Coca-Cola HBC AG

Good morning, everyone. Thank you for joining the call and a bittersweet one for me because after seven fantastic years at CCH, today's call will be my last as head of investor relations. I have learned so much in my time, perhaps most critical of all the importance of culture within business. This is a special business, ambitious, dynamic, but also focused and disciplined. And it has been a privilege to tell the CCH story in the capital market. As you may know, I'm not moving on to another company, but I'm rather going to take a pause to spend more time with my recently extended family. I will miss it, not least the ongoing discussions with investors and analysts. I have a lot of thank yous, et cetera, but I will spare you that for now and instead say, for the last time, I am here with my CEO, Zoran Bogdanovich, and our CFO, Anastasia Stamonis. We'll start with some opening remarks from Zora, and then open the floor to your questions. Please keep to one question and a follow-up, waiting for us to answer the first question before moving on to your follow-up. We have about an hour for the call today, which will give us plenty of time for a good discussion. Finally, I must remind you that this conference call contains various forward-looking statements, and these should be considered in conjunction with the cautionary statements in our trading update this morning. And with that, I will turn the call over to Zoran.

Thank you, Joanna. And good morning, everyone. Thanks for joining the call. Before we get started, let me take a moment to thank Joanna for her dedication and huge contribution to Coca-Cola HVC over the last seven years. During these dynamic and challenging years, to say the least, we all appreciate Joanna's professionalism, passion, and care for our business and its people. We wish her all the best the future i'm very happy that joanna is passing the torch to jemima who has been a key part of the team for the last three years and who most of you will already know well anastasis and i are really looking forward to working with jemima in her new role when she formally takes over from the 1st of january and we wish her every success moving on to the results we published today let me start by calling out three key highlights from my perspective. First, we've achieved another quarter of strong revenue growth with good volume momentum, as well as revenue per case expansion. I'm pleased that our Q3 results build on the strength of our first half and really demonstrate how this business can deliver quality growth in a range of market conditions. Second, our ongoing investment in our bespoke capabilities is what is enabling the agile and focused execution which is driving these results. And thirdly, we are updating our guidance to reflect the strength of our performance in the first nine months and also the confidence we have in our portfolio and capabilities to continue to allow us to win in the marketplace. And now I'll share some detail on the Q3 performance after which Anastasis and I will be happy to take your questions. Organic revenue grew 13.9%, with volumes up 4% and price mix up 9.5%. Reported revenue grew 8.9%, even as we continue to face currency headwinds. I'm really pleased by the continued top-line momentum in Q3. Volumes expanded at a consistent pace compared to Q2, despite a mixed consumer backdrop in some of our markets. and we delivered both volume and revenue growth across all three segments and all three strategic priority categories. This is testament to the hard work and agility of our teams, suppliers, and partners who work tirelessly to deliver for our customers day in, day out. Revenue per unit case has also showed continued momentum with both price and mix expansion. When it comes to pricing, we are seeing different trends across regions. In our European markets, we have moderated the level of price increases versus 2023 and early 2024 to reflect a lower level of inflation. However, in Africa, we continue to drive pricing as we navigate the currency devaluation and the inflation we have experienced this year. Our revenue growth management toolkit enhanced by data insights and analytics allows us to continue to address and adapt to the range of affordability and premiumization needs of our consumers. We have deployed a wide range of RGM initiatives so far this year, which we continue to benefit from in Q3. Let me give you just a few examples. The summer period, as you know, is a great opportunity to maximize our potential in the hotel, restaurant, and cafe channel, where we have focused on driving premium glass bottles. In the at-home channel, we launched smaller, premium cans of Kinlin in select markets over the Q3 period. When it comes to affordability, we have remained agile in promotion and continue to see good results from our returnable glass bottles in Nigeria and Egypt. This ongoing focus on improving package mix is driving good results, with total single-serm mix up 60 basis points overall in the quarter. While we are talking about capabilities, I hope you were able to watch our Chief Operating Officer, Naya Kaligaraki, and our Head of DIA, Ruchika Sajdeva, earlier this month when we hosted our first bite-sized investor event. This deep dive into our data