Hello and welcome to today's AmRest Q4 full year 2023 results call. My name is Jordan and I'll be coordinating your call today. If you're joining us via phone, you can register a question by pressing star one, or if you're connecting online, you can type any questions into the Q&A chat box. I'm now going to hand over to Łukasz Wachełko to begin. Łukasz , please go ahead.
Yeah, good afternoon, good morning, ladies and gentlemen. My name is Łukasz Wachełko, I'm representing WOOD & Company, and I have again the pleasure of moderating the call with AmRest after the results. The company is being represented by CEO Luis Comas, CFO Eduardo Zamarripa, and the Chief of IR Santiago Camarero. Guys, the mic is yours.
Thank you very much. Thank you very much, Jordan. Thank you, Łukasz. Good afternoon, good morning, everybody, and thank you for joining us in today's full year 2023 AmRest results presentation. I am delighted to share with all of you once again the results of the work we have done over the last few months and our expectations for 2024. 2023 has been a year in which we have finally left the COVID benchmarks behind. However, it has not been a year without major challenges. The geopolitical tension has been on the rise, and in addition, most of the economies of the European Union recorded significant weaknesses in 2023, especially in the second half of the year, suffering the impact of monetary tightening and the high cost pressure. As a consequence, consumption in the major advanced economies has slowed down and labor markets are gradually becoming less tight.
Nonetheless, and despite these headwinds, AmRest delivered in 2023 an all-time revenues record that reached over EUR 2.4 billion mark, with a growth of more than 14% versus 2022. But let us start our presentation with an update regarding our presence and brands in slide number two. As you know well, AmRest is Europe's leading restaurant operator with a portfolio of almost 2,200 restaurants in 21 countries across Europe, the Middle East, and China. We keep a balanced portfolio of franchise and proprietary brands that cover a wider spectrum of occasions of use. As a result, more than 30 million customers visit our restaurants every month, where they find a distinctive service provided by over 45,000 passionate employees. If we move to slide three, let me remark the most relevant events for 2023 that I would like to try to summarize in five points.
We achieved an all-time revenues record that reached over EUR 2.4 billion, with a remarkable growth of +14% versus 2022. The EBITDA generated during the year amounted to EUR 379 million, up to 16% compared to 2022. Profit generated in the period amounts to EUR 50.9 million, of which EUR 44.4 million came from continuing operation and EUR 6.5 million from discontinued operations, following the sale of the remaining business in Russia in May 2023. AmRest has continued to strengthen its financial risk profile after signing a new loan agreement for EUR 800 million and increasing both cash generation and equity accumulation during the year. Finally, we have successfully complied and delivered, once again, all key strategic financial milestones set 12 months ago in which we will share with all of you. Let me provide some insights into these different points. Let's start with the revenue evolution in slide four.
Despite the challenging environment that I previously described, AmRest registered an outstanding commercial dynamic that is the result of a customer-centric culture focused on service excellence and listening to our clients, a highly experienced management committed on the search for operational improvements and innovation, as well as a team of passionate professionals aligned on a common goal: to win the hearts of our customers. In this regard, AmRest's annual revenues amounted to EUR 2,432 million, an increase of 14.3% compared to full- year 2022. Like-for-like sales growth was 11.2%, while the number of total transactions increased by 5.3%. At the same time, you can find on the right-hand chart the evolution of the 12-month trailing average revenue per store that is growing steadily since almost three years now, providing a good indicator on the health of our business and generating important economies of scale leveraging sales.
On slide five, we are presenting some additional insights on our sales. First, the strong comeback of the dining activity, and second, the inexorable rise in digital sales. The adaptation to alternative consumption channels such as delivery, takeaway, or drive-thru has been vital in recent years. However, what we have seen in 2023 is that dining consumption has been the most dynamic channel and has recovered the levels recorded before the pandemic. Complementary to this situation is the reception of orders through digital channels. As you can see in the graph on the right, in 2023, for the first time, more than half of the orders we have received have been generated through digital channels. The preference for this channel is driven by the fact that it provides an attractive customer experience: speed, convenience, and personalization.
