Welcome to the 2024 First Half Results Announcement Conference Call for Budweiser Brewing Company APAC Ltd. 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 six months ended June 30, 2024 can be found in the press release published earlier today and available on the Hong Kong Stock Exchange's and Budweiser APAC website. 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 condition 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 important factors that could affect Budweiser APAC's future results, the risk factors in the company's prospectus dated 18th September 2019, the 2023 Annual Report published, and any other documents that Budweiser APAC has made public. I would also like to remind everyone that the financial figures discussed today are provided in US 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 comparisons with the same period in 2023. Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as a part of Budweiser APAC's normal activities. As normalized figures are non-GAAP measures, the company disclosed the unconsolidated profits, EPS, EBIT, EBITDA, on a fully reported basis in the press release published earlier today. Further details of the 2024 First Half Results can also be found in the press release. It is now my pleasure to pass the time to Mr. Jan Craps. Sir, you may begin. Thank you, Reid, and good morning, everyone. Thank you for joining our earnings call. I hope you are all doing well. Our performance in the first half of 2024 was negatively impacted by a soft industry in China. Thanks to our geographic footprint, strong growth in South Korea and India mostly offset our performance in China, resulting in flattish overall EBITDA, with EBITDA margin expansion versus the first half of last year. Let me provide some more color on each of our key markets. In China, we are committed to the long term, investing in our strategy focused on premiumization, expansion, and digital transformation. Nevertheless, our performance in the second quarter was impacted by a soft industry, which cycled channel reopenings in the first half of last year and adverse weather in key regions of our footprint, such as Guangdong and Fujian. Revenue contribution from innovations within the Budweiser family, including Supreme and Magnum, continued to increase. In terms of channel expansion, revenue contribution from the in-home channel increased as a result of our continuing efforts to premiumize this channel as in-home consumption occasions continue to develop. On the digitization front, we have expanded BEES to 300 cities. With this successful scale-up, we are focusing on leveraging technology to further enhance our commercial capabilities and drive value creation for all our stakeholders. From a portfolio perspective, we are connecting with consumers through our mega brands and mega platforms to drive growth. For Budweiser, we leverage summer sporting events to associate beer consumption with sports viewing and cheering on athletes and teams. These associations elevate and expand the reach of our ongoing Sports Now Is Our Party summer campaign for Budweiser, launched alongside the nationwide introduction of Budweiser 0.0. In the super premium segment, this summer, we announced a strategic partnership between Corona and Ctrip that is building a strong association between the brand and unwinding travel experiences with consumers to nature. In Core+, Harbin's partnership with the NBA for the playoffs in June, coupled with the growing health and wellness trend in China, supported the strong growth of our Core ++ offering, Harbin Icy GD Zero Sugar. Its sales volumes more than doubled in the first half of the year and the second quarter, with expanded reach and engagement among the legal drinking age generation. In South Korea, we outperformed the industry with strong total market share gains, supported by share gains in both the on-premise and in-home channels. Cass, Hanmac, and Stella Artois all grew their market share. Ongoing revenue management initiatives, better mix, and cost efficiency measures drove double-digit top and bottom line growth and substantial EBITDA margin expansion in the second quarter. This summer, Cass has launched Olympic-themed packaging of Cass Fresh and Cass 0.0, as we aim to bring people together to cheer on athletes at the Olympics. We also created more business opportunities for wholesalers by introducing non-alcoholic beverage offerings in the on-premise channel, including Cass 0.0 in a 330 ml bottle, which delivers the same crisp taste as Cass Fresh. In India, we continue to outperform the industry in the second quarter and the first half, with our premium and super premium portfolio growing by double digits in both periods and contributing more than 2/3 of our revenue. Before I pass it over to Iggy, let me share some of the additional progress we have made in our sustainability initiatives. By the end of June 2024, our water usage for beer production in APAC has been reduced to 1.86 hectoliters per hectoliter, representing a 38% reduction against our 2017 baseline. In recognition of our efforts in driving sustainable growth, Bud APAC was included in the S&P Global's 2024 Sustainability China Yearbook. We continue to proactively provide disaster relief to victims of recent disaster events in China. Since 2015, we have provided 2.6 million cans of emergency drinking water to 39 cities across China. I will now pass it over to Iggy to take you through our financial results. Over to you, Iggy. Thank you, Jan. Good morning, everyone. In the first half of 2024, total volume decreased by 6.2%, while revenue decreased by 4.3%, driven by the top line decline in China. Revenue per hectoliter grew by 