International Meal Company Alimentação S.A. (MEAL3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to IMC conference call to discuss the results for the fourth quarter 2024. This conference call is being recorded, and the presentation is available at the company's website. [Operator Instructions] As a reminder, forward-looking statements are subject to risks and uncertainties that could cause the company's actual results to differ from those in the forward-looking statements. Such statements speak only as of the date they are made, and the company is under no obligation to update them. At this conference, we have Mr. Alexandre Santoro, the CEO of IMC. I will turn the floor over to Mr. Santoro. You may proceed.

Thank you, Carol. Good morning, and thank you all very much for connecting to our conference call for the fourth quarter and full year of 2024 for IMC. I think most of you know that yesterday was a very important day for us. We not only released result, but we created a joint venture to speed up the results of the company in Brazil. Now before giving you details, I would like to take the opportunity to thank Rafael Bossolani for the partnership during all these years. We are very thankful for his contribution to IMC. We wish him a great deal of success in his new personal challenges. I take advantage to welcome Natalia, who is our new partner and CFO, and officially will become part of the company next week. We're satisfied with the arrival of Natalia. We have an intense agenda ahead of us, and her energy will add a great deal to the IMC team. Welcome, Natalia. To go back to the presentation, we begin with the results call per se. And I would like to offer you a brief recap of what we have built in the last few years at IMC and how the announcements made yesterday are connected with this trajectory and strategy that we are pursuing. We are on Slide #2. To remind you a bit about this evolution, when we arrived here almost 4 years ago, we had a very big dream, which was to transform IMC in the best and most efficient food or meal platform in Brazil. Now, to turn this dream into reality, we set forth a clear strategy sustained on fundamental pillars for the transformation. This approach tries to balance operational discipline with the right goals of innovation, guarantee relevance and growth in the short term, but also the construction of a sound and sustainable future. Our mission is to offer exceptional experience to our customers. And this is what drives the increase of the base and frequency of our consumers at our stores. The greatest strength of IMC lies in its brands, brands that are acknowledged, admired, and above all, desired by the consumers. What is more important is that we have a great deal of space to grow, show that we're merely beginning to unharness. As we show you in the first slide, consistently, we have had improvements in our results for the fourth consecutive year, we have grown EBITDA and our margins, and I'm convinced that we are on the right path in this. We continue to be committed with discipline in execution and confident that we're on the right track to reach our goals in the short term. Now to refer more specifically to the results of last year and the quarter, we are now going to Slide #3. 2024 was a year where the revenues were below what we had planned. And we know that the evolution in our results, although having been positive, would have been perhaps more significant. The negative highlight, IMC faced a problem in the supply chain in April. We were strongly impacted by the tragedy, the rainfalls in Rio Grande do Sul. We have relevant operations for KFC and others. But when we look at the figures for 2024, we had a growth of 5.5% in the revenue and operations in Brazil. The consolidated figures impacted negatively by the figures in the U.S., a decrease of 2% in the revenues. Now this impact on the portfolio is due to the closing of low-performance stores that directly impacted our base of comparison. IMC had a growth of 3% in same-store sales, perhaps due to greater selectivity in our promotions through aggregators for delivery. This had a strong impact on sales -- same-store sales. The counter transactions that were positive were not sufficient to offset the drop. Now in parallel, we made efforts to use the corporate structures and to enhance internal structures. This led to a reduction of 8.3% in G&A vis-a-vis the year 2023. The sum of these initiatives would -- included more selective sales and enhancement in gross margin and a reduction of G&A and the closure of negative performance stores. Now this combination of factors gave way to our adjusted EBITDA that had a growth of 14% vis-a-vis the last year with a margin of 3.6% (sic) [ 13.6% ], 146 (sic) [ 142 ] basis points, consolidating this growth trajectory for the fourth consecutive year. We ended the year with a controlled level of indebtedness and 2.4x leverage net debt. Now to speak a bit about revenues, the first part of the next slide, we see that the company ends the year with 614 stores. This is the net effect. As I mentioned, we closed some stores, inaugurated others. The net impact is a growth of 39%. Now, all of this driven by KFC and negatively offset with the closure of some units, as I have already mentioned. When we go to the next slide, we see the net operating revenues. We get to BRL 2.2 billion, a growth of 2%. We closed down 15 operations, representing BRL 91 million approximately. And were not for that, the revenues would