Q&A | Unilever Investor Event 2026 - Unilever

So welcome this is the Q&A session now we're looking forward to taking the questions from the room if I could ask if you could raise your hand if you'd like to ask a question microphones will be brought to you if we could try and limit questions to two for each individual person that would be great first question I think coming from David at the back Hey, thank you, and thank you for the presentations. To my two questions, LLM and AI are obviously a big theme. We've heard this idea that you put the R&D out there, and that's a big advantage for the big branded companies. Have you looked at the risks of that in terms of making it easier for replication by private label, local company? I know it's patent-protected, but it just feels like there's a bit of a two-edged sword to it. Is that something that you can weigh up or feel is not an issue? And then on the second question, just on the guidance, to sort of dive into another level, in terms of the four to six, which you've retained, the shape of that's changed a lot in the last three years. For a couple of years, it was very even between developed and emerging markets. This year, it's 8% emerging, flatter, developed. A, what do you think the four-to-six looks like? Is it more like the first two years or this year? And B, why will it be skewed? Thank you. Regarding LLM, I mentioned, I feel that they really favor big companies, big brands with big scientific budgets. I believe overall I see retailer power increasing. I will not give the name of the retailer, but if you look at the profit of one retailer good unilever of offering today in one important market basically you have around 30 percent of your profit of that profit coming from retail media and if you look at that thinking the return on capital of that versus the retaining capital that you make in all the flow of goods that you really have to do with this customer you know so i feel it's a very it's very important point but overall when it comes to a specific categories and i believe one of the beauty of being in the hpc space is that brands differentiate brands differentiation scientific performance really matter and that's one of reasons why private label never make it big in this kind of categories you know they make it be in some of the home care categories in which format degradation you know and interaction with home appliances is not relevant but they have not done it in any other of the home care spaces so i believe overall you know i will not give the name of any retailer but i don't see any lady in this room using a retailer mask or a retailer facial cleanser you know what i mean so ii believe that we are in categories that are really insulated against retailers in that space but overall there is a there is an increasing power of retailers because they are becoming a significant driver in terms of retail media the second question was about the the balance and she will help me on that hey i believe in the long run i i believe that of course you know we expect more growth from emerging markets but i feel the difference that we are having this year is not normal we have a couple of issues i believe that you know we have an issue with helmans in the us that we are trying to sort out we have We have an issue in well-being in which we took some conscious decision to rebalance our exposure to channels. And Nutrafol, that is a D2C brand, is going through some issues. I expect well- being in the second half next year to be back into substantial growth. And that has affected a bit the growth of the US. But do I believe that the US is structurally a 2.5% to 3% volume growth for us with the portfolio we have? Yes. And do I expect a better performance in Europe in the long run? Yes, because our portfolio is exposed to at least 1% growth more than what we have had in the past. So I would say that the last couple of years are a better representation of the balance between emerging markets and developed markets. Of course, we are having a fabulous year also in India. You know, I don't believe that India is, you know, naturally a 15 or 20% growth company. I believe that probably, you're not being in the high single digits to double digits is a more normal expectation, assuming a 6% GDP growth and a 2 to 3% inflation in India. So I expect things to come more into place, and I would say the previous two years are more representative of the balance of growth between developed markets and emerging markets. I think you in essence covered it. I think we have to think about US as again a mid-single digit or a multi-year and again not trying to get into 2027, as a mid single digit given volume, mix, premiumization. Europe will be positive but select growth, quality growth and it's important, we want to make it very clear and categorical that's an important market. It's hard currency growth and hard currency earnings, but with the portfolio we have we are absolutely in the right space. markets given everything that we have spoken about has the potential to be a single digit they're also conscious that we'll also have to cater to forex devaluation but in essence what fernando said in terms of the balance rate right a little more color in terms of how we think about this thank you our next question thank you it's nicolas from bank of america just coming back on the um the ai Hi. When you buy new brands, how quickly can you create the scientific data, you know the patents, the clinical trial, to make sure that those new brands are also performing well when it comes to LLM searches? And my second question is on the professional hair care. I think you've mentioned you wanted to get bigger in that category. I know you have Black May in India, but do you think that's enough to drive an organic growth or do you need to acquire in that space? Thank you. let me let me comment in the second and then probably richard can help me in the clinicals i didn't say that i what i mentioned is that professional expertise is an increasing important dimension dimension of building trust for our brands you know we have done a great work in social creators that is a one pillar that is important i believe that we are very well equipped with our science with our knowledge with our data points with our scientific publications to really have very strong presence in agentic but i believe that the leading oral care company or the leading beauty company they have done a better job than unilever in the last 10 to 15 years in making professional endorsement a key driver of most of their portfolio We don't have a big portfolio in professional archaea. We are making big inroads