Grupo Nutresa S. A. (NUTRESA) Earnings Call Transcript & Summary

Good morning, and thanks for being with us for the presentation of the third quarter -- excuse me, fourth quarter of 2023 for Grupo Nutresa. Carlos Ignacio Gallego, President of Grupo Nutresa is in this webcast as well as José Domingo Penagos, President of Corporate Finance; Diana Bernal, President of Corporate Finances; and me speaking, Catherine Chacón, Director of Investor Relations. After the presentation of results, we're going to have a space for questions and answers. [Operator Instructions] To begin with the presentation, I give the word to Carlos Ignacio Gallego, President of Grupo Nutresa.

Good morning, everyone. Thanks for being with us today. Thanks for being with us in this conference or presentation. To begin, I would like to go to Slide #2. In Slide #2, we're speaking about some events of -- that are of particular interest for this specific quarter. In first place, we shared with you that after being confirmed, in December 2022 as the food company -- most sustainable food company in the Dow Jones Sustainability Index. After that, Grupo Nutresa was part of the S&P Global Sustainable1 yearbook. Again, we were recognized as part of the top 5% in the corporate evaluation with regards to sustainability. Our good performance in this evaluation reflects the valuable work that is being done by our team and by other related groups as well as the execution of sustainable practices that enable us to build a better world. A better world where development touches everyone. We would also like to let you know that Grupo Nutresa for 4 years in a row was the second most -- was the most -- second most responsible company in Colombia and the most environmentally responsible company in Colombia, according to MERCO Responsabilidad ESG 2022. This study has these different perspectives of analysis, ethical performance, transparency and good governance, responsibility towards employees, commitment to the environment and to climate change, also contributions to community and also tax contributions to the country. Those are the 6 indexes. Considering to close this topic with regards to highlights, I would like to mention the cybersecurity issue that we're currently facing as it is public knowledge. And as a share in relevant information of April 26, 2023, last Thursday, April 20, our IT security system or the IT security system of our company detected a cybersecurity incident. At that moment, we activated a protocol that has been established for this type of events to mitigate potential impacts, and we also allocated a technical team -- specialized technical team that has been managing the situation and they have been leading and implementing the necessary measures to protect our systems and to protect our systems and our information as well as the systems and information of third parties. We have also conducted actions to bring operations back to normality. We would also like to mention that the company is going to be diligent with regards to taking care of the possible effects created by this issue on all -- on any related group, and we value your comprehension, we value your flexibility, and we value all the support that we have received. The stability of our operations and the safety of our -- the safety of information are priorities for Grupo Nutresa. Having mentioned these highlights or acknowledgments, I would like to ask you to move to the next slide, Slide #3. On Slide #3, we can see international sales for the quarter, Colombia and International -- Colombian sales and international sales for the quarter. During the first quarter of 2023, we see a positive performance with regards to the sales of Grupo Nutresa. We have 2-digit growth both in the sales -- both in sales in Colombia as well as in sales abroad. Sales in Colombia reached COP 2.807 billion. And again, we're speaking about Colombia billions and sales growth of 27.2%, volumes grew by 2.8%. All our sales units are growing by double digits and they're having -- we're seeing a better performance in the Coffee business, Pasta business, Ice Cream business and Biscuits business. Price variation is 24.6% compared to the same quarter of last year. And this is linked to the increases with regards to the cost of our raw materials and also volatility with regards to currency exchanges. The idea is to keep sustainability or to keep accessibility to the products and sustainability of the group. We have also deliberately transferred part of our benefits to our consumers looking for accessibility and equity. If we look at businesses, the Biscuits business has grown by 28.7%, its volume grew by 5%, and this is a result of the good dynamics of all the channels of all the networks as well as a result of industrial sales. The Coffee unit grew by 56.4% in sales, volumes increased by 10.3%, very good performance in its main categories. The cold cuts business unit grew by 16% in sales. Its volume decreased by 4.1%. I would like to indicate that this unit has categories that are a little bit more sensible to inflation. I would also like to highlight that with regards to cold cuts placement and the preference of our brands in the market is still there, Chocolate has grown in sales by 26.6%, a small decrease in volume of 1.4% retail [indiscernible] also leverage sales. It grew by the most -- again, retail food grew by 21.9% and an increase in the number of transactions, which was achievable due