Hello, and welcome to FEMSA's First Quarter 2024 Results Conference Call. My name is Melissa, and I will be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I'll now turn the call over to Mr. Juan Fonseca, Head of Investor Relations. Please go ahead. Good morning, everyone, and welcome to FEMSA's First Quarter 2024 Results Conference Call. Today, we are joined by José Antonio Fernández Garza Lagüera, CEO of our Proximity and Health division, Martín Arias, our incoming CFO, and Jorge Collazo, who heads Coca-Cola FEMSA's Investor Relations team. As you know, one of FEMSA's strategic priorities involves engaging more directly and proactively with our key stakeholders, and that includes providing more opportunities for you, our investors and analysts, to hear from and interact with the heads of our core business verticals. You already have that possibility with Ian Craig, given the public nature of Coke FEMSA, and we will increasingly work to provide broader access to José and Juan Carlos Guillermety in their roles as heads of the other two core operations, Proximity and Health and Digital, respectively. Therefore, as a first step, the plan is for José to open today's conversation with a vision for Proximity and Health, and the key elements of the strategy to move towards that vision. Going forward, José will hold two quarterly calls a year. At a later date, we also plan for Juan Carlos to present his vision for the digital business, with the expectation that he will also join our calls once or twice a year. After José's remarks, Martín will provide an update on the business and our quarterly results. Finally, finally, we will open the call for your questions. José, please go ahead. Thank you, Juan. Good morning, everyone. It is my great pleasure and privilege to be able to be here today to begin what I hope will be regular conversations with all of you. As we move beyond the FEMSA Forward transformation and focus on the future of our company, I relish the chance to help pursue and capture the substantial opportunity for growth and value creation that lie ahead, particularly as we continue to develop and strengthen our leadership in proximity and health retail. As many of you know from following us for many years, FEMSA has always had the pursuit of long-term, profitable growth hardwired into everything we do, and we have a clear and focused blueprint to keep achieving that objective as we build on FEMSA's successful track record in proximity retail. The comprehensive long-range plan that we were developed during the past couple of years provide us with a useful roadmap. We aim to accelerate earnings growth at our retail division, relying mainly on organic expansion and on continuously adding layers of value for our consumers across formats and across markets. As you all know, OXXO Mexico is a mainstay of FEMSA's retail operations. For the past 45 years, we have been evolving and improving its value proposition while expanding its footprint and growing its scale, always focused on understanding more of our customers' needs and finding new ways to serve them consistently better. As OXXO's store economics have improved over time, we have been able to increase our footprint in Mexico to the current level of more than percent stores, while maintaining and even increasing store productivity. We have built capabilities to develop consumer insights that, in turn, are continuously applied in our segmentation efforts, and we are confident that we can keep the current pace of OXXO expansion in Mexico for many years under the current value proposition. In the process, we believe we have become more effective retailers, and this is now allowing us to find promising opportunities beyond the core OXXO Mexico format. As you know, we are thoughtfully accelerating our organic expansion efforts with OXXO in several markets in South America, having already reached the 500 store mark in Brazil and soon in Colombia. We believe OXXO in South America could, on a combined basis, reach a scale comparable to OXXO Mexico over time. Moving on to other different formats, we are taking advantage of the Mexican consumer increasing appetite for the proximity discount format with our Bara store. After many iterations and years of fine-tuning its value proposition, Bara is showing that it has the right unit economics and is ready for an accelerated rollout. We are also ramping up the development and deployment of other promising adjacent proximity formats, such as coffee drive-throughs with our joint venture. Beyond Latin America, we also continue to advance with the Bara platform in Europe, where despite high inflation last year and general macro headwinds, we are building on improving momentum and focusing on driving all three business platforms: our retail, food service, and our B2B business. While we will pursue and capture these opportunities mainly through organic expansion, we believe entering the United States could open a new and compelling avenue for growth, value creation for FEMSA, leveraging our capabilities, our closeness to the U.S. market, and a broad recognition of the OXXO brand among key demographics.... This initiative may require a moderately sized inorganic component to achieve certain scale up front, focus on border or near-border states, and on assets with certain characteristics that would serve as a launching pad for an OXXO U.S. value proposition, among other possibilities. We still have work to do as we fine-tune our potential entry model, always with a clear objective of long-term value creation for FEMSA. However, we know this topic is top of mind for the market, so we will keep you posted as we continue to develop our strategy. Beyond the various opportunities across the proximity spectrum, we also continue to make progress in our health operations, where we are increasingly being able to leverage our multi-country platform and scale to optimize purchasing, pricing, supply chain, and several other aspects of the business. However, we continue to operate in distinct, diversified, and sometimes challenging macro operating and commercial environments, something we're quite familiar with in our neck of the woods. In certain markets, our Health division is currently navigating complex, competitive, and regulatory environments. But in every case, we're taking clear steps to address the challenges by adjusting and evolving our operating approach. To put all our retail opportunities into perspective, I can share with you that today, if we consider all formats and all markets, we're opening more than 6 stores per calendar day or a new store every 4 hours on average. By the end of the 5-year period covered by our current long-range plan, to the extent that we have further proven and improved the economics of our various formats in various countries, we could eventually increase that pace by up to 50%. These plans are certainly ambitious, and while ultimately dependent on improving the economics of certain formats in certain countries, we believe they are achievable. On the topic of growth and investment, I would like to highlight a couple of points. First, although these plans will require considerable CapEx in