with K18. We believe that this is a brand with a lot of potential. It's growing very, very fast. But, you know, we don't Have the kind of portfolio that some other companies have. And it's true that, you Know, online has increased the frequency of purchase, has increased availability to professional archaeas. So that's a gap we have in our portfolio. but okay you know you always have some gaps in the portfolio you cannot cover everything and you know i don't see at this stage any asset that over excites me so we will continue developing organically a must-teach and prestige hair care portfolio and if a good opportunity emerge we will consider that but you know I like the portfolio we have our portfolio now is not dependent on making significant acquisitions you always have some gaps in your portfolio we have it other competitors have it you know and you have to run your portfolio with what you have and extract as much growth of you can on that do you want to comment on clinicals and the time it takes so first i'd say when we're buying those sort of brands we do very careful due diligence that they've got a good solid base on the products the science the claims obviously it differs by brand how much that's part of the brand but we're always making sure we're buying a good asset in that sense. I think the second thing will be you can very quickly take what is there and make sure you're doing all the brilliant basics I'd call it to drive the right recommendations and algorithms. So that's things like terminology of technologies what's published where, how it's showing up. That can be done in days and weeks. And then I think the third layer is how can Unilever bring fundamental science and technology platforms that help power it. If you look at Prestige, which we've been going at for a few more years, we've got examples of probably 100 innovations and technologies powered by Unilever technology that's gone into those businesses. While they retain their speed and innovation day in, day out, competing, we sort of bring the more fundamental long-term science and technology. And in well-being, we're starting to bring some of that through now as well. Things like sugar-free and liquid IV that was developed by the central team. So that would be the kind of months and years to start bringing the science. But you can make a difference, I think, immediately with what we know and what we've learned on our other brands. Thanks. I feel I would add to that also that you shouldn't underestimate the importance of independent scientific endorsement close to the action. So basically, it's not only about building clinicals at global level, but it's fundamentally replicating these clinicals in key markets. And I believe that can provide Unilever, given our footprint, given our strong presence in many markets, it can give us a lot of competitive advantage when these LLMs start to expand globally and when we can replicate this kind of clinicals or let's call it scientific proof in general in many markets across the globe. But this is now intentional for us, you know. Now we are intentional about building clinical proof in our portfolio. Thank you. One thing that I think has changed at Unilever is your ability to premiumize, which is something that we have not seen in the past. So my first question is on premiumization. What percentage of your portfolio would you call in premium category relative to the category? what is the differential in growth and margin or gross margin of that premium portfolio and how do you ensure, obviously you've done, like you've shown us some amazing example, that you've not gone too far, like you seem to see a great opportunity but we've seen as well companies have basically gone too long and how you ensure that right now Vaseline is doing amazing in emerging markets at a time where emerging markets are doing well but that has sustainability in the long-term. So that's my first question. I'll go for the second. So on the second, I mean, lots of questions on AI, but so how do you see the shape of your P&L evolving? So more gross margin, but how is ANP spend and R&D going to evolve? And I mean ASP, ANP spent in a world where, you know, if there is more LLM, like is there less search content, less ANP spend there. So, yeah, we'd be interested to have your perspective. Cool. I take the first one and Srini can take the second one. We are very conscious of the limits that our brands cannot pass. And we are very conscious also in the adjacencies that is probably too far for a brand to go. If you take a brand like Dapp, for example, our biggest brand, you know, I really believe, for example. that in face care dub has a real role to play in facial cleansers but i'm more skeptical about going into higher hierarchy of benefits you know and i believe some of the lab competitors have over exposed them into areas in which the brand has not naturally placed to compete i'm also very conscious you know that a few years ago that higher price point was in the five to seven dollars now the highest up price point is in the 17 18 dollars i don't believe that that can go beyond the 20 dollar you know um so i feel we we are very careful of not over stretching our brands you know and putting our brands in areas in which the right to win probably is not there you know because people is looking for specialists people is look for you know higher hierarchy brands you you know so i feel we are we are very conscious about that the same with vaseline the same with rexona etc etc so i think we are you know our brands we want to inject aspirationality but we continue thinking that unilever is a fundamental democratizer of access so we bring premium benefits into mass upper mass positioning when i look at the percentage of the portfolio that is now in premium is around 35%. I would like to have that into the 50% space. Usually the margin difference at gross margin level could be between 500 and 700 basic points. But of course, it comes with a higher level of investment in BMI. So part of that compensate when you are looking at a bid down or underlying operating margin. Srini? That's absolutely. I think an important element also to highlight sometimes is, look you need to have sensible gross margins at inception and what are really gross margins when you scale right the mistake to make is if you start with the premium innovation you price yourself out you don't expand that segment of the category so therefore is it does it have a good gross profit and with scale do we have the ability to really expand margins i think that's that's one nuance i will add and that's something consciously we are fine tuning