Good morning. Welcome to Grupo Rotoplas conference call. Please note that today's call is being recorded and all participants are currently in listen-only mode to prevent background noise. The host will open the floor for questions later. Today's discussion contains forward-looking statements. These statements are based on the environment as we currently see it, and as such, there may be certain risk and uncertainty associated with such statements. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, further events or otherwise. Please allow me to remind you that the company issued its earnings press release yesterday after market close. It can be found in the investor section of its website. The presentation for the call and the Webcast link are in the investor section. Today's call will be hosted by Mr. Carlos Rojas Aboumrad, Chief Executive Officer, and Mr. Mario Romero, Chief Financial Officer. I will now turn the call over to Mr. Carlos Rojas. Good morning, everybody. Thank you for joining us today. We really appreciate the opportunity to share and discuss with you our latest results and our perspectives. At Rotoplas, we have been relentless in our pursuit of excellence. The results we are sharing with you today are a testament to our unwavering commitment to growth, profitability, and responsible stewardship. I am proud to report that 2022 was a banner year for Rotoplas. With outperforming growth and continuous improvement in profitability, we managed to post both record sales and EBITDA, driven by an increase in demand for decentralized water solutions, as well as disciplined cost and expense management. We continue to strengthen our core business in order to invest in new growth avenues, which are solutions that support climate change mitigation efforts. We have recorded a sequential improvement in margins, all while navigating a challenging economic and political landscape in some of our markets and staying true to our commitment to best ESG principles and practices. As you can see in this slide, we have focused all of our efforts on meeting the guidance we have given to the market since the beginning of Flow. During the past years, we have made strategic decisions to cope with the COVID pandemic, the disruption of supply chains, increased costs of commodities and shipping. Our efforts have resulted in a significant increase in year-over-year sales. Our ROIC has exceeded the cost of capital, which was one of the key objectives of our transformation program. Our leverage remains below two times. This year, we were able to meet 100% of the market guidance. We exceeded our net sales growth target by 200 basis points, noting not only the strength of our core business, but also a recovery during the fourth quarter in services. We recorded an EBITDA margin of 15.5%, maintained leverage at 1.7x. Finally, ROIC was 140 basis points above the cost of capital. 40 basis points above the guidance for 2022. I am also excited to announce that we have fulfilled our ESG annual goals in the profit, people, and planet spheres. We have made significant progress in each area. Our focus on being a sustainable company extends beyond our own operations, and we're pushing others to do the same. For example, we're evaluating our suppliers using ESG criteria. We are committed to becoming a carbon neutral company by 2040, and we have been taking steps to reduce our scope one and scope two emissions. Additionally, we're also working hard to create more diverse and inclusive workforce. Our goal of reaching 30% participation of women in our workforce is an important step towards this end, and we're making good progress in this area. Mario will discuss in further detail our annual ESG results and what we're expecting for 2023. Going back to the financial goals, as you know, at Rotoplas, we have our sights set high. Our 2025 goals are ambitious and include doubling the 2020 year yearly net sales, reaching an EBITDA margin of 20% or more, keeping a debt to EBITDA ratio of less than 2 x, and ensuring we create value for our investors with a double-digit return on invested return on investment above our cost of capital. In fact, our growth was even greater than expected at this point, taking us even closer to our goal. We have recorded a 22% CAGR in the last two years. If we continue at this growth rate, we could reach our sales target a year earlier than initially planned. Just as important as these results, however, and perhaps even more important, is how we achieved them. As we have discussed in previous calls, throughout the past three years, we have addressed significant challenges, including the COVID pandemics, severe disruptions in supply chains, and uncertain economic environments. Even as we continue to address these challenges, we have remained focused on pursuing new opportunities that have shown remarkable potential. We have been able to continue building the next stage of our company, the Rotoplas of the future. A key component in this process has been the discipline and agility brought about by our transformation program, Flow. By prioritizing initiatives with the greatest value