Budweiser Brewing Company APAC Limited (1876) Earnings Call Transcript & Summary

APAC Limited Apex Sustainability webcast. Hosting the webcast today from Bud APAC are Mr. Jan Craps, Chief Executive Officer and Co-Chair of the Board; Mr. Jan Clysner, Vice President of Sustainability and Procurement; Mr. Yanjun Cheng, Chief Supply and Logistics Officer; Mr. Ignacio Lares, Chief Financial Officer; Ms. Linda Qian, Chief People Officer; and Mr. Craig Katerberg, Chief Legal and Corporate Affairs Officer. Materials for this webcast can be found on Bud APAC's website at www.vifirapac.com under the investor cap on the Results and Presentation page. Through the webcast, you may submit your questions in the Q&A box on the webcast screen. Before proceeding, we would like to remind you that some of the information provided during this webcast, including our answers to your questions, may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and known and unknown risks, uncertainties and other factors beyond our control. Please refer to Slide 3 of this presentation for the full disclaimer. It is now my pleasure to pass the floor to Mr. Jan Craps. Sir, you may begin.

Thank you, Ann. Good afternoon, everyone. Thank you for joining Bud APAC Sustainability webcast. Some of you might have read our 2023 sustainability report published on the 22nd of March. Today, I want to take this opportunity to walk you through our 2023 sustainability highlights as well as the strategy and initiatives we have planned for this year. This is the fifth year we are holding the sustainability webcast, and we are excited for the opportunity to discuss our important sustainability topics with you and share some reflections on our journey. I would also like to encourage you all to submit your questions, and we will answer as many as we can today. If not, my colleagues will reach out to you to follow up accordingly. Let me begin with a brief overview of Bud APAC. We are a Pan-Asian Boeing champion and part of the AB InBev Group. As the largest beer company in the Asia Pacific, we operate in over 35 countries and territories, and we continue to grow and have a regional footprint of 47 breweries and 51 distribution centers across our principal markets, including China, South Korea, India and Vietnam. We publicly listed our shares in Hong Kong in 2019 with a stockout of 1876 HK, which commemorates the year the very first Budweiser beer was good. Today, we are well positioned for long-term growth and competitiveness, thanks to our portfolio of more than 50 brands in the region and over 500 beer brands globally. On top of our operational efficiency, our scale, state-of-the-art facilities, powerful route markets and at the core are people. In APAC, by the end of 2023, we have approximately 25,000 talented colleagues of 25 nationalities. 41% of them are female, 28.6% female representation among our managers. Recognizing our role as a catalyst for economic growth, job creation and sustainable development as Asia's largest grower, our team remains focused on what we do best. Boeing's high-quality beers actively engaging with consumers, supporting our partners and making a positive impact on the communities that we serve. Last year, we delivered double-digit top and bottom-line growth in APAC as premiumization continued in a resilient beer category. A quick recap of our key performance is that we brewed and sold over 92 million hectoliters of beer and beverages. We generated a total revenue of about USD 6.9 billion and delivered a normalized EBITDA of over USD 2 billion. Our dividend per share was USD 0.029 for 2023, representing a 40% increase versus the prior year and an 82% payout ratio. We believe a sound sustainability strategy can create significant economic value and bring more positive environmental and social impact for our shareholders, communities, employees, customers and consumers and our partners. We will continue to invest and develop our business sustainably to create a future with more cheers. We dream big to create a future with more tiers. That's our overarching purpose, which helps us drive -- which helps drivers from commitment to action and from declaration to delivery. In our daily lives, our 10 principles shape how we make decisions and motivate us to do better, keeping our enduring passion for beer and the communities where we operate. Now let me provide you with an overview of our 2023 sustainability recognitions. Transparency and meaningful disclosure are key to expanding our sustainability efforts to the broader community and enable us to bring the relevant value chain partners together to make actionable plans. We first issued reports when we listed in Hong Kong in 2019, and we try to improve the readability over the years. In our 23 sustainability report, we presented the key changes on our metrics to show comparisons and challenges for certain material topics in sustainability. We are aligning with increasingly stringent and comprehensive disclosure requirements and frameworks from both international authorities and the Hong Kong Stock Exchange to prepare our disclosure. And our key learning is that using well-recognized ratings and disclosure recommendations can help us review our sustainability targets and metrics systematically and engage with external stakeholders more smoothly. We disclosed over 400 data points with some specific targets focused on topics that we have been frequently asked by investors, analysts and media. To provide a holistic picture of our sustainability management and performance, we refer to and align with key ratings and frameworks such as MSCI, Sustainalytics, DGSI, the CDP Climate Change and Water Security questionnaires. We also have been a member of science-based targets initiative to set our greenhouse gas reduction targets in line with the 1.5-degree pathway since 2018. We remain AA of MSCI ESG rating and become a CDP Water A list company, along with an upgrade to A- in CDP's climate trading. Now let me pass the floor to our VP of Sustainability and Procurement, Jan Clysner to share more on our sustainability efforts.

