Ladies and gentlemen, thank you for standing by, and welcome to the FY21 Q1 Sales Conference Call. At this time all participants are in a listen only mode. I must advise you that this conference is being recorded today. Thursday 22nd October 2020. I would now like to hand the conference over to your first speaker today, Ms.
Julia Massey. Thank you, and please go ahead. Good morning ladies and gentlemen, and thank you for joining our Q1 fiscal 2021 sales presentation. We hosted this morning by Ellen Vasquezo, our EVP for Finance Production And IT. So with that further, let me hand over to Ellen.
Good morning
to all. So let's start with our presentation of the Q1 net sales performance. So we are delivering an encouraging Q1, and obviously, clear for Q1, which is at minus 6% from an organic point of view minus 10% from a reported point of view in rough improvements versus Q4 of fiscal year 20 And this is due to the partial arms trade reopening and the continued resilience of the air trade. I think we look now at our markets, The upgrade remains very resilient in the U. S.
And Europe. Our markets are benefiting from the partial untrained reckoning build this channel is still restructured. This is a good start in the U. S. And China with a strong shipment ahead of 57 India is in double digit decline, that's improving versus last year.
Good resilience in Europe, thanks to the off trade resilience and the dedication that happened for the December. We have continued strong dynamism in the markets like BBVA and Germany, We are near stable in France, but declining in Spain, which is the market pretty much exposed to the country and Russia. Primary sales team in very significant decline, in spite of some domestic travel resuming. Moving now to brands. So our strategic international brands are in decline by 10% We've seen it can decline for Martell, Chivas and Ballantine due mostly to travel retail, but continued strong growth of Madibo and the benefit.
And resilience of Jensen. Strategic local brands are declined by 6% will be kind of stable Indian whiskies, but double digit growth of brands like Catuwa as sports, chromatography and wireless. Specialty brands are in strong growth plus 30%, thanks in particular to a delay, my team overall our tequila brands, Adrianelectros and our gene monthly 47. Strategic Wines and growth as well plus 9% driven by double digit growth of Camposnivo and Bronco Estates and Jakuscriq, which is growing by 8%. If we move now to our 4 luxury markets, starting with the U.
S, the USA is growing by 6% We qualified the market globally, thanks to strong Trade Reliance and untrade reopening, Q1 sales have benefited from co achievements and had a healthy season with some other channel and category images. Less energy growth, driven by original and continued development of corduro and Blackarrow. This has well continued strong dynamism of growth related like the demilets, articulate, outputs, and agile and American whiskey portfolio. And a very dynamic growth of private and trusted customer brands like Magazine and Catawaka. Global Travel Retail is down -64 percent, declined obviously largely due to the passenger traffic, which is still significantly down.
That is 3.19 levels. A very limited set out trend improvements versus our last quarter fiscal year 2020. Today, some positive impacts of the opening of the Highland Island in China to Spirit's boutique retail that happened in the rest of July. China moving to returning to growth plus 4%, so good growth supported by the unfair recovery and selling ahead of Vida Sensiibo that happened in the 1st week of October. Market of selling are stable, but depletion are in double digit growth, and I'm referring to the July August wholesale division.
Sheila Swedo is back to high single decision growth and our work today is absolute and the benefits are continuing as well to develop very strongly. India, minus 13%, which is improving versus Q4 of fiscal year 2020, but the market is still lastly impacted by encoding banking, and that's why the demand is still in double digit decline, setting our head of sellout key states in order to avoid some disruption in terms of supply chain before safety season mainly in November. Our strategic international brands are very resilient within particularly our double digit growth of Tencent and banner times. Let's move now to the other key markets in Europe. So Europe is posting a performance of 95%.
Trends here at -2, which is showing improvement in trend that is the last quarter of fiscal 'twenty, thanks to the untrace reopening. And we had a high basis of comparison last year where Q1 has grown by 3%. Spain is down minus 26 percent, and this is due to the significant untrace exposure in that market in the context of the summer where 9.20 to approve, and as well as strict restrictions happening for both and restaurants with lower tourism in July Innovate. UK was a strong growth of 10% to 2% with growth based acceleration with a credit quality dynamic more than assessing the decline of the contrary. And we have a lot of positive pricing, thanks to the increases that happened in Q4 compared to 20.
