COLGATE PALMOLIVE CO — Call Transcript 2026

Okay. Welcome back, everybody. Thanks for joining. For our next session, I'm very happy to welcome back Colgate-Palmolive Company to the conference with a new face. A new face, at least within the Colgate family. Shane Grant, Chief Operating Officer of the Americas, is with us. Some of you may know Shane from his time at Danone or prior to that, Coca-Cola. Welcome, Shane. Thanks. Also John Faucher, who is Executive Vice President of M&A and Special Projects. Good to see you, Steve. Thank you both. We're going to use the entirety of our time for Q&A, and Shane, I'm just going to start with you. As I said, first appearance at the conference with Colgate. You've been with Colgate, I think, almost exactly a year as we stand here today. I guess, reflecting on those first 12 months, what are your not so first impressions and, I guess, what stood out most positively as you've joined, and also, where do you see the biggest opportunities for Colgate as you look ahead? Yeah. Thank you, Steve, and good to be here with you in this relatively new capacity to have this exchange. Look, maybe firstly in my first year, I've been head down, unsurprisingly. Head down, really focused on learning the business from every dimension horizontally, but obviously with a deep focus on North America and Latin America. Maybe a few impressions and to sort of start from the top, purpose of the company, grounded in health. If we think about where the consumer is today and where the consumer is going, the sort of notion of health at scale, which the company stands for, I think is hugely compelling for our teams and certainly for me personally. That'd be the first thing I would say. The second thing, coming into the company, is just how impressed I have been at the progress and the journey the company's been on, in executing its 2025 Strategy, which obviously concluded at the end of last year. Under the leadership of Noel and the leadership team of the company, just what I would describe, just a massive transformation of the business model of the company. A business model which is about top-line growth, about margin expansion and reinvesting into the business and the brands, and I think that's been an incredible transformation of the business. Maybe the third thing I would say is, what's really impressive is I think the capabilities that have been built, and you've, I know, exchanged with the team on some of them in the past. You look at the AI and data journey, the RGM journey, the science journey, and I think it's just really impressive the progress that the company has made. Lastly, the last piece that's just incredibly striking is culture. This is a company which is blessed with long-tenured people that deeply care about the company. To the second part of your question in terms of opportunities, look, I would say that, Steve, is really guided by the 2030 strategy. If you look at sort of the evolution of the strategy, it's categories and brands at the center. Increasingly, the way we're thinking about that mission is through the lens of top category country combinations and driving those with high conviction. Absolutely, brands at the center. The second thing I would say in terms of opportunity is the journey we're on omnichannel demand generation, which is a hugely compelling space to build a next generation of demand model for the company. The third piece I would sort of point out, and is under the capabilities, which is innovation, which a high conviction to step up the intensity of the innovation. In a period where we think probably macro, we're going to need to find ways to make volume and earn the pricing. That innovation quotient of the company, we think, is going to be really important. Probably on the same theme, it's going to be a pretty volatile environment. It's already a pretty volatile environment, and I think the international footprint of the company's going to be to the fore in that environment because we have people that are used to dealing with this kind of agility and that kind of experience at a company. Look, a terrific first 12 months. Much more to go and learn about the company, of course, but maybe some first impressions. Yeah. I think from the outside, the capabilities journey, all of those things resonate, but the capabilities journey up to 2025 and then extended now out to 2030 has been pretty compelling. How does that translate into operating priorities for the Americas region? We'll get into differences between North and Latin America in a bit, just overall, how do you frame the key priorities for the region? Probably unsurprisingly, Steve, that 2030 strategy is a huge influence and trickle down onto the agenda from an operating point of view into Latin America and North America. I think if you think about the innovation agenda specifically, again, that starts with the brands. The way we're thinking about that, in both of the geographies, but I think across the company, is really firstly just core excellence. The superiority of the core brands, investing in those core brands, making sure those core brands are vibrant and healthy. Certainly innovation, and a stepped-up agenda. If you think about Latin America and you think about the innovation agenda through the lens of socioeconomic level and the pyramid. Shaping the innovation agenda to deliver for all extremes in that pyramid, we think that's going to be really important. Increasingly, that's true in the U.S. The dynamic of a K-shaped economy we see as alive and well in the United States, and so thinking about the innovation agenda to serve all parts of that pyramid. For us in particular, I would say a huge opportunity around premiumization. That would be, I think, the innovation piece. I think on the omni-demand generation, this notion of a 21st century demand model of the company, I think, is relevant for all of our geographies, but at the center in North America, at the center in Latin America. I would describe that as. Figuring out ways for the company to win today. You think about the channel environments that we need to be competitive in. If you think about the U.S., for example, it's pretty clear. You've got to win in mass, you've got to win in club, and you've got to win in digital commerce. It provides a really clear roadmap. Also with an eye on the future, and you think about the capabilities that we're building around social commerce, agentic. That duality of kind of setting up the ODG model for this two-speed delivery. Revenue growth management, which I think if we buy the hypothesis that this next five years, we're going to need to find new ways for the industry to grow, our categories to grow, revenue growth management we think is going to be a really important tool. That I would describe as sort of the fundamentals of good pack price architecture, but also employing some of the next-generation tools we have in the business, like Promo AI, which is really allowing us to step up the precision and the frequency of price adjustments with our customers to be able to deliver better RGM outcomes. Net, Steve, highly relevant to North America and Latin America, as you would expect, with maybe some specific application which we're excited about. Yeah. You're in a unique position because Latin America represents kind of the economic engine for Colgate, multi-decade strength, dominant market share in some key categories. North America, by contrast, is kind of the biggest opportunity for incremental improvement. Shane, how do you compare and contrast, and what are some of the strengths in Latin America that could be leveraged in North America or maybe vice versa? Yeah, clearly, Steve, those businesses are in different start points. It's obvious from the results they are. We're crystal clear on that. Maybe to comment on Latin America first. If you just stand back from that business, sort of from a fundamentals point of view, and I've been spending a lot of time with our teams right across LATAM. The fundamentals of that business are just mightily impressive. Enormous brand strength, market-leading household penetration, incredible loyalty, just really a powerhouse brand led by the Colgate brand. Underpinning that is just real execution muscle, across a diverse set of channels, but just huge execution powerhouse in Latin America. Thirdly, people. Long-tenured, experienced, expert operators of our business in Latin America. Just fundamentally, that business is really sound and it shows in the results. The current environment, we see the categories, relatively healthy. Somewhat pricing-led, but still underlying volume growth. Positive market shares across most of the geographies. Total progressively recovering, but the team doing a very nice job in terms of premiumization with platforms like Optic, with good success with innovation like Purple. Fundamentally, we feel good about Latin America. The results are good, and we expect that to continue. North America, obviously a very different start point. Noel mentioned now on a couple of conference calls that it's a real focus for us as a team. It's clearly a real focus for me and our North America group and our leadership team. Fundamentally, the mission there is to improve the organic sales growth. That's the number one mission that we are aiming for. To give you a sense of sort of the dynamics, if you roll back to February 2025, the categories themselves, I would describe as sort of moderate growth, but pretty consistent growth. We have seen in the first weeks of May some degradation in the categories. We have seen those categories markedly slow. Obviously we're watching that and preparing the business to respond to that dynamic. To some extent, it's probably unsurprising given the state of the consumer and some of the obvious pressure on the consumer. There is a structural underlay of this K-shaped economy, which we see only sort of becoming more dynamic. From a market share position, we did cede some share on oral care in the first quarter. We've seen that somewhat stabilize. The path back on that is premiumization, premiumization. We started that journey. The relaunch of Optic was a very, very good first step. We see some initial positive response to that. We're also doing what I would describe as some surgical interventions on some pricing action where we see some promotional intensity starting to tick up. The categories have remained largely rational, but we have seen some slight uptick in activity, which we're dealing with. The other lever we've got in North America, more short-term, is our home care business in particular. Which has performed very, very well. Brands like Fabuloso, Suavitel, which we think can be big growth engines for the company. Obviously a lot of focus on that business. The categories underpinned by ODG and some step-up we can do in some channels. Underpinned by really rebuilding a much more assertive innovation pipeline, which we've made very, very good progress on. You're not the first to observe recent slowing in North America. I guess your perspective on how much of a concern is that? Do you see that more as, in your base case, a timing blip, and that we kind of resume still modest levels of category growth? Or do you see more risk that this is a real inflection to the downside? Look, it's probably, honestly, Steve, too early to tell. We've seen some of this degradation occur really from the start of May, so it's take it for what it is, which is three weeks of data. We will see where the consumer settles. We're obviously preparing the business with a portfolio lens in mind, through the lens of how do we think about the business in terms of the right kind of stratification of the business. We want to be able to serve the lower end of the socioeconomic consumer base exceptionally well, and we have the tools for that with a platform like Cavity Protection, for example. We want to be able to serve equally the premium consumer. You think about the role of the brands like hello or Optic, we have the ability to serve both ends of that consumer spectrum. Steve, those dynamics would be in the strategy anyway. It's just how we adapt those strategies for the moment as opposed to sort of wholesale shift in the business. Yeah. Noel has mentioned a strategic reset in the U.S., I think you've just touched upon components of that. Some of those components, innovation, RGM, are not really new. Is what's new just the elevated focus that North America's getting within the broader corporation? Is it we need to be tighter on execution? How would you define what's changing in North America? Yeah. Look, firstly, Steve, I think, on the North America question, we have spent the last number of months, and Noel has referenced this on the calls, doing what I would describe as a deep diagnostic on the business. That is not a evaluation of the last quarter, it's really been an evaluation of the last decade. Obviously, when you take that sort of a view on the business, you can see some exceptionally good things. There are some really, really exceptional things in the chassis of the North America business that we think we can accelerate. There's clearly some things to fix. We've also looked at it through the lens of where do we think the consumer is going, where are the big revenue and profit pools in the market, where are the channel bets we want to make? It's a pretty comprehensive piece of work we've done. I think to answer your question, the go-forward plan has got all the components you would expect it to be to be an end-to-end plan, which is, it makes pretty clear choices across the portfolio of the brands that we think we can really scale and bet on. I would tell you, for example, in oral care, the opportunity we have for premiumizing the business is just enormous. Just enormous. Both in the emerging brand spaces, in whitening, and then whole new segments that we really have not penetrated today. I say we conclude that piece of work on oral care being really optimistic about the potential of the business, underpinned what is still today the most powerful brand in the category in terms of consumer relevance. Same logic on home care, where we have some businesses that we think have been probably under-leveraged with enormous potential on a go-forward basis. Same on personal care. We've done a pretty deep dive in the categories to look at what are the brands that we want to really prioritize and invest in and innovate on. On ODG, and the channel selection, again, a pretty clear picture. Some immediate channels that we need to win and upweight that we talked about, some channels that we need to prepare for for the future. On the innovation front, the team has done, I think, some excellent work to rebuild a pipeline of innovation at scale over the next three years. Obviously, it's going to take us a while to deploy that, and some of them are going to be tactical, and some of them are going to be very big scale in nature. We've thought about that challenge through multiple dimensions. We've thought about it through the lens of a constant renovation of the core. We've thought about it through the lens of new, wholly new big, bet innovations we can make. We've thought about it through the lens of retail environment-specific innovation. All of that underpinned by capabilities that you mentioned, that we think we can take from the company level and apply much more assertively into the North America sell. The last thing I would say is that this sort of reevaluation of the business has given us an enormous opportunity to reengage our people. The power we've seen in being able to communicate with much more to come, here's the roadmap for the business, gives our teams a real opportunity to really buy into that roadmap and be part of that turnaround story. We've seen that enthusiasm build in spite of the current results. Look, long way to go, Steve, but we feel really good about the work we've done and a lot of execution ahead. Great. One last question on North America, which is you spoke to innovation, premiumization, servicing the upper end of the K. At the same time, a lot of the center of gravity in Colgate's oral care franchise and definitely in home care and personal care is in the value area. Are there opportunities to lean into some of those brands and lean into value to service the more strained end of the K? Absolutely, yes. We think about really the full revenue growth management playbook. As you said, we've got brand platforms that serve that bottom-end consumer exceptionally well today, and also for us, perform a very clear role in the business. If you take a platform like Cavity Protection, for example, really important business for us, serves a mid to lower socioeconomic consumer, plays an important volume role for us, and we will absolutely keep providing energy behind that. If you think about brands like Fabuloso and Suavitel, they sit slightly below the category average price point, really important platforms, and we can premiumize those brands. For us, it's very much an and as opposed to an or. We want to be able to service the full market, particularly in the context of this K-shaped economy. Okay. Which is something I think you've done well in Latin America. Pivoting kind of back to Latin America. You mentioned relatively resilient and broad-based performance thus far this year and for a while. As your attention focuses increasingly on North America, how do you maintain that consistency and that growth in Latin America, especially should macro conditions soften? Yeah. I think continuing to extend the strength of that business that we talked about earlier. If you think about the foundation of that business, because the brands are strong, because we have this execution and go-to-market capability, the foundations for continued performance we think are just absolutely there. I do think that there will be continued efforts in that business, and we've seen very, very good progress already around the premiumization opportunity, even in Latin America. If you think about what the team has done on Luminous, for example, we've seen enormous pivot to more premium opportunities to continue to develop and grow the category. I also think that there is, and this is a longer-term item, where if you think about the structure of that business in Latin America, in some of our markets, we have a true multi-category play. In some of our markets, we are much more of an oral care-centric play. Obviously, we are thinking about what does the category shape look like across Latin America over the long term, but doing that very, very deliberately. Doing it with an eye on making sure the core businesses of today are healthy. Over time, we see certainly more expansion opportunity in Latin America. The last thing I would say in terms of any change in the market context in Latin America, if there is deterioration in the consumer context, one of the real strengths of our Latin America business, and again, back to the team, they have proven remarkable in being able to manage through different cycles. You talk to our team in Venezuela, or you talk to our team in Argentina, and they have largely seen it all. The ability of our teams to be able to manage through different market contexts, we have a lot of confidence in, and to some extent we think that business can be somewhat all-weather. I think continuing to drive the strengths of the business and a team that can adapt, we think, along the way. Okay. Maybe John, you want to weigh in on this too, but