AB InBev

Q1 2023 Earnings Conference Call


spk02: the near-term target, and is there any potential desire to move towards mid-single A ratings over time, given that that could lift you to Tier 1 commercial paper access? Thank you.
spk13: Hello. Good morning, Bria. Thanks for your question.
spk10: The best way to frame it is to go back to our resource allocation priorities. The objective at the end of the day is to maximize value creation. we always invest behind the organic growth of our business, and with the remaining cash, we balance the leveraging, shareholder payout, and selective M&A. When you think about the leveraging, we said a few times that we maximize the value of our business at two times, but 90% of these benefits we will be capturing around three times. So our goal is to do the right thing for the business, And by doing the right things for the business, the rating will be a consequence. In a nutshell, for the time, we still see a meaningful amount of value on the leveraging. We increased the dividend last quarter, but in the grand scheme of things, most of the cash is still going towards the leveraging. But as we start moving closer to three times, as we start passing three times, moving closer to two times, more and more we can have other priorities. But always with the mindset of doing the right thing for the business and rating will be a consequence.
spk02: Great. Thank you. And just as a follow-up, you highlighted that you have only about $3 billion of maturities coming due through 2025. So as you think about further debt reduction, Would you prioritize looking at those or maximizing deleveraging by perhaps looking further out the curve, given some of those bonds are still trading below par? Thank you.
spk10: It changes a lot depending on the interest rate environment. And whenever we are in a position to start redeeming more debt, we always look at different trade-offs. If you recall correctly, in early 2020, given all the circumstances, we focus a lot on the short-term and because interest rates were low, it made more sense for it to redeem short-term debt. As we see interest rates rising, it made more sense for us to redeem long-term debt because it was much more attractive. And we are in a position, given all the risk management initiatives that we did in 2020, that we don't have any near-term maturity. So we can really make sure that we focus on whatever is maximizing value because the risk profile is in a very good place.
spk02: Great. Thank you so much.
spk13: Thank you, Pierre.
spk03: Thank you. Our next question will be coming from the line of Rob Ottenstein with Evercore ISI. Please proceed with your question.
spk00: Great. Thank you very much. So, Michelle, as you clarified in your comments, In terms of Bud Light, this is all about one can, one social media post, one influencer. And yet somehow it's just become something a whole lot bigger than that. There continues to be a lot of misinformation out there, a lot of confusion. Can you offer any thoughts, reflections on how this happened? what you've learned, and now that we're here, what are you going to do about it? Thank you.
spk11: Morning, Robert, and thanks for the question. So I think that to start with, we need to understand the current environment and especially social media landscape and how consumer brands, especially big brands with significant reach, can be pulled into a discussion like this one. And we know that ours but light is certainly not the first brand that was pulled in a situation like that. And as I said, while beer will always be at the table when important topics are debated, the beer itself should not be the focus of the debate. And to me, this is the key learning. So moving forward, I agree with you. One challenge is what you call the misinformation and confusion that still exists. We will need to continue to clarify the fact that this was one camp, one influencer, one post, and not a campaign, and repeat this message for some time. But as we do that, we are more focused on leveraging our global experience and mobilizing our global resources to support the U.S. team as we move forward. We have adjusted and streamlined our marketing structure so the most senior marketeers are more closely connected to every aspect of our brands. In addition, we are supporting our frontline teams. We are investing behind Bud Light, tripling our need investment for the summer and we are investing more together with our wholesalers in our local markets. Just getting light last week, Bud Light was on the stage at the NFL Draft. We released a new TV commercial that continues our campaign, the current campaign, Easy to Drink, Easy to Enjoy. We had a strong presence in the Stagecoach Country Music Festival in California, and there is much more to come. And as I said, it's too early to have a full view on the impact. But I know that we have the people, the partners, to learn from that, to continue to move forward, and to come out stronger.
spk13: Very clear. Thank you.
spk03: Thank you. Our next question is coming from the line of Mitch Collette with Deutsche Bank. Please proceed with your question.
spk01: Thank you. I've got two questions, please. The first is, given the strong start to the year from an organic EBITDA perspective, can you give some color on why you didn't raise or refine the F23 guidance? And in particular, I'd be interested in the puts and takes from a volume pricing, COGS, and SG&A perspective as we pass through the quarters. And then secondly, Columbia has been a really strong performer for a couple of years now, but it seems to have hit some challenges in Q1. Do you expect to be able to take enough price to offset input cost pressures in Columbia? And do you think the consumer is in the right place to accept it? Thank you.
