Distribuidora Internacional de Alimentación, S.A. (DIA) Earnings Call Transcript & Summary

I would like you to feel. I would like for those of you to understand -- those who are with us via streaming, and by the way, hello, good morning to everyone. Thank you so very much for being with us via remote. So let's get our session up and running. We have with us the team, the management team, they're going to give specific information about the transformation and about the new strategic plan. The campaign is called Creciendo Cada Día, Growing Every Day. At 11:30, we will take a break. There will be questions for an hour. And at 13:00, at 1:00 p.m., we will be putting an end to this working day with a cup of wine. You have a QR code. You should see that on screen. There it is. So thanks to that QR and also on your badge, you can send questions to the team until right before the name, before the Q&A before noon. This is very important. All of you who have questions here or via remote, send them on. We will receive them before noon, and it will be those questions that we will be actually posing to our speakers. And now let me introduce to you the persons who are with us today. Their commitment, their engagement, their hard work have contributed to the overhaul of DIA. The numbers that you're going to see today are thanks to them. So Martin Tolcachir, who is -- as of '22, the CEO -- former CEO of Argentina ever since 2020. He has led the transformation plan. He will be leading the upcoming pickup stage growing, creating value for the company. Also with us Ricardo Alvarez, CEO, DIA Spain as of 2020. The turnaround of DIA in Spain is thanks to him. His professional career has always gone hand-in-hand with distribution. He has been at the head of major projects. Top management is his field, for different leading operators in food retail in a number of countries and in 2020 with DIA. Agustin Ibero, CEO of DIA Argentina since '22 was also CFO of the DIA Argentina for 4 years. He has held other positions in the company. Over 3 decades experience in management, finance and compliance for multinationals in the retail and IT sectors. Guillaume Gras, CFO of DIA ever since 2023. He has been at the head of the refinancing of the company, and he has been involved in the sales process of Brazil last year. He has nearly 20 years' experience in retail in Europe, Asia and LatAm. And finally, Benjamin Babcock, Chair of the Board as of 2023. As of 2020, Managing Director of Corporate Finance in LetterOne and the executive responsible for investments in LetterOne and DIA. He has advised different companies and investors in recap, refinancing, mergers, acquisitions in transportation, telecom, infrastructure and manufacturing in Europe as well as in the Middle East. So I have introduced all of these persons to you. And I'm going to give the floor now to Martin Tolcachir, CEO of Grupo DIA. Welcome. The microphone is yours. Welcome.

Thank you so much, Monica. Thank you so very much, Monica. Thank you -- thank you all for being with us today. This is a very important event for DIA and for those of us who build DIA with passion and enthusiasm. Today, we're going to be focusing on sharing with you what DIA actually is now what it represents now today. And perhaps more specifically, what our capacities are, our plans to continue to grow forward-looking and to create value for shareholders in the mid- to long term. Let me then just devote a few minutes of my introduction to talk about what we have achieved, what explains that we have become the proximity supermarket in Spain and Argentina, that comes first to mind. Our transformation was successful. Let me talk about 4 key stages. First, the portfolio was streamlined. We left those countries where we shouldn't focus and focusing instead on those countries where we could better compete and win. We've also overturned the business and the value proposition in Spain and in Argentina. We have prepared our teams. We have redefined the organization. And we have built a culture that truly is customer-focused and on delivering. And finally, we've been able to refinance the debt in December 2024. This overhaul, this transformation, which was successful now allows us to be extremely competitive. We are proximity leaders in the countries where we are engaged. We have a value proposal, which is truly different and pertinent for our customers, a differentiated supply in terms of what we offer, the goods on sale very different from what you would find in the competition. And in proximity, we have Club DIA, our loyalty program, which truly allows us to have the kind of advantages and benefits we seek and we are omnichannel, very competitive, very successful. From the point of view of our operations, our stores are run basically on the franchise model. This is a model which is close to the customer, very nimble and very profitable and scalable when we think about what the future holds. So these are the competitive edges that are ours, that we have rested on in order to build our Strategic Plan '25, '29, which we're going to be sharing with you now. A very clear objective, which is to build value, generate value for our shareholders in the mid- to long term, and that is what we're going to talk about today. So this transformation and the results thereof are very, very visible. We have reorganized our portfolio. We concentrate now where we believe we really could create value. We have shrunk the number of stores, but what we've done to bolster our sales in each 1 of the stores have allowed us to keep our income levels. Our earnings in 2024 were practically EUR 7 billion in earnings. That was the volume. We've also refocused on our business model in Spain and Argentina. We are back to those profitability levels. And in '24, nearly EUR 300 million of EBITDA. And also back to margins, extremely competitive for the sector. All of this, of course, has allowed us to break down the debt levels, and we have, therefore, deleveraged. We begin this transformation and this has to do with defining the markets where we really wanted to compete and add value. These that were no longer focal for DIA. So we've decided to sell the business in Portugal, in Brazil, and we've also decided to leave behind Clarel in Spain. And parallel to this, we have focused on our performance in Spain and Argentina. And this has allowed us to improve the general results. It's allowed us to actually shrink the debt levels we have deleveraged, as I said before, in the past few years. As we advance -- as we simplify and streamline the portfolio, we have concentrated on building 2 champions of proximity in Spain and Argentina, and we've done that by redefining our value proposal in each 1 of the countries. This has to do with defining and coming up with a new model. You probably remember our former models in '17 and '18. We had different banners. We had different brands within the stores. Well, what we've decided to do is evolve towards a more modern, more straightforward for our customers, and we've unified with 1 single brand name, DIA, and we have transformed the stores in Spain and in Argentina. Something else which is also very important is to redefine the value proposal. Our decision was to achieve a balance between our own brands, top quality and national and international brands that our customers like. This is what we offer in our assortment. We wanted to allow customers to be able to choose and do it in proximity. We've also worked to increase our proposal and the freshness of our perishables, again, a comprehensive solution. Fresh and proximity are the key words. Our own brand has been completely overhauled. Our own brand before basically focused on low prices. The decision was to focus our own brand on quality. And that is how we built the formulas and packaging. Why, We wanted to build super brands. We wanted to be modern. We wanted to reach out to the customers. Another key element when we think about the transformation of our proposal and our business has to do with our digitization efforts. We have created, again, the e-commerce platform for DIA. And we've also onboarded the Club DIA and much more nimbly. It's digital and it is included in the omnichannel experience. This is a very important portion of the growth and acceleration of DIA in recent years. A key component which I described before of the business model is the franchise holder. Our partner, an entrepreneur who in every single neighborhood stands up for the DIA experience, right there for customers, a neighbor, a neighbor to the neighbors, a neighbor who personalizes the attention paid to the shoppers. We are franchise holder #1 in Spain, and Argentina. Over 1,500 in Spain. And the model -- the franchise model is one which allows us to be more profitable. So we are more profitable than our stores that we run ourselves and very scalable. It guarantees flexibility for our forward-looking plans. And finally, I would say that one of the key elements is the work carried out by our teams. Of course, our streamlining has allowed us to make the central structures a little bit lighter. We have conjoined global and Spain teams, and this has allowed us to have an organization which is perhaps leaner, closer to the customer, more agile for decision-taking purposes. And of course, we have successfully cut costs. And we've worked with our teams bolstering talent, bolstering our culture, focusing on the customers. So again, customer-centric, focusing on results where meritocracy is paramount and where successes are acknowledged. And we're convinced that we can continue to work with our talent because talent and value generation imply having the smartest and best people on our teams. And finally, now when we talk about transformation is something that happened last year in December. We successfully completed refinancing, and we did this with support from our lenders. They have been there. And we have also reached out to international funds. So we've done this without actually requiring assistance from our shareholders, no more shareholder -- additional shareholder involvement. This is going to allow us to avail ourselves of the necessary resources to grow in the future. So in a nutshell, transformation with a capital team, which allows us to build 2 platforms for growth, for profitability where we see so many opportunities forward-looking, which is why -- what I'm going to do now is I'm going to give the floor to my colleagues, Ricardo and Agustin, and you are going to hear from them what our competitive stance is in the country and our growth plans. Ricardo, you have the floor. Ricardo is CEO of Spain. He was at the head of the 2020 transformation project, fantastic, so fantastic DIA Spain with such excellent results. You have the floor, my friend.