I'm curious, Shane, if you think about leveraging best practices across the company, first off within your regions, even within subregions across categories, how does that work today? How evolved is that? Is that an opportunity? Then how do you engage with Panos' organization, and how do we share best practices and evolve the broader corporation across regions? Yeah, for sure. Firstly, if you think about the capability journey of the company, the company's been on a capability journey where it has successfully scaled a number of big capabilities and done that globally. That capability build has been led from the center and driven right across the company. If you think about the journey on AI and data. If you think about the journey on revenue growth management, if you think about the innovation process that I know we've talked to you about before, those are globally scaled capabilities led from the center and truly global in nature. It's also true that we have some centers of expertise that have naturally emerged in the business. If you think about the Hill's business, for example, highly developed capability on the use of data, on the use of the profession, and what I think we could describe as a precision marketing model. If you think about Latin America, the execution power and the customer expertise is clear. If you even take North America, for example, Total was born in North America. Optic was born in North America. We have proven in that geography that we can build big global franchises. If you think about Asia, for example, I would say from our perspective, probably the leader in omni-demand generation and thinking about advocacy at scale and social-first marketing. The question on scale is, some of it is structural. Our global teams are clearly charged with driving best-in-class execution across the company, taking good ideas and scaling them fast. Purple's a probably good example of that, born in China and now in every geography in the world and driving very impressive growth. It also happens organically, and it happens organically in my experience because of the culture we have, which is Colgate is a highly networked company. I say that in the best possible way, which is we have team members that have been at the company a long time, have deep relationships, and want each other to be successful. Therefore, good news travels fast, and therefore we get more scale. Maybe one last piece on that. One of the, I think, really interesting dynamics we're seeing in the business today, which is the one application of AI in the company, it's giving us an ability to lift and shift good programming faster. Particularly in marketing communications, because it's giving us some common backbones that we can then iterate and scale geographically much, much faster. Look, I think a combination of some structural items, some center-led items, and then a bit in the culture, Steve, which is allowing us to scale, I think, good ideas quickly. Great. If I can just add one example to that. Shane talked about China and social, right? If you think about as social spreads across the rest of the globe, historically, big CPG companies would be behind in something like that, as you think about the rise of social commerce. If we can send our marketing teams, which we have, and the entire senior team over to Shanghai to see how our China team puts out hundreds, if not thousands, of pieces of content to adjust to this new social model, understands how you build brands versus simply selling products in this social commerce model. We have great examples internally that our teams around the globe, whether it's in Europe or the U.S. or Latin America or Africa, they can take those examples and actually come out ahead of the curve as we see that social commerce business expand around the world so that we're not operating behind some of these insurgent brands, which has historically been where CPG companies have found themselves. Exactly. Yeah. Okay, great. All right, John, now that we've got you talking. Let's get you talking about the rest of the world. In the context of the here and now, talked about some pressure we're working through in North America, relative resiliency in Latin America. As we look around the other regions of the world, here in Europe, Asia Pac, et cetera, what are you seeing and how concerned are we about direct and indirect impact of energy shortages? I think, if we had all sat here on March 1st and talked about where we thought the consumer would be on June 1st with the continuation of everything that's happened in the Middle East, I think we would've come up with a more negative situation than where we're sitting right now, where we would say that the consumer has generally held up very well around the world. I think we have seen less of the type of weakness, even in the U.S., I think we've seen less of the type of weakness potentially than we could have. I think that's encouraging. There have been a lot of concerns about the European consumer, about the Southeast Asian consumer, and in general, we have seen less of that indirect impact. I think consumer sentiment is still a little bit soft where we'd like it to be, but better than it potentially could have been. In terms of direct impact from the conflict, very modest. We have, I would say, a smaller than average Middle East business, partially because we just have such a geographically diverse portfolio. I think we're seeing less direct impact. The consumer is generally, I think, holding in pretty well. If you look across our businesses, Shane talked about North America and Latin America, Europe, I think we've been pleasantly surprised by how the consumer has held in. Whether that's Western Europe, Southern Europe, Northern Europe. Still Europe for us is a little bit of volume, a little bit of price, and that's been sort of our consistent focus. Africa, Eurasia, which has now merged into the EMEA division. We're still getting some FX related pricing, which is encouragement. We've had a nice volume bounce back. Asia, where we had been struggling a little bit from a performance standpoint, we've seen generally the consumer hold in pretty well. We've got big markets like the Philippines where there had been some concern from investors about how is the consumer going to hold in. We think that business has done very well. China and India, which had been more difficult for us, India bounced back, had a great first quarter. We've seen the H&H business improve sequentially. We're getting more of the fundamentals right there. Some easy comparisons. Still some work to do going forward, but in general, we've seen that part of the portfolio hold up well. Have you seen any smaller competitors get impacted by supply shortages? Is there a market share opportunity out of this, or is it more category resiliency? We have not directly seen that happen. I think there is an advantage to being a scale player in the world when uncertainty comes in. Your ability to go out and make the right decisions quickly, your ability to secure supply, your ability to look out six, nine months and get the supply you need in order to keep your supply chain running. We have not been hearing of major supply shortages for smaller competitors. We think if we're gaining share, it's because we've got great innovation, increased marketing support, we're moving to this omnichannel demand generation that Shane talked about. Winning on the ground in a difficult environment, as Shane talked about with Venezuela and Argentina, that's what we do best as an organization. Okay. Good. Hill's Pet Nutrition. There's been mixed signals, mixed commentary on the relative health and resilience of the category. Maybe a bit on what you've seen categorically and then how the Hill's business is positioned against that or aside from that. Sure. I think we've been remarkably consistent from a category standpoint with pet food over the last 18 months or so, which is we think the category is generally flattish. What we are expecting as a company is to outperform by several hundred basis points versus the category, given the strategic decisions that we've made over the last several years, really the last five or six years. I know there was another pet nutrition company that talked about small dogs, cats, what have you. We have made significant investments over the last five or six years to focus on those under-tapped segments where we under-index. We've always had a strength in dry dog food and bigger dogs. We built our Pet Nutrition Center. We built a Small Paws facility to focus on the nutritional needs of small dogs. We opened that about four years ago. That drives a lot of the innovation that we're seeing in the Small Paws, which is the fastest growing segment of the dog category. We've also made a commensurate investment in cat, where we were under-shared in cat. Really what helps both of those, actually, is the increased focus on the wet side of the category. We opened our Tonganoxie facility about three years ago. We needed more innovation, more capacity coming in wet, both in terms of different forms, in terms of stews and mousses and things like that, as well as different packaging, tins, pouches, et cetera. That's given us tremendous power to innovate. It's the strategic focus on those under-tapped segments, Small Paws and cat. The capabilities really scaling the benefits of those capacity additions on the wet side as well. Yeah. Hill's is generally servicing the less stressed consumer in the U.S. Yes. There's no question that where we're seeing that stress is big bags of dog food, big bags of dry food have gone up in price over the time. We think we're seeing a little bit of an impact there on the business. What we've also done is, as part of this strategic shift over the last couple of years, we've really increased the focus on the therapeutic side. That's Prescription Diet, where we have a real opportunity to build the category. That's a lot like what's worked for us so well on the therapeutic side in oral care in Europe, for example, where we've gone into the vets and we've said to them, "When a pet parent comes in and their dog has, to speak politely, gastrointestinal problems, a better option than antibiotics would be Hill's Gastrointestinal Biome," which is a product that can help stop those problems within 24 hours. We have seen really nice growth on the therapeutic side, which again is really where the hardcore science comes to play for Hill's. We feel good about both sides of the business, but Prescription Diet, even higher price points, attractive margins, that's really been going strongly for us. Okay, great. Let's talk about the environment in terms of its impact on the cost side of things, raw materials, logistics, et cetera. Obviously, those pressures are going up. You spent a long time trying to build flex in the P&Ls. Now you have that flex in the P&L. I guess the question is, how much flex in the P&L is there, and how does the Strategic Growth and Productivity Program fit into that mitigation strategy? Sure. I'll start off on that, and then Shane, I think, can probably give you some ideas in terms of how that really all plays out in the businesses. If you're building flexibility in the P&L the right way, you're not using it all up in one shot, and that's been a real focus for us. What it really starts with is our aspiration to deliver consistent, compounded dollar-based earnings per share growth. Right? How stocks work, you sustain the P/E multiple, you expand the P/E multiple through organic sales growth. You deliver very competitive dollar-based EPS growth. Hopefully, you can deliver TSR that compares favorably versus your peers, and that's what we're focused on. We have really focused on building that flexibility in the P&L over the last six, seven years as we executed 2025 and transition to 2030, so that even in a tough year like 2025, we can go out and deliver dollar-based EPS growth. We had negative FX, we had category slowdown, we had increased raw material costs, we had additional tariffs, and we were able to get through that in a way and deliver dollar-based EPS growth that 10 years ago, we might not have had the flexibility to do that. We continue to build up that flexibility in the P&L. The key for us in a situation like this with the higher costs is to get them out into the businesses. Right. We want to say, Here's what we think price of oil is going to be. Here's what the impact on our business. That way, you all can model it, but more importantly, Shane can work with his divisions to model all those costs. That's what we did in 2022, which is where we were really the first company in the space to come out and say, "Look, this is going to be worse than you think it is." It creates a situation where, yes, you're providing the news earlier, but you get visibility in the numbers faster, which we think plays out well over the medium to longer term. Do you want to talk about how you work with the businesses? Yeah. I think, Steve, to sort of extend John's point, we obviously got out quite early, we think publicly, but we got out, as importantly, quite early inside the business. There's enormous power from an operational point of view of getting those cost realities in the P&L and in the system fast, which we did. Then it allowed our teams on the ground, be it in Europe, be it Latin America, be it in the U.S., to respond and prepare. The way the teams are responding, obviously, is different by market. Obviously, the commonality is productivity, productivity as the first port of call, and really maximizing everything in the productivity pipeline as the first action. Then the pricing action is much more segmented based on geography. Obviously, in Europe, it's much more of a hand-to-hand combat situation and it's much more careful. In the U.S., we're probably going to be much, much more considered in terms of any further pricing action. We think much more it's a mix play and revenue growth management tool play as opposed to headline pricing, given the state of the consumer. In markets across Latin America, we may have some opportunities where we can drive some more premiumization and pricing. I think the mechanics inside the business, as John set up, are very, very positive for us to be able to respond at the right kind of pace and with good visibility. If I can just follow up, I'll finish up on the SGPP piece. Yeah, sure. The way you build that financial flexibility is you're investing in capabilities. If you can invest ahead of the curve, you do that so you have flexibility year to year on some of the spending. The other thing is you notice, okay, are we entering a period in the 2030 strategy where we want to build new capabilities like ODG, where we know that maybe categories aren't going to be growing at the same rate. That's why you announce something like SGPP last year, build up the fundamentals, go through, figure out what the program's going to deliver, and then that gives you the opportunity to say, "Okay, we're keeping the range of EPS guidance for 2026 despite some fluctuation in the gross margin." That we went from guidance of gross margin up to gross margin down. We kept the range. We did see some numbers come down at the high end of the range. The shape of the P&L changes somewhat. Having that flexibility by focusing on the productivity ahead of time. That's what gives you the flexibility. Shane can go in and say, "Look, advertising cut's not on the table. We need to keep that brand support going." You know, investing in AI, not on the table. That's the posture you want to have when you get this level of volatility. Great. You mentioned investing in AI. I want to hit on that before we close. It's been a focus for Colgate, actually, for a couple of years, and it was a big focus at CAGNY, mostly through the lens of Hill's. Shane, how is just digital investments in general, but AI specifically, changing the way that work is done within your region? Yeah. I think, as we talked about earlier, Steve, I think the company's made enormous multi-year progress on its data foundation and its AI agenda. I think generally, the application we have seen across the markets, including in North America, including in Latin America, has been really focused on a few distinct verticals. I would describe those verticals first and foremost, marketing. Efficiency of spend, but also speed and cost-effectiveness of content creation. We've seen secondly, it applied through innovation. Everything from trend tracking through to concept development and being able to get through those cycles at a much, much faster pace. Thirdly, our supply chain with obviously some obvious examples. Maybe one that I would point out, which I think has had really meaningful impact in North America in particular, but also in parts of Western Europe, is a tool that you may have heard about called Promo AI, which essentially allows us to take shipment data, thousands of promotional pieces of data by week, by customer, by geography, and scan data and put them into a large LLM, and then work with our customers to optimize the pricing plan. I mention that example because it's providing concrete outcomes today and for U.S. customers with an ambition to expand it. We've seen real, concrete, positive outcomes from it with an ambition to scale it further. A couple of things we've learned about the application of a tool like that, which I think has been really powerful for the business as we drive the AI agenda. One is, developing these tools, what I would describe market back, which is what's the use case? What's the use case in the market, and then how do we develop the tool to serve that use case? The other more practical piece is how are these tools getting integrated into the operating routines of the business? How do they meet the teams in terms of the routines and the ongoing cadence of the business? A tool like that we think has got ultimately global application, but obviously because of the trade dynamics, it's very focused on developed markets today, but more to come. We're almost out of time, but maybe in closing, two to three priorities that you'd want folks in the room to judge your progress against over the next year. Terrific closing question, Steve. Thank you. I think, firstly at the company level, and this is probably obvious, reattaching the business to its long-term growth algorithm of 3%-5%. That's certainly a focus for us as a team. The team's proven we can do that, reattaching the business to that's going to be really important. Geographically, I think sustaining the outsize growth in Latin America is going to really matter, as you referenced earlier. Sustaining what we think is really solid performance in Hill's, in EMEA, early recovery of Asia, we think is very encouraging. If we can add on to that, recovery of North America over time, we think the company will give ourselves a good chance of reattaching into that 3%-5% space. Lastly, I would just say, one of the things that's really striking about the company is this truly has a global footprint. We think in this moment, that's a really advantaged place for us to be. Within that, we're obviously very focused on driving household penetration, market share, and competitiveness right across the geographies to make sure the model remains robust and sound. All right. Right on time. With that, thank you, Shane. Thank you, John. Thank you, Colgate. Thank you, everybody in the room. Have a great conference. Thanks, Steve. Thanks, Steve.

