Good morning, ladies and gentlemen. Thank you for standing by. Welcome to GRUMA's first quarter 2023 earnings conference call. During today's call, all parties will be in a listen-only mode. Following the speaker's remarks, the conference will be opened for questions. If you have a question, please press star one on your touchtone phone. Please press star zero for operator assistance at any time. For participants using speaker equipment, it may be necessary to pick up your handset before making your selection. I would now like to turn the conference over to Mr. Adolfo Fritz, GRUMA's Investor Relations Officer, who will present earnings results. Then we will open the Q&A session where Mr. Raúl Cavazos, GRUMA's Chief Financial Officer, and team will be available to answer additional questions. I would now like to turn the conference over to Mr. Fritz, IRO. Please go ahead, sir. Thank you. Good morning, welcome to our 1st quarter 2023 conference call. We're pleased to have you on the line and thankful for the opportunity to share our results with you. With me today, as always, are Mr. Raúl Cavazos Morales from our CFO, Rogelio Sánchez Martínez from our Corporate Finance VP. To start, we'll take a few minutes to discuss the fundamentals and results for the quarter, then we'll open it up to any questions you may have. We're pleased to report that market fundamentals and consumer demand have been more positive than expected across all our divisions during the first quarter of the year. In addition to these dynamics, the innovation efforts we've instilled into operation played an important role for our performance during the quarter, with 87% of consolidated EBITDA stemming from operations outside of Mexico. In our tortilla operation in the U.S., our Better For You product line, in addition to a faster pace in the food service channel, the growth in this division, while in Europe, stronger distribution in addition to a stellar performance in the retail channel, split volume growth during the quarter. In Asia and Oceania, China keeps recovering, albeit slower than expected. Australia presented a more normalized level of operations after recent pricing strategies were implemented, pointing towards a solid evolution in quarters to come. In our corn flour business, retail demand for corn flour in the U.S., coupled with accelerated buying in Mexico, supported volumes in our two main subsidiaries. In Central America, the introduction of new products has been very beneficial to our business since the third quarter of 2022. This quarter was no exception, although volumes were temporarily impacted by a slowdown in rice demand. With these fundamentals, total volumes expanded by 5% while sales grew by 25%. EBITDA expanded by 28% relative to last year, while EBIT per ton, our internal profitability metric, grew by 22%. Our balance sheet remains robust and with the same structure we had last quarter. Inventories, although rising at a slower pace due to the effects of inflation, have stabilized the net debt to EBITDA multiple stands at 2x, which is our internal threshold for leverage. Going into the performance at a subsidiary level. In the U.S., market dynamics in terms of growth are very similar to what we saw during the first quarter of 2022. The demand for a Better For You line has been gradually accelerating in line with the ongoing innovation efforts that have characterized GRUMA in this product line. This has taken place amidst inflation and with no trade downs towards other products thus far. Demand for corn-based tortillas and derivative products is still growing steadily on the back of higher inflation sensitivity from a portion of the consumer base that has been foregoing the purchase of other products to increase their consumption of tortilla. Demand for flour tortilla has accelerated significantly when compared to previous quarters. In corn flour, we witnessed a boost of growth in the retail channel relative to last year as more consumers at home instead of dining in more expensive alternatives on the back of inflation. This, however, was offset by the slower recovery from industrial clients after experiencing higher price sensitivity during the fourth quarter of 2022. Volumes in the U.S. grew by 2%, sales expanded by 22% during the quarter, while costs are still growing in line with inflation. We've been, however, able to protect profitability as reflected by a 41% EBITDA expansion. That being said, we're still cautious as conditions in the U.S. economy keep changing. We have definitely started the year on a positive note. In Mexico, during the last few months of 2021, there was elevated demand, which caused a contraction in volumes in 1Q 2022 on a sequential basis. This also created a lower base of comparison with the volumes GIMSA was able to generate during the first quarter of this year, led to volumes to grow 8% relative to 1Q 2022. We started to see the impact on EBITDA levels from the change in accounting treatment of royalties we communicated during our last earnings call, in addition to a higher cost of