Good afternoon, everyone. Welcome to Organización Soriana's Second Quarter 2023 Earnings Conference Call. With us today are Mr. Rodrigo Benet Córdova, CFO of Organización Soriana, and Ms. Claudia González Romero, Head of Investor Relations for Organización Soriana. Together, they will be discussing the financial performance for the second quarter of 2023, and providing a summary of the latest news for 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 Cordova, CFO of Organización Soriana. Please go ahead, Mr. Benet. Thank you very much. Good, good afternoon, everyone, and thank you for joining us in this conference call regarding the financial results of the second quarter. As already mentioned, today with me is Claudia González, Head of Financial Planning and Investor Relations, and together we'll be going through the results and other some important information of what happened during this period. Starting with the store format, performance, particularly Soriana Mercado and Express. During the month of April, we launched across different media, its new advertising campaign called Aplastamos los Precios, in which we guarantee low prices in a consistent and permanent way to all our clients. Basically, this is part of the efforts that we are making in order to reinforce the strategy of low prices in these discount formats. Going in the next month, in the month of May, we started our most important and emblematic commercial campaign, Julio Regalado, in its 8h edition, called Precios de Locos. In which we work to reach a greater number of clients, considering their preference and their purchasing power, by offering them a greater variety of promotions, such as volume purchases or price with high discounts in select categories during longer periods, even 60 days of discount prices. Also with the special prices in purchases by multiples in our private brands product. That actually is one of our main commercial strategy pillars that we were planned for this year. Also, for this Julio Regalado edition, and as a differentiator to the rest of the summer campaigns, we have included in the promotional variety, the category of perishables, in products like fruits, vegetables, sea and meat products, among others. That is the first time that we include as part of the special promotion of Julio Regalado. As a result of these main important campaigns in April and May, and obviously Julio Regalado also during June, we closed the second quarter of the year with our total revenues of MXN 44.3 billion, which represent an increase of 6.2% in comparison with the same period of last year, with a same-store sales of 5.3%. In cumulative terms, revenues closing a 5.8% increase, reach MXN 83.7 billion. If we break down this increase, basically the traffic or the transaction, the number of transactions in the quarter, show an increase of 3.4%, and also we are seeing an increase in the average ticket of 1.8%. If we take a look in division level, we can understand groceries, prepared food, that obviously the strong performance in these two categories is aligning to the strong promotional campaigns that we focus in that two divisions. Obviously also the important purchasing volumes that we involve in that two categories. From a geographic perspective, basically the states that we can say that stood out were Estado de Mexico, Jalisco, Colima, Yucatán and Campeche. Likewise, an extraordinary performance in the Soriana Súper stores was observed in the states of Baja California, Quintana Roo and Tabasco. In the case of City Club, we can mention the outstanding performance of Colima, Estado de Mexico and again, Tabasco. On the other hand, as a part of the relaunching activities of our private brands, we used the Julio Regalado campaign to offer a wider and more attractive product offering in select categories of our brands. Where we obtained a very positive response from our clients, we can achieve an increase of 30% in the sales in those categories. We observe a triple digit increase in specific categories, such as cooking oils, frozen food, canned fish, in the private brands products. Going forward, we will continue introducing new products and novelties as part of the strategy of private brand, in which we have to remember is one of the most important bets of the company in order to close the gap against our competitors. Even in formats like City Club, we can see an outstanding performance in private brand, and particularly in City Club, we can obtain an increase of 18% in the sales of private brand. We believe that the performance that we are seeing as of today is very good, is very positive, and we will continue strengthening these categories going forward. Regarding our digital business, we are also pleased to see the results obtained from the investment and decisions that we have made in the past months. As we continue reaching a double-digit increase in this business, particularly, we are seeing an important consolidation and strengthening of our extend catalog of product, that combined with the platform Súper en Casa, is delivering very good results. We are seeing that the client is responding to the upgrade in the shopping experience that we have implemented in