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

Good afternoon, everyone. My name is Leonor and I will be your conference operator. Welcome to Grupo ERDE's second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. Please ensure that your full name is displayed correctly on Zoom. If not, please take a moment to edit your display name. Please note that this call is being recorded. Information discussed may include forward-looking statements subject to risks and uncertainties. Please refer to the forward-looking statements disclaimer in our press release. I'll now turn the call over to Gerardo Canavati, Chief Financial and Information Officer.

Thank you, Leonor. Good morning, everyone. And thank you for joining us today to discuss Grupo ERDE's second quarter and first half 2025 results. In a tougher consumer environment, coupled with difficult comps, we managed to grow market share in two thirds of our portfolio. Traditionally, the start of a new federal government in Mexico is slow. together with geopolitical uncertainties, keeps investments in the sidelines and the general business and consumption environment weak. Particularly during the second quarter, we saw major clients reduce inventory significantly, and despite being a one-off, sales performance was weaker than expected, having a significant impact on our working capital. We do not put much attention on quarterly results based on external short-term adjustments, difficult comps, and seasonality. Lately, our quarterly results have been volatile. We rather focus on the long-term trend that looks stable. Thank you. I will now turn the call over to Andrea for a detailed review of our financial and operational performance. Andrea.

Thank you, Gerardo. In the second quarter of 2025, Grupo Verde's net sales increased 4.4% year over year, reaching 9.7 billion pesos. For the first half of the year, sales grew almost 7% to 19.4 billion. The preserve segment was a key growth driver, increasing 4.7% in the quarter and 7.5% for the first six months of the year, reaching 7.4 billion and 15.1 billion pesos respectively. This momentum reflects the success of our promotional strategies, which deliver strong results in the mayonnaise and spices categories and allowed us to gain market share in vegetables. The export segment grew 12% for the quarter and almost 10% year to date, volume being the main driver. These results reflect continued expansion efforts, including the transition to a new distribution partner in Canada the launch of Guerrilla in El Salvador, and the growing demand for Herde Salsas in Europe and Latin America. On the other hand, the impulse segment faced challenges, with sales declining 0.6% in the quarter, primarily due to heavy rainfall in June that affected Helados Nestlé performance. This was partially offset by an increase in average tickets, driven by effective commercial strategies that sustain value without relying on price increases for the retail segment. Year-to-date, impulse sales grew 1.7%, reaching 2.8 billion pesos. Moving to profitability, consolidated gross margin for the quarter was 39.6%, a contraction of 0.8 percentage points mainly due to higher raw material costs in preserves and impulse, particularly for egg yolk, coffee, and certain packaging inputs. Year-to-date, the gross margin improved 0.3 percentage points to 40.2%. The export segment gross margin was 17.9, an increase of almost 7 percentage points driven by cost efficiencies in Chonky Salsa, mainly. Consolidated SG&A as a percentage of net sales reached 27% in the quarter and 26.6% for the first six months, higher than last year's mainly explained by increased promotions aimed at stimulating demand, especially in the impulse segment. In this segment, expenses alone increased by 77 million pesos year-to-date, mainly coming from Elados Nestlé. Consolidated operating income for the quarter totaled 1.3 billion pesos, down 1.1%, with an operating margin of 13.1%. Consolidated EBBA for the quarter reached 1.6 billion pesos, with a margin of 16.2%. The slight decline is largely attributed to the impulse segment, which posted an operating loss of 34 million. Despite these short-term pressures, our year-to-date performance remains solid. Operating profits grew 7.8% to 2.8 billion, with margins stable at 14.1. EBITDA rose almost 6% to 3.3 billion pesos with a stable margin too. Turning to our equity investments, contribution from associated companies delivered strong results, reaching 149 million this quarter, a 47.4 year-over-year increase. Cumulatively, this contribution grew to $356 million, almost 60% up from last year's challenging performance. These results were driven by Megamex, which posted sales of $4.6 million, up 21% quarter-over-quarter and 7% in dollar terms. Within Megamix, Holy Guacamole saw a 10% volume recovery, driven by seasonal demand during football season in the first quarter and the Cinco de Mayo festivities in the second quarter. Furthermore, in December, Don Miguel successfully expanded its mini taco distribution to Sam's Club in Canada, contributing to a 4.9% increased year-to-date volume. which climbed to $8.8 billion compared to 2024, strengthening performance in convenience stores and price clubs. The gross margin at Megamex for the quarter was 26.4%, down 70 basis points compared to last year, reflecting continued pressure from avocado prices, which rose 4.6% in the first half of the year compared to last year. Encouragingly, we began to see a downward trend in avocado prices in June, which we expect will continue in the coming months. Finally, returning to the consolidated net income, it increased 23.6% to $269 million in the quarter and 46.1% year-to-date to reach $681 billion. This improvement was driven by our reduction in our comprehensive financing costs, as well as the increased contributions from Megamex particularly. Our financial position remains solid. Cash on hand totaled 2.6 billion pesos in June, down 31% compared to the previous quarter, mainly due to the strategic buildup of inventories explained in the press release and the extraordinary dividend paid in May. Our net debt to EVDA ratio stood at 1.2 times. I will now turn the call over to Gerardo for additional remarks.