have been approximately 6%. Now, this partially explains the reason why the revenue had a 2% growth. Now the other part is due to the same-store sales performance that I will explain in greater detail throughout the presentation. At the end of the year, Brazil with a growth of approximately 6%. In the U.S., a reduction of approximately 5% due to the closure of stores and also same-store sales. When we speak about the United States, I will offer you more details that had an impact on the third and fourth comparison because the comparison base of '23 was very strong. We go on to Slide #6 to speak about EBITDA, an evolution of gross margin, greater selection in promotions and campaigns, a reduction of G&A of approximately 8% and a close of companies of deficit taking us to 14% adjusted EBITDA. We have stronger growth in Brazil with 27% growth year-on-year, United States with a growth of 3%. Now on Slide #7, in the last few lines, you can see the financial impacts. Our cash generation is very aligned with that of last year and the same happens with our CapEx. Well, in CapEx, it's important to underscore that almost half of that CapEx was geared to the expansion and renovation of the KFC stores. We continue with controlled indebtedness and a well-managed debt structure. For 2025, what we have, the investments only began in the fourth quarter, and we have sound ground for that. In the second and third quarters, historically, due to seasonality, IMC has a higher cash generation. Very well, we will continue with the presentation speaking about our business units in the U.S.A. on Slides #8 and 9. Once again, we refer to the U.S.A. Now the performance in U.S.A. is below what was expected, below the potential of the brand in that region for 3 reasons that I underscore, the closure of the operations of San Antonio and Las Vegas impacting total sales when compared to the last quarter. In Las Vegas, this is due to the lack of renovation of a leasing that I explained in the former call. In San Antonio, we made the decision to close the store. It was a low performance stores with a deficit because of the high occupancy costs. Regarding the growth of new stores, we have highly relevant stores, the more recent stores in New York, Atlanta, Miami and Boston, all of which are still on the maturing curve. Now these stores have potential for more than to offset the closure of the operations I have just mentioned. And in the third quarter, we had an atypical base of comparison. The third and fourth quarters last year were impacted by a nonrecurring effect. The passing of the singer Jimmy Buffett, something that we truly regret and at the time, he was the owner of Landshark and another brand. And of course, there was commotion over his passing, which reduced the flow in our stores, creating a more complicated base of comparison. And finally, we see an adverse market scenario in the U.S.A. If you follow up on the other brands in the U.S., very generally, the second half of the year was a very difficult year in terms of sale in the traditional brands reporting negative same-store sales. We have several actions that are underway, and our significant focus is to increase the flow of traffic at our stores, adjusting the product offers, price, entertainment. And of course, all of this will depend on the reality of each store. This is the summary for the United States. In the next slide, we see our domestic brands, along with the catering business. This is on Slide #10. We had strong performance. We had a growth of 20% same-store sale. A highlight for the airport operations, the opening of the Salgado Filho Airport was, of course, a positive point. But we were also able to renegotiate some contracts throughout the half of the year with a positive impact on the last quarter with the acquisition of a business that is temporary but helped us in the catering business to enhance revenues as well as the results of that business unit. We have evolved in terms of service in the operations of these brands. And this, of course, translates into a positive evolution. Let's speak about Pizza Hut, which is an iconic, well-recognized and loved brand by the consumers where we still have several opportunities for improvement in revenue, in store formats and, of course, in profitability. I tend to say that our Pizza Hut business today is smaller than the brand. The brand is a large brand with enormous potential. Our business continues to grow with the potential of really taking leads. Now the digital sales are an important part, but there was a slight retraction year-on-year because of the selectivity of our promotions. The brand -- the app, I'm sorry, for the brand has had a positive flow. We have a new partner at present. We're betting strongly on that enhancement of our app so that we can continue to enhance the service levels for the end consumer, ensuring that the experience will be easier without any friction whatsoever. Another point before concluding, we have worked jointly with international Pizza Hut to develop new formats, always thinking and testing alternatives to optimize CapEx and OpEx with the goal of expanding this brand primarily through franchises. Now this approach will enable us to have faster growth and will allow for a better capital allocation. Very well, let's continue the presentation on Slide 13, where we speak about our prized Frango Assado. We had significant advance in the profitability of the Frango Assado network in 2024, a control of costs and expenses