the last months. Actually, as we are seeing a positive and continuous performance in the e-business of Soriana, we finally launched the e-business platform for City Club. We launched the new site of City Club in March of this year. Right now, we are already obtaining 5,000 orders per month, and we are seeing a double-digit increase month by month. We are really positive about the performance that we are seeing for the City Club format. That actually, also this new platform is helping us to increase the base of memberships in this business. Actually, in this quarter, we obtained an increase of 7% in the total base of partners in City Club, closing the quarter with 1.1 million partners, active partners in City Club. Going down on the P&L, regarding the other income, basically, the one that is coming from our real estate business, we are also continue seeing a better performance going month by month. Right now, the occupancy is 84.7%. That compares in the same period of last year with 79.6. We are seeing an important increase. We believe that we are on track to obtain the goal by the end of the year of surpassing the 91% of occupancy. As a consequence of the previous mention, the gross profit reached MXN 9.7 billion in this quarter, which represent a gross margin of 21.9% and an increase of 6.7% again last year. We are continuing seeing better performance in the negotiation with the suppliers and also a better performance in the shrinkage management that allow us to expand the gross margin in 10 basis points. On the other hand, regarding the operating expenses line, basically, this line showed an expansion of 60 basis points, reaching MXN 6.6 billion. That represents an important increase of 15.1% over the income, sorry, a 10.5% increase and a 15.1% percentage as over the income. That we can say that basically, the major part of this increase is attributable mostly to the cost of personnel, basically, in which we are having a better performance of the fulfillment of the vacancy coverage of the company and also an increase in salaries. That is something that we are seeing across all the nation. Also we are investing very, very important in maintenance as part of the remodeling program of the stores. That is something that we already have a couple of years, in which every year we are increasing the CapEx in remodeling and also the expense in remodeling. Finally, also an important increase in advertising, mainly related with the Julio Regalado campaign. As a consequence of this variation, the EBITDA of the quarter closed with an increase of 0.7%. Obviously, this is a part of the consequence of the important expense that we are seeing in the quarter, that we can say, and we are pretty sure that this increase in the expenses is basically an investment in the shopping experience and the maintenance of our stores. No matter that, obviously, it's putting some pressure in the P&L, particularly in EBITDA, we believe that is something that the client requires, that the company continue investing in maintain the stores, appearance and the stores, shopping experience in a, in a good level. On the other hand, regarding the financial items, the net financial cost closed in MXN 699 million, showing an increase of 19.6%. Basically, this increase is due to the increase in the interest rate of the debt and also a decrease in the financial product, mainly related with the option that we have to repurchasing of the stocks of the company. Finally, the net income of the quarter reached MXN 808 million, that is equivalent to 1.8% over the sales. As an update of the expansion plan for the year, in the past 12 months, we have inaugurated six stores, basically in the state of Chiapas, Tamaulipas, Quintana Roo, Coahuila, and Campeche. Also we like to add, in May, a City Club that arrived to Ciudad del Carmen, that actually is having a very, very good acceptance from the clients. Also, in the same way, we will continue with the store remodeling plan of the year in order to continue renewing our image and providing to our customers an updated stores and deliver comfort, security, and a better shopping experience. Also, we are really happy about this program, mainly because the new stores and the remodeling stores is showing a much better performance than the base of the stores. Going into the future, every time that we can increase the base of new stores and remodeling stores, we also will see a better performance as a total company. Moving on to talk about the progress with our partner, Falabella. This quarter, Sodimac, our home improvement business, showed an important increase of 13.8%, thanks to the acceptance in great part of our clients in all the stores that we have opened in the last 12 months, and also with the contribution that every day is more important of the digital business in Sodimac, that every month continue growing in important pace and taking more participation in the total sales. Regarding the store opening of Sodimac, actually, tomorrow, we will have an opening for 1 stores, the first one, in the Interlomas area. We believe that it will be a very important store in a very important socioeconomical level neighborhood that will also help us to continue