Alsea, S.A.B. de C.V. (ALSEA) Earnings Call Transcript & Summary

Hello, everybody. Welcome to Credit Suisse Offices. We are very honored to be hosting today Alsea's Investor Day 2022. I'm Vanessa Quiroga, Research Analyst covering Alsea for Credit Suisse, and I'm very happy to have you here. So I'll give the word now to Salvador Villaseñor, Chief Investor Relations Officer for Alsea.

Thank you, Vanessa. Thank you. Hi, everyone. Thank you for coming. It's been a while since we have a presence event like a couple of years ago. Today, we will be having presentations from our Chairman of the Board, Alberto Torrado, Fernando Gonzalez are recently appointed Chief Executive Officer; Rafael Contreras, Chief Financial Officer; and Dario Okrent, our Chief Digital Officer as well. I will leave you briefly with the video of the company, introductory video. And afterwards, at the end, we will have a Q&A session as well. [Presentation]

Well, thank you to be here with us very happy to present the fourth quarter results of Alsea 2021. So in terms of sales, we achieved close to MXN 16 billion in terms of sales and MXN 5.4 billion higher than the numbers that we had in the fourth quarter of 2020. And in terms of same-store sales, in terms of same-store sales, 10.3% positive same-store sales versus 2019 with some brands that achieve a pretty good same-store sales growth, like Domino's Pizza in Mexico, close to 30%, the Starbucks higher than 30% and Burger King, close to 20% same-store sales growth. And with the -- in other geographies were in Chile with 48%, the Starbucks in Chile also 26% and in Colombia, Domino's Pizza 45% and Starbucks 60%. So we have a pretty good same-store sales growth in all of our geographies and in the QSR brands. We also have a positive EBITDA, 4 quarters with a positive EBITDA in all of our geographies with a margin of 25.5%, and we achieved higher than MXN 1.1 billion versus the fourth quarter of 2020. In terms of net income, we have MXN 1.2 billion, 1,270% higher in terms of net income than the fourth quarter of 2020 and more than MXN 857 million higher than the fourth quarter of 2020 with our earnings per share of MXN 0.94 per share. So for the whole year, we have also a pretty good 2021 year. Sales were up MXN 14 billion more than the whole 2020 figures, and we reached close to 97%. If we take out the sales of the stores that we closed in 2020 and 2021. So we achieved 97% of sales that we have in 2019. Some of the things that are pretty good also is the share that we have in terms of home delivery, with Domino's Pizza, 23.4% and without Domino's Pizza, close to 10%. The amount of home delivery sales were MXN 12.5 billion. Also, in terms of for the whole year in terms of same-store sales, 30% higher in 2020 and almost the same from same-store sales of 2019, only 3.4% negative from 2019. We have a positive also EBITDA with a margin of 23.1% and MXN 14 billion higher than the one that we had in 2020. We ended the year with a pretty good cash position, close to MXN 6.9 billion, even though we acquired 10.5% of Alsea Europe in September with an amount of MXN 1.3 billion. So at the end, we have a pretty good cash position even though we have a CapEx of MXN 2.4 billion. We issued a U.S. bond of USD 500 million at the end of December with a tenure of 5 year [indiscernible] and with a cost of 7.75%. So we use these proceeds to pay some bank credits that the maturity was in June 2022. So we have a new duration of 3.8 years with this issue of this bond. So at the end, the debt structure was 63.6% in Mexican pesos, 36% in euros. This U.S. bond, we have a hedge to Mexican pesos. So the rate of this bond in Mexican pesos was 10.6%. So at the end of December, 92% of the credits is on a long-term credit and 8% short term and we have 66% fixed rate and 37% variable rate. Now this -- at the end of December, these are the amortization that we are going to have in the next years. I'm going to present after the amortization that we are going to have after the issue of the European bond in January. In 2021, we have a CapEx of MXN 2.4 billion. We opened 84 new units, 30 was a Starbucks and 37 Domino's Pizza. So we are focused on the more profitable brands to open the new units. And the breakdown, we also focus in maintenance during the year. So 43 -- or close to 43% was maintenance, 30% openings, 20% in other strategic projects and 6.3% in technology. So I'm going to leave you with Alberto. So Alberto, please?

Thank you, Rafael, and thank you, everybody, for joining us today. It's an important day as Rafael was saying and Salvador. We have not been here with you guys for some time. Obviously after 2 years of very tough situation for the sector and for Alsea due to our leverage after our acquisition in Europe. I have to tell you that I'm very happy with the results that Rafael just presented. I think we had an exceptional 2021. As you can see in the numbers, we achieved and we're above most of the goals that we have set in all the P&L and in our balance sheet numbers. So I think the team did a great job and we should be happy for that. But the important part of that is that it set us in a privileged position to take market share and to keep growing the company in the future. As you saw, we've been able to maintain sales. We've been able to maintain our margins. And in some cases, we are better than we were before 2019 in terms of margins, but we were also able to fix and to arrange our financial structure as Rafael said, not only we did the bond in last year, but we also were able to do the bond of MXN 300 million this year and we will present that at the end of the first quarter. So I do believe [indiscernible] in a great position. You will see by the presentations on Fernando, Dario and [indiscernible] Rafael that how we are going to approach 2022, and I definitely believe that we are back on track that we are going to continue growing as we have always done and that the opportunity in the market is bigger than ever. I'm happy to see how technology has changed the game and how Alsea has been able to adapt in all of our geographies to this new convenience of the customer. So as you know, from now on, Fernando will be the CEO of the company. Remember that he has been in the company already 8 months. He arrived the company in June. He was working with me together hand by hand for the last 6 months, 6 months of the second semester of 2021, announced in January and February, he's leading the company. And I'm going to be the Chairman of the Board, as I have been for some time, making sure that our corporate governance -- and everything we do is based upon what our Board was and what our Board Direct. So thank you for being here, and I'll be here answering any questions after Fernando presentation and the team. Thank you very much.