as we are thinking about our innovations going forward? I'm a great fan of premiumization, but probably the message I repeat more to our brand people is don't be too greedy. Don't try to push the brand too far and take the brand out of what is a natural space. Sorry. Absolutely. Look, the point is we will be where consumers are. You need to follow the money. you need to follow the consumers, which means that there is more content, there is more time of content, more quantity of content differentiated quality of content. So yes, the cost which what we do today have crashed, but it also means that we will have to do a lot more and many more different things. So therefore, again, I will go back to the model of saying, yes, there is gross margin expansion. We should think about increasing BMI for sure. we should think about increasing R&D for sure because end of the day, today what we are leveraging a lot is what we already have. We have started to build new, but the difference in future is going to be multi-platform, multi-technology platforms, multi-R&D platforms. And on a pure play HPC basis, and I'm not a fan of some of these benchmarks, but if you take it at face value, we are underinvested. But if you really want to have a sustainable growth business, we will continue to invest there. Richard, that still means that you need to get efficiencies in the deploy part of the organization. But therefore, the best way to think about it is get gross margins up, invest behind our brands. But even where we are, I don't believe we need to be wedded to percentages. But it has to grow. And if it means that in some cases percentages increase, they absolutely will. in some cases if there is a reorientation and get it sensibly right we will do that not at an aggregate because aggregates never give the real picture it's really going to be a segment it's going tobe a country therefore the granularity the percentages made an absolute sense we were seriously uncompetitive and under invested but it's really about investing right again I don't want this saying that people are talking about lowering brand I want to be categorical, we will invest. The model is cross-margin, invest behind our brands, invest behind R&D, drive productivity across all lines, and therefore, the value creation equation. Question from Warren. Yeah, hi, it's Warren at Barclays. There's a lot to digest there. I might need the machines to help me out, but I've got two human questions. The first one is on margin, Srini. threw a lot at us on margins maybe you can unpack it a little bit more in terms of the some of the moving parts on the on the cost savings the billion euros you talked about the interventions that you're making on palm oil again if you can try and put some numbers around around that to try and sort of understand how we get to the 200 to 400 basis point gap between yourself and us hpcs and how do you triangulate that with moderate margin expansion at the same time as two to four hundred basis points it'll take a long time to get there that's the first one and then the second one is just maybe going back to europe maybe for fernando um it will still be 14 of your portfolio and you know harish will now be running it from the 1st of january and it's always been kind of anchored down by foods and ice cream is there a real possibility to reimagine europe as a smaller portfolio higher growth there's any reason for example why you couldn't do in europe what you've done in the us so what would be your vision or harish's vision on europe if you kind of kind of look out or maybe here each can also touch on that thanks so yes there was a lot there Warren and rightfully so yeah because end of the day the levers of what we said I said therefore good to anchor on the three productivity levers they consistent they don't change which is really thinking about volume really thinking about mix really getting productivity capex and really focusing on buying that's core what is differentiated is obviously and it's an important element when you compete with some of the regionals and the locals they they benefit from some of the backward value chain integration right in some parts what we have done with palm is structural and fundamental it's not it's Not a today or yesterday's it is something which Unilever has consistently built over many years what we've really done in the last few years is to really amplify that and that's also going to be followed with some of the structural interventions and we think about the material structures which is work in progress and it will not be opportune for us to talk about a distinct there's fundamental shifts happening We've spoken fragrances, we've also spoken about what it really means in terms of packaging and packaging hubs. So there isn't a line in the P&L that we really don't look at it to really reorient, but obviously the big interventions have to come back because in gross margins because that gives us the right to build, that gives the right to invest. We've talked about productivity, look ice creams for post ice creams was relatively an easier job, right. had an organization which was not efficient over a period of time. This is hard yards. We don't take this lightly because end of the day we will do what is right from an organization model point of view, but there are plenty of opportunities when you think about a business like ours. There are non-people spends, there are non core applications. In some ways we have become victims of outsourcing everything to do with technology. It's time to bring the expertise back in. It's time to really be a bit more open, whether it's an open model or a closed model, leverage it and drive it well. It's coming back to the closing the gap question. We're not trying to get there in four quarters or eight quarters or 12 quarters. The worst thing to do, and look, and I keep saying this, you underinvest. It's very easy to take up 100 basis points of margin in any period you choose. And then we'll pay the long-term repercussions of what that is. I'd rather favor a model which is growth-oriented, gets consistent gross margins up, invests, and you consistently deliver earnings. We are a fan of earnings, right? End of the day, what really shareholders matters and makes a difference is earnings. But the margins are important. It's a multi-year journey. It's important to have that anchor point. It's not trying to get there today, tomorrow. But look, absolutely, we're resolute on that because if you're a quality HPC company, you will get that growth. you will get that margin profile and you will deliver hard currency on this. Regarding Europe, Warren, it's