Good morning, everyone, and welcome to Coca-Cola FEMSA's second quarter twenty twenty-one conference call. As a reminder, today's conference is being recorded and all participants are in a listen-only mode. At the request of the company, we will open the conference for questions and answers after the presentation. During this conference call, management may discuss certain forward-looking statements concerning Coca-Cola FEMSA's future performance and should be considered as good faith estimates made by the company. These forward-looking statements reflect management's expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which can materially impact the company's actual performance. At this time, I would now like to turn the conference over to Mr. John Santa Maria, Coca-Cola FEMSA's Chief Executive Officer. Please go ahead, Mr. Santa Maria. Thank you, operator, and good morning to everyone. Thank you for joining us today to discuss our second quarter twenty twenty-one results. We hope that you and your families are safe and well. With me today are Constantino Spas, our Chief Financial Officer, Matias Molina, our Strategic Planning Director, and Jorge Collazo, Head of Investor Relations. I'm very encouraged by the meaningful improvements and solid results that we have achieved during the second quarter. Although the COVID-19 pandemic continues to weigh on daily life across the world, our company is gaining momentum. This is driven not only by mobility and economic recovery across our territories, but also by our ability to execute and deliver results on all of our strategic fronts. A year ago, we shared with you our five C framework, which has guided our mitigation actions with a clear objective of protecting our employees, supporting our communities, reinforcing our cash flow, and ultimately emerging a stronger company. Before reviewing our results, I want to recognize the unwavering passion and commitment of our team to serve our clients and consumers through these unprecedented times. Their daily efforts are a cornerstone of our company, and we are tremendously proud of the entrepreneurial, consumer-centric culture that we are building together. On today's call, I'll walk you through the highlights of our second quarter results. I'll also take a moment to dive deep into the strategies we are implementing in our Mexican operation before closing with some comments about the enhancement of our collaboration framework with the Coca-Cola Company. It is very positive news that we continue to bolster our successful and long-standing relationship for the long term with KO. Before we open up the floor to take questions, I will then hand the call over to Constantino, who will guide you through the division's performance, our raw material hedging strategies, and our first green bond issuance. He also will discuss the steps we continue taking to ensure the company's solid cash flow generation, which enabled us to increase our cash position by 8% during the quarter as compared to year-end 2020, even after paying down debt and the first installment of our dividend. Moving on to our results for the quarter. Our consolidated volumes increased 9.1% year over year, and one point three percent increase as compared to the same period of 2019. This increase was driven by volume growth across all of our markets. Notably, Brazil, Colombia, and Guatemala are all growing versus twenty nineteen, while we continue to see an acceleration in the sequential recoveries in the rest of our territories. As consumer behavior and channel performance normalize at an increasingly faster pace, we saw some strong performance across all our beverage categories. Our sparkling beverage category posted solid volume in both brand Coca-Cola and flavors. While our stills and personal water categories achieved double-digit growth across all our territories, driven mainly by increases in mobility and the gradual recovery of the on-premise channel. Specifically, our sparkling beverage category grew 6.5% year on year, led by 5.3% volume growth in brand Coca-Cola and 11.5% growth in flavors. Most importantly, when compared to 2019, our sparkling beverage category grew 3%, driven mainly by the solid performance of Brazil, Colombia, and Guatemala. Another benefit from increased consumer mobility is the performance of on-the-go consumption occasions. Our still and personal waters volumes, which significantly over-index on these occasions, are recovering at an impressive pace. To give you a sense, our still beverage category volumes increased 35% year on year and 4.4% as compared to 2019. Our monthly average of active clients continues recovering, surpassing pre-pandemic levels, driven mainly by the resilient traditional trade and the reopening of the on-premise channel. In Mexico, on-premise volumes increased more than 50% year on year, while in Brazil, we achieved double-digit growth despite significant restrictions in the month of April. With regard to our mix, we saw significant recoveries in single-serve presentations as compared with the previous year. However, there is still a runway for additional mix recovery. To give you a sense of what is happening. In Mexico, our single-serve mix has recovered six out of 10 points of single-serve mix that has shifted during the pandemic era. So we're seeing a comeback, but we still have some runway for increased single-serve mix growth. Driven by volume growth, our revenue management initiatives, and improvements in our price mix, our consolidated total revenues increased 10.9% year on year. Notably, we achieved this growth in the face of continued unfavorable currency translation effects from all our operating currencies into Mexican pesos. Excluding these headwinds, our comparable top line grew 19.2% year on year and remained flat compared to 2019. Regarding our gross profit, our raw material hedging strategies, coupled with our cost cutting and savings initiatives, these offset increases in raw materials cost, the depreciation of most of our operating currencies in Central America and Argentina, and the higher concentrate costs in Mexico. Importantly, as discussed in our earnings release, we are resuming the recognition of tax credits on concentrate purchased from Manaus Free Trade Zone in Brazil, beginning in the second quarter. As a result, we've registered an extraordinary MXN 1.083 billion in our cost of goods sold for the fourth quarter. This amount is equivalent to the accumulated credit suspended since 2019 and until the first quarter of 2021. Notably, this decision is supported by the recent developments and opinions from external advisors. Considering these effects, and despite the gradual normalization of certain operating expenses, such as marketing and labor costs, our operating income increased 41.3% versus 2020, and 14.4% versus 2019. Additionally, our operating cash flow increased 21.7% year over year, 9% higher than our 2019 baseline, despite a comparable that includes significant non-cash effects related to currency fluctuations during the preceding year. Finally, our controlling net income increased 38.9%, driven mainly by our operating income growth, coupled with a decline in other non-operating expenses related to the impairments of MXN 903 million recognized during the same period of 2020. Now I will expand on the strategies behind the resiliency and innovation of our portfolio position in Mexico, our Mexico operation for long-term growth and continued success. First, we are driving this market's recovery through a consumer-centric, multi-category portfolio that is leveraging our execution capabilities and ability to provide affordability to our consumers. As a result of our initiatives and the gradual normalization of mobility, our volumes during the second quarter grew across all our beverage categories. Volumes, excluding bulk water, increased 3.9%, driven mainly by 19% growth in still beverages and solid 47.5% growth in personal water. This recovery is only low single digits below our 2019 baseline. Indeed, in June, we closed the quarter flat compared with 2019, despite unfavorable weather in Mexico. Notably, during the quarter, we successfully