creation potential, we have been able to continue delivering innovative water solutions that meet the needs of our customers, anticipate future water consumption trends, and brings us closer to smarter, more sustainable water management. In a context of increasing water scarcity and changing consumer habits, our aim continues to be to fulfill the current and future needs of our clients and our societies. Another crucial component has been the continuing strength of our core business, in which we continue to innovate while increasing our market leadership through flexible and responsive commercial strategies, as well as allocating capital in a disciplined and strategic manner to enable us to ensure an adequate supply of raw materials and undertake the modernization of our production process. These strategies were made possible by the consistent improvement in our margins and our overall financial strength. Despite the unpredictable economic and political climate, we're ready to capitalize on new opportunities. We remain flexible, agile, and committed to making the most of the opportunities that come our way. Finally, at Rotoplas, we recognize that the watering industry is uniquely important, and that our role as a leader in decentralized water solutions carries with it a responsibility to uphold the highest standards of environmental, social, and governance practices. That is why I would like to share that our most recent CDP climate change questionnaire results place us near the top echelon of environmental reporting amongst the top of, top 20 companies in our region, attesting to our commitment to hold ourselves accountable in our environmental impact. In addition, for the sixth consecutive year and since its creation, our remaining Dow Jones Sustainability MILA Pacific Alliance Index sample. This index is comprised of 68 sustainable leaders, out of which 35% are Mexican. In conclusion, I am happy with our results in 2022, and I am confident in our ability to continue delivering value to our investors and our stakeholders. I look forward to your questions, and thank you very much for your continued support to Rotoplas. With that, I will turn the call over to Mario for a closer look at the numbers. Thank you, Carlos, thank you all for joining us today. Along with Carlos, I am also proud to report that we fulfill our guidance and achieve outstanding results despite the challenging and ever-evolving market conditions across the regions where we operate. Our commitment to excellence and innovation has propelled us to the forefront of the water industry, the sector that is becoming increasingly vital as the world faces an unprecedented water crisis. Our team's agility and discipline have enabled us deliver record results, solidifying our position. With our growth and profitability goals for 2025 firmly in sight and our unwavering focus on ESG objectives, Rotoplas is prepared for even greater achievements in the coming years. Before talking about 2023 financial guidance, let's go through our latest results. Sales increased 12% in the fourth quarter and 17% for the whole year, amounting to MXN 12.8 billion. This is a new historic high for Rotoplas. It is a clear demonstration of the strength of our core businesses, driven by the growth in product sales. The growth was accompanied by a consistent improvement in our margins, both year-over-year and compared to the previous quarter. As we've discussed in previous calls, we implemented an agile pricing strategy that, combined with the unparalleled strength of our brands and our supply chain management, has allowed us not only to increase our market share, but to do so in a way that improves our margins. In the 4th quarter, our gross margin increased by 560 basis points. For the year, we saw a margin increase of 450 basis points. Our quarterly operating profit grew 38% and 49% during the year. EBITDA increased by 8% during the quarter and 12% over the year, totaling MXN 550 million in the fourth quarter and a record-breaking MXN 1.9 billion over the last twelve months. It is important to note that the EBITDA margin improved relative to the previous quarter, although it decreased annually due to the expenses associated with the development of our new businesses. Although these expenses had a temporary impact of MXN 60 million in the fourth quarter and MXN 288 million over the year. We are steadfast in our belief that these investments will pay off in the long term, as these new businesses will become significant growth avenues for our company. Finally, our quarterly net profits increased 4 x year-over-year, whereas the net profit for the full year was up 2.4x, amounting to MXN 756 million, another historical record for the company. Moving forward to our geographic breakdown. Let's start with Mexico. Mexico, we saw a 15% growth in quarterly sales and a 30% growth in 2022, driven by robust demand for our storage and water flow solutions, as well as the continued success of bebbia. The strength in product sales led to double-digit increases in EBITDA, an expansion in the EBITDA margin during the quarter and the year, despite accounting