Fomento Economico Mexicano S.A.B. de C.V.

Good morning and welcome everyone to PHMSA's third quarter 2021 financial results conference call. Today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the presentation, there will be a question and answer session. During this conference call, management may discuss certain forward-looking statements concerning PHMSA's future performance and should be considered as good faith estimates made by the company. These forward-looking statements reflect management expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which can materially impact the company's actual performance. At this time, I would now like to turn the conference over to Juan Fonseca, FEMSA's Director of Investor Relations. Please go ahead, sir.

Good morning, everyone. Welcome to FEMSA's third quarter 2021 results conference call. Today, we have a full team for you, as we are joined by Eduardo Padilla, FEMSA's Chief Executive Officer, Paco Camacho, our Chief Corporate Officer, Eugenio Garza, our Finance and Corporate Development Director, and Daniel Rodriguez-Cofre, current CEO of FEMSA Comercio, who will succeed Eduardo as CEO of FEMSA next January, as you all know. And as always, we're also joined by Jorge Collazo, who heads Co-FEMSA's Investor Relations Department. The plan for today is to have Paco comment on some higher-level trends we saw during the quarter, and then Eugenio will walk us through the numbers. We will then turn the call to Eduardo and Daniel for some strategic considerations and final remarks, followed by Q&A. So with that, let me turn it over to Paco Camacho.

Thank you, Juan. Good morning, everyone. Thank you for joining us today. We hope you and your families are doing well. In many ways, the third quarter marked a continuation of the dynamics we saw in Q2, gradually improving health and mobility trends, tempered by some operating reductions, restrictions that remain in place in many markets, and consumers that little by little feel more comfortable going back to what begins to look to them like almost normal activity levels. In our proximity division, same store sales in Mexico were stable sequentially for the quarter. Importantly, we began to see an improvement in the last part of September and through the beginning of October. This means that we are increasingly seeing figures that approach 2019 levels. This, combined with higher commercial income activity and a more efficient expense structure, is translating into margin gains at the operating and EBITDA levels. Moving on to our health division, we continue to see a solid performance driven by our operations in Chile, which continue to be a market where consumers have been showered with extra liquidity, even as we begin to lap a tough comparison base. Mexico and Colombia are also operating at encouraging levels, with Ecuador lagging a little because of a tougher macro environment. The fuel division continues to see a consumer that is gradually becoming more mobile and demand numbers that are improving even as we remain below pre-pandemic levels. For its part, our logistics and distribution operation grew its top line sequentially. Once again, balancing positive dynamics in several markets with some end user segments in the U.S. that continue to operate below 2019 levels, such as facility supplies and hospitality. As a result, profitability levels were in line with those in the second quarter. Importantly, we are already seeing returns on invested capital for the U.S. business approaching its WAP. Further, we have made good progress in expanding our footprint in key new markets and integrating the new operations into our platform. We are executing on the strategy we defined when we decided to enter this business last year, and the results are very encouraging. Finally, Coca-Cola FEMSA had a strong quarter in terms of volume growth, particularly in South America. we face a tough supply chain and raw materials cost environment, as well as a one-time adverse tax effect from the Brazilian operation that we were able to mitigate only partially through pricing, hedging, and operating efficiency. Beyond the short-term results and the core operations, we are making progress with our beer portfolio in Brazil, as well as pilot testing additional categories as distribution opportunities. With that, I will now turn the call over to Eugenio, who will go over the numbers in more detail.