Welcome to the 2022 First Quarter Results Announcement Conference Call for Budweiser Brewing Company APAC Limited. Hosting the call today from Budweiser APAC is Mr. Jan Craps, Chief Executive Officer and Co-Chair of the board, and Mr. Ignacio Lares, Chief Financial Officer. The results for the three months ended March 31, 2022 can be found in the press release published today, earlier today, and available on the Hong Kong Stock Exchange's and Budweiser APAC's websites. Before proceeding, let me remind you that some of the information provided during this results call, including our answers to your questions on this call, may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions and involve known and unknown risks, uncertainties, and other factors beyond our control. It is possible that Budweiser APAC's actual results and financial conditions may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Budweiser APAC is under no obligation to and expressly disclaims any such obligation to update the forward-looking statements as a result of new information, future events, or otherwise. For a discussion of some of the risks and other important factors that could affect Budweiser APAC's future results, see risk factors in the company's prospectus dated 18 September 2019, the 2021 annual report published, and other documents that Budweiser APAC has made public. I would also like to remind everyone that the financial figures discussed today are provided in U.S. dollars, unless stated otherwise. The percentage changes that will be discussed during today's call are both organic and normalized in nature, and unless otherwise stated. Percentage changes refer to the comparisons with the same period in 2021. Normalized figures refer to performance measures before exceptional items which are either income or expenses that do not occur regularly as part of Budweiser APAC's normal activities. As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, EBIT, and EBITDA on a fully reported basis in the press release. Further details of the 2022 first quarter results can be found in the press release published earlier today. It is now my pleasure to pass the time to Mr. Jan Craps. Sir, you may begin. Thank you, Anna, and good morning, everyone. Thank you for joining our earnings call. I hope you're all safe and well. In China, after a healthy first two months of the year, COVID restrictions disproportionately impacted our business in March, and we quickly reallocated resources to minimize the impact on COVID-affected regions. The pressure we faced in China was partially offset by a strong performance in South Korea, which was driven by market share gains in both the on-premise and in-home channels and supported by an improved business environment. Together in Q1, we were able to deliver top and bottom line growth and reported the highest quarterly EBITDA margin since our IPO. That said, our volume declined by 2.7% as the renewed restrictions from mid-March significantly impacted the business environment in China. However, ongoing premiumization, along with revenue management initiatives, resulted in revenue per hectoliter growth in all of our key markets. Before I hand it over to Iggy to take you through our financial performance, I will take a few moments to provide more color on each of our key markets. In China, our volume declined by 4.3%. The COVID restrictions from the second half of March significantly impacted the business environment in the country, leading to a low single-digit industry decline in the quarter based on our estimates. We were disproportionately impacted due to the channel and geographic mix. In addition, due to the Chinese New Year occurring two weeks earlier this year, we also faced a tough comp from the phasing of sales. However, we continue to execute on our strategy of premiumization. Our premium and super premium brands both increased their volume weight in our portfolio, with Budweiser growing high single digits and super premium growing strong double digits compared to the pre-pandemic levels. In addition, our EBITDA was in line with the same period last year and above pre-pandemic levels as well. We also continue to progress on the digitization front. During the first quarter, our BEES platform expanded its reach into more than 28 cities, connecting with more than 20,000 customers by the end of March. Our brewery footprint across the country ensured business continuity, thanks to the unparalleled dedication of our colleagues in this challenging time. South Korea, we accelerated our commercial momentum and delivered robust market share gains in both the on-premise and in-home channels. COVID restrictions have been gradually eased in the first quarter by the government's Living with COVID policy, which further improved operating conditions across the country. As a result, our volume grew by mid-single digits. Revenue per hectoliter increased by low single digits, leading to double-digit revenue growth. In addition, since April 18, all the restrictions in the on-premise channels have been lifted in the country, and we are glad to see that people have gradually returned back to normal life with strong consumption sentiment. We also improved our operational leverage, supported by a strong top line recovery. This led to a strong double-digit EBITDA growth with a solid margin expansion. In India, the business environment further improved as the number of COVID cases and corresponding