corn impacting two-thirds of the quarter, which led to 47% EBITDA contraction despite the healthy market fundamentals. In European division, we reached a 10-year record high in terms of distribution coverage, while retail tortilla sales keep growing steadily in both the northern and southwest region of Europe. This positive performance, however, was overshadowed by two fronts. The ongoing logistic challenges brought on by the war in Ukraine in our corn milling operation, in addition to a difference in comparison basis because of those months prior to the war when these challenges did not exist. As revenue-generating drivers remain robust in the markets to subsidiary services, we've been proactive in management of inflation, which in some countries has reached a 50-year all-time high. In spite of these challenges and a 4% volume contraction, our operation is running very smoothly, and it is our expectation that this positive trend should continue going forward. The inaudible dynamics caused net sales to grow by 21%, while EBITDA expanded 22% when compared to 1Q 2022. In the Central America division, we've been very successful by expanding the distribution of our latest and most innovative products. This has led to profitability performance from this subsidiary to be at all-time highs and with solid prospects for the rest of the year. Our volumes from the quarter experienced a 2% contraction when compared to those of last year. However, this contraction was caused by a slowdown in our rice operation in Central America, which lies outside of our core business. Profitability-wise, however, the subsidiary was able to expand net sales by 27% while managing costs in line with inflation, resulting in EBITDA growth of 88%. The Asia and Oceania division went through a marked slowdown last year as a result of the lockdown in China, severe weather conditions in Australia, and all this causing a variety of logistics and distribution challenges which weighted on our cost structure in this division. Although we cannot yet say that the situation has been totally resolved, we're pleased to see an underlying improvement in the economic activity in the region, and with that, a much better performance of our division. Volumes decreased by 3% as a result of a higher comparative base a year ago, while net sales grew by 7%. Inflation on costs has been managed relative to the second half of 2022, yielding an EBITDA growth of 11% relative to 1Q 2022. On a side note, as we've done in the past, this April we will be holding our annual shareholders meeting, where we'll be asking for approval for the cancellation of 5.6 million purchased shares, which represent 1.5% of shares outstanding, and for the distribution of dividends to shareholders, representing approximately a dividend of 2%. Turning back to our operation, in all, we're pleased to see a much better start of the year than was previously expected. The worsened economic conditions are still looming on the back of a potentially much higher unemployment rate and ongoing inflation. We are as prepared as we can be to face these challenges when and if they come. Until then, we will focus on expanding our business and protecting profitability just as we've done thus far. With that, operator, if you open the line for questions, please. Thank you. Ladies and gentlemen, at this time we will be conducting your question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. Confirmation tone will indicate your line is in the 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 key. Our first question comes from the line of Fernando Olvera with Bank of America. Please proceed with your question. Hi. Good morning, everyone, and thanks for taking my questions. I have two. The first one is related to pricing. How are you thinking about your pricing strategy the remaining of the year in the U.S. and Mexico, where volumes were strong? Do you see a need to implement additional price increases? My second question is related to Mexico. Can you give us more color of how much of the EBITDA margin contraction come from current costs and how much from royalties? Thank you. Thanks for your question. In regards to the first one, what we're seeing right now is that the price increases that we've done in the different regions where we have a presence have caught up with costs. Costs have been stabilizing right now. As of now, we see the operation being very healthy, in a good state, and we're not looking into any price adjustments thus far. If, inflation permitting, we're in good shape, and unless we need further adjustments, we'll be thinking about that in time into the future. Right now, I think we're, you know, revenues have finally caught up with the growth in costs. In terms of your question in Mexico, I would tell you that around 300 basis points was the impact of royalties and the rest would be from the cost of corn. Great. Thank you, Raul. Thank you, Fernando. Our next question comes from the line of Antonio Hernandez with Barclays. Please proceed with your question. Hi, good morning. Thanks for