the coming years, the organic and modular growth inherent in our business model puts us in a good position to capture high returns. Second, these investment plans are reviewed rigorously on an annual basis, thus, as we advance on each one of these organic growth initiatives, we may find that some opportunities become more compelling over time and some fall short of expectations, and we will adjust our CapEx accordingly. Therefore, I have asked our team to relentlessly focus on unit economics, cash flow generation, and achieving ROIC levels above our cost of capital to drive and guide our growth decisions. Finally, we should talk about the digital opportunities that exist in and around our retail platforms and which complement and expand the opportunities being developed by our Digital division. As you know, I had the chance to take a short break from our proximity business to help launch FEMSA's digital efforts a few years ago, and it is very rewarding to see how the Spin ecosystem continues to thrive and develop by leaps and bounds, always leveraging the physical store network, multiplicities for our customers, our suppliers, our partners, and ultimately, our company. To take one example, less than three years after launching the Spin Premia loyalty platform, already more than a third of OXXO Mexico's revenues are associated with the program. Meaning that on average, we have access to more than 4 million tickets every day that allow us to begin building compelling and valuable data sets. As we get closer to the point where we can begin moving from a pure customer acquisition mode into more of a monetization phase, we are developing new data-driven initiatives. For example, OXXO has proactively invested in using AI to capitalize on the breadth and depth of this data. The density of our store network and the frequency of customer visits provide us with a unique perspective of Mexican consumer behaviors and trends. Over the last year, OXXO has materially evolved its algorithms, IT systems, and data science capabilities to offer better and more effective assortment, pricing, and promotions, and to efficiently staff each store according to its unique transaction patterns. These AI-driven improvements are being rolled out across our store network in Mexico, resulting in measurable increases in profitability, as well as improved customer satisfaction. Summing up, we have our work cut out for us. We will drive our top line by increasingly expanding our store base and satisfying with excellence the need, the needs of our customers. We will drive our bottom line by constantly seeking efficiency and effectiveness as we evolve our operating model, and we will carefully pursue acquisitions where appropriate to increase our scale and drive the virtuous circle that flows from it. We will keep you appraised of our progress, and we will also drill down on some of the opportunities discussed today, not only in future calls like this one, but through a more proactive stance where we generate recurring dialogue with the investment community. We are excited about the opportunities ahead and the clear path we're taking to capture them. I am fortunate to be surrounded by the best team in the business and to be part of an organization bound together by a strong and unique culture of collaboration and permanent cross-learning. I look forward to continuing our discussions with you going forward, and I will now turn the call over to Martin to talk about FEMSA's first quarter results. ... Thank you, José, and good morning, everyone. I'm happy to be with you today to talk about this remarkable company that I have had the pleasure of calling home in one capacity or another for 25 years. As José just described, this is an exciting time to be a part of this team as we pursue compelling and unique opportunities at every one of our three core business verticals. The first message I want you to take from me is this: the mandate I have received from our CEO and board of directors is to continue executing the capital allocation strategy that was announced as part of FEMSA Forward, steering the finances of the company towards the leverage goal of 2x net debt to EBITDA, excluding Coca-Cola FEMSA, which we expect to reach by the end of 2026. As of the end of the first quarter, that ratio stood at 0.24 times, compared to 0.1 times at the end of 2023. To meet this mandate, our CEO has asked me to focus on disciplined, organic and inorganic capital deployment, as well as to continue to monitor additional opportunities to return capital to shareholders. Prior to reviewing our quarterly results, I would like to provide you with an update on the FEMSA Forward initiatives relating to returning capital to shareholders, some thoughts on capital deployment generally. As you know, we have been active on the share buyback front, and during the first quarter, we launched an accelerated share repurchase or ASR program through a financial intermediary. Through that program, we are buying back $400 million worth of FEMSA shares. Before the ASR was launched, we had also bought back approximately 73 million shares in the quarter. In addition, earlier in the year, we received shareholder approval to pay an extraordinary dividend of approximately $600 million during this year, the first installment of which was paid last week on April 18. This means we are in the process of returning nearly $1.1 billion to shareholders during 2024, in addition to our ordinary dividend, which was itself increased by 20%, representing a total of approximately $800 million at current exchange rates. To the deployment of CapEx, which is also a main component of our allocation strategy, we seek to prioritize its allocation towards core organic growth initiatives that offer the highest potential for long-term value creation. In the first quarter, our CapEx reached MXN 7.4 billion, representing 5.3% of total revenue and 45.1% growth over the comparable period of last year, reflecting in part the accelerated expansion at Proximity, as well as increased investments in production and distribution capacity at Coke. Through these organic investments, we aim to enhance our competitive position and maximize returns for our shareholders while preserving a strong financial foundation. In the event that these organic investments are not producing the expected returns, we reassure you that we will reevaluate the levels of CapEx. Let's turn now to FEMSA's consolidated quarterly results. Total revenues increased 11.3%, and EBITDA rose 14.4% compared to the first quarter of 2023, reflecting strong growth at Proximity and Coca-Cola FEMSA. Net consolidated income decreased 88.3% to MXN 5.9 billion, mainly explained by a challenging comparative base in the first quarter of 2023, which included a gain of MXN 40.6 billion from the reclassification of investment in Heineken to discontinued operations, and also reflects an increase in the net financial expenses line, reflecting a one-time gain from the repurchase of our debt in the first quarter of 2023. Excluding these effects, net consolidated income would have remained flat year-over-year. Moving on to discuss the results of our operations. Proximity