Beam Therapeutics Inc.
Q4 2011 Earnings Call Transcript

Published: 3 Feb 2012

[Operator:]

Good morning. My name is Martina, and I will be your conference call operator today. At this time, I'd like to welcome everyone to Beam's Fourth Quarter Full Year Earnings Conference Call. [Operator Instructions] Now I would like to turn the call over to Matt Shattock, President and CEO of Beam. Sir, you may begin your conference.

[Matthew John Shattock:]

Thank you, Martina. Good morning. Our CFO Bob Probst and I would like to welcome you to our discussion of Beam's 2011 fourth quarter and full year results. And before we begin, please note that our presentation includes forward-looking statements. These statements are subject to risks and uncertainties including those listed in the cautionary language at the end of our news release, and our actual results could differ materially from those anticipated. This presentation also includes certain non-GAAP measures that are reconciled to the most closely comparable GAAP measure in our news release or in the supplemental information linked to our Webcast and Presentations page on our website. 2011 was an extraordinary year for Beam. As we review our results and our outlook for the future, I'd like to emphasize 3 points which give us confidence in our ability to deliver our commitment to our shareholders. First, we launched Beam as a leading standalone spirits company with great success. We have an excellent team, a clear strategy and a strong capital structure, reflected in our recent synergy-driven acquisitions, all of which enable us to be a leader in the dynamic spirits industry. Second, even as we transitioned to a pure-play spirits company, the Beam team executed well against our growth strategy in 2011 and delivered a set of results that met or exceeded all of our 2011 targets. Our net sales increased 8% on a comparable basis, well ahead of our markets, and our adjusted pro forma diluted EPS increased 10%, and we achieved our target to convert at least 90% of our earnings into free cash flow. And third, we feel very positive about the current performance and outlook for our business. We finished 2011 with a very good fourth quarter that was slightly above our expectations, reflected in solid comparable sales growth and profit leverage. Q4 comparable sales increased 4%, despite the adverse impact of the timing of sales in Mexico and Australia, which effectively reduced sales growth by approximately 2 points. Market-beating performance for our global Power Brands, as well as new product launches, helped drive our gains in the quarter. Fourth quarter adjusted pro forma diluted EPS was up 9%. Moreover, we're encouraged by our continued momentum as we start the year and the exciting plans we have to keep outperforming in 2012. Our confidence in our prospects for 2012 is rooted in a couple of key dynamics. First, we expect to grow sales faster than our markets due to the strength of our Power Brands and Rising Stars, our pipeline of new product introductions in 2012, sustained premiumization and the continued consumer excitement around the bourbon category. And second, our earnings will benefit from our accelerated cost reductions, offsetting raw materials inflation; our competitive level of brand investment, which is now in line with sales growth; and the leverage of our fixed cost base. So we feel very good about our earnings target for 2012, which we'll discuss in greater detail later. So let me now step back and build upon these themes by describing how we are putting our growth and return strategy into action. We continue to focus on disciplined execution of a simple and effective 3-point strategy

[Robert F. Probst:]

Thanks, Matt. I'll start with a reminder that until we annualize the separation of Fortune Brands' businesses, we'll continue to present our results on both a GAAP and adjusted pro forma basis. Three points

[Matthew John Shattock:]

Thank you, Bob. Well, as we enter 2012, we're encouraged by our continued marketplace momentum. We expect our global spirits market to continue to grow in the range of 3%, supported by solid growth in mature markets, such as the U.S., and double-digit growth in key emerging markets. Against this backdrop, we see market growth across the key spirits categories, including strong worldwide demand for bourbon. We built our brand investment to competitive levels, we're focusing that investment on our biggest brand initiatives in our best markets, we have a robust new product pipeline and our unique combination of scale with agility is a competitive advantage. In 2012, we believe Beam is primed to solidly outperform our markets at the top line, expand operating income faster than sales and grow diluted EPS even faster. On the back of our very strong 2011 results, our earnings target for 2012 is to grow diluted EPS before charges and gains at a high single-digit rate against our 2011 base of $2.12. And let me underscore that, with continued momentum of the top line, we expect to deliver high single-digit EPS growth, even with our assumption of a low single-digit growth for our global market and a modest pricing environment. Beam is already off to a strong start in 2012, and our prospects are enhanced by our upcoming market initiatives and innovations. Some of it will favorably impact Q1 results. We'll also continue to see the benefit from Skinnygirl as we annualize the acquisition late in Q1. Lastly, I think it's important to underscore that 2011 was a year of dramatic change and progress for Beam. A year ago, we were part of a diversified consumer business. Today, Beam is a leading pure-play spirits company with strong current performance and excellent future prospects. The people of Beam feel very good about how far we've come, where we are and where we're headed in 2012 and beyond. Bob and I would now be pleased to respond to your questions.