launched the new formula and visual identity of Coca-Cola Sin Azúcar, or Zero Sugar, with a great reception from our consumers as we continue to incentivize growth of our non-sugar portfolio. We are convinced that affordability will remain an important growth driver in Mexico. For this reason, we continue investing behind this core capability. During 2020 and 2021, we have invested more than MXN 140 million in production lines and returnable bottles and cases. Additionally, the launch of our universal bottle, or Botella Única, which enables us to use the same fillable bottle for brand Coca-Cola flavors and even non-carbonated beverages, such as Valle Frut, is delivering better than expected results. It has allowed us to gain up to three percentage points of share in our flavored sparkling category, and its success in non-carbonated beverages has also been outstanding. Notably, Valle Frut has become our second leading brand in terms of volume in this attractive presentation for our consumers where we have launched it. We are also working on complementary distribution models to increase our service loads, reflected in double-digit growth in emerging channels such as distributors and wholesalers. Speaking of complementary channels, our home delivery routes continue to achieve double-digit revenue growth. We have already introduced 266 additional routes that are enabling us to better serve our consumers' needs directly to their homes. We are implementing these top-line growth initiatives simultaneously with initiatives that enable us to operate as a leaner, more profitable Mexico operation. These strategies, which began in 2019 with the implementation of our Build for Growth program, have allowed us to generate savings of approximately 250 million MXN. As we moved into 2020, our Mexican operation redoubled its effort to generate costs and expense efficiencies, achieving an impressive MXN 4 billion of additional savings. Most importantly, our ability to generate efficiencies freed up resources that became sustainable savings for us to reinvest in the market, our collaborators, and our infrastructure. Our cost and expense efficiencies over the past two years have allowed us to consistently increase our operating income and operating cash flow in the face of an uncertain, involved environment. Today, our Mexican operations profitability is ahead of 2019, and we've maintained a significant amount of savings that we generated during 2020. Finally, we must underscore the acceleration of our digital initiatives in Mexico. Notably, we are now serving more than 100,000 clients through our WhatsApp omni-channel platform, and we began to pilot test our B2B URL-based platform called Juntos. Looking ahead, we are confident that we are positioning for our Mexico operation for long-term continued success. Our team is guided by clear strategic priorities to continue building solid capabilities while continuing to generate the necessary efficiencies that enables to us to invest behind our growth and transformation. Now let me shift gears to provide you with an update on the rollout of our omni-channel digital platforms. During our previous conference call, we noted that our chatbot-enabled business WhatsApp platform, which enables seamless order taking with an enhanced customer experience and lower cost to serve. We're serving more than three hundred thousand active clients in Mexico, Brazil, and Guatemala. To give you a sense of our rapid rollout, during the second quarter alone, we increased the number of clients served by an additional fifty thousand. Notably, in Brazil, our most advanced market in this rollout, volume stream sold through our WhatsApp platform represent more than 5% of our total volume sold in the country and growing. Finally, we are ecstatic to announce that we have enhanced our cooperation framework with the Coca-Cola Company. Over the years, our companies have continuously worked together to build a very successful, long-standing relationship. This solid relationship has enabled us to successfully navigate ever-changing macroeconomic and industry dynamics by driving a consumer-centric mindset and a fundamental transformation in the way we operate when collectively go to market. In order to continue strengthening this relationship and to adapt it to new trends and opportunities, our companies recently concluded conversations that resulted in an enhancement of our cooperation framework, announced previously, ensuring the necessary alignment to guide our business relationship in the long term. This enhancement is designed to ensure long-term alignment in the following key areas. First, growth plans. We have agreed to build and align long-term strategies and business plans to ensure coordinated execution. These growth plans aim to increase our operating income via top line growth, volume expansion, cost and expense efficiencies, and implementation of marketing and commercial strategies and productivity programs. Second, relationship economics. This is to ensure that the economics of our business and management incentives are fully aligned towards long-term system value creation. This provides additional certainty on the levers that regulate concentrate pricing going forward, fully directing our focus towards our shared objectives, always considering investments and profitability levels that are beneficial to both The Coca-Cola Company and Coca-Cola FEMSA. Third, potential new businesses and ventures. As the system continues to evolve, we agreed to explore potential new businesses and ventures such as distribution of beer, spirits, and other consumer goods. Lastly, through a joint general framework of digital initiatives, we acknowledge the great opportunity to develop a joint digital strategy across strategic corridors. The above is consistent with James Quincey's comments during the Coca-Cola Company's earnings call last week, and I quote, "We are working together to improve distribution economics and open new revenue streams by providing other CPG brand access to our deep customer relationships and distribution network." And I close the quotes. This new relationship model is great news for both of our companies. It further strengthens our relationships, ensuring long-term alignment, partnership, and certainty, positioning us to accelerate further towards our shared purpose of refreshing the world. In summary, we continue to deliver on all of our strategic fronts, from strengthening our relationship with our partners to building a solid portfolio while accelerating our digital initiatives, all while continuing to successfully navigate what is still a complex dynamic environment. Once again, we are confident that our mitigation actions and our positive momentum positions us on the right path to continue achieving our targets for the year. With that, I will now hand over the call to Constantino. Thank you, John, and thank you all for joining us on today's earnings call. I will now expand on our division second quarter highlights. Beginning with Mexico, our top line increased a solid 12%, driven mainly by pricing initiatives and the gradual recovery of our price mix. On profitability, our successful raw material hedging strategies have enabled us to expand our gross margin despite increases in commodity prices and the higher concentrate costs in Mexico. Specifically, we can confirm an increase in concentrate costs for sparkling beverages in Mexico, which is effective this month of July. This increase not only is in line with previous adjustments, but also is part of our mutually beneficial relationship for the long term. Together, we will continue to invest behind the market to continue driving growth. Moving on to the expenses front, during this quarter, we began to see the expected normalization of certain operating expenses, such as marketing, labor, and maintenance, while we maintained a disciplined approach to savings and efficiency. We move to Central America. Our operations delivered another solid quarter. We have seen double-digit volumes, driven mainly by a 15.9% volume growth in Guatemala, which continues to grow consistently over time, as well as