building the brand awareness of Sodimac in Mexico City. Basically, by the end of the year, probably we will open another two stores in Monterrey in order to reinforce the presence of Sodimac in this important city in the north part of Mexico. In the other hand, I'm talking about the financial business with Falabella, the credit card, Falabella Soriana. We are also seeing important growth. Actually, we closed the quarter with a little more of 800,000 credit cards that actually already positioned the credit card, Soriana Falabella, as an important player in the country, and obviously a very important player in the purchasing method mix in the store. Actually, in seasons like Julio Regalado, Buen Fin, the credit card, Falabella Soriana, in some cases, is the most important method of payment in the universe of the credit card. We are really, really happy with the penetration of the credit card in our business and the continued growing that we see all the months. Finally, but not less important, I would like to share with you some important activities regarding our social responsibility strategy, in which, during this quarter, we support more than 100 institutions along the country, basically attending different needs in important goals like children feeding and support to the community. Also something very important as part of our social commitment strategy is that in this past May, of May, we welcome 1,400 new students in our Universidad Soriana program, sorry, in which the employees can accomplish their elementary school, middle school, and high school. That is not only as part of the social strategy, but also it's a way in which we can contribute to the mission of be the best place to work in Mexico, and obviously give a better socioeconomic level and quality life to our employees. Basically, with this, we can close our intervention, and we can go continue to the Q&A session in order to answer any doubt that you can, you may have. Thank you very much for joining us, and we can continue to the Q&A. We will now start the Q&A session. If you have a question, please enter star 8 on your telephone keypad. In case your question has been answered, you may cancel it by pressing star 8 again. The first question is from Mr. Antonio Hernández from Barclays. Please go ahead. Hi. Hi, thanks for the space for questions. Just two quick ones. First, on same-store sales guidance, I don't know if there's an update on that given year-to-date performance. A quick follow-up regarding competition, where maybe in which formats or regions have you faced tougher competition? Thanks. Yes. Well, basically, we trying to respond your question, Antonio, first of all, about the format and the different performance in the same-store sales performance. Basically, we can say that across the supermarket formats or banners, the performance is really similar. Probably we can have a very slight difference, but in general, all the formats of supermarket formats, and with this I mean Soriana Súper, Soriana Híper, Soriana Mercado, and Soriana Express, is really similar. The one that we continue seeing, finding things, probably more than 12, 14 months ago, a better performance is in City Club. That's as I already mentioned in previous conference call, it's a format that is surprising a lot the company, probably since 2, 3 years ago, in which every month and every year is obtaining very, very positive results. Actually, that is one of the reasons why we are also including City Club in the strategic organic growth plan. If we talk about differentiation per regions, we can say that in the central part of Mexico and south part of Mexico, we have a little or a slightly better performance than in the north part of Mexico. Also, remember that actually we have a couple of months, it's not the first quarter, in which the north part of Mexico, particularly in, like, an example, the case of Nuevo León, we are facing up a higher pressure. Obviously, this is a result or a consequence that if we analyze the strategic growth of the competitors, it's really focused in the last three, four years in the north part of Mexico. Obviously, it's putting extra pressure in this region. Basically that. Perfect. Thanks for the color. Now in terms of same-store sales guidance, any updates on that? Well, if we remember, in by the end of 2022, we expect to have a same-store sales increase of 9%. If we analyze as of the end of the second quarter, we are close to 5%, without including the JVs, I mean, just the Soriana format. Obviously, we are far away from the guidance, almost four points far away from the guidance. We believe that every quarter we can increase and improve the performance in same-store sales, particularly because we continue with the remodeling program, with the new stores program, with the private brand penetration. Actually, if you see, it's something that we are coming from the bottom to better performance. No matter that, we expect that in the third and fourth quarter, we will have a better performance in same-store sales. If in order, obviously we will not accomplish the guidance. Okay, thanks for the color. Have a nice day. Thank you very much for your question. Our next question is from Mr. Bob