Genomma Lab Intl Sab Ord

Greetings, ladies and gentlemen. Thank you for joining Genoma Lab's third quarter 2024 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 Christian Ibanez, Genoma's Head of Investor Relations. Please, go ahead.

Thank you and welcome, everyone. On today's call are Marcos Carvieri, 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 are 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 call over to Marco.

Good morning, everyone, and thank you, Chris. I am thrilled to share our strong Q3 2024 results. This quarter, we have seen substantial progress across all key metrics, surpassing last year's results, previous periods, and our internal targets. Sales increased by 15.9%, driven by excellent performance in major markets such as Mexico, Brazil, Argentina, and the U.S., Gross margin improved by 184 basis points, reaching 64.3%. EVDA expanded by 245 basis points, reaching 23.7%, fueled by our productivity initiatives and manufacturing efficiencies. Net income surged by 78.1% and earnings per share, EPS, grew by an impressive 81.6%. Our cash conversion cycle reached 117 days and when adjusted for inflationary accounting in Argentina, it stands at 95 days, reflecting a five days reduction year over year. Cash flow generation over the past 12 months hit a record high of 2,404 million Mexican pesos, representing a 68.1% increase. Our business remains healthy with 73% of our sales maintaining or gaining market share and 92% of sales outpacing inflation. The following chart shows the performance of core categories during the period. As you can see in the second column, we showed healthy levels of growth across the world. In the case of skin care, we continue to face challenges that we expect to solve by Q2 2025. In the case of blades and razors, the issue is related to sell-in, but sell-out remains healthy with Mexico growing double digits. This chart simply shows graphically what we already discussed in terms of category performance. Isotonic beverages, infant nutrition, and all the OTC categories are driving the portfolio's growth. And the same chart, but now showing countries' performance. During Q3, Mexico and the US exceeded expectations. Key markets in Latam, such as Brazil, Colombia, Argentina, and Central America performed well. We also faced headwinds in Peru and Chile. This chart shows how we have grown gross margin, an impressive 7.3 points. We improved our gross margin from 57% to 64.3%, a testament of the impact that our productivity initiatives and manufacturing capabilities are having in the business. We firmly believe that this improvement in gross margin is sustainable. Let's now take a look at how this improvement in gross margin is translated into EBDA. In the chart, you can see how we grew 3.8 points of EBDA over the past year and a half. Around half of the gross margin gains were already translated into EBITDA growth, and the balance was reinvested in the business to continue accelerating top-line growth in the core categories. I expect this trend to continue. The following chart shows how the improvement in operating margin, gross margin, and EDA is possibly impacting earnings per share, which grew from 0.23 to an impressive 0.66. In this chart, we are showing how our company is delivering on capex efficiency. You can appreciate how margin is expanding unless capex is needed. This is resulting in a much better ROIC, a variable that is becoming a central focus for our leadership team. In the chart, you can see the evolution of Labs ROIC over the past three years. As you can see, we have already improved the ROIC by three points, mostly behind the margin expansion, divesting non-core assets, continuing to expand margin, and improving our cash conversion cycles. will remain the core strategies to improve ROIC going forward. As you have already seen in the press release issued a few weeks ago, we are very excited to announce that the healthy authorities in Mexico have granted the GMPs for the pending forms at our plan in San Cayetano, oral liquids, topical liquids, and coding for the Mexican market. Let's now switch gears to productivity. We continue to make progress against the $1,800 million in productivity savings. As of Q3 2024, we completed 42% of the $1,800 million in savings. The latest acquisition in the productivity arena is a polypropylene injection unit. This unit will be used to manufacture theatrical jars and cups, delivering a total savings of 16 million in annual savings. I will now turn the call over to Tony.