Q1 2020 Earnings Call
When retailers with proactive communication.
Our commercial teams also acted quickly to allocate resources, where they would be most most effective including to the off premise and ecommerce channels.
Our team in China also led the way finding innovative ways to connect with consumers for staying home, we launched the Budweiser E. Clubbing program in collaboration with Timo, where consumers can enjoy performance from local electronic dance music Djs, while being able to simultaneously ordered Budweiser.
Online.
This inspired our partner our teams around the world to large consumer passion points in creative new ways, such as circular to Brahma in Brazil of virtual country music concerts series that generated 3 million lied views and its first show in has accumulated over 40 million views to debt.
In the U.S. Michelob Ultra continues to promote and active lifestyle to livestream home workouts that support local fitness studios, which has have been impacted by social distancing restrictions.
For the past several years, we've been investing new capabilities to better connect with our customers and consumers.
Growing trends such as digital sales E commerce, and online marketing a more relevant now than ever before.
And have rapidly accelerated in recent months.
In many of our markets our customers can place orders online through our b to b and marketplace platforms, which established and significantly invested in enhancing over the past few years.
This offers them the flexibility to order when and where it's more convenient.
While providing visibility into our full set of offerings and their past transactions.
Additionally, 2018, we created a function dedicated to our direct to consumer business, which includes several ecommerce platforms across our markets.
This allows us to better understanding connect with our consumers in the direct way and this learnings are providing incredibly useful today.
We believe the significant progress we have made in areas such as beat to be sales in E. Commerce put us in an advantaged position to capture growth.
Drawn from the strengths.
Lower rapidly adapting our business to Beth.
The needs of our customers in consumers in the current environment the fundamental strengths of our company remain unchanged.
Over clear commercial strategy, the world's most valuable portfolio via brands diverse geographic footprint industry, leading profitability and an incredibly deep talent pool and constant as this is valuable assets position us well, we're strong recovery.
Now I'd like to handed over to Fernando Who'll take you through our first quarter earnings in elaborate on the steps were taken consistent with our longstanding financial discipline Center.
Thank you Brett.
Good morning, good afternoon, everyone.
It's a pleasure to move during my first 18 bad earnings call as CFO.
I hope you on all safe and well.
Let's start just an update on our net finance costs.
Net finance costs in the quarter, what three point $16 billion embedded short $366 million in the first quarter of 2019.
This increase was predominantly driven by market to market losses link it to the hedging of our share based payment problems of nearly $1.9 billion.
Competitor game of nearly $1 billion in the first quarter of 2019.
Interest expenses were lower by nearly $80 million.
Our normalized effective tax rate audience yada was minus 109.3% to this quarter.
As it was heavily impacted by the nondeductible mark to market losses linkage to the hedging of our share based payment problems.
Excluding the impact of the gains and losses link it to the hedging of our share based payment problems.
Our E T out in the first quarter was 25.9% as compared to 27.5% in the first quarter of 2019.
The decrease is primarily driven by lower property encountering mix.
Moving onto earnings per share.
Our underlying EPS decreased to 51 cents per shedding the question.
The decline in normalized in beach was only partially offset by lower tax expense and lower profit attributable to non controlling interests.
Let me now spend a few minutes on the measures we are taking to exercise our financial discipline.
Our commitment to financial discipline is unwavering.
Rationing the context of the current volatility.
We are proactively managing both factors upon which we can having back any influence.
Efficient utilization of our resources is part of our DNA and an important drivers of our industry leading profitability.
We have implemented several several measures to reduce or eliminate discretionary spending.
That may not prove effective in the parenting vitamins.
He is includes non committed capital expenditures.
Airport in instructive expenses, such as travel and events.
And sales and marketing investments, including sponsorships.
Additionally, our senior leadership team has volunteer to reduce their base salaries by 20% for the remainder of the year.
We also revised our proposal to pay a final 2019 event from one euro for chef to 52 cents per share with us starting it at this decision was prudent ending the best interest of the company and it was consistent with our financial discipline elaboration.