very clear with the separation of foots our ambition for Europe changes. But the strategy is the art of sacrifice, and you cannot get exceptional growth in 70% of your portfolio. You have to look for exceptional growth in 25% or 30% of our portfolio. And I believe Europe, like in China, these are regions in which we will apply what I call a selective growth strategy we have 82 percent of our revenue in Europe in number one or number two positions we have now 50 percent of all revenue concentrated in three markets and we will be very selective about the categories and the category and and geography cells in will in where we will go for significant growth in Europe let me give you an example and a I give it for free to our competitors. We have 56% share in the other ones in UK. I want 65. And we will go for that. But I feel differently to the case of US. I feel what Geris will have to work his magic here is that we will not allocate capital in Europe for acquisitions. We will go organic growth. That organic growth has to be around our leading positions and around the progressive expansion of our premium digital disruptors of the U.S. in Europe. Brands like Tatcha, like Hourglass, like Paula's Choice, Dermalogica already have significant presence. We will do the same with Liquid IV. I have the intention to do the scene with Grunz. So our expectation for Europe is higher growth and at least grow with the market in the future, while in the past we have been declining. But it's a different situation to the one of U.F. And we need to respect that. But what Harish can bring into place here is the model of very strong partnership with key retailers, that particularly in some places like the UK, I believe is absolutely replicable there. And the model for a really digital-first company that he put together in the US. And I believe all this applies to Europe. But I repeat, strategy is the art of sacrifice. You cannot go for everything in the company. And Europe will go for a selective growth strategy that has worked well for us in China because it has helped us to stabilize China in a decent level of growth but with a significant contribution to profitability across time. So that's basically the approach. I don't know, Harish, if you want to add something. Yeah, look, I think, Warren, firstly, I'd say, firstly the European team deserves a lot of credit. I think the amount of change over the last three, four years, think ice cream, think foods, and the size of the business. So if you take the foods numbers out, you know, the PC performance or the home care performance, it's relatively solid, beauty's growing in six, right? So I'd say they've done the hard work, you know. The next is where to take it. The second piece is start with the consumer, right. I mean, you were talking the UK consumer, 50% are in on Gentic solutions, 60%, 70% of the growth in the UK is e-commerce, right, So there are similar where the trends are going to the U.S. And I guess I'm with Fernando. Focus, focus, focus. Right. We're number one on DOs. We're no more on skin cleansing. We're No. 1 on CIF. And then the benefit I've got is we don't need acquisitions in Europe, but I've seen the future in the U S. And we've got to play selectively with the consumer space work. But fuels me with confidence. And then lastly, I'll say it more from an emotional point. My number one criteria is to bring the pride back into Europe. It is the home of Unilever. Hi, Tom Sykes from Deutsche Bank. Could you maybe please just reconcile the comments you gave on fewer, bigger, better in the innovations to then the whole faster content-driven innovation and what seems like a faster cadence of innovation, so is that bigger ones and then more tweaks and et cetera, and do you make this distinction between the two? And then you've mentioned male grooming, men's products a lot. How much of your products do you think are actually consumed by men and how much are actually targeted directly using marketing directly to men and what's the sort of relative growth rate of male BPC products to female for you, please. Let me start by the male question. I feel in U.S. today, 29% of the households are single households. And I believe in Europe it's around 37%, if I'm not wrong. I have to go back to chat GPT, but I believe it's in that space. Okay. So it's just this point that female buy for men is disappearing. And I believe that targeted products to men with targeted communication to men in targeted channels to men is becoming more and more important. This is a segment in which, of course, you know, the categories like skin cleansing or deodorants are clear entry categories for men. and we believe there is potential also to expand into areas like facial cleansers and other categories in which our brands can play. We are really elevating dramatically. I feel Geri showed some of the elevation of that main in the U.S. You know, it's just I believe that 60% of our that main business is in the US. You know this is abnormal. So we need to really continue expanding that franchise in main globally. So, I feel opportunities in male grooming are massive for us, you know, definitely anchor initial in skin cleansing and deodorants, but with the potential also into going into other adjacencies with four brands at the core, DAPMEN, Dr. Squash, Rexona, Axe, and potentially Vaseline, because you know I feel Vaseline men in some geographies where Vaseline is a stronghold, is a logical expansion also. Your first question, Tom, was about... Bigger, better, worse. Bigger better. Yeah, I feel it's a very good question because, you know, I really believe that the core of our growth will continue coming from disruptive big innovation like Wonder Wash that you can roll out into 40 markets, etc. But increasingly, when you see channels like Douyin in China or TikTok shop growing, the model of creating demand in TikTok and materializing what works in TikTok in other channels, like could be Tmall in China, or it could be Amazon in US, is a model that will continue developing. So I feel you need to do the two things. I believe that in the case of the TikTok shop model, you don't develop a special technology for this kind of activities. You deploy your existing stock of technology, science, packaging, etc., etc. When you look at something like Wonder Wash, it's a completely different way of washing. It requires deep, deep scientific superiority. The same when you look at things like, you know, DAF, UV filtering, hair care. So I feel you have to do the two things, but particularly in markets where social commerce is gaining ground, the second layer of content-driven innovation will gain more protagonism in the future. Thank you. Thank you, Mr. President. Olivier Nicolai from Goldman Sachs. Just two questions. First, could you give us an idea of where you see the biggest upside for the K18 brand? It's still very strong in the U.S. Do you still see the U。