[Operator:]

[Operator Instructions] Your first question comes from the line of Judy Hong from Goldman Sachs.

[Judy E. Hong:]

First, just in terms of the sales momentum, it sounds like Q1 is off to a pretty strong start here. Maybe put a little bit more quantification just in terms of is it more market-driven? Are you seeing better traction from your innovation pipeline? Also, the Mexico inventory drove down in Q4. Does that also benefit Q1 as that reverses?

[Matthew John Shattock:]

Judy, I'll offer a couple of comments, and I'll hand it to Bob. Obviously, it's very early in the quarter, but we have seen a continuation of the momentum we saw in the marketplace in Q4, and I think it's driven by the same underlying performance drivers. The investment we put into our Power Brands and Rising Stars is growing momentum. We're seeing the trend towards premiumization continue with our innovations, and the teams in the marketplace are executing. We said last year was about priming the business for sustainable profitable growth, and certainly, early signs are that the performance we saw across our regions as we went out of last year is continuing early in 2012. Bob?

[Robert F. Probst:]

In addition, I'd add that, that strength is across all 3 regions as we started the year. And to your question on Mexico, we certainly will see a benefit this year from the Mexico destock. That won't all come in Q1 though, Judy. That will come over the course of the year, as we gradually fill that pipeline. But we feel very good across all regions on our start to the year.

[Judy E. Hong:]

Okay. Then just on the follow-up, given how positive that you feel about your sales momentum, can you just talk about maybe pricing outlook? It sounds like you're still looking for a modest pricing at this point. What would give you more confidence that you can take more pricing, particularly as you do face more inflation in 2012?

[Matthew John Shattock:]

Judy, I may just give you a couple of thoughts and I thank you. Yes. Certainly, if I look at some of the trends in the marketplace through the lens of the U.S., though I think they're quite similar around the world. The sort of composition you're seeing of that sort of 3% market growth is probably -- half of it is coming from mix, so premiumization is clearly a positive there. About 1/3 is from volume and only about 1/5 of the growth really came out of pricing, and that was really from less discounting. And our profile was pretty similar to that, probably slightly ahead of the market on both mix and price, reflecting some of the strategies I mentioned in my previous answer. We'll continue to take some selective pricing, but we haven't seen an environment yet that will favor a broader price increase in the industry. Your specific question about what would favor that, I think a number of things. I think continuing to see consumer sentiment improve and making sure that environment is there. The fact that maybe we'll see the continuation of strength in brand-building and the momentum we're seeing. And certainly, as you say, if raw material pressures are broader across the market, that may put some pressure there. I think the good news is, as we've gone through the last quarter, our performance in that area is ahead of the market. And so whilst we are not calling out a big assumption about pricing for the coming year, I think it's probably a more positive environment than the one we saw before, maybe a year ago. Bob, anything to add there?

[Robert F. Probst:]

, I would add, if we do have a more robust pricing environment, we believe that would be an upside to the projection we gave you. We've assumed a market that really continues as we saw in 2011.

[Judy E. Hong:]

Okay. And Bob, does your guidance also include some FX impact in 2012?

[Robert F. Probst:]

Yes, it does. And as you know, for 2011, we had a significant tailwind in FX for the year on the bottom line. We realized about $15 million of OI upside for the year. As we look now at spot rates and project that into 2012, we expect to see a small amount of upside year-on-year in the range of about $5 million driven by the Aussie dollar, offset in part by the euro. But at the end of the day, largely offsetting, so not a large impact on the bottom line.

[Operator:]

Your next question comes from the line of Ian Shackleton from Nomura.

[Ian Shackleton:]

Two questions. A&P, the thing I'm taking away is we should we expect that to move up more in line with net sales growth going forward. And I wonder if you could just give us a little bit of how that work across the 3 divisions. And the second question was we’ve obviously seen some quite big distribution change in Australia and now in Mexico. Should we expect, as we go through 2012, any further moves in your distribution footprint?

