GNMLF (GNMLF) Q3 2026 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. Thank you for joining Genomma Lab's Third quarter 26 earnings conference call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. As a reminder, this meeting is being recorded and will be available from the investor relations section of Genomma's website following the call. I will now turn the call over to Christianne Ibáñez Garcia, Genomma's Head of investor relations. Please go ahead. Christianne Ibáñez Garcia: Thank you, Daniel, and welcome, everyone. On today's call are Juan Marco Sparvieri, Chief executive officer and Antonio Zamora Galland, Chief financial officer. Before we get started, I would like to remind you that the remarks today will include forward looking statements, such as the company's financial guidance and expectations, including long term objectives and forecasts, as well as expectations regarding Genomma's business, products, strategies, demand, and markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially. They are also based on assumptions as of today, and the company undertakes no obligation to update them as a result of new information or future events. Let me now turn the call over to Mr. Juan Marco Sparvieri.

Thank you, Christianne, and thank you everyone for joining our third quarter 2026 earnings call. Let me open with the quarter highlights. First, our recovery plan is reversing the trend. As we anticipated. Mexico improved for a third quarter consecutive. Sellout returns to growth. And market share is recovering with Suerox reaching a historic high at the leading retailer. Second, EBITDA margin reached 21% in line with our expectations. This reflects our deliberate decision to invest more in the business in promotional activity, and commercial spending to accelerate growth. And third, net margin expanded 168 basis points to 11.4%. And net profit grew 18.6%. Driven by lower financial expenses and a favorable foreign exchange result. Last quarter, we told you we expected a continued gradual recovery during the second half of 2026. The third quarter confirms that the recovery is underway. Turning to Mexico, Net sales declined minus 2.4% a third consecutive sequential improvement from minus 4.4% in the second quarter minus 8.6% in the first quarter and minus 22.1% in the fourth quarter of 2025. That is nearly 20 percentage points of recovery in 3 quarters, supported by strong growth in beverage and infant nutrition. More importantly, sell out returns to growth. A sign that consumer demand for our brands is improving. We held or grew market share across all business units and the innovation we launched in late June is already accelerating growth. This view shows the sellout across our monitored retailers in Mexico. Our acid test. Last quarter, we shared that monitored sellout turned positive in the first 2 weeks of July, The full quarter confirmed it, plus 2.7% in July plus 7.4% in August, and plus 8.6% in September. Plus 45.8% in the third quarter. That is a 24 improvement since April, and 27 points above the low point of Q2 25. Month after month, the recovery is holding. At the leading retailer, our largest client, the recovery remains ahead of the curve. Sellout grew plus 20% in July, plus 30% in August, and plus 22% in September. Plus 24% for the quarter and 41 points above the low point of the second quarter of 2025. Last quarter, we said this gliding is a leading indicator of what our strategy can deliver. We continue to execute the same strategy with each of our clients. A key driver of that acceleration is innovation. Since the launch of Suerox, sell out at the leading retailer moved from minus 25% in late May to plus 81% in August. Over the same period, value share climbed from 6.6% to 12.6%. a historic high. Up 6 percentage points in 3 months. These results are at a single retailer so we only may measure but they show that innovation is pulling the brand up and it is why we are accelerating our launches. Now let me put our sellout in the context of the market. In 5.2% a category that declined minus 3%. Personal care grew 5.8% against a category down minus 9.3%. And infant nutrition grew 7.4% in a flat category. In isotonic beverages, our total sellout still declined minus 9.7% while the category grew 2.9%. But where our innovation is on the shelf, sell out grew 39% on average between June and August. That is the gap our innovation is designed to close. Turning to our consolidated results, net sales grew 1.3% reflecting the ongoing recovery in Mexico and 12.2% growth in Latin America partially offset by continued weakness in The US Hispanic retail market. Gross margin was 61.4% a 244 basis point contraction, mainly reflecting the destruction of return products in The United States and higher promotional investment including the fully absorbed impact of Mexico's new tax on non caloric sweetened beverages. EBITDA margin reached 21% down 271 basis points. While our productivity savings reduced SG&A by 1.1% despite higher OpEx and inflation. Net margin expanded 168 basis points to 11.4% driven by lower financial expenses and nonrecurring payroll foreign exchange results. Let me be direct about margins. Last quarter, we said EBITDA pressure was a deliberate choice to prioritize market share This quarter, we chose to step up that investment. In promotion, commercial spending, and launches. Because the returns are