Thank you for the presentation. What should we expect for the rest of the year? Will it be in line with your latest revised budget?
I'll take this. As we mentioned before, we will sustain the last guidance. We keep our promises.
Great. The next question. Congratulations on the results. What are your expectations for the fourth quarter?
For the fourth quarter, basically we expect to have a performance in line with the guidance, as Călin mentioned. We already see in terms of sales perspective, the evolution of October, which is a closed month. We are monitoring November and we are very cautious, of course, with everything for December as well. What is extremely important is the macro environment and, as mentioned by me during the presentation, we are very cautious and we are monitoring the trends to be able to react fast and to compensate whatever can be compensated.
There were also two follow-up questions, related to this. Are you expecting a new quarter with record sales? Do you think you will improve your margin in Q4 as well?
If everything will go as anticipated, Q4 will continue the performance and it will score record high sales.
Perfect. Can you please help me with the following information regarding the development plan for Sphera's restaurants? Let's start with the first point. What is the development plan for restaurants net new openings agreed with YUM for this year and the following years by brand?
I will start because I'll answer for each market. I'll start with KFC Romania. For this year, the plan was ninth location. We already opened three. Another three will be open until end of this year. Another three, which are delayed from bureaucratic reasons, will be open in the first quarter of the next year. First three or four months of beginning of next year without any penalties. For the future, we are in the middle of process to negotiate the plan with Yum, and we cannot give you more information in this moment. KFC Italy. We don't have a plan. We are under negotiation with the Yum for the next year. Pizza Hut and Pizza Hut Delivery in Romania.
We still have two locations to be opened this year, but we negotiate with YUM to postpone this plan because of the results of Pizza Hut that are not good. For Taco Bell, the plan. It was two. We opened two this year and for the next year we are under discussion with YUM.
Perfect. The second question, I think it was answered. Do you expect to meet or exceed or be below the plan?
We just expect to exceed the plan.
Great. The third question related, if you will be below the plan, what penalties do you expect if you don't have?
No penalties.
Okay. That is answered. Now we're moving to the next question. Are your new openings that you mentioned in the presentation net?
Yes.
Yes.
We go to the next question. You raised some additional debt in the third quarter. Could you inform us what is the cost of debt for this fresh funding? And there is a related second question. If I'm not mistaken, YUM was supposed to visit Romania in October and discuss the future of Pizza Hut brand. Could you elaborate on this a bit?
I will start with the debt. As you remember, we have a shareholders meeting where we have approved the condition of a new facility. The change brought to the credit facility ensured an improvement of the contractual conditions comparing with the previous one. Whatever we took as a debt in Q3, it was in better condition than compared with the previous contract. We do not foresee any withdrawals until the year end. Q4 it will be based on the forecast without any raised debt. Probably Q1 it will be the new period in which we'll revisit the financing needs.
There was a question about Yum's visit.
I'll start to answer the second one. Yes, Yum visited Romania end of October. It was a technical discussion on how to improve the performance of Pizza Hut. Also regarding the development agreement, but we don't finish yet the discussion. Once we will have something new, we'll inform you through a current report.
Yeah, just wanted to add something here. This is in line with the, you know, all the efforts that the management is trying to execute in order to turn around the profitability of the brand. Hopefully, the result of all this analysis will help us bringing Pizza Hut to a different situation than it is for the time being.
Thank you. Can you elaborate on financial performance per brand in Q3 2023?
It's more or less touched by Monica in the last section of our presentations. From a high-level perspective, we have an evolution despite the magnitude of the figures for each brand in line with our expectations from the guidance. KFC Romania overachieved. KFC Italy slightly below. Pizza Hut in line, even though it's a negative performance. Taco Bell slightly above. All in all, that's why we are positioned with the Q3 in line with the expectations embedded in the guidance. We are looking forward to quarter four to be able to deliver at least the guidance published.
The next question, can you elaborate on cash flow report in Q3, I guess, 2022? There is a mistake.
Cash flow, it's very strong. We are generating still positive cash. We have the position of RON 87 million at the end of September. We have a fully detailed cash flow in our financial statements. We have you know implemented all the initiatives meant to secure our strong cash position and to minimize the debt. From here, the expectation of no withdrawals for Q4. We have recalibrated a little bit the cash flow from investing, where we have shifted some project in 2023. Again, with the clear purpose to put us in a very safe position from a cash perspective.
Great. Next question. What is your view on the price supply evolution for chicken?
Uh, well-
What are the main sources for supply of chicken, domestic or international markets?
Yeah. For this area, we remain prudent in estimating the chicken impact. It might be inflated as a result of energy market, as mentioned by me. Here, we'll not hesitate to take advantage of any opportunities. You remember our trial with Ukraine that help us from this point of view. We focus a lot, and we have efficiency that we saw already in terms of calibration with the local producers. This is one of our internal main focus in this moment.
In addition to what Vali said, we believe that the worst is behind us. We don't exclude future increase, but depends if the government will cover part of the cost of the energy starting with the first January. Can be a huge difference if not. For the next question regarding the main sources for the supply, chicken, almost 80% of the chicken is from Romanian suppliers. The rest is from abroad.
Great. Thank you. The last question. Just a kind reminder, if you have any follow-up or additional questions, please type them. Now we're going to address the last question that we have on the chat. When do you see Pizza Hut breaking even as business unit?
As mentioned couple of times in our previous call, Pizza Hut it's one of our priorities. It's on the negative territory still of this year. Obviously it's highly dependent on the result of the analysis that we are performing right now. We do not expect overnight transitions, but hopefully next year we'll be able to be on a much better situation than we are this year. Again, it's very important to see how we'll finalize the negotiation and what will be the output of this. The priority is to do something relevant as fast as possible.
We have the next question regarding chicken from Ukraine. How much is in your total plans, and what are your plans?
Yeah. As a weight, it's minimal, so it's nothing to count on overall picture. What was huge importance for us, it's the opening of a new market and the possibility of having comparable products and a different pressures in terms of sources of acquisitions. We are monitoring this in the sense that if can be increased, we'll try to maximize it. Now due to the war, it's something that we just you know exploit whenever it's available in terms of transportation and product availability.
Great.
I saw that, yes, 80% of the chicken is sourced domestically from 9 Romanian slaughterhouses.
Perfect. Like this, we just answered the last question. If you have any additional questions, please type them right now or we are going to wrap up the call. Other than that, we would like to thank you for joining this call. The next call will take place in February 2023 to comment on the preliminary results for 2022, and we hope to continue to deliver equally great performance as we had in Q3. Thank you all very much, and we look forward to seeing you all soon.