Analyst presentation annual results 2017/18 7 June 2018 Disclaimer - - PowerPoint PPT Presentation

Analyst presentation annual results 2017/18 7 June 2018

Disclaimer

DISCLAIMER THIS PRESENTATION may contain forward looking statements. These statements are based on current expectations, estimates and projections of Lucas Bols’ management and information currently available to the company. Lucas Bols cautions that such statements contain elements of risk and uncertainties that are difficult to predict and that could cause actual performance and position to differ materially from these statements. Lucas Bols disclaims any obligation to update or revise any statements made in this presentation to reflect subsequent events or circumstances, except as required by law. Certain figures in this presentation, including financial data, have been rounded. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures which precede them.

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FY 2017/18 1. Lucas Bols at a glance 2. Highlights 3. Operational highlights 4. Financials 5. Outlook

3

Lucas Bols at a glance: Revenue +15%, EBIT +30%

4

18.5% 22.7%

EBIT* €m Revenue €m

19.9% 20.0% 13.4% 46.7%

Strong offering of global brands and regional brands

Regional brands Liqueurs Value brands Dutch Jenever portfolio

70,2%

Regional brands € 10.2 mln. Global brands € 46.9 mln.

29,8%

76% 24%

5

Revenue split 2017/18 Global brands

Italian Liqueurs White Spirits

Passoã Bols Liqueurs range Gross Profit split 2017/18 Regional brands € 22.3 mln. Global brands

€ 69.9 mln.

82% 18%

Sold in more than 110 countries around the world

6 Group revenue per geographical segment based on FY 2017/18

Lucas Bols’ mission & strategic framework

7

Mission Lucas Bols

We create great cocktail experiences around the world.

Strategic framework Lucas Bols

• To strengthen and grow our global brands in the international cocktail market
• To maintain the competitiveness of our regional brands in regional and local markets

Build the brand equity Lead the development of the cocktail market Accelerate global brand growth Leverage

• perational

excellence

FY 2017/18 1. Lucas Bols at a glance 2. Highlights 3. Operational highlights 4. Financials 5. Outlook

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Highlights FY 2017/18

9

Revenue Gross margin Net Profit Dividend Regional performance EBIT Gross profit increased 18.0% and gross margin was up 190 bps to 62.0%, attributable both to Passoã and to margin growth of the global brands Normalised net profit increased 20.1% to € 14.7 million compared to normalised net profit of € 12.3 million in 2016/17. Reported net profit of € 20.4 million, includes a one-off tax benefit of € 5.6 million in 2017/18 Proposed final dividend of € 0.25 per share, putting total full-year dividend at € 0.60 per share, up 5.3% compared to 2016/17 EBIT increased 29.6% to € 23.6 million at an EBIT margin of 25.6% Western Europe reported 27.8% growth in revenue, mainly on the back of Passoã and North America showed growth of 3.1%. Emerging Markets reported revenue was up 5.1% and Asia-Pacific returned to growth with a 1.3% rise in revenue. The US market showed strong organic revenue growth of 11.5% Revenue of € 92.2 million, an increase of 14.5% compared to last year, driven by the full year consolidation

• f Passoã (+1.8% organically)

Brand performance Global brands reported 21.0% higher revenue, with organic growth of 3.3%, while the regional brands’ reported revenue was down 1.8%

FY 2017/18 1. Lucas Bols at a glance 2. Highlights 3. Operational highlights 4. Financials 5. Outlook

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Operational highlights FY 2017/18

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Bols Liqueurs: low single digit revenue growth

• Two new flavours developed and introduced, Cucumber and Ginger
• Good performance in retail markets Germany and UK
• Retail position US significantly strengthened by two large retail chain listings in the last quarter
• Introduction of three new flavours in the US in March 2018
• New low alcohol drink strategy with ‘Low Bols’ concept launched

Bols Genever and Damrak Gin: double digit revenue growth

• Bols Genever new brand identity and drink strategy finalized
• Damrak Gin recorded strong growth in the US and the Netherlands
• Bols Vodka is still experiencing pressure in Canada due to fierce price

competition, while in its main markets such as Argentina and the Netherlands the brand continues to perform well