solid performances in Panama and in Nicaragua, as these markets continue to recover from the very strict lockdowns and distancing measures they've experienced. On the pricing front, our average price declined as our revenue management initiatives were offset by the negative currency translation effect over Central American currencies into Mexican pesos. Exemplifying our operational excellence in the region, we're extremely proud that The Coca-Cola Company recognized our Guatemala operations as the best in Latin America in terms of execution, reflecting our relentless focus on operational excellence. As a result of all this, our quarterly revenues increased 10.5% in the Mexico and Central American division, and 4.3% if we compare them to the same period of 2019. Our operating income in the Mexico and Central American division increased 9.3%. Finally, our operating cash flow increased by 5.2%. As John previously mentioned, we will continue to focus on driving our cost savings and operating expense efficiencies that, coupled with the raw material hedging strategies, make us confident in our ability to protect margins for the remainder of the year. We move on to our South American division. We're encouraged by a 17.9% volume growth, which was driven by double-digit growth in all of our markets. In Brazil, we again delivered a solid performance, with volumes increasing 15% in the face of significant lockdowns at the beginning of the quarter. Moreover, in Colombia and Argentina, our volumes increased by 23% and 29%, respectively, while Uruguay reported a 14% increase. Comparing this volume performance with the second quarter of 2019, our South American division's volume increased 6.8%. Our revenue management initiatives, recovering price mix and volume growth in the division, were partially offset by currency headwinds, driven primarily by a 12.6% unfavorable translation effect from the Brazilian real. Despite these headwinds, our top line increased by 11.7%. If we exclude our currency translation effects, our top line would have increased 29.9% during this quarter. We work continuously to enhance our affordability through our returnable presentations and continue gaining share across our territories to ensure sustainable business growth. Despite all of these currency translation effects, our gross profit in South America increased 32%, representing a margin expansion of six hundred and fifty basis points. This increase was driven mainly by our favorable raw material hedging initiatives, cost efficiencies, and the recognition of 1.083 billion MXN related to the resumption of tax credits on concentrate purchased from the Manaus Free Trade Zone in Brazil. Our operating income for the division increased significantly, even with the normalization of these extraordinary tax effects recognized during the quarter, as we cycle through a low comparable base in 2020, resulting from the effects of pandemic across our South American division. Now, let me expand on the raw material hedging strategies. We have hedged all of our PET needs for the remainder of 2021, and we have hedged almost 60% of our 2022 needs at prices that are slightly below the ones for 2021. Notably, for 2021, we have also hedged around 75% of our aluminum needs in Mexico and almost 80%, eight-zero, in Brazil. On the sugar front, we have covered around 70% of our sugar needs for the year and almost 50% for 2022 at very attractive prices. Now, we're confident that these strategies will continue to allow us to protect our profitability in the upcoming quarters as we move into 2022. Now, I would like to expand on our financial results, which reflect our initiatives to strengthen our balance sheet and our financial position. Our comprehensive financial results recorded a slight increase as compared to the previous year, driven mainly by foreign exchange loss, as our net debt exposure in US dollars was negatively impacted by the appreciation of the Mexican peso. This effect was partially offset by lower interest expenses, driven mainly by the payment of short-term financing incurred during the first quarter of 2020, and the payment at maturity of a Mexican peso-denominated bond for MXN 2.5 billion. I would really want to underscore Coca-Cola FEMSA's financial strength, which is once again reflected in a strong balance sheet and solid cash flow generation. As of June thirtieth of 2021, our net debt to EBITDA ratio closed below one time, compared to the 1.13 times at the end of 2020, while we closed the quarter with a cash position of more than MXN 46 billion Mexican pesos. Additionally, highlighting the strength of our cash flow generation and our confidence in Coca-Cola FEMSA's solid financial position, on May fourth, we paid the first installment of the 2020 dividend in the amount of 0.63 MXN per share, with a total cash distribution of approximately MXN 5.3 billion Mexican pesos. This dividend represents an increase of 3.7% compared to the dividend paid during 2020, and a 42.4% increase compared to the dividend paid during 2019. With regards to CapEx, as we mentioned on our last call, we have budgeted a ratio of approximately 6.5% to revenues for the year as we continue to focus on increasing our affordability capabilities across the markets. Importantly, we will continue to take a very disciplined approach to capital allocation, which is customary in, in the way we do business at Coca-Cola FEMSA, using our cash control tower methodology to ensure that we maintain solid cash flow generation for the remainder of the year. I'm very encouraged to see solid recovery trends in our business. Even as we continue to operate under volatility and uncertainty, our ability to navigate challenging environments and the success of our mitigation actions bolster our confidence in Coca-Cola FEMSA now and into the future. We will continue to focus on generating efficiency and maintaining a conservative approach to capital allocation, while we continue to explore different avenues for growth to continue creating value for all our stakeholders. Talking a little bit more about beer, I would like to move on to Brazil and provide you with an update of a redesigned distribution partnership with Heineken in this market. The approval process progressed as fast as we expected, and the new distribution agreement became valid as of May. However, as we discussed during our previous conference call, given the challenging COVID-19 environment, the transition has experienced a slight delay. We now expect to begin the transition during the upcoming weeks in the third quarter of the year. It's important to mention that we have been working together with Heineken and the Coca-Cola Company in all the necessary preparations to ensure a very smooth transition for all of the clients and consumers. Additionally, good news, Tiger, one of Heineken's top global brands, has been launched in Brazil. We're already distributing this product in our South Brazil territories, and we see a great potential. It really complements our beer portfolio in the high growth, mainstream, pure malt segments. Fantastic product and fantastic brand. Finally, and equally important, sustainability plays a fundamental role in our corporate strategy. With this in mind, I encourage you to visit our first green bond report, which was published on June thirtieth of this year. In this report, we provide you with an update on the allocation of the use of proceeds from the green bond issued last year, focused on three main categories that we believe we can create the most positive impact with: circular economy, water stewardship, and climate action. As is customary with these bonds and in line with best practices, we reported on the use of proceeds for the look period for 2018 to 2020, allocating $235 million, or more than 33%, of the proceeds from the green bond. With that, I will now hand the call back to John for his final remarks. Thank you very much. Thanks, Constantino. We have a clear vision for Coca-Cola FEMSA. With our renewed purpose, culture, and strategy, we are confident that we are taking the right steps to develop future digital capabilities as we accelerate to deliver