Alsea, S.A.B. de C.V. (OTCPK:ALSSF) Q3 2022 Earnings Conference Call October 28, 2022 10:00 AM ET
Company Participants
Salvador Barragán – Investor Relations Officer
Miguel Cavazza – Supply Chain Director
Armando Torrado – Chief Executive Officer
Rafael Contreras – Chief Financial Officer
Conference Call Participants
Sergio Matsumoto – Citi
Alvaro García – BTG Pactual
Antonio Hernandez – Barclays
Rodrigo Alcantara – UBS
Salvador Barragán
Good morning, everyone and welcome to Alsea’s Third Quarter Earnings 2022 Earning Video Conference. Today, we will have presentations from our Chief Executive Officer, Armando Torrado; our Chief Financial Officer, Rafael Contreras, Miguel Cavazza, our Supply Chain Director of Alsea Mexico and myself as company’s IRO.
Now, I would like to hand over to Armando for his initial remarks. Please Armando.
Armando Torrado
Good morning, everyone, everyone, and Thank you for joining to our third quarter 2022 earnings video conference. I’m excited to discuss this quarter results with regional and brand performance and other strategic developments.
Looking at the results of the third quarter, we are pleased to report a year-over-year increase in net sales of 25.5%, reaching MXN17.5 billion, representing more than MXN3.6 million increased versus the third quarter of last year.
Same-store sales posted an increase of 30.5% compared to the third quarter of 2021 and an impressive 31.4% compared to pandemic third quarter 2019 results. EBITDA post IFRS 16 was MXN3.5 billion for the quarter, up 10.6% year-over-year, leading to an EBITDA margin of 19.9%.
Our operation cash generation was healthy at a MXN5.1 billion compared to MXN3.6 billion in third quarter of 2021, allowing us to continue to deliver our company. We continue observing a strong trend in consumption in all our geographies, and the result third quarter reflects this with demand holding up, still holding up, the speed, the backup or challenging macroeconomic conditions, especially in our region of Europe.
During our third quarter of the year, we were impacted by important increase in energy expenses in Europe, where in the previous quarter this represent only 2.6% of sales. In the Korean quarter this was 4.2% points that was in the report that you already saw.
Given that, at the end of June, a contract we had a fixed price and expiration there in the in our fixed prices that we already report. In this regard, I want to point out a couple of points regarding electricity.
During the quarter, the highest point in price, which was 584% higher versus the historical cost, and approximately €45 per megawatt. This was observed in the month of August, but has now been showing a down trend until today.
Actually, I’m going to present later on. I mean, here you have the chart that you can see how is that trend coming down, especially demand in the month of October. Secondly, we have review the various options offered by the market in terms of contracts for the supply of any of electricity, stable prices.
However, given the current market conditions and due to the lack of visibility, or what we have in Europe, we prefer to be cautious and not close a long term deal at this moment. However, we will be monitoring the situation closely, trying to make the right decision in case we see a good opportunity to lock fixed cost of the next three to five years if possible.
Since my appointment of a CEO back there in July, I visit more than 100 stores out across our regions. I was able to connect with our talent and hard working team members affording me with some valuable insights, including ways that we might be able to dip in ties with some other clients and supplies.
Additional, I was happy to verify that I’ll say, has a solid portfolio in our brands with a diversified offering products and consumption occasions. And the right team to operate our brands and support a successful business model.
Also, I came away with a deeper understanding of our strengths as a company and areas of opportunity across our region some brands. One such area is very clear that potential that we have as an opportunity to become our older technology that we are again to have a better operation, so as the same in digital platforms in our brand countries where we haven’t developed them yet.
We added 37 new corporate restaurant across all regions in the third quarter, totally 92 for the first nine months of the year. We are in line with complying with our guidance of opening more than 170 stores in 2022.
We plan to build on the success that we’ve seen over the past years with our expansion strategy. We are currently working on our strategic plans to work 2026, looking into the opportunities we have ahead in the current market holding capacity data that we have been sharing in our Investor Day in the first quarter in 2023.
We find ourselves now in a good position to take advantage of the market opportunities, speed all the macro conditions that are outside of the control. We ended the quarter with more than 4300 stores and more than 74,000 collaborators in our company.
Finally, I would like to give a quick overview of our main achievements in sustainability matters. Regarding ESG strategic, within the work done with our imbalance pillar, we have invested over MXN186 million since the beginning of the year to acquire Energy Star self certify equipment for 72 new stores in Mexico. This gives us our store efficiency electricity uses.