2%, driven by revenue management initiatives in APAC East, as well as continued premiumization in China and India. Normalized EBITDA decreased slightly by 1%, while our normalized EBITDA margin increased by 109 basis points, driven by gross margin expansion. Cost of sales per hectoliter decreased by 0.6% in the first half of the year, mainly driven by cost management initiatives and supported by commodity tailwinds. This drove a gross profit margin expansion and a 109 basis points increase in our EBITDA margin. In APAC West, volumes decreased by 7.2%, while revenue and revenue per hectoliter decreased by 7.8% and 0.7%, respectively. Normalized EBITDA decreased by 7.3%. In China, in the second quarter of this year, volumes decreased by 10.3%, impacted by a soft industry, which cycled channel reopenings of last year and adverse weather in key regions of our footprint this year. Revenue declined by 15.2%, and revenue per hectoliter declined by 5.4%, resulting from heavy precipitation across the provinces of Guangdong and Fujian, where a significant proportion of our premium geographic footprint is focused. In the first half of this year, our EBITDA margin expanded back to pre-pandemic levels, driven by ongoing premiumization as well as cost management initiatives. In APAC East, in the first half of 2024, volumes increased by 1.3%, with revenue and revenue per hectoliter increasing by 13.5% and 12.1%, respectively. Normalized EBITDA increased by 43.1%, with EBITDA margin expanding by 633 basis points. Finally, we maintained a sound balance sheet in line with our disciplined financial practices and capital allocation priorities. As of the 30th of June of 2024, our net cash position was $2.4 billion. With that, Jan and I are here to answer any questions you may have. Thank you. Thank you. Ladies and gentlemen, the floor is now open for questions. Please press star one, one only once to ask a question. In the interest of time, we will ask participants to limit themselves to two questions, and please ask one question at a time. Our first question is coming from Anne Ling from Jefferies. Your line is open. Please go ahead. Hey, thank you. Hello, Jan and Iggy. Thanks for taking my questions. So I would like to ask two questions. First, on the China in-home channel. So if I look at the Western market, on trade is normally 20%-30% of the market in terms of volume, and versus in China is about 45%-50%. So do you think that this shift will change with economy slowdown in China and becoming more structural? And how should we view competition at the off-trade channel? So that's my first question. Thank you, Anne. Good morning. Good to hear from you. Thank you for the question. I think you're right. When you compare to other markets where parent company ABI operates, we do see that when markets develop more, the drinking occasions in the in-home channel typically increase. As a result, the in-home channel volume weight also increases in the total beer industry. Also in China, actually, when we look back, there's been a long-term trend. I think the last time we reported on this was quite a while ago. If we compare, for example, to 2015, our in-home channel volume weight was around 45%. Since then, we do see the in-home channel volume weight increasing between half a point and one point per year, every year. Yes, you do see this channel weight increase. When you look at the premium brands in the in-home channel, of course, they've been less developed than in the on-premise channels, simply because typically our premium brands were first developed in nightlife, then they're developed in premium restaurants, then in modern trade. And so gradually, they go to smaller and smaller stores. So as a result, actually, this in-home expansion, which is part of our strategy since several years, remains a very big opportunity for us from a premiumization perspective as China continues to develop its beer markets. So we've been expanding our route to market in in-home as we cover more and more sales channels. And actually, the in-home channel contribution to the total volumes has continued to increase also in our numbers, led by the premiumization. The way to do that is to develop our route to market model more in depth. So as you might know, China has more than 5 million outlets in the in-home channel for the total industry. So the key for us is to expand our route to market with high-quality distribution network to cover more outlets. So we are continuously developing more tier one and tier two wholesalers to help us expand to more outlets. And we actually use our BEES digital tool to help us execute key initiatives in more outlets more effectively, and also to drive the digitization and the expansion with our wholesaler partners. And then maybe one more color to give is also the online channel. I think within in-home, the O2O channel has been expanding quite a bit. And so we are engaging to capture the growth opportunities there as well. We are with Budweiser China leading the O2O channel in China, and we continue to gain share in the channel as well on a year-to-date basis. I hope that gives you some more color on the question, Anne. Yeah, that's great. Yeah. My second question is on the premiumization in South Korea. The company has launched Stella Artois at the on-trade channel at the beginning of this year. May I know what is the performance so far? And are we able to change the consumer behavior and offer premium beer in the on-trade channel? Thank you. Yeah, thank you, Anne. South Korea is indeed one of these higher maturity markets in APAC. At the same time, the premium segment is still underdeveloped and with more growth opportunities in the