spk10: Thanks, Mitch. Fernando here. Let me take the first question. In terms of guidance, I always refer back to the reason why we started giving guidance. We give guidance our medium-term outlook at the end of 2021 because we are moving from an inorganic strategy to an organic strategy. And when we look at the medium-term, that's the growth that our business can sustain in a can sustain and can deliver. With that in mind, every quarter is going to be different. There are going to be better quarters, worse quarters, and there will be puts and takes, different regions of the world performing different ways. With regard to this year specifically, we just had the first quarter. It's too early. We had a good quarter. and uh and of course there are always puts and takes that's why for the moment that we are maintaining because the main objective the guidance is to give certain of the medium term potential performance of the business in terms of commodities the question that you asked we we said about 2023 that we would have some commodity pressures of course to a lesser extent than 2022 we have most of our commodities hedged, but there is always a portion of your cost of goods sold that is not hedged. A good example is cost of freight. And to some extent, this is moving in our favor, this is moving in favor, it's somewhat helping. You also have the different geographies components. We said before that you have some regions like Brazil, where the cost of goods sold should be in a better place. you could actually see the Brazilian operation having gross margin expansion already this quarter. And this is their commodity scenario. On the other hand, you have regions like Europe, which is still somewhat under pressure on the commodity front. And you continue to be for this year, because energy prices, although they are improving, they are still very high compared to previous levels. So a lot of puts and takes. We just had the first quarter. We continue to be confident on the business. but I think it's too early for us to talk about changing the guidance, the outlook one way or another. And the second question I will pass to Michel.
spk11: Good morning. Thanks for the question. I think that when we talk about Colombia, if you allow me just to step back for a second, I think that we need to look at this developing markets and how inflation, cost of goods sold, and consumer purchase power is playing a different role in each of these countries and the fact that as I said before and I keep repeating we've been balancing our revenue management strategy aligned with category consumer purchase power and the inflation and cost of goods sold so Colombia is coming from a very good performance for the industry the last year was a great year for the industry and And this year, in quarter one, we saw volumes declining by low single digits. And we had good share. Beer is gaining share of throat. What we saw in the industry overall was an impact from a softer macroeconomic. We need to remember that Colombia imports a lot of goods, and you have two impacts there. One is the inflation itself. The other one is effects. The country is moving, so you see that salaries already moving up as well, and the demand for our brands remain strong. We grew well gaining share of total alcohol. Our core brands performing well. premium brands performing well as well. And under this macro background, we need to keep watching how the industry will behave while we continue to invest in our brands and they have good underlying demand. So the business is great. The macro environment was a little bit soft, but we continue to watch this across the globe very carefully as we continue to push forward on our both category strategy, but also revenue management strategy. Thanks for the question.
spk13: Thank you.
spk03: Thank you. Our next question is coming from Trevor Sterling with Bernstein. Please proceed with your question.
spk08: Hi, Michelle. Just one question from me and following up. Thank you very much for your perspectives on the Bud Light feeding frenzy. We're looking, I suppose, trying to judge things based on the scanner data, which is one channel and several weeks in advance. I know you have more closer to real-time data across many channels. Is there any sign that the pressure is starting to ease or it's still way too early to say?
spk13: Hey, Trevor. Morning.
spk11: I think that's still too early for us to understand the duration and the total impact. We look at the same public data that you look and we see the data. There's a lot of information on there. week basis, but we also see day after day. We can see on the days that there is some stabilization, and this Bud Light volume in the first three weeks, as I said, they would account for like 1% of our global volume in this period. Because there is still a lot of confusion there and misinformation, as I was telling Robert, So we need to continue to clarify this information as we move forward. We need to continue to invest as we have done last week. And together with our wholesalers, continue to drive both the business forward, the focus on beer, which is what we do best, and make sure that the right information is clarified to everybody. Because when we do beer, our brands perform well.
spk13: Thank you, Michelle. Thank you.
spk03: Thank you. Our next question is coming from the line of guest sent with BNP. Please proceed with your question.
spk13: Can you hear me? Yes. Hello? Hello. Yes, we can hear you.
spk14: Hi. Hi. Great. Fantastic. Two questions, the first of which, Would the 4% to 8% like-for-like EBITDA guidance still hold if Argentina was to be excluded? That's the first one. And the second one is you've talked a lot about Bud Light, but has there been any sort of spillover impact beyond Bud Light? And also, what are you doing to ensure that the marketeers don't sort of enter a state of paralysis and become very fearful of sort of embracing any creativity. Thank you.
