Sigma Foods SAB

Good day, everyone, and welcome to ALPHA's Third Quarter 2024 Earnings Conference Call. Further details about our financial results can be found in our press release, which was distributed yesterday afternoon, together with a summarized presentation. Both are available on our website in the investor relations section. Let me remind you that during this call, we will share forward-looking information and statements. which are based on variables and assumptions that are uncertain at this time. It is my pleasure to participate in today's call, together with Alvaro Fernandez, Alpha's Chairman and CEO, Eduardo Escalante, Alpha's CFO, and Roberto Olivares, Sigma's CFO. I will now turn the call over to Alvaro.

Thank you, Hernan. Good day, everyone, and thank you for joining us. I'm happy to be speaking with you today as we present the single business structure we have been envisioning since 2020, in which Alpha is Sigma. Over the past few years, Alpha has effectively transformed its 50-year-old conglomerate structure into four separate business units with leading positions in their respective industries. This organization is providing our shareholders with full flexibility to balance their ownership stakes in EMAC, ASTEL, ALPEC, and SIGMA. By having complete independence from one another, each of these four businesses has the opportunity to achieve a fair valuation based on its individual merits and potential. This is particularly important for SIGMA. to which the investment community will soon have direct access in the Mexican stock exchange. It is encouraging to see that Alpha's share price rising as we move closer to the final structure. This increase reflects a portion of the attractive value opportunity concentrated around our branded food business. A number of essential conditions had to be fulfilled for us to finally spin off Alpec, especially over the past year. Fortunately, we received overwhelming support from all parties involved. We're raising $400 million in capital to reduce debt, as we have obtained consents from more than 91% of ALSA's bondholders, both of which provided the necessary clarity to move forward. The capital increase was oversubscribed by more than 2.6 times, offering shell hoarders a great opportunity to benefit from the upside of the transformation process through a subscription price of 10.75 pesos. Building on these key milestones, just last week, our shell hoarders approved our proposal to implement the last SPMAF. We are pleased to have reached this stage for Alfa's transformation with a remarkable turnaround in our petrochemical business, which reported its highest quarterly comparable EBITDA since 2022. These results prompted Alpec to raise its full year guidance by 13% to $675 million, driven by improved reference margins and stable demand. ALPEC has the capabilities to extend its full track record as an independent entity. Led by its experienced management team, the company has delivered growth and strong cash generation in every stage of the petrochemical cycle, supported by a highly competitive asset base. The timing is also right for Sigma to benefit from the simplification of Falsa's corporate structure. Sigma has been proactively enhancing its leadership position as it expands its core, integrates accredited acquisitions, improves profitability of its European operations, and steps up its efforts to develop new sources of revenue with disruptive capital growth. Sigma's diverse portfolio of leading brands across all its product categories, multi-channel distribution in 17 countries, and consumer-centered innovation offer a unique opportunity in the resilient food sector. We anticipate that these factors will align our valuation multiple with our global food peers, highlighted by the simplified Alpha Sigma structure. I will now turn the call over to Roberto to discuss SIGMA's third quarter results.

Thank you, Eduardo, and good afternoon everyone. Today, I'm delighted to discuss our standing results, highlight key regional achievements, share our progress in our growth initiatives, and unveil a pivotal new phase for SIGMA. To begin with, our performance this quarter has been extraordinary, achieving an all-time high in consolidated EBITDA for the third consecutive quarter. It's also our 14th consecutive quarter of year-on-year growth, reflecting solid consumer preference, leading to record-breaking polling. This consistent growth across all regions exemplifies our robust operational success, We're closely monitoring market conditions. For our better than expected progress, support an estimated $50 million further upside on our 2024 EBITDA guidance. Looking at the regional highlights. Mexico continues to demonstrate a strong trajectory with three consecutive quarters of record volume and EBITDA. Growth continues across all channels and categories. reinforcing our market leadership and deepening our connection with consumers. In the U.S. and Latin America, all-time high sales and volume have led to significant margin expansions. This performance was driven by our mainstream and Hispanic brands in the U.S. and by robust results in Costa Rica and the Dominican Republic in Latin America. Europe, meanwhile, is steadily progressing towards recovery, supported by operational efficiencies that have delivered the highest-earned quarter EBITDA since 2021. On the strategic front, we're actively making progress in developing new sources of revenue aligned with our long-term goals. We have recorded substantial given-year quarterly revenue growth in various of growth initiatives, These initiatives include Better Balance, our plant-based protein brand, Snacking For You, and our B2C e-commerce platforms. We're also advancing in the pilot phase of Netcort, our distribution business that connects Mexican and Latin American companies with U.S. consumers. As part of this effort, we launched a new brand, Mucho Gusto. Featuring heritage and novelty products designed to meet the rapidly growing Hispanic cooking needs. While these are currently a small portion of our revenues, each initiative has promising potential to be scaled up over time and complement our core business, supporting sustainable long-term growth. As we move forward, we're embarking on an exciting new chapter at Sigma. After supporting Alpha's transformation process through EBITDA expansion and contributing to the constant solicitation process by bringing bondholders closer to Sigma via guarantees, we have reached a pivotal moment. Equity investors will have the opportunity to invest directly in our business. This marks a significant milestone in our journey and opens new avenues for value creation. To wrap up, we're encouraged by the progress made by the SGMA team and look forward to what lies ahead. We're committed to maintaining this momentum and are optimistic about the future. Thank you all for ongoing support and trust in SGMA. I will now turn the call over to Eduardo for additional comments and closing remarks.