Commitments and other actions taken to navigate using vitamins.
We have also taking proactive measures Truman thing our strong liquidity position.
Including drawing down our 9 billion dollar revolving credit facility in food.
Our successful issuing approximately $11 billion of bonds.
In addition.
Illustrate EMS foreign investment review Board has granted a regulatory clearance in relation to the sale of our Australian operations.
The transaction will close on June 1st.
As I mentioned in April we successfully completed to investment grade bonds trust to further strengthen our liquidity position.
One of 4.5 billion euros, and one off 6 billion us dollars.
As you see on his light plenty for our own maturity profile is well distributed across the next several years and these issues.
That expanded our weighted average in Madrid by approximately five months.
As a reminder.
We do not had any financial covenants on our inside of that portfolio include our revolving credit facilities.
Our loan portfolio remains largely insulated from interest rate volatility as approximately 95% holds a fixed rates.
Furthermore.
The portfolio is comprised of our diverse mix of currencies, we saw around 60% denominated in us dollars and 33% in Europe.
Our weighted on that as you might do region is now roughly 15 years.
Finally, we have a weighted average coupon rate of approximately 4%.
I will now take you through our capital allocation priorities.
The first priority for the use of cash is to invest behind our brands and to take full advantage of the organic growth opportunities in our business.
Second.
The 11 ensure around a chip times net battery reiterate your remains our commitment and we really ties that repayment in order to meet these objectives.
But with respect to M&A, we will always be ready to look at opportunities when and if they arise.
Subject to our strict financial discipline and elimination commitment.
Our first priority is returning excess cash to shareholders in the form of dividends and share buybacks.
With this being said we must exist sized prudent measures during times of uncertainty and volatility, including efficient management of discretionary expenses, especially those which may not prove effective in the current environments.
And with that I'll hand back to my idea to begin the Q in a session.
Thank you Sir the floor is now open for questions.
The interest of time, Weve, Illinois participants to one question and one follow up question.
Again, if you have the question or comment please press star one on your Touchtone phone.
If at any point. Your question has been answered you may remove yourself some the killed by pressing the pankey.
We do asked that while you pose your question you. Please pick up your handset to provide optimal sound quality.
Our first question, it's coming from Trevor Stirling of Bernstein.
Hi, Ritu I'm Fernando.
One question follow up for me please.
The two or firstly in the U.S. Bridger, you alluded to bake off traits yeah. Its strength that we've seen a in March and also extending into April I was wondering did you give us any thoughts around the sustainability of that off trade strength and the extent of which about the offsetting the on trade weakness and the second question in Brazil, you meant.
And that you underperformed premium this quarter I think the Brazilian premium volumes actually declined in want me to according to them. They have released and I Wonder if you give us a bit more color on why you're doing a lot of activity in premium, but it doesn't seem to be quite deliberately yet.
Hi traveler no. Thanks for question. So first of all the on the U.S. for Fred.
Because of the stay at home order social business in everything you do and trade was was Ah brought to shutdown and consumers that too.
Come up with more activities at home, so meal yields at whom became something that was more important than before everybody was having their meals and whom Russians are close.
And lots of other things started happening in the who.
So with that the upgrade so a pickup in volumes.
And that the onset of the crisis.
So were observed that up within beer sales, especially it wouldn't be on on bigger bags and also known brands.
So stuff you know disproportionately benefiting established brands.
It's too early to know to determine if this trend will demonstrate the longer term shifting consumer behavior, but at this time, that's what we saw so some good through two to two just.
Nick observation here about the performance in Q1 of the U.S.
In which a net revenue grew by 1.9% EBITDA, 2.7% in that manner back with a 3%. So there was a very strong water.
And so that's for the U.S. approved in terms of Brazil premium a couple of things first our premium segment.
Posted double digit growth engine in February.
March then with older restrictions it was a different story.
