Rob Ottenstein: Thank you.
Operator: Thank you. The next question is coming from the line of Laurence Whyatt with Barclays. Please proceed with your question.
Laurence Whyatt: Hi. Thanks very much for the questions. A couple from me. Firstly, in regard to the sales in the U.S. potentially starting to stabilize, do you think the cost base in the U.S. is in around the right place at the moment? And then secondly, on Brazil, you said you perhaps lost a little bit of share this quarter. I think at the full year results, you stated how much share you gained over the past few years. Are you comfortable with the level of market share that you’re taking in Brazil? And is there anything further that can be done there? Thank you very much.
Michel Doukeris: So two questions there. I think that one data we shared, we got some questions in the last interactions about the cost base in the U.S. It’s like the EBITDA decline that we saw so far, rough numbers, two thirds related to the volume, one thirds is more operational leverage. And of course, there is many opportunities to improve productivity as you get less dislocation in production, you can optimize your lines and those things are being planned and implemented, as we are always working on optimizing costs. So there is work to be done. The team is working on that and we will be capturing productivity – while the quarters as we move forward. And in Brazil, I think that we are having a very good performance. Volumes performed very well in the quarter.
We saw a slowdown in the industry during the quarter two. Our premium portfolio continues to work very well. Our core-plus brands are working well. And as premiumization trends continue to be in place as we cycle the very strong comps that we had last year, I think that we will continue to see market share improvements and especially in the premium segment where we are accelerating big time, both volume and brand equity. So Corona performing well. Spaten performing very well. Original growing high double digits. So we are taking share on this very important segment in Brazil.
Laurence Whyatt: Great. Thank you very much.
Michel Doukeris: Thank you.
Operator: Thank you. Our next question is coming from Edward Mundy with Jefferies. Please proceed with your question.
Edward Mundy: Morning, Michel. Morning, Fernando. First question is, I’d love to get your perspective about how you think about the process of restoring lost brand equity. In particular, what are the lessons from previous brand turnarounds at ABI? Any examples, specific examples, you can talk to around what you did, sort of how long it took to improve on equity and then how long it took to sort of get consumers back on site for some of these brands. And then the second question, just building on the point of premiumization, both yourselves and one of your competitors that reported earlier this week, still seeing really good premiumization within the beer category. I appreciate the macros holding up okay. There’s still some sort of revenge spending going on. But do you think this premiumization will persist as you look out over the short to medium term?
Michel Doukeris: Hi, Ed. Thank you for the question. Let me start with the premiumization one. We have repeated this based on data and the insights that we have. We see the premiumization in the beer category, both having like a very large headroom because we have a lot of opportunity to continue to premiumize, but also a trend that is very consistent, is consistent across the globe and is consistent across different economic cycles. And we even shared with you before that in some recessionary scenarios when consumers are more under pressure, you will see a rather acceleration because people they concentrate their purchase power in categories where they can buy more with less, let’s say. So it’s more affordable to premiumizing beer than it is with some other categories.
And we see very consistent results like China, South America, Middle Americas, North America continues to premiumize. And in Europe, our portfolio is more than half today in premium brands. So we see consistency here. We see our brands performing very well. We announced a very strong quarter for our main global brands, and they performed very well across the globe. When you think about the brand equity, I think that this story is they are very similar yet each and every one is different. And as a company in the U.S., we are listening and actively engaging with our consumers. We learned a lot through these interactions so far. And as I shared in the webcast is people still with good members favorable, the brands still have a very high equity, but people basically – they want to enjoy their beer without a debate.
They want us to focus and concentrate in platforms that all consumers love and this is what we are doing. We are investing behind the platforms that we have engaged throughout the years with our consumers. The response for both communication, advertisement, the events and platforms that we are activating is good. And you need time, so you can get a better reading and better results. We have three months so far since this situation, and we continue to learn, and we continue to move forward with the main activities that we know that work everywhere, including in our regions in the U.S., different responses in different regions, but some very good responses across brands.
