Americana Restaurants International PLC (AMR) Earnings Call Transcript & Summary

Welcome to Americana Restaurants H1 2024 Earnings Presentation. My name is Sonika Sahni, and I'm the Head of Investor Relations at Americana Restaurants. Today's discussion will be led by Amarpal Sandhu, CEO of Americana Restaurants; and Harsh Bansal, CFO and Chief Growth Officer. We will conclude with a Q&A session to answer any questions you may have. Before we start, I would like to remind you of the disclaimer regarding forward-looking statements provided in our presentation, which applies to this call. I will now hand over to Amar for the update on summary performance.

Thank you, Sonika. Good day, everyone, and thanks for taking the time to be with us. We will now recap our H1 2024 performance, followed by a Q&A session. In the first half of 2024, Americana Restaurants remain committed to exceptional customer experiences with elevated focus on serving great-tasting meals and offering everyday value to our customers. We continue to navigate the challenges posed by the geopolitical conflict and the macro pressures on consumer spending, while in parallel, also deploying strategies that would ensure the long-term health of the business. At the end of H1 2024, our portfolio expanded to 2,477 restaurants. We added 81 gross new restaurants in the first half of 2024, strategically focusing on markets less impacted by the geopolitical conflict such as UAE, KSA and Kazakhstan. The company added a total of 273 gross new restaurants over the last 12 months, which included 248 openings for our Power Brands, KFC, Pizza Hut, Hardee's and Krispy Kreme. Revenue for H1 2024 was $1.05 billion, reflecting a 15.2% year-on-year decline. Like-for-like sales declined 20.3% during the same period. Performance has been impacted by the ongoing geopolitical situation as well as the slowing trends in the restaurant sector, driven by pressure on consumer spending in markets such as Saudi Arabia, Egypt. In Q2 2024, revenue increased by 13.3% over Q1 2024. This was aided by revenue recovery observed in some of our markets, also fewer days of Ramadan and the occurrence of both Eid during the second quarter. The business generated adjusted EBITDA of $232.7 million and a healthy adjusted EBITDA margin of 22.1%. The year-on-year decline in adjusted EBITDA of 20.2% was largely attributed to deleverage caused by LFL decline of 20.3%. Considering all factors, management's continued focus on cost controls has ensured healthy flow-through levels across the business. Americana Restaurants reported a net profit of $80 million for the first 6 months impacted due to lower sales and higher depreciation charges on account of new store openings during the same period. We continue to have a disciplined approach to CapEx deployment, contributing to 4.4% of H1 2024 revenue. This enables us to maintain a healthy balance sheet and a robust overall financial position. Looking at portfolio evolution in H1 2024. Let's move to the next slide. On our store footprint, as you can see on the chart on the left, we have opened 273 gross new stores in the last 12 months. Majority of these openings are for Power Brands and in markets less impacted by the geopolitical situation. On the right side, we present the status of current store openings and our pipeline for the year. As you can see, we have opened 81 gross new stores in the first 6 months. And given the ongoing developments in our region, the company has decided to revise its 2024 guidance to 175 to 185 net new stores. We believe the short-term adjustment will enable us to maintain a laser-sharp focus on business recovery and better navigate the current challenges. We have not reported store paybacks in the first half of the year due to the decline in reported revenue. The revenue reduction has impacted our ability to achieve optimal payback levels. However, we believe this is a short-term setback and expect improvement as revenue recovers. Looking at the revenue bridge. Our H1 revenue stands at $1.05 billion. And as highlighted earlier, our business faced several challenges during this time. The key contributing factors are the prolonged regional conflict, which triggered a boycott of international brands, a broader slowdown in the QSR segment as well as increased competition through value offerings by both local and international brands. We also experienced an impact of $26 million from currency fluctuations involving the Egyptian pound and Lebanese Lira and an additional $17 million from store closures. On the positive side, our new store openings contributed $94 million to our H1 revenues. Our Power Brands continue to account for 93% of total revenues. Further, the stable pegged currency sales accounted for 83% of revenue, which is consistent with the first half of 2023. Amidst the ongoing regional conflict, we have seen consumer preference further shifting towards home delivery and digital ordering. This change has resulted in home delivery making up 42% of our total revenues in the first half of 2024 compared to 39% in the same period last year. Next, I want to touch on our revenue recovery strategy. This is guided by 3 key objectives: number one, rebuilding trust, number 2, driving transactions and number 3, serving great-tasting food. On point number one, as everybody can understand, trust is foundational to all our brands' engagement with our customers. Our focus on operating excellence and improving all customer satisfaction metrics is continuous and unwavering. This combined with celebrating local cultures and giving back to communities is integral to rebuild trust with our customers and the communities where we operate. Number 2, driving transactions through value. On this point, we are focused on incentivizing customers through compelling everyday value and innovative menu offerings, encouraging repeat visits and increased spending. We have strategically developed a range of value options across our brands, reinforcing our commitment to accessibility and customer satisfaction. As you can see on this slide, I'll share some of the examples. For KFC, we recently launched Epic Meals, a strategic initiative aimed at reinforcing our value leadership. These meals starting at AED 120 in UAE, 10 real in Qatar or 15 SAR in Saudi Arabia, provide a range of full sandwich and chicken meals, offering an accessible and cost-effective option for consumers. For Pizza Hut, we have recently introduced everyday value offer such as 2 large pizzas for AED 29, other combo deals as well as BOGO offers to target specific days and occasions. Similarly, for Hardee's recognizing the wrap as a strategic product aimed at value seekers, we introduced the new SantaFe Wraptor, featuring one of Hardee's most beloved sauces. Now talking about the third pillar of revenue recovery strategy, which is serving rate tasting food, we are committed to culinary excellence and serving food that not only taste great, but also exceeds our customers' expectations. Examples of those are for KFC, our innovation pipeline included introduction of global flavors such as the Peri Peri Twister and Spicy Sriracha bringing bold new flavors to our classic chicken offerings. Additionally, we introduced the iconic crunching cheese twister and chicken in partnership with the flavor giant of the region, Chitose by Pepsi. Moving on to Hardee's. In the first half of this year, we did a partnership with Duritos to launch the Hardee's Duritos product line. To boost local relevance and transaction volumes, we also launched the Hardee's Riser with a competitive pricing strategy and 2 distinct flavor profiles. On Krispy Kreme, we launched popular innovations like the Lotus and Chocomania campaigns. We fostered positive interactions with our customers. The introduction of Saudi coffee from Jazan in April further solidified our commitment to providing unique and locally sourced products. I will now hand over to Harsh, who will talk in detail about financial performance of Americana Restaurants.