We are also processing with our many offerings to well healthy plant based products. During this quarter as part of our growth pillar, we made an alliance with NotCo to respond to the demands of our consumers. And we are looking for the lesions and balance options in plant based products alternatives for our customers.
This alliance also has a positive impact in our balance speeder and contributes to our goal of reducing our carbon footprint. In line with our strategic Spain and Portugal, the offer of [Indiscernible] made up plant based milk reach over 20% of all expressive products sales and we are already offering new vegan snacks at Starbucks.
Also in Burger King Argentina, we have expanded our vision, vegan menu adding meat free nuggets in addition to already existing veggy whopper and the veggie king. As well, I would like to share that as of today, our sale remains in fifth position out of a 95 companies that are were evaluated in the restaurant category for the S&P global corporate sustainability assessment of the Dow Jones Sustainability MILA index.
We know that much remains to be done regarding ESG to meet expectations and it of all our stakeholders. We are working on a critical route and plans to achieve key milestones on our 2030 goals.
Now, I will have you again with Salvador for him to have a more detailed overview on our sales and report trends. Thank you very much.
Salvador Barragán
Thank you, Armando. As Armando mentioned before, sales during the quarter increased 25.5% year-over-year, and we continue to see a better performance compared to pandemic levels, With 20.9% growth versus the second quarter of 2019.
Excluding the FX effects, sales increased close to 38% versus 3Q 2021. Our solid business model and the strategic calls made over this past couple of years have proven to be effective.
After the pandemic, our customers began returning to our restaurants. However, performance in food delivery continues to be solid, making a 15% year-over-year sales increase in the third quarter.
We serve more than 11.1 million orders by home delivery, accounting for 16.7 of total sales in the quarter. A slight slowdown in share versus last quarter, mainly related to the upward trend in on-premise sales.
Digital channels and technology based solutions continue to be fundamental pillars in our long term growth strategy. We are currently working on exciting digital solutions for our Starbucks and Domino’s brands that will be rolled out over the next few quarters.
In Starbucks for example, the all encompassing digital platform called Starbucks Digital Solutions will expand ecommerce delivery, loyalty programs and payment methods. While at Domino’s Pizza, we’re developing advanced in-store displays to help our customers better explore our menu options, improve ticket size and reduce labor costs.
Regarding our core brands, the same store sales growth year-over-year of Starbucks in Spain and France was in the mid to high 30s range. While in Chile and Mexico we’re close to 30%. This quarter marked the 20th Anniversary of Starbucks in Mexico. We are very proud of this achievement and what it means for the country.
We were also glad to announce the MXN4.5 billion investment in Mexico from now until 2026. And that will we will earmark for Starbucks new store openings, renovations and improvements.
Domino’s Pizza in Spain and Mexico represented a 15% and 12% comparable sales world. Domino’s Pizza in Colombia reported a mid single digit decrease in same store sales compared to the third quarter of 2021, mainly due to a menu restructure, cutting out some aggressive promotions which impacted orders however, improving margins. And finally, Burger King presented increases in Chile, Mexico and Spain of 15%, 14% and 13% respectively.
Vips continue as well with a strong recovery in Mexico, reporting a 30% same store sales growth compared to the 3Q 2021. While Vips in Spain reported a strong same store sales increase of 28% versus the same quarter last year. And we are introducing innovative products to our breakfast menu that have been very well received by our Spanish customers.
In spite of the cost increase, mainly due to inflationary pressures in raw materials and non recurring benefits related to agreements negotiated with some of our strategic partners in the 3Q 2021 pre IFRS figures, EBITDA figures in the third quarter 2022 increased 12.9%, reaching MXN2.1 billion with an EBITDA margin of 12.3%. Excluding the exchange rate effect, EBITDA increased 22.7%
Costs as a percentage of sales rose 200 basis points year-over-year, reaching 32.9%. Given the ongoing inflationary pressures, we have demonstrated how the cost control strategies we have deployed to counter inflation our working.
We have also been proactive as a company in mitigating the global inflation scenario. And later on, Miguel will be talking through some initiatives that we have implemented particularly in Mexico that have helped us navigate through these cost headwinds.
Looking at our region’s geographies, Mexico sales increased by 25.3% year over year with an adjusted EBITDA increasing by MXN558 million to MXN2.5 billion. We are pleased with Mexico’s continued excellent performance in the face of rising inflation and declining purchasing powers in real terms.
