Genomma Lab Intl Sab Ord

Ladies and gentlemen, thank you for joining Genoma Lab's first quarter 2023 earnings conference call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. As a reminder, this meeting is being recorded and will be available for replay from the investor relations section of Genoma's website following the call. I'll now turn the call over to Barbara Cano of the Inspire Group. Please, go ahead.

Good morning, everyone, and thank you for joining. On today's call are Marcos Barbieri, Chief Executive Officer, and Antonio Zamora, Chief Financial Officer. Before we get started, I'd like to remind you that the remarks today will include forward-looking statements, such as the company's financial guidance and expectations, including long-term objectives. and forecasts as well as expectations regarding Genoma's business, assets, products, strategies, demand, and markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially. They're also based on assumptions as of today, and the company undertakes no obligation to update them as a result of new information or future events. Let me now turn the call over to Mr. Marcos Barrieri,

Thank you, Barbara. Good morning, everyone, and thanks for joining us. We saw a good start of 2023 with all variables in line or ahead of the expected targets. Top line was up 15.2% year on year in like-for-like currency, excluding Argentina, and 4.1% versus year ago in Mexican pesos, affected by the strong appreciation of the currency. EBITDA margin was 20.8% plus 20 basis point versus year ago. We delivered free cash flow of 294 million. and a cash conversion cycle of 106 days. Our core markets perform well with 73% of our sales growing ahead of inflation with Mexico up 10.7%, US up 24% and Brazil up 8%. All figures express in local currency. In terms of brands, 61% of our sales grew market share, with most of our core brands growing ahead of our internal targets. Suerox is up 27%, Teonacho 21%, Grumman 17%, Novamil 51%, Tuco 86%, and Analgesics plus 20%. All figures expressed in like-for-like currency, excluding Argentina. In terms of productivity, this quarter we finalized three projects that combined will deliver a total of 120 million in productivity savings when fully implemented. As I mentioned in the investors, they strongly believe that the upside potential Genoma has is huge for four reasons. Number one, over the past 25 years, Genoma was able to create a set of capabilities that combined represent a competitive advantage. Number two, our business model is proven and it works. Number three, our stock price is obviously undervalued. And number four, if you put together our business model that works and you see that our market shares are still small, 5.4 points in ODC and 3.7 points in personal care, just imagine what is the growth potential for Genoma. Now for 25 years, we have been working to create a set of capabilities that combined represent a competitive advantage. Number one, our communication model is unique. We air 1.5 million minutes per year and produce 1700 spots at a very low cost. Number two, we operate in 20 countries with standardized operations and an executive team that is at the top of the industry. And number three, our go-to market that I personally created and implemented is today at the level of the top companies in the market. We are committed to deliver our 2025 targets of reaching 20 billion in sales and 24, 25% of EVDA margin. We should expect a slight improvement of margin in 2023 and an exponential progress in 2024 that will continue in 2025. What's different going forward? Number one is the focus on our core brands. We will sell or divest non-core brands. We have worked a plan to add another 10 billion Mexican pesos in incremental sales behind this strategy. And number two is that productivity will become a top priority in our culture. We have a plan to add 1.8 billion pesos in productivity savings over the next five years. Let me get into more details. Go back to 2009 and you will see a company that makes 70% of the sales with 62 brands and 430 SKUs. very complex to operate, no leverage with suppliers and customers, complex manufacturing and high inventories. Fast forward to 2022 and you will see only 18 core brands and 211 SKUs that account for 70% of the sales. A lot simpler to operate, better cash management, simpler manufacturing and supply chain, and stronger leverage with customers and suppliers. This is more like the business model you should expect in the coming years. Let me take you through the exercise we did to define which are the core categories in which we want to compete. The X axis indicates how high our probabilities are to compete and gain market share in a given category. And the Y axis indicates the size of the markets. So go to the right of the chart and you will find the categories that we have chosen. Hair care, isotonic beverages, facial skin care, blades and razors, body care, and maybe sun care. Same exercise for OTC. We choose to compete in analgesics, cough and cold, gastro, infant nutrition, vitamins, derma, OTC, probiotics, and sexual health. Let's take a look at Xerox. If you go back to 2016, this brand almost didn't exist. In 2022, we sold almost a hundred million dollars. We went from nothing to a hundred million dollars in six years. What we did is create a product that is different with a fantastic consumer proposition, high hydration, no calories, no sugar. And we put it through our funnel of communication, market footprint, and go to market. Now, if you look up to the right of the slide, you will see that we are competing in a huge category and we only have 2% of market share. Imagine what's the potential for Suerox going