now visible in sell out and market share. EBITDA came in line with our expectations. In Latin America, net sales grew 12.2%, and EBITDA margin expanded a 190 basis points to 23.7%. Central America and the Andean region continued to grow on market share gains and traditional channel expansion, more than offsetting lower sell in Brazil where customers are reducing inventories ahead of the country's tax reform. We expect Brazil selling to normalize in the first quarter of 2027. Once the new tax rules take effect. Argentina grew 39% driven by unit share gains in OTC and beverages and a favorable hyperinflation effect. In The United States, net sales declined 30% reflecting distribution gaps amid continued weakness in Hispanic retail market, while sellout declined minus 8.8% in local currency. Suerox allowed maintain double digit growth and ecommerce continued to expand. We are realigning our commercial footprint and distribution model to stabilize performance and support a gradual recovery. We added 1 slide, because there is a significant increase in our cash conversion cycle. That I wanted to explain, and I will let Tonio get into further explanations and details. But what I wanted to highlight is that mostly the increase in the cash conversion cycle is driven by 2 effects. 1, is the Argentine noncash effect that is driven by inflation, and currency devaluation. We have in the base a massive devaluation of the Argentine peso that is causing this effect. Number 1. And number 2 is that deliberate increase in the inventory buildup in Mexico This has been a very complicated year throughout the quarter since January. And because of everything that is going on in the world, with the wars, and shortages that we were potentially facing, and we made a conscious decision of purchasing in advance more than what we normally do of the apis that we require to produce the winter season brands that we expect to be a very strong season in Mexico. We have early signs in this quarter that is going to happen. And we purchased in advance of very massive price increases because of the oil price. So that led to an increase of inventories in Mexico. That coupled with 5 new launches that we have in OTC, and the launch of Suerox Mineral that we needed the inventory to make sure that we can respond to the demand that is coming forward. Okay? So I wanted to provide that perspective. That is what took our conversion cycle from 1 hundred and 29 days to 165. 1 commitment that we are making is that by the end of the fourth quarter, we are going to at least take that number down to 140 days. Obviously, the noncash or inflationary or currency depreciation in Argentina is not going to impact us in the fourth quarter, so that is going to be gone. And the inventory, we should expect to sell most of it in the fourth quarter and the first quarter of 2027. Okay? 1 note that I added in this slide because I know this is a recurrent concern from investors and shareholders is the accounts receivables. Okay. I wanted to explain how accounts receivables is being impacted by the Argentine noncash effect If you exclude that, our accounts receivables remain very much in line with the last quarter. And we expect to maintain that level going forward. So there is nothing affecting the receivables right now. This is mostly driven by the Mexico buildup of inventory and the non cash effect in Argentina. And we will answer any questions you guys have after the presentation. Before I close, let me leave you with 4 messages. First. Mexico delivered what we anticipated. A third consecutive quarter of sales improvement and sell out back to growth. Second, we are growing ahead of our categories in OTC, personal care and infant nutrition with market share stable or growing across all business units. Third, innovation is working. Our late June launch took Suerox to a historic high share at the leading retailer, and we are accelerating launches and stepping up investment to expand market share. Fourth, we entered the fourth quarter with momentum a stronger innovation pipeline, and a solid balance sheet. With working capital expected to improve as the quarter's temporary effect unwind. To close this quarter, to close this quarter confirms that our recovery plan is working. On December 3 in New York at our Investor Day, we will present the new operating model the company's future strategy, and the new artificial intelligence platform in action. I look forward to seeing many of you there. Before I hand over to Tonio, allow me a personal note As we announced, in September, this is my last earning call as CEO of Genomma Lab. I will support the transition through the end of, the year. And on January 1st, Rodrigo Herrera, our founder and chairman will become the interim CEO. I am proud of what we have built together We kept our financial discipline through a difficult consumption cycle. We defended our market share. And today, we are seeing the recovery we work for. I leave confident it will come next Genoa's greatest strength powered by artificial intelligence, I want to thank our team for their disciplined execution their commitment, Rodrigo and the Board for their trust. And you, our investors and analysts, for your support and your candid questions during my time as CEO. Genomma is in very good hands, and I will follow its next chapter very closely. Thank you so much. Tonio, please go ahead.

