Genomma Lab Internacional SAB de CV Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Antonio Hernandez - Actinver Casa de Bolsa - Analyst : Hi, good morning. Thanks for taking my question. Congrats on your results. Just wanted to ask regarding, I mean, cash generation is strong, not much CapEx is being planned, so that's going to be relatively stable. Dividends are as well as stable and so forth. And I mean, M&A, of course, remains opportunistic. So are you targeting maybe further reducing your leverage ratio even though it's already at a healthy -- at a record level just as we mentioned? Or what uses of cash are you planning going forward? Thanks. Antonio Zamora Galland - Genomma Lab Internacional SAB de CV - Executive Vice President, Chief Financial and Chief Administrative Officer Thank you, Antonio, for your question. This is Antonio Zamora. It's a good question. Obviously, the business has been generating significant cash flow, free cash flow. And obviously, we expect that to continue. There's not significant CapEx that we're going to be needing. I mean, we're not going to build a new plant. We have enough capacity. But there are very interesting projects coming. There's a couple of CapEx for innovation, for productivity, our warehouse. We need to look into the future and the business is growing. So there's going to be some CapEx that we will announce later, not significant, okay. And as we all know, part of the cash flow that is generated at this moment in Argentina, so we cannot touch it. So we want to be prudent in terms of the dividend payments for the future right now. We don't intend to lower the financial leverage much further. But the truth of the matter is the business is very successful and it's very profitable, and we generate a significant amount of cash and that resulted in the financial leverage that we mentioned. But it's not our intention to go much lower. Because we want to be efficient. And as we all know from the capital asset pricing model, there's a level where you need to be efficient, especially for taking into consideration the tax shield. But it's a good question. It's a good question about what to do with the cash flow. And I think that the most important use of the cash flow that we can mention at this moment is reinvesting in the business. We see a lot of opportunities for growth. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 5:00PM, LABB.MX - Q4 2024 Genomma Lab Internacional SAB de CV Earnings Call Marco has implemented a number of strategic initiatives to accelerate growth in different categories and organic growth. And that's going to require some investment from the business. So again, the main use would be reinvesting in the business to accelerate growth. I don't know if I answered your question.

Question: Alvaro Garcia - BTG Pactual - Analyst : Hi, thanks for the space for questions. Two questions, one on dividends from Argentina. I was wondering what sort of the medium-term plan was. I'm guessing could probably wait for the [SIPO] to be up and proceed with potentially taking some money out of the country that way. That's my first question. And my second question is on margins. In the past, you've spoke about this 25% margin target. I was wondering if that's still in place. And when you talk about sort of reinvesting in the business more, maybe a bit more color on what you mean exactly in the context of that margin. Thank you.

Question: Alvaro Garcia - BTG Pactual - Analyst : Yeah, that's helpful. Maybe just one last one on the capacity or the runway for growth at Suerox specifically. How are you sort of envisioning or preparing for high season or the summer season in 2025? Thank you.

Question: Alvaro Garcia - BTG Pactual - Analyst : Agreed. Thank you very much. Antonio Zamora Galland - Genomma Lab Internacional SAB de CV - Executive Vice President, Chief Financial and Chief Administrative Officer Thanks to you.

Question: James McDermottroe - Invesco Asset Management Ltd. - Analyst : Great. Thank you. Yeah, follow-up questions to what you've already spoken about. So reinvesting some of the excess margins from the productivity gains, can you give us an idea of how much you could accelerate the top-line growth in constant currency terms as a result of those? And the second question, if you could possibly give us a bit more color on the extent of the CapEx you are looking to spend, because I guess unless it's significant, it looks like you have room to be increasing dividends? Thanks.

Question: James McDermottroe - Invesco Asset Management Ltd. - Analyst : Okay, great. Thank you. Antonio Zamora Galland - Genomma Lab Internacional SAB de CV - Executive Vice President, Chief Financial and Chief Administrative Officer You. Thank you, James. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 5:00PM, LABB.MX - Q4 2024 Genomma Lab Internacional SAB de CV Earnings Call

Question: Miguel Ulloa - BBVA - Analyst : Hi there. Just a quick one regarding tariffs. Do you foresee any impact from tariffs in the states? Or do you plan to do anything about it? Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 5:00PM, LABB.MX - Q4 2024 Genomma Lab Internacional SAB de CV Earnings Call

Question: Miguel Ulloa - BBVA - Analyst : Great. That was helpful. And just a quick one regarding growth in the US. Is there something different that you're trying to do for that region, for that country in particular?

Question: Miguel Ulloa - BBVA - Analyst : Okay. And finally, if I may, could be regarding the relaunch of Asepxia and Cicatricure. Could you provide us additional color of what you are doing or planning to do in the coming months?

Question: Miguel Ulloa - BBVA - Analyst : Okay. Thank you very much.

Question: Miguel Ulloa - BBVA - Analyst : Sure. Thank you.