Good morning, everyone. Thank you very much for your time. It's a pleasure for me to be for first time in the Alsea day. As explained, Alberto, my name is Fernando, I have started working in the company 8 month ago, mainly focused in the first semester to understand the business, the team, the strategy in the company and preparing with the rest of the team the strategic plan that today probably went to introduce briefly to all of you. Previously, when we are talking about the strategy basically, we base our strategy 2022, 2026 is years in 6 main axis. The first one is probably [indiscernible]. We are a retailer. We are a retail company. The base of our business is the people. So to attract and retain the best talent is mandatory for a company that is working intensively in terms of network and intensively in terms of heads, in terms of head count that we are doing is to try to have a strategy base to close or to try that the decision-making was a process close to the business, close to the customers. And of course based on the merit [indiscernible], we have to recognize the talent opportunities in order to create the best bank and to be one thing that is mandatory for a company, a leadership as I say, that is the best paying employer in the industry in our case. And of course, it's the base to make something that is the origin of all our strategic plan is the customer loyalty, the experience for the customers to enjoy and to delight this experience for the customers in order to do something based on the innovation, based on the efficiency in terms of operation in order to bring a disruptive value proposal and continuously surprise to our customers. And of course, something that sure that today you are going to make some question about this, that is to manage with a different situation that in terms of worldwide, we're going to face it. For example, the cost inflation. So in order to manage this probably not controlled by us, the evolution worldwide is mandatory to work in advance. And to be very dynamic and very efficient in order to prepare our big company in order to answer very fast to the business. And secondly, [indiscernible] . The most important is the innovation and the technology. Our target is to use the innovation and the technology in order to increase our sales, to increase our customer experience and at the same time to improve our efficiency every day and to be every day much more productive, much more profitable, okay? And something that is the base of our business plan is that, of course, growth is not enough. We have to grow in terms of profitable and of course consistently. And that means that, of course, you are going to -- we are going to introduce to you to present to you a strategic plan based on the organic growth based on our space and our [ core and geographies ] [indiscernible] of the alternatives and the possibilities that the market, of course, in 5 years, can offer to us. And the most important is based on the development with our main partnerships or our franchises. We have to develop this growth in terms of organic growth with our partnerships, our suppliers, our franchises in order to create a much more stronger value proposition to the final customers, that is the customer for all of us. And of course, to create then we are going to have the possibility in a short video to introduce all our ESG targets is not enough to growth. It's -- we have a response [indiscernible] in front of our people, our customers and the planet where we are [indiscernible] we are living. And then I'm going to try to summarize very fast because our -- this growing based on the transparency and the detailed management include more than 400 KPIs in terms of ESG, in terms of ODS, in order the national [indiscernible]. And the most important for us is to maximize the Alsea value. The Alsea value is not just it's how it's growth and how we are growing. The generation of cash flow in this case, cash for the company to face and to improve the asset balance sheet of the company. That is the main target in our short strategic plan for 5 years. So in terms of Human Resources, during the video, show our purpose or the new purpose in the company. This purpose much more than one sentence to bring happiness and experience full of flavor represent the strategy of the company that is based firstly in a strong culture based on the customer centricity or the customer-centric that is the base to guarantee the growing and the stability of the company in the future and based on the people to enlarge the best talent and of course to create productive teams and that allow to us to deliver directly this value proposition to all the customers in every moment of habits of consumption that we're offering to them, okay. And how we want to do this? Finally, much more than that I explained before is to guarantee to be the best paying employer in the industry. In order to do this, of course, we have until 2023 -- sorry, 2030, strong targets and goals for the company. The first one, of course, is the fair income in all the geographies for overall colleagues that are working in Alsea in order to create the best environment for working and for job for all of us. And as of course, as base salary competitiveness, we want to be very efficient in order to have the best talent and the best professional working as we are today. And of course, reduce the turnover, something that in terms of retail is one of the headache for all the retailer companies worldwide. And it means that basically, the commitment is not about how we are doing the things is everything that we are doing -- in order to enlarge this experience to reduce the turnover, that means that, of course, we are doing things every day a bit better. And of course to retain the key talent in the company. Now when Rafael had the opportunity to introduce to you the big numbers in terms of a strategic plan. I tried to explain that we base our strategic plan in the organic growth. Why? Mainly due to this slide that I'm going to try to summarize very fast. In the upper part, you have the number of stores that we have in the core brands, the 4 main brands in the company, Starbucks, Domino's, Vips and Burger King. We have today around more than 3,600 stores worldwide in our geographies and we have a space when we're talking about the space is possibility of expansion with the current geographies around 60% of the total network that we have today. In the below -- in the total regions, that is the low part of the chart, we have around 4,300 stores in all our geographies with a total space of more than 2,700 stores in the next 5 years. So we have the possibility to grow in our current space in our current definition of the geographies in order to be much more efficient to create cash flow and the better control of the investment and the better warranty about the cash creation mainly for the targets and the objectives of the company. When we are talking, I'm going to try to explain very fast, some numbers about the 4 main brands in the company. I'm not going to detail of the action plan, mainly because sometimes you are going to accelerate some consistency in these plans and sometimes the plans are relatively similar between the different brands. In the case of Starbucks today, in our total geographies more than 1,500 stores, and we are expecting to open between 110 to 130 stores per year. With a total market holding capacity, total space, total possibility to create a different network around up to 2,500 stores. So really, we have a big opportunity to be very efficient and very productive in the current space that we have today. And of course, we -- all the expansion plan, we try to compensate in all geographies that we are working today. In Mexico, in South America and of course, in Europe. I'm based in something that I explained before, the innovation, the new moments of consumption for all the customers we are talking about the [indiscernible] through we are talking about delivery, we are talking about a pickup, we are talking about takeout that have different moments of consumption that probably due to the recent increases of pandemia worldwide, probably is much more clear for all of us. But our expectation is that this is not going to be happier, is going to remain probably in different percentage, but it's going to be different attitudes and necessities for the customers. And the most important for us is to try to understand what they are expecting from us, how to anticipate the necessities and the emotional link between the company, between the different [indiscernible] and the expectation from the customer. And of course, to improve the customer experience. In terms of innovation, we are facing the possibility to migrate all our systems in order to have -- to guarantee the best experience for the customers in any relation moment that they have with all of us. In terms of Domino's, today, we have 1,300 stores. The expectation in our plan is to open between 75 to 90 stores per year in all the geographies with a total market holding capacity close to 2,000 stores. The targets for Domino's, mainly because it's a company where the participation of the delivery is higher than other kind of brands is probably much more important, this innovation and this technology transformation that in other kind of brands. Why? Because we try to maximize exactly this digital approach with the customers. And of course, to improve something that is probably basic, that is the delivery trends. In the case of [indiscernible] that -- sorry, in the case of Domino's, we are expecting that you may [indiscernible] and you receive the pizza, all the complements as soon as it's possible in order to want your experience as customer. And of course, to continually working in new channels, new commercial model in terms of Domino's in all the geographies that we are working today. In terms of Burger King, today, we have 400 units in our geographies and we are expecting to open around 15 to 20 stores per year, probably softer than other brands that we are managing a Starbucks, Domino's, but probably in Burger King, the transformation of this QSR is fast food in order to adapt and to keep the innovation and based on the efficiency that is historically a base of the model of Burger King with the help of all our franchisor is much more relevant than in other kind of geographies. And of course, in terms of market holding capacity, Burger King as big brands worldwide. The market holding capacity is quite weak, we are talking just about our perimeter, our [indiscernible] licenses that we have today. But we have a big opportunity to be very disruptive in something that is fast food that is QSR. And finally, I want to finish with Vips. Vips is one of our main brands in the company in terms of sales, in terms of profitability. And of course, we are in a business model evolution -- in this chart, we are talking about Mexico, of course, but that is much more relevant. Today, we consider that the space and the opportunities in the market is amazing for a [indiscernible] Vips that, of course, we have been focused in the last 5 more probably before in to try to have an evolution in commercial model to be very operative model, to be very delighted model to warranty this relationship between quality and experience for the customers and in order to warranty a profitable expansion in the future, that is the main things. We are finally defining new loyalty programs in order to have a better experience and communication with the customers and to have a differential offer versus all the competitors or any competitors that we have in our market. In terms of supply chain, I try -- we try to transmit to you much more our focus on the management of the probably instability that we have today recently worldwide. That is the cost inflation, the evolution of the commodities, the evolution of the energy cost. The most important for us is to use our volume and our capabilities in order to create and to warranty for the customers, the best relationship, best relation between quality and price. And in order to do this, we are focused in the sourcing of suppliers worldwide, including comparing our sourcing of suppliers in all the geographies that we are working to use the volume of purchases and the purchase anticipation to try to work in advance against something that probably is not under our control, that is the worldwide instability. But the most important is to improve not just efficiency in terms of operations in our network, including in our supply chain, to guarantee that we are the best logistic operator in terms of the industry, okay, in order to guarantee that we can face this kind of probably instability that we can have in the [ future ] in terms of prices and to try that this efficiency help to us to have a differentiation versus the competitors and at the same time to create a better experience for the customers. Now just we're going to introduce a short video about the ESG targets in the company. And after this, I promise that I'm going to try to summarize this KPIs we have in the company and some big numbers in order to make that this transformation, this evolution of the ESG is not just a number. It's a way to make every day most profitable our business. [Presentation]

Thank you very much. In order to try to summarize roughly the target of ESG in Alsea. The most important for the company is that to be the leader in the industry, is a big responsibility. Responsibility with our colleagues, with the customers and with the planet. And that we define in this strategic plan is, of course, a very detailed target of more than 400 KPIs in order to guarantee that we are following the international rules and of course, that we are doing in a correct way, in a profitable way. I'm not going to try to insist. Finally, we are working in 3 axis, as I explained in the video. In terms of community, in terms of stakeholders, to guarantee that until 2030 more than 1 million people is going to receive the benefits of our action in our fight against the differentiation to play for the integration in the communities in the integration in the company. And of course, warranty that the 90% of our workforce is [indiscernible] that is crucial for us. Our target is to invest to give more than $15 million in this period to improve the necessities in all the societies where we are working. And of course, [indiscernible] as we explained including in terms of corporative government, the company and the Board is working in to guarantee exactly everything that we are saying. Something that is important is not just that the 100% of our suppliers have to be audited in order to guarantee that it's not just Alsea, it's on the added value chain with guarantee who is working in these targets, and of course, not to use in artificial and taste and flavor in our products. But the most importantly, most clear probably is to guarantee that we call the balance. The 100% of our stores has to be sustainable. Of course, we have a target to reduce around 25% the consumption of energies in the company, 35% the consumption of water and waste and to warranty the waste in the company. And of course, the mission of CO2 in this case, that we call greenhouse gas emission. This is a target that is sustainable that today we are managing worldwide in our geographies in order to guarantee that this is a reality. And of course, we are continuously working to guarantee that we [indiscernible] expectation, not just for all of you, including for our target that is very ambitious. Now I would like to let to you with Dario Okrent, our Chief Digital Officer in order to explain all these innovation transformation plan and this digital transformation plan that we are following in the company, in the previous year, of course, is going to be the base of our efficiency and our operational model. Thank you very much.