future. And also from a pricing and margin perspective, the price ladder in Korea is more compressed than in some other markets like in China. So it also gives us a further opportunity to premiumize at the right price level. So we've been leading the premiumization in the on-premise channel in South Korea. And we actually did two initiatives in the on-premise with Stella Artois. One was the introduction of the Stella Artois 500 ml bottle with exclusive mini chalice glasses. So Cass is typically sold around KRW 5,000 price point, and Stella Artois is sold at between KRW 8,000 and KRW 9,000 Korean won, offering a higher margin to our wholesalers and the store owners or the restaurant owners. At the same time, we're also deploying our Perfect Serve program for Stella Artois Draft, so on tap, which gives a toolkit to our bars and restaurants to further elevate consumer experiences with Perfect Serve, which gives attention to the perfect pouring of Stella Artois in the chalice glass, demonstrating really premium and differentiated beer experience in the on-premise channel. So as a result, Stella Artois is growing market share not only in the in-home, but also in the on-premise channel and growing volume as well. And we're actually the only brewer in South Korea that owns a premium portfolio because we don't only have Stella Artois, we also have Budweiser and Hoegaarden. We're quite confident on our journey and our brand portfolio combined with the route to market and our people capabilities to continue driving the premiumization in South Korea. Thank you for your questions, Anne. Okay. Thank you. Thank you very much, Jan. Thank you. Let me see if there is a next question. Hello, can you hear me? Yeah. Hello? Hi. Yeah, this is Lee from Goldman Sachs. Thanks a lot, Jan and Iggy, for taking my questions. Hi. So I have two questions, and I'll ask one by one. Firstly, I understand that we are seeing the weather impact from the Guangdong and Fujian regions, but also quite interested in our cooperation with Swire. So would you please share more color on the progress of the regional penetration of our Budweiser brand in Hubei and Anhui YTD with our collaboration with Swire? Sure. Thank you, Lee, and thanks for your question. Yeah, so I think last time we talked about our Swire collaboration, which indeed we constantly look at our route to markets, and how can we further expand and partner with the right wholesalers to develop all of our distribution opportunities. And as you know, even with the scale of the Budweiser brand today in China, we are only distributing about one out of three existing outlets. And for super premium brands, that's even less than one out of ten. So we continue to see a lot of opportunities for distribution expansion. So about eight months ago, we decided to collaborate with Swire Coca-Cola in two provinces, Anhui and Hubei, because in these provinces, we could see a clear synergy potential between Budweiser APAC and Swire Coca-Cola, but also the wholesalers in the two provinces, because all of us can basically benefit from a stronger combined portfolio of our leading premium brands together with Swire Coca-Cola's leading soft drinks brands. So really offering a one-stop shop in a way in partnership with Swire Coca-Cola and the wholesalers in the two provinces. So of course, we're still early stage, because it literally started less than eight months ago. But having to report that so far, we've grown our market share in the premium and above segments in the in-home channel in both provinces, in Anhui and Hubei, according to the Nielsen data. We're actually quite excited with what the partnership will continue to bring in terms of synergies and also more meaningful financial benefits in the future. So far, we see good results, Lee. Thanks for checking in. Thanks a lot. That's exciting. Also, my second question is that with 2Q behind us, would you please share some early color on the demand trend and the product strategy for the peak season in 3Q? Well, we understand that 4Q is lapping a quite easy common base. But indeed, the market is concerned about the 3Q trend due to still unfavorable weather in the regions surrounding Yangtze River. Thank you so much. Yeah, thank you, Lee. I mean, we know we had a tough second quarter, especially in China. Overall, in the first half of the year, we had anticipated some of this because we have this high base cycling last year's post-COVID channel reopenings in the first half. When you combine it with the adverse weather, which of course was more difficult to predict, the soft industry, but also continued soft consumer confidence actually impacted our performance quite a bit in the second quarter. When we look forward for the second half, from a base perspective, we expect to have a more normal base when we look at the last year numbers. Of course, the other element is the consumer confidence. When we look at the latest reported consumer confidence data from the NBS, we continue to see some lower consumer confidence and continues to remain soft as we see in the last number of months. In terms of weather, I think you're right that in the second quarter, the heavy rainfalls were quite exceptionally concentrated in our footprint, which is why we highlight this in our results announcement, because Guangdong, Fujian, but also Jiangxi, we have several provinces, Hunan, that were more than normal impacted. So we had some disadvantage from a footprint perspective there. And as you know, these are provinces that are quite heavy in terms of our premium super-premium volume mix as well. So also mix was impacted by the weather here. For July, we continue to see some typhoons, some