Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Genomma Lab First Quarter 2022 Results Conference Call. At this time, all participants are in listen only mode. Following today's discussion, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. A replay will also be available shortly after the conclusion of the call. I'll now turn the call over to Barbara Cano of the InspIR Group. Please go ahead. Thank you, and good morning. We'll begin today's discussion with remarks from Jorge Brake, Genomma Lab's Chief Executive Officer, followed by Antonio Zamora, Chief Financial Officer. Our call will include projections and other forward-looking statements, and it's important to note that actual results could differ materially from those projected. Genomma undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or other factors. Investors are urged to carefully review various disclosures made by the company, including the risk and other information disclosed within the company's filings with the Mexican Stock Exchange. With that, I'll now turn the call over to Mr. Jorge Brake. Thank you, Barbara, and thank you to everyone joining today. Coming into this quarter, our objectives for the year were clear, led by continuous to strong execution of our strategy's pillars. As first quarter's results show, we are delivering on these objectives with net sales and EBITDA, net sales of MXN 4 billion and EBITDA of MXN 826 million, respectively, for the first quarter of 2022. A more than 13% and 11% year-on-year increase, which represented a record quarterly sales and profit high for our company with continuous sequential growth throughout Latin America. In particular, I would like to highlight our results for the U.S. market, where Genomma net sales increased by 22% compared to a year ago, to MXN 412 million. The investment we have made, the capabilities we have built, and the power of our new team within this market resonated in the first quarter's performance as we benefited from prior interventions and strategies which positioned us to continue our growth momentum. We delivered solid results across all three business segments, OTC, personal care, and beverages throughout all key U.S. geographies, with particularly strong performance in Puerto Rico and California, and within all key retail pharmacy chain customers such as Walgreens, CVS, and Walmart. Suerox, our healthy zero-calorie and sugar-free hydration beverage, showed outstanding growth during the quarter, reflecting record sell-out behind increased consumer trials via in-store demos and tastings, increased point of sale, enhanced displays, and distribution gained by direct store delivery partnerships across all chains and channels. The strong sales were also a reflection of our e-commerce efforts that is now 10% of our business in the U.S., predominantly within Amazon, with whom we doubled the business versus previous year. Further, it's important to note that Suerox is outpacing competitors in the mainstream U.S. consumer market beyond the Hispanic demographic. Turning to new product innovation, this continues to be an important competitive advantage for our company to differentiate and diversify our brands and strengthen our relevance with consumers. We began the year with robust performance and innovation initiatives, particularly line extensions in several products and with new category performance supported by aggressive external media campaigns and in-store marketing. Along these lines, Genomma saw exceptional overall e-commerce sales for the quarter through online retailers, including Amazon. During the quarter, we also strengthened our in-store media performance with a strong commercial strategy execution, reflecting increased distribution within the traditional channel. To touch upon highlights by region. In Mexico, first quarter sales increased 3% year-on-year, despite the industry's global commodity sourcing and supply chain challenges, which hampered Genomma's ability to take full advantage of the cough and cold and infant formula demand surge during the quarter. However, our differentiated strategies and new marketing campaigns such as for Tio Nacho and Groomen, as well as Cicatricure Gold Lift introduction into the serum segment, successfully mitigated some of these headwinds. Our Mexican industrial cluster progressed nicely during the quarter too. Genomma's personal care manufacturing plant shampoo and ointment lines began production during the first quarter, reaching approximately 500,000 bottles of shampoo and 400,000 units of ointment produced per month, in addition to the 7 million bottles produced within the plant isotonic beverage manufacturing line, which achieved an 85% efficiency level during the first quarter of 2022. Genomma's pharma semisolid manufacturing line achieved an 85% efficiency also during the quarter, running at a more than 5,000 tubes per hour rate of production. Genomma's Latin America first quarter 2020 net sales grew 20% year-over-year, with a 23% EBITDA margin. We saw solid top-line growth and margin growth in Argentina, Colombia, Chile, Brazil, and Peru, driven by successful product launches and line extensions in these markets with a strong e-commerce channel performance, as I have described previously. With