Thank you, Marco. Thank you for all these years. And good morning, everyone. Our third quarter results reflect 2 realities. Mexico is recovering and we are choosing to invest behind that recovery. At the same time, The United States remained a difficult market And part of this quarter's net income growth came from a positive ForEx result. I will address both of these topics. 3 points framed this quarter. First, sales. Mexico is improving. Net sales trend improved for the third consecutive quarter and sellout returned to growth. Latin America grew 12.2% in Mexican peso terms, and The US declined 30% and remains a principal challenge. Second, margins. Margins declined partly by design. We increased promotional and commercial investment and fully absorbed Mexico's new tax on non caloric sweetened beverages The effect of return products in The US from the past winter season and also weighted on our margins. Operating savings significantly offset inflation and SG&A declined 1.1%. Third, cash generation and liquidity are sound. Operating cash flow rose 12.5% free cash flow rose 5.29 thousand% of our debt is now long term. Working capital increased and I will explain why. In a moment. Net income grew 18.6% with a significant contribution from a forex exchange gain and we will go into the details a little bit later. Let me now turn to the results Revenues, net sales were MXN 4.5 million up 1.3% Latin America grew 12.2%. Which more than offset declines of 30% in The US and 2.4% in Mexico. The 7.3% appreciation of the peso against the US dollar created a translation headwind on our international results. Gross margin was 61.4%, down 244 basis points 2 factors drove the decline. The effect of return products in The U. S. And higher promotional investment including the full absorption of Mexico's new tax on non calorie sweetened beverages. The second was a conscious decision to support growth. The first was not It was the result of a past milder than expected winter season in The US. EBITDA was MXN $945 million a 21% margin, in line with our expectations and 271 basis points below last year. We are accepting lower margins in the near term to invest in growth. The trade off is justified only if it produces sustained improvement in sell out and market share. And that is a standard against which we will evaluate this investment. Cost discipline was maintained operating savings significantly offset inflation and SG&A declined 1.1%. Net income rose 18.6% to reach $MXN 510 million and net margin expanded 168 basis points to 11.4%. Lower financial expenses and a ForEx, a foreign exchange gain more than offset a lower EBITDA margin and a higher inflationary loss on our monetary position in Argentina. The FX gain is nonrecurring and without it, we have to acknowledge that this net income growth would have been lower. Over time, earnings growth has to come from operations. Let's move now into Mexico. In Mexico, net sales declined 2.4%, It is still a decline but it is the third consecutive quarter of improvement. And nearly 20 percentage points better than the low minus 22% in the fourth quarter of 2025. Beverages, and infant nutrition grew strongly. In Mexico, a market that, as we all know, remains soft, we outperform our categories in OTC, personal care, and infant nutrition. And market share was stable or growing in every business unit. Sellout returned to positive territory, and which is an encouraging signal of consumer demand. The product we launched in late June drove 39% sellout growth among customers carrying it and Suerox achieved a record high value market share at our leading retailer. These are early indicators. And we will need to see them sustained. We are accelerating launches and increasing investment to expand market share. As a result, Mexico's EBITDA margin was 20%, down versus last year. And this reflects investments ahead of the sales ramp up we anticipate partly funded by administrative savings. A word on currency before turning to The US the Mexican peso average 17.27 pesos per dollar, Now it is changing, but that was during the quarter. This represented 7.3% stronger peso than a year ago which reduced our U. S. Results when translated into Mexican pesos. The US, as we said before, remains our most challenging market. In The US, net sales declined 30% reflecting distribution gaps amid continued weakness in the Hispanic retail market. Sellout declined less, but still it was a decline of 8.8% in local currency. On the other hand, there are positives. Suerox allowed maintain double digit growth and e commerce continued to expand in that country. We are realigning our commercial footprint and distribution model to stabilize performance We expect the recovery to be gradual. EBITDA margin was 8.6%, down 492 basis points primarily reflecting operating deleverage and the impact of return products from the past winter season which as we mentioned it was very mild. In Latin America, most countries depreciated against the Mexican peso creating as well a translation headwind for the region. Latin America net sales grew 12.2% Argentina grew 39.2%, driven by unit share gains in OPC and beverages