Arca Continental, S.A.B. de C.V.

Good morning, everyone. Thanks for joining the senior management team of Arca Continental to review their results for the third quarter and the first nine months of 2025. Their earnings release went out this morning, and it's available on the company website at arcacontinental.com in the investor relations section. It's now my pleasure to introduce our speakers. Joining us from Monterey is the CEO, Mr. Arturo Gutierrez, the CFO, Mr. Emilio Marcos, and the Executive Director of Planning, Mr. Jesus Garcia. They're going to be making some forward-looking statements, and we just ask that you refer to the disclaimer and the conditions surrounding those statements in the earnings release for guidance. And with that, I'm going to go ahead and turn the call over to the CEO, Mr. Arturo Gutierrez, who is going to begin the presentation. So please go ahead, Arturo.

Thanks, Melanie. Good morning, everyone, and thank you for joining us today to review our results for the third quarter and to share some important recent developments. Let's begin with our consolidated results. I'm pleased to report another quarter of solid execution and sequential progress across our territories, even as the broader economic environment remains challenging. Our teams continued to navigate market headwinds with agility and discipline, driving robust profitability. Total consolidated volume declined 1.8% in the quarter, while consolidated revenues grew 0.5%, supported by effective portfolio mix and revenue management, partially offset by unfavorable FX impacts. Consolidated EBITDA grew 1.2% in the quarter, reaching a margin of 20.4%. This achievement marks a significant milestone, with third quarter EBITDA margin at its strongest point since the acquisition of our U.S. operation in 2017. These results underscore our relentless execution, the strength of our portfolio, and our continued focus on driving profitable growth. Let me expand on the results across our geographies. In Mexico, unit case volume excluding jug water declined 2.9%, largely reflecting the impact of heavy rains and below average temperatures across much of our territory. Despite these temporary weather-related pressures, still beverages grew 2.2%, led by tea, juices, and nectars and energy drinks, capitalizing on the positive momentum in the supermarket channel. Coca-Cola Zero continued to outperform, delivering sequential double-digit growth supported by the introduction of the new 450-milliliter format, which continues to resonate with consumers seeking convenient and affordable options. Santa Clara brand continues to deliver strong performance in Mexico, achieving double-digit volume growth rates supported by robust momentum in flavored and specialized milk. We continue to gain value share in the value-added dairy category, reflecting the strength of our innovation and discipline execution. Net sales grew 2.8%, with average price per case excluding jug water up 6.4%. underscoring our strong revenue management capabilities. EBITDA decreased 3% in the quarter, resulting in 23.9% margin, reflecting our disciplined commercial execution and solid revenue management capabilities in a softer demand environment. In South America, total volume declined 0.6% in the quarter, primarily due to softer performances in Ecuador and Argentina. This was partially offset by growth in Peru. Total revenue declined 13.6%, and EBITDA was down 1%, with a margin of 18%. This quarter reflects a steady, though cautious, progression of the recovery that began in the first half of the year, with meaningful variation across countries. Collectively, our South American operations are advancing through a period of disciplined stabilization, setting the stage for more balanced and sustainable growth ahead. In Peru, total volume increased 2% in the quarter, supported by a stable economic environment and resilient consumer demand. Growth was broad-based across categories, led by sparkling up 1.7%, stills up 1.9%, and water at 4.8%. Our core brands Coca-Cola, Inca-Cola, and Sprite delivered strong growth, up 1.2%, 1.6%, and 8% respectively. Volume recovery remained consistent across channels, with convenience stores leading the way up 22%. Supermarkets showed a sustained rebound, while traditional trade maintained solid momentum, supported by our effective price-back and cross-category strategies, further enhanced by our digital capabilities. Turning to Ecuador, volume declined 1.2%, reflecting softer market conditions and a fragile, yet gradually improving macro environment. Even so, our team remained focused on executing our fundamentals and driving performance in the areas within our control. We sustained our value share in NARTD beverages, driven by continued growth momentum in steel beverages, up 3.6%. In the sparkling category, Coca-Cola Zero once again delivered solid growth of 2.2%, while Fanta and Fioravanti grew 6.2% and 3.6% respectively. The water segment rose 3%, showcasing the strength of our diversified portfolio. We also continued to refine our price pack and channel strategies, drive the adoption of returnable packages, and invest in targeted market initiatives to strengthen our long-term position. Year-to-date, we have installed more than 17,000 cold drink units, further enhancing our market coverage and reinforcing execution at the point of sale. In Argentina, volume declined 5.6% in the quarter, reflecting the near-term effects of the country's economic adjustment. Nevertheless, we gained value share across NARTD categories, supported by our sparkling portfolio and our continued focus on affordability and returnable packaging initiatives. While volatility remains, our disciplined execution and agile commercial approach positioned us well to capture growth as conditions normalize. Our beverage business in the United States delivered another strong quarter, sustaining solid momentum and achieving robust operating results. This marks our 30th consecutive quarter of EBITDA growth. Adding to this momentum, our US team was recognized as the best Coca-Cola bottler in the world, receiving the prestigious Candler Cup. We are proud to be the only bottler to have earned this award twice, underscoring our operational excellence and market leadership. These impressive milestones reflect our team's consistent execution and the strength of our business model. Solid performance this quarter was driven by effective management of our price pack architecture, disciplined cost controls, and continued focus on maximizing the value of our most profitable packages. Net revenues rose 3.5% this quarter, with the average price per case up 4.8%, supported by our strategic focus on boosting promotional efficiency through our trade promotion optimization digital platform. Volume for the quarter declined 1.3%, and transactions grew 0.1%. Key performance highlights included a 5.9% increase in our low-calorie portfolios, led by Coca-Cola Zero, Diet Coke, and both Diet Dr. Pepper and Dr. Pepper Zero. In the Stills portfolio, Monster, Fairlife, Core Power, and Smart Water continued to post sequential growth, supported by robust brand execution. Notably, EBITDA increased an outstanding 9.7%, representing a margin of 17.2%. In an important update on our digital agenda, our e-commerce business continued to deliver strong results, driven by enhancements in our eB2B capabilities and outstanding execution in the e-retailer space. I'd like to close our U.S. update by sharing our excitement for the 2026 FIFA World Cup and our role as host city supporters for the Dallas and Houston venues. With this partnership with the World Cup Organizing Committee, we will actively support the City's legacy programs and showcase our brand through targeted initiatives that engage fans and local communities. Our food and snacks business delivered a resilient performance, boasting a low single-digit sales decline for the quarter. While facing top-line challenges, our team remained focused on profitability through effective price management, portfolio optimization, and operational efficiencies. In line with our broader sustainability objectives, we continue to advance the Clean Label Initiative across our U.S. NAGS portfolio. This includes the removal of artificial colors, flavors, and preservatives, as well as the simplification of ingredients lists. These efforts exemplify our commitment to transparency, product integrity, and long-term consumer trust. And with that, I will now turn the call over to Emilio. Please, Emilio.

