So, between 1 and 1.5 out of 20. And as I said before, we have very strong business plans. These business plans are all negotiated and downloaded to both our wholesaler teams and our retailer partners, huge buy-in in terms of the activations that we have for the year. Think about how we started with Super Bowl and now as we phase towards the summer, we will have a very strong set of assets that go through NBA, then we have Copa America, then we have Olympics with the Team USA plus the whole NFL season. So we are very confident on the execution. We are very confident on the ability of our teams to bring beer to the floor and to work hard to continue to build this momentum. As I just said before, key brands such as Michelob ULTRA at all-time high now accelerating momentum.
Busch Light, all-time high share, also gaining momentum, and we will continue to work together with the partners to take the best out of the great summer of activations that we have in the remaining part of the year. But all in all, no big change from last time that we talked, just that now we have north of 92% of the retailers already with the work finalizing.
Simon Hales: Good to hear. Thank you very much. Operator: Thank you. Our next questions come from the line of Sanjeet Aujla with UBS. Please proceed with your questions.
Sanjeet Aujla: Hi, Michel, Fernando. Two from me as well, please. Firstly, Fernando, I just love to follow-up on the SG&A point that came in just 1.4% well below inflation. So can you just talk a bit about what’s happening in the U.S., firstly, where there was a decent decline? I think in the past, you’d alluded to around one-third of the EBITDA decline in the U.S. being something you could potentially control. So you’re now kind of rightsizing your cost base for the new level of volume in the U.S. And should those benefits continue to accrue through the course of the year. But then also in some of the other emerging markets, particularly EMEA and Middle Americas, was well below inflation. So I just love to get a sense of how much of that we can extrapolate going forward?
Fernando Tennenbaum: Okay, Sanjeet. So on your first question, probably you answer the question on your own question, is the one-third, two-thirds kind of we have the two-thirds that is volume linked, and volume was slightly better. So you get a little bit of operational leverage there. And the one-third are the things that we can work. It’s part of the pillar number two of our strategy to optimize our business, and we are doing that. We are kind of looking at the things that we can control. They don’t happen overnight. But as we said, this one-third is something that within our control. And over time, we can get some of that back. When you look at the global mindset and it’s not different than what we’re applying to the U.S. is we look for that every day.
There is – there won’t be any super bullet, but we have this ongoing efficiency mindset where we keep looking at all the opportunities, always looking to optimize our business to save what we call nonworking dollars to make sure that we can invest more into sales and marketing and continue to support our brands but there is no specific outlook or anything like that rather than our ongoing optimization.
Sanjeet Aujla: Great. And just a follow-up for Michel on China, volumes there, particularly weak, I think you called out weather, but can you just talk a little bit about how the category is developing in light of the macro dynamics there? And give us a perspective of what you’re seeing across channels as well, please? Thank you.
Michel Doukeris: Hi, Sanjeet. So in terms of China, I think that what we see is maybe stepping back for a second. The long-term fundamental strengths of the category remain place. We continue to see premiumization as a very long-term trend for China. And as you look at the brands that are growing and where these brands are growing in terms of channels and regions, we don’t see a big change. We see that this premiumization should continue to drive an expansion on the EBITDA pool and margins, and this continues to reflect on the numbers as we go through the quarters. And we see, as I think I mentioned during the quarter one, the full year results when we talked, that we saw a little bit of impact from different forces on the mainstream volumes.
So there’s a little bit of weather. The macro is a little bit soft and consumers cycling the last year reopening with a more normal Chinese New Year, traveling things this year. So I think that long-term fundamentals is still in place, industries premiumizing, premium beers are growing, profit pool should be expanding. And then because China is very big as a country like Continental, you always have different impacts in regions due to weather, due to the economic moves. And what we saw during the beginning of this year, trimester one, was that weather was impacting a lot, let’s say, east, southeast of the country, while other regions more towards the West, Southwest, had an easier ride in terms of weather as well as different comps from last year, the reopening that we all know was more concentrated and more impact on the Eastern for audiences of China.
