Heineken N.V. (HEIA) Earnings Call Transcript & Summary

On behalf of the UBS consumer team, I want to welcome you to the 12th Annual UBS Consumer Conference. We are so excited. Great. Well, good morning, everyone, and thank you for joining us again for the UBS Consumer and Retail Conference. It is a pleasure to be here again with Heineken. It is a pleasure to be here with Harold van den Broek, the CFO. And we're going to go to some, [indiscernible] transformation at Heineken has been undergoing in the last few years, very significant.

I would like to ask, what are the changes that you are most proud of and also the last 2 things that you have now planned for the next phase.

Thank you for the question. And great to be here and great to see you all here at 8 in the morning, this beat my expectations, so thanks for taking the time. And coming to your question, it's a funny thing, how fine we might end in February 2021, that we -- that Heineken feel or we are the next strategic center [indiscernible] 158 year-old company, which was called Evergreen, here we are 2 years later, and I think throughout that period, we've experienced a lot of turbulence in the world and a lot of changes in our own company. So if you ask me what has been the most important factors of change out this period of time, it really is the embedding of the new strategy. And at Heineken, we said, we are here to shape the future year and beyond. This is first and foremost what we set up to do, because we also realize the consumer landscape is changing. There was the U.S. market [indiscernible] yesterday, and we do see an enormous amount of choice available for the consumer, and they were only focused on our Heineken brands or the Heineken products, you probably are not having at the full potential of what we see is possible out there. And therefore, this evergreen strategy starts with, we want to be a growth company, and we want to be consumer-centric. And we have made significant progress during that period. So over the past few years, if you look at what has changed in our portfolio, just to give you some statistics. But compared to [ 2019 to 2022 ], our total volume in our business are being ceded. Our beer volume grew to [ 4.7% ]. Our premium volume grew 15%. And our Heineken volume grew [indiscernible] over that time period. So you will see that within our portfolio, there are significant changes that are taking place. Now add to the 2 other factors. The first 1 is that we become a much more digital company. And this is important because this is also where the customer base is going into. And the gross merchandise value that we've been able to achieve in 2022 EUR 9.2 billion is a significant number. And already, we see growth [indiscernible] rates within excess of 50% year-on-year, continuing to take. And last but not least, one thing that we wanted to do is to make sure that as we expect the growth profile that we capture the value from this growth. Because in the previous [indiscernible] years we were always willing to be a growth company, but the value capture was not always as obvious, and this is something we want to address. So also there, over the same time period 2019 to 2022 no volume growth, we've been able to deliver EUR 500 million more profit because of the programs that we have initiated and that is taking shape. So these are the things that we really believe are starting to turn the flywheel of growth, now what are the key things that we need to do to you ask you quickly. This is a longer-term journey. We're not there yet. We need to make sure that we continue to continue to [ really nice ] and get this balance right between volume led growth because ultimately consumer penetration and price mix than growth, we got a good healthy balance in revenue. And secondly, what we need is make sure that we continue the productivity drive in profitability, but also, for example, in capital, the progression thing you will see us talking about, and the combination of this, we believe, is a very attractive, the consumer but also [indiscernible].

Thank you. A follow-up on that growth point. Historically, Heineken post was very well balanced pricing on your comment, it sounds like the model might a bit more to price and mix. Is that the best way to think to go to?

Yes. And I think what you are referring to is if you look at our historic period of time, indeed, it was true, that there was volume growth and price/mix growth. But also when we did the proper look back, we talked about this in the capital market, we didn't consciously hit those metrics consistently. If you take, for example, the consumer price impacts in place, if we really price for inflation to a significant extent different, so the price mix was much more driven by the mix element of the portfolio, and the geography that we had rather than a conscious decision to invest in brand power and with high brand power, comes the opportunity to be new market price. And this is the shift that we want to make. So indeed, ideally, I would like to have a healthy balance. Now in some years, like in 2023 when inflation is high, you will see price mix going up from other years, we will really focus on acquiring real [indiscernible].

And I guess short-term, the big headwind has been constant key and Heineken is talking about [indiscernible] inflation like 19% for this year. But we have seen spot prices begin to roll over. So maybe to talk through the hedging side when there's lower pace might begin to benefit P&L.

