Hello, ladies and gentlemen, and welcome to SMU's First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that this call is being recorded. Following the presentation, there'll be a Q&A session. I will now hand over to Carolyn to introduce the call. Thanks, Tim. Thanks everyone for joining us today. I'm here with our CFO, Arturo Silva. As usual, we have some slides describing some of our business highlights as well as financial results for the first quarter of 2024. After that, Arturo will be happy to take any questions. You can send questions by chat, or you can raise your hand and we can unmute you. An audio recording of this call will be available on our website later today. Also, please note that we may be making forward-looking statements today. As always, please remember to take a look at the caution regarding forward-looking statements on slide number two of our presentation. As usual, we'll start with recent highlights from our three-year strategic plan for 2023 to 2025, with its four key pillars, starting with omni-channel growth on slide three. Our plan for this year includes 19 store openings in Chile and five in Peru. We've opened three stores so far this year, an Unimarc, a Super 10, and a MaxiAhorro. The rest of the stores are in various stages of permitting, design, and construction, and most are expected to open towards the end of the year. In a few cases, we've had some administrative delays relating to permits, and if the delays continue, some of the stores may end up opening in early 2025. Last year, we opened 14 new stores, and those stores have been performing above our plan in terms of sales and EBITDA. On slide four, we have the customer experience pillar of our plan. Our loyalty programs are an essential part of our value propositions. Innovative promotional activity that satisfies the changing needs of our customers is one of Unimarc's defining characteristics and a key feature of the Club Unimarc loyalty program. This year we've continued to launch different campaigns that tie into popular culture or focus on product categories that are particularly relevant for our customers. We have a couple of examples on this slide. We've also continued to add new benefits for club members with partnerships that offer discounts on travel, gyms, pharmacies, restaurants, movie theaters and more. On slide five, another element of our customer experience strategy is to continue growing our private label offering, providing customers with excellent quality at attractive prices that help them to optimize their budget. This year, we've continued to launch new products in different categories and under different specialty brands. We've included a few examples here on the slide, such as ready-to-eat pasta under our Como en Casa brand, chocolate-covered nuts and dried fruit under our Tento brand for sweets, and a new cereal flavor under our Nuestra Cocina brand for dried goods. Too far. On slide six, the third pillar of our strategic plan targets efficiency and productivity. We've been consistently implementing different initiatives, tools and technologies. For example, self-service modules such as self-checkouts, voice picking, and demand planning tools. We've continued to implement our efficient operating model at our Unimarc stores, focused on efficient replenishment, higher frequency of deliveries from distribution centers, the use of rural containers that go straight from the truck to the sales floor without using a storage area, among other processes. The benefits of this model include reduced shrinkage and inventory turnover and improved product availability. By remaining focused on operating efficiency and productivity, we were well positioned to adapt to new labor regulations in Chile, which gradually reduced the workweek from 45 to 40 hours. This year, the 44-hour workweek went into effect. Last year we had already started implementing the 40-hour workweek at stores that have adopted the new efficient operating model, going beyond legal requirements and without the need to increase headcount. On slide seven, another component of our efficiency and productivity pillar is energy efficiency. Last year, we implemented an energy management system in 100% of the facilities operated by SMU Chile designed to optimize energy consumption and efficiency. In February of this year, we received certification under ISO 50001 for the system, thereby meeting one of our goals for 2025. On slide eight, regarding the committed and sustainable organization pillar of our plan, our commitment to diversity and inclusion is part of our corporate identity, and we have been working to implement gender equality and work-life balance management systems in our operations. Our latest operation to receive independent certification of the system is our Lo Aguirre distribution center, which receives the National Service for Women and Gender Equity Award for equality and work-life balance in recognition of its commitment and best practices in the area of gender equality. Going on to the numbers on slide nine, we have revenue and same-store sales. We had top line growth of 1% in the quarter. We haven't seen much of a change in consumer behavior this year compared to last year. We continue