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

Good morning, everyone, and welcome to Grupo ERDE's fourth quarter and annual 2022 earnings 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 the 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 the call over to Mr. Guillermo Perez, Investor Relations Manager. Mr. Perez, please go ahead.

Thank you, Ariel. Good morning, everyone.

Thank you for joining us on today's call. We appreciate your interest in Grupo ERDES. In year 2022, the food industry faced challenging market conditions. We dealt with significant cost pressures coming from higher raw material and packaging costs. In addition to the high interest rates, rates caused by global inflation and the measures taken by central banks to address it. However, the company registered sound performance due to its market leadership and financial discipline. Net sales increased 18.5% in the quarter and 21% for the full year. Although price increases continue to be the main driver of top line performance in quarterly and full year numbers, volume contributed with one-fifth of the growth on a cumulative basis. Results in the pre-serve segment are similar, with the consolidated figures increasing 20.1% in the quarter and 20.8% at year-end. The quarter saw little change in volume at supermarkets, wholesalers, and food service, with increase brought on by price changes. Impulse sales were sluggish and increased 6.6% in the quarter due to lower store traffic, while for the full year sales grew 19.7%, as a result of price increases, store re-openings, and general store normalization. This resulted in a mid-single-digit gain in average ticket for the entire year. Likewise, the DSD channel at the Loudoun Sleigh maintained the upward trend seen in the first nine months of the year. As a reminder, the Loudoun Sleigh strategy has evolved as the focus remains on DSD. This change is a result of a sluggish, modern channel of the stay-at-home trend vanishes. We have been developing and diversifying the portfolio, and as a result, in the last 12 months, DSD has stood out from the rest. In exports, net sales increased 19% in the quarter and 25.3% for 2022. Homestyle, Salsa, and Mole were the best-performing categories in the quarter and for the full year. Consolidated gross margin in the quarter was 36.5%, 110 basis points lower than in the fourth quarter of 2021, as input prices remained high on a comparable basis, alongside incremental labor costs derived from legislation reforms. By segment, precepts registered a 90 basis point decline in the margin. However, compared to the third quarter of 2022, consolidated gross margin improved by 260 basis points, and 410 for preserves. Consolidated HG&A was 21.4% of net sales for the quarter and 23.7% for the full year. This was 130 and 140 basis points lower than last year, respectively, due to the operating leverage resulting from increased sales that completely upset higher flight expenses as well as other expenses. With that, I will turn the call over to Andrea.