Thank you, Amar, and good day to everyone. We will highlight here that trend observed in the average daily sales per store. Following the recovery in Q1 compared to last year, we have seen average daily sales stable in Q2. While the recovery trends have been slower than anticipated and also varied across markets, the overall trend has been positive, indicating a continuous and ongoing recovery. Saudi Arabia performance was impacted in May due to an unfortunate botulism event and one of the local QSR brands. This impacted the overall industry, including some of our brands. We have reinforced the message on food safety and quality standards to build trust with our customers. KSA, as indicated earlier, is also experiencing demand slowdown, and we are very focused on value to drive transactions. Kuwait and Qatar continue to show positive recovery trends and are building on the Q1 trend in Q2 as well. Oman and Jordan as markets have shown limited signs of recovery given overall negative consumer sentiment in these 2 markets. Focus on product innovation and aggressive value continues to drive transactions. We expect recovery to continue quarter-on-quarter. However, it is challenging to predict a time line on the full recovery. Moving on to the performance of our Power Brands. Like-for-like decline across power brands has been very similar, which is close to 20%. As mentioned by Amar earlier, in addition to decline in revenue due to ongoing negative sentiment, we are also seeing a demand slowdown in the QSR segment, not only regionally, you would see that in globally also as reported by some of the other brands. This slowdown is particularly noticeable in Saudi Arabia. Customers in Saudi have become more price conscious and are taking value deals across categories. For our Power Brands, our focus has been on boosting transaction momentum by offering craveable products, value meals and product innovation. At the same time, we have further enhanced our digital initiatives, both on our own platforms as well as aggregator channels. We reinforced our guidance of better gross margins for 2024 compared to last year despite increased focus on value. Our comprehensive strategy for supply chain optimization, along with procurement, coupled with favorable commodity prices and proactive revenue management has resulted in reduced inventory cost quarter-on-quarter. As shown in the chart, we saw a 2.7% improvement in inventory costs in Q2 2024 compared to same quarter last year. On 4-wall EBITDA, we have been able to maintain 4-wall EBITDA margins despite a decline in like-for-like sales to the tune of 20%. This margin was maintained through lower inventory costs and ongoing focus on cost optimization across line items of the P&L. Specifically, home delivery costs have increased as a percentage of sales, resulting in increased home delivery mix, as Amar mentioned, which is 42%. To address the sales decline, we have been diligently pursuing cost reduction strategies and are committed to further optimize our cost structure. This involves improving supply chain efficiency, enhanced raw material sourcing, further trimming G&A expenses and ongoing negotiations with the landlords for rental release. Through our consistent cost efforts, we have managed to reduce the impact of negative operating leverage and managed to achieve adjusted EBITDA margin of 22.1% compared to 23.5% during the same period last year. Net income margin diluted compared to last year because of lower revenue and also because of higher depreciation charges on account of new store openings and introduction of UAE corporate income tax in 2024. This impact was partially offset by a higher finance income in the first half of the year. We have provided a detailed bridge in the annexure, which provides waterfall on net income movement. We have been focused on optimizing and inventory levels since the start of the year and have managed to decrease it to $134 million despite a drop in revenue. This was achieved through actions such as coordinating with the suppliers to differ stocks, effectively managing inventory between markets with varying impact levels, and implementing measures to minimize the risk of inventory write-offs. On the CapEx side, we have been prudent on CapEx spending and have spent $47 million, largely driven by new store openings. In addition, we will continue to invest in digital CapEx to build strong customer focus engine. On that note, I will hand it over to Amar for concluding remarks.