sustainable long-term growth and shareholder value. Importantly, through our enhanced cooperation framework with our partner, the Coca-Cola Company, we are strengthening our long-standing successful relationship that remains one of our key strengths. Although the overall operating environment remains uncertain, we are confident in our capabilities to continue delivering on our targets for the year as we continue to protect our employees, ensure a safe work environment while supporting our clients and communities. In short, we are confident that we are on the right path to emerge as an even stronger Coca-Cola FEMSA. Thank you for your continued trust and support, and for being with us today. Operator, I'd like to open up the call for questions. Thank you, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question. We'll pause for just a moment to allow everyone the opportunity to signal for questions. Thank you. Our first question comes from Felipe Ucros with Scotiabank. Thank you. Good morning, John, Constantino, and team. Congrats on the results. No questions on that front. But maybe I was wondering if you could give us an update on the Diageo pilot in Brazil. Any updates you can give us? But more importantly than the status, maybe if you could tell us about the lessons that you've learned so far from the spirits pilot, and what you expect from that going forward. And then maybe in second place, if you could also give us an update on the JV in Colombia. Just wondering if there's any developments on the regulators front. Thank you. Mm-hmm. ... Hi, Felipe. It's Constantino. Go ahead, John. Go ahead. No, no, I was just gonna say on the, on the Colombia piece, there isn't any new news. The, you know, we're at the same situation we were last quarter. And, you know, we continue to have very strong relationships with ABI, and, we're talking about how we proceed going forward, but we do not have anything concrete yet to announce. And on the, the Diageo piece, I'll let Constantino talk about that. Yeah, thank you, John. Felipe, thanks for the question. Yeah, as you mentioned, we continue to evolve our relationship and pilots with Diageo in Brazil. I think there's a series of interesting, so you know, to answer it very straightforward, that particular piece, we're moving on, and we're expanding, as you know, every day, on a slightly broader footprint, within still within a pilot environment and framework. Having said that, yes, we've done some interesting analysis on the performance. It's. First of all, it's very positive. Once you have segmented properly the channels and the portfolio, we're seeing an overall benefit across all of the portfolio. We are seeing upticks in our core portfolio, where we go with the total beverage solution, which I think is the most relevant highlight. There's definitely a complexity in this market as the arrangement of the current distribution footprint in the spirits category is very complex. It has many players involved and controlling the execution is always something that's complex. In our case, that's, I think, one of the biggest benefits, being able to go directly and call in directly on the stores and the on-premise accounts and being able to control execution. That also delivers a significant benefit to the portfolio. All in all, we're also learning a lot from promotions, cross promotions with our portfolio and Diageo's portfolio. And we're starting to identify interesting opportunities, not only on the promotion side and co-execution, but also on the innovation side. So there's a lot of learning on that end, and we continue to be very optimistic of that, you know, that development. I hope that clarifies and provides some color to the question, Felipe. Yeah, very clear. Very, very clear. Thanks a lot for the, for the color on that, Constantino and John. Maybe if I can do a short follow-up on market shares. I'm just wondering if, at this point, are you seeing any signs that your ability to adapt during the pandemic and provide affordability options is translating into share gains on the way out of the pandemic? Yeah. Yes, we are. Yes. As we had discussed, I think one of the bigger things that we're looking at is initiatives in delivering affordability, and affordability through returnable presentations, whether it be single-serve sizes or multi-serve sizes. And as we complement our portfolios in a lot of different ways, either through returnable and refillable multi-serve plastic refillable bottles or glass refillables, we're seeing enhanced share gains in the categories. But what's really exciting is that we're continuing to roll out a you know a universal bottle. And where we're replacing that you know we're having you know not only Coca-Cola products placed in that bottle, but also flavored products be placed in that bottle. When we launch that, and in Mexico, for example, where we have the most experience with it, we're seeing, you know, a one- to three-point share gain in flavors in the CSD side. But the incredible growth is also coming from non-carbonated, as we put value through them, so the share gains that we're seeing across NARTD in general, given the affordability, is very large. When you start talking about, you know, plus ones, plus twos in NARTDs, that's huge, and this is something we're doing all over our territories. I think, you know, our ability to maintain and grow share is something that, you know, we feel very confident about. Great. Thanks a lot for the color, guys. Congrats on the results again. Thank you. Thank you. Our next question comes from Marcella Recchia with Credit Suisse. Hi, John. Hi, Constantino. Thank you for taking my questions. I have two questions, if I may. The first one is about Mexico. You mentioned about concentrate cost increase and also the normalization of operating expense. So, my question is, going forward, how can we reconcile both of them with respect to the evolution of your margins in the region? And, my second question is, if you can share with us what are your expectations in terms of EBITDA margin paths in Brazil from retaking IPI tax credits again? Thank you so much. Jorge, you wanna take that one? Sure, Constantino. Yes, yes, absolutely. Yes, Marcella, it's Jorge here. So I would say first on the Mexico piece, you know, in Mexico, I would say that, yes, there is an increase on the cost of concentrate, that as we flagged before, it was likely to happen. It was in line with previous adjustments, and for that reason, is manageable, right? And then we have the piece about the raw material hedging strategies that Constantino also mentioned during the remarks, and the normalization of certain operating expenses, such as marketing, labor, and maintenance, right? If we put all this together, what we're thinking, Marcella, is that we're very confident on our ability to protect margins, during the remaining of the year, right? We have price mix improving as well. That's the piece on the expectation, I would say, for Mexico going forward. Perfect, um- Sorry, Marcella, and you mentioned the second piece of your question, sorry. Yeah, sure. Basically, in Brazil, if you can share with us in terms of a margin impact, what are you expecting as tailwinds from retaking IPI tax credits again? Yes, Marcella. Yeah, on that I would say yes. Yes, sorry, Constantino, yeah. On that I would say, Marcella, what you can consider for, let's say, on a quarterly normalized amount for IPI tax credits going forward, should be around MXN 120 million, right? So this should represent approximately 100 basis points, additional to our South America division expectations for this year, this including the one-time income that we recognized during the quarter, right? And of course, this number, around MXN 120 million, would depend on, you know, seasonality, timing of inventories, et cetera, but I think it's a fair estimate that you can consider going forward. Got it. Thank you so much. Which is based on the 8% that we have in the IPI in Brazil right now. Got it. Thank you very much for the clarification. Thanks, Marcela. Thank you. Our next question comes from Ricardo Alves with Morgan Stanley. Good morning, John, Constantino, and