and a favorable and high hyperinflationary effect. Excluding Argentina, Latin America grew 1.6%. Central America and the Andean region performed well. With market share gains in OTC and beverages in key markets, and expansion in the traditional channel. Brazil, on the other hand, declined as customers reduced inventory ahead of the country's tax reform. We expect Brazil to selling to normalize in the first quarter of 27 once the new tax rules take effect. Regional EBITDA margin, including Argentina, expanded 190 basis points to 23.7% reflecting operating leverage from higher sales. The foreign exchange result that we mentioned was a gain of MXN 41 million. Compared with a loss of MXN 122 million in the third quarter of 25. During the quarter, we paid down intercompany balances reduced the amount of exposed exposure to different currency movements, And also the Mexican peso is now getting to more normal levels. So this was 1 of the drivers for the net income growth during this quarter. Turning to the balance sheet. As of June 30th, MXN 1.81 billion of our debt was due in 2026 during the quarter, we replaced most of that short term debt with long term with a long term bank credit. We drew on a 10-year amortizing term loan with Banamex, with Banco Next, and we announced last quarter that we also closed a MXN 1 billion unsecured loan with Banamex maturing in 2029. As you can see, this is our maturity profile today. As of September 30, short term debt decreased 63% to MXN 1.2 billion over 2.3 times my cash and equivalents of MXN 2.76 billion 85% of our gross debt is now long term and the net debt closed at MXN 5.24 billion. MXN 94 million lower than in the second quarter. As you can see in this graph, 2027 remains our largest maturity year, We and we continue with our plans to extend maturities and lower our cost of funding as we will present in the coming quarters. Working capital is the area that requires the most attention this quarter. As Marco mentioned earlier. Our cash conversion cycle reached 165 days Up 36 days from the second quarter Receivables increased 12 days. Inventories increased 21 days, and payables decreased 3 days. There are 2 temporary effects that explain 28 of the 36 days which are a noncash inflationary accounting effect in Argentina, 13 days that Marco explained earlier, and a plant inventory build in Mexico of 15 days ahead of the winter season. there is a lot of innovation coming. Including cough and cold launches in the fourth quarter of 2026 and the first quarter of 2027. If we exclude Argentina from these figures, receivable days rose only 3 days. With no material increase in overdue balances. We expect the cycle to decline to approximately 140 days in the fourth quarter as the winter inventory in Mexico sells through and the Argentine effect normalizes. Even at that level of 140 days, it would remain above what it was a year ago and improving cash conversion cycle is a priority. Operating cash flow grew 12.5% to MXN 496 million after a planned MXN 476 million investment in working capital and we also cover CapEx interest payments debt repayment, and dividends. Free cash flow increased 52% to reach MXN 470 million during the quarter, MXN 309 million a year ago. And totaled MXN 1.42 billion over the last 12 months. Our capital allocation, as we all know, seeks to balance 3 objectives: first, investing in the business maintaining a sound balance sheet, and also returning cash to shareholders. On September 30, we paid our 17th consecutive quarterly dividend of MXN 0.20 per common share totaling almost MXN 195 million. CapEx total close to MXN 25 million including MXN 21.2 million invested in our manufacturing plant and distribution center. Net debt to EBITDA is 1.4 times and our debt service coverage is 5.5 times. This gives Genomma the flexibility to keep in the business while meeting our commitments to shareholders. To conclude, this was a quarter of mixed results. And we want to clear. We want to be clear about both sides. On 1 side, Mexico continues to improve, Sellout has returned to growth, Cost discipline help. Operating cash flow increased, and our debt maturity profile is longer. On the other side, The US remains difficult. Margins declined working capital increased, and part of our net income growth, I note, is not recurring. Our task now is to convert the improvement in sell out into sustained sales growth. Bring the cash conversion cycle down to approximately 140 days in the fourth quarter and maintain the financial discipline that underpins long term value creation. Finally, just a reminder that on December 3rd, we will host an Investor Day in New York where the company will present the new strategy and a demonstration of the artificial intelligence agents that will help the company accelerate results. Please register to attend Here you have a QR to do so if you have not done it yet. It will be worth it. it is very important that everybody knows that being there is not the same as attending remotely. it is worth attending in person We encourage again to register. And with that, we will hand the call back to the operator for your questions.

