Good afternoon, everyone. Welcome to Organización Soriana's 4th quarter and full year 2022 earnings conference call. With us today, Mr. Rodrigo Benet Córdova, CFO of Organización Soriana, and Claudia González, Head of Finance, who will be discussing the final performance for the 4th quarter of 2022 and provide 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 this conference call is being transmitted simultaneously in Spanish and English. During the Q&A session, we will be responding to questions in Spanish first, followed by those in English. At the beginning of the Q&A session, we will provide instructions as to how you may participate in today's conference call. All telephone lines have been placed on mute as to prevent any background noise. Please note that the conference call may be recorded. I will now turn the conference over to Mr. Rodrigo Benet. Please go ahead. Good morning, everyone. Thank you for joining us in this conference call, where together with Claudia González, Director of Financial Planning, we will review the financial results for the fourth quarter of 2022 and the figures for the full year. Undoubtedly, 2022, after two years of the pandemic, was a year full of economic challenges at a global level, facing high levels of inflation, increased costs of operation, production, energy, and finance, which although putting pressure on results, we always find a way to contain the effects as we will discuss later. This allows us to say that the most important challenge we face was to meet our customers' expectations, not only in physical stores, but in terms of omni-channel and growing offerings. Market demands are becoming more precise, especially as e-commerce has found excellent conditions for its expansion in recent years. That is why we have actively joined in responding to strategic requirements using artificial intelligence, data analysis and omni-channel offerings. Therefore, over the past two years, we have made significant investments in systems, equipment, personnel, and consultants with extensive experience in the digital businesses, who have provided us with tools to continue evolving towards a profitable and sustainable experience. In 2022, digital businesses grew 5 x more than sales in physical stores and 3x the digits in regions such as the Southeast, West, Pacific, Mexico Valley, and Gulf, which encourages us to continue developing new ways of delivering products to customers in the shortest possible time and in the way they want to acquire them, whether physically in any of our 801 locations through the website, app, external platforms, or even by phone. We also started this year with the implementation of self-checkout models that will streamline the purchasing experience in our stores, currently operating in 37 locations. Although e-commerce has been growing steadily, sales in physical stores remain our main driver, with a focus on operations and strategic organizational changes that lead the way to further improving results. Turning directly to the company's result. In the quarter, total revenue was MXN 45.289 billion, with growth of 5.8%, as well as MXN 166.03 billion annually with an increase of 6.9%. Regarding performance by format, in 2022, City Club celebrated 20 years in which it has consolidated a base of 1,185,000 members in 37 clubs, which we celebrated with the raffle of a Tesla car and great promotions. We joined the Cornershop platform starting in September 2022. For the first time, City Club held the Flavors of Canada Fair, which reaffirms the commercial relationship we have built with the Embassy of Canada in Mexico, promoting the marketing of differentiated high quality products in our clubs. We closed the year with an 8.2% increase in sales at same store locations and 11.3% increases in total store, as well as a 12% growth in memberships, redefining its product catalog and enriching the offer for both individual and businesses members, hotels, restaurants, and cafeterias, highlighting divisions of known edible groceries, fresh produce, and foods. Similarly, we had excellent results in loyalty to our own brand, reaching a growth of 38% and a penetration of 10.1%. The Súper format also had remarkable performance compared to other formats, with double-digit sales growth at same-store locations, particularly in the edible and non-edible grocery divisions, with a 10% share in private label and excellent results in the Gulf, Pacific, and southeast regions of the country. On the other hand, the Hiper format experienced a 6% increase in sales at comparable store, achieving excellence performance in groceries, variety, and food, thanks to a higher promotional investment with a regional level plan and a 7% increase in private label products with a 12.3% market share. One of our pillars in executing the 2022 strategy was private label products. Thanks to this, we found a way to support our customers' economy by offering excellent quality products at an accessible price. This allowed us to maintain basic go-goods at unbeatable levels in the country with excellent results in the low price formats that brought us significant sales increases in areas such as the Juarez and Tijuana borders, the West, the Pacific, and the Southeast. We contained the impact on consumption and achieved the loyalty and permanence of our customers by offering differentiated products at the best price without neglecting profitability. During the year, we consolidated one of the most ambitious projects in the wine category, focused on offering a unique and exclusive portfolio, which was achieved through the direct import of the most renowned wineries and vineyards. We have great commercial partners, which we achieved through long-term strategic alliances such as Grupo Faustino, who has solid portfolios of great brands like Faustino and Portia, important references from the most representative regions such as Rioja and Ribera del Duero. We also achieved exclusive with Viña Carmen, a great producer of Chilean wine, with which, in association with Frida Kahlo Corporation, we created a unique line, Frida Kahlo by Viña Carmen. Additionally, we strengthened our portfolio with brands like Toltén, Carmen, and Seduce from different price segments, which have been very successful in our stores. We