[Matthew John Shattock:]

Ian, it's Matt. I'll take both of those questions and throw them over to Bob, for us to see if he wants [ph] to comment. A&P, it finished as you saw last year at about the 16% level, and that’s the sort of run rate we see going forward. I think the P&L profile, as we've now established in each of our 3 regions, are ones that we will lever against going forward. And we've, I think, got a pretty good spread of that A&P particularly as each region has a similar combination of developed but also emerging market opportunities. So I don't see significant changes in their profile. But obviously, as the market unfolds and we see opportunities, we can flex that. When it comes to distribution changes, a lot of the work, going back to the theme of priming our business for our growth in the future, was around that “I'd never say never,” “we always want to sort of display the scale with agility” sort of mindset we have as a business, to make sure we've got the right route to market, but at the same time, we don't want too much disruption. I feel very good about where we are at the end of that period. And our route to market and our alliance is there, and the models we have around the world seems to be the one serving us pretty well going forward. Bob?

[Robert F. Probst:]

We did increase, obviously, our brand investment nearly 17% in the year, as you know, in 2011, Ian. And against that, we increased brand investment across the 3 regions to a level that we feel is absolutely appropriate and right, reflecting our strategy, investing behind Power Brands, Rising Stars and our key emerging markets. So as we look at 2012, as Matt indicated, I don't see significant fluctuations by segment in terms of that bottom line OI margin impact and that BI roughly in line with sales across all 3 regions.

[Operator:]

Your next question comes from line of Vivien Azer from Citigroup.

[Vivien Azer:]

I wanted to dive a little bit deeper please into your positive commentary on the bourbon category, and in taking kind of a step back, do you have a sense or any opinion on kind of the medium-term opportunity there, i.e., a shift out of white spirits into brown spirits, and the composition of growth, flavors versus core bourbon, for the category and/or for your portfolio?

[Matthew John Shattock:]

Thanks, Vivien. Maybe I can step back and give some perspective. Obviously, it's an important and exciting subject. And it's very encouraging to see what's going on. It's about 8% of the overall U.S. category. So certainly, I would see headroom for growth, and the momentum looks very encouraging. But also we're seeing international growth, and a lot of our initiatives around the world are really starting to see that unfold. And we're pleased about Beam's performance because, in the year and in the fourth quarter, we grew share in what was a rising market. I think there are 3 factors that we need to look at as to what's driving and therefore, to your question, what will happen going forward. The first is no doubt innovation, as I've said in my comments. And certainly, what's happening there is it's bringing new users into the category, and the product is being used in new ways. If I look at the fourth quarter, I think probably about 1/2 of the growth of the category in the U.S. came from flavors and the innovation in that area, and the other 1/2 came from core products, and so that's a very healthy balance there. I think another key driver is premiumization. Premiumization has been quite late to the bourbon category versus other areas, and that's exciting. I think we've led that with our small batch brands, Knob Creek and the innovation of Single Barrel, Basil Hayden. And I think, of course, Maker's Mark being one of our absolute star performers last year, and it continues to tap into that trend. And so I think we'll see that continue. And I think it's underpinned by this overall sense of, as I said in my comments, of authenticity. I think consumers today really appreciate authenticity. Bourbon brands have got heritage, craftsmanship and great stories behind them. Certainly, our brands have that heritage. And I think that's something consumers will continue to appreciate. So what do I see going forward? I think that bourbon is set to continue to outgrow the market. As we cycle through, will it grow at double the rate of the overall market? I don't know. We'll have to see. But certainly, the initiatives we've got in place and the fundamental consumer drivers I spoke of there lead me to believe that bourbon's got a bright outlook.

[Vivien Azer:]

That's great. Just to follow up on a kind of a related note. It sounds then -- given the prospects for bourbon, that the pricing outlook would be pretty good on -- but as I looked at the tequila results for the fourth quarter, it made me think, that there are definitely some different price elasticities across your categories, at least in the scanner data that I saw on the impact on Sauza volumes from what looked to be some pretty notable price increases were a surprise. Could you offer some color on what happened with Sauza in the fourth quarter in the U.S.?