Thank you, Fernando. Hi, everyone. Nice to meet you. So okay, let's do it briefly. Last year was really great for the digital channels. We grew up more than 40% regardless of 2020, not for the digital was a great year because the COVID-19 started. So we process more than 43 million orders. And just to give you a little example, half more or less half of these orders were processed in Mexico. The biggest e-commerce players process around 30 million, 32 million orders per year. Some of them delivered this or the 40% of these orders [indiscernible] next day. We process in Mexico more than 20 million orders that we deliver in less than 40 minutes. So what we did in terms of the delivery and to stress our network is massive and we process more than 1 order per second in the market. We have different digital platforms. Of course, the biggest one is Domino's. The second is Starbucks rewards and we are building our digital backbone that is called Wow+, just in Mexico, but we are going to see that later in the presentation as a spirit of build our digital transformation backbone based on that Wow+ is based on that. We are building more than 16 different digital channels apps, websites, WhatsApp, marketplaces. We have a great relationship with aggregators that are critical for our business. So during last year and in 2020, we were building our digital capabilities and we were changing the tires of a car in movement in 2020. We consolidate our digital position in 2021. Now we are the leading digital operator of restaurants in Mexico and in the countries we operate in Mexico, we are about 12% of digital sales delivered in Mexico. So we are building our capabilities, and we are growing our delivery channels. These are some of our digital KPIs. The only one that is going down is the average ticket and that is a reason because our fastest-growing channels and brands are Domino's, Starbucks and Burger King that has the lower ticket. That's the reason of the ticket decrease. But in the other syndicators, as you can say, see, you see a consistency growing that is great. Talking about our digital channels as I was talking before, we have our own channels, Wow+, that is our omnichannel strategy. And why that is very important for us? More than 75% of our business is in the stores. So Wow+ is an omnichannel platform that allows customers not only to interact with us in the digital world or there for delivery or takeout but also when the customer go to us to a store, do a kind of a check in. So our operation knows that the customer arrives and know some data from the customer. We are building very, very strong to build our data capabilities to know a lot about our customers and how to interact in a better way with the customer, knowing what they do, what they want and to predict next best offer and many other things that we are building with Wow+. Also, we changed last year in 2021 our loyalty program. We changed our platform from Oracle to SessionM. That is a company owned by Mastercard. So now with this new technology, we are ready to provide a great experience to our customers with gamification and different capabilities to surprise our customers. And we're still delivering a great experience to them. On the other hand, we have another omnichannel platform right now that is Starbucks where the customers not only can interact with the brand in the store, but also at least in Mexico, they can order for delivery, take out our -- and car pick up in the same. And that's great because now we are crossing all the moments of the interactions with the customers. So we can provide them a really omnichannel experience. On Domino's, we also have a WhatsApp channel where we have processing more than 100,000 orders last year in the last 3 months. So we are really happy with these results. And the channel is growing on very fast. On the other hand, we have a great relationship with the aggregators Glovo, Uber, Rappi, DiDi and all the players in the countries where we operate. We have strong plans with them to develop great experience for the customers and not only based on the delivery area, but also in the offline business. We are kind of agnostics in terms of working with aggregators and with our own channels. And in some cases, we are better like in Domino's with our own channels and in others, aggregators are the leaders. So we work with them to provide the best experience for the customer. Our goal is to stay where customers are. And if the customer wants to order through Uber Eats or Glovo, it's fine. What we have to guarantee is to provide the best experience. And also we are developing new channels, not only what's up, but others like teams with Microsoft. So imagine that you are in a meeting you can order from now on your coffee from Starbucks, from Teams, okay? So what we want is to say where the customer is interacting with us. We also are working very hard to say where our future or present customers are like in the e-games. So we are trying to do many different things with companies that are in this field, also with Amazon and in particular with Mercado Libre trying to develop new channels because the customer now is everywhere. So we have to assure -- the best experience where customers are [indiscernible] Prime Video, Netflix, Mercado Libre and other platforms. They are our customers, so we have to stay there. To finish for us is vital to think in a G-local way. What is that to be present in the markets where we operate, but also to think global, acting local. So what we are developing our platforms to centralize on one hand, the development, but on the other hand, to provide the best experience to each different country. Our idea is to have the best platform possible for each country with the same development. So now we are ending our local model passing through the G-local strategy, building the global capabilities and our North Star is to build our hub model that I'm sure that it will be great to provide the best experience for our customers, providing us also better improvements in terms of platforms, technology, management and so on. So to finish, all of that is possible through the data. We are building really strong data capabilities because for us it's really key to understand our customers, where we are, where they are, what they are doing and with the data to offer the best experiences. So basically, it's what we have right now, we are working really hard to build the Alsea of the future based on data and to be the major player in the digital transformation in the food and food tech environment. Thank you very much. And I pass through Rafa, again. Thank you.

Thank you, Dario. So for the next years, we are focused to increase profitability and returns. As you can see, the return on investment of some of our brands like Domino's and Starbucks and Burger King, if you compare with the 2019 returns, it's almost the same, but in Casual and Family, we lose a lot of profitability in those brands. So our target is to increase returns for the whole company. So that's why in 2022, we're going to open mostly in Starbucks and Domino's Pizza. So around 75% of our openings will be Starbucks and Domino's. And out of that 75%, 60% will be a Starbucks and 40% Domino's Pizza. Also, our target is to increase the returns in our Casual and Family restaurants, just to be back in the returns that we used to have before the pandemic. Also, we closed the units that we were losing money. So we closed between 2020 and 2021, close to 240 units, the ones that we were losing money. So that also will increase our returns in the company. In January, we decided that Europe was open to issue a European bond. So the target was to increase the duration of our credits. So in December, we had a duration of 3.8 years. So with this, issue of this bond, we increased from 3.8 to 4.2 years, the duration of our credits. The breakdown, Mexican pesos [indiscernible] and euros 37%. Also, the long-term credits increased from 92% to 98% and the fixed rate from 66% to 80%. If you can see the maturity that we're going to have in the next years, we can pay these amortizations of the credits, and we are going to do it to deleverage the company. So around MXN 1.6 billion in 2022. MXN 1.7 billion in 2023. Also, we think that with this deleverage of the company and the increase of EBITDA, we think we can achieve an investment grade. So we think we can refinance the U.S. bond with a better cost and also to increase the maturity of our credits. I'm going to give you a guidance for 2022. So we're going to open corporate units between 170 to 200 new units. As I mentioned, 75% of these units is going to be between Starbucks and Domino's Pizza in all of our geographies, between 50 to 60 subfranchisees also, we think we have a huge opportunity in some of our countries with Domino's Pizza and [indiscernible] with the Starbucks as subfranchisees with a capital expenditure of MXN 4.8 billion. I'm going to give you the breakdown after this slide and some numbers. Pre IFRS 16, EBITDA growth of 25% and with a margin of a little bit higher than 13%, that is 100 basis points better than the one that we had in 2021. Gross debt, we're going to be able to be in 3.8x. So we are coming from 4.9x. So we're going to be a 3.8x growth debt EBITDA and with a return on equity between 11% to 12% from 6% to close to 12%. And post IFRS 16, EBITDA growth of 20%, margin of higher than 23%, gross debt-to-EBITDA 4x, we came from 4.5x. So we're going to be lower to 4x and also return on equity between 11% to 12%. Revenues growing higher than 20% and same-store sales versus prior year between 15% to 19% same-store sales growth. The breakdown of this MXN 4.8 billion, but a 45% for Mexico, 37% for Europe and 17.7% for South America and the breakdown openings and remodeling, close to 58%, maintenance, 26%, technology, 10%; and other strategic projects, 5.5%. So I'm going to leave you again with Alberto for some closing remarks.

Thank you, Rafael. Well, just to finish before the Q&A, I like this slide because obviously, it represents exactly what we are. I do believe there is a great opportunity to win for Alsea, you as shareholders and the company as a whole and the brands we represent because we have proof that we have a very resilient business. We have a very good, diversified portfolio of brands, of sectors and our geographic footprint has proved successful, especially in this crisis, as you saw in our numbers of 2021. That continues to grow. As Fernando said, we are going to focus on growing our organic growth in the markets where we are with the markets investing primarily in our most profitable brands like Starbucks, Domino's and other international brands and growing same-store sales, the opportunity that we see, but because of the space that we -- that the pandemic has created with the competition, I think [indiscernible] in a very privileged position to do that. As you saw, we are focused on technology. That's why we ask Dario to present to you guys what are we doing, how we are doing. I think, again, having the opportunity to see the technology of our franchisors globally put us in a position to lead the technology and a convenience opportunity for our consumers. It's going to be very hard for our competitors locally, especially the small ones to compete in technology with us. We are important for the aggregators. We are working very closely with them, even in brands like Domino's, where they represent, in some cases, 10% to 12%. We do believe there is an opportunity to continue that trend, and we are very well positioned to that. So we see a high growing industry where we are in all our markets. We are, today, as you saw, with more than 1,000 stores in some cases of our franchisor, we're a strategic partner for them. They are very supporting to assess the strategy and growth, and we plan to capitalize on that in all the brands that we represent for so many years. Our shared services model has proved more than ever successful with all our geographies. As you saw, we have been able to reduce G&A. We've been able to benchmark the best practices in each brand, in each geography and have been able to capitalize on those to get better margins throughout our portfolio. Our proven record, say, today with more than 30 years, not only the company, but also the team that is running the company. We've been here for 30 years, and we know how to do it. We've been improving the brand successful in the different crisis, and I think that has a lot of value for the future. And [indiscernible] a very corporate governance-oriented company. I'm leading the Board. As you saw that in the ESG goals, we have a goal to increase the participation of women. We already have 2. We have also the goal to increase the independent members of the Board, and we definitely believe that something not only that we have to do because ESG, but that's our culture, and we're going to continue that. And in the graph on the right, you can see that the brand or the stock has performed since April '20 to February '22 as of today, probably 205% growth. Obviously, this chart shows the minimum that we got. But if you saw -- if you see all the high history, if we're able to achieve the ones that we have set, I have no doubt that this will be a great investment for our investors, and the returns are going to be very good. So again, we are open for questions. Thank you for your participation and thank you for always being very close to us.

