Good day, and welcome to the Grupo Bimbo's third quarter 2023 results conference call. If you need a copy of the press release issued yesterday, it is available on the company's website at www.grupobimbo.com. Before we begin, I would like to remind you that this call is being recorded, and that the information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risk and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements. I would now like to turn the conference over to Mr. Rafael Pamias, Chief Operating Officer of Grupo Bimbo. Please go ahead, sir. Yes, good afternoon, everyone. Thank you for joining us. Connected on the line today is our CFO, Diego Gaxiola, Mark Bendix, Executive Vice President, and several members of our finance team. Unfortunately, Daniel is unable to join us today, but I will try to communicate the message the best way I can. Before presenting the company's financial results, I would like to express, on behalf of myself and all Grupo Bimbo's associates, our deepest solidarity with the people from the state of Guerrero, who's currently facing an extremely difficult situation after the impact of Category Five Hurricane Otis on the Mexican Pacific Coast, which has severely affected the city of Acapulco and its surrounding regions. Although the enormous damage that this phenomenon has caused is very difficult to quantify yet, we hope that families will soon be able to return to their homes and find the necessary strength to recover their daily lives and move forward. Around 500 Grupo Bimbo's associates live in the affected areas. We're taking all necessary actions to ensure their well-being, as well as that of their families, our consumers, and customers. We will be monitoring very closely the situation to take the actions to help alleviate the impact of this event. Our hearts are with you. I'm gonna start now. In the face of a very strong Mexican peso increase, but moderated inflationary pressures and the MEPPs non-cash benefit registered in the third quarter of 2022, which makes the comparison in some metrics tougher, our results for the third quarter were exceptional as we reached record levels for net sales and Adjusted EBITDA, of course, excluding FX rate impact, and our EBITDA margin strongly expanded 50 basis points, now standing at a robust 14.6%. Both key metrics have consistently improved, showcasing 10 years compound annual growth rates of 5% and 7%, respectively. Moreover, we successfully completed two strategic acquisitions, and our CapEx investments reached record-breaking levels so far. We also advanced towards our ESG goals, reaching 27 countries, which are now operating with 100% renewable electricity, and we were ranked number one as the company with the best corporate reputation in Mexico by Merco. In September, we held the 2023 Bimbo Global Race, and thanks to more than 300,000 participants, including 180,000 virtual runners, more than 2.8 billion slices of bread are being donated to food banks around the world. Before I jump into the results of the quarter, I would like to share with you the 3, the 3 investments we made through Bimbo Ventures, our venture capital arm, Harbinger Motors, Healthy Brand, and Finca. We also kickstarted our second edition of Bimbo Open Door, our open innovation program focused on collaborating with promising startups. In this year's edition, we are focusing the program on the cookies and bars categories. Looking now into the results by region for the quarter, North America delivered another quarter of strong top-line growth, growing more than 6%, excluding FX effect, across all categories, with notable growth rates from buns and rolls, breakfast, and salty snacks. However, volumes were soft, consistent with the overall category, but more than upset by carryover pricing, which was implemented in 2022. It is relevant to mention that the rate of decline in, is slowing sequentially. In fact, in the first weeks of October, we saw share gains on our sweet baked goods and English muffins businesses, which are critical to the overall success of achieving North America's top and bottom line objectives. Adjusted EBITDA margin constructed 80 basis points. This construction is primarily due to continued but moderated inflation, category and channel mix, partially offset by improved productivity benefits. We remain focused on eliminating waste and investing in key areas of our business to optimize our operations and ultimately reach our full potential. As we move forward into the fourth quarter, we anticipate a better volume performance. This improvement will be a direct result of the innovative and effective commercial strategies we are currently implementing in the marketplace. We remain confident in our ability to overcome these challenges and drive the growth trajectory in the right direction. During the quarter, we successfully acquired Mile Hi Bakery in Colorado, U.S., known for producing buns and English muffins for the QSR channel. This strategic acquisition strengthens our geographic presence in this high-growth industry and open doors to new QSR customers in the U.S. In Mexico, we are thrilled to report a remarkable increase of over 8% in net sales, primarily driven