Hello, and welcome to the Amcor First Quarter 2025 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Tracey Whitehead, Head of Investor Relations. You may begin.

Thanks, operator, and thank you, everyone, for joining Amcor's fiscal 2025 first quarter earnings call. Joining today is Peter Konieczny, Chief Executive Officer; and Michael Casamento, Chief Financial Officer. Let me note a few items before I hand over. On our website, amcor.com, under the Investors section, you'll find today's press release and presentation, which will be discussed on this call. Please be aware that we will also discuss non-GAAP financial measures, and related reconciliations can be found in that press release and presentation. Remarks will also include forward-looking statements that are based on management's current views and assumptions. The second slide in today's presentation lists several factors that could cause future results to be different than current estimates. Reference can be made to Amcor's SEC filings including our statements on Form 10-K and 10-Q for further details. Please note that during the question-and-answer session, we request that you limit yourself to a single question and then rejoin the queue if you have any additional questions or follow-ups. Over to you, PK.

Thank you, Tracey, and thank you to all who have joined us for today's call. I'm pleased to report that our business continues to build on the momentum we've delivered since the beginning of the calendar year with another quarter of solid financial performance to kick off fiscal 2025. Our results are aligned with the expectations we set out in August and give us the confidence to reaffirm our guidance today. We start, as always, with safety on Slide 3. The safety and well-being of our people is a value deeply embedded in Amcor's culture, and I'm incredibly proud of our collective commitment to safety. We continue to achieve industry-leading performance with another 13% reduction in injuries compared to the same quarter last year and 73% of our sites remaining injury-free for more than a year. Before we turn to the first quarter, I'd like to take a few minutes to talk about the strategic actions we are taking to evolve into an even stronger company. Amcor is an outstanding company with a strong values-based culture, highly talented people and significant growth potential. We have a strategy that remains relevant to our business and does not require a revolutionary change. I begin my tenure as CEO with a good understanding of where Amcor is today and with a strong and clear vision of where Amcor will be in the future. I just covered what will always be our number one priority, safety. Our commitment here will never change and the health and safety of our team members comes before anything else. The unrelenting focus we have to safety has been rewarded with industry-leading metrics and performance, as I just shared, which is an excellent example of what Amcor can achieve when we are focused and aligned on our priorities. Second…

Thank you, PK, and thanks to everyone joining us today. Starting with Slide 7 and a summary of our Q1 financial results. Our fiscal 2025 year is off to a very good start with broad-based improving customer demand across many end markets. Our teams continue to position Amcor to win with our customers, which resulted in our third consecutive quarter of sequential improvement in volumes. Overall volumes for the fiscal first quarter were up approximately 2% compared with 1% in Q4. As expected and called out in August, volumes remained weak in healthcare in North American beverage, which unfavorably impacted overall company volumes by approximately 2%. So across the balance of the business, overall volumes increased by 4% over the September quarter last year. Price/mix had an unfavorable impact on sales of approximately 3% primarily driven by continued destocking in higher-margin healthcare categories as expected and as noted on our August earnings call. First quarter adjusted earnings per share was in line with our expectations, coming in at $0.162 per share, which represents growth of 5% on a comparable constant currency basis. Adjusted EBIT grew by 3% compared with last year, and our teams continue to proactively manage costs well, helping drive operating leverage across the business. This resulted in another quarter of margin improvement with adjusted EBIT margin increasing by 50 basis points to 10.9%. Moving to our Flexible segment on Slide 8. Q1 volumes were up 3% compared with last year and improved modestly on a sequential basis, reflecting broad-based growth across most geographies and end markets. Net sales decreased by 1% on a comparable constant currency basis as widespread volume growth across the Flexibles business was offset by unfavorable price/mix of approximately 4%, again, primarily related to lower healthcare sales. As anticipated and discussed on last quarter's…

Thank you, Michael. Turning to Slide 12 for a few closing remarks prior to opening the call to questions. I'm pleased with the overall performance trajectory of the business, and I'm excited about the significant opportunities we have ahead of us to enhance our profitable growth profile. As I noted earlier, we have already taken a number of concrete actions designed to accelerate volume growth, each of which further strengthens our ability to generate attractive, sustainable shareholder returns. Customer demand is improving broadly, and Q1 was another quarter of volume growth with earnings in line with our expectations. We continue to build financial momentum and evolve our strategic focus to unlock value, supporting the reaffirmation of our financial guidance for fiscal 2025. Operator, we are ready to take questions.