Germany, double digit growth as well as 12% with strong growth driven by brands like Lide and Ramaguete. With very strong pricemix and strategic brands. Russia has delivered a double digit decline in its first quarter due to lower on trade events, and as well as high basis of comparisons, Russia was growing by 30% last year at the same time. Poland is in double digit growth, due to the strong development of Jefferson and Valentine's pilots. Moving now to Americas.
Which is growing by 5% including USA. The strong growth in Canada with some advent shippers and the growth for recruitment by Street with the U. S. And absolute Brazil became very well known that this is enhanced by favorable phasing. Mexico is growing, driven by strategic and international brands and ad spots with a global basis of comparison.
Asia Rest of the World, including China, India, in decline by 12%. We just are declining due to a limited full year on trade during the first quarter, better resilience, pricemix. Korea is growing by 2000%. Driven by strategic international brands and positive pricing based on policy savings in those figures. Southeast Asia, in most countries, still impacted by organic and trade disruptions.
Every terminal lease is in decline, primarily driven by South Africa, minus 42% with still very strict rules throughout Q1 and even a new ban that happened in December. Despite continuous strong performance in Turkey, plus 29%. Moving now to our conclusion and outlook. So Q1 of this fiscal year, this will decline, but in market improvements, this should fall as expected. Thanks to run rate,000,000,000 in gas trade and partial reopening of the untrained.
For the full year 'seventy 1, Karnataka expects continued uncertainty and volatility in particular relating to sanitary conditions and the impact of social gathering and travel. We spent a lot on challenging economic conditions. The upgrade remained resilient in the U. S. And Europe, but prolonged downturn in cattle retail and on trade destruction throughout fiscal year 'twenty one.
We expect return to growth in China and gradual improvements in India. Q2 to still be strongly impacted by 2019, but sales to return to growth in the second half of December 31. We're going to continue implementing our year strategy with the acceleration of the digital transformation. We will, as well, continue to have a very strict connectivity team with the agility to reinvest to address to evolving market opportunities.
Operator, please go ahead. Our first question comes from the line of Edward Mundy from Jefferies. Please ask your question.
I've got 3, please. I think in the first quarter there was some shipment phasing impact after the sharp decline in Q4. I was wondering whether you're able to indicate what you think your depletions were in the first quarter. Second question is on your guidance, you expect Q2 to still be strongly impacted by COVID-nineteen. Which implies that Q1 was also strongly impacted.
I mean, is the read that Q2 will not be worse than Q1 at this stage? And then the third question is around travel retail. We've had now a couple of quarters to look at the weakness. Do you get a sense that consumption occasion from travel retail has shifted, into other channels such the traditional off trade?
Ed, sorry. Just on your first question, please. There's time for a couple little bit. You were asking about shipment phasing, what geography would you refer me to, please?
Yes. Just some shipment phasing impact after the very short decline, in the last quarter. Do you have a sense as to what your depletions were in the first quarter?
This is a global question. Okay. So, let me start with this one. So I think, Paul, as you said, we had encouraging Q1. This is largely due to the fact that the off trade is still evolving very well despite the on trade interpreting in key geographies like in the U.
S. And Europe. When it comes to, let's say, phasing or significant difference between shipment and repetition to, I mean, to simplify the answer, I would say these Nothing very specific to, to highlight. We'll have some slightly, let's a higher shipment that we mentioned earlier like in India, but it's only a question a few days to see growth. Let's say, a great logistic and supply chain for the weeks to come in the safety season.
So the reduced by the I probably a bit better at the underlying demand, I would say, for the other geographies and there's nothing significant to report. Please let me know if this is answering your question because it's somewhat really not great. Moving to the your second question in terms of guidance, and Q2 versus Q1? Well, it's fair to say that Q1 has been encouraging. With a significant improvement that was Q4, which was expected.