Thank you, Harsh. As we wrap up, I want to highlight our 2024 NSO guidance once again of 175 to 185 net new stores. We have adjusted our projections to align with current business trends and strike the right balance between growth and recovery. This strategy reflects our measured approach to sustainable and responsible growth. We are committed to building a strong pipeline and are poised to accelerate development when we see clear signals of business recovery. Our commitment is to deliver great tasting food at exceptional value. That's the hallmark of our business. And this core principle guides everything we do, and we'll continue to steer our efforts towards culinary excellence as we move forward. In addition, as Harsh mentioned earlier, we are investing heavily in technology and digital innovations to enhance our omnichannel customer experience and drive engagement and loyalty. By using data-driven insights and embracing emerging trends, we are well positioned to gain share through different stages of the revenue recovery. In summary, we recognize the current headwinds, and we also understand this is not the first nor the last challenge we face, but we deeply understand that the combination of foresight, agility and execution capability will help us navigate the short-term challenges definitely and position the business for long-term growth. Thank you again for joining us today, and we are happy to move to the Q&A section now.

Thank you very much for the presentation. We'll be now moving to the Q&A part of the call. [Operator Instructions] Our first question comes from Mr. Maksim Nekrasov from Citi. Please go ahead, sir.

I just wanted to ask about the trends. If you can disclose the trends you see in July so far and if you see signs of maybe accelerate that recovery? That's my first question.

Maks in the -- we are seeing slight improvement in July. But we don't want to start celebrating yet. So -- but it's encouraging. Some of the initiatives, especially on everyday value on deceptive value, more focused marketing spend are yielding some early positive results.

Got it. And just a bit of clarification about the second quarter. So we know there were a couple of one-off factors like floods in UAE and the food poisoning that you mentioned in the local competitor chain in Saudi. What would be the impact of those factors?

So Maksim, as you rightly said, we did see impact in UAE for a few days, especially on the delivery during the rain period as well as Saudi, the impact was more sustained. And in fact, we saw a double-digit decline for over 2 weeks when we had that [ watchlism ] event in Saudi. So May was mostly impacted, but we gradually started seeing improvement from June onwards.

Our next question comes from Mr. Taher Safieddine from JPMorgan.

Thank you very much for the call. Two questions. Maybe if I start with the first one. I mean, initially, we were assessing boycotts and the impact which is clearly showing in the numbers, and you've highlighted this, but now we're seeing more and more mentioning of slower demand backdrop that you've mentioned on the call a couple of times. So maybe just getting more clarity on, is this more structural, you think, not related to the boycotts? How should we think about this moving forward? And I mean, the reason I'm asking is because it feels that the like for like has been stubbornly at this [ 2020 ] 2% year-over-year drop. Like we haven't been seeing significant improvement on the like for like, which I'm assuming is very important for the recovery of the business. So if you can maybe, just maybe share more, more color on that, you know, especially if I'm looking at the revenue by country, I can still see, you know, Saudi is down 8%, Kuwait is down 15% year-over-year. So maybe just some, some color there, you know, would be very helpful.