restrictions significantly reduced. We continue to outperform the industry with our premium and super premium portfolio, recording strong double-digit growth. We developed our non-alcoholic beer segment catered to local consumers, adding new flavors with the launch of Budweiser Zero Green Apple and Hoegaarden Rosée 0.0%. Now, I would like to pass it over to Iggy to take you through our financial results in the first three months of the year. Over to you, Iggy. Thank you, Jan. Good morning, everyone. As Jan mentioned earlier, the COVID restrictions in China pressured our volume, which declined by 2.7% in APAC, despite a strong performance in other markets. We expanded revenue per hectoliter in all key markets, driven by continued premiumization as well as revenue management initiatives. Revenue per hectoliter grew by 4.3%, and revenue grew by 1.5% in the quarter. Overall, EBITDA grew by 7.6%, and our EBITDA margin expanded by 198 basis points, reaching the highest EBITDA margin since our IPO. Cost of sales increased by 3.1% and by 6% on a per hectoliter basis, mainly due to commodity price escalations and a higher proportion of premium sales. This was partially offset by efficiency initiatives and supported by our hedging policy. SG&A decreased by 7.9% due to agile investment reallocation and cost management initiatives in light of the recent COVID restrictions in China, coupled with a softer comparable in South Korea from commercial investment phasing in the first half of last year. Normalized profit attributable to equity holders increased to $304 million, a 28.8% improvement versus the same period of last year. The profit attributable to equity holders was $302 million. Before we open the floor for Q&A, let me briefly provide some additional details to contextualize the key financials in China, given the impact of COVID restrictions in the quarter. Volume declined by 4.3% due to the stricter restrictions in the last two weeks of March. Revenue per hectoliter increased by 3.2%, driven by ongoing premiumization as well as proactive revenue management initiatives. Despite the impact of COVID restrictions, both revenue and EBITDA landed above pre-pandemic levels. With that, I'll pass it back to Anna for the Q&A. As always, Jan and I are here to answer any questions you may have. Thank you. The floor is now open for questions. Please press zero one to ask a question and wait for your name to be announced before you ask the question. In the interest of time, we would also ask participants to limit themselves to two questions, and please ask your question one at a time. Again, that's zero one on your telephone keypad. Your first question is from Lillian Lou, who's from Morgan Stanley. Your line is now open, Lillian. Please go ahead. Yeah, thanks a lot. Thanks a lot, Jan and Iggy, and I hope you are all well in Shanghai. I have two questions, both are about China. Maybe I will ask the first one first. Obviously, we all focus on the near-term impact of the COVID, especially in some areas, which appear to be significant, as both Jan and Iggy just mentioned. We wanted to understand, especially in March and April, how big it was on the different channels, especially on the on-trade channel. At the same time, how is off-trade channel trending? Also by region, how do we see the things moving in different region, especially eastern region with Shanghai is still experiencing the lockdowns and also southern area where things seems to be better. Any color on this? Thank you. I will ask the second- Thank you, Lillian. How How you doing? Last, second question later. Yep. Sure. No worries. Thank you, Lillian. I hope you're doing well and good morning. So thank you for your question. Let me maybe try to give you some color and a couple of numbers that we can share on the recent months, right? As we mentioned, we started the year with healthy sales volumes, and that despite the kind of the CNY phasing, which was two weeks earlier. When we got into March, I would say the COVID restrictions really started to impact the business environment more significantly, I would say as of mid-March. When we look at the total quarter, the impact that started mid-March, actually, in our estimates, made the industry decline low single digits%, in Q1. Of course, we would be disproportionately impacted because as you probably followed, both from a channel and a geographic perspective, but APAC is more situated in the channels and the provinces that were more impacted than average in China. Our volume declined 4.3%. From March on, the provinces where we have a stronger presence, so we're talking about Guangdong, Fujian, Jilin, Heilongjiang. They were pretty heavily impacted. When we look at nightlife, we estimated around 100 cities, nightlife was fully closed at the end of March. When we look at the opening rates, just for information, right, we estimate that at the end of March about 42% of nightlife was open, about 86% of Chinese restaurants was open, and about 96% of the in-home channel. Off-trade would have been opened at the end of March. If we would just isolate the last two weeks of March, which I think is an interesting indication for you to get a sense of the numbers, our total sales to retailers, so the STRs as we call it, they dropped high teens% in the last two weeks of March. Premium Super Premium would be impacted more heavily just because of the channel and the geo mix with all the restrictions