insights analytics capability shares how we turn data into actionable insights. We also explored how DIA acts as a connector an accelerator of our other key capabilities, underpinning our growth ambition. We've had great feedback, so thank you. And the event is available on our website if you missed it. Now turning to performance by category. Sparkling performance remains robust, with volumes up 3.9% in the quarter. Trademark Coke grew low single digits, with Coke Zero ahead of this, up mid-single digits. The summer season is an important period when we work even more closely with the Coacola company, capitalizing on our innovations and new launches from the first six months of the year, particularly in the out-of-home channel. We also benefited from new innovations launched in Q3. We launched new co-creations flavors, including K-Wave and Oreo, and one specially created for the Nigerian market. In September, we launched Fanta Beetlejuice in targeted markets ahead of Halloween, and we've seen good results from the Marvellux activations throughout the season. These initiatives all help to drive new consumer recruitment and excitement about the portfolio. Energy momentum remains strong, with volumes up 28%, even on top of high comparatives. We continue to benefit from our close work with the Monster Energy team, in creating a broad energy portfolio, both in terms of price points as well as flavor and recipe innovation. Affordable energy brands have been a particularly important part of our growth in the emerging segment. We continue to see strong growth from predatory Nigeria, while in Egypt the energy category is performing ahead of our expectations, despite some of the macro challenges in that market. Coffee is making excellent progress with volumes up over 35% and with strong performances in all geographic segments. Growth of both Costa Coffee and Cafe Vergnano was driven by out-of-home segments, which is where we see the greatest long-term revenue and profit potential for the category. Steel volumes grew 3.4%. Water grew mid-single digits. I'm pleased to report that sports drinks continue to grow strongly up High team. Powerade had a great summer as we leveraged the Olympics through July and August and added dedicated powerade coolers in key markets. Moving to ESG leadership. We are continuing to make progress on packaging circularity. The recently launched deposit return schemes in Romania, Hungary, and Ireland are showing good results in increasing collection rate and we are seeing customers and consumers really embracing the scheme. Now, turning to performance by segment. In established, Nestle's revenue grew by 3%, with continued volume growth in the segment. I'm pleased with this performance, which was delivered against the backdrop of more consumer sensitivity in some markets, which we flagged at half H1. Italy, Austria, and Switzerland are markets where we have seen signs of consumer sensitivity to pricing. And Switzerland also had very poor weather this summer. When it comes to categories, we achieved good performance in established from Coke Zero, energy, coffee, and sports drinks. In developing markets, Nestle's revenue grew by 12.6%, led by strong price mix of nearly 10%. Volumes continued with a similar momentum to the first half, up 2.5%, with a good contribution from all our strategic priority categories, as well as from Stills and Premium Spirits. Lastly, in our emerging markets, we delivered organic revenue growth of 24.1%. As has been the case throughout 2024, price mix has been the main driver of our revenue growth as we have navigated the impact of currency devaluation in both Nigeria and Egypt. That said, volume growth has also been a strong contributor, with growth of 5.6% in the quarter. I'm particularly pleased that despite significant volatility in individual markets, we have achieved very consistent volume growth in this segment in 2024. At this point, I'd like to call out the fire that happened at the start of the quarter in our Bambi plant in Serbia, which created significant challenges. Our team there have managed the situation with such resilience and agility, and with true focus on delivering for our customers. It's how our people pull together at these challenging times that makes the difference. And I'm incredibly proud of the team. And now let me say a few words about our expectation for 2024. We are mindful of the challenging macroeconomic and geopolitical backdrop and a continued uncertain consumer environment in some markets. However, reflecting our strong performance and execution in the first nine months and our confidence that we can continue to win in the marketplace, we are updating our guidance for 2024. We now expect organic revenue growth of between 11% and 13% and organic EBIT growth of between 10% and 12%. Finally, I would like to thank all our people and partners for their ongoing support. I look forward to working together to deliver our ambitions for the year and to prepare for the years ahead. As always, it is this collaboration that allows us to drive sustainable, profitable growth and continue to create value for all our stakeholders, no matter the external backdrop. Thank you for your attention, and with that, Let us now open the floor to questions.

