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

Good day everyone and welcome to the ARCA Continental fourth quarter 2025 conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask questions at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. In the interest of time, we ask you please limit yourself to one question. Please note this call is being recorded. I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Melanie Carpenter of IDL Advisors. Please go ahead.

Thank you, Operator. Good morning, everyone. Thanks for joining the senior management team of ARCA Continental. to review the results for the fourth quarter and full year of 2025. Their earnings release went out this morning. It's available on the company website at arcacontar.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, the Chief Planning and Strategic Capabilities Officer, Mr. Jesus Garcia, and the Chief Operating Officer, Mr. Jean-Claude Tissot. 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's going to begin the presentation. So please go ahead, Arturo.

Thanks, Melanie. Good morning, and thank you for joining us today to review our fourth quarter and full year 2025 results. 2025 was a complex and challenging year for our business. We faced extreme weather events, operational disruptions, and a volatile macroeconomic backdrop. These factors influenced consumption patterns and weighed on traffic in several of our markets. Our teams responded with agility and discipline, delivering strong execution, sustaining profitability while continuing to invest in the long term foundations of our business. In many respects, 2025 marked a transition year. We navigated heightened volatility while staying firmly focused on what we can control. We made meaningful progress scaling digital platforms and analytics to enhance commercial capabilities, strengthening our end-to-end supply chain, and driving productivity across the organization. As a result, we closed the year with stronger fundamentals. greater operational flexibility, and improved readiness to capture opportunities as conditions normalize. We are confident in the strength of our operating model and our readiness for the period ahead. Moving on to our consolidated results, for the fourth quarter, total consolidated volume declined 0.8%, and for the full year, 2.1%. Consolidated revenues in the quarter were down 0.6%. For 2025, revenues increased 4.6%, supported by revenue management, effective portfolio mix, and strong execution across channels. Consolidated EBITDA in the fourth quarter declined 4.5%, posting a margin of 21%. Full-year consolidated EBITDA increased 3% to a record level, surpassing 50 billion pesos for the first time in the company's history. underscoring the resilience of our operating model and continued focus on profitability. Now, let's review the performance of our operations. Our beverage business in Mexico ended the year on an encouraging note, delivering a gradual and sequential volume recovery in the second half, supported by our sophisticated revenue growth management capabilities, portfolio optimization, and continued progress in returnable packaging initiatives. In the fourth quarter, unit case volume, excluding jug water, declined 3%, cycling exceptionally strong growth of 7.8% and 3.5% versus the same quarter in the prior two years. For the full year, total volume declined 3.4%, reflecting strong 2024 comps. Sparkling verages declined 2.5% in the quarter, partially offset by outstanding sequential double-digit growth in Coca-Cola Zero. This momentum was supported by expanded coverage and affordable packages, including the 450-milliliter non-returnable format. Remarkably, Coca-Cola Zero achieved a CAGR of 15.8% in the last five years. Spills increased 2.8%, led by teas, dairy, juices, and nectars, driven by sustained momentum in the modern trade channel, mainly in supermarkets. which were up 6.3%. Net sales grew 1.2% in the quarter, with average price per case, excluding junk water, up 5%. For the full year, revenues rose 1%. EBITDA in the quarter increased 5.1%, reaching a margin of 23.9%. For the full year, EBITDA declined 1.7% with a 23.4% margin, supported by disciplined expense control, operational efficiencies, proactive hedging initiatives, and favorable negotiations on key inputs. Looking ahead, we will continue to accelerate the deployment of digital capabilities to drive operational efficiency and improve visit frequency and effectiveness. Key initiatives include broader use of Tuali and the suggested order tools, along with new AI-driven inventory planning and predictive analytics to further strengthen execution. Turning to South America, total volume during the quarter and the full year were broadly flat, reflecting softer results in Ecuador and Argentina, largely offset by growth in Peru. Total revenue declined 5.6% for the quarter. while increasing 3.1% for the full year. Fourth quarter EBITDA declined 14.9%, with margins at 22.2%. On a full year basis, EBITDA