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

Good day and welcome to the FEMSA's 3Q2022 results conference call. Please note this conference is being recorded and for the duration of all your lines will be in listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to ask a question. If you require assistance at any point, please press star 0 and you will be connected to an operator. I will now hand you over to Juan Fonseca.

Good morning, everyone, and welcome to FEMSA's third quarter 2022 results conference call. Today, we are joined by Paco Camacho, our Chief Corporate Officer, and Eugenio Raza, our COP. As always, we also have Jorge Collazo on the line, who leads COPE FEMSA's Investor Relations team. Today, Paco will begin with some general considerations on our quarterly results and strategy, and then Eugenio will provide more granular comments on the numbers. And after that, we will open the call to Q&A as always. Michael, please go ahead.

Thank you, Juan. And hello to everyone on the call. We appreciate your participation today. As you can tell from our quarterly results, positive momentum we have seen across our businesses for several quarters now is still going strong. Starting with proximity, OXXO Mexico delivered yet another strong set of numbers, with traffic accelerating its pace of growth on top of a robust ticket expansion that still reflects a resilient consumer environment and the positive performance of some of the key categories. This strong top-line performance, combined with a leaner expense structure, drove operating leverage which in turn allows OXO to deliver strong operating income growth. Beyond OXO Mexico, we continue to see dynamic growth trends, particularly in Colombia and in our Brazilian joint venture. Furthermore, as you probably saw, a few weeks ago, we have finalized the acquisition of Valora. We are already working in tandem with the team in Europe, and we will keep you posted on the plans and initiatives there in due course. For its part, OxoGas had another strong quarter on the back of increased vehicle mobility and finally reaching pre-COVID levels, as well as a strong corporate sales and wholesale activity, which together drove strong volume recovery. On the digital front, we continue to add OxoPremium and Spin by Oxo customers at an accelerated pace, reaching over 22 million and more than 4 million users, respectively. More importantly, earlier this month, Spin by Oxford received its definitive authorization to operate as a fintech in Mexico. This is a relevant milestone, as it will allow us to continue pursuing our ambition to become the permanent fintech in Mexico. As we expand its value proposition to solve more financial needs for its ever-growing user base, importantly, This would allow SPIN to operate level three accounts, significantly raising the peso amount that the user can deposit every month and making the product a better fit for small businesses. Along these lines, and as our digital ecosystem gains critical mass, we are also building the third leg of our digital strategy, the B2B component. That will accelerate the pace at which small businesses in Mexico adopt digital payments. This will, in turn, leverage and grow the use cases for SPIN and our evolving loyalty platform, thus creating a digital flywheel. For its part, our health division delivers stable results that were offset by currency depreciation, mainly in Chile, where our operations are still performing well against a demanding comparison base while facing a challenging macroeconomic environment. Within logistics and distribution, Envoy Solutions had a standout quarter with a strong top-line organic and inorganic growth in both nominal and stable margins. These figures reflect the full consolidation of our recent acquisition of Sigma Supply, enhancing our capabilities in the packaging vertical and allowing us to make more progress on efficient cross-selling initiatives. And last but not least, at Coca-Cola FEMSA, volumes grew across its territories and health drive double-digit increases at the top and bottom lines. Before I turn the call over to Eugenio, let me take a moment to comment on a couple of more strategic points. First, as you are not aware, A couple of weeks ago, we announced the retirement of John Santamaria, a CEO of Coca-Cola FEMSA, and Alfonso Garza, a CEO of FEMSA Strategic Businesses, effective December 31st. John and Alfonso have been key members of FEMSA's senior leadership team for decades, and they have been instrumental in making FEMSA the thriving enterprise it is today. We take this opportunity to again thank them and recognize their tremendous contributions to the FEMSA success story. As you know, Ian Craig will become Coke's FEMSA CEO and Constantino Spaz will become CEO of the strategic businesses unit on January 1st. We look forward to the exciting future Ian and Constantino will help us build. Finally, let me talk briefly about our strategic planning review currently underway. As Daniel mentioned during our last call, this process involves significant analysis to help us define the strategies to achieve our ambitious long-term value creation objectives, but also how best to work towards eliminating the valuation gap that exists between our share price and the true value of our business. In recent months, this topic has been top of mind for investors, prompting questions and speculation in the market about where we may be in the process, potential outcomes, etc. Therefore, and given the relevance of the subject, We want to use this call to make a clear statement. The process is ongoing. The analysis being done is broad and thorough, and we do not expect to comment further on this review or the resulting speculation on this call or in other interactions with the market until we are ready to provide a relevant update. Our target date for such an update is concerned with our four-quarter and full-year 2022 results in late February 2023. Rest assured that we have also heard the investors' community desire for greater transparency and more simplicity, loud and clear. We are taking these topics and others into account in our efforts. And with that, let me turn the call over to Eugenio.