to the good sales in the different in-person sales and virtual channels that belong to the company and that belong to third parties. With regards to the Ice Cream sector or unit, it had a growth of 30.2% as volume grew by 7.8%. Sales channels, again, keep a good sales dynamics. The Pasta business unit grew by 30.9%. Its volume grew by 7.5%. This was leveraged by a better mix of sales among the different brands of this business unit. In the business unit of Others, we had a growth of 24.8%. And I would like to mention the performance of food services and products distributed by third parties in the lower part of the slide. Looking at international sales. I would like to mention that outside of Colombia, we had sales for $435 million, we grew by 22.6% in Colombian pesos. These sales are COP 2.072 billion, a growth of 49.9%. During this quarter, we had a devaluation of 21.7% compared to the same quarter of last year. The total export from Colombia during this quarter were $110.2 million. It grew by 15.8% like in previous conferences, I would like to mention that this is a very important growth engine for the Grupo Nutresa. If we look at this international sales by business unit, TMLUC reports a growth of 18.5% in dollars its currency and the functional -- its growth in its current policy was closed 19%. All the geographies are growing, especially in Mexico and the different categories, we would like to highlight are cold instant drinks. With regards to base goods, we had a growth of 30.2%. The United States and Central America leveraged this growth, thanks to the proper market behaviors and those areas. Coffee has a growth of 22.4%. It's dynamism, a key remains in the United States, and we're also having more exports from Colombia. With regards to the Chocolate business unit, we had a growth of 22.8%, proper performance in Mexico, Peru and Central America. International operations of Retail Food has also grown by 18.9%, both Central America as well as the Dominican Republic, had double-digit growth in that area. The cold cuts business has had a decrease of 12.7% in U.S. dollars, and this is explained due to less exports of fresh admits from Colombia and also lower sales in Panama. And to conclude this international sales section in the business unit of other growth is 37.2%, levered mostly by the good results that we have had in Belgium. And in the next slide, we see that when we combine growth in Colombia, 27.2% and international growth of 49.1%, this pleases us to provide consolidated sales for this quarter of COP 4.8805 billion with a -- for a growth of 35.7%. As you can see, we had an excellent quarter with regards to sales. Again, all our business units, including the other business units had double-digit growth. Sales of innovation also represents 16.1% of the total income of the group for this period, which is also very positive. I would also -- as you can see, internalization as well as innovation are supporting the company growth. And this is what provides this tremendous behavior during the first quarter in Colombia -- is complemented by our tremendous behavior during the first quarter in Colombia. Looking at the next slide, we can see that sales distribution by region, we can see that sales outside of Colombia represent 42.5% of the total company sales, Colombia was the most important geography in terms of sales. Sales in Colombia were 57.5%. The second most important geography was the United States, 14.4% for the total -- of the total sales during that quarter. next was Central America, 11.2%. And then Chile with 6.2%. If you look at the United States, plus Central America plus Chile, they represent 31.8% of the total sales. And this again highlights the tremendous capacity of that region, where our company serves. I would also like to highlight the participation, again, of geographies, such as the United States, Mexico, Central America and the Dominican Republic. In general, again, all those geographies grew during the first quarter by double digits -- in double digits. Let's go to the raw material information. On this slide, we can see on this slide, we can see that after 2 years with regards to pressures in the cost of commodities, we saw a reduction in the group of commodities, it went from 14% compared to the same quarter of 2021, and this is due to a reduction of some of the reference prices for some of the proteins, oils and fats and Coffee. The COGS breakdown indicates also a redistribution of some of the main raw materials, such as Coffee, and this is due to the positive growth in terms of sales and also due to the increase of the cost of this commodity in Colombian pesos. I would also like to remind you that this commodity indexes in dollars and does not include the effects of the volatility of exchange rates in the region and its effect on the cost in the organization. I would also like to mention that this aspect of the raw materials of Nutresa. It's -- we have the strategies, the administration has the strategies for the coverage of commodities as well as different currencies. And we're also managing physical inventories accordingly to take advantage of any windows that might allow us to increase our profits with inventories, and this has enabled us to not suffer the same impacts that we would see if we were working a spot through commodities. I would also like to give the word to José Domingo Penagos, Vice President of corporate finances of the group. Welcome Jose Domingo.