spk10: Hi, Jeff. Fernando here. Let me take the first one. I'll go back to the reason why we provided an outlook, and we did that, the medium-term outlook at the end of 2021. What is the potential for our business over the medium term now that we moved from inorganic to an organic strategy? And that includes our whole portfolio. But of course, there is one very important KPI, but there are other KPIs that we should be looking at. From first quarter, for example, from first quarter, we ended up growing more than our outlook. We ended up growing 13.6. But this is the organic front. If you look from an AP standpoint, we grew more. On a nominal basis, we grew more than $270 million. So it's a very strong growth. If you look from an ETF standpoint, we grew like 8.5%. So at the end of the day, this is our full business, and we need to make sure that we manage all the different variables, all the different KPIs, and the goal at the end of the day is to create value, and that's what we are aiming for. So the guidance is for, the outlook is for our full business. And the second question I'll pass to Michel.
spk11: Yes, Jeff, good morning. Thanks for the question. I think that similarly to what we just discussed on the Bud Light volume, The publicly available data shows some spillover effect across the other brands, while the majority of the impact is still on Bud Light. And this is happening, I think, on the same direction, given the information that's out there, the confusion and the noise. And, of course, more localized on Bud Light, and we continue to drive our programs forward for all brands. And I think that one of the key points that I was highlighting before is that we continue to be committed to the programs, partnerships, investments that we have in place. Our key programs and campaigns for the brands, they remain in place. And one key thing in the U.S. was quickly adjust and streamline our structure. So in this situation and given the current environment, especially for the social media landscape, that we have senior marketeers running the programs. We have a strong plan for the year. The brands are performing very well in the quarter one. The programs we know they impact correct consumers and they move the brands in the right direction. And I think that as we do what beer needs to do, focus on sports, focus on music, focus on connecting with our consumers, our brands perform well. This we know, right? So we'll continue to invest. We are having up investments now during the summer across all brands as original part of our plans, but also we are having up the investments on Bud Light as we reallocate global resources and invest more on Bud Light. So I think that we feel good about the plans that we have moving forward and while it's still too early to understand, again, all the numbers and the duration of this impact, we need to keep moving the business forward. And as CEO, I think that my role is to really get the learnings, mobilize resources, support the team, and work together with our partners as we move forward.
spk12: Thank you.
spk03: Thank you. Our next question is coming from Lawrence Wyatt with Barclays. Please proceed with your question. Hi.
spk06: I'm Michelle Fernando. Thanks very much for the questions. Two from me, please. Firstly, on margins, they've come a lot better this quarter than perhaps the street was expecting. Previously, you said that Q1 was probably going to be the toughest quarter for COGS. Do you see the COGS environment getting a little bit easier from here? And how would you split the impact from COGS from both commodities and transactional FX? And then the second question on China, could you give us any more color on the exit rate or sort of March number? I think you previously mentioned that Bud APAC was up around 20% in February. Can we assume that March was significantly stronger than that? Thank you.
spk10: uh hi laurence fernando here let me take the first one on margins uh definitely we talked a lot about cogs and a lot of talk about cogs is two stands uh cogs probably we still have some pressures this year probably the pressure is a little bit higher on the first half of the year a little bit smaller on the second half of the year of course there are some some portions that you cannot hedge animation a while ago, freight, and this is something that came in our favor. Every market is different. If you say about transactional effects, it's better in Brazil than it was here before, and you are seeing that reflecting to the Brazilian beer margins already, the gross profit already being positive, increasing year-on-year. It's a little bit more of a pressure when you think about Europe. So every market is different. But you have to bear in mind that EBITDA margin is not only about cost of goods sold, it's the main driver of our last year's cost of goods sold, but you also have overhead, and overhead was an important component, and of course overhead you have seasonality, so it's going to be slightly different quarter on quarter. We're still maintaining our outlook where revenues are growing ahead of costs, and continue to manage, and any opportunity to improve, any opportunity to better, we continue to leverage on that. Probably a number that you should continue to look is how commodities and effects evolve. For 2023, it's more or less set. A few open items like freight, but more or less set. And for 2024, at least too early to say, but we are not seeing any major swings in commodities up like we've seen the last couple of years. And if that's the case, that should be positive news also going forward. But it's too early to have a final view on that.