by favorable price and product mix. Notably, we witnessed healthy growth in various categories, especially tortillas, cookies, buns, cakes, and snacks, and double-digit growth in the convenient and retail channels. Our adjusted EBITDA margin posted significant expansion, surging by 140 basis points. This was a direct result of sales performance, coupled with lower cost of sales and enhanced distribution network efficiencies, including the incorporation of digital solutions. These achievements reflect our commitment to delivering quality products while ensuring cost-effective operations for sustained growth in the Mexican market. Moving to EAA, we achieved an outstanding growth of over 20% in sales, excluding the impact of FX fluctuations. This remarkable growth was primarily driven by a positive price and product mix throughout the region, with notable strength in Iberia. Additionally, the continued robust performance of Bimbo QSR, especially in China, along with the contribution from our strategic acquisitions of Vel Pitar in Romania and St Pierre in UK, contributed to this growth. Adjusted EBITDA margin posted a strong 100 basis points expansion, mostly due to the strong sales performance, lower cost of sales, and the successful implementation of productivity-enhancing initiatives. During the quarter, we also completed the acquisition of the majority stake of our QSR business in Switzerland, Cottens, leaving us with a 60% stake of the business. This allows us to integrate the facility in our footprint to further enhance our presence in the country. Finally, moving on to Latin America, excluding FX effects, net sales increased more than 14%, with growth in local currencies in every organization, highlighting Brazil and the Latin Sur division, favorable price mix across the region, and strong volume performance in Brazil, which continues to post record-breaking results. Adjusted EBITDA margin reached a sustainable double-digit record level at 10.5%, attributed to the strong sales performance, improved product mix, and productivity benefits across the business, highlighting the extraordinary performance of Brazil. I would now like to turn over the call to Diego, who will walk you through our financials. Please, Diego, go ahead. Thank you, Rafa. Good afternoon, all. Thank you for joining us today. Our third quarter results continue to impress, especially when we consider a soft consumer environment and a complex operating environment in some markets. We were able to reach record levels of net sales and adjusted EBITDA, of course, excluding the super peso effect. Our sales grew above 8%, excluding FX effect. Our adjusted EBITDA margin expanded 50 basis points, reaching 14.6%, and our operating margin, excluding the net non-cash benefit of the third quarter of last year, improved by 30 basis points. However, our financing costs rose by over 30%, mainly due to increased debt, the refinancing of our perpetual bonds completed earlier this year, and the impact from higher interest rates. As a result of the FX translation effect, the net effect and the higher financing costs, our net majority income declined by 31%. Our cumulative effective tax rate closed the quarter at 33.5%. Shifting to the balance sheet, our net debt to adjusted EBITDA ratio stands at 2x, with total debt increasing by MXN 23 billion. This is primarily because of a higher debt position, the perpetual bonds refinancing accounting impact, and the strategic acquisitions completed in the past twelve months, coupled with our intensive capital expenditure program aimed at fostering our prospective expansion across diverse countries and product categories. We have also seen a rise in short-term debt, mainly due to the upcoming maturity of our 2024 bonds. We are continuously evaluating market conditions and alternatives to face such maturity. At the same time, we remain confident, given the flexibility and liquidity that our committed revolving credit facility for $1.93 billion provides to us. Our net operating working capital increased by 3.3 days over the third quarter of 2022, equivalent to around MXN 3.4 billion, mostly due to increases in inventory and clients. Lastly, despite the FX rate conversion effect, our local currency results remain strong, and we would like to reaffirm our 2023 guidance. We continue to anticipate sales growth in a low- to mid-single-digit range. As for the adjusted EBITDA, we expect to have a growth between the mid- to high-single-digit range, as we feel confident that during the fourth quarter, we will have another quarter with a margin expansion. For CapEx, we continue to expect to be within the range we previously provided, with investments between $1.7 billion-$2 billion. We have weathered the worst of the impact from commodities inflation, and as we move into the fourth quarter and beyond, we will start to see some tailwinds. These, combined with operating leverage from sales growth and productivity gains from past investments in CapEx and OpEx, as well as the positive effect of our FX rate hedges, will help us to reach our profitability targets for the year. In conclusion, we remain committed to our long-term goals and look forward to continuing