At the same time, from the restaurant's point of view, it provides better control of the orders and minimizes potential errors. In summary, it enables us to offer an attractive and tailored offer to our clients. All in all, it's a big step forward from a productivity perspective. In this regard, on slide six, let me expand on some tangible changes coming from the technological angle. The installation of kiosks, mainly in the QSR segment, has been key in the development of this segment over the last few years. As you can see in this slide, in the case of AmRest, sales in the QSR segment have increased by almost 80% over the last five years, thanks in large part to the increase in productivity generated by the installation of digital kiosks, which number we have multiplied by five in this period, reaching more than 3,500 units.
In addition, I would like to take the opportunity to highlight that the group is immersed in an ambitious technological transformation process. Let me share with you a few examples of projects we are working on this front and achievements. As you know, AmRest maintains the majority of IT services in cloud. To install and enhance inventory management and forecasting systems in all our restaurants is a key priority. We can also maintain a centralized and integrated e-commerce platform across the group, and we have also connected in real-time all the restaurants operated by the group, making accessible available information on the millions of transactions that take place at any time, on any country, and any of our brands. Jumping to profitability in slide seven, the EBITDA generation stood at EUR 379 million in 2023, an increase of more than 16% compared to 2022.
This represents an EBITDA margin of 15.6% compared to 15.3% in 2022. The EBITDA growth and margin expansions are the results of economies of scale, efficiency gains, and a moderation of cost pressures in the last month of the year. In terms of the operating profit EBIT, the amount generated was EUR 103.5 million, despite recording EUR 41 million in impairments. This represents an EBIT margin of 4.3%. However, let's stop here for a second to provide a higher insight on the impairments booked this year. As stated, the total amount of impairments reached EUR 41 million, of which almost EUR 30 million are related to the reevaluation of the Sushi Shop goodwill and nearly EUR 10 million to impairments at the restaurant level.
The impairment at the restaurant level is an intrinsic part of our business as a result of the success or failure ratio of the restaurants, new openings, and on changes on the relevance of our premises. In the case of the goodwill, as you know, at least annually, we have to review the valuations kept in books of our existing businesses. This year, we have concluded this analysis with evaluation adjustment for our Sushi Shop business due to the drop in profitability of the brand, whose main market is France, affected by the significant increase suffered during the year, especially in the price of fresh salmon and the new tax approved by the Norwegian government on salmon farms, which generated uncertainty for some months for producers and therefore for final prices.
This situation led us to revise the cash generation expectations for Sushi Shop for the short term, which, together with the increase in the discount rates for future cash flows, lowered the estimated net present value of the business. This situation has not prevented a significant increase in the profit generated by AmRest in the year that amounts to almost EUR 51 million compared to EUR 6.6 million in 2022. In slide eight, let me express that AmRest continues to strengthen its financial risk profile. I will elaborate this idea in three points. We are increasing our cash generation that is resulting in higher investments compatible with lower financial leverage that currently stands at 1.8%. We accumulated over EUR 70 million of equity during the year. This is an increase of more than 1/5 of the total amount that we had just one year ago.
And finally, a very important step for us, we signed a new loan agreement for EUR 800 million. This has been a very successful transaction, which corroborates our long-term relationship with all the financial partners we have been working with for years and allows for the incorporation of new leading pan-European banks with which we guarantee coverage in the 20 countries where we operate. In summary, this agreement corroborates the market confidence in AmRest's business model. In slide nine, we are providing a view about the changes in the AmRest restaurant portfolio. We ended 2023 with a portfolio of 2,188 restaurants after the opening of 114 new units, most of them concentrated during the last months of the year.
Likewise, we continue with the execution of the portfolio optimization strategy, which resulted in the closure of 20 equity restaurants that, together with the closure of some units from franchises well, most of them sub-franchises coming from our portfolio in France, resulted in an organic portfolio growth of 60 restaurants. In addition, as we have covered several times, we sold during the year all of our remaining business in Russia, comprised by 213 KFC restaurants. The summary results of everything that I explained is stated in slide number 10. We have once again successfully delivered on each year and every one of the commitments shared a year ago. We registered a 14% growth in terms of revenue, meeting with the double-digit growth guidance. We also expanded EBITDA margin despite the strong headwinds, especially from the food prices suffered during the year and the problems in some geographies.