Thank you.

We will now begin the question and answer session. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. We will now take our first question from the line of Simon Hills. Please go ahead, Simon.

Thank you. Morning, everybody. So just a couple for me, please. Zoran, you mentioned, obviously, you've raised the guidance range there for the full year today. Obviously, the revenue growth guidance has been raised at the top end, but you haven't raised the top end of your operating profit guidance despite perhaps a lower COGS backdrop. Why haven't you raised that profit guidance? Why aren't we seeing the full drop through to profitability of what could potentially be a better revenue picture? And then secondly, just a couple of technicals. You mentioned the impact of the fire at Bambi. How do we think about the full year impact that that is potentially having on the business now? You gave, I think, sort of a worst case scenario, about a 200 BIP headwind back at half one stage and then associated or sorry slightly separate to that last week we heard about product recall of some coke products in Austria how should we think about the impact that could have on your q4 established business hi Simon thanks let me start and then Anastasis will also give some details based on your questions first of all

Let me just say with the top line, as you see, we have done and guided for a range simply because we do see that it's a very dynamic environment across the market. First of all, I want to emphasize that I'm very pleased that because of our very strong execution and performance in the nine months, we felt confident to upgrade the guidance. But equally, we remain very mindful that there is still two months, very important trading season ahead of us. And knowing that we do see some sensitivity of consumers in several markets, we simply cannot, we certainly know how a consumer might react and evolve. That's why we see this range. And let me answer the Austria question, and then Anastasios can close the loop on how this flows through together with connected with Bundy Impact. For Austria, this is one unique case where it's a result of a technical fault, which was really extraordinary situation. And we have acted immediately based on one consumer complaint. and reacted very fast and all the products either at the retail outlet are blocked and pulled into their warehouses or the product is locked in our warehouses. So while in the communication to the public we have talked about the total theoretical number of bottles affected, Because of the nature of the incident, we are very certain that maybe only a small number of bottles might be affected, which we are going to check with the procedure that we have developed with the local authorities. And we are going to, after the product is verified, we are going to return it back to the market, ensuring absolute full safety for our consumers. So having that in mind, we do not expect any material impact reminding you that Austria is a three and a half percent of our total group and 13 in the established and whatever the impact may be it is fully embedded in our in our guidance yeah hi Simon well as very well said we still have two months to go which are critical with the certain volatility in the market and sensitivity

You're right. We have upgraded the revenue slightly more than the EBIT. And of course, we're well aware of what this implies on the margins when we look at from the two extreme ends of the ranges, right? Now, within our previous guidance, there were also this dynamic of the extreme of ranges. So nothing really changes from that perspective. Now, that said, there are two elements that are impacting EBIT more than revenue. So, as Zona was highlighting, the fire of the Bambi plant and the impact of Vastria as well, they have more of an EBIT impact rather than a revenue impact, and they are fully covered within the guidance ranges we provided today. Now, overall, we are very confident of being able to execute the plan and deliver our guidance for the full year.

Understood. Thanks ever so much. Thank you.

Our next question comes from the line of Edward Mundy. Please ask your question, Edward.

Morning, everyone. I just want to echo, Zoran, your words. Thanks to Joe for all the help over the years and wishing you the very best for your next stage of family life. So two questions, please. I'll ask the first one first. Just a really big picture question, Zoran, for you. You sort of highlighted a relatively mixed consumer backdrop but the business is still very resilient on volumes, price, mix, categories across the piece. But given your advanced data and analytics, what gives you confidence that you're not going to get a volume elasticity impact like what we're seeing across a lot of other parts of consumer staples as we go into 2025?