taking my question. A little bit of a follow-up on that you just talked to. How is the elasticity in terms of these price increases that you already put in? in? Has it been basically just as expected or maybe a little bit higher than what you originally expected? If there's a difference across the regions? Thanks. No. Elasticity so far, I would tell you that it's been, you know, very, as expected. We, you know, based on the economic data and how the consumer's been behaving, obviously we had question marks in our head in terms of when the consumer will start be pulling back from price increases or just to trade down to other products. So far things have remained as they were last year. The consumer is still pretty strong in terms of their purchasing power. We've been able to grow despite the inflation levels in the U.S. and in the rest of the world for that matter. Our operations, specifically in the tortilla space has been gaining market share. We've been doing very, very well in the U.S. and that has echoed to other regions just like in Europe. In Europe, the retail channel tortilla there has been growing dramatically, relative to the past. It's something that it's bound to continue as we add more distribution in Europe as we've done for the last three quarters. It's something that we'll be focusing on. New product launches have attributed to maybe the, you know, the acceptance of the consumer of our products. We pride ourselves for the innovation that we're putting into these new launches and they've been really performing extremely well. Okay. Thanks for that color. Just to confirm, you mentioned around 200 basis points the impact of price in Mexico. 300 basis points. 300. On royalty. Okay. Perfect. Right. Okay. Perfect. Thanks a lot. Have a good everything. Thanks. Thank you. Take care. Our next question comes from the line of Felipe Ucros with Scotiabank. Please proceed with your question. Thanks, operator. Good morning, Raúl, Rogelio, Adolfo. Couple of questions on my side. The first one on the phasing of pricing. You've already talked about not doing, or at least not having plans right now for pricing throughout the rest of the year. Just wondering if there was any price actions in the first quarter. At what point during the quarter you did them. With this, I'm just trying to figure out if this quarter saw the full impact of pricing or if second quarter will really be the first quarter where we see the full impact. Then my second question has to do with Central America, you know, in that region you had a lot of trouble in past years, it really seems like the last year and change you've been performing really incredibly, the margins you posted are the highest that I can, that I can remember. I'm just wondering how much of an impact came from innovation versus what happened in rice because I imagine rice has a low margin, so the fact that that side of the equation didn't perform that well must have helped you in margins. Maybe even despite this you're expecting to maintain very high margins in Central America after the innovation. Just wondering if you could give us more, more color on what recurring margins will look like there. Right now, well, just to follow up in order. In regards to your first question, phasing the pricing, we've done price increases during the first quarter across our operations. If you remember, during the last quarter of last year, Asia, Oceania and Europe were hit pretty hard because of the distribution and logistic challenges that we encountered that inflated costs more than we expected. With the pricing that we implemented in those regions, as you can see, we, the operation itself turned around and we were able to deliver great results. We're expecting these to maintain themselves as they are. If there should be any more inflation hitting our cost structure, we'll delve into that when time that happens. So far, I think we're in great shape just to start focusing on volume. In terms of Central America, as you very well said, the introduction of these new products and more so the distribution to all the countries where we have a presence there, has helped us a lot. Our expectations for margins should be around double digits. The prior expectation the normalized margins in that in Central America if you remember, was about 8%. We're expecting something above, a little bit above 10% hopefully, in Central America because of the introduction of this of these new products. I emphasize again, innovation and new product launches have helped us a great deal. In the U.S., we launched our new products that are Better For You on market last year in November, and it's been a total hit. It's really helped us in the U.S. and there haven't been any trade downs. The consumer is still in great shape, and they're still demanding more products from our brand and can be Better For You. We will continue innovating as the consumer is still in the position of purchasing the products and is still in the position of liking what we're producing. Great. Understood. Alfonso, just as a follow-up on the