Good afternoon, everyone. Welcome to Organización Soriana's Third Quarter 2022 Earnings Conference Call. With us today are Mr. Rodrigo Benet Córdova, CFO of Organización Soriana, and Ms. Claudia González Romero, Head of Investor Relations of Organización Soriana. Together, they will be discussing the financial performance for the 3rd quarter of 2022 and providing a summary of the latest news on the company. At the end of the presentation, there will be a Q&A session to answer any questions you might have. We would like to mention that all lines have been placed on mute. At the beginning of the Q&A session, we will provide instructions as to how you may participate in today's conference call. Please note that the conference call may be recorded. I will now turn the conference over to Mr. Rodrigo Benet Córdova, CFO of Organización Soriana. Please go ahead. Good afternoon, everyone. Thank you for joining us in this conference call regarding the results of the 3rd quarter. Today with me, as you already hear, Claudia González, Head of Investor Relations, and together we will be going through some important information of what happened during this period. Let me begin with general comments regarding the top line of our income statement, where total revenues for the quarter reached MXN 41.5 billion, which represent a 7.9% increase versus the same quarter of last year. Basically resulting from an increase of 6.6% same-store sales. Also, because the positive impact of two store openings during the quarter and also by the higher real estate revenues due to a recovery in the occupancy of our real estate business. During the quarter, specifically in the month of July, our most important commercial campaign, Julio Regalado, was concluded. As we commented to you in the previous quarter, our bet this year was to invest in advertising through mass media across the country, but also with a high impact in other channels like social media through all principal platforms, which was very positive for our omni-channel strategy. A very important channel to engage with the new generation and future clients. Also, this strategy allow us to measure the reaction of our clients more immediately, react and adjust the proposal as needed, achieving greater reach and profitability, which managed to achieve a 7.9% growth in the promotional categories versus the result of the previous year. In addition to the last period of Julio Regalado, but also in the months of August and September, we carried out the Back to School and Independence Day campaigns. As well as the beginning of the exhibition of Halloween and Christmas seasons, with a great reaction and comments from our clients. Also, moving to a division store level, we saw a positive trend in the same-store sales, particularly in division lines like grocery, general merchandise, and prepared food. Basically, in these three lines, we obtain a double-digit increase in almost all the stores around the country. Superformat stands out, which each month of this year has been showing a double-digit growth as a result of significant changes made by the commercial in the store execution. By region, we saw a very positive performance in the cities of Tijuana, Torreón, Frontera, Juárez, as well as in the Pacific and Northeast regions, that particularly in this format, Soriana Súper, we have an important presence in those regions. The other format that stands out with a very good performance in City Club, which continues showing growth month by month since 2015, positive same-store sales and double-digit growth in total revenues for this quarter against 2021. For this quarter, in particular in this format, we have an important differentiation in our private and exclusive brand that lead us to an important growth. We saw an increase of 19% in the number of membership against last year. Likewise, we are pleased to inform you that our private brand, as one of our strategy pillars, continue showing double-digit income. Since we are making alliance with more and better brands that really make the difference for our clients with the new products in each division. Regarding our digital business, in this quarter, we achieved an increase of 100% in digital channels of soriana.com and 16% in the 3rd party's platforms. Likewise, we continuously keep improving our webpage and the Soriana App, which now has a completely different design, which provides an improved shopping experience with a redistribution of the spaces that provide an instant navigation across the site. In general, a more dynamic shopping process. We continue innovating our digital offer, and currently we are adding a new service, we are supplying doctor's prescription with our home delivery service. Also, for the very 1st time in the company, we are offering virtual medical consultations as part of the services that the client can obtain in our webpage. Now, passing and talking about our loyalty program, Recompensas Soriana. In this quarter, we increased 3% the number of clients who participate in the program in comparison with the same quarter of last year. Right now, we achieved 11 million clients that are actively buying in our physical stores and digital channels. This growth is mainly achieved by the execution of additional promotion with Recompensas in all our store format and a more aggressive affiliation plan. All of this is very important to Soriana as part of the strategy to make more robust database and personalized promotions to our clients. Going down on the P&L, the line of the gross profit