in the operations. And although we had a negative impact in working days due to a higher incidence of festive days vis-a-vis 2023, we closed down 3 operations that were not aligned with the strategy and had a very high occupation cost. These were 3 stores. Our focus is and will continue to be enhancing the experience of our consumers, of our clients and of course, we have adopted some measures. We are renovating the main stores. We're also working on developing new formats like Frango Assado Express and increasing the visibility of these stores on highways. These renovations are part of a broader strategy to streamline and make the stores ever more attractive for our consumers. We're fully redesigning the customer experience allied to our expansion plan. Now the digital part of Frango Assado underwent a revolution. We increased our digital sales considerably. We launched a loyalty program. We have 400,000 (sic) [ 360,000 ] people registered. And these customers are very loyal as part of this program. This is a measure that increases recurrency of customers. Of course, we want to attract ever more consumers to our stores. The interesting transaction here is to see that we have the self-checkout in the stores that represent more than 75% of checkout transactions at these stores. We have also made great strides in terms of product innovation, and this will continue to be a focus always on innovation, enhancement of experience and the quality of the products sold at the store. Now the opportunities for growth for expansion of Frango Assado is enormous, and we're more focused than ever before in exploring these opportunities. To give you an example, the store conversion, it's a smart way of growing the business with a lower CapEx as we just did in the case of the new Frango Assado of Guararema. We're not only occupying space in an existing point on the highway, but we have already carried out a conversion vis-a-vis the competitor. So we're more and more focused on the performance and potential of the Frango Assado business. We now will speak about KFC, to speak about performance, but also, I will take this moment to speak about what we announced yesterday, the creation of a JV. We begin with the results. We see that KFC has evolved, has grown considerably through the years. We have 230 stores in the country. The sales in the KFC system had a growth of 26% this year. Digital sales with a growth of 86%. Now this rate of growth also poses operational challenges. We see several opportunities for enhancement and in the maturity of the new stores and changes for the future, where we will have a greater presence of street stores. Now delivery through aggregators had a drop. We had an increase in absolute value. But as we increase the number of stores, the sales per store dropped. Now delivery is important to enhance profitability. It's important for the company results. We interrupted some promotions of sandwiches along with free [ freight, ] but this represented a significant loss of sales, higher than we had planned. And same-store sales for the year did not grow. We're quite focused on readjusting this strategy to have a better balance between sales and profitability which, of course, is our focus. Another important point regarding KFC is that we have the opportunity of redesigning campaigns, promotions and a good example of this is the new campaign of 2 sandwiches for BRL 19.90, very well accepted among consumers. This is a good example of balance, it's a partnership we have with suppliers of being creative and offering alternatives at a somewhat lower cost and transferring that cost improvement directly to the consumer to bring in more traffic to our stores. Well, with this, I end the part of 2024 regarding results. And as we're speaking of KFC, I would like to go into greater details about this joint venture, which is the goal, the impacts and of course, how this process was structured and how it will operate. Well, the goal of the deal is a very clear goal. We created a joint venture with a strategic partner to drive the growth of KFC. It's not in vein that we have brought in a strategic partner. It's not a financial partner. It's a capitalized partner that is strategic with vast experience and know-how in the issue. The partner operates in several countries, in the United States and has 550 KFC stores. So we're dealing with a group with sound experience, with sound financials and of course, with experience in execution. How was this JF (sic) [ JV ] executed? Now what is this KFC operation in Brazil, we have owned stores plus a master franchise contract where we have IMC with all of the franchisees in Brazil. Now the franchisees don't contribute anything. They continue on with their relationship in the company. What happens is that this JV that we have created, we're going to sell part of this deal equivalent to 50.8% (sic) [ 58.3% ] to this new partner, which is Kentucky Foods. This for $35 million. Now we're contributing the assets to the contract, our own assets, this is the company. We're valuing the company in $60 million. We sell 58.3% of the company, equivalent to $35 million. Now what is important to underscore here is that this transaction as it evaluated KFC in Brazil at $60 million, this is the present-day market value of IMC, equivalent to 50% of the former enterprise, the value of the company, IMC. Now how will this JV operate? We contribute with the assets in the deal, the KFC asset and we sell 58.3% stake. We're selling the