The Kraft Heinz Co. (KHC) Q2 2021 Earnings Call Transcript

The Kraft Heinz Co. (NASDAQ: KHC) Q2 2021 earnings call dated Aug. 04, 2021

Corporate Participants:

Christopher Jakubik — Head of Investor Relations

Miguel Patricio — Chief Executive Officer

Carlos Abrams-Rivera — U.S. Zone President

Paulo Basilio — Chief Financial Officer

Rafael Oliveira — International Zone President

Analysts:

Chris Growe — Stifel — Analyst

Alexia Howard — Bernstein — Analyst

Andrew Lazar — Barclays — Analyst

Bryan Spillane — Bank of America — Analyst

Ken Goldman — JPMorgan — Analyst

Jason English — Goldman Sachs — Analyst

Carla Casella — JPMorgan — Analyst

Robert Moskow — Credit Suisse — Analyst

Presentation:

Operator

Good day, and thank you for standing by. Welcome to The Kraft Heinz Company’s Second Quarter 2021 Business Update Call. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Christopher Jakubik, Head of Investor Relations. Please go ahead.

Christopher Jakubik — Head of Investor Relations

Thank you, and hello, everyone. This is Chris Jakubik, Head of Global Investor Relations at The Kraft Heinz Company, and welcome to our Q&A session for our second quarter 2021 business update.

During our remarks today, we will make some forward-looking statements that are based on how we see things today. Actual results may differ due to risks and uncertainties, and these are discussed in our earnings release and our filings with the SEC. We will also discuss some non-GAAP financial measures today during the call, and these non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. And you can find the GAAP to non-GAAP reconciliations within our earnings release and the supplemental materials posted at ir.kraftheinzcompany.com.

Before we begin, I’m going to hand it over to our CEO, Miguel Patricio for a few quick opening comments.

Miguel Patricio — Chief Executive Officer

Thank you, Chris, and thank you, everyone. I’d just like to add or summarize and tell you that we are very optimistic about how we are progressing in our transformation at Kraft Heinz. We’ve been taking advantage of the scale that we have, and we’ve been building the agility that we need to build better business for the future.

We posted sustainable top line and bottom line gains versus ’19, and we are encouraged because the strongest growth comes from priority platforms and markets, what we call the growth platforms, Taste Elevation and in emerging markets, and we continue to seeing retail very strong and we are coming back with food service. It’s recovering and recovering fast.

Transforming Kraft Heinz is what we all have in mind, and we want to do that maintaining the industry-leading profitability. We are investing more in our brands and better as well, building a much more creative company. We are also on-track to deliver the $400 million of gross efficiencies in 2021 and effectively managing inflation.

At the same time, we continue strengthening our portfolio and improving financial flexibility. We are adding capacity to our products to drive Grow and Energize platforms and — in the emerging markets. We, as you know, closed the Nuts divestiture and we expect to close the Cheese divestiture in the second half of this year.

Recently, we acquired Assan Foods in Turkey. It’s a very small operation, but is a very important step into our strategy, because accelerates Taste Elevation and is in emerging markets. And we continue to pay down debts and improve our net leverage.

We continue to expect to have a very good 2021 actually to deliver a stronger 2021 than we projected when we provided our initial outlook in February. And that speaks to the strength and potential of our ongoing business.

Thank you. We are now ready for your questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Chris Growe from Stifel. You may begin.

Chris Growe — Stifel — Analyst

Hi. Good morning. I just had a quick question for you, if I could, please, in relation to pricing. And I was just curious if you could maybe give a little more color around the price realization and how you expect that to kind of build for the second half of the year. And just as a backdrop, as I look across your categories, some — in some cases, Kraft’s pricing is above your category, some a little below. But all in all, like the IRI data in the U.S. would say, you’re pricing at a little slower rate than what the categories are overall. So I’m just curious if that’s strategic in helping drive your share gains or if that’s just timing, and there’s more pricing coming in the second half of the year. Thank you.

Miguel Patricio — Chief Executive Officer

Okay. Thank you for your question. Let me start and then maybe Carlos and Paulo can give you more color on that. As I mentioned on the call, we believe that inflation in our business remains manageable. And even with the inflation, we expect to deliver, as I said, a stronger 2021 than we projected before. We continue to invest in our brands at the anticipated levels to drive our transformation, and we will continue to monitor things and take further action if, of course, it’s necessary. But Carlos, maybe you can give more color on it and maybe Paulo as well.

