SABMiller's (SBMRY) Q4 2016 Results - Earnings Call Transcript

| About: SABMiller plc (SBMRY)

SABMiller plc ADR (OTCPK:SBMRY) Q4 2016 Earnings Conference Call May 18, 2016 10:15 AM ET


Gary Leibowitz - Senior Vice President, Internal and Investor Engagement


Mark Swartzberg - Stifel Nicolaus & Co.

Robert Ottenstein - Evercore ISI


Welcome to the SABMiller 2016 Year-End Results Conference Call. Hosting today's call will be Gary Leibowitz, Senior Vice President Internal and Investor Engagement. Please go ahead.

Gary Leibowitz

Thanks, operator, and good morning, everyone. Thanks for joining us on this webcast of our results for the F-2016 financial year ended March 31. I'm Gary Leibowitz, and with me today is [Mari Yoshinaga], our Investor Relations Senior Manager. I will start this morning with a presentation of our – a quick presentation of our business performance and financial highlights and then we’ll go on to Q&A either from the dial-in conference line or from the webcast.

As usual our remarks may contain some forward-looking statements that involve uncertainties that reflect management's best assumptions. And as usual SABMiller disclaims any obligation or intent to update these forward-looking statements outside of usual reporting routines. Note that when we refer to EBITA that’s earnings before interest, tax, amortization of intangibles and exceptionals, includes our share of associates' and JV EBITA on the same basis. And the word underlying - where used, refers to results in organic constant currency.

So let’s kickoff, the year ended March 31 was a period of strong performance for SABMiller. Our business has demonstrated increased momentum in the second half across all regions despite the economic volatility with which you are all familiar. Through their performances our people who’ve made clear that they’re steadfastly maintaining their focus on delivering our strategy notwithstanding the ongoing AB InBev offer process.

Group NPR grew by 5% on an underlying basis with volumes up by 2% and price mix realization of 3%. Our subs delivered excellent results with NPR and volume growth of 8% and 5% respectively, our subsidiary lager volumes rose by 4% for the year with growth accelerating to 6% in the second half.

Latin America and Africa were the big drivers of topline growth, our subsidiary lager volumes rose by 6% in each of those regions driven by broader brand and pack portfolios and further improved sales and distribution.

Colombian growth accelerated well South Africa, Nigeria, Zambia and a host of other African markets maintained strong momentum despite currency volatility and associated economic challenges. Our European subsidiaries and CUB in Australia generated meaningful trend improvement. Our subsidiaries premium lager volumes rose by 6% supported by global brands growth of 9% excluding home markets.

Currency headwinds were strong accelerating through the year to reduce our reported EBITA growth rate by 17 percentage points. Our underlying EBITA growth was strong however grown by 8% on an organic constant currency basis. Local productivity improvements were complemented by our global cost and efficiency program, which is targeting further savings and procurement, manufacturing and distribution. The global program generated an incremental US$326 million in savings in the year.

Our cost management contributed to EBITA margin growth of 60 basis points despite the significant transaction FX headwinds. Overall the business delivered adjusted EPS growth of 12% on a constant currency basis driven by both topline and efficiency delivery. The Board has recommended the final dividend of US$0.9375 per share which if approved by shareholders at our AGM on July 21 will be payable on August 12, 2016.

The full-year dividend and the final dividend are permitted dividends within the terms of SABMiller and AB InBev’s joint Rule 2.7 announcement on November 11, 2015. The final dividend will not be payable if the acquisition of SABMiller by AB InBev becomes effective prior to August 12, 2016.

Turning to our regional performance review. In Latin America accelerated topline momentum was driven by our easy-drinking core lagers, our premium segment growth and our focus on affordability. This was particularly evident in Colombia, where the team delivered a strong acceleration in our lager volumes, which were up 11%. Our share of alcohol in Colombia rose by approximately 220 basis points versus prior year.

This success was driven by an expanded portfolio up and down the price letter as well as the continued development of our leading sales service model. Our affordability strategy has driven higher volume and profitability in Honduras and El Salvador and in Peru volume growth continued at a more moderate pace accelerating in the final quarter despite a price increase taken earlier in the year. Conversely, economic and regulatory headwinds constrain growth in Ecuador while both excise and competitive pressures resulted in a steep decline in Panama.

Overall in the region, we delivered 8% underlying NPR growth and volume growth of 5%. EBITA margins in Latin America were held back by very significant transaction FX headwinds; this negative influence was partly mitigated by our volume growth, positive sales mix and good cost control resulting in a margin decline of only 20 basis points on an underlying basis.