12

Operational highlights FY 2017/18 - continued

Italian Liqueurs performed in line with last year

• Further roll-out of the Galliano range in the US
• New range extensions of Galliano in various new markets
• Revival of the Galliano Hot Shot in Sweden supported by events and

brand activations

• New brand identity Vaccari well received in key markets

The Passoã brand performed well, in line with expectations

• First full year of inclusion in the global brands portfolio of Lucas Bols
• Strong growth in the UK on the back of the Porn Star Martini cocktail
• Also strong performance in the Netherlands and Switzerland
• Expansion to 35 states in the US

Bols Genever

Bols Genever 100% Malt Spirit – launched in September 2017 in various markets, including the US New brand identity and drink strategy takes Bols Genever to the next level as the original spirit of Amsterdam

13

Red Light Negroni – signature drink Bols Genever Ambassadors promoting Bols Genever in key cities around the world Bols Genever Barrel Aged introduced in the Netherlands Double digit revenue growth driven by the US and the Netherlands

Passoã is clearly delivering on its promise

Passoã is successfully integrated into the Lucas Bols organisation The commercial organisation has taken over all distribution contracts, and new agreements with distribution partners were signed Lucas Bols USA took over the distribution of Passoã from Rémy Cointreau and expanded the distribution from 15 states to 35 states at the end of March 2018 Strong new visual identity and campaign were developed and implemented New ‘fresh’ campaign activated in retail markets, including France and Belgium Porn Star Martini cocktail a continued success in the UK, also launched in other markets such as the US and the Netherlands Passoã was launched in a number of African countries and in Eastern Europe in H2 2017/18, further expansion is planned for 2018/19

14

Lucas Bols USA

Nuvo was reintroduced in the US in the spring of 2018 by our own organisation. Strong organic revenue growth of 11.5% Damrak gin - official gin of Delta Sky clubs as of 1 July 2017 Significantly strengthened the retail position of Bols Liqueurs with new listings in two large retail chains Bols Liqueurs Range – three new flavours added; Pineapple Chipotle, Mango and Ginger

15

Awards in the USA

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Wine & Spirits Wholesalers of America (WSWA) 2018 Best Liqueur of show & Double gold Wine & Spirits Wholesalers of America (WSWA) 2018 Best Genever of show & Double gold

Nuvo

17

In December 2017 Lucas Bols signed an agreement regarding a strategic partnership for the sparkling liqueur brand Nuvo Created in 2007, Nuvo is made of vodka, sparkling wine and a blend of fruit

• nectars. The brand is primarily consumed by women and is mostly sold in the

retail The transaction fits within our asset-light business model as it strengthens the company’s existing distribution platform with limited additional overheads required In the spring of 2018 Nuvo is reintroduced in the US in 10 selected states by Lucas Bols USA Nuvo will be supported by strong retail activation programs

Regional brands

18

Lucas Bols maintained its strong market-leading position in the Dutch genever and vieux segment In Western Africa distribution of Henkes Gin and Henkes Whisky was expanded The distribution network in Southern Africa was further strengthened resulting in good growth on the back of a solid performance by Bols Brandy Positive developments offset by significantly lower sales of concentrates in the Southern part of Africa due to a regulatory change and a weaker performance of our regional liqueurs Kontiki Sour Spiritz was introduced in the Netherlands in January 2018

FY 2017/18 1. Lucas Bols at a glance 2. Highlights 3. Operational highlights 4. Financials 5. Outlook

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Strong revenue and EBIT growth

Highlights

Revenue increase of 14.5% compared to last year (+1.8% organically) driven by Passoã Gross margin was up 190bps attributable to Passoã and margin growth of the global brands A&P as a percentage of revenue amounted to 16.6%, as we continue to invest in global brands that show strong growth potential in various strategic markets EBIT increased 29.6% to € 23.6 million with the EBIT margin coming in at 25.6% Income taxes included one-off tax benefits in both years, € 5.6 million in 2017/18 and € 3.2 million in 2016/17 Normalised net profit increased 20.1% to € 14.7 million (EPS of € 1.18) compared to normalised net profit of € 12.3 million in 2016/17 (EPS of € 0.98) 20

* at constant currencies, excluding one-off items and the first eight months of Passoã in 2017/18

Reported (in €million) FY 2017/18 FY 2016/17 Reported growth Organic growth* Revenue 92.2 80.5 14.5% 1.8% Cost of sales

