Good morning, and welcome to the Arcos Dorados, Second Quarter 2020 Earnings Call. A slide presentation will accompany today's webcast, which can also be found in the Investor section of the company's website, www.arcosdorados.com/ir. As a reminder, all participants will be in listen-only mode. Today's conference call is being recorded. At this time, I would like to turn the call over to Dan Schleiniger, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Good morning everyone and thank you for joining our earnings call. With me on today's call are Marcelo Rabach, our Chief Executive Officer; and Mariano Tannenbaum, our Chief Financial Officer. Please turn to slide two. Before we proceed, I would like to make the following Safe Harbor statement. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. In addition to reporting financial results in accordance with generally accepted accounting principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial results as compared with GAAP results, which can be found in the press release and unaudited financial statements filed today with the SEC on Form 6-K. Our discussion today excludes the results of the Venezuelan operation, both at the consolidated level, as well as for the Caribbean division, due to the country's ongoing macroeconomic volatility. For your reference, we include a full income statement excluding Venezuela with our earnings release. I would now like to turn the call over to our CEO, Marcelo Rabach.

Thanks Dan and good morning everyone. I hope you and your families have remained healthy and safe during this very challenging time. Today, Mariano and I will cover the discussion topics on slide three, starting with highlights of our second quarter results, an update on recent trends and a discussion of our strategic priorities. As expected, our second quarter results were materially worse than the first quarter, particularly due to the impact of the COVID-19 pandemic on our April results, but as you will hear today, there are a number of reasons to be confident in the recovery and outperformance of our business in the months and years to come. The most important reason is the strength of the Arcos Dorados system and the McDonald's brand. The continued dedication, collaboration and hard work of our entire system has been second to none. We have come together to ensure that our guests are served the highest quality food, while enjoying the best service and safest restaurant experience in Latin America and the Caribbean. So before I go on, let me just say thank you to all our collaborators. Let's keep up the great work. Turning to our second quarter results on slide four, our system-wide comparable sales which include all restaurants in our system for more than 13 months, whether open or temporarily closed were heavily impacted by restaurant closures in April. However, with each passing month, the strength of our restaurant portfolio became evident as our comparable sales have shown a strong recovery throughout the quarter. Leveraging the region’s largest freestanding restaurant footprint and in line with McDonald's globally, we focused on the DDDs. Drive-thru, Delivery and Digital to drive improved sales and customer engagement. The significant sales downturn in April also drove more than half of the negative EBITDA result for the quarter. We were able to quickly recover from these trends, however, with division EBITDA at almost breakeven in June. In fact, eight markets generated positive EBITDA results in the month, including Brazil and several hard currency, cash-generating markets such as Costa Rica, Puerto Rico, Martinique & Panama. I am pleased to report that this improved trend continues and consolidated EBITDA already returned to positive territory in the month of July. We expect this recovery and profitability to accelerate through the third and fourth quarters of this year. Let me also remind you that our cash flows have been stable since about April 20th. I’m immensely proud of our entire team for this important accomplishment, given all the challenges we are facing during this pandemic. We began the quarter with barely 55% of our restaurants operating at least one sales segment. On slide five you can see the steady pace of reopenings that began in mid-April and took us to 88% of our restaurants opened at the end of the quarter. Today we are operating about 91% of our total restaurant base. The restaurants that remain closed are mostly in shopping malls that have not reopened or are not generating enough traffic for reopening to make business sense. One important trend to monitor going forward is the gradual return of fully-opened restaurants. As of June 30th, only 17% of our restaurants have resumed operating all sales segments, including many freestanding locations, offering back-end service with reduced capacity. As of this morning, this figure has grown to 40%. This is good news given the historical importance of the front counter and self-ordering kiosk sales segment to our business, which will be key contributors to the current recovery and the long-term growth of our business as well. People across Latin America and the Caribbean remain concerned with the health risks associated with COVID-19. The McProtegidos or McSafe Program we implemented shortly after the start of the pandemic has successfully addressed this issue. Our employees have expressed their appreciation for the steps we've taken to protect them, and our guests have recognized McDonald's restaurants as the safest place to eat out across the region. I'll tell you more about these in a few minutes. I'll turn the call over to Mariano now for a deeper dive into our sales trends and EBITDA performance in the quarter.

