The Kraft Heinz Company (KHC) Earnings Call Transcript & Summary

Hello. Okay. Welcome back, everybody. Thank you. For our next session, I'm thrilled to welcome back the Kraft Heinz Company and equally thrilled to welcome back Chief Executive Officer, Member of the Board of Directors, Carlos Abrams-Rivera; as well as Executive Vice President and Chief Financial Officer, Andre Maciel. Thank you guys for joining us. Welcome back.

Thank you. Thank you for having us.

So we'll jump right in. We're going to use the entirety of the time for Q&A. And I'll start with Carlos, and we'll just start kind of high level. I mean, the year, I think for a lot of the companies at the conference, it's been a very eventful and difficult start, a lot of different cross currents on the consumer, adding some pressures that maybe weren't preconceived coming into the year. Let's start there and just talk about your assessment of consumer health starting in the home market of the U.S. and then also around the world.

Sure. And you're right. I think that the year has turned out different than many of us expected. I think we saw new administration, I think they're focused on driving down inflation, which I think is going to help also give some confidence to the Fed so they can start lower interest rates, and that would have been a relief, I think, for consumers, and we haven't seen that. So I think if I think about the U.S. today, what I'll say is there's consumers who are not just at the lower socioeconomic class, who are really dealing with the pressures of having to have high interest rates, mortgage credit cards, and you're seeing delinquency already increasing, wages not keeping up with inflation. So it is a moment in which what was a difficult 2024, I think, has extended into this year more so than we may have expected. I think beginning in 2025, many companies and economies were expecting the Fed to be taking down the interest rates a number of times this year, and that will have helped us ease quite a bit of the pressure on the consumer. At the same time, I think for us, as a company, what we're trying to do then is say, how do we continue to make sure we offer consumers at this moment the right level of value so that they can continue to feel that they can feed their families with great quality products regardless of the situation they're in right now. So while it's not what we all expected, I think that for us, it's not a -- we're not going to be victim at the moment. We're going to take an offense play in this particular moment, which is let's make sure we are putting our products and our brands in places that consumers are shopping that we are providing great value to them and that we are emphasizing the benefits that we bring in our products at this particular time.

Okay. And I guess if we extend that. So how has that translated into recent trends for your business? And maybe talk a little bit about sort of at-home versus one go away-from-home dynamic. And then also, how is it factored into the announcement you recently made that you were evaluating potential strategic transactions? I think you had talked about that before, but you formalized it in a press release last week.

I think there were 3 questions in there. So let me break those up a little bit. Let me start with the follow-up to the consumer. I think -- and then I'll talk about away-from-home and the comment on the transactions. I think on the consumer side of things, what I would say is the way it translates for us is that as we go through putting our Brand Growth System, which is a proprietary way in which we are examining what is the right level of quality, packaging, marketing and benefits claims that we want to make in our product. As we put our brand through that, it allows us to make sure that we are, in fact, highlighting those things that drive better comparison in terms of value for consumers. And I'll give you a couple of examples. I think if I think about a product like Mac & Cheese, we haven't had artificial colors and ingredients since 2016. And I still get asked about when am I going to change artificial colors in Mac & Cheese, well, it's just something that we haven't spoken about. So now our marketing is going to be focused on making sure that we are clear with consumers the benefit we bring in our product. If I think about the fact that families are looking for value at this time, we also, this summer, are going to be launching a family-sized pack of Mac & Cheese that you can feed a family of 5 for $2. So that idea of us responding to the moment with the right communication, the right packaging format with a great quality at this particular time. And we're doing that across our portfolio in the U.S., more focused on our accelerated platforms to make sure that we are continuing to drive the growth in those businesses. In terms of away-from-home, I would say it's a little bit of a different story international versus the U.S. Overall, what we see is -- and it's one of our 3 growth pillars. It's for us to end the year about flat that is growing in the -- outside of the U.S. And in the U.S., what we're looking to do is, while there is some still pressure on restaurants right now as consumers are moving more from in-home, we are also diversifying the channels in which we compete. So in the U.S., you'll see us more going towards stadiums, leisure and hotels and other places where we actually have an improvement in our margins and allows us to have a more diversified portfolio that only depending on restaurants. And you'll see us continue to build on that strategy that has worked well for us outside the U.S., and we're going to continue to expand that for us to continue to drive growth as we go into the future. And I think the last third question was related to the comments we have made publicly about our transactions. But I would -- well, I'm not going to make any new news today. What I will do emphasize is that this is something we have been discussing with the Board for the last several months. And we felt it was important for us to make a public statement about it because it was us taking a step up in our aggressiveness about looking into this. Trust me, when I say both the Board and management believe our company is undervalued right now in our stock. So we believe there's opportunity for us to unlock the shareholder value by looking at other type of transactions. Now, we're always going to look at it with discipline, and that's something we have done through our company. Over the last 5 years, we divested Planters, our natural cheese business. And we have always done those things with an amount of this financial discipline that we're not going to violate as we go forward. And our -- so that essentially is the reason why we are looking into this and why we're announcing it at this particular time.