Alberto, Fernando, Rafael and Dario for the presentation. My question is about your existing covenants on the remaining debt. Do you have a limitation on the -- still some limit to the CapEx that you can invest? And what would be your appetite to issue shares in order to quickly delever and accelerate growth?

Yes. We have some covenants with bank credits and also with the [indiscernible] of the bonds. The covenants are a minimum liquidity MXN 2.2 billion. Also gross leverage for this 2022 around 5.8x, for 2023, 4.9x. Yes, we have our restrictions in terms of CapEx. So the amount that we have in terms of restriction, it's close to MXN 4.8 billion for this 2022 and almost the same amount for 2023. But if we have a better EBITDA than the one that we have agreed with banks that happens in 2021, so we can increase the amount of CapEx. In 2022, the restriction was MXN 4.6 billion. And we have a better EBITDA result around MXN 170 million, so we could increase to MXN 4.8 billion. So for -- I think for 2023, it's going to be from MXN 4.8 billion to MXN 5 billion for 2020 -- for 2023.

I can take the next one, Rafael. Regarding issuing shares, first of all, we don't need to do that. We don't need to think about a follow-on right now because as Rafael said, we do believe that for the plans that we have, not only the CapEx is enough even with the restriction on the governance of the banks to open 200 to [indiscernible] stores, including our licensees, which is really the average that we were doing even pre-COVID. Second, as you saw, the debt is completely refinanced and if you see -- if you saw also the debt net EBITDA will be less than [ 3.5 ] by the end of 2020, if everything keeps looking at it is in January and February. And also, as Rafael said, we closed the year with more than MXN 6 billion in cash. And if you include acquisitions that we did in Europe, is MXN 7 billion, that's about 20% -- a little bit more than 20% of our debt. So we think we are in a very strong position. We are not seeing any inorganic growth. But as always, Alsea is open to generate value to our shareholders. So if there's any opportunities in the future, and we need to issue some shares to do a follow-on for some reasons, we will definitely [ have it ready ]. But right now, we're going to focus on same-store growth. We're going to focus in organic growth, and we're going to focus on closing a 2022 with debt net EBITDA that Rafael presented to you, less than 3.5x. And hopefully, we start 2023 in -- obviously, in a better position.

And I think that the deleverage of the company is going to be pretty fast because of the growth of the EBITDA that we are projecting and also the prepayments or payments that we're going to make in '22 and '23 or the maturity of the credits.

Thank you, Rafael and Alberto. And congrats on the recovery process.

This is Alan Alanis with Santander. Thank you for hosting the question. Sorry, I think I'm losing the microphone here. The obligated question, right? Fernando, the cost inflation, food inflation. We're seeing your suppliers of bread, soft drinks, meat, raising prices in the high single digits, double digits? How much are you going to pass to the consumer? And how much do you expect that in terms of affecting your elasticity? And what is the risk for your guidance? That would be the first question. And the second question would be for Dario regarding technology. How are you using data right now in the present? And how do you think you will be using that data in the future in order to enhance the competitive advantages of Alsea?

If you want to -- I'm going to start with the first question about the cost inflation. As I explained during the presentation, of course, the instability worldwide is a challenge for all of us. And it's true that when we're talking about cost inflation in the commodities that we are working is in order exactly to prepare the company for the sourcing of suppliers to purchase in advance the management of the evolution in the markets in order to guarantee that they impact for the customers as lower as is possible. Of course, including we have started to work in 2021. In 2021, If you can check in our P&L, the evolution of our cost management, COGS of the [ manager ] of the company has been very positive. And it's mainly because we are working in advance. And additionally, to this, all the work in the target in the company to improve the efficiency, to improve the productivity in all our added value chains is the warranty to try to reflect to the customers the lowest increase that was possible in a situation that probably we cannot know perfectly today. Till now included in January, February, the management of the cost has been very positive, including not increasing in prices in order to guarantee that we are preparing the company in order to improve the customer expectation, the customer satisfaction that we consider that is very important. How it's going to impact in our P&L? Finally, something that is -- we are working in advance, but it's very tough to explain why? Because when we're talking about the commodities, finally an increase in the commodities sometimes is reflected in prices. And this is affecting the ticket, the frequency because finally, the inflation is not just affecting to the consumption, or the commodities is affecting including to the salaries. For this way, the target in the company despite the management of the purchases is focusing the management of the efficiency because it's the way to guarantee that the customer is going to take advantage of this policy. If you want, you can answer about the technology?

Sure. Regarding the data, for us, data is key to understand the customer journey. We are a multi-brand company. So the customer can start with a coffee of Starbucks in the morning, have a burger in the -- for lunch and then order a pizza for dinner. So if we can understand the customer journey and to provide the right product for the right channel at the right time for the customer is key, and that is vital to do that. So what we are doing is, build this data layer to do that. And we are investing lots of money and efforts to understand our customers because as Fernando said, what we want is to increase the frequency. And to do that, the only way is that.

Just to add one thing. When we're talking about the data, we are talking about the front and the back. We are talking about the operational data, the better knowledge about operation in order to improve this productivity, this efficiency that I explained before. And at the same time, you remember in one slide that we were talking about the marketing management. So marketing, the data allowed to you not to offer everything for everybody at simple, is to try to satisfy your expectation and what you want, what you need, what you are expected from Alsea. And in order to guarantee that this marketing strategy is a warranty through the data to offer that every customer that -- finally, all of us, we are different, are expecting from all the different consumption or moments of consumption. That is not the same during the day. It's not the same for the habits, for experience. And the data is managing not just in order to have the data is to put the data at the service of the commercial activities and operational activities.

Álvaro García, BTG. On the guidance for 2022, I'm curious to see the opportunity for Casual Dining specifically. So maybe if you could talk about what you're underwriting for growth of your Casual Dining brands maybe relative to 2019 to see how much of that 20-plus percent growth in EBITDA comes from those as opposed to maybe a normalization or some pressure of Starbucks and Domino's?

In the fourth quarter, Casual Dining were close to the numbers of 2019, except the Family that it's Vips in Mexico. So we are predicting that Vips is going to be close to 95% at the end of 2022. So it's going to increase from 80% that it's right now, 80% versus 2019, to close to 95%. One of the main things is that we expect that in the second quarter, the corporate offices are going to be not at 100%, but they are going to be back. And our clients in Vips are mainly these corporate offices open. And also -- of course, our main drivers because of the openings that we are going to have, it's going to be Starbucks and Domino's Pizza. As I mentioned, the same-store sales versus 2019 were up -- some of them like Starbucks more than 30% and the other one is 20%, 25%. And in terms of the other geographies, LATAM is performing pretty well also in terms of all of the brands. Colombia is performing pretty well. Argentina is not losing money. So it's having a positive EBITDA. And Europe also, it's going to be close to 95% in terms of sales and we are there this first quarter. So yes, Casual Dining is going to be better than the first quarter that we had. But in the fourth quarter, we are close to the 2019 sales in almost all of our brands.

Great. And just one follow-up on Vips. Specifically, I saw you mentioned -- I noticed you mentioned sort of the Vips Mexico holding capacity, but I didn't see a Vips Europe holding capacity. And my understanding is you're a little bit more excited about growth in Europe actually than Mexico, maybe I'm wrong. But if you could talk about the growth opportunity for both and maybe real estate opportunities now for both would be great?

Do you want to take it, Fernando?

Yes, very fast. In order, it's true that the slide that we introduced is mainly Vips Mexico. In terms of investment in our strategic plan, the distribution in Mexico represented 47% of our sales. And we are dedicating the 47% of the investment. So finally, it's very compensated. And including the potential of our non-Vips and Casual Dining is very [ accident ] and demanding during 2022. Why? Because probably we have more spaces in order to grow and to recover something. And secondly, because the evolution of the model is in all our geographies in the case of Vips, but the possibility of growing is quite similar between the distribution of sales and investment. It's -- casually, it's well distributed in order to guarantee that the growing in the company is symmetric because we have a big potential of development in all our geographies. It's not just in one geography.