Thanks, Jan. Looking back on 2023, we continued to make significant steps towards achieving our 2025 sustainability goals. And we did so through leveraging some industry-first innovations and in close cooperation with our partners in the industry. As you already know, our 2025 sustainability goals cover climate action, water stewardship, circular packaging and sustainable agriculture, which are all for closely linked to our overall business strategy in achieving positive environmental impact and creating value for our communities. A key achievement in Climate Action last year is the reduction of our carbon emission intensity per hectoliter by almost 24%, 23.8% to be precise across our entire value chain, so Scope 1, 2 and 3 compared to our 2017 baseline. We're also very excited and proud that -- but China already achieved 25% carbon emission reduction across its value chain 2 years ahead of schedule. As Budweiser APAC, we realized a 64.3% emission reduction in our own operation, so Scope 1 and 2, far ahead of our 25% target of a 35% reduction. Following our Wuhan and Jim breweries, Jamusu became our third carbon neutral brewery in 2023. We keep working on RE100 and see opportunities in the countries where the regulatory framework allowed for it. More than 66% of our contracted electricity in APAC came from renewable sources. 10 breweries in China have achieved RE100 and 21 brewers in APAC installed solar panels on site. For years, we have been constantly looking for and piloting innovative technology and solutions to our partnerships and our 100-plus innovation lab. One showcase I would like to bring is the electric border in our Xander. It's the first time that a border uses hydropower in the beer industry in the country. I'll leave our CFO, Iggy to elaborate more on this case with some financial details.