our journey of growth and profitability. Thank you for your attention and ongoing support. We can now proceed with the Q&A session, please. Thank you. We will now begin the question-and-answer session. If you have a question, please press star then one on your touchtone phone at this time or at any time. If at any point your question is answered, you may remove yourself from the queue by pressing the pound key. Questions will be taken in the order they are received. We do ask that when you pose your questions, that you pick up your handset to provide optimum sound quality. Please hold while we pause for questions. The first question will come from Fernando Olvera with Bank of America. Please go ahead, sir. Hi, good afternoon, and thanks for taking my question. The first one is related to North America. How do you expect mix and categories to behave in the fourth quarter and 2024, given the softness and overall mix that you observed this quarter? My second question is related to Mexico. If you can explain the lower administrative expenses and how should we think about this line going forward? Thank you. Mark, do you want to take the first question in North America? For sure. Great. Good afternoon, all. Let me talk to you a little bit about what we see in North America. First off, I need to share with you how proud I am of our frontline associates, how they continue to rise to any challenges presented to us, and we know we're seeing a dynamic environment. So as we navigate through this dynamic environment in which we compete, we remain focused on controlling what we can control, right? So we're gonna continue to leverage our frontline capabilities to drive top-line growth across our categories. So that relies on new innovation, alternate channels, sweet baked goods, and snacks. We continue our disciplined pricing execution in the face of ongoing inflation. We're actively monitoring the demand elasticity trends and our channel mix so that we can adjust to meet the evolving needs of our customers and consumers and drive the improvement, margin improvement that we expect. What we're seeing now is we're seeing that inflation is beginning to moderate, and we expect that rate of inflation starting to improve in Q4, which is welcomed. Our supply chain continues to improve as well, and we made meaningful progress on our cost savings and productivity initiatives, which are in turn led to vast improvement in our service levels. So all in all, we're looking at many topics in this dynamic environment, and we are cautiously optimistic for the fourth quarter. Great. Thank you. If you want, I can take the question regarding administrative expenses in Mexico. Yes. So, that, Fernando, this is based on different efforts. One, of course, is having a very tight control of expenses. We have continued to push aggressively, internally, the zero-based methodology, and being very cautious on every dollar that we invest, expend in all the different geographies of the company. We have also been able to use and leverage more the use of technology, which is also helping. And finally, I would say we have a positive tailwind effect by having a stronger peso exchange rate. All the expenses that we have outside of Mexico are represented in pesos because of the strength of the Mexican peso. Great. Thank you so much. The next question will come from Ricardo Alves with Morgan Stanley. Please go ahead. Hi, everyone. Thanks for the call. I wanted to insist a little bit more in North America, specifically on sweet snacks. It's roughly the same question that I asked in the previous call. But I noticed in your preliminary remarks that it seems that sweet snacks, or at least if I understood correctly, sweet snacks are improving. And I find that very interesting. We've noticed that competition within the sweet snack category specifically has been tougher in 2023. So I just wanted to see if you can expand specifically on this category. Is it anything specific that you're doing? We've discussed many times, perhaps Bimbo attacking the C- store channel more effectively, if maybe that could be a possibility. So just wanted to expand a little bit more in that category, specific, specifically. And then the second question, which is also in the U.S., but a little bit related to the other stuff. I just wanted to get the latest on your private label exposure and the evolution of the mix, because I noticed you mentioned a couple of times unfavorable mix in the U.S. as well. So I just wanted to get a sense on private label. And then just a very quick question is, you know, how management, how you guys are thinking or are assessing the risk of potential demand impacts associated with, you know, GLP-1 drugs and, you know, overall the obesity drugs discussions that is picking up in the U.S. Appreciate the time. Thank you. Okay, let's, let me talk a little bit about sweet baked goods and how we're, we're doing that. Thanks for the question. So obviously, volume has been soft, but they're also trending along with the, the total edibles category, which is down 2.1%. Total breads are down 2.3% in units, and total sweet baked goods, 2.7. And we, we know that the consumers are stressed and seeking