Let me complement that if you want, Fernando. Remember that when we acquired Vips in Europe, which is not really Europe, it's Spain. It's a brand that has been in that market for 40 years or more, and it's a very well-positioned brand, very strong in the market of Madrid. And then we're starting to grow corporate and franchise outside of Madrid. So yes, we have still a good market holding capacity to [indiscernible] in Spain. But I do believe that the major growth that you will see in our European market will be with brands like Starbucks, where we have a bigger market holding capacity because the other acquisition that we did in France and Benelux as well as Domino's in Spain, which the brand is less penetrated as [indiscernible] was penetrated. But if you ask me, and I'm going to just think loud here [indiscernible] I don't know the exact numbers about, I think Vips will be 60%, 65% already growth in Spain. So we have probably another 35%, 40% more to grow.

And we are projecting for 2022 openings in Spain, around 5, 6 new Vips in Europe. And in Mexico, until we have the returns that we used to have in 2019, we're going to start opening new Vips in Mexico. Even though we have a market holding capacity opportunity until we have the returns, we're going to start opening new Vips in it.

This is Antonio Hernandez from Barclays. Thanks for the event. Actually, 2 questions. The first one is I just want to make sure that all the losing profitability units are already closed. I mean you don't have any other closures plan? And the next question is regarding the digital strategy. Can you give more light on specifically Wow -- on the Wow+? And also on the -- I think you mentioned gamification, if you can mention a little bit more on that.

Yes. Almost all of our nonprofitable stores are closed. We leave some stores that were in some places that weren't open 100%. So we leave the opportunity of those stores to see if we can achieve the amount of sales and the profitability that we need. But we are talking about 10 stores that we are going to wait until these stores is still with the demand that we need [indiscernible] like some schools, some offices and so on some places like that. But mainly, we closed all the units that we were losing money.

And regardless, Wow, Wow is our backbone of the digital transformation and why? Because what we need is to understand what customer does online and off-line. So first, we migrate our technology and platform to a new one that is really strong. On the other hand, we start with delivery and takeout to have our own aggregator but with our own loyalty program that is giving back to you 5% of each -- in money for each order. And then now we start the rollout for the off-line installation of Wow. What does it mean? The idea of interact with Wow, not only for the delivery but also in the restaurants. So now customers can do the checking, as I told you before, the idea is that the operation knows the customer that arrives, their name, their birthday and how many points they have. In the future, our idea is to provide the operation information on what to offer to the customer as the next best offer based on data. But on the other hand, in the customer side, the customer should choose if the customer wants to interact with the waiters face-to-face or [indiscernible] order with the app, pay with the app and have different features. And in terms of the gamification, now what we have in Mexico is a kind of batches, [indiscernible] if you are familiar with the batches. So for example, if you are a recurring customer of Cheesecake Factory and your batch is -- your [indiscernible] is to have 25 visits in the year to have a free meal or something like that, we are experiencing with this kind of batches. And we are doing a kind of evolution of Wow to provide these kinds of experiences to the customers. And basically, it's what we are doing is a multi-brand platform. So also what we are pushing is a cross-sell in Wow, not with multi-brand right now, but a cross-sell. So if you are a customer of Starbucks and we noticed that maybe you will be a customer that could, I don't know, either Cheesecake, we will offer you -- to you at the right moment or the right time in the right channel, a Cheesecake for you. So basically, it's what we are doing for Wow. And again, we are building a strong back end to provide and serve different front ends, not only for Mexico, but also for the different countries when every country will be ready.

One thing that is quite important is that in the company, we trust in the omnichannel. Omnichannel, it's not digital or it's not delivery versus [indiscernible]. That is the typical language worldwide that we are thinking is that the customer is the same customers that want the same treatment as an experience. It doesn't matter if you are ordering at home, or you are entering in one of our restaurants. Basically, Wow that -- this is the transversal system that allowed to us to be multi-brands and multi-experience and the possibility to have a connection with the customers despite that you are just digital or you are as [indiscernible]. This is the way. Finally, all our relationship in the different brands is through Wow. In the case of the digital transformation, it's manageable to have 17 or 11 different App on the telephone. Nobody is going to have this. But we need is exactly this channel that was common for different brands, different consumption moments, different expectation for the customers in a same brand that [ same platform ] that allowed to us to manage all this experience on and off.

Yes. And as Fernando said, something that maybe is common in other industries, but now we have the golden record. So we know and we have this traceability of each customer online or off-line that is key for us.

Jeremy Kahan with North Peak Capital. Can you talk about the opportunity to improve margins in the sort of medium term, both as you scale and get bigger and also maybe leverage some of the technology investments, I guess. How do you expect margins to progress over the next sort of 3 to 5 years?

Okay. We are projecting to improve margins and go back to the 14% pre-IFRS that we had in Alsea mainly came from the better performance of the G&A. And also we are expecting in 2026 to be close to 14.5% prior IFRS 16. As you saw in 2022, we are going to be a little bit higher than 13%. So we expect to increase to 14.5% to 2026, mainly from the G&A expenses that we have.

Can you comment on the performance of the same-store sales between traffic and ticket? How is it performing? And how is it driven? And the profitability difference of the online or delivery operations between the inside operations?

Well, in terms of same-store sales, we have some brands that are positive in the fourth quarter in terms of orders that it's Domino's Pizza, the Starbucks and Burger King. There're some things that are not easy to account because of the delivery part. We have a percentage higher than the one that we used to have. Without Domino's Pizza, it's a little bit higher than 10%. So the ticket is higher, but the orders are lower because it's just -- for us, it's just one order, but a pretty high ticket. So in the other brands, the same-store sales growth mainly came from ticket, but it's not an increase in prices. It's an increase also in the number of units that we have in each ticket. So this is -- right now, this is the thing in 2021. What we are projecting for 2022 is to have positive orders around 1% to 2% in terms of orders and not only by ticket. This is the -- in terms of same-store sales. And it's different in each geography and in each brand. But this is the average that we expect for 2020 -- 2022.

And then profitability of the...

In terms of profitability also because we already have the inside sales in the same amount that in 2019. So all the home delivery sales are an increase of sales. So -- because we increased prices in home delivery, close to -- in average, close to 15%. So with that, we almost mitigate the fee that we have to pay to the aggregators. So it's very profitable when the inside sales already covered our fixed expenses. Also everything without the cost of goods, everything goes to the EBITDA. So it's an increase of EBITDA right now that we have the sales inside the restaurant that covers the fixed expenses.

And just one last question. Can you comment a little bit on the dynamics expected for the different markets in this year? And what is like the key thing that the customers are liking the most of the changes you've made since the pandemic. And regardless of pandemic [indiscernible] like the key element customers are liking the most of the company that you should remain with the rest of the days, let's say.

[indiscernible]. Yes. The most important is that I hope finally this pandemia is finishing, all of us, we are happy. That is true is that the habits and expectations for the customers worldwide has changed. Now it's much more than money -- demanding because the customer requests innovation, surprise, a nice shopping experience of the restaurant, where [indiscernible]. And one thing that is important is that there are some changes in the habits from the consumers that we are not expecting that change fully now that we come back to relative normality about e-commerce, for example, delivery worldwide. It's true that the target in our strategic plan is that we don't want to decrease the participation of the delivery after the [indiscernible]. We want to continue to [ grow in]. Other thing is that, as you said, has to be in a healthy growth, profitable growth. And of course, after this pandemia, we are working actively in the company in the last month in order to prepare to define our value proposition in terms of delivery. But of course, you are expecting to be treated exactly in the same condition because a customer of Alsea doesn't mean that the experience has to be the same in all the moments of consumption. And in terms of delivery, we are working really to guarantee that this value proposition is much better in terms of packaging for [indiscernible] in terms of quality of the products when you receive at home, okay? And the most important note for the customers is mainly these surprises. We try to be very dynamic, very innovative in this capability to surprise the customers to innovate to the customers in order to guarantee the best relation. When we're talking about [indiscernible], it's not because we are talking about the [ queries ] because we're talking about this experience that is today much more demanding. After the restriction to the mobility, it's true that the customers are expecting probably all of us to come back to relative normality. We want to visit our restaurants by presence. But it's true that now the customer is much more demanding in terms of safety measure inside the restaurants, quality of the service, the [indiscernible], of course, that is very mandatory for all of us, but mainly to be very -- the customer [indiscernible] the moment of consumption is not the same. [indiscernible] the same, meeting with the friends. And this kind of experience in the different moments of experience that we are offering to the customers, we are multi-brand, and this allowed to us to improve the pocket share in front of the customers is now much more crucial. And mainly this omnichannel relationship is much more crucial because the customer is much more demanding because probably the life [indiscernible] all of us to learn about this new situation. The target in the company is very simple. We have to work 5 minutes in advance that the expectation for the customers or the expectation from the markets in order to guarantee that we have this loyalty with the customers and this interrelationship that is the guarantee for all our strategic plan and the profitability trends in the company.