We often say no water, no beer. The consequences of population growth, economic development and climate change play a significant role in the growing importance of water stress worldwide. In India, 5 of our breweries are situated near 3 watershed that are identified as high-water stress. Our target is an average water consumption of 2 hectoliter per hectoliter across APAC by 25, including those blues in high water stress areas. I'm very happy to share that one Indian brewery in a high-water stress area achieved this target last year. We've long pursued water use efficiency and are proud to lead the industry with our best-in-class water management practices. If you have a chance to review our publicly available CDP water security survey, you can learn more about our efforts and initiatives on water management. Last year, we lowered our water usage to 2.73 hectoliters of water per hectoliter of beer produced across our APAC breweries. Which is a 32% reduction versus our 2017 baseline. Our Nanning brewery in China continues to be leading in water efficiency with a water usage of 1.09 hectoliters per hectoliter, which makes it the best brewery among all our ABI breweries worldwide on water efficiency. Of course, we will continue to invest not only in our breweries, but also in water availability and quality improvement for our value chain and the communities under significant water stress. To improve the availability and quality of the water where we operate, we prioritize China and India. We've replenished totally 40 million hectoliters of water in those 2 countries. Taking reference from the world's Resource Institute Aquarac2 and our internal custom-made Waterco, we conducted a comprehensive water risk assessment to monitor water issues within our supply chain, including areas where we source our agricultural commodity system. We are dedicated to enhancing the circularity of our packaging materials and minimizing the impact on the environment. By embracing circular packaging, we not only reduced our impact on limited global resources, but we also go after long-term financial benefits. This circular approach is crucial in addressing climate change since packaging has a significant impact on our overall carbon footprint. We continue to make good progress within Circular packaging in '23. Almost 65% of our total beer volume was in a returnable package or made from majority of recycled content. And more than 55% of our primary packaging was made of recycled content. Through working closely with our suppliers, we reduced over 28,000 tons of weight in 23, which include bottles, cans and other packaging materials. We have achieved an average of 80% for our returnable bottle rate in APAC. In China, although used beverage cans are recycled, they are used into construction and manufacturing materials, which is a downgrade of the materials. To increase the percentage of recycled content in our cans, we created a cooperation with partners across our value chain. This innovative closed-loop model can-to-can has already been successfully implemented in our Putin, Foshan and Wuhan in China. In addition, I'm also very proud to share that we launched the lightest beer chem in China last year. This 330 mL can, weighing only 9.57 grams which is 4% lighter than the industry average. The average carbon footprint of a can today is 185 grams, which is 100 grams lower when comparing to 2017. With everything we're doing, we managed to lower the carbon emission of our cans by more than 30%, or reduction of more than 40,000 tons of carbon emissions compared to our 2017 baseline. A diversified and healthy ecosystem is crucial for us. It's vital for environmental health, water quality, agricultural practices and overall human well-being. To address this urgent issue, it is important that we champion and lead sustainable agricultural practices to maintain healthy ecosystems and establish a self-sufficient agricultural supply chain. For more than 12 years, we have been working on a domestic Bali breeding program with China's Johnson Hongkong Group, one of our strategic multipliers to develop and support Barley growing in China. In '23, our locally grown barley increased by 50% to 60,000 tonnes, benefiting 5,000 farmers and covering 8,000 hectares of land. Last year, we also started to use a patented technology on low-carbon regenerative barley farming. The goal of regenerative farming is to enhance sole carbon sequestration, the soil health and achieve sustainable agriculture. This technology uses and transform food byproducts into biodegradable are cultural materials in such a way that they help to improve the soil quality and facilitate carbon sequestration. Also in India, we have an agricultural program. We support more than 2,600 farmers through our Smart Bali program, which had a big focus on soil health. So far, we have implemented the Sorel framework to 90% of our Indian farmers. I'm very proud to say that 100% of the farmers we partnered with in China and India are skilled, connected and financially empowered. You may also know that Hubs are one of the major ingredients of beer. Back in '21, we started to grow Cascade Hubs indoor at scale. It was the first time that, that was done in China. Last year, we managed to achieve cost savings and streamline the supply chain, which resulted in a yield of 1,000 kilograms per hectare of Cascade Hub, a 80% reduction in water usage, 90% reduction in land requirements and a 95% reduction in fuel consumption for transportation. Moving forward, we plan to expand this program and will pilot some innovative concepts such as utilizing soils made from span grains as well as conducting flavor experiments. So far, these are my updates on the progress for our 2025 sustainability goals. And as you know, in '21, we announced our ambition to achieve net 0 across our value chain by 2040. Now I would like to hand over to YJ, our Chief Supply and Logistics Officer, to give you an introduction on how we transform our supply chain and encourage our value partners to join us on our sustainability journey.

We believe that supply chain efficiency is the foundation of high-quality and sustainable growth. Before I share our support for our value chain partner transformation, allow me to talk about our own first. We are dedicated to building state-of-the-art facilities and an extensive distribution center network across the Asia Pacific. In all our production facilities, we implemented the Voyager plant optimization, VPO system, encompassing all elements of ISO 9001 and FSC 22,000. We leverage free our management principles to mobilize our front-line team members to play a crucial role by taking ownership of product quality, energy and water efficiency as well as safety in their respective areas and meeting their conversation with respective KPIs. We are innovating in collaboration with both up and downstream value chain partners to deliver the highest quality and service level. I want to use a few minutes to introduce our 2023 anchor program with suppliers. Now it is our carbon footprint overview. As you can tell, our Stop 1 and 2 emissions only take less than 6%. Over 94% of our emissions are from stope-free. To further reduce our stope-free emissions, we need to work with our suppliers. As the majority of our carbon emissions come from our value chain, we are using our supplier strategic providers as a vendor strategic visas, VSA and logistics supplier strategic alliance, LSSA, to actively help our suppliers reduce their emissions, including renewable energy transition programs and carbon emission audit and capability building projects. In 2023, we elevated our capability building program for enhancing suppliers understanding of carbon-related matters, particularly on carbon emission baseline setting. We always believe accurate data points are the first step to developing action plans. We launched a cloud to carve emission data platform among our suppliers as their submitted Scope 1 and 2 data will be all spoke free. We conducted 6 training sessions covering various topics such as GHG protocol. SBT100CDTcFD and PS2060.These sessions were attended by more than 300 participants. We facilitated carbon footprint mapping for 40 suppliers and sites, resulting in 40% carbon emission met across our value chain. Green Logistics is another key area for LSS program and our further decarbonization, we deployed 4001 green trucks in our fleet, an increase of around 9% compared to 2022. In 2024, we are expanding the supplier scope-free program to our water management among our suppliers to drive the overall water efficiency in our value chain. Now let me stop here and hand over to Ignacio Lares, our Chief Financial Officer, to share with you how we assess climate-related risks and opportunities across the region. -- advert you...