Good morning, Ed. Thank you. I mean, that's the whole story why we recognize that both revenue growth management and data insights analytics in combination, they serve the purpose to give us all possible insights and granularity of understanding consumers and micro segments across the market so that we can fully adjust and tailor both affordability and premiumization initiatives that we have across the market. So this is very dynamic. And as Naya likes to say, always on RGM approach that we have. So I can only say that how this works is that we have already anticipated importance of affordability for the year. That's why this was embedded as a starting point in our business plan for the year. As we go through the year, we continuously monitor what is happening in every single market, and we are adjusting the plan. That also means that we are adjusting not only the possible intensity, but also the nature of the promotions that we are doing in the market, which play an important role. So there is a whole range of affordability initiatives At the moment, we all see that there is importance on that, but it's also blended with premiumization. So I cannot put my finger on how much we will be able to grow the volume. However, as we said this year at the beginning of the year, we felt confident that we will drive and have positive volume. And I'm very pleased that we will deliver on that commitment and what we laid out at the beginning of the year. And I have the same feeling for the next year that we are aiming for the positive volume situation.

Thank you. My follow-up is really around energy and also spirits. We're seeing quite a big slowdown in the U.S. energy category, but there's no slowdown at all in your business. Is it just low levels of penetration? Is it the relative affordability and some of your more affordable brands that's leading to that difference? And then on spirits, perhaps any learnings from the Finlandia deal and your broader spirits portfolio, how easy has it been to integrate these into the business and what benefits have you managed to get from a commercial standpoint from having spirits alongside your other parts of the portfolio?

Yeah. Yeah, we are touching on two important parts of our total portfolio. 24-7 portfolio and strategy. So, energy, we will be this year, just to lay out one fact, it's going to be the ninth consecutive year of a strong double-digit growth in energy. And I can't fully say the situation in the US. I've seen a fantastic execution of energy. last week in US. However, we know that in a number of our markets, we have still ample space for growth, knowing that in many markets, even though we are gaining share, there is still a lot of share that is opportunity to capture. Secondly, the category itself is growing with a very good pace. And this is the result of the fact that the cohorts are expanding and the consumer base is continuously expanding, which is a result of a continuous reformulation, introductions of new recipes, which also include now zero sugar variants, innovative flavors that Monster Energy team is every year bringing, very relevant properties. So I can say that... And last thing that I forgot to mention, I really want to highlight that we play intentional multi-brand strategies. So playing with two brands or even three brands in some markets is really done in a very specific manner so that we hit the relevant price points and we target the relevant consumers. When you combine that with our strong focus on cold drink and equipment execution in the market, I can see that these are the ingredients which we don't take lightly. And we constantly keep very high and strong focus behind this category. And we are confident and optimistic about what we can do with energy over the next couple of years. Turning to premium spirits, which as a category are growing because of two reasons. One is Finlandia. I'll come back to that. And second is also how we are developing and growing business with our partners, brand owners, meaning Braun Forman, Edrington, Bacardi primarily. Turning back to Finlandia, I'm really excited and very pleased that this whole transition has been going very smooth. Now, this is also because we have in-house capability of the team that is dealing with premium spirit. So acquiring Finlandia for us was not a new thing. However, we already knew the brand, we know the characteristics and dynamics of this whole category. And this year, we are taking over from previous distributors, starting the business. And I'd like to say that the car is still in the garage, getting ready for a ride next year. As we are taking over businesses and we are on the marketing front, preparing exciting things. So more to come. But I can just wrap up to say that we feel very pleased and very confident with what we can do with this brand. And last point, especially because it is so, as a standalone brand is great, but also in terms of mixability and how it combines with a number of categories and brands that we have in our portfolio. This is where the exciting combination and potentiality exist.

Thank you. Thank you.

Our next question comes from the line of Matthew Ford. Please ask your question, Matthew.

Hi, Zoran. Hi, Anastasis. Hi, Joe. My first question, and I'll come to the follow-up as well. Just on... The markets in which you're seeing kind of consumer pressure, obviously, you've called out a few and you called out several of the H1 stage as well. If we kind of compare your clients today versus those made three months ago, you know, are there any markets where you've seen things get sequentially worse in terms of the consumer pressure and kind of macro situation? And are there any markets that you call out where, you know, potentially we're seeing an improvement? That's my first question.