Sales in Europe grew by 12.5%. However, due to increased costs and expenses, adjusted EBITDA that was MXN386 million lower at MXN1.1 billion. In the face of major increases in inflation and energy expenses, the sales number in this region showed the resilient demand and consumer preferences for our brands.
The contraction and adjusted EBITDA margins in the region were also impacted by non recurring benefits from the previous year related to some agreements with our strategic partners both on the cost side and in royalties.
At the same time, we’re working on mitigation efforts such as carefully studied price increases, negotiating long term agreements with suppliers, and using our dynamic display menus and apps to guide customers towards higher margin offerings.
Finally, in South America, we posted a strong 51.9% sales increase while adjusted EBITDA was MXN865 million, representing a 56% increase year over year. South American solid figures are mainly the result of a strong demand decrease SG&A, successful product innovation and digital strategies.
Now, I will leave you with Rafael for him to give you a more detailed overview of our results in balance sheet situation. Raphael, please go ahead.
Rafael Contreras
Thank you, Salvador. Our net income for the third quarter increased 13.2% to MXN336 million. This increase was mainly due to our MXN328 million increase in operating income, resulting from the continuous positive trend in sales, commercial strategies, product innovation, development in digital applications, as well as improved cost and expense control efficiencies.
We have been able to keep the strong recovery trends since the first quarter of 2021, achieving an earnings per share of MXN1.90, including IFRS 16. Our EPS rises to MXN2.26 per share.
Regarding our debt profile. As of September 30, 2022, our gross debt decreased MXN4.1 billion year-over-year, closing at MXN27.8 billion. This reduction in depth corresponds mainly to the devaluation of the Euro exchange rate against the Mexican peso and debt amortizations during the period.
Year to date, we have paid down MXN1.3 billion with MXN275 millions to be paid in the fourth quarter. We feel comfortable with the current maturity curve and debt ratios that we are achieving.
Our debt ratings were upgraded by Fitch and Moody’s in the quarter. On September 18th. Fitch Ratings upgrade our foreign and local currency long term to WB along with our unsecured and senior unsecured notes.
Fitch also upgraded our local currency long and short term ratings. Likewise, Moody’s upgraded our CFR, and senior unsecured rating with a stable outlook. These upgrades recognize our operating performance, our quicker than projected the leveraging, revenue growth across all regions, improved margins, our portfolio of brands continues to gain market share, superior product offerings that meet consumers preferences, and our investment strategy focused on expansion modernizations and innovation.
Regarding our covenant, we complied comfortably during the quarter. On the gross debt to EBITDA ratio, we ended the quarter with 3.2 times. EBITDA to interest paid in 3.6 times and net debt EBITDA 2.6 times. The minimum liquidity covenant is set at MXN2.2 billion with us posting MXN5.1 billion in cash for the quarter.
The data structure at the end of the quarter was 96% long term, with 66% in Mexican pesos and 34% in euros. We expect the leverage going forward and meet our all of our debt covenants. Thank to our healthy and ongoing cash generation
In line with our CapEx plan, without sacrificing needed investments, we spent MXN2.5 billion during the first nine months of 2022, of which 40% was allocated to maintenance, as we keep catching up, following the pandemic. 49% went to store openings and remodellings and 11% for IT and some other strategic products. Out of the 98 stores openings that we achieve in the first nine months of the year, 60% are Starbucks and 22 Domino’s Pizza units.
I will now like to hand the call over our Supply Chain Director of Alsea Mexico, Miguel Cavazza, who will give us a deeper insight on our supply and sourcing strategies. Thank you.
Miguel Cavazza
Thank you, Rafael. Good morning, everybody. Today, I want to share with you what’s a proven capital for last year supply chain constraints that we are aware of them such as lack of availability of products, lead times, transportation cost, inflation and quality.
Since 2020, when the pandemic started, we took some specific actions to mitigate the lack of availability and prices increase. We work with vendors to reduce costs and also to prove our logistics key indicators expenses and results.
From procurement, we have some key initiatives with new hedging in commodities and also an FX rates. We follow key market indicators such as the Chicago Mercantile Exchange, USDA or [Indiscernible] and others.
We are negotiating meet long-term fixed prices agreements. Also we integrate the planning process with strategic suppliers. So one year in advance, we plan our demands, we adjust our lead times, volumes and the suppliers can secure raw materials so they can have an anticipated manufacturing plan. And with that visibility for most parts, we have win-win agreements and have the best logistics indicators and cost for the companies.
