Greetings, welcome to Q1 2023 conference call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Antonio Chedraui, Grupo Chedraui CEO. Thank you. You may begin. Good morning. It is a pleasure to be with you today to discuss Grupo Chedraui's results for the first quarter of 2023. We started the fiscal year with positive results in both Mexico and the U.S. In Mexico, we saw solid sales growth and market share gains, which was driven by our continued focus on delivering exceptional value and convenience to our customers. Our multi-format strategy has enabled us to meet the diverse needs of our customers and capture opportunities in different segments of the market. Meanwhile, in the U.S., we made significant progress in profitability through the integration of the banners and our operational rigor. Overall, we are very pleased with our first quarter results, and we remain confident in our proven ability to deliver sustainable growth and value for our stakeholders. If you allow me, we will review the results for the first quarter of 2023, starting with the relevant events of the period, continuing with the performance of each region, and ending with a review of the financial figures. Please go to slide number four. In Mexico, we're pleased to report strong performance in the first quarter of 2023, with same-store sales growing by an impressive 12.2%, which is well above ANTAD growth of 9% for the period. From a geographic standpoint, we saw solid growth across all regions, and particularly strong results in the south and southeast of Mexico. Our strategy has enabled us to meet the diverse needs of our customers in different regions and capture opportunities in different segments of the market. Additionally, we expanded EBITDA margin by 30 basis points, resulting in an overall EBITDA increase of 24.3% year-over-year. This result shows our commitment to operational efficiency, which allows us to leverage our existing cost structure while delivering value to our customers. Overall, the operation in the quarter continued the success seen in fiscal year 2022. Please go to the next slide. Turning to our performance in the U.S., we're pleased to report solid growth and profitability in Q1 of 2023. Same-store sales growth of 7.9% was fueled by the performance of our Hispanic division, which continues to be a key growth driver. We're particularly pleased to see growth not only in the average ticket, but also in customer count, indicating that our value proposition and shopping experience continue to resonate with our customers. On the profitability side, we made significant improvements, expanding EBITDA margin by 73 basis points, increasing from 7.3% - 8.1% in this period, resulting in an overall expansion in MXN of 6.8% year-over-year. The integration of Smart & Final with our Hispanic division is driving operational efficiencies and further enhancing our ability to execute in this market. Please turn to slide six. Moving on to our consolidated results, we're pleased to report solid performance in the first quarter of 2023, with strong sales growth in both Mexico and the U.S. Despite a 9.9% impact in Chedraui USA figures due to fluctuations in the exchange rate, our consolidated sales grew by 6.1% in MXN. Excluding this exchange rate impact, consolidated sales grew 12.5%. On the profitability side, we're pleased to report that our focus on operational excellence and cost managing is yielding results. Due to the EBITDA margin expansion in both operations, our consolidated EBITDA margin expanded by 58 basis points in the quarter, above the target we set for the year. Overall, EBITDA increased by 14%, reflecting the continued strength of our business model. Turning to our consolidated net income and leverage information on page seven. We're pleased to report strong results in both areas. Our net income grew 46.3% in the first quarter of the year behind the solid organic results in Mexico and the U.S. On the leverage side, we're also pleased to report that we made significant progress in improving our balance sheet metrics. We lowered our net debt to EBITDA ratio from 0.72 x last year to just 0.18 x by the end of Q1 2023, reflecting our focus on disciplined capital allocation and our commitment to maintaining a strong financial position. We will continue with the results by region. Please turn to slide eight. Our operation in Mexico delivered a strong performance in Q1 of the year. As highlighted, we achieved same-store sales growth of 12.2%, well above the market pace for the same period. Total sales grew by 19.7% to MXN 28,795 million, driven by the integration of the Arteli operation and the stores we opened in the last 12 months. In the beginning of the year, we continued to see resilient consumption from our customers, which reflects the ongoing appeal of our commercial offering and our ability to adapt to changing consumer needs. While we continue to see faster growth in the South and the Southeast, we are proud to report that in almost all regions where we operate, we outperformed our competitors. In this quarter, we opened five new Supercito stores and we're in line with our objective of opening 60 new stores in 2023 and achieving 3.6% sales floor growth by year-end. These investments reflect our