Ford from Bank of America. Please go ahead. Hey, Rodrigo, thanks for the remarks. You know, the private label seems to be going very well. Can you talk a little bit about where you are in terms of, you know, the penetration for private label for the group as a whole, and how you're thinking about that longer term equilibrium? Excuse me. When it comes to remodeling, you know, what kind of a lift are you getting in the stores where you do some of the major remodeling efforts? Sure. Well, going for the first question, Bob, for sure, private brand is something that we believe is strategic and is key. Right now, the penetration is in the skin area, the penetration as the total sales of the categories in which we participate. In some formats, like Soriana Express, we are close to achieve the double-digit penetration. That obviously is something that makes all the sense, because the kind of population that we serve in format like Soriana Express and Soriana, Bob, in the medium term, is to have a double-digit penetration in all the formats, and particularly in the discount formats like Soriana Mercado and Soriana Express. We want to achieve a penetration close to 50% of the sales of that format. It's something that in which we are working really, really hard. As I already mentioned in this conference call and the previous one, we, new department of private brand inside the company, we hire the best guys in terms of branding, packaging, quality that we find in the world to be part internally, externally, of the Soriana private brand team. Every month we are trying to launch new products with a new image. Very important to mention, new private brand strategy is not only the entry level. We will have entry level private brand, commercial brand, commercial label private brand, and top quality private brand. Obviously, that will be differentiated by format, and by, it will be differentiated global so than the self-service brands. Well, we believe that we are on the right truck, track, sorry, in this. As I already mentioned, in some of the formats, the increase of the private brand is really important. Also, we have close important agreements with other producers in other countries, in China, in Canada, in the United States, in order to produce our private brand in that country, depending the category. That is helping us in a very important way. You will continue hearing in this conference call about the importance and the performance of the private brand book. The second question about, remember me? It was about remodeling, Rodrigo. Remodeling. The kind of lift you're seeing, you know, as a result of the activity. Remodeling, Bob, is something again, that we are really happy. If you remember, Bob, you that have several years covering Soriana, probably, 7 years ago, after the purchasing of Comercial Mexicana, we stopped in a very important way, the remodeling program. Mainly because 2 reasons: The first one is that obviously we prioritize the reduction of the debt as part of the strategy of the use of the free cash flow. Secondly, because the performance of the remodeling stores from that time was not very satisfactory. We invest an important amount of money, and we just obtain increases of 7%, 8%, something that really doesn't cover the payback of the increase. Right now, Bob, the new stores and the remodeling stores, the performance is really, really high compared to the historical base of stores of the company. We go directly talking about the remodeling stores, in average, Bob, the increase that we are seeing is 25%. That is really important and much higher than the one that we obtained in the past years when we make this kind of investments. Obviously, this result, the only thing that can prove, because not prove, can prove, is that we have an important amount of stores that the shopping experience, the comfort of the store, the appearance of the store, is already old or is not in the right level according to the competition or the client. When we make these changes and we completely change the face of the stores, the client is responding. That is why if you see and analyze, Bob, we are expanding an important amount of money that we doesn't make that in the last years, previous years, in remodeling, and the idea is to continue increasing the CapEx year by year. This year, we increased the CapEx more than 50% against last year. The most important line in which we are making that investment is in remodeling. I mean, just to give you a more specific numbers, in this year, we are planning to invest just in remodeling a little more of MXN 1.6 billion. Rodrigo, how many units will you be remodeling with the, with that budget? 