control, of course, of the company. Now it will be up to the partner to lead the real expansion, the day-to-day operations of the business and contribute the capital needed for the growth of KFC in Brazil. Now IMC will not follow up on future capitalizations, but we'll continue as a partner with 41.7% stake. IMC will offer back-office administrative support to the new JV. And of course, we will work in alignment and a strategic partnership with all of the franchisees. What are the benefits that KFC gets from this? It's a union of 2 very experienced operators with deep knowledge of the brand. This will allow for a gain of scale, better practices and skill and efficiency in our supply chain. We're bringing together a group of operators with more than 550 restaurants, 250 in Brazil. We're speaking of a partnership of almost 800 restaurants. Clearly, there will be a benefit in the entire supply chain. And when it comes to operations, of course, we will be sharing best practices. Another benefit for KFC is that the JV will be fully capitalized with a team that will be fully focused on operating KFC and with enormous avenues for growth. I spoke about the benefits for KFC. Now let's look at IMC. Why is this deal positive for IMC because of the valuation. One of our businesses is half of the old IMC enterprise. We still have Frango Assado. We have the business in the United States generating cash. We have Pizza Hut business, the catering brands like Viena. So we have a brand portfolio, and this simply reinforces what I said about the opportunities. Now the sum of our businesses at present is worth more than the whole, of course. And well, there is proof of that. We had already given you proof of that in the past when we sold a store in the United States for $13.5 million that happened at the beginning of 2024. So there is that issue of the valuation, the sale of 58.3% for $35 million. These $35 million are secondary. They come to IMC for the sale of our stake, and they will be used as a priority to reduce our debt and to deleverage the company. There's another interesting point. The KFC business generates cash, the operating results are positive. And because of the fact that it is a brand that grows considerably in the last 4 years, we increased the size fourfold. Therefore, it has a significant support structure and part of our G&A is part of that business. When we conclude this transaction, we will no longer consolidate the results of KFC. We won't have an EBITDA coming from KFC, but we will be allocating into G&A a reduction. There will be a reduction in our G&A, and we will render services that will be paid for because of the back-office support. What we expect at the end of this is that the EBITDA impact on the company will not be considerably. It should be less than 10% of the present-day EBITDA. Taking into account these factors, we will no longer consolidate EBITDA, but we will allocate G&A to the JV for service rendering. Another benefit is a significant reduction of the need for future CapEx. I mentioned that a little more than half of our CapEx every year was earmarked for KFC. This will no longer be done by IMC. It will be done by JV, and it will be capitalized by the partner. So I reinforce that the focus is to reduce indebtedness to deleverage the company because of the macroeconomic moment and speed up the growth of other brands in our portfolio, always respecting our financial discipline, and of course, having an appropriate return. To conclude, we continue to be a partner in the JV. We truly believe in KFC. We believe in the partnership with Kentucky. And this business will be worth much more in coming years. It will be in very good hands because of the partnership. So there is that upside throughout the year with the evolution of KFC. I have carried out some deals in my life, and I can calmly say that this is a win-win deal for everybody involved, for us, for our partner who is entering Brazil, for [indiscernible] that sees the brand growth, for the consumers that will have even more opportunities of consuming this product, higher conveniency for employees that have the opportunity to grow and our franchisees. This is a good deal. It will generate thousands of jobs in the coming years. And we're quite satisfied with the signature of this joint venture. And of course, we're now faced with significant workload. The conclusion of this operation should happen at the beginning of the third quarter. We're very confident about our decision and the design of this partnership. Very well. I've spoken at length about the JV, and it is something transformational for us. To conclude, we -- several priorities. I can reinforce at the end that we're going to continue to seek strategic alternatives to generate value for the shareholder without losing sight of what is essential. Moving forward in our operational efficiency, this is a day-to-day operation without destruction -- distraction, I'm sorry, and of course, enhance the experience of our customers. We're aware of the challenges and the opportunities that lie ahead, but we're confident in the strides we have made and on the path we have chosen to follow. The consistency of our strategy, the strength of our brand, the quality of our team and franchisees will take us ever closer to our dream to be the best food platform in the country. With this, I would like to end the presentation and return the floor to Carol so that we can go on to the question-and-answer session. Thank you very much.