forward. In Q1 2023, Suerox performed ahead of expectations, growing plus 27%. Here, you can see how we are rapidly expanding the brands to the balance of the markets. In the USA, we are growing 50% year on year. In Chile, we already achieved 18% of market share. This quarter, we launched in Peru, shipping broke 500% ahead of targets. We launched in Brazil, where in one customer, we achieved 25% of market share, and we launched in Central America and Argentina. Let's now take a look at the case of Tio Nacho. Again, go back to 2016 and we didn't even appear in the Nielsen scorecard. Our competitors didn't take us into account, but now we are a real threat to brands that have been in the market for more than a hundred years. Take a look at the charts on the left, and you will see that we are getting closer and closer to the market leader. Now, they do take us into account. And again, go up to the right, and you will see that this category is huge, and we only represent 3% of the market. Imagine what the upside potential is for Teonacho. In Q1 2023, Teonacho performed ahead of expectations, growing plus 21%. Let me provide a bit of color of what's going on with Teonacho in Q1. Mexico grew 58%, the US grew 26%, Colombia, 23% and Brazil, 24%. Growth was driven by the introduction of 950 ml size that already represents 18% of the brand in Mexico and 16% of the brand in Chile. And the launch of Genehypsia, a new version that helps with gray hair. Excellent performance across the board. Grooming is being very successful with market shares approaching threatening levels for Gillette. I wanted to share with you how in this quarter, we are completing our portfolio with the launch of our disposable cases for 240 days and 120 days respectively. You will notice that in our packaging, we are strongly claiming the duration of the product. We are doing this because we have a product that is superior and delivers a much better value for consumers than our competitors. Our blue friends do not claim duration. Guess why? Brilliant future for grooming. Analgesics is another one of our core categories. Again, if you go back to 2016, we were a very small player. Today, we are the number one player in Argentina, number three in Mexico, and number three in Colombia. This is another example of how our business model works. As well as the other categories, if you look up to the right, you will see that this is a very large category and we are still very small. Imagine the upside potential we have. The most fantastic example of our analgesics portfolio is X-Ray in Colombia, a brand that didn't exist five years ago and today is the number three player in the market in a category that no competitor dares to launch a brand from scratch. This is an M&A category. Up in the chart, you can see how our analgesic brands performs in Q1. Let me now share a few pictures of our in-store execution. Here you can see pictures of the Grumman Lounge in Colombia this quarter. Let me now get into productivity. I would like to first share with you the 1.8 billion Mexican pesos plan. And then I would like to provide perspective on the three projects that we are completed in Q1 that account for 120 million Mexican pesos in annual savings when fully implemented. For the past six months, we have been working on a plan to deliver productivity savings of 1.8 billion pesos. I am personally supervising the progress of these projects on a bi-weekly basis. The first pillar accounts for $600 million that should come from the manufacturing plant. $100 million will come from vertical integration of some of our manufacturing processes. $300 million from re-engineering packaging and formulas in our largest brands. $400 million will come from cutting non-productive costs and maintaining SG&A fixed while growing top-line over the next few years. And $400 million from optimizing our go-to-market programs. Let me now show you the progress we made this quarter. For the first time ever, our manufacturing site delivered a positive return of 6.2 million of positive Cox contribution. I acknowledge that the ramp up of San Cayetano was lower than everybody would have liked, but I now feel comfortable that this number will start becoming larger and larger in the following quarters. In Q1, we completed the vertical integration of our shampoo blowing and injection processes. When fully implemented, this move will deliver close to a hundred million in annual savings. And finally, in March, we concluded a global negotiation for our cardboard packaging. In this negotiation that took over six months, we are moving from having 23 suppliers with low volume each to only two suppliers, one with 80% of the volume and the other one with the remaining 20%. We are also significantly reducing our complexity, going down from 72 SKUs to 12 SKUs. When fully implemented, this project will deliver approximately 20 to 30 million pesos in productivity savings. Now let me provide a summary of what changes you should expect in our quarterly reports going forward. The introduction of like-for-like figures to provide a better perspective of how the markets and brands are performing independently of the appreciation or depreciation of the Mexican peso. The introduction of two KPIs, percentage of sales growing ahead of inflation and percentage of sales growing market share to provide perspective of the health of our portfolio and markets. Very intentional focus on our core brands, a strategy that is already working. Productivity as a core in our culture and a quarterly update of the progress against the 1.8 billion pesos plan. Let me turn our call over to Antonio to discuss our financials with some comments related to our markets. Antonio.