Well, I was actually seeing the slides that Martin was presenting. I was seeing our photos, those of the old store, the new ones, the old assortment, the new one. And I was actually loving it. Just like a small kid, I was going like, oh my God, how much we've achieved in these 5 years. It's really incredible. And on top of that, I think it's been quite historical in the modern retail of the recent years. So I am really, really happy, particularly because of the teams and how pride we all feel about how we've managed to transform the business. And when I look back in time 2020 when we started with the whole strategic process, and when we decided how we're going to compete in the Spanish market, we saw the big monsters of this market. We -- they are really, really big players. And we used to say, okay, what do we want to become as DIA? What are we going to tell people to actually get them to come to our stores? And there's something that was absolutely crucial for us. And it is that we wanted to be the fastest and most comfortable shopping experience in retail in Spain, both in the store and online. We want to be the fastest and the most comfortable. And that was the starting point. And we said we're going to start with the strategic pillars with advantage -- competitive advantages so that we become the fastest purchasing experience, which is it's very easy to put it on the slides, but we then said, okay, how do we do that? And that was a difficult thing. That's what we started right the following day. And I'm going to tell you a little bit about that. So basically, 4 points. Okay. In order to get there, we need a big network of stores. So let's have a modern network of stores so that we have a great deal of capillarity. Okay. Second, I'm going to tell you in a very -- with a very basic approach. But secondly, let's give a high top quality assortment because if you have a lot of stores and the assortment is not good, then that's not going to work. Then we have the highest quality assortment. Then we have to make this profitable. We wanted to generate a new model of franchisees that made it all profitable. So we want to create a new franchise model, basically based on profitability for the company and profitability for the franchisee. And when all this was done -- or when all this gets done, we -- let's work on creating that relationship with the customers. How do we tell everyone because we need to go out there, we can't wait for people to come to as well. So how can we get in touch with a -- all the customers, the new generations, new consumer trends and so on. Back then, we were a little bit outdated. So that was omnichanneling. So we decided to focus on omni-channeling as the way to communicate what we wanted to become and what we were going to become very surely with all the technology investment that we were going to perform. So first point, proximity. We took all the stores. We generated a new concept of a store around 150, 300 square meters and then no banners. We removed all the banners. We said, okay, 1 unique and single proposal, a value proposition for the consumer. We said, okay, it will be the DIA. So we ended up with 2,300 stores. And nowadays, we are the business with the highest number of stores in the market. Secondly, high quality assortment. We said, okay, let's focus on fresh products, let's focus on fresh products and proximity. This is not easy. We had to start contacting the top quality providers provide those standards. We created a supply chain network that was very powerful in order to provide all the products that the shops needed. We want to provide and offer fresh products, fruit, meat, fish, bakery. Now double-digit success to generate the frequency of our customers. Now the rest of the assortment, there were different ideas in Spain, people focusing on own brand, people focusing more on manufacturers brand. But either way we wanted to even it. Our proposal was going to be 50-50. So we're going to get the quality of the top international brands in our assortment. And the other 50% of the -- of our own brand products will have to be top quality. So we started to build our assortment from scratch, always aiming to get the best quality. So when we build that already by 2023, we got to 2024, we completed all that. And we said, okay, now it's time to innovate. And the term innovation is something that we use a lot in businesses. And we think about innovation, we tend to think Apple, the new presentation of the iPhone, Google, Formula 1, but we are retailers. We make food, if you want. I always tell our teams, innovating is about doing what we know how to do, but do it better. So doing it in a different way or doing it better, that's what it is. But always with what we know how to -- what we do. And that's what we've done. We've been the best retailer launching a special range for air fryer with our own brand. We've been working on this for a year. We've been developing specific products for airfryers. It's the same thing, you can make a chicken breast and fry it, but let's see how we do it for the fryer. We probably need to make a crunchier buttered recipe and things like that. And that is what innovating is about. Special products for these new way of cooking, which is the future trend. And so we have the whole range. We launched it. We get all the teams to work on it, marketing, sales, product, et cetera, et cetera. And we have had wonderful results. In the last weeks, we've gone from 400 units per store to 500 units per store just in 4 weeks. So when we innovate, people embrace it and people want what we do. Currently, 2.5% of our current sales in the last 4 weeks have come from the fryer product. That way, you can see how powerful all this is, how powerful innovation can be when we do it well. Now third point, our franchise model. We have the stores. We have the assortment. So how do we make it profitable? How do we operate profitably? So we focus on the franchise model. The obsession was, okay, the franchisee must be profitable. When you take a franchise, you must be profitable. So we created a model that rewarded the sales. The more you sell, the more you earn. And then the liquidity of the franchisee. We're currently the largest franchiser in Spain with 1,500 franchises, and that is 65% of our network. There, you can see a figure, which is very important for me, which is NPS. NPS of the franchisee has grown in the last 3 years by 96 points. I've never seen this before in my life. I've been in retail for many years, and I've never seen anything like this. For you to analyze the magnitude, this is from minus 30% to plus 60%. So when you get that from your franchisees, that means that we've done things well. Now people want to be franchisees for DIA, they earn money. And that's absolutely crystal for us. This is 96 points, I really get goosebumps. I'm sure you do as well here. Now fourth point, how are we going to communicate what we have done? How are we going to connect with the new generations? Well, here, we knew that technology was going to be vital. It was a very, very difficult decision to take. In 2021, we were in the middle of the whole transformation, the redesign of the stores, of the assortment, the concept and everything. And we knew that we wanted to become a business with future and midterm. And we knew that, that meant invested in technology, that was 2021, we knew that we needed to invest money, create a team and start creating in-house technology that could start delivering on what we wanted to build. If we wanted to be the fastest retail, we wanted to have a fastest shopping experience in retail in Spain, we needed e-commerce. We needed a platform that allowed us to meet those needs in the fastest possible way for the customer. And that's how we build the omnichannel platform. We completed in 2024, and from then onwards, we've been growing by 30% in e-commerce. We reached 84% of the population, and our NPS has also grown by 16 points. A very important point of the -- out of the 5.6 million customers of DIA -- Club DIA, we have reached -- we have gone from 5% digital customers to 50% digital customers. So half of our customers have embraced what we offer them because they see the value in it, they see content. They see payment modes. They see communications. They have a promotional universe that is very special for them. And on this platform, we're going to build our promotional universe and personalized universe in the next 5 years. Now these 4 competitive advantages have led us to achieving sales results that are very powerful and very in line with the plan that we designed. We've been growing above 7 basis points. like-for-like sales, always above the market in the recent years. And that has led us to 8.3%, 10.7% and 5.6% in the like-for-like in the last 3 years. Always, always above the market. So what has this generated? Well, this has meant that we've gone from an EBITDA of EUR 123 million in 2022 to EUR 266 million. We have more than doubled the EBITDA in 2 years. Our profitability ratio has gone from 3% to above 6% in the EBITDA. And this is mainly achieved because we have made sure that our stores sell more per store. When we started on 2020 at DIA Store, in general -- generally speaking, it's all about EUR 100,000 a month. But we have managed this same store to sell 70% more after 4 years later, same-store. And thanks to that, everything becomes profitable and all the EBITDAs become wonderful. We're now above 6%, which is a very robust, retail is very powerful and very good when we look at the future. If we compare these ratios with other operators that work more with incomes or own facilities, we would be amongst the most profitable ones. This has obviously generated a very fast over cash EUR 100,000 million over last year. This is the cash generation. We come from leverage ratios about -- from above 4 to currently ratios debt over EBITDA of 1.1. And I will probably stop here just looking at these ratios all morning. I could -- really, I could. But let's talk now about what can we do in the next 5 years? And why do we see that there is a big future in the next 5 years with the competitive advantage that we have created. When we look at the market in Spain, 3 quick conclusions. First of all, it's a large market, 1 of the largest in Europe with [ EUR 122 billion ]. This is a stable market. It's quite resilient against crisis. Also, it has capacity for growth. The economic indicators are good. Inflation is under control, and unemployment is going down. GDP is going up. Population is growing, 1% last year. So all the indicators say that our market is going to continue to grow. So we have included this in the plan, a growth of 2.5% more or less. First point, we are a large market in Europe. We're the fifth food market in Europe, after France, Germany, U.K. and Italy. We rank fifth, but we're the one that has grown most in the last 5 years, 1.1 above our colleagues, the top 5 in Europe. We are a food sector that is very stable and very resilient against crisis. We reflect here the 2008 crisis, the COVID crisis. And as you can see, our sector has always performed above the rest of the sectors. That means that we are pretty resilient against crisis because we have a very robust chain. We have colleagues here representing the whole supply chain and different associations. And we have, therefore, a very powerful union and primary products, farmers, fishermen and so on, the manufacturers and then the retails. That cooperation is unique, and that is why our sector in Spain, is one of the most competitive ones in Europe. Now thirdly, 2.5% growth in -- is what we estimate in the market. That would be -- that will reach a market of [ EUR 122 billion over EUR 140 billion ]. The estimation says 1.5% inflation and 1.1% in volume. Well, with this growth in the market, what is the trend going to be in the market in the next 5 years? Well, what's clear to all of us is that we all need more time. This is why it has never got enough -- never has enough time. So if we know that we never have enough time, proximity is going to become a very key driver. Why waste time when we do our shopping? If I can do it closer to my house, less than 15 minutes away on food, whether I could do something quick, smaller shopping more frequently. So proximity is going to be a trend in the next 5 years. If I have a little time, if I have fresh products near home, or less than an hour away on my phone, why am I going to waste time going anywhere else, places that are further away from my home. So if we have a good offering of freshly products, this is going to play a key role in the coming years. Thirdly, we have less and less time and we cook less and less, and we need to continue developing proposals like the air fryer proposal and the convenience we need to perhaps cook less. We need ready-to-eat offers. So we're going to see how these evolve. But what is clear is that, that is the trend worldwide. When we have managed to become the fastest shopping experience in Spain, both in store and online. If we get there, then we will have a very, very clear competitive advantage. And that's why we built a platform that we build all the operations behind it. Currently, 92% of our online orders are served on the actual day. That is something that no one else can achieve, on the same day 92% of the online orders. Our collaborations with Glovo, Just Eat and Deliveroo and so on, we can manage to deliver an order in 29 minutes. That's the average. So this is a very good proposal. What we built throughout this year is aiming always to become the fastest shopping experience. And obviously, our own brand -- the own brand is also a trend in Spain, or Spain is the second country with the highest percentage of own brand in the shopping basket after Switzerland. It is a reality. Own brand is actually playing a very important role in the decision of all consumers in Spain. Therefore, our role as a business is to have the best own brand in the market. Now these trends, the evolution of the channel of the market towards the future, with -- it means that we are very well positioned with the competitive advantages that we have developed throughout this year. So that will allow us to compete and win in the coming years. And this is the summary. This is summarized in the plan that we're going to tell you about. We're going to increase our market share. We're going to start to expand because we have the model already. We know how to operate it. It's very scalable. And now it's -- our moment has arrived. We are going to work on logistics as well, and this will represent cost savings that will allow us to be even more profitable and ultimately generate more value for the shareholders. And that will be all for me. Thank you very much. And I would like to give the floor to my colleague, Agustin who is managing the Argentinian team very, very well. Maybe the situation is not as beautiful as this one with this inflation rates in our country. But he will be able to explain us more. Thank you.