Thank you. [Operator Instructions] Your first question comes from the line of Ghansham Panjabi with Baird. Your line is open.

Thank you, operator. PK, first off, congrats on your new role, best wishes in the future.

Thank you.

Yes. So I guess in your vision slide specific to the organic growth component. I know it's early in your tenure, you've been in the company for a while, though. Can you share specifics on how exactly you intend to do that in the low growth end markets that both your segments sort of exposed towards? And do you anticipate any portfolio repositioning that's needed to accomplish that, including any divestitures? Thanks.

That's a great question, Ghansham. And you're right, I believe that driving a better organic volume growth profile is probably the biggest opportunity the company has. And I'll give you a couple of soundbites where I think we need to work to facilitate that. The first one is really basic, if you want because you want to get the basics right, service quality, you want to be easy to do business with for the customers, which is one thing that we just need to continue to have an eye on. And I said in my prepared remarks, we can probably do better on that side or do even better. The second one is related to capabilities where – remember, we are essentially looking at Amcor at a commercial excellence program, which we brand value plus, which however, given our past has really been focused on driving mix and margins. And that was an excellent tool for a challenge that we had many years ago, and you know that, that was highly successful in delivering returns for us. I think we have an opportunity to expand, but not reinvent the program to expand the program to also include elements of organic volume growth and initiatives that go in that direction. And we have already started doing that. The other capability side that I would see is just leveraging better and more our incredible innovation capabilities. And very simply said, to a certain extent that comes down to just leveraging our product portfolio across the global markets, particularly in Flexibles. We have incredible success with certain products that we bring to certain categories in the marketplace. And we see opportunities to use those products also in other regions, other markets across the world. And that leverage opportunity, I think we want to…

The next question comes from the line of John Purtell with Macquarie. Your line is open.

Good day, PK and Michael. Hope you are well and congrats, PK on the role. Just on Q1 volume growth, just confirming that sort of broadly where you thought it would be. So obviously, your Flexibles volumes are up 3%, which is the same as what we saw in Q4, but not an acceleration.

Yes, John. Look, first off, we're pretty encouraged about the volume performance in the first quarter. And if I just take you through that, overall company volume performance, plus 2%, which is 100 basis points up versus the quarter before. I'd say that, that is broadly in line with what we were expecting. If we put healthcare in North American beverage to the side, which is about 25% of our sales in the first quarter, the balance of the portfolio is up 4%. And you specifically referenced Flexibles. Flexibles is up, yes, 3%. That includes healthcare, which is still a bit of a holdback, but the rest of the portfolio is up 5%. So we feel pretty good about that. We feel pretty good because we also understand the healthcare dynamics. And healthcare, as you know, breaks out in two subcategories, one is medical. The other one is pharma. On medical, as we have said in prior calls, we are no longer seeing destocking. As a matter of fact, medical is back in growth territory in the first quarter, 2025, pretty much as expected in the destocking, you can say has come to an end. What's holding us back now is really "just pharma". We have a pretty strong pharma exposure, but pharma has started its destocking a little later than medical about a quarter. So we're still seeing destocking from pharma. And we believe that, that will sort of roll also partly into the second quarter. But as we leave the second quarter, I think we're going to see that destocking is abating and setting us up for a much better back half of the year. So with that said, I'd say we're feeling pretty good about the volume story in the first quarter. And if I look forward into the second quarter, we're definitely expecting another sequential volume improvement in Q2, too. So I'm in a spot where I say I'm very happy with how the volumes are currently coming back.

The next question is George Staphos with Bank of America. Your line is open.

Hey, thanks for taking my question. PK, good morning and congratulations. A lot of content here. I'll try to keep it at one question. Can you update us on some of how some of your newer products in the last few years, AmLite, AmPrima, AmFiber are doing? You had – you called that AmFiber, in particular. I believe there was a comment in the slide deck on AmPrima as well. If you index those or somehow quantify it, what's been the growth in those products? How important are they broadly to the portfolio overall. And relatedly, as you look out at the packaging waste reduction, [indiscernible] that they're off a few years, but nonetheless your customers are going to deal with them and you will as well. Are there any things that are looking a little bit more challenging for Amcor's portfolio to manage against maybe the recycled scale requirements? How would you have us think about that? Thank you.