commitment to driving growth and capturing market share in key regions of the country. Please go to the next slide. We're pleased with the strong financial performance in our Mexican operation, which delivered a 24.3% increase in EBITDA to MXN 2,362 million for the quarter. This result was driven by a combination of factors, which mainly due to the integration of Arteli and operating leverage. We also continued to focus in improving operational efficiency and cost management, as evidenced by the 30 basis point EBITDA margin expansion, which exceeded our annual target. Our real estate division also showed a solid performance in the quarter, with revenue increasing 12.6% year-on-year to MXN 312 million. This growth reflects the continued recovery of the post-pandemic market. Additionally, we saw a 12.4% increase in EBITDA, demonstrating our ability to capture opportunities and create value in the real estate sector. Carlos will comment on the performance of Chedraui USA. Carlos, please go ahead. Thank you, Antonio. Please turn to slide 10. The Chedraui USA operation continued to perform well in the first quarter, with same-store sales growing 7.9% in dollar terms, with particularly strong performance at the Hispanic division. Both Smart & Final and the Hispanic division achieved growth in average ticket and customer traffic, a testament to our value-focused banners. The impact of a large currency fluctuation on the exchange rate weighed heavily on the first quarter, resulting in a 2.9% decrease in sales in peso terms. Regarding capital investment in the U.S., we continue our growth trajectory by planning to open four new stores in 2023, as we strongly believe there's significant growth opportunity in the states in which we already have a presence. Please go to slide 11. The Chedraui USA operation delivered strong EBITDA performance in the quarter, with a 6.8% increase in pesos to MXN 2,851 million. This was driven by the operating leverage from the solid sales growth as well as cost efficiencies and synergies captured from the integration of our banners. As a result, we achieved a 73 basis point margin expansion to 8.1% of our sales. Beginning this quarter, we will aggregate the EBITDA results of El Super and Fiesta under the Hispanic division for reporting purposes. This division achieved an impressive 89 basis point expansion in EBITDA margin, reaching 8.6% due to improvements in Fiesta's gross margin and operating leverage at El Super. Smart & Final also continued to capture synergies from the integration, contributing to the overall profitability of Chedraui USA. We remain committed to driving profitable growth and delivering value to our customers in the U.S. and to further expanding our presence in this important market through these successful banners. Just as in Mexico, the operation in the U.S. started the year strong and on track to achieve our targets. That concludes our report for the U.S. operation. Thank you. Thank you, Carlos. We turn to the consolidated financial results on slide 12. In the first quarter of the year, we recorded consolidated sales of MXN 64,427 million. Equivalent to growth of 6.1% year-over-year. Excluding the exchange rate impact, we achieved 12.5% sales growth. Gross profit increased 9.1% with a 64 basis point expansion in gross margin, while operating expenses only increased 5.5%. Due to this, consolidated EBITDA grew 14% to MXN 5,412 million and represented 8.4% of sales. During the quarter, financial expenses decreased 5.1% to MXN 1,190 million, behind lower debt in the period and the interest earned from a favorable cash position in Mexico. Moving on to the consolidated net income for the quarter, the result increased 46.3% versus the prior comparative period, reaching an amount of MXN 1,602 million and representing 2.5% of sales. Please move to slide 13. The financial leverage decreased from 0.72 x in the first quarter of 2022 to 0.18 times in this quarter. This highlights the company's ability to generate free cash flow and is particularly impressive considering the acquisition of Arteli in Mexico, which closed in December. The year-to-date CapEx invested amounted to MXN 1,435 million, which is equivalent to 2.2% of sales. On slide 14, you can see the breakdown of the debt at the end of the period. The company recorded net debt of MXN 3,869 million. All debt is in U.S. dollars and is primarily associated with the acquisition of Smart & Final in 2021. Now, if you allow me, we will move on to the question-and-answer section. Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time. One moment while we poll for our first question. Our first question comes from Ben Theurer with Barclays. Please proceed. Good morning, and congrats on the very strong results for the first quarter. Two quick ones. First, on the same-store sales performance, both in the U.S. as well as in Mexico. You've talked a little bit about it on that there was ticket growth, but if you could give us a little bit of an indication as to the degree of ticket versus traffic growth in the two regions, just to better understand the dynamics as it relates to volume versus pricing. That would be my first question? Hi, good morning. Well, in Mexico, the numbers were, 3%, ticket growth and, transactions which we, consider, customers, were 8%. The combination, gave us the growth in the Mexican region. Carlos, maybe you want to comment, USA. Yeah, in the U.S. operation, we experienced customer count growth close to 8% and a little bit of disparity in average ticket growth on by banner basis. You know, we were up 2%, 4%, depending on the banner. Okay, perfect. On your capital allocation, you've closed out the call with that, obviously, the leverage very low, under 0.2 x, despite M&A you've been doing. Could you help us maybe understand a little bit the priorities, how you're gonna set them currently as it relates to the capital use of the free cash flow? Is it take completely down the leverage? Are there opportunities of M&A? How should we think about maybe dividends? What's like the kind of priorities you would set as of today, given the strength of the balance sheet? Thank you for your question again. Well, in this order, first of all, we will consider organic growth opportunities as well as maintenance and technology, where we plan to invest 2.8% of our total sales. The second would be consolidation opportunities. We believe that there will be in both countries, Mexico as well as in the U.S. The third possibility would be to deleverage. Those would be what we're thinking of in order of importance. We're focused on these three. I don't know if this answers your question, Ben. Yep, it does. Thank you very much. Thank you. Our next question comes from Bob Ford with Bank of America. Please proceed. Thank you. Congratulations on the quarter, and thanks for taking my question. Antonio, you mentioned outperformance in all regions in Mexico. I was just curious, what do you attribute that to, and how are you thinking about value propositions in the competitive environment? Thank you, Bob. Good morning again. Well, it's very clear that first of all, our growth has been very important in the south and southeast where we have a big presence. As we explained, we are growing in all regions in Mexico. The gap has started to close. That means that central Mexico, metropolitan region, northeast, northwest, have been now growing closer to what we have been experiencing in the south and southeast. I think that the customer is valuing a lot our particular format strategy, where the Supercito has been growing really strong as a proximity format that has been valued by the customer. The other one would be the Selecto, where we think we have been able, together with Comercial Mexicana, service very well the high-end consumer. On the typical Chedraui stores, we just have been focusing in being more efficient in our pricing strategy. I think that just focusing on the customer in every region with the formats that we have available, have been able to succeed and gain market share. That's what we believe, Bob. That makes a lot of sense. Can you discuss a little bit just the progress on the integration of Arteli in terms of central administrative functions, systems, logistics, those types of things? Well, in Arteli, we have been integrated Arteli really well. We still have not seen all the potential synergies that we have put in place, because first we wanted to make sure that we continue doing right what they were doing, which is the assortment, the pricing strategy that we're focused to sustaining this. Now we are starting to see the potential benefits first on the cost of the items that we sell in Arteli, because there's a quite big cost difference, what we have in Chedraui compared to what we have in Arteli. The second step would be the integration of the administrative functions, which will happen at the end of the second quarter. We see a lot of opportunities, but Arteli is doing really, really well. Arteli was able to grow same-store sales, even higher in that region than what we did with our own original stores. We are very happy with the Arteli results. That sounds very good. Congratulations again, and thank you very much. Thank you, Bob. Our next question comes from Luis Willard with GBM. Please proceed. Hi, Antonio, Carlos, and team. Thanks for taking my question. Once again, congratulations on the strong results. Antonio, I mean, we've talked about this in the past several occasions, but I wanted to go a bit deeper on the strategy that you have for the Supercitos, both the regular format and now the high-end ones. How big do you think this format can be, and especially on the high end? It seems that they're doing very well. Do you plan to accelerate this line of, or this format going forward? Thank you. Thank you for your question, Luis. Well, we have experienced a great success on the Supercitos. In the beginning, we were targeting a sales per store of MXN 1.5 million. Now we are way higher than that. We're 30% higher, with very important returns on invested capital, both in the typical Supercito as well as in the high-end Supercitos. We plan this year to open 50 Supercitos, which we for sure we will achieve this number, and expand faster. We've been talking with our Area of expansion that we should focus on these formats, not only in Mexico City but in Veracruz, in Jalapa, and Toluca, and Puebla. We believe that there is huge opportunities to expand faster, because of the success that we are experiencing, not