for inflation and the negative EBITDA of the service platform. In Argentina, quarterly sales grew 11%, even as demand decreased and the construction industry slowed down during the last quarter. Sales grew 41% during the year, driven by an improved commercial planning process and agile pricing strategy, responsive to an inflationary environment. Sales in the United States increased by 3% in the quarter and 8% for the year due to a rising volume and prices. Demand during the fourth quarter was impacted by the winter season and current economic conditions. The e-commerce platform and the developing septic solution business continued to grow. However, associated with expenses negatively affect the EBITDA margin. As for other countries, sales in Central America and Peru have decreased as a result of a marked economic contraction and the resulting reduction in demand. Aquantis Brasil's pipeline continues to expand, and we continue to develop new water treatment and recycling plants. Moving on to our solutions portfolio breakdown. Product sales grew 11% during the quarter and 18% during the year, with double-digit growth across all the categories of products: storage, water flow, and treatment. This compensated for the lack of growth of services sales during the first nine months of the year. Although it should be noted that bebbia, our drinking water platform, continues growing at an accelerated pace and offset the other businesses within the service platform during the last quarter. In terms of our portfolio mix, sales of products represented 96% of total sales during the quarter. Moving to some balance sheet items, our cash and debt position. We maintain a strong balance sheet, which, as we have discussed in previous calls, provides a solid financial platform to both pursue growth and profitability. Our net debt to EBITDA ratio is 1.7 x, below our 2x leverage policy. It is worth noting that our debt position only considers the sustainable bond offer 17/2X, which is net MXN 4 billion, has a maturity date of June 2027, and was issued at a fixed rate of 8.65% per year. As Charlie pointed out, our supply chain remains closely monitored to secure the raw materials needed to meet product demand global supply chain stability. This effort has led to a rise in cash conversion cycle and working capital, but we remain dedicated to optimizing and stabilizing them. As for CapEx, this one amounted to 5% of total sales for the year, 28% higher than in 2021. Most of these capital expenditures are being directed at upgrading our core product business, increasing the sustainability of our manufacturing operations, and strengthening the leadership position of our brands while increasing their profitability. All of which enable us to continue moving forward with the development of our new businesses, as we have mentioned. We will continue to be disciplined and agile with our capital allocation and spending, ensuring that we prioritize the key growth drivers. As for the key metric ROIC, this one exceeded our guidance, reaching 14.1% as of December 2022. This was 140 basis points above our cost of capital, bolstering our focus on long-term sustainable value creation and keeping up with the goals outlined in the 2025 sustainable growth plan. I would like to discuss more on the impact we have with our sustainability strategy. We achieved outstanding results in our ESG initiatives this year. As Charlie mentioned, our targets were all met, and some even exceeded. We expect to make further gains towards our 2025 goals this year. As you can see in the chart, 20% of direct providers were evaluated, and we expect to evaluate 45% in 2023. The NPS score was 72.4 points above the original goal, and it will rise to at least 73 this year. We reached 0.48 carbon emissions intensity under the 0.50 goal and expect to bring it down to 0.45 by year's end. There were 404,000 cubic meters of water purified using our solution, 90,000 more than the annual goal, and we anticipate purifying more than 600,000 cubic meters of water during 2023. The accumulated amount of people impacted with access to sanitation re-reached 553,000, 10,000 more than the goal for the past year. This year, we expect to add more than 200,000 people to reach close to 800,000 on a cumulative basis since 2021. We closed 2022 with a 24% of women in our workforce. We will increase it to 27% by next December. We were recognized for our efforts and named the Sustainable Innovation Leading Company in the governance category by Leading Companies in Sustainable Innovation Awards. Finally, as part of our sustainability strategy's people pillar, we launched an initiative to promote individual wellness for our employees. This initiative, which included a health fair and a series of lectures and workshops on diversity and inclusion, have nearly 1,400 participants. These efforts are a testament to our commitment to creating a positive work environment and promoting the health and well-being of our employees. Before opening the floor for questions, I would like to close with this year's guidance. In light of our results, our 2023 guidance is as follows: