Becle, S.A.B. de C.V.

Good morning, and thank you for joining Beckel's second quarter unaudited financial results call. During this call, you may hear certain forward-looking statements. These statements may relate to our future prospects, developments, and business strategies, and may be identified by our use of terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, predict, project, will, goals, target, strategy, and similar terms and phrases, and may include references to assumptions, Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those in forward-looking statements. For all the foregoing reasons, you are cautioned against relying on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Before we begin, we would like to remind you that the figures discussed on this call were prepared in accordance with International Financial Reporting Standards, or IFRS, and published in the Mexican Stock Exchange. The information for the second quarter of 2024 is preliminary and is provided with the understanding that, once financial statements are available, updated information will be shared in the appropriate electronic formats. At this time, we would like to remind participants that your lines will be in listen-only mode until the question and answer session. Now, I will pass the call on to Beckel's CEO, Mr. Juan Domingo Beckman.

Good morning, everyone, and thank you for joining us today as we discuss Beckel's second quarter 2024 results. Before going into the numbers and key highlights, I want to take a moment to address the recent incident that occurred in our La Rojena factory. There was an accident that resulted in a fire, which has already been controlled and managed under strict safety protocols. We are in the process of assessing the damages and are working in collaboration with the authorities to address and investigate the causes of the incident. we have suspended operations in La Rojena until further notice. The incident was isolated to a single processing area with no impact on distilling, production areas, and aging of inventory in our warehouses. As a result, we do not anticipate material financial impact. However, we will give further communication to the markets as new developments arise. At this moment, the top priority of the company is the safety and wellbeing of our employees and their families, as well as providing support to local communities. Moving on to our regional performance in the second quarter, we faced challenges across most regions. Nevertheless, we maintained or improved our position in key markets due to successful executions offers strategic plans and resilience of our brands. The U.S. and Canada reported solid growth in volume and value, driven by the strong performance of key tequila brands. Our efforts to standardize inventory at the distributor level and enhance brand positioning have helped us successfully navigate the region's economic challenges and fluctuations in consumer spending. The EMEA and APAC region faced ongoing consumer demand, pressures due to geopolitical and economic headwinds affecting our shipments year-to-date. However, they are mainly driven by continued stocking at the distributor level, evidenced by the notably disparity between shipments and these depletions. Despite the volatile environment in EMEA, Asia's growth was strong. In the face of the continued industry contractions in Mexico, we maintain a market share leadership for strategic premiumization and pricing initiatives, especially with our tequila brands. Although shipments declined, depletions fell to a lesser degree, aided by positive trends in premium products. As the year progresses, we anticipate more favorable second half comparisons. Turning to gross margins, In the second quarter, we posted a margin of 54.3%, marking a 350 basis point increase from the previous year. This improvement was driven by regional price increases, our focus on premiumization, and our favorable product and geographic mix. Additionally, we benefited from positive agave trends. Overall, we recognize the challenges presented by the current economic landscape across several markets. However, we remain confident in our strategic approach. Our focus on premiumization and effective market strategies continues to drive positive trends and positions as well for the future. Going forward, we remain focused on leveraging our strengths and maintaining or improving our market presence. I will now turn the call over to Luis Felix to discuss our US and Canada results in further detail.

Thank you, Juan. Good morning, everyone. The United States and Canada reported solid second quarter 2024 results, despite the ongoing slowdown in consumption. Several factors impacted the region's performance, including ongoing inflationary pressures and slowdown in consumer spending. Despite these headwinds, we navigated the challenges resiliently, leveraging our strong brand portfolio and strategic initiatives to maintain steady growth. Please note that the results in the following remarks are presented on a constant currency basis. Net sales value increased by 12.1% compared to the second quarter of 2023. This was mainly driven by our communization strategy and a 16.6% increase in tequila sales, which benefited from the price increases in the first quarter of 2024. Shipments for the second quarter grew by 5.1% driven by double-digit growth in our tequila portfolio. However, continued resale destocking resulted in depletions falling by 5.2%, lagging behind shipments. Throughout the second quarter, we worked diligently on inventory standardization with our distributor relationships to gain better visibility on days on hand. Moving into the third quarter, we expect depletions to accelerate ahead of shipments as we work to maintain optimal inventory levels. Regarding specific categories, the tequila portfolio proved resilient, with depletions growing by 1.3% compared to the same period of last year, in parallel to the whiskey portfolio, which increased by 4.8% in the quarter. ready-to-serve remains the most challenging segment, underperforming compared to the trend seen in ready-to-drink. Looking ahead, we will focus on adding new flavors and variants and reverting the 1800 ready-to-serve to glass bottles. Due to inflationary pressures, consumer spending in the US continues to slow down across all price segments, particularly in the ultra and super premium categories. While recognizing the challenges and economic pressures affecting the industry, it's important to note that our product mix remains favorable. By leveraging our strong brand equity, we have avoided reckless pricing moves that could harm our profitability. Focus instead on sustaining our market position and long-term value creation. We're holding our leadership within price in line with our communization strategy. I will now turn the call over to Manuel Colom to discuss the Mexico and Latin America results.