Thank you, Arturo. Good morning, everyone, and thank you for joining our call. As Arturo highlighted, the same factors that influence our performance in the first half of the year continue to play a significant role in the third quarter. The macroeconomic environment remains challenging, and weather conditions were still unfavorable. Even so, we have a sequential improvement in volume for most of our operations demonstrating strong team performance despite challenges. The improvement in volume, together with our solid revenue growth management capabilities and disciplined approach to expense control, resulted in an expansion of our consolidated EBITDA margin. Let me offer further insight into our financial results. In the third quarter, consolidated revenues increased 0.5%, reaching 62.9 billion pesos. Revenues for the nine months of the year rose 6.6% to 183.4 billion pesos, mainly driven by an effecting pricing strategy. On a currency neutral basis, revenue rose 3.8% in the quarter and 3% year to date. During the quarter, SG&A expenses rose 1%, reaching 19.4 billion pesos. Despite the contraction in volume, SG&A to sales ratio was fairly in line with third quarter 24 at 30.8%, reflecting our continued commitment to operational discipline. In the quarter, gross profit increased 1.2% to 29.5 billion pesos. while gross margin expanded by 30 basis points due to our solid price pack architecture and solid hedging strategy. For the quarter, consolidated EBITDA increased 1.2% to $12.8 billion, with a 10 basis point margin expansion reaching 20.4%. In the nine-month period, EBITDA grew 6.1%, reaching 36.6 billion pesos, while EBITDA margin decreased by 10 basis points to 20%. On a currency-neutral basis, EBITDA rose 2.6% in the quarter and 2.2% as of September. Net income in the third quarter reached 5.3 billion pesos for an increase of 3.5%. Net profit margin increased 20 basis points to 8.4%. Now moving on to the balance sheet. As of September, cash and equivalents totaled 32.3 billion pesos, while total debt stood at 63.9 billion pesos, resulting in a net debt to EBITDA ratio of 0.62 times. In our most recent board meeting, it was approved to distribute an additional dividend of one peso per share to be paid on November 5th. Combined with the ordinary dividend of 4.12 pesos distributed in April and the extraordinary dividend of 3.50 pesos paid in June, we will reach a total dividend of 8.62 pesos per share. This reflects a payoff ratio of 75% of retained earnings and a dividend yield of 4.3%. Total capex reached 11.8 billion pesos, representing 6.4% of sales. The investments were primarily directed towards expanding our production capacity, ensuring that we are well positioned and sustain future growth. We also continue to enhance our distribution and commercial capabilities, which are key for a long-term strategic plan. Looking ahead, we expect market volatility to continue throughout the rest of the year. We remain confident in our business strength and ability to create value despite challenging conditions. We'll continue managing expenses carefully to drive profit and sustainable growth. That concludes my remarks. I will turn it back to Arturo. Please, Arturo.