Turning to Africa, our beer volume growth momentum continued throughout the year. Our portfolio initiatives and our distribution and outlet service extensions have all fueled this momentum. Our subsidiaries drove lager volume and underlying group NPR growth of 6% and 12% respectively.

Operating environments have become increasingly volatile in the second half due to steep currency declines across the continent. These economic conditions have affected consumer confidence and purchasing power driving incremental down trading and influencing our sales mix between price segments. Therefore, premiumisation slowed, mainstream volumes grew by only 2% and our affordable segment volumes rose by 42%.

Our momentum in Nigeria continued with lager volume growth of 31%. We continue to expand our distribution and our market share is now approximately 20% in the lager segment driven by our Hero, Trophy and Eagle brand.

Underlying demand in South Africa continues to soften while our lager volumes rose by 2%. Our South African beer and alcohol market share continue to rise therefore due to excellent sales execution, outlet service, revenue management and portfolio breadth.

Across the continent, our soft drinks volume momentum continued. Soft drinks volumes were up 8% albeit with real pricing and profitability constrained by a challenging competitive environment. Our associate Castel delivered more modest NPR growth and its margins fell predominantly due to very challenging macro conditions in its key market of Angola.

Overall, Africa’s EBITA margin rose by 10 basis points on an organic constant currency basis. Our topline momentum and excellent revenue and cost management in South Africa offset the currency impact on our cost structure, Castle’s weakness in Angola and some soft drinks dilution.

Turning to Asia-Pacific, in Australia underlying NPR grew by 4% as NPR per hectoliter growth of 3% was driven by both price and mix. CUB’s volume and market share growth was underpinned by improved customer relationships and premiumisation and innovation in our portfolio. Profitability in Australia improved materially as a result of our price realization, mix improvement and continuing cost optimization across production, logistics and back office processes.

In China, beer demand remained soft amid a subdued economic climate with a reduction in drinking occasions associated with hospitality and entertainment. CR Snow’s volumes were down 2% with underlying like-for-like NPR growth of 6% driven by package mix and continuing premiumisation.

EBITA margin expansion was achieved through management of sale costs and overheads in the face of the industry downturn. Elsewhere in the region, underlying NPR rose by 7% in India while in South Korea the team delivered strong growth in the premium segment with the Pilsen Callao brand.

In Europe, our subsidiaries delivered strong commercial performance driving a positive trend shift versus the prior year. Subsidiary volume in NPR grew by 1% for the year as turnarounds in our Polish and Czech businesses in the second half were complemented by strong performances in Western Europe and Romania.

Pilsner Urquell demonstrated real strength in the Czech Republic and elsewhere including a successful and expanding Tank Beer initiative. And as depicted in the chart at the lower half of the slide, Kozel had its 15th year of expansion another brand from the Czech portfolio with international volumes exceeding 2 million hectoliters and total volume exceeding 4 million hectoliters.

Our focused implementation of European and global cost efficiency programs drove subsidiary margin growth for the year despite continuing segment and channel mix headwinds. Our associate Anadolu Efes continued to be affected by economic, political and currency instability in its key lager markets of Russia and Turkey.

And now in North America, group NPR was level with the prior year as MillerCoors shipments fell by 2% primarily due to declines in the economy segment. NPR per hectoliter was up by 1% in a softer pricing environment with some continuing mix improvement. In the premium light segment MillerCoors has delivered a significant performance improvement although sales to retailers were down low single-digits MillerCoors’ consistently grew segment share.

Miller Lite has gained segment share for six consecutive quarters following last years new packaging and marketing, emphasizing its heritage and originality. Coors Lite has gained segment share for four consecutive quarters with effective new marketing, improving the brands trend through the year. MillerCoors above premium volumes were led by a 30-year of Redd’s family growth, Blue Moon and the Leinenkugel Shandy Lime offset by the deprioritization of Miller Fortune.

Innovation at MillerCoors continued the pace with its very successful launch of Henry’s Hard Soda in the fourth quarter. Cost management and efficiency improvements have continued at MillerCoors. EBITA margins rose by 80 basis points in the year, a big achievement by the team there in a challenging topline environment.

However, SABMiller’s total North America EBITA margin increased by only 20 basis points due to our higher marketing and fixed cost investment to support our international operations in Brazil and Canada following changes in our route to market in both countries.