S. as the main focus, or are you planning to make it travel, as you said earlier, under the brands? And secondly, is the only category in beauty where Unilever is not participating is fragrances. We've heard the word today a few times. Is it something that you would consider as a new category? Yeah. I never like fine fragrances a lot, because I always saw fine fragrancies with significant volatility. I believe that hair care and skin care were categories with much more solid growth across time, and fragrances you have seen a lot of volatilities across time. So we don't have any interest at this stage, and we don´t have any plan of getting into fine fragraces, even if I have to recognize, looking at some of the results of our competitors, it has been a key driver of growth and it's true that gen c is adopting fragrances at pace and at scale but i see a role for fragrances within our portfolio in areas like body mist in areas like hair fragrances even some of our brands that are present in color cosmetic can travel into fragrances and i can i cannot give details but of course we will do some of that but is this a fundamental driver of performance in the long run no i don't believe so in the case of k18 we have big plans for the brand i cannot disclose but you know any market of more than 250 million population should have a big k18 franchise um you know i will not disclose what are our plans but k18 is moving internationally now at pace i really believe it's a great brand with incredible superior products and i believe it is one example of how unilever technology can support a very strong initial concept of a brand you know because when you look at the top three key products that that makes 70% of the revenue of K18 is all Unilever science, you know, in mask, in what we call, they call it air wash, but we call it dry shampoo. So it's a wet dry shampoo, let's call it. And increasingly now in what we have launched, it is called Future IQ, that is a significant impact in increasing density of the hair and even great reversal after three months. All this is technology of Unilever that was in our shelves, in our lab shelves, but it was impossible for us to deploy it because we didn't have brands with the ability to travel into price points like the one of K18. Future IKEA is $120, Airwash is $40, the mask is a $70, $80 price point. I feel that the growth that we are having in these brands also shows that we are developing capabilities to really manage this kind of prestige business with success. You know, after one year that it was a bit uncomfortable for us last year, I feel prestige has came back with a lot of strength. I feel, if I'm not wrong, we are at 12% growth year to date. I believe the luxury sector in hair and skin is at around six. six so we are growing close to two times the rate of the market in prestige beauty now hi thank you beth and davis from berenberg i just have two questions on your llm information provided today the first one just relates to the actual category growth We've mainly focused on your strategy, but I was wondering if you'd be able to share any insights in terms of how the precision sort of mechanism of how LLMs work can translate into underlying category growth. Any sort of comments on conversion rates or impressions made for consumers around that would be interesting. And then secondly, kind of coming off of the question earlier about fewer, bigger, better innovations, I think you mentioned earlier that you're simulating maybe one million prompts related to LLMs. That would suggest that obviously consumer requirements for products is becoming increasingly fragmented. So how should we marry fewer, big, better innovation with a potential fragmentation of consumer needs? regarding market growth you know so we see around in weighted by our turnover so turnover weighted market volume growth we see to date at around two percent we see fundamental volume growth coming from emerging markets in average there is no growth in developed markets in average. There are fast-growing segments, but there are fast declining segments. And I believe this dispersion between top performers and low performers in developed markets will continue exacerbating. That's one of the reasons why our U.S. business has grown is because we are in the right segments. You know, even today that our well-being this year is flat, we are flat because we are losing share. But the growth of our well-being footprint is 9% in the U.S. this year, and most of this 9% is volume growth. So I believe that overall, good growth in emerging markets in volume terms. In average, no growth in developed markets, but with a very clear distinction between segments that grow very fast and segments that decline very fast. And of course, significant opportunities for premiumization in developed markets because the k-shape economy in developed markets is a reality and there is a lot of people with a lot of money that is prepared to spend more and you know i'm funny enough when interest rates goes up durables go down consumer goods go up you know so i feel there are things like that that are really plain so i would say that at this stage two percent volume growth is what we see as category growth um um you know with let's say one point more in emerging markets or one and a half one point less in developed market in average term can you repeat the second question because the the noise here is just the llm the question llm yeah what is exactly the question because i could i cannot hear well with all these bigger better innovations a bigger better innovation does it I feel LLMs will play a significant role in defining a short list more for consumer benefit platforms than for particular innovation because the search is more on consumer benefit basis than in some particular. So I believe that LLMs will play an increasing, bigger role in discovery. I feel personal assistance. If I'm not wrong, I was in US a couple of weeks ago, and there are 10, 15 million users of Muse already. VLM is a heavy user of Instinct in the UK that does something similar to Muse. So I believe the role of this LLM's personal assistance in defining a relatively short shelf from which you buy will be very, very important. I believe this plays in favor of big brands, as I mentioned before, with big budgets and with big scientific proof. And it will make this kind of clinical