value, for sure. And from a share perspective, private label and value brands have gained unit and dollar share. So we continue to invest in our marketing, delivering enhanced programs and trying to deliver excitement in our brands. We recognize that sales growth are across all categories, driven by prior year and pricing actions for the most part. So if you look across many of our categories, our share performance was soft in mainstream breakfast and sweet baked goods, while premium and buns and rolls are growing along with snacks. But like many CPG companies, we continue to experience both cost pressures across many of those areas in our business, from elevated input costs, transportation, real estate, labor, and offset by carryover pricing and strong execution. We're excited about our sweet baked goods because we continue to invest in portability and just as the question suggested, extending the channels where those sweet baked goods will become relevant, like C- stores. So we see great opportunity in that expansion. In terms of, I'll hit the second question, which was, I think, private label is what you mentioned. And so let me give you a little bit of feeling about what we're seeing in North America. So category volume is soft, including private label. However, private label is gaining share, both dollar and units, as consumers are now seeking volume. Now we're seeing that there's been a challenge for consumers and certainly a dynamic environment for sure. Our mainstream premium buns and rolls and breakfast and sweet baked goods were challenged as consumers traded down to private label and value-based retailers. Consumers are largely gravitating towards value and channel in club and mass, as well as private label. Also, some premium buyers are also trading down to mainstream. So while we focus our efforts on branded business, we do have a significant private label business, and our private label and food service business play an important role in our portfolio. So we're focusing heavily on that. We look from asset utilization to building partnerships with our customers, and our goal is to ensure that we continue to improve the profitability and efficiency of our non-branded business. And just as a bit of perspective, during the pandemic, many of the manufacturers narrowed their SKU assortment as a necessity to mostly branded items as we were all challenged and had a smaller workforce. And now that the pandemic is over and our job is not solely feeding America, it's the SKU assortment has expanded again, and the availability of full SKU assortment and branded label expansion. So just for perspective, the gains that we made in share and dollars, we've largely kept from during COVID. Now, the last quarter has been challenging, but we remain optimistic that our initiatives on promotion, productivity, and innovation will continue to add momentum for us. I, I will take the authentic question. We're looking and studying it seriously, like any upcoming trend or change in consumer habits. We do believe at this point that it is too early to tell the effects, also the side effects and potential scalability. What we can also tell you is that, when we take a look at our categories, our overall sentiment is positive. Our balance is positive, because we're seeing a continuous and strong shift to branded and packaged, because consumers keep looking for safety, convenience, and innovation. Take a look at our expanding geographical footprint, the fact that we are making our recipes also more natural and simple. Last but not least, we are laser-focused on grain-based solutions, which is one of the key points of the upcoming planetary diets. So, nutrition is not only about eating less. But in our case, and in the case of grains, all the recommendations is about to eat more. So in overall, I would say we are cautious, we are serious about assessing it, but we are confident and busy to keep growing our categories. Very helpful. Thanks, everybody. Okay. The next question will come from Ben Theurer with Barclays. Please go ahead. Yeah, good evening, and thank you very much for taking my question. Congrats on the results. Just wanted to follow up on two things that you flagged in your report, and wanted to maybe get a little more color as it relates to just the volume performance across different regions. So you clearly put on a little more of an optimistic tone, but wanted to understand what you're seeing in, like, volume dynamics, North America, Mexico in particular, but also EAA and LATAM, consumer behavior, down trading, back trading, private label versus brand. Where do you think this is going to shake out in the next, whatever, two to three quarters or so? You wanna start, Mark, with the US? For sure. Follow up. Thank you. As I hope I detailed in the last question, we remain optimistic that the challenged consumer will start migrating back. It's been definitely a challenged consumer in the last quarter. It's like no dynamic that we've seen recently with a post-COVID environment. We've got people that are being welcomed back to work, so sweet bakers and breakfast have been a bit challenged. We think that evened out as we go forward and the work environment