[Matthew John Shattock:]

Sure. Certainly, the tequila segment at the moment is seeing volume ahead of value, and that reflects one thing, and that's excessive supply. There is an excess of agave at the moment, and that is going to take a little while to come back for demand and supply to balance. That's allowed new entrants into the market, and it's inevitably increased price competition. And certainly, our recent share performance does reflect that competitive intensity. We're also frankly lapping an intense period of promotion from a year ago, where we really decided to draw a line and make sure we looked after our share. So as we cycle that in Q1 and go forward, I think the outlook will be more positive. Certainly, I think it's a great category for us to be in, in the long term. We've got very strong brands. I think Sauza’s positioning as the tequila for the girls’ night in. And I think Hornitos, one of our Rising Stars in the premium segment, and 100 Años, which really plays to the Hispanic user across Mexico and the States is something we feel good about. So I think in the long term, it's a category which we should feel very good about. And it's an emerging category outside of the U.S. I mean, all of our growth has been traditionally in our volume in North America. If I look at emerging markets like Brazil and Russia, there are some encouraging early signs of tequila's growth there. So I'd say, yes, it's tough going at the moment, the structure of the market, but in the long term, I think tequila will be a good place for us to be.

[Operator:]

Your next question comes from the line of Bryan Spillane from Bank of America Merrill Lynch.

[Bryan D. Spillane:]

Just I guess a follow-up to the last question to begin. Just in terms of the bourbon category and the supply dynamics there, I guess, the category is growing pretty fast. It's an aged product. I'm not sure how the industry was thinking about demand 3 or 4 years ago. So any perspective on where you think the industry supply/demand is right now and whether that might be a factor in terms of pricing going forward?

[Matthew John Shattock:]

Let me ask Bob to look at that and maybe through the lens of our perspective on inventory, and then we can broaden that out to the overall industry’s perspective, Bryan.

[Robert F. Probst:]

Certainly, from our perspective, Bryan, we don't see supply constraint issues. Where we do see, because of the tremendous growth, the impact for us, as I mentioned, is pulling forward some of those corn related costs. And also, in capital expenditures, we're going to see increases in the number of warehouses we need to house the bourbon and also the barrels to put it in. So we do see investments behind that. But in terms of our long-term projections for bourbon, we believe we can satisfy that demand.

[Matthew John Shattock:]

I think, Bryan, the other comment I would add is that, obviously, it's one of the aspects of bourbon as a brand spirit that makes this industry attractive is it does provide inherent barriers to entry because of the cycle times and the capital employed. Obviously, the other lever we have, and I'll give you an example, brands like Maker's Mark, which has shown steady double-digit increases, where we may face a scenario where our supply and demand become tight, pricing is the lever that we would pull there. And inevitably, that’s a good lever that would look to if we really got constrained on a supply basis. But in the short term, I see our balance being pretty good.

[Bryan D. Spillane:]

Okay. And then just -- and I know it's difficult for you to comment on it. But just in terms of the overall industry, do you have any sense of just what the industry supply of bourbon is like?

[Matthew John Shattock:]

Overall, I couldn't give you specific data on that. I think you'd find a similar answer to other players. I think people feel good about this industry. And certainly, if you look at some of the reports coming out of the studies from Kentucky, where most of the bourbon is located, you see growth in investment and growth in supply as people tap into that overall trend. But I couldn't give you any specific data.

[Bryan D. Spillane:]

Okay, great. And then if I may, just as a follow-up or as a question I guess, the comments that you've made about the potential for operating leverage in Asia. Can you talk a little bit more just about the investments that you've made in India and, I guess, in Brazil? And just whether it's -- I guess, if I'm hearing it correctly, you've made an investment that now can be leveraged. Or is there still more significant investment ahead? I'm just trying to kind of get a sense for at what point are we, in terms of where margins begin to inflect, especially in those 2 markets.

[Matthew John Shattock:]

Certainly. I think just let me give you a couple of broad parameters, and I'll ask Bob to give you a bit of a sort of margin perspective in those markets. Overall, our investment in those markets, India as a good example, has been in 2 things. It's in the infrastructure of the business, particularly, route to market, getting more feet on the street, as well as in brand building and making sure that brands like Teacher’s, innovations, for example, such as the ready-to-drink expression, which we launched at the end of last year, are seeding the brand and getting the trial for the long term. But also our approach to this market is a reflection of our scale with agility mindset. If, for example, we have our own sales force and route-to-market organization in India, whereas, for example, in Brazil, it's through a third party and in Russia, we have a JV. So I would not say, at any point that investment is over. But I do think that the work we did over the past year has primed those businesses, and you will see them contribute very solid profit and returns over the long run. Bob, do you want to give some more color on this particular market?