Second Oh premium brand portfolio has grown every year for more than a decade. It'll continue to believe that are the best we position ourselves to win in the long term the print Simon is with the portfolio brands to which wed index.
As a has been important style international premium pure malt Brent.
In fulfillment to remember that was that we have more than 50% of that segment.
I wouldn't take one quarter does is a signal, but it's true that to younger.
Share where under share in that segment and Thats something thats to have so, but we believe the portfolio approach we've had very strong brands.
Thank you. Thank you very much pressure.
Thank you.
Our next question comes from one of the Edward Mundy of Jefferies.
[noise] hybrid type Monday, two questions as well see some plus question is how do you weigh up your strong liquidity situation and extended the maturity schedule, let's see potential for accelerated deleveraging program and I do so back in 2008, and then my follow up question.
Is around Cogs per hectoliter coming into fiscal 19, you'd have been guiding for Cogs per hectoliter to increase about mid single digit feels like spot prices.
Yes, probably starting to come down but transaction hedging is probably worse next year and should we think about Cogs per hectoliter in 2021.
The to be better or worse.
Stage relative to the frequency.
Okay Bad sold so let's start with the first one so in terms of liquidity, we feel very good about our position I mean, that's the first thing we did what do you saw the crisis hitting you know we were we ended 2018 is $7 billion in cash.
Dan we went for bond issuances.
In April 14 billion euros, and $6 billion, So 11 billion approximately total well so.
Withdrawal withdrew the totality of our revolver 9 billion.
And this morning, we just got confirmation that we got to further proven australias all conditions for closing Youre.
Our or checked into transaction will close on June 1st when you put all this together the liquidity we're in a very comfortable position in terms of leverage our capital allocation priorities are the following the first priority is to use of cash behind our growing our brands on organic business.
Second one is to deleverage to around the two times net debt to EBITDA is remains our commitment and we'll continue to prioritize debt repayment in order to meet this objective. The third one is about M&A in the fourth one is to return excess cash to shareholders.
Well this being said we must we exercise.
We were very prudent and a continued to be prudent and including the efficient management of discretionary expenditures. So when this crisis hit we look at everything that was discretionary and could be phased out and we took that a decision.
And with the dividend.
Revision.
From one year or 250 years, and so the leverage continues to be hurt our agenda and this morning to to be Australia announcement.
And the certainty of closing on June 1st was very good.
In terms of you the cost of sales.
We had to impact in this first quarter.
First I mean.
The the if you look at commodities and foreign exchange.
This is a quarter this year that we'll continue to have that hit.
And second because of the operation to leverage so if you look at a 10.3.
God or causes Phil Spector escalation in the first quarter.
33% of that came from the operation with the leverage well, having you know less for them to dilute fixed cost and 25% of that came from come why isn't effects.
Come wise in effects.
The balance would be inflation and Brendan package mix that's always.
Part of the equation.
So again more more than half slightly more than half coming from.
At PSX commodity.
And.
Effects commodity and.
And the one of you can leverage.
We're 2021 [laughter].
They're hard to predict it is true that we have our.
Our hedges in place. So we're always trying to hedge 12 12 month on a rolling basis.
But at this point things very fluid well, we can see for this years that on the transactional piece, we are hedged or this year, but for next year when the prices of doing that and of course, who has continued to fold situations occurrences in commodities in general.
Thank you.
Our next question comes from a lot SNG <unk> of credit Suisse.
[laughter] Hi, I'm a couple of questions truck for me also since we preach it can you just go into a bit more detailed as to what you're seeing in the off premise channel in does less restrictive developing market cluster. So Brazil, Colombia are you seeing any growth Cindy off premise that or is that channel.
Also declining.
And then my follow up is just coming back to the small smart affordability strategy.
Got you started really talking more about not yeah.
Is there any changes to that just in light told the material FX headwinds that we've seen which will you know clearly impact from a transactional standpoint going into next year.
You know does that make you think I'm thinking any differently about that and the associated margin impact. Thanks.