ongoing. When we take a look at April, to again share some numbers. I would say that cities like Shanghai, Heilongjiang, and provinces like Heilongjiang and Jilin they're still under restrictions. Many other cities are also going through some sporadic lockdowns. If we look at the end of April, it's pretty similar to the end of March. We estimate about 38% of nightlife was reopened, and about 82% of Chinese restaurants was reopened, and also 96% of the in-home channel. However, on the better news side, I would say that in the regions where the lockdowns were lifted, we did see gradual improvements in the reopening rates. For example, especially Guangdong recently in the last couple of weeks and Fujian in the last week, we do see the reopenings accelerating, and we see consumer demand coming back. Obviously these are important provinces for us, so that's more recent in the last one or two weeks. At the same time, you would have seen in our press release that, you know, of course, COVID continues to bring uncertainties, but we also have now more than two years experience in this, right? Our teams have been very agile. They reallocated commercial investments across channels and across provinces, depending on, you know, where the impact would be. If you look at, for example, the e-commerce channel, we actually gained market share in the e-commerce channels because we reallocated resources there. This kind of cost reallocation and just overall management, I would say, despite the challenging environment, we still achieved the highest EBITDA margin in China since also in China, so APAC overall, but also in China, since IPO, because of this commercial agility and the cost efficiency initiatives, right? I hope these kind of numbers give you a little bit of context, Lillian, on your question. Yeah, thanks, Jan, that's very helpful. Second question is also about China. I think in addition to revenue or sales impact, wanna understand a bit further about the whole operation disruption from all this lockdown in different areas, especially we all understand that there's logistics bottleneck. How do we see the sequential changes since April that they actually also improve? Also, how big was the logistics impact to the operation at the peak? I think probably at the end of March or early April. Thank you. Yeah. Thank you, Lillian. I think different than many other companies, when I talk to some peers of different industries. I think their main focus is on logistics and supply chain. They've seen a lot of disruption in their businesses. When I look at our business, actually, thanks to our strong business footprint across the country, we actually ensured quite a good business continuity. As you might remember, we have about 30 breweries across China, and we cover different geographies very well, and we're typically located quite close to our wholesalers. Most of our breweries are equipped with cross-brewing capabilities and that allows us not only operational efficiency, but also it minimizes the impact of COVID restrictions as our teams work together with local governments and just with our wholesalers and the supply chain to find solutions for the many different potential problems that can exist. They also work with our suppliers to find different sources of our materials. They've actually, with all their hard work and their actions, been able to essentially minimize any impact of COVID restrictions on our footprint. We did need to put a couple of breweries in closed loop management so that we could ensure just the freshness of our beer but also, you know, guarantee the supply service levels. We've been pretty much safeguarded from any significant disruption in the supply chain. Our focus is mostly on, you know, the sales channels and the consumer demand. Okay. That's good to know. Thanks a lot, Jan, and stay safe. Thank you, Lillian. Appreciate it. Thank you, Lillian. Your next question is from Xiaopo Wei, who's from Citigroup. Your line is now open, Xiaopo. Please go ahead. Hey, morning, Jan and Iggy. I have two questions as well for China. I will ask one by one. The first question, Budweiser APAC has been very good in agilely react to the market dynamics. As Jan just mentioned that the COVID situation is very fluid in China. Given the current development, will the company continue to implement a like-for-like ASP hike in the rest of the year? That's the first question. Yeah. Thank you, Xiaopo, and good morning to you. I hope you're doing well. As to your question, let me maybe answer a little bit more forward-looking, right? Because on Lillian's question, I kind of gave the last couple of months' feedback. When we look forward, you know, we do expect several regions in China to be under COVID restrictions as a dynamic zero COVID policy has been confirmed by the central government as a key direction. With this current dynamic zero policy, we do believe that there will continue to be sporadic lockdowns, but with shorter periods in the future. We expect them to continue at a regional level in different cities, but we expect them to be sporadic, and we expect them to be shorter, right? I would say Shanghai is probably the exception together with Jilin versus what we see in many other cities. When we look in Guangdong, for example, probably the Shenzhen and the Guangzhou experience was much shorter, and they were able to essentially go back to dynamic zero COVID at the community level much quicker than the