Moving now to Q2, we believe that we cannot assume at a stage that Q2 is going to improve versus Q1 for the following reasons. So first, quite Obviously, there's some more restrictions coming on a daily basis in Europe. And with respect to the 2nd wave of COVID, which is disrupting on trade and social gatherings, probably even more than in Q1. We have some accreditation effect in Q1 that we do not expect will happen in Q2. GTR is not improving and if I believe it will in the coming weeks and months.
India is still in a slow recovery mode, and as I can mentioned, the Q1 figures probably a bit stronger than the underlying demand. We have, as well, some saving in Q2 compared to last year with the Chinese New Year saving, which is 3 weeks later this year than last year, meaning it's going to be a mixed set September last year, which should impact Q2 and the still the figures of uncertainty around Q2. And what would be the outcome of the Midasem Festival in China and obviously as well or in the season in the Western World. So that's why we believe that we cannot assume that Q2 will return improved at least Q1. Then your last question on the travel retail and cheese to domestic.
So that's fair. Say that this is happening, it's probably quite difficult to quantify. But, yeah, this is this is happening in many of your worries, but so we cannot quantify that.
Great. Thank you. And
your next question comes from the line of Sanchez Altschla from Credit Suisse. Please ask your question.
Good morning, Helen and Julia. A couple of questions from me, please. Firstly, on the U S, the plus 6% figure you reported. Is that, in line with your sellout trends? And where do you think the market is growing right now in terms of sellout in the U.
S? And then just a follow-up on China. Can you just talk a little bit about what what you're hearing anecdotally of a Mid Autumn Festival, and within your sort of Q2 model depletions, how the on and off trade is performing, please. Thank you.
Okay. So starting with a question on the on the U. S, So, well, first, maybe let me answer the question on the market. So, Rob, So obviously, still that's where I need to say what could be the more, let's say, a normalized long term trend knowing that we have on the a few weeks behind us. Obviously, carrier 2021, market trends look better than in Q4, and this is driven primarily by the recovering of the on trade and the off trade going well despite the reopening of the on the on trade.
It would have seen that the market is growing faster than its long term trend, which was just kept as 4%, let's say, before COVID. We see as well the consumer trend that we were referring to particularly at Thanksgiving still, very, very true and consistent, meaning the, the strong acquisition, the continued success of our clients versus brands, as well the the E commerce trend, still a strong premiumization as well. So all those things are quite consistent with end of fiscal year 'twenty and spirits are still the most dynamic category in beverage. So that's what I can say for the market dynamics, putting that to our sellout performance. So it keeps I'll send out that back to both, and this is thanks to the on trade improvement and to the strong resilience of the trade.
And we believe we can achieve selling our consistent with the sellout, meaning, mid single digit. But again, just 2 months of data for our or fill out. And O and D is just ahead of us, which we obviously did a much popular indication in the coming weeks. If I may now ask your question on China, so for a middle consensus, it's too early time frame. We're going to have our litigation results in November.
So I cannot give you a full view of what's happening from us. Are insights upfront. And probably, let's say, performance of the trade, and it's broadly reopened. Both we see on the off trade and on trade. For the on trade, we believe that 10% of basically not coming back to business.
But the good forward in year end trade is still improving at this summer and probably not at a quicker level. But we see as well some higher level of spending, ahead, larger basket size, which means that It's probably, let's say, a normal line because of that trend.
Got it. Thank you. And sorry, I didn't quite hear, your conclusion on the U. S, but was it sell in as consistent with sell out at mid single digit? Did I pronounce
that correctly? We're seeing negative sell in, which means that only mid single digits for the sedans. But I was making a remark saying, well, it's only we only have 2 months of data. Can you hear me well?
Yes, yes, yes. I can hear that. Yes.
So we only have 2 months of data, so it's a bit too early to say. And obviously, we are just ahead of O and D. Which will, which will give us a much better indication of remestem. You're welcome.
Okay, thank you. And your next question comes from the line of Lawrence Wyatt from Barclays. Please ask your question.