first pricing question. What kind of phasing do you expect? I mean, were the prices introduced in January, or were they more towards March? Just trying to see how. No, they were across the board. I can tell you that, I can tell you that in terms of Asia and Europe, they probably were at the beginning of the quarter. The rest of the other operations, if they were at more or less in the last month of the quarter. That's very helpful. Congrats on the results again. Thanks. Thank you. Take care. It's a great question. Our next question comes from the line of Alvaro Garcia with BTG. Please proceed with your question. Hey, Adolfo. Raúl, Rogelio. Hope you guys are doing well. Two questions on my side. First, on guidance. You know, your comments in the fourth quarter call were that, you know, you were doing better than expected and it felt as though your guidance sort of baked in a pretty cautious scenario in the U.S. Given what you've seen in the first quarter, would it be fair to say there's upside risk to this 50 basis point margin contraction that in the U.S. which I believe is your formal guidance? Yeah. We're still, I mean, we're still cautious about how the economy may unfold in the U.S. We still believe that there may be a lot more pressure coming, as far as maybe June or July, we'll probably see more pressure coming. Once we hit that point, we may be in a better position to maybe, you know, change guidance and increase our guidance numbers to have a more positive note on our guidance that we provided during the fourth quarter. So far, we wanna remain, you know, cautiously optimistic about our results and how everything's unfolding. In our next call, we'll probably adjust guidance if things remain the way they've been and during the last few months. That makes sense. I mean, the second half does have sort of tougher comps, so that makes sense. My second question is on taxes. I know it's not a very fun topic, but. Yeah. You know, high 30s, high 30s tax rate. I was wondering if you could sort of. I mean, my sense is that there is a lot of cash that is being repatriated from the more profitable U.S. operation into Mexico, and that's why your tax rate's in the high 30s. I guess the question is why your tax rate is so high given that, you know, 70% of your business almost is in the U.S., would be sort of the basic question. Thank you. Yeah. We still. Thank you, Alvaro. We still have to pay taxes as a corporation here in Mexico. As you know, there is a cash component and there is provisioning of taxes because of the difference in tax rates between the corporate tax rates in the U.S. and the corporate tax in Mexico. That difference that exists between the two countries is a provision that we add to the corporate tax rate in Mexico that we do pay in cash. That's why it's a little bit of a provisioning cushion, if you will, that we have in terms of taxes. And obviously. And obviously. The inflation effect as well. Yep. Great. Thank you very much, and congrats. Yep, thank you. Our next question comes from the line of Luis Willard with GBM. Please proceed with your question. Hi, Adolfo. Raul, Rogelio. Thanks for taking my question. If you look at the performance within the inventories account, if you look at the performance of raw materials, it's been growing quite faster than, you know, sales, and you're looking to continue to build up the inventories from that side. Can you delve deeper a bit about this strategy and, I mean, what can we expect in terms of that rapidly in particular going forward, please? Thank you. Sure. Sure. So inventories have been growing at a dramatic, well, probably shouldn't use the word dramatic, but at a significant way. Given that we were preparing or trying to be a little bit more of managing the potential risk of having a logistic or distribution problems that would not allow us to distribute our products to our end client directly. In other words, we needed a strategy during the last year to have a surplus in inventories to avoid the risk of not having enough product, given the logistic challenges that we saw coming as a result of all the, you know, the war in Ukraine and the lockdowns in China, et cetera. We wanted to have more inventory that was actually needed, and that's why, you know, you had two effects on inventories. One was a surplus in inventories, in addition to that was the inflation on the cost of that, of those raw materials. That is why it increased by that much. That is why also our debt levels increased proportionally to the, to the need to network some capital in that sense. Going forward, we see that, I mean, obviously the scenario we're preparing for, thankfully did not come to pass. Going forward, we see inventory levels stabilizing, even decreasing over time as we sell the surplus that we had, in inventories because of the situation I just described. As such, you would see debt decrease as well in line with net working capital. It's not something that it was part of risk management strategy that we had here internally, and it's not something that at least the