that, let me turn our call over to Antonio, who will review first quarter financials with a related discussion. Thank you, Jorge, and good morning, everyone. As Jorge noted, first quarter results reflect the continuation of the strong performance we delivered for the prior year. We have maintained our focus on growth, operational execution, and on the pillars which have driven our success. Starting with the enterprise as a whole, first quarter 2022 consolidated net sales reached MXN 4 billion, a 13.2% year-on-year increase. However, these results were partially offset by macroeconomic headwinds with local currency depreciation. First quarter EBITDA increased by MXN 102 million year-on-year to reach MXN 827 million with a 20.6% margin. That represents a 20 basis points year-on-year increase due to increased operating leverage through increased sales, a favorable product mix effect, and our continued focus on cost and expense controls. During the quarter, we continued to successfully pass through cost increases to mitigate the inflationary pressures Genomma Lab and other peers continue to see throughout our markets in the world. Turning to Mexico, as Jorge had described, first quarter 2022 Mexico net sales increased by 3% year-on-year to close at MXN 1.6 billion with a 20.2% EBITDA margin for the quarter. One-time investments we made during the quarter to increase in-store visibility to support new product launches softened this margin expansion but were again partially offset this quarter by decreased non-recurring expenses at Genomma Lab's new industrial cluster. As Jorge commented, fourth quarter U,S, net sales increased by 22.5% to reach MXN 413 million with strong beverage performance at a more than double year-on-year increase in Suerox sales for the quarter. As noted, first quarter 2022 U.S. sales also benefited from strong e-commerce channel sales. Latin America net sales for the quarter grew by 20.4% year-on-year to MXN 2 billion, where successful product launches and line extensions with strong digital channel performance in Argentina, Chile, Brazil, and Peru led our strong quarter for this market. Local currency depreciation in some of these countries where we operate partially offset these results. Turning to profitability, first quarter 2022 gross profit increased by 15.3% to MXN 2.5 billion with a healthy 110 basis points year-on-year increase in gross margin. Again, due to a favorable sales mix and with a higher operating leverage resulting from incremental sales. Working capital was adjusted during the first quarter 2022, and the cash conversion cycle ended at 99 days at the end of this quarter. Genomma closed the first quarter 2022 with a leverage ratio of 1.2x net debt to EBITDA. Again, 1.2x net debt to EBITDA, and MXN 1.6 billion in cash and cash equivalents at the quarter's end. This is a 15% year-on-year decrease in financial leverage as we continue paying down our debt during the first quarter of the year. Net financial debt amounted to MXN 3.7 billion as of March 31st, 2022, and that represents a MXN 647 million year-on-year decline. During the quarter, we repurchased 2,208,940 shares, which represents an investment of approximately MXN 43 million. As our results demonstrate, we continued our solid momentum heading into this year, setting the stage for our strong outlook despite potential headwinds that remain challenging to predict at this moment. Finally, you'll note within our press release that in light of recently disclosed events at our Marzam affiliate, Genomma has recognized a retrospective non-cash impairment in its investment in Marzam for the 2018-2020 period. This is directly aligned with our unwavering focus on transparency and our prudent accounting approach to ensure the relevance and validity of information contained within the company's financial statements. Information related to said impairment can be found within the detailed notes linked to the earnings results press release, which we disseminated yesterday after the market closed. With that, let me turn the call over to your questions. Thank you. Ladies and gentlemen, we will now begin today's question and answer session. If you would like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate your line is in the 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. One moment, please, while we pull for questions. Our first question is from Alvaro Garcia with BTG. Please proceed. Hi, gentlemen. Thanks for the call. Two questions on my end. The first on your cash position, your net debt to EBITDA improved significantly quarter-over-quarter. You're down to the low ones now. Congrats on that, by the way. I was just curious, you know, how we should think about after having seen a dividend at the end of last year, how we should think about your plans for that cash going forward, whether we should expect, you know, more dividends, maybe some more buyback, et cetera. My second question is. Go ahead. Yeah, go for it. Okay. Hello, Alvaro. How are you today? Thank you for your question. I would make a quick comment and then allow Antonio to go more into details. One thing that I like to highlight and that we highlighted in our board meeting a couple of days ago is that from a cash situation as