in the quarter reached MXN 8.8 billion, which represent a margin of 21.4% that implies an expansion of 40 basis points with an increase of 9.7% against the last year. This increase is basically due to better commercial negotiations and, as we previously mentioned, the recovery in our real estate unit, [guess]. Regarding the operating expenses line, it showed an expansion of 30 basis points, reaching MXN 6.3 billion, which represent 15.2% over the income and an increase of 9.6% against last year. This increase in the personnel expenses is attributable mostly to a 7.8% of cost of personnel due to the filling of templates that were still incomplete last year as a result of the pandemic, and then additionally is increased by a bonus provision. Also, we are making a higher investment of 6.9% in advertising against last year and an increase, a very important increase, of 6.1% in the energy cost derived from less power generation in the wind parks that the company operates. Another item with a significant increase was maintenance that we are seeing this as an investment for the long term of the image of the company, in which we are trying to improve the store operation and provide to our clients a better shopping experience. Likewise, regarding other income and expense net during the 3rd quarter of last year, there was an extraordinary income due to collection of accounts for MXN 260 million, which represent the increase of 80% in this quarter in this line, and obviously have an important impact in the comparison of the EBITDA against last year. A consequence of all of these variations, the company's EBITDA in this quarter reached MXN 2.6 billion, which represent a 6.3% over the sales and a contraction of four basis points, also against last year, and an increase of 1.6% compared to the results of 2021. On the other hand, regarding the financial items, net financial costs closes the quarter in MXN 506 million, an increase of 92% versus the same period of 2021. This increment is product of a 15.3% reduction in the financial product, which also we have a higher financial product with usual engagement. There is a negative effect regarding the equity swap of 80% in comparison with the recognition of the profit at the 3rd quarter of 2021. It's important to remember that all of these variations, particularly in the equity swap, is not a cash variation. It's just an accounting register. Additionally, the financial expense shows an increase of 17% due to the combination of a 55% growth in the reference rate that was partially offset with a 23% reduction in the net debt and also a reduction in the rate that we obtained in the financial processes that the company did. At the end of the 3rd quarter, the company has a total debt of MXN 13.8 billion that represents a decrease of 23% against the balance of last year. Finally, the net income for the quarter reached MXN 967 million, which is equivalent to 2.2% over the sales and represents an increase of 23.2% against the same quarter of the previous year. Moving to CapEx, we are pleased to inform you that we have invested MXN 2.3 billion in the quarter, in which 19% has been allocated in new stores, 20% in technology, and 40% in remodeling and replacement of equipment, giving priority to those situations that we have to correct operation in the stores and the distribution centers. Also we invest around 14% of this amount in projects with our partner, Falabella. Also as part of this investment, all these store remodeling was completely concluded. Also we opened four new stores that are in the process of construction that will be opening in the following months, particularly in the city of Ciudad Victoria, in Cancún, in Torreón and in Chiapas. Moving on and talk about a little the progress with our partner, Falabella. In this quarter, the Soriana store business shows very positive results. Remembering that we have 10 stores in operation, and there are two more stores that will be open before the year ends. We have an important increase of 22% in the total revenues, and we continue seeing an important increase in volume month by month in the same-store sales. Also, in talking about the financial business, we continue seeing an important growth also in this line of business with Falabella. Remembering that right now we have 120 store models in which we operate, and another 259 stores in which we operate in a digital way. In this quarter, we had an increase of 34,000 new cards in the portfolio of Falabella. We are really close to end probably the following months with more than half a million total clients in the portfolio of Falabella Soriana credit cards. As a final remark, also we are pleased to inform about the progress that we made in our sustainable projects that we have implemented in the last two years. In which we are replacing all the lighting of our store for LED technology. That is part of the strategy to reduce the energy consumption. Right now we can say that we have 553 stores in which we already changed for this technology, obtaining an average saving of 57% in the lighting cost of each stores. Probably this is the most important sustainable program that the company already have, and we will continue investing into new technology, not only in lighting but also in refrigeration in the following years. Probably this is all the highlights of the results of the quarter. We can continue to the Q&A session in order to answer any doubt that you can have. Thank you very much. We will now start the Q&A session. If you have a question, please