Speaker 3: Okay. Welcome back, everybody. Thanks for joining. For our next session, I'm very happy to welcome back Colgate-Palmolive Company to the conference with a new face. A new face, at least within the Colgate family. Shane Grant, Chief Operating Officer of the Americas, is with us. Some of you may know Shane from his time at Danone or prior to that, Coca-Cola. Welcome, Shane. Okay. okay Welcome back, everybody. welcome back everybody Thanks for joining. thanks for joining For our next session, I'm very happy to welcome back Colgate-Palmolive Company to the conference with a new face. for our next session i'm very happy to welcome back colgate-palmolive company to the conference with a new face A new face, at least within the Colgate family. a new face at least within the colgate family Shane Grant, Chief Operating Officer of the Americas, is with us. shane grant chief operating officer of the americas is with us Some of you may know Shane from his time at Danone or prior to that, Coca-Cola. some of you may know shane from his time at danone or prior to that coca-cola Welcome, Shane. welcome shane

Speaker 2: Thanks. Thanks. thanks

Speaker 3: Also John Faucher, who is Executive Vice President of M&A and Special Projects. Also John Faucher, who is Executive Vice President of M&A and Special Projects. also john faucher who is executive vice president of m&a and special projects

Speaker 1: Good to see you, Steve. Good to see you, Steve. good to see you steve

Speaker 3: Thank you both. We're going to use the entirety of our time for Q&A, and Shane, I'm just going to start with you. As I said, first appearance at the conference with Colgate. You've been with Colgate, I think, almost exactly a year as we stand here today. I guess, reflecting on those first 12 months, what are your not so first impressions and, I guess, what stood out most positively as you've joined, and also, where do you see the biggest opportunities for Colgate as you look ahead? Thank you both. thank you both We're going to use the entirety of our time for Q&A, and Shane, I'm just going to start with you. we're going to use the entirety of our time for q&a and shane i'm just going to start with you As I said, first appearance at the conference with Colgate. as i said first appearance at the conference with colgate You've been with Colgate, I think, almost exactly a year as we stand here today. you've been with colgate i think almost exactly a year as we stand here today I guess, reflecting on those first 12 months, what are your not so first impressions and, I guess, what stood out most positively as you've joined, and also, where do you see the biggest opportunities for Colgate as you look ahead? i guess reflecting on those first 12 months what are your not so first impressions and i guess what stood out most positively as you've joined and also where do you see the biggest opportunities for colgate as you look ahead

Speaker 2: Yeah. Thank you, Steve, and good to be here with you in this relatively new capacity to have this exchange. Look, maybe firstly in my first year, I've been head down, unsurprisingly. Head down, really focused on learning the business from every dimension horizontally, but obviously with a deep focus on North America and Latin America. Maybe a few impressions and to sort of start from the top, purpose of the company, grounded in health. If we think about where the consumer is today and where the consumer is going, the sort of notion of health at scale, which the company stands for, I think is hugely compelling for our teams and certainly for me personally. That'd be the first thing I would say. Yeah. yeah Thank you, Steve, and good to be here with you in this relatively new capacity to have this exchange. thank you steve and good to be here with you in this relatively new capacity to have this exchange Look, maybe firstly in my first year, I've been head down, unsurprisingly. look maybe firstly in my first year i've been head down unsurprisingly Head down, really focused on learning the business from every dimension horizontally, but obviously with a deep focus on North America and Latin America. head down really focused on learning the business from every dimension horizontally but obviously with a deep focus on north america and latin america Maybe a few impressions and to sort of start from the top, purpose of the company, grounded in health. maybe a few impressions and to sort of start from the top purpose of the company grounded in health If we think about where the consumer is today and where the consumer is going, the sort of notion of health at scale, which the company stands for, I think is hugely compelling for our teams and certainly for me personally. if we think about where the consumer is today and where the consumer is going the sort of notion of health at scale which the company stands for i think is hugely compelling for our teams and certainly for me personally That'd be the first thing I would say. that'd be the first thing i would say The second thing, coming into the company, is just how impressed I have been at the progress and the journey the company's been on, in executing its 2025 Strategy, which obviously concluded at the end of last year. Under the leadership of Noel and the leadership team of the company, just what I would describe, just a massive transformation of the business model of the company. A business model which is about top-line growth, about margin expansion and reinvesting into the business and the brands, and I think that's been an incredible transformation of the business. The second thing, coming into the company, is just how impressed I have been at the progress and the journey the company's been on, in executing its 2025 Strategy, which obviously concluded at the end of last year. the second thing coming into the company is just how impressed i have been at the progress and the journey the company's been on in executing its 2025 strategy which obviously concluded at the end of last year Under the leadership of Noel and the leadership team of the company, just what I would describe, just a massive transformation of the business model of the company. under the leadership of noel and the leadership team of the company just what i would describe just a massive transformation of the business model of the company A business model which is about top-line growth, about margin expansion and reinvesting into the business and the brands, and I think that's been an incredible transformation of the business. a business model which is about top-line growth about margin expansion and reinvesting into the business and the brands and i think that's been an incredible transformation of the business Maybe the third thing I would say is, what's really impressive is I think the capabilities that have been built, and you've, I know, exchanged with the team on some of them in the past. You look at the AI and data journey, the RGM journey, the science journey, and I think it's just really impressive the progress that the company has made. Lastly, the last piece that's just incredibly striking is culture. This is a company which is blessed with long-tenured people that deeply care about the company. To the second part of your question in terms of opportunities, look, I would say that, Steve, is really guided by the 2030 strategy. Maybe the third thing I would say is, what's really impressive is I think the capabilities that have been built, and you've, I know, exchanged with the team on some of them in the past. maybe the third thing i would say is what's really impressive is i think the capabilities that have been built and you've i know exchanged with the team on some of them in the past You look at the AI and data journey, the RGM journey, the science journey, and I think it's just really impressive the progress that the company has made. you look at the ai and data journey the rgm journey the science journey and i think it's just really impressive the progress that the company has made Lastly, the last piece that's just incredibly striking is culture. lastly the last piece that's just incredibly striking is culture This is a company which is blessed with long-tenured people that deeply care about the company. this is a company which is blessed with long-tenured people that deeply care about the company To the second part of your question in terms of opportunities, look, I would say that, Steve, is really guided by the 2030 strategy. to the second part of your question in terms of opportunities look i would say that steve is really guided by the 2030 strategy If you look at sort of the evolution of the strategy, it's categories and brands at the center. Increasingly, the way we're thinking about that mission is through the lens of top category country combinations and driving those with high conviction. Absolutely, brands at the center. The second thing I would say in terms of opportunity is the journey we're on omnichannel demand generation, which is a hugely compelling space to build a next generation of demand model for the company. The third piece I would sort of point out, and is under the capabilities, which is innovation, which a high conviction to step up the intensity of the innovation. In a period where we think probably macro, we're going to need to find ways to make volume and earn the pricing. If you look at sort of the evolution of the strategy, it's categories and brands at the center. if you look at sort of the evolution of the strategy it's categories and brands at the center Increasingly, the way we're thinking about that mission is through the lens of top category country combinations and driving those with high conviction. increasingly the way we're thinking about that mission is through the lens of top category country combinations and driving those with high conviction Absolutely, brands at the center. absolutely brands at the center The second thing I would say in terms of opportunity is the journey we're on omnichannel demand generation, which is a hugely compelling space to build a next generation of demand model for the company. the second thing i would say in terms of opportunity is the journey we're on omnichannel demand generation which is a hugely compelling space to build a next generation of demand model for the company The third piece I would sort of point out, and is under the capabilities, which is innovation, which a high conviction to step up the intensity of the innovation. the third piece i would sort of point out and is under the capabilities which is innovation which a high conviction to step up the intensity of the innovation In a period where we think probably macro, we're going to need to find ways to make volume and earn the pricing. in a period where we think probably macro we're going to need to find ways to make volume and earn the pricing That innovation quotient of the company, we think, is going to be really important. Probably on the same theme, it's going to be a pretty volatile environment. It's already a pretty volatile environment, and I think the international footprint of the company's going to be to the fore in that environment because we have people that are used to dealing with this kind of agility and that kind of experience at a company. Look, a terrific first 12 months. Much more to go and learn about the company, of course, but maybe some first impressions. That innovation quotient of the company, we think, is going to be really important. that innovation quotient of the company we think is going to be really important Probably on the same theme, it's going to be a pretty volatile environment. probably on the same theme it's going to be a pretty volatile environment It's already a pretty volatile environment, and I think the international footprint of the company's going to be to the fore in that environment because we have people that are used to dealing with this kind of agility and that kind of experience at a company. it's already a pretty volatile environment and i think the international footprint of the company's going to be to the fore in that environment because we have people that are used to dealing with this kind of agility and that kind of experience at a company Look, a terrific first 12 months. look a terrific first 12 months Much more to go and learn about the company, of course, but maybe some first impressions. much more to go and learn about the company of course but maybe some first impressions

Speaker 3: Yeah. I think from the outside, the capabilities journey, all of those things resonate, but the capabilities journey up to 2025 and then extended now out to 2030 has been pretty compelling. How does that translate into operating priorities for the Americas region? We'll get into differences between North and Latin America in a bit, just overall, how do you frame the key priorities for the region? Yeah. yeah I think from the outside, the capabilities journey, all of those things resonate, but the capabilities journey up to 2025 and then extended now out to 2030 has been pretty compelling. i think from the outside the capabilities journey all of those things resonate but the capabilities journey up to 2025 and then extended now out to 2030 has been pretty compelling How does that translate into operating priorities for the Americas region? how does that translate into operating priorities for the americas region We'll get into differences between North and Latin America in a bit, just overall, how do you frame the key priorities for the region? we'll get into differences between north and latin america in a bit just overall how do you frame the key priorities for the region

Speaker 2: Probably unsurprisingly, Steve, that 2030 strategy is a huge influence and trickle down onto the agenda from an operating point of view into Latin America and North America. I think if you think about the innovation agenda specifically, again, that starts with the brands. The way we're thinking about that, in both of the geographies, but I think across the company, is really firstly just core excellence. The superiority of the core brands, investing in those core brands, making sure those core brands are vibrant and healthy. Certainly innovation, and a stepped-up agenda. If you think about Latin America and you think about the innovation agenda through the lens of socioeconomic level and the pyramid. Probably unsurprisingly, Steve, that 2030 strategy is a huge influence and trickle down onto the agenda from an operating point of view into Latin America and North America. probably unsurprisingly steve that 2030 strategy is a huge influence and trickle down onto the agenda from an operating point of view into latin america and north america I think if you think about the innovation agenda specifically, again, that starts with the brands. i think if you think about the innovation agenda specifically again that starts with the brands The way we're thinking about that, in both of the geographies, but I think across the company, is really firstly just core excellence. the way we're thinking about that in both of the geographies but i think across the company is really firstly just core excellence The superiority of the core brands, investing in those core brands, making sure those core brands are vibrant and healthy. the superiority of the core brands investing in those core brands making sure those core brands are vibrant and healthy Certainly innovation, and a stepped-up agenda. certainly innovation and a stepped-up agenda If you think about Latin America and you think about the innovation agenda through the lens of socioeconomic level and the pyramid. if you think about latin america and you think about the innovation agenda through the lens of socioeconomic level and the pyramid Shaping the innovation agenda to deliver for all extremes in that pyramid, we think that's going to be really important. Increasingly, that's true in the U.S. The dynamic of a K-shaped economy we see as alive and well in the United States, and so thinking about the innovation agenda to serve all parts of that pyramid. For us in particular, I would say a huge opportunity around premiumization. That would be, I think, the innovation piece. I think on the omni-demand generation, this notion of a 21st century demand model of the company, I think, is relevant for all of our geographies, but at the center in North America, at the center in Latin America. Shaping the innovation agenda to deliver for all extremes in that pyramid, we think that's going to be really important. shaping the innovation agenda to deliver for all extremes in that pyramid we think that's going to be really important Increasingly, that's true in the U.S. increasingly that's true in the u.s The dynamic of a K-shaped economy we see as alive and well in the United States, and so thinking about the innovation agenda to serve all parts of that pyramid. the dynamic of a k-shaped economy we see as alive and well in the united states and so thinking about the innovation agenda to serve all parts of that pyramid For us in particular, I would say a huge opportunity around premiumization. for us in particular i would say a huge opportunity around premiumization That would be, I think, the innovation piece. that would be i think the innovation piece I think on the omni-demand generation, this notion of a 21st century demand model of the company, I think, is relevant for all of our geographies, but at the center in North America, at the center in Latin America. i think on the omni-demand generation this notion of a 21st century demand model of the company i think is relevant for all of our geographies but at the center in north america at the center in latin america I would describe that as. Figuring out ways for the company to win today. You think about the channel environments that we need to be competitive in. If you think about the U.S., for example, it's pretty clear. You've got to win in mass, you've got to win in club, and you've got to win in digital commerce. It provides a really clear roadmap. Also with an eye on the future, and you think about the capabilities that we're building around social commerce, agentic. That duality of kind of setting up the ODG model for this two-speed delivery. I would describe that as. Figuring out ways for the company to win today. i would describe that as. figuring out ways for the company to win today You think about the channel environments that we need to be competitive in. you think about the channel environments that we need to be competitive in If you think about the U.S., for example, it's pretty clear. if you think about the u.s for example it's pretty clear You've got to win in mass, you've got to win in club, and you've got to win in digital commerce. you've got to win in mass you've got to win in club and you've got to win in digital commerce It provides a really clear roadmap. it provides a really clear roadmap Also with an eye on the future, and you think about the capabilities that we're building around social commerce, agentic. also with an eye on the future and you think about the capabilities that we're building around social commerce agentic That duality of kind of setting up the ODG model for this two-speed delivery. that duality of kind of setting up the odg model for this two-speed delivery Revenue growth management, which I think if we buy the hypothesis that this next five years, we're going to need to find new ways for the industry to grow, our categories to grow, revenue growth management we think is going to be a really important tool. That I would describe as sort of the fundamentals of good pack price architecture, but also employing some of the next-generation tools we have in the business, like Promo AI, which is really allowing us to step up the precision and the frequency of price adjustments with our customers to be able to deliver better RGM outcomes. Net, Steve, highly relevant to North America and Latin America, as you would expect, with maybe some specific application which we're excited about. Revenue growth management, which I think if we buy the hypothesis that this next five years, we're going to need to find new ways for the industry to grow, our categories to grow, revenue growth management we think is going to be a really important tool. revenue growth management which i think if we buy the hypothesis that this next five years we're going to need to find new ways for the industry to grow our categories to grow revenue growth management we think is going to be a really important tool That I would describe as sort of the fundamentals of good pack price architecture, but also employing some of the next-generation tools we have in the business, like Promo AI, which is really allowing us to step up the precision and the frequency of price adjustments with our customers to be able to deliver better RGM outcomes. that i would describe as sort of the fundamentals of good pack price architecture but also employing some of the next-generation tools we have in the business like promo ai which is really allowing us to step up the precision and the frequency of price adjustments with our customers to be able to deliver better rgm outcomes Net, Steve, highly relevant to North America and Latin America, as you would expect, with maybe some specific application which we're excited about. net steve highly relevant to north america and latin america as you would expect with maybe some specific application which we're excited about