floodings, but I would say China is a big country. So I mean, this is what we would see more in a normal range of weather activities where Q2 was more exceptionally concentrated in our footprint. When we look forward, we're very focused on executing our strategy. We're very much committed to China also, I mean, long term. And we believe our strategy is the right strategy to win. So we continue to focus on executing our mega brands and our mega platforms. This summer, a lot of focus on Budweiser with a summer of sports campaign. We also have innovations like zero sugar in the Core + segments. We continue to invest behind our super premium portfolio for the future. And if you look at our expansion, we continue to expand geographically across our channels and also expand our digital solutions with BEES. We basically focus on executing our strategy and to deliver stronger results medium and long term. Thank you for the question, Lee. Thank you so much. That's very clear. Thanks. Thank you. Our next question comes from Lillian Lou from Morgan Stanley. Your line is open. Please go ahead. Thanks a lot. This is Lillian from Morgan Stanley. Hello, Jan and Iggy. I also have two questions. First is Korea. Obviously, we had a very strong performance in the second quarter. How do we see the demand and the competition progress evolving into the second half? Any things we're going to continue to carry on or any changes we will see for the second half in the region? Thank you, Lillian, good morning and good to hear from you. Thanks for your question. So I think on Korea, we're quite excited about our performance. I think we've been improving quarter-over-quarter, like we said last year. And of course, from a competitive lens, as you know, we respect all of our competitors and don't typically comment on their actions. But if you look at our business, we continue to invest behind our leading brands, our innovations, and our capabilities in South Korea. And we have built quite a strong brand leadership in the markets in both the core and the premium segments. So when you look at the second quarter, we outperformed the industry. We had strong total market share gains supported by share gains and volume growth in both the on-premise and the in-home channels. Actually, our total market share in the first half of this year is now back above the 2018 levels before all of our competitor launches, which historically, as you remember, have impacted our performance from 2019. So now we're total market share back above the 2018 level. If you look at our key brands, our mega brands with Cass, Hanmac, and Stella, all of these brands grew their market share amidst competitors' new product launches. As you know, all of our competitors continue to launch new products, but our three mega brands continue to grow share. And actually, when you look at Cass as a single brand, Cass reached more than 50%, 50% market share in the first half, which is quite a strong achievement. And I mean, I'm sure our team is very proud of that achievement. Our brands are pretty healthy, and we continue to invest also this summer behind our campaigns. Cass Summer Olympics campaign is a big focus of ours. Also, we focus on our execution in the trades, both in the in-home channel and also in the out-of-home channel to bring our brands to life via trade execution. So as you can probably hear, we're quite confident on our brand portfolio, our partners in the region, and also our people capabilities to continue to lead the industry growth in South Korea. So I hope that answers your question, Lillian. Yeah, thanks, Jan. Second question is on the cost and margin side. Obviously, we see second quarter, we have even further cost savings from raw material. Can this sustain for the second half, how the trend could be? And also, I think what's the implication to the margin trend in the second half as well? Thank you. Sure. Thank you, Lillian. Let me pass this question to Iggy. Thanks, Jan. No, thank you for the question, Lee. So I think in the first half of the year, of course, our COGS per hectoliter decreasing by 0.6% was a strong result. We benefited really from two things, from both cost management initiatives, which continue. But of course, that was supported by commodity tailwinds. So as we mentioned before, we already expected in 2024, we would see that commodity headwind turn into a tailwind. On commodities specifically, to answer your question, if you really think generally in terms of our 12-month hedging policy, you would conceptually expect similar conditions in the second half of 2024 based on the commodity prices in the second half of 2023. So if you look at aluminum, the cost base there was consistently around $2,200-$2,300 per ton in both the first half and the second half of the year. If anything, actually, you would say that probably on a per ton basis, it was slightly better in the second half last year. So we would expect that to continue. If you take a look at barley, barley pricing has really been coming down since mid-2022. It's stabilized more now here in 2024, but effectively, it should continue to be a tailwind based on last year's pricing as well. Beyond commodities, our continued efficiency improvement and cost management initiatives, those should be fairly consistent quarter-over-quarter. So you shouldn't expect any real difference in performance where those initiatives are pre-planned before the year starts. And then, of course, the other factor that does have an impact on our cost per hectoliter is premiumization. So as that will continue, of course, it'll be a meaningful driver of our COGS per hectoliter as it has been in normal years. But of course, we welcome