So Taher, again, impact is varied across the geographies, but we would say the boycott is still there. We've conducted research as recent as the last couple of weeks and even before that, and there are consumers who are still boycotting. But also in countries like Egypt, Saudi Arabia, there is more macro pressure as well. After all, the overall global economy catches up, higher interest rates, more debt. I mean, Egypt is very different just because of the overall pressure on the consumer there and spending levels. Kuwait, you mentioned Kuwait has shown very good recovery in the early days. Kuwait was one of the worst impacted countries, but it has probably recovered the best.

Okay. And so my second question is this, you know, average daily sales. I know, you know, you mentioned July is picking up, but how should we think about this trend line? Is it still too early to go back to the, you know, '22, '23 line, especially that maybe in Q4 you'll start seeing easier comps right year-over-year. So maybe if you can just share some light. I know, you know, you've mentioned it's still too early to talk about the full recovery, but, you know, how confident are you on these average day to day in terms of trends improving as we go into the latter part of this year?

See the -- it is very difficult to predict what -- I mean, this event is unprecedented. The length of this conflict is unprecedented, the intensity is unprecedented. And we've always been believers that in order for full recovery to start, there has to be peace first and end to the war. The -- I would say, every cloud has a silver lining. The silver lining here is that we are not going backwards. And let's say, July, Q2 was similar to a slightly -- let's say, our worst period was October, November, December, Jan, and then it's been kind of flattish recovery after that, and we are seeing slight improvement in July, and that is more on the backs of aggressive value and more in the face marketing.

And then we...

Thank you.

Yes. Q4 will have a base effect, but we won't for sure be looking at that as a base. I mean, we expect to be positive versus Q4 last year, but full recovery is more so before, which is September.

And we are looking at a 2-year stack at this point.

Yes. Sorry, if we look at the 2 years back, so '22 versus '24, I mean, is it -- how should we be thinking about this?

That's what we are benchmarking against. We want to get back to those levels for us. So...

Our next question comes from Mr. Usman Siddiqui from SICO Bank.

Yes. So I just had this question on -- like you have talked about a lot of value deals, especially in July, that has helped increase in sales as well. What percentage of margins you are sacrificing here? Because I think you've got benefit of lower commodity costs. So what percentage are we looking to lose on the margin side as a result of these discounts?

So Usman, if you look at gross profit, we maintain our guidance that we expect 2024 to be better than 2023 at a gross margin level. And some of the value deals we are doing will help us in the operating leverage. So while they might be dilutive at a gross margin level, but from an EBITDA standpoint, we expect it to be accretive given the like-for-like pickup. So overall, that should help overall EBITDA margin with the incremental sales.

Our next question comes from Mr. Shadab Ashfaq, Al Ramz. Once again, Mr. Shadab, Al Ramz your line is open in case you have a question. Okay, we'll be coming back to you later. In the meantime, we'll take next question from Mr. [ Ahmed Kamal from Azimuth Group] . Please go ahead, sir.

Can you please shed more light on the market share development in Saudi Arabia? My second question is related to the revenue per average store. How much - we are seeing some decline of more than 20% year-over-year. How much of that is related to the growing share of the ramp up phase stores. The stores that haven't yet reached the maturity stage.

So Shadab, from a market share in Saudi, as I said, we see general softening in demand not only for our brands, but also for the market. And in fact, we don't see a significant shift in terms of share to the local brands. Everybody is pushing value and local brands are also aggressively pushing value, including some of the international brands like ours. So we -- I mean, it's difficult to comment given lack of data on exact market shares, but we are not seeing at least a significant shift from a market share standpoint. On the second question, on average unit volume per store, the large impact has been driven by negative like for like and that given the sheer size of the number of stores which are part of LFL. While for sure that negative impact also impacts the new store openings and they are not performing to the same levels as you would expect. And that would also result in a lower revenue per store. And some of them, especially, which have opened in the last 6 months, would not have reached the stable state given the gestation period. And that is typically what the time it takes to get to the stable level.

Okay. Okay.

Thank you very much for the question. We will try once again to open the line of Mr. Shadab Ashfaq from Al Ramz. Please go ahead. Your line is open again.

Can you hear me? Yes, so what are the historical trend of store closure? And do the boycott call have any impact on these trends? And what steps are the company taken to optimize the portfolio in affected countries?

Shadab the store closures, the boycotts have had some impact. There have been situations where landlords have taken this opportunity to exit some of the international brands. I mean, at this point, year-to-date, we've closed 39 stores and we've also taken an opportunity where there was a loss making store and we see that there is no potential to improve that and we've taken the opportunity to exit those stores. Yes. But we are kind of in line with our historical trends. So there's no up or down movement.

Got it.