Thanks Marcelo. Last month we released a market update with our monthly system-wide comparable sales performance during the second quarter, as well as commentary on our restaurant operations and cash flows. The charts on slide six relate to total revenues by division for the quarter. Embedded in the figures is the important recovery in system-wide comparable sales of May and June that’s similar to EBITDA and a higher correlation to free-standing restaurant penetration across our markets. Early third quarter sales trends have remained encouraging. As an example, in our largest market Brazil, local currency sales in the month of July were up about 15% versus June. We were particularly pleased with this performance given we did not have the seasonal sales boost from July school holidays in the country. So far in August, Brazil’s system-wide comparable sales are already above 70% of last year's numbers. Let's turn now to our second quarter cost and expenses on slide seven. Clearly, the aggressive and proactive steps we took to reduce our cost and expenses were effective in minimizing the EBITDA impact of the severe decline in revenues related to restaurant closures and operating restrictions. Our sophisticated supply chain has operated with no interruptions since the beginning of the crisis, adapting to almost daily changes in operating conditions and rising food inflation in many of our largest markets. Our Food & Paper costs have increased only modestly as a percentage of sales since the beginning of the crisis, benefiting from our rolling effects hedging program, revenue management, smart couponing, menu simplification, and fund regional operations. While we will surely face some cost pressures ahead, I believe our first half results demonstrate the best-in-class capabilities of the Arcos Dorados supply chain. Throughout this crisis, one of our top priorities has been the safety of our people. This is not limited to providing them with a safe place to work. Our efforts to preserve jobs included participating in government support programs, sharing employees with companies from other industries, and reallocating employees from closed to operating restaurants among others. As reported, payroll was down 50% and G&A was down 30% versus the prior year quarter due to the significant sales decline in the quarter; however, both payroll and G&A expenses increased as a percentage of sales. We have been relatively successful in limiting this effect so far and expect even better performance in the second half of 2020. For the full year, we still project total G&A to decline by about 20% versus 2019’s historically low level. Our occupancy and other operating expenses fell by 36% versus the prior year period. However, this line item had the largest impact on our margin performance in the quarter, due to a higher incidence of fixed costs, along with a few new factors. We shifted almost all our rent agreements to variable, limiting the increase in rent expense as a percentage of sales. Aggregated commissions increased as a result of the growth in delivery, and we incurred higher expenses related to personal protective equipment for our employees. Also due to the depressed sales levels, we experienced important deleveraging of restaurant fixed costs such as utilities, insurance, and securities to name a few. This impact was partially offset by our agreement with McDonald's to decrease our advertising and promotions spend to 4% from 5% of sales last year. So that's the picture for the fourth quarter. More than half of the negative EBITDA came in April. But by June we were essentially breakeven at the divisional level. As you have already heard, we generated positive consolidated EBITDA in July, which we expect to accelerate in the third and fourth quarter of this year. Back to you, Marcelo.