sales growth will be equal or greater than 15%. The EBITDA margin will come between 16% and 17%. Net debt to EBITDA ratio will be kept below 2 x, and we are targeting a return on invested capital 150 basis points above our cost of capital. With this, I will thank you very much for your time and attention. We will now answer any questions you may have. Thank you, Mario. You can submit a question by pressing the Q&A button. Please include your name and your fund or company. This question comes from Carlos Alcaraz at Apalache Análisis. Hello, good morning. Thank you for taking my questions, and congratulations for the remarkable results. Carlos has three questions, and I will read them separately. The first one is related to CapEx. What% of your revenues do you expect to spend during 2023? Hello, Carlos. Thank you for joining the call. Mario has a precise percentage. It's gonna be reducing from previous year without considering wastewater treatment plants, no? But... Yeah. Well, first, Carlos, thanks for joining this morning. We're targeting to have a gross margin above 40%. To your CapEx question, CapEx will come below 5% as a percentage of sales. Go ahead, Mario. Carlos' second question is related to gross margin. If commodity prices remain stable, what gross margin do you expect to reach by the end of 2023? I already answered that one, so. But it's- I answered both. Then Carlos' last question is related to the increase observed during the last years in the intensity of natural phenomena in Central and North America. Carlos is asking if Rotoplas has any plans to enter any new markets, mainly in the product segment. Not necessarily, Carlos. We would like to focus more on growing our business in North America, particularly in the United States. There are other potential markets that might be interesting, but we believe that as a strategy focusing on that market, which increases the size of the market that we service and increases the stability for our business, that would be the strategy that we'd like to focus most on. Thank you. The second question is from Carmen Barone, Miranda Partners. Hello, and congrats on your results. Her question is: Do you expect a positive impact from nearshoring in your business this year? Hello, Carmen. Thank you very much for joining. Thanks for the message. We do expect a positive impact in nearshoring if it does happens. Hopefully it will happen in a big way through Mexico. We're very hopeful for that. If it is happening, lots of new facilities will be built that will require water solutions, particularly in the kinds of wastewater treatment plants. The infrastructure that we have in the country has not anticipated this kind of growth and this kind of services needed. We expect that for this to be feasible, these industries would have to become proactive in solving for water solutions. They'll need to harvest rainwater, they'll need to treat water, they'll need to reuse that water, and this would generate impact for Rotoplas. The level of impact in 2023, we would not be clear on it, as we are not clear on the pace at which new facilities would be developed. We would have the engineering capabilities and the field services and project management capabilities to be able to execute in a way that grows this business for Rotoplas in a relevant way. Just probably just to complement Charlie, Carmen, in our plan for 2023, we are not considering any additional revenues because of nearshoring. Thank you. Felipe Barragan from BTG Pactual has a couple of questions. I'm gonna read the first one. We saw sales growth in this quarter in the other countries segment. The commentary makes it seem that Brazil was the main contributor to year-over-year growth. Am I reading this properly, or are the slowdowns in Peru and Central America merely on volumes with continued increases in pricing for this region? Oh, Mario, would you... Good morning, Felipe, and thanks for joining us this morning. Yes. Well, let me explain it in different, in different parts. Yes, Brazil is starting to see some tractions on the revenue side, and the reason is, as you know, we are developing the water treatment and recycling business there. you know, you start with installation, and takes some time to start recording the revenues. Now we just started to see that coming from Brazil, and that obviously will accelerate in the months to come. In the other side, Peru, with all the, I would say social, and political turmoil that they have lived in the last four months or so, it has had some impacts on the economic side. Some road closures, some store closures as well. It's been tricky to operate in Peru in the last quarter. We saw a slowdown in volumes because of this reason. Things are starting to normalize, but yes, this situation impacted Peru. Central America, it depends country by country. Some of them are just paying the after COVID situation. There's some volume slowdown in Central America. All in all, you have the right reading. The explanations behind them is just the way I just explained to you. The other question from Felipe is, I recall a 5% CapEx of sales moving forward from