to see income elasticity from our customers whose budgets are affected by the economic conditions and therefore they buy fewer quantities and substitute for cheaper products, which affects the average ticket. However, we also continue to see growth in the number of customers and transactions across formats, which was also happening last year. Our value propositions are continuing to attract consumers. What we need is for economic conditions to improve so the growing number of customers can increase their average ticket. The year-over-year comparison is affected by the fact that 2023 started off strong, especially in the cash and carry segment. We have a challenging comparison base. This is clear when we look at same-store sales performance and the graph on the right-hand side of the slide. Same-store sales growth overall last year was 4.3% in the first quarter, which includes a 10.8% increase in the cash and carry segment. This year we have a slight decrease in same-store sales. However, one of the highlights of the quarter was the same-store sales growth of 12% in Super 10, our soft discount format, which is an important part of our organic growth plan going forward. On the gross margin side, we had an increase of 90- basis points in the quarter, reaching 31.5%. On the next slide, we have operating expenses, which grew 6.2% and 108- basis points as a percentage of revenue. As we have seen in recent periods, the two main drivers behind the increase continue to be the higher minimum wage, which increased 12.2% year-over-year, affecting both personnel expenses and the cost of services, and accumulated annual inflation, which was 4.8%, affecting not only salaries and the cost of services, but also leases and distribution costs. Service expenses are also affected by higher electricity rates. Personnel expenses and service expenses alone account for 56% of the total increase in operating expenses, as you can see in the pie chart on the right. Moving on to slide 11. Our EBITDA remained relatively stable despite the pressure on expenses and the challenging consumption environment. Our EBITDA margin was 9.4% below the first quarter of last year, but well above our long-term target of 9%. We've also added operating income to the slide because while EBITDA was stable, we have a decrease of 6.6% in operating income, and that is because of higher depreciation and amortization related to the higher levels of CapEx we've had recently as part of our strategic growth initiatives. Operating income fell by CLP 2.9 billion, and almost all of that was because of the higher depreciation. On the next slide, we have net income, which was down 12% compared to the first quarter of last year, basically for two reasons. The first is the lower operating income, which, as I explained on the previous slide, is related to the higher depreciation. The second is a higher income tax expense because inflation was lower this year, which means we have lower inflation adjustments to our deferred tax assets. These effects were partially offset by an improvement in non-operating results, also related to the lower inflation, because we had lower losses on inflation index liabilities. Although this was partially offset by higher net financial expenses, as our liabilities from rights of use have increased because of new store rental contracts, and financial income is lower due to lower interest rates on time deposits. On slide 13, we have our dividend yield of 6.7% for the last 12 months as of 31 March 2024, the same as at the end of 2023. Since that date, we have approved two dividend payments. At our annual general meeting in April, shareholders approved a final dividend of CLP 4.8 per share, which was paid last week. This week we announced an interim dividend of CLP 2.5 per share, which will be paid in June as part of our dividend policy with a 75% payout ratio. As you can see on the graph below, the very strong share price performance explains most of the decrease in the dividend yield between 2022 and 2023. The return on equity is a bit lower due to lower net income and higher shareholders equity, but we are still above 10%. On the next slide, we have financial ratios, including as-reported figures as well as figures that are adjusted for store rental expenses. On the left, net financial liabilities to EBITDA, including store rentals, has improved from 3.9x in 2021 to 3.5x in March of this year. When we adjust for store rentals, we went from 2.7x in 2021 to 2.1x in March. On the right, net interest coverage as reported is up from 4.9x in 2021 to 5.6x in March 2024, and a bit lower than December 2022 and December 2021 because of the lower financial income. When we adjust EBITDA and interest expense for store rentals, we started with coverage of 9.5x in 2021 up to 12.7x in March. On slide 15, we have our bond covenants, where we continue to have plenty of flexibility. Net financial debt to equity is at 0.44x, well below the 1.03x limit, and interest coverage is up to 5.6x, more than double the 2.5x requirement. On slide 16, at the top of the slide, we have a summary of our cash flow for the first quarter. We started the year off with a very strong cash balance of CLP 105 billion, significantly higher than the