begins to even out, and we continue to invest in our promotional and our innovation strategies. It's what we've seen with our promotional strategy, the elasticity is not the same that we've seen in previous years. So we know it's a dynamic environment, but we know we're making investments in innovation, in alternate channels, that we see significant growth for the U.S., so we remain optimistic. Rocco, if you wanna handle the rest of the world? Yes, I will start with Mexico, being Mexico important for us. Like many other companies, the volume has been soft, following very acute price increases. However, it is evolving positively quarter after quarter, so we expect soon to be growing again, okay? Modern trade is already growing robustly, and we have identified clearly what are those sales where we should be focusing, which is around some categories on the traditional channel and in the center of the country. And in those areas, this is where we are over-indexing our promotional programs and price pack architectural changes. In overall, we're seeing two things. One is a good trend recuperating in part because the fact that the last price increases made last year. One could claim that we were pushing the envelope a little bit much, so we're gonna have a positive comparison. On the other side, we're also experiencing some down trading to cheaper options inside our portfolio or with the competition and also private label. And we have recognized that in the last months, and we have started a three-leg program. The first one being to deliver superior quality, and we are obsessed with making sure that a high percentage of our net sales are done with clearly superior products. So this is something that it is an internal dynamic that is getting a lot of traction. 2, we're going into a increasing significantly the level of our innovation, and we have programs where we have ready replicas to roll out. And last but not least, we are pushing hard to become a lower cost producer, and in this sense, having a more neutral effect regardless where our volume is going. Mm-hmm. Okay, perfect. And then I have one just quick follow-up, I guess for Diego. Looking at the comprehensive financial cost during the quarter, that went up by a little over 31% to MXN 3.1 billion. If I look at it on a year-to-date basis, it's also up, like, 40% versus the same nine-month period last year. So going forward, how should we think about it? I mean, it explains some of the debt itself and the higher position and some of the higher rates on that. But is that a level we should now assume for a quarterly basis, or is there something we need to consider that's gonna bring that cost down on a quarterly basis from that three-ish billion level we've seen more recently? Y es, thanks. So the effect that we have been facing in the third quarter and the three quarters of 2023, basically on one hand, because of the increase in debt. As I mentioned, we have been, and you all know, we have been very aggressive in our capital expenditure program. We're expanding our production capacity here with new factories, new lines, line extensions, and investments are all over the place. On the second hand, we have also been successful in doing some strategic bolt-on acquisitions that have continually demanded additional resources. So these two factors have taken the company to an increase on the leverage. The second, I would say, is the accounting effect from the refinancing of the perpetual bonds. Since we called the bond, we recognized the amount of the perpetual bond as debt, but also the interest expenses related to these bonds were previously recognized on the equity line, and since that day, they have been hitting the P&L of the company. Of course, this effect will remain going forward, as we already did the refinancing strategy of these $500 million, mainly through the issuance of the local bond in Mexico, the two certificates with the facilities from MXN 15 billion. Also, considering this, I think that this year in particular, we will see an extraordinary increase because of these two factors of increased leverage plus the accounting effect of the perpetual bond. Lastly, the effect from higher interest rates. Now, the good news is that we have more than 70% of our debt with the fixed rate. Well, as you know, we have a very conservative and strong debt profile. We have a lot of bonds that were issued for 30 years. We have been moving a little bit also to a variable side, as we did with the issuance of the local bond, the MXN 3 billion are variable, TIIE plus 10 basis. We have some short-term financing also that are variable, and the revolving credit facility as well, that we have access. So this is also putting a little bit more pressure. But again, the main two components are leverage and the accounting effect. Now, the accounting effect, we will not have that difference for next year. And I mean, truth to tell, it's still early to give an indication on our expectations for 2024. But definitely, this year has been a little bit more intensive as any other year in terms of the demand of cash because of the combination of CapEx and acquisitions. Okay, perfect. Very clear. Thank you very