Jorge. Thanks for the call. Sorry if I missed a few of these in the preliminary remarks, but quick questions on Brazil volumes. You know, we were very positively surprised with your performance in Brazil, already significantly above nineteen. So just if you could share a little bit more details on the main drivers here. I appreciate it's a combination of factors, right? But you know, if there's a couple of them that you could... you think it's worth flagging, you know, for example, how your competitors are doing, how you're doing relative to your competitors, and perhaps, you know, even if there's something that is boosting demand here that you think is not sustainable over the coming quarters. That's question number one. Mm-hmm. You wanna get that, Constantino? Sure. So Ricardo, basically, what, what you know, what I would say is, you know, it's first of all, it's consistency. I think that Brazil is very typical in terms of how Coca-Cola FEMSA operates, which is being very consistent with the value and the growth drivers that we have across all of our operations. And here, I would say it's a big part of that is moving and continuing to adjust our portfolio towards affordability, and this basically is all around multipacks, returnables. And on the other hand, a lot of this is also driven by our heavy digital presence, right? We're growing in the digitally native channels, you know, very in a very accelerated fashion. And we're, you know, we're adapting to these new shopping habits that the consumers have, right? Which have been even more reinforced during the pandemic, right? So that's one piece. We're definitely seeing a rollout of our, you know, WhatsApp for business, which John mentioned in his remarks. I mean, we have more than 200,000 customers using WhatsApp for as a platform of engagement. And this is about 50% of our total customer base, right? So we have also been able to capture some orders that previously we would lose because of traffic, because of a certain amount of circumstances that we're now capturing, recapturing with the digital initiatives, too. So that's one piece, and the outcome of that is market share. And we have seen considerable increase in market share in Brazil, also very, very consistent. We're growing basically in all of the categories in Brazil, which has also been a trend for the last, you know, few quarters. And that's, I think, the consequence of a lot of consistency and great execution. So that would be my take on what's going on in Brazil, and we expect that to continue. It's now ingrained in the way we do business. It's part of our operating model, and I don't foresee any significant changes in that regard. So we grew in CFDs, we grew in teas, we grew in energy drinks, we grew market share in juices, and those are record levels, right? In cola, energy drinks, and teas, we're seeing record levels of market share. So I think that all in all, when you put all of these things together, there's a good case of consistency and operational excellence overall on the commercial front. I don't know, John, if you want to add something. No, Ricardo, I think it's... I'm really, really very pleased to see what Brazil is doing. And first of all, you know, as Constantino said, it's as a result of many things, but first of all, it's continuing to have excellent execution. ... and taking that execution not only from a physical world to a virtual world, okay? Where we're doing a lot with the WhatsApp platform and giving our customers, you know, the customer journey experience that they require. And secondly, I think there's a focus on affordability, okay, through returnables and multi-packing. And multi-packing, we continue to expand our multi-packing on multi-serve, that capability continues to grow. But we will also be focusing and continuing to focus on single-serve multi-packing expansion. So there's a combination of things that are going on that are just continuous builds on efficiency, on focus, and on execution, that allows Brazil to be, you know, where it is. And I think, you know, we'll continue to gain momentum. And what is very encouraging, too, is to see that although we are taking a little bit longer with the transition from beer, you know, there are strong brands coming in from Heineken to be able to go out there and continue to build our momentum in Brazil. So overall, we see a very consistent growing strategy in Brazil that is now clear of the tax effects, okay? As you know, what was a little bit of an overhang. And the beer, as you know, whether the beer dilemma was there or not, and I think that's solved. So we're very confident going forward with our Brazilian ope ration. Yes, indeed, quite impressive. Thanks for such a detailed answer, and second, I mean, I think that John, you kind of already touched on that. Second question was on Brazil beer, and a couple of questions on that. Just if you could repeat, I think I missed when exactly you think you guys are gonna be able to roll out the new agreement over the coming months, and then maybe, you know, we've discussed Tiger in the past. You touched on that as well. But is there anything more at this juncture that you can share with us in terms of what would be the next steps? You know, just as an example, I mean, given the higher flexibility that this contract is providing you, I mean, do you actually think that there could be, you know, other avenues of growth within beer at this point? Sure. Thanks again. Matias, do you want to take a crack at this? I guess not, Matias. Let me... John, it's Jorge here. I may be taking the first part of Ricardo's question. Sorry, I was on mute. No worries, Matias. Let me take the first part of Ricardo's question about the timing of the transition. So Ricardo, the timing of the transition, what Constantino mentioned during the remarks, is that we expect it to begin in the upcoming weeks. So we expect that to begin during the third quarter. We are expecting that around August, September. It's still, you know, the final date to be defined. But what's important as well, as Constantino mentioned, is that we are already working in everything that has to do with the back office, right? Everything with Heineken and the Coca-Cola Company, to ensure this transition is as smooth as possible to our clients. Okay? Yeah. I would add, which I thought we were saying that Tiger in the call this semester, Tiger is already launched in the south of Brazil, and we're gonna complement the launch, as Jorge was mentioning, in this quarter, throughout our territories. And in addition to that, we're working for new launches with the operation to launch and complement our beer portfolio in Brazil. And to your last comment, we already talked about Diageo and the pilots that we're running with them, so that will also complement our portfolio in Brazil in different categories. And initiatives like that, we're constantly evaluating and we'll have news soon. All right. Appreciate all the color. Thank you so much. Thanks, Ricardo. Thank you, Ricardo. Thank you. Our next question comes from Álvaro García with BTG. Hey, good morning. I have a couple of questions as well. My first one is on the new cooperation framework. I was wondering if there was anything to say specifically about the economics of distributing things like beer, that maybe weren't set in stone in the past. So any specific comments on how the economics might have changed or maybe how much more fixed they might be than the past with this new agreement? That's my first question. Thank you. Do you wanna take that one, John, or you want me to start? Sure. Look, you know, Álvaro, there. Hi, how are you doing? And first of all, I think on the economics going forward, the economics that we have really are with the brand owner. And you know, it depends on the premiumness or the non-premiumness of the portfolio that we're looking at, but they're pretty much in line with what we had before. And the way we're looking at it is, okay, we're swapping out brands, or we're rolling out brands. Plus, we have within our agreement, you know, the ability to increase, you know, or to have our own, if you want, other