Carlos Abrams-Rivera — U.S. Zone President

Sure, Miguel. Thanks for the question. First, I think I will say is in the U.S., what we have said in the past is that we are proactively managing against the incremental inflation we see. And actually, we feel good about our ability to implement those actions when and where we see the need. So if you look at the inflation we saw in Q2, it’s mainly coming from ingredients, things like soybeans, edible oils, packaging and some transportation as well, and it’s very similar to what we saw in the first quarter. And most recently, we also saw some increases too, but driven by resin cost and some higher transportation rates.

Now from a pricing perspective, as I mentioned on the call, we are restoring key promotional activations to drive the business versus the pandemic-induced pullbacks that we had in 2020. Now as we have mentioned earlier in the year, our goal continues to be to connect with consumers that now have discovered or rediscovered our brands and drive the repeat rate among those households. So in that context and versus inflation, again, we feel good about our ability to achieve the net pricing we need to offset inflation and maintain strong household and repeat rate given that we are renovating our portfolio to drive better value for consumers, improving the creative content of our marketing and strengthening and diversifying our media impressions.

What I will also add is that we’re doing this primarily through four key revenue management initiatives. First, we’re optimizing the frequency and depths of our promotion, while we restore retail activation levels that I discussed in the call. Second, we are doing broad-based pricing actions, which we have announced across our portfolio. Third, we’re continuing to manage key commodity pricing. And lastly, we’re using other revenue management levers, including price pack architecture and managing our category price ladders.

So if you look at our revenue management initiatives, they are guiding our smart trade investments, so we can optimize returns on those investments and manage through the current inflationary environment. Now in the near term, the timing of cost inflation versus price realization may lead to some degree of margin pressure, but this is reflected in an outlook. And we see net pricing and cost coming into balance as we exit the year.

And with that, let me pass it over to Paulo. Any other comments, if you want to add, Paulo.

Paulo Basilio — Chief Financial Officer

Sure, Carlos. I think if you want to like frame inflation and pricing from a total company perspective, to break it down, first on inflation, you’re going to recall that in April, we said that we’re expecting inflation in the mid-single-digit range as a percent of COGS, but at the lower end of that range. Since April, our costs have continued to move higher. Now we are expecting inflation still in the mid-single-digit range for the full year, but now it’s slightly above the midpoint of the mid-single-digit range.

Regarding pricing, as we are mentioning, and Carlos has just said, we are using multiple revenue management levers, including lease price actions to manage the inflation. But I think it’s important for us to keep in mind that we’re going to be facing an unusually difficult pricing comparison in the second half last year.

Just to remind, just for context, last year, second half, our price was more than 4% higher than the prior year as we pulled back on promotion to better protect customer service.

In terms of the timing and the pricing realization, why we expect the timing of the cost inflation versus price realization to soften, our margin percentage to lower than the run rate levels in the short term, I think it’s important to note that all of those impacts are already considered in the outlook that we have for the year, okay? And again, as we mentioned at the beginning, we are still expecting — or now expecting a even stronger EBITDA dollars than we anticipated before.

Chris Growe — Stifel — Analyst

Thank you for the color.

Operator

The next question comes from Alexia Howard from Bernstein. You may begin.

Alexia Howard — Bernstein — Analyst

Good morning, everyone.

Miguel Patricio — Chief Executive Officer

Good morning.

Alexia Howard — Bernstein — Analyst

Yes. Thank you. Can I ask about the gross margin? I know that it doesn’t really appear anywhere except in the formal numbers in the press release. But it looks as though it’s down about 150 basis points year-on-year. I imagine that some of that might not be adjusted gross margin. But in a situation of such intense commodity cost pressures, as we’re going through now, I’m just wondering how you’re expecting that to shape out in the back half of the year, possibly out into 2022. Any commentary would be much appreciated. Thank you.

Paulo Basilio — Chief Financial Officer

Alex, I can start here, this answer. I think, yes, there are some adjustments to make in the gross margin. But when you think about year-over-year, I think we need to remember that we’re going to be lapping. We were lapping Q2, a big quarter last year, with the old pantry loading that happened in the quarter. So our overall margins of the business are very healthy in this Q2. So I think in the second quarter, we were able to price — we had enough pricing to offset pricing, plus our efficiencies were more than enough to offset our — the inflation that we had. But we were — compared to a very heavy mix that we had in the last quarter.