Thank you, YJ. Our sustainability ambition spans our entire value chain, and we work together with many stakeholders in the markets where we operate in order to bring it to life. As governments establish and review their policy frameworks for a sustainable future, such as China's 3060 decarbonization goal and that the noted focus on high-quality development in promoting new industrialization, we frequently identify shared objectives and opportunities to lead the way with benchmark initiatives. On that note, some of my colleagues mentioned the task force on climate-related financial disclosures, or TCFD, earlier. In 2023, we conducted a comprehensive assessment of our assets and business operations using the guidelines set forth by TCFD. In order to communicate clearly the climate-related risks and opportunities for our business. We have included our assets in the assessment of both physical and transition risks as well as aligned our decarbonization targets with a 1.5-degree Celsius emission reduction pathway. With the IFRS foundation taking over the TCFD's monitoring responsibilities this year, we understand the ISSP standards will further pave the way for global sustainability reporting. And we will, of course, adopt the most current available standard for our future reporting. With our climate risk assessment in hand, we want to highlight our initial analysis on climate impacts and how they affect -- or how they may affect our business. Our actions in response to risks and opportunities arising from a changing climate and our efforts to reduce climate change overall. To that effect, let me present you with a case study that shows how transition risk has become an opportunity for our operations, Ziyang brewery in Sistan China became the China beer industry's first to install electric boilers using hydropower in 2023. We -- the electric borders replace the natural gas ones to generate steam with a newly constructed power generation and storage system. Leveraging the Peak and Valley power pricing structure in the market, the system generates heat using off-peak hours electricity to meet the brewery's steam production needs throughout the day. In addition to the cost efficiency benefits of this approach, we strategically took a sustainable project model, Energy as a Service, also known as EAS, to capture the transition opportunity with additional financial benefits. We have formed a 20-year partnership with a selected service provider who invested in the infrastructure and equipment for the whole system with a dedicated building area of around 3,000 square meters within the Ziyang brewery. So far, we have used EAS for our solar panels and power storage facilities in China and have seen positive economic and environmental impacts, which is encouraging given the size of the opportunity and the many ways in which we can bring it to life at Bud APAC. And with that, I will pass the mic to Linda Chen, our Chief People Officer, to introduce how we thrive with our people and our communities to create a more sustainable future together. Over to you, Linda.