Speaker 3: Yeah. You're in a unique position because Latin America represents kind of the economic engine for Colgate, multi-decade strength, dominant market share in some key categories. North America, by contrast, is kind of the biggest opportunity for incremental improvement. Shane, how do you compare and contrast, and what are some of the strengths in Latin America that could be leveraged in North America or maybe vice versa? Yeah. yeah You're in a unique position because Latin America represents kind of the economic engine for Colgate, multi-decade strength, dominant market share in some key categories. you're in a unique position because latin america represents kind of the economic engine for colgate multi-decade strength dominant market share in some key categories North America, by contrast, is kind of the biggest opportunity for incremental improvement. north america by contrast is kind of the biggest opportunity for incremental improvement Shane, how do you compare and contrast, and what are some of the strengths in Latin America that could be leveraged in North America or maybe vice versa? shane how do you compare and contrast and what are some of the strengths in latin america that could be leveraged in north america or maybe vice versa

Speaker 2: Yeah, clearly, Steve, those businesses are in different start points. It's obvious from the results they are. We're crystal clear on that. Maybe to comment on Latin America first. If you just stand back from that business, sort of from a fundamentals point of view, and I've been spending a lot of time with our teams right across LATAM. The fundamentals of that business are just mightily impressive. Enormous brand strength, market-leading household penetration, incredible loyalty, just really a powerhouse brand led by the Colgate brand. Underpinning that is just real execution muscle, across a diverse set of channels, but just huge execution powerhouse in Latin America. Yeah, clearly, Steve, those businesses are in different start points. yeah clearly steve those businesses are in different start points It's obvious from the results they are. it's obvious from the results they are We're crystal clear on that. we're crystal clear on that Maybe to comment on Latin America first. maybe to comment on latin america first If you just stand back from that business, sort of from a fundamentals point of view, and I've been spending a lot of time with our teams right across LATAM. if you just stand back from that business sort of from a fundamentals point of view and i've been spending a lot of time with our teams right across latam The fundamentals of that business are just mightily impressive. the fundamentals of that business are just mightily impressive Enormous brand strength, market-leading household penetration, incredible loyalty, just really a powerhouse brand led by the Colgate brand. enormous brand strength market-leading household penetration incredible loyalty just really a powerhouse brand led by the colgate brand Underpinning that is just real execution muscle, across a diverse set of channels, but just huge execution powerhouse in Latin America. underpinning that is just real execution muscle across a diverse set of channels but just huge execution powerhouse in latin america Thirdly, people. Long-tenured, experienced, expert operators of our business in Latin America. Just fundamentally, that business is really sound and it shows in the results. The current environment, we see the categories, relatively healthy. Somewhat pricing-led, but still underlying volume growth. Positive market shares across most of the geographies. Total progressively recovering, but the team doing a very nice job in terms of premiumization with platforms like Optic, with good success with innovation like Purple. Fundamentally, we feel good about Latin America. The results are good, and we expect that to continue. North America, obviously a very different start point. Thirdly, people. thirdly people Long-tenured, experienced, expert operators of our business in Latin America. long-tenured experienced expert operators of our business in latin america Just fundamentally, that business is really sound and it shows in the results. just fundamentally that business is really sound and it shows in the results The current environment, we see the categories, relatively healthy. the current environment we see the categories relatively healthy Somewhat pricing-led, but still underlying volume growth. somewhat pricing-led but still underlying volume growth Positive market shares across most of the geographies. positive market shares across most of the geographies Total progressively recovering, but the team doing a very nice job in terms of premiumization with platforms like Optic, with good success with innovation like Purple. total progressively recovering but the team doing a very nice job in terms of premiumization with platforms like optic with good success with innovation like purple Fundamentally, we feel good about Latin America. fundamentally we feel good about latin america The results are good, and we expect that to continue. the results are good and we expect that to continue North America, obviously a very different start point. north america obviously a very different start point Noel mentioned now on a couple of conference calls that it's a real focus for us as a team. It's clearly a real focus for me and our North America group and our leadership team. Fundamentally, the mission there is to improve the organic sales growth. That's the number one mission that we are aiming for. To give you a sense of sort of the dynamics, if you roll back to February 2025, the categories themselves, I would describe as sort of moderate growth, but pretty consistent growth. We have seen in the first weeks of May some degradation in the categories. We have seen those categories markedly slow. Obviously we're watching that and preparing the business to respond to that dynamic. Noel mentioned now on a couple of conference calls that it's a real focus for us as a team. noel mentioned now on a couple of conference calls that it's a real focus for us as a team It's clearly a real focus for me and our North America group and our leadership team. it's clearly a real focus for me and our north america group and our leadership team Fundamentally, the mission there is to improve the organic sales growth. fundamentally the mission there is to improve the organic sales growth That's the number one mission that we are aiming for. that's the number one mission that we are aiming for To give you a sense of sort of the dynamics, if you roll back to February 2025, the categories themselves, I would describe as sort of moderate growth, but pretty consistent growth. to give you a sense of sort of the dynamics if you roll back to february 2025 the categories themselves i would describe as sort of moderate growth but pretty consistent growth We have seen in the first weeks of May some degradation in the categories. we have seen in the first weeks of may some degradation in the categories We have seen those categories markedly slow. we have seen those categories markedly slow Obviously we're watching that and preparing the business to respond to that dynamic. obviously we're watching that and preparing the business to respond to that dynamic To some extent, it's probably unsurprising given the state of the consumer and some of the obvious pressure on the consumer. There is a structural underlay of this K-shaped economy, which we see only sort of becoming more dynamic. From a market share position, we did cede some share on oral care in the first quarter. We've seen that somewhat stabilize. The path back on that is premiumization, premiumization. We started that journey. The relaunch of Optic was a very, very good first step. We see some initial positive response to that. To some extent, it's probably unsurprising given the state of the consumer and some of the obvious pressure on the consumer. to some extent it's probably unsurprising given the state of the consumer and some of the obvious pressure on the consumer There is a structural underlay of this K-shaped economy, which we see only sort of becoming more dynamic. there is a structural underlay of this k-shaped economy which we see only sort of becoming more dynamic From a market share position, we did cede some share on oral care in the first quarter. from a market share position we did cede some share on oral care in the first quarter We've seen that somewhat stabilize. we've seen that somewhat stabilize The path back on that is premiumization, premiumization. the path back on that is premiumization premiumization We started that journey. we started that journey The relaunch of Optic was a very, very good first step. the relaunch of optic was a very very good first step We see some initial positive response to that. we see some initial positive response to that We're also doing what I would describe as some surgical interventions on some pricing action where we see some promotional intensity starting to tick up. The categories have remained largely rational, but we have seen some slight uptick in activity, which we're dealing with. The other lever we've got in North America, more short-term, is our home care business in particular. Which has performed very, very well. Brands like Fabuloso, Suavitel, which we think can be big growth engines for the company. Obviously a lot of focus on that business. The categories underpinned by ODG and some step-up we can do in some channels. Underpinned by really rebuilding a much more assertive innovation pipeline, which we've made very, very good progress on. We're also doing what I would describe as some surgical interventions on some pricing action where we see some promotional intensity starting to tick up. we're also doing what i would describe as some surgical interventions on some pricing action where we see some promotional intensity starting to tick up The categories have remained largely rational, but we have seen some slight uptick in activity, which we're dealing with. the categories have remained largely rational but we have seen some slight uptick in activity which we're dealing with The other lever we've got in North America, more short-term, is our home care business in particular. the other lever we've got in north america more short-term is our home care business in particular Which has performed very, very well. which has performed very very well Brands like Fabuloso, Suavitel, which we think can be big growth engines for the company. brands like fabuloso suavitel which we think can be big growth engines for the company Obviously a lot of focus on that business. obviously a lot of focus on that business The categories underpinned by ODG and some step-up we can do in some channels. the categories underpinned by odg and some step-up we can do in some channels Underpinned by really rebuilding a much more assertive innovation pipeline, which we've made very, very good progress on. underpinned by really rebuilding a much more assertive innovation pipeline which we've made very very good progress on

Speaker 3: You're not the first to observe recent slowing in North America. I guess your perspective on how much of a concern is that? Do you see that more as, in your base case, a timing blip, and that we kind of resume still modest levels of category growth? Or do you see more risk that this is a real inflection to the downside? You're not the first to observe recent slowing in North America. you're not the first to observe recent slowing in north america I guess your perspective on how much of a concern is that? i guess your perspective on how much of a concern is that Do you see that more as, in your base case, a timing blip, and that we kind of resume still modest levels of category growth? do you see that more as in your base case a timing blip and that we kind of resume still modest levels of category growth Or do you see more risk that this is a real inflection to the downside? or do you see more risk that this is a real inflection to the downside

Speaker 2: Look, it's probably, honestly, Steve, too early to tell. We've seen some of this degradation occur really from the start of May, so it's take it for what it is, which is three weeks of data. We will see where the consumer settles. We're obviously preparing the business with a portfolio lens in mind, through the lens of how do we think about the business in terms of the right kind of stratification of the business. We want to be able to serve the lower end of the socioeconomic consumer base exceptionally well, and we have the tools for that with a platform like Cavity Protection, for example. We want to be able to serve equally the premium consumer. You think about the role of the brands like hello or Optic, we have the ability to serve both ends of that consumer spectrum. Look, it's probably, honestly, Steve, too early to tell. look it's probably honestly steve too early to tell We've seen some of this degradation occur really from the start of May, so it's take it for what it is, which is three weeks of data. we've seen some of this degradation occur really from the start of may so it's take it for what it is which is three weeks of data We will see where the consumer settles. We're obviously preparing the business with a portfolio lens in mind, through the lens of how do we think about the business in terms of the right kind of stratification of the business. we will see where the consumer settles. we're obviously preparing the business with a portfolio lens in mind through the lens of how do we think about the business in terms of the right kind of stratification of the business We want to be able to serve the lower end of the socioeconomic consumer base exceptionally well, and we have the tools for that with a platform like Cavity Protection, for example. we want to be able to serve the lower end of the socioeconomic consumer base exceptionally well and we have the tools for that with a platform like cavity protection for example We want to be able to serve equally the premium consumer. we want to be able to serve equally the premium consumer You think about the role of the brands like hello or Optic, we have the ability to serve both ends of that consumer spectrum. you think about the role of the brands like hello or optic we have the ability to serve both ends of that consumer spectrum Steve, those dynamics would be in the strategy anyway. It's just how we adapt those strategies for the moment as opposed to sort of wholesale shift in the business. Steve, those dynamics would be in the strategy anyway. steve those dynamics would be in the strategy anyway It's just how we adapt those strategies for the moment as opposed to sort of wholesale shift in the business. it's just how we adapt those strategies for the moment as opposed to sort of wholesale shift in the business

Speaker 3: Yeah. Noel has mentioned a strategic reset in the U.S., I think you've just touched upon components of that. Some of those components, innovation, RGM, are not really new. Is what's new just the elevated focus that North America's getting within the broader corporation? Is it we need to be tighter on execution? How would you define what's changing in North America? Yeah. yeah Noel has mentioned a strategic reset in the U.S., I think you've just touched upon components of that. noel has mentioned a strategic reset in the u.s i think you've just touched upon components of that Some of those components, innovation, RGM, are not really new. some of those components innovation rgm are not really new Is what's new just the elevated focus that North America's getting within the broader corporation? is what's new just the elevated focus that north america's getting within the broader corporation Is it we need to be tighter on execution? is it we need to be tighter on execution How would you define what's changing in North America? how would you define what's changing in north america

