Marcelo Rabach: Yes, let me add just some color in terms of the mix between company operated and sub franchise restaurants. I do not see that mix changing materially going forward. So we should keep more or less the same mix that we have today. I think that with that we cover all the different parts that the two questions had coming from Ulies and Bob.
Dan Schleiniger: And actually Ulies had one more which is leverage, different topic leverages now at 1x, how does this fit in the strategy? And what are our plans going forward? Can we expect for example a step up in the dividend? So back to you, Mariano.
Mariano Tannenbaum: Perfect, thanks Lises for the second part of the question. At this point, we feel very comfortable with our capital structure. We have high cash balance; we have lower leverage. And that’s for us is a nice problem to have. Two years ago, we could not have imagined being in this position. The good news is that all options are on the table, we just — I just walk you through the CapEx opportunities that we have. And of course, that will mean a deployment of cash, our priority is always investing in the business, which of course, as I already mentioned, we have accelerated openings, our 10 additional openings 2022 and we will have the investor update in for guidance of 2023 and 2024. We will continue with modernizations.
And we are planning to do all this without issuing new debt for next year. We will fund the investment plan using our own cash plus the operating cash flow that of course we are planning to generate during next year. Regarding dividends, in 2022, we will resume to the cash dividend payments with a $0.15 per share dividend. We already paid three of them, we are going to pay the fourth installment at the end of December. And looking forward we do not have a dividend policy. But our board of directors makes the decision on dividend distributions at the beginning of each year. So we will communicate their decision with respect to a 2023 dividend, if and when it is approved by the board. So I think that covers that last part of the question.
Dan Schleiniger: Perfect. A couple of final questions here. One from Antonio Fernandez from Barclays, says good morning. Are we seeing any type of deceleration or underperformance in recent weeks in any of our different types of restaurants? So back to you Marcelo.
Marcelo Rabach: Okay, thank you. Good morning, Antonia, and thanks for the question. No, as I mentioned before, the fourth quarter started really very strong. It’s important to know that we have — we are the only player that have the exclusive rights to use the FIFA World Cup in our marketing activities. And that’s thanks to McDonald’s global sponsorship of the event. And this is the most important sporting event in Latin America by far. Among many marketing activities we design related with World Cup, where the World Cup Sandwiches that we introduced early in October, in all our markets. In the past, we executed with high success, this initiative only in Brazil, this time, we brought this idea and this initiative to the whole company with incredible success.
So behind October and the first two weeks of November sales results is the impact, the positive impact of this initiative. On top of that, we have also signed local sponsorships. Very important ones for example, with Tite, Brazil’s head coach and with the soccer Federations of Argentina and Uruguay. So those agreements are bringing more and more activities that are being executed in the markets related with World Cup and leveraging this asset in our restaurants. As we mentioned before, it’s important to mention that all three divisions are performing extremely well and McDonald’s brand preference has strengthened over the last few years, which demonstrates in our opinion that remains an aspirational experience for our guest. And our plan is to continue yielding revenue through volume growth in order to drive profitability by generating operating leverage.
Dan Schleiniger: Excellent. Last question in the queue here from and he asked, how is the smaller size footprint deployment going? And how has it been performing with respect to the three D’s, and he congratulate us on the very strong results.
Dan Schleiniger: Okay. Thank you, Joe for the question. We continue to look for lots for spaces where we can offer the full McDonald’s experience. That’s why our recent openings are around 90% freestanding units, and that’s the preferred format going forward. But in some cases, there are some constraints, especially in big cities like Sao Paulo, for example. And sometimes the size of the plot is below the ideal that we need to build a full restaurant. So in those cases, we introduced this optimized layout, in order to be able to offer the best possible experience in a reduced space. And for example, the restaurant that we open with the format in venue in Sao Paulo is doing extremely well. In says profitability, and its operating in a very high note.
The two off-premise segments, drive-thru and delivery. So this is, again, an alternative that we can use when we have some constraints in terms of space, but we still are looking for the full restaurant, which is the best experience that we can offer to your customers.
Dan Schleiniger: Great, Marcelo. I know you have some final thoughts for us. But that’s the end of the Q&A session. And once again, back to you, Marcelo.
Marcelo Rabach: Okay. Thank you very much, Dan. And yes, before we end the communication. I would like to thank everyone for joining us in today’s call. And I think that it is worth putting this quarter’s results into historical context. We have clearly turned the page with respect to the pre pandemic performance, since the industry itself has undergone structural changes in how we build revenue and how we drive profitability. And as we have mentioned several times, we came out of the pandemic with some of our strongest ever brand metrics with unstructured competitive advantages. And all of these have consolidated our leadership in the industry. A testament to this superior position is the results we generated in the third quarter of 2022 when compared with the third quarter of 2019.
Revenues and EBITDA in the quarter are up 22% and 35% in US dollars, respectively. Despite the significant devaluation of several local currencies, such as the Brazilian rial, the Colombian peso, the Chilean peso and even the euro and EBITDA margin is up 100 basis points for the same period third quarter 2022 when compared with third quarter 2019 even with the impact of the final step up of the effective royalty rate. So this performance is the result of the disciplined execution of our strategy at the restaurant level. But let me be clear with this, there is still a lot of potential to unlock moving forward. We look forward to speaking with you in the coming weeks and months. Stay safe and have a great day.