international brands put in there that are not Heineken brands, so that also gives us the ability to magnify margins over time. So I think, you know, it's similar, but it gives us, the agreement gives us a lot more flexibility to enhance portfolio and also to enhance margins. Constantino, you wanna add to that? ... Yeah, I think that's in regards to our current Heineken setup, as John mentioned. In regards to the Coca-Cola Company, we have, as John mentioned in his remarks, we definitely have developed a new framework that allows for us to work on, you know, on other non-KO portfolio products, which include beer, in the rest of our markets, wherever this makes sense for the business. We have sorted out some, you know, some economic framework around that, but this definitely something that we want to keep to ourselves. We'll, you know, it's confidential, so we'll keep that reserved within the Coca-Cola Company and us. But we'll definitely have the ability now to continue to develop a much more expanded portfolio that goes beyond Coca-Cola products. Particularly, once more beer and spirits, wherever we believe that makes sense for the system in order to enhance a, I would call it a customer-centric value proposition that allows for, you know, expansion of our Coca-Cola portfolio, which includes alcoholic beverages and non-alcoholic beverages as of today. Great. Thank you. Alberto, does that answer your question? Yep. Yeah, it seems like more of the same, or sort of in line with what we had discussed in the past. So that's very helpful. I thought maybe there'd be a, you know, something new as per this new agreement, and my second question is more a clarification more than anything else. You mentioned in your prepared remarks that on the mix front in Mexico, you've recovered six out of ten points. I was wondering if you can clarify that and maybe give us a bit more color as to how you see mix recovering in the second half. I don't know if that was six out of ten percentage points, or if that was a six out of ten index. If you can clarify that, that'd be great. Thank you. Yes, Alberto. Hi, it's Jorge. Yeah, I can take on that last piece regarding the mix. So to give you a sense, what we had is, you know, single serve in Mexico usually is around 35% of the mix, let's say pre-pandemic. What we saw last year in, you know, the second quarter of 2020, that shifted towards multi-serve. So that means that single serve was reduced to approximately 25% of the mix, and now we have recovered approximately 6% of that mix, right? So we still have about four percentage points more to recover to reach again pre-pandemic levels. I don't know if that clarifies your question, Alberto. Yep. Alberto, this is Constantino. The drivers behind that are there. There's an external factor, which is mobility. The more mobility, the more impulse and on-the-go consumption, so that helps, and on the other hand is also the adjustment of our brand price pack architecture, right, and our revenue growth management initiatives, so the combination of both elements is driving that recuperation of the single serve. Right. And Álvaro, the most impacted channel we had last year was the on-premise traditional channel. So, you know, the small mom-and-pop restaurant, you know, they just went out of business. So that it was a tremendous impact for us and a major one for them. So as they start coming back online, we're seeing that recovery, and we're seeing more and more openings as we store openings as we go forward. So I would say that, you know, as you're trying to show, you know, as we've recovered six points of those 10, and probably by the balance of the year, we've recovered most of that. That's great color. Thank you very much. Mm-hmm. Thank you. In the interest of time, we do ask that you please limit yourself to one question. Our next question comes from Carlos Laboy with HSBC. Yes, good morning, everyone. John, can you please expand on what has changed in the evolution of both Coke and Coke FEMSA that seems to be naturally taking you to trust each other more? It doesn't, from the outside, seem to be just personalities. It seems to be deeper, more institutionally grounded, something that outlasts people. To put this trust and common values, if you will, to the test, are you at a point yet where you can start talking about taking out redundancies from both sides? This is something that's always been delicate and a bit elusive. Okay. Thanks for the question, Carlos. And I think, you know, there are a significant amount of major structural concepts that have changed. And, let me start out by saying that the first one, and the one that has moved a lot, has been the Coca-Cola Company. And, in our opinion, you know, the ability to go out there and think from a consumer and customer-centric position to see what is required to satisfy, You know, consumer needs and customer needs, today, in an environment where technology is driving a different way of competing, you know, has led them to think and has, you know, and has led us to think together on what is it the way we need to consume? How do we have to serve customers? That basically is taking us from a single point of contact between the Coca-Cola system, you know, and the client, to a platform thought mentality, so that we can go out there and start, you know, erasing and solving friction points for the trade. And I think that's a huge mindset shift, and I think you saw that in the quote that James had in his earnings release. And I think it's also part and parcel about what we have agreed upon in our new relationship framework going forward. So I think the first thing is there is this understanding and the realization that, you know, technology is driving change, technology is driving the way we compete. Technology will drive different ways of customer preferredness or, you know, where customers are going shopping, and we have to change along with that. So, you know, I think, you know, we're going to become more and more of a platform solution for customers, and Coca-Cola is definitely on top of that, and with that. I think the other thing that we recognize is that secondly, it is a partnership. We can't do it alone, and this new economic framework that we put together with the Coca-Cola Company is one that gives us, Carlos, you know, the framework was announced in 2016, and this cooperation framework is now enhanced, and basically what it enhanced for is territorial. First aspect is, you know, the 2016 cooperation framework was based on Mexico. This cooperation framework covers all of Coca-Cola FEMSA. And what it does is gives us certainty of a couple of things. First is, you know, we both believe that we have an enormous amount of growth opportunities going forward. Secondly, what we, you know, I think it also gives us is a framework on which to look at how, you know, how we, we both invest together and how we're looking at returns together. So, you know, all of a sudden, there's not an unbalanced way of looking at the either side profitability. So it gives us certainty going forward as to, you know, what is, you know, our, our perspective, you know, on returns, given investments. And, and I think, and that's a midterm to a long-term proposition. And I think that leads to, okay, the trust that you're talking about, okay? It leads to the fact that once we have this in place, that we have to start meshing together online and offline capabilities. That is basically meshing together, you know, knowledge-based, consumer-based information like the Coca-Cola Company has, with really business to business and what we do on the operational asset side piece, so that we come offline to online. You know, then we start taking out a lot of redundancies because you have to work much more seamlessly. I think the foundations for trust are definitely there. I think the capabilities that we're developing are extremely powerful, and I think the relationship that we have with the Coca-Cola Company along those lines is excellent. And, you know, we're working together very strongly on a very shared vision going forward. Thanks, John. Does that answer your question? Hello? Hello. Hello. Thank