Good morning, Alan. Good morning, Julia. Thank you very much for the questions. Just following up maybe on questions about China. It sounds like the depletion level is you said it was in double digit yet your sale in was only about 4%.
Could you give us an idea of your stock levels in China you think that the stock levels are now going down because we understand that, at the end of your full year 2020, your stock levels were back to normal levels Are you now do you think your stock levels are now a bit lower than they would normally be? Secondly, on travel retail, what's the impact of INN Island? It's still very early for that channel to be open. Is it a very small part or is that a bit more material why your travel retail numbers are slightly better than perhaps people expected. And then finally, in the U.
S, you've mentioned resilience in the off trade as the on trade returns. Would you expect that trend to continue, if people continue to work from home, in the sort of brave new world that we are starting to Or do you expect that to sort of die down as people return to the on trade? Thank you very much.
So then starting with China, the question was on the stock table. Well, I would say, any way we believe we have a broadly no mix nominated level of stops everywhere, given the guide of the year. So for China, we don't have the the depletion probably for the month of September. So, too early to give you the most updated view, including what would be math performance, as I just mentioned, but we believe we have a more massive level of stuff for the period of the year. As you mentioned, We had a healthy level at the end of June.
So, we'd be able to comment more when we have the math fuse, but likely to be to be healthy. As I mentioned, we have some early insights on mass results from Then on Travel Retail, your question, Hainan, is a very good question. Our performance, as you saw, you have minus 54 percent for Q1 net sales, which is probably a bit better than than the volume and performance. And by the way, when you look at the portfolio strategy, it's more -80 percent, which is by consistent with our volume performance for the quarter. So our net sales performance is a bit better than our volume performance, thanks to mix, which is positive, and this is linked to the performance of 2 brands, Martell and Ryerson routes that are more resilient than the rest of the portfolio.
And, for Marcel, this is linked to the beginning of some shipments to Hainan, which as you mentioned, is an opportunity. This offshore business line has enabled a refill to benefit from this duty free system since 1st July. So this is an opportunity that we will obviously capture, in the coming weeks, which has already some positive impact on our Q1 figures. U. S, I think your question was a long term trend.
Obviously, it's a bit early to give you any definitive view of what could be consumer trends and let's say shift from the on trade to the off trade. Well, what's what we can say is that so far we believe that the young trade will be back. Obviously, it's going to take a bit more time. With everything happening around the dynamic evolution. And as I briefly mentioned before, we you can see in this Q1 in the U.
S, some quite similar consumer trends than, let's say, between March June, meaning there's a very strong at home consumption with a small group at home, our products that are probably replacing big gatherings and there's moments of consumption around, let's say, relaxing. They went as well to write VSO locations, but this is a refilling a bit when consumers have other choices, data search for quality, for availability of the brands and reliability and convenience. And we believe we have a strong portfolio to meet this functional demand. Thank
you very
much for the clarification. One follow-up on the travel retail. If you're shipping into Iron And Ireland at the moment, can we assume that that 64% in travel retail is then ahead of the positions you're seeing?
Based on pending the shipment, I would say that the 64% is probably more supported by the political mix I was referring to, meaning the resilience of Martin and Royal tenants.
Alright, thank you. Your next question comes from the line of Simon Hale from Citi. Please ask your questions. Thank
you. Good morning again. Good morning, Julia. Just a couple for me.
Helen, can you just sort of
just clarify again some of your comments around the the shipments versus depletion trends? Because you called out in the presentation a number of sort of in a sort of shipment build that we've seen in the U. S. I think Canada, a bit of in China ahead of Middleton Festival also in India ahead of some potential disruption their head of festive season. Just to clarify, I may have missed it because the line was a little bit bad at the beginning.
Are you saying that actually the the headline organic sales delivery that you've reported in the Q1 of just under minus 6. That is a real representation of the true underlying depletion trends that you've seen on a global basis. I'm just trying to square the circle there. Secondly, Alvin, if you could also just talk a little bit about just the performance in France, that was particularly impressive given the comparative that you saw. You mentioned the on premise was reopening.