that as it benefits us in terms of total gross margin depreciation effect. Question. Thank you so much. Thanks a lot, Iggy. Thanks, Yann. That's very clear. Thank you. Thank you. Thank you. Our next question comes from Euan McLeish from Bernstein. Your line is open. Please go ahead. Hi, good morning, chaps. Could I dig into your gross and margin drivers a little bit more? It seems like there's quite a few different factors driving the performance in Korea. So I want to understand the kind of relativity of those factors and the sustainability of those. So off the top of my head, I can think of the price increase from last October, raw material price tailwinds, improvements that you made in operating efficiency, the excise tax. Can you give us a quantification of these different factors and anything else that played in the second quarter? And talk a bit about how sustainable these are and how you see these going forward, please. Of course. Thank you, Euan. Good morning. Let me pass your question to Iggy. Thanks, Jan. Thanks for the question, Euan. So yeah, I think in South Korea, revenues grew high teens, really, as revenue per hectoliter was the primary driver with mid-teens growth. And that benefited, of course, from the revenue management initiatives that you mentioned, as well as some positive channel, package and brand mix as well. So that's really what drove the EBITDA and the EBITDA margin expansion, which is quite significant. It was really thanks to this strong top-line performance and the operating leverage benefit as well. If we take a look at the drivers for this growth in APAC East, they're still consistently rate first, as we discussed before, operational efficiencies second, and then mix benefits third. So on rate, as you point out, we increased prices by 6.9% in our core brands in both the in-home and out-of-home channels back in October of 2023. So that effectively is the primary driver. So the way you described it, October price increase and the excise tax increase, they relate together. They're part of the rate equation. And that's by far the primary driver of results from an EBITDA and EBITDA margin perspective. Then the second bucket would be operational efficiencies. There, it's really driven by the initiatives that we've taken, but also supported by the commodities normalization that I just discussed a few minutes ago. So that's been a tailwind this year. That one's, of course, expected to be more consistent based on my previous comments. But both of those continue quarter-over-quarter. And then lastly, I would focus then on probably the continued premiumization really in the industry. As Jan mentioned earlier, it's still under-indexed versus other mature markets. We're seeing good results in Stella Artois. We have a very strong portfolio there, so we expect to capture an outsized portion of that growth, of course, as we leverage that portfolio. And so that should grow, obviously, in relevance as time moves on. So longer term, we really don't see any barriers to margin expansion. We're actually quite confident in the strategy. We're quite confident in the team's commercial capabilities. And we think we're really well positioned there for future sustainable growth. And if anything, that should help us to accelerate the growth we have there and offset any existing headwinds as we move forward. Thank you so much for the question, Euan. Great. Thanks very much. And can we maybe switch to China and maybe think more of a strategic question? It seems that the volume pressure that you've been facing most recently has been more acute at the lowest price points. And it feels like this is a bit of a structural trend that we're seeing core and value really consistently declining and maybe accelerating the declines. So at what point do you choose to walk away from these segments rather than trying to invest to stabilize your volumes? How do you think about the trade-off between the negative margin impact of lower operational leverage, lower volume versus the positive margin impact of actually shrinking your core and value exposure and maybe potentially being able to take some of your assets out? So just trying to understand what are the decision factors and how do you balance those factors going forward? Yeah, thank you, Euan. Interesting question. I think if you look at the different price segments in China, in our portfolio, the segments below premium, so we would call core, Core +, and value, they account for about 1/3 of our China net revenue. On a volume basis, of course, there would be a more significant basis for these three segments below premium. So we consider it is important for us to have a full portfolio because it helps us build a stronger route to market with our wholesaler partners, but it also helps us with the scale and the productivity to support the longer-term premiumization of China as a beer industry. Of course, we do review and we optimize our portfolio on an annual basis, taking out any SKUs that are either not profitable or not strategic. But in the segments below premium, we actually do have a number of strong brands. Of course, Harbin Ice would be well known, but also we have a number of regional brands in China, like Sedrin in Fujian, Jiangxi. We have Big Boss Da Fu Hao in Nantong, so in Jiangsu Province. We have Double Deer. So we have several brands actually that are complementary to our premium brands. And that actually also answer different consumer needs for, for example, Relax and Bonds is a consumer need that we target with our core and Core + brands. So while growing the segments below premium is not really a strategic priority for us, especially when we look at core and value, we