spk11: Yes, in China, I think that the way that we see the quarter one is like a transition quarter. You remember all the restrictions being lifted at the end of last year. There was an earlier Chinese New Year, so January was a little bit dislocated, and therefore we see continued recover that accelerated throughout the quarter. If you look at some of the leading indicators, let me share one, for example, their own trade, nightlife, Chinese restaurants reopening. Beginning of the year, January, they were around like 70, 75%. And as you look at this same indicator in March, we were pretty much like close to 100% of the POCs operating with normalized operating environment, in-store traffic, And that happened from middle February towards March. We, of course, we put our plans in place. We are getting our fair share in premium and super premium. And as the channels reopen, the long-term trends of premiumization, they continue to impact the industry and our business in China, which benefits from that. So we have strong innovation. And we see that the industry is recovering. The premium opportunity continues to be huge in China. And we have this proportion of a symmetric market share in this segment. And as the channel reopens, this is a tailwind for the business. The prospects for the long term do not change. We think that in the short term, there is this good opportunity. And the industry so far is performing well.
spk13: Understood. Thank you very much. Thank you.
spk03: Thank you. The next question is coming from the line of Edward Monday with Jefferies. Please proceed with your question.
spk05: Morning, guys. Thanks for taking the question. I'm sorry to come back to Bud Light, but I've got, I just want to pick up on some of your opening comments, Michelle, around having the experience, the resources, and the partners to manage through. If we take experience, could you talk about some of the prior experience ABI has of brand turnarounds of this nature? Stella Artois for many decades in the UK had a pretty bad name and those previous negative associations have been eliminated. What are the two or three things you've got to get right as you think about taking things forward from here? And then on resource, you mentioned you're going to mobilize global resource to support the US team. I think Bud Light's about a 5 billion revenue business at supply level. You probably spend 10% on A&P, maybe a fraction of that, maybe half that is media. So call it 250 million. If you're going to triple that, that's about 500 million or worth about 2% to group EBITDA. Are those numbers directionally okay or have I missed something there?
spk13: Hey, Jeff.
spk11: I'll add. Sorry. Hey, Ed. Good morning. I think I got all your topics here and I'll try to cover them. one by one so the first point around experience and how we deal with different situations globally and of course starting from the point that each and every situation is unique in itself and given the current environment especially social media landscape and how brands have been pulled into these situations, that is a big learning from this situation that can help the company also on the other way around globally. But we have faced, as you know, just to think about COVID, from alcohol ban in some countries, and then we had to adapt to this situation, keep a very agile mindset, rethink the way that we go to market and how we organize our operations. In other geographies, in the very big footprint that we have, you remember, for example, the UK for a time was an issue. We had issues before in Korea. We had issues in Brazil and the way that our brands got attacked for some time there. And we redesigned the portfolio rethought the way that we communicate our brands, and we always stay true to what we do best, which is brew high-quality products, make sure that we keep connected with our partners, investing to the long term, and keep reading and learning from consumers and see how we adjust our path forward. We know that easy to drink, easy to enjoy. It's a powerful message for Bud Light. We know that the Bud Light lane is around quality beer, easy to drink, easy to enjoy. It's about sports, that's why we came back strong with the NFL Draft. It's about music, and it's about everyday enjoyment. So when we do that, our brand performs very well. As we mobilize resources, so there is people resources, time, there is knowledge resources, there is partners that we have, and there is money. So our plan for the summer in the U.S. was already a very strong plan, and the triple the media idea is versus what we had last year, and traditionally Bud Light invests very heavily in the shoulder season because of football, NFL. This year we built a plan to be more connected with the summer season because this is very important for mainstream brands, therefore very important for Bud Light. There was already a heavy investment there. And now we are using resources that we have that we are using for other brands and other priorities to further increase the investments that we have in the U.S. And because we have many lines in the P&L, right, not only sales and marketing, we are mobilizing lines across the P&L as well. And media does not make 100% of the sales and marketing investment of any of our brands anywhere globally. So the match is not really like as you triple media, you triple the entire marketing budget. There are other lines. within the sales and marketing package as there are other lines on the P&L that we can work as we always do in a very agile way. And because of that, we reiterated our EBITDA growth. So as we did during COVID, we are scrambling, moving very fast, getting this agile mindset to work as we support and increase the investments in meeting the U.S. We are working the other muscles that we have from the global company, the size and the scale that we have, while the BIDA outlook isn't changing.