Is there anything else specifically going on there at the brand level? That sort of reinforced that good Q1 performance. And then finally, I wonder if you just any particular comments on the development of your online and e commerce business in the quarter would be interesting, please.
And you're right, it's too that we pointed some markets for which we've been facing and And that's very true for Canada, for instance. We mentioned as well back from Brazil, but I would say I'll tell you a question in terms of normal trend. It's soon that the Q1 performance is probably a good lesser performance is a good reflection of the litigation performance, but you mentioned as well for U. S. And China, the students ahead of their decision.
Is I would say something, which is quite abnormal at this time of the year. Obviously, they sometimes are facing each I haven't a competitive group, but having as well, strong shipments ahead of going in the U. S. Is something that makes us a sense that has been happening for many years now. So no significant gap between the shipments and depletion at group level.
I hope you keep answering your question.
Yes, that's great. Thank you.
Okay. Thank you. So moving too far, I think it's true that the caution has been probably quite good versus Q4. And this is as well into the reopening of the entry during summer and BS trade, which is quite good. And then, obviously, moving to Q2.
As you know, we are under curfew since the last Saturday. This is obviously in some key cities. This could be extended tonight. And they obviously have impact undone trailer. So let's see.
This improving trend again, it's correlated to as well as vacation impact in parts of the bad people, most of them, I would say, saving friends and have a some re consumption in Mexico. For the airline, I would say, quite similar to the trend we we described for the full year of FMC. This is accelerating in Q1 as well.
Operator, can we turn to our next caller please? The next question comes from the line, Oliver Nikoli from Goldman Sachs. Please ask your question.
Hi, good morning, Alan, Julia. I've got three questions, please. First on the U. S, the Malibu brand has been doing very well now. For a number of quarters.
Could you please provide some details on the initiatives you've done and how you manage to outperform the rum category. And if you think that our growth for the Malibu brand is sustainable. 2nd question is, again, a little bit on the U. S. But just to follow-up on the restocking effect, that you've seen in many markets in Q1, and you mentioned the U.
S. Has been won. Now, do you interpret this as a sign of confidence from wholesalers, for the coming phase this season? Or do you think it's just motivated by other factors like potential price increase or tariffs or anything like this? And just lastly, could you help us a little bit navigated numbers in India?
Because it's been very volatile. Q4 was down significantly Q1 down 13% on your sales. Now are you kind of able to give us an idea of what has been the exit rate in term of depletion during this Q1? And how you think it will evolve over the next year? And if you that India could go back once the restrictions are lifted to, but midterm trends of the BTIG growth?
Thank you.
Okay. Thank you. Maybe I'll start with the U. S. So you asked two questions on Malibu.
So it's true that this is brand, which has, which is a best in mind, the U. S. Brewers, which is performing very strongly, as you mentioned, And this has probably, I've been amplified by, since COVID, I would say. Well, the reason for this strong success is I believe a very consistent way of activating the brand. A simple and consistent way for many months.
This summer activation has been very successful. And that's during that summer as well. And it's as well the brand, which is strongly exposed to the, of trade and And that's probably the reason why we've been successful. And I would say it's obviously a very strong achievements to be delivered by a batch of value, very happy with the success of Pralmarin in the U. S.
The second question in terms of restocking in the U. S. And what I would say, all of you is that the level of stock in the U. S. Is normative, even at the time of the year.
And we assume for the full year, as we mentioned, doing our fleet optimization. Selling equals a lot in the U. S. India, your question on exit rates, I would say, as I mentioned before, I mean, it's minus 13% net sales performance in India. It will be a bit stronger than the underlying demand.
We believe that in the off trade, which is quite fully open decision on the money at circa 80 percent of recovery level as where we are at the end of Q1. Andre rate was closed and the new opening has been reopening very recently in in some region, not in the in the day, but this is really based on a regional decision. So moving forward, we believe that the situation will improve. But right now, it's not back to normal. Our production is not back to 100% either, but it's quite aligned with the demand trends I was referring to.