Americas delivered quite a strong set of numbers in the first quarter. The year-over-year growth was solid, but it looks even better when we consider the tough comparison base they faced after a banner quarter in 2023. OXXO same-store sales increased 9.7% in the first quarter, driven by an increase of 7.3% in the average customer ticket and 2.2% growth in traffic. Certainly, we had the small advantage of an extra day in February, as well as the full impact of Holy Week that tends to help the average ticket, but these are strong numbers nonetheless. This growth reflects multiple initiatives implemented relating to revenue management, as well as the results of our loyalty program that are driving increased visits and purchases by our most loyal customers. Gross margins expanded 170 basis points to reach 42%, the highest ever for a first quarter, which is normally the weakest of the year, reflecting strong trends in commercial income, a positive contribution from financial services, our growing revenue management initiatives, and strong performance from gathering-related categories such as soft drinks, beer, and snacks. Income from operations increased 11.5%, while the operating margin contracted 20 basis points to 7.1%, reflecting higher labor expenses and faster store growth across markets, including those in Latin, that are still dilutive to margins as they ramp up their scale, obviously all mitigated by effective expense containment. On the store expansion front, OXXO also posted strong numbers, adding 495 net new stores during the quarter, which includes 356 Mexico and 139 stores in South America... This figure for South America incorporates 71 openings by Grupo Nós Brazil, where OXXO has already surpassed the 500 store mark. Historically, the first quarter has been laggard in terms of store expansion, catching up during the second half. This year, the Proximity team did a great job of making sure that we hit the ground running, as compared to the expansion of 254 stores in the first quarter of 2023. Moving on to Proximity Europe. Total revenues grew 12.6% in local currency, translating to an 8.2% increase in pesos. This growth was driven by strong performance of the Swiss convenience business and good momentum in the B2B pretzel business, partially offset by lower demand in transportation hub stores affected by extended labor strikes in Germany. Gross profit grew 11% in pesos, while gross margin expanded by 100 basis points to reach 43.2%. At the operating income line, Valora posted extraordinary growth, but we note that the B2B business had an outsized contribution to gains in the quarter's profitability, at growth rates that would not necessarily be replicable going forward. Shifting focus to the health division, and following up on José's comments a few minutes ago on the challenges we currently face, total revenues contracted slightly by 2.3%, and same store sales remained flat in Mexican pesos. This was driven by an ongoing disruption within the institutional business in Colombia, and a challenging competitive environment in Mexico, as well as a tough comparison in Chile. These disappointing trends in the pipeline translated into weak operating results for the quarter, as operating income fell 40% in pesos, and operating margins contracted by 210 basis points to reach 3.3%. As you might imagine, we are focused on the situation at the health division. We have a highly skilled team running that operation, and they are rapidly adjusting their country-specific strategies to mitigate and eventually revert these negative trends. For example, we are accelerating the retail component of our Colombia business, changing our mix to a more profitable, less structurally vulnerable operation. In Mexico, we are making important adjustments to our consumer value proposition, following templates used in Ecuador and Chile. We will keep you posted on the evolution of these strategies. Moving on to OXXO Gas. Same station sales increased 6.9%, and total revenues increased by 13.9%, reflecting solid trends in our institutional sales. During the quarter, gross margin reached 11.6%, and operating margin was 3.5%, reflecting lower profitability from our institutional business, partially offset by operational efficiencies and strict expense control. Turning to Digital FEMSA. We continued to make progress during the quarter. The number of active users for Spin by OXXO reached 7.4 million, or 77.9% growth year-on-year, demonstrating steady trends in consumer adoption, while also experiencing increased transactions per user. For its part, our Spin Premia loyalty program has also experienced good growth of 71.3% year-on-year, reaching 21.7 million active users. Notably, approximately 35% of OXXO's Mexico sales are now linked to Spin Premia, as are 40% of the sales of OXXO Gas, strengthening the foundation for our data gathering and utilization capabilities. As we continue to prioritize the acquisition of higher potential users, we are also making strides in the evolution of our digital operations into an ecosystem that is focused and geared to deliver maximum value to our users, while driving sustainable growth and profitability for FEMSA. From a financial perspective, we spent close to $50 million during the development and expansion of our digital ecosystem during the quarter. This is in line with previous quarters and below budget projections. Of note, are the multiple insights that Juan Carlos Guillermety has brought to the business, which have allowed us to contain costs and focus our efforts on those initiatives with the greatest potential. Finally, Coca-Cola FEMSA posted another set of remarkable results in the first quarter, with double-digit growth in revenues and EBITDA against significant foreign exchange headwinds, supported by volume growth across most of their markets, as well as revenue growth management initiatives. Congratulations to the Coke FEMSA team and the Coca-Cola Company for such a strong quarter. You can listen to a replay of their quarterly call, which took place last Wednesday. Summing up, FEMSA's first quarter results show that our two largest business platforms, OXXO and Coca-Cola FEMSA, remain operating at a very high level, generating great results by refining their tools and business models to go after an extended runway of opportunities, while we continue to nurture newer, smaller business units to get them ready for faster growth, and we tend to the few elements of the FEMSA platform that need some immediate adjustment. As José mentioned at the outset, we look forward to a permanent open dialogue with you as we continue writing FEMSA's next chapter. And with that, let's open up the call for questions. Operator, please? ...Thank you very much. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question for any reason, you may press star two. We kindly request you limit yourself to one question. You will be advised when to ask the question. Our first question is from Carlos Laboy with HSBC. Please go ahead. Yes, good morning, everyone. José, thank you so much for joining some of these calls and offering your insights. It's really, I'm sure, gonna be super helpful. Taking a broader look, perhaps even beyond OXXO as well, and digital, at the different types of businesses, what parts of the business are you perhaps most excited about? You covered a lot of ground, you talked a lot of things, about a lot of things, but what are you most excited about? Hola, Carlos. Thank you for that question. So obviously, we have a lot of challenges and outstanding opportunities. I would say, I'm quite excited first and foremost about all of our opportunities in Mexico. I think OXXO, the value proposition enhancements, the developments in food, and just with all the data analytics that we're pursuing, I think those growth ahead for OXXO Mexico. And I see, and I'm beginning to get very excited about our opportunity with discount retailers, with retailing. I wish that was still much more under the radar, but I still see a lot of opportunity for growth for discount retailing in Mexico. I'm very excited about our South America expansion, particularly Brazil. I really think Brazil, if we can get it right, we can be as big as OXXO Mexico, if not bigger. It'll take us a few years, but I'm really excited about the opportunity. We have tremendous partners, and we have a tremendous team in place that that keep me really excited. And then I would say, I mean, it's again with food, but the food service component that I see, that I'm learning from Europe, that we're seeing, we have tremendous assets there, that if we can eventually make them grow organically, could be a source of growth that will surprise us. That's those are my most interesting things. Obviously, I'm carefully looking at the U.S., but being very cautious as to when and where to get into that playing field. That, that's helpful. Thank you so much. Thank you, Carlos. Thank you. Our next question is from Tiago Bortoluci with Goldman Sachs. Please go ahead. Yes, good morning, everyone. Congrats on the results, and thanks for taking questions. On the numbers, right, could you please help us understanding the dynamics within your corporate expenses line and calling the balancing, right, between consolidated results and the division? It seems you had a huge expense in the fourth quarter. I think you were guiding for something close to MXN 1 billion per quarter going forward in expense, and it seems in the quarter you had a huge reversion, right? So if you could, we would welcome you walk us through explaining what's happening there and what is the underlying basis we should expect going forward, is number one. And if I may, a second one, this is on OXXO, particularly in Mexico, right? You reported very good same store sales plus comps, particularly in traffic, you grew 220 basis points in a quarter that the calendar might have had more, but still positive benefits for you, right? So the question is: What is the underlying traffic level that you're seeing? And more importantly, going forward, how do you think about same store sales, having one of your peers just reporting and commenting on making growth for the year? Thank you very much. Yes, hi, this is Martin. Thank you for your question. As to corporate expenses, I know it is hard to keep track of what's going on because that line item reflects a variety of things. It not only includes the corporate expenses, it also includes some of the smaller businesses that historically been included within other. For example, Bara is there, the results of Bara, the results of Digital, Doña Tota is also there. And within our corporate expenses, the number we have always sort of guided to is more or less $100 million. But it's hard to get to that number because there can be movements given the different businesses. Historically, the historical numbers will not be much of a guide because the other line used to include Solística, at different times, Imbera, PTM, and so the historical numbers. Going forward, it should remain stable. All those businesses remain there, and so you should be able to get a little bit more clarity, and we'll try in future calls to maybe be a little bit more specific or get back to you with any details. Yeah, I think on that, Thiago, I mean, obviously, we're—this is Juan. We're lapping the most, I guess, volatile quarter, right, in terms of FEMSA Forward. A year ago, there were a lot of things that were moved around in terms of- ... you know, reclassify to discontinued operations. To Martin's comment, recently, you know, we had made some changes with Solística, with Envoy. So I think we're gonna, you know, the next couple of quarters are going to—I expect trend to what becomes a more predictable number below the line. And of course, we can, you know, follow up offline to try to kind of reconcile our model with yours. But this is really the most—the quarter with the most noise, I think, given what happened a year ago. I mean, I would just add, I think, traffic will—it's, it is getting better and better, but it's still gonna be tough. The next few months, we have strong comparison against next year. It was a very good quarter in terms of revenue, and we have some interesting, you know, things, extraordinary things, like in the elections, we have a weekend where it's a dry weekend, there's no alcohol sales. We still have good effect of on the, on the first weekend of June. So I think it will be a tough quarter, but I think, given all that we are seeing in terms of of our analytics and things to drive revenue into the store, we, we could be okay in traffic. I would add to that, I mean, the Spin Premia is helping a lot in that. From not being relevant at all, historically, we're now 35% of the purchases in the store are being done by people who are showing their Premia card or getting their points digitally. So, that is an important driver of strategies to drive traffic. Yeah, I would just add, Thiago, you know, we almost delivered 10% same-store sales growth on top of 18.5 or something like that that we did a year ago. You know, we continued to perform above what I would have expected in terms of both the split of traffic and ticket. Obviously, inflation is down to 4-4.5, and our ticket is 3 points north of that. You're gonna hear us talk a little bit more about revenue management, and Jose already mentioned some of the ways that we're using data for that. So, you know, I don't have a good handle on what the new kind of algorithm will be for same-store sales, but it's increasingly looking like we're gonna be at a higher level than we were pre-COVID, right? You know, 2 points, 2-point-something of traffic, you know, several years after COVID ended and lapping what we were doing a year ago, that's above trend, and that's higher than I would have expected. So anyway, we'll keep talking, but things are looking quite robust. Oh, this is great. Thank you very much, everyone, and congrats once again. Thank you. Our next question is from Ricardo Alves with Morgan Stanley. Please go ahead. Hi, everyone, thanks for the call. Martín, nice talking to you. I had a question on OXXO top line as well. Appreciate the, the commentary on same-store sales, but I wanted to, to discuss, new store openings, and if we can go into more details on the strategy, around new openings. I mean, over 400 stores in the first