Well, thank you very much, and congratulations for those results in Spain. And thanks to all of you who are with us today. We're going to talk for a little while now about life in Argentina, the business in Argentina. I'd like to begin by saying that DIA is market leader in Argentina, 15% of market share in the country and 30% in the City of Buenos Aires, and a total of over 1,000 shops distributed over the geography. We are the #1 proximity operator in Argentina. We have penetrated 77% in, what we call the metropolitan area, which is over 35% of the population of Argentina and over 40% of economic activities take place. And that is what we're going to see. Many stores and leaders in the market, #1 in terms of proximity. And this is thanks to a number of factors. First, because of our presence, our distribution. Secondly, because of our own brand products. We are market leaders. We offer the best quality, the best price, this is acknowledged by our shoppers. And we are top in the country, competing with leading national and international brands in terms of sales at a national level. So we really have a very strong presence in Argentina. And the highest percentage of share in 3 countries, again, if we compare with the competition. Our franchise model is one that is well proven. It is solid. It is top quality, #1 in the country. Again, we are the retailer with the most number of franchises. This is our model. That's our franchise model. Multi-franchise holders. We have actually seen that it's an excellent approach over 70% of participation or share in our business. And fourth, we are top of mind. Top of mind, what does that mean? This means that we are in our shoppers top of mind. This is what Cantor says. DIA brand in Argentina is very, very robust. So we can say and rightly so that we are market leaders in Argentina. Now this strength of the brand has allowed us to bolster our expansion recently. We've opened 136 shops. This is as of 2021, basically, resting on 2 factors. First, we have a model which is very similar to what Ricardo said, about 300 square meters. So it is relatively little investment necessary. And secondly, because of the franchise model, I repeat, 100% of our growth over the past 3 years has been possible, thanks to our franchises. And in 2023, things have happened in Argentina. We had elections. There's been a change in the government, not only a change in our government, is a change in the political and economic realities of the country, which in 2024 has led to a retraction, a shrinking of consumer activity. So we have decided to soften our expansion, and we've slowed down our speed. And this plateau has allowed us to continue to be #1 in terms of shops in the country. This is what happens in Spain also. In Argentina, we have a Club [ de Fidelidade ]. We have a loyalty club. Over 4 million Argentinians are loyal customers, over 40%, 4-0% are digital customers. And this is thanks to our omnichannel platform. In other words, our customers can shop in-store or over the web and with our app. Over 500,000 customers visit us every day on our omnichannel platform. And there are 3 commonalities. First, you can buy, actually in the app, in Argentina, we were the first supermarket to make it possible to buy via the app. Secondly, the possibility of availing ourselves of our loyalty program in the 3 formats, so it's cross-cutting. And our program allows us to personalize the offer, thanks to coupons and thus we reach out to the 3 platforms with this very personalized approach. So we've grown. We've digitized our customers. We have a very robust growth rate in '23. The rate is 34% yearly until 2024. So this platform, together with our strength, our brand, our own brand, our prices, guarantees the extraordinary results that we've got in our NPS is over 70 points, 7-0, and has grown by over 10% over the past years. In '21, it was an NPS of 53. And there are other very important attributes also. We are #1 in good prices, always competitive prices, offers, promotions, #1 also in terms of own brand prices and especially in the price quality relationship of the brand in Argentina, best value for money. So we feel that we are very, very strong in terms of our customer satisfaction, which has allowed us to grow more than the market has. Over the past few years, as you can see, it's been positive evolution. And actually, in 2024, when consumption plummeted in Argentina, that year, we actually did better, and we grew our market share. And at the same time, this generates the possibility cash in 2023, especially in 2024 based on 2 very, very important pillars. First, very strict cost control measures. And secondly, slowing down the expansion. This has allowed us to, over this period of time, self-finance. So our own equity, no debt, no need to actually rely on outside financials. So Argentina is beautifully poised, very strong, very robust and the possibility exists of continuing to generate value, more and more value for the group. And if we look at the future, we really are very hopeful. We have great expectations. By 2025, the IMF forecasts a recovery of over 5 points per year and an ongoing deceleration of inflation until we actually normalize those levels. So there will be a progressive recovery of the customers' purchasing power. So the future bodes well for Argentina. And this, together with our strong brand and proximity allow us to really be convinced that we are going to continue to deliver value for the group in the short and medium term. 2025 then, we hope to continue to sell as we have sold and we hope to consolidate our market share. And we hope that we will continue to do so, from a financial point of view, independently. We are going to have the solid basis that will allow us to return to the path of expansion and growth. We hope that -- thanks to those elements that are specific to us and together with the recovery that we expect of Argentina. We believe that the fundamentals are there that will allow us to return to the path of growth and expansion which we walked down before. So let me just finish by saying that Argentina is robust and solid and will continue to deliver value to the group, and we hope that together with the country's economic recovery, we will be back on track on our growth path. So thank you very much. And I'm going to now ask Martin to talk about our forward-looking plans for DIA as a group.