[Robert F. Probst:]

Yes, indeed. Certainly, as Matt said, for APSA, we have about an 18% OI margin, which is down a couple of points due to the investment Matt was referring to. And as we look forward then to '12 in OI margin, I would -- I'd offer that we expect that OI margin to stabilize and then, over time, to grow. The phasing of that across the course of 2012, I think, you'll see as some of that investment was back-end weighted in 2011, will require the full year view to get to that stabilization. But nonetheless, stabilizing grow over time.

[Operator:]

Your next question comes from the line of Ann Gurkin from Davenport.

[Ann H. Gurkin:]

I wanted to spend a few minutes on innovation, which has obviously been a key driver for industry growth and very important to Beam. And should we expect that same level of contribution from innovation to benefit Beam in '12 and '13?

[Matthew John Shattock:]

Yes. Ann, broadly, as we laid out in our road show, we sort of decomposed our growth of the top line into sort of 3 areas. The heart of our business is our sort of core Power Brands and Rising Stars, and our core markets are about 1/2 of our growth. And then we said, 25% each from innovation in emerging markets. Certainly, we had a very good year in '11, and I think our innovation rate was slightly above that. I'm confident that the success of those innovations and then the exciting pipeline we have for 2012 will sustain that performance going forward. So certainly, it is a key driver of our performance. And we are sort of, really, geared towards driving 25% of our growth and doing so profitability. I think the key point for innovation for our business is really that it is the Borrow and Build mantra I spoke of. It has to be brand building, and it has to contribute to the economic health of the brands. And what's giving us encouragement is the innovation we did in the past year was in the premium areas and, certainly, at the top of the P&L was accretive to our core strategic brands.

[Robert F. Probst:]

Building on Matt’s comment, we feel very good about the algorithm we gave on the road show, which if you remember, 50% of our growth coming from Power Brands, Rising Stars; 1/4 from innovation; and 1/4 from emerging markets. And in fact, we saw a very similar profile to that in '11. And as we think about '12, again, we think that algorithm holds up very well.

[Ann H. Gurkin:]

Great. And then secondly, on pricing. Are you comfortable where your prices are in the U.S. in the bourbon category and tequila? Or do you need to make adjustments with pricing and GAAP?

[Matthew John Shattock:]

I'll take the 2 categories. Certainly, bourbon, we are, I think in terms of relative positioning, in a good place. We took some selective pricing in brands like Maker's, as I said, and I think we've got our price points right. We'll see if there's a broader perspective that we can think about later in the year. And then when it comes to tequila, as I said, reflective of the supply-demand situation. That's been a more promotional-intensive area, and it's one that we'll continue to make sure we compete effectively, as we go through burning off as an industry a much higher level of supply.

[Operator:]

Your next question comes from the line of Priya Ohri-Gupta from Barclays Capital.

[Priya Ohri-Gupta:]

I was hoping we could get a little bit more color around net leverage going forward. Should we expect it to remain around that 2.5x mark or oscillate within a certain range? And then just adding on to that, could you just speak to some of the flexibility you have within that leverage target to accommodate M&A?

[Robert F. Probst:]

It's Bob here. First off, we feel very good about that 2.5x leverage. We significantly restructured the balance sheet as we noted in the prepared remarks, $1.7 billion of debt reduction and, as we stand here today, what we think is a very attractive capital structure and one that allows us to capitalize on investment opportunities. And as we look at 2011, the acquisition of Cooley's, the acquisition of Skinnygirl, 2 good examples of high-return acquisitions where we used that cash and that financial flexibility to invest behind the business. I would offer, going forward, the strong cash flow generation of the business. And as we've talked about, the 90% cash conversion ratio, again, gives us the flexibility of looking at our capital allocation strategy and saying, where can we best invest that money. Starting with internal opportunities for high-return investment, M&A versus share buybacks. And then, of course, the dividend, which we announced the 8% increase. So we see over time a strong capital structure. We've talked about the fact we want to have a solid investment-grade credit rating to give us that financial flexibility, and we think we're well placed to deliver on that.

[Operator:]

Your next question comes from the line of Tim Ramey from D.A. Davidson.

[Timothy S. Ramey:]

As we think about the growth going forward with the high commitment to innovation and emerging markets, you could be excused for seeing some margin compression, but that's not really what you're telling us here. Should we be thinking that the performance of the core brands from a margin perspective is just so strong that it's paying for that investment in innovation and emerging markets? Or is the margin profile of the innovation and new markets just better than perhaps we might assume?