• 35.1
• 32.1

9.3% 0.0% GROSS PROFIT 57.1 48.4 18.0% 3.1%

Gross margin % 62.0% 60.1% ## 200.1%

D&A expenses

• 34.5
• 32.4

6.5% OPERATING PROFIT 22.6 16.0 41.3% 43.1%

Operating margin % 24.5% 19.9% ## 460.1%

Share of profit of JVs, net of tax

1.0 2.2

• 55.3%

EBIT 23.6 18.2 29.6% 36.6%

EBIT margin % 25.6% 22.7% ## 464.4%

Finance costs

• 3.5
• 2.9

20.4% PROFIT BEFORE TAX 20.1 15.3 31.4%

Income tax expense

0.3

• 0.2
• 216.3%

PROFIT FOR THE PERIOD 20.4 15.1 35.5%

Earnings per share

1.63 € 1.21 € 35.5% 1.64 €

Global brands

Highlights

Reported growth of the global brands is mainly attributable to the addition of the Passoã brand. Organically the global brands were up 3.3% Gross margin rose significantly by 300 bps to 67.1% (2016/17: 64.1%) due to both the positive impact of Passoã and to margin growth of the other global brands EBIT increased 28.3%, resulting in an EBIT margin of 42.2% 21

• 0.6

Δ Global brands +28.3% Δ Foreign exchange effect FY 2016/17 7.7 FY 2017/18 Badwill FY 2016/17 29.5 23.0

• 0.5

EBIT development (in €m)

* at constant currencies, excluding one-off items and the first eight months of Passoã in 2017/18

Reported (in €million) FY 2017/18 FY 2016/17 Reported growth Organic growth* Revenue 69.9 57.8 21.0% 3.3% Cost of sales

• 23.0
• 20.7

10.9%

• 3.6%

GROSS PROFIT 46.9 37.0 26.6% 7.2%

Gross margin % 67.1% 64.1%

D&A expenses

• 17.7
• 14.6

20.6% 9.5%

% of revenues

• 25.3%
• 25.3%

OPERATING PROFIT 29.2 22.4 30.5% 5.6%

Operating margin % 41.8% 38.8%

Share of profit of JVs, net of tax

0.2 0.6 EBIT 29.5 23.0 28.3% 6.1%

EBIT margin % 42.2% 39.8%

Regional brands

Highlights

EBIT decreased 18.5%, explained by lower gross margin as well as the effect of the one-off gain of € 0.9 million in FY 2016/17 Revenue slightly down compared to last year The gross margin decreased by 430 bps, on an organic basis, mainly as a result of lower concentrates sales in the Southern part of Africa 22

9.0

• 18.5%

FY 2017/18 Badwill FY 2016/17 0.1 Δ Foreign exchange effect 11.0

• 1.2

FY 2016/17 Δ Regional brands

• 0.9

EBIT development (in €m) EBIT margin is at 40.2%

* at constant currencies and excluding one-off items Reported (in €million) FY 2017/18 FY 2016/17 Reported growth Organic growth* Revenue 22.3 22.7

• 1.8%
• 2.0%

Cost of sales

• 12.1
• 11.3

6.4% 6.4% GROSS PROFIT 10.2 11.4

• 9.9%
• 10.4%

Gross margin % 45.9% 50.1% ##

D&A expenses

• 2.0
• 2.0

0.6% 0.7%

% of revenues

• 9.1%
• 8.9% ##

OPERATING PROFIT 8.2 9.3

• 12.2%
• 12.8%

Operating margin % 36.8% 41.1%

Share of profit of JVs, net of tax

0.8 1.7 EBIT 9.0 11.0

• 18.5%
• 11.7%

EBIT margin % 40.2% 48.4% ##

62.0%

Global brands driving revenue growth

Revenue development (in €million)

67.1% 60.1%

Reported gross margin

Group revenue structure (FY 2017/18)

Regional brands Global brands Δ Regional brands

• 0.5

+14.5% FY 2017/18 92.2

• 1.6

Δ Foreign exchange effect 13.8 FY 2016/17 Δ Global brands 80.5

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Revenue (* €m) Reported FY 2017/18 Reported growth % Organic growth % Global brands 69.9 21.0% 3.3% Regional brands 22.3

• 1.8%
• 2.0%

Total 92.2 14.5% 1.8%

45.9%

75.8% 24.2%

Revenue by region

Revenue development at constant currencies (in €million)