20, around 20 stores, Bob. Okay. Well, that's big. Rodrigo, just going back to the private label question, and you said that in your discount formats, you expect the goal or the goal is to be over 50% of sales in private label, correct? Yes. Which sounds a lot more like. Discount. moving toward a harder discounter. Yeah, a hard discounter. Yeah. My follow-up question was just gonna be, how are you thinking about, you know, your small box strategy and, you know, when you look at opportunities to really grow this business, particularly in convenience concepts, how are you envisioning your strategy moving forward? It's, if you remember the name of a very famous book, Crónica de una muerte anunciada. Basically, Bob, it's something that will happen in Mexico. I mean, we are seeing that there is several facts that proves and comproves that the participation of soft discounts and hard discounts in Mexico, will happen. Actually, it's already happening. We have important players that start as a regional or local players, as more players participate, in particular in hard discounts, that every month is opening stores and have good acceptance. I think that is not a specific, these players are not like the hard discount of Europe, in which when you enter to the store, it's really private brand. In the case of Mexico, what we are seeing is that these hard discounts is like low-income brands, not particularly private brands, because it doesn't have the ownership of the, of the, of the product, but it's very low prices brands. It's something that we see as a strategic opportunity, but something which we are working on. Actually, we already starting to work with the new models of Soriana Express in order to give this turn more focus in hard discount/convenience, probably reduce the size of the Soriana Express, that already is our smaller format. For sure, it's a space and an opportunity to even a smaller format. I think that something that you will see in the following 10 years in Mexico is an important growth of this kind of formats. Super helpful, Rodrigo. Thank you so much. Thank you very much for your question. Our next question is from Mr. Joaquín Ley from Itaú. Please go ahead. Hi, Rodrigo. Good afternoon, and thank you for the time for questions. Two, if I may. First, could you please elaborate on the 19% year-on-year increase in inventory that we saw in the quarter with a 6% sales growth? I mean, it seems to me that inventory in the quarter was kind of 107 days of cost, so that's second highest level ever for a quarter. Some color there would be great, please. A second question is, although you mentioned this in your remarks, could you provide some more color on the 90% sequential drop on interest gains, please? Yes. Well, first, going to the first question, Joaquín, is not that seems to you, it's a fact that we have an important increase in the inventory level. Obviously, it's related with a bet, in Julio Regalado to volume sales, in which obviously, when you contrast that increase in inventory against, the increase in sales, it's affecting the working capital and it, and it's affecting, in an important way. We have to also to remember that Julio Regalado, still we have a couple of days, actually, weeks of Julio Regalado, with important promotion that will help us to, reduce that inventory. Obviously, we will end Julio Regalado campaign with important levels of inventory. It's something in which we are working on together with our suppliers. Probably the only positive thing about that is that it's very basic product. It's product. I mean, it's not winter clothes. It's oil, it's toilet paper. It's very high turnover product that is, have an important and very low cost, that is much more easy to manage and to take it out in the following months. Obviously, it's not the situation that we want, but it's not a problem that you can expect that we will maintain that very high inventories for months. Because, again, it's very basic products that have a very important reduction in the cost, that is much more easy to take it out in the following months. Sorry, Joaquín, the second question? Yeah. You mentioned about, in your remarks about the low interest gain in the quarter, but if you could provide some more details about that would be helpful. Yeah. Not in, it's not in the interest gain, Joaquín. Mm-hmm. It's in the producto financiero. Well, let me be more clear on that. Mm-hmm. Speaking, it's in producto financiero line, but it's related with equity swap, Joaquín. Okay. That is why I mentioned that it was related with the purchases of the stock of the company. Remember that three years ago, we make an equity swap at a price level of MXN 15, that obviously we have an important gain against the level of the stock price that we have already in the Mexican Stock Exchange. Because this is a mark to market, what happened is that, if I don't remember wrong, the price, the closing price of last quarter was close to MXN 30, and right now it's close to MXN 27. We are reflecting in that. Mm. Basically, the difference in the variation of that, the positive thing... I mean obviously, in this quarter and previous quarter, it's not a cash, it's not a cash line. but no matter that it's not a cash line, it will be a cash line until the date of the due date of the equity swap. Obviously, we have a really, really important gain against MXN 15. No matter if it's MXN 30 or if it's MXN 27, the gain that the company obtained with this equity swap is really, really important. Okay. Basically, is that. All right. Thank you. Thank you very much for your question. Our next question is from Mr. Ulises Argote from JP Morgan. Please go ahead. Hello, Rodrigo. Thanks for the call and the space for questions here. A