Okay. Well, the truth is that going back and review again the work done to turn around the business, to reconnect with the customers, the return to growth and profitability in the 2 businesses is amazing. In this year, we have clearly completed this transformation with 2 platforms. Once again, very well-prepared platforms, prepared for growth, prepared for profitability and value generation. Let me tell you now how do we think these plans are going to be in order to continue to grow looking forward. Our Strategic Plan 2025, 2029 Growing Every Day is supported by -- on 4 pillars. First of all, capturing the customers. We want to excite our customers. We want to continue improving the experience of our customers in our stores and hence, improving their adoption, their frequency and hence, also increase the sales density levels in our current stores. We see as a second pillar, the support on -- or the lead the marketing profitable growth. Here, we see a clear opportunity to expand our store network. We are now going to see how we plan to do that. But we also see adjacent and additional businesses that can improve the income for the turnover for income. And we also want to improve our logistics network in order to support this growth and in order to improve our costs and operations. The third key pillar is about strengthening our winning foundation. And I will add 3 key elements here. First of all, technology. That has been mentioned already. That was a key part of the -- DIA's transformation. And technology is something that we still is a very relevant tool in order to continue to improve our future business with 2 things in mind. First of all, the customers, we're going to continue to invest in improving the customer experience in our digital platforms, always focusing on Club DIA and omni-channeling. But we also see an opportunity to make the most of our technology, particularly artificial intelligence and incorporate it into our operations to be more efficient and reduce cost. We talk in logistics, transport and store operations. We're going to, therefore, continue working on that. The third element we want to continue our winning foundations have to do with the teams. We want to continue strengthening our talent, investing on our talent, strengthening that customer culture and results-driven approach. So talent and merit is something that we're going to continue supporting in DIA, we want a team that is aligned with the strategy focused on these growth plans. Fourth pillar of our strategy is about increasing the visibility for DIA. And here, we have 2 clear fronts. First of all, the customers and then the financial community. We've been gaining customers in the recent years. We can see that in the figures, but there is still part of our customers who don't quite appreciate the new DIA. The positioning change is slow and we see there an opportunity to invest initiatives to accelerate DIA's positioning change, the adoption of DIA, the frequency to go to or use DIA, and finally improve our position. So we're going to improve on -- we're going to invest on improving the DIA image, but also going to work on the financial community. The work that we've done, the value that DIA currently represents and will represent in the future is not quite fully represented in the value of the share. And so we have to continue to work on strengthening the communication of what DIA is and what we can actually generate and give to this financial community. Our chair Guillaume -- our Financial Director, Guillaume, will tell us a bit more about this soon. So these are 4 pillars that are part of our 2025-2029 Strategic Plan. And I'd like to use a few more minutes to tell you a little bit more about our growth plans. The first element is about customer engagement. This is about the improvement of our stores and our online sales. And we see an opportunity to continue to grow above the market in our stores in the like-for-like stores. So there are 4 pillars for this. First of all, we have to improve our customer management. The key lever here is going to be Club DIA. We're going to continue improving technology. We're going to move towards the hyperpersonalization so that the services are actually what the customers are looking for. And we have specific initiatives in this sense. Our goal is to increase the number of customers in order to reach 1 million new customers in the next 5 years. Second lever for growth has got to do with the assortment, the improvement -- the improved assortment. You talked about the own brands. You talked about the fresh products, and we see opportunities to continue to improve, particularly focusing on categories that are growing way above the market. These are categories on fresh products, healthy products or health products, ready-to-eat products and so on. And we want to grow above the market. And these are categories that grow more on proximity formats. So we are fully prepared to accelerate the growth of these categories in the future and our assortment plans are going to take this into account. The third growth lever to grow in sales density have to do with continuously improve the omnichannel experience. Technology will play a key role here, and we see opportunities for our sales, to continue improving the customer satisfaction, to improve in digital and so on. We see that the freshly products are growing online. That means the customers grow their trust in shopping through this channel. Ricardo already mentioned this. This is one of the key elements that grows the trust of our customers and that will allow us to continue to grow. Our ambition is to reach 6% of our sales in e-commerce, in the -- as part of the plan. The third growth lever has to do -- or sorry, the fourth lever has to do with our plans in terms of improving the experience in the store. And this has to do with the remodeling of all the stores. We still, therefore, see opportunities to improve some of the sections. First of all, it's got to do with the cash point. We're going to renew the cash points. And this will be more omni-channeling approach, and this will ultimately improve the experience of Club DIA. We're also going to work in two specific areas, bakery. We see growth in bakery section, and we see an opportunity to continue to improve the quality of the product in the bakery section. We're, therefore, going to turn these areas around and we're going to renew our equipment in all the stores. The third lever has to do with the chillers. These are categories that are growing very strongly, and we're going to change these sections with a dual sense. First of all, we want to reduce the carbon footprint of our stores, but also we want to renew and improve our department, our sections in order to increase their visibility, in order to give more space to the chillers because they're growing above market. So these are very specific initiatives in these 4 areas that are going to allow us to grow in the current stores by about 3% in the like-for-like, which is a growth above the average Spanish market for the next few years. But we also see growth beyond the current store network. And this has to do with our expansion plan. We have a model that has a great capacity to continue to get closer to the small neighborhoods, the small areas. In the next 5 years, we want to open about 1,500 new stores. We want to open 300 stores in the next 5 years. That doubles our spare share in terms of square meters in the Spanish market. 150 of these store correspond to protecting our market share and 150 of them are -- will focus on growing above the market, earning or gaining market share. So the square meters are growing in average 1.7 in the recent years. Our plans for the next years are about growing annually about 3% our sales surface. Once again, that will allow us to go even faster in the market and as such, gain market share. So these are very specific levers to grow in the current stores, improving the customer experience, but also we want to expand our network in order to gain additional market share. We also see business opportunities -- additional business opportunities that have to do with activities like retail media or monetization of data, which is something that we are currently exploring. How we can turn these relevant for DIA so that we can improve the customer experience with services, benefits, more personalized experiences and so on. But also aiming to generate additional income. We are exploring different initiatives, and there are initiatives in the market already existing that could be relevant for us. We want to find the most powerful ones for DIA with the specific characteristics that meet the needs of DIA and relationship with the customers. Ultimately, remember that this is the focus of our teams, our priority and our commitment. We want to deliver the strategic plan for growth, for profitability in the next 5 years. And that's what we're going to focus on. And we're going to focus all our resources on that, too. However, we're in the Spanish market, which still has a high level of fragmentation. We know that there will be consolidation movements. There are no movements at this time in the market, and we want to proactively analyze all the growth opportunities. Inorganic growth, always aligned with our growth plans. We want them to contribute to generating a better business and a more competitive business. And moreover, we want those initiatives to generate additional value for the shareholder in the mid- and long term. So this strategic plan is a very ambitious plan in the sense that we want to accelerate above the market in our current stores and in our expansion. This plan will allow us to grow in Spain by about 6% year-on-year for the next 5 years. We also, with this growth, we want to improve our operations and our profitability. We want to reach levels of 7.5%, 8% margin, already positioning ourselves as the best in class in the retail sector in Europe. And of course, this improvement in the results will generate cash, and that will allow us to, of course, cover our debt responsibilities and will allow us to finance the investment levels that we have included in the plan, which are around EUR 180 million per year. This is a very ambitious plan, but it's very specific with levers that represent the acceleration and the deepening on capacities that we have been generating in the last few years. In Argentina, we already said it. Argentina is a very powerful asset for DIA, has a brand positioning and image and affinity with our customers that make us leaders in the market. Our competitive position, nearly 30% in the city of Buenos Aires gives us a very, very powerful platform to generate growth and results. Right now, we're still in a delicate macroeconomic context. Therefore, we are being defensive. But we are very sure that the second part of the year will return growth and we will get back to growth in Argentina. And with this growth, we will also get back to the expansion and investment plans in Argentina, always with our same philosophy, profitable operations and self-financed operations. Ultimately, we are now seeing a business that is generating results levels that are very strong, whose plans and tools for growth are going to generate value in the mid and long term. However, it's also clear that there's value-generative idea is still not impacting the value of the share -- the levels that it should do. And that's what we need to work on. We need to increase the visibility of the story of DIA, what DIA represents today and how we can increase the value for the long term. And in order to do all of this, I'd like to invite Guillaume Gras, to tell us about the initiatives to improve the visibility of our community. Thank you.