Also, we anticipate seasonal purchases and we’re looking for new items around the world to support innovation program. Also, we execute some physical pre buys. And for example, our cheese vendor is the most important supplier for Alsea Mexico.
We have a consolidated strategy partnerships in 1990. Through third years, he has been the main cheese, the main pizza cheese supplier for Alsea Mexico. And the Domino’s Pizza in basement the supplier has developed for us here a unique best in class pizza cheese formula key on Domino’s Pizza success. Year over year, we have increased our volume supply partnership.
We have integrated the plan and process. So we adjust the volumes and delivers one year in advance. We execute a pre physical buying during some key months of the year where the cheese price is lower than the average price of the whole year.
Supported annual volume forecast the supply is one of the step ahead securing milk supplies in advance to cover Alsea volumes demand. With this process we secured both price and availability.
The last year results of the Alsea Mexico price list versus the National Index consumer price, the team has been delivering better costs than the market. We continue working hard to mitigate prices increases as we mentioned, having long term relationship with our strategic vendors. Also we spend a lot of effort improving our key logistic indicators to be contributed advantage for Alsea Mexico.
In each stock we achieved a 99.3% of availability of products or brands. We have increased 42% in-all in productivity since 2019. And finally our transportation cost since 2019 have a reduction of 19%. Also, we can mention that after doing benchmark, our total low tickets cost is 35% lower than other logistic foodservice competitors.
From the quality perspective, we have a strong quality program in the company. There is a supplier approval and development program implemented for food and packaging materials. We will include food safety, quality and social responsibility criteria.
Regarding food safety, our suppliers are required to be certified based on international criteria established by global food safety initiatives. Additionally, there is a surveillance program implemented in house with our own laboratory where we test products while most suppliers run randomly.
All our distribution centers have been food safety certified on SQF, safety quality food standards in the last few years. Our cold chain management is we monitor and control daily with a detailed traceability program from the vendor to our stores.
Our internal quality insurance system name SIGICA, Alsea food safety and quality integrated management system has demonstrate compliance with international requirements. Due to the last two years ago, our manufacture operators are SQF certifies
Before closing the presentation, we want to share with you that we’re very proud because Logistic in Mexico has won the Premier National Logistic 2022. The Logistic National Award is the highest decoration that is given to the logistics sector to professional companies that due to their contribution to the supply chain had managed to become senior most with efficiency, competitiveness at the national level.
Thank you all. We can go to Q&A.
Question-and-Answer Session
Operator
We will now start the Q&A session. [Operator Instructions] The first question is from Sergio Matsumoto from Citi. Please go ahead.
Sergio Matsumoto
Thank you for taking my question. I want to ask a question about the European businesses. We for the [Indiscernible] that the energy is higher. But how about the cost? Do you seeing anything limited service that’s discretionary. You can give us some sense of the customer base. And also, does the current situation affect the store development plans in the next couple of years? Thanks.
Armando Torrado
First of all, I would say, Sergio, we have seen a strong trend in terms of consumption still in Europe up to this quarter as well. So, like we mentioned in the presentation, Vips in Spain, having close to 30% gross same store sales. Same Foster’s Hollywood as well has a mid 20s same store sales figures. So, we haven’t seen actually a slowdown. Third quarter for sure, we still saw positive tourism effect, and people going out quite a lot. But so far, we haven’t seen any major slowdown. And that’s what’s it’s been helping pretty much overall the business in Europe.
Like we mentioned before, and you also mentioned recently, the main concern right now is energy prices going up. And on the competitive base, if we take a look at what happened on 3Q 2021, we did had some benefits from some arrangements and we reached out with some of the main suppliers that we had on the cost side and as well some royalties that helped out in 3Q 2021. And it’s not helping right now because of the competitive base.
For your second question, I guess on the expansion plan, we do not see any setback on where we are right now planning going ahead. So, the target to open between 170 to 200 stores for these years is still on for the whole company, exactly. And even with the concerns that we see in Europe, we’re not moving away from the current guidance in terms of openings.
Sergio Matsumoto
Understood. Thanks.
Operator
Thank you very much for your question. Our next question is from Mr. Alvaro García from BTG Pactual. Please go ahead.