Now stepping back and looking at some of the group’s global financial measures. As we previously noted, we faced significant volatility in our key currencies during the year. The significant depreciation of these currencies against the U.S. dollar has disproportionately impacted our key operation in South Africa, Colombia, Peru, Australia, parts of Europe and Africa. This does have an adverse impact on our results both on a transactional and translational basis with the impact larger at an EBITA level than at NPR due to the greater devaluation of currencies in our higher margin markets.

The adverse transactional foreign exchange impact in variable production cost is estimated to be between US$150 million and US$200 million with the biggest impact in Africa and LatAm. This was offset some extent by our cost and efficiency program. The adverse translational foreign exchange impact on EBITA in the year was a $1 billion or approximately 17 percentage points of growth.

As a results reported group NPR EBITA and adjusted EPS declined by 8%, 9% and 6% respectively and basic EPS declined by 18% due to both the translational impact and because we have recognized that net exceptional charge of $721 million before tax in the year. This includes 572 million of impairment and related charges in Angola and South Sudan and $160 million associated with the AB InBev transaction.

For the rest of the remarks we are just looking at organic constant currency numbers. We delivered organic constant currency EBITA growth of 8% as you heard as a group and so all the regions delivered growth. Our group EBITA margin increased by 60 basis points and the material adverse transactional Forex impact on EBITA was mitigated by cost management. EBITA grew by 7% and 11% respectively for LatAm and Africa as cost productivity and improved efficiencies only partly compensated for the currency pressure on imported raw materials which adversely impacted margins.

In Asia-Pacific, EBITA grew by 13% and margins expanded by 200 basis points. The strong performance was supported by margin expansion both China and Australia reflecting topline growth and continued cost optimization across the region. In Australia, the focus on cost optimization through the year included improving production logistics and streamlining of back-office.

In China margin expansion was achieved through management of sales cost and reduced overheads. In Europe EBITA was up 5% and EBITA margin increased by 60 basis points. Our subsidiaries increased EBITA by 6% with the topline performance supported by region wide cost reductions and efficiencies. Associates EBITA was down by 3% driven by Anadolu Efes. And in North America as you have just heard EBITA was up 1% and total EBITA margin increased by 20 basis points.

Turning to the next slide, this shows the cumulative total of our two announced cost initiatives. The business capability program which concluded in 2014 and the cost and efficiency program which has now been extended to the year 2020. By the end of our 2016 financial year, we had achieved net cumulative savings from these two programs of US$1.043 billion since starting in 2010.

We announced the second of the – these the cost and efficiency program in May 2014 and in October 2014 we increased our target annual run rate for cost savings by US$550 million to at least US$1.05 billion by March 31, 2020. This program is ahead of its original 2014 schedule and delivered cumulative net annualized savings of $547 million by year-end. This is the head of the original target of US$500 million by 2018 and is on track for the 2020 target.

Efficiencies and cost savings achieved in this year were largely delivered to our integrated end-to-end supply chain with savings broadly split across procurement, manufacturing and distribution. Our global procurement organization now captures an average of 86% of spend under management up from an average of 69% in the prior year, but by the end of the financial year the spend under management was 93%.

Manufacturing savings have been achieved through our group-wide approach to performance benchmarking brewery by brewery sharing best practices, with water and energy savings driven by our continuing focus on sustainability initiatives. And in distribution efficiencies have been achieved through route-to-market optimization and distribution rate renegotiations in Africa. In Europe, we continue to optimize our distribution grid and have moved into direct deliveries in some markets. Initiatives in LatAm and Australia are also bearing fruit.

And so in conclusion moving on to our financial outlook we expect on a business as usual basis to deliver good underlying performance in the year ahead. Although there has been some recovery in our key currencies recently we anticipate that will continue to face Forex volatility in F-2017. Africa in particular could be adversely impacted by local currency devaluation with some countries experiencing limited access to foreign currency.

In the forthcoming financial year we expect both total cost of goods sold and raw material input costs to increase by mid-single digits on a constant currency per-hectoliter basis. This will be driven by increased commodity prices and currency headwinds on imported raw materials, together with inflation driven increases in packaging. We expect this will be partially mitigated by continuing efficiency benefits from our cost and efficiency program.

For CapEx investment in production capacity and capability will continue to drive growth. On a business as usual basis capital expenditure is anticipated to be similar to that in prior years and we will continue to grow our footprints in Africa through measured capital investment in an increasingly volatile environment.