Thanks Mariano. Let's take a closer look at the DDD on slide eight. Drive-thru sales in constant currency grew nearly 30% in the quarter, despite declining initially in April, when restaurant closures and operating restrictions were at their peaks. Almost 60% of the quarter’s total sales came from this resilient sales segment. We have improved customer satisfaction levels, while reducing drive-thru service times by 15% versus last year. The more efficient operation also significantly increased the service capacity of the region's most extensive network of drive-thru restaurants. Delivery is now available in 15 of our 20 markets, including Brazil, all of NOLAD, and all of SLAD, as well as the largest market in the Caribbean division. Second quarter, delivery sales grew by more than 150% in constant currency versus the prior year, accounting for 20% of sales in the period. We continued improving the customer experience by focusing on two KPIs; delivery times, which are down more than 20% since last year, and order accuracy, which is an important factor to ensure customer preference. While we have agreements with all the major three PO's, we are testing new customer acquisition and logistical models to further develop the delivery segment. This includes additional Mobile App features, Company Operated Delivery, and e-commerce partnerships among others. That brings me to the Digital aspect of our business. More than 40% of the quarter’s sales came from our industry-leading Digital platforms. This includes sales driven by our delivery segment, industry-leading Mobile App and self-ordering kiosks, as well as our growing CRM and digital marketing capabilities. Just looking at our 40 million mobile app downloads, our industry-leading number of active users does not tell the full story. We have assembled a most disciplined team to lead the next phase of the digital transformation of Arcos Dorados. The sophistication of our digital marketing efforts for example, will grow exponentially through partnerships with Salesforce on Amazon web services. We are improving our customer relationship management capabilities and enhancing our ability to analyze and use the massive amounts of data we are capturing from our guests. We have established rules-based customer segmentation, allowing us to better personalize our communications to drive guest traffic. The team is currently working on more sophisticated behavioral marketing triggers that will lead to predictive personalization in the near future. Consumers consistently rate our mobile app as the best in the industry, and we are constantly adding new features such as the Delivery Hub, which has shown significant volume growth in the four short months since it was launched, and we are now rolling out Mobile Order & Pick-Up to allow customers to easily place and pay for their orders on their mobile devices, ensuring a nearly contactless take-away experience. Soon our dining rooms will start to generate more guest traffic. Our experience of the future restaurants will provide us with another technological platform for digital innovation and customer engagement. Thanks to our early commitment to digital, our first mover position in delivery and the best restaurant portfolio in Latin America and the Caribbean, we expect to capture outsized market share gains in the regions restaurant industry for many years to come. In the short term, consumers remain cautious because of the pandemic. On slide nine, you can see how our McProtegidos or McSafe program is addressing their concerns. All our operating restaurants feature branded signage to communicate safety, acrylic dividers to minimize physical contact, and appropriate PPE to protect our employees among other enhancements to our industry benchmark operational procedures. We have also used our digital platforms and other media to highlight the program, receiving significant recognition from our employees, guests, local governments, and health authorities. McDonald’s is by far the most trusted brand compared to our nearest competitors in each of our markets. In fact, in our most recent consumer survey, we achieved an improvement in 18 of the 23 indicators we've been tracking since the beginning of the pandemic. Turning now to our restaurant portfolio on slide 10, we suspended our expansion program soon after the start of the crises. As a result, we limited our total capital expenditures to $11.4 million in the quarter. We are currently evaluating each of the suspended development projects, determining which ones to complete this year. In addition to opening new restaurants, we have historically closed 15 to 25 or around 1% of all locations each year, mostly due to changed market conditions. In order to optimize our portfolio for a post-COVID world, we will accelerate some restaurant closures, previously planned for future years and expect to close 50 to 60 restaurants this year. Back to Mariano for a look at our balance sheet and cash flow.

Thanks again, Marcelo. Starting with our financial leverage on slide 11, our net debt to adjusted EBITDA ratio rose to 3.4x as of June 30, 2020, largely due to the decrease in our trailing 12 months EBITDA. We also modestly increased our short-term borrowing and used some of our cash available during the quarter. As was the case at the end of the first quarter, our short-term lending balance was mostly drawn from local lines of credit with our relationship banks in Brazil, Argentina, and Uruguay among others. With the decline in our trailing 12 months EBITDA, we are no longer in compliance with the leverage ratios established in our master franchise agreement with McDonald's. However, we have received a waiver from McDonald's through the end of 2020. We expect to review the need for a waiver extension later this year, when we discuss our plans for 2021. We have also received a waiver from JPMorgan for the covenant on our $25 million committed line of credit, subject to certain conditions. We were informed that Bank of America made a centralized decision to reduce its risk in Latin America at least as it relates to committed lines of credit. Therefore, we would pay the $10 million balance on the committed line of credit that expired earlier this month. Importantly, we have always treated this committed line as a convenient back stop, uncommon for Latin American companies. With that said, we have extensive banking relationships and more than sufficient credit availability to meet our needs. With respect to our long-term debt, our 2023 bond is an investment-grade instrument with no debt covenant. And our 2027 bond has a 3.5 net debt to EBITDA financial incurrence covenants, above that level. We are still able to borrow a basket of additional funds roughly between $240 million and $400 million, without being in an event of default. As a reminder, both bonds principal and interest have been swapped 50% into Brazilian reals and are currently trading well above par, close to pre-pandemic levels. As Marcelo mentioned, we successfully stabilized our cash flows around April 20. In addition to better cash strength, we achieved cash flow stability for several management actions. First, we aggressively and proactively made our cost structure as variable as possible, reducing all costs and expenses significantly. Second, cash flows received additional relief from the deferral of some payments to suppliers and landlords, as well as March through July royalty payments to McDonald's, and third we have used our investments to focus on employee and customer safety in our restaurants and the continued development of our digital capabilities. As sales have recovered, our cash position has remained relatively stable, while we begin to meet some of those deferred obligations. Based on current sales and profitability trends, we believe we can sustain our cash flow stability through the end of the year and into 2021, when we expect operating conditions to further normalize. Our classification priorities remain with our operating needs at the restaurant level, meeting our obligations to suppliers, landlords and members, as well as sustaining the digital transformation of Arcos Dorados. We will also evaluate opportunities to drive additional sales and profitability through specific projects and investments related to our restaurant portfolio. Marcelo, I know you have some closing remarks before we open the call for Q&A.