Thank you, Carlos Ignacio, and well, good morning, everyone. To speak about profit. What was mentioned is important for me to highlight with regards to macro economy, again, the macro economy during the first quarter also include inflation pressure and volatility with regards to the exchange rates this situation. Again, we can see that these 2 elements that I just mentioned have a tremendous impact on the margins of the organization. And of course, we pay close attention to them. But that's basically what we're going to see with regards to margin, again, with regards to the net margin, we have small lows compared to the same quarter of last year, but it has an improvement compared to 2021. And again, this is important, and this indicates the trend. And again, this is the general framework for these figures, but I would also like to highlight that our focus is on flexibility, innovation, agility of all our production processes that are installed, not only with regards to cost, but also looking for proportionality of cost with regards to sales and also savings again, savings that are needed for -- during this high volatility times. And again, this is the general framework. The general framework explains the figures that we're seeing on Slide #7 with regards to the EBITDA in this quarter, we had an EBITDA of COP 150,000 million with a margin of -- healthy margin of 13.3%. But most importantly is the growth, our growth was 38%, which is above the growth that we have in -- with regards to income. Again, it is a good behavior of the EBITDA. With regards to the whole group on this slide, we can also see each one of the different business units that contribute to these figures. We'll begin with the Biscuits business unit, the largest business unit in our company, not only with regards to income, also with regards to the EBITDA, you can see how big it is COP 141 billion, 120% in terms of growth approximately and a margin of 15.3%. And this is explained again based on the strict reality of this business, geographically diverse. Currently, our business invoice is more outside of Colombia than what it does in Colombia platforms, such as Central America, the United States have had very good sales dynamics and this has helped us tremendously, not only to dilute our fixed costs but also to improve the EBITDA. And again, there's also -- this is also affected by pressures with regards to raw materials. Again, here, we include wheats, fats and oils' packaging materials and all those have seen price increases. But based on what I have just explained, we have managed this properly. We have had good profits, good income from this. And again, for all these materials, so again, Biscuits had a very good important results in the first quarter of the year. Next, the Coffee business unit. Currently, this is the second largest business in our group based on invoicing. I would like to mention the improvement here, not only in magnitude, 2022 was a very challenging year. Raw material is close to 80%. Again, raw material cost of Coffee is 80%. And in previous conferences, we mentioned is, this grew 100% last year. So this was quite demanding for us in terms of discipline, in terms of coverages and currently, we're capitalizing on that discipline and on that efficiency that we had. And Again, this is important with regards to all the marketing items. And again, we cannot neglect any brands. But basically, again, this reflects our good discipline in terms of coverage and expenses, and we can see a double-digit EBITDA for this business unit of Coffee for the first quarter of the year. Next, we have the cold cuts, a margin of 11% growing EBITDA again double digits, 14.1%. And here, we have pressure again with regards to raw materials, proteins that come from swine, cattle and chicken. And again, we have seen increases in terms of logistics in this area as well. And these are the final results. And as you can see, this is also a double-digit result, again, double-digit growth, as you can see. The business unit of Chocolate is somewhere in the middle of the graph. Its margin is 17%. One of the highest, and we need to keep in mind the mix. We also have to keep in mind the geographic position of this business unit. I didn't mention that for the prior to, but this is also very important for Coffee, a very international business. Cold cuts are little bit more local, although we're present in Panama. Therefore, it absorbs the impact because it has less to compensate. So again, the Chocolate business unit is very geographically diverse, very category diverse. It has a very interesting and profitable mix. It also has a good leverage of coverages in the spot market, Chocolate or [indiscernible] is high. And with regards to coverages, again, we have been able to capitalize on this to see this important EBITDA figures. We have the Tresmontes Lucchetti business next. I'm going to explain this because this presents a margin of 8.8%. We have had a good