other provinces were able to do. What we see as well, based on our past two years' experience, is that typically we expect consumer demand to recover relatively quickly once the restrictions are lifted. That's what we've seen in the last couple of years. On the short term, we do expect some sporadic lockdowns to continue, but shorter periods, and different by city. Of course, on the midterm and the long term, we remain optimistic on China, obviously because there is such a big room for premiumization with the middle class households in China expected to quadruple in the next, let's say 7-8 years, by 2030. We see our business momentum continue. We continue to see a very big potential for our portfolio and our route to markets, that's completely structurally intact, in our perception. When you look at the price increases, we always kind of evaluate closely pricing opportunities, and that happens region by region and channel by channel. If you remember last year in the fourth quarter, we already increased prices early on the core plus segments. That was in November. November, December, it was ranging from 3%-10%. We also increased price on Budweiser in the month of December. At the time was close to the CPI as a benchmark. In Q1 this year, we actually just executed a nationwide price increase on the core and value segment, which we usually do in that period, typically first of April kind of periods. We executed it along March and April. We executed a mid-single digits increase on the core and value segment across China. We do just wanna kind of focus on premiumization is, as you probably know, Xiaopo, is more important as a driver of top line growth in China than rates. We do expect premiumization to continue to be the primary driver of top line growth and our financial performance. Even with that, we did take significant price increases in the last 4-5 months, I would say. You probably would have seen that even in Q1 when we had this impact on nightlife and restaurant venues because of the COVID restrictions, we still grew revenue per hectoliter by 3.2% in China. I hope that answers your question, Xiaopo. Thank you. A great color. Appreciate it. The second question is about competition. As you already seen some reopening, like you mentioned in Guangdong, Fujian. There are still new lockdown in Beijing. I mean, the competition landscape is gonna be more sophisticated than previous years. What's the company's strategy on A&P investment? Did you see any price competition in the market which is opening? Thank you. Yeah. Thank you for that question, Xiaopo. I mean, basically, we remain very agile in our commercial investments, and we reallocate resources very quickly between channels and geographies. Our team kind of had to become quite specialized in that in the last couple of years. For example, we typically prioritize in-home channels, of course, when we see restrictions popping up in different cities. Typically, in-home remains open in most regions, right, with some exceptions. Our first quarter sales and marketing% of net revenue was actually lower than in Q1 last year. That is because we quickly saved and reallocating investments across channels and geographies. Of course, in Q2, we do expect, as you would normally do, sales and marketing to ramp up a little bit, because we gear up for summer, right? Summer is a very important period for us. As you probably know, April is one of the smaller months within Q2. We do expect, with the reopening to happen hopefully soon that we will still have kind of a good situation there. Of course, this helps us as well just reach these high EBITDA margins in China, because this cost management continues to apply our cost connect win approach where we do reduce indirect overheads, but we also reinvest the savings in our commercial plans. On pricing, as I mentioned, we did take price in different channels and segments and geographies, basically across all of our price tiers in our portfolio. On the competitive pressure, we have not seen any significant competitive pressure different than before COVID restrictions would have been implemented. I would say a relatively normal environment. No question, Xiaopo. Great. Thank you so much, and hope you are well in Shanghai. Thank you. Thank you. Appreciate it. Thank you, Xiaopo. Your next question is from Clement Chu from DBS. Your line is now open, Clement. Please go ahead. Thank you. Thank you, Benjamin, for taking my question. My first question is about China. Regarding our expansion blueprint of premium and super premium products in various Chinese cities, could we have some more color on our latest progress? Have we seen market share improvement in these cities? The recent COVID disruption has it changed our plans or targets? I'll ask my second question later. Thank you. Sure. Thank you, Clement. Good morning to you. As you probably know, our expansion strategy is pretty detailed, right? Because we take into account regions with high consumer demands based on our market maturity model. In our expansion playbook, we really tailor our strategies and also the toolkits city by city. In previous calls, I think we expanded on our success in expansion cities last year, where Budweiser was expanded in more than 50 cities, and we got about 30% growth in these cities. Very similarly for super premium, we expanded in more than 30 cities, and we achieved also close to 30% growth in these cities. When we look at 