Grupo Herdez, S.A.B. de C.V.

Good morning, everyone, and welcome to Grupo ERDE's first quarter 2020 results conference call. Before we begin, I would like to remind you that this call is being recorded, and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. please refer to the detailed note in the company's press release regarding forward-looking statements. At this time, I would like to turn it over to Mr. Gerardo Canavati, CFO and CEO of the Frozen Division. Please go ahead.

Thank you, Anastasia. Good morning, everyone. Thank you for joining us on today's call. As all of you are aware, These are completely different times and who knows for how long. So first of all, we hope you and your family are all healthy. Our results for the quarter were marked by the explosion of COVID-19. In Mexico, this very uncertain environment turned into aggregated demand shock on top of an economic slowdown. Industrial production fell, GDP contracted while the peso collapsed to record levels. We are living a historical moment, unfortunately a negative one, and with the absence of substantial fiscal and monetary responses as the developed world has implemented, the outlook for Mexico GDP is dark. As usual, Andrea will walk you through the results for the quarter. And we will take your questions at the end of this call. Andrea.

Thank you, Gerardo. Good morning, everyone. Net sales increased 10.4% during the quarter. Growth was mainly driven by significant volume demands towards the end of the quarter as a result of the health crisis that moved consumers to build up their food stock. two-thirds of our portfolio grew at double-digit rates in the quarter. On the other hand, our frozen business was affected by crumbling traffic figures in the last two weeks of the quarter, coupled with weak BSD sales for a lot of mistakes. In exports, net sales increased 9.6% in the quarter. Controllated growth margin in the quarter was 37.8%, in line with the first quarter of last week. The benefit of cost absorption resulted from higher sales in our research portfolio, succeeding in offsetting an unfavorable sales misfit in channels in the frozen division. In export, gross margin increased 5.4 percentage points for the course. Consolidated SDMA was 26.2% of net sales, in line with the same period in 2019. In the frozen segment, SD&A increased 4% as expected due to higher marketing spending to support new products in allowances. Consolidated EBIT and EBITDA before other income grew 7.2% and 3.7% respectively. As you read in the press release, we registered extraordinary income of 194 million, resulting from the divestiture of 50% of our tuna fleet, according to our plans to pursue better returns for that portfolio. After extraordinary income, fleet and VBA grew 34.6% and 27.2% respectively, while the margins stood at 14.9 and 18.3. In the quarter, equity investment in associated companies was 137 million pesos, 40.2% lower than in 2019, as a result of ongoing challenges in the frozen division of Meganex, in combination with a significant drop in holy guacamole sales away from home. Compounded net income in the quarter was 666 million pesos, which was 28.8% higher than the previous year. Our cash flow generation remains strong after buying back 8.2 million shares in the quarter and capex of 105 million. As of March 31st, consolidated cash was 4.2 billion pesos, which in addition to cash flow generation includes the disbursement of 1.5 billion pesos in committed bank lines as a precautionary measure and the sale of the tuna vessels. Interest-bearing liabilities, including IFRS leased debt, totaled $10.5 billion with an average life of 5.1 years and an average cost of 8.3%. Leverage ratios remained comfortable as consolidated net debt to EBBA was 1.5 times. The net debt to consolidated stockholder security ratio was 0.32 times. With that, I will now turn the call over to Gerardo.