also obtained exclusively with Bodega Zuccardi, one of the major wine producers in Argentina, located in Mendoza, generating a great differentiation in the category with it. We represent brands such as Estancia Mendoza, excellent quality and price options in this segment. Regarding the real estate business, we closed the year with a 16% increase in revenues and an 83.7% occupancy rate. The recovery of traffic in commercial plazas, small businesses with confidence in starting up and institutional clients expanding geographically was evident. This year, we also reinforced the mix of categories depending on the store format in different plazas, achieving a balance that boosts daily traffic, as well as strategic alliances with different teams with national presence that help us place 13,700 sq m resulting from cuts in sales floor in seven locations such as Cimatario, Torrecillas, Maravillas, Mazatlán, Félix, San Juan de Aragón, and Juendo, generating excellent traffic results. In the quarter, gross profit reached MXN 10.433 billion, representing 22% of sales without a 10 basis points expansion and a 6.5% growth. Annually, gross profit reached MXN 36.682 billion, representing 22.1% of sales at 20 basis points expansion and 8% increase compared to the previous year. Moving on to expenses, despite increases during the year in the most important areas, we managed to achieve stability in the personnel cost area. We had an increase lower than inflation, as well as in energy costs, where rate increases were mitigated by strict control of key kW consumption and compliance with the implementation of energy efficient consumer programs that we have for three years regarding the challenge to LED lighting and the replacement of low consumption operating equipment. Another line with a significant increase was advertising, given the increase in activity in mass media and obviously As you know, three years ago, we began with the use of new refrigeration, LED lighting, and other equipment. Moreover, another line which saw an important increase that we believe to be part of the market recovery strategy of the business was the increase in advertising, which allowed us to have a greater presence in the mass media as well as social media in order to continue positioning our organization. From the latter.[audio distortion] The EBITDA of the fourth quarter is support, MXN 1,055 million for a margin of 9% and an increase of 2.7% versus last year. Annually, MXN 12.7 billion were reached or 7.6% above the earnings and 3.1% versus last year. As for the financial statement or financial costs, MXN 309 million in the quarter for a decrease of 25% versus the same quarter of the previous year, particularly due to the good performance due to financial strategies in the financial product of the company, which had a growth of 279%. Annually, the financial cost closed in MXN 2.9 billion for 1.2% over the company earnings, being a reduction of 10 basis points versus previous year with only a slight growth of 2.5%. This comes from the adequate management and the comprehensive financial management of the organization. Finally, this led us to a net profit of MXN 1.97 billion or 4.4% of our sales and 13.8% increase versus the same quarter of the previous year. Annually, the net profit reached MXN 5.5 billion, which represents 3% over our sales, as well as a double-digit increase of 16.1%. Concerning management of our investment. For this year that ends, we invested MXN 4.2 billion, out of which 23% was for openings. Mainly in the zone of Tamaulipas, Cancun and Tapachula. 40% of it was destined to remodeling, maintenance and replenishment of equipment. Let's keep in mind that we know this is part of the company strategy to continue with the refurbishing, updating and evergreening of our installed base, as well as guaranteeing that all our stores are in the right conditions to provide the best customer service. Finally, 21% goes to the investment in technology to improve the systems for the organization and more particularly our e-commerce platform. Concerning our partnerships in the Sodimac business and the credit card business with the Soriana card and through our home improvement format of Sodimac, there are two units at national level with over 1,000 sq m. Excuse me, 10 units at the national level, each one with over 10,000 sq m in sales floor and catalogs that include more than 31,000 SKUs. Along the year, we opened three units which had a very positive performance as well as excellent acceptance from our customers. On the financial business side, we have physical and digital modules through which we are able to cater for our customers in Soriana across 411 locations. By end of 2022, we have around half a million card digital active card owners, which allow us to bring unique benefits to cardholders, not only in Soriana but also in Sodimac as well as other businesses that are not part of the Soriana network. As you know, this is one of our most relevant partnerships, and this has been successfully positioned in the past few years, where four seasons, such as the El Buen Fin or, around Black Friday and Christmas, it became the most important and top-selling cards for, interest-free monthly payment promotions. To close, we would like to add that as part of our commitment with social accountability and sustainability, in October of 2022, we announced our joining the Global Compact of the UN, which has the purpose of increasing collaboration across commercial leaders to contribute to the 2030 agenda through initiatives that develop priority sustainable development actions towards the protection of the environment. Further ado, this is the closing of the opening statement, and we would like to open the floor to any questions from the audience for their answers. We will now move on to the Q&A in Spanish. This is a reminder that once the questions in Spanish have been replied to, we will move on to questions in English. With star eight in your telephone, you can submit your question. Once it has been answered, you can cancel your question through pressing star eight again. The first question comes from Luis Willard from GBM. Luis? Hi, Rodrigo and Claudia. It's really good to greet you and thank you for the opportunity. A very punctual question