The investments exceeded the EUR 200 million threshold, a CapEx increase supported by higher cash flow generation, and next, new openings were above last year's figures. Finally, leverage is well under control with a healthy level of 1.0x EBITDA. With this, let me share with you how we do see future. If we jump to slide number 11, please. There is no doubt that the process of technological transformation and the search for efficiency will continue to be some of the key issues during this year. In this regard, AmRest is extraordinarily well-positioned, focusing on the different KPIs. We expect revenue generation to grow at a high single-digit level, despite the challenges that consumer spending is facing in many countries. In terms of profitability, the EBITDA generation should grow at the double digit. Third, the investments should surpass again the EUR 200 million mark.
Our plan is to accelerate the transformation of the company through new renovations, IT investments, and new openings of stores. Next, the number of restaurants' openings will remain at a level similar to those recorded this year. Finally, excluding possible corporate transactions, leverage should remain at the low end of the range provided by the company. In summary, we consider that our company is well-positioned for a balanced growth and for accelerating the value generation for our shareholders and the society. Precisely that, in slide number 12, I would like to focus on this critical aspect for us that is the link between sustainability and value generation. At AmRest, we believe that each of us has a responsibility to build a sustainable future for the world around us. This belief guides us in everything we do.
Hence, our unique commitment to reducing our environmental impact, advancing the nutritional quality of our products, or promoting a healthier lifestyle. There are plenty of initiatives and actions that have been taken in these fronts during the last months. You can find a few of them in the slide, but I would like to remark three of them. We have donated more than 700,000 meals to those in need as a part of the Harvest food waste prevention program. Under our Food Sharing Day initiative, AmRest has also donated food to children from 150 NGOs in 60 cities and in nine markets, with the participation of more than 350 AmRest volunteers. To all of them, many thanks for making this possible. Under the Too Good To Go food waste prevention program, we saved more than 1 million food products from being wasted.
In summary, we integrate sustainability into all of our processes and decisions, aligning our objectives of growth, of generating value for our shareholders and the society. And with this, Eduardo, if you can cover the main financial highlights, it will be your turn. Thank you.
Many thanks, Luis, for sharing your insights with us. Good afternoon, everyone. It is once again an honor to share with you today the summary of the results achieved by the AmRest team during the 2023 financial year. First, let me emphasize that AmRest's commercial dynamics showed very strong growth, both in quality terms and quantity, in most of the markets in which we operate. Second, this improvement in these commercial dynamics is resulting in higher investments, a better financial risk profile, and in value generation for all our shareholders.
Luis has already covered the main highlights of our full-year figures, so let me skip slide 14 and jump directly to slide 15 with the main financial highlights for the fourth quarter. During the fourth quarter of the year, revenues amounted to EUR 628.9 million, 9.2% higher than the same period of 2022, with the same store sales level of 106% versus the last year. The most up-to-date information for 2024 in this regard points to a level of 99% to February 27, after a low start in January and a recovery in February. This situation is contemplated in the high single-digit sales growth guidance that we are providing for the whole 2024. In terms of EBITDA, we generated in the quarter over EUR 96 million, with an increase of 17.7% versus the previous year. The EBIT turns in slightly negative after the impairment booked.
And finally, CapEx accelerated to over EUR 107 million versus almost EUR 70 million a year ago. Jumping to slide 16, you can find quarterly sales and same-store sales index evolution. These trends support the success in our objective of ensuring that any of the 30 million customers who visit us each month find an attractive, relevant, and competitive offer in our restaurants. In addition, as we discussed, we are investing record amounts of resources in restaurant modernization. During 2023, we refurbished a record amount of more than 200 stores, which, together with the new store openings and the closure of non-strategic ones, provides a solid growth base for our future sales. Now, in slide 17, you can find our quarterly EBITDA and operating profit evolution. During the fourth quarter of the year, the EBITDA generated amounted to EUR 96 million, advancing by 17.7% versus the same period of 2022.
This is an EBITDA margin of 15.3% compared to 14.2% in the year earlier. In the case of the operating profit, we registered minus EUR 0.5 million loss after booking an impairment charge of Sushi Shop's goodwill of almost EUR 30 million. As Luis explained, an increased discount rate together with a review of short-term forecast profitability for the brand due to the experience suffered during 2023, with a massive increase in our costs of supplies, especially salmon prices, has led us to update our business valuation. If we go now to slide 18, you can find the cash flow generation. I would like to point out two things from this side. The first one, profit generated by the group, the net profit generated in the year, reached almost EUR 51 million compared to EUR 6.6 million generated in 2022. The second point is the cash flow generation.