The full-year effective tax rate is expected to be between 26% and 27% and we expect the finance cost for the coming year will be broadly similar to the year just ended primarily as a result of reduced net debt, partially offset by expected rises in rates in some countries in coming months. And as noted already our cost savings program is on track to achieve our 2020 target of US$1.05 billion.

Thanks for your time. And we will now open the field, if there are any questions in Q&A.

Question-and-Answer Session


Thank you. [Operator Instructions] We will now take the first question from Mark Swartzberg from Stifel. Please go ahead.

Mark Swartzberg

Thanks operator, hey Gary. Hey, everyone.

Gary Leibowitz

Hi, there.

Mark Swartzberg

Kind of a technical question, but you've gone out of your way to say that you think that the deal will close after August 12 and then there's this comment on Page 3 quote the parties do not anticipate completion occurring before that date. I presume when you use the word parties, you're speaking not only on behalf of SAB but on behalf of Anheuser-Busch InBev is that the right presumption?

Gary Leibowitz

Yes. That’s right. I think that was echoed in the announcement published this morning, the two parties of the transaction are not currently anticipating close prior to that date.

Mark Swartzberg

Fair enough. And then Castel you commented in the release and in the comments you just gave us Gary that the performance wasn't as good as it might've been partly due to macros and am I reading right here there was also an impairment charge, so can you give a little more perspective on what's going there - going on there both from a macro and from the standpoint of this charge. And then also anything you can share with us competitively that might have changed would be helpful.

Gary Leibowitz

Yes, I mean on the latter point there is nothing material to report as far as the commercial competitiveness of the business or its share position or its underlying trading capability. The bulk of the US$572 million impairment that we cited is related to Angola and South Sudan is Angola that’s the bigger piece. The lack of foreign exchange availability and significant decrease in the price of oil is affecting the economy fairly thoroughly there.

And suffice to say in summary that it’s affecting supply side capability of production operations across the range of industries including ours and it’s affecting demand-side economics as well as far as the trickle-down within the economy and the ability of the middle class on down to have a discretionary spend occasions if you will. So from both the supply and demand-side there is a real contraction of the economy and this business is not immune to that at all.

Mark Swartzberg

And so when you make this impairment that I presume that affects the entirety of the business not only – this is your proportionate share of the impairment?

Gary Leibowitz


Mark Swartzberg

Got it. And can you give us any more on sort of what the logic was behind the impairment. I hear you saying that the economy both from a demand and supply standpoint is under some pressure, but I presume this is an intangible – can you just – I’m just trying to better understand what was written down and why?

Gary Leibowitz

Yes. I mean we are limited in any detail that we can give – the undertaking of the impairment process was by Castel.

Mark Swartzberg

Got it.

Gary Leibowitz

And we are accounting for our pro rata portion of that. Today, you'd expect them to go through fairly customary discounted cash flow and other methods of evaluation relative to the carrying value that was on their balance sheet.

And based on their assessment of current trading and likely future trading they’ve come to the conclusion as to the new appropriate value, but between tangibles or intangibles that wouldn’t be for us to announce that for them. I would say that there is more detail that was provided in the announcement this morning, but it's interesting that the remainder of the Castel business actually was doing very well.

Mark Swartzberg

Got it. Meaning remainder other than Angola.

Gary Leibowitz

That’s correct. Yes.

Mark Swartzberg

Got it. Fair enough.

Gary Leibowitz

In fact, it goes through some detail – in fact we disclosed that excluding Angola the rest of Castel’s footprint across Africa actually grew volumes in the mid single-digit range with double-digit volume growth in some of their other key countries including the Republic of Congo, Burkina Faso et cetera.

Mark Swartzberg

Great. One final one for you and that’s helpful. Also on Africa kind of more qualitative, but now that we’re getting near the finish line with the creation of Coca-Cola Beverages Africa. Do you have a sense about how the time involved in getting the clearances and completing the transaction has affected your competitiveness in the marketplace?

In other words, is there a way to kind of look at the period since November 14 to the present and say that the transaction was a bit of an overhang and heard some of our performance or the opposite I mean actually if you look at your wholly-owned businesses on the beer side your business is actually improving post announcement of the ABI transactions. So I’m just trying to get a sense of how this other big transaction has affected performance in the soft drink business?

Gary Leibowitz

Yes. That’s a good question. I speak with our – we speak with our operators regularly on the ground. There's really no evidence that CCBA transaction process has affected operational focus or performance in any way shape or form. I mean there is – on the positive side of the coin, there's been really strong soft drinks volume momentum for the last several years in our Coca-Cola franchise footprint so and that has continued unabated.