Thank you, Antonio. We will now begin the question-and-answer session. To ask a question, you may raise your hand using the raise hand icon located at the bottom of your screen. To withdraw your question, press the same icon at any time. This will be required in order to allow you to then turn on your microphone and ask your questions. 1 moment, while we hold for questions. Thank you. Our first question will come from Alvaro Garcia from BTG Pactual. Alvaro, please turn on your microphone and proceed with your question.

Hey, Marco. Tonio, hope you are doing great. Obviously, a lot to get into on the working capital front. But I wanted to start off with a with a question for Marco. Just sort of, as you hand over the keys, was curious if you could maybe talk about what, you know, what you are proudest of you know, in your tenure as CEO and maybe what you would see as unfinished business again, as you as you hand over the keys. Thank you.

Thank you, Alvaro. No. I think I think that over the past years, you know, I think that the company has made a huge amount of progress in several fronts. Which I am very proud of. to see and will continue to be proud as we, you know, embark on the new phase of the company. I would say, number 1, obviously, is the commercial expansion of this company. If you look back you know, 10, 12 years ago, this was a company that was mainly focused on the pharmacy channel. Okay? And now pharmacy channel today is 1 of several channels and it does not represent the majority of the business of the country. Okay? That has been a massive achievement for this company. We have opened we went from having 2 customers 2 retailers, in The US to now be serving more than 80 customers in The US. In Latin America, we went from having, a bunch of customers, no more than 10, 15 customers in total. In the sum of all the markets. Today, we serve more than 180 customers in total in Latin America. In Mexico, we were very dependent on the pharmacy channel. Walmart And today, we have a traditional, channel that, represents almost 28%, of the business. That was built from scratch. This was a very hard work that was done by the entire team throughout the year. So that is 1 thing. Second, I would say the startup and the build of all the manufacturing facilities that the company has. If you go back 7, 8 years ago, we. Everything we did, you know, was manufactured by third parties. Today, more than 68% of our business is manufacturing in our own facilities and you know, the greenfield startup of all these plants. It was very exciting, and I think it brought a massive amount of savings in COGS and improvements in quality, for the company. I think the team that the company was able to build over the years Today, wherever you look in the different functions, markets, areas, whatever you see, you know, top level people leading the functions, you know, people with the extraordinary careers from other companies that came to the company trusting they could continue to grow and to add value with us as a company. And finally, I would say that, you know, the very strong relationship that we have with suppliers and customers. I think that is something that, you know, we have built. And I expect, Alvaro, that all these things You know, it is like I do not know if you guys know the. Or read the book, that is called Standing on the Shoulders of Giants, which is basically this Chinese story in which everything in life has a cycle. And every cycle that comes after the 1 that is finishing needs to build on top of what is being left. Okay? I am 100% confident that under the leadership of Rodrigo, and the current leadership team, the company will continue to build on everything that we have done as a company in the past several years.

Yeah. No doubt. No doubt. Thanks for that. And all the best going forward. it is been a pleasure, and thanks for all your help over the years. All the best.

Thank you, Thank you.

Our next question comes from Antonio Hernandez from Actinver. Antonio, please go ahead, turn on your microphone, and proceed with your question.

Hi. Good morning, Marco. That was a great a great round of highlights, and congrats and thanks for all your support throughout these years. Well, my question is regarding Suerox's profitability. How did you manage profitability turn around throughout these last couple of quarters with the IEPS, effect. And, of course, you will take advantage of that in terms of. From a competitive standpoint, having better prices versus competitors. Now what about margins? Our. How was profitability throughout these quarters? Thanks.