Speaker 2: Yeah. Look, firstly, Steve, I think, on the North America question, we have spent the last number of months, and Noel has referenced this on the calls, doing what I would describe as a deep diagnostic on the business. That is not a evaluation of the last quarter, it's really been an evaluation of the last decade. Obviously, when you take that sort of a view on the business, you can see some exceptionally good things. There are some really, really exceptional things in the chassis of the North America business that we think we can accelerate. There's clearly some things to fix. Yeah. yeah Look, firstly, Steve, I think, on the North America question, we have spent the last number of months, and Noel has referenced this on the calls, doing what I would describe as a deep diagnostic on the business. look firstly steve i think on the north america question we have spent the last number of months and noel has referenced this on the calls doing what i would describe as a deep diagnostic on the business That is not a evaluation of the last quarter, it's really been an evaluation of the last decade. that is not a evaluation of the last quarter it's really been an evaluation of the last decade Obviously, when you take that sort of a view on the business, you can see some exceptionally good things. obviously when you take that sort of a view on the business you can see some exceptionally good things There are some really, really exceptional things in the chassis of the North America business that we think we can accelerate. there are some really really exceptional things in the chassis of the north america business that we think we can accelerate There's clearly some things to fix. there's clearly some things to fix We've also looked at it through the lens of where do we think the consumer is going, where are the big revenue and profit pools in the market, where are the channel bets we want to make? It's a pretty comprehensive piece of work we've done. I think to answer your question, the go-forward plan has got all the components you would expect it to be to be an end-to-end plan, which is, it makes pretty clear choices across the portfolio of the brands that we think we can really scale and bet on. I would tell you, for example, in oral care, the opportunity we have for premiumizing the business is just enormous. We've also looked at it through the lens of where do we think the consumer is going, where are the big revenue and profit pools in the market, where are the channel bets we want to make? we've also looked at it through the lens of where do we think the consumer is going where are the big revenue and profit pools in the market where are the channel bets we want to make It's a pretty comprehensive piece of work we've done. it's a pretty comprehensive piece of work we've done I think to answer your question, the go-forward plan has got all the components you would expect it to be to be an end-to-end plan, which is, it makes pretty clear choices across the portfolio of the brands that we think we can really scale and bet on. i think to answer your question the go-forward plan has got all the components you would expect it to be to be an end-to-end plan which is it makes pretty clear choices across the portfolio of the brands that we think we can really scale and bet on I would tell you, for example, in oral care, the opportunity we have for premiumizing the business is just enormous. i would tell you for example in oral care the opportunity we have for premiumizing the business is just enormous Just enormous. Both in the emerging brand spaces, in whitening, and then whole new segments that we really have not penetrated today. I say we conclude that piece of work on oral care being really optimistic about the potential of the business, underpinned what is still today the most powerful brand in the category in terms of consumer relevance. Same logic on home care, where we have some businesses that we think have been probably under-leveraged with enormous potential on a go-forward basis. Same on personal care. We've done a pretty deep dive in the categories to look at what are the brands that we want to really prioritize and invest in and innovate on. Just enormous. just enormous Both in the emerging brand spaces, in whitening, and then whole new segments that we really have not penetrated today. both in the emerging brand spaces in whitening and then whole new segments that we really have not penetrated today I say we conclude that piece of work on oral care being really optimistic about the potential of the business, underpinned what is still today the most powerful brand in the category in terms of consumer relevance. i say we conclude that piece of work on oral care being really optimistic about the potential of the business underpinned what is still today the most powerful brand in the category in terms of consumer relevance Same logic on home care, where we have some businesses that we think have been probably under-leveraged with enormous potential on a go-forward basis. same logic on home care where we have some businesses that we think have been probably under-leveraged with enormous potential on a go-forward basis Same on personal care. same on personal care We've done a pretty deep dive in the categories to look at what are the brands that we want to really prioritize and invest in and innovate on. we've done a pretty deep dive in the categories to look at what are the brands that we want to really prioritize and invest in and innovate on On ODG, and the channel selection, again, a pretty clear picture. Some immediate channels that we need to win and upweight that we talked about, some channels that we need to prepare for for the future. On the innovation front, the team has done, I think, some excellent work to rebuild a pipeline of innovation at scale over the next three years. Obviously, it's going to take us a while to deploy that, and some of them are going to be tactical, and some of them are going to be very big scale in nature. We've thought about that challenge through multiple dimensions. We've thought about it through the lens of a constant renovation of the core. We've thought about it through the lens of new, wholly new big, bet innovations we can make. We've thought about it through the lens of retail environment-specific innovation. On ODG, and the channel selection, again, a pretty clear picture. on odg and the channel selection again a pretty clear picture Some immediate channels that we need to win and upweight that we talked about, some channels that we need to prepare for for the future. some immediate channels that we need to win and upweight that we talked about some channels that we need to prepare for for the future On the innovation front, the team has done, I think, some excellent work to rebuild a pipeline of innovation at scale over the next three years. on the innovation front the team has done i think some excellent work to rebuild a pipeline of innovation at scale over the next three years Obviously, it's going to take us a while to deploy that, and some of them are going to be tactical, and some of them are going to be very big scale in nature. obviously it's going to take us a while to deploy that and some of them are going to be tactical and some of them are going to be very big scale in nature We've thought about that challenge through multiple dimensions. we've thought about that challenge through multiple dimensions We've thought about it through the lens of a constant renovation of the core. we've thought about it through the lens of a constant renovation of the core We've thought about it through the lens of new, wholly new big, bet innovations we can make. we've thought about it through the lens of new wholly new big bet innovations we can make We've thought about it through the lens of retail environment-specific innovation. we've thought about it through the lens of retail environment-specific innovation All of that underpinned by capabilities that you mentioned, that we think we can take from the company level and apply much more assertively into the North America sell. The last thing I would say is that this sort of reevaluation of the business has given us an enormous opportunity to reengage our people. The power we've seen in being able to communicate with much more to come, here's the roadmap for the business, gives our teams a real opportunity to really buy into that roadmap and be part of that turnaround story. We've seen that enthusiasm build in spite of the current results. Look, long way to go, Steve, but we feel really good about the work we've done and a lot of execution ahead. All of that underpinned by capabilities that you mentioned, that we think we can take from the company level and apply much more assertively into the North America sell. all of that underpinned by capabilities that you mentioned that we think we can take from the company level and apply much more assertively into the north america sell The last thing I would say is that this sort of reevaluation of the business has given us an enormous opportunity to reengage our people. the last thing i would say is that this sort of reevaluation of the business has given us an enormous opportunity to reengage our people The power we've seen in being able to communicate with much more to come, here's the roadmap for the business, gives our teams a real opportunity to really buy into that roadmap and be part of that turnaround story. the power we've seen in being able to communicate with much more to come here's the roadmap for the business gives our teams a real opportunity to really buy into that roadmap and be part of that turnaround story We've seen that enthusiasm build in spite of the current results. we've seen that enthusiasm build in spite of the current results Look, long way to go, Steve, but we feel really good about the work we've done and a lot of execution ahead. look long way to go steve but we feel really good about the work we've done and a lot of execution ahead

Speaker 3: Great. One last question on North America, which is you spoke to innovation, premiumization, servicing the upper end of the K. At the same time, a lot of the center of gravity in Colgate's oral care franchise and definitely in home care and personal care is in the value area. Are there opportunities to lean into some of those brands and lean into value to service the more strained end of the K? Great. great One last question on North America, which is you spoke to innovation, premiumization, servicing the upper end of the K. one last question on north america which is you spoke to innovation premiumization servicing the upper end of the k At the same time, a lot of the center of gravity in Colgate's oral care franchise and definitely in home care and personal care is in the value area. at the same time a lot of the center of gravity in colgate's oral care franchise and definitely in home care and personal care is in the value area Are there opportunities to lean into some of those brands and lean into value to service the more strained end of the K? are there opportunities to lean into some of those brands and lean into value to service the more strained end of the k

Speaker 2: Absolutely, yes. We think about really the full revenue growth management playbook. As you said, we've got brand platforms that serve that bottom-end consumer exceptionally well today, and also for us, perform a very clear role in the business. If you take a platform like Cavity Protection, for example, really important business for us, serves a mid to lower socioeconomic consumer, plays an important volume role for us, and we will absolutely keep providing energy behind that. If you think about brands like Fabuloso and Suavitel, they sit slightly below the category average price point, really important platforms, and we can premiumize those brands. Absolutely, yes. absolutely yes We think about really the full revenue growth management playbook. we think about really the full revenue growth management playbook As you said, we've got brand platforms that serve that bottom-end consumer exceptionally well today, and also for us, perform a very clear role in the business. as you said we've got brand platforms that serve that bottom-end consumer exceptionally well today and also for us perform a very clear role in the business If you take a platform like Cavity Protection, for example, really important business for us, serves a mid to lower socioeconomic consumer, plays an important volume role for us, and we will absolutely keep providing energy behind that. if you take a platform like cavity protection for example really important business for us serves a mid to lower socioeconomic consumer plays an important volume role for us and we will absolutely keep providing energy behind that If you think about brands like Fabuloso and Suavitel, they sit slightly below the category average price point, really important platforms, and we can premiumize those brands. if you think about brands like fabuloso and suavitel they sit slightly below the category average price point really important platforms and we can premiumize those brands For us, it's very much an and as opposed to an or. We want to be able to service the full market, particularly in the context of this K-shaped economy. For us, it's very much an and as opposed to an or. for us it's very much an and as opposed to an or We want to be able to service the full market, particularly in the context of this K-shaped economy. we want to be able to service the full market particularly in the context of this k-shaped economy

Speaker 3: Okay. Which is something I think you've done well in Latin America. Pivoting kind of back to Latin America. You mentioned relatively resilient and broad-based performance thus far this year and for a while. As your attention focuses increasingly on North America, how do you maintain that consistency and that growth in Latin America, especially should macro conditions soften? Okay. okay Which is something I think you've done well in Latin America. which is something i think you've done well in latin america Pivoting kind of back to Latin America. pivoting kind of back to latin america You mentioned relatively resilient and broad-based performance thus far this year and for a while. you mentioned relatively resilient and broad-based performance thus far this year and for a while As your attention focuses increasingly on North America, how do you maintain that consistency and that growth in Latin America, especially should macro conditions soften? as your attention focuses increasingly on north america how do you maintain that consistency and that growth in latin america especially should macro conditions soften

Speaker 2: Yeah. I think continuing to extend the strength of that business that we talked about earlier. If you think about the foundation of that business, because the brands are strong, because we have this execution and go-to-market capability, the foundations for continued performance we think are just absolutely there. I do think that there will be continued efforts in that business, and we've seen very, very good progress already around the premiumization opportunity, even in Latin America. Yeah. yeah I think continuing to extend the strength of that business that we talked about earlier. i think continuing to extend the strength of that business that we talked about earlier If you think about the foundation of that business, because the brands are strong, because we have this execution and go-to-market capability, the foundations for continued performance we think are just absolutely there. if you think about the foundation of that business because the brands are strong because we have this execution and go-to-market capability the foundations for continued performance we think are just absolutely there I do think that there will be continued efforts in that business, and we've seen very, very good progress already around the premiumization opportunity, even in Latin America. i do think that there will be continued efforts in that business and we've seen very very good progress already around the premiumization opportunity even in latin america If you think about what the team has done on Luminous, for example, we've seen enormous pivot to more premium opportunities to continue to develop and grow the category. I also think that there is, and this is a longer-term item, where if you think about the structure of that business in Latin America, in some of our markets, we have a true multi-category play. In some of our markets, we are much more of an oral care-centric play. Obviously, we are thinking about what does the category shape look like across Latin America over the long term, but doing that very, very deliberately. Doing it with an eye on making sure the core businesses of today are healthy. Over time, we see certainly more expansion opportunity in Latin America. If you think about what the team has done on Luminous, for example, we've seen enormous pivot to more premium opportunities to continue to develop and grow the category. if you think about what the team has done on luminous for example we've seen enormous pivot to more premium opportunities to continue to develop and grow the category I also think that there is, and this is a longer-term item, where if you think about the structure of that business in Latin America, in some of our markets, we have a true multi-category play. i also think that there is and this is a longer-term item where if you think about the structure of that business in latin america in some of our markets we have a true multi-category play In some of our markets, we are much more of an oral care-centric play. in some of our markets we are much more of an oral care-centric play Obviously, we are thinking about what does the category shape look like across Latin America over the long term, but doing that very, very deliberately. obviously we are thinking about what does the category shape look like across latin america over the long term but doing that very very deliberately Doing it with an eye on making sure the core businesses of today are healthy. doing it with an eye on making sure the core businesses of today are healthy Over time, we see certainly more expansion opportunity in Latin America. over time we see certainly more expansion opportunity in latin america The last thing I would say in terms of any change in the market context in Latin America, if there is deterioration in the consumer context, one of the real strengths of our Latin America business, and again, back to the team, they have proven remarkable in being able to manage through different cycles. You talk to our team in Venezuela, or you talk to our team in Argentina, and they have largely seen it all. The ability of our teams to be able to manage through different market contexts, we have a lot of confidence in, and to some extent we think that business can be somewhat all-weather. I think continuing to drive the strengths of the business and a team that can adapt, we think, along the way. The last thing I would say in terms of any change in the market context in Latin America, if there is deterioration in the consumer context, one of the real strengths of our Latin America business, and again, back to the team, they have proven remarkable in being able to manage through different cycles. the last thing i would say in terms of any change in the market context in latin america if there is deterioration in the consumer context one of the real strengths of our latin america business and again back to the team they have proven remarkable in being able to manage through different cycles You talk to our team in Venezuela, or you talk to our team in Argentina, and they have largely seen it all. you talk to our team in venezuela or you talk to our team in argentina and they have largely seen it all The ability of our teams to be able to manage through different market contexts, we have a lot of confidence in, and to some extent we think that business can be somewhat all-weather. the ability of our teams to be able to manage through different market contexts we have a lot of confidence in and to some extent we think that business can be somewhat all-weather I think continuing to drive the strengths of the business and a team that can adapt, we think, along the way. i think continuing to drive the strengths of the business and a team that can adapt we think along the way