minimum we like to have on hand, which is in the neighborhood of CLP 45 to 50 billion. We explained when we published our fourth quarter results, in January, we received CLP 52 billion from the insurance claim for the social crisis in Chile back in 2019. This payment had already been reflected in the P&L, but we didn't receive the cash until January. In our cash flow statement, this payment is reflected under operating cash, but on the graph we've separated it. Normal operating cash for the quarter was CLP 50 billion. On top of that, we also issued a local bond in March, the Series AR bond, for $1 million or CLP 37 billion. This bond matures in 2034. That maturity is highlighted in pink in the maturity profile below. The uses of cash for the quarter included the amortization of bank debt and bonds for CLP 23 billion, lease payments of CLP 15 billion, interest payments of CLP 13 billion, and CapEx of CLP 13 billion, leaving us with an ending balance of CLP 181 billion. In April, we carried out another bond placement, the Series AQ bond, this time for $1.5 million or CLP 55 billion maturing in 2029. The purpose of these bond placements is to refinance financial liabilities and flatten out our maturity profile, which is what we are showing in the graph below. Of the CLP 145 billion in maturities that we have in 2025, these two bond placements allow us to cover CLP 92 billion. Finally, on slide 17, we held our annual shareholders meeting in April, where all of the voting matters were approved and the board of directors was elected. The two independent directors who had served for the past six years, Tina Rosenfeld and Rodrigo Pérez, left the board and were replaced by two new independent directors, Alejandro Danús and Enrique Gundermann. The remaining seven board members were re-elected. That's it for our presentation. Thank you very much for listening. If there are any questions, Arturo will be happy to take them. Thank you. We will now move to the question and answer section. If you would like to ask a question, please press star two on your phone and wait to be prompted. If you're dialed in by web, you can type your question in the box provided or request to ask a voice question. Our first question comes from Felipe Bayona from Santander. Your line is open. Please go ahead. Hi, everyone. Thanks for the call. I actually have two related questions. First, how did the additional day in February and the Easter shift help the first quarter results? Do you have the pro forma numbers? Second, how have you seen the second quarter perform so far? Have the same trends persisted? Should we expect a weaker second quarter compared to the first one due to the absence of these calendar effects? Thank you very much again. Okay. Hi, Felipe. In the first quarter, actually, we had an Easter impact in the end of March, improving the result of March, but the negative impact was in April, in the beginning of April. For this reason, the second quarter will have this negative effect in the beginning of the quarter. But it's not so significant. It's more significant the first quarter, the one day of March than in February in comparison with the previous year, because we have one day more. That significant effect, CLP 7 billion in sales, that is not present in the comparison with the second quarter. And in terms of the performance of second quarter, is similar. Sales remain weak and there is still no improvement in consumption. A drop in average ticket, as Carolyn mentioned in the first quarter, continues because customers continue buying fewer units and substituting higher value products for lower value products. However, we maintain growth in transaction frequency and number of clients in all formats, which shows that our clients are reacting positively to our value proposition and promotional activities, but with lower purchase volume for the number of units in the average ticket. Given this, we hope that when consumption recovers, we will be able to capture that growth in the next quarter. In terms of margins, the lower growth no doubt affects the dilution of expenses. We continue with discipline in expenses and also in commercial margin that have allowed us to maintain EBITDA margins above 9%. We hope to achieve this objective during a full year 2024. In conclusion, the second quarter is in the same line of the first quarter in all aspects. That's very helpful color. Thank you very much. Thank you. Our next question comes from Alonso Aramburú from BTG. Please go ahead. Yes. Hi, good morning. Can you comment on your expansion plan and the number of store openings you expect for 2024? If you can confirm that. You had a couple of closures of stores in the first quarter. Do you expect closing more stores in the short term? In addition to that, if you can comment on the good performance of Super 10. Given that performance, are you may be thinking about accelerating some of the openings of that format? Thank you. Hi, Alonso. The execution of the strategic plan in general is on track. The idea is to open this year 19 stores in Chile. We only have some doubt about the opening time because in certain stores we have some delays in permits. If they are not open, this specific store, that could be something