Yes. Thanks, Nik. This is 1 that you never get right. because when prices are going up in way, didn't you hedge be longer? And when prices have come down, what are you doing with your hedging policy? The best way to think about this is, look, we're in the business for the longer-term. And it's really important that we give credit to our own organization, external about the consistency of how we think about this. We're not a commodity trading business. we are a beer-brewing business. And therefore, our hedging strategy has remained relatively consistent over this period of time, which basically means that for commodities we enter into 12 to 18 months [indiscernible] and that is what we hedged out. And for foreign exchange exposures we're hedging around 12 months now. So we have got a pretty good visibility what is the cost base, this is where the high that you referred to came in about because basically the year -- now what we also observed is that in these lines that are coming off this is true for electricity in Europe. This is true for aluminum, for example, but that will only take it progressively into 2024. And I would really like to say, I'd rather be a little bit cautious, the oversales at this point in time, because I don't believe the era of inflation over yet. I see the same use in spot prices, but I'd rather be surprised, positive [indiscernible].

Okay. And given that, I guess, the two quite large price increases this year. And we've had some comments, retailer and countries like [ France ] limiting inflation, any thoughts you can give us on how negotiations go so far? And any markets that have been harder to price this year than, say, in 2023?

Well, it'd be for say that price is a necessity. It's not something that we like, right? We like affordability in our consumer base first and foremost. But we also believe it's responsible to take pricing when there is a high degree of inflation my brief experience so far. So of course, the discussion with retailers are not going to be easy, but to make the question answer a little bit forward to your question. We are pretty pleased with where we are at this moment in time in Europe. Many of the contracts, if almost all are currently being closed in line with our expectations. But the only thing we need to watch out for, I think we said this also in our full year [ guidance ] is that what we can do is influence the pricing and give clear signals of what it takes in order to operate a healthy business. What we cannot predict is the impact on volume on these price, so whilst at the same time [indiscernible] we're pretty happy with the pricing we've taken, I also need to say, look, in early days, if you look at the consumer response or the competitor response to the pricing, and we will just see.

And following on that, we have very different consumer behaviors in the different regions and very different elasticity. So what are your assumptions in terms of elasticity for the volumes when we look at Europe. So great. But other developing market or Vietnam doing very well.

Yes, exactly. Now I'm happy that you're asking me the question because indeed, sitting behind your desk and answer them, it's easy to look at all the spreadsheets, but the realities in the market are very different. So we also said that in our full year results announcement, we continue to see the world that's not stable. We do believe that there will be surprises popping up, and therefore, it's better to be cautious and agile rather than being too rigid and fixed in your plant. And I want to repeat that, that is actually how we behave and operating our business year-to-date. So let me be a bit specific here. So in Europe, what we currently see is that there is a high degree of price necessary because of the energy crisis that we had and the pass-through of inflation. And so far, the consumer has been relatively resilient. Now we have to see whether that indeed holds. And there is not a huge difference market by market. Some markets are a little bit softer, like the U.K., some markets are a little bit more buoyant like the southern economies, but by and large, we believe that we're on a good track in the European business. So that actually has beaten our expectations so far, but it's still early to call it for the year. Conversely, Vietnam, as you called out, indeed, was the star performer of our portfolio in 2022. And there, we have seen of late a little bit of political situation that had a knock-on impact, for example, on real estate, for example, on politics, there has been changes in government that has taken place, and we have seen a lower level of economic activity in the country, then we would have assumed at the quarter 4 last year. So we do see a softer part in Vietnam. And just to put a dimension with because this is always difficult to do. There is in that season, that is super important that celebratory moments of the year. And you will only know when you replenish afterwards, how good is that season was because everybody is talking of for the big festive season. So it takes about 2 months to figure out what is great, good or okay. And I think what we currently can conclude because of all of these business chances is that it has been a good but for a great [indiscernible]. And that means there's about 800,000 hectoliters were actually shipped in quarter 4 that are not being replenished to the same extent than we anticipated. So Vietnam is a little bit of a, yes, we don't worry about longer-term, but it's not as buoyant as we saw at the ending of this year.

And in terms of part from Vietnam and that slowdown in temporary, are there other markets that you're worried now in 2023?

So Nigeria is another big market for us. And this has been through a bit of a rollercoaster ride with presidential elections. And I'm not sure to what extent you follow the news, but there was this abrupt ending of the nomination, which basically puts the market on no cash available. Now clearly, if there is no cash available, it's very difficult to do in Nigeria. And only 2 days ago, due to high court ruling, this all denomination notes are being put back into position on the end of the year. So also there, it's been now ups and downs and our business to navigate this complexity. We hope that Nigeria, by the way, is now in a more steady state. The early indications [indiscernible] we'll have to just 1 on time, kind of right?