I would just add to what Carlos is saying is this announcement as well does not represent a shift in strategy. It's more accelerate our strategy, which we're confident is the right one. And second, doesn't change anything in terms of our capital allocation priorities and also including preserving investment-grade levels, preserving dividends, those are continue to be critical to us.

Very good. And you answered all 3. Andre, picking up on the -- on Carlos' comments about making sure you've got price points correct and leaning into value. How has -- how have you sort of -- what pressure does that put on the P&L? And how are you able to kind of manage through that?

Yes. So first of all, in our initial outlook for the year, we had already contemplated approximately $300 million of investment in price/trade in the U.S. where -- particularly in those places where preserving a certain level of price gap is important. But as Carlos said, the way that we want to grow the business is not through pricing promotion because we'll have that by offering the right value to consumers. And the Brand Growth System that we're now deploying across the portfolio is shedding light on opportunities for us to invest in products so that we can maintain or increase superiority that we have the right levels of marketing spend, the right claims on package, the right marketing message. So that's how we want to grow the business. That allow us to grow in a healthy and profitable way. We see -- and value means different things to different consumers, right? You mentioned, for example, shifting away from home going to retail, which is common in moments like we're living right now. So if you look today, there is a certain bifurcation happening in the industry, right? We continue to see premium growing in part because of those consumers leaving away from home and going to retail and other consumers seeking value. And I think it's our job to continue to offer our consumers. We have a privilege to have a very balanced portfolio. Our market share across income tiers is very much the same. So we really need to be mindful about the different needs for different consumers.

And with the initiatives you have now planned, do you feel like you've got price gaps that were out of whack now right where they need to be? Or is there more work ahead? How do you feel about that?

Well, first of all, I would say, Andre mentioned, we're making investments additional from what we set out to do this year. So we are responding to the moment. Now our investments are disproportionately in our marketing, particularly as we have gone through this Brand Growth System in our brands to make sure that we have the right marketing and in some cases in which we feel like there's opportunity for us to emphasize certain changes in quality like we're doing right now on Lunchables, which we have improved our cookies and crackers to be superior to anything we have done, we will do so. I think for us, the idea of pricing, first of all, I would say we're not going to out-private-label private label. For us, we -- it's about us both coexisting and emphasizing the values and benefits we bring to consumers. So while there may be certain situations in which we have really put in some pricing this year that are more strategic and surgical in certain categories, because we felt like, okay, those are places that it makes sense for us to invest. That's not the place that we will be continuing to drive a huge amount of level of investment. So when we talk about incremental investment, now we're going to be getting to at least 4.8% of marketing as a percent of net sales, which would be the highest we have had in over a decade. That is really driving marketing-driven initiatives that help us support better products, better claims, better communication and levels of efficiency, particularly in our ACCELERATE platforms. So that's what you're going to see from us being much more focused on driving that level of investment than just being tactical on our pricing.

And part of the investments as well went to product, and that's part of the reason why this year, we don't see gross margin expanding because we think it was the right decision to do is to invest the productivity that we continue to have very strong into the product. And it's important to say as well that as we continue to deploy Brand Growth System across different parts of the portfolio, we are now just starting wave 2 of the categories in the U.S. as opportunities arise. And we think those are the right decisions to long term, we will not hesitate to step up investments if needed.

Okay. Maybe it's a good time to talk about the Brand Growth System because you talked a lot about it in general and referenced a couple of times in this conference. For those less familiar, what is it? And what makes it -- I guess, more importantly, what makes it unique to Kraft Heinz? How does it enable innovation and sales excellence?