Speaker 3: Okay. Maybe John, you want to weigh in on this too, but I'm curious, Shane, if you think about leveraging best practices across the company, first off within your regions, even within subregions across categories, how does that work today? How evolved is that? Is that an opportunity? Then how do you engage with Panos' organization, and how do we share best practices and evolve the broader corporation across regions? Okay. okay Maybe John, you want to weigh in on this too, but I'm curious, Shane, if you think about leveraging best practices across the company, first off within your regions, even within subregions across categories, how does that work today? maybe john you want to weigh in on this too but i'm curious shane if you think about leveraging best practices across the company first off within your regions even within subregions across categories how does that work today How evolved is that? how evolved is that Is that an opportunity? is that an opportunity Then how do you engage with Panos' organization, and how do we share best practices and evolve the broader corporation across regions? then how do you engage with panos' organization and how do we share best practices and evolve the broader corporation across regions

Speaker 2: Yeah, for sure. Firstly, if you think about the capability journey of the company, the company's been on a capability journey where it has successfully scaled a number of big capabilities and done that globally. That capability build has been led from the center and driven right across the company. If you think about the journey on AI and data. If you think about the journey on revenue growth management, if you think about the innovation process that I know we've talked to you about before, those are globally scaled capabilities led from the center and truly global in nature. Yeah, for sure. yeah for sure Firstly, if you think about the capability journey of the company, the company's been on a capability journey where it has successfully scaled a number of big capabilities and done that globally. firstly if you think about the capability journey of the company the company's been on a capability journey where it has successfully scaled a number of big capabilities and done that globally That capability build has been led from the center and driven right across the company. that capability build has been led from the center and driven right across the company If you think about the journey on AI and data. if you think about the journey on ai and data If you think about the journey on revenue growth management, if you think about the innovation process that I know we've talked to you about before, those are globally scaled capabilities led from the center and truly global in nature. if you think about the journey on revenue growth management if you think about the innovation process that i know we've talked to you about before those are globally scaled capabilities led from the center and truly global in nature It's also true that we have some centers of expertise that have naturally emerged in the business. If you think about the Hill's business, for example, highly developed capability on the use of data, on the use of the profession, and what I think we could describe as a precision marketing model. If you think about Latin America, the execution power and the customer expertise is clear. If you even take North America, for example, Total was born in North America. Optic was born in North America. We have proven in that geography that we can build big global franchises. If you think about Asia, for example, I would say from our perspective, probably the leader in omni-demand generation and thinking about advocacy at scale and social-first marketing. It's also true that we have some centers of expertise that have naturally emerged in the business. it's also true that we have some centers of expertise that have naturally emerged in the business If you think about the Hill's business, for example, highly developed capability on the use of data, on the use of the profession, and what I think we could describe as a precision marketing model. if you think about the hill's business for example highly developed capability on the use of data on the use of the profession and what i think we could describe as a precision marketing model If you think about Latin America, the execution power and the customer expertise is clear. if you think about latin america the execution power and the customer expertise is clear If you even take North America, for example, Total was born in North America. if you even take north america for example total was born in north america Optic was born in North America. optic was born in north america We have proven in that geography that we can build big global franchises. we have proven in that geography that we can build big global franchises If you think about Asia, for example, I would say from our perspective, probably the leader in omni-demand generation and thinking about advocacy at scale and social-first marketing. if you think about asia for example i would say from our perspective probably the leader in omni-demand generation and thinking about advocacy at scale and social-first marketing The question on scale is, some of it is structural. Our global teams are clearly charged with driving best-in-class execution across the company, taking good ideas and scaling them fast. Purple's a probably good example of that, born in China and now in every geography in the world and driving very impressive growth. It also happens organically, and it happens organically in my experience because of the culture we have, which is Colgate is a highly networked company. I say that in the best possible way, which is we have team members that have been at the company a long time, have deep relationships, and want each other to be successful. Therefore, good news travels fast, and therefore we get more scale. The question on scale is, some of it is structural. the question on scale is some of it is structural Our global teams are clearly charged with driving best-in-class execution across the company, taking good ideas and scaling them fast. our global teams are clearly charged with driving best-in-class execution across the company taking good ideas and scaling them fast Purple's a probably good example of that, born in China and now in every geography in the world and driving very impressive growth. purple's a probably good example of that born in china and now in every geography in the world and driving very impressive growth It also happens organically, and it happens organically in my experience because of the culture we have, which is Colgate is a highly networked company. it also happens organically and it happens organically in my experience because of the culture we have which is colgate is a highly networked company I say that in the best possible way, which is we have team members that have been at the company a long time, have deep relationships, and want each other to be successful. i say that in the best possible way which is we have team members that have been at the company a long time have deep relationships and want each other to be successful Therefore, good news travels fast, and therefore we get more scale. therefore good news travels fast and therefore we get more scale Maybe one last piece on that. One of the, I think, really interesting dynamics we're seeing in the business today, which is the one application of AI in the company, it's giving us an ability to lift and shift good programming faster. Particularly in marketing communications, because it's giving us some common backbones that we can then iterate and scale geographically much, much faster. Look, I think a combination of some structural items, some center-led items, and then a bit in the culture, Steve, which is allowing us to scale, I think, good ideas quickly. Maybe one last piece on that. maybe one last piece on that One of the, I think, really interesting dynamics we're seeing in the business today, which is the one application of AI in the company, it's giving us an ability to lift and shift good programming faster. one of the i think really interesting dynamics we're seeing in the business today which is the one application of ai in the company it's giving us an ability to lift and shift good programming faster Particularly in marketing communications, because it's giving us some common backbones that we can then iterate and scale geographically much, much faster. particularly in marketing communications because it's giving us some common backbones that we can then iterate and scale geographically much much faster Look, I think a combination of some structural items, some center-led items, and then a bit in the culture, Steve, which is allowing us to scale, I think, good ideas quickly. look i think a combination of some structural items some center-led items and then a bit in the culture steve which is allowing us to scale i think good ideas quickly

Speaker 3: Great. Great. great

Speaker 1: If I can just add one example to that. Shane talked about China and social, right? If you think about as social spreads across the rest of the globe, historically, big CPG companies would be behind in something like that, as you think about the rise of social commerce. If we can send our marketing teams, which we have, and the entire senior team over to Shanghai to see how our China team puts out hundreds, if not thousands, of pieces of content to adjust to this new social model, understands how you build brands versus simply selling products in this social commerce model. If I can just add one example to that. if i can just add one example to that Shane talked about China and social, right? shane talked about china and social right If you think about as social spreads across the rest of the globe, historically, big CPG companies would be behind in something like that, as you think about the rise of social commerce. if you think about as social spreads across the rest of the globe historically big cpg companies would be behind in something like that as you think about the rise of social commerce If we can send our marketing teams, which we have, and the entire senior team over to Shanghai to see how our China team puts out hundreds, if not thousands, of pieces of content to adjust to this new social model, understands how you build brands versus simply selling products in this social commerce model. if we can send our marketing teams which we have and the entire senior team over to shanghai to see how our china team puts out hundreds if not thousands of pieces of content to adjust to this new social model understands how you build brands versus simply selling products in this social commerce model We have great examples internally that our teams around the globe, whether it's in Europe or the U.S. or Latin America or Africa, they can take those examples and actually come out ahead of the curve as we see that social commerce business expand around the world so that we're not operating behind some of these insurgent brands, which has historically been where CPG companies have found themselves. We have great examples internally that our teams around the globe, whether it's in Europe or the U.S. or Latin America or Africa, they can take those examples and actually come out ahead of the curve as we see that social commerce business expand around the world so that we're not operating behind some of these insurgent brands, which has historically been where CPG companies have found themselves. we have great examples internally that our teams around the globe whether it's in europe or the u.s or latin america or africa they can take those examples and actually come out ahead of the curve as we see that social commerce business expand around the world so that we're not operating behind some of these insurgent brands which has historically been where cpg companies have found themselves

Speaker 3: Exactly. Yeah. Okay, great. All right, John, now that we've got you talking. Let's get you talking about the rest of the world. In the context of the here and now, talked about some pressure we're working through in North America, relative resiliency in Latin America. As we look around the other regions of the world, here in Europe, Asia Pac, et cetera, what are you seeing and how concerned are we about direct and indirect impact of energy shortages? Exactly. exactly Yeah. yeah Okay, great. okay great All right, John, now that we've got you talking. all right john now that we've got you talking Let's get you talking about the rest of the world. let's get you talking about the rest of the world In the context of the here and now, talked about some pressure we're working through in North America, relative resiliency in Latin America. in the context of the here and now talked about some pressure we're working through in north america relative resiliency in latin america As we look around the other regions of the world, here in Europe, Asia Pac, et cetera, what are you seeing and how concerned are we about direct and indirect impact of energy shortages? as we look around the other regions of the world here in europe asia pac et cetera what are you seeing and how concerned are we about direct and indirect impact of energy shortages

Speaker 1: I think, if we had all sat here on March 1st and talked about where we thought the consumer would be on June 1st with the continuation of everything that's happened in the Middle East, I think we would've come up with a more negative situation than where we're sitting right now, where we would say that the consumer has generally held up very well around the world. I think we have seen less of the type of weakness, even in the U.S., I think we've seen less of the type of weakness potentially than we could have. I think that's encouraging. There have been a lot of concerns about the European consumer, about the Southeast Asian consumer, and in general, we have seen less of that indirect impact. I think, if we had all sat here on March 1st and talked about where we thought the consumer would be on June 1st with the continuation of everything that's happened in the Middle East, I think we would've come up with a more negative situation than where we're sitting right now, where we would say that the consumer has generally held up very well around the world. i think if we had all sat here on march 1st and talked about where we thought the consumer would be on june 1st with the continuation of everything that's happened in the middle east i think we would've come up with a more negative situation than where we're sitting right now where we would say that the consumer has generally held up very well around the world I think we have seen less of the type of weakness, even in the U.S., I think we've seen less of the type of weakness potentially than we could have. i think we have seen less of the type of weakness even in the u.s i think we've seen less of the type of weakness potentially than we could have I think that's encouraging. i think that's encouraging There have been a lot of concerns about the European consumer, about the Southeast Asian consumer, and in general, we have seen less of that indirect impact. there have been a lot of concerns about the european consumer about the southeast asian consumer and in general we have seen less of that indirect impact I think consumer sentiment is still a little bit soft where we'd like it to be, but better than it potentially could have been. In terms of direct impact from the conflict, very modest. We have, I would say, a smaller than average Middle East business, partially because we just have such a geographically diverse portfolio. I think we're seeing less direct impact. The consumer is generally, I think, holding in pretty well. If you look across our businesses, Shane talked about North America and Latin America, Europe, I think we've been pleasantly surprised by how the consumer has held in. Whether that's Western Europe, Southern Europe, Northern Europe. Still Europe for us is a little bit of volume, a little bit of price, and that's been sort of our consistent focus. Africa, Eurasia, which has now merged into the EMEA division. I think consumer sentiment is still a little bit soft where we'd like it to be, but better than it potentially could have been. i think consumer sentiment is still a little bit soft where we'd like it to be but better than it potentially could have been In terms of direct impact from the conflict, very modest. in terms of direct impact from the conflict very modest We have, I would say, a smaller than average Middle East business, partially because we just have such a geographically diverse portfolio. we have i would say a smaller than average middle east business partially because we just have such a geographically diverse portfolio I think we're seeing less direct impact. i think we're seeing less direct impact The consumer is generally, I think, holding in pretty well. the consumer is generally i think holding in pretty well If you look across our businesses, Shane talked about North America and Latin America, Europe, I think we've been pleasantly surprised by how the consumer has held in. if you look across our businesses shane talked about north america and latin america europe i think we've been pleasantly surprised by how the consumer has held in Whether that's Western Europe, Southern Europe, Northern Europe. whether that's western europe southern europe northern europe Still Europe for us is a little bit of volume, a little bit of price, and that's been sort of our consistent focus. still europe for us is a little bit of volume a little bit of price and that's been sort of our consistent focus Africa, Eurasia, which has now merged into the EMEA division. africa eurasia which has now merged into the emea division We're still getting some FX related pricing, which is encouragement. We've had a nice volume bounce back. Asia, where we had been struggling a little bit from a performance standpoint, we've seen generally the consumer hold in pretty well. We've got big markets like the Philippines where there had been some concern from investors about how is the consumer going to hold in. We think that business has done very well. China and India, which had been more difficult for us, India bounced back, had a great first quarter. We've seen the H&H business improve sequentially. We're getting more of the fundamentals right there. Some easy comparisons. Still some work to do going forward, but in general, we've seen that part of the portfolio hold up well. We're still getting some FX related pricing, which is encouragement. we're still getting some fx related pricing which is encouragement We've had a nice volume bounce back. we've had a nice volume bounce back Asia, where we had been struggling a little bit from a performance standpoint, we've seen generally the consumer hold in pretty well. asia where we had been struggling a little bit from a performance standpoint we've seen generally the consumer hold in pretty well We've got big markets like the Philippines where there had been some concern from investors about how is the consumer going to hold in. we've got big markets like the philippines where there had been some concern from investors about how is the consumer going to hold in We think that business has done very well. we think that business has done very well China and India, which had been more difficult for us, India bounced back, had a great first quarter. china and india which had been more difficult for us india bounced back had a great first quarter We've seen the H&H business improve sequentially. we've seen the h&h business improve sequentially We're getting more of the fundamentals right there. we're getting more of the fundamentals right there Some easy comparisons. some easy comparisons Still some work to do going forward, but in general, we've seen that part of the portfolio hold up well. still some work to do going forward but in general we've seen that part of the portfolio hold up well

Speaker 3: Have you seen any smaller competitors get impacted by supply shortages? Is there a market share opportunity out of this, or is it more category resiliency? Have you seen any smaller competitors get impacted by supply shortages? have you seen any smaller competitors get impacted by supply shortages Is there a market share opportunity out of this, or is it more category resiliency? is there a market share opportunity out of this or is it more category resiliency