our day. Will we continue to see further CapEx on the e-commerce platform for the US? When do you think we can see an inflection point for the US EBITDA to go into positive territory? Thank you. Thanks for the question, Felipe. We do expect to continue investing in the U.S. platform, the e-commerce platform. We imagine it'll be the nature of that business going forward. It's a place where CapEx is always required as technology evolves, it's something that continues to happen all the time. Investments will maybe reduce a little bit in that part of the e-commerce, we will continue to invest in the U.S. as it is a market that we wanna focus our growth on. Regarding the change of EBITDA into positive territory, we've been managing this business in a way where we have it very close to breakeven. The reason for that is while the e-commerce business does generate a profitable business, we are continuing to invest in developing the business in other areas such as the septic opportunity that we have discussed in the past. It is a very big opportunity that requires investment to develop. Hopefully we'll start to have better results in 2024 in terms of EBITDA, but we should see high growth in the revenues of this business in 2023. Mario, anything else that you'd like to add? Yes, just on the EBITDA side, we are targeting to be breakeven or slightly above breakeven in 2023. In the second half of this year? Sorry, Mariana, can you read the next question? Sure. It's from Martín Lara, Miranda Global Research. Do you expect an acceleration in the US and Argentina's results in the second half of the year? I think it's, we are very early on in the year to see what are gonna be the dynamics between the first half and the second half. What we have in our plan is a slight recession in the U.S., going into the third quarter of 2023. That's what we have incorporated in our plan. In Argentina, it's an electoral year. We expect some volatility in the FX market affecting inflation, which we believe is gonna come out close to 100%. We have incorporated that two variables into our plan. Right now, trying to guess what's gonna happen in the second half, we don't have the view on that part of the year. Nothing to add. Mariana, would you like to read the next one? Yes. It's from Kat. She has a follow-up question. Regarding pricing, could you give more color on what Argentina and the US will be for 2023, and also for the rest of the countries? Pricing is today at a level where we are generating very healthy profit margins. We expect that there may be slight increase in resin prices, which we would reflect, but we do not foresee a dynamic in pricing in the way we have had it in the past few years. This would be for all markets where we are in the products business. In terms of the rest of the countries, I would just summarize it that way. Except for Brazil, which is the only market in which we do not have the products business, prices would only change as resin prices changes. That is not gonna be the same dynamic as the previous years. Mariano, anything else to add? No. I think you just nailed it. Okay. Mariana, you're not coming through. mainly Mexico quarter improvement we see on other countries. Mariana, we will look into there for a second. Can you just repeat whose question you're reading and maybe I can read it? Sure. It's Rodrigo Salazar from AM Advisors. He would love some color on margin expansions. He's saying, "Mainly Mexico products and the impressive quarter-over-quarter improvement we saw on other countries, when can we expect the ramp-up factoring plan? You had margins this quarter higher than your 2023 guidance. Maybe an explanation of this. Was it due to something special, or do you expect more pressure going forward? Yeah. Thanks, Rodrigo. Thanks for joining us this morning. Yes, you have a very good question. Let me see if I can explain what are the difference between guidance and the fourth quarter results. In the fourth quarter results, we saw kind of a very stable price in raw materials. At the same time, we saw a very good FX level at the same time. That benefit our gross margin as well as our EBITDA margin. Going to 2023, we are projecting an FX of MXN 20.53. Raw material costs, not as favorable as the ones we saw in the fourth quarter. The reason is all the energy situation around, cost being pressured by some macroeconomic situations that we all know about. Those two factors affects our guidance in 2023. If those two variables, you know, the FX and the raw materials behave in the same level, then you will see better rough margins in 2023. As of now, with the information we have, those are the what we are projecting in this year. On the ramp-up of the new manufacturing plants, remember there are many plants because it's not only one plant. It's all the water tank plants that are being upgraded with the new technology. We are halfway on, let's say, modernizing and bringing the new technology to produce the new and better product. This year, we will finalize with the other half. By the end of 2023, you will be seeing in the marketplace in Mexico, the new water tanks everywhere. I