like five stores not opening 2024, they will be opening in early 2025. We are working to open store anyway, because as Karen mentioned, the performance of the new stores opened in the last 12 months has been very good. Better than the rest of the stores and better than planned. In the Super 10. We have the same case, very good performance. In fact, the same-store sales growth of 12% in the first quarter. No doubt this good performance, which makes us persevere in our expansion plan specifically, not only in Unimarc, also in Super 10. We consider also in our expansion plan the remodel plan for some stores and conversion plan of some Super 10, Unimarc and MaxiAhorro stores in Peru. We keep the same plan for the next month, persevering in this aspect, for the good performance of these stores. Okay. Thank you, Arturo. Thank you. Just a reminder, if you have a question, please press star two on your phone, or you can type it in the box provided if you're signed in by the web. We'll just give it a few more moments to see if there's any other questions. Okay, we have a question from Diego Guzmán from BTG. Please go ahead. Hi. Thanks for the call and the space for questions. My question is regarding the gross margin of this quarter, where we saw an important increase, 90- basis. I would like to know, logically, you have a mixed effect because Unimarc grew more than the other formats. I would like to know what were the main trends in terms of promotional activity and your efforts to increase margin and if you see this sustainable to the future because you have an above 31% margin and you have been very consistent in maintaining your hikes in margin in the upcoming months. I would like to know the trend and the sustainability of what's behind this. Thank you. Hi, Diego. Technically, we improved the margin, gross margin, because the weight of Unimarc was higher because Unimarc grew 2% and Unimarc margin is better than the rest of the format, gross margin. And especially because we had a better performance in the perishable products that most of them have a better margin than the basic products. We keep the behavior of the consumer preferring basic products, but anyway, Unimarc value proposition, the perishables is very important, represent 60% of the total assortment. For this reason, the margin was better for the more weight of Unimarc in the total sales. Thinking in the next quarter, the idea is to keep the same level of gross margin. It could be 30- basis points higher or lower depending on the promotional activity. For example, in September, we can do some specific promotions in meat or wine. In general, we don't receive 100% of the financing from suppliers. But we can have this minimum impact changing the gross margin 20 to 30- basis points more or less. In general, the idea is to keep the same level of gross margin for the next quarter. Okay. Understood. Just a follow-up on the expansion plan. What could be your maybe if you are recalculating your CapEx for the year at this time of the year or you remain steady with your CLP 120 billion? No, we are remaining the same amount. CLP 110 billion. It could be, as I mentioned before, that if we open some store in the first quarter of 2025, probably part of this amount will be spent in the first quarter of 2025. Mm-hmm. With the delay for the permits in a specific store. The total amount we will spend, the total amount of CapEx that we consider in the original plan. Okay. Thanks, Arturo. Okay. Thank you. We have a text question from Macarena Gutiérrez from Compass who asks, you have been several quarters with an EBITDA margin above 9%. Do you still keep 9% as your long-term target? And what would it take for you to revise it upwards? Hi, Macarena. In terms of the chance to keep the 9% EBITDA margin is absolutely possible. In fact, this quarter with weak economic scenario or weak consumption, we reach 9.4% EBITDA margin. I think it's absolutely possible to be about 9% in the full year 2024 and in the future because our strategic plan considered expansion through the revenues with the idea to multiply more times this EBITDA margin that in our opinion is good. It's difficult to improve more, but it's absolutely possible to keep this level. Another question is about the GDP number improving a little bit in the last quarters. We have a delay in the consumption, of course, because after the improvement in GDP, we need to see the improvement in employment and in salaries and real salaries, and the final effect is the consumption, and that's, in my opinion, the delay that we have in the consumption variables. No doubt the GDP improvement will have impact finally in the consumption in the next months. We are expecting this moment with very good or very high discipline in cost or expenses and also in gross margin to capture this improvement in the next quarters. That's the idea. Okay. Thank you. I'm not seeing any more questions, so perhaps I can hand back to Carolyn and Arturo for closing remarks. Great. Thanks, Tim. Thanks everybody for joining us. If you have any further questions, feel free to get in touch, and we hope to have you with us next quarter. Have a great day. That concludes the call for today. Thank you, and have a nice day.