So in 2019, we had a negative EBITDA and now we have a positive EBITDA, EUR 900 million in 2024. And we can see that we've grown more than the average in the sector and we've gone from having too much debt EUR 1.3 billion, that was a net debt. And now we are deleveraged, EUR 240 million net debt in 2024, less than 1x EBITDA. And today, we are a group that is the leader of proximity. In all markets, we are a group that within this new perimeter generates cash and our net result is a positive one. Today, our transformation plan, the one for Spain, has allowed us to grow beyond market averages with a difference of over 550 bps and delivering a profitability, which is high, practically 10% in the face of 8.5% in the average, if we compare with our peers. But it's important to observe that the financial market is not acknowledging our performance. It is not reflected in our share price. If we look and see, in terms of EBITDA multiple, we're not recognized. We are at 4.4%, and we compare with our peers at 6.5% and 7.5% if we compare with top of class. And this allows, of course, room for growth, for value creation purposes. We have begun to see that value. And this is thanks to a number of different initiatives. Share value has grown over the past 6 months by 35%. And among those initiatives, we can see that there are 4. First, that agreement that we've signed in December 2024 and its visibility, right, for investors and allows us to actually run our plan in the certainty that we will be successful. This has allowed us to grow our terms until 2029 -- I'm sorry, this is your interpreter. I'm getting a telephone -- It has allowed us to bolster our liquidity, and it finally has allowed us to grow our financial flexibility. When I talk about financial flexibility, I mean that it gives us more freedom, more wiggle room, as they say, for leveraging purposes. We are free to buy and sell assets. And we also are free to reinvest the money from our disinvestments in the business proper. The second initiative is the wrapping up of the recovery process. This is what we broached during our earnings presentation, and it's a solid base if you think about the future, sustainable and profitable growth. And then there's the third initiative. This is what something we ran in February. It allows us to fine-tune the price of our share. This is similar to the values in the sector, attracting institutional investors who don't contemplate anything under EUR 5. And finally, today, we have organized this Capital Markets Day, which allows us to share with all of yourselves this ambition that we have, our strategic initiatives. We can actually bolster our commitment vis-a-vis transparency and making good on promised results. I would say that these are actions that have allowed us to free up a part of this value. Now what can we say about the future? We see that there is tremendous growth potential. And it's very interesting to see that analysts seem to agree on this, 80% of analysts recommend to buy. And their price estimate in the long term is of EUR 26, EUR 27. This in comparison with EUR 18, which is the current price. This, as I say, allows us to create value, and in a telling way. This is important. If we want to achieve this objective, we not only have to deliver on results, we furthermore have to strengthen our outreach, our communication. Why? Because we need to make sure that DIA becomes known. It's important that the financial community understands what DIA has become and what the investment approach actually is. For this reason, we have defined a number of initiatives, which are a part of the fourth pillar, which is to make the value of DIA visible. So we want to grow the visibility. We want to improve perception of DIA among potential investors. And I would address 3 essential initiatives. First, ensure that more analysts know of us, go from 5 to 12 and 29. The second initiative is to organize roadshows in order to present to institutional investors, our strategic plan. And here, roadshow with CEOs, with CFOs, and we forecast this week and next week, accompany Martin go to the main financial markets in Europe. So it will be in Madrid, Paris, Barcelona and Lisbon among others. And the third initiative is to grow our participation in conferences and meetings with investors in mid-cap and small-caps. Our ambition this year is to participate in more than 5 conferences. We participated in Santander in January, Alantra in April, the Madrid Stock Exchange in April also. In May, Societe Generale in France, and we hope also CaixaBank in the month of September. We know that DIA has a high value creation potential that we know. We've already released part of this value, 35% of growth in the past 6 months. Forward-looking, we now continue to understand that there is value creation potential with this average price of EUR 26 and not EUR 18 as now. And we know also that it's not only making good on those results. It's also, as I said before, reinforcing and strengthening our communications. And finally, we need to think about solid governance, committed governance, thinking about the long term. And I'm going to give now the floor to the Chair, Mr. Babcock. Thank you.

A lot of people Martin, why so few? Next time, room upstairs, full. That's what I love about this team. They never stop breathing. First, on behalf of the Board, I want to tell you how proud I am of being here with Martin, Guillaume, Ricardo, Agustin, to hear your ambitions for the business as we pivot to real growth. This is not a discussion we've had for years. And to be in front of you today, to me, is just such an important point for the Board and for all of us as we move forward. I want to finish and close out the discussion with just a few points, one around management, the Board, our governance framework, and lastly, our commitment to Board renewal. That's not enough pictures of management. The team is a lot bigger than that. First management, management drives performance of DIA. There is absolutely no question about that. We are very fortunate. We have a deep and experienced management team. You see it in the executive team here, but it goes all the way down to the shop. We have a truly world-class team that drives everything that DIA has done and is doing. Two, this is a management team that has built this plan. They own it. You can feel it in the room today as they present it. They are committed to its execution. And lastly, as an investor, as a Board member, as the Chair of the Board, I think a lot about alignment. And this is a management team whose personal financial success is tied to delivering and exceeding on these ambitions. They hate the exceed word every time I say it -- exceeding on these ambitions. The alignment of interest between shareholders and management is strong. Second, the Board. The Board drives direction, accountability and integrity of DIA. We are fortunate. We have a very focused and performance-oriented Board. I call them a working Board all the time because that's very much how we operate and operate with management as a group. The diversity of skills and experience have guided DIA successfully to where it is today. And I would note this is a Board also whose remuneration is paid in a significant amount in shares. When you look across Spain and other public companies across Europe, DIA is an outliner. And I return to a theme you will keep hearing from me, there is a strong level of alignment. DIA would not be where it is today talking about a pivot to growth like we are without the Board and its leadership. Third, our governance framework, which is really what drives trust, trust of all our stakeholders, of our shareholders, frankly, the whole management team and our broader suppliers and customers. And I'll speak to 3 aspects. There's many I'm going to speak the independent, transparency and our remuneration philosophy. First, independence. Independence is a critical aspect of our governance framework. DIA is committed to having a majority of independent directors on the Board. And importantly, each of our 2 committees the Audit and Risk Committee and the Nomination and Remuneration Committee are led by very strong independent directors, and that is where a significant proportion of the work of this Board is done. Transparency is absolutely paramount. We have a rigorous Board evaluation process, and we have a commitment from the Board all the way down through the executive team to our reporting and communication, to the market internally and to our broader community. And lastly, on our remuneration philosophy, which really to me has 3 aspects: Number one, market competitiveness. We have to retain talent. This is a competitive market, and that is critical to our success today and going forward. Two, meritocracy. We are a performance-driven culture and how we pay people have to be meritocratic and it is. And lastly, alignment. I'm getting really boring and repeating myself, but the importance of alignment between management and shareholders, and even at the Board level in how we remunerate the Board is critical in terms of alignment of interest. Lastly, I want to talk about our commitment to Board renewal. Boards don't always talk about that, but it's actually really critical. We have had the right Board to get DIA to where it is today. However, DIA is not the same company today as it was 12 months ago. The Board must evolve as DIA evolves. I know I'm not clicking the right pages. DIA must evolve -- sorry, the Board must evolve as DIA evolves. We must bring in new skills, representation and operational focus to ensure DIA delivers on its ambitions. We must continue to evolve Board remuneration, so to improve the coherence of how we pay and improve the alignment even further from where it is today. These are topics that will be taken up at the next AGM. With that, I am going to not do justice to what my management team has done. But I'm just going to talk about the thing that matters to me, first and foremost, where we start and where we finished, which is delivery of long-term sustainable value for shareholders. That's where everything begins and where everything ends. You've heard today about the competitive advantages that DIA has. You've talked about our well-rounded plan and the pillars that Martin has outlined around exciting our customers, leading the market in growth, strengthening our winning foundation and importantly, sharing our story broadly. We haven't done that enough. And today is a starting point for I think what you're going to see is a much more active communication program. At the end of the day, as investors, you have a choice. DIA competes in the market for your choice of whether you buy or sell shares. And I think today, this team has tried to outline to you the exciting value proposition that DIA brings and is put forward. And all we can do is hope that you will seriously consider it because we truly are excited about this company's future. With that, Monica is somewhere, hiding. What are we doing next, Monica? Because you don't want me to keep talking really. Monica, where are we going? What are we doing?