But long term, we believe that the fundamentals remain place. Premiumization remains a very strong force and whatever weather related is more transitory than something that we should be watching for the remaining of the year. Thank you for the question.
Sanjeet Aujla: Great. Thank you
Operator: Thank you. Our next questions come from the line of Laurence Whyatt with Barclays. Please proceed with your question.
Laurence Whyatt: Good morning, Michel and Fernando. Thanks very much. A couple for me. Just following up on the China question. Just wondering if you had seen any impact from the flooding that we saw in Guangdong recently, whether that’s how important that region is to you in China and what the impact on consumers was there. And secondly, Fernando, on the – your balance sheet is we think is likely to get – to populate the sort of important 3x net to EBITDA number at the end of this year. But of course, Altria has started selling some of its stock. They’ve got a lockup towards end of the year, but just sort of the potential of Altria selling some more stock, does that impact your desire to embark on any additional buybacks that change your thinking around how you might return cash to shareholders later in the year. thank you, very much.
Fernando Tennenbaum: Hi Laurence, Fernando here. Let me take your question first, and then I’ll hand over to Michel. So Altria, I don’t know what will be the intentions or not. There’s some question for you to ask them, but I don’t have any views on that. But on our side, we remain disciplined in our capital allocation decisions. And the objectives that we have are always to maximize value creating to shareholders. So we always analyze kind of different opportunities when and if they arise. But bear in mind that we remain disciplined and value creation is the driver that we’ll be looking at more than anything else. Michel?
Michel Doukeris: Hi Laurence. I think we’re just complementing what we were talking about on the previous question. South China part of this Eastern, Southeast regions in China are very important for all categories and consumer goods. Guangdong is a very large province, very important for China, very important for all consumer goods as well as for our own volumes and premium volume. And this is part of this trimester 1 slightly different weather patterns that we are seeing in China, and we are watching and following this very close. And again, while the weather, we cannot control. We continue to be focused on the things that we can control which are the investments and execution behind our mega brands in China. We have a very strong calendar as we move towards the summer with our brands that includes Budweiser, activating around the Olympics, Blue Girl, activating, the key events and social occasions in China.
And we need now to continue to focus on what we can control, while, of course, watching, monitoring the weather-related events plus the macro economy. And of course, summer is very big and is a defining moment for the industry overall in China. We know from last year as another fact if you look to the numbers, we had strong industry performance in quarter one, quarter two, and we had an industry that was not that strong in the second half of the year. So I would say maybe complementing the information that we shared before that we probably will be looking at two different half of the years in China this year, half one facing stronger comps and half two easier comps versus last year. Thanks for the question.
Laurence Whyatt: Thank you very much.
Operator: Thank you. Our next questions come from the line of Sarah Simon with Morgan Stanley. Please proceed with your questions.
Sarah Simon: Yes. I have two questions, please. First one was some of your U.S. peers have been a bit more cautious about trading in April. And I wondered if you could give us any comments on how you see April compared to Q1? And then the second one was you referred to investing more in sales and marketing. But can you give us any kind of quantification in terms of whether sales and marketing grew organically ahead of revenues or in line? Or any kind of color on how that reinvestment is going through Q1? Thanks.
Michel Doukeris: Thanks, Sarah. Michel here. Thank you for the questions. So first one, if I understood well was North America, U.S. trade comps in April. I think that we – first of all, we are talking with the numbers of quarter one in mind here. And of course, that is, at this point, a lot of public available data of sales to consumer in the U.S. for April. And in a big picture, I think that what we need to see is the incoming trends of last year that was dollar growth with volumes is slightly down between one and two. It remains true for the quarter one as it remains true for the trimester one when we include the April into these numbers. I think that a little bit of the conversation was because Easter shift even in the U.S., not as much as in Mexico, but this is also a relevant occasion in the U.S. the more go to the southern part of the U.S., the more often it is.