Alexia Howard — Bernstein — Analyst

Great. And going forward, how do you expect it to change in the back half?

Paulo Basilio — Chief Financial Officer

Going forward, what is exactly, I think, the key components that we are going to see in the back half is that we’re going to start to have — and that’s already embedded in our outlook, okay? We’re going to start to having the restoration of some promotions that Carlos mentioned. Also the mix impact that you’re going to see when — with the — as the year goes on, and also this timing between pricing and — pricing realization and inflation will impact our gross profit. But all those impacts are already inside the outlook that we disclosed.

Alexia Howard — Bernstein — Analyst

Great. Thank you very much. I’ll pass it on.

Operator

Our question is coming from the line of Andrew Lazar from Barclays. You may begin.

Andrew Lazar — Barclays — Analyst

Great. Good morning and thanks for the question. I guess, obviously, it’s way too early to talk specifics around 2022, as we know much can still change. But I wanted to go back to the slide presented at the Investor Day in September of last year. And from that presentation, on the base business, so excluding divestiture impacts, it looks like EBITDA was expected to be roughly flattish in ’22 versus ’21. And I guess, I’m just trying to get a sense of, at this stage, would that still be the expectation such that we just have to strip out divestitures to get a sense of it? Or maybe has the inflation environment and longer tail to at-home eating benefits sort of shifted this thinking at all? Thanks so much.

Miguel Patricio — Chief Executive Officer

Let me answer, and then maybe, Paulo, you can bring more precise numbers to Andrew. We are expecting 2022 to be better than the strategic plan that we presented to you. And why is that? I think our transformation is ahead of our plan. We’ve been beating our plans and our budgets, and we are optimistic and continue investing toward the future.

It is still too early to talk — for us to be talking or to give you guidance about 2022. With all the volatility in the market, I think it’s prudent not to go further on that.

Paulo Basilio — Chief Financial Officer

So Andrew, just to complement here. I think as the year progresses, as Miguel mentioned, one day later in the year, we will be providing more clarity about how we’re seeing the 2022. We are not discussing this today, but we can say that we see inflation as a consistent theme for us and for the industry ahead of ’22. And all those initiatives and actions that we are doing in terms of revenue management initiatives to manage the inflation, we are seeing, based on expectation, that the inflation will continue into the next year. I think those initiatives, together with our savings program, the $2 billion savings program, will be sufficient together with the investments that we are making to improve the relevance of our brands. So again, we are very confident around our ability to manage the inflation and support the investments behind our turnaround as we are exiting ’21 and entering ’22.

Andrew Lazar — Barclays — Analyst

Thanks, everyone.

Operator

Our next question comes from the line of Bryan Spillane from Bank of America. You may begin.

Bryan Spillane — Bank of America — Analyst

Hi. Thanks, operator. Good morning, everyone. So I’ve got a question, I guess, for both Carlos and for Rafa, if you could both comment on this. In the quarter or even year-to-date, currently we’re seeing basically all channels are up, right? I think it was — I think that’s been sort of one of the surprises as we move through ’21, is that as away-from-home and foodservice channels have improved, the at-home consumption has also stayed relatively elevated. So I guess, my question for both of you is just simply how long do you expect this to continue? And I guess, as things normalize, would you expect the foodservice piece of it to really begin to accelerate more and somewhat offset the at-home consumption? So just trying to get a sense of how you’re thinking about those two channels, especially since, right now, they’re both up.

Carlos Abrams-Rivera — U.S. Zone President

Listen, first of all, thanks for the question. I think it’s very fair. Let me start, and then I’ll have Rafa kind of give a perspective on international. I think from — in the U.S. from an industry perspective, you’re right. Channel trends are still normalizing, but I have to also say it’s too early to tell how the share of stomach between away-from-home and at-home, ultimately, is going to kind of all net out.