[Operator Instructions] We already have some questions in hand. I begin with Emerson, an investor. Congratulations for your 2024 results. We continue to have confidence in the company and the last few years have been challenging. We see efficiency in cash generation. We would like to know if you're going to pay out dividends?

Thank you, Emerson, for the question. Well, the company continues to evolve. During the presentation, we focused on that considerably. We are a company that does generate cash, but we have a debt that has a cost. And part of the cash generation is geared towards paying for the debt and another part to fund the CapEx and the expansion that makes sense in this business that is still evolving. This deal with KFC addresses this issue. We're going to reduce our debt and upon reducing our debt, we decrease those financial expenses we have annually with interest rates, and we also reduce our need for future CapEx. These 2 factors will enhance the foundations of IMC as a whole. And for the coming years, there are still many opportunities for growth. We always have a discussion in terms of which is the best way to allocate capital. We see several opportunities for our business. And throughout the years, we allocate our capital in areas that will provide higher returns for our shareholders.

We have a question from Ricardo. Can you give us more details on the expansion, the opening of stores, the size of stores?

Ricardo, thank you for the question. Frango Assado has enormous potential throughout the country. As a principle at IMC, we tend to be very focused. We believe in the power of being focused. Now if we look at the state of Sao Paulo presently and the enormous highways that connect to Rio de Janeiro, Minas Gerais, Rio Grande do Sul or the hinterlands of Sao Paulo going all the way to Mato Grosso, there are plenty of opportunities. First of all, we're going to prioritize these circuits, Dutra, Fernao Dias, Bandeirantes highways. These are the main priorities, Castelo Branco Highway, these are our priorities in terms of regions. When it comes to store formats, at present, we have 23 stores with very different profiles. We have large stores, Carvalho Pinto, Cajamar. Then there are other smaller stores. Now our priority given the potential that still exists on highways and those who travel know that there are opportunities to have a safe stop, quality food with clean bathrooms and with safety, especially. Now we look at the format of large stores as still having a great deal of opportunity in that circuit. We haven't spoken outside of the state of Sao Paulo yet. What we want in terms of the future for Frango Assado is to prioritize these large stores in those access that I have just mentioned. To give you an idea of how disproportional are large stores compared to medium and small stores with 8 or 10 stores, they're equivalent to the large stores we have. There's potential for much more than that. But if we could open 10 stores in the next decade, we could double the size of invoicing and profit. So the path to clearly respond to your question, the strategy for Frango Assado is to be highly selective in terms of the sites, to look for large sites. It's not the number of stores, but the quality and the efficiency of the stores that matter. Thank you for the question.