here, Rodrigo. Following all these investments that have been conducted throughout the years for the acceleration of sales in stores, there has been an important lag compared to Walmex, which has been clear. My, my actual question is how to assess the investments that have been conducted over time, and how, what, how do you see it going forward, the need to continue with these investments, both in terms of CapEx and marketing to catch up with the growth of Antad or other peers in the industry? Well, firstly, I think it is important to zoom into the breakdown of the sales, not only with the Soriana sales, but also our competitors, and also to point at the results and the assessment of investments conducted. The first part, which is relevant and interesting to keep in mind, for Soriana, the component of e-commerce growth in sales has the lowest share, which gains even more relevance when we understand that Soriana, there is a delay versus our competitors. We are walking into the e-commerce business late. 1.5%, 1.6%, approximately over sales, total sales of the organization. This same number across all our competition is 3 x or even more than 4x. When our e-commerce is growing in a triple digit fashion, and very importantly in our competitors as well, if it was only 7% or 8%, that may not seem very relevant for total sales purposes, but it is one of the most important sources of growth of all stores, and not only in Mexico, but in the retail world across the world and other geographies as well. The e-commerce source, the contribution that it provides to sales is very strong. It has a very relevant role, even where, when in total sales it doesn't seem so, but it is the source of the increase of additional sales. This leads to, when we conduct a comparison of sales within the physical stores in most of the regions and, compared to our competitors or most of them, by late 2022, we are arriving at the catch up. While we're still below, there's still work to be conducted. We're working on the catch up. Although we have an important growth of the business, the e-commerce growth continues to be relevant. E-commerce continues to play a very small role on the side of Soriana. Of course, there are still issues to solve and fix and improve. 2022 started a very strong investment process, not only for price reduction, but also for a low price positioning strategy so that we can be identified as a good low cost strategy. The pricing strategy matters, but also the communications through the campaign, the basic campaign of this federal government, where this is not only Soriana playing, but it is actually an authority that every single Monday at the national level can display our levels of competitiveness through publicly available information. This is not coming from us. Week by week, we are showing to be the best option in the basic pantry supplies compared to the competition. We need to continue with that investment. There's no stopping that. We need to recover that image in the minds of consumers of competitive low prices, and we will continue investing in that side. Concerning the investment in remodeling of our stores, which also answers your question, Luis, we need to continue along that path even when this is not reflected in the growth in stores. This has to be done because there is no. Especially when in the past we have said this, we had to prioritize due to debt and others. We had to prioritize CapEx in our stores. Today, our financial compatibility is much greater, therefore, our CapEx is growing as well. We cannot let our refrigerators and air conditioning or other technology in our stores to drop because this represents a drop in the service as well. No matter what sector we target, those investments are going to have a worth in the end because our stores need to have the right kind of facilities for the clientele. What the expectations are for the future, I would say are more investments, and not just more investment, but closing 2022 becomes a very important milestone in the strategy of the company. You know, in prior years, Soriana had been changing systems, reorganizing. There were some important changes in the company, remodeling, debt payment, and that had been accounting for the centralization of our flow. As of 2023, the company is focusing in only one word, which is growth. We will continue to light the engines of growth. The CapEx for 2023 will be double, which is, of course, I'm sure one of the questions that would be later asked concerning what is going to be our driver for the next year. Our original intent is an opening of over 15 Soriana stores, plus others that we have in combination with Falabella. We will continue with the purchase of land, searching for new opportunities, and we will begin to accelerate the growth. Prior to the acquisitions, the company was opening around 50 stores by year, and these were the large scale stores. We're not talking about stores like the ones designed by retailers nowadays, which are much smaller. Starting on 2023, Soriana is going to focus on growing. We will invest strongly. Yes, we will remodel too, but we will be opening many stores, of course, with strong investment on the e-commerce side, due to all the reasons mentioned already. Also we will invest in our positioning. There is no losing ground there. These are investments that are necessary, and we believe that all of those investments, coupled with our strategy, our commercial strategy, catalog pricing strategy, will give results. Changing customer perception is not easy. Recovering market share is not easy, but we're here for the long run. Luis, you can expect investments like these to continue. Thank you, Rodrigo. Very clear answer. Thank you so much for that and for all those details. Just real quick and in closing, are you comfortable about the commercial proposal and the way it's geared right now to be able to resume with the growth that we were expecting? Yes, we are very comfortable with that. There are so many of our new layouts and other designs that we have in mind for the next stores. I'm not saying that the work is done. There's no way to claim that as of now. We are very comfortable with the direction the company is taking. It's precisely this comfort that gives us the confidence to open our