2022, in the full-year results call, we disclose that for Budweiser, we are targeting more than 70 cities for expansion and for super premium, more than 45 cities expansion. We did not change these targets, right? I mean, given we only see a short-term impact of the COVID restrictions, we remain committed to our strategy and our investments into China, because we believe we are uniquely positioned with our portfolio and go-to-market and expansion strategy to really be successful in this market. If you look at Q1, of course, you would expect some impact of the COVID restrictions, even if we continued to be resilient in our expansion strategy. If you look at Budweiser did grow volume in all kind of in the totality of the expansion cities. When we look at the cities that were not impacted by COVID, of course, Budweiser continued to grow strong double digits. Very similar with super premium, continued to grow double digits in the markets that are not impacted by COVID. Expect to see a short-term impact where there is restrictions, obviously because of the channel structure and geographic impacts. We do see a very healthy continuation of the reaction of the market on our expansion where there is no significant COVID restrictions. We continue to believe in this strategy, and we are quite nimble to react when restrictions get lifted to continue to invest. I hope that answers your question, Clement. Yeah. Thank you, Jan. That's very clear and helpful. My second question is about our vision of 20% volume contribution from our low and non-alcoholic beer by 2025. What is the achievement that we have seen so far? Are we expecting a faster growth of such segment in areas like India, 'cause given its special customer preference? What would be our strategies for different APAC regions? Thank you. Sure. Thank you, Clement. Actually, you're referring to one of our commitments in the smart drinking portion of our ESG strategy. Within ESG, we have eight different priorities, strategic priorities. Like we shared in the webcast last week, one of the eight is called smart drinking. Within smart drinking, we took different commitments. You're right, one of our commitments is to have more than 20% of our total volume contribution coming from low and non-alc beers by 2025. Basically, if you look at our portfolio, we see the non-alc beer markets continue to evolve rapidly. When you look at our current offerings, we already have many non-alcoholic and low alcoholic products in our portfolio. Some examples across Asia would be Budweiser Zero, Cass 0.0, Hoegaarden 0.0. They've been launched in several of our markets. You're right, we have a special attention on this segment in India, because this is a country with a higher demand for no and low alcoholic products. We tailor our offerings for the local demand. When you look at Q1, we already launched Budweiser zero two years ago and Hoegaarden 0.0 last year. Actually in the first quarter of this year, as you might know, the second quarter is actually the peak season in India as an industry. We launched before the peak in Q1 new flavor options for Budweiser Zero, which is a green apple flavor. For Hoegaarden 0.0, we launched a rosé flavor, which is our most successful kind of fruity flavor within the Hoegaarden portfolio. We also went outside of beer, right? In last year, end of last year, we launched a non-alcoholic energy drink with Budweiser Beats, which is also going very well. As you might know, non-alcoholic offerings in India, they get a much wider access to distribution. Because for alcoholic products, there is only about probably around 55,000 stores in the whole country that we are selling alcoholic beers in. The zero alc actually gives an opportunity to get distribution in many more stores because of regulation. Of course, if we look at South Korea, we also have some important products there, and a larger bet this year. We launched Cass 0.0 last year. It is actually sold in one of the biggest e-commerce channels in the country, in Coupang, and we already sold more than 2 million cans there in the last eight months since launch. These products are also exempt from local excise tax, which is supporting the profitability of this segment as well. Of course, next to NABLAB or no- and low-alc products, we also have other commitments in terms of raising awareness of alcohol responsible consumption, no drink, no driving. We also continue to improve the alcohol literacy on labels to avoid any harmful consumption. I hope that answered your question, Clement. Yeah, surely. Thank you, and thanks for the sharing. That's very insightful. Thank you, and take care. Thank you so much. Thank you, Clement. Your next question is from Lin Wu, who's from Bank of America. Your line is now open, Lin. Please go ahead. Hi again, Iggy. Thanks for taking my questions. Hope you're doing well. I'd like to focus my two questions on South Korea. The first one is on recovery momentum. We had a very strong performance in South Korea in Q1 and gained market share in both in-home and on-premise channels, which is very encouraging. I wonder if you could maybe share with us a little bit more about the observations over the most recent two months on the pace of demand recovery, especially after COVID policy eased significantly in March. What's the consumption sentiment like on the ground, and how is it impacting our volume growth both in-home and on-premise, as well as impact on revenue per