Yes. To give you an easy example, year and a half ago, customer just can order for the digital channels just for Domino's and a little more. Now the customer has not only Domino's, but also Starbucks in an omnichannel platform, Wow+, in an omnichannel platform, Whatsapp, websites. So we are providing convenience to customers. And the customer is, as Fernando said, whatever, so we have to offer the best experience in every channel. We build already these capabilities to provide this experience, and we still grow -- working to provide a better experience on and on, working with aggregators, working with another key partners and with our own capabilities, not only in Mexico, but also in the other 10 countries where we operate.

And also because 90% of our sales is in the restaurant. So to have innovation, to have the client with a pretty good experience, it's also one of our targets.

I think we still have some questions from the webinar. So if we can open the line.

This is Rodrigo Alcantara from UBS. I have one for Fernando, one for Dario and one for Rafa. For Fernando, just curious your thoughts on this month that you have been here at Alsea. How do you see the Vips brand in Mexico evolving over time? I mean, it's not that the Starbucks, Domino's and Burger King have been amazing brands for you guys. But on the other hand of the question, we have a volatile -- we have had a volatile performance at Vips, right? So just curious your thoughts on how you see the brand evolving perhaps like more like a Family Dining concept to a Fast Casual or any sort of that evolution. So that would be my question for you, Fernando. And I can ask my other questions to Dario and Rafa then later.

Okay. Thank you very much for your question. Firstly, when I had the opportunity to belongs to the Alsea company, I knew before that is a big company, a leader in the industry. When I receive to -- when I had the opportunity to enter in Alsea, firstly, we are a very dynamic company. It's a surprise for me in a multinational company, an international company as is Alsea. I will have a big opportunity to continually be directive and easy going on, the things that we are doing. Alsea is a company quite close to the decision-making in the business, quite close to their restaurant in order to explain -- in order to make much more close to the customers, the decision-making process. And I consider that is one of the main advantages or competitive advantages for the company because it's not as normal. Personally, consider talking about the Domino's, Starbucks, Burger King, we have a big potential, great potential worldwide and, of course, in Mexico. And we are investing so much despite these numbers, that is true that in terms of expansion, in terms of development, we are quite focused in the 4 brands or main core brands in the company, but with big investment in all the brands that we added and including worldwide with a number of openings so relevant. That is true is that our target in the short term is to be quite focused in the sales per meter square, in the efficiency, to guarantee that in this casual brands, we are recovering or we are coming back as we are doing us today to better number than 2,000 -- pre-pandemia 2019, in order to offer a much more consistent offer to all the customers. And I consider, and we are working on this, but we have a great opportunity. And I'm not thinking that the customers is going to decide one side or the other side of the fence. It's not true that we want -- finally, all the customers is everything if it's possible. And in terms of casual brands, we have a deep evolution in term of commercial model to guarantee that really we can support all the expectation from the customers for different moment of consumption in casual model between breakfast -- all the dayparts, breakfast, lunch, dinner that allow to -- all the different brands to have a complement offer that allow to us [ dilute ] cost but allow -- that finally, we are much more profitable. And additionally to this, to be much more efficient in terms of pocket share that we have in front of the consumer.

That's great. And I mean you mentioned a specific strategy there to make a reference to build smaller restaurants, right, for a case of -- be it as an alternative to improve sales per square meter. So just curious, I mean, is there any plan B should traffic to those corporate locations never normalize? I mean what would be a plan B for you, Fernando, for those units that depend on those regions?

Including in these terms, it is true that all of us we are expecting that finally, the restriction to the mobility is going to be finally changed as it's changing today worldwide. There's no difference in Mexico, in Spain, France, in South America. We are working in all these stuff, the relevant number of stores with much more weight of the offices and convenience to the moment of consumption to develop different alternative for the systems. When I said the alternative, finally the position is a position, but how we're attracting different moment of consumption in these kind of stores and including working in that we call clusterization of the stores in order to have for the same brands, the same value proposition but different adaptation to the expectation of the different customers. It's true that it's affecting finally the restriction of the mobility worldwide. But if you see the last numbers in the last quarter, in the fourth quarter 2021, was much more profitable, was much more better and defined that finally, this habit of consumption is helping to the normal or the evolution of the business and including -- finally, we're mixing of consumer some of the habits for the different stores. And this is true. This is logical in all the industries. This is obvious. But including for these stores, despite that, we really belongs that certain normality finally is happening that we are preparing these surfaces, these spaces in order to complement the value proposition to attract different customers that probably before was not possible.

That's great. And a very quick one for Dario, just on the digital. I mean we discussed a lot about knowing the customer. Just curious about the here on using data to -- for price architecture, price strategy. I mean what are the latest developments that -- or how you have used data on this front, Dario?

Yes. It's a very interesting question because we are working on that right now to provide to the brands with the data and the information, the right product mix for digital channels, but in the future to the other channels. So what we are trying to do right now is to understand the customer behavior, collecting data. And with this data, provide this information to build the right menu for each brand, to be more profitable and to reach the right customers.

Great. And lastly, Rafa, on the EBITDA margin guidance '23, slightly above pre-pandemic levels, right? Just curious here, the roll-off of delivery sales as an incremental channel, meaning higher operating leverage for you, guys. How -- can you comment on your expectations on delivery penetration for 2022? That would be it.

Yes. The percentage of delivery that we are projecting for 2022 is around 9%. So before this, in some quarters, it was higher than that. We were close to 12%, 13% without Domino's Pizza. Now with Domino's Pizza, it was around 25%. So we are expecting around 9% participation in terms of home delivery. But as I mentioned, when we have already covered the fixed costs or the fixed expenses inside our restaurants, everything of the home delivery is incremental. So the prices of home delivery, it's higher in average, around 15%. With these increasing prices, we mitigate the fee that we have to pay to the aggregators. And we only have the cost of goods. In some brands, we have to pay royalties and advertising, but it doesn't hit us in terms of marginality, the home delivery participation. I will say that it's the other way, it help us.

Just a follow-up, Rafa, on the financial side. You said that you expect to be able to pay down debt on maturity. Is that for 2022 and 2023 or the whole calendar?

'23? MXN 1.6 billion, '22 and MXN 1.7 billion in '23.

[indiscernible]

Yes, not all. Maybe we can also pay around the same amount, MXN 2 billion. But if we can refinance the other part, yes, we would like to. And because these are the bond -- the U.S. bond that it's a 5-year non-call 2, we can refinance that bond in 2 years. As I mentioned, we have a deleverage of the company. We can refinance the bond with a better tenure and with a better cost than the one that we have here. So we would like to refinance the U.S. bond also.

That level of leverage means investment grade for you?

Lower than 3x.

Including in the strategic plan, our strategic plan, of course, that is not so detailed in the presentation, the cash generation is crucial. Cash generation that compensate the CapEx, of course, and including all the payments that we have to do it in order to improve the asset balance sheet. And initially, today, including the last end of the cash, as explained Alberto and Rafael in 2021, means that we are cash creator. And this cash creation is the way to guarantee a better -- everyday better structure in terms of balance sheet, and at the same time, the possibility to obtain a good ROI for about our investment and to guarantee the efficiency of the investment.

We have a pretty nice problem. We have almost MXN 7 billion in cash. So we have to decide what to do and what is better in terms of return for the company.

Next question comes from Rodrigo Echagaray.

Congratulations on the execution throughout a very challenging time. And I guess my question is related to the following. If we assume that the trends on the delivery continue as robust and as strong as we've seen, give or take, and given that with the price increases on the delivery, you have been able to offset some of the fees paid to the aggregators. Arguably, the return on investment of certain brands like, obviously, Domino's, Starbucks and the brands that travel could potentially be higher in the coming years versus pre-pandemic because there is no cannibalization, I guess, on the delivery. And so if that's the case, it would seem like the gap in terms of attractiveness of the formats would widen relative to the casual dining formats even though there will be some recovery, of course, in the traffic. So I guess my question is, would it make sense in light of these trends to be perhaps more aggressive with the soft franchising on the casual dining side, especially on brands like, for example, Vips in Mexico.

Okay. About the delivery?

Yes. Well, yes, we have, as we said before, a great relationship with aggregators. The commissions that they charge us are not fantastic but are good. And we also do marketplace with -- in brands, with Domino's and other brands. So we are happy on that. But let me clarify, delivery is just one side of the digital. The other is the in-store. And for us, the key is the understanding of the customer with the data. So we see one customer online and off-line. And our goal is how to increase frequency between the -- among the different channels, among different platforms. And for this reason, what we are building is the capabilities, for example, as I told you before, is Starbucks where the customer now can interact with us not only for the delivery takeout or car pickup but also in the stores. So basically, is the reason to increase our capabilities, and Wow+ is keen in our digital transformation.