Hi, Matthew. We don't see anything dramatically different than H1. We do see that this consumer sensitivity on pricing, I mean, this is not something that two months you see, then two months you don't see. It's a period where in few of these markets it's there, and I can only highlight that In Italy, we do see that consumer sensitivity is there, maybe to slightly bigger extent than we thought three or four months ago. But based on that, we have adjusted and have been adjusting our plan. But equally, I want to point out that I'm very pleased with the last four months consecutive share gain that in such markets we are gaining. which is proving that our quickly adjusted and adapted plans are really in tune with the market situation and development. So this leads me to say that we are used to operate in these kind of situations and all the levers and drivers within revenue growth management really help us to adjust to this whatever consumer situation we are seeing across the market.

Great. That's great. And then my follow-up is just on COGS. Obviously, you've lowered the COGS per unit case outlook for 2024, but any early thoughts on the outlook for 2025? Clearly, there have been some movements recently on sugar and energy prices and gas. So, yeah, any thoughts on the outlook for 2025 from here?

Yeah. Well, first of all, just to close 2024, yes, we have updated our guidance to a low single-digit Of course, that's based on our confidence since we're coming with a very high coverage position in terms of hedges. We're about 100% for the year. So that helps a little bit of predictability. And also I would like to remind us all that in the first half of the year, we could also benefit from a foreign currency translation on the reported COX per case, right, due to the weaker currencies in the emerging markets. So we look at the full year basis, then we are going back to a low single digits. Now, for 2025, obviously, it's too early to provide the guidance. We will be doing that during our four-year results in February. What we can comment right now is that we still expect a certain level of coax inflation. I mean, lower than obviously the previous year, but still there is there. We have already engaged with our hedging positions, and we can say that today we are At a higher covered position, as we were on the same period last year, especially when it comes to sugar, we are over 60% covered when it comes to sugar. Yes, we have seen some reduction of the sugar prices this year. We expect that there, but still, as I said, we would see an inflationary pressure on COX per case.

Great. Thank you very much.

Thank you. Our next question comes from the line of Mandip Sangha, please ask your question, Mandip.

Hi, good morning, Zoran and Anastasios. Thank you very much for the questions. I just want to maybe dive a bit deeper in a couple of your markets. Maybe if we start with Nigeria. Obviously, it's been over a year since we had the first FX depreciation and nearly a year since we had the second one at the start of the year. Now that FX is somewhat stable, How are you thinking about the outlook for early next year and as FX is stabilized, have you seen any changes of the competitive environment as maybe pricing has been passed on and the competitive dynamics have changed? My second question really is just around Egypt. I think as we come into the fourth quarter, we begin to lap the early impacts of the boycotts that started this time last year. How should we think about those developments into Q4, but obviously again into early next year, and how are you seeing maybe the intensity of the boycott impact in the market today versus sort of earlier in the year as well? Thank you very much.