quarter was quite remarkable to us. I think that that was one of the biggest surprises that we had. Mm, and your same-store sales have been running above expectations, and to the points that were made in the preliminary remarks, it really sounds like we're getting to a new, a new pace, a new reality of expansion of OXXO across the board. So I wanted to take the advantage of the management here. If we can talk on a per-country basis, you know, what's really driving that? I mean, of course, Mexico has been stronger. I'm sure that that's part of that, but are you stepping up more aggressively in other countries? I heard the comments around Brazil, but I understand that Brazil is not in these numbers of proximity. So I mean, it seems that it's across the board. So just taking advantage of this call, if we can go into more details on that, and if the impression that we have is kind of valid, that we're probably talking about a new pace, you know, new targets in the long run, as it pertains to where OXXO could be, in Latin America overall. More of a strategic question, if I may. Thank you so much. Thank you, Mr. Alves. Do we- Thank you, Ricardo. So, a few things. So we had an extraordinary quarter in growth of store units in Mexico, and we expect in the rest of the year, that will normalize. We still plan for 1,000, maybe 1,100, stores opening in OXXO Mexico this year. We are really enjoying the traction that the cohort of stores are maturing incredibly well, with the value proposition that we have put in place with the assortment and segmentation. We feel more and more confident that our stores are becoming profitable and maturing quite rapidly. But I don't expect to accelerate that pace in Mexico, other than just maybe trying to accelerate on opening the most stores as early in the year as possible. That always helps us with momentum and with stores tend to mature more better the earlier in the year we open them. We are accelerating in South America, particularly Colombia and Peru. We're hitting a stride, and we see a lot of opportunity. After 15 years in Colombia, I think we now have a value proposition that is a winning value proposition. It's our where our food, our food convenience business is better developed. We have a profitable business in food in Colombia, and we're very excited about the traction that we're seeing. We plan on growing in Colombia and Peru, and we still have to fix some things in Chile after the acquisition of OK Market. I think there's some things to structurally fix before we accelerate growth. But overall, we plan to have several thousand stores in South America, and that's not counting Brazil. So yeah, I plan to accelerate in South America as well. I think on what José just said, obviously, the hardest thing that you can do or that you... What takes you the longest time is to get the value proposition right and to get the four wall economics right. But once you have that, then it really becomes a function of scale and obviously, finding the right locations and getting your expansion team and the supply chain. I mean, it's very systemic, but I think in a couple of countries, as José said, we're at that point where it's really from fine-tuning, and you never finish fine-tuning the value prop, but moving more to a, you know, replication mode of just get more scale, and then, the margins and the ROICs begin to look a lot better. Thank you very much. Thank you. Our next question is from Robert Ford with Bank of America. Please go ahead. Thank you very much, and good morning, everybody. José, you mentioned your excitement with discount retailing, but you didn't use the term hard discounting, and I was curious as to why. And then, how are you thinking about Bara growth in the context of possible OXXO cannibalization? And then the press release also cites soft drinks as being a driver of Bara in the quarter. You know, what percentage of sales at Bara are soft drinks, and how are you targeting private label in the opening price point opportunity in the beverage category at Bara? And I'll leave it there. Thank you. Okay. Thank you. Thanks for that question. So yeah, that's a very good point. Obviously, Bara is, I wouldn't say, and it's a very good point. Is it already a hard discount retailer? No, I think it's on the process of getting there. We still have, I mean, our private label, as percentage of total sales, is growing every quarter, but it's still on the high 20s%. But I think as we move forward, we're assigning a team to grow our private label business, and we see a huge opportunity to keep growing that business. In terms of cannibalization, as you know, Bara has been part of this business for over 20 years or more. But in a true soft discount or discount matter, it's been over the last five years, and we see a lot of Bara's in Guanajuato, in Querétaro, next to OXXOs, and they thrive, both of them. They do, I mean, obviously, there is some cannibalization, but it's minor. They serve very different demographics. They serve very different purchase decisions. Bara, I think, is much more geared towards the, you know, the socioeconomic level that really requires everyday purchases. It is, it's still about 25% of its revenue is convenience, and in that sense, we do sell a lot of soft drinks, but it's more and more geared towards familiares or, you know, multi-serve options. We do see a lot of growth in beverages, as just as we saw in OXXO, a growth in beverage. So I think it has to do a lot with the competitive dynamics of that sector, and not so much that they are cannibalizing also in that segment. I would comment on that also. We have a unique opportunity in that format that others don't. A typical hard discount does not have convenience categories. Part of the reason they don't do that is because of their distribution model and a variety of other reasons. We already have that. It's already built. So adding the convenience categories to our Bara offering just strengthens the Bara offering. But we like to refer to it internally more as a soft discount- Yeah ... because we don't necessarily feel the need to follow every single rule of hard discount. We tend to be a little bit more pragmatic and agnostic about certain things, particularly because we can bring a whole set of capabilities to that business that others can't. One, another example is financial services and executing services within the store. Very few people can bring that to a hard discount model and create that network effect that today we have at OXXO, and it marginally doesn't add any cost to what we're doing in OXXO. I would add that competitive advantage is an important segment. The services part of Bara is an important. It doesn't—it's not as big as in an OXXO, but it's growing, and we've been very smart about making sure it doesn't intervene with the rest of the value proposition of Bara to not affect the discount buyers of the store. So I think we serve both consumer occasions very well in Bara, and that's something that I'll only do. Those are very important points of differentiation. And then just with respect to how you're tackling the beverage category in Valora, in terms of the importance of private label