Yes. Thanks, George. Great question again. I'll try to keep it short, too because there's a lot of content here. Let me go backwards. First of all, we're acutely aware, obviously, of regulatory trends, and that would include the packaging waste regulation in Europe. And the general headline around that from our side is we're supportive. We're supportive of such regulation to the extent that it drives the circularity that we need in order to keep plastic waste out of the environment. So the regulation is good, and we are supportive of that. It is exactly in that context that we're developing product platforms like AmFiber, like AmPrima, and others that are essentially developed in order to comply with such regulation. And what they all have in common is that these products are more sustainable and they're recyclable. And you asked me to talk a little bit more about fiber also. Look, fiber in the context of what I just said, fits perfectly in because it is another sustainable packaging substrate which has one advantage at this point in time, it is recyclable at scale today. And whereas for plastic, we're building within the concept of circularity that recyclability, but it requires more investment into infrastructure and so on and so forth. And fiber that is already there. And therefore, the substrate fiber appeals to customers and consumers at this point in time. Now I will tell you that we need to keep in mind that fiber is a natural substrate and it's porous, it's full of holes, which is against the requirements that we have when we think about primary packaging, which is, to a large extent, about creating barrier properties in order to protect the food stuff that's inside. And therefore, fiber will always have a very limited range of applications across the board of what we're serving today. But where it fits it is a responsible packaging substrate. And as a company that is a responsible packaging company, we proactively explore the opportunities on that end. And therefore, we have developed the platform of AmFiber, a product that we have is the performance paper product, which actually differentiates us really well because we've been able to introduce barrier properties which makes that solution really attractive to certain applications. And the same essentially is true for AmPrima. It's a plastic-based product, but it's a recyclable plastic-based product, which therefore, is finding good pickup into the marketplace. But I will tell you, and that's my last comment in terms of dimensionalizing and it would have to probably come back to you. But I'd say we're working – we're pretty – AmPrima is a pretty sizable base at this point in time, and it continues to grow. The fiber substrate is growing, but off a smaller base. And we see more growth opportunities going forward in line with, first of all, our growth aspirations, but secondly, also with the responsibility that we feel for more sustainable structures.

Next is James Wilson with Jarden Australia. Your line is open.

Good morning, guys. Thanks for taking my question. Just on the Bericap unwind of the joint venture, are you able to talk us through: a, what the strategic rationale behind unwinding that joint venture was and also the implications that, that will then have for Rigid’s earnings going forward as well, please?

Yes, James, happy to do so, and I'll take the first part of your question, and then I hand it off to M.C. here, to Michael to talk about the earnings implications. Look, the first thing that I will say is we continue to be attracted to the closure space and we actually continue to operate in closures. We have a metal-based closures range that is very much focused on wine and spirits. We also have closures in the specialty containers business on the Rigid side. If you add all that business together, you will end up with a topline between 200 million, 300 million. And I think that's a pretty sizable exposure still. So strategically, no change in positioning to the closure space. Now why then sell off topline in a period where you want to grow and with the business you're strategically interested in. When something like this happens in a joint venture environment, it's typically because you have differences with your joint venture partner about the development of the business going forward. And that's exactly what happened here. We weren't comfortable with the views of our partner to – with regards to the amount of capital that the partner perceived to be necessary to develop the business going forward and the time it took to get to returns that were attractive to us. We sat together with the partner and then internally, and we thought about what to do. The fact is that our businesses are competing for capital. And we have a capital allocation model in the company where we felt we have other opportunities across the business where we can put the capital to work at better returns in a shorter period of time. And that was essentially the reason and the strategic background to the divestment and it really just demonstrates that we're very disciplined around our capital allocation model.

Yes. Thanks, PK. And James, just to dimensionalize it for you. I mean, on an annual basis, we consolidate the revenue and earnings of the joint venture sales-wise, about $190 million on an annual basis. So remembering this – this divestment will close at the end of December. So it's really a half year impact for FY2025. And from an EBIT standpoint, about $19 million, which both sit in the Rigid Packaging segment. From a net income perspective at an Amcor level, the group level, after taking out the minority interest, it's about an $8 million net income on an annualized basis. So again, you've got to take half of that for FY2025 and obviously, with the proceeds going to reduce net debt, we are going to see some interest benefit from that. So when you put the two of those together actually for 2025 and ongoing the impact of the net income line is very minor.

I just want to round off that comment because I don't know who's dialed in here, maybe even our joint venture partners, dialed in. And I just want to say a very, very respectful relationship over many years and very amicable sort of wind up of the joint venture. And I know that the business will do well going forward, and it's good that the business again has clear direction.