Thank you, Iggy. For a high-level update on our client-related disclosures. As the largest brewery in APAC, we set a comprehensive understanding of the hurdle faced by Veris-related businesses, especially small and medium size. When it comes to assessing professional services, developing essential business skills and acquiring necessary resources to enhance and sustain their operations. This awareness drives us to engage with entrepreneurs directly. But APAC introduced a B2B e-commerce platform, these. In 2021, to engage our wholesalers and the retailers in China inside the BA, user can brought the product, place orders and rewards arrange deliveries, check on marketing promotions and assess business insights or in one place. This B2B platform enable high-quality growth of our partners, allowing us to provide more value-added services to the ecosystem and the facility industry adaptations to the new economics. For the internal development of our value chain partners, we have conducted turning cover essential skills like project management, pharma and social media marketing. In China, 100 individuals participate in our wholesaler successor and the manager program. Over 80% successfully took over their wholesaler business. In South Korea, 200 business owners have been trained for restaurant operation expertise. To explore and develop more solutions for the future, our 100-plus innovation lab continued to expand our efforts to engage and empower entrepreneurs and innovators by organizing Wela industry workshops, investor on payables and pitched journey section. In 2023, we have engaged 117 ventures and signed a contract with 5 startups. This indicates a commitment to scaling up porcine programs and initiatives. As a business, our most valuable asset is our people, and we are committed to supporting every individual to unlock their potential and excel. As an introduced at the presentation, we have a workforce about 25,000 colleagues in 2023. We were recognized as the top employer in China, India and South Korea for 3 consecutive years. This award assessment to our commitment to support our people to develop and grow themselves and elite their potential at Bud APAC. Diversity inspire different ideas to make better decisions and achieve better results. This diverse workforce we have, which represent 25 nationalities across the region, enable us to better understand and meet the needs of our customers, consumers, partners and communities. For 1 person, our colleagues are also female and 28.6% of our managers are female. We have a serious initiative to support our female employees to grow and shine. One unique initiative I want to highlight is that our female brew master program, starting from 2021 2011, 24 female employees have successfully obtained the Blue master certification One of them founded the 059 coastline craft beer brands by using traditional rowing technics and local source ingredients from Fujian province to produce distinctive food favorite crop beers. It currently stands as one of the best-selling brands in Fujian local craft beer market. We work with independent party to conduct a comprehensive pay equity review annually. In 2023, we confirmed the Street there was no significant differences in base pay between women and men across APAC. We also have a range of talent programs in place to support our people from across the region to become the backbone of our business. Within our current team, 85% of our APAC management committee members are promoted from the region Asian market and 91% of the leadership and Level 2 positions are also from the Region Talent program. We are investing in people, both within our company and within our partners through our APAC University, where we aim building future capability. In 2023, we provide a range of 85 hours of training per employee in APAC. The safety of our colleagues is very important to us. We follow high standard for protecting occupational health and safety and work towards 0 engine in our operations by integrating safety in production and logistics operations. In 2023, we achieved a 95% reduction in total lost time injuries for our employees and contractors. Next, I will discuss how we develop the resilient communities. First, in this area at APAC, we believe that drinking beer should be a positive experience. We work with multiple stakeholders to achieve our smart drinking goals and since 2008. We have built a range of programs payload to different local contests. We aim to influence both social norms and individual behaviors to reduce the harmful use of alcohol across our markets, and we do so through dedicated social marketing campaigns and other programs. In addition to that, we continue to leverage our mega brands and Mega platform to further engage our consumers to advocate our smart drinking and moderation. We will launch our spots. Now is our party thermal campaign, aligns that the national introduced introduction of 00, starting by our partnership with Olympic Qualified series in China in the next couple of days. This summer, we will also launch Class Zero Olympic edition in all-temp channels and leverage our partnership with the Olympics in South Korea, aiming to improve alcohol literature. Including advice on how to avoid harmful consumption or use of the guidelines labels in APAC market reached 100% by the end of 2021. We are committed to contributing to community building whatever our business operates. Since 2019, but China initiated the Corona Extra ran project to support farmers Inmarsat province to cultivate high-quality lamps, which not only improve farmers with the court, but also enhance the consumers' corona-drinking experience. In 2023, but China further developed the project to create a social enterprises business model to accelerate and expand impact by establishing the extra-long company with the provision of the start-up capital, project investment and operational guidance. This is a model involving different parties and incorporate with various components, more than just securing the lime supply for Corona. This primary initiative can further promote development of the long industry and help improve the income for farmers in a sustainable way. In facing natural disasters, we aim to be the one of the first to provide essential apps, such as cleaning drinking water. To that end, we have donated over 2.5 million cans of emergency drinking water to communities in need in China, India and South Korea since 2015. Also, in 2023, our employees spent 41,000 hours volunteering in various events. Now let me pass the next couple of slides to Craig Katerberg, our Chief Legal and Corporate Affairs Officer, to share more about our strong governance do.