Yes. I think for the audience, what I would say is it first starts with us having a forensic-like analysis of our products using about 70 different kind of reports and research in which we actually then go deep into the consumer understanding of what matters to them, whether it is in product, quality, messaging so that then we can really have almost a fingerprinting of what are the things that truly consumer value right now at this particular moment and how do we make sure we accelerate those communications. And I'll give you an example. We did this with our Lunchables business. And we find out that as much as the product was loved, we knew that there was some deficiency in our quality on cookies and crackers versus within expectations in the past. Some of that came because of COVID. We needed to make sure we source those cookies and crackers from different places. We invested in making sure we have superior now products, and now we're telling consumers about it over the summer. So if you think about back-to-school, we'll have a product that is superior in packaging, superior in our products, and we'll emphasize the benefit that we bring. So one of the things you'll see from us is emphasizing the fact that every Lunchables have 12 grams of protein. That came through us going through the Brand Growth System to understand truly for this particular consumer, what matters to them. Now that may be the different case in other products, but it's all done within the context of us understanding a consumer viewpoint on what matters to them. The other thing that makes it unique at Kraft Heinz is that we tie that with our agile scale kind of way of working. So when we are working through this, then we deploy this with agile groups working in a pod in order to then accelerate those changes. So let me give you an example. We did the same thing with Kraft Mac & Cheese. One of the things we saw was that one opportunity we have is to reclaim the cheesiest Kraft Mac & Cheese. That type of reformulation, which you can imagine when we're dealing with an icon like Kraft Mac & Cheese, potentially can take 8 or 9 months on a normal basis. We're doing it in 9 weeks. So by the time from us learning about it, being able to deploy this is what consumers really want, by the time we get to back-to-school period, we will have a superior product, highlighting the claims that consumers care about and making sure we have the marketing to reflect those things. So I think this is something that is transformational for us, and we know that it has worked. We have done it in the past in Philadelphia Cream Cheese and it has worked. We have done it in Heinz in the U.K., which last year was the first time we actually grew share in about 8 years as we go deeper into what consumers care about. And at the same time, we also have seen it now working in things like Capri Sun and seeing the turnaround already beginning to work in the Capri Sun business. So it's something that we'll continue to do. And as Andre mentioned, there will be a next stage as we actually expand the number of brands that we are launching with the Brand Growth System in our U.S. in particular portfolio.

Okay. Great. I guess over the last several years, you have essentially curated a strategy and prioritized certain brands and categories based on where you feel you have like an elevated right to win. What are the key building blocks that kind of help you determine that you have a right to win? And then how does that influence the way you prioritize investment behind what you've called your ACCELERATE platforms?

Right. And for the audience who may not be as familiar with our strategy, we have clarity on separating our portfolio into ACCELERATE, PROTECT and BALANCE. In our ACCELERATE platforms, where it's going to be driving a disproportionate amount of our investment. It is going to be places like our sauces business. Think of it as our ready meals business, which is the cornerstone of that is the Kraft Mac & Cheese brand. And then our snacking business, which is Lunchables is a cornerstone of those. What they have in common is that, one, these are places where we have tailwinds in the business. So they are in categories that have been growing faster than food. There are places where we have the expertise internally and the capabilities internally for us to differentiate our products in a superior way. And then third is also places we have very good strong margins. So that combination of us having great positioning, making sure that we understand the capabilities and the know-how of how to grow those businesses and in a place that there's also tailwinds makes those ACCELERATE platforms the places we're going to be continue to [ dispense ] resources. And it's not just the money. It's also the mental horsepower of the organization are going to be focused on those areas as well.

Okay. And then I guess, by contrast, if you drill down into PROTECT and BALANCE platforms, which play a different role, how does that translate into recent initiatives?

Yes. What I would say is in our PROTECT business, which is essentially our desserts and beverage business, those are businesses -- actually, both of those have very good margins. The category is growing modestly. And for us is how do we continue to make sure we're differentiated in those products in a way that potentially at some point, they could be ACCELERATE. But for us right now, what we see is businesses that continue to deliver great margins, help us fuel the growth in ACCELERATE platforms and still have a role for us to continue to drive innovation in those particular areas. If you think about our BALANCE portfolio, they are -- they give us a significant amount of scale. They're very strong businesses. They have rooted in particularly in the U.S. And those are businesses that we will continue to make sure that we also are having products that are worth paying for. So this is not us abandoning those business. It's just being smart about where we deploy resources. And I'll give you an example. Oscar Mayer is one of those businesses in our BALANCE portfolio. As we speak, we're rolling out a brand-new packaging for all of our deli cold cuts business that it is 25% less packaging material, that it has a benefit of reclosability for the first time in 50 years. And also now we're going to be highlighting the amount of protein that families can get from real food rather than from powders. So that idea of us, just because it's part of BALANCE doesn't mean that we're not going to focus on those things. We're just going to be smart about how we invest behind those, realizing that we are competing in categories in which they may not have the kind of tailwind in those categories.