evidence, scientific evidence more important and more important. And that scientific evidence has to be made available for consumers on a local basis. So if I can add to that, I think there was an important point which Leandro covered during the course of his presentation. And that's this concept of invisible packaging. Historically, we were all constrained by what claims you would put on a pack. But the fact of the matter is our brands deliver a lot more and the big brands actually deliver a lot more benefits. As we are now working along with the Google partnership and working with retailers, these actually become machine discoverable. And when you combine that with patrons, technology, R&D, papers that we publish, discoverability of the big brands also gets significantly enhanced, which therefore doesn't mean that for every benefit You need to think about launching a new SKU or proliferating SKUs. Machine readability of items is a big thing. And if we show you what does it take to code the presence of one item in one retailer, you would be shocked. You know, the lines of coding that is required for one item, you know, in one retailer. And this machine readability is a big thing. Honestly, without the partnership that we put in place with Google, it would have been impossible for us to make it happen. It's a pity that we couldn't put a video on that, but it's just incredible, you know? When you have to do that for a lot of many thousands items, it's a lot work. But imagine the power for a company like Unilever, developing this capability with Walmart in US and deploy it in Atacadao, Brazil, or in SM, Philippines. You know? It's just a huge, huge potential competitive advantage. We don't have to learn again how to do this machine readability for a retailer in Philippines or a retailer in Brazil. So this is a big part of our program now. Callum? Thank you, Callum at Bernstein. You spoke a lot about Dove, Vaseline, the blueprint for brand building. I think the volume growth data that you provided for those two brands implies that half of all group volume growth has come from just those two brands, and that must imply that there are still a number of the big brands that are struggling from a volume growth perspective. So I want to ask you more about the replicability of the model. Where are you in rolling that out? and I think you highlighted Lux, Rexona, as two sort of incoming priorities. How long do you expect that model being rolled out to those two brands to take before you start to see the improvement? And maybe is it ever realistic that you could be firing on all cylinders, so to speak, or do you have to be selective with how you apply the model? And then the second question is maybe related, 4.4% volume growth for the power brands, 3.3% for the group. If you do the math, it implies the remaining 20% is a negative one. Is that a problem? Is that fixable if you think it's a problem, or is it just something that you have to accept for the scale, for the portfolio resilience that Srini was talking about that that tail brings to the table? I feel in the, let me start by the first one. You know, it's true, I feel between DAB and Vaseline, they made 20% of the revenue of the company, and in average, they must be growing around 8%, 9%. So basically, you have around 1.8% of growth or something like that. Sorry, 0.8%. 0.9% of gross that we have done in this brand. So it's just, and hey, we have many other examples. You know? I feel Dirt is good, now growing high single-digit. I feel the quality of our innovation in laundry has been elevated dramatically. You know, Wonder Wash in 40 markets making a big success. Comfort was a flat brand for Unilever. I feel in the last few years has been growing around 8%. SIF at 15% growth in the past few years. Domestos, this year is around 5-6%, but last year was double-digits. We have many other brands really performing well. Do you have some dogs in your portfolio? Yeah, you always have some dog in your profile. Some of them have only three legs. So that happens. But overall, I feel the model is repeatable. Some brands are more difficult. And let me give you an example. We have done many mistakes in Lifebuoy. But it's true also. that the skin cleansing is moving out of hygiene and traveling into care and experience so that plays naturally in favor of dove and lax and play naturally against the like of light boy so there are some times that your brands are very clearly positioned in a space that is difficult to grow or take a brand like grow and lovely you know grow and loudly it's a great brand you know it's a super profitable brand for your liver it has been a key driver of growth for you for many many years but it's very clear that the face care market in india is premiumizing and this plays in favor of that facial cleanser simple facial cleansers ponds facial moisturizers or some of our competitors or minimalists and it doesn't play in favor of global lovely so you have to accept that sometimes some of the brands are in spaces that are structurally challenged and i'm personally always marking in accelerating the winners that fixing the bleeders you know so if the other 20 percent of unilever is flattish in growth and we continue growing you know our power brands at four five percent that's a nice balance to have you have to think also that the non-power brand given the exposure to emerging markets and given the closure to the value segment they tend to perform better in high inflationary periods you know because people down trade and we collect in our portfolio some of that you know if i give you the example of brazil again our two power brands of laundry may 50 share the other two non-power brands of laundry brazil may 20. these brands tend to perform well in high inflationary period when there is low inflationary periods we trade up consumers again and we put the focus in in power brands so we we are happy with the balance we have you know you always like all your brands to fire but you know it's natural that you will have parts of the portfolio growing faster and let me repeat what i said when i refer to europe you can go for exceptional growth only in 25 35 percent of our revenue in the rest of the portfolio if you grow with the market that's a good performance you know because i prefer to really gain the kind of share that we are gaining in laundry india now that is transformational How much share you have grown in London, India in the last 12 months? 