Thanks, Linda. A sound corporate governance structure is a cornerstone of our company's success in sustainability and beyond committed, experienced and diverse. Our Board of Directors sets our strategy and monitors progress and developments as we move along our sustainability journey. The integration of sustainability at the highest level of management at about APAC enables strategic oversight of environmental and social issues for long-term value creation. In Q1 2023, we evolved our Audit Committee to the Audit and Risk Committee, a leading measure for the CPT industry. We believe that increased focus on risk management will help us deliver more sustainable growth and support our strategy to lead and grow the category and optimize our business. Sustainability issues, including climate-related topics are considered in the risk management process by the Audit and Risk Committee. Our Audit and Risk Committee Chair is an independent non-executive director with extensive experience in financial and corporate risk management, who helps drive the Board agenda for risk management and internal controls. To support the Audit and Risk Committees risk management efforts, a management level risk committee was also introduced in Q1 2023. The risk committee adapts a cross-functional approach to capture multiple views and expertise across key functions within Bud APAC. The risk committee is co-shared by Ignacio Lares, our CFO; and by myself, the Chief Legal and Corporate Affairs Officer and is comprised of various functional heads the risk committee members meet as a group on a quarterly basis to synthesize and assess risks as well as to make and implement risk-related recommendations. As appropriate, the quote chairs will make recommendations to the CEO and code Chair of the Board and the Audit and Risk Committee under risk appetite, profile and tolerance of Bud APAC. We demonstrate our unwavering commitment to ethics and compliance through our actions. We developed region-specific programs tailored to diverse local context. We prioritize the well-being of individuals and uphold the reputation of our company and our brands through consistent communication and a clear responsible marketing and communications code, what we call the RCC -- the RMCC sets the standards for our marketing and commercial communication to ensure that our marketing communication information only for individuals above the legal drinking age and that is carried out in a socially responsible manner, our sales, marketing, legal and corporate affairs to colleagues, contractors and agencies are trained annually and matters related to the RNCC. Also, we adhere to all applicable laws and regulations without taking shortcuts, diligently identify and assess risks associated with our operations and employ suitable technology to implement control measures that minimize risk. Under the direction of our CEO and Co-Chair of the Board of Directors, we've established an Ethics and Compliance Committee at the management level. The committee is responsible for monitoring but Apex compliance with applicable laws and regulations to ensure that all business activities are ethically and legally compliant. To ensure our values are upheld throughout the organization, we provide regular trainings to all employees and value chain partners on our quote of business conduct, including relevant policies and procedures. It's imperative that they fully comprehend our expectations regarding business ethics and transparency. Furthermore, we strive for excellence in corporate governance with 100% of our Board and 100% of our management team, completing the quota business conduct and anticorruption trains in 2023. Colleagues across all our markets have participated in our annual training, our policies and procedures guide business decisions to make them in a professional, fair and honest manner. You can find our whistleblowing policy and privacy policy, anti-bribery policy and responsible marketing and communication code among many policies on our website. This concludes from us on sustainability today, and I hope that we've given you a better understanding of our ongoing sustainability journey. Thank you for the time today. We're now ready to answer any questions that you may have. Ann, over to you.

Thank you, Craig. The floor is now open for questions. Please enter your questions in the Q&A box on the webcast screen. If you know who you would like to address, please stay there...

Thank you, Ann. So let me maybe start by reading the first question. First question is, congratulations on the achievement of China's value chain emission reduction ahead of schedule. Do you think you can achieve the target in other APAC countries such as India? So let me maybe pass this question to Jan Clysner. Okay. Happy to take this one, Jan. Thank you.

Okay. Happy to take this one, Thank you. As you can tell from the presentation, our Scope 3 is more than 94% of our total carbon footprint in '23. So it's very important to reduce our value chain upstream and downstream suppliers common emissions. As my colleague YJ, introduced in the presentation, we are actively working with our suppliers on carbon reduction. The first step of this journey is to measure and track so that we can get accurate data points and make action plans with our suppliers. We do that through supplier engagement, monitoring, reporting, collaboration and innovation. We've already facilitated the carbon footprint mapping for 40 of our suppliers, representing 90 of their sites, which covers 40% of our value chain. We have a milestone in China. We reached a milestone in China with those initiatives. And now we're working on the best practice sharing across APAC. For example, we work with local teams to gain insights to develop tailor-made low-carbon transition plans in each country to realize our 2025 sustainability goals.