much. The next question will come from Felipe Ucros with Scotiabank. Please go ahead. Great, thanks, operator. Good evening, Rafa and Mark. Thanks for the space. My first question is on North America, decoupling. You've had a string of very good results over the last few years, but it seems that the U.S. is decoupling a little bit from the other markets. Excellent quarter outside of the U.S., double-digit EBITDA and growth rates, in FX neutral terms, but obviously less strong in the U.S. Very often, other markets tend to follow the U.S. in these cycles. So I, I guess my questions, my question is, are you expecting some kind of deceleration in the other markets, or are you seeing any signs that the consumer is reaching a similar exhaustion point that we're seeing in the U.S.? Or is it really a tale of two markets as far as you can see in consumption trends? Rafa, do you want to address the link to other markets from the U.S.? Yes, and you start with the US, and I will ask Felipe to rephrase again. I had a problem with my connection. Apologies. But you can start, Mark. We will answer you, Felipe. So Felipe, obviously, what we're seeing in the U.S. in terms of consumer trends, we're seeing consumer confidence up a little bit, but it's still at historically low levels. And however, the consumers are trading down for this period of time, seeking value and more economic items. But that. We continue to invest in our premium products. As Rafa said, we're investing in absolute superior quality in the U.S. as a main dynamic. And so we're hoping that the consumers come back. We're beginning, as Rafa mentioned earlier, we're seeing some buoyancy in our breakfast items, and that gives us hope that this dynamic in the U.S. is starting to alleviate. But obviously, we've got to continue to watch it very dynamically. In terms of the link to other parts of the world, as U.S. being a trend, I'll let Rafa address that. Y es. What I would say is that what we see in most geographies is a temporary effect on consumers being more pricing, and therefore choosing more value for money propositions. And at the same time, we see an accelerated effect, but not in every geography and not with the same intensity and characteristics of, let's say, the hard discount evolution, right? And so, we are attacking both effects in a different way. As we mentioned before, on the temporary downgrading, we are working on price pack architecture. What we see, and Diego was mentioning at the beginning of the meeting, what we'regan nna be starting to see some relief of the pressure of the raw materials, and it is now our intention, intention to put money back in the market in order to make our products more temporarily attractive. On the other side, on this accelerated effect that I claim, again, it's not everywhere and not with the same intensity and characteristics, we are recognizing the evolution of hard discounters or private label push in some geographies, and our intention is to reach every consumer, in the end, building, building portfolio solutions for everybody. This is where, and I reiterate that, one of our main concerns or occupations, better, is to become a low-cost producer, so that making sure that it's gonna be a neutral effect regardless where our volume is going. So, a lot of activity internally in the company to take advantage and to be more, I would say, attractive, both in the temporary issues and in the more permanent ones. No, that's, that's very clear. Thanks, guys, for those comments. Maybe just a follow-up. It's, it's another quarter of very strong C-store and retail growth in Mexico, in those two channels. So just wondering if there's any particular micro drivers behind that? Or if this is just macro, the consumer in Mexico doing well. I would say that our salespeople are doing an excellent job in nurturing and developing the channel, both in making amendments, positive amendments in our go-to-market, making it more easy and more profitable for both us and the customer. And also, we are pushing certain categories that convenience stores are very eager to invest on. So it is a combination of sales savvy, go-to-market adjustments, and picking up the right categories to push. But yeah, we are very happy with the job done by our sales associates in this channel. We are over-indexing. At least in this period of time that we are referring. We're doing it slightly better, obviously. Great. That's exactly what I was looking for. Awesome. Thanks a lot for the comments, guys. The next question will come from Álvaro García with BTG. Please go ahead. Mr. García, possibly your audio is muted. Sorry about that. I was muted. Good evening, good evening, gentlemen. Thanks for the space for questions. Two questions. What, t he first one's for Mark, on Takis, on the penetration in the U.S. You know, where are we sort of in the story of, of, you know, increased penetration across channels? I feel like there's a lot of room to be had there, and I'd love to hear your latest thoughts on, on, on that. And then, another one, very similar to what Felipe just asked on, on sort of your channel mix in Mexico, but sort of focusing on the traditional channel. You mentioned it's an area of