checkbooks and begin doing strong investments. Thank you. Thank you for your question. If you have any more questions, please press star 8 in your dial star 8. In Spanish. Next, we will listen to the questions in English. We will hear a brief pause while the translator presents the questions in Spanish. We don't have any questions so far from the English room. We have another question coming in in Spanish. This is Miguel Ulloa from BBVA. Please go ahead. Hi, Rodrigo. My question is concerning the investment guidelines for next year. Of course. Hi, Miguel. It's really nice to greet you today. Our sales growth expected is between 8% and 9%. We are expecting to have a combination of our gross margin and control of the expense and expansion of 10 basis points in the EBITDA margin annually. We are expecting investments around MXN 7 billion, focusing in the expansion and remodeling of stores, which includes the opening of 15 stores in the different Soriana formats. Plus, we are expecting to open around three to five Sodimac stores. As for the cash flow, we have around MXN 2.7 million in debt that we are paying back. Those are overall the directions that we are expecting to follow that we can share with you right now. What about dividends? There is a payment of dividends. As far as I remember, this will be ratified by the committee. It should be around MXN 1 billion to be paid back around December of 2023. Concerning performance during the start of the year, January, February, is there anything that catches your attention that you believe worth highlighting? Well, I would say that if there's something to highlight, the Pacific region, all of the states of the republic, from the South all the way up to Baja California, across the Pacific, we have very good results so far. The performance there has been great. City Club, this will be the fourth year that it has been leading the growth. We are very happy about this format. The openings in Tapachula, the Price Club, has been spectacular. We are very happy about it. Secondly, we have the Superstore format, which we will be growing importantly in the next few years with a very good performance, great acceptance by the clientele. Evidently, it is a much more convenient, smaller format that focuses heavily on the daily use goods. The good performance that we've had with this format so far has been a pleasant surprise for the first two months of the year that have elapsed so far. Our own brand is doing great as well. We are quite happy in that sense. Yes, I believe those are my remarks concerning the first few two months that have elapsed so far. Thank you for your question. Now we have questions in English. As we saw, there was a question in the queue in English. I don't know if there are any issues happening backstage or... The first question in English is from Antonio Hernández in Barclays. Yes. Hello. Hi. Hi. Good afternoon. My question is regarding private label. Could you please confirm that the private label penetration is around 15%, 16% of your total sales? Well, you highlighted how this category has been improving. Do you have any specific target or do you also expect or see that maybe, I mean, the inflationary environment, consumers are trading down towards this private label and maybe this is something that will continue growing ahead of total sales? How will this translate into profitability? Thanks. The private brand will need to have a very important weight in total sales of the company. When I say very important weight, I'm talking about more than 30%. The company is investing really in the private brands in the country. We are in the right track. We comfortable with the strategy that we are taking in this particular topic. What you will see continuously in the stores is that every day we are pushing harder to have a better commercial proposals in private brand. That actually makes a lot of sense in an inflationary environment. Because it's one of the ways in which we can help the Mexican families to continue having or to have the ability to write all the portfolio products that they need at better prices and obviously with a better performance also. For us, in general, private label is a good strategy, but particularly in this kind of environment with high inflations, it makes even more sense. I'm sorry for the problems in the communication, Antonio. I hope the answer satisfied the question. Okay. Thanks for the answer. Camila Azevedo from UBS, please go ahead. I was wondering, about the Sodimac openings. Thank you for your question, Camila. We are expecting between three to five openings of Sodimac stores. As you know, Sodimac is a JV with Soriana, in which we are 50/50, and the other part is for public company, we don't give really guidance about the store opening of Sodimac in Mexico. In general, what we can say is that the performance in the last four years has been very satisfactory and the reason why we are trying to accelerate the growth of Sodimac. We feel really comfortable with the performance that Sodimac is having in Mexico. Actually, a couple of surprises. Like an example, the mix of sales in Sodimac, Mexico. The participation of the soft categories, what we call the soft part of the store that are more focused in the families. In the family categories such as home decoration and lighting, is having a much higher participation than what we expected in the beginning compared with other geographies. Obviously, we are making the changes in the layout and the catalog products to satisfy this extra demand that we are seeing in these kind of categories from the client. For us, it's a very good news because these categories have a higher margin than the one that we have in steel or other hard categories. Even the surprises have been really good. Very clear. Thank you. Thank you for your question. Kind reminder that if you have any questions, please press star eight on your phone. That was our last question? Perfect. Thank you so much for your time, for joining us for this conference. Both, myself and Claudia are here at your disposal. You have our phone numbers and email address. We would really like to thank you. Good afternoon. Organización Soriana would like to thank you for participating in today's phone conference. You can disconnect now.