As you can see, we had a growth in terms of operating cash flow generation despite the challenge in the perimeter after the sale of the whole Russia business. The result of this solid cash flow generation is that we have accomplished a record level of investments that will continue to support our growth with a controlled leverage. In this regard, in slide 19, you can find the organic changes in the restaurant portfolio. Following the seasonality shown in previous years, we accelerated the number of openings during the fourth quarter with 61 new units, bringing the total number of openings for the year to 114. On the other hand, the portfolio optimization led us to close 16 restaurants in the quarter, with a total of 54 during the whole year, of which 28 of them are equity stores and the rest 26 are mainly stores from sub-franchisees.
In other words, the impact in terms of revenue generation is very small. On slide 20, you can find the cash and debt evolution. The group's net financial debt amounted to EUR 397 million at year-end, with a reduction of almost EUR 220 million since the beginning of the pandemic, of which EUR 28 million was accomplished during the year. In addition, we maintained a prudent cash level of almost EUR 230 million in line with previous years. With this context, the group's leverage ratio continues to be drifting lower 1.8x versus 2x one year ago. Let me emphasize one more, that this leverage has been compatible with an acceleration of more than 44% in the investment carried out by the company, that currently stands at almost EUR 215 million, the highest figure ever for the group. In slide 21, you can find the terms of the financial debt structure and maturity profile.
The signing of the new loan agreement has smoothed the maturity profile of the debt in the next coming years. 92% of the current financial debt is long-term debt. Next, we will focus on the results by different segments. On slide 22, you can find the breakdown of revenue, EBITDA, and the number of restaurants which we have in each segment. Segments that comprise business across 21 countries and that we were expecting after many years of highly synchronized across them. We have started to see different dynamics across the different markets. As usual, let's start with our more relevant region. In slide 23, we provide the main metric for Central and Eastern Europe. Quarterly revenues reached almost EUR 350 million, with a year-on-year growth of 13%. EBITDA stood at almost EUR 72 million that represents a margin of 21%.
For the full- year 2023, sales amounted to EUR 1,134 million, with a year-on-year growth of 30%. On the EBITDA side, we generated EUR 267 million, almost EUR 51 million more than in 2022, representing an EBITDA margin of 20%. The restaurant portfolio reached 1,176 units after increasing 49 restaurants, with the openings of 65 new restaurants and the closure of 16. On slide 24, we will cover Western Europe. In this area, our quarterly revenues were almost EUR 235 million. This is 5% versus last year. The EBITDA generated was over EUR 29 million, almost the same that one year ago, and represents an EBITDA margin of 12.5%. In terms of full-year figure, revenues amounted to EUR 903 million, 9% more than in 2022, and EBITDA generated amounted to EUR 119 million, with an EBITDA margin of 13.2%. However, I would like to highlight the significant performance differences among countries in the regions.
While Spain and Germany recorded double-digit sales growth, revenue generation remained soft in France. The total number of restaurants in the region stood at 924 units, with a net growth of 4% during 2023. From an organic perspective, there were 37 new openings and 33 closures, of which 12 were Pizza Hut sub-franchisees in France. Finally, in slide 25, we have China. Quarterly revenues reached almost EUR 23 million, an almost 13% increase versus one year ago. The EBITDA generated was EUR 3.7 million. This represents a margin of 16.5%. In full-year terms, the revenues generated during the last year stood at almost EUR 100 million, 21% higher than in 2020. The depreciation of the yuan against the euro significantly impacted the figures shown. In constant euros, that is, sales in local currency, the annual increase was 31%.
On the other hand, the EBITDA generated was EUR 20.5 million, representing a margin of 20.5%. Let me share a few thoughts on this. As you know, the Chinese economy entered a deflationary period in the third quarter of the year, which has accentuated in the last few months. This is resulting in the weakness of the consumption in the country. Nevertheless, although not immune to this general macro situation, AmRest's presence in the country through the Blue Frog brand continues to be a story of growth and good commercial position. Our footprint is concentrated in Tier 1 cities that are shown a higher level of resilience to the economic downturn, and the value perception of the brand is high. AmRest closed 2023 with 88 restaurants in the region after increasing the portfolio by eight units during the year, with the opening of 12 new units and closure of four.