market dynamics, economic dynamics, but this doesn't explain this reduction. I'm simply introducing the framework, but we have a structural situation with regards to the wheat commodity for this business. Remember, this business is mostly in Mexico and in Chile. And we're fortunate to have local wheat in those areas, but we have not -- that doesn't mean that we can cover the whole harvest. We had a revaluation of the currencies in those countries with regards to the coverages that we have and that affected our operational profits. And this is why we see these figures in the first quarter. And in accounting terms, this also highlights the benefit of having a lower cost for the wheat. Again, we bought a [ Harvard of West ], and we're going to see the benefits of having both that harvest through the year. So we can say that this is an effect of the context of Tresmontes Lucchetti but this is not part of the structure of that business unit. And again, we're going to see the benefits of this harvest throughout the year and that is going to help us dilute our fixed assets throughout the year. Retail Food margin of 21%, 31% is the EBITDA in terms of its growth, good sales performance, transactions are healthy, both with businesses as well as with restaurants in Colombia and abroad. Abroad, remember the Dominican Republic and Costa Rica where we have different food or Ice Cream powers, we have different strategies for reducing fixed assets. So this is a good strategy for the organization with regards to Ice Cream, also a significant EBITDA margin, 16%, a growth of 7%. We have good volume growth. And again, this is also affected by the pressure or the commodities pressure. We also have coverages here. And perhaps this is one of the most -- this is one of the businesses that is in the most pressure, sugar, milk and other raw materials have increased their prices as well as packaging materials. Pasta has a margin of 15%, that business unit. It grew by 1%. Again, and this is mostly explained by [indiscernible], which, again, is covered by our company, but affects our prices. Again, its growth is deemed as healthy. And with regards to the final chapter, the business unit of others, the Belina business, the Belina proper behavior in terms of sales guarantees that this acquisition is very much aligned with our business plan, and this explains the profit and loss, and this also indicates the income statement that we're looking at on this slide, Slide #8. So keep in mind, we have an equation that is balanced between our economic dynamics between our efficiency as well. We also have growth. So we have had double-digit growth in all the business units, as mentioned before based on our contracts, but this cost increase also implies additional challenges. With regards to our net gross margin, again, gross margin, but we're going to recover this with regards to cost efficiency, COP 4.9 billion with regards to operating revenue, close to 36%. And again, keep in mind all the different geographies and all the business units are growing, and this is very important for this income statement. With regards to the cost of -- again, we have a contraction of 60 basis points compared to the same quarter of last year. But as I mentioned before, this grew by 100 basis points with regards to the gross margin, and we have to keep in mind, we have to keep this in the trends again. We have challenges, but we have definitely improved with regards to this reduction of gross margins. So COP 1.8 billion is the gross profit, COP 1.8 billion, and it grew above more than -- it grew approximately 33%. with regards to the expenses, we are again focusing on productivity. So we can see that sales expenses for this quarter were 22%. And again, this is a sustained figure volume contributes to this dilution. So again, expenses, administration, sales and production, we have seen an improvement of 130 points, and this leverages our profit. And as indicated on the graph is 4 -- COP 547 million, and it grew by 44%. It grew by 44% for this quarter. With regards to exchange differences, we have different dynamic coverages. We have financial income and this item as well with regards to other net profit. This due to different answers that -- we -- that is coming in our business, in our restaurant business. Again, we have different brands. We're working on this sponsor activity. And I also mentioned the operating or operations profits COP 537 million and again, good growth and good margin. Cash flow, again, is providing good financial returns also post operational activities after coverage also indicate or add to this income, and we have COP 131 million with regards to financial expenses, a growth of -- compared to last year. But on the next slide, I'm going to present our debt structure, where the most relevant part is that for the scale of this group, this is adequate debt and 1.78, it's the net debt indicator. We have other joint ventures or associations being another