*) based on FY 2017/18 revenue FY 2017/18

• 1.6

+14.5% 0.3 92.2 Δ Foreign Exchange Impact 0.7 Δ North America 1.7 Δ Emerging Markets Δ Asia - Pacific Δ Western Europe 10.7 FY 2016/17 80.5

• Western Europe reported 27.8% growth, mainly as a

result of the addition of Passoã

• Global brands achieved good growth in the Netherlands

and the UK

• The strong market share of the regional brands in the

Dutch domestic market was maintained

52.1%

Western Europe

Revenue*

• Asia-Pacific reported 1.3% growth for the full year after

posting a slight decline in revenue in H1

• Passoã contributed to the growth, mainly in Japan
• Organic revenue was slightly down mainly as a result of

still challenging circumstances in Indonesia Asia-Pacific

17.6% Revenue*

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Revenue (in €million) Reported FY 2017/18 Reported FY 2016/17 Reported growth % Organic growth % Western Europe 48.0 37.6 27.8% 1.4% Asia - Pacific 16.2 16.0 1.3%

• 4.9%

North America 16.6 16.1 3.1% 7.0% Emerging Markets 11.3 10.8 4.8% 5.6% Total 92.2 80.5 14.5% # 1.8%

Revenue by region

Revenue development at constant currencies (in €million)

*) based on FY 2017/18 revenue

• In North America the growth path continued with 7.0%
• rganic growth
• US reported strong organic growth of 11.5% driven by

growth for Bols Liqueurs, Bols Genever and Damrak Gin as well as pricing adjustments

• Retail position Bols Liqueurs was strengthened
• In Canada heavy price competition resulted in lower

revenue of Vodka, whereas sales of Passoã in Puerto Rico were impacted by the hurricanes North America

Revenue*

• Emerging Markets region achieved good growth of

5.1%, attributable to the strong performance of Eastern Europe (mainly Russia)

• New markets, including the Caucasus, also showed

good growth

• The Caribbean was impacted by the hurricanes and

revenue in Central America declined

• In the Southern part of Africa significantly lower sales
• f concentrates were recorded

Emerging Markets

Revenue* 18.0%

12.3%

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FY 2017/18

• 1.6

+14.5% 0.3 92.2 Δ Foreign Exchange Impact 0.7 Δ North America 1.7 Δ Emerging Markets Δ Asia - Pacific Δ Western Europe 10.7 FY 2016/17 80.5 Revenue (in €million) Reported FY 2017/18 Reported FY 2016/17 Reported growth % Organic growth % Western Europe 48.0 37.6 27.8% 1.4% Asia - Pacific 16.2 16.0 1.3%

• 4.9%

North America 16.6 16.1 3.1% 7.0% Emerging Markets 11.3 10.8 4.8% 5.6% Total 92.2 80.5 14.5% # 1.8%

Gross profit margin increased by 190bps to 62.0%

58.0% 59.8% 74.3%

Gross profit development (in €million)

60.1% 62.0%

Reported gross margin

Gross margin development (organic)

Δ Western Europe 8.1 FY 2016/17 48.4 0.2 57.1 Δ Emerging Markets 0.1 Δ Foreign Exchange Impact

• 1.3

Δ North America 1.7 Δ Asia - Pacific +18.0% FY 2017/18

26

64.2%

Total 70bps Western Europe 160bps Asia - Pacific 10bps North America 340bps Emerging Markets

• 430bps

25.6%

EBIT up 29.6%, driven by growth of global brands

EBIT development (in €million)

22.7%

Reported EBIT margin

30.6% 69.4% 18.2 FY 2016/17 excl. One-offs

• 1.2

FY 2016/17 0.7 Badwill & transaction costs Δ Global brands 7.7 23.6 Δ Unallocated Δ Foreign exchange effect

• 0.5

Δ Regional brands

• 1.3

FY 2017/18 18.9

Highlights EBIT for the full year 2017/18 came in at € 23.6 million (2016/17: € 18.2 million) Currency effects had a limited negative impact of € 0.5 million on EBIT as the company was still benefiting from favourable hedging contracts As a result of the addition of Passoã, total overhead as a percentage of revenue decreased from 16.5% to 15.5% The EBIT margin rose by 290 bps from 22.7% last year to 25.6% in 2017/18 27

23.4%

Reported (in €million) FY 2017/18 FY 2016/17 Reported growth Organic growth* Revenue 92.2 80.5 14.5% 1.8% Cost of sales