well as our progress is remarkable. I think our cash situation is very healthy. It continues to improve, and that has allowed us, as you said, to pay debt significantly in 2021 and also pay dividends for the first time in the history of the company. That is something that we should continue seeing in the foreseeable future, given the projections we have for the continued growth of the business and the continued improvement in the way we manage all the different key drivers of cash. Antonio. Thank you, Alvaro, for your question. You know, building on Jorge's comments, you are totally right. The company has shown particularly this quarter, but as you very well pointed out, we paid a dividend on December, MXN 400 million. When we did that, we also announced that most likely there was going to be another dividend this year. What was shown during this quarter is that we were able to generate cash, lower our financial leverage, pay debt, and most likely there's going to be another dividend. There's going to be more buybacks. The company's CapEx is going to be significantly lower. Basically, the plant is almost finished, just a couple of fine-tuning and commissioning of certain lines. As you've seen during the quarter, you know, the CapEx required is very low. That's an excellent question. I would say, yeah, expect dividends, buybacks and obviously investment in our organic growth and new categories. So I think that's good news. Thank you so much for bringing that question to us. Great. You have another one. Yeah, just one second one on Marzam. I understand it's a non-cash impact. It was a significant move downward. I was just wondering, and it is what it is, right? I was just wondering if you could remind us what sort of relationships exist today between Genomma and Marzam, if there's any sort of intercompany debt, any outstanding debt with them that you're worried about, how your relationship stands today would be very helpful to understand potential sort of risk with this asset. Thank you very much. Again, a quick comment before Antonio gives you more details. This is an overall comment that I have been making the last three and a half years of my tenure with the company. One of our key missions is to take this company, as you have heard me say, to the next level. The next level means not only in sales and profits and innovation, in culture, in productivity, but also in transparency, also in adopting the best practices to do always the right thing for our investors and for our employees and our partners. This is one step, one additional step into that direction. Antonio will explain to you more details. Thank you, Alvaro, for this question. First of all, we must address, you know, talking about the relationship between Marzam and Genomma. Many years ago, the company relied in a more important manner with selling to pharma wholesalers, especially in Mexico, many years ago. Today, we are multi-channel company. As you know, we've developed e-commerce and the traditional channel via business partners. We sell to pharmacies, we sell to multi-channels. Our reliance on a major pharma wholesalers is not what it used to be. It's very limited, and that's also the case in Marzam. That's from a relationship point of view. Marzam is another client, just like many others. From an intercompany point of view, there's no intercompany debt whatsoever. There's no guarantees or any on any loan that we have not provided any financing to them. Marzam is basically a passive investment that we have, but there's no liabilities or financial support whatsoever. I don't know if this answer your question, Alvaro. Yep, that's very clear. Thank you very much. Our next question is from Vanessa Quiroga with Credit Suisse. Please proceed. Thank you very much for taking my question. I have a follow-up on Alvaro's question about use of cash given the healthy balance sheet that you're having. What's your preference in terms of dividend distribution versus share buybacks? The other question I have is about Mexico. What led to the relatively soft growth this quarter, and what do you expect needs to happen? What do you think needs to happen for the next quarters to accelerate, and any outlook on pricing strategies? Thank you. No, let me take the second question, thank you, Vanessa, and you will take the first. On Mexico, as I said in my remarks, Mexico grew 3% despite two factors. Two factors that are part of the crisis we are living on a global basis from a supplier standpoint. The shortage in consumption in cough and cold that actually was a short cough and cold season by the way, in both the U.S. and in Mexico, the cough and cold season basically ended in late January, much shorter than normal. The fact that we had a surge, a big surge versus previous two years in which due to COVID, the consumption of cough and cold product was very low, we were not able to cope with the increase in demand. Because as we were doing in the past, you could correct your forecast, request and produce more product, et cetera, quickly. This time we couldn't do it because the supply chain, the global crisis, the scarcity of some materials do not allow you to react that as fast as we used to react in the past. This applies to all industries and all