About -- your question about sub-franchise. Finally, the sub-franchise for us is our operational model. It's not a commercial model. But in term of operational model, we trust on this formula. We consider we have big opportunities in the market, big opportunities for the better management, of course, adapted to the possibilities and making a consistent formula that has to be a benefit for all of us. In this case, our partnerships, sub-franchisees, and of course, the company, in term of where, how, in which condition is much better to operate with a formula with another. That is true is that we have including intensive plans inside the company, not just -- because today, in the expansion plan is included this expansion in sub-franchise in Starbucks -- including Starbucks in Europe, obviously, in Mexico, in LatAm. But despite to this, we consider -- that we believe is that we have to go faster, faster and most aggressively in order to combine the corporate stores with a sub-franchise model in the cases that was much more profitable for both part, okay. So really it's already included in the strategic plan. And additionally to the strategic plan, we are working in the company not to achieve this plan, including to overpass this plan and are already growing when it was possible and when finally was a sustainable formula forever. So the franchisee has to win money, earn money. We have to earn money.

And I guess maybe just a conceptual question on the delivery side. So would it be fair to say that the return investment of certain brands that travel well where the delivery is high could potentially have higher returns post pandemic than pre-pandemic given the delivery trends we're seeing? Is that a fair assessment?

Really, it could be. Again, before the COVID-19, we didn't have delivery. So now we are building these capabilities, and we are building our own profitability in this channel. We hope so. But -- and we are betting on and on, on doing that, partnering with the aggregators with our -- and also in our own channels and with other channels that we are developing right now in other verticals.

Yes. And I will say that if I -- as I mentioned, if inside the restaurant, we achieve the sales that we need to cover the fixed cost. For example, P.F. Chang's is one of the brands that delivery, it's pretty high. It's close to 30% in P.F. Chang's because of the product. The product delivers better. So yes, I will say that it must increase the margins because of the home delivery because we cover the fixed cost. We increased the price for the product for home delivery that mitigates the fee from the aggregators, and everything goes directly to the EBITDA. So yes, I will say yes.

Just a quick one on aggregators in Europe. In Spain, specifically, there is regulation passed on sort of labor restrictions or labor requirements impact your brands this year and going forward and what sort of risk do you foresee on that front?

Yes. The challenges happens on and on, and we have to adapt our business to these challenges. We -- again, we work with them, and we are looking for options to grow up the channel. In the meantime, that regulations are more challenging and not only in Europe and in other geographies, too. So yes, we see the channel growing even with the new regulations.

Next question comes from Ulises Argote.

This is Ulises Argote from JPMorgan. So I have 2 quick ones. One is actually a follow-up there on home delivery. But I was trying to get a sense here of what is actually like a sustainable level maybe on the long term that you see for that 9%, Rafa, that you mentioned in home delivery for 2022, maybe how that trend looks like in a couple of years' time? And the other one is maybe how much higher can penetration go with the system and the structure that you guys currently have in place. The other one is kind of related to the KPIs from the digital side and the relevance of data that you have obviously mentioned. So any details that you can share us here on how many of the current transactions are actually being identified? And how much are actually leading that information flow through your data lake?

Rafa, if you want to...

Our target is to maintain this 9% in the coming years. So that's why we are doing these digital platforms or omnichannel platforms. Because with the well flow, the percentage of participation in home delivery, it's still pretty low if you compare with the aggregators. So we think we can achieve this 9% participation of home delivery in the coming years. And it's one of our targets also because people haven't changed. When you decided not to go out to eat in our restaurants, we have to be there and we have to have our products in -- everywhere they -- so we want that they can find us everywhere.

Well, Rafa, can I make a comment, if you don't mind? This is Alberto. I really like the question that somebody has mentioned these questions a couple of times about if the brands can be more profitable because of this new convenience, customer experience that we discover in the pandemic. Well, first of all, I think we knew that convenience because we've been in Domino's 30 years, which is a delivery business. So we know the business well. Second, we also know the business well of sub-franchising because we have done that in Domino's for 30 years again. So I do believe there is a huge opportunity now more than ever to capitalize in 2 things, our experience to sub-franchise and sublicense some of the brands that we have. As you probably know, we've been able to sublicense now Starbucks in France. That's the way we bought that company early 2019. So the opportunity is there. We plan to grow with that. And second, there is no doubt that we can capitalize in this new convenience delivery pickup omnichannel as Dario said. If we maintain or we recuperate the volumes pre-COVID in our restaurants, plus the 10%, 15%, 20% or 30% in term -- in the case of P.F. Chang's delivery, and we are able to maintain that, which I think we will, for 2 reasons. First, I think that the customer is there for that convenience. We will have the technology to be the leaders in the market, and we are working and the aggregators are working to decrease the timing of delivery for those products. I do believe that we're going to face a business where we're going to be delivering products in 15 minutes. So that convenience is going to be hard to win by other players. So my personal opinion also is that, in the case of Starbucks, for example, that we have to be able to maintain both the experience in the store and that effectivities in the delivery. So we have to balance that and do both. If we do both at the same time, which I think we can -- because remember, the difference from the U.S., the volume in our stores is still a lot to -- for better experience and to dine in. So I think the opportunity is huge. We are trying to capitalize that. And for example, in Starbucks, I think we should aim to be more than 10% delivery in the future, but maintain the orders at the store level and the experience in that store. So I think the opportunity is great.

Yes. And as Alberto and Rafa said, we see one customer, online and off-line. And what we are doing right now also is to acquire digital customers. Digital means that have our digital platform, not that are buying on our digital platform. They are interacting with us in the digital platform, through the digital platforms in the restaurants with Wow+, in Starbucks with the Starbucks apps. So understanding the customer, we can drive this traffic online or off-line to increase sales, to increase margins and so on.

I just had a very simple question. My name is Bob Ford, I'm with Bank of America. What do you expect 5% to buy you in terms of the penetration rate of Wow+?

Pardon?

The penetration of Wow, with the 5% back in terms of the value that you're returning to the consumer, where do you think that gets you in terms of the penetration rate of your overall business both on and off-line?

What we see on the cash back, the 5%, is a matter of loyalty with the customer to move the customer to do a next action with us. So giving this money back is a kind of -- is a reward for the customer to interact with us. So what we expect is to have with the customer our next best action. And what the customer looks is to spend money in Burger King with the families. They accumulate this 5%. And then 6 months or 4 months later, they have a Starbucks coffee for free. So what we want is to increase loyalty, and Wow is a matter of aspirational, on the other hand, with these kind of customers. And to finish what we expect this year is to increase our customer base, not to have 2 millions like right now, but to have around 6 millions by the end of this year, acquiring customers to be more loyal with us.

Dario, would you...

This year, it's around 20%. We are far away right now, but we expect to have by the end of this year 20% of penetration at least in Wow+.

Next question comes from [ Jeronimo De Guzman ].

Can you hear me?

We can.

Okay. Good. So maybe I could start with just the market holding capacity input that you gave. Could you give a little more color on how you get to these figures, kind of what factors do you use?

Okay. About market holding capacity, it's true that we make assume, are we? Of course, this is internal exercise in order to understand the capability that we have in each geography, different geography to make expansion over the current format of the stocks, over the current commercial model investors. It's something that is alive because it's continuously growing. Growing why? Because finally, you are defining new commercial models and you are defining the geography and the population inside the different perimeters are changing. Of course, making with this that we try is that much more than, of course, will be a pleasure to define how we are doing and continuously updating this model. This is not a problem. It's a definition for us about the capabilities. In term of presentation about the total capabilities, total space or free space that we have yet in the geographies. In term of development, we are using to define exactly what we want and where we want, including street by street or address or city by city. So it's really an operational exercise and tool in order to do as much more efficient, the investment and the expansion in order the potential of this market-holding capabilities. Today, including the market-holding capability, we have by geography finally, in the slide, is relatively summarized in order to give a total number. And something that is much more important is that it's alive. We are changing already finally. Normally, the big numbers are not changing. One thing compensate to the other. But it's true that if you want, of course, we are further in depth. We are absolutely available in order to try to give much more definition about this in the future, much more in the shorter presentation.

So just to clarify, you're doing this kind of more bottom-up, like more street by street and then kind of aggregating? Or are you doing kind of top-down approach?