Thank you, Mandeep. So with Nigeria, first, I really want to call out how I'm really pleased with the fact that with a with a pretty high price mix that we are driving in the market for obvious reasons of the inflation as well as the valuation, we are also delivering and generating very good volume growth. And I think that really comes as a result of very well thought through actions based on insight and very strong capabilities that we have this in market, which we have building over the last several years. Also what supports the growth and performance over there in the competitive landscape is also marketing plans that are done in partnership with Coca-Cola company as well as Monster Energy team. So we have all the levers there and that has resulted that for quite some time we are continuously gaining share. So coming specifically to your question, we don't see that anything dramatic or different has happened in the last three months and we don't foresee anything different happening. We are very alert to monitor and see the competitive situation. Also, what can happen in Nigeria and that same goes for Egypt is that sometimes a certain competitor may have a leg in their own pricing that they do, which we are closely monitoring not to be outside of the market. But that's part of our RGM approach. So that's the only thing I would call out is the whole pacing and the rhythm that happens between the players in the market. And we are very mindful of that. So for Nigeria going forward, we always said that this is a double-digit growth revenue market, which will come as a result of all levers and price and volume and mix. And we don't see any reason why Nigeria next year also wouldn't be a growth year. Moving on to Egypt, it's a more challenging situation simply because of macroeconomic environment that this country has been going through with inflation and devaluation. So that has impacted consumer, but also the whole geopolitics of the neighborhood resulting in the boycott. The case for us, as well as for other international Western brands is that it impacts the most known brand. So Coca-Cola. brand is most affected. But this is now the beauty of intentionally increasing portfolio. We do see that other parts of the portfolio are affected to a lesser extent or are not affected. So that helps us to manage the business. One good example of not affected part of the portfolio is the energy category. which we started two years ago with two brands of Monster and Fury, which are performing above our expectations. So it's a portfolio management while continuously developing our capabilities in the market. We've seen in Q3, just to answer your question, we've seen continued boycott because the situation on the ground in the neighborhood has not been reducing or calming down. And in our plan, we are factoring in that this boycott situation will stay for some time, unfortunately. However, we are working extremely close with our customers, with all the partners, suppliers. We are really a local business in Egypt with thousands of people that we employ. Customers, as far as I said, uh and we are building a business not for the next year but for many years to come for us it's not a 100 meter run but it's a marathon and we are really preparing this car for a for a good and long ride thank you very much thank you our next question comes from the line of charlie hicks please ask your question charlie

Good morning, Zoran, Anastasios, Joe and Joe, thank you very much for all the help over the years. I've got two questions, please. One on channel dynamics and then one on Italy. So are you able to give any more colour on how the at home channel and the away from home channel performed in Q3? And if you saw any significant differences in how consumers were spending in Q3 versus in the first half of the year, please. That's my first question.

Hi, good morning, Charlie. Look, I'm very happy that actually dynamic between channels at home and out of home has been pretty good. Both channels have been positive across all three segments. And I'm particularly pleased for the out of home. As you know, this is a very special segment has a very special focus in our plan and our, I believe, competitive advantage. So the fact that also there, but also in at home, we have managed to have a growing situation is because of all the plans that I mentioned in my earlier response of how quickly we are adapting to with customers to our promo plans, types of initiatives that we have an execution in the market. So that's on that part. What was the second part, John?

Thanks, Ryan. Yeah, the second was Italy. I think volume's down low single digit, but cycling a very soft comparative last year. I appreciate there's some bad weather in Q3 and portfolio trimming, but kind of longer term, I remember the CMD spoke about sparkling being a big driver of growth. Do you just see this as a near-term headwind and then Hopefully next year we get back to a more normal year in Italy. Thanks.

Yeah, look, I think that first of all, with the mood and the conviction and belief that we have about Italy that you could see at our capital market today, it's no different. There is a fantastic market where we have been For the last four or five years, growing every year with a double-digit revenue growth. And we see abundance of opportunities. Now, also the fact is that last few years have been unusual overall and equally in Italy, where because of the macroeconomic situations, consumer habits have been also challenged and they have evolved. And for that reason, we have been also adjusting our plans. Because over the last two or three years, we said intentionally, we have prioritized price mix, which we found extremely important. And from this base that we have done over these two or three years, we are now going into evolved game plan where we are in a different manner balancing volume and price mix, meaning that we are putting more emphasis on driving volume and addressing the affordability in the market with a whole range of initiatives that we have there at play, whether with evolution of the multipacks or single-serve, single-bottle promotions, types of promotions that we have So the fact that at the moment we do not have volume growth is not worrying sign because simply reading what we have done, but also what the whole market done, we can understand that there has been a temporary impact on the consumer, but all these has been factored in in our year to go plans as well as for the next year. So I remain confident that our revenue generation is going to continue in a strong and higher than the group average way. Thank you.

Thank you. Our next question comes from the line of Oliver Nicolai. Please ask your question, Oliver.

Hi, good morning, Johanna. Two questions, please. First of all, could you comment on the regulatory environment into next year, such as the plain sugar tax, I think, in Italy and Slovakia, or the various DRS schemes which are going to be put in place in a few countries? And secondly, a bit of a boring question, I'm afraid, but you have a cumulative three-year inflation in Nigeria and Egypt, which is above 100% now. Should we expect an IAS 29 classification in those markets for next year? and what kind of impact it will have on the P&L and balance sheet. Thank you.