spk05: Thank you. If I could just perhaps just follow up. I appreciate you don't run your business on a 4 to 8. That's really a framework for us, essentially, and there's some years ahead, some years below. But I guess, you know, you're facing the choice of either, you know, looking to protect your bottom line in the U.S. or perhaps you could use a windfall from the rest of the group, you know, from a cogs rollover or trying to bounce back to double down in the U.S. Is the message that, look, you're running the business for the long term and you're going to really double down on the U.S. and you can, you know, allocate global resources to really go behind Bud Light? So,
spk11: All markets are important for us. We do not minimize the situation on the US. Fully committed to get our plans and our brands and our portfolio to rebalance the US. And we are investing to make it happen. And this all falls into our outlook. We always have an issue to deal with every quarter, every year, in every geography. and it's very important that at global level we keep this agile mindset to use the resources and definitely urgency creates opportunities as well so as we invest focus mobilize in the us we think that this situation is manageable globally we never minimize any issue with our brands or consumers, but we are confident that we have the team and the resources to continue to invest, to move forward in the U.S., and to support our team there to get out of this stronger.
spk13: Thanks, Michel.
spk03: Thank you. Our next question is coming from the line of Sanjit Arlov with Credit Suisse. Please proceed with your question.
spk09: Hey, Michelle and Fernando. Two from me, please. Firstly, I appreciate your earlier comments on Colombia, but if I look at some of your major emerging markets more broadly, volume seems to have deteriorated as pricing has picked up. I'd love to get your thoughts on any inflections you're seeing in consumer behavior, particularly with regards to frequency of consumption, pack formats, et cetera. And then my follow-up is really around Brazil. One of your competitors there recently filed for bankruptcy. I think you called out stable market share in the quarter, but I'd love to get your perspective on how you see the competitive landscape evolving in Brazil in recent weeks and months. Thank you.
spk13: Sanjit, good morning.
spk11: Thanks for the question. Two pieces there. I'll try to address both to you. The first one, I think that there is this inflationary scenario, which is common across the globe. And we see that, as I've been saying, different clusters, three types of clusters, where we see the industry and the whole consumer purchase power and consumer goods moving is slightly different and they all dealing with the same issue. The key point there is we see the beer category continues to be resilient and performing well and gaining share of growth. I just gave the example of Colombia. Of course, when we talk about resilience, doesn't mean growth across the board and all the markets at the same time, especially because when inflation moves fast, you have this timing in which salaries, especially minimum salaries for these developing countries, they get to be approved. So think about uh brazil that just announced the salary increases now in may right so january to april consumers were dealing with high inflation and they had their salaries from last year industry performed well but now you have an extra injection of cash and purchase power coming to consumers. So when inflation goes up, there is some time for prices to catch up, and there is some time for salaries to catch up. I think that we need to look through all the lenses of the full year before drawing too many conclusions. And amongst the markets, they have different realities. To use the same example, why you see current devaluation in Colombia. And Colombia has high percentage of goods that they import, Brazil is in the other side of that because currencies that are appreciating and therefore they import goods will have like a different impact on the basket for inflation as well as for consumer purchase power. So I think that we keep an eye on that, an eye on our revenue management and The industry is performing well in most of the countries, especially when we look in the context of the other beverages. We know that premiumization is in place, that beer is more resilient, and we are happy so far with our strategy in terms of revenue management. And this is coming. On the other point, on Brazil, what I say is that I see three things in Brazil that are very interesting and very important. I see the industry structure in Brazil, health one, so players focus on premiumization. We see an environment in terms of inflation price that's playing well for the industry. We see that Brazil was hit earlier than other markets on the cost effects. and now you're getting to the other side of this equation where cost of goods sold is becoming more normalized and in fact is playing more in our direction. You see the company, our portfolio today in Brazil is as healthy as never before. So Spaten is performing very well. Original, which is a premium brand of ours, performing very well. Our core brands performing very well. Corona, we had a limitation in terms of supply that we are organized to have more volume. And as we supply, the brand sells by itself. So very healthy brand in Brazil, growing a lot. And our digital transformation continues to accelerate. not only the pace in which we gather more consumers into that delivery, but our capabilities with this and the algorithms, artificial intelligence, helping us to harness the data and to elevate the potential of what we have there. And this is a competitive advantage that we built. and is helping us in driving the business forward. So I'm optimistic with Brazil. I think that the team there is doing a great job. Our market share is in good position. Our revenue strategy is well organized in place. Our portfolio is very healthy and our digital transformation is accelerating our opportunities and potential in Brazil. So I see Brazil in a place that's as good as it has been for many, many years.