companies. Cough and cold could be much better. Together with that, the same issue affected the supply of infant formula. Europe is being affected by raw material issues, supply issues in many industries and in many fronts, and in particular the infant formula products have different ingredients that have been issues in the last couple of months. That also affected specifically Mexico as Novamil is now a big part of our business too, a more relevant and important part of our business too. There is nothing new. It's basically that on an overall basis, our business continues to be very solid in Mexico. All other categories, including personal care and beverages grew double-digit. We continue growing shares in most categories too at the same time. I would say that our position in Mexico, it has not been as solid as it is today, and we'll continue making progress in the year. I feel confident that as we go away from these particular issues regarding the season of cough and cold and the Novamil thing, we will be back to the high single digits, which is our goal. Tonio? Thank you, Vanessa, for your question. It's a very interesting question about, you know, now that Genomma is gonna be generating more cash, what is our preference? When you're talking about preferences, there's always. It's a complex question because some investors, we know that some investors like cash dividends. The reason they like cash dividends is that it shows that the company has discipline, obviously prudent management, and that we are focused on cash. Because some investors value that, you know, cash dividends, we are gonna be paying cash dividends to reward those investors that prefer cash dividends. Personally, I think that the share price is very attractive and, as everybody knows, we've been buying shares for quite a while and will continue to do that because we think that's very attractive. Again, we think that it's prudent to pay a cash dividend for those investors who prefer cash, and also to do buybacks for those investors who think that's more attractive, and also to lower the financial leverage. I know that some people may say, "You are at a very attractive 1.2 x net debt to EBITDA." That's right. On the other hand, we know that interest rates are going higher, so if we lower our financial leverage, we can continue expanding net income for a while. Also, we want to take, as we have, this prudent approach to finance internally our organic growth, which has been, as you've seen for 13 consecutive quarters, really good. Entering new categories sometimes require money, especially in terms of inventories, accounts receivable, et cetera. We will continue funding that. Also, consider some inorganic growth or strategic partnerships for the future. I would say, Vani, it's a combination of a little bit of everything. That again we reflect that we are a more prudent, a more mature company, and that we have reached that milestone, you know, at the end of the completion of the manufacturing facility, we said that the CapEx would be lower and we would be generating more cash. We want to reward our investors for their patience and their trust on the company. I don't know if I was able to answer your question, Vanessa. Yes, Antonio, very clear. Just a follow-up on Mexico, Jorge. Do you have any comment on pricing strategies going forward? Yes. That's a very important point, too, very relevant and based on the current situation. We discussed in the last few weeks when we met, we are being very disciplined and responsible with our pricing strategy in different fronts. As all of us know, the cost of raw materials and the cost of commodities and everything is impacting the inflation numbers we are seeing. We are not an isolated company, so we are going through the same issues that all companies are going through. We have been taking pricing up accordingly. For instance, in February, we took price increases also to make sure that we continue following up the trends in cost increases. We are doing that in all countries. I say disciplined approach because we are very disciplined in following up what is going on with the costs, trying to negotiate, trying to buy ahead of time or reflecting in pricing what is happening with costs. On the other front, this is not necessarily affecting the business because of two reasons, I would say. One is, everybody's doing it, so in overall terms, all competitors and all companies are going through the same, so they also have to be aggressive taking periodic price increases. That is not only once a year, it's probably once, one to 3x a year. Second, because I would say that Genomma brands are much better prepared than in the past to face these type of issues. We have today better brands, better quality in our products, better communication, better images, better equities, which is basically something that protects us or protects our brands from being affected by pricing moves, because the consumer appreciates what we have done with the brands and is more open and flexible in terms of their preferences vis-a-vis pricing. Thank you very much, Jorge, Antonio. Very clear. Thank you, Vanessa. Our next question is from Rodrigo Alcantara with UBS. Please proceed. Hi. Good morning, good afternoon, Jorge, Antonio. One