And we believe we should come back to 100 percent production capacity progressively and be fully operational at the end of the H2
Thank you very much.
All right. Thank you. And your next question comes from the line of Trevor Stirling from Bernstein. Please ask your question.
Good morning, Alan. Two questions from my side please, Alan. The first one is you referenced strict cost discipline in the presentation. And as you're now sort of starting to think about perhaps putting some money back into the business, do you think you've identified permanent cost savings or was it largely things discretionary spend that you stopped, but will come back? And the second question, again, the year end conference call, a few months ago, we talked about the aspiration of getting A and P as a percentage of sales back to where it used to be.
Katie, A and P was significantly reduced in H2, of last financial year, do you think that will largely recover in H2 of this financial year?
Okay. Thank you very much. So I'll start with your first question on the cost discipline. So We are obviously still implementing a very strict discipline everywhere in the group. With the same guidelines that we are putting in place quite quickly at the end of the Q3 last year, meaning this before travel ban, we're footprint free, and very strategic in terms of spending, I would say.
So what we want, what we want to do is to keep this fiscal discipline, but as well, have the agility to really adjust our resources and my comments in value for both from, say, structural costs and A and P, I come back to your question on A and P in a minute to really add that to the evolution of the situation depending on the market. We strongly believe that this year, it's going to be a mix of very contrasted situation depending on the market. It's already true in this first quarter with the U. S. And China in both.
And we want to have that agility to really, adapt, resource allocation depending on the situation in a early market, I would say. So that's what you should expect for the year. Moving to the A and P question, So I'll just give you that on a very strong control, and hence of the AT and T in Q4 last year. So at that environment, meaning this, let's say, almost global refinements in many geographies, where obviously that context the need to activate our mines that's not there anymore. We are now moving to what we call the surface based investments, meaning that we have a very systematic prioritization of investments behind our top priority.
Because we really want as well to have that agility to strongly invest behind top priorities. First being able, obviously, to keep a very strict control of A and P depending on the situation of the market. So that means that there will be this, again, specific approach depending on the market dynamics that we believe it's fair to assume in P related to net sales ratio around 16% which is very close to what we used to spend pre COVID, but with this purpose based approach and actually keep. All
right. Thank you. Your next question comes from the line of Amit Chard with Sagin from Kepler. Please ask
Yes, good morning, all. Thanks for the questions. First of all, on Jameson, in the U. S, I mean, that has traditionally been very much an on trade brand. Can you talk a bit about how you have activated that brand in the off trade.
And then the next question I have is on digital again. Have you seen a slowdown in e commerce growth as markets opened up again after the lockdowns. And on the investments in digital, in which regions will you invest the most behind the e commerce?
Okay. Thank you. So maybe I'll start with your first question and then And Jen said, so it's true that this brand is probably more exposed to the on trade than, let's say, the the split that the market has been announced in the U. S. And that's one of the most untrained brands for us as well.
I mean, say that when you look at the recent trend of Jameson, this is strongly performing in the off trade. And when you look at the last and recent years, Jason is growing very strongly. The Irish region is holding well since March. And it's going in line with the overall spirit market. And Jameson, it's growing in line with the category.
So when I look at the figures, it's March, it's a tough start to percent in Exane and the 15% in the 52 weeks. So the strong performance, I would say, In terms of, activation, I mean, we've been quite agile to react to the confinement. For instance, we had some some digital activation as soon as we march around the St. Patrick, which by the beginning of the confluence in the U. S.
To bring St. Patrick at home, if I remember well, the activation for Jameson. So which is really showing that agility team, we want to have to adapt to what's happening and to be obviously very much consumer centric. So, Jameson has been definitely where are in this context of very strong resilience of the upgrade in the U. S.
Your second question in terms of e commerce, well, I would say, as I mentioned briefly, earlier today, a very consistent trend with e commerce compared last year. This is, this is quite strong and accelerating. No change in the beginning in the beginning of the, obviously, period of 2021. And then in terms of market, restoration is quite different depending on the market. For the e commerce.