you. We'll move to our next question. Our next question comes from Isabella Simonato with Bank of America. Thank you. Good morning, John. Good morning, Constantino. I have two quick questions. First of all, regarding the new framework with Coke, right? And you mentioned the diversification of the portfolio, right? The potential to diversify the portfolio in different markets. This is just to make sure I understood correctly, this is only on distribution, or as is happening with the new Heineken agreement in Brazil, eventually, you're pursuing production of other types of beverages in other markets? Just to make it clear that I got it correctly. And thinking about production itself, like in beer, which I understand that the agreement with Heineken gives you some flexibility. Is this the first option? I mean, eventually, do you think that becoming a brewer is part of the plans and, and competing this segment more head-to-head is, an interesting avenue of growth in your view, or this would be more of an alternative, in case it's needed? Or, I mean, the idea initially with the Heineken agreement is to distribute the brands that are going to be launched and eventually, partner with spirit, with spirits company, things like that, and then producing other types of beverages will be a third option. Just to understand how you're thinking about this agreement. Thank you. Sure, Isabella, thanks for the question. Let me try to clarify this. The framework that we have in place right now with the Coca-Cola Company is basically something that, again, is based on customer centricity. And what it basically does is go out there and find, through a collated manner, a portfolio of either products or services, okay? That would allow us to enhance the relationship of the Coca-Cola portfolio with the retailer. And in that sense, okay, what the objective is not to sell other things, okay? Which is a byproduct. It is to sell more of the Coca-Cola portfolio, along with other things that satisfy our customers. The point being that what we are looking for is distribution and enhancing distribution at this point. When we start thinking about beer and the Heineken experience that you're talking about in Brazil, you know, there isn't. It is not in our thinking to become brewers. What we would want to do is complement the portfolio of beers that we distribute, okay? If there is a customer and consumer need for it. But it's not our vision to become brewers in Brazil or elsewhere. So what we're thinking about is how to become really a solution for retailers and consumers without getting into the asset intensity of brewing or having to do brands, okay? And it's not necessarily our business. So what we're looking for is customer and consumer fronting, execution and distribution opportunities. Juan Antonio, do you want to add anything to that? Yeah, just to emphasize what John is saying. I mean, I think we're pretty good at what we do. So we're great at distribution and a great commercial platform in all the markets where we're present. In the case of Brazil, I think that it's a great demonstration of when you couple specialization and great players in what they do, right? So in the case of Brazil, we're blessed to be working not only with The Coca-Cola Company, which is a fantastic brand builder, but we also have a great beer partner in Heineken. We have a great relationship with Monster in energy. So when we put together great execution and focus on the commercial side, commercial engagement and distribution, at the same time, great brand building with great products, we think we have a, you know, a phenomenal opportunity to grow. Which is also the case in the pilots that we have with Diageo and some other potential partners. So that's the idea at the end of the day. It's being able to leverage thinking with the consumer and customer in mind, a customer-centric platform with great brands and with, you know, top of the game execution and operational excellence on the distribution and commercial side. So that's where we want to focus, definitely not on the beer making side or the production beyond what we do in terms of the Coca-Cola Company portfolio. I hope that clarifies it. No, that is super, super clear. Thank you very much. You're welcome. Thank you. Our next question comes from Luis Willard with GBM. Hi, guys. Good morning. Thanks for taking my question and kind of on the results. Maybe another follow-up on the agreement with Coca-Cola. My question is, what have you learned so far from your experience in distributing beer in Brazil that you think can be applied to the rest of the territories, given this one with the Coca-Cola agreement? That would be the question. Thank you. Constantino, you want to take that? Sure, Luis, thanks for the question. I mean, the distribution of beer in Brazil has gone, you know, for a long time, right? We've had a, we call it our first stage relationship with Heineken, and then this renewed relationship that we're, you know, beginning to put together this year. And as we mentioned in hopefully early in Q3, right? So there's a lot of learnings. I mean, first of all, once more, there was a previous question around that, more on the Diageo and spirit angle. But there's definitely the most important learning is that there's and there's definitely certain synergies in some particular channels, in some markets, under some circumstances, right? So you have to identify that opportunity, that segment, and the type of portfolio that can drive those synergies, not only operationally, but also thinking with the customer in mind, which is something that is once more critical for our model today and even more so going forward. It's a customer-centric value proposition, right? So when you think about the customer first and you understand what are his needs, then you can put together a synergistic portfolio that can be executed properly with efficiency and with value creation on that side. So that's one, you know, that's one big learning. The other one is that's definitely a category where innovation is a must. Consumer trends and consumer changes are, you know, something that's continuous in the beer category. So we need to have beer partners that are adaptive to the circumstances, and that's why, you know, I mentioned a great partner that we've had with Heineken in Brazil. So the ability to not only create great brands, but also be on top of the game and drive the proper innovations for both consumers is fantastic. And then finally, very basic, but execution is a key driver of growth and service level for the customers. And that is also something that we know we cannot compromise. Our digital initiatives that we have put forward and that we're rolling out across all of Coca-Cola FEMSA have that in mind. So we're not looking at reducing sales calls or, you know, or eliminating the physical sales call... In our model, that is the center of everything, and we just do an overlay of digital tools and touchpoints that enhances the value proposition, and that definitely allows for an increased execution and for driving growth on the beer category, so I think those are the three key learnings that I could share with you all in all. I hope that helps. I guess the last one is, you know- Yeah. To do what we need to do and fulfill what we need to fulfill in terms of thinking about solving customer pain points. You know, that is a very important category for us to play in because of the volume it represents for a customer. That's something that we're gonna continue to focus on. Super clear. Thank you very much. Mm-hmm. Thank you. Our next question comes from Antonio Hernandez with Barclays. Hi, good morning. Thanks for taking my question. Well, you've already mentioned your expected ability to maintain margins in Mexico, given price mix and your different strategies. But I just wanted to see if you could quantify a little bit more on what was the impact from concentrate costs and also from the higher marketing labor and maintenance expenses, and if you're expecting this also going forward, and maybe what amount? Thanks. Jorge, you wanna take that one? Sure. Yes, hi, Antonio. Yeah, on