Thank you, Marco, and good morning everyone. Let me first provide you with a context of what happened with Forex. As we discussed during our earnings poll last quarter, the Mexican peso appreciated 5.2% year on year against the US dollar. In this first quarter of 2023, The Mexican peso appreciated 9.0%. We had this discussion during the investor day. We had estimated back then that it was going to be 8.6. It went even further. 9% of appreciation for the Mexican peso. One of the key factors generating this appreciation of the Mexican peso is the interest rate differential. Here you can see the FX in blue and the interest rate differential between the US and Mexico. And if you look at the chart, there's a clear correlation where the interest rate differential is so large that it creates a lot of cashflow inflows into Mexico because of its attractiveness. Here you can see TI, the leading interest rate in Mexico against the Treasury bill. And as you can see here, the differential between these two indexes or these two interest rates is well above 7,500 basis points, which is, which is a very large differential. So what we did is an 18 year analysis of what has happened in the past, just to provide you with some context, or at least to try to extrapolate to see what's gonna happen in the future. And if you look at this chart, there's very few occasions where the interest rate differential has been above 6.5 percentage points. Now it's one of those situations. So we don't, I mean, it's hard to believe that this appreciation will continue for the long run. But in the meantime, it is what we have. This is a headwind that we have today and we have to live with. Furthermore, the Mexican peso also appreciated against the vast majority of the currencies in the markets where we operate. As a result, Mexican peso represented a foreign exchange headwind during the quarter. 58% of Genoma's top-line financials were materially impacted by FX when converted into Mexican pesos as compared to the same period last year. Still, Genoma's operational progress during the quarter, as Marco described earlier, demonstrates the health of our business on the ground. Let us briefly review some of the highlights. First quarter 2023 net sales reached 4.2 billion pesos. That is a 4.1% year-on-year increase underpinned by a strong growth strategy execution during the quarter. As Marco noted, these results were partially upset by macroeconomic headwinds and by local currency depreciation relative to continued Mexican pesos strength. First quarter consolidated EBITDA increased by 40.7 million pesos year on year to reach 868 million pesos. With an EVDA margin which closed at 20.8%, that's a 20 basis points year-on-year increase, resulting from improved operational leverage through increased sales, a favorable product mix effect, as well as continued focus on cost and expense control, which Marco discussed earlier. Commodity inflation partially offset first quarter 2023 EVDA margin expansion for the quarter. Turning to the results by region, net sales for Mexico operations increased by 10.7 percentage points year on year to 1.7 billion pesos. As Marco noted, 85% of Genoma's total Mexico portfolio registered increased sales during the quarter, driven by continued successful new core brand line extensions aligned with our strategic priority to focus on Genoma's core brands. Mexico EBITDA margin for the quarter closed at 18.2%. That's a 200 basis points year-on-year decrease as the company continues its transition from third-party manufacturers into its own manufacturing facility. With those co-partners, basically continue this transition. These represented with, sorry for this, we had to eliminate some inventory that represented 65 million pesos. That was a one-time cost that we incurred during the quarter. Turning to the U.S., we delivered a 15.7% increase in net sales to reach 477 million pesos, driven by double-digit growth of programs. In particular, sales of Tukor, more than double when sales of Suero grew by 20% year-on-year, with the benefit of the double-digit growth in Puerto Rico, driven by increased point-of-sale sales along also with from e-commerce channel performance as Marco described. The e-commerce channel will remain a key source of growth throughout the markets. And we are seeing rapid changes in the landscape as different channels, different models compete for consumer's attention and spend. US everyday margin therefore closed the