[Matthew John Shattock:]

Tim, it's Matt. As we've said, our long-term algorithm has all those factors built in, particularly the decomposition of the innovation in the emerging markets there. And it's an integrated series of activity. As I said, it's very important to us that innovations are accretive at the top of the P&L, and therefore, they do sort of offset some of the startup costs that you noticeably incur. With that, our emerging markets, I think, are profitable and give us good returns, and we see that flexing, as Bob said in his earlier comments, going forward. And of course, that's also where it's very important that not just to offset commodity cost but to help lever off Fuel for Growth initiative as they come into play. And we talked about the fact that they began to, really, bite for us in the fourth quarter, as we looked at our manufacturing footprint and also as we executed other initiatives, which will sustain us through 2012. So it's an integrated view of our P&L. And certainly, as we said in our road show, we don't see that the increase in margin is the key lever in our growth. It's the profile we now have and levering sustainable top line growth in the long run, which is our value creation model. Bob, anything to add?

[Robert F. Probst:]

That said, as we look at the P&L for '12, certainly, we've got continued, a favorable mix. As we highlighted, the Fuel for Growth initiative is offsetting the increase in commodity and raw material-related cost. So we expect, with that, together with holding our fixed cost, SG&A, down, that we can drive both the gross margin and operating margin improvements and still give us the flexibility to invest behind the business. So we feel good about the margin situation in '12, in particular.

[Operator:]

And your question comes from the line of Ken Perkins from Morningstar.

[Kenneth Perkins:]

I just was wondering if you guys could talk a little bit more about the premiumization. It seems to, obviously, be a tailwind. Just getting -- I'm kind of curious how much you think this trend is related to improving economic conditions and how long you think the trend can run sort of in the longer term, once things sort of stabilize?

[Matthew John Shattock:]

Yes. Ken, I think it's an interesting comment. As I said in my prepared remarks, I think probably about 1/2 of the dollar growth we're seeing in the market is coming from mix, and that is premiumization. I think it's several things. Innovation is clearly a driver of that from ourselves and others in the industry, and that's bringing higher price points, and that's, obviously, a positive. I think we are seeing a gradual return to the on-premise, and that is encouraging going forward. And I certainly think the way in which we are all investing and building our brands is encouraging that trend as well. So I do see that as a trend that will continue. It's one of the drivers of the market overall. And as I said, in segments like bourbon, which are very important to us, that is a key driver. And certainly, it's probably got a lot of headroom both into other categories, as that was a category which was later to the party there.

[Kenneth Perkins:]

Okay, great. That's helpful. And then just turning to Skinnygirl. I know you've talked a little bit about the distribution scale. But how much of the growth has come from scaling, leveraging the distribution network versus growing off of a smaller base? And what do you see after you annualize those contributions for the growth for Skinnygirl going into the rest of 2012 and onwards?

[Matthew John Shattock:]

Yes. Obviously, Skinnygirl is a good example of our thesis on bolt-on acquisitions, where our ability to drive extended distribution is a big factor and was a big factor in the brand's growth, but also to build the brand. And certainly, we saw velocity, the point of distribution grow. We're seeing that, the performance in our Nielsen read in the last quarter, as it continues to grow year-on-year. And we think we've got a very good brand there. It's a brand that really taps into a fundamental series of trends in the market around convenience and premiumization and calorie counting, and it seems to have a big emotional resonance with its core target female consumer. So we see a very positive outlook for the brand. I don't think we'll probably see the triple-digit growth that we saw as we got a hold of it in its first year. But certainly, we feel very good about Skinnygirl's performance of the last year and its prospects for further gains in '12 and beyond, as a platform for long-term value creation.

[Operator:]

There are no further questions in the queue. I'll turn the call back over to Matt.

[Matthew John Shattock:]

Well, thank you very much again for joining us. On behalf of our worldwide Beam team, including our newest colleagues in Ireland, we look forward to the year ahead and to focusing on outperforming our markets and accelerating our profitable long-term growth. And as you will watch the excitement around the big game in the States this weekend, keep an eye out for the aptly named Maker's 46. We'll join you again in early May to discuss our first quarter results. Thank you very much.

[Operator:]

This concludes today's conference call. As a reminder, this call can be accessed for replay at 1 [phone] with conference ID 42642252 until February 7, 2012, at 11