That's right, Mariano. As a leading company in our region, for decades we have worked to support the well-being of the planet and the communities we serve. Turning now to slide 12, in 2016, our Receta del Futuro or Recipe for the Future has been aligned with McDonald's scale for good. I have used the United Nations sustainable development goals as a guide. We are focused on five pillars: First, sustainable sourcing; to source our ingredients responsibly. We have quadrupled sustainable beef purchases in Brazil and we are the only company in the industry using satellite monitoring to ensure farms in our supply chain are not engaged in deforestation. Second, climate change where we work to minimize the environmental impact of our operations. Through the elimination of plastic straws and lids from our beverages, we reduced single-use plastic by 1,300 tons in our restaurants over the last two years. Third, Packaging & Recycling has reduced waste and helped educate our guests on the importance of recycling. Importantly, more than 90% of our packaging is certified by the Forest Stewardship Council as being produced from sustainable fiber. Fourth, Youth Opportunity is generated every day in our restaurants, where more than 75% of our employees gained their first formal work experience. Along with carefully selected strategic partners, we are supporting the future of the region's young people, having impacted more than 390,000 youth last year alone. And fifth, commitment to families that starts with ensuring the well-being of the thousands of families who visit us every day. The nutritional content of our menu is constantly evolving and improving to offer balanced alternatives to our guests. And we continue to work with Ronald McDonald House Charities in Latin America, having provided support to more than 260,000 families at their time of greatest need so far. We have also maintained our commitment to supporting the communities where we operate, by providing food to those most in need. So far, we have donated around 500 tons of food and another 500,000 McCombo’s across our markets. I conclude with slide 13. We are now firmly in the recovery phase of our plan. This means the vast majority of our restaurants are operating, but the guests remain concerned about the risk of COVID infection as they prioritize safety and value in choosing the restaurant experience. Operationally, we are focused on optimizing and innovating across the DDDs, to drive sales which are also benefiting from the brand trust generated by our McProtegidos program. The results so far are clear and we are confident that we are the best positioned restaurant operator in Latin America to emerge from this situation in the industry's strongest competitive and financial position. We’ll grow our market share across the entire informal eating-out industry, through the recovery phase and when we begin the full revival phase of our plan. Finally, let me say again how much I appreciate all the efforts of the entire Arcos Dorados System, along with the support and cooperation we received from our network of suppliers, landlords and other partners. We are all in this together. Operator, please open the call to questions.

Yes, thank you. Our first question comes from Robert Ford with Bank of America/Merrill Lynch. Please go ahead.

Hey, good morning everybody and congratulations on the improvements in the quarter. Marcelo, can you talk a little bit about your mix when it comes to the shift towards—value platform in this environment and maybe some of the weakness you're seeing in higher margin products. And perhaps you could also touch on the increased functionality of the app, data analytics and some of your strategies to drive a richer mix, active lead consumption and maybe offset the environment somewhat.

Good morning, Bob. I'm glad you're here with us. The pandemic has clearly affected economies across the region, leading to increased price sensitivity among consumers. In this context, our value propositions stand out due to our brand strength, competitive pricing, food quality, and our reputation for safety and service. Other parts of the restaurant industry, especially full-service and casual dining establishments, are facing more challenges. We're leveraging past investments in digital technology to provide offers tailored to customer preferences. We are focusing on developing and promoting family bundles, which allow families to customize orders at attractive prices. For instance, in Panama, about 30% of total sales come from these bundles, and that area is performing exceptionally well. We are also maintaining our pre-COVID-19 pricing structures through various value platforms, such as 3x3 in Mexico, which continue to perform well without significantly impacting our margins. In fact, our gross margin in the second quarter remained strong despite lower sales pressures. Looking ahead, our app capabilities will play a vital role. We have over 40 million users across the region, and the key is ensuring as many of them as possible use the app regularly. We've widened the gap with our competitors in terms of active users over the last quarter, which is promising. To keep the app relevant, we've added many new features, including the Mobile Order & Pick-Up feature that allows customers to order and pay through the app for a fast and contactless experience once they arrive at the restaurant. This feature is currently performing well in about 150 locations in Argentina and is also showing positive results in Brazil. Our Delivery app is likewise doing well. We emphasize taking a strategic approach to our digital transformation, partnering with leading companies such as Salesforce for CRM and Amazon Web Services for data analysis. Currently, we are in the early stages of these developments, primarily using rules-based segmentation. Our next step is to transition to behavioral marketing over the next three years, allowing us to better understand customer decision-making and timeframes, enabling us to adjust digital marketing efforts to enhance frequency and spending consistency in our restaurants. Ultimately, we aim for predictive personalization using algorithms that can forecast purchasing probabilities. We're at the beginning of this journey, but early results are promising, and we're committed to this process, which is reflected in the strong recovery we reported for the second quarter, and the positive trend continues into the third quarter.