Hi, Olivier. I'll start with the first one, and then I hand over to Anastasios. So on the regulatory front, as you know, sugar tax in Italy has been postponed again until July 1st, 2025. And then, well, let's see if we get closer to the date of what happened. And then we know that next year we have a couple of other DRS coming on stream, I think Poland, Greece. And I would just say that our experience in situations when there is introduction of the sugar tax or excise tax or DRS, firstly, we have the clear method and approach. how we prepare for that. Every single country that has gone through that so far, Ireland several years ago, Poland, Romania now, Hungary, Ireland again this year with DRS, proves that when we approach this with necessary and required discipline and preparation of our plan, we know that then we execute really well. And we know that every such introduction results in a temporary one-year slowdown for us as well as for the whole market. And we also see that in every such case, we are coming out stronger than before. And in every such case, we have been gaining share, which is a result of a very well thought through plan that we do. it goes without saying that any such sugar tax or excise tax is passed on in our pricing, but that price, how we do that pricing is not one size fits all. It really is tailored and it's visible for every single market. So we know that regulatory framework is something that's kind of becoming a new norm, but we are addressing that very well in advance, and I can say that for all these upcoming new situations, we have already well-designed and prepared plans.

Yeah, good morning, Olivier. So indeed, we are very mindful of the inflation situation in Egypt and Nigeria, and the possibility of that becoming as hyperinflation markets. Now, for 2024, we know that I think yesterday EY came out with a report that both Egypt and Nigeria do not meet the criteria to be characterized as hyperinflationary markets for this year. However, yes, there is this possibility for 2025, and we are currently working with our auditors and preparing if that's the case, how will this impact our alternative performance measures, and how will be... impacting our reporting going forward. So, we will be able to share more once we have more visibility on this. And certainly, when we'll be providing our 2025 guidance, if that's part of the case, we will be adjusting accordingly.

Thank you very much.

Thank you. Our next question comes from the line of Philip Spain. Please ask your question, Philip.

Hi. Good morning, everyone. Thank you very much for taking my question. I just had one follow-up, please. Just on the markets where you mentioned you're seeing some consumer-sensitive pricing like Italy and Switzerland, and you talked about adjusting your plans there. Could you just give more details on what that looks like? Is it just adjusting around kind of fax mix and promo, or are you also seeing some price cuts in those markets, and what you're seeing maybe competitors do in response as well? And also... Just actually so I relate to that. If you're seeing any pressure from retailers on the price as well, or if it's just in response to how consumers have been reacting. Thank you.

Yeah, thank you.

So look, it's a whole variety. It's a whole variety of things that we are deploying. For example, as I said, in Italy, we launched a single 330 ml can sales. And then we also starting out flash promo or single 600 ml pack that we have there. Then for example, you have a, we downsized what used to be two times 175 promo for down to two times one and a half liter. So for example, in Italy, those are some examples that then also we do not do any price cuts in terms of the price rollback. However, how we address that is through promo mechanisms and intensity of the promotions, which also in Italy is not the same across the country because there is a different dynamic in South versus North. And we are able to capture those insights as we are constantly checking all the data on penetration, on frequency, we follow volume per trip and also this is the type of work that we are doing together with retailers and because of such relationship you know that's why all the conversations that we have have not caused any stoppage or blockage in italy or any other or any other country because together with them, we continuously adjust. I would also like to give you one fact that from 2021 up until this year, cumulatively in Italy, we are a number one FMCG company creating the biggest impact. So that's also one good result.

of the way how we work retailers and and variety of plans that we deploy thanks very much thank you we have come to the end of the question and answer session thank you all very much for your questions i'll now turn the conference back for closing comments well thank you the operator and uh

I would like to thank everyone for taking the part in today's call and giving us all the questions. And we look forward to catching up with you again soon. So wish you all a very good day. Bye-bye.