don't know, Carlos, do you want to add on it? No. That's good. You wanna read the next question, Mariana? Sure. The second question now from Rodrigo is also some color on how the US is developing. I understand this quarter was impacted by weather, but growth previous quarters has been lower than you initially expected. Could you comment on why this happened? Growth in the U.S. is really gonna be a consequence of our capabilities in this e-commerce model. We have been investing very heavily in developing our e-commerce. In that process, that was the focus for the business, developing that capability, which only after a period of time of developing itThat comes online, and then you can start seeing the results. Similar to a manufacturing facility, only after you finish the project, you can only start seeing the increase in revenues. That, that has been the case for the U.S. A big progress has been made in 2022, and that is why we think growth rates in 2023 will be higher for this business in the revenues level. Mario, anything else that you'd like to add? No. Right. Rodrigo's last question is, could you comment on working capital? What do you expect for 2023, and what strategies around that? He thanks you and congratulates you on the results and ESG achievements. Thank you, Rodrigo. Rodrigo, as explained in the call, To put it in more market terms, we were long inventories, to cope with the volatility and instability of our supply chains. We're targeting to reduce to a more normalized level of working capital in 2023, except in Argentina that we'll be still long in inventories. That's, that speaks more to a hedging strategy than the managing of the working capital. That's, that's the reason behind that. We have another question from Pablo Delgado del Campo. Congratulations for the results. Are you considering any strategy during 2023 to reduce the potential impact on devaluation and hyperinflation in Argentina? Let me just... If you don't mind, I can jump into this one, 'cause this one connects to the last question from Rodrigo. In Argentina, really there's three things you need to always be very good at. One is have leading brands. You really set the price increases in the market. That helps you to keep up with the hyperinflation scenarios. The strategy behind this is that in all three categories, we have leading brands, and we always keep up on increasing prices as inflation hits in. That was the case last year, and it's gonna be the case this year. Last year, inflation was 86%. This year we are projecting 95%. We really do monthly adjustments on prices. The team there has become very good at doing so. Then on the effects, which is also related to inflation, what you need to do is be as good or short in accounts receivable, belong in inventories, because if you're hit by a step devaluation, then you can regain some of that effect into your inventories. That's the best way to mitigate short-term depreciation of the FX. Fixed assets, that with inflation component, recover their value in a period less than 12 months. That's pretty much the strategy about managing FX and hyperinflation in Argentina. We have another question from Sofia Martin, from GBM. Could you give more color on bebbia? Are there any updates on the expected break even? Yes. Thank you very much for the question, Sofia. bebbia, the way we account for this business, as we cost the product and installation of a new customer, it's a business where high growth generates losses at the EBITDA level. We expect to have the same dynamic for at least the next 5 years. It's a business where we should be looking at revenue growth, and we can be more detailed in the future on the unit economics. It's a business that has high returns projected on these revenues or growth in revenues. We expect that for bebbia, we will continue to grow rapidly at least for the next 5 years, generating losses in the EBITDA levels. Mario, anything else that you'd like. I would just probably compliment Charlie. First, Sofia, good morning, and thanks for joining. Precisely yesterday we were discussing at the board meeting how to pursue this very important opportunity. We have basically developed two scenarios which they differ on when you become a free cash flow breakeven. If you go with a more or with a less aggressive growth scenario, free cash flow breakeven can become available by 2025. If we really become more aggressive, that can be achieved by 2027. The reason I'm telling you this is we have a very good assessment that the opportunity is big, and there is the opportunity just hanging out there. It's just a matter of how the company will end up taking care of this opportunity. I know it's not the answer that you would love to have, anywhere between 2025-2027, depending on which path the company follows. Rest assured that it will create a lot of value to all shareholders in the long term. Carlos and Mario, this was the last question. All right. Thank you very much for joining us today. See you next quarter. In the meantime, we will keep in touch. Have a nice day. Thank you very much. Thank you, everyone. Have a good day. Bye-bye.