quarter with a 9.1% or 180 basis point year-on-year increase to increase gross profit and higher operational leverage resulting from improved sales, a favorable product mix, and continued efficient cost and expense of products. Latin America first quarter 2023 net sales reached 1.97 billion pesos, It's again important to note that most countries and categories deliver solid double-digit local currency increases. However, we're negatively impacted by the strengthening Mexican pesos. A difficult Tafel comparison relative to uncharacteristically high COVID-related demand last year in 2022 is reflected in the 3.4% year-on-year decrease particularly in Argentina. Sales for Latin America would have increased by 4.3% year-on-year in Mexican pesos. Suerox Brazil, Central America, Argentina, and Peru in production, as well as strong commercial initiatives in Latin American markets, with new core red line extensions, draw double-digit growth for most countries and categories when expressed in local currency terms, as Marco explained earlier. This again reflects successful strategy execution with the contribution of our biggest and best brands to Genoma's growth. Taking price increases is not easy, and we are very mindful of the pressure that puts on consumers. The inflation that we are seeing from global materials markets higher energy costs, and rising wages in certain markets where we've been present, means we need to increase prices to protect our ability to invest in our grants. This has been Genoma's strategy, which we've discussed in past quarters, and we have implemented early and tactically. Every day margin for Genoma's Latin America business closed at 25.9%, a 240 basis point year on year increase, primarily due to strong cost and expense controls and a favorable sales mix effect. This was partially upset by the raw materials price increases and local currency depreciation that we've described before. Regarding our profitability, first quarter 2023 gross profit increased by 2.2% to reach 2 billion, 560 million pesos compared to 2.5 billion for the first quarter of 2022. SGM&A expenses decreased as a percentage of sales to 41.8% for the first quarter of 2023 from 43.5% for the previous year, primarily due to a strong focus, I've noted, on our cost and expense control throughout the organization. Genoma ended the first quarter of 2023 with a leverage ratio of less than 1.4 times netted to EVDA and 1.2 billion pesos in cash and equivalents, a nearly 20% year-on-year increase. Gross financial debt was a little bit over 6 billion pesos as of March 31st, 2022, compared to 5.4 billion pesos as of March 31st of the previous year, a 711 million year-on-year increase. The company's long-term debt represented 23% of gross financial debt at the end of the first quarter of 2023. I'm also pleased to share that we completed the successful issuance of unsecured Mexican corporate bonds, segures as we call them in Mexico, For a total amount of 1.5 billion pesos, the transaction was oversubscribed 2.4 times and allocated among a very well diversified investor base. Subsequent to the first quarter sale on April 18th, Genoma issued an additional 1.1 billion pesos to our LAV23-2 Sebul which was again oversubscribed 1.8 times. The related proceeds will be used to refinance debt, including the full prepayment of the Lab 20 Segur, as well as strengthening the company's financial debt maturity profile during the second quarter 2023. Further optimizing the average liabilities duration and reducing the average yield, which is TA plus the credit risk spread that we paid. During the quarter, we also repurchased a little bit over 2.5 million shares, investing almost 32 million pesos as we can see in this chart. This Friday, we will have our annual shareholders, annual general shareholders meeting where we will propose to cancel 28 million shares with the approval of shareholders, the new Total number of shares outstanding will be 1 billion and 20 million shares. Please adjust your models for EPS calculations. In closing, while Genoma's exposure to the adverse effect of Latin American currency translation impacted our results for the quarter, Genoma's double digit growth in the majority of our operations underscores the strength of our business. As Marco described, we remain laser focused on executing our strategy, focusing on co-brands and maximizing on genomic productivity. Let us now turn the call over to any questions that you may have.