That’s very encouraging. With respect to the closures, is there a concentration in malls or food courts or more troubled geographies like Venezuela?

No, I would say that the first part yes, most – the majority of the closures will be in less promising mall-based restaurants, small restaurants, small volume restaurants, but obviously in the bigger markets like Mexico, Argentina. For Argentina, we have a larger amount, but there are a few in many markets. So again, we are taking this decision because we do not foresee in the short to medium term an easy recovery of those restaurants, particularly emerged with the low traffic previously to the pandemic, so since the pandemic situation became even more challenging. So we will take a look at additional opportunities to use those equipment packages in other sites in order to capture potential newer units in the future. So that's the idea with the closures this year.

Our next question comes from Robert Brown with Morgan Stanley. Please go ahead.

Hi, good morning. Everyone, thanks for taking my question. Marcelo and Mariano, you mentioned that in July consolidated EBITDA was back to the positive territory, including further events and also that cash flow has been stabilized for a few months. I just wanted to confirm how confident you are that sales are already back to levels in which you don't need some of the short-term expense initiatives that are fading with the government support on labor or are they relatively fluid as you mentioned? And also related, I was just wondering if some of those expense savings you have might be expected to carry beyond the downturn. So maybe if you can carry on with potentially lower rents after the renegotiations you had, or even maybe lower costs and labor as the penetration of the digital initiatives to take orders for example as you mentioned increased. Thank you.

Okay, okay, good morning Robert. Let me begin with the Arden, and then I will pass it to Mariano to talk a little bit more in detail about margins. I would say that the main reason behind our improvement in profitability, having been at divisional level, almost breakeven in June and at consolidated level positive in terms of EBITDA in July is the recuperation we have in terms of sales. We've made very good progress so far, but I think that still it’s too soon to claim that we are in for revival. There’s still a lot of uncertainty in the markets, but the good news for us is more and more restaurants already opened and those restaurants that are already opened are adding more and more business segments to the operation. So from now on, we think that the core, the recovery will be gradual, but we have a shallow dip usually, but we also expect a slower rebound for now. Having said that, I think that all the efforts, all the measures we took in these three, four months during the crisis to reduce our cost structure and particularly we were very focused in trying to convert as many of our fixed costs to variable costs and we were very successful in that sense. I think as you mentioned as an example with the rent. So I will pass the call to Mariano in order to cover more in detail what we did in terms of margins and our forecast going forward based on the information we already have.

Thanks Robert, how are you? Thanks for the question. Yes, regarding your first comment about cash stabilization, in fact I can say that the cash stabilization started almost you know half April, around the 20th of April. At the beginning of April, we had some financial payments, like a dividend payment of around $10 million and interest payments on our 2027 bond of around $8 million. After that, I would say that our net cash position did not change materially since April 20th and our cash position in the quarter, I estimate our cash burn for the entire quarter was around $45 million, including these financial expenses that I mentioned to you. And after that, all the efforts we have made and we mentioned already are trying to convert a lot of fixed costs into variable for example with rent. All the negotiations we have been maintaining with our main suppliers in terms of Food & Paper, but not only that, in the G&A as well are the ones that are leading to the results that we are experiencing now in June and in July. Coupled with that, we have all the deferments that we have from McDonald’s in terms of royalties for, that we already mentioned we're going to pay next year and with other suppliers that we are starting to pay now on the second half of the year. So regarding how sustainable are those goals decrease is, we expect that many of the reductions in cost that we experienced during this quarter are going to be maintained in the future. For example, in labor, in 2019 we already had one of the lowest labor costs for the company ever. In fact, we experienced a very material improvement in payroll margin of more than 200 basis points in the last three to four years and we expect to maintain that or even improve it in 2021. So of course, all our efforts will be to maintain all the cost reductions that we obtained and in terms of deferments, of course we're going to comply with our obligations when they are due.