opportunity, particularly in the center of the country, and we noticed Pepsi's numbers were quite weak as well, mid-single-digit volume decline. Is there, is there something going on in the traditional channel? Why do you think we've seen a little bit more of a lag in the traditional channel profile relative to modern trade? Thank you very much. Yep. Álvaro, just, you cut out a little bit on your first question. Was the question regarding Takis in the U.S.? It was about sort of where we are in the evolution of greater penetration across specific channels. You know, Yeah. So, you're exactly right. We continue to make investments in alternate channels, and we believe that the expansion of our portfolio plays well in the C-store environment and in the all channel. So we are actively investing, and you'll continue to see us in automation, in price pack architecture, so that we can penetrate those channels more completely and have a much higher penetration rate. So your question is absolutely right on target and definitely an area of focus for us. And regarding Mexico, softer evolution of volume in those sales that I was referring, mainly more on the center of the US, either US and Mexico, excuse me, the traditional channel and sweet goods. The reaction is typically lower when you want to revamp volume in traditional. You have other tools in order to ignite excitement in modern trade. That is one of the reasons. We're seeing a better evolution on those sales lately. The weather didn't help either, so it was an unseasonable rainy season that affected sweet baked goods, immediate consumption, and sweet baked goods in medium consumption is done in the traditional channel, all over Mexico, but also in the central. And we have noticed that there was less money in the market, especially in the center, okay? But we are addressing those issues. We are trending better, we are developing price pack architecture in sweet baked goods. The weather is being better now for our sales purposes, so I would say that it is a temporary effect. Okay? Great. I think there's also a macroeconomic effect that we're seeing with the appreciation of the Mexican peso and euro, which is better than me. All these remittances, which is a very important driver for consumption in the country. Absolutely. It being less Mexican pesos, although it has continued to grow, I mean, every month and every quarter, in peso terms, it has had a negative effect. And I think that this is also putting some additional pressure at that level of the socioeconomic level that is more dependent on remittances. Yeah, that's a good point. Thank you very much for the call. Absolutely. Absolutely. Yeah, good point. Definitely. The next question will come from Alan Alanis with Santander. Please go ahead. Thank you, and thanks for taking my question. Couple of questions, one regarding costs and the other regarding going back to salty snacks and Takis. Regarding costs, we're seeing the sugar prices at a 10-year high. I mean, it's over 40%, higher year to date, sugar prices. What, what's the impact that we should expect on this? I know that other commodity prices are not seeing as much increases, but what's the impact that we should see in the United States, in North America, from this surge in sugar prices? That would be the first question. And then the question regarding salty snacks, the way I wanna frame it is, you've been extremely successful with Takis. How big is Takis, and what are the chances that you can develop other brands and other salty snacks that you have in Mexico, in the United States of that magnitude and of that success? Thank you. Yes, Rafael, if you prefer, I can take the first one regarding cost of the impact from sugar. You're right, Alan. Mm-hmm. Yep. As you mentioned, we're seeing record high prices for sugar. In the last 12 months, we have seen an increase of over 50%. Mm-hmm O f sugar. Now, first let me tell you, overall, we feel positive, as I mentioned, in terms of the commodity costs that we will pay, not only in the fourth quarter, but in the coming quarter. Okay. As we will start to see, the decline on many of the commodities, being the wheat, the most relevant one in our portfolio, we're finally starting to see the decline in prices because of the hedging strategy that we have in place. That is going to secure, and that's what I mentioned, that, we feel very optimistic about the margin expansion in the, in the fourth quarter. We're finally going to start to see some deflation. Even not everything is positive, yet sugar, has been increasing. We will have an impact directly in sugar, next year. Unfortunately- Mm-hmm W e cannot disclose the specifics, by every commodity or raw material. Mm-hmm. What I can tell you to give you the right perspective is that sugar is less than 3% of our total cost of sales. So in other words- Very small. Well, it's not as big as some other commodities, as in the case of wheat, of course. But when we started to see the same effect a year and a half ago, then we suffer, and we have to weather the many quarters of a very high impact inflation effect on our P&L. Got it. That's very clear. No, no, that's very, very clear, and the reiteration of