only in gaining customers and sales but also on the return of invested capital side. All right. Thank you, Pedro. Thanks a lot. If I may have just a quick follow-up. Regarding Mexico's gross margin, it's been some part now, you've been gaining efficiencies there and reducing shrinkage, and all that. Just wanted to touch base on what are your thoughts on further improving gross margin in Mexico the rest of the year. Thanks. I think that we still see opportunities, not only on the gross margin but on the EBITDA margin completely. Because first, we have less old inventory at our stores. We work every month strongly on this side. This allows us to take less markdowns that allow us to use these not only to sustain our pricing strategy but to gain gross margin. Being able to grow same-store sales faster than expenses has been allowing us to gain EBITDA margin. I think this will continue. We have seen that we have been able to do this for the past 24 months, and we believe that that will continue for the, at least for the coming months of the year. yes, we plan not only to meet the EBITDA margin expansion that we projected in the beginning of the year, of 10 - 15 basis points, even, you know, even higher. As, as we showed, just in this quarter, we were able to expand, 30 basis points. Thank you, Pedro, for the light. Thanks. Thank you, Luis. Thank you. Once again, to ask a question, please press star one on your telephone keypad. Our next question comes from Rodrigo Alcantara with UBS. Please proceed. Hi, thanks for taking my question. I have just two quick ones. First, one kind of like a follow-up on Bob's question on why are you doing to it because the consumer was clear that the answer you provide just is curious. I mean, you know, the last few quarters you have surprised us very positively on the market and your strongest competitor, right? This situation was not, you know, kind of not the opposite, but not the same, right? A couple of years ago, some sources about slightly below or the market or not as good as it is right now, right? Just curious if you can, I mean, what are you doing different now versus two years ago that it's allowing you to, you know, revert that scenario, right? To grow above the market, if you can answer that in that context. The other question would be just to clarify on the Arteli integration. If you can remind us how many stores are you planning to convert into the Chedraui format this year, if you can help us about that. Lastly, on Smart & Final in Mexico, if you have any updates about, you know, when are you planning to accelerate openings on this format in Mexico? Those would be my three questions. Thank you. Thank you for your questions, Rodrigo. Well, first, I believe that in Mexico as well as in the U.S., we have been able to focus and specialize more on the formats. Now, to give you an example, in Mexico, we have a manager for each format that has been able to focus more on the assortment and the promotional activity of each of the formats. While we still have a centralized buying, this capability that we added to the company has been allowing us to specialize and to focus more than what we used to do in the past. We believe that this is what is producing better results, focus on the customer, focus on the format, focus on each of the regions where we participate. About the Arteli stores, the 36 stores that we bought. Actually, we have already integrated them into the formats that we operate in our own company in Chedraui. The only thing that we still have different is two things. One is the name where we keep the Arteli and name, and we believe that we will hold on to that name at least for the rest of the year because we have been seeing that it works, and it works really well. We're happy with the results of Arteli. We will decide when to change those names, if needed. It's a decision that we have not taken, but these stores have been already conceptually integrated into the formats of Chedraui. About Smart & Final Mexico, we have partners there, the Jimenez family. Before expanding faster into other regions of Mexico, we have to come to agreement with the family, which we have not yet done at this particular moment. At this particular moment, we are concentrated in the northwest on the 17 stores, and probably in the coming months, probably open 1 more store together with the Jimenez family. Until we do not reach an agreement with them, we're not prepared to expand faster to other regions of Mexico where we see really big opportunities. I don't know if this answers your question. Yeah, no, that was perfect. Thank you very much, Antonio. Thank you. Once again, ladies and gentlemen, to ask a question, please press star one on your telephone keypad. Once again, ladies and gentlemen, that's star one to ask a question at this time. At this time, there are no further questions. I would like to turn the call back to management for closing comments. Well, I just wanna thank everyone for joining this conference, and I hope to be talking to you in July again with our second quarter results. That for what we have seen in this April, look as good as the first quarter. Thank you, everyone, and hope to be talking to you soon. Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.