Ladies and gentlemen, thank you for standing by, and I would like to welcome you to SMU's third quarter results conference call on the 13th of November, 2024. At this time, all participant lines are on listen-only mode. The format of the call today will be a presentation by the management and IR team, followed by a question-and-answer session. Without further ado, I would now like to pass the line to Ms. Carolyn McKenzie, Head of Investor Relations at SMU. Please go ahead, ma'am. Thank you. Thank you all 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 nine months and third quarter of 2024. After that, Arturo will be happy to take any questions at the end of the call. You can send questions by chat or 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 omnichannel growth on slide three. This year, we've opened 14 new stores, including nine in the third quarter, which is a record number of openings for us in a single quarter. To date, as you can see on the slide, we've opened 11 stores in Chile. That's seven Unimarc, one Alvi, and three Super10, and three Maxiahorro in Peru. During the fourth quarter, we should have a further four openings in Chile and three in Peru for a total of 21 this year. Last year, we opened 13 stores in Chile and one in Peru, and next year we should have 15 openings in Chile and eight in Peru, bringing us to 43 openings in Chile and 15 in Peru for the three-year period for a total of 58 new stores. The new stores have been performing well, with sales and EBITDA exceeding our plan, and more than half of the stores that we opened in 2023 already have a higher EBITDA margin than the average EBITDA margin for their respective formats. On the next slide, another part of our omnichannel growth strategy is our e-commerce business, where we had strong results this quarter. Online sales through both our own platforms, unimarc.cl and alvi.cl, as well as strategic partnerships with last milers, grew 28% in the third quarter, reaching penetration levels of 4% of sales. On slide five, we move on to the customer experience pillar of our plan. As we explained last quarter, in May, we made some changes to our promotional activity as part of our ongoing efforts to satisfy the needs of our customers. Throughout the year, we have seen how economic conditions put pressure on our customers' budgets, and consequently, they seek to optimize by purchasing fewer quantities and substituting for cheaper products. In response to this situation, in May, we launched new promotions focused on basic products to which consumers are highly price sensitive. On the slide, we have an example of the campaign from Unimarc called Precio Oferta or Sale Price, and with a selection of basic products such as pasta, oil, mayonnaise, canned tuna, et cetera. We have similar campaigns at the other formats. Customers reacted favorably to these promotions, increasing their average ticket and average spend, which led to a sales recovery in May and June, continuing through all three months of the third quarter. On slide six, private label growth is another key initiative within our customer experience strategy, and this is also another way we help customers optimize their budgets while still enjoying excellent quality products in line with the promotional activity I described on the previous slide. Here on this slide, we have examples of some of our basic products under the Merkat and Nuestra Cocina brands. We've also continued to grow our private label assortment, launching 130 new products this year so far in a range of different categories. There are a few examples of this on the slide as well, helping our private label sales penetration to reach levels of 13%-14% of sales. On the right-hand side of the slide, we have a graph showing progress towards our goal of having certified recyclable packaging for 50% of our private label assortment. To date, we are at 35%. On slide seven, another part of the customer experience pillar of our strategy are the loyalty programs. Over 10 million customers visit our stores each year, and in Unimarc, 3.8 million club members have made a purchase in the last three months. In July, we launched a new concept of membership levels for our Club Unimarc, making us the first food retailer in Chile to offer this type of program. Our customers benefit from exclusive promotions and discounts at Unimarc and also at partnering businesses, depending on their membership level. The levels are Club, Gold, and Platinum Member, and there's also a paid membership for the Diamond level with further associated benefits. The membership levels are associated with the customer's average spending levels over the preceding three months. If they increase their spending at Unimarc, they can upgrade to a higher membership level and benefit from higher discounts. We believe that this will contribute to customer loyalty. Since launching this initiative in July, approximately 300,000 customers have upgraded to a higher level each month. With respect to our Alvi Cash & Carry format, as you can see on slide 8, a recent highlight was our 2024 Alvi Members Expo event. Sorry, I'm on the wrong slide there. There we go. In the beginning of October, where over 7,000 small business owners in attendance were able to meet with representatives from major brands that supply the traditional trade, discovering new products and opportunities to help them increase the profitability of their businesses. Club Alvi has