Kimberly-Clark de México

Hello and welcome everyone joining today's Kimberly Clark de México second quarter 2026 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. To register to ask a question at any time, please press star 1 on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to CEO Pablo Gonzalez.

Thank you so much. Good morning, everyone. Hope you're all doing well and thanks for participating in our call. As usual, provide some brief remarks and then we'll open it up for questions. We had another strong quarter and a good first half of the year with record revenue and we continue to make progress on our KCM Plus innovation, growth and transformation strategy. More on that, Dr. Javier takes you through our second quarter results. Javier.

Thank you. Good morning, everyone. During the quarter, our sales were 14.4 billion pesos, a 2.7% increase versus the second quarter of 2025, and an all-time high. Total volume was up 3.1%, driven by consumer products, while price mix was flat. Net sales were led by consumer products, which grew 5.2%, With a 4% volume increase and 1.2% price and mix growth, while away from home decreased 5.1%. Exports were down 11.1%. Cost of goods sold decreased 3%. Our cost reduction program once again had very good results and yielded approximately 450 million pesos of savings during the quarter. These savings are mainly at the cost of goods sold level. They were generated through a combination of global fiber contracting initiatives, changes in sourcing, and the use of alternative fibers, product redesigns, and the introduction of new raw materials in non-golden fabrics, diaper geometry redesigns to improve material efficiency, and logistics and distribution efficiencies across our network. These initiatives reflect ongoing actions across procurement, product design, manufacturing, and logistics. In addition to these actions, compared last year, fibers and fluff were favorable while superabsorbent materials and resins compared negatively. The FX was lower, averaging around 11% less than last year. Growth profit increased 11.9% and margin was 41.6% for the quarter. SG&A expenses were 11.5% higher year over year, and as a percentage of sales were up 140 basis points. Distribution expenses were higher while we continued to invest behind our grants and work to improve our footprints and streamline logistics operations. Operating profit increased 12.2% and operating margin was 23.7% up 50 basis points sequentially. We generated 3.9 billion pesos of EBITDA A 9.6% increase year-over-year, with EBITDA margin at 27.1% above the long-term range, representing 40 basis points sequential improvement. Cost of financing was 470 million pesos in the second quarter, compared to 352 million pesos in the same period last year. Net interest expense was higher, since we have more debt. During the quarter, we had a 50 million pesos FX gain Thank you very much. We debit at a net interest coverage of nine times. Thank you.