Alvaro García
Good morning, gentlemen. Thank you very much for the space for questions. I have one question for Armando and the general defensiveness of Domino’s and Vips. I was just curious if you could sort of speak to affordability strategies and how you’re thinking about transaction growth or defending transactions into next year. I was just wondering how you think of those brands of how defensive they maybe into next year? Thank you very much.
Armando Torrado
Thank you very much, Alvaro. Regarding Domino’s, I mean, we have still, I mean, very strong in the consumption of our customers, especially we are raising around 1100 orders in Colombia, 1000 orders per week here in Mexico and also in Spain. I just was with the people of Domino’s and we are looking to a strategy of service anyway, we are just to make an idea, we are delivering right now over average of delivering in pizzas serve less than 21 minutes. So, regarding with service, we are putting a new technology around all our geography next year starting in February or March that is called a DSS. And that DSS technology also with a GPS in our system will get us to around 21 to 19 minutes per stores delivery.
So that is a big, big advantage with all the consumers. And whenever we would see lower times of delivery, we will see increase of orders and increase of MPS, and increase of satisfaction of the consumers. So, name of the game for in Domino’s that will be the strategic of get the best service and the best product and that will keep us up to get in better orders in order to the competition. Regarding Vips, Vips in Spain, as Salvador said and Raphael said is very strong, and we’ve been seeing just tremendous growth in all the company. Here, it seems 15 more or less and the trend of sales has been going up. And it’s been every week better than ever.
In Mexico, yes, I mean, the mobility of persons still around, still going up. We have a lot of stores here in Mexico City area that are tracking better numbers every week regarding over 2019. But it’s been not recovered at the levels or at the pace that we want it to see. So that’s going to be a challenge for next year. But I think we are in a better and a good situation regarding our portfolio brands that we see. I mean, in all geographies, as Salvador said, we are having just a good demand over consumers and in all brands too. So we feel very secure or affordable of what is going on especially we have next eight weeks and our growth, we’re going to open quite a lot of stores in that next eight week.. 94 stores we’re going to open in this quarter being probably the record that we ever done.
So, and Christmas is in November 4th, we’re going to launch our Christmas strategy in Starbucks that is going to be very strong as it’s been in the past years. And also with an [Indiscernible] also in Vips. There’s going to be the World Cup coming on also in 28 days, that for us is just going to be an amazing opportunity for Chili’s, for Domino’s, of course, another brand. So we are ready to get to closer, a great year, regarding demand.
Alvaro García
Wonderful. Thank you very much, Armando.
Operator
Thank you very much for your question. Our next question is from Mr. Antonio Hernandez from Barclays. Please go ahead.
Antonio Hernandez
Hi, good morning. Thanks for the questions and congrats on your results. My question is regarding, given the different consumer trends, in one hand, you have higher mobility and of course, that’s helping casual dining and the different formats such as you mentioned, Vips for example. And on the other hand, you have of course, inflationary pressure. Is that driving a kind of a trade down in any of your different geographies? Or have you seen any shift or any impact from a trade down perspective within the different regions? Thanks.
Armando Torrado
As we mentioned, we don’t see it a trade down yet, no. What we are forecasting is if something is going on in terms of demand or in terms of a recession in Europe or in the U.S. that can affect Mexico. We think we have the portfolio of brands that can catch up this trade down from fine dining to casual dining, from casual dining to QSR or to QSR to family dining. So we think that we have the diversified portfolio to catch that trade down if it’s going to be in the next year. But we don’t know exactly the amount of trade down that we can have for the next year. But we don’t see it yet. We see a greater strong demand in the top line in the company.
Antonio Hernandez
Okay. Perfect. Thanks.
Operator
Thank you very much for your question. Our next question is from Mr. Rodrigo Alcantara from UBS. Please go ahead.
Rodrigo Alcantara
Hi, guys. Can you hear me? Hello.
Miguel Cavazza
Yes, we get we can hear you, Rodrigo.
Rodrigo Alcantara
Thank you. Thank you Cava. My first question would be for Armando. Just curious on the comments that you said at the beginning of the of the call of the areas of improvements that you see mainly on the digital front, because that you partially already answered this with the case of Domino’s in New Mexico. Just curious if you — first, is it fair to say that Domino’s Pizza in Mexico are real like the standard for what you want to achieve for digital for the rest of the countries at Domino’s? And what about the differences that you perceive on the digital space? Let’s say on a Starbucks, perhaps? That would be my first question to you.