• 35.1
• 32.1

9.3% 0.0% GROSS PROFIT 57.1 48.4 18.0% 3.1%

Gross margin % 62.0% 60.1% ## 200.1%

D&A expenses

• 34.5
• 32.4

6.5% OPERATING PROFIT 22.6 16.0 41.3% 43.1%

Operating margin % 24.5% 19.9% ## 460.1%

Share of profit of JVs, net of tax

1.0 2.2

• 55.3%

EBIT 23.6 18.2 29.6% 36.6%

EBIT margin % 25.6% 22.7% ## 464.4%

Finance costs

• 3.5
• 2.9

20.4% PROFIT BEFORE TAX 20.1 15.3 31.4%

Income tax expense

0.3

• 0.2
• 216.3%

PROFIT FOR THE PERIOD 20.4 15.1 35.5%

Earnings per share

1.63 € 1.21 € 35.5%

Taxation

Highlights

Income taxes included one-off tax benefits in both years, € 5.6 million in 2017/18 and € 3.2 million in 2016/17 The one-off in 2017/18 is mainly due to the positive impact on the company’s deferred tax liabilities of upcoming reductions in the French corporate tax rate Excluding the one-offs, the effective tax rate increased to 26.5% (last year 23%) as a result of incorporation of Passoa and lower share of profit of JV's 28

* at constant currencies, excluding one-off items and the first eight months of Passoã in 2017/18

1.64 €

Reported (in €million) FY 2017/18 FY 2016/17 Reported growth Organic growth* Revenue 92.2 80.5 14.5% 1.8% Cost of sales

• 35.1
• 32.1

9.3% 0.0% GROSS PROFIT 57.1 48.4 18.0% 3.1%

Gross margin % 62.0% 60.1% ## 200.1%

D&A expenses

• 34.5
• 32.4

6.5% OPERATING PROFIT 22.6 16.0 41.3% 43.1%

Operating margin % 24.5% 19.9% ## 460.1%

Share of profit of JVs, net of tax

1.0 2.2

• 55.3%

EBIT 23.6 18.2 29.6% 36.6%

EBIT margin % 25.6% 22.7% ## 464.4%

Finance costs

• 3.5
• 2.9

20.4% PROFIT BEFORE TAX 20.1 15.3 31.4%

Income tax expense

0.3

• 0.2
• 216.3%

PROFIT FOR THE PERIOD 20.4 15.1 35.5%

Earnings per share

1.63 € 1.21 € 35.5%

* at constant currencies, excluding one-off items and Passoã

Normalised net profit was up 20.1% to € 14.7 million

Highlights

Earnings per share of € 1.64 Dividend of € 0.60 per share, up 5.3% Number of shares outstanding are 12,477,298 29 Normalised net profit increased 20.1% to € 14.7 million (EPS of € 1.18) compared to normalised net profit of € 12.3 million in 2016/17 (EPS of € 0.98)

1.64 €

Balance sheet

Net working capital € 14.4 million, higher due to higher inventory and higher payables end of last year, following inclusion of Passoã

Highlights

30 Other non-current liabilities include an assumed debt of € 68.2 million representing the call/put option related to Passoã The net debt to EBITDA ratio is 2.8 (the net debt to EBITDA ratio including the assumed debt was 4.3 at 31 March 2018) The decrease in DTL is mainly the result of upcoming reductions in the French corporate tax rate

Deferred tax

ASSETS (in € million) FY 2017/18 FY 2016/17 Intangible assets 306.9 306.5 Investments in joint ventures 7.4 7.8 Other 2.6 2.5 NON-CURRENT ASSETS 316.9 316.8 Cash and cash equivalents 12.4 8.4 Net working capital 14.4 12.7 Other 0.1 0.3 TOTAL 343.8 338.2 Funded by FY 2017/18 FY 2016/17 LIABILITIES & EQUITY (in € million) Loans and borrowings 43.9 48.7 Deferred tax liabilities 43.1 46.5 Other 68.8 67.8 NON-CURRENT LIABILITIES 155.8 163.0 Loans and borrowings 4.0 4.0 Derivative financial instruments 0.4 0.4 CURRENT LIABILITIES 4.4 4.4 EQUITY 183.6 170.8 TOTAL 343.8 338.2 Deferred tax FY 2017/18 FY 2016/17 (in €million) Deferred tax assets 5.3 8.0 Deferred tax liabilities (48.4) (54.5) Total (43.1) (46.5)