Well first of dry freight on less restrictive markets like Brazil, and Colombia for example.
Well, we see in terms of trends and how consumers are behaving in June Kobe does that there was an increase in home consumption.
People are buying more in the local store in the neighborhood because they cannot fully move in many places.
Core brands, there should be more resilience because people are going for bigger bags of Noam style the sprint.
A lot of things going digital in terms of order and entertainment.
And also can.
Increase in terms of the pack mix. So yes. It is true that thought trade is more resilient [laughter] any little bit.
But in countries like Brazil, Colombia don't trade is so significantly the job trades.
Lift.
Not.
Nearly enough to compensate.
A very different from the first close of market, where they don't trade is very small like Brazil like in the U.S. unless you are and where the entrees in large part compensate for the on freight shortfall.
In terms of smart affordability, we I like that I can go to the category its financial framework.
In the category expansion framework, we learned is that you should have a portfolio.
Catered those sorts of price points and all sorts of consumers.
[laughter] for [noise].
Portfolio.
So there's no change there, let's remember that with local crops because of that size.
Tax break we have the margins are very comparable to the core brands, so they're very profitable compared to the average for the company.
So that's what I yeah, that's it thank you.
[noise] just two quick follow up but if I can quickly touch on China, you talked about an impact also in the off trade channel in Q1 I'm. Just curious if you go into April and I. Appreciate the on trade channel isn't quite back to normal that you're seeing any.
Pick up in the off trade channel within China Yep.
Yeah, I try and China, what's happening with sensitive is that a different channels, our reopening at different speeds.
Building home of course was mostly opened during the open because people needed to have access to food. So that that remains true then the Chinese restaurants reopened faster than the night life. For example, and so channels are beginning to attract customers back to old habits to old ways of consuming beer, but being home.
And especially the ecommerce and delivery remains very strong.
So that's what we see also going back to your first question on Brazil, Colombia, we have developed some ways to get beer to consumers' homes.
You saw the presentation about team that certain Colombia, the delivery in Brazil, but the things that have developed in the last five years and the proven to be very handy in markets like Brazil, Colombia, where do you want trade is very important.
And where home delivery is going very fast so things have been developing last five years came handy now with ecommerce and direct delivery.
The much more relevant.
That's it thank you.
Our next question comes from the line Celine Pannuti of J P M.
Yes, I'm good afternoon.
And my first question is on because you could maybe on the in Mexico and peer group can you could say I'm glad you wouldn't be she knew what have you will be a bill.
They go to Andrew again, absent, Chile, and Hum, that's essentially ideally needs to replenish the trade way it and hungry Tech for you to to do that on top of young no more and production.
And then I still can't just that's one thing on Latin America, so that.
You know we've seen a lot of FX pressure from any of their Latin American countries, and we are going to see recession.
He king I does it kinda need when most of all that twice what kind of.
And Xyrem and are you preparing a in times of the second half and next year and wouldn't be so that she will continue to bed BD team a full price recovery and hence why would that we should then and how you think about these finely tuned they eat well you're pretty steady team. Thank you.
Thank you in terms of Mexico, Peru, Yeah. Some of your operations are restricted so we cannot operate through the last few weeks.
It's permission to sell their existing inventory.
What is true in both countries is that we have enough inventory for when the recovery comes that we're able to supply our customers in a very fast way in Mexico. For example, the box are able to sell existing inventory that they have with them, but after the Easter vacation, which in Mexico is very strong consumption peers theirs.
Pretty much no inventory left in the marketplace.
There's a lot of pent up demand in the market. So the moment, we can use our inventory that fits in our breweries and our warehouses distribution centers, it's going to be very fast to replenish inventory to the trade seen in Peru.
In terms of last time FX as you know, let them is a place where our people they used to crisis from time to time and they know exactly what to do in terms of be ready for a tough two months a few years, we've done that many times in the past.
So we're going to do it again by Lucan structure by looking at discretionary spend I tried to reallocate resources to channels that are growing taking it from channels that are more under pressure by using our portfolio to door advantage and also by using technology now we have b to b.
