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

Good morning, everyone, and welcome to the Grupo Herdez first quarter 2024 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 actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements. Now at this time, I would like to turn the call over to Mr. Gerardo Canavati, Chief Financial Officer. Please go ahead, sir.

Thank you, Beau. Good morning. Welcome, everybody. We're going to change our format in this call. So we're going to start, instead of reviewing the quarter that we expect that you already read it, we're going to go directly to our forecast. prepare remarks and questions and answers. So, as we anticipated, the top-line dynamics are transitioning to a flattish growth rate, as discussed last quarter in our guidance for the year. And no pricing actions are anticipated since we are finally witnessing a somewhat lower inflation pressure in commodities. We expect a stable outlook going forward. So in the coming months, we will reinvest part of these benefits into the market to take advantage of stable unemployment and positive consumer environment in order to strengthen the power of our grants. The other positive note of this quarter was free cash flow, which benefited from improvement in basically all the components of working capital. This is very important. on spite of the capex that we have projected for the year, and which will be mainly allocated to a new production line for long cuts in Barila, the acquisition of 4,000 freezers for allowed Nestlé in the traditional channel, in the convenient channel, the refurbishment of Nutrisa stores, new ovens for Cielito Querido, and new coffee makers. New lines for La Victoria and Herde Salsa for the export market. The NEO project that is called internally is the implementation of a new ERP. We are expecting to update our data centers and invest in securing higher cybersecurity in the company. Despite a very first strong quarter, we reiterate our guidance for the year. Consolidated net sales are projected to increase in the low single digits. Preserves is expected to remain flattish. Impulse sales are forecasted to grow in the low to mid teens. Exports are anticipated to maintain its growth trends in the high teens. In terms of gross margin, preserves would be flattish, impulse will be flattish, and export will be in the low teens. And lastly, for majority net income, it's forecasted to increase in the high single digits due to the stabilization of Megamex growth. To conclude, I'd like to share the key outcomes of yesterday's annual shareholders meeting. In the meeting, shareholders approved a 1.5 peso dividend per share in two installments and the cancellation of 5 million shares. Additionally, the share buyback program was approved at 2.5 billion pesos. Shareholders also accepted the resignation of Ana Sofia Sanchez Juarez-Cardoce, as an independent member of the company's board of directors and appointed Angela Gomez-Aiza as a new independent member. Thank you for your attention, and we're ready now to take your questions. Bo, please go ahead.

Thank you, Mr. Kanabati. Ladies and gentlemen, at this time, if you would like to ask a question, please press the star 1 on your telephone keypad, and you may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question, and we will pause for just a moment to allow questions to queue. We'll go first this afternoon to Sara Maldonado of Santander.