And as we move to the Heineken brand. The growth has been magnificent over 28% and is much higher than pre-pandemic, you had the launch of Heineken silver, which has been very successful. Can you tell us more about your thought on how you're driving the Heineken brand globally.

Yes, indeed. So first, we're extremely proud of how the Heineken brand is continuing to perform. This is not a flesh in the pan. We've seen consistent double-digit growth in more than 50 markets. Now for period like 3 years in a row or so. And as I just said at the opening, the Heineken brand in aggregate is now [ 1/3 ] bigger than what it was in '19. So this is nice, but this does not come from just Heineken original that is traveling across the growth in consumer so cover it. There is innovation behind it as well. And what's committed in Vietnam with a pairing of yield with a less different year. This was how Heineken Silver originated and became really big success. And actually, after a period of time where it was cannibalized mainline with [ franchise ], we saw 2 growing. China is extremely well. And based on that insight that he has bit paid lower calorie and a new target audience, much more tailored to the younger consumer. We decided to roll it out in 2022 markets in Europe. And this was the biggest launch in Europe. So in terms of the [indiscernible] effort and impact, this was really very well done by European business. And the early signs and let's not celebrate. I'm in finance pretty cautious first, as you will learn to only, I don't want to over-celebrate too soon, but [indiscernible] a big launch, the biggest in FMCG. The fact that we see a lot of new consumer [indiscernible]. So the cannibalization rate on the Heineken brand is relatively low. We're attracting also outside of category into the beer category, which is also a very important part of how to unlock capital growth, of just Heineken growth, these are all important indicators. And that gave us the moment to also go big here in the U.S. And I've seen that yesterday in the trade, early launch, you will not see it everywhere yet, but in the next couple of weeks, this will be ramping up. And the best we would be phenomenal. The execution of the distributor excitement is very high. So over, significant.

So if we move to, obviously, we have a huge [indiscernible], also have been in both either I mean how are you thinking [indiscernible] were more important for Heineken?

So I really need to say that first and foremost, our priority is to make sure that beer is held. So not for nothing. It's our strategy called Shape the Future of beer, of course and beyond. So we really want to make that we are not probably changing that strategy. And as we just articulated for example with lower business, the more accessible Heineken silver beverages, plenty innovate still in the beer category space. Now having said that, we were very -- after a long period of patience, we got final approval on the tribunal in South Africa so that the distillates can now really hopefully get to in the next 5 to 6. And that is for us also a fantastic opportunity to think about the beer in beer space because what is effect is that the consumer profiles are shifting, if you look, for example, at the [ celsus ] that you closed, it was phenomenon year in the U.S., but they really didn't travel that much in Europe. And in fact, [indiscernible] fiber lower calorie is doing 80% of the cost private category in the U.K. for instance. So it really means that beyond beer in different consumer offerings or different parts. Now coming back to this Distell, I think Distell has understood this phenomenally well because 1 of the reasons that we've taken us very exciting, not only for South Africa because that's the business that we acquired, but it sees potential to travel is, for example, the forced with white, which is reinventing wine in a much more accessible format or the purity flavor drinks like Benin, Nigeria can't wait to get their hands on because consumers profiles are changing, and we do therefore see quite [indiscernible] beer, whether the deciders, flavor drinks or, for example, what the Distell has done to scale and amplify that across time will tell. We will get it right, [indiscernible] based on consumer insight before we go big and this is to do right. But we do believe that there is [indiscernible] .

Where do you think you could expand those portfolio? Area and region.

So yes, we really do believe that there's potential here in the U.S. export. I'm not talking about the Distell portfolio but about the real beer portfolio. But first and foremost, this [indiscernible] learn there, and that's where it will go.

I come back to the full year guidance. So mid to high single-digit growth [indiscernible] organically, which the market seems to like being reiterated back in February. As we look forward, you talked in opening remarks about operational leverage, just talk about some of the tools that prove the medium-term.