and how you're finding your opening price points, or do you stick to, you know, all branded, you know, in favor of profit? My belief, and from talking to experts in the industry, private label works fantastic in almost all categories, one of the toughest ones, and you've seen it in Walmart, you've seen it in other discounters. I am of the belief that private labeling in beverage, other than water and other categories, are—we like working with the big players that, you know, the cost of carrying that and putting that cost in place. I much rather stay with the big players in beverages. I do think private label serves a huge purpose in almost all other categories. And it has nothing to do with our ownership over Velamsa. It just really what the consumer is demanding in those products- Yeah Are the national brands, and so we will provide them. The fact is, OXXO does have some private label beverages, but they generally are a very small niche of the total beverage portfolio that we offer. Makes sense. José, Martín, thank you both very much. Thank you. Thank you. Our next question is from Rodrigo Alcantara with UBS. Please go ahead. Hi, guys. Thanks for taking my question, Juan and José. My question would be for you, José. Just if I perceive correctly on Carlos Laboy's question, I mean, you mentioned focus on OXXO last time, right? And US could be over time. I mean, does this mean that in your view or, you know, US as a priority, maybe get a step backwards in terms of priorities, if I perceive correctly or not? And on the other hand, I'm curious that we have not heard about Europe, perhaps Valora, which has performed amazingly right over the last few quarters, a very nice surprise. So also just curious here, why just coincidence that Valora was not being discussed here. That would be my question, José. Thank you very much. Thank you, Rodrigo, for your question. I think it's good for me to clarify. First, I am very excited about the U.S., but I think the U.S., in general terms, when you talk to convenience, it's like saying, it's a very generic term. U.S. is huge in the convenience store market. It's 165,000 convenience stores with very different dynamics and demographics and styles of stores as you move geographically and from rural to urban. So I would say, am I excited in the U.S.? That it's very general. I am very excited about certain parts in the U.S. Particularly, I am very excited about the border towns, towns that I know well, that I've known since ever, and they are very much familiar with the OXXO brand and the OXXO capabilities. And I believe, and what we talk to people in those border towns, they will be very excited to have the opportunity to have the OXXO value proposition on both sides of their, basically, their own city already. So I'm very excited about the potential of the border towns or near border towns for OXXO expansion. And we have a team in place, and we're working hard on how to tackle that. I am also excited about exploring certain regions of the U.S., where I see interesting dynamics still very attractive for convenience store expansion. If you look at the Southwest without California and the Southeast without Florida, there's not a lot of density, is where there's less competition. That's where I see the fuel dynamics taking a longer time to change. I think that fuel as a value for traffic will keep. I mean, I think for many, many years in the U.S., but in particularly in those regions, it will be very resilient. So I'm also exploring, not necessarily with the OXXO brand, but are there any value or interesting small or medium potential acquisitions where we could transfer the capabilities that OXXO have and provide value? I'm excited about some of our assortment capabilities, our pricing capabilities, and frankly, our purchasing negotiation capabilities, because we're a huge player of many of the beverage and tobacco and many of the categories that are already here South of the border, and maybe we can play a place. So I'm excited about it. I'm just super excited about how close we are to a very interesting expansion in South America. Europe is a very interesting play for us. We bought a company that has superb management, and you're just seeing it with the results. They've done a tremendous job in really finally capturing the potential that they have, and I still see a lot of potential bottom line growth. We have some assets in the Valora portfolio in food service that are, quite frankly, impressive in terms of four-wall profitability. One of the big challenges that the team has is can we grow them? Can we grow them organically? If we begin to grow organically, our Pret A Manger business, our Frittenwerk business, I think there could be a very interesting surprise for Valora going forward and many more quarters like this one. So I'm very excited about Valora as well. Awesome. That was a great call-out to understand your thinking, José. And last one, apologies for violating here the rules. I mean, we have seen you very active on the H ealth division, right? You were recently in Chile, visiting Cruz Verde, et cetera. I mean, just to share your thoughts on what to do or the areas for improvement in Mexico, in the Health division, how you see M&A fitting in the Health division? That would be my last question. Thank you very much, José. No, the Health division, and particularly in Mexico, is going through some challenges in terms of competition. I mean, let's not forget, we had very successful years, many years of profitable growth and hitting our stride, but I think we had one type of pharmacy format in Mexico, and we believe now we have the right system in place to begin to develop another type of pharmacy format that has worked fantastically for us in Chile. We're really turning around Chile, Ecuador with our more, you know, better developed store version. We think Mexico is ready for a Cruz Verde store version that really captures all the value that we can bring in health and beauty, in pharmacy. So we are planning to roll out organic expansion on that level. We've always looked for potential opportunities in organic opportunities in Mexico, but right now we're very much focused in getting more accelerated expansion in a bigger but bigger format of stores in pharmacies in Mexico. Awesome. Thank you very much, José. Thank you. Thank you. Our next question is from Renata Cabral with Citigroup. Please go ahead. Hi, everyone. Thanks for taking my question. This is about Spin by OXXO. So the platform was launched in 2021, and it reached the impressive number of almost 11 million users. So I'd like to ask you if you can share the opportunities you are seeing going forward in terms of eventual partnership with banks, expansion of service, and even the number of users that already reached 11 million right now. So thank you. Yeah, I'll, I'll take that question. Look, the entire Spin ecosystem is not only a great financial opportunity for FEMSA or business opportunity for FEMSA, it's a strategic necessity. And I would look at it as an entire ecosystem. I think it all works together. So I wouldn't focus just on Spin by OXXO. The idea is that eventually that ecosystem will grow outside