Next is Mike Roxland with Truist Securities. Your line is open.

Thank you, PK. and Michael and Tracey for taking my questions. And I'll just echo what everybody say PK, congrats on the role.

Thanks, Mike.

My question is regarding your algorithm in terms of annual margin improvement. Historically, Amcor targeted 20 to 30 basis points of this improvement, but over the last few years, and I think even destocking, you developed a leaner cost structure. So given this cost structure is leaner, and even some of those costs such as labor slowly come back, would it be fair to say that the algorithm at least in the near term has shifted higher. So maybe the 20 to 30 basis points of margin improvement could be 30 to 40 for the next year or two as you solely add back cost to the business?

I'll start on that one, Mike. I think your observations are correct in the near term. I mean, obviously, the last couple of years, there's been a bit of a disconnect, particularly when you think about raw materials going through the topline, inflation going through the topline, then the impact of lower volumes, the cost-out agenda. So if you go back over time for Amcor over a long period of time, that 20 to 30 basis point algorithm works for us. It's been pretty consistent, but it can vary and fluctuate over the cycle. As we look forward, we still feel pretty confident around that algorithm. We’re consistently driving efficiency through the business, managing our cost base really tightly, and we can flex the cost base on volume demand. And it's not linear necessarily. So if cost comes down, volumes come off, we can pull the cost down. It doesn't necessarily go back up at the same rate. I think as we look over a long period of time, the mix management, the portfolio really drive that consistency through. And PK touched on some of the new product innovation, the sustainable structures, they all have different margin profiles as we look forward. So from where I sit, I think it's still a good algorithm from where we are. And we kind of stand by that as we look forward. But it will vary from time to time depending on the cycle we're in.

Next is Daniel Kang with CLSA. Your line is open.

Good morning, everyone and congrats again to PK. Just a question on the addition of dairy and liquids into the focus categories. Can you just talk us through the opportunity here where you see Amcor currently sits in these categories and your realistic sort of medium-term targets?

Yes, Daniel. Happy to do that. Look, the most important thing is that in dairy and also in liquids, we have a very strong position in North America. And that's on the back of differentiated product solutions that go into these two segments. Now dairy is what dairy says, right? It's hard cheese, it’s soft cheese, could go up to yogurt. So it's a whole dairy space. Liquids is one that may be a little less obvious, and we always struggle internally how to define that best. It's essentially packaging solutions for what we call pumpable food. So you would have sauces in there, like ketchup, mayo, all kinds of different other sauces, you would have pureed food like apple sauce and you would also have some beverage applications in their in pouches, for example. Now that just explains the category in both of these categories, we have a very strong position in North America. And we have just come out the quarter where we have seen solid mid-single-digit growth in those categories. And we believe that one of the big opportunities that we have before we get like super complex and sophisticated around developing new products and so on and so forth, it's just simply leveraging the products that we bring to market successfully in North America across the global reach that we have in Flexibles. And that's, first and foremost, what we want to do. So it's a product leverage challenge. Of course, there's also going to be additional innovation that we bring to these categories. But in the short-term, I think it's product leverage. And that's something that we can do better going forward. We have – just in order to calibrate also, we have annual revenues in those categories somewhere between $800 million and $1 billion in each one. So it's big. We have – we are well positioned. We have good products. And we have markets that will have an opportunity to adopt those products, and we have an opportunity to create some revenues on that basis. We're excited about that, and this is where we're coming from.

Next is Sam Seow with Citi. Your line is open.

Good morning guys. Thanks for taking my question. Just a quick one on net debt. You're obviously growing volumes and earnings, but when I look at your net debt, 3.5x, it's actually higher than 3.3x last year at this time. So just wondering, at a high level, if you can unpack that cash drag in particularly the working capital and how we should think about that cash conversion as volumes and inventories kind of may reverse? Thanks.