enter star eight on your telephone keypad. In case your question has been answered, you may cancel it by pressing star eight again. The 1st question is from Miss Camila Azevedo from UBS. Please go ahead. Hi. Thank you for taking my question. I have two questions for my side. First, if you could give us more color on the same-store sales by format and by region. My 2nd question is on Julio Regalado. Could you share your view on the customer engagement in his promotional campaigns versus the previous years? Thank you. Sure. Well, regarding the 1st questions, basically we have two important highlights. The 1st one is Soriana Súper, that is the format that probably was the beginning, that was involved in the commercial changes and the new strategy, that is showing very good results. Also, we said that we will be closing the year with double-digit same-store sales. Practically all months have results above the results of the whole company. The other is City Club. That City Club particularly has close to four years in which basically month by month continued growth. We are really happy with the performance of City Club. Particularly also in this year in 2022, it is practically for sure that it will close the same-store sales in a double-digit level. Talking about regions, in general, we are seeing performance very similar. If we have to highlight something in the positive side, we can highlight the recovery that we are seeing in central Mexico, particularly what we call Valle de México. That is, Mexico City, State of Mexico and Tlalpan, the surrounding states around Mexico City. In the other side, the one that right now worry us the most is Monterrey and Nuevo León, in which we have perfectly observed that the competition, probably the area in which the competition of one of our competitors particularly opened the major part of the stores in the last five years. Right now we are developing a specific plan to our recovery in Monterrey. In general, the performance is good, and we are seeing a recovery in all the regions of the country. If we have to highlight two, I will be highlighting the very good performance in central Mexico and the performance below the average in Nuevo León. Regarding the 2nd question about Julio Regalado, no matter that we have a 7.9% growth, particularly as a result of the promotion of Julio Regalado against last year, we are very far from saying that we are satisfied with the performance of Julio Regalado. It's a fact that our competitors each year react more aggressively against Julio Regalado because the importance of the campaign in the summer season. Probably what we can say is that we saw a better result in the general sales of the products, not the ones that are specifically in promotion. No matter that the products that were specifically in promotion grew 7.9%, the expected level of that growth because the reduction of prices that we made, it does have to be in line. We didn't have the Julio Regalado that we expected. Very clear. Thank you. Thank you very much for your question. Our next question is from Mr. Antonio Hernández from Barclays. Please go ahead. Hi, good afternoon, thanks for the space for questions. My question regarding the private label penetration that you have across the different formats. The other way that will be more dynamic, if you've seen any changing trends given the inflationary environment, and do you have a target on this penetration? Thanks. Sure. Yes, actually, I remember that probably the last board conference call I talked about that. Private label is one of the strategic pillars of the company, is one of the things in which we are investing the more. Actually, we are redesigning and making important the structure internally in Soriana in order to have a bigger and more important direction of private label inside the company. Actually, it's a specific goal that even we hire some advisors from other countries to help us to redesign completely the strategy of private label. So far, we are really happy with the performance that we have in private label. Particularly, I can tell you that the 1st quarter of this year, basically the private label growth more than the double than the... I mean, the same-store sales of private label growth more than the double than the same-store sales of the company. In 1st quarter, basically, we grew close to 17%. In the 2nd quarter, again, also around 16%. In this 3rd quarter, we are also in teens level. We are really happy with the result that we are seeing, and we will continue investing. The participation is still far away from the objective. Basically, we believe that in the medium term, the goal is to be close to 20% of participation. Obviously, in some format that will be much more easy to achieve. We can say right now that particularly right now in Soriana Mercado and particularly in Soriana Express, the penetration is important. It's already in teens level. We have a clear strategy that private label have to. With private label is private label and also private brands or exclusive brands that we are planning to achieve a double-digit participation of the total sales of the company. Okay. Thank you for that call. Are you seeing any shift in consumption trends, besides your internal strategy? Are you seeing maybe clients trying to shop more of these products because of the inflationary pressure? Are you seeing these shifting in consumption trends maybe just the last couple of months and in specific regions or formats? We start to see some shifts, not particularly private