do believe that the existence of the segments further supports our geographic and channel expansion and helps us with just productivity and total scale of our route to market. Thank you for the question, Euan. Great. Thanks. Appreciate that. Thank you. Our next question comes from Chen Luo from Bank of America. Your line is open. Please go ahead. Chen Luo, you can unmute your line and go ahead with your questions. Thank you. Oh, okay. The line just broke up, so I didn't realize it was me. Hi. No problem. Now we can hear you a little, Chen. Okay. Thank you. Hi, Jan and Iggy. So I've got two questions. So first of all, it's actually on the China commercial investment and competition. Under the current macro situation, is competition intensifying in China at the moment? And in fact, in the past three years, we noticed our company's marketing and sales expense ratio continued to decrease. Of course, in the first half of this year, because of the revenue decline and the resulting operating deleverage, that ratio has edged up a little bit. But if you look at the absolute dollar amount, it still decreased a little bit year-on-year. So would you expect this softening marketing and sales expense ratio to continue in the future? Or are we going to actually increase the investment to protect our top-line growth and also protect our margins in China? Thank you. This is my first question. Thank you, Chen Luo, and good afternoon. So I think when we look at our commercial investments, if we would look at last year's level, if we look at the percent of net revenue investment, we believe we are at the right level nationally. So we don't really look at the investment level only on an absolute basis. We prefer to express it as a percent of net revenue and manage our investment level commercially via that KPI. And we believe that we are at the right level to invest in our brands and have them very healthy. So we are committed, as you know, to the long term, and we continue to invest in our business also with commercial investment. Of course, as you know, we have learned quite a bit in the last number of years to be more agile in our resource allocation depending on different priorities and different events. Digitization also allows us to be more efficient. This is now in about 300 cities in China. It also means that the efficiency we have in our investment continues to improve, leveraging technology and digitization. Of course, to fund these investments, we do continue to work on what we call the non-working money. The working money would be, for example, media dollars or consumer experiences behind our brands. But the non-working money, we continue to be quite scrupulous about in our Cost Connect Win approach, where we reduce the indirect overhead costs so that we can reinvest them in our commercial plans to connect with our consumers and create longer-term value for our shareholders. So in short, committed to continue investing. The level of investment, we look at it as a% of net revenue. If you would look at that KPI, I would expect it to be relatively stable versus last year and prior years, also for this year. At the national level, of course, you can have some exceptions left and right, but on a national level, as a% of net revenue, we expect to be at the appropriate level. So I hope that answers your question. Okay. Thank you. That's very helpful. My second question is on dividend. I noticed that last year, we actually raised our dividend payout ratio to 18% something, which is definitely a positive surprise. Can the management team reiterate your current dividend policy and what's your latest practice? In particular, I noticed that in the first half, if you look at our US dollar denominated net profit, it declined slightly year-on-year. Just on a hypothetical basis, if for the full year, the net profit declined or net profit trend is similar to that of the first half, are we going to pay a dividend same as last year so that we can actually offer more shareholder return to our shareholders? That's my question. Thank you. Thank you. Over to you, Iggy. Thanks, Jan. And thanks, Chen. So I think maybe the first point, we remain committed to maximizing value for our shareholders, and providing a competitive dividend is an important part of that strategy. And you're right, the dividend policy has always been to provide at least a 25% dividend payout since the IPO. I think if you look at last year, we paid a total dividend of $701 million for last year, which was a 40% increase versus last year. And as you mentioned, a significantly higher dividend payout ratio than the minimum dividend payout we offer. But I think more importantly, we've been increasing really our dividend steadily year-over-year since IPO. And to your point around the relationship versus net profit, we're confident about our future cash flow generation. It's actually been the business's ability to generate cash flow that's given us the ability to actually increase, if not at least maintain our absolute total dividend amount on a year-over-year basis. So we're confident that with that cash flow generation capability, we can actually continue to do this in the right way while also maintaining a solid balance sheet for future growth. So I hope that answers your question. Okay. That is really good to hear. So that actually answered my question perfectly. Thanks a lot, Jan and Iggy. Thank you so much. No problem. Pleasure. Thank you. In the interest of time, our final questions will come from Linda Huang from Macquarie. Your line is open. Please go ahead. Thank you very much, Jan and Iggy. I have two questions. I will start from the first one. This is regarding for China. We