Yes. So first I think what is important is that we get the balance right of the volume growth and price mix as well, right? It's very difficult to create operating [ profit ] organic growth if don't really get the leverage at the top line so portfolio design, price mix management are going to be absolutely critical. And we talked about the fact that revenue and margin growth capability is starting to be embedded in our organization. So this is important, quality of growth over quantity of growth, that balance looks to be right. The second thing is that we really are on a journey to become much more cost and cost conscious as an organization. Fact of the matter is that the ambition that we set ourself in 2020, we delivered EUR 2 billion of gross savings by 2023 is firmly on track. We will certainly hit and likely exceed that number in 2023. But what is important is that it doesn't stop there. Many, including us, have done in the past, big [indiscernible] reset Sprint, and then you turn back to normal and 5, 7, 8, 10 years from now, you have to go through the whole motion again. This is not what we want to ambition. We want to make sure that we retain this contentious culture and performance management and really embedded in the business. And that's why we also set out beyond 2023, we see an annual savings rate of about EUR 400 million that really has to come into play. Now all of this is still growth because if we have great investment opportunities, we will continue to invest in the external growth of this business. And that is what we call the virtuous circle. It's quality growth. Growth gives an opportunity for productivity improvement productivity improvement gives an opportunity to invest. And that cycle of growth, we really are [indiscernible].

And do you think the best way to think medium term is a EBIT growth algorithm in euro terms? Or longer-term, could you go back to a margin focus the organization to focus on cost?

So I'm speaking personally now, I'd love both, because I ultimately believe that the quality business that has a long tenure of success is able to create absolute profit [ margin ], but at the same time, because of top line growth and [indiscernible] there is a degree of leverage that needs to be gone through. So if you ask me, what is your ideal scenario, my ideal scenario we consciously stepped away over 17% margin. And I'm very happy that we did because they were just not feasible in the current circles. But over time, I think operating profit organic growth is the lead metric, but I would expect to see operating leverage come back into the equation over time.

Okay. Perfect. And then a few questions on the markets on Brazil. That's been a big source of CapEx investment in recent years and going forward. Can you walk through your CapEx plans for the next 12 to 24 months? And are we now where the business is longer CapEx or good complain?

Well, I'm happy to inform you that the growth is still CapEx. So it is the case that we continue to see a very high sense of demand for the Heineken brand. And we're very right? The fact that our brand power is greater than our ability to serve the market means that there is consumer pull. And this, in turn, has led to Brand Heineken being the most desired brand in Brazil. and Brand Heineken also being the brands that have taken, time and again, the necessary pricing in order to negate the portfolio that we want to grow. So we're extremely happy with the brand Heineken. We're also investing significantly including that brand Heineken also from a marketing and sales expense point of view. But the second part of the business that is starting to take shape is the upper mainstream segment. So our [indiscernible] is starting to create scale and is accelerating quite significant, where we've seen growth very much in the double digit, the 40%, 50%, and that is now starting to become a business that is also meaningful. So the total portfolio in upper mainstream will really premium is in very healthy shape. The capital investment we have planned out for the next 5 years, 3 years, 2025, so we have announced the building of a new greenfield site that has become operation in 2025, 5 million hectoliter, but easy to go to 10 million hectoliter before, in the medium-term in tranches of about 1.5 million hectoliter, we're expanding the existing breweries so that over that period of time we then operate with [ 15 breweries ] across Brazil. So we do believe that we're holding the right balance between the demand for [ upwards ] out there, but also making sure that buying capacity comes available in the market, both for Heineken as well as for us.

Great, you talked about the big programs in Brazil on [indiscernible] launching the unit, could you talk a bit about the aspirations for margins at the other level over the medium-term? And back in the past, we talked about converging with group average. A lot of things happened along the way.

Yes. Well, a lot of things happened on the way, but I'm also not satisfied with the progress that I see, because indeed, the portfolio has completely shifted from 70% economy to now at the end of the year, it was [ 40% ] mix in upper mainstream and premium. So the shape of the portfolio and the margin that it generates, I think, is now really very good. The team in Brazil has done an outstanding job at pace to create that portfolio that is ready to sustain it. At the same time, we're still investing because we see there is more demand for our product. To answer your question, we have made steps into getting to profitability. We are now profitable in Brazil and have actually grown profit and profitability in Brazil over that time period, despite high foreign exchange and high inflation. And I use this anecdote also that we are importing more than 1 billion bottles. These are significantly more expensive than local, all of that is in the pipeline in making. So I do believe that by 2025, we'll see a much greater and a much better profitability profile in Brazil. I'm not going to give you numbers out of competitive reasons, but we will be there. And a little bit later, we still believe that coming to the Heineken average is very much possible.