Thank you, Antonio. We will now begin the question and answer session. To ask a question, you may raise your hand using the icon raise your hand located at the bottom of your screen. To withdraw your question, press the same icon at any time. This will be required in order to allow you to turn on your microphone and proceed to ask your questions. One moment please while we hold for questions. Okay, so our first question, thank you, is coming from Antonio Hernandez from Barclays. Antonio, please turn on your microphone and proceed with your question.

Hi, good morning, Marco, Tonio. Thanks for the space for questions and congrats on your results. My question is regarding what you've mentioned, the successful refinancing and of course with this cash flow generation, you're able to lower your leverage. What should we think of a target in terms of leverage and how should we think in coming quarters and even years in terms of cash flow generation and how you want to allocate to pay down debt and also in terms of investments.

Thanks. Thank you, Antonio, for your question. It's a great question. As we mentioned earlier today, we refinance our debt. We have a large component of short-term debt now. A big portion of it matures in 2026 and 2027. As Marco described earlier, our efforts on productivity, you know, and I'm talking mid-term, 2024, 2025, will resort in margin expansion, cash flow generation. Obviously, as we all know, there's no more significant capex required for the plant. So we expect more cash flow to be generated by the company. What we don't know, obviously, at this moment, and that's high uncertainty, is what is the interest rate going to be like? I mean, nobody has a crystal ball for TIE, but something that we have internally decided is that we want to reduce debt, not because we have high leverage, actually 1.4 times than that to every DA is reasonable, but because the interest rates are so high. So we want to lower the interest rate, the interest expenses as much as we can. We have also committed to cash dividends actually on the annual shareholders meeting this Friday, we're proposing a dividend and there's a dividend policy coming in, in the future, in the near future, so that investors and analysts will have a better sense of what we're thinking about it. But obviously, what we're telling you at this moment is that we want to reward shareholders with cash dividends, with more buybacks, and reducing our debt. There's not a specific number that I can share with you because it's very hard to predict what TA is going to be like. But if TA goes down, we will not reduce the payments that we do to the lenders. We will simply be paying more principal and less interest, and therefore our financial leverage would be lower. So at this moment, this is what I can tell you, again, because TA is highly volatile at this moment. I don't know if I was able to answer your question, Antonio.

Yes, yes. Have a great day. Thanks.

Thank you. Our next question comes from Jorge Izquierdo at BTG Pactual. Jorge, please turn your microphone on and proceed with your question.

Hey, good morning, Marco, Antonio. Thank you for taking my questions. The first one is regarding skincare portfolio. If you could share any comments on your strategy to improve aseptic and cicatric cure performance would be helpful. And my second question has to do with Swarovski in Mexico. Any color you could share regarding the current competitive environment also would be helpful. Thank you very much.

Yes, sure. On the skincare portfolio, as I mentioned in the Investors Day, it's our biggest challenge. We have a very clear plan for Assepsia that I feel very confident that will turn around the brand more towards the second half of the year. Theatrical, it was just a problem with fill rate that we had this quarter, so that's an easy one. We have a restage of the brand that is hitting the markets in quarter three, so we feel very confident on that. Psychiatricure is more of a... We have innovation that is very strong hitting the markets in the second half, but it still remains to be seen how effective that innovation is to turn the brand around. I think there's a lot more work to be done in cicatric cure. Asepsia and theatrical, I feel that we have nailed a plan that is going to work. That's on the first question. And then on the second question regarding to Xerox, Xerox in Mexico continues to perform really well. And we are now preparing everything for the summer season that, you know, is going to be this quarter and quarter three. And we have a very, very strong plan to, you know, to compete accordingly in the season.

Great. Thank you.

Thank you. Our next question now comes from Ben Wolfson at Lazard. Ben, please turn your microphone on and proceed. Ben, are you able to turn your microphone on? You may go ahead and ask your question. Okay, he may be having some difficulties. We will continue on hold for further questions. One moment, please. Thank you. Our next question now is from Andres Ortiz from BTG. Go ahead, Andres.

Thank you. Hello, gentlemen. Thank you for checking my question. Could you comment on this one-off that you booked in Mexico? You mentioned that there was quality controls that didn't meet your expectations from third-party suppliers. Have you circled this now? Should we expect some carryover for the next couple of quarters, or this was just a one-off that you booked this and It was actually a very good quarter in Mexico if that was the case.

Thank you for your question. Yeah, this is one of that we incurred this quarter as part of the transition process of bringing manufacturing to the plant. And it's also part of the productivity projects. If you're ready in the release, I'm just going to give you one example. There's a number of suppliers and a number of variations for, you know, cardboard boxes. You know, if you want to simplify and have a less complex supply chain, well, some of the older formats will simply not work for the future. So you have to write them off. It's part of the transition. It's part of life. So that's part of life when you are doing this kind of transition. So the one-off that we took this quarter is that. It's a one-off. But that doesn't mean that there might not be a couple others as we, you know, implement some of these productivity projects and as we transition from third-party co-packers into the plant. That is perhaps the explanation or one of the reasons why Marco discussed during the investor day presentation that the EVDA margin expansion is going to be exponential or you will see an acceleration in 2024 and 2025 because this year we have to incur this one offs. in order to reach that higher productivity. So the cardboard examples is on the release. The other example that I think is very interesting is what we're doing with Banart. As you can see in the release, there are savings in the whole product, the bottle, in a number of different components. But when you do this, again, you have the old bottles, the old formula, et cetera, and you have to transition from one to the other. So the one-off is a one-off because those items that we wrote off our books, they are gone. But as we transition other categories, other products, there could be some, some of that in the future, different magnitude. But for 2025, that should be gone. It's just part of life. It's part of progress. I've seen this happening in other companies that I work for. So that's a, I would say it's good news because they reflect the progress and the emphasis of the laser focus as Marco described on productivity. So it's good news. And for your model, which I think that's the question, you're leading the question to see what should I put in my model? Is this a one-off so there's going to be nothing in the future? I would say that for the next two quarters, there might be something else. Again, it's part of this transition, but beyond that, again, 2024, 2025, we hope there's going to be nothing so that the margin expansion will be there. Again, it's just part of life. It's part of the process. It's part of the transition. And as I said, It's good news because we are delivering these savings as Marco explained and as we described in the release. I don't know if we were able to answer your question, Andres.