So I mean South Africa is our largest position and soft drinks volumes grew by 10% in the year just finished. From a share perspective if anything may have slightly improved I mean there was a period going back two or three years where we were growing volumes at a nice clip, but nevertheless still losing share to lower-priced competition that had come into the market not so much in the color there, but more in the flavor there. I think from a volume and share point of view there's nothing you could say to speak that would be negative around performance during this transaction execution period.

Conversely from a – and by the way that you can apply that very much to Zambia where we have another significant position where volume momentum is very strong in the year just finished. Now the economics of the businesses in a country like Zambia where the currency has been dealt a body blow by the financial markets, the economics are therefore relatively strongly affected because the cost structure has quite a significant degree of imported material including the concentrates. So profitability is down there and that was alluded to in our prepared remarks today.

Having said that the some of the negative price mix, price and mix ramifications of the competitive environment over the last few years that were resulting in our ability or our decision to take effectively no price or to accept a negative real pricing trend relative to inflation and which also was diluted to pack mix in fact it sort of leveled off and that was very much in evidence, the last time we did South Africa similar when we spoke about soft drink economics, there was negative pack mix, there was negative real pricing.

In the year just finished there was in fact a stabilization of price mix and margin for soft drink, so really nothing to speak of that in terms of effects from the transaction.

Mark Swartzberg

Great, I have one more, but I’ll get back in the queue. That’s been very helpful. Thank you.

Gary Leibowitz

Thanks Mark. Well, Mark, we have a few questions that have come in through

Unidentified Analyst

The first one was can we provide more color on profit underperformance in Tanzania and plans to get that operation back to profitability?

Gary Leibowitz

The only clues to that that we provided publicly is around the extensive down trading that has occurred in the Tanzanian market in association with the economic pressure that consumers are experiencing there. In fact the volume performance in Tanzania has been very strong up 7% for the year very disproportionally driven by tremendous growth in Eagle particularly in the north of the country, but in general.

Now obviously that is at a material lower price point so from both NPR per-hectoliter and an EBITA perspective it is dilutive. The other thing we would say is that TDL, the spirits business in Tanzania is also experiencing down trading in it segment, but unlike the beer business where we have a leading affordable segment alternative in the Eagle brand in the case of spirits down trading tends to be out of our portfolio and into a more localized or sometimes more informal competition. So there has been a particular sort of suffering in the TDL business there. About as much as we can say on that.

Unidentified Analyst

And then there been a couple of questions related to the impending AB InBev transaction one asking has Castel given any feedback regarding that?

Gary Leibowitz

And the answer is not to us that would really be a matter in future between AB InBev and Castel.

Unidentified Analyst

And a question will the merger change our strategy in the meantime in the way we managed our operations?

Gary Leibowitz

And the answer now is absolutely not there is a – really business as usual amid the convergence planning that’s going on with a reasonably light touch right now, our business processes as far as performance management annual planning cycle et cetera are going on a pace as per usual and our businesses are continuing to compete vigorously in the marketplace everywhere. I think that’s it from, so operator back to you with anything on the phone.


Thank you. We will now take the next question from Rob Ottenstein from Evercore. Please go ahead.

Robert Ottenstein

Hey, Gary. You’ve seen a lot of cycles in the businesses over the years and in times are good and times are bad and now when some of the markets like in Africa you're seeing a certain amount of down trading which makes sense. In your experience how – is there a long-term impact from the down trading such that consumers kind of get used to the lower price brands or have what you seen that when things get better people trade right back up right away. I'm just trying to get a sense if there's any kind of potential for a longer-term impact here?

Gary Leibowitz

Thanks. Look a couple of points to that answer, people – we have been trying our best in very focused and deliberate ways to drive truly incremental growth with our affordability initiatives in Africa in terms of planning distribution footprint both as in parts of the countries and in parts of individual cities right down to the individual outlet level as to where brands like Eagle or Chibuku Super or Impala Go.

So as to actually drive incremental growth as opposed to cannibalization. And by and large our ability to do that fairly surgically and our conviction around that has increased a lot in the last three years versus the previous decade before that were Eagle have been a great success in Uganda, but was pursued in a limited fashion elsewhere because of concerns around cannibalization. So, on the one hand I mean there's a lot of this current affordable segment growth, which is A) truly incremental and B) providing so much positive operating leverage from scale that it's really help to enhance our overall profitability.