over 100,000 members that have made purchases in the last three months, and a key part of our strategy is to help our club members develop their businesses so we can grow together. There we go. On the next slide, the next pillar of our plan is the efficiency and productivity. The initiatives we have implemented in terms of new technology and new processes throughout our operations in order to drive productivity have been essential to keeping the operating expenses under control in the face of inflation and increases to the minimum wage. The initiatives we've implemented include self-service modules, voice picking, automated demand planning, and a digital treasury system, among others. You can see the results in our productivity indicators. Sales per full-time equivalent grew 2.8% in the third quarter, and the average headcount per store is down 1.8% year-over-year. On the next slide, another part of the efficiency and productivity pillar is logistics efficiency, where our plan includes expanding our logistics network in order to supply our growing store footprint. In October, we inaugurated a new distribution center in Peru. This center is strategically located in Piura, in the north of Peru, where today we have 16 stores operating and where our future growth is focused. The new distribution center will enable us to improve inventory management and in-store product availability, as we will no longer have to rely exclusively on direct distribution from suppliers or on distribution from our other DC in Lima, and there will naturally be an improvement to distribution costs. On the next slide, we have our plan that also includes energy efficiency initiatives with an impact on both the environment and on our operating expenses, which is important as electricity rates in Chile have increased significantly. As such, one of our initiatives is to increase the number of facilities that contract unregulated electricity rates, which are lower than regulated rates. This depends on the electricity consumption at each location. Stores that have high enough consumption levels are eligible to negotiate directly with generation companies. Currently, 15% of our energy consumption in Chile is at unregulated rates, and we're in a bidding process with electricity suppliers to contract additional facilities under unregulated rates. These additional facilities account for a further 15% of energy consumption, so we will be doubling the coverage of lower unregulated rates. As part of these contracts, the electricity supplied to these stores must come from renewable energy sources, so we will also be doubling our renewable energy. Another initiative is our sustainable store project, which includes monitoring an automated climate and lighting control, helping to save energy by reducing consumption 5%-10% in the stores where the project has been implemented this year. On the next slide, with respect to our committed and sustainable organization pillar, in September, we received the results of the 2024 S&P Corporate Sustainability Assessment, in which our score improved from 62 to 68 points, placing us in the 96th percentile, that is in the top 5% of companies evaluated to date. We're very pleased with this result because it reflects the progress that we've made in our sustainability management. Our score improved in all three of the dimensions covered by the assessment: governance and economic, environmental, and social. Going on to the numbers. On the next slide, we have revenue, which was 0.7% higher in the first nine months of this year compared to the first nine months of 2023, and 2.8% higher in the third quarter. We had a sequential improvement in the third quarter after reporting a decrease of 1.9% in revenue in the second quarter. As I mentioned before, we had started to see a recovery in May and June, and we were able to sustain this growth throughout all three months of the third quarter, driven by 3.6% growth in our Unimarc format, where we also had a recovery in same-store sales growth with an increase of 1.5% in the quarter. Strong performance from the new stores we have opened also contributed to the revenue growth. The promotional activities I described before focused on basic products to which customers are highly price sensitive, improved our competitive position by offering more attractive prices with a positive effect on sales. The change in sales mix affected gross margin, which fell 100 basis points in the quarter. However, so far in the fourth quarter, we've achieved an improvement in gross margin as a result of improvements to commercial efficiency, and we expect this trend to continue contributing to a recovery not only in sales, but also in gross margins. To help explain some of the drivers behind revenue, last quarter we added this additional slide to provide more color on the number of customers and transactions, as well as average ticket and average monthly spend per customer. On the left, we have a comparison of the percent change year-over-year in number of transactions in red and average ticket in gray, starting just before the pandemic in January 2020. Pandemic restrictions caused the number of transactions to fall sharply, while the average ticket basically doubled. These two figures began to converge back towards historical levels in 2021, and then in 2022, when inflation levels started to go up and customers looked to optimize their spending, the average ticket started to fall, with