follow-up on Marzam debate here. Just curious here, I mean, clearly not an asset that is prized by the market as a potential asset for sale. Just curious on the passive investment phrase you mentioned, Antonio. Is it fair to think this perhaps we could be seeing you selling the remaining stake you have at Marzam and paying that as a dividend? Is that a possible realistic scenario for 2022, 2023? That would be my first question. I have another one for Jorge. I would say that in the case of Marzam, just in two seconds, that all options are open, Rodrigo, because as you know, we're business people and we are smart business people, we believe. Based on what we have been doing in the last few years, as you know very well, after recognizing what we are recognizing from several years ago, the company would be, or this would be readier for any option that makes sense in the short and the mid-term. We are assessing all of them. Antonio? Thank you, Rodrigo, for your question. I think that what we need to highlight as we did in the technical note and the press release, Marzam is a non-strategic investment for the company. We don't manage that company. We don't operate it. We are just a passive investor. In that regard, I think your question basically says, is that the best investment that you could have to create shareholder value? The answer is no. Of course, as Jorge was saying, we should analyze all alternatives and all options to maximize shareholder value. What you mentioned is a possibility. Yes, it's a possibility. It could happen, but there are other options as well. For the time being, I mean, we just need to say that it's a passive investment. It's not strategic. We are mostly focused on the strategic. Pillars of the six pillars, and Marzam is not one of them. It's something to consider, to analyze, and it's something that we are working on the different alternatives. We'll keep you posted as things evolve. Sure, yeah. Well, thanks for that. Just you know thinking out here. My second question here would be for Jorge on the market share trends. You mentioned Suerox is gaining share. Was discussing with you yesterday on the grooming side gaining share from the big companies. Just curious Jorge you know based on your experience with P&G. I'm just curious on the possibility of or in which other categories is Genomma gaining market share from the large from these big companies that perhaps any example that you can highlight during the quarter. That would be my question. Yeah, good. Very good question, Rodrigo, because we just discussed this in the board meeting a couple of days ago, and of course, with our people. We are very pleased with the results of those three businesses in which we just entered or growing aggressively, although not new Suerox, but for us it's kind of new because we are expanding the brand for the first time ever after a few years of success in Mexico. I will leave you with a few examples from those three quickly to answer your question. Groomen, you mentioned Groomen. We're very pleased with what we are doing with Groomen. We are very pleased with the way we have been competing against the big guy in the last year and a half, more or less, that we have introduced the brand. Actually, 2021 was the first full year for the brand. To give you an idea, maybe you remember that we decided from a strategic standpoint to enter first the system segment. The system segment is the traditional razors that you know is sold everywhere in the modern channel. Our decision was, let's start with the system segment, only in the modern channel, which means big retailers in Mexico only. There we have already achieved the market share we wanted to achieve. In three years, we have done it in a year and a half. Outstanding result by the work that we have been doing in that segment. We are a clear number two brand now in that segment based on the choice we made, as I said, out of four or five brands that are in the market, we are number two now in the modern channel with a share level very close to double digit, which is the goal that we had for three years. Now based on that success, as I think I said a quarter ago, we decided to continue expanding the portfolio, so going beyond systems to disposables in the traditional channel and replacements. As we speak, we are completing the portfolio and expanding more aggressively into other channels, including the traditional channel, the pharmacy channel, et cetera. With that said, that is a brand that is very promising, despite of the fact that we are competing against a superb competitor, as you know. We also decided to go to Chile. In Chile, we've been selling the brand for six to seven months, and it's doing even better. The decision of expanding the portfolio in Chile, we are making it quicker than in Mexico, and we'll continue doing so in other countries as you can imagine. Novamil is the other new brand or key strategic alliance that this is doing very well in Mexico. It had an excellent 2021. Unfortunately, now the supply chain issues in Europe are affecting us a little bit. We don't think that that will be an issue for the year, but it had an excellent 2021. Based on that result, based on the preference of the pediatricians and