Thank you very much. Next question comes from Mr. Harsh Mehta from Goldman Sachs.

Perfect. Thank you, Amar and Harsh, for the presentation and the discussion. I just want to understand, you've highlighted there's pressure on consumer spending. There's a lot of value offering that's being done by international players and consumers spending on QSR segment is also weak. I was just hoping to understand how do you see if this prevails for the next few quarters? Do you expect that there could be consolidation in the market, some of the smaller local brands international brands as well could actually kind of trade down in terms of their operations? Or do you think there's a situation where the QSR segment actually benefits and pretty much the market structure won't change?

Harsh As good to hear from you again. And as you are a local UAE resident, I'm sure driving up and down shake the road, you must have a - every QSR brand pushing value base right from 10 real to 12 to 15 -- we believe there will be some level of consolidation happening during this time. Everybody has as strong a balance sheet as Americana. And there's only so many players who can sustain this for an extended period of time. But if we look back [ orcally ] during any downturn in the business and the limited service industry, players always resort to value to drive traffic. And that's the most important thing. Our main focus is on driving traffic to the restaurants because it's -- the -- once we have the traffic in the restaurants, then over time, we can gradually move them to more to the core and premium product. So that's why -- so when you have tailwinds, it'd be easier to push core and premium, when you have headwinds, it's very important to have a very strong everyday value offering so we can continue to drive traffic and capture share..

Got it. And just one question, which is on your strategy for M&A. Do you think the current market situation actually improves your ability to look for more brands at a decent valuation? Or this is not getting reflected in terms of number of brands that you can actually approach or the valuation at which you can actually acquire them.

From an M&A standpoint, as we earlier said, we look at it opportunistically. Given the brands we operate within our categories, we cannot operate competing burger brand or a chicken brand for that matter, a pizza brand. But for sure, we continue to look at category expansions, and that is a key focus. And while there's nothing for now, which is concrete, but we look at it on an ongoing basis. And if there are brands which are available at the right price and the right fit, we will pursue that.

All right.

I think you know us pretty well by now. Our approach to capital deployment is very disciplined. We will not pay crazy valuations for anything out there. But if the right deal at the right price, and it's a strategic fit, certainly, we would be open to it...

Clear.

[Operator Instructions] We'll now be taking a question from Mr. [ Abdirrahman Al Muneed ] from Portfolio Investments. Mr. Abdirrahman Al from Portfolio Investments. Your line is open. Okay, we'll be coming back to you shortly. We will take another question now from Mr. Usman Siddiqui from SICO Bank.

Just a follow-up question. Have you guys got any benefit or concessions from your master franchise like [ Yemen Bank ]or any other one?

Yes. The franchisors are -- they understand our situation. The -- I would say, they've given us some flexibility on marketing spend, right? Beyond that, I'm not in a position to comment because these are very, I would say, confidential conversations with the respective brand owners and brand principles. And I don't think they would appreciate us sharing anything in public.

Okay. [Operator Instructions] We have a follow-up question from Mr. Taher Safieddine from JPMorgan.

Yes. Again, just maybe 2 follow-ups. Just on the demand slowdown, just to understand, I don't know, how would you -- if I look at H1 performance, how would you break it in terms of how much of it is a boycott, how much is demand slow down? I'm just trying to try to assess the business beyond boycotts. Hopefully, these will end soon or maybe are coming towards the end of that. But how concerned are you about the demand slowdown? And maybe you didn't answer it, but is the UAE also subject to this backdrop? Or is it mainly seeing -- mainly focused on Saudi and Egypt at this point?

So Taher, it is not possible to put a number to it. But yes, definitely, we are seeing more of a demand slowdown and hypercompetitive environment in Saudi, Egypt is pure macros, the stress on the consumer, given what's happened to the economy there over the last couple of years. UAE is strong. I mean there's definitely competition, a lot of value play. So everybody is fighting for share. But we don't see any demand slowdown in UAE.

We have detailed -- I mean we have -- when we look at our customer profiling and we look at the customers who are not transacting, we could actually see that the boycott impact is there in the markets because the customers were not trading or not transacting for the last 9 months and we could clearly profile them, at the same time, there is some slowness, but that is varied across markets. But the barcode impact is actually very much here and now as well.... Okay. And given this, you know, talk about value, not only you. I mean, you're totally right. I live in Dubai and the amount of promotions and campaigns I see on [indiscernible] I mean, I haven't seen this in the last 10, 12 years. So thanks for flagging. But are we going into a new structural backdrop? Because also you look at, you know, global numbers from McDonald's or Starbucks or others, just everyone is talking value, like globally. SO I mean, is it fair to assume, you know, into 2025 that you know, the margins of the pre boycott are not sustainable. The AOVs need to come down because it's all about more competition, more options, value. Is it, is it something structural? I mean, you have a much longer experience in the QSR space. Have you seen this episode before? How does it, you know, how do you go out of these episodes usually, especially that it's being, you know, even more magnified because of the boycott specific to the Middle East.