All right. Thank you, Jan. Let me read out the next question that came in. Impressed with your CDP Water A list very rare for APAC. What are the key competitive advantages you have over your peers as a result of your water management? So this sounds like a question for YJ, can you take this one?

Thank you. We are very excited to be the CDP water Avis company. As introduced in the presentation, our water efficiency has been improved substantially every year and getting close to our 2025 sustainability goals in water stewardship. In our very operation, we apply reduce, reuse and we think principles to improve water efficiency in our brewers. In addition to our constantly enhancing brewery water management, we started a water footprint in diligence and supplier water management program to improve our value chain water efficiency. As our CFO introduced, we did a comprehensive climate-related risk assessment among our assets in APAC in 2023, especially for the physical risks with potential water impacts such as flu and trusts and exchange weather for short term, midterm and long-term. So we have been working on solutions to build a climate resilient supply chain. I hope this could answer your question... All right.

Thank you, YJ. So let me take the next question. Could you shed more light on your 2023 TCFD risk assessments? Could you provide more examples of transition opportunities in addition to the EAS case? So that's a question for Iggy, I would say.

Sure. Thank you and thanks for the question. Yes, I think the first example that comes to mind, in addition, of course, the young brewery one that we shared earlier. We already have 3 carbon neutral breweries. And here, we've developed, obviously, a series of innovations, which we're expanding to other breweries as well. So for example, we installed new lightweight solar panels, which are 60% to 70% lighter and also more flexible. And we've put these on the fermentation tanks actually in Wuhan and Nantong Breweries. So these are examples of initiatives that limit climate impact and often translate into scalable and economically accretive solutions. Another example I can share, we adopted an innovative closed-loop model actually to recycle retired EV batteries. And we use these to store green power from renewable sources in our Fourchon brewery. So we partnered here, of course, with another startup that has expertise in the space. We identified them through our 100-plus innovation lab. And then the stored electricity is used actually for producing beer in the brewery itself. We also use it to charge EV-heavy truck batteries during -- on peak hours when utility fees tend to be higher, so we get an additional benefit there in line with our comments before. And then maybe more generally, at the product level, consumers nowadays have more equal awareness than ever before, and this can factor into their pursuit of course, of environmentally friendly products and the supply is particularly here in APAC. So this presents an opportunity for us to get closer to our consumers by further communicating the many naturally on brand sustainability initiatives we're already implementing, which are good for business in their own right. So thank you so much for the question.

Thank you, Iggy. So let me take one more question here. We are very happy to see Bee pack is contributing to community building. Could you please provide more details of what that means in APAC. So that's probably a question for Linda.

Okay. I will take the question. Absolutely, I think for us for APAC, we strive when our communities drive. We invest in our communities through job through high-quality technology investment and also through the economic development. In fact, we know through search conducted by Optical economics that beer supports one of every 100 globally. That number is very close to 1 out of every 65 jobs in developing economics. As one example in China, we mentioned that the Kronan project that contributes directly to rural real the issue of for farmers in Susan province already. The income of farmers increases with the high-quality lands that they grow. We also see the similar growth of the jobs and communities in Korea, in India and Vietnam, where we address the need that communities identified. Training on restaurant operations to Korean, small business owners, water stewardship programs in India and Midland emergency drinking water programs for people during natural disasters are all great examples of a way that we invest in our community. Jan, I hope we answer your questions.

Thank you, Jan. This concludes our Q&A session today. I would like to turn the conference over to Mr. Jan Craps for the closing remarks.

Thank you, Ann, and thank you for -- thank you all of you for your questions. We designed our sustainability strategy to enable our commercial vision and fulfill our purpose of creating a future with more tiers. We are proud to have achieved some significant milestones last year with our team, our value chain partners and our communities. We remain committed to bring positive impacts in this region. As I mentioned earlier, we appreciate the opportunity to have this conversation with you. We look forward to future occasions where we can share more on our sustainability journey. Thank you very much, and see you next time.

Thank you, Jan. This concludes today's webcast. Please disconnect now. Thank you.