SLAD’s underlying operating results were very strong in the quarter. Restaurant margins improved with lower food and paper, payroll and occupancy and other operating expenses. Royalties were higher due to the final step-up in our royalty rate. Additionally, a combination of items in other operating expenses this year compared to other operating income last year, generated a negative variance in SLAD’s EBITDA margin. Let’s turn to the 3D strategy of Digital, Delivery and Drive-thru. Digital sales grew 47% year-over-year, with sales from delivery, the mobile app and self-order kiosks providing half of system-wide sales in our geography. Identified sales improved from 16% last year to 20% in the most recent quarter. We now have over 75 million unique registered users in our database and more than 17 million average monthly users of the mobile app.
Its ease of use and multitude of functionalities, make it by far the most popular app in Latin America’s QSR industry. Even in Mexico, where we’re working hard to increase digital sales penetration, and we have the third largest QSR restaurant portfolio, our mobile app is by far the most popular in the country’s QSR industry as measured by active users. Delivery and Drive-thru sales rose by 48% and 17% in constant currency during the third quarter. Delivery accounted for 17% of system-wide sales with several markets generating a much higher contribution to sales. Delivery continued to expand, and we are still learning from the process. So far, the evolution is encouraging. Drive-thru sales rose 17%, accounting for 25% of system-wide sales in the period.
We have been very pleased with the sales growth in both off-premise channels, in addition to the strong results we have seen in on-premise channels for the last several quarters. Importantly, the Mobile Order and Pay functionality on the app is growing exponentially and supporting all sales channels, especially in SLAD. MOP has the second highest customer satisfaction scores across all those channels, which is helping increase overall customer satisfaction scores. As part of our successful digital strategy last month, we executed the nationwide launch of our new loyalty program to all restaurants in both Brazil and Uruguay. We are encouraged by guest response so far, and we have already reached 1.8 million members. We built on learnings from My McDonald’s Rewards around the world as well as insights generated through local pilots and a drive-thru-based loyalty platform.
Our plan is to roll out the loyalty program to several additional markets by the end of next year. Loyalty boosts the power of the mobile app by driving visit frequency while increasing the percentage of identified sales to provide a more personalized guest experience. We look forward to sharing progress on future calls. With above average returns on investment, we are accelerating opening some modernizations into the end of 2023, supported by stronger cash from operations and a healthy balance sheet. EBITDA growth continues to offset the planned deployment of balance sheet cash to fund restaurant openings and modernizations this year. As a result, the net leverage ratio at the end of September was a very healthy 1x and remained flat versus the end of last year.
Total debt rose modestly versus year-end 2022 due to the appreciation of the Brazilian real, which reduced the value of our derivative instruments. Also, as expected, cash flow from operations improved sequentially in the third quarter with seasonally higher EBITDA and an improvement in working capital performance. We expect to see similar or stronger cash flow from operations during the fourth quarter. Marcelo told you about our pace of openings so far this year and our confidence in meeting this year’s guidance. I wanted to add that 30 of the 45 restaurants we opened in the first nine months of 2023, used the modular and highly efficient restaurant 2.0 design, we told you about during our Investor Day at the beginning of this year. We also opened a flagship sustainable restaurant in Sao Paulo, Brazil with multiple sustainability initiatives, including 20 that have already been rolled out to all restaurants in the country.
It is worth repeating that the above-average ROI from both restaurant openings and modernizations provides compelling evidence that we still have significant room to grow for many years to come. These higher returns are expected to support continued growth and long-term free cash flow generation. More than half of all restaurants now have the experience of the future format. And we are very encouraged by the results from restaurant modernizations, which are generating at least high single-digit sales lifts and mid-teens returns on investment. We do not take these achievements for granted. Above-average ROIs are the result of a very disciplined and careful approach to restaurant development that has also benefited from favorable shifts in consumer behavior.
Once restaurants are open, operational execution becomes the key to success, and we have decades of experience on both fronts. Capital expenditures in the third quarter were $105 million, bringing the nine-month total to $228 million. We expect to accelerate growth over the coming years while retaining discipline with the development processes and return expectations and the healthy balance sheet that delivered outperformance over the last several years. There is still so much room to grow, and we intend to capture the growth potential in the most sustainable and profitable manner possible. Marcelo, up to you.
Marcelo Rabach: Thanks, Mariano. During the third quarter, we received recognition for the commitments we have made to benefit the communities we serve and to provide the best work environment in the QSR industry. Three of the six pillars of our Recipe for the Future are Youth Opportunity, Commitment to Families and Diversity & Inclusion. We received recognition related to these three pillars and across all three divisions from prestigious organizations like Great Place to Work, Revista SUMMA and MERCO. We are making progress with the other three pillars as well: Sustainable Sourcing, Circular Economy and Climate Change. So far, four countries have transitioned to 100% cage-free eggs, and we remain aligned with the U.S. market’s commitment to being 100% cage-free in all countries by 2025.