There's a question from Bruno. When will you begin your participation in the KFC operation? From Clave Capital.

We believe that the closing will take place at the beginning of the third quarter. This is a scenario we're working with presently. In the closing, we have $12.5 million that will become part of our cash, and we have $22.5 million that we will receive further ahead in 2027. What will we do with that? We will put $12.5 million in cash. And as we have that letter for $22.5 million of a top line bank. We don't think it will be difficult to monetize this at a reasonable discount. This is what we want to do with the cash that will come in from our stake. Thank you very much for the question.

We have another question from Mateus. Congratulations for your KFC sale. And the question is: Is there the intention to bring down a new business to Brazil?

Well, given that I spoke about the valuation of IMC, if it's worthwhile thinking about share buyback. Now we don't have the plan to bring down another brand to Brazil. We understand that our brand portfolio at present has a higher potential that we're able to put in place. Well, you heard that explanation of KFC to address this. And by carrying out the deal, we will be able to further explore the other brands that we have in the portfolio. This is our priority. And the buyback of shares. It is not something that we're thinking about presently. Our focus is to reduce the leverage and the company indebtedness.

Roberto [ Dumke ] from ABC...

Thank you for the question, Roberto. And I think we have an additional question, which is the CapEx, I believe. Well, I will read out the first question and attempt to answer the other questions. With the JV, will only the new partner contribute with capital? So in truth, we have 2 questions here. In first place, yes, Roberto, we begin the partnership at 58%, 42% stakes. Upon the closure, there will be a capitalization to face the investments and growth. And that is when we're going to split up. We're not going to follow up on this. Logic is that with each capitalization, the company will be worth more. Our percentage will be lower in a larger business. And for IMC, we understand that this equation will end up being very positive. Now the -- when speaking about CapEx, I mentioned this, it will be approximately half. Well, some years, it was somewhat more, but this is the pace of BRL 60 million -- BRL 50 million, BRL 60 million per year. Thank you very much for your questions, Roberto.

Our next question comes through audio from [ Eduardo Tinoco ] from RBC Capital (sic) [ Tyton Capital ].

My question refers to the transaction, the JV. If there's a change in the number of stores you have to open? Or is there a negotiation underway between yourselves and the new partner? If you could better clarify what these back-office services are about for the joint venture? And about the last question, which is your expectation of annual dilution with this level of opening and growth of stores and with the new CapEx, of course.

Eduardo from Tyton Capital. Thank you for your question. I'll begin speaking about number of stores. As I mentioned, this is a deal carried out at 3 hands with a new partner and with [indiscernible]. Now what we imagine will happen naturally is a growth curve that is very similar to the one we have had. In terms of the openings, there won't be a change. There will be an evolution. We will open up more stores perhaps, but with the curve that was negotiated. Now what is important to answer your question, the profile of the stores that will be opened will change considerably. We have 230 stores. They're mainly found in malls. And now we will tend to grow more on the streets and also have drive-through stores have a higher individual CapEx, but also have a higher return. So it's not only the number of stores, but the speed of growth of revenues when making investments in street stores, the revenues per store higher compared to the stores in shopping malls. There is an agreement, therefore, and the agreement foresees continuous growth to capture opportunities in Brazil at a pace that is not very different than the one we were having for some years and then an acceleration of this growth. Now regarding your second question about back-office services, we have some areas, a single procurement area, for example. And initially, we're going to continue buying for all of the businesses we have. Another example is the accounting part, the financial part, treasury control, cash, all of that day-to-day accounting initially will continue operating as a subsidiary of IMC, working with our support. And of course, these services will have a specific cost for the partner, and we will be reimbursed for those costs. Now this company will become large enough to justify having those roles allocated directly to the JV so as not to lose synergy. And in all areas where there is synergy with IMC to not increase the cost of the JV, we will continue here rendering these services and be paid for them. Now this decrease will depend on the capital contribution. But the way that we look upon this, the way we calculate this is the economic value of this participation will not drop. We will have a lower stake, but the business will be more capitalized in the long term. Thank you very much for the question.