Speaker 1: We have not directly seen that happen. I think there is an advantage to being a scale player in the world when uncertainty comes in. Your ability to go out and make the right decisions quickly, your ability to secure supply, your ability to look out six, nine months and get the supply you need in order to keep your supply chain running. We have not been hearing of major supply shortages for smaller competitors. We think if we're gaining share, it's because we've got great innovation, increased marketing support, we're moving to this omnichannel demand generation that Shane talked about. Winning on the ground in a difficult environment, as Shane talked about with Venezuela and Argentina, that's what we do best as an organization. We have not directly seen that happen. we have not directly seen that happen I think there is an advantage to being a scale player in the world when uncertainty comes in. i think there is an advantage to being a scale player in the world when uncertainty comes in Your ability to go out and make the right decisions quickly, your ability to secure supply, your ability to look out six, nine months and get the supply you need in order to keep your supply chain running. your ability to go out and make the right decisions quickly your ability to secure supply your ability to look out six nine months and get the supply you need in order to keep your supply chain running We have not been hearing of major supply shortages for smaller competitors. we have not been hearing of major supply shortages for smaller competitors We think if we're gaining share, it's because we've got great innovation, increased marketing support, we're moving to this omnichannel demand generation that Shane talked about. we think if we're gaining share it's because we've got great innovation increased marketing support we're moving to this omnichannel demand generation that shane talked about Winning on the ground in a difficult environment, as Shane talked about with Venezuela and Argentina, that's what we do best as an organization. winning on the ground in a difficult environment as shane talked about with venezuela and argentina that's what we do best as an organization

Speaker 3: Okay. Good. Hill's Pet Nutrition. There's been mixed signals, mixed commentary on the relative health and resilience of the category. Maybe a bit on what you've seen categorically and then how the Hill's business is positioned against that or aside from that. Okay. okay Good. good Hill's Pet Nutrition. hill's pet nutrition There's been mixed signals, mixed commentary on the relative health and resilience of the category. there's been mixed signals mixed commentary on the relative health and resilience of the category Maybe a bit on what you've seen categorically and then how the Hill's business is positioned against that or aside from that. maybe a bit on what you've seen categorically and then how the hill's business is positioned against that or aside from that

Speaker 1: Sure. I think we've been remarkably consistent from a category standpoint with pet food over the last 18 months or so, which is we think the category is generally flattish. What we are expecting as a company is to outperform by several hundred basis points versus the category, given the strategic decisions that we've made over the last several years, really the last five or six years. I know there was another pet nutrition company that talked about small dogs, cats, what have you. We have made significant investments over the last five or six years to focus on those under-tapped segments where we under-index. We've always had a strength in dry dog food and bigger dogs. We built our Pet Nutrition Center. We built a Small Paws facility to focus on the nutritional needs of small dogs. Sure. sure I think we've been remarkably consistent from a category standpoint with pet food over the last 18 months or so, which is we think the category is generally flattish. i think we've been remarkably consistent from a category standpoint with pet food over the last 18 months or so which is we think the category is generally flattish What we are expecting as a company is to outperform by several hundred basis points versus the category, given the strategic decisions that we've made over the last several years, really the last five or six years. what we are expecting as a company is to outperform by several hundred basis points versus the category given the strategic decisions that we've made over the last several years really the last five or six years I know there was another pet nutrition company that talked about small dogs, cats, what have you. i know there was another pet nutrition company that talked about small dogs cats what have you We have made significant investments over the last five or six years to focus on those under-tapped segments where we under-index. we have made significant investments over the last five or six years to focus on those under-tapped segments where we under-index We've always had a strength in dry dog food and bigger dogs. we've always had a strength in dry dog food and bigger dogs We built our Pet Nutrition Center. we built our pet nutrition center We built a Small Paws facility to focus on the nutritional needs of small dogs. we built a small paws facility to focus on the nutritional needs of small dogs We opened that about four years ago. That drives a lot of the innovation that we're seeing in the Small Paws, which is the fastest growing segment of the dog category. We've also made a commensurate investment in cat, where we were under-shared in cat. Really what helps both of those, actually, is the increased focus on the wet side of the category. We opened our Tonganoxie facility about three years ago. We needed more innovation, more capacity coming in wet, both in terms of different forms, in terms of stews and mousses and things like that, as well as different packaging, tins, pouches, et cetera. That's given us tremendous power to innovate. It's the strategic focus on those under-tapped segments, Small Paws and cat. The capabilities really scaling the benefits of those capacity additions on the wet side as well. We opened that about four years ago. we opened that about four years ago That drives a lot of the innovation that we're seeing in the Small Paws, which is the fastest growing segment of the dog category. that drives a lot of the innovation that we're seeing in the small paws which is the fastest growing segment of the dog category We've also made a commensurate investment in cat, where we were under-shared in cat. we've also made a commensurate investment in cat where we were under-shared in cat Really what helps both of those, actually, is the increased focus on the wet side of the category. really what helps both of those actually is the increased focus on the wet side of the category We opened our Tonganoxie facility about three years ago. we opened our tonganoxie facility about three years ago We needed more innovation, more capacity coming in wet, both in terms of different forms, in terms of stews and mousses and things like that, as well as different packaging, tins, pouches, et cetera. we needed more innovation more capacity coming in wet both in terms of different forms in terms of stews and mousses and things like that as well as different packaging tins pouches et cetera That's given us tremendous power to innovate. that's given us tremendous power to innovate It's the strategic focus on those under-tapped segments, Small Paws and cat. it's the strategic focus on those under-tapped segments small paws and cat The capabilities really scaling the benefits of those capacity additions on the wet side as well. the capabilities really scaling the benefits of those capacity additions on the wet side as well

Speaker 3: Yeah. Hill's is generally servicing the less stressed consumer in the U.S. Yeah. yeah Hill's is generally servicing the less stressed consumer in the U.S. hill's is generally servicing the less stressed consumer in the u.s

Speaker 1: Yes. There's no question that where we're seeing that stress is big bags of dog food, big bags of dry food have gone up in price over the time. We think we're seeing a little bit of an impact there on the business. What we've also done is, as part of this strategic shift over the last couple of years, we've really increased the focus on the therapeutic side. That's Prescription Diet, where we have a real opportunity to build the category. Yes. yes There's no question that where we're seeing that stress is big bags of dog food, big bags of dry food have gone up in price over the time. there's no question that where we're seeing that stress is big bags of dog food big bags of dry food have gone up in price over the time We think we're seeing a little bit of an impact there on the business. we think we're seeing a little bit of an impact there on the business What we've also done is, as part of this strategic shift over the last couple of years, we've really increased the focus on the therapeutic side. what we've also done is as part of this strategic shift over the last couple of years we've really increased the focus on the therapeutic side That's Prescription Diet, where we have a real opportunity to build the category. that's prescription diet where we have a real opportunity to build the category That's a lot like what's worked for us so well on the therapeutic side in oral care in Europe, for example, where we've gone into the vets and we've said to them, "When a pet parent comes in and their dog has, to speak politely, gastrointestinal problems, a better option than antibiotics would be Hill's Gastrointestinal Biome," which is a product that can help stop those problems within 24 hours. We have seen really nice growth on the therapeutic side, which again is really where the hardcore science comes to play for Hill's. We feel good about both sides of the business, but Prescription Diet, even higher price points, attractive margins, that's really been going strongly for us. That's a lot like what's worked for us so well on the therapeutic side in oral care in Europe, for example, where we've gone into the vets and we've said to them, "When a pet parent comes in and their dog has, to speak politely, gastrointestinal problems, a better option than antibiotics would be Hill's Gastrointestinal Biome," which is a product that can help stop those problems within 24 hours. that's a lot like what's worked for us so well on the therapeutic side in oral care in europe for example where we've gone into the vets and we've said to them "when a pet parent comes in and their dog has to speak politely gastrointestinal problems a better option than antibiotics would be hill's gastrointestinal biome," which is a product that can help stop those problems within 24 hours We have seen really nice growth on the therapeutic side, which again is really where the hardcore science comes to play for Hill's. we have seen really nice growth on the therapeutic side which again is really where the hardcore science comes to play for hill's We feel good about both sides of the business, but Prescription Diet, even higher price points, attractive margins, that's really been going strongly for us. we feel good about both sides of the business but prescription diet even higher price points attractive margins that's really been going strongly for us

Speaker 3: Okay, great. Let's talk about the environment in terms of its impact on the cost side of things, raw materials, logistics, et cetera. Obviously, those pressures are going up. You spent a long time trying to build flex in the P&Ls. Now you have that flex in the P&L. I guess the question is, how much flex in the P&L is there, and how does the Strategic Growth and Productivity Program fit into that mitigation strategy? Okay, great. okay great Let's talk about the environment in terms of its impact on the cost side of things, raw materials, logistics, et cetera. let's talk about the environment in terms of its impact on the cost side of things raw materials logistics et cetera Obviously, those pressures are going up. obviously those pressures are going up You spent a long time trying to build flex in the P&Ls. you spent a long time trying to build flex in the p&ls Now you have that flex in the P&L. now you have that flex in the p&l I guess the question is, how much flex in the P&L is there, and how does the Strategic Growth and Productivity Program fit into that mitigation strategy? i guess the question is how much flex in the p&l is there and how does the strategic growth and productivity program fit into that mitigation strategy

Speaker 1: Sure. I'll start off on that, and then Shane, I think, can probably give you some ideas in terms of how that really all plays out in the businesses. If you're building flexibility in the P&L the right way, you're not using it all up in one shot, and that's been a real focus for us. What it really starts with is our aspiration to deliver consistent, compounded dollar-based earnings per share growth. Right? How stocks work, you sustain the P/E multiple, you expand the P/E multiple through organic sales growth. You deliver very competitive dollar-based EPS growth. Hopefully, you can deliver TSR that compares favorably versus your peers, and that's what we're focused on. Sure. sure I'll start off on that, and then Shane, I think, can probably give you some ideas in terms of how that really all plays out in the businesses. i'll start off on that and then shane i think can probably give you some ideas in terms of how that really all plays out in the businesses If you're building flexibility in the P&L the right way, you're not using it all up in one shot, and that's been a real focus for us. if you're building flexibility in the p&l the right way you're not using it all up in one shot and that's been a real focus for us What it really starts with is our aspiration to deliver consistent, compounded dollar-based earnings per share growth. what it really starts with is our aspiration to deliver consistent compounded dollar-based earnings per share growth Right? right How stocks work, you sustain the P/E multiple, you expand the P/E multiple through organic sales growth. how stocks work you sustain the p/e multiple you expand the p/e multiple through organic sales growth You deliver very competitive dollar-based EPS growth. you deliver very competitive dollar-based eps growth Hopefully, you can deliver TSR that compares favorably versus your peers, and that's what we're focused on. hopefully you can deliver tsr that compares favorably versus your peers and that's what we're focused on We have really focused on building that flexibility in the P&L over the last six, seven years as we executed 2025 and transition to 2030, so that even in a tough year like 2025, we can go out and deliver dollar-based EPS growth. We had negative FX, we had category slowdown, we had increased raw material costs, we had additional tariffs, and we were able to get through that in a way and deliver dollar-based EPS growth that 10 years ago, we might not have had the flexibility to do that. We continue to build up that flexibility in the P&L. The key for us in a situation like this with the higher costs is to get them out into the businesses. Right. We want to say, Here's what we think price of oil is going to be. Here's what the impact on our business. That way, you all can model it, but more importantly, Shane can work with his divisions to model all those costs. We have really focused on building that flexibility in the P&L over the last six, seven years as we executed 2025 and transition to 2030, so that even in a tough year like 2025, we can go out and deliver dollar-based EPS growth. we have really focused on building that flexibility in the p&l over the last six seven years as we executed 2025 and transition to 2030 so that even in a tough year like 2025 we can go out and deliver dollar-based eps growth We had negative FX, we had category slowdown, we had increased raw material costs, we had additional tariffs, and we were able to get through that in a way and deliver dollar-based EPS growth that 10 years ago, we might not have had the flexibility to do that. we had negative fx we had category slowdown we had increased raw material costs we had additional tariffs and we were able to get through that in a way and deliver dollar-based eps growth that 10 years ago we might not have had the flexibility to do that We continue to build up that flexibility in the P&L. we continue to build up that flexibility in the p&l The key for us in a situation like this with the higher costs is to get them out into the businesses. the key for us in a situation like this with the higher costs is to get them out into the businesses Right. right We want to say, Here's what we think price of oil is going to be. we want to say here's what we think price of oil is going to be Here's what the impact on our business. here's what the impact on our business That way, you all can model it, but more importantly, Shane can work with his divisions to model all those costs. that way you all can model it but more importantly shane can work with his divisions to model all those costs That's what we did in 2022, which is where we were really the first company in the space to come out and say, "Look, this is going to be worse than you think it is." It creates a situation where, yes, you're providing the news earlier, but you get visibility in the numbers faster, which we think plays out well over the medium to longer term. Do you want to talk about how you work with the businesses? That's what we did in 2022, which is where we were really the first company in the space to come out and say, "Look, this is going to be worse than you think it is." It creates a situation where, yes, you're providing the news earlier, but you get visibility in the numbers faster, which we think plays out well over the medium to longer term. that's what we did in 2022 which is where we were really the first company in the space to come out and say "look this is going to be worse than you think it is." it creates a situation where yes you're providing the news earlier but you get visibility in the numbers faster which we think plays out well over the medium to longer term Do you want to talk about how you work with the businesses? do you want to talk about how you work with the businesses

