Kimberly-Clark de México

Good day, everyone, and welcome to today's Kimberly Clark de Mexico 1Q25 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. Please note, today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to CEO Pablo Gonzalez.

Good morning, everyone. Thanks for participating on the call. We have a few things to share with you today. To begin, we'll go straight to results, and then we'll make some brief comments about the quarter and our expectations going forward, as well as describe some important initiatives on the way. With that, let me pass it on to Javier.

Thank you, Pablo. Good morning, everyone. During the quarter, our sales were 13.8 billion pesos, a 0.3% increase versus the first quarter of 2024. Total volume was down 1.3% and price mix was up 1.6%. Consumer products and away from home decreased 1.4% and 4.2% respectively. Exports were up 21%. with double-digit increases in both converted product and hard-rolled sales. Cost of goods sold increased 7.4%. Against last year, SAM and resins were favorable, recycled fibers were relatively flat, while virgin fibers and fluff compared negatively. The FX was significantly higher, averaging 22% higher. Our cost reduction program once again had very good results and yielded approximately 450 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 9.4% and margin was 38.2% for the quarter. Mix was negatively affected by lower margin hard-boiled sales. SG&A expenses were 5% lower year over year, and as a percentage of sales, were down 94 basis points. Distribution expenses are down as our investments to improve our footprint and streamline our logistic operations are yielding positive results. Operating profit decreased 12.5%, and the operating margin was 21.5%. We generated 3.5 billion pesos of EBITDA. a 10.9% decrease despite the 22% peso depreciation against the first quarter of last year. As we had anticipated, even with the significant peso depreciation, we were able to maintain our EBITDA margin within our long-term objective at 25.1%. Cost of financing was 295 million pesos in the first quarter compared to 315 million in the same period last year. Net interest expense was lower because of less debt. During the quarter, we had a 14 million peso FX gain, which compares to a 1 million gain last year. Net income for the quarter was 1.8 billion pesos, with earnings per share of 60 cents. We maintain a very strong and healthy balance sheet, Cash position of March 31st was 11.8 billion pesos. We have no debt maturing in the next 12 months, and maturities for the coming years are comfortable. Net debt to EBITDA ratio is 0.9 times, and EBITDA to net interest coverage is 11 times. Thank you.