increased 6.5%, reaching a margin of 19.6%. Overall, our results reflect a gradual and uneven recovery across the region, with distinct dynamics by country. Taken together, the region remains and a constructive path, characterized by modest growth, improving fundamentals, and increasing confidence in the trajectory ahead. In Peru, our operation delivered a strong finish to the year, supported by resilient demand and solid execution across channels. Total volume in the fourth quarter was up 3%, cycling strong growth over the same quarter in each of the past four years. Notably, this was the highest quarterly volume since we assumed operations in 2015. Growth was broad-based across categories, led by sparkling up 1.9%, stills 1%, and water at 10%. Core brands Coca-Cola and Inca-Cola delivered solid performance, with volumes up 2.7% and 3.1% respectively. In stills, the water segment stood out, supported by double-digit expansion in Brand San Luis. Sports and energy drinks also contributed, increasing 2.6% and 8.6% respectively. Importantly, Powerade continued to build momentum following the rollout of its new formula, further enhancing its relevance within the category. For the full year, total volume increased by 0.5%, confirming a clear sequential recovery through the second half of the year. Volume growth was also supported by targeted market-focused investments. In 2025, our team in Peru installed nearly 44,000 cold drink units, reaching our highest coverage level to date. This momentum, combined with disciplined execution, drove value share gains in non-alcoholic ready-to-drink beverages across both sparkling and still categories. Moving on to Ecuador, volume in our beverage business declined 5.4% in the quarter and 4.4% for the full year, reflecting a consumer environment that remains moderate though constructive. Despite this backdrop, we sustain a solid competitive position, delivering value share gains in both sparkling and still beverages. These results were supported by affordability initiatives, particularly the expansion of returnable packages. Notably, the mix of returnables increased by 0.3 percentage points during the year. We also continue to strengthen our portfolio through innovation with the introduction of the Flashlite brand to compete in the fast-growing rapid hydration segment. Looking ahead, we remain focused on sustaining profitability through disciplined cost management and efficiency optimization across the supply chain. Now, lastly, to Argentina. Fourth quarter volume declined 1%. while increasing 5.2% for the full year, supported by selective pricing and affordability initiatives, with recovery led by the traditional trade. Our operation navigated this environment through strong in-market execution and a continued focus on returnable packages. We also delivered value share gains. in NARTD verages, with single-serve packages gaining traction and driving a 1.1% improvement in mix during the quarter. These gains were led by remarkable performance in the energy category, highlighted by the strong momentum of Monster. In addition, our digital agenda continued to advance, with digital sales reaching 75% supported by the rollout of our proprietary B2B platform, Twily. Our beverage business in the United States delivered another year of strong financial and operating performance. In the fourth quarter, volumes grew 2.2% and transactions increased 3.5%, reflecting our focus on sustaining consumer engagement and driving interaction at the point of sale. For the full year, volume declined 1.2%. This quarter showed broad-based momentum across categories. Our low-calorie portfolio grew by 9%, with Coca-Cola Zero up 11%, Diet Coke up 2%, and Diet Zero Dr. Pepper up 10%. Still beverages increased 3.7%, driven by strong performance by Monster, Fairlife, and our water brands, supported by excellent holiday point-of-sale executions. Quarterly net sales rose 4.9%, with average price per case up 2.8%. Full-year net sales increased 3.3%. EBITDA in the quarter declined 4.3%, with a margin of 17.5%. For the year, EBITDA increased 4.2%, with a margin of 17.2%. This is the highest full-year EBITDA margin since we acquired this operation in 2017, underscoring the strength of our operational model. Finally, we are pleased with the seamless integration of our recently acquired adjacent franchise territory in Oklahoma, which commenced operations on November 1st, further strengthening our footprint and growth opportunities in the region. To conclude our review of operations, the food and snacks business delivered low single digit sales growth for the full year, demonstrating strong execution despite a high single-digit decline in the fourth quarter. Discipline pricing, portfolio optimization, and operational efficiencies continue to support profitability and strengthen the position of our food and snacks business going forward. I will now hand it over to Emilio to discuss our financial results. Please, Emilio. Thank you, Arturo.