the mothers, now we are also gonna be expanding to the Andean region mainly as a first next step. Finally, Suerox, which is kind of a combination of all previous brand that we had in Mexico, but a new brand for Chile and the U.S., is also doing very well. Our main issue with Suerox is that we need to build more capacity, manufacturing capacity now. We are restricted by that, and we are working on that very quickly. You will see hopefully an announcement in a few weeks of a plan to expand that capacity with some key partners. To tell you the truth, what we are doing in the U.S. is amazing, especially in Amazon and other key retailers and the traditional channel. We'll continue growing. In Chile, the brand is doing very well too. There's another pilot market that we have. Based on those results, we will continue expanding the brand also to other countries. Yeah, that's very, very interesting. Congrats on the sales growth report. Rodrigo, another way. Thank you for. Yeah, just to close the comment, but that's why we included a new pillar in our strategy. As you know, the new pillar that is called strategic alliances because alliances from an innovation R&D standpoint, from a manufacturing standpoint, alliances from all of those. Different fronts that make sense to take advantage of the capabilities we offer and putting them together with the capabilities that these partners bring to the table produces the one plus one equal three without working capital investment from our front. That's something that is proven to make sense and is proven that as a pillar that will be key for our growth in the future. Excellent. Thank you very much for that, Jorge, and have a nice weekend. Our next question is from Ulises Argote with J.P. Morgan. Please proceed. Hi, guys. Thanks for the space for questions. Just one quick one on my side. I was wondering if you can give us some color on what's behind that other income that you reported of MXN 61.2 million. Thank you. Thank you, Ulises. That is a one-time income. It's a one-timer. We won a lawsuit, so that was worth MXN 55 million. So that's why it's there. Now, what did we do with that money? We reinvested back that money into the market in point of sale activities, more furniture, basically to expand our presence and to build capabilities. So it was reinvested back. It was a one-time income, and we also made a one-time investment during the quarter that offset that. I don't know if this answers your question, Ulises. Yes, Tonio, that's perfect. Thank you very much. Thank you. Our next question is from Bernardo Malpica with Compass Group. Please proceed. Hi, Antonio. Jorge, thank you for taking my question. My question is regarding margin and a little bit more about the one-time expense. I understand the margin was somehow affected by the one-time investment to increase in-store visibility. Now if we hypothetically took this investment out, would we have had an EBITDA margin more similar to the fourth quarter of last year? Just to understand a little bit more what we can expect in an EBITDA margin going forward. Thank you. Thank you for your question. As I said, it was a one-time gain that we have during the quarter. We invested that one-time gain basically almost in the same amount. Now, having said this, it's important to know that due to the labor reform that was enacted in Mexico last year, there's a little bit of additional costs basically in payroll, but it's not significant. I just want to be very clear, it's not gonna be exactly the same number as last year, but it's going to be very close. What we are working this year is on expanding margins. I mean, obviously, what we are working this year is on expanding margins. Part of the plan is helping us on that, but there's also another a number of initiatives that are helping us to become more productive. At the same time, we must address the fact that commodity inflation is there. It's for everybody. It's in every country. We're coping with it as well. To be very specific with your question, if we take the one-time gain with the one-time investment, it would be very close to what we used to have previously. Regarding margin expansions, obviously, there's cost inflation, and obviously we are taking pricing when needed. Obviously we are also working very strongly on expanding margins. All of those factors have to be taken into account to answer your question. I don't know if I was able to answer your question. Yeah, that is very clear. Just one more question. I mean, I don't know if you have a specific number, but do you have a number as to what percentage of your sales come from e-commerce and how the channel has evolved throughout the last periods? I mean, I know it has been growing significantly, but do you have a specific number of how many of your sales end up going through this channel? Yeah. Bernardo, two points there very quickly. One is just the background. You remember that two years ago, our sales in the e-commerce channel were basically new. We have started aggressively supporting this new distribution channel, quote-unquote, in 2020. In early 2020, we have developed our business from almost zero to about 6% of our total business today. It depends on the category. That is company-wide. If you