The second part of the answer there is some direct down trading into our own affordable segment or into local substitute that is going on because of the economic pressure, there is no doubt about that. But societal, custom and culture does vary a little bit by country within Africa, but I think it’s not to off-base to say that generally speaking our target consumers in their various demographics and age groups are quite image and status sensitive and from our experience when they are able to trade back up, they do so immediately.

And that is really not a black and white feature as to someone just becoming an Impala drinker for the next two years and then trading back up at some other point really is a case of frequency or trade up within their repertoire. So if an affordable brand becomes something daily then perhaps once a week it’s trading back up and then that can go up to twice a week or three times a week or you could say the same per month for other consumers. But at the margin people will trade back up as soon as they can.

Look there is still an annualization effect to take place this year in these economies as far as the pressure the consumers are feeling, because of the delay in the knock-on effects of FX devaluations leading to inflation increases et cetera. But there's not really any evidence I mean given that currency has stabilized more recently and in some cases started to come back. There is not really any evidence right now to say that beyond the –now current financial year that negativity are to persist.

In fact to the contrary, our strategic planning would indicate continuing strides in market penetration and then consumer trade into formal alcohol which – in which we play a leading role across the continent.

Robert Ottenstein

Great. That’s very helpful. And then while we are talking about that currency rates and those sorts of issues at the current spot rates can you give us any sense of the magnitude and likely phasing of additional transactional FX pressures and the kind of lags that you may get region by region based on your hedging policies just as we look things out over the next 12 months?

Gary Leibowitz

Yes. I’d love to be more helpful, but we are particularly limited in our ability to give any forward-looking commentary now to some extent as always, but particularly in an offer period contact. So I’m really not able to say much on that. As we’ve said for a long time it is normal for us to be anywhere from six to 18 months out forward bought on imported raw materials and in the FX that’s required back to back to make good on those contract.

So that’s a normal range of forward line. I would say currencies have come back in a number of the countries in the last couple of months. You would expect just based on the profile of when spot rates fell during the course of last financial year that we would feel more pressure sooner rather than later that would over time be shaken off, but I can’t be any more specific in that.

Robert Ottenstein

Great. And then I don’t know if you're able to answer this one also, but I'll give it a shot. Is there any link at all between the regulatory process for CCBA and the approval process for the ABI, SAB transaction in South Africa? Was there any kind of interaction or any linking between those two different processes that you can speak to?

Gary Leibowitz

Not that I’m aware of or can speak to – no I mean the CCBA process was entirely independent of the other transaction started far earlier involved far more parties and in some ways it’s more complex, because it was case of bring together a number of businesses sort of horizontal integration if you will within the South African marketplace.

The dynamics for the AB InBev transaction are totally different and to my knowledge it’s been a process, it’s been run separately at the commission.

Robert Ottenstein

Great. Thank you very much.

Gary Leibowitz

Thanks, Robert.


Thank you. We will now take the final question from Mark Swartzberg from Stifel. Please go ahead.

Mark Swartzberg

Yes, thanks for taking me again in the queue here. Simply China I'm trying to pull up the transcript from London and I’m not having success. Did you comment or can you comment on where we are with the regulatory process in China either sense of timing [indiscernible] here or any comments you have on that topic, we know there is an announced transaction of course but any comments on timing and the regulatory process in China that you either have made or prepared to make I’d be curious what they are?

Gary Leibowitz

No Mark, I will save you a lot of time, you don’t need to look for the document. We commented this morning just like we commented today this afternoon here on the subdued economic climate on the 2% volume decline, which is a share gain for CR Snow we talked about package mix and premiumisation, we did not commented all on the transaction there you know we are simply not a party to it, you know neither AB InBev engagement with China resources nor their approach directly you know directly or together to MOFCOM, we’re just not a party to that.

Mark Swartzberg

Understood. Great. Thank you, Gary.

End of Q&A

Gary Leibowitz

Okay. With that I guess we’ll wrap up the call. We do have certainly one further reporting period which is the F-2017 Q1 reporting in the third week of July together with our AGM. So we look forward to being back in touch with you then, but otherwise I just like to say to all of our followers’ thank you very much for your support and your attention over the years for these sorts of calls, for our MillerCoors calls, for Divisional Seminar Series et cetera. We appreciate it very much and we look forward for those of you who are able to make it to New York or who are based in New York to be able to see you again in person. We will at least have one live reception there on I believe its July 12. So look forward to seeing as many as possible of you then. But that’s it for now. Thanks for joining today’s call.

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