Now recently, it does seem like all channels are growing, but that’s probably not likely to remain the case, and that’s not buildings necessarily into our expectations. Now in terms of our business, what we see is we’re optimistic about our plans that we can actually drive sustainable growth in both the retail and the foodservice. And I think it’s fair to say that we also have a big ambition from away-from-home business. We believe foodservice is actually both a generation of insights and innovation that can actually help in the retail side of the business. And it’s also capable of driving outsized growth because we have actually put a renewed focus on culinary distribution and channel expansion. And some of those channel trends, while still normalizing, it’s still a little bit early to say, predicting exactly where it’s all going to happen.

Now what I do say is that I do believe we’re going to be stronger versus what we saw pre-pandemic and essentially for two key reasons. First, because our foodservice mix favor the QSR. And actually, that stands to recover, and we are seeing that already faster than the rest of the foodservice channel. And we also see that be more resilient post-pandemic. And frankly, early in the pandemic, we also made a strategic bet to support that growth in QSR, and that bet is paying up. We now have 30% more capacity in our small packet of ketchup and sauces. So that actually has been seem to be working.

And secondly, we see a more durable step-up in at-home consumption that comes at the expense of other categories and brands without necessarily sacrificing foodservice recovery and growth.

And then lastly, let me just give you a little more color on the away-from-home. I mentioned that we gained a point of market share, foodservice recovery begins, and much of that actually was fueled by the actions we took in three areas that I mentioned: culinary, distribution and new channels.

So in Q2, we actually executed nine co-branded culinary limited time offers with QSR partners. Just one of those was actually so successful because when it became part of a permanent menu item, and that was going to be in ’22, and if you think about that context of the fact that we’ve been able to drive those kind of limited time offers with QSR, in 2019, we had none of those. So we are certainly driving a different level of execution with QSR.

Now the second part of that, which is distribution, we actually grew key accounts by 20% over the said quarter. And then finally, as consumers continue to evolve, how they cook and they eat and including the use of meal delivery kits, we’re actually inserting our Kraft Heinz brands into that equation. So we are working with one popular direct-to-consumer company to develop things like a recipe specifically for our Philadelphia Cream Cheese as a main ingredient of their products, and that actual one product was ordered over 200,000 times, with — by consumers, really an all-time record for that sales partner.

So when you look at it holistically, again, I feel very optimistic about our away-from-home business, and that it actually is going to be a springboard for us to continue to drive retail growth. Now that’s a perspective in the U.S. And Rafa, if you want to add something in terms of the international business, how you see it.

Rafael Oliveira — International Zone President

Yes. Thank you, Carlos and hi, Bryan. Look, on balance, our developed markets are experiencing very similar trends to retail and foodservice in U.S. and Canada. Emerging markets, on the other hand, foodservice has actually rebounded stronger than in developed markets, right? And most countries either had shorter or even stricter lockdowns, but kept their economies open during the pandemic overall. So I mean, the consumption obviously differs country by country in home and out-of-home. The path of the pandemic, lockdown approach, vaccine availability changes a lot. And given the Delta variant now, it’s a bit early to tell how the channels, where the channels will stabilize, right, in the second half. But all that said, I mean, we are seeing a lot of improvements on the retail channels, especially in Taste Elevation and giving us like a lot of confidence that we will come out of the pandemic well positioned, right, after the pandemic.

On the foodservice side, our mix is even more weighted towards QSR than the U.S. is. So the format — and this format is recovering very quickly. So with distribution gains in emerging markets and the potential of the foodservice that we still have across our overall international, I’m still quite optimistic that after the pandemic ends, the net will be quite positive.

Bryan Spillane — Bank of America — Analyst

Okay. Thanks, Rafa. Thanks, Carlos.

Operator

Our next question will come from the line of Ken Goldman from JPMorgan. You may begin.

Ken Goldman — JPMorgan — Analyst

Hi. Thanks. Would you ever reconsider your policy of not guiding to annual sales and EBITDA? I realize it’s been company policy for a long time, except in rare cases not to give much. But I imagine you could avoid some confusion about, let’s say, I guess, “good or not quite as good print” if outsiders had a basic bar against which to compare results. And I guess, in that way, we can give you more credit when you do come in ahead of expectations. Just curious if that’s a possibility. And I guess, if nothing else, it would probably make Chris’s life slightly easier too.

Paulo Basilio — Chief Financial Officer

Thanks for the comment, Ken. We will discuss this internally, and we’ll let you know.

Ken Goldman — JPMorgan — Analyst

Thank you.