hectoliter? How are we seeing industry demand versus pre-COVID level, and are we expecting demand to potentially be back to normal in the coming few quarters? How are the competitive dynamics also changing amid the reopening? This is my first question. I'll pause here and ask my second one later. Sure. Thank you, Lin, and good afternoon. I hope you're doing well. I'm actually quite excited to talk about South Korea, right? I mean, I have been since several quarters, but I think this quarter we really see a confirmation of the underlying momentum now combined with industry recovery really delivering strong results as we anticipated. If we look at the COVID situation in South Korea, it has significantly improved in the first quarter of this year. As you might have followed, daily COVID cases in South Korea, they peaked over 600,000 cases per day in mid-March, so it was a very high number of cases, right? Since then it has been declining since mid-March. Today, in the last week is around less than 50,000 cases per day. But in parallel, the government in South Korea has continued to relax the restrictions. As they were going up in the peak in the month of March, they continued to relax the restrictions, let's say hour by hour almost in terms of opening time or closing time of the on-premise. In their new living with COVID policy, it really facilitated further easing of the social distancing restrictions, and it has improved significantly our operating conditions to the point that actually recently on April 18, all the COVID-19 restrictions have been lifted in the on-premise. Today since two or three weeks now, nightlife and restaurant venues have opened without any restrictions on operating hours. There is also no limit anymore on the number of people gatherings. Actually since this week, May second, there's also no more any mask requirement in the outdoor spaces. Really, let's say almost back to normal from a restrictions perspective in South Korea. As a result, the industry has improved in Q1 versus last year. We do see strong consumer sentiment. To your question on pre-COVID level, it is still lower than pre-COVID level just because of the timing of the restriction easing, right? Which kind of happened throughout the first quarter and up until mid-April. Which actually gives us even better reasons to believe for the next upcoming quarters there's quite some room to continue to improve and get back with the industry to pre-COVID levels. If we look at our commercial momentum and competitive environment, we see a strong continued momentum like we've been seeing the last number of quarters, that the underlying business momentum is very strong. So we continue to gain share, both in the on-premise and in the in-home channels, mostly led by All New Cass and Hanmac innovation. We remain very optimistic on the strong business momentum we are seeing in South Korea currently. I hope that answers your question, Lin. Yes. Thanks a lot again. That's very encouraging to hear. My second question is related to the trend of revenue per hectoliter and more specifically on price hikes. We raised prices in South Korea for premium products in January and for Cass in early March. I wonder how the market is reacting to our price hike so far, including the progress of price pass through to consumers, as well as the impact on the sales volume of these products. Have we seen any changes to our channel inventory levels? Related to that, how should we think about the full year benefit from price adjustments versus potential challenges from channel mix shift? In terms of channel, what's our revenue or volume share from on-premise last year, and what's our expectation from the for this year? Thank you. Thank you, Lin. I think it's another reason to be kind of happy to talk about South Korea this quarter because, you know, in the cost inflation environment that we were in in terms of commodities, we were able to take price in South Korea. Revenue per hectoliter grew by low single digits in Q1, mostly driven by revenue management initiatives because we see price increase. We already took price in premium, as we mentioned last call, in the first of January this year. We took about 10% in our premium brands in the in-home channels. In the quarter, Q1 this year, we also took price on the core segment, by 7.7% for our domestic brands, effective from the eighth of March. I would say probably just under half a month of price increase impact was embedded in the first quarter net revenue per hectoliter. The impact will be more significant in our financials in the coming quarters. Of course, it's quite relevant because it's been nearly six years since we have taken price on our domestic beer brands. It's been an important kind of movement. At the same time, the Korean government continue its annual CPI excise adjustment system. The new excise tax went up by 2.5% effective on the first of April. If you look at the last two years, you're right that channel mix is important in South Korea. Of course, it was kind of the one silver lining we had when there were COVID restrictions is that net revenue per hectoliter in South Korea is actually benefited from a channel mix perspective because in-home channel typically increases and the can mix is of course higher in in-home, and it has a higher net revenue per hectoliter than the big bottles that are typically sold in the on-premise. As the channel weight starts to return to normal, as