300 basis points. From 46% share to 49% share. That's a structural step change of our competitive position. I prefer to get that in a 2 billion business like India than gaining one basis point in the whole of Unilever. You know what I mean? So I feel concentrated resources is very, very important. It normally covers it well, so look, dogs are getting better. Let me start there. The point is, during the course of the year, we've also made some corrections in terms of taking resource allocation out because we've started to play more value. We've delisted some of the brands, pasted in non-power brands. I also spoke to you about the billion of disposals that we talk about. It's also actually going to come out of that 8 billion. We're really talking about a billion coming off from there. I believe we'll go through some more correction but I see definitely see this what remains will be a growing business it's not something which I foresee at least on a multi-year basis to be a negative USG business but do we really want to grow them at the same levels of our brands on a consistent basis no there could be some periods where some of them can do well for the reasons he explained but I think what you should think on a multi-air basis with that changes it will be back to 25 power brands 80 percent of our revenue give us enough diversification and enough focus we like that and if you tell me would you like to have 25 rounds representing 85 percent of your revenue in four five years time as we have moved to from 75 to 80 in the last four to five years yes I would like that I think we have a question from Sarah thanks I'm Sarah from Morgan Stanley I've got two the first one was on back on beauty there's an obvious crossover between personal care and skincare and skin cleansing how do you think about color cosmetics in that context I mean you've obviously got some in India you've got our glass it's a great brand but does it does it really fit and the second question was on marketing just if we're thinking about mix change so you've got more premium which as you said requires more bi you've got more beauty and personal care which is more than home care but on the flip side you've go the 10 to 15 percent better ROI which is coincidentally very similar to another AI platform so on the 10-15 do you think that's kind of what What is needed in this environment to execute? Or do you think we should think about that as actually a financial benefit? Thanks. Yeah. Let me answer the first question, and then if you can repeat the second, because I couldn't hear well. There is something strange when it comes to sound from there that we cannot hear well, so it's just, hey, do we have any expansion to expand into color cosmetics more than what we are? No. We'll have a selective play in color cosmetics. We have a great brand in India with LACME. We have an incredible brand in our glass, you know, in high-end prestige color cosmetics. Color cosmetics is a special category because, you now, everybody look at the profit, but you have to look at cash. You know? I like the hybrid between color cosmetic and skin care, but I don't like pure color cosmetic propositions. You know, if you ask me, are you interested in this kind of color cosmetic brands with 300, 400 items, no. I like a brand like Hourglass with 30, 40 items, you know? And I like some of the hybrids that we are building in LACME between foundation and skincare, for example. So we see hybrides between face care and color cosmetic as a very interesting territory. We believe that several of our brands can play into that. By the way, we have a big success with one mix in Vaseline in India that is called Vaseline Soft Cloud, that people use it as a foundation. So we like this kind of things. We like color cosmetic hybrids with the skin care or with face care. We don't like this very fragmented color cosmetic proposition with an incredible amount of working capital that doesn't fit with our business model. Second question? It was about marketing. So you've got, well, the basic number of it was the 10% to 15% is a number that is also talked about by another of your big competitors. So the question really is, do you need that for this model to work? Is this a basic requirement to play in the new environment? Or do you think it's additive? because if we add up all of the sort of mixed benefits of going more premium, going more into beauty, I'm not sure whether that adds up in terms of your BEI as a percentage of revenue formula. No, I believe it's a fundamental insurance to play. So I really believe that the 10% to 15% higher return you know compensate for a fundamental change in the balance of power between a very concentrated media platform landscape and the industry so i don't believe that this is something that will flow to a pnl to the bottom line you know this is something that it will be necessary to continue boosting our top line growth in a context in which you know in the past a company like unilever you know buying big media in Brazil to TV Globo has a significant competitive advantage. But now you are buying from Meta or from Google or from Amazon or from Walmart or from TikTok. And that model doesn't favor a scale of purchase. It favors quality of engagement you generate in the platform. So I believe the improvement in our return of investment is a fundamental driver to keep our business model working in terms of continue boosting our top-line growth and deliver a modest margin expansion every single year. I think we have a question here from Robert. Thank you, Srini. I was intrigued by the comparison chart you had for operating margins versus U.S. peers. There's about 300 basis points of a gap. There's also a valuation gap between your stock and your peers. I think the people who believe in that valuation gap also believe that the margin gap can't be closed. Have you done any benchmarking on just the categories that you're in versus your peers, the countries that you'RE in? Is there any structural reason for why this gap is there? So we have done a complete, very good understanding. Parts of the gross margin get explained. by just the category footprint that they have, the premium portfolio that they have and where they play. That's not a like-for-like comparison, and therefore, say, we keep it outside. In our view, we clearly, when we look at it, between 300 to 400 basis points of gross margin gap is a function that we can handle, right? We can control, we can improve upon. It comes back to some of our pricing discipline, right, and we have to do a job of premiumizing it. We need to get some of our SPIs right. There is a level of savings which is available there. As we are thinking about productivity across the value chain, there is money to be really made. We spoke about some of the examples between backward integration, investing