Yes. Thanks, Sam. It's a good question. Look, I agree. Firstly, with leverage at 3x, we would say that's the peak. And it's a little higher than we were expecting in Q1 – what we would expect to see. And truly, it's for a couple of reasons. Firstly, as I mentioned in my remarks, we saw some spike in spot FX rates for euro that were higher than we were expecting at the end of the September quarter, which have since come back. And that had an impact of just the calculation 0.1 on leverage for the quarter. And as I said, that's unwound since then. Secondly, we did build additional inventory, particularly of raw materials in the quarter. And this was really on the back of a couple of things. Firstly, we are seeing strong demand signals, and PK touched on a little particularly in Q2. We've seen, over the last three quarters, sequential improvement in volume. And that demand signal continues into Q2. And we really don't want to miss any opportunity to service our customers on that basis. So the teams have been out there and increasing inventory, probably a little more conservative. But also the other thing that we have seen is a little bit of supply chain disruption and some tremors in the market, particularly around port strikes, a little bit of impact coming out of the Middle East as well. So it was pretty reasonable for the teams to take a little bit of a conservative view on there, just to make sure we've got the right inventory in place, the raw materials there to be able to convert as we work our way through the stronger demand. So if you put those two things aside, leverage would have been at 3.3x, pretty well aligned with prior year, and about right where we would have expected it to be for this time of year. But that said, it's higher than we like. And as we look forward, we've got a clear plan to work it down. We reaffirmed the full-year cash flow guidance today, that $900 million to $1 billion. And we have confidence in that, particularly as we work our way through the inventories and we see the higher volumes come through. Obviously, we're also paying down debt with the Bericap proceeds. So the disposal proceeds, which come in, in December. So we are going to see leverage come down through the year, and it's actually going to start in Q2. And we expect leverage will be lower than it was prior year in Q2. We'll see the improvement there. And then as we have really strong confidence in the balance of the year to come back to 3x or below as we exit the year in June 2025.

Next is Brook Campbell-Crawford with Barrenjoey. Your line is open.

Good morning. Thanks for taking my question. Just with respect to this focus on stronger organic growth. Previously, the business has always talked about low single-digit topline growth organically. What's the new target for this, if you can provide a bit of a range of what you're thinking about? And I guess, I'm more focused beyond the near term, given, I guess, volumes in Flexibles are still 6% below pre-COVID levels. So once you kind of catch up on that period of underperformance, what do you think the steady-state sort of medium-term topline should be? Thanks.

Yes. Thanks, Brook. There's a lot of questions there. I got to be a little conservative here, and I'm going to shy away from giving you a number and a target going forward. What I will tell you is that I think we can do definitely better than the expectations that we spelled out before COVID. As we walked into COVID, everything else that we've seen since then, I think, has been pretty volatile. And you could call out market dislocation for many different reasons. But we're working ourselves out of it as we have seen with the volume performance over the last three quarters and also – and as Michael just confirmed again, the demand signal into Q2 of this fiscal year. So I would probably leave that there and just simply say we can do better. We can do better consistently as we go forward, and that's the target. So stay close, and we'll demonstrate to you what we can do with the business. On your second part, when you compare our current volume levels to what it was pre-COVID, you're right that we haven't fully caught up in terms of volumes today versus what it was pre-COVID. On the other hand, I'll tell you, it's not so simple to just better spread that across the different categories that we serve. It's much more of a complex picture. In some cases, we're actually full and sold out. In some cases, we do have some capacity for – to absorb additional growth, and we're acutely aware of that. We are obviously more interested in selling open capacity now than selling capacity that requires more investment. But where it does and where we have good opportunities, we're also not held back or constrained in any way to make investments into the business. So that's the way how we're looking at it. But altogether, we're feeling good about the initiatives that we started to drive growth to higher levels going forward. And that is consistently – that would really be the target that I set out for the organization.

Next is Cameron McDonald with E&P. Your line is open.

Good morning. Just some questions on the financials, if I can, please. So the – if I look at the adjusted EBITDA number in the back of the slides, can you just – Michael, can you just explain what the $13 million impact is across the restructuring and in other? The note sort of refers to Russia, but I'd be surprised if Russia was impacting the first quarter of this year from a restructuring cost perspective?

Yes. So Cameron, look, that's just the program that we put in place to take some cost out of the business and restructure in certain parts as a result of disposing the Russian business to try and offset part of the disposed earnings. So we announced the program 18 months ago or so, and we've been working our way through that. We've announced seven plant closures, four plant restructures. In total, we were looking to spend, cash-wise, about $170 million. We're most of the way through that program now, and we're still seeing just a little bit of cost come through. But that's – you're also seeing the benefits of that program come through. We said that we would deliver about a $50 million annualized benefit in FY2024. We got $35 million of that. We've got a further $5 million or so in Q1 2025. So we're well on track to deliver those benefits for that program, and it's pretty much done by the end of calendar 2024.

Your next question is from Nathan Reilly of UBS. Your line is open.

