Kimberly-Clark de México

Excuse me, everyone. We now have our speakers in conference. Please be aware that each of your line is in a listen-only mode. At the conclusion of today's presentation, we will open the floor for questions, and at that time, instructions will be given. I would now like to turn the conference over to Pablo Gonzalez, CEO. Please go ahead.

Pablo Gonzalez Thank you. Good morning, everyone. Thanks for participating on the call. I hope you and your families are all safe and well, and we wish you all the best for 2022. Let me make some brief introductory comments, and then I'll pass it on to Javier to discuss fourth quarter results and full year results. After a very good 2020, in which we posted records in both top line and bottom line, as well as very strong margins, we were at the high end of our target range, 2021 proved challenging, particularly the second half of the year. Slow growth of domestic consumption, COVID impacts and sales comparisons of related products, the continued disruptions caused by the pandemic, and especially the rapid and unprecedented commodity and raw material cost increases all weighed on our results. The cost increases accelerated sequentially throughout the year, and our actions to mitigate their impact are underway but take longer to materialize. Also, In the short term, our volumes and market positions have been affected, as is always the case, when we implement price increases. That is the crux of the fourth quarter results. Having said all this, we are confident that such actions will allow us to sequentially improve results in the first half of the year, and will position KCM to have a strong second half and a good overall 2022. There is still plenty of volatility, particularly around raw material costs, and it is not clear when they may stabilize and eventually come down, but our expectation is that when it happens, it will be gradual, moderate, and over a prolonged period of time. Accordingly, the actions we are taking span across all our operations and areas, and over the course of the year, will put us in a much better position to show much improved and stronger results. Challenging, yes, but also exciting, since it's forcing us to find opportunities to further improve how we run the business. KCM has always been very efficient and successful, and we're sure that as we get out of this period, we will be even more so and uniquely positioned to continue to grow and post industry-leading margins. It's very important to mention that during the year we maintained and reinforced the various measures, protocols, and actions to protect the health of our employees and their families, our number one priority. We also work closely with communities and suppliers to ensure the community the continuity of our operations. We are proud of our success in this regard and in assuring that all our customers and consumers have access to our products as we continue to operate our facilities without any meaningful disruption. Javier will now take you through the results and then I'll provide some color on the context and the actions we're implementing.

Thank you, Pablo. Good morning, everyone. During the quarter, our sales were 11.7 billion pesos, a 1.2% increase versus the fourth quarter of 2020. Volume well down 4%, with price and mix contributing 5.2%. Consumer products decreased 5.2% as we continued to face this low consumer environment, and volume comparisons were adversely affected by strong COVID-related sales in 2020. Pricing actions taken in the fourth quarter also impacted volume and market positions in the short term. Away-from-home product sales increased 16.5% as the economy starts to reopen and were somewhat above the fourth quarter of 2019 pre-pandemic levels. We expect they will continue to show strong sequential improvement. Export sales grew 52.2% and sales of finished products doubled from last year. Cost of goods sold increased 15.8%. Against last year, every commodity and raw material category compared negatively. POP was up approximately 30% depending on the grade. Imported recycled fiber prices grew close to 60%, and domestic recycled fibers and fluff averaged high single-digit increases. On the personal care side, Superabsorbent materials were up more than 50% and resins more than 90%. Finally, energy and natural gases also compared negatively, with the latter growing more than 80%. The FX was slightly lower, averaging 1% less. Our cost reduction program once again had very good results and yielded approximately 350 million pesos of savings in the quarter. These savings are mainly at the cost of goods sold level and are generated by sourcing materials, improvement, and process efficiencies. Gross profit decreased 22.0%, and margin was 29.7% for the quarter. HG&A expenses were 2% higher year over year and practically flat as a percentage of sales. Operating profit decreased 38.3%, and the operating margin was 14.0%. We generated 2.1 billion pesos of EBITDA, a 32.6% decrease, and EBITDA margin was 17.8%. Cost of financing was 420 million pesos in the fourth quarter, compared to 424 million in the same period last year. During the quarter, we had a 13 million FX gain, which compares to a 3 million loss last year. Net income for the quarter was 790 million pesos, with earnings per share of 26 cents. Net income was arbitrarily and negatively affected by a one non-time cash deferred tax credit cancellation related to 4E. For the whole year, our sales were 46.9 billion pesos, an all-time record despite the 4E recall impact. Evita was 10.3 billion pesos, a healthy overall number despite the strong cost increases, and was 22% of sales. While this margin fell below our long-term target, it's still a very solid margin in our industry. Net income was 4.5 billion pesos and represented 10% of sales. Savings from the cost reduction program amounted to 1.4 billion pesos. As we had anticipated, during the year we ramped up our CapEx and we invested 2.2 billion pesos. We have an aggressive CapEx program for the next two years where we will invest in excess of $250 million in technology improvements, cost reductions and efficiencies, and capacity additions. We maintain a very strong and healthy balance sheet. Our total cash position at the end of the year was 12 billion pesos. Our net debt to EBITDA ratio was 1.4 times, with an EBITDA to net interest coverage of six times. Thank you. Back to Pablo.