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

Good day, ladies and gentlemen, and welcome to FEMSA's second quarter 2025 results conference call. Please note that this event is being recorded. At this time, all participants are in listen-only mode. We will be facilitating a question and answer session towards the end of today's prepared remarks. If you would like to ask a question, you might do so by pressing star 1 on your telephone keypad at any time. I will now turn the call over to your host for today, Juan Fonseca, Investor Relations. You may begin, sir.

Thank you. Thank you. Good morning, everyone. Welcome to FEMSA's second quarter 2025 results conference call. Today, we are joined by Juan Carlos Guillermetti, CEO of SPIN, formerly Digital of FEMSA, Martin Arias, our CFO, and Jorge Collazo, who heads Coca-Cola FEMSA's Investor Relations team. This is the first time Juan Carlos joins us for a quarterly conference call as part of our ongoing efforts to provide more market access to our leadership team. The plan for today is for Juan Carlos to open the conversation with some background on SPIN, followed by a strategic discussion on where we are today in our digital endeavor, and just as importantly, where he sees SPIN going in the future. After his remarks, Martín will provide some detail on France's quarterly results. Finally, we will open the call for questions. Juan Carlos, please go ahead.

Thank you, Juan. Good morning, everyone. It's a pleasure to be here today discussing and sharing with you some of the exciting progress that SPIN has been making and what we're trying to build. Thank you for your interest and for joining us this morning. Let me begin by providing some brief context into why and how SPIN came to be. Not to make a trip down memory lane, but because so much of what SPIN does today and will do in the future Leverages and enables also and fences digital physical assets more broadly As most of you know also began developing a platform for basic cash payments and services many years ago Selling prepaid long-distance telephone cards and evolving over time by enabling its customers to solve an ever-growing number of needs From utility bill payments to correspondent banking to e-commerce payment functionality broadening the scope of its service offering along with the needs of its customers More recently, as digital platforms in the market launched and evolved, it became increasingly clear that FEMSA had an opportunity, as well as a strategic need, to develop its own digital platform, not only to complement its physical cash-based functionalities, but to evolve OXO's broader value proposition and strengthen its role as the most convenient way to meet everyday needs. Looking into the future, Convenience retail cannot be imagined without a seamless, integrated digital experience. Spin is one of the most important aspects of how we ensure that OXO continues to deliver convenience across both physical and digital ecosystems while accessing new profit pools. Since our foundation in 2021, we have envisioned an omni-channel ecosystem centered on payments and rewards. While we always saw it as an integrated experience, we launched Spin by Auxil, our digital wallet, and Spin Premia, our rewards program, as independent, fast-to-market products focused on gaining early traction. We then saw the need to complement these assets with a B2B platform to expand our reach beyond Auxil, which led to the acquisition of NetBay. We also acquired a minority equity stake and eventually the assets of Conecta, which has served as the enabler for OxoPay, the e-commerce payment platform where consumers can pay for their e-commerce in cash or other means within the safety of the store. Leveraging Oxo's capillarity and reputation as a reliable and trusted service provider and the commitment of our growing team of spinners, we have been able to consolidate a meaningful position in the market. Since inception, we have achieved the following major milestones. SpinBioxo has created more than 14.5 million SpinBioxo accounts, of which more than 9.4 million have been active in the last 56 days. We operate across the territory with strong penetration in nearly all municipalities. Our customer base is young and dynamic, with two-thirds under the age of 45 and more than 50% of our users are women. This is specifically relevant as women have historically been underserved by financial institutions. We continue to see strong adoption, repeat usage, and most importantly, growing trust from our customers. Every month, 3.5 million users trust us to move their money through Spin by Auxil, averaging more than 21 monthly transactions per monthly user, out of which 20% are related to Auxil, either cash in cash out, or card purchases, showing it is a very useful payment method. In SPINpremia, we have over 58 million SPINpremia accounts, of which 26.6 million have had transaction activity in the last 90 days. Currently, more than 20 million OXO customers benefit from the SPINpremia rewards program each month, with an average of more than seven monthly accumulation and redemption transactions per active user. As of the second quarter, Almost 46% of OXO sales were already identified through our loyalty and rewards program. Our ecosystem is complemented by our B2B initiative, which includes NetPay and OXOpay, in which we refer to us in Neosios. It extends our