Kimberly-Clark de México

Excuse me, ladies and gentlemen, we now have our presenters in conference. Please be aware each of your lines is in a listen-only mode. At the conclusion of the presentation, we will open the floor for questions. At that time, instructions will be given to the procedure to follow if you'd like to ask a question. I would like to now turn the conference over to Mr. Pablo Gonzalez. Please go ahead.

Thank you. Good morning, everyone. I hope you and your families are healthy and safe. Let me start by saying that we continue to deliver good overall results as we operate in line with the priorities and guidelines we set forth to navigate through the current environment, which is still very challenging on many fronts. Notwithstanding how challenging it is, we delivered strong top and bottom line growth and our margins remained very solid and are among the best in our industry. During the quarter, we reinforced the various measures and actions to protect the health of our employees and their families, our number one priority. And we remain in contact with the authorities and communities to assist during the pandemic and mitigate its impacts. Also, the actions we have taken to guarantee our continued operation, as well as that of our suppliers, to ensure all our customers and consumers have access to our products, have allowed us to operate our facilities without any meaningful disruptions. On the sales front, despite private and B2B consumption still being affected by the COVID lockdown and its impact on the economy, several categories performed well, particularly those related to personal hygiene, health, and protection, and we continue capitalizing on new growth opportunities. Altogether, our top line grew for the 24th consecutive quarter, driven by strong volumes. On the cost side, Most raw materials compared positively and together with our increased productivity and very good results on our cost reduction program allowed us to deliver solid bottom line growth and improve margins year over year in spite of the significant peso depreciation. In summary, another good quarter in the midst of a very challenging environment. Javier will now provide more details on the quarter results.

Good morning. During the quarter, our sales were 11.1 billion pesos, a 7% increase versus the third quarter of 2019. Volume grew 7% with price and mix in line with last year's. Consumer products also grew 7% with all the increase due to volume. Away from home product sales went down 31%, reflecting a slow reopening of offices, hotels, and restaurants. Finally, our export business performed very well with sales growing 54%. Cost of goods sold increased 7%. Against last year, pulp, fluff, superabsorbent materials, and resins compared favorably to dollars, as did domestic fiber prices. Imported recycled fiber and energy prices compared negatively. Finally, ESX was significantly higher, averaging 15% more. The cost reduction program, an important component of our business DNA, had once again very good results and yielded approximately 400 million pesos of savings in the quarter. These savings are at the cost of goods sold level and are generated at various fronts with sourcing, materials improvement, and process efficiencies, all contributing in a meaningful way. Although we cannot anticipate or forecast specific targets going forward, The fact that many of these savings are technology-driven, together with our intention to continue actively looking for, developing, and investing behind new product and process technologies, gives us confidence that we should be able to keep delivering good results on this project. Gross profit increased 5.5%, and margin was 37.9% for the quarter. SG&A expenses were up less than 1%, and as a percentage of sales were 100 basis points lower. We achieved better efficiencies in distribution expenses as well as on the investment behind our brand, balancing advertising with point-of-sales promotion. Needless to say, we continue to review other expenses to make sure our investment behind the lines remains a competitive advantage. Operating profit increased 9.5% and the operating margin was 21.3%. During the quarter, we generated 2.8 billion pesos of EBITDA, a 7.8% increase, and EBITDA margin was 25.6%. Cost of financing was 428 million in the third quarter, compared to 391 million in the same period last year. Net interest expense was 9% higher, As we previously disclosed, in July the company very successfully placed a record domestic and Latin American low rate, $500 million of 144A Reg S senior unsecured notes at 2.431% with partial maturities of one-third each in years 2029, 2030, and 2031, and entered into a related swap agreement to hedge the currency risk. Since the proceeds of these placements will initially and primarily be used to pay down debt due to late 2020 and early 2021, our long-term debt and cash position increased substantially. In addition to the funds from the placement, we have generated a very strong balance sheet which reflects solid cash generation from EBITDA, with 10 billion pesos of free cash flow generated in the last 12 months, positive results from working capital management, And in general, the priority we set up at the beginning of the year to protect cash, our total cash position was 22 billion pesos. Our net debt to EBITDA ratio was 0.9 times, with an EBITDA to net interest coverage of 8 times. In the quarter, we had a 10 million pesos per exchange loss, which compares to a 6 million loss last year. Net income for the quarter was 1.3 billion pesos, an 8.9% increase with earnings per share of 44 cents. With that, I turn it back to Paolo.