Anheuser-Busch InBev SA/NV Q4 FY2024 Earnings Call

Welcome to AB InBev's Full Year 2024 Earnings Conference Call and Webcast. Hosting the call today from AB InBev are Mr. Michel Doukeris, Chief Executive Officer; and Mr. Fernando Tennenbaum, Chief Financial Officer. To access the slides accompanying today's call, please visit AB InBev's website at www.ab-inbev.com and click on the Investors tab and the Reports and Results Center page. Today's webcast will be available for on-demand playback later today. Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. It is possible that AB InBev's actual results and financial condition may differ possibly materially from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect AB InBev's future results, see risk factors in the company's latest annual report on Form 20-F filed with the Securities and Exchange Commission on the 11th of March 2024. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information. It is now my pleasure to turn the floor over to Mr. Michel Doukeris. Sir, you may begin.

Thank you, and welcome, everyone, to our full year 2024 earnings call. It is a great pleasure to be speaking with you all today. Today, Fernando and I will take you through our operating highlights for the year and provide you with an update on the progress we have made in executing our strategic priorities. After that, we'll be happy to answer your questions. Let's start with the key highlights for the year. We made consistent progress across the three pillars of our strategy in 2024. Our global momentum continued delivering all-time high U.S. dollar revenues with growth in 75% of our markets. Our business in the U.S. is building momentum. Our portfolio is reaching an inflection point, and we are increasing investments in our brands to fuel growth. The BEES marketplace continued to accelerate and delivered $2.5 billion in GMV this year, a 57% increase versus last year. EBITDA grew at the top end of our outlook for the year, reaching nearly $21 billion with margin expansion across all five of our operating regions. The ongoing optimization of our business drove a 15% increase in the underlying U.S. dollar EPS as well as a step change in our free cash flow generation, which increased by $2.5 billion versus last year. We also delivered an important milestone in our deleveraging journey with our net debt-to-EBITDA ratio reaching 2.89x, below 3x for the first time since 2015. With this progress, we have increased flexibility in our capital allocation choices. The Board has proposed a full year dividend of EUR 1 per share, a 22% increase versus last year. Now turning to our operating performance. Total revenue grew by 2.7% this year with our revenue management choices and ongoing premiumization driving revenue per hectoliter growth of 4.3%. EBITDA increased by 10.1% in the fourth quarter and by 8.2% in the full year, increasing by $1 billion versus 2023. Our overall volume performance in 2024 was, however, constrained by the unusually soft consumer environment in both China and Argentina, which drove a total volume decline of 1.4%. While the performance in these two markets this year does not reflect our full potential, we remain confident in the long-term growth opportunity and are investing to rebuild momentum. Outside of these two countries, the Beer category globally remains vibrant, and we are winning with consumers across our footprint. Volumes grew in the majority of our markets. We estimate we gained or maintained market share in two-thirds of them, and our volumes increased by 0.9% in all other markets. Turning to our top line performance. Our revenues reached a new all-time high of $59.8 billion with organic growth more than offsetting translational FX headwinds. Net revenue per hectoliter growth improved sequentially throughout the year. Our financial performance was broad-based with revenue increase in 75% of our markets and EBITDA growth in four of our five operating regions. Now I'll take a few minutes to walk you through the operational highlights for the year from our key regions, starting with North America. In the U.S., our business is building momentum. Our portfolio is reaching an inflection point, and we are increasing investments in our brands to fuel growth. Our STR volumes grew in the fourth quarter, and we gained volume share in the industry, driven by Michelob Ultra and Busch Light, which were the top two volume share gainers in the industry. The beer industry overall remained resilient in 2024, improving in both volume and revenue trends sequentially since the second quarter and gained share of total alcohol by volume. Now moving to Middle Americas. In Mexico, our momentum continued as we gained share of the industry and delivered record high volumes for the year. In Colombia, we delivered record high volumes with our portfolio continuing to gain share of total alcohol. In South America, our business in Brazil delivered total volume growth of 1.5% with double-digit bottom line growth. Our beer portfolio is estimated to have outperformed the industry with market share gains driven by our premium and super premium brands. In Europe, EBITDA increased by mid-teens through a combination of top line growth and continued margin recovery. Our volumes grew slightly, outperforming the industry in five of our six key markets, led by Corona and Stella Artois. In South Africa, our momentum continued with volumes growing by mid-single digits, gaining share of both beer and Beyond Beer. In APAC, in China, the soft consumer environment impacted the overall beer industry and particularly the on-premise channel, which disproportionately impacted our business. We underperformed the industry, and we know our business in China has far more potential than we delivered in 2024. We remain confident in the growth opportunities for beer and continue to invest for the long term. The close of 2024 also marks three years since we introduced our three-pillar strategy and our medium-term growth outlook. I would like to take a few minutes to reflect on the progress we have made in executing our strategy. Let's start with our perspective on the overall Beer category. The category and our brands are a passion point for consumers. We believe beer has a long runway for future volume growth and premiumization across our footprint, supported by favorable demographics, economic