Continued strong cash flows as a result of our asset- light model

Highlights

Income taxes CAPEX 0.4 Operating profit FY 2017/18

• 3.6

FOCF FY 2016/17 FOCF FY 2017/18 18.7 Dividends from JV 17.5 Depreciation 22.6

• 0.5

+6.9% 1.4 Working capital

• 1.7

Cash flow development (in €million) 31 Cash flows were used to pay dividends (€7.6 million), and reduce the net debt position (down €8 million) as well as pay interest

Important aspects of Lucas Bols’ currency effects

32 JPY exchange rate USD exchange rate AUD exchange rate GBP exchange rate

Highlights

49.7% of revenue is denominated in foreign currencies in 2017/18 (compared to 50.9% in 2016/17) Lucas Bols has a policy of hedging 60 - 80% of its net cashflows in foreign currencies at the start of the financial year In 2017/18, as a result of the stronger euro, foreign currencies had a negative impact of € 1.6 million on revenue and € 0.5 million on EBIT Taking into account the foreign currency positions already hedged and assuming the current level of the euro, all foreign currencies combined are expected to have a negative impact of around € 1.2 million on EBIT in 2018/19

• vs. the 2017/18 rates

EBIT exchange rates 2018/19

• utlook

EUR/USD 1.21 EUR/JPY 131.48 EUR/AUD 1.56 EUR/GBP 0.89

Reported (in €million) FY 2017/18 FY 2016/17 Reported growth Organic growth* Revenue 92.2 80.5 14.5% 1.8% Cost of sales

• 35.1
• 32.1

9.3% 0.0% GROSS PROFIT 57.1 48.4 18.0% 3.1%

Gross margin % 62.0% 60.1% ## 200.1%

D&A expenses

• 34.5
• 32.4

6.5% OPERATING PROFIT 22.6 16.0 41.3% 43.1%

Operating margin % 24.5% 19.9% ## 460.1%

Share of profit of JVs, net of tax

1.0 2.2

• 55.3%

EBIT 23.6 18.2 29.6% 36.6%

EBIT margin % 25.6% 22.7% ## 464.4%

Finance costs

• 3.5
• 2.9

20.4% PROFIT BEFORE TAX 20.1 15.3 31.4%

Income tax expense

0.3

• 0.2
• 216.3%

PROFIT FOR THE PERIOD 20.4 15.1 35.5%

Earnings per share

1.63 € 1.21 € 35.5%

IFRS 15 and 16 update

33 IFRS 15 update

• Lucas Bols has completed an initial assessment of the potential

impact of the adoption of the new revenue recognition standard IFRS15 Revenue from Contracts with Customers

• IFRS 15 is expected to primarily trigger the reclassification of certain

advertising and promotional expenses as reduction of revenue, with an estimated mid-single digit percentage impact on revenue

• Overall we currently do not expect any material effect on the

presentation of the company’s financial position, results of operations as a whole, or earnings per share IFRS16 replaces existing guidance on lessee accounting for leases. The most significant impact identified is that the company will recognise assets and liabilities for its operating leases of real estate

IFRS 15 impact

1.64 €

FY 2017/18 1. Lucas Bols at a glance 2. Highlights 3. Operational highlights 4. Financials 5. Outlook

34

Outlook

Lucas Bols has a hedging policy in place. Taking into account the foreign currency position already hedged and assuming the current level

• f the euro, foreign currencies are expected to have a negative impact of around € 1.2 million on EBIT in 2018/19 vs the 2017/18 financial

year. Lucas Bols USA relaunched the Nuvo brand in the spring of 2018, which will contribute to the revenue growth of the global brands in the

• US. Given the initially higher A&P investments behind Nuvo and the royalty payments, the contribution to EBIT will be limited while the

impact on Lucas Bols’s earnings per share is expected to be neutral to slightly positive in the short term. The underlying market dynamics in the global cocktail market remain healthy. We continue to believe in the potential of our global brands in all four regions around the world and focus on further growing our global brands, in line with our strategy. We continue to invest in A&P for global brands that show strong growth potential in various strategic markets. 35 We will continue to monitor potential add-ons of brands which can be integrated into our platform.

Q&A