Yeah. I do not want to brag too much about this, but I think that this is a world class way of managing the situation by the company and the team. First, when we started working on how to improve, Suerox COGS. That was back in 2020 by the end of 23, you know, we were purchasing the preforms and the labels and the caps from third parties and on a brand that is that is so large, the cost of doing that is very high. Okay? So you know, it was, by chance that we started working on a very large project to acquire the manufacturing machinery that we needed to manufacture our own preforms that got us to a massive improvement in COGS because we were purchasing. Just to give you the numbers, we were purchasing the pre forms at 1.19 from our suppliers. And today, we are manufacturing the preforms at 0.83¢ of a peso. Okay? So that is a huge amount of COGS saving. Same thing with the labels. We purchased the line to do our own labels and we managed to get to a, you know, great negotiation with the caps manufacturer. So when you look at the Suerox, I am going to quote some COGS numbers here, but you need to double check this with Christianne. Later on. But, when you look at our COGS, of Swerox basically, the impact of the COGS was in the range of 1 point. Okay? When you when you after absorbing all the IEPS and getting more aggressive in pricing, Most of that investment was absorbed by the savings that we got in the products on the as I said, the preforms, the labels, and the caps. So it ended up very well. For us.

Perfect. Thanks a lot. Bye, Nizi.

Antonio, this is Antonio Zamora just expanding on Marco's comment. And to give you a sense of the huge impact of this productivity in our Suerox business If I compare the cost of goods sold of manufacturing 1 Suerox bottle today. Versus the cost that we used to pay back in 2021 Okay? Today, our COGS is 21% lower than what we used to pay back in 2021 And, from that point in time, you would need to add a lot of inflation that we were able to offset and create significant productivity. So all of these initiatives that Marco described about the preform internalizing into our plan launching the second line the labels, etcetera. That created massive productivity that obviously helps the Suerox business. Do we like the IEPS tax? Of course not. Of course, that is a having cost that we did not have it. Fortunately, we had all these initiatives and we were able to offset them. And we know it is a very competitive market and, we will continue expanding on productivity initiatives to become even more competitive. But, but a lot has been done in that business. And I think it is remarkable. Thank you, Marco. For all the work that has been done as well as, you know, the team that made all these productivity gains a reality.

Perfect. that is a great achievement. Thanks. Thank you so much.

Our next question will be from Froylan Mendez with JPMorgan. Go ahead. Turn your microphone on.

Hello, guys. Can you hear me? Yes. Perfect. Marco, guys. Thank you so much for your help and support. The best on your next journey. And going into my question, and sorry you touched upon this. I arrived a little bit late to the call. But could you just help us understand the Q3 nonrecurring impact on top line and costs from the recalled inventory returns. If you already answered, I can then check with Christianne and do not lose your time on answering that if you already did. The second and probably the most important 1 on Mexico margin recovery So EBITDA contracted almost 7 percentage points. You did have some sequential improvement in sales. So how much of that compression was deliberate investment versus operating leverage And going forward, what needs to happen for Mexico margins to recover from current levels? Thank you so much.

So the second question, thank you, Froylan, for your words. The second question is on Mexico's margin. Or Yes. In Mexico. Oh, okay. The. The recall is very simple. I mean, in The US, I mean, we had a very, very soft, season this past year. And, normally, this is the time when you start getting the returns from customers. It was a very large amount of product that we put out there in the stores As you know, you know, to be very competitive, you have to have the product at the stores. Not only to have the product. So if someone asks they can they can take it, But also to have displays, you need volume and you know, the presence of the brand at the stores is very important. And for that unit the volume put out there. Okay? that is what we did, and that is what we will continue to do. And as I said in the in the in the discussion, we are preparing here in Mexico and in The US for a very aggressive, commercial competitiveness at the stores at the point of sales with product. We are shipping a lot of products to the stores. Expecting to have a very strong season and expecting to grow market share and win against our competitors. that is what we are going to do, as we did in the past. This is a time when normally, we start getting returns from customers that did not sell the product because of, the tame season. Okay? So that is basically happening in The US. it is a 1 off. And it will not it will not repeat in the next quarters. that is that is the recall and if that clarifies.

Yes. If you have, like, the exact number on impacting revenues and impacting COGS, it would be very useful to normalize going forward if that is not gonna happen. But, again, I can check with Christianne later on.