growth and significant opportunities to increase category participation. In 2024, according to IWSR, the beer and Beyond Beer category continued to gain share of total alcohol by volume globally and has now gained more than 200 basis points since 2021. Looking ahead, beer is expected to grow volumes globally and continue to gain share of total alcohol. Our diversified geographic footprint and leadership positions across developing, emerging and developed markets have us best positioned to capture this growth. Developing markets represent 55% of our volume, are mostly comprised of countries where we have strong leadership positions, and are expected to account for 34% of the category volume growth over the next five years. This cluster has been a key growth engine for our business over the last three years with record high volumes in key markets such as Brazil, Mexico, Colombia and South Africa and double-digit top and bottom line growth in U.S. dollars. Emerging markets represent only 10% of our volumes but are expected to drive nearly 50% of the category volume growth. We have leadership positions across Africa and lead the fast-growing premium and super premium segments in India. Our volumes across this cluster have grown by 10% over the last three years with significant opportunities to increase category participation as these economies develop. Developed markets represent 24% of our volume, with leadership positions across key markets in Europe, the U.S., Canada and South Korea, and are expected to account for 14% of the category volume growth. In the U.S., our portfolio is at an inflection point. In Europe, our premium and super premium portfolio now make up 57% of our revenue, and EBITDA increased by double digits in 2024. In South Korea, our revenue increased by low teens in 2024 with our market share reaching the highest level in the last ten years. And in China, while 2024 has been a challenging year for both the industry and our business, we remain confident that the long-term premiumization trend in the industry is a compelling profitable growth opportunity. We are the leaders in the premium and super premium segment and are investing in our portfolio, innovation and geographic expansion to regain our momentum. We have evolved our portfolio management approach to focus our investments in our mega brands and drive efficient profitable growth. Our mega brands have increased revenue by nearly 40% since 2021 and now represent 57% of our total business. In 2024, we invested $7.2 billion in sales and marketing and averaged more than $7 billion per year since 2021. Our investments are more effective than ever as we have concentrated behind mega brands and mega platforms and have leveraged data and our digital platforms to drive efficiency. Led by our global brands, we are the leader in the premium beer segment globally and see a long runway for the category to continue to premiumize. The premium beer segment is forecast to grow volumes across all geographic clusters and at more than double the rate of the category overall. Within premium, the Corona brand continues to grow from strength to strength in leading the growth of our portfolio globally. In 2025, we'll be celebrating 100 years since its original launch. Since 2018, the volumes of Corona have nearly doubled, and in 2024, volumes increased by 9.4% in markets outside of Mexico. In its home market of Mexico, Corona is the number one brand in the industry and volumes grew by mid-single digits. The quality, brand power and consumer preference for Corona have earned the right for a premium price point. Corona sells on average at a 20% premium to the nearest competitor. In recognition of this past performance and its future potential, Corona was named the most valuable beer brand in the world in 2024. We continue to focus on innovating to develop the category and expand occasions to meet consumer needs. Our balanced choice portfolio includes options for consumers seeking low carb, low calories, sugar-free, gluten-free and non-alcohol alternatives. Our brands across these consumer trends are growing ahead of the overall beer category and are becoming a meaningful part of our overall business, now representing approximately 10% of our beer revenue. Looking specifically at non-alcohol beer, our portfolio momentum continued to accelerate, led by the triple-digit growth of Corona Cero, and we estimate we gained share globally in 2024. While non-alcohol beer is currently a relatively small portion of our global beer volume, we believe it is a key opportunity to develop new beer consumption occasions, increase category participation and drive incremental volume growth. In addition to beer, we have been developing our portfolio of Beyond Beer brands to meet consumer needs and increase our total addressable market. The strength of our brands and our production and route-to-market capabilities provide us a strong competitive advantage in this segment. In South Africa, Brutal Fruit and Flying Fish are two of the leading flavored malt beverages in the country, which have been expanded across Africa over the last couple of years. In the U.S., Cutwater is the number one canned cocktail brand in the country and NÜTRL is the number two vodka seltzer brand. The combined revenue of our focused spirit-based RTD and flavored malt beverage brands have increased by approximately 20% since 2021, and the category is forecast to grow volumes at double the rate of the overall beer category. Now let's turn to our second strategic pillar, digitize and monetize our ecosystem. In 2024, BEES captured $49 billion in gross merchandising value, a 19% increase versus last year with 124 million orders transacted through the platform. BEES GMV has now more than doubled versus 2021, with our percentage of revenue transacted through digital channels increasing from around 50% to 75%. BEES marketplace continued to accelerate and delivered $2.5 billion in GMV this year, a 57% increase versus last year. And in direct-to-consumer, our digital platforms are enabling a one-to-one connection with our consumers and the development of new consumption occasions. We have expanded the availability of our digital platforms to 21 markets with revenue reaching $560 million. With that, I would like to hand it over to Fernando to discuss the third pillar of our strategy, optimize our business.