Operator

Our next question comes from the line of Jason English from Goldman Sachs. You may begin.

Jason English — Goldman Sachs — Analyst

Hey, good morning, folks. Thanks for slotting me in. A couple of quick questions. So you guys mentioned that you’ve implemented pricing actions, begun to raise those prices. Can you give us some quantification there? Overall, on average, what is the price increase that you’re pushing through? And how does it vary across different products?

Miguel Patricio — Chief Executive Officer

Well, let me say, Jason, that let me — I guess, let me give you a little bit more context, which is if you think about our portfolio, we’re really more diverse than most of the peers that we compete with. So our approach to pricing is not unique in terms of just having one solution. So we are — we have to be more precise in certain categories and really broad strokes across entire portfolio. So what I can say is our actions that we have taken in pricing had covered the majority of the portfolio, and that actually has quite a bit of wide range of percentage increases. So it’s hard to kind of give you a specific answer.

Now what I will tell you is that we have taken actions to mitigate those incremental inflation that we’re seeing, that we feel comfortable in our approach, that we feel very good about how we are managing and that we’re going to continue to monitor things and take further actions if necessary. Thanks for the question, Jason.

Jason English — Goldman Sachs — Analyst

Thanks. But you don’t know what your weighted average price increase is across your portfolio?

Miguel Patricio — Chief Executive Officer

Listen, I mean, I think this is something that — for us, it is not something that we’re going to be discussing and — but happy to continue to have the conversations about how we are responding in this moment and how we are feeling that it’s very much a manageable solution from us.

Jason English — Goldman Sachs — Analyst

Okay. And one more then just on the inflation. Can you give us the quantification of what the rate was in the quarter and what you expect in the back half? I see the total for the year going from low end to mid-singles to high end. I’d love to just zoom in a little bit on the near term. Thank you.

Paulo Basilio — Chief Financial Officer

Listen, it is pretty much in that range, Jason. You need to remember also that in the Q2, we had part of this — we have a higher pressure on the meat commodity, especially in bacon. But I can tell you that in the first half of the year, it — our inflation rate was in the low — the very low end of the mid-single-digit range, including this big pork component, and that’s the range that we saw for the quarter-two.

Jason English — Goldman Sachs — Analyst

Okay. Thank you. I’ll pass it on.

Paulo Basilio — Chief Financial Officer

Welcome.

Operator

Our next question will come from the line of Carla Casella from JPMorgan. You may begin.

Carla Casella — JPMorgan — Analyst

Hi. You mentioned that you’re maintaining your leverage target of below 4 times, and you’re currently at 3 times. Would you ever think of changing that target to lower it? Or are you leaving that flexibility just given your outlook for either the business or other potential either M&A or shareholder-friendly activity?

Paulo Basilio — Chief Financial Officer

We are — thanks for the question. We are keeping — we are not changing the target of leverage to be below 4 times in a consistent way. Let’s remember also that this 3.1 times that we closed, there is — that would go to 3.4 times if we adjust by the EBITDA that we lost — that we’re going to lose, right, the pro forma adjusted for the EBITDA of Nuts that was the of — that we divested. But yes, the idea is to keep the same policy and to give us more flexibility to accelerate our strategy. And again, we are going to operate with flexibility going forward.

Carla Casella — JPMorgan — Analyst

Okay. Great. Thank you.

Christopher Jakubik — Head of Investor Relations

Maybe just one more question.

Operator

And our last question will come from the line of Robert Moskow from Credit Suisse. You may begin.

Robert Moskow — Credit Suisse — Analyst

Hi. Thanks for the question. Maybe a two-parter. One is, do you think that you will increase media again in 2022? And then the second question is regarding what’s changed versus plan, it would seem like the biggest change has been the categories. Your category growth, or at least resilience, has been much stronger in 2021 than expected. I think you entered the year expecting market shares to grow. So maybe you could decompose those two things as to which of those really drove the outperformance in 2021. And then also for your back half guidance, second quarter categories have been pretty resilient. Are you expecting a drop-off in category performance in third and fourth as people go back to work and consumers go back to school, specifically North America retail?