noticed that the weak consumption and just as you mentioned that, and there's also certain consumption trade-down trend. So I just want to know that will the company slightly switch your strategy to weigh more on value and core to capture this consumption trend in China? So that's my first question. Thank you, Linda. Good afternoon. Thanks for your question. I think when I look at the current consumer environment, when I look at our category, which is beer, beer is actually quite resilient overall when I compare to other categories. Premium beer still offers an accessible luxury. So I think in the current environment, people still want to pursue happy moments, treat themselves. We do see that consumers are actually quite interested in experiences. So what we call trading down in the beer environment, we see more as spending smartly. People are still ready to spend the right price for the right experience. That is what we are offering with our brand portfolio. If we take a longer-term look, we continue to see a big opportunity in China for premiumization. We believe in a medium- to long-term, actually most of the profit pool growth in China will continue to come from the premium super-premium segment growth. And as such, also in the current environment, Budweiser as a brand remains our number one priority in China. Super-premium beers, we continue to invest so that they are stronger brands for the future when the consumer is ready to spend more for the price segment as well. We look below premium; we are less focused on core and value, except for the scale that we want to protect, as I mentioned to you a little bit earlier. In the Core + segment, we are active in innovating in the Core ++, which is what we would call the CNY 8 price segment, so below Budweiser. There we do see a trade-up opportunity for consumers who are in the 6 RMB price range or Core + segment to spend a little bit more but have a better product experience. So with Harbin Ice, we launched the zero sugar variants recently. That innovation has been performing very well. It is, of course, in this health and well-being trend. It is not rocket science, zero sugar. We've seen it in different categories. But we believe the health claim is quite attractive to consumers also in beer. And actually, we've seen this product since we did the zero sugar innovation on the Harbin Icy GD product. We've seen the volumes more than double in the first half and the second quarter. Then we partner with the NBA to provide a mega platform to engage with our consumers. And that seems to be working quite well. So that's kind of the part I would say that we are investing via innovations below premium as well. So I hope that answers your question, Linda. Yeah, that's great. The second one is regarding for India. Because I just want to know that how do we evaluate India competition? Because I read some of the media reporting, they also mentioned about that some of the local brands, they are moving up. And will M&A be one of the strategies in India as well? Thank you, Linda, for your question on India. Also in the second quarter, we continue to outperform the industry in India, which is growing. And we are gaining market share in that growing industry. We have strong momentum there. We are already the first bull in premium with about 2/3 of the segment with our brands. And these brands, the premium super premium brands, they represent already more than 2/3 of our net revenue in India. So they are quite healthy and growing quickly, actually growing double digits versus last year if we look at the second quarter. We continue to grow our business organically in India. Actually, the market is already the fourth largest market for the Budweiser brand globally within the parent company ABI. If you look at our strategy, it's really about premiumization first because we see this segment in the beer industry expanding, and we are expanding, driving the growth of the segments with our different brand portfolio: Budweiser, Bud Magnum, Corona, and Hoegaarden, which is also helping us in a brand mix. We are also focused on moderation because we believe there is a big opportunity for more differentiation from a regulation perspective in terms of excises, in terms of access to lower alcohol variants that are driving a healthier alcohol consumption in India. It should also help us expand the beer category, which today is underdeveloped if you look at consumption per capita for beer versus other alcoholic products and versus other markets. And then last but not least, we do have a big focus on productivity as well. The revenue per hectoliter of India is already at kind of good levels, can further increase, but is already at good levels from an ASP perspective. But we do want to drive further profitability. And we have mapped initiatives when comparing the biggest brewers in India versus the smallest brewery in China with very concrete measures on how we can improve brewery productivity and also improve our returnable packaging return rates so that we can continue to improve our productivity and profitability in India. So these are kind of the key priorities for that market. And we're quite excited with the growth we see there. So thank you for your questions, Linda. Very clear. Thank you very much. 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, Ray. Yes, we remain committed, of course, to the long term. We continue to focus on the execution of our strategy and invest in our brands and capabilities to drive growth. I want to thank you all for joining us today. I look forward to speaking to you very soon. Thank you. This concludes today's results call. Please disconnect your lines. Thank you.