[Operator Instructions] Luis, another question -- the questions include, which is the mindset of the company to enhance margins, and which are the measures you are taking?

Well, Luis, we have several measures, as you can imagine, each brand ends up having its own plan, its promotion calendar and innovation calendar. But very generally, the significant challenge for this year and in all brands, we have been working arduously and this is to increase traffic in our stores. What does this mean? Having consumers visit us more frequently. I can give you some examples at KFC, when we created a new occasion as we did with the wrap and a salad bowl, you create that opportunity of reaching customers you did not reach previously and change the frequency of their visits. Wraps, for example, is something for the afternoon. This translates into higher sales for the store, diluting the cost and the operational leverage. In Pizza Hut, situation is not different. As I said, Pizza Hut is a very strong brand. We hear from customers saying, you only buy one pizza from Pizza Hut. This is something we want to change. We want people to think of pizza and think of us, not as a niche within pizza. So we have been developing this. We have to be more present, having us in trust, more similar to the sales we have in the rest of Brazil. We have a large concentration of consumption of pizzas on weekends, and we have developed meals as if there were calzone, wraps, individual portions, pasta. So there are several innovations and opportunities when it comes to sales. And of course, the image, super disciplined in doing this. With things that will bring in sales, but also enhance our margins. We don't want to compromise our margin in this case. And I go back to the operational leverage. Adjusting labor per store, having the right negotiation for the cost of occupation, which has a significant weight in Frango Assado to give you an example, this is a business where the margins have evolved. If you look at the 4 years, we have had a significant evolution. We have enhanced the product quality. The central kitchen is important. We control the production of several different products, and we are able to have competitive prices without leaving quality aside. So I hope to have answered part of your question. The second question if we can expect new transactions to harness value of the company, other operations reductions like in the United States. Well, you can imagine a deal like this one and what it demanded, a lot of creativity, energy, time and skill to conceive it as it ended up being designed. Of course, we're always open and serving opportunities and alternatives that make sense for us. United States, a specific question. We believe that we made significant investments in the stores of New York, Miami, Boston, Atlanta and this CapEx, well, will be remunerated. It's not a time to think about doing anything there. The moment is to increase the results of these stores. And in the future, we'll consider growth alternatives for the U.S. operation. But presently, there won't be any other transaction. Finally, the question of Pizza Hut. I think I mentioned this in my presentation, the opening mix, own store mix. Luis, we're imagining growth focused considerably on franchises. We're working to redesign the store profile, CapEx, optimize the menu to have an even better CapEx and to attract ever more franchisees. Thank you for the questions. [ Leo ] from [ BC Capital. ] It's an impact of 10% on EBITDA, the EBITDA ex IFRS. So the impact is lower than 10% of the EBITDA we announced here, which is a post-IFRS EBITDA. Now the KFC business, we spoke about the financial valuation, of course, and the value lies more in the future, not in the present. Obviously, because of the growth potential in the discussion, we didn't speak of EBITDA multiples. Very well. The second question, future dilutions if they have a predefined valuation. Yes, the company will be capitalized. And depending on the value of the capitalization, there is a formula for subsequent years. We did take that into account.

The question-and-answer session ends here, we would like to return the floor to the company's CEO, Mr. Alexandre Santoro for the closing remark.

Well, thank you, Carol. Once again, I would like to thank all of you for your attendance. I also thank you for the questions. It's always positive when we receive several questions. It helps us to clarify everything. Despite this, we are at your entire disposal should you have any more questions, we have had 1 hour of call. And to close and to maintain our tradition in the last slide, you have a promotion that you cannot miss, 2 sandwiches for BRL 19.90. You're not going to regret this. Don't miss this. Have a good lunch. Thank you once again for your attendance and participation in this call today.

The IMC conference call ends here. We would like to thank all of you for your attendance. Have a very good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]