Perfect. And then we've into Mexico, also at the CMD, you talked about the progress on retail trade box, which I think is now at 16,000 stores. Can you talk a bit about what advantages that gives you, what that means for margins over the medium-term.

Yes. So we're very happy with the transition out of OXXO because that was part of the agreement. Just as a reminder for the audience, it will take 1 more full year before [indiscernible], so we do unfortunately still suffer from the mixing impact in terms of our market share, mostly explained by this in [indiscernible] that is going on. But at the same time, we built indeed [indiscernible] and the dynamics are very good because we can influence the portfolio to our own liking. So all the premiumization is still relatively modest. So there is still a lot we the scaling of innovation, like, for example [indiscernible], Heineken Silver is happening also [indiscernible] and the levels of profitability are significantly better than the agreement that we have with, so you actually see that whilst growth is relatively in the OXXO mixing in Mexico. Our levels of profitability has actually increased quite significantly.

And then 1 more market back to [indiscernible], you touched on Vietnam earlier, short-term pressures, but positive medium-term and thinking at the margin level that, that used to be 1 of the highest margin markets in the Heineken Group. I guess that's it slightly during the COVID period. And but as you look forward, is the main focus, just growing the top line, especially Tier 3 cities getting margins back to that previous think about 40%. Is that focused.

No, I'm very -- usually, I'm pretty much focused on operating profit growth, margin cost is in right of portfolio, the conversation we had in this fireside chat today. But you also have to realistic, if you are occupying 95% of the premium market in Vietnam like what we do, and there is still so much potential because it is per capita consumption is still relatively low, but people give affordability issues and the premium, we would be foolish not to lose unit [indiscernible] of Vietnam and expand the portfolio to mainstream and to the north of the market where we are not traditionally the stronger, so I do fully expect Vietnam to be running a very tight ship on portfolio and costs in order to maximize value creation, but at the same time, I'm going to give them a lot of leeway to continue to grow because this is the heartland of what we want to do. And also there, profitability is still relatively high compared to the company average, so you would be, I think, stealing from your own wallet if you would not capture the opportunity and leave that over the competition. We would not.

And then just 1 final 1 on Vietnam, just the [indiscernible] dynamic. I guess we've seen a between both North and South, that a bit more competitive, do you think, over the past 5 years?

Well, I don't know because I wasn't there 5 years ago. But I do believe that this is a competitive market. And I don't think that was in Vietnam 3 months ago. It's always dangerous to be in place, and I was very happy to find in the [indiscernible] all of inflation. They are really, really working very hard to make their business [indiscernible] every time, so do we have some competition there with Saigon and Carlsberg. Yes, we do. Are we ready for that to, absolutely. And that's why I also believe that we should give the investment, for example, in digital, but also in a richer brand portfolio with the [indiscernible] local needs of the consumer in different because Vietnam is a big market also, it's a big country and we just need to be ready to continue to invest to capture the maximum [indiscernible] that we see.

Great. So now we move to ESG. You have a very ambitious target you want to reach in your own production by 2030 and your supplies by next year. So where are they in your challenging that are coming along the way.

So first, we set out the brewer better world condition also this in 2021, where we committed to sustainability targets [indiscernible] targets. I think that its whole carbon neutrality recurrently together with water are probably 2 very difficult things to do, nothing is impossible. And I do believe that we've made significant progress. So versus 2018, which is the reference here, we have already reduced the carbon footprint in our own production by 18%, you would say, 18% and then you need to get to 100%. But that also means that there are learnings there. And we now started to really work through our planning processes for about 80% to 90% [indiscernible] what it takes, and we have successively over the next couple of years on how we [indiscernible] strategy in our [ brewer ] footprint. Now this [indiscernible] is building the biggest solar panels like we did in South Africa, to heat pumps that we are now installing. All of these things have a role to play. We allocate the capital. We know what it takes. We're working with [indiscernible] which perhaps I should not because I will others and we're also working here as well. But we've got a very clear roadmap on how to [indiscernible] strategy by 2030. So although this is hard work because we have a lot of new work. We know what it takes, we know what it costs, and we know what to do. This is now in progress.

