Kimberly-Clark de México

Your program is about to begin. If you need any assistance during your conference today, please press star zero. Good day, everyone, and welcome to today's Kimberly Clark DeMexico 4Q22 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. You may withdraw yourself from the queue by pressing star and two. Please note, this call may be recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Pablo Gonzalez, CEO.

Good morning, everyone. Thanks for participating on the call. Our very best wishes for all of you and your families in 2023. I'll start by making some brief comments on our results. We had a good fourth quarter, and it captured continuous sequential improvement throughout the year. We posted strong sales growth driven by pricing, but volumes improved sequentially behind consumer-led innovations and effective commercial executions. The record raw materials and commodities inflation continue to be a headwind, but the combination of pricing, greater efficiencies, and a strong end of year on our cost reduction efforts allowed us to significantly increase our profitability as well as our margins. We've come a long way compared to the fourth quarter of last year and still have some room to improve. Our strategies and execution are rendering better results and we are poised to build on them.

Let me pass it on to Javier for a detailed review of the results. Thank you. Good morning. During the quarter, our sales were 12.8 billion pesos, a 9.2% increase versus the fourth quarter of 2021. Net sales were boosted by consumer products and away from home, which grew 11.7% and 13.3% respectively. Exports were down 14.3%. We will continue monitoring prices and volumes to find the best combination going forward. Cost of goods sold increased 1.4 percent. Against last year, every commodity and raw material category compared negatively, except for SAM and resins. Pulps, imported and domestic recycled fibers, compared negatively. On the personal care side, fluff also compared negatively, while SAM was slightly down and resins were lower. Finally, energy compared negatively. The FX was lower, averaging 6% less. Our cost reduction program once again had very good results and yielded approximately 500 million pesos of savings in the quarter. These savings are mainly at the cost of goods sold level and are generated by sourcing, materials improvements, and process efficiencies. Gross profit increased 27.5% and margin was 34.7% for the quarter. The G&A expenses were 3.7% higher year over year, and as a percentage of sales were 80 basis points lower. We continued to look for additional opportunities to streamline our operations while strengthening the investment behind our brands. Operating profit increased 54.1%, and the operating margin was 19.7%. We generated 3 billion pesos of EBITDA, a 41.5% increase. Evita margin was 23.1%, a 160 basis points sequential improvement, and a 530 basis points improvement versus the fourth quarter of 2021, underscoring our focus towards margin recovery. Cost of financing was 419 million pesos in the fourth quarter, compared to 420 million in the same period last year. Net interest expense was lower despite our incremental gross debt because we earned more on our cash investments. During the quarter, we had a 26 million peso foreign exchange loss, which compares to a 13 million peso gain last year. Net income for the quarter was 1.4 billion pesos with earnings per share of 46 cents. For the whole year, our sales were 51.1 billion pesos, an 8.9% increase, and an all-time record. EBITDA was 10.9 billion pesos, a higher overall number despite the strong cost increases, and was 21.4% of sales. Our margin increased sequentially every quarter, and we are on the right track and closer to our long-term target. That income was 4.9 million pesos and represented 9.7% of sales. We have record savings from the cost reduction program amounting to 1.7 billion pesos. During the year we invested 2.1 million pesos in CAPEX in line with our program as we focus towards 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 16.9 billion pesos. Our net debt to EBITDA ratio was 1.5 times, with an EBITDA to net interest coverage of 7 times. Thanks. Back to Paolo.