spk09: Thanks, Michelle. And just one quick follow-up on that. Has there been any noticeable change in the competitive landscape since one of your competitors filed for bankruptcy there in recent weeks?
spk11: Not meaningful for us to talk about here. And I think that while they deal there with their situation, Our focus is on our consumers. Our focus is improving our service level that's very high in Brazil now and getting our portfolio to perform the portfolio of the physical brands that we have and the digital assets. So we remain a stead focus on our strategy.
spk09: Great. Thank you.
spk03: Thank you. Our final question is coming from the line of Brett Cooper with Consumer Edge. Please proceed with your question.
spk07: Thank you. So I want to come back to, I guess, the first question, but more from an operational standpoint. After the SAB deal, you guys have been relatively inactive on acquisitions. At the same time, the beverage and alcohol markets have changed and are evolving. So can you continue to maximize the growth potential of your business via organic activity? Or are acquisitions in higher growth parts of the industry necessary to maximize that growth in returns?
spk10: Hi, Brett. Fernando here. At the end of the day, this is a resource allocation discussion and about the value creation discussion. If you look at our business, when we did the investor day, We said that the outlook for the business is to be able to deliver 4% to 8%. And if we deliver that, there is a minimum amount of value to be created. We can enhance this value creation by making resource allocation decisions. And that's the triangle. So it means that the priorities to invest behind our business, because we believe it can grow, can grow at a decent pace, and can create a lot of value. With the excess cash, and our business generates a meaningful amount of excess cash, how we use that excess cash can also create value on a standalone basis. Over the last two or three years, there was a strong focus on the leveraging because, as we said, the leveraging creates a meaningful amount of value. Most of that didn't get to us three times. We made meaningful progress. But we are not at three times yet, which means that we can still benefit from value creation by the leverage a little bit further. But as we keep making progress, other options open up for us. Other options, like we increased dividend slightly. As a percentage, it was a meaningful increase. In absolute basis, it was not that much of an increase. But increased dividends, we are improving on that. And M&A is definitely an option as well. We can have selective M&A. We know how to do M&A. We did M&A in the past. We know how to create value out of M&A. So if the right deal at the right moment shows up, of course we'll entertain that if it can bring another avenue of growth. But we don't need M&A to deliver a meaningful value creation and to continue growth.
spk07: And if I can bother you with one follow-up. One component of your business is different than it was when you've done M&A in the past. is all the digital infrastructure that you've built. So how do you think that extracts value from transactions or creates or, I guess, improves your ability to create value from organic activity? And does that weight your view one way or the other over the medium to long term?
spk11: Yeah, I can take this one. I think that in a short answer, these digital products that we created both on the B2B side and on the B2C side, they help us to get better and they are the second pillar of our strategy. They get us better because we have more information. With more information, we can make better decisions and as we standardize our ways of operating with these products, we have efficiencies that we can extract from this scale, from these revised processes, and our ability to act faster with the data that we have. A second part of that, as I keep saying, another advantage of the digital products is that once you build them, the scalability is very fast and you don't need more resources. So different from the physical products, If you grow Corona, the example that I just gave here in Brazil, we need more bottles, more production capacity, we need to invest in physical assets so we can grow our physical brands, which we are doing. On the digital space, the scalability, once the product is ready and available, is much faster. and the resources that you need to invest for the scalability are much smaller in proportion to the physical products. So, we can continue to grow and we are doing that. For example, with beef, we are getting to geographies where we do not operate. We are getting there with the digital product by using partners. And then you can continue to monetize the digital product even if you are not present in the market. But then now that we are becoming present in that market, so you might have opportunities to go to market differently than what we had before. So you are right in the intuition that the digital products are add-on to our M&A toolkit, but they can also become an important vehicle as we grow organically, including geographies that we are not present today. because the digital road to market becomes an enabler for our expansion strategy.
spk13: Thank you. Great. Thank you.
spk03: Thank you. This was our final question. If your question has not been answered, please feel free to contact the investor relations team. I will now turn the floor back over to Mr. Michel Dukaris for closing remarks.
spk11: Thank you, Jesse, and thank you all for your time today and for your ongoing partnership and support for our business. Stay safe and well.
spk03: Ladies and gentlemen, thank you. This does conclude our earnings conference call and webcast. Please disconnect your lines at this time and have a wonderful day.

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