That even with the without the presence of our sales Rep box, Kim and can get their orders to us.
I have direct delivery to customers home consumers' homes oldest things.
Top of that all those things will come handy and on top of that the hedge policy that we haven't plays for transactional cost exposure does <unk> dollar denominated.
Are they pretty much this year is hedged for those exposures. So that a give us times to plan for price increases that will be necessary going forward. So that's why we do hedge. So we have time to plan and we can read the market try to understand backs brands regions channel.
Sales and and plan to a price increase accordingly.
Thank you.
Our next question comes from the line as a living in light of Goldman Sachs.
Hi, good morning, Greater Fernando.
The only one question and one follow up pace or could you give us a few examples in the U.S. market specifically on the news, yes, youre taking to protect your margin and just a quick follow up on the capital structure I mean, EBI Kt has no liquidity shoes, a as we've seen from your presentation, you a refinancing and does the NSBC.
This morning, but that was just wondering how you're planning to optimize your upstarts structuring the medium term.
You will reduce it to be done already can you expect to Capex predicts Shannon can we expect more long cold dispose oldest or should we just assume that's about a cup dot net debt to be directionally come through EBITDA growth, obviously for the medium to I'm not asking for guidance I'll be show next year.
Thank you.
Well it sounds as if the U.S. in terms of measures to protect our margins.
We're doing everything we I just mentioned in Brazil. So we are we're looking at discretionary spend where we're taking a hard look at sales and marketing at Capex, So opex and Capex and trying to put the money and channels and products that consumers are demanding more so trying to put more money.
Behind ecommerce initiatives.
Direct to consumer initiatives more money for through the off trade more money behind bigger packs tried to promote less because today, there's no need for that tried to phase out from a product you introductions innovations because at this point doesn't make sense.
New introductions.
I also to curb some media spend put much more in line, so trying to be more in tune with consumers and trends.
So we allocate resources in a more effective way.
So there's a big time or something we're doing.
In terms of capital structure.
Again, our capital allocation priorities are clear.
So the first priority will continue to be to invest money behind a business U.S. business doing very well you saw the first quarter Libya second is to deleverage we have a target if it will get into two times net debt to EBITDA just remains our commitment and we'll continue to prioritize that repayment in order to me this objective and third.
In the name fourth giving money back to shareholders.
So we'll just be said, we must exercise prudent measures. During these times of uncertain, the volatility, including efficient management of discretionary expenditures.
That may prove that effective in this current environment.
It continues to be very prudent.
We continue to be.
Making decisions that consistent with our financial discipline into leveraging commitment to navigate this environment.
So.
Who was stake.
Our asset base.
We've always reviewed every year and identify noncore acts noncore assets that can be divested.
As part of our normal business operation. So at this stage there are no major divestments plans to highlight what does the kind of review would do every year.
And just put you back.
Just to add hitting a shot done.
We are likely to my thing or a large cash position, which is Brett it's prudent given the current what opportunity and as we see big crisis or passing away then they'd yesterday my discussion redeem shut them afterwards.
So all then you're talking about what it's really going to be tackling that.
The other thing.
The other thing review just from the U.S. our.
Our industry, leading margins also provides us with more flexibility in times like this so our industry leading margins is also very important components on how to others storms like this.
That's great. Thanks, a lot.
Thank you.
Our next question comes from line of Simon House a city.
Oh, Thank you I'm hungry to Hunton and do T for me as well, please I'm, particularly interested to come back on those cost mitigation points you were talking about that clearly knows the business you've been at the forefront of driving efficiency.
The organization over many many years when we look really where you were targeting the short term savings should we really be thinking about the the variable marketing spend really taking up the lion's share a up those possible synergies I imagine the fixed cost elements of U.S. DNA expenses, excluding marketing a very high end probably difficult to address at this stage.
Is that right. He's anymore color you can give me to help me think about.