think about OTC doesn't have that attraction with consumers to buy via e-commerce. OTC is a little lower than that, while personal care and Suerox are closer to 10%. There are some countries like the U.S., Chile, and Colombia, that are already at 10% of the total business, total company, total country. That's our north. Our goal in the next couple of years is to take the company to those levels overall, with probably OTC close to 10% and personal care and beverages developing much higher than that. We continue to support in this channel. We truly believe that this is one of the things that still will bring additional business to the company as the traditional channel is doing, as other new channels that we have been entering in different countries are doing. Perfect. That is very, very clear. Thank you. Yeah. Thank you, Bernardo. Our next question is from Ben Wilson with Lazard. Please proceed. Yes, thank you very much. I just wanna get an update on your two newest manufacturing plants, the OTC and the personal care. How far are we to full utilization on these plants? Also back in 2018, when we were first talking about these new plants, you had mentioned an expectation of about 700 basis points EBITDA improvement from synergies of which maybe a few hundred of that would be returned through, you know, reducing prices in order to increase market share. I wanted to get an update on that guidance that you had given, you know, four years ago, if you still stand by that, if you think things have changed. Jorge Brake? Yes. Thank you, Ben, for your question. Yeah, the guidance that was provided as the business case for the manufacturing facilities is exactly that. The 700 gross, and we would reinvest back around 50% of that. Between 300-350 basis points of margin expansion are expected once the manufacturing facility is complete and running at full capacity. Now, obviously, we have two different plants. One is a personal care one, the other one is the pharma one. In the case of the personal care, there's five lines there. The first line, which is the isotonic beverage, is fully operational, running at between 88%-92% efficiency. It's quite good at this moment. The savings are very much in line with what you described. Actually, a little bit better in the case of that line. So that's encouraging because that means that you know, that's good news. Obviously, there's other four lines in that plant. There's two lines that we have already started to manufacture you know, the first batches. We are beginning this ramp-up and the learning curve very much in the same fashion as the isotonic beverage. So it's gonna take four to five months to reach the efficiency level for those two lines. It's just the typical learning curve and ramp-up period. Then there's two other lines that the commissioning will end most likely during this second quarter. Savings from the personal care will be you will start to see that somehow during the second half of this year, depending on the ramp-up progress on each line. I just need to say as a caveat that the savings initially when we consider this, nobody thought about this commodity inflation that we are facing in the world. We need to take that into account. Part of the productivity that we are achieving is helping us cope with that inflation so that we don't need to raise prices as much, and we can gain more volume and market share. Generally speaking, I would say that's a timeline for the personal care. Before I go into the other parts of the manufacturing facility, I don't know if this answers your question for the personal care plant then. Yeah, that's fine. Please. Excellent. We have the distribution center, which has been operating for a number of months, and the savings are being achieved. We used to lease some facilities. We don't do that anymore. The savings are there. Obviously, that's a small amount of the investment, but I just wanted to highlight that as well. In the case of the pharma plant, as you've seen, you know, in the pictures that we've shown, about the progress, the plant is basically there. It's complete. It's more of a regulatory, the regulatory barriers and administrative processes that are not allowing us to produce at the volume levels that we want. As you know, we already have GMPs or good manufacturing processes, the certificate for solids and semi-solids for that plant for Mexico only. We are producing, and we are selling in the domestic market, but we need to harmonize those GMPs with those of other countries where we are exporting. For that, we need to allow those authorities to come down to Mexico, visit the plant and grant us those GMPs as well. That's a process that needs to take place, and we rely on the timing of these authorities to come and visit the plant. The good news is it's gonna be a lot faster than what it took us to get the GMPs for Mexico, but still that process needs to happen. On top of that, we also need to get GMPs for the liquids line, both the oral and the coating line and a number of other lines. Those permits or those certificates. We're basically relying on the Mexican authorities and the time it's taking longer. This year, I think that the impact from OTC is going to be more limited. We rely on the timing from