Revenue in the fourth quarter stood at EUR 22.7 million, an increase of 12.6% compared to the same period in 2022. EBITDA amounted to EUR 3.7 million, with a margin of 16.5%. This is all from my side. Back to you, Luis.
Many thanks, Eduardo. Yeah, definitely. 2023 was a special year for us, marking the 30th anniversary of our organization. By the way, sorry. It was a year filled with numerous reasons to celebrate, but at the same time, it was a very challenging year. However, we have a team well-known for its adaptability, commitment, and creativity, and we have proved it once again. As we look ahead, I'm filled with optimism and excitement for what the future holds for us. So many thanks to everyone. With this, we are open to any questions that you may have. Thank you.
As a reminder, if you'd like to register an audio question, please press star one on your telephone keypad. If you change your mind, please press star two. And please ensure you're unmuted when speaking. For those of you connecting online to view the presentation, you can type any questions into the Q&A chat box.
Okay, so maybe I will take and use my privilege of moderator and ask a few questions from my end. Well, first of all, thank you for the presentation. You've said that January was a weaker, slower start, but the things started to go better in February. Was it the case across all the markets, or was it just specific markets where that was the most visible?
Thank you, Łukasz. Yes, I think we are facing both Europe and U.S.
Both of the two regions are facing kind of a slow start of the year versus our own expectations. This was very significant in the first two weeks of January. I think the Christmas period really was not as strong a post-Christmas period was not as stronger as we were all expecting. However, we have seen a progressive positive recovery of the expectation, especially after Saint Valentine's Day. We are observing that across almost all regions. I think there are some variances, a few points different, but all over the whole Europe territory is behaving in the same way. Probably, I may say that there is a better heading up this recovery trend, Central Europe at the moment, but not significantly to be indicated as one exception. All the Europe is behaving in the same territory.
Okay, thank you.
Can we dive a bit more into two markets which stood out in the fourth quarter? The positive surprise of mine was Poland with EBITDA up 40%. Can you shed more light on what was behind this kind of super growth?
Sure. I think Poland, as you all know, is one of our main countries and markets. Definitely, the representation of close to 630 units that we operate in Poland is significant. We really manage and influence the market behavior. I think Q4 was, again, a proven case of adapting our offer and value offer to the market trends and conditions. We have observed that Poland has also evolved into positive retail forecast, and retail activity is also going up. So we are observing that as more traffic, better spend, and so both lines are positive in the full thing.
Poland, in most of the brands we operate, suffered a fantastic recovery across the year. Especially, I may highlight both KFC and Starbucks, and both also Pizza Hut. All the brands, the four brands we operate in Poland, did very well by different marketing campaigns, different value proposition offers, but they all kept in the positive trend in Q4.
Okay, thank you. And on the other end of the spectrum, can we get a bit more of light for the weakest market of yours, so fourth quarter, France? Assuming that the prices of salmon stay at the current levels and the consumer is pretty much as it's currently, should we expect this year to bring another write-down of the goodwill, which still stays at EUR 112 million, or we shouldn't expect one and that was just at these stages, all the negative things are already priced in?
How do you see the French market?
Okay, the French market across all brands and most of our colleagues, competitors, have seen a very mild market condition. It happened at the very end of last year, in the mid-year. So top line was affected by economy trends, macro factors affecting most of us. However, when you describe salmon impacts and the future, I think this is another topic, which was probably one in a case that we were observing an increase of the cost of the most important, the largest important ingredient for us, which is salmon on the food for Sushi Shop. You know that the increase on VAT by the Norwegian government was pre-announced time ahead of the final decision. Therefore, most of the suppliers, farmers, and vendors, and the whole distribution chain adopted ahead-of-the-curve increases on the cost.
Therefore, we were unfortunately not able to pass through the whole impact that we finally observed. We wanted to maintain our profitability, and we also wanted to maintain the equity value for the consumer. We wanted to be sure that the brand was rightly placed for long-term growth as well. We didn't pass all the price increase through the consumer. However, in this starting part of the year, I must say that we have observed both deflation in some of those main ingredient costs, which is helping us. It's also significant that part of the delivery channel activity and aggregators is picking up better performance than in the previous year and better performance than in the last quarter.