Today, I mean you took EUR 1 billion, which was import than some people thought. There could be it on to shares and other placings. Do you think you maybe get another EUR 1 billion and maybe you go obviously beyond your 2.5% [indiscernible].

So we really saw this unique opportunity. And therefore, I will [indiscernible] certainly too much into the transaction that we did just now. And the reason why there will be a huge opportunity and now over the period [indiscernible] limited period series that they would actually completely from Heineken, really wanted to make sure that we gave the signal that we have confidence in our own strategy, and we moved part of the overhang that statement created whilst respecting fully [indiscernible] now on. So in that crucial moment, we felt in what to give that signal. Our capital allocation principles incomplete which is, first and foremost, we want to invest in the organic [indiscernible]. Secondly, we indeed will adhere to the net debt [indiscernible]. Third, we like predictable -- we like M&A opportunities and all of the above if they are being fulfilled, then we can decide what to do with any remaining cash or financial [indiscernible] have. Now all of these metrics were building that projected a month ago. We don't know how that will pan out in the future. So we'll take 1 opportunity at the time and make that [indiscernible] .

And then in terms of digitalization, we've been investing at all is a new way to look to consider, how are you thinking about the plan for in which areas you want to focus the most.

So the digitalization for us falls into 2 separate buckets. The first 1 is we see digitizing the route to market as a key thing that is currently happening across the world. And this is particularly true [indiscernible] now more and more of with Nigeria, also in Vietnam. And why because the small 1 of what stores, whether you're a direct delivery or indirect delivery, the world is moving to digital order taking recommendation management. And there is a lot of efficiency that businesses we have we're starting to digitize your whole go-to-market model it. So that part, I think, is super important and will continue to evolve. And we're very happy with the progress that we're making, both in terms of net promoter score as well as absolute size of business going to the digital ecosystem. We believe that we've got the offerings that [indiscernible] , and this is extremely important, and we'll continue to invest behind this because the base on. And we really do not want to be left behind, and we don't think we are. So that's, let's call it, the front-end part of the business. That's where the value mostly sits because we don't want to lose customers because we don't have the offering that they need. On the back end, we still have a long way to go, because Heineken with open-centric model, the operating company was in full discretion running their own orders, we have a legacy system landscape that we need to tackle. And also that is in full swing. So the 2 combined, of course, is not digital because we only don't want to do optimization in the front end without actually having seamless transactions at the back end did well. Now this is a 5- to 8-year journey. We'll diligently work our way through it. And as long as we are servicing our customers and consumers in the way that they want, and are diligently getting value from eradicating the [indiscernible] of many or opportunities that we see to simplify our system landscape in the back end, I think is working, but we'll take the time.

And then if you move to capital efficiency. So capital efficiency productivity gains are all key parts of the Evergreen strategy but also the working capital. So what are you doing to try to get the working capital to a level that is maybe closer to other peers?

Yes. So indeed, I think the reality is that when we did the competitive analysis, there is an opportunity out there to drive return on net assets, return on capital and [indiscernible] figure, I've always been clear also to audiences like this, that we cannot do all the transformation with one. If you currently see the level of change that is happening in Heineken, I don't want to disrupt even more than what we currently do. And ultimately, first and foremost, we want to make sure that we're a growth company, and that's where a lot of the organizational energy needs to go because that ultimately creates our future. Now having said that, because your question is very specific, what you're going to do. The first indication, therefore, is we're going to take time. And at this moment in time, there are a group of selective teams who are looking at inventory management, looking at the payable structure, are looking at data collection, are looking at investments that we potentially could not make ourselves but are doing this as a service. All of these elements are coming into the equation in order to address how we can work in a more efficient capital base. The reason why I say, look, all of these groups are working is that I really want to make sure that this is structural, and right for the business. We do believe that there are opportunities and we'll go after them, and you will see this progress that we come in. It also means that, for example, our capital efficiency, the amount of CapEx that we put in the business. Also there, we will scrutinize and see, for example, what we're doing in Europe with platforming, making sure that we have the ability to service multiple markets from a multiple set of breweries, this basically can increase throughput to breweries and at the same time, reduce the need for inventory. These are more systematic examples that we believe are improving a couple of ways. And that's what we'll also be focused on.

Great. Thank you, Harold. Thank you so much, Harold and Federico for joining again the UBS Consumer Conference. Nik and I and UBS, really thank you for being with us for another year.

Thank you for the opportunity, and great to see you, thank you.