Thank you very much, Ben, for your understanding. You're asking about how many slides we have left and the answer is 0, no more. Thank you, anyway. So thank you very much, everyone, to all the speakers. I think it's been quite clear to us now what is DIA's situation, how we made it this far. And more than anything, what do we expect in the next 5 years. And now like we said, we're going to have a small coffee break. We cannot just have a coffee, but we can also enjoy the products of the new quality DIA. I'm sure you'll enjoy it. And we can come back -- we should be back by 12:00, and this is very important. There will be a Q&A session after that, but you need to get the QR code you have in your badge. Before the coffee break, please write your question and -- that we will be able to answer it after the coffee break. Thank you very much all your networking purposes. [Break]

Hello again. We're all back on stage. Hello also to those of you who are following us on streaming. And well, during this session, we have explored the key achievements in the DIA transformation. They've already spoken about them. We've analyzed the current situation of the company and how they are preferred to make the most of the growth opportunities in the market in this new acceleration phase. So they've given us details about their ambition for the coming years and that strategic plan titled "Growing every day". They've given us a reflection on the history of DIA and a renewed commitment with sustainable growth within the group and value generation for all various stakeholders and shareholders. And now it's time to answer the questions that you've launched and raised during the morning. And so Martin, Ricardo, Agustin, Guillaume and Ben, are you ready?

Let's go. Well, I have a lot of questions for all of you. So Martin, I'm going to ask you 3 questions and then you decide what to do with them, you answer, you distribute the questions, you rule. So in the presentation, we talked about inorganic opportunities. So what assets could the company be interested in? Did you have any opportunity already identified? Are you considering emerging with any other chain within the sector? Are there very few stores with the format similar to DIA's that could be acquired? Do you consider entering new formats?

Well, thank you to those who raised the question or questions. I will start by strengthening that our priority, undisputed priority is a focus on the delivery and implementation of the strategic plan that we've just presented. This is what we've been working on, and it's where our capacities are clear in order to continue building this growth and this value generation in the mid- and long-term. What we identified, and I insist on what I just said before is that the Spanish market is moving. There will be consolidation emerging movement. And within that context, our responsibility is about analyzing the opportunities that may arise. And we will do it in a very clearly manner from the strategic point of view, aiming always to grow, always trying to build a better business and generating value for our shareholders in the mid- and long-term. So if there is no viable option, what would you use the general cash for? Well, we have a very robust plan, but maybe Guillaume, do you want to talk more about the cash generation?

Well, the cash will be used priorly for the implementation of a strategic plan and then the repayment of the debt. In order to implement the strategic plan, we mainly want to finance our strategic initiatives, first of all, expansion. Secondly, is about financing all the initiatives that contribute to improving our operations in terms of technology, in terms of structure also and then the initiatives that allow us to work on sustainable and profitable growth, particularly focused on the customer and e-commerce. And finally, we're also going to focus on the maintenance of our stores, always improving the concept. And finally, the decarbonization plan aiming to improve our energy efficiency and aiming to improve also our profitability. So those are the key initiatives. In terms of value, if we wanted to divide the EUR 150 million that we mentioned in the plan, I would say that 1/3 of it would be for expansion, 1/3 of it would be dedicated to the stores and the improvement of the stores and 1/3 to be dedicated for the operational improvement.

From the Board's point of view, the management team is accountable for driving the organic plan and the ambitions that you've seen today. However, you have a market in Spain that is evolving. It is consolidating. It would be remiss for DIA not to look at are there transactions, actions that DIA should pursue to make a better business over the long term. And that is the Board's point of view and certainly from the reference shareholders' point of view, what needs to get done. But I just want everybody to understand, management is not incentivized to go and pursue acquisitions. They actually have no financial incentive to do that. They have an incentive to deliver on this plan. Period end of sentence.

We have more questions with regards to this 5-year period. Do you consider expanding into another market or you're going to concentrate on Spain and Argentina?

No, I'd like to say that clearly not. We have no ambition or idea to explore new markets. We are good where we are now and our focus is to actually make the most of these 2 platforms to continue to grow and generate value.

What measures are being considered in order to increase the liquidity of the share? And do you consider reducing the positioning?

[indiscernible] What I can do because I get this question all the time. What I can do is repeat what LetterOne has been crystal clear publicly. DIA is a long-term strategic investment of LetterOne period, end of sentence. Two, LetterOne has no intention of changing its shareholding position. Both of those have been made very clear by LetterOne. I don't think there's any ambiguity in those statements. So if people want to find some good luck, but I think it's been very clear. Okay.

It seems like LetterOne has played a very passive role in DIA in the last 3 years. Was this going to change in the future?

I'm going to ask my friends to my left. Has LetterOne had a passive role in DIA?

I wouldn't use that word, Ben, but okay.

Okay. Have you felt like there's pressure to perform?

I don't think passive is a good word. No, no. Clearly not.

Do you feel the sense you need to be accountable and deliver?

Not passive, more oppressive.

Is DIA considering the possibility of reducing its presence in Argentina if the economic situation continues to worsen? Martin?

Well, I think we made it very clear, we have a very powerful asset in Argentina. We've been present there over 25 years. So you can, therefore, imagine if you know a little bit about the history of Argentina that we've had higher and lower situations. We've gone through all of them. And all those periods, Argentina has been sustained and has maintained the value proposition. And because of all these consistency in time, we have an asset that is very powerful. And we believe that we can continue to gain value in the mid- and long-term. Therefore, the current focus is on maintaining a very or a more defensive approach because of the macroeconomic context. But once again, when it comes to the recovery of the macroeconomic situation, we will start to grow again, and we will start focusing on expansion.

There are more questions around this. What specific measures did DIA Argentina take in order to protect the profitability and the cash flow in such a volatile economic context?

I think Agustin can answer this question.

Well, yes, I mentioned this in my presentation. In the last 2 years, in 2023, 2024, we have experienced a very strong cash flow generation and positive economic results, mainly because of our value proposition. However, we have had to take action on -- and pay attention to our cost very rigorously to maintain our profitability, particularly in 2024, when the context involved a consumption -- consumer reduction -- consumption reduction, sorry. And apart from keeping our profitability, we've had to work on stocks and payments to providers, always aiming to maintain our work capital. And finally, I already mentioned this, a reduction of our investments. We have been working at a rhythm of like 100 openings a year. And in 2023, mid-year, we cautiously decided to stop our expansion in order to get ready for everything else. To strengthen our strengths actually, to create the foundations necessary to be ready when the country stabilizes again, so that we can reaccelerate the expansion.

Okay. Agustin. So, what is your -- how many stores you expect to open in Argentina?

Well, the focus on our plan in the short term, as I said before, is about preserving our sales volume and consolidating our market share. We have 30% in the city of Buenos Aires, 15% in the country with an NPS of above 70 points. So our key goal now is about becoming strong and stronger where we are present and focus on this plan. Now as we start seeing a recovery of the macroeconomic situation in the country, reduction of inflation continuously. If all that happens, we will be able to go back to an increase in consumption that will allow us to open new stores. Where are we going to do that? Well, there are some cities where we're already leading. Our brand is leading, and we have -- we're leaders in market share. And so there are places where we think we can still saturate our presence. We can increase our brand. If we're strong in those places, we will particularly start with those cities. So I've got to think the most thing about the operation in Argentina, this was proven when the market reduced last year, and that will be the perspective for the coming years. This is a self-funded operation. This is the key point. Argentina can create enough cash to regenerate itself and it could -- we've done it before. And any plan for Argentina will be locally self-financed resulting from the local operations.

More questions, Martin. What has been the impact of inflation in the 2024 results? And what do you expect for the future?

Well, this will depend based on the country. Well, Argentina has a long history of inflation. But since 2023, when the government changed and the economic prospective changed, that inflation actually has been reduced consistently month by month towards a normalization of the inflation levels relatively speaking, Argentina versus the rest of the world. That has resulted into a drop of the consumption in 2024 as a result of the inflation that we ended 2023 with. And at the beginning of 2024 as well. But we have -- in Argentina, we've been for over 70 years with this level of inflation. And our responsibility over there is to maintain a profitable business without conveying all that impact to our customers, to consciously control the cost and manage the cash well.

Ricardo, do you think you can add anything about Spain?