Thank you, Michel. Good morning, good afternoon, everyone. For the next few minutes, I want to take you through a few tangible examples of what we mean by optimizing our business and the financial results we are driving. In 2024, we made progress on four key areas of focus: improving margins; compounding U.S. dollar EPS growth; growing our free cash flow; and making disciplined capital allocation choices. Our EBITDA margin improved by 179 basis points this year, with margin expansion across all five of our operating regions. We know that each year will be different, but are confident that the combination of our leadership advantages, disciplined revenue management, continued premiumization and efficient operating model creates an opportunity for further margin expansion over time. Moving on to EPS. This year, we delivered underlying profit growth of $900 million. Underlying EPS was $3.53 per share, a 15.4% increase versus last year and a 7% CAGR since 2021. Organic EBITDA growth accounted for an $0.81 per share increase this year with a $0.26 per share headwind from translational FX. As we continue to optimize our business, improvements in below EBITDA items drove the balance of our EPS growth such as lower net interest expense from active net debt management and continued deleveraging as well as lower cost of hedging and reduced FX losses. Next, let's take a look at free cash flow. Through a combination of revenue growth and margin expansion, reducing our net interest expense through deleveraging, optimizing our net working capital and improving the efficiency of our CapEx through disciplined resource allocation, we increased our free cash flow by $2.5 billion to reach $11.3 billion in 2024. With this increase in cash generation, we continue to make progress on our deleveraging journey and delivered an important milestone for our business. Net debt-to-EBITDA reached 2.89x, below 3x for the first time since 2015. In 2024, we continue to strengthen our debt maturity profile while maintaining our weighted average coupon. Our bond portfolio remains well distributed with no relevant medium-term refinancing needs. We have approximately USD 3 billion worth of bonds maturing through 2026, a weighted average maturity of 13 years and no financial covenants. As we continue to make progress on our deleveraging, we have increased flexibility in our capital allocation choices. The Board has proposed a full year dividend of EUR 1 per share, a 22% increase versus last year, with the ambition to continue a progressive dividend over time. Additionally, we have completed approximately $750 million of our $2 billion share buyback program announced last year. As we look ahead to 2025, we expect EBITDA to grow between 4% and 8% on an organic basis, in line with our medium-term outlook. In terms of phasing of growth in the year, it is worthwhile reminding that due to technical factors such as fewer selling days, the timing of Easter, and shipment phasing comparables in the U.S. and China, the first quarter will have a high comparison base. As we continue to invest to execute our strategy while optimizing our resource allocation, we expect net CapEx to be between $3.5 billion and $4 billion, and we expect our normalized effective tax rate to be between 26% to 28%. With that, I would like to hand it back to Michel for some final comments before we start our Q&A session.

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap on 2024 and look ahead at the opportunities our brands have to activate the category in 2025. Driven by the consistent execution of our strategy, we delivered high-quality financial results in 2024. EBITDA grew at the top end of our outlook. Underlying EPS increased by 15% in U.S. dollars, and our free cash flow grew by $2.5 billion. Our geographic footprint, leadership positions and portfolio of mega brands position us well to capture future category growth. With leverage below 3x, we have increased capital allocation flexibility. While the operating environment has been dynamic over the last few years, we are encouraged by the consistent performance of our business. EBITDA has grown within or above our medium-term growth outlook in every quarter over the last three years, and we are confident in our ability to deliver in 2025. Looking ahead, we are uniquely positioned to activate the category. The combination of our mega brands with the key global platforms that consumers love and that bring people together is a powerful opportunity to lead and grow the category. From the NBA to the FIFA Club World Cup to Wimbledon and music platforms like Tomorrowland and Lollapalooza, we will be focused on connecting with consumers and bringing to life our purpose of creating a future with more cheers. With that, I will hand it back to the operator for the Q&A.