follow-up here first on the store remodeling. Just beyond the 20 that you were talking about there on Bob's question before, I was just wondering if you can give us any color on what that backlog of stores that are subject to remodeling kind of looks like for the next couple of years? The second question here, just to check on the tax rate, it was around like 45%, if I'm not mistaken, for the quarter. Just to understand what drove this and how we should kind of think on your effective tax rate kind of going forward. Thank you. Sure. Well, regarding the first question, if I understand right about the remodeling program, is something that we will continue for the next this year and the next 3 years. We have an important base of stores in that requires to make this update. If you make the math, it's not like a slight update, our investment of MXN 70 million-MXN 80 million per store, so it is important investment in the stores. Basically, that is the rate that we can make per year, 20-25 stores. Still we have an important amount of stores that we have to take it under this remodeling program. It's something that you have to expect to see the next following three years. Regarding the second question, basically, if you see the tax provision, the important change is not in the effective tax rate. We can break down the tax provision into two: the impuestos causados and the impuestos diferidos, the cash tax and the deferred tax. The cash tax is basically the same percentage as the income or any measure that you want to take, and it's really in accordance to the increase in the income before taxes. Basically, when you see the important changes in the deferred taxes, and to be completely clear, the important change that you see in deferred taxes quarter by quarter, first quarter to second quarter, is mainly because in the calculation of the deferred tax, that is a provision, we don't adjust the important changes in the inflation that obviously have an impact in the calculation of the deferred tax, particularly in the value of the land of the company in the first quarter, and we made the adjustment in the second quarter. Basically, it's that. Again, it's completely related with the deferred tax provision, in which, by a mistake, we doesn't make the adjustment of the expectation of the inflation going forward in the first quarter, and it's something that we made in the second quarter. If you analyze the cash tax, it's basically the same. I don't know if I was clear with this, Ulises? Yep, yeah, completely. Thanks for the call, Rodrigo. Congrats. Thanks. Thank you very much for your question. Our next question is from Mr. Fernando Herrera from Compass Group. Please go ahead. Mr. Herrera withdrew his question. Our next question is from Álvaro García from BTG Pactual. Please go ahead. Hi, Rodrigo. Hope you're well. I actually wanted to follow up on the discounters question, your discussion with Bob. A couple of questions there. Just one, what do you think has driven the consumer to take on more private label over the last couple of years? In Mexico, it seems acceptance generally has come up, and I'm just wondering what you're thinking, the consumer's thinking on that front. Two, if you had any comments on sort of how, you know, we've heard and we've seen more and more some of these wholesalers, whether it's Zorro or just to name, you know, one example, have kind of delved into, let's say, being minoristas. How would you describe that shift? If you have any comment as to how that might affect Soriana's competitive position, that would be greatly appreciated. Thank you very much. Sure. Well, first of all, regarding the first question, I think that in general terms, the acceptance of the private labels in Mexico have different factors that is helping to the increase of this. First of all, and obviously in particular, seasons of the economy of the country in which, like an example, when you have an important increase in inflation, and not for all the people correspond increase in salaries and obviously have an impact in their purchasing power, take the options of private brands that every year have better quality and still have a better price to the client, makes sense. Particularly for certain kind of products that the differentiation or the add value that can have a commercial brand against the private brand is not really high. I mean, in general terms, obviously, we can enter into a very specific discourse, but in certain socioeconomic levels, if we buy, if that client buy private brand salt or private brand sugar against commercial brand sugar or private brand, or if you buy, there's a challenge, sorry, I don't know how to say that. One time, Use product. product. You use products, Basically, is it will be really complex for a low-income family, justify why you will buy a brand one-use plate than a private brand. Obviously, there is a lot of categories that make a lot of sense, increase the participation in the shelf of the private brand. Secondly, in the past, we are talking about probably six to 7 years ago, when you talk about the private brands in Mexico, was the private brands have the image of a low price, low quality product. That is not what