Yeah, thank you very much. Additionally, you announced that you completed phase one plan that will deliver, I believe, $120 million in savings once it's completed. When do you believe that, how long did this ramp-up process need to happen in order to reach that goal? Is it a year? Is it six quarters? I don't know.

Well, the 120 million pesos that are described as part of the three initial projects of productivity are going to be impacting or positively impacting our financials throughout the year. But remember, not all projects started on January 1st. So there's some projects that are starting now. There's another project that will start in a couple of months. So this is going to be a smooth transition improvement in our numbers, okay? We just wanted to provide you with some color about what is going on. But to compliment my answer, perhaps Marco wants to add a little bit more color.

Yeah, thank you, Tonio. So let me explain a little bit of how this is going to work in the company and how we're going to be communicating progress. We have this plan that we presented to deliver $1.8 billion in savings. And every quarter, we're going to be updating our how we progress versus the 1.8. So what we communicated today is that we delivered three projects that account for 120 million. out of the 1.8 billion, okay? And we're gonna be adding in the following quarters. So for example, in the second quarter, if we complete a few other projects that we have on the works, we're going to be communicating which those projects are, and we're gonna be adding that those numbers to the 120 that we communicated in the first quarter. As per to your question, you know, let's take, for example, the Van Aert vertical integration. It is completed. You know, we already have the blowing and injection lines commissioned, so it's done, but You know, the savings you don't get from one day to the other because we still have bottles that were blown at the old cost. We still have bulk product that still was produced at the old cost. and so on and so forth. So we're going to start slowly seeing the progress on VanArts cost reduction throughout the year, as Tonio mentioned. But what I am going to be doing in this quarterly course is being very, very transparent on where we are on the productivity project. That doesn't necessarily mean that exactly when I communicate that the project was completed, it starts delivering the savings. Is that clear?

Yeah, thank you very much, Marco. Thank you for taking the question.

Thank you very much. Our next question comes from Juan Ponce at Bradesco. Juan, please turn your microphone on and proceed with your question.

Hi, Marco, Antonio, thank you for taking my question. I'm sorry if I missed this, but were you able to obtain the GMP certification by the cofetris to expand production? Thanks.

Thank you, Juan, for your question. The status of the GMPs and operating license is exactly the same that we mentioned during the investor day presentation. Actually, it's on the video, as we all know. We have GMPs for solids and semi-solids in the pharma plant. We've received the visit of Covapris auditors for the oral liquids, topical liquids, and the coating. equipment recently we have answered all of their questions and we're just waiting for their new answer so at this moment we're waiting I think everything is going well but again the timing for the authority to answer on that it's not under our control hopefully hopefully before the next earnings release, we will have good news on the operating license. But it's important to review that table where there's three levels of authorization. First level is the operating license. Second level is the GMPs for Mexico. And the third level is GMPs for the other export markets. At this moment, we have operating license and GMPs for solids and semi-solids. And we are in the process of obtaining the operating license for oral liquids, topical liquids, and the coating line. So that's where we are. Again, I think that the pharma plant will be more of a 2024 play. 2023 is going to be more focused on delivering productivity, in the personal care plan. As Marco described, there's a number of projects that we have, that we started, that we are implementing, that are delivering good results. And that's it. Obviously, if we have good news from COFEPRIS and eventually the other authorities, that's going to be an upside. But that's what I can share at this moment.

Thank you so much, Antonio. Very clear.

Thank you very much. One moment, please, while we hold for any further questions. Okay, that concludes the question and answer portion for today's conference call. I'd like to turn it back over to Mr. Sparvieri for closing remarks.

Thank you, operator, and also to those joining our call. Our focus on genomics key strategic priorities and on operational discipline has been an important contributor to operating results that represent a strong start of the year. This, coupled with our continued emphasis on operational excellence, will continue to make a positive impact on our growth and business momentum in the year ahead.