Our first question is coming from Edward Mundy with Jefferies.

Two questions, please. So there's been a huge step change in free cash flow. I was hoping to try and sort of tease out the types of things that you might be able to consider given this increased flexibility that previously might not have been on the table. I think, Michel, you laid out very clearly on Slide 16 and 17 that you've got a best-in-class footprint and strong brand portfolio, so that argues against the need to make major acquisitions. Is this really around getting the balance between deleveraging and accelerating returns to shareholders? That's the first question. And then the second question is on China. You've appointed someone internal with a very strong commercial and supply chain background. Could you help us think about the balance between both investing for growth and optimizing that footprint?

Ed, this is Fernando here. Let me take the first question. The first question is on capital allocation. It's worth reminding that the objective of our capital allocation policy is value creation. The framework is unchanged, and we remain disciplined in our choices. So priority number one has always been investing in the organic growth of our business. We have a very good business with no shortage of opportunities to invest. And if you look from 2021 to 2024, we invested around $55 billion across CapEx and S&M to drive organic growth. With the excess cash that we generate, we need to maximize value creation. We always maintain a dynamic balance between deleveraging, returning capital to shareholders, and selective M&A. If you look at 2024, we invested $7.2 billion in S&M and $3.7 billion in CapEx. When you add all of those, that's almost $11 billion. On the net debt side, we reduced $6.9 billion, so almost $7 billion of net debt reduction. We were able to do all that while announcing a share buyback of $2 billion and also increasing dividend by 22% to EUR 1. With leverage now below 3x, it's fair to say that we have increased flexibility in our capital allocation choices to continue to invest for growth and return capital to our shareholders. On the second question to you, Michel.

Ed, I will just complement here on what Fernando described on the capital allocation. The main priority is organic growth. We believe that based on the scale that we have today, the footprint that we have today, the compounding effect of this organic growth is a massive value creation opportunity. As we execute this strategy and generate cash, reduce leverage, as Fernando said, we gain financial flexibility so we can allocate capital in different ways. So priority number one is organic growth. In China, I think that there is a couple of things to note. First, over the last 2 years, we experienced a very soft consumer environment. We have seen some shifts in channels, and we see geographically the eastern part of China having more difficulties than the western part. We think our business there has much more potential than what we have delivered in the last 2 years. We have a plan in place since the end of last year with increased investments, more focus on our mega brands, huge execution during Chinese New Year, where we saw Budweiser front and center. We have been introducing innovation in the market with Harbin Zero, and we want to increase execution levels to harness the opportunities that we have there and reignite the business for growth. We expect that the comparisons in China will improve as we move through the year. Thanks for the questions.

Michel, Fernando. So a couple for me, please. Can we start on the U.S. and the margin delivery, particularly in Q4? It's clearly a little bit lower, the expansion we saw there than we've seen in the prior couple of quarters. I think, Michel, you referenced the investment we've seen going into the business. I think we've also probably seen higher COGS and some of the aluminum tariffs kicked in. How should we think about the outlook for margins in the U.S. as we head into 2025 and the trade-off perhaps between further productivity savings versus the investment into the business and those ongoing COGS pressures? And then secondly, maybe just a quick one for you, Fernando, around the number of the factors you highlighted as we head into Q1, which will be weighing a little bit on volume performance. Can you share a little bit more detail perhaps on how we should think about the scale of those combined factors on volumes in Q1, please?

Simon, thanks for the question. I will take on the U.S. first. Each quarter, of course, is unique and going to be different. The important thing here is in the U.S., we are gaining momentum. Our portfolio is much healthier and accelerating, reaching an inflection point, I would say, because with the number one and number two share volume brands in the market growing, we start seeing this market share growing every week and month. Margins are recovering, and we continue to work on productivity. But our main priority right now is to invest to ensure that this portfolio continues to accelerate. We are doing this efficiently. We continue to work very hard on our productivity across all lines and generate efficiencies in the business. But we are glad to see the commercial momentum and share momentum our portfolio has in the U.S. now.

