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

Good morning, everyone, and welcome to Grupo ERDE's fourth quarter and full year 2020 results conference call. Before we begin, I would like to remind you that this call is being recorded and that the 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, Chief Financial Officer. Please go ahead, sir.

Thank you, Anastasia. Good morning, everyone. Thank you for joining us on today's call. 2020 will be remembered as a strategy for humanity, but as a year of learning and transformation from everyone as well as for companies. We focused at Grupo ERDES on keeping our people safe and satisfying our customers' needs, which was a hard thing to achieve considering the unprecedented demand we faced. Once again, I would like to recognize the passion and hard work of all our 10,000 employees, as well as the commitment of our partners, suppliers, and clients. I will now turn the call over to Andrea to discuss 2020 results. As usual, we will take your questions at the end. Andrea?

Thank you, Gerardo. Good morning, everyone. During the quarter, the trend in home consumption caused by the global pandemic continues. The preserved segment increased net sales at double-digit rates offsetting the weak performance of the frozen segment. Although during the quarter most shops were open, decreased traffic due to mobility restrictions imposed in November had a negative impact on our retail business at the time that the traditional channel for Relados Nestle continued depressed. Net sales in the frozen segment decreased by 18.4% during the quarter and 19.5% for the full year. On the positive side, a lot of Nestlé sales continue to experience strong performance in modern train and club stores, offsetting the significant drop in mom-and-pop's performance. In exports, net sales increased 5.6% in the quarter and 23% for the year. These increases are explained by higher volumes and a stronger U.S. dollar throughout the year. Consolidated growth margin in the quarter was 36.8%, 150 basis points below the fourth quarter of 2019. The margin was mainly impacted by the expenses related to the adoption of the new labeling regulation, a strong performance of helados in modern trade, which resulted in lower gross margin, and of course, the lower traffic at our retail stores. On a cumulative basis, Growth margin was 37.4%, 110 basis points lower than in 2019, mainly due to the new labeling regulation. Consolidated SG&A in the quarter was 23.3% of net sales, 150 basis points lower than in the same period of 2019, due to the postponement of marketing and promotions expenses at the preserved segment. Over the year, SG&A represented 25.5% of net sales, practically flat compared to the previous year. Consolidated EBITs before other income increased 6.8% in the quarter and remained flat for the full year. This is the result of double-digit growth in reserves during the quarter and for the year, which fully offset the operating loss registered in frozen. For the quarter, we registered an extraordinary income of $238 million related to the last part of the divestiture of the tuna business, as well as a profit from the sale of a private equity fund related to Hispanic food companies in the US. During the year, other income totaled $408 million, explained by the same transactions mentioned previously. Consolidated EBIT, increased 27% in the quarter, while for the year the increase was close to 9% to 3.3 billion pesos. The above resulted from the extraordinary performance seen at the preserve segment and other income. EBITDA increased 24% in the fourth quarter, while the margin increased 300 basis points to 21%. On a cumulative basis, the EBITDA increased 10%, representing 17.8% of net sales. In the quarter, income from unconsolidated companies was 267 million pesos, 9.4% higher than in 2019, mainly due to the appreciation of the dollar and a sequential improvement at Megamix. For the year, income totaled 757 million pesos, 2.4% lower than last year, mainly as a result of the challenges in the food service as well as Don Miguel underperformance. Consolidated net income for the quarter was 826 million pesos, while for the full year, totaled 2.4 billion pesos. Free cash flow, excluding the divestiture of the tuna business, reached 1.3 billion, 5.5 and 7.4 percent of net sales and stockholders' equity, respectively. Our financial position at year-end remains strong. Cash stood at $3.7 billion, and interest-bearing liabilities were $9.5 billion, $1.5 billion higher than in 2019 as a result of additional debt coming from the local bond issue made in August. With that, I will turn back the call over to Gerardo.