Okay. As you think about future state Kraft Heinz and portfolio construction -- I guess this relates back to the conversation around strategic transactions. How does this sort of ACCELERATE, PROTECT, BALANCE hierarchy influence how you would frame your future state portfolio?

I'm not sure if I can answer the question you're asking, but what I would say is that any potential transactions will be consistent with our strategy. And that's the way -- so this is not -- don't look at us completely shifting to a new strategy. It would be -- anything that we will look at will be consistent with that.

And if you see what we have presented in the last 2 CAGNYs, we have specific pages on that. We want to continue to expand how much ACCELERATE and particularly test elevation represent of the portfolio. We want to continue to increase our exposure to emerging markets.

Okay. Since you unveiled the ACCELERATE kind of prioritization, that framework, how would you -- there's a lot of external influences that have inhibited progress. But how would you grade your own sort of execution against what you can control with respect to accelerating the ACCELERATE platform?

Yes. What I would say is when we talked about our strategy and the long-term algorithm that we laid out, it was predicated on 3 things. It was predicated on us getting to double-digits in emerging markets. By the end of this year, we'll be at that long-term algorithm of double-digits in emerging markets. It was predicated on continuing to grow our away-from-home business. And I would say globally, we are growing outside -- as I mentioned earlier, outside the U.S., flattish as we go into exit this year, building the right fundamentals by expanding into new channels for us to drive that growth as we go to the future. And I think the one that has been more challenging has been the U.S. ACCELERATE platform, which is why we have prioritized those places for us to put the Brand Growth System and [ produce ] us to put the incremental investment. When I try to get to the -- when I mentioned the idea of getting to marketing levels that are at least 4.8%, this is not spreading a peanut butter across the company. This is focused on the U.S. ACCELERATE platform where we believe we have opportunity for us to continue driving that growth.

Okay. Clear. Andre, tariffs and changes in tariffs and just changes in global trade have created incremental complexities that again, weren't conceived coming into the year. I guess, level set us on how that's impacted Kraft Heinz to date and what it's doing to impact how you plan for business in the back half and frankly, as you early plan for beyond '25?

Sure. So as we have said before, 99% of the products we consume in the U.S. are produced in the U.S. and 90% of the raw and packaging materials are sourced from the U.S. So to a certain extent, that minimized the impact. We said that, there is still a relevant impact. We said in the last earnings call when China tariffs are still expected to get to 145% that the potential impact will be an incremental 150 to 200 bps on inflation. There are a lot of things in motion, as you would expect, the procurement team assessing -- actively assessing places where alternative sources are available. So some things started to be put in motion. We obviously built inventory at the beginning of the year before those tariffs were put in place, which delayed a little bit the effect in the P&L. We -- there are reformulations where this makes sense. There is mix opportunities. You got Capri Sun for example, certain SKUs are totally sourced in the U.S. Some others have part of the components coming from China. So that is something that the commercial teams are also doing, prioritizing those items in the U.S. that have less exposure to inflation. And there is price as well, which in some cases, we see the need to price. And if the tariffs remain as they expect it to be, we will take action.

The one thing I would add is that in spite of all the volatility, we continue to stay focused on those things we can control. And I think the way that we are also managing our cash, even in this particular moment, I think, also gives us quite a bit of flexibility, which is why we are able then to invest back in the business as well, too. So I think this is something that the team has taken a lot of pride that even as we have gone through 5 years of COVID, inflation and now the volatility that we see in the marketplace that we continue to improve our cash position and the way we're managing our balance sheet.

Okay. Good. In terms of -- this is a question on productivity, but it's also a question on capability building because you have put a lot of emphasis on source of productivity that are really -- they're really source of profitability, right, in terms of marketing effectiveness and automation and investments in technology, they drive efficiency, but if they're done correctly, they also benefit the top line. Can you maybe give us an overview of some of the most important investments you've made and what kind of returns you've seen on those investments?