the authorities. We expect some progress to be reported, probably by the end of Q3 on this regulatory front. Unfortunately, this is something that is not totally under the company's control. As soon as we get that, you know, the production is going to be there. Having said all of this, it's important to highlight that the fixed expenses of the pharma plant are already embedded in our financials. Once we start operating there, the marginal cost increase is going to be raw materials, a little bit of energy, and not that much because, you know, most of the fixed expenses are already there. It's going to be a driver for margin expansion, but we need to wait, unfortunately. That's the state for the pharma plant, Ben. Just to clarify, the license you received last year is not for everything. It's only for certain product lines, and you need some more in order to progress. That is correct. We received for solids, basically to manufacture pills, semi-solids, it's creams and ointments, obviously pharma grade. We have the GMPs for those lines. We still don't have the GMPs for the topical liquids and the oral liquids and for the coating line, which is again, pills, but those pills are coated. It's frustrating for us as much as it is for you. You know, we rely on the authorities and that's it. This is one of the reasons why, you know, pharma profitability is higher because there's this kind of barriers to entry. It's not so easy for everybody to enter. I mean, we're making progress, but not at the pace that we would like to have. Thank you. Thank you, Ben. Our next question is from Rahi Parikh with Barclays. Please proceed. Great. Thanks so much. Some questions have been answered, but the general question is, given the global supply chain cost challenges, could you talk about maybe more color on the benefits of early stage, on for you for early stage for kind of lowering your third-party suppliers? Just more color around like the recent announcement you guys had last year on that. Antonio? Yeah. I mean, yeah, that's a good question. As most of you know, we used to rely on a highly fragmented supplier base. We used to have more than 300 suppliers, third-party contractors for the different categories where we participate. Sometimes for a specific product or categories, we used to have three, four or even five different companies who would supply us. The implication from that is obviously low economies of scale. That is the rationale or one of the benefits from the plant that was part of the business case. While you do that, obviously there's some transition process that needs to take place, and that's where we are depending on each category. For example, in the case of beverages, we initially thought that we were going to in-source a big portion of the production for Suerox. The good news is that Suerox is, as we say, it's flying, it's growing double digits very fast. We could not in-source all the capacity. Actually, we ran out of capacity. We currently have our third-party contractors and our own manufacturing line running at a very high levels of utilization, and we need to expand. That's good news. That's the specific of that category. I don't know if I was able to answer your question or do you want me to go into it? Yes. No, no, that was perfect. Thank you so much. Thank you. Our next question comes from Juan Ponce with Bradesco BBI. Please proceed. Hi, Antonio. Jorge, thank you for taking my question. I have a general one. How has the relationship been with the health authorities now with your new plants, the approval process, et cetera? Are they willing to work with you guys? How has that relationship been? I can tell you that much better than in the near past. As perspective, you may recall that the management team of COFEPRIS, the health authority in Mexico, was changed twice in two years. You know, starting with COVID and after COVID. The new management that has been in place for a few months is, I would say in my opinion, much better than the previous ones. It's much more professional. They're trying to do their best in terms of optimizing how COFEPRIS works, automating many of the processes, trying to accelerate the response to the industry in overall terms. I see a much better situation in the health authority and relationship with us also much better. We are in much closer contact through associations, pharma associations, also as a company by itself. We have an open channel of communication with top management there. I would say that much better than in the past. Great. Thank you very much. Yeah. I think that was the last question. Yes. There are no more questions at this time. Mr. Brake, I'll hand it back to you for closing remarks. Thank you to all of those joining the call today. This quarter's diversified results reflect consistent progress against the themes and pillars we have established as our guidepost for sustainable growth. Our focus on execution across our business will continue to drive our performance as we build upon this strong start to 2022. Thank you very much and have a great weekend. Bye-bye. Ladies and gentlemen, that concludes Genomma Lab's first quarter 2022 results conference call. We would like to thank you again for your participation. You may now disconnect.