So I hope you answered that. But I can answer it anecdotally. Right. You know, the. I have seen it. You know, I will not disclose my age, but I've seen it around multiple cycles. So definitely 2008, 2009 financial crisis. I saw that in the early 2000s as well. So every time there's train on the QSR business, all the players resort to value. But ultimately as recovery happens, they come out of it. So yes, there is some sacrificing of margins during the downturns. QSR also, they are the last ones to go into recession and the first ones coming out of it.

And what happened is because of the commodities, there was a lot of pricing which was taken over the last 24 months, which is more so 2022 and 2023. So we do at least on a commodity side, we are not seeing any headwinds for now. So some of that would be brought back to drive transactions given there is in general slowdown in the commodities as well? Okay, very clear. Thank you.

Thank you very much. Our next question comes from Mr. [ Yasser Nayami from Al Nahadi Holding Company] Please go ahead, sir.

Yes. Thank you for the presentation. I have only one question, so could you please shed some light on the latest announcement? Which is the company wants to shares buyback program?

So you're right, Yasser. We, the board and the regulators and the shareholders have approved of the long term incentive plan for the select employees, which is a share based plan. And for that share based plan, we will be buying back shares. And that's what the announcement is. The time line is not certain, but over the course of period, we will be buying up to shares worth $25 million, 25 million shares, sorry.

Okay. Clear.

Okay, thank you very much. We'll give another minute or so for any additional questions. Okay, we have a follow up question from Mister Taher from JPMorgan. Please go ahead.

Sorry, I don't mean to hijack the call, but if I have the opportunity, maybe just one more question from my side. Sorry, just, you know, just to recap. I know maybe you don't like to comment on others, but, you know, in terms of the publicly listed QFR domain, there's a peer in Saudi Arabia and I think management in Q1, and they're active in the pizza space. It's well known that, you know, the tone was actually quite positive about the pizza are specifically into the second half of the year. And that same management has also updated the market with a medium term guidance, which looks quite ambitious. So maybe from your point of view, because you do compete in a certain category, are you seeing similar trends when it comes to Pizza Hut in that domain? I think that's one. And when should we expect a return to some kind of a medium term guidance just to help us better understand the trends over the longer term? I mean, how far are we from going back to that medium term guidance at this point?

So when we would refrain on commenting about competition, the thing I would mention here is that when the botulism event happened in Saudi, the Pizza brands actually benefited because people moved away from chicken and the burger brands and the pizza brands had tailwind because of that. And we also saw that in Pizza Hut in Saudi Arabia, especially in May and some part of June. Overall, Pizza hut as a category for us is similar. If you look at overall LFL numbers for Pizza Hut, they are very similar to KFC and Hardee's. We do see improvement, Q1to Q2 if you compare the like for like for Pizza. But that is also true for further categories. Medium term guidance, as Amar mentioned, once we have a bit more clarity on the recovery, we would be looking at a medium term guidance. Having said that, we are for now being prudent on the CapEx deployment. At the same time, once we see some normalcy coming in, we would be wanting to go back to growth again and would also give some more clarity to the shareholders on that.

Okay, thank you very much, Mr. Adnan Farooq from [indiscernible].

So my question is around the opportunity set in the market. You mentioned that local brands are suffering. Have you seen valuations correct for some of these, so you can buy them. And in the past you've mentioned certain categories that are of interest to you, like healthy or Arab, ethnic or extreme. Any opportunities that you see because of this slowdown that you could accelerate.

Hi Adnan, good to hear you again. we continue to look at opportunities and a few segments which we have mentioned earlier includes healthy and Arabic as a category. There is not always a correlation between performance and valuation expectations, but as Amar said, we would be prudent. We are not one of the companies who would go overboard to pay aggressive valuations. But we continue to evaluate opportunities in these segments and would consider if there is a right opportunity coming at the right price.

Okay. Thank you very much. It looks like we have no further questions. I'll pass the line back to Sonika.

Thank you again for joining us today. Wishing everyone a good day.

Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.