Miguel Patricio — Chief Executive Officer

Let me answer the first part regarding marketing and media, and let — I will pass the second one to Carlos to talk more specifically about the categories in U.S. Let me say that, first, we are excited about the changes that we have been making in our marketing programs and capabilities. We’ve been investing not only in our brands, but also in our people. This is an area that I’m very passionate about and — given the importance that it has to drive our growth. We are driving improvements actually a couple of ways. The first one is more marketing dollars, right, that we put — we have $100 million more in marketing than we had in 2019. And we said that we want to increase marketing moving forward. So it’s our intention. However, I think it’s not only about increasing marketing. It’s really about efficiencies. We are today achieving 30% more of our consumers with the same spend by doing better marketing, not only better marketing, but also better media.

And third, I think I’m very excited about stepping up on creativity in our company today. We started an internal agency in digital media in Canada and — in May last year. And today, we have 12 of these internal hubs in different places covering more than 30 markets around the world. And that is critical for marketing efficiency because it’s faster, better and much more creative. And we can really have marketing linked to the culture and we need to be very fast on that. So overall, that would be my answer for marketing. Carlos, you may answer the second one.

Carlos Abrams-Rivera — U.S. Zone President

Sure. I can just build on your point, Miguel. Specific to market share and our performance, I would say we’re off to a very solid start to the year. And you saw in the presentation, we are seeing household penetration and repeat rate, growth rates much higher than pre-pandemic levels. And we are gaining share in actually 58% of the business, and it’s an improvement from last quarter where — and certainly from what we saw in 2019 pre-pandemic. And I think that when you take a step back and you look at our overall performance, I think what we are proving is that our consumer platform approach, our focus on renovation, innovation and marketing and our resale activations, they’re all working.

Now as we’re going forward, we will continue this agenda. We’re going to increase support around key holidays, while using price, promotional optimization and, as I mentioned earlier, all the revenue management tools to manage the inflation.

Now for our total business, and I think to your point about asking about the future, there are several factors impacting the category performance. But I would say the most important is that we believe we’re in a strong position to balance share with profitability to continue to deliver strong returns. So thanks for the question.

Paulo Basilio — Chief Financial Officer

Just one comment on that just to build on what you’re seeing and what — and the question here on the outlook. I think it’s also relevant to say that while our outlook implies a lower EBITDA margin in the short term, in the second half in the Q3, and we expect to — we don’t think that, that EBITDA margin is representative of the run rate, as I said. And we expect that to improve back to normal levels as we enter into 2022 and when our price realization start to catch up in our results.

Robert Moskow — Credit Suisse — Analyst

I’m sorry. I just — I want to press a little bit more. This is really a question about your categories. Like do you expect your categories to face pressure in third quarter and fourth quarter compared to the first half because of people going more to work and because of students going back to school? Or do you think it will look more similar to the second quarter?

Carlos Abrams-Rivera — U.S. Zone President

Yes. Let me just give a perspective, I guess, in the — at least in the U.S. piece. I mentioned that there were several factors that is kind of taken into consideration how the categories are behaving. And I think that there are three things in particular that we are looking at, that there are certain things around the fact that there are hybrid working schedules. We see in the home purchases and the renovations and the new consumer preference that are actually likely to keep people at home, the higher level of home consumptions that we have seen in the past.

We’ve also now seen the Delta variant and the rising case counts across the U.S., and those are factors that we’re also closely monitoring and, in particular, because they are important in terms of thinking about how families are preparing for the upcoming school year.

So I think that all things that are — that make it very difficult for us to say at this point is exactly how this is all going to shape out. What I can tell you is that we are focused on those things we can control. So we are focused on making sure we improve agility and execution, as Miguel said, that we continue to invest behind our brands to build relevance and compete for those occasions through our consumer platform-based approach, regardless of how we see this happening and unfolding.

And so far, we are pleased with how we are showing up. So we believe we can continue to see the fact that we are able to drive the household penetration repeat rates. And I mentioned earlier in the call, right now you see all channels growing, but realistically that is not right now our expectations as we go through the second half.

Robert Moskow — Credit Suisse — Analyst

Okay. Thank you for indulging me. Appreciate it.

Christopher Jakubik — Head of Investor Relations

Great. Well, thanks, everyone, for joining us today. If you have any follow-up questions, Investor Relations and the Media teams will be available for your follow-ups. But thanks, everyone, for joining us today.

Operator

[Operator Closing Remarks]