of the store. It's sensible for it. It contributes to the store in very positive ways. For example, as I mentioned earlier, the loyalty program. But our vision of combining Spin by OXXO, Spin Premia, and our NetPay business, is to be able to go outside the store to offer a complete solution to other small, particularly small businesses, where they can also have their own loyalty program, where they can also have their point-of-sale, terminal, through which they can transact and provide services themselves, a payment of services. And our idea is, as a strategic necessity, we need this business to protect and enhance the value proposition in OXXO. And as a business opportunity, it's taking it outside the store with all these different components that I've mentioned. Our new CEO in that business, Juan Carlos Guillermety, will be speaking on this call at some point during this year, and he will share with you his vision. He's brought a new focus on very specific areas of opportunity for that business, which he will share with you the next time, when he participates on this call. In addition, I have been very pleasantly surprised at how he has taught the organization about key areas where we can be saving significant amount of money, which is obviously the money that we can redeploy in more productive efforts. I hope that answers your question. Yeah, I think I would just add to what Martin just said, Renata. You know, we mentioned a little bit in the opening remarks how we are, you know, after a few years, which you alluded to, where- ... a lot of the focus was put on acquiring customers, right? And we had our theories of how, what kind of a role the store network would play as a tool to help us acquire customers. Questions have been very favorably answered. But eventually, as you move more towards monetization, and these are all questions that we get all the time, you know, how do you monetize this? Do you eventually, there's the digital media that is, you know, how to begin to use that data, and we're already beginning to do that and monetize it with CPG companies and other initiatives. And eventually, to Martin's point, lending, right? And how we eventually move in that direction. Do we do it ourselves? Do we do it, you know, with a partner? We will cross those bridges when we get there. But, right now, I think it's very satisfactory that on the question of whether we could acquire a lot of subs and be one of the fintechs or one of the, you know, players that would be left standing, I think the answer has been a resounding yes. And there's just a lot of things that we can do. We mentioned at the outset, the number of data points, right? The millions of tickets every day that are enriching our databases, that we're putting to work in various ways. So, lots of upside there, and lots of things to do. I would just add, I think, and Juan Carlos and I are working together in pushing this number. But we are very proud of our penetration with Spin Premia, with 35% and growing every month, and people are getting more adapted. And that's obviously a general average, but there are certain parts of Mexico that Spin Premia has the penetration over 50%, almost reaching 60%. So that's an impressive amount of people in certain cities in Mexico who are already used to the Spin Premia loyalty program, and they take it with them everywhere. But still, if you add our penetration in financial services within the store, it's still very low. It's, I think it's in the 5%. And we put focus on that, and Juan Carlos and I are working together in devising something to accelerate that. Our value and that info that we'll have, that will be very valuable for not only retail media, but especially for more financial services and lending, that's gonna explode in potential. So, that's when I think we conversations with other players and potential partners would become much more interesting and they'll be more eager to do things with us. So we look forward to keeping you updated on how that number increases. It was really helpful. Thank you. Thank you. Our next question is from Ben Theurer of Barclays. Please go ahead. Hi, yeah, good, good morning, and thanks for taking my question. A lot's been answered, but one question I still have pending is just around the capital allocation in general as it relates to your leverage targets. And it seems like you've toned down a little bit in terms of what you would like to do on the M&A side. Clearly, we've seen you active on the buyback side. You've done a little bit more on the dividend side. But where leverage is, I think you're still due to get some incremental cash, it really feels like it's still a long runway until the end of 2026 to kind of get to your target leverage. So maybe help us understand how you think about getting to potentially the $2 billion on the buyback side, at least, as one lever, and if you're considering maybe another extraordinary dividend. What are like the things you're focusing on to add to that? Yeah, as the issue of the tone of M&A, I wouldn't call it an issue of tone, but the reality is we have declared strategically that our focus will be on the three core verticals. And in each one of those verticals, it's pretty clear what would be available in terms of mergers and acquisitions. I think Coca-Cola FEMSA, it's always gonna be within the Coke system, and anything that's really outside of the Coke system, more likely than not, will almost surely, and sort of not, will be together with the Coca-Cola Company in the typical way we've done transactions of that nature. In the case of digital, I don't today see any sort of immediate need for M&A, as in going out and acquiring assets. There may be joint ventures, and there may be partnerships, but I don't really see. And then on the retail side, you know, the one issue that I know concerns people, that people are monitoring, is the issue of the U.S. I think José spoke about what his objectives are and gave you some sense of sizing of what we're thinking about. So. And there are opportunities in retail with regards to health in Mexico, for example. Somebody asked a previous question about that, and there are opportunities, and we will always look at them, obviously, always with a value creation lens. There isn't much to be done in Latin America in the convenience store space. All of them tend to be generally small, and we are having enough success with our organic growth that it would have to be an interesting and compelling opportunity in order to forgo what is always on a risk-adjusted basis, you know, organic always provides an overall greater return in the shorter term. In terms of capital allocation and returning capital to shareholders, as we announced in FEMSA Forward, you know, there are two ways we can do that: extraordinary dividend and buybacks. We're agnostic, really. It really is not. We will always be evaluating what is the most efficient way and what provides the best return. So given our stock price, we're always, we use opportunities when the stock price goes down, and you can hear from our presentation that we're bullish on the business. So we will always use dips in the stock probably to take opportunities, and