Look, I think being an efficient operator and operate in a very productive way is part of our DNA and will always continue to be so. There are several things in motion on the supply chain side. As we have said, we have now several years of very strong productivity, and we feel confident about the pipeline moving forward. It's a combination of process discipline, a lot of talent upskilling and technology investments. We invested, for example, millions of dollars in new demand and supply planning capabilities, some of which we built like pretty much proprietary together with one of our partners that help us to improve a lot forecast accuracy, which by consequence help us to improve logistic costs and working capital. Revenue management, we spend billions of dollars in price promotions. We have dedicated teams. We have a global center of excellence. We have dedicated teams across the countries. In the U.S. alone, we have 50 people only doing that in the last 5 years. We doubled the amount of promotions that have positive ROI, and there is more room to come, and there is a whole spectrum of things in the way. Marketing is an area that we didn't have very good consistent visibility across the board. And now we have very detailed understanding on the marketing ROIs across brands, media types, where there is opportunity to close gaps to benchmark. So there is just -- I could spend probably 30 minutes just talking about what we're doing on the marketing front to improve the ROI of those investments. The visibility is great now. So really SG&A, we have now 2 captive centers, one in India. We just opened a new one in Mexico, second half of last year. And even though people think that we are extremely lean, there is still a lot to be done in terms of moving more certain type of activities to the shared services organization and be actively doing so. We have 800 people in India already, 200 people in Mexico, and there's a whole pipeline of new activities that are going to be transferring over time. So there is a lot to do in the company to be more productive. And this is great because it allows us to free up more resources to, among other things, step up investment in product and marketing to protect the cash flow.

I think it was a big shift in our company going from the past decade on cost reductions to driving efficiency and making that part of our DNA. And I think if I was going to go a little bit deeper on the supply chain side, what I would say is our focus is driving efficiency from farm to fork. So we are working, whether it's farmers in Brazil on how they can improve the yield using AI in order for them to get more tomatoes out of their crops. We're working, as Andre said, with logistics in order to make sure that we are able to get to the products to the consumer the fastest way possible by us ingesting data directly from the customers. So that way, if a particular trend is happening in TikTok and a particular flavor is pulling up better in Kroger in Cincinnati, we're able to then make sure that our logistics team with our human intervention can then shift order directly to that particular area of the country. But it also is in places in our manufacturing. So we have what we call the connected operator. And what it does is it allows the operator to understand better how is to most efficiently drive that particular line in order to reduce waste and anticipate maintenance issues. As a result of that, over the last 2 years, we've actually reduced our food waste in our factories by 40%. So those are things that externally, you may not see, but it drives a huge amount of efficiency, and it gives us room for us to continue to focus on it as we go forward so that we can spend back in the business as well.

Yes. We have added sensors across factories and it's amazing we have like real-time visibility, like literally real-time visibility to several things. So you can see if equipment start to vibrate in a certain way, that is an indication that maintenance needs to be done before the machine stops. We have places where we can see in real time where there are certain settings overfilling an equipment. So then you can send instructions straight to the floor for people to adjust settings, so then we stop overfilling at that moment and don't wait until month ends to learn that something happened last month, it's like active management. So there are lots of things in that space. It's very exciting.

Yes. Because we can't see on the outside, are you on track? Are you ahead of your original ambitions since you set on these journeys? Or is the mix?

Yes. I would say in terms of us driving the productivity to fuel the business, we're ahead. I think in our long-term algorithm, we were planning around a 3% savings. We delivered higher than that in the last couple of years. And this year, we are planning to end the year closer to almost 4%. So -- and again, as Andre said with the example of SG&A, just because we are a lean company doesn't mean that we still don't have a huge amount of opportunity. And I think this idea of us looking at global shared services is another angle. And I think the use of AI in our system, whether it's revenue management or in our factories or logistics, I think that's another place in which we're going to continue to be able to drive efficiency for the time being.

Okay. 2 hot topics across food and food and beverage.

Only 2, Steve?

Well, there are many. But the -- from an externality perspective, the -- you alluded to kind of health and wellness, but also regulation associated with that. So incremental regulation, specifically in the U.S. around formulation and food dyes, as you alluded to with Macaroni & Cheese. But then also discussion around SNAP and food assistance programs. How material are those sort of governmental actions depending on how they take shape on your planning and on your business? And how are you thinking about it?