As you know, this is a, this is, for instance, a strong channel in China. And we believe this is a key channel to increase our penetration in China, which is our key strategic priority. And this is obviously a channel that we are leveraging to capture the opportunity behind that channel in that country situation can be very different from one brand to the other. I think it's probably already a double digit weight in terms of sales or brands like Absolutes, more single digit for myself.
We'll take our final two callers, please.
Operator,
you could
Okay, thank you.
We do have still 2 more questions left. Your next question comes from the line of Chris Pitcher from Redburn. Please ask your question.
Then apologies if I missed the commodelli because it was a bit of a crackly line, but could you talk a bit about Martell in the U S? We're hearing very strong growth for cognac for most other providers, but unless I've missed it, I don't think you've mentioned Martell in the United States. And then also on the U. S, are you able to give us a scale for how much cold brew is up to now in terms of Jameson whether you've been able to fully activate that as much as you'd hoped. And then secondly, could we just have a bit of an update on potential regulatory barriers in India to a recovery, where we are in terms of state taxes, dry laws and so forth just to understand that over the next year if possible.
Thank you. So maybe I'll start with your last question on India. And obviously, it's a very difficult exercise to predict that can happen from a regulatory point of view. Well, I would say that, as you know, we've been facing quite some quite strong taxes at the end of this year, if there are co polar axis and that we are very committed to some upgrade. The regulation, I mean, keeps moving.
There are still some places where we still take those taxes. That the rate is going down, but it's still very high in some sales, like license and operational. I would say in average, we are probably still facing Coronavaxes that are, I would say, around 15% to 20 percent and upgrade this invaluable by state, as I mentioned, and expect that and at the end of the 2, where we are probably talking about overage taxes between 25% to 30%. Then back to your question on the U. S, So, Marcel, in terms of category, you know, very right by saying that the connectivity is is in a strong dynamism.
We are a quite small one with our sale in the U. S. So we have a very small basis. That's why I didn't comment on the performance of Bakken U. S.
Q3, the site of the brands in the market. For Google Group, and this is one of our fiscal year 2020 innovation. It's true that the timing of the launch, but obviously, impacted by COVID. So we believe it is a great product that we're going to obviously strongly support in the months to coming. It's still quite small.
It's a very recent launch.
Thank you.
All right. Thank you. And your last question comes from the line of Pinar Argan from Morgan Stanley. Please ask your question.
Good morning. Thank you. I have two questions, please. Firstly, could you please give us an update on your market share trends in your must win markets? And second question, you highlighted challenging economic conditions.
Do you anticipate any down trading in any of your key countries going forward? Thank you.
Thank you. So I'll start with your first question. I mean, in terms of market share, I would say that We've been commenting with our clear performance, less than 2 months ago. And I think that was much more value that we refer to in terms of market share gain and stabilization for our off that market. So it would be to, I mean, it's too early to make any comments on where we stand.
But as I said, the performance was quite strongly and there's no reason to believe that there is any significant change. But the second question in terms of down trading, it's true that in the current economic environment, but it's a fair question. I would say when I look at our performance right now and I think the trend in our key markets. We don't see any of our trading so far probably on the contrary, I would say. When you look at the U.
S, as you know, this was a quite strong trend in the off trade of this, let's say, a strong remuneration that happened quite fast after the first, I would say, days of the impact of COVID-nineteen. And when you look at the recent news and it's still very true. I have the, I'm wondering the just two messages. And you look at, I mean, the performance of standards at plus 10 premium, plus 22, two premiums this quarter percent to property number CQ4 and prestige developed at the 70%. So definitely a strong relation there.
And in other markets, like India, in this first quarter, we have strong performance of our brands, like whereas target and then the spike of that we do, which is as well as a strong performance in terms of more premium brand, I would say, registering strongly in a tough context.
Thank you very much, Elaine. I think this brings our call to a close. So thank you very much, ladies and gentlemen, and have a good day.
Thank you.
Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.