Simon, on your question, maybe trying to give some more color here. The first one is that 2024 was a leap year, meaning one extra selling day. If you do a simple extrapolation, that's a 1% impact. The second one is Easter phasing. Easter is going to be three weeks later in 2025, which will shift inventory building from March to April. Last year, we built contingent inventory ahead of labor negotiations; this will have somewhat of an impact. Also, China will have a tough comp on a relative basis because volumes declined 6.2% in the first quarter of '24 and trended more negative throughout the year. So this is to give you a little more context on the higher base in Q1.

Following on from Simon's question, you're talking assertively about investing in the U.S. and behind mega brands, but the ratio of marketing and selling costs as a percentage of sales fell last year. Will it increase in future years? And how is it affected by your increasing digital capabilities? And secondly, can you just say a word about the raw material outlook and COGS? I know you don't guide on it specifically, but there has been quite a lot of concern, particularly around currency depreciation in Latin America and the effect that might have.

James, Michel here. Thanks for the question. We've been discussing this ratio and absolute dollars and the efficiency of the dollars we deploy for quite a while. We look at ratios, but we are not guided by them. As we grow our business and optimize it, we made very important portfolio decisions with the idea of focusing on mega brands. So we've streamlined the portfolio by reducing SKUs and secondary brands, which means putting more weight in fewer brands and getting more pressure on system execution. At the same time, we have significantly elevated our data utilization. Through BEES, we have more data to leverage with our internal agency, allowing us to target better. We can be more agile in organizing our campaigns focusing our resources more effectively to achieve better reach and amplification on our campaigns. The combination of these brands, data, and mega platforms allows us to use the dollars we have much more effectively. The same dollars work harder. Therefore, we measure the ratios, but our main leading KPI is effectiveness. For example, this year during the Super Bowl, we had strong ads integrated very well in our execution, allowing us to gain visibility and engagement during the event. Our market share accelerated both off-premise and on-premise during the Super Bowl week, with Budweiser taking the number one spot.

James, Fernando here. You asked about raw material cost of goods sold. As we mentioned last year, 2025 is looking more like a normal year, in line with inflation. Our hedging policy always hedges 12 months in advance. By doing this, you know that most of the emerging markets’ currencies appreciated throughout the middle of last year, so one could expect easier comparisons in the first half of the year and tougher comparisons in the second half. However, for the full year, on average, the outlook looks to be more in line with what we consider a normal year.

Michel, Fernando, two from me, please. Firstly, coming back to free cash flow and CapEx in particular. Fernando, can you just help us understand where you're seeing CapEx efficiencies? What is maintenance CapEx for the business these days? And secondly, just coming back to China. Michel, you highlighted that you've got a plan in place since the end of last year. Can you just elaborate a little bit more on that? How are you evolving your strategy for the new normal in China?

Sanjeet, Fernando here. As we implement our strategy, we look to optimize all areas of our business with disciplined capital allocation. CapEx is one area where we are making meaningful progress. As we deploy capital for projects, a budget of $3.5 billion to $4 billion is a significant investment to support growth. We are doing this more efficiently with a focus on technology, using AI to reduce labor hours needed for production. We also focus on capacity, using our scale and zero-based budgeting approach to design and procure better. This optimization is not new; it's been ongoing for the last couple of years. We've optimized our CapEx in 2023 and again in 2024 while maintaining growth potential. Looking at the long term, we believe our CapEx outlook supports sustainable growth.

Yes, Sanjeet, it's Michel here. Regarding China, the question you posed on what people refer to as the new normal has been ongoing for about two to three years. My experience in China shows cycles; when it seems to stabilize, things can change quickly. Today, we are seeing geographical shifts, with the eastern part of China having more difficulty than the western part. Last year was challenging, but the beginning of this year looks slightly better. We don't want to define this as the new normal just yet. Our strategy focuses on premiumization, increasing availability, and leveraging our route to market, but we recognize execution can improve. We are dedicating more resources to fewer brands, making our execution comprehensive at a level each brand deserves. We want to ensure we leverage our brand effectively at key selling moments. The early numbers of this year look promising, with retail sales shifting positively. We need to observe how the market develops in the coming months to better define what we can expect for the full year.