So this is kind of a small good sign that the market is not only changing trend, but at least stabilizing, or if any kind of a highlight, maybe a slightly improvement observing across the whole market. France in general, not only Sushi Shop, but both Pizza Hut, KFC, and as I mentioned, our competitors suffer a lower consumption rate than ever, than any other country in Europe. That was a very clear sign of inflation, taxes, remember, strikes, many difficulties to access main cities, many consumers, barriers, and thresholds were placed last year. And this year, that made that revenue consumption was not so easy to make it happen.
Okay, thank you. So would it be reasonable to say that fourth quarter was the weakest quarter for the French business, and you were expecting some kind of recovery going forward, or it's premature?
Well, knowing which one is going to be the worst is kind of a futures assessment. We never know. But definitely, it was weak. Definitely, it was a weak one. It was under our expectation. It was affected, as I mentioned, by many factors, and we were not so happy for that. How we can see quarters to come is probably a little bit earlier because we are just ending February, starting March. Q1 is still not fully completed. We might observe things like Easter falling in different periods of the year. Holiday breaks are placing in different weeks of the year. So we need to wait a little bit more to understand the full recovery trend. The small food recovery trend that we are observing is not a granted trend line, but at least it's better than what we are observing.
So far, we are arriving to match our expectations, which was not the case in last quarter, last year.
Okay, great. Thank you. And maybe now I'll leave the floor to others for questions.
As a reminder, if you'd like to register an audio question, please press star one. Or if you're connecting online, you can type any questions into the Q&A chat box. We've received a question asking, "In the reference to slide five and the growth of digital channels, can you please elaborate about the expected impact for future profitability considering the expansion of the channel, or what is the expected size of the channel in 2024 in total sales?"
Thank you. The growth here is significant. As you can see, technology improvements were applied to our business model in the last three years, significantly after COVID days. Why so?
Because we have observed that there are different consumers which are preferring different ways of buying. Let me say, for example, younger generations are more used to using mobiles and mobile apps and devices. Therefore, we provide the options for them to place their order through either kiosk, either through our e-commerce platforms, either through our applications. It's just a way to enhance the way of ordering at their way, their pace, their rhythm, and their option. When you give this freedom of options, customers react positively. So digitalization has, first of all, a better opportunity to capture extra sales from consumers which are finding now more easy and more affordable ways to order, either ordering ahead of a pickup order, placing their order on the kiosk themselves, or placing their order through a table service model in a mobile phone when they enter a KFC store, for example.
Those are consumers' points of view. Business indicators are also telling us that those accessible options for the consumers drive better ticket average. The consumers spend more time, more relaxed time to dive around our menu options. They analyze all the menu, and usually, the ticket average goes higher from 10% to 15%+ to the dining front-counter standard ticket average. So that's another impact. And finally, there is a productivity, clearly, in terms of cost of labor. We are allowing people to be allocated into different positions. We are probably not using as many cashiers as we were using in the past, and that's definitely a productivity improvement. But the consumer is not affected by that. So it's a win-win solution. We are both offering the best service possible.
We still remain offering face-to-face interaction at all our service model, which is still demanded by a big, large part of our consumers' groups. So both are there. Options are there. We can see this growing. We are starting to invest also in innovation in this regard. There are many things that will come here, not only in the front-of-the-house options. We are also investing in artificial intelligence programs that are helping us to be more productive, both in the scheduling, both in the inventory order system, and maintenance, energy consumption activities. That's affecting the whole margin impact of the store level. In the front-counter, face-to-face interaction is also affected by innovation.
We are considering innovation that will be a proven way to improve productivity, both at drive-through lines, in the kiosk setups, and so the flows of the consumers can extend and allow more traffic to happen in a more ordered way. So many options there. And we also keep investing, you may say, at our group structure. As we mentioned on the very introduction, our systems are now in a single cloud. We manage all information in a more productive and efficient way, and we keep investing in that. That's also saving us to have a much better productivity in terms of offices and G&A and a structure overall, the group. So all the fronts are covered by an increase in this demand.
Thank you. Our next question comes from J.P. Rolandez of The LT Funds. J.P., the line is yours.
Yes, hello, and congratulations for this 2023 results.