Okay, and just a final comment. I think that part of your question had to be with the government programs that we receive in order to help us with labor costs for example. That was true and in fact there are some countries like Argentina for example that are continuing with those kinds of initiatives in order to support private companies to deal with the pandemic issues and this lower recovery in the economy. But I would say that we were able to work in a very strong way in order to reduce costs on top of that, because for example in terms of gross margin, we had only 40 to 50 basis points of deleverage and in fact that's a result of good cost management and it’s not only about supply chain and all the work we did with our suppliers, but embedded in those numbers is our revenue management work, the simplification, the many simplifications we implemented, so we can concentrate our sales in products with higher margins and we did that again, recovering our sales faster than most of our competitors. So I think that we are in a good position in order to face the coming months with the full revival phase of our plan.

Very clear gentlemen. Thanks for the detailed answers.

Our next question comes from Gary Barnes with PGGM. Please go ahead.

Hi gentlemen! Thank you very much for the presentation. Just one initial question and maybe if there’s time after that, a follow-up. But last call you mentioned that you intended to refinance the incurred incremental short debt on the balance sheet, with maybe a public bond in the future. Is that still an idea that is in the cards, which would make a fairly small bond if I’m going by what has been incurred as of now? That’s my first question.

Okay, thank you Gary. I will let Mariano address your question.

Yeah, hi Gary, how are you? First of all, let me tell you that we are very pleased with the support we received so far from our relationship banks, and we were able to increase short-term borrowings during the quarter as needed, mostly in local currencies at very attractive interest rates and maturities. Having said that, we are evaluating every alternative that is on the table, including converting or extending the maturity of the current debt. We are looking into market conditions and we’ll see – we are going to take any opportunity that is there for the company, as long as it’s efficient in cost and maturity.

Okay, thank you. And then just maybe if I may, a follow-up question. Just a headline that reached my screens with regards to an effort being made in one of the Southern Mexican States to curb what is deemed unhealthy dietary habits of sort of the children there. I couldn’t quite gauge whether this will actually be a ban on high-calorie drinks or that a tax will be added. I don’t know whether you are in a position to actually comment on what you're seeing in Mexico?

Okay, I think that what you are referring to is about processed foods, not food at the restaurant. So again, based on my knowledge around this issue, we are not affected by this, but maybe if I have the opportunity to get more information, more in detail, I can share with you, but again my understanding is that's related with processed food.

Our next question comes from Ian Luketic with JPMorgan. Please go ahead.

Good morning Marcelo and Mariano. I have a quick question regarding store closings. So I noticed that during second Q, franchisee stores declined by 75 stores, while owned stores increased by 70 stores. So in that regards, can we assume that Arcos’s bought back most of those stores to help franchisees under financial distress? And also, if you could see that going forward, more of that going forward? Thank you.

Hi, good morning and thanks for the question. I do not think that that number is correct. The only change in ownership we had in the second quarter was related to the final 13 restaurants that had been operated in the past by sub-franchisees in Puerto Rico that we took control in the second quarter. But we are talking only about 13 restaurants, so maybe there's some error in that number from our side, because there weren’t significant changes in terms of ownership and unfortunately, our sub-franchisees are dealing very well with the challenges that we are facing. So let me take a look at those numbers that you mentioned, but based on the information I have, there was no significant change in terms of ownership. Actually, sub-franchisees still operate around 30% of the total restaurants in the region and we are operating 70%. That number hasn't changed materially in the last couple of years. So let me get back to you with maybe why that number came up from your side. I'm sorry for that.

Thank you, Marcelo. Probably my mistake, so glad to hear that everything continues to be normal. Thank you.

Thank you.

There are no further questions. I would now like to turn the call back over to Mr. Rabach.

Okay, thank you, and thank you again, you all for joining our call today and for your questions. My team and I, as always, look forward to speaking with you again in the future, and we encourage you to follow the recommendations of your government and health officials to combat the spread of COVID-19 in your communities. So please stay safe and have a great day everyone!

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.