Well, in Spain in the recent years, as you all know, we've had the inflation of about 5%, 3.5%, last year 2.8% in 2024. This year is steady with a moderated inflation below 2.5%. Well, as part of that scenario, we developed our plan, and that's what we are -- that's where we are -- there is inflation. I cannot say that this is guaranteed for the next 5 years, after what we've seen in Europe in the last 5 years. But we internally -- last year with 2.8% inflation rate our internal inflation within the business was minus 0.2%. So we managed to buffer all the price inflation without it impacting our basket. So our baskets were at 0. And that's how we continue to work. If there are inflation of around 2.5%, 3%, 2%, which is the Western economy more or less, with all of that, we'll be able to buffer everything so that it doesn't have an impact on the basket.

Out of the 300 stores that you want to open, how many are going to be franchises? How many are going to be franchise format versus others?

Well, currently, we have 65% of our network as franchise model. And that is a very good breakdown for us. I think the business is very sound, and that gives us different things, the know-how in our own stores and other things on the franchisees. Expansion will probably move on toward the franchises, but never above 80%. So we'll always continue operating with the 2 models.

Which geographic areas would you like to be more present? Are you focusing on large cities or small cities?

Well, basically, everywhere. If we're talking about 300 new stores, we need to focus on everywhere. But that's basically because we are profitable in the 2 formats. In high-density cities, where the operational costs are higher, where there are more customers, we have a profitable model, and we're operating very well. And in areas where they are not so populated, even before 5,000 inhabitants. It works well. We have a model that works with low costs. Even if the store sells less, there are lower costs and we make it profitable. And thanks to that, we can expand all throughout the country and throughout different types of population. So we will expand where we're not present and where there is potential to get more customers.

You want to increase your market share while you improve margins that are already above the sector? How do you do this? Can you improve the efficiencies or you want to scale with expansion?

Well, I'll continue, if I may. Well, it's not about more margins like the gross margin. That power that we have to become a profitable come from 2 things: One, if we continue with our sales evolution store by store, we will become more profitable. If we include all the expansion, our sales volume will grow, our potential and our scale as a business will grow. And secondly, we have a big potential in the logistics part of the business. We currently have 12 warehouses. They're very old. We already have a new logistics model that we have already implemented in one of those warehouses. When we start changing the warehouses and improve our logistics efficiency in the supply chain, we will achieve savings of up to 1 point in the distribution cost. So a great deal of that will come from the operational savings of our logistics expansion and then the scale that we're going to get as business volume.

The objective of margin improvement in the next year, will it be back-end loaded? Or will you get gradual improvements year-on-year?

I think you have the floor now. No. Okay. Right. Well, this is not a done plan normally with aggressive plans, we've all developed plans, haven't we? So they're a little like exponential. Now this plan is fully gradual. We want to increase our EBITDA like we've done in the last 2 years. We have doubled it. It's all been gradual, and we want to continue growing gradually year-on-year on our EBITDA. Therefore, our plan is being developed very regularly, very gradually. So this year, we'll grow a little bit more on the EBITDA than the next one. The next one, next one and the next one, so we'll be very linear. In the case of Argentina, the evolution of the profitability and the margins of the business are mainly going to be the result of the recovery of the consumption in areas of crisis, DIA is an ally to the consumers. We are leaders in price and offering and promotions. So when there's a crisis and inflation, DIA is by the side of the consumer, and as such, we can become stronger within that context.

Now expansion will densify the territory where you're present? Or will you enter new regions? And in that case, the current logistics platform, is it enough?

While we are national players. Therefore, we operate in all the regions, and that's how we want to continue. Our expansion will take place where we see opportunities to capture new customers. Now expansion -- sorry, the logistics plan will consist of replacing old warehouses with about 20,000, 25,000 square meters with a new concept, which is about 60,000 square meters, depending on the densities around us. So we'll be translating an old logistics concept to a new logistics concept that we have, and we also have to, as we become modern, we have to adapt and organically assume all our expansion. So as we become more modern, we generate higher capacities in order to provide service to all our expansion.

So how is the logistics plan going to affect the profitability of the business?

Well, it seems like I'm answering everything. Am I? Well, basically, between 0.8 and 1 point of distribution cost is what we're going to get from this logistics plan. We opened in [indiscernible] 2 years ago. This is a logistics model that is working with or -- the 20% less cost than the rest of the network. In 2 months, we're opening a new warehouse in Seville. That would be the second one of the network. And that's how we're going to continue in Malaga, Leon, all throughout Spain. And for those 5 years, we will be translating this into cost savings.

Well, according to these logistics, you want to continue investing on quick commerce and platforms like global?

Well, our e-commerce is mainly based on 3 models. First of all, with ours, Dia.es, which is our online sales. Then we have a partnership with Amazon. So we also operate with Amazon or website with a DIA's store. So that's a partner. And then we have quick commerce, which is what your question is about. Quick commerce, basically, we're working with global Just Eat and Uber Eats, which are the 3 key ones in our country. We have different logistics operations with each of them. But the key factor or the common factories, well for some, we have bigger warehouses, other smaller warehouses and then open stores. Quick commerce is more based on open stores so that we achieved that purchasing power, that means we achieved 29 minutes in delivering our orders. So growing in e-commerce is aligned with our strategy. So 29 minutes delivery is unbeatable really. And we know the consumer trends in the future. This is what we're going to -- this is how the market is evolving. So people are going to very much value that we are delivering in 29 minutes really faster than any other competitor. So delivering on the same day or getting better than 29 minutes is aligned with what we explained this morning, and that's what we're going to approach, and that's how we're going to focus to grow.

The sales growth is a CAGR at 5 years, but is it going to be stronger at the beginning of the year? Do we -- should we consider a cannibalization in the like-for-like with the new stores opening?

It's basically going to be the same as what we said before with regards to the profitability. The growth, we wanted to be sustainable year-on-year, this will be very linear. And with regards to the cannibalization of the stores when we get to open 300 stores, the expansion, we will not cannibalize ourselves, but the competition. So we will select spots where we don't cannibalize our own stores. So the idea is for those stores to be profitable from the beginning. .

Can you -- the 300 bps of the margin of the franchises? Does it mean that the margin of the franchise is 300 points. Is it bigger than the own stores or no?

Well, our franchise model has a profitability side because we don't directly operate in the store. And that is a franchisee can operate a store depending on the story in the most efficient way. And that's the small delta with the different EBITDAs. So -- because this has got to do with the efficiency of the franchisee in the different locations.

And what is your objective for your own brand, if you think about that strategic plan?

Let me answer by saying that this is a general response. We always like to say that our value proposition that we said this morning is 50% brands, 50% owned brand. 50% in terms of SKUs, if you will. We have 50%. Our customers are always going to be able to say 1 or 2 brands or 3 brands, depending on the category or our own brand. But the level, if we had 5,000, 2.5 and 2.5 would go for own and other brands. Sales-wise, we don't really have an objective regarding what the ultimate point is, but it's going to be up to the customer. The customer will be free to choose. That's what we propose, so the clients can choose can take a decision. What we want is to ensure that the two proposals be as best quality as possible. Our own brand should be as good as possible. That's our growth mindset. And from that point on, well, it's going to be up to the customer. And we, as a company, need to adapt and the company needs to be profitable, but it's going to be up to the client.

And what is the plan to continue to bolster the old brand? If you're thinking of establishing alliances with local suppliers or international vendors.

I'm going to give you the floor now because I'm sort of taking up all the time now. But we've got those agreements. We know what the assortment is, and our philosophy is to make sure that we offer the best quality product possible. National, the ones who guarantee the best quality are national. Actually, 95% of our assortment is national. But if we're going to sell parmigiano-reggiano, I think the Italians would make a better parmigiano than the Spaniards would. So the international products are going to go to the country of origin in order to guarantee the best possible quality. Mozzarella, logically, would be better if it's made in Italy than if it's made in Spain. So we have that 96% international, 4% offering much better quality than what we can offer. Our own brand in Argentina is a very strong ally in times of crisis, as you can imagine. It's a brand which is at the side of the consumer. It allows the customer to buy top quality at affordable prices. So we, in Argentina, we have a current weight of 35% of our sales. Our own brand and our strategy is to have that be 50%. The customer can decide whether to buy good quality national or good quality affordable deals. So the strategy is to continue to grow. We are on -- in an ongoing manner, we are working with our vendors in Argentina. We're looking for smaller producers in national terms with a good proposal for Argentina. And we're growing because we want to make available to our customer that half and half.