And the other one for Rafael would be, I don’t know if that’s a way to take advantage of the strength of the Mexican peso. I don’t know if it’s on your plans to perhaps accelerate some amortizations there that you have in your Vips. So what’s curious about the net loss that have reported in the quarter. If you can comment us about that, that will be helpful? Thank you very much.
Armando Torrado
Thank you for your call. Regarding that digital aspect. I mean, we’ve been working in Domino’s in the last nine months with a company in Canada call Bounteous. And we’re going to launch in the next quarter, I mean, we are already in pilot test, where we’re going to launch in the first quarter next year, our new web, our new app, and our new native app that it will be just an incredible journey for the consumer, very close like that a journey and experience that the U.S. have. And that has a lot of especially in convertibility of orders. We will see a better performance in our application. I mean, we want to achieve 75% digital orders in Domino’s and also in Starbucks. I think we have a good strength there to digitalize all the orders that we can.
As soon as we digitalize a customer, we can see that there is a better — more loyalty, better ticket average and better frequency. So, we are aligned to do that. In order of Starbucks is the same. We are we’re going to show you probably in the next quarter conference, we will show you a little bit of what is going to be our strategic plan for the next year. And there is like Salvador says, there is a new technology called SDS Starbucks Digital Solution that we already are taking in place. In Latin America we’re going to do the implementation next year. And that’s going to be also a native app run by us that it will give us mobility of more mobile order and pay. It will give a different kind of loyalty program that is called Stars for everyone. That’s it’s already held in the U.S. with extraordinary results. And that going to be also platform from delivery. So we are very anxious and optimistic about our digital SD strategy for the next year. So I will show you that in the next quarter for sure. So you can be a little bit more aligned of our future regarding digital.
Rafael Contreras
Okay. For your second question, in term for the Mexican peso, we decided to increase the number of months in terms of the FX hedge that we have for the inputs that we have here in Mexico. So right now, we have hedge 65% of the next 18 months of the imports product that we’re going to have. And that hedge, it’s around MXN10, MXN20.10. Then in terms of the cash position that we have, or the capital allocation, we’re going to decide next year, first in terms of the CapEx that we’re going to invest next year because we have in terms of IT some pretty good investment for Starbucks. We’re going to change all the POS and some of the IT product that we have. in Mexico and LatAm, we already did that in Europe. And in Europe, that’s going to help us to put my request in Europe that we don’t have a yet and in Colombia also.
So, if we have some free cash flow for the next year. After the CapEx , we’re going to decide if we prepared part of the buyable credit that we have here in Mexico. Now we have some part with cyber [ph] that we can prepare next, that is buyable. And also the bank credit that we have with Bancomext that also buyable. So we can decided to prepaid part of those credit that are with our buyable rate. Then in terms of — because of the pretty good cash position that we have right now, we decided to buyback some of the shares. We see that shares is with a pretty good price to make a buyback of the shares. And we already buyback MXN700 million in shares. And also we’re going to decide next year, if we can sell some of those brochures, but we’re going to decide it in the board meeting next year.
Rodrigo Alcantara
Okay, that’s great. So the idea there is that you can potentially cancel the shares, right?
Rafael Contreras
No. These shares, we can potentially cancel them.
Rodrigo Alcantara
And about the net loss, or the minorities that we saw in the quarter?
Rafael Contreras
Well, in a debt loss that we saw in this – that loss that we have in the quarter was mainly due to the European participation and the FX also that we have in Europe. That we have Euro lower than the MXN20 right here. And that helped us in the debt position. Because in Europe, we have €460 million in debt. So when we put it in pesos that helped us around MXN3 billion, more than MXN3 billion pesos.
Rodrigo Alcantara
Okay. That’s great. Thank you very much Rafael and Armando, Cava.
Operator
Thank you very much for your question. [Operator Instructions] That was the last question. I will now hand over to Mr. Armando Torrado for final comments. Please go ahead.
Armando Torrado
Okay. Thank you very much for your time. Thank you very much for the conference. And I mean, as I said, we are pretty busy right now in the best quarter that I’m sure, we will report then in February when we see you again. Things are coming along well. External situations as energy came to a negative effect of the quarter. But I’m sure that with a strong sales that we have and the good momentum that I’ll say is having and all the options that we have, I’m sure we’re going to see you hear with a better results and another record quarter as we’ve been presenting and we been really reporting Thank you very much and have a wonderful day. And just thanks again. Thank you.
Rafael Contreras
Thank you.
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