we'll do it through opportunistic purchases in the market during the windows and through these more formal ASR programs that meet, you know, all the legal requirements, which are quite detailed to work out between the U.S. and the Mexican market, and the U.S. and the Mexican authorities. And, you know, we have been very, very clear that we wanna reach 2x by 2026, and I have my work cut out for me in this new role. Thank you very much. Thank you. As a reminder, if you'd like to ask a question on today's call, please press star one on your telephone keypad to register your question. Our next question is from Alejandro Fuchs with Itaú. Please go ahead. Hello, José Antonio, Martín, Juan, Jorge, team. Thank you for the call and the space for questions. I have two very brief ones, on OXXO. The first one is that we saw a very strong top-line growth during the quarter, and congratulations on that, but a slight drop on EBITDA margin, right? So I wanted to pick your brains a little bit on how you guys are seeing the different strategies, you know, now with continuous pressure in terms of, you know, payroll and expenses in Mexico. How do you see this going forward? You know, what is the comp about maybe efficiencies? And then I know that you mentioned some of the AI initiatives maybe at the store. Any more that you can share with us will be very helpful. And the second one maybe for Martin, very quickly on gross margin. Also, a very impressive expansion year-over-year at OXXO. Wanted to understand how much of this is already Premia, with the 35% tender, and how much is maybe the commercial agreements, and if you see this as a sustainable level going forward. Thank you. So, thank you, Alejandro. I would say on the EBITDA, obviously, as you know, there's been labor pressure for the last few years, and I think we were very good in controlling a little bit of that labor pressure and with some of the labor modifications that we did at the end of that last year that are helping us withstand or cushion a little bit that. I am very confident that I will emphasize our AI initiatives are being very helpful in understanding transaction patterns, and we're being much more smarter about how to staff the stores with some of these AI initiatives. But we started with a pilot, a big pilot, over several thousand stores, with very good success over the first quarter, and now we're gonna roll out that throughout the year, and that should help us a little bit compensate on the EBITDA. But basically, we went from only monitoring traffic in general and sales, and from that, doing an algorithm of how many people should be staffed per store. And now we can put in inputs like traffic per hour, type of traffic versus services versus coffee versus other types of consumer demand, and how that changes the staff. And what we saw is we have several thousand stores that were understaffed and several thousand stores that were overstaffed. So I think that AI will help us, in a sense, help us increase top line and will also help us in the bottom line. So I don't see huge efficiency in terms of layoffs, but more of just being much more efficient in how to make sure the stores are staffed to the level where they can maximize sales at the minimum cost. So we're very excited for that, and we see that will help us much more as we progress that, what started as a pilot into a national rollout. In terms of gross margin, we have ambitious plan of expanding gross margin in several fronts. Some of it is being helped by Spin Premia, some of it is being helped by what I mentioned on AI, with better assortment, and better pricing. But I would say there are other things that are helping us. We've had a dramatic increase in services, not only financial services, but services. OXXO Pay grew dramatically, double-digit growth, a lot driven by e-commerce, with some of these new entrants in e-commerce using OXXO Pay as a preferred payment platform. We see a lot of growth there. A lot of people are still non-confident of using their debit card or their credit card to pay, and OXXO is a fantastic option for them. We see still a lot of growth for that, and that really drives us in gross margins. We've also had some categories that are heavy on gross margins that will help us, like some drinks and some snacks. In general, I think we had a few other things that have helped us in the gross margin category. Yeah, and we were also very pleasantly surprised. It is the best first quarter gross margin that I was able to document going back to many, many, many years back. You know, one of the things that has struck me since I came back, although I was always involved, I never left the company in terms of helping out on strategic projects, but now, obviously, I get an opportunity to get more involved with the operations. The amount of tools available to OXXO, to revenue segment, to store segment, relative to what it did, five, six years ago when I left, is really impressive. You know, we have retail media, digital retail media initiatives, and that includes so you're now going to be able to sell, generate promotional revenue from POP inside the store, from the screens inside the store, from the use of the app. So two of those three didn't exist really five or six years ago. And that, the scale always helps. Every thousand stores we add, you know, you're selling the ability to transact with that ecosystem. So on the... And on the labor front, I would just have to say, again, using data analytics, my understanding is, supervisors used to supervise 12 stores, and there are places in Mexico with the help of technology, where they're over 20 now. That's not always the case, and you always have problem stores, and you have to dedicate more time. But being able to increase your supervisors through the use, first definition of roles and responsibilities between the store leader and the supervisor, and then, helping that supervisor with technology. As to the labor expense, I, you know, I also worked in the Coca-Cola Company, sorry, in the Coca-Cola FEMSA for many years. And there is a, in the increase of the minimum wage in Mexico, which is very helpful to us, which is it goes towards the bottom of the pyramid that most uses our products and most uses our stores. And so, as people's income increases, the reality is they're also going to be purchasing more products from OXXO, and they're going to be buying more Coca-Cola products, and we have to find the right balance. But part of our top line, part of our ticket is people have more money in their pocket, which, to be very honest, we're all happy about it. I think it's fantastic that people have more money in their pocket and their standard of living is improving, and that's a win-win for us, at least, a positive development. Thank you, José Antonio, Martín, very comprehensive questions. Thank you. Thank you. As we have no further questions, I'd like to turn the call back over to Mr. Fonseca for any closing remarks. Thanks, everyone. I think it was a great call. Obviously, we're available for follow-ups, as always. And otherwise, have a great weekend. Thank you very much. That concludes today's conference. You may now disconnect.