answer this.
Eduardo Zamarripa: Yes. Thank you, Santiago. There's an important extraordinary element in there. We registered a fire, and we needed to make some bookings in the fourth quarter of 2024. But the good news on that topic is that now that is normalized and the market is recovering.
Santiago Aguilera: Thank you very much, Eduardo.
Operator: [Operator Instructions]
Santiago Aguilera: Okay, if there is no further questions. I don't know is...
Luis Comas: No. Thank you for joining the call today. I think it has been a challenging year, no doubt. I think the markets across the different geographies we are facing are in different momentums of their evolutions. Gladly, AmRest's diversity in brands and geographies allow us to compete heavily where we have bad wins. The good thing is I think the company has gone through a very, very selective exercise of how fine-tuning our processes. We have kept investing in good systems. Our profitability keeps moving up and the margins are also solid. I have good feelings, and I think this is a topic Santiago, no one mentioned that I think second half of the year their forecast in this industry about some commodity or goods prices that are looking to go down as chicken, beef and coffee that as you know very well, these 3 in the last 2, 3 years were very volatile. And I think we are observing potential decreases in prices, especially on the coffee side because great harvest in different territories, but also beef that we name internally deflation seems to be now stabilizing. And those 3 things have no more than positive forecast outcomes to our business. So I'm also expecting those to land in reality somewhere in the second half of the year. Saying that, thank you very much for the coordination of the call on the other end and looking forward to share with you more news in very short. Thank you, everybody.
Lukasz Wachelko: Thank you very much.
Operator: Ladies and gentlemen, today's call has now concluded. We'd like to thank you for your participation. You may now disconnect your lines.