market should be concerned about. All right. Provided, I mean, assuming raw materials prices, corn prices or whatever, don't come back sharply, it would naturally wind down as you continue to grow. That's the correct assumption, correct? Yeah. That's a correct assumption. Right. Well, thank you. Thank you. Next question comes from the line of Eugenio Caballero with JP Morgan. Please proceed with your question. Hi, good afternoon, everyone. Thank you for taking my question. I wanted to know if you already have any plans regarding the refinancing of the 2024 USD bonds, or what are your plans related to that? Thank you. Yes, thank you for your question. Yeah, we, as we communicated in the past, we're still balancing between using our own resources in the form of revolvers that we have in place, of committed revolvers, or going to the markets issuing a bond. That will depend on interest rates at the point in time where we meet them. If, and if our own resources are more than enough to finance the refinancing of the bond, then we'll use our own resources. It just depends on the rates at this point, which right now they are too high for us. Perfect. Thank you. Thank you. As a reminder, it's star one to ask your question. Our next question comes from the line of Alan Alanis with Santander. Please proceed with your question. Thank you so much. Hi, guys. Hey, Raúl, Adolfo, Rogelio. Congratulations for the results. Pretty impressive. My question has to do with market share in the United States. I mean, anecdotally, just going into different supermarkets in the U.S., I'm seeing more presence of regional brands. I don't know, Guerrero, Olé and the likes. I wanted to ask you, what are you seeing in terms of market share? What are you seeing in terms of these regional brands apparently growing and becoming faster? On that same question, I mean, one of the most important things for retailers in the U.S. and in Mexico and all around the world is private label. I mean, that's the big, big game. There are some supermarkets that are very big on private label tortillas, like H-E-B and so forth. What are you seeing in terms of the market share trends, the regional players and the private labels in the United States, please? Thank you. Thank you for your question. As you very well point out, private label did have a increase at the beginning of the quarter, a significant increase. It's been winding down. It's not something that has been a direct threat to us, more so than probably other competitors that have more plain vanilla products in their array of offered products, with retailers. Right now our market share has been growing. The entire segment has been growing very healthy. Our market share still remains. Our market share right now is around 57% without private label, and with private label it's close to 60%. You know, we feel comfortable. We feel comfortable with that. We see our competitors growing as well, not in the same way we are growing. Right now, we've had a huge benefit because of our products and the quality of the products. The innovation that I was talking about has yielded great results and great growth rates and a lot of market share in that respect. We're very happy with the way things are right now, and as I said, if things continue like this, we could be looking into changing or adjusting our guidance accordingly. Got it. The market share figures that you mentioned, I mean, ballpark, where were they five years ago relative to what you're seeing right now? We were probably maybe four points below where we are today, maybe 53%. Okay. Without private label is. More or less around those numbers. Got it. You're still not seeing. I mean, the question that I'm trying to ask is the pricing actions that you're taking is not having a consequence of an erosion in market share. No. At this moment, you don't see. No. You don't see that happening in the remaining. Okay. I probably shouldn't use the word surprisingly, but given the economic conditions. The way the economy has been unfolding, we've actually gained market share because of the value add that our products are giving our customers. You know. Wow. We're extremely happy with the results. Well, congratulations. Congratulations. That's very impressive and I mean, if we would make an exercise, a blindfold exercise of any investor, and we tell them that this company increased prices, whatever, I mean, 20%, volume 5%, expanded margins, tell me which industry it was, I'm not sure anyone would get that is the leading tortilla manufacturer. Congratulations, guys. Thank you so much for taking my call. Thank you. No, thank you for your question, and thank you for being on the call. There are no further questions in the queue. I'd like to hand the call back to Mr. Fritz for closing remarks. Well, thank you all so much for your time today, and we hope to see you soon in any of the events or any other market, events that we participate in for the rest of the quarter. Thank you so much for your time again. Take care. Bye. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.