the number of transactions going up. The number of transactions was consistently growing year-over-year throughout the period until April of this year, but then it recovered in May and June, with growth continuing in the third quarter. On the other hand, the average ticket had been lower year-over-year and showed a recovery for the first time in June, and generally trended positive in the following months. On the right, we have the number of customers and the average monthly spend, also shown as a percent variation year-over-year, with customers in red and spending in gray. Here again, we had consistent growth in the number of customers up until April of this year, with the number recovering in May and June and continuing to grow in the third quarter. The average monthly spend per customer had been down year-over-year since early 2023, but in May and June of this year, we also saw an increase in these figures continuing in Q3. On the next slide, we have operating expenses, which grew 5.7% in the first nine months and 8.1% in the third quarter. We continue to see the impact of the higher minimum wage, which was up 10% in the nine months and 12% in the quarter, and inflation on our operating expenses, essentially reflected in personnel expenses and service expenses where cleaning and security services are affected. The service expenses are also impacted by the higher electricity rates. These two accounts, personnel expenses and service expenses, explain practically the entire increase in operating expenses. Operating expenses as a percentage of revenue grew 100 basis points in the first nine months and 110 basis points in the quarter. Moving on to the next slide. As a result of the lower gross profit and higher operating expenses, EBITDA decreased 14.2% in the first nine months of the year and 21.4% in the quarter. EBITDA margin was also lower, although we did have a sequential improvement from 6.8% in the second quarter to 7% in the third quarter. As I mentioned before, so far in the fourth quarter, we've seen a recovery in our gross margin, which will also be reflected in our EBITDA margin. On the next slide, we have net income, which was down 35.2% in the nine months and 31.7% in the quarter. The decrease is essentially due to the lower operating income, partially offset by a higher income tax benefit relating to deferred taxes. 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 liability to EBITDA, including store rental, was 4.2 times in September, and when we adjust for store rentals, it was 2.1 times. This is higher than recent periods, primarily due to the lower EBITDA. On the right, net interest coverage, as reported, was 4.7 times in September, lower than in December because of the decrease in EBITDA, and also because we've increased our financial debt in preparation for maturities we have next year. The higher interest income that we receive from that cash isn't enough to offset the higher interest expense. When we adjust EBITDA and interest expense for store rentals, interest coverage was 9.7 times in September. On the next slide, we have our bond covenants, where we continue to have plenty of flexibility. Net financial debt to equity is at 0.55 times, well below the 1.03 limit, and interest coverage is 4.7 times, almost double the 2.5 times requirement. Finally, on the next slide, we have at the top a summary of our cash flow for the first nine months of this year. We started the year off with a very strong cash balance of CLP 105 billion, significantly higher than the minimum that we like to have on hand, which is in the neighborhood of CLP 45 billion-CLP 50 billion. Operating cash for the period was CLP 220 billion, and we've also issued three bonds this year and refinanced bank debt for a total cash inflow of CLP 183 billion. The bonds we issued are part of our refinancing strategy to flatten out our maturity profile. The uses of cash for the period included the amortization of bank debt and bonds for CLP 86 billion, lease payments of CLP 47 billion, interest payments of CLP 43 billion, CapEx of CLP 74 billion, and dividend payments of CLP 47 billion. CapEx of CLP 74 billion, I said. Leaving us with an ending balance of CLP 207 billion pesos in September, which is a cash surplus of about CLP 160 billion, leaving us well-positioned to cover the maturities we have in the fourth quarter and next year for about CLP 190 billion pesos. Below on the slide, we have our debt maturity profile, where you can see the amounts I just mentioned in 2024 and 2025. Shaded in pink, you can see the maturities of the three bonds that we placed this year. That's it for our presentation. Thanks so much for listening. If there are any questions, our operator will be happy to take them now. Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you are dialing by the telephone and have a question, please press star two, that's star two, and wait for your name to be called. If you are dialed in by the web, you may also ask a voice or a text question. Thank you very much. Our first question comes from Mr. Joel Lederman from Itaú. Please go ahead, sir. Your line is open. Hi, can you hear me? Yes, we can hear you. Please go ahead. Thank you very much. I just want to understand better the dynamics for the fourth quarter. Carolyn mentioned during the presentation that gross margin is improving due to commercial activity that you guys are having. I just want to understand how average ticket and traffic is evolving in the stores and how you are seeing fourth quarter results in terms of your commercial activity improving or whatever you can give us in terms of that specific issue. Just to add to my question, because you guys mentioned during last quarter results that you were expecting an EBITDA margin of 8% in terms of the guidance. With these numbers, I just want to understand if you still believe that you can manage to get to that guidance. Thank you very much. Okay. Morning. In this quarter, the sales improved, and we expect to maintain this performance in the next months and thereafter. Also, improvement in the gross margin. In October and first days of November, the gross margin of the company improved significantly, reaching the level of our regular margin or similar margin of 2022 or first quarter of this year. With this good news until now, we can improve in Q4 sales and gross margin. Therefore, the EBITDA margin should be better in Q4. The projection for 2025 is better result than Q2 and Q3 in 2024. Our long-term target for the EBITDA margin is 9%. Of course, this year is a difficult year because the growth of sales has not been significantly important. This quarter was good, with 2.8%. It was an important improvement compared with the previous quarters, but not enough to reduce sufficiently fixed costs. For this reason, our EBITDA margin for the full year in 2024 should be in the level of 8.8%, but with significant improvement in Q4. As for our expectation for 2025 is to improve the EBITDA margin close to our target of 9%, the level of 5.8%-9%. Especially, because we are expecting improving sales with our regular gross margin that was lower in Q2, Q3, but will be again in the level of 13.5%-18%. It's the ticket and transaction, that's also the other point that we are seeing to improve that because to improve the average ticket. Of course, less pressure of inflation in the average ticket increase the chance to improve the number of units in the basket. For this reason, our average ticket is improving in the last months. Thank you very much. Okay. Okay. Thank you. Thank you very much. Once again, star two for any questions. That's star two for additional questions. You may also ask a voice or a text question if you are dialed in via the web. Thank you. Our next question comes from Mr. Alonso Aramburú from BTG Pactual. Please go ahead, sir. Yes. Hi, good morning, and thank you for the call. Yeah. I just wanted to ask a little bit about competition, and it seems like your same-store sales have been underperforming your competitors. I was wondering if you have a feeling as to why the underperformance and what needs to be adjusted for you to be more in line with what the market is growing. Thank you. Okay. Hi, Alonso. Essentially, we changed our promotional strategy or commercial strategy in May and June. In Q3, we improved our sales, and we're expecting improve more in Q4 because we are more competitive in terms of prices but with promotions with more duration than the regular hi-lo promotions with a good response from our customers. We're expecting that this trend will be present in the next months, in Q4, improving our same-store sales. Also, we're expecting improve also in 2025. Also it's very, very important for us to improve our gross margin because to grow only sales with not very good gross margin than Q2, for example, is not our idea. The idea is to have profitability and to keep a good level of sales but also with good margin. We're expecting to improve with our new promotional activities because the customer received well this new strategy. Also we are obtaining financing from suppliers, therefore we can balance sales and gross margin in October, also in November, and probably improve in Q4 and also in 2025. Thank you. Another important news is that in October, for example, our market share improved in 20 basis points, with better sales and also with good gross margin. That is an important balance for us. In the first 16 days in November. Therefore, we have a good expectation about the result in the next months in both variables, sales and margin. Okay. I don't know if you mentioned this. I joined the call a little bit late. How are same-store sales trending in October, roughly? It's a same-store sales positive in October. The level of 1%-2%. Okay. Thank you. Same-store sales. Of course, the revenue was more because we have a new store. Right. Thank you. Okay, thank you very much. We have a text question from Mr. Emre Peksen from Impera Capital. Thank you very much for the presentation. Unfortunately, I got disconnected when Arturo was answering Joel's question and his remarks while I reconnected. Could you please remind us once again about your EBITDA margin expectation for the whole year of 2024? Many thanks. 8% for the full year is our expectation for EBITDA margin. Okay, thank you very much. Just once again, star two for any questions. That's star two for any questions or follow-up questions. We'll give another minute or so for any new questions to come through. We see no further questions at this point. I will be passing the line back to the management team for the concluding remarks. Great. Thanks everybody for joining us today. Feel free to get in touch if you have any further questions, and we hope to have you with us next quarter. Have a nice day. I wanna say. Thank you very much. This concludes today's conference call. We'll now be closing all the lines.