brands, but we start to see some shifts because of inflation. Probably the most important shift that we are seeing in the consumption is that they are buying more cheap protein. We are seeing a decrease in beef, and we are seeing an increase particularly in chicken and eggs. That makes sense. For our experience in other economic crisis in which the wallet of the clients have some impact, it will be very understandable to see in the future that they start to make a shift from commercial brands to private brands. Right now, I can say that this increase that we have not only in this quarter but in the last eight quarters, increase of the private brand is more attributable to a commercial strategy than to a problem of inflation. Perfect. [audio distortion] Thank you very much for your question. Our next question is from Ms. Irma Sgarz from Goldman Sachs. Please go ahead. Yes, hi. Thank you for taking my question. I was just curious to understand how you're thinking in terms of the general merchandise and apparel categories, how you're thinking about year-end sales and also the outlook for 2023. I think generally sort of conflicting data out there on in terms of how much demand is slowing down. It seems to have remained relatively robust into the 3rd quarter. I just wanted to understand how you're planning for the year-end and what you're actually seeing in the stores right now. A 2nd question regarding minimum wage increases into 2023, there could be yet another sizable increase coming. How are you thinking about sort of planning for those potentially additional expense pressures? Do you plan to pass them on to consumer prices, or do you have specific efficiency programs in place to offset that? Thank you. Sure. Regarding the 1st question, actually, we are really happy with the performance of general merchandise, apparel and prepared food. I think that there are three categories with higher margins that the growth seems to have that obviously help us to the total gross margin of the company. We are seeing a shift even in the mix between food and non-food of the company, mainly because of this. Particularly, we are seeing a very important potential of future growth. We just create... We have, like, seven months that we create a new direct office or direction inside the company of imported goods, in which Soriana is starting to increase their power and their skills to see products in other regions of the world and bring them to Soriana stores in order to have better costs, but also have a differentiated catalog, particularly general merchandise and apparel. We are starting to see a very good result. I can tell you that in some products, we are changing dramatically the mix of national product between imported goods that are not only giving us better product image in front our clients, but in so many cases, even we are achieving better prices. I think that going into the future, you will see Soriana trying and achieving a better mix between food and non-food. Particularly non-food is also happening the same. That is also a category with very high margins that is growing very importantly. We change completely that department, and we have a new strategy in which we are trying to be more adequate to the needs for the new requirements and for the new ages of the new kind of families that we are seeing in Mexico. We are seeing a good result from that. I think that we are not expecting. No matter the problems of inflation that we are seeing, we believe that Soriana have an opportunity to take market share in that category. That is a fact that in the past we doesn't have a very good performance on that. Obviously, we are entering to the most important period of the year for general merchandise and apparel. It will be Christmas, and particularly this Christmas will have Christmas plus Buen Fin plus the soccer tournament. It will be very different, very special. We are seeing that it will be a good close of the year. Regarding the 2nd question, yes, we are really worried because the environment that we are hearing about increasing minimum wages is important, and we are also seeing important numbers of increase. It's important to mention that basically the company we don't pay minimum wage no matter have an impact or indirect impact on the wages of our base of personnel. I mean, this is it would be very difficult to manage because on one hand we have the government and probably you hear in the news that Soriana is part of a program with the federal government trying to control and reduce inflation and we are actively working on that. If on the other hand the minimum wages in the country have an increase of double-digit or teen-digit in some cases we hear about that it will be practically impossible to control inflation. I think that even the government have an interest to maintain the inflation low. I think that they are also very aware that if they allow an important increase, it will be practically impossible to maintain the inflation in the target levels. I mean, we are just taking the provision in the budget for 2023 about that it can happen, and I'm ready for that. Thank you very much. Thank you very much for your question. As a reminder, if you have a question, please enter star eight on your telephone keypad. Okay. I think that we doesn't have any more questions, so, thank you very much for your time and for joining us in this conference call. No worries, if you have any other question, please, feel free to contact me or contact Claudia. Thank you very much. Have a good week.