different joint ventures or associates. And in this case, they represent 4,500 negative figures for this quarter, but this is something that has to be determined for the rest of the year. I'm going to go to taxes, effective rate of taxes right now is quite similar to the rate of last year, 21% compared to 22% last year. Remember, seasonality of the first quarter because right before the first quarter, we received 100% of all the dividends from Sura and Argos, these are nontax dividends, and that, of course, has an effect on the effective rate. But the message that I would like to give you is that it is more prudent to work with the effective rate flows to 30% for the complete organization. So again, this is due to the seasonality of our businesses. So this set of explanations lead us to net profit of COP 343 million -- COP 344 billion, a growth of 16% compared to last year. So this is the income statement for the first quarter of 2023. On the next slide, Slide #10. We can see the consolidated net debt for the group. Well, here, we can see the magnitude. The net debt is COP 3.5 billion, and it has covered as mentioned before, through that indicator of 1.78x as indicated by the market, but this is relatively low if we look at a benchmark, if we do a benchmark of similar companies, the rate for all these credits is 13% as of March 31. This is why we have seen the growth in the profit and loss statement that I mentioned before, but remember, last year, this was 5.5%. And at an all Costa rate for that debt. In this, we can also see the return on investment at 12.2%, and value generation area and perhaps the most interesting part is the -- to mention that during the first quarter, we have had a positive cash conversion. We're speaking about COP 240 million, COP 250 million with regard -- COP 240 billion, COP 250 billion with regards to cash generation and these changes that trend, especially, this is mostly due to inventory management. Also, we have a solid portfolio. But again, with regards to inventories, we have definitely had a significant improvement with regards to the rotation and that definitely leads to positive cash results for this period. And we think that's the most relevant part. We also have to speak about the CapEx. Remember, the budget is COP 700,000 billion in the budget for this year. This is also a seasonal divided into 4. The crude is approximately COP 80 billion, but again, for different calculations, we need to -- I think we're going to invest the COP 700 billion that are committed. And again, this is going to -- the ramp is going to increase throughout the year as machinery and equipment arrives. Remember, that figure is 60% for growth and 40% for maintenance which we feel is the adequate balance. And with this, I conclude my -- the financial sector, I would like to give the word to Carlos Ignacio again. He's going to speak about the perspectives for 2023. And then we're going to open the floor for questions and answers.

Thank you, José Domingo. With regards to perspectives. And going first into commercial items, I would like to say that we're going to have an inflation situation and we're going to have a situation with high volatility. We're going to see pressure as well with regards to the acquisition capacity of homes. And this is why the home expenses are changing their nature. So again, based on the limited nature of their incomes, families are going to determine what they would like to prioritize. And as mentioned before, what we have seen is that basic food is -- basic food expenses is the last one that is affected and is the first one that is recovered. When possible to have recovery in Colombia, we see moderation of volumes, and we also see a growth in terms of pesos, mostly due to the price increases that we had last year. As a matter of fact, prices during the first quarter were quite moderate. And with the objective of keeping our products accessible, I -- we're going to keep -- we're going to have less pricing compared to last year. Outside of Colombia, we expect our growth above the figures that we're going to see in Colombia. We also feel that volume moderation in the different geographies is going to help us do this. And this leads us to having a sales or a commercial perspective that is positive in terms of sales through volume moderation. With regards to profitability, when we translate dollars to pesos, we see challenges in terms of cost but with regards to the efficiency, with the efficiency and productivity projects that we are working on, we're going to deal. We're going to have proper returns for the company. So what we have is a positive outlook with moderation in terms of volumes in the commercial side, and we also have lots of work on the production front on the efficiency front. So we continue with adequate returns with adequate profits in our company. With this, I would like to give the word to Catherine, so we can continue with our question-and-answer part.