happened right now, actually something that I mentioned. Right now, is good quality, low price product, even, furthermore than that, we are developing high quality, very competitive price product. Obviously, more competitive than the high quality of the commercial brand. I think that makes a lot of sense, and we are seeing an important response from the consumer. Also you have to take in consideration that, again, probably 15 years ago, to develop a very high quality product in private brand, was much more complex because, buy the product into a company in Italy was really complex. Just let me give you a couple of examples. Right now, important participation of the producers of our private brand are companies in Canada, with tremendous high quality production levels. It's really easy to produce in Canada and take it to Mexico in a very competitive price. I think that there are a lot of economical, sociocultural, logistic facts or factors that is helping to the develop of the private brands in Mexico. Obviously, I mean, Soriana is a good example of that, but I think that we have another competitors that also improves and are really good examples about the importance and the opportunity in the private brands. Going to the second question, this kind of wholesalers, not like a little format, Zorro Abarrotero, Scorpion, more similar to a cash and carry format, obviously have their market, obviously have an important participation. I have to say that in so many cases, these guys are clients of Soriana. This is really, really ironic. These guys go to Julio Regalado promotion and try to buy product. That is why we have to put some rules about the number of SKUs that you can buy in Julio Regalado promotion, because in the past, these guys go to the stores to buy. Obviously, that means that they doesn't have the purchasing power in order to achieve that kind of promotions. I think that no matter, obviously, they are competitors of Soriana, the reasons why a client go to a Zorro Abarrotero and why go to a Soriana or any other supermarket, are completely different. The shopping mission is completely different. Also the mix of products is completely different. Something really important, is fresh categories and perishable and all the sea and beef products. It would be really strange to see a traditional Mexican family, that it would take a taxi to go and buy some groceries to a Zorro Abarrotero, and then go to Soriana or Walmart or Chedraui to buy the perishables and the fruits. Again, probably for you, it's not an important expense, but for the average Mexican family, going to the supermarket is an investment of time, money, transportation. Again, I don't want to minimize, and obviously, our competitors, and in some categories are important players. I think that the shopping mission, why a client, a family, go to a supermarket and go to one of these formats, are completely different. That's super helpful. Thank you very much. Thank you very much for your question. Our next question is from Miss Anabel Lopez Herrera, from GBM. Please go ahead. Good afternoon. Thanks for the questions. My question is regarding the Julio Regalado campaign. I mean, it seems that it has not had a material impact on your top line for the last several years, as opposed to what we have used to see many years ago. I wanna know, what's your strategy to reaccelerate same-store sales? In what extent are you willing to sacrifice margin to expand this top line? Sure. First of all, yes, I think that the performance of Julio Regalado 7 years ago, and the participation in the total sales or the annual sales of the company was higher. Yes, the response is yes. Something that is very easy to realize and to notice is that, once that we take Comercial Mexicana, Julio Regalado, and we take it national promotion and not only regional promotion, all the competitors in the summer start to focus to compete against Julio Regalado. If you see the promotion campaigns and the advertising campaigns of all the competitors in the summer period, it's directly against Julio Regalado, and in so many cases, it's a copy of the kind of promotion and advertising of Julio Regalado. Obviously, with the pass of the years, 8 years ago, probably the only one that have a 3 by 2 in toilet paper in summer campaign was Soriana Comercial Mexicana. Right now, you will see that campaign in other competitors. Obviously, Julio Regalado is really important. Advertising speaking and marketing speaking, it's very powerful, but we have to make some novelties and some changes and some differentiations to the Julio Regalado campaign in order to retake again the importance that used to have 3, 4 years ago. Actually, one of the strategies in order to make this refresh of the Julio Regalado campaign, is that we introduce very important promotions in Julio Regalado in fresh products, than in the past. If you remember, the Julio Regalado campaign was just focused in groceries and I mean, dry products. It's part of the effort that we have to make in order to refresh the campaign. Like an example, also, the Precios de Locos, that is part of Julio Regalado, is the first time that we combine very aggressive, not only multiples promotion, that