So let me separate those 2 things because they're very different approach to them. I think in artificial colors and dyes, I would say, today, our portfolio, 90% of our portfolio doesn't have any artificial colors or ingredients or anything like that. If you look at ACCELERATE platform, that number actually is 97%. So it really is a desserts and beverage kind of situation. I think what is happening right there is that our approach is 3 things is whether we replace places where we can change color pretty quickly, whether we have to then find a different type of solution or we're basically going to reinvent the whole product. So I'll tell you the examples in which we have made some pretty quick changes in red colors and so forth because we knew how to do those things. Things like the color blue and purples are harder. So we are actually reinventing how we go to consumers with those type of products. But we already have dedicated agile pods working against those within beverage and desserts to make sure that we stay ahead of any regulations coming into the future in the pipeline. So I feel actually very good that we have a good sense of what has to be done and because it's also very narrow in scope, it is something that we can attack pretty quickly. I think in changing SNAP, obviously, the bill is still being decided in, as you know, in the Senate, a lot of discussions happening. What I would say is, I think for us, it's important that we make sure that our products continue to be enjoyed by families everywhere in the U.S. I think if you look at our exposure to SNAP, we went from maybe 3 years ago, it's about 20% of our portfolio was exposed to SNAP. Today, that number is more like 13%, which is about the industry average. So it's not like we have a disproportionate amount of exposure to SNAP. And at the same time, I think some of the waivers that you have seen in state local governments around whether it's sugary products, whether it's candy, soda, actually doesn't affect us in our portfolio much either. So I think that while it has an impact, I would say, in the scheme of our peer set and food companies, I would say it's probably less so than others.

Okay. Very good. In the couple of minutes left, a couple of more questions. You've talked about -- you've highlighted an ownership mindset and tried to instill an ownership mindset across your employee base. To what extent do you feel like you've been able to do that? And do you think it's truly a point of differentiation?

100%. I think that -- and you can see that. I mean the fact that is that, again, this -- we talked about efficiency. The idea that efficiency is not just about what happens in the floor in the factory, but it's what happening in our marketing spending. It's what happened in our sales and trade investment. Everyone in the company is thinking with that level of efficiency because they are protecting their own dollars. It's their company. We've also seen that we are also driving the highest engagement with our employees. So last year, in the moment all the volatility happened around us, we had the highest engagement we ever had. We actually prefer work -- place to work in 22 different countries, including the U.S. So there is a sense of pride to what we do about reminding people about the -- people are very clear on the purpose of why we exist as a company, which is for us to deliver great-tasting quality food for people around the world. And I think people take a lot of sense of ownership and pride. It's also -- you can see that in the way we're looking at our Brand Growth System. It is to say we are going to be intellectually honest with ourselves to say, if there are places that our quality is not up to the superiority that we need a consumer expect from us, we're going to do something about it. We're not going to get defensive. We're going to get offensive about it. And if that means that we need to then change our communication, change the packaging in our claims, making sure that we have the right messages that maybe we change from more emotional advertising to more product-based and claim information, that's what we will do because that's what consumers expect from us. So I think it's a sense that we are not afraid to kind of look at ourselves and say, where we can do better. And I think it's something translated across the entire organization.

Great. Maybe as a way to wrap up, earlier this year, you framed the current year '25 as a year of stabilization with '26 being a return to growth and '27 aspiration being a return to on-algo performance. Since then, obviously, near-term dynamics have been different and more challenging as we've discussed. How does that impact, as you sit here today, your '26 and '27 ambitions?

I would say it's a little early for me to start thinking about '26, '27 where we still have to navigate a few things in '25. And I think you saw that our revised guidance is about us making sure that we reflect the moment, but that we also are reflecting the fact that we are going to be going in offense by us investing more into our business. So I think in moments like this in which it can be challenging, you can see companies whether that retreat or go forward, and we want to go forward. We want to say, at this particular time, we're actually going to spend back more in business because we believe in our brands. We believe that we bring great solutions for consumers. And I think that's how we're going to be navigating in 2025. And then 2026, look forward to talking to you further as we go throughout the year.

Yes. Very good. With that, we're right about at the end of the time. So I'll wrap it there. Thank you, Carlos. Thank you, Andre. Thank you all for joining us.

Thank you for your time.