Michel, it's a bit of a complicated nuanced question, so let me go slowly. You've been leading a cultural change at the company, and I'd like to understand where you are with that. Part of the cultural change, I think, is getting a better balance on the marketing side between local and central decision-making. You operate in enormous markets with significant consumer diversity. So, it's always tricky; you want scale for decision-making, but you must also be sensitive to local consumer needs. In that context, have you changed the balance between centralized and local marketing decisions? What role is data and AI playing in that change? Is this shift helping you drive strong share gains this year?

Robert, thanks for the question. I'll attempt to address this comprehensively. The cultural change we are implementing revolves around transitioning from an acquisition-driven growth model to one focused on organic growth. This means less growth from acquisitions and more focus on the brands we have with local consumers. We operate in diverse markets, but we adopt the idea of leveraging both local and global initiatives to do what's best for our consumers. We've organized around our mega brands, emphasizing a few key brands that will lead our growth. These mega brands have seen rapid growth from $25 billion in 2021 to over $33 billion today. They now represent 57% of our portfolio, which shows that this strategy is working. We also leverage mega platforms, whether they are sports or cultural events, to enhance brand engagement. Our data now is common and detailed across all markets, allowing us to create a unified ABI marketing approach that can be utilized globally while remaining tailored to the needs of local consumers. This allows us to address local consumer needs with targeted propositions. For example, our approach to healthier choices varies by market, such as focusing on low carbs in the U.S. and gluten-free options in Brazil. We’ve streamlined our messaging, making it effective across multiple platforms, and are very encouraged by our results. I would be glad to discuss this further when we meet again. Thank you.

Michel, and Fernando, my two questions. First, Michel, you've got a range for organic EBITDA growth of 4% to 8%. Can you just talk about what you think the key factors are that might lead you to the bottom end or the high end of that range? And the second one, probably for Fernando. A big step-up in cash flow this year. As I look forward to 2025, would it be right to think, well, hopefully, there'll be some organic dollar EBITDA growth, dollar interest will fall a little bit, CapEx you've already guided to, and working capital probably to be more or less neutral across the year? Is that a fair way to think about the 2025 cash flow?

Trevor, Michel here. I'll address the first question and leave the second one to Fernando. Regarding guidance, we provided it during the transition from inorganic to organic growth. The guidance of 4% to 8% allows for flexibility in projections given this transition. We've managed to consistently deliver within or above this range over the last 13 quarters. Each quarter is different, with various external factors at play. We have the levers in place to maintain long-term focus while also delivering positive growth on the EBITDA line. If we execute well and continue optimizing, this will foster growth in free cash flow, which is an indicator of strength. It's too early to predict specific impacts on the high or low end of our range, but we remain encouraged by recent momentum and see the outlook as solid.

And Trevor, Fernando here. For your cash flow question, you're right. Our improvement in 2024 stemmed from several factors. We started with an increase in EBIT. Net interest savings from deleveraging helped, around $300 million. Also, we had a positive shift in working capital, transitioning back to more normal levels after the disruptions caused by COVID. We expect to maintain a similar situation moving forward. With our EBITDA outlook and normalized working capital, we believe that cash flows will continue to remain strong.

First question is just on the U.S. where STR is positive in Q4, and you commented on gaining share. It sounds like the beer industry overall improved through the course of 2024. Michel, you talked about the portfolio reaching an inflection point. I wonder if you could comment on whether you think modestly positive STR growth is now sustainable in the U.S. business? And the second question is just on Mexico. There's been improved consumer momentum in Q4. Could you just share some color on what you think drove that and whether that's sustained into the start of 2025?

Gen, you're right. In the U.S., we saw sequential improvement in the industry throughout last year, with a slow start, but the second half saw improvements. We've seen a correlation with weather events, where a normal week reflects better industry performance. While I wouldn’t say we are at a fully positive volume point yet, dollar-wise, the industry is stable and growing. The commercial momentum with brands like Michelob Ultra and Busch Light is clear. Looking ahead, we believe consumer behavior will normalize, but there are several factors to consider that may affect our forecast. In Mexico, consumer behavior in Q4 improved post-government spending issues in Q3, allowing for recovery. The trends we’ve observed this year also point towards a better outlook. Let’s see how the summer unfolds for both markets. Thank you, Jesse. So thank you, everyone, for the time today, for the ongoing partnership and support of our business. Stay safe and well, and we will see you guys on our next calls and one-to-one interactions. Thanks so much. Have a good day.

Thank you. This concludes today's earnings conference call and webcast. Please disconnect your lines and have a wonderful day.