for productivity. There is value to be taken there. There is an underneath complexity in our business, right? While Fernando showed the significant progress that we have made, even when we think about the chassis of perfumes that we use, the chassis of some of the chemicals and formulations that we use, there is again a value that we can extract there in a meaningful manner and in a sensible manner. And there are obviously, therefore, premiumization again becomes an important one, even in the categories and the segments that we play. As we have continued to increase our share of premium, and we also spoke about it earlier that it's going to come at higher gross margins, there is that room to play. There are multiple levers for us which give us the confidence to get to that, but it needs to be clear that this is an everyday compounding story of how you are going to close these gaps and build this advantage. Look, and as I always give a proof point for all the people who say if you really look at the last couple of years, it's still a 260 basis points of gross margin expansion. One needs to be cleared that anyone who signs up for 100 basis points or gross margin year on year is actually hoping for commodity deflation right because if you if you really operate in our industry the ability to price hundred percent of cost inflation sustainably is not demonstrated yeah competition uh different players coming in so you can recover a certain portion of that inflation through pricing the rest the levers have to work hard so two parts answer one, we're conscious of that, that's really our operating model. Two, we have a clear point of view on the 300 to 400 and the levers and the drivers to work through that. But we're clear, it's a multi-year journey, it's not a here and now short-term fix. And I feel, you know, to your question, if you look at category footprint, geographically footprint, segment footprint, channel footprint, probably of the 400 basic points, there is around 40%, that is a structure that is not easy so easy to kill but you know all the rest is in our hands you know and i feel it's important you know the best way of improving your margin in the long run is strengthening your equities because strengthening your equity is drive volume growth at marginal contribution of 60 or drives a potential repositioning of the brand into a higher price point because normally you cannot go with pricing ahead of the market you know so basically you know if we continue strengthening our equity if we continue having 65 percent of our value our brand equity is strengthening every single year i feel the margin will will continue approaching the best in class you know and some of these people that have higher margin has been growing less than us you know So let's see if that margin stays where it is also. We probably have time for one more question. Jeff? Two. Always. Jeff Stent, BNP. If I could sneak two, if that's possible, Gemma. The first one is on oral care. I don't think you really mentioned it at all during today. So just what your thoughts are on your presence in that category and how you see the evolution of your presence in that category. And the second one, I think the CMD has been great, so thank you, and thank you Gemma, because I know these things take a lot of work. But you're kind of saying that you'll deliver what you said you would deliver previously. So I'm sort of wondering, were previously you being ambitious, or are you not being ambitious now? you know which is it because it all sounds really good but you're basically telling us you're gonna deliver exactly the same stuff you told us you were gonna deliver a couple years ago so if you could reflect on that thank you yeah well in the in the second question you know we are saying that we will deliver what we said we were going to deliver two years ago at the moment in which nobody is delivering what they were delivering two years ago. And I feel there is a real change in the situation of the sector. You know, if you look at the growth rate of most of our peers today, it's not what they were thinking in their midterm guidance and not what they were delivering a couple of years ago. So, hey, we are very pleased with the performance we are having with the HPC business, you know, and it's true. This year we are growing above the 6% range. You know? We have delivered 3.3 percent volume growth in the in the last three quarters but i feel you know you have to combine ambition ambition with you know a kind of some level of cautiousness because you know some things can really not work at one moment of time the context can change you know we are in a period of extreme volatility of cost you know, you don't know if that will have an impact usually in In inflationary periods, you know, our categories tend to be inelastic, and Unilever portfolio tends to be an elastic, but I would be silly if I consider that the elasticity that we used to see four or five years ago is a good proxy for the elasticity of the future, because the cumulative inflation we have seen in consumer goods, it has been very, very high. So take our guidance as a kind of ambitious but solid and with high level of confidence mid-term range ambition with a level of volume that we believe at 2% is what we should deliver in more inflationary period. It should be a bit higher than that in normalized inflationary periods. So that's basically what I can say. I don't know what else about that. Regarding oral care, we like our oral care business, you know, it's a very strong oral care leadership position in several geographies, you know, our Vietnam business, our Indonesia business, some of our European business are very, very strong. We have a good presence in India. Do we have any plan to expand our presence in oral care? No. Do we need to continue innovating to ensure that that position remains solid yes in a category where incumbency and a strong authority system matters and we play in all these geographies the role that the leading brand in other markets play so nothing more to say about oral care we like the financials of oral care will like the contribution they made to some of our most important emerging market geographies do we plan to expand the presence of oral care in other geographies no thank you um so that leaves it to me to say thank you so much to all of you for spending the time with us today we it's been great to see you all um please do join us for lunch and some opportunities to interact with the booths and experts after this if you are able and if you traveled here to see us today safe travels home thank you all very much thank Thank you.