The opportunity that you've got to address the cost base there.
And maybe secondly, I just going back to China, just particularly the Budweiser brand could you talk little bit more about the performance of Budweiser outside the U.S., but particularly in regards to China through the quarter Pops out things have developed I was hoping to marching into April.
Okay.
Okay sensor in terms of course, Mitigations I mean, if there's one thing that's very.
An integral part of our DNA.
This idea of doing a very efficient resource allocation and you're right you're in times like this you look at everything that discretionary sales and marketing Capex.
Travel meetings trains.
You do have a hard look it's not that were not invest in sales and marketing, but for sure is absent channels that makes sense in running back than others that are like the on premise.
Well so looking at structure in the sense that we're redeploying people to keep it is there more needed. So theres more activity New York trade were getting people from your own freight putting them in the off trade.
There are more activity in the commerce, we're trying to staff. Accordingly. So this is a very dynamic prices.
A one that we're very used to so dessert primes, when our culture really rights to the challenge because we're supposed to location something that we believe we're very a job doing it.
In terms of Budweiser in China.
Budweiser remains the number one brand for the brings segment in China, It's a very strong franchise.
Suffered of course is all brands suffer with the shutdown complete shut down the chime in February and it's coming back now to life.
Has a little bit of a lag compared to other parts of our portfolio because the night life is recovering yes, but at a slower face those are more sophisticated.
Okay.
For the social distances harder to Manish.
So they are reopening but not at the same stays the same home channels or the Chinese western channel, but as they reopen Budweiser benefit big time.
The other thing we can see China is that our super premium.
Segment is a with all those restrictions continues to grow and never channel.
And continues to outperform other segments and continue to goods contribution across our portfolio.
And so again rent wise or the Brent Budweiser continues to be the number one position to print segment in China continues to be very strong.
In the night life of course is very important channel for Budweiser, and that's coming back as well with a little bit of a lag compared to other channels.
Okay. That's very helpful color just sort of ask like are you able to give us some idea of how big that sort of address civil variable cost spaces that you'll.
Targeting at the moment please.
No at this point, we don't have an external number dimension, but a it can be assured that we're doing everything we can to turn variable and fixed cost him to variable costs and to relocate costs, where there are more effective.
During the current circumstances and given the current consumer trends.
Got it thanks for the.
Thank you.
Our next question comes from the line as trusted events, James I've read them.
[laughter] good afternoon towards just to one just on South Africa. This is a huge do use now has actually that fits the seventh consecutive quarter of very strong.
Margin compression that we have seen a and even if we look beyond cope with a man as we started a bottoming, but bottoming at this point and what are the C pulse to recovery of that margin.
I think on my numbers the slowest its 15 years in South Africa.
The second question is once it becomes very clear on your statements you guys are quite an agile.
Innovation. So lot of quick changes take you did are there any management routines behaviors systems. They think it'll be more permanent that's FICO backs to the new normal.
Thank you.
Well, it's just in terms of margin them in Ah first let's say, we're very happy with our performance in South Africa, and then if you look at our first quarter avoiding grill grew by low single digits and that's already many quarters I went back to one growth strong one growth same with net revenue in that Robert Peck litter also grew by low single digits. So in terms of.
Pardon South Africa.
This has allowed to do is our higher cost of sales per hectoliter due to a premium mix as well as some phasing the cost of sales in yeah. First Q 19 that will normalize over the years also we had increases in sales and marketing investments behind a growing premium brand portfolio in on trade programs. So you know.
Well here for the long term. So he is asking for the long term.
And we also implemented some price moderation strategy on one of our brands the biggest Brent carbon black label in March 19, which drove double digit volume growth.
So we think those are important metrics.
With some obtained in the short term, but we believe there was a very very good for the long term and renders business for the long term I would not take this is a.
A sign that margins South Africa are permanently under pressure.
I think we did some adjustments.
And we also have some commodity and FX pressure, but a in our view this rule.