Thank you, Carlos Ignacio. So with this, we're going to begin with the questions-and-answer session. Right now, we have 2 participants that are formulating different questions. The first set of questions is from Julian Ausique Chacon from Davivienda, actually 2 questions. Let's jump into the first question. The first question is, I would like to know if it is possible to know the CapEx execution for this year and the use of cash flow because during the quarter, debt, for instance, increased. Please read the other questions they're saying. I would like to know how debt is going be handled because there is that line for COP 600 plus million during 2023. Well, thanks. The 2 questions are related. With regards to the CapEx, remember, COP 700 billion at 80% executed. We have seasonality there as well, as I mentioned before, and we plan to execute it during this year 2023. And indeed, we had an increase of COP 200 billion during this period. But remember, too, that was to support the growth that we have presented. Proportionally, the income and the debt are more proportional, 1.78x. It is actually below the coverage indicator. So this 1.78 is better than what we had at the end of 2022. With regards to the second part of the question, deadlines for 2023 -- debt deadlines for 2023. I would like to mention the structurality of our debt. Again, we have multiple stretches. As I mentioned before, it's not only one bond. It's not only one stretch, again, this net debt, again, comes from different stretches. Some of these stretches our 10 years old and even more. And so margins from this exercise, so yes, we have COP 650 billion, but again, because this comes from different stretches. We have interesting opportunities with regards to interest rates and so on. And we may reprofile some of those stretches. When I mentioned the rate before, we do understand the strategy is to negotiate these multiple stretches, again, multiple loan stretches that are short and midterm -- with short and midterm deadlines. And again, we're looking for better interest rates. So part of these COP 650 billion are going to be brought to spaces that we have for 5 or 6 years. And again, the idea is to look for better interest rates. I would like to complement Carlos Ignacio with regards to the CapEx that we mentioned before. We have executed during this quarter only COP 80 billion and again, this is due to seasonability. I would like to highlight what José Domingo mentioned, and that is that close to 60% of this CapEx is for growth. In other words, the company is looking at new opportunities and investing into new opportunities to continue growing, I would say, mostly outside of Colombia. That's where most of those opportunities are located, those opportunities where we're going to be investing in CapEx. And thank you, Julian. The next group of questions from Roberto Paniagua from Casa de Bolsa. He has 3 questions. I'm going to group these 3 questions in 2 groups. The first is how much additional margin do you see to continue transferring pressure in sales prices? And what do you expect? Is the price behavior of commodities for the main lines during 2023? Well, Roberto. We're going to answer this question. Both of -- the 2 people are going to answer your question. The first part is that, clearly, ubiquity, availability and accessibility are key for massive consumption businesses such as Nutresa. So ubiquity, and again, ubiquity is having products where they have to be is usually managed through the different ways that our company has to reaching clients, buyers and consumers. We have many different networks, many ways of reaching them. And this is a tremendous capacity of Grupo Nutresa. Accessibility is related to different things. First of all, it begins with the design of the product itself, and it begins with the price strategy as well. So we are taking care of accessibility and in emerging markets, that is definitely a key variable. And this is why in the perspective, and I mentioned this in the perspective, we do not see an intense price activity compared to last years, I emphasized a lot productivity and efficiency. And what I meant is that price not be the only advantage. And as a matter of fact, when you decide not to use that price advantage, there are other levels that can help you, including product redesign, including changing different sizes or changing portions, including looking for different alternatives, trying to find different input or different packaging. So again, the response -- specific response is that our price activity is not going to be so high. However, price is a level that is permanently used. And I can say that if situations were to change radically with regards to cost and expenses, yes, in the company, in the group, we're willing, if convenient, we're willing to reduce prices, we're always being asked if we're going to increase prices. But what I'm saying is that we're going to handle this level in a fair just away with regards to the behavior of commodities. Our company is quite diversified in different categories. And I mentioned before that when we speak about the Grupo Nutresa Commodity Index, I mentioned that there is -- that there have been favorable changes with regards to some commodities, but we should not go into each one of these commodities, but I think that it is better for us to simply speak as to how we are covered because, for instance, cocoa prices are definitely increasing. But although even if the price in the market is increasing, we have coverages of cocoa. So I think it is better if José Domingo explains to you what we have in terms of coverages because that indicates how must we are going to be affected by price increases in those raw materials. So José Domingo, if you can please talk about that?