If we exclude the one-off non-cash charge of EUR 30 million, in fact, there are record results throughout. So my question is about your 2024 outlook. If we exclude this one-off of your Q4, you are on a 6% EBIT margin. And therefore, I guess we can expect this 6% EBIT margin to carry on throughout 2024, especially as you are improving the network of stores. You are closing unprofitable stores or low-profitability stores. So is it fair to say that your 2024 guidance is reasonably safe in that context? Because in addition, if you are opening 60 stores, 60 new stores, or 40 new stores net, that should mechanically add growth.
Yes, you're right. Thank you, J.P., for your words. Absolutely right. As you know, our main strategy is to keep growing in a profitable and sustainable way, and this is our main driver.
So all the actions we are doing, we are taking, are related to managing a profitable portfolio for long. And we are aiming to increase our margin year on year. That's the way we are trying to manage the company. So all these guidance expectations we just share are following that strategy for a few years now. And that's what we expect: productivity measures, investments, better location management, better labor engagement of the team. I may share something I haven't mentioned before, but our internal barometer scores for our AmRest-based population across the organization are reaching top high-ever score numbers of engagement and participation, which is also one of the key drivers of our productivity, innovation, and consumer operational excellence. So all the lines are heading into the right direction to make that possible.
This is the way we are trying to manage the company: sustainable, profitable growth across our geographies and all brands. I don't know, Eduardo, if you want to share anything else on top of this comment.
Yes, thank you, Luis. Thank you, J.P., for your question. You have a very interesting approach. At the end, of course, AmRest is the cumulative of the results of a lot of regions, as we were saying, 2021 countries with several brands. Of course, the dynamics are different. What is very important is to maximize the relation that we have across them. As we were saying, we have regions that are performing in very positive ways. We have particularly one brand, one country that suffered. A comment following Luis' ideas is the focus of the company is to increase the profitability.
That's where we are taking all the steps forward in order to comply with that. Of course, we need the sales. If we have the sales, that flow goes even to the bottom line. It's important to have all the activities related to that. That's why I connect this with the previous question: what is happening with the kiosk, which is the approach that we are having to our consumers? If we can increase that level, of course, the leverage that we have is higher. Then how we work in terms of our cost of sales. We are coming from some years that this has been a huge pressure. Down now, inflation rates are lowering. This should be also positive for us, how we leverage our G&A.
Of course, as you also, J.P., pointed out in your question, the portfolio that we have right now is more focused on the strategy that we have long-term. We are investing in regions, in the brands that make more sense for the profitability of the business. So we are working towards that, as you mentioned.
Thank you. I have a second and last question. Is the Sushi Shop issue completely clean now? You never know, of course. But is it fair to assume that there will be no further write-off around Sushi Shop? It's not a write-off which is split over a few years, but just a complete clearing-up the desk exercise.
Yeah, I think the full assessment is a mix of many factors. And I think the highest-ever inflation in the key ingredients that happened and we faced last year was kind of unique.
We could never expect such a variation of our cost of sales structure for long, affecting us so much for so long. This is now going down. As I mentioned, the salmon prices are now stabilizing. Consumption rate is moderately coming up. But on the top of that, we have taken some opportunities to keep improving our margin efficiency through productivity measures and inventory management, and also sales opportunities for our business. So from developing better consumer applications on the Sushi Shop world, from improving our loyalty program in Sushi Shop, from improving our teams that are our people that are sushi men and the way we operate the kitchens and how we do serve and operate the product, we have been taking many, many actions that are improving our operational efficiency.
So in general, we are observing that that big impact last year is now going in the down direction. We cannot expect, at the moment, any impact like that. But you never know, as you mentioned. This is kind of a market conditions. The good things that we can manage are better sales, better efficiency, deflation on key products, and so margins are recovering. This is the way we can share at the moment.
Okay. Well, thanks very much and congratulations overall. And let's hope 2024 will be as good.
Thank you.
Thank you very much. We hope so too. Thank you.
We have no further questions. So I'll hand back to the team for any closing remarks.
No, I just want to, first of all, say thank you, all of you, again, for joining this call and sharing and being able for us to share our great results.
I think this year is proving a solid pattern of good performance in our company. This is one of the key pillars. All of our restaurants are the drivers of this success. We are extremely happy. Last year was our 30th anniversary of the company, and this is kind of a fantastic achievement that we have been celebrating for all this past year. So again, thank you for listening to us, and thank you for being part of the AmRest stakeholders' world. We really appreciate your time and investment with us. Thank you very much.
Thank you.
Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.