is the core of Julio Regalado. Julio Regalado, remember, that is multiple promotion, volume promotion. Right now, we combine Julio Regalado also, volume promotions, but also with direct price discounts. You have, like, Precios de Locos, in which you have a direct discount buying just one piece of 30%, 25%, 40%, combined with other promotion in which you have to make a 3 by 2 by 1, 4 by 3, purchasing in order to obtain the discounts. Yes, we also believe that we have to refresh and to reinforce Julio Regalado, because the competitors start to copy and start to have same promotions and same advertising, in order to retake the importance of the campaign, and it's something in which we are working on. Okay, thanks. You're welcome, Maria. Thank you very much for your question. Our next question is from Mr. Bob Ford, from Bank of America. Please go ahead. I don't know if it was a mistake, because Bob already made the question, or Bob, I don't know if you have another doubt? No, it's another doubt. Ulises asked a question about the deferred taxes, I wanted to just make sure I understood. It sounded as if you were... In the quarter, there was a revaluation, I think you said, of land, of real estate in the period. I just want to understand how that creates a deferred tax liability, right? Because I don't think I've seen that in previous periods. If you see, Bob, let's make the breakdown. When you see the deferred tax in the first quarter, we have a negative deferred tax of MXN 124.4 million, compared with a MXN 68.7 million negative deferred tax in the first quarter of 2022. When you see the second quarter in 2022, we have a MXN 250.9 million deferred tax negative. We have a positive MXN 6.4 million deferred tax in 2023. Basically, this important change was obviously because the difference in the calculation, because the change in inflation and the impact in the assets of the company, particularly the land. It's due to the provision that we make in the first quarter, that negative MXN 124, doesn't have an update of the inflation perspective going into the future, right? That we doesn't make. It's adjusted in the second quarter, and that is why you are seeing that we pass from a negative MXN 124 to a positive MXN 6.4. If we have made it from the beginning of the year, this will be more, not so important, the change between one quarter to the other quarter, it will be more normalized. That is the issue in this line. When it comes to the balance sheet, where, like, there's a little bit more than MXN 10 billion in deferred tax liabilities, do those ever have a date with destiny that's defined? Remember, this negative deferred tax is taxes that we are paying, and that the impact that have this, is that the provision that we have in the balance sheet. If you remember, actually, it's a very controversial line in this government. To say that a lot of companies have important amounts of deferred tax in their balance sheet, that in the case of Soriana is MXN 10.2 billion, is going down because we are already paying that tax. When you see this negative deferred tax, is because we are not so aggressive in the deferred tax strategy, and we are paying. If you see, it, and it's something that has happened in the last quarters, when you compare the deferred tax line in the balance sheet, is going down 3.6% in the liability. Understood. Is there a possibly a like a litigation solution that could be pursued in subsequent administrations? No, actually, it's happening this because we are really conservative. Okay. If we continue with a very aggressive tax strategy, I will create more deferred tax, and the provision in the balance sheet, it will be going up. Gotcha. Okay. Thank you very much, Rodrigo. You're welcome. Thank you very much for your question. Our next question is from Miss Camilla Acevedo, from UBS. Please go ahead. Hi, thank you for for the space for question. We heard that PAYBACK shut down in Mexico last June. Could you comment on how this affected your service levels and how you plan to replace it? Thank you. Actually, I don't want to sound in an incorrect way, but the reason why PAYBACK is going out from Mexico is because, first of all, it was going out from Soriana, because we represent probably 60% of PAYBACK. It's not, PAYBACK doesn't make going to the future fit to the strategy of the loyalty program, because we have our own loyalty program that is really strong. Basically, when we decide to going out from PAYBACK, I don't want to speak by these guys, but it's just probably a coincidence that when we decide to going out from PAYBACK, a couple of months after, they decide to go out from Mexico. For us, it's something that was decided several months ago, and all that clients migrate to the loyalty program of Soriana. For us, doesn't represent any impact. Okay. Very clear. Thank you. Thank you very much for your question. That was the last question. This concludes the Q&A session for today. Okay. Thank you very much, everyone, for joining us in this conference call. As always, if you have any additional doubt, please send an email or a call to Claudia González or to me. We will be very great to receive your call. Thank you very much. Have a good day.