Speaker 2: Yeah. I think, Steve, to sort of extend John's point, we obviously got out quite early, we think publicly, but we got out, as importantly, quite early inside the business. There's enormous power from an operational point of view of getting those cost realities in the P&L and in the system fast, which we did. Then it allowed our teams on the ground, be it in Europe, be it Latin America, be it in the U.S., to respond and prepare. The way the teams are responding, obviously, is different by market. Obviously, the commonality is productivity, productivity as the first port of call, and really maximizing everything in the productivity pipeline as the first action. Then the pricing action is much more segmented based on geography. Yeah. yeah I think, Steve, to sort of extend John's point, we obviously got out quite early, we think publicly, but we got out, as importantly, quite early inside the business. i think steve to sort of extend john's point we obviously got out quite early we think publicly but we got out as importantly quite early inside the business There's enormous power from an operational point of view of getting those cost realities in the P&L and in the system fast, which we did. there's enormous power from an operational point of view of getting those cost realities in the p&l and in the system fast which we did Then it allowed our teams on the ground, be it in Europe, be it Latin America, be it in the U.S., to respond and prepare. then it allowed our teams on the ground be it in europe be it latin america be it in the u.s to respond and prepare The way the teams are responding, obviously, is different by market. the way the teams are responding obviously is different by market Obviously, the commonality is productivity, productivity as the first port of call, and really maximizing everything in the productivity pipeline as the first action. obviously the commonality is productivity productivity as the first port of call and really maximizing everything in the productivity pipeline as the first action Then the pricing action is much more segmented based on geography. then the pricing action is much more segmented based on geography Obviously, in Europe, it's much more of a hand-to-hand combat situation and it's much more careful. In the U.S., we're probably going to be much, much more considered in terms of any further pricing action. We think much more it's a mix play and revenue growth management tool play as opposed to headline pricing, given the state of the consumer. In markets across Latin America, we may have some opportunities where we can drive some more premiumization and pricing. I think the mechanics inside the business, as John set up, are very, very positive for us to be able to respond at the right kind of pace and with good visibility. Obviously, in Europe, it's much more of a hand-to-hand combat situation and it's much more careful. obviously in europe it's much more of a hand-to-hand combat situation and it's much more careful In the U.S., we're probably going to be much, much more considered in terms of any further pricing action. in the u.s we're probably going to be much much more considered in terms of any further pricing action We think much more it's a mix play and revenue growth management tool play as opposed to headline pricing, given the state of the consumer. we think much more it's a mix play and revenue growth management tool play as opposed to headline pricing given the state of the consumer In markets across Latin America, we may have some opportunities where we can drive some more premiumization and pricing. in markets across latin america we may have some opportunities where we can drive some more premiumization and pricing I think the mechanics inside the business, as John set up, are very, very positive for us to be able to respond at the right kind of pace and with good visibility. i think the mechanics inside the business as john set up are very very positive for us to be able to respond at the right kind of pace and with good visibility

Speaker 1: If I can just follow up, I'll finish up on the SGPP piece. If I can just follow up, I'll finish up on the SGPP piece. if i can just follow up i'll finish up on the sgpp piece

Speaker 3: Yeah, sure. Yeah, sure. yeah sure

Speaker 1: The way you build that financial flexibility is you're investing in capabilities. If you can invest ahead of the curve, you do that so you have flexibility year to year on some of the spending. The other thing is you notice, okay, are we entering a period in the 2030 strategy where we want to build new capabilities like ODG, where we know that maybe categories aren't going to be growing at the same rate. That's why you announce something like SGPP last year, build up the fundamentals, go through, figure out what the program's going to deliver, and then that gives you the opportunity to say, "Okay, we're keeping the range of EPS guidance for 2026 despite some fluctuation in the gross margin." That we went from guidance of gross margin up to gross margin down. The way you build that financial flexibility is you're investing in capabilities. the way you build that financial flexibility is you're investing in capabilities If you can invest ahead of the curve, you do that so you have flexibility year to year on some of the spending. if you can invest ahead of the curve you do that so you have flexibility year to year on some of the spending The other thing is you notice, okay, are we entering a period in the 2030 strategy where we want to build new capabilities like ODG, where we know that maybe categories aren't going to be growing at the same rate. the other thing is you notice okay are we entering a period in the 2030 strategy where we want to build new capabilities like odg where we know that maybe categories aren't going to be growing at the same rate That's why you announce something like SGPP last year, build up the fundamentals, go through, figure out what the program's going to deliver, and then that gives you the opportunity to say, "Okay, we're keeping the range of EPS guidance for 2026 despite some fluctuation in the gross margin." That we went from guidance of gross margin up to gross margin down. that's why you announce something like sgpp last year build up the fundamentals go through figure out what the program's going to deliver and then that gives you the opportunity to say "okay we're keeping the range of eps guidance for 2026 despite some fluctuation in the gross margin." that we went from guidance of gross margin up to gross margin down We kept the range. We did see some numbers come down at the high end of the range. The shape of the P&L changes somewhat. Having that flexibility by focusing on the productivity ahead of time. That's what gives you the flexibility. Shane can go in and say, "Look, advertising cut's not on the table. We need to keep that brand support going." You know, investing in AI, not on the table. That's the posture you want to have when you get this level of volatility. We kept the range. we kept the range We did see some numbers come down at the high end of the range. we did see some numbers come down at the high end of the range The shape of the P&L changes somewhat. the shape of the p&l changes somewhat Having that flexibility by focusing on the productivity ahead of time. having that flexibility by focusing on the productivity ahead of time That's what gives you the flexibility. that's what gives you the flexibility Shane can go in and say, "Look, advertising cut's not on the table. shane can go in and say "look advertising cut's not on the table We need to keep that brand support going." You know, investing in AI, not on the table. we need to keep that brand support going." you know investing in ai not on the table That's the posture you want to have when you get this level of volatility. that's the posture you want to have when you get this level of volatility

Speaker 3: Great. You mentioned investing in AI. I want to hit on that before we close. It's been a focus for Colgate, actually, for a couple of years, and it was a big focus at CAGNY, mostly through the lens of Hill's. Shane, how is just digital investments in general, but AI specifically, changing the way that work is done within your region? Great. great You mentioned investing in AI. you mentioned investing in ai I want to hit on that before we close. i want to hit on that before we close It's been a focus for Colgate, actually, for a couple of years, and it was a big focus at CAGNY, mostly through the lens of Hill's. it's been a focus for colgate actually for a couple of years and it was a big focus at cagny mostly through the lens of hill's Shane, how is just digital investments in general, but AI specifically, changing the way that work is done within your region? shane how is just digital investments in general but ai specifically changing the way that work is done within your region

Speaker 2: Yeah. I think, as we talked about earlier, Steve, I think the company's made enormous multi-year progress on its data foundation and its AI agenda. I think generally, the application we have seen across the markets, including in North America, including in Latin America, has been really focused on a few distinct verticals. I would describe those verticals first and foremost, marketing. Efficiency of spend, but also speed and cost-effectiveness of content creation. We've seen secondly, it applied through innovation. Everything from trend tracking through to concept development and being able to get through those cycles at a much, much faster pace. Thirdly, our supply chain with obviously some obvious examples. Yeah. yeah I think, as we talked about earlier, Steve, I think the company's made enormous multi-year progress on its data foundation and its AI agenda. i think as we talked about earlier steve i think the company's made enormous multi-year progress on its data foundation and its ai agenda I think generally, the application we have seen across the markets, including in North America, including in Latin America, has been really focused on a few distinct verticals. i think generally the application we have seen across the markets including in north america including in latin america has been really focused on a few distinct verticals I would describe those verticals first and foremost, marketing. i would describe those verticals first and foremost marketing Efficiency of spend, but also speed and cost-effectiveness of content creation. efficiency of spend but also speed and cost-effectiveness of content creation We've seen secondly, it applied through innovation. we've seen secondly it applied through innovation Everything from trend tracking through to concept development and being able to get through those cycles at a much, much faster pace. everything from trend tracking through to concept development and being able to get through those cycles at a much much faster pace Thirdly, our supply chain with obviously some obvious examples. thirdly our supply chain with obviously some obvious examples Maybe one that I would point out, which I think has had really meaningful impact in North America in particular, but also in parts of Western Europe, is a tool that you may have heard about called Promo AI, which essentially allows us to take shipment data, thousands of promotional pieces of data by week, by customer, by geography, and scan data and put them into a large LLM, and then work with our customers to optimize the pricing plan. Maybe one that I would point out, which I think has had really meaningful impact in North America in particular, but also in parts of Western Europe, is a tool that you may have heard about called Promo AI, which essentially allows us to take shipment data, thousands of promotional pieces of data by week, by customer, by geography, and scan data and put them into a large LLM, and then work with our customers to optimize the pricing plan. maybe one that i would point out which i think has had really meaningful impact in north america in particular but also in parts of western europe is a tool that you may have heard about called promo ai which essentially allows us to take shipment data thousands of promotional pieces of data by week by customer by geography and scan data and put them into a large llm and then work with our customers to optimize the pricing plan I mention that example because it's providing concrete outcomes today and for U.S. customers with an ambition to expand it. We've seen real, concrete, positive outcomes from it with an ambition to scale it further. A couple of things we've learned about the application of a tool like that, which I think has been really powerful for the business as we drive the AI agenda. One is, developing these tools, what I would describe market back, which is what's the use case? What's the use case in the market, and then how do we develop the tool to serve that use case? I mention that example because it's providing concrete outcomes today and for U.S. customers with an ambition to expand it. i mention that example because it's providing concrete outcomes today and for u.s customers with an ambition to expand it We've seen real, concrete, positive outcomes from it with an ambition to scale it further. we've seen real concrete positive outcomes from it with an ambition to scale it further A couple of things we've learned about the application of a tool like that, which I think has been really powerful for the business as we drive the AI agenda. a couple of things we've learned about the application of a tool like that which i think has been really powerful for the business as we drive the ai agenda One is, developing these tools, what I would describe market back, which is what's the use case? one is developing these tools what i would describe market back which is what's the use case What's the use case in the market, and then how do we develop the tool to serve that use case? what's the use case in the market and then how do we develop the tool to serve that use case The other more practical piece is how are these tools getting integrated into the operating routines of the business? How do they meet the teams in terms of the routines and the ongoing cadence of the business? A tool like that we think has got ultimately global application, but obviously because of the trade dynamics, it's very focused on developed markets today, but more to come. The other more practical piece is how are these tools getting integrated into the operating routines of the business? the other more practical piece is how are these tools getting integrated into the operating routines of the business How do they meet the teams in terms of the routines and the ongoing cadence of the business? how do they meet the teams in terms of the routines and the ongoing cadence of the business A tool like that we think has got ultimately global application, but obviously because of the trade dynamics, it's very focused on developed markets today, but more to come. a tool like that we think has got ultimately global application but obviously because of the trade dynamics it's very focused on developed markets today but more to come

Speaker 3: We're almost out of time, but maybe in closing, two to three priorities that you'd want folks in the room to judge your progress against over the next year. We're almost out of time, but maybe in closing, two to three priorities that you'd want folks in the room to judge your progress against over the next year. we're almost out of time but maybe in closing two to three priorities that you'd want folks in the room to judge your progress against over the next year

Speaker 2: Terrific closing question, Steve. Thank you. I think, firstly at the company level, and this is probably obvious, reattaching the business to its long-term growth algorithm of 3%-5%. That's certainly a focus for us as a team. The team's proven we can do that, reattaching the business to that's going to be really important. Geographically, I think sustaining the outsize growth in Latin America is going to really matter, as you referenced earlier. Sustaining what we think is really solid performance in Hill's, in EMEA, early recovery of Asia, we think is very encouraging. If we can add on to that, recovery of North America over time, we think the company will give ourselves a good chance of reattaching into that 3%-5% space. Terrific closing question, Steve. terrific closing question steve Thank you. thank you I think, firstly at the company level, and this is probably obvious, reattaching the business to its long-term growth algorithm of 3%-5%. i think firstly at the company level and this is probably obvious reattaching the business to its long-term growth algorithm of 3%-5% That's certainly a focus for us as a team. that's certainly a focus for us as a team The team's proven we can do that, reattaching the business to that's going to be really important. the team's proven we can do that reattaching the business to that's going to be really important Geographically, I think sustaining the outsize growth in Latin America is going to really matter, as you referenced earlier. geographically i think sustaining the outsize growth in latin america is going to really matter as you referenced earlier Sustaining what we think is really solid performance in Hill's, in EMEA, early recovery of Asia, we think is very encouraging. sustaining what we think is really solid performance in hill's in emea early recovery of asia we think is very encouraging If we can add on to that, recovery of North America over time, we think the company will give ourselves a good chance of reattaching into that 3%-5% space. if we can add on to that recovery of north america over time we think the company will give ourselves a good chance of reattaching into that 3%-5% space Lastly, I would just say, one of the things that's really striking about the company is this truly has a global footprint. We think in this moment, that's a really advantaged place for us to be. Within that, we're obviously very focused on driving household penetration, market share, and competitiveness right across the geographies to make sure the model remains robust and sound. Lastly, I would just say, one of the things that's really striking about the company is this truly has a global footprint. lastly i would just say one of the things that's really striking about the company is this truly has a global footprint We think in this moment, that's a really advantaged place for us to be. we think in this moment that's a really advantaged place for us to be Within that, we're obviously very focused on driving household penetration, market share, and competitiveness right across the geographies to make sure the model remains robust and sound. within that we're obviously very focused on driving household penetration market share and competitiveness right across the geographies to make sure the model remains robust and sound

Speaker 3: All right. Right on time. With that, thank you, Shane. Thank you, John. Thank you, Colgate. Thank you, everybody in the room. Have a great conference. All right. all right Right on time. right on time With that, thank you, Shane. with that thank you shane Thank you, John. thank you john Thank you, Colgate. thank you colgate Thank you, everybody in the room. thank you everybody in the room Have a great conference. have a great conference

Speaker 2: Thanks, Steve. Thanks, Steve. thanks steve

Speaker 1: Thanks, Steve. Thanks, Steve. thanks steve