Okay. We're doing fine time-wise. I know that...

How long does it take a store to break even? What is the objective?

Our growth is designed to make stores breakeven in year 1, contributing as it were to the corporate EBITDA. We're never going to grow just for growth's sake. We're not going to bring our network to anything which will not guarantee profitability for each one of the stores, and we want profitability in year 1. And there was something else. What was it? Yes. What was it?

What is the objective, your margin?

Year 2, it's got to be average. It's got to be, on average, what the rest of the network is. So healthy growth, healthy sales, contributing EBITDA as of year 1.

And net profits, what is your idea for upcoming years?

I'll take this one, if you want, because I think it's a very straightforward answer. In terms of our policy, we never anticipate. We never talk about net results beforehand. What is true is that what we're saying is that we've got very specific levers because we're going to continue to grow beyond market growth. We're talking about sales here and also other improvements. We are, therefore, looking to clear betterments of our earnings. I'm not going to forecast anything.

And how would you divide between Spain and Argentina? Should we assume the same metrics and growth objectives for Argentina as for Spain?

Well, we said that the context is very different. We have value propositions that are very similar: proximity, neighborhood presence, franchise, quality perishables, competition of prices. So the evolution of the market is going to depend on the macro, and the numbers that we are sharing correspond to our ambition, what we want for Spain. And as we said, Argentina, well, we are, if you will, defending our achievements. And when we are back to where we want to be, we'll be able to talk about other objectives for Argentina.

Are you thinking about a change in the dividend payout in upcoming years?

Well, the fact now is we're creating value. But again, Guillaume, please take this so that you can address the issue of shareholder remuneration.

Thank you. At this point, the dividend payout is not allowed because of that refinancing agreement that we've signed, which is pretty standard in this kind of long-term financing. Practically no amortization. Now this is not a definitive measure. This is a one-off. And as we advance, as we execute our plan, we will, in the future, be able to take a closer look at this policy.

Yes. And let me insist that our priority right now for the group within the context of this strategic plan is to reinvest all cash that we generate in these levers for growth. So our priority right now is to continue to create value. How? By developing the business.

Yes. And the next question then is how will you be attracting new investors if you don't have that -- the sweetener of the dividend?

My answer is that we, of course, know that dividend is a key issue for investors, but it's not the only issue that they take into account. As Martin rapidly just recently said, we're working to grow long-term value for all shareholders. And this -- by means of profitable, sustainable growth. And what investors actually seek is companies such as ours, which are well prepared for future growth, well poised to grow into the future. So a company that now has solid earnings, solid growth surpassing the market with profits that are also more than the sectorial average, well, that definitely contributes to value creation, and then having a strategic plan, of course, which also generates value in the long term.

What are the key terms of the refinancing? And how is this going to affect the cash flow and company profitability forward-looking?

My answer is that this agreement was to the tune of EUR 885 million, 2 tranches: one, working capital, EUR 350 million with a term of 3 years plus 2 years. That could be extended if the lenders agreed. And the cost is 3.75% -- Euribor plus 3.75%. Then there's a second tranche, which is b, EUR 535 million. And the term is 5 years, 6.75% plus Euribor. This is an agreement which has allowed us to pay back our debt. And we've been able to cover all of the financial costs associated to refinancing. It is also an agreement that has strengthened our capital structure we've seen in terms of the term, 5 years, and also in terms of liquidity, so maturity and liquidity both. And it adds to our financial flexibility. It allows us to actually execute our plan. It is flexibility in terms of leverage ratio, in terms of freedom to buy and sell the assets and also freedom to reinvest in the business that money.

Are you contemplating other ways of reducing that high financial cost?

Well, right now, the cost of the debt is in line with market conditions. And if you think about the current financial scenario of the companies, we have refinanced with the assistance of DJT experts who helped us come up with the best possible capital structure. And the price is competitive. It guarantees the best conditions possible. It's also interesting to bear in mind that this cannot be compared with the cost of the previous debt, which was negotiated at a very difficult moment for DIA. It was a financial crisis. There was no liquidity. And the negotiation was geared to maintaining the debt but at a low rate. That was a counterparty.

Another question is, how does Grupo DIA ensure that there is sufficient financial flexibility to actually achieve the long-term strategic plan?

My answer is that this refinancing, as we said, avails of EUR 350 million. That's the working capital line. EUR 200 million have been used. And there's EUR 150 million that we as yet have not used. And furthermore, we are free to buy and sell assets. And we can reinvest in the business. We can reinvest.

And what is the [ ROI ] that you expect of these investments?

My answer to that is our [ ROE ] is in line with what we expected, 30%, 35%. And we always validate an investment with a minimum of 20%.

Could you give more specifics as to the breakdown of CapEx?

My answer is, as I said at the beginning, of the EUR 150 million, EUR 180 million yearly, that's the forecast, 1/3 would go to expansion; another 1/3 would be destined to the current stores, the current stores for refurbishment, for maintenance, for improvement of the concept; and another 1/3 would be devoted to initiatives that foster sustainable growth. So customer loyalty.

And what are you looking forward to in terms of share price?

My answer here is it's very difficult to forecast future share prices because of the multiple factors that are involved. But I would make a reference to 2 indicators that we have already pointed out during the presentation. One is the EBITDA multiples we've seen today. DIA has growth which surpasses the market average with profitability which surpasses the average 4.4x EBITDA. And 6.4 is the market average and 7.5 best-in-class. So that would be the main indicator. I think that, that gives us an idea of possible future share prices. And second, and this is more straightforward, is the analyst consensus. They believe an average price in the long term is of EUR 26, EUR 27.

And the final question is, what is the tangible contribution of Club DIA? Can you share KPI objectives?

Agustin? Ricardo?

Well, at this point, I would say that Club DIA, as we said before, over 4 million active customers. We're going to be growing 50%. That's our strategic plan. So we hope to have 6 million active customers. And also, we want to grow our sales, thanks to our loyalty club. So yes, we definitely hope to continue to grow.

Let me say that Club DIA, the number, 5.6 million customers now, we want to grow by another 1 million. We want to attract an additional 1 million customers into that club. And of course, there are very many KPIs. 56% of our current sales is loyal. In other words, they're cardholders. So that's 1.5% more than -- 1.5% more than last year. We also track average spend of the club. And last year, that grew. It continues to grow. And throughout the plan, we're forecasting a growth of that KPI. And we've also got digitals within the club, used to be 20%, it's now 50%. We hope to make 70%. Why digital? Well, because our digital customer spends much more than in-store. The average spend is 50%, 5-0 percent, more if it's a club member than if it's not a club member. That's why we're a little bit obsessed. We want to attract more and more club members. At the end of the day, this is going to generate more footfall, more spend, more sales. And we have -- within the club, of course, we have a lot of aspirations, but that would be the most important one now. We want to attract another 1 million customers. And we want more and more digital presence. We want to continue to grow up to 70%, 75%.

Well, thank you very much. This is practically the end of our session. Martin, I'm going to give you the floor so that you can wrap up after the questions.

Well, let me begin by saying thank you to all of those who have participated in organizing this event. And thanks to all of your good selves for having spent time with us. It's a very important day for us. It's been years since DIA didn't present along these lines. And I have to say it's a real pleasure to devote time to talking with your good selves today, not only about the transformation, not only about issues that need to be tweaked or corrected, but about how we're going to grow, how we're going to grow more quickly. We're going to overtake the market, how we're going to truly leverage the opportunities to improve our profitability and to continue to generate more and better value for our shareholders. We have 2 very robust platforms. We have very good plans. So as I say, it was very nice sharing time with you. I understand that we're going to now, over a cup of wine, perhaps continue talking.

Yes. Thank you very much, Martin, and thanks to all of your good selves for your participation.

Thank you to all of those of you here, those who are following on streaming. Thank you very much, and congratulations for this Capital Markets Day celebration. It's been a real pleasure to listen in to all these transformation process and the 5 years that you have ahead of you, very exciting years. And now like you said, just enjoy these products of the new quality DIA and continue sharing experiences. Thank you very much, everyone, and good morning. [Statements in English on this transcript were spoken by an interpreter present on the live call.]