This will be conducive to a better future in terms of portfolio rebalancing and more of a balanced top line growth.
In terms of management routine.
Got it became clear to us is that consumer trends that were already there.
Being accelerated in the big way.
Beat the Congress the more activities at home larger packs a super premium continues to grow premium continues to grow ecommerce, becoming more important but lots of things that we were investing already luckily for the best five years like direct to consumers like you comments like you were able to see South African investor.
Good day.
Proven to be good decisions great decisions.
And what we thought we would you be seen in terms of volumes for this initiative three five years from now we see now.
If you look at as they're delivering Brazil, we had in one month remember borders we had for the full of last year for the whole about seen one month this year.
I mean, Luckily we had all the things in place as well as be today, because the social dispensing and a difficulty mobility.
The kids in many countries.
Or b to B has provided or update beat to the is provided to be an amazing competitive advantage and actually in some markets. We see some other consumer product companies come to us.
And to join our beat to the platform.
Marketplace teacher, because they see that Oh, that's a the tonnage right for this kind of b to B application. So very happy that we started investing that's in our ZX.
And our solutions five years ago.
And that we're now [noise].
Reaping the benefits [noise].
Thank you [noise].
Thank you Peter.
And ladies and gentlemen, we have time for one more question. My final question will come from the line of Robert Ottenstein Evercore ISI.
Great. Thank you. Thank you very much.
Brito My understanding is that you know you're very target driven organization a the targets.
You know developed you know the prior year I Dunno November December you know and Cascade down you know from you right to the organization a and they're generally you know for your targets.
You know given the you know incredible changes that have happened I mean, it's it's a whole new world today, and it's not only a whole new world today, but it could be a whole new world three months from now six months from now.
Hi, and tremendous volatility.
Changes from governments that have huge impacts that are very different.
Country by country and hard to predict in that kind of environment given your target driven structure, how do you in power local flexibility and agility to best execute thank you.
That's very good point, Robert because you're right targets important, but even more important than targets is common sense and probably weren't deciding so in this whole crisis started we set out priorities to our people that were very clear from day. One you said priority number one set of our people.
Second we have to be part of the solution for communities will have to help communities deal with the kinda pandemic, they're dealing with third we have to keep our business operating as long as we have the permits and we operate in safe manner. So business continuity fourth we have to prepare as we learn more through the crisis for a strong recovery.
Five we need to understand consumer trends and what the future look like so we can adjust our strategy and company in structured to what's to come and on top of all that we need to keep it varies from liquidity. So people are very clear.
On the very beginning of this pandemic on where our priority is worth.
And because we have a and at least system that we do every month. The last estimate for the next few months that became more the North Star then the original targets and now in June July.
After we see countries reopening in May and June from what governments is saying that can change we're gonna do and we view of targets in light of for more information. We'll have then but for now the priorities are very clear and daily is our north star.
Thank you very much.
Thank you Robert.
I mean, he's Intel.
Any more questions where you.
No that was our final question.
Okay. So thanks Maria let me just say a couple of things to finish the call here. So it doesn't certain times, it's important to focus on what we can influence and impact we're committed to protecting the health and safety of our people supporting local communities in connecting with our customers and consumers innovative ways. When this together it'll continue do.
The other part.
Our cultures that strong as ever and our people are stepping up with the passion commitment to owners. We're privileged to lead the goal would be a category a category that has existed for centuries through many crisis it'll continue to thrive long. After the current crisis is behind us equals I'd like to say thank you.
Thank you to doesn't front last their commitments to keep in safe, especially the healthcare workers around the world and thank you toward teams working with tremendous agility resilience and dedication, especially those on the ground frontline insurance business continuing in the challenging times I'm, so proud to be you're calling.
For joining the call today, I hope uniontown to stay safe and healthy we hope to celebrate the strong recovery over a beer soon thank you very much have a great day bye bye.
Thank you. This does conclude today's earnings conference call I'm webcast. Please disconnect your lines and have a wonderful day.
[noise].