the restrictions are lifted, we will no longer have this channel mix benefit in South Korea. We are... You know, if you look at the revenue management initiatives that I just discussed, you know, which we implemented in the first quarter, they will benefit the net revenue per hectoliter this year and more than offsets any channel mix deficit we will get in the upcoming quarters. That's kind of the color I can give you on ASP in South Korea, Lin. I hope that answers your question. Yeah. Thanks a lot, Jan. That's very, very helpful. I really appreciate it. Take care and all the best. Thank you so much. Bye-bye, Lin. Thank you, Lin. Your next question is from Leaf Liu from Goldman Sachs. Your line is now open, Leaf. Please go ahead. Thanks a lot. Hi, Jan and Iggy. Firstly, congratulations on the solid first quarter results despite the tough environment. I've got two questions. One is specifically about Korea, and the next one is on group level. I will go one by one. We have seen a significant EBITDA margin expansion for Korea this quarter, but still way below the first quarter 2019's level. Given we are seeing continued pricing actions and product launch in Korea, in your view, what is the more normalized EBITDA margin level for Korea and also each region in the medium term? Thank you, Leaf, and good afternoon. I hope you're doing well. Let me maybe pass this question to Iggy. Iggy, can you take this one? Sure, Jan. Thank you. Hello, Leaf. Thanks for the question. While we don't provide guidance for EBITDA margin, I can say the following. Take a look at Q1 this year. Our EBITDA margin in South Korea expanded significantly. It's mainly from the improved operational leverage rather with the strong top-line recovery that Jan shared earlier, as well as of course the impact of commercial investment phasing in the first half of last year in 2021, following the launches of All New Cass and of Hanmac as well. While we don't disclose EBITDA margin for APAC East in the quarter, you can see that the overall margin for APAC expanded almost 200 basis points, 198 basis points to be precise, which was of course aided by the very strong performance of South Korea. I think beyond that, what I would say is we don't see any structural impediments to EBITDA margin expansion in APAC East. Operational leverage improvement as the industry continues to recover, as well as of course the full contribution of the recent price increases which Jan mentioned, which of course are not fully reflected in Q1 results given their timing, are both generally favorable drivers for continued EBITDA margin expansion. I hope that answers your question, Leaf. Thank you. Thanks a lot. That's clear. Secondly, in the view of continued global cost inflation, what measures we have been taking for cost control? Unit cost was up 6% in the first quarter. How to look at it from a full year perspective, taking into considerations our hedging policies and the cost link locking measures. Go ahead, Iggy. Yeah. Go ahead, Iggy. Thanks, Jan. Maybe I'll take this one. Maybe let me start with the fact that commodity price increases are not new, right? They've been increasing across many of the categories that are relevant to business, including aluminum, barley and, you know, carton and fiberboard for almost two years. As you can imagine, given our hedging policy, it gives us a bit of time to formulate types of initiatives which then help us to mitigate the impact of the commodity escalations. Maybe let me share some examples of the ways in which we've been mitigating cost-related risk thus far, right? We've executed many efficiency initiatives to manage consumption, and these are of course very helpful in offsetting the commodity price increases. We lowered our water usage by more than 20%. This is a 2017 baseline, which also of course supports our efforts in sustainability. We would have shared in our most recent press release that the Nanning Brewery is actually a reference in water usage, not only in China, but also across the global AB InBev network of breweries. We also focus on lowering energy and other fluid usage as well. There's many initiatives not only within our breweries, but also within our logistics footprint and upstream in partnership with our suppliers. Another group of cost controls would hinge on leveraging, of course, the global footprint of AB InBev. This gives us of course both the flexibility to adjust sourcing options as needed, but it also gives us the opportunity to ensure our global scale provides us the best price in market. As a result, as you mentioned, the cost on a per acre basis increased 6%, which was significantly lower than the double-digit increase we saw in most major raw material and packaging material categories. This was even despite the reduced operating leverage in China from the COVID restrictions as you mentioned earlier. While we don't provide any specific guidance for cost escalations, either at the group or regional level, we do see that the principles behind our cost of sales performance will continue to drive our results moving forward. Finally, not part of our cost control, but really important nonetheless, our continued premiumization and revenue management initiatives will play a critical role in our ability to offset increased raw and packaging material costs. I would say we've got confidence that we'll continue to deliver on both our best-in-class revenue management capabilities and our