margin in the coming quarter is. That's very useful. Okay. Thank you. Thank you, Diego. Maybe I can take the other one. The salty snacks definitely is one of our categories that is doing positive over the years. Mm-hmm. Very small player, though, and definitely in some of the, let's say, mature salty snack markets for us, such as Latin Centro, for example, we have already started to complete the portfolio, taking advantage of the Mexican portfolio that could resonate more with the local consumer. Yes, definitely we're doing that. Got it. But what's the relevance, I mean, any order of magnitude or any scale of stock in the United States, or any quantification of how much contributes to the U.S. business growth? Is it material, not material? Alan, unfortunately, we do not disclose that specific information. Okay, no worries. Thank you so much. Congrats on the results. Thank you. The next question will come from Lucas Ferreira with JP Morgan. Please go ahead. Hello, everyone. I have two follow-ups, the first one on the comments you made about the growth of private label, of consumers downtrading, and also this view on the commodity prices going forward. The question is, if you see risks of promotional activity picking up and eventually some price rollbacks, and I know it's not common, especially in the U.S., but if in any specific category, you see a bigger risk of that happening? And also, you know, Mexico and other regions, if you see something similar. And another follow-up is about your capital allocation. So you guys have been very active in, especially buybacks, so the debt appetite remains in place with the shared level they are, and considering your priorities for capital allocation. Thank you. Yes, Rafael, if you want to, I can take the first one. Well, let me go back a little bit to 2022, because we need to have the right context of where we are standing. As probably you remember, 2022 was a very strong year in terms of top line growth, both in volumes and even more because of price increase. So we needed to increase prices as we were facing a huge inflation effect from main raw materials, and as I mentioned minutes ago, particularly from wheat. Now, if you see the numbers of 2022, you have to understand that having the price increases that we had, and we volume increases, we productivity initiatives, and we lost 50 basis points on our EBITDA margin on 2022. So that can tell you a lot in the magnitude of the inflation impact that we had during that year. Now, during 2023, for the first quarters of the year, we still have a huge effect from the previous price increases. As every quarter has been passing through, the carryover effect, it's lower. So we're pricing these price increases. Just to give you an example, in North America, the last round of price increases happened in October of 2022. So we're gonna still have some positive impact from the last year price increases, but only the last round. So this year, because of what we did on the pricing architecture and on the planning of 2022, we didn't saw the need to continue to increase price. Because of the hedges that we have in place, as we provide visibility to the operations of the company, through this strategy, we knew that we were gonna start to have some tailwind effects in the fourth quarter. And if you remember, when I provided the guidance for the full year 2023, I did mention that the second half of the year, and particularly the fourth quarter, we will start to see some deflation effects. Now, what I want to tell you overall is that even though we're starting to see commodities at a lower cost, this doesn't mean that we have lower costs than previously to 2022. So 2023 is gonna be a year in which we, if we do not recover 100% of what we lost on margins in 2022, we're gonna be very close to recover this. Now, again, remember that an important component of this, margin increase has a CapEx behind. There are a lot of productivity efforts that will put in capital in order to achieve that additional profitability, and we need to see the payback for that. So what I want to tell you is that even though we're positive in terms of commodities, it's not that we have space to think on being aggressive on promotions or even thinking on lowering our prices. Yep, and I can comment on that. I would say that we are ready to be more attractive and more visible and more accessible, but this is done through price pack architecture, putting back money into the market, promoting more innovations, replicating what we have in the market, and other markets. And basically being more active in trade spend, but more on permanent exhibitions rather than highs and lows. So it's, again, more attractive, more visible, more accessible. Okay? Excellent. Thank you very much. This concludes our question and answer session. At this time, I would like to turn the floor back over to Mr. Diego Gaxiola for any closing remarks. Please go ahead, sir. Yes. Thank you all for your time today. Please do not hesitate to contact us with any further comments or questions that you might have. Thank you. Thank you. This concludes today's presentation. You may now disconnect your line at this time, and have a good day.