Yes, I would like to mention that commodities them sales and physical coverages, financial coverages and exchange rates. We mentioned that the commodity index in dollars is decreasing, but this is not happening in pesos. It's actually increasing in pesos. And I would also like to mention that close to 65% of our raw material cost even those that are acquired nationally or use a dollar indexes. This is why we always have to keep those 2 factors in mind. I would like to share a slide, I would like to see how we can share this information carefully again, and not to disclose any information to any competitors. But I think the best way for me to say this, is that with regards to the budget, we have these coverages in the budget. So Coffee for instance, we have Colombia, Coffee and Chile. And I can say that we have somewhere between 65% and 80% covered at the rates that we have in our budgets. In some geographies such as the U.S., we have even higher coverages. And with that, I can describe what's happening with the Coffee business unit. With regards to cocoa, we have Colombia and Peru, and we have a coverage of close to 70% in cocoa with regards to what we allocated in the budget. Corn is somewhere between 65% and 75%. Sugar, another very transversal commodity, which is used in many of our business units. For sugar, we'll cover close to 73%. And in some other cases, in some better specific markets, including the United States, we have higher coverages. And with regards to which we have a coverage of 80% proteins are covered somewhere between 50% and 65%. It is more challenging, and oils and fats close to 63%. So in general terms, for 2023, all these percentages give -- again, 2023, 73% is the coverage or what our group has covered for 2023. And again, we're working intensely on providing recoveries for 2024. So with that comment, Roberto, I would like to finish this answer by complementing the following. And you ask if there's going to be deceleration in our local markets with regards to volumes? Well, we believe, yes. We believe there's going to be deceleration, but not in all the markets. And I also mentioned -- so this is going to happen in a specific geographies. If you're asking specifically about Colombia, I believe that Colombia is going to be very flat this year in terms of growth, in terms of volumes. So again, we're going to have a flat figures this year. So I hope that we answered Roberto's questions.

Thank you, José and Carlos Ignacio. The next question, from [indiscernible] from [indiscernible]. First question. What is the dividend policy for this year? I assume she's asking about approved dividends or dividends approved in the general shareholders assembly. And the second question is with regards to the impact on margins. based on taxes to ultra-processed food and our labor reform.

Thank you for being with us today, and I would like to continue answering. First with regards to the dividends, dividends that were authorized by the shareholders in our recent assembly. I would like to first say that the dividend that was approved, represents an increase of 42.4% with regards to the dividend that was valid, and this is going to be spread or distributed in 2 sections: one ordinary dividend per share of COP 96.45 for a total of COP 529.7 billion and COP 48.24 paid on June, September, December and March 2024 for COP 88 billion -- COP 29 million, this is a shareholders' decision. And I would say that this is the second year of an import and in which we had an important increase with regards to dividends. And as I mentioned before, this is not a decision of the administration. This is a decision that was made by the shareholders in the assembly. With regards to the second question, impact on a margins, impacts based on taxes for ultra processed foods. And based on our labor reform, well, with regards to the labor reform, I think it would be quite a daring of me for me to mention this impact because that would be speculation, speculation about our reform that about which we do not have -- we only have preliminary information. Perhaps, I would like to say or I could say that the most labor-intensive business is consumer food or meaning restaurants basically. So I think that business unit would be the most affected one with regards to any salary increases or any overtime increases. But again, I think we're still at a very early stage of this labor reform. With regards to increases in food prices, well, first of all, that is not going to affect our margins. As a matter of fact, we are an agent authorized to retain taxes in Colombia, similar to what happens with sales taxes. Again, we collect those taxes, and we deliver then those taxes to the government. And we believe that those taxes are going to be covered by consumer prices. That is what has happened in prior reforms This, unfortunately, is going to increase inflation. But this is what our groups such as ours would have to do. Based on the magnitude that is being proposed, we do not believe we will be able to absorb those taxes. Yes, this is going, or this might affect our volumes. Yes, definitely, we need to wait and see and all the different companies have the different levels to work with this, but what's going to happen with regards to that is that those increases are going to be a transfer to consumers directly. So with that, I answer your questions, and thanks for being with us. With this, we are concluding the question-and-answer session. Right now, we do not have any additional questions through the chat in the webcast. If at any point in time, any participant comes up with any questions. We will be answering these questions through relationship management to all of you, thanks for connecting. Thanks for participating, and have a great week.