platform beyond OXO stores by offering electronic payment solutions and services to micro, small, and medium-sized merchants, both in their physical establishments and in e-commerce. Today, with Spin Negocios, we reach almost 20,000 merchants and process almost 12 billion pesos on a monthly basis. Spin is defining how consumers and businesses connect by creating faster, simpler, and more convenient ways to meet everyday needs. This gives us a meaningful opportunity to reach the 6 out of 10 Mexicans who remain underserved by traditional financial institutions. We aim to do so not only by expanding access, but by reimagining convenience through a digital lens. Our team is excited and committed to simplify life by removing barriers and creating opportunities for all. As we look ahead, SPIN is here to bring PEMSA's physical relevance into the digital space, and we're excited by the opportunity to leverage and enhance OXO's unique value proposition to an increasingly digitized customer base. What differentiates SPIN is our unique ability to be where people truly are. physically and digitally by combining accessible technology with trusted everyday touch points like Voxel. We have learned that our customers are looking for solutions that are neither purely digital nor purely in-store. By offering digital solutions or in-store digitally enabled solutions, we can maximize the value proposition delivered to our users. Cell phone pop-ups are a great example. The user journey can be digital only, but sometimes when customers run out of data and can no longer perform the top-up transaction from their phone, making an in-store cash top-up can perfectly fit into the ecosystem proposal. Similarly, digitalized customers can transfer money to recipients who only accept cash. These interactions allow someone to make a peer-to-peer payment to a service provider via QR code, which can then be cashed out in the store. Likewise, customers can pay for their online purchases through OXOpay and complete the physical payment, again, in the store. The data generated through the ecosystem will allow us to better understand each customer's context, deliver more personalized services and products, and unlock two major opportunities for FEMSA. First, evolve convenience by enhancing OXO's value proposition through data and personalization. making everyday interactions more relevant and seamless. In the long term, this foundation will enable additional use cases such as retail media, an expanded catalog, last mile delivery, and other e-commerce features like click and collect. And second, the opportunity to build financial services on top of payments and rewards, offering both savings and credit products tailored to our target segment. Related to this topic, we remain active towards upgrading our license and establishing a partnership to significantly improve our risk-reward profile. We can assure you that we will be cautious in testing and potentially rolling out these financial services, and we'll keep you updated as developments unfold. We promise no surprises. Touching briefly on the current economics of the business, Spence Cash Burn has been gradually improving as we continue to gain scale and cement best-in-class customer acquisition cost and cost to serve. From approximately 4 billion pesos a couple years ago to a range today that is closer to 3 billion pesos per year for the core spin businesses. As an example of what we have done to reduce cash burn, we have implemented several initiatives such as renegotiating commercial terms with dealers and connecting directly to SPACE. which together have allowed us to reduce our cost to serve by 48% compared to last year. These actions are part of our broader effort to strengthen SPIN's financial sustainability. Additionally, it's important to note that we follow a conservative approach for cash flow and accounting. A clear example are premium-related expenses. While these costs are primarily reflected in SPIN's P&L, the vast majority of its current benefits of increased sales are captured at the OXO business. Similarly, a significant portion of the benefits that SPIN by AUXA generates to FEMSA are not fully reflected in the SPIN cash burn. For example, SPIN by AUXA is the second largest driver of AUXA's cash inactivity with more than 25% of total transactions. Wrapping up, we would like to leave you with the message that we're uniquely positioned to help Mexico evolve towards financial inclusion. We want Spin to earn the same level of relevance, trust, and customer love in the digital world that Auxil has earned in the physical one with the intention not of replacing but complementing the store to create an omnichannel digital approach. And beyond offering a trusted platform for day-to-day needs, we are committed to driving financial inclusion and means opening new opportunities and supporting our customers through financial education. We have been focused on bringing world-class capabilities and talent to spin, and our leadership and way of work has evolved to one of a consumer tech organization facing fast-paced change and challenges. We're building something ambitious, something that matters, not only for us, but for the next 100 years of PEMSA, and we believe we have everything it takes to get it done. And with that, let me turn it over to Martin to discuss PEMSA's second quarter results. Martin, please go ahead.