the margin piece, I would say first on the concentrate, I would say, yes, concentrate is minimal, and in the guidance that we have given for concentrate on a twelve-month basis, it's an amount of around $35 million. So when I say minimal, I refer to this guidance that we have previously provided, and that we can offset with other savings and price and mix and the initiatives that we are implementing. So I've... I mean, the adjustment is there, of course, but I wouldn't, you know, flag that as a big, bigger piece. And the second piece around marketing and labor, Antonio, in Mexico, to give you a sense. Marketing, and we are cycling, of course, the second quarter of the previous year when obviously the pandemic started, and we cut back on expenses, and we were focusing on efficiency. So we- the amount of marketing, the increase in marketing that we're looking at right now is in the range of around 50%, right? But it's, you know, getting to more normalized levels, which would be around 3% to sales, right? And on the labor, it's similar. In the labor, what we have seen an increase year on year would be something around the 10% range, because obviously we last year also, we delayed certain bonuses and compensations, and then we paid them, so we have that comparable effect. Okay, so does that clarify your question, Antonio? Yes. Perfect. Thanks a lot, Jorge. Thank you. Cool. Thank you. Our next question comes from Lucas Ferreira with J.P. Morgan. Hi, guys. Thanks for taking my questions. Two follow-ups on Brazil and agreement with Heineken. The first one, you mentioned in the fourth quarter earnings conference call that you expected, you know, about beer volumes to drop by around 40% and your margins something like 50 basis points for South America. Do you think these estimates now look conservative? And so we're seeing strong volumes, guys optimistic on the ramp-up of the agreements and bringing Tiger in. So my question is, do you think this is still valid, or it sounds like a conservative right now? Obviously, with taking aside the IPI number you just gave. And the second question also- Let me take that before your second question, just to get it out of the way. Okay. This is definitely conservative. Those estimates, we're considering a transition beginning in May. Now we're looking at a transition at hopefully, you know, around September. So I would think more around 20% rather than the 40% that we talked about in the fourth quarter call. Okay? So that's definitely one that you can- Just a quick note on that as well. Lucas, you mentioned volumes, but that guidance or expectation was for beer revenues, okay? Just to clarify. Exactly. Okay. Exactly. Okay, yeah, that's right. Sorry, I... But that's amazing, guys. The second question was more about the strategy in Brazil now with this new agreement related to the digital strategy. Mainly when you think about, let's say, the B2C and also the, you know, the platform that, for instance, Heineken has with their own clients. My question is if you guys gonna have similar digital strategies, or in other words, to somehow even compete when getting your own, let's say, delivery apps, delivery platforms straight to the final consumer? Or do you foresee that there might be another partnership for instance, a single app where I can get delivered, you know, Heineken and Coke and all the brands, so if that would make sense, or do you foresee maybe you guys having separated platforms to deal with your customers and the end customer also? That's my question, if that's clear. ... John, you wanna take that one? I heard every other word of it, so I didn't quite understand it. I'm sorry. Okay. Okay, let me repeat the question, John. You wanna, I can take it if Carlos wants to. I think the question was, if I understand correctly, is whether we're gonna stay serving on the digital front, mainly through WhatsApp, or we're thinking about a platform and an app that incorporates other categories, as well. And if that was the question, I would say yes. You know, plans, we have an omni-channel strategy, that contemplates, a platform, a multi-category platform to serve, with all our portfolio, the customers that we have. And we're gradually implementing, that. Today, the WhatsApp is the channel that serves that very well, with a lot of engagement and very good results. So we're growing out of that, and that will be eventually all communicated and flowing, to the presence of the clients. Yeah. Sorry, Lucas, I didn't quite understand the question. But yes, in that term, we are looking at not only... You know, an omni-channel platform has a lot of different components, and obviously, the WhatsApp is one, you know, URL is another one. You know, we have this, you know, interconnected with our, you know, sales force mobile Salesforce automation system, the Handheld, and our back room, our telesale system. So when you think about it, it is a whole platform that we are creating, okay? Which we will be also using to invite other CPG companies on, to be able to distribute other categories through there, okay? Whether it is, you know, through direct wholesaling, you know, or a purchase and sell of a product or through a wholesaler model, where they can plug into this platform and leverage up on the relationships that we have. So that's where we're going with that. Thank you, John. And just to clarify, so Heineken can have their own strategy, you guys can have your own strategy, and what will there be like a connection between the two, eventually a partnership? Or in other words, if I am an end customer, I wanna buy, you know, Heineken, but I also wanna buy- Mm-hmm ... some Tiger. Mm-hmm. Will I have, uh, a single platform and or will I have, uh, to, to go into, you know, two different apps to get my, my beer delivered? Uh, and you guys have, gonna have also Sales force, so how is that gonna, gonna play out? Mm-hmm. Mm-hmm. No, no, at this point in time, the portfolio we would handle is the one we have on our site, on our application, our omni-channel platform. That doesn't mean that we could not, you know, cross-sell on each others. But, you know, we haven't had those detailed discussions yet. Okay? Thank you. But as of today, Lucas, just to clarify, it, to your point, yes, if a customer, an on-premise account, wants to buy the Heineken brand after the transition is in effect, they would have to go through the Heineken platform- Mm-hmm ... or route to market, and if he wants to buy Tiger brand, they will go through our platform and our route to market. Okay? Exactly. Mm-hmm. Perfect. Thank you very much. Thank you. Our next question comes from Sean King with UBS. Great, thanks for the question. I apologize for belaboring this point, but I'm trying to understand the change to the relationship economics. Would it be wrong to interpret it as an adjustment to the instance-based pricing model, you know, to allow sort of sharing of the economics of the non-Coke brands, which are increasingly important to Pepsi's portfolio? Or is there really no change? This is really to drive, you know, customer synergies with an expanded portfolio to drive Coke system profits, and that the concentrate pricing is sort of business as usual. Okay, yes. You wanna, you wanna answer that one? Sure. We're not getting into the details into that level of the agreement. But I would say it's not the same, and it's not just helping within the portfolio, but clearly that's the most important thing with regards to our strategy together with the Coca-Cola Company of incorporating other categories. Okay, got it. Thank you. Thank you. This concludes today's Q&A. I would now like to turn the call back over for closing remarks. Well, thank you all for your confidence and interest in Coca-Cola FEMSA. They are very interesting times and very changing and dynamic times. We are, I think, executing on all our strategic fronts, and we're seeing increased momentum in all sides of our business. As always, our team is available to answer any of your questions, and I thank you for the confidence and interest always in Coke. Thank you very much. Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.