Thanks for taking my call or question I should say. Just in relation to the underlying group volume growth of 4%, excluding health care and beverage, relative to some of the European and U.S., Canada and some of the key end markets which have been quite patchy, that volume growth looks quite solid. So I'm just wondering if you can give us a little bit of an update just in terms of how you're seeing the state of the consumer across your key end markets in both the U.S. and Europe, please?

Yes, Nathan. First of all, I agree. I also believe that the number is actually pretty solid. And here's how we're thinking about this. If you sort of pull it apart into the different components, if you look at the consumer, I think the consumer is at best flat, if not a little down. And that's very consistent with what we've said in prior calls. And we're not expecting a lot of help from the consumer going forward either. So we're not going to bank on the consumer spending behavior sort of becoming more positive going forward. The thing that we're seeing is that the customers are performing better. We talked about that in the prior calls also in the context of two things really. One is the customers – many customers are trying to find a better balance between price and volumes. That also translates into promotional activities, and we're benefiting from that. What we also sort of group in the customer performance piece is just simply the fact that destocking is over. And that's – I can say that now, a little – with a little more conviction, destocking is over, except for the one category that we have decided to break out for this conversation because you introduced it like that. Let's put health care and North American beverage aside for a moment. And then the final point that we look at is how are we faring in the market that we're seeing? And that comes down to our ability to gain share. Now after the fourth quarter, I would have said something along the lines of it's not material, but we see some green shoots. Now as I'm sitting here after the first quarter, I would say, it's a little bit. So the momentum is increasing, and I'm still trying to be very bolted around all that and not to get ahead of myself. Let's get another quarter under our belt and see if and how the volumes develop and what the drivers are once we're getting out of Q2, but we feel pretty good about it. And if I – your question also was break it out between North America and Europe. I'd say, it's pretty much the same between the two and the way how we look at that. So that's pretty much the best answer that I can give you.

Our last question comes from George at Bank of America. Your line is open.

Thanks so much. PK, thanks for taking my follow-on. It's a two-part, where the first has nothing to do with the second part. So the first question is your volume growth actually has been relatively in line or actually a bit better than what we've seen out of other consumer packaging markets the last few quarters, and yet you are working on your innovation and really trying to drive greater speed to market. All companies try to improve, we get that. Was there a trigger for you in terms of what sort of drove that? We need to do an even better job of getting innovation to the goal line. Were there some lost sales? Or were there some opportunities? What drove that realization? And then the second question I had for you really is when – can you remind us when do you expect Rigid to inflect higher from a profit standpoint and when from a volume standpoint? Thank you.

Yes, George, that's really two questions. And as you said, they're not related. Yes, exactly. So – but, okay, let go backwards. So first of all, on the ARP, so Rigid Packaging. Look, we've been speaking a lot about the volumes. But what I haven't said yet is – and what you will see when you go through the numbers, is that the business has returned to earnings growth over the last couple of quarters. Actually, since the beginning of this calendar year, they've come back with earnings growth, which means that, despite the environment that they're operating in, they are being able to adjust their cost structures and their capacities to a level where they are turning out better profitability, which is something that we appreciate. The team is doing a great job. At the same time, we're all sitting here and waiting for the market to give us a bit more tailwind. And when that comes on the back of the efficiency that we've now created in the business, we'll see better improvement and better numbers, definitely better numbers, and we're looking for those. So we can't wait for that to happen on the profit side and also on the topline side. Now you're asking me, when is that going to happen? That really depends on the consumer. The consumer is still sort of held back on the categories that we serve. It is a very discretionary category mix that we're serving with the isotonics, with the ready-to-drink teas, or the juices. There's different ways of hydration. And while inflation may have come down, the consumer is just shocked by the prices on the shelf. And that's sort of the way how we explain currently the consumer behavior. So that needs to turn around. That will get us…

This concludes our question-and-answer session. I will turn the call back to PK for closing remarks.

Yes. Look, thanks for the interest in the company and for dialing in. Great questions. I mean, you're essentially asking the questions that we're asking ourselves here. I just want to say one more time, we feel pretty good about where we're at, particularly with the volumes coming back. That's really important for us. And as we see that trickle through, we'll definitely see that also translate to the bottom line. And we're looking at a solid year. So at this point in time, we are fully reaffirming our guidance for the full-year, and we feel we're in a good spot. Thank you very much.

This concludes today's conference call. Thank you for joining. You may now disconnect.