Yes. Basically, in term of market-holding capacity, there is 2 ways: one is the total, how many stores in order the population fit in a geography; and the other including with the developmental tools that we are using based in statistic and econometric. Finally, we can define it exactly, which is a potential in every point through geomarketing software that all retailers who are using it and finally allow to us to define exactly what we want and where we want. And we combine this, that is technology with expertise from our operational team when really we are trying to think, for example, in the case of Domino's, thinking in the catchment area in order to optimize exactly the [indiscernible] in this catchment area that we can deliver for every new or existing Domino's. And finally something that we're using normally in other companies. I promise that it's quite common for us to work like this everywhere. And including something that is updating due to this because finally, the population by region is changing. The census are changing. And secondly, including the operational model, biggest space, shorter space, probably clusterization space in all the different commercial model for different brands allow to us to increase, to enlarge or to adapt the market-holding capacity.

Okay. That makes sense. And then just another question, just kind of jumping around. I saw on the returns that you have for the different restaurants, the different banners, I thought it was interesting that Burger King, kind of the sales to investment were up there with Domino's and Starbucks, but the ROI isn't. So just wanted to understand -- I mean, I assume then that margins, but what does it take to kind of get that ROI higher?

Yes. In Mexico, the margins are lower. That's why we have this -- there's return of investment lower than in other geographies. In Chile, the returns are pretty high. In Chile, the returns are higher than 30%. And that's why we are opening more Burger Kings in Chile than we are open in Mexico. But mainly margins in Mexico and some of the things that we are changing, that we changed in Argentina and we also changed in Mexico, are the promotions. We have some promotions that were very -- or they took us a lot of margins because we were almost getting free some of the products. We took it in Argentina. We have less orders, but we have a better marginality. And we are doing the same thing in Mexico, trying to have better margins than others because we have a promotion that were very cheap.

Including something that is quite important in term of Mexico, we are working with a franchisor with Burger King, international Burger King in order to create a differentiation in the value proposition versus the other players. And in order to make it in a profitable way, including in the last quarter, their profitability of our business in Mexico has improved so much, exponential, and thanks to the work of the team, the focus on the customers and the value proposition. And included in this -- during this year -- on this year, we are working in the digital offer in this efficiency, looking efficiency for a value proposition, as common that is, of course, in our case, Burger King that all of us do know very well, in order to guarantee the efficiency and the best offer and experience and digital transformation to guarantee this innovation that always we had in the channel.

Also in that number, Argentina hurt us a lot because of the inflation that we have there and all the restatement that we have to do in terms of the assets that we have there.

We have one more question from Sergio Matsumoto.

Yes. Can you hear me?

Yes. Thank you.

Yes. Okay. Great. And I have a question on the multi-brand strategy. We heard a few times about the focusing on these large brands, Starbucks, Domino's, BK and Vips. And just wondering more on like a broad strategy if there are synergies in working the peripheral brands? Or do you see any opportunities to optimize the brand portfolio? And if you were to focus on these large brands, then would entering a new franchise territory of these existing brands a possibility? Let's say that debt covenants weren't an issue, like would that be a possibility in the medium term?

Sergio Matsumoto, thank you for the question. First of all, I think that not now, but -- actually, the last time we were here in Alsea Day, we mentioned that we had too many brands that our portfolio has become a little complicated, especially after the acquisition in Europe for Grupo Vips. So as you've seen, we're starting to get out of the brands that will not get to critical mass in Alsea as a total, but also in Alsea as a local market. There's no doubt, and especially now after the pandemic, that we should focus on the more resilient brand, on the bigger brands, and yes, use these brands in other geographies if we can. We have achieved our goals in France only 1 year, in 2019, but obviously had to stop to grow in '20 and '21. So what I would -- what you will see in Alsea, and I'm sure you will see less brands. And we use kind of a measure internally, which is when we do our financial projections and we have brands that will not reach at least 4% of our generation or EBITDA in the future, we really question the participation of those brands in our portfolio. Now that's at an Alsea level. But if you see the brand at a local level, it might be that, for example, let me say, Archie's in Colombia, it's 20% -- 25% or 30% of that EBITDA. So we will clean the portfolio. We will focus in the more resilient and high-profitable brands, but we will also take in consideration for that cleanup what is a critical mass in the market, in its own market, more globally as Alsea. When we have to open 200 stores per year or 250 stores per year, we have to focus. So that's exactly what we are doing. We started doing that in 2019. We sold brands like wagamama. We sold brands like [indiscernible]. We sold a P.F. Chang's in Argentina. We closed now P.F. Chang's in Colombia, et cetera. We're cleaning the portfolio as we speak and focusing on development of inorganic growth.

Yes. And 25% of the total units we are going to open in the not these 3 or 4 core brands. Also around 50 new units, we are going to open in the more profitable brands in that casual family portfolio.

But it's important, what Rafael said. I mean we have some very profitable brands in some markets, but we question the size of those brands. So we have to see both the unit business model and the profitability of it, but also the critical mass that it can achieve to take the decision.

That makes a lot of sense. And you just mentioned France, Alberto. The -- just one quick comment on the Starbucks in France. What makes it today the right moment to expand the store network? We see a successful rollout in Spain. And I guess, France has that potential, too. And you may have already had this goal back in 2019. But what is the opportunity for Starbucks in France?

Thank you. As I said, we only operate fully France for a year in 2019. But what we discovered in that 2019, and even in '20 and '21, that the brand is very powerful in the market, that our licensees there, our full licensees are making money. And if we operate the brand correctly, the returns are there. Therefore, our ambition is to keep growing the brand. We have to be very cautious on how we grow the brand through licensees, through corporate stores, not making mistakes in locations, not making mistakes in rents. But if you see today our unit economics of that market, we are getting very good returns. Not only that, Starbucks in Spain, for example, was the most -- after Domino's, of course, was the most resilient brand through the crisis. So my opinion, and this is a personal opinion, I do believe that the bet that Alsea made in France and Benelux with the Starbucks brand is very, very big. I foresee a out-of-store market in France, why not? When you see what other brands are being able to achieve in that geography, time will tell. I don't want to promise anything, but things are looking good. We are facing more problem in The Netherlands, for example, because the government has been more strict about restrictions, et cetera. But in France, which is the biggest market that we have in Europe, we are very, very positive about it.

I wanted to get back to your slide on returns at the store level and get more details, if possible, on how you are calculating the number. And if -- I mean, give us some context on what are the targets for the different brands with -- which levels you are not very happy or represent a threat for those brands that are at the lower levels? And what are your targets at that consolidated level in terms of returns?

We have an investment committee in each geography. The lowest return on investment, that is the EBITDA, the adjusted EBITDA, versus the investment that we are doing, the lowest is 25%. Right now that we see a lot of opportunities in some of our brands, we are achieving 30%, 33% return on investments. So lower than 25%, I will say that we don't like it in Europe because the cost of money, it's lower, can be maybe 23%, the lowest in terms of return of investment. But lower than that, we don't feel comfortable to start opening new units.

Well, can I make a comment here? I was talking to Fernando about this chart yesterday and with Rafael through the presentation. I think this is very interesting because if you all see how far we are in some of the brands to our 2019 ROI or annual sales to investment, the gap is quite big. But if you see our results of 2021, we were able to get to the numbers even with this disruption. So if we were very efficient in running the company, so if we can maintain, which we are January and February, maintain our efficiencies and make these sales increase were -- because obviously, the left is the one that fix the right. It's for obvious reason. But exactly, that is what's happening. Every quarter that we advance, the sales per unit per brand is growing to the levels of 2019. And if you also include that the delivery, which was the question that has been mentioned a couple of times, the ROI per store that we expect should be increasing that. And not because I say so, because if you see the numbers of 2021, you can see that, that happened even with these numbers because this is a full year. If we see this in the last quarter, obviously, numbers will change.

And in terms of ROIC at the consolidated level, do you have a target?

The return on equity was around 11%, 12%, and the ROIC will be around 13%, 14%.

Michael Kahan, North Peak Capital. Could you guys give just color on the same-store sales guidance? It was obviously a very robust number relative to '19. How you're going to keep driving it, how it is such a high level, maybe...

It's versus 2020. The same-store sales in guidance, this 15% to 19%, is versus 2021. That's why you see 15% to 19%. If we can see the same-store sales versus coming year, we'll be around 6%.

I thought you guys were like maybe 3% below '21 versus '19. So 15% more than that is a lot more than 6%.

15% to 19% is versus 2021. And we were -- in the fourth quarter, we were up 10% versus 2019. So versus 2019 will be around 8%, something like that.

One thing in the strategic plan -- one criteria in the strategic plan is that always has -- our same-store sales has to be positive and up to the inflation in the perimeter. Because if not, you are deteriorating, we are losing profitability, okay?

Yes. It depends on Argentina. But without Argentina, it's around 6%. And with Argentina, it depends. It can be 8%, 9%, same-store sales, in a normal year.

I think there's no more questions. Thank you very much for attending.

Thank you very much to all of you for your time and your availability.

Thank you, everybody. Take care. Thank you for being always with us.