cost efficiencies, and this will help optimize our performance. I would say therefore, we don't see the current escalations in commodities as a structural headwind, but more a transient effect. Thank you for the question, Leaf. Thanks a lot for all the detailed color. Stay safe and take care in Shanghai. Thank you. Thank you. Thank you, Leaf. We have time for one more question. Our final question will come from the line of Melody Zhao, who's from CICC. Your line is now open, Melody. Please go ahead. Okay, thank you so much. Hi, it's Melody Zhao from CICC Food and Beverage team. Congratulations on such a surprising results. I have two questions, and I'm going to ask them one by one. My first question is, how is the progress on the digitization front? This is my first question. Good afternoon, Melody. Thank you for your question. I hope you're doing fine. On digitization, let me just remind the kind of key priorities we have there or the key purpose of this. We really wanna expand our commercial capabilities via digitization, essentially to sell more volume, connect with more customers, increase ROI and offer more services. These are really the four things we want to achieve. If we look at the BEES platform, which is our digital B2B platform, that we've been working on since the last 18 months, we are really getting ready to scale up. We actually took advantage of the last couple of months to accelerate the scale-up beyond what we initially planned. If you look at the trade marketing investment and the digital engagement module, which we had in market a little bit longer, we reached more than 500,000 customers who adopted these for their business. That's really a tool to help us invest in store level, but also check the execution in store via digital tools. If you look at a transactional functionality, which is for order taking and transactions, we are expanding the success of BEES platform from the two initial pilot cities, where we saw success in 2021. If we look at the end of March, we are now covering 28 cities already. On a couple of months' time, we really expanded already to a much larger number of cities. When we look at the end of March, we are now at about actually more than 20,000 customers that are placing their orders via the BEES platform, and we would expect that to scale up significantly in the next couple of quarters. Thanks for the question, Melody. Okay, thank you so much. My second question is about the overseas market. Do you have an update on your business in the India market? Sure. Thank you, Melody. In India in Q1, there was actually even an earlier surge of the COVID peak, which really peaked in, let's say end of January, early February, and since then has decelerated very quickly. Daily cases on, let's say 1.3 billion people is now less than 5,000 per day, across India. Really very, very low levels of COVID presence for the moment. As you might know, India has administered more than 1.8 billion COVID vaccines. They now cover more than 90% of the eligible population with two doses. As a consequence, we've seen significant reduction of restrictions in India throughout the first quarter, especially in March. We see further improvements in our business trends there, and also mostly driven by premiumization. When you look at our premium, super premium portfolio, these brands grew by strong double digits in India. Their volume weight continued to increase significantly in our total portfolio. If we look at Budweiser, which is the number one premium brand in India, it also outperformed the industry and continues to increase its market share. Overall, we achieved revenue and EBITDA growth in the quarter versus last year. When you look at the longer term in India, we remain very optimistic on the long-term potential of the India market, not only because of demographic advantage, but also just growing prosperity there, and then a lot of premiumization trends that are there in India, where we're very well-positioned with our premium, super premium leadership in India to capture the future growth in the markets with the higher margins in this segment versus average in the market. Thanks for the question on India, Melody. Okay, thank you so much for your detailed explanations. It was very helpful, and please take care in Shanghai. Thank you so much, Melody. Thank you. This concludes our Q&A session today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks. Thank you, Anna. The first quarter of this year shows our financial resilience and commercial agility. Although we are facing short-term impacts in China from COVID restrictions, both our underlying momentum and the potential we see in the market remain. Moreover, we are optimistic on the operating environment and our strong business momentum in South Korea and India. Our commercial strategies remain to lead and grow the category through premiumization and expansion, to leverage digitization to unlock new business opportunities, and to optimize our business to combine top and bottom line growth while leading ESG initiatives. Our greatest strength continues to be our people. Our culture of dreaming big and operating with ownership is more relevant and stronger than ever. We remain focused on our commercial strategies and our sustainability goals. Thank you very much and look forward to speaking to all of you very soon. Thank you. Thank you. This concludes today's results call. Please disconnect your lines. Thank you.