Yeah. I do not have the numbers by heart, but you can follow-up with Luis. Perfect. And in Mexico is the 1 that Mexico. Let me give you the full picture of Mexico because it is important. Mexico went from a very low margin. I am talking, like, 4, 5, maybe a little bit more, 6 years ago. We were running a business in Mexico with you know, basically sometimes no margin or very low margins in the high single digits or low double digits. In the last, I would say, 4 to 6 years, you know, working on the COGS, working on the spending, working on the s g and a, everything. We managed to take the Mexican margin to the range of 26, 27%, which was extremely healthy. And we were able to sustain that for many years But, I mean, obviously, because of you know, how soft our business got last year, especially in Mexico, We lost market share in some categories. Our consumption got really soft in some channels and customers. We. I made the conscious decision of investing back in the business strongly. Okay? And what you guys are seeing today in terms of the sellout recovery is actually the result of that, where that was, you know, a 100% perfect, you know, the deployment execution and the ROIs of all those investments, I know. I do not think so. But I, in particular, decided to err more on the risky side of investing more. But secure the market share recovery and the sellout. Now going forward, I think that the company has the, fundamentals to, you know, once we see that, you know, our brands are getting more traction like what is happening right now with Suerox. And what is going to happen in other brands after we see the results of the new innovation launches and communication models and so on. I think that the company has everything to you know, gravitate back. I do not know if you know, all the way back to 27%, but it will get closer to that number throughout, throughout next year for sure. All in all, what I can say right now is that the way the financials are structured in the company as a whole, not just Mexico, but as a whole, is that our EBITDA margin will gravitate back to where we were before the decision to invest back in the business, which was the levels of 23% to 24% Overall, as a corporation. Mexico I am not sure we will get back to 27, but you know, it will for sure be higher than 20. Marco, if I may from the innovation initiatives, which you are pushing into the market and probably reflective of this, let's say, investment in margins to pull to put out a strong campaign around the new innovations. Which is the 1 that excites you the most, the 1 that you are betting the most I know you have Xerox Mineral. You have some on the on the Tio Nacho side. You tell us a little bit which 1 is the 1 most exciting? The 1 that has to go right to go back to the 27 margin. No. No for sure, the. it is because of the size of the brand, not because of the quality of the initiative. But because of the size of the brand and how good the product is if you guys tried it, I think Suerox Mineral has a massive potential of adding a huge amount of top line to the company. I mean, I can give you some numbers that are, you know, off the record, but you know, in the customers where the product has been launched, more than 80% of the sales of Suerox Mineral is incremental to the brand. And when you look at the total brand sales, the growth levels are extremely high. In Walmart, we hit more than 80% growth. On the brand. Some point in the past in the past few months. In OXXO, we are seeing very high levels of growth already, more than 30%. But also when you look at the traditional channel, which is the channel that, you know, is the biggest channel for beverages, When you talk to the mom and pop owners and when you talk to consumers and so on, I mean, in the stores where you have Xerox Mineral, the Xerox Mineral is selling 3x or 4x than what the old Suerox was selling before. Especially when it is located in the fridge. So every sign everywhere you talk to consumers, people love it. You talk to customers, they like it. So that I think is, you know, from a top line point of view, the biggest 1. Now we have very strong initiatives coming already deployed and being executed. In many OPC categories. That I am very excited that they have differentiation, they the power of the brand, and I am very confident that they will work really well as well as Tio Nacho and so on. Excellent. Thank you so much, Marco. My best to you.

Thank you so much.

Thank you, Froylan. We will see you soon.

Probably just expanding on Marco's answer, I think it would be let me emphasize this again. It would be very interesting for everybody to attend the investor day on December 3rd. Because what Marco described are the initiatives that we already have in place. On December 3, you will see new tools that you have not seen yet and you will see how the future will look like in terms of innovation new product launches, new formulations, etcetera. So let me again, we expect to see you, Froylan, and obviously everybody here. But it is very important for everybody, if